Stellar Bancorp, Inc. (NASDAQ:STEL) Q3 2023 Earnings Call Transcript

Matt Olney: Okay. I appreciate that. And then, on the fee side, fees were a little bit slower this quarter. And I know the Durbin impact started in 3Q, but it still looks like there were some — maybe some other impacts in there, the third quarter, or perhaps Durbin may have been more than we expected. I can’t — it’s tough to see from my seat. Any color on fees in third quarter and the outlook here?

Paul Egge: Sure. All I can acknowledge is Durbin has been a little bit more than our expected impact.

Bob Franklin: We also sort of follow the trend of we are not charging NSF fees any longer.

Matt Olney: And Bob, on that last point, when did you implement that? Is that third quarter-start?

Bob Franklin: This last quarter, yeah.

Paul Egge: Mid-August.

Matt Olney: Okay. Perfect. And then I guess on capital, we are seeing a nice capital build. I know when the bank was put together there was expectation of some rapid capital build, and Bob mentioned earlier, the environment has changed over the last year since the deal was put together. So, we’d love to hear any updated thoughts on capital expectations of continued build. And then with the excess capital, what your updated thoughts around deployment of such capital?

Bob Franklin: Yeah, Matt, I think we’re very comfortable with the fact that we’re building capital that give us some optionality. We think it allows us to look at various ways to deploy that, whether that be M&A, whether that be buybacks, whether that’d be increased dividends, all these things we’re looking at. There’s also safety in capital build to make sure that you can get through difficult times, if those approach us. So, we’re trying to keep all options on the table to see where we go with that. But it’s a good problem to have I think in trying to give optionality to as we move into ’24 and decide what that looks like for us and what we want to do with that. But we want to continue to build this organization, so the best use of that is to help us continue to build and grow.

Matt Olney: Okay. Agree with the optionality, good to have in this kind of environment. Okay, that’s all from me guys. Thanks for your help.

Bob Franklin: Thank you, Matt.

Paul Egge: Thanks, Matt.

Operator: Thank you. I’d now like to turn the call back over to Bob Franklin for any closing remarks.

Bob Franklin: Thank you for your interest in Stellar Bancorp. And with that, we are adjourned.

Operator: Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.