Stellar Bancorp, Inc. (NASDAQ:STEL) Q4 2023 Earnings Call Transcript

Matt Olney: Okay. Thanks for that, Bob. And let me ask it this way. The capital level is built really nicely in ’23. It looks like they’re going to build considerably in ’24, absent any kind of other actions. Would that be acceptable, you think, for capital level to continue to build? Or at what point do you feel more urgency to deploy capital? I’m trying to figure out if this is something where we’re getting close to that or give the uncertainty we could let capital levels built here for a while before we feel any urgency to deploy it.

Robert Franklin: That’s a great question, Matt. I enjoy the joust. If we think about where we might be from an economy standpoint, if life comes true and we get five interest rate cuts this year or whatever somebody might project, to me, that means unemployment is going up, economy is slowing down, maybe credit starts to move in a certain way. I don’t know. I don’t think there’s much certainty around it. Interest rates stay the way they are. Maybe a couple of small cuts gives us a better — and I think we’ll have more clarity as we move into the second and third quarter. But we’re not against buybacks. We actually like buybacks. But we want to make sure that we have a good solid capital base to operate on that no one is questioning our ability to do what we want to do. And we want to keep our options open. And we will — we certainly understand what we can do with that capital, and we’re going to do the best thing for the shareholders.

Matthew Olney: Okay, guys. Appreciate all the commentary, and see you guys in a few weeks.

Robert Franklin: Thanks.

Paul Egge: Thanks, Matt.

Operator: We have no further questions in our queue at this time. I will now turn the call over to Bob Franklin, Chief Executive Officer, for closing remarks.

Robert Franklin: Thank you, everyone, for their interest today. We look forward to 2024 and continuing to build Stellar Bank in a great way. Thank you very much.

Operator: This concludes today’s conference call. Thank you for your participation, and you may now disconnect.