Stellar Bancorp, Inc. (NYSE: STEL)

Stellar Bancorp, Inc., often recognized by its ticker symbol STEL, operates in the banking industry with a focus on community banking. Headquartered in Houston, Texas, the company runs 54 full-service banking centers, primarily located in the Houston and Beaumont areas. Its operations extend to 37 banking centers in the Houston Metropolitan Statistical Area (MSA), 16 in the Beaumont MSA, and one in Dallas. Stellar Bank, the company's wholly-owned subsidiary, offers a variety of commercial banking services predominantly to small- to medium-sized businesses, professionals, and individual clients within its markets.

Stellar Bancorp's business strategy is built on fostering strong customer relationships while maintaining a competitive edge against larger regional and national banks. This is achieved through principles of local decision-making, risk management, and a focus on small- to medium-sized businesses. The company's management team, bankers, and credit administration team prioritize risk management, supported by detailed policies and procedures for credit underwriting, funding, and administration.

In the competitive commercial banking industry, Stellar Bancorp faces challenges from various entities including commercial banks, savings banks, savings and loan associations, credit unions, finance companies, mutual funds, insurance companies, brokerage and investment banking firms, and certain other nonfinancial entities. The company believes that its community presence and personalized service enhance its ability to attract and retain customers.

The company's primary focus lies in attracting, developing, and engaging top-tier talent dedicated to serving its diverse stakeholders. As of December 31, 2023, Stellar Bancorp had a workforce of 980 employees, with 48% of them being non-white and 71% being women. The company is committed to providing a comprehensive and competitive compensation and benefits program to attract and retain top talent.

Stellar Bancorp is regulated by the Federal Reserve, the Texas Department of Banking, and the Federal Deposit Insurance Corporation (FDIC). These regulatory bodies oversee the company's operations through ongoing supervision, regulation, examination, and enforcement. The primary objectives of U.S. bank regulatory systems are to protect depositors, facilitate sound monetary policy, and promote fairness and transparency in financial products and services.

The company is subject to various regulatory requirements such as capital adequacy, reserve requirements, and anti-money laundering regulations. It is also subject to examination and examination fees by the FDIC and the Texas Department of Banking. Deposit insurance is provided by the FDIC, insuring deposits up to applicable limits. The company is also subject to deposit insurance assessments, based on average total assets minus average tangible equity.

In terms of consumer protection laws, Stellar Bancorp is subject to numerous federal and state laws governing its relationship with customers. These include the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Truth in Savings Act, the Electronic Fund Transfer Act, the Expedited Funds Availability Act, the Home Mortgage Disclosure Act, the Fair Housing Act, the Real Estate Settlement Procedures Act, the Fair Debt Collection Practices Act, and the Service Members Civil Relief Act, among others. Violations of these laws can result in significant potential liability from litigation brought by customers.

The company is also subject to the Community Reinvestment Act, encouraging banks to help meet the credit needs of their service areas, including low- and moderate-income neighborhoods. Stellar Bancorp is also subject to the Federal Reserve's guidance on incentive compensation policies and the SEC's rules requiring public companies to disclose material cybersecurity incidents and to disclose on an annual basis material information regarding their cybersecurity risk management, processes, strategy, and governance.