STEL Stock Forecast & Price Target

Stellar Bancorp Inc. has demonstrated a robust financial outlook, characterized by management's anticipated quarterly net interest margin (NIM) gains of 1–2 basis points in the latter half of 2025, with a medium-term target of a 4% core NIM, potentially enhanced by Federal Reserve rate cuts. The bank has also achieved notable core deposit growth, with 50% of new deposits coming from new customers, indicating an expansion of its customer base and deposit franchise. Additionally, loan originations have reached $640 million, marking the highest level since 2022, supported by a healthy pipeline that positions the company for strong growth in the third and fourth quarters of 2025.

Stellar Bancorp's net interest margin (NIM) decreased to 4.18%, showing a marginal decline of 2 basis points from the last quarter, with the core NIM at 3.95%. The pressures arising from the runoff of purchase accounting accretion are expected to adversely affect overall earnings growth, indicating potential challenges in sustaining profitability. Furthermore, the lack of visible catalysts for earnings improvement in the near term exacerbates concerns over the company's financial outlook.