Stellar Bancorp (STEL) Stock Analysis: 52-Week High and Regional Banking Outlook

Based on my comprehensive analysis of Stellar Bancorp (STEL) and the regional banking sector, here is a detailed assessment:

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Stellar Bancorp (NYSE: STEL) has reached a

, reflecting strong investor confidence in this Houston-based regional bank. The stock has demonstrated impressive momentum:

Metric	Value
Current Price	$32.71
52-Week Range	$24.13 - $32.77
50-Day Moving Average	$31.25
200-Day Moving Average	$29.38
Period Return (Sep 2024 - Jan 2026)	+21.73%
Daily Volatility	1.78%

The stock is currently trading approximately

, with the 20-day MA ($31.53) above the 50-day MA ($31.25), indicating positive short-term momentum [0].

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Stellar Bancorp reported

($0.50 diluted EPS) for Q3 2025, demonstrating consistent profitability [1]. Key highlights include:

• Net Interest Margin (NIM) Expansion
  : Tax-equivalent NIM improved to
  4.20%
  from 4.18% in Q2 2025
• Net Interest Income Growth
  : Increased 2.3% quarter-over-quarter to $100.6 million
• Return on Tangible Common Equity (ROATCE)
  : Strong at
  11.45%
  annualized
• Return on Assets (ROAA)
  : Healthy at
  0.97%
  annualized [1][2]

The company’s CFO noted that NIM improvement was driven by “higher earning assets and deposit growth,” with the balance sheet well-positioned for future expansion [2].

Stellar Bancorp has maintained exceptional capital strength:

• Risk-Based Capital Ratio
  : 15.94% (well above regulatory minimums)
• Book Value Per Share
  : Increased to $31.20 (June 2025) from $30.89 (March 2025)
• Tangible Book Value Per Share
  : $19.94 (June 2025) [3]

This strong capital foundation provides flexibility for both organic growth and strategic acquisitions while maintaining resilience against potential credit headwinds.

The company’s Board authorized a

(through May 2026), demonstrating management’s confidence in the stock’s intrinsic value [3]. The company has been actively repurchasing shares at prices below current levels:

• Q1 2025: 1.4 million shares at weighted average of $27.99
• Q2 2025: 791,000 shares at weighted average of $26.08 [3]

Stellar Bancorp maintains prudent risk management:

• Net Charge-offs
  : Only $370,000 (0.01% of average loans) for the first six months of 2025
• Low risk exposure
  : Average funded loan size of approximately $510,000, providing portfolio diversification
• Limited commercial real estate concentration
  : Management has indicated measured exposure to CRE with long-standing client relationships [3][4]

As a Houston-based institution, Stellar benefits from the Texas economy’s relative strength, including:

• Population growth outpacing national averages
• Business relocations to the region
• Energy sector investment activity
• Manufacturing and infrastructure expansion [5]

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The regional banking sector is benefiting from several tailwinds that support continued investment:

Factor	Impact on Regional Banks
Fed Rate Normalization	100 bps of rate cuts since September 2024; favorable “normal-for-longer” environment [6]
Yield Curve normalization	Return to positively sloped yield curve (first time since late 2022) creates optimal conditions [6]
Loan Repricing	Fixed-rate loans originated during low-rate period (2020-2021) repricing at higher rates through 2026-2027 [6]
M&A Revival	More favorable regulatory environment expected to unlock deal activity [6]
Regulatory Relief	New administration expected to reduce capital requirement volatility and streamline merger approvals [6]

Regional banks are experiencing NIM improvement as:

1. Deposit costs stabilize
   after the rapid rate hike cycle
2. Fixed-rate loans reprice
   at higher rates (typical 5-year maturity loans now rolling over)
3. Yield curve steepens
   , improving the spread between funding costs and loan yields [6]

Regional bank valuations remain compelling relative to historical averages and the broader market:

Metric	Regional Banks	Historical Avg	S&P 500
Forward P/E	~11.83x	Higher	~20x+
Price-to-Book	~1.15x	Higher	~3-4x
EPS Growth (2025-2026)	Mid-to-high teens	-	~10%

The sector trades at a significant discount to historical levels, with earnings growth of

expected in both 2025 and 2026 [6].

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1. Continued NIM Expansion
   : As deposit costs normalize and loan repricing continues, NIM should improve throughout 2025-2026
2. Loan Growth Acceleration
   : Fed rate cuts and reduced regulatory uncertainty should drive increased borrowing activity
3. M&A Opportunities
   : Streamlined regulatory approval process may enable transformational acquisitions
4. Insider Buying
   : Recent Form 4 filings indicate insider confidence in the stock’s trajectory [7]
5. Dividend Growth
   : Stellar raised its dividend by 7%, demonstrating commitment to shareholder returns [8]

1. Valuation Concerns
   : After a 35%+ rally from 52-week lows, some upside may be priced in [9]
2. Texas Concentration Risk
   : Geographic concentration exposes Stellar to Texas-specific economic conditions
3. Competitive Pressure
   : Intense competition for deposits and loans in the Texas market
4. Commercial Real Estate Exposure
   : While manageable, CRE weakness could impact credit quality
5. Interest Rate Sensitivity
   : Further Fed cuts could compress NIM if deposit rates don’t decline proportionally

• Trend
  : Stock trading above all major moving averages (20-day, 50-day, 200-day)
• Momentum
  : 20-day MA above 50-day MA indicates positive short-term trend
• Support
  : 50-day MA at $31.25 provides technical support
• Beta
  : 0.78 (less volatile than the broader market) [10]

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Stellar Bancorp’s current valuation metrics:

Metric	Value	Assessment
P/E Ratio	~15.83x	Reasonable for a growth-oriented regional bank
Price-to-Book	~1.05x	Below historical average; attractive
Dividend Yield	~1.8%	Solid income component
Market Cap	$1.57-$1.67 billion	Mid-cap regional bank

Compared to the regional banking sector average of ~11.83x forward P/E and 1.15x P/B, Stellar trades at a modest premium but justifies this with:

• Stronger capital ratios than peers
• Consistent profitability metrics
• Texas growth market exposure
• Active share repurchase program [6][10]

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, including strong Q3 2025 earnings, expanding net interest margins, robust capital position, and a shareholder-friendly capital return program. The stock’s technical momentum remains positive, with trading activity suggesting continued investor interest.

, but with appropriate selectivity. The sector’s attractive valuations (11.83x forward P/E, 1.15x P/B) represent a meaningful discount to historical averages and the broader market. The combination of:

• Improving net interest margins
• Accelerating loan growth
• Regulatory relief expectations
• M&A catalyst potential

…suggests the regional banking sector could experience continued multiple expansion and earnings growth through 2026.

, investors with a medium-to-long-term horizon may find the current level attractive, particularly for:

• Income-oriented investors (1.8% dividend yield)
• Value investors seeking quality regional banks at reasonable multiples
• Growth investors betting on Texas economic momentum

However, investors should monitor the Q4 2025 earnings call (scheduled for January 30, 2026) for updates on loan growth trends, NIM trajectory, and management’s outlook for 2026 [7].

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[0] Market Data - Stellar Bancorp (STEL) Price Analysis
[1] Stellar Bancorp Q3 2025 Earnings Release (October 24, 2025)
[2] Stellar Bancorp Q3 2025 Earnings Call Transcript - Investing.com
[3] Stellar Bancorp Investor Relations - Quarterly Results
[4] Stellar Bancorp SEC Filing 10-K (December 2024)
[5] Regional Bank Rebound: 3 Overlooked Banks to Watch in 2026 - Nasdaq
[6] Five Reasons Why 2025 Could Be Another Strong Year for U.S. Regional Banks - JH Investments
[7] Stellar Bancorp Announces Fourth Quarter 2025 Earnings Release - Business Wire
[8] Stellar One Raises Dividend by 7% - Yahoo Finance
[9] Has Stellar Bancorp’s 2025 Rally Gone Too Far? - Yahoo Finance
[10] Stellar Bancorp Inc (STEL) PE Ratio Analysis - Newsdaemon