Stellar Bancorp, Inc.

Good day and thank you for standing by. Welcome to the Stellar Bank Corp Anchor Report's second quarter 2023 results conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, Courtney Theriault, Chief Accounting Officer. Please go ahead.

Good morning. Our team would like to welcome you to our earnings call for the second quarter of 2023. This morning's earnings call will be led by our CEO, Bob Franklin, and CFO, Paul Eddy. Also in attendance today are Steve Resloff, Executive Chairman of the company, Ray Vitulli, President of the company and CEO of the bank, and Joe West, Senior Executive Vice President and Chief Credit Officer of the bank. Before we begin, I need to remind everyone that some of the remarks made today constitute all of these statements as defined in the Private Securities Litigation Reform Act of 1995 as amended. We intend all such statements to be covered by the State House of Provisions for forward-looking statements contained in the Act. Also note that if we give guidance about future results, that guidance is only a reflection of management's belief at the time the statement is made and such beliefs are subject to change. We just claim any obligation to publicly update any forward-looking statements, except as may be required by law. Please see the last page of the text in this morning's earnings release, which is available on our website at ir.stellerbankcorpinc.com for additional information about the risk factors associated with forward-looking statements. At the conclusion of our remarks, we will open the line and allow time for questions. I will now turn the call over to our CEO, Bob Franklin.

Thank you, Courtney. and good morning. Welcome to the Stellar Bank Corp second quarter earnings call. I begin by thanking the great team at Stellar Bank for their continued and tireless efforts to build Stellar Bank into the premier local bank in our markets. Our team has been busy refining processes post conversion and will continue in their work as we move through the year. We will be concentrating on efficiencies through technology and expense control as we better define our needs as a combined organization. This year has had its challenges with rapidly rising interest rates, bank failures, and uncertainty in the economy. There continues to be pressure on industry margins as we see inflation in people costs, funding, deposit costs, and competition for the dollars we held in our institutions at low cost for years. However, we are seeing a slowdown in deposit runoff while also seeing the beginning of a stabilization of deposit costs. Though we are not able to call bottom for NIM compression because of uncertainty with the Fed actions, we certainly feel that downward pressure is easing. We continue to concentrate our efforts on capital, liquidity, and credit, something we began almost a year ago. We have tightened our credit underwriting while still seeing modest loan growth. We have managed our deposit rate increases, Though we saw some out migration earlier in the year, we have seen moderation of those outflows and we have begun attracting new deposits. We have been able to maintain our target of a low 90s loan to deposit ratio, all in an effort to manage through the current economic uncertainties. As we move through the balance of the year, we will continue these efforts. Our goal is to ready our institution for the opportunities that will be caused by the stresses of the last year. We believe that our industry will continue to consolidate, and we intend to be positioned to benefit from that consolidation. Our shareholders will benefit from our efforts and the great markets that we serve. I'll now turn the call over to Paul Egge, our CFO.