Central Bancompany (OTCMKTS:CBCY) used its inaugural earnings call as a public company to highlight fourth-quarter profitability, stable credit quality, and early signs of renewed balance sheet growth, while reiterating that mergers and acquisitions remain a primary long-term use of excess capital.
Fourth-quarter results and balance sheet trends
President and CEO John Ross reported fourth-quarter net income of $107.6 million, or $0.47 per fully diluted share. The company posted a return on average assets of 2.17%, a net interest margin (fully taxable equivalent basis) of 4.41%, and an efficiency ratio (FTE) of 47%.
Ross also emphasized capital strength at the holding company, describing levels as “well above target,” with approximately $1.8 billion of excess capital, or $7.50 per share. Looking ahead, he said the company is focused on repeating historical earnings growth in 2026, including the “critical objective of prudently deploying” that excess capital.
M&A strategy and target criteria
In response to questions about capital deployment, Ross said acquisition activity has long been part of Central’s strategy, noting the company has completed 47 acquisitions over the past 50 years. He reiterated management’s framework discussed around the IPO: the company is looking to grow within existing markets and potentially expand into Texas, with an emphasis on “deals of size,” which he roughly equated to about $2 billion in assets.
Ross said Central is focused on “high-quality targets” with strong deposit and credit franchises and compatible cultures. He added that the company has outlined a list of about 30 institutions that meet its criteria and has been making introductions and holding conversations with at least half of those potential targets.
While Ross said he is “broadly encouraged by the environment,” he and other executives declined to provide deal timing, stating the company is more focused on the “right deal” than a timely one and would not offer more detail until an acquisition is announced.
Loan growth, production spreads, and rate sensitivity
Management declined to provide forward guidance on balance sheet growth but offered context for fourth-quarter trends. Ross said loan growth was broad-based and noted installment loans were not growing. He added that earlier in 2025, origination volume was “pretty robust,” but that growth was muted by elevated payoffs, which abated later in the year. He said pipelines remained strong and that reduced payoff activity helped drive period-end commercial and construction-and-development balances higher.
On loan pricing, executives said they were not seeing spread compression. Chief Financial Officer Jim Iroli described the portfolio as relatively granular, with a lower median ticket size than some larger peers and an “over-index” to fixed-rate lending. He said the bank continues to see spreads of roughly 300 basis points over comparable Treasuries across both variable-rate and typical fixed-rate products with two- to five-year tenors.
Iroli also noted that loan yields dipped modestly but remained “amazingly stable” despite 75 basis points of rate cuts late in the year, which he said underscored the company’s view that its sensitivity to the front end of the curve is relatively neutral.
Discussing interest-rate scenarios shown in the company’s materials, Iroli said management expects a “steepener” scenario rather than parallel shifts in rates. He said the forward curve implies two rate cuts later in the year and that the company’s exposure is more in the intermediate part of the curve than the front end. In that modeling, he said net interest income was shown rising 6% under a steepener scenario versus 3% in another case, and he added that higher intermediate rates would benefit net interest income. He also clarified that the base case assumes a static balance sheet and does not include growth.
Deposits, liquidity management, and fee businesses
On deposits, Iroli said some of the fourth-quarter increase is seasonal due to the bank’s public funds deposit-gathering business, which he said is about 17% of deposits. He explained that in Missouri, property taxes are collected at year-end, typically boosting balances in December. Normalizing for that effect, he said non-public deposits grew about 1.7% in the quarter. He also said deposits increased about 6% compared to the prior year-end, adding that the company is “growing deposits in the mid to upper single digits.”
Asked about how the company is managing liquidity raised in the IPO, Iroli said the bank expects the seasonal deposit build to remain on the balance sheet into the second quarter and potentially into the third. He said the company will keep “appropriate powder dry” in cash and invest the remainder, noting that with cash earning the overnight rate, there is not a strong imperative to extend duration. He said management is not expecting an overnight rate cut until the second half of the year, based on the forward curve, and intends to deploy excess cash “patiently” into “safe, relatively risk-free opportunities.”
On fee-related initiatives, Ross said assets under advice in the wealth business rose to $16 billion by quarter-end, attributing the increase to investment performance, outperformance versus benchmarks, and strong net new money flows—especially in the fourth quarter. He added that treasury management-related lines such as payments and service charges tend to show some seasonal falloff from the third to the fourth quarter, particularly in payments volumes, but said the company continues to invest in the business with the expectation of maintaining its historical growth rate.
Credit commentary, branch expansion, and tax-rate items
Chief Credit Officer Eric Halgren said the company has not seen specific signs of weakness or pockets of weakness in the loan portfolio. He noted some “composition shift” on the watch list from criticized to classified categories, but said management did not see significant movement in loss content. Halgren added that the company remains patient with borrower relationships but is not delaying resolutions, describing the bank’s markets as focused on managing outcomes for both clients and the bank.
On expansion plans, Chief Customer Officer Dan Westhues said Central expects new branches in St. Louis and Denver, Colorado, in 2026. He said the first St. Louis branch should come online in the next couple of months, with “at least two more for sure” in St. Louis during 2026. He added that one Colorado branch is expected to open by the second quarter and that the company is negotiating additional space for future locations.
Iroli also addressed the quarter’s effective tax rate, saying it included about 40 basis points of unusual items, with roughly 30 basis points out-of-period and 10 basis points attributable to the period.
In closing remarks, Ross thanked employees and highlighted community engagement, noting the team delivered more than 28,000 hours of community service in 2025. He also said the company’s consolidated Net Promoter Score improved by 2 points to 73.
About Central Bancompany (OTCMKTS:CBCY)
Central Bancompany, Inc is a bank holding company headquartered in Conway, Arkansas, and operates through its primary subsidiary, Central Bank. The company delivers community-focused banking services to individual consumers, businesses and institutions throughout central and northwest Arkansas. Central Bank’s branch network supports local markets by offering in-person and digital access to its product suite.
The company’s offerings span deposit accounts, consumer and commercial lending, residential mortgage financing and treasury management.
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