Central Bancompany (OTCMKTS:CBCY) reported first-quarter 2026 net income of $111.1 million, or $0.46 per fully diluted share, as management pointed to steady asset quality, continued balance sheet growth, and increased capital returns to shareholders.
During the company’s earnings call, President and CEO John Ross also highlighted external recognition, noting Central Bancompany was again named one of “America’s Best Banks” by Forbes and was recognized by S&P Global Market Intelligence as the best performing U.S. public bank with more than $10 billion in assets.
Quarterly performance and balance sheet trends
On balance sheet trends, Ross said the company remained “encouraged by the continued resumption of growth,” citing ending loans excluding “other consumer” of nearly 6% annualized quarter-over-quarter and average deposits up 5% year-over-year.
Net interest margin drivers: loan repricing, fees, and deposit costs
Responding to questions about loan yields and the rate environment, CFO James Ciroli said loan yields declined only modestly on a linked-quarter basis, down 3 basis points, and he attributed most of the movement to loan fees. “Almost all of that was loan fees just coming off of higher prepayment fees in the prior quarter,” Ciroli said, adding that fewer prepayments in the first quarter contributed to the change.
Ciroli also said the company repriced about $400 million of loans during the quarter and expects about $1.8 billion of additional repricing for the rest of the year. He described the repricing yields as “like a 580-ish type yield” and said the company continues to see loan opportunities at “300 basis points over similar maturity treasuries,” which he suggested could provide upside to NIM as repricing continues.
On the funding side, Ciroli said deposit costs declined 5 basis points in the quarter. However, he emphasized that deposit mix and seasonal public funds flows were important factors. He pointed to “shifts higher in public funds” that were discussed on the prior call and said the company added a slide to the presentation to provide transparency on the seasonal dynamics. Ciroli said public fund deposits began to decline by quarter-end, with ending balances below average balances, consistent with prior expectations.
Later in the call, Ciroli also discussed how deposit pricing adjustments occur in practice for the company’s largely non-maturity base. He noted that about 90% of deposits are non-maturity and that bringing costs down after late-2025 rate cuts requires active, customer-level work by market leadership rather than an automatic repricing process. He said the company still views a “low 20s beta” as appropriate given the characteristics of the deposit base, but added “that’s going to take a little while to come in.”
Asset quality: isolated commercial pockets, no systemic stress indicated
Ross said asset quality remained consistent during the quarter, with net charge-offs again at 10 basis points and the allowance for credit losses covering 130 basis points of total loans.
In Q&A, Chief Credit Officer Eric Hallgren addressed an uptick in delinquencies that analysts noted was driven by commercial loans. Hallgren said the increase was concentrated in “a small number of markets” and tied to “a handful of commercial clients.” He added that the company does not expect the delinquencies to worsen and anticipates resolution, describing the issues as “isolated pockets of stress” rather than evidence of systemic weakness.
Capital deployment: dividend increase, buybacks, and M&A commentary
Ross said holding company capital remains well above target, with approximately $1.9 billion of excess capital, or $7.80 per share. He said the company “leaned into capital deployment” during the quarter by announcing a “meaningful increase” to the quarterly dividend and repurchasing $32 million of shares.
Discussing capital allocation, Ciroli said excess capital increased quarter-over-quarter even after buybacks and the dividend step-up, rising from $1.8 billion to $1.9 billion. He also said “more than half of our tangible book value is excess capital,” and argued that, based on the company’s view of valuation, the stock remained inexpensive. Ross added that the company evaluates repurchases using a framework similar to how it assesses bank acquisitions, including return-on-invested-capital considerations, and pointed to what he called the attractiveness of repurchasing stock at a single-digit forward price-to-earnings multiple for the “core bank.”
On M&A, Ross said excess capital remains a “major focus” and that the company is “in active discussions,” but he cautioned that “nothing is imminent” and said management had “no real updates” versus the prior quarter.
Ross also noted that management was “pleasantly surprised” by an increase in the stock’s liquidity, which he said could create more opportunity for repurchases going forward. He said the company had initially been somewhat constrained in executing its existing authorization due to concerns about affecting trading liquidity.
Expenses and other revenue items
Asked about expense performance and operating leverage, Ciroli said the quarter reflected an expense run rate that included previously signaled incremental public company costs of about $5 million per year. He also said the company remains in the middle of a core conversion and capitalized $700,000 of the related spending during the quarter. While he expects a modest impact from merit increases in March, Ciroli said he does not anticipate “much of an uptick.”
On payments revenue, Ciroli acknowledged typical seasonality from the fourth quarter to the first quarter but said the company remains positive about trends. He said that, on a year-over-year basis, management is still seeing consumers spending without concern and described “nice growth” on the commercial side tied to programs being implemented, adding that the company remains “pretty sanguine about that business” looking ahead.
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.
