Central Bancompany (OTCMKTS:CBCY) reported second-quarter net income of $113.8 million, or $0.47 per share, as net interest income rose from a year earlier and the company expanded its presence in several metro markets.
The company generated a 2.24% return on average assets during the quarter. Adjusted net income increased $15.4 million, or 16%, from the second quarter of 2025, according to Chief Financial Officer Jim Ciroli.
Net Interest Income and Margin Expand
Ciroli said loan yields were relatively stable over the past year despite lower short-term interest rates and a shift in the consumer portfolio toward lower-yielding, lower-risk mortgage loans. The company has been reducing emphasis on higher-yielding indirect and other consumer lending while remaining selective in that segment.
During the second quarter, loan growth was broad-based, Ciroli said. Excluding the decline in other consumer loans, lending grew at a 6.5% annualized pace. The company ended the quarter with loan balances above average balances for the period, which Ciroli said provided momentum entering the following quarter. He added that loan pipelines remained robust and broadly comparable with those seen in the first half of 2025.
Management said loan pricing competition for the highest-quality credits was intense and may have intensified during the quarter. Central Bancompany has $1.3 billion of loans expected to reprice during the second half of the year, with those loans rolling off at an indicated yield of 5.8%.
Ciroli said the company sees an opportunity for loan yields to “grind higher” as those loans reprice, though the timing and magnitude could be affected by market rates and competitive pricing. He said deposit costs, adjusted for seasonal factors, were expected to remain largely stable.
Deposits, Fees and Securities Actions
The cost of deposits declined 3 basis points during the quarter, primarily because of a lower level of public fund deposits. Management expects public fund deposits to continue declining seasonally in the third quarter before increasing in the fourth quarter.
Total deposits rose 3% from a year earlier, while noninterest-bearing deposits increased 5% over the same period. Ciroli said the company does not seek to compete primarily for yield-focused deposits, instead emphasizing customer relationships, service and primary banking relationships.
The core fee income ratio was 24.5%, reflecting seasonal factors and growth in noninterest income. Central Bancompany participated in Visa’s share exchange offer during the quarter, converting a portion of its Class B shares and recognizing an $8.4 million gain.
The company also sold $210 million in shorter-duration securities, recording a $7.8 million loss, and reinvested proceeds into medium-term securities. Ciroli said the repositioning reduced asset sensitivity marginally and provided a 250-basis-point pickup in yield on the reinvested funds.
Assets under administration in wealth management totaled $17.3 billion at quarter-end. Ciroli said growth reflected market conditions, investment performance and net new client inflows. The company also saw higher fees at the client level. President and CEO John Ross said a recently launched private banking initiative was contributing to assets under management, though he said it was too early to assess its overall success.
Expenses and Credit Quality
The company posted a fully taxable equivalent efficiency ratio of 46.1%. Salary and benefit expense increased 5.3% sequentially, compared with a 4.9% linked-quarter increase a year earlier. Ciroli attributed the increase primarily to merit raises, along with $1 million in deferred compensation expense that was offset by other noninterest income and higher performance-related compensation.
Mortgage commissions were $1 million higher seasonally in the second quarter, as commissions are recognized when loans close and first-quarter results reflect lower-volume winter months.
Credit quality remained stable, with net charge-offs of 10 basis points for the quarter. The nonperforming asset ratio increased slightly after the company moved one small commercial loan into nonperforming status at quarter-end. Delinquencies fell to 22 basis points of total loans, helped by improvement in commercial loans and consumer credit cards.
Chief Credit Officer Eric Hallgren said the commercial loan downgrade was specific to the borrower and was not indicative of a broader change in asset quality, collateral risk or portfolio trends.
Capital, Buybacks and Growth Initiatives
Central Bancompany ended the quarter with approximately $1.9 billion of excess holding-company capital, equivalent to $7.98 per share, according to Ciroli. The board authorized a new $100 million stock repurchase program, replacing the $11 million remaining under a February authorization. The company had used $39 million of the earlier $50 million authorization.
Ross said management continues to see value in the shares at current levels and intends to use the authorization opportunistically, while weighing other uses of capital, including acquisitions and market liquidity considerations.
On mergers and acquisitions, Ross said there had been no change in the company’s strategy or in the status of potential transactions. He said Central Bancompany’s approach remains based on absolute valuations and on pursuing the types of transactions outlined during its initial public offering process.
Separately, the company opened three full-service branches during the quarter—one in St. Louis and two in Colorado—as part of its strategy to grow in underpenetrated metro markets.
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.
