Central Bancompany Posts Record Quarter, Doubles Buyback
Central Bancompany (CBC) grew net income to $113.8 million as its net interest margin expanded for a third straight quarter to 4.40%.
Central Bancompany (CBC) reported second-quarter net income of $113.8 million, or $0.47 a diluted share, up 24.5% from $91.4 million, or $0.41, a year earlier. The bank holding company's results rose 2.4% from $111.1 million in the first quarter of 2026.
The quarter marked the third consecutive period of net interest margin expansion for the Missouri-based lender. Net interest margin reached 4.40%, up 8 basis points from 4.32% in the first quarter and up 13 basis points from 4.26% a year earlier, with the year-to-date margin at 4.36% versus 4.23% in the prior-year period. Net interest income rose $17.7 million year over year to $212.8 million, attributed to the wider margin and 6% growth in average earning assets.
Loan growth continued at a measured pace. Average total loans held for investment grew to $11.6 billion, up 1% from the prior quarter and up 1.1% from a year ago. Excluding other consumer loans, the increase was 2% quarter over quarter, as Central Bancompany kept pulling back from indirect consumer lending, a category that fell $37.8 million on an average basis during the quarter and dropped 27.5% year over year at period end. Average total deposits rose 3.0% year over year to $15.4 billion, led by 5% growth in noninterest-bearing demand deposits and 4% growth in interest-bearing non-maturity balances, even as total deposits slipped 1.1% from the first quarter on seasonal patterns. The cost of deposits fell to 1.10%, down 9 basis points from a year earlier, adding to the margin gains despite a competitive deposit market.
Noninterest income jumped 38.9% year over year to $69.6 million. Wealth management fees rose 20% from a year ago and $1.0 million from the first quarter, while assets under advice climbed to $17.3 billion, up 8% from the first quarter and 22% from a year earlier. The year-over-year comparison also reflected the absence of a $13.6 million loss on a consumer lease portfolio sale booked in the prior-year quarter, offset in part by two new items: an $8.4 million gain tied to Visa Class B shares and a $7.8 million loss from a securities repositioning. Noninterest expense rose $4.6 million from a year ago to $131.4 million, and the efficiency ratio improved to 46.1% from 48.4% a year earlier, though it ticked up slightly from 45.7% in the first quarter.
Credit quality showed mixed signals. Nonperforming assets rose to $60.2 million, or 30 basis points of total assets, from $54.8 million a quarter earlier, with nonperforming commercial loans up 23.2% from the first quarter to $28.4 million. The provision for credit losses climbed 12.4% from the prior quarter to $3.5 million on loan growth and $3.0 million of net charge-offs. Even so, net charge-offs as a share of average loans improved on a year-to-date basis to 0.10% from 0.14%, with commercial net charge-offs down 74.5% from a year earlier.
Capital levels remained well above the company's targets. The common equity Tier 1 ratio held at 28.6%, up 480 basis points from 23.8% a year earlier and representing $1.9 billion of capital above the bank's 13.5% long-term target. Book value per share rose to $16.14 from $15.84 in the first quarter and $14.38 a year earlier, while the closing stock price climbed 26.8% from the prior quarter to $30.38.
Central Bancompany rescinded its prior share repurchase authorization on August 3, 2026, and approved a new $100 million buyback, after repurchasing about 280,000 shares for $7.6 million during the second quarter. The regular quarterly dividend held at $0.12 a share, down from $0.855 a year earlier, when the company paid a special distribution tied to its initial public offering.