Central Bancompany Q3 2026 Profit Rises 19.7% on Net Interest Income Growth

Central Bancompany reported third-quarter 2026 net income of $116.2 million, up 19.7% from a year earlier, as higher net interest income and growth in wealth management fees outweighed weaker mortgage banking revenue and increased compensation costs. Diluted earnings per share rose 9.9% to $0.48, while adjusted net income increased 13.4% to $116.1 million.

Net interest income rose 10.0% year over year to $218.9 million. On a fully taxable-equivalent basis, net interest income was $220.5 million and net interest margin widened to 4.51% from 4.39% a year earlier and 4.43% in the second quarter. Average earning assets increased 7.1%, supported by deposit growth and higher capital. A securities repositioning completed in the prior quarter contributed about $1 million of incremental net interest income and two basis points to the third-quarter margin.

The company reported $66.8 million of noninterest income, up 17.0% year over year but down 4.0% sequentially. Excluding net investment securities gains and losses, adjusted noninterest income increased 4.0% from a year earlier to $66.6 million.

Wealth management was the strongest fee-income contributor, with revenue rising 16.7% to $23.6 million as assets under advice increased 13.8% to $17.5 billion. Payment services revenue grew 4.0% to $17.8 million, supported by higher transaction volume and count. Service charges and commissions increased 3.3% to $15.4 million.

Mortgage banking revenue declined 14.3% year over year and 16.9% from the second quarter to $8.8 million. Central Bancompany attributed the decrease primarily to lower origination volumes in a higher interest-rate environment. The fee income ratio was 23.4%, compared with 22.3% a year earlier.

Expenses and lending

Noninterest expense totaled $131.0 million, up 3.2% year over year and down 0.3% from the previous quarter. Salaries and employee benefits increased 6.3% to $80.0 million, reflecting merit increases and higher performance-based compensation. Legal and professional fees fell 13.9% to $5.3 million because of lower technology consulting costs.

The GAAP efficiency ratio improved to 45.9% from 49.6% a year earlier. The fully taxable-equivalent non-GAAP efficiency ratio was 45.4%, compared with 47.7% in the prior-year quarter and 46.1% in the second quarter.

Loans held for investment reached $11.7 billion at quarter-end, increasing 0.5% sequentially and 3.6% year over year. Excluding the intentional reduction in other consumer loans, the company said loan growth was 0.8% from the prior quarter and 5.2% from a year earlier.

Commercial real estate loans rose 4.6% year over year to $5.0 billion, including a 5.8% increase in non-owner-occupied commercial real estate. Residential mortgage loans grew 7.5% to $3.5 billion, while home equity lines of credit increased 16.8% to $457 million. Other consumer loans fell 27.0% to $429 million as the company continued to rebalance its consumer installment portfolio.

Average deposits increased 4.4% year over year to $15.4 billion. Average noninterest-bearing deposits rose 6.2% and represented 36% of average balances. The total deposit cost was 1.11%, versus 1.19% a year earlier and 1.10% in the previous quarter. Non-time accounts represented 90% of period-end deposits, while uninsured and uncollateralized deposits, excluding intercompany accounts, accounted for 21.8%.

Capital deployment and credit trends

Central Bancompany ended the quarter with a common equity Tier 1 ratio of 29.1%, up from 28.6% in the second quarter. The company estimated that it held $2.0 billion of capital above its long-term CET1 target of 13.5%, equivalent to $8.28 per share. Tangible book value per share was $14.58, up 9.7% year over year but down 0.7% sequentially.

Management said it continues to explore acquisitions with attractive returns on invested capital and views excess capital as available for rapid deployment. The company also repurchased $3.8 million of shares during the quarter at an average price of $31.02 under its $100 million authorization.

Credit metrics remained contained but showed some increases. Nonperforming assets rose to 0.33% of total assets from 0.30% in the second quarter and 0.30% a year earlier. Annualized net charge-offs were 0.12% of average loans, up from 0.10% sequentially and unchanged from a year earlier. Delinquent loans represented 0.24% of loans held for investment, compared with 0.22% in the prior quarter and 0.21% a year earlier. The allowance for credit losses was $150.9 million, or 1.29% of loans held for investment.

The presentation identified fixed-rate principal roll-offs of about $700 million in loans carrying an average 6.0% rate during the fourth quarter, followed by approximately $2.2 billion at the same average rate in 2027. Securities roll-offs are expected to total about $200 million at 4.2% in the fourth quarter and $1.1 billion at 4.3% in 2027. The company did not provide formal earnings guidance, and cautioned that forward-looking expectations remain subject to competitive conditions, interest-rate changes and other operational and economic uncertainties.