Central Bancompany(CBC) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Central Bancompany reported a net income of $107.6 million, or $0.47 per fully diluted share, with a return on average assets of 2.17% [3] - The net interest margin on an FTE basis was 4.41%, and the efficiency ratio on an FTE basis was 47% [3] - Asset quality remained stable with net charge-offs at 10 basis points and an allowance covering 131 basis points of total loans [3] - Capital levels at the holding company were well above target, with approximately $1.8 billion of excess capital, equating to $7.50 per share [4] Business Line Data and Key Metrics Changes - The company experienced a 1% quarter-over-quarter increase in ending loans and a 1.7% increase in non-public deposits [4] - The wealth management segment saw assets under advice grow to $16 billion, driven by strong investment performance and net new money [36] - Treasury management initiatives showed some seasonality, with a noted falloff in payments volume in the fourth quarter [37] Market Data and Key Metrics Changes - The company noted a robust origination volume year-to-date in 2025, which was previously muted by higher levels of payoffs [16] - Non-public deposits grew by 1.7% in the quarter, with a year-over-year growth of approximately 6% [25] Company Strategy and Development Direction - M&A remains a core part of the company's strategy, with a focus on acquiring high-quality targets with approximately $2 billion in assets [9] - The company is looking to expand into Texas while continuing to grow in existing markets [9] - The management emphasized a disciplined approach to deploying excess capital, prioritizing M&A opportunities [27] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the resumption of balance sheet growth and the potential for continued loan growth, although they refrained from providing specific guidance [13] - The company is focused on maintaining consistent credit underwriting standards, regardless of market conditions [15] - Management indicated that they do not foresee significant changes in spreads for new loan production, maintaining around 300 basis points over comparable Treasuries [22] Other Important Information - The company achieved a Net Promoter Score improvement of 2 points to 73 across its business lines [3] - The management team highlighted the importance of community service, with over 28,000 hours contributed in 2025 [2] Q&A Session Summary Question: Update on M&A opportunities - Management confirmed that M&A is a core strategy, with ongoing discussions with potential targets and a focus on high-quality acquisitions [9][10] Question: Balance sheet growth pace - Management noted that loan growth was broad-based and indicated that customer demand will dictate future growth [13][15] Question: Spreads on new loan production - Management reported no spread compression and maintained spreads around 300 basis points over Treasuries [22] Question: Seasonal impact on deposit growth - Management acknowledged that a portion of deposit growth was seasonal due to property tax collections but emphasized overall strong growth [25] Question: Capital deployment post-IPO - Management reiterated that M&A opportunities are the primary focus for deploying excess capital raised during the IPO [27] Question: Wealth and treasury management growth - Management reported growth in assets under advice and ongoing investments in treasury management to sustain historical growth rates [36][37] Question: Credit portfolio health - Management indicated that there are no significant weaknesses in the credit portfolio, with a stable net charge-off rate [52][53]