Central Bancompany, Inc.

Good day and thank you for standing by. Welcome to the Central Bank Company third quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand has been raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, John Ross, President and CEO. Please go ahead.

Thank you, operator. Good morning, and thank you for joining us for Central Bank Company's third quarter 2026 earnings call. With me in the room today is our Chief Financial Officer, Jim Ciroli, Chief Customer Officer, Dan Westhues, and Chief Credit Officer, Eric Holdren. As a reminder, I'd like to point out that the discussion today is subject to the same forward-looking considerations outlined on page four of our press release. I'd like to share two notable central banker promotions before we dive into the third quarter financials. Matt Adams, who joined us 19 years ago and most recently served as our senior lender in Oklahoma, has been elevated to CEO of that region. Brandy Bryant, who has been with us for over 28 years and has most recently served as a market CEO, has been promoted to the newly created position of head of consumer and small business lending, a strategic focus for our company. Congratulations, Brandy and Matt, on your well-deserved new roles. Now, moving on to financials. We are pleased to report net income of $116.2 million in the third quarter, or $0.48 per share. which resulted in a return on assets of 2.27%. Net interest income of $218.9 million this quarter up $20 million from the prior year quarter. We posted 4.51% FTE net interest margin up 12 basis points from the prior year quarter. The cost of deposits was down 8 basis points from the same quarter last year reflecting the rate cuts we had late last year. While we have been disciplined in our deposit pricing and expect that to continue, the unusual turbulence of the current rate environment introduces uncertainty and time will tell as to our deposit cost beta from here. Irrespective, we remained well positioned for higher interest rates. Our core fee income grew 4% year-over-year or 8% excluding mortgage. While mortgage revenues have declined this quarter, we are pleased that originations remain profitable on a direct cost basis. Turning to expenses, our FTE efficiency ratio for the quarter was 45.4%. Overall, expenses remain well controlled. As we have disclosed previously, we are in the process of terminating our pension plan, which was frozen in 2018. We have now contracted the associated termination payments and expect to record a non-recurring pre-tax gain of approximately $27 million in the fourth quarter. As for credit, it again remained benign with just 12 basis points of net charge-offs in the quarter. Lastly, our capital levels remain well above target with $2 billion of excess capital or $8.28 per share. We repurchased a minimal amount of shares during the quarter and still have $96 million of repurchase authority remaining. We see value in the shares at current levels as outlined in our deck, But we will continue to be opportunistic with our repurchases in light of our limited authorization. With that, I'd like to open the line for questions. Operator?

Certainly. As a reminder, to ask a question, please press star 1-1. One moment, please. Our first question comes from the line of Ryan Kenney with Morgan Stanley.