Central Bancompany, Inc. (CBC) stock intrinsic value fair value estimate & owner earnings analysis

Central Bancompany is the Jefferson City, Missouri holding company for The Central Trust Bank, a family-controlled community bank founded in 1902 that listed its shares in November 2025. It has about $20.3 billion of assets, 155 branches across Missouri, Kansas, Oklahoma, Colorado and Florida, roughly $15.4 billion of deposits (about 36% of them non-interest-bearing) and $11.7 billion of loans. Earnings come from the spread on a low-cost deposit base plus fees from wealth management (about $16 billion under advice), mortgage banking, card and service charges. The Cook family retains voting control through a voting trust, so outside shareholders have no say over strategy, capital or a sale. Owner earnings. Because this is a bank, interest paid to depositors is treated as an operating cost and no debt is subtracted. Starting from operating cash flow, we removed working-capital swings, charged stock compensation and maintenance capital spending, and checked the result against net income plus non-cash items. Owner earnings were about $347 million ($1.57 a share) in 2024 and $383 million ($1.72 a share) in 2025. The filings available cover only these two years, which is a short record. Both years were depressed by losses taken on disposing of low-yielding bonds ($36.7 million in 2024, $6.8 million in 2025), a deliberate repositioning that lifted the net interest margin from 3.84% to 4.30%. We treat the 2025 level and the first half of 2026 (net income of $225 million, up 21% on the prior year, with credit costs still low) as evidence that about $400 million a year is the current normal earning power on roughly 240 million diluted shares. That is about $1.67 a share on today's larger share count, since the IPO added about 20 million shares in late 2025. Owner earnings grew about 10% in 2025, but most of that came from the one-time securities repositioning and from low credit costs. The base case therefore starts year one at 2.5%, well below the trailing rate. Base case: about $33 a share. Owner earnings of about $400 million grow 2.5% a year. That rate comes from the bank's demonstrated record of adding about 3% more households a year since 2016 and slowly gaining deposit share in its footprint, all funded from its own earnings. We gave no credit to further margin expansion, to faster growth in Denver, Oklahoma or Florida, or to deploying the IPO proceeds. None of those has been demonstrated yet. The franchise has run for 124 years, and its low-cost, granular deposit base (median consumer deposit about $1,400) is the structural reason the earnings continue beyond year ten. Bear case: about $23 a share. Margins drift back toward 2024 levels as rates fall, and owner earnings slip to about $350 million. Then a full credit cycle arrives in years three to five. We sized it from the experience of US regional banks in 2008 to 2010, when commercial and consumer losses ran at 1.5% to 2% of loans for several years. That means roughly $150 to $200 million a year of extra losses and reserve building on a $11.7 billion loan book, cutting owner earnings to about $205 million for two years before they recover to about $350 to $360 million. Charge-offs today are only 0.12% of loans, so this is a large shock relative to the bank's own recent record. The bank earned at least a 1% return on assets every year from 2008 to 2012, which supports the view that it would stay solidly profitable. Its equity of $3.87 billion against $20.3 billion of assets, about 19%, means no dilution would be needed. The bear value is above tangible book value of about $14.70 a share. We think that is justified because this deposit franchise kept earning through the last severe downturn, and the value of its non-interest-bearing deposits does not disappear in a recession. Bull case: about $38 a share. Owner earnings settle near $450 million as the repositioned securities portfolio keeps earning higher yields and fee businesses grow, and they then compound at 3% on the household-growth record. We gave no credit to acquisitions or to any rerating of the business. Margin-of-safety price. We are moderately confident in the earnings level. The business is simple and very well capitalized, but we have only two years of detailed filings, and part of 2025's strength comes from a rate environment that can reverse. The worst plausible outcome is a severe Midwestern commercial-real-estate or agricultural credit downturn combined with falling rates that compress the margin. The bank's capital, mostly-insured granular deposits and history through 2008 to 2012 suggest it would survive that intact. The family's voting control means owners cannot force a sale or capital return. The things we are most likely to be wrong about are how much of the 4.30% margin lasts and how deep a future credit cycle would be. If both prove wrong, the shares are worth roughly $20 to $23. The business pays a dividend of about $0.48 a share a year and has started repurchasing shares ($38.7 million in the first half of 2026), on owner earnings of about $1.67 a share. At $18 that is roughly a 9% owner-earnings yield, and a move toward the base value over about three years implies a 20% annual return, while the price stays below our bear value. That is why the margin-of-safety price is $18. This is our first analysis built from owner earnings drawn from the company's own cash-flow statements. The previous figures were prepared on a different basis and are not comparable.