- Key insight: Central Bancompany has narrowed down a list of about 30 possible target banks that fit its criteria for an acquisition.
- What's at stake: Banks have largely stayed away from going public in recent years amid market volatility and troubled valuations.
- Forward look: Central's IPO may not be a signal that more banks will try to go public, as investor demand remains muted.
Central Bancompany launched an initial public offering Wednesday in efforts to raise around $400 million as it eyes an acquisition to expand its footprint in Texas, Oklahoma or Colorado.
The Jefferson City, Missouri-based bank said it plans to use the proceeds for "general corporate purposes," which could include a deal, though the company doesn't currently have a specific transaction planned. But Central said in an investor presentation this month it's narrowed down a list of about 30 possible target banks.
Central, which has about $19 billion of assets, currently operates in Missouri, Oklahoma, Kansas, Colorado and Florida. The company is looking to buy a bank that's based in one of its target geographies, and has more than $2 billion of assets, a high-quality deposit base and strong credit quality.
The bank originally announced plans to go public last month, and applied to list on the Nasdaq.
A few weeks later, Central said it would offer 17.8 million shares of Class A common stock, priced between $21 and $24. The bank also plans to grant underwriters a 30-day option to purchase up to an additional 2.7 million shares at the public offering price. On Tuesday, Central's closing stock price on over-the-counter markets was $21.
Central declined to comment.
The company is the third, and largest, bank to hit the IPO market this year. The industry has largely eschewed such strategies in recent years amid economic uncertainty, the bank failures of 2023 and a tepid deal environment.
Chris Marinac, director of equity research at Janney Montgomery Scott, said that investor interest in banks is still relatively muted, but sometimes moves like IPOs can spur demand.
"I still think the bank stocks are too cheap, and that, generally speaking, the interest could be a lot greater than it currently is," Marinac said. "But in the spirit of pulling it out of investors to create more demand, I think it's a good thing. We have to try these things."
He added that going public can also help banks that are looking to land acquisitions by marking value with a public currency.
Banks that have recently gone public are more likely to both acquire other banks and be acquired, according to a research paper published by the Federal Reserve Bank of Chicago in 2005.
A wave of mergers and acquisitions has swept over banks in 2025, especially in the past few months, as the industry looks for opportunities to scale, build density, expand in high-growth markets or invest in technology and workforce.
Central isn't new to inking deals, but its last acquisitions were in 2019, when it bought two community banks in the Midwest. The company said in a recent public filing that its average deposit market share is about 24%, and has grown over time due to what it called its "ability to take market share and our successful acquisition strategy."
The bank has been in the same family for generations. Central was founded in 1902 by Sam Cook, the great grandfather of the company's current executive chairman, Bryan Cook.
About 71% of the outstanding Class A common stock is in a voting trust still controlled by Bryan Cook and two other board directors. After the offering, the trust will still hold nearly 66% of the stock.
Central is now looking to invest in technology, pad out treasury and wealth management offerings, overhaul its core and data management systems while also preparing to buy another bank.
But going public comes with hitches. Along with more regulatory and compliance work, during major market events and crises — like the spate of bank failures in the spring of 2023 or the rapid shifts in trade policies earlier this year — publicly traded banks feel the heat on their stock prices, Marinac said.
"Those incidents can and will happen again," Marinac said. "So you definitely have to sign up for that, if you are looking to go public in this environment, because I don't think we're going to get away from that. I think they're just going to have to manage through it."
This summer, CoastalSouth Bancshares also went public, priced at $21.50 a share. The bank started trading on the New York Stock Exchange in July at the bottom of its expected range. The company's stock was trading at $21.34 per share, as of Wednesday at market close.
Northpointe Bancshares, which was the first bank IPO of the year, started off trading below its expected range of $16 to $18 per share, opening at $14.50. But since February, its stock has risen to $16.69.
