Renasant Corporation (NYSE:RNST), with a market capitalization of $2.47 billion, reported stronger-than-expected earnings for the fourth quarter of 2024, with earnings per share (EPS) reaching $0.73, surpassing the forecast of $0.57. Despite a slight revenue miss, the company's stock showed resilience, experiencing a minor aftermarket increase of 1.2% to $37.85. According to InvestingPro, four analysts have recently revised their earnings estimates upward for the upcoming period, suggesting growing confidence in the company's prospects.
Key Takeaways
- Renasant's EPS of $0.73 exceeded expectations by 28%.
- Revenue fell slightly short, at $167.1 million against a forecast of $167.42 million.
- Strong loan growth and disciplined pricing contributed to performance.
- The company is preparing for a merger with First Bancshares in early 2025.
- Stock price remained stable, reflecting investor confidence.
Company Performance
Renasant Corporation demonstrated robust performance in Q4 2024, with notable growth across its loan portfolio and a disciplined approach to pricing. The company's strategic focus on expanding its loan book, particularly in commercial and corporate lines, has been a key driver of its recent success. The merger with First Bancshares is expected to further strengthen its market position.
Financial Highlights
- Revenue: $167.1 million, slightly below the forecast.
- Earnings per share: $0.73, surpassing the forecast of $0.57.
- Net interest income increased by $1.9 million quarter-over-quarter.
- Total (EPA:TTEF) assets grew by $76.1 million.
- Loan growth reached $257.4 million.
Earnings vs. Forecast
Renasant's EPS of $0.73 was a significant 28% above the forecasted $0.57, marking a positive surprise for investors. This performance is consistent with the company's recent trend of exceeding earnings expectations, driven by strong operational execution and strategic initiatives.
Market Reaction
Following the earnings announcement, Renasant's stock experienced a modest increase of 1.2% in aftermarket trading, closing at $37.85. This movement indicates investor confidence in the company's financial health and future prospects, despite the slight revenue miss. The stock is currently trading near its 52-week high of $39.55, with an impressive year-to-date return of 8.76%. InvestingPro analysis indicates the stock is trading close to its Fair Value, with a P/E ratio of 11.74 reflecting reasonable valuation metrics.
Outlook & Guidance
Looking ahead, Renasant is optimistic about its merger with First Bancshares, expected in the first half of 2025. The company anticipates modest net interest margin expansion and continued loan growth. With a significant portion of its loan book subject to variable rates, Renasant is well-positioned to benefit from potential interest rate changes. The company maintains a strong dividend track record, having paid dividends for 32 consecutive years, with a current yield of 2.26%. For deeper insights into Renasant's financial health and growth prospects, investors can access comprehensive analysis through InvestingPro's detailed research reports, which cover over 1,400 US stocks.
Executive Commentary
CEO Mitch Waycaster expressed enthusiasm about the company's future, stating, "We are excited about the company's prospects for this upcoming year." He also highlighted the strategic benefits of the merger, noting, "We view that quite favorably... it's really one of those better together stories."
Risks and Challenges
- Regulatory changes could impact merger economics.
- Potential interest rate fluctuations may affect financial performance.
- Operational losses and health plan expenses could pressure future earnings.
- Competition in key markets remains a challenge.
- Economic uncertainties could influence loan demand and deposit growth.
Q&A
During the earnings call, analysts focused on Renasant's loan growth strategy and expense management. Executives reiterated their commitment to maintaining disciplined pricing and controlling operational costs, while expressing confidence in navigating potential regulatory changes.
Full transcript - Renasant Corporation (RNST) Q4 2024:
Conference Operator: Good morning, and welcome to the Resilient Corporation 2024 Fourth Quarter and Year End Earnings Conference Call and Webcast. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Kelly Hutchinson, Chief Accounting Officer for Renasant.
Please go ahead.
Kelly Hutchinson, Chief Accounting Officer, Renasant Corporation: Good morning, and thank you for joining us for Renasant Corporation's quarterly webcast and conference call. Participating in the call today are members of Renasant's executive management team. Before we begin, please note that many of our comments during this call will be forward looking statements, which involve risk and uncertainty. There are many factors that could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward looking statements. Such factors include, but are not limited to, changes in the mix and cost of our funding sources, interest rate fluctuation, regulatory changes, portfolio performance and other factors discussed in our recent filings with the Securities and Exchange Commission, including our recently filed earnings release, which has been posted to our corporate site, www.renasant.com@thepressreleaseslinkunderthenewsandmarketdata tab.
We undertake no obligation, and we specifically disclaim any obligation to update or revise forward looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time. In addition, some of the financial measures that we may discuss this morning are non GAAP financial measures. A reconciliation of the non GAAP measures to the most comparable GAAP measures can be found in our earnings release. And now, I will turn the call over to our Executive Vice Chairman and Chief Executive Officer, Mitch Waycaster.
Mitch Waycaster, Executive Vice Chairman and Chief Executive Officer, Renasant Corporation: Thank you, Kelly. Good morning. We appreciate you joining the call and your interest in Renasant. The 4th quarter results marked the end to a successful year for Renasant. After announcing a transformative merger in July and diligently working on the planning necessary for a successful combination, our team maintained a focus on generating loan growth, disciplined pricing on both sides of the balance sheet and steady credit performance.
We still anticipate completing our merger with the first in the first half of twenty twenty five. I will now turn the call over to Kevin.
Kevin, Executive Management, Renasant Corporation: Thank you, Mitch. To echo Mitch's comments, 2024 was a successful year for Renazyme and one of transformation as our team worked diligently to improve our financial performance and prepare for a successful merger with the first. This work has positioned Renasant for continued growth and success in 2025 and beyond. I will now turn our attention to our Q4 financial results. Our earnings were $44,700,000 or $0.70 per diluted share.
Net interest income was $135,500,000 an increase of $1,900,000 on a linked quarter basis. This increase was driven by solid loan growth of $257,000,000 on a linked quarter basis, bolstered by significant decrease to our cost of deposits. On the liability side of the balance sheet, we have continued to see strong deposit growth, especially in interest bearing deposits, which increased by $189,000,000 Total deposits increased by $63,000,000 which includes $127,000,000 reduction of brokered deposits. We did not hold any broker deposits by year end. This deposit growth happened even as our total deposit cost decreased 16 basis points during Q4 compared to a 4 basis point increase during Q3.
Non interest income decreased $55,100,000 for the 3rd quarter. The 3rd quarter included a onetime pretax gain of $53,300,000 from the sale of our insurance agency. Excluding the aforementioned gain on the sale of the insurance agency, adjusted noninterest income decreased $1,700,000 quarter over quarter due primarily to seasonal declines in mortgage volume and the corresponding decline in mortgage revenue. Noninterest expense was $114,700,000 for the 4th quarter, a $7,000,000 quarter over quarter decrease driven largely by a $9,200,000 decrease in merger and conversion expenses from Q3. Excluding merger and conversion expenses, noninterest expense was $112,700,000 for the quarter, representing an increase of $1,900,000 on a linked quarter basis.
We will work to continue to diligently manage our expenses as we work to efficiently integrate the 1st this year. Overall, we had a strong quarter as we continue to execute on our pricing, expense management and continued deposit growth. I will now turn the call over to Jim.
Jim, Executive Management, Renasant Corporation: Thank you, Kevin. As we walk through the quarter's results, I will reference slides from the earnings deck. Total assets grew $76,100,000 due in large part to our strong loan growth of $257,400,000 which was partially offset by a decrease in cash of $183,600,000 as we deployed our liquidity to, among other things, paying off our remaining broker deposits. On the liability side, we experienced another quarter strong deposit growth, which allowed us to continue to shift away from non core funding sources. Referencing Slide 8, all regulatory capital ratios are in excess of required minimums to be considered well capitalized.
These ratios increased meaningful in Q3 with our capital raise and a gain on the sale of the insurance agency. The ratio showed moderate declines in the Q4. Turning to asset quality. We recorded a credit loss provision on loans of $3,100,000 Net charge offs were $1,700,000 and the ACL as a percentage of total loans decreased 2 basis points quarter over quarter to 1.57%. Asset quality metrics are presented on Page 9.
Our criticized loans and total nonperforming assets decreased for the quarter with criticized loans as a percent of total loans decreasing by 13 basis points to 2.89 percent and nonperforming assets as a percentage of total assets decreasing 3 basis points to 68 basis points. Our strategy is to proactively identify underperforming loans early and work quickly towards resolution in order to mitigate loss. Turning to Slide 12, adjusted net interest margin, which excludes purchase accounting accretion and interest recoveries increased 2 basis points to 3.34 percent for the quarter. Adjusted loan yields decreased 14 basis points to 6.27 percent and the total cost of deposits decreased by 16 basis points to 2.35%. Kevin commented on the highlights within non interest income and expense.
We are encouraged by the expense trends we saw in the quarter and believe it positions us to build on that momentum in 2025. As a reminder, we will have considerable merger and conversion expenses in 'twenty five related to the combination with the first.
Mitch Waycaster, Executive Vice Chairman and Chief Executive Officer, Renasant Corporation: I will now turn the call back over to Mitch. Thank you, Jim. We are excited about the company's prospects for this upcoming year. The first merger application is proceeding and once completed, will meaningfully strengthen the balance sheet and earnings profile of Renaissance. We look forward to our teams coming together to form a top performing regional bank in the Southeast.
I will now turn the call over to the operator for questions.
Conference Operator: Thank you. We will now begin the question and answer session. And your first question today will come from Joe Yancunis with Raymond (NSE:RYMD) James. Please go ahead.
Joe Yancunis, Analyst, Raymond James: Good morning. Good morning, Joe. So the reported 4Q NIM came in ahead of your prior outlook, which called for some modest compression. So given the current rate drop backdrop, how should we think about near term trends for the NIM?
Jim, Executive Management, Renasant Corporation: This is Jim. You're right, our guidance was for some modest compression in the margin. And I would say just let's say a couple of things. 1, our funding base, the pricing on our deposits behaved better than we anticipated. So that was a real bright spot for us.
We had a higher beta there than we anticipated and those costs came down more than we expected. So and loan yields certainly came down but held in pretty well. So I would say now our outlook for 'twenty five even with the 2 cuts is we're going to sort of flip that on its head a little bit and as opposed to modest compression, we our outlook is for some modest expansion in the margin.
Joe Yancunis, Analyst, Raymond James: I appreciate that. That was pretty helpful. And then kind of shifting over to loan growth here. So it was notably stronger in the quarter. And given the general increase in sentiment, how should we think about loan growth trends in the near term?
And then just to kind of follow back up on your prior answer, what were new loan origination yields in the quarter?
Mitch Waycaster, Executive Vice Chairman and Chief Executive Officer, Renasant Corporation: Jim, you want to touch on yields and I'll talk about that.
Jim, Executive Management, Renasant Corporation: About it. Sure, Joe. If you look at new and renewed in the quarter, it was around 7.35% for the quarter. And if it's helpful, the spot new and renewed in December was about was a little above 7%, about 7.05%.
Mitch Waycaster, Executive Vice Chairman and Chief Executive Officer, Renasant Corporation: And Joe, this is Mitch. Going to production, we're quite pleased with our ability to price on both sides of the balance sheet. Jim just reflected on that on both. But coming back to production, maybe let's start with
Jim, Executive Management, Renasant Corporation: the pipeline. We
Mitch Waycaster, Executive Vice Chairman and Chief Executive Officer, Renasant Corporation: entered the 4th quarter with a pipeline of $176,000,000 We entered Q1 with 174 $1,000,000 So we continue to see in the 30 day pipeline very strong across each geography, each business line. That was reflected in production to your point in Q1, it was $572,000,000 That was up from $507,000,000 in 3Q, which yielded a net loan growth of little over 8%, $257,000,000 One thing that I would note, which we've always pointed to as currently a governor on the net, we did see payoffs this quarter decrease to $471,000,000 down for $551,000,000 In relation to that $572,000,000 the if you look at the average over the year, it's going to be in the currently in that about $450,000,000 range. So payoffs were more in line, but as we've said before, the variability there does affect net. But just going back to production, we had strong production and even if payoffs had remained as they were in the prior quarter, we would still had some 5.5% net growth. So just looking to the future, each of our markets, our regions, our business lines continue to contribute in a meaningful way to both production and if we look at that current pipeline.
And just going back to production, about 14% of that was from Tennessee markets, another 10% in Alabama, the Florida Panhandle, 28%. This past quarter was in Mississippi, 15% in Georgia and Central Florida and another 33% in our commercial corporate business lines. And I would say, as we usually point to in this discussion, not only the geographic distribution, but really the loan types and besides credits. And it gets back to the granularity, the many cylinders that we continue to hit on when we look at production. And we saw that if you take that $572,000,000 we saw that again this quarter with roughly 12% in the consumer HELOC 1 to 4 family, 23% in small business and business banking, which has always been strong for us across our markets.
Another 34% of that came from commercial credit, C and I. We had a very good quarter there. We continue to build that book. Owner occupied was good this past quarter. And the rounding out the last 32% came from the corporate banking group, which was you'd find there larger C and I commercial real estate ABL equipment finance factoring.
So again, geographically and by type, by business line, continuing to perform well. And all of those, that's reflected in the current pipeline. We're optimistic about Q1.
Joe Yancunis, Analyst, Raymond James: That was a very thorough answer. Thank you very much for taking my questions.
Conference Operator: Your next question today will come from Stephen Scouten with Piper Sandler. Please go ahead.
Stephen Scouten, Analyst, Piper Sandler: Yes. Thanks. Good morning, everyone. I guess, curious about the pending merger and any color you can give around still expecting to close later in the first half, if you've had any specific updates from the approval process, anything that can, I don't know, kind of give confidence around that timeline?
Mitch Waycaster, Executive Vice Chairman and Chief Executive Officer, Renasant Corporation: Sure. Stephen, I'll just go back to our prepared remarks and maybe expand a touch there. We reflected on the fact that we announced in July, since that time both companies, teams in both companies have worked and continued to work diligently on planning the integration conversion, as well as completing the application and the approval process. I would say regulators throughout the process have been very engaged and responsive, and we are pleased with how all of those things are progressing. And I would just point back relative to timing as we originally announced, we and planned, we anticipate completing the merger in the first half of this year.
Stephen Scouten, Analyst, Piper Sandler: Got it. Appreciate the color there. And then maybe outside of regulators potentially getting more, I don't know, favorable around M and A timelines. Do you guys think about any specific potential regulatory changes or improvements that might help your bank in particular things you look to that could make life easier for Renasant if we get some additional regulatory relief?
Kevin, Executive Management, Renasant Corporation: Yes. Hey, Stephen, it's Kevin. So we are paying close attention to appointees, nominations, their picks. There are some it appears that it's that there's going to be changes in the regulatory environment in a lot of different ways. How that ultimately impacts, say, a bank of our size or a bank with our business model, a lot is to be learned there.
But I don't think I think if you look at the last 4 years and the environment banks have been in, the next 4 years arguably are going to be a lot different. And again, a lot of the some of the changes come in, it may be good, it may be negative. But overall, I think we're expecting that some of the regulatory changes being proposed will be net positive to the industry as well as positive to Renasant. And so I think just a lot more to stay tuned there and way too early to tell with specificity how it will impact us. But overall, we're trying to stay close and make sure we understand that as things evolve, we understand how it could impact our business model.
Stephen Scouten, Analyst, Piper Sandler: Got it. Appreciate that, Kevin. And then just last for me. I know, Jim, you said a little bit ahead of schedule and where you thought you'd be from an NIM perspective, largely related to better betas, lower deposit costs in the quarter. We've seen that a lot industry wide here this quarter, which is great.
Do you think that's more a kind of a pull forward and the lack of maybe lag effects that we all thought we might see with deposits going back down with rate cuts? Or do you think the destination actually changed and we can get to a lower point as we get through this potential easing cycle here?
Jim, Executive Management, Renasant Corporation: I think the direction changed. I mean, I think there obviously, I want to guard against being overly optimistic. But I think there was just there's a change in direction. And I almost would look at them and we'll see how it plays out over time. But there are a couple of things that worked really well for us in the quarter.
And I would say notably just to get some slope in the yield curve was a nice thing to see. I mean, I think we were modestly inverted when we had our Q3 call and to see that change and of course, trying to predict that's a difficult task. But I mean, I think WER is mean, again, it's not going to be I would I'm certainly not advertising a sea change in our margin, but I do think the outlook there is very encouraging and we'll see how it plays out, but very hopeful there.
Will Jones, Analyst, KBW: Got
Stephen Scouten, Analyst, Piper Sandler: it. Very helpful. Thank you guys for all
Will Jones, Analyst, KBW: the color and congrats on a great quarter.
Conference Operator: Your next question today will come from Will Jones with KBW. Please go ahead.
Will Jones, Analyst, KBW: Yes. Hey, thanks. Good morning, guys.
Mitch Waycaster, Executive Vice Chairman and Chief Executive Officer, Renasant Corporation: Good morning, Will.
Will Jones, Analyst, KBW: I wanted to start with expenses this quarter. The narrative around expense this year really has been very positive. So I was maybe a bit surprised to see just core operating expense jump up in the Q4 here, especially when the comp line is hitting a little watermark for the year. Was there anything chunkier or kind of more one time ish in nature that happened this quarter? And do you
Jim, Executive Management, Renasant Corporation: feel like this is kind
Will Jones, Analyst, KBW: of a good jumping off run rate as we look into the Q1 of next year?
Kevin, Executive Management, Renasant Corporation: Yes. Hey, good morning, Will. It's Kevin. So yes, on expenses, and just specific in the quarter, we did have a couple of things that were a little bit that were large and they've been somewhat persistent throughout the year and really in 2 categories. One is just operational losses, fraud losses, Reg E disputes.
Those have been elevated all year. I don't think that's specific to Renasant. I think that's a bit of an industry issue. But it was abnormally high in Q4. It was up in the $1,500,000 $2,000,000 range in Q4 compared to Q3.
We don't necessarily think that's going to happen every quarter, but the trend line in that has been up in 'twenty four compared to 'twenty three. The other item and it's in salaries and employee benefits is health and life. We're self funded plan and so as we incur health expenses, we pay for that. And we've had an unusually large expense there, which means our claims history is up. And it's just been an outlier this year.
Year to date, accrued health and life is up $5,000,000 compared to roughly $5,000,000 compared to $23,000,000 In Q4, it was up $1,000,000 to 1,300,000 dollars compared to Q3. So those are kind of the 2 outliers that are somewhat masking those improvements that we've been talking about in the expense run rate. If you look year to date and you include those items, but you back out merger expenses, our expenses are up about 2%. So if you kind of smooth out the quarterly volatility, it's up about 2%. If you back out accrued health and life, we're roughly flat year to date.
And so we are not taking our off the ball as it relates to expenses. Although we have had some unusual items pop up in 2024 and we'll work to get those down back to historical levels. But as we look out into 2025, we think that 2% to 3% increase in expenses is a good run rate as we look out into 2025. And Q1, we'll have some volatility in it. It has less days.
There's merit increases that will come into play at the back half or the back end of Q1. But we think overall, as we look for 2025, a 2% to 3% increase in expenses is kind of what we're guiding. But again, we'll work hard to keep that number lower, flat and again, continue to work on our expenses as we've done the last couple of years.
Will Jones, Analyst, KBW: Kevin, that's really helpful color. I appreciate the thoughtful response there. And then I don't want to underscore, you guys have done a really nice job on the expense base this year. So thank you for all that helpful color. And maybe Jim one for you just any I know it's a bit of a sliding scale with some of the rate volatility, but any updated thoughts on where rate marks with the first stand today?
Is there any material change there in your view?
Jim, Executive Management, Renasant Corporation: I mean, it definitely has moved some well from when we announced the deal and it's the movements have been, I was going to say positive or negative, but actually they sort of net out to roughly de minimis change to the earn back. But to your point, if you look at the marks and you look at the impact to capital and the EPS, those sort of have been toggling back and forth within a range, I would say, because we look at this probably monthly. But at the end of the day, and of course, when we get some regulatory clarity, we'll update these numbers. But at the end of the day, it does not have a meaningful impact on earn back. They sort of offset one another.
So we'll keep you updated, but that's the way I would describe the merger math.
Will Jones, Analyst, KBW: Yes. Okay. That's great. And then, Mitch, maybe finally for you, just if you look at the first, they also had a really nice quarter of growth. And so it feels like the 2 combined companies are really carrying nice momentum into 2025.
Is there a way to think about what the right growth rate is for the combined company or where you would kind of earmark an achievable level for growth as you think about the 2 companies combined?
Mitch Waycaster, Executive Vice Chairman and Chief Executive Officer, Renasant Corporation: Maybe I should have mentioned that earlier, just reflecting on our ability to grow organically. To your point, we're seeing the same thing in the first. And I have no reason to believe that that won't continue just considering their markets. And if you look at everything from culture to our business models, how we complement each other, how we go to market in very similar ways, but some of the things I think as a combined company that Renasant can bring to them that I think will be additive to customer bases, we don't have a lot of overlap in customers. I just say it's really one of those better together stores when you put it together and you look at our ability to go to market.
So we view that quite favorably. And I think it would be in line with what I described earlier. I would say also in the planning of integration and conversion, naturally a lot of those conversations continue and we're quite encouraged and I think you would hear the same thing from that team.
Will Jones, Analyst, KBW: Yes. Okay. Well, thanks for the questions guys. I appreciate it.
Mitch Waycaster, Executive Vice Chairman and Chief Executive Officer, Renasant Corporation: Thank you, Will.
Conference Operator: Your next question today will come from Matt Olney with Stephens. Please go ahead.
Stephen Scouten, Analyst, Piper Sandler: Thanks. Good morning, guys.
Mitch Waycaster, Executive Vice Chairman and Chief Executive Officer, Renasant Corporation: Good morning, Matt.
Stephen Scouten, Analyst, Piper Sandler: I think you already highlighted the new and renewed loan yields earlier. Just remind us of the volume of loans that will reprice this year, that variable fixed rate loans that we should expect over the next few quarters?
Jim, Executive Management, Renasant Corporation: Variable right book is about $6,000,000,000 and the vast majority of that, 90 plus percent of that reprice is within a month of the rate change. I will say this about that variable book is 75% of that is at a rate of 6.5% or less. So it will be interesting to see what the real impact is to yields as we get that repricing, but that will give you a sense of the size of the variable rate book. And then and actually I can't remember the second part of your question.
Stephen Scouten, Analyst, Piper Sandler: The fixed rate book, kind of similar question as far as repricing that dynamics of that fixed rate book?
Jim, Executive Management, Renasant Corporation: Yes, sorry. So we've got, call it, dollars 600,000,000 of fixed rate loans that reprice within the next 12 months. And I would say that's probably the blended rate of about 5.5%. And actually, it's closer to $700,000,000 that reprice over the next 12 months. And then, we've also got bear in mind, we've got, call it, dollars 200,000,000 of securities that will reprice.
And that's probably carrying a yield in the mid-2s. Okay.
Stephen Scouten, Analyst, Piper Sandler: That is helpful. And also on the credit front, I think we did see classified loans tick a little bit higher in the quarter. Any color behind that uptick in classified loans?
Kelly Hutchinson, Chief Accounting Officer, Renasant Corporation0: Good morning, Matt. This is David. It was those were loans that were transitioning within the criticized bucket. They went there was about $27,000,000 of loans that were criticized
Stephen Scouten, Analyst, Piper Sandler: that were OAM special mention that were reclassified to classify. So there were
Kelly Hutchinson, Chief Accounting Officer, Renasant Corporation0: loans that we mention that were reclassified to classify. So there were loans that we had already highlighted where there were stress on them, but we just in our normal ongoing portfolio management, we migrated those down to substandard. So not anything materially new in that criticizedclassified bucket.
Stephen Scouten, Analyst, Piper Sandler: Just following up on that, I guess, I mean, it would imply, I guess, there's incremental stress on those borrowers compared to maybe last quarter. It was incremental stress or are you just suggesting there maybe was a lag in terms of how those were great internally versus what we discussed back in October?
Kelly Hutchinson, Chief Accounting Officer, Renasant Corporation0: It would be the more of the former. It would be as we continue to watch. When we look at without getting into detail, we look at a special mention type asset, a criticized asset, we'll watch performance. And if that performance that negative performance extends longer, we'll look at downgrading as a classification proper doing the move that from special mention to classified. So it's not an incremental deterioration in the portfolio, just probably loans that have stayed within that criticized bucket a little bit longer.
And there's a little bit of a transitory element to loans that are special mentioned that there's some level of stress, but it but there may be a shorter term view where they may be upgradable. As that stress continues, then we'll look at it, what's the proper classification, is it staying OEM or does it need to move to substandard.
Conference Operator: And your next question today will come from David Bishop with HOTH Group. Please go ahead.
Kelly Hutchinson, Chief Accounting Officer, Renasant Corporation1: Sort of staying on Matt's last question with credit. I'm curious as the interest rate in the economy evolves here, from a credit perspective or loan segment perspective, are there any changes that are forcing you or driving your change in appetite to grow any certain loan segments? Just curious if there's been any change in the appetite for growth. Thanks.
Kelly Hutchinson, Chief Accounting Officer, Renasant Corporation0: David, good morning. I was saying, sure, there's not. We continue to watch all segments of the economy, be it commercial real estate, C and I to determine what the impacts are going to be. And as of this point, we're not making any change. We're going to remain cognizant of impacts, obviously, on our markets due to the potential for changes due to administrative reasons, whether it be tariffs or whatever.
But we'll continue to look at the impact. But as of today, we're staying fairly consistent with our thoughts around appetite as we've had for, I'd say, really pretty much the past 4 quarters. And we're pretty positive on most elements of our markets in the Southeast. We continue to see strong performance in our marketplace in most aspects of CRE and most aspects of C and I. So we maintain a positive outlook.
And in our risk guidance to our lending teams,
Jim, Executive Management, Renasant Corporation: we
Kelly Hutchinson, Chief Accounting Officer, Renasant Corporation0: have a positive outlook towards most asset classes.
Kelly Hutchinson, Chief Accounting Officer, Renasant Corporation1: Got it. And then turning back to the balance sheet side, reflect this quarter maybe some seasonality or funding flows, you leaned into cash a little bit more. Looking out the Q1, if we do see the continuing loan growth, is there any resumption of loan growth you're assuming? Think you're still leaning into liquidity a little bit here in the Q1 into the merger?
Jim, Executive Management, Renasant Corporation: I mean, we as you know, we've sort of we have leaned into liquidity. And I would say, this is what's interesting what struck me about this quarter was it was the Q1, I think, in 4 or 5, Dave, where we didn't have core deposit growth exceed loan growth. And yet, we still have really good core deposit growth quarter. I think we were roughly 5% on the core deposit side. And we're down we've got no as you know, no wholesale borrowings except for a very small amount of the Federal Home Loan Bank, which we're not going to pay off because it's got a sub-one percent rate on it.
But I would say this, as we look to Q1 as we look to first half, I mean, we feel really good about our deposit engine. I mean, it's just performed really well for us, and we expect that to continue. And so we'll see how loan demand plays out for the quarter, the first half. But I would say one side of that is that we're probably going to be a net purchase of securities in the Q1. And we haven't done that in, I don't know, probably a year or more.
So I think those things sort of tell the story about the movements from the balance sheet and we're just a great work we've done on the deposit side to give us that flexibility if we don't have the loan growth to put it in the securities.
Kelly Hutchinson, Chief Accounting Officer, Renasant Corporation1: Great. Appreciate the color. My last question sort of staying on the deposit side. You talked about the loan maturities repricing. Just curious if there's any update in terms of deposit repricing maybe on the fixed CD side in the first half of the year?
Thanks.
Jim, Executive Management, Renasant Corporation: In the CD side, we've got probably in the first half roughly, call it, dollars 2,000,000,000 of CDs that mature and those will be the blended rate and that's probably low 4s. And if you look at our the pricing that we're getting now, it's call it 3.75% to 4%. So that will give you a sense of how that might impact the income statement.
Kelly Hutchinson, Chief Accounting Officer, Renasant Corporation1: Appreciate the color.
Conference Operator: Thank you, Dave. This concludes our question and answer session. I would like to turn the conference back over to Mr. Mitch Waycaster for any closing remarks.
Mitch Waycaster, Executive Vice Chairman and Chief Executive Officer, Renasant Corporation: Well, thank you, Nick, and thank you to each of you for joining the call today. We appreciate your interest in Renasant.
Conference Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.