Renasant Q4 Earnings Call Highlights

Key Points

• Renasant said the merger with The First made 2025 a transformative year, with improved profitability including adjusted EPS $3.06 (+11% YoY), adjusted ROA 1.10%, an adjusted efficiency ratio of 57.46% (≈900 bps improvement), and adjusted ROTCE 13.79%.
• In Q4 the bank reported net income of $78.9 million ($0.83) and adjusted earnings of $86.9 million ($0.91), with adjusted NIM roughly stable (3.62), core non‑interest expense down to $160.2 million, and the sale of about $117 million of non‑core loans.
• For 2026 management expects mid‑single‑digit loan growth, a relatively stable margin despite an internal assumption of two 25‑bp rate cuts, and sees buybacks as an attractive near‑term capital lever while targeting a year‑end CET1 around ~11.25%.

Renasant NYSE: RNST executives highlighted what they called a “transformative year” in 2025, pointing to improved profitability and balance sheet growth following the completion and integration of its merger with The First. On the company’s fourth-quarter earnings call, management emphasized progress on systems conversion and cost reduction efforts, while outlining expectations for expenses, loan growth, margin performance, and capital deployment heading into 2026.

Management cites merger integration progress and improved 2025 profitability

President and CEO Kevin Chapman said 2025 was marked by “considerable improvement” in profitability and “strong balance sheet growth” after the largest merger in the company’s history. Chapman noted the systems conversion took place in the third quarter and said the company continues to build on integration progress.

Chapman highlighted several full-year adjusted metrics discussed on the call:

• Adjusted EPS: $3.06 for 2025, up 11% year-over-year.
• Adjusted ROA: 1.10% in 2025, up from 0.94% in 2024.
• Adjusted efficiency ratio: 57.46%, improving by approximately 900 basis points year-over-year.
• Adjusted return on tangible equity: 13.79% in 2025, up from 11.5% in 2024.

Fourth-quarter results: higher net interest income, lower core expenses

CFO Jim identified net income of $78.9 million, or $0.83 per diluted share, in the fourth quarter. Adjusted earnings excluding merger charges were $86.9 million, or $0.91 per diluted share. The company’s adjusted return on average assets was 1.29%, up 20 basis points from the third quarter, and adjusted return on tangible common equity was 16.18%, improving by 196 basis points.

Net interest income increased $3.9 million from the prior quarter. Reported net interest margin rose 4 basis points to 3.89%, while adjusted net interest margin was flat at 3.62% linked quarter. Management said adjusted total cost of deposits declined 11 basis points to 1.97%, while adjusted loan yields fell 12 basis points to 6.11%.

Non-interest income was $51.1 million, up $5.1 million linked quarter, including $2 million tied to exiting certain Low-Income Housing Tax Credit partnerships. Non-interest expense totaled $170.8 million. Excluding $10.6 million in merger and conversion expenses, core non-interest expense was $160.2 million, down $6.2 million from the third quarter, with management citing a $2.1 million offset from gains connected with branch consolidations.

Loan growth, deposit trends, and the $117 million loan sale

Loans increased $21.5 million linked quarter, which the company described as 0.4% annualized. During the quarter, Renasant sold approximately $117 million of loans acquired from The First that management said were not considered core. Deposits increased $48.5 million from the third quarter, or 0.9% annualized.

In response to analyst questions, management said the loan sale involved loans secured by the cash surrender value of life insurance policies. Jim said the portfolio was “good performing” and “high quality,” but viewed as non-core because it did not come with ancillary business and was outside the footprint. Management said it does not see other similar portfolios to divest.

On loan growth expectations, Chapman reiterated guidance for “mid-single digits” in 2026, while noting quarterly results could be “lumpy.” He said production was good and the pipeline remained intact, but pointed to elevated payoffs that “finally materialized” late in the fourth quarter as a key wild card in quarter-to-quarter growth. Management also noted that consumer activity had pulled back somewhat, which Chapman said was “more by choice” than consumer behavior.

Credit, capital, and buybacks remain key investor focus

On credit, the company recorded a provision for credit losses on loans of $10.9 million, including $5.5 million for funded loans and $5.4 million for unfunded commitments. Net charge-offs were $9.1 million, including $2.5 million recognized in connection with the sold acquired loan portfolio. The allowance for credit losses declined 2 basis points quarter-over-quarter to 1.54% of total loans.

Management said regulatory capital ratios remained above required minimums to be considered well capitalized. During Q&A, Jim addressed investor questions about buybacks, framing the company’s thinking around maintaining a similar CET1 ratio at year-end 2026 compared with year-end 2025 (he cited roughly 11.25% at year-end) while balancing organic growth and market conditions. He said the company viewed buybacks as an attractive capital lever near term and anticipated repurchase activity continuing into 2026. Chapman added that the company’s “full capital plan playbook” includes debt redemption and that M&A remains part of its plan, though it must meet internal metrics and involve the right partner.

2026 margin outlook and competitive conditions

Addressing net interest margin, Jim said The First merger helped reduce the company’s asset sensitivity. He noted that while management previously expected slight margin degradation, the fourth-quarter margin “behaved really well.” For 2026, he said the company’s internal outlook includes two 25-basis-point rate cuts (roughly March and September), yet management still expects margin to remain relatively stable “plus or minus.” With stable margin and balance sheet growth, he said net interest income dollars should show modest growth, though he acknowledged the company is starting 2026 with slightly lower loan balances than expected due to fourth-quarter payoffs and the loan sale.

On competition, management described pricing pressure as largely unchanged and “very competitive” on both loans and deposits, with incremental pressure more evident on the deposit side. Jim pointed to the company’s five-month special rate staying around 4% for roughly 18 months and said the company would like to lower it, though it is not assuming relief in its 2026 outlook.

Chapman closed the call by saying the company is “well positioned for 2026,” citing a strong balance sheet, improved profitability profile, and opportunities created by ongoing industry change.

About Renasant NYSE: RNST

Renasant Corporation operates as a bank holding company for Renasant Bank that provides a range of financial, wealth management, fiduciary, and insurance services to retail and commercial customers. It operates through three segments: Community Banks, Insurance, and Wealth Management. The Community Banks segment offers checking and savings accounts, business and personal loans, asset-based lending, and equipment leasing services, as well as safe deposit and night depository facilities. It also provides commercial, financial, and agricultural loans; equipment financing and leasing; real estate–1-4 family mortgage; real estate–commercial mortgage; real estate–construction loans for the construction of single family residential properties, multi-family properties, and commercial projects; installment loans to individuals; and interim construction loans, as well as automated teller machine (ATM), online and mobile banking, call center, and treasury management services.

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