Renasant Corporation (RNST) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary and Q&A indicate positive sentiment. Financial performance shows improvements in net interest income and expense reduction. Management maintains mid-single-digit growth guidance and focuses on profitability and strategic growth investments. The Q&A reveals confidence in loan growth and capital deployment, with buybacks prioritized. Despite intense competition, stable loan pricing and a robust pipeline support a positive outlook. Considering the market cap, the stock is likely to experience a positive movement of 2% to 8% over the next two weeks.
Key Financial Performance
Adjusted Earnings Per Share (EPS) $3.06, representing an 11% increase year-over-year. This improvement was fueled by the benefits of the merger with The First and ongoing efforts to improve efficiency at legacy Renasant.
Adjusted Return on Assets (ROA) 110 basis points in 2025, up from 94 basis points in 2024. This reflects improved profitability and operational efficiency.
Adjusted Efficiency Ratio 57.46%, an approximate 900 basis point improvement year-over-year. This was driven by enhanced operational efficiency and merger synergies.
Adjusted Return on Tangible Equity 13.79% in 2025, up from 11.5% in 2024. This increase was due to improved profitability and merger benefits.
Net Income $78.9 million or $0.83 per diluted share for the quarter.
Adjusted Earnings (Excluding Merger Charges) $86.9 million or $0.91 per diluted share for the quarter.
Adjusted Return on Average Assets (Quarterly) 1.29%, a 20 basis point increase from the third quarter.
Adjusted Return on Tangible Common Equity (Quarterly) 16.18%, an improvement of 196 basis points from the third quarter.
Loans Increased by $21.5 million on a linked-quarter basis or 0.4% annualized. Approximately $117 million of non-core loans acquired from The First were sold during the quarter.
Deposits Increased by $48.5 million from the third quarter or 0.9% annualized.
Credit Loss Provision on Loans $10.9 million, including $5.5 million for funded loans and $5.4 million for unfunded commitments.
Net Charge-Offs $9.1 million, including $2.5 million related to the sale of the $117 million acquired loan portfolio.
Allowance for Credit Losses (ACL) as a Percentage of Total Loans 1.54%, a decline of 2 basis points quarter-over-quarter.
Adjusted Pre-Provision Net Revenue $118.3 million for the quarter.
Net Interest Income Increased by $3.9 million quarter-over-quarter.
Reported Net Interest Margin 3.89%, an increase of 4 basis points quarter-over-quarter.
Adjusted Net Interest Margin 3.62%, flat on a linked-quarter basis.
Adjusted Total Cost of Deposits 1.97%, a decrease of 11 basis points quarter-over-quarter.
Adjusted Loan Yields 6.11%, a decrease of 12 basis points quarter-over-quarter.
Noninterest Income $51.1 million for the fourth quarter, a linked-quarter increase of $5.1 million. This includes $2 million in income from exiting certain low-income housing tax credit partnerships.
Noninterest Expense (Excluding Merger and Conversion Expenses) $160.2 million for the quarter, a linked-quarter decrease of $6.2 million. This includes $2.1 million in gains from branch consolidations.
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Operating Highlights
Merger with The First: Completion of the largest merger in the company's history, which significantly improved core profitability and operational efficiency.
Organic loan and deposit growth: Achieved organic growth in loans and deposits, reflecting strong market positioning in key economies.
Efficiency improvements: Adjusted efficiency ratio improved by approximately 900 basis points year-over-year to 57.46%.
Cost management: Noninterest expense decreased by $6.2 million on a linked-quarter basis, excluding merger and conversion expenses.
Loan portfolio optimization: Sold $117 million of non-core loans acquired from The First to streamline operations and focus on core business.
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Risk or Challenges
Interest Rate Fluctuation: Potential risks associated with changes in interest rates that could impact funding costs and net interest margins.
Regulatory Changes: Uncertainty and potential challenges due to changes in regulatory requirements that could affect operations and compliance costs.
Credit Loss Provisions: Recorded credit loss provision of $10.9 million, indicating potential risks in loan performance and credit quality.
Loan Portfolio Sale: Sale of $117 million in non-core loans, which included $2.5 million in net charge-offs, reflecting challenges in managing acquired loan portfolios.
Economic Uncertainty: General economic conditions and their potential impact on loan and deposit growth, as well as overall financial performance.
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Guidance & Outlook
Positioning for 2026: Renasant is well-positioned for 2026 with a strong balance sheet, enhanced profitability profile, and a talented and motivated team.
Banking Industry Outlook: The company is optimistic about its ability to take advantage of opportunities in a changing banking industry.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Can you walk us through the puts and takes of how we should think about expenses through the year, including cost savings and hiring plans?
A:Management expects core expenses to decrease by $2-3 million in Q1, similar to Q4 reductions. Salaries have shown significant impact, and the company has reduced its workforce from over 3,400 employees in mid-2024 to below 3,000. They aim to improve profitability while being opportunistic in hiring talent for future growth.
Q:What is the base for the $2-3 million expense reduction in Q1?
A:The base includes the $170 million core NIE, excluding $10 million in merger expenses and incorporating a $2.1 million gain, resulting in a base of $162.3 million.
Q:What is the outlook for loan growth, and are there any changes to the mid-single-digit growth guidance?
A:Management maintains the mid-single-digit growth guidance for 2026. Q4 growth was 3% annualized, with good production and a strong pipeline. Payoffs remain a wildcard but are not expected to change the annual guidance.
Q:How does the company balance investing in growth and managing expenses and profitability?
A:The company focuses on accountability and higher performance, eliminating underperforming producers while hiring selectively. Investments in back-office scalability and talent are made to improve profitability, with a focus on achieving high-performing status.
Q:What is the approach to capital deployment, including buybacks and M&A?
A:Organic growth remains the top priority. Buybacks are considered the most attractive near-term capital lever, with activity expected to continue in 2026. M&A is still part of the plan but will depend on finding the right partner and meeting metrics.
Q:What is the outlook for the net interest margin (NIM) in 2026?
A:The NIM is expected to remain stable, even with anticipated Fed rate cuts. Growth in the balance sheet should lead to modest growth in net interest income (NII) dollars.
Q:What is the composition of the loan pipeline, and how does it compare to previous quarters?
A:The loan pipeline remains consistent with previous quarters, with contributions from all geographic areas and channels. Consumer lending has pulled back slightly, primarily by choice.
Q:What was the nature of the loan sale in Q4, and are there plans for more sales?
A:The loan sale involved a portfolio secured by cash surrender value of life insurance policies, deemed non-core. There are no plans for additional sales, as the remaining portfolio is considered core.
Q:What is the competitive landscape for loans and deposits?
A:Competition remains intense, particularly on the deposit side. Loan pricing has been stable, while deposit competition has increased slightly. The company hopes for some relief in 2026 but has accounted for current conditions in its margin outlook.
Q:What are the updated profitability goals following the first acquisition?
A:The company has achieved its initial profitability targets but aims to improve further to reach top-performing status. Management is focused on execution and strategies to enhance financial performance and peer rankings.
Q:What gives confidence in the mid-single-digit loan growth guidance for 2026?
A:Confidence is based on strong production, a robust pipeline, and opportunities from market dislocation. While payoffs are a wildcard, management believes the annual growth target is achievable.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the timing and scale of future hiring plans, as well as precise quarterly loan payoff expectations. They also used general language when discussing the competitive landscape and potential M&A opportunities, without committing to specific actions or metrics.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Chapman Renasant
Deposits capital
Hutcheson obligation
ROA basis
Renasant Deposits
Renasant core
Renasant improvement
benefit merger
branch consolidation
charge
completion merger
connection sale
consolidation result
core profitability
country economy
credit partnership
decrease offset
deposit Renasant
economy customer
efficiency legacy
equity success
exit income
gain branch
goal opportunity
heel completion
history system
housing tax
improvement benefit
improvement return
income exit
income housing
income interest
increase ROA
integration progress
loan Renasant
margin basis
merger history
momentum result
offs connection
return equity
RNST Transcript
Renasant Corporation (RNST) Q4 2025 Earnings Call Transcript
Positive1-28
The earnings call summary and Q&A indicate positive sentiment. Financial performance shows improvements in net interest income and expense reduction. Management maintains mid-single-digit growth guidance and focuses on profitability and strategic growth investments. The Q&A reveals confidence in loan growth and capital deployment, with buybacks prioritized. Despite intense competition, stable loan pricing and a robust pipeline support a positive outlook. Considering the market cap, the stock is likely to experience a positive movement of 2% to 8% over the next two weeks.
Renasant Corporation (RNST) Q3 2025 Earnings Call Transcript
Unknown10-29
The earnings call summary presents mixed signals: modest financial performance with some positive aspects like loan growth and a new stock buyback program. However, challenges such as increased criticized loans, expense increases, and unclear guidance on cost reductions and future profitability offset these positives. The Q&A section reveals management's cautious optimism but lacks concrete details, contributing to a neutral sentiment. Given the company's small market cap, the stock price might experience some volatility, but overall, the sentiment remains neutral, suggesting a stock price movement within -2% to 2% over the next two weeks.
Renasant Corporation (RNST) Q2 2025 Earnings Conference Call Transcript
Positive7-23
The earnings call summary highlights strong financial performance with solid loan and deposit growth, efficient expense management, and a strong capital position. The Q&A section confirms positive sentiment with expectations of modest margin expansion, strong loan pipelines, and future efficiencies from the merger. Despite some unclear responses, the overall outlook is optimistic with strategic goals on track, suggesting a positive stock price movement over the next two weeks.
Renasant Corporation (NASDAQ:RNST) Q1 2025 Earnings Call Transcript
Positive4-24
The earnings call summary presents a strong financial performance with increased earnings, net interest income, and deposits, alongside a decrease in deposit costs. Additionally, the Q&A session did not reveal significant risks or uncertainties, and management expressed confidence in their mortgage banking position. Despite no share repurchase in Q1, the authorization exists, indicating potential future buybacks. The market cap suggests moderate volatility, but the overall positive indicators suggest a likely stock price increase within the 2% to 8% range over the next two weeks.
RNST Report
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