Renasant (RNST) Q2 2025 Earnings Call Transcript

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DATE

Wednesday, July 23, 2025 at 10 a.m. ET

CALL PARTICIPANTS

Chief Executive Officer — Kevin Chapman

Chief Financial Officer — Jim Mabry

Chief Credit Officer — David Bishop

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TAKEAWAYS

Adjusted Earnings: Adjusted earnings were approximately $66 million, or $0.69 per diluted share, representing the first full quarter to reflect the combined operations following the First Bank acquisition.

Reported Earnings: Reported earnings were $1 million, or $0.01 per diluted share, impacted by merger and conversion expenses.

Loan Growth: Loans increased by $312 million, or 7%, from the combined companies' March 31 levels.

Deposit Growth: Deposits rose by $361 million.

Core Net Interest Margin: Core net interest margin expanded from 3.42% to 3.58%.

Reported Net Interest Margin: Reported net interest margin rose from 3.45% to 3.85%, reflecting purchase accounting adjustments.

Adjusted Total Cost of Deposits: Adjusted total cost of deposits decreased 18 basis points to 2.04%.

Adjusted Loan Yields: Adjusted loan yields decreased 1 basis point to 6.18%.

Adjusted Pre-Provision Net Revenue: Adjusted pre-provision net revenue was $103 million, driven by net interest margin improvement and balance sheet expansion.

Noninterest Income: Noninterest income was $48.3 million, up $11.9 million from the previous quarter, with $9.7 million of this increase attributable to the acquisition and a $1.6 million sequential increase in mortgage division income (excluding MSR asset gains).

Noninterest Expense: $183.2 million, including $20.5 million in merger and conversion costs; excluding these, noninterest expense was $162.7 million.

Merger Accounting: Fair value of assets acquired was $7.9 billion, and liabilities assumed was $6.9 billion; including $5.2 billion in loans acquired at the time of the merger closing, and $6.4 billion in deposits (fair value of deposits acquired in merger with First Bank, as of April 1, 2025), with goodwill recognized at $428.7 million, and core deposit intangibles of $159.6 million.

Credit Loss Provision: $14.7 million credit loss provision on loans, of which $13.2 million was for funded loans and $1.5 million for unfunded commitments, separate from day-one acquisition provisions.

Net Charge-Offs: $12.1 million net charge-offs, largely stemming from two C&I credits, with management emphasizing these were non-systemic losses.

Allowance for Credit Losses (ACL): Increased by 1 basis point quarter-over-quarter to 1.57% of total loans.

Capital Ratios: All regulatory capital ratios remain above well-capitalized minimums.

Efficiency Ratio: Adjusted efficiency improved by approximately 7 percentage points; management confirmed surpassing the 60% efficiency hurdle, with further improvement expected post-synergy recognition.

Systems Conversion: Scheduled for early August, with additional conversion-related expenses anticipated in the third quarter.

Loan and Deposit Pipeline: Both legacy and acquired portfolios reported a flat pipeline quarter-over-quarter; mid-single-digit growth guidance reaffirmed for full year 2025.

Guidance on Future Accretion: Mabry stated, "interest accretion was just a little shy of $10 million."

Buyback and Capital Allocation Priorities: CFO Mabry indicated organic growth and small-scale specialty finance acquisitions remain higher priorities than share buybacks in the near term.

Expense Synergies: Core expense savings from the merger are not yet reflected in Q2; expected to phase in during Q3 and Q4.

Charge-Off Commentary: Net charge-offs primarily related to two pre-identified C&I loans, not deemed systemic to the broader portfolio.

Credit Provision Modeling: The $14.7 million provision was modeled principally on loan growth, specific charge-offs, and updated loan loss factors.

Management Strategic Focus: CEO Chapman emphasized, "we are squarely focused on the largest acquisition we've done" postponing new acquisition activity until full integration and system conversion are complete.

Margin Sensitivity: Management expects minimal impact to core margin from two anticipated Fed rate cuts later in the year.

Time Deposit Amortization: CFO Mabry confirmed scheduled time deposit accretion will run off over about five months.

Noninterest Income Drivers: Mortgage business showed "a nice rebound" and is expected to benefit from demographic trends and market expansion following the integration.

SUMMARY

Renasant Corporation (NYSE:RNST) presented its first full quarter integrating First Bank, reporting $66 million in adjusted earnings, outpacing GAAP results due to notable merger-related expenses. Management cited clear progress on balance sheet growth, margin expansion, and efficiency improvement, aided by the acquisition’s contribution to loans, deposits, and noninterest income. Fee income growth may be further supported by recent mortgage momentum and new capability integration. Strategic priorities center on full integration, cost synergy realization, and preserving capital for organic growth and selective specialty finance expansion.

CFO Mabry stated, "we had, I think it's roughly $20 million in merger expenses in Q2. Pardon me, I think you'll see about $25 million in the second half of the year in terms of merger expenses. And most of that will come in Q3."

Management reaffirmed previous long-term efficiency and profitability targets, with CEO Chapman asserting, "No real update other than to say we're tracking right in line with what we laid out a year ago."

Leadership indicated that large-scale M&A activity is deferred until the current merger and conversion process is fully executed.

INDUSTRY GLOSSARY

MSR: Mortgage Servicing Rights — the contractual right to service a mortgage loan, typically generating fee income for the holder.

PCD/Non-PCD Mark: Purchased Credit Deteriorated (PCD) and Non-PCD refer to accounting classifications for acquired loans with or without notable credit deterioration, impacting reserve calculations after an acquisition.

ACL: Allowance for Credit Losses — a reserve established to absorb estimated losses on loans and leases.

Efficiency Ratio: A metric calculating noninterest expense as a percentage of revenue, often used to assess a bank's operating efficiency.

Full Conference Call Transcript

Kevin Chapman: Thank you, Kelly, and good morning. We appreciate you joining the call and look forward to sharing results that reflect our merger with the First Bank shares and the successes we have enjoyed since the two companies came together. We closed the transaction on April 1, and our second quarter numbers reflect a full quarter of operations from both companies. I am proud of the results and believe they are a great reflection on the hard work of our employees in bringing the companies together. While we still have systems conversion in early August, the cultural integration of our employees and customers has gone well.

The teamwork and collaboration from employees in all areas of both companies have put us right where we need to be from an overall perspective of the merger. We are very encouraged by these early results, and we will continue to remain focused on the work of meeting the needs of our customers by successfully integrating teams from both companies. I will now highlight a few of our second quarter financial results. Our reported earnings were $1 million or $0.01 per diluted share. Adjusted earnings were approximately $66 million or $0.69 per diluted share. Importantly, both sides of the balance sheet demonstrated positive growth for the company and revealed the work done to solidify employee and customer relationships.

Loans were up $312 million or 7% from what the combined companies reported on March 31. Likewise, deposits were up $361 million or 7%. We also saw meaningful expansion in the core net interest margin from 3.42% to 3.58%. Reported margin, which reflects purchase accounting adjustments, rose from 3.45% to 3.85% for the quarter. Our adjusted total cost of deposits decreased 18 basis points to 2.04%, while our adjusted loan yields decreased only one basis point to 6.18%. As you can see, our earnings trajectory and balance sheet strength are evident in the second quarter results. We are well-positioned for the second half of the year and are on track to realize the benefits of the combination.

I will now turn the call over to Jim Mabry.

Jim Mabry: Thank you, Kevin. The merger creates an exciting but noisy quarter. I'll begin with highlights from the merger. The fair value of assets acquired totaled $7.9 billion and included total loans of $5.2 billion. The fair value of liabilities assumed totaled $6.9 billion and included total deposits of $6.4 billion. Core deposit intangibles totaled $159.6 million, and preliminary goodwill arising from the transaction totaled $428.7 million. From a capital standpoint, all regulatory capital ratios remain in excess of required minimums to be considered well-capitalized. Turning to asset quality, we experienced improvement in our past due loan percentage, and nonperforming loans were flat.

There was an uptick in classified loans, largely driven by layering in the portfolio from the first and not due to deterioration. Excluding day one provisions, we recorded a credit loss provision on loans of $14.7 million, comprised of $13.2 million for funded loans and $1.5 million for unfunded commitments. Net charge-offs were $12.1 million, largely comprised of two credits, and the ACL as a percentage of total loans increased one basis point quarter over quarter to 1.57%. Turning to the income statement, our adjusted pre-provision net revenue was $103 million. Net interest income growth was driven by improvement in the net interest margin and balance sheet growth.

Noninterest income was $48.3 million in the second quarter, a linked quarter increase of $11.9 million. $9.7 million of this increase was attributable to the first, while our mortgage division drove much of the remaining increase. Mortgage experienced a solid quarter in terms of volume, resulting in an increase in income of $1.6 million from the first quarter after excluding a gain on sale of MSR assets. Noninterest expense was $183.2 million for the second quarter. Excluding merger and conversion expenses of $20.5 million, noninterest expense was $162.7 million for the quarter. With systems conversion a couple of weeks away, we expect to see additional conversion-related expenses in the third quarter.

We remain on track to achieve model synergies by year-end. The improvement in net revenue, coupled with cost containment from the combined companies, resulted in an improvement in our adjusted efficiency ratio of about seven percentage points. We are encouraged by the results of the second quarter and the momentum for the remainder of 2025. I will now turn the call back over to Kevin Chapman.

Kevin Chapman: Thank you, Jim. We began the process of this merger over a year ago. There has been a tremendous effort by employees from both companies to create the new higher-performing Renasant. We are excited about capitalizing on the opportunities ahead of us and delivering strong financial performance to our shareholders. I'll now turn the call back over to the operator for questions.

Operator: Thank you. We will now begin the question and answer session. Our first question will come from Michael Rose with Raymond James. Please go ahead.

Michael Rose: Hey, good morning everyone. Thanks for taking my question. Just have a couple for you. Just, Jim, maybe if we can just kind of walk through the margin. I think the total amount of accretion is higher. The core margin was obviously up. Can you just give us some color on what to expect? I know there's a lot of moving parts still, including another full quarter of the combination, but what are the puts and takes for the core margin as we think about the combination as we move forward? And then what should we think about in terms of scheduled accretion for the next couple of quarters? Thanks.

Jim Mabry: Good morning, Michael. Thanks for the question. So a couple of things. We focus on core, and I'll certainly touch on the purchase accounting influence on overall margin. But I would say in core, our outlook includes two rate cuts later this year, I think September and December, and so we've got that in there, but I would say they have a de minimis impact on our guidance or expectations for margin. A core margin. I would say in terms of the core looking forward and certainly in Q3, maybe to a lesser extent in Q4, we do see room for some modest expansion in that core margin. So we were at 3.58 as you know, for Q2.

I'm cautious to use a spot margin number, but I would say I offer this. Our spot margin in June was 3.60. So that'll give you a sense of some upside there, although again, cautionary note there, monthly margins can be a little misleading. So I'd say that in the core, some modest expansion expected here in the near term. In terms of the accretion, think about it in two buckets, interest and credit. And of course, we view that over time as that accretion coming into core. So that'll transition from purchase accounting into core NIM over time. And I think that for the quarter, the interest accretion was about just a little shy of $10 million.

And I would say for both interest and credit in terms of trying to predict how that will come in an income statement in future quarters. And the normal part of that, I would say you can use Q2 as a pretty good proxy for what Q3 and Q4 will look like as it relates to the accelerated pieces of that accretion. That's just a really tough thing to project. So I'll stop there and happy to elaborate if it's helpful.

Michael Rose: Yes. So obviously, you had some purchase time deposit amortization and long-term borrowing amortization quarter. But if I just take the kind of the 17.8 million, is that what you're talking about should be, you know, in the ballpark for the next couple quarters?

Jim Mabry: Yeah. I would say so we had roughly $16 million of purchase accounting accretion in the quarter, roughly. And maybe it's 17 if you include some other things. And that the normal part of that was about $13 million plus or minus, and would think that's a pretty good indicator of what you're likely to see in the next quarter or two. The accelerated piece, which is again, a little less than maybe $5 million is just a tougher thing to project, Michael. I'm trying to predict that is a tough thing to do.

Michael Rose: Totally got it. Just wanted to understand some of the pieces. Okay. Perfect. And then maybe just as a follow-up. Just as we think about the loan growth of the combined company, obviously, pretty solid again this quarter. Can you just touch on pipelines, hiring efforts, and some of the benefits, you know, as we think about the combined company, larger balance sheet, etcetera, from a growth perspective as we move forward? Thanks.

Kevin Chapman: Yeah. Hey, Michael. It's Kevin. So if you look at what both companies did in Q4, saw balance sheet growth, both loans and deposits in that 6% to 7% range. And I know we all know this, but it was on the backdrop of one of the most disruptive times in the company. So commend the efforts of everybody throughout the company to integrate, plan for a conversion, and also continue to grow in our markets. So we're extremely excited for the work that was done to just grow the balance sheet in a very disruptive time. As we look at the pipeline, the pipeline's holding flat.

If we look at our historical pipeline, if we look at our pipeline in Q2, compared to where it would have been in Q1, Renasant legacy pipeline is flat as well as the first. So you put both of them together, we still have a very strong pipeline. And I would caveat that with the past two quarters, both companies' pipeline was up compared to the prior quarter. So as far as opportunities, we still see it. We firmly believe we're in some of the best markets in the country, some of the best markets in the Southeast. And I think that's reflected in the pipeline.

As we look out for the rest of the year, we're still guiding towards mid-single-digit loan and deposit growth. Yeah. A couple of things could weigh on that or could factor into that, the payoffs. I think we've communicated in the past that we anticipate payoffs to pick up throughout the course of the year. That hasn't really materialized yet. But at any point in time, the shape of the yield curve or volatility in the yield curve, that could accelerate. So we're still guiding in that mid-single-digit. And we've intentionally tried to get ahead of that at the beginning of this year, the end of last year, having production that would keep us in that mid-single-digit.

But I would just say pipelines are good. Our team is focused on capturing market share opportunities throughout all of our markets. I think it's reflective in Q2.

Michael Rose: Okay, great. Thanks for taking my questions. I'll step back.

Operator: Thanks, Michael. The second question comes from Matt Olney with Stephens. Please go ahead.

Matt Olney: Hey, good morning. Thanks for taking the question. Want to ask more about expense levels. And I think the core expenses that you mentioned look really good in the second quarter. And it sounds like we should anticipate more non-core expenses in the next few quarters as you integrate. But as far as the core levels and as you layer in the cost savings, I'm curious about the expectations for the core expense levels in the next few quarters. I think before we said that the first full quarter of fully loaded cost savings wouldn't be till the first quarter of next year. Just looking for additional color if that's still the case. Thanks.

Jim Mabry: So yes, as it relates to the expense outlook for the next couple of quarters, I'd say this, there's really no, as you would expect, there's virtually no efficiencies really reflected in Q2 from the merger. And that'll start to show up in Q3. As you know, we've got our systems conversion slated for early August. And so sometime after that, we'll start to see those efficiencies show up. So the way I would think about it is Q3, you'll see some efficiencies show up in the expense line. Then you'll see a little bit more show up in Q4.

And then we still believe that when we get to Q1, it'll our goal is to have a clean income statement that reflects all the efficiencies that we sought in the deal. The other thing I would add is you saw we had, I think it's roughly $20 million in merger expenses in Q2. Pardon me, I think you'll see about $25 million in the second half of the year in terms of merger expenses. And most of that will come in Q3.

Matt Olney: Okay. That's helpful, Jim. Appreciate that. And then just as a follow-up, maybe a bigger picture question. I think a year ago, we talked about getting the efficiencies from the transaction. And strategic goals, ROA of 1.25% to 1.30% and efficiency ratio down to 56%. So as you just look at the overall landscape now and kind of the first full quarter with the transaction, any updates as far as your longer-term strategic goals with respect to profitability ROA and efficiency?

Kevin Chapman: Matt, it's Kevin. No real update other than to say we're tracking right in line with what we laid out a year ago. If you look at the efficiency ratio for Q2, we are right on track. We've busted through the 60% hurdle that we've talked about a long time. We're comfortably below that. And that doesn't include any of the cost saves yet to be realized in Q3 or Q4. The balance sheet growth that we expected, that's driving revenue. That's occurring. And so what we laid out was the combination would unlock potential on both sides of the company.

And we think that's occurring, so no real update other than we are right on target with where we plan to be. If you look at the balance sheet that we projected in July, we came in really on both sides, both Renasant and the first. Came in right on top of where we expected to be. So everything is lining up the way that we want it to, and it'll be our focus and our goal to continue to work and extract incremental improvements on the goals we laid out. But right now, we feel very comfortable about the guidance that we laid out over a year ago, about ROA, ROE, those profitability metrics that we key in on.

Matt Olney: Okay. Thanks for taking the questions.

Operator: Thank you, Matt. The third question comes from Catherine Mealor with KBW. Please go ahead.

Catherine Mealor: Thanks. Good morning. Just one follow-up on the margin. Jim, can you tell us the duration of the amortization that we'll see on the time deposit accretions? I'm assuming that runs off pretty quickly.

Jim Mabry: It's about five months, Catherine.

Catherine Mealor: Okay. Perfect. And then this quarter, we saw a little bit of elevated charge-offs of problem loans that was up $2 million or so. Just can you give us a little color around what that was and then what does their run rate for that is moving forward?

David Bishop: Hey, Catherine. Morning, Nathan. This is David. Hi, good morning. So on those two credits, those were both credits that we have had identified as problem loans, carried them as rated assets for a period of time. Both of them were on the C&I side of the house. They were not necessarily systemic. They were individual scenarios that drove each one of those. And happy to provide color if needed on the individual situations. But they were one-off credit opportunities or credits that we needed to go ahead and remove from the balance sheet. One of them we had the charge-off was almost fully impaired. The other one was a little bit more of a change from a company standpoint.

And we went ahead and charged that one off. Again, so those weren't deemed to be systemic of our C&I portfolio of our loan book. And if you look historically, we've historically had a couple of bumpy quarters here and there as we've removed problem assets from our balance sheet.

But, again, it's normally those numbers kind of revert back to you look at the last twelve months, I think we were eight to 10 basis points on average last twelve months and that number somewhere around 10 basis points is plus or minus a couple percentage kind of where we've been for the past few years and I would expect on a go forward that number would probably be somewhere in that ballpark maybe just a tad higher just based on the economic environment we're in, but somewhere plus or minus ten basis points, maybe no higher than 15 basis points.

Catherine Mealor: Okay. Great. And maybe one more if I could on just buyback activity. Just kind of curious now that you've got the deal closed and you've still got high levels of capital and certainly at your higher levels of ROTCE, you're accreting capital pretty quickly. Just curious how you kind of balance thoughts on potential buybacks?

Jim Mabry: Sure, Catherine. This is Jim again. So again, it's going to sound like a broken record, but first and foremost, it's that capital that we are creating is there to support organic growth. As Kevin mentioned, we're really pleased with the growth that we've had. And we've had good growth for a number of quarters. And so really pleased with that. So that's first and foremost. And then I would say certainly any bolt-on, and we've talked about this from time to time, any bolt-on sort of small acquisitions that add to our expertise and knowledge in specialty finance areas. Factoring asset-based lending, whatever, that's something we continue to look at.

I don't envision that being significant, but we remain very interested in adding to what we've got there. And I would say talent too. I mean, it's part of the organic growth picture, but always thinking about the addition of talent to the team and or hope that those opportunities will continue to be available to us. The other thing I will add is, we continue to look at we did I think two legacy Renasant restructures in the securities portfolio. We keep that in the mix.

And then certainly buybacks are there, but you can sort of walk through those that buybacks aren't necessarily at the top of the list but they certainly are on the list given the way we're at Creek Capital. Lastly, the back of our minds, although it's probably not anything in the near term. But we want to think about maintaining capital for future bank M&A on the road. So that's the way we think about the pecking order in terms of capital levers.

Catherine Mealor: Very helpful. Thank you.

Operator: The fourth question will come from Stephen Scouten with Piper Sandler. Please go ahead.

Stephen Scouten: Thanks. And maybe just to follow-up on some of the things you just said Jim about capital allocation longer term. I mean appreciating that you haven't even gotten to the core conversion on FPMS yet, but when would you guys be, you know, open to thinking about whole bank M&A again if the opportunity arose? And would there be an area of focus or a size of focus at some point down the line? Is again just too early to think about that?

Kevin Chapman: I'll take this. I think it's a little bit too early to really plan for anything definitive. We still have conversations with a variety of different management teams. Couldn't have continued those conversations. Even as we've been focused on the FERV. But would just reemphasize and I think we've you and I have had this conversation. The focus is the FERV. This has the most meaningful impact for both companies, both shareholders, and that's where our focus is. I know there's a lot of focus on the cost saves. There's a lot of focus on conversion. As a management team, we are focused on the balance sheet and the revenue that's driving. That's where our attention is.

And it's on deck. And we don't want anything in us that's gonna derail us or us off track from the benefits that are available to us with the first. So that's where our focus is. As we get conversion, as we continue to fully and successfully integrate both companies, then maybe we'll change our position on what our focus will be M&A. But right now, I would just say we are squarely focused on the largest acquisition we've done with the most customers, the most employees. That for our focus is that has the most impact to both shareholders. And, honestly, anything that would be on our radar screen wouldn't be as positive impactful as what the opportunity is.

So that's why our focus is there. And right now, we're so close to the finish line. We don't want to do anything that would self-inflict, you know, an error or anything that would cause us to track from this opportunity. So that's where we're focused right now. That'll change over time. Now, we're focused on wrapping up the successful conversion. Successful integration of the first.

Stephen Scouten: Yeah. That makes a lot of sense. Appreciate that color. And then on the remaining securities from the first, and I think you guys sold about a little less than half of their book. Was that kinda always the plan for that securities book? Or did you end up changing the path to any degree in terms of what you sold and what you kept and you know, could that still be in the cards potentially to evaluate moving forward?

Jim Mabry: So I would just say, as you say, we sold roughly 50% of the securities, at the And our team had I think, early on, done a lot did a lot of work early on, and that number may have moved around a little bit over time, frankly, not very much. And so what we ended up selling and executing on was sort of planned for a while. And I don't see never, you know, never preclude anything, but I think if there's additional work to do with the securities portfolio, it would because it's really all Renasant, that's the way I sort of think about it.

But any future terms of repositioning would likely be on the PSC Renasant side.

Stephen Scouten: Got it. Perfect. And then just last thing for me. I know you guys give a lot of good credit color, and it sounds like some of the maybe noise this quarter was just kinda deal-related and nothing to be overly worried about moving forward. But the provision was still obviously a bit higher than it has been ex even the kind of one-time accounting noise. So was that more about just how the model worked with the combined balance sheet and keeping the loan losses or percentage relatively flat? Is that the way we should think about it, the reserve percentage kind of staying in this mid-150s range?

Or what were the other dynamics kind of led to that, you know, I guess, for that $14.7 million and kind of I don't know if you want to call it, like, core provision, if you will.

David Bishop: Hi, Steven. This is David. So there's as you know, there's a lot of noise in that CECL number this quarter. As we've noted, the PCD non-PCD mark is related to the first if we remove those from the conversation. The other part of the recent provision in Q2 was largely related just to how our model works as you pointed out, particularly with the couple of losses that we had for the quarter, there was a charge-off that just impacted our factors and say a couple of factors that of our model. In particular, those two drove our historical loss within those reflected those respective books, particularly the C&I and unoccupied CRE.

And that historical loss ratio was modified in Q2 relative to those loans. And so that just caused a change in our model. There was a relook as we did every quarter in our Q factors and had a reflection on our reserves in our model. Wasn't necessarily specific to those two credits that something we do consistently on a quarterly basis. And then the third attribute I would just our loan growth, obviously, the level of loan growth in the quarter would have had a material impact on our model as well from a provisioning standpoint. So all three of those but it was a model-driven size that drove the increase in provision for the quarter.

Stephen Scouten: That's great. That's extremely helpful. Thank you guys for all the time this morning. Appreciate it.

Operator: Thanks, Steven. That's bizarre. What the Hey, Walt. Do we still have anybody in the queue?

Kevin Chapman: We are ready for the next question, yes.

Operator: Next question comes from David Bishop at Hovde Group.

David Bishop: Thank you. Hey, morning, Justin. I'm not sure what happened there. Hey, a question for Jim. Just curious, the interest rate risk position post-close of the first acquisition. Maybe how the balance sheet sets up for a potential 25 basis point Fed rate cut, curious what your sensitivity looks like post-merger?

Jim Mabry: Sure. Good morning, Dave. So, as you probably recall, the first really implemented our balance sheet and that it would starve our sensitivity position a little bit. If you look at the rate cuts, of course, they occur late in the year, but they really have virtually no impact in the margin guidance that we would give. Now, full year probably a little but I can I can this that without the first, it would have been a little bit different story? So, the first definitely benefits our sensitivity position and that we're a little less sensitive. So, that sort of came across as we are happened as we thought in terms of merging the balance sheet together.

David Bishop: Got it. And then, Kevin, Jim, curious, you talked about the opportunities on the expense side of the equation. Are there any opportunities on the fee income side of the house that really haven't been tapped yet that part of the numbers yet that has you pretty excited as you look forward?

Kevin Chapman: Yes. Dave, I think there's a couple. And I think you're seeing start to build in the numbers. One, I know we've had to apologize for being in the mortgage business for the last couple of years, but mortgage had a nice rebound in Q2. And I think actually we were contrary to maybe what was happening nationally to some of the data coming in mortgage bankers. And you know, the opportunity we have and the new footprint with the first, a lot of inbound migration. There's a lot of rooftops. That will only help and assist mortgage. On the management side, you know, we talk about a conversion this in ten days of our system. We've been slowly converting.

Our management solutions into the first so that's been ongoing. And so we think that has potential upside in the future. As to income that can be offset. And then also other things like capital markets and things that we've done management, the desk that we operate now. So these numbers are in some cases, two of those numbers may be buried in other noninterest income. They're growing at a fairly appreciable rate, and there's been really good adoption, really good interest. From our team members at the about those products, what they offer, how we'll differentiate them in the market. And so I think there's several opportunities in that noninterest income line item.

That are bright spots and should help drive additional incremental revenue as we continue to fully integrate. There is opportunity at the top line revenue, net interest income, with some of the secured business lines or business lines that we provide, lending lines that we provide that maybe the first didn't have yet ABL factoring equipment leasing a larger loan limit, some of our expertise and specific real estate or middle market C&I.

We've seen early wins, early successes in the first quarter in all those business lines of partnering up cleaning up with bankers from the first as well as some of our meeting up with our teammates over at the on the Renasant side, to market opportunity that otherwise either one of us have opportunity to win. So we're seeing early successes and early wins just from the first quarter and excited about what that indicates happen in future quarters. In future periods.

David Bishop: Got it. Appreciate that color. Thank you, again, for the technical difficulties.

Operator: With no further questions, this will conclude our question and answer session. I would like to turn the conference back over to Kevin Chapman, CEO, for any closing remarks.

Kevin Chapman: Thank you, Wyatt, and appreciate all that were able to join the call today. Look forward to having future conversations at conferences come up in Q3. And, again, appreciate everybody that joined the call today.

Operator: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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