Renasant Corporation (RNST) Q4 2025 Earnings Report, Transcript and Summary

Good day, and welcome to the Renasant Corporation 2025 Fourth Quarter Earnings Conference Call and Webcast. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Kelly Hutcheson. Please go ahead.

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 at the Press Releases link under the News and Market Data 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 President and Chief Executive Officer, Kevin Chapman.

Thank you, Kelly, and good morning. 2025 was a transformative year for Renasant, marked by considerable improvement in our profitability and strong balance sheet growth on the heels of the completion of the largest merger in the company's history. As we discussed during our October call, systems conversion took place in the third quarter of this year, and we continue to build on the successful integration progress that has already occurred. Throughout the year, we have been intentional about maintaining and frankly, accelerating the momentum in the company and believe our financial results reflect that focus. Our goal is to create a high-performing company that leverages the opportunities presented by our presence in many of the country's best economies. We strive to deliver excellent customer service led by an exceptionally talented team. This was evidenced by the organic loan and deposit growth we achieved in 2025. Renasant's core profitability showed significant improvement this year, fueled by the benefits of the merger with The First, along with ongoing efforts to improve efficiency at legacy Renasant. Adjusted earnings per share for the year were $3.06, representing an 11% increase year-over-year. For the year, adjusted ROA grew 94 basis points in 2024 to 110 basis points in 2025. Likewise, the adjusted efficiency ratio saw an approximate 900 basis point improvement year-over-year to 57.46%, and the adjusted return on tangible equity grew from 11.5% in 2024 to 13.79% in 2025. I'm extremely proud of what our team has accomplished this year and excited about how we are positioned to grow on this success in 2026. I will now turn the call over to Jim.

Thank you, Kevin, and good morning. I will now highlight financial results for the quarter. The company's net income was $78.9 million or $0.83 per diluted share. Adjusted earnings, excluding merger charges, were $86.9 million or $0.91 per diluted share. Our adjusted return on average assets of 1.29% for the quarter grew 20 basis points from the third quarter, and our adjusted return on tangible common equity of 16.18% for the quarter is an improvement of 196 basis points. Loans were up $21.5 million on a linked-quarter basis or 0.4% annualized. During the fourth quarter, the company sold approximately $117 million of loans acquired from the first which were not considered to be core to Renasant's business. Deposits were up $48.5 million from the third quarter or 0.9% annualized. From a capital standpoint, all regulatory capital ratios remain in excess of required minimums to be considered well capitalized. We recorded a credit loss provision on loans of $10.9 million comprised of $5.5 million for funded loans and $5.4 million for unfunded commitments. Net charge-offs were $9.1 million, which includes $2.5 million recognized in connection with the aforementioned sale of the acquired $117 million loan portfolio. The ACL as a percentage of total loans declined 2 basis points quarter-over-quarter to 1.54%. Turning to the income statement. Our adjusted pre-provision net revenue was $118.3 million. Net interest income increased $3.9 million quarter-over-quarter. Reported net interest margin increased 4 basis points to 3.89%, while adjusted margin was flat at 3.62% on a linked-quarter basis. Our adjusted total cost of deposits decreased by 11 basis points to 1.97%, while our adjusted loan yields decreased 12 basis points to 6.11%. Noninterest income was $51.1 million in the fourth quarter, a linked quarter increase of $5.1 million. This increase includes $2 million in income associated with the exit of certain low-income housing tax credit partnerships during the fourth quarter. Noninterest expense was $170.8 million for the fourth quarter. Excluding merger and conversion expenses of $10.6 million, noninterest expense was $160.2 million for the quarter, a linked quarter decrease of $6.2 million. This decrease includes an offset of $2.1 million in gains connected with branch consolidations during the fourth quarter. We are encouraged by the results of the fourth quarter and the positive momentum going into 2026. I will now turn the call back over to Kevin.

Thank you, Jim. As you have heard, Renasant is well positioned for 2026. We have a talented and motivated team, a strong balance sheet and an enhanced profitability profile. The banking industry continues to undergo significant change, and we are optimistic about our ability to take advantage of the opportunities. We appreciate your interest in Renasant and look forward to sharing our results. I will now turn the call over to the operator.

[Operator Instructions] And the first question today will come from Michael Rose with Raymond James.

Just wanted to start on expenses. Really nice step down, Kevin here on the systems conversion. I know this is kind of a long process, extending back to the previous administration to not only get this to the finish line, but also get the conversion done maybe a little bit later than I think you and we all would have hoped. But this was a nice, obviously, quarter of progress. Can you just walk us through kind of the puts and takes of how we should think about expenses through the year? Clearly, there's been a lot of M&A in and around your markets and other deal announced in Texas today. Can you just talk about what's still left to go in terms of cost savings from the first? And then from an opportunistic standpoint, how do you see the hiring playing out? And then I guess, maybe for Jim to wrap up, how should we think about kind of the level of expenses over the next quarter or 2?

Michael, this is Jim. And actually, I'll do that in reverse direction from the way you asked it, but I appreciate the question. And I will say, too, apologies upfront if we're not as smooth and filling the questions as maybe we usually are because we're each in a different location this morning due to the storm. And so we'll do our best. And actually speaking of that, we're definitely thinking of folks that have been impacting our marketplace. We're still feeling the impacts of the storm. We've still got lots of people without power. And like other companies, we've had a lot of people at the company working to make sure we get branches open and get people to where they need to be to help serve our customers. So it's been a grind, but hopefully, we're nearing the end of that. With that said, Michael, I'll start and then let Kevin sort of clean it up. But I think in Q3, we talked about roughly $2 million to $3 million we hope to see in Q4 and then in Q1 in terms of sort of core expense reduction, if you will. And I use that word core because I think it ties into, I think, what you're probably alluding to as we go forward in expenses and how we might think about that. So we still feel good about looking at Q1 and having that core number come down again in that $2 million to $3 million range. Salaries as we've seen -- that's the line item that probably shows the most significant impact, and that was down a couple of million dollars in Q4, and we expect a similar result in Q1. So I think our overall guidance in terms of core NIE, if you will, from what we said on the Q3 call remains unchanged. And -- but I do think it's important to talk about how '26 may unfold, and Kevin I would ask you to do that.

Yes. Thank you, Jim. And Michael, you're right. I mean, it feels like this quarter has been a long time coming. We announced the merger with the first back in July of '24 and really tried to put eyes on Q4 because we felt it'd be a good look as to how the company's performance was -- would look as we enter '26, and you start to see some of the benefits and the rationale of what we launched 18 months ago. And a lot of that is just cost saves from the merger, but also using it as an opportunity to unlock some of the potential at Renasant, legacy Renasant. And I think you saw this in Q3 that as we went through a conversion, that was the largest conversion that both companies ever contemplated we still grew. We grew in Q4, and we're doing it with less resources. We're doing it with less people. And I think Jim summed up where our expense trajectory as well. I'll just add to that, maybe a little bit of esoteric information about where our focus has been. If you go back and you look at our FTEs, us and the first back in June of '24, Q2 of '24, that was a little over 3,400 employees. I think at the end of this year, we're going to be a little bit above 3,000 employees. So we've eliminated 400 positions. That all hasn't been the first, by the way, and it all hasn't been by way of the merger. But as we stand right now, that number is sub 3,000. And so we are still working towards goals and efficiencies of improving our profitability and again, doing more with less. But also just to emphasize what Jim alluded to and what you mentioned, Michael, is we're seeing real opportunity and disruption, and we're not going to shy away from that. But we're going to continue to make investments in talent that will meaningfully improve our position, our customer service, our customer reach and ultimately improve our profitability. And so there'll be a little bit of a mixed message. We're still going to continue to focus on improving profitability and our expenses at Renasant. We're also going to continue to be very focused in making investments for future growth and future profitability. But like where we are, like our position, like the momentum in the company, like the focus from all of our teammates to improve the metrics that we think are important, but also be willing to be opportunistic and invest in future talent.

Very helpful. Jim, if I can ask a clarifying question. So the $2 million to $3 million, I think, reduction you said in the first quarter, I think that's what you said. So correct me if I'm wrong. But what base is that off of? Is that off of the core ex the merger charges? Or does it also incorporate the add-back from the gain that you guys booked, the $2.1 million gain. So I'm just trying to get a sense for what the base is.

Yes. It does incorporate that gain, Michael. So as you said, sort of take the -- I guess, it was roughly $170 million of back out, call it, I think it was $10 million approximately in merger expenses, and then we had that offset of $2 million and change. I don't remember the exact number, but right around $2 million. And that's the number I'm sort of jumping off from for Q1.

Okay. So the $162.3 million roughly versus just ex the merger charge would be $160.2 million, right?

Correct.

Okay. Perfect. Maybe just switching to loan growth. If I back out the loan -- or if I add back the loan sale gains this quarter, it looks like the growth was about 3% annualized. Can you just walk us through some of the puts and takes and maybe dovetailing with my prior question just on opportunities, not only for hires, but also for market share gains, just given some of the dislocation. What should we think -- is there any change to what you guys laid out last quarter, which I think is kind of a mid-single-digit growth outlook? Or could it potentially be better just given some of that dislocation and some of the hires that you guys have and plan to make?

Kevin?

Yes. Thank you, Jim. Thank you, Michael. Yes, as we look at loan growth, really no change to our guidance. We're still targeting for the year mid-single digits. And look, I think '26 can be similar to '25, where there might be some lumpiness in the quarters. I can't project with precision what it will be in Q1, but would just say over a longer time horizon, we're definitely positioned for that mid-single digit. And there is the opportunity for upside as market disruption occurs. But if you break down kind of what led to that 3% annualized in Q4, the production was good. The production was there, and our pipeline is still holding as we look at that. All of '25, we predicted payoffs, and we were wrong for 11 months or 10 months, but they finally materialized in late Q4. And so payoffs were elevated, and that's going to be a wildcard, Michael, as much as market share gain or taking -- being opportunistic with disruption, the payoffs is still going to be a little bit of a wildcard to that net loan growth, maybe on a quarter-by-quarter basis, I don't think it changes our guidance for mid-single digits year-to-date. But when we look at -- again, when we look at how we're operating fully integrated with the first, production coming from all markets through all channels continues to remain good. And so the production is there. The wildcard is just going to be the payoffs. But I think we're well positioned in what we're currently doing. And again, there is upside as market dislocation may present some additional opportunities throughout the year.

The next question will come from Stephen Scouten with Piper Sandler.

Kevin, you kind of spoke to maybe the push-pull between investing in growth and trying to manage expenses and profitability. I mean, I guess how can we think about that? I mean, could there be like an overarching efficiency initiative, coupled with a hiring plan? Is it you're adding production people, but trying to normalize maybe back office? Or just kind of how can we think about that push-pull dynamic around those 2 concepts?

Yes. So it's really -- it's all of the above. So let me just give you an example. If we just take production hires and terminations throughout the quarter, we eliminated 12 producers, not tied to the merger, not tied to -- there's more accountability measures is what drove that, but we added 6. And so it's that type of push/pull that we've been doing now for the last couple of years where accountability and an expectation of higher performance, not only of producers, but as a company as a whole. That is going to be our focus. With some of the talent that may be out there, Stephen, we may make an investment in back office that gives us scalability to a larger asset size than where we currently are today. And so it's hard to say that we're going to hire these many people and when we're going to hire them just given the opportunity for the disruption. What I'd tell you is, and I think this is consistent with what you've heard from us, our goal is to be high performing, not high performing, excluding all the bad stuff, but high performing. And so as we work to achieve that, A lot of the hiring we're doing, whether it's the investment or whether it is the additions to staff in the back office, that has to be paid for through higher levels of performance. And again, it's really hard to quantify and lay out where that will occur. I would just ask that you look over the last year, maybe the last 18 months, what we've been doing, and it's what's showing up in the numbers is that ROA, that ROE is going up to the right. The efficiency is down into the right. And that will continue to be our plan and our focus as we find ourselves in a really unique position with all the disruption, but also knowing Renasant has to continue to improve its profitability line.

Yes. No, that's great context. I appreciate that. And then maybe thinking about kind of capital usage from here. You've obviously got a fairly sizable repurchase plan. Kind of wondering how you're thinking about that given the stock still appears to be undervalued relative to peers and kind of how you'd stack rank that relative to obviously using for organic growth. And if M&A would even be on the table, I would think it'd be low down the priority list for you guys today, but just kind of curious how you think about that capital deployment.

Stephen, this is Jim. I'll start and then ask Kevin to add on. But -- so as you know, we -- Q2 was the first sort of combined quarter, and we felt -- after the merger, we felt good about where everything sort of shook out. And we -- I think we still wanted the added comfort of seeing Q3 be on time and on schedule. And with that, we felt more confident in sort of flexing our muscle, if you will, a little bit as it relates to capital uses other than organic growth. So organic growth is still #1, and we're hopeful we'll have a strong year in terms of growth. But I would say in terms of those capital levers, at least near term, the most attractive one to us would be buybacks. And of course, we had some activity in Q4 and would anticipate that activity continues into '26. Kevin, do you want to comment on M&A?

Yes. I'll add to that. And look, as we look at our capital plan and capital deployment, Jim laid out many of what's on the table. I'll also add, and I think we did this in the Q4, also redemption of debt. So we've got our full capital plan playbook open right now. And Stephen, that does include M&A. And it's something that we'll continue to look at. It's just got to meet our metrics. It's got to be that right partner. And again, it's a little bit backdropped against all the other opportunities we have, but M&A is still part of our plan. And again, it's something that we're fully ready to deploy if we find that opportunity or when we find that right opportunity.

The next question will come from David Bishop with Hovde Group.

Jim, I was wondering maybe some thoughts here. How should we think about the NIM outlook here? It looks like the Fed could be on the sidelines near term. Just curious maybe expectations for the margin here into the first half of the year and throughout.

Sure. So we -- coming into -- actually, I'll take a step back. The first, as you know, really helped our asset sensitivity position and lessened our asset sensitivity. And that played out in -- it's played out the last couple of quarters, but certainly in Q4 because we were -- I think, in talking with on the Q3 call and with investors post that, we were guiding to some slight degradation in the margin in Q4, we didn't see that, as you saw, and it behaved really well. Our outlook for '26 on margin. And I think we've got 2 cuts in sort of our outlook of, I think, March and September roughly of 25 bps each. Even with that, we expect the margin to behave relatively stable. We don't see much movement as we sit here today, plus or minus. And so with growth in balance sheet, net interest income should follow that. In other words, should grow as we've got balance sheet growth with a stable margin outlook, we should see some modest growth in those dollars. We're starting our year a little below where we thought we would in terms of loan balance given the loan sale and the payoff activity we had in Q4. But margin outlook, I would say, is stable, and we should have improving NII dollars as we go through the year.

Got it. And then maybe as a follow-up, any commentary in terms of the specifics of the loan pipeline, how that broke down at the end of the year relative to the end of last quarter?

Kevin?

Yes. So yes, Dave, just what -- so it's in line, it's consistent with what we've seen over the past couple of quarters kind of fully baked in with the first. And really, contributions, again, from all areas, no different than where we're seeing the production where all areas are providing. Likewise, we see that in the pipeline. Again, just good activity, good production potential. And again, that's across all segments, whether it's geographic, again, in the states we operate, Tennessee, Alabama, Georgia, the coastal area or even Mississippi or whether we look at it through our channels, the size of the loans, whether some of our small business, our middle market or even our larger corporate and our specialty lines. So just a good pipeline that really covers all the areas of the company. We continue to see that. And that's -- again, that's what we've seen for the last couple of quarters, and that's where we want to position the company. It's just not any one group driving all the growth, but a good contribution from everybody. And Dave, what I may add is that on the consumer side, we've seen a little bit of a pullback on the consumer side. If there is an area that's pulled back a little bit, it's more on the consumer side. But I would say that's probably more by choice than it is consumer behavior.

The next question will come from Jordan Ghent with Stephens.

I just wanted to ask about the loan sale and then maybe if you could give any additional color on the types of loans. And then going forward, if we should expect to see any more loan sales?

Jordan, this is Jim. So the loan sale involved a portfolio of loans secured by cash surrender value of life insurance policies. And it was a good performing portfolio, high-quality portfolio. And the first had picked it up through an acquisition, a previous deal that they had done. And I think they had sort of looked at that and said it's not really core to our business long term because there was no ancillary business with these loans, and they were not -- they were in and out of the footprint. So they had flagged this and we'd flagged it during diligence. And once we got systems conversion behind us and so forth, we started down that process and sold that book. There aren't any other portfolios or loans or categories at the first that we would see selling or divesting or slowing down. We felt like it was a good match. And David Meredith can add to this, but I think our initial read was we really like what they did. They had good client selection, and we like their book. So we don't really see anything else in the portfolio. But David, you may want to add to that?

Jim, thank you. The only thing I would reiterate exactly what you said, it was a solid performing book of business for the first when we went through due diligence, they viewed it as noncore. We viewed it as noncore. And it was with the ability to obtain probably full relationships out of those things, we've chosen to better focus our capital and our attention on those were better in market opportunities for growth, be it other loan opportunities, other deposit opportunities.

Okay. And then maybe just one follow-up. I wanted to ask what you're kind of seeing on the loan and deposit competition side, if you're seeing loan yields kind of come down significantly and as well as any irrational behavior?

So I would say, Jordan, generally, what we're seeing on both sides of the balance sheet in terms of competition is -- I'll embellish on it, but it's really unchanged. I mean, from what we've said the last couple of quarters, it's very competitive on both sides. I would say probably a little more competitive incrementally on the deposit side. And so our outlook for '26, we hope there is some relief on that front. We're not counting on it in our numbers. And so I think if somebody would say, okay, what's the vulnerability in our margin outlook, it would be maybe in the funding side, but I think we've accounted for it in terms of the way we're thinking about '26 and our margin. But it's definitely on the deposit side more than the loan side. We -- our 5-month special, the rate on that hasn't changed in probably 18 months, and it's sort of stuck at that 4% number, and we'd love to lower it. And hopefully, we'll get some relief on that in '26. But generally unchanged in terms of the competitive landscape on loans and deposits on the pricing front.

The next question will come from Catherine Mealor with KBW.

I wanted to follow up on your commentary on buybacks, Jim. You said that you expect the activity to continue into '26. Is it fair to assume that we should see a higher level that we saw in the fourth quarter? You've got a big authorization, but the activity we saw this quarter was pretty light relative to the authorization. Just trying to kind of frame kind of the level of buybacks that's safe to assume in our modeling for '26.

Sure. So with all the standard caveats in terms of how much organic growth we see and market conditions, I would frame it this way, Catherine, that I think we're roughly at 11.25% or thereabouts on CET1 at year-end. And I think we want to -- we would not want to -- I think we'd want to end up at year-end '26 something close to that or be willing to end up something close to that, I guess, I would say. And so again, we'll see what the environment holds in terms of other possible levers and so forth. But I would sort of frame it that way. We like where CET1 is. It's going to -- I think we're going to grow roughly 60 basis points, 50 to 60 basis points in that ratio. And so we'd like to end the year at roughly where we started the year.

That's fair. That's great. And then maybe one follow-up just on the margin. You added a great new slide, Slide 19 to your deck, which just shows some of the detail around loan repricing and maturity. As I look at that slide and I see fixed rate loans today are at around kind of 5.5% and then variable rate loans are about 6.3%. Where those 2 buckets, as you see those loans reprice and new originations replace it, where are you seeing new loan originations come on kind of relative to those rates?

So new and renewed, I'd say, is if we looked at -- I don't remember the December quarter, but probably, call it, right around 6%, upper 5s, low 6s, somewhere in that range. And I think we've got roughly $1.3 billion, if you look at the math on that table that you're referring to, roughly $1.3 billion in fixed rate loans that will reprice and those loans are at, call it, 5.25%. So maybe that helps frame the opportunity there in terms of repricing.

[Operator Instructions] And the next question will come from Janet Lee with TD Cowen.

So if I look at the fourth quarter profitability metrics, whether I look at ROA or ROTCE or efficiency ratio, you guys kind of achieved the levels that you wanted to achieve from the first acquisition, the slide deck that you filed a while ago, which was impacted in '25 given the changes in purchase accounting, et cetera. But -- so we're there. So is there any updated thoughts on where you want your profitability metrics to go from here? Or are we are we at the level that you guys wanted to achieve and it's more about scaling from here?

Janet, this is Jim. So maybe I'll start with that, but Kevin should add on. So again, I think you summed it up well. We feel -- we're pleased with the fact that we -- except for a couple of assumptions, we're pretty much on pace to achieve what we set out 18 months ago with respect to the merger and the economic benefits of it. So I feel really good about that. And we had sort of pointed all along to Q1 '26 as being -- hopefully being a clean quarter and showing distinctly the benefits that came out of that merger. And the other thing I should have mentioned is in expenses. We don't anticipate any M&A expenses in Q1. We think -- I mean, there could be something that dribbles in, but I think we've incurred the last of those in Q4. So I think you framed it well. We feel like we're very much on pace in '26 to attain largely what we outlined 18 months ago. And I think to sort of go from that to all right, where do we -- how do we think about future profitability and incorporate all the things going on in the industry and around us, I'll turn it over to Kevin.

Yes. Great question, Janet. It's just got me reflecting because I think to your point, we're right on top of what we projected 18 months ago. But 18 months ago, that would have put us in the top quartile of our peer group, right, based on what we knew at that time. Well, today, we're not in that top quartile. The peer has moved. I think we find ourselves right in the middle, which isn't where we want to be. Our goal is to be a top-performing company in all areas, including our financial metrics. So no, we're not there yet. One, because we didn't plan to land here 18 months ago and then be satisfied with that. We plan to continue to improve. But what's exciting about what's happened with our peer groups with the peers moving is it's forced us to continue to set our sights on higher goals. And what I see in the company, what I feel in the company is real momentum and real buy into that. And in some cases, opting out of it. But that's okay because that opt out is what will help us achieve our higher performing status. But what I see by and large is most people embracing that and actually relishing in it. And so our goal is to continue to improve from here and chase a moving target with the ultimate goal of being high performing. And I just -- I was somewhat reflecting on just this past year and this morning. And if you look at our results for the year, particularly as we leave Q4, really don't know what we projected as far as pretax pre-provision revenue back in '18. I can't remember what that was, but I suspect it's probably appreciably higher today than what we projected. And what I mean by that is that one thing that we did this year is we maintained our allowance just as we saw some migration in credit. We're not seeing any massive breakout. We don't have any significant concern. But we've also maintained allowance, and that has weighed on ROA a little bit, all things being equal. We're probably a little bit ahead of where we thought provision would be for '25 actual results compared to where we thought it would be in '24. And if you normalize for that, maybe we are a little bit closer to that top-performing peer group. But again, I just out of a mindfulness of caution, we've maintained some reserves. But I think if you look at -- if you look through that and look at the operating results, we're probably doing a little bit better than what we projected. -- but still aren't ready to drop a mission accomplished banner yet. The peer has moved. And frankly, that's what's exciting about this is we're relevant. We're in the game. We're in the middle of the pack rather than the bottom of the pack as it relates to our performance. And the difference between top performing and where we are is a few basis points. And so our execution, the strategies we have, our execution is what will make the difference against the peer group. And that -- to me, that's what's exciting and fun about this. It's not discouraging. You could easily say, well, we did all this work and we ended up in the middle, not the top. That's not really what I feel in the company. What I feel is an excitement that our plan and our team and our execution I feel confident that we'll continue to move up the rankings as we just perform. And we just need a little bit more time to perform. And that will continue to allow us to improve financial performance and ultimately achieve our goal of getting to that top performing or high-performing status.

That's great to hear. And just my last follow-up on loan growth. In terms of -- you reiterated that mid-single-digit guide for 2026, you cited strong pipelines. I understand you really don't have a lot of line of sight into payoffs. But what's giving you that confidence that -- are you seeing signs that payoffs are -- have moderated versus the fourth quarter level? And what gives you that confidence?

Yes. So I would just say the confidence probably is a little bit more of a longer period of time. So let's extend this out 12 months. It gives me confidence that over the course of the year, things will normalize. It may be abnormal quarter-to-quarter. But over the course of a longer period of time, I think we're well positioned to grow at that mid-single run rate. And that's not only loans, but also funding that appropriately on the liability side with deposits. But payoffs just early on, I mean, we're early on into the quarter. So it's really hard to gauge what payoffs will be for Q1. We're just kind of projecting that it's going to be a similar level of payoffs that we had in Q4, which were elevated compared to previous quarters. But that really isn't necessarily based on what we've seen in the first 20-something days of the quarter. It's really just a concern that these are lumpy. They show up sometimes unexpected or the first 20-something days really aren't in a good indication of what will happen and play out throughout the course of 90 days. But I just -- when I look at our production, when I hear -- when I talk to our teams and hear the opportunities that they see or they're having, the conversations they're having, that's what -- that gives me confidence that we're -- over the course of the year, mid-single digits is the appropriate run rate for us.

This concludes our question-and-answer session. I would like to turn the conference back over to Kevin Chapman for any closing remarks.

Thank you, Nick. And thank you to everybody that listened this morning, and we appreciate your interest in Renasant. We also look forward to meeting with investors throughout the quarter. Thank you.

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