Oct 28, 2026 earnings call — Merger with Commercial Bank and strong loan growth
Announced merger with Commercial Bank and Trust valued at approximately $140 million, approximately 4% accretive to EPS and closing in the first quarter of 27.
Revenue $0.3B (est $0.3B) · EPS $0.86 (est $0.94)
Key quotes
"Highlights this quarter include strong loan and core deposit growth, record level of loan production, a stable core net interest margin, a reduction in problem credits, a reduction in expenses, and continued buybacks."
"In addition, we are pleased this morning to announce the merger with Commercial Bank and Trust, which will strengthen our presence in Memphis and provide solid, long tenured deposit and wealth management relationships throughout Western Tennessee."
"Reported net interest margin decreased 6 basis points to 3.77%, while adjusted margin was down 2 basis points at 3.58%."
Analyst Q&A 7
funding loan growth with deposits
Q (Stephen Scouten · Piper Sandler): He asked how deposit growth can fund the strong loan growth and how new customers are developing. He also asked whether the recent bank deal was driven by its deposit base and if the deal affects share buybacks.
A: Management said core deposits are growing beneath some public-fund noise and that seasonality should reverse, helping fund loans. They said the acquisition complements their focus on building stable core deposits and that buybacks remain authorized at $175 million but may be somewhat tempered near term.
"But as we look out we feel that having a balance sheet that and our strategy of growing our balance sheet in the mid single digits over time that allows us to properly fund it." — Kevin D. Chapman (CEO)
NIM outlook and loan growth drivers
Q (Michael Rose · Raymond James): He asked how core NIM should move over the next quarter or two given deposit trends. He also asked whether the loan growth acceleration was from new hires or market disruption and if mid single digit growth is the right outlook for 2027.
A: They said core NIM has behaved well and, given their rate assumptions including a December and 2 other hikes in 2027, they see modest upside to NIM over the next one to two quarters. They said loan growth is broad-based across regions and product lines, the mid single digit balance-sheet growth target remains appropriate, and recent hires (11 revenue producers added in the quarter) and the First team integration are helping capture opportunity.
"And I would just add to that, Mike, on the right hand side of the balance sheet, Kevin spoke earlier that underlying core deposit growth was around 8% annualized for the quarter." — James C. Mabry
expenses impact from hiring
Q (Matt Olney · Stifel): He asked for outlook on expenses given recent hiring and whether expense trends will stay contained. He also asked about any change in competitive pressures on loans and deposits.
A: They said expenses were well contained but expect a slight increase in Q4 largely tied to recent hires and some merger expenses. They said competition remains pronounced, especially for deposits, spreads are tight, and their focus is on growing core deposits while managing cost.
"our outlook is for a slight increase in expenses, which could almost be 100% tied to what Kevin referred to earlier in these hires." — James C. Mabry
deal fit, funding mix, and reserve levels
Q (Will Jones · KBW): He asked about revenue synergies from the acquired wealth business and if Renasant is open to similar M&A. He also asked whether higher borrowings will decline as deposit pipeline improves and when reserve levels might come down.
A: They said the target bank fits their M&A profile, has over $1 billion of wealth AUM largely in trust, and they have not modeled revenue synergies though opportunities exist. They said they aim to match loan growth with deposit growth and prefer zero balances at the FHLB and brokered deposits; and they said reserves have been reduced as asset quality improved and, per their model, reserve need should continue to come down as criticized loans and NPAs decline.
"As we have continued to have improved asset quality, our criticized and classifieds come down 4 quarters in a row as you pointed out." — David Meredith
loan yields, pipeline, single bad loan
Q (David Bishop · Hovde Group): He asked what new loan yields were this quarter versus last and how the pipeline looks after higher rates. He also asked whether the commercial acquisition offers loan growth niches and for color on the single credit that drove provisions.
A: They said core loan yield in Q3 was about 6.11% and new and renewed loans were roughly 6.19%, with September new/renewed at 6.35%. They said the pipeline pulled back a bit but remains healthy, the acquisition offers capacity to manage larger relationships and complement specialty lines, and the charged-off single C&I credit was recognized as a problem in Q1, impaired, and then written down to realizable value after valuation in Q3.
"We received that value of those assets back in Q3, and so we went ahead and charged it down to what we believe to be the realizable value." — David Meredith
deposit beta, hiring stage, and M&A hurdle
Q (Janet Lee · TD Cowen): She asked what interest-bearing deposit beta is assumed for the NIM outlook. She also asked where they are in the talent investment cycle and how that affects ROTCE, and how M&A criteria have changed now that ROTCE is closer to peers.
A: They said their deposit beta is modeled near term in the upper 40s to low 50s and then graduates to the mid 50s. They said they are in the middle innings of hiring displaced talent, focusing on wealth, treasury, and core bankers while keeping mid single digit growth guidance, and that M&A now faces a higher hurdle with the commercial deal expected to be accretive by roughly 70 basis points to ROTCE and about 5 basis points to NIM and ROA when fully phased.
"So in terms of interest bearing deposit beta, I think near term it is probably upper 40s, low 50s and it sort of graduates from near to mid 50s is what we have got in our model." — James C. Mabry
accretion outlook and mortgage fees
Q (Matt Olney): He asked why accretion stepped down and for guidance on accretion from here. He also asked about the fee line, noting softer mortgage fees and whether other fees should be called out.
A: They corrected core loan yields to 6.08% for the quarter and 6.11% in September. They said accelerated accretable yield is hard to predict, estimate total accretable yield for Q4 around $10 million with about $1 million accelerated, and they expect mortgage fees to be softer in Q4 leading to a modest decline in other income while wealth remains stable with low single-digit increases.
"I think total accretable yield will be around $10 million." — James C. Mabry