Rate has done nearly all it can for your cost of funds. Mix has barely started.
An excellent quarter, and one lever still largely untouched.
Renasant is having a genuinely excellent year. Return on assets reached 1.33%, up from 0.94% a year earlier, and return on average tangible common equity reached 16.36%, up from 10.16%. The adjusted efficiency ratio improved to 52.82% from 64.43%, and diluted earnings per share went from $0.65 to $0.94. For a company absorbing its largest ever merger and integration, that is a considerable piece of execution.
Funding is not scarce. Deposits grew $626.4 million in the quarter, roughly 11.5% annualized, while loans declined $71.8 million. Loans to deposits eased from 89% to 86%. On the same call, however, management was candid that one particular lever is close to spent.
Chief Financial Officer James Mabry told analysts that much of the expected deposit repricing has already been realized. If rate has largely done its work, the remaining lever on funding cost is mix. Noninterest-bearing deposits stand at 23.5% of the total; the other $16.9 billion carries a blended cost of 2.54%.
Meanwhile the consumer share of deposits moved from 48% to 44% over four quarters while public funds moved from 17% to 19%, a shift toward the most seasonal money on the balance sheet.
One percentage point of deposit mix is roughly $221 million, and at the reported 2.54% blended rate that is about $5.6 million a year. Three points is closer to $16.8 million. That is the deposits leg of GROW alone, before any consumer lending or interchange.
Strong results across the board, and one trend worth planning around.
All figures from the Q1 2026 earnings release and investor presentation, period ended March 31, 2026, compared against the same quarter a year earlier or the prior linked quarter as noted.
| Metric | Q1 2026 | Comparison | What it signals |
|---|---|---|---|
| Return on average assetsAgainst Q1 2025 | 1.33% | 0.94% | A substantial improvement. The integration is delivering what management said it would. |
| Adjusted efficiency ratioAgainst Q1 2025 | 52.82% | 64.43% | Expenses are well managed, so the opportunity here sits on the revenue and mix side. |
| Deposit growthLinked quarter | +$626.4M | +11.5% ann. | Funding volume is not the constraint. What the growth is made of is the question. |
| Of which public fundsSeasonal inflow, linked quarter | +$380.4M | 61% of growth | The majority of the quarter's growth is the most seasonal money on the sheet. |
| Noninterest-bearing shareOf total deposits | 23.5% | +$139.5M | The lever with the most room. Every point shifted here is pure funding cost saved. |
| Cost of interest-bearing depositsAgainst Q1 2025 | 2.54% | 2.89% | Already worked down hard. This is the rate saved on each dollar moved to noninterest-bearing. |
| Consumer share of depositsFour quarters, excludes time and public funds | 44% | 48% | Retail relationships are a smaller share than a year ago while public funds grew. |
| Consumer loansShare of total loan book | 1% | $103M | Roughly $103M across a $19.0B book. The retail households are here; the lending is not. |
| Loans to depositsAgainst 4Q 2025 | 86% | 89% | Loans declined $71.8M as incumbents priced aggressively. Capacity to deploy is available. |
| Noninterest incomeLinked quarter | $50.3M | -$0.8M | Flat to slightly down. Card and payments activity is a line with room to grow. |
Two facts sit next to each other in the same quarter. The average consumer deposit account holds $15,000 and consumer relationships are 44% of the deposit base, so the retail households are unmistakably present. Yet consumer lending is about 1% of the loan book, and the average loan balance of $317,000 confirms a book shaped almost entirely by commercial credit. Renasant already holds these relationships.
One data layer. Four engines. Three lines that move.
GROW is the discipline of turning enriched transaction data into the three growth lines a bank board actually tracks: deposits, loans and interchange. The four engines are the mechanism. Primacy is the intermediate outcome. The three lines are the result.
The diagnosis decides which line leads. At Renasant funding volume is abundant and rate is largely spent, which puts deposit mix first, with consumer lending and interchange building on the same data layer at no additional integration.
Three lines, and what each one looks like here.
Each leg is anchored to a figure Renasant reported or a statement management made on the record.
What the numbers say. Noninterest-bearing deposits are 23.5% of the total, leaving $16.9B at a 2.54% blended cost. Management has said the repricing lever is largely spent. Meanwhile consumer relationships fell from 48% to 44% of the deposit base over four quarters while public funds rose from 17% to 19%.
What GROW does. It identifies which existing customers have payroll landing at another institution and removes the punch-out that kills switch completion. A captured paycheck creates an operating account, and operating accounts are where noninterest-bearing balances live. This raises the noninterest-bearing share without repricing a single existing account.
What the numbers say. Consumer loans are roughly $103M, about 1% of a $19.0B book, and the average loan balance of $317,000 confirms a commercial-shaped portfolio. On the Q1 call, management attributed the quarter's loan decline partly to very aggressive pricing and terms from incumbent banks. Loans to deposits eased to 86%.
What GROW does. When an existing customer connects an outside auto lender, card or mortgage, that is borrowing intent visible in real time from a household Renasant already banks. Instant Account Verification then removes friction at funding. This is loan growth sourced from existing relationships rather than won on price against a competitor.
What the numbers say. Noninterest income was $50.3M in the quarter, down $0.8 million linked quarter, or roughly 0.74% of assets annualized. With an average consumer deposit account of $15,000 and 44% of the deposit base in consumer relationships, everyday household spending is already flowing through the franchise.
What GROW does. Enriched data identifies which recurring payments currently run as ACH or on a competitor's card, then targets those customers to move the payment onto a Renasant card. It lifts recurring interchange, reduces ACH cost, and every card-on-file relationship is also a primacy signal that reinforces the deposit leg above.
All three legs run off one data layer, but the sequence follows this balance sheet. Deposit mix leads because management has publicly identified rate as close to exhausted, which makes mix the only remaining lever on funding cost and the one with $16.9 billion behind it. Consumer lending follows because it is growth that does not depend on out-pricing an incumbent. Interchange compounds both, since the card relationship and the operating account are the same relationship.
One assumption. One reported rate.
The model deliberately avoids stacked assumptions. It multiplies one number Renasant chooses (how far the noninterest-bearing share moves) by one number Renasant reported (the blended cost of interest-bearing deposits). Nothing else.
Model Inputs
The model counts no consumer lending, no interchange and no reduction in reliance on seasonal public funds. Those are upside, not inputs. It also assumes no repricing of any existing account.
Annual funding cost saved
Noninterest-bearing to 24.5%$5.6M
Noninterest-bearing to 25.5%$11.2M
Noninterest-bearing to 26.5%$16.8M
Every dollar in the ladder is funding cost that simply stops being paid. At three points the figure is roughly 4.8% of annualized net income, earned without repricing an account or winning a single competitive bid.
These are published results at institutions that deployed the capability. They are not an average across all clients, not a commitment, and not a projection for Renasant.
Institutions that faced the same constraint.
Matched on mechanism rather than asset size. The constraint was the same: a large retail base already banked, and no reliable way to see where its paycheck, borrowing and everyday spending were actually going.
Two ways in, and neither requires a core conversion.
Given that Renasant has just completed its largest ever conversion and integration, this point matters more than usual. Which path fits best is a discovery question, not an assumption to make in a brief.
MX delivers its own experience alongside existing channels. The core and current digital banking platform are untouched, with no dependency on a third-party roadmap and nothing that disturbs a recently completed integration.
Capabilities are delivered within the channel customers already use. This path depends on an integration approach agreed between the bank, its digital banking provider and MX, and would be scoped jointly before any commitment.
Let's put 45 minutes on the calendar.
Enough time to replace the one adjustable input in this model with Renasant's own payroll and transaction data, and to hear how you are already approaching it.
Working through Renasant's reports and listening to the Q1 call has been a genuine pleasure. Taking a bank through its largest ever merger and coming out with a 1.33% return on assets and a 52.82% adjusted efficiency ratio is a rare thing to read. I would love to share what we have learned helping banks build noninterest-bearing balances without repricing, and just as much to hear how you are already thinking about it.
Account Executive · MX Technologies · mx.com
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