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 & 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.

Now, I will turn the call over to our President and Chief Executive Officer, Kevin Chapman.

Thank you, Kelly, and good morning. Two years ago, we challenged ourselves by setting aspirational goals to improve our financial performance.

At that time, we targeted the first quarter of 2026 as a key measuring stick that would show the financial benefits of our work. Frankly, the strong results for the first quarter exceed our goals.

Adjusted earnings per share were 93 cents in the first quarter, representing a 41% increase year-over-year. For the quarter, adjusted return on assets grew from 95 basis points in 2025 to 133 basis points in 2026.

Our adjusted return on tangible equity grew from 10.3% to 16.3%. Last of all, the efficiency ratio improved from 65.5% to 55.7%.

I am extremely proud of our team's accomplishments to remain customer centric while we went through our largest merger, conversion, and integration. As we move forward, the Renasant team is engaged and focused on the priorities for our company to continue to grow customer relationships and hiring talented bankers.

I will now turn the call over to Jim to give more details on the financial results.

Thank you, Kevin, and good morning. Looking at the balance sheet, loans were down $71.8 million on a linked-quarter basis or 1.5% annualized.

Deposits were up $626.4 million from the fourth quarter or 11.8% annualized. Reported net interest margin decreased 2 basis points to 3.87%, while adjusted margin decreased 1 basis point to 3.61% on a linked-quarter basis.

Our adjusted total cost of deposits decreased 3 basis points to 1.94%, while our adjusted loan yields decreased 7 basis points to 6.04%. 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 $8.1 million comprised of $4.2 million for funded loans and $3.9 million for unfunded commitments. Net charge-offs were $2.3 million, and the ACL as a percentage of total loans increased 2 basis points quarter-over-quarter to 1.56%.

Turning to the income statement, our adjusted pre-provision net revenue was $118.3 million. Net interest income decreased $3.8 million quarter-over-quarter.

Non-interest income was $50.3 million in the first quarter, a linked-quarter decrease of $0.9 million. The decline in non-interest income is primarily related to the recognition in the fourth quarter of a one-time gain of $2 million resulting from the exit of low-income housing tax credit partnerships.

The absence of this gain in the first quarter was partially offset by strong performance on SBA loan sales. Non-interest expense was $155.3 million for the first quarter.

Excluding merger and conversion expenses of $10.6 million in the fourth quarter, this is a linked-quarter decrease of $4.9 million. I will now turn the call back over to Kevin.

Thank you, Jim. We believe that Renasant is uniquely positioned to capitalize on organic growth opportunities.

We appreciate your interest in Renasant and look forward to further discussing our results with you this morning. I will now turn the call over to the operator for questions.

Hey, good morning, guys. Thanks for taking my questions.

Just wanted to start on expenses. Obviously, a lot of hard work has been done on the first cost savings, and the step-down was maybe a little bit better than I think you guys had talked about last quarter.

Maybe, Kevin, if you can just give us kind of an update on where the merger cost savings stand, I would assume that you've got most of them at this point, but wanted to see if there's anything left. Maybe you can also talk about kind of the reduction in employee headcount that you've had, and if we can kind of assume that there'd be a little bit of growth off of this 155 rate that we saw in the first quarter, just trying to get kind of a near-term outlook.

Thanks.

Michael, it's Jim. I'll start, and I'm sure Kevin will add some color, but we're really pleased with what's happened in that line item.

It's been a focus, as for the company for a number of years, and we started to see the real progress beginning, call it, 18 months ago, even before we started to see the benefits from the merger with The First. We could see it start to bend down, so that's been a focus and remains a focus.

In terms of where we go from here, as you point out, we hit our goals with respect to expense saves from The First, very pleased with that. I don't see a lot of savings associated with the merger from this point on.

I think we've realized most of those expense saves. That's not to say that we can't do more just as a company as a whole, but I think expense saves that are truly related to the merger are pretty much in this run rate.

Looking forward, I guess a couple things. We will have merit increases obviously in the second quarter, and there's a day-count factor as we look to Q2 and beyond.

I think we do have those things which'll cause expenses to drift up moderately. The other variable, and this is probably something Kevin should speak to, is we have seen and are seeing opportunities to hire.

As there's a lot of dislocation going on in the marketplace, and so we've seen that already and expect to see more of it. I would say that's the part of the picture on NIE that'll be a little hard to predict.

Kevin, please add to that.

I will. Thank you, Jim.

Michael, good morning. I'll just add you mentioned about the headcount.

If you go back to June of '24, which we announced the merger with The First in July, but if you look at just our combined FTEs, we were just shy of 3,400 employees. If you just take us plus them, that's what our FTEs were.

At 3/31, that number will be about 2,950. We've carved out 420 employees over that time period.

Not all of them were due to the cost saves of the merger. Prior to that, Renasant was highly focused on accountability and ensuring that we had the right team for where we wanted the goals to be.

I agree with Jim that our cost save number, we've achieved, but the accountability measures and the requirements to be higher performing at Renasant haven't changed. We'll continue to focus on that, find incremental ways to improve costs, to reallocate expenses to higher-performing endeavors.

That effort will not change. That didn't occur because of The First.

That was happening long before that. Jim also mentioned the new hires.

I think one thing that is hidden in the focus on expenses that we've had over the past couple of quarters is the hiring we've been doing. The cost saves and the expenses where they land today, that includes new hires that we've been making all along the past several quarters.

In Q1, we hired 18 revenue producers. In Q4, we hired 6, and in Q3 of last year, we hired 9.

If you look at the real cost saves associated with the merger, associated with accountability measures, it's much deeper than optically what we're showing in the numbers. We're extremely excited about the hiring opportunities we have, the market dislocation.

That is giving us the opportunity to have conversations with extremely talented bankers all throughout the Southeast. I think we've said it in the past.

You grade out your employees, A, B, C, D, and F. I think we've said this, that we will always hire A-rated talent when they're available, and maybe I'll say it a little bit more pointedly.

We won't flinch at the opportunity to hire A-rated talent, and we're seeing that opportunity all around us right now.

That's great color. I'm not trying to pin you down, but just as a starting point, it sounds like with the puts and takes, maybe a couple million bucks higher in the second quarter is what we could expect?

Or is that fair? Just trying to better appreciate kind of a starting run rate with the seasonality aspect.

I would say this, that from Q1, probably a low single-digit percent increase, and that factors in some of the hiring Kevin's talking about. That's the variable that's hard to predict because as Kevin points out, we see opportunities to be opportunistic, and we intend to pursue those.

That's the piece that might be a little tough to forecast. At its base, I would give you that day count and merit is probably, call it, I don't know, low single digits, and then we'll see what comes from the hiring which will add to that.

Perfect. Appreciate that, Jim.

Maybe just as a follow-up. I think the one thing that you point to this quarter is just the loan contraction.

I think you guys did a good job kind of laying that out. It does look like the production was down maybe a little bit more than I think maybe some of us would have expected and down year-over-year as well despite the addition of The First.

Maybe you can just update loan growth expectations from here. I think last quarter you'd kind of talked about mid-single digits for the year.

That could be a little tough just given the starting point. Just any puts and takes, and then maybe what paydowns will look like.

Thanks.

Look, we recognize loan growth was slightly down, but it has not changed our outlook for our growth profile. We think we are squarely a mid-single-digit grower.

Michael, when I listen to conversations, I get feedback from our team, they're active and engaged. If you break down Q1, let's just break it down into the three months of Q1.

January and February, we had good growth. In March, that growth evaporated on us a little bit.

I think two things caused that. One was some macro events.

We saw some of our pipeline and some opportunities get pushed into Q3. At the beginning of the quarter, our pipeline is up 30% from where it was at the beginning of the year.

I think some of it is our pipeline got pushed just with some macro events. The other thing is that we saw some very aggressive pricing and terms on some incumbent banks that were being aggressive to retain customers.

That's the two things that really kind of led to the slight decrease in our loan growth in Q1. We think one of those corrects with that pipeline being pushed into Q2.

Then also, we'll just continue to operate in a very competitive environment and make decisions that's best for Renasant. In some cases, we may try to match terms.

In other cases, we may not. I just in talking with our team, we still have confidence that over the course of a longer period of time, not just one quarter, but over several quarters, we are a mid-single-digit grower.

All right. It sounds like you're reaffirming the outlook for the year.

All right, I'll step back. Thanks, guys.

Thank you.

Thanks. Good morning.

Good morning, Catherine.

Great to see you reaffirm the mid-single-digit growth outlook. The deposit growth was really strong this quarter.

Can you talk about if any of that was seasonal or should pull back and kind of how you're thinking about deposit growth relative to loan growth for the year? Maybe within deposits, what you're seeing on incremental deposit costs as well.

Thanks.

Sure. Catherine, good morning.

This is Jim. The first quarter was a

good quarter.

Good morning. The first quarter was a good quarter in terms of deposit growth, and there was some seasonality to it.

Much of that would be on the public funds side. As we felt some of those tailwinds the latter half of last year in terms of public fund outflows.

That reversed itself in Q1. A meaningful, we'll call it 50% or 60% of the growth that we saw in Q1 came from public funds.

The balance was just core deposit growth. As we look forward, I would say we'll have some seasonality here in April, tax season.

Plus, we'll start to see some of those public inflows moderate as we go throughout the year, and they'll trend downward. Our outlook overall though for the year is that we've got mid-single-digit growth in deposits.

That's the goal, and that's what we're focused on in terms of growing core deposits in that mid-single-digit range. We want to try to have that growth be roughly parallel with the loan growth, and that's still our outlook for the year.

Catherine, I may just add to that that we we recognize, look, public funds are creating some noise. If you kind of look through that and and just tie this back to the market disruption, we we've seen an uptick in the month of April in new account openings on deposits.

It's a it's a marked improvement. I'll just give you one data point that I learned this morning.

Over the last 4 days, we've opened up 340 deposit accounts. Normal trend line in in 20 in 2025 is that we were we're probably opening a couple of hundred accounts per month, and over the last 4 days, we've opened up over over 300.

That I I think that's just an interesting interesting point of data. It will ultimately show up in the numbers.

Again, I think it also speaks to to how our team is responding throughout our markets and and meeting needs of customers who may be uncertain at this moment, providing certainty to them. I I think that's an interesting data point that as we get into Q2 and Q3, we'll see how it plays out with balance sheet growth.

That's great. Thank you.

Then maybe just thinking about average earning asset growth. It looks like the bond book increased this quarter.

Maybe that was to replace some of the slowness of the loan growth this quarter, and that's temporary. Do you expect to continue to grow securities as we move through the year, or do you think the back half of the year is really more geared towards loan growth and the bond book will be a little bit more flat?

That's the outlook we would hope for because, as you point out, we didn't have quite the loan growth that we anticipated. That was some of the reason you saw the growth in the bond book.

I think as we go through the course of the year, our securities portfolio is roughly $4 billion plus or minus, and that's comfortably $1 billion above where we feel comfortable. There's plenty capacity there to fund loan growth, and we would expect and hope that probably that securities portfolio starts to trend downward as we have that loan growth.

Of course, some of that will depend on what we see on the deposit side. You're correct to point out that was a function of a couple things: just the strong deposit growth we had and the lower-than-average loan growth in Q1.

Great. Thank you.

Great quarter, guys.

Thank you, Catherine.

Hey, thanks. Good morning.

Wanted to follow up on the net interest margin discussion. I think last time we talked on the call, we talked about the margin being relatively flattish for the year with the expectation of a few rate cuts.

Would love to hear just updated thoughts on the net interest margin absent any rate cuts and any kind of sensitivity you have if the Fed does cut from here. Thanks.

Good morning, Matt. Our guidance is really unchanged on the margin.

Our current forecast does not have any rate cuts in it. Even though I think, as you point out, I think we had two cuts in our prior call or in the model when we had the fourth quarter call, it really doesn't change that much the outlook for NIM.

I think the outlook from here is stable in that core NIM. If we get a couple of cuts, I don't know that that really influences it very much.

I think it's sort of steady as she goes on core NIM for the balance of '26.

Okay. Appreciate that, Jim.

Then I guess just following up on that, deposit costs look great this quarter, moved that down a little bit more. Any more opportunities on the I guess overall funding side for improvement from what we saw in the first quarter?

I would say not much, Matt. I think we've exhausted much of what we're going to see in terms of repricing opportunities on the deposit side.

We still do have on the left-hand side, we've got loans maturing, I think we've got $1.2 billion or $1.3 billion over the next 12 months or at 5% or 5.1%. That represents some repricing benefit, but we don't see so much on the deposit side.

Great. Thank you, guys.

Thank you, Matt.

Hey, good morning, gentlemen. Kevin, I'm curious.

You talked about the hiring opportunities within the market. Are there any specific niches or segments that maybe you're not in that are enticing you here?

Are these sort of the tried-and-true commercial C&I bankers that you're going to be targeting? Thanks.

Really, not not so much, niches per se. What we are seeing is the opportunity to build out some outside of what you mentioned, kind of your your traditional commercial bankers or or or or bankers in a specific market, what what we are seeing is the ability to to kind of more develop or fully develop and mature some business lines that we already have, whether it's whether it's some of our secured lending, conversations that we're having there, or in the case of a line of business like wealth management.

We're seeing opportunity there, which just gives us We already have some of some some of these throughout our footprint. This is just giving us the ability to get more depth and reach in some of those business lines.

Not necessarily looking to to add a new vertical in a in a lending unit. It's really just being able to to more mature and and put more bench strength within already already lines of businesses or or some of our established secured lending lines.

Again, that's just outside of your traditional C&I or your or your market market-specific banking team. I'd just say that opportunity is is all throughout.

That opportunity for conversations and hiring is all throughout. There There's also just with the dislocation and and and how we how we overlay with the disruption, I think we've shared this in past conversations, but but we we we created a an internal map.

Just overlays our footprint with with the markets that are going through disruption, and and and we overlay nicely with that. To quantify the opportunity, there's over $90 billion in deposits that are currently going through a transformational merger.

Again, not that we're going to pick up, and I'm not saying we're going to pick up $90 billion, but it just shows you the level of disruption that's happening. We also firmly believe there's going to continue to be M&A in the Southeast, and that disruption just gets more loud.

To to be in a position where Renasant is today, to be converted, to be merged, to be integrated, and to be focused on customers and employees, that's a that's a very good place to be right now in a world of disruption. Stability is is a is a is a great place to be in a world of disruption.

I think that's what gives us an opportunity and a little bit of an edge at at the moment. Specifically to your question, we're we're having conversations with people that bring sticky business and sticky revenue and and and that will enhance and complement what we do.

Great. One follow-up.

Saw the buyback, the aggressiveness there. Just curious, holistically, is there sort of any targeted TCE, regulatory capital ratios that sort of govern how aggressive you're going to be?

Thanks.

Thanks, Dave. This is Jim.

I think our outlook there similar to what we talked about in the Q4 call. If we pick CET1 as a ratio to point to, we started the year roughly 11.25%, plus or minus, percent.

I think our desired outcome would be to roughly finish somewhere in that range at year end. Balance sheet growth will play a role in that.

Our expectation is obviously take care of whatever balance sheet growth comes our way and make sure we capitalize that, but then continue to lean into buyback. As you saw, we were active in Q1, and we continued that activity into early Q2.

Our goal is to continue to avail ourselves of buybacks. We were very optimistic about our performance outlook as a company.

We like the opportunity to invest in our stock. Bearing in mind those sort of capital guardrails, our goal is to continue to take advantage of opportunities to buy back our stock.

Great. Appreciate the color.

Thanks, guys. Good morning.

Maybe a little bit following up on that line of questioning, but just wondering how aggressive you would see yourselves being in this macro environment, kind of the level of cautiousness versus what you've described as kind of the opportunity set before you and a mindset of always wanting to hire good talent, A talent, when it's out there. Just kind of how you balance that as you look ahead to the rest of these periods.

One, great question, and I'm going to talk very holistic with you because I think it speaks to our capital plan, right? This is a long-term plan, and if you look at what we've been doing over the last couple of quarters, we've been fully enacting this capital plan.

That plan starts with a strong balance sheet, strong capital ratios, strong allowance for loan loss. We try to think in terms of optionality and being best positioned in a variety of scenarios.

We believe we are well positioned to be opportunistic, to deploy capital for future hiring, and have capital allocated for future growth. If things get bad from a macro level, I think if we start looking at the stability of a balance sheet or the strength of a holding company, the cash on hand at a holding company or in a stress scenario with allowance, we're going to screen out very well in that draconian scenario as well.

We are well positioned to be opportunistic in a good environment or defensive in a bad environment. That's a great place to be in a world of uncertainty where the whole world can change in a matter of minutes with a tweet.

That's really where we feel like we need to be right now. If you look at where we are from a return on tangible common equity or return on tier 1 capital, being at 16% gives us a lot of optionality.

It gives us the ability to pay roughly a 30% dividend payout ratio. It gives us the ability to stockpile capital for future growth, and then it gives us the ability to have some extra capital to either stockpile for future M&A, stockpile for future hires and their growth, or look at the option of buying back in the form of a stock buyback.

I'm giving you a very roundabout answer to say with where we've gotten the profitability of the company, particularly from a return on tier 1 capital, return on tangible common equity, that gives us a lot of optionality to choose which way we want to lean based on how we see hiring, or performance of the stock, or M&A, or just simply be defensive. We feel like we are well positioned to have that option in our control as opposed to being behind as the environment changed, and it could change rapidly.

That's great color, Kevin. I appreciate the idea of the optionality there.

I guess one follow-up for me, and I think you somewhat answered it when you talked about your internal mapping of the dislocation, but as you think about the concentration of new hires, would you say it's been more about where those opportunities just exists currently based on dislocation, or has there been any incremental effort to kind of deepen the newer markets that you entered into from The First? Just kind of wondering where those hires are concentrated, if at all.

They're really hired they're really concentrated in markets in new markets we've entered or markets where we don't necessarily have the market share that we want to have. I'll just take, for example, North Mississippi.

We've done some selective hiring, but what we've what we've mainly done there is is is our teams have been focused on customer acquisition as opposed to talent acquisition just because of the overlap. In other areas or in other markets, it's given us the opportunity to to build bench strength.

Also, there's there's certain parts of our company we can't have enough employees. It always feels like we're a player or two behind in those areas, and this is giving us the opportunity to get a player or two ahead in those areas and just build bench strength and take take pressure off of our current employees.

They do a great job, but just give them some additional support. Stephen, the other thing we're doing is taking the opportunity to pick up back office talent.

Right now, our our back office, we have tremendous talent in our back office. This gives us the ability to build bench strength and also increase our time horizon, extend our runway, and and and have the potential to grow to higher levels than maybe we we currently are contemplating.

By adding that staff today, it'll give us that it'll give us that runway and optionality to become a bigger bank without without immediately meeting a meeting a growing pain as we do that. Just we're being very selective, but I I would say that most of it is in targeted in in either new markets where we want to build out additional a a additional footprint and market share, or very selective places where we're just adding talent to provide more bench strength.

Great. Very helpful.

Congrats on a great start to the year.

Thank you, Stephen.

Good morning. Good

morning, Janet.

You've already touched on it, and I understand that payoff and paydowns, you can never really predict precisely. Is it realistic to assume that your CRE loans are going to just continue decline from here on and a lot of your growth will be coming from C&I?

Or do you have a line of sight into we're at the low point on CRE and things are likely to improve in the second half of 2026?

Janet, good morning. This is David Meredith.

I guess we'll look at it a few different ways. One, I would say CRE is not an area we intend to shrink.

We continue to have a great deal of focus in our commercial real estate business. We've got some great lines of business that continue to pursue just commercial real estate, it's a dedicated effort we have.

I think there's obviously there's a lot of noise in commercial real estate. We've had the expectation for an increased level of payoffs for some time based on interest rates and the aging of some properties.

There's going to be a certain level of rotation or volatility in that commercial real estate space as some of them pay off. We continue to look at new opportunities and continue to be aggressive in that space.

When we look at increase in commitments over the last couple of quarters, we have an increased level of commitment, our construction book. With the level of equity going into construction projects, it may be 6 to 9 months before you start to see fundings, but we are growing our commitment levels in those areas, and we've done this for the past couple of quarters as well.

What we will continue to see is based on the interest rate environment, we'll continue to see just some rotation of loans as they've matured and just the normal course of business for commercial real estate opportunities. They're going to either sell the asset, they're going to go to the private debt market, look for private placement, long-term rates, things that aren't traditionally a bank-type financing vehicle.

We'll continue to see some volatility in that space, but it's definitely an area we're still continued to pursuing as a high level of our growth strategy along with, as you've seen, increased levels of C&I. As you pointed out, we invested in those lines of business, the factoring, the asset-based lending, the corporate C&I efforts, we continue to focus there.

It's a broad base, commercial real estate, C&I. We're not being specific in any one area.

Got it. Thank you for that.

It looks like the second quarter, fee income, there was some strong performance on the SBA loan sales. Where do you see the most upside in terms of fee income opportunities?

Looks like there are some different puts and takes and within the specific line items within fee, but overall, it's been growing pretty nicely. How should we think about the pace of your fee income growth from here?

Good morning, Janet. This is Jim Mabry.

I would say as you mentioned SBA, there are a couple areas that have done really well. Our outlook for the balance of the year would be, I think, as there are some puts and takes, but generally, the first quarter is a pretty good jumping-off point.

I would think there's a chance for some modest improvement there, but I think it's a good run rate to think about. Mortgage had a good quarter in Q1.

It was up a bit from fourth quarter. SBA was good.

We didn't see and this relates to some of the commentary about loan production. We didn't have the capital markets performance that we typically do in Q1.

I think as we start to see that production fall through and become loan growth, would expect the capital markets would exhibit higher levels of fee income. I guess lastly, I would say wealth is an area that's been very steady.

I do think that holds promise as we look forward for solid single-digit, mid-single-digit growth and potentially better down the road. We're putting a lot of effort and energy into that area, and I think with the things that we're doing just internally with legacy Renasant and then some of the things that are going on around us in terms of dislocation, I see that as an area that will do well in coming years.

Janet, I may just add to that just some of the hiring we've done, we've enhanced the wealth management, and you'll start to see that revenue lift as we start to exit Q2 and get into Q3 and Q4. I do want to take the opportunity to talk about mortgage.

Mortgage was an interesting quarter, particularly if you go back to February. February, prior to kind of the macro Middle East conflict events and the subsequent rates rising, the 30-year rate had gotten down to a 5-handle on a conventional mortgage, and our pipeline popped.

It really just kind of spoke to how we've built mortgage with the retooling of the production we've added. As rates cooperate, that pipeline, the revenue, it immediately shows up.

Again, I know we're not in a position where rates are cooperating with mortgage. They'll continue to slug it out, continue to be profitable.

When rates cooperate, you will see almost an immediate impact from mortgage. You kind of see that a little bit in Q1 because of what happened with rates in February.

Again, we wait for the day that we don't have to apologize for mortgage and for being in the mortgage industry, but we continue to be well positioned and invest in that arm of our company and feel like we're really well positioned if rates ever cooperate with us.

Got it. Thank you.

Just a quick follow-up on credit. Trends look fairly well behaved.

Looks like there was a little bit of inflow on the nonaccrual side. Just maybe some color there.

Then, Kevin, maybe holistically, speaking in the past, I know you guys have always taken pride in the reserve to loans, sort of building a rainy day fund there. Do you think the ACL to loans sort of sits in this mid-150s range as you go through the year?

Do you think there's a little bit of a bleed if things improve from a macroeconomic perspective? Thanks.

David, good morning. David Meredith.

On the on the NPL question, we did see a little bit of a of an inflow in Q2, and that number's has increased somewhat over the last couple of quarters, and that, that that increase is kind of been broad base. There's nothing in particular.

If we look at Q2, we had about a $24 million increase. We'll say that was about $69 million of of new NPLs on a $45 million outflow.

We continue to resolve our our NPL loans. The inflow was centered in really a a few larger-dollar transactions, about $7 million in CRE, $19 million in C&I, and then a little bit construction and development.

Really, it was centered in just a a handful of loans that we believe were when we're positioned to work out. Our our composition of our NPL book continues to be somewhat consistent quarter-over-quarter.

There's not any one area that I would say it's concentrated in from an asset type or a or a geography. Our our average NPL size is is small.

I will say we've when we look at our kind of our general asset quality, we see some positives. Our 30- to 89-day numbers continue to be low, we we like within the breadth of our portfolio, we don't see a broader level of of losses.

Also, we'll say our charge-offs in Q4, as you saw, were only 5 basis points. Consistently, it was was in our deck.

We've over the last 12 months, we've resolved a high level of NPLs with minimal charge-offs. We feel comfortable that our underwriting, that we're structuring loans properly as we continue to resolve those problems.

It's something we'll we'll continue to work through. We continue to have processes in place to identify loans early so we can resolve them quickly and mitigate any loss that's out there.

A lot of positive, 30- to 89-day, charge-offs, criticized, classifieds came down, and we'll just continue to work through our NPLs.

Dave, I'll just add on the allowance. Look, I think as we look around, credit quality is stable.

It's stable. One thing that really probably just concerns us, and this goes back to when we built the allowance back to 2020, was just all the volatility and uncertainty that's out there that's putting strain on either consumers or commercial businesses' cash flows.

Don't think that the macro concerns have alleviated yet. Just take what's happened in March with energy costs.

All you have to do is go fill up your car, and you saw a 30% to 40% increase in 30 days of what it costs just to fill up your car. We think that ultimately that's got to catch up with people in some way and their cash flows.

Just continue to keep what we think is an appropriate level of allowance just given the uncertainty. As we have clearer pictures from a macro level, at that point in time, we'll reevaluate the sufficiency of the allowance.

Right now, I just think there's enough macro uncertainty. Even though it may not be showing up quantitatively in our credit quality numbers, there is enough uncertainty out there to keep the level of reserve where it is.

Makes sense. Thank you.

Thank you.

I appreciate that. Thank you.

Thank you to all of those that have joined us this morning. We appreciate your interest in the company and look forward to meeting with you throughout the quarter.

Thank you.