Full Transcript: Trustmark Q1 2026 Earnings Call

Trustmark (NASDAQ:TRMK) held its first-quarter earnings conference call on Wednesday. Below is the complete transcript from the call. Benzinga APIs provide real-time access to earnings call transcripts and financial data. Visit https://www.benzinga.com/apis/ to learn more. View the webcast at https://event.choruscall.com/mediaframe/webcast.html?webcastid=DN6hZZQs Summary Trustmark reported a net income of $56.1 million and a diluted EPS of $0.95, with a return on average assets of 1.2% and a return on average tangible equity of 12.58%. The company experienced growth in loans and deposits, with loans increasing by $203.7 million quarter-over-quarter and deposits growing by $212.7 million in the same period. Trustmark's revenue in the first quarter was $203 million, showing a 4.2% year-over-year increase, while net interest income was $163.5 million, maintaining a net interest margin of 3.81%. Noninterest income grew by 2.7% from the previous quarter, and noninterest expenses remained stable, reflecting effective expense management. The allowance for credit losses was 1.16% of loans held for investment, with net charge-offs at $1.3 million. The company repurchased 19.8 million shares, with a program in place to buy back up to $100 million in 2026, depending on market conditions. Future guidance includes single-digit growth in loans and deposits for 2026, with a stable net interest margin expected to range between 3.80% to 3.85%. Management emphasized continued investment in production talent and technology to support long-term growth, while maintaining stable credit quality and a strong capital position. Trustmark is open to M&A opportunities but remains focused on organic growth strategies and market expansion. Full Transcript OPERATOR Good morning ladies and gentlemen and welcome to Trustmark's first quarter earnings conference call. At this time all participants are in a listen only mode. Following the presentation this morning, there will be a question and answer session. To ask a question you may press Star then one on a touch tone phone. To withdraw your question please press Star then two. As a reminder, this call is being recorded. It is now my pleasure to introduce Mr. Joey Rain, Director of Corporate Strategy at Trustmark. Please go ahead. Joey Rain (Director of Corporate Strategy) Good morning. I'd like to remind everyone that our first quarter earnings release and the presentation that will be discussed on our call this morning are available on the Investor Relations section of our website@trustmark.com during our call, management may make forward looking statements within the meaning of the Private Securities Litigation Reform act of 1995 and we would like to caution you that these forward looking statements may differ materially from actual results due to a number of risks and uncertainties which are outlined in our earnings release and our other filings with the Securities and Exchange Commission. At this time I'd like to introduce Duane Dewey, President and CEO of Trustmark. Duane Dewey Thank you Joey and good morning everyone. Thank you for joining us this morning. With me are Tom Owens, our Chief Financial Officer and Barry Harvey, our Chief Credit and Operations Officer. We continue to build upon a strong momentum from our earnings in 2025 and are pleased with our strong performance in the first quarter of 2026. Our results reflect continued loan growth, stable credit quality and an attractive core deposit base. In addition, we experienced continued growth in non-interest income while non-interest expense remained unchanged reflecting our continued focus on expense management. In our presentation this morning, I will provide a summary of our performance and discuss forward guidance before moving to your questions. Now Turning to Slide 3, financial highlights. Our first quarter results reflect continued significant progress across the organization. Net income totaled $56.1 million, representing diluted EPS of $0.95 a share. This level of earnings resulted in a return on average assets of 1.2% and a return on average tangible equity of 12.58%. From the balance sheet perspective, loans held for investment increased $203.7 million or 1.5% linked quarter and $636.5 million or 4.8%. Year over year. Our loan portfolio remains well diversified by loan type and geography. Our Deposit base expanded $212.7 million or 1.4% linked quarter driven by seasonal increases in public deposits. Year over year. Deposits increased $631.8 million or 4.2%, driven by growth in personal and commercial deposits. The cost of our total deposits in the first quarter was 1.63%, a decrease of 9 basis points from the prior quarter. Our strong cost effective core deposit basis is a continuing strength of Trustmark's. During the first quarter we repurchased 19.8 million, or approximately 477,000 shares of stock, which represent 0.8% of shares outstanding at year end 2025. As previously announced, we have authorization to repurchase up to $100 million of Trustmark common shares during 2026, this program continues to be subject to market conditions and management discretion. Revenue in the first quarter totaled 203 million, a seasonal decrease of 0.6% from the prior quarter and an increase of 4.2% from the same quarter in the prior year. Net interest income, fully tax equivalent in the first quarter totaled $163.5 million, which produced a net interest margin of 3.81%, which is unchanged from the prior quarter. Non interest income in the first quarter totaled $42.3 million, up 2.7% from the prior quarter and represents 20.9% of total revenue. Non interest expense in the first quarter totaled $132.2 million, unchanged from the prior quarter and up 8.1 million. Year over year, diligent expense management continues to be a focus for the organization. From a credit perspective, net charge offs in the first quarter were $1.3 million, representing 4 basis points of average loans in the first quarter. The net provision for credit losses in the first quarter totaled 2.7 million. At the end of the first quarter, the allowance for credit losses represented 1.16% of loans held for investment. Again, very solid credit performance. We have maintained our strong capital position as reflected by our CET1 ratio of 11.7% and our total risk based capital ratio of 14.37%. At March 31, 2026, the board declared a regular quarterly dividend of $0.25 per share payable June 15th of 2026 to shareholders of record on June 1st. Now let's focus on our forwarding guidance which is on page 15 of the deck. In January, we provided full year guidance for 2026 as well as 2025 benchmarks upon which the guidance is based. this morning we are affirming the guidance previously provided. We expect loans held for investment to increase single digits for the full year 2026 and deposits, excluding broker deposits, to increase mid single digits as well. Security balances are expected to remain stable as we continue to reinvest cash flow. We anticipate the net interest margin to be in the range of 380 to 385 for the full year. While we expect net interest income to increase mid single digits from a credit perspective, the total provision for credit losses, including off balance sheet credit exposure is expected to normalize, while non interest income for the full year 2026 is expected to increase mid single digits as is non interest expense. We will continue our disciplined approach to capital deployment with a preference for organic loan growth potential, market expansion, M&A or other general corporate purposes depending on market conditions. At this time, that will open the floor up for questions. OPERATOR We will now begin the question and answer session. To ask a question, you may press Star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press Star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Kathryn Mehler with kbw. Please go ahead. Duane Dewey Thanks. Good morning. Hey, good morning, Kathryn. Kathryn Mehler (Equity Analyst) It was nice to see the guidance was generally unchanged. And just thinking about the margin, we're taking rate cuts out of our estimates generally across the board. It feels like your Net Interest Margin guide is still for that to remain pretty steady in this 380 to 385 range. Can you just talk about some puts and takes within the margin without rate cuts? Maybe where you're seeing new loan yields and where you're seeing new deposit costs coming in. Just help us model that going forward. Thank you. Tom Owens (Chief Financial Officer) Well, good morning, Kathryn. This is Tom Owens. Hey Tom, good morning. So, yes, we as you know, base our guidance on market implied forwards, which now effectively have removed any further Fed rate cutss this year. And so I think the most simple way to think about it to start is you look at our guidance on deposit costs. We're anticipating a few basis points of decline here in the second quarter on a linked quarter basis. We're also anticipating a similar magnitude of decline in loan yields. And then in the background you've got securities yields which will continue to grind a little bit higher from the ongoing repricing of Held-to-Maturity (HTM) Securities. And so, you know, I think when you net that all out, you're probably looking at a basis point or so of accretion on a linked quarter basis. Each quarter this year is what we're currently modeling. We're at 381 in the first quarter. And so that gets you to the middle of the range, 383 or so as far as puts and takes. I mean it's, you know, when you look at the industry data, loan growth continues to outpace deposit growth. And so it is, it's really remained a competitive environment for deposits. When you look at what will be driving most of the linked quarter decline in deposit costs, we do have a bit more benefit. We'll get there from CD repricing. But then in the background you've got sort of a countervailing, you know, migration for exception pricing on money market accounts, for example. So I think when you add all that up, we're talking fractions of a basis point probably in terms of, you know, which way we break on deposit cost, which way we break on loan yield, which way we break on net interest margin. Kathryn Mehler (Equity Analyst) Great. I mean it's just a bigger picture question. You had really great improvement in profitability throughout 2025. It feels like looking at your guidance for maybe more steady in 2026, but just on a bigger balance sheet as growth is improving. Is that the way to think about are there levers that you see where we can actually get the Return on Assets (ROA) and Return on Equity (ROE) moving higher this year? Tom Owens (Chief Financial Officer) Well, when you think about pre-provision net. This is Tom continuing on here. When you think about pre provision net revenue as we've guided in the past, mid single digit balance sheet growth with a stable to slightly expanding net interest margin should get a solid mid single digit Pre-Provision Net Revenue (PPNR) growth. I know when you look at the headline in terms of what we published first quarter of 2026 actual versus first quarter 25 actual for example Pre-Provision Net Revenue (PPNR) looks pretty flat. But you know, there's always puts and takes, you know, in things like non interest income. I'll tell you that if you adjust for some lumpy items we had in the year ago quarter and lumpy items this quarter, you end up closer than closer to 3% growth year over year than down slightly. And when you include that wind up at more like a 5% growth in revenue. I'd say the same thing on the expense side. We're probably doing better on the expense side than what you see looking at the numbers. You know, we've made strategic investments in revenue producers, particularly in gross markets. I think if you adjust it out for that, you probably in the feed more in the neighborhood of 5.5% in terms of expense growth year over year, first quarter. So that gets you closer to neutral in terms of operating leverage. Of course we're trying to drive positive operating leverage and that's part of those investments that we're making in revenue producers, particularly in our growth market. So I think that's the lever ultimately that can drive greater profitability. Thank you, Kathryn. I'm sorry, Just quickly one other somewhat of a wild card in that mix is the mortgage business. You know the where where we've had pretty negative net hedge ineffectiveness, over an extended period of time here as the market adjusts, as rates adjust, et cetera. Is that that is a wild card in the mix? We can't forecast it necessarily, it's difficult to pinpoint. But you know, if the mortgage business turns around and or the negative hedge in effectiveness is different than it has been in the past, that can make a fairly significant swing in non interest income which then as you know, affects your question. So I just add that as a wildcard in the mix a bit. Kathryn Mehler (Equity Analyst) Great. Yep. Thank you for that reminder and congrats on your new role, Tom. We'll miss Net Interest Margin (NIM) guidance from you going forward. Tom Owens (Chief Financial Officer) Thank you Kathryn. Really greatly appreciate that. Really excited about this next phase. OPERATOR The next question comes from Fetty Strickland with Havod Group. Please go ahead. Fetty Strickland Hey, good morning. Just wanted to stick with the non interest income discussion specifically in the wealth side. I know equity markets were a little bit more of a challenge through quarter end, but can you provide any sort of update on what you're seeing so far just in terms of Assets Under Management (AUM) and maybe an outlook for that line in the second quarter? Tom Owens (Chief Financial Officer) I'll kick in there. Fetty, good morning. It is dependent upon market appreciation and so on, which dramatically affects revenue in both the true wealth trust business as well as the brokerage side. So those are factors that are somewhat out of our control. But then you also add in new business development and the like, which is actually fairly solid. We as we talk about our growth market initiatives that we've mentioned here in the last several calls, that includes the wealth management business, which includes adding new production talent in high growth potential markets. We're optimistic there. We've seen improved production out of that side of the equation. The second part I'd add is that we made a platform change last year in our brokerage business. We went from an LPL Financial platform to a Raymond James Financial platform. We in the Latter Half of 2025 spent a lot of time focused on that transition and are now fully stabilized there and have fairly solid expectations for improved performance out of our brokerage division. And a good chunk of that is managed assets. So that is a bit dependent on the market as well. But still we are expecting continued Progress and stabilization on that side of the equation. So we're comfortable with the mid single digits guide, but see some potential there. Fetty Strickland Appreciate that that's helpful in just switching gears to capital, I guess specifically in the share repurchase side. I think last quarter you talked about maybe looking at 60, 70 million worth of repurchases this year. We've done, I think about 20 million so far. Should we expect any sort of change in the cadence of repurchases throughout the next couple of quarters? Tom Owens (Chief Financial Officer) So, Fannie, this is Tom Owens. So yeah, we were really pleased with our ability to deploy nearly twenty million via share repurchase in the first quarter while supporting over $twenty0 million of loans held for investment growth, while maintaining our capital ratios. Essentially very little change in our capital ratios on a linked quarter basis. I would say that, you know, we kind of leaned into it, so to speak, in the first quarter, given the opportunity. The downdraft in bank stock prices. We liked the price. We feel good about that. You know, I think it also demonstrates our ability to deploy that amount of capital via share repurchase and support robust loan growth. So I think if you think in terms of twenty million per quarter or 80 million for the year, that's probably the high end. Assuming that we do continue to generate the same level of consistent loan growth and on the low end, I'd probably mark that up a little bit. I think we're probably thinking 70 to 80 million dollars deployment for the full year. Fetty Strickland All right, great. Thanks so much. I'll step back. Tom Owens (Chief Financial Officer) Thank you. OPERATOR The next question is from Michael Rose with Raymond James. Please go ahead. Michael Rose Hey, good morning guys. Thanks for taking my questions. Just wanted to start on loan growth. Looks like you guys had a really good quarter of Commercial and Industrial (C&I) loan growth. Obviously some pay downs and some other places. If I annualize this quarter, it's about 6%. That'd be the kind of the top end of the mid single digit range. So I guess what I'm trying to figure out is the effects of competition and, or pay downs expected to maybe potentially slow the growth from here. I'm just trying to understand maybe why, you know, in a seasonally slower, you know, first quarter, you know, why we wouldn't see that, that guide raised. And if we could just, you know, get a sense from you guys for, you know, production and pay downs as we move forward. Thanks. Barry Harvey (Chief Credit and Operations Officer) And Michael,, this is Barry. Yeah, you know, as you can tell, we did have nice growth, especially in the CNI side. And it was, it was very diversified in terms of the different growth Industries that we saw, as well as the fact that on the Commercial Real Estate (CRE) side we were up 41 million. You know, really to the heart of your question, you know, we did have a meaningful amount of maturities on our Commercial Real Estate (CRE) book scheduled for the first quarter. A large majority of those did not occur and they migrated either later in the 202026 or out to 2027, 2028. So we do, we do still have headwinds that we're going to have to deal with over time. But that's the key for us is to the more spread out that we can see those payoffs coming, the better we're able to deal with them in terms of new production, new fundings, et cetera, throughout the year. So I think with we're fully expecting, without any type of catalyst that would bring about a large increase in payoffs, that what we saw in the first quarter will continue throughout the year. And you'll continue to see projects who need more time to fully stabilize to get the best price when they go to market to sell the project, take that time. And then what you always see, Michael,, is a lot of projects on the Commercial Real Estate (CRE) side start off out of the gate with delays during the permitting, construction, the hit rock, whatever the case may be. And so there is a need for some additional time beyond just the scheduled maturity, at least the initial scheduled maturity, for them to fully stabilize. And we're seeing that today. So we're hopeful that the payoffs which will eventually come from our CNI book, Commercial Real Estate (CRE) book, will be a little bit spread out as they were during the first quarter and push on into other quarters, whether it be 20202026 or into 2027, 2028. Tom Owens (Chief Financial Officer) Michael, meanwhile, as you noted and Barry noted, CNI production pipelines are strong. We continue to see opportunities across the full portfolio. CNI has been good. And then as we talked in the last couple quarters, we continue to be focused on adding new production talent across the franchise. It's a little bit slower in the first quarter in terms of new talent, but we continue to focus in that area in high growth markets. And so we're as Barry suggested, with good, solid pipelines, good solid new production, continued production on the CRE space to offset some of these, some of the headwind from pay downs is what we're focused on achieving. Michael Rose Okay, that's great color, very helpful. Thanks for that. Maybe if I can just ask separately on credit. You did have a little bit of tick up in Non-Performing Loans (NPLs). I think it was related to one loan. Just looking to get some color there. Looks like the reserve came down though a little bit. So just was looking for any sort of updates and kind of past dues or criticized classifieds that might have driven that allowance reduction. Thanks. Barry Harvey (Chief Credit and Operations Officer) Yeah, our coverage moved up from 115 to 116 as far as the reserve is concerned. And we, the net provision of course, as you know, is 2.74 million. And then on the funded side we were, you know, 4.7. So we as it relates specifically to the one credit, it's a Commercial Real Estate (CRE) project and it's the majority of the increase that we experienced in non accruals and of the change that we saw, the 12.3 million, you know, the credit itself was, it was substandard already. It just moved into non accrual. The situation is one of those where the borrower just does not see a value from their perspective to continue to make payments based on the appraisal. There's a lot of equity in the project. We do have it impaired and reserved appropriately based upon that analysis of the valuation. So in that particular case there is an Letter of Intent (LOI) in place. They have an Letter of Intent (LOI) in place has not been converted to a Purchase and Sale Agreement (PSA) at this point. So there's always a chance that they're able to move the project out and we'll continue to work with the customer to determine what the best options are for the bank and for them. But you know, it was not something that was surprising to us just given their set of circumstances, but it was very specific to their set of circumstances along the lines of cre. Michael, while they didn't come to fruition during the first quarter, we are very encouraged by the fact that a lot of the potential paydowns that we anticipated may be happening in the first quarter on some substandard credits. We're encouraged that they will possibly come to fruition later in the year. So from that standpoint we see more positive news from the standpoint of more either upgrades or payoffs coming out of the Commercial Real Estate (CRE) book than we do deterioration. Michael Rose Thanks for that, Barry. And then maybe if I can just flip in one more. Just following up on Fetty's question on capital return. I know last quarter you guys talked about, you know, kind of organic growth and buybacks as being kind of the preferred avenue for deployment. But any sort of updated or change change thoughts on on m and a versus the prior 90 days? Thanks. Tom Owens (Chief Financial Officer) No, no changes, Michael, really, we're, I mean we're still interested. Interested. It's part of our strategic plan to consider M&A for Expansion purposes in key markets. I would say start of the year, very active, lots of discussions up, down and sideways. That said, I think with the war and related economic issues, et cetera, high gas prices, et cetera, it seems like a lot of the, there's been a lot of just tempering of those discussions pending the outcome or pending some stabilization of things. And so we continue to focus on the organic strategy and continue to build relations out there and would be very interested in that process. As I said, it's part of our strategic plan, but no real change in that thought process. Michael Rose All right, thanks for taking my questions, guys. OPERATOR The next question is from Gary Tenner with DA Davidson. Please go ahead. Gary Tenner Thanks. Good morning. I had a follow up on Katherine's Net Interest Margin (NIM) question. Tom, your comments about expecting loan yields to continue to drift a little bit lower here, a little bit surprising to me. So I'm just curious what the driver of that is. Do you have some higher yielding loans maturing? And you know, and I'm also curious kind of what the new production yields look like in the first quarter. Barry Harvey (Chief Credit and Operations Officer) And I'll start this is Barry and then let Tom weigh in. Just from the standpoint of what we see every day and it's more specific to the, to the Commercial Real Estate (CRE) side than it is to see our side. But we are seeing those are all going to be for us, those are all going to be 30 day sulfur plus a spread. And we do see a little lower spread today than we have at some points in the past as it relates to the Commercial Real Estate (CRE) projects, regardless of which type you're talking about. It is of course, Chris, very competitive in terms of that marketplace. So when you think about stuff rolling off for us, that was 48 to 60 months ago. Those spreads to that 30 day Secured Overnight Financing Rate (SOFR) were better then than they are today of what's going on in funding in the near term. So and then a lot of times, Chris, in order to, you know, when we do have payoffs scheduled on the Commercial Real Estate (CRE) side like everyone does, we do pursue those opportunities to refinance existing debt that we think it makes sense and fits our parameters. And when you do refinance existing debt to replace outstanding balances with outstanding balances, those are going to be a little priced a little less than your construction mini firm was that you made four or five years ago where you had construction risk, you had stabilization risk, you're replacing that with something that doesn't have construction risk, doesn't have stabilization risk when it's fully funded. And for that reason it's priced accordingly. So you may be replacing something that was construction mini perm risk embedded in it. Your spread is a little bit higher on those deals than the ones you might replace it with. If you're able to refinance a deal, a fully funded deal away from somebody else that's fully stabilized, if that makes sense. Tom Owens (Chief Financial Officer) And Gary,, I would add it just again it depends on the mix of you know, the lumpiness or not of maturities within a quarter and then the mix of the maturities floating rate versus fixed rate. Of course you still have a bit of a tailwind on the fixed rate loan side of those repricing higher. So it's very much mix dependent. And as I said in my comments earlier, you know, we're getting down to, you know, dust settling here, so to speak in terms of the aftermath of last Fed rate cut. You know, you look at some, I'll call it normalization or steepening of the yield curve is certainly helpful where we're trading now in terms of where you know, fixed rate loans coming on the books versus fixed rate loans paying off. So you know, there's a lot at play there. But we're not talking about, you know, big, big, you know, very substantial linked quarter changes in loan yields or deposit cost. And as I said, a simple way to think about it is once we get past this quarter, relative stability here over the remainder of the year with a very gradual grind higher in terms of Nim Gary Tenner yeah, appreciate that, that's great, great caller from both of you. And then just you mentioned a couple of times, you know, kind of leaning into hiring in the growth markets and of course this is not the first time you mentioned it, but I'm just curious if you could kind of put some numbers around what you accomplished there in the first quarter and any kind of targets or expectations for the rest of the year. Tom Owens (Chief Financial Officer) I can put it in context of new bodies added. I don't know if we can break it down that specifically in terms of production at this point, but I think we messaged to the street in the third quarter it was in the 21 new production talent across our franchise. Fourth quarter was more like 13ish new hires and in the first quarter of 2026 it was in the range of 7 new hires. So the first quarter is a tough higher quarter because bonuses are paid and so on. So we will be refocusing our efforts in that the rest of the year. But I don't believe we can really break it down. I mean they're all still getting their feet in the ground and building their pipelines and so on. Like I was saying earlier, we are seeing a very solid build of pipeline here into the year. So are seeing some positive shoots from those efforts. Thank you. Yeah, you net that all out, Gary. And you know, it's not meaningfully impactful here for the full year in 2026 in terms of dropping to the bottom line. But the intent obviously is to be making the investment to bring the producers on board here in 2026 and then the return on that ramping up in future years. Yeah, thanks again. Christopher Marinak If you have a question, you may press Star then one. The next question comes from Christopher Marinak with Breen Capital Research. Please go ahead. Hey, good morning. Thanks for hosting us, Tom. I wanted to follow up on kind of net new deposit accounts, particularly in the commercial channel as we see success with cni. Should we see more deposit flows from that area over time? Tom Owens (Chief Financial Officer) Yes, Chris. So I do not have those numbers in front of me, but yes, we would certainly anticipate accelerated growth in commercial deposit accounts and thereby accelerated growth in commercial production or balance. I think I have a report here that I could look at pretty quickly. I mean, we have seen, Chris, acceleration, if you think in terms of year over year growth in average balances, we have seen really good acceleration in commercial deposit balances. If we were having this exact conversation one year ago, it would have looked something like a 1 to 1.5% decline in year over year. First quarter commercial balances over time that has steadily migrated more positive. Three quarters ago that was closer to break even. Two quarters ago it was plus 2%. And now in the fourth quarter and into the first quarter here we're on the high side of the so we've had steady acceleration of growth in commercial average commercial deposit balances outstanding on a year over year basis. And it's absolutely our focus to continue that trend going forward. Christopher Marinak Great. Thank you for sharing that. And then just a quick question on expense, operating leverage in general, should we see further progress into next year? Just kind of curious how we translate this recent efforts into the future quarters. Tom Owens (Chief Financial Officer) Yeah, you know, our mindset coming into this year was particularly considering two things. Considering the investments we're making in revenue producers and the investments we're making in technology, our mindset coming in was if we could have a break in even year in terms of operating leverage, that would be doing a pretty darn good job. So both of those things coming in are clearly headwinds to us achieving positive operating leverage here in 2026. But again, the idea on Both of those, whether it's investment in producers or investment in technology, is to generate returns on those investments and drive operating positive operating leverage going forward. Christopher Marinak Great. Thank you again. OPERATOR Thank you. The next question is from Steven Scouten with Piper Sandler. Please go ahead. Steven Scouten Yeah, thanks everyone. Most of my questions have been asked and answered. I just maybe had one follow up around deposit costs. The quarter over quarter improvement that you're projecting in the slide deck, is that more indicative of incremental reductions, you think from the CD repricings, or was that more about kind of where you exited the quarter and the progression of deposit costs throughout the quarter? So Stephen, this is Tom, good question. As I said, I believe earlier, you know, the majority of the benefits, the tailwind denim accretion from the ongoing CD book repricing is now diminishing. And so that 160 guide that you see for the second quarter, that's basically where we are running currently. In fact, I think month to date here in April, we're probably running at about159. We've had some favorable mix here in April we're probably running at 159. So the 160 reflects a couple of things. As I also mentioned earlier, you've got some ongoing repricing of exception money market accounts as we accommodate customers where warranted by the nature of the relationship and the profitability of the relationship, accommodating their request for higher rates. And then it's been our practice as Tom Owens (Chief Financial Officer) we get further into the second quarter and into into the summer months, we generally engage in promotional deposit campaign activity which would put some upward pressure on deposit cost which sort of counterbalances what's left there in terms of ongoing downward CD repricing. So again, that's why, you know, from my perspective, I think the right way to think about it is as we're coming into the second quarter, a bit lower loan yields, a bit lower deposit cost and essentially relative stability from that point forward and a slow gradual grind higher in net interest margin. And again, you know, with the dust settling, we're talking a basis point or two. We're talking about, you know, fractions of a basis point of which way they round, you know, does do deposit cost and loan yield both round in a favorable way or unfavorable way. So I think we're getting down to, you know, more relative stability in that regard. We came into the year with a very tight guidance range in terms of net interest margin 380 to 385 and we're maintaining that range we continue to feel good about being for the full year somewhere right in the middle of that rank. Got it. Steven Scouten That's extremely helpful. Color Tom. Appreciate all the time, guys. Congrats. Tom Owens (Chief Financial Officer) Thank you. OPERATOR Next we have a follow up question from Fetty Strickland with Vodi Group. Please go ahead. Fetty Strickland Hey, just real quick, I had a quick follow up on the M and a comment I think you said up, down, sideways. Was that just a figure of speech or should I take that you consider like an MOE type transaction or even an upstream partner? Tom Owens (Chief Financial Officer) I'm not going to commit one way or the other there, Fetty. I mean, you know, it's, there are, they're all, as you've seen in the marketplace, there are all sorts of combinations happening in, you know, from larger banks to smaller banks. And so it's pretty wide open field. That's not our focus, but you know, it is. The discussions out there are pretty significant across the board. Fetty Strickland All right, great. Thanks for taking my follow up. Duane Dewey This concludes our question and answer session. I would like to turn the conference back over to Dwayne Dewey for any closing remarks. OPERATOR Thank you again for joining us this morning. We look forward to catching back up at the end of the second quarter and we'll talk then. Thank you. Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.