Renasant Corporation Announces Earnings for the Third Quarter of 2023

Published

TUPELO, Miss., Oct. 24, 2023 (GLOBE NEWSWIRE) -- Renasant Corporation (NYSE: RNST) (the “Company”) today announced earnings results for the third quarter of 2023.

(Dollars in thousands, except earnings per share)Three Months Ended Nine Months Ended
 Sep 30, 2023Jun 30, 2023Sep 30, 2022 Sep 30, 2023Sep 30, 2022
Net income and earnings per share:      
Net income$42,332$28,643 $46,567 $117,053 $119,792
After-tax loss on sale of securities  (18,085)   (17,859) 
Basic EPS 0.75 0.51  0.83  2.09  2.14
Diluted EPS 0.75 0.51  0.83  2.08  2.13
Impact to diluted EPS from loss on sale of securities  0.32    0.31  
Adjusted diluted EPS (Non-GAAP)(1) 0.75 0.83  0.79  2.39  2.11
              

“We are pleased with our third quarter results of solid loan growth, good asset quality, an increase in core deposits and expense control,” remarked C. Mitchell Waycaster, Chief Executive Officer of the Company. “The Company’s focus remains on maintaining a strong balance sheet, and we believe we are well-positioned to take advantage of opportunities that may arise.”

Quarterly Highlights

Earnings

  • Net income for the third quarter of 2023 was $42.3 million with diluted EPS of $0.75
  • Net interest income (fully tax equivalent) for the third quarter of 2023 was $130.8 million, down $2.3 million on a linked quarter basis
  • For the third quarter of 2023, net interest margin was 3.38%, down 7 basis points on a linked quarter basis
  • Cost of total deposits was 198 basis points for the third quarter of 2023, up 48 basis points on a linked quarter basis
  • Noninterest income increased $21.0 million on a linked quarter basis. The Company recognized pre-tax losses of $22.4 million on securities sales in the second quarter of 2023 and used the sale proceeds to pay down FHLB borrowings. The Company’s wealth management and insurance lines of business continued to produce solid results during the third quarter of 2023
  • The mortgage division generated $0.5 billion in interest rate lock volume in the third quarter of 2023. Gain on sale margin was 1.55% for the third quarter of 2023, down 11 basis points on a linked quarter basis
  • Noninterest expense decreased $1.5 million on a linked quarter basis. Lower salaries and benefits and professional fees contributed to the decrease

Balance Sheet

  • Loans increased $237.5 million on a linked quarter basis, which represents 7.9% annualized net loan growth
  • The securities portfolio decreased $69.3 million on a linked quarter basis, due to net cash outflows during the quarter of $52.1 million and a negative fair market value adjustment in our available-for-sale portfolio of $17.2 million
  • Deposits at September 30, 2023 increased $61.7 million on a linked quarter basis. Brokered deposits decreased $323 million on a linked quarter basis to $757 million at September 30, 2023. Noninterest bearing deposits decreased $144.8 million on a linked quarter basis and represented 26.4% of total deposits at September 30, 2023

Capital and Liquidity

  • Book value per share and tangible book value per share (non-GAAP)(1) increased 1.1% and 2.2%, respectively, on a linked quarter basis
  • The Company has a $100 million stock repurchase program that is in effect through October 2024; there was no buyback activity during the third quarter of 2023

Credit Quality

  • The Company recorded a provision for credit losses on loans of $5.3 million and a recovery of credit losses on unfunded commitments (included in noninterest expense) of $0.7 million for the third quarter of 2023
  • The ratio of allowance for credit losses on loans to total loans was stable at 1.63% at September 30, 2023
  • The coverage ratio, or the allowance for credit losses on loans to nonperforming loans, was 282.24% at September 30, 2023, compared to 211.85% at June 30, 2023
  • Net loan charge-offs for the third quarter of 2023 were $1.9 million, or 0.06% of average loans on an annualized basis
  • Nonperforming loans to total loans decreased to 0.58% at September 30, 2023 compared to 0.77% at June 30, 2023 and criticized loans (which include classified and special mention loans) to total loans decreased to 2.27% at September 30, 2023, compared to 2.32% at June 30, 2023

(1) This is a non-GAAP financial measure. A reconciliation of all non-GAAP financial measures disclosed in this release from GAAP to non-GAAP is included in the tables at the end of this release. The information below under the heading “Non-GAAP Financial Measures” explains why the Company believes the non-GAAP financial measures in this release provide useful information and describes the other purposes for which the Company uses non-GAAP financial measures.

Income Statement

(Dollars in thousands, except per share data)Three Months Ended Nine Months Ended
 Sep 30, 2023Jun 30, 2023Mar 31, 2023Dec 31, 2022Sep 30, 2022 Sep 30, 2023Sep 30, 2022
Interest income        
Loans held for investment$181,756$173,198$161,787$145,360$123,100 $516,741$325,338
Loans held for sale 3,751 2,990 1,737 1,688 2,075  8,478 7,524
Securities 10,669 14,000 15,091 15,241 14,500  39,760 37,806
Other 10,128 6,978 5,430 2,777 3,458  22,536 6,076
Total interest income 206,304 197,166 184,045 165,066 143,133  587,515 376,744
Interest expense        
Deposits 70,906 51,391 32,866 17,312 7,241  155,163 17,896
Borrowings 7,388 15,559 15,404 9,918 5,574  38,351 15,386
Total interest expense 78,294 66,950 48,270 27,230 12,815  193,514 33,282
Net interest income 128,010 130,216 135,775 137,836 130,318  394,001 343,462
Provision for credit losses 5,315 3,000 7,960 10,488 9,800  16,275 13,300
Net interest income after provision for credit losses 122,695 127,216 127,815 127,348 120,518  377,726 330,162
Noninterest income 38,200 17,226 37,293 33,395 41,186  92,719 115,858
Noninterest expense 107,669 109,165 107,708 101,582 101,574  324,542 293,873
Income before income taxes 53,226 35,277 57,400 59,161 60,130  145,903 152,147
Income taxes 10,894 6,634 11,322 12,885 13,563  28,850 32,355
Net income$42,332$28,643$46,078$46,276$46,567 $117,053$119,792
         
Adjusted net income (non-GAAP)(1)$42,332$46,728$46,078$50,324$44,233 $134,912$118,562
Adjusted pre-provision net revenue (“PPNR”) (non-GAAP)(1)$57,841$59,715$63,860$72,187$66,970 $181,416$163,806
         
Basic earnings per share$0.75$0.51$0.82$0.83$0.83 $2.09$2.14
Diluted earnings per share 0.75 0.51 0.82 0.82 0.83  2.08 2.13
Adjusted diluted earnings per share (non-GAAP)(1) 0.75 0.83 0.82 0.89 0.79  2.39 2.11
Average basic shares outstanding 56,138,618 56,107,881 56,008,741 55,953,104 55,947,214  56,085,556 55,888,226
Average diluted shares outstanding 56,523,887 56,395,653 56,270,219 56,335,446 56,248,720  56,393,957 56,169,886
Cash dividends per common share$0.22$0.22$0.22$0.22$0.22 $0.66$0.66

(1) This is a non-GAAP financial measure. A reconciliation of all non-GAAP financial measures disclosed in this release from GAAP to non-GAAP is included in the tables at the end of this release. The information below under the heading “Non-GAAP Financial Measures” explains why the Company believes the non-GAAP financial measures in this release provide useful information and describes the other purposes for which the Company uses non-GAAP financial measures.

Performance Ratios

 Three Months Ended Nine Months Ended
 Sep 30, 2023Jun 30, 2023Mar 31, 2023Dec 31, 2022Sep 30, 2022 Sep 30, 2023Sep 30, 2022
Return on average assets0.97%0.66%1.09%1.11%1.11% 0.91%0.96%
Adjusted return on average assets (non-GAAP)(1)0.97 1.08 1.09 1.20 1.05  1.05 0.95 
Return on average tangible assets (non-GAAP)(1)1.06 0.73 1.19 1.20 1.20  0.99 1.05 
Adjusted return on average tangible assets (non-GAAP)(1)1.06 1.18 1.19 1.30 1.14  1.14 1.04 
Return on average equity7.53 5.18 8.55 8.58 8.50  7.07 7.28 
Adjusted return on average equity (non-GAAP)(1)7.53 8.45 8.55 9.33 8.07  8.15 7.21 
Return on average tangible equity (non-GAAP)(1)14.11 9.91 16.29 15.98 15.64  13.41 13.32 
Adjusted return on average tangible equity (non-GAAP)(1)14.11 15.94 16.29 17.35 14.87  15.40 13.19 
Efficiency ratio (fully taxable equivalent)63.73 72.63 61.26 58.39 58.50  65.55 63.20 
Adjusted efficiency ratio (non-GAAP)(1)63.36 62.98 61.30 56.25 58.78  62.53 62.47 
Dividend payout ratio29.33 43.14 26.83 26.51 26.51  31.58 30.84 
                

Capital and Balance Sheet Ratios

 As of
 Sep 30, 2023Jun 30, 2023Mar 31, 2023Dec 31, 2022Sep 30, 2022
Shares outstanding 56,140,713  56,132,478  56,073,658  55,953,104  55,953,104 
Market value per share$26.19 $26.13 $30.58 $37.59 $31.28 
Book value per share 39.79  39.35  39.01  38.18  37.39 
Tangible book value per share (non-GAAP)(1) 21.77  21.30  20.92  20.02  20.12 
Shareholders’ equity to assets 13.00% 12.82% 12.52% 12.57% 12.70%
Tangible common equity ratio (non-GAAP)(1) 7.56  7.37  7.13  7.01  7.26 
Leverage ratio 9.49  9.22  9.18  9.36  9.39 
Common equity tier 1 capital ratio 10.47  10.30  10.19  10.21  10.64 
Tier 1 risk-based capital ratio 11.25  11.09  10.98  11.01  11.47 
Total risk-based capital ratio 14.92  14.76  14.68  14.63  15.15 
                

(1) This is a non-GAAP financial measure. A reconciliation of all non-GAAP financial measures disclosed in this release from GAAP to non-GAAP is included in the tables at the end of this release. The information below under the heading “Non-GAAP Financial Measures” explains why the Company believes the non-GAAP financial measures in this release provide useful information and describes the other purposes for which the Company uses non-GAAP financial measures.

Noninterest Income and Noninterest Expense

(Dollars in thousands)Three Months Ended Nine Months Ended
 Sep 30, 2023Jun 30, 2023Mar 31, 2023Dec 31, 2022Sep 30, 2022 Sep 30, 2023Sep 30, 2022
Noninterest income        
Service charges on deposit accounts$9,743 $9,733 $9,120$10,445 $10,216 $28,596 $29,512 
Fees and commissions 4,108  4,987  4,676 4,470  4,148  13,771  12,798 
Insurance commissions 3,264  2,809  2,446 2,501  3,108  8,519  8,253 
Wealth management revenue 5,986  5,338  5,140 5,237  5,467  16,464  17,102 
Mortgage banking income 7,533  9,771  8,517 5,170  12,675  25,821  30,624 
Net losses on sales of securities   (22,438)      (22,438)  
BOLI income 2,469  2,402  3,003 2,487  2,296  7,874  6,780 
Other 5,097  4,624  4,391 3,085  3,276  14,112  10,789 
Total noninterest income$38,200 $17,226 $37,293$33,395 $41,186 $92,719 $115,858 
Noninterest expense        
Salaries and employee benefits$69,458 $70,637 $69,832$67,372 $66,463 $209,927 $194,282 
Data processing 3,907  3,684  3,633 3,521  3,526  11,224  11,379 
Net occupancy and equipment 11,548  11,865  11,405 11,122  11,266  34,818  33,697 
Other real estate owned (120) 51  30 (59) 34  (39) (394)
Professional fees 3,338  4,012  3,467 2,856  3,087  10,817  9,016 
Advertising and public relations 3,474  3,482  4,686 3,631  3,229  11,642  10,694 
Intangible amortization 1,311  1,369  1,426 1,195  1,251  4,106  3,927 
Communications 2,006  2,226  1,980 2,028  1,999  6,212  5,930 
Merger and conversion related expenses      1,100      687 
Restructuring charges            732 
Other 12,747  11,839  11,249 8,816  10,719  35,835  23,923 
Total noninterest expense$107,669 $109,165 $107,708$101,582 $101,574 $324,542 $293,873 
                     

Mortgage Banking Income

(Dollars in thousands)Three Months Ended Nine Months Ended
 Sep 30, 2023Jun 30, 2023Mar 31, 2023Dec 31, 2022Sep 30, 2022 Sep 30, 2023Sep 30, 2022
Gain on sales of loans, net$3,297$4,646$4,770$1,003$5,263 $12,713$14,800
Fees, net 2,376 2,859 1,806 1,849 2,405  7,041 8,522
Mortgage servicing income, net 1,860 2,266 1,941 2,318 5,007  6,067 7,302
Total mortgage banking income$7,533$9,771$8,517$5,170$12,675 $25,821$30,624
                

Balance Sheet

(Dollars in thousands)As of
 Sep 30, 2023Jun 30, 2023Mar 31, 2023Dec 31, 2022Sep 30, 2022
Assets     
Cash and cash equivalents$741,156 $946,899 $847,697 $575,992 $479,500 
Securities held to maturity, at amortized cost 1,245,595  1,273,044  1,300,240  1,324,040  1,353,502 
Securities available for sale, at fair value 909,108  950,930  1,507,907  1,533,942  1,569,242 
Loans held for sale, at fair value 241,613  249,615  159,318  110,105  144,642 
Loans held for investment 12,168,023  11,930,516  11,766,425  11,578,304  11,105,004 
Allowance for credit losses on loans (197,773) (194,391) (195,292) (192,090) (174,356)
Loans, net 11,970,250  11,736,125  11,571,133  11,386,214  10,930,648 
Premises and equipment, net 284,368  285,952  287,006  283,595  284,062 
Other real estate owned 9,258  5,120  4,818  1,763  2,412 
Goodwill and other intangibles 1,011,735  1,013,046  1,014,415  1,015,884  966,461 
Bank-owned life insurance 379,945  377,649  375,572  373,808  371,650 
Mortgage servicing rights 90,241  87,432  85,039  84,448  81,980 
Other assets 298,851  298,530  320,938  298,385  287,000 
Total assets$17,182,120 $17,224,342 $17,474,083 $16,988,176 $16,471,099 
      
Liabilities and Shareholders’ Equity     
Liabilities     
Deposits:     
Noninterest-bearing$3,734,197 $3,878,953 $4,244,877 $4,558,756 $4,827,220 
Interest-bearing 10,422,913  10,216,408  9,667,142  8,928,210  8,604,904 
Total deposits 14,157,110  14,095,361  13,912,019  13,486,966  13,432,124 
Short-term borrowings 107,662  257,305  732,057  712,232  312,818 
Long-term debt 427,399  429,630  431,111  428,133  426,821 
Other liabilities 256,127  233,418  211,596  224,829  207,055 
Total liabilities 14,948,298  15,015,714  15,286,783  14,852,160  14,378,818 
      
Shareholders’ equity:     
Preferred stock          
Common stock 296,483  296,483  296,483  296,483  296,483 
Treasury stock (105,300) (105,589) (107,559) (111,577) (111,577)
Additional paid-in capital 1,304,891  1,301,883  1,299,458  1,302,422  1,299,476 
Retained earnings 937,072  907,312  891,242  857,725  823,951 
Accumulated other comprehensive loss (199,324) (191,461) (192,324) (209,037) (216,052)
Total shareholders’ equity 2,233,822  2,208,628  2,187,300  2,136,016  2,092,281 
Total liabilities and shareholders’ equity$17,182,120 $17,224,342 $17,474,083 $16,988,176 $16,471,099 
                

Net Interest Income and Net Interest Margin

(Dollars in thousands)Three Months Ended
 September 30, 2023June 30, 2023September 30, 2022
 AverageBalanceInterestIncome/ExpenseYield/ RateAverageBalanceInterestIncome/ExpenseYield/ RateAverageBalanceInterestIncome/ExpenseYield/ Rate
Interest-earning assets:         
Loans held for investment$12,030,109$184,1486.08%$11,877,592$175,5495.93%$10,829,137$124,6144.57%
Loans held for sale 227,982 3,7516.58% 192,539 2,9906.21% 143,837 2,0755.77%
Taxable securities 2,053,113 9,2181.80% 2,435,442 12,0891.99% 2,773,924 12,4391.79%
Tax-exempt securities(1) 329,760 1,8072.19% 413,680 2,4292.35% 449,927 2,6642.37%
Total securities 2,382,873 11,0251.85% 2,849,122 14,5182.04% 3,223,851 15,1031.87%
Interest-bearing balances with banks 729,049 10,1285.51% 524,307 6,9785.34% 663,218 3,4582.07%
Total interest-earning assets 15,370,013 209,0525.40% 15,443,560 200,0355.19% 14,860,043 145,2503.89%
Cash and due from banks 180,708   189,668   191,358  
Intangible assets 1,012,460   1,013,811   967,154  
Other assets 672,238   690,885   626,926  
Total assets$17,235,419  $17,337,924  $16,645,481  
Interest-bearing liabilities:         
Interest-bearing demand(2)$6,520,145$41,4642.52%$6,114,067$29,1851.91%$6,462,940$6,0610.37%
Savings deposits 942,619 7930.33% 1,004,096 8130.32% 1,134,665 1550.05%
Brokered deposits 947,970 12,4905.23% 810,087 10,0905.00%  %
Time deposits 2,001,923 16,1593.20% 1,735,093 11,3032.61% 1,240,439 1,0250.33%
Total interest-bearing deposits 10,412,657 70,9062.70% 9,663,343 51,3912.13% 8,838,044 7,2410.33%
Borrowed funds 545,105 7,3885.40% 1,204,968 15,5595.18% 572,376 5,5743.88%
Total interest-bearing liabilities 10,957,762 78,2942.84% 10,868,311 66,9502.47% 9,410,420 12,8150.54%
Noninterest-bearing deposits 3,800,160   4,039,087   4,867,314  
Other liabilities 245,886   212,818   194,339  
Shareholders’ equity 2,231,611   2,217,708   2,173,408  
Total liabilities and shareholders’ equity$17,235,419  $17,337,924  $16,645,481  
Net interest income/ net interest margin $130,7583.38% $133,0853.45% $132,4353.54%
Cost of funding  2.11%  1.80%  0.36%
Cost of total deposits  1.98%  1.50%  0.21%

(1) U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which the Company operates.(2) Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.

Net Interest Income and Net Interest Margin, continued

(Dollars in thousands)Nine Months Ended
 September 30, 2023September 30, 2022
 AverageBalanceInterestIncome/ExpenseYield/ RateAverageBalanceInterestIncome/ExpenseYield/ Rate
Interest-earning assets:      
Loans held for investment$11,866,662$523,6675.90%$10,474,305$329,2274.20%
Loans held for sale 175,100 8,4786.46% 233,266 7,5244.30%
Taxable securities(1) 2,356,962 34,3611.94% 2,653,735 31,5761.59%
Tax-exempt securities 395,394 6,8442.31% 446,762 8,0182.39%
Total securities 2,752,356 41,2052.00% 3,100,497 39,5941.70%
Interest-bearing balances with banks 573,498 22,5365.25% 1,041,145 6,0760.78%
Total interest-earning assets 15,367,616 595,8865.18% 14,849,213 382,4213.44%
Cash and due from banks 189,324   201,436  
Intangible assets 1,012,613   967,023  
Other assets 674,478   640,403  
Total assets$17,244,031  $16,658,075  
Interest-bearing liabilities:      
Interest-bearing demand(2)$6,235,322$90,9471.95%$6,556,454$13,3060.27%
Savings deposits 999,436 2,4320.33% 1,123,433 4410.05%
Brokered deposits 720,022 26,8984.99%  %
Time deposits 1,768,827 34,8862.64% 1,305,800 4,1490.42%
Total interest-bearing deposits 9,723,607 155,1632.13% 8,985,687 17,8960.27%
Borrowed funds 1,007,844 38,3515.08% 534,296 15,3863.84%
Total interest-bearing liabilities 10,731,451 193,5142.41% 9,519,983 33,2820.47%
Noninterest-bearing deposits 4,073,265   4,745,409  
Other liabilities 227,114   192,744  
Shareholders’ equity 2,212,201   2,199,939  
Total liabilities and shareholders’ equity$17,244,031  $16,658,075  
Net interest income/ net interest margin $402,3723.50% $349,1393.14%
Cost of funding  1.75%  0.31%
Cost of total deposits  1.50%  0.17%

(1) U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which the Company operates.(2) Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.

Supplemental Margin Information

(Dollars in thousands)Three Months Ended Nine Months Ended
 Sep 30, 2023Jun 30, 2023Sep 30, 2022 Sep 30, 2023Sep 30, 2022
Earning asset mix:      
Loans held for investment 78.27% 76.91% 72.87%  77.22% 70.54%
Loans held for sale 1.48  1.25  0.97   1.14  1.57 
Securities 15.50  18.45  21.69   17.91  20.88 
Interest-bearing balances with banks 4.75  3.39  4.47   3.73  7.01 
Total 100.00% 100.00% 100.00%  100.00% 100.00%
       
Funding sources mix:      
Noninterest-bearing demand 25.75% 27.09% 34.09%  27.51% 33.27%
Interest-bearing demand 44.18  41.01  45.27   42.12  45.96 
Savings 6.39  6.74  7.95   6.75  7.88 
Brokered deposits 6.42  5.43     4.86   
Time deposits 13.57  11.64  8.69   11.95  9.15 
Borrowed funds 3.69  8.09  4.00   6.81  3.74 
Total 100.00% 100.00% 100.00%  100.00% 100.00%
       
Net interest income collected on problem loans$(820)$364 $78  $(64)$2,788 
Total accretion on purchased loans 1,290  874  1,317   3,049  4,573 
Total impact on net interest income$470 $1,238 $1,395  $2,985 $7,361 
Impact on net interest margin 0.01% 0.03% 0.04%  0.03% 0.07%
Impact on loan yield 0.02% 0.04% 0.05%  0.03% 0.09%
                 

Loan Portfolio

(Dollars in thousands)As of
 Sep 30, 2023Jun 30, 2023Mar 31, 2023Dec 31, 2022Sep 30, 2022
Loan Portfolio:     
Commercial, financial, agricultural$1,819,891$1,729,070$1,740,778$1,673,883$1,513,091
Lease financing 120,724 122,370 121,146 115,013 103,357
Real estate - construction 1,407,364 1,369,019 1,424,352 1,330,337 1,215,056
Real estate - 1-4 family mortgages 3,398,876 3,348,654 3,278,980 3,216,263 3,127,889
Real estate - commercial mortgages 5,313,166 5,252,479 5,085,813 5,118,063 5,016,665
Installment loans to individuals 108,002 108,924 115,356 124,745 128,946
Total loans$12,168,023$11,930,516$11,766,425$11,578,304$11,105,004
           

Credit Quality and Allowance for Credit Losses on Loans

(Dollars in thousands)As of
 Sep 30, 2023Jun 30, 2023Mar 31, 2023Dec 31, 2022Sep 30, 2022
Nonperforming Assets:     
Nonaccruing loans$69,541 $55,439 $56,626 $56,545 $54,278 
Loans 90 days or more past due 532  36,321  18,664  331  1,587 
Total nonperforming loans 70,073  91,760  75,290  56,876  55,865 
Other real estate owned 9,258  5,120  4,818  1,763  2,412 
Total nonperforming assets$79,331 $96,880 $80,108 $58,639 $58,277 
      
Criticized Loans     
Classified loans$186,052 $219,674 $222,701 $200,249 $193,844 
Special Mention loans 89,858  56,616  64,832  86,172  69,883 
Criticized loans(1)$275,910 $276,290 $287,533 $286,421 $263,727 
      
Allowance for credit losses on loans$197,773 $194,391 $195,292 $192,090 $174,356 
Net loan charge-offs$1,933 $3,901 $4,732 $2,566 $1,575 
Annualized net loan charge-offs / average loans 0.06% 0.13% 0.16% 0.09% 0.06%
Nonperforming loans / total loans 0.58  0.77  0.64  0.49  0.50 
Nonperforming assets / total assets 0.46  0.56  0.46  0.35  0.35 
Allowance for credit losses on loans / total loans 1.63  1.63  1.66  1.66  1.57 
Allowance for credit losses on loans / nonperforming loans 282.24  211.85  259.39  337.73  312.10 
Criticized loans / total loans 2.27  2.32  2.44  2.47  2.37 

(1) Criticized loans include loans in risk rating classifications of classified and special mention.

CONFERENCE CALL INFORMATION:A live audio webcast of a conference call with analysts will be available beginning at 10:00 AM Eastern Time (9:00 AM Central Time) on Wednesday, October 25, 2023.

The webcast is accessible through Renasant’s investor relations website at www.renasant.com or https://event.choruscall.com/mediaframe/webcast.html?webcastid=27s2FjbF. To access the conference via telephone, dial 1-877-513-1143 in the United States and request the Renasant Corporation 2023 Third Quarter Earnings Webcast and Conference Call. International participants should dial 1-412-902-4145 to access the conference call.

The webcast will be archived on www.renasant.com after the call and will remain accessible for one year. A replay can be accessed via telephone by dialing 1-877-344-7529 in the United States and entering conference number 9960742 or by dialing 1-412-317-0088 internationally and entering the same conference number. Telephone replay access is available until November 8, 2023.

ABOUT RENASANT CORPORATION:Renasant Corporation is the parent of Renasant Bank, a 119-year-old financial services institution. Renasant has assets of approximately $17.2 billion and operates 194 banking, lending, mortgage, wealth management and insurance offices throughout the Southeast as well as offering factoring and asset-based lending on a nationwide basis.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:

This press release may contain, or incorporate by reference, statements about Renasant Corporation that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “projects,” “anticipates,” “intends,” “estimates,” “plans,” “potential,” “focus,” “possible,” “may increase,” “may fluctuate,” “will likely result,” and similar expressions, or future or conditional verbs such as “will,” “should,” “would” and “could,” are generally forward-looking in nature and not historical facts. Forward-looking statements include information about the Company’s future financial performance, business strategy, projected plans and objectives and are based on the current beliefs and expectations of management. The Company’s management believes these forward-looking statements are reasonable, but they are all inherently subject to significant business, economic and competitive risks and uncertainties, many of which are beyond the Company’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ from those indicated or implied in the forward-looking statements, and such differences may be material. Prospective investors are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties and, accordingly, investors should not place undue reliance on these forward-looking statements, which speak only as of the date they are made.

Important factors currently known to management that could cause our actual results to differ materially from those in forward-looking statements include the following: (i) the Company’s ability to efficiently integrate acquisitions into its operations, retain the customers of these businesses, grow the acquired operations and realize the cost savings expected from an acquisition to the extent and in the timeframe anticipated by management; (ii) the effect of economic conditions and interest rates on a national, regional or international basis; (iii) timing and success of the implementation of changes in operations to achieve enhanced earnings or effect cost savings; (iv) competitive pressures in the consumer finance, commercial finance, insurance, financial services, asset management, retail banking, factoring and mortgage lending and auto lending industries; (v) the financial resources of, and products available from, competitors; (vi) changes in laws and regulations as well as changes in accounting standards; (vii) changes in policy by regulatory agencies; (viii) changes in the securities and foreign exchange markets; (ix) the Company’s potential growth, including its entrance or expansion into new markets, and the need for sufficient capital to support that growth; (x) changes in the quality or composition of the Company’s loan or investment portfolios, including adverse developments in borrower industries or in repayment ability of individual borrowers or issuers of investment securities, or the impact of interest rates on the value of our investment securities portfolio; (xi) an insufficient allowance for credit losses as a result of inaccurate assumptions; (xii) changes in the sources and costs of the capital we use to make loans and otherwise fund our operations, due to deposit outflows, changes in the mix of deposits and the cost and availability of borrowings; (xiii) general economic, market or business conditions, including the impact of inflation; (xiv) changes in demand for loan products and financial services; (xv) concentration of deposit and credit exposure; (xvi) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships; (xvii) increased cybersecurity risk, including potential network breaches, business disruptions or financial losses; (xviii) civil unrest, natural disasters, epidemics (including the re-emergence of the COVID-19 pandemic) and other catastrophic events in the Company’s geographic area; (xix) the impact, extent and timing of technological changes; and (xx) other circumstances, many of which are beyond management’s control.

Management believes that the assumptions underlying the Company’s forward-looking statements are reasonable, but any of the assumptions could prove to be inaccurate. Investors are urged to carefully consider the risks described in the Company’s filings with the Securities and Exchange Commission (the “SEC”) from time to time, including its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, which are available at www.renasant.com and the SEC’s website at www.sec.gov.

The Company undertakes no obligation, and specifically disclaims any obligation, to update or revise forward-looking statements, whether as a result of new information or to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, except as required by federal securities laws.

NON-GAAP FINANCIAL MEASURES:

In addition to results presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”), this press release and the presentation slides furnished to the SEC on the same Form 8-K as this release contain non-GAAP financial measures, including, without limitation, (i) adjusted loan yield, (ii) adjusted net interest income and margin, (iii) pre-provision net revenue (including on an as-adjusted basis), (iv) adjusted net income, (v) adjusted diluted earnings per share, (vi) tangible book value per share, (vii) the tangible common equity ratio, (viii) certain performance ratios (namely, the ratio of pre-provision net revenue to average assets, the adjusted return on average assets and on average equity, and the return on average tangible assets and on average tangible common equity (including each of the foregoing on an as-adjusted basis)), and (ix) the adjusted efficiency ratio.

These non-GAAP financial measures adjust GAAP financial measures to exclude intangible assets and/or certain charges (such as the recovery of the provision for unfunded commitments), with respect to which the Company is unable to accurately predict when these charges will be incurred or, when incurred, the amount thereof. Management uses these non-GAAP financial measures when evaluating capital utilization and adequacy. In addition, the Company believes that these non-GAAP financial measures facilitate the making of period-to-period comparisons and are meaningful indicators of its operating performance, particularly because these measures are widely used by industry analysts for companies with merger and acquisition activities. Also, because intangible assets such as goodwill and the core deposit intangible and charges such as the provision for unfunded commitments (or the recovery thereof) can vary extensively from company to company and, as to intangible assets, are excluded from the calculation of a financial institution’s regulatory capital, the Company believes that the presentation of this non-GAAP financial information allows readers to more easily compare the Company’s results to information provided in other regulatory reports and the results of other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables below under the caption “Non-GAAP Reconciliations”.

None of the non-GAAP financial information that the Company has included in this release or the accompanying presentation slides are intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. Investors should note that, because there are no standardized definitions for the calculations as well as the results, the Company’s calculations may not be comparable to similarly titled measures presented by other companies. Also, there may be limits in the usefulness of these measures to investors. As a result, the Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

Non-GAAP Reconciliations

(Dollars in thousands, except per share data)Three Months Ended Nine Months Ended
 Sep 30, 2023Jun 30, 2023Mar 31, 2023Dec 31, 2022Sep 30, 2022 Sep 30, 2023Sep 30, 2022
Adjusted Pre-Provision Net Revenue (“PPNR”)      
Net income (GAAP)$42,332 $28,643 $46,078 $46,276 $46,567  $117,053 $119,792 
Income taxes 10,894  6,634  11,322  12,885  13,563   28,850  32,355 
Provision for credit losses (including unfunded commitments) 4,615  2,000  6,460  10,671  9,800   13,075  13,200 
Pre-provision net revenue (non-GAAP)$57,841 $37,277 $63,860 $69,832 $69,930  $158,978 $165,347 
Merger and conversion expense       1,100       687 
Gain on sale of MSR         (2,960)    (2,960)
Restructuring charges              732 
Voluntary reimbursement of certain re-presentment NSF fees       1,255        
Losses on security sales   22,438         22,438   
Adjusted pre-provision net revenue (non-GAAP)$57,841 $59,715 $63,860 $72,187 $66,970  $181,416 $163,806 
         
Adjusted Net Income and Adjusted Tangible Net Income      
Net income (GAAP)$42,332 $28,643 $46,078 $46,276 $46,567  $117,053 $119,792 
Amortization of intangibles 1,311  1,369  1,426  1,195  1,251   4,106  3,927 
Tax effect of adjustments noted above(1) (269) (266) (299) (260) (265)  (838) (859)
Tangible net income (non-GAAP)$43,374 $29,746 $47,205 $47,211 $47,553  $120,321 $122,860 
         
Net income (GAAP)$42,332 $28,643 $46,078 $46,276 $46,567  $117,053 $119,792 
Merger and conversion expense       1,100       687 
Gain on sale of MSR         (2,960)    (2,960)
Restructuring charges              732 
Initial provision for acquisitions       2,820        
Voluntary reimbursement of certain re-presentment NSF fees       1,255        
Losses on security sales   22,438         22,438   
Tax effect of adjustments noted above(1)   (4,353)   (1,127) 626   (4,579) 311 
Adjusted net income (non-GAAP)$42,332 $46,728 $46,078 $50,324 $44,233  $134,912 $118,562 
Amortization of intangibles 1,311  1,369  1,426  1,195  1,251   4,106  3,927 
Tax effect of adjustments noted above(1) (269) (266) (299) (260) (265)  (838) (859)
Adjusted tangible net income (non-GAAP)$43,374 $47,831 $47,205 $51,259 $45,219  $138,180 $121,630 
       
Tangible Assets and Tangible Shareholders’ Equity      
Average shareholders’ equity (GAAP)$2,231,611 $2,217,708 $2,186,794 $2,139,095 $2,173,408  $2,212,201 $2,199,939 
Average intangible assets 1,012,460  1,013,811  1,011,557  967,005  967,154   1,012,613  967,023 
Average tangible shareholders’ equity (non-GAAP)$1,219,151 $1,203,897 $1,175,237 $1,172,090 $1,206,254  $1,199,588 $1,232,916 
         
Average assets (GAAP)$17,235,419 $17,337,924 $17,157,898 $16,577,840 $16,645,481  $17,244,031 $16,658,075 
Average intangible assets 1,012,460  1,013,811  1,011,557  967,005  967,154   1,012,613  967,023 
Average tangible assets (non-GAAP)$16,222,959 $16,324,113 $16,146,341 $15,610,835 $15,678,327  $16,231,418 $15,691,052 
         
Shareholders’ equity (GAAP)$2,233,822 $2,208,628 $2,187,300 $2,136,016 $2,092,281  $2,233,822 $2,092,281 
Intangible assets 1,011,735  1,013,046  1,014,415  1,015,884  966,461   1,011,735  966,461 
Tangible shareholders’ equity (non-GAAP)$1,222,087 $1,195,582 $1,172,885 $1,120,132 $1,125,820  $1,222,087 $1,125,820 
         
Total assets (GAAP)$17,182,120 $17,224,342 $17,474,083 $16,988,176 $16,471,099  $17,182,120 $16,471,099 
Intangible assets 1,011,735  1,013,046  1,014,415  1,015,884  966,461   1,011,735  966,461 
Total tangible assets (non-GAAP)$16,170,385 $16,211,296 $16,459,668 $15,972,292 $15,504,638  $16,170,385 $15,504,638 
         
Adjusted Performance Ratios        
Return on average assets (GAAP) 0.97% 0.66% 1.09% 1.11% 1.11%  0.91% 0.96%
Adjusted return on average assets (non-GAAP) 0.97  1.08  1.09  1.20  1.05   1.05  0.95 
Return on average tangible assets (non-GAAP) 1.06  0.73  1.19  1.20  1.20   0.99  1.05 
Pre-provision net revenue to average assets (non-GAAP) 1.33  0.86  1.51  1.67  1.67   1.23  1.33 
Adjusted pre-provision net revenue to average assets (non-GAAP) 1.33  1.38  1.51  1.73  1.60   1.41  1.31 
Adjusted return on average tangible assets (non-GAAP) 1.06  1.18  1.19  1.30  1.14   1.14  1.04 
Return on average equity (GAAP) 7.53  5.18  8.55  8.58  8.50   7.07  7.28 
Adjusted return on average equity (non-GAAP) 7.53  8.45  8.55  9.33  8.07   8.15  7.21 
Return on average tangible equity (non-GAAP) 14.11  9.91  16.29  15.98  15.64   13.41  13.32 
Adjusted return on average tangible equity (non-GAAP) 14.11  15.94  16.29  17.35  14.87   15.40  13.19 
         
Adjusted Diluted Earnings Per Share      
Average diluted shares outstanding 56,523,887  56,395,653  56,270,219  56,335,446  56,248,720   56,393,957  56,169,886 
         
Diluted earnings per share (GAAP)$0.75 $0.51 $0.82 $0.82 $0.83  $2.08 $2.13 
Adjusted diluted earnings per share (non-GAAP)$0.75 $0.83 $0.82 $0.89 $0.79  $2.39 $2.11 
         
Tangible Book Value Per Share        
Shares outstanding 56,140,713  56,132,478  56,073,658  55,953,104  55,953,104   56,140,713  55,953,104 
         
Book value per share (GAAP)$39.79 $39.35 $39.01 $38.18 $37.39  $39.79 $37.39 
Tangible book value per share (non-GAAP)$21.77 $21.30 $20.92 $20.02 $20.12  $21.77 $20.12 
         
Tangible Common Equity Ratio        
Shareholders’ equity to assets (GAAP) 13.00% 12.82% 12.52% 12.57% 12.70%  13.00% 12.70%
Tangible common equity ratio (non-GAAP) 7.56% 7.37% 7.13% 7.01% 7.26%  7.56% 7.26%
         
Adjusted Efficiency Ratio        
Net interest income (FTE) (GAAP)$130,758 $133,085 $138,529 $140,565 $132,435  $402,372 $349,139 
         
Total noninterest income (GAAP)$38,200 $17,226 $37,293 $33,395 $41,186  $92,719 $115,858 
Gain on sale of MSR         2,960     2,960 
Losses on security sales   (22,438)        (22,438)  
Total adjusted noninterest income (non-GAAP)$38,200 $39,664 $37,293 $33,395 $38,226  $115,157 $112,898 
         
Noninterest expense (GAAP)$107,669 $109,165 $107,708 $101,582 $101,574  $324,542 $293,873 
Amortization of intangibles 1,311  1,369  1,426  1,195  1,251   4,106  3,927 
Merger and conversion expense       1,100       687 
Restructuring charges              732 
Voluntary reimbursement of certain re-presentment NSF fees       1,255        
(Recovery of) provision for unfunded commitments (700) (1,000) (1,500) 183     (3,200) (100)
Total adjusted noninterest expense (non-GAAP)$107,058 $108,796 $107,782 $97,849 $100,323  $323,636 $288,627 
         
Efficiency ratio (GAAP) 63.73% 72.63% 61.26% 58.39% 58.50%  65.55% 63.20%
Adjusted efficiency ratio (non-GAAP) 63.36% 62.98% 61.30% 56.25% 58.78%  62.53% 62.47%
         
Adjusted Net Interest Income and Adjusted Net Interest Margin      
Net interest income (FTE) (GAAP)$130,758 $133,085 $138,529 $140,565 $132,435  $402,372 $349,139 
Net interest income collected on problem loans (820) 364  392  161  78   (64) 2,788 
Accretion recognized on purchased loans 1,290  874  885  625  1,317   3,049  4,573 
Adjustments to net interest income$470 $1,238 $1,277 $786 $1,395  $2,985 $7,361 
Adjusted net interest income (FTE) (non-GAAP)$130,288 $131,847 $137,252 $139,779 $131,040  $399,387 $341,778 
         
Net interest margin (GAAP) 3.38% 3.45% 3.66% 3.78% 3.54%  3.50% 3.14%
Adjusted net interest margin (non-GAAP) 3.37% 3.43% 3.63% 3.76% 3.50%  3.47% 3.07%
         
Adjusted Loan Yield        
Loan interest income (FTE) (GAAP)$184,148 $175,549 $163,970 $147,519 $124,614  $523,667 $329,227 
Net interest income collected on problem loans (820) 364  392  161  78   (64) 2,788 
Accretion recognized on purchased loans 1,290  874  885  625  1,317   3,049  4,573 
Adjusted loan interest income (FTE) (non-GAAP)$183,678 $174,311 $162,693 $146,733 $123,219  $520,682 $321,866 
         
Loan yield (GAAP) 6.08% 5.93% 5.68% 5.19% 4.57%  5.90% 4.20%
Adjusted loan yield (non-GAAP) 6.06% 5.89% 5.64% 5.16% 4.52%  5.87% 4.11%

(1) Tax effect is calculated based on the respective periods’ effective tax rate excluding the impact of discrete items.

Contacts:For Media: For Financials:
 John S. Oxford James C. Mabry IV
 Senior Vice President Executive Vice President
 Chief Marketing Officer Chief Financial Officer
 (662) 680-1219 (662) 680-1281

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Source: Renasant Corporation

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