Renasant Corporation Announces Earnings For the Second Quarter of 2024

TUPELO, Miss., July 23, 2024 (GLOBE NEWSWIRE) — Renasant Corporation (NYSE: RNST) (the “Company”) today announced earnings results for the second quarter of 2024.

(Dollars in thousands, except earnings per share) Three Months Ended   Six Months Ended
  Jun 30, 2024 Mar 31, 2024 Jun 30, 2023   Jun 30, 2024 Jun 30, 2023
Net income and earnings per share:                              
Net income $ 38,846   $ 39,409   $ 28,643     $ 78,255   $ 74,721  
After-tax loss on sale of securities           (18,085 )         (17,870 )
Basic EPS   0.69     0.70     0.51       1.39     1.33  
Diluted EPS   0.69     0.70     0.51       1.38     1.33  
Adjusted diluted EPS (Non-GAAP)(1)   0.69     0.65     0.83       1.33     1.64  
Impact to diluted EPS from after-tax loss on sale of securities (including impairments)           0.32           0.31  
                                 

“The financial results for the quarter reflect good performance and improved balance sheet strength,” remarked C. Mitchell Waycaster, Chief Executive Officer of the Company. “As we build capital, it enhances our ability to grow the company and build upon these results.”

Quarterly Highlights

Earnings

  • Net income for the second quarter of 2024 was $38.8 million; diluted EPS and adjusted diluted EPS (non-GAAP)(1) were each $0.69
  • Net interest income (fully tax equivalent) for the second quarter of 2024 was $127.6 million, up $1.7 million on a linked quarter basis
  • For the second quarter of 2024, net interest margin was 3.31%, up 1 basis point on a linked quarter basis
  • Cost of total deposits was 2.47% for the second quarter of 2024, up 12 basis points on a linked quarter basis
  • Noninterest income decreased $2.6 million on a linked quarter basis primarily due to a decrease in mortgage banking income. During the first quarter of 2024, the Company sold a portion of its mortgage servicing rights (“MSR”), recognizing a gain of $3.5 million with no such sale in the second quarter of 2024
  • Mortgage banking income decreased $1.7 million on a linked quarter basis. Excluding the gain recognized in the first quarter on the sale of a portion of Renasant’s MSR, mortgage banking income increased $1.8 million on a linked quarter basis. The mortgage division generated $0.6 billion in interest rate lock volume in the second quarter of 2024, an increase of $0.2 billion on a linked quarter basis. Gain on sale margin was 1.69% for the second quarter of 2024, down 9 basis points on a linked quarter basis.
  • Noninterest expense decreased $0.9 million on a linked quarter basis. Excluding the effect of certain charitable contributions and FDIC special assessment expense incurred in the first quarter, noninterest expense increased approximately $0.8 million on a linked quarter basis. Seasonality in our mortgage division resulted in higher levels of expense driven from increased volumes. These expenses were slightly offset by savings in other areas

Balance Sheet

  • Loans increased $104.2 million on a linked quarter basis, representing 3.4% annualized net loan growth
  • Securities decreased $39.2 million on a linked quarter basis due to net cash outflows during the quarter of $43.1 million and a positive fair market value adjustment in our available-for-sale portfolio of $3.9 million
  • Deposits at June 30, 2024 increased $18.1 million on a linked quarter basis. Brokered deposits decreased $183.7 million on a linked quarter basis to $158.6 million at June 30, 2024. Noninterest bearing deposits increased $23.3 million on a linked quarter basis and represented 24.8% of total deposits at June 30, 2024

Capital and Liquidity

  • Book value per share and tangible book value per share (non-GAAP)(1) increased 1.3% and 2.4%, 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 second quarter of 2024

Credit Quality

  • The Company recorded a provision for credit losses of $3.3 million for the second quarter of 2024, compared to $2.4 million for the first quarter of 2024
  • The ratio of allowance for credit losses on loans to total loans was 1.59% at June 30, 2024 compared to 1.61% at March 31, 2024
  • The coverage ratio, or the allowance for credit losses on loans to nonperforming loans, was 203.88% at June 30, 2024, compared to 270.87% at March 31, 2024
  • Net loan charge-offs for the second quarter of 2024 were $5.5 million, or 0.18% of average loans on an annualized basis
  • Nonperforming loans to total loans increased to 0.78% at June 30, 2024 compared to 0.59% at March 31, 2024, and criticized loans (which include classified and special mention loans) to total loans decreased to 2.62% at June 30, 2024, compared to 2.76% at March 31, 2024

Sale of Renasant Insurance

  • Effective July 1, 2024, Renasant sold the assets of its insurance agency for cash proceeds to Renasant Bank of $56.4 million, recognizing an estimated after-tax impact to earnings of $36.4 million, which is net of estimated merger-related expenses. The financial effects of the sale will be reflected in the third quarter of 2024

(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   Six Months Ended
  Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023   Jun 30, 2024 Jun 30, 2023
Interest income                
Loans held for investment $ 198,397   $ 192,390   $ 188,535 $ 181,129   $ 173,198     $ 390,787   $ 334,985  
Loans held for sale   3,530     2,308     3,329   3,751     2,990       5,838     4,727  
Securities   10,410     10,700     10,728   10,669     14,000       21,110     29,091  
Other   7,874     7,781     7,839   10,128     6,978       15,655     12,408  
Total interest income   220,211     213,179     210,431   205,677     197,166       433,390     381,211  
Interest expense                
Deposits   87,621     82,613     77,168   70,906     51,391       170,234     84,257  
Borrowings   7,564     7,276     7,310   7,388     15,559       14,840     30,963  
Total interest expense   95,185     89,889     84,478   78,294     66,950       185,074     115,220  
Net interest income   125,026     123,290     125,953   127,383     130,216       248,316     265,991  
Provision for credit losses                
Provision for loan losses   4,300     2,638     2,518   5,315     3,000       6,938     10,960  
Recovery of unfunded commitments   (1,000 )   (200 )     (700 )   (1,000 )     (1,200 )   (2,500 )
Total provision for credit losses   3,300     2,438     2,518   4,615     2,000       5,738     8,460  
Net interest income after provision for credit losses   121,726     120,852     123,435   122,768     128,216       242,578     257,531  
Noninterest income   38,762     41,381     20,356   38,200     17,226       80,143     54,519  
Noninterest expense   111,976     112,912     111,880   108,369     110,165       224,888     219,373  
Income before income taxes   48,512     49,321     31,911   52,599     35,277       97,833     92,677  
Income taxes   9,666     9,912     3,787   10,766     6,634       19,578     17,956  
Net income $ 38,846   $ 39,409   $ 28,124 $ 41,833   $ 28,643     $ 78,255   $ 74,721  
                 
Adjusted net income (non-GAAP)(1) $ 38,846   $ 36,572   $ 42,887 $ 41,833   $ 46,728     $ 75,421   $ 92,591  
Adjusted pre-provision net revenue (“PPNR”) (non-GAAP)(1) $ 51,812   $ 48,231   $ 52,614 $ 57,214   $ 59,715     $ 100,043   $ 123,575  
                 
Basic earnings per share $ 0.69   $ 0.70   $ 0.50 $ 0.75   $ 0.51     $ 1.39   $ 1.33  
Diluted earnings per share   0.69     0.70     0.50   0.74     0.51       1.38     1.33  
Adjusted diluted earnings per share (non-GAAP)(1)   0.69     0.65     0.76   0.74     0.83       1.33     1.64  
Average basic shares outstanding   56,342,909     56,208,348     56,141,628   56,138,618     56,107,881       56,275,628     56,058,585  
Average diluted shares outstanding   56,684,626     56,531,078     56,611,217   56,523,887     56,395,653       56,607,947     56,330,295  
Cash dividends per common share $ 0.22   $ 0.22   $ 0.22 $ 0.22   $ 0.22     $ 0.44   $ 0.44  
                                           

(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   Six Months Ended
  Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023   Jun 30, 2024 Jun 30, 2023
Return on average assets 0.90 % 0.92 % 0.65 % 0.96 % 0.66 %   0.91 % 0.87 %
Adjusted return on average assets (non-GAAP)(1) 0.90   0.86   0.99   0.96   1.08     0.88   1.08  
Return on average tangible assets (non-GAAP)(1) 0.98   1.00   0.71   1.05   0.73     0.99   0.96  
Adjusted return on average tangible assets (non-GAAP)(1) 0.98   0.93   1.08   1.05   1.18     0.96   1.18  
Return on average equity 6.68   6.85   4.93   7.44   5.18     6.77   6.84  
Adjusted return on average equity (non-GAAP)(1) 6.68   6.36   7.53   7.44   8.45     6.52   8.48  
Return on average tangible equity (non-GAAP)(1) 12.04   12.45   9.26   13.95   9.91     12.25   13.04  
Adjusted return on average tangible equity (non-GAAP)(1) 12.04   11.58   13.94   13.95   15.94     11.81   16.07  
Efficiency ratio (fully taxable equivalent) 67.31   67.52   75.11   64.38   73.29     67.41   67.26  
Adjusted efficiency ratio (non-GAAP)(1) 66.60   68.23   66.18   63.60   62.98     67.41   62.13  
Dividend payout ratio 31.88   31.43   44.00   29.33   43.14     31.65   33.08  
                               

Capital and Balance Sheet Ratios

  As of
  Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023
Shares outstanding   56,367,924     56,304,860     56,142,207     56,140,713     56,132,478  
Market value per share $ 30.54   $ 31.32   $ 33.68   $ 26.19   $ 26.13  
Book value per share   41.77     41.25     40.92     39.78     39.35  
Tangible book value per share (non-GAAP)(1)   23.89     23.32     22.92     21.76     21.30  
Shareholders’ equity to assets   13.45 %   13.39 %   13.23 %   13.00 %   12.82 %
Tangible common equity ratio (non-GAAP)(1)   8.16     8.04     7.87     7.55     7.37  
Leverage ratio   9.81     9.75     9.62     9.48     9.22  
Common equity tier 1 capital ratio   10.75     10.59     10.52     10.46     10.30  
Tier 1 risk-based capital ratio   11.53     11.37     11.30     11.25     11.09  
Total risk-based capital ratio   15.15     15.00     14.93     14.91     14.76  
                               

(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   Six Months Ended
  Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023   Jun 30, 2024 Jun 30, 2023
Noninterest income                
Service charges on deposit accounts $ 10,286 $ 10,506 $ 10,603   $ 9,743   $ 9,733     $ 20,792 $ 18,853  
Fees and commissions   3,944   3,949   4,130     4,108     4,987       7,893   9,663  
Insurance commissions   2,758   2,716   2,583     3,264     2,809       5,474   5,255  
Wealth management revenue   5,684   5,669   5,668     5,986     5,338       11,353   10,478  
Mortgage banking income   9,698   11,370   6,592     7,533     9,771       21,068   18,288  
Net losses on sales of securities (including impairments)       (19,352 )       (22,438 )       (22,438 )
Gain on extinguishment of debt     56   620               56    
BOLI income   2,701   2,691   2,589     2,469     2,402       5,392   5,405  
Other   3,691   4,424   6,923     5,097     4,624       8,115   9,015  
Total noninterest income $ 38,762 $ 41,381 $ 20,356   $ 38,200   $ 17,226     $ 80,143 $ 54,519  
Noninterest expense                
Salaries and employee benefits $ 70,731 $ 71,470 $ 71,841   $ 69,458   $ 70,637     $ 142,201 $ 140,469  
Data processing   3,945   3,807   3,971     3,907     3,684       7,752   7,317  
Net occupancy and equipment   11,844   11,389   11,653     11,548     11,865       23,233   23,270  
Other real estate owned   105   107   306     (120 )   51       212   81  
Professional fees   3,195   3,348   2,854     3,338     4,012       6,543   7,479  
Advertising and public relations   3,807   4,886   3,084     3,474     3,482       8,693   8,168  
Intangible amortization   1,186   1,212   1,274     1,311     1,369       2,398   2,795  
Communications   2,112   2,024   2,026     2,006     2,226       4,136   4,206  
Other   15,051   14,669   14,871     13,447     12,839       29,720   25,588  
Total noninterest expense $ 111,976 $ 112,912 $ 111,880   $ 108,369   $ 110,165     $ 224,888 $ 219,373  
                                       

Mortgage Banking Income

(Dollars in thousands) Three Months Ended   Six Months Ended
  Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023   Jun 30, 2024 Jun 30, 2023
Gain on sales of loans, net $ 5,199 $ 4,535 $ 1,860 $ 3,297 $ 4,646   $ 9,734 $ 9,416
Fees, net   2,866   1,854   2,010   2,376   2,859     4,720   4,665
Mortgage servicing income, net   1,633   4,981   2,722   1,860   2,266     6,614   4,207
Total mortgage banking income $ 9,698 $ 11,370 $ 6,592 $ 7,533 $ 9,771   $ 21,068 $ 18,288
                               

Balance Sheet

(Dollars in thousands) As of
  Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023
Assets          
Cash and cash equivalents $ 851,906   $ 844,400   $ 801,351   $ 741,156   $ 946,899  
Securities held to maturity, at amortized cost   1,174,663     1,199,111     1,221,464     1,245,595     1,273,044  
Securities available for sale, at fair value   749,685     764,486     923,279     909,108     950,930  
Loans held for sale, at fair value   266,406     191,440     179,756     241,613     249,615  
Loans held for investment   12,604,755     12,500,525     12,351,230     12,168,023     11,930,516  
Allowance for credit losses on loans   (199,871 )   (201,052 )   (198,578 )   (197,773 )   (194,391 )
Loans, net   12,404,884     12,299,473     12,152,652     11,970,250     11,736,125  
Premises and equipment, net   280,966     282,193     283,195     284,368     285,952  
Other real estate owned   7,366     9,142     9,622     9,258     5,120  
Goodwill and other intangibles   1,008,062     1,009,248     1,010,460     1,011,735     1,013,046  
Bank-owned life insurance   387,791     385,186     382,584     379,945     377,649  
Mortgage servicing rights   72,092     71,596     91,688     90,241     87,432  
Other assets   306,570     289,466     304,484     298,352     298,530  
Total assets $ 17,510,391   $ 17,345,741   $ 17,360,535   $ 17,181,621   $ 17,224,342  
           
Liabilities and Shareholders’ Equity          
Liabilities          
Deposits:          
Noninterest-bearing $ 3,539,453   $ 3,516,164   $ 3,583,675   $ 3,734,197   $ 3,878,953  
Interest-bearing   10,715,760     10,720,999     10,493,110     10,422,913     10,216,408  
Total deposits   14,255,213     14,237,163     14,076,785     14,157,110     14,095,361  
Short-term borrowings   232,741     108,121     307,577     107,662     257,305  
Long-term debt   428,677     428,047     429,400     427,399     429,630  
Other liabilities   239,059     250,060     249,390     256,127     233,418  
Total liabilities   15,155,690     15,023,391     15,063,152     14,948,298     15,015,714  
           
Shareholders’ equity:          
Common stock   296,483     296,483     296,483     296,483     296,483  
Treasury stock   (97,534 )   (99,683 )   (105,249 )   (105,300 )   (105,589 )
Additional paid-in capital   1,304,782     1,303,613     1,308,281     1,304,891     1,301,883  
Retained earnings   1,005,086     978,880     952,124     936,573     907,312  
Accumulated other comprehensive loss   (154,116 )   (156,943 )   (154,256 )   (199,324 )   (191,461 )
Total shareholders’ equity   2,354,701     2,322,350     2,297,383     2,233,323     2,208,628  
Total liabilities and shareholders’ equity $ 17,510,391   $ 17,345,741   $ 17,360,535   $ 17,181,621   $ 17,224,342  
                               

Net Interest Income and Net Interest Margin

(Dollars in thousands) Three Months Ended
  June 30, 2024 March 31, 2024 June 30, 2023
  Average
Balance
Interest
Income/
Expense
Yield/  
 Rate
Average
Balance
Interest
Income/
Expense
Yield/  
 Rate
Average
Balance
Interest
Income/
Expense
Yield/  
 Rate
Interest-earning assets:                  
Loans held for investment $ 12,575,651 $ 200,670 6.41 % $ 12,407,976 $ 194,640 6.30 % $ 11,877,592 $ 175,549 5.93 %
Loans held for sale   219,826   3,530 6.42 %   155,382   2,308 5.94 %   192,539   2,990 6.21 %
Taxable securities   1,832,002   9,258 2.02 %   1,891,817   9,505 2.01 %   2,481,712   12,353 1.99 %
Tax-exempt securities(1)   263,937   1,451 2.20 %   270,279   1,505 2.23 %   367,410   2,165 2.36 %
Total securities   2,095,939   10,709 2.04 %   2,162,096   11,010 2.04 %   2,849,122   14,518 2.04 %
Interest-bearing balances with banks   595,030   7,874 5.32 %   570,336   7,781 5.49 %   524,307   6,978 5.34 %
Total interest-earning assets   15,486,446   222,783 5.77 %   15,295,790   215,739 5.66 %   15,443,560   200,035 5.19 %
Cash and due from banks   187,519       188,503       189,668    
Intangible assets   1,008,638       1,009,825       1,013,811    
Other assets   688,766       708,895       690,885    
Total assets $ 17,371,369     $ 17,203,013     $ 17,337,924    
Interest-bearing liabilities:                  
Interest-bearing demand(2) $ 7,094,411 $ 56,132 3.17 % $ 6,955,989 $ 52,500 3.03 % $ 6,114,067 $ 29,185 1.91 %
Savings deposits   839,638   729 0.35 %   860,397   730 0.34 %   1,004,096   813 0.32 %
Brokered deposits   294,650   3,944 5.37 %   445,608   5,987 5.39 %   809,613   10,295 5.10 %
Time deposits   2,487,873   26,816 4.34 %   2,319,420   23,396 4.06 %   1,735,567   11,098 2.57 %
Total interest-bearing deposits   10,716,572   87,621 3.28 %   10,581,414   82,613 3.13 %   9,663,343   51,391 2.13 %
Borrowed funds   564,672   7,564 5.37 %   544,564   7,276 5.35 %   1,204,968   15,559 5.18 %
Total interest-bearing liabilities   11,281,244   95,185 3.39 %   11,125,978   89,889 3.24 %   10,868,311   66,950 2.47 %
Noninterest-bearing deposits   3,509,109       3,518,612       4,039,087    
Other liabilities   243,285       244,142       212,818    
Shareholders’ equity   2,337,731       2,314,281       2,217,708    
Total liabilities and shareholders’ equity $ 17,371,369     $ 17,203,013     $ 17,337,924    
Net interest income/ net interest margin   $ 127,598 3.31 %   $ 125,850 3.30 %   $ 133,085 3.45 %
Cost of funding     2.58 %     2.46 %     1.80 %
Cost of total deposits     2.47 %     2.35 %     1.50 %
                         

(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) Six Months Ended
  June 30, 2024 June 30, 2023
  Average
Balance
Interest
Income/
Expense
Yield/  
 Rate
Average
Balance
Interest
Income/
Expense
Yield/  
 Rate
Interest-earning assets:            
Loans held for investment $ 12,491,814 $ 395,310 6.35 % $ 11,783,585 $ 339,519 5.81 %
Loans held for sale   187,604   5,838 6.22 %   148,221   4,727 6.38 %
Taxable securities(1)   1,861,909   18,763 2.02 %   2,557,997   25,670 2.01 %
Tax-exempt securities   267,108   2,956 2.21 %   382,130   4,510 2.36 %
Total securities   2,129,017   21,719 2.04 %   2,940,127   30,180 2.05 %
Interest-bearing balances with banks   582,683   15,655 5.40 %   494,434   12,408 5.06 %
Total interest-earning assets   15,391,118   438,522 5.72 %   15,366,367   386,834 5.07 %
Cash and due from banks   188,011       193,703    
Intangible assets   1,009,232       1,012,690    
Other assets   701,770       675,648    
Total assets $ 17,290,131     $ 17,248,408    
Interest-bearing liabilities:            
Interest-bearing demand(2) $ 7,025,200 $ 108,632 3.10 % $ 6,090,549 $ 49,483 1.64 %
Savings deposits   850,018   1,459 0.34 %   1,028,315   1,639 0.32 %
Brokered deposits   370,129   9,931 5.38 %   603,822   14,713 4.91 %
Time deposits   2,403,646   50,212 4.20 %   1,650,683   18,422 2.25 %
Total interest-bearing deposits   10,648,993   170,234 3.21 %   9,373,369   84,257 1.81 %
Borrowed funds   554,618   14,840 5.36 %   1,243,049   30,963 5.01 %
Total interest-bearing liabilities   11,203,611   185,074 3.32 %   10,616,418   115,220 2.19 %
Noninterest-bearing deposits   3,513,860       4,212,081    
Other liabilities   246,654       217,573    
Shareholders’ equity   2,326,006       2,202,336    
Total liabilities and shareholders’ equity $ 17,290,131     $ 17,248,408    
Net interest income/ net interest margin   $ 253,448 3.30 %   $ 271,614 3.56 %
Cost of funding     2.52 %     1.57 %
Cost of total deposits     2.41 %     1.25 %
                 

(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   Six Months Ended
  Jun 30, 2024 Mar 31, 2024 Jun 30, 2023   Jun 30, 2024 Jun 30, 2023
Earning asset mix:            
Loans held for investment   81.20 %   81.12 %   76.91 %     81.16 %   76.68 %
Loans held for sale   1.42     1.02     1.25       1.22     0.96  
Securities   13.53     14.14     18.45       13.83     19.13  
Interest-bearing balances with banks   3.85     3.72     3.39       3.79     3.23  
Total   100.00 %   100.00 %   100.00 %     100.00 %   100.00 %
             
Funding sources mix:            
Noninterest-bearing demand   23.73 %   24.03 %   27.09 %     23.88 %   28.41 %
Interest-bearing demand   47.97     47.50     41.01       47.73     41.07  
Savings   5.68     5.88     6.74       5.78     6.93  
Brokered deposits   1.99     3.04     5.43       2.51     4.07  
Time deposits   16.82     15.84     11.64       16.33     11.13  
Borrowed funds   3.81     3.71     8.09       3.77     8.39  
Total   100.00 %   100.00 %   100.00 %     100.00 %   100.00 %
             
Net interest income collected on problem loans $ (146 ) $ 123   $ 364     $ (23 ) $ 756  
Total accretion on purchased loans   897     800     874       1,697     1,759  
Total impact on net interest income $ 751   $ 923   $ 1,238     $ 1,674   $ 2,515  
Impact on net interest margin   0.02 %   0.02 %   0.03 %     0.02 %   0.03 %
Impact on loan yield   0.02     0.03     0.04       0.03 %   0.04 %
                                 

Loan Portfolio

(Dollars in thousands) As of
  Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023
Loan Portfolio:          
Commercial, financial, agricultural $ 1,847,762 $ 1,869,408 $ 1,871,821 $ 1,819,891 $ 1,729,070
Lease financing   102,996   107,474   116,020   120,724   122,370
Real estate – construction   1,355,425   1,243,535   1,333,397   1,407,364   1,369,019
Real estate – 1-4 family mortgages   3,435,818   3,429,286   3,439,919   3,398,876   3,348,654
Real estate – commercial mortgages   5,766,478   5,753,230   5,486,550   5,313,166   5,252,479
Installment loans to individuals   96,276   97,592   103,523   108,002   108,924
Total loans $ 12,604,755 $ 12,500,525 $ 12,351,230 $ 12,168,023 $ 11,930,516
                     

Credit Quality and Allowance for Credit Losses on Loans

(Dollars in thousands) As of
  Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023
Nonperforming Assets:          
Nonaccruing loans $ 97,795   $ 73,774   $ 68,816   $ 69,541   $ 55,439  
Loans 90 days or more past due   240     451     554     532     36,321  
Total nonperforming loans   98,035     74,225     69,370     70,073     91,760  
Other real estate owned   7,366     9,142     9,622     9,258     5,120  
Total nonperforming assets $ 105,401   $ 83,367   $ 78,992   $ 79,331   $ 96,880  
           
Criticized Loans          
Classified loans $ 191,595   $ 206,502   $ 166,893   $ 186,052   $ 219,674  
Special Mention loans   138,343     138,366     99,699     89,858     56,616  
Criticized loans(1) $ 329,938   $ 344,868   $ 266,592   $ 275,910   $ 276,290  
           
Allowance for credit losses on loans $ 199,871   $ 201,052   $ 198,578   $ 197,773   $ 194,391  
Net loan charge-offs $ 5,481   $ 164   $ 1,713   $ 1,933   $ 3,901  
Annualized net loan charge-offs / average loans   0.18 %   0.01 %   0.06 %   0.06 %   0.13 %
Nonperforming loans / total loans   0.78     0.59     0.56     0.58     0.77  
Nonperforming assets / total assets   0.60     0.48     0.46     0.46     0.56  
Allowance for credit losses on loans / total loans   1.59     1.61     1.61     1.63     1.63  
Allowance for credit losses on loans / nonperforming loans   203.88     270.87     286.26     282.24     211.85  
Criticized loans / total loans   2.62     2.76     2.16     2.27     2.32  
                               

(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, July 24, 2024.

The webcast is accessible through Renasant’s investor relations website at www.renasant.com or https://event.choruscall.com/mediaframe/webcast.html?webcastid=4YF7gjk4. To access the conference via telephone, dial 1-877-513-1143 in the United States and request the Renasant Corporation 2024 Second 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 8556122 or by dialing 1-412-317-0088 internationally and entering the same conference number. Telephone replay access is available until August 7, 2024.

ABOUT RENASANT CORPORATION:

Renasant Corporation is the parent of Renasant Bank, a 120-year-old financial services institution. Renasant has assets of approximately $17.5 billion and operates 185 banking, lending, mortgage and wealth management 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, 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 the 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 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, namely, (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 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, including related amortization, and/or certain gains or charges (although, for the second quarter of 2024, there were no excluded gains or charges), 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 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   Six Months Ended
  Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023   Jun 30, 2024 Jun 30, 2023
Adjusted Pre-Provision Net Revenue (“PPNR”)            
Net income (GAAP) $ 38,846   $ 39,409   $ 28,124   $ 41,833   $ 28,643     $ 78,255   $ 74,721  
Income taxes   9,666     9,912     3,787     10,766     6,634       19,578     17,956  
Provision for credit losses (including unfunded commitments)   3,300     2,438     2,518     4,615     2,000       5,738     8,460  
Pre-provision net revenue (non-GAAP) $ 51,812   $ 51,759   $ 34,429   $ 57,214   $ 37,277     $ 103,571   $ 101,137  
Gain on extinguishment of debt       (56 )   (620 )             (56 )    
Gain on sales of MSR       (3,472 )   (547 )             (3,472 )    
Losses on sales of securities (including impairments)           19,352         22,438           22,438  
Adjusted pre-provision net revenue (non-GAAP) $ 51,812   $ 48,231   $ 52,614   $ 57,214   $ 59,715     $ 100,043   $ 123,575  
                 
Adjusted Net Income and Adjusted Tangible Net Income            
Net income (GAAP) $ 38,846   $ 39,409   $ 28,124   $ 41,833   $ 28,643     $ 78,255   $ 74,721  
Amortization of intangibles   1,186     1,212     1,274     1,311     1,369       2,398     2,795  
Tax effect of adjustments noted above(1)   (233 )   (237 )   (240 )   (269 )   (266 )     (472 )   (569 )
Tangible net income (non-GAAP) $ 39,799   $ 40,384   $ 29,158   $ 42,875   $ 29,746     $ 80,181   $ 76,947  
                 
Net income (GAAP) $ 38,846   $ 39,409   $ 28,124   $ 41,833   $ 28,643     $ 78,255   $ 74,721  
Gain on extinguishment of debt       (56 )   (620 )             (56 )    
Gain on sales of MSR       (3,472 )   (547 )             (3,472 )    
Losses on sales of securities (including impairments)           19,352         22,438           22,438  
Tax effect of adjustments noted above(1)       691     (3,422 )       (4,353 )     694     (4,568 )
Adjusted net income (non-GAAP) $ 38,846   $ 36,572   $ 42,887   $ 41,833   $ 46,728     $ 75,421   $ 92,591  
Amortization of intangibles   1,186     1,212     1,274     1,311     1,369       2,398     2,795  
Tax effect of adjustments noted above(1)   (233 )   (237 )   (240 )   (269 )   (266 )     (472 )   (569 )
Adjusted tangible net income (non-GAAP) $ 39,799   $ 37,547   $ 43,921   $ 42,875   $ 47,831     $ 77,347   $ 94,817  
Tangible Assets and Tangible Shareholders’ Equity            
Average shareholders’ equity (GAAP) $ 2,337,731   $ 2,314,281   $ 2,261,025   $ 2,231,605   $ 2,217,708     $ 2,326,006   $ 2,202,336  
Average intangible assets   1,008,638     1,009,825     1,011,130     1,012,460     1,013,811       1,009,232     1,012,690  
Average tangible shareholders’ equity (non-GAAP) $ 1,329,093   $ 1,304,456   $ 1,249,895   $ 1,219,145   $ 1,203,897     $ 1,316,774   $ 1,189,646  
                 
Average assets (GAAP) $ 17,371,369   $ 17,203,013   $ 17,195,840   $ 17,235,413   $ 17,337,924     $ 17,290,131   $ 17,248,408  
Average intangible assets   1,008,638     1,009,825     1,011,130     1,012,460     1,013,811       1,009,232     1,012,690  
Average tangible assets (non-GAAP) $ 16,362,731   $ 16,193,188   $ 16,184,710   $ 16,222,953   $ 16,324,113     $ 16,280,899   $ 16,235,718  
                 
Shareholders’ equity (GAAP) $ 2,354,701   $ 2,322,350   $ 2,297,383   $ 2,233,323   $ 2,208,628     $ 2,354,701   $ 2,208,628  
Intangible assets   1,008,062     1,009,248     1,010,460     1,011,735     1,013,046       1,008,062     1,013,046  
Tangible shareholders’ equity (non-GAAP) $ 1,346,639   $ 1,313,102   $ 1,286,923   $ 1,221,588   $ 1,195,582     $ 1,346,639   $ 1,195,582  
                 
Total assets (GAAP) $ 17,510,391   $ 17,345,741   $ 17,360,535   $ 17,181,621   $ 17,224,342     $ 17,510,391   $ 17,224,342  
Intangible assets   1,008,062     1,009,248     1,010,460     1,011,735     1,013,046       1,008,062     1,013,046  
Total tangible assets (non-GAAP) $ 16,502,329   $ 16,336,493   $ 16,350,075   $ 16,169,886   $ 16,211,296     $ 16,502,329   $ 16,211,296  
                 
Adjusted Performance Ratios                
Return on average assets (GAAP)   0.90 %   0.92 %   0.65 %   0.96 %   0.66 %     0.91 %   0.87 %
Adjusted return on average assets (non-GAAP)   0.90     0.86     0.99     0.96     1.08       0.88     1.08  
Return on average tangible assets (non-GAAP)   0.98     1.00     0.71     1.05     0.73       0.99     0.96  
Pre-provision net revenue to average assets (non-GAAP)   1.20     1.21     0.79     1.32     0.86       1.20     1.18  
Adjusted pre-provision net revenue to average assets (non-GAAP)   1.20     1.13     1.21     1.32     1.38       1.16     1.44  
Adjusted return on average tangible assets (non-GAAP)   0.98     0.93     1.08     1.05     1.18       0.96     1.18  
Return on average equity (GAAP)   6.68     6.85     4.93     7.44     5.18       6.77     6.84  
Adjusted return on average equity (non-GAAP)   6.68     6.36     7.53     7.44     8.45       6.52     8.48  
Return on average tangible equity (non-GAAP)   12.04     12.45     9.26     13.95     9.91       12.25     13.04  
Adjusted return on average tangible equity (non-GAAP)   12.04     11.58     13.94     13.95     15.94       11.81     16.07  
                 
Adjusted Diluted Earnings Per Share            
Average diluted shares outstanding   56,684,626     56,531,078     56,611,217     56,523,887     56,395,653       56,607,947     56,330,295  
                 
Diluted earnings per share (GAAP) $ 0.69   $ 0.70   $ 0.50   $ 0.74   $ 0.51     $ 1.38   $ 1.33  
Adjusted diluted earnings per share (non-GAAP) $ 0.69   $ 0.65   $ 0.76   $ 0.74   $ 0.83     $ 1.33   $ 1.64  
                 
Tangible Book Value Per Share                
Shares outstanding   56,367,924     56,304,860     56,142,207     56,140,713     56,132,478       56,367,924     56,132,478  
                 
Book value per share (GAAP) $ 41.77   $ 41.25   $ 40.92   $ 39.78   $ 39.35     $ 41.77   $ 39.35  
Tangible book value per share (non-GAAP) $ 23.89   $ 23.32   $ 22.92   $ 21.76   $ 21.30     $ 23.89   $ 21.30  
                 
Tangible Common Equity Ratio                
Shareholders’ equity to assets (GAAP)   13.45 %   13.39 %   13.23 %   13.00 %   12.82 %     13.45 %   12.82 %
Tangible common equity ratio (non-GAAP)   8.16 %   8.04 %   7.87 %   7.55 %   7.37 %     8.16 %   7.37 %
Adjusted Efficiency Ratio                
Net interest income (FTE) (GAAP) $ 127,598   $ 125,850   $ 128,595   $ 130,131   $ 133,085     $ 253,448   $ 271,614  
                 
Total noninterest income (GAAP) $ 38,762   $ 41,381   $ 20,356   $ 38,200   $ 17,226     $ 80,143   $ 54,519  
Gain on sales of MSR       3,472     547               3,472      
Gain on extinguishment of debt       56     620               56      
Losses on sales of securities (including impairments)           (19,352 )       (22,438 )         (22,438 )
Total adjusted noninterest income (non-GAAP) $ 38,762   $ 37,853   $ 38,541   $ 38,200   $ 39,664     $ 76,615   $ 76,957  
                 
Noninterest expense (GAAP) $ 111,976   $ 112,912   $ 111,880   $ 108,369   $ 110,165     $ 224,888   $ 219,373  
Amortization of intangibles   1,186     1,212     1,274     1,311     1,369       2,398     2,795  
Total adjusted noninterest expense (non-GAAP) $ 110,790   $ 111,700   $ 110,606   $ 107,058   $ 108,796     $ 222,490   $ 216,578  
                 
Efficiency ratio (GAAP)   67.31 %   67.52 %   75.11 %   64.38 %   73.29 %     67.41 %   67.26 %
Adjusted efficiency ratio (non-GAAP)   66.60 %   68.23 %   66.18 %   63.60 %   62.98 %     67.41 %   62.13 %
                 
Adjusted Net Interest Income and Adjusted Net Interest Margin            
Net interest income (FTE) (GAAP) $ 127,598   $ 125,850   $ 128,595   $ 130,131   $ 133,085     $ 253,448   $ 271,614  
Net interest income collected on problem loans   (146 )   123     283     (820 )   364       (23 )   756  
Accretion recognized on purchased loans   897     800     1,117     1,290     874       1,697     1,759  
Adjustments to net interest income $ 751   $ 923   $ 1,400   $ 470   $ 1,238     $ 1,674   $ 2,515  
Adjusted net interest income (FTE) (non-GAAP) $ 126,847   $ 124,927   $ 127,195   $ 129,661   $ 131,847     $ 251,774   $ 269,099  
                 
Net interest margin (GAAP)   3.31 %   3.30 %   3.33 %   3.36 %   3.45 %     3.30 %   3.56 %
Adjusted net interest margin (non-GAAP)   3.29 %   3.28 %   3.29 %   3.35 %   3.43 %     3.28 %   3.52 %
                 
Adjusted Loan Yield                
Loan interest income (FTE) (GAAP) $ 200,670   $ 194,640   $ 190,857   $ 183,521   $ 175,549     $ 395,310   $ 339,519  
Net interest income collected on problem loans   (146 )   123     283     (820 )   364       (23 )   756  
Accretion recognized on purchased loans   897     800     1,117     1,290     874       1,697     1,759  
Adjusted loan interest income (FTE) (non-GAAP) $ 199,919   $ 193,717   $ 189,457   $ 183,051   $ 174,311     $ 393,636   $ 337,004  
                 
Loan yield (GAAP)   6.41 %   6.30 %   6.18 %   6.06 %   5.93 %     6.35 %   5.81 %
Adjusted loan yield (non-GAAP)   6.38 %   6.27 %   6.14 %   6.04 %   5.89 %     6.32 %   5.76 %
                                             

(1) Tax effect is calculated based on the respective periods’ year-to-date 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


Bay Street News