• Renasant Corporation Announces Earnings for the Second Quarter of 2023

    Source: Nasdaq GlobeNewswire / 25 Jul 2023 15:30:01   America/Chicago

    TUPELO, Miss., July 25, 2023 (GLOBE NEWSWIRE) -- Renasant Corporation (NASDAQ: RNST) (the “Company”) today announced earnings results for the second quarter of 2023.

    (Dollars in thousands, except earnings per share)Three Months Ended Six Months Ended
     Jun 30, 2023Mar 31, 2023Jun 30, 2022 Jun 30, 2023Jun 30, 2022
    Net income and earnings per share:      
    Net income$28,643 $46,078$39,678 $74,721 $73,225
    After-tax loss on sale of securities(18,085)—— (17,870)—
    Basic EPS0.51 0.820.71 1.33 1.31
    Diluted EPS0.51 0.820.71 1.33 1.30
    Impact to diluted EPS from loss on sale of securities0.32 —— 0.31 —
    Adjusted diluted EPS (Non-GAAP)(1)0.83 0.820.72 1.64 1.32

    “We are pleased with our second quarter results in light of the challenging interest rate environment. In the quarter we continued to take steps to add strength and optionality to our balance sheet and benefit earnings,” remarked C. Mitchell Waycaster, Chief Executive Officer of the Company. “The Company’s focus remains on core funding and maintaining a diverse and granular loan portfolio.”

    Quarterly Highlights

    Earnings

    • Net income for the second quarter of 2023 was $28.6 million with diluted EPS of $0.51
    • Net interest income (fully tax equivalent) for the second quarter of 2023 was $133.1 million, down $5.4 million on a linked quarter basis
    • For the second quarter of 2023, net interest margin was 3.45%, down 21 basis points on a linked quarter basis
    • Cost of total deposits was 150 basis points for the second quarter of 2023, up 51 basis points on a linked quarter basis
    • Noninterest income decreased $20.1 million on a linked quarter basis primarily due to losses of $22.4 million on securities sales, as detailed below. The Company’s wealth management and insurance lines of business produced solid results during the second quarter of 2023
    • The mortgage division generated $0.6 billion in interest rate lock volume in the second quarter of 2023. Gain on sale margin was 1.66% for the second quarter of 2023, up 51 basis points on a linked quarter basis
    • Noninterest expense increased $1.5 million during the second quarter of 2023. Annual merit increases contributed to the increase

    Balance Sheet

    • Loans increased $164.1 million on a linked quarter basis, which represents 5.6% annualized net loan growth
    • The securities portfolio decreased $584.2 million on a linked quarter basis, primarily due to the sale of available-for-sale securities, which generated $489 million in proceeds. The Company recognized a pre-tax loss of $22.4 million and used the sale proceeds to pay down FHLB borrowings
    • Deposits at June 30, 2023 increased $183.3 million on a linked quarter basis, driven by an increase in brokered deposits of $224 million. Brokered deposits were $1.1 billion at June 30, 2023. Noninterest bearing deposits decreased $365.9 million on a linked quarter basis and represented 27.5% of total deposits at June 30, 2023

    Capital and Liquidity

    • Book value per share and tangible book value per share (non-GAAP)(1) increased 0.9% and 1.8%, respectively, on a linked quarter basis
    • The Company has a $100 million stock repurchase program that is in effect through October 2023; there was no buyback activity during the second quarter of 2023

    Credit Quality

    • The Company recorded a provision for credit losses on loans of $3.0 million and a recovery of credit losses on unfunded commitments (included in noninterest expense) of $1.0 million for the second quarter of 2023
    • The ratio of allowance for credit losses on loans to total loans was relatively stable at 1.63% at June 30, 2023
    • The coverage ratio, or the allowance for credit losses on loans to nonperforming loans, was 211.85% at June 30, 2023, compared to 259.39% at March 31, 2023
    • Net loan charge-offs for the second quarter of 2023 were $3.9 million, or 0.13% of average loans on an annualized basis
    • Loans 30-89 days past due to total loans decreased 33 basis points on a linked quarter basis to 0.10%. Nonperforming loans to total loans increased to 0.77% at June 30, 2023 compared to 0.64% at March 31, 2023 and criticized loans (which include classified and special mention loans) to total loans decreased to 2.32% at June 30, 2023, compared to 2.44% at March 31, 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 Six Months Ended
     Jun 30,
    2023    		Mar 31,
    2023    		Dec 31,
    2022    		Sep 30,
    2022    		Jun 30,
    2022    		 Jun 30,
    2023    		Jun 30,
    2022
    Interest income        
    Loans held for investment$173,198$161,787$145,360$123,100$106,409 $334,985$202,238
    Loans held for sale 2,990 1,737 1,688 2,075 2,586  4,727 5,449
    Securities 14,000 15,091 15,241 14,500 12,471  29,091 23,306
    Other 6,978 5,430 2,777 3,458 1,954  12,408 2,618
    Total interest income 197,166 184,045 165,066 143,133 123,420  381,211 233,611
    Interest expense        
    Deposits 51,391 32,866 17,312 7,241 5,018  84,257 10,655
    Borrowings 15,559 15,404 9,918 5,574 4,887  30,963 9,812
    Total interest expense 66,950 48,270 27,230 12,815 9,905  115,220 20,467
    Net interest income 130,216 135,775 137,836 130,318 113,515  265,991 213,144
    Provision for loan losses 3,000 7,960 10,488 9,800 2,000  10,960 3,500
    Net interest income after provision for credit losses 127,216 127,815 127,348 120,518 111,515  255,031 209,644
    Noninterest income 17,226 37,293 33,395 41,186 37,214  54,519 74,672
    Noninterest expense 109,165 107,708 101,582 101,574 98,194  216,873 192,299
    Income before income taxes 35,277 57,400 59,161 60,130 50,535  92,677 92,017
    Income taxes 6,634 11,322 12,885 13,563 10,857  17,956 18,792
    Net income$28,643$46,078$46,276$46,567$39,678 $74,721$73,225
             
    Adjusted net income (non-GAAP)(1)$46,728$46,078$50,324$44,233$40,601 $92,591$74,329
    Adjusted pre-provision net revenue (“PPNR”) (non-GAAP)(1)$59,715$63,860$72,187$66,970$54,172 $123,575$96,836
             
    Basic earnings per share$0.51$0.82$0.83$0.83$0.71 $1.33$1.31
    Diluted earnings per share 0.51 0.82 0.82 0.83 0.71  1.33 1.30
    Adjusted diluted earnings per share (non-GAAP)(1) 0.83 0.82 0.89 0.79 0.72  1.64 1.32
    Average basic shares outstanding 56,107,881 56,008,741 55,953,104 55,947,214 55,906,755  56,058,585 55,858,243
    Average diluted shares outstanding 56,395,653 56,270,219 56,335,446 56,248,720 56,182,845  56,330,295 56,130,762
    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,
    2023    		Mar 31,
    2023    		Dec 31,
    2022    		Sep 30,
    2022    		Jun 30,
    2022    		 Jun 30,
    2023    		Jun 30,
    2022
    Return on average assets0.66%1.09%1.11%1.11%0.96% 0.87%0.89%
    Adjusted return on average assets (non-GAAP)(1)1.08 1.09 1.20 1.05 0.98  1.08 0.90 
    Return on average tangible assets (non-GAAP)(1)0.73 1.19 1.20 1.20 1.04  0.96 0.97 
    Adjusted return on average tangible assets (non-GAAP)(1)1.18 1.19 1.30 1.14 1.07  1.18 0.98 
    Return on average equity5.18 8.55 8.58 8.50 7.31  6.84 6.67 
    Adjusted return on average equity (non-GAAP)(1)8.45 8.55 9.33 8.07 7.48  8.48 6.77 
    Return on average tangible equity (non-GAAP)(1)9.91 16.29 15.98 15.64 13.50  13.04 12.18 
    Adjusted return on average tangible equity (non-GAAP)(1)15.94 16.29 17.35 14.87 13.81  16.07 12.36 
    Efficiency ratio (fully taxable equivalent)72.63 61.26 58.39 58.50 64.37  66.50 66.00 
    Adjusted efficiency ratio (non-GAAP)(1)62.98 61.30 56.25 58.78 62.44  62.13 64.63 
    Dividend payout ratio43.14 26.83 26.51 26.51 30.99  33.08 33.59 

    Capital and Balance Sheet Ratios

     As of
     Jun 30,
    2023    		Mar 31,
    2023    		Dec 31,
    2022    		Sep 30,
    2022    		Jun 30,
    2022
    Shares outstanding 56,132,478  56,073,658  55,953,104  55,953,104  55,932,017 
    Market value per share$26.13 $30.58 $37.59 $31.28 $28.81 
    Book value per share 39.35  39.01  38.18  37.39  37.85 
    Tangible book value per share (non-GAAP)(1) 21.30  20.92  20.02  20.12  20.55 
    Shareholders’ equity to assets 12.82% 12.52% 12.57% 12.70% 12.74%
    Tangible common equity ratio (non-GAAP)(1) 7.37  7.13  7.01  7.26  7.34 
    Leverage ratio 9.22  9.18  9.36  9.39  9.16 
    Common equity tier 1 capital ratio 10.30  10.19  10.21  10.64  10.74 
    Tier 1 risk-based capital ratio 11.09  10.98  11.01  11.47  11.60 
    Total risk-based capital ratio 14.76  14.68  14.63  15.15  15.34 

    (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,
    2023    		Mar 31,
    2023    		Dec 31,
    2022    		Sep 30,
    2022    		Jun 30,
    2022    		 Jun 30,
    2023    		Jun 30,
    2022
    Noninterest income        
    Service charges on deposit accounts$9,733 $9,120$10,445 $10,216$9,734  $18,853 $19,296 
    Fees and commissions 4,987  4,676 4,470  4,148 4,668   9,663  8,650 
    Insurance commissions 2,809  2,446 2,501  3,108 2,591   5,255  5,145 
    Wealth management revenue 5,338  5,140 5,237  5,467 5,711   10,478  11,635 
    Mortgage banking income 9,771  8,517 5,170  12,675 8,316   18,288  17,949 
    Net losses on sales of securities (22,438) — —  — —   (22,438) — 
    BOLI income 2,402  3,003 2,487  2,296 2,331   5,405  4,484 
    Other 4,624  4,391 3,085  3,276 3,863   9,015  7,513 
    Total noninterest income$17,226 $37,293$33,395 $41,186$37,214  $54,519 $74,672 
    Noninterest expense        
    Salaries and employee benefits$70,637 $69,832$67,372 $66,463$65,580  $140,469 $127,819 
    Data processing 3,684  3,633 3,521  3,526 3,590   7,317  7,853 
    Net occupancy and equipment 11,865  11,405 11,122  11,266 11,155   23,270  22,431 
    Other real estate owned 51  30 (59) 34 (187)  81  (428)
    Professional fees 4,012  3,467 2,856  3,087 2,778   7,479  5,929 
    Advertising and public relations 3,482  4,686 3,631  3,229 3,406   8,168  7,465 
    Intangible amortization 1,369  1,426 1,195  1,251 1,310   2,795  2,676 
    Communications 2,226  1,980 2,028  1,999 1,904   4,206  3,931 
    Merger and conversion related expenses —  — 1,100  — —   —  687 
    Restructuring charges —  — —  — 1,187   —  732 
    Other 11,839  11,249 8,816  10,719 7,471   23,088  13,204 
    Total noninterest expense$109,165 $107,708$101,582 $101,574$98,194  $216,873 $192,299 

    Mortgage Banking Income

    (Dollars in thousands)Three Months Ended Six Months Ended
     Jun 30,
    2023    		Mar 31,
    2023    		Dec 31,
    2022    		Sep 30,
    2022    		Jun 30,
    2022    		 Jun 30,
    2023    		Jun 30,
    2022
    Gain on sales of loans, net$4,646$4,770$1,003$5,263$3,490 $9,416$9,537
    Fees, net 2,859 1,806 1,849 2,405 3,064  4,665 6,117
    Mortgage servicing income, net 2,266 1,941 2,318 5,007 1,762  4,207 2,295
    Total mortgage banking income$9,771$8,517$5,170$12,675$8,316 $18,288$17,949

    Balance Sheet

    (Dollars in thousands)As of
     Jun 30,
    2023    		Mar 31,
    2023    		Dec 31,
    2022    		Sep 30,
    2022    		Jun 30,
    2022
    Assets     
    Cash and cash equivalents$946,899 $847,697 $575,992 $479,500 $1,010,468 
    Securities held to maturity, at amortized cost 1,273,044  1,300,240  1,324,040  1,353,502  488,851 
    Securities available for sale, at fair value 950,930  1,507,907  1,533,942  1,569,242  2,528,253 
    Loans held for sale, at fair value 249,615  159,318  110,105  144,642  196,598 
    Loans held for investment 11,930,516  11,766,425  11,578,304  11,105,004  10,603,744 
    Allowance for credit losses on loans (194,391) (195,292) (192,090) (174,356) (166,131)
    Loans, net 11,736,125  11,571,133  11,386,214  10,930,648  10,437,613 
    Premises and equipment, net 285,952  287,006  283,595  284,062  284,035 
    Other real estate owned 5,120  4,818  1,763  2,412  2,807 
    Goodwill and other intangibles 1,013,046  1,014,415  1,015,884  966,461  967,713 
    Bank-owned life insurance 377,649  375,572  373,808  371,650  371,298 
    Mortgage servicing rights 87,432  85,039  84,448  81,980  94,743 
    Other assets 298,530  320,938  298,385  287,000  235,722 
    Total assets$17,224,342 $17,474,083 $16,988,176 $16,471,099 $16,618,101 
          
    Liabilities and Shareholders’ Equity     
    Liabilities     
    Deposits:     
    Noninterest-bearing$3,878,953 $4,244,877 $4,558,756 $4,827,220 $4,741,397 
    Interest-bearing 10,216,408  9,667,142  8,928,210  8,604,904  9,022,532 
    Total deposits 14,095,361  13,912,019  13,486,966  13,432,124  13,763,929 
    Short-term borrowings 257,305  732,057  712,232  312,818  112,642 
    Long-term debt 429,630  431,111  428,133  426,821  431,553 
    Other liabilities 233,418  211,596  224,829  207,055  193,100 
    Total liabilities 15,015,714  15,286,783  14,852,160  14,378,818  14,501,224 
          
    Shareholders’ equity:     
    Preferred stock —  —  —  —  — 
    Common stock 296,483  296,483  296,483  296,483  296,483 
    Treasury stock (105,589) (107,559) (111,577) (111,577) (112,295)
    Additional paid-in capital 1,301,883  1,299,458  1,302,422  1,299,476  1,298,207 
    Retained earnings 907,312  891,242  857,725  823,951  789,880 
    Accumulated other comprehensive loss (191,461) (192,324) (209,037) (216,052) (155,398)
    Total shareholders’ equity 2,208,628  2,187,300  2,136,016  2,092,281  2,116,877 
    Total liabilities and shareholders’ equity$17,224,342 $17,474,083 $16,988,176 $16,471,099 $16,618,101 

    Net Interest Income and Net Interest Margin

    (Dollars in thousands)Three Months Ended
     June 30, 2023March 31, 2023June 30, 2022
     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$11,877,592$175,5495.93%$11,688,534$163,9705.68%$10,477,036$107,6124.12%
    Loans held for sale 192,539 2,9906.21% 103,410 1,7376.72% 227,435 2,5864.55%
    Taxable securities 2,435,442 12,0891.99% 2,588,148 13,0542.02% 2,684,624 10,3551.54%
    Tax-exempt securities(1) 413,680 2,4292.35% 443,996 2,6082.35% 451,878 2,7192.41%
    Total securities 2,849,122 14,5182.04% 3,032,144 15,6622.07% 3,136,502 13,0741.67%
    Interest-bearing balances with banks 524,307 6,9785.34% 464,229 5,4304.74% 1,004,226 1,9540.78%
    Total interest-earning assets 15,443,560 200,0355.19% 15,288,317 186,7994.94% 14,845,199 125,2263.38%
    Cash and due from banks 189,668   197,782   206,882  
    Intangible assets 1,013,811   1,011,557   968,441  
    Other assets 690,885   660,242   610,768  
    Total assets$17,337,924  $17,157,898  $16,631,290  
    Interest-bearing liabilities:         
    Interest-bearing demand(2)$6,114,067$29,1851.91%$6,066,770$20,2981.36%$6,571,905$3,5980.22%
    Savings deposits 1,004,096 8130.32% 1,052,802 8260.32% 1,137,607 1470.05%
    Brokered deposits 810,087 10,0905.00% 395,942 4,3184.42% — ——%
    Time deposits 1,735,093 11,3032.61% 1,564,658 7,4241.92% 1,303,735 1,2730.39%
    Total interest-bearing deposits 9,663,343 51,3912.13% 9,080,172 32,8661.47% 9,013,247 5,0180.22%
    Borrowed funds 1,204,968 15,5595.18% 1,281,552 15,4044.86% 543,728 4,8873.60%
    Total interest-bearing liabilities 10,868,311 66,9502.47% 10,361,724 48,2701.89% 9,556,975 9,9050.42%
    Noninterest-bearing deposits 4,039,087   4,386,998   4,714,161  
    Other liabilities 212,818   222,382   182,617  
    Shareholders’ equity 2,217,708   2,186,794   2,177,537  
    Total liabilities and shareholders’ equity$17,337,924  $17,157,898  $16,631,290  
    Net interest income/ net interest margin $133,0853.45% $138,5293.66% $115,3213.11%
    Cost of funding  1.80%  1.33%  0.28%
    Cost of total deposits  1.50%  0.99%  0.15%

    (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, 2023June 30, 2022
     Average 
    Balance    		Interest 
    Income/ 
    Expense    		Yield/ 
    Rate    		Average 
    Balance    		Interest 
    Income/ 
    Expense    		Yield/ 
    Rate
    Interest-earning assets:      
    Loans held for investment$11,783,585$339,5195.81%$10,293,949$204,6134.00%
    Loans held for sale 148,221 4,7276.38% 278,722 5,4493.91%
    Taxable securities(1) 2,511,373 25,1432.00% 2,592,645 19,1371.48%
    Tax-exempt securities 428,754 5,0372.35% 445,154 5,3542.41%
    Total securities 2,940,127 30,1802.05% 3,037,799 24,4911.61%
    Interest-bearing balances with banks 494,434 12,4085.06% 1,233,241 2,6180.43%
    Total interest-earning assets 15,366,367 386,8345.07% 14,843,711 237,1713.21%
    Cash and due from banks 193,703   206,559  
    Intangible assets 1,012,690   966,956  
    Other assets 675,648   647,254  
    Total assets$17,248,408  $16,664,480  
    Interest-bearing liabilities:      
    Interest-bearing demand(2)$6,090,549$49,4831.64%$6,603,986$7,2450.22%
    Savings deposits 1,028,315 1,6390.32% 1,117,724 2860.05%
    Brokered deposits 604,158 14,4084.81% — ——%
    Time deposits 1,650,347 18,7272.29% 1,339,022 3,1240.47%
    Total interest-bearing deposits 9,373,369 84,2571.81% 9,060,732 10,6550.24%
    Borrowed funds 1,243,049 30,9635.01% 514,940 9,8123.82%
    Total interest-bearing liabilities 10,616,418 115,2202.19% 9,575,672 20,4670.43%
    Noninterest-bearing deposits 4,212,081   4,683,446  
    Other liabilities 217,573   191,938  
    Shareholders’ equity 2,202,336   2,213,424  
    Total liabilities and shareholders’ equity$17,248,408  $16,664,480  
    Net interest income/ net interest margin $271,6143.56% $216,7042.94%
    Cost of funding  1.57%  0.29%
    Cost of total deposits  1.25%  0.16%

    (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, 2023Mar 31, 2023Jun 30, 2022 Jun 30, 2023Jun 30, 2022
    Earning asset mix:      
    Loans held for investment 76.91% 76.45% 70.57%  76.68% 69.35%
    Loans held for sale 1.25  0.68  1.53   0.96  1.88 
    Securities 18.45  19.83  21.13   19.13  20.47 
    Interest-bearing balances with banks 3.39  3.04  6.77   3.23  8.30 
    Total 100.00% 100.00% 100.00%  100.00% 100.00%
           
    Funding sources mix:      
    Noninterest-bearing demand 27.09% 29.74% 33.03%  28.41% 32.85%
    Interest-bearing demand 41.01  41.13  46.05   41.07  46.31 
    Savings 6.74  7.14  7.97   6.93  7.84 
    Brokered deposits 5.43  2.68  —   4.07  — 
    Time deposits 11.64  10.61  9.14   11.13  9.39 
    Borrowed funds 8.09  8.70  3.81   8.39  3.61 
    Total 100.00% 100.00% 100.00%  100.00% 100.00%
           
    Net interest income collected on problem loans$364 $392 $2,276  $756 $2,710 
    Total accretion on purchased loans 874  885  2,021   1,759  3,256 
    Total impact on net interest income$1,238 $1,277 $4,297  $2,515 $5,966 
    Impact on net interest margin 0.03% 0.03% 0.11%  0.03% 0.08%
    Impact on loan yield 0.04% 0.04% 0.16%  0.04% 0.12%

    Loan Portfolio

    (Dollars in thousands)As of
     Jun 30, 2023Mar 31, 2023Dec 31, 2022Sep 30, 2022Jun 30, 2022
    Loan Portfolio:     
    Commercial, financial, agricultural$1,729,070$1,740,778$1,673,883$1,513,091$1,497,272
    Lease financing 122,370 121,146 115,013 103,357 101,350
    Real estate - construction 1,369,019 1,424,352 1,330,337 1,215,056 1,126,363
    Real estate - 1-4 family mortgages 3,348,654 3,278,980 3,216,263 3,127,889 3,030,083
    Real estate - commercial mortgages 5,252,479 5,085,813 5,118,063 5,016,665 4,717,513
    Installment loans to individuals 108,924 115,356 124,745 128,946 131,163
    Total loans$11,930,516$11,766,425$11,578,304$11,105,004$10,603,744

    Credit Quality and Allowance for Credit Losses on Loans

    (Dollars in thousands)As of
     Jun 30, 2023Mar 31, 2023Dec 31, 2022Sep 30, 2022Jun 30, 2022
    Nonperforming Assets:     
    Nonaccruing loans$55,439 $56,626 $56,545 $54,278 $43,897 
    Loans 90 days or more past due 36,321  18,664  331  1,587  617 
    Total nonperforming loans 91,760  75,290  56,876  55,865  44,514 
    Other real estate owned 5,120  4,818  1,763  2,412  2,807 
    Total nonperforming assets$96,880 $80,108 $58,639 $58,277 $47,321 
          
    Criticized Loans     
    Classified loans$219,674 $222,701 $200,249 $193,844 $185,267 
    Special Mention loans 56,616  64,832  86,172  69,883  87,476 
    Criticized loans(1)$276,290 $287,533 $286,421 $263,727 $272,743 
          
    Allowance for credit losses on loans$194,391 $195,292 $192,090 $174,356 $166,131 
    Net loan charge-offs$3,898 $4,732 $2,566 $1,575 $2,337 
    Annualized net loan charge-offs / average loans 0.13% 0.16% 0.09% 0.06% 0.09%
    Nonperforming loans / total loans 0.77  0.64  0.49  0.50  0.42 
    Nonperforming assets / total assets 0.56  0.46  0.35  0.35  0.28 
    Allowance for credit losses on loans / total loans 1.63  1.66  1.66  1.57  1.57 
    Allowance for credit losses on loans / nonperforming loans 211.85  259.39  337.73  312.10  373.21 
    Criticized loans / total loans 2.32  2.44  2.47  2.37  2.57 

    (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 26, 2023.

    The webcast is accessible through Renasant’s investor relations website at www.renasant.com or https://event.choruscall.com/mediaframe/webcast.html?webcastid=ICrvDnu5. To access the conference via telephone, dial 1-877-513-1143 in the United States and request the Renasant Corporation 2023 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 3891007 or by dialing 1-412-317-0088 internationally and entering the same conference number. Telephone replay access is available until August 9, 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 195 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 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) core loan yield, (ii) core net interest income and margin, (iii) adjusted pre-provision net revenue, (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 adjusted 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 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, for the most recently-completed quarter, losses on the sale of securities and 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 Six Months Ended
     Jun 30,
    2023    		Mar 31,
    2023    		Dec 31,
    2022    		Sep 30,
    2022    		Jun 30,
    2022    		 Jun 30,
    2023    		Jun 30,
    2022
    Adjusted Pre-Provision Net Revenue (“PPNR”)      
    Net income (GAAP)$28,643 $46,078 $46,276 $46,567 $39,678  $74,721 $73,225 
    Income taxes 6,634  11,322  12,885  13,563  10,857   17,956  18,792 
    Provision for credit losses (including unfunded commitments) 2,000  6,460  10,671  9,800  2,450   8,460  3,400 
    Pre-provision net revenue (non-GAAP)$37,277 $63,860 $69,832 $69,930 $52,985  $101,137 $95,417 
    Merger and conversion expense —  —  1,100  —  —   —  687 
    Gain on sale of MSR —  —  —  (2,960) —   —  — 
    Restructuring charges —  —  —  —  1,187   —  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)$59,715 $63,860 $72,187 $66,970 $54,172  $123,575 $96,836 
             
    Adjusted Net Income and Adjusted Tangible Net Income      
    Net income (GAAP)$28,643 $46,078 $46,276 $46,567 $39,678  $74,721 $73,225 
    Amortization of intangibles 1,369  1,426  1,195  1,251  1,310   2,795  2,676 
    Tax effect of adjustments noted above(1) (266) (299) (260) (265) (291)  (569) (594)
    Tangible net income (non-GAAP)$29,746 $47,205 $47,211 $47,553 $40,697  $76,947 $75,307 
             
    Net income (GAAP)$28,643 $46,078 $46,276 $46,567 $39,678  $74,721 $73,225 
    Merger and conversion expense —  —  1,100  —  —   —  687 
    Gain on sale of MSR —  —  —  (2,960) —   —  — 
    Restructuring charges —  —  —  —  1,187   —  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  (264)  (4,568) (315)
    Adjusted net income (non-GAAP)$46,728 $46,078 $50,324 $44,233 $40,601  $92,591 $74,329 
    Amortization of intangibles 1,369  1,426  1,195  1,251  1,310   2,795  2,676 
    Tax effect of adjustments noted above(1) (266) (299) (260) (265) (291)  (569) (594)
    Adjusted tangible net income (non-GAAP)$47,831 $47,205 $51,259 $45,219 $41,620  $94,817 $76,411 
    Tangible Assets and Tangible Shareholders’ Equity      
    Average shareholders’ equity (GAAP)$2,217,708 $2,186,794 $2,139,095 $2,173,408 $2,177,537  $2,202,336 $2,213,424 
    Average intangible assets 1,013,811  1,011,557  967,005  967,154  968,441   1,012,690  966,956 
    Average tangible shareholders’ equity (non-GAAP)$1,203,897 $1,175,237 $1,172,090 $1,206,254 $1,209,096  $1,189,646 $1,246,468 
             
    Average assets (GAAP)$17,337,924 $17,157,898 $16,577,840 $16,645,481 $16,631,290  $17,248,408 $16,664,480 
    Average intangible assets 1,013,811  1,011,557  967,005  967,154  968,441   1,012,690  966,956 
    Average tangible assets (non-GAAP)$16,324,113 $16,146,341 $15,610,835 $15,678,327 $15,662,849  $16,235,718 $15,697,524 
             
    Shareholders’ equity (GAAP)$2,208,628 $2,187,300 $2,136,016 $2,092,281 $2,116,877  $2,208,628 $2,116,877 
    Intangible assets 1,013,046  1,014,415  1,015,884  966,461  967,713   1,013,046  967,713 
    Tangible shareholders’ equity (non-GAAP)$1,195,582 $1,172,885 $1,120,132 $1,125,820 $1,149,164  $1,195,582 $1,149,164 
             
    Total assets (GAAP)$17,224,342 $17,474,083 $16,988,176 $16,471,099 $16,618,101  $17,224,342 $16,618,101 
    Intangible assets 1,013,046  1,014,415  1,015,884  966,461  967,713   1,013,046  967,713 
    Total tangible assets (non-GAAP)$16,211,296 $16,459,668 $15,972,292 $15,504,638 $15,650,388  $16,211,296 $15,650,388 
             
    Adjusted Performance Ratios        
    Return on average assets (GAAP) 0.66% 1.09% 1.11% 1.11% 0.96%  0.87% 0.89%
    Adjusted return on average assets (non-GAAP) 1.08  1.09  1.20  1.05  0.98   1.08  0.90 
    Return on average tangible assets (non-GAAP) 0.73  1.19  1.20  1.20  1.04   0.96  0.97 
    Adjusted pre-provision net revenue to average assets (non-GAAP) 1.38  1.51  1.73  1.60  1.31   1.44  1.17 
    Adjusted return on average tangible assets (non-GAAP) 1.18  1.19  1.30  1.14  1.07   1.18  0.98 
    Return on average equity (GAAP) 5.18  8.55  8.58  8.50  7.31   6.84  6.67 
    Adjusted return on average equity (non-GAAP) 8.45  8.55  9.33  8.07  7.48   8.48  6.77 
    Return on average tangible equity (non-GAAP) 9.91  16.29  15.98  15.64  13.50   13.04  12.18 
    Adjusted return on average tangible equity (non-GAAP) 15.94  16.29  17.35  14.87  13.81   16.07  12.36 
             
    Adjusted Diluted Earnings Per Share      
    Average diluted shares outstanding 56,395,653  56,270,219  56,335,446  56,248,720  56,182,845   56,330,295  56,130,762 
             
    Diluted earnings per share (GAAP)$0.51 $0.82 $0.82 $0.83 $0.71  $1.33 $1.30 
    Adjusted diluted earnings per share (non-GAAP)$0.83 $0.82 $0.89 $0.79 $0.72  $1.64 $1.32 
             
    Tangible Book Value Per Share        
    Shares outstanding 56,132,478  56,073,658  55,953,104  55,953,104  55,932,017   56,132,478  55,932,017 
             
    Book value per share (GAAP)$39.35 $39.01 $38.18 $37.39 $37.85  $39.35 $37.85 
    Tangible book value per share (non-GAAP)$21.30 $20.92 $20.02 $20.12 $20.55  $21.30 $20.55 
             
    Tangible Common Equity Ratio        
    Shareholders’ equity to assets (GAAP) 12.82% 12.52% 12.57% 12.70% 12.74%  12.82% 12.74%
    Tangible common equity ratio (non-GAAP) 7.37% 7.13% 7.01% 7.26% 7.34%  7.37% 7.34%
    Adjusted Efficiency Ratio        
    Net interest income (FTE) (GAAP)$133,085 $138,529 $140,565 $132,435 $115,321  $271,614 $216,704 
             
    Total noninterest income (GAAP)$17,226 $37,293 $33,395 $41,186 $37,214  $54,519 $74,672 
    Gain on sale of MSR —  —  —  2,960  —   —  — 
    Losses on security sales (22,438) —  —  —  —   (22,438) — 
    Total adjusted noninterest income (non-GAAP)$39,664 $37,293 $33,395 $38,226 $37,214  $76,957 $74,672 
             
    Noninterest expense (GAAP)$109,165 $107,708 $101,582 $101,574 $98,194  $216,873 $192,299 
    Amortization of intangibles 1,369  1,426  1,195  1,251  1,310   2,795  2,676 
    Merger and conversion expense —  —  1,100  —  —   —  687 
    Restructuring charges —  —  —  —  1,187   —  732 
    Voluntary reimbursement of certain re-presentment NSF fees —  —  1,255  —  —   —  — 
    (Recovery of) provision for unfunded commitments (1,000) (1,500) 183  —  450   (2,500) (100)
    Total adjusted noninterest expense (non-GAAP)$108,796 $107,782 $97,849 $100,323 $95,247  $216,578 $188,304 
             
    Efficiency ratio (GAAP) 72.63% 61.26% 58.39% 58.50% 64.37%  66.50% 66.00%
    Adjusted efficiency ratio (non-GAAP) 62.98% 61.30% 56.25% 58.78% 62.44%  62.13% 64.63%
             
    Core Net Interest Income and Core Net Interest Margin      
    Net interest income (FTE) (GAAP)$133,085 $138,529 $140,565 $132,435 $115,321  $271,614 $216,704 
    Net interest income collected on problem loans 364  392  161  78  2,276   756  2,710 
    Accretion recognized on purchased loans 874  885  625  1,317  2,021   1,759  3,256 
    Non-core net interest income$1,238 $1,277 $786 $1,395 $4,297  $2,515 $5,966 
    Core net interest income (FTE) (non-GAAP)$131,847 $137,252 $139,779 $131,040 $111,024  $269,099 $210,738 
             
    Net interest margin (GAAP) 3.45% 3.66% 3.78% 3.54% 3.11%  3.56% 2.94%
    Core net interest margin (non-GAAP) 3.43% 3.63% 3.76% 3.50% 3.00%  3.53% 2.86%
             
    Core Loan Yield        
    Loan interest income (FTE) (GAAP)$175,549 $163,970 $147,519 $124,614 $107,612  $339,519 $204,613 
    Net interest income collected on problem loans 364  392  161  78  2,276   756  2,710 
    Accretion recognized on purchased loans 874  885  625  1,317  2,021   1,759  3,256 
    Core loan interest income (FTE) (non-GAAP)$174,311 $162,693 $146,733 $123,219 $103,315  $337,004 $198,647 
             
    Loan yield (GAAP) 5.93% 5.68% 5.19% 4.57% 4.12%  5.81% 4.00%
    Core loan yield (non-GAAP) 5.89% 5.64% 5.16% 4.52% 3.96%  5.77% 3.89%

    (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. OxfordJames C. Mabry IV
     Senior Vice PresidentExecutive Vice President
     Chief Marketing OfficerChief Financial Officer
     (662) 680-1219(662) 680-1281

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