Renasant Corporation Announces Earnings for the Third Quarter of 2024, Receipt of Shareholder Approval of the Merger With the First Bancshares, Inc.

GlobeNewsWire
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TUPELO, Miss., Oct. 22, 2024 (GLOBE NEWSWIRE) -- Renasant Corporation (NYSE: RNST) (the “Company”) today announced earnings results for the third quarter of 2024.

(Dollars in thousands, except earnings per share)Three Months Ended Nine Months Ended
 Sep 30, 2024Jun 30, 2024Sep 30, 2023 Sep 30, 2024Sep 30, 2023
Net income and earnings per share:      
Net income$72,455$38,846$41,833 $150,710$116,554 
After-tax gain on sale of insurance agency 38,951 — —  38,951 — 
After-tax loss on sale of securities (including impairments) — — —  — (17,859)
Basic EPS 1.18 0.69 0.75  2.60 2.08 
Diluted EPS 1.18 0.69 0.74  2.59 2.07 
Adjusted diluted EPS (Non-GAAP)(1) 0.70 0.69 0.74  2.03 2.38 
Impact to diluted EPS from after-tax gain on sale of insurance agency 0.63 — —  0.67 — 
Impact to diluted EPS from after-tax loss on sale of securities (including impairments) — — —  — (0.31)


“The financial results for the quarter reflect solid performance and balance sheet strength,” remarked C. Mitchell Waycaster, Chief Executive Officer of the Company. “We were pleased to receive shareholder approval today and look forward to completing our merger with The First in the first half of 2025, pending all required regulatory approvals and satisfaction of all other conditions.”

Quarterly Highlights

Merger Agreement with The First Bancshares, Inc. and Other Transactions

  • On July 29, 2024, the Company announced its merger with The First Bancshares, Inc. (“The First”). Today, the shareholders of both Renasant and The First approved the merger and the related issuance of shares of Renasant common stock to the shareholders of The First
  • On July 31, 2024, Renasant completed its public offering of an aggregate of 7,187,500 shares of its common stock at a price of $32.00 per share. The net proceeds of the offering after deducting underwriting discounts and other offering expenses were approximately $217.0 million
  • Effective July 1, 2024, Renasant sold the assets of its insurance agency for cash proceeds of $56.4 million, recognizing a positive after-tax impact to earnings of $34.1 million, which is net of transaction expenses

Earnings

  • Net income for the third quarter of 2024 was $72.5 million; diluted EPS and adjusted diluted EPS (non-GAAP)(1) were $1.18 and $0.70, respectively
  • Net interest income (fully tax equivalent) for the third quarter of 2024 was $133.6 million, up $6.0 million on a linked quarter basis
  • For the third quarter of 2024, net interest margin was 3.36%, up 5 basis points on a linked quarter basis
  • Cost of total deposits was 2.51% for the third quarter of 2024, up 4 basis points on a linked quarter basis
  • Noninterest income increased $50.5 million on a linked quarter basis primarily due to the $53.3 million pre-tax gain on the insurance agency sale, offset by the loss of insurance commissions as a result of the sale
  • Mortgage banking income decreased $1.3 million on a linked quarter basis. The mortgage division generated $543.6 million in interest rate lock volume in the third quarter of 2024, a decrease of $16.7 million on a linked quarter basis. Gain on sale margin was 1.56% for the third quarter of 2024, down 13 basis points on a linked quarter basis
  • Noninterest expense increased $10.0 million on a linked quarter basis. Merger and conversion expenses of $11.3 million for the third quarter of 2024 related to both the announced merger with The First and the insurance agency sale contributed to the increase

Balance Sheet

  • Loans increased $22.9 million on a linked quarter basis, representing 0.7% annualized net loan growth
  • Securities decreased $9.0 million on a linked quarter basis. Cash flows related to principal payments reduced securities by $43.4 million which was offset by a positive fair market value adjustment in our available-for-sale portfolio of $34.4 million
  • Deposits at September 30, 2024 increased $254.5 million on a linked quarter basis. Brokered deposits decreased $31.8 million on a linked quarter basis to $126.8 million at September 30, 2024. Noninterest bearing deposits decreased $9.7 million on a linked quarter basis and represented 24.3% of total deposits at September 30, 2024

Capital and Stock Repurchase Program

  • Book value per share and tangible book value per share (non-GAAP)(1) increased 0.1% and 8.9%, respectively, on a linked quarter basis
  • Effective October 22, 2024, the Company’s Board of Directors approved a $100.0 million stock repurchase program under which the Company is authorized to repurchase outstanding shares of its common stock either in open market purchases or privately-negotiated transactions. This plan replaces the Company’s $100.0 million stock repurchase program that expired in October 2024. There was no buyback activity during the third quarter of 2024

Credit Quality

  • The Company recorded a provision for credit losses of $0.9 million for the third quarter of 2024, compared to $3.3 million for the second quarter of 2024
  • The ratio of allowance for credit losses on loans to total loans was 1.59% at September 30, 2024, unchanged on a linked quarter basis
  • The coverage ratio, or the allowance for credit losses on loans to nonperforming loans, was 168.07% at September 30, 2024, compared to 203.88% at June 30, 2024
  • Net loan charge-offs for the third quarter of 2024 were $0.7 million, or 0.02% of average loans on an annualized basis
  • Nonperforming loans to total loans increased to 0.94% at September 30, 2024 compared to 0.78% at June 30, 2024, and criticized loans (which include classified and Special Mention loans) to total loans increased to 3.02% at September 30, 2024, compared to 2.62% at June 30, 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 Nine Months Ended
 Sep 30, 2024Jun 30, 2024Mar 31, 2024Dec 31, 2023Sep 30, 2023 Sep 30, 2024Sep 30, 2023
Interest income        
Loans held for investment$202,655 $198,397 $192,390 $188,535$181,129  $593,442 $516,114 
Loans held for sale 4,212  3,530  2,308  3,329 3,751   10,050  8,478 
Securities 10,304  10,410  10,700  10,728 10,669   31,414  39,760 
Other 11,872  7,874  7,781  7,839 10,128   27,527  22,536 
Total interest income 229,043  220,211  213,179  210,431 205,677   662,433  586,888 
Interest expense        
Deposits 90,787  87,621  82,613  77,168 70,906   261,021  155,163 
Borrowings 7,258  7,564  7,276  7,310 7,388   22,098  38,351 
Total interest expense 98,045  95,185  89,889  84,478 78,294   283,119  193,514 
Net interest income 130,998  125,026  123,290  125,953 127,383   379,314  393,374 
Provision for credit losses        
Provision for loan losses 1,210  4,300  2,638  2,518 5,315   8,148  16,275 
Recovery of unfunded commitments (275) (1,000) (200) — (700)  (1,475) (3,200)
Total provision for credit losses 935  3,300  2,438  2,518 4,615   6,673  13,075 
Net interest income after provision for credit losses 130,063  121,726  120,852  123,435 122,768   372,641  380,299 
Noninterest income 89,299  38,762  41,381  20,356 38,200   169,442  92,719 
Noninterest expense 121,983  111,976  112,912  111,880 108,369   346,871  327,742 
Income before income taxes 97,379  48,512  49,321  31,911 52,599   195,212  145,276 
Income taxes 24,924  9,666  9,912  3,787 10,766   44,502  28,722 
Net income$72,455 $38,846 $39,409 $28,124$41,833  $150,710 $116,554 
         
Adjusted net income (non-GAAP)(1)$42,960 $38,846 $36,572 $42,887$41,833  $118,588 $134,413 
Adjusted pre-provision net revenue (“PPNR”) (non-GAAP)(1)$56,238 $51,812 $48,231 $52,614$57,214  $156,281 $180,789 
         
Basic earnings per share$1.18 $0.69 $0.70 $0.50$0.75  $2.60 $2.08 
Diluted earnings per share 1.18  0.69  0.70  0.50 0.74   2.59  2.07 
Adjusted diluted earnings per share (non-GAAP)(1) 0.70  0.69  0.65  0.76 0.74   2.03  2.38 
Average basic shares outstanding 61,217,094  56,342,909  56,208,348  56,141,628 56,138,618   57,934,806  56,085,556 
Average diluted shares outstanding 61,632,448  56,684,626  56,531,078  56,611,217 56,523,887   58,297,554  56,393,957 
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, 2024Jun 30, 2024Mar 31, 2024Dec 31, 2023Sep 30, 2023 Sep 30, 2024Sep 30, 2023
Return on average assets1.63%0.90%0.92%0.65%0.96% 1.16%0.90%
Adjusted return on average assets (non-GAAP)(1)0.97 0.90 0.86 0.99 0.96  0.91 1.04 
Return on average tangible assets (non-GAAP)(1)1.75 0.98 1.00 0.71 1.05  1.25 0.99 
Adjusted return on average tangible assets (non-GAAP)(1)1.05 0.98 0.93 1.08 1.05  0.99 1.13 
Return on average equity11.29 6.68 6.85 4.93 7.44  8.38 7.04 
Adjusted return on average equity (non-GAAP)(1)6.69 6.68 6.36 7.53 7.44  6.59 8.12 
Return on average tangible equity (non-GAAP)(1)18.83 12.04 12.45 9.26 13.95  14.69 13.35 
Adjusted return on average tangible equity (non-GAAP)(1)11.26 12.04 11.58 13.94 13.95  11.61 15.35 
Efficiency ratio (fully taxable equivalent)54.73 67.31 67.52 75.11 64.38  62.33 66.28 
Adjusted efficiency ratio (non-GAAP)(1)64.62 66.60 68.23 66.18 63.60  66.46 62.61 
Dividend payout ratio18.64 31.88 31.43 44.00 29.33  25.38 31.73 


Capital and Balance Sheet Ratios

 As of
 Sep 30, 2024Jun 30, 2024Mar 31, 2024Dec 31, 2023Sep 30, 2023
Shares outstanding 63,564,028  56,367,924  56,304,860  56,142,207  56,140,713 
Market value per share$32.50 $30.54 $31.32 $33.68 $26.19 
Book value per share 41.82  41.77  41.25  40.92  39.78 
Tangible book value per share (non-GAAP)(1) 26.02  23.89  23.32  22.92  21.76 
Shareholders’ equity to assets 14.80% 13.45% 13.39% 13.23% 13.00%
Tangible common equity ratio (non-GAAP)(1) 9.76  8.16  8.04  7.87  7.55 
Leverage ratio 11.32  9.81  9.75  9.62  9.48 
Common equity tier 1 capital ratio 12.88  10.75  10.59  10.52  10.46 
Tier 1 risk-based capital ratio 13.67  11.53  11.37  11.30  11.25 
Total risk-based capital ratio 17.32  15.15  15.00  14.93  14.91 

(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, 2024Jun 30, 2024Mar 31, 2024Dec 31, 2023Sep 30, 2023 Sep 30, 2024Sep 30, 2023
Noninterest income        
Service charges on deposit accounts$10,438$10,286$10,506$10,603 $9,743  $31,230$28,596 
Fees and commissions 4,116 3,944 3,949 4,130  4,108   12,009 13,771 
Insurance commissions — 2,758 2,716 2,583  3,264   5,474 8,519 
Wealth management revenue 5,835 5,684 5,669 5,668  5,986   17,188 16,464 
Mortgage banking income 8,447 9,698 11,370 6,592  7,533   29,515 25,821 
Gain on sale of insurance agency 53,349 — — —  —   53,349 — 
Net losses on sales of securities (including impairments) — — — (19,352) —   — (22,438)
Gain on extinguishment of debt — — 56 620  —   56 — 
BOLI income 2,858 2,701 2,691 2,589  2,469   8,250 7,874 
Other 4,256 3,691 4,424 6,923  5,097   12,371 14,112 
Total noninterest income$89,299$38,762$41,381$20,356 $38,200  $169,442$92,719 
Noninterest expense        
Salaries and employee benefits$71,307$70,731$71,470$71,841 $69,458  $213,508$209,927 
Data processing 4,133 3,945 3,807 3,971  3,907   11,885 11,224 
Net occupancy and equipment 11,415 11,844 11,389 11,653  11,548   34,648 34,818 
Other real estate owned 56 105 107 306  (120)  268 (39)
Professional fees 3,189 3,195 3,348 2,854  3,338   9,732 10,817 
Advertising and public relations 3,677 3,807 4,886 3,084  3,474   12,370 11,642 
Intangible amortization 1,160 1,186 1,212 1,274  1,311   3,558 4,106 
Communications 2,176 2,112 2,024 2,026  2,006   6,312 6,212 
Merger and conversion related expenses 11,273 — — —  —   11,273 — 
Other 13,597 15,051 14,669 14,871  13,447   43,317 39,035 
Total noninterest expense$121,983$111,976$112,912$111,880 $108,369  $346,871$327,742 


Mortgage Banking Income

(Dollars in thousands)Three Months Ended Nine Months Ended
 Sep 30, 2024Jun 30, 2024Mar 31, 2024Dec 31, 2023Sep 30, 2023 Sep 30, 2024Sep 30, 2023
Gain on sales of loans, net$4,499$5,199$4,535$1,860$3,297 $14,233$12,713
Fees, net 2,646 2,866 1,854 2,010 2,376  7,366 7,041
Mortgage servicing income, net 1,302 1,633 4,981 2,722 1,860  7,916 6,067
Total mortgage banking income$8,447$9,698$11,370$6,592$7,533 $29,515$25,821


Balance Sheet

(Dollars in thousands)As of
 Sep 30, 2024Jun 30, 2024Mar 31, 2024Dec 31, 2023Sep 30, 2023
Assets     
Cash and cash equivalents$1,275,620 $851,906 $844,400 $801,351 $741,156 
Securities held to maturity, at amortized cost 1,150,531  1,174,663  1,199,111  1,221,464  1,245,595 
Securities available for sale, at fair value 764,844  749,685  764,486  923,279  909,108 
Loans held for sale, at fair value 291,735  266,406  191,440  179,756  241,613 
Loans held for investment 12,627,648  12,604,755  12,500,525  12,351,230  12,168,023 
Allowance for credit losses on loans (200,378) (199,871) (201,052) (198,578) (197,773)
Loans, net 12,427,270  12,404,884  12,299,473  12,152,652  11,970,250 
Premises and equipment, net 280,550  280,966  282,193  283,195  284,368 
Other real estate owned 9,136  7,366  9,142  9,622  9,258 
Goodwill and other intangibles 1,004,136  1,008,062  1,009,248  1,010,460  1,011,735 
Bank-owned life insurance 389,138  387,791  385,186  382,584  379,945 
Mortgage servicing rights 71,990  72,092  71,596  91,688  90,241 
Other assets 293,890  306,570  289,466  304,484  298,352 
Total assets$17,958,840 $17,510,391 $17,345,741 $17,360,535 $17,181,621 
      
Liabilities and Shareholders’ Equity     
Liabilities     
Deposits:     
Noninterest-bearing$3,529,801 $3,539,453 $3,516,164 $3,583,675 $3,734,197 
Interest-bearing 10,979,950  10,715,760  10,720,999  10,493,110  10,422,913 
Total deposits 14,509,751  14,255,213  14,237,163  14,076,785  14,157,110 
Short-term borrowings 108,732  232,741  108,121  307,577  107,662 
Long-term debt 433,177  428,677  428,047  429,400  427,399 
Other liabilities 249,102  239,059  250,060  249,390  256,127 
Total liabilities 15,300,762  15,155,690  15,023,391  15,063,152  14,948,298 
      
Shareholders’ equity:     
Common stock 332,421  296,483  296,483  296,483  296,483 
Treasury stock (97,251) (97,534) (99,683) (105,249) (105,300)
Additional paid-in capital 1,488,678  1,304,782  1,303,613  1,308,281  1,304,891 
Retained earnings 1,063,324  1,005,086  978,880  952,124  936,573 
Accumulated other comprehensive loss (129,094) (154,116) (156,943) (154,256) (199,324)
Total shareholders’ equity 2,658,078  2,354,701  2,322,350  2,297,383  2,233,323 
Total liabilities and shareholders’ equity$17,958,840 $17,510,391 $17,345,741 $17,360,535 $17,181,621 


Net Interest Income and Net Interest Margin

(Dollars in thousands)Three Months Ended
 September 30, 2024June 30, 2024September 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$12,584,104$204,9356.47%$12,575,651$200,6706.41%$12,030,109$183,5216.06%
Loans held for sale 272,110 4,2126.19% 219,826 3,5306.42% 227,982 3,7516.58%
Taxable securities 1,794,421 9,2122.05% 1,832,002 9,2582.02% 2,097,285 9,4591.80%
Tax-exempt securities(1) 262,621 1,3902.12% 263,937 1,4512.20% 285,588 1,5662.19%
Total securities 2,057,042 10,6022.06% 2,095,939 10,7092.04% 2,382,873 11,0251.85%
Interest-bearing balances with banks 894,313 11,8725.28% 595,030 7,8745.32% 729,049 10,1285.51%
Total interest-earning assets 15,807,569 231,6215.82% 15,486,446 222,7835.77% 15,370,013 208,4255.39%
Cash and due from banks 189,425   187,519   180,708  
Intangible assets 1,004,701   1,008,638   1,012,460  
Other assets 679,901   688,766   672,232  
Total assets$17,681,596  $17,371,369  $17,235,413  
Interest-bearing liabilities:         
Interest-bearing demand(2)$7,333,508$60,3263.26%$7,094,411$56,1323.17%$6,520,145$41,4642.52%
Savings deposits 815,545 7290.36% 839,638 7290.35% 942,619 7930.33%
Brokered deposits 150,991 1,9985.25% 294,650 3,9445.37% 947,387 12,7325.33%
Time deposits 2,546,860 27,7344.33% 2,487,873 26,8164.34% 2,002,506 15,9173.15%
Total interest-bearing deposits 10,846,904 90,7873.32% 10,716,572 87,6213.28% 10,412,657 70,9062.70%
Borrowed funds 562,146 7,2585.14% 583,965 7,5645.19% 564,772 7,3885.22%
Total interest-bearing liabilities 11,409,050 98,0453.41% 11,300,537 95,1853.38% 10,977,429 78,2942.84%
Noninterest-bearing deposits 3,509,266   3,509,109   3,800,160  
Other liabilities 209,763   223,992   226,219  
Shareholders’ equity 2,553,517   2,337,731   2,231,605  
Total liabilities and shareholders’ equity$17,681,596  $17,371,369  $17,235,413  
Net interest income/ net interest margin $133,5763.36% $127,5983.31% $130,1313.36%
Cost of funding  2.61%  2.58%  2.11%
Cost of total deposits  2.51%  2.47%  1.98%

(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, 2024September 30, 2023
 Average
Balance		Interest
Income/
Expense		Yield/  
 Rate		Average
Balance		Interest
Income/
Expense		Yield/  
 Rate
Interest-earning assets:      
Loans held for investment$12,522,802$600,2456.39%$11,866,662$523,0405.89%
Loans held for sale 215,978 10,0506.20% 175,100 8,4786.46%
Taxable securities(1) 1,839,249 27,9752.03% 2,402,739 35,1291.95%
Tax-exempt securities 265,601 4,3462.18% 349,617 6,0762.32%
Total securities 2,104,850 32,3212.05% 2,752,356 41,2052.00%
Interest-bearing balances with banks 687,318 27,5275.35% 573,498 22,5365.25%
Total interest-earning assets 15,530,948 670,1435.75% 15,367,616 595,2595.18%
Cash and due from banks 188,485   189,324  
Intangible assets 1,007,710   1,012,613  
Other assets 694,427   674,476  
Total assets$17,421,570  $17,244,029  
Interest-bearing liabilities:      
Interest-bearing demand(2)$7,128,721$168,9583.16%$6,235,322$90,9471.95%
Savings deposits 838,443 2,1880.35% 999,436 2,4320.33%
Brokered deposits 296,550 11,9295.36% 719,603 27,4455.10%
Time deposits 2,451,733 77,9464.25% 1,769,246 34,3392.59%
Total interest-bearing deposits 10,715,447 261,0213.25% 9,723,607 155,1632.13%
Borrowed funds 569,476 22,0985.17% 1,026,467 38,3514.99%
Total interest-bearing liabilities 11,284,923 283,1193.35% 10,750,074 193,5142.41%
Noninterest-bearing deposits 3,512,318   4,073,265  
Other liabilities 221,932   208,491  
Shareholders’ equity 2,402,397   2,212,199  
Total liabilities and shareholders’ equity$17,421,570  $17,244,029  
Net interest income/ net interest margin $387,0243.32% $401,7453.49%
Cost of funding  2.55%  1.75%
Cost of total deposits  2.45%  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.


Supplemental Margin Information

(Dollars in thousands)Three Months Ended Nine Months Ended
 Sep 30, 2024Jun 30, 2024Sep 30, 2023 Sep 30, 2024Sep 30, 2023
Earning asset mix:      
Loans held for investment 79.61% 81.20% 78.27%  80.63% 77.22%
Loans held for sale 1.72  1.42  1.48   1.39  1.14 
Securities 13.01  13.53  15.50   13.55  17.91 
Interest-bearing balances with banks 5.66  3.85  4.75   4.43  3.73 
Total 100.00% 100.00% 100.00%  100.00% 100.00%
       
Funding sources mix:      
Noninterest-bearing demand 23.52% 23.69% 25.72%  23.74% 27.48%
Interest-bearing demand(1) 49.16  47.90  44.12   48.18  42.06 
Savings 5.47  5.67  6.38   5.67  6.74 
Brokered deposits 1.01  1.99  6.41   2.00  4.85 
Time deposits 17.07  16.80  13.55   16.57  11.94 
Borrowed funds 3.77  3.95  3.82   3.84  6.93 
Total 100.00% 100.00% 100.00%  100.00% 100.00%
       
Net interest income collected on problem loans$642 $(146)$(820) $619 $(64)
Total accretion on purchased loans 1,089  897  1,290   2,786  3,049 
Total impact on net interest income$1,731 $751 $470  $3,405 $2,985 
Impact on net interest margin 0.04% 0.02% 0.01%  0.03% 0.03%
Impact on loan yield 0.05  0.02  0.02   0.04% 0.03%

(1) Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.


Loan Portfolio

(Dollars in thousands)As of
 Sep 30, 2024Jun 30, 2024Mar 31, 2024Dec 31, 2023Sep 30, 2023
Loan Portfolio:     
Commercial, financial, agricultural$1,804,961$1,847,762$1,869,408$1,871,821$1,819,891
Lease financing 98,159 102,996 107,474 116,020 120,724
Real estate - construction 1,198,838 1,355,425 1,243,535 1,333,397 1,407,364
Real estate - 1-4 family mortgages 3,440,038 3,435,818 3,429,286 3,439,919 3,398,876
Real estate - commercial mortgages 5,995,152 5,766,478 5,753,230 5,486,550 5,313,166
Installment loans to individuals 90,500 96,276 97,592 103,523 108,002
Total loans$12,627,648$12,604,755$12,500,525$12,351,230$12,168,023


Credit Quality and Allowance for Credit Losses on Loans

(Dollars in thousands)As of
 Sep 30, 2024Jun 30, 2024Mar 31, 2024Dec 31, 2023Sep 30, 2023
Nonperforming Assets:     
Nonaccruing loans$113,872 $97,795 $73,774 $68,816 $69,541 
Loans 90 days or more past due 5,351  240  451  554  532 
Total nonperforming loans 119,223  98,035  74,225  69,370  70,073 
Other real estate owned 9,136  7,366  9,142  9,622  9,258 
Total nonperforming assets$128,359 $105,401 $83,367 $78,992 $79,331 
      
Criticized Loans     
Classified loans$218,135 $191,595 $206,502 $166,893 $186,052 
Special Mention loans 163,804  138,343  138,366  99,699  89,858 
Criticized loans(1)$381,939 $329,938 $344,868 $266,592 $275,910 
      
Allowance for credit losses on loans$200,378 $199,871 $201,052 $198,578 $197,773 
Net loan charge-offs$703 $5,481 $164 $1,713 $1,933 
Annualized net loan charge-offs / average loans 0.02% 0.18% 0.01% 0.06% 0.06%
Nonperforming loans / total loans 0.94  0.78  0.59  0.56  0.58 
Nonperforming assets / total assets 0.71  0.60  0.48  0.46  0.46 
Allowance for credit losses on loans / total loans 1.59  1.59  1.61  1.61  1.63 
Allowance for credit losses on loans / nonperforming loans 168.07  203.88  270.87  286.26  282.24 
Criticized loans / total loans 3.02  2.62  2.76  2.16  2.27 

(1) Criticized loans include classified and Special Mention loans.


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 23, 2024.

The webcast is accessible through Renasant’s investor relations website at www.renasant.com or https://event.choruscall.com/mediaframe/webcast.html?webcastid=YvWBKrUB. To access the conference via telephone, dial 1-877-513-1143 in the United States and request the Renasant Corporation 2024 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 8626805 or by dialing 1-412-317-0088 internationally and entering the same conference number. Telephone replay access is available until November 6, 2024.

ABOUT RENASANT CORPORATION:
Renasant Corporation is the parent of Renasant Bank, a 120-year-old financial services institution. Renasant has assets of approximately $18.0 billion and operates 186 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 (including its recently-announced acquisition of The First Bancshares, Inc. described under the “Quarterly Highlights” heading above) 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 (including the possibility that such cost savings will not be realized when expected, or at all, as a result of the impact of, or challenges arising from, the integration of the acquired assets and assumed liabilities into the Company, potential adverse reactions or changes to business or employee relationships, or as a result of other unexpected factors or events); (ii) potential exposure to unknown or contingent risks and liabilities we have acquired, or may acquire, or target for acquisition, including in connection with the proposed merger with The First Bancshares, Inc.; (iii) the effect of economic conditions and interest rates on a national, regional or international basis; (iv) timing and success of the implementation of changes in operations to achieve enhanced earnings or effect cost savings; (v) competitive pressures in the consumer finance, commercial finance, financial services, asset management, retail banking, factoring and mortgage lending and auto lending industries; (vi) the financial resources of, and products available from, competitors; (vii) changes in laws and regulations as well as changes in accounting standards; (viii) changes in policy by regulatory agencies or increased scrutiny by, and/or additional regulatory requirements of, regulatory agencies as a result of our proposed merger with The First Bancshares, Inc.; (ix) changes in the securities and foreign exchange markets; (x) the Company’s potential growth, including its entrance or expansion into new markets, and the need for sufficient capital to support that growth; (xi) 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; (xii) an insufficient allowance for credit losses as a result of inaccurate assumptions; (xiii) 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; (xiv) general economic, market or business conditions, including the impact of inflation; (xv) changes in demand for loan and deposit products and other financial services; (xvi) concentrations of credit or deposit exposure; (xvii) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships; (xviii) increased cybersecurity risk, including potential network breaches, business disruptions or financial losses; (xix) civil unrest, natural disasters, epidemics and other catastrophic events in the Company’s geographic area; (xx) geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism and/or military conflicts, which could impact business and economic conditions in the United States and abroad; (xxi) the impact, extent and timing of technological changes; and (xxii) 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 (such as, for the third quarter of 2024, merger and conversion expenses and the gain on the sale of the assets of the Company’s insurance agency), 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 Nine Months Ended
 Sep 30, 2024Jun 30, 2024Mar 31, 2024Dec 31, 2023Sep 30, 2023 Sep 30, 2024Sep 30, 2023
Adjusted Pre-Provision Net Revenue (“PPNR”)      
Net income (GAAP)$72,455 $38,846 $39,409 $28,124 $41,833  $150,710 $116,554 
Income taxes 24,924  9,666  9,912  3,787  10,766   44,502  28,722 
Provision for credit losses (including unfunded commitments) 935  3,300  2,438  2,518  4,615   6,673  13,075 
Pre-provision net revenue (non-GAAP)$98,314 $51,812 $51,759 $34,429 $57,214  $201,885 $158,351 
Merger and conversion expense 11,273  —  —  —  —   11,273  — 
Gain on extinguishment of debt —  —  (56) (620) —   (56) — 
Gain on sales of MSR —  —  (3,472) (547) —   (3,472) — 
Gain on sale of insurance agency (53,349) —  —  —  —   (53,349) — 
Losses on sales of securities (including impairments) —  —  —  19,352  —   —  22,438 
Adjusted pre-provision net revenue (non-GAAP)$56,238 $51,812 $48,231 $52,614 $57,214  $156,281 $180,789 
         
Adjusted Net Income and Adjusted Tangible Net Income      
Net income (GAAP)$72,455 $38,846 $39,409 $28,124 $41,833  $150,710 $116,554 
Amortization of intangibles 1,160  1,186  1,212  1,274  1,311   3,558  4,106 
Tax effect of adjustments noted above(1) (296) (233) (237) (240) (269)  (909) (838)
Tangible net income (non-GAAP)$73,319 $39,799 $40,384 $29,158 $42,875  $153,359 $119,822 
         
Net income (GAAP)$72,455 $38,846 $39,409 $28,124 $41,833  $150,710 $116,554 
Merger and conversion expense 11,273  —  —  —  —   11,273  — 
Gain on extinguishment of debt —  —  (56) (620) —   (56) — 
Gain on sales of MSR —  —  (3,472) (547) —   (3,472) — 
Gain on sale of insurance agency (53,349) —  —  —  —   (53,349) — 
Losses on sales of securities (including impairments) —  —  —  19,352  —   —  22,438 
Tax effect of adjustments noted above(1) 12,581  —  691  (3,422) —   13,482  (4,579)
Adjusted net income (non-GAAP)$42,960 $38,846 $36,572 $42,887 $41,833  $118,588 $134,413 
Amortization of intangibles 1,160  1,186  1,212  1,274  1,311   3,558  4,106 
Tax effect of adjustments noted above(1) (296) (233) (237) (240) (269)  (909) (838)
Adjusted tangible net income (non-GAAP)$43,824 $39,799 $37,547 $43,921 $42,875  $121,237 $137,681 
Tangible Assets and Tangible Shareholders’ Equity      
Average shareholders’ equity (GAAP)$2,553,517 $2,337,731 $2,314,281 $2,261,025 $2,231,605  $2,402,397 $2,212,199 
Average intangible assets 1,004,701  1,008,638  1,009,825  1,011,130  1,012,460   1,007,710  1,012,613 
Average tangible shareholders’ equity (non-GAAP)$1,548,816 $1,329,093 $1,304,456 $1,249,895 $1,219,145  $1,394,687 $1,199,586 
         
Average assets (GAAP)$17,681,596 $17,371,369 $17,203,013 $17,195,840 $17,235,413  $17,421,570 $17,244,029 
Average intangible assets 1,004,701  1,008,638  1,009,825  1,011,130  1,012,460   1,007,710  1,012,613 
Average tangible assets (non-GAAP)$16,676,895 $16,362,731 $16,193,188 $16,184,710 $16,222,953  $16,413,860 $16,231,416 
         
Shareholders’ equity (GAAP)$2,658,078 $2,354,701 $2,322,350 $2,297,383 $2,233,323  $2,658,078 $2,233,323 
Intangible assets 1,004,136  1,008,062  1,009,248  1,010,460  1,011,735   1,004,136  1,011,735 
Tangible shareholders’ equity (non-GAAP)$1,653,942 $1,346,639 $1,313,102 $1,286,923 $1,221,588  $1,653,942 $1,221,588 
         
Total assets (GAAP)$17,958,840 $17,510,391 $17,345,741 $17,360,535 $17,181,621  $17,958,840 $17,181,621 
Intangible assets 1,004,136  1,008,062  1,009,248  1,010,460  1,011,735   1,004,136  1,011,735 
Total tangible assets (non-GAAP)$16,954,704 $16,502,329 $16,336,493 $16,350,075 $16,169,886  $16,954,704 $16,169,886 
         
Adjusted Performance Ratios        
Return on average assets (GAAP) 1.63% 0.90% 0.92% 0.65% 0.96%  1.16% 0.90%
Adjusted return on average assets (non-GAAP) 0.97  0.90  0.86  0.99  0.96   0.91  1.04 
Return on average tangible assets (non-GAAP) 1.75  0.98  1.00  0.71  1.05   1.25  0.99 
Pre-provision net revenue to average assets (non-GAAP) 2.21  1.20  1.21  0.79  1.32   1.55  1.23 
Adjusted pre-provision net revenue to average assets (non-GAAP) 1.27  1.20  1.13  1.21  1.32   1.20  1.40 
Adjusted return on average tangible assets (non-GAAP) 1.05  0.98  0.93  1.08  1.05   0.99  1.13 
Return on average equity (GAAP) 11.29  6.68  6.85  4.93  7.44   8.38  7.04 
Adjusted return on average equity (non-GAAP) 6.69  6.68  6.36  7.53  7.44   6.59  8.12 
Return on average tangible equity (non-GAAP) 18.83  12.04  12.45  9.26  13.95   14.69  13.35 
Adjusted return on average tangible equity (non-GAAP) 11.26  12.04  11.58  13.94  13.95   11.61  15.35 
         
Adjusted Diluted Earnings Per Share      
Average diluted shares outstanding 61,632,448  56,684,626  56,531,078  56,611,217  56,523,887   58,297,554  56,393,957 
         
Diluted earnings per share (GAAP)$1.18 $0.69 $0.70 $0.50 $0.74  $2.59 $2.07 
Adjusted diluted earnings per share (non-GAAP)$0.70 $0.69 $0.65 $0.76 $0.74  $2.03 $2.38 
         
Tangible Book Value Per Share        
Shares outstanding 63,564,028  56,367,924  56,304,860  56,142,207  56,140,713   63,564,028  56,140,713 
         
Book value per share (GAAP)$41.82 $41.77 $41.25 $40.92 $39.78  $41.82 $39.78 
Tangible book value per share (non-GAAP)$26.02 $23.89 $23.32 $22.92 $21.76  $26.02 $21.76 
         
Tangible Common Equity Ratio        
Shareholders’ equity to assets (GAAP) 14.80% 13.45% 13.39% 13.23% 13.00%  14.80% 13.00%
Tangible common equity ratio (non-GAAP) 9.76% 8.16% 8.04% 7.87% 7.55%  9.76% 7.55%
Adjusted Efficiency Ratio        
Net interest income (FTE) (GAAP)$133,576 $127,598 $125,850 $128,595 $130,131  $387,024 $401,745 
         
Total noninterest income (GAAP)$89,299 $38,762 $41,381 $20,356 $38,200  $169,442 $92,719 
Gain on sales of MSR —  —  3,472  547  —   3,472  — 
Gain on extinguishment of debt —  —  56  620  —   56  — 
Gain on sale of insurance agency 53,349  —  —  —  —   53,349  — 
Losses on sales of securities (including impairments) —  —  —  (19,352) —   —  (22,438)
Total adjusted noninterest income (non-GAAP)$35,950 $38,762 $37,853 $38,541 $38,200  $112,565 $115,157 
         
Noninterest expense (GAAP)$121,983 $111,976 $112,912 $111,880 $108,369  $346,871 $327,742 
Amortization of intangibles 1,160  1,186  1,212  1,274  1,311   3,558  4,106 
Merger and conversion expense 11,273  —  —  —  —   11,273  — 
Total adjusted noninterest expense (non-GAAP)$109,550 $110,790 $111,700 $110,606 $107,058  $332,040 $323,636 
         
Efficiency ratio (GAAP) 54.73% 67.31% 67.52% 75.11% 64.38%  62.33% 66.28%
Adjusted efficiency ratio (non-GAAP) 64.62% 66.60% 68.23% 66.18% 63.60%  66.46% 62.61%
         
Adjusted Net Interest Income and Adjusted Net Interest Margin      
Net interest income (FTE) (GAAP)$133,576 $127,598 $125,850 $128,595 $130,131  $387,024 $401,745 
Net interest income collected on problem loans 642  (146) 123  283  (820)  619  (64)
Accretion recognized on purchased loans 1,089  897  800  1,117  1,290   2,786  3,049 
Adjustments to net interest income$1,731 $751 $923 $1,400 $470  $3,405 $2,985 
Adjusted net interest income (FTE) (non-GAAP)$131,845 $126,847 $124,927 $127,195 $129,661  $383,619 $398,760 
         
Net interest margin (GAAP) 3.36% 3.31% 3.30% 3.33% 3.36%  3.32% 3.49%
Adjusted net interest margin (non-GAAP) 3.32% 3.29% 3.28% 3.29% 3.35%  3.30% 3.47%
         
Adjusted Loan Yield        
Loan interest income (FTE) (GAAP)$204,935 $200,670 $194,640 $190,857 $183,521  $600,245 $523,040 
Net interest income collected on problem loans 642  (146) 123  283  (820)  619  (64)
Accretion recognized on purchased loans 1,089  897  800  1,117  1,290   2,786  3,049 
Adjusted loan interest income (FTE) (non-GAAP)$203,204 $199,919 $193,717 $189,457 $183,051  $596,840 $520,055 
         
Loan yield (GAAP) 6.47% 6.41% 6.30% 6.18% 6.06%  6.39% 5.89%
Adjusted loan yield (non-GAAP) 6.41% 6.38% 6.27% 6.14% 6.04%  6.35% 5.86%

(1) Tax effect is calculated based on the respective legal entity’s appropriate federal and state tax rates (as applicable) for the period, and includes the estimated impact of both current and deferred tax expense. The tax effect of the discrete gain on sale of insurance agency was calculated based on an estimated tax rate of 25.8%.

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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