• Renasant Corporation Announces Earnings For The First Quarter Of 2023

    Source: Nasdaq GlobeNewswire / 25 Apr 2023 16:30:01   America/New_York

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

    (Dollars in thousands, except earnings per share)Three Months Ended
     Mar 31, 2023Dec 31, 2022Mar 31, 2022
    Net income and earnings per share:   
    Net income$46,078$46,276$33,547
    Basic EPS 0.82 0.83 0.60
    Diluted EPS 0.82 0.82 0.60
    Adjusted diluted EPS (Non-GAAP)(1) 0.82 0.89 0.60

    “We continue to focus on safety and soundness in our decision making and believe we are well positioned to service our customers and produce attractive results for our shareholders,” remarked C. Mitchell Waycaster, Renasant President and Chief Executive Officer. “The Company’s granular core funding and strong capital base remain foundations of our bank.”

    Quarterly Highlights

    Earnings

    • Net income for the first quarter of 2023 was $46.1 million with diluted EPS of $0.82
    • Net interest income (fully tax equivalent) for the first quarter of 2023 was $138.5 million, down $2.0 million on a linked quarter basis
    • For the first quarter of 2023, net interest margin was 3.66%, down 12 basis points on a linked quarter basis
    • Cost of total deposits was 99 basis points for the first quarter of 2023, up 47 basis points on a linked quarter basis
    • Notwithstanding the elimination of certain deposit service charges, noninterest income increased $3.9 million on a linked quarter basis primarily due to an increase in mortgage banking income. The Company’s wealth management and insurance lines of business produced steady results during the first quarter of 2023
    • The mortgage division generated $0.6 billion in interest rate lock volume during the first quarter of 2023, compared to $0.5 billion in the fourth quarter of 2022. Gain on sale margin was 1.15% for the first quarter of 2023, down 49 basis points on a linked quarter basis
    • Noninterest expense increased $6.1 million during the first quarter of 2023, primarily due to $2.7 million of expenses related to the operations of Republic Business Credit, acquired on December 30, 2022, lower deferred loan origination fees and a seasonal increase in both payroll taxes and the Company’s match of 401k contributions.

    Balance Sheet

    • Loans increased $188.1 million on a linked quarter basis from December 31, 2022, which represents 6.6% annualized net loan growth
    • The securities portfolio decreased $49.8 million on a linked quarter basis, due to net cash outflows during the quarter of $70.5 million and a positive fair market value adjustment in our available-for-sale portfolio of $20.7 million
    • Deposits at March 31, 2023 increased $425.1 million on a linked quarter basis, driven by an increase in brokered deposits of $623.4 million. Brokered deposits were $856.5 million at March 31, 2023. Noninterest bearing deposits decreased $313.9 million on a linked quarter basis and represented 30.5% of total deposits at March 31, 2023

    Capital and Liquidity

    • Book value per share and tangible book value per share (non-GAAP)(1) increased 2.2% and 4.5%, 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 first quarter of 2023

    Credit Quality

    • The Company recorded a provision for credit losses on loans of $8.0 million and a recovery of credit losses on unfunded commitments (included in noninterest expense) of $1.5 million for the first quarter of 2023
    • The allowance for credit losses on loans to total loans was unchanged on a linked quarter basis at 1.66% at March 31, 2023 and December 31, 2022
    • The coverage ratio, or the allowance for credit losses on loans to nonperforming loans, was 259.39% at March 31, 2023, compared to 337.73% at December 31, 2022
    • Net loan charge-offs for the first quarter of 2023 were $4.7 million, or 0.16% of average loans on an annualized basis
    • Nonperforming loans to total loans increased to 0.64% at March 31, 2023 compared to 0.49% at December 31, 2022 and criticized loans (which include classified and special mention loans) to total loans decreased to 2.44% at March 31, 2023, compared to 2.47% at December 31, 2022

    (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
     Mar 31,
    2023    		Dec 31,
    2022    		Sep 30,
    2022    		Jun 30,
    2022    		Mar 31,
    2022
    Interest income     
    Loans held for investment$161,787$145,360$123,100$106,409$95,829
    Loans held for sale 1,737 1,688 2,075 2,586 2,863
    Securities 15,091 15,241 14,500 12,471 10,835
    Other 5,430 2,777 3,458 1,954 664
    Total interest income 184,045 165,066 143,133 123,420 110,191
    Interest expense     
    Deposits 32,866 17,312 7,241 5,018 5,637
    Borrowings 15,404 9,918 5,574 4,887 4,925
    Total interest expense 48,270 27,230 12,815 9,905 10,562
    Net interest income 135,775 137,836 130,318 113,515 99,629
    Provision for loan losses 7,960 10,488 9,800 2,000 1,500
    Net interest income after provision for credit losses 127,815 127,348 120,518 111,515 98,129
    Noninterest income 37,293 33,395 41,186 37,214 37,458
    Noninterest expense 107,708 101,582 101,574 98,194 94,105
    Income before income taxes 57,400 59,161 60,130 50,535 41,482
    Income taxes 11,322 12,885 13,563 10,857 7,935
    Net income$46,078$46,276$46,567$39,678$33,547
          
    Adjusted net income (non-GAAP)(1)$46,078$50,324$44,233$40,601$33,728
    Adjusted pre-provision net revenue (“PPNR”) (non-GAAP)(1)$63,860$72,187$66,970$54,172$42,664
          
    Basic earnings per share$0.82$0.83$0.83$0.71$0.60
    Diluted earnings per share 0.82 0.82 0.83 0.71 0.60
    Adjusted diluted earnings per share (non-GAAP)(1) 0.82 0.89 0.79 0.72 0.60
    Average basic shares outstanding 56,008,741 55,953,104 55,947,214 55,906,755 55,809,192
    Average diluted shares outstanding 56,270,219 56,335,446 56,248,720 56,182,845 56,081,863
    Cash dividends per common share$0.22$0.22$0.22$0.22$0.22

    (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
     Mar 31, 2023Dec 31, 2022Sep 30, 2022Jun 30, 2022Mar 31, 2022
    Return on average assets1.09%1.11%1.11%0.96%0.81%
    Adjusted return on average assets (non-GAAP)(1)1.09 1.20 1.05 0.98 0.82 
    Return on average tangible assets (non-GAAP)(1)1.19 1.20 1.20 1.04 0.89 
    Adjusted return on average tangible assets (non-GAAP)(1)1.19 1.30 1.14 1.07 0.90 
    Return on average equity8.55 8.58 8.50 7.31 6.05 
    Adjusted return on average equity (non-GAAP)(1)8.55 9.33 8.07 7.48 6.08 
    Return on average tangible equity (non-GAAP)(1)16.29 15.98 15.64 13.50 10.93 
    Adjusted return on average tangible equity (non-GAAP)(1)16.29 17.35 14.87 13.81 10.99 
    Efficiency ratio (fully taxable equivalent)61.26 58.39 58.50 64.37 67.78 
    Adjusted efficiency ratio (non-GAAP)(1)61.30 56.25 58.78 62.44 67.02 
    Dividend payout ratio26.83 26.51 26.51 30.99 36.67 

    Capital and Balance Sheet Ratios

     As of
     Mar 31, 2023Dec 31, 2022Sep 30, 2022Jun 30, 2022Mar 31, 2022
    Shares outstanding 56,073,658  55,953,104  55,953,104  55,932,017  55,880,666 
    Market value per share$30.58 $37.59 $31.28 $28.81 $33.45 
    Book value per share 39.01  38.18  37.39  37.85  38.25 
    Tangible book value per share (non-GAAP)(1) 20.92  20.02  20.12  20.55  20.91 
    Shareholders’ equity to assets 12.52% 12.57% 12.70% 12.74% 12.68%
    Tangible common equity ratio (non-GAAP)(1) 7.13  7.01  7.26  7.34  7.35 
    Leverage ratio 9.18  9.36  9.39  9.16  9.00 
    Common equity tier 1 capital ratio 10.19  10.21  10.64  10.74  10.78 
    Tier 1 risk-based capital ratio 10.98  11.01  11.47  11.60  11.67 
    Total risk-based capital ratio 14.68  14.63  15.15  15.34  15.51 

    (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
     Mar 31, 2023Dec 31, 2022Sep 30, 2022Jun 30, 2022Mar 31, 2022
    Noninterest income     
    Service charges on deposit accounts$9,120$10,445 $10,216$9,734 $9,562 
    Fees and commissions 4,676 4,470  4,148 4,668  3,982 
    Insurance commissions 2,446 2,501  3,108 2,591  2,554 
    Wealth management revenue 5,140 5,237  5,467 5,711  5,924 
    Mortgage banking income 8,517 5,170  12,675 8,316  9,633 
    BOLI income 3,003 2,487  2,296 2,331  2,153 
    Other 4,391 3,085  3,276 3,863  3,650 
    Total noninterest income$37,293$33,395 $41,186$37,214 $37,458 
    Noninterest expense     
    Salaries and employee benefits$69,832$67,372 $66,463$65,580 $62,239 
    Data processing 3,633 3,521  3,526 3,590  4,263 
    Net occupancy and equipment 11,405 11,122  11,266 11,155  11,276 
    Other real estate owned 30 (59) 34 (187) (241)
    Professional fees 3,467 2,856  3,087 2,778  3,151 
    Advertising and public relations 4,686 3,631  3,229 3,406  4,059 
    Intangible amortization 1,426 1,195  1,251 1,310  1,366 
    Communications 1,980 2,028  1,999 1,904  2,027 
    Merger and conversion related expenses — 1,100  — —  687 
    Restructuring charges (benefit) — —  — 1,187  (455)
    Other 11,249 8,816  10,719 7,471  5,733 
    Total noninterest expense$107,708$101,582 $101,574$98,194 $94,105 

    Mortgage Banking Income

    (Dollars in thousands)Three Months Ended
     Mar 31, 2023 Dec 31, 2022  Sep 30, 2022 Jun 30, 2022  Mar 31, 2022 
    Gain on sales of loans, net$4,770$1,003 $5,263$3,490 $6,047 
    Fees, net 1,806 1,849  2,405 3,064  3,053 
    Mortgage servicing income (loss), net 1,941 2,318  5,007 1,762  533 
    Total mortgage banking income$8,517$5,170 $12,675$8,316 $9,633 

    Balance Sheet

    (Dollars in thousands)As of
     Mar 31, 2023Dec 31, 2022Sep 30, 2022Jun 30, 2022Mar 31, 2022
    Assets     
    Cash and cash equivalents$847,697 $575,992 $479,500 $1,010,468 $1,607,493 
    Securities held to maturity, at amortized cost 1,300,240  1,324,040  1,353,502  488,851  487,194 
    Securities available for sale, at fair value 1,507,907  1,533,942  1,569,242  2,528,253  2,405,316 
    Loans held for sale, at fair value 159,318  110,105  144,642  196,598  280,464 
    Loans held for investment 11,766,425  11,578,304  11,105,004  10,603,744  10,313,459 
    Allowance for credit losses on loans (195,292) (192,090) (174,356) (166,131) (166,468)
    Loans, net 11,571,133  11,386,214  10,930,648  10,437,613  10,146,991 
    Premises and equipment, net 287,006  283,595  284,062  284,035  285,344 
    Other real estate owned 4,818  1,763  2,412  2,807  2,062 
    Goodwill and other intangibles 1,014,415  1,015,884  966,461  967,713  969,022 
    Bank-owned life insurance 375,572  373,808  371,650  371,298  369,344 
    Mortgage servicing rights 85,039  84,448  81,980  94,743  91,730 
    Other assets 320,938  298,385  287,000  235,722  218,797 
    Total assets$17,474,083 $16,988,176 $16,471,099 $16,618,101 $16,863,757 
          
    Liabilities and Shareholders’ Equity     
    Liabilities     
    Deposits:     
    Noninterest-bearing$4,244,877 $4,558,756 $4,827,220 $4,741,397 $4,706,256 
    Interest-bearing 9,667,142  8,928,210  8,604,904  9,022,532  9,284,641 
    Total deposits 13,912,019  13,486,966  13,432,124  13,763,929  13,990,897 
    Short-term borrowings 732,057  712,232  312,818  112,642  111,279 
    Long-term debt 431,111  428,133  426,821  431,553  435,416 
    Other liabilities 211,596  224,829  207,055  193,100  188,523 
    Total liabilities 15,286,783  14,852,160  14,378,818  14,501,224  14,726,115 
          
    Shareholders’ equity:     
    Preferred stock —  —  —  —  — 
    Common stock 296,483  296,483  296,483  296,483  296,483 
    Treasury stock (107,559) (111,577) (111,577) (112,295) (114,050)
    Additional paid-in capital 1,299,458  1,302,422  1,299,476  1,298,207  1,297,088 
    Retained earnings 891,242  857,725  823,951  789,880  762,690 
    Accumulated other comprehensive loss (192,324) (209,037) (216,052) (155,398) (104,569)
    Total shareholders’ equity 2,187,300  2,136,016  2,092,281  2,116,877  2,137,642 
    Total liabilities and shareholders’ equity$17,474,083 $16,988,176 $16,471,099 $16,618,101 $16,863,757 

    Net Interest Income and Net Interest Margin

    (Dollars in thousands)Three Months Ended
     March 31, 2023December 31, 2022March 31, 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$11,688,534$163,9705.68%$11,282,422$147,5195.19%$10,108,511$97,0013.88%
    Loans held for sale 103,410 1,7376.72% 117,082 1,6885.77% 330,442 2,8633.48%
    Taxable securities 2,588,148 13,0542.02% 2,657,248 13,1741.98% 2,499,822 8,7821.41%
    Tax-exempt securities(1) 443,996 2,6082.35% 447,287 2,6372.36% 438,380 2,6352.40%
    Total securities 3,032,144 15,6622.07% 3,104,535 15,8112.04% 2,938,202 11,4171.55%
    Interest-bearing balances with banks 464,229 5,4304.74% 269,975 2,7774.08% 1,463,991 6640.18%
    Total interest-earning assets 15,288,317 186,7994.94% 14,774,014 167,7954.51% 14,841,146 111,9453.05%
    Cash and due from banks 197,782   201,369   206,224  
    Intangible assets 1,011,557   967,005   965,430  
    Other assets 660,242   635,452   684,464  
    Total assets$17,157,898  $16,577,840  $16,697,264  
    Interest-bearing liabilities:         
    Interest-bearing demand(2)$6,066,770$20,2981.36%$6,018,679$12,5340.83%$6,636,392$3,6470.22%
    Savings deposits 1,052,802 8260.32% 1,093,997 5820.21% 1,097,560 1390.05%
    Brokered deposits 395,942 4,3184.42% 93,764 1,0474.43% — ——%
    Time deposits 1,564,658 7,4241.92% 1,324,042 3,1490.94% 1,374,722 1,8510.55%
    Total interest-bearing deposits 9,080,172 32,8661.47% 8,530,482 17,3120.81% 9,108,674 5,6370.25%
    Borrowed funds 1,281,552 15,4044.86% 893,705 9,9184.42% 485,777 4,9254.08%
    Total interest-bearing liabilities 10,361,724 48,2701.89% 9,424,187 27,2301.15% 9,594,451 10,5620.44%
    Noninterest-bearing deposits 4,386,998   4,805,014   4,651,793  
    Other liabilities 222,382   209,544   201,353  
    Shareholders’ equity 2,186,794   2,139,095   2,249,667  
    Total liabilities and shareholders’ equity$17,157,898  $16,577,840  $16,697,264  
    Net interest income/ net interest margin $138,5293.66% $140,5653.78% $101,3832.76%
    Cost of funding  1.33%  0.76%  0.30%
    Cost of total deposits  0.99%  0.52%  0.17%

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

    Supplemental Margin Information

    (Dollars in thousands)Three Months Ended
     Mar 31, 2023Dec 31, 2022Mar 31, 2022
    Earning asset mix:   
    Loans held for investment 76.45% 76.36% 68.11%
    Loans held for sale 0.68  0.79  2.23 
    Securities 19.83  21.01  19.80 
    Interest-bearing balances with banks 3.04  1.84  9.86 
    Total 100.00% 100.00% 100.00%
        
    Funding sources mix:   
    Noninterest-bearing demand 29.74% 33.77% 32.65%
    Interest-bearing demand 41.13  42.30  46.59 
    Savings 7.14  7.69  7.70 
    Brokered deposits 2.68  0.66  — 
    Time deposits 10.61  9.31  9.65 
    Borrowed funds 8.70  6.27  3.41 
    Total 100.00% 100.00% 100.00%
        
    Net interest income collected on problem loans$392 $161 $434 
    Total accretion on purchased loans 670  625  1,235 
    Total impact on net interest income$1,062 $786 $1,669 
    Impact on net interest margin 0.03% 0.02% 0.04%
    Impact on loan yield 0.04% 0.03% 0.06%

    Loan Portfolio

    (Dollars in thousands)As of
     Mar 31, 2023
    		Dec 31, 2022
    		Sep 30, 2022
    		Jun 30, 2022
    		Mar 31, 2022
    Loan Portfolio:               
    Commercial, financial, agricultural$1,740,778 $1,673,883 $1,513,091 $1,497,272 $1,445,607 
    Lease financing 121,146  115,013  103,357  101,350  89,842 
    Real estate - construction 1,424,352  1,330,337  1,215,056  1,126,363  1,222,052 
    Real estate - 1-4 family mortgages 3,278,980  3,216,263  3,127,889  3,030,083  2,840,979 
    Real estate - commercial mortgages 5,085,813  5,118,063  5,016,665  4,717,513  4,577,864 
    Installment loans to individuals 115,356  124,745  128,946  131,163  137,115 
    Total loans$11,766,425 $11,578,304 $11,105,004 $10,603,744 $10,313,459 

    Credit Quality and Allowance for Credit Losses on Loans

    (Dollars in thousands)As of
     Mar 31, 2023Dec 31, 2022Sep 30, 2022Jun 30, 2022Mar 31, 2022
    Nonperforming Assets:     
    Nonaccruing loans$56,626 $56,545 $54,278 $43,897 $51,995 
    Loans 90 days or more past due 18,664  331  1,587  617  247 
    Total nonperforming loans 75,290  56,876  55,865  44,514  52,242 
    Other real estate owned 4,818  1,763  2,412  2,807  2,062 
    Total nonperforming assets$80,108 $58,639 $58,277 $47,321 $54,304 
          
    Criticized Loans     
    Classified loans$222,701 $200,249 $193,844 $185,267 $178,015 
    Special Mention loans 64,832  86,172  69,883  87,476  76,949 
    Criticized loans(1)$287,533 $286,421 $263,727 $272,743 $254,964 
          
    Allowance for credit losses on loans$195,292 $192,090 $174,356 $166,131 $166,468 
    Net loan charge-offs$4,732 $2,566 $1,575 $2,337 $851 
    Annualized net loan charge-offs / average loans 0.16% 0.09% 0.06% 0.09% 0.03%
    Nonperforming loans / total loans 0.64  0.49  0.50  0.42  0.51 
    Nonperforming assets / total assets 0.46  0.35  0.35  0.28  0.32 
    Allowance for credit losses on loans / total loans 1.66  1.66  1.57  1.57  1.61 
    Allowance for credit losses on loans / nonperforming loans 259.39  337.73  312.10  373.21  318.65 
    Criticized loans / total loans 2.44  2.47  2.37  2.57  2.47 

    (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, April 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=lXO7IuJ3. To access the conference via telephone, dial 1-877-513-1143 in the United States and request the Renasant Corporation 2023 First 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 6764445 or by dialing 1-412-317-0088 internationally and entering the same conference number. Telephone replay access is available until May 10, 2023.

    ABOUT RENASANT CORPORATION:

    Renasant Corporation is the parent of Renasant Bank, a 119-year-old financial services institution. Renasant has assets of approximately $17.5 billion and operates 196 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 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 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, among others, merger and conversion expenses, gain on sale of MSR and restructuring 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 and charges such as restructuring charges 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
     Mar 31, 2023Dec 31, 2022Sep 30, 2022Jun 30, 2022Mar 31, 2022
    Adjusted Pre-Provision Net Revenue (“PPNR”)   
    Net income (GAAP)$46,078 $46,276 $46,567 $39,678 $33,547 
    Income taxes 11,322  12,885  13,563  10,857  7,935 
    Provision for credit losses (including unfunded commitments) 6,460  10,671  9,800  2,450  950 
    Pre-provision net revenue (non-GAAP)$63,860 $69,832 $69,930 $52,985 $42,432 
    Merger and conversion expense —  1,100  —  —  687 
    Gain on sale of MSR —  —  (2,960) —  — 
    Restructuring charges (benefit) —  —  —  1,187  (455)
    Voluntary reimbursement of certain re-presentment NSF fees —  1,255  —  —  — 
    Adjusted pre-provision net revenue (non-GAAP)$63,860 $72,187 $66,970 $54,172 $42,664 
          
    Adjusted Net Income and Adjusted Tangible Net Income   
    Net income (GAAP)$46,078 $46,276 $46,567 $39,678 $33,547 
    Amortization of intangibles 1,426  1,195  1,251  1,310  1,366 
    Tax effect of adjustments noted above(2) (299) (260) (265) (291) (303)
    Tangible net income (non-GAAP)$47,205 $47,211 $47,553 $40,697 $34,610 
          
    Net income (GAAP)$46,078 $46,276 $46,567 $39,678 $33,547 
    Merger and conversion expense —  1,100  —  —  687 
    Gain on sale of MSR —  —  (2,960) —  — 
    Restructuring charges (benefit) —  —  —  1,187  (455)
    Initial provision for acquisitions —  2,820  —  —  — 
    Voluntary reimbursement of certain re-presentment NSF fees —  1,255  —  —  — 
    Tax effect of adjustments noted above(2) —  (1,127) 626  (264) (51)
    Adjusted net income (non-GAAP)$46,078 $50,324 $44,233 $40,601 $33,728 
    Amortization of intangibles 1,426  1,195  1,251  1,310  1,366 
    Tax effect of adjustments noted above(2) (299) (260) (265) (291) (303)
    Adjusted tangible net income (non-GAAP)$47,205 $51,259 $45,219 $41,620 $34,791 
    Tangible Assets and Tangible Shareholders’ Equity   
    Average shareholders’ equity (GAAP)$2,186,794 $2,139,095 $2,173,408 $2,177,537 $2,249,667 
    Average intangible assets 1,011,557  967,005  967,154  968,441  965,430 
    Average tangible shareholders’ equity (non-GAAP)$1,175,237 $1,172,090 $1,206,254 $1,209,096 $1,284,237 
          
    Average assets (GAAP)$17,157,898 $16,577,840 $16,645,481 $16,631,290 $16,697,264 
    Average intangible assets 1,011,557  967,005  967,154  968,441  965,430 
    Average tangible assets (non-GAAP)$16,146,341 $15,610,835 $15,678,327 $15,662,849 $15,731,834 
          
    Shareholders’ equity (GAAP)$2,187,300 $2,136,016 $2,092,281 $2,116,877 $2,137,642 
    Intangible assets 1,014,415  1,015,884  966,461  967,713  969,022 
    Tangible shareholders’ equity (non-GAAP)$1,172,885 $1,120,132 $1,125,820 $1,149,164 $1,168,620 
          
    Total assets (GAAP)$17,474,083 $16,988,176 $16,471,099 $16,618,101 $16,863,757 
    Intangible assets 1,014,415  1,015,884  966,461  967,713  969,022 
    Total tangible assets (non-GAAP)$16,459,668 $15,972,292 $15,504,638 $15,650,388 $15,894,735 
          
    Adjusted Performance Ratios     
    Return on average assets (GAAP) 1.09% 1.11% 1.11% 0.96% 0.81%
    Adjusted return on average assets (non-GAAP) 1.09  1.20  1.05  0.98  0.82 
    Return on average tangible assets (non-GAAP) 1.19  1.20  1.20  1.04  0.89 
    Adjusted pre-provision net revenue to average assets (non-GAAP) 1.51  1.73  1.60  1.31  1.04 
    Adjusted return on average tangible assets (non-GAAP) 1.19  1.30  1.14  1.07  0.90 
    Return on average equity (GAAP) 8.55  8.58  8.50  7.31  6.05 
    Adjusted return on average equity (non-GAAP) 8.55  9.33  8.07  7.48  6.08 
    Return on average tangible equity (non-GAAP) 16.29  15.98  15.64  13.50  10.93 
    Adjusted return on average tangible equity (non-GAAP) 16.29  17.35  14.87  13.81  10.99 
          
    Adjusted Diluted Earnings Per Share   
    Average diluted shares outstanding 56,270,219  56,335,446  56,248,720  56,182,845  56,081,863 
          
    Diluted earnings per share (GAAP)$0.82 $0.82 $0.83 $0.71 $0.60 
    Adjusted diluted earnings per share (non-GAAP)$0.82 $0.89 $0.79 $0.72 $0.60 
          
    Tangible Book Value Per Share     
    Shares outstanding 56,073,658  55,953,104  55,953,104  55,932,017  55,880,666 
          
    Book value per share (GAAP)$39.01 $38.18 $37.39 $37.85 $38.25 
    Tangible book value per share (non-GAAP)$20.92 $20.02 $20.12 $20.55 $20.91 
          
    Tangible Common Equity Ratio     
    Shareholders’ equity to assets (GAAP) 12.52% 12.57% 12.70% 12.74% 12.68%
    Tangible common equity ratio (non-GAAP) 7.13% 7.01% 7.26% 7.34% 7.35%
    Adjusted Efficiency Ratio     
    Net interest income (FTE) (GAAP)$138,529 $140,565 $132,435 $115,321 $101,383 
          
    Total noninterest income (GAAP)$37,293 $33,395 $41,186 $37,214 $37,458 
    Gain on sale of MSR —  —  2,960  —  — 
    Total adjusted noninterest income (non-GAAP)$37,293 $33,395 $38,226 $37,214 $37,458 
          
    Noninterest expense (GAAP)$107,708 $101,582 $101,574 $98,194 $94,105 
    Amortization of intangibles 1,426  1,195  1,251  1,310  1,366 
    Merger and conversion expense —  1,100  —  —  687 
    Restructuring charges (benefit) —  —  —  1,187  (455)
    Voluntary reimbursement of certain re-presentment NSF fees —  1,255  —  —  — 
    (Recovery of) provision for unfunded commitments (1,500) 183  —  450  (550)
    Total adjusted noninterest expense (non-GAAP)$107,782 $97,849 $100,323 $95,247 $93,057 
          
    Efficiency ratio (GAAP) 61.26% 58.39% 58.50% 64.37% 67.78%
    Adjusted efficiency ratio (non-GAAP) 61.30% 56.25% 58.78% 62.44% 67.02%
          
    Core Net Interest Income and Core Net Interest Margin   
    Net interest income (FTE) (GAAP)$138,529 $140,565 $132,435 $115,321 $101,383 
    Net interest income collected on problem loans 392  161  78  2,276  434 
    Accretion recognized on purchased loans 670  625  1,317  2,021  1,235 
    Non-core net interest income$1,062 $786 $1,395 $4,297 $1,669 
    Core net interest income (FTE) (non-GAAP)(1)$137,467 $139,779 $131,040 $111,024 $99,714 
          
    Net interest margin (GAAP) 3.66% 3.78% 3.54% 3.11% 2.76%
    Core net interest margin (non-GAAP) 3.63% 3.76% 3.50% 3.00% 2.71%
          
    Core Loan Yield     
    Loan interest income (FTE) (GAAP)$163,970 $147,519 $124,614 $107,612 $97,001 
    Net interest income collected on problem loans 392  161  78  2,276  434 
    Accretion recognized on purchased loans 670  625  1,317  2,021  1,235 
    Core loan interest income (FTE) (non-GAAP)(1)$162,908 $146,733 $123,219 $103,315 $95,332 
          
    Loan yield (GAAP) 5.68% 5.19% 4.57% 4.12% 3.88%
    Core loan yield (non-GAAP) 5.64% 5.16% 4.52% 3.96% 3.82%

    (1) Core net interest income (FTE) and Core loan interest income (FTE) include Interest income on PPP loans.
    (2) 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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