Renasant Corporation Announces Earnings for the First Quarter of 2024

| Source: Renasant Corporation Renasant Corporation

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

  
(Dollars in thousands, except earnings per share)Three Months Ended
 Mar 31, 2024Dec 31, 2023Mar 31, 2023
Net income and earnings per share:   
Net income$39,409 $28,124 $46,078 
After-tax loss on sale of securities —  (15,711) — 
Basic EPS 0.70  0.50  0.82 
Diluted EPS 0.70  0.50  0.82 
Adjusted diluted EPS (Non-GAAP)(1) 0.65  0.76  0.82 
Impact to diluted EPS from after-tax loss on sale of securities (including impairments) —  0.28  — 
          

“The quarter's results reflect solid performance across the company, including good loan and deposit growth,” remarked C. Mitchell Waycaster, Chief Executive Officer of the Company. “We continue to build balance sheet strength and believe this will keep Renasant well positioned for additional growth.”

Quarterly Highlights

Earnings

  • Net income for the first quarter of 2024 was $39.4 million; diluted EPS was $0.70 and adjusted diluted EPS (non-GAAP)(1) was $0.65
  • Net interest income (fully tax equivalent) for the first quarter of 2024 was $125.9 million, down $2.7 million on a linked quarter basis
  • For the first quarter of 2024, net interest margin was 3.30%, down 3 basis points on a linked quarter basis
  • Cost of total deposits was 2.35% for the first quarter of 2024, up 18 basis points on a linked quarter basis
  • Noninterest income increased $21.0 million on a linked quarter basis. In the fourth quarter of 2023, the Company recognized impairment charges of $19.4 million as a result of its determination to sell a portion of its available-for-sale securities; there was no such impairment in the first quarter of 2024. Noninterest income for the fourth quarter of 2023 also included the receipt of $2.3 million related to Renasant's participation in a recovery agreement, with minimal recoveries in the first quarter of 2024
  • Mortgage banking income increased $4.8 million on a linked quarter basis. The mortgage division generated $0.4 billion in interest rate lock volume in the first quarter of 2024, an increase of $0.1 billion on a linked quarter basis. Gain on sale margin was 1.78% for the first quarter of 2024, up 64 basis points on a linked quarter basis. In addition, during the first quarter of 2024, the Company sold a portion of its mortgage servicing rights (“MSR”), recognizing a gain of $3.5 million
  • Noninterest expense increased $1.0 million on a linked quarter basis. The Company contributed $1.1 million to certain charitable organizations which were recorded in the line item "advertising and public relations" expense. These contributions qualify as tax credits and will reduce income tax expense dollar for dollar in 2024. In the first quarter of 2024, the Company recorded expense of $0.7 million related to the FDIC special assessment, as compared to the $2.7 million recorded in the fourth quarter of 2023

Balance Sheet

  • Loans increased $149.3 million on a linked quarter basis, representing 4.9% annualized net loan growth
  • Securities decreased $181.1 million on a linked quarter basis primarily driven by the sale of a portion of the Company's available-for-sale securities for proceeds of $177.2 million. A portion of the proceeds was used to purchase higher yielding securities, while the remainder, along with other cash flows from the securities portfolio, was used to fund loan growth.
  • Deposits at March 31, 2024 increased $160.4 million on a linked quarter basis. Brokered deposits decreased $119.2 million on a linked quarter basis to $342.3 million at March 31, 2024. Noninterest bearing deposits decreased $67.5 million on a linked quarter basis and represented 24.7% of total deposits at March 31, 2024

Capital and Liquidity

  • Book value per share and tangible book value per share (non-GAAP)(1) increased 0.8% and 1.7%, respectively, on a linked quarter basis
  • The Company has a $100 million stock repurchase program that is in effect through October 2024; there was no buyback activity during the first quarter of 2024

Credit Quality

  • The Company recorded a provision for credit losses of $2.4 million for the first quarter of 2024
  • The ratio of allowance for credit losses on loans to total loans was constant at 1.61% at March 31, 2024 compared to December 31, 2023
  • The coverage ratio, or the allowance for credit losses on loans to nonperforming loans, was 270.87% at March 31, 2024, compared to 286.26% at December 31, 2023
  • Net loan charge-offs for the first quarter of 2024 were $0.2 million, or 0.01% of average loans on an annualized basis
  • Nonperforming loans to total loans increased to 0.59% at March 31, 2024 compared to 0.56% at December 31, 2023, and criticized loans (which include classified and special mention loans) to total loans increased to 2.76% at March 31, 2024, compared to 2.16% at December 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
 Mar 31,
2024		Dec 31,
2023		Sep 30,
2023		Jun 30,
2023		Mar 31,
2023
Interest income     
Loans held for investment$192,390 $188,535 $181,129 $173,198 $161,787 
Loans held for sale 2,308  3,329  3,751  2,990  1,737 
Securities 10,700  10,728  10,669  14,000  15,091 
Other 7,781  7,839  10,128  6,978  5,430 
Total interest income 213,179  210,431  205,677  197,166  184,045 
Interest expense     
Deposits 82,613  77,168  70,906  51,391  32,866 
Borrowings 7,276  7,310  7,388  15,559  15,404 
Total interest expense 89,889  84,478  78,294  66,950  48,270 
Net interest income 123,290  125,953  127,383  130,216  135,775 
Provision for credit losses     
Provision for loan losses 2,638  2,518  5,315  3,000  7,960 
Recovery of unfunded commitments (200) —  (700) (1,000) (1,500)
Total provision for credit losses 2,438  2,518  4,615  2,000  6,460 
Net interest income after provision for credit losses 120,852  123,435  122,768  128,216  129,315 
Noninterest income 41,381  20,356  38,200  17,226  37,293 
Noninterest expense 112,912  111,880  108,369  110,165  109,208 
Income before income taxes 49,321  31,911  52,599  35,277  57,400 
Income taxes 9,912  3,787  10,766  6,634  11,322 
Net income$39,409 $28,124 $41,833 $28,643 $46,078 
      
Adjusted net income (non-GAAP)(1)$36,572 $42,887 $41,833 $46,728 $46,078 
Adjusted pre-provision net revenue (“PPNR”) (non-GAAP)(1)$48,231 $52,614 $57,214 $59,715 $63,860 
      
Basic earnings per share$0.70 $0.50 $0.75 $0.51 $0.82 
Diluted earnings per share 0.70  0.50  0.74  0.51  0.82 
Adjusted diluted earnings per share (non-GAAP)(1) 0.65  0.76  0.74  0.83  0.82 
Average basic shares outstanding 56,208,348  56,141,628  56,138,618  56,107,881  56,008,741 
Average diluted shares outstanding 56,531,078  56,611,217  56,523,887  56,395,653  56,270,219 
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,
2024		Dec 31,
2023		Sep 30,
2023		Jun 30,
2023		Mar 31,
2023
Return on average assets0.92%0.65%0.96%0.66%1.09%
Adjusted return on average assets (non-GAAP)(1)0.86 0.99 0.96 1.08 1.09 
Return on average tangible assets (non-GAAP)(1)1.00 0.71 1.05 0.73 1.19 
Adjusted return on average tangible assets (non-GAAP)(1)0.93 1.08 1.05 1.18 1.19 
Return on average equity6.85 4.93 7.44 5.18 8.55 
Adjusted return on average equity (non-GAAP)(1)6.36 7.53 7.44 8.45 8.55 
Return on average tangible equity (non-GAAP)(1)12.45 9.26 13.95 9.91 16.29 
Adjusted return on average tangible equity (non-GAAP)(1)11.58 13.94 13.95 15.94 16.29 
Efficiency ratio (fully taxable equivalent)67.52 75.11 64.38 73.29 62.11 
Adjusted efficiency ratio (non-GAAP)(1)68.23 66.18 63.60 62.98 61.30 
Dividend payout ratio31.43 44.00 29.33 43.14 26.83 
           

Capital and Balance Sheet Ratios

 As of
 Mar 31,
2024		Dec 31,
2023		Sep 30,
2023		Jun 30,
2023		Mar 31,
2023
Shares outstanding 56,304,860  56,142,207  56,140,713  56,132,478  56,073,658 
Market value per share$31.32 $33.68 $26.19 $26.13 $30.58 
Book value per share 41.25  40.92  39.78  39.35  39.01 
Tangible book value per share (non-GAAP)(1) 23.32  22.92  21.76  21.30  20.92 
Shareholders’ equity to assets 13.39% 13.23% 13.00% 12.82% 12.52%
Tangible common equity ratio (non-GAAP)(1) 8.04  7.87  7.55  7.37  7.13 
Leverage ratio 9.75  9.62  9.48  9.22  9.18 
Common equity tier 1 capital ratio 10.59  10.52  10.46  10.30  10.19 
Tier 1 risk-based capital ratio 11.37  11.30  11.25  11.09  10.98 
Total risk-based capital ratio 15.00  14.93  14.91  14.76  14.68 

(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,
2024		Dec 31,
2023		Sep 30,
2023		Jun 30,
2023		Mar 31,
2023
Noninterest income     
Service charges on deposit accounts$10,506 $10,603 $9,743 $9,733 $9,120 
Fees and commissions 3,949  4,130  4,108  4,987  4,676 
Insurance commissions 2,716  2,583  3,264  2,809  2,446 
Wealth management revenue 5,669  5,668  5,986  5,338  5,140 
Mortgage banking income 11,370  6,592  7,533  9,771  8,517 
Net losses on sales of securities (including impairments) —  (19,352) —  (22,438) — 
Gain on extinguishment of debt 56  620  —  —  — 
BOLI income 2,691  2,589  2,469  2,402  3,003 
Other 4,424  6,923  5,097  4,624  4,391 
Total noninterest income$41,381 $20,356 $38,200 $17,226 $37,293 
Noninterest expense     
Salaries and employee benefits$71,470 $71,841 $69,458 $70,637 $69,832 
Data processing 3,807  3,971  3,907  3,684  3,633 
Net occupancy and equipment 11,389  11,653  11,548  11,865  11,405 
Other real estate owned 107  306  (120) 51  30 
Professional fees 3,348  2,854  3,338  4,012  3,467 
Advertising and public relations 4,886  3,084  3,474  3,482  4,686 
Intangible amortization 1,212  1,274  1,311  1,369  1,426 
Communications 2,024  2,026  2,006  2,226  1,980 
Other 14,669  14,871  13,447  12,839  12,749 
Total noninterest expense$112,912 $111,880 $108,369 $110,165 $109,208 
                

Mortgage Banking Income

(Dollars in thousands)Three Months Ended
 Mar 31,
2024		Dec 31,
2023		Sep 30,
2023		Jun 30,
2023		Mar 31,
2023
Gain on sales of loans, net$4,535 $1,860 $3,297 $4,646 $4,770 
Fees, net 1,854  2,010  2,376  2,859  1,806 
Mortgage servicing income, net 4,981  2,722  1,860  2,266  1,941 
Total mortgage banking income$11,370 $6,592 $7,533 $9,771 $8,517 
                

Balance Sheet

(Dollars in thousands)As of
 Mar 31,
2024		Dec 31,
2023		Sep 30,
2023		Jun 30,
2023		Mar 31,
2023
Assets     
Cash and cash equivalents$844,400 $801,351 $741,156 $946,899 $847,697 
Securities held to maturity, at amortized cost 1,199,111  1,221,464  1,245,595  1,273,044  1,300,240 
Securities available for sale, at fair value 764,486  923,279  909,108  950,930  1,507,907 
Loans held for sale, at fair value 191,440  179,756  241,613  249,615  159,318 
Loans held for investment 12,500,525  12,351,230  12,168,023  11,930,516  11,766,425 
Allowance for credit losses on loans (201,052) (198,578) (197,773) (194,391) (195,292)
Loans, net 12,299,473  12,152,652  11,970,250  11,736,125  11,571,133 
Premises and equipment, net 282,193  283,195  284,368  285,952  287,006 
Other real estate owned 9,142  9,622  9,258  5,120  4,818 
Goodwill and other intangibles 1,009,248  1,010,460  1,011,735  1,013,046  1,014,415 
Bank-owned life insurance 385,186  382,584  379,945  377,649  375,572 
Mortgage servicing rights 71,596  91,688  90,241  87,432  85,039 
Other assets 289,466  304,484  298,352  298,530  320,938 
Total assets$17,345,741 $17,360,535 $17,181,621 $17,224,342 $17,474,083 
      
Liabilities and Shareholders’ Equity     
Liabilities     
Deposits:     
Noninterest-bearing$3,516,164 $3,583,675 $3,734,197 $3,878,953 $4,244,877 
Interest-bearing 10,720,999  10,493,110  10,422,913  10,216,408  9,667,142 
Total deposits 14,237,163  14,076,785  14,157,110  14,095,361  13,912,019 
Short-term borrowings 108,121  307,577  107,662  257,305  732,057 
Long-term debt 428,047  429,400  427,399  429,630  431,111 
Other liabilities 250,060  249,390  256,127  233,418  211,596 
Total liabilities 15,023,391  15,063,152  14,948,298  15,015,714  15,286,783 
      
Shareholders’ equity:     
Common stock 296,483  296,483  296,483  296,483  296,483 
Treasury stock (99,683) (105,249) (105,300) (105,589) (107,559)
Additional paid-in capital 1,303,613  1,308,281  1,304,891  1,301,883  1,299,458 
Retained earnings 978,880  952,124  936,573  907,312  891,242 
Accumulated other comprehensive loss (156,943) (154,256) (199,324) (191,461) (192,324)
Total shareholders’ equity 2,322,350  2,297,383  2,233,323  2,208,628  2,187,300 
Total liabilities and shareholders’ equity$17,345,741 $17,360,535 $17,181,621 $17,224,342 $17,474,083 
                

Net Interest Income and Net Interest Margin

(Dollars in thousands)Three Months Ended
 March 31, 2024December 31, 2023March 31, 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$12,407,976 $194,640 6.30%$12,249,429 $190,857 6.18%$11,688,534 $163,970 5.68%
Loans held for sale 155,382  2,308 5.94% 199,510  3,329 6.68% 103,410  1,737 6.72%
Taxable securities 1,891,817  9,505 2.01% 2,050,175  9,490 1.85% 2,635,130  13,317 2.02%
Tax-exempt securities(1) 270,279  1,505 2.23% 282,698  1,558 2.20% 397,014  2,345 2.36%
Total securities 2,162,096  11,010 2.04% 2,332,873  11,048 1.89% 3,032,144  15,662 2.07%
Interest-bearing balances with banks 570,336  7,781 5.49% 552,301  7,839 5.63% 464,229  5,430 4.74%
Total interest-earning assets 15,295,790  215,739 5.66% 15,334,113  213,073 5.52% 15,288,317  186,799 4.94%
Cash and due from banks 188,503    180,609    197,782   
Intangible assets 1,009,825    1,011,130    1,011,557   
Other assets 708,895    669,988    660,242   
Total assets$17,203,013   $17,195,840   $17,157,898   
Interest-bearing liabilities:         
Interest-bearing demand(2)$6,955,989 $52,500 3.03%$6,721,053 $47,783 2.82%$6,066,770 $20,298 1.36%
Savings deposits 860,397  730 0.34% 888,692  765 0.34% 1,052,802  826 0.32%
Brokered deposits 445,608  5,987 5.39% 632,704  8,594 5.39% 395,745  4,418 4.53%
Time deposits 2,319,420  23,396 4.06% 2,185,737  20,026 3.63% 1,564,855  7,324 1.90%
Total interest-bearing deposits 10,581,414  82,613 3.13% 10,428,186  77,168 2.94% 9,080,172  32,866 1.47%
Borrowed funds 544,564  7,276 5.35% 543,344  7,310 5.37% 1,281,552  15,404 4.86%
Total interest-bearing liabilities 11,125,978  89,889 3.24% 10,971,530  84,478 3.06% 10,361,724  48,270 1.89%
Noninterest-bearing deposits 3,518,612    3,703,050    4,386,998   
Other liabilities 244,142    260,235    222,382   
Shareholders’ equity 2,314,281    2,261,025    2,186,794   
Total liabilities and shareholders’ equity$17,203,013   $17,195,840   $17,157,898   
Net interest income/ net interest margin $125,850 3.30% $128,595 3.33% $138,529 3.66%
Cost of funding  2.46%  2.28%  1.33%
Cost of total deposits  2.35%  2.17%  0.99%

(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,
2024		Dec 31,
2023		Mar 31,
2023
Earning asset mix:   
Loans held for investment 81.12% 79.88% 76.45%
Loans held for sale 1.02  1.30  0.68 
Securities 14.14  15.21  19.83 
Interest-bearing balances with banks 3.72  3.61  3.04 
Total 100.00% 100.00% 100.00%
    
Funding sources mix:   
Noninterest-bearing demand 24.03% 25.23% 29.74%
Interest-bearing demand 47.50  45.80  41.13 
Savings 5.88  6.06  7.14 
Brokered deposits 3.04  4.31  2.68 
Time deposits 15.84  14.89  10.61 
Borrowed funds 3.71  3.71  8.70 
Total 100.00% 100.00% 100.00%
    
Net interest income collected on problem loans$123 $283 $392 
Total accretion on purchased loans 800  1,117  885 
Total impact on net interest income$923 $1,400 $1,277 
Impact on net interest margin 0.02% 0.04% 0.03%
Impact on loan yield 0.03  0.05  0.04 
          

Loan Portfolio

(Dollars in thousands)As of
 Mar 31,
2024		Dec 31,
2023		Sep 30,
2023		Jun 30,
2023		Mar 31,
2023
Loan Portfolio:     
Commercial, financial, agricultural$1,869,408 $1,871,821 $1,819,891 $1,729,070 $1,740,778 
Lease financing 107,474  116,020  120,724  122,370  121,146 
Real estate - construction 1,243,535  1,333,397  1,407,364  1,369,019  1,424,352 
Real estate - 1-4 family mortgages 3,429,286  3,439,919  3,398,876  3,348,654  3,278,980 
Real estate - commercial mortgages 5,753,230  5,486,550  5,313,166  5,252,479  5,085,813 
Installment loans to individuals 97,592  103,523  108,002  108,924  115,356 
Total loans$12,500,525 $12,351,230 $12,168,023 $11,930,516 $11,766,425 
                

Credit Quality and Allowance for Credit Losses on Loans

(Dollars in thousands)As of
 Mar 31,
2024		Dec 31,
2023		Sep 30,
2023		Jun 30,
2023		Mar 31,
2023
Nonperforming Assets:     
Nonaccruing loans$73,774 $68,816 $69,541 $55,439 $56,626 
Loans 90 days or more past due 451  554  532  36,321  18,664 
Total nonperforming loans 74,225  69,370  70,073  91,760  75,290 
Other real estate owned 9,142  9,622  9,258  5,120  4,818 
Total nonperforming assets$83,367 $78,992 $79,331 $96,880 $80,108 
      
Criticized Loans     
Classified loans$206,502 $166,893 $186,052 $219,674 $222,701 
Special Mention loans 138,366  99,699  89,858  56,616  64,832 
Criticized loans(1)$344,868 $266,592 $275,910 $276,290 $287,533 
      
Allowance for credit losses on loans$201,052 $198,578 $197,773 $194,391 $195,292 
Net loan charge-offs$164 $1,713 $1,933 $3,901 $4,732 
Annualized net loan charge-offs / average loans 0.01% 0.06% 0.06% 0.13% 0.16%
Nonperforming loans / total loans 0.59  0.56  0.58  0.77  0.64 
Nonperforming assets / total assets 0.48  0.46  0.46  0.56  0.46 
Allowance for credit losses on loans / total loans 1.61  1.61  1.63  1.63  1.66 
Allowance for credit losses on loans / nonperforming loans 270.87  286.26  282.24  211.85  259.39 
Criticized loans / total loans 2.76  2.16  2.27  2.32  2.44 

(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 24, 2024.

The webcast is accessible through Renasant’s investor relations website at www.renasant.com or https://event.choruscall.com/mediaframe/webcast.html?webcastid=YbP0Ll7b. To access the conference via telephone, dial 1-877-513-1143 in the United States and request the Renasant Corporation 2024 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 6704083 or by dialing 1-412-317-0088 internationally and entering the same conference number. Telephone replay access is available until May 8, 2024.

ABOUT RENASANT CORPORATION:
Renasant Corporation is the parent of Renasant Bank, a 120-year-old financial services institution. Renasant has assets of approximately $17.3 billion and operates 193 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 deposit and credit exposure; (xvi) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships; (xvii) increased cybersecurity risk, including potential network breaches, business disruptions or financial losses; (xviii) civil unrest, natural disasters, epidemics and other catastrophic events in the Company’s geographic area; (xix) the impact, extent and timing of technological changes; and (xx) other circumstances, many of which are beyond management’s control.

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

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

NON-GAAP FINANCIAL MEASURES:
In addition to results presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”), this press release and the presentation slides furnished to the SEC on the same Form 8-K as this release contain non-GAAP financial measures, namely, (i) adjusted loan yield, (ii) adjusted net interest income and margin, (iii) pre-provision net revenue (including on an as-adjusted basis), (iv) adjusted net income, (v) adjusted diluted earnings per share, (vi) tangible book value per share, (vii) the tangible common equity ratio, (viii) certain performance ratios (namely, the ratio of pre-provision net revenue to average assets, the adjusted return on average assets and on average equity, and the return on average tangible assets and on average tangible common equity (including each of the foregoing on an as-adjusted basis)), and (ix) the adjusted efficiency ratio.

These non-GAAP financial measures adjust GAAP financial measures to exclude intangible assets, including related amortization, and/or certain gains or charges (such as, for the first quarter of 2024, the gain on extinguishment of debt and the gain on the sale of mortgage servicing rights), 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
 Mar 31,
2024		Dec 31,
2023		Sep 30,
2023		Jun 30,
2023		Mar 31,
2023
Adjusted Pre-Provision Net Revenue (“PPNR”)   
Net income (GAAP)$39,409 $28,124 $41,833 $28,643 $46,078 
Income taxes 9,912  3,787  10,766  6,634  11,322 
Provision for credit losses (including unfunded commitments) 2,438  2,518  4,615  2,000  6,460 
Pre-provision net revenue (non-GAAP)$51,759 $34,429 $57,214 $37,277 $63,860 
Gain on extinguishment of debt (56) (620) —  —  — 
Gain on sales of MSR (3,472) (547) —  —  — 
Losses on sales of securities (including impairments) —  19,352  —  22,438  — 
Adjusted pre-provision net revenue (non-GAAP)$48,231 $52,614 $57,214 $59,715 $63,860 
      
Adjusted Net Income and Adjusted Tangible Net Income   
Net income (GAAP)$39,409 $28,124 $41,833 $28,643 $46,078 
Amortization of intangibles 1,212  1,274  1,311  1,369  1,426 
Tax effect of adjustments noted above(1) (237) (240) (269) (266) (299)
Tangible net income (non-GAAP)$40,384 $29,158 $42,875 $29,746 $47,205 
      
Net income (GAAP)$39,409 $28,124 $41,833 $28,643 $46,078 
Gain on extinguishment of debt (56) (620) —  —  — 
Gain on sales of MSR (3,472) (547) —  —  — 
Losses on sales of securities (including impairments) —  19,352  —  22,438  — 
Tax effect of adjustments noted above(1) 691  (3,422) —  (4,353) — 
Adjusted net income (non-GAAP)$36,572 $42,887 $41,833 $46,728 $46,078 
Amortization of intangibles 1,212  1,274  1,311  1,369  1,426 
Tax effect of adjustments noted above(1) (237) (240) (269) (266) (299)
Adjusted tangible net income (non-GAAP)$37,547 $43,921 $42,875 $47,831 $47,205 
Tangible Assets and Tangible Shareholders’ Equity   
Average shareholders’ equity (GAAP)$2,314,281 $2,261,025 $2,231,605 $2,217,708 $2,186,794 
Average intangible assets 1,009,825  1,011,130  1,012,460  1,013,811  1,011,557 
Average tangible shareholders’ equity (non-GAAP)$1,304,456 $1,249,895 $1,219,145 $1,203,897 $1,175,237 
      
Average assets (GAAP)$17,203,013 $17,195,840 $17,235,413 $17,337,924 $17,157,898 
Average intangible assets 1,009,825  1,011,130  1,012,460  1,013,811  1,011,557 
Average tangible assets (non-GAAP)$16,193,188 $16,184,710 $16,222,953 $16,324,113 $16,146,341 
      
Shareholders’ equity (GAAP)$2,322,350 $2,297,383 $2,233,323 $2,208,628 $2,187,300 
Intangible assets 1,009,248  1,010,460  1,011,735  1,013,046  1,014,415 
Tangible shareholders’ equity (non-GAAP)$1,313,102 $1,286,923 $1,221,588 $1,195,582 $1,172,885 
      
Total assets (GAAP)$17,345,741 $17,360,535 $17,181,621 $17,224,342 $17,474,083 
Intangible assets 1,009,248  1,010,460  1,011,735  1,013,046  1,014,415 
Total tangible assets (non-GAAP)$16,336,493 $16,350,075 $16,169,886 $16,211,296 $16,459,668 
      
Adjusted Performance Ratios     
Return on average assets (GAAP) 0.92% 0.65% 0.96% 0.66% 1.09%
Adjusted return on average assets (non-GAAP) 0.86  0.99  0.96  1.08  1.09 
Return on average tangible assets (non-GAAP) 1.00  0.71  1.05  0.73  1.19 
Pre-provision net revenue to average assets (non-GAAP) 1.21  0.79  1.32  0.86  1.51 
Adjusted pre-provision net revenue to average assets (non-GAAP) 1.13  1.21  1.32  1.38  1.51 
Adjusted return on average tangible assets (non-GAAP) 0.93  1.08  1.05  1.18  1.19 
Return on average equity (GAAP) 6.85  4.93  7.44  5.18  8.55 
Adjusted return on average equity (non-GAAP) 6.36  7.53  7.44  8.45  8.55 
Return on average tangible equity (non-GAAP) 12.45  9.26  13.95  9.91  16.29 
Adjusted return on average tangible equity (non-GAAP) 11.58  13.94  13.95  15.94  16.29 
      
Adjusted Diluted Earnings Per Share   
Average diluted shares outstanding 56,531,078  56,611,217  56,523,887  56,395,653  56,270,219 
      
Diluted earnings per share (GAAP)$0.70 $0.50 $0.74 $0.51 $0.82 
Adjusted diluted earnings per share (non-GAAP)$0.65 $0.76 $0.74 $0.83 $0.82 
      
Tangible Book Value Per Share     
Shares outstanding 56,304,860  56,142,207  56,140,713  56,132,478  56,073,658 
      
Book value per share (GAAP)$41.25 $40.92 $39.78 $39.35 $39.01 
Tangible book value per share (non-GAAP)$23.32 $22.92 $21.76 $21.30 $20.92 
      
Tangible Common Equity Ratio     
Shareholders’ equity to assets (GAAP) 13.39% 13.23% 13.00% 12.82% 12.52%
Tangible common equity ratio (non-GAAP) 8.04% 7.87% 7.55% 7.37% 7.13%
Adjusted Efficiency Ratio     
Net interest income (FTE) (GAAP)$125,850 $128,595 $130,131 $133,085 $138,529 
      
Total noninterest income (GAAP)$41,381 $20,356 $38,200 $17,226 $37,293 
Gain on sales of MSR 3,472  547  —  —  — 
Gain on extinguishment of debt 56  620  —  —  — 
Losses on sales of securities (including impairments) —  (19,352) —  (22,438) — 
Total adjusted noninterest income (non-GAAP)$37,853 $38,541 $38,200 $39,664 $37,293 
      
Noninterest expense (GAAP)$112,912 $111,880 $108,369 $110,165 $109,208 
Amortization of intangibles 1,212  1,274  1,311  1,369  1,426 
Total adjusted noninterest expense (non-GAAP)$111,700 $110,606 $107,058 $108,796 $107,782 
      
Efficiency ratio (GAAP) 67.52% 75.11% 64.38% 73.29% 62.11%
Adjusted efficiency ratio (non-GAAP) 68.23% 66.18% 63.60% 62.98% 61.30%
      
Adjusted Net Interest Income and Adjusted Net Interest Margin   
Net interest income (FTE) (GAAP)$125,850 $128,595 $130,131 $133,085 $138,529 
Net interest income collected on problem loans 123  283  (820) 364  392 
Accretion recognized on purchased loans 800  1,117  1,290  874  885 
Adjustments to net interest income$923 $1,400 $470 $1,238 $1,277 
Adjusted net interest income (FTE) (non-GAAP)$124,927 $127,195 $129,661 $131,847 $137,252 
      
Net interest margin (GAAP) 3.30% 3.33% 3.36% 3.45% 3.66%
Adjusted net interest margin (non-GAAP) 3.28% 3.29% 3.35% 3.43% 3.63%
      
Adjusted Loan Yield     
Loan interest income (FTE) (GAAP)$194,640 $190,857 $183,521 $175,549 $163,970 
Net interest income collected on problem loans 123  283  (820) 364  392 
Accretion recognized on purchased loans 800  1,117  1,290  874  885 
Adjusted loan interest income (FTE) (non-GAAP)$193,717 $189,457 $183,051 $174,311 $162,693 
      
Loan yield (GAAP) 6.30% 6.18% 6.06% 5.93% 5.68%
Adjusted loan yield (non-GAAP) 6.27% 6.14% 6.04% 5.89% 5.64%

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

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