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Renasant Corporation Announces Earnings for the Third Quarter of 2023

Renasant Corporation

October 24, 2023 19 min read

RNST

TUPELO, Miss., Oct. 24, 2023 (GLOBE NEWSWIRE) -- Renasant Corporation (NYSE: RNST) (the “Company”) today announced earnings results for the third quarter of 2023.

(Dollars in thousands, except earnings per share)	Three Months Ended							Nine Months Ended
	Sep 30, 2023		Jun 30, 2023			Sep 30, 2022		Sep 30, 2023			Sep 30, 2022
Net income and earnings per share:
Net income	$	42,332	$	28,643		$	46,567	$	117,053		$	119,792
After-tax loss on sale of securities		—		(18,085	)		—		(17,859	)		—
Basic EPS		0.75		0.51			0.83		2.09			2.14
Diluted EPS		0.75		0.51			0.83		2.08			2.13
Impact to diluted EPS from loss on sale of securities		—		0.32			—		0.31			—
Adjusted diluted EPS (Non-GAAP)⁽¹⁾		0.75		0.83			0.79		2.39			2.11

“We are pleased with our third quarter results of solid loan growth, good asset quality, an increase in core deposits and expense control,” remarked C. Mitchell Waycaster, Chief Executive Officer of the Company. “The Company’s focus remains on maintaining a strong balance sheet, and we believe we are well-positioned to take advantage of opportunities that may arise.”

Quarterly Highlights

Earnings

Net income for the third quarter of 2023 was $42.3 million with diluted EPS of $0.75
Net interest income (fully tax equivalent) for the third quarter of 2023 was $130.8 million, down $2.3 million on a linked quarter basis
For the third quarter of 2023, net interest margin was 3.38%, down 7 basis points on a linked quarter basis
Cost of total deposits was 198 basis points for the third quarter of 2023, up 48 basis points on a linked quarter basis
Noninterest income increased $21.0 million on a linked quarter basis. The Company recognized pre-tax losses of $22.4 million on securities sales in the second quarter of 2023 and used the sale proceeds to pay down FHLB borrowings. The Company’s wealth management and insurance lines of business continued to produce solid results during the third quarter of 2023
The mortgage division generated $0.5 billion in interest rate lock volume in the third quarter of 2023. Gain on sale margin was 1.55% for the third quarter of 2023, down 11 basis points on a linked quarter basis
Noninterest expense decreased $1.5 million on a linked quarter basis. Lower salaries and benefits and professional fees contributed to the decrease

Balance Sheet

Loans increased $237.5 million on a linked quarter basis, which represents 7.9% annualized net loan growth
The securities portfolio decreased $69.3 million on a linked quarter basis, due to net cash outflows during the quarter of $52.1 million and a negative fair market value adjustment in our available-for-sale portfolio of $17.2 million
Deposits at September 30, 2023 increased $61.7 million on a linked quarter basis. Brokered deposits decreased $323 million on a linked quarter basis to $757 million at September 30, 2023. Noninterest bearing deposits decreased $144.8 million on a linked quarter basis and represented 26.4% of total deposits at September 30, 2023

Capital and Liquidity

Book value per share and tangible book value per share (non-GAAP)⁽¹⁾ increased 1.1% and 2.2%, 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 third quarter of 2023

Credit Quality

The Company recorded a provision for credit losses on loans of $5.3 million and a recovery of credit losses on unfunded commitments (included in noninterest expense) of $0.7 million for the third quarter of 2023
The ratio of allowance for credit losses on loans to total loans was stable at 1.63% at September 30, 2023
The coverage ratio, or the allowance for credit losses on loans to nonperforming loans, was 282.24% at September 30, 2023, compared to 211.85% at June 30, 2023
Net loan charge-offs for the third quarter of 2023 were $1.9 million, or 0.06% of average loans on an annualized basis
Nonperforming loans to total loans decreased to 0.58% at September 30, 2023 compared to 0.77% at June 30, 2023 and criticized loans (which include classified and special mention loans) to total loans decreased to 2.27% at September 30, 2023, compared to 2.32% at June 30, 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										Nine Months Ended
	Sep 30, 2023		Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Sep 30, 2023		Sep 30, 2022
Interest income
Loans held for investment	$	181,756	$	173,198	$	161,787	$	145,360	$	123,100	$	516,741	$	325,338
Loans held for sale		3,751		2,990		1,737		1,688		2,075		8,478		7,524
Securities		10,669		14,000		15,091		15,241		14,500		39,760		37,806
Other		10,128		6,978		5,430		2,777		3,458		22,536		6,076
Total interest income		206,304		197,166		184,045		165,066		143,133		587,515		376,744
Interest expense
Deposits		70,906		51,391		32,866		17,312		7,241		155,163		17,896
Borrowings		7,388		15,559		15,404		9,918		5,574		38,351		15,386
Total interest expense		78,294		66,950		48,270		27,230		12,815		193,514		33,282
Net interest income		128,010		130,216		135,775		137,836		130,318		394,001		343,462
Provision for credit losses		5,315		3,000		7,960		10,488		9,800		16,275		13,300
Net interest income after provision for credit losses		122,695		127,216		127,815		127,348		120,518		377,726		330,162
Noninterest income		38,200		17,226		37,293		33,395		41,186		92,719		115,858
Noninterest expense		107,669		109,165		107,708		101,582		101,574		324,542		293,873
Income before income taxes		53,226		35,277		57,400		59,161		60,130		145,903		152,147
Income taxes		10,894		6,634		11,322		12,885		13,563		28,850		32,355
Net income	$	42,332	$	28,643	$	46,078	$	46,276	$	46,567	$	117,053	$	119,792

Adjusted net income (non-GAAP)⁽¹⁾	$	42,332	$	46,728	$	46,078	$	50,324	$	44,233	$	134,912	$	118,562
Adjusted pre-provision net revenue (“PPNR”) (non-GAAP)⁽¹⁾	$	57,841	$	59,715	$	63,860	$	72,187	$	66,970	$	181,416	$	163,806

Basic earnings per share	$	0.75	$	0.51	$	0.82	$	0.83	$	0.83	$	2.09	$	2.14
Diluted earnings per share		0.75		0.51		0.82		0.82		0.83		2.08		2.13
Adjusted diluted earnings per share (non-GAAP)⁽¹⁾		0.75		0.83		0.82		0.89		0.79		2.39		2.11
Average basic shares outstanding		56,138,618		56,107,881		56,008,741		55,953,104		55,947,214		56,085,556		55,888,226
Average diluted shares outstanding		56,523,887		56,395,653		56,270,219		56,335,446		56,248,720		56,393,957		56,169,886
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, 2023		Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Sep 30, 2023		Sep 30, 2022
Return on average assets	0.97	%	0.66	%	1.09	%	1.11	%	1.11	%	0.91	%	0.96	%
Adjusted return on average assets (non-GAAP)⁽¹⁾	0.97		1.08		1.09		1.20		1.05		1.05		0.95
Return on average tangible assets (non-GAAP)⁽¹⁾	1.06		0.73		1.19		1.20		1.20		0.99		1.05
Adjusted return on average tangible assets (non-GAAP)⁽¹⁾	1.06		1.18		1.19		1.30		1.14		1.14		1.04
Return on average equity	7.53		5.18		8.55		8.58		8.50		7.07		7.28
Adjusted return on average equity (non-GAAP)⁽¹⁾	7.53		8.45		8.55		9.33		8.07		8.15		7.21
Return on average tangible equity (non-GAAP)⁽¹⁾	14.11		9.91		16.29		15.98		15.64		13.41		13.32
Adjusted return on average tangible equity (non-GAAP)⁽¹⁾	14.11		15.94		16.29		17.35		14.87		15.40		13.19
Efficiency ratio (fully taxable equivalent)	63.73		72.63		61.26		58.39		58.50		65.55		63.20
Adjusted efficiency ratio (non-GAAP)⁽¹⁾	63.36		62.98		61.30		56.25		58.78		62.53		62.47
Dividend payout ratio	29.33		43.14		26.83		26.51		26.51		31.58		30.84

Capital and Balance Sheet Ratios

	As of
	Sep 30, 2023			Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022
Shares outstanding		56,140,713			56,132,478			56,073,658			55,953,104			55,953,104
Market value per share	$	26.19		$	26.13		$	30.58		$	37.59		$	31.28
Book value per share		39.79			39.35			39.01			38.18			37.39
Tangible book value per share (non-GAAP)⁽¹⁾		21.77			21.30			20.92			20.02			20.12
Shareholders’ equity to assets		13.00	%		12.82	%		12.52	%		12.57	%		12.70	%
Tangible common equity ratio (non-GAAP)⁽¹⁾		7.56			7.37			7.13			7.01			7.26
Leverage ratio		9.49			9.22			9.18			9.36			9.39
Common equity tier 1 capital ratio		10.47			10.30			10.19			10.21			10.64
Tier 1 risk-based capital ratio		11.25			11.09			10.98			11.01			11.47
Total risk-based capital ratio		14.92			14.76			14.68			14.63			15.15

Noninterest Income and Noninterest Expense

(Dollars in thousands)	Three Months Ended													Nine Months Ended
	Sep 30, 2023			Jun 30, 2023			Mar 31, 2023		Dec 31, 2022			Sep 30, 2022		Sep 30, 2023			Sep 30, 2022
Noninterest income
Service charges on deposit accounts	$	9,743		$	9,733		$	9,120	$	10,445		$	10,216	$	28,596		$	29,512
Fees and commissions		4,108			4,987			4,676		4,470			4,148		13,771			12,798
Insurance commissions		3,264			2,809			2,446		2,501			3,108		8,519			8,253
Wealth management revenue		5,986			5,338			5,140		5,237			5,467		16,464			17,102
Mortgage banking income		7,533			9,771			8,517		5,170			12,675		25,821			30,624
Net losses on sales of securities		—			(22,438	)		—		—			—		(22,438	)		—
BOLI income		2,469			2,402			3,003		2,487			2,296		7,874			6,780
Other		5,097			4,624			4,391		3,085			3,276		14,112			10,789
Total noninterest income	$	38,200		$	17,226		$	37,293	$	33,395		$	41,186	$	92,719		$	115,858
Noninterest expense
Salaries and employee benefits	$	69,458		$	70,637		$	69,832	$	67,372		$	66,463	$	209,927		$	194,282
Data processing		3,907			3,684			3,633		3,521			3,526		11,224			11,379
Net occupancy and equipment		11,548			11,865			11,405		11,122			11,266		34,818			33,697
Other real estate owned		(120	)		51			30		(59	)		34		(39	)		(394	)
Professional fees		3,338			4,012			3,467		2,856			3,087		10,817			9,016
Advertising and public relations		3,474			3,482			4,686		3,631			3,229		11,642			10,694
Intangible amortization		1,311			1,369			1,426		1,195			1,251		4,106			3,927
Communications		2,006			2,226			1,980		2,028			1,999		6,212			5,930
Merger and conversion related expenses		—			—			—		1,100			—		—			687
Restructuring charges		—			—			—		—			—		—			732
Other		12,747			11,839			11,249		8,816			10,719		35,835			23,923
Total noninterest expense	$	107,669		$	109,165		$	107,708	$	101,582		$	101,574	$	324,542		$	293,873

Mortgage Banking Income

(Dollars in thousands)	Three Months Ended										Nine Months Ended
	Sep 30, 2023		Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Sep 30, 2023		Sep 30, 2022
Gain on sales of loans, net	$	3,297	$	4,646	$	4,770	$	1,003	$	5,263	$	12,713	$	14,800
Fees, net		2,376		2,859		1,806		1,849		2,405		7,041		8,522
Mortgage servicing income, net		1,860		2,266		1,941		2,318		5,007		6,067		7,302
Total mortgage banking income	$	7,533	$	9,771	$	8,517	$	5,170	$	12,675	$	25,821	$	30,624

Balance Sheet

(Dollars in thousands)	As of
	Sep 30, 2023			Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022
Assets
Cash and cash equivalents	$	741,156		$	946,899		$	847,697		$	575,992		$	479,500
Securities held to maturity, at amortized cost		1,245,595			1,273,044			1,300,240			1,324,040			1,353,502
Securities available for sale, at fair value		909,108			950,930			1,507,907			1,533,942			1,569,242
Loans held for sale, at fair value		241,613			249,615			159,318			110,105			144,642
Loans held for investment		12,168,023			11,930,516			11,766,425			11,578,304			11,105,004
Allowance for credit losses on loans		(197,773	)		(194,391	)		(195,292	)		(192,090	)		(174,356	)
Loans, net		11,970,250			11,736,125			11,571,133			11,386,214			10,930,648
Premises and equipment, net		284,368			285,952			287,006			283,595			284,062
Other real estate owned		9,258			5,120			4,818			1,763			2,412
Goodwill and other intangibles		1,011,735			1,013,046			1,014,415			1,015,884			966,461
Bank-owned life insurance		379,945			377,649			375,572			373,808			371,650
Mortgage servicing rights		90,241			87,432			85,039			84,448			81,980
Other assets		298,851			298,530			320,938			298,385			287,000
Total assets	$	17,182,120		$	17,224,342		$	17,474,083		$	16,988,176		$	16,471,099

Liabilities and Shareholders’ Equity
Liabilities
Deposits:
Noninterest-bearing	$	3,734,197		$	3,878,953		$	4,244,877		$	4,558,756		$	4,827,220
Interest-bearing		10,422,913			10,216,408			9,667,142			8,928,210			8,604,904
Total deposits		14,157,110			14,095,361			13,912,019			13,486,966			13,432,124
Short-term borrowings		107,662			257,305			732,057			712,232			312,818
Long-term debt		427,399			429,630			431,111			428,133			426,821
Other liabilities		256,127			233,418			211,596			224,829			207,055
Total liabilities		14,948,298			15,015,714			15,286,783			14,852,160			14,378,818

Shareholders’ equity:
Preferred stock		—			—			—			—			—
Common stock		296,483			296,483			296,483			296,483			296,483
Treasury stock		(105,300	)		(105,589	)		(107,559	)		(111,577	)		(111,577	)
Additional paid-in capital		1,304,891			1,301,883			1,299,458			1,302,422			1,299,476
Retained earnings		937,072			907,312			891,242			857,725			823,951
Accumulated other comprehensive loss		(199,324	)		(191,461	)		(192,324	)		(209,037	)		(216,052	)
Total shareholders’ equity		2,233,822			2,208,628			2,187,300			2,136,016			2,092,281
Total liabilities and shareholders’ equity	$	17,182,120		$	17,224,342		$	17,474,083		$	16,988,176		$	16,471,099

Net Interest Income and Net Interest Margin

(Dollars in thousands)	Three Months Ended
	September 30, 2023						June 30, 2023						September 30, 2022
	Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate
Interest-earning assets:
Loans held for investment	$	12,030,109	$	184,148	6.08	%	$	11,877,592	$	175,549	5.93	%	$	10,829,137	$	124,614	4.57	%
Loans held for sale		227,982		3,751	6.58	%		192,539		2,990	6.21	%		143,837		2,075	5.77	%
Taxable securities		2,053,113		9,218	1.80	%		2,435,442		12,089	1.99	%		2,773,924		12,439	1.79	%
Tax-exempt securities⁽¹⁾		329,760		1,807	2.19	%		413,680		2,429	2.35	%		449,927		2,664	2.37	%
Total securities		2,382,873		11,025	1.85	%		2,849,122		14,518	2.04	%		3,223,851		15,103	1.87	%
Interest-bearing balances with banks		729,049		10,128	5.51	%		524,307		6,978	5.34	%		663,218		3,458	2.07	%
Total interest-earning assets		15,370,013		209,052	5.40	%		15,443,560		200,035	5.19	%		14,860,043		145,250	3.89	%
Cash and due from banks		180,708						189,668						191,358
Intangible assets		1,012,460						1,013,811						967,154
Other assets		672,238						690,885						626,926
Total assets	$	17,235,419					$	17,337,924					$	16,645,481
Interest-bearing liabilities:
Interest-bearing demand⁽²⁾	$	6,520,145	$	41,464	2.52	%	$	6,114,067	$	29,185	1.91	%	$	6,462,940	$	6,061	0.37	%
Savings deposits		942,619		793	0.33	%		1,004,096		813	0.32	%		1,134,665		155	0.05	%
Brokered deposits		947,970		12,490	5.23	%		810,087		10,090	5.00	%		—		—	—	%
Time deposits		2,001,923		16,159	3.20	%		1,735,093		11,303	2.61	%		1,240,439		1,025	0.33	%
Total interest-bearing deposits		10,412,657		70,906	2.70	%		9,663,343		51,391	2.13	%		8,838,044		7,241	0.33	%
Borrowed funds		545,105		7,388	5.40	%		1,204,968		15,559	5.18	%		572,376		5,574	3.88	%
Total interest-bearing liabilities		10,957,762		78,294	2.84	%		10,868,311		66,950	2.47	%		9,410,420		12,815	0.54	%
Noninterest-bearing deposits		3,800,160						4,039,087						4,867,314
Other liabilities		245,886						212,818						194,339
Shareholders’ equity		2,231,611						2,217,708						2,173,408
Total liabilities and shareholders’ equity	$	17,235,419					$	17,337,924					$	16,645,481
Net interest income/ net interest margin			$	130,758	3.38	%			$	133,085	3.45	%			$	132,435	3.54	%
Cost of funding					2.11	%					1.80	%					0.36	%
Cost of total deposits					1.98	%					1.50	%					0.21	%

_{⁽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, 2023						September 30, 2022
	Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate
Interest-earning assets:
Loans held for investment	$	11,866,662	$	523,667	5.90	%	$	10,474,305	$	329,227	4.20	%
Loans held for sale		175,100		8,478	6.46	%		233,266		7,524	4.30	%
Taxable securities⁽¹⁾		2,356,962		34,361	1.94	%		2,653,735		31,576	1.59	%
Tax-exempt securities		395,394		6,844	2.31	%		446,762		8,018	2.39	%
Total securities		2,752,356		41,205	2.00	%		3,100,497		39,594	1.70	%
Interest-bearing balances with banks		573,498		22,536	5.25	%		1,041,145		6,076	0.78	%
Total interest-earning assets		15,367,616		595,886	5.18	%		14,849,213		382,421	3.44	%
Cash and due from banks		189,324						201,436
Intangible assets		1,012,613						967,023
Other assets		674,478						640,403
Total assets	$	17,244,031					$	16,658,075
Interest-bearing liabilities:
Interest-bearing demand⁽²⁾	$	6,235,322	$	90,947	1.95	%	$	6,556,454	$	13,306	0.27	%
Savings deposits		999,436		2,432	0.33	%		1,123,433		441	0.05	%
Brokered deposits		720,022		26,898	4.99	%		—		—	—	%
Time deposits		1,768,827		34,886	2.64	%		1,305,800		4,149	0.42	%
Total interest-bearing deposits		9,723,607		155,163	2.13	%		8,985,687		17,896	0.27	%
Borrowed funds		1,007,844		38,351	5.08	%		534,296		15,386	3.84	%
Total interest-bearing liabilities		10,731,451		193,514	2.41	%		9,519,983		33,282	0.47	%
Noninterest-bearing deposits		4,073,265						4,745,409
Other liabilities		227,114						192,744
Shareholders’ equity		2,212,201						2,199,939
Total liabilities and shareholders’ equity	$	17,244,031					$	16,658,075
Net interest income/ net interest margin			$	402,372	3.50	%			$	349,139	3.14	%
Cost of funding					1.75	%					0.31	%
Cost of total deposits					1.50	%					0.17	%

Supplemental Margin Information

(Dollars in thousands)	Three Months Ended									Nine Months Ended
	Sep 30, 2023			Jun 30, 2023			Sep 30, 2022			Sep 30, 2023			Sep 30, 2022
Earning asset mix:
Loans held for investment		78.27	%		76.91	%		72.87	%		77.22	%		70.54	%
Loans held for sale		1.48			1.25			0.97			1.14			1.57
Securities		15.50			18.45			21.69			17.91			20.88
Interest-bearing balances with banks		4.75			3.39			4.47			3.73			7.01
Total		100.00	%		100.00	%		100.00	%		100.00	%		100.00	%

Funding sources mix:
Noninterest-bearing demand		25.75	%		27.09	%		34.09	%		27.51	%		33.27	%
Interest-bearing demand		44.18			41.01			45.27			42.12			45.96
Savings		6.39			6.74			7.95			6.75			7.88
Brokered deposits		6.42			5.43			—			4.86			—
Time deposits		13.57			11.64			8.69			11.95			9.15
Borrowed funds		3.69			8.09			4.00			6.81			3.74
Total		100.00	%		100.00	%		100.00	%		100.00	%		100.00	%

Net interest income collected on problem loans	$	(820	)	$	364		$	78		$	(64	)	$	2,788
Total accretion on purchased loans		1,290			874			1,317			3,049			4,573
Total impact on net interest income	$	470		$	1,238		$	1,395		$	2,985		$	7,361
Impact on net interest margin		0.01	%		0.03	%		0.04	%		0.03	%		0.07	%
Impact on loan yield		0.02	%		0.04	%		0.05	%		0.03	%		0.09	%

Loan Portfolio

(Dollars in thousands)	As of
	Sep 30, 2023		Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022
Loan Portfolio:
Commercial, financial, agricultural	$	1,819,891	$	1,729,070	$	1,740,778	$	1,673,883	$	1,513,091
Lease financing		120,724		122,370		121,146		115,013		103,357
Real estate - construction		1,407,364		1,369,019		1,424,352		1,330,337		1,215,056
Real estate - 1-4 family mortgages		3,398,876		3,348,654		3,278,980		3,216,263		3,127,889
Real estate - commercial mortgages		5,313,166		5,252,479		5,085,813		5,118,063		5,016,665
Installment loans to individuals		108,002		108,924		115,356		124,745		128,946
Total loans	$	12,168,023	$	11,930,516	$	11,766,425	$	11,578,304	$	11,105,004

Credit Quality and Allowance for Credit Losses on Loans

(Dollars in thousands)	As of
	Sep 30, 2023			Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022
Nonperforming Assets:
Nonaccruing loans	$	69,541		$	55,439		$	56,626		$	56,545		$	54,278
Loans 90 days or more past due		532			36,321			18,664			331			1,587
Total nonperforming loans		70,073			91,760			75,290			56,876			55,865
Other real estate owned		9,258			5,120			4,818			1,763			2,412
Total nonperforming assets	$	79,331		$	96,880		$	80,108		$	58,639		$	58,277

Criticized Loans
Classified loans	$	186,052		$	219,674		$	222,701		$	200,249		$	193,844
Special Mention loans		89,858			56,616			64,832			86,172			69,883
Criticized loans⁽¹⁾	$	275,910		$	276,290		$	287,533		$	286,421		$	263,727

Allowance for credit losses on loans	$	197,773		$	194,391		$	195,292		$	192,090		$	174,356
Net loan charge-offs	$	1,933		$	3,901		$	4,732		$	2,566		$	1,575
Annualized net loan charge-offs / average loans		0.06	%		0.13	%		0.16	%		0.09	%		0.06	%
Nonperforming loans / total loans		0.58			0.77			0.64			0.49			0.50
Nonperforming assets / total assets		0.46			0.56			0.46			0.35			0.35
Allowance for credit losses on loans / total loans		1.63			1.63			1.66			1.66			1.57
Allowance for credit losses on loans / nonperforming loans		282.24			211.85			259.39			337.73			312.10
Criticized loans / total loans		2.27			2.32			2.44			2.47			2.37

_{⁽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, October 25, 2023.

The webcast is accessible through Renasant’s investor relations website at www.renasant.com or https://event.choruscall.com/mediaframe/webcast.html?webcastid=27s2FjbF. To access the conference via telephone, dial 1-877-513-1143 in the United States and request the Renasant Corporation 2023 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 9960742 or by dialing 1-412-317-0088 internationally and entering the same conference number. Telephone replay access is available until November 8, 2023.

ABOUT RENASANT CORPORATION:
Renasant Corporation is the parent of Renasant Bank, a 119-year-old financial services institution. Renasant has assets of approximately $17.2 billion and operates 194 banking, lending, mortgage, wealth management and insurance offices throughout the Southeast as well as offering factoring and asset-based lending on a nationwide basis.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:

This press release may contain, or incorporate by reference, statements about Renasant Corporation that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “projects,” “anticipates,” “intends,” “estimates,” “plans,” “potential,” “focus,” “possible,” “may increase,” “may fluctuate,” “will likely result,” and similar expressions, or future or conditional verbs such as “will,” “should,” “would” and “could,” are generally forward-looking in nature and not historical facts. Forward-looking statements include information about the Company’s future financial performance, business strategy, projected plans and objectives and are based on the current beliefs and expectations of management. The Company’s management believes these forward-looking statements are reasonable, but they are all inherently subject to significant business, economic and competitive risks and uncertainties, many of which are beyond the Company’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ from those indicated or implied in the forward-looking statements, and such differences may be material. Prospective investors are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties and, accordingly, investors should not place undue reliance on these forward-looking statements, which speak only as of the date they are made.

Important factors currently known to management that could cause our actual results to differ materially from those in forward-looking statements include the following: (i) the Company’s ability to efficiently integrate acquisitions into its operations, retain the customers of these businesses, grow the acquired operations and realize the cost savings expected from an acquisition to the extent and in the timeframe anticipated by management; (ii) the effect of economic conditions and interest rates on a national, regional or international basis; (iii) timing and success of the implementation of changes in operations to achieve enhanced earnings or effect cost savings; (iv) competitive pressures in the consumer finance, commercial finance, insurance, financial services, asset management, retail banking, factoring and mortgage lending and auto lending industries; (v) the financial resources of, and products available from, competitors; (vi) changes in laws and regulations as well as changes in accounting standards; (vii) changes in policy by regulatory agencies; (viii) changes in the securities and foreign exchange markets; (ix) the Company’s potential growth, including its entrance or expansion into new markets, and the need for sufficient capital to support that growth; (x) changes in the quality or composition of the Company’s loan or investment portfolios, including adverse developments in borrower industries or in repayment ability of individual borrowers or issuers of investment securities, or the impact of interest rates on the value of our investment securities portfolio; (xi) an insufficient allowance for credit losses as a result of inaccurate assumptions; (xii) changes in the sources and costs of the capital we use to make loans and otherwise fund our operations, due to deposit outflows, changes in the mix of deposits and the cost and availability of borrowings; (xiii) general economic, market or business conditions, including the impact of inflation; (xiv) changes in demand for loan products and financial services; (xv) concentration of 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 (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) 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 and/or certain charges (such as the recovery of the provision for unfunded commitments), with respect to which the Company is unable to accurately predict when these charges will be incurred or, when incurred, the amount thereof. Management uses these non-GAAP financial measures when evaluating capital utilization and adequacy. In addition, the Company believes that these non-GAAP financial measures facilitate the making of period-to-period comparisons and are meaningful indicators of its operating performance, particularly because these measures are widely used by industry analysts for companies with merger and acquisition activities. Also, because intangible assets such as goodwill and the core deposit intangible and charges such as the provision for unfunded commitments (or the recovery thereof) can vary extensively from company to company and, as to intangible assets, are excluded from the calculation of a financial institution’s regulatory capital, the Company believes that the presentation of this non-GAAP financial information allows readers to more easily compare the Company’s results to information provided in other regulatory reports and the results of other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables below under the caption “Non-GAAP Reconciliations”.

None of the non-GAAP financial information that the Company has included in this release or the accompanying presentation slides are intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. Investors should note that, because there are no standardized definitions for the calculations as well as the results, the Company’s calculations may not be comparable to similarly titled measures presented by other companies. Also, there may be limits in the usefulness of these measures to investors. As a result, the Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

Non-GAAP Reconciliations

(Dollars in thousands, except per share data)	Three Months Ended															Nine Months Ended
	Sep 30, 2023			Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022			Sep 30, 2023			Sep 30, 2022
Adjusted Pre-Provision Net Revenue (“PPNR”)
Net income (GAAP)	$	42,332		$	28,643		$	46,078		$	46,276		$	46,567		$	117,053		$	119,792
Income taxes		10,894			6,634			11,322			12,885			13,563			28,850			32,355
Provision for credit losses (including unfunded commitments)		4,615			2,000			6,460			10,671			9,800			13,075			13,200
Pre-provision net revenue (non-GAAP)	$	57,841		$	37,277		$	63,860		$	69,832		$	69,930		$	158,978		$	165,347
Merger and conversion expense		—			—			—			1,100			—			—			687
Gain on sale of MSR		—			—			—			—			(2,960	)		—			(2,960	)
Restructuring charges		—			—			—			—			—			—			732
Voluntary reimbursement of certain re-presentment NSF fees		—			—			—			1,255			—			—			—
Losses on security sales		—			22,438			—			—			—			22,438			—
Adjusted pre-provision net revenue (non-GAAP)	$	57,841		$	59,715		$	63,860		$	72,187		$	66,970		$	181,416		$	163,806

Adjusted Net Income and Adjusted Tangible Net Income
Net income (GAAP)	$	42,332		$	28,643		$	46,078		$	46,276		$	46,567		$	117,053		$	119,792
Amortization of intangibles		1,311			1,369			1,426			1,195			1,251			4,106			3,927
Tax effect of adjustments noted above⁽¹⁾		(269	)		(266	)		(299	)		(260	)		(265	)		(838	)		(859	)
Tangible net income (non-GAAP)	$	43,374		$	29,746		$	47,205		$	47,211		$	47,553		$	120,321		$	122,860

Net income (GAAP)	$	42,332		$	28,643		$	46,078		$	46,276		$	46,567		$	117,053		$	119,792
Merger and conversion expense		—			—			—			1,100			—			—			687
Gain on sale of MSR		—			—			—			—			(2,960	)		—			(2,960	)
Restructuring charges		—			—			—			—			—			—			732
Initial provision for acquisitions		—			—			—			2,820			—			—			—
Voluntary reimbursement of certain re-presentment NSF fees		—			—			—			1,255			—			—			—
Losses on security sales		—			22,438			—			—			—			22,438			—
Tax effect of adjustments noted above⁽¹⁾		—			(4,353	)		—			(1,127	)		626			(4,579	)		311
Adjusted net income (non-GAAP)	$	42,332		$	46,728		$	46,078		$	50,324		$	44,233		$	134,912		$	118,562
Amortization of intangibles		1,311			1,369			1,426			1,195			1,251			4,106			3,927
Tax effect of adjustments noted above⁽¹⁾		(269	)		(266	)		(299	)		(260	)		(265	)		(838	)		(859	)
Adjusted tangible net income (non-GAAP)	$	43,374		$	47,831		$	47,205		$	51,259		$	45,219		$	138,180		$	121,630

Tangible Assets and Tangible Shareholders’ Equity
Average shareholders’ equity (GAAP)	$	2,231,611		$	2,217,708		$	2,186,794		$	2,139,095		$	2,173,408		$	2,212,201		$	2,199,939
Average intangible assets		1,012,460			1,013,811			1,011,557			967,005			967,154			1,012,613			967,023
Average tangible shareholders’ equity (non-GAAP)	$	1,219,151		$	1,203,897		$	1,175,237		$	1,172,090		$	1,206,254		$	1,199,588		$	1,232,916

Average assets (GAAP)	$	17,235,419		$	17,337,924		$	17,157,898		$	16,577,840		$	16,645,481		$	17,244,031		$	16,658,075
Average intangible assets		1,012,460			1,013,811			1,011,557			967,005			967,154			1,012,613			967,023
Average tangible assets (non-GAAP)	$	16,222,959		$	16,324,113		$	16,146,341		$	15,610,835		$	15,678,327		$	16,231,418		$	15,691,052

Shareholders’ equity (GAAP)	$	2,233,822		$	2,208,628		$	2,187,300		$	2,136,016		$	2,092,281		$	2,233,822		$	2,092,281
Intangible assets		1,011,735			1,013,046			1,014,415			1,015,884			966,461			1,011,735			966,461
Tangible shareholders’ equity (non-GAAP)	$	1,222,087		$	1,195,582		$	1,172,885		$	1,120,132		$	1,125,820		$	1,222,087		$	1,125,820

Total assets (GAAP)	$	17,182,120		$	17,224,342		$	17,474,083		$	16,988,176		$	16,471,099		$	17,182,120		$	16,471,099
Intangible assets		1,011,735			1,013,046			1,014,415			1,015,884			966,461			1,011,735			966,461
Total tangible assets (non-GAAP)	$	16,170,385		$	16,211,296		$	16,459,668		$	15,972,292		$	15,504,638		$	16,170,385		$	15,504,638

Adjusted Performance Ratios
Return on average assets (GAAP)		0.97	%		0.66	%		1.09	%		1.11	%		1.11	%		0.91	%		0.96	%
Adjusted return on average assets (non-GAAP)		0.97			1.08			1.09			1.20			1.05			1.05			0.95
Return on average tangible assets (non-GAAP)		1.06			0.73			1.19			1.20			1.20			0.99			1.05
Pre-provision net revenue to average assets (non-GAAP)		1.33			0.86			1.51			1.67			1.67			1.23			1.33
Adjusted pre-provision net revenue to average assets (non-GAAP)		1.33			1.38			1.51			1.73			1.60			1.41			1.31
Adjusted return on average tangible assets (non-GAAP)		1.06			1.18			1.19			1.30			1.14			1.14			1.04
Return on average equity (GAAP)		7.53			5.18			8.55			8.58			8.50			7.07			7.28
Adjusted return on average equity (non-GAAP)		7.53			8.45			8.55			9.33			8.07			8.15			7.21
Return on average tangible equity (non-GAAP)		14.11			9.91			16.29			15.98			15.64			13.41			13.32
Adjusted return on average tangible equity (non-GAAP)		14.11			15.94			16.29			17.35			14.87			15.40			13.19

Adjusted Diluted Earnings Per Share
Average diluted shares outstanding		56,523,887			56,395,653			56,270,219			56,335,446			56,248,720			56,393,957			56,169,886

Diluted earnings per share (GAAP)	$	0.75		$	0.51		$	0.82		$	0.82		$	0.83		$	2.08		$	2.13
Adjusted diluted earnings per share (non-GAAP)	$	0.75		$	0.83		$	0.82		$	0.89		$	0.79		$	2.39		$	2.11

Tangible Book Value Per Share
Shares outstanding		56,140,713			56,132,478			56,073,658			55,953,104			55,953,104			56,140,713			55,953,104

Book value per share (GAAP)	$	39.79		$	39.35		$	39.01		$	38.18		$	37.39		$	39.79		$	37.39
Tangible book value per share (non-GAAP)	$	21.77		$	21.30		$	20.92		$	20.02		$	20.12		$	21.77		$	20.12

Tangible Common Equity Ratio
Shareholders’ equity to assets (GAAP)		13.00	%		12.82	%		12.52	%		12.57	%		12.70	%		13.00	%		12.70	%
Tangible common equity ratio (non-GAAP)		7.56	%		7.37	%		7.13	%		7.01	%		7.26	%		7.56	%		7.26	%

Adjusted Efficiency Ratio
Net interest income (FTE) (GAAP)	$	130,758		$	133,085		$	138,529		$	140,565		$	132,435		$	402,372		$	349,139

Total noninterest income (GAAP)	$	38,200		$	17,226		$	37,293		$	33,395		$	41,186		$	92,719		$	115,858
Gain on sale of MSR		—			—			—			—			2,960			—			2,960
Losses on security sales		—			(22,438	)		—			—			—			(22,438	)		—
Total adjusted noninterest income (non-GAAP)	$	38,200		$	39,664		$	37,293		$	33,395		$	38,226		$	115,157		$	112,898

Noninterest expense (GAAP)	$	107,669		$	109,165		$	107,708		$	101,582		$	101,574		$	324,542		$	293,873
Amortization of intangibles		1,311			1,369			1,426			1,195			1,251			4,106			3,927
Merger and conversion expense		—			—			—			1,100			—			—			687
Restructuring charges		—			—			—			—			—			—			732
Voluntary reimbursement of certain re-presentment NSF fees		—			—			—			1,255			—			—			—
(Recovery of) provision for unfunded commitments		(700	)		(1,000	)		(1,500	)		183			—			(3,200	)		(100	)
Total adjusted noninterest expense (non-GAAP)	$	107,058		$	108,796		$	107,782		$	97,849		$	100,323		$	323,636		$	288,627

Efficiency ratio (GAAP)		63.73	%		72.63	%		61.26	%		58.39	%		58.50	%		65.55	%		63.20	%
Adjusted efficiency ratio (non-GAAP)		63.36	%		62.98	%		61.30	%		56.25	%		58.78	%		62.53	%		62.47	%

Adjusted Net Interest Income and Adjusted Net Interest Margin
Net interest income (FTE) (GAAP)	$	130,758		$	133,085		$	138,529		$	140,565		$	132,435		$	402,372		$	349,139
Net interest income collected on problem loans		(820	)		364			392			161			78			(64	)		2,788
Accretion recognized on purchased loans		1,290			874			885			625			1,317			3,049			4,573
Adjustments to net interest income	$	470		$	1,238		$	1,277		$	786		$	1,395		$	2,985		$	7,361
Adjusted net interest income (FTE) (non-GAAP)	$	130,288		$	131,847		$	137,252		$	139,779		$	131,040		$	399,387		$	341,778

Net interest margin (GAAP)		3.38	%		3.45	%		3.66	%		3.78	%		3.54	%		3.50	%		3.14	%
Adjusted net interest margin (non-GAAP)		3.37	%		3.43	%		3.63	%		3.76	%		3.50	%		3.47	%		3.07	%

Adjusted Loan Yield
Loan interest income (FTE) (GAAP)	$	184,148		$	175,549		$	163,970		$	147,519		$	124,614		$	523,667		$	329,227
Net interest income collected on problem loans		(820	)		364			392			161			78			(64	)		2,788
Accretion recognized on purchased loans		1,290			874			885			625			1,317			3,049			4,573
Adjusted loan interest income (FTE) (non-GAAP)	$	183,678		$	174,311		$	162,693		$	146,733		$	123,219		$	520,682		$	321,866

Loan yield (GAAP)		6.08	%		5.93	%		5.68	%		5.19	%		4.57	%		5.90	%		4.20	%
Adjusted loan yield (non-GAAP)		6.06	%		5.89	%		5.64	%		5.16	%		4.52	%		5.87	%		4.11	%

_{⁽¹⁾ Tax effect is calculated based on the respective periods’ effective tax rate excluding the impact of discrete items.}

Contacts:	For Media:	For Financials:
	John S. 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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