TUPELO, Miss., Oct. 22, 2024 (GLOBE NEWSWIRE) — Renasant Corporation (NYSE: RNST) (the “Company”) today announced earnings results for the third quarter of 2024.
(Dollars in thousands, except earnings per share)Three Months Ended Nine Months Ended Sep 30, 2024Jun 30, 2024Sep 30, 2023 Sep 30, 2024Sep 30, 2023Net income and earnings per share: Net income$72,455$38,846$41,833 $150,710$116,554 After-tax gain on sale of insurance agency 38,951 – – 38,951 – After-tax loss on sale of securities (including impairments) – – – – (17,859)Basic EPS 1.18 0.69 0.75 2.60 2.08 Diluted EPS 1.18 0.69 0.74 2.59 2.07 Adjusted diluted EPS (Non-GAAP)(1) 0.70 0.69 0.74 2.03 2.38 Impact to diluted EPS from after-tax gain on sale of insurance agency 0.63 – – 0.67 – Impact to diluted EPS from after-tax loss on sale of securities (including impairments) – – – – (0.31)
“The financial results for the quarter reflect solid performance and balance sheet strength,” remarked C. Mitchell Waycaster, Chief Executive Officer of the Company. “We were pleased to receive shareholder approval today and look forward to completing our merger with The First in the first half of 2025, pending all required regulatory approvals and satisfaction of all other conditions.”
Quarterly Highlights
Merger Agreement with The First Bancshares, Inc. and Other Transactions
On July 29, 2024, the Company announced its merger with The First Bancshares, Inc. (“The First”). Today, the shareholders of both Renasant and The First approved the merger and the related issuance of shares of Renasant common stock to the shareholders of The FirstOn July 31, 2024, Renasant completed its public offering of an aggregate of 7,187,500 shares of its common stock at a price of $32.00 per share. The net proceeds of the offering after deducting underwriting discounts and other offering expenses were approximately $217.0 millionEffective July 1, 2024, Renasant sold the assets of its insurance agency for cash proceeds of $56.4 million, recognizing a positive after-tax impact to earnings of $34.1 million, which is net of transaction expenses Earnings
Net income for the third quarter of 2024 was $72.5 million; diluted EPS and adjusted diluted EPS (non-GAAP)(1) were $1.18 and $0.70, respectivelyNet interest income (fully tax equivalent) for the third quarter of 2024 was $133.6 million, up $6.0 million on a linked quarter basisFor the third quarter of 2024, net interest margin was 3.36%, up 5 basis points on a linked quarter basisCost of total deposits was 2.51% for the third quarter of 2024, up 4 basis points on a linked quarter basisNoninterest income increased $50.5 million on a linked quarter basis primarily due to the $53.3 million pre-tax gain on the insurance agency sale, offset by the loss of insurance commissions as a result of the saleMortgage banking income decreased $1.3 million on a linked quarter basis. The mortgage division generated $543.6 million in interest rate lock volume in the third quarter of 2024, a decrease of $16.7 million on a linked quarter basis. Gain on sale margin was 1.56% for the third quarter of 2024, down 13 basis points on a linked quarter basisNoninterest expense increased $10.0 million on a linked quarter basis. Merger and conversion expenses of $11.3 million for the third quarter of 2024 related to both the announced merger with The First and the insurance agency sale contributed to the increase Balance Sheet
Loans increased $22.9 million on a linked quarter basis, representing 0.7% annualized net loan growthSecurities decreased $9.0 million on a linked quarter basis. Cash flows related to principal payments reduced securities by $43.4 million which was offset by a positive fair market value adjustment in our available-for-sale portfolio of $34.4 millionDeposits at September 30, 2024 increased $254.5 million on a linked quarter basis. Brokered deposits decreased $31.8 million on a linked quarter basis to $126.8 million at September 30, 2024. Noninterest bearing deposits decreased $9.7 million on a linked quarter basis and represented 24.3% of total deposits at September 30, 2024 Capital and Stock Repurchase Program
Book value per share and tangible book value per share (non-GAAP)(1) increased 0.1% and 8.9%, respectively, on a linked quarter basisEffective October 22, 2024, the Company’s Board of Directors approved a $100.0 million stock repurchase program under which the Company is authorized to repurchase outstanding shares of its common stock either in open market purchases or privately-negotiated transactions. This plan replaces the Company’s $100.0 million stock repurchase program that expired in October 2024. There was no buyback activity during the third quarter of 2024 Credit Quality
The Company recorded a provision for credit losses of $0.9 million for the third quarter of 2024, compared to $3.3 million for the second quarter of 2024The ratio of allowance for credit losses on loans to total loans was 1.59% at September 30, 2024, unchanged on a linked quarter basisThe coverage ratio, or the allowance for credit losses on loans to nonperforming loans, was 168.07% at September 30, 2024, compared to 203.88% at June 30, 2024Net loan charge-offs for the third quarter of 2024 were $0.7 million, or 0.02% of average loans on an annualized basisNonperforming loans to total loans increased to 0.94% at September 30, 2024 compared to 0.78% at June 30, 2024, and criticized loans (which include classified and Special Mention loans) to total loans increased to 3.02% at September 30, 2024, compared to 2.62% at June 30, 2024 (1) This is a non-GAAP financial measure. A reconciliation of all non-GAAP financial measures disclosed in this release from GAAP to non-GAAP is included in the tables at the end of this release. The information below under the heading “Non-GAAP Financial Measures” explains why the Company believes the non-GAAP financial measures in this release provide useful information and describes the other purposes for which the Company uses non-GAAP financial measures.
Income Statement
(Dollars in thousands, except per share data)Three Months Ended Nine Months Ended Sep 30, 2024Jun 30, 2024Mar 31, 2024Dec 31, 2023Sep 30, 2023 Sep 30, 2024Sep 30, 2023Interest income Loans held for investment$202,655 $198,397 $192,390 $188,535$181,129 $593,442 $516,114 Loans held for sale 4,212 3,530 2,308 3,329 3,751 10,050 8,478 Securities 10,304 10,410 10,700 10,728 10,669 31,414 39,760 Other 11,872 7,874 7,781 7,839 10,128 27,527 22,536 Total interest income 229,043 220,211 213,179 210,431 205,677 662,433 586,888 Interest expense Deposits 90,787 87,621 82,613 77,168 70,906 261,021 155,163 Borrowings 7,258 7,564 7,276 7,310 7,388 22,098 38,351 Total interest expense 98,045 95,185 89,889 84,478 78,294 283,119 193,514 Net interest income 130,998 125,026 123,290 125,953 127,383 379,314 393,374 Provision for credit losses Provision for loan losses 1,210 4,300 2,638 2,518 5,315 8,148 16,275 Recovery of unfunded commitments (275) (1,000) (200) – (700) (1,475) (3,200)Total provision for credit losses 935 3,300 2,438 2,518 4,615 6,673 13,075 Net interest income after provision for credit losses 130,063 121,726 120,852 123,435 122,768 372,641 380,299
