Renasant Corporation Announces Earnings for the Third Quarter of 2024, Receipt of Shareholder Approval of the Merger With the First Bancshares, Inc.
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, 2024
Jun 30, 2024
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
Net income and earnings per share:
Net income
$
72,455
$
38,846
$
41,833
$
150,710
$
116,554
After-tax gain on sale of insurance agency
38,951
—
—
38,951
—
After-tax loss on sale of securities (including impairments)
—
—
—
—
(17,859
)
Basic EPS
1.18
0.69
0.75
2.60
2.08
Diluted EPS
1.18
0.69
0.74
2.59
2.07
Adjusted diluted EPS (Non-GAAP)(1)
0.70
0.69
0.74
2.03
2.38
Impact to diluted EPS from after-tax gain on sale of insurance agency
0.63
—
—
0.67
—
Impact to diluted EPS from after-tax loss on sale of securities (including impairments)
—
—
—
—
(0.31
)
"The financial results for the quarter reflect solid performance and balance sheet strength," remarked C. Mitchell Waycaster, Chief Executive Officer of the Company. "We were pleased to receive shareholder approval today and look forward to completing our merger with The First in the first half of 2025, pending all required regulatory approvals and satisfaction of all other conditions."
Quarterly Highlights
Merger Agreement with The First Bancshares, Inc. and Other Transactions
On July 29, 2024, the Company announced its merger with The First Bancshares, Inc. ("The First"). Today, the shareholders of both Renasant and The First approved the merger and the related issuance of shares of Renasant common stock to the shareholders of The First
On July 31, 2024, Renasant completed its public offering of an aggregate of 7,187,500 shares of its common stock at a price of $32.00 per share. The net proceeds of the offering after deducting underwriting discounts and other offering expenses were approximately $217.0 million
Effective July 1, 2024, Renasant sold the assets of its insurance agency for cash proceeds of $56.4 million, recognizing a positive after-tax impact to earnings of $34.1 million, which is net of transaction expenses
Earnings
Net income for the third quarter of 2024 was $72.5 million; diluted EPS and adjusted diluted EPS (non-GAAP)(1) were $1.18 and $0.70, respectively
Net interest income (fully tax equivalent) for the third quarter of 2024 was $133.6 million, up $6.0 million on a linked quarter basis
For the third quarter of 2024, net interest margin was 3.36%, up 5 basis points on a linked quarter basis
Cost of total deposits was 2.51% for the third quarter of 2024, up 4 basis points on a linked quarter basis
Noninterest income increased $50.5 million on a linked quarter basis primarily due to the $53.3 million pre-tax gain on the insurance agency sale, offset by the loss of insurance commissions as a result of the sale
Mortgage banking income decreased $1.3 million on a linked quarter basis. The mortgage division generated $543.6 million in interest rate lock volume in the third quarter of 2024, a decrease of $16.7 million on a linked quarter basis. Gain on sale margin was 1.56% for the third quarter of 2024, down 13 basis points on a linked quarter basis
Noninterest expense increased $10.0 million on a linked quarter basis. Merger and conversion expenses of $11.3 million for the third quarter of 2024 related to both the announced merger with The First and the insurance agency sale contributed to the increase
Balance Sheet
Loans increased $22.9 million on a linked quarter basis, representing 0.7% annualized net loan growth
Securities decreased $9.0 million on a linked quarter basis. Cash flows related to principal payments reduced securities by $43.4 million which was offset by a positive fair market value adjustment in our available-for-sale portfolio of $34.4 million
Deposits at September 30, 2024 increased $254.5 million on a linked quarter basis. Brokered deposits decreased $31.8 million on a linked quarter basis to $126.8 million at September 30, 2024. Noninterest bearing deposits decreased $9.7 million on a linked quarter basis and represented 24.3% of total deposits at September 30, 2024
Capital and Stock Repurchase Program
Book value per share and tangible book value per share (non-GAAP)(1) increased 0.1% and 8.9%, respectively, on a linked quarter basis
Effective October 22, 2024, the Company's Board of Directors approved a $100.0 million stock repurchase program under which the Company is authorized to repurchase outstanding shares of its common stock either in open market purchases or privately-negotiated transactions. This plan replaces the Company's $100.0 million stock repurchase program that expired in October 2024. There was no buyback activity during the third quarter of 2024
Credit Quality
The Company recorded a provision for credit losses of $0.9 million for the third quarter of 2024, compared to $3.3 million for the second quarter of 2024
The ratio of allowance for credit losses on loans to total loans was 1.59% at September 30, 2024, unchanged on a linked quarter basis
The coverage ratio, or the allowance for credit losses on loans to nonperforming loans, was 168.07% at September 30, 2024, compared to 203.88% at June 30, 2024
Net loan charge-offs for the third quarter of 2024 were $0.7 million, or 0.02% of average loans on an annualized basis
Nonperforming loans to total loans increased to 0.94% at September 30, 2024 compared to 0.78% at June 30, 2024, and criticized loans (which include classified and Special Mention loans) to total loans increased to 3.02% at September 30, 2024, compared to 2.62% at June 30, 2024
(1) This is a non-GAAP financial measure. A reconciliation of all non-GAAP financial measures disclosed in this release from GAAP to non-GAAP is included in the tables at the end of this release. The information below under the heading "Non-GAAP Financial Measures" explains why the Company believes the non-GAAP financial measures in this release provide useful information and describes the other purposes for which the Company uses non-GAAP financial measures.
Income Statement
(Dollars in thousands, except per share data)
Three Months Ended
Nine Months Ended
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
Interest income
Loans held for investment
$
202,655
$
198,397
$
192,390
$
188,535
$
181,129
$
593,442
$
516,114
Loans held for sale
4,212
3,530
2,308
3,329
3,751
10,050
8,478
Securities
10,304
10,410
10,700
10,728
10,669
31,414
39,760
Other
11,872
7,874
7,781
7,839
10,128
27,527
22,536
Total interest income
229,043
220,211
213,179
210,431
205,677
662,433
586,888
Interest expense
Deposits
90,787
87,621
82,613
77,168
70,906
261,021
155,163
Borrowings
7,258
7,564
7,276
7,310
7,388
22,098
38,351
Total interest expense
98,045
95,185
89,889
84,478
78,294
283,119
193,514
Net interest income
130,998
125,026
123,290
125,953
127,383
379,314
393,374
Provision for credit losses
Provision for loan losses
1,210
4,300
2,638
2,518
5,315
8,148
16,275
Recovery of unfunded commitments
(275
)
(1,000
)
(200
)
—
(700
)
(1,475
)
(3,200
)
Total provision for credit losses
935
3,300
2,438
2,518
4,615
6,673
13,075
Net interest income after provision for credit losses
130,063
121,726
120,852
123,435
122,768
372,641
380,299
Noninterest income
89,299
38,762
41,381
20,356
38,200
169,442
92,719
Noninterest expense
121,983
111,976
112,912
111,880
108,369
346,871
327,742
Income before income taxes
97,379
48,512
49,321
31,911
52,599
195,212
145,276
Income taxes
24,924
9,666
9,912
3,787
10,766
44,502
28,722
Net income
$
72,455
$
38,846
$
39,409
$
28,124
$
41,833
$
150,710
$
116,554
Adjusted net income (non-GAAP)(1)
$
42,960
$
38,846
$
36,572
$
42,887
$
41,833
$
118,588
$
134,413
Adjusted pre-provision net revenue ("PPNR") (non-GAAP)(1)
$
56,238
$
51,812
$
48,231
$
52,614
$
57,214
$
156,281
$
180,789
Basic earnings per share
$
1.18
$
0.69
$
0.70
$
0.50
$
0.75
$
2.60
$
2.08
Diluted earnings per share
1.18
0.69
0.70
0.50
0.74
2.59
2.07
Adjusted diluted earnings per share (non-GAAP)(1)
0.70
0.69
0.65
0.76
0.74
2.03
2.38
Average basic shares outstanding
61,217,094
56,342,909
56,208,348
56,141,628
56,138,618
57,934,806
56,085,556
Average diluted shares outstanding
61,632,448
56,684,626
56,531,078
56,611,217
56,523,887
58,297,554
56,393,957
Cash dividends per common share
$
0.22
$
0.22
$
0.22
$
0.22
$
0.22
$
0.66
$
0.66
(1) This is a non-GAAP financial measure. A reconciliation of all non-GAAP financial measures disclosed in this release from GAAP to non-GAAP is included in the tables at the end of this release. The information below under the heading "Non-GAAP Financial Measures" explains why the Company believes the non-GAAP financial measures in this release provide useful information and describes the other purposes for which the Company uses non-GAAP financial measures.
Performance Ratios
Three Months Ended
Nine Months Ended
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
Return on average assets
1.63
%
0.90
%
0.92
%
0.65
%
0.96
%
1.16
%
0.90
%
Adjusted return on average assets (non-GAAP)(1)
0.97
0.90
0.86
0.99
0.96
0.91
1.04
Return on average tangible assets (non-GAAP)(1)
1.75
0.98
1.00
0.71
1.05
1.25
0.99
Adjusted return on average tangible assets (non-GAAP)(1)
1.05
0.98
0.93
1.08
1.05
0.99
1.13
Return on average equity
11.29
6.68
6.85
4.93
7.44
8.38
7.04
Adjusted return on average equity (non-GAAP)(1)
6.69
6.68
6.36
7.53
7.44
6.59
8.12
Return on average tangible equity (non-GAAP)(1)
18.83
12.04
12.45
9.26
13.95
14.69
13.35
Adjusted return on average tangible equity (non-GAAP)(1)
11.26
12.04
11.58
13.94
13.95
11.61
15.35
Efficiency ratio (fully taxable equivalent)
54.73
67.31
67.52
75.11
64.38
62.33
66.28
Adjusted efficiency ratio (non-GAAP)(1)
64.62
66.60
68.23
66.18
63.60
66.46
62.61
Dividend payout ratio
18.64
31.88
31.43
44.00
29.33
25.38
31.73
Capital and Balance Sheet Ratios
As of
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Shares outstanding
63,564,028
56,367,924
56,304,860
56,142,207
56,140,713
Market value per share
$
32.50
$
30.54
$
31.32
$
33.68
$
26.19
Book value per share
41.82
41.77
41.25
40.92
39.78
Tangible book value per share (non-GAAP)(1)
26.02
23.89
23.32
22.92
21.76
Shareholders' equity to assets
14.80
%
13.45
%
13.39
%
13.23
%
13.00
%
Tangible common equity ratio (non-GAAP)(1)
9.76
8.16
8.04
7.87
7.55
Leverage ratio
11.32
9.81
9.75
9.62
9.48
Common equity tier 1 capital ratio
12.88
10.75
10.59
10.52
10.46
Tier 1 risk-based capital ratio
13.67
11.53
11.37
11.30
11.25
Total risk-based capital ratio
17.32
15.15
15.00
14.93
14.91
(1) This is a non-GAAP financial measure. A reconciliation of all non-GAAP financial measures disclosed in this release from GAAP to non-GAAP is included in the tables at the end of this release. The information below under the heading "Non-GAAP Financial Measures" explains why the Company believes the non-GAAP financial measures in this release provide useful information and describes the other purposes for which the Company uses non-GAAP financial measures.
Noninterest Income and Noninterest Expense
(Dollars in thousands)
Three Months Ended
Nine Months Ended
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
Noninterest income
Service charges on deposit accounts
$
10,438
$
10,286
$
10,506
$
10,603
$
9,743
$
31,230
$
28,596
Fees and commissions
4,116
3,944
3,949
4,130
4,108
12,009
13,771
Insurance commissions
—
2,758
2,716
2,583
3,264
5,474
8,519
Wealth management revenue
5,835
5,684
5,669
5,668
5,986
17,188
16,464
Mortgage banking income
8,447
9,698
11,370
6,592
7,533
29,515
25,821
Gain on sale of insurance agency
53,349
—
—
—
—
53,349
—
Net losses on sales of securities (including impairments)
—
—
—
(19,352
)
—
—
(22,438
)
Gain on extinguishment of debt
—
—
56
620
—
56
—
BOLI income
2,858
2,701
2,691
2,589
2,469
8,250
7,874
Other
4,256
3,691
4,424
6,923
5,097
12,371
14,112
Total noninterest income
$
89,299
$
38,762
$
41,381
$
20,356
$
38,200
$
169,442
$
92,719
Noninterest expense
Salaries and employee benefits
$
71,307
$
70,731
$
71,470
$
71,841
$
69,458
$
213,508
$
209,927
Data processing
4,133
3,945
3,807
3,971
3,907
11,885
11,224
Net occupancy and equipment
11,415
11,844
11,389
11,653
11,548
34,648
34,818
Other real estate owned
56
105
107
306
(120
)
268
(39
)
Professional fees
3,189
3,195
3,348
2,854
3,338
9,732
10,817
Advertising and public relations
3,677
3,807
4,886
3,084
3,474
12,370
11,642
Intangible amortization
1,160
1,186
1,212
1,274
1,311
3,558
4,106
Communications
2,176
2,112
2,024
2,026
2,006
6,312
6,212
Merger and conversion related expenses
11,273
—
—
—
—
11,273
—
Other
13,597
15,051
14,669
14,871
13,447
43,317
39,035
Total noninterest expense
$
121,983
$
111,976
$
112,912
$
111,880
$
108,369
$
346,871
$
327,742
Mortgage Banking Income
(Dollars in thousands)
Three Months Ended
Nine Months Ended
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Sep 30, 2024
Sep 30, 2023
Gain on sales of loans, net
$
4,499
$
5,199
$
4,535
$
1,860
$
3,297
$
14,233
$
12,713
Fees, net
2,646
2,866
1,854
2,010
2,376
7,366
7,041
Mortgage servicing income, net
1,302
1,633
4,981
2,722
1,860
7,916
6,067
Total mortgage banking income
$
8,447
$
9,698
$
11,370
$
6,592
$
7,533
$
29,515
$
25,821
Balance Sheet
(Dollars in thousands)
As of
Sep 30, 2024
Jun 30, 2024
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Assets
Cash and cash equivalents
$
1,275,620
$
851,906
$
844,400
