TUPELO, Miss., July 25, 2023 (GLOBE NEWSWIRE) -- Renasant Corporation ( RNST) (the “Company”) today announced earnings results for the second quarter of 2023.
| (Dollars in thousands, except earnings per share) | Three Months Ended | Six Months Ended | ||||||
| Jun 30, 2023 | Mar 31, 2023 | Jun 30, 2022 | Jun 30, 2023 | Jun 30, 2022 | ||||
| Net income and earnings per share: | ||||||||
| Net income | $28,643 | $46,078 | $39,678 | $74,721 | $73,225 | |||
| After-tax loss on sale of securities | (18,085 | ) | — | — | (17,870 | ) | — | |
| Basic EPS | 0.51 | 0.82 | 0.71 | 1.33 | 1.31 | |||
| Diluted EPS | 0.51 | 0.82 | 0.71 | 1.33 | 1.30 | |||
| Impact to diluted EPS from loss on sale of securities | 0.32 | — | — | 0.31 | — | |||
| Adjusted diluted EPS (Non-GAAP)(1) | 0.83 | 0.82 | 0.72 | 1.64 | 1.32 | |||
“We are pleased with our second quarter results in light of the challenging interest rate environment. In the quarter we continued to take steps to add strength and optionality to our balance sheet and benefit earnings,” remarked C. Mitchell Waycaster, Chief Executive Officer of the Company. “The Company’s focus remains on core funding and maintaining a diverse and granular loan portfolio.”
Quarterly Highlights
Earnings
- Net income for the second quarter of 2023 was $28.6 million with diluted EPS of $0.51
- Net interest income (fully tax equivalent) for the second quarter of 2023 was $133.1 million, down $5.4 million on a linked quarter basis
- For the second quarter of 2023, net interest margin was 3.45%, down 21 basis points on a linked quarter basis
- Cost of total deposits was 150 basis points for the second quarter of 2023, up 51 basis points on a linked quarter basis
- Noninterest income decreased $20.1 million on a linked quarter basis primarily due to losses of $22.4 million on securities sales, as detailed below. The Company’s wealth management and insurance lines of business produced solid results during the second quarter of 2023
- The mortgage division generated $0.6 billion in interest rate lock volume in the second quarter of 2023. Gain on sale margin was 1.66% for the second quarter of 2023, up 51 basis points on a linked quarter basis
- Noninterest expense increased $1.5 million during the second quarter of 2023. Annual merit increases contributed to the increase
Balance Sheet
- Loans increased $164.1 million on a linked quarter basis, which represents 5.6% annualized net loan growth
- The securities portfolio decreased $584.2 million on a linked quarter basis, primarily due to the sale of available-for-sale securities, which generated $489 million in proceeds. The Company recognized a pre-tax loss of $22.4 million and used the sale proceeds to pay down FHLB borrowings
- Deposits at June 30, 2023 increased $183.3 million on a linked quarter basis, driven by an increase in brokered deposits of $224 million. Brokered deposits were $1.1 billion at June 30, 2023. Noninterest bearing deposits decreased $365.9 million on a linked quarter basis and represented 27.5% of total deposits at June 30, 2023
Capital and Liquidity
- Book value per share and tangible book value per share (non-GAAP)(1) increased 0.9% and 1.8%, respectively, on a linked quarter basis
- The Company has a $100 million stock repurchase program that is in effect through October 2023; there was no buyback activity during the second quarter of 2023
Credit Quality
- The Company recorded a provision for credit losses on loans of $3.0 million and a recovery of credit losses on unfunded commitments (included in noninterest expense) of $1.0 million for the second quarter of 2023
- The ratio of allowance for credit losses on loans to total loans was relatively stable at 1.63% at June 30, 2023
- The coverage ratio, or the allowance for credit losses on loans to nonperforming loans, was 211.85% at June 30, 2023, compared to 259.39% at March 31, 2023
- Net loan charge-offs for the second quarter of 2023 were $3.9 million, or 0.13% of average loans on an annualized basis
- Loans 30-89 days past due to total loans decreased 33 basis points on a linked quarter basis to 0.10%. Nonperforming loans to total loans increased to 0.77% at June 30, 2023 compared to 0.64% at March 31, 2023 and criticized loans (which include classified and special mention loans) to total loans decreased to 2.32% at June 30, 2023, compared to 2.44% at March 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 | Six Months Ended | |||||||||||||
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Jun 30, 2023 | Jun 30, 2022 | |||||||||
| Interest income | |||||||||||||||
| Loans held for investment | $ | 173,198 | $ | 161,787 | $ | 145,360 | $ | 123,100 | $ | 106,409 | $ | 334,985 | $ | 202,238 | |
| Loans held for sale | 2,990 | 1,737 | 1,688 | 2,075 | 2,586 | 4,727 | 5,449 | ||||||||
| Securities | 14,000 | 15,091 | 15,241 | 14,500 | 12,471 | 29,091 | 23,306 | ||||||||
| Other | 6,978 | 5,430 | 2,777 | 3,458 | 1,954 | 12,408 | 2,618 | ||||||||
| Total interest income | 197,166 | 184,045 | 165,066 | 143,133 | 123,420 | 381,211 | 233,611 | ||||||||
| Interest expense | |||||||||||||||
| Deposits | 51,391 | 32,866 | 17,312 | 7,241 | 5,018 | 84,257 | 10,655 | ||||||||
| Borrowings | 15,559 | 15,404 | 9,918 | 5,574 | 4,887 | 30,963 | 9,812 | ||||||||
| Total interest expense | 66,950 | 48,270 | 27,230 | 12,815 | 9,905 | 115,220 | 20,467 | ||||||||
| Net interest income | 130,216 | 135,775 | 137,836 | 130,318 | 113,515 | 265,991 | 213,144 | ||||||||
| Provision for loan losses | 3,000 | 7,960 | 10,488 | 9,800 | 2,000 | 10,960 | 3,500 | ||||||||
| Net interest income after provision for credit losses | 127,216 | 127,815 | 127,348 | 120,518 | 111,515 | 255,031 | 209,644 | ||||||||
| Noninterest income | 17,226 | 37,293 | 33,395 | 41,186 | 37,214 | 54,519 | 74,672 | ||||||||
| Noninterest expense | 109,165 | 107,708 | 101,582 | 101,574 | 98,194 | 216,873 | 192,299 | ||||||||
| Income before income taxes | 35,277 | 57,400 | 59,161 | 60,130 | 50,535 | 92,677 | 92,017 | ||||||||
| Income taxes | 6,634 | 11,322 | 12,885 | 13,563 | 10,857 | 17,956 | 18,792 | ||||||||
| Net income | $ | 28,643 | $ | 46,078 | $ | 46,276 | $ | 46,567 | $ | 39,678 | $ | 74,721 | $ | 73,225 | |
| Adjusted net income (non-GAAP)(1) | $ | 46,728 | $ | 46,078 | $ | 50,324 | $ | 44,233 | $ | 40,601 | $ | 92,591 | $ | 74,329 | |
| Adjusted pre-provision net revenue (“PPNR”) (non-GAAP)(1) | $ | 59,715 | $ | 63,860 | $ | 72,187 | $ | 66,970 | $ | 54,172 | $ | 123,575 | $ | 96,836 | |
| Basic earnings per share | $ | 0.51 | $ | 0.82 | $ | 0.83 | $ | 0.83 | $ | 0.71 | $ | 1.33 | $ | 1.31 | |
| Diluted earnings per share | 0.51 | 0.82 | 0.82 | 0.83 | 0.71 | 1.33 | 1.30 | ||||||||
| Adjusted diluted earnings per share (non-GAAP)(1) | 0.83 | 0.82 | 0.89 | 0.79 | 0.72 | 1.64 | 1.32 | ||||||||
| Average basic shares outstanding | 56,107,881 | 56,008,741 | 55,953,104 | 55,947,214 | 55,906,755 | 56,058,585 | 55,858,243 | ||||||||
| Average diluted shares outstanding | 56,395,653 | 56,270,219 | 56,335,446 | 56,248,720 | 56,182,845 | 56,330,295 | 56,130,762 | ||||||||
| Cash dividends per common share | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.44 | $ | 0.44 | |
(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 | Six Months Ended | ||||||||||||||
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Jun 30, 2023 | Jun 30, 2022 | |||||||||
| Return on average assets | 0.66 | % | 1.09 | % | 1.11 | % | 1.11 | % | 0.96 | % | 0.87 | % | 0.89 | % | |
| Adjusted return on average assets (non-GAAP)(1) | 1.08 | 1.09 | 1.20 | 1.05 | 0.98 | 1.08 | 0.90 | ||||||||
| Return on average tangible assets (non-GAAP)(1) | 0.73 | 1.19 | 1.20 | 1.20 | 1.04 | 0.96 | 0.97 | ||||||||
| Adjusted return on average tangible assets (non-GAAP)(1) | 1.18 | 1.19 | 1.30 | 1.14 | 1.07 | 1.18 | 0.98 | ||||||||
| Return on average equity | 5.18 | 8.55 | 8.58 | 8.50 | 7.31 | 6.84 | 6.67 | ||||||||
| Adjusted return on average equity (non-GAAP)(1) | 8.45 | 8.55 | 9.33 | 8.07 | 7.48 | 8.48 | 6.77 | ||||||||
| Return on average tangible equity (non-GAAP)(1) | 9.91 | 16.29 | 15.98 | 15.64 | 13.50 | 13.04 | 12.18 | ||||||||
| Adjusted return on average tangible equity (non-GAAP)(1) | 15.94 | 16.29 | 17.35 | 14.87 | 13.81 | 16.07 | 12.36 | ||||||||
| Efficiency ratio (fully taxable equivalent) | 72.63 | 61.26 | 58.39 | 58.50 | 64.37 | 66.50 | 66.00 | ||||||||
| Adjusted efficiency ratio (non-GAAP)(1) | 62.98 | ||||||||||||||
