Renasant Corp (RNST, Financial) released its earnings results for the third quarter of 2023 on October 24, 2023. The company reported a net income of $42.3 million, down from $46.6 million in the same quarter of the previous year. Diluted earnings per share (EPS) for the quarter were $0.75, compared to $0.83 in Q3 2022.
Financial Highlights
Net interest income for the third quarter of 2023 was $130.8 million, down $2.3 million on a linked quarter basis. The net interest margin was 3.38%, down 7 basis points on a linked quarter basis. The 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.
Balance Sheet and Credit Quality
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 the available-for-sale portfolio of $17.2 million.
The company recorded a provision for credit losses on loans of $5.3 million and a recovery of credit losses on unfunded commitments 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 the end of September 2023.
CEO Commentary
“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."
Despite the decrease in net income and diluted EPS, Renasant Corp (RNST, Financial) demonstrated solid loan growth and good asset quality in Q3 2023. The company's focus on maintaining a strong balance sheet and controlling expenses has positioned it well for future opportunities.
