UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (662 ) 680-1001
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On July 26, 2022, Renasant Corporation (“Renasant”) issued a press release announcing earnings for the second quarter of 2022. The press release is furnished as Exhibit 99.1 to this Form 8-K.
Item 7.01. Regulation FD Disclosure
On July 26, 2022, Renasant also made available presentation materials (the “Presentation”) prepared for use with Renasant’s earnings conference call on July 26, 2022. The Presentation is attached hereto and incorporated herein as Exhibit 99.2.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01, including Exhibit 99.2, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such filing.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:
The exhibits furnished herewith may contain, or incorporate by reference, statements about Renasant 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) Renasant’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, 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) Renasant’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 Renasant’s loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers; (xi) an insufficient allowance for credit losses as a result of inaccurate assumptions; (xii) general economic, market or business conditions, including the impact of inflation; (xiii) changes in demand for loan products and financial services; (xiv) concentration of credit exposure; (xv) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships; (xvi) increased cybersecurity risk, including potential network breaches, business disruptions or financial losses; (xvii) civil unrest, natural disasters, epidemics (including the re-emergence of the COVID-19
pandemic) and other catastrophic events in Renasant’s geographic area; (xviii) the impact, extent and timing of technological changes; and (xix) other circumstances, many of which are beyond management’s control.
Management believes that the assumptions underlying Renasant’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 Renasant’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.
Renasant 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.
Item 9.01. Financial Statements and Exhibits.
(d) The following exhibits are furnished herewith:
Exhibit No. Description
99.1 Press release dated July 26, 2022 issued by Renasant Corporation announcing earnings for the second quarter of 2022.
104 The cover page of Renasant Corporation's Form 8-K is formatted in Inline XBRL.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
RENASANT CORPORATION | |||||||||||
Date: July 26, 2022 | By: | /s/ C. Mitchell Waycaster | |||||||||
C. Mitchell Waycaster | |||||||||||
President and Chief Executive Officer | |||||||||||
| Contacts: | For Media: | For Financials: | |||||||||
| John S. Oxford | James C. Mabry IV | ||||||||||
| Senior Vice President | Executive Vice President | ||||||||||
| Director of Marketing | Chief Financial Officer | ||||||||||
| (662) 680-1219 | (662) 680-1281 | ||||||||||
RENASANT CORPORATION ANNOUNCES
EARNINGS FOR THE SECOND QUARTER OF 2022
TUPELO, MISSISSIPPI (July 26, 2022) - Renasant Corporation (NASDAQ: RNST) (the “Company”) today announced earnings results for the second quarter of 2022. Net income for the second quarter of 2022 was $39.7 million, as compared to $40.9 million for the second quarter of 2021. Basic and diluted earnings per share (“EPS”) were $0.71 for the second quarter of 2022, as compared to basic and diluted EPS of $0.73 and $0.72, respectively, for the second quarter of 2021.
"Our results for the second quarter reflect improved profitability on a linked quarter basis. Earnings benefited from expansion in the net interest margin, effective expense management, contributions from our wealth management and insurance lines of business and solid loan growth," remarked C. Mitchell Waycaster, Renasant President and Chief Executive Officer. "The balance sheet continues to reflect good liquidity, core funding, asset quality and capital levels."
Quarterly Highlights
Earnings
•Net income for the second quarter of 2022 was $39.7 million with diluted EPS of $0.71
•Net interest income (fully tax equivalent) for the second quarter of 2022 was $115.3 million, up $13.9 million on a linked quarter basis
•For the second quarter of 2022, net interest margin was 3.11%, up 35 basis points on a linked quarter basis
•Cost of total deposits was 15 basis points for the second quarter of 2022, down 2 basis points on a linked quarter basis
•Our wealth management and insurance lines of business produced strong results during the second quarter of 2022
•Our mortgage division generated $0.9 billion in interest rate lock volume during the second quarter of 2022, compared to $1.2 billion during the first quarter of 2022. Gain on sale margin was 1.27% for the second quarter of 2022, down 54 basis points on a linked quarter basis
1
•Second quarter noninterest expense increased by $4.1 million on a linked quarter basis, primarily driven by an increase in salaries and benefits, as annual merit increases and an increase to our minimum wage took effect during the quarter, and a one-time restructuring charge of $1.2 million resulting from the early termination of a lease agreement
Balance Sheet
•Loans increased $290.3 million, or 11.3% annualized, during the second quarter of 2022 from the balance at March 31, 2022
•The securities portfolio increased $124.6 million during the second quarter of 2022, comprised of net additions to the portfolio during the quarter of $201.0 million and a negative fair market value adjustment in our available-for-sale portfolio of $76.4 million
•Deposits at June 30, 2022 decreased $227.0 million from March 31, 2022, primarily driven by a decrease in interest bearing deposits. Noninterest bearing deposits increased $35.1 million from March 31, 2022 and represented 34.45% of total deposits at June 30, 2022
Capital
•Book value per share and tangible book value per share (non-GAAP)(1) decreased 1.0% and 1.7%, respectively, on a linked quarter basis, driven by a decrease in accumulated other comprehensive income, which lowered tangible book value per share by $0.91
•The Company has a $50 million stock repurchase program that will remain in effect through October 2022; there was no buyback activity during the second quarter of 2022
Credit Quality
•The Company recorded a provision for credit losses on loans of $2.0 million and a provision for unfunded commitments (recorded in other noninterest expense) of $450 thousand for the second quarter of 2022
•The allowance for credit losses on loans to total loans decreased on a linked quarter basis to 1.57% at June 30, 2022 as compared to 1.61% at March 31, 2022
•The coverage ratio, or the allowance for credit losses on loans to nonperforming loans, was 373.21% at June 30, 2022, compared to 318.65% at March 31, 2022
•Net loan charge-offs for the second quarter of 2022 were $2.3 million, or 0.09% of average loans on an annualized basis
•Credit metrics remained relatively stable on a linked quarter basis. Nonperforming loans to total loans decreased to 0.42% at June 30, 2022 compared to 0.51% at March 31, 2022 and criticized loans (which include classified and special mention loans) to total loans increased to 2.57% at June 30, 2022, compared to 2.47% at March 31, 2022
(1)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.
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Income Statement
| (Dollars in thousands, except per share data) | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Jun 30, 2022 | Jun 30, 2021 | ||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||
| Loans held for investment | $ | 106,409 | $ | 95,829 | $ | 98,478 | $ | 102,627 | $ | 109,721 | $ | 202,238 | $ | 221,727 | ||||||||||||
| Loans held for sale | 2,586 | 2,863 | 3,652 | 2,377 | 3,604 | 5,449 | 6,603 | |||||||||||||||||||
| Securities | 12,471 | 10,835 | 9,221 | 8,416 | 7,321 | 23,306 | 13,895 | |||||||||||||||||||
| Other | 1,954 | 664 | 568 | 593 | 345 | 2,618 | 528 | |||||||||||||||||||
| Total interest income | 123,420 | 110,191 | 111,919 | 114,013 | 120,991 | 233,611 | 242,753 | |||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||
| Deposits | 5,018 | 5,637 | 6,056 | 6,972 | 7,669 | 10,655 | 15,948 | |||||||||||||||||||
| Borrowings | 4,887 | 4,925 | 4,381 | 3,749 | 3,743 | 9,812 | 7,578 | |||||||||||||||||||
| Total interest expense | 9,905 | 10,562 | 10,437 | 10,721 | 11,412 | 20,467 | 23,526 | |||||||||||||||||||
| Net interest income | 113,515 | 99,629 | 101,482 | 103,292 | 109,579 | 213,144 | 219,227 | |||||||||||||||||||
| Provision for (recovery of) credit losses | ||||||||||||||||||||||||||
| Provision for (recovery of) loan losses | 2,000 | 1,500 | (500) | (1,200) | — | 3,500 | — | |||||||||||||||||||
| Provision for credit losses on HTM securities | — | — | 32 | — | — | — | — | |||||||||||||||||||
| Total provision for (recovery of) credit losses | 2,000 | 1,500 | (468) | (1,200) | — | 3,500 | — | |||||||||||||||||||
| Net interest income after provision for (recovery of) credit losses | 111,515 | 98,129 | 101,950 | 104,492 | 109,579 | 209,644 | 219,227 | |||||||||||||||||||
| Noninterest income | 37,214 | 37,458 | 47,582 | 50,755 | 47,610 | 74,672 | 128,647 | |||||||||||||||||||
| Noninterest expense | 98,194 | 94,105 | 101,115 | 103,999 | 108,777 | 192,299 | 224,712 | |||||||||||||||||||
| Income before income taxes | 50,535 | 41,482 | 48,417 | 51,248 | 48,412 | 92,017 | 123,162 | |||||||||||||||||||
| Income taxes | 10,857 | 7,935 | 11,363 | 11,185 | 7,545 | 18,792 | 24,387 | |||||||||||||||||||
| Net income | $ | 39,678 | $ | 33,547 | $ | 37,054 | $ | 40,063 | $ | 40,867 | $ | 73,225 | $ | 98,775 | ||||||||||||
Adjusted net income (non-GAAP)(1) | $ | 40,601 | $ | 33,728 | $ | 38,232 | $ | 40,315 | $ | 41,169 | $ | 74,329 | $ | 89,363 | ||||||||||||
Adjusted pre-provision net revenue (“PPNR”) (non-GAAP)(1) | $ | 54,172 | $ | 42,664 | $ | 49,190 | $ | 50,171 | $ | 48,797 | $ | 96,836 | $ | 111,063 | ||||||||||||
| Basic earnings per share | $ | 0.71 | $ | 0.60 | $ | 0.66 | $ | 0.71 | $ | 0.73 | $ | 1.31 | $ | 1.75 | ||||||||||||
| Diluted earnings per share | 0.71 | 0.60 | 0.66 | 0.71 | 0.72 | 1.30 | 1.75 | |||||||||||||||||||
Adjusted diluted earnings per share (non-GAAP)(1) | 0.72 | 0.60 | 0.68 | 0.71 | 0.73 | 1.32 | 1.58 | |||||||||||||||||||
| Average basic shares outstanding | 55,906,755 | 55,809,192 | 55,751,487 | 56,146,285 | 56,325,717 | 55,858,243 | 56,283,195 | |||||||||||||||||||
| Average diluted shares outstanding | 56,182,845 | 56,081,863 | 56,105,050 | 56,447,184 | 56,635,898 | 56,130,762 | 56,578,580 | |||||||||||||||||||
| Cash dividends per common share | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.44 | $ | 0.44 | ||||||||||||
(1)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.
3
Performance Ratios
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Jun 30, 2022 | Jun 30, 2021 | ||||||||||||||||||||
| Return on average assets | 0.96 | % | 0.81 | % | 0.89 | % | 0.99 | % | 1.04 | % | 0.89 | % | 1.28 | % | ||||||||||||
Adjusted return on average assets (non-GAAP)(1) | 0.98 | 0.82 | 0.92 | 0.99 | 1.04 | 0.90 | 1.16 | |||||||||||||||||||
Return on average tangible assets (non-GAAP)(1) | 1.04 | 0.89 | 0.98 | 1.08 | 1.14 | 0.97 | 1.40 | |||||||||||||||||||
Adjusted return on average tangible assets (non-GAAP)(1) | 1.07 | 0.90 | 1.01 | 1.09 | 1.14 | 0.98 | 1.27 | |||||||||||||||||||
| Return on average equity | 7.31 | 6.05 | 6.59 | 7.16 | 7.40 | 6.67 | 9.08 | |||||||||||||||||||
Adjusted return on average equity (non-GAAP)(1) | 7.48 | 6.08 | 6.80 | 7.21 | 7.46 | 6.77 | 8.22 | |||||||||||||||||||
Return on average tangible equity (non-GAAP)(1) | 13.50 | 10.93 | 11.94 | 13.05 | 13.54 | 12.18 | 16.66 | |||||||||||||||||||
Adjusted return on average tangible equity (non-GAAP)(1) | 13.81 | 10.99 | 12.31 | 13.13 | 13.64 | 12.36 | 15.11 | |||||||||||||||||||
| Efficiency ratio (fully taxable equivalent) | 64.37 | 67.78 | 67.04 | 66.77 | 68.49 | 66.00 | 64.00 | |||||||||||||||||||
Adjusted efficiency ratio (non-GAAP)(1) | 62.44 | 67.02 | 64.18 | 66.06 | 67.28 | 64.63 | 65.47 | |||||||||||||||||||
| Dividend payout ratio | 30.99 | 36.67 | 33.33 | 30.99 | 30.14 | 33.59 | 25.14 | |||||||||||||||||||
Capital and Balance Sheet Ratios
| As of | |||||||||||||||||
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | |||||||||||||
| Shares outstanding | 55,932,017 | 55,880,666 | 55,756,233 | 55,747,407 | 56,350,878 | ||||||||||||
| Market value per share | $ | 28.81 | $ | 33.45 | $ | 37.95 | $ | 36.05 | $ | 40.00 | |||||||
| Book value per share | 37.85 | 38.25 | 39.63 | 39.53 | 39.11 | ||||||||||||
Tangible book value per share (non-GAAP)(1) | 20.55 | 20.91 | 22.35 | 22.22 | 21.95 | ||||||||||||
| Shareholders' equity to assets | 12.74 | % | 12.68 | % | 13.15 | % | 13.64 | % | 13.75 | % | |||||||
Tangible common equity ratio (non-GAAP)(1) | 7.34 | 7.35 | 7.86 | 8.15 | 8.22 | ||||||||||||
| Leverage ratio | 9.16 | 9.00 | 9.15 | 9.18 | 9.30 | ||||||||||||
| Common equity tier 1 capital ratio | 10.74 | 10.78 | 11.18 | 11.02 | 11.14 | ||||||||||||
| Tier 1 risk-based capital ratio | 11.60 | 11.67 | 12.10 | 11.94 | 12.07 | ||||||||||||
| Total risk-based capital ratio | 15.34 | 15.51 | 16.14 | 14.66 | 15.11 | ||||||||||||
(1)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.
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Noninterest Income and Noninterest Expense
| (Dollars in thousands) | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Jun 30, 2022 | Jun 30, 2021 | ||||||||||||||||||||
| Noninterest income | ||||||||||||||||||||||||||
| Service charges on deposit accounts | $ | 9,734 | $ | 9,562 | $ | 9,751 | $ | 9,337 | $ | 9,458 | $ | 19,296 | $ | 17,481 | ||||||||||||
| Fees and commissions | 4,668 | 3,982 | 3,885 | 3,837 | 4,110 | 8,650 | 8,010 | |||||||||||||||||||
| Insurance commissions | 2,591 | 2,554 | 2,353 | 2,829 | 2,422 | 5,145 | 4,659 | |||||||||||||||||||
| Wealth management revenue | 5,711 | 5,924 | 5,273 | 5,371 | 5,019 | 11,635 | 9,811 | |||||||||||||||||||
| Mortgage banking income | 8,316 | 9,633 | 14,726 | 23,292 | 20,853 | 17,949 | 71,586 | |||||||||||||||||||
| Swap termination gains | — | — | 4,676 | — | — | — | — | |||||||||||||||||||
| Net gains on sales of securities | — | — | 49 | 764 | — | — | 1,357 | |||||||||||||||||||
| BOLI income | 2,331 | 2,153 | 2,048 | 1,602 | 1,644 | 4,484 | 3,716 | |||||||||||||||||||
| Other | 3,863 | 3,650 | 4,821 | 3,723 | 4,104 | 7,513 | 12,027 | |||||||||||||||||||
| Total noninterest income | $ | 37,214 | $ | 37,458 | $ | 47,582 | $ | 50,755 | $ | 47,610 | $ | 74,672 | $ | 128,647 | ||||||||||||
| Noninterest expense | ||||||||||||||||||||||||||
| Salaries and employee benefits | $ | 65,580 | $ | 62,239 | $ | 62,523 | $ | 69,115 | $ | 70,293 | $ | 127,819 | $ | 148,989 | ||||||||||||
| Data processing | 3,590 | 4,263 | 5,346 | 5,277 | 5,652 | 7,853 | 11,103 | |||||||||||||||||||
| Net occupancy and equipment | 11,155 | 11,276 | 11,177 | 11,748 | 11,374 | 22,431 | 23,912 | |||||||||||||||||||
| Other real estate owned | (187) | (241) | (60) | 168 | 104 | (428) | 145 | |||||||||||||||||||
| Professional fees | 2,778 | 3,151 | 3,209 | 2,972 | 2,674 | 5,929 | 5,595 | |||||||||||||||||||
| Advertising and public relations | 3,406 | 4,059 | 2,929 | 2,922 | 3,100 | 7,465 | 6,352 | |||||||||||||||||||
| Intangible amortization | 1,310 | 1,366 | 1,424 | 1,481 | 1,539 | 2,676 | 3,137 | |||||||||||||||||||
| Communications | 1,904 | 2,027 | 2,088 | 2,198 | 2,291 | 3,931 | 4,583 | |||||||||||||||||||
| Merger and conversion related expenses | — | 687 | — | — | — | 687 | — | |||||||||||||||||||
| Restructuring charges (benefit) | 1,187 | (455) | 61 | — | 15 | 732 | 307 | |||||||||||||||||||
| Debt prepayment penalty | — | — | 6,123 | — | — | — | — | |||||||||||||||||||
| Other | 7,471 | 5,733 | 6,295 | 8,118 | 11,735 | 13,204 | 20,589 | |||||||||||||||||||
| Total noninterest expense | $ | 98,194 | $ | 94,105 | $ | 101,115 | $ | 103,999 | $ | 108,777 | $ | 192,299 | $ | 224,712 | ||||||||||||
Mortgage Banking Income
| (Dollars in thousands) | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Jun 30, 2022 | Jun 30, 2021 | ||||||||||||||||||||
| Gain on sales of loans, net | $ | 3,490 | $ | 6,047 | $ | 10,801 | $ | 20,116 | $ | 17,581 | $ | 9,537 | $ | 51,482 | ||||||||||||
| Fees, net | 3,064 | 3,053 | 4,320 | 3,420 | 4,519 | 6,117 | 9,421 | |||||||||||||||||||
| Mortgage servicing income (loss), net | 1,762 | 533 | (395) | (244) | (1,247) | 2,295 | (2,878) | |||||||||||||||||||
| MSR valuation adjustment | — | — | — | — | — | — | 13,561 | |||||||||||||||||||
| Total mortgage banking income | $ | 8,316 | $ | 9,633 | $ | 14,726 | $ | 23,292 | $ | 20,853 | $ | 17,949 | $ | 71,586 | ||||||||||||
5
Balance Sheet
| (Dollars in thousands) | As of | ||||||||||||||||
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | |||||||||||||
| Assets | |||||||||||||||||
| Cash and cash equivalents | $ | 1,010,468 | $ | 1,607,493 | $ | 1,877,965 | $ | 1,476,141 | $ | 1,605,488 | |||||||
| Securities held to maturity, at amortized cost | 488,851 | 487,194 | 416,357 | — | — | ||||||||||||
| Securities available for sale, at fair value | 2,528,253 | 2,405,316 | 2,386,052 | 2,544,643 | 2,163,820 | ||||||||||||
| Loans held for sale, at fair value | 196,598 | 280,464 | 453,533 | 452,869 | 448,959 | ||||||||||||
| Loans: | |||||||||||||||||
| Non purchased | 9,692,116 | 9,338,890 | 9,011,011 | 8,875,880 | 8,892,544 | ||||||||||||
| Purchased | 911,628 | 974,569 | 1,009,903 | 1,140,944 | 1,256,698 | ||||||||||||
| Total loans | 10,603,744 | 10,313,459 | 10,020,914 | 10,016,824 | 10,149,242 | ||||||||||||
| Allowance for credit losses on loans | (166,131) | (166,468) | (164,171) | (170,038) | (172,354) | ||||||||||||
| Loans, net | 10,437,613 | 10,146,991 | 9,856,743 | 9,846,786 | 9,976,888 | ||||||||||||
| Premises and equipment, net | 284,035 | 285,344 | 293,122 | 294,499 | 293,203 | ||||||||||||
| Other real estate owned | 2,807 | 2,062 | 2,540 | 4,705 | 4,939 | ||||||||||||
| Goodwill | 946,291 | 946,291 | 939,683 | 939,683 | 939,683 | ||||||||||||
| Other intangibles | 21,422 | 22,731 | 24,098 | 25,522 | 27,003 | ||||||||||||
| Bank-owned life insurance | 371,298 | 369,344 | 287,359 | 286,088 | 279,444 | ||||||||||||
| Mortgage servicing rights | 94,743 | 91,730 | 89,018 | 86,387 | 84,912 | ||||||||||||
| Other assets | 235,722 | 218,797 | 183,841 | 198,227 | 198,047 | ||||||||||||
| Total assets | $ | 16,618,101 | $ | 16,863,757 | $ | 16,810,311 | $ | 16,155,550 | $ | 16,022,386 | |||||||
Liabilities and Shareholders’ Equity | |||||||||||||||||
| Liabilities | |||||||||||||||||
| Deposits: | |||||||||||||||||
| Noninterest-bearing | $ | 4,741,397 | $ | 4,706,256 | $ | 4,718,124 | $ | 4,492,650 | $ | 4,349,135 | |||||||
| Interest-bearing | 9,022,532 | 9,284,641 | 9,187,600 | 8,762,179 | 8,766,216 | ||||||||||||
| Total deposits | 13,763,929 | 13,990,897 | 13,905,724 | 13,254,829 | 13,115,351 | ||||||||||||
| Short-term borrowings | 112,642 | 111,279 | 13,947 | 11,253 | 14,933 | ||||||||||||
| Long-term debt | 431,553 | 435,416 | 471,209 | 468,863 | 469,406 | ||||||||||||
| Other liabilities | 193,100 | 188,523 | 209,578 | 216,661 | 218,889 | ||||||||||||
| Total liabilities | 14,501,224 | 14,726,115 | 14,600,458 | 13,951,606 | 13,818,579 | ||||||||||||
Shareholders’ equity: | |||||||||||||||||
| Preferred stock | — | — | — | — | — | ||||||||||||
| Common stock | $ | 296,483 | $ | 296,483 | $ | 296,483 | $ | 296,483 | $ | 296,483 | |||||||
| Treasury stock | (112,295) | (114,050) | (118,027) | (118,288) | (97,249) | ||||||||||||
| Additional paid-in capital | 1,298,207 | 1,297,088 | 1,300,192 | 1,298,022 | 1,295,879 | ||||||||||||
| Retained earnings | 789,880 | 762,690 | 741,648 | 717,033 | 689,444 | ||||||||||||
| Accumulated other comprehensive (loss) income | (155,398) | (104,569) | (10,443) | 10,694 | 19,250 | ||||||||||||
Total shareholders’ equity | 2,116,877 | 2,137,642 | 2,209,853 | 2,203,944 | 2,203,807 | ||||||||||||
Total liabilities and shareholders’ equity | $ | 16,618,101 | $ | 16,863,757 | $ | 16,810,311 | $ | 16,155,550 | $ | 16,022,386 | |||||||
6
Net Interest Income and Net Interest Margin
| (Dollars in thousands) | Three Months Ended | ||||||||||||||||||||||||||||
| June 30, 2022 | March 31, 2022 | June 30, 2021 | |||||||||||||||||||||||||||
| Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | |||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||
| Non purchased loans | $ | 9,524,654 | $ | 93,302 | 3.93 | % | $ | 9,085,482 | $ | 84,653 | 3.77 | % | $ | 8,521,028 | $ | 82,774 | 3.90 | % | |||||||||||
| Purchased loans | 944,519 | 14,236 | 6.04 | % | 983,523 | 11,729 | 4.82 | % | 1,328,631 | 17,891 | 5.40 | % | |||||||||||||||||
| PPP loans | 7,863 | 74 | 3.76 | % | 39,506 | 619 | 6.36 | % | 628,462 | 10,120 | 6.46 | % | |||||||||||||||||
| Total loans | 10,477,036 | 107,612 | 4.12 | % | 10,108,511 | 97,001 | 3.88 | % | 10,478,121 | 110,785 | 4.24 | % | |||||||||||||||||
| Loans held for sale | 227,435 | 2,586 | 4.55 | % | 330,442 | 2,863 | 3.48 | % | 461,752 | 3,604 | 3.12 | % | |||||||||||||||||
| Taxable securities | 2,684,624 | 10,355 | 1.54 | % | 2,499,822 | 8,782 | 1.41 | % | 1,503,605 | 5,549 | 1.48 | % | |||||||||||||||||
Tax-exempt securities(1) | 451,878 | 2,719 | 2.41 | % | 438,380 | 2,635 | 2.40 | % | 317,824 | 2,333 | 2.94 | % | |||||||||||||||||
| Total securities | 3,136,502 | 13,074 | 1.67 | % | 2,938,202 | 11,417 | 1.55 | % | 1,821,429 | 7,882 | 1.73 | % | |||||||||||||||||
| Interest-bearing balances with banks | 1,004,226 | 1,954 | 0.78 | % | 1,463,991 | 664 | 0.18 | % | 1,227,962 | 346 | 0.11 | % | |||||||||||||||||
| Total interest-earning assets | 14,845,199 | 125,226 | 3.38 | % | 14,841,146 | 111,945 | 3.05 | % | 13,989,264 | 122,617 | 3.51 | % | |||||||||||||||||
| Cash and due from banks | 206,882 | 206,224 | 195,982 | ||||||||||||||||||||||||||
| Intangible assets | 968,441 | 965,430 | 967,430 | ||||||||||||||||||||||||||
| Other assets | 610,768 | 684,464 | 678,342 | ||||||||||||||||||||||||||
| Total assets | $ | 16,631,290 | $ | 16,697,264 | $ | 15,831,018 | |||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||
Interest-bearing demand(2) | $ | 6,571,905 | $ | 3,598 | 0.22 | % | $ | 6,636,392 | $ | 3,647 | 0.22 | % | $ | 6,109,956 | $ | 4,069 | 0.27 | % | |||||||||||
| Savings deposits | 1,137,607 | 147 | 0.05 | % | 1,097,560 | 139 | 0.05 | % | 969,982 | 185 | 0.08 | % | |||||||||||||||||
| Time deposits | 1,303,735 | 1,273 | 0.39 | % | 1,374,722 | 1,851 | 0.55 | % | 1,564,448 | 3,415 | 0.88 | % | |||||||||||||||||
| Total interest-bearing deposits | 9,013,247 | 5,018 | 0.22 | % | 9,108,674 | 5,637 | 0.25 | % | 8,644,386 | 7,669 | 0.36 | % | |||||||||||||||||
| Borrowed funds | 543,728 | 4,887 | 3.60 | % | 485,777 | 4,925 | 4.08 | % | 483,081 | 3,743 | 3.11 | % | |||||||||||||||||
| Total interest-bearing liabilities | 9,556,975 | 9,905 | 0.42 | % | 9,594,451 | 10,562 | 0.44 | % | 9,127,467 | 11,412 | 0.50 | % | |||||||||||||||||
| Noninterest-bearing deposits | 4,714,161 | 4,651,793 | 4,271,464 | ||||||||||||||||||||||||||
| Other liabilities | 182,617 | 201,353 | 218,344 | ||||||||||||||||||||||||||
| Shareholders’ equity | 2,177,537 | 2,249,667 | 2,213,743 | ||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 16,631,290 | $ | 16,697,264 | $ | 15,831,018 | |||||||||||||||||||||||
| Net interest income/ net interest margin | $ | 115,321 | 3.11 | % | $ | 101,383 | 2.76 | % | $ | 111,205 | 3.19 | % | |||||||||||||||||
| Cost of funding | 0.28 | % | 0.30 | % | 0.34 | % | |||||||||||||||||||||||
| Cost of total deposits | 0.15 | % | 0.17 | % | 0.24 | % | |||||||||||||||||||||||
(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.
7
Net Interest Income and Net Interest Margin, continued
| (Dollars in thousands) | Six Months Ended | |||||||||||||||||||
| June 30, 2022 | June 30, 2021 | |||||||||||||||||||
| Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | |||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||
| Non purchased loans | $ | 9,306,356 | $ | 177,955 | 3.85% | $ | 8,441,910 | $ | 164,702 | 3.93% | ||||||||||
| Purchased loans | 964,001 | 25,965 | 5.42% | 1,391,634 | 38,347 | 5.55% | ||||||||||||||
| PPP loans | 23,592 | 693 | 5.92% | 807,012 | 20,807 | 5.20% | ||||||||||||||
| Total loans | 10,293,949 | 204,613 | 4.00% | 10,640,556 | 223,856 | 4.24% | ||||||||||||||
| Loans held for sale | 278,722 | 5,449 | 3.91% | 434,075 | 6,604 | 3.05% | ||||||||||||||
Taxable securities(1) | 2,592,645 | 19,137 | 1.48% | 1,284,692 | 10,389 | 1.62% | ||||||||||||||
| Tax-exempt securities | 445,154 | 5,354 | 2.41% | 312,084 | 4,617 | 2.96% | ||||||||||||||
| Total securities | 3,037,799 | 24,491 | 1.61% | 1,596,776 | 15,006 | 1.88% | ||||||||||||||
| Interest-bearing balances with banks | 1,233,241 | 2,618 | 0.43% | 1,002,564 | 529 | 0.11% | ||||||||||||||
| Total interest-earning assets | 14,843,711 | 237,171 | 3.21% | 13,673,971 | 245,995 | 3.62% | ||||||||||||||
| Cash and due from banks | 206,559 | 200,906 | ||||||||||||||||||
| Intangible assets | 966,956 | 968,215 | ||||||||||||||||||
| Other assets | 647,254 | 674,262 | ||||||||||||||||||
| Total assets | $ | 16,664,480 | $ | 15,517,354 | ||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
Interest-bearing demand(2) | $ | 6,603,986 | $ | 7,245 | 0.22% | $ | 6,008,093 | $ | 8,002 | 0.27% | ||||||||||
| Savings deposits | 1,117,724 | 286 | 0.05% | 926,370 | 354 | 0.08% | ||||||||||||||
| Time deposits | 1,339,022 | 3,124 | 0.47% | 1,610,113 | 7,593 | 0.95% | ||||||||||||||
| Total interest-bearing deposits | 9,060,732 | 10,655 | 0.24% | 8,544,576 | 15,949 | 0.38% | ||||||||||||||
| Borrowed funds | 514,940 | 9,812 | 3.82% | 483,494 | 7,577 | 3.16% | ||||||||||||||
| Total interest-bearing liabilities | 9,575,672 | 20,467 | 0.43% | 9,028,070 | 23,526 | 0.53% | ||||||||||||||
| Noninterest-bearing deposits | 4,683,446 | 4,066,943 | ||||||||||||||||||
| Other liabilities | 191,938 | 229,257 | ||||||||||||||||||
| Shareholders’ equity | 2,213,424 | 2,193,084 | ||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 16,664,480 | $ | 15,517,354 | ||||||||||||||||
| Net interest income/ net interest margin | $ | 216,704 | 2.94% | $ | 222,469 | 3.28% | ||||||||||||||
| Cost of funding | 0.29% | 0.36% | ||||||||||||||||||
| Cost of total deposits | 0.16% | 0.26% | ||||||||||||||||||
(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.
8
Supplemental Margin Information
| (Dollars in thousands) | Three Months Ended | Six Months Ended | ||||||||||||||||||
| Jun 30, 2022 | Mar 31, 2022 | Jun 30, 2021 | Jun 30, 2022 | Jun 30, 2021 | ||||||||||||||||
| Earning asset mix: | ||||||||||||||||||||
| Loans held for investment, excluding PPP loans | 70.52 | % | 67.84 | % | 70.41 | % | 69.19 | % | 71.91 | % | ||||||||||
| PPP loans | 0.05 | 0.27 | 4.49 | 0.16 | 5.90 | |||||||||||||||
| Loans held for sale | 1.53 | 2.23 | 3.30 | 1.88 | 3.17 | |||||||||||||||
| Securities | 21.13 | 19.80 | 13.02 | 20.47 | 11.68 | |||||||||||||||
| Interest-bearing balances with banks | 6.77 | 9.86 | 8.78 | 8.30 | 7.34 | |||||||||||||||
| Total | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | ||||||||||
| Funding sources mix: | ||||||||||||||||||||
| Noninterest-bearing demand | 33.03 | % | 32.65 | % | 31.88 | % | 32.85 | % | 31.06 | % | ||||||||||
| Interest-bearing demand | 46.05 | 46.59 | 45.60 | 46.31 | 45.88 | |||||||||||||||
| Savings | 7.97 | 7.70 | 7.24 | 7.84 | 7.07 | |||||||||||||||
| Time deposits | 9.14 | 9.65 | 11.68 | 9.39 | 12.30 | |||||||||||||||
| Borrowed funds | 3.81 | 3.41 | 3.60 | 3.61 | 3.69 | |||||||||||||||
| Total | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | ||||||||||
| Net interest income collected on problem loans | $ | 2,276 | $ | 434 | $ | 1,339 | $ | 2,710 | $ | 3,519 | ||||||||||
| Total accretion on purchased loans | 2,021 | 1,235 | 2,638 | 3,256 | 5,726 | |||||||||||||||
| Total impact on net interest income | $ | 4,297 | $ | 1,669 | $ | 3,977 | $ | 5,966 | $ | 9,245 | ||||||||||
| Impact on net interest margin | 0.11 | % | 0.05 | % | 0.11 | % | 0.08 | % | 0.14 | % | ||||||||||
| Impact on loan yield | 0.16 | % | 0.07 | % | 0.15 | % | 0.12 | % | 0.18 | % | ||||||||||
| Interest income on PPP loans | $ | 74 | $ | 619 | $ | 10,120 | $ | 693 | $ | 20,807 | ||||||||||
| PPP impact on net interest margin | — | % | 0.01 | % | 0.15 | % | — | % | 0.12 | % | ||||||||||
| PPP impact on loan yield | — | % | 0.01 | % | 0.14 | % | — | % | 0.08 | % | ||||||||||
9
Loan Portfolio
| (Dollars in thousands) | As of | ||||||||||||||||
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | |||||||||||||
| Loan Portfolio: | |||||||||||||||||
| Commercial, financial, agricultural | $ | 1,489,889 | $ | 1,437,225 | $ | 1,364,879 | $ | 1,368,557 | $ | 1,387,702 | |||||||
| Lease financing | 101,350 | 89,842 | 76,125 | 79,215 | 74,003 | ||||||||||||
| Real estate - construction | 1,126,363 | 1,222,052 | 1,104,896 | 1,091,296 | 1,051,359 | ||||||||||||
| Real estate - 1-4 family mortgages | 3,030,083 | 2,840,979 | 2,724,246 | 2,724,743 | 2,702,091 | ||||||||||||
| Real estate - commercial mortgages | 4,717,513 | 4,577,864 | 4,549,037 | 4,535,730 | 4,530,169 | ||||||||||||
| Installment loans to individuals | 131,163 | 137,115 | 143,340 | 149,821 | 156,987 | ||||||||||||
| Subtotal | 10,596,361 | 10,305,077 | 9,962,523 | 9,949,362 | 9,902,311 | ||||||||||||
| PPP | 7,383 | 8,382 | 58,391 | 67,462 | 246,931 | ||||||||||||
| Total loans | $ | 10,603,744 | $ | 10,313,459 | $ | 10,020,914 | $ | 10,016,824 | $ | 10,149,242 | |||||||
Credit Quality and Allowance for Credit Losses on Loans
| (Dollars in thousands) | As of | ||||||||||||||||
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | |||||||||||||
| Nonperforming Assets: | |||||||||||||||||
| Non purchased | |||||||||||||||||
| Non purchased nonaccruing loans | $ | 32,284 | $ | 32,573 | $ | 30,751 | $ | 29,266 | $ | 27,101 | |||||||
| Non purchased loans 90 days or more past due | 479 | 209 | 1,074 | 908 | 800 | ||||||||||||
| Total non purchased nonperforming loans | 32,763 | 32,782 | 31,825 | 30,174 | 27,901 | ||||||||||||
| Non purchased other real estate owned | 1,332 | 531 | 951 | 2,252 | 1,675 | ||||||||||||
| Total non purchased nonperforming assets | 34,095 | 33,313 | 32,776 | 32,426 | 29,576 | ||||||||||||
| Purchased | |||||||||||||||||
| Purchased nonaccruing loans | $ | 11,613 | $ | 19,422 | $ | 18,613 | $ | 26,492 | $ | 27,690 | |||||||
| Purchased loans 90 days or more past due | 138 | 38 | 367 | 74 | 945 | ||||||||||||
| Total purchased nonperforming loans | 11,751 | 19,460 | 18,980 | 26,566 | 28,635 | ||||||||||||
| Purchased other real estate owned | 1,475 | 1,531 | 1,589 | 2,453 | 3,264 | ||||||||||||
| Total purchased nonperforming assets | $ | 13,226 | $ | 20,991 | $ | 20,569 | $ | 29,019 | $ | 31,899 | |||||||
| Total nonperforming loans | $ | 44,514 | $ | 52,242 | $ | 50,805 | $ | 56,740 | $ | 56,536 | |||||||
| Total nonperforming assets | $ | 47,321 | $ | 54,304 | $ | 53,345 | $ | 61,445 | $ | 61,475 | |||||||
| Allowance for credit losses on loans | $ | 166,131 | $ | 166,468 | $ | 164,171 | $ | 170,038 | $ | 172,354 | |||||||
| Net loan charge-offs | $ | 2,337 | $ | 851 | $ | 5,367 | $ | 1,116 | $ | 752 | |||||||
| Annualized net loan charge-offs / average loans | 0.09 | % | 0.03 | % | 0.21 | % | 0.04 | % | 0.03 | % | |||||||
| Nonperforming loans / total loans | 0.42 | 0.51 | 0.51 | 0.57 | 0.56 | ||||||||||||
| Nonperforming assets / total assets | 0.28 | 0.32 | 0.32 | 0.38 | 0.38 | ||||||||||||
| Allowance for credit losses on loans / total loans | 1.57 | 1.61 | 1.64 | 1.70 | 1.70 | ||||||||||||
| Allowance for credit losses on loans / nonperforming loans | 373.21 | 318.65 | 323.14 | 299.68 | 304.86 | ||||||||||||
Nonperforming loans / total loans excluding PPP loans (non-GAAP)(1) | 0.42 | 0.51 | 0.51 | 0.57 | 0.57 | ||||||||||||
Nonperforming assets / total assets excluding PPP loans (non-GAAP)(1) | 0.28 | 0.32 | 0.32 | 0.38 | 0.39 | ||||||||||||
Allowance for credit losses on loans / total loans excluding PPP loans (non-GAAP)(1) | 1.57 | 1.62 | 1.65 | 1.71 | 1.74 | ||||||||||||
10
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, July 27, 2022.
The webcast can be accessed through Renasant’s investor relations website at www.renasant.com or https://event.choruscall.com/mediaframe/webcast.html?webcastid=ujFQbKbk. To access the conference via telephone, dial 1-877-513-1143 in the United States and request the Renasant Corporation 2022 Second Quarter Earnings Conference Call and Webcast. International participants should dial 1-412-902-4145 to access the conference call.
The webcast will be archived on www.renasant.com beginning one hour after the call and will remain accessible for one year. Replays can also be accessed via telephone by dialing 1-877-344-7529 in the United States and entering conference number 4305224 or by dialing 1-412-317-0088 internationally and entering the same conference number. Telephone replay access is available until August 10, 2022.
ABOUT RENASANT CORPORATION:
Renasant Corporation is the parent of Renasant Bank, a 118-year-old financial services institution. Renasant has assets of approximately $16.6 billion and operates 195 banking, lending, mortgage, wealth management and insurance offices in Mississippi, Tennessee, Alabama, Florida, Georgia, North Carolina and South Carolina.
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, 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 the repayment ability of individual borrowers; (xi) an insufficient allowance for credit losses as a result of inaccurate assumptions; (xii) general economic, market or business conditions, including the impact of inflation; (xiii) changes in demand for loan products and financial services; (xiv) concentration of credit exposure; (xv) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships; (xvi) increased cybersecurity risk, including potential network breaches, business disruptions or financial losses; (xvii) civil unrest, natural disasters, epidemics (including the re-emergence of the COVID-19 pandemic) and other catastrophic events in the Company’s geographic area; (xviii) the impact, extent and timing of technological changes; and (xix) other circumstances, many of which are beyond management’s control.
11
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) core loan yield, (ii) core net interest income and margin, (iii) adjusted pre-provision net revenue, (iv) adjusted net income, (v) adjusted diluted earnings per share, (vi) tangible book value per share, (vii) tangible common equity ratio, (viii) certain asset quality ratios (namely, loans 30-89 past due to total loans, criticized loans to total loans, nonperforming loans to total loans, nonperforming assets to total assets, net charge-offs to average loans and the allowance for credit losses to total loans) in each case excluding PPP loans, (ix) certain performance ratios (namely, the ratio of adjusted pre-provision net revenue to average assets, the return on average assets and on average equity, and the return on average tangible assets and on average tangible common equity (including each on an as-adjusted basis)), and (x) the adjusted efficiency ratio. These non-GAAP financial measures adjust GAAP financial measures to exclude intangible assets and/or certain charges (such as, among others, merger and conversion expenses, COVID-19 related expenses, debt prepayment penalties, swap termination gains, restructuring charges and asset valuation adjustments) with respect to which the Company is unable to accurately predict when these charges will be incurred or, when incurred, the amount thereof or, with respect to core loan yield and its asset quality measures, to exclude the Company’s PPP loans. With respect to COVID-19 related expenses in particular, management added these expenses as a charge to exclude when calculating non-GAAP financial measures because the expenses included within this line item are readily quantifiable and possess the same characteristics with respect to management’s inability to accurately predict the timing or amount thereof as the other charges excluded when calculating non-GAAP financial measures. Management uses these non-GAAP financial measures when evaluating capital utilization and adequacy; with respect to the core loan yield and certain asset quality measures, management excludes PPP loans, which bear an interest rate fixed by Small Business Administration (“SBA”) regulations and are both forgivable and guaranteed by the SBA, to more clearly measure loan yields affected by competitive factors and potential loss in the Company’s loan portfolio and the coverage therefor. 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, charges such as debt prepayment penalties, restructuring charges and COVID-19 related expenses, and the amount of PPP loans 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.
12
Non-GAAP Reconciliations
| (Dollars in thousands, except per share data) | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Jun 30, 2022 | Jun 30, 2021 | ||||||||||||||||||||
Adjusted Pre-Provision Net Revenue (“PPNR”) | ||||||||||||||||||||||||||
| Net income (GAAP) | $ | 39,678 | $ | 33,547 | $ | 37,054 | $ | 40,063 | $ | 40,867 | $ | 73,225 | $ | 98,775 | ||||||||||||
| Income taxes | 10,857 | 7,935 | 11,363 | 11,185 | 7,545 | 18,792 | 24,387 | |||||||||||||||||||
| Provision for (recovery of) credit losses (including unfunded commitments) | 2,450 | 950 | (768) | (1,400) | — | 3,400 | — | |||||||||||||||||||
| Pre-provision net revenue (non-GAAP) | $ | 52,985 | $ | 42,432 | $ | 47,649 | $ | 49,848 | $ | 48,412 | $ | 95,417 | $ | 123,162 | ||||||||||||
| Merger and conversion expense | — | 687 | — | — | — | 687 | — | |||||||||||||||||||
| Debt prepayment penalties | — | — | 6,123 | — | — | — | — | |||||||||||||||||||
| Swap termination gains | — | — | (4,676) | — | — | — | — | |||||||||||||||||||
| MSR valuation adjustment | — | — | — | — | — | — | (13,561) | |||||||||||||||||||
| Restructuring charges (benefit) | 1,187 | (455) | 61 | — | 15 | 732 | 307 | |||||||||||||||||||
COVID-19 related expenses(1) | — | — | 33 | 323 | 370 | — | 1,155 | |||||||||||||||||||
| Adjusted pre-provision net revenue (non-GAAP) | $ | 54,172 | $ | 42,664 | $ | 49,190 | $ | 50,171 | $ | 48,797 | $ | 96,836 | $ | 111,063 | ||||||||||||
| Adjusted Net Income and Adjusted Tangible Net Income | ||||||||||||||||||||||||||
| Net income (GAAP) | $ | 39,678 | $ | 33,547 | $ | 37,054 | $ | 40,063 | $ | 40,867 | $ | 73,225 | $ | 98,775 | ||||||||||||
| Amortization of intangibles | 1,310 | 1,366 | 1,424 | 1,481 | 1,539 | 2,676 | 3,137 | |||||||||||||||||||
Tax effect of adjustments noted above(2) | (291) | (303) | (335) | (323) | (333) | (594) | (697) | |||||||||||||||||||
| Tangible net income (non-GAAP) | $ | 40,697 | $ | 34,610 | $ | 38,143 | $ | 41,221 | $ | 42,073 | $ | 75,307 | $ | 101,215 | ||||||||||||
| Net income (GAAP) | $ | 39,678 | $ | 33,547 | $ | 37,054 | $ | 40,063 | $ | 40,867 | $ | 73,225 | $ | 98,775 | ||||||||||||
| Merger and conversion expense | — | 687 | — | — | — | 687 | — | |||||||||||||||||||
| Debt prepayment penalties | — | — | 6,123 | — | — | — | — | |||||||||||||||||||
| Swap termination gain | — | — | (4,676) | — | — | — | — | |||||||||||||||||||
| MSR valuation adjustment | — | — | — | — | — | — | (13,561) | |||||||||||||||||||
| Restructuring charges (benefit) | 1,187 | (455) | 61 | — | 15 | 732 | 307 | |||||||||||||||||||
COVID-19 related expenses(1) | — | — | 33 | 323 | 370 | — | 1,155 | |||||||||||||||||||
Tax effect of adjustments noted above(2) | (264) | (51) | (363) | (71) | (83) | (315) | 2,687 | |||||||||||||||||||
| Adjusted net income (non-GAAP) | $ | 40,601 | $ | 33,728 | $ | 38,232 | $ | 40,315 | $ | 41,169 | $ | 74,329 | $ | 89,363 | ||||||||||||
| Amortization of intangibles | 1,310 | 1,366 | 1,424 | 1,481 | 1,539 | 2,676 | 3,137 | |||||||||||||||||||
Tax effect of adjustments noted above(2) | (291) | (303) | (335) | (323) | (333) | (594) | (697) | |||||||||||||||||||
| Adjusted tangible net income (non-GAAP) | $ | 41,620 | $ | 34,791 | $ | 39,321 | $ | 41,473 | $ | 42,375 | $ | 76,411 | $ | 91,803 | ||||||||||||
Tangible Assets and Tangible Shareholders’ Equity | ||||||||||||||||||||||||||
Average shareholders’ equity (GAAP) | $ | 2,177,537 | $ | 2,249,667 | $ | 2,231,681 | $ | 2,219,431 | $ | 2,213,743 | $ | 2,213,424 | $ | 2,193,084 | ||||||||||||
| Average intangible assets | 968,441 | 965,430 | 964,575 | 965,960 | 967,430 | 966,956 | 968,215 | |||||||||||||||||||
Average tangible shareholders’ equity (non-GAAP) | $ | 1,209,096 | $ | 1,284,237 | $ | 1,267,106 | $ | 1,253,471 | $ | 1,246,313 | $ | 1,246,468 | $ | 1,224,869 | ||||||||||||
| Average assets (GAAP) | $ | 16,631,290 | $ | 16,697,264 | $ | 16,450,640 | $ | 16,130,149 | $ | 15,831,018 | $ | 16,664,480 | $ | 15,517,354 | ||||||||||||
| Average intangible assets | 968,441 | 965,430 | 964,575 | 965,960 | 967,430 | 966,956 | 968,215 | |||||||||||||||||||
| Average tangible assets (non-GAAP) | $ | 15,662,849 | $ | 15,731,834 | $ | 15,486,065 | $ | 15,164,189 | $ | 14,863,588 | $ | 15,697,524 | $ | 14,549,139 | ||||||||||||
Shareholders’ equity (GAAP) | $ | 2,116,877 | $ | 2,137,642 | $ | 2,209,853 | $ | 2,203,944 | $ | 2,203,807 | $ | 2,116,877 | $ | 2,203,807 | ||||||||||||
| Intangible assets | 967,713 | 969,022 | 963,781 | 965,205 | 966,686 | 967,713 | 966,686 | |||||||||||||||||||
Tangible shareholders’ equity (non-GAAP) | $ | 1,149,164 | $ | 1,168,620 | $ | 1,246,072 | $ | 1,238,739 | $ | 1,237,121 | $ | 1,149,164 | $ | 1,237,121 | ||||||||||||
| Total assets (GAAP) | $ | 16,618,101 | $ | 16,863,757 | $ | 16,810,311 | $ | 16,155,550 | $ | 16,022,386 | $ | 16,618,101 | $ | 16,022,386 | ||||||||||||
| Intangible assets | 967,713 | 969,022 | 963,781 | 965,205 | 966,686 | 967,713 | 966,686 | |||||||||||||||||||
| Total tangible assets (non-GAAP) | $ | 15,650,388 | $ | 15,894,735 | $ | 15,846,530 | $ | 15,190,345 | $ | 15,055,700 | $ | 15,650,388 | $ | 15,055,700 | ||||||||||||
13
| (Dollars in thousands, except per share data) | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Jun 30, 2022 | Jun 30, 2021 | ||||||||||||||||||||
| Adjusted Performance Ratios | ||||||||||||||||||||||||||
| Return on average assets (GAAP) | 0.96 | % | 0.81 | % | 0.89 | % | 0.99 | % | 1.04 | % | 0.89 | % | 1.28 | % | ||||||||||||
| Adjusted return on average assets (non-GAAP) | 0.98 | % | 0.82 | % | 0.92 | % | 0.99 | % | 1.04 | % | 0.90 | % | 1.16 | % | ||||||||||||
| Return on average tangible assets (non-GAAP) | 1.04 | % | 0.89 | % | 0.98 | % | 1.08 | % | 1.14 | % | 0.97 | % | 1.40 | % | ||||||||||||
| Adjusted pre-provision net revenue to average assets (non-GAAP) | 1.31 | % | 1.04 | % | 1.19 | % | 1.23 | % | 1.24 | % | 1.17 | % | 1.44 | % | ||||||||||||
| Adjusted return on average tangible assets (non-GAAP) | 1.07 | % | 0.90 | % | 1.01 | % | 1.09 | % | 1.14 | % | 0.98 | % | 1.27 | % | ||||||||||||
| Return on average equity (GAAP) | 7.31 | % | 6.05 | % | 6.59 | % | 7.16 | % | 7.40 | % | 6.67 | % | 9.08 | % | ||||||||||||
| Adjusted return on average equity (non-GAAP) | 7.48 | % | 6.08 | % | 6.80 | % | 7.21 | % | 7.46 | % | 6.77 | % | 8.22 | % | ||||||||||||
| Return on average tangible equity (non-GAAP) | 13.50 | % | 10.93 | % | 11.94 | % | 13.05 | % | 13.54 | % | 12.18 | % | 16.66 | % | ||||||||||||
| Adjusted return on average tangible equity (non-GAAP) | 13.81 | % | 10.99 | % | 12.31 | % | 13.13 | % | 13.64 | % | 12.36 | % | 15.11 | % | ||||||||||||
| Adjusted Diluted Earnings Per Share | ||||||||||||||||||||||||||
| Average diluted shares outstanding | 56,182,845 | 56,081,863 | 56,105,050 | 56,447,184 | 56,635,898 | 56,130,762 | 56,578,580 | |||||||||||||||||||
| Diluted earnings per share (GAAP) | $ | 0.71 | $ | 0.60 | $ | 0.66 | $ | 0.71 | $ | 0.72 | $ | 1.30 | $ | 1.75 | ||||||||||||
| Adjusted diluted earnings per share (non-GAAP) | $ | 0.72 | $ | 0.60 | $ | 0.68 | $ | 0.71 | $ | 0.73 | $ | 1.32 | $ | 1.58 | ||||||||||||
| Tangible Book Value Per Share | ||||||||||||||||||||||||||
| Shares outstanding | 55,932,017 | 55,880,666 | 55,756,233 | 55,747,407 | 56,350,878 | 55,932,017 | 56,350,878 | |||||||||||||||||||
| Book value per share (GAAP) | $ | 37.85 | $ | 38.25 | $ | 39.63 | $ | 39.53 | $ | 39.11 | $ | 37.85 | $ | 39.11 | ||||||||||||
| Tangible book value per share (non-GAAP) | $ | 20.55 | $ | 20.91 | $ | 22.35 | $ | 22.22 | $ | 21.95 | $ | 20.55 | $ | 21.95 | ||||||||||||
| Tangible Common Equity Ratio | ||||||||||||||||||||||||||
| Shareholders' equity to assets (GAAP) | 12.74 | % | 12.68 | % | 13.15 | % | 13.64 | % | 13.75 | % | 12.74 | % | 13.75 | % | ||||||||||||
| Tangible common equity ratio (non-GAAP) | 7.34 | % | 7.35 | % | 7.86 | % | 8.15 | % | 8.22 | % | 7.34 | % | 8.22 | % | ||||||||||||
| Adjusted Efficiency Ratio | ||||||||||||||||||||||||||
| Net interest income (FTE) (GAAP) | 115,321 | 101,383 | 103,249 | 105,002 | 111,205 | 216,704 | 222,469 | |||||||||||||||||||
| Total noninterest income (GAAP) | 37,214 | 37,458 | 47,582 | 50,755 | 47,610 | 74,672 | 128,647 | |||||||||||||||||||
| MSR valuation adjustment | — | — | — | — | — | — | 13,561 | |||||||||||||||||||
| Swap termination gains | — | — | 4,676 | — | — | — | — | |||||||||||||||||||
| Securities gains | — | — | 49 | 764 | — | — | 1,357 | |||||||||||||||||||
| Total adjusted noninterest income (non-GAAP) | 37,214 | 37,458 | 42,857 | 49,991 | 47,610 | 74,672 | 113,729 | |||||||||||||||||||
| Noninterest expense (GAAP) | 98,194 | 94,105 | 101,115 | 103,999 | 108,777 | 192,299 | 224,712 | |||||||||||||||||||
| Amortization of intangibles | 1,310 | 1,366 | 1,424 | 1,481 | 1,539 | 2,676 | 3,137 | |||||||||||||||||||
| Merger and conversion expense | — | 687 | — | — | — | 687 | — | |||||||||||||||||||
| Debt prepayment penalty | — | — | 6,123 | — | — | — | — | |||||||||||||||||||
| Restructuring charges (benefit) | 1,187 | (455) | 61 | — | 15 | 732 | 307 | |||||||||||||||||||
| Provision (recovery) of unfunded commitments | 450 | (550) | (300) | (200) | — | (100) | — | |||||||||||||||||||
COVID-19 related expenses(1) | — | — | 33 | 323 | 370 | — | 1,155 | |||||||||||||||||||
| Total adjusted noninterest expense (non-GAAP) | 95,247 | 93,057 | 93,774 | 102,395 | 106,853 | 188,304 | 220,113 | |||||||||||||||||||
| Efficiency ratio (GAAP) | 64.37 | % | 67.78 | % | 67.04 | % | 66.77 | % | 68.49 | % | 66.00 | % | 64.00 | % | ||||||||||||
| Adjusted efficiency ratio (non-GAAP) | 62.44 | % | 67.02 | % | 64.18 | % | 66.06 | % | 67.28 | % | 64.63 | % | 65.47 | % | ||||||||||||
14
| (Dollars in thousands, except per share data) | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Jun 30, 2022 | Jun 30, 2021 | ||||||||||||||||||||
| Core Net Interest Income and Core Net Interest Margin | ||||||||||||||||||||||||||
| Net interest income (FTE) (GAAP) | $ | 115,321 | $ | 101,383 | $ | 103,249 | $ | 105,002 | $ | 111,205 | $ | 216,704 | $ | 222,469 | ||||||||||||
| Net interest income collected on problem loans | 2,276 | 434 | 577 | 316 | 1,339 | 2,710 | 3,519 | |||||||||||||||||||
| Accretion recognized on purchased loans | 2,021 | 1,235 | 2,187 | 2,871 | 2,638 | 3,256 | 5,726 | |||||||||||||||||||
| Interest income recognized on PPP loans | 74 | 619 | 485 | 3,503 | 10,120 | 693 | 20,807 | |||||||||||||||||||
| Core net interest income (FTE) (non-GAAP) | $ | 110,950 | $ | 99,095 | $ | 99,999 | $ | 98,312 | $ | 97,108 | $ | 210,045 | $ | 192,417 | ||||||||||||
| Average earning assets (GAAP) | $ | 14,845,199 | $ | 14,841,146 | $ | 14,607,716 | $ | 14,256,421 | $ | 13,989,264 | $ | 14,843,711 | $ | 13,673,971 | ||||||||||||
| Average PPP loans | 7,863 | 39,506 | 62,726 | 126,870 | 628,462 | 23,592 | 807,012 | |||||||||||||||||||
| Average earning assets excluding PPP loans (non-GAAP) | $ | 14,837,336 | $ | 14,801,640 | $ | 14,544,990 | $ | 14,129,551 | $ | 13,360,802 | $ | 14,820,119 | $ | 12,866,959 | ||||||||||||
| Net interest margin (GAAP) | 3.11 | % | 2.76 | % | 2.81 | % | 2.93 | % | 3.19 | % | 2.94 | % | 3.28 | % | ||||||||||||
| Core net interest margin (non-GAAP) | 3.00 | % | 2.71 | % | 2.73 | % | 2.76 | % | 2.92 | % | 2.86 | % | 3.02 | % | ||||||||||||
| Core Loan Yield | ||||||||||||||||||||||||||
| Loan interest income (FTE) (GAAP) | $ | 107,612 | $ | 97,001 | $ | 99,670 | $ | 103,769 | $ | 110,785 | $ | 204,613 | $ | 223,856 | ||||||||||||
| Net interest income collected on problem loans | 2,276 | 434 | 578 | 316 | 1,339 | 2,710 | 3,519 | |||||||||||||||||||
| Accretion recognized on purchased loans | 2,021 | 1,235 | 2,187 | 2,871 | 2,638 | 3,256 | 5,726 | |||||||||||||||||||
| Interest income recognized on PPP loans | 74 | 619 | 485 | 3,503 | 10,120 | 693 | 20,807 | |||||||||||||||||||
| Core loan interest income (FTE) (non-GAAP) | $ | 103,241 | $ | 94,713 | $ | 96,420 | $ | 97,079 | $ | 96,688 | $ | 197,954 | $ | 193,804 | ||||||||||||
| Average loans (GAAP) | $ | 10,477,036 | $ | 10,108,511 | $ | 9,948,610 | $ | 10,017,742 | $ | 10,478,121 | $ | 10,293,949 | $ | 10,640,556 | ||||||||||||
| Average PPP loans | 7,863 | 39,506 | 62,726 | 126,870 | 628,462 | 23,592 | 807,012 | |||||||||||||||||||
| Average loans excluding PPP loans (non-GAAP) | $ | 10,469,173 | $ | 10,069,005 | $ | 9,885,884 | $ | 9,890,872 | $ | 9,849,659 | $ | 10,270,357 | $ | 9,833,544 | ||||||||||||
| Loan yield (GAAP) | 4.12 | % | 3.88 | % | 3.98 | % | 4.11 | % | 4.24 | % | 4.00 | % | 4.24 | % | ||||||||||||
| Core loan yield (non-GAAP) | 3.96 | % | 3.82 | % | 3.87 | % | 3.89 | % | 3.94 | % | 3.89 | % | 3.97 | % | ||||||||||||
| Adjusted Asset Quality Ratios | ||||||||||||||||||||||||||
| Total loans (GAAP) | $ | 10,603,744 | $ | 10,313,459 | $ | 10,020,914 | $ | 10,016,824 | $ | 10,149,242 | $ | 10,603,744 | $ | 10,149,242 | ||||||||||||
| PPP loans | 7,383 | 8,382 | 58,391 | 67,462 | 246,931 | 7,383 | 246,931 | |||||||||||||||||||
| Total loans excluding PPP loans (non-GAAP) | $ | 10,596,361 | $ | 10,305,077 | $ | 9,962,523 | $ | 9,949,362 | $ | 9,902,311 | $ | 10,596,361 | $ | 9,902,311 | ||||||||||||
| Loans 30-89 days past due | $ | 16,910 | $ | 30,617 | $ | 27,604 | $ | 14,806 | $ | 15,077 | $ | 16,910 | $ | 15,077 | ||||||||||||
| Loans 30-89 days past due / total loans (GAAP) | 0.16 | % | 0.30 | % | 0.28 | % | 0.15 | % | 0.15 | % | 0.16 | % | 0.15 | % | ||||||||||||
| Loans 30-89 days past due / total loans excluding PPP loans (non-GAAP) | 0.16 | % | 0.30 | % | 0.28 | % | 0.15 | % | 0.15 | % | 0.16 | % | 0.15 | % | ||||||||||||
| Classified loans | $ | 185,267 | $ | 178,015 | $ | 160,790 | $ | 187,223 | $ | 206,724 | $ | 185,267 | $ | 206,724 | ||||||||||||
| Special Mention loans | 87,476 | 76,949 | 115,496 | 138,497 | 125,507 | 87,476 | 125,507 | |||||||||||||||||||
Criticized loans(3) | $ | 272,743 | $ | 254,964 | $ | 276,286 | $ | 325,720 | $ | 332,231 | $ | 272,743 | $ | 332,231 | ||||||||||||
| Criticized loans / total loans (GAAP) | 2.57 | % | 2.47 | % | 2.76 | % | 3.25 | % | 3.27 | % | 2.57 | % | 3.27 | % | ||||||||||||
| Criticized loans / total loans excluding PPP loans (non-GAAP) | 2.57 | % | 2.47 | % | 2.77 | % | 3.27 | % | 3.36 | % | 2.57 | % | 3.36 | % | ||||||||||||
| Nonperforming loans | $ | 44,514 | $ | 52,242 | $ | 50,805 | $ | 56,740 | $ | 56,536 | $ | 44,514 | $ | 56,536 | ||||||||||||
| Nonperforming loans / total loans (GAAP) | 0.42 | % | 0.51 | % | 0.51 | % | 0.57 | % | 0.56 | % | 0.42 | % | 0.56 | % | ||||||||||||
15
| (Dollars in thousands, except per share data) | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Jun 30, 2022 | Jun 30, 2021 | ||||||||||||||||||||
| Nonperforming loans / total loans excluding PPP loans (non-GAAP) | 0.42 | % | 0.51 | % | 0.51 | % | 0.57 | % | 0.57 | % | 0.42 | % | 0.57 | % | ||||||||||||
| Allowance for credit losses on loans | $ | 166,131 | $ | 166,468 | $ | 164,171 | $ | 170,038 | $ | 172,354 | $ | 166,131 | $ | 172,354 | ||||||||||||
| ACL / total loans (GAAP) | 1.57 | % | 1.61 | % | 1.64 | % | 1.70 | % | 1.70 | % | 1.57 | % | 1.70 | % | ||||||||||||
| ACL / total loans excluding PPP loans (non-GAAP) | 1.57 | % | 1.62 | % | 1.65 | % | 1.71 | % | 1.74 | % | 1.57 | % | 1.74 | % | ||||||||||||
| Average loans (GAAP) | $ | 10,477,036 | $ | 10,108,511 | $ | 9,948,610 | $ | 10,017,742 | $ | 10,478,121 | $ | 10,293,949 | $ | 10,640,556 | ||||||||||||
| Average PPP loans | 7,863 | 39,506 | 62,726 | 126,870 | 628,462 | 23,592 | 807,012 | |||||||||||||||||||
| Average loans excluding PPP loans (non-GAAP) | $ | 10,469,173 | $ | 10,069,005 | $ | 9,885,884 | $ | 9,890,872 | $ | 9,849,659 | $ | 10,270,357 | $ | 9,833,544 | ||||||||||||
| Net charge-offs | $ | 2,337 | $ | 851 | $ | 5,367 | $ | 1,116 | $ | 752 | $ | 3,188 | $ | 3,790 | ||||||||||||
| Annualized net charge-offs / average loans (GAAP) | 0.09 | % | 0.03 | % | 0.21 | % | 0.04 | % | 0.03 | % | 0.06 | % | 0.07 | % | ||||||||||||
| Annualized net charge-offs / average loans excluding PPP loans (non-GAAP) | 0.09 | % | 0.03 | % | 0.22 | % | 0.04 | % | 0.03 | % | 0.06 | % | 0.08 | % | ||||||||||||
| Total assets (GAAP) | $ | 16,618,101 | $ | 16,863,757 | $ | 16,810,311 | $ | 16,155,550 | $ | 16,022,386 | $ | 16,618,101 | $ | 16,022,386 | ||||||||||||
| PPP loans | 7,383 | 8,382 | 58,391 | 67,462 | 246,931 | 7,383 | 246,931 | |||||||||||||||||||
| Total assets excluding PPP loans (non-GAAP) | $ | 16,610,718 | $ | 16,855,375 | $ | 16,751,920 | $ | 16,088,088 | $ | 15,775,455 | $ | 16,610,718 | $ | 15,775,455 | ||||||||||||
| Nonperforming assets | $ | 47,321 | $ | 54,304 | $ | 53,345 | $ | 61,445 | $ | 61,475 | $ | 47,321 | $ | 61,475 | ||||||||||||
| Nonperforming assets / total assets (GAAP) | 0.28 | % | 0.32 | % | 0.32 | % | 0.38 | % | 0.38 | % | 0.28 | % | 0.38 | % | ||||||||||||
| Nonperforming assets / total assets excluding PPP loans (non-GAAP) | 0.28 | % | 0.32 | % | 0.32 | % | 0.38 | % | 0.39 | % | 0.28 | % | 0.39 | % | ||||||||||||
(1)Primarily consists of employee overtime and employee benefit accruals directly related to the response to the COVID-19 pandemic and federal legislation enacted to address the pandemic, such as the CARES Act, and expenses associated with supplying branches with protective equipment and sanitation supplies (such as floor markings and cautionary signage for branches, face coverings and hand sanitizer) as well as more frequent and rigorous branch cleaning.
(2)Tax effect is calculated based on the respective periods’ effective tax rate excluding the impact of discrete items.
(3)Criticized loans include loans in risk rating classifications of classified and special mention.
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Second Quarter 2022 Earnings Call
2 Forward-Looking Statements This presentation may contain various statements about Renasant Corporation (“Renasant,” “we,” “our,” or “us”) 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 our future financial performance, business strategy, projected plans and objectives and are based on the current beliefs and expectations of management. We believe 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 our control. In addition, these forward-looking statements are subject to assumptions about future business strategies and decisions that are subject to change. Actual results may differ from those indicated or implied in the forward-looking statements; 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. 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, 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 the repayment ability of individual borrowers; (xi) an insufficient allowance for credit losses as a result of inaccurate assumptions; (xii) general economic, market or business conditions, including the impact of inflation; (xiii) changes in demand for loan products and financial services; (xiv) concentration of credit exposure; (xv) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships; (xvi) increased cybersecurity risk, including potential network breaches, business disruptions or financial losses; (xvii) civil unrest, natural disasters, epidemics (including the re-emergence of the COVID-19 pandemic) and other catastrophic events in the Company’s geographic area; (xviii) the impact, extent and timing of technological changes; and (xix) other circumstances, many of which are beyond management’s control. Management believes that the assumptions underlying our 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 Renasant’s filings with the Securities and Exchange Commission (“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. We undertake no obligation, and specifically disclaim any obligation, to update or revise our 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.
Overview Note: Financial data as of June 30, 2022 (1) Total revenue is calculated as net interest income plus noninterest income. Company Snapshot Loans and Deposits by State Assets: $16.6 billion Loans: 10.6 Deposits: 13.8 Equity: 2.1 3 MS 23% AL 24% FL 6% GA 30% TN 17% Loans MS 36% AL 14%FL 3% GA 34% TN 13% Deposits 86% 5% 7% 2% YTD Total Revenue(1) Community Banking Wealth Management Mortgage Insurance
55 20 65 10 65 75 20 95 95 85 77 95 81 7524 40 59 40 FLORIDA Jackson Mobile Knoxville Chattanooga Greensboro Raleigh Columbia Nashville Winston-Salem Montgomery Birmingham Columbus Charlotte Jacksonville Memphis Orlando Huntsville Tallahassee Atlanta Wilmington Charleston Savannah Tupelo Greenville MISSISSIPPI ALABAMA TENNESSEE GEORGIA SOUTH CAROLINA NORTH CAROLINA ARKANSAS LOUISIANA Branch (157) Loan Production Office (7) Mortgage (21) Insurance (8) Financial Services (2) 4 Renasant Footprint
Second Quarter Highlights 5 • Net income of $39.7 million with diluted EPS of $0.71 • Net interest margin increased 35 basis points to 3.11% • Loans increased $290.3 million which represents 11.29% annualized net loan growth • Cost of deposits decreased 2 basis points on a linked quarter basis to 0.15%, and noninterest-bearing deposits now represent 34.35% of total deposits • The ratio of allowance for credit losses on loans to total loans decreased to 1.57% • Credit metrics remained stable with nonperforming loans to total loans decreasing to 0.42%
Financial Condition
Total Assets 7 Note: Dollars in millions $16,022 $16,156 $16,810 $16,864 $16,618 $12 ,000 $12 ,500 $13 ,000 $13 ,500 $14 ,000 $14 ,500 $15 ,000 $15 ,500 $16 ,000 $16 ,500 $17 ,000 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022
Loans and Yields 8 Note: Dollars in millions * Other loans are comprised of installment loans to individuals and lease financing, which both have historically constituted less than 5% of the total loan portfolio. ** Core Loan Yield is a non-GAAP financial measure. A reconciliation of GAAP to non-GAAP financial measures is included in the earnings release furnished to the SEC on the same Form 8-K as this presentation under the section “Non-GAAP Reconciliations”. $10,149 $10,017 $10,021 $10,313 $10,604 4.24% 4.11% 3.98% 3.88% 4.12% 3.94% 3.89% 3.87% 3.82% 3.96% 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 1-4 Family Mortgage Commercial Mortgage Construction Other* C&I Paycheck Protection Program ("PPP") Loan Yield Core Loan Yield**
Deposit Mix and Pricing 9 Note: Dollars in millions $13,115 $13,255 $13,906 $13,991 $13,764 0.24% 0.21% 0.18% 0.17% 0.15% 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 Noninterest-bearing Interest-bearing Savings Time Cost of deposits
Core Deposit Funding 35% 48% 8% 7% 2% Noninterest-bearing Interest-bearing** Savings Time < $250,000 Time > $250,000 • 98% of total deposits are considered core deposits* • Average size of commercial and consumer deposit accounts, excluding time deposit accounts, are approximately $94 thousand and $16 thousand, respectively • Commercial and consumer deposit accounts represent 41% and 46%, respectively, of total deposits 10 Deposits as of June 30, 2022 ($13.8 Billion) Mix of Average Deposits Noninterest-bearing demand 21.36 % 25.52 % 34.35 % Interest-bearing demand** 46.16 46.42 47.87 Savings 8.03 6.46 8.29 Time deposits 24.45 21.60 9.49 Total 100.00 % 100.00 % 100.00 % 4Q19 2Q224Q15 *Core deposits include all deposits other than time deposits > $250,000. **Includes money market 1.06% 0.68% 0.33% 0.22% 0.81% 0.47% 0.22% 0.15%0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 2019 2020 2021 Q2 2022 Cost of Interest-bearing Deposits Cost of Total Deposits
Liquidity 11 Note: Dollars in millions 81% 76% 73% 74% 76% 91% $1 $1 $1 $1 $1 $1 $1 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 2018 -2019 Average Loans to Average Deposits Average Loans to Average Deposits 23.52% 24.89% 27.84% 26.68% 24.24% $0 $0 $0 $0 $0 $0 $0 $0 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Cash and Securities to Total Assets 84% 3% 11% 2% 2019 70%2% 21% 7% Q2 2022 Loans Held for Investment Loans Held for Sale Securities Interest Bearing Balances with Banks Shift in Earning Asset Mix
Subordinated Notes $335,451 ACL $133,987 Trust Preferred $108,071 Common Equity Tier 1 $1,347,681 1 Capital Position 12 Tier 1 $1,456 Tier 2 $469 Regulatory Capital as of June 30, 2022 • $50 million stock repurchase program will remain in effect through October 2022; however, there was no buyback activity in the second quarter of 2022 • Consistent dividend payment history, including through the 2008 financial crisis Capital Highlights Note: Dollars in millions * Tangible Common Equity is a non-GAAP financial measure. A reconciliation of GAAP to non-GAAP financial measures is included in the earnings release furnished to the SEC on the same Form 8-K as this presentation under the section “Non-GAAP Reconciliations”. Ratio Tangible Common Equity* 7.35 % 7.34 % Leverage 9.00 9.16 Tier 1 Risk Based 11.67 11.60 Total Risk Based 15.51 15.34 Tier 1 Common Equity 10.78 10.74 1Q 2022 2Q 2022
Asset Quality
2.57% 2.00% 2.50% 3.00% 3.50% 4.00% $200,000 $250,000 $300,000 $350,000 $400,000 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 Criticized Loans/Total Loans* Criticized Loans % of Total Loans, excl. PPP ($ in thousands) 0.16% 0.00% 0.50% 1.00% 1.50% 2.00% $- $25,000 $50,000 $75,000 $100,000 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 Loans 30-89 Days Past Due/ Total Loans 30-89 DPD % of Total Loans ($ in thousands) Asset Quality 14* The ratio of criticized loans to total loans (excluding PPP loans) is a non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is included in the earnings release furnished to the SEC on the same Form 8-K as this presentation under the section “Non-GAAP Reconciliations”.
0.28% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% $- $25,000 $50,000 $75,000 $100,000 $125,000 $150,000 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 NPAs/Total Assets* Nonperforming loans OREO % of Assets, excl. PPP ($ in thousands) 0.09% 0.00% 0.20% 0.40% 0.60% 0.80% $- $5,000 $10,000 $15,000 $20,000 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 Net Charge-offs/Average Loans* Net charge-offs % of Avg Loans, excl. PPP ($ in thousands) Asset Quality 15* Nonperforming assets to total assets (excluding PPP loans) and net charge-offs to average loans (excluding PPP loans) are non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is included in the earnings release furnished to the SEC on the same Form 8-K as this presentation under the section “Non-GAAP Reconciliations”.
1.57% 1.00% 1.20% 1.40% 1.60% 1.80% 2.00% $140,000 $150,000 $160,000 $170,000 $180,000 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 Allowance/Total Loans* Allowance % of Total Loans, excl. PPP ($ in thousands) 373% 200% 250% 300% 350% 400% $140,000 $150,000 $160,000 $170,000 $180,000 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 Allowance/Nonperforming Loans Allowance % of Total NPLs ($ in thousands) ACL Metrics 16* Allowance for credit losses to total loans (excluding PPP) is a non-GAAP financial measure. A reconciliation of GAAP to non-GAAP financial measures is included in the earnings release furnished to the SEC on the same Form 8-K as this presentation under the section “Non-GAAP Reconciliations”.
ACL Summary ($ in thousands) ACL ACL as a % of Loans ACL ACL as a % of Loans SBA Paycheck Protection Program - - - - Commercial, Financial, Agricultural 33,606$ 2.32 30,192$ 2.02 Lease Financing Receivables 1,582 1.76 1,802 1.78 Real Estate - 1-4 Family Mortgage 36,848 1.30 41,910 1.38 Real Estate - Commercial Mortgage 65,231 1.42 64,373 1.36 Real Estate - Construction 18,411 1.51 17,290 1.54 Installment loans to individuals 10,790 7.87 10,564 8.05 Allowance for Credit Losses on Loans 166,468 1.61 166,131 1.57 Allowance for Credit Losses on Deferred Interest 1,266 1,263 Reserve for Unfunded Commitments 19,485 19,935 Total Reserves 187,219$ 187,329$ 6/30/20223/31/2022 17
Loss Absorption Capacity 18 ($ in thousands) 6/30/2022 Allowance for Credit Losses on Loans 166,131$ Reserve for Unfunded Commitments 19,935 Purchase Accounting Discounts 12,075 Total Loss Absorption Capacity 198,141$
Profitability
Net Income & Adjusted Pre-Provision Net Revenue* 20 $40.9 $40.1 $37.1 $33.5 $39.7 $48.8 $50.2 $49.2 $42.7 $54.2 1.24% 1.23% 1.19% 1.04% 1.31% 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 Net Income P Adj. PPNR (non-GAAP)* Adj. PPNR /Avg. Assets (non-GAAP)* Note: Dollars in millions *Adjusted Pre-Provision Net Revenue and Adjusted Pre-Provision Net Revenue/Average Assets are non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is included in the earnings release furnished to the SEC on the same Form 8-K as this presentation under the section “Non-GAAP Reconciliations”.
Diluted Earnings per Share Reported and Adjusted* 21 $.72 $.71 $.66 $.60 $.71 $.73 $.71 $.68 $.60 $.72 $- $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 Diluted EPS (GAAP) Diluted EPS Adjusted (non-GAAP)* * Diluted earnings per share (adjusted) is a non-GAAP financial measure. A reconciliation of GAAP to non-GAAP financial measures is included in the earnings release furnished to the SEC on the same Form 8-K as this presentation under the section “Non-GAAP Reconciliations”.
Profitability Ratios 22 7.40% 7.16% 6.59% 6.05% 7.31% 13.64% 13.13% 12.31% 10.99% 13.81% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 ROE (GAAP) ROTCE (Adjusted) (non-GAAP)* *ROAA (Adjusted) and ROTCE (Adjusted) are non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is included in the earnings release furnished to the SEC on the same Form 8-K as this presentation under the section “Non-GAAP Reconciliations”. 1.04% 0.99% 0.89% 0.81% 0.96% 1.04% 0.99% 0.92% 0.82% 0.98% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 ROAA (GAAP) ROAA (Adjusted) (non-GAAP)* Return on Average Equity (ROE)Return on Average Assets (ROAA)
Net Interest Income (FTE) & Net Interest Margin 23 $111.2 $105.0 $103.3 $101.4 $115.3 3.19% 2.93% 2.81% 2.76% 3.11% 2.92% 2.76% 2.73% 2.71% 3.00% 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 Core NII (FTE)(Non-GAAP)* Non-Core NII NIM Core NIM (Non-GAAP)* Note: Dollars in millions *Core Net Interest Income (FTE) and Core Net Interest Margin are non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is included in the earnings release furnished to the SEC on the same Form 8-K as this presentation under the section “Non-GAAP Reconciliations”.
Note: Dollars in thousands $47,610 $50,755 $47,582 $37,458 $37,214 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 Service Charges Fees and Commissions Insurance Wealth Management Mortgage Banking Securities Gains Other Noninterest Income 24 Service Charges 26% Fees and Commissions 13% Insurance 7% Wealth Management 15% Mortgage Banking 22% Other 17% Q2 2022 - Noninterest Income Contribution
Mortgage Banking 25 Mortgage MixMortgage banking income Gain on sale margin* *Gain on sale margin excludes pipeline fair value adjustments included in “Gain on sales of loans, net” in the table above. ($ in thousands) 2Q21 1Q22 2Q22 Gain on sales of loans, net 17,581$ 6,047$ 3,490$ Fees, net 4,519 3,053 3,064 Mortgage servicing (loss) income, net (1,247) 533 1,762 MSR valuation adjustment - - - Mortgage banking income, net 20,853$ 9,633$ 8,316$ 2.73% 2.23% 2.01% 1.81% 1.27% 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 $1.5 $1.4 $1.2 $1.2 $0.9 $- $0 $0 $1 $1 $1 $1 $1 $2 $2 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 Locked Volume (in billions) (in %) 2Q21 1Q22 2Q22 Wholesale 40 38 39 Retail 60 62 61 Purchase 67 73 80 Refinance 33 27 20
Noninterest Expense and Efficiency Ratio 26 Salaries and employee benefits 67% Data processing 4% Net occupancy and equipment 11% Intangible amortization 1% Other 17% Q2 2022 – Noninterest Expense Mix($ in thousands) 1Q22 2Q22 Change Salaries and employee benefits 62,239$ 65,580$ 3,341$ Data processing 4,263 3,590 (673) Net occupancy and equipment 11,276 11,155 (121) Intangible amortization 1,366 1,310 (56) Restructuring (benefit) charges (455) 1,187 1,642 Other 15,416 15,372 (44) Total 94,105$ 98,194$ 4,089$ 68% 67% 67% 68% 64% 67% 66% 64% 67% 62% 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 Efficiency Ratio Efficiency Ratio (GAAP) Adjusted Efficiency Ratio (non-GAAP)* *Adjusted Efficiency Ratio is a non-GAAP financial measure. A reconciliation of GAAP to non-GAAP financial measures is included in the earnings release furnished to the SEC on the same Form 8-K as this presentation under the section “Non-GAAP Reconciliations”. • Noninterest expense was up $4.1 million on a linked quarter basis primarily due to an increase in salaries and employee benefits related to annual merit increases and increases to our minimum wage, as well as restructuring charges of $1.2 million resulting from the early termination of a lease agreement
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