SEC Filing | Renasant Corporation

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________

FORM 10-Q

________________________________________________________

(Mark One)


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2023


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number: 001-13253

________________________________________________________

RENASANT CORPORATION

(Exact name of registrant as specified in its charter)

________________________________________________________


Mississippi						64-0676974
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)						Identification No.)

209 Troy Street,

Tupelo,

Mississippi

38804-4827

(Address of principal executive offices)

(Zip Code)

(662) 680-1001

(Registrant’s telephone number, including area code)

________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $5.00 par value per share	RNST	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Table of Contents

As of July 31, 2023, 56,136,863 shares of the registrant’s common stock, $5.00 par value per share, were outstanding.

Table of Contents

Renasant Corporation and Subsidiaries

Form 10-Q

For the Quarterly Period Ended June 30, 2023

CONTENTS


		Page
PART I	Financial Information
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets	1
	Consolidated Statements of Income	2
	Consolidated Statements of Comprehensive Income	3
	Consolidated Statements of Changes in Shareholders’ Equity	4
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	43

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	70

Item 4.	Controls and Procedures	70

PART II	Other Information


Item 1A.	Risk Factors	71

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	71

Item 5.	Other Information	72

Item 6.	Exhibits	72

SIGNATURES		73

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

Renasant Corporation and Subsidiaries

Consolidated Balance Sheets

(In Thousands, Except Share Data)


	(Unaudited)
	June 30, 2023		December 31, 2022
Assets
Cash and due from banks	$	211,452	$	193,513
Interest-bearing balances with banks	735,447		382,479
Cash and cash equivalents	946,899		575,992
Securities held to maturity (net of allowance for credit losses of $32 at each of June 30, 2023 and December 31, 2022) (fair value of $1,153,541 and $1,206,540, respectively)	1,273,044		1,324,040
Securities available for sale, at fair value	950,930		1,533,942
Loans held for sale, at fair value	249,615		110,105



Loans held for investment, net of unearned income	11,930,516		11,578,304
Allowance for credit losses on loans	(194,391)		(192,090)
Loans, net	11,736,125		11,386,214
Premises and equipment, net	285,952		283,595
Other real estate owned, net	5,120		1,763
Goodwill	991,665		991,708
Other intangible assets, net	21,381		24,176
Bank-owned life insurance	377,649		373,808
Mortgage servicing rights	87,432		84,448
Other assets	298,530		298,385
Total assets	$	17,224,342	$	16,988,176
Liabilities and shareholders’ equity
Liabilities
Deposits
Noninterest-bearing	$	3,878,953	$	4,558,756
Interest-bearing	10,216,408		8,928,210
Total deposits	14,095,361		13,486,966
Short-term borrowings	257,305		712,232
Long-term debt	429,630		428,133
Other liabilities	233,418		224,829
Total liabilities	15,015,714		14,852,160
Shareholders’ equity
Preferred stock, $0.01 par value – 5,000,000 shares authorized; no shares issued and outstanding	—		—
Common stock, $5.00 par value – 150,000,000 shares authorized; 59,296,725 shares issued; 56,132,478 and 55,953,104 shares outstanding, respectively	296,483		296,483
Treasury stock, at cost – 3,164,247 and 3,343,621 shares, respectively	(105,589)		(111,577)
Additional paid-in capital	1,301,883		1,302,422
Retained earnings	907,312		857,725
Accumulated other comprehensive loss, net of taxes	(191,461)		(209,037)
Total shareholders’ equity	2,208,628		2,136,016
Total liabilities and shareholders’ equity	$	17,224,342	$	16,988,176

See Notes to Consolidated Financial Statements.

Table of Contents

Renasant Corporation and Subsidiaries

Consolidated Statements of Income (Unaudited)

(In Thousands, Except Share Data)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Interest income
Loans	$	176,188	$	108,995	$	339,712	$	207,687
Securities
Taxable	12,300		10,567		25,553		19,501
Tax-exempt	1,700		1,904		3,538		3,805
Other	6,978		1,954		12,408		2,618
Total interest income	197,166		123,420		381,211		233,611
Interest expense
Deposits	51,391		5,018		84,257		10,655
Borrowings	15,559		4,887		30,963		9,812
Total interest expense	66,950		9,905		115,220		20,467
Net interest income	130,216		113,515		265,991		213,144
Provision for credit losses on loans	3,000		2,000		10,960		3,500


Net interest income after provision for credit losses	127,216		111,515		255,031		209,644
Noninterest income
Service charges on deposit accounts	9,733		9,734		18,853		19,296
Fees and commissions	4,987		4,668		9,663		8,650
Insurance commissions	2,809		2,591		5,255		5,145
Wealth management revenue	5,338		5,711		10,478		11,635
Mortgage banking income	9,771		8,316		18,288		17,949
Net loss on sales of securities	(22,438)		—		(22,438)		—
BOLI income	2,402		2,331		5,405		4,484

Other	4,624		3,863		9,015		7,513
Total noninterest income	17,226		37,214		54,519		74,672
Noninterest expense
Salaries and employee benefits	70,637		65,580		140,469		127,819
Data processing	3,684		3,590		7,317		7,853
Net occupancy and equipment	11,865		11,155		23,270		22,431
Other real estate owned	51		(187)		81		(428)
Professional fees	4,012		2,778		7,479		5,929
Advertising and public relations	3,482		3,406		8,168		7,465
Intangible amortization	1,369		1,310		2,795		2,676
Communications	2,226		1,904		4,206		3,931
Merger and conversion related expenses	—		—		—		687
Restructuring charges	—		1,187		—		732


Other	11,839		7,471		23,088		13,204
Total noninterest expense	109,165		98,194		216,873		192,299
Income before income taxes	35,277		50,535		92,677		92,017
Income taxes	6,634		10,857		17,956		18,792
Net income	$	28,643	$	39,678	$	74,721	$	73,225


Basic earnings per share	$	0.51	$	0.71	$	1.33	$	1.31
Diluted earnings per share	$	0.51	$	0.71	$	1.33	$	1.30
Cash dividends per common share	$	0.22	$	0.22	$	0.44	$	0.44

See Notes to Consolidated Financial Statements.

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Renasant Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income (Unaudited)

(In Thousands)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Net income	$	28,643	$	39,678	$	74,721	$	73,225
Other comprehensive income (loss), net of tax:
Securities available for sale:
Unrealized holding losses on securities	(15,930)		(56,958)		(399)		(157,420)
Reclassification adjustment for losses realized in net income	16,816		—		16,816		—

Amortization of unrealized holding losses (gains) on securities transferred to the held to maturity category	2,252		(164)		4,580		(238)
Total securities available for sale	3,138		(57,122)		20,997		(157,658)
Derivative instruments:
Unrealized holding (losses) gains on derivative instruments	(2,361)		6,262		(3,593)		12,641

Total derivative instruments	(2,361)		6,262		(3,593)		12,641
Defined benefit pension and post-retirement benefit plans:


Amortization of net actuarial loss recognized in net periodic pension cost	86		31		172		62
Total defined benefit pension and post-retirement benefit plans	86		31		172		62
Other comprehensive income (loss), net of tax	863		(50,829)		17,576		(144,955)
Comprehensive income (loss)	$	29,506	$	(11,151)	$	92,297	$	(71,730)

See Notes to Consolidated Financial Statements.

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Renasant Corporation and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited)

(In Thousands, Except Share Data)


	Common Stock			Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Six Months Ended June 30, 2023	Shares	Amount
Balance at January 1, 2023	55,953,104	$	296,483	$	(111,577)	$	1,302,422	$	857,725	$	(209,037)	$	2,136,016

Net income	—	—		—		—		46,078		—		46,078
Other comprehensive income	—	—		—		—		—		16,713		16,713
Comprehensive income												62,791
Cash dividends ($0.22 per share)	—	—		—		—		(12,561)		—		(12,561)


Issuance of common stock for stock-based compensation awards	120,554	—		4,018		(6,409)		—		—		(2,391)
Stock-based compensation expense	—	—		—		3,445		—		—		3,445

Balance at March 31, 2023	56,073,658	$	296,483	$	(107,559)	$	1,299,458	$	891,242	$	(192,324)	$	2,187,300
Net income	—	$	—	$	—	$	—	$	28,643	$	—	$	28,643
Other comprehensive income	—	—		—		—		—		863		863
Comprehensive income												29,506
Cash dividends ($0.22 per share)	—	—		—		—		(12,573)		—		(12,573)


Issuance of common stock for stock-based compensation awards	58,820	—		1,970		(970)		—		—		1,000
Stock-based compensation expense	—	—		—		3,395		—		—		3,395

Balance at June 30, 2023	56,132,478	$	296,483	$	(105,589)	$	1,301,883	$	907,312	$	(191,461)	$	2,208,628


	Common Stock			Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Six Months Ended June 30, 2022	Shares	Amount
Balance at January 1, 2022	55,756,233	$	296,483	$	(118,027)	$	1,300,192	$	741,648	$	(10,443)	$	2,209,853

Net income	—	—		—		—		33,547		—		33,547
Other comprehensive loss	—	—		—		—		—		(94,126)		(94,126)
Comprehensive loss												(60,579)
Cash dividends ($0.22 per share)	—	—		—		—		(12,505)		—		(12,505)


Issuance of common stock for stock-based compensation awards	124,433	—		3,977		(6,442)		—		—		(2,465)
Stock-based compensation expense	—	—		—		3,338		—		—		3,338

Balance at March 31, 2022	55,880,666	$	296,483	$	(114,050)	$	1,297,088	$	762,690	$	(104,569)	$	2,137,642
Net income	—	$	—	$	—	$	—	$	39,678	$	—	$	39,678
Other comprehensive loss	—	—		—		—		—		(50,829)		(50,829)
Comprehensive loss												(11,151)
Cash dividends ($0.22 per share)	—	—		—		—		(12,488)		—		(12,488)


Issuance of common stock for stock-based compensation awards	51,351	—		1,755		(1,833)		—		—		(78)
Stock-based compensation expense	—	—		—		2,952		—		—		2,952

Balance at June 30, 2022	55,932,017	$	296,483	$	(112,295)	$	1,298,207	$	789,880	$	(155,398)	$	2,116,877

See Notes to Consolidated Financial Statements.

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Renasant Corporation and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

(In Thousands)


	Six Months Ended June 30,
	2023		2022
Operating activities
Net income	$	74,721	$	73,225
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Provision for credit losses	10,960		3,500
Depreciation, amortization and accretion	18,365		23,947
Deferred income tax expense	302		5,150


Funding of mortgage loans held for sale	(659,921)		(1,076,613)
Proceeds from sales of mortgage loans held for sale	526,853		1,345,924
Gains on sales of mortgage loans held for sale	(9,417)		(9,537)

Losses on sales of securities	22,438		—

Losses (gains) on sales of premises and equipment	7		(236)
Stock-based compensation expense	6,840		6,290

Increase in other assets	(26,264)		(2,867)
Increase (decrease) in other liabilities	3,576		(19,077)
Net cash (used in) provided by operating activities	(31,540)		349,706
Investing activities
Purchases of securities available for sale	—		(609,752)
Proceeds from sales of securities available for sale	488,981		—
Proceeds from call/maturities of securities available for sale	90,830		249,394
Purchases of securities held to maturity	—		(91,803)

Proceeds from call/maturities of securities held to maturity	54,123		17,262
Net increase in loans	(363,231)		(555,936)
Purchases of premises and equipment	(12,353)		(5,865)
Proceeds from sales of premises and equipment	—		933
Purchase of bank-owned life insurance	—		(80,000)
Net change in FHLB stock	13,268		(3,526)
Proceeds from sales of other assets	827		1,524
Net cash paid in acquisition of businesses	—		(10,066)
Other, net	1,668		622
Net cash provided by (used in) investing activities	274,113		(1,087,213)
Financing activities
Net (decrease) increase in noninterest-bearing deposits	(679,803)		23,273
Net increase (decrease) in interest-bearing deposits	1,288,198		(165,068)
Net (decrease) increase in short-term borrowings	(454,927)		69,215

Repayment of long-term debt	—		(32,417)
Cash paid for dividends	(25,134)		(24,993)



Net cash provided by (used in) financing activities