Renasant Corporation Q3 FY2025 earnings call

• Integration with The First continues well, systems conversion in early August. - Loan growth of almost 10% during the quarter despite largest conversion. - Net income $59.8 million, adjusted earnings $72.9 million. - Loans up $462 million, deposits down $158 million due to seasonal factors. - Net interest margin flat, adjusted margin up; adjusted total cost of deposits and loan yields changed. - Adjusted return on assets and equity improved. - Credit loss provision and net charge-offs mentioned. - Noninterest income and expense discussed, with expected efficiency savings.

Renasant's net income was $59.8 million or $0.63 per diluted share. Adjusted earnings excluding merger charges were $72.9 million or $0.77 per diluted share. Loans were up $462 million on a linked quarter basis (9.9% annualized). Deposits were down $158 million from the second quarter due to seasonal public fund decrease. Reported net interest margin was flat at 3.85%, while adjusted margin was up 4 basis points to 3.62%. Adjusted total cost of deposits increased 4 basis points to 2.08%, and adjusted loan yields increased 5 basis points to 6.23%. Adjusted return on average assets was 1.09% (12 basis points improvement from a year ago), and adjusted return on tangible common equity was 14.22% (296 basis points improvement). Credit loss provision on loans was $10.5 million, net charge-offs were $4.3 million, and ACL as a percentage of total loans declined 1 basis point to 1.56%. Adjusted pre-provision net revenue was $103.2 million. Noninterest income was $46 million, noninterest expense was $183.8 million, with noninterest expense excluding merger and conversion expenses at $166.3 million (linked quarter increase of $3.6 million).

• Q3 results position to achieve profitability goals related to ROA, ROE, efficiency ratio. - Look forward to additional profitability improvements as efficiency savings are realized. - Expect modest decreases in core NIE in Q4 and Q1 '26. - Guidance on capital growth, potential buyback. - Mid-single digit loan growth target, with focus on Q4 and beyond.

• Changes in mix and cost of funding sources. - Interest rate fluctuation. - Regulatory changes. - Portfolio performance. - Seasonal fluctuations in deposits. - Uncertainty around prepayment speeds and interest rate impacts.

Q: Stephen Scouten asks about pipeline and Gulf Coast growth.

A: Kevin Chapman responds on loan growth across segments and Gulf Coast opportunities.

Q: Stephen Scouten asks about expense savings.

A: James Mabry talks about core NIE changes and expected decreases in Q4 and Q1 '26.

Q: Matt Olney asks about core margin drivers.

A: James Mabry discusses margin expansion and future expectations.

Q: Matt Olney asks about criticized loans.

A: David Meredith talks about broad-based increase and proactive loan management.

Q: Michael Rose asks about stock buyback and capital.

A: James Mabry talks about capital growth and buyback consideration.

Q: Michael Rose asks about deposit growth strategy.

A: James Mabry talks about deposit growth focus and seasonality.

Q: Michael Rose asks about operating leverage.

A: Kevin Chapman talks about expense discipline and revenue growth.

Q: David Bishop asks about payoffs and potential headwinds.

A: Kevin Chapman talks about payoff expectations and 10-year yield impact.

Q: David Bishop asks about M&A talent recruitment.

A: Kevin Chapman talks about hiring and opportunity in M&A.

Q: Catherine Mealor asks about expense trajectory.

A: James Mabry talks about '26 expense guidance.

Q: Sun Young Lee asks about revenue growth drivers.

A: Kevin Chapman talks about scale, accountability, and market performance.

Q: Sun Young Lee asks about loan and deposit growth outlook.

A: Kevin Chapman talks about mid-single digit growth target and Q4 focus.