First Quarter 2023 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) 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, factoring and mortgage 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 our loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers or issuers of investment securities, or the impact of interest rates on the value of our investment securities portfolio; (xi) an insufficient allowance for credit losses as a result of inaccurate assumptions; (xii) changes in the sources and costs of the capital we use to make loans and otherwise fund our operations, due to deposit outflows, changes in the mix of deposits and the cost of and availability of borrowings; (xiii) general economic, market or business conditions, including the impact of inflation; (xiv) changes in demand for loan products and financial services; (xv) concentration of credit exposure; (xvi) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships; (xvii) increased cybersecurity risk, including potential network breaches, business disruptions or financial losses; (xviii) civil unrest, natural disasters, epidemics (including the re-emergence of the COVID-19 pandemic) and other catastrophic events in our geographic area; (xix) the impact, extent and timing of technological changes; and (xx) 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 March 31, 2023 (1) Total revenue is calculated as net interest income plus noninterest income. Company Snapshot Loans and Deposits by State Assets: $17.5 billion Loans: 11.8 Deposits: 13.9 Equity: 2.2 3 MS 19% AL 28% FL 7% Other 1% GA 29% TN 16% Loans MS 40% AL 14% FL 3% GA 32% TN 11% Deposits 88% 4% 6% 2% YTD Total Revenue(1) Community Banking Wealth Management Mortgage Insurance
4 Renasant Footprint *Republic Business Credit operates on a nationwide basis. Locations in California, Illinois and Texas are not shown.
First Quarter Highlights 5 • Net income of $46.1 million with diluted EPS of $0.82 • Net interest margin decreased 12 basis points to 3.66%; excess liquidity carried on balance sheet in March negatively impacted net interest margin by 2 basis points • Loans increased $188.1 million, or 6.6% annualized • Deposits increased $425.1 million, driven by an increase in brokered deposits of $623.4 million • Cost of deposits increased 47 basis points on a linked quarter basis to 0.99%, and noninterest-bearing deposits now represent 30.5% of total deposits • The ratio of allowance for credit losses on loans to total loans remained at 1.66% • Credit metrics remained generally stable with the ratio of nonperforming loans to total loans at 0.64%
Financial Condition
Total Assets 7 Note: Dollars in millions $16,864 $16,618 $16,471 $16,988 $17,474 $13 ,500 $14 ,000 $14 ,500 $15 ,000 $15 ,500 $16 ,000 $16 ,500 $17 ,000 $17 ,500 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023
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 heading “Non-GAAP Reconciliations”. $10,313 $10,604 $11,105 $11,578 $11,766 3.88% 4.12% 4.57% 5.19% 5.68% 3.82% 3.96% 4.52% 5.16% 5.64% 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 1-4 Family Mortgage Commercial Mortgage Construction Other* C&I Loan Yield Core Loan Yield**
Deposit Mix and Pricing 9 Note: Dollars in millions *Includes money market $13,991 $13,764 $13,432 $13,487 $13,912 0.17% 0.15% 0.21% 0.52% 0.99% 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 Noninterest-bearing Interest-bearing* Savings Brokered Time Cost of deposits
Core Deposit Funding 31% 44% 7% 12% 6% Noninterest-bearing Interest-bearing* Savings Time Brokered • Average deposit account is $29 thousand; commercial and consumer deposit accounts, excluding time deposit accounts, average approximately $77 thousand and $14 thousand, respectively • Top 20 depositors, excluding public funds, comprise less than 3% of total deposits 10 Deposits as of March 31, 2023 ($13.9 Billion) Mix of Average Deposits Noninterest-bearing demand 21.36 % 25.52 % 32.58 % Interest-bearing demand* 46.16 46.42 45.04 Savings 8.03 6.46 7.82 Brokered deposits 0.00 0.00 2.94 Time deposits 24.45 21.60 11.62 Total 100.00 % 100.00 % 100.00 % 4Q19 1Q234Q15 *Includes money market $13,254 $13,009 $13,023 $13,055 $233 $233 $416 $857 $13,487 $13,242 $13,439 $13,912 12/31/2022 1/31/2023 2/28/2023 3/31/2023 Other Deposits Brokered Deposits 2023 Deposit Trends
Diversified Deposits 11 Note: As of March 31, 2023 Consumer 45% Commercial 35% Brokered 6% Public Funds 14% CommercialCustomer Construction 17% Professional Services 12% Real Estate 12% Financial 11% Manufacturing 7% Trade 11% Health Care 5% Other Services 17% Other 8%
Strong Liquidity Position 12 Note: Dollars in millions 74% 77% 83% 86% 85% $1 $1 $1 $1 $1 $1 $1 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 Loans to Deposits 26.68% 24.24% 20.66% 20.21% 20.92% $0 $0 $0 $0 $0 $0 $0 $0 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 Cash and Securities to Total Assets Average Interest Earning Asset Mix 76% 1% 21% 2% 1Q 2023 Loans Held for Investment Loans Held for Sale Securities Interest Bearing Balances with Banks • Proactively added on balance sheet liquidity mid-March by borrowing from the FHLB and acquiring additional brokered deposits
Available Liquidity and Uninsured Deposits 13Note: As of March 31, 2023; dollars in billions (1) Approximately $500 million of the unencumbered securities are placed at the Fed (2) Includes untapped brokered CDs (per internal policy guidelines) and unsecured lines of credit $7.4 $4.1 Available sources Uninsured and uncollateralized deposits Uninsured Deposits Uninsured to Total Deposits Uncollateralized 4.1$ 29.8% Collateralized public funds 1.5 10.7% Total 5.6$ 40.5% Internal Sources Cash and cash equivalents 0.8$ Unencumbered securities(1) 1.6 External Sources FHLB borrowing capacity 2.9 Other(2) 2.1 Total 7.4$ Liquidity Sources
Securities Portfolio 14 Composition 33% 35% 9% 13% 2% 8% Agency MBS Agency CMO Agency CMBS Municipal SBA Other • Book value of $2.8 billion or 16.1% of total assets • Taxable equivalent yield of 2.07% • Duration of 4.4 years • 46% of portfolio HTM o 10% of HTM are CRA investments o 22% of HTM are Municipals • Unrealized losses in AOCI on securities totaled $269.3 million ($201.9 million, net of tax); unrealized losses not in AOCI on HTM securities totaled $88.9 million (66.8 million, net of tax) • Securities runoff of approximately $60 to $75 million per quarter expected in the next 12 months Highlights $2.8 Billion Note: As of March 31, 2023
Subordinated Notes $336,104 ACL $170,362 Trust Preferred $108,685 Common Equity Tier 1 $1,394,401 1 Capital Position 15 Tier 1 $1,503 Tier 2 $506 Regulatory Capital as of March 31, 2023 • $100 million stock repurchase program is in effect through October 2023; there was no buyback activity in the first quarter of 2023 • 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 heading “Non-GAAP Reconciliations”. Ratio Tangible Common Equity* 7.01 % 7.13 % Leverage 9.36 9.18 Tier 1 Risk Based 11.01 10.98 Total Risk Based 14.63 14.68 Common Tier 1 Equity 10.21 10.19 1Q 20234Q 2022 • Unrealized losses on the HTM portfolio would have a negative impact of 44 basis points on the TCE ratio • Unrealized losses on both HTM and AFS would have a negative impact of 161 basis points on CET1 and the Company would still remain above well-capitalized thresholds
Asset Quality
2.44% 2.00% 2.50% 3.00% 3.50% 4.00% $200,000 $250,000 $300,000 $350,000 $400,000 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 Criticized Loans/Total Loans Criticized Loans % of Total Loans ($ in thousands) 0.43% 0.00% 0.50% 1.00% 1.50% 2.00% $- $25,000 $50,000 $75,000 $100,000 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 Loans 30-89 Days Past Due/ Total Loans 30-89 DPD % of Total Loans ($ in thousands) Asset Quality 17
0.46% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% $- $25,000 $50,000 $75,000 $100,000 $125,000 $150,000 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 NPAs/Total Assets Nonperforming loans OREO % of Assets ($ in thousands) 0.16% 0.00% 0.20% 0.40% 0.60% 0.80% $- $5,000 $10,000 $15,000 $20,000 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 Net Charge-offs/Average Loans Net charge-offs % of Avg Loans ($ in thousands) Asset Quality 18
1.66% 1.00% 1.20% 1.40% 1.60% 1.80% 2.00% $140,000 $150,000 $160,000 $170,000 $180,000 $190,000 $200,000 $210,000 $220,000 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 Allowance/Total Loans Allowance % of Total Loans ($ in thousands) 259% 100% 150% 200% 250% 300% 350% 400% $140,000 $150,000 $160,000 $170,000 $180,000 $190,000 $200,000 $210,000 $220,000 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 Allowance/Nonperforming Loans Allowance % of Total NPLs ($ in thousands) ACL Metrics 19
ACL Summary ($ in thousands) ACL ACL as a % of Loans ACL ACL as a % of Loans Commercial, Financial, Agricultural 44,451$ 2.65 44,680$ 2.56 Lease Financing Receivables 2,463 2.15 2,437 2.02 Real Estate - 1-4 Family Mortgage 44,520 1.39 45,964 1.41 Real Estate - Commercial Mortgage 71,925 1.40 72,793 1.42 Real Estate - Construction 19,114 1.43 19,959 1.40 Installment loans to individuals 9,617 7.71 9,459 8.21 Allowance for Credit Losses on Loans 192,090 1.66 195,292 1.66 Allowance for Credit Losses on Deferred Interest 1,248 1,248 Reserve for Unfunded Commitments 20,118 18,618 Total Reserves 213,456$ 215,158$ 3/31/202312/31/2022 20
Loss Absorption Capacity 21 ($ in thousands) 3/31/2023 Allowance for Credit Losses on Loans 195,292$ Reserve for Unfunded Commitments 18,618 Purchase Accounting Discounts 11,881 Total Loss Absorption Capacity 225,791$
Profitability
Net Income & Adjusted Pre-Provision Net Revenue* 23 $33.5 $39.7 $46.6 $46.3 $46.1 $42.7 $54.2 $67.0 $72.2 $63.9 1.04% 1.31% 1.60% 1.73% 1.51% 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 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 heading “Non-GAAP Reconciliations”.
Diluted Earnings per Share Reported and Adjusted* 24 $.60 $.71 $.83 $.82 $.82 $.60 $.72 $.79 $.89 $.82 $- $0.20 $0.40 $0.60 $0.80 $1.00 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 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 heading “Non-GAAP Reconciliations”.
Profitability Ratios 25 6.05% 7.31% 8.50% 8.58% 8.55% 10.99% 13.81% 14.87% 17.35% 16.29% 0.00% 4.00% 8.00% 12.00% 16.00% 20.00% 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 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 heading “Non-GAAP Reconciliations”. 0.81% 0.96% 1.11% 1.11% 1.09% 0.82% 0.98% 1.05% 1.20% 1.09% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 ROAA (GAAP) ROAA (Adjusted) (non-GAAP)* Return on Average Equity (ROE)Return on Average Assets (ROAA)
Net Interest Income (FTE) & Net Interest Margin 26 $101.4 $115.3 $132.4 $140.6 $138.5 2.76% 3.11% 3.54% 3.78% 3.66% 2.71% 3.00% 3.50% 3.76% 3.63% 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 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 heading “Non-GAAP Reconciliations”.
Note: Dollars in thousands $37,458 $37,214 $41,186 $33,395 $37,293 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 Service Charges Fees and Commissions Insurance Wealth Management Mortgage Banking Securities Gains Other Noninterest Income 27 Service Charges 24% Fees and Commissions 12% Insurance 7% Wealth Management 14% Mortgage Banking 23% Other 20% 1Q 2023 - Noninterest Income Contribution • Notwithstanding the elimination of certain deposit service charges, noninterest income increased $3.9 million in the first quarter primarily due to an increase in mortgage banking income.
Mortgage Banking 28 Mortgage MixMortgage banking income Gain on sale margin* *Gain on sale margin excludes pipeline fair value adjustments and buyback reserve activity included in “Gain on sales of loans, net” in the table above ($ in thousands) 1Q22 4Q22 1Q23 Gain on sales of loans, net 6,047$ 1,103$ 4,770$ Fees, net 3,053 1,849 1,806 Mortgage servicing (loss) income, net 533 2,318 1,941 Mortgage banking income, net 9,633$ 5,270$ 8,517$ 1.81% 1.27% 1.03% 1.64% 1.15% 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 $1.2 $0.9 $0.6 $0.5 $0.6 $- $0 $0 $1 $1 $1 $1 $1 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 Locked Volume (in billions) (in %) 1Q22 4Q22 1Q23 Wholesale 38 35 36 Retail 62 65 64 Purchase 73 82 86 Refinance 27 18 14
Noninterest Expense and Efficiency Ratio 29 Salaries and employee benefits 65% Data processing 3% Net occupancy and equipment 11% Intangible amortization 1% Other 20% 1Q 2023 – Noninterest Expense Mix($ in thousands) 4Q22 1Q23 Change Salaries and employee benefits 67,372$ 69,832$ 2,460$ Data processing 3,521 3,633 112 Net occupancy and equipment 11,122 11,405 283 Intangible amortization 1,195 1,426 231 Merger and conversion 1,100 - (1,100) Other 17,272 21,412 4,140 Total 101,582$ 107,708$ 6,126$ 68% 64% 59% 58% 61% 67% 62% 59% 56% 61% 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 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 heading “Non-GAAP Reconciliations”. • Noninterest expense increased $6.1 million during the first quarter of 2023, primarily due to $2.7 million of expenses related to the operations of RBC, acquired on December 30, 2022, lower deferred loan origination fees and a seasonal increase in both payroll taxes and the company’s match of 401k contributions.
Appendix
Non-Owner Occupied CRE - Term 31 Composition Highlights 15% 10% 9% 17%9% 11% 20% 9% Warehouse/Industrial Hotels Self Storage Multi-family Office (medical) Office (non-medical) Retail Senior Housing • 29.3% of total loans • Non-performing loans of 0.09% • 30-89 days past due of 0.46% • Average loan size of $1.7 thousand • Weighted average LTV of 55.6% Note: As of March 31, 2023.
Construction 32 23% 8% 1% 30% 2% 5% 5% 9% 10% 3%4% 1-4 Family Commercial Owner-Occupied Condominium Multi-family Other Office Retail Self Storage Warehouse / Industrial Hotels Senior Housing • 12.1% of total loans • 0.04% past due or nonaccrual • Average loan size of $2 million • Weighted average LTV of 57.6% Composition Highlights Note: As of March 31, 2023.
Office and Retail 33 Retail • $389 million portfolio • 0.03% past due or nonaccrual • Average loan size of $1.0 million • Weighted average LTV of 58.2% Office • $663 million portfolio • 0.49% past due or nonaccrual • Average loan size of $1.1 million • Weighted average LTV of 57.3% Note: As of March 31, 2023; includes term, non-owner occupied credits. Office portfolio excludes medical.
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