Renasant (US:RNST)2025-05-08 20:40PART I: Financial Information Item 1. Financial Statements (Unaudited) This section presents Renasant Corporation's unaudited consolidated financial statements for Q1 2025, including balance sheets, income, comprehensive income, equity changes, cash flows, and detailed notes Consolidated Balance Sheets Total assets increased to $18.27 billion by March 31, 2025, driven by growth in net loans, deposits, and shareholders' equity Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $18,271,381 | $18,034,868 | | Loans, net | $12,851,662 | $12,683,264 | | Total Deposits | $14,772,095 | $14,572,612 | | Total Liabilities | $15,544,276 | $15,356,550 | | Total Shareholders' Equity | $2,727,105 | $2,678,318 | Consolidated Statements of Income Net income for Q1 2025 increased to $41.5 million from $39.4 million in Q1 2024, driven by higher net interest income, despite a lower diluted EPS of $0.65 Q1 2025 vs. Q1 2024 Income Statement (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Interest Income | $134,197 | $123,290 | | Provision for Credit Losses | $4,750 | $2,438 | | Total Noninterest Income | $36,468 | $41,381 | | Total Noninterest Expense | $113,949 | $112,912 | | Net Income | $41,518 | $39,409 | | Diluted EPS | $0.65 | $0.70 | Consolidated Statements of Comprehensive Income Comprehensive income significantly increased to $62.5 million in Q1 2025, primarily due to a positive swing in other comprehensive income from unrealized gains on securities Q1 2025 vs. Q1 2024 Comprehensive Income (in thousands) | Component | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $41,518 | $39,409 | | Other Comprehensive Income (Loss) | $20,987 | $(2,687) | | Comprehensive Income | $62,505 | $36,722 | Consolidated Statements of Changes in Shareholders' Equity Shareholders' equity increased to $2.73 billion by March 31, 2025, driven by net income and other comprehensive income, partially offset by cash dividends - Total shareholders' equity grew by approximately $48.8 million during Q1 202517 Key Changes in Shareholders' Equity Q1 2025 (in thousands) | Description | Amount | | :--- | :--- | | Balance at January 1, 2025 | $2,678,318 | | Net Income | $41,518 | | Other Comprehensive Income | $20,987 | | Cash Dividends ($0.22 per share) | $(14,270) | | Balance at March 31, 2025 | $2,727,105 | Consolidated Statements of Cash Flows Net cash from operating activities was $106.2 million in Q1 2025, while investing activities used $292.1 million, and financing activities provided $185.2 million, resulting in a slight net decrease in cash Q1 2025 Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $106,152 | $65,057 | | Net Cash (Used in) from Investing Activities | $(292,055) | $29,968 | | Net Cash from (Used in) Financing Activities | $185,210 | $(51,976) | | Net (Decrease) Increase in Cash | $(693) | $43,049 | Notes to Consolidated Financial Statements The notes detail accounting policies and financial data, covering securities, loans, credit quality, derivatives, fair value, regulatory capital, segment reporting, and the subsequent merger with The First Bancshares, Inc - On July 1, 2024, the Bank sold substantially all of the assets of Renasant Insurance, Inc22 - On April 1, 2025, the Company completed its merger with The First Bancshares, Inc. This subsequent event will be accounted for as a business combination, with further details on purchase accounting to be disclosed in future filings155156 Capital Ratios as of March 31, 2025 | Ratio | Renasant Corporation | Renasant Bank | | :--- | :--- | :--- | | Common Equity Tier 1 | 12.59% | 12.71% | | Tier 1 Capital | 13.35% | 12.71% | | Total Capital | 16.89% | 13.96% | | Tier 1 Leverage | 11.39% | 10.85% | Item 2. MD&A of Financial Condition and Results of Operations Management discusses Q1 2025 financial condition and results, covering the merger, balance sheet changes, income/expense analysis, and credit, interest rate, and liquidity risk management, highlighting asset growth and strong capital Financial Condition Total assets grew to $18.27 billion by March 31, 2025, driven by increases in total loans to $13.06 billion and deposits to $14.77 billion, with noninterest-bearing deposits at 23.97% - Total assets increased to $18.27 billion at March 31, 2025, from $18.03 billion at year-end 2024164 - Total loans grew to $13.06 billion, with non-owner occupied commercial mortgage loans being the largest concentration at 32.65% of the portfolio170171 - Total deposits increased to $14.77 billion, with noninterest-bearing deposits at $3.54 billion, or 23.97% of total deposits174175 Results of Operations Net income for Q1 2025 was $41.5 million, driven by a $10.9 million rise in net interest income to $134.2 million, despite decreased noninterest income and slightly increased noninterest expense, improving the efficiency ratio to 65.53% Q1 2025 vs Q1 2024 Key Metrics | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $41,518 thousand | $39,409 thousand | | Diluted EPS | $0.65 | $0.70 | | Net Interest Income | $134,197 thousand | $123,290 thousand | | Net Interest Margin (tax-equiv.) | 3.45% | 3.30% | | Noninterest Income | $36,468 thousand | $41,381 thousand | | Noninterest Expense | $113,949 thousand | $112,912 thousand | | Efficiency Ratio | 65.53% | 67.52% | - The decrease in noninterest income was primarily due to the sale of the insurance agency business on July 1, 2024, which contributed $2.7 million in income in Q1 2024197 - Noninterest expense increased slightly, including $791 thousand in expenses related to the merger with The First204 Risk Management The company manages credit, interest rate, and liquidity risks, with the allowance for credit losses at $203.9 million and nonperforming loans decreasing to 0.76% of total loans, while maintaining an asset-sensitive interest rate position and robust liquidity Credit Quality Metrics | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Allowance for Credit Losses (ACL) on Loans | $203,931 thousand | $201,756 thousand | | ACL to Total Loans | 1.56% | 1.56% | | Nonperforming Loans (NPLs) | $98,733 thousand | $113,275 thousand | | NPLs to Total Loans | 0.76% | 0.88% | | ACL to NPLs (Coverage Ratio) | 206.55% | 178.11% | Interest Rate Sensitivity Analysis (as of March 31, 2025) | Rate Shock (bps) | % Change in EVE | % Change in NII (1-12 Mo) | | :--- | :--- | :--- | | +100 | 2.55% | 2.72% | | -100 | (3.49)% | (3.77)% | | -200 | (8.01)% | (6.99)% | Liquidity and Capital Resources Core deposits are the primary liquidity source, supplemented by investment portfolio and credit lines, with $3.8 billion available from FHLB and $662.6 million from the Federal Reserve, while shareholders' equity reached $2.73 billion with strong capital ratios - Core deposits are the major source of funds. The company did not hold any brokered deposits at March 31, 2025252 - Total available credit from the FHLB was $3.82 billion and from the Federal Reserve Discount Window was $662.6 million at quarter-end178255 - Shareholders' equity grew to $2.73 billion, with book value per share at $42.79. The company did not repurchase any common stock in Q1 2025 under its $100 million repurchase program271272 - Unfunded loan commitments stood at $3.32 billion and standby letters of credit at $89.3 million as of March 31, 2025266 Item 3. Quantitative and Qualitative Disclosures about Market Risk No material changes in market risk have occurred since December 31, 2024, with further information available in the 2024 Annual Report on Form 10-K - There have been no material changes in market risk since December 31, 2024279 Item 4. Controls and Procedures Disclosure controls and procedures were effective as of quarter-end, with no material changes to internal control over financial reporting during Q1 2025 - Disclosure controls and procedures are deemed effective as of March 31, 2025280 - No material changes in internal control over financial reporting occurred during the first quarter of 2025280 PART II: Other Information Item 1A. Risk Factors No material changes have occurred in the risk factors previously disclosed in the 2024 Annual Report on Form 10-K - There have been no material changes from the risk factors set forth in the 2024 Annual Report on Form 10-K281 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities occurred in Q1 2025, with 89,660 shares repurchased solely for tax liabilities related to vested restricted stock awards, not under the public repurchase program - No unregistered sales of equity securities occurred during the quarter282 - A total of 89,660 shares were repurchased to satisfy tax liabilities from vested stock awards. No shares were bought back under the public repurchase plan, which has $100 million remaining authorization through October 2025283285 Item 5. Other Information No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading plan during Q1 2025286 Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including the merger agreement, corporate governance documents, and officer certifications - The report includes various exhibits, such as the merger agreement, corporate governance documents, and required officer certifications287