Renasant (US:RNST)2021-11-05 19:51Financial Performance - Net income for Q3 2021 was $40,063, an increase from $29,992 in Q3 2020, with EPS rising to $0.71 from $0.53[207] - Net interest income for Q3 2021 was $103,292, slightly down from $106,286 in Q3 2020, while for the nine months ended September 30, 2021, it was $322,519 compared to $318,670 in the same period of 2020[211] - Net interest income for the nine months ended September 30, 2021, was $327,625 million, a decrease of 5.2% from $345,232 million in the same period of 2020[217] - Noninterest income for Q3 2021 was $50,755 million, down from $70,928 million in Q3 2020, while for the nine months ended September 30, 2021, it increased to $179,402 million from $172,668 million in 2020[226] - Investment income for Q3 2021 increased to $8,985 million from $7,678 million in Q3 2020, but decreased to $23,992 million for the nine months ended September 30, 2021, down from $25,757 million in the same period of 2020[222] Asset and Liability Management - Total assets increased to $16,155,550 as of September 30, 2021, from $14,929,612 at December 31, 2020, representing an increase of approximately 8.2%[190] - Total loans, excluding loans held for sale, decreased to $10,016,824 at September 30, 2021, down from $10,933,647 at December 31, 2020, a decline of about 8.4%[196] - Total deposits rose to $13,254,829 at September 30, 2021, compared to $12,059,081 at December 31, 2020, marking an increase of approximately 9.9%[200] - Total interest-earning assets increased to $13,869,538 million for the nine months ended September 30, 2021, compared to $12,475,561 million in 2020, reflecting a growth of 11.2%[213] - Total interest-bearing liabilities increased to $9,095,020 million for the nine months ended September 30, 2021, compared to $8,776,993 million in 2020[213] Credit Quality and Losses - The allowance for credit losses on loans was $170,038 as of September 30, 2021, representing 1.70% of total loans[264] - The Company recorded a negative provision (recovery) for credit losses of $1,200 during the third quarter of 2021, compared to a provision of $23,100 in Q3 2020[262] - Net charge-offs for the first nine months of 2021 were $4,906, or 0.06% of average loans, compared to $2,898, or 0.04% for the same period in 2020[255] - Nonperforming loans as a percentage of total loans was 299.68% as of September 30, 2021[264] - The Company’s allowance for credit losses model considers economic projections, primarily the national unemployment rate and GDP, over a two-year forecast period[263] Capital Management - Total shareholders' equity increased to $2,203,944 at September 30, 2021, compared to $2,132,733 at December 31, 2020, with a book value per share of $39.53[305] - Common equity tier 1 capital ratio for Renasant Corporation is 11.02%, exceeding the well-capitalized minimum requirement of 6.50%[313] - Total risk-based capital ratio for Renasant Corporation is 14.66%, above the well-capitalized minimum requirement of 10.00%[313] - The Company has junior subordinated debentures with a carrying value of $111,228, of which $107,637 is included in Tier 1 capital as of September 30, 2021[309] - The Company has subordinated notes with a carrying value of $207,210, with $197,360 included in Tier 2 capital as of September 30, 2021[310] Interest Rate Risk Management - The company actively monitors interest rate risk through its Asset/Liability Committee to manage the impact of interest rate fluctuations on profitability[282] - The projected impact of a +200 basis points change in interest rates results in an 11.83% increase in Economic Value Equity (EVE) and a 16.87% increase in earnings at risk (net interest income) for the 1-12 month period[285] - As of September 30, 2021, the Company had notional amounts of $190,200 in interest rate contracts with corporate customers and an equal amount in offsetting contracts with other financial institutions[287] Operational Efficiency - The efficiency ratio (GAAP) for Q3 2021 was 66.77%, compared to 65.16% in Q3 2020, and for the nine months, it was 64.85% in 2021 versus 70.49% in 2020[246] - Adjusted Efficiency Ratio (non-GAAP) for the three months ended September 30, 2021, is 66.06%[316] - Noninterest expense decreased to $103,999 for Q3 2021 from $116,510 in Q3 2020, and for the nine months ended September 30, 2021, it was $328,711 compared to $349,836 in 2020[235] Deposit Composition - Noninterest-bearing deposits increased to $4,492,650 at September 30, 2021, from $3,685,048 at December 31, 2020, reflecting a growth of about 21.9%[200] - Noninterest-bearing deposits represented 33.89% of total deposits at September 30, 2021, compared to 30.56% at December 31, 2020, driven by government stimulus payments[224] - Public fund deposits rose to $1,534,547 as of September 30, 2021, compared to $1,398,330 at December 31, 2020[202] Loan Portfolio - Total real estate – commercial mortgage loans accounted for 45.27% of total loans as of September 30, 2021[198] - The Company’s loan portfolio includes $73,895 million in commercial mortgages, accounting for 45.27% of total loans as of September 30, 2021[261] - Loans held for sale increased to $452,869 at September 30, 2021, compared to $417,771 at December 31, 2020, an increase of approximately 8.4%[195] - The Company had 41 loans on deferral with an aggregate balance of approximately $3,360, representing 0.04% of the loan portfolio (excluding PPP loans) as of September 30, 2021[248] Stock Repurchase and Shareholder Returns - The Company repurchased $21,315 of its common stock at a weighted average price of $34.82 per share during the first nine months of 2021[307] - A new stock repurchase program was approved on October 26, 2021, authorizing the repurchase of up to $50,000 of outstanding common stock[308]