Renasant Q2 Earnings Call Highlights

Renasant NYSE: RNST reported second-quarter adjusted earnings per share of $0.94, up 36% from a year earlier, as the company cited stronger operating performance, continued organic-growth efforts and opportunities created by disruption in its markets.

Adjusted return on average assets increased to 1.30% from 1.01% in the second quarter of 2025, while adjusted return on average tangible common equity rose to 16.25% from 13.5%. The company’s efficiency ratio improved to 57.9% from 67.6% a year earlier.

“Operating results across the company were strong as we continued to focus on organic growth, as well as disruption in many of our markets,” President and Chief Executive Officer Kevin Chapman said during the company’s earnings call.

Loans Rise, While Public-Fund Outflows Pressure Deposits

Loans increased $220.9 million from the prior quarter, representing annualized growth of 4.7%, according to Chief Financial Officer and Senior Executive Vice President Jim Mabry. Deposits declined $398.4 million, or 7.2% on an annualized basis, largely because of seasonal outflows in public-fund deposits.

Management said it expects public-fund trends to improve during the second half of the year. Mabry said public-fund balances should be relatively stable or potentially produce some inflows, while the company continues to target mid-single-digit growth in both loans and deposits through the cycle.

Chapman pointed to growth in new core deposit relationships. During the second quarter, Renasant opened more than 10,000 accounts for customers who did not previously have accounts or deposits with the bank, representing about $380 million in new deposits. About half of those deposits were certificates of deposit, with the other half coming from checking accounts, he said.

Through July, the company had opened more than 2,000 net new accounts representing $86 million in new funding, Chapman said, adding that some accounts were still being funded and could generate additional deposit growth in the third and fourth quarters.

New deposits were arriving at market rates rather than through special promotional pricing, Chapman said. He estimated the weighted-average rate on new accounts was in the high-2% to low-3% range.

Margin Expected to Remain Stable

Reported net interest margin declined four basis points sequentially to 3.83%, while adjusted net interest margin was unchanged at 3.61%. Adjusted total deposit costs rose two basis points to 1.96%, and adjusted loan yields fell one basis point to 6.03%.

Mabry said Renasant expects its core margin to remain generally stable in the second half. He cited several factors that could support results, including loan growth weighted toward the end of the second quarter, approximately $1.25 billion of loans maturing over the next 12 months with an average rate of about 4.95%, and monthly securities roll-offs of roughly $50 million to $60 million from low-3% yields into investments yielding the upper-4% range or close to 5%.

The company is not incorporating a Federal Reserve rate increase or reduction into its current outlook, Mabry said. A 25-basis-point change in rates would not be expected to have a major effect on its profitability outlook or balance sheet, absent a more meaningful rate move.

Management acknowledged continued competition in both lending and deposit gathering. Mabry said new and renewed loan pricing was generally in the low-6% range, with competitive intensity varying across markets.

Chief Credit Officer and Senior Executive Vice President David Meredith said competitors were also applying pressure through loan structures, including guarantor support, loan proceeds and covenants. He said Renasant would remain disciplined, particularly with new customers or transactions where it has less familiarity, while seeking to protect established relationships.

Growth Outlook and Payoffs

Chapman said Renasant continues to expect mid-single-digit loan growth in the second half, despite elevated payoffs. The loan pipeline was about 6% to 10% higher than it had been at the beginning of the second quarter, he said.

Management said early third-quarter loan production had exceeded elevated payoffs, with net loans up about $40 million at the time of the call. Chapman said most payoffs have occurred in commercial real estate, including multifamily and office properties, and have generally been tied to asset sales or business sales rather than loans moving to competitors.

The company added 18 revenue-producing hires in the first quarter, five in the second quarter and seven so far in the third quarter. Chapman said Renasant’s hiring focus remains primarily within its current footprint, where it sees opportunities to deepen its presence and benefit from market disruption. He said Texas was not a primary near-term expansion focus, despite its economic appeal, because attaining relevance in major Texas markets would require substantial scale.

Expenses, Credit and Fee Income

Second-quarter net interest income was $227.7 million, down $0.8 million from the prior quarter. Non-interest income rose $0.9 million sequentially to $51.2 million. Pre-provision net revenue totaled $112.4 million.

Non-interest expense increased $6.2 million sequentially to $161.5 million, driven mainly by deferred-compensation accruals tied to market valuations, higher health insurance claims and annual merit increases. Mabry said expenses could moderate in the third quarter, with management internally targeting a range of roughly $160 million to $165 million, though opportunistic hiring and health claims could affect the result.

The company recorded a $3.8 million provision for credit losses on loans, including $1.2 million for funded loans and $2.6 million for unfunded commitments. Its allowance for credit losses declined two basis points sequentially to 1.54% of total loans. All regulatory capital ratios remained above the thresholds for well-capitalized institutions.

On fee income, Mabry said strong Small Business Administration activity in the first half could moderate in the second half. Capital-markets activity was soft during the first half but could recover toward historical levels, while mortgage activity remained weak. Wealth-management revenue was described as steady and growing. Overall, Mabry said the second-quarter fee-income run rate was a reasonable starting point for the second half.

About Renasant (NYSE:RNST)

Renasant Corporation operates as a bank holding company for Renasant Bank that provides a range of financial, wealth management, fiduciary, and insurance services to retail and commercial customers. It operates through three segments: Community Banks, Insurance, and Wealth Management. The Community Banks segment offers checking and savings accounts, business and personal loans, asset-based lending, and equipment leasing services, as well as safe deposit and night depository facilities. It also provides commercial, financial, and agricultural loans; equipment financing and leasing; real estate–1-4 family mortgage; real estate–commercial mortgage; real estate–construction loans for the construction of single family residential properties, multi-family properties, and commercial projects; installment loans to individuals; and interim construction loans, as well as automated teller machine (ATM), online and mobile banking, call center, and treasury management services.

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