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Renasant Corporation Announces Earnings for the Fourth Quarter of 2022

TUPELO, Miss., Jan. 24, 2023 (GLOBE NEWSWIRE) -- Renasant Corporation (NASDAQ: RNST) (the “Company”) today announced earnings results for the fourth quarter of 2022.

(Dollars in thousands, except earnings per share) Three Months Ended   Twelve Months Ended
  Dec 31, 2022 Sep 30, 2022 Dec 31, 2021   Dec 31, 2022 Dec 31, 2021
Net income and earnings per share:            
Net income $46,276 $46,567 $37,054   $166,068 $175,892
Basic EPS 0.83 0.83 0.66   2.97 3.13
Diluted EPS 0.82 0.83 0.66   2.95 3.12
Adjusted diluted EPS (Non-GAAP)(1) 0.89 0.79 0.68   3.00 2.98

“We are pleased to report a solid fourth quarter with quarterly earnings growing over the prior year,” remarked C. Mitchell Waycaster, Renasant President and Chief Executive Officer. “The company continues to emphasize the importance of core deposits, asset quality and capital strength in managing our balance sheet. We recently completed the acquisition of Republic Business Credit and are excited to welcome that team to Renasant.”

Quarterly Highlights

Acquisition

  • The Company completed the acquisition of Republic Business Credit, a factoring and asset-based lending company headquartered in New Orleans, Louisiana (“RBC”), on December 30, 2022. The RBC acquisition added $77.5 million in loans on the date of acquisition, and the Company recorded a provision for credit losses of $2.6 million, a provision for unfunded commitments of $0.2 million and merger expenses of $1.1 million

Earnings

  • Net income for the fourth quarter of 2022 was $46.3 million with diluted EPS of $0.82 and adjusted diluted EPS (non-GAAP)(1) of $0.89
  • Net interest income (fully tax equivalent) for the fourth quarter of 2022 was $140.6 million, up $8.1 million on a linked quarter basis
  • For the fourth quarter of 2022, net interest margin was 3.78%, up 24 basis points on a linked quarter basis
  • Cost of total deposits was 52 basis points for the fourth quarter of 2022, up 31 basis points on a linked quarter basis
  • The Company’s wealth management and insurance lines of business produced steady results during the fourth quarter of 2022
  • The mortgage division generated $0.5 billion in interest rate lock volume during the fourth quarter of 2022, compared to $0.6 billion in the third quarter of 2022. Gain on sale margin was 1.64% for the fourth quarter of 2022, up 61 basis points on a linked quarter basis. The Company recognized a gain on the sale of mortgage servicing rights of $3.0 million in the third quarter. No such sales occurred in the fourth quarter
  • Fourth quarter noninterest expense remained relatively unchanged on a linked quarter basis. In addition to expenses incurred in connection with the RBC acquisition, the Company recorded $1.3 million in expense related to the voluntary reimbursement of certain re-presentment NSF fees previously charged to customers that the Company expects to make in 2023 in light of the FDIC’s recent guidance to banks regarding such fees. The efficiency ratio and adjusted efficiency ratio (non-GAAP)(1) for the fourth quarter was 58.4% and 56.3%, respectively

Balance Sheet

  • Loans increased $473.3 million during the fourth quarter of 2022 from September 30, 2022; excluding RBC acquired loans, loans increased $395.8 million, which represents 14.14% annualized net loan growth
  • The securities portfolio decreased $64.8 million during the fourth quarter of 2022 from September 30, 2022, due to net cash outflows during the quarter of $75.4 million and a positive fair market value adjustment in our available-for-sale portfolio of $10.6 million
  • Deposits at December 31, 2022 increased $54.8 million from September 30, 2022, driven by an increase in interest bearing deposits. Noninterest bearing deposits decreased $268.5 million from September 30, 2022 to December 31, 2022 and represented 33.8% of total deposits at December 31, 2022. Brokered deposits were $233.1 million at December 31, 2022

Capital

  • Book value per share and tangible book value per share (non-GAAP)(1) increased 2.1% and decreased 0.5%, respectively, on a linked quarter basis
  • The Company has a $100 million stock repurchase program that is in effect through October 2023; there was no buyback activity during the fourth quarter of 2022

Credit Quality

  • The Company recorded a provision for credit losses on loans of $10.5 million for the fourth quarter of 2022, primarily driven by loan growth and the aforementioned provision with respect to acquired RBC loans
  • The allowance for credit losses on loans to total loans increased nine basis points on a linked quarter basis to 1.66% at December 31, 2022; an allowance of $9.8 million was recorded for RBC loans that had experienced credit deterioration prior to acquisition
  • The coverage ratio, or the allowance for credit losses on loans to nonperforming loans, was 337.73% at December 31, 2022, compared to 312.10% at September 30, 2022
  • Net loan charge-offs for the fourth quarter of 2022 were $2.6 million, or 0.09% of average loans on an annualized basis
  • Credit metrics remained stable. Nonperforming loans to total loans decreased to 0.49% at December 31, 2022 compared to 0.50% at September 30, 2022 and criticized loans (which include classified and special mention loans) to total loans increased to 2.47% at December 31, 2022, compared to 2.37% at September 30, 2022

(1) This is a non-GAAP financial measure. A reconciliation of all non-GAAP financial measures disclosed in this release from GAAP to non-GAAP is included in the tables at the end of this release. The information below under the heading “Non-GAAP Financial Measures” explains why the Company believes the non-GAAP financial measures in this release provide useful information and describes the other purposes for which the Company uses non-GAAP financial measures.

Income Statement

(Dollars in thousands, except per share data) Three Months Ended   Twelve Months Ended
  Dec 31,
2022
Sep 30,
2022
Jun 30,
2022
Mar 31,
2022
Dec 31,
2021
  Dec 31,
2022
Dec 31,
2021
Interest income                
Loans held for investment $ 145,360 $ 123,100 $ 106,409 $ 95,829 $ 98,478     $ 470,698 $ 422,832  
Loans held for sale   1,688   2,075   2,586   2,863   3,652       9,212   12,632  
Securities   15,241   14,500   12,471   10,835   9,221       53,047   31,532  
Other   2,777   3,458   1,954   664   568       8,853   1,689  
Total interest income   165,066   143,133   123,420   110,191   111,919       541,810   468,685  
Interest expense                
Deposits   17,312   7,241   5,018   5,637   6,056       35,208   28,976  
Borrowings   9,918   5,574   4,887   4,925   4,381       25,304   15,708  
Total interest expense   27,230   12,815   9,905   10,562   10,437       60,512   44,684  
Net interest income   137,836   130,318   113,515   99,629   101,482       481,298   424,001  
Provision for (recovery of) credit losses                
Provision for (recovery of) loan losses   10,488   9,800   2,000   1,500   (500 )     23,788   (1,700 )
Provision for credit losses on HTM securities           32         32  
Total provision for (recovery of) loan losses   10,488   9,800   2,000   1,500   (468 )     23,788   (1,668 )
Net interest income after provision for (recovery of) credit losses   127,348   120,518   111,515   98,129   101,950       457,510   425,669  
Noninterest income   33,395   41,186   37,214   37,458   47,582       149,253   226,984  
Noninterest expense   101,582   101,574   98,194   94,105   101,115       395,455   429,826  
Income before income taxes   59,161   60,130   50,535   41,482   48,417       211,308   222,827  
Income taxes   12,885   13,563   10,857   7,935   11,363       45,240   46,935  
Net income $ 46,276 $ 46,567 $ 39,678 $ 33,547 $ 37,054     $ 166,068 $ 175,892  
                 
Adjusted net income (non-GAAP)(1) $ 50,324 $ 44,233 $ 40,601 $ 33,728 $ 38,232     $ 168,886 $ 167,951  
Adjusted pre-provision net revenue (“PPNR”) (non-GAAP)(1) $ 72,187 $ 66,970 $ 54,172 $ 42,664 $ 49,190     $ 235,993 $ 210,424  
                 
Basic earnings per share $ 0.83 $ 0.83 $ 0.71 $ 0.60 $ 0.66     $ 2.97 $ 3.13  
Diluted earnings per share   0.82   0.83   0.71   0.60   0.66       2.95   3.12  
Adjusted diluted earnings per share (non-GAAP)(1)   0.89   0.79   0.72   0.60   0.68       3.00   2.98  
Average basic shares outstanding   55,953,104   55,947,214   55,906,755   55,809,192   55,751,487       55,904,579   56,114,666  
Average diluted shares outstanding   56,335,446   56,248,720   56,182,845   56,081,863   56,105,050       56,214,230   56,424,484  
Cash dividends per common share $ 0.22 $ 0.22 $ 0.22 $ 0.22 $ 0.22     $ 0.88 $ 0.88  

(1) This is a non-GAAP financial measure. A reconciliation of all non-GAAP financial measures disclosed in this release from GAAP to non-GAAP is included in the tables at the end of this release. The information below under the heading “Non-GAAP Financial Measures” explains why the Company believes the non-GAAP financial measures in this release provide useful information and describes the other purposes for which the Company uses non-GAAP financial measures.

Performance Ratios

  Three Months Ended   Twelve Months Ended
  Dec 31,
2022
Sep 30,
2022
Jun 30,
2022
Mar 31,
2022
Dec 31,
2021
  Dec 31,
2022
Dec 31,
2021
Return on average assets 1.11 % 1.11 % 0.96 % 0.81 % 0.89 %   1.00 % 1.11 %
Adjusted return on average assets (non-GAAP)(1) 1.20   1.05   0.98   0.82   0.92     1.02   1.06  
Return on average tangible assets (non-GAAP)(1) 1.20   1.20   1.04   0.89   0.98     1.09   1.21  
Adjusted return on average tangible assets (non-GAAP)(1) 1.30   1.14   1.07   0.90   1.01     1.10   1.16  
Return on average equity 8.58   8.50   7.31   6.05   6.59     7.60   7.96  
Adjusted return on average equity (non-GAAP)(1) 9.33   8.07   7.48   6.08   6.80     7.73   7.60  
Return on average tangible equity (non-GAAP)(1) 15.98   15.64   13.50   10.93   11.94     13.97   14.53  
Adjusted return on average tangible equity (non-GAAP)(1) 17.35   14.87   13.81   10.99   12.31     14.20   13.89  
Efficiency ratio (fully taxable equivalent) 58.39   58.50   64.37   67.78   67.04     61.89   65.35  
Adjusted efficiency ratio (non-GAAP)(1) 56.25   58.78   62.44   67.02   64.18     60.77   65.32  
Dividend payout ratio 26.51   26.51   30.99   36.67   33.33     29.63   28.12  

Capital and Balance Sheet Ratios

  As of
  Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021
Shares outstanding   55,953,104     55,953,104     55,932,017     55,880,666     55,756,233  
Market value per share $ 37.59   $ 31.28   $ 28.81   $ 33.45   $ 37.95  
Book value per share   38.18     37.39     37.85     38.25     39.63  
Tangible book value per share (non-GAAP)(1)   20.02     20.12     20.55     20.91     22.35  
Shareholders’ equity to assets   12.57 %   12.70 %   12.74 %   12.68 %   13.15 %
Tangible common equity ratio (non-GAAP)(1)   7.01     7.26     7.34     7.35     7.86  
Leverage ratio   9.36     9.39     9.16     9.00     9.15  
Common equity tier 1 capital ratio   10.21     10.64     10.74     10.78     11.18  
Tier 1 risk-based capital ratio   11.01     11.47     11.60     11.67     12.10  
Total risk-based capital ratio   14.63     15.15     15.34     15.51     16.14  

(1) This is a non-GAAP financial measure. A reconciliation of all non-GAAP financial measures disclosed in this release from GAAP to non-GAAP is included in the tables at the end of this release. The information below under the heading “Non-GAAP Financial Measures” explains why the Company believes the non-GAAP financial measures in this release provide useful information and describes the other purposes for which the Company uses non-GAAP financial measures.

Noninterest Income and Noninterest Expense

(Dollars in thousands) Three Months Ended   Twelve Months Ended
  Dec 31,
2022
Sep 30,
2022
Jun 30,
2022
Mar 31,
2022
Dec 31,
2021
  Dec 31,
2022
Dec 31,
2021
Noninterest income                
Service charges on deposit accounts $ 10,445   $ 10,216 $ 9,734   $ 9,562   $ 9,751     $ 39,957   $ 36,569
Fees and commissions   4,470     4,148   4,668     3,982     3,885       17,268     15,732
Insurance commissions   2,501     3,108   2,591     2,554     2,353       10,754     9,841
Wealth management revenue   5,237     5,467   5,711     5,924     5,273       22,339     20,455
Mortgage banking income   5,170     12,675   8,316     9,633     14,726       35,794     109,604
Swap termination gains                 4,676           4,676
Net gains on sales of securities                 49           2,170
BOLI income   2,487     2,296   2,331     2,153     2,048       9,267     7,366
Other   3,085     3,276   3,863     3,650     4,821       13,874     20,571
Total noninterest income $ 33,395   $ 41,186 $ 37,214   $ 37,458   $ 47,582     $ 149,253   $ 226,984
Noninterest expense                
Salaries and employee benefits $ 67,372   $ 66,463 $ 65,580   $ 62,239   $ 62,523     $ 261,654   $ 280,627
Data processing   3,521     3,526   3,590     4,263     5,346       14,900     21,726
Net occupancy and equipment   11,122     11,266   11,155     11,276     11,177       44,819     46,837
Other real estate owned   (59 )   34   (187 )   (241 )   (60 )     (453 )   253
Professional fees   2,856     3,087   2,778     3,151     3,209       11,872     11,776
Advertising and public relations   3,631     3,229   3,406     4,059     2,929       14,325     12,203
Intangible amortization   1,195     1,251   1,310     1,366     1,424       5,122     6,042
Communications   2,028     1,999   1,904     2,027     2,088       7,958     8,869
Merger and conversion related expenses   1,100           687           1,787    
Restructuring charges (benefit)         1,187     (455 )   61       732     368
Debt prepayment penalty                 6,123           6,123
Other   8,816     10,719   7,471     5,733     6,295       32,739     35,002
Total noninterest expense $ 101,582   $ 101,574 $ 98,194   $ 94,105   $ 101,115     $ 395,455   $ 429,826

Mortgage Banking Income

(Dollars in thousands) Three Months Ended   Twelve Months Ended
  Dec 31,
2022
Sep 30,
2022
Jun 30,
2022
Mar 31,
2022
Dec 31,
2021
  Dec 31,
2022
Dec 31,
2021
Gain on sales of loans, net $ 1,003 $ 5,263 $ 3,490 $ 6,047 $ 10,801     $ 15,803 $ 82,399  
Fees, net   1,849   2,405   3,064   3,053   4,320       10,371   17,161  
Mortgage servicing income (loss), net   2,318   5,007   1,762   533   (395 )     9,620   (3,517 )
MSR valuation adjustment                   13,561  
Total mortgage banking income $ 5,170 $ 12,675 $ 8,316 $ 9,633 $ 14,726     $ 35,794 $ 109,604  

Balance Sheet

(Dollars in thousands) As of
  Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021
Assets          
Cash and cash equivalents $ 575,992   $ 479,500   $ 1,010,468   $ 1,607,493   $ 1,877,965  
Securities held to maturity, at amortized cost   1,324,040     1,353,502     488,851     487,194     416,357  
Securities available for sale, at fair value   1,533,942     1,569,242     2,528,253     2,405,316     2,386,052  
Loans held for sale, at fair value   110,105     144,642     196,598     280,464     453,533  
Loans held for investment   11,578,304     11,105,004     10,603,744     10,313,459     10,020,914  
Allowance for credit losses on loans   (192,090 )   (174,356 )   (166,131 )   (166,468 )   (164,171 )
Loans, net   11,386,214     10,930,648     10,437,613     10,146,991     9,856,743  
Premises and equipment, net   283,595     284,062     284,035     285,344     293,122  
Other real estate owned   1,763     2,412     2,807     2,062     2,540  
Goodwill and other intangibles   1,015,884     966,461     967,713     969,022     963,781  
Bank-owned life insurance   373,808     371,650     371,298     369,344     287,359  
Mortgage servicing rights   84,448     81,980     94,743     91,730     89,018  
Other assets   298,385     287,000     235,722     218,797     183,841  
Total assets $ 16,988,176   $ 16,471,099   $ 16,618,101   $ 16,863,757   $ 16,810,311  
           
Liabilities and Shareholders’ Equity          
Liabilities          
Deposits:          
Noninterest-bearing $ 4,558,756   $ 4,827,220   $ 4,741,397   $ 4,706,256   $ 4,718,124  
Interest-bearing   8,928,210     8,604,904     9,022,532     9,284,641     9,187,600  
Total deposits   13,486,966     13,432,124     13,763,929     13,990,897     13,905,724  
Short-term borrowings   712,232     312,818     112,642     111,279     13,947  
Long-term debt   428,133     426,821     431,553     435,416     471,209  
Other liabilities   224,829     207,055     193,100     188,523     209,578  
Total liabilities   14,852,160     14,378,818     14,501,224     14,726,115     14,600,458  
           
Shareholders’ equity:          
Preferred stock                    
Common stock   296,483     296,483     296,483     296,483     296,483  
Treasury stock   (111,577 )   (111,577 )   (112,295 )   (114,050 )   (118,027 )
Additional paid-in capital   1,302,422     1,299,476     1,298,207     1,297,088     1,300,192  
Retained earnings   857,725     823,951     789,880     762,690     741,648  
Accumulated other comprehensive loss   (209,037 )   (216,052 )   (155,398 )   (104,569 )   (10,443 )
Total shareholders’ equity   2,136,016     2,092,281     2,116,877     2,137,642     2,209,853  
Total liabilities and shareholders’ equity $ 16,988,176   $ 16,471,099   $ 16,618,101   $ 16,863,757   $ 16,810,311  

Net Interest Income and Net Interest Margin

(Dollars in thousands) Three Months Ended
  December 31, 2022 September 30, 2022 December 31, 2021
  Average
Balance
Interest
Income/
Expense
Yield/  
 Rate
Average
Balance
Interest
Income/
Expense
Yield/  
 Rate
Average
Balance
Interest
Income/
Expense
Yield/  
 Rate
Interest-earning assets:                  
Loans held for investment $ 11,282,422 $ 147,519 5.19 % $ 10,829,137 $ 124,614 4.57 % $ 9,948,610 $ 99,670 3.98 %
Loans held for sale   117,082   1,688 5.77 %   143,837   2,075 5.77 %   498,724   3,652 2.93 %
Taxable securities   2,657,248   13,174 1.98 %   2,773,924   12,439 1.79 %   2,245,249   7,293 1.30 %
Tax-exempt securities(1)   447,287   2,637 2.36 %   449,927   2,664 2.37 %   392,700   2,503 2.55 %
Total securities   3,104,535   15,811 2.04 %   3,223,851   15,103 1.87 %   2,637,949   9,796 1.49 %
Interest-bearing balances with banks   269,975   2,777 4.08 %   663,218   3,458 2.07 %   1,522,433   568 0.15 %
Total interest-earning assets   14,774,014   167,795 4.51 %   14,860,043   145,250 3.89 %   14,607,716   113,686 3.09 %
Cash and due from banks   201,369       191,358       201,941    
Intangible assets   967,005       967,154       964,575    
Other assets   635,452       626,926       676,408    
Total assets $ 16,577,840     $ 16,645,481     $ 16,450,640    
Interest-bearing liabilities:                  
Interest-bearing demand(2) $ 6,018,679 $ 12,534 0.83 % $ 6,462,940 $ 6,061 0.37 % $ 6,460,178 $ 3,487 0.21 %
Savings deposits   1,093,997   582 0.21 %   1,134,665   155 0.05 %   1,045,784   151 0.06 %
Brokered deposits   93,764   1,047 4.43 %     %     %
Time deposits   1,324,042   3,149 0.94 %   1,240,439   1,025 0.33 %   1,434,162   2,418 0.67 %
Total interest-bearing deposits   8,530,482   17,312 0.81 %   8,838,044   7,241 0.33 %   8,940,124   6,056 0.27 %
Borrowed funds   893,705   9,918 4.42 %   572,376   5,574 3.88 %   434,546   4,381 4.03 %
Total interest-bearing liabilities   9,424,187   27,230 1.15 %   9,410,420   12,815 0.54 %   9,374,670   10,437 0.44 %
Noninterest-bearing deposits   4,805,014       4,867,314       4,633,885    
Other liabilities   209,544       194,339       210,404    
Shareholders’ equity   2,139,095       2,173,408       2,231,681    
Total liabilities and shareholders’ equity $ 16,577,840     $ 16,645,481     $ 16,450,640    
Net interest income/ net interest margin   $ 140,565 3.78 %   $ 132,435 3.54 %   $ 103,249 2.81 %
Cost of funding     0.76 %     0.36 %     0.30 %
Cost of total deposits     0.52 %     0.21 %     0.18 %

(1) U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which the Company operates.
(2) Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.

Net Interest Income and Net Interest Margin, continued

(Dollars in thousands) Twelve Months Ended
  December 31, 2022 December 31, 2021
  Average
Balance
Interest
Income/
Expense
Yield/  
 Rate
Average
Balance
Interest
Income/
Expense
Yield/  
 Rate
Interest-earning assets:            
Loans held for investment $ 10,677,995 $ 476,746 4.46 % $ 10,310,070 $ 427,296 4.15 %
Loans held for sale   203,981   9,212 4.52 %   454,727   12,632 2.78 %
Taxable securities(1)   2,654,621   44,750 1.69 %   1,691,531   24,370 1.44 %
Tax-exempt securities   446,895   10,655 2.38 %   335,399   9,418 2.81 %
Total securities   3,101,516   55,405 1.79 %   2,026,930   33,788 1.67 %
Interest-bearing balances with banks   846,768   8,853 1.05 %   1,263,364   1,688 0.13 %
Total interest-earning assets   14,830,260   550,216 3.71 %   14,055,091   475,404 3.38 %
Cash and due from banks   201,419       199,705    
Intangible assets   967,018       966,733    
Other assets   639,155       684,457    
Total assets $ 16,637,852     $ 15,905,986    
Interest-bearing liabilities:            
Interest-bearing demand(2) $ 6,420,905 $ 25,840 0.40 % $ 6,177,944 $ 15,308 0.25 %
Savings deposits   1,116,013   1,023 0.09 %   976,616   698 0.07 %
Brokered deposits   23,634   1,047 4.43 %     %
Time deposits   1,310,398   7,298 0.56 %   1,539,763   12,970 0.84 %
Total interest-bearing deposits   8,870,950   35,208 0.40 %   8,694,323   28,976 0.33 %
Borrowed funds   624,887   25,304 4.05 %   470,993   15,708 3.34 %
Total interest-bearing liabilities   9,495,837   60,512 0.64 %   9,165,316   44,684 0.49 %
Noninterest-bearing deposits   4,760,432       4,310,834    
Other liabilities   196,980       220,427    
Shareholders’ equity   2,184,603       2,209,409    
Total liabilities and shareholders’ equity $ 16,637,852     $ 15,905,986    
Net interest income/ net interest margin   $ 489,704 3.30 %   $ 430,720 3.07 %
Cost of funding     0.42 %     0.33 %
Cost of total deposits     0.26 %     0.22 %

(1) U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which the Company operates.
(2) Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.

Supplemental Margin Information

(Dollars in thousands) Three Months Ended   Twelve Months Ended
  Dec 31, 2022 Sep 30, 2022 Dec 31, 2021   Dec 31, 2022 Dec 31, 2021
Earning asset mix:            
Loans held for investment, excluding Paycheck Protection Program (“PPP”) loans (non-GAAP)(1)   76.33 %   72.83 %   67.68 %     71.90 %   70.16 %
PPP loans   0.03     0.04     0.43       0.10     3.19  
Loans held for sale   0.79     0.97     3.41       1.38     3.24  
Securities   21.01     21.69     18.06       20.91     14.42  
Interest-bearing balances with banks   1.84     4.47     10.42       5.71     8.99  
Total   100.00 %   100.00 %   100.00 %     100.00 %   100.00 %
             
Funding sources mix:            
Noninterest-bearing demand   33.77 %   34.09 %   33.08 %     33.39 %   32.00 %
Interest-bearing demand   42.30     45.27     46.11       45.04     45.84  
Savings   7.69     7.95     7.47       7.83     7.25  
Brokered deposits   0.66               0.17      
Time deposits   9.31     8.69     10.24       9.19     11.42  
Borrowed funds   6.27     4.00     3.10       4.38     3.49  
Total   100.00 %   100.00 %   100.00 %     100.00 %   100.00 %
             
Net interest income collected on problem loans $ 161   $ 78   $ 578     $ 2,949   $ 4,412  
Total accretion on purchased loans   625     1,317     2,187       5,198     10,783  
Total impact on net interest income $ 786   $ 1,395   $ 2,765     $ 8,147   $ 15,195  
Impact on net interest margin   0.02 %   0.04 %   0.08 %     0.05 %   0.11 %
Impact on loan yield   0.03 %   0.05 %   0.11 %     0.08 %   0.15 %
             
Interest income on PPP loans $ 21   $ 5   $ 485     $ 719   $ 24,794  
PPP impact on net interest margin   %   %   %     %   0.08 %
PPP impact on loan yield   %   %   %     %   0.06 %

(1) This is a non-GAAP financial measure. A reconciliation of all non-GAAP financial measures disclosed in this release from GAAP to non-GAAP is included in the tables at the end of this release. The information below under the heading “Non-GAAP Financial Measures” explains why the Company believes the non-GAAP financial measures in this release provide useful information and describes the other purposes for which the Company uses non-GAAP financial measures.

Loan Portfolio

(Dollars in thousands) As of
  Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021
Loan Portfolio:          
Commercial, financial, agricultural $ 1,669,051 $ 1,507,615 $ 1,489,889 $ 1,437,225 $ 1,364,879
Lease financing   115,013   103,357   101,350   89,842   76,125
Real estate - construction   1,330,337   1,215,056   1,126,363   1,222,052   1,104,896
Real estate - 1-4 family mortgages   3,216,263   3,127,889   3,030,083   2,840,979   2,724,246
Real estate - commercial mortgages   5,118,063   5,016,665   4,717,513   4,577,864   4,549,037
Installment loans to individuals   124,745   128,946   131,163   137,115   143,340
Subtotal   11,573,472   11,099,528   10,596,361   10,305,077   9,962,523
PPP loans   4,832   5,476   7,383   8,382   58,391
Total loans $ 11,578,304 $ 11,105,004 $ 10,603,744 $ 10,313,459 $ 10,020,914

Credit Quality and Allowance for Credit Losses on Loans

(Dollars in thousands) As of
  Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021
Nonperforming Assets:          
Nonaccruing loans $ 56,545   $ 54,278   $ 43,897   $ 51,995   $ 49,364  
Loans 90 days or more past due   331     1,587     617     247     1,441  
Total nonperforming loans   56,876     55,865     44,514     52,242     50,805  
Other real estate owned   1,763     2,412     2,807     2,062     2,540  
Total nonperforming assets   58,639     58,277     47,321     54,304     53,345  
Allowance for credit losses on loans $ 192,090   $ 174,356   $ 166,131   $ 166,468   $ 164,171  
Net loan charge-offs $ 2,566   $ 1,575   $ 2,337   $ 851   $ 5,367  
Annualized net loan charge-offs / average loans   0.09 %   0.06 %   0.09 %   0.03 %   0.21 %
Nonperforming loans / total loans   0.49     0.50     0.42     0.51     0.51  
Nonperforming assets / total assets   0.35     0.35     0.28     0.32     0.32  
Allowance for credit losses on loans / total loans   1.66     1.57     1.57     1.61     1.64  
Allowance for credit losses on loans / nonperforming loans   337.73     312.10     373.21     318.65     323.14  

CONFERENCE CALL INFORMATION:
A live audio webcast of a conference call with analysts will be available beginning at 10:00 AM Eastern Time (9:00 AM Central Time) on Wednesday, January 25, 2023.

The webcast is accessible through Renasant’s investor relations website at www.renasant.com or https://event.choruscall.com/mediaframe/webcast.html?webcastid=4MTPtQZd. To access the conference via telephone, dial 1-877-513-1143 in the United States and request the Renasant Corporation 2022 Fourth Quarter Earnings Webcast and Conference Call. International participants should dial 1-412-902-4145 to access the conference call.

The webcast will be archived on www.renasant.com after the call and will remain accessible for one year. A replay is accessible via telephone by dialing 1-877-344-7529 in the United States and entering conference number 8052042 or by dialing 1-412-317-0088 internationally and entering the same conference number. Telephone replay access is available until February 8, 2023.

ABOUT RENASANT CORPORATION:
Renasant Corporation is the parent of Renasant Bank, a 119-year-old financial services institution. Renasant has assets of approximately $17.0 billion and operates 198 banking, lending, mortgage, wealth management and insurance offices throughout the Southeast as well as offering factoring and asset-based lending on a nationwide basis.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:

This press release may contain, or incorporate by reference, statements about Renasant Corporation 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 the Company’s future financial performance, business strategy, projected plans and objectives and are based on the current beliefs and expectations of management. The Company’s management believes 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 the Company’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ from those indicated or implied in the forward-looking statements, and 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 and, accordingly, 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) the Company’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, mortgage lending and auto 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) the Company’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 the Company’s loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers; (xi) an insufficient allowance for credit losses as a result of inaccurate assumptions; (xii) general economic, market or business conditions, including the impact of inflation; (xiii) changes in demand for loan products and financial services; (xiv) concentration of credit exposure; (xv) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships; (xvi) increased cybersecurity risk, including potential network breaches, business disruptions or financial losses; (xvii) civil unrest, natural disasters, epidemics (including the re-emergence of the COVID-19 pandemic) and other catastrophic events in the Company’s geographic area; (xviii) the impact, extent and timing of technological changes; and (xix) other circumstances, many of which are beyond management’s control.

Management believes that the assumptions underlying the Company’s 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 the Company’s filings with the Securities and Exchange Commission (the “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.

The Company undertakes no obligation, and specifically disclaims any obligation, to update or revise 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.

NON-GAAP FINANCIAL MEASURES:

In addition to results presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”), this press release and the presentation slides furnished to the SEC on the same Form 8-K as this release contain non-GAAP financial measures, including, without limitation, (i) core loan yield, (ii) core net interest income and margin, (iii) adjusted pre-provision net revenue, (iv) adjusted net income, (v) adjusted diluted earnings per share, (vi) tangible book value per share, (vii) the tangible common equity ratio, (viii) loans held for investment excluding PPP loans, (ix) certain performance ratios (namely, the ratio of adjusted pre-provision net revenue to average assets, the adjusted return on average assets and on average equity, and the return on average tangible assets and on average tangible common equity (including on an as-adjusted basis)), and (x) the adjusted efficiency ratio.

These non-GAAP financial measures adjust GAAP financial measures to exclude intangible assets and/or certain charges (such as, among others, merger and conversion expenses, COVID-19 related expenses and expenses related to the voluntary reimbursement of certain re-presentment NSF fees) with respect to which the Company is unable to accurately predict when these charges will be incurred or, when incurred, the amount thereof or, with respect to core loan yield, to exclude the Company’s PPP loans. With respect to COVID-19 related expenses in particular, management added these expenses as a charge to exclude when calculating non-GAAP financial measures because the expenses included within this line item are readily quantifiable and possess the same characteristics with respect to management’s inability to accurately predict the timing or amount thereof as the other charges excluded when calculating non-GAAP financial measures. Management uses these non-GAAP financial measures when evaluating capital utilization and adequacy; with respect to the core loan yield, management excludes PPP loans, which bear an interest rate fixed by Small Business Administration (“SBA”) regulations and are both forgivable and guaranteed by the SBA, to more clearly measure loan yields affected by competitive factors and potential loss in the Company’s loan portfolio and the coverage therefor. In addition, the Company believes that these non-GAAP financial measures facilitate the making of period-to-period comparisons and are meaningful indicators of its operating performance, particularly because these measures are widely used by industry analysts for companies with merger and acquisition activities. Also, because intangible assets such as goodwill and the core deposit intangible, charges such as debt prepayment penalties, restructuring charges and COVID-19 related expenses, and the amount of PPP loans can vary extensively from company to company and, as to intangible assets, are excluded from the calculation of a financial institution’s regulatory capital, the Company believes that the presentation of this non-GAAP financial information allows readers to more easily compare the Company’s results to information provided in other regulatory reports and the results of other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables below under the caption “Non-GAAP Reconciliations”.

None of the non-GAAP financial information that the Company has included in this release or the accompanying presentation slides are intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. Investors should note that, because there are no standardized definitions for the calculations as well as the results, the Company’s calculations may not be comparable to similarly titled measures presented by other companies. Also, there may be limits in the usefulness of these measures to investors. As a result, the Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

Non-GAAP Reconciliations

(Dollars in thousands, except per share data) Three Months Ended   Twelve Months Ended
  Dec 31,
2022
Sep 30,
2022
Jun 30,
2022
Mar 31,
2022
Dec 31,
2021
  Dec 31,
2022
Dec 31,
2021
Adjusted Pre-Provision Net Revenue (“PPNR”)            
Net income (GAAP) $ 46,276   $ 46,567   $ 39,678   $ 33,547   $ 37,054     $ 166,068   $ 175,892  
Income taxes   12,885     13,563     10,857     7,935     11,363       45,240     46,935  
Provision for (recovery of) credit losses (including unfunded commitments)   10,671     9,800     2,450     950     (768 )     23,871     (2,168 )
Pre-provision net revenue (non-GAAP) $ 69,832   $ 69,930   $ 52,985   $ 42,432   $ 47,649     $ 235,179   $ 220,659  
Merger and conversion expense   1,100             687           1,787      
Debt prepayment penalties                   6,123           6,123  
Swap termination gains                   (4,676 )         (4,676 )
Gain on sale of MSR       (2,960 )                 (2,960 )    
MSR valuation adjustment                             (13,561 )
Restructuring charges (benefit)           1,187     (455 )   61       732     368  
Voluntary reimbursement of certain re-presentment NSF fees   1,255                       1,255      
COVID-19 related expenses(1)                   33           1,511  
Adjusted pre-provision net revenue (non-GAAP) $ 72,187   $ 66,970   $ 54,172   $ 42,664   $ 49,190     $ 235,993   $ 210,424  
                 
Adjusted Net Income and Adjusted Tangible Net Income            
Net income (GAAP) $ 46,276   $ 46,567   $ 39,678   $ 33,547   $ 37,054     $ 166,068   $ 175,892  
Amortization of intangibles   1,195     1,251     1,310     1,366     1,424       5,122     6,042  
Tax effect of adjustments noted above(2)   (260 )   (265 )   (291 )   (303 )   (335 )     (1,119 )   (1,354 )
Tangible net income (non-GAAP) $ 47,211   $ 47,553   $ 40,697   $ 34,610   $ 38,143     $ 170,071   $ 180,580  
                 
Net income (GAAP) $ 46,276   $ 46,567   $ 39,678   $ 33,547   $ 37,054     $ 166,068   $ 175,892  
Merger and conversion expense   1,100             687           1,787      
Debt prepayment penalties                   6,123           6,123  
Swap termination gain                   (4,676 )         (4,676 )
Gain on sale of MSR       (2,960 )                 (2,960 )    
MSR valuation adjustment                             (13,561 )
Restructuring charges (benefit)           1,187     (455 )   61       732     368  
Initial provision for acquisitions   2,820                       2,820      
Voluntary reimbursement of certain re-presentment NSF fees   1,255                       1,255      
COVID-19 related expenses(1)                   33           1,511  
Tax effect of adjustments noted above(2)   (1,127 )   626     (264 )   (51 )   (363 )     (816 )   2,294  
Adjusted net income (non-GAAP) $ 50,324   $ 44,233   $ 40,601   $ 33,728   $ 38,232     $ 168,886   $ 167,951  
Amortization of intangibles   1,195     1,251     1,310     1,366     1,424       5,122     6,042  
Tax effect of adjustments noted above(2)   (260 )   (265 )   (291 )   (303 )   (335 )     (1,119 )   (1,354 )
Adjusted tangible net income (non-GAAP) $ 51,259   $ 45,219   $ 41,620   $ 34,791   $ 39,321     $ 172,889   $ 172,639  
Tangible Assets and Tangible Shareholders’ Equity            
Average shareholders’ equity (GAAP) $ 2,139,095   $ 2,173,408   $ 2,177,537   $ 2,249,667   $ 2,231,681     $ 2,184,603   $ 2,209,409  
Average intangible assets   967,005     967,154     968,441     965,430     964,575       967,018     966,733  
Average tangible shareholders’ equity (non-GAAP) $ 1,172,090   $ 1,206,254   $ 1,209,096   $ 1,284,237   $ 1,267,106     $ 1,217,585   $ 1,242,676  
                 
Average assets (GAAP) $ 16,577,840   $ 16,645,481   $ 16,631,290   $ 16,697,264   $ 16,450,640     $ 16,637,852   $ 15,905,986  
Average intangible assets   967,005     967,154     968,441     965,430     964,575       967,018     966,733  
Average tangible assets (non-GAAP) $ 15,610,835   $ 15,678,327   $ 15,662,849   $ 15,731,834   $ 15,486,065     $ 15,670,834   $ 14,939,253  
                 
Shareholders’ equity (GAAP) $ 2,136,016   $ 2,092,281   $ 2,116,877   $ 2,137,642   $ 2,209,853     $ 2,136,016   $ 2,209,853  
Intangible assets   1,015,884     966,461     967,713     969,022     963,781       1,015,884     963,781  
Tangible shareholders’ equity (non-GAAP) $ 1,120,132   $ 1,125,820   $ 1,149,164   $ 1,168,620   $ 1,246,072     $ 1,120,132   $ 1,246,072  
                 
Total assets (GAAP) $ 16,988,176   $ 16,471,099   $ 16,618,101   $ 16,863,757   $ 16,810,311     $ 16,988,176   $ 16,810,311  
Intangible assets   1,015,884     966,461     967,713     969,022     963,781       1,015,884     963,781  
Total tangible assets (non-GAAP) $ 15,972,292   $ 15,504,638   $ 15,650,388   $ 15,894,735   $ 15,846,530     $ 15,972,292   $ 15,846,530  
                 
Adjusted Performance Ratios                
Return on average assets (GAAP)   1.11 %   1.11 %   0.96 %   0.81 %   0.89 %     1.00 %   1.11 %
Adjusted return on average assets (non-GAAP)   1.20 %   1.05 %   0.98 %   0.82 %   0.92 %     1.02 %   1.06 %
Return on average tangible assets (non-GAAP)   1.20 %   1.20 %   1.04 %   0.89 %   0.98 %     1.09 %   1.21 %
Adjusted pre-provision net revenue to average assets (non-GAAP)   1.73 %   1.60 %   1.31 %   1.04 %   1.19 %     1.42 %   1.32 %
Adjusted return on average tangible assets (non-GAAP)   1.30 %   1.14 %   1.07 %   0.90 %   1.01 %     1.10 %   1.16 %
Return on average equity (GAAP)   8.58 %   8.50 %   7.31 %   6.05 %   6.59 %     7.60 %   7.96 %
Adjusted return on average equity (non-GAAP)   9.33 %   8.07 %   7.48 %   6.08 %   6.80 %     7.73 %   7.60 %
Return on average tangible equity (non-GAAP)   15.98 %   15.64 %   13.50 %   10.93 %   11.94 %     13.97 %   14.53 %
Adjusted return on average tangible equity (non-GAAP)   17.35 %   14.87 %   13.81 %   10.99 %   12.31 %     14.20 %   13.89 %
                 
Adjusted Diluted Earnings Per Share            
Average diluted shares outstanding   56,335,446     56,248,720     56,182,845     56,081,863     56,105,050       56,214,230     56,424,484  
                 
Diluted earnings per share (GAAP) $ 0.82   $ 0.83   $ 0.71   $ 0.60   $ 0.66     $ 2.95   $ 3.12  
Adjusted diluted earnings per share (non-GAAP) $ 0.89   $ 0.79   $ 0.72   $ 0.60   $ 0.68     $ 3.00   $ 2.98  
                 
Tangible Book Value Per Share                
Shares outstanding   55,953,104     55,953,104     55,932,017     55,880,666     55,756,233       55,953,104     55,756,233  
                 
Book value per share (GAAP) $ 38.18   $ 37.39   $ 37.85   $ 38.25   $ 39.63     $ 38.18   $ 39.63  
Tangible book value per share (non-GAAP) $ 20.02   $ 20.12   $ 20.55   $ 20.91   $ 22.35     $ 20.02   $ 22.35  
                 
Tangible Common Equity Ratio                
Shareholders’ equity to assets (GAAP)   12.57 %   12.70 %   12.74 %   12.68 %   13.15 %     12.57 %   13.15 %
Tangible common equity ratio (non-GAAP)   7.01 %   7.26 %   7.34 %   7.35 %   7.86 %     7.01 %   7.86 %
Adjusted Efficiency Ratio                
Net interest income (FTE) (GAAP) $ 140,565   $ 132,435   $ 115,321   $ 101,383   $ 103,249     $ 489,704   $ 430,720  
                 
Total noninterest income (GAAP) $ 33,395   $ 41,186   $ 37,214   $ 37,458   $ 47,582     $ 149,253   $ 226,984  
MSR valuation adjustment                             13,561  
Gain on sale of MSR       2,960                   2,960      
Swap termination gains                   4,676           4,676  
Securities gains                   49           2,170  
Total adjusted noninterest income (non-GAAP) $ 33,395   $ 38,226   $ 37,214   $ 37,458   $ 42,857     $ 146,293   $ 206,577  
                 
Noninterest expense (GAAP) $ 101,582   $ 101,574   $ 98,194   $ 94,105   $ 101,115     $ 395,455   $ 429,826  
Amortization of intangibles   1,195     1,251     1,310     1,366     1,424       5,122     6,042  
Merger and conversion expense   1,100             687           1,787      
Debt prepayment penalty                   6,123           6,123  
Restructuring charges (benefit)           1,187     (455 )   61       732     368  
Voluntary reimbursement of certain re-presentment NSF fees   1,255                       1,255      
Provision (recovery) of unfunded commitments   183         450     (550 )   (300 )     83     (500 )
COVID-19 related expenses(1)                   33           1,511  
Total adjusted noninterest expense (non-GAAP) $ 97,849   $ 100,323   $ 95,247   $ 93,057   $ 93,774     $ 386,476   $ 416,282  
                 
Efficiency ratio (GAAP)   58.39 %   58.50 %   64.37 %   67.78 %   67.04 %     61.89 %   65.35 %
Adjusted efficiency ratio (non-GAAP)   56.25 %   58.78 %   62.44 %   67.02 %   64.18 %     60.77 %   65.32 %
                 
Core Net Interest Income and Core Net Interest Margin            
Net interest income (FTE) (GAAP) $ 140,565   $ 132,435   $ 115,321   $ 101,383   $ 103,249     $ 489,704   $ 430,720  
Net interest income collected on problem loans   161     78     2,276     434     577       2,949     4,412  
Accretion recognized on purchased loans   625     1,317     2,021     1,235     2,187       5,198     10,783  
Interest income recognized on PPP loans   21     5     74     619     485       719     24,794  
Non-core net interest income $ 807   $ 1,400   $ 4,371   $ 2,288   $ 3,249     $ 8,866   $ 39,989  
Core net interest income (FTE) (non-GAAP) $ 139,758   $ 131,035   $ 110,950   $ 99,095   $ 99,999     $ 480,838   $ 390,731  
                 
Average earning assets (GAAP) $ 14,774,014   $ 14,860,043   $ 14,845,199   $ 14,841,146   $ 14,607,716     $ 14,830,260   $ 14,055,091  
Average PPP loans   4,940     6,647     7,863     39,506     62,726       14,619     448,959  
Average earning assets excluding PPP loans (non-GAAP) $ 14,769,074   $ 14,853,396   $ 14,837,336   $ 14,801,640   $ 14,544,990     $ 14,815,641   $ 13,606,132  
                 
Net interest margin (GAAP)   3.78 %   3.54 %   3.11 %   2.76 %   2.81 %     3.30 %   3.07 %
Core net interest margin (non-GAAP)   3.76 %   3.50 %   3.00 %   2.71 %   2.73 %     3.25 %   2.87 %
Core Loan Yield                
Loan interest income (FTE) (GAAP) $ 147,519   $ 124,614   $ 107,612   $ 97,001   $ 99,670     $ 476,746   $ 427,296  
Net interest income collected on problem loans   161     78     2,276     434     578       2,949     4,412  
Accretion recognized on purchased loans   625     1,317     2,021     1,235     2,187       5,198     10,783  
Interest income recognized on PPP loans   21     5     74     619     485       719     24,794  
Core loan interest income (FTE) (non-GAAP) $ 146,712   $ 123,214   $ 103,241   $ 94,713   $ 96,420     $ 467,880   $ 387,307  
                 
Average loans (GAAP) $ 11,282,422   $ 10,829,137   $ 10,477,036   $ 10,108,511   $ 9,948,610     $ 10,677,995   $ 10,310,070  
Average PPP loans   4,940     6,647     7,863     39,506     62,726       14,619     448,959  
Average loans excluding PPP loans (non-GAAP) $ 11,277,482   $ 10,822,490   $ 10,469,173   $ 10,069,005   $ 9,885,884     $ 10,663,376   $ 9,861,111  
                 
Loan yield (GAAP)   5.19 %   4.57 %   4.12 %   3.88 %   3.98 %     4.46 %   4.15 %
Core loan yield (non-GAAP)   5.16 %   4.52 %   3.96 %   3.82 %   3.87 %     4.39 %   3.93 %
                 
Adjusted Asset Quality Ratios                
Classified loans $ 200,249   $ 193,844   $ 185,267   $ 178,015   $ 160,790     $ 200,249   $ 160,790  
Special Mention loans   86,172     69,883     87,476     76,949     115,496       86,172     115,496  
Criticized loans(3) $ 286,421   $ 263,727   $ 272,743   $ 254,964   $ 276,286     $ 286,421   $ 276,286  
Criticized loans / total loans (GAAP)   2.47 %   2.37 %   2.57 %   2.47 %   2.76 %     2.47 %   2.76 %

(1) Primarily consists of employee overtime and employee benefit accruals directly related to the response to the COVID-19 pandemic and federal legislation enacted to address the pandemic, such as the CARES Act, and expenses associated with supplying branches with protective equipment and sanitation supplies (such as floor markings and cautionary signage for branches, face coverings and hand sanitizer) as well as more frequent and rigorous branch cleaning.
(2) Tax effect is calculated based on the respective periods’ effective tax rate excluding the impact of discrete items.
(3) Criticized loans include loans in risk rating classifications of classified and special mention.

Contacts: For Media: For Financials:
  John S. Oxford James C. Mabry IV
  Senior Vice President Executive Vice President
  Chief Marketing Officer Chief Financial Officer
  (662) 680-1219 (662) 680-1281

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