Renasant Q3 Earnings Fall Sequentially as Loans Grow 11.5% Annualized

Renasant Corporation reported stronger year-over-year earnings for the third quarter of 2026 as loan growth accelerated, although profit declined from the prior quarter and net interest margin narrowed. The bank ended September with $19.75 billion of loans, up $555.9 million sequentially, while deposits slipped and short-term borrowings increased.

Net income was $78.9 million, or $0.86 per diluted share, compared with $87.1 million, or $0.94 per share, in the second quarter. A year earlier, Renasant earned $59.8 million, or $0.63 per share. Adjusted net income and adjusted diluted earnings, both non-GAAP measures, were also $78.9 million and $0.86 per share.

Return on average assets was 1.16%, down from 1.30% in the prior quarter, while adjusted return on average tangible common equity, a non-GAAP measure, declined to 14.51% from 16.25%. The adjusted efficiency ratio was 54.70%, compared with 54.92% in the second quarter.

Loan growth outpaces deposit funding

Loans increased 11.5% on an annualized linked-quarter basis, driven by strong production and lower payoff activity. Quarterly production reached $1.21 billion, up from $957 million, while payoffs fell to $790 million from $895 million.

Non-owner-occupied commercial real estate accounted for $250 million of the sequential increase, followed by $102 million from construction and land development loans. Commercial and industrial loans rose $88 million, owner-occupied commercial real estate increased $56 million, and one-to-four-family real estate loans added $65 million. Consumer loans declined $5 million.

Deposits decreased $73.2 million to $21.63 billion. Renasant attributed the decline primarily to $214.7 million of public-fund outflows, which were partly offset by growth in consumer and commercial deposits. Noninterest-bearing accounts represented 23.1% of total deposits, while the total cost of deposits edged up one basis point to 1.97%.

Short-term borrowings rose $491.3 million during the quarter. The loans-to-deposits ratio increased to 91% from 88%, while cash and securities declined to 16.5% of total assets from 17.4%. Total assets reached $27.52 billion at September 30.

Margin narrows as funding costs rise

Net interest margin was 3.77%, six basis points lower than in the second quarter. Adjusted net interest margin on a fully taxable-equivalent basis was 3.58%, down three basis points. Renasant noted that the second quarter included $2.7 million, or four basis points, of accelerated bond-discount accretion; excluding that item, adjusted margin increased two basis points sequentially.

The reported loan yield was unchanged at 6.31%, while adjusted loan yield rose five basis points to 6.08%. Fully taxable-equivalent net interest income increased to $228.6 million from $227.7 million, and adjusted net interest income rose to $217.6 million from $214.5 million.

Noninterest income decreased $1.9 million to $49.3 million, primarily because of lower mortgage banking income related to higher mortgage rates, reduced production and market-value adjustments on loans held for sale. Mortgage banking income fell to $7.3 million from $9.2 million, while locked mortgage volume declined to $520.6 million from $611.6 million.

Noninterest expense decreased $1.2 million to $160.3 million. The decline reflected lower deferred-compensation expense tied to market valuations and higher deferred loan costs associated with loan growth, partly offset by increased health-insurance claims.

Credit indicators improve despite one larger charge-off

Net loan charge-offs were $10 million, equal to 0.20% of average loans on an annualized basis. One credit accounted for 16 basis points of the total charge-off rate.

Nonperforming loans declined to 0.89% of total loans from 0.97%, while criticized loans fell to 2.50% from 2.66%. Loans 30 to 89 days past due represented 0.19% of total loans, compared with 0.16% in the previous quarter. The allowance for credit losses remained nearly unchanged at $296.1 million, though the allowance-to-loans ratio decreased four basis points to 1.50% as the loan portfolio expanded.

Commercial real estate remained a substantial part of the portfolio. Non-owner-occupied commercial real estate totaled $6.4 billion, or 32.3% of loans, while construction and land development loans totaled $2.1 billion, or 10.7%.

Capital returns continue

Renasant repurchased $42.6 million of common stock during the quarter at a weighted-average price of $41.05 and redeemed $40 million of subordinated notes on September 1. Effective October 27, the board authorized a new $175 million share-repurchase program that will remain in effect until October 2027 or until the full authorization is used, whichever occurs first.

The common equity Tier 1 capital ratio was 10.92% at quarter-end, compared with 11.06% three months earlier. The total risk-based capital ratio decreased to 15.52% from 15.94%, and the tangible common equity ratio, a non-GAAP measure, was 8.80%.

Renasant identified acquisition integration, changes in interest rates and funding costs, credit deterioration, deposit outflows, competitive pressure and cybersecurity threats among the factors that could affect future results. The company also cited its ability to remediate the material weakness in internal control over financial reporting identified in its 2025 annual report as a continuing risk.