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RENASANT CORP (RNST)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 adjusted diluted EPS was $0.77, a slight miss versus S&P Global consensus $0.78; GAAP diluted EPS was $0.63 as merger/conversion expenses weighed on results; adjusted EPS improved YoY versus $0.70 in Q3 2024 . EPS consensus values from S&P Global: $0.78*.
  • Net interest margin held at 3.85% (FTE), with adjusted NIM up 4 bps QoQ to 3.62%, supported by loan growth of $462.1M (9.9% annualized); cost of total deposits rose 2 bps QoQ to 2.14% .
  • Noninterest income declined $2.3M QoQ (ex-MSR gain in Q2), and mortgage banking income fell $2.2M QoQ on lower lock volume and gain-on-sale margin; provision for credit losses was $10.5M as criticized loans rose broadly .
  • Capital actions: Board approved a $150M share repurchase authorization (no Q3 buybacks), redeemed $60M sub debt on Oct 1, and raised the quarterly dividend to $0.23 (+$0.01) payable Jan 1, 2026—key potential stock catalysts .
  • Management guided to modest NIM contraction in Q4 and core noninterest expense reductions of $2–3M in Q4 and another $2–3M in Q1 2026, with modeled synergies more evident going forward .

What Went Well and What Went Wrong

  • What Went Well

    • “Renasant’s financial performance in the third quarter was strong with good loan growth and profit improvement… The integration with The First continues to go well” — Kevin D. Chapman (CEO) .
    • Adjusted net interest margin expanded 4 bps QoQ to 3.62%; net interest income (FTE) rose to $228.1M (+$5.4M QoQ) helped by loan growth .
    • Capital flexibility improved: new $150M buyback authorization, sub debt redemption ($60M), book value per share increased to $40.26; TCE ratio 8.98% .

  • What Went Wrong

    • Noninterest income softened QoQ (−$2.3M ex-MSR) and mortgage banking income fell $2.2M QoQ; gain-on-sale margin decreased to 1.32%, lock volume down $89.4M QoQ .
    • Deposit costs rose 2 bps QoQ (cost of total deposits 2.14%); management cited ongoing competitive pressure in deposit pricing .
    • Credit metrics mixed: criticized loans to total loans increased to 3.22% (vs 2.66% in Q2); NPLs/loans rose to 0.90% (vs 0.76% in Q2); coverage ratio declined to 173.47% (vs 204.97% in Q2) .

Financial Results

Headline P&L and EPS across periods (oldest → newest):

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Net Interest Income (FTE) ($USD Millions)$133.6 $137.4 $222.7 $228.1
Noninterest Income ($USD Millions)$89.3 $36.4 $48.3 $46.0
Net Income (GAAP) ($USD Millions)$72.5 $41.5 $1.0 $59.8
Diluted EPS (GAAP) ($)$1.18 $0.65 $0.01 $0.63
Adjusted Diluted EPS (non-GAAP) ($)$0.70 $0.66 $0.69 $0.77

Profitability and spread metrics:

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Net Interest Margin (FTE) (%)3.36 3.45 3.85 3.85
Adjusted Net Interest Margin (%)3.32 3.42 3.58 3.62
Efficiency Ratio (GAAP) (%)54.73 65.51 67.59 67.05
Adjusted Efficiency Ratio (%)64.62 64.43 57.07 57.51

Balance sheet and capital:

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Loans Held for Investment ($USD Billions)$12.63 $13.06 $18.56 $19.03
Deposits ($USD Billions)$14.51 $14.77 $21.58 $21.42
CET1 Ratio (%)12.88 12.59 11.09 11.04
TCE Ratio (%)9.76 9.99 8.77 8.98
Book Value per Share ($)$41.82 $42.79 $39.77 $40.26

Credit quality:

MetricQ3 2024Q1 2025Q2 2025Q3 2025
NPLs / Loans (%)0.94 0.76 0.76 0.90
Criticized Loans / Loans (%)3.02 2.45 2.66 3.22
ACL / Loans (%)1.59 1.56 1.57 1.56
Coverage Ratio (ACL/NPL) (%)168.07 206.55 204.97 173.47
Net Charge-offs ($USD Millions)$0.70 $(0.13) $12.05 $4.34

Revenue and EPS vs S&P Global consensus (current year):

MetricQ1 2025Q2 2025Q3 2025
EPS Actual ($)0.66 0.69 0.77
EPS Consensus ($)0.61*0.73*0.78*
EPS Beat/MissBeat +0.05*Miss −0.04*Miss −0.01*
Revenue Actual ($USD Millions)165.9*185.9*259.1*
Revenue Consensus ($USD Millions)170.1*264.0*271.2*
Revenue Beat/MissMiss −4.1*Miss −78.2*Miss −12.1*

Values marked with * retrieved from S&P Global.

Segment breakdown – Noninterest income composition:

Component ($USD Thousands)Q3 2024Q2 2025Q3 2025
Service charges on deposit accounts$10,438 $13,618 $13,416
Fees and commissions$4,116 $6,650 $4,167
Wealth management revenue$5,835 $7,345 $8,217
Mortgage banking income$8,447 $11,263 $9,017
BOLI income$2,858 $3,383 $4,235
Other$4,256 $6,075 $6,974
Total Noninterest Income$89,299 $48,334 $46,026

Key KPIs:

KPIQ3 2025
Loan growth QoQ ($USD Millions)$462.1 (9.9% annualized)
Deposits change QoQ ($USD Millions)$(158.1) (public funds seasonality −$169.6M)
Cost of total deposits (%)2.14% (up 2 bps QoQ)
Adjusted loan yield (%)6.23% (+5 bps QoQ)
Noninterest-bearing deposits (% of total)24.5%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted NIMQ4 2025Modest expansion expected post-Q3 (prior commentary) Modest contraction in Q4; modest expansion in 2026 (assumes four rate cuts) Lower near term, higher outer year
Core Noninterest ExpenseQ4 2025, Q1 2026Not specifiedDecrease ~$2–3M in Q4; additional ~$2–3M decrease in Q1 2026 New reduction plan
Deposit BetasFull-year 2026Not specifiedMid-30% betas on interest-bearing deposits and loans Set expectation
Share Repurchase AuthorizationThrough Oct 2026$100M authorization through Oct 2025 $150M authorization through Oct 2026; no Q3 2025 buybacks Raised
Dividend per ShareQ4 2025 (payable Jan 1, 2026)$0.22 (Q2–Q3 2025) $0.23 (increase of $0.01) Raised
Subordinated DebtOct 1, 2025Not applicableRedeemed $60M sub notes Deleveraging step

Earnings Call Themes & Trends

TopicQ1 2025 (prior two quarters summarized)Q2 2025Q3 2025Trend
Integration & SynergiesMerger with The First completed Apr 1; groundwork laid Systems conversion planned early Aug; efficiencies to begin in Q3 Conversion complete; modeled synergies to be more evident; core NIE reductions targeted Improving execution
Margin trajectoryNIM up 9 bps QoQ to 3.45% NIM up to 3.85%; adjusted NIM +16 bps QoQ NIM flat at 3.85%; adjusted NIM +4 bps QoQ Stabilizing
Deposit costsCost of deposits down 13 bps QoQ to 2.22% Down to 2.12% Up 2 bps QoQ to 2.14%; competitive pressures noted Slightly pressured
Loan growth+$170.6M (5.4% annualized) +$311.6M (6.9% annualized) +$462.1M (9.9% annualized) Accelerating
Credit qualityNPLs/loans fell to 0.76%; criticized loans fell to 2.45% NPLs stable at 0.76%; criticized loans up to 2.66% NPLs rose to 0.90%; criticized loans up to 3.22% Deteriorated modestly
Capital actionsNone$100M buyback in place through Oct-25 $150M buyback authorized; $60M sub debt redeemed; dividend increased Enhancing capital returns
Mortgage bankingGain-on-sale margin 1.42%; locks $632.1M Margin 1.87%; locks $679.6M Margin 1.32%; locks $590.2M Softer QoQ

Management Commentary

  • “The integration with The First continues to go well and we believe positions us to meet the financial goals of the merger.” — Kevin D. Chapman (CEO) .
  • “With systems conversion now complete, we expect modeled synergies to be more evident in our results going forward.” — Jim Mabry (CFO) .
  • “Our adjusted total cost of deposits increased by four basis points to 2.08%, while our adjusted loan yields increased five basis points to 6.23%.” — Kevin D. Chapman (CEO) .
  • “Our sense is that we could grow those capital ratios anywhere between 60 and 70 basis points between now and year-end 2026… Buyback is certainly high on that list in terms of levers we might pull.” — Jim Mabry (CFO) .

Q&A Highlights

  • Loan growth and pipelines: Broad-based growth across geographies and lending units, including Gulf Coast legacy markets; management expects continued opportunities post-integration .
  • Expense trajectory: Core NIE expected to decline $2–3M in Q4 and another $2–3M in Q1 2026; majority of conversion costs recorded by Q3 .
  • Margin outlook: Modest contraction in Q4; modest expansion in 2026, assuming four rate cuts; scheduled accretion likely to track Q3 levels .
  • Credit update: Criticized loans increased broadly (CRE, C&I, self-storage, senior housing); management does not see loss exposure in the downgrade cohort and emphasizes proactive risk-grading .
  • Deposit strategy: Aim to grow core deposits in line with loan growth; some public fund seasonality may reverse in late Q4; deposit pricing competition remains elevated .

Estimates Context

  • Q3 2025 adjusted EPS of $0.77 was a slight miss versus S&P Global consensus $0.78; revenue of $259.1M missed consensus $271.2M, driven by lower mortgage banking and slightly higher funding costs; provision remained elevated with criticized loans up QoQ . EPS and revenue consensus/actual values from S&P Global*.
  • Q2 2025 EPS missed ($0.69 vs $0.73*) and revenue missed materially ($185.9M vs $264.0M*), reflecting merger-related noise and day-one provisions . Values from S&P Global*.
  • Q1 2025 EPS beat ($0.66 vs $0.61*), though revenue was modestly below ($165.9M vs $170.1M*), as NIM improved and deposit costs fell . Values from S&P Global*.

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Integration synergy realization is shifting from conversion to operating leverage: adjusted NIM up 4 bps QoQ and core NIE reductions guided for Q4 and Q1 2026, supporting margin and efficiency improvement in 2026 .
  • Loan growth is strong and broad-based (+$462.1M QoQ), but funding costs and deposit competition temper spread gains; watch deposit betas and public fund seasonality into late Q4 .
  • Credit metrics warrant monitoring: criticized loans ratio rose to 3.22% and NPLs/loans to 0.90%; coverage remains solid at 173%, but trajectory bears watching as rates evolve .
  • Capital return optionality increased: $150M buyback authorization, dividend raised to $0.23, and sub debt redeemed—providing flexibility to support organic growth and potential shareholder returns .
  • Near-term modeling: anticipate modest NIM contraction in Q4, then modest expansion in 2026; factor in $2–3M QoQ reductions in core NIE in Q4 and Q1 2026 .
  • Mortgage banking softer QoQ (lower locks and gain-on-sale margins); fee mix shifting toward wealth management and BOLI—diversification helps but contributes less upside than mortgage peaks .
  • Potential catalysts: synergy delivery (efficiency ratio progress), deposit mix improvements, buyback execution, and credit normalization; risks include deposit pricing pressure and criticized loan migration .