What Happened?
Shares of regional banking company Renasant (NYSE: RNST) fell 3.5% in the afternoon session after the company reported second-quarter financial results that included a miss on earnings per share. The regional bank announced adjusted earnings of $0.69 per share, which fell short of analysts' consensus estimates of $0.73. While revenue of $267.2 million came in ahead of forecasts, investors appeared to focus on weaker credit quality metrics. The bank's total nonperforming loans, which are loans in or near default, came in at $141.86 million, significantly higher than the $102.76 million analysts had projected. Furthermore, the company's efficiency ratio, a measure of a bank's overhead as a percentage of its revenue, was 67.6%, worse than the 62.2% that was anticipated. Renasant's GAAP net income was heavily impacted by its recent merger with The First Bancshares, including a $66.6 million provision for credit losses and $20.5 million in merger-related expenses.
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What Is The Market Telling Us
Renasant’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
Renasant is up 4.3% since the beginning of the year, and at $36.90 per share, it is trading close to its 52-week high of $39.39 from February 2025. Investors who bought $1,000 worth of Renasant’s shares 5 years ago would now be looking at an investment worth $1,538.
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