$37.65
$69.34
bear $37.65
base $62.65
bull $69.34
margin of safety $22.00
market price* $39.91
Renasant is a Tupelo, Mississippi bank holding company with 277 banking, lending and mortgage offices across the Southeast at the end of 2025, plus a small factoring and asset-based lending unit, Republic Business Credit. On April 1, 2025 it acquired The First Bancshares (116 locations in Louisiana, Mississippi, Alabama, Georgia and Florida; $7.6 billion of assets, $5.2 billion of loans, $6.4 billion of deposits; $1.1 billion purchase price). That grew the bank by about half: loans went from $12.9 billion to $19.05 billion and deposits from $14.6 billion to $21.5 billion between year-end 2024 and year-end 2025, and total assets were $27.0 billion at June 30, 2026. Net interest income rose from $512 million in 2024 to $804 million in 2025. The shares paid for this deal and earlier ones: the diluted share count went from about 42 million in 2016 to about 91 million today, which is why total earnings have grown much faster than earnings per share. How we measured earnings. We use the cash the bank's operations produce, less stock compensation and maintenance capital spending, and we keep loan-loss provisions as a real, recurring cost. We remove the swings from the inventory of mortgage loans the bank funds and sells (these swung 2022 operating cash flow to $574 million) and from other asset and liability timing. On that basis earnings per diluted share were $2.40 (2016), $2.63, $2.80, $2.82, $1.58 (2020, pandemic reserve build), $3.61 (2021), $3.77, $3.53, $2.71 (2024, when deposit costs squeezed margins) and $1.91 (2025). Two one-time items are not in operating cash flow and so are not in our measure: the $53 million gain on selling the insurance agency in 2024 and the 2023 securities repositioning loss. The 2025 figure carries the full $107.5 million provision (primarily the one-time provision recorded on the acquired loans) and $49.3 million of merger costs. The 2024 operating cash flow was restated lower in the 2025 annual report (from $129.4 million to $106.4 million); we used the restated figure. Earnings level. We anchor on the median of 2021 through 2025, which is $3.53 per share. That window covers the whole post-pandemic cycle: the mortgage boom, the 2023 to 2024 funding squeeze and the merger year, with nothing excluded. Earlier years describe a smaller bank in the zero-rate era. The first half of 2026 supports the level: operating cash flow of $182.5 million, less working capital swings, stock compensation, capital spending and an $11.9 million provision, comes to about $168 million, or roughly $3.61 per share annualized on 93.2 million diluted shares (net income was $88.2 million in the first quarter and $87.1 million in the second). We did not move the anchor on those two quarters. Growth-path check: in the latest completed year, 2025, earnings per share were 29% below 2024 ($1.91 versus $2.71). Our first year assumes growth of about 1% over the anchor, or $3.56. We expect the 2025 shortfall not to repeat because it came from the $49.3 million of merger costs and the acquisition provision disclosed in the 2025 annual report, and the first half of 2026 ran at $3.61 on the same measure. What growth is credited. Per-share earnings grew about 1.6% a year from 2016 to 2024 ($2.40 to $2.71), even with the dilution from acquisitions; we do not credit more than that. In the base case we credit 1.5% a year, then take off about 0.5% a year because roughly $0.19 per share a year of cash earnings is an add-back for amortization of acquired intangibles (which fell from $146.6 million at year-end 2025 to $138.0 million at June 30, 2026) and will run off over roughly eight years. Net growth is 1.0% a year for ten years, after which earnings are held flat: the established deposit franchise is the named driver, and nothing is credited beyond holding the level. Left out: future acquisitions (large, stock-funded and not a small repeatable step), the cost savings management targets from the merger, loan growth faster than retained capital supports, and any benefit from lower interest rates. Base case, worth $62.65 per share. Earnings start at $3.56 and grow 1.0% a year, with a normal credit slowdown in years 5 and 6: charge-offs about 0.4 points of loans above normal for two years (roughly $78 million before tax, or $0.65 per share after tax, each year). The first ten years are worth $26.37 and the period after is worth $36.28. Bear case, worth $37.65 per share. A bank is built on credit and rates, so the bear case carries a full downturn. Earnings start near the 2024 funding-squeeze level of $2.71 and do not grow. Then comes a Southeast credit cycle like 2008 to 2012: in 2011 and 2012, per Renasant's own earnings releases, annualized quarterly net charge-offs ran from about 0.6% to 1.6% of loans and first-half earnings were only $0.49 to $0.53 per share. We apply charge-offs of 0.8%, 1.4%, 1.0% and 0.5% of $19.0 billion of loans in years 2 to 5 ($703 million, versus about $99 million of normal losses already inside the anchor). The extra is $604 million before tax, or $5.02 per share after tax, plus $0.30 a year in years 2 to 4 for lost interest on non-accruing loans and workout costs. Earnings per share run $2.69, $1.30, $0.33, $0.94 and $2.01 and then settle near $2.52 once the acquired-intangibles add-back has run off. Earnings stay positive every year, but in year 3 they fall about $0.63 short of the $0.96 dividend, so the bank draws briefly on capital; tangible equity stays roughly where it is today and no new shares are needed. The first ten years are worth $14.20 and the period after $23.45. That is above tangible book value of $25.34 per share only in the sense that the franchise keeps earning about 10% in cash on its tangible equity after the cycle and is funded by $21.7 billion of deposits. The loan book argues against a harsher cycle: non-owner-occupied commercial real estate is the largest exposure ($6.25 billion, 32.8% of loans, including $1.39 billion of multifamily and $723 million of hotels), but weighted-average loan-to-value is only 51% to 58% by property type. Office is the weak spot: $463 million of non-medical office, of which 6.72% is non-performing, and senior housing at 3.71%. We left out a bust deeper or longer than Renasant has actually recorded. Bull case, worth $69.34 per share. Earnings start at $3.70, between the 2022 peak ($3.77) and the first-half 2026 pace ($3.61), and grow 1.5% a year net (2.0% before the amortization run-off, just above the 1.6% record because of the buyback: the bank repurchased $136 million of stock in the first half of 2026 and shares outstanding fell from 94.1 million in February to 91.4 million in July, while it paid $44 million of dividends, against $175 million of net income). No credit cycle is included, which is why this is a 90th-percentile outcome. Debt. A bank's deposits and borrowings are its raw material and the interest on them is already charged in owner earnings, so no debt is subtracted: each case's business value is also its value per share. Long-term debt was $796 million at June 30, 2026 (up from $500 million at year-end 2025). Capital and credit today. Tangible equity is about $2.32 billion, 9.1% of tangible assets, or about $25.34 per share. Non-performing loans were $176 million (0.92% of loans), up from $113 million (0.88%) a year earlier, after adding The First's loans. The allowance for credit losses is $294 million (1.54% of loans). Net charge-offs were 0.15% of average loans in 2025 and 0.06% in 2024. Margin-of-safety price, $22.00. How sure are we of the earnings level? Moderately. The 2021 to 2025 median of $3.53 sits inside a $2.71 to $3.77 range and the first half of 2026 matches it, but the combined bank has only about 15 months of history and the first half may reflect an unusually benign credit period (a provision of just $11.9 million). The worst that could plausibly happen is a Southeast real estate bust worse than Renasant's own 2011 and 2012 record, hitting office, senior housing and construction, together with another squeeze on deposit costs. The structure would survive it: in the bear case earnings stay positive every year and deposits fund $21.7 billion of the $27.0 billion of assets. If we are wrong on the things most likely to be wrong: (1) if the true earnings level is the longer-run $2.82 (the 2018 to 2024 median) rather than $3.53, the base value falls to about $50; (2) if the credit cycle lasts twice as long as modeled, the bear value falls to about $35; (3) a further large stock-funded acquisition would add shares without adding value per share, as the share count history shows. The price assumes a holding period of about five years. Over that period the bank pays $0.96 a share in dividends (the quarterly rate is $0.24) and repurchases shares, and at $22 the first-half 2026 cash earnings run at about 16% of the price each year (about 14% to 16% if earnings were $3.00 to $3.50). The margin-of-safety price is $22.00: it is below tangible book value, cash earnings on the current run rate are roughly 14% to 16% a year of that price, and a repeat of the 2011 and 2012 credit experience would still imply a positive return over five years. Above that price the margin for the risks no case fully models (acquisition dilution, a real estate bust deeper than Renasant has recorded, and a thin history for the combined bank) is too small to support 20% a year. What would make us wrong: a credit cycle deeper or longer than 2011 and 2012, further stock-funded deals, or a return to ultra-low rates that holds earnings per share nearer the 2016 to 2019 range of $2.40 to $2.82. Our previous estimates (bear $23.93, base $43.63, bull $66.52, margin-of-safety price $19.00) were prepared on a different earnings basis and are not comparable with these.