Renasant (RNST) in Tupelo, Miss., posted lower quarterly earnings tied to its purchase of First M&F in Kosciusko, Miss.
The $5.7 billion-asset company said Wednesday that the costs of the Sept. 1 acquisition contributed to a 6% decline in profit compared to a year earlier. The company earned $6.6 million in the third quarter. Excluding merger expenses, the company would have earned $9.3 million.
Net interest income rose 17% from a year earlier, to $38.7 million. The net interest margin compressed 8 basis points from a year earlier, to 3.86%. The smaller margin was a function of pricing pressure, Robin McGraw, Renasants chairman and chief executive, said in a press release.
"To combat the long-term interest rate risks associated with low rate loans for extended periods of time, we have made a concerted effort to shorten our repricing terms while maintaining new and renewed rates," McGraw said. "As a result of these efforts, the yields on our new and renewed loan production improved slightly during the third quarter compared to recent quarters while reducing the weighted average repricing term."
Noninterest income rose 5% from a year earlier, to $18.9 million. Noninterest expenses rose 20% from a year earlier, to $46.6 million, as the company paid pretax merger expenses and hired staff to handle new lines of business. The loan-loss provision fell 50% from a year earlier, to $2.3 million.
Renasant agreed to pay $119 million in stock for First M&F in February.