RENASANT CORP (RNST): what the price assumes

In the published model solve dated 2026-Q2, anchored at $44.09, RENASANT CORP (RNST) is priced for 10.4% return on equity. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-28.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/RNST

Headline

FieldValue
TickerRNST
CompanyRENASANT CORP
Current price$44.09/sh
CompositionCommunity Banks 97% / Wealth Management 3%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basisfinancials
Return on equity needed10.4%
Return on equity now4.7%
ROE gap+5.7pp
Price-to-book1.05x

Solve inputs: computed at a 10.1% cost of equity with 4% terminal growth over a 10-year stage, on common book equity (FY2026); each 1pp of cost of equity moves the implied ROE ~1.1pp.

How unusual the bet is: elevated

ReferenceValue
vs own history+3.30σ
cohort percentile (of 166 peers)18
sustained it ~10 years at this level75%
implied end-window share0%

Valuation X-Ray

Every valuation family lands below the price. The price therefore sits beyond what those standard frames encode.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.65x3expensive
Earnings1.73x1expensive
Relative—0—
Growth—0—

Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.4%); the inversion above states its own rate.

Per-Model Detail (n=4)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——no—
Bank Fair Value (P/TBV)—$12.163.63xyesTBVPS $25.16 × 0.48x (ROE (TTM) 5.9% / CoE 9.3%, g=3.8% (sustainable: 65% retention × ROE, 5% cap; not the terminal-growth assumption), credit 1.58% allowance/loans → ×0.97)
Relative ValuationRelative——noP/E 12.35x (blended: static sector reference 10x + trailing (TTM) 18x), scenarios: 9.9x / 12.3x / 14.8x (bear / base = reference held flat / bull), EV/EBITDA N/Ax
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$26.711.65xyesBV/sh $41.91, ROE (TTM) 5.9%, ke 9.3%
Two-Stage Excess ReturnAsset$20.702.13xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth——noRev $0.9B, growth 30% (input: historical growth; tapered), Terminal P/S: 3.6x / 4.6x / 5.5x (bear / base = today's held flat / bull, cap 12x)
Growth-Adjusted P/ERelative——no—
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings——no—
Residual IncomeAsset——no—
Graham NumberAsset$47.170.93xyes√(22.5 × EPS $2.36 × BVPS $41.91) — Graham's conservative floor
EV/EBITDA RelativeRelative——no—
FCF YieldEarnings——no—
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings——noEPS $2.36 × (8.5 + 2×-5.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative——no—
PEG Fair ValueRelative——no—
Earnings YieldEarnings$25.511.73xyesEPS $2.36 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Economic-Unit Decomposition (Sum Of The Parts)

The issuer is a funded financial business. Debt, interest, and cash flows are operating inputs, so industrial EV, net-debt, WACC, and free-cash-flow lenses do not apply; value the common-equity claim with book, earnings, capital, and payout economics.

UnitRoleValuation basisRevenueReported profitValue evidenceStatus
Community Banksfinancialequity1.0B reported-currency—withheldunresolved standalone equity facts required
Wealth Managementfinancialequity0.0B reported-currency—withheldunresolved standalone equity facts required

No unit-level total common-equity value is stated. Each financial unit requires supported standalone common equity, normalized earnings, capital adequacy, and payout capacity. Consolidated debt, interest, and cash are operating balances, not an enterprise-to-equity bridge; company-level book, earnings, capital, and payout lenses remain the coherent cross-checks.

Solvency

FieldValue
Share count CAGR (dilution)2.9%

Deposit/float-funded balance sheet: debt is funding, not corporate leverage, and GAAP operating cash flow follows loan flows. Net-debt, interest-coverage, and cash-burn lenses do not apply. The solvency frame for a financial is regulatory capital and payout capacity (CET1, stress buffer, dividends plus buybacks against earnings).

Bullet Takeaways

Bull Case

A bank is worth the return it earns on its capital, and the right way to read Renasant is to look past the merger-distorted trailing numbers to the run-rate the clean quarter just revealed. On a trailing basis return on equity sits near 5 percent, depressed by the one-time costs of absorbing The First, but the first quarter shows the underlying engine: net income of $88.2 million, diluted earnings per share of $0.94 up from $0.65 a year earlier, a return on assets of 1.33 percent, and a return on average tangible common equity of 16.36 percent. A community bank earning a mid-teens return on tangible equity is a good bank; the market is still pricing the merger-suppressed average, which is the gap the bull case exploits.

The merger is the source of the improvement, not a drag to be endured. The integration of The First added scale and, critically, low-cost deposits; the 10-K notes the rising deposit base from the acquisition while the Federal Reserve's rate cuts began to lower funding costs, and the first quarter's net interest margin of 3.87 percent with an adjusted efficiency ratio of 52.82 percent shows the combined bank operating efficiently. Deposits grew to $22.1 billion, including higher noninterest-bearing balances, the cheapest funding a bank has, and management continues to deploy merger cost savings while hiring to support organic growth. Synergy realization plus a stronger deposit franchise is exactly the recipe for the return on equity the bull expects to persist.

Credit quality and capital discipline round out the case. Net loan charge-offs ran just $2.3 million, or 0.05 percent annualized, with nonperforming loans at 1.06 percent of total loans, the kind of clean book that signals conservative underwriting rather than reaching for yield. The board raised the quarterly dividend to $0.24 and expanded the stock-repurchase authorization by $100 million, returning capital while still funding growth. A bank trading near book value while earning a mid-teens return on tangible equity, with clean credit and a strengthened deposit base, is the value-and-quality setup that rewards looking through a transitional trailing figure to the franchise underneath.

Bear Case

The valuation methods disagree sharply on Renasant, and the conservative ones are flashing a warning the bull case has to answer. The asset-based and earnings-power methods, anchored on the actual trailing return on equity near 5 percent, read the stock as expensive: at a roughly $41 price (June 28, 2026) against book value of about $41 a share, the market is paying full book for a bank whose demonstrated trailing return does not clear its cost of capital. Only the relative-multiple and growth methods reach the price, and they do so by crediting a normalization that has not yet shown up in the trailing twelve months. When the methods built on what the bank has actually earned say expensive and only the methods that assume improvement say fair, the price is leaning on the recovery rather than the record.

That recovery hinges on merger execution, which is never guaranteed. The 10-K is candid about integration risk, citing the challenge of combining "the customers, employees, processes and procedures of the acquired entity into our own" and the uncertainty around "the amount of longer-term cost savings" and profitably deploying acquired funds. The strong first-quarter run-rate is one clean quarter; if synergies fall short, attrition rises, or the acquired loan book seasons worse than expected, the return on equity could settle below the mid-teens the bull extrapolates. The price assumes a sustained return on equity around 10 percent, which runs well above the trailing figure, so any stumble in integration leaves the stock paying for performance it has not consistently delivered.

The macro backdrop adds risk a bank cannot control. Net interest margin depends on the shape of the rate curve and on deposit competition; the same rate cuts that are lowering funding costs also compress asset yields, and deposits can reprice or leave if competitors bid up. Loans actually declined modestly in the quarter, so the growth that justifies the multiple has to come from a loan book that is currently flat. Renasant is a sound bank, but at full book value with a trailing return below its cost of capital and a thesis resting on merger synergies and a steady rate environment, the price gives the buyer little protection if the normalization proves slower or shallower than the clean quarter implies.

Valuation

A bank is worth the return it earns on its capital, so Renasant is read off price-to-book. At today's price the market is paying about 1 times book and assuming the bank sustains a return on equity near 10 percent. The complication is that the trailing return is only about 5 percent, depressed by merger charges, so the price runs well above what the bank has actually earned over the last year, even as the most recent clean quarter, with a 16.36 percent return on tangible common equity, suggests the run-rate is far higher.

That split is exactly what the methods show. The asset-based and earnings-power methods, which key off the depressed trailing return, read the price as expensive; the relative-multiple and growth methods, which credit normalization, reach it. The honest read is that the valuation is a bet on the post-merger run-rate, not the trailing average, becoming the baseline. The price-to-book sits in the lower half of the regional-bank peer group, so the bet is not aggressive relative to peers, but it does require the synergy-driven profitability to stick.

For a bank, the balance sheet is the business, and the solvency frame is capital strength and credit quality rather than corporate leverage. Both look sound: net charge-offs of 0.05 percent annualized and nonperforming loans at 1.06 percent describe a clean book, and the bank is returning capital through a raised dividend and an expanded buyback while still funding growth. Deposit costs, which the filing shows benefiting from both the acquired low-cost base and the Fed's rate cuts, are the lever to watch. The price is underwriting that the merger-improved return on equity holds; the credit and capital position is reassuring, but the valuation rests on a normalization the trailing numbers have not yet confirmed.

Catalysts

The first quarter was the cleanest look yet at the combined bank, and it was strong. Renasant reported net income of $88.2 million and diluted EPS of $0.94, up from $0.65 a year earlier, with adjusted EPS of $0.93 beating the $0.84 consensus; return on assets was 1.33 percent, return on average equity 9.20 percent, and return on average tangible common equity 16.36 percent. Net interest margin was 3.87 percent and the adjusted efficiency ratio improved to 52.82 percent, reflecting merger synergies.

The balance sheet and capital actions point to confidence in the run-rate. Deposits rose to $22.1 billion, up $626.4 million linked quarter including roughly $380.4 million of seasonal public-fund inflows, while loans were $19.0 billion, down modestly; credit stayed clean with net charge-offs of 0.05 percent annualized and nonperforming loans at 1.06 percent. The board raised the quarterly dividend by a penny to $0.24, payable June 30, 2026, and expanded the buyback authorization by $100 million, leaving about $136.8 million available. The catalysts to watch are continued realization of merger cost savings, deposit-cost trends as rates move, and a return to loan growth, the three levers that confirm whether the post-merger profitability is durable.

Peer Cohorts (Per Segment, With Filing Citations)

Community Banks (reported)

Wealth Management (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

RNST Q1 2026 results

View the full interactive RNST report on boothcheck