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Section 1: 8-K (8-K)

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false0000715072 0000715072 2019-10-21 2019-10-21


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

October 21, 2019
Date of report (Date of earliest event reported)

RENASANT CORPORATION
(Exact name of registrant as specified in its charter)

Mississippi
001-13253
64-0676974
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)

209 Troy Street, Tupelo, Mississippi 38804-4827
(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code: (662) 680-1001
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common stock, $5.00 par value per share
RNST
The NASDAQ Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.






Item 2.02. Results of Operations and Financial Condition.
 
On October 21, 2019, Renasant Corporation issued a press release announcing earnings for the third quarter of 2019. The press release is furnished as Exhibit 99.1 to this Form 8-K.

Item 9.01.    Financial Statements and Exhibits.
(d)    The following exhibit is furnished herewith:
Exhibit No.    Description
99.1
104
The cover page of Renasant Corporation's Form 8-K is formatted in Inline XBRL.






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
RENASANT CORPORATION
Date: October 21, 2019
 
By:
/s/ C. Mitchell Waycaster
 
 
 
C. Mitchell Waycaster
 
 
 
President and Chief Executive Officer
 
 
 
 





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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


400513559_ex991rnstcorpimagea16.jpg



Contacts:
For Media:
 
For Financials:
 
John Oxford
 
Kevin Chapman
 
Senior Vice President
 
Executive Vice President
 
Director of Marketing and Public Relations
 
Chief Operating and Financial Officer
 
(662) 680-1219
 
(662) 680-1450
 
 

RENASANT CORPORATION ANNOUNCES
EARNINGS FOR THE THIRD QUARTER OF 2019 AND NEW $50 MILLION STOCK REPURCHASE PROGRAM


TUPELO, MISSISSIPPI (October 21, 2019) - Renasant Corporation (NASDAQ: RNST) (the “Company”) today announced earnings results for the third quarter of 2019. Net income for the third quarter of 2019 was $37.4 million, as compared to $32.0 million for the third quarter of 2018. Basic and diluted earnings per share (“EPS”) were $0.65 and $0.64, respectively, for the third quarter of 2019, as compared to basic and diluted EPS of $0.61 for the third quarter of 2018.

Net income for the nine months ending September 30, 2019, was $129.2 million, as compared to $102.5 million for the same period in 2018. Basic and diluted EPS were $2.21 for the first nine months of 2019, as compared to basic and diluted EPS of $2.03 for the same period in 2018.

"We closed the quarter with solid results and maintained strong performance ratios despite feeling the impact from Durbin for the first time," said Renasant Chairman, E. Robinson McGraw. "We completed our previously announced $50 million share repurchase program in early October and our Board approved another $50 million share repurchase program. Additionally during the third quarter, we redeemed the subordinated notes we assumed as part of the Brand acquisition. T

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he repurchase programs support our strategy of returning capital to our shareholders while also maintaining a strong capital position."

The Company continues to capitalize on market disruption across its footprint by hiring new production team members. The Company's net income for the third quarter and first nine months of 2019 includes approximately $2.6 million and $3.7 million, respectively, in after-tax expense related to team members that have joined the Company in the first nine months of 2019. The expense related to these strategic hires decreased diluted EPS by $0.05 and $0.07, respectively, for the quarter and the nine months ended September 30, 2019.

"The third quarter results were highlighted by strong loan growth and a continued focus on growing non-interest bearing deposits," commented C. Mitchell Waycaster, Renasant President and Chief Executive Officer. "Our team did a tremendous job of executing our growth strategy during the quarter, even as accelerated payoffs remain at record levels for the Company. The legacy production team had a very strong quarter, and we are on track with the plan previously laid out for our new production team members."

Impact of Certain Expenses and Charges
From time to time, the Company incurs expenses and charges in connection with certain transactions with respect to which management is unable to accurately predict when these expenses or charges will be incurred or, when incurred, the amount of such expenses or charges. The following table presents the impact of these expenses and charges on reported earnings per share for the dates presented (in thousands, except per share data):

 
Three months ended September 30, 2019
 
Three months ended September 30, 2018
 
Pre-tax

After-tax

Impact to Diluted EPS
 
Pre-tax

After-tax

Impact to Diluted EPS
Earnings, as reported
$
48,578

$
37,446

$
0.64

 
$
40,496

$
31,964

$
0.61

Merger and conversion expenses
24

19


 
11,221

8,857

0.17

Debt prepayment penalty
54

41


 



MSR valuation adjustment
3,132

2,414

0.04

 



Earnings, with exclusions (Non-GAAP)
$
51,788

$
39,920

$
0.68

 
$
51,717

$
40,821

$
0.78


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Nine months ended
September 30, 2019
 
Nine months ended
September 30, 2018
 
Pre-tax

After-tax

Impact to Diluted EPS
 
Pre-tax

After-tax

Impact to Diluted EPS
Earnings, as reported
$
167,848

$
129,181

$
2.21

 
$
131,129

$
102,500

$
2.03

Merger and conversion expenses
203

157


 
12,621

9,866

0.20

Debt prepayment penalty
54

41


 



MSR valuation adjustment
3,132

2,410

0.04

 



Earnings, with exclusions (Non-GAAP)
$
171,237

$
131,789

$
2.25

 
$
143,750

$
112,366

$
2.23


A reconciliation of all non-GAAP financial measures disclosed in this release from GAAP to non-GAAP is included in the tables at the end of this release. The information below under the heading “Non-GAAP Financial Measures” explains why the Company believes the non-GAAP financial measures in this release provide useful information and describes the other purposes for which the Company uses non-GAAP financial measures.

Profitability Metrics
The following table presents the Company’s profitability metrics, including and excluding the impact of after-tax merger and conversion expenses, debt prepayment penalties and mortgage servicing rights (MSR) valuation adjustment, as applicable, for the dates presented:
 
As Reported
With Exclusions
(Non-GAAP)
 
Three Months Ended
Three Months Ended
 
September 30, 2019
June 30, 2019
September 30, 2018
September 30, 2019
June 30, 2019
September 30, 2018
Return on average assets
1.16
%
1.47
%
1.12
%
1.23
%
1.47
%
1.44
%
Return on average tangible assets (Non-GAAP)
1.30
%
1.64
%
1.26
%
1.39
%
1.64
%
1.59
%
Return on average equity
6.97
%
8.90
%
7.40
%
7.43
%
8.92
%
9.46
%
Return on average tangible equity (Non-GAAP)
13.38
%
17.15
%
13.65
%
14.23
%
17.20
%
17.28
%
 
As Reported
With Exclusions
(Non-GAAP)
 
Nine Months Ended
Nine Months Ended
 
September 30, 2019
 
September 30, 2018
September 30, 2019
 
September 30, 2018
Return on average assets
1.35
%
 
1.30
%
1.38
%
 
1.42
%
Return on average tangible assets (Non-GAAP)
1.52
%
 
1.44
%
1.55
%
 
1.57
%
Return on average equity
8.22
%
 
8.60
%
8.39
%
 
9.43
%
Return on average tangible equity (Non-GAAP)
15.93
%
 
15.42
%
16.24
%
 
16.85
%

Financial Condition

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Total assets were $13.04 billion at September 30, 2019, as compared to $12.93 billion at December 31, 2018. The Company’s financial condition, as well as its results of operations as of and for the three and nine months ended September 30, 2019, include the impact of the Company’s acquisition of Brand Group Holdings, Inc., which was completed on September 1, 2018.

Total loans held for investment were $9.31 billion at September 30, 2019 as compared to $9.08 billion at December 31, 2018. Loans not purchased increased $642.1 million to $7.03 billion at September 30, 2019 as compared to $6.39 billion at December 31, 2018. During the third quarter, the Company reclassified a group of non-mortgage consumer loans from the held for sale category to the held for investment category; $123.9 million of these loans are included in the September 30, 2019 held for investment balance. Excluding the reclassification, the Company had linked-quarter annualized total loan growth of 5.93% and linked-quarter annualized non-purchased loan growth of 17.43%.

Total deposits increased to $10.29 billion at September 30, 2019, from $10.13 billion at December 31, 2018. The Company continued its focus on growing non-interest bearing deposits during the third quarter, resulting in an increase in non-interest bearing deposits of $198.1 million on a linked quarter basis. Since the beginning of 2019, the Company's non-interest bearing deposits have grown $288.4 million. Non-interest bearing deposits were $2.61 billion, or 25.35% of total deposits, at September 30, 2019 as compared to $2.32 billion, or 22.89% of total deposits, at December 31, 2018.

Results of Operations
Net interest income was $108.8 million for the third quarter of 2019, as compared to $112.8 million for the second quarter of 2019 and $99.4 million for the third quarter of 2018. The following table presents reported taxable equivalent net interest margin and yield on loans, including loans held for sale, for the periods presented (in thousands).


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Three Months Ended
 
September 30,
June 30,
September 30,
 
2019
2019
2018
Taxable equivalent net interest income
$
110,276

$
114,223

$
100,880

 
 
 
 
Average earning assets
$
10,993,645

$
10,942,492

$
9,843,870

 
 
 
 
Net interest margin
3.98
%
4.19
%
4.07
%
 
 
 
 
Taxable equivalent interest income on loans
$
125,391

$
127,896

$
109,385

 
 
 
 
Average loans, including loans held for sale
$
9,494,689

$
9,396,891

$
8,525,745

 
 
 
 
Loan yield
5.24
%
5.46
%
5.09
%

The impact from interest income collected on problem loans and purchase accounting adjustments on loans to total interest income on loans, including loans held for sale, loan yield and net interest margin is shown in the following table for the periods presented (in thousands).

 
 
 
 
 
Three Months Ended
 
September 30,
June 30,
September 30,
 
2019
2019
2018
Net interest income collected on problem loans
$
905

$
2,173

$
714

Accretable yield recognized on purchased loans(1)
5,510

7,513

5,381

Total impact to interest income
$
6,415

$
9,686

$
6,095

 
 
 
 
Impact to total loan yield
0.27
%
0.41
%
0.28
%
 
 
 
 
Impact to net interest margin
0.23
%
0.36
%
0.25
%
(1) 
Includes additional interest income recognized in connection with the acceleration of paydowns and payoffs from purchased loans of $2,564, $4,197 and $2,690 for the three months ended September 30, 2019, June 30, 2019, and September 30, 2018, respectively. This additional interest income increased total loan yield by 11 basis points, 18 basis points and 13 basis points for the same periods, respectively, while increasing net interest margin by 9 basis points, 15 basis points and 11 basis points for the same periods, respectively.

Net interest income was $334.8 million for the first nine months of 2019, as compared to $281.1 million for the same period in 2018. The following table presents reported taxable equivalent net interest margin and yield on loans, including loans held for sale, for the periods presented (in thousands).


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Nine Months Ended
 
September 30,
September 30,
 
2019
2018
Taxable equivalent net interest income
$
339,130

$
285,493

 
 
 
Average earning assets
$
10,944,142

$
9,227,822

 
 
 
Net interest margin
4.14
%
4.14
%
 
 
 
Taxable equivalent interest income on loans
$
380,492

$
303,854

 
 
 
Average loans, including loans held for sale
$
9,432,544

$
8,082,296

 
 
 
Loan yield
5.39
%
5.03
%

The impact from interest income collected on problem loans and purchase accounting adjustments on loans to total interest income on loans, including loans held for sale, loan yield and net interest margin is shown in the following table for the periods presented (in thousands).

 
Nine Months Ended
 
September 30,
September 30,
 
2019
2018
Net interest income collected on problem loans
$
3,890

$
2,117

Accretable yield recognized on purchased loans(1)
20,566

17,218

Total impact to interest income
$
24,456

$
19,335

 
 
 
Impact to total loan yield
0.35
%
0.32
%
 
 
 
Impact to net interest margin
0.30
%
0.28
%
(1) 
Includes additional interest income recognized in connection with the acceleration of paydowns and payoffs from purchased loans of $10,594 and $9,365 for the nine months ended September 30, 2019 and 2018, respectively. This additional interest income increased total loan yield by 15 basis points for the same periods, while increasing net interest margin by 13 basis points and 14 basis points for the same periods, respectively.

For the third quarter of 2019, the cost of total deposits was 84 basis points, as compared to 83 basis points for the second quarter of 2019 and 60 basis points in the third quarter of 2018. The cost of total deposits was 82 basis points for the first nine months of 2019, as compared to 51 basis points for the same period in 2018. The table below presents, by type, our funding sources and the total cost of each funding source for the periods presented:


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Percentage of Total Average Deposits and Borrowed Funds
 
Cost of Funds
 
Three Months Ending
 
Three Months Ending
 
September 30,
 
June 30,
 
September 30,
 
September 30,
 
June 30,
 
September 30,
 
2019
 
2019
 
2018
 
2019
 
2019
 
2018
Noninterest-bearing demand
23.75
%
 
22.82
%
 
21.68
%
 
%
 
%
 
%
Interest-bearing demand
45.02

 
45.12

 
45.01

 
0.90

 
0.89

 
0.62

Savings
6.19

 
6.14

 
6.31

 
0.22

 
0.20

 
0.15

Time deposits
22.10

 
22.56

 
21.73

 
1.77

 
1.72

 
1.29

Borrowed funds
2.94

 
3.36

 
5.27

 
5.31

 
4.61

 
3.82

Total deposits and borrowed funds
100.00
%
 
100.00
%
 
100.00
%
 
0.97
%
 
0.96
%
 
0.77
%

 
Percentage of Total Average Deposits and Borrowed Funds
 
Cost of Funds
 
Nine Months Ending
 
Nine Months Ending
 
September 30,
 
September 30,
 
September 30,
 
September 30,
 
2019
 
2018
 
2019
 
2018
Noninterest-bearing demand
22.96
%
 
21.55
%
 
%
 
%
Interest-bearing demand
45.25

 
45.91

 
0.88

 
0.51

Savings
6.11

 
6.65

 
0.20

 
0.14

Time deposits
22.43

 
21.60

 
1.70

 
1.15

Borrowed funds
3.25

 
4.29

 
4.84

 
3.91

Total deposits and borrowed funds
100.00
%
 
100.00
%
 
0.95
%
 
0.66
%

Noninterest income for the third quarter of 2019 was $38.0 million, as compared to $42.0 million for the second quarter of 2019 and $38.1 million for the third quarter of 2018. Effective July 1, 2019, the Company became subject to the limitations on interchange fees imposed by the Durbin Amendment under the Dodd-Frank Act, which resulted in a $3.0 million reduction in fees and commissions on loans and deposits in the third quarter of 2019. Mortgage banking income for the third quarter of 2019 was $15.7 million, compared to $16.6 million for the second quarter of 2019 and $14.4 million for the third quarter of 2018. Mortgage banking income during the third quarter of 2019 was negatively impacted by a MSR valuation adjustment of $3.1 million.

Noninterest expense was $96.5 million for the third quarter of 2019, as compared to $93.3 million for the second quarter of 2019 and $94.7 million for the third quarter of 2018. The Company experienced an increase in salaries and employee benefits during the quarter. This was primarily driven by the impact from new hires made throughout the footprint and the impact from the wholesale mortgage acquisition in the second quarter of 2019. The Company’s efficiency ratio (GAAP) was 65.10% for the third quarter of 2019 and 61.25% for the first nine months of 2019, while its adjusted efficiency ratio (non-GAAP) was 62.53% and 59.47% for the same respective periods. The adjusted efficiency ratio excludes charges for merger and conversion expenses, debt extinguishment

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penalties, amortization of intangible assets, gains and losses on the sale of securities and the MSR valuation adjustment.

Completion of Previously Announced Stock Repurchase Program and Announcement of New $50 Million Stock Repurchase Program

The Company completed its previously announced $50.0 million stock repurchase program during the first week of October 2019. In the third quarter of 2019, the Company repurchased $28.7 million of common stock at a weighted average price of $33.72, with the remaining $1.3 million repurchased during the first week of October. The weighted average price of all shares of common stock repurchased over the entire repurchase program was $34.45.

On October 15, 2019, the Company's Board of Directors approved a new stock repurchase program, authorizing the Company to repurchase up to $50.0 million of its outstanding common stock, either in open market purchases or privately-negotiated transactions. The new stock repurchase program will remain in effect for one year or, if earlier, the repurchase of the entire amount of common stock authorized to be repurchased by the Board of Directors.

Additionally, the Company redeemed its $30.0 million principal amount 8.50% subordinated notes during the third quarter of 2019. These subordinated notes were assumed as part of the Brand acquisition.

At September 30, 2019, Tier 1 leverage capital ratio was 10.56%, Common Equity Tier 1 ratio was 11.36%, Tier 1 risk-based capital ratio was 12.40%, and total risk-based capital ratio was 14.07%. All regulatory ratios exceed the minimums required to be considered “well-capitalized.”

Our ratio of shareholders’ equity to assets was 16.26% at September 30, 2019, as compared to 15.80% at December 31, 2018. Our tangible capital ratio (non-GAAP) was 9.46% at September 30, 2019, as compared to 8.92% at December 31, 2018.

Asset Quality Metrics
Total nonperforming assets were $44.4 million at September 30, 2019, an increase of $7.4 million from December 31, 2018, and consisted of $36.2 million in nonperforming loans (loans 90 days or more past due and nonaccrual loans) and $8.2 million in other real estate owned (“OREO”).

The Company’s nonperforming loans and OREO that were purchased in previous acquisitions (collectively referred to as “purchased nonperforming assets”) were $13.2 million and $6.2 million, respectively, at September 30, 2019, as compared to $13.1 million and $6.2 million, respectively, at December 31, 2018. The purchased nonperforming assets were recorded at fair value at the time of acquisition, which significantly mitigates the Company’s actual loss. As such, the remaining information in this release on nonperforming loans, OREO and the related asset quality ratios focuses on non-purchased nonperforming assets.

Non-purchased nonperforming loans were $23.1 million, or 0.33% of total non-purchased loans, at September 30, 2019, as compared to $12.9 million, or 0.20% of total non-purchased

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loans, at December 31, 2018. Early stage delinquencies, or loans 30-to-89 days past due, as a percentage of total non-purchased loans were 0.18% at September 30, 2019, as compared to 0.27% at December 31, 2018.

Non-purchased OREO was $2.0 million at September 30, 2019, as compared to $4.9 million at December 31, 2018. Non-purchased OREO sales totaled $3.8 million in the first nine months of 2019.

The allowance for loan losses was 0.55% of total loans held for investment at September 30, 2019, as compared to 0.54% at December 31, 2018. The allowance for loan losses was 0.72% of total non-purchased loans at September 30, 2019, as compared to 0.77% at December 31, 2018.

Net loan charge-offs were $945 thousand, or 0.04% of average loans held for investment on an annualized basis, for the third quarter of 2019, as compared to $995 thousand, or 0.05% of average loans on an annualized basis, for the third quarter of 2018. Net loan charge-offs were $2.3 million, or 0.03% of average loans on an annualized basis, for the first nine months of 2019, as compared to $3.4 million, or 0.06% of average loans on an annualized basis, for the same period in 2018.
 
The provision for loan losses was $1.7 million for the third quarter of 2019, as compared to $2.3 million for the third quarter of 2018. The provision was $4.1 million for the first nine months of 2019, as compared to $5.8 million for the same time period in 2018.

CONFERENCE CALL INFORMATION:
A live audio webcast of a conference call with analysts will be available beginning at 10:00 AM Eastern Time on Tuesday, October 22, 2019.
The webcast can be accessed through Renasant's investor relations website at www.renasant.com or https://services.choruscall.com/links/rnst191022.html. To access the conference via telephone, dial 1-877-513-1143 in the United States and request the Renasant Corporation Third Quarter Earnings Webcast and Conference Call. International participants should dial 1-412-902-4145 to access the conference call.
The webcast will be archived on www.renasant.com beginning one hour after the call and will remain accessible for one year. Replays can also be accessed via telephone by dialing 1-877-344-7529 in the United States and entering conference number 10135897 or by dialing 1-412-317-0088 internationally and entering the same conference number. Telephone replay access is available until November 5, 2019.

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ABOUT RENASANT CORPORATION:
Renasant Corporation is the parent of Renasant Bank, a 115-year-old financial services institution. Renasant has assets of approximately $13.0 billion and operates more than 190 banking, mortgage, wealth management and insurance offices in Mississippi, Tennessee, Alabama, Florida and Georgia.

NOTE TO INVESTORS:
This press release may contain, or incorporate by reference, statements which constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward looking statements usually include words such as “expects,” “projects,” “anticipates,” “believes,” “intends,” “estimates,” “strategy,” “plan,” “potential,” “possible,” “approximately,” “should” and variations of such words and other similar expressions.
Prospective investors are cautioned that any such forward-looking statements are not guarantees for future performance and involve risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include significant fluctuations in interest rates, inflation, economic recession, significant changes in the federal and state legal and regulatory environment, significant underperformance in the Company’s portfolio of outstanding loans, and competition in the Company’s markets. Management believes that the assumptions underlying the Company’s forward-looking statements are reasonable, but any of the assumptions could prove to be inaccurate. Investors are urged to carefully consider the risks described in the Company’s filings with the Securities and Exchange Commission (the “SEC”) from time to time, including its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, which are available at www.renasant.com and the SEC’s website at www.sec.gov. The Company expressly disclaims any obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

NON-GAAP FINANCIAL MEASURES:
In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains non-GAAP financial measures, namely, return on average tangible shareholders’ equity, return on average tangible assets, the ratio of tangible equity to tangible assets (commonly referred to as the “tangible capital ratio”), tangible book value per share and the adjusted efficiency ratio. These non-GAAP financial measures adjust GAAP financial measures to exclude intangible assets and/or certain charges (such as, when applicable, merger and conversion expenses, debt prepayment penalties and asset valuation adjustments) with respect to which the Company is unable to accurately predict when these charges will be incurred or, when incurred, the amount thereof. Management uses these non-GAAP financial measures when evaluating capital utilization and adequacy. In addition, the Company believes that these non-GAAP financial measures facilitate the making of period-to-period comparisons and are meaningful indicators of its operating performance, particularly because these measures are widely used by industry analysts for companies with merger and acquisition activities. Also, because intangible assets such as goodwill and the core deposit intangible and charges such as merger and conversion expenses can vary extensively from company to company and, as to intangible assets, are excluded from the calculation of a financial institution’s regulatory capital, the Company believes that the presentation of this non-GAAP financial information allows readers to more easily compare the Company’s results to information provided in other regulatory reports and the results of other companies. Reconciliations of these other non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the table at the end of this release under the caption “Reconciliation of GAAP to Non-GAAP.”

None of the non-GAAP financial information that the Company has included in this release is intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. Investors should note that, because there are no standardized definitions for the calculations as well as the results, the

10



Company’s calculations may not be comparable to similarly titled measures presented by other companies. Also, there may be limits in the usefulness of these measures to investors. As a result, the Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.


###

11





RENASANT CORPORATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q3 2019 -
 
For The Nine Months Ending
 
 
 
 
2019
 
2018
 
 
Q3 2018
 
September 30,
 
 
 
 
 
Third
 
Second
 
First
 
Fourth
 
Third
 
Second
 
First
 
 
Percent
 
 
 
 
 
Percent
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 
Variance
 
2019
 
2018
 
Variance
Statement of earnings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income - taxable equivalent basis
 
$
135,927

 
$
139,285

 
$
138,578

 
$
138,581

 
$
119,236

 
$
107,991

 
$
101,947

 
 
14.00
 %
 
$
413,790

 
$
329,174

 
25.71
 %
Interest income
 
134,476

 
137,862

 
137,094

 
137,105

 
117,795

 
106,574

 
100,380

 
 
14.16

 
409,432

 
324,749

 
26.08

Interest expense
 
25,651

 
25,062

 
23,947

 
21,648

 
18,356

 
14,185

 
11,140

 
 
39.74

 
74,660

 
43,681

 
70.92

 
Net interest income
 
108,825

 
112,800

 
113,147

 
115,457

 
99,439

 
92,389

 
89,240

 
 
9.44

 
334,772

 
281,068

 
19.11

Provision for loan losses
 
1,700

 
900

 
1,500

 
1,000

 
2,250

 
1,810

 
1,750

 
 
(24.44
)
 
4,100

 
5,810

 
(29.43
)
 
Net interest income after provision
 
107,125

 
111,900

 
111,647

 
114,457

 
97,189

 
90,579

 
87,490

 
 
10.22

 
330,672

 
275,258

 
20.13

Service charges on deposit accounts
 
8,992

 
8,605

 
9,102

 
9,069

 
8,847

 
8,271

 
8,473

 
 
1.64

 
26,699

 
25,591

 
4.33

Fees and commissions on loans and deposits
 
3,090

 
7,047

 
6,471

 
6,322

 
5,944

 
5,917

 
5,685

 
 
(48.01
)
 
16,608

 
17,546

 
(5.35
)
Insurance commissions and fees
 
2,508

 
2,190

 
2,116

 
2,014

 
2,461

 
2,110

 
2,005

 
 
1.91

 
6,814

 
6,576

 
3.62

Wealth management revenue
 
3,588

 
3,601

 
3,324

 
3,446

 
3,386

 
3,446

 
3,262

 
 
5.97

 
10,513

 
10,094

 
4.15

Securities gains (losses)
 
343

 
(8
)
 
13

 

 
(16
)
 

 

 
 
100.00

 
348

 
(16
)
 
100.00

Mortgage banking income
 
15,710

 
16,620

 
10,401

 
11,993

 
14,350

 
12,839

 
10,960

 
 
9.48

 
42,731

 
38,149

 
12.01

Other
 
3,722

 
3,905

 
4,458

 
3,530

 
3,081

 
2,998

 
3,568

 
 
20.80

 
12,085

 
9,647

 
25.27

 
Total noninterest income
 
37,953

 
41,960

 
35,885

 
36,374

 
38,053

 
35,581

 
33,953

 
 
(0.26
)
 
115,798

 
107,587

 
7.63

Salaries and employee benefits
 
65,425

 
60,325

 
57,350

 
58,313

 
55,187

 
52,010

 
48,784

 
 
18.55

 
183,100

 
155,981

 
17.39

Data processing
 
4,980

 
4,698

 
4,906

 
5,169

 
4,614

 
4,600

 
4,244

 
 
7.93

 
14,584

 
13,458

 
8.37

Occupancy and equipment
 
12,943

 
11,544

 
11,835

 
11,816

 
10,668

 
9,805

 
9,822

 
 
21.33

 
36,322

 
30,295

 
19.89

Other real estate
 
418

 
252

 
1,004

 
725

 
278

 
232

 
657

 
 
50.36

 
1,674

 
1,167

 
43.44

Amortization of intangibles
 
1,996

 
2,053

 
2,110

 
2,169

 
1,765

 
1,594

 
1,651

 
 
13.09

 
6,159

 
5,010

 
22.93

Merger and conversion related expenses
 
24

 
179

 

 
1,625

 
11,221

 
500

 
900

 
 
(99.79
)
 
203

 
12,621

 
(98.39
)
Debt extinguishment penalty
 
54

 

 

 

 

 

 

 
 
100.00

 
54

 

 
100.00

Other
 
10,660

 
14,239

 
11,627

 
13,496

 
11,013

 
10,285

 
11,886

 
 
(3.21
)
 
36,526

 
33,184

 
10.07

 
Total noninterest expense
 
96,500

 
93,290

 
88,832

 
93,313

 
94,746

 
79,026

 
77,944

 
 
1.85

 
278,622

 
251,716

 
10.69

Income before income taxes
 
48,578

 
60,570

 
58,700

 
57,518

 
40,496

 
47,134

 
43,499

 
 
19.96

 
167,848

 
131,129

 
28.00

Income taxes
 
11,132

 
13,945

 
13,590

 
13,098

 
8,532

 
10,424

 
9,673

 
 
30.47

 
38,667

 
28,629

 
35.06

 
Net income
 
$
37,446

 
$
46,625

 
$
45,110

 
$
44,420

 
$
31,964

 
$
36,710

 
$
33,826

 
 
17.15

 
$
129,181

 
$
102,500

 
26.03

Basic earnings per share
 
$
0.65

 
$
0.80

 
$
0.77

 
$
0.76

 
$
0.61

 
$
0.74

 
$
0.69

 
 
6.56

 
$
2.21

 
$
2.03

 
8.87

Diluted earnings per share
 
0.64

 
0.80

 
0.77

 
0.76

 
0.61

 
0.74

 
0.68

 
 
4.92

 
2.21

 
2.03

 
8.87

Average basic shares outstanding
 
58,003,215

 
58,461,024

 
58,585,517

 
58,623,646

 
52,472,971

 
49,413,754

 
49,356,417

 
 
10.54

 
58,347,840

 
50,425,797

 
15.71

Average diluted shares outstanding
 
58,192,419

 
58,618,976

 
58,730,535

 
58,767,519

 
52,609,902

 
49,549,761

 
49,502,950

 
 
10.61

 
58,508,582

 
50,553,191

 
15.74

Common shares outstanding
 
57,455,306

 
58,297,670

 
58,633,630

 
58,546,480

 
58,743,814

 
49,424,339

 
49,392,978

 
 
(2.19
)
 
57,455,306

 
58,743,814

 
(2.19
)
Cash dividend per common share
 
$
0.22

 
$
0.22

 
$
0.21

 
$
0.21

 
$
0.20

 
$
0.20

 
$
0.19

 
 
10.00

 
$
0.65

 
$
0.59

 
10.17

Performance ratios
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on avg shareholders' equity
 
6.97
%
 
8.90
%
 
8.86
%
 
8.72
%
 
7.40
%
 
9.55
%
 
9.00
%
 
 
 
 
8.22
%
 
8.60
%
 
 
Return on avg tangible s/h's equity (non-GAAP) (1)
 
13.38
%
 
17.15
%
 
17.41
%
 
17.44
%
 
13.65
%
 
16.75
%
 
16.02
%
 
 
 
 
15.93
%
 
15.42
%
 
 
Return on avg assets
 
1.16
%
 
1.47
%
 
1.44
%
 
1.39
%
 
1.12
%
 
1.42
%
 
1.36
%
 
 
 
 
1.35
%
 
1.30
%
 
 
Return on avg tangible assets (non-GAAP)(2)
 
1.30
%
 
1.64
%
 
1.61
%
 
1.56
%
 
1.26
%
 
1.57
%
 
1.51
%
 
 
 
 
1.52
%
 
1.44
%
 
 
Net interest margin (FTE)
 
3.98
%
 
4.19
%
 
4.27
%
 
4.24
%
 
4.07
%
 
4.15
%
 
4.20
%
 
 
 
 
4.14
%
 
4.14
%
 
 
Yield on earning assets (FTE)
 
4.91
%
 
5.11
%
 
5.16
%
 
5.02
%
 
4.81
%
 
4.78
%
 
4.72
%
 
 
 
 
5.06
%
 
4.77
%
 
 
Cost of funding
 
0.97
%
 
0.96
%
 
0.92
%
 
0.81
%
 
0.77
%
 
0.65
%
 
0.53
%
 
 
 
 
0.95
%
 
0.66
%
 
 
Average earning assets to average assets
 
85.58
%
 
85.72
%
 
85.58
%
 
86.15
%
 
87.29
%
 
87.67
%
 
87.12
%
 
 
 
 
85.63
%
 
87.36
%
 
 
Average loans to average deposits
 
89.13
%
 
89.13
%
 
89.33
%
 
89.77
%
 
91.74
%
 
91.84
%
 
94.04
%
 
 
 
 
89.19
%
 
92.50
%
 
 
Noninterest income (less securities gains/
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
losses) to average assets
 
1.16
%
 
1.32
%
 
1.14
%
 
1.14
%
 
1.34
%
 
1.38
%
 
1.37
%
 
 
 
 
1.21
%
 
1.36
%
 
 
Noninterest expense (less debt prepayment penalties/
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
penalties/merger-related expenses) to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
average assets
 
2.98
%
 
2.93
%
 
2.83
%
 
2.86
%
 
2.94
%
 
3.05
%
 
3.11
%
 
 
 
 
2.91
%
 
3.03
%
 
 
Net overhead ratio
 
1.82
%
 
1.61
%
 
1.69
%
 
1.72
%
 
1.60
%
 
1.67
%
 
1.74
%
 
 
 
 
1.70
%
 
1.67
%
 
 
Efficiency ratio (FTE)
 
65.10
%
 
59.73
%
 
59.02
%
 
60.87
%
 
68.20
%
 
61.08
%
 
62.48
%
 
 
 
 
61.25
%
 
64.04
%
 
 
Adjusted efficiency ratio (FTE) (non-GAAP) (4)
 
62.53
%
 
58.30
%
 
57.62
%
 
58.39
%
 
58.84
%
 
59.46
%
 
60.43
%
 
 
 
 
59.47
%
 
59.55
%
 
 

12



RENASANT CORPORATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q3 2019 -
 
As of
 
 
 
 
2019
 
2018
 
 
Q3 2018
 
September 30,
 
 
 
 
 
Third
 
Second
 
First
 
Fourth
 
Third
 
Second
 
First
 
 
Percent
 
 
 
 
 
Percent
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 
Variance
 
2019
 
2018
 
Variance
Average Balances
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
12,846,131

 
$
12,764,669

 
$
12,730,939

 
$
12,713,000

 
$
11,276,587

 
$
10,341,863

 
$
10,055,755

 
 
13.92
 %
 
$
12,781,001

 
$
10,562,540

 
21.00
 %
Earning assets
 
10,993,645

 
10,942,492

 
10,895,205

 
10,952,023

 
9,843,870

 
9,067,016

 
8,760,679

 
 
11.68

 
10,944,142

 
9,227,822

 
18.60

Securities
 
1,227,678

 
1,262,271

 
1,253,224

 
1,240,283

 
1,129,010

 
1,039,947

 
833,076

 
 
8.74

 
1,247,631

 
1,001,762

 
24.54

Loans held for sale
 
385,437

 
353,103

 
345,264

 
418,213

 
297,692

 
209,652

 
152,299

 
 
29.48

 
361,415

 
220,413

 
63.97

Loans, net of unearned
 
9,109,252

 
9,043,788

 
9,059,802

 
9,130,273

 
8,228,053

 
7,704,221

 
7,646,991

 
 
10.71

 
9,071,129

 
7,861,883

 
15.38

Intangibles
 
975,306

 
974,628

 
976,820

 
972,736

 
743,567

 
633,155

 
634,898

 
 
31.17

 
975,579

 
670,938

 
45.41

Noninterest-bearing deposits
 
2,500,810

 
2,395,899

 
2,342,406

 
2,402,422

 
2,052,226

 
1,867,925

 
1,817,848

 
 
21.86

 
2,413,619

 
1,913,525

 
26.13

Interest-bearing deposits
 
7,719,510

 
7,750,986

 
7,799,892

 
7,768,724

 
6,916,699

 
6,521,123

 
6,314,114

 
 
11.61

 
7,756,501

 
6,586,186

 
17.77

Total deposits
 
10,220,320

 
10,146,885

 
10,142,298

 
10,171,146

 
8,968,925

 
8,389,048

 
8,131,962

 
 
13.95

 
10,170,120

 
8,499,711

 
19.65

Borrowed funds
 
308,931

 
354,234

 
363,140

 
407,496

 
499,054

 
329,287

 
314,228

 
 
(38.10
)
 
341,903

 
381,533

 
(10.39
)
Shareholders' equity
 
2,131,537

 
2,102,093

 
2,065,370

 
2,021,075

 
1,712,757

 
1,542,071

 
1,523,873

 
 
24.45

 
2,099,909

 
1,593,592

 
31.77

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q3 2019 -
 
As of
 
2019
 
2018
 
 
Q4 2018
 
September 30,
 
 
Third
 
Second
 
First
 
Fourth
 
Third
 
Second
 
First
 
 
Percent
 
 
 
 
 
Percent
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
 
Variance
 
2019
 
2018
 
Variance
Balances at period end
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
13,039,674

 
$
12,892,653

 
$
12,862,395

 
$
12,934,878

 
$
12,746,939

 
$
10,544,475

 
$
10,238,313

 
 
0.81
 %
 
$
13,039,674

 
$
12,746,939

 
2.30
 %
Earning assets
 
11,145,052

 
11,064,957

 
11,015,535

 
11,115,929

 
10,962,958

 
9,239,200

 
8,938,117

 
 
0.26

 
11,145,052

 
10,962,958

 
1.66

Securities
 
1,238,577

 
1,268,280

 
1,255,353

 
1,250,777

 
1,177,606

 
1,088,779

 
948,365

 
 
(0.98
)
 
1,238,577

 
1,177,606

 
5.18

Loans held for sale
 
392,448

 
461,681

 
318,563

 
411,427

 
463,287

 
245,046

 
204,472

 
 
(4.61
)
 
392,448

 
463,287

 
(15.29
)
Non purchased loans
 
7,031,818

 
6,704,288

 
6,565,599

 
6,389,712

 
6,210,238

 
6,057,766

 
5,830,122

 
 
10.05

 
7,031,818

 
6,210,238

 
13.23

Purchased loans
 
2,281,966

 
2,350,366

 
2,522,694

 
2,693,417

 
2,912,669

 
1,709,891

 
1,867,948

 
 
(15.28
)
 
2,281,966

 
2,912,669

 
(21.65
)
 
Total loans
 
9,313,784

 
9,054,654

 
9,088,293

 
9,083,129

 
9,122,907

 
7,767,657

 
7,698,070

 
 
2.54

 
9,313,784

 
9,122,907

 
2.09

Intangibles
 
978,390

 
973,673

 
975,726

 
977,793

 
974,115

 
632,311

 
633,905

 
 
0.06

 
978,390

 
974,115

 
0.44

Noninterest-bearing deposits
 
2,607,056

 
2,408,984

 
2,366,223

 
2,318,706

 
2,359,859

 
1,888,561

 
1,861,136

 
 
12.44

 
2,607,056

 
2,359,859

 
10.48

Interest-bearing deposits
 
7,678,980

 
7,781,077

 
7,902,689

 
7,809,851

 
7,812,089

 
6,492,159

 
6,496,633

 
 
(1.68
)
 
7,678,980

 
7,812,089

 
(1.70
)
 
Total deposits
 
10,286,036

 
10,190,061

 
10,268,912

 
10,128,557

 
10,171,948

 
8,380,720

 
8,357,769

 
 
1.55

 
10,286,036

 
10,171,948

 
1.12

Borrowed funds
 
433,705

 
401,934

 
350,859

 
651,324

 
439,516

 
520,747

 
265,191

 
 
(33.41
)
 
433,705

 
439,516

 
(1.32
)
Shareholders' equity
 
2,119,659

 
2,119,696

 
2,088,877

 
2,043,913

 
2,010,711

 
1,558,668

 
1,532,765

 
 
3.71

 
2,119,659

 
2,010,711

 
5.42

Market value per common share
 
35.01

 
35.94

 
33.85

 
30.18

 
41.21

 
45.52

 
42.56

 
 
16.00

 
35.01

 
41.21

 
(15.04
)
Book value per common share
 
36.89

 
36.36

 
35.63

 
34.91

 
34.23

 
31.54

 
31.03

 
 
5.67

 
36.89

 
34.23

 
7.77

Tangible book value per common share
 
19.86

 
19.66

 
18.98

 
18.21

 
17.65

 
18.74

 
18.20

 
 
9.06

 
19.86

 
17.65

 
12.52

Shareholders' equity to assets (actual)
 
16.26
%
 
16.44
%
 
16.24
%
 
15.80
%
 
15.77
%
 
14.78
%
 
14.97
%
 
 
 
 
16.26
%
 
15.77
%
 
 
Tangible capital ratio (non-GAAP)(3)
 
9.46
%
 
9.62
%
 
9.36
%
 
8.92
%
 
8.80
%
 
9.35
%
 
9.36
%
 
 
 
 
9.46
%
 
8.80
%
 
 
Leverage ratio
 
10.56
%
 
10.65
%
 
10.44
%
 
10.11
%
 
9.85
%
 
10.63
%
 
10.61
%
 
 
 
 
10.56
%
 
9.85
%
 


Common equity tier 1 capital ratio
 
11.36
%
 
11.64
%
 
11.49
%
 
11.05
%
 
10.80
%
 
11.71
%
 
11.38
%
 
 
 
 
11.36
%
 
10.80
%
 


Tier 1 risk-based capital ratio
 
12.40
%
 
12.69
%
 
12.55
%
 
12.10
%
 
11.84
%
 
12.73
%
 
12.41
%
 
 
 
 
12.40
%
 
11.84
%
 


Total risk-based capital ratio
 
14.07
%
 
14.62
%
 
14.57
%
 
14.12
%
 
13.85
%
 
14.75
%
 
14.44
%
 
 
 
 
14.07
%
 
13.85
%
 



13



RENASANT CORPORATION