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Section 1: 8-K (8-K)

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false0000715072 0000715072 2020-01-21 2020-01-21


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

January 21, 2020
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 January 21, 2020, Renasant Corporation issued a press release announcing earnings for the fourth 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: January 21, 2020
 
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


402368754_ex991rnstcorpimagea19.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 FOURTH QUARTER OF 2019

TUPELO, MISSISSIPPI (January 21, 2020) - Renasant Corporation (NASDAQ: RNST) (the “Company”) today announced earnings results for the fourth quarter of 2019. Net income for the fourth quarter of 2019 was $38.7 million, as compared to $44.4 million for the fourth quarter of 2018. Basic and diluted earnings per share (“EPS”) were $0.68 and $0.67, respectively, for the fourth quarter of 2019, as compared to basic and diluted EPS of $0.76 for the fourth quarter of 2018.

Net income for the year ending December 31, 2019, was $167.9 million, as compared to $146.9 million for the same period in 2018. Basic and diluted EPS were $2.89 and $2.88, respectively, for 2019, as compared to basic and diluted EPS of $2.80 and $2.79, respectively, for the same period in 2018.

"We closed 2019 on a strong note and maintained solid performance ratios through the fourth quarter even while absorbing the full impact of two interest rate cuts on our margin during the quarter," said Renasant Chairman, E. Robinson McGraw. "Our management team did an excellent job of navigating through the headwinds we faced throughout 2019 and has us well positioned for continued success in 2020 and beyond. We also continued to prudently manage our capital structure and repurchased approximately $21.3 million of our common stock in the quarter."

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As previously discussed, the Company targeted market disruption across its footprint by hiring new production team members throughout 2019. The Company's net income for the fourth quarter of 2019 includes approximately $3.5 million in after-tax expense related to team members that have joined the Company in 2019. The expense related to these strategic hires decreased diluted EPS by $0.06 for the fourth quarter of 2019.

"Our fourth quarter results were highlighted by continued strong loan growth," commented C. Mitchell Waycaster, Renasant President and Chief Executive Officer. "Throughout our footprint our team members are continuing to execute our growth strategy previously laid out. In addition to strong loan growth year over year, we continued to prioritize growing non-interest bearing deposits, which lowers the cost of funding needed to support our loan growth. As Robin previously mentioned, we believe that we have positioned ourselves well for success in the coming years."

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 December 31, 2019
 
Three months ended December 31, 2018
 
Pre-tax

After-tax

Impact to Diluted EPS
 
Pre-tax

After-tax

Impact to Diluted EPS
Earnings, as reported
$
48,266

$
38,733

$
0.67

 
$
57,518

$
44,420

$
0.76

Merger and conversion expenses
76

61


 
1,625

1,255

0.02

MSR valuation adjustment
(1,296
)
(1,040
)
(0.01
)
 



Earnings, with exclusions (Non-GAAP)
$
47,046

$
37,754

$
0.66

 
$
59,143

$
45,675

$
0.78

 
Year ended December 31, 2019
 
Year ended December 31, 2018
 
Pre-tax

After-tax

Impact to Diluted EPS
 
Pre-tax

After-tax

Impact to Diluted EPS
Earnings, as reported
$
216,114

$
167,914

$
2.88

 
$
188,647

$
146,920

$
2.79

Merger and conversion expenses
279

216


 
14,246

11,095

0.21

Debt prepayment penalty
54

41


 



MSR valuation adjustment
1,836

1,427

0.03

 



Earnings, with exclusions (Non-GAAP)
$
218,283

$
169,598

$
2.91

 
$
202,893

$
158,015

$
3.00


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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 the mortgage servicing rights (MSR) valuation adjustment, as applicable, for the dates presented:
 
As Reported
With Exclusions
(Non-GAAP)
 
Three Months Ended
Three Months Ended
 
December 31, 2019
September 30, 2019
December 31, 2018
December 31, 2019
September 30, 2019
December 31, 2018
Return on average assets
1.17
%
1.16
%
1.39
%
1.14
%
1.23
%
1.43
%
Return on average tangible assets (Non-GAAP)
1.31
%
1.30
%
1.56
%
1.28
%
1.39
%
1.60
%
Return on average equity
7.21
%
6.97
%
8.72
%
7.03
%
7.43
%
8.97
%
Return on average tangible equity (Non-GAAP)
13.86
%
13.38
%
17.44
%
13.52
%
14.23
%
17.92
%
 
As Reported
With Exclusions
(Non-GAAP)
 
Twelve Months Ended
Twelve Months Ended
 
December 31, 2019
 
December 31, 2018
December 31, 2019
 
December 31, 2018
Return on average assets
1.30
%
 
1.32
%
1.32
%
 
1.42
%
Return on average tangible assets (Non-GAAP)
1.46
%
 
1.47
%
1.48
%
 
1.58
%
Return on average equity
7.97
%
 
8.64
%
8.05
%
 
9.29
%
Return on average tangible equity (Non-GAAP)
15.39
%
 
15.98
%
15.54
%
 
17.14
%

Financial Condition
Total assets were $13.40 billion at December 31, 2019, as compared to $12.93 billion at December 31, 2018. The Company’s acquisition of Brand Group Holdings, Inc. was completed on September 1, 2018; the Company’s results of operations for the year ended December 31, 2019 as compared to the year ended December 31, 2018 reflect the impact of this acquisition.

Total loans held for investment were $9.69 billion at December 31, 2019, as compared to $9.08 billion at December 31, 2018, representing annual net loan growth of 5.46% after excluding the

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balance of a portfolio of non-mortgage consumer loans, which was transferred from our held for sale portfolio during the year. When compared to the balance at September 30, 2019 of $9.31 billion, the Company had linked-quarter annualized net loan growth of 16.01%.

Total deposits increased to $10.21 billion at December 31, 2019, from $10.13 billion at December 31, 2018. Non-interest bearing deposits increased $233.1 million to $2.55 billion, or 24.99% of total deposits, at December 31, 2019, as compared to $2.32 billion, or 22.89% of total deposits, at December 31, 2018.

Results of Operations
Net interest income was $109.3 million for the fourth quarter of 2019, as compared to $108.8 million for the third quarter of 2019 and $115.5 million for the fourth 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).

 
Three Months Ended
 
December 31,
September 30,
December 31,
 
2019
2019
2018
Taxable equivalent net interest income
$
111,283

$
110,276

$
116,933

 
 
 
 
Average earning assets
$
11,277,000

$
10,993,645

$
10,952,024

 
 
 
 
Net interest margin
3.90
%
3.98
%
4.24
%
 
 
 
 
Taxable equivalent interest income on loans
$
124,919

$
125,391

$
127,880

 
 
 
 
Average loans, including loans held for sale
$
9,808,441

$
9,494,689

$
9,548,486

 
 
 
 
Loan yield
5.04
%
5.24
%
5.31
%

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).


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Three Months Ended
 
December 31,
September 30,
December 31,
 
2019
2019
2018
Net interest income collected on problem loans
$
152

$
905

$
744

Accretable yield recognized on purchased loans(1)
6,661

5,510

7,236

Total impact to interest income
$
6,813

$
6,415

$
7,980

 
 
 
 
Impact to total loan yield
0.28
%
0.27
%
0.33
%
 
 
 
 
Impact to net interest margin
0.24
%
0.23
%
0.29
%
(1) 
Includes additional interest income recognized in connection with the acceleration of paydowns and payoffs from purchased loans of $4,041, $2,564 and $3,095 for the three months ended December 31, 2019, September 30, 2019, and December 31, 2018, respectively. This additional interest income increased total loan yield by 16 basis points, 11 basis points and 13 basis points for the same periods, respectively, while increasing net interest margin by 14 basis points, 9 basis points and 11 basis points for the same periods, respectively.

Net interest income was $444.1 million for the twelve months ended December 31, 2019, as compared to $396.5 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).

 
Twelve Months Ended
 
December 31,
December 31,
 
2019
2018
Taxable equivalent net interest income
$
450,413

$
402,426

 
 
 
Average earning assets
$
11,028,040

$
9,662,416

 
 
 
Net interest margin
4.08
%
4.16
%
 
 
 
Taxable equivalent interest income on loans
$
505,411

$
431,734

 
 
 
Average loans, including loans held for sale
$
9,527,290

$
8,451,857

 
 
 
Loan yield
5.30
%
5.11
%

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).


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Twelve Months Ended
 
December 31,
December 31,
 
2019
2018
Net interest income collected on problem loans
$
4,042

$
2,861

Accretable yield recognized on purchased loans(1)
27,227

24,454

Total impact to interest income
$
31,269

$
27,315

 
 
 
Impact to total loan yield
0.33
%
0.32
%
 
 
 
Impact to net interest margin
0.28
%
0.28
%
(1) 
Includes additional interest income recognized in connection with the acceleration of paydowns and payoffs from purchased loans of $14,635 and $12,460 for the twelve months ended December 31, 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 for the same periods.

For the fourth quarter of 2019, the cost of total deposits was 75 basis points, as compared to 84 basis points for the third quarter of 2019 and 67 basis points in the fourth quarter of 2018. The cost of total deposits was 80 basis points for the year ending December 31, 2019, as compared to 56 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:

 
Percentage of Total Average Deposits and Borrowed Funds
 
Cost of Funds
 
Three Months Ending
 
Three Months Ending
 
December 31,
 
September 30,
 
December 31,
 
December 31,
 
September 30,
 
December 31,
 
2019
 
2019
 
2018
 
2019
 
2019
 
2018
Noninterest-bearing demand
24.12
%
 
23.75
%
 
22.71
%
 
%
 
%
 
%
Interest-bearing demand
43.86

 
45.02

 
44.89

 
0.77

 
0.90

 
0.69

Savings
6.11

 
6.19

 
5.82

 
0.17

 
0.22

 
0.16

Time deposits
20.41

 
22.10

 
22.73

 
1.76

 
1.77

 
1.45

Borrowed funds
5.50

 
2.94

 
3.85

 
3.02

 
5.31

 
4.31

Total deposits and borrowed funds
100.00
%
 
100.00
%
 
100.00
%
 
0.87
%
 
0.97
%
 
0.81
%

 
Percentage of Total Average Deposits and Borrowed Funds
 
Cost of Funds
 
Twelve Months Ending
 
Twelve Months Ending
 
December 31,
 
December 31,
 
December 31,
 
December 31,
 
2019
 
2018
 
2019
 
2018
Noninterest-bearing demand
23.26
%
 
21.88
%
 
%
 
%
Interest-bearing demand
44.89

 
45.62

 
0.85

 
0.56

Savings
6.11

 
6.41

 
0.19

 
0.15

Time deposits
21.91

 
21.92

 
1.71

 
1.24

Borrowed funds
3.83

 
4.17

 
4.17

 
4.01

Total deposits and borrowed funds
100.00
%
 
100.00
%
 
0.93
%
 
0.70
%


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Noninterest income for the fourth quarter of 2019 was $37.5 million, as compared to $38.0 million for the third quarter of 2019 and $36.4 million for the fourth quarter of 2018. Noninterest income for 2019 was $153.3 million, as compared to $144.0 million for 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 an approximate $3.0 million reduction in fees and commissions on loans and deposits in each of the the third and fourth quarters of 2019. Mortgage banking income for the fourth quarter of 2019 was $15.2 million, compared to $15.7 million for the third quarter of 2019 and $12.0 million for the fourth quarter of 2018. Mortgage banking income during the third quarter of 2019 was negatively impacted by a MSR valuation adjustment of $3.1 million, of which $1.3 million was recovered during the fourth quarter of 2019. Mortgage banking income for 2019 was $57.9 million, as compared to $50.1 million for 2018.

Noninterest expense was $95.6 million for the fourth quarter of 2019, as compared to $96.5 million for the third quarter of 2019 and $93.3 million for the fourth 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 64.24% for the fourth quarter of 2019 and 61.98% for the year 2019, while its adjusted efficiency ratio (non-GAAP) was 63.43% and 60.44% for the same respective periods. The adjusted efficiency ratio excludes charges for merger and conversion expenses, debt extinguishment penalties, amortization of intangible assets, gains and losses on the sale of securities and the MSR valuation adjustment.

Continued Focus on Prudent Capital Management
In the fourth quarter of 2019, the Company completed the remaining repurchases authorized under its previous $50.0 million stock repurchase program and initiated repurchases under its new $50.0 million stock repurchase program authorized by the Company’s Board of Directors in October 2019. During the fourth quarter of 2019, the Company repurchased $21.3 million of common stock under both programs at a weighted average price of $35.20. There is $30.0 million of repurchase availability remaining under the new stock repurchase program, which will remain in effect until the earlier of October 2020 or the repurchase of the entire amount of common stock authorized to be repurchased by the Board of Directors.


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At December 31, 2019, Tier 1 leverage capital ratio was 10.37%, Common Equity Tier 1 ratio was 11.12%, Tier 1 risk-based capital ratio was 12.14%, and total risk-based capital ratio was 13.78%. All regulatory ratios exceed the minimums required to be considered “well-capitalized.”

Our ratio of shareholders’ equity to assets was 15.87% at December 31, 2019, as compared to 15.80% at December 31, 2018. Our tangible capital ratio (non-GAAP) was 9.25% at December 31, 2019, as compared to 8.92% at December 31, 2018.

Asset Quality Metrics
Total nonperforming assets were $44.3 million at December 31, 2019, an increase of $7.3 million from December 31, 2018, and consisted of $36.3 million in nonperforming loans (loans 90 days or more past due and nonaccrual loans) and $8.0 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 $11.4 million and $5.2 million, respectively, at December 31, 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 $25.0 million, or 0.33% of total non-purchased loans, at December 31, 2019, as compared to $12.9 million, or 0.20% of total non-purchased 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 0.30% at December 31, 2019, as compared to 0.27% at December 31, 2018.

Non-purchased OREO was $2.8 million at December 31, 2019, as compared to $4.9 million at December 31, 2018. Non-purchased OREO sales totaled $4.2 million during 2019.

The allowance for loan losses was 0.54% of total loans held for investment at each of December 31, 2019 and 2018. The allowance for loan losses was 0.69% of total non-purchased loans at December 31, 2019, as compared to 0.77% at December 31, 2018.

Net loan charge-offs were $1.6 million, or 0.07% of average loans held for investment on an annualized basis, for the fourth quarter of 2019, as compared to $584 thousand, or 0.03% of average loans on an annualized basis, for the fourth quarter of 2018. Net loan charge-offs were $3.9 million, or 0.04% of average loans for the year 2019, as compared to $4.0 million, or 0.05% of average loans for the year 2018.
 

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The provision for loan losses was $3.0 million for the fourth quarter of 2019, as compared to $1.0 million for the fourth quarter of 2018. The provision was $7.1 million for the year 2019, as compared to $6.8 million for the year 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 Wednesday, January 22, 2020.
The webcast can be accessed through Renasant's investor relations website at www.renasant.com or https://services.choruscall.com/links/rnst200122.html. To access the conference via telephone, dial 1-877-513-1143 in the United States and request the Renasant Corporation 2019 Fourth Quarter and Year-end 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 10138528 or by dialing 1-412-317-0088 internationally and entering the same conference number. Telephone replay access is available until February 5, 2020.


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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 $13.4 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.


###

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RENASANT CORPORATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q4 2019 -
 
Twelve Months Ended
 
 
 
 
 
2019
 
2018
 
Q4 2018
 
December 31,
 
 
 
 
 
Fourth
 
Third
 
Second
 
First
 
Fourth
 
Third
 
Second
 
First
 
Percent
 
 
 
 
 
Percent
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Variance
 
2019
 
2018
 
Variance
Statement of earnings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income - taxable equivalent basis
 
$
135,119

 
$
135,927

 
$
139,285

 
$
138,578

 
$
138,581

 
$
119,236

 
$
107,991

 
$
101,947

 
(2.50
)%
 
$
548,909

 
$
467,755

 
17.35
 %
Interest income
 
$
133,148

 
$
134,476

 
$
137,862

 
$
137,094

 
$
137,105

 
$
117,795

 
$
106,574

 
$
100,380

 
(2.89
)
 
$
542,580

 
$
461,854

 
17.48

Interest expense
 
23,836

 
25,651

 
25,062

 
23,947

 
21,648

 
18,356

 
14,185

 
11,140

 
10.11

 
98,496

 
65,329

 
50.77

 
Net interest income
 
109,312

 
108,825

 
112,800

 
113,147

 
115,457

 
99,439

 
92,389

 
89,240

 
(5.32
)
 
444,084

 
396,525

 
11.99

Provision for loan losses
 
2,950

 
1,700

 
900

 
1,500

 
1,000

 
2,250

 
1,810

 
1,750

 
195.00

 
7,050

 
6,810

 
3.52

 
Net interest income after provision
 
106,362

 
107,125

 
111,900

 
111,647

 
114,457

 
97,189

 
90,579

 
87,490

 
(7.07
)
 
437,034

 
389,715

 
12.14

Service charges on deposit accounts
 
9,273

 
8,992

 
8,605

 
9,102

 
9,069

 
8,847

 
8,271

 
8,473

 
2.25

 
35,972

 
34,660

 
3.79

Fees and commissions on loans and deposits
 
2,822

 
3,090

 
7,047

 
6,471

 
6,322

 
5,944

 
5,917

 
5,685

 
(55.36
)
 
19,430

 
23,868

 
(18.59
)
Insurance commissions and fees
 
2,105

 
2,508

 
2,190

 
2,116

 
2,014

 
2,461

 
2,110

 
2,005

 
4.52

 
8,919

 
8,590

 
3.83

Wealth management revenue
 
3,920

 
3,588

 
3,601

 
3,324

 
3,446

 
3,386

 
3,446

 
3,262

 
13.76

 
14,433

 
13,540

 
6.60

Securities gains (losses)
 

 
343

 
(8
)
 
13

 

 
(16
)
 

 

 
100.00

 
348

 
(16
)
 
100.00

Mortgage banking income
 
15,165

 
15,710

 
16,620

 
10,401

 
11,993

 
14,350

 
12,839

 
10,960

 
26.45

 
57,896

 
50,142

 
15.46

Other
 
4,171

 
3,722

 
3,905

 
4,458

 
3,530

 
3,081

 
2,998

 
3,568

 
18.16

 
16,256

 
13,177

 
23.37

 
Total noninterest income
 
37,456

 
37,953

 
41,960

 
35,885

 
36,374

 
38,053

 
35,581

 
33,953

 
2.97

 
153,254

 
143,961

 
6.46

Salaries and employee benefits
 
67,684

 
65,425

 
60,325

 
57,350

 
58,313

 
55,187

 
52,010

 
48,784

 
16.07

 
250,784

 
214,294

 
17.03

Data processing
 
5,095

 
4,980

 
4,698

 
4,906

 
5,169

 
4,614

 
4,600

 
4,244

 
(1.43
)
 
19,679

 
18,627

 
5.65

Occupancy and equipment
 
13,231

 
12,943

 
11,544

 
11,835

 
11,816

 
10,668

 
9,805

 
9,822

 
11.98

 
49,553

 
42,111

 
17.67

Other real estate
 
339

 
418

 
252

 
1,004

 
725

 
278

 
232

 
657

 
(53.24
)
 
2,013

 
1,892

 
6.40

Amortization of intangibles
 
1,946

 
1,996

 
2,053

 
2,110

 
2,169

 
1,765

 
1,594

 
1,651

 
(10.28
)
 
8,105

 
7,179

 
12.90

Merger and conversion related expenses
 
76

 
24

 
179

 

 
1,625

 
11,221

 
500

 
900

 
(95.32
)
 
279

 
14,246

 
(98.04
)
Debt extinguishment penalty
 

 
54

 

 

 

 

 

 

 
100.00

 
54

 

 
100.00

Other
 
7,181

 
10,660

 
14,239

 
11,627

 
13,496

 
11,013

 
10,285

 
11,886

 
(46.79
)
 
43,707

 
46,680

 
(6.37
)
 
Total noninterest expense
 
95,552

 
96,500

 
93,290

 
88,832

 
93,313

 
94,746

 
79,026

 
77,944

 
2.40

 
374,174

 
345,029

 
8.45

Income before income taxes
 
48,266

 
48,578

 
60,570

 
58,700

 
57,518

 
40,496

 
47,134

 
43,499

 
(16.09
)
 
216,114

 
188,647

 
14.56

Income taxes
 
9,533

 
11,132

 
13,945

 
13,590

 
13,098

 
8,532

 
10,424

 
9,673

 
(27.22
)
 
48,200

 
41,727

 
15.51

 
Net income
 
$
38,733

 
$
37,446

 
$
46,625

 
$
45,110

 
$
44,420

 
$
31,964

 
$
36,710

 
$
33,826

 
(12.80
)
 
$
167,914

 
$
146,920

 
14.29

Basic earnings per share
 
$
0.68

 
$
0.65

 
$
0.80

 
$
0.77

 
$
0.76

 
$
0.61

 
$
0.74

 
$
0.69

 
(10.53
)
 
$
2.89

 
$
2.80

 
3.21

Diluted earnings per share
 
0.67

 
0.64

 
0.80

 
0.77

 
0.76

 
0.61

 
0.74

 
0.68

 
(11.84
)
 
2.88

 
2.79

 
3.23

Average basic shares outstanding
 
57,153,160

 
58,003,215

 
58,461,024

 
58,585,517

 
58,623,646

 
52,472,971

 
49,413,754

 
49,356,417

 
(2.51
)
 
58,046,716

 
52,492,104

 
10.58

Average diluted shares outstanding
 
57,391,876

 
58,192,419

 
58,618,976

 
58,730,535

 
58,767,519

 
52,609,902

 
49,549,761

 
49,502,950

 
(2.34
)
 
58,226,686

 
52,626,850

 
10.64

Common shares outstanding
 
56,855,002

 
57,455,306

 
58,297,670

 
58,633,630

 
58,546,480

 
58,743,814

 
49,424,339

 
49,392,978

 
(2.89
)
 
56,855,002

 
58,546,480

 
(2.89
)
Cash dividend per common share
 
$
0.22

 
$
0.22

 
$
0.22

 
$
0.21

 
$
0.21

 
$
0.20

 
$
0.20

 
$
0.19

 
4.76

 
$
0.87

 
$
0.80

 
8.75

Performance ratios
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on avg shareholders' equity
 
7.21
%
 
6.97
%
 
8.90
%
 
8.86
%
 
8.72
%
 
7.40
%
 
9.55
%
 
9.00
%
 
 
 
7.97
%
 
8.64
%
 
 
Return on avg tangible s/h's equity (non-GAAP) (1)
 
13.86
%
 
13.38
%
 
17.15
%
 
17.41
%
 
17.44
%
 
13.65
%
 
16.75
%
 
16.02
%
 
 
 
15.39
%
 
15.98
%
 
 
Return on avg assets
 
1.17
%
 
1.16
%
 
1.47
%
 
1.44
%
 
1.39
%
 
1.12
%
 
1.42
%
 
1.36
%
 
 
 
1.30
%
 
1.32
%
 
 
Return on avg tangible assets (non-GAAP)(2)
 
1.31
%
 
1.30
%
 
1.64
%
 
1.61
%
 
1.56
%
 
1.26
%
 
1.57
%
 
1.51
%
 
 
 
1.46
%
 
1.47
%
 
 
Net interest margin (FTE)
 
3.90
%
 
3.98
%
 
4.19
%
 
4.27
%
 
4.24
%
 
4.07
%
 
4.15
%
 
4.20
%
 
 
 
4.08
%
 
4.16
%
 
 
Yield on earning assets (FTE)
 
4.74
%
 
4.91
%
 
5.11
%
 
5.16
%
 
5.02
%
 
4.81
%
 
4.78
%
 
4.72
%
 
 
 
4.98
%
 
4.84
%
 
 
Cost of funding
 
0.87
%
 
0.97
%
 
0.96
%
 
0.92
%
 
0.81
%
 
0.77
%
 
0.65
%
 
0.53
%
 
 
 
0.93
%
 
0.70
%
 
 
Average earning assets to average assets
 
85.71
%
 
85.58
%
 
85.72
%
 
85.58
%
 
86.15
%
 
87.29
%
 
87.67
%
 
87.12
%
 
 
 
85.65
%
 
87.01
%
 
 
Average loans to average deposits
 
92.43
%
 
89.13
%
 
89.13
%
 
89.33
%
 
89.77
%
 
91.74
%
 
91.84
%
 
94.04
%
 
 
 
90.01
%
 
91.71
%
 
 
Noninterest income (less securities gains/
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
losses) to average assets
 
1.13
%
 
1.16
%
 
1.32
%
 
1.14
%
 
1.14
%
 
1.34
%
 
1.38
%
 
1.37
%
 
 
 
1.19
%
 
1.30
%
 
 
Noninterest expense (less debt prepayment penalties/
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
penalties/merger-related expenses) to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
average assets
 
2.88
%
 
2.98
%
 
2.93
%
 
2.83
%
 
2.86
%
 
2.94
%
 
3.05
%
 
3.11
%
 
 
 
2.90
%
 
2.98
%
 
 
Net overhead ratio
 
1.75
%
 
1.82
%
 
1.61
%
 
1.69
%
 
1.72
%
 
1.60
%
 
1.67
%
 
1.74
%
 
 
 
1.71
%
 
1.68
%
 
 
Efficiency ratio (FTE)
 
64.24
%
 
65.10
%
 
59.73
%
 
59.02
%
 
60.87
%
 
68.20
%
 
61.08
%
 
62.48
%
 
 
 
61.98
%
 
63.15
%
 
 
Adjusted efficiency ratio (FTE) (non-GAAP) (4)
 
63.43
%
 
62.53
%
 
58.30
%
 
57.62
%
 
58.39
%
 
58.84
%
 
59.46
%
 
60.43
%
 
 
 
60.44
%
 
59.22
%
 
 

12



RENASANT CORPORATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q4 2019 -
 
As of
 
 
 
 
 
2019
 
2018
 
Q4 2018
 
December 31,
 
 
 
 
 
Fourth
 
Third
 
Second
 
First
 
Fourth
 
Third
 
Second
 
First
 
Percent
 
 
 
 
 
Percent
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Variance
 
2019
 
2018
 
Variance
Average Balances
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
13,157,843

 
$
12,846,131

 
$
12,764,669

 
$
12,730,939

 
$
12,713,000

 
$
11,276,587

 
$
10,341,863

 
$
10,055,755

 
3.50
 %
 
$
12,875,986

 
$
11,104,567

 
15.95
 %
Earning assets
 
11,277,000

 
10,993,645

 
10,942,492

 
10,895,205

 
10,952,023

 
9,843,870

 
9,067,016

 
8,760,679

 
2.97

 
11,028,040

 
9,662,416

 
14.13

Securities
 
1,234,718

 
1,227,678

 
1,262,271

 
1,253,224

 
1,240,283

 
1,129,010

 
1,039,947

 
833,076

 
(0.45
)
 
1,244,376

 
1,061,882

 
17.19

Loans held for sale
 
350,783

 
385,437

 
353,103

 
345,264

 
418,213

 
297,692

 
209,652

 
152,299

 
(16.12
)
 
358,735

 
270,270

 
32.73

Loans, net of unearned
 
9,457,658

 
9,109,252

 
9,043,788

 
9,059,802

 
9,130,273

 
8,228,053

 
7,704,221

 
7,646,991

 
3.59

 
9,168,555

 
8,181,587

 
12.06

Intangibles
 
977,506

 
975,306

 
974,628

 
976,820

 
972,736

 
743,567

 
633,155

 
634,898

 
0.49

 
976,065

 
747,008

 
30.66

Noninterest-bearing deposits
 
2,611,265

 
2,500,810

 
2,395,899

 
2,342,406

 
2,402,422

 
2,052,226

 
1,867,925

 
1,817,848

 
8.69

 
2,463,436

 
2,036,754

 
20.95

Interest-bearing deposits
 
7,620,602

 
7,719,510

 
7,750,986

 
7,799,892

 
7,768,724

 
6,916,699

 
6,521,123

 
6,314,114

 
(1.91
)
 
7,722,247

 
6,884,250

 
12.17

Total deposits
 
10,231,867

 
10,220,320

 
10,146,885

 
10,142,298

 
10,171,146

 
8,968,925

 
8,389,048

 
8,131,962

 
0.60

 
10,185,683

 
8,921,004

 
14.18

Borrowed funds
 
596,101

 
308,931

 
354,234

 
363,140

 
407,496

 
499,054

 
329,287

 
314,228

 
46.28

 
405,975

 
388,077

 
4.61

Shareholders' equity
 
2,131,345

 
2,131,537

 
2,102,093

 
2,065,370

 
2,021,075

 
1,712,757

 
1,542,071

 
1,523,873

 
5.46

 
2,107,832

 
1,701,334

 
23.89

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Q4 2019 -
 
As of
 
 
2019
 
2018
 
Q4 2018
 
December 31,
 
 
Fourth
 
Third
 
Second
 
First
 
Fourth
 
Third
 
Second
 
First
 
Percent
 
 
 
 
 
Percent
 
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Quarter
 
Variance
 
2019
 
2018
 
Variance
Balances at period end
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
13,400,510

 
$
13,039,674

 
$
12,892,653

 
$
12,862,395

 
$
12,934,878

 
$
12,746,939

 
$
10,544,475

 
$
10,238,313

 
3.60
 %
 
$
13,400,510

 
$
12,934,878

 
3.60
 %
Earning assets
 
11,522,388

 
11,145,052

 
11,064,957

 
11,015,535

 
11,115,929

 
10,962,958

 
9,239,200

 
8,938,117

 
3.66

 
11,522,388

 
11,115,929

 
3.66

Securities
 
1,290,613

 
1,238,577

 
1,268,280

 
1,255,353

 
1,250,777

 
1,177,606

 
1,088,779

 
948,365

 
3.18

 
1,290,613

 
1,250,777

 
3.18

Loans held for sale
 
318,272

 
392,448

 
461,681

 
318,563

 
411,427

 
463,287

 
245,046

 
204,472

 
(22.64
)
 
318,272

 
411,427

 
(22.64
)
Non purchased loans
 
7,587,974

 
7,031,818

 
6,704,288

 
6,565,599

 
6,389,712

 
6,210,238

 
6,057,766

 
5,830,122

 
18.75

 
7,587,974

 
6,389,712

 
18.75

Purchased loans
 
2,101,664

 
2,281,966

 
2,350,366

 
2,522,694

 
2,693,417

 
2,912,669

 
1,709,891

 
1,867,948

 
(21.97
)
 
2,101,664

 
2,693,417

 
(21.97
)
 
Total loans
 
9,689,638

 
9,313,784

 
9,054,654

 
9,088,293

 
9,083,129

 
9,122,907

 
7,767,657

 
7,698,070

 
6.68

 
9,689,638

 
9,083,129

 
6.68

Intangibles
 
976,943

 
978,390

 
973,673

 
975,726

 
977,793

 
974,115

 
632,311

 
633,905

 
(0.09
)
 
976,943

 
977,793

 
(0.09
)
Noninterest-bearing deposits
 
2,551,771

 
2,607,056

 
2,408,984

 
2,366,223

 
2,318,706

 
2,359,859

 
1,888,561

 
1,861,136

 
10.05

 
2,551,771

 
2,318,706

 
10.05

Interest-bearing deposits
 
7,661,398

 
7,678,980

 
7,781,077

 
7,902,689

 
7,809,851

 
7,812,089

 
6,492,159

 
6,496,633

 
(1.90
)
 
7,661,398

 
7,809,851

 
(1.90
)
 
Total deposits
 
10,213,169

 
10,286,036

 
10,190,061

 
10,268,912

 
10,128,557

 
10,171,948

 
8,380,720

 
8,357,769

 
0.84

 
10,213,169

 
10,128,557

 
0.84

Borrowed funds
 
865,598

 
433,705

 
401,934

 
350,859

 
651,324

 
439,516

 
520,747

 
265,191

 
32.90

 
865,598

 
651,324

 
32.90

Shareholders' equity
 
2,126,008

 
2,119,659

 
2,119,696

 
2,088,877

 
2,043,913

 
2,010,711

 
1,558,668

 
1,532,765

 
4.02

 
2,126,008

 
2,043,913

 
4.02

Market value per common share
 
35.42

 
35.01

 
35.94

 
33.85

 
30.18

 
41.21

 
45.52

 
42.56

 
17.36

 
35.42

 
30.18

 
17.36

Book value per common share
 
37.39

 
36.89

 
36.36

 
35.63

 
34.91

 
34.23

 
31.54

 
31.03

 
7.10

 
37.39

 
34.91

 
7.10

Tangible book value per common share
 
20.21

 
19.86

 
19.66

 
18.98

 
18.21

 
17.65

 
18.74

 
18.20

 
10.98

 
20.21

 
18.21

 
10.98

Shareholders' equity to assets (actual)
 
15.87
%
 
16.26
%
 
16.44
%
 
16.24
%
 
15.80
%
 
15.77
%
 
14.78
%
 
14.97
%
 
 
 
15.87
%
 
15.80
%
 
 
Tangible capital ratio (non-GAAP)(3)
 
9.25
%
 
9.46
%
 
9.62
%
 
9.36
%
 
8.92
%
 
8.80
%
 
9.35
%
 
9.36
%
 
 
 
9.25
%
 
8.92
%