Renasant Corporation Announces 2010 First Quarter Earnings

TUPELO, Miss., April 20 /PRNewswire-FirstCall/ -- Renasant Corporation (Nasdaq: RNST) (the "Company") today announced results for the first quarter of 2010.  Net income for the first quarter of 2010 was $3,607,000 compared to $4,031,000 for the fourth quarter of 2009 and $6,006,000 for the first quarter of 2009.  Basic and diluted earnings per share were $0.17 during the first quarter of 2010 as compared to basic and diluted earnings per share of $0.19 for the fourth quarter of 2009 and basic earnings per share of $0.29 and diluted earnings per share of $0.28 for the first quarter of 2009.

"During the first quarter of 2010 we saw positive trends as our net interest margin increased, our core deposits grew and we were able to hold noninterest expenses relatively flat compared to the fourth quarter of 2009," commented Renasant Chairman and Chief Executive Officer, E. Robinson McGraw.  "As anticipated, our first quarter results reflect the challenging environment for the financial services industry as well as the national economy.  As we adapt to this challenging environment and focus on capitalizing on the opportunities presented in our markets, we believe we are positioned to improve earnings in future quarters."

Total deposits grew to $2.71 billion at March 31, 2010, representing a 5.35% increase from December 31, 2009 and a 0.91% increase since March 31, 2009.  In reducing our reliance on other wholesale funding sources, the Company continued to pay down borrowed funds and reduced its reliance on public fund deposits through increasing core deposits.  Noninterest bearing demand deposits grew approximately $10 million, or 3.31%, during the first quarter of 2010 as compared to December 31, 2009.

Total loans were approximately $2.31 billion at the end of the first quarter of 2010, a decrease from $2.35 billion at December 31, 2009 and $2.51 billion at March 31, 2009.  As anticipated, the decline was primarily attributable to the reduction of exposure to construction and land development loans.  In addition, total loans were affected by the Company's exit from the student lending program due to recent legislation affecting the ability of banks to make these loans.  The sale of our student loans reduced total loans over $10 million at March 31, 2010 compared to December 31, 2009.

Total assets as of March 31, 2010 were approximately $3.64 billion, a slight increase since December 31, 2009 and a 4.04% decrease from March 31, 2009.  The Company's Tier 1 leverage capital ratio was 8.74%, its Tier I risk-based capital ratio was 11.19%, and its total risk-based capital ratio was 12.44%.

"We increased all of our capital ratios during the first quarter of 2010 as compared to the fourth quarter of 2009 and we remain above well capitalized thresholds," said McGraw.  "We are particularly pleased that our leverage ratio has continually increased quarter over quarter during the last year."

Net interest income was $24,410,000 for the first quarter of 2010 as compared to $25,313,000 for the same period in 2009.  Net interest margin was 3.27% for the first quarter of 2010 compared to 3.22% for the fourth quarter of 2009 and 3.19% for the first quarter of 2009.  The improvement in net interest margin was achieved despite a 4 basis point reduction in the yield on earning assets as the Company recognized higher levels of premium amortization resulting from increased prepayments on its mortgage backed securities portfolio.

Contributing to the improvement in net interest margin was a continued effort to improve the Company's funding costs by replacing higher costing borrowings with lower costing deposits.  The Company's cost of funding was 1.95% for the first quarter of 2010 as compared to 2.06% for the fourth quarter of 2009 and 2.24% for the first quarter of 2009.  

"We are seeing positive results from our efforts to improve our net interest margin even as interest rates remain at historically low levels," commented McGraw.  "We anticipate this upward trend in our net interest margin continuing throughout 2010."

Noninterest income was $12,484,000 for the first quarter of 2010 as compared to $13,419,000 for the fourth quarter of 2009 and $14,762,000 for the first quarter of 2009.  The primary reduction in noninterest income was due to a decline in production from our mortgage loan division.  During the first quarter of 2009, the Company experienced increased production in residential mortgage loans being refinanced due to a decline in mortgage interest rates.  

"Despite a decline in mortgage loan production during the first quarter of 2010 that affected noninterest income, early second quarter 2010 production is showing encouraging signs.  In addition, we experienced growth in debit card revenue as well as gains in revenue from our trust division during the first quarter of 2010," stated McGraw.

Noninterest expense was $25,634,000 for the first quarter of 2010 as compared to $26,920,000 for the first quarter of 2009, a 4.78% decrease; noninterest expense remained relatively unchanged on a linked quarter basis.  The decline in year over year noninterest expense was due to a reduction in personnel, occupancy and equipment expense which more than offset increased expenses related to other real estate owned.

Annualized net charge-offs as a percentage of average loans were 0.81% for the first quarter of 2010, down from 0.83% for the fourth quarter of 2009 and up from 0.75% for the first quarter of 2009.  Non-performing loans as a percentage of total loans were 2.37% at March 31, 2010, as compared to 2.13% at December 31, 2009 and 2.69% at March 31, 2009.  Loans 30-89 days past due as a percentage of total loans were 1.80% at March 31, 2010, as compared to 1.03% at December 31, 2009 and 1.04% at March 31, 2009. The allowance for loan losses as a percentage of loans was 1.78% at March 31, 2010, as compared to 1.67% at December 31, 2009 and 1.40% at March 31, 2009.  The Company recorded a provision for loan losses of $6,665,000 for the first quarter of 2010 as compared to $7,800,000 for the fourth quarter of 2009 and $5,040,000 for the first quarter of 2009.

Non-performing loans (loans 90 days or more past due and nonaccrual loans) were $54,604,000 at March 31, 2010, as compared to $50,025,000 at December 31, 2009 and $67,380,000 at March 31, 2009.  

Other real estate owned was $62,508,000 on March 31, 2010 as compared to $58,568,000 at December 31, 2009 and $25,318,000 at March 31, 2009.  Other real estate owned increased as the Company took possession of the real properties securing problem loans in order to control the liquidation of these properties.  

"Our policy is to aggressively recognize potential issues in our credit portfolio and address them as quickly as possible.  In order to provide for these potential issues we believed it was prudent to have significantly increased our provision for loan losses over the past six quarters.  In addition, members of our special assets division continue their proactive efforts to market other real estate owned while at the same time maintaining very low loss rates," stated McGraw.  "Even though the current banking environment remains a challenge, our key markets are fundamentally sound and we are optimistic in our positioning for long term success."

CONFERENCE CALL INFORMATION:

A live audio webcast of a conference call with analysts will be available beginning at 10:00 a.m. Eastern on Wednesday, April 21, 2010, through the Company's website: www.renasant.com or http://www.talkpoint.com/viewer/starthere.asp?Pres=130551.  The event will be archived on the Company's website for one year.  If Internet access is unavailable, the conference may also be heard live (listen-only) via telephone by dialing 1-800-860-2442 in the United States and requesting the Renasant First Quarter 2010 Earnings Webcast and Conference Call. International participants should dial 1-412-858-4600.

ABOUT RENASANT CORPORATION:

Renasant Corporation is the parent of Renasant Bank and Renasant Insurance.  Renasant has assets of approximately $3.6 billion and operates over 65 banking, mortgage, financial services and insurance offices in Mississippi, Tennessee and Alabama.

NOTE TO INVESTORS:

This news release may contain, or incorporate by reference, statements which may 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" 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, and that 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 our portfolio of outstanding loans, and competition in our markets. We undertake no 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.

Contacts
For Media:
John Oxford
Vice President
Director of External Affairs
[phone]
[e-mail]
For Financials:
Stuart Johnson
Senior Executive Vice President
Chief Financial Officer
[phone]
[e-mail]

RENASANT CORPORATION  (Unaudited) (Dollars in thousands, except per share data)
												Q1 2010 -		For the Three Months
		2010		2009								Q1 2009		Ended March 31,
		First		Fourth		Third		Second		First		Percent						Percent
Statement of earnings		Quarter		Quarter		Quarter		Quarter		Quarter		Variance		2010		2009		Variance
Interest income - taxable equivalent basis		$      40,900		$      42,526		$      43,820		$      43,836		$      44,988		(9.09)		$      40,900		$      44,988		(9.09)
Interest income		$      39,708		$      41,331		$      42,614		$      42,709		$      43,910		(9.57)		$      39,708		$      43,910		(9.57)
Interest expense		15,298		16,529		17,423		18,549		18,597		(17.74)		15,298		18,597		(17.74)
	Net interest income	24,410		24,802		25,191		24,160		25,313		(3.57)		24,410		25,313		(3.57)
Provision for loan losses		6,665		7,800		7,350		6,700		5,040		32.24		6,665		5,040		32.24
	Net interest income after provision	17,745		17,002		17,841		17,460		20,273		(12.47)		17,745		20,273		(12.47)
Service charges on deposit accounts		5,090		5,801		5,379		5,395		5,425		(6.18)		5,090		5,425		(6.18)
Fees and commissions on loans and deposits		3,721		3,554		3,961		4,424		4,682		(20.53)		3,721		4,682		(20.53)
Insurance commissions and fees		834		705		949		837		828		0.72		834		828		0.72
Trust revenue		584		559		501		488		491		18.94		584		491		18.94
Securities (losses) gains		(160)		123		-		1,123		427		(137.47)		(160)		427		(137.47)
Gain on sale of mortgage loans		1,169		1,665		1,832		2,293		1,776		(34.18)		1,169		1,776		(34.18)
Other		1,246		1,012		1,331		864		1,133		9.97		1,246		1,133		9.97
	Total non-interest income	12,484		13,419		13,953		15,424		14,762		(15.43)		12,484		14,762		(15.43)
Salaries and employee benefits		13,197		13,572		13,363		13,736		14,744		(10.49)		13,197		14,744		(10.49)
Occupancy and equipment		2,931		2,981		3,045		3,063		3,249		(9.79)		2,931		3,249		(9.79)
Data processing		1,426		1,407		1,439		1,430		1,329		7.30		1,426		1,329		7.30
Amortization of intangibles		476		482		489		494		501		(4.99)		476		501		(4.99)
Other		7,604		7,141		7,782		8,409		7,097		7.14		7,604		7,097		7.14
	Total non-interest expense	25,634		25,583		26,118		27,132		26,920		(4.78)		25,634		26,920		(4.78)
Income before income taxes		4,595		4,838		5,676		5,752		8,115		(43.38)		4,595		8,115		(43.38)
Income taxes		988		807		1,451		1,496		2,109		(53.15)		988		2,109		(53.15)
	Net income	$        3,607		$        4,031		$        4,225		$        4,256		$        6,006		(39.94)		$        3,607		$        6,006		(39.94)
Basic earnings per share		$          0.17		$          0.19		$          0.20		$          0.20		$          0.29		(41.38)		$          0.17		$          0.29		(41.38)
Diluted earnings per share		0.17		0.19		0.20		0.20		0.28		(39.29)		0.17		0.28		(39.29)
Average basic shares outstanding		21,082,991		21,078,873		21,075,879		21,073,228		21,067,539		0.07		21,082,991		21,067,539		0.07
Average diluted shares outstanding		21,208,934		21,217,841		21,213,839		21,193,560		21,188,397		0.10		21,208,934		21,188,397		0.10
Common shares outstanding		21,082,991		21,082,991		21,078,828		21,074,568		21,067,539		0.07		21,082,991		21,067,539		0.07
Cash dividend per common share		$          0.17		$          0.17		$          0.17		$          0.17		$          0.17		-		$          0.17		$          0.17		-
Performance ratios
Return on average shareholders' equity		3.55%		3.87%		4.12%		4.22%		6.04%				3.55%		6.04%
Return on average shareholders' equity, excluding amortization expense		3.84%		4.15%		4.41%		4.52%		6.35%				3.84%		6.35%
Return on average assets		0.40%		0.44%		0.46%		0.46%		0.65%				0.40%		0.65%
Return on average assets, excluding amortization expense		0.44%		0.47%		0.49%		0.49%		0.68%				0.44%		0.68%
Net interest margin (FTE)		3.27%		3.22%		3.22%		3.04%		3.19%				3.27%		3.19%
Yield on earning assets (FTE)		5.23%		5.26%		5.33%		5.27%		5.46%				5.23%		5.46%
Average earning assets to average assets		87.28%		88.19%		88.73%		89.25%		88.85%				87.28%		88.85%
Average loans to average deposits		88.47%		92.96%		94.22%		94.40%		99.13%				88.47%		99.13%
Noninterest income (less securities gains/
	losses) to average assets	1.42%		1.45%		1.51%		1.53%		1.54%				1.42%		1.54%
Noninterest expense to average assets		2.87%		2.79%		2.82%		2.91%		2.90%				2.87%		2.90%
Net overhead ratio		1.45%		1.34%		1.31%		1.38%		1.36%				1.45%		1.36%
Efficiency ratio (FTE)		67.31%		64.91%		64.73%		66.65%		65.41%				67.31%		65.41%
*Percent variance not meaningful

RENASANT CORPORATION  (Unaudited) (Dollars in thousands, except per share data)
												Q1 2010 -		For the Three Months
		2010		2009								Q1 2009		Ended March 31,
		First		Fourth		Third		Second		First		Percent						Percent
Average balances		Quarter		Quarter		Quarter		Quarter		Quarter		Variance		2010		2009		Variance
Total assets		$ 3,621,361		$ 3,640,514		$ 3,675,592		$ 3,738,852		$ 3,763,245		(3.77)		$ 3,621,361		$ 3,763,245		(3.77)
Earning assets		3,160,620		3,210,554		3,261,527		3,337,103		3,343,699		(5.48)		3,160,620		3,343,699		(5.48)
Securities		697,913		719,298		703,976		701,894		696,068		0.27		697,913		696,068		0.27
Loans, net of unearned		2,354,443		2,397,195		2,465,298		2,542,021		2,587,436		(9.00)		2,354,443		2,587,436		(9.00)
Intangibles		190,881		191,591		192,078		192,568		193,067		(1.13)		190,881		193,067		(1.13)
Non-interest bearing deposits		$    310,726		$    307,753		$    297,390		$    293,546		$    299,265		3.83		$    310,726		$    299,265		3.83
Interest bearing deposits		2,332,741		2,247,854		2,286,184		2,342,788		2,250,324		3.66		2,332,741		2,250,324		3.66
	Total deposits	2,643,467		2,555,607		2,583,574		2,636,334		2,549,589		3.68		2,643,467		2,549,589		3.68
Borrowed funds		530,654		632,689		647,919		662,387		815,548		(34.93)		530,654		815,548		(34.93)
Shareholders' equity		412,132		413,773		406,779		404,456		403,229		2.21		412,132		403,229		2.21
Asset quality data
Nonaccrual loans		$      44,688		$      39,454		$      37,995		$      55,217		$      47,591		(6.10)		$      44,688		$      47,591		(6.10)
Loans 90 past due or more		9,916		10,571		10,661		10,284		19,789		(49.89)		9,916		19,789		(49.89)
Non-performing loans		54,604		50,025		48,656		65,501		67,380		(18.96)		54,604		67,380		(18.96)
Other real estate owned and repossessions		62,508		58,568		47,457		30,546		25,318		146.89		62,508		25,318		146.89
Non-performing assets		$    117,112		$    108,593		$      96,113		$      96,047		$      92,698		26.34		$    117,112		$      92,698		26.34
Net loan charge-offs (recoveries)		$        4,716		$        5,007		$        6,962		$        5,917		$        4,764		(1.01)		$        4,716		$        4,764		(1.01)
Allowance for loan losses		41,094		39,145		36,352		35,964		35,181		16.81		41,094		35,181		16.81
Non-performing loans / total loans		2.37%		2.13%		2.03%		2.65%		2.69%				2.37%		2.69%
Non-performing assets / total assets		3.22%		2.98%		2.64%		2.59%		2.44%				3.22%		2.44%
Allowance for loan losses / total loans		1.78%		1.67%		1.51%		1.46%		1.40%				1.78%		1.40%
Allowance for loan losses /
non-performing loans		75.26%		78.25%		74.71%		54.91%		52.21%				75.26%		52.21%
Annualized net loan charge-offs /
average loans		0.81%		0.83%		1.12%		0.93%		0.75%				0.81%		0.75%
Balances at period end
Total assets		$ 3,641,709		$ 3,641,081		$ 3,642,657		$ 3,701,957		$ 3,795,217				$ 3,641,709		$ 3,795,217		(4.04)
Earning assets		3,200,159		3,173,039		3,188,554		3,236,615		3,368,962				3,200,159		3,368,962		(5.01)
Securities		741,207		714,164		738,204		684,723		709,950				741,207		709,950		4.40
Mortgage loans held for sale		16,597		25,749		24,091		49,565		55,194				16,597		55,194		(69.93)
Loans, net of unearned		2,308,335		2,347,615		2,402,423		2,468,844		2,506,780				2,308,335		2,506,780		(7.92)
Intangibles		190,881		191,357		191,839		192,328		192,822				190,881		192,822		(1.01)
Non-interest bearing deposits		$    315,064		$    304,962		$    297,858		$    292,129		$    303,536				$    315,064		$    303,536		3.80
Interest bearing deposits		2,398,784		2,271,138		2,263,126		2,308,081		2,385,769				2,398,784		2,385,769		0.55
	Total deposits	2,713,848		2,576,100		2,560,984		2,600,210		2,689,305				2,713,848		2,689,305		0.91
Borrowed funds		483,183		618,024		635,076		665,755		672,130				483,183		672,130		(28.11)
Shareholders' equity		410,557		410,122		410,473		400,680		400,095				410,557		400,095		2.61
Market value per common share		$        16.18		$        13.60		$        14.85		$        15.02		$        12.56				$        16.18		$        12.56		28.82
Book value per common share		19.47		19.45		19.47		19.01		18.99				19.47		18.99		2.54
Tangible book value per common share		10.42		10.38		10.37		9.89		9.84				10.42		9.84		5.91
Shareholders' equity to assets (actual)		11.27%		11.26%		11.27%		10.82%		10.54%				11.27%		10.54%
Tangible capital ratio		6.37%		6.34%		6.34%		5.94%		5.75%				6.37%		5.75%
Leverage ratio		8.74%		8.68%		8.56%		8.37%		8.28%				8.74%		8.28%
Tier 1 risk-based capital ratio		11.19%		11.12%		11.04%		10.92%		11.00%				11.19%		11.00%
Total risk-based capital ratio		12.44%		12.37%		12.29%		12.17%		12.25%				12.44%		12.25%
Detail of Loans by Category
Commercial, financial, agricultural		$    276,749		$    281,329		$    280,930		$    292,177		$    301,899				$    276,749		$    301,899		(8.33)
Lease financing		677		778		936		1,283		1,434				677		1,434		(52.79)
Real estate - construction		110,121		133,299		153,367		180,202		210,747				110,121		210,747		(47.75)
Real estate - 1-4 family mortgages		809,271		820,917		848,267		878,263		872,796				809,271		872,796		(7.28)
Real estate - commercial mortgages		1,055,102		1,040,589		1,048,135		1,054,169		1,055,537				1,055,102		1,055,537		(0.04)
Installment loans to individuals		56,415		70,703		70,788		62,750		64,367				56,415		64,367		(12.35)
	Loans, net of unearned	$ 2,308,335		$ 2,347,615		$ 2,402,423		$ 2,468,844		$ 2,506,780				$ 2,308,335		$ 2,506,780		(7.92)
*Percent variance not meaningful

SOURCE Renasant Corporation

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