Renasant Corporation Announces Earnings For The Second Quarter Of 2020

TUPELO, Miss., July 27, 2020 /PRNewswire/ -- Renasant Corporation (NASDAQ: RNST) (the "Company") today announced earnings results for the second quarter of 2020. Net income for the second quarter of 2020 was $20.1 million, as compared to $46.6 million for the second quarter of 2019. Basic and diluted earnings per share ("EPS") were $0.36 for the second quarter of 2020, as compared to basic and diluted EPS of $0.80 for the second quarter of 2019.

Net income for the six months ending June 30, 2020, was $22.1 million, as compared to net income of $91.7 million for the same time period in 2019. Basic and diluted EPS were $0.39 for the first six months of 2020, as compared to basic and diluted EPS of $1.57 and $1.56, respectively, for the first six months of 2019.

"Our second quarter results reflect a rebound in core earnings when compared to the first quarter and truly highlight our team's continued commitment to the core operations of the bank," commented C. Mitchell Waycaster, Renasant President and Chief Executive Officer. "Our team members are continuing to execute our long-term strategy throughout our footprint while providing extraordinary service to our customers. During the quarter, our team closed over 10,500 PPP loans and worked through our internal deferral programs with both commercial and consumer customers. While there are still many economic uncertainties, we remain committed to meeting the needs of our clients and prudently managing our balance sheet while focusing on profitable growth without sacrificing credit quality."

"There are several bright spots in our results that highlight the strong underlying fundamentals of our core business," commented Kevin D. Chapman, Renasant Chief Operating and Financial Officer. "Our mortgage division had another tremendous quarter, with over $1.67 billion of production, continuing to provide an excellent source of diversity in our revenue streams, and our core expenses are trending in the right direction. Our credit quality remains sound and is top-of-mind as we've continued the enhanced monitoring of our loan portfolio implemented in the first quarter of this year, especially the segments we believe are most likely to be adversely impacted by changes in economic activity as a result of the pandemic. Still, in response to the continued economic uncertainty stemming from the pandemic, during the second quarter, we prudently increased our reserves and recorded a $29.5 million provision for loan losses and unfunded commitments. We continue to monitor the impact the pandemic is having on every aspect of our operations, but even during these uncertain times, our commitment to serve the needs of each of our stakeholders remains unchanged."

Paycheck Protection Program and COVID-19 Response Update
Through June 30, 2020, the Company has closed over 10,500 Paycheck Protection Program ("PPP") loans in the aggregate amount of approximately $1.3 billion.  The Company made PPP loans to both new and existing customers, and generated over $44.7 million in gross fees. Based on trends thus far, the Company does not anticipate the amount of these fees will be materially impacted by payments required to be made to agents of PPP borrowers.

The Company's branch lobbies remain accessible by appointment only (and appointments are generally limited to services that require access inside a branch, such as access to a safe-deposit box to address a pressing need), while protocols designed to minimize Company employees' exposure to COVID-19, such as working remotely, reconfiguring work spaces to promote social distancing and adjusting staff levels, remain in place. As discussed in more detail below, the Company continued to incur expenses, primarily related to employee overtime and other employee benefit accruals, in its response to the COVID-19 pandemic and expects that it will continue to incur elevated expenses even while conditions presenting significant challenges to growth persist. At this time, it remains difficult to accurately predict the duration of this new operating reality. Management's decision on when to return to pre-pandemic operating procedures will take into account the best interests of all of the Company's stakeholders.

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 EPS for the second quarter of 2020. There were no such expenses and charges that had a material impact during the second quarter of 2019 or the first six months of 2019. The "COVID-19 related expenses" line item in the table below primarily consists of (a) employee overtime and employee benefit accruals directly related to the Company's response to both the COVID-19 pandemic itself and federal legislation enacted to address the pandemic, such as the CARES Act, and (b) expenses associated with supplying branches with protective equipment and sanitation supplies (such as floor markings and cautionary signage for branches, face coverings and hand sanitizer) as well as more frequent and rigorous branch cleaning.

(in thousands, except per share data)	Three Months Ended										Six Months Ended
	June 30, 2020										June 30, 2020
	Pre-tax			After-tax			Impact to Diluted EPS				Pre-tax			After-tax			Impact to Diluted EPS
Earnings, as reported	$	24,767		$	20,130		$	0.36			$	27,548		$	22,138		$	0.39
MSR valuation adjustment	4,951			4,045			0.07				14,522			11,835			0.21
COVID-19 related expenses	6,257			5,113			0.09				9,160			7,465			0.13
Earnings, with exclusions (Non-GAAP)	$	35,975		$	29,288		$	0.52			$	51,230		$	41,438		$	0.73

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 tables present the Company's profitability metrics, including and excluding the impact of the mortgage servicing rights (MSR) valuation adjustment, debt prepayment penalties, merger and conversion expenses and COVID-19 related expenses, as applicable, for the dates presented:

	As Reported						With Exclusions (Non-GAAP)
	Three Months Ended						Three Months Ended
	June 30, 2020		March 31, 2020		June 30, 2019		June 30, 2020		March 31, 2020		June 30, 2019
Return on average assets	0.55	%	0.06	%	1.47	%	0.80	%	0.33	%	1.47	%
Return on average tangible assets (Non-GAAP)	0.63	%	0.11	%	1.64	%	0.90	%	0.40	%	1.64	%
Return on average equity	3.85	%	0.38	%	8.90	%	5.62	%	2.10	%	8.92	%
Return on average tangible equity (Non-GAAP)	7.72	%	1.20	%	17.15	%	11.01	%	4.41	%	17.20	%

 

	As Reported					With Exclusions (Non-GAAP)
	Six Months Ended					Six Months Ended
	June 30, 2020			June 30, 2019		June 30, 2020			June 30, 2019
Return on average assets	0.32	%		1.45	%	0.59	%		1.45	%
Return on average tangible assets (Non-GAAP)	0.39	%		1.63	%	0.68	%		1.63	%
Return on average equity	2.12	%		8.88	%	3.97	%		8.89	%
Return on average tangible equity (Non-GAAP)	4.49	%		17.28	%	7.94	%		17.30	%

Financial Condition
Total assets were $14.90 billion at June 30, 2020, as compared to $13.40 billion at December 31, 2019. Total loans held for investment were $11.00 billion at June 30, 2020, as compared to $9.69 billion at December 31, 2019. Loans held for investment at June 30, 2020 included $1.28 billion in PPP loans.

Total deposits increased to $11.85 billion at June 30, 2020, from $10.21 billion at December 31, 2019. Non-interest bearing deposits increased $1.19 billion to $3.74 billion, or 31.57% of total deposits, at June 30, 2020, as compared to $2.55 billion, or 24.99% of total deposits, at December 31, 2019. The growth in non-interest bearing deposits during the quarter was primarily driven by the Company's PPP lending (as loan proceeds are held as Company deposits until the borrower utilizes the funds), Economic Impact Payments provided for in the government stimulus package and core growth.

Continued Focus on Prudent Capital Management
The Company remains committed to maintaining a strong capital and liquidity position, while also serving the needs of its stakeholders during these uncertain times. As previously announced, the Company suspended its stock repurchase program during the first quarter of 2020 in response to the COVID-19 pandemic. There is $5.5 million of repurchase availability remaining under the $50.0 million 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.

At June 30, 2020, Tier 1 leverage capital was 9.12%, Common Equity Tier 1 ratio was 10.69%, Tier 1 risk-based capital ratio was 11.69%, and total risk-based capital ratio was 13.72%. All regulatory ratios exceed the minimums required to be "well-capitalized."

The Company's ratio of shareholders' equity to assets was 13.98% at June 30, 2020, as compared to 15.86% at December 31, 2019. Its tangible capital ratio (non-GAAP) was 7.97% at June 30, 2020, as compared to 9.25% at December 31, 2019.

The PPP loans originated during the quarter and held on the Company's balance sheet at June 30, 2020, negatively impacted  the Company's tangible capital ratio by 81 basis points and its leverage ratio by 61 basis points.

Results of Operations
Net interest income was $105.8 million for the second quarter of 2020, as compared to $106.6 million for the first quarter of 2020 and $112.8 million for the second quarter of 2019. Net interest income was $212.4 million for the first half of 2020, as compared to $225.9 million for the first half of 2019.

The Company has continued to experience margin pressure during the second quarter of 2020 as a result of the Federal Reserve's decision to cut interest rates as well as changes in the mix of earning assets during the quarter due to the excess liquidity on the balance sheet. The Company has continued to focus on lowering the cost of funding by growing noninterest-bearing deposits and aggressively lowering interest rates on interest-bearing deposits, while also continuing to be opportunistic when rates offered on wholesale borrowings are advantageous. The following tables present the percentage of total average earning assets, by type and yield, for the periods presented:

	Percentage of Total Average Earning Assets						Yield
	Three Months Ended						Three Months Ended
	June 30,		March 31,		June 30,		June 30,		March 31,		June 30,
	2020		2020		2019		2020		2020		2019
Loans held for investment excl. PPP loans	76.31	%	83.44	%	82.65	%	4.45	%	4.93	%	5.44	%
PPP loans	6.78		—		—		2.73		—		—
Loans held for sale	2.67		2.90		3.23		3.51		3.57		5.90
Securities	10.14		11.14		11.54		2.71		2.91		3.04
Other	4.10		2.52		2.58		0.15		1.12		2.59
Total earning assets	100.00	%	100.00	%	100.00	%	3.95	%	4.57	%	5.11	%

 

	Percentage of Total Average Earning Assets				Yield
	Six Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2020		2019		2020		2019
Loans held for investment excl. PPP loans	79.71	%	82.90	%	4.69	%	5.44	%
PPP loans	3.55		—		2.73		—
Loans held for sale	2.78		3.20		3.54		6.37
Securities	10.61		11.52		2.81		3.12
Other	3.35		2.38		0.50		2.55
Total earning assets	100.00	%	100.00	%	4.25	%	5.13	%

The following tables present reported taxable equivalent net interest margin and yield on loans, including loans held for sale, for the periods presented (in thousands).

	Three Months Ended
	June 30,			March 31,			June 30,
	2020			2020			2019
Taxable equivalent net interest income	$	107,457		$	108,316		$	114,223
Average earning assets	$	12,776,644		$	11,609,477		$	10,942,492
Net interest margin	3.38		%	3.75		%	4.19		%
Taxable equivalent interest income on loans	$	116,703		$	121,729		$	127,896
Average loans, including loans held for sale	$	10,956,729		$	10,024,114		$	9,396,891
Loan yield	4.28		%	4.88		%	5.46		%

 

	Six Months Ended
	June 30,			June 30,
	2020			2019
Taxable equivalent net interest income	$	215,773		$	228,854
Average earning assets	$	12,193,061		$	10,918,979
Net interest margin	3.56		%	4.23		%
Taxable equivalent interest income on loans	$	238,432		$	255,102
Average loans, including loans held for sale	$	10,490,422		$	9,400,956
Loan yield	4.57		%	5.47		%

PPP loans reduced margin and loan yield by 5 basis points and 14 basis points, respectively, in the second quarter of 2020 and 3 basis points and 8 basis points, respectively, in the first half of 2020. In addition to the impact of PPP loans on the margin as disclosed above, excess cash carried on the Company's balance sheet reduced margin by 15 basis points and 9 basis points in the second quarter and first half of 2020, respectively.

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 tables for the periods presented (in thousands).

	Three Months Ended
	June 30,			March 31,			June 30,
	2020			2020			2019
Net interest income collected on problem loans	$	384		$	218		$	2,173
Accretable yield recognized on purchased loans(1)	4,700			5,469			7,513
Total impact to interest income	$	5,084		$	5,687		$	9,686
Impact to total loan yield	0.19		%	0.23		%	0.41		%
Impact to net interest margin	0.16		%	0.20		%	0.36		%

(1)

Includes additional interest income recognized in connection with the acceleration of paydowns and payoffs from purchased loans of $1,731, $2,187 and $4,197 for the three months ended June 30, 2020, March 31, 2020, and June 30, 2019, respectively. This additional interest income increased total loan yield by 6 basis points, 9 basis points and 18 basis points for the same periods, respectively, while increasing net interest margin by 5 basis points, 8 basis points and 15 basis points for the same periods, respectively.

 

	Six Months Ended
	June 30,			June 30,
	2020			2019
Net interest income collected on problem loans	$	602		$	2,985
Accretable yield recognized on purchased loans(1)	10,169			15,056
Total impact to interest income	$	10,771		$	18,041
Impact to total loan yield	0.21		%	0.39		%
Impact to net interest margin	0.18		%	0.33		%

(1)

Includes additional interest income recognized in connection with the acceleration of paydowns and payoffs from purchased loans of $3,919 and $8,030 for the six months ended June 30, 2020 and 2019, respectively. This additional interest income increased total loan yield by 8 basis points and 17 basis points for the same periods, respectively, while increasing net interest margin by 6 basis points and 15 basis points for the same periods, respectively.

For the second quarter of 2020, the cost of total deposits was 49 basis points, as compared to 72 basis points for the first quarter of 2020 and 83 basis points for the second quarter of 2019. The cost of total deposits was 60 basis points for the first six months of 2020, as compared to 81 basis points for the same period in 2019. The tables below present, 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
	June 30,			March 31,			June 30,			June 30,			March 31,			June 30,
	2020			2020			2019			2020			2020			2019
Noninterest-bearing demand	27.80	%		23.19	%		22.82	%		—	%		—	%		—	%
Interest-bearing demand	41.64			44.29			45.12			0.43			0.75			0.89
Savings	6.04			6.11			6.14			0.09			0.15			0.20
Time deposits	16.44			18.98			22.56			1.62			1.71			1.72
Borrowed funds	8.08			7.43			3.36			1.73			2.46			4.61
Total deposits and borrowed funds	100.00	%		100.00	%		100.00	%		0.59	%		0.85	%		0.96	%

 

	Percentage of Total Average Deposits and Borrowed Funds						Cost of Funds
	Six Months Ending						Six Months Ending
	June 30,			June 30,			June 30,			June 30,
	2020			2019			2020			2019
Noninterest-bearing demand	25.62	%		22.56	%		—	%		—	%
Interest-bearing demand	42.89			45.36			0.59			0.87
Savings	6.07			6.07			0.12			0.20
Time deposits	17.64			22.60			1.66			1.66
Borrowed funds	7.78			3.41			2.06			4.64
Total deposits and borrowed funds	100.00	%		100.00	%		0.71	%		0.94	%

Noninterest income for the second quarter of 2020 was $64.2 million, as compared to $37.6 million for the first quarter of 2020 and $42.0 million for the second quarter of 2019. Noninterest income for the first six months of 2020 was $101.7 million, as compared to $77.8 million for the same period in 2019. Service charges on deposit accounts decreased quarter over quarter due to a decrease in overdraft fees as a result of increased customer liquidity and a decrease in consumer spending due to shutdowns throughout the Company's footprint. 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 is reflected in the reduction in fees and commissions on loans and deposits in the first six months of 2020 as compared to the first six months of 2019. Mortgage banking income continued to be a strong source of noninterest income for the Company with mortgage production during the second quarter of 2020 of approximately $1.67 billion and year-to-date production of $3.57 billion. Mortgage banking income was offset by a negative MSR valuation adjustment in both the first and second quarter of 2020. The following tables present the components of mortgage banking income for the periods presented (in thousands):

	Three Months Ended
	June 30, 2020			March 31, 2020			June 30, 2019
Gain on sales of loans, net	$	46,560		$	21,782		$	12,901
Fees, net	5,309			2,919			2,945
Mortgage servicing income, net	(1,428)			405			774
MSR valuation adjustment	(4,951)			(9,571)			—
Mortgage banking income, net	$	45,490		$	15,535		$	16,620

 

	Six Months Ended
	June 30, 2020			June 30, 2019
Gain on sales of loans, net	$	68,342		$	20,789
Fees, net	8,228			4,638
Mortgage servicing income, net	(1,023)			1,594
MSR valuation adjustment	(14,522)			—
Mortgage banking income, net	$	61,025		$	27,021

Noninterest expense was $118.3 million for the second quarter of 2020, as compared to $115.0 million for the first quarter of 2020 and $93.3 million for the second quarter of 2019. Noninterest expense was $233.3 million for the first six months of 2020, as compared to $182.1 million for the same period in 2019. Salaries and benefits expense was $79.4 million for the second quarter of 2020, which represents an increase of $6.2 million from the previous quarter. Compensation related to the continued elevated mortgage production during the quarter increased $3.2 million dollars on a linked quarter basis. In addition, during the quarter the Company recognized approximately $5.8 million in expense related to elevated overtime and other accruals for employee benefits provided in response to the COVID-19 pandemic. The Company recorded $2.6 million provision for unfunded commitments in other noninterest expense in the second quarter of 2020, as compared to a $3.4 million provision for unfunded commitments in the first quarter of 2020.

Asset Quality Metrics
At June 30, 2020, the Company's credit quality metrics remained strong.  During the first quarter of 2020, in response to the potential economic impact of COVID-19 the Company proactively identified customers in potentially high-risk industries. The Company placed heightened attention on borrowers in the hospitality (such as hotel/motel), restaurant, entertainment and retail trade (the Company does not have material exposure to the energy industry). The Company is continuing to monitor all asset categories given that any category or borrower could be negatively impacted by the pandemic. To provide necessary relief to the Company's borrowers – both consumer and commercial clients – the Company established loan deferral programs allowing qualified clients to defer principal and interest payments for up to 90 days. As of June 30, 2020, approximately 21.5% of the Company's loan portfolio excluding PPP loans was in deferral. The deferral percentage decreased to approximately 13.5% as of July 24, 2020.

The Company's credit quality in future quarters will potentially be impacted by both external and internal factors.  External factors outside the Company's control could include items such as federal, state and local government measures, "shelter-in-place" orders, economic impact of government programs and future spread of COVID-19.  Internal factors that will potentially impact credit quality include items such as the Company's loan deferral programs, involvement in government offered programs and the related financial impact of these programs. The impact of each of these items are unknown at this time and could materially and adversely impact future credit quality.

The table below shows nonperforming assets, which includes nonperforming loans (loans 90 days or more past due and nonaccrual loans) and other real estate owned, as well as early stage delinquencies (loans 30-89 days past due) for the periods presented (in thousands). 

	June 30, 2020									December 31, 2019
	Non Purchased			Purchased			Total			Non Purchased			Purchased			Total
Nonaccrual loans	$	16,591		$	21,361		$	37,952		$	21,509		$	7,038		$	28,547
Loans 90 days past due or more	3,993			2,158			6,151			3,458			4,317			7,775
Nonperforming loans	$	20,584		$	23,519		$	44,103		$	24,967		$	11,355		$	36,322
Other real estate owned	4,694			4,431			9,125			2,762			5,248			8,010
Nonperforming assets	$	25,278		$	27,950		$	53,228		$	27,729		$	16,603		$	44,332
Nonperforming loans/total loans							0.40		%							0.37		%
Nonperforming loans/total loans excluding PPP loans							0.45		%							—
Nonperforming assets/total assets							0.36		%							0.33		%
Nonperforming assets/total assets excluding PPP loans							0.39		%							—
Loans 30-89 days past due	$	6,586		$	3,089		$	9,675		$	22,781		$	14,887		$	37,668
Loans 30-89 days past due/total loans							0.09		%							0.39		%

The implementation of CECL on January 1, 2020, which required purchased credit deteriorated loans to be classified as nonaccrual based on performance, contributed approximately $5.3 million as of June 30, 2020 to the increase in purchased nonaccrual loans.

The table below shows the allowance transition from the former incurred loss allowance model at December 31, 2019 through the day one transition to CECL on January 1, 2020 and the subsequent reserve build-up through the first half of 2020 and the ending allowance under the CECL model at June 30, 2020 (in thousands).

	December 31, 2019			January 1, 2020			March 31, 2020			June 30, 2020
	Incurred Loss Model			CECL Model  Day 1			CECL Model
Allowance for credit losses	$	52,162		$	94,647		$	120,185		$	145,387
Reserve for unfunded commitments	946			11,336			14,735			17,335
Total reserves	$	53,108		$	105,983		$	134,920		$	162,722
Allowance for credit losses/total loans	0.54		%	0.98		%	1.23		%	1.32		%
Allowance for credit losses/total loans excluding PPP loans	—			—			—			1.50		%
Reserve for unfunded commitments/total unfunded commitments	0.04		%	0.47		%	0.60		%	0.66		%

The Company recorded a provision for credit losses of $26.9 million and a reserve for unfunded commitments, which is recorded in other noninterest expense, of $2.6 million for the second quarter of 2020. Net loan charge-offs were $1.7 million, or 0.06% of average loans held for investment on an annualized basis. The continued elevated provision is driven by qualitative factors related to the uncertainty concerning the COVID-19 pandemic, with forecasted negative GDP growth and high unemployment rates throughout 2020 and into 2021, and a potential prolonged economic recovery period.

The provision for credit losses recorded during the second quarter of 2019 was $900 thousand with net charge-offs of $676 thousand, or 0.03% of average loans held for sale on an annualized basis. The Company's coverage ratio, or the allowance for credit losses to nonperforming loans, was 329.65% as of June 30, 2020, as compared to 240.19% as of March 31, 2020 and 143.61% as of December 31, 2019.

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, July 28, 2020.

The webcast can be accessed through Renasant's investor relations website at www.renasant.com or https://services.choruscall.com/links/rnst200722.html. To access the conference via telephone, dial 1-877-513-1143 in the United States and request the Renasant Corporation 2020 Second 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 10146378 or by dialing 1-412-317-0088 internationally and entering the same conference number. Telephone replay access is available until August 5, 2020.

ABOUT RENASANT CORPORATION:
Renasant Corporation is the parent of Renasant Bank, a 116-year-old financial services institution. Renasant has assets of approximately $14.9 billion and operates more than 200 banking, mortgage, wealth management and insurance offices in Mississippi, Tennessee, Alabama, Florida and Georgia.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:

This press release may contain, or incorporate by reference, statements about Renasant Corporation that 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.  Statements preceded by, followed by or that otherwise include the words "believes," "expects," "projects," "anticipates," "intends," "estimates," "plans," "potential," "possible," "may increase," "may fluctuate," "will likely result," and similar expressions, or future or conditional verbs such as "will," "should," "would" and "could," are generally forward-looking in nature and not historical facts. Forward-looking statements include information about the Company's future financial performance, business strategy, projected plans and objectives and are based on the current beliefs and expectations of management.  The Company's management believes these forward-looking statements are reasonable, but they are all inherently subject to significant business, economic and competitive risks and uncertainties, many of which are beyond the Company's control.  In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.  Actual results may differ from those indicated or implied in the forward-looking statements, and such differences may be material.  Prospective investors are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties and, accordingly, investors should not place undue reliance on these forward-looking statements, which speak only as of the date they are made.  

Currently, the most important factor that could cause the Company's actual results to differ materially from those in forward-looking statements is the continued impact of the COVID-19 pandemic and related governmental measures to respond to the pandemic on the United States economy and the economies of the markets in which the Company operates.  In this press release, the Company has addressed the historical impact of the pandemic on the operations of the Company and set forth certain expectations regarding the COVID-19 pandemic's future impact on the Company's business, financial condition, results of operations, liquidity, asset quality, cash flows and prospects.  The Company believes that its statements regarding future events and conditions in light of the COVID-19 pandemic are reasonable, but these statements are based on assumptions regarding, among other things, how long the pandemic will continue, the duration and extent of the governmental measures implemented to contain the pandemic and ameliorate its impact on businesses and individuals throughout the United States, and the impact of the pandemic and the government's virus containment measures on national and local economies, all of which are out of the Company's control.  If the Company's assumptions underlying its statements about future events prove to be incorrect, the Company's business, financial condition, results of operations, liquidity, asset quality, cash flows and prospects may be materially different from what is presented in the Company's forward-looking statements.

Important factors other than the COVID-19 pandemic currently known to management that could cause actual results to differ materially from those in forward-looking statements include the following: (i) the Company's ability to efficiently integrate acquisitions into its operations, retain the customers of these businesses, grow the acquired operations and realize the cost savings expected from an acquisition to the extent and in the timeframe anticipated by management; (ii) the effect of economic conditions and interest rates on a national, regional or international basis; (iii) timing and success of the implementation of changes in operations to achieve enhanced earnings or effect cost savings; (iv) competitive pressures in the consumer finance, commercial finance, insurance, financial services, asset management, retail banking, mortgage lending and auto lending industries; (v) the financial resources of, and products available from, competitors; (vi) changes in laws and regulations as well as changes in accounting standards, such as the adoption of the CECL model as of January 1, 2020; (vii) changes in policy by regulatory agencies; (viii) changes in the securities and foreign exchange markets; (ix) the Company's potential growth, including its entrance or expansion into new markets, and the need for sufficient capital to support that growth; (x) changes in the quality or composition of the Company's loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers; (xi) an insufficient allowance for credit losses as a result of inaccurate assumptions; (xii) general economic, market or business conditions, including the impact of inflation; (xiii) changes in demand for loan products and financial services; (xiv) concentration of credit exposure; (xv) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships; (xvi) increased cybersecurity risk, including potential network breaches, business disruptions or financial losses; (xvii) natural disasters, epidemics and other catastrophic events in the Company's geographic area; (xviii) the impact, extent and timing of technological changes; and (xix) other circumstances, many of which are beyond management's control.  The COVID-19 pandemic has exacerbated, and is likely to continue to exacerbate, the impact of any of these factors on the Company.  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 undertakes no obligation, and specifically disclaims any obligation, to update or revise forward-looking statements, whether as a result of new information or to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, except as required by federal securities laws.

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, COVID-19 related expenses, 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. With respect to COVID-19 related expenses in particular, management added these expenses as a charge to exclude when calculating non-GAAP financial measures because the expenses included within this line item (as discussed earlier in this release) were readily quantifiable and possess the same characteristics with respect to management's inability to accurately predict the timing or amount thereof as the other charges excluded when calculating non-GAAP financial measures. 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 and COVID-19 related charges 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 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.

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
	[phone]		[phone]
	[e-mail]		[e-mail]

 

RENASANT CORPORATION
(Unaudited)
(Dollars in thousands, except per share data)
																														Q2 2020-			For The Six Months Ending
				2020										2019																Q2 2019			June 30,
					Second				First					Fourth				Third				Second				First				Percent											Percent
					Quarter				Quarter					Quarter				Quarter				Quarter				Quarter				Variance			2020				2019				Variance
Statement of earnings
Interest income - taxable equivalent basis					$	125,630			$	131,887				$	135,119			$	135,927			$	139,285			$	138,578			(9.80)	%		$	257,517			$	277,863			(7.32)	%
Interest income					$	123,955			$	130,173				$	133,148			$	134,476			$	137,862			$	137,094			(10.09)			$	254,128			$	274,956			(7.58)
Interest expense					18,173				23,571					24,263				25,651				25,062				23,947				(27.49)			41,744				49,009				(14.82)
	Net interest income				105,782				106,602					108,885				108,825				112,800				113,147				(6.22)			212,384				225,947				(6.00)
Provision for loan losses					26,900				26,350					2,950				1,700				900				1,500				2,888.89			53,250				2,400				2,118.75
	Net interest income after provision				78,882				80,252					105,935				107,125				111,900				111,647				(29.51)			159,134				223,547				(28.81)
Service charges on deposit accounts					6,832				9,070					9,273				8,992				8,605				9,102				(20.60)			15,902				17,707				(10.19)
Fees and commissions on loans and deposits					2,971				3,054					2,822				3,090				7,047				6,471				(57.84)			6,025				13,518				(55.43)
Insurance commissions and fees					2,125				1,991					2,105				2,508				2,190				2,116				(2.97)			4,116				4,306				(4.41)
Wealth management revenue					3,824				4,002					3,920				3,588				3,601				3,324				6.19			7,826				6,925				13.01
Securities gains (losses)					31				—					—				343				-8				13				(487.50)			31				5				520.00
Mortgage banking income					45,490				15,535					15,165				15,710				16,620				10,401				173.71			61,025				27,021				125.84
Other					2,897				3,918					4,171				3,722				3,905				4,458				(25.81)			6,815				8,363				(18.51)
	Total noninterest income				64,170				37,570					37,456				37,953				41,960				35,885				52.93			101,740				77,845				30.70
Salaries and employee benefits					79,361				73,189					67,684				65,425				60,325				57,350				31.56			152,550				117,675				29.64
Data processing					5,047				5,006					5,095				4,980				4,698				4,906				7.43			10,053				9,604				4.68
Occupancy and equipment					13,511				14,120					13,231				12,943				11,544				11,835				17.04			27,631				23,379				18.19
Other real estate					620				418					339				418				252				1,004				146.03			1,038				1,256				(17.36)
Amortization of intangibles					1,834				1,895					1,946				1,996				2,053				2,110				(10.67)			3,729				4,163				(10.43)
Merger and conversion related expenses					—				—					76				24				179				—				(100.00)			—				179				—
Debt extinguishment penalty					90				—					—				54				—				—				100.00			90				—				100.00
Other					17,822				20,413					7,181				10,660				14,239				11,627				25.16			38,235				25,866				47.82
	Total noninterest expense				118,285				115,041					95,552				96,500				93,290				88,832				26.79			233,326				182,122				28.12
Income before income taxes					24,767				2,781					47,839				48,578				60,570				58,700				(59.11)			27,548				119,270				(53.07)
Income taxes					4,637				773					9,424				11,132				13,945				13,590				(66.75)			5,410				27,535				(80.35)
	Net income				$	20,130			$	2,008				$	38,415			$	37,446			$	46,625			$	45,110			(56.83)			$	22,138			$	91,735			(28.97)
Basic earnings per share					$	0.36			$	0.04				$	0.67			$	0.65			$	0.80			$	0.77			(55.00)			$	0.39			$	1.57			(75.16)
Diluted earnings per share					0.36				0.04					0.67				0.64				0.80				0.77				(55.00)			0.39				1.56				(75.00)
Average basic shares outstanding					56,165,452				56,534,816					57,153,160				58,003,215				58,461,024				58,585,517				(3.93)			56,350,134				58,523,007				(3.71)
Average diluted shares outstanding					56,325,476				56,706,289					57,391,876				58,192,419				58,618,976				58,730,535				(3.91)			56,514,599				58,669,056				(3.67)
Common shares outstanding					56,181,962				56,141,018					56,855,002				57,455,306				58,297,670				58,633,630				(3.63)			56,181,962				58,297,670				(3.63)
Cash dividend per common share					$	0.22			$	0.22				$	0.22			$	0.22			$	0.22			$	0.21			—			$	0.44			$	0.43			2.33
Performance ratios
Return on avg shareholders' equity					3.85		%		0.38		%			7.15		%		6.97		%		8.90		%		8.86		%					2.12		%		8.88		%
Return on avg tangible s/h's equity (non-GAAP) (1)					7.72		%		1.20		%			13.75		%		13.38		%		17.15		%		17.41		%					4.49		%		17.28		%
Return on avg assets					0.55		%		0.06		%			1.16		%		1.16		%		1.47		%		1.44		%					0.32		%		1.45		%
Return on avg tangible assets (non-GAAP)(2)					0.63		%		0.11		%			1.30		%		1.30		%		1.64		%		1.61		%					0.39		%		1.63		%
Net interest margin (FTE)					3.38		%		3.75		%			3.90		%		3.98		%		4.19		%		4.27		%					3.56		%		4.23		%
Yield on earning assets (FTE)					3.95		%		4.57		%			4.75		%		4.91		%		5.11		%		5.16		%					4.25		%		5.13		%
Cost of funding					0.59		%		0.85		%			0.89		%		0.97		%		0.96		%		0.92		%					0.71		%		0.94		%
Average earning assets to average assets					86.88		%		86.17		%			85.71		%		85.58		%		85.72		%		85.58		%					86.54		%		85.65		%
Average loans to average deposits					93.35		%		93.83		%			92.43		%		89.13		%		89.13		%		89.33		%					93.58		%		89.23		%
Noninterest income (less securities gains/
	losses) to average assets				1.75		%		1.12		%			1.13		%		1.16		%		1.32		%		1.14		%					1.45		%		1.23		%
Noninterest expense (less debt prepayment penalties/
	penalties/merger-related expenses) to
	average assets				3.23		%		3.43		%			2.88		%		2.98		%		2.93		%		2.83		%					3.33		%		2.88		%
Net overhead ratio					1.48		%		2.31		%			1.75		%		1.82		%		1.61		%		1.69		%					1.88		%		1.65		%
Efficiency ratio (FTE)					68.92		%		78.86		%			64.43		%		65.10		%		59.73		%		59.02		%					73.49		%		59.38		%
Adjusted efficiency ratio (FTE) (non-GAAP) (4)					60.89		%		68.73		%			63.62		%		62.53		%		58.30		%		57.62		%					64.56		%		57.97		%
RENASANT CORPORATION
(Unaudited)
(Dollars in thousands, except per share data)
																														Q2 2020 -			As of
				2020										2019																Q2 2019			June 30,
					Second				First					Fourth				Third				Second				First				Percent											Percent
					Quarter				Quarter					Quarter				Quarter				Quarter				Quarter				Variance			2020				2019				Variance
Average Balances
Total assets					$	14,706,027			$	13,472,550				$	13,157,843			$	12,846,131			$	12,764,669			$	12,730,939			15.21	%		$	14,089,289			$	12,747,897			10.52	%
Earning assets					12,776,643				11,609,477					11,277,000				10,993,645				10,942,492				10,895,205				16.76			12,193,058				10,918,979				11.67
Securities					1,295,539				1,292,875					1,234,718				1,227,678				1,262,271				1,253,224				2.64			1,294,207				1,257,772				2.90
Loans held for sale					340,582				336,829					350,783				385,437				353,103				345,264				(3.55)			338,706				349,205				(3.01)
Loans, net of unearned					10,616,147				9,687,285					9,457,658				9,109,252				9,043,788				9,059,802				17.39			10,151,716				9,051,751				12.15
Intangibles					974,237				975,933					977,506				975,306				974,628				976,820				(0.04)			975,085				975,718				(0.06)
Noninterest-bearing deposits					3,439,634				2,586,963					2,611,265				2,500,810				2,395,899				2,342,406				43.56			3,013,298				2,369,300				27.18
Interest-bearing deposits					7,933,035				7,737,615					7,620,602				7,719,510				7,750,986				7,799,892				2.35			7,835,324				7,775,304				0.77
Total deposits					11,372,669				10,324,578					10,231,867				10,220,320				10,146,885				10,142,298				12.08			10,848,622				10,144,604				6.94
Borrowed funds					1,000,789				829,320					596,101				308,931				354,234				363,140				182.52			915,054				358,662				155.13
Shareholders' equity					2,101,092				2,105,143					2,131,342				2,131,537				2,102,093				2,065,370				(0.05)			2,103,118				2,083,833				0.93
																														Q2 2020 -			As of
				2020										2019																Q4 2019			June 30,
					Second				First					Fourth				Third				Second				First				Percent											Percent
					Quarter				Quarter					Quarter				Quarter				Quarter				Quarter				Variance			2020				2019				Variance
Balances at period end
Total assets					$	14,897,207			$	13,890,550				$	13,400,618			$	13,039,674			$	12,892,653			$	12,862,395			11.17	%		$	14,897,207			$	12,892,653			15.55	%
Earning assets					13,041,846				11,970,492					11,522,388				11,145,052				11,064,957				11,015,535				13.19			13,041,846				11,064,957				17.87
Securities					1,303,494				1,359,129					1,290,613				1,238,577				1,268,280				1,255,353				1.00			1,303,494				1,268,280				2.78
Loans held for sale					339,747				448,797					318,272				392,448				461,681				318,563				6.75			339,747				461,681				(26.41)
Non purchased loans					9,206,101				7,802,404					7,587,974				7,031,818				6,704,288				6,565,599				21.32			9,206,101				6,704,288				37.32
Purchased loans					1,791,203				1,966,973					2,101,664				2,281,966				2,350,366				2,522,694				(14.77)			1,791,203				2,350,366				(23.79)
	Total loans				10,997,304				9,769,377					9,689,638				9,313,784				9,054,654				9,088,293				13.50			10,997,304				9,054,654				21.45
Intangibles					973,214				975,048					976,943				978,390				973,673				975,726				(0.38)			973,214				973,673				(0.05)
Noninterest-bearing deposits					3,740,296				2,642,059					2,551,770				2,607,056				2,408,984				2,366,223				46.58			3,740,296				2,408,984				55.26
Interest-bearing deposits					8,106,062				7,770,367					7,661,398				7,678,980				7,781,077				7,902,689				5.80			8,106,062				7,781,077				4.18
	Total deposits				11,846,358				10,412,426					10,213,168				10,286,036				10,190,061				10,268,912				15.99			11,846,358				10,190,061				16.25
Borrowed funds					718,490				1,169,631					865,598				433,705				401,934				350,859				(16.99)			718,490				401,934				78.76
Shareholders' equity					2,082,946				2,070,512					2,125,689				2,119,659				2,119,696				2,088,877				(2.01)			2,082,946				2,119,696				(1.73)
Market value per common share					24.90				21.84					35.42				35.01				35.94				33.85				(29.70)			24.90				35.94				(30.72)
Book value per common share					37.07				36.88					37.39				36.89				36.36				35.63				(0.85)			37.07				36.36				1.95
Tangible book value per common share					19.75				19.51					20.20				19.86				19.66				18.98				(2.25)			19.75				19.66				0.46
Shareholders' equity to assets (actual)					13.98		%		14.91		%			15.86		%		16.26		%		16.44		%		16.24		%					13.98		%		16.44		%
Tangible capital ratio (non-GAAP)(3)					7.97		%		8.48		%			9.25		%		9.46		%		9.62		%		9.36		%					7.97		%		9.62		%
Leverage ratio					9.12		%		9.90		%			10.37		%		10.56		%		10.65		%		10.44		%					9.12		%		10.65		%
Common equity tier 1 capital ratio					10.69		%		10.63		%			11.12		%		11.36		%		11.64		%		11.49		%					10.69		%		11.64		%
Tier 1 risk-based capital ratio					11.69		%		11.63		%			12.14		%		12.40		%		12.69		%		12.55		%					11.69		%		12.69		%
Total risk-based capital ratio					13.72		%		13.44		%			13.78		%		14.07		%		14.62		%		14.57		%					13.72		%		14.62		%
RENASANT CORPORATION
(Unaudited)
(Dollars in thousands, except per share data)
																														Q2 2020 -			As of
				2020										2019																Q4 2019			June 30,
					Second				First					Fourth				Third				Second				First				Percent											Percent
					Quarter				Quarter					Quarter				Quarter				Quarter				Quarter				Variance			2020				2019				Variance
Non purchased loans
Commercial, financial, agricultural					$	1,134,965			$	1,144,004				$	1,052,353			$	988,867			$	930,598			$	921,081			7.85	%		$	1,134,965			$	930,598			21.96	%
SBA Paycheck  Protection Program					1,281,278				—					—				—				—				—				100.00			1,281,278				—				100.00
Lease financing					80,779				84,679					81,875				69,953				59,158				58,651				(1.34)			80,779				59,158				36.55
Real estate- construction					756,872				745,066					774,901				764,589				716,129				651,119				(2.33)			756,872				716,129				5.69
Real estate - 1-4 family mortgages					2,342,987				2,356,627					2,350,126				2,235,908				2,160,617				2,114,908				(0.30)			2,342,987				2,160,617				8.44
Real estate - commercial mortgages					3,400,718				3,242,172					3,128,876				2,809,470				2,741,402				2,726,186				8.69			3,400,718				2,741,402				24.05
Installment loans to individuals					208,502				229,856					199,843				163,031				96,384				93,654				4.33			208,502				96,384				116.32
Loans, net of unearned					$	9,206,101			$	7,802,404				$	7,587,974			$	7,031,818			$	6,704,288			$	6,565,599			21.32			$	9,206,101			$	6,704,288			37.32
Purchased loans
Commercial, financial, agricultural					$	225,355			$	280,572				$	315,619			$	339,693			$	374,478			$	387,376			(28.60)			$	225,355			$	374,478			(39.82)
Real estate- construction					34,236				42,829					51,582				52,106				65,402				89,954				(33.63)			34,236				65,402				(47.65)
Real estate - 1-4 family mortgages					445,526				489,674					516,487				561,725				604,855				654,265				(13.74)			445,526				604,855				(26.34)
Real estate - commercial mortgages					1,010,035				1,066,536					1,115,389				1,212,905				1,276,567				1,357,446				(9.45)			1,010,035				1,276,567				(20.88)
Installment loans to individuals					76,051				87,362					102,587				115,537				29,064				33,653				(25.87)			76,051				29,064				161.67
Loans, net of unearned					$	1,791,203			$	1,966,973				$	2,101,664			$	2,281,966			$	2,350,366			$	2,522,694			(14.77)			$	1,791,203			$	2,350,366			(23.79)
Asset quality data
Non purchased assets
Nonaccrual loans					$	16,591			$	21,384				$	21,509			$	15,733			$	14,268			$	12,507			(22.86)			$	16,591			$	14,268			16.28
Loans 90 past due or more					3,993				4,459					3,458				7,325				4,175				1,192				15.47			3,993				4,175				(4.36)
Nonperforming loans					20,584				25,843					24,967				23,058				18,443				13,699				(17.56)			20,584				18,443				11.61
Other real estate owned					4,694				3,241					2,762				1,975				3,475				4,223				69.95			4,694				3,475				35.08
Nonperforming assets					$	25,278			$	29,084				$	27,729			$	25,033			$	21,918			$	17,922			(8.84)			$	25,278			$	21,918			15.33
Purchased assets
Nonaccrual loans					$	21,361			$	19,090				$	7,038			$	6,123			$	7,250			$	7,828			203.51			$	21,361			$	7,250			194.63
Loans 90 past due or more					2,158				5,104					4,317				7,034				7,687				5,436				(50.01)			2,158				7,687				(71.93)
Nonperforming loans					23,519				24,194					11,355				13,157				14,937				13,264				107.12			23,519				14,937				57.45
Other real estate owned					4,431				5,430					5,248				6,216				5,258				5,932				(15.57)			4,431				5,258				(15.73)
Nonperforming assets					$	27,950			$	29,624				$	16,603			$	19,373			$	20,195			$	19,196			68.34			$	27,950			$	20,195			38.40
Net loan charge-offs (recoveries)					$	1,698			$	811				$	1,602			$	945			$	676			$	691			5.99			$	2,509			$	1,367			83.54
Allowance for loan losses					$	145,387			$	120,185				$	52,162			$	50,814			$	50,059			$	49,835			178.72			$	145,387			$	50,059			190.43
Annualized net loan charge-offs / average loans					0.06		%		0.03				%	0.07		%		0.04		%		0.03		%		0.03		%					0.05		%		0.03		%
Nonperforming loans / total loans*					0.40		%		0.51				%	0.37		%		0.39		%		0.37		%		0.30		%					0.40		%		0.37		%
Nonperforming assets / total assets*					0.36		%		0.42				%	0.33		%		0.34		%		0.33		%		0.29		%					0.36		%		0.33		%
Allowance for loan losses / total loans*					1.32		%		1.23				%	0.54		%		0.55		%		0.55		%		0.55		%					1.32		%		0.55		%
Allowance for loan losses / nonperforming loans*					329.65		%		240.19				%	143.61		%		140.31		%		149.97		%		184.83		%					329.65		%		149.97		%
Nonperforming loans / total loans**					0.22		%		0.33				%	0.33		%		0.33		%		0.28		%		0.21		%					0.22		%		0.28		%
Nonperforming assets / total assets**					0.17		%		0.21				%	0.21		%		0.19		%		0.17		%		0.14		%					0.17		%		0.17		%

*Based on all assets (includes purchased assets)

**Excludes all purchased assets

 

RENASANT CORPORATION
(Unaudited)
(Dollars in thousands, except per share data)
		Three Months Ending																																	For The Six Months Ending
		June 30, 2020											March 31, 2020											June 30, 2019											June 30, 2020											June 30, 2019
		Average				Interest				Yield/			Average				Interest				Yield/			Average				Interest				Yield/				Average				Interest		Yield/				Average				Interest		Yield/
		Balance				Income/				Rate			Balance				Income/				Rate			Balance				Income/				Rate				Balance				Income/		Rate				Balance				Income/		Rate
						Expense											Expense											Expense												Expense										Expense
Assets
Interest-earning assets:
Loans
Non purchased		$	7,872,371			$	81,836			4.18	%		$	7,654,662			$	88,554			4.65	%		$	6,622,202			$	83,922			5.08	%		$	7,763,516			$	170,390		4.41	%		$	6,538,998			$	165,106		5.09	%
Purchased		1,877,698				26,005				5.57	%		2,032,623				30,187				5.97	%		2,421,586				38,783				6.42	%		1,955,161				56,192			5.78	%		2,512,753				78,968			6.34	%
SBA Paycheck Protection Program		866,078				5,886				2.73	%		—				—				—	%		—				—				—	%		433,039				5,886			2.73	%		—				—			—	%
Total loans		10,616,147				113,727				4.31	%		9,687,285				118,741				4.93	%		9,043,788				122,705				5.44	%		10,151,716				232,468			4.61	%		9,051,751				244,074			5.44	%
Loans held for sale		340,582				2,976				3.51	%		336,829				2,988				3.57	%		353,103				5,191				5.90	%		338,706				5,964			3.54	%		349,205				11,028			6.37	%
Securities:
Taxable(1)		1,031,740				6,386				2.49	%		1,067,274				7,289				2.75	%		1,084,736				7,699				2.85	%		1,049,507				13,675			2.62	%		1,073,422				15,591			2.93	%
Tax-exempt		263,799				2,346				3.58	%		225,601				2,058				3.67	%		177,535				1,860				4.20	%		244,700				4,404			3.62	%		184,350				3,882			4.25	%
Total securities		1,295,539				8,732				2.71	%		1,292,875				9,347				2.91	%		1,262,271				9,559				3.04	%		1,294,207				18,079			2.81	%		1,257,772				19,473			3.12	%
Interest-bearing balances with banks		524,376				195				0.15	%		292,488				811				1.12	%		283,330				1,830				2.59	%		408,432				1,006			0.50	%		260,251				3,288			2.55	%
Total interest-earning assets		12,776,644				125,630				3.95	%		11,609,477				131,887				4.57	%		10,942,492				139,285				5.11	%		12,193,061				257,517			4.25	%		10,918,979				277,863			5.13	%
Cash and due from banks		214,079											186,317											178,606											200,198										185,198
Intangible assets		974,237											975,933											974,628											975,085										975,718
Other assets		741,067											700,823											668,943											720,945										668,002
Total assets		$	14,706,027										$	13,472,550										$	12,764,669										$	14,089,289									$	12,747,897
Liabilities and shareholders' equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand(2)		$	5,151,713			$	5,524			0.43	%		$	4,939,757			$	9,253			0.75	%		$	4,737,780			$	10,495			0.89	%		$	5,045,735			$	14,777		0.59	%		$	4,763,837			$	20,569		0.87	%
Savings deposits		747,173				173				0.09	%		681,182				252				0.15	%		644,540				329				0.20	%		714,177				426			0.12	%		637,644				621			0.20	%
Time deposits		2,034,149				8,174				1.62	%		2,116,676				8,989				1.71	%		2,368,666				10,167				1.72	%		2,075,412				17,163			1.66	%		2,373,823				19,573			1.66	%
Total interest-bearing deposits		7,933,035				13,871				0.70	%		7,737,615				18,494				0.96	%		7,750,986				20,991				1.09	%		7,835,324				32,366			0.83	%		7,775,304				40,763			1.06	%
Borrowed funds		1,000,789				4,302				1.73	%		829,320				5,077				2.46	%		354,234				4,071				4.61	%		915,054				9,378			2.06	%		358,662				8,246			4.64	%
Total interest-bearing liabilities		8,933,824				18,173				0.82	%		8,566,935				23,571				1.11	%		8,105,220				25,062				1.24	%		8,750,378				41,744			0.96	%		8,133,966				49,009			1.22	%
Noninterest-bearing deposits		3,439,634											2,586,963											2,395,899											3,013,298										2,369,300
Other liabilities		231,477											213,509											161,457											222,495										160,798
Shareholders' equity		2,101,092											2,105,143											2,102,093											2,103,118										2,083,833
Total liabilities and shareholders' equity		$	14,706,027										$	13,472,550										$	12,764,669										$	14,089,289									$	12,747,897
Net interest income/ net interest margin						$	107,457			3.38	%						$	108,316			3.75	%						$	114,223			4.19	%						$	215,773		3.56	%						$	228,854		4.23	%
Cost of funding										0.59	%										0.85	%										0.96	%									0.71	%									0.94	%
Cost of total deposits										0.49	%										0.72	%										0.83	%									0.60	%									0.81	%

(1)U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which we operate.

(2)Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.

 

RENASANT CORPORATION
(Unaudited)
(Dollars in thousands, except per share data)
				RECONCILIATION OF GAAP TO NON-GAAP
																															Six Months Ended
				2020									2019																		June 30,
					Second				First				Fourth				Third				Second				First
					Quarter				Quarter				Quarter				Quarter				Quarter				Quarter						2020				2019
Net income (GAAP)					$	20,130			$	2,008			$	38,415			$	37,446			$	46,625			$	45,110					$	22,138			$	91,735
	Amortization of intangibles				1,834				1,895				1,946				1,996				2,053				2,110						3,729				4,163
	Tax effect of adjustment noted above (A)				(335)				(527)				(383)				(457)				(473)				(488)						(690)				(961)
Tangible net income (non-GAAP)					$	21,629			$	3,376			$	39,978			$	38,985			$	48,205			$	46,732					$	25,177			$	94,937
Net income (GAAP)					$	20,130			$	2,008			$	38,415			$	37,446			$	46,625			$	45,110					$	22,138			$	91,735
	Merger & conversion expenses				—				—				76				24				179				—						—				179
	Debt prepayment penalties				90				—				—				54				—				—						90				—
	MSR valuation adjustment				4,951				9,571				(1,296)				3,132				—				—						14,522				—
	COVID-19 related expenses				6,257				2,903				—				—				—				—						9,160				—
	Tax effect of adjustment noted above (A)				(2,065)				(3,467)				241				(736)				(41)				—						(4,398)				(41)
Net income with exclusions (non-GAAP)					$	29,363			$	11,015			$	37,436			$	39,920			$	46,763			$	45,110					$	41,512			$	91,873
Average shareholders' equity (GAAP)					$	2,101,092			$	2,105,143			$	2,131,342			$	2,131,537			$	2,102,093			$	2,065,370					$	2,103,118			$	2,083,833
	Intangibles				974,237				975,933				977,506				975,306				974,628				976,820						975,085				975,718
Average tangible s/h's equity (non-GAAP)					$	1,126,855			$	1,129,210			$	1,153,836			$	1,156,231			$	1,127,465			$	1,088,550					$	1,128,033			$	1,108,115
Average total assets (GAAP)					$	14,706,027			$	13,472,550			$	13,157,843			$	12,846,131			$	12,764,669			$	12,730,939					$	14,089,289			$	12,747,897
	Intangibles				974,237				975,933				977,506				975,306				974,628				976,820						975,085				975,718
Average tangible assets (non-GAAP)					$	13,731,790			$	12,496,617			$	12,180,337			$	11,870,825			$	11,790,041			$	11,754,119					$	13,114,204			$	11,772,179
Actual shareholders' equity (GAAP)					$	2,082,946			$	2,070,512			$	2,125,689			$	2,119,659			$	2,119,696			$	2,088,877					$	2,082,946			$	2,119,696
	Intangibles				973,214				975,048				976,943				978,390				973,673				975,726						973,214				973,673
Actual tangible s/h's equity (non-GAAP)					$	1,109,732			$	1,095,464			$	1,148,746			$	1,141,269			$	1,146,023			$	1,113,151					$	1,109,732			$	1,146,023
Actual total assets (GAAP)					$	14,897,207			$	13,890,550			$	13,400,618			$	13,039,674			$	12,892,653			$	12,862,395					$	14,897,207			$	12,892,653
	Intangibles				973,214				975,048				976,943				978,390				973,673				975,726						973,214				973,673
Actual tangible assets (non-GAAP)					$	13,923,993			$	12,915,502			$	12,423,675			$	12,061,284			$	11,918,980			$	11,886,669					$	13,923,993			$	11,918,980

(A) Tax effect is calculated based on respective periods effective tax rate.

 

RENASANT CORPORATION
(Unaudited)
(Dollars in thousands, except per share data)
				RECONCILIATION OF GAAP TO NON-GAAP
																									Six Months Ended
				2020							2019														June 30,
					Second			First			Fourth			Third			Second			First
					Quarter			Quarter			Quarter			Quarter			Quarter			Quarter					2020			2019
(1) Return on Average Equity
Return on avg s/h's equity (GAAP)					3.85	%		0.38	%		7.15	%		6.97	%		8.90	%		8.86	%				2.12	%		8.88	%
	Effect of adjustment for intangible assets				3.87	%		0.82	%		6.60	%		6.41	%		8.25	%		8.55	%				2.37	%		8.40	%
Return on avg tangible s/h's equity (non-GAAP)					7.72	%		1.20	%		13.75	%		13.38	%		17.15	%		17.41	%				4.49	%		17.28	%
Return on avg s/h's equity (GAAP)					3.85	%		0.38	%		7.15	%		6.97	%		8.90	%		8.86	%				2.12	%		8.88	%
	Effect of exclusions from net income				1.77	%		1.72	%		-0.18	%		0.46	%		0.02	%		—	%				1.85	%		0.01	%
Return on avg s/h's equity with excl. (non-GAAP)					5.62	%		2.10	%		6.97	%		7.43	%		8.92	%		8.86	%				3.97	%		8.89	%
	Effect of adjustment for intangible assets				5.40	%		2.31	%		6.44	%		6.80	%		8.28	%		8.55	%				3.97	%		8.41	%
Return on avg tangible s/h's equity with exclusions (non-GAAP)					11.02	%		4.41	%		13.41	%		14.23	%		17.20	%		17.41	%				7.94	%		17.30	%
(2) Return on Average Assets
Return on avg assets (GAAP)					0.55	%		0.06	%		1.16	%		1.16	%		1.47	%		1.44	%				0.32	%		1.45	%
	Effect of adjustment for intangible assets				0.08	%		0.05	%		0.14	%		0.14	%		0.17	%		0.17	%				0.07	%		0.18	%
Return on avg tangible assets (non-GAAP)					0.63	%		0.11	%		1.30	%		1.30	%		1.64	%		1.61	%				0.39	%		1.63	%
Return on avg assets (GAAP)					0.55	%		0.06	%		1.16	%		1.16	%		1.47	%		1.44	%				0.32	%		1.45	%
	Effect of exclusions from net income				0.25	%		0.27	%		-0.03	%		0.07	%		—	%		—	%				0.27	%		—	%
Return on avg assets with exclusions (non-GAAP)					0.80	%		0.33	%		1.13	%		1.23	%		1.47	%		1.44	%				0.59	%		1.45	%
	Effect of adjustment for intangible assets				0.10	%		0.07	%		0.14	%		0.16	%		0.17	%		0.17	%				0.09	%		0.18	%
Return on avg tangible assets with exclusions (non-GAAP)					0.90	%		0.40	%		1.27	%		1.39	%		1.64	%		1.61	%				0.68	%		1.63	%
(3) Shareholder Equity Ratio
Shareholders' equity to actual assets (GAAP)					13.98	%		14.91	%		15.86	%		16.26	%		16.44	%		16.24	%				13.98	%		16.44	%
	Effect of adjustment for intangible assets				6.01	%		6.43	%		6.61	%		6.80	%		6.82	%		6.88	%				6.01	%		6.82	%
Tangible capital ratio (non-GAAP)					7.97	%		8.48	%		9.25	%		9.46	%		9.62	%		9.36	%				7.97	%		9.62	%

 

RENASANT CORPORATION
(Unaudited)
(Dollars in thousands, except per share data)
																														Six Months Ended
			2020									2019																		June 30,
				Second				First				Fourth				Third				Second				First
				Quarter				Quarter				Quarter				Quarter				Quarter				Quarter						2020				2019
Interest income (FTE)				$	125,630			$	131,887			$	135,119			$	135,927			$	139,285			$	138,578					$	257,517			$	277,863
	Interest expense			18,173				23,571				24,263				25,651				25,062				23,947						41,744				49,009
Net Interest income (FTE)				$	107,457			$	108,316			$	110,856			$	110,276			$	114,223			$	114,631					$	215,773			$	228,854
Total noninterest income				$	64,170			$	37,570			$	37,456			$	37,953			$	41,960			$	35,885					$	101,740			$	77,845
	Securities gains (losses)			31				—				—				343				(8)				13						31				5
	MSR valuation adjustment			(4,951)				(9,571)				1,296				(3,132)				—				—						(14,522)				—
Total adjusted noninterest income				$	69,090			$	47,141			$	36,160			$	40,742			$	41,968			$	35,872					$	116,231			$	77,840
Total noninterest expense				$	118,285			$	115,041			$	95,552			$	96,500			$	93,290			$	88,832					$	233,326			$	182,122
	Amortization of intangibles			1,834				1,895				1,946				1,996				2,053				2,110						3,729				4,163
	Merger-related expenses			—				—				76				24				179				—						—				179
	Debt extinguishment penalty			90				—				—				54				—				—						90				—
	COVID-19 related expenses			6,257				2,903				—				—				—				—						9,160				—
	Provision for unfunded commitments			2,600				3,400				—				—				—				—						6,000				—
Total adjusted noninterest expense				$	107,504			$	106,843			$	93,530			$	94,426			$	91,058			$	86,722					$	214,347			$	177,780
Efficiency Ratio (GAAP)				68.92		%		78.86		%		64.43		%		65.10		%		59.73		%		59.02		%				73.49		%		59.38		%
(4) Adjusted Efficiency Ratio (non-GAAP)				60.89		%		68.73		%		63.62		%		62.53		%		58.30		%		57.62		%				64.56		%		57.97		%

 

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SOURCE Renasant Corporation

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