Renasant Corporation Announces 2011 Fourth Quarter and Year-End Results

TUPELO, Miss., Jan. 17, 2012 /PRNewswire/ -- Renasant Corporation (NASDAQ: RNST) (the "Company") today announced its earnings results for the fourth quarter and year ended December 31, 2011.  For the fourth quarter of 2011, net income was $5,790,000 as compared to $4,721,000 for the fourth quarter of 2010.  Basic and diluted earnings per share (EPS) were $0.23 for the fourth quarter of 2011 as compared to basic and diluted EPS of $0.19 for the fourth quarter of 2010.

Net income for 2011 was $25,632,000 as compared to $31,675,000 for 2010.  Net income for 2010 included a pre-tax acquisition gain of $42,211,000 from the Company's FDIC-assisted acquisition of Crescent Bank of Jasper, Georgia recognized during the third quarter of 2010.  During 2011, the Company recorded a pre-tax acquisition gain of $8,774,000 in connection with its FDIC-assisted acquisition of American Bank and Trust of Roswell, Georgia, which was recognized during the first quarter of the year. 

For 2011, both basic and diluted EPS were $1.02 as compared to basic and diluted EPS of $1.39 and $1.38, respectively, for 2010. 

"We achieved much success during the fourth quarter of 2011 as we experienced net loan growth while continuing to expand our franchise by opening de novo locations in Starkville, Mississippi, and Tuscaloosa and Montgomery, Alabama," commented Renasant Chairman and Chief Executive Officer, E. Robinson McGraw.  "In addition to our market expansions, we continued to experience a decrease in our nonperforming loans and other real estate owned.  Our nonperforming loans not subject to loss-share decreased 35% during the year and represented only 1.56% of total loans at the end of 2011."

Total deposits were $3.412 billion at December 31, 2011, as compared to $3.342 billion at September 30, 2011, and $3.468 billion at December 31, 2010.  The Company continued to improve its deposit mix as noninterest-bearing deposits represented 15.59% of total deposits on December 31, 2011, up from 10.63% of total deposits at December 31, 2010.  As a result of this improvement, the Company's cost of funds declined to 1.11% at December 31, 2011, from 1.16% at September 30, 2011, and 1.74% at December 31, 2010.

Total loans were $2.581 billion at the end of 2011 as compared to $2.565 billion at the end of the third quarter of 2011 and $2.525 billion at the end of 2010.  Loans not covered under FDIC loss-share agreements were $2.242 billion at December 31, 2011, as compared to $2.205 billion at September 30, 2011, and $2.191 billion at December 31, 2010.

"We are pleased to have achieved net loan growth on both an annual and linked quarter basis," stated McGraw.  "We believe that we are well-positioned to continue this trend of growing loans as we take advantage of our recent new hires, entrances into new markets and continued focus on loan opportunities in our existing markets."

Total assets at December 31, 2011, were approximately $4.201 billion as compared to approximately $4.136 billion at September 30, 2011, and $4.297 billion at December 31, 2010.

At December 31, 2011, the Company's capital ratios were in excess of regulatory minimums required to be classified as "well-capitalized."  The Company's tangible common equity ratio was 7.38%, Tier I leverage capital ratio was 9.44%, Tier I risk-based capital ratio was 13.33%, and total risk-based capital ratio was 14.58%. 

Net interest income was $32,495,000 for the fourth quarter of 2011 as compared to $29,855,000 for the fourth quarter of 2010 and $32,864,000 on a linked quarter basis.  Net interest margin was 3.84% for the fourth quarter of 2011 as compared to 3.43% for the fourth quarter of 2010 and 3.92% on a linked quarter basis.

For 2011, net interest margin increased to 3.77% from 3.26% for 2010.  Net interest income increased to $129,077,000 for 2011 from $105,062,000 for 2010. 

"Although margin decreased on a linked quarter basis due primarily to higher than anticipated levels of cash from an increase in deposits and accelerated prepayments on mortgage backed securities, we grew margin by 51 basis points during 2011," said McGraw.  "We expect to see improvement in net interest income with year over year net interest margin remaining stable as we continue to adjust our asset mix by growing loans and changing our funding mix."

For the fourth quarter of 2011, noninterest income was $13,912,000 as compared to $14,553,000 for the fourth quarter of 2010 and $19,613,000 for the third quarter of 2011.  During the third quarter of 2011, noninterest income included a gain of $5,041,000 from the sale of securities. Noninterest income for 2011 was $68,624,000 as compared to $95,915,000 for 2010.  Excluding the aforementioned gains from FDIC-assisted acquisitions, noninterest income was $59,850,000 for 2011 and $53,704,000 for 2010.

Noninterest expense was $33,269,000 for the fourth quarter of 2011 as compared to $32,226,000 for the fourth quarter of 2010 and $38,129,000 on a linked quarter basis.  Noninterest expense for 2011 was $140,676,000 as compared to $123,619,000 for 2010.  The increase in noninterest expense during 2011 was primarily due to costs related to the operations associated with acquisitions and new market expansions, and higher levels of expenses related to other real estate owned. 

At December 31, 2011, total nonperforming loans were $124.1 million and total other real estate owned was $113.2 million.   The loans and other real estate owned acquired in FDIC-assisted transactions are recorded at fair value which includes an estimated impairment.  Furthermore, the loss-share agreements with the FDIC, as well as adjustments to the balances of these acquired assets to record them at fair value, mitigate the impact of further losses on these assets.  The Company's nonperforming loans and other real estate owned covered under loss-share agreements with the FDIC at December 31, 2011, were $89.2 million and $43.1 million, respectively.  The remaining information in this release on nonperforming loans, other real estate owned and the related asset quality ratios excludes the assets covered under loss-share agreements with the FDIC.

Nonperforming loans (loans 90 days or more past due and nonaccrual loans) were $34.9 million at December 31, 2011, as compared to $49.0 million at September 30, 2011, and $53.9 million at December 31, 2010.  Loans 30 to 89 days past due as a percentage of total loans were 0.71% at December 31, 2011, as compared to 0.75% at September 30, 2011, and 0.99% at December 31, 2010. 

The Company recorded a provision for loan losses of $6,000,000 and $22,350,000 for the quarter and year ending December 31, 2011, respectively, as compared to $5,500,000 and $30,665,000 for the quarter and year ending December 31, 2010, respectively.  The provision for loan losses for the third quarter of 2011 was $5,500,000.  Annualized net charge-offs as a percentage of average loans were 1.56% for the fourth quarter of 2011 as compared to 0.80% for the same period in 2010 and 0.70% on a linked quarter basis.  Net charge-offs as a percentage of average loans for the year ending December 31, 2011, were 0.91% as compared to 1.00% for 2010.  The increase in net charge-offs, as compared to prior quarters, is due to the final resolution of several large credits during the fourth quarter of 2011. 

The allowance for loan losses as a percentage of loans was 1.98% at December 31, 2011, as compared to 2.20% at September 30, 2011, and 2.07% at December 31, 2010.  Although the Company's allowance for loan losses decreased for the quarter and year ending December 31, 2011, as compared to the quarter ending September 30, 2011, and the year ending December 31, 2010, the Company's coverage ratio, or the allowance for loan losses as a percentage of nonperforming loans, increased to 127% as compared to 99% on a linked quarter basis and 84% for 2010. 

Other real estate owned was $70,079,000 at December 31, 2011, as compared to $72,765,000 at September 30, 2011, and $71,833,000 at December 31, 2010.  The decrease in other real estate owned reflects the Company's efforts to dispose of the underlying properties.  The Company continues to aggressively market the property held in other real estate owned as evidenced by the fact the Company sold approximately $29.1 million of other real estate owned during 2011 and $7.2 million during the fourth quarter of 2011. 

"Moving forward, we believe positive trends such as our improved deposit mix, net loan growth, improving credit metrics and our strong capital position have us prepared for another successful year," commented McGraw.  "In addition, our ability to participate in external opportunities, whether through de novo branches or acquisitions in new markets, has us positioned to expand our market share and cultivate new banking relationships in 2012." 

CONFERENCE CALL INFORMATION:

A live audio webcast of a conference call with analysts will be available beginning at 10:00 a.m. Eastern time on Wednesday, January 18, 2012, through the Company's website: www.renasant.com.  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 1-877-317-6789 in the United States and requesting the Renasant Corporation earnings call.  International participants should dial 1-412-317-6789.

ABOUT RENASANT CORPORATION:

Renasant Corporation, a 107-year-old financial services institution, is the parent of Renasant Bank and Renasant Insurance.  Renasant has assets of approximately $4.2 billion and operates over 75 banking, mortgage, financial services and insurance offices in Mississippi, Tennessee, Alabama and Georgia.

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.