Renasant Corporation Announces 2011 Second Quarter Earnings

TUPELO, Miss., July 19, 2011 /PRNewswire/ -- Renasant Corporation (NASDAQ: RNST) (the "Company") today announced its financial results for the second quarter of 2011. Net income for the second quarter of 2011 was $5,757,000 as compared to $3,796,000 for the second quarter of 2010.  Basic and diluted earnings per share were $0.23 during the second quarter of 2011 as compared to basic and diluted earnings per share of $0.18 for the second quarter of 2010.  

"We are very pleased with our solid financial performance for the second quarter for 2011," commented Renasant Chairman and Chief Executive Officer, E. Robinson McGraw.  "As projected, we increased our net interest margin and continued to build on our capital ratios while at the same time decreasing nonperforming loans and nonperforming assets.  In addition, we announced our sixth and seventh expansion opportunities within the last 12 months with the entry into the banking market of Montgomery, Alabama and the pending expansion of our wealth management operations."

Net interest income was $32,607,000 for the second quarter of 2011, a 4.86% increase compared to the first quarter of 2011 and a 37.70% increase from the second quarter of 2010.  The increase in net interest income during the second quarter of 2011 compared to the same period in 2010 is due to the net interest income from the FDIC-assisted acquisitions of Crescent Bank & Trust Company and American Trust Bank, both of which were completed subsequent to the second quarter of 2010.  Net interest margin was 3.76% for the second quarter of 2011 as compared to 3.55% for the first quarter of 2011 and 3.15% for the second quarter of 2010.  

"Our improvement in net interest income and net interest margin was largely driven by our continued strategic efforts to restructure our funding mix and deploy cash into higher yielding alternatives.  We expect these strategic efforts, coupled with our anticipated future loan growth, to result in further improvement in net interest income and net interest margin during future quarters," stated McGraw.

The Company's noninterest income continues to be derived primarily from multiple lines of recurring income which include but are not limited to wealth management, treasury management, insurance and mortgage along with income from deposit and loan products.  Noninterest income was $13,349,000 for the second quarter of 2011 as compared to $21,765,000 for the first quarter of 2011 and $14,344,000 for the second quarter of 2010. Noninterest income for the first quarter of 2011 included a bargain purchase gain of $8,774,000 while noninterest income for the second quarter of 2010 included a gain of $2,049,000 from the sale of securities. Excluding these items, which are nonrecurring in nature, noninterest income for the first quarter of 2011 was $12,991,000 and noninterest income for the second quarter of 2010 was $12,295,000.

Noninterest expense was $32,555,000 for the second quarter of 2011 as compared to $36,723,000 for the first quarter of 2011 and $26,188,000 for the second quarter of 2010. The increase in noninterest expense during the second quarter of 2011 compared to the same period in 2010 is primarily due to the operations acquired in the FDIC-assisted acquisitions. Furthermore, noninterest expense for the first quarter of 2011 included expenses related to the early extinguishment of debt and American Trust acquisition-related expenses.

At June 30, 2011, the Company's Tier 1 leverage capital ratio was 9.10%, its Tier 1 risk-based capital ratio was 13.58%, and its total risk-based capital ratio was 14.83%. The Company's tangible common equity ratio was 7.11%. In all capital ratio categories, the Company's regulatory capital ratios increased and continue to be in excess of regulatory minimums required to be classified as "well-capitalized."  

Total assets as of June 30, 2011 were approximately $4.260 billion, down slightly from December 31, 2010.  Total deposits were $3.477 billion at June 30, 2011 compared to $3.468 billion at December 31, 2010. The Company continued to focus on changing its deposit mix by replacing higher-costing deposits with lower-costing retail deposits. As a result of this focus, the Company's cost of funds was 1.17% for the second quarter of 2011 as compared to 1.31% for the first quarter of 2011 and 1.86% for the second quarter of 2010.  

Total loans, which include both loans covered and not covered under FDIC loss-share agreements, were approximately $2.563 billion at the end of the second quarter of 2011 as compared to $2.577 billion at March 31, 2011 and $2.524 billion at December 31, 2010.  Loans not covered under FDIC loss-share agreements were $2.185 billion at June 30, 2011 as compared to $2.190 billion at March 31, 2011 and $2.191 billion at December 31, 2010.  

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. Nonperforming loans and other real estate owned covered under loss-share agreements totaled $89.4 million and $59.8 million, respectively, at June 30, 2011. The remaining information in this release on nonperforming loans, other real estate owned and the related asset quality ratios exclude the assets covered under loss-share agreements.

The Company recorded a provision for loan losses of $5,350,000 for the second quarter of 2011 as compared to $5,500,000 for the first quarter of 2011 and $7,000,000 for the second quarter of 2010.  Annualized net charge-offs as a percentage of average loans were 0.82% for the second quarter of 2011 as compared to 0.54% for the first quarter of 2011 and 0.80% for the fourth quarter of 2010.  The allowance for loan losses as a percentage of loans was 2.18% at June 30, 2011 as compared to 2.17% at March 31, 2011 and 2.07% at December 31, 2010.  

The Company's nonperforming loans were $51,977,000 at June 30, 2011 as compared to $57,245,000 at March 31, 2011 and $53,858,000 at December 31, 2010. Loans 30 to 89 days past due as a percent of total loans were 0.80% at June 30, 2011 as compared to 0.86% at March 31, 2011 and 0.98% at December 31, 2010.  

Other real estate owned was $68.4 million at June 30, 2011 as compared to $71.4 million at March 31, 2011 and $71.8 million at December 31, 2010. During the second quarter, the Company sold a total of approximately $7.4 million in other real estate owned.  

During the second quarter of 2011, the Company announced that it entered into an agreement to acquire RBC Bank (USA)'s Birmingham-based $680 million asset trust division. The transaction is expected to close during the third quarter of 2011.

On July 1, 2011, the Company announced its entrance into the banking market of Montgomery, Alabama through its hiring of an established banking team. The entry into Montgomery adds to Renasant's current Alabama footprint of multiple full-service locations in Birmingham, Huntsville, Decatur and Madison which has over $600 million in assets. The Montgomery market entrance is Renasant's seventh expansion and the third in Alabama over the past 12 months.

"We expect a strong second half of 2011 as we build on the momentum of our increase in net interest margin, capital ratios and net interest income during the second quarter," stated McGraw.  "Over the past 12 months, we have taken advantage of many opportunities to improve our profitability and expand our footprint throughout the southeast and we look to capitalize on future growth opportunities as they become available."

CONFERENCE CALL INFORMATION:

A live audio webcast of a conference call with analysts will be available beginning at 10:00 AM EST on Wednesday, July 20, 2011.

The webcast can be accessed through Renasant's investor relations website at www.renasant.com or https://services.choruscall.com/links/rnst110720.html#.  To access the conference via telephone, dial 1-877-317-6789 in the United States and request the Renasant Corporation Second Quarter 2011 Earnings Webcast and Conference Call. International participants should dial 1-412-317-6789 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 10001968 or by dialing 1-412-317-0088 internationally and entering the conference number. Telephone replay access is available until 9:00 AM EST on July 20, 2012.

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 $4.3 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.