Renasant Corporation Announces 26% Increase in 2013 Second Quarter Earnings

News provided by

Renasant Corporation

Jul 16, 2013, 04:45 ET

TUPELO, Miss., July 16, 2013 /PRNewswire/ -- Renasant Corporation (NASDAQ: RNST) (the "Company") today announced its financial results for the second quarter of 2013.  Net income increased 26% for the second quarter of 2013 to $8,019,000, or basic and diluted earnings per share of $0.32, as compared to $6,345,000, or basic and diluted earnings per share of $0.25, for the second quarter of 2012. The Company's net income and earnings per share for the second quarter of 2013 included pre-tax expenses related to the pending merger with First M&F Corporation of $385,000. Excluding the Company's merger related expenses, earnings per share, both basic and diluted, were $0.33 for the second quarter of 2013.

(Logo: http://photos.prnewswire.com/prnh/20130207/CL56161LOGO )

"Our second quarter results reflect our continued efforts to grow net income, which increased for the sixth consecutive quarter. Over the last year, we achieved double-digit loan growth while at the same time growing net interest and noninterest income. Additionally, we experienced a 37% decline in nonperforming assets resulting in improvements to our credit related costs," commented Renasant Chairman and Chief Executive Officer, E. Robinson McGraw.  

Total assets as of June 30, 2013, were approximately $4.24 billion, up 3.16% from June 30, 2012, and 1.53% from December 31, 2012.  As of June 30, 2013, the Company's Tier 1 leverage capital ratio was 9.83%, its Tier 1 risk-based capital ratio was 12.87%, and its total risk-based capital ratio was 14.14%. The Company's tangible common equity ratio was 7.66%. All of the Company's regulatory capital ratios increased on a linked quarter basis and continue to be in excess of the regulatory minimums required to be classified as "well-capitalized." 

Total loans, which include both loans covered and not covered under FDIC loss-share agreements, were approximately $2.88 billion at June 30, 2013, as compared to $2.68 billion at June 30, 2012, and $2.81 billion at December 31, 2012.   Loans not covered under FDIC loss-share agreements were $2.68 billion at June 30, 2013, an increase of 12.15% from June 30, 2012, and 4.27% from December 31, 2012. 

Total deposits were $3.51 billion at June 30, 2013, as compared to $3.41 billion at June 30, 2012, and $3.46 billion at December 31, 2012.  Noninterest-bearing deposits totaled approximately $561.0 million at June 30, 2013, which represents 16% of the Company's total deposits.  The Company's cost of funds was 0.60% for the second quarter of 2013, as compared to 0.74% for the second quarter of 2012, and 0.62% on a linked quarter basis.

Net interest income increased to $34.4 million for the second quarter of 2013, from $33.4 million for the second quarter of 2012, and $33.4 million on a linked quarter basis.  Net interest margin was 3.88% for the second quarter of 2013, as compared to 3.99% for the second quarter of 2012, and 3.89% on a linked quarter basis.

Noninterest income increased 6.4% to $17.3 million for the second quarter of 2013, as compared to $16.3 million for the second quarter of 2012. Contributing to the growth in noninterest income were double-digit increases in mortgage related income, fees and commissions associated with loans and deposits, and wealth management revenue.

Noninterest expense was $37.7 million for the second quarter of 2013, as compared to $36.8 million for the second quarter of 2012. This increase was attributable to the full quarter impact of de novo expenses and merger related expenses offset by a reduction in other real estate owned ("OREO") related expenses.

The Company's loans and OREO acquired in FDIC-assisted transactions are recorded at fair value.  The adjustments to the balances of these acquired assets to record them at fair value, coupled with the loss-sharing agreements with the FDIC, mitigate the impact of further losses on these assets. 

Nonperforming loans and OREO covered under loss-share agreements totaled $47.4 million and $27.8 million, respectively, at June 30, 2013, combining for a decrease of approximately 27.33% in nonperforming assets subject to FDIC loss-share agreements from June 30, 2012, and a decrease of approximately 23.78% from December 31, 2012. The remaining information in this release on nonperforming loans, OREO, and the related asset quality ratios excludes the assets covered under loss-share agreements.

Nonperforming loans declined to $22.5 million at June 30, 2013, as compared to $30.0 million at June 30, 2012, and $30.2 million at December 31, 2012. Loans 30-to-89 days past due as a percentage of total loans were 0.27% as of June 30, 2013, as compared to 0.60% as of June 30, 2012, and 0.31% as of December 31, 2012.

The Company's coverage ratio, or its allowance for loan losses as a percentage of nonperforming loans, was 208.70% as of June 30, 2013, as compared to 149.45% as of June 30, 2012, and 146.90% as of December 31, 2012.   

The Company recorded a provision for loan losses of $3.0 million for the second quarter of 2013, as compared to $4.7 million for the second quarter of 2012. Annualized net charge-offs as a percentage of average loans were 0.35% for the second quarter of 2013, as compared to 0.63% for the second quarter of 2012. The allowance for loan losses as a percentage of loans was 1.75% at June 30, 2013, as compared to 1.87% at June 30, 2012, and 1.72% at December 31, 2012. 

OREO was $33.2 million at June 30, 2013, as compared to $58.4 million at June 30, 2012, and $44.7 million at December 31, 2012.  On a linked quarter basis, OREO decreased approximately $6.5 million, and the Company currently has approximately $5.0 million under contract to sell during the third quarter of 2013. 

"As we move into the second half of the year, we are well positioned to maintain our positive momentum for 2013 and beyond," stated McGraw. "Our pending merger with First M&F Corporation, which we anticipate completing during the third quarter of 2013, will only enhance our strong performance potential.  Last quarter, the shareholders of both companies approved the proposed merger, and we are now waiting on final regulatory approval. Upon completion of the transaction, we will have approximately $5.8 billion in total assets and over 120 locations throughout Mississippi, Tennessee, Alabama and Georgia."

CONFERENCE CALL INFORMATION:

A live audio webcast of a conference call with analysts will be available beginning at 10:00 AM Eastern on Wednesday, July 17, 2013.

The webcast can be accessed through Renasant's investor relations website at www.renasant.com or http://services.choruscall.com/links/rnst130717.html. To access the conference via telephone, dial 1-888-317-6016 in the United States and request the Renasant Corporation Second Quarter 2013 Earnings Webcast and Conference Call. International participants should dial 1-412-317-6016 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 10030802 or by dialing 1-412-317-0088 internationally and entering the conference number. Telephone replay access is available until 9:00 AM ET on August 1, 2013.

ABOUT RENASANT CORPORATION:

Renasant Corporation, a 109-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 85 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.

Contacts:      

For Media:                     

For Financials:            


John Oxford                      

Kevin Chapman

Vice President                   

Executive Vice President       


Director of External Affairs          

Chief Financial Officer

(662) 680-1219               

(662) 680-1450

[email protected]            

[email protected]

RENASANT CORPORATION










(Unaudited)

















(Dollars in thousands, except per share data)





























Q2 2013 -

For the Six Months



2013

2012

Q2 2012

Ended June 30,



Second

First

Fourth

Third

Second

First

Percent




Percent

Statement of earnings

Quarter

Quarter

Quarter

Quarter

Quarter

Quarter

Variance

2013

2012

Variance






















Interest income - taxable equivalent basis

$          41,331

$          40,371

$          41,135

$          40,613

$          41,487

$          42,001

(0.38)

$          81,702

$          83,488

(2.14)






















Interest income




$          39,945

$          38,945

$          39,676

$          39,154

$          39,978

$          40,505

(0.08)

$          78,890

$          80,483

(1.98)

Interest expense


5,541

5,564

5,723

6,022

6,568

7,662

(15.64)

11,105

$          14,230

(21.96)

Net interest income

34,404

33,381

33,953

33,132

33,410

32,843

2.98

67,785

66,253

2.31






















Provision for loan losses

3,000

3,050

4,000

4,625

4,700

4,800

(36.17)

6,050

9,500

(36.32)

Net interest income after provision

31,404

30,331

29,953

28,507

28,710

28,043

9.38

61,735

56,753

8.78






















Service charges on deposit accounts

4,509

4,500

4,774

4,818

4,495

4,525

0.31

9,009

9,020

(0.12)

Fees and commissions on loans and deposits

4,848

4,831

4,706

4,639

4,322

3,928

12.17

9,679

8,250

17.32

Insurance commissions and fees

951

861

876

889

882

939

7.82

1,812

1,821

(0.49)

Wealth management revenue

1,715

1,724

1,726

1,707

1,551

1,942

10.57

3,439

3,493

(1.55)

Securities gains (losses)



-

54

121

-

869

904

(100.00)

54

1,773

(96.95)

Gain on sale of mortgage loans

3,870

3,565

4,431

4,397

2,390

1,281

61.92

7,435

3,671

102.53

Gain on acquisition


-

-

-

-

-

-

-

-

-

-

Other


1,424

1,843

1,272

1,605

1,769

2,909

(19.50)

3,267

4,678

(30.16)

Total noninterest income

17,317

17,378

17,906

18,055

16,278

16,428

6.38

34,695

32,706

6.08

















 .





Salaries and employee benefits

21,906

21,274

21,261

21,221

19,871

18,649

10.24

43,180

38,520

12.10

Data processing


2,045

2,043

2,281

2,192

2,211

2,040

(7.51)

4,088

4,251

(3.83)

Occupancy and equipment

3,668

3,608

3,522

3,886

3,586

3,619

2.29

7,276

7,205

0.99

Other real estate


1,773

2,049

3,787

2,440

3,370

3,999

(47.39)

3,822

7,369

(48.13)

Amortization of intangibles

314

323

333

341

349

358

(10.03)

637

707

(9.90)

Merger-related expenses

385

-

-

-

-

-

-

385

-

-

Debt extinguishment penalty

-

-

-

-

-

898

-

-

898

(100.00)

Other


7,643

8,303

7,147

8,592

7,363

7,099

3.80

15,946

14,462

10.26

Total noninterest expense

37,734

37,600

38,331

38,672

36,750

36,662

2.68

75,334

73,412

2.62






















Income before income taxes

10,987

10,109

9,528

7,890

8,238

7,809

33.37

21,096

16,047

31.46

Income taxes


2,968

2,538

2,247

853

1,893

1,835

56.79

5,506

3,728

47.69

Net income




$            8,019

$            7,571

$            7,281

$            7,037

$            6,345

$            5,974

26.38

$          15,590

$          12,319

26.55






















Basic earnings per share

$              0.32

$              0.30

$              0.29

$              0.28

$              0.25

$              0.24

28.00

$              0.62

$              0.49

26.53

Diluted earnings per share

0.32

0.30

0.29

0.28

0.25

0.24

28.00

0.62

0.49

26.53






















Average basic shares outstanding

25,223,749

25,186,229

25,129,932

25,114,672

25,110,709

25,078,996

0.45

25,205,092

25,094,852

0.44

Average diluted shares outstanding

25,373,868

25,288,785

25,259,048

25,220,887

25,149,360

25,138,213

0.89

25,334,898

25,144,134

0.76






















Common shares outstanding

25,231,074

25,208,733

25,157,637

25,120,412

25,113,894

25,105,732

0.47

25,231,074

25,113,894

0.47

Cash dividend per common share

$              0.17

$              0.17

$              0.17

$              0.17

$              0.17

$              0.17

-

$              0.34

$              0.34

-






















Performance ratios




















Return on average shareholders' equity

6.35%

6.12%

5.80%

5.65%

5.19%

4.88%


6.24%

5.03%

Return on average tangible shareholders' equity

10.47%

10.19%

9.73%

9.61%

8.86%

8.39%


10.34%

8.62%

Return on average assets

0.76%

0.73%

0.70%

0.69%

0.62%

0.57%


0.75%

0.59%

Return on average tangible assets

0.82%

0.79%

0.76%

0.75%

0.68%

0.62%


0.80%

0.65%

























Net interest margin (FTE)

3.88%

3.89%

3.97%

3.94%

3.99%

3.85%


3.89%

3.92%

Yield on earning assets (FTE)

4.49%

4.51%

4.61%

4.63%

4.74%

4.71%


4.50%

4.73%

Cost of funding


0.60%

0.62%

0.64%

0.68%

0.74%

0.84%


0.61%

0.79%

Average earning assets to average assets

87.32%

86.31%

86.01%

85.62%

85.39%

84.88%


86.82%

85.13%

Average loans to average deposits

80.93%

80.30%

82.21%

81.33%

76.89%

75.45%


80.62%

76.17%

























Noninterest income (less securities gains/




















losses) to average assets

1.64%

1.67%

1.71%

1.76%

1.50%

1.48%


1.66%

1.49%

Noninterest expense (less debt prepayment penalties/




















merger-related expenses) to average assets

3.54%

3.63%

3.69%

3.77%

3.58%

3.41%


3.58%

3.49%

Net overhead ratio


1.90%

1.95%

1.98%

2.01%

2.08%

1.93%


1.93%

2.00%

Efficiency ratio (FTE)**

70.33%

72.13%

72.05%

73.46%

73.02%

71.72%


71.22%

72.38%

























**Excludes debt extinguishment penalties and merger-related expenses from noninterest expense and profit (loss) on sales of securities and gains on acquisitions from noninterest income
























RENASANT CORPORATION












(Unaudited)














(Dollars in thousands, except per share data)


























Q2 2013 -

For the Six Months



2013

2012

Q2 2012

Ended June 30,



Second

First

Fourth

Third

Second

First

Percent




Percent

Average balances

Quarter

Quarter

Quarter

Quarter

Quarter

Quarter

Variance

2013

2012

Variance

Total assets


$     4,231,947

$     4,206,411

$     4,128,508

$     4,078,333

$     4,123,373

$     4,222,376

2.63

$     4,219,250

$     4,172,848

1.11

Earning assets


3,695,409

3,630,759

3,551,026

3,491,941

3,521,099

3,583,957

4.95

3,663,263

3,552,508

3.12

Securities


754,515

698,863

665,578

682,123

793,353

813,826

(4.90)

726,843

803,589

(9.55)

Mortgage loans held for sale

32,318

22,347

29,331

24,514

19,237

23,938

68.00

27,360

21,588

26.74

Loans, net of unearned

2,845,260

2,804,618

2,798,591

2,729,503

2,628,084

2,590,062

8.26

2,825,051

2,609,072

8.28

Intangibles


190,362

190,787

191,086

191,442

191,788

192,429

(0.74)

190,573

191,964

(0.72)





















-

Noninterest-bearing deposits

$        562,104

$        549,514

$        564,440

$        543,767

$        531,209

$        534,867

5.82

$        555,844

$        533,038

4.28

Interest-bearing deposits

2,953,435

2,943,247

2,839,709

2,812,140

2,886,878

2,897,750

2.31

2,948,369

2,892,314

1.94

Total deposits


3,515,539

3,492,761

3,404,149

3,355,907

3,418,087

3,432,617

2.85

3,504,213

3,425,352

2.30

Borrowed funds


164,894

163,981

175,876

177,016

168,856

238,937

(2.35)

164,440

203,897

(19.35)

Shareholders' equity

506,225

501,634

499,088

495,220

492,164

492,092

2.86

503,942

492,164

2.39






















Asset quality data




















Assets not subject to loss share:




















Nonaccrual loans


$          20,554

$          25,382

$          26,881

$          29,677

$          26,099

$          26,999

(21.25)

$          20,554

$          26,099

(21.25)

Loans 90 past due or more

1,983

2,601

3,307

2,358

3,864

3,435

(48.68)

1,983

3,864

(48.68)

Nonperforming loans

22,537

27,983

30,188

32,035

29,963

30,434

(24.78)

22,537

29,963

(24.78)

Other real estate owned

33,247

39,786

44,717

48,568

58,384

64,931

(43.05)

33,247

58,384

(43.05)

Nonperforming assets not subject to loss share

$          55,784

$          67,769

$          74,905

$          80,603

$          88,347

$          95,365

(36.86)

$          55,784

$          88,347

(36.86)






















Assets subject to loss share:




















Nonaccrual loans


$          47,281

$          47,972

$          53,186

$          64,080

$          65,386

$          78,418

(27.69)

$          47,281

$          65,386

(27.69)

Loans 90 past due or more

126

-

-

-

199

1,397

(36.68)

126

199

(36.68)

Non-performing loans subject to loss share

47,407

47,972

53,186

64,080

65,585

79,815

(27.72)

47,407

65,585

(27.72)

Other real estate owned

27,835

35,095

45,534

41,615

37,951

35,461

(26.66)

27,835

37,951

(26.66)

Nonperforming assets subject to loss share

$          75,242

$          83,067

$          98,720

$        105,695

$        103,536

$        115,276

(27.33)

$          75,242

$        103,536

(27.33)






















Net loan charge-offs (recoveries)

$            2,471

$               893

$            3,722

$            5,335

$            4,097

$            4,964

(39.69)

$            3,364

$            9,061

(62.87)

Allowance for loan losses

47,034

46,505

44,347

44,069

44,779

44,176

5.04

47,034

44,779

5.04






















Nonperforming loans / total loans* 

0.84%

1.08%

1.17%

1.26%

1.25%

1.33%


0.84%

1.25%

Nonperforming assets / total assets*

1.31%

1.59%

1.79%

1.94%

2.15%

2.28%


1.31%

2.15%

Allowance for loan losses / total loans*

1.75%

1.79%

1.72%

1.74%

1.87%

1.94%


1.75%

1.87%

Allowance for loan losses / nonperforming loans*

208.70%

166.19%

146.90%

137.57%

149.45%

145.15%


208.70%

149.45%

Annualized net loan charge-offs / average loans

0.35%

0.13%

0.53%

0.78%

0.63%

0.77%


0.24%

0.70%

























Balances at period end




















Total assets


$     4,242,401

$     4,267,658

$     4,178,616

$     4,164,606

$     4,112,377

$     4,176,490

3.16

$     4,242,401

$     4,112,377

3.16

Earning assets


3,715,321

3,706,707

3,588,370

3,595,576

3,511,229

3,551,825

5.81

3,715,321

3,511,229

5.81

Securities


746,530

740,613

674,077

680,679

676,721

834,419

10.32

746,530

676,721

10.32

Mortgage loans held for sale

50,268

26,286

34,845

39,131

25,386

25,216

98.01

50,268

25,386

98.01

Loans not subject to loss share

2,683,017

2,594,438

2,573,165

2,539,618

2,392,349

2,281,957

12.15

2,683,017

2,392,349

12.15

Loans subject to loss share

201,494

213,872

237,088

260,545

289,685

318,089

(30.44)

201,494

289,685

(30.44)

Total loans


2,884,511

2,808,310

2,810,253

2,800,163

2,682,034

2,600,046

7.55

2,884,511

2,682,034

7.55

Intangibles


190,208

190,522

190,925

191,258

191,618

191,967

(0.74)

190,208

191,618

(0.74)






















Noninterest-bearing deposits

$        560,965

$        567,065

$        568,214

$        554,581

$        539,237

$        535,955

4.03

$        560,965

$        539,237

4.03

Interest-bearing deposits

2,944,193

2,988,110

2,893,007

2,841,447

2,866,959

2,937,211

2.69

2,944,193

2,866,959

2.69

Total deposits


3,505,158

3,555,175

3,461,221

3,396,028

3,406,196

3,473,166

2.91

3,505,158

3,406,196

2.91

Borrowed funds


195,789

164,063

164,706

222,907

169,979

171,753

15.18

195,789

169,979

15.18

Shareholders' equity

500,678

502,375

498,208

496,824

491,534

489,611

1.86

500,678

491,534

1.86






















Market value per common share

$            24.34

$            22.38

$            19.14

$            19.61

$            15.71

$            16.28

54.93

$            24.34

$            15.71

54.93

Book value per common share

19.84

19.93

19.80

19.78

19.57

19.50

1.38

19.84

19.57

1.38

Tangible book value per common share

12.31

12.37

12.21

12.16

11.94

11.86

3.10

12.31

11.94

3.10

Shareholders' equity to assets (actual)

11.80%

11.77%

11.92%

11.93%

11.95%

11.72%


11.80%

11.95%

Tangible capital ratio

7.66%

7.65%

7.71%

7.69%

7.65%

7.47%


7.66%

7.65%

























Leverage ratio


9.83%

9.79%

9.86%

9.90%

9.68%

9.38%


9.83%

9.68%

Tier 1 risk-based capital ratio

12.87%

12.86%

12.74%

12.73%

13.14%

13.32%


12.87%

13.14%

Total risk-based capital ratio

14.14%

14.13%

14.00%

14.00%

14.39%

14.57%


14.14%

14.39%

























*Based on assets not subject to loss share


































RENASANT CORPORATION











(Unaudited)








(Dollars in thousands, except per share data)
























Q2 2013 -

For the Six Months



2013

2012

Q2 2012

Ended June 30,



Second

First

Fourth

Third

Second

First

Percent




Percent

Loans not subject to loss share by category

Quarter

Quarter

Quarter

Quarter

Quarter

Quarter

Variance

2013

2012

Variance

Commercial, financial, agricultural

$        307,718

$        298,013

$        306,250

$        299,774

$        280,515

$        263,720

9.70

$        307,718

$        280,515

9.70

Lease financing


103

162

190

217

245

302

(57.96)

103

245

(57.96)

Real estate - construction

117,339

109,484

104,058

103,522

73,109

67,223

60.50

117,339

73,109

60.50

Real estate - 1-4 family mortgages

859,884

834,204

829,975

801,612

771,161

738,765

11.51

859,884

771,161

11.51

Real estate - commercial mortgages

1,335,402

1,295,213

1,275,482

1,275,386

1,208,057

1,153,423

10.54

1,335,402

1,208,057

10.54

Installment loans to individuals

62,571

57,362

57,210

59,107

59,262

58,524

5.58

62,571

59,262

5.58

Loans, net of unearned

$     2,683,017

$     2,594,438

$     2,573,165

$     2,539,618

$     2,392,349

$     2,281,957

12.15

$     2,683,017

$     2,392,349

12.15






















Loans subject to loss share by category



















Commercial, financial, agricultural

$          10,283

$          10,157

$          10,800

$          11,282

$          12,758

$          15,206

(19.40)

$          10,283

$          12,758

(19.40)

Lease financing


-

-

-

-

-

-

-

-

-

-

Real estate - construction

1,648

1,648

1,648

1,932

6,093

6,202

(73)

1,648

6,093

(72.95)

Real estate - 1-4 family mortgages

60,409

65,489

73,448

81,784

91,605

99,769

(34.05)

60,409

91,605

(34.05)

Real estate - commercial mortgages

129,120

136,541

151,161

165,494

179,160

196,754

(27.93)

129,120

179,160

(27.93)

Installment loans to individuals

34

37

31

53

69

158

(50.72)

34

69

(50.72)

Loans, net of unearned

$        201,494

$        213,872

$        237,088

$        260,545

$        289,685

$        318,089

(30.44)

$        201,494

$        289,685

(30.44)

SOURCE Renasant Corporation