Renasant Corporation · NYSE:RNST
Renasant — Q3 2020 Earnings Presentation
45 slides from Renasant's earnings presentation, Nov 9, 2020
Slide 1: Third Quarter 2020 Investor Presentation
Third Quarter 2020 Investor Presentation
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain various statements about Renasant Corporation (“Renasant,” “we,” “our,” or “us”) 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 Exchan
Slide 3: Overview Summary
Overview Summary Balance Sheet Loans and Deposits by State Assets: $14.8 billion Loans Loans: 11.1 Deposits: 11.9 Equity: 2.1 TN MS 20% 25% (1) YTD Total Revenue AL GA 18% 2% 32% FL 5% 24% Deposits 3% 71% TN 14% MS 38% GA Community Bank Wealth Management 34% AL Mortgage Insurance FL 11% 3% 3 Note: F
Slide 4: Renasant Footprint
Renasant Footprint Over 200 banking, lending, wealth management and insurance offices Winston-Salem Nashville 81 Knoxville Greensboro 95 40 TENNESSEE Raleigh 77 ARKANSAS 24 75 Charlotte NORTH CAROLINA Memphis Chattanooga Greenville 40 Huntsville 85 Tupelo 65 Columbia Wilmington Birmingham Atlanta 95
Slide 5: Market Growth Since 2010
Market Growth Since 2010 American Trust First M&F KeyWorth Bank Brand Group Bank (1) Corporation Atlanta, GA Holdings, Inc. Roswell, GA Kosciusko, MS Lawrenceville, GA Crescent Bank and Trust (1) Heritage Metropolitan Jasper, GA RBC (USA) Financial BancGroup, Inc. Trust Unit Group, Inc. Ridgeland, M
Slide 6: Third Quarter Highlights
Third Quarter Highlights • Adjusted Pre-Provision Net Revenue (1) of $63.17 million, with net income of $29.99 million • Mortgage banking income of $49.71 million • Issued $100 million 4.50% fixed-to-floating rate subordinated debt due 2035 • Allowance for credit losses to total loans, excluding Pay
Slide 7: Financial Condition
Financial Condition
Slide 8: Balance Sheet Growth
Balance Sheet Growth Total Assets Total Loans excluding Loans Held for Sale $16,000 $12,000 $11,085 12000 $14,000 1 PPP10000 $10,000 $1,308 $12,000 $10,000 $8,000 8000 $8,000 $14,809 $6,000 6000 $13,401 $6,000 $12,935 $9,083 $9,690 $9,777 $9,830 $4,000 4000 $4,000 $8,700 $7,620 $6,203 $2,000 2000 $2
Slide 9: Tangible Book Value Per Share
Tangible Book Value Per Share $20.20 $20.16 $18.21 $17.83 $16.65 $13.95 $13.13 $12.21 $11.76 $11.51 $11.09 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q3 2020 9 Tangible Book Value Per Share is a non-GAAP financial measure. See slide 44 in the appendix for descriptions of exclusions and reconc
Slide 10: Loans and Yields
Loans and Yields 5.29% 5.11% 4.93% 5.01% 4.82% 4.31% 4.69% 4.09% 4.24% 4.06% $10,997 $11,085 $9,769 $9,314 $9,690 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 1-4 Family Mortgage Commercial Mortgage Construction Other* C&I PPP Loan Yield Core Loan Yield** Note: Dollars in millions 10 * Other loans are co
Slide 11: Loan Portfolio Composition
Loan Portfolio Composition Loan Portfolio Highlights as of September 30, 2020 At September 30, 2020, loans held for investment totaled $11.1 billion • Legacy of proactive portfolio management and conservative credit underwriting • Granular loan portfolio: o Average loan size is approximately $112,00
Slide 12: Diversified Commercial Loan Portfolio
Diversified Commercial Loan Portfolio $6.35 Billion(1) of Commercial Loans Commercial Portfolio Highlights • Granular commercial portfolio Industries < 3% of Construction, $375, focused on relationship-based Portfolio, $1,224, 6% Retail Trade, $811, lending 19% 13% • Diversified as to industry and C
Slide 13: ADC and CRE Loan Concentration Levels
ADC and CRE Loan Concentration Levels ADC Loans as a Percentage of CRE Loans (Const. & Perm) as a Percentage of Total Bank Risk Based Capital Total Bank Risk Based Capital 100% 300% 83% 83% 81% 80% 78% 79% 78% 250% 80% 73% 200% 60% 150% 40% 100% 20% 50% 0% 0% 13
Slide 14: Deposit Mix and Pricing
Deposit Mix and Pricing 0.84% 0.76% $11,846 $11,934 0.72% $10,286 $10,213 $10,412 0.49% 0.40% 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 Noninterest-bearing Interest-bearing Savings Time Cost of deposits 14 Note: Dollars in millions
Slide 15: Core Deposit Funding
Core Deposit Funding Deposits as of September 30, 2020 ($11.9 Billion) Cost of Funds 2019 1Q20 2Q20 3Q20 Noninterest-bearing demand - - - - Interest-bearing demand 0.86% 0.75% 0.43% 0.36% Savings 0.19% 0.15% 0.09% 0.08% Time deposits 1.71% 1.71% 1.62% 1.42% Borrowed funds 4.17% 2.46% 1.73% 2.20% Tot
Slide 16: Capital Position
Capital Position Regulatory Capital as of September 30, 2020 Capital Highlights • The Board approved a new $50 million stock repurchase program on October 20, 2020 (the previous program having just expired); however, no current intent to repurchase stock. • Consistent dividend payment history, inclu
Slide 17: Capital Ratios
Capital Ratios Strong Capital Position Minimum to be Well Ratio 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 Capitalized Tangible Common 9.46% 9.25% 8.48% 7.97% 8.19% N/A Equity* Leverage 10.56 10.37 9.90 9.12 9.17 5.00% Tier 1 Risk Based 12.40 12.14 11.63 11.69 11.79 8.00 Total Risk Based 14.07 13.78 13
Slide 18: Dividend History
Dividend History Annually Quarterly $1.00 $0.25 $0.90 $0.80 $0.20 $0.70 $0.60 $0.15 $0.50 $0.40 $0.10 $0.30 $0.20 $0.05 $0.10 $0.00 $0.00 18
Slide 19: Asset Quality
Asset Quality
Slide 20: Asset Quality: Past Due and Classified Loans
Asset Quality Loans 30-89 Days Past Due/ Classified Loans/Total Loans(1) (1) Total Loans $300,000 4.00% $100,000 2.00% $250,000 2.25% 3.00% $75,000 1.50% $200,000 $150,000 2.00% $50,000 1.00% $100,000 $25,000 0.50% 1.00% 0.17% $50,000 $- 0.00% $- 0.00% 3Q 4Q 1Q 2Q 3Q 3Q 4Q 1Q 2Q 3Q 2019 2019 2020 20
Slide 21: Asset Quality: NPAs and Net Charge-offs
Asset Quality NPAs/Total Assets(1) Net Charge-offs/Average Loans(1) $150,000 3.00% $20,000 0.40% $125,000 2.50% $15,000 0.30% $100,000 2.00% $75,000 1.50% $10,000 0.20% 0.40% $50,000 1.00% $5,000 0.10% $25,000 0.50% 0.01% $- 0.00% $- 0.00% 3Q 4Q 1Q 2Q 3Q 3Q 4Q 1Q 2Q 3Q 2019 2019 2020 2020 2020 2019
Slide 22: Asset Quality: Allowance
Asset Quality Allowance/Total Loans Allowance/Nonperforming Loans $175,000 1.72% 2.00% $175,000 500% $150,000 $150,000 400% $125,000 1.50% $125,000 300% $100,000 $100,000 1.00% $75,000 $75,000 200% $50,000 $50,000 100% 0.50% $25,000 $25,000 $- 0% $- 0.00% 3Q 4Q 1Q 2Q 3Q 2019 2019 2020 2020 2020 3Q 2
Slide 23: ACL Summary
ACL Summary 1/1/2020 3/31/20206/30/2020 9/30/2020 ACL as a % ACL as a % ACL as a % ACL as a % ($ in thousands) ACL of Loans ACL of Loans ACL of Loans ACL of Loans SBA Paycheck Protection Program - - - - - - - - Commercial, Financial, Agricultural $ 22,009 1.61 $ 25,937 1.82 $ 30,685 2.26 $ 38,195 2.
Slide 24: Profitability
[NRENASANT Profitability
Slide 25: Net Income & Adjusted Pre-Provision Net Revenue
Net Income & Adjusted Pre-Provision Net Revenue* 1.79% 1.65% 1.68% 1.49% 1.34% $65.6 $63.2 $53.5 $49.6 $45.0 $37.4 $38.4 $30.0 $20.1 $2.0 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 Net Income Adj. PPNR (non-GAAP) Adj. PPNR Avg. Assets (non-GAAP) Note: Dollars in millions *Adjusted Pre-Provision Net Rev
Slide 26: Diluted Earnings per Share
Diluted Earnings per Share $0.70 $.68 $.67 $.64 $.65 $0.60 $.52 $.53 $.53 $0.50 $0.40 $.36 $0.30 $.20 $0.20 $0.10 $.04 $- 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 EPS (GAAP) EPS (Adjusted)* * Diluted earnings per share (adjusted) is a non-GAAP financial measure. See slide 38 in the appendix for a des
Slide 27: Profitability Ratios
Profitability Ratios Return on Average Assets (ROAA) Return on Tangible Equity (ROTCE) 1.40% 16.00% 1.23% 14.23% 1.16% 1.16% 14.00% 13.41% 1.20% 1.13% 12.00% 1.00% 11.01% 10.81% 10.00% 0.80% 0.80% 0.79% 0.80% 8.00% 6.97% 7.15% 0.60% 0.55% 6.00% 5.63% 4.41% 0.40% 0.33% 3.85% 4.00% 0.20% 2.00% 0.06% 0
Slide 28: Net Interest Income & Net Interest Margin
Net Interest Income (TE) & Net Interest Margin 3.98% 3.90% 3.75% 3.75% 3.38% 3.29% 3.66% 3.56% 3.26% 3.23% $110.9 $110.3 $108.3 $107.5 $107.9 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 Core NII (Non-GAAP)* Non-Core NII NIM Core NIM (Non-GAAP)* Note: Dollars in millions *Core Net Interest Income and Cor
Slide 29: Noninterest Income
Noninterest Income $70,928 $64,170 MORTGAGE HIGHLIGHTS 3Q19 2Q20 3Q20 Locked Volume $1.1 bill $1.7 bill $1.7 bill Wholesale % 38 41 41 Retail % 62 59 59 $37,953 $37,456 $37,570 Purchase % 60 50 55 Refinance % 40 50 45 ($ in thousands) 3Q19 2Q20 3Q20 Gain on sales of loans, net$ 14,627 $ 46,560 $ 45,
Slide 30: Efficiency Ratio
Efficiency Ratio 79% 69% 69% 65% 64% 65% 63% 64% 61% 63% Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Efficiency Ratio Adjusted Efficiency Ratio* *Adjusted Efficiency Ratio is a non-GAAP financial measure. See slide 42 in the appendix for a description of exclusions and a reconciliation of this non- GAAP
Slide 31: Appendix
Appendix
Slide 32: Loan Deferral Program
Loan Deferral Program • As of September 30, 2020, approximately 5.1% of total loan portfolio, excluding PPP loans, under the deferral program • As of October 31, 2020, approximately 2.4% of total loan portfolio, excluding PPP loans, under the deferral program • Requires relationship manager to perfo
Slide 33: COVID-19 Impacted Portfolios
COVID-19 Impacted Portfolios • Early identification of portfolios that may be more sensitive to COVID-19 related impact • Proactively reached out to clients to understand the potential impact on their business activities • Identified Hospitality and Healthcare as continuing to be more sensitive to t
Slide 34: Impacted Industries
Impacted Industries Hospitality Portfolio by Flag(1) Healthcare by Type(1) Independent Other 9% Assisted National Living Flags 27% 8% Marriott Offices of 32% Wyndham Physicians 3% 24% Holiday Inn (IHG) 14% Skilled Nursing Other Facilities Healthcare 6% 27% Offices of Kidney Dialysis Dentists Special
Slide 35: CECL Day 1 Transition
CECL Day 1 Transition 12/31/2019 Incurred Loss 1/1/2020 CECL Adoption ALLL as a % of ACL as a % of ($ in thousands) ALLL Loans ACL Loans Commercial, Financial, Agricultural $ 10,658 0.78 $ 22,009 1.61 Lease Financing Receivables 910 1.11 1,431 1.75 Real Estate - 1-4 Family Mortgage 9,814 0.34 24,128
Slide 36: Reconciliation of Non-GAAP Disclosures: Adjusted PPNR
Reconciliation of Non-GAAP Disclosures Adjusted Pre-Provision Net Revenue $ in thousands 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 Net income (GAAP)$ 37,446 $ 38,415 $ 2,008 $ 20,130 $ 29,992 Income taxes 11,132 9,424 773 4,637 7,612 Provision for credit losses (including unfunded commitments) 1,700 2
Slide 37: Reconciliation of Non-GAAP Disclosures: ROAA and PPNR/Assets
Reconciliation of Non-GAAP Disclosures Return on Average Assets (Adjusted) and Adjusted Pre-Provision Net Revenue/Average Assets $ in thousands 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 Net income (GAAP)$ 37,446 $ 38,415 $ 2,008 $ 20,130 $ 29,992 Merger and conversion expense 24 76 - - - Debt prepayme
Slide 38: Reconciliation of Non-GAAP Disclosures: Diluted EPS
Reconciliation of Non-GAAP Disclosures Diluted Earnings Per Share $ in thousands 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 Net income (GAAP)$ 37,446 $ 38,415 $ 2,008 $ 20,130 $ 29,992 Merger and conversion expense 24 76 - - - Debt prepayment penalties 54 - - 90 28 MSR valuation adjustment 3,132 (1,296
Slide 39: Reconciliation of Non-GAAP Disclosures: ROTCE
Reconciliation of Non-GAAP Disclosures Return on Average Tangible Common Equity (Adjusted) $ in thousands 3Q194Q191Q202Q203Q20 Net income (GAAP)$ 37,446 $ 38,414 $ 2,008 $ 20,130 $ 29,992 Merger and conversion expense 24 76 - - - Debt prepayment penalties 54 - - 90 28 MSR valuation adjustment 3,132
Slide 40: Reconciliation of Non-GAAP Disclosures: Core NII and NIM
Reconciliation of Non-GAAP Disclosures Core Net Interest Income and Core Net Interest Margin $ in thousands 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 Net interest income (FTE) (GAAP)$ 110,276 $ 110,856 $ 108,316 $ 107,457 $ 107,885 Less: Net interest income collected on problem loans 905 152 218 384 2
Slide 41: Reconciliation of Non-GAAP Disclosures: Core Loan Yield
Reconciliation of Non-GAAP Disclosures Core Loan Yield $ in thousands 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 Loan interest income (FTE) (GAAP)$ 121,414 $ 121,752 $ 118,741 $ 113,727 $ 112,764 Less: Net interest income collected on problem loans 905 152 218 384 282 Accretable yield recognized on pur
Slide 42: Reconciliation of Non-GAAP Disclosures: Adjusted Efficiency Ratio
Reconciliation of Non-GAAP Disclosures Adjusted Efficiency Ratio $ in thousands Q3 2019 Q4 2019 1Q20 2Q20 3Q20 Net interest income (FTE) (GAAP)$ 110,276 $ 110,856 $ 108,316 $ 107,457 $ 107,885 Total noninterest income (GAAP) 37,953 37,456 37,570 64,170 70,928 Securities gains (losses) 343 - - 31 - M
Slide 43: Reconciliation of Non-GAAP Disclosures: Tangible Common Equity
Reconciliation of Non-GAAP Disclosures Tangible Common Equity $ in thousands 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 Actual shareholder's equity (GAAP)$ 2,119,659 $ 2,125,689 $ 2,070,512 $ 2,082,946 $ 2,104,300 Intangibles 978,390 976,943 975,048 973,214 971,481 Actual tangible shareholders' equity
Slide 44: Reconciliation of Non-GAAP Disclosures: Tangible Book Value
Reconciliation of Non-GAAP Disclosures Tangible Book Value $ in thousands 2010 2011 2012 2013 2014 2015 2016 Actual shareholder's equity (GAAP)$ 469,509 $ 487,202 $ 498,208 $ 665,652 $ 711,651 $ 1,036,818 $ 1,232,883 Intangibles 191,867 192,326 190,925 304,330 297,330 474,682 494,608 Actual tangible
Slide 45: Investor Inquiries
Investor Inquiries C. Mitchell Waycaster President and Chief Executive Officer Kevin D. Chapman Senior Executive Vice President, Chief Operating Officer James C. Mabry IV Senior Executive Vice President, Chief Financial Officer 45