Slide 1: Subordinated Notes Offering Investor Presentation
Subordinated Notes Offering Investor Presentation August 31, 2020 Issuer Free Writing Prospectus Dated August 31, 2020 Filed Pursuant to Rule 433 Registration Statement No 333-227386
Slide 2: Important Information
Important Information Forward-Looking Statements This presentation may contain various statements about Renasant Corporation (“Renasant,” the “Company,” “we,” “our,” or “us”) that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Slide 3: Important Information, cont.
Important Information, cont. Management believes that the assumptions underlying our 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 Renasant’s filings with the Securities and Exchang
Slide 4: Terms of the Proposed Offering
Terms of the Proposed Offering Issuer Renasant Corporation Nasdaq: RNST Security Subordinated Notes due 2035 Rating Kroll: BBB Offering Type SEC Registered Amount $100 Million Rate Structure Fixed-to-Floating Rate Maturity 15 Years Call Date 10 Years Covenants Consistent with regulatory limitations
Slide 5: Overview of Renasant Corporation
Overview of Renasant Corporation
Slide 6: Experienced Leadership Team
Experienced Leadership Team E. Robinson McGraw Executive Chairman Age: 73 Years of Experience: 46 Years at Renasant: 46 Chairman of the Board since 2005 CEO and President (2000-2018) General Counsel prior to becoming President and CEO President since 2016 and CEO since 2018 Elected to the Federal Re
Slide 7: Overview of Renasant Corporation
Overview of Renasant Corporation Over 200 banking, lending, wealth management and insurance offices Note: Financial data as of June 30, 2020, dollars presented in billions Company Overview Loans and Deposits by Region Name: Renasant Corporation Headquarters: Tupelo, MS Ticker:Nasdaq: RNST Assets: $1
Slide 8: Investment Highlights
Investment Highlights Building on a 116 year history Over 200 banking, lending, mortgage, wealth management and insurance offices in vibrant markets across 5 Southeastern states Experienced and tenured team attracting new talent Proven track record of successful acquisitions and de novo expansion Pr
Slide 9: Market Expansion Since 2010
Market Expansion Since 2010 Columbus, MS Montgomery, AL Starkville, MS Tuscaloosa, AL Maryville, TN Jonesborough, TN Bristol, TN Johnson City, TN 2010 2011 2013 2016 2012 2018 2017 2015 Mobile, AL Crescent Bank and Trust (1) Jasper, GA American Trust Bank (1) Roswell, GA RBC (USA) Trust Unit Birming
Slide 10: Diverse Revenue Streams
Diverse Revenue Streams Community Banks Wealth Management Insurance Mortgage (1) Total revenue calculated as net interest income plus noninterest income More than 170 branch locations across a diverse geographic footprint, which includes both metropolitan and rural areas More than 100 mortgage produ
Slide 11: COVID-19 Response
[NRENASANT CORPORATION COVID-19 Response
Slide 12: Pandemic Response
Pandemic Response Stay Safe, Stay Strong, Stay Consistent, and Stay Connected In early March the Company activated its Pandemic Planning Committee, which developed and refined operational changes in response to the pandemic. These changes include: Team Members Customers Providing special benefit ass
Slide 13: Financial Highlights
[NRENASANT Financial Highlights
Slide 14: Consistent Balance Sheet Growth
Consistent Balance Sheet Growth Total Assets Total Loans excluding Loans Held for Sale Total Deposits Total Equity 1 Green bar represents PPP loans outstanding as of June 30, 2020 Note: Dollars in millions PPP 1
Slide 15: Profitability
Note: Dollars in millions (1) Adjusted Pre-Provision Net Revenue, Adjusted PPNR/Average Assets, Core Net Interest Margin and Adjusted Efficiency Ratio are non-GAAP financial measures. See slides 41 – 43 in the appendix for descriptions of exclusions and reconciliations of these non-GAAP financial me
Slide 16: Strong Core Deposit Franchise
Strong Core Deposit Franchise Actions taken since March: Aggressively reduced stated rates on interest bearing deposits Repriced special rates on money market and public fund deposits Results since March 31: Interest-bearing deposit cost fell 26 bps Deposits totaling $1.75B with a current weighted a
Slide 17: Securities Portfolio Composition
Securities Portfolio Composition Market value of $1.3B Taxable equivalent yield of 2.48% Average life of 4.1 years Unrealized gain of $39.6M 77% of securities portfolio is U.S. government agency or Treasury issued 96% of the municipal portfolio is rated(1) AA or better 100% of securities portfolio i
Slide 18: Liquidity
Liquidity Sources of Liquidity as of June 30, 2020 ($ in Millions) *Brokered deposits cannot exceed 20% of total deposits per policy 2Q 2020 deposit growth of $1.4B was primarily driven by deposits of PPP loan proceeds, government stimulus and core growth, which resulted in excess liquidity at June
Slide 19: Interest Rate Sensitivity
Interest Rate Sensitivity Note: Financial data as of June 30, 2020. Refer to SEC filings for further information on assumptions used for forecasting purposes The following table summarizes the forecasted impact on net interest income given an immediate change in interest rates at the specified level
Slide 20: Capital Position
Capital Position Tier 1 Capital $1,253 million Tier 2 Capital $217 million Regulatory Capital as of June 30, 2020 ($ in millions) Stock buyback program suspended in March 2020 Elected to take advantage of transitional relief offered by regulators to delay for two years the estimated impact of CECL o
Slide 21: Capital Ratios
Capital Ratios Tier 1 Leverage Ratio Tangible Common Equity / Tangible Assets(2) Note: Based on regulatory capital ratios per FR Y-9C reporting 2Q 2020 Tier 1 leverage ratio excluding the impact of PPP loans was 9.73% Excludes intangible assets. See slide 44 in the appendix for reconciliation of thi
Slide 22: Capital Ratios
Capital Ratios Common Equity Tier 1 Ratio Tier 1 Risk-Based Capital Ratio Total Risk-Based Capital Ratio Note: Based on regulatory capital ratios per FR Y-9C reporting Adequately capitalized thresholds plus capital conservation buffer of 2.5% 7.0% 8.5% 10.5% Regulatory Minimums (1)
Slide 23: Loan Portfolio and Credit
[NRENASANT CORPORATION Loan Portfolio and Credit
Slide 24: Total Portfolio Loans
Total Portfolio Loans At June 30, 2020, loans held for investment totaled $11.0 billion Legacy of proactive portfolio management and conservative credit underwriting Granular loan portfolio: Average loan size is approximately $110,000 Well diversified commercial portfolio Remain below 100/300 CRE co
Slide 25: CARES Act and Paycheck Protection Program (PPP)
CARES Act and Paycheck Protection Program (PPP) Our approach: Lenders were hands-on with the customers – not an online application portal Credit was included in approval process to verify PPP underwriting requirements were satisfied Utilized technology to improve efficiency Offered to clients and no
Slide 26: Historically Strong Credit Culture
Historically Strong Credit Culture Credit Culture: Proven track record of superior asset quality metrics Centrally managed credit process Geographically dispersed credit officers who work closely with the lenders to make credit decisions Portfolio Management: Collaborative loan monitoring process in
Slide 27: Continuing Credit Enhancement
Continuing Credit Enhancement Deferral Programs: In mid-March 2020, offered a 90-day deferral of principal and interest to consumers and commercial customers who were current on loan payments and current on taxes and insurance In June 2020, rolled out a phase 2 commercial loan deferral program with
Slide 28: Commercial Loan Portfolio
Commercial Loan Portfolio Total Commercial Loans as of June 30, 2020 ($6.35 Billion)(1) Granular commercial portfolio focused on relationship-based lending Risk diversified across diverse industry segmentation and geography Average loan size = $429,000 CRE loans outstanding of $3.7 billion(2), repre
Slide 29: Loan Deferral Program
Loan Deferral Program As of June 30, 2020, approximately 21.5% of total loan portfolio, excluding PPP loans, under the deferral program As of August 21, 2020, approximately 8.7% of total loan portfolio, excluding PPP loans, under the deferral program Requires relationship manager to perform enhanced
Slide 30: 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, Restaurant, Entertainment and Retail Trade as more sensitiv
Slide 31: Impacted Industries
Impacted Industries Hospitality represents 3.6% of total loans Average loan size approximates $2.6 million Weighted average LTV approximates 59% Entertainment represents 1.2% of total loans Average loan size approximates $560,000 Approximately 88% of the entertainment portfolio is secured by real es
Slide 32: Impacted Industries, cont.
Impacted Industries, cont. Restaurant represents 2.7% of total loans Average loan size approximates $400,000 Approximately 80% of the restaurant portfolio is secured by real estate Retail Trade represents 8.3% of total loans Average loan size approximates $620,000 Weighted average LTV of approximate
Slide 33: Asset Quality Metrics
Asset Quality Metrics (1) PPP loans excluded from the balance of “Total Loans”
Slide 34: Asset Quality Metrics, cont.
Asset Quality Metrics, cont. (1) PPP loans excluded from the balance of “Total Assets” and “Average Loans”
Slide 35: Asset Quality Metrics, cont.
Adopted CECL effective January 1, 2020 Loan purchase discount of $35.2 million (36 bps of total loans excl. PPP) remaining as of June 30, 2020 1.86% total loss absorption capacity (total allowance plus loan purchase discount remaining) as of June 30, 2020 excluding PPP loans Asset Quality Metrics, c
Slide 36: Current Expected Credit Losses
Current Expected Credit Losses CECL Day 1 Transition The Company’s regulatory capital ratios were not impacted by the day 1 adoption of CECL, as the Company elected to take advantage of the transitional relief offered by the Federal Reserve and FDIC to delay for two years the estimated impact of CEC
Slide 37: CECL 2020 Reserve Build
CECL 2020 Reserve Build 2020 Highlights: Increased provision during the year is qualitatively driven by the uncertainty around the COVID-19 pandemic with forecasted negative GDP growth and high unemployment rates throughout 2020 and into 2021 and a potential prolonged economic recovery The potential
Slide 38: Appendix
[NRENASANT CORPORATION Appendix
Slide 39: Pro Forma Consolidated Capital
Pro Forma Consolidated Capital Pro forma for $100 million subordinated debt offering assuming a placement fee of 1.25%, fixed offering costs of $350 thousand, risk weighting of assets of 20% Excludes intangible assets. See slide 44 in the appendix for reconciliation of this non-GAAP financial measur
Slide 40: Pro Forma Double Leverage and Interest Coverage
Pro Forma Double Leverage and Interest Coverage (1) Pro forma for $100 million subordinated debt offering assuming a placement fee of 1.25%, fixed offering costs of $350 thousand, risk weighting of assets of 20%; assumes net proceeds are retained at the Holding Company and 0% are downstreamed to the
Slide 41: Reconciliation of Non-GAAP Disclosures: Return on Average Assets
Reconciliation of Non-GAAP Disclosures Return on Average Assets Primarily consists of employee overtime and employee benefit accruals directly related to the response to the pandemic and federal legislation enacted to address the pandemic, such as the CARES Act, and expenses associated with supplyin
Slide 42: Reconciliation of Non-GAAP Disclosures: Net Interest Margin
Reconciliation of Non-GAAP Disclosures Net Interest Margin
Slide 43: Reconciliation of Non-GAAP Disclosures: Efficiency Ratio
Reconciliation of Non-GAAP Disclosures Efficiency Ratio
Slide 44: Reconciliation of Non-GAAP Disclosures: Tangible Common Equity
Reconciliation of Non-GAAP Disclosures Tangible Common Equity
Slide 45: Reconciliation of Non-GAAP Disclosures: Pre-Tax Income
Reconciliation of Non-GAAP Disclosures Pre-Tax Income