Renasant Corporation · NYSE:RNST
Renasant — Q4 2019 Earnings Presentation
40 slides from Renasant's earnings presentation, Feb 13, 2020
Slide 1: Q1 2020 Investor Presentation
Q1 2020 Investor Presentation Financial Information – December 31, 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain or incorporate by reference 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
Slide 3: Current Footprint
Current Footprint More than 190 banking, lending, wealth management and insurance offices Portfolio Loans* Northern 20% Eastern 36% Western 29% Central 15% Total Deposits* Northern 14% Eastern Western 36% 38% Central 12% * As of December 31, 2019. Portfolio Loans excludes loans held for sale. 3
Slide 4: Four Key Strategic Initiatives
Four Key Strategic Initiatives • Focus on highly-accretive acquisition opportunities Capitalize on • Leverage existing markets Opportunities • Seek new markets • New lines of business • Superior returns • Revenue growth / Expense control Enhance Profitability • Net interest margin expansion / mitiga
Slide 5: Renasant Footprint – June 2010
Renasant Footprint – June 2010 Financial Highlights Assets $3.59 Billion Gross Loans* $2.28 Billion Deposits $2.69 Billion Source: SNL Financial 5 * Excludes loans held for sale 5
Slide 6: Market Expansion Since 2010
Market Expansion Since 2010 2018 Whole Bank Transaction: Brand Group Holdings, Inc. | Lawrenceville, GA | Assets: $2.3 billion Whole Bank Transaction: Metropolitan BancGroup, Inc. | Ridgeland, MS | Assets: $1.2 billion 2017 De novo expansion: Mobile, AL 2016 Whole Bank Transaction: KeyWorth Bank | A
Slide 7: Current Footprint
Current Footprint Over 190 banking, lending, wealth management and insurance offices Highlights1 Assets $13.40 Billion Gross Loans2 $9.69 Billion Deposits $10.21 Billion 1 As of December 31, 2019 2 Excludes loans held for sale 7
Slide 8: Four Key Strategic Initiatives
Four Key Strategic Initiatives • Focus on highly-accretive acquisition opportunities Capitalize on • Leverage existing markets Opportunities • Seek new markets • New lines of business • Superior returns • Revenue growth / Expense control Enhance Profitability • Net interest margin expansion / mitiga
Slide 9: Total Assets
Total Assets $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 (In millions) Total Assets Deposits 9
Slide 10: Diluted Earnings Per Share
Diluted Earnings Per Share* $3.50 $0.90 $.80 $3.00 $0.80 $.78 $.78 $.77 $3.00 $2.91 $.75 $.70 $0.70 $.68 $.64 $.65 $2.50 $2.42 $.61 $.62 $2.31 $0.60 $2.10 $.55 $1.89 $2.00 $0.50 $1.50 $0.40 $0.30 $1.00 $0.20 $0.50 $0.10 $0.00 $0.00 2014 2015 2016 2017 2018 2019 1Q17 3Q17 1Q18 3Q18 1Q19 3Q19 • Earnin
Slide 11: Enhanced Profitability
Enhanced Profitability Return on Assets* Return on Tangible Equity* 1.60% 20.00% 1.47% 1.42% 1.44% 1.40% 18.00% 17.14% 17.41% 17.20% 16.37% 16.23% 1.23% 16.10% 1.20% 16.00% 1.20% 1.15% 1.13% 14.48% 1.10% 14.23% 1.03% 14.00% 13.41% 1.00% 12.00% 0.80% 10.00% 0.60% 8.00% 6.00% 0.40% 4.00% 0.20% 2.00% 0
Slide 12: Total Portfolio Loans
Total Portfolio Loans $10,000,000 • Loans not purchased increased $9,000,000 $556 million, or 31% annualized, $8,000,000 during 4Q19 $7,000,000 • Loan production for 4Q19 was $6,000,000 $837 million $5,000,000 • Company maintains strong $4,000,000 pipelines throughout all $3,000,000 markets and line
Slide 13: Diversified Loan Portfolio
Diversified Loan Portfolio . At December 31, 2019, loans totaled $9.69 billion* 78% Not Purchased 22% Purchased Non Owner Occupied Owner Occupied 25% 17% C&I 14% Consumer 1-4 Family 4% 29% Const Land Dev 9% 2% * Excludes Loans held for sale 13
Slide 14: C&D and CRE Loan Concentration Levels
C&D and CRE Loan Concentration Levels Acquisition, Development & Construction (ADC) and Commercial Real Estate (CRE) ADC Loans as a Percentage of CRE Loans (Construction & Perm) as a Risk Based Capital Percentage of Risk Based Capital 100% 300% 83% 80% 80% 79% 80% 81% 250% 80% 76% 77% 75% 77% 69% 66
Slide 15: Focus on Core Funding
Focus on Core Funding $12,000,000 3.00% $10,000,000 2.50% $8,000,000 2.00% ) $6,000,000 1.50% $4,000,000 1.00% ($ in thousands $2,000,000 0.50% $- 0.00% 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 Total Deposits Cost of Deposits Fed Funds $3,000,000 Non Interest Bearing Demand Deposits 4Q 2019 $2,5
Slide 16: Net Interest Income and Net Interest Expense
Net Interest Income and Net Interest Expense 6.00% 6.00% 5.00% 5.00% 4.00% 4.00% 3.00% 3.00% Margin Yield/Cost 2.00% 2.00% 1.00% 1.00% 0.00% 0.00% 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 Yield on Earning Assets Cost of Funds Margin ($ in thousands) 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 N
Slide 17: Sources of Non Interest Income
Sources of Non Interest Income* ($ in thousands) • Diversified sources of noninterest income Non Interest Income* $45,000 • Opportunities for growing Non Interest Income $40,000 Expansion of Trust Division Wealth Management $35,000 services into larger, metropolitan markets $30,000 $25,000 Expansi
Slide 18: Efficiency Ratio
Efficiency Ratio 80.00% • Continued focus on managing noninterest 75.00% expenses and improving efficiency 70.00% • Fluctuations in mortgage loan expense driven by higher mortgage production 65.00% • Efficiency ratio in 4Q19 was negatively impacted due to 60.00% Durbin taking effect and additional e
Slide 19: Four Key Strategic Initiatives
Four Key Strategic Initiatives • Focus on highly-accretive acquisition opportunities Capitalize on • Leverage existing markets Opportunities • Seek new markets • New lines of business • Superior returns • Revenue growth / Expense control Enhance Profitability • Net interest margin expansion / mitiga
Slide 20: Non Performing Assets Continue to Remain at Historically Low Levels
Non Performing Assets Continue to Remain at Historically Low Levels 1.80% . Not purchased NPAs remain 1.60% below pre-credit cycle levels . Loss-share agreements with 1.40% FDIC were terminated in 4Q 2016 1.20% 1.00% 0.80% Not Purchased 0.60% Purchased Not Covered NPL’s $25.0M $11.4M 0.40% ORE $2.7M
Slide 21: Proactive in Providing Reserves for Problem Credit Resolution
Proactive in Providing Reserves for Problem Credit Resolution $6,000 450% • Net charge-offs: 400% $5,000 • 7 bps in 4Q19** 350% • 4bps YTD $4,000 300% • Provision for loan losses: 250% $3,000 ($ in thousands) • 200% $3.0 million in 4Q19 $2,000 150% • $7.1 million YTD 100% $1,000 50% $- 0% 1Q16 2Q16
Slide 22: Strong Credit Quality Metrics
Strong Credit Quality Metrics NPLs and Early Stage Delinquencies (Non Purchased Loans) (30-89 Days Past Due Loans) $30,000 $25,000 NPLs $20,000 30-89 Days $15,000 $10,000 $5,000 $0 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 ($ in thousands) • NPLs to total non purchased loans were 0.33% as of Dece
Slide 23: Four Key Strategic Initiatives
Four Key Strategic Initiatives • Focus on highly-accretive acquisition opportunities Capitalize on • Leverage existing markets Opportunities • Seek new markets • New lines of business • Superior returns • Revenue growth / Expense control Enhance Profitability • Net interest margin expansion / mitiga
Slide 24: Strong Capital Position
Strong Capital Position Tangible Common Equity Ratio* • Increased quarterly dividend five times since 2Q16, including 10.50% twice in 2018 and once in 2019. 9.50% • Regulatory capital ratios are well above the minimum for well- capitalized classification 8.50% • Capital level positions the Company f
Slide 25: Consistent and Strong Dividend
Consistent and Strong Dividend Dividends Per Share – Annually Dividends Per Share – 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 25
Slide 26: Poised for Growth with Added Shareholder Value
Poised for Growth with Added Shareholder Value . $13.4B franchise well positioned in attractive markets in the Southeast . Strategic focus on expanding footprint • Acquisition • De Novo • New lines of business . Opportunity for further profitability improvement . Organic loan growth . Core deposit g
Slide 27: Appendix
Appendix 27
Slide 28: Alabama – Central Region
Alabama – Central Region . Mazda and Toyota announced $1.6 billion investment creating up to 4,000 jobs by 2021 Alabama Deposit Market Share . Ranked #3 on the Area Development Top States for Doing Business 2018 Deposits Market Rank Institution ($mm) Share Branches 1Regions Financial Corp. $24,882 2
Slide 29: Florida – Central Region
Florida – Central Region . Entered the Florida market through the acquisition of HBOS. Florida Deposit Market Share Moved into FL with 6 full-services branches along I-75 Deposits Market Rank Institution ($mm) Share Branches . Opened full-service branch in Destin in 1Q 2019 and full-service 1 Bank
Slide 30: Georgia – Eastern Region
Georgia – Eastern Region . Entered the North GA market through two FDIC loss share transactions Georgia Deposit Market Share 12 full-service locations Deposits Market Rank Institution ($mm) Share Branches Expanded services include mortgage and wealth management personnel 1 Truist Financial Corp.
Slide 31: Mississippi – Western Region
Mississippi – Western Region . Increased presence in Mississippi with acquisition of Metropolitan BancGroup, Inc., which closed Mississippi Deposit Market Share 7/1/17 Deposits Market Rank Institution ($mm) Share Branches Added 4-full service branches 1 Trustmark Corp. $7,673 13.9 % 118 2 Regions
Slide 32: Tennessee – Northern Region
Tennessee – Northern Region . Our Tennessee Operations Tennessee Deposit Market Share The Knoxville/Maryville MSA location opened in late Q2 ‘12 Deposits Market East Tennessee operations currently have 4 full-service branches, $304 million in Rank Institution ($mm) Share Branches loans and $133
Slide 33: Reconciliation of Non-GAAP Disclosures: Tangible Common Equity
Reconciliation of Non-GAAP Disclosures Tangible Common Equity $ in thousands 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 Actual shareholders' equity (GAAP)$ 711,651 $ 1,036,818 $ 1,232,883 $ 1,514,983 $ 2,043,913 $ 2,088,877 $ 2,119,696 $ 2,119,659 $ 2,125,689 Intangibles 297,330 474,682 494,608 63
Slide 34: Reconciliation of Non-GAAP Disclosures: Efficiency Ratio
Reconciliation of Non-GAAP Disclosures Efficiency Ratio $ in thousands 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 Net interest income (FTE) (GAAP)$ 209,319 $ 248,613 $ 308,002 $ 345,743 $ 402,426 $ 114,631 $ 114,223 $ 110,276 $ 110,856 Total noninterest income (GAAP) 80,509 108,270 137,231 132,140
Slide 35: Reconciliation of Non-GAAP Disclosures: Efficiency Ratio (Excluding Mortgage)
Reconciliation of Non-GAAP Disclosures Efficiency Ratio (Excluding Mortgage) $ in thousands 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 Net interest income (FTE) (GAAP)$ 207,446 $ 240,304 $ 299,868 $ 340,794 $ 398,720 $ 114,097 $ 113,508 $ 108,945 $ 110,856 Total noninterest income (GAAP) 65,645 73
Slide 36: Reconciliation of Non-GAAP Disclosures: Non Interest Income
Reconciliation of Non-GAAP Disclosures Non Interest Income $ in thousands 1Q16 2Q16 3Q16 4Q16 Actual non interest income (GAAP)$ 33,302 $ 35,586 $ 38,272 $ 30,071 Securities gains (losses) (71) 1,257 - - Actual non interest income (non-GAAP)$ 33,373 $ 34,329 $ 38,272 $ 30,071 $ in thousands 1Q17 2Q1
Slide 37: Reconciliation of Non-GAAP Disclosures: Diluted Earnings Per Share
Reconciliation of Non-GAAP Disclosures Diluted Earnings Per Share $ in thousands 2014 2015 2016 2017 2018 2019 Net income (GAAP)$ 59,582 $ 68,014 $ 90,930 $ 92,188 $ 146,920 $ 167,596 Merger and conversion expense 694 11,614 4,023 10,378 14,246 279 Debt prepayment penalties - - 2,539 205 - 54 Loss s
Slide 38: Reconciliation of Non-GAAP Disclosures: Return on Assets
Reconciliation of Non-GAAP Disclosures Return on Assets $ in thousands 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 Net income (GAAP)$ 59,582 $ 68,014 $ 90,929 $ 92,188 $ 146,920 $ 45,110 $ 46,625 $ 37,446 $ 38,414 Merger and conversion expense 694 11,614 4,023 10,378 14,246 - 179 24 76 Debt prepaym
Slide 39: Reconciliation of Non-GAAP Disclosures: Return on Tangible Equity
Reconciliation of Non-GAAP Disclosures Return on Tangible Equity $ in thousands 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 Net income (GAAP)$ 59,582 $ 68,014 $ 90,929 $ 92,188 $ 146,920 $ 45,110 $ 46,625 $ 37,446 $ 38,414 Merger and conversion expense 694 11,614 4,023 10,378 14,246 - 179 24 76 Deb
Slide 40: Investor Inquiries
Investor Inquiries E. Robinson McGraw Chairman of the Board and Executive Chairman 209 TROY STREET TUPELO, MS 38804-4827 C. Mitchell Waycaster President and Chief Executive Officer PHONE: 1-800-680-1601 FACSIMILE: 1-662-680-1234 Kevin D. Chapman WWW.RENASANT.COM Senior Executive Vice President, WWW.