Slide 1: Third Quarter 2020 Earnings Call
Third Quarter 2020 Earnings Call
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
Overview Company Snapshot Loans and Deposits by State Assets: $14.8 billion Loans Loans: 11.1 Deposits: 11.9 Equity: 2.1 TN MS 20% 25% YTD Total Revenue(1) AL GA 2% 32% 18% FL 5% 24% Deposits 3% 71% TN 14% MS 38% GA Community Bank Wealth Management 34% Mortgage Insurance AL 11% FL 3 Note: Financial
Slide 4: Renasant Footprint
Renasant Footprint Over 200 banking, lending, wealth management and insurance offices Winston-Salem Nashville Knoxville 81 Greensboro 95 40 TENNESSEE Raleigh 77 ARKANSAS 24 75 Memphis Charlotte NORTH CAROLINA Chattanooga Greenville 40 Huntsville 85 Tupelo 65 Columbia Wilmington Birmingham 95 Atlanta
Slide 5: 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 was $49.71 million • Issued in September $100 million 4.50% fixed-to-floating rate subordinated debt due 2035 • Allowance for credit losses on loans to tot
Slide 6: Financial Condition
\GRENASANT CORPORATION Financial Condition
Slide 7: Consistent Balance Sheet Growth
Consistent Balance Sheet Growth Total Assets $15,000 $14,897 $14,809 $14,000 $13,891 $13,401 $13,040 $13,000 $12,000 $11,000 $10,000 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 7 Note: Dollars in millions
Slide 8: Total Loans Held for Investment
Total Loans Held for Investment 5.29% 5.11% 4.93% 5.01% 4.82% 4.31% 4.69% 4.09% 4.24% 4.06% $10,997 $11,084 $9,690 $9,769 $9,314 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 8 Core Lo
Slide 9: Deposits
Deposits 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 9 Note: Dollars in millions
Slide 10: 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 includ
Slide 11: Capital Ratios
Capital Ratios Ratio Strong3QCapital 2019 Position 4Q 2019 1Q 2020 2Q 2020 3Q 2020 Minimum to be Well 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 13.4
Slide 12: Asset Quality
\GRENASANT CORPORATION Asset Quality
Slide 13: Asset Quality
Asset Quality Loans 30-89 Days Past Due/ Classified Loans/Total Loans(1) Total Loans(1) $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% $- 0.00% ($ in thousands) 3Q 4Q 1Q 2Q 3Q ($ in thousands)
Slide 14: Asset Quality
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% $- 0.00% ($ in thousands) ($ in thousands) 3Q 4Q 1Q 2Q 3Q 3Q 4Q 1Q 2Q
Slide 15: Asset Quality
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 $100,000 300% $100,000 1.00% $75,000 $75,000 200% $50,000 $50,000 0.50% 100% $25,000 $25,000 $- 0% $- 0.00% 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 ($ i
Slide 16: CECL 2020 Reserve Build
CECL 2020 Reserve Build 1/1/2020 3/31/2020 6/30/2020 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 2.2
Slide 17: Profitability
\GRENASANT CORPORATION Profitability
Slide 18: 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 19: Return on Tangible Equity
Return on Tangible Equity 16.00% 14.23% 14.00% 13.41% 12.00% 11.01% 10.81% 10.00% 8.00% 6.97% 7.15% 6.00% 5.63% 4.41% 3.85% 4.00% 2.00% 0.38% 0.00% 3Q19 4Q19 1Q20 2Q20 3Q20 ROE (GAAP) ROTCE (Adjusted)* * ROTCE (adjusted) is a non-GAAP financial measure. See slide 30 for in the appendix for a descrip
Slide 20: Net Interest Income (TE) & Core Net Interest Margin
Net Interest Income (TE) & Core Net Interest Margin 3.98% 3.90% 3.75% 3.75% 3.38% 3.29% 3.66% 3.56% 3.26% 3.23% $110.3 $110.9 $108.3 $107.9 $107.5 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 Core NII* Non-Core NII NIM Core NIM (Non-GAAP)* Note: Dollars in millions *Core Net Interest Income and Core Net
Slide 21: 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 22: Efficiency Ratio
Efficiency Ratio 79% 69% 69% 65% 63% 64% 64% 65% 63% 61% Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Efficiency Ratio Adjusted Efficiency Ratio* Note: Dollars in millions *Adjusted Efficiency Ratio is a non-GAAP financial measure. See slide 33 in the appendix for a description of exclusions and a reconc
Slide 23: Appendix
\GRENASANT CORPORATION Appendix
Slide 24: 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 23, 2020, approximately 2.9% of total loan portfolio, excluding PPP loans, under the deferral program • Requires relationship manager to perfo
Slide 25: 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 more sensitive to the negative impac
Slide 26: 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 Wyndham 32% Physicians 3% 24% Holiday Inn (IHG) 14% Skilled Nursing Other Facilities Healthcare 6% 27% Offices of Kidney Dialysis Dentists Daycare
Slide 27: Current Expected Credit Losses
Current Expected Credit Losses 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 Fa
Slide 28: Reconciliation of Non-GAAP Disclosures
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
Slide 29: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures 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 prepayment penalties 54 - - 90 28 MSR valuation
Slide 30: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures Return on Average Tangible Common Equity (Adjusted) $ in thousands 3Q19 4Q19 1Q20 2Q20 3Q20 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
Slide 31: Reconciliation of Non-GAAP Disclosures
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 $ 107,884 Less: Net interest income collected on problem loans 905 152 218 384
Slide 32: Reconciliation of Non-GAAP Disclosures
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 pu
Slide 33: Reconciliation of Non-GAAP Disclosures
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 -
Slide 34: Reconciliation of Non-GAAP Disclosures
Reconciliation of Non-GAAP Disclosures Tangible Common Equity and Tangible Book Value $ 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 978,390 976,943 975,048 973,214 971,482 Actual tangi