Renasant Corporation · NYSE:RNST
Renasant — Investor Presentation (May 2018)
48 slides from Renasant's investor presentation, May 7, 2018
Slide 1: Q2 2018 Investor Presentation
Q2 2018 Investor Presentation
Slide 2: Forward-looking statements
This presentation contains various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 about Renasant Corporation (“Renasant,” “we,” “our,” or “us”) that are subject to risks and uncertainties. Congress passed the Private Securities Litigation Refo
Slide 3: More than 180 banking, lending, wealth management and insurance offices
More than 180 banking, lending, wealth management and insurance offices Portfolio Loans* Northern 27% Eastern 25% Western 27% Central 21% Total Deposits* Northern 19% Western Eastern 43% 22% Central 16% *As of March 31, 2018 3
Slide 4: Strategic priorities
• 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 / mitigate interest rate risk • Loan gr
Slide 5: Financial Highlights
Financial Highlights Nashville TENNESSEE Assets $3.59 Billion Memphis Gross Loans $2.28 Billion Deposits $2.69 Billion Huntsville Tupelo Atlanta Birmingham GEORGIA ALABAMA Jackson Montgomery MISSISSIPPI Source: SNL Financial 5
Slide 6: Market Expansion Since 2010
Market Expansion Since 2010 2018 Whole Bank Transaction: Brand Group Holdings, Inc.(1) | Lawrenceville, GA | Assets: $2.4 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
Slide 7: Company highlights as of March 31, 2018
Over 180 banking, lending, wealth management and insurance offices Highlights* Assets $10.2 billion Gross Loans $7.7 billion Deposits $8.4 billion *As of March 31, 2018 7
Slide 8: Announced Merger of Renasant Corporation and Brand Group Holdings, Inc.
Announced Merger of Renasant Corporation and Brand Group Holdings, Inc. March 28, 2018
Slide 9: Transaction Terms and Multiples
Transaction Terms and Multiples Target: . Brand Group Holdings, Inc. (“Brand”) . $453 million aggregate consideration (1)(2) Implied Purchase Price: . $1,447 per Brand common share (1) ‒ Price / Tangible Book Value per Share: 224% . 95% stock / 5% cash (1) ‒ 32.87 RNST shares and $77.50 of cash for
Slide 10: Transaction Rationale
Transaction Rationale Strategically Important ‒ Acquisition of 110+ year-old bank with quality core client base • $1.25 billion in transaction-related core deposits ‒ Strengthens RNST’s market presence in the attractive Atlanta MSA to be ranked in the top 10 (1) • 27% of pro forma franchise locate
Slide 11: Atlanta – The Southeast's Most Attractive MSA
Atlanta – The Southeast’s Most Attractive MSA Brand’s Strategic Branch Footprint Atlanta MSA Highlights . 2nd largest MSA in the Southeast by population at ~6mm ‒ 9th largest in the U.S. . Largest MSA in the Southeast by GDP at ~$300bn Brand Branches (8) ‒ 8th largest in the U.S. . BrandExpress High
Slide 12: Our Pro Forma Atlanta Franchise
Our Pro Forma Atlanta Franchise Atlanta MSA Deposit Market Share Pro Forma Atlanta MSA Branch Footprint (1) Deposits Market Rank Institution ($mm) Share Branches Pickens 1 Wells Fargo & Co. $19,950 20.5 % 182 Dawson 2 Bank of America Corp. 17,014 17.5 131 75 75 Cherokee 3 SunTrust Banks Inc. 10,082
Slide 13: Financial Impact of the Transaction
Financial Impact of the Transaction Assumptions Attractive Returns . . Cost Savings Double digit EPS accretion expected, once cost savings are fully realized ‒ 35% of total noninterest expense (50% realization rate in 2018; 100% in 2019 andthereafter) . . Mid single digit dilution to tangible book v
Slide 14: Our Pro Forma Company
Our Pro Forma Company Pro Forma Footprint Pro Forma Financial Highlights Johnson City Assets $12.2 bn Knoxville 40 (1) 40 Nashville Loans 9.5 TENNESSEE Deposits 9.8 Memphis 65 24 Huntsville Branches 162 75 Loans / Deposits 96.5 % Tupelo 20 (2) Birmingham Market Cap $2.5 bn Atlanta Augusta 20 Auburn
Slide 15: Strategic priorities
• 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 / mitigate interest rate risk • Loan gr
Slide 16: Balance sheet managed below $10 billion
• Reduced balance sheet to $10,000 manage assets below $10 billion at December 31, 2017 • Deleverage strategy included: $8,000 • Reduction of $479 million in investment securities • $6,000 Reduction of $99 million in mortgage loans held for sale $4,000 • Purchased $318 million of investment securiti
Slide 17: Diluted Earnings Per Share
Diluted Earnings Per Share* $3.00Earnings Per Share $0.80 0.70 $0.70 $2.50 $2.42 0.64 $2.31 $0.61 0.62 $0.59 $0.59 $0.59 $2.10 $0.60 $0.54 $0.55 $2.00 $1.89 $0.50 $1.50 $1.38 $0.40 $1.09 $0.30 $1.00 $0.20 $0.50 $0.10 $0.00 $0.00 2012 2013 2014 2015 2016 2017 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1
Slide 18: Enhanced Profitability
Enhanced Profitability Return on Assets* Return on Tangible Equity* 1.60% 18.00% 16.37% 16.34% 16.10% 16.23% 1.39% 16.00% 1.40% 14.48% 1.20% 14.00% 1.20% 1.15% 1.10% 12.17% 1.03% 12.00% 1.00% 10.00% 9.40% 0.80% 0.80% 0.66% 8.00% 0.60% 6.00% 0.40% 4.00% 0.20% 2.00% 0.00% 0.00% 2012 2013 2014 2015 201
Slide 19: Loan growth
$8,000,000 $7,000,000 • Loans not purchased increased $242 million, or 17% annualized, $6,000,000 during 1Q18 $5,000,000 • Net loan growth totaled $78 $4,000,000 million during 1Q18 • $3,000,000 Company maintains strong pipelines throughout all $2,000,000 markets which will continue to $1,000,000 dr
Slide 20: Loan portfolio composition
. At March 31, 2018, loans totaled $7.7 billion 76% Not Purchased 24% Purchased Non Owner Occupied 25% Owner Occupied 18% C&I 14% 1-4 Family Consumer 31% 2% Const Land Dev 8% 2% 20
Slide 21: 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% 91% 277% 265% 267% 87% 258% 82% 83% 82% 251% 81% 80% 80
Slide 22: Deposits and cost of funds
$9,000,000 2.00% $8,000,000 1.80% $7,000,000 1.60% 1.40% $6,000,000 ) 1.20% $5,000,000 1.00% $4,000,000 0.80% $3,000,000 0.60% ($ in thousands ($ $2,000,000 0.40% $1,000,000 0.20% $- 0.00% 2013 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Total Deposits Cost of Deposits Fed Funds $2,000,00
Slide 23: Net interest income and margin
6.00% 6.00% 5.00% 5.00% 4.00% 4.00% 3.00% 3.00% Margin Yield/Cost 2.00% 2.00% 1.00% 1.00% 0.00% 0.00% 2013 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Yield on Earning Assets Cost of Funds Margin ($ in thousands) 2013 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Net Interest $15
Slide 24: Noninterest income
• Diversified sources of noninterest income ($ in thousands) 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 Expansions within our de novo operati
Slide 25: Efficiency ratio
90.00% • Continued focus on managing 85.00% noninterest expenses and 80.00% improving efficiency • Provided resources for eight 75.00% de novo expansions since 2011 70.00% • Fluctuations in mortgage loan 65.00% expense driven by higher mortgage production 60.00% 55.00% 50.00% 45.00% 40.00% 2013 2014
Slide 26: Strategic priorities
• 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 / mitigate interest rate risk • Loan gr
Slide 27: Non-performing assets
2.50% . Not purchased NPAs are now below pre-credit cycle levels . 2.00% Loss-share agreements with FDIC were terminated in 4Q 2016 1.50% 1.00% Not Purchased Purchased Not Covered 0.50% NPL’s $13.0M $9.9M ORE $4.8M $9.8M 0.00% Total NPA’s $17.8M $19.7M Not Purchased Purchased Covered Purchased Not C
Slide 28: Provision, charge-offs and coverage
$6,000 400% • Net charge-offs: 350% $5,000 • 8 bps in 1Q18 300% $4,000 • Provision for loan losses: 250% • $3,000 200% $1.75 million in 1Q18 150% ($ inthousands) ($ $2,000 100% $1,000 50% $- 0% 2013 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 ($)Provision for Loan Losses ($)Net Charge Off
Slide 29: Strong Credit Quality Metrics
Strong Credit Quality Metrics NPLs and Early Stage Delinquencies (30-89 Days Past Due Loans)* $25,000 $20,000 NPLs 30-89 $15,000 Days ($ in thousands) ($ $10,000 $5,000 $0 2013 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 *Amounts exclude loans and assets purchased in connection with recen
Slide 30: Strategic priorities
• 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 / mitigate interest rate risk • Loan gr
Slide 31: Capital ratios
• 10.50% Tangible Common Equity Ratio* Maintained dividend throughout economic downturn • Increased quarterly dividend three times since 2Q16 9.50% • Regulatory capital ratios are well above the minimum 8.50% for well-capitalized classification 7.50% • Capital level positions the Company for future
Slide 32: Consistent and Strong Dividend
Consistent and Strong Dividend Dividends Per Share – Annual Payout Dividends Per Share – Quarterly Payout $0.80 $0.20 $0.70 $0.18 $0.16 $0.60 $0.14 $0.50 $0.12 $0.40 $0.10 $0.30 $0.08 $0.06 $0.20 $0.04 $0.10 $0.02 $0.00 $0.00 32
Slide 33: Summary
. $10.2B franchise well positioned in attractive markets in the Southeast . Merger with Brand Group Holdings, Inc. will add $2.4B in assets, $1.9M in deposits and $1.9M in loans on the acquisition date . Strategic focus on expanding footprint • Acquisition • De Novo • New lines of business . Opportu
Slide 34: Appendix
Appendix [NRENASANT CORPORATION
Slide 35: Alabama Deposit Market Share
. Mazda and Toyota announced $1.6 billion investment creating up to 4,000 jobs by 2021 Alabama Deposit Market Share . Ranked #6 on the Area Development Top States for Doing Business 2016 Deposits Market . Honda, Hyundai, Mercedes-Benz and Toyota increasingly large presence Rank Institution ($mm) Sha
Slide 36: Florida Deposit Market Share
. Entered the Florida market through the acquisition of HBOS. Moved into FL with 6 full-services branches along I-75 FloridaFlorida Deposit Deposit Market Market Share Share . Opened Mortgage Production Offices in Destin and Jacksonville in Q1 Deposits Market 2017 Rank Institution ($mm) Share Bran
Slide 37: Georgia Deposit Market Share
. Entered the North GA market through two FDIC loss share transactions Georgia Deposit Market Share 12 full-service locations Deposits Market Expanded services include mortgage and wealth management personnel Rank Institution ($mm) Share Branches 1 SunTrust Banks Inc. $54,262 22.9 % 230 . 2 Well
Slide 38: Mississippi Deposit Market Share
. Increased presence in Mississippi with the recent acquisition of Metropolitan BancGroup, Inc., which Mississippi Deposit Market Share closed 7/1/17 Deposits Market Added 4-full service branches Rank Institution ($mm) Share Branches 1 Trustmark Corp. $7,127 13.4 % 122 2 Regions Financial Corp. 7,
Slide 39: Tennessee Deposit Market Share
. Our Tennessee Operations The Knoxville/Maryville MSA location opened in late Q2 ‘12 Tennessee Deposit Market Share East Tennessee operations currently have 4 full-service branches, $293 million in Deposits Market loans and $139 million in deposits Rank Institution ($mm) Share Branches 1 Firs
Slide 40: Reconciliation of Non-GAAP Disclosures: Tangible Common Equity
Reconciliation of Non-GAAP Disclosures Tangible Common Equity 40
Slide 41: Reconciliation of Non-GAAP Disclosures: Efficiency Ratio
Reconciliation of Non-GAAP Disclosures Efficiency Ratio 41
Slide 42: Reconciliation of Non-GAAP Disclosures: Efficiency Ratio (Excluding Mortgage)
Reconciliation of Non-GAAP Disclosures Efficiency Ratio (Excluding Mortgage) 42
Slide 43: Reconciliation of Non-GAAP Disclosures: Non Interest Income
Reconciliation of Non-GAAP Disclosures Non Interest Income 43
Slide 44: Reconciliation of Non-GAAP Disclosures: Diluted Earnings Per Share
Reconciliation of Non-GAAP Disclosures Diluted Earnings Per Share 44
Slide 45: Reconciliation of Non-GAAP Disclosures: Return on Assets
Reconciliation of Non-GAAP Disclosures Return on Assets 45
Slide 46: Reconciliation of Non-GAAP Disclosures: Return on Tangible Equity
Reconciliation of Non-GAAP Disclosures Return on Tangible Equity 46
Slide 47: Additional information about the proposed merger
With respect to the proposed merger of Brand into Renasant, Renasant intends to file a registration statement on Form S-4 that will include a proxy statement for Brand and a prospectus of Renasant, and Renasant will file relevant documents concerning the proposed merger with the Securities and Excha
Slide 48: Contact information
E. Robinson McGraw Chairman of the Board and Executive Chairman 209 TROY STREET TUPELO, MS 38804-4827 C. Mitchell Waycaster PHONE: 1-800-680-1601 President and Chief Executive Officer FACSIMILE: 1-662-680-1234 WWW.RENASANT.COM Kevin D. Chapman WWW.RENASANTBANK.COM Senior Executive Vice President, Ch