Renasant Corporation · NYSE:RNST
Renasant — Investor Presentation (July 2015)
41 slides from Renasant's investor presentation, Jul 29, 2015
Slide 1: Third Quarter 2015 Investor Presentation
Third Quarter 2015 Investor Presentation
Slide 2: Forward-looking statements
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Congress passed the Private Securities Litigation Act of 1995 in an effort to encourage corporations to provide information about companies’ anticipated future financial
Slide 3: Over 125 banking, lending, financial services and insurance offices
Over 125 banking, lending, financial services and insurance offices 3 West 44% North 28% East 28% Portfolio Loans West 62% North 16% East 22% Total Deposits Tupelo Nashville Atlanta Birmingham Huntsville Montgomery Jackson Memphis Kosciusko Chattanooga Johnson City Knoxville GEORGIA ALABAMA MISSISSI
Slide 4: Enhance Profitability, Capitalize on Opportunities, Manage Problem Credits, Build Capital
4 Enhance Profitability Capitalize on Opportunities Aggressively Manage Problem Credits Build Capital Ratios • Focus on highly-accretive acquisition opportunities • Leverage existing markets • Seek new markets • New lines of business • Selective balance sheet growth • Maintain dividend • Prudently m
Slide 5: Financial Highlights
Nashville Memphis TENNESSEE Tupelo Jackson MISSISSIPPI Birmingham Huntsville Montgomery Atlanta GEORGIA ALABAMA Source: SNL Financial 5 Financial Highlights Assets $3.59 Billion Gross Loans $2.28 Billion Deposits $2.69 Billion
Slide 6: Expansion and acquisition history
6 De novo expansion: Columbus, MS 2010 De novo expansion: Montgomery, AL Starkville, MS Tuscaloosa, AL De novo expansion: Maryville, TN Jonesborough, TN FDIC-Assisted Transaction: Crescent Bank and Trust Jasper, GA Assets: $1.0 billion FDIC-Assisted Transaction: American Trust Bank Roswe
Slide 7: De novo expansion loans and deposits by market
7 Dec. 12 Dec. 13 Dec. 14 Jun. 15 Dec. 12 Dec. 13 Dec. 14 Jun. 15 Montgomery, AL 61,743 76,529 90,751 94,300 20,272 26,869 33,355 38,299 Tuscaloosa, AL 23,830 36,006 58,005 58,115 31,060 45,384 61,194 22,017 Columbus, MS 20,285 28,412 44,948 47,382 48,125 66,236 81,471 85,116 Starkville, MS 32,059 3
Slide 8: Recent Merger with Heritage Financial Group, Inc. (HBOS) – Completed July 1, 2015
Recent Merger with Heritage Financial Group, Inc. (HBOS) – Completed July 1, 2015 8
Slide 9: Transaction terms
Consideration 100% stock (tax-free exchange) Fixed exchange ratio of 0.9266x Implied Price Per Share $27.00(1) Aggregate Value $257.9 million (1)(2) Board Seats One current member from HBOS to be added to RNST’s board of directors Ownership HBOS pro forma ownership will be approximately 21% Closing
Slide 10: Transaction pricing metrics
Implied Price Per Share $27.00(1) Price / TBVPS 169% Price / LTM Core EPS 19.6x Price / 2016 EPS(2) 12.4x Core Deposit Premium 10.9% Premium to Current Price(3) 24.5% (1) Based on RNST’s 20 day average closing price as of December 9, 2014 of $29.14 and an exchange ratio of 0.9266x (2) Based on analy
Slide 11: Strategically Advantageous
Strategically Advantageous • Provides additional scale with $1.8 billion in quality assets and a strong core deposit base • Complementary cultures and strong ties to the community consistent with Renasant • Ability to increase non-interest income through the enhancement of fee-based services • Ban
Slide 12: Financially Attractive and Lower Risk
Financially Attractive • Immediately accretive to EPS, double-digit EPS accretion projected in 2016 • Tangible book value dilution expected to be earned back in under two (2) years(1) • Estimated IRR of 20% • Anticipated realization of significant expense synergies (20% of noninterest expense) • P
Slide 13: Merger assumptions and returns
Assumptions • Loan Mark (Non-acquired) • Credit: 3.98% • OREO Mark (Non-acquired): 25% • Cost Savings: 20%, 75% realized in 2015 and 100% realized in 2016 and thereafter • No revenue enhancements assumed • Pre-Tax Merger Expenses: $30 million (includes termination of ESOP and other employee benefit
Slide 14: Pro Forma Highlights
Assets (2) $7.7 billion Gross Loans (2) $5.2 billion Deposits (2) $6.3 billion RNST Branches (123) HBOS Branches (38) (1) HBOS Mortgage Offices (7) Source: SNL Financial (1) Pro forma for pending HBOS branch acquisition (2) Pro forma figures exclude purchase accounting adjustments 14 Pro Forma Highl
Slide 15: Enhance Profitability, Capitalize on Opportunities, Manage Problem Credits, Build Capital
15 Enhance Profitability Capitalize on Opportunities Aggressively Manage Problem Credits Build Capital Ratios • Focus on highly-accretive acquisition opportunities • Leverage existing markets • Seek new markets • New lines of business • Selective balance sheet growth • Maintain dividend • Prudently
Slide 16: Total assets and deposits
• Managed deposit mix by emphasizing core deposit growth while allowing higher-priced, non-core deposits to erode • Significantly paid down high- cost borrowings • Restructured asset mix by redeploying excess cash levels into higher yielding investments and loans • Loan demand will drive deposit/fun
Slide 17: Loan growth
2011 2012 2013 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Non- Acquired $2,242 $2,573 $2,886 $2,948 $3,097 $3,165 $3,268 $3,275 $3,408 Acquired Covered* $339 $237 $182 $174 $167 $167 $143 $126 $121 Acquired M&F - - $813 $746 $694 $694 $577 $553 $508 Total Loans $2,581 $2,810 $3,881 $3,867 $3,958 $3,957 $3,988 $3
Slide 18: Loan portfolio composition
• Loans totaled $4.04B 16% of portfolio is acquired and carried at fair value • Owner occupied/C&I loans comprise 35% of the non covered loan portfolio Const 6% Land Dev 4% 1-4 Family 26% 1-4 Family Rental 5% Non Owner Occupied 24% Owner Occupied 20% C&I 15% Non-Covered Loans $3.9B Land Dev 12% 1-4
Slide 19: Deposit and funding mix
DDA 9% Other Int Bearing Accts 26% Time Deposits 37% Borrowed Funds 28% 4Q 2008 Cost of Funds 2.81% $3.28B DDA 19% Other Int Bearing Accts 54% Time Deposits 23% Borrowed Funds 4% 2Q 2015 $5.11B Cost of Funds .40% - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 2008 2009 2010 2011 2012 2013 201
Slide 20: Net interest margin, yield and cost of funds
0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 2010 2011 2012 2013 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Marg in Y ie ld /C os t Yield on Earning Assets Cost of Funds Margin 2011 2012 2013 2014 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Net Interest Income 129,077 133,338 157,201 202
Slide 21: Noninterest income
27% 9% 24% 10% 24% 6% 2Q15 $22.9M Svc Chgs Insurance Mtg Gains Wealth Mgmt Fees & Comm Other • Diversified sources of noninterest income Less reliant on NSF • Opportunities for growing Non Interest Income Expansion of Trust Division Wealth Management Services into larger, metropolitan markets Exp
Slide 22: Noninterest expense and efficiency ratio
• Continued focus on managing noninterest expenses and improving efficiency • Provided resources for nine de novo expansions since 2010 • Fluctuations in mortgage loan expense driven by higher mortgage production • Incurred merger related expenses during 2010, 2011, 2013, 2014 and 2015 22 40.00% 45.
Slide 23: Enhance Profitability, Capitalize on Opportunities, Manage Problem Credits, Build Capital
23 Enhance Profitability Capitalize on Opportunities Aggressively Manage Problem Credits Build Capital Ratios • Focus on highly-accretive acquisition opportunities • Leverage existing markets • Seek new markets • New lines of business • Selective balance sheet growth • Maintain dividend • Prudently
Slide 24: Non-performing assets
28% of total NPAs are covered under FDIC loss share Non-acquired NPAs approaching pre-credit cycle levels. 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 2008 2009 2010 2011 2012 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Non-Acquired Acquired Covered Acquired M&F 75 22 As a percentage o
Slide 25: Provision, charge-offs and allowance coverage
*Ratios excludes loans and assets acquired in connection with the M&F acquisition or loss share transactions 0.00% 50.00% 100.00% 150.00% 200.00% 250.00% 300.00% $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 4Q11 4Q12 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 ($)Provision for Loan Losses ($)Net Charge Off
Slide 26: NPLs and early stage delinquencies
$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 2008 2009 2010 2011 2012 2013 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 39.9 50.0 53.8 57.2 30.1 19.2 19.7 20.8 26.3 20.2 18.9 21.1 48.5 24.1 21.5 18.9 8.0 9.0 7.4 7.9 7.8 10.4 12.1 6.4 NPLs 30-89 Days Continued Improvement NPLs and Early Stage Delinquencies (3
Slide 27: OREO composition and changes
13% 41% 15% 31% 4Q14 $28.1M Residential Properties Residential Land Dev Commercial Properties Commercial Land Dev • OREO* totaled $23.2M at 2Q15 • Geographic segmentation* • West TN $ 3.3M • MS (Excluding DeSoto) 5.4M • South MS 3.5M • DeSoto 2.5M • Mid TN 1.3M • AL 5.7M • GA .8M • FL .7M Changes in
Slide 28: Enhance Profitability, Capitalize on Opportunities, Manage Problem Credits, Build Capital
28 Enhance Profitability Capitalize on Opportunities Aggressively Manage Problem Credits Build Capital Ratios • Focus on highly-accretive acquisition opportunities • Leverage existing markets • Seek new markets • New lines of business • Selective balance sheet growth • Maintain dividend • Prudently
Slide 29: Renasant capital ratios
4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 7.50% 8.00% 2007 2008 2009 2010 2011 2012 2013 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Tangible Common Equity Ratio Renasant Capital 2008 2009 2010 2011 2012 2013 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Tangible Common Equity 5.87% 6.34% 6.76% 7.35% 7.71% 6.64% 6.68% 7.00% 7.37% 7.52
Slide 30: Summary: $7.7B franchise in attractive Southeast markets
$7.7B franchise well positioned in attractive markets in the Southeast Merger with HBOS added $1.8B in assets, $1.4B in deposits, $1.2B in loans and 37 branches Strategic focus on expanding footprint • Acquisition • De Novo • New lines of business Opportunity for further profitability improve
Slide 31: Appendix
Appendix 31
Slide 32: Alabama markets and deposit market share
Montgomery Huntsville Birmingham Entered Montgomery and Tuscaloosa markets in late Q3 ’11 with the hiring of an experienced management team well entrenched in the respective markets Birmingham leads the state in the health care industry with an annual payroll of approximately $2.9 billion, follo
Slide 33: Georgia markets and deposit market share
Entered the North GA market through two FDIC loss share transactions 12 full-service locations Expanded services include mortgage and wealth management personnel Pending acquisition of Heritage Financial Group, Inc. ($1.7 billion in assets) 20 full-service branches and 4 mortgage offices
Slide 34: Mississippi markets and deposit market share
34 Jackson Tupelo 41.1% 7.8% 21.3% 53.5% 23.7% 6.0% 31.8% 4.7% 11.3% 25.6% 8.0% 24.5% 31.7% 23.5% 16.4% 11.2% 8.0% 10.3%11.1% 21.9% 46.0% 0.6% 12.1% 6.1% 10.3%11.5% 5.7% 0.0% 15.0% 30.0% 45.0% 60.0% Lee Mad ison Okt ibbe ha Atta la Mo nro e Des oto Pre ntis s Ran kin Lafa yett e Pon toto c Low nde s
Slide 35: Our Tennessee Operations
Our Tennessee Operations The Knoxville/Maryville MSA location opened in late Q2 ‘12 East Tennessee operations currently have 4 full-service branches, $178 million in loans and $102 million in deposits New lending teams added in both Memphis and Nashville during 2013 Merger with First M&F p
Slide 36: Heritage Company Profile
Company Profile Bank Subsidiary HeritageBank of the South Headquarters Albany, GA Bank Established: 1955 Offices: 48 Top 5 Markets by Deposit Market Share: Albany, GA Ocala, FL Statesboro, GA Atlanta-Sandy Springs- Roswell, GA Savannah, GA Source: SNL Financial Financial Highlights 36 2012 2013 2014
Slide 37: Heritage deposit market share by MSA
Albany, GA MSA Statesboro, GA MSA Savannah, GA MSA Ocala, FL MSA (1) Includes top four MSAs where Heritage was ranked within the top ten based on deposits Source: SNL Financial; Deposit market share data as of 6/30/2014 2014 Rank 2013 Rank Institution Names Branches Deposits ($000's) Market Share (%
Slide 38: Heritage mortgage total production
Total Production ($mm) • Mortgage team started in 2012 and currently consists of 88 bankers • Headquartered in the attractive Buckhead market 38 47 119 215 300 53 288 808 630 100 407 1023 930 0 200 400 600 800 1000 1200 H2 12 2013 2014 2015 YTD Refinanced Purchased Total Production
Slide 39: Heritage core net income, ROAA and transaction history
$1,947 $6,185 $10,136 $7,568 0.20% 0.58% 0.78% 0.64% 0.00% 0.25% 0.50% 0.75% 1.00% $0 $3,000 $6,000 $9,000 $12,000 2011 2012 2013 2014 Core Net Income Core ROAA $1,090 $1,098 $1,381 $1,706 $0 $500 $1,000 $1,500 $ ,00 2011 2012 2013 2014 Transaction History • January 20, 2015, Heritage completed the
Slide 40: Additional information about the merger
Renasant and Heritage will be filing a joint proxy statement/prospectus, and other relevant documents concerning the merger with the Securities and Exchange Commission (the “SEC”). This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solic
Slide 41: Management and contact information
E. Robinson McGraw Chairman, President and Chief Executive Officer Kevin D. Chapman Executive Vice President and Chief Financial Officer 209 TROY STREET TUPELO, MS 38804-4827 PHONE: 1-800-680-1601 FACSIMILE: 1-662-680-1234 WWW.RENASANT.COM WWW.RENASANTBANK.COM 41