Slide 1: Investor Presentation
IS RENASANT CORPORATION Investor Presentation \JRENASANT CORPORATION
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: Portfolio Loans and Total Deposits
More than 120 banking, lending, financial services and insurance offices Nashville Johnson City Portfolio Loans Knoxville TENNESSEE North 28% Memphis Chattanooga West Huntsville 44% East Tupelo 28% Atlanta Birmingham Kosciusko GEORGIA ALABAMA Jackson Montgomery Total Deposits MISSISSIPPI West North
Slide 4: Capitalize on Opportunities, Enhance Profitability
• 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: Acquisition and de novo expansion history
FDIC-Assisted Transaction: American Trust Bank FDIC-Assisted Roswell, GA Whole Bank Whole Bank Transaction: Assets: $145 million Transaction Transaction: Crescent Bank and First M&F Announcement: Trust Corporation Heritage Financial Jasper, GA Trust Acquisition: Group, Inc. Assets: $1.0 billion RBC
Slide 7: Loans and Deposits by market
Loans Deposits Dec. 12 Dec. 13 Dec. 14 Dec. 12 Dec. 13 Dec. 14 Montgomery, AL 61,743 76,529 90,751 20,272 26,869 33,355 Tuscaloosa, AL 23,830 36,006 58,005 31,060 45,384 61,194 Columbus, MS 20,285 28,412 44,948 48,125 66,236 81,471 Starkville, MS 32,059 39,976 51,603 21,498 63,575 107,569 East Tenne
Slide 8: Pending Merger with Heritage Financial Group, Inc. (HBOS)
Pending Merger with Heritage Financial Group, Inc. (HBOS) 8
Slide 9: Merger consideration and terms
100% stock (tax-free exchange) Consideration 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% Customary
Slide 10: Implied price and transaction multiples
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 24.5% Price(3) (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; Lower risk opportunity
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: Assumptions, Attractive Returns, Pro Forma Capital
Assumptions Attractive Returns • Loan Mark (Non-acquired) • Immediately accretive to EPS • Credit: 3.98% • Double-digit EPS accretion projected in 2016 • OREO Mark (Non-acquired): 25% • Tangible book value dilution expected to be • Cost Savings: 20%, 75% realized in 2015 earned back in less than two
Slide 14: Pro Forma Highlights
Pro Forma Highlights Assets (2) $7.5 billion Gross Loans (2) $5.2 billion Deposits (2) $6.1 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 as of 9/30/2014, excluding purchase a
Slide 15: Capitalize on Opportunities, Enhance Profitability
• 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: Total assets and deposits
$7,000 5,906 5,826 • Managed deposit mix by $6,000 5,736 5,746 5,752 5,805 emphasizing core deposit growth while allowing higher-priced, $5,000 non-core deposits to erode 4,422 4,176 4,112 4,164 4,179 4,268 4,249 • Significantly paid down high- $4,000 cost borrowings • Restructured asset mix by $3,0
Slide 17: Loan growth
$4,000,000 • Non-acquired loans increased $3,500,000 $382M or 13.2% on a Y-O-Y basis $3,000,000 • Covered loans declined $39M $2,500,000 or 21% on a Y-O-Y basis • Company maintained strong $2,000,000 pipelines throughout all markets $1,500,000 which will continue to drive further loan growth $1,000,
Slide 18: Loan portfolio composition
• Loans totaled $3.99B 18% of portfolio is acquired and carried at fair value • Owner occupied/C&I loans comprise 35% of the non covered loan portfolio Non Owner Non Owner Owner Owner Occupied Occupied Occupied Occupied 24% 21% 1-4 Family 22% 33% Rental 5% 1-4 Family Rental 11% C&I C&I 5% 13% 1-4 F
Slide 19: Deposit mix and cost of funds
2008 2014 • Non-interest bearing deposits Other Int Bearing represent 19% of deposits, up Accts DDA Other Int DDA 18% from 12% at year end 2008 26% Bearing 9% Accts Time 50% • Time deposits totaling $248M Borrowed Borrowed Deposits at WAR of .79 bps will be 37% Funds Funds 4% Time maturing during 1Q
Slide 20: Net interest income and margin
6.00% 6.00% 5.00% 5.00% 4.00% 4.00% Yield/Cost Margin 3.00% 3.00% 2.00% 2.00% 1.00% 1.00% 0.00% 0.00% 2010 2011 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 Yield on Earning Assets Cost of Funds Margin 2011 2012 2013 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 Net Interest 129,077 133,338
Slide 21: Noninterest income
• Diversified sources of noninterest income Non Interest Income* Less reliant on NSF 25,000 • Opportunities for growing Non Interest Income 20,000 Expansion of Trust Division Wealth Management 15,000 Services into larger, metropolitan markets 10,000 Expansions within our de novo operations 5,000
Slide 22: Noninterest expense and efficiency ratio
90.00% • Continued focus on managing 85.00% noninterest expenses and 80.00% improving efficiency • Provided resources for nine 75.00% de novo expansions since 2010 70.00% • Fluctuations in mortgage loan 65.00% expense driven by higher mortgage production 60.00% • OREO expense down 55.00% approximate
Slide 23: Capitalize on Opportunities, Enhance Profitability
• 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 24: Nonperforming assets
7.00% 6.00% 34% of total NPAs are covered under FDIC loss share 5.00% Non-acquired NPAs 137 approaching pre-credit cycle 4.00% 115 levels. 104 104 106 3.00% 99 83 83 83 22 22 22 75 2.00% 126 67 21 21 21 109 62 20 Non- Acquired Acquired 105 56 49 22 95 88 81 Acquired Covered M&F 1.00% 75 39 65 68
Slide 25: Net charge-offs and provision for loan losses
$12,000 300.00% • Net charge-offs totaled $11.5 million (.29%) in 2014 compared $10,000 250.00% to $7.0 million for 2013 $8,000 200.00% • Provision for loan loss decreased 40% from $10.4 million in 2013 to $6,000 150.00% $6.2 million in 2014. $4,000 100.00% • Covered loans declined $39 million or ap
Slide 26: NPLs and early stage delinquencies
Continued Improvement NPLs and Early Stage Delinquencies (30-89 Days Past Due Loans)* $60,000 57.2 53.8 50.0 51.9 49.0 48.5 $50,000 NPLs 39.9 $40,000 34.9 30-89 30.4 32.0 30.0 30.2 Days 28.0 $30,000 26.2 24.1 21.5 22.5 22.1 19.7 20.8 20.2 18.9 17.5 19.1 $20,000 16.4 15.8 13.4 14.5 14.1 8.0 10.4 8.3
Slide 27: OREO composition and changes
• OREO* totaled $28M at 4Q14 4Q14 Residential • Geographic segmentation* $28.1M 18% Properties • West TN $ 3.4M 16% • MS (Excluding DeSoto) 6.9M Residential • South MS 5.1M Land Dev • DeSoto 3.4M 33% • Mid TN 2.2M Commercial • AL 5.6M Properties • GA .7M 33% • FL .7M Commercial Land Dev Changes in O
Slide 28: Capitalize on Opportunities, Enhance Profitability
• 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 29: Tangible Common Equity Ratio and capital
Tangible Common Equity Ratio 8.00% • Maintained dividend throughout economic 7.50% downturn • Regulatory capital ratios are above the 7.00% minimum for well-capitalized classification 6.50% Expected to remain “well 6.00% capitalized” on a pro forma basis under the new Basel III standards 5.50% • C
Slide 30: Franchise summary and outlook
Nashville Johnson City $5.8B franchise well positioned in attractive Knoxville markets in the Southeast TENNESSEE Pending merger with HBOS will add $1.8B Memphis Chattanooga in assets, $1.5B in deposits, $1.2B in loans Huntsville and 37 branches Tupelo Strategic focus on expanding footprint At
Slide 31: Appendix
Appendix \JRENASANT CORPORATION
Slide 32: Alabama markets and deposit market share
Entered Montgomery and Tuscaloosa markets in late Q3 ’11 with the hiring of an Alabama Deposit Market Share experienced management team well entrenched in the respective markets Birmingham leads the state in the health care industry with an annual payroll of Deposits Market Rank Institution ($mm
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 Atlanta Pending acquisition of Heritage Financial Group, Inc. ($1.7 billion in assets) 20 full-service branches and 4 mortgage o
Slide 34: Mississippi markets and deposit market share
Entered the Columbus, MS market in November 2010 and opened an office in Starkville, home of Mississippi Deposit Market Share Mississippi State University, during late Q3 ‘11 Columbus Air Force Base trains 1/3 of the nation’s pilots, with an economic impact of $250 million Deposits Market Yoko
Slide 35: Tennessee operations and 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, $178 million in loans and $102 million in deposits Deposits Market Rank Institution ($mm) Share Branches New le
Slide 36: Heritage Company Profile
Financial Highlights 2011 2012 2013 2014 Balance Sheet ($M) Total Assets 1,090 1,098 1,381 1,706 Total Net Loans 561 677 900 1,237 Company Profile Total Deposits 884 870 1,076 1,322 Tangible Common Equity 119 116 121 142 Bank Subsidiary HeritageBank of the South Profitability (%) Headquarters Albany
Slide 37: Heritage deposit market share by MSA
Albany, GA MSA Statesboro, GA MSA 2014 2013 Deposits Market 2014 2013 Deposits Market Rank Rank Institution Names Branches ($000's) Share (%) Rank Rank Institution Names Branches ($000's) Share (%) 1 1 Heritage Financial Group Inc. (GA) 5 408,108 19.38 1 1 Synovus Financial Corp. (GA) 4 302,134 29.8
Slide 38: Heritage mortgage team and production
• Mortgage team started in 2012 and currently consists of 88 bankers • Headquartered in the attractive Buckhead market Total Production ($mm) Refinance vs. Purchases (% of Total Production) $1,200.0 100.0% $1,023.0 $900.0 75.0% 47% 71% 79% $600.0 $808.2 50.0% $407.4 $300.0 25.0% 53% $288.3 $99.3 29%
Slide 39: Heritage Transaction History and financials
Transaction History Total Assets $2,000 ($ in millions) • January 20, 2015, Heritage completed the acquisition of a branch $1,706 in Norcross, GA including $37 million in loans and $107 million in deposits from The PrivateBank and Trust Company. $1,500 $1,381 • On September 30, 2014, Heritage comple
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: Contact information
E. Robinson McGraw Chairman, President and 209 TROY STREET Chief Executive Officer TUPELO, MS 38804-4827 PHONE: 1-800-680-1601 FACSIMILE: 1-662-680-1234 Kevin D. Chapman WWW.RENASANT.COM Executive Vice President and WWW.RENASANTBANK.COM Chief Financial Officer 41