Renasant Corporation · NYSE:RNST
Renasant — Investor Presentation (February 2015)
41 slides from Renasant's investor presentation, Feb 12, 2015
Slide 1: First Quarter 2015 Investor Presentation
First Quarter 2015 Investor Presentation
Slide 2: Forward Looking Statement
Forward Looking Statement 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’ ant
Slide 3: Current Footprint and Four Key Strategic Initiatives
Current Footprint Over 125 banking, lending, financial services and insurance offices 3 4 Enhance Profitability Capitalize on Opportunities Aggressively Manage Problem Credits Build Capital Ratios Focus on highly-accretive acquisition opportunitiesLeverage existing marketsSeek new marketsNew lines o
Slide 4: Four Key Strategic Initiatives
Four Key Strategic Initiatives Capitalize on Opportunities Focus on highly-accretive acquisition opportunities Leverage existing markets Seek new markets New lines of business Enhance Profitability Superior returns Revenue growth / Expense control Net interest margin expansion / mitigate interest ra
Slide 5: Renasant Footprint – June 2010
Renasant Footprint – June 2010 Source: SNL Financial 5 Financial Highlights Assets $3.59 Billion Gross Loans $2.28 Billion Deposits $2.69 Billion
Slide 6: Market Expansion Experience Since 2010
6 Market Expansion Experience Since 2010 De novo expansion:Columbus, MS 2010 De novo expansion:Montgomery, ALStarkville, MSTuscaloosa, AL De novo expansion:Maryville, TNJonesborough, TN FDIC-AssistedTransaction:Crescent Bank andTrustJasper, GAAssets: $1.0 billion FDIC-AssistedTransaction:American Tr
Slide 7: New Markets / New Business Lines
7 New Markets / New Business Lines * Commercial Banking Lines includes asset-based lending and equipment leasing groups
Slide 8: Pending Merger with Heritage Financial Group, Inc. (HBOS)
Pending Merger with Heritage Financial Group, Inc. (HBOS) 8
Slide 9: Transaction Terms
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 approximat
Slide 10: Transaction Multiples
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 Price(3) 24.5% Based on RNST’s 20 day average closing price as of December 9, 2014 of $29.14 and an exchange ratio of 0.9266xB
Slide 11: Transaction Rationale: Strategically Advantageous
Transaction Rationale Strategically Advantageous Provides additional scale with $1.8 billion in quality assets and a strong core deposit baseComplementary cultures and strong ties to the community consistent with RenasantAbility to increase non-interest income through the enhancement of fee-based se
Slide 12: Transaction Rationale: Financially Attractive
Transaction Rationale Financially AttractiveImmediately accretive to EPS, double-digit EPS accretion projected in 2016Tangible 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 expe
Slide 13: Financial Impact of the Transaction
Financial Impact of the Transaction 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 thereafterNo revenue enhancements assumedPre-Tax Merger Expenses: $30 million (includes termination of ESOP and othe
Slide 14: Strengthens Existing Southeast Footprint
Strengthens Existing Southeast Footprint Assets (2) $7.5 billionGross Loans (2) $5.2 billionDeposits (2) $6.1 billion RNST Branches (123) HBOS Branches (38) (1) HBOS Mortgage Offices (7) Source: SNL FinancialPro forma for pending HBOS branch acquisitionPro forma figures as of 9/30/2014, excluding pu
Slide 15: Four Key Strategic Initiatives: Total Assets
15 Enhance Profitability Capitalize on Opportunities Aggressively Manage Problem Credits Build Capital Ratios Focus on highly-accretive acquisition opportunitiesLeverage existing marketsSeek new marketsNew lines of business Selective balance sheet growthMaintain dividendPrudently manage capital Iden
Slide 16: Total Assets
Total Assets 7,000 $6,000 + Managed deposit mix by emphasizing core deposit growth while allowing higher-priced, non-core deposits to erode 35,000 + Significantly paid down high- 4,000 cost borrowings + Restructured asset mix by redeploying excess cash levels into higher yielding investments and loa
Slide 17: Total Portfolio Loans
Total Portfolio Loans 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 Non-Acquired $2,242 $2,282 $2,392 $2,540 $2,573 $2,594 $2,683 $2,794 $2,886 $2,948 $3,097 $3,165 $3,268 AcquiredCovered* $339 $318 $290 $260 $237 $214 $201 $196 $182 $174 $167 $155 $143 Acquired M&F - - - - - - -
Slide 18: Diversified Loan Portfolio
Diversified Loan Portfolio Loans totaled $3.99B18% of portfolio is acquired and carried at fair valueOwner occupied/C&I loans comprise 35% of the non covered loan portfolio 18
Slide 19: Transition To Core Funding
Cost of Funds 2.81% $3.28B $5.03B Cost of Funds .45% Transition To Core Funding Non-interest bearing deposits represent 19% of deposits, up from 12% at year end 2008Time deposits totaling $248M at WAR of .79 bps will be maturing during 1Q15 with the current repricing rate between 35-40 bpsLess relia
Slide 20: Net Interest Income and Net Interest Margin
2011 2012 2013 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 Net Interest Income 129,077 133,338 106,533 33,381 34,404 38,748 50,668 49,971 52,169 50,473 50,016 Net Interest Margin 3.77% 3.94% 3.88% 3.89% 3.88% 3.86% 4.16% 4.04% 4.24% 4.12% 4.09% Yield on Earning Assets 4.92% 4.67% 4.47% 4.51% 4.49% 4.42%
Slide 21: Sources of Non Interest Income
Diversified sources of noninterest incomeLess reliant on NSFOpportunities for growing Non Interest IncomeExpansion of Trust Division Wealth Management Services into larger, metropolitan marketsExpansions within our de novo operationsExpansion of the Mortgage Division within new marketsFees derived f
Slide 22: Noninterest Expense
Noninterest Expense Continued focus on managing noninterest expenses and improving efficiencyProvided resources for nine de novo expansions since 2010 Fluctuations in mortgage loan expense driven by higher mortgage productionOREO expense down approximately 34% Y-O-YIncurred merger related expenses d
Slide 23: Four Key Strategic Initiatives
23 Enhance Profitability Capitalize on Opportunities Aggressively Manage Problem Credits Build Capital Ratios Focus on highly-accretive acquisition opportunitiesLeverage existing marketsSeek new marketsNew lines of business Selective balance sheet growthMaintain dividendPrudently manage capital Iden
Slide 24: Non Performing Assets Continue to Decline
Non Performing Assets Continue to Decline Both on a Linked Quarter and Y-O-Y Basis 34% of total NPAs are covered under FDIC loss shareNon-acquired NPAs approaching pre-credit cycle levels. As a percentage of total assets 65 126 105 95 88 104 137 75 68 83 24 Non-Acquired AcquiredCovered AcquiredM&F N
Slide 25: Proactive in Providing Reserves for Problem Credit Resolution
*Ratios excludes loans and assets acquired in connection with the M&F acquisition or loss share transactions Proactive in Providing Reserves for Problem Credit Resolution Net charge-offs totaled $11.5 million (.29%) in 2014 compared to $7.0 million for 2013Provision for loan loss decreased 40% from
Slide 26: Continued Improvement in NPLs and Early Stage Delinquencies
Continued ImprovementNPLs and Early Stage Delinquencies(30-89 Days Past Due Loans)* (65%) Decline in NPL’s since 1Q11 Loans 30-89 days past due have remained at the lowest level since 2006NPL’s to total loans were .62% 26 *Ratios excludes loans and assets acquired in connection with the M&F acquisit
Slide 27: Other Real Estate Owned
Other Real Estate OREO* totaled $28M at 4Q14Geographic segmentation*West TN $ 3.4MMS (Excluding DeSoto) 6.9MSouth MS 5.1MDeSoto 3.4M Mid TN 2.2MAL 5.6MGA .7MFL .7M Changes in OREO Non-Covered2013Year End Non-Covered2014Year End **Covered2014Y-T-D Beginning Balance $44,717 $39,945 $12,942 Additions 1
Slide 28: Four Key Strategic Initiatives
28 Enhance Profitability Capitalize on Opportunities Aggressively Manage Problem Credits Build Capital Ratios Focus on highly-accretive acquisition opportunitiesLeverage existing marketsSeek new marketsNew lines of business Selective balance sheet growthMaintain dividendPrudently manage capital Iden
Slide 29: Strong Capital Position
Strong Capital Position Capital 2008 2009 2010 2011 2012 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 Tangible Common Equity 5.87% 6.34% 6.76% 7.35% 7.71% 7.65% 7.66% 6.49% 6.64% 6.68% 7.00% 7.37% 7.52% Leverage 8.34% 8.68% 8.97% 9.44% 9.86% 9.79% 9.83% 8.61% 8.68% 8.56% 8.91% 9.31% 9.53% Tier 1 Risk Bas
Slide 30: Poised for Growth with Added Shareholder Value
Poised for Growth with Added Shareholder Value $5.8B franchise well positioned in attractive markets in the SoutheastPending merger with HBOS will add $1.8B in assets, $1.5B in deposits, $1.2B in loans and 37 branches Strategic focus on expanding footprintAcquisitionDe NovoNew lines of businessOppor
Slide 31: Appendix
Appendix 31
Slide 32: Alabama Market Overview 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 marketsBirmingham leads the state in the health care industry with an annual payroll of approximately $2.9 billion, followed b
Slide 33: Georgia Market Overview and Deposit Market Share
Entered the North GA market through two FDIC loss share transactions12 full-service locations Expanded services include mortgage and wealth management personnelPending acquisition of Heritage Financial Group, Inc. ($1.7 billion in assets)20 full-service branches and 4 mortgage offices Significantly
Slide 34: Mississippi Deposit Market Share by County
Mississippi 34 Deposit Market Share by County – Top 5 Presence in 25 of 28 counties 1 5 Entered the Columbus, MS market in November 2010 and opened an office in Starkville, home of Mississippi State University, during late Q3 ‘11Columbus Air Force Base trains 1/3 of the nation’s pilots, with an econ
Slide 35: Our Tennessee Operations
Our Tennessee OperationsThe Knoxville/Maryville MSA location opened in late Q2 ‘12 East Tennessee operations currently have 4 full-service branches, $178 million in loans and $102 million in depositsNew lending teams added in both Memphis and Nashville during 2013Merger with First M&F provided appro
Slide 36: Heritage Financial Highlights
Heritage Financial Highlights Company Profile Bank Subsidiary HeritageBank of the South Headquarters Albany, GA Bank Established: 1955 Offices: 48 Top 5 Markets by Deposit Market Share: Albany, GAOcala, FLStatesboro, GAAtlanta-Sandy Springs-Roswell, GASavannah, GA Source: SNL Financial Financial Hig
Slide 37: HBOS Deposit Market Share
HBOS Deposit Market Share(1) Albany, GA MSA Statesboro, GA MSA Savannah, GA MSA Ocala, FL MSA Includes top four MSAs where Heritage was ranked within the top ten based on depositsSource: SNL Financial; Deposit market share data as of 6/30/2014 37
Slide 38: HBOS Mortgage Production
HBOS Mortgage Production Total Production ($mm) Refinance vs. Purchases (% of Total Production) $99.3 $407.4 $1,023.0 Mortgage team started in 2012 and currently consists of 88 bankersHeadquartered in the attractive Buckhead market
Slide 39: History of HBOS Growth
History of HBOS Growth Transaction History January 20, 2015, Heritage completed the acquisition of a branch in Norcross, GA including $37 million in loans and $107 million in deposits from The PrivateBank and Trust Company.On September 30, 2014, Heritage completed the acquisition of Alarion Financia
Slide 40: Additional Information
Additional Information 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 an
Slide 41: Investor Inquiries
Investor Inquiries E. Robinson McGrawChairman, President and Chief Executive OfficerKevin D. ChapmanExecutive Vice President and Chief Financial Officer 209 TROY STREETTUPELO, MS 38804-4827PHONE: 1-800-680-1601FACSIMILE: 1-662-680-1234WWW.RENASANT.COMWWW.RENASANTBANK.COM 41