Renasant Corporation · NYSE:RNST
Renasant — Q1 2020 Earnings Presentation
43 slides from Renasant's earnings presentation, May 7, 2020
Slide 1: Q1 2020 Investor Presentation
Q1 2020 Investor Presentation
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: Current Footprint
Current Footprint More than 200 banking, lending, wealth management and insurance offices 3
Slide 4: Four Key Strategic Initiatives
Four Key Strategic Initiatives • 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 / mitiga
Slide 5: Renasant Footprint – June 2010
Renasant Footprint – June 2010 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 * Excludes loans held for sale 5
Slide 6: Market Expansion Since 2010
Market Expansion Since 2010 2018 Whole Bank Transaction: Brand Group Holdings, Inc. | Lawrenceville, GA | Assets: $2.3 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 | A
Slide 7: Opportunities and Talent Acquisition
Opportunities and Talent Acquisition Strategic Production and Support Hires - 2019 - HealthCare RM - CRE • Added just under 50 - Head of Retail Banking - Commercial RMs revenue producers - C&I Middle Market across our footprint, including corporate banking team led by - C&I Middle Market RM’s Curtis
Slide 8: Current Footprint
Current Footprint Over 200 banking, lending, wealth management and insurance offices Highlights1 Assets $13.90 Billion Gross Loans2 $9.77 Billion Deposits $10.41 Billion 1 As of March 31, 2020 2 Excludes loans held for sale 8
Slide 9: Four Key Strategic Initiatives
Four Key Strategic Initiatives • 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 / mitiga
Slide 10: Total Assets
Total Assets $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 2014 2015 2016 2017 2018 2019 1Q20 (In millions) Total Assets Deposits 10
Slide 11: Diluted Earnings per Share (Adjusted)
Diluted Earnings per Share (Adjusted)* $0.90 $.77 $0.80 Credit cost (thousands, except per share amounts) $0.70 $.65 impact to EPS 1Q19 4Q19 1Q20 $0.60 Provision for credit losses on loans $ 1,500 $ 2,950 $ 26,350 $0.50 Diluted EPS impact $ 0.02 $ 0.04 $ 0.33 $0.40 Provision for unfunded $0.30 commi
Slide 12: Profitability
Profitability Return on Assets (Adjusted)1 Efficiency Ratio (Adjusted)2 2.00% Efficiency Ratio 1.44% Efficiency Ratio ex. Mortgage & Credit Costs 1.50% 1.13% 80.00% 1.00% 70.00% 0.50% 0.33% 60.00% 0.00% 50.00% 1Q19 4Q19 1Q20 40.00% Return on Tangible Equity (Adjusted)1 2014 2015 2016 2017 2018 2019
Slide 13: Total Portfolio Loans
Total Portfolio Loans* $10,000,000 At March 31, 2020, loans totaled $9.77 billion $9,000,000 80% Not Purchased $8,000,000 20% Purchased $7,000,000 Non Owner Land Dev Occupied 2% $6,000,000 21% $5,000,000 1-4 Family Multifamily 29% $4,000,000 4% $3,000,000 $2,000,000 Owner Occupied $1,000,000 17%
Slide 14: Focus on Core Funding
Focus on Core Funding $3,000,000 Non Interest Bearing Demand Deposits 1Q20 Deposits $2,500,000 Noninterest- $2,000,000 bearing 20% $1,500,000 25% Other Interest- bearing $1,000,000 7% Savings $500,000 $- 48% Time ($ in thousands) Liquidity Cost of Funds 1Q19 4Q19 1Q20 • During 1Q19, increased on-bal
Slide 15: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest 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% 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 1Q20 Yield on Earning Assets Cost of Funds Margin ($ in thousands) 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q
Slide 16: Deposit Repricing Opportunities
Deposit Repricing Opportunities Cost of Deposit Trends Actions Taken in March: 1.09% • Aggressively reduced stated rates on NOW, 1.10% MM and CDs 1.00% 0.92% • Reduced $1.8B in money market accounts by .38% (additional adjustments have been made 0.90% 0.84% since March 31, 2020) 0.80% 0.68% Repricin
Slide 17: Non Interest Income (adjusted)
Non Interest Income (adjusted)* ($ in thousands) • Non Interest Income (adjusted)* Diversified sources of noninterest income $50,000 $45,000 • Effect of Durbin Amendment reduced fees and $40,000 commissions by approximately $3.0 million in each $35,000 of 3Q19, 4Q19 and 1Q20 $30,000 $25,000 • 1Q20 r
Slide 18: Four Key Strategic Initiatives
Four Key Strategic Initiatives • 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 / mitiga
Slide 19: Asset Quality Metrics
Asset Quality Metrics NPAs/Total Assets Net Charge-offs/Average Loans $60,000 0.45% $3,000 $2,700 0.14% $50,000 0.40% $2,400 0.12% $40,000 $2,100 0.35% 0.10% $1,800 $30,000 0.08% 0.30% $1,500 $20,000 $1,200 0.06% $10,000 0.25% $900 0.04% $600 $- 0.20% $300 0.02% ($ in thousands) $- 0.00% ($ in thous
Slide 20: Asset Quality Metrics, cont.
Asset Quality Metrics, cont. Allowance/Total Loans Allowance/Nonperforming Loans $120,000 2.00% $120,000 450.00% $100,000 $100,000 1.50% 350.00% $80,000 $80,000 250.00% $60,000 1.00% $60,000 150.00% $40,000 $40,000 0.50% $20,000 $20,000 50.00% $- 0.00% $- -50.00% ($ in thousands) ($ in thousands) Al
Slide 21: Current Expected Credit Losses (CECL)
Current Expected Credit Losses (CECL) 12/31/2019 Incurred Loss 1/1/2020 CECL Adoption 3/31/2020 CECL ALLL as a % of ACL as a % of ACL as a % of ($ in thousands) ALLL Loans ACL Loans ACL Loans Commercial, Financial, Agricultural 10,658 0.78% 22,010 1.61% 25,937 1.82% Lease Financing Receivables 910 1
Slide 22: Loan Portfolio
Loan Portfolio* • Legacy of proactive portfolio management and Consumer Const 4% 8% Land Dev prudent credit underwriting C&I 2% 15% • Granular loan portfolio: o Average loan size is approximately $109,000 o No single commercial collateral type exceeds 1-4 Family 29% 7% of total portfolio o Remain be
Slide 23: Commercial Loan Portfolio
Commercial Loan Portfolio As of March 31, 2020 Manufacturing Office 4% Health Care and Social 9% Assistance Finance and Insurance 9% 4% Real Estate and Rental Multi Family and Leasing 7% 11% Hospitality & Other Accommodations Restaurants & Other 5% Food Services 4% Retail Trade Industries < 3% of 12
Slide 24: 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% 83% 80% 80% 79% 80% 81% 79% 250% 80% 76% 77% 75% 77% 69
Slide 25: Credit Quality Overview
Credit Quality Overview • 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 businesses activities • Identified Hospitality, Restaurant, Entertainment, Retail Trade, Convenience sto
Slide 26: Loan Deferral Program
Loan Deferral Program • As of April 30, 2020, approximately 18% of total loan portfolio under the deferral program • In mid-March, Company offered a 90-day deferral of principal and interest to consumers and commercial customers who met the following criteria at the time of deferral: o Current on ta
Slide 27: Higher Risk Industries
Higher Risk Industries Hospitality Portfolio by Flag1 Entertainment Portfolio by Type1 Other Independent National 6% Flags Golf 9% Other Courses Wyndham Marriott 26% 26% 3% 33% Holiday Inn (IHG) 14% Fitness Theaters Centers 13% 13% Sports Facilities/Instruction Marinas 3% Hilton 19% 35% • Hospitalit
Slide 28: Higher Risk Industries, cont.
Higher Risk Industries, cont. Restaurant Portfolio by Type1 Retail Trade Portfolio by Type1 Other Other Auto Dealers 3% 13% 12% Full-Service 46% Single Tenant 22% Limited- Grocery Unanchored Service Anchored Multi- 51% 4% Tenant 34% Other Anchored 15% • Restaurant represents 2.8% of total loans • Re
Slide 29: Higher Risk Industries, cont.
Higher Risk Industries, cont. C-Store Portfolio by Franchise1 Transportation Portfolio by Type1 Other Nonscheduled Other Air Airport Ops BP 9% & Support 16% 14% Chartered Passenger Texaco Other Air 8% Brands 22% 45% Exxon 11% Freight - Other Other 35% 5% Shell 7% Freight - Circle K Chevron Trucking
Slide 30: CARES Act and Payment Protection Program (PPP)
CARES Act and Payment Protection Program (PPP) • Processed approximately 9,500 applications and obtained funding of approximately $1.3 billion through May 5, 2020 • Offered access to the Program for clients and non-clients • Plan to participate in the Paycheck Protection Program Liquidity Facility (
Slide 31: Four Key Strategic Initiatives
Four Key Strategic Initiatives • 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 / mitiga
Slide 32: Strong Capital Position
Strong Capital Position Minimum Capital 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 1Q20 to be Well Ratio Capitalized Tangible Common 7.52% 7.54% 9.00% 9.56% 8.92% 9.36% 9.62% 9.46% 9.25% 8.48% N/A Equity* Leverage 9.53% 9.16% 10.59% 10.16% 10.11% 10.44% 10.65% 10.56% 10.37% 9.90% 5.00% Tier 1 Risk
Slide 33: Consistent and Strong Dividend
Consistent and Strong Dividend Dividends Per Share – Annually Dividends Per Share – Quarterly $1.00 $0.25 $0.90 $0.80 $0.20 $0.70 $0.60 $0.15 $0.50 $0.40 $0.10 $0.30 $0.20 $0.05 $0.10 $0.00 $0.00 33
Slide 34: Poised for Growth with Added Shareholder Value
Poised for Growth with Added Shareholder Value . $13.9B franchise well positioned in attractive markets in the Southeast . Strategic focus on expanding footprint • Acquisition • De Novo • New lines of business . Opportunity for further profitability improvement . Organic loan growth . Core deposit g
Slide 35: Appendix
Appendix 35
Slide 36: Reconciliation of Non-GAAP Disclosures: Tangible Common Equity
Reconciliation of Non-GAAP Disclosures Tangible Common Equity $ in thousands 2014 2015 2016 2017 2018 Actual shareholders' equity (GAAP) $ 711,651 $ 1,036,818 $ 1,232,883 $ 1,514,983 $ 2,043,913 Intangibles 297,330 474,682 494,608 635,556 977,793 Actual tangible shareholders' equity (non-GAAP) $ 414
Slide 37: Reconciliation of Non-GAAP Disclosures: Efficiency Ratio
Reconciliation of Non-GAAP Disclosures Efficiency Ratio $ in thousands 2014 2015 2016 2017 2018 2019 1Q20 Net interest income (FTE) (GAAP) $ 209,319 $ 248,613 $ 308,002 $ 345,743 $ 402,426 $ 450,413 $ 108,316 Total noninterest income (GAAP) 80,509 108,270 137,231 132,140 143,961 153,254 37,570 Secur
Slide 38: Reconciliation of Non-GAAP Disclosures: Efficiency Ratio Excluding Mortgage & Credit Cost
Reconciliation of Non-GAAP Disclosures Efficiency Ratio (Excluding Mortgage & Credit Cost) $ in thousands 2014 2015 2016 2017 2018 2019 1Q20 Net interest income (FTE) (GAAP) $ 207,446 $ 240,304 $ 299,868 $ 340,794 $ 398,720 $ 445,951 $ 106,712 Total noninterest income (GAAP) 65,645 73,276 86,692 84,
Slide 39: Reconciliation of Non-GAAP Disclosures: Non Interest Income
Reconciliation of Non-GAAP Disclosures Non Interest Income $ in thousands 1Q19 2Q19 3Q19 4Q19 1Q20 Actual non interest income (GAAP) $ 35,885 $ 41,960 $ 37,953 $ 37,456 $ 37,570 Securities gains (losses) 13 (8) 343 - - MSR valuation adjustment - - (3,132) 1,296 (9,571) Actual non interest income (no
Slide 40: Reconciliation of Non-GAAP Disclosures: Diluted Earnings Per Share
Reconciliation of Non-GAAP Disclosures Diluted Earnings Per Share $ in thousands 1Q19 4Q19 1Q20 Net income (GAAP) $ 45,110 $ 38,415 $ 2,008 Merger and conversion expense - 76 - MSR valuation adjustment - (1,296) 9,571 COVID-19 Related Expenses - - 2,903 Tax effect of adjustment noted above 241 (3,46
Slide 41: Reconciliation of Non-GAAP Disclosures: Return on Assets
Reconciliation of Non-GAAP Disclosures Return on Assets $ in thousands 1Q19 4Q19 1Q20 Net income (GAAP) $ 45,110 $ 38,415 $ 2,008 Merger and conversion expense - 76 - MSR valuation adjustment - (1,296) 9,571 COVID-19 Related Expenses - - 2,903 Tax effect of adjustment noted above - 241 (3,467) Net i
Slide 42: Reconciliation of Non-GAAP Disclosures: Return on Tangible Equity
Reconciliation of Non-GAAP Disclosures Return on Tangible Equity $ in thousands 1Q19 4Q19 1Q20 Net income (GAAP) $ 45,110 $ 38,414 $ 2,008 Merger and conversion expense - 76 - MSR valuation adjustment - (1,296) 9,571 COVID-19 Related Expenses - - 2,903 Tax effect of adjustment noted above - 241 (3,4
Slide 43: Investor Inquiries
Investor Inquiries C. Mitchell Waycaster President and Chief Executive Officer 209 TROY STREET TUPELO, MS 38804-4827 Kevin D. Chapman Senior Executive Vice President, PHONE: 1-800-680-1601 Chief Financial Officer and Chief FACSIMILE: 1-662-680-1234 Operating Officer WWW.RENASANT.COM WWW.RENASANTBANK