Renasant Corporation · NYSE:RNST
Renasant — Investor Presentation (July 2018)
48 slides from Renasant's investor presentation, Jul 31, 2018
Slide 1: 3Q18 Investor Presentation
[NRENASANT TORPORATION 3Q18 Investor Presentation
Slide 2: Forward-Looking Statements
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
Slide 3: Current Footprint
Current Footprint More than 180 banking, lending, wealth management and insurance offices Portfolio Loans* Northern 27% Eastern 25% Western 27% Central 21% Total Deposits* Northern 18% Western Eastern 45% 22% Central 15% 3 *As of June 30, 2018
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 Assets $3.59 Billion Gross Loans $2.28 Billion Deposits $2.69 Billion Source: SNL Financial
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: Current Footprint
Current Footprint Over 180 banking, lending, wealth management and insurance offices Highlights* Assets $10.5 billion Gross Loans $7.8 billion Deposits $8.4 billion *As of June 30, 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 8
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 ‒ 32.87 RNST shares and $77.50 of cash for each
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. Brand Branches (8) . Largest MSA in the Southeast by GDP at ~$300bn BrandExpress ‒ 8th largest in the U.S. Branch
Slide 12: Our Pro Forma Atlanta Franchise
Our Pro Forma Atlanta Franchise Atlanta MSA Deposit Market Share Pro Forma Atlanta MSA Branch Footprint (1) Deposits Market Rank Institution ($mm) Share Branches Pickens 1 Wells Fargo & Co. $19,950 20.5 % 182 2 Bank of America Corp. 17,014 17.5 131 Dawson 3 SunTrust Banks Inc. 10,082 10.4 155 75 Che
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 val
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 Nashville (1) 40 Loans $9.5 bn TENNESSEE Deposits Memphis 65 24 $9.8 bn Huntsville 75 Branches 162 Tupelo 20 Loans / Deposits 96.5% (2) Birmingham $2.5 bn Atlanta Market Cap Augusta 20
Slide 15: 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 16: Total Assets
Total Assets • 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 • Reduction of $99 million $6,000 in mortgage loans held for sale • Purchased investment securities of $318
Slide 17: Diluted Earnings Per Share
Diluted Earnings Per Share* $3.00 $0.80 $0.75 $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 1Q18 2Q18
Slide 18: Enhanced Profitability
Enhanced Profitability Return on Assets* Return on Tangible Equity* 1.60% 18.00% 16.92% 1.44% 16.37% 16.23% 16.34% 1.39% 16.10% 1.40% 16.00% 14.48% 1.20% 1.20% 1.15% 14.00% 1.10% 12.17% 1.03% 12.00% 1.00% 0.80% 10.00% 9.40% 0.80% 0.66% 8.00% 0.60% 6.00% 0.40% 4.00% 0.20% 2.00% 0.00% 0.00% 2012 2013
Slide 19: Total Portfolio Loans
Total Portfolio Loans $8,000,000 • Loans not purchased increased $7,000,000 $228 million, or 16% annualized, during 2Q18 $6,000,000 • Net loan growth totaled $70 $5,000,000 million during 2Q18 $4,000,000 • Company maintains strong $3,000,000 pipelines throughout all markets which will continue to $2
Slide 20: Diversified Loan Portfolio
Diversified Loan Portfolio . At June 30, 2018, loans totaled $7.8 billion 78% Not Purchased 22% Purchased Non Owner Occupied 25% Owner Occupied 18% C&I 13% 1-4 Family Consumer 32% 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% 277% 91% 267% 87% 258% 251% 83% 82% 83% 244% 81% 80% 80
Slide 22: Focus on Core Funding
Focus on Core Funding $9,000,000 2.50% $8,000,000 $7,000,000 2.00% $6,000,000 ) 1.50% $5,000,000 $4,000,000 1.00% $3,000,000 ($ in thousands $2,000,000 0.50% $1,000,000 $- 0.00% 2013 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Total Deposits Cost of Deposits Fed Funds $2,000,000 Non
Slide 23: Net Interest Income and Net Interest Expense
Net Interest Income and Net Interest Expense 6.00% 6.00% 5.00% 5.00% 4.00% 4.00% 3.00% 3.00% Margin Yield/Cost 2.00% 2.00% 1.00% 1.00% 0.00% 0.00% 2013 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Yield on Earning Assets Cost of Funds Margin ($ in thousands) 2013 2014 2015 1Q16 2Q16 3
Slide 24: Sources of Non Interest Income
Sources of Non Interest Income* ($ in thousands) • Diversified sources of noninterest income Non Interest Income* $45,000 • Opportunities for growing Non Interest Income $40,000 $35,000 Expansion of Trust Division Wealth Management $30,000 services into larger, metropolitan markets $25,000 Expans
Slide 25: Improved Efficiency
Improved Efficiency 80.00% • Continued focus on managing noninterest expenses and 75.00% improving efficiency • Provided resources for eight 70.00% de novo expansions since 2011 • Fluctuations in mortgage loan 65.00% expense driven by higher mortgage production 60.00% 55.00% 50.00% 45.00% 2013 2014
Slide 26: 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 27: Non Performing Assets Continue to Decline
Non Performing Assets Continue to Decline Both on a Linked Quarter and Y-O-Y Basis 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 NPL’s $11.1M $10.1M 0.50% ORE $4.7M $
Slide 28: Proactive in Providing Reserves for Problem Credit Resolution
Proactive in Providing Reserves for Problem Credit Resolution $6,000 450% • Net charge-offs: 400% $5,000 • 4 bps in 2Q18 350% • Provision for loan losses: $4,000 300% • $1.81 million in 2Q18 250% $3,000 ($ in thousands) 200% $2,000 150% 100% $1,000 50% $- 0% 2013 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2
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 $10,000 $5,000 $0 2013 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 ($ in thousands) *Amounts exclude loans and assets purchased in connection with rec
Slide 30: 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 31: Strong Capital Position
Strong Capital Position Tangible Common Equity Ratio* • Maintained dividend throughout economic 10.50% downturn 9.50% • Increased quarterly dividend three times since 2Q16 8.50% • Regulatory capital ratios are well above the minimum for well-capitalized classification 7.50% • Capital level positions
Slide 32: Consistent and Strong Dividend
Consistent and Strong Dividend Dividends Per Share – Annual Payout Dividends Per Share – Quarterly Payout $0.80 $0.25 $0.70 $0.20 $0.60 $0.50 $0.15 $0.40 $0.10 $0.30 $0.20 $0.05 $0.10 $0.00 $0.00 32
Slide 33: Poised for Growth with Added Shareholder Value
Poised for Growth with Added Shareholder Value . $10.5B 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 • Acquisit
Slide 34: Appendix
Appendix 34
Slide 35: Alabama – Central Region
Alabama – Central Region . Mazda and Toyota announced $1.6 billion investment creating up to 4,000 jobs by 2021 Alabama Deposit Market Share . Ranked #6 on the Area Development Top States for Doing Business 2016 Deposits Market Rank Institution ($mm) Share Branches . Honda, Hyundai, Mercedes-Benz an
Slide 36: Florida – Central Region
Florida – Central Region . Entered the Florida market through the acquisition of HBOS. Florida Deposit Market Share Moved into FL with 6 full-services branches along I-75 Deposits Market Rank Institution ($mm) Share Branches . Opened Mortgage Production Offices in Destin and Jacksonville in 1Q 1 B
Slide 37: Georgia – Eastern Region
Georgia – Eastern Region . Entered the North GA market through two FDIC loss share transactions Georgia Deposit Market Share 12 full-service locations Deposits Market Rank Institution ($mm) Share Branches Expanded services include mortgage and wealth management personnel 1 SunTrust Banks Inc. $5
Slide 38: Mississippi – Western Region
Mississippi – Western Region . Increased presence in Mississippi with the recent acquisition of Metropolitan BancGroup, Inc., which Mississippi Deposit Market Share closed 7/1/17 Deposits Market Added 4-full service branches Rank Institution ($mm) Share Branches 1 Trustmark Corp. $7,127 13.4 % 122
Slide 39: Tennessee – Northern Region
Tennessee – Northern Region . Our Tennessee Operations Tennessee Deposit Market Share The Knoxville/Maryville MSA location opened in late Q2 ‘12 Deposits Market East Tennessee operations currently have 4 full-service branches, $304 million in Rank Institution ($mm) Share Branches loans and $133
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
Additional Information In connection with the proposed merger of Brand into Renasant, on June 27, 2018 Renasant filed with the Securities and Exchange Commission (the “SEC”) a definitive proxy statement for Brand that also constitutes a definitive prospectus of Renasant, and Renasant may file additi
Slide 48: Investor Inquiries
Investor Inquiries E. Robinson McGraw Chairman of the Board and Executive Chairman 209 TROY STREET TUPELO, MS 38804-4827 C. Mitchell Waycaster President and Chief Executive Officer PHONE: 1-800-680-1601 FACSIMILE: 1-662-680-1234 Kevin D. Chapman WWW.RENASANT.COM Senior Executive Vice President, WWW.