RENASANT CORPORATION ANNOUNCES 2010 FIRST QUARTER EARNINGS
Renasant Corporation Announces 2010 First Quarter Earnings
TUPELO, Miss., April 20 /PRNewswire-FirstCall/ --Renasant Corporation (Nasdaq: RNST) (the "Company") today announced results for the first quarter of 2010. Net income for the first quarter of 2010 was $3,607,000 compared to $4,031,000 for the fourth quarter of 2009 and $6,006,000 for the first quarter of 2009. Basic and diluted earnings per share were $0.17 during the first quarter of 2010 as compared to basic and diluted earnings per share of $0.19 for the fourth quarter of 2009 and basic earnings per share of $0.29 and diluted earnings per share of $0.28 for the first quarter of 2009.
"During the first quarter of 2010 we saw positive trends as our net interest margin increased, our core deposits grew and we were able to hold noninterest expenses relatively flat compared to the fourth quarter of 2009," commented Renasant Chairman and Chief Executive Officer, E. Robinson McGraw. "As anticipated, our first quarter results reflect the challenging environment for the financial services industry as well as the national economy. As we adapt to this challenging environment and focus on capitalizing on the opportunities presented in our markets, we believe we are positioned to improve earnings in future quarters."
Total deposits grew to $2.71 billion at March 31, 2010, representing a 5.35% increase from December 31, 2009 and a 0.91% increase since March 31, 2009. In reducing our reliance on other wholesale funding sources, the Company continued to pay down borrowed funds and reduced its reliance on public fund deposits through increasing core deposits. Noninterest bearing demand deposits grew approximately $10 million, or 3.31%, during the first quarter of 2010 as compared to December 31, 2009.
Total loans were approximately $2.31 billion at the end of the first quarter of 2010, a decrease from $2.35 billion at December 31, 2009 and $2.51 billion at March 31, 2009. As anticipated, the decline was primarily attributable to the reduction of exposure to construction and land development loans. In addition, total loans were affected by the Company's exit from the student lending program due to recent legislation affecting the ability of banks to make these loans. The sale of our student loans reduced total loans over $10 million at March 31, 2010 compared to December 31, 2009.
Total assets as of March 31, 2010 were approximately $3.64 billion, a slight increase since December 31, 2009 and a 4.04% decrease from March 31, 2009. The Company's Tier 1 leverage capital ratio was 8.74%, its Tier I risk-based capital ratio was 11.19%, and its total risk-based capital ratio was 12.44%.
"We increased all of our capital ratios during the first quarter of 2010 as compared to the fourth quarter of 2009 and we remain above well capitalized thresholds," said McGraw. "We are particularly pleased that our leverage ratio has continually increased quarter over quarter during the last year."
Net interest income was $24,410,000 for the first quarter of 2010 as compared to $25,313,000 for the same period in 2009. Net interest margin was 3.27% for the first quarter of 2010 compared to 3.22% for the fourth quarter of 2009 and 3.19% for the first quarter of 2009. The improvement in net interest margin was achieved despite a 4 basis point reduction in the yield on earning assets as the Company recognized higher levels of premium amortization resulting from increased prepayments on its mortgage backed securities portfolio.
Contributing to the improvement in net interest margin was a continued effort to improve the Company's funding costs by replacing higher costing borrowings with lower costing deposits. The Company's cost of funding was 1.95% for the first quarter of 2010 as compared to 2.06% for the fourth quarter of 2009 and 2.24% for the first quarter of 2009.
"We are seeing positive results from our efforts to improve our net interest margin even as interest rates remain at historically low levels," commented McGraw. "We anticipate this upward trend in our net interest margin continuing throughout 2010."
Noninterest income was $12,484,000 for the first quarter of 2010 as compared to $13,419,000 for the fourth quarter of 2009 and $14,762,000 for the first quarter of 2009. The primary reduction in noninterest income was due to a decline in production from our mortgage loan division. During the first quarter of 2009, the Company experienced increased production in residential mortgage loans being refinanced due to a decline in mortgage interest rates.
"Despite a decline in mortgage loan production during the first quarter of 2010 that affected noninterest income, early second quarter 2010 production is showing encouraging signs. In addition, we experienced growth in debit card revenue as well as gains in revenue from our trust division during the first quarter of 2010," stated McGraw.
Noninterest expense was $25,634,000 for the first quarter of 2010 as compared to $26,920,000 for the first quarter of 2009, a 4.78% decrease; noninterest expense remained relatively unchanged on a linked quarter basis. The decline in year over year noninterest expense was due to a reduction in personnel, occupancy and equipment expense which more than offset increased expenses related to other real estate owned.
Annualized net charge-offs as a percentage of average loans were 0.81% for the first quarter of 2010, down from 0.83% for the fourth quarter of 2009 and up from 0.75% for the first quarter of 2009. Non-performing loans as a percentage of total loans were 2.37% at March 31, 2010, as compared to 2.13% at December 31, 2009 and 2.69% at March 31, 2009. Loans 30-89 days past due as a percentage of total loans were 1.80% at March 31, 2010, as compared to 1.03% at December 31, 2009 and 1.04% at March 31, 2009. The allowance for loan losses as a percentage of loans was 1.78% at March 31, 2010, as compared to 1.67% at December 31, 2009 and 1.40% at March 31, 2009. The Company recorded a provision for loan losses of $6,665,000 for the first quarter of 2010 as compared to $7,800,000 for the fourth quarter of 2009 and $5,040,000 for the first quarter of 2009.
Non-performing loans (loans 90 days or more past due and nonaccrual loans) were $54,604,000 at March 31, 2010, as compared to $50,025,000 at December 31, 2009 and $67,380,000 at March 31, 2009.
Other real estate owned was $62,508,000 on March 31, 2010 as compared to $58,568,000 at December 31, 2009 and $25,318,000 at March 31, 2009. Other real estate owned increased as the Company took possession of the real properties securing problem loans in order to control the liquidation of these properties.
"Our policy is to aggressively recognize potential issues in our credit portfolio and address them as quickly as possible. In order to provide for these potential issues we believed it was prudent to have significantly increased our provision for loan losses over the past six quarters. In addition, members of our special assets division continue their proactive efforts to market other real estate owned while at the same time maintaining very low loss rates," stated McGraw. "Even though the current banking environment remains a challenge, our key markets are fundamentally sound and we are optimistic in our positioning for long term success."
CONFERENCE CALL INFORMATION:
A live audio webcast of a conference call with analysts will be available beginning at 10:00 a.m. Eastern on Wednesday, April 21, 2010, through the Company's website: www.renasant.com or http://www.talkpoint.com/viewer/starthere.asp?Pres=130551. The event will be archived on the Company's website for one year. If Internet access is unavailable, the conference may also be heard live (listen-only) via telephone by dialing 1-800-860-2442 in the United States and requesting the Renasant First Quarter 2010 Earnings Webcast and Conference Call. International participants should dial 1-412-858-4600.
ABOUT RENASANT CORPORATION:
Renasant Corporation is the parent of Renasant Bank and Renasant Insurance. Renasant has assets of approximately $3.6 billion and operates over 65banking, mortgage, financial services and insurance offices in Mississippi, Tennessee and Alabama.
NOTE TO INVESTORS:
This news release may contain, or incorporate by reference, statements which may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward looking statements usually include words such as "expects," "projects," "anticipates," "believes," "intends," "estimates," "strategy," "plan," "potential," "possible" and other similar expressions.
Prospective investors are cautioned that any such forward-looking statements are not guarantees for future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include significant fluctuations in interest rates, inflation, economic recession, significant changes in the federal and state legal and regulatory environment, significant underperformance in our portfolio of outstanding loans, and competition in our markets. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.
Contacts For Media: John Oxford Vice President Director of External Affairs (662) 680-1219 joxford@renasant.com For Financials: Stuart Johnson Senior Executive Vice President Chief Financial Officer (662) 680-1472 stuartj@renasant.com
RENASANT CORPORATION
(Unaudited)
(Dollars in thousands, except per share data)
Q1 2010
- For the Three Months
2010 2009 Q1 2009 Ended March 31,
First Fourth Third Second First Percent Percent
Statement of
earnings Quarter Quarter Quarter Quarter Quarter Variance 2010 2009 Variance
Interest
income -
taxable
equivalent
basis $ 40,900 $ 42,526 $ 43,820 $ 43,836 $ 44,988 (9.09) $ 40,900 $ 44,988 (9.09)
Interest
income $ 39,708 $ 41,331 $ 42,614 $ 42,709 $ 43,910 (9.57) $ 39,708 $ 43,910 (9.57)
Interest
expense 15,298 16,529 17,423 18,549 18,597 (17.74) 15,298 18,597 (17.74)
Net interest
income 24,410 24,802 25,191 24,160 25,313 (3.57) 24,410 25,313 (3.57)
Provision for
loan losses 6,665 7,800 7,350 6,700 5,040 32.24 6,665 5,040 32.24
Net interest
income after
provision 17,745 17,002 17,841 17,460 20,273 (12.47) 17,745 20,273 (12.47)
Service
charges on
deposit
accounts 5,090 5,801 5,379 5,395 5,425 (6.18) 5,090 5,425 (6.18)
Fees and
commissions
on loans and
deposits 3,721 3,554 3,961 4,424 4,682 (20.53) 3,721 4,682 (20.53)
Insurance
commissions
and fees 834 705 949 837 828 0.72 834 828 0.72
Trust revenue 584 559 501 488 491 18.94 584 491 18.94
Securities
(losses)
gains (160) 123 - 1,123 427 (137.47) (160) 427 (137.47)
Gain on sale
of mortgage
loans 1,169 1,665 1,832 2,293 1,776 (34.18) 1,169 1,776 (34.18)
Other 1,246 1,012 1,331 864 1,133 9.97 1,246 1,133 9.97
Total
non-interest
income 12,484 13,419 13,953 15,424 14,762 (15.43) 12,484 14,762 (15.43)
Salaries and
employee
benefits 13,197 13,572 13,363 13,736 14,744 (10.49) 13,197 14,744 (10.49)
Occupancy and
equipment 2,931 2,981 3,045 3,063 3,249 (9.79) 2,931 3,249 (9.79)
Data
processing 1,426 1,407 1,439 1,430 1,329 7.30 1,426 1,329 7.30
Amortization
of
intangibles 476 482 489 494 501 (4.99) 476 501 (4.99)
Other 7,604 7,141 7,782 8,409 7,097 7.14 7,604 7,097 7.14
Total
non-interest
expense 25,634 25,583 26,118 27,132 26,920 (4.78) 25,634 26,920 (4.78)
Income before
income taxes 4,595 4,838 5,676 5,752 8,115 (43.38) 4,595 8,115 (43.38)
Income taxes 988 807 1,451 1,496 2,109 (53.15) 988 2,109 (53.15)
Net income $ 3,607 $ 4,031 $ 4,225 $ 4,256 $ 6,006 (39.94) $ 3,607 $ 6,006 (39.94)
Basic
earnings per
share $ 0.17 $ 0.19 $ 0.20 $ 0.20 $ 0.29 (41.38) $ 0.17 $ 0.29 (41.38)
Diluted
earnings per
share 0.17 0.19 0.20 0.20 0.28 (39.29) 0.17 0.28 (39.29)
Average basic
shares
outstanding 21,082,991 21,078,873 21,075,879 21,073,228 21,067,539 0.07 21,082,991 21,067,539 0.07
Average
diluted
shares
outstanding 21,208,934 21,217,841 21,213,839 21,193,560 21,188,397 0.10 21,208,934 21,188,397 0.10
Common shares
outstanding 21,082,991 21,082,991 21,078,828 21,074,568 21,067,539 0.07 21,082,991 21,067,539 0.07
Cash dividend
per common
share $ 0.17 $ 0.17 $ 0.17 $ 0.17 $ 0.17 - $ 0.17 $ 0.17 -
Performance
ratios
Return on
average
shareholders'
equity 3.55% 3.87% 4.12% 4.22% 6.04% 3.55% 6.04%
Return on
average
shareholders'
equity,
excluding
amortization
expense 3.84% 4.15% 4.41% 4.52% 6.35% 3.84% 6.35%
Return on
average
assets 0.40% 0.44% 0.46% 0.46% 0.65% 0.40% 0.65%
Return on
average
assets,
excluding
amortization
expense 0.44% 0.47% 0.49% 0.49% 0.68% 0.44% 0.68%
Net interest
margin (FTE) 3.27% 3.22% 3.22% 3.04% 3.19% 3.27% 3.19%
Yield on
earning
assets (FTE) 5.23% 5.26% 5.33% 5.27% 5.46% 5.23% 5.46%
Average
earning
assets to
average
assets 87.28% 88.19% 88.73% 89.25% 88.85% 87.28% 88.85%
Average loans
to average
deposits 88.47% 92.96% 94.22% 94.40% 99.13% 88.47% 99.13%
Noninterest
income (less
securities
gains/
losses) to
average
assets 1.42% 1.45% 1.51% 1.53% 1.54% 1.42% 1.54%
Noninterest
expense to
average
assets 2.87% 2.79% 2.82% 2.91% 2.90% 2.87% 2.90%
Net overhead
ratio 1.45% 1.34% 1.31% 1.38% 1.36% 1.45% 1.36%
Efficiency
ratio (FTE) 67.31% 64.91% 64.73% 66.65% 65.41% 67.31% 65.41%
*Percent variance not meaningful
RENASANT CORPORATION
(Unaudited)
(Dollars in thousands, except per share data)
Q1 2010
- For the Three Months
2010 2009 Q1 2009 Ended March 31,
First Fourth Third Second First Percent Percent
Average
balances Quarter Quarter Quarter Quarter Quarter Variance 2010 2009 Variance
$ $ $ $ $ $ $
Total assets 3,621,361 3,640,514 3,675,592 3,738,852 3,763,245 (3.77) 3,621,361 3,763,245 (3.77)
Earning assets 3,160,620 3,210,554 3,261,527 3,337,103 3,343,699 (5.48) 3,160,620 3,343,699 (5.48)
Securities 697,913 719,298 703,976 701,894 696,068 0.27 697,913 696,068 0.27
Loans, net of
unearned 2,354,443 2,397,195 2,465,298 2,542,021 2,587,436 (9.00) 2,354,443 2,587,436 (9.00)
Intangibles 190,881 191,591 192,078 192,568 193,067 (1.13) 190,881 193,067 (1.13)
Non-interest
bearing
deposits $ 310,726 $ 307,753 $ 297,390 $ 293,546 $ 299,265 3.83 $ 310,726 $ 299,265 3.83
Interest
bearing
deposits 2,332,741 2,247,854 2,286,184 2,342,788 2,250,324 3.66 2,332,741 2,250,324 3.66
Total
deposits 2,643,467 2,555,607 2,583,574 2,636,334 2,549,589 3.68 2,643,467 2,549,589 3.68
Borrowed funds 530,654 632,689 647,919 662,387 815,548 (34.93) 530,654 815,548 (34.93)
Shareholders'
equity 412,132 413,773 406,779 404,456 403,229 2.21 412,132 403,229 2.21
Asset quality
data
Nonaccrual
loans $ 44,688 $ 39,454 $ 37,995 $ 55,217 $ 47,591 (6.10) $ 44,688 $ 47,591 (6.10)
Loans 90 past
due or more 9,916 10,571 10,661 10,284 19,789 (49.89) 9,916 19,789 (49.89)
Non-performing
loans 54,604 50,025 48,656 65,501 67,380 (18.96) 54,604 67,380 (18.96)
Other real
estate owned
and
repossessions 62,508 58,568 47,457 30,546 25,318 146.89 62,508 25,318 146.89
Non-performing
assets $ 117,112 $ 108,593 $ 96,113 $ 96,047 $ 92,698 26.34 $ 117,112 $ 92,698 26.34
Net loan
charge-offs
(recoveries) $ 4,716 $ 5,007 $ 6,962 $ 5,917 $ 4,764 (1.01) $ 4,716 $ 4,764 (1.01)
Allowance for
loan losses 41,094 39,145 36,352 35,964 35,181 16.81 41,094 35,181 16.81
Non-performing
loans / total
loans 2.37% 2.13% 2.03% 2.65% 2.69% 2.37% 2.69%
Non-performing
assets / total
assets 3.22% 2.98% 2.64% 2.59% 2.44% 3.22% 2.44%
Allowance for
loan losses /
total loans 1.78% 1.67% 1.51% 1.46% 1.40% 1.78% 1.40%
Allowance for
loan losses /
non-performing
loans 75.26% 78.25% 74.71% 54.91% 52.21% 75.26% 52.21%
Annualized net
loan
charge-offs /
average loans 0.81% 0.83% 1.12% 0.93% 0.75% 0.81% 0.75%
Balances at
period end
$ $ $ $ $ $ $
Total assets 3,641,709 3,641,081 3,642,657 3,701,957 3,795,217 3,641,709 3,795,217 (4.04)
Earning assets 3,200,159 3,173,039 3,188,554 3,236,615 3,368,962 3,200,159 3,368,962 (5.01)
Securities 741,207 714,164 738,204 684,723 709,950 741,207 709,950 4.40
Mortgage loans
held for sale 16,597 25,749 24,091 49,565 55,194 16,597 55,194 (69.93)
Loans, net of
unearned 2,308,335 2,347,615 2,402,423 2,468,844 2,506,780 2,308,335 2,506,780 (7.92)
Intangibles 190,881 191,357 191,839 192,328 192,822 190,881 192,822 (1.01)
Non-interest
bearing
deposits $ 315,064 $ 304,962 $ 297,858 $ 292,129 $ 303,536 $ 315,064 $ 303,536 3.80
Interest
bearing
deposits 2,398,784 2,271,138 2,263,126 2,308,081 2,385,769 2,398,784 2,385,769 0.55
Total
deposits 2,713,848 2,576,100 2,560,984 2,600,210 2,689,305 2,713,848 2,689,305 0.91
Borrowed funds 483,183 618,024 635,076 665,755 672,130 483,183 672,130 (28.11)
Shareholders'
equity 410,557 410,122 410,473 400,680 400,095 410,557 400,095 2.61
Market value
per common
share $ 16.18 $ 13.60 $ 14.85 $ 15.02 $ 12.56 $ 16.18 $ 12.56 28.82
Book value per
common share 19.47 19.45 19.47 19.01 18.99 19.47 18.99 2.54
Tangible book
value per
common share 10.42 10.38 10.37 9.89 9.84 10.42 9.84 5.91
Shareholders'
equity to
assets
(actual) 11.27% 11.26% 11.27% 10.82% 10.54% 11.27% 10.54%
Tangible
capital ratio 6.37% 6.34% 6.34% 5.94% 5.75% 6.37% 5.75%
Leverage ratio 8.74% 8.68% 8.56% 8.37% 8.28% 8.74% 8.28%
Tier 1
risk-based
capital ratio 11.19% 11.12% 11.04% 10.92% 11.00% 11.19% 11.00%
Total
risk-based
capital ratio 12.44% 12.37% 12.29% 12.17% 12.25% 12.44% 12.25%
Detail of
Loans by
Category
Commercial,
financial,
agricultural $ 276,749 $ 281,329 $ 280,930 $ 292,177 $ 301,899 $ 276,749 $ 301,899 (8.33)
Lease
financing 677 778 936 1,283 1,434 677 1,434 (52.79)
Real estate -
construction 110,121 133,299 153,367 180,202 210,747 110,121 210,747 (47.75)
Real estate -
1-4 family
mortgages 809,271 820,917 848,267 878,263 872,796 809,271 872,796 (7.28)
Real estate -
commercial
mortgages 1,055,102 1,040,589 1,048,135 1,054,169 1,055,537 1,055,102 1,055,537 (0.04)
Installment
loans to
individuals 56,415 70,703 70,788 62,750 64,367 56,415 64,367 (12.35)
Loans, net of $ $ $ $ $ $ $
unearned 2,308,335 2,347,615 2,402,423 2,468,844 2,506,780 2,308,335 2,506,780 (7.92)
*Percent variance not meaningful
SOURCE Renasant Corporation