Mississippi | 001-13253 | 64-0676974 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit Number | Description of Exhibit | |
23 | Consent of BKD, LLP. | |
99.1 | Audited financial statements of First M&F as of and for the fiscal year ended December 31, 2012 (incorporated by reference to First M&F’s Annual Report on Form 10-K for the year ended December 31, 2012, including the report of BKD, LLP on such audited financial statements (File No. 000-09424), filed with the SEC on March 8, 2013). | |
99.2 | Unaudited financial statements of First M&F as of and for the six-month period ended June 30, 2013 (incorporated by reference to First M&F’s Quarterly Report on Form 10-Q for the period ended June 30, 2012 (File No. 000-09424), filed with the SEC on August 14, 2013). | |
99.3 | Pro forma financial information as of and for the six-month period ended June 30, 2012 and the twelve-month period ended December 31, 2012. |
RENASANT CORPORATION | |||
Date: November 14, 2013 | By: | /s/ E. Robinson McGraw | |
E. Robinson McGraw | |||
Chairman, President and Chief | |||
Executive Officer |
Exhibit Number | Description of Exhibit | |
23 | Consent of BKD, LLP. | |
99.3 | Pro forma financial information as of and for the six-month period ended June 30, 2012 and the twelve-month period ended December 31, 2012. |
• | net cash used or generated in First M&F’s operations between the signing of the merger agreement and completion of the merger; |
• | other changes in First M&F’s net assets that occurred prior to the completion of the merger, which could cause material differences in the information presented below; and |
• | changes in the financial results of the combined company, which could change the future discounted cash flow projections. |
• | the accompanying notes to the unaudited pro forma condensed combined financial statements; |
• | RNST’s separate audited historical consolidated financial statements and accompanying notes as of and for the year ended December 31, 2012, included in RNST’s Annual Report on Form 10-K for the year ended December 31, 2012; |
• | First M&F’s separate audited historical consolidated financial statements and accompanying notes as of and for the year ended December 31, 2012, included in First M&F’s Annual Report on Form 10-K for the year ended December 31, 2012; |
• | RNST’s separate unaudited historical consolidated financial statements and accompanying notes as of and for the three and six months ended June 30, 2013, and as of and for the three and nine months ended September 30, 2013, included in RNST’s Quarterly Report on Form 10-Q for the quarters ended June 30, 2013, and September 30, 2013, respectively; |
• | First M&F’s separate unaudited historical consolidated financial statements and accompanying notes as of and for the three months and six months ended June 30, 2013, included in First M&F’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013; and |
• | other information pertaining to RNST and First M&F contained in previous filings with the Securities and Exchange Commission. |
Renasant Corporation | First M&F Corporation | Redemption of CDCI Preferred Stock | Purchase Accounting Adjustments | Pro Forma | |||||||||||||||
6/30/2013 | 6/30/2013 | 6/30/2013 | |||||||||||||||||
(as reported) | (as reported) | Combined | |||||||||||||||||
Assets | |||||||||||||||||||
Cash and due from banks | $ | 79,015 | $ | 194,626 | $ | — | $ | — | $ | 273,641 | |||||||||
Securities | 746,530 | 273,553 | (34,090 | ) | (a) | 253 | (b) | 986,246 | |||||||||||
Mortgage loans held for sale | 50,268 | 2,614 | — | — | 52,882 | ||||||||||||||
Loans, net of unearned income | 2,884,511 | 967,013 | — | (65,027 | ) | (c) | 3,786,497 | ||||||||||||
Allowance for loan losses | (47,034 | ) | (19,431 | ) | — | 19,431 | (d) | (47,034 | ) | ||||||||||
Loans, net | 2,837,477 | 947,582 | — | (45,596 | ) | 3,739,463 | |||||||||||||
Premises and equipment, net | 70,117 | 36,438 | — | (2,314 | ) | (e) | 104,241 | ||||||||||||
Other real estate owned | 61,082 | 19,721 | — | (5,797 | ) | (f) | 75,006 | ||||||||||||
Goodwill | 184,779 | — | — | 91,840 | (g) | 276,619 | |||||||||||||
Other intangible assets, net | 5,429 | 3,946 | — | 21,087 | (h) | 30,462 | |||||||||||||
Other assets | 214,584 | 49,325 | — | 9,042 | (i) | 272,951 | |||||||||||||
Total assets | $ | 4,249,281 | $ | 1,527,805 | $ | (34,090 | ) | $ | 68,515 | $ | 5,811,511 | ||||||||
Liabilities and shareholders’ equity | |||||||||||||||||||
Liabilities | |||||||||||||||||||
Deposits | |||||||||||||||||||
Noninterest‑bearing | $ | 560,965 | $ | 304,734 | $ | — | $ | — | $ | 865,699 | |||||||||
Interest‑bearing | 2,944,193 | 1,061,474 | — | 3,207 | (j) | 4,008,874 | |||||||||||||
Total deposits | 3,505,158 | 1,366,208 | — | 3,207 | 4,874,573 | ||||||||||||||
Borrowings | 195,789 | 35,714 | — | (12,372 | ) | (k) | 219,131 | ||||||||||||
Other liabilities | 47,656 | 9,310 | — | 4,638 | (l) | 61,604 | |||||||||||||
Total liabilities | 3,748,603 | 1,411,232 | — | (4,527 | ) | 5,155,308 | |||||||||||||
Shareholders’ equity | |||||||||||||||||||
Preferred stock | — | 19,569 | (19,569 | ) | (a) | — | — | ||||||||||||
Common stock | 133,579 | 46,182 | — | (15,353 | ) | (m) | 164,408 | ||||||||||||
Treasury stock, at cost | (24,814 | ) | — | — | — | (24,814 | ) | ||||||||||||
Additional paid-in capital | 218,466 | 32,920 | (14,521 | ) | (a) | 106,297 | (n) | 343,162 | |||||||||||
Retained earnings | 187,618 | 20,876 | — | (20,876 | ) | (n) | 187,618 | ||||||||||||
Accumulated other comprehensive loss, net of taxes | (14,171 | ) | (2,974 | ) | — | 2,974 | (n) | (14,171 | ) | ||||||||||
Total shareholders’ equity | 500,678 | 116,573 | (34,090 | ) | 73,042 | 656,203 | |||||||||||||
Total liabilities and shareholders’ equity | $ | 4,249,281 | $ | 1,527,805 | $ | (34,090 | ) | $ | 68,515 | $ | 5,811,511 |
Twelve months ended December 31, 2012 | ||||||||||||||||
Renasant Corporation | First M&F Corporation | Pro Forma Adjustments | Pro Forma | |||||||||||||
(as reported) | (as reported) | (Combined) | ||||||||||||||
Interest income | ||||||||||||||||
Loans | $ | 137,800 | $ | 55,772 | $ | 3,545 | (c) | $ | 197,117 | |||||||
Securities | 21,314 | 7,004 | (1,090 | ) | (a)(b) | 27,228 | ||||||||||
Other | 199 | 146 | — | 345 | ||||||||||||
Total interest income | 159,313 | 62,922 | 2,455 | 224,690 | ||||||||||||
Interest expense | ||||||||||||||||
Deposits | 19,030 | 8,627 | (2,566 | ) | (j) | 25,091 | ||||||||||
Borrowings | 6,945 | 2,902 | 548 | (k) | 10,395 | |||||||||||
Total interest expense | 25,975 | 11,529 | (2,018 | ) | 35,486 | |||||||||||
Net interest income | 133,338 | 51,393 | 4,473 | 189,204 | ||||||||||||
Provision for loan losses | 18,125 | 8,520 | — | (d) | 26,645 | |||||||||||
Net interest income after provision for loan losses | 115,213 | 42,873 | 4,473 | 162,559 | ||||||||||||
Noninterest income(1) | ||||||||||||||||
Service charges on deposits | 18,612 | 10,180 | — | 28,792 | ||||||||||||
Fees and commissions | 17,595 | — | — | 17,595 | ||||||||||||
Insurance commissions | 3,630 | 3,486 | — | 7,116 | ||||||||||||
Wealth management revenue | 6,926 | 587 | — | 7,513 | ||||||||||||
Gains on sales of securities, net of other than temporary impairment | 1,894 | 528 | — | 2,422 | ||||||||||||
Gains on sales of mortgage loans | 12,499 | 5,304 | — | 17,803 | ||||||||||||
BOLI income | 3,370 | 696 | — | 4,066 | ||||||||||||
Other | 4,185 | 2,017 | — | 6,202 | ||||||||||||
Total noninterest income | 68,711 | 22,798 | — | 91,509 | ||||||||||||
Noninterest expense(1) | ||||||||||||||||
Salaries and employee benefits | 81,002 | 26,887 | — | 107,889 | ||||||||||||
Data processing | 8,724 | 1,428 | — | 10,152 | ||||||||||||
Net occupancy and equipment | 14,597 | 5,280 | (77 | ) | (e) | 19,800 | ||||||||||
Other real estate owned | 13,596 | 5,186 | — | 18,782 | ||||||||||||
Advertising and public relations | 4,835 | 1,071 | — | 5,906 | ||||||||||||
Intangible amortization | 1,381 | 427 | 4,124 | (h) | 5,932 | |||||||||||
Other | 26,324 | 15,999 | — | 42,323 | ||||||||||||
Total noninterest expense | 150,459 | 56,278 | 4,047 | 210,784 | ||||||||||||
Income before income taxes | 33,465 | 9,393 | 426 | 43,284 | ||||||||||||
Income taxes | 6,828 | 2,408 | 164 | (o) | 9,400 | |||||||||||
Net income | 26,637 | 6,985 | 262 | 33,884 | ||||||||||||
Dividends and accretion on preferred stock | — | 1,901 | (1,901 | ) | (a) | — | ||||||||||
Net income applicable to common stock(1) | $ | 26,637 | $ | 5,084 | $ | 2,163 | $ | 33,884 | ||||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 1.06 | $ | 1.08 | ||||||||||||
Diluted | $ | 1.06 | $ | 1.08 | ||||||||||||
Dividends per common share | $ | 0.68 | $ | 0.68 | ||||||||||||
Weighted-average common shares outstanding | ||||||||||||||||
Basic | 25,108,652 | 9,181,012 | (3,004,750) | (p) | 31,284,914 | |||||||||||
Diluted | 25,174,992 | 9,182,034 | (3,005,772) | (p) | 31,351,254 |
Six months ended June 30, 2013 | ||||||||||||||||
Renasant Corporation | First M&F Corporation | Pro Forma Adjustments | Pro Forma | |||||||||||||
(as reported) | (as reported) | (Combined) | ||||||||||||||
Interest income | ||||||||||||||||
Loans | $ | 68,723 | $ | 25,431 | $ | 1,773 | (c) | $ | 95,927 | |||||||
Securities | 10,065 | 3,269 | (540 | ) | (a)(b) | 12,794 | ||||||||||
Other | 102 | 110 | — | 212 | ||||||||||||
Total interest income | 78,890 | 28,810 | 1,233 | 108,933 | ||||||||||||
Interest expense | ||||||||||||||||
Deposits | 8,175 | 2,968 | (641 | ) | (j) | 10,502 | ||||||||||
Borrowings | 2,930 | 1,286 | 274 | (k) | 4,490 | |||||||||||
Total interest expense | 11,105 | 4,254 | (367 | ) | 14,992 | |||||||||||
Net interest income | 67,785 | 24,556 | 1,600 | 93,941 | ||||||||||||
Provision for loan losses | 6,050 | 2,660 | — | (d) | 8,710 | |||||||||||
Net interest income after provision for loan losses | 61,735 | 21,896 | 1,600 | 85,231 | ||||||||||||
Noninterest income(1) | ||||||||||||||||
Service charges on deposits | 9,009 | 4,808 | — | 13,817 | ||||||||||||
Fees and commissions | 9,679 | — | — | 9,679 | ||||||||||||
Insurance commissions | 1,812 | 1,700 | — | 3,512 | ||||||||||||
Wealth management revenue | 3,439 | 363 | — | 3,802 | ||||||||||||
Gains on sales of securities, net of other than temporary impairment | 54 | (644 | ) | — | (590 | ) | ||||||||||
Gains on sales of mortgage loans | 7,435 | 1,910 | — | 9,345 | ||||||||||||
BOLI income | 1,365 | 347 | — | 1,712 | ||||||||||||
Other | 1,902 | 1,315 | — | 3,217 | ||||||||||||
Total noninterest income | 34,695 | 9,799 | — | 44,494 | ||||||||||||
Noninterest expense(1) | ||||||||||||||||
Salaries and employee benefits | 43,180 | 12,739 | — | 55,919 | ||||||||||||
Data processing | 4,088 | 911 | — | 4,999 | ||||||||||||
Net occupancy and equipment | 7,276 | 2,506 | (39 | ) | (e) | 9,743 | ||||||||||
Other real estate owned | 3,822 | 2,639 | — | 6,461 | ||||||||||||
Advertising and public relations | 2,736 | 476 | — | 3,212 | ||||||||||||
Intangible amortization | 637 | 213 | 1,835 | (h) | 2,685 | |||||||||||
Other | 13,595 | 8,630 | — | 22,225 | ||||||||||||
Total noninterest expense | 75,334 | 28,114 | 1,796 | 105,244 | ||||||||||||
Income before income taxes | 21,096 | 3,581 | (196 | ) | 24,481 | |||||||||||
Income taxes | 5,506 | 761 | (76 | ) | (o) | 6,191 | ||||||||||
Net income | 15,590 | 2,820 | (120 | ) | 18,290 | |||||||||||
Dividends and accretion on preferred stock | — | 1,004 | (1,004 | ) | (a) | — | ||||||||||
Net income applicable to common stock(1) | $ | 15,590 | $ | 1,816 | $ | 884 | $ | 18,290 | ||||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 0.62 | $ | 0.58 | ||||||||||||
Diluted | $ | 0.62 | $ | 0.58 | ||||||||||||
Dividends per common share | $ | 0.34 | $ | 0.34 | ||||||||||||
Weighted-average common shares outstanding | ||||||||||||||||
Basic | 25,186,229 | 9,232,963 | (3,056,701) | (p) | 31,381,354 | |||||||||||
Diluted | 25,288,785 | 9,403,561 | (3,227,299) | (p) | 31,511,160 |
(a) | Redemption of CDCI Preferred Stock – Cash and shareholders’ equity were adjusted for the fair value adjustment to and the subsequent redemption of First M&F CDCI preferred stock and the related warrant. The preferred stock had a par value of $30,000 and a carrying value of $19,569 at June 30, 2013. The warrant had an assumed fair value of $4,090. The impact of the adjustment was to reverse the dividends and accretion on preferred stock recognized during the year ended December 31, 2012, and the six months ended June 30, 2013, as well as reduce interest income by the amount of interest foregone of $797 and $393 for the year ended December 31, 2012, and six months ended June 30, 2013, respectively, assuming a weighted average yield of 2.35% on the acquired portfolio. |
(b) | Purchase Accounting Adjustments – A net premium was recorded to reflect the excess of the purchase price over the par value of acquired investment securities. The net premium will be recognized over the estimated remaining life of the related investment securities. The impact was to reduce interest income related to securities by $293 and $147 for the year ended December 31, 2012, and the six months ended June 30, 2013, respectively. |
(c) | Purchase Accounting Adjustments – Based on Renasant’s evaluation of the acquired portfolio, a mark of 6.72% was applied to the acquired loans and leases resulting in a fair value adjustment of $65,027. The adjustment is primarily related to credit marks identified in the portfolio coupled with management's expectations to more aggressively market and liquidate problem assets. The remainder, the accretable yield, is recognized as an adjustment to reflect the difference between actual interest rates and current rates offered by Renasant on similar loans. This accretable yield adjustment will be recognized over the remaining life of the loan and lease portfolio. The impact of the adjustment was to increase loan interest income by $3,545 and $1,773 for the year ended December 31, 2012, and the six months ended June 30, 2013, respectively. |
(d) | Purchase Accounting Adjustments – The allowance for loan losses was adjusted to reflect the reversal of First M&F’s recorded allowance. Purchased loans acquired in a business combination are required to be recorded at fair value, and the recorded allowance for loan losses may not be carried over. While Renasant anticipates significantly reducing the provision for loan losses as a result of acquired loans being recorded at fair value, no adjustment to the historic amounts of First M&F’s provision has been recorded in the Pro Forma Condensed Combined Income Statements. |
(e) | Purchase Accounting Adjustments – A fair value adjustment was recorded to long-lived fixed assets based on current market appraisals of the acquired properties. The adjustment will be recognized over the remaining useful lives of the respective assets. The impact of the adjustment was to decrease depreciation expense by $77 and $39 for the year ended December 31, 2012, and the six months ended June 30, 2013, respectively. |
(f) | Purchase Accounting Adjustments – Based on Renasant’s evaluation of the acquired portfolio of OREO, a mark of 29.39% was applied to acquired OREO resulting in a fair value adjustment of $5,797. The fair value adjustment reflects management’s expectations to more aggressively market and liquidate problem assets quickly. The adjustment has no impact on the Pro Forma Condensed Combined Income Statements. |
(g) | Purchase Accounting Adjustments – Goodwill of $91,840 was generated as a result of the total purchase price and fair value of liabilities assumed exceeding the fair value of assets purchased. See Note 2, “Pro Forma Allocation of Purchase Price,” for the allocation of the purchase price to acquired net assets. The adjustment has no impact on the Pro Forma Condensed Combined Income Statements. |
(h) | Purchase Accounting Adjustments – First M&F’s existing other intangible assets were reversed, and an identified incremental core deposit intangible of $25,033 was recognized. The core deposit intangible is recognized over an estimated useful life of ten years using an accelerated amortization method. The amortization expense associated with the core deposit intangible increased noninterest expense $4,124 and $1,835 for the year ended December 31, 2012, and the six months ended June 30, 2013, respectively. |
(i) | Purchase Accounting Adjustments –Deferred taxes associated with the adjustments to record the assets and liabilities of First M&F at fair value were recognized using Renasant’s statutory rate of 38.6%. |
(j) | Purchase Accounting Adjustments – A fair value adjustment was recorded to fixed rate deposit liabilities based on current interest rates offered by Renasant for similar instruments. The adjustment will be recognized over the estimated remaining term of the related deposit liability. The impact of the adjustment was to decrease deposit interest expense by $2,566 and $641 for the year ended December 31, 2012, and the six months ended June 30, 2013, respectively. |
(k) | Purchase Accounting Adjustments – A fair value adjustment was recorded to outstanding long-term debt instruments. The adjustment will be recognized over the estimated remaining term of the long-term debt instruments. The impact of the adjustment was to increase interest expense related to borrowings by $548 and $274 for the year ended December 31, 2012, and the six months ended June 30, 2013, respectively. |
(l) | Purchase Accounting Adjustments – Other liabilities were adjusted to reflect the accrual of approximately $4,638 of anticipated merger related expenses to be incurred by First M&F. Anticipated merger related expenses to be incurred by Renasant are not included in the pro forma financial information but will be expensed in the period after the merger is completed. Anticipated merger related expenses consist of investment banking fees, legal fees, accounting fees, registration fees, contract termination fees, printing costs, etc. |
(m) | Purchase Accounting Adjustments – Common stock was adjusted to reverse First M&F’s common shares outstanding and to recognize the $5.00 par value of shares of Renasant common stock issued to effect the transaction. The adjustment has no impact on the Pro Forma Condensed Combined Income Statements but only affects the number of shares outstanding used in the calculation of earnings per common share. |
(n) | Purchase Accounting Adjustments – Other shareholders’ equity accounts were adjusted to reverse First M&F’s historical shareholders’ equity balances and to reflect the net impact of all purchase accounting adjustments. The adjustments had no impact on the Pro Forma Condensed Combined Income Statements. |
(o) | Pro Forma Adjustments – Income taxes were adjusted to reflect the tax effects of purchase accounting adjustments using Renasant’s statutory tax rate of 38.6%. |
(p) | Pro Forma Adjustments – Weighted-average basic and diluted shares outstanding were adjusted to reverse First M&F basic and diluted shares outstanding and to record shares of Renasant common stock issued to effect the transaction. |
Purchase Price: | ||||||
First M&F common shares outstanding at September 1, 2013 | 9,246,763 | |||||
Restricted stock awards vested at acquisition date | 366,096 | |||||
Total First M&F shares to be paid in stock | 9,612,859 | |||||
Exchange ratio | 0.6425 | |||||
Renasant shares to be issued for First M&F shares | 6,176,262 | |||||
Price per share, based on Renasant price of $25.17 as of August 30, 2013 | $ | 25.17 | ||||
Pro forma value of Renasant stock to be issued | $ | 155,457 | ||||
Fair value of First M&F options assumed | 68 | |||||
Total pro forma purchase price | $ | 155,525 | ||||
Net Assets Acquired: | ||||||
Cash and due from banks | $ | 194,626 | ||||
Securities | 239,716 | |||||
Mortgage loans held for sale | 2,614 | |||||
Loans, net of unearned income | 901,986 | |||||
Premises and equipment | 34,124 | |||||
Other real estate owned | 13,924 | |||||
Other intangible assets | 25,033 | |||||
Other assets | 58,367 | |||||
Total Assets | 1,470,390 | |||||
Deposits: | ||||||
Non-interest bearing | 304,734 | |||||
Interest bearing | 1,064,681 | |||||
Total Deposits | 1,369,415 | |||||
Borrowings | 23,342 | |||||
Other liabilities | 13,948 | |||||
Total Liabilities | 1,406,705 | |||||
Net Assets | 63,685 | |||||
Goodwill | $ | 91,840 |