UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (662 ) 680-1001
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On April 27, 2021, Renasant Corporation (“Renasant”) issued a press release announcing earnings for the first quarter of 2021. The press release is furnished as Exhibit 99.1 to this Form 8-K.
Item 7.01. Regulation FD Disclosure
On April 27, 2021, Renasant also made available presentation materials (the “Presentation”) prepared for use with Renasant’s earnings conference call on April 28, 2021. The Presentation is attached hereto and incorporated herein as Exhibit 99.2.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01, including Exhibit 99.2, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such filing.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:
The exhibits furnished herewith may contain, or incorporate by reference, statements about Renasant 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 Exchange Act of 1934, as amended. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “projects,” “anticipates,” “intends,” “estimates,” “plans,” “potential,” “possible,” “may increase,” “may fluctuate,” “will likely result,” and similar expressions, or future or conditional verbs such as “will,” “should,” “would” and “could,” are generally forward-looking in nature and not historical facts. Forward-looking statements include information about Renasant’s future financial performance, business strategy, projected plans and objectives and are based on the current beliefs and expectations of management. Renasant’s management believes these forward-looking statements are reasonable, but they are all inherently subject to significant business, economic and competitive risks and uncertainties, many of which are beyond Renasant’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ from those indicated or implied in the forward-looking statements, and such differences may be material. You are cautioned that any such forward-looking statements are not guarantees for future performance and involve risks and uncertainties and, accordingly, you should not place undue reliance on these forward-looking statements, which speak only as of the date they are made.
Currently, the most important factor that could cause Renasant’s actual results to differ materially from those in forward-looking statements is the continued impact of the COVID-19 pandemic and related governmental measures to respond to the pandemic on the United States economy and the economies of the markets in which Renasant operates and its participation in government programs related to the pandemic. In the exhibits furnished herewith, Renasant has addressed the historical impact of the pandemic on the operations to Renasant and set forth certain expectations regarding the COVID-19 pandemic’s future impact on Renasant’s business, financial condition, results of operations, liquidity, capital, asset quality, cash flows and prospects. Renasant believes that its statements regarding future events and conditions in light of the COVID-19 pandemic are reasonable, but these statements are based on assumptions regarding, among other things, how long the pandemic will continue, the pace at which the COVID-19 vaccine can be distributed and administered to residents of the markets the Company serves and the United States generally, the duration, extent and effectiveness of the governmental measures implemented to contain the pandemic and ameliorate its impact on businesses and individuals throughout the United States, and the impact of the pandemic and the government’s virus containment measures on national and local economies, all of which are out of Renasant’s control. If Renasant’s assumptions underlying its statements about future events prove to be incorrect, Renasant’s business, financial condition, results of operations, liquidity, asset quality, capital, cash flows and prospects may be materially different from what is presented in Renasant’s forward-looking statements.
Important factors other than the COVID-19 pandemic currently known to management that could cause actual results to differ materially from those in forward-looking statements include the following: (i) Renasant’s ability to efficiently integrate acquisitions into its operations, retain the customers of these businesses, grow the acquired operations and realize the cost savings expected from an acquisition to the extent and in the timeframe anticipated by management; (ii) the effect of economic conditions and interest rates on a national, regional or international basis; (iii) timing and success of the implementation of changes in operations to achieve enhanced earnings or effect cost savings; (iv) competitive pressures in the consumer finance, commercial finance, insurance, financial services, asset management, retail banking, mortgage lending and auto lending industries; (v) the financial resources of, and products available from, competitors; (vi) changes in laws and regulations as well as changes in accounting standards; (vii) changes in policy by regulatory agencies; (viii) changes in the securities and foreign exchange markets; (ix) Renasant’s potential growth, including its entrance or expansion into new markets, and the need for sufficient capital to support that growth; (x) changes in the quality or composition of Renasant’s loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers; (xi) an insufficient allowance for loan losses as a result of inaccurate assumptions; (xii) general economic, market or business conditions, including the impact of inflation; (xiii) changes in demand for loan products and financial services; (xiv) concentration of credit exposure; (xv) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships; (xvi) increased cybersecurity risk, including potential network breaches, business disruptions or financial losses; (xvii) civil unrest, natural disasters, epidemics and other catastrophic events in Renasant’s geographic area; (xviii) the impact, extent and timing of technological changes; and (xix) other circumstances, many of which are beyond management’s control. The COVID-19 pandemic has exacerbated, and is likely to continue to exacerbate, the impact of any of these factors on Renasant.
Management believes that the assumptions underlying Renasant’s forward-looking statements are reasonable, but any of the assumptions could prove to be inaccurate. Investors are urged to carefully consider the risks described in Renasant’s filings with the Securities and Exchange Commission (the “SEC”) from time to time, including its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, which are available at www.renasant.com and the SEC’s website at www.sec.gov.
Renasant undertakes no obligation, and specifically disclaims any obligation, to update or revise forward-looking statements, whether as a result of new information or to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, except as required by federal securities laws.
Item 9.01. Financial Statements and Exhibits.
(d) The following exhibits are furnished herewith:
Exhibit No. Description
99.1 Press release dated April 27, 2021 issued by Renasant Corporation announcing earnings for the first quarter of 2021.
104 The cover page of Renasant Corporation's Form 8-K is formatted in Inline XBRL.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
RENASANT CORPORATION | |||||||||||
Date: April 27, 2021 | By: | /s/ C. Mitchell Waycaster | |||||||||
C. Mitchell Waycaster | |||||||||||
President and Chief Executive Officer | |||||||||||
| Contacts: | For Media: | For Financials: | |||||||||
John Oxford | James C. Mabry IV | ||||||||||
| Senior Vice President | Executive Vice President | ||||||||||
| Director of Marketing | Chief Financial Officer | ||||||||||
| (662) 680-1219 | (662) 680-1281 | ||||||||||
RENASANT CORPORATION ANNOUNCES
EARNINGS FOR THE FIRST QUARTER OF 2021
TUPELO, MISSISSIPPI (April 27, 2021) - Renasant Corporation (NASDAQ: RNST) (the “Company”) today announced earnings results for the first quarter of 2021. Net income for the first quarter of 2021 was $57.9 million, as compared to $2.0 million for the first quarter of 2020. Basic and diluted earnings per share (“EPS”) were $1.03 and $1.02, respectively, for the first quarter of 2021, as compared to basic and diluted EPS of $0.04 for the first quarter of 2020.
“Our first quarter results are a good start to the year and speak to the talent of the Renasant team,” commented C. Mitchell Waycaster, Renasant President and Chief Executive Officer. “We saw a significant increase in our deposits, particularly noninterest-bearing deposits, and achieved net loan growth when excluding PPP loans, while our asset quality metrics remained stable. As pandemic-related restrictions continue to be relaxed and business activity appears to be accelerating throughout our region, we believe we are well positioned to capitalize on opportunities. As we move forward, we will continue to emphasize improving operating efficiency as we build core earnings.”
Impact of Certain Expenses and Charges
From time to time, the Company incurs expenses and charges with respect to which management is unable to accurately predict when these expenses or charges will be incurred or, when
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incurred, the amount of such expenses or charges. The following tables present the impact of these expenses and charges on reported EPS for the first quarter of 2021 and the same period in 2020. The “COVID-19 related expenses” line item primarily consists of (a) employee overtime and employee benefit accruals directly related to the Company’s response to both the COVID-19 pandemic itself and federal legislation enacted to address the pandemic, such as the CARES Act, and (b) expenses associated with supplying branches with protective equipment and sanitation supplies (such as floor markings and cautionary signage for branches, face coverings and hand sanitizer) and more frequent and rigorous branch cleaning.
| (in thousands, except per share data) | Three Months Ended | ||||||||||
| March 31, 2021 | |||||||||||
| Pre-tax | After-tax | Impact to Diluted EPS | |||||||||
| Earnings, as reported | $ | 74,750 | $ | 57,908 | $ | 1.02 | |||||
| MSR valuation adjustment | (13,561) | (10,497) | (0.19) | ||||||||
| Restructuring charges | 292 | 226 | 0.01 | ||||||||
| COVID-19 related expenses | 785 | 608 | 0.01 | ||||||||
| Earnings, with exclusions (Non-GAAP) | $ | 62,266 | $ | 48,245 | $ | 0.85 | |||||
| Three Months Ended | |||||||||||
| March 31, 2020 | |||||||||||
| Pre-tax | After-tax | Impact to Diluted EPS | |||||||||
| Earnings, as reported | $ | 2,781 | $ | 2,008 | $ | 0.04 | |||||
| MSR valuation adjustment | 9,571 | 6,911 | 0.12 | ||||||||
| COVID-19 related expenses | 2,903 | 2,096 | 0.04 | ||||||||
| Earnings, with exclusions (Non-GAAP) | $ | 15,255 | $ | 11,015 | $ | 0.20 | |||||
A reconciliation of all non-GAAP financial measures disclosed in this release from GAAP to non-GAAP is included in the tables at the end of this release. The information below under the heading “Non-GAAP Financial Measures” explains why the Company believes the non-GAAP financial measures in this release provide useful information and describes the other purposes for which the Company uses non-GAAP financial measures.
Profitability Metrics
The following table presents the Company’s profitability metrics, including after adjusting for the impact of the mortgage servicing rights (MSR) valuation adjustment, debt prepayment penalties, restructuring charges, swap termination charges and COVID-19 related expenses, as applicable, for the dates presented:
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| As Reported | With Exclusions (Non-GAAP) | |||||||||||||||||||
| Three Months Ended | Three Months Ended | |||||||||||||||||||
| March 31, 2021 | December 31, 2020 | March 31, 2020 | March 31, 2021 | December 31, 2020 | March 31, 2020 | |||||||||||||||
| Return on average assets | 1.54 | % | 0.84 | % | 0.06 | % | 1.29 | % | 1.02 | % | 0.33 | % | ||||||||
| Return on average tangible assets (Non-GAAP) | 1.69 | % | 0.94 | % | 0.11 | % | 1.41 | % | 1.13 | % | 0.40 | % | ||||||||
| Return on average equity | 10.81 | % | 5.88 | % | 0.38 | % | 9.01 | % | 7.11 | % | 2.10 | % | ||||||||
| Return on average tangible equity (Non-GAAP) | 19.93 | % | 11.26 | % | 1.20 | % | 16.68 | % | 13.52 | % | 4.41 | % | ||||||||
Financial Condition
Total assets were $15.62 billion at March 31, 2021, as compared to $14.93 billion at December 31, 2020. Total loans held for investment were $10.69 billion at March 31, 2021, as compared to $10.93 billion at December 31, 2020. Loans held for investment at March 31, 2021 included $860.9 million in Paycheck Protection Program (“PPP”) loans. Excluding PPP loans, the loan portfolio in the first quarter of 2021 grew 0.93% on an annualized basis.
The Company entered into a referral relationship with another firm in order to utilize its technology platform to originate PPP loans under the latest round of program funding. The Company earned approximately $2.3 million in referral fees from this relationship, which are recorded in noninterest income.
Total deposits increased to $12.74 billion at March 31, 2021, from $12.06 billion at December 31, 2020. Non-interest bearing deposits increased $450.3 million to $4.14 billion, or 32.47% of total deposits, at March 31, 2021, as compared to $3.69 billion, or 30.56% of total deposits, at December 31, 2020.
Continued Focus on Prudent Capital Management
The Company’s capital position, as measured by regulatory capital ratios, continues to improve. This capital strength gives the Company flexibility to accommodate future loan growth, M&A activity or share repurchases. The Company has a $50.0 million stock repurchase plan that will remain in effect through October 2021. The Company did not repurchase any shares under the plan in the first quarter of 2021.
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At March 31, 2021, Tier 1 leverage capital was 9.49%, Common Equity Tier 1 ratio was 11.05%, Tier 1 risk-based capital ratio was 12.00% and total risk-based capital ratio was 15.09%. All regulatory ratios exceed the minimums required to be “well-capitalized.”
The Company’s ratio of shareholders’ equity to assets was 13.91% at March 31, 2021, as compared to 14.29% at December 31, 2020. The Company’s tangible capital ratio (non-GAAP) was 8.23% at March 31, 2021, as compared to 8.33% at December 31, 2020.
The PPP loans held on the Company’s balance sheet at March 31, 2021, negatively impacted the Company’s tangible capital ratio by 51 basis points and its leverage ratio by 70 basis points.
Results of Operations
Net interest income was $109.6 million for the first quarter of 2021, as compared to $108.1 million for the fourth quarter of 2020 and $106.6 million for the first quarter of 2020.
The following table presents the percentage of total average earning assets, by type and yield, for the periods presented:
| Percentage of Total Average Earning Assets | Yield | |||||||||||||||||||
| Three Months Ended | Three Months Ended | |||||||||||||||||||
| March 31, | December 31, | March 31, | March 31, | December 31, | March 31, | |||||||||||||||
| 2021 | 2020 | 2020 | 2021 | 2020 | 2020 | |||||||||||||||
| Loans held for investment excluding PPP loans | 73.49 | % | 74.79 | % | 83.44 | % | 4.22 | % | 4.20 | % | 4.93 | % | ||||||||
| PPP loans | 7.38 | 9.59 | — | 4.40 | 3.26 | — | ||||||||||||||
| Loans held for sale | 3.04 | 2.98 | 2.90 | 2.96 | 3.15 | 3.57 | ||||||||||||||
| Securities | 10.27 | 9.72 | 11.14 | 2.08 | 2.25 | 2.91 | ||||||||||||||
| Other | 5.82 | 2.92 | 2.52 | 0.10 | 0.10 | 1.12 | ||||||||||||||
| Total earning assets | 100.00 | % | 100.00 | % | 100.00 | % | 3.74 | % | 3.77 | % | 4.57 | % | ||||||||
The following table presents reported taxable equivalent net interest margin and yield on loans for the periods presented (in thousands).
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| Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| 2021 | 2020 | 2020 | |||||||||
| Taxable equivalent net interest income | $ | 111,264 | $ | 110,024 | $ | 108,316 | |||||
| Average earning assets | $ | 13,358,677 | $ | 13,059,967 | $ | 11,609,477 | |||||
| Net interest margin | 3.37 | % | 3.35 | % | 3.75 | % | |||||
| Taxable equivalent interest income on loans held for investment | $ | 113,072 | $ | 113,457 | $ | 118,741 | |||||
| Average loans held for investment | $ | 10,802,991 | $ | 11,019,505 | $ | 9,687,285 | |||||
| Loan yield | 4.24 | % | 4.10 | % | 4.93 | % | |||||
PPP loans benefited net interest margin and loan yield by 8 basis points and 2 basis points, respectively, in the first quarter of 2021. Increased liquidity has added pressure to net interest margin in recent quarters. The Company has aggressively lowered interest rates on interest bearing deposits, and it continues to evaluate options to mitigate the pressure on net interest margin.
The impact from interest income collected on problem loans and purchase accounting adjustments on loans to total interest income on loans held for investment, loan yield and net interest margin is shown in the following table for the periods presented (in thousands).
| Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| 2021 | 2020 | 2020 | |||||||||
| Net interest income collected on problem loans | $ | 2,180 | $ | 128 | $ | 218 | |||||
Accretable yield recognized on purchased loans(1) | 3,088 | 4,130 | 5,469 | ||||||||
| Total impact to interest income | $ | 5,268 | $ | 4,258 | $ | 5,687 | |||||
| Impact to loan yield | 0.20 | % | 0.15 | % | 0.24 | % | |||||
| Impact to net interest margin | 0.16 | % | 0.13 | % | 0.20 | % | |||||
(1)Includes additional interest income recognized in connection with the acceleration of paydowns and payoffs from purchased loans of $1,272, $1,872 and $2,187 for the three months ended March 31, 2021, December 31, 2020, and March 31, 2020, respectively. This additional interest income increased loan yield by 5 basis points, 7 basis points and 9 basis points for the same periods, respectively, while increasing net interest margin by 4 basis points, 6 basis points and 8 basis points for the same periods, respectively.
For the first quarter of 2021, the cost of total deposits was 27 basis points, as compared to 33 basis points for the fourth quarter of 2020 and 72 basis points for the first quarter of 2020. The table below presents, by type, the Company’s funding sources and the total cost of each funding source for the periods presented:
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| Percentage of Total Average Deposits and Borrowed Funds | Cost of Funds | ||||||||||||||||||||||||||||||||||
| Three Months Ending | Three Months Ending | ||||||||||||||||||||||||||||||||||
| March 31, | December 31, | March 31, | March 31, | December 31, | March 31, | ||||||||||||||||||||||||||||||
| 2021 | 2020 | 2020 | 2021 | 2020 | 2020 | ||||||||||||||||||||||||||||||
| Noninterest-bearing demand | 30.20 | % | 30.43 | % | 23.19 | % | — | % | — | % | — | % | |||||||||||||||||||||||
| Interest-bearing demand | 46.18 | 44.81 | 44.29 | 0.27 | 0.31 | 0.75 | |||||||||||||||||||||||||||||
| Savings | 6.90 | 6.63 | 6.11 | 0.08 | 0.08 | 0.15 | |||||||||||||||||||||||||||||
| Time deposits | 12.94 | 14.00 | 18.98 | 1.02 | 1.20 | 1.71 | |||||||||||||||||||||||||||||
| Borrowed funds | 3.78 | 4.13 | 7.43 | 3.21 | 3.05 | 2.46 | |||||||||||||||||||||||||||||
| Total deposits and borrowed funds | 100.00 | % | 100.00 | % | 100.00 | % | 0.38 | % | 0.44 | % | 0.85 | % | |||||||||||||||||||||||
Noninterest income for the first quarter of 2021 was $81.0 million, as compared to $62.9 million for the fourth quarter of 2020 and $37.6 million for the first quarter of 2020. Mortgage production remained strong during the first quarter of 2021 with approximately $1.74 billion in interest rate lock volume. The following table presents the components of mortgage banking income for the periods presented (in thousands):
| Three Months Ended | |||||||||||
| March 31, 2021 | December 31, 2020 | March 31, 2020 | |||||||||
| Gain on sales of loans, net | $ | 33,901 | $ | 36,080 | $ | 21,782 | |||||
| Fees, net | 4,902 | 5,318 | 2,919 | ||||||||
| Mortgage servicing income, net | (1,631) | (3,606) | 405 | ||||||||
| MSR valuation adjustment | 13,561 | 1,968 | (9,571) | ||||||||
| Mortgage banking income, net | $ | 50,733 | $ | 39,760 | $ | 15,535 | |||||
The Company recognized $1.4 million in gains on securities sold during the first quarter of 2021, and other fee income categories generally exhibited increases as well.
Noninterest expense was $115.9 million for the first quarter of 2021, as compared to $122.2 million for the fourth quarter of 2020 and $115.0 million for the first quarter of 2020. The decrease quarter over quarter is primarily related to restructuring and swap termination charges recognized in the fourth quarter of 2020. The increase in salaries and employee benefits during the first quarter of 2021 was driven by incentive expense recognized during the quarter, which was partially offset by cost savings realized from the voluntary early retirement program offered during the fourth quarter of 2020.
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Asset Quality Metrics
At March 31, 2021, the Company’s credit quality metrics remained strong. The Company has continued its program of heightened credit monitoring with a particular focus on those industries more highly impacted by the pandemic, primarily the hospitality and senior housing industries. Loans on deferred payment, as offered through the Company’s loan deferral program, continue to decline and as of March 31, 2021, approximately 1.0% of the Company’s loan portfolio (excluding PPP loans) was on deferral, down from approximately 1.5% as of December 31, 2020.
The Company’s credit quality in future quarters may be impacted by both external and internal factors related to the pandemic in addition to those factors that traditionally affect credit quality. External factors outside the Company’s control include items such as the pace at which the COVID-19 vaccine is administered to residents in the Company’s markets and the United States generally, federal, state and local government measures, the re-imposition of “shelter-in-place” orders, and the economic impact of government programs, including additional fiscal stimulus and the extension of the Paycheck Protection Program. Internal factors that will potentially impact credit quality include items such as the Company’s loan deferral programs, involvement in government offered programs and the related financial impact of these programs. The impact of each of these items are unknown at this time and could materially and adversely impact future credit quality.
The table below shows nonperforming assets, which include nonperforming loans (loans 90 days or more past due and nonaccrual loans) and other real estate owned, as well as early stage delinquencies (loans 30-89 days past due) for the periods presented (in thousands).
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| March 31, 2021 | December 31, 2020 | |||||||||||||||||||
| Non Purchased | Purchased | Total | Non Purchased | Purchased | Total | |||||||||||||||
| Nonaccrual loans | $ | 24,794 | $ | 28,947 | $ | 53,741 | $ | 20,369 | $ | 31,051 | $ | 51,420 | ||||||||
| Loans 90 days past due or more | 2,235 | 129 | 2,364 | 3,783 | 267 | 4,050 | ||||||||||||||
| Nonperforming loans | $ | 27,029 | $ | 29,076 | $ | 56,105 | $ | 24,152 | $ | 31,318 | $ | 55,470 | ||||||||
| Other real estate owned | 2,292 | 3,679 | 5,971 | 2,045 | 3,927 | 5,972 | ||||||||||||||
| Nonperforming assets | $ | 29,321 | $ | 32,755 | $ | 62,076 | $ | 26,197 | $ | 35,245 | $ | 61,442 | ||||||||
| Nonperforming loans/total loans | 0.52 | % | 0.51 | % | ||||||||||||||||
| Nonperforming loans/total loans excluding PPP loans | 0.57 | % | 0.57 | % | ||||||||||||||||
| Nonperforming assets/total assets | 0.40 | % | 0.41 | % | ||||||||||||||||
| Nonperforming assets/total assets excluding PPP loans | 0.42 | % | 0.45 | % | ||||||||||||||||
| Loans 30-89 days past due | $ | 15,830 | $ | 5,971 | $ | 21,801 | $ | 17,635 | $ | 8,651 | $ | 26,286 | ||||||||
| Loans 30-89 days past due/total loans | 0.20 | % | 0.24 | % | ||||||||||||||||
| Loans 30-89 days past due/total loans excluding PPP loans | 0.22 | % | 0.27 | % | ||||||||||||||||
The table below shows the total allowance for credit losses and related ratios at March 31, 2021 as compared to December 31, 2020 (in thousands).
| March 31, 2021 | December 31, 2020 | |||||||
| Allowance for credit losses on loans | $ | 173,106 | $ | 176,144 | ||||
| Allowance for credit losses on deferred interest | 1,375 | 1,500 | ||||||
| Reserve for unfunded commitments | 20,535 | 20,535 | ||||||
| Total allowance for credit losses | $ | 195,016 | $ | 198,179 | ||||
| Allowance for credit losses on loans/total loans | 1.62 | % | 1.61 | % | ||||
| Allowance for credit losses on loans/total loans excluding PPP loans | 1.76 | % | 1.80 | % | ||||
The Company did not record any provision for credit losses during the first quarter of 2021, as compared to a provision for credit losses in the first quarter of 2020 in the amount of $26.4 million. Net loan charge-offs for the first quarter of 2021 were $3.0 million, or 0.11% of average loans held for investment on an annualized basis. The Company’s allowance for credit loss model considers economic projections, primarily the national unemployment rate and GDP, over a period of two years and based on the continual improvement in these forecasts over the last few quarters, the Company determined that additional provisioning during the first quarter of 2021 was not necessary. The Company’s coverage ratio, or the allowance for credit losses to nonperforming loans, was 308.54% as of March 31, 2021, as compared to 317.55% as of December 31, 2020.
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The provision for credit losses recorded during the fourth quarter of 2020 was $10.5 million with net charge-offs of $954 thousand, or 0.03% of average loans held for sale on an annualized basis.
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CONFERENCE CALL INFORMATION:
A live audio webcast of a conference call with analysts will be available beginning at 10:00 AM Eastern Time (9:00 AM Central Time) on Wednesday, April 28, 2021.
The webcast can be accessed through Renasant’s investor relations website at www.renasant.com or https://services.choruscall.com/mediaframe/webcast.html?webcastid=jph0iARs. To access the conference via telephone, dial 1-877-513-1143 in the United States and request the Renasant Corporation 2021 First Quarter Earnings Conference Call and Webcast. International participants should dial 1-412-902-4145 to access the conference call.
The webcast will be archived on www.renasant.com beginning one hour after the call and will remain accessible for one year. Replays can also be accessed via telephone by dialing 1-877-344-7529 in the United States and entering conference number 10155117 or by dialing 1-412-317-0088 internationally and entering the same conference number. Telephone replay access is available until May 7, 2021.
ABOUT RENASANT CORPORATION:
Renasant Corporation is the parent of Renasant Bank, a 116-year-old financial services institution. Renasant has assets of approximately $15.6 billion and operates 200 banking, lending, mortgage, wealth management and insurance offices in Mississippi, Tennessee, Alabama, Florida, Georgia, North Carolina and South Carolina.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:
This press release may contain, or incorporate by reference, statements about Renasant Corporation 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 Exchange Act of 1934, as amended. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “projects,” “anticipates,” “intends,” “estimates,” “plans,” “potential,” “possible,” “may increase,” “may fluctuate,” “will likely result,” and similar expressions, or future or conditional verbs such as “will,” “should,” “would” and “could,” are generally forward-looking in nature and not historical facts. Forward-looking statements include information about the Company’s future financial performance, business strategy, projected plans and objectives and are based on the current beliefs and expectations of management. The Company’s management believes these forward-looking statements are reasonable, but they are all inherently subject to significant business, economic and competitive risks and uncertainties, many of which are beyond the Company’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ from those indicated or implied in the forward-looking statements, and such differences may be material. Prospective investors are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties and, accordingly, investors should not place undue reliance on these forward-looking statements, which speak only as of the date they are made.
10
Currently, the most important factor that could cause the Company’s actual results to differ materially from those in forward-looking statements is the continued impact of the COVID-19 pandemic and related governmental measures to respond to the pandemic on the United States economy and the economies of the markets in which the Company operates and its participation in government programs related to the pandemic. In this press release, the Company has addressed the historical impact of the pandemic on the operations of the Company and set forth certain expectations regarding the COVID-19 pandemic’s future impact on the Company’s business, financial condition, results of operations, liquidity, asset quality, capital, cash flows and prospects. The Company believes that its statements regarding future events and conditions in light of the COVID-19 pandemic are reasonable, but these statements are based on assumptions regarding, among other things, how long the pandemic will continue, the pace at which the COVID-19 vaccine can be distributed and administered to residents of the markets the Company serves and the United States generally, the duration, extent and effectiveness of the governmental measures implemented to contain the pandemic and ameliorate its impact on businesses and individuals throughout the United States, and the impact of the pandemic and the government’s virus containment measures on national and local economies, all of which are out of the Company’s control. If the Company’s assumptions underlying its statements about future events prove to be incorrect, the Company’s business, financial condition, results of operations, liquidity, asset quality, capital, cash flows and prospects may be materially different from what is presented in the Company’s forward-looking statements.
Important factors other than the COVID-19 pandemic currently known to management that could cause actual results to differ materially from those in forward-looking statements include the following: (i) the Company’s ability to efficiently integrate acquisitions into its operations, retain the customers of these businesses, grow the acquired operations and realize the cost savings expected from an acquisition to the extent and in the timeframe anticipated by management; (ii) the effect of economic conditions and interest rates on a national, regional or international basis; (iii) timing and success of the implementation of changes in operations to achieve enhanced earnings or effect cost savings; (iv) competitive pressures in the consumer finance, commercial finance, insurance, financial services, asset management, retail banking, mortgage lending and auto lending industries; (v) the financial resources of, and products available from, competitors; (vi) changes in laws and regulations as well as changes in accounting standards; (vii) changes in policy by regulatory agencies; (viii) changes in the securities and foreign exchange markets; (ix) the Company’s potential growth, including its entrance or expansion into new markets, and the need for sufficient capital to support that growth; (x) changes in the quality or composition of the Company’s loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers; (xi) an insufficient allowance for credit losses as a result of inaccurate assumptions; (xii) general economic, market or business conditions, including the impact of inflation; (xiii) changes in demand for loan products and financial services; (xiv) concentration of credit exposure; (xv) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships; (xvi) increased cybersecurity risk, including potential network breaches, business disruptions or financial losses; (xvii) civil unrest, natural disasters, epidemics and other catastrophic events in the Company’s geographic area; (xviii) the impact, extent and timing of technological changes; and (xix) other circumstances, many of which are beyond management’s control. The COVID-19 pandemic has exacerbated, and is likely to continue to exacerbate, the impact of any of these factors on the Company.
Management believes that the assumptions underlying the Company’s forward-looking statements are reasonable, but any of the assumptions could prove to be inaccurate. Investors are urged to carefully consider the risks described in the Company’s filings with the Securities and Exchange Commission (the “SEC”) from time to time, including its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, which are available at www.renasant.com and the SEC’s website at www.sec.gov.
11
The Company undertakes no obligation, and specifically disclaims any obligation, to update or revise forward-looking statements, whether as a result of new information or to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, except as required by federal securities laws.
NON-GAAP FINANCIAL MEASURES:
In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains non-GAAP financial measures, namely, earnings, with exclusions, return on average tangible shareholders’ equity, return on average tangible assets, the ratio of tangible equity to tangible assets (commonly referred to as the “tangible capital ratio”), tangible book value per share and the adjusted efficiency ratio. These non-GAAP financial measures adjust GAAP financial measures to exclude intangible assets and/or certain charges (such as, when applicable, COVID-19 related expenses, restructuring charges, debt prepayment penalties, swap termination charges and asset valuation adjustments) with respect to which the Company is unable to accurately predict when these charges will be incurred or, when incurred, the amount thereof. With respect to COVID-19 related expenses in particular, management added these expenses as a charge to exclude when calculating non-GAAP financial measures because the expenses included within this line item (as discussed earlier in this release) are readily quantifiable and possess the same characteristics with respect to management’s inability to accurately predict the timing or amount thereof as the other charges excluded when calculating non-GAAP financial measures. Management uses these non-GAAP financial measures when evaluating capital utilization and adequacy. In addition, the Company believes that these non-GAAP financial measures facilitate the making of period-to-period comparisons and are meaningful indicators of its operating performance, particularly because these measures are widely used by industry analysts for companies with merger and acquisition activities. Also, because intangible assets such as goodwill and the core deposit intangible and charges such as restructuring charges and COVID-19 related expenses can vary extensively from company to company and, as to intangible assets, are excluded from the calculation of a financial institution’s regulatory capital, the Company believes that the presentation of this non-GAAP financial information allows readers to more easily compare the Company’s results to information provided in other regulatory reports and the results of other companies. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables at the end of this release under the caption “Reconciliation of GAAP to Non-GAAP.”
None of the non-GAAP financial information that the Company has included in this release is intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. Investors should note that, because there are no standardized definitions for the calculations as well as the results, the Company’s calculations may not be comparable to similarly titled measures presented by other companies. Also, there may be limits in the usefulness of these measures to investors. As a result, the Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.
###
12
| RENASANT CORPORATION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Q1 2021- | For The Three Months Ending | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | Q4 2020 | March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| First | Fourth | Third | Second | First | Percent | Percent | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | Variance | 2021 | 2020 | Variance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Statement of earnings | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest income - taxable equivalent basis | $ | 123,378 | $ | 123,823 | $ | 123,677 | $ | 125,630 | $ | 131,887 | (0.36) | % | $ | 123,378 | $ | 131,887 | (6.45) | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest income | $ | 121,762 | $ | 121,926 | $ | 122,078 | $ | 123,955 | $ | 130,173 | (0.13) | $ | 121,762 | $ | 130,173 | (6.46) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 12,114 | 13,799 | 15,792 | 18,173 | 23,571 | (12.21) | 12,114 | 23,571 | (48.61) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income | 109,648 | 108,127 | 106,286 | 105,782 | 106,602 | 1.41 | 109,648 | 106,602 | 2.86 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Provision for credit losses | — | 10,500 | 23,100 | 26,900 | 26,350 | (100.00) | — | 26,350 | (100.00) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income after provision | 109,648 | 97,627 | 83,186 | 78,882 | 80,252 | 12.31 | 109,648 | 80,252 | 36.63 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Service charges on deposit accounts | 8,023 | 7,938 | 7,486 | 6,832 | 9,070 | 1.07 | 8,023 | 9,070 | (11.54) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fees and commissions on loans and deposits | 3,900 | 3,616 | 3,402 | 2,971 | 3,054 | 7.85 | 3,900 | 3,054 | 27.70 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Insurance commissions and fees | 2,237 | 2,193 | 2,681 | 2,125 | 1,991 | 2.01 | 2,237 | 1,991 | 12.36 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wealth management revenue | 4,792 | 4,314 | 4,364 | 3,824 | 4,002 | 11.08 | 4,792 | 4,002 | 19.74 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Securities gains (losses) | 1,357 | 15 | — | 31 | — | 8,946.67 | 1,357 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage banking income | 50,733 | 39,760 | 49,714 | 45,490 | 15,535 | 27.60 | 50,733 | 15,535 | 226.57 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 9,995 | 5,028 | 3,281 | 2,897 | 3,918 | 98.79 | 9,995 | 3,918 | 155.10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total noninterest income | 81,037 | 62,864 | 70,928 | 64,170 | 37,570 | 28.91 | 81,037 | 37,570 | 115.70 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | 78,696 | 74,432 | 75,406 | 79,361 | 73,189 | 5.73 | 78,696 | 73,189 | 7.52 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Data processing | 5,451 | 5,373 | 5,259 | 5,047 | 5,006 | 1.45 | 5,451 | 5,006 | 8.89 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Occupancy and equipment | 12,538 | 13,153 | 13,296 | 13,511 | 14,120 | (4.68) | 12,538 | 14,120 | (11.20) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other real estate | 41 | 683 | 1,033 | 620 | 418 | (94.00) | 41 | 418 | (90.19) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of intangibles | 1,598 | 1,659 | 1,733 | 1,834 | 1,895 | (3.68) | 1,598 | 1,895 | (15.67) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring charges | 292 | 7,365 | — | — | — | (96.04) | 292 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Swap termination charges | — | 2,040 | — | — | — | (100.00) | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt prepayment penalty | — | 3 | 28 | 90 | — | (100.00) | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 17,319 | 17,444 | 19,755 | 17,822 | 20,413 | (0.72) | 17,319 | 20,413 | (15.16) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total noninterest expense | 115,935 | 122,152 | 116,510 | 118,285 | 115,041 | (5.09) | 115,935 | 115,041 | 0.78 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income before income taxes | 74,750 | 38,339 | 37,604 | 24,767 | 2,781 | 94.97 | 74,750 | 2,781 | 2,587.88 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income taxes | 16,842 | 6,818 | 7,612 | 4,637 | 773 | 147.02 | 16,842 | 773 | 2,078.78 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | $ | 57,908 | $ | 31,521 | $ | 29,992 | $ | 20,130 | $ | 2,008 | 83.71 | $ | 57,908 | $ | 2,008 | 2,783.86 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Basic earnings per share | $ | 1.03 | $ | 0.56 | $ | 0.53 | $ | 0.36 | $ | 0.04 | 83.93 | $ | 1.03 | $ | 0.04 | 2,475.00 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Diluted earnings per share | 1.02 | 0.56 | 0.53 | 0.36 | 0.04 | 82.14 | 1.02 | 0.04 | 2,450.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average basic shares outstanding | 56,240,201 | 56,197,847 | 56,185,884 | 56,165,452 | 56,534,816 | 0.08 | 56,240,201 | 56,534,816 | (0.52) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average diluted shares outstanding | 56,519,199 | 56,489,809 | 56,386,153 | 56,325,476 | 56,706,289 | 0.05 | 56,519,199 | 56,706,289 | (0.33) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common shares outstanding | 56,294,346 | 56,200,487 | 56,193,705 | 56,181,962 | 56,141,018 | 0.17 | 56,294,346 | 56,141,018 | 0.27 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash dividend per common share | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.22 | — | $ | 0.22 | $ | 0.22 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Performance ratios | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Return on avg shareholders’ equity | 10.81 | % | 5.88 | % | 5.63 | % | 3.85 | % | 0.38 | % | 10.81 | % | 0.38 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
Return on avg tangible s/h’s equity (non-GAAP) (1) | 19.93 | % | 11.26 | % | 10.87 | % | 7.72 | % | 1.20 | % | 19.93 | % | 1.20 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Return on avg assets | 1.54 | % | 0.84 | % | 0.80 | % | 0.55 | % | 0.06 | % | 1.54 | % | 0.06 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Return on avg tangible assets (non-GAAP)(2) | 1.69 | % | 0.94 | % | 0.89 | % | 0.63 | % | 0.11 | % | 1.69 | % | 0.11 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest margin (FTE) | 3.37 | % | 3.35 | % | 3.29 | % | 3.38 | % | 3.75 | % | 3.37 | % | 3.75 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Yield on earning assets (FTE) | 3.74 | % | 3.77 | % | 3.77 | % | 3.95 | % | 4.57 | % | 3.74 | % | 4.57 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Cost of funding | 0.38 | % | 0.44 | % | 0.50 | % | 0.59 | % | 0.85 | % | 0.38 | % | 0.85 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Average earning assets to average assets | 87.86 | % | 87.66 | % | 87.31 | % | 86.88 | % | 86.17 | % | 87.86 | % | 86.17 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Average loans to average deposits | 87.78 | % | 91.83 | % | 93.31 | % | 93.35 | % | 93.83 | % | 87.78 | % | 93.83 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest income (less securities gains/ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| losses) to average assets | 2.13 | % | 1.68 | % | 1.89 | % | 1.75 | % | 1.12 | % | 2.13 | % | 1.12 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest expense (less debt prepayment penalties) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| to average assets | 3.09 | % | 3.26 | % | 3.10 | % | 3.23 | % | 3.43 | % | 3.09 | % | 3.43 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Net overhead ratio | 0.96 | % | 1.58 | % | 1.21 | % | 1.48 | % | 2.31 | % | 0.96 | % | 2.31 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Efficiency ratio (FTE) | 60.29 | % | 70.65 | % | 65.16 | % | 68.92 | % | 78.86 | % | 60.29 | % | 78.86 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted efficiency ratio (FTE) (non-GAAP) (4) | 63.85 | % | 64.35 | % | 62.63 | % | 60.89 | % | 68.73 | % | 63.85 | % | 68.73 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
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| RENASANT CORPORATION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Q1 2021 - | As of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | Q4 2020 | March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| First | Fourth | Third | Second | First | Percent | Percent | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | Variance | 2021 | 2020 | Variance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average Balances | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 15,203,691 | $ | 14,898,055 | $ | 14,928,159 | $ | 14,706,027 | $ | 13,472,550 | 2.05 | % | $ | 15,203,691 | $ | 13,472,550 | 12.85 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Earning assets | 13,358,677 | 13,059,967 | 13,034,422 | 12,776,643 | 11,609,477 | 2.29 | 13,358,677 | 11,609,477 | 15.07 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Securities | 1,372,123 | 1,269,108 | 1,269,565 | 1,295,539 | 1,292,875 | 8.12 | 1,372,123 | 1,292,875 | 6.13 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans held for sale | 406,397 | 389,435 | 378,225 | 340,582 | 336,829 | 4.36 | 406,397 | 336,829 | 20.65 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans, net of unearned income | 10,802,991 | 11,019,505 | 11,041,684 | 10,616,147 | 9,687,285 | (1.96) | 10,802,991 | 9,687,285 | 11.52 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Intangibles | 969,001 | 970,624 | 972,394 | 974,237 | 975,933 | (0.17) | 969,001 | 975,933 | (0.71) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 3,862,422 | 3,808,595 | 3,723,059 | 3,439,634 | 2,586,963 | 1.41 | 3,862,422 | 2,586,963 | 49.30 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits | 8,444,766 | 8,190,997 | 8,109,844 | 7,933,035 | 7,737,615 | 3.10 | 8,444,766 | 7,737,615 | 9.14 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total deposits | 12,307,188 | 11,999,592 | 11,832,903 | 11,372,669 | 10,324,578 | 2.56 | 12,307,188 | 10,324,578 | 19.20 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Borrowed funds | 483,907 | 516,414 | 719,800 | 1,000,789 | 829,320 | (6.29) | 483,907 | 829,320 | (41.65) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' equity | 2,172,425 | 2,132,375 | 2,119,500 | 2,101,092 | 2,105,143 | 1.88 | 2,172,425 | 2,105,143 | 3.20 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Q1 2021 - | As of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | Q4 2020 | March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| First | Fourth | Third | Second | First | Percent | Percent | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | Variance | 2021 | 2020 | Variance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balances at period end | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 15,622,571 | $ | 14,929,612 | $ | 14,808,933 | $ | 14,897,207 | $ | 13,900,550 | 4.64 | % | $ | 15,622,571 | $ | 13,900,550 | 12.39 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Earning assets | 13,781,374 | 13,151,707 | 12,984,651 | 13,041,846 | 11,980,482 | 4.79 | 13,781,374 | 11,980,482 | 15.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Securities | 1,536,041 | 1,343,457 | 1,293,388 | 1,303,494 | 1,359,129 | 14.33 | 1,536,041 | 1,359,129 | 13.02 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans held for sale | 502,002 | 417,771 | 399,773 | 339,747 | 448,797 | 20.16 | 502,002 | 448,797 | 11.86 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non purchased loans | 9,292,502 | 9,419,540 | 9,424,224 | 9,206,101 | 7,802,404 | (1.35) | 9,292,502 | 7,802,404 | 19.10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Purchased loans | 1,395,906 | 1,514,107 | 1,660,514 | 1,791,203 | 1,966,973 | (7.81) | 1,395,906 | 1,966,973 | (29.03) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total loans | 10,688,408 | 10,933,647 | 11,084,738 | 10,997,304 | 9,769,377 | (2.24) | 10,688,408 | 9,769,377 | 9.41 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Intangibles | 968,225 | 969,823 | 971,481 | 973,214 | 975,048 | (0.16) | 968,225 | 975,048 | (0.70) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 4,135,360 | 3,685,048 | 3,758,242 | 3,740,296 | 2,642,059 | 12.22 | 4,135,360 | 2,642,059 | 56.52 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits | 8,601,548 | 8,374,033 | 8,175,898 | 8,106,062 | 7,770,367 | 2.72 | 8,601,548 | 7,770,367 | 10.70 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total deposits | 12,736,908 | 12,059,081 | 11,934,140 | 11,846,358 | 10,412,426 | 5.62 | 12,736,908 | 10,412,426 | 22.32 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Borrowed funds | 479,814 | 496,310 | 517,706 | 718,490 | 1,179,631 | (3.32) | 479,814 | 1,179,631 | (59.33) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders’ equity | 2,173,701 | 2,132,733 | 2,104,300 | 2,082,946 | 2,070,512 | 1.92 | 2,173,701 | 2,070,512 | 4.98 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Market value per common share | 41.38 | 33.68 | 22.72 | 24.90 | 21.84 | 22.86 | 41.38 | 21.84 | 89.47 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Book value per common share | 38.61 | 37.95 | 37.45 | 37.07 | 36.88 | 1.74 | 38.61 | 36.88 | 4.69 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tangible book value per common share (non-GAAP) | 21.41 | 20.69 | 20.16 | 19.75 | 19.51 | 3.48 | 21.41 | 19.51 | 9.74 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders’ equity to assets (actual) | 13.91 | % | 14.29 | % | 14.21 | % | 13.98 | % | 14.91 | % | 13.91 | % | 14.91 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Tangible capital ratio (non-GAAP)(3) | 8.23 | % | 8.33 | % | 8.19 | % | 7.97 | % | 8.48 | % | 8.23 | % | 8.48 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Leverage ratio | 9.49 | % | 9.37 | % | 9.17 | % | 9.12 | % | 9.90 | % | 9.49 | % | 9.90 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Common equity tier 1 capital ratio | 11.05 | % | 10.93 | % | 10.80 | % | 10.69 | % | 10.63 | % | 11.05 | % | 10.63 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Tier 1 risk-based capital ratio | 12.00 | % | 11.91 | % | 11.79 | % | 11.69 | % | 11.63 | % | 12.00 | % | 11.63 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Total risk-based capital ratio | 15.09 | % | 15.07 | % | 14.89 | % | 13.72 | % | 13.44 | % | 15.09 | % | 13.44 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
14
| RENASANT CORPORATION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Q1 2021 - | As of | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | Q4 2020 | March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| First | Fourth | Third | Second | First | Percent | Percent | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | Variance | 2021 | 2020 | Variance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non purchased loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial, financial, agricultural | $ | 1,244,580 | $ | 1,231,768 | $ | 1,137,321 | $ | 1,134,965 | $ | 1,144,004 | 1.04 | % | $ | 1,244,580 | $ | 1,144,004 | 8.79 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| SBA Paycheck Protection Program | 860,864 | 1,128,703 | 1,307,972 | 1,281,278 | — | (23.73) | 860,864 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lease financing | 75,256 | 75,862 | 82,928 | 80,779 | 84,679 | (0.80) | 75,256 | 84,679 | (11.13) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real estate - construction | 933,586 | 827,152 | 738,873 | 756,872 | 745,066 | 12.87 | 933,586 | 745,066 | 25.30 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real estate - 1-4 family mortgages | 2,380,920 | 2,356,564 | 2,369,292 | 2,342,987 | 2,356,627 | 1.03 | 2,380,920 | 2,356,627 | 1.03 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real estate - commercial mortgages | 3,676,160 | 3,649,629 | 3,610,642 | 3,400,718 | 3,242,172 | 0.73 | 3,676,160 | 3,242,172 | 13.39 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Installment loans to individuals | 121,136 | 149,862 | 177,195 | 208,502 | 229,856 | (19.17) | 121,136 | 229,856 | (47.30) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans, net of unearned income | $ | 9,292,502 | $ | 9,419,540 | $ | 9,424,223 | $ | 9,206,101 | $ | 7,802,404 | (1.35) | $ | 9,292,502 | $ | 7,802,404 | 19.10 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Purchased loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial, financial, agricultural | $ | 143,843 | $ | 176,513 | $ | 202,768 | $ | 225,355 | $ | 280,572 | (18.51) | $ | 143,843 | $ | 280,572 | (48.73) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Real estate - construction | 22,332 | 30,952 | 34,246 | 34,236 | 42,829 | (27.85) | 22,332 | 42,829 | (47.86) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real estate - 1-4 family mortgages | 305,141 | 341,744 | 391,102 | 445,526 | 489,674 | (10.71) | 305,141 | 489,674 | (37.68) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real estate - commercial mortgages | 872,867 | 905,223 | 966,367 | 1,010,035 | 1,066,536 | (3.57) | 872,867 | 1,066,536 | (18.16) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Installment loans to individuals | 51,723 | 59,675 | 66,031 | 76,051 | 87,362 | (13.33) | 51,723 | 87,362 | (40.79) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans, net of unearned income | $ | 1,395,906 | $ | 1,514,107 | $ | 1,660,514 | $ | 1,791,203 | $ | 1,966,973 | (7.81) | $ | 1,395,906 | $ | 1,966,973 | (29.03) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Asset quality data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non purchased assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nonaccrual loans | $ | 24,794 | $ | 20,369 | $ | 18,831 | $ | 16,591 | $ | 21,384 | 21.72 | $ | 24,794 | $ | 21,384 | 15.95 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Loans 90 past due or more | 2,235 | 3,783 | 1,826 | 3,993 | 4,459 | (40.92) | 2,235 | 4,459 | (49.88) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nonperforming loans | 27,029 | 24,152 | 20,657 | 20,584 | 25,843 | 11.91 | 27,029 | 25,843 | 4.59 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other real estate owned | 2,292 | 2,045 | 3,576 | 4,694 | 3,241 | 12.08 | 2,292 | 3,241 | (29.28) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nonperforming assets | $ | 29,321 | $ | 26,197 | $ | 24,233 | $ | 25,278 | $ | 29,084 | 11.93 | $ | 29,321 | $ | 29,084 | 0.81 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Purchased assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nonaccrual loans | $ | 28,947 | $ | 31,051 | $ | 24,821 | $ | 21,361 | $ | 19,090 | (6.78) | $ | 28,947 | $ | 19,090 | 51.63 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Loans 90 past due or more | 129 | 267 | 318 | 2,158 | 5,104 | (51.69) | 129 | 5,104 | (97.47) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nonperforming loans | 29,076 | 31,318 | 25,139 | 23,519 | 24,194 | (7.16) | 29,076 | 24,194 | 20.18 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other real estate owned | 3,679 | 3,927 | 4,576 | 4,431 | 5,430 | (6.32) | 3,679 | 5,430 | (32.25) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nonperforming assets | $ | 32,755 | $ | 35,245 | $ | 29,715 | $ | 27,950 | $ | 29,624 | (7.06) | $ | 32,755 | $ | 29,624 | 10.57 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net loan charge-offs (recoveries) | $ | 3,038 | $ | 954 | $ | 389 | $ | 1,698 | $ | 811 | 218.45 | $ | 3,038 | $ | 811 | 274.60 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses on loans | $ | 173,106 | $ | 176,144 | $ | 168,098 | $ | 145,387 | $ | 120,185 | (1.72) | $ | 173,106 | $ | 120,185 | 44.03 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Annualized net loan charge-offs / average loans | 0.11 | % | 0.03 | % | 0.01 | % | 0.06 | % | 0.03 | % | 0.11 | % | 0.03 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Nonperforming loans / total loans* | 0.52 | % | 0.51 | % | 0.41 | % | 0.40 | % | 0.51 | % | 0.52 | % | 0.51 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Nonperforming assets / total assets* | 0.40 | % | 0.41 | % | 0.36 | % | 0.36 | % | 0.42 | % | 0.40 | % | 0.42 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses on loans / total loans* | 1.62 | % | 1.61 | % | 1.52 | % | 1.32 | % | 1.23 | % | 1.62 | % | 1.23 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses on loans / nonperforming loans* | 308.54 | % | 317.55 | % | 367.05 | % | 329.65 | % | 240.19 | % | 308.54 | % | 240.19 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Nonperforming loans / total loans** | 0.29 | % | 0.26 | % | 0.22 | % | 0.22 | % | 0.33 | % | 0.29 | % | 0.33 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Nonperforming assets / total assets** | 0.19 | % | 0.18 | % | 0.16 | % | 0.17 | % | 0.21 | % | 0.19 | % | 0.21 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| *Based on all assets (includes purchased assets) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| **Excludes all purchased assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
15
| RENASANT CORPORATION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ending | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2021 | December 31, 2020 | March 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non purchased | $ | 8,362,793 | $ | 81,928 | 3.97 | % | $ | 8,167,922 | $ | 81,626 | 3.98 | % | $ | 7,654,662 | $ | 88,554 | 4.65 | % | |||||||||||||||||||||||||||||||||||||||||
| Purchased | 1,454,637 | 20,457 | 5.69 | % | 1,598,593 | 21,560 | 5.37 | % | 2,032,623 | 30,187 | 5.97 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| SBA Paycheck Protection Program | 985,561 | 10,687 | 4.40 | % | 1,252,990 | 10,271 | 3.26 | % | — | — | — | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Total loans | 10,802,991 | 113,072 | 4.24 | % | 11,019,505 | 113,457 | 4.10 | % | 9,687,285 | 118,741 | 4.93 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Loans held for sale | 406,397 | 2,999 | 2.96 | % | 389,435 | 3,083 | 3.15 | % | 336,829 | 2,988 | 3.57 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Securities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Taxable(1) | 1,065,779 | 4,840 | 1.82 | % | 985,695 | 4,953 | 2.00 | % | 1,067,274 | 7,289 | 2.75 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Tax-exempt | 306,344 | 2,284 | 2.98 | % | 283,413 | 2,238 | 3.14 | % | 225,601 | 2,058 | 3.67 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Total securities | 1,372,123 | 7,124 | 2.08 | % | 1,269,108 | 7,191 | 2.25 | % | 1,292,875 | 9,347 | 2.91 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing balances with banks | 777,166 | 183 | 0.10 | % | 381,919 | 92 | 0.10 | % | 292,488 | 811 | 1.12 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 13,358,677 | 123,378 | 3.74 | % | 13,059,967 | 123,823 | 3.77 | % | 11,609,477 | 131,887 | 4.57 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash and due from banks | 205,830 | 196,552 | 186,317 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Intangible assets | 969,001 | 970,624 | 975,933 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other assets | 670,183 | 670,912 | 700,823 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 15,203,691 | $ | 14,898,055 | $ | 13,472,550 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities and shareholders’ equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing demand(2) | $ | 5,906,230 | $ | 3,932 | 0.27 | % | $ | 5,607,906 | $ | 4,380 | 0.31 | % | $ | 4,939,757 | $ | 9,253 | 0.75 | % | |||||||||||||||||||||||||||||||||||||||||
| Savings deposits | 882,758 | 169 | 0.08 | % | 830,304 | 165 | 0.08 | % | 681,182 | 252 | 0.15 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Time deposits | 1,655,778 | 4,178 | 1.02 | % | 1,752,787 | 5,296 | 1.20 | % | 2,116,676 | 8,989 | 1.71 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing deposits | 8,444,766 | 8,279 | 0.40 | % | 8,190,997 | 9,841 | 0.48 | % | 7,737,615 | 18,494 | 0.96 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Borrowed funds | 483,907 | 3,835 | 3.21 | % | 516,414 | 3,958 | 3.05 | % | 829,320 | 5,077 | 2.46 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 8,928,673 | 12,114 | 0.55 | % | 8,707,411 | 13,799 | 0.63 | % | 8,566,935 | 23,571 | 1.11 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 3,862,422 | 3,808,595 | 2,586,963 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other liabilities | 240,171 | 249,674 | 213,509 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders’ equity | 2,172,425 | 2,132,375 | 2,105,143 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 15,203,691 | $ | 14,898,055 | $ | 13,472,550 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income/ net interest margin | $ | 111,264 | 3.37 | % | $ | 110,024 | 3.35 | % | $ | 108,316 | 3.75 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Cost of funding | 0.38 | % | 0.44 | % | 0.85 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cost of total deposits | 0.27 | % | 0.33 | % | 0.72 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which the Company operates. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
16
| RENASANT CORPORATION | |||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||||||||||||||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP | |||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||
| First | Fourth | Third | Second | First | |||||||||||||||||||||||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||||||||||||||||||||||||
| Net income (GAAP) | $ | 57,908 | $ | 31,521 | $ | 29,992 | $ | 20,130 | $ | 2,008 | |||||||||||||||||||||||||||||||
| Amortization of intangibles | 1,598 | 1,659 | 1,733 | 1,834 | 1,895 | ||||||||||||||||||||||||||||||||||||
Tax effect of adjustment noted above (A) | (361) | (297) | (374) | (335) | (527) | ||||||||||||||||||||||||||||||||||||
| Tangible net income (non-GAAP) | $ | 59,145 | $ | 32,883 | $ | 31,351 | $ | 21,629 | $ | 3,376 | |||||||||||||||||||||||||||||||
| Net income (GAAP) | $ | 57,908 | $ | 31,521 | $ | 29,992 | $ | 20,130 | $ | 2,008 | |||||||||||||||||||||||||||||||
| Debt prepayment penalties | — | 3 | 28 | 90 | — | ||||||||||||||||||||||||||||||||||||
| MSR valuation adjustment | (13,561) | (1,968) | (828) | 4,951 | 9,571 | ||||||||||||||||||||||||||||||||||||
| Restructuring charges | 292 | 7,365 | — | — | — | ||||||||||||||||||||||||||||||||||||
| Swap termination charges | — | 2,040 | — | — | — | ||||||||||||||||||||||||||||||||||||
| COVID-19 related expenses | 785 | 613 | 570 | 6,257 | 2,903 | ||||||||||||||||||||||||||||||||||||
Tax effect of adjustment noted above (A) | 2,820 | (1,443) | 50 | (2,065) | (3,467) | ||||||||||||||||||||||||||||||||||||
| Net income with exclusions (non-GAAP) | $ | 48,244 | $ | 38,131 | $ | 29,812 | $ | 29,363 | $ | 11,015 | |||||||||||||||||||||||||||||||
Average shareholders’ equity (GAAP) | $ | 2,172,425 | $ | 2,132,375 | $ | 2,119,500 | $ | 2,101,092 | $ | 2,105,143 | |||||||||||||||||||||||||||||||
| Intangibles | 969,001 | 970,624 | 972,394 | 974,237 | 975,933 | ||||||||||||||||||||||||||||||||||||
Average tangible s/h’s equity (non-GAAP) | $ | 1,203,424 | $ | 1,161,751 | $ | 1,147,106 | $ | 1,126,855 | $ | 1,129,210 | |||||||||||||||||||||||||||||||
| Average total assets (GAAP) | $ | 15,203,691 | $ | 14,898,055 | $ | 14,928,159 | $ | 14,706,027 | $ | 13,472,550 | |||||||||||||||||||||||||||||||
| Intangibles | 969,001 | 970,624 | 972,394 | 974,237 | 975,933 | ||||||||||||||||||||||||||||||||||||
| Average tangible assets (non-GAAP) | $ | 14,234,690 | $ | 13,927,431 | $ | 13,955,765 | $ | 13,731,790 | $ | 12,496,617 | |||||||||||||||||||||||||||||||
Actual shareholders’ equity (GAAP) | $ | 2,173,701 | $ | 2,132,733 | $ | 2,104,300 | $ | 2,082,946 | $ | 2,070,512 | |||||||||||||||||||||||||||||||
| Intangibles | 968,225 | 969,823 | 971,481 | 973,214 | 975,048 | ||||||||||||||||||||||||||||||||||||
Actual tangible s/h’s equity (non-GAAP) | $ | 1,205,476 | $ | 1,162,910 | $ | 1,132,819 | $ | 1,109,732 | $ | 1,095,464 | |||||||||||||||||||||||||||||||
| Actual total assets (GAAP) | $ | 15,622,571 | $ | 14,929,612 | $ | 14,808,933 | $ | 14,897,207 | $ | 13,900,550 | |||||||||||||||||||||||||||||||
| Intangibles | 968,225 | 969,823 | 971,481 | 973,214 | 975,048 | ||||||||||||||||||||||||||||||||||||
| Actual tangible assets (non-GAAP) | $ | 14,654,346 | $ | 13,959,789 | $ | 13,837,452 | $ | 13,923,993 | $ | 12,925,502 | |||||||||||||||||||||||||||||||
| (A) Tax effect is calculated based on respective periods effective tax rate. | |||||||||||||||||||||||||||||||||||||||||
17
| RENASANT CORPORATION | |||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||||||||||||||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP | |||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||
| First | Fourth | Third | Second | First | |||||||||||||||||||||||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||||||||||||||||||||||||
| (1) Return on Average Equity | |||||||||||||||||||||||||||||||||||||||||
Return on avg s/h’s equity (GAAP) | 10.81 | % | 5.88 | % | 5.63 | % | 3.85 | % | 0.38 | % | |||||||||||||||||||||||||||||||
| Effect of adjustment for intangible assets | 9.12 | % | 5.38 | % | 5.24 | % | 3.87 | % | 0.82 | % | |||||||||||||||||||||||||||||||
Return on avg tangible s/h’s equity (non-GAAP) | 19.93 | % | 11.26 | % | 10.87 | % | 7.72 | % | 1.20 | % | |||||||||||||||||||||||||||||||
Return on avg s/h’s equity (GAAP) | 10.81 | % | 5.88 | % | 5.63 | % | 3.85 | % | 0.38 | % | |||||||||||||||||||||||||||||||
| Effect of exclusions from net income | (1.80) | % | 1.23 | % | (0.03) | % | 1.77 | % | 1.72 | % | |||||||||||||||||||||||||||||||
Return on avg s/h’s equity with excl. (non-GAAP) | 9.01 | % | 7.11 | % | 5.60 | % | 5.62 | % | 2.10 | % | |||||||||||||||||||||||||||||||
| Effect of adjustment for intangible assets | 7.67 | % | 6.41 | % | 5.21 | % | 5.39 | % | 2.31 | % | |||||||||||||||||||||||||||||||
Return on avg tangible s/h’s equity with exclusions (non-GAAP) | 16.68 | % | 13.52 | % | 10.81 | % | 11.01 | % | 4.41 | % | |||||||||||||||||||||||||||||||
| (2) Return on Average Assets | |||||||||||||||||||||||||||||||||||||||||
| Return on avg assets (GAAP) | 1.54 | % | 0.84 | % | 0.80 | % | 0.55 | % | 0.06 | % | |||||||||||||||||||||||||||||||
| Effect of adjustment for intangible assets | 0.15 | % | 0.10 | % | 0.09 | % | 0.08 | % | 0.05 | % | |||||||||||||||||||||||||||||||
| Return on avg tangible assets (non-GAAP) | 1.69 | % | 0.94 | % | 0.89 | % | 0.63 | % | 0.11 | % | |||||||||||||||||||||||||||||||
| Return on avg assets (GAAP) | 1.54 | % | 0.84 | % | 0.80 | % | 0.55 | % | 0.06 | % | |||||||||||||||||||||||||||||||
| Effect of exclusions from net income | (0.25) | % | 0.18 | % | (0.01) | % | 0.25 | % | 0.27 | % | |||||||||||||||||||||||||||||||
| Return on avg assets with exclusions (non-GAAP) | 1.29 | % | 1.02 | % | 0.79 | % | 0.80 | % | 0.33 | % | |||||||||||||||||||||||||||||||
| Effect of adjustment for intangible assets | 0.12 | % | 0.11 | % | 0.10 | % | 0.10 | % | 0.07 | % | |||||||||||||||||||||||||||||||
| Return on avg tangible assets with exclusions (non-GAAP) | 1.41 | % | 1.13 | % | 0.89 | % | 0.90 | % | 0.40 | % | |||||||||||||||||||||||||||||||
| (3) Shareholder Equity Ratio | |||||||||||||||||||||||||||||||||||||||||
Shareholders’ equity to actual assets (GAAP) | 13.91 | % | 14.29 | % | 14.21 | % | 13.98 | % | 14.91 | % | |||||||||||||||||||||||||||||||
| Effect of adjustment for intangible assets | 5.68 | % | 5.96 | % | 6.02 | % | 6.01 | % | 6.43 | % | |||||||||||||||||||||||||||||||
| Tangible capital ratio (non-GAAP) | 8.23 | % | 8.33 | % | 8.19 | % | 7.97 | % | 8.48 | % | |||||||||||||||||||||||||||||||
18
| RENASANT CORPORATION | ||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | |||||||||||||||||||||||||||||||||||||
| First | Fourth | Third | Second | First | ||||||||||||||||||||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||||||||||||
| Interest income (FTE) | $ | 123,378 | $ | 123,823 | $ | 123,677 | $ | 125,630 | $ | 131,887 | ||||||||||||||||||||||||||||
| Interest expense | 12,114 | 13,799 | 15,792 | 18,173 | 23,571 | |||||||||||||||||||||||||||||||||
| Net Interest income (FTE) | $ | 111,264 | $ | 110,024 | $ | 107,885 | $ | 107,457 | $ | 108,316 | ||||||||||||||||||||||||||||
| Total noninterest income | $ | 81,037 | $ | 62,864 | $ | 70,928 | $ | 64,170 | $ | 37,570 | ||||||||||||||||||||||||||||
| Securities gains (losses) | 1,357 | 15 | — | 31 | — | |||||||||||||||||||||||||||||||||
| MSR valuation adjustment | 13,561 | 1,968 | 828 | (4,951) | (9,571) | |||||||||||||||||||||||||||||||||
| Total adjusted noninterest income | $ | 66,119 | $ | 60,881 | $ | 70,100 | $ | 69,090 | $ | 47,141 | ||||||||||||||||||||||||||||
| Total noninterest expense | $ | 115,935 | $ | 122,152 | $ | 116,510 | $ | 118,285 | $ | 115,041 | ||||||||||||||||||||||||||||
| Amortization of intangibles | 1,598 | 1,659 | 1,733 | 1,834 | 1,895 | |||||||||||||||||||||||||||||||||
| Debt prepayment penalty | — | 3 | 28 | 90 | — | |||||||||||||||||||||||||||||||||
| Restructuring charges | 292 | 7,365 | — | — | — | |||||||||||||||||||||||||||||||||
| Swap termination charges | — | 2,040 | — | — | — | |||||||||||||||||||||||||||||||||
| COVID-19 related expenses | 785 | 613 | 570 | 6,257 | 2,903 | |||||||||||||||||||||||||||||||||
| Provision for unfunded commitments | — | 500 | 2,700 | 2,600 | 3,400 | |||||||||||||||||||||||||||||||||
| Total adjusted noninterest expense | $ | 113,260 | $ | 109,972 | $ | 111,479 | $ | 107,504 | $ | 106,843 | ||||||||||||||||||||||||||||
| Efficiency Ratio (GAAP) | 60.29 | % | 70.65 | % | 65.16 | % | 68.92 | % | 78.86 | % | ||||||||||||||||||||||||||||
| (4) Adjusted Efficiency Ratio (non-GAAP) | 63.85 | % | 64.35 | % | 62.63 | % | 60.89 | % | 68.73 | % | ||||||||||||||||||||||||||||
19
First Quarter 2021 Earnings Call
2 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 Exchange Act of 1934, as amended. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “projects,” “anticipates,” “intends,” “estimates,” “plans,” “potential,” “possible,” “may increase,” “may fluctuate,” “will likely result,” and similar expressions, or future or conditional verbs such as “will,” “should,” “would” and “could,” are generally forward-looking in nature and not historical facts. Forward-looking statements include information about our future financial performance, business strategy, projected plans and objectives and are based on the current beliefs and expectations of management. We believe these forward-looking statements are reasonable, but they are all inherently subject to significant business, economic and competitive risks and uncertainties, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions about future business strategies and decisions that are subject to change. Actual results may differ from those indicated or implied in the forward-looking statements; such differences may be material. Prospective investors are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date they are made. Currently, the most important factor that could cause Renasant’s actual results to differ materially from those in forward-looking statements is the continued impact of the COVID-19 pandemic and related governmental measures to respond to the pandemic on the U.S. economy and the economies of the markets in which we operate and our participation in government programs related to the pandemic. In this presentation, we have addressed the historical impact of the pandemic on our operations and set forth certain expectations regarding the COVID-19 pandemic’s future impact on our business, financial condition, results of operations, liquidity, asset quality, capital, cash flows and prospects. We believe these statements about future events and conditions in light of the COVID-19 pandemic are reasonable, but these statements are based on assumptions regarding, among other things, how long the pandemic will continue, the pace at which the COVID-19 vaccine can be distributed and administered to residents of the markets we serve and the United States generally, the duration, extent and effectiveness of the governmental measures implemented to contain the pandemic and ameliorate its impact on businesses and individuals throughout the United States, and the impact of the pandemic and the government’s virus containment measures on national and local economies, all of which are out of our control. If the assumptions underlying these statements about future events prove to be incorrect, Renasant’s business, financial condition, results of operations, liquidity, asset quality, capital, cash flows and prospects may be materially different from what is presented in our forward-looking statements. Important factors other than the COVID-19 pandemic currently known to us that could cause actual results to differ materially from those in forward-looking statements include the following: (i) our ability to efficiently integrate acquisitions into operations, retain the customers of these businesses, grow the acquired operations and realize the cost savings expected from an acquisition to the extent and in the timeframe management anticipated; (ii) the effect of economic conditions and interest rates on a national, regional or international basis; (iii) timing and success of the implementation of changes in operations to achieve enhanced earnings or effect cost savings; (iv) competitive pressures in the consumer finance, commercial finance, insurance, financial services, asset management, retail banking, mortgage lending and auto lending industries; (v) the financial resources of, and products available from, competitors; (vi) changes in laws and regulations as well as changes in accounting standards; (vii) changes in policy by regulatory agencies; (viii) changes in the securities and foreign exchange markets; (ix) our potential growth, including our entrance or expansion into new markets, and the need for sufficient capital to support that growth; (x) changes in the quality or composition of our loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers; (xi) an insufficient allowance for credit losses as a result of inaccurate assumptions; (xii) general economic, market or business conditions, including the impact of inflation; (xiii) changes in demand for loan products and financial services; (xiv) concentration of credit exposure; (xv) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships; (xvi) increased cybersecurity risk, including potential network breaches, business disruptions or financial losses; (xvii) civil unrest, natural disasters, epidemics and other catastrophic events in our geographic area; (xviii) the impact, extent and timing of technological changes; and (xix) other circumstances, many of which are beyond our control. The COVID-19 pandemic has exacerbated, and is likely to continue to exacerbate, the impact of any of these factors on us. Management believes that the assumptions underlying our forward-looking statements are reasonable, but any of the assumptions could prove to be inaccurate. Investors are urged to carefully consider the risks described in Renasant’s filings with the Securities and Exchange Commission (“SEC”) from time to time, which are available at www.renasant.com and the SEC’s website at www.sec.gov. We undertake no obligation, and specifically disclaim any obligation, to update or revise our forward-looking statements, whether as a result of new information or to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, except as required by federal securities laws.
Overview Note: Financial data as of March 31, 2021 (1) Total revenue is calculated as net interest income plus noninterest income. Company Snapshot Loans and Deposits by State Assets: $15.6 billion Loans: 10.7 Deposits: 12.7 Equity: 2.2 3 MS 24% AL 20% FL 5% GA 33% TN 18% Loans MS 38% AL 12%FL 3% GA 34% TN 13% Deposits 67%3% 28% 2% YTD Total Revenue(1) Community Bank Wealth Management Mortgage Insurance
55 20 65 10 65 75 20 95 95 85 77 95 81 7524 40 59 40 FLORIDA Jackson Mobile Knoxville Chattanooga Greensboro Raleigh Columbia Nashville Winston-Salem Montgomery Birmingham Columbus Charlotte Jacksonville Memphis Orlando Huntsville Tallahassee Atlanta Wilmington Charleston Savannah Tupelo Greenville MISSISSIPPI ALABAMA TENNESSEE GEORGIA SOUTH CAROLINA NORTH CAROLINA ARKANSAS LOUISIANA Branch (162) Loan Production Office (7) Mortgage (21) Insurance (8) Financial Services (2) 4 Renasant Footprint Note: The map reflects the closure of 6 Renasant branches in April 2021.
First Quarter Highlights 5 • Net income of $57.91 million and diluted EPS of $1.02 • Mortgage banking income was $50.73 million, inclusive of a $13.56 million MSR valuation adjustment • Allowance for credit losses to total loans, excluding Paycheck Protection Program (“PPP”) loans, decreased to 1.76%(1) • Net charge-offs were $3.04 million and the ratio of nonperforming loans to total loans (excluding PPP loans) was 0.57% • Loans, excluding PPP loans, grew nominally quarter over quarter, at an annualized growth rate of 0.93% • Deposits increased $678 million quarter over quarter and noninterest-bearing deposits now represent 32.47% of total deposits (1) Allowance to total loans (excluding PPP loans) is a non-GAAP financial measure. See slide 35 in the appendix for a reconciliation of this non-GAAP financial measure to GAAP.
Financial Condition
Total Assets 7 Note: Dollars in millions $13,901 $14,897 $14,809 $14,930 $15,623 $10 ,000 $11 ,000 $12 ,000 $13 ,000 $14 ,000 $15 ,000 $16 ,000 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
Loans and Yields 8Note: Dollars in millions * Other loans are comprised of installment loans to individuals and lease financing, which both have historically constituted less than 5% of the total loan portfolio. ** Core Loan Yield is a non-GAAP financial measure. See slide 32 in the appendix for a description of the exclusions and a reconciliation of this non-GAAP financial measure to GAAP. $9,769 $10,997 $11,085 $10,933 $10,688 4.93% 4.31% 4.06% 4.10% 4.24%4.69% 4.24% 4.09% 4.03% 4.01% 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 1-4 Family Mortgage Commercial Mortgage Construction Other* C&I PPP Loan Yield Core Loan Yield**
Deposit Mix and Pricing 9 Note: Dollars in millions $10,412 $11,846 $11,934 $12,059 $12,737 0.72% 0.49% 0.40% 0.33% 0.27% 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Noninterest-bearing Interest-bearing Savings Time Cost of deposits
Liquidity 10 Note: Dollars in millions $638 $617 $414 $633 $1,262 $0 $20 0 $40 0 $60 0 $80 0 $1,0 00 $1,2 00 $1,4 00 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Cash and Cash Equivalents $1,359 $1,303 $1,293 $1,343 $1,536 $1,0 00 $1,1 00 $1,2 00 $1,3 00 $1,4 00 $1,5 00 $1,6 00 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Securities 94% 93% 93% 92% 88% $1 $1 $1 $1 $1 $1 $1 $1 $1 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Average Loans to Average Deposits
Capital Position 11 Tier 1 $1,353 Tier 2 $348 Regulatory Capital as of March 31, 2021 • $50 million stock repurchase program in effect until October 2021. • Consistent dividend payment history; including through the 2008 financial crisis and the pandemic. • Callable subordinated debt in 2021: • July 2021 - $15 million 6.50% fixed-to-floating rate subordinated notes • September 2021 - $60 million 5.00% fixed-to- floating rate subordinated notes Capital Highlights Subordinated Notes $212 ACL $136 Trust Preferred $107 Common Equity Tier 1 $1,246 1 Note: Dollars in millions
Strong Capital Position 12 * Tangible Common Equity is a non-GAAP financial measure. See slide 34 in the appendix for a description of the exclusions and a reconciliation of this non- GAAP financial measure to GAAP. Ratio 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Minimum to be Well Capitalized Tangible Common Equity* 8.48% 7.97% 8.19% 8.33% 8.23% N/A Leverage 9.90 9.12 9.17 9.37 9.49 5.00% Tier 1 Risk Based 11.63 11.69 11.79 11.91 12.00 8.00 Total Risk Based 13.44 13.72 14.89 15.07 15.09 10.00 Tier 1 Common Equity 10.63 10.69 10.80 10.93 11.05 6.50 PPP impact as of March 31, 2021: Tangible common equity* 51 bps Leverage ratio 70 bps Capital Ratios
Asset Quality
2.33% 0.00% 1.00% 2.00% 3.00% 4.00% $- $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Classified Loans/Total Loans(1) Classified Loans % of Total Loans, excl. PPP ($ in thousands) 0.22% 0.00% 0.50% 1.00% 1.50% 2.00% $- $25,000 $50,000 $75,000 $100,000 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Loans 30-89 Days Past Due/ Total Loans(1) 30-89 DPD % of Total Loans, excl. PPP ($ in thousands) Asset Quality 14(1) The ratio of loans 30-89 days past due to total loans (excluding PPP loans) and the ratio of classified loans to total loans (excluding PPP loans) are non-GAAP financial measures. See slide 35 in the appendix for a reconciliation of these non-GAAP financial measures to GAAP.
0.42% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% $- $25,000 $50,000 $75,000 $100,000 $125,000 $150,000 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 NPAs/Total Assets(1) Nonperforming loans OREO % of Assets ($ in thousands) 0.13% 0.00% 0.10% 0.20% 0.30% 0.40% $- $5,000 $10,000 $15,000 $20,000 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Net Charge-offs/Average Loans(1) Net charge-offs % of Avg Loans ($ in thousands) Asset Quality 15(1) Nonperforming assets to total assets (excluding PPP loans) and net charge-offs to average loans (excluding PPP loans) are non-GAAP financial measures. See slide 36 in the appendix for a reconciliation of these non-GAAP financial measures to GAAP.
1.76% 0.00% 0.50% 1.00% 1.50% 2.00% $- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Allowance/Total Loans Allowance % of Total Loans, excl. PPP ($ in thousands) 309% 0% 100% 200% 300% 400% 500% $- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Allowance/Nonperforming Loans Allowance % of Total NPLs ($ in thousands) • Loan purchase discount of $22.8 million (23 bps of total loans excluding PPP loans) remaining as of March 31, 2021. • 1.99% total loss absorption capacity (total allowance plus loan purchase discount remaining) as of March 31, 2021 excluding PPP loans. Asset Quality 16* Allowance to total loans excluding PPP is a non-GAAP financial measure. See slide 35 in the appendix for a reconciliation of this non-GAAP financial measure to GAAP.
ACL Summary ($ in thousands) ACL ACL as a % of Loans ACL ACL as a % of Loans SBA Paycheck Protection Program - - - - Commercial, Financial, Agricultural 39,031$ 2.77 37,592$ 2.71 Lease Financing Receivables 1,624 2.14 1,546 2.05 Real Estate - 1-4 Family Mortgage 32,165 1.19 31,694 1.18 Real Estate - Commercial Mortgage 76,127 1.67 76,225 1.68 Real Estate - Construction 16,047 1.87 14,977 1.57 Installment loans to individuals 11,150 5.32 11,072 6.40 Allowance for Credit Losses on Loans 176,144 1.61 173,106 1.62 Allowance for Credit Losses on Deferred Interest 1,500 1,375 Reserve for Unfunded Commitments 20,535 20,535 Total Allowance for Credit Losses 198,179$ 195,016$ ACL on Total Loans excluding PPP loans* 1.80 1.76 3/31/202112/31/2020 17* Allowance to total loans (excluding PPP loans) is a non-GAAP financial measure. See slide 35 in the appendix for a reconciliation of this non-GAAP financial measure to GAAP.
Profitability
Net Income & Adjusted Pre-Provision Net Revenue* 19 $2.0 $20.1 $30.0 $31.5 $57.9 $45.0 $65.6 $63.2 $57.4 $62.3 1.34% 1.79% 1.68% 1.53% 1.66% 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2018 2019 Net Income PPNR (Non-GAAP) PPNR/Avg Assets (Non-GAAP)Adj. PPNR (non-GAAP) Adj. PPNR /Avg. Assets (non-GAAP) Note: Dollars in millions *Adjusted Pre-Provision Net Revenue and Adjusted Pre-Provision Net Revenue/Average Assets are non GAAP financial measures. See slides 27 and 28 in the appendix for a description of the exclusions and a reconciliation of these non-GAAP financial measures to GAAP.
Diluted Earnings per Share and Diluted Earnings per Share Adjusted* 20 $.04 $.36 $.53 $.56 $1.02 $.20 $.52 $.53 $.68 $.85 $- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 EPS (GAAP) EPS Adjusted (non-GAAP)* * Diluted earnings per share (adjusted) is a non-GAAP financial measure. See slide 29 in the appendix for a description of exclusions and a reconciliation of this non-GAAP financial measure to GAAP.
Profitability Ratios 21 0.38% 3.85% 5.63% 5.88% 10.81% 4.41% 11.01% 10.81% 13.52% 16.68% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 ROE (GAAP) ROTCE (Adjusted) (non-GAAP)* * ROAA (Adjusted) and ROTCE (Adjusted) are non-GAAP financial measures. See slides 28 and 30 in the appendix for a description of the exclusions and a reconciliation of these non-GAAP financial measures to GAAP. 0.06% 0.55% 0.80% 0.84% 1.54% 0.33% 0.80% 0.79% 1.02% 1.29% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 1.80% 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 ROAA (GAAP) ROAA (Adjusted) (non-GAAP)* Return on Average Equity (ROE)Return on Average Assets (ROAA)
Core Net Interest Income (FTE) & Core Net Interest Margin* 22 $108.3 $107.5 $107.9 $110.0 $111.3 3.75% 3.38% 3.29% 3.35% 3.37% 3.56% 3.26% 3.23% 3.22% 3.12% 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Core NII (FTE)(Non-GAAP)* Non-Core NII NIM Core NIM (Non-GAAP)* Note: Dollars in millions *Core Net Interest Income (FTE) and Core Net Interest Margin are non-GAAP financial measures. See slide 31 in the appendix for a description of exclusions and a reconciliation of these non-GAAP financial measures to GAAP.
Note: Dollars in thousands $37,570 $64,170 $70,928 $62,864 $81,037 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Service Charges Fees and Commissions Insurance Wealth Management Mortgage Banking Securities Gains Other Noninterest Income 23 ($ in thousands) 1Q20 4Q20 1Q21 Gain on sales of loans, net 21,782$ 36,080$ 33,901$ Fees, net 2,919 5,318 4,902 Mortgage servicing income, net 405 (3,606) (1,631) MSR valuation adjustment (9,571) 1,968 13,561 Mortgage banking income, net 15,535$ 39,760$ 50,733$ Mortgage banking income 1Q20 4Q20 1Q21 Locked Volume $1.9 bill $1.4 bill $1.7 bill Wholesale % 45 41 43 Retail % 55 59 57 Purchase % 42 50 53 Refinance % 58 50 47 Mortgage production
79% 69% 65% 71% 60% 69% 61% 63% 64% 64% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Efficiency Ratio (GAAP) Adjusted Efficiency Ratio (non-GAAP)* Efficiency Ratio 24 Note: Dollars in millions *Adjusted Efficiency Ratio is a non-GAAP financial measure. See slide 33 in the appendix for a description of exclusions and a reconciliation of this non- GAAP financial measure to GAAP.
Appendix
COVID-19 Credit Impact Update • As of March 31, 2021, loans on deferral decreased to 0.96% of total loans, excluding PPP loans Loan Portfolio Portfolio Amount ($ in millions) Percentage of Total Loan Portfolio(1) Percentage of Portfolio Deferred(1) Percentage of Portfolio in Special Mention Percentage of Portfolio Classified Percentage of Portfolio Nonperforming Hospitality $349 3.5 - 15.9 14.5 - Senior Housing 294 3.0 - 8.5 8.9 4.5 26 (1) Excludes PPP loans. • Identified Hospitality and Senior Housing as more sensitive to the negative impacts of COVID-19 as of March 31, 2021 Deferral Amount Average Balance Deferred Category ($ in millions) ($ in thousands) Commercial, Financial, Agricultural $ 0.1 $ 70 Real Estate - 1-4 Family Mortgage 87.7 206 Installment loans to individuals 1.8 12 Real Estate - Commercial Mortgage 4.7 427 Real Estate - Construction 0.0 21 Total $ 94.3 $ 160 Deferrals by Category as of March 31, 2021
Reconciliation of Non-GAAP Disclosures Adjusted Pre-Provision Net Revenue 27 $ in thousands 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Net income (GAAP) 2,008$ 20,130$ 29,992$ 31,521$ 57,908$ Income taxes 773 4,637 7,612 6,818 16,842 Provision for credit losses (including unfunded commitments) 29,750 29,500 25,800 11,000 - Pre-provision net revenue (non-GAAP) 32,531$ 54,267$ 63,404$ 49,339$ 74,750$ Debt prepayment penalties - 90 28 3 - MSR valuation adjustment 9,571 4,951 (828) (1,968) (13,561) Restructuring charges - - - 7,365 292 Swap termination charges - - - 2,040 - COVID-19 related expenses(1) 2,903 6,257 570 613 785 Adjusted pre-provision net revenue (non-GAAP) 45,005$ 65,565$ 63,174$ 57,392$ 62,266$ (1) Primarily consists of employee overtime and employee benefit accruals directly related to the response to the pandemic and federal legislation enacted to address the pandemic, such as the CARES Act, and expenses associated with supplying branches with protective equipment and sanitation supplies (such as floor markings and cautionary signage for branches, face coverings and hand sanitizer) as well as more frequent and rigorous branch cleaning.
Reconciliation of Non-GAAP Disclosures Adjusted Pre-Provision Net Revenue/Average Assets 28 $ in thousands 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Net income (GAAP) 2,008$ 20,130$ 29,992$ 31,521$ 57,908$ Debt prepayment penalties - 90 28 3 - MSR valuation adjustment 9,571 4,951 (828) (1,968) (13,561) Restructuring charges - - - 7,365 292 Swap termination charges - - - 2,040 - COVID-19 related expenses(1) 2,903 6,257 570 613 785 Tax effect of adjustments noted above(2) (3,467) (2,065) 50 (1,443) 2,820 Net income with exclusions (non-GAAP) 11,015$ 29,363$ 29,812$ 38,131$ 48,244$ Adjusted pre-provision net revenue (non-GAAP)(3) 45,005$ 65,565$ 63,174$ 57,392$ 62,266$ Total average assets 13,472,550$ 14,706,027$ 14,928,159$ 14,898,055$ 15,203,691$ Return on Average Assets (GAAP) 0.06% 0.55% 0.80% 0.84% 1.54% Return on Average Assets (Adjusted) (non-GAAP) 0.33% 0.80% 0.79% 1.02% 1.29% Adjusted pre-provision net revenue/Average assets (non-GAAP) 1.34% 1.79% 1.68% 1.53% 1.66% (1) See footnote 1 on slide 27 for an explanation of the types of expenses included in the COVID-19 related expenses line item. (2) Tax effect is calculated based on the respective periods’ effective tax rate. (3) See slide 27 for reconciliation of Adjusted pre-provision net revenue.
Reconciliation of Non-GAAP Disclosures 29 Diluted Earnings Per Share $ in thousands 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Net income (GAAP) 2,008$ 20,130$ 29,992$ 31,521$ 57,908$ Debt prepayment penalties - 90 28 3 - MSR valuation adjustment 9,571 4,951 (828) (1,968) (13,561) Restructuring charges - - - 7,365 292 Swap termination charges - - - 2,040 - COVID-19 related expenses (1) 2,903 6,257 570 613 785 Tax effect of adjustments noted above (2) (3,467) (2,065) 50 (1,443) 2,820 Net income with exclusions (non-GAAP) 11,015$ 29,363$ 29,812$ 38,131$ 48,244$ Diluted shares outstanding (average) 56,706,289 56,325,476 56,386,153 56,489,809 56,519,199 Diluted EPS (GAAP) 0.04$ 0.36$ 0.53$ 0.56$ 1.02$ Diluted EPS (adjusted) (non-GAAP) 0.20$ 0.52$ 0.53$ 0.68$ 0.85$ (1) See footnote 1 on slide 27 for an explanation of the types of expenses included in the COVID-19 related expenses line item. (2) Tax effect is calculated based on the respective periods’ effective tax rate.
Reconciliation of Non-GAAP Disclosures 30 Return on Average Tangible Common Equity (Adjusted) $ in thousands 1Q20 2Q20 3Q20 4Q20 1Q 2021 Net income (GAAP) 2,008$ 20,130$ 29,992$ 31,521$ 57,908$ Debt prepayment penalties - 90 28 3 - MSR valuation adjustment 9,571 4,951 (828) (1,968) (13,561) Restructuring charges - - - 7,365 292 Swap termination charges - - - 2,040 - COVID-19 related expenses(1) 2,903 6,257 570 613 785 Tax effect of adjustments noted above(2) (3,467) (2,065) 50 (1,443) 2,820 Net income with exclusions (non-GAAP) 11,015$ 29,363$ 29,812$ 38,131$ 48,244$ Amortization of intangibles 1,895 1,834 1,733 1,659 1,598 Tax effect of adjustment noted above(2) (527) (335) (374) (297) (361) Tangible net income with exclusion (non-GAAP) 12,383$ 30,862$ 31,171$ 39,493$ 49,481$ Average shareholders' equity (GAAP) 2,105,143$ 2,101,092$ 2,119,500$ 2,132,375$ 2,172,425$ Intangibles 975,933 974,237 972,394 970,624 969,001 Average tangible shareholders' equity (non-GAAP) 1,129,210$ 1,126,855$ 1,147,106$ 1,161,751$ 1,203,424$ Return on Average Equity (GAAP) 0.38% 3.85% 5.63% 5.88% 10.81% Return on Average Tangible Common Equity (Adjusted) (non-GAAP) 4.41% 11.01% 10.81% 13.52% 16.68% (1) See footnote 1 on slide 27 for an explanation of the types of expenses included in the COVID-19 related expenses line item. (2) Tax effect is calculated based on the respective periods’ effective tax rate.
Reconciliation of Non-GAAP Disclosures Core Net Interest Income (FTE) and Core Net Interest Margin 31 $ in thousands 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Net interest income (FTE) (GAAP) 108,316$ 107,457$ 107,885$ 110,024$ 111,264$ Less: Net interest income collected on problem loans 218 384 282 128 2,180 Accretable yield recognized on purchased loans 5,469 4,700 4,949 4,130 3,088 Interest income on PPP loans - 5,886 7,449 10,271 10,687 Core net interest income (FTE) (non-GAAP) 102,629$ 96,487$ 95,205$ 95,495$ 95,309$ Total average earning assets 11,609,477$ 12,776,644$ 13,034,422$ 13,059,967$ 13,358,677$ Less: Average PPP loans - 866,078 1,305,229 1,252,990 985,561 Adjusted total average earning assets (non-GAAP) 11,609,477$ 11,910,566$ 11,729,193$ 11,806,977$ 12,373,116$ Net interest margin (GAAP) 3.75% 3.38% 3.29% 3.35% 3.37% Core net interest margin (non-GAAP) 3.56% 3.26% 3.23% 3.22% 3.12%
Reconciliation of Non-GAAP Disclosures Core Loan Yield 32 $ in thousands 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Loan interest income (FTE) (GAAP) 118,741$ 113,727$ 112,764$ 113,457$ 113,072$ Less: Net interest income collected on problem loans 218 384 282 128 2,180 Accretable yield recognized on purchased loans 5,469 4,700 4,949 4,130 3,088 Interest income on PPP loans - 5,886 7,449 10,271 10,687 Adjusted loan interest income (FTE) (non-GAAP) 113,054$ 102,757$ 100,084$ 98,928$ 97,117$ Total average loans 9,687,285$ 10,616,147$ 11,041,684$ 11,019,505$ 10,802,991$ Less: Average PPP loans - 866,078 1,305,229 1,252,990 985,561 Adjusted total average loans (non-GAAP) 9,687,285$ 9,750,069$ 9,736,455$ 9,766,515$ 9,817,430$ Loan yield (GAAP) 4.93% 4.31% 4.06% 4.10% 4.24% Core loan yield (non-GAAP) 4.69% 4.24% 4.09% 4.03% 4.01%
Reconciliation of Non-GAAP Disclosures Adjusted Efficiency Ratio 33 $ in thousands 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Net interest income (FTE) (GAAP) 108,316$ 107,457$ 107,885$ 110,024$ 111,264$ Total noninterest income (GAAP) 37,570 64,170 70,928 62,864 81,037 Securities gains (losses) - 31 - 15 1,357 MSR valuation adjustment (9,571) (4,951) 828 1,968 13,561 Adjusted total noninterest income (non-GAAP) 47,141$ 69,090$ 70,100$ 60,881$ 66,119$ Total income (FTE) (non-GAAP) 155,457$ 176,547$ 177,985$ 170,905$ 177,383$ Total noninterest expense (GAAP) 115,041$ 118,285$ 116,510$ 122,152$ 115,935$ Amortization of intangibles 1,895 1,834 1,733 1,659 1,598 Debt prepayment penalty - 90 28 3 - Restructuring charges - - - 7,365 292 Swap termination charges - - - 2,040 - Provision for unfunded commitments 3,400 2,600 2,700 500 - COVID-19 Related Expenses 2,903 6,257 570 613 785 Adjusted total noninterest expense (non-GAAP) 106,843$ 107,504$ 111,479$ 109,972$ 113,260$ Efficiency Ratio (GAAP) 78.86% 68.92% 65.16% 70.65% 60.29% Adjusted Efficiency Ratio (non-GAAP) 68.73% 60.89% 62.63% 64.35% 63.85%
Reconciliation of Non-GAAP Disclosures Tangible Common Equity and Tangible Book Value 34 $ in thousands 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Actual shareholders' equity (GAAP) 2,070,512$ 2,082,946$ 2,104,300$ 2,132,578$ 2,173,701$ Intangibles 975,048 973,214 971,481 969,823 968,225 Actual tangible shareholders' equity (non-GAAP) 1,095,464$ 1,109,732$ 1,132,819$ 1,162,755$ 1,205,476$ Actual total assets (GAAP) 13,890,550$ 14,897,207$ 14,808,933$ 14,929,666$ 15,622,571$ Intangibles 975,048 973,214 971,481 969,823 968,225 Actual tangible assets (non-GAAP) 12,915,502$ 13,923,993$ 13,837,452$ 13,959,843$ 14,654,346$ PPP Loans - 1,281,278 1,307,972 1,128,703 860,864 Actual tangible assets exc. PPP loans (non-GAAP) 12,915,502$ 12,642,715$ 12,529,480$ 12,831,140$ 13,793,482$ Tangible Common Equity Ratio Shareholders' equity to (actual) assets (GAAP) 14.91% 13.98% 14.21% 14.28% 13.91% Effect of adjustment for intangible assets 6.43% 6.01% 6.02% 5.95% 5.68% Tangible common equity ratio (non-GAAP) 8.48% 7.97% 8.19% 8.33% 8.23% Effect of adjustment for PPP loans - -0.81% -0.85% -0.73% -0.51% Tangible common equity ratio exc. PPP loans (non-GAAP) 8.48% 8.78% 9.04% 9.06% 8.74% Tangible Book Value Shares Outstanding 56,141,018 56,181,962 56,193,705 56,200,487 56,294,346 Book Value (GAAP) 36.88$ 37.07$ 37.45$ 37.95$ 38.61$ Tangible Book Value (non-GAAP) 19.51$ 19.75$ 20.16$ 20.69$ 21.41$
Reconciliation of Non-GAAP Disclosures Asset Quality Ratios excluding PPP loans 35 $ in thousands Q1 2020 Q2 2020 Q3 2020 Q4 2020 1Q 2021 Total loans (GAAP) 9,769,377$ 10,997,304$ 11,084,738$ 10,933,647$ 10,688,408$ Less: PPP loans - 1,281,278 1,307,972 1,128,703 860,864 Adjusted total loans (non-GAAP) 9,769,377$ 9,716,026$ 9,776,766$ 9,804,944$ 9,827,544$ Loans 30-89 Days Past Due 45,524 9,675 16,644 26,286 21,801 Loans 30-89 Days Past Due / Total Loans 0.47% 0.09% 0.15% 0.24% 0.20% Loans 30-89 Days Past Due / Total Loans excluding PPP loans 0.47% 0.10% 0.17% 0.27% 0.22% Classified Loans 144,509 163,364 219,583 236,062 229,244 Classified Loans / Total Loans 1.48% 1.49% 1.98% 2.16% 2.14% Classified Loans / Total Loans excluding PPP loans 1.48% 1.68% 2.25% 2.41% 2.33% Nonperforming Loans 50,037 44,103 45,796 55,470 56,105 Nonperforming Loans / Total Loans 0.51% 0.40% 0.41% 0.51% 0.52% Nonperforming Loans / Total Loans excluding PPP loans 0.51% 0.45% 0.47% 0.57% 0.57% Allowance for Credit Losses on Loans 120,185 145,387 168,098 176,144 173,106 ACL / Total Loans 1.23% 1.32% 1.52% 1.61% 1.62% ACL / Total Loans excluding PPP loans 1.23% 1.50% 1.72% 1.80% 1.76%
Reconciliation of Non-GAAP Disclosures Asset Quality Ratios excluding PPP loans, continued 36 $ in thousands Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Total average loans (GAAP) 9,687,285$ 10,616,147$ 11,041,684$ 11,019,505$ 10,802,991$ Less: Average PPP loans - 866,078 1,305,229 1,252,990 985,561 Adjusted total average loans (non-GAAP) 9,687,285$ 9,750,069$ 9,736,455$ 9,766,515$ 9,817,430$ Total assets (GAAP) 13,890,550$ 14,897,207$ 14,808,933$ 14,929,612$ 15,622,571$ Less: PPP loans - 1,281,278 1,307,972 1,128,703 860,864 Adjusted total assets (non-GAAP) 13,890,550$ 13,615,929$ 13,500,961$ 13,800,909$ 14,761,707$ Nonperforming Assets 58,708 53,228 53,948 61,442 62,076 Nonperforming Assets / Total Assets 0.42% 0.36% 0.36% 0.41% 0.40% Nonperforming Assets / Total Assets excluding PPP loans 0.42% 0.39% 0.40% 0.45% 0.42% Net charge-offs 811 1,698 389 954 3,038 Annualized Net charge-offs / Average Loans 0.03% 0.06% 0.01% 0.03% 0.11% Annualized Net charge-offs / Average Loans excluding PPP loans 0.03% 0.07% 0.02% 0.04% 0.13%
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