Renasant Corporation Announces Earnings For the Third Quarter of 2020

Renasant Corporation
·31 min read

TUPELO, Miss., Oct. 27, 2020 (GLOBE NEWSWIRE) -- Renasant Corporation (NASDAQ: RNST) (the Company) today announced earnings results for the third quarter of 2020. Net income for the third quarter of 2020 was $30.0 million, as compared to $37.4 million for the third quarter of 2019. Basic and diluted earnings per share (EPS) were $0.53 for the third quarter of 2020, as compared to basic and diluted EPS of $0.65 and $0.64, respectively, for the third quarter of 2019.

Net income for the nine months ending September 30, 2020, was $52.1 million, as compared to net income of $129.2 million for the same time period in 2019. Basic and diluted EPS were $0.93 and $0.92, respectively, for the first nine months of 2020, as compared to basic and diluted EPS of $2.21 for the first nine months of 2019.

Our third quarter results continue to reflect the strong core earnings of our Company and highlight our team members commitment to the core operations of the bank, commented C. Mitchell Waycaster, Renasant President and Chief Executive Officer. We are proud of the commitment of our team during these uncertain times and the dedication that they have shown to the communities we serve. Our team members have worked countless hours over the past seven months ensuring that our clients needs were met, whether by closing a PPP loan or working through our internal deferral process, and they have done this while maintaining the quality that is central to our core ideals. During the third quarter, we continued to build credit reserves and issued subordinated debt, which enhanced our already strong capital position. Looking ahead, we are excited about our Companys position and our future prospects as we continue to prudently manage our balance sheet by focusing on profitable growth without sacrificing credit quality.

Paycheck Protection Program and COVID-19 Response Update

Over the course of the Paycheck Protection Program (PPP) the Company closed over 11,000 PPP loans in the aggregate amount of $1.31 billion.

The Company reopened its branch lobbies to the public on October 19, 2020, subject to capacity limitations, mask-wearing and social distancing requirements designed to promote the safety of clients and employees. Also, the additional measures the Company implemented to minimize Company employees exposure to COVID-19, such as working remotely, reconfiguring work spaces to promote social distancing and adjusting staff levels, remain in place. As discussed in more detail below, in the third quarter of 2020, the Company continued to incur expenses, primarily related to employee overtime and other employee benefit costs, in its response to the COVID-19 pandemic and expects that these elevated expenses will continue in future periods even while conditions presenting significant challenges to growth persist.

Impact of Certain Expenses and Charges

From time to time, the Company incurs expenses and charges in connection with certain transactions with respect to which management is unable to accurately predict when these expenses or charges will be incurred or, when incurred, the amount of such expenses or charges. The following table presents the impact of these expenses and charges on reported EPS for the third quarter of 2020 and for the same period in 2019. The COVID-19 related expenses line item in the table below primarily consists of (a) employee overtime and employee benefit accruals directly related to the Companys 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

 

Nine Months Ended

 

September 30, 2020

 

September 30, 2020

 

Pre-tax

After-tax

Impact to Diluted EPS

 

Pre-tax

After-tax

Impact to
Diluted EPS

Earnings, as reported

$

37,604

 

 

$

29,992

 

 

$

0.53

 

 

$

65,152

 

$

52,130

 

$

0.92

Debt prepayment penalty

28

 

 

22

 

 

 

 

118

 

94

 

MSR valuation adjustment

(828

)

 

(650

)

 

(0.01

)

 

13,694

 

10,916

 

0.19

COVID-19 related expenses

570

 

 

448

 

 

0.01

 

 

9,730

 

7,758

 

0.14

Earnings, with exclusions (Non-GAAP)

$

37,374

 

 

$

29,812

 

 

$

0.53

 

 

$

88,694

 

$

70,898

 

$

1.25

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30, 2019

 

September 30, 2019

 

Pre-tax

After-tax

Impact to Diluted EPS

 

Pre-tax

After-tax

Impact to
Diluted EPS

Earnings, as reported

$

48,578

 

 

$

37,446

 

 

$

0.64

 

 

$

167,848

 

$

129,181

 

$

2.21

Merger and conversion expenses

24

 

 

19

 

 

 

 

203

 

157

 

Debt prepayment penalty

54

 

 

41

 

 

 

 

54

 

41

 

MSR valuation adjustment

3,132

 

 

2,414

 

 

0.04

 

 

3,132

 

2,410

 

0.04

Earnings, with exclusions (Non-GAAP)

$

51,788

 

 

$

39,920

 

 

$

0.68

 

 

$

171,237

 

$

131,789

 

$

2.25

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 tables present the Companys profitability metrics, including and excluding the impact of the mortgage servicing rights (MSR) valuation adjustment, debt prepayment penalties, merger and conversion expenses and COVID-19 related expenses, as applicable, for the dates presented:

 

As Reported

With Exclusions
(Non-GAAP)

 

Three Months Ended

Three Months Ended

 

September 30, 2020

June 30, 2020

September 30, 2019

September 30, 2020

June 30, 2020

September 30, 2019

Return on average assets

0.80

%

0.55

%

1.16

%

0.79

%

0.80

%

1.23

%

Return on average tangible assets (Non-GAAP)

0.89

%

0.63

%

1.30

%

0.89

%

0.90

%

1.39

%

Return on average equity

5.63

%

3.85

%

6.97

%

5.60

%

5.62

%

7.43

%

Return on average tangible equity (Non-GAAP)

10.87

%

7.72

%

13.38

%

10.81

%

11.01

%

14.23

%

               

 

 

 

 

 

 

 

 

As Reported

With Exclusions
(Non-GAAP)

 

Nine Months Ended

Nine Months Ended

 

September 30, 2020

 

September 30, 2019

September 30, 2020

 

September 30, 2019

Return on average assets

0.48

%

 

1.35

%

0.66

%

 

1.38

%

Return on average tangible assets (Non-GAAP)

0.56

%

 

1.52

%

0.75

%

 

1.55

%

Return on average equity

3.30

%

 

8.22

%

4.49

%

 

8.39

%

Return on average tangible equity (Non-GAAP)

6.65

%

 

15.93

%

8.86

%

 

16.24

%

Financial Condition

Total assets were $14.81 billion at September 30, 2020, as compared to $13.40 billion at December 31, 2019. Total loans held for investment were $11.08 billion at September 30, 2020, as compared to $9.69 billion at December 31, 2019. Loans held for investment at September 30, 2020 included $1.31 billion in PPP loans.

Total deposits increased to $11.93 billion at September 30, 2020, from $10.21 billion at December 31, 2019. Non-interest bearing deposits increased $1.21 billion to $3.76 billion, or 31.49% of total deposits, at September 30, 2020, as compared to $2.55 billion, or 24.99% of total deposits, at December 31, 2019. The growth in non-interest bearing deposits during the year was primarily driven by the Companys PPP lending (as loan proceeds have been held as Company deposits until utilization), other government stimulus and client sentiment to maintain liquidity.

Continued Focus on Prudent Capital Management

The Company remains committed to maintaining a strong capital and liquidity position. On October 20, 2020, the Companys Board of Directors approved a new stock repurchase program (the previous program having just expired), authorizing the Company to repurchase up to $50.0 million of its outstanding common stock, either in open market purchases or privately-negotiated transactions. The new repurchase program will remain in effect for one year or, if earlier, the repurchase of the entire amount of common stock authorized to be repurchased. Notwithstanding the Boards action, the Company currently has no plans to initiate stock repurchases.

On September 3, 2020, the Company completed the public offering and sale of $100 million of its 4.50% fixed-to-floating rate subordinated notes due September 1, 2035. The subordinated notes were sold at par, resulting in net proceeds, after deducting underwriting discounts and expenses, of approximately $98.3 million. The Company intends to use the net proceeds from this offering for general corporate purposes, which may include providing capital to support the Companys organic growth or growth through strategic acquisitions, repaying indebtedness, financing investments, capital expenditures and for investments in Renasant Bank as regulatory capital.

At September 30, 2020, Tier 1 leverage capital was 9.17%, Common Equity Tier 1 ratio was 10.80%, Tier 1 risk-based capital ratio was 11.79%, and total risk-based capital ratio was 14.89%. All regulatory ratios exceed the minimums required to be well-capitalized.

The Companys ratio of shareholders equity to assets was 14.21% at September 30, 2020, as compared to 15.86% at December 31, 2019. The Companys tangible capital ratio (non-GAAP) was 8.19% at September 30, 2020, as compared to 9.25% at December 31, 2019.

The PPP loans originated and held on the Companys balance sheet at September 30, 2020, negatively impacted the Companys tangible capital ratio by 85 basis points and its leverage ratio by 94 basis points.

Results of Operations

Net interest income was $106.3 million for the third quarter of 2020, as compared to $105.8 million for the second quarter of 2020 and $108.8 million for the third quarter of 2019. Net interest income was $318.7 million for the first nine months of 2020, as compared to $334.8 million for the first nine months of 2019.

The Company continued to experience margin pressure during the third quarter of 2020 as a result of the Federal Reserves decision to cut interest rates as well as changes in the mix of earning assets during the quarter due to PPP loans and the excess liquidity on the balance sheet. The Company continued to focus on lowering the cost of funding by growing noninterest-bearing deposits and aggressively lowering interest rates on interest-bearing deposits. The following tables present 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

 

September  30,

June 30,

September  30,

September  30,

June 30,

September  30,

 

2020

2020

2019

2020

2020

2019

Loans held for investment excl. PPP loans

74.70

%

76.31

%

82.86

%

4.30

%

4.45

%

5.29

%

PPP loans

10.01

 

6.78

 

 

2.27

 

2.73

 

 

Loans held for sale

2.90

 

2.67

 

3.51

 

3.31

 

3.51

 

4.09

 

Securities

9.74

 

10.14

 

11.17

 

2.41

 

2.71

 

2.92

 

Other

2.65

 

4.10

 

2.46

 

0.10

 

0.15

 

2.18

 

Total earning assets

100.00

%

100.00

%

100.00

%

3.77

%

3.95

%

4.91

%


 

Percentage of Total Average Earning Assets

Yield

 

Nine Months Ended

Nine Months Ended

 

September  30,

September  30,

September  30,

September  30,

 

2020

2019

2020

2019

Loans held for investment excl. PPP loans

77.95

%

82.89

%

4.56

%

5.39

%

PPP loans

5.82

 

 

2.45

 

 

Loans held for sale

2.82

 

3.30

 

3.46

 

5.55

 

Securities

10.31

 

11.40

 

2.68

 

3.06

 

Other

3.10

 

2.41

 

0.38

 

2.42

 

Total earning assets

100.00

%

100.00

%

4.08

%

5.06

%

The following tables present reported taxable equivalent net interest margin and yield on loans, including loans held for sale, for the periods presented (in thousands).

 

Three Months Ended

 

September 30,

June 30,

September 30,

 

2020

2020

2019

Taxable equivalent net interest income

$

107,884

 

$

107,457

 

$

110,276

 

Average earning assets

$

13,034,422

 

$

12,776,644

 

$

10,993,645

 

Net interest margin

3.29

%

3.38

%

3.98

%

 

 

 

 

Taxable equivalent interest income on loans

$

115,908

 

$

116,703

 

$

125,391

 

Average loans, including loans held for sale

$

11,419,909

 

$

10,956,729

 

$

9,494,689

 

Loan yield

4.04

%

4.28

%

5.24

%


 

Nine Months Ended

 

September 30,

September 30,

 

2020

2019

Taxable equivalent net interest income

$

323,659

 

$

339,130

 

Average earning assets

$

12,475,561

 

$

10,944,142

 

Net interest margin

3.47

%

4.14

%

 

 

 

Taxable equivalent interest income on loans

$

354,340

 

$

380,492

 

Average loans, including loans held for sale

$

10,802,512

 

$

9,432,544

 

Loan yield

4.38

%

5.39

%

PPP loans reduced margin and loan yield by 12 basis points and 23 basis points, respectively, in the third quarter of 2020 and 6 basis points and 14 basis points, respectively, in the first nine months of 2020.

The impact from interest income collected on problem loans and purchase accounting adjustments on loans to total interest income on loans, including loans held for sale, loan yield and net interest margin is shown in the following tables for the periods presented (in thousands).

 

 

 

 

 

Three Months Ended

 

September 30,

June 30,

September 30,

 

2020

2020

2019

Net interest income collected on problem loans

$

282

 

$

384

 

$

905

 

Accretable yield recognized on purchased loans (1)

4,949

 

4,700

 

5,510

 

Total impact to interest income

$

5,231

 

$

5,084

 

$

6,415

 

 

 

 

 

Impact to total loan yield

0.18

%

0.19

%

0.27

%

 

 

 

 

Impact to net interest margin

0.16

%

0.16

%

0.23

%

(1)  Includes additional interest income recognized in connection with the acceleration of paydowns and payoffs from purchased loans of $2,286, $1,731 and $2,564 for the three months ended September 30, 2020, June 30, 2020, and September 30, 2019, respectively. This additional interest income increased total loan yield by 8 basis points, 6 basis points and 11 basis points for the same periods, respectively, while increasing net interest margin by 7 basis points, 5 basis points and 9 basis points for the same periods, respectively.

 

 

 

 

Nine Months Ended

 

September 30,

September 30,

 

2020

2019

Net interest income collected on problem loans

$

884

 

$

3,890

 

Accretable yield recognized on purchased loans (1)

15,118

 

20,566

 

Total impact to interest income

$

16,002

 

$

24,456

 

 

 

 

Impact to total loan yield

0.20

%

0.35

%

 

 

 

Impact to net interest margin

0.17

%

0.30

%

(1)  Includes additional interest income recognized in connection with the acceleration of paydowns and payoffs from purchased loans of $6,205 and $10,594 for the nine months ended September 30, 2020 and 2019, respectively. This additional interest income increased total loan yield by 8 basis points and 15 basis points for the same periods, respectively, while increasing net interest margin by 7 basis points and 13 basis points for the same periods, respectively.

For the third quarter of 2020, the cost of total deposits was 40 basis points, as compared to 49 basis points for the second quarter of 2020 and 84 basis points for the third quarter of 2019. The cost of total deposits was 53 basis points for the first nine months of 2020, as compared to 82 basis points for the same period in 2019. The tables below present, by type, the Companys funding sources and the total cost of each funding source for the periods presented:

 

Percentage of Total Average Deposits and Borrowed Funds

 

Cost of Funds

 

Three Months Ending

 

Three Months Ending

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

June 30,

 

September 30,

 

2020

 

2020

 

2019

 

2020

 

2020

 

2019

Noninterest-bearing demand

29.66

%

 

27.80

%

 

23.75

%

 

%

 

%

 

%

Interest-bearing demand

43.06

 

 

41.64

 

 

45.02

 

 

0.36

 

 

0.43

 

 

0.90

 

Savings

6.35

 

 

6.04

 

 

6.19

 

 

0.08

 

 

0.09

 

 

0.22

 

Time deposits

15.20

 

 

16.44

 

 

22.10

 

 

1.42

 

 

1.62

 

 

1.77

 

Borrowed funds

5.73

 

 

8.08

 

 

2.94

 

 

2.20

 

 

1.73

 

 

5.31

 

Total deposits and borrowed funds

100.00

%

 

100.00

%

 

100.00

%

 

0.50

%

 

0.59

%

 

0.97

%


 

 

 

 

 

 

 

 

 

Percentage of Total Average Deposits and Borrowed Funds

 

Cost of Funds

 

Nine Months Ending

 

Nine Months Ending

 

September 30,

 

September 30,

 

September 30,

 

September 30,

 

2020

 

2019

 

2020

 

2019

Noninterest-bearing demand

27.03

%

 

22.96

%

 

%

 

%

Interest-bearing demand

42.95

 

 

45.25

 

 

0.51

 

 

0.88

 

Savings

6.17

 

 

6.11

 

 

0.11

 

 

0.20

 

Time deposits

16.79

 

 

22.43

 

 

1.59

 

 

1.70

 

Borrowed funds

7.06

 

 

3.25

 

 

2.10

 

 

4.84

 

Total deposits and borrowed funds

100.00

%

 

100.00

%

 

0.64

%

 

0.95

%

Noninterest income for the third quarter of 2020 was $70.9 million, as compared to $64.2 million for the second quarter of 2020 and $38.0 million for the third quarter of 2019. Noninterest income for the first nine months of 2020 was $172.7 million, as compared to $115.8 million for the same period in 2019. Although service charges on deposit accounts increased slightly quarter over quarter, these remain lower year over year and have not yet returned to the pre-pandemic levels. Effective July 1, 2019, the Company became subject to the limitations on interchange fees imposed by the Durbin Amendment under the Dodd-Frank Act, which is reflected in the reduction in fees and commissions on loans and deposits in the first nine months of 2020 as compared to the first nine months of 2019. Mortgage banking income continued to be a strong source of noninterest income for the Company with mortgage production during the third quarter of 2020 of approximately $1.74 billion and year-to-date production of $5.32 billion. The following tables present the components of mortgage banking income for the periods presented (in thousands):

 

Three Months Ended

 

September 30, 2020

June 30, 2020

September 30, 2019

Gain on sales of loans, net

$

45,985

 

 

$

46,560

 

 

$

14,627

 

 

Fees, net

5,367

 

 

5,309

 

 

3,725

 

 

Mortgage servicing income, net

(2,466

)

 

(1,428

)

 

490

 

 

MSR valuation adjustment

828

 

 

(4,951

)

 

(3,132

)

 

Mortgage banking income, net

$

49,714

 

 

$

45,490

 

 

$

15,710

 

 


 

Nine Months Ended

 

September 30, 2020

September 30, 2019

Gain on sales of loans, net

$

114,327

 

 

$

35,416

 

 

Fees, net

13,595

 

 

8,363

 

 

Mortgage servicing income, net

(3,489

)

 

2,084

 

 

MSR valuation adjustment

(13,694

)

 

(3,132

)

 

Mortgage banking income, net

$

110,739

 

 

$

42,731

 

 

Noninterest expense was $116.5 million for the third quarter of 2020, as compared to $118.3 million for the second quarter of 2020 and $96.5 million for the third quarter of 2019. Noninterest expense was $349.8 million for the first nine months of 2020, as compared to $278.6 million for the same period in 2019. Salaries and benefits expense was $75.4 million for the third quarter of 2020, which represents a decrease of $4.0 million from the previous quarter. Although compensation related to the continued strong mortgage production during the quarter remained elevated, expenses related to overtime and other accruals for employee benefits provided in response to the COVID-19 pandemic decreased. The Company recorded a $2.7 million provision for unfunded commitments in other noninterest expense in the third quarter of 2020, as compared to a $2.6 million provision for unfunded commitments in the second quarter of 2020 and $3.4 million in the first quarter of 2020.

Asset Quality Metrics

At September 30, 2020, the Companys credit quality metrics remained strong. The Company has continued to monitor borrowers throughout the loan portfolio, with enhanced monitoring of loans remaining on deferral. The Company also continues to focus on those industries more highly impacted by the pandemic, primarily the hospitality and healthcare industries. To provide necessary relief to the Companys borrowers both consumer and commercial clients the Company established loan deferral programs allowing qualified clients to defer principal and interest payments. As of June 30, 2020, approximately 21.5% of the Companys loan portfolio (excluding PPP loans) was in deferral. The deferral percentage decreased to approximately 5.1% and 2.9%, respectively, as of September 30, 2020 and October 23, 2020.

The Companys 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 Companys control could include items such as federal, state and local government measures, the re-imposition of shelter-in-place orders, the economic impact of government programs, including additional fiscal stimulus or the re-opening of the Paycheck Protection Program, and the future impact of COVID-19.  Internal factors that will potentially impact credit quality include items such as the Companys 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 includes 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). 

 

September 30, 2020

December 31, 2019

 

Non Purchased

Purchased

Total

Non Purchased

Purchased

Total

Nonaccrual loans

$

18,831

 

$

24,821

 

$

43,652

 

$

21,509

 

$

7,038

 

$

28,547

 

Loans 90 days past due or more

1,826

 

318

 

2,144

 

3,458

 

4,317

 

7,775

 

Nonperforming loans

$

20,657

 

$

25,139

 

$

45,796

 

$

24,967

 

$

11,355

 

$

36,322

 

Other real estate owned

3,576

 

4,576

 

8,152

 

2,762

 

5,248

 

8,010

 

Nonperforming assets

$

24,233

 

$

29,715

 

$

53,948

 

$

27,729

 

$

16,603

 

$

44,332

 

Nonperforming loans/total loans

 

 

0.41

%

 

 

0.37

%

Nonperforming loans/total loans excluding PPP loans

 

 

0.47

%

 

 

 

Nonperforming assets/total assets

 

 

0.36

%

 

 

0.33

%

Nonperforming assets/total assets excluding PPP loans

 

 

0.40

%

 

 

 

Loans 30-89 days past due

$

10,254

 

$

6,390

 

$

16,644

 

$

22,781

 

$

14,887

 

$

37,668

 

Loans 30-89 days past due/total loans

 

 

0.15

%

 

 

0.39

%

The implementation of CECL on January 1, 2020, which required purchased credit deteriorated loans to be classified as nonaccrual based on performance, contributed approximately $4.7 million as of September 30, 2020 to the increase in purchased nonaccrual loans.

The table below shows the allowance transition from the former incurred loss allowance model at December 31, 2019 through the day one transition to CECL on January 1, 2020 and the subsequent reserve build-up through the first three quarters of 2020 and the ending allowance under the CECL model at September 30, 2020 (in thousands).

 

December 31, 2019

January 1, 2020

March 31, 2020

June 30, 2020

September 30, 2020

 

Incurred Loss Model

CECL Model

Allowance for credit losses

$

52,162

 

$

94,647

 

$

120,185

 

$

145,387

 

$

168,098

 

Reserve for unfunded commitments

946

 

11,336

 

14,735

 

17,335

 

20,035

 

Total reserves

$

53,108

 

$

105,983

 

$

134,920

 

$

162,722

 

$

188,133

 

Allowance for credit losses/total loans

0.54

%

0.98

%

1.23

%

1.32

%

1.52

%

Allowance for credit losses/total loans excluding PPP loans

 

 

 

1.50

%

1.72

%

Reserve for unfunded commitments/total unfunded commitments

0.04

%

0.47

%

0.60

%

0.66

%

0.73

%

The Company recorded a provision for credit losses of $23.1 million and a reserve for unfunded commitments, which is recorded in other noninterest expense (and discussed above), of $2.7 million for the third quarter of 2020. Net loan charge-offs were $389 thousand, or 0.01% of average loans held for investment on an annualized basis. The continued elevated provision and reserve are driven by qualitative factors related to the uncertainty concerning the COVID-19 pandemic, with limited GDP growth and elevated unemployment rates projected for the remainder of 2020 and into 2021 and 2022, and a potential prolonged economic recovery period.

The provision for credit losses recorded during the third quarter of 2019 was $1.7 million with net charge-offs of $945 thousand, or 0.04% of average loans held for sale on an annualized basis. The Companys coverage ratio, or the allowance for credit losses to nonperforming loans, was 367.05% as of September 30, 2020, as compared to 329.65% as of June 30, 2020 and 143.61% as of December 31, 2019.

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, October 28, 2020.

The webcast can be accessed through Renasants investor relations website at www.renasant.com or https://services.choruscall.com/links/rnst201028.html . To access the conference via telephone, dial 1-877-513-1143 in the United States and request the Renasant Corporation 2020 Third 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 10149030 or by dialing 1-412-317-0088 internationally and entering the same conference number. Telephone replay access is available until November 11, 2020.

ABOUT RENASANT CORPORATION:

Renasant Corporation is the parent of Renasant Bank, a 116-year-old financial services institution. Renasant has assets of approximately $14.8 billion and operates more than 200 banking, lending, mortgage, wealth management and insurance offices in Mississippi, Tennessee, Alabama, Florida and Georgia.

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 Companys future financial performance, business strategy, projected plans and objectives and are based on the current beliefs and expectations of management.  The Companys 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 Companys 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.  

Currently, the most important factor that could cause the Companys 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.  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 pandemics future impact on the Companys 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 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 governments virus containment measures on national and local economies, all of which are out of the Companys control.  If the Companys assumptions underlying its statements about future events prove to be incorrect, the Companys business, financial condition, results of operations, liquidity, asset quality, capital, cash flows and prospects may be materially different from what is presented in the Companys 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 Companys 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, such as the adoption of the CECL model as of January 1, 2020; (vii) changes in policy by regulatory agencies; (viii) changes in the securities and foreign exchange markets; (ix) the Companys 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 Companys 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) natural disasters, epidemics and other catastrophic events in the Companys geographic area; (xviii) the impact, extent and timing of technological changes; and (xix) other circumstances, many of which are beyond managements 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 Companys 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 Companys 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 SECs website at www.sec.gov.

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, merger and conversion expenses, debt prepayment penalties 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) were readily quantifiable and possess the same characteristics with respect to managements 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 merger and conversion expenses 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 institutions regulatory capital, the Company believes that the presentation of this non-GAAP financial information allows readers to more easily compare the Companys results to information provided in other regulatory reports and the results of other companies. Reconciliations of these other non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the table 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 Companys 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.

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

 

joxford@renasant.com  

 

jim.mabry@renasant.com  






RENASANT CORPORATION              

(Unaudited)     

(Dollars in thousands, except per share data)         

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3 2020-  

 

For The Nine Months Ending

 

 

 

 

2020

 

2019

 

Q3 2019

 

September 30,

 

 

 

 

 

Third

 

Second

 

First

 

Fourth

 

Third

 

Second

 

First

 

Percent

 

 

 

 

 

Percent

 

 

Quarter

 

Quarter

 

Quarter

 

Quarter

 

Quarter

 

Quarter

 

Quarter

 

Variance

 

2020

 

2019

 

Variance

Statement of earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income - taxable equivalent basis

 

$

123,677

 

 

$

125,630

 

 

$

131,887

 

 

$

135,119

 

 

$

135,927

 

 

$

139,285

 

 

$

138,578

 

 

(9.01

)%

 

$

381,194

 

 

$

413,790

 

 

(7.88

)%

Interest income

 

$

122,078

 

 

$

123,955

 

 

$

130,173

 

 

$

133,148

 

 

$

134,476

 

 

$

137,862

 

 

$

137,094

 

 

(9.22

)

 

$

376,206

 

 

$

409,432

 

 

(8.12

)

Interest expense

 

15,792

 

 

18,173

 

 

23,571

 

 

24,263

 

 

25,651

 

 

25,062

 

 

23,947

 

 

(38.44

)

 

57,536

 

 

74,660

 

 

(22.94

)

 

Net interest income

 

106,286

 

 

105,782

 

 

106,602

 

 

108,885

 

 

108,825

 

 

112,800

 

 

113,147

 

 

(2.33

)

 

318,670

 

 

334,772

 

 

(4.81

)

Provision for loan losses

 

23,100

 

 

26,900

 

 

26,350

 

 

2,950

 

 

1,700

 

 

900

 

 

1,500

 

 

1,258.82

 

 

76,350

 

 

4,100

 

 

1,762.20

 

 

Net interest income after provision

 

83,186

 

 

78,882

 

 

80,252

 

 

105,935

 

 

107,125

 

 

111,900

 

 

111,647

 

 

(22.35

)

 

242,320

 

 

330,672

 

 

(26.72

)

Service charges on deposit accounts

 

7,486

 

 

6,832

 

 

9,070

 

 

9,273

 

 

8,992

 

 

8,605

 

 

9,102

 

 

(16.75

)

 

23,388

 

 

26,699

 

 

(12.40

)

Fees and commissions on loans and deposits

 

3,402

 

 

2,971

 

 

3,054

 

 

2,822

 

 

3,090

 

 

7,047

 

 

6,471

 

 

10.10

 

 

9,427

 

 

16,608

 

 

(43.24

)

Insurance commissions and fees

 

2,681

 

 

2,125

 

 

1,991

 

 

2,105

 

 

2,508

 

 

2,190

 

 

2,116

 

 

6.90

 

 

6,797

 

 

6,814

 

 

(0.25

)

Wealth management revenue

 

4,364

 

 

3,824

 

 

4,002

 

 

3,920

 

 

3,588

 

 

3,601

 

 

3,324

 

 

21.63

 

 

12,190

 

 

10,513

 

 

15.95

 

Securities gains (losses)

 

 

 

31

 

 

 

 

 

 

343

 

 

-8

 

 

13

 

 

(100.00

)

 

31

 

 

348

 

 

(91.09

)

Mortgage banking income

 

49,714

 

 

45,490

 

 

15,535

 

 

15,165

 

 

15,710

 

 

16,620

 

 

10,401

 

 

216.45

 

 

110,739

 

 

42,731

 

 

159.15

 

Other

 

3,281

 

 

2,897

 

 

3,918

 

 

4,171

 

 

3,722

 

 

3,905

 

 

4,458

(11.85) 10,096 12,085 (16.46) Total noninterest income 70,928 64,170 37,570 37,456 37,953 41,960 35,885 86.88 172,668 115,798 49.11 Salaries and employee benefits 75,406 79,361 73,189 67,684 65,425 60,325 57,350 15.26 227,956 183,100 24.50 Data processing 5,259 5,047 5,006 5,095 4,980 4,698 4,906 5.60 15,312 14,584 4.99 Occupancy and equipment 13,296 13,511 14,120 13,231 12,943 11,544 11,835 2.73 40,927 36,322 12.68 Other real estate 1,033 620 418 339 418 252 1,004 147.13 2,071 1,674 23.72 Amortization of intangibles 1,733 1,834 1,895 1,946 1,996 2,053 2,110 (13.18) 5,462 6,159 (11.32)Merger and conversion related expenses — — — 76 24 179 — (100.00) — 203 — Debt extinguishment penalty 28 90 — — 54 — — (48.15) 118 54 100.00 Other 19,755 17,822 20,413 7,181 10,660 14,239 11,627 85.32 57,990 36,526 58.76 Total noninterest expense 116,510 118,285 115,041 95,552 96,500 93,290 88,832 20.74 349,836 278,622 25.56 Income before income taxes 37,604 24,767 2,781 47,839 48,578 60,570 58,700 (22.59) 65,152 167,848 (61.18)Income taxes 7,612 4,637 773 9,424 11,132 13,945 13,590 (31.62) 13,022 38,667 (66.32) Net income $29,992 $20,130 $2,008 $38,415 $37,446 $46,625 $45,110 (19.91) $52,130 $129,181 (59.65)Basic earnings per share $0.53 $0.36 $0.04 $0.67 $0.65 $0.80 $0.77 (18.46) $0.93 $2.21 (57.92)Diluted earnings per share 0.53 0.36 0.04 0.67 0.64 0.80 0.77 (17.19) 0.92 2.21 (58.37)Average basic shares outstanding 56,185,884 56,165,452 56,534,816 57,153,160 58,003,215 58,461,024 58,585,517 (3.13) 56,294,984 58,347,840 (3.52)Average diluted shares outstanding 56,386,153 56,325,476 56,706,289 57,391,876 58,192,419 58,618,976 58,730,535 (3.10) 56,468,577 58,508,582 (3.49)Common shares outstanding 56,193,705 56,181,962 56,141,018 56,855,002 57,455,306 58,297,670 58,633,630 (2.20) 56,193,705 57,455,306 (2.20)Cash dividend per common share $0.22 $0.22 $0.22 $0.22 $0.22 $0.22 $0.21 — $0.66 $0.65 1.54 Performance ratios Return on avg shareholders’ equity 5.63% 3.85% 0.38% 7.15% 6.97% 8.90% 8.86% 3.30% 8.22% Return on avg tangible s/h’s equity (non-GAAP) (1) 10.87% 7.72% 1.20% 13.75% 13.38% 17.15% 17.41% 6.65% 15.93% Return on avg assets 0.80% 0.55% 0.06% 1.16% 1.16% 1.47% 1.44% 0.48% 1.35% Return on avg tangible assets (non-GAAP)(2) 0.89% 0.63% 0.11% 1.30% 1.30% 1.64% 1.61% 0.56% 1.52% Net interest margin (FTE) 3.29% 3.38% 3.75% 3.90% 3.98% 4.19% 4.27% 3.47% 4.14% Yield on earning assets (FTE) 3.77% 3.95% 4.57% 4.75% 4.91% 5.11% 5.16% 4.08% 5.06% Cost of funding 0.50% 0.59% 0.85% 0.89% 0.97% 0.96% 0.92% 0.64% 0.95% Average earning assets to average assets 87.31% 86.88% 86.17% 85.71% 85.58% 85.72% 85.58% 86.81% 85.63% Average loans to average deposits 93.31% 93.35% 93.83% 92.43% 89.13% 89.13% 89.33% 93.48% 89.19% Noninterest income (less securities gains/ losses) to average assets 1.89% 1.75% 1.12% 1.13% 1.16% 1.32% 1.14% 1.60% 1.21% Noninterest expense (less debt prepayment penalties/ penalties/merger-related expenses) to average assets 3.10% 3.23% 3.43% 2.88% 2.98% 2.93% 2.83% 3.25% 2.91% Net overhead ratio 1.21% 1.48% 2.31% 1.75% 1.82% 1.61% 1.69% 1.65% 1.70% Efficiency ratio (FTE) 65.16% 68.92% 78.86% 64.43% 65.10% 59.73% 59.02% 70.49% 61.25% Adjusted efficiency ratio (FTE) (non-GAAP) (4) 62.63% 60.89% 68.73% 63.62% 62.53% 58.30% 57.62% 63.89% 59.47% RENASANT CORPORATION
(Unaudited)
(Dollars in thousands, except per share data)
Q3 2020 - As of 2020 2019 Q3 2019 September 30, Third Second First Fourth Third Second First Percent Percent Quarter Quarter Quarter Quarter Quarter Quarter Quarter Variance 2020 2019 VarianceAverage Balances Total assets $14,928,159 $14,706,027 $13,472,550 $13,157,843 $12,846,131 $12,764,669 $12,730,939 16.21% $14,370,953 $12,781,001 12.44%Earning assets 13,034,422 12,776,643 11,609,477 11,277,000 10,993,645 10,942,492 10,895,205 18.56 12,475,561 10,944,142 13.99 Securities 1,269,565 1,295,539 1,292,875 1,234,718 1,227,678 1,262,271 1,253,224 3.41 1,285,933 1,247,631 3.07 Loans held for sale 378,225 340,582 336,829 350,783 385,437 353,103 345,264 (1.87) 351,975 361,415 (2.61)Loans, net of unearned 11,041,684 10,616,147 9,687,285 9,457,658 9,109,252 9,043,788 9,059,802 21.21 10,450,537 9,071,129 15.21 Intangibles 972,394 974,237 975,933 977,506 975,306 974,628 976,820 (0.30) 974,182 975,579 (0.14)Noninterest-bearing deposits 3,723,059 3,439,634 2,586,963 2,611,265 2,500,810 2,395,899 2,342,406 48.87 3,251,612 2,413,619 34.72 Interest-bearing deposits 8,109,844 7,933,035 7,737,615 7,620,602 7,719,510 7,750,986 7,799,892 5.06 7,927,499 7,756,502 2.20 Total deposits 11,832,903 11,372,669 10,324,578 10,231,867 10,220,320 10,146,885 10,142,298 15.78 11,179,111 10,170,120 9.92 Borrowed funds 719,800 1,000,789 829,320 596,101 308,931 354,234 363,140 133.00 849,494 341,903 148.46 Shareholders' equity 2,119,500 2,101,092 2,105,143 2,131,342 2,131,537 2,102,093 2,065,370 (0.56) 2,108,618 2,099,909 0.41 Q3 2020 - As of 2020 2019 Q4 2019 September 30, Third Second First Fourth Third Second First Percent Percent Quarter Quarter Quarter Quarter Quarter Quarter Quarter Variance 2020 2019 VarianceBalances at period end Total assets $14,808,933 $14,897,207 $13,890,550 $13,400,618 $13,039,674 $12,892,653 $12,862,395 10.51% $14,808,933 $13,039,674 13.57%Earning assets 12,984,651 13,041,846 11,980,482 11,522,388 11,145,052 11,064,957 11,015,535 12.69 12,984,651 11,145,052 16.51 Securities 1,293,388 1,303,494 1,359,129 1,290,613 1,238,577 1,268,280 1,255,353 0.22 1,293,388 1,238,577 4.43 Loans held for sale 399,773 339,747 448,797 318,272 392,448 461,681 318,563 25.61 399,773 392,448 1.87 Non purchased loans 9,424,224 9,206,101 7,802,404 7,587,974 7,031,818 6,704,288 6,565,599 24.20 9,424,224 7,031,818 34.02 Purchased loans 1,660,514 1,791,203 1,966,973 2,101,664 2,281,966 2,350,366 2,522,694 (20.99) 1,660,514 2,281,966 (27.23) Total loans 11,084,738 10,997,304 9,769,377 9,689,638 9,313,784 9,054,654 9,088,293 14.40 11,084,738 9,313,784 19.01 Intangibles 971,481 973,214 975,048 976,943 978,390 973,673 975,726 (0.56) 971,481 978,390 (0.71)Noninterest-bearing deposits 3,758,242 3,740,296 2,642,059 2,551,770 2,607,056 2,408,984 2,366,223 47.28 3,758,242 2,607,056 44.16 Interest-bearing deposits 8,175,898 8,106,062 7,770,367 7,661,398 7,678,980 7,781,077 7,902,689 6.72 8,175,898 7,678,980 6.47 Total deposits 11,934,140 11,846,358 10,412,426 10,213,168 10,286,036 10,190,061 10,268,912 16.85 11,934,140 10,286,036 16.02 Borrowed funds 517,706 718,490 1,179,631 865,598 433,705 401,934 350,859 (40.19) 517,706 433,705 19.37 Shareholders’ equity 2,104,300 2,082,946 2,070,512 2,125,689 2,119,659 2,119,696 2,088,877 (1.01) 2,104,300 2,119,659 (0.72)Market value per common share 22.72 24.90 21.84 35.42 35.01 35.94 33.85 (35.86) 22.72 35.01 (35.10)Book value per common share 37.45 37.07 36.88 37.39 36.89 36.36 35.63 0.16 37.45 36.89 1.52 Tangible book value per common share 20.16 19.75 19.51 20.20 19.86 19.66 18.98 (0.20) 20.16 19.86 1.51 Shareholders’ equity to assets (actual) 14.21% 13.98% 14.91% 15.86% 16.26% 16.44% 16.24% 14.21% 16.26% Tangible capital ratio (non-GAAP)(3) 8.19% 7.97% 8.48% 9.25% 9.46% 9.62% 9.36% 8.19% 9.46% Leverage ratio 9.17% 9.12% 9.90% 10.37% 10.56% 10.65% 10.44% 9.17% 10.56% Common equity tier 1 capital ratio 10.80% 10.69% 10.63% 11.12% 11.36% 11.64% 11.49% 10.80% 11.36% Tier 1 risk-based capital ratio 11.79% 11.69% 11.63% 12.14% 12.40% 12.69% 12.55% 11.79% 12.40% Total risk-based capital ratio 14.89% 13.72% 13.44% 13.78% 14.07% 14.62% 14.57% 14.89% 14.07% RENASANT CORPORATION
(Unaudited)
(Dollars in thousands, except per share data)
Q3 2020 - As of 2020 2019 Q4 2019 September 30, Third Second First Fourth Third Second First Percent Percent Quarter Quarter Quarter Quarter Quarter Quarter Quarter Variance 2020 2019 VarianceNon purchased loans Commercial, financial, agricultural $1,137,321 $1,134,965 $1,144,004 $1,052,353 $988,867 $930,598 $921,081 8.07% $1,137,321 $988,867 15.01%SBA Paycheck Protection Program 1,307,972 1,281,278 — — — — — 100.00 1,307,972 — 100.00 Lease financing 82,928 80,779 84,679 81,875 69,953 59,158 58,651 1.29 82,928 69,953 18.55 Real estate - construction 738,873 756,872 745,066 774,901 764,589 716,129 651,119 (4.65) 738,873 764,589 (3.36)Real estate - 1-4 family mortgages 2,369,292 2,342,987 2,356,627 2,350,126 2,235,908 2,160,617 2,114,908 0.82 2,369,292 2,235,908 5.97 Real estate - commercial mortgages 3,610,642 3,400,718 3,242,172 3,128,876 2,809,470 2,741,402 2,726,186 15.40 3,610,642 2,809,470 28.52 Installment loans to individuals 177,195 208,502 229,856 199,843 163,031 96,384 93,654 (11.33) 177,195 163,031 8.69 Loans, net of unearned $9,424,223 $9,206,101 $7,802,404 $7,587,974 $7,031,818 $6,704,288 $6,565,599 24.20 $9,424,223 $7,031,818 34.02 Purchased loans Commercial, financial, agricultural $202,768 $225,355 $280,572 $315,619 $339,693 $374,478 $387,376 (35.76) $202,768 $339,693 (40.31)Real estate - construction 34,246 34,236 42,829 51,582 52,106 65,402 89,954 (33.61) 34,246 52,106 (34.28)Real estate - 1-4 family mortgages 391,102 445,526 489,674 516,487 561,725 604,855 654,265 (24.28) 391,102 561,725 (30.37)Real estate - commercial mortgages 966,367 1,010,035 1,066,536 1,115,389 1,212,905 1,276,567 1,357,446 (13.36) 966,367 1,212,905 (20.33)Installment loans to individuals 66,031 76,051 87,362 102,587 115,537 29,064 33,653 (35.63) 66,031 115,537 (42.85)Loans, net of unearned $1,660,514 $1,791,203 $1,966,973 $2,101,664 $2,281,966 $2,350,366 $2,522,694 (20.99) $1,660,514 $2,281,966 (27.23)Asset quality data Non purchased assets Nonaccrual loans $18,831 $16,591 $21,384 $21,509 $15,733 $14,268 $12,507 (12.45) $18,831 $15,733 19.69 Loans 90 past due or more 1,826 3,993 4,459 3,458 7,325 4,175 1,192 (47.19) 1,826 7,325 (75.07)Nonperforming loans 20,657 20,584 25,843 24,967 23,058 18,443 13,699 (17.26) 20,657 23,058 (10.41)Other real estate owned 3,576 4,694 3,241 2,762 1,975 3,475 4,223 29.47 3,576 1,975 81.06 Nonperforming assets $24,233 $25,278 $29,084 $27,729 $25,033 $21,918 $17,922 (12.61) $24,233 $25,033 (3.20)Purchased assets Nonaccrual loans $24,821 $21,361 $19,090 $7,038 $6,123 $7,250 $7,828 252.67 $24,821 $6,123 305.37 Loans 90 past due or more 318 2,158 5,104 4,317 7,034 7,687 5,436 (92.63) 318 7,034 (95.48)Nonperforming loans 25,139 23,519 24,194 11,355 13,157 14,937 13,264 121.39 25,139 13,157 91.07 Other real estate owned 4,576 4,431 5,430 5,248 6,216 5,258 5,932 (12.80) 4,576 6,216 (26.38)Nonperforming assets $29,715 $27,950 $29,624 $16,603 $19,373 $20,195 $19,196 78.97 $29,715 $19,373 53.38 Net loan charge-offs (recoveries) $389 $1,698 $811 $1,602 $945 $676 $691 (75.72) $2,898 $2,312 25.35 Allowance for loan losses $168,098 $145,387 $120,185 $52,162 $50,814 $50,059 $49,835 222.26 $168,098 $50,814 230.81 Annualized net loan charge-offs / average loans 0.01% 0.06% 0.03%0.07% 0.04% 0.03% 0.03% 0.04% 0.03% Nonperforming loans / total loans* 0.41% 0.40% 0.51%0.37% 0.39% 0.37% 0.30% 0.41% 0.39% Nonperforming assets / total assets* 0.36% 0.36% 0.42%0.33% 0.34% 0.33% 0.29% 0.36% 0.34% Allowance for loan losses / total loans* 1.52% 1.32% 1.23%0.54% 0.55% 0.55% 0.55% 1.52% 0.55% Allowance for loan losses / nonperforming loans* 367.05% 329.65% 240.19%143.61% 140.31% 149.97% 184.83% 367.05% 140.31% Nonperforming loans / total loans** 0.22% 0.22% 0.33%0.33% 0.33% 0.28% 0.21% 0.22% 0.33% Nonperforming assets / total assets** 0.16% 0.17% 0.21%0.21% 0.19% 0.17% 0.14% 0.16% 0.19% *Based on all assets (includes purchased assets) **Excludes all purchased assets

RENASANT CORPORATION

(Unaudited)

(Dollars in thousands, except per share data)

Three Months Ending

For The Nine Months Ending

September 30, 2020

June 30, 2020

September 30, 2019

September 30, 2020

September 30, 2019

Average

Interest

Yield/

Average

Interest

Yield/

Average

Interest

Yield/

Average

Interest

Yield/

Average

Interest

Yield/

Balance

Income/

Rate

Balance

Income/

Rate

Balance

Income/

Rate

Balance

Income/

Rate

Balance

Income/

Rate

Expense

Expense

Expense

Expense

Expense

Assets

Interest-earning assets:

Loans

Non purchased

$

8,012,741

$

81,281

4.04

%

$

7,872,371

$

81,836

4.18

%

$

6,792,021

$

85,084

4.97

%

$

7,847,197

$

251,671

4.28

%

$

6,624,266

$

250,190

5.05

%

Purchased

1,723,714

24,034

5.55

%

1,877,698

26,005

5.57

%

2,317,231

36,330

6.22

%

1,877,449

80,226

5.71

%

2,446,863

115,298

6.30

%

SBA Paycheck Protection Program

1,305,229

7,449

2.27

%

866,078

5,886

2.73

%

%

725,891

13,335

2.45

%

%

Total loans

11,041,684

112,764

4.06

%

10,616,147

113,727

4.31

%

9,109,252

121,414

5.29

%

10,450,537

345,232

4.41

%

9,071,129

365,488

5.39

%

Loans held for sale

378,225

3,144

3.31

%

340,582

2,976

3.51

%

385,437

3,977

4.09

%

351,975

9,108

3.46

%

361,415

15,004

5.55

%

Securities:

Taxable(1)

1,003,886

5,473

2.17

%

1,031,740

6,386

2.49

%

1,040,302

7,200

2.75

%

1,034,189

19,148

2.47

%

1,062,261

22,792

2.87

%

Tax-exempt

265,679

2,205

3.30

%

263,799

2,346

3.58

%

187,376

1,846

3.91

%

251,744

6,609

3.51

%

185,370

5,728

4.13

%

Total securities

1,269,565

7,678

2.41

%

1,295,539

8,732

2.71

%

1,227,678

9,046

2.92

%

1,285,933

25,757

2.68

%

1,247,631

28,520

3.06

%

Interest-bearing balances with banks

344,948

91

0.10

%

524,376

195

0.15

%

271,278

1,490

2.18

%

387,116

1,098

0.38

%

263,967

4,778

2.42

%

Total interest-earning assets

13,034,422

123,677

3.77

%

12,776,644

125,630

3.95

%

10,993,645

135,927

4.91

%

12,475,561

381,195

4.08

%

10,944,142

413,790

5.06

%

Cash and due from banks

210,278

214,079

173,156

203,582

181,140

Intangible assets

972,394

974,237

975,306

974,182

975,579

Other assets

711,065

741,067

704,024

717,628

680,140

Total assets

$

14,928,159

$

14,706,027

$

12,846,131

$

14,370,953

$

12,781,001

Liabilities and shareholders’ equity

Interest-bearing liabilities:

Deposits:

Interest-bearing demand(2)

$

5,405,085

$

4,839

0.36

%

$

5,151,713

$

5,524

0.43

%

$

4,740,426

$

10,769

0.90

%

$

5,166,393

$

19,616

0.51

%

$

4,755,948

$

31,338

0.88

%

Savings deposits

796,841

167

0.08

%

747,173

173

0.09

%

652,121

355

0.22

%

741,933

593

0.11

%

642,523

976

0.20

%

Time deposits

1,907,918

6,804

1.42

%

2,034,149

8,174

1.62

%

2,326,963

10,390

1.77

%

2,019,173

23,967

1.59

%

2,358,031

29,963

1.70

%

Total interest-bearing deposits

8,109,844

11,810

0.58

%

7,933,035

13,871

0.70

%

7,719,510

21,514

1.11

%

7,927,499

44,176

0.74

%

7,756,502

62,277

1.07

%

Borrowed funds

719,800

3,983

2.20

%

1,000,789

4,302

1.73

%

308,931

4,137

5.31

%

849,494

13,360

2.10

%

341,903

12,383

4.84

%

Total interest-bearing liabilities

8,829,644

15,793

0.71

%

8,933,824

18,173

0.82

%

8,028,441

25,651

1.27

%

8,776,993

57,536

0.88

%

8,098,405

74,660

1.23

%

Noninterest-bearing deposits

3,723,059

3,439,634

2,500,810

3,251,612

2,413,619

Other liabilities

255,956

231,477

185,343

233,730

169,068

Shareholders’ equity

2,119,500

2,101,092

2,131,537

2,108,618

2,099,909

Total liabilities and shareholders’ equity

$

14,928,159

$

14,706,027

$

12,846,131

$

14,370,953

$

12,781,001

Net interest income/ net interest margin

$

107,884

3.29

%

$

107,457

3.38

%

$

110,276

3.98

%

$

323,659

3.47

%

$

339,130

4.14

%

Cost of funding

0.50

%

0.59

%

0.97

%

0.64

%

0.95

%

Cost of total deposits

0.40

%

0.49

%

0.84

%

0.53

%

0.82

%

(1) U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which we operate.

(2) Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.

RENASANT CORPORATION

(Unaudited)

(Dollars in thousands, except per share data)

RECONCILIATION OF GAAP TO NON-GAAP

Nine Months Ended

2020

2019

September 30,

Third

Second

First

Fourth

Third

Second

First

Quarter

Quarter

Quarter

Quarter

Quarter

Quarter

Quarter

2020

2019

Net income (GAAP)

$

29,992

$

20,130

$

2,008

$

38,415

$

37,446

$

46,625

$

45,110

$

52,130

$

129,181

Amortization of intangibles

1,733

1,834

1,895

1,946

1,996

2,053

2,110

5,462

6,159

Tax effect of adjustment noted above (A)

(374

)

(335

)

(527

)

(383

)

(457

)

(473

)

(488

)

(1,108

)

(1,418

)

Tangible net income (non-GAAP)

$

31,351

$

21,629

$

3,376

$

39,978

$

38,985

$

48,205

$

46,732

$

56,484

$

133,922

Net income (GAAP)

$

29,992

$

20,130

$

2,008

$

38,415

$

37,446

$

46,625

$

45,110

$

52,130

$

129,181

Merger & conversion expenses

76

24

179

203

Debt prepayment penalties

28

90

54

118

54

MSR valuation adjustment

(828

)

4,951

9,571

(1,296

)

3,132

13,694

3,132

COVID-19 related expenses

570

6,257

2,903

9,730

Tax effect of adjustment noted above (A)

50

(2,065

)

(3,467

)

241

(736

)

(41

)

(4,774

)

(781

)

Net income with exclusions (non-GAAP)

$

29,812

$

29,363

$

11,015

$

37,436

$

39,920

$

46,763

$

45,110

$

70,898

$

131,789

Average shareholders’ equity (GAAP)

$

2,119,500

$

2,101,092

$

2,105,143

$

2,131,342

$

2,131,537

$

2,102,093

$

2,065,370

$

2,108,618

$

2,099,909

Intangibles

972,394

974,237

975,933

977,506

975,306

974,628

976,820

974,182

975,579

Average tangible s/h’s equity (non-GAAP)

$

1,147,106

$

1,126,855

$

1,129,210

$

1,153,836

$

1,156,231

$

1,127,465

$

1,088,550

$

1,134,436

$

1,124,330

Average total assets (GAAP)

$

14,928,159

$

14,706,027

$

13,472,550

$

13,157,843

$

12,846,131

$

12,764,669

$

12,730,939

$

14,370,953

$

12,781,001

Intangibles

972,394

974,237

975,933

977,506

975,306

974,628

976,820

974,182

975,579

Average tangible assets (non-GAAP)

$

13,955,765

$

13,731,790

$