Renasant Corporation Announces 2012 First Quarter Earnings

TUPELO, Miss., April 24, 2012 /PRNewswire/ -- Renasant Corporation (NASDAQ: RNST) (the "Company") today announced its financial results for the first quarter of 2012.  Net income for the first quarter of 2012 was $5,974,000, or basic and diluted earnings per share of $0.24, as compared to $5,790,000, or basic and diluted earnings per share of $0.23, for the fourth quarter of 2011.  Net income for the first quarter of 2011 was $7,553,000, or basic and diluted earnings per share of $0.30, and included a pre-tax gain of $8,774,000 and pre-tax merger-related costs of $1,325,000 in connection with the American Trust FDIC-assisted acquisition.

"Our first quarter 2012 financial results reflect our continued focus in several key areas, specifically, generating new business and aggressively working through the remainder of our nonperforming assets.  Looking back at the progress we have made over the last 12 months, it is noteworthy that we have grown loans for three consecutive quarters and increased noninterest bearing core deposits over 10 percent while reducing our nonperforming loans 47 percent on an annual comparison.  We also experienced significant decreases in 30 to 89 days past due loans and other real estate owned during the same period," said Renasant chairman and chief executive officer, E. Robinson McGraw.  "Capitalizing on new market entrances over the past 12 months, we have taken advantage of many opportunities to enhance our long-term profitability and expand our footprint and product delivery via both de novo branching and acquisitions in the southeast."   

To recap the Company's new market opportunities over the past 12 months, during the first quarter of 2011, the Company successfully completed the conversion related to the acquisition of the assets of the former Crescent Bank & Trust of Jasper, Georgia, which was acquired in 2010.  In February 2011, the Company acquired the assets of the former American Trust Bank in Roswell, Georgia, from the FDIC as the receiver of American Trust.  On July 1, 2011, the Company announced its entrance into the Montgomery, Alabama banking market with a de novo branch just two days after it announced that it had entered into an agreement to acquire RBC Bank (USA)'s Birmingham-based Trust division, which was completed in August.  Finishing out Renasant's new market entrances, the Company entered both the Starkville, Mississippi and Tuscaloosa, Alabama banking markets in late 2011 by opening de novo branches.

Total assets as of March 31, 2012, were approximately $4.18 billion, as compared to $4.20 billion as of December 31, 2011.  The Company's Tier 1 leverage capital ratio was 9.38 percent, its Tier 1 risk-based capital ratio was 13.34 percent and its total risk-based capital ratio was 14.59 percent.  In all capital ratio categories, the Company's regulatory capital ratios continued to be in excess of the regulatory minimums required to be classified as "well-capitalized." 

"Through prudent capital and balance sheet management, we continue to enhance our strong capital position, as evidenced by our tangible capital ratio which was 7.47 percent as of March 31, 2012, an 81 basis point increase over the prior year.  Our capital and related ratios are at levels that we believe adequately support future growth while at the same time allowing us to maintain our dividend," said McGraw.

Total deposits were $3.47 billion as of March 31, 2012, as compared to $3.41 billion as of December 31, 2011.  The Company continues to improve its deposit mix by replacing higher-costing funds with lower-costing core deposits as evidenced by the 10.13 percent growth in the Company's noninterest bearing deposits as of March 31, 2012, compared to March 31, 2011.  The result of these continued changes to the Company's funding mix, coupled with a reduction in borrowed funds, has reduced its cost of funds 47 basis points to 0.84 percent for the first quarter of 2012, as compared to 1.31 percent for the first quarter of 2011. 

Total loans, which include both loans covered and not covered under FDIC loss-share agreements, were approximately $2.60 billion as of March 31, 2012, as compared to $2.58 billion as of December 31, 2011.   Loans not covered under loss-share agreements were $2.28 billion as of March 31, 2012, as compared to $2.24 billion as of December 31, 2011, and $2.19 billion as of March 31, 2011, representing 1.80 percent linked quarter growth which annualizes to an approximate growth rate of 7.20 percent.  Loans covered under the FDIC loss-share agreements decreased to $318 million as of March 31, 2012, as compared to $339 million as of December 31, 2011. 

Net interest income was $32,843,000 for the first quarter of 2012, a 5.62 percent increase, from $31,096,000 for the first quarter of 2011.  Net interest margin increased to 3.85 percent for the first quarter of 2012, as compared to 3.55 percent for the first quarter of 2011.  

"Our increase in margin and net interest income was partly due to improvements in asset mix including an increase in loans, a decrease in nonaccrual loans and a decrease in cash.  We also saw improvements in our liability mix that included an increase in demand deposit, savings and money market balances and a decline in borrowed funds.  These improvements resulted in a 30 basis point increase in our net interest margin for the first quarter of 2012, as compared to the same period in 2011," stated McGraw. 

Noninterest income was $16,387,000 for the first quarter of 2012, as compared to $21,035,000 for the first quarter in 2011.  Noninterest income for the first quarter of 2011 included a one-time gain of $8,774,000 recognized in connection with the American Trust acquisition.  Included in first-quarter 2012 noninterest income was a $904,000 gain from the sale of investment securities compared to a $12,000 gain from the sale of securities during the same period in 2011.  Wealth management income totaled $1,942,000 for the first quarter of 2012, up $885,000, from the $1,057,000 realized during the same period in 2011, reflecting the full impact of the Company's trust acquisition. 

"Our diversified sources of noninterest income, such as mortgage and wealth management, have helped augment reductions in other areas of noninterest income due to recently enacted regulatory requirements," said McGraw.

Noninterest expense was $36,621,000 for the first quarter of 2012, as compared to $35,993,000 for the first quarter of 2011.  Included in noninterest expense for the first quarter of 2012 and 2011 were $898,000 and $1,903,000, respectively, in prepayment penalties related to the early extinguishment of higher-cost borrowings.  Salaries and employee benefits were $18,649,000 during the first quarter of 2012, as compared to $16,237,000 during the first quarter of 2011.  This increase is primarily attributable to the additional personnel from the Company's de novo branches and its trust acquisition.  Also contributing to this increase was higher-than-anticipated health insurance costs.

Nonperforming assets covered under FDIC loss-share agreements totaled $115.3 million as of March 31, 2012, down from $132.3 million as of December 31, 2011 and $145.8 million as of March 31, 2011.

Nonperforming loans and other real estate owned ("OREO") covered under FDIC loss-share agreements totaled $79.8 million and $35.5 million, respectively, as of March 31, 2012, compared to $89.2 million and $43.1 million, respectively, as of December 31, 2011.  The remaining discussion in this release of nonperforming loans, OREO and the related asset quality ratios exclude these assets covered under FDIC loss-share agreements.

The Company's nonperforming loans were $30.4 million as of March 31, 2012, down from $34.9 million as of December 31, 2011 and $57.2 million as of March 31, 2011.  Nonperforming loans as a percentage of total loans were 1.33 percent as of March 31, 2012, as compared to 1.56 percent as of December 31, 2011, and 2.61 percent as of March 31, 2011.  Furthermore, loans 30 to 89 days past due as a percent of total loans remained at pre-credit cycle levels and were 0.59 percent as of March 31, 2012, as compared to 0.71 percent as of December 31, 2011 and 0.86 percent as of March 31, 2011.  

The Company's coverage ratio, or its allowance for loan losses as a percentage of nonperforming loans, was 145.15 percent as of March 31, 2012, as compared to 127.00 percent as of December 31, 2011, and 82.99 percent as of March 31, 2011.  The allowance for loan losses as a percentage of loans was 1.94 percent as of March 31, 2012, as compared to 1.98 percent as of December 31, 2011 and 2.17 percent as of March 31, 2011. 

The Company recorded a provision for loan losses of $4,800,000 for the first quarter of 2012, as compared to $6,000,000 for the fourth quarter of 2011 and $5,500,000 for the first quarter of 2011.  Annualized net charge-offs as a percentage of average loans were 0.76 percent for the first quarter of 2012, as compared to 1.56 percent for the fourth quarter of 2011 and 0.54 percent for the first quarter of 2011. 

OREO was $64.9 million as of March 31, 2012, as compared to $70.1 million as of December 31, 2011 and $71.4 million as of March 31, 2011.  The Company continues to work aggressively to market OREO and currently has approximately $9.5 million of OREO under purchase agreements of which $3.6 million is scheduled to close during the second quarter of 2012.

"We are especially pleased to continue to see positive trends in our credit quality.  During the first quarter of 2012, nonperforming loans decreased 13 percent and 47 percent on a linked quarter and year-over-year comparison, respectively, and nonperforming assets decreased 9 percent and 26 percent on a linked quarter and year-over-year comparison, respectively.  In addition, our nonperforming loans, as compared to total loans, are at their lowest level since the second quarter of 2007.  At the same time, our coverage ratio, which was approximately 145 percent, is at its highest level since the fourth quarter of 2007," stated McGraw. 

CONFERENCE CALL INFORMATION:

A live audio webcast of a conference call with analysts will be available beginning at 10:00 a.m. EDT on Wednesday, April 25, 2012.

The webcast can be accessed through Renasant's investor relations website at www.renasant.com or https://services.choruscall.com/links/rnst120425.html.  To access the conference via telephone, dial 1-877-317-6789 in the United States and request the Renasant Corporation First Quarter 2012 Earnings Webcast and Conference Call.  International participants should dial 1-412-317-6789 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 10012811 or by dialing 1-412-317-0088 internationally and entering the conference number. 

ABOUT RENASANT CORPORATION:

Renasant Corporation, a 108-year-old financial services institution, is the parent of Renasant Bank and Renasant Insurance.  Renasant has assets of approximately $4.2 billion and operates over 75 banking, mortgage, financial services and insurance offices in Mississippi, Tennessee, Alabama and Georgia.

NOTE TO INVESTORS:

This news release may contain, or incorporate by reference, statements which may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Such forward looking statements usually include words such as "expects," "projects," "anticipates," "believes," "intends," "estimates," "strategy," "plan," "potential," "possible" and other similar expressions. 

Prospective investors are cautioned that any such forward-looking statements are not guarantees for future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.  Important factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include significant fluctuations in interest rates, inflation, economic recession, significant changes in the federal and state legal and regulatory environment, significant underperformance in our portfolio of outstanding loans, and competition in our markets. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

SOURCE Renasant Corporation