Renasant Corp. Reports Operating Results (10-Q)
Renasant Corp. has a market cap of $435.7 million; its shares were traded at around $17.4 with a P/E ratio of 75.7 and P/S ratio of 1.9. The dividend yield of Renasant Corp. stocks is 3.9%. Renasant Corp. had an annual average earning growth of 8.5% over the past 10 years.RNST is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations: On July 23, 2010, Renasant Bank (the Bank), a wholly-owned subsidiary of the Company, acquired specified assets and assumed specified liabilities of Crescent Bank & Trust Company, a Georgia-chartered bank headquartered in Jasper, Georgia (Crescent), from the Federal Deposit Insurance Corporation (the FDIC), as receiver for Crescent. Crescent operated, and the Company acquired and retained, 11 branches in the northwest region of Georgia. Of these 11 branches, Crescent owned the building and real property at nine branches and leased the remainder. Excluding the effects of purchase accounting adjustments, the Bank acquired $959,307 in total assets, including loans of $538,743, and assumed $917,096 in total liabilities, including $890,103 in deposits. Approximately $528,081 of acquired loans and $79,359 of other real estate owned (OREO) are covered by loss-sharing agreements (covered assets) between the FDIC and the Bank. For more information regarding this transaction, please refer to Note B, FDIC-Assisted Acquisition of Certain Assets and Liabilities of Crescent Bank & Trust, in the Notes to Condensed Consolidated Financial Statements included in Item 1, Financial Statements, as well as our discussion of the anticipated effects of the Crescent acquisition on the Companys financial condition, operating results and cash flows, and liquidity and capital resources, contained in the Amendment No. 1 to Form 8-K filed by the Company with the Securities and Exchange Commission on October 8, 2010.
The securities portfolio is used to provide a source for meeting liquidity needs and to supply securities to be used in collateralizing certain deposits and other types of borrowings. The balance of our securities portfolio increased to $745,486 at September 30, 2010 from $714,164 at December 31, 2009. The Bank acquired investment securities with an estimated fair value of $21,044 in the Crescent acquisition. The acquired securities were predominantly U.S. Government sponsored enterprise debt securities and U.S. Government sponsored enterprise mortgage-backed securities. In addition, the Company also acquired $3,162 in Federal Home Loan Bank of Atlanta stock. During the first nine months of 2010, the Company purchased $354,955 of investment securities. Maturities and calls of securities during the first nine months of 2010 totaled $212,102. The carrying value of securities available for sale sold during the first nine months of 2010 totaled $125,969.
The balance of loans, net of unearned income, at September 30, 2010 was $2,583,610, representing an increase of $235,995 from $2,347,615 at December 31, 2009. The acquisition of Crescent contributed total loans with a fair value of $362,901 at September 30, 2010. Loans in the Companys legacy markets (that is, the Companys markets other than its northwest Georgia markets) were $2,220,709 at September 30, 2010. During the first nine months of 2010, the Company continued to focus on the reduction of its exposure to construction and land development loans. The balance of the Companys construction and land development portfolio in its legacy markets was $284,578, or 12.81%, at September 30, 2010, compared to $414,820, or 17.67% of total loans in its legacy markets, at December 31, 2009. A majority of the reduction in these loans is attributable to these loans being converted to permanent financing after completion of the construction phase of the loan. The overall balance of land development loans increased during this period due to land development loans acquired in the Crescent acquisition. Management plans to continue this intentional reduction of this portfolio in all of its markets in subsequent quarters, but nevertheless, expects total loans to remain flat to declining in the immediate quarters, as new loan production is offset by reductions attributable to principal paydowns and payoffs.
Intangible assets increased $1,034 to $192,391 at September 30, 2010 from $191,357 at December 31, 2009. The increase reflects $2,489 of core deposits intangible recorded in connection with the assumption of the deposits in the Crescent acquisition offset by the amortization of previously recorded core deposit intangibles associated with prior acquisitions. The core deposits intangible recorded in connection with the Crescent acquisition is being amortized on a straight-line basis over an estimated useful life of ten years. Amortization of finite-lived intangible assets totaled $1,451 for the nine months ended September 30, 2010.
Total borrowed funds were $322,245 at September 30, 2010 compared to $618,024 at December 31, 2009. Short-term borrowings, consisting of treasury, tax and loan notes and securities sold under agreements to repurchase, were $19,422 at September 30, 2010 compared to $22,397 at December 31, 2009. Long-term debt, consisting of long-term Federal Home Loan Bank (FHLB) advances, debt guaranteed by the FDIC under its Temporary Liquidity Guarantee Program (TLGP) and junior subordinated debentures, was $302,823 at September 30, 2010 compared to $595,627 at December 31, 2009. We repaid $317,800 of long-term FHLB borrowings during the nine months ended September 30, 2010. Of the amount repaid, $169,800 was repaid upon maturity of the debt while $148,000 was paid prior to maturity.
Net income for the three month period ended September 30, 2010 was $19,551, an increase of $15,326 from net income of $4,225 for the same period in 2009. Basic and diluted earnings per share were $0.81 for the three month period ended September 30, 2010, as compared to basic and diluted earnings per share of $0.20 for the comparable period a year ago.
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