Renasant Corp. Reports Operating Results (10-Q)
Renasant Corp. has a market cap of $323.83 million; its shares were traded at around $15.36 with a P/E ratio of 20.21 and P/S ratio of 1.42. The dividend yield of Renasant Corp. stocks is 4.43%. Renasant Corp. had an annual average earning growth of 8.5% over the past 10 years.
Highlight of Business Operations: 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 $741,207 at March 31, 2010 from $714,164 at December 31, 2009. During the first three months of 2010, the Company purchased $105,442 of investment securities. Maturities and calls of securities during the first three months of 2010 totaled $77,131.
The loan balance, net of unearned income, at March 31, 2010 was $2,308,335, representing a decrease of $39,280 from $2,347,615 at December 31, 2009. The decline was primarily attributable to the continued reduction of our exposure to construction and land development loans. Management plans to continue this intentional reduction in subsequent quarters, but nevertheless, expects modest loan growth in the immediate quarters with loan balances to increase in the second half of the year through a more conservative approach in spreading risk through our loan portfolio. In addition, total loans were affected by the Companys exit from the student lending program due to recent legislation affecting the ability of banks to make these loans. The sale of our student loans reduced total loans over $10,000 at March 31, 2010 compared to December 31, 2009. Loans in our Alabama region increased $7,623 while loans in our Tennessee and Mississippi regions decreased $22,163 and $24,740, respectively, during the first three months of 2010 compared to the respective balances at December 31, 2009.
Mortgage loans held for sale were $16,597 at March 31, 2010 compared to $25,749 at December 31, 2009. Originations of mortgage loans to be sold totaled $101,571 for the first three months of 2010 as compared to $262,385 for the same period in 2009. During the first quarter of 2009, the Company experienced increased production in residential mortgage loans being refinanced due to a decline in mortgage interest rates. Mortgage loans to be sold are locked in at a contractual rate with third party private investors, and the Company is obligated to sell the mortgages to such investors only if the mortgages are closed and funded. Gains and losses are realized at the time consideration is received and all other criteria for sales treatment have been met. These loans are typically sold within thirty days after the loan is funded. Although loan fees and some interest income are derived from mortgage loans held for sale, the main source of income is gains from the sale of mortgage loans in the secondary market.
Total deposits increased $137,748 to $2,713,848 at March 31, 2010 from $2,576,100 on December 31, 2009. Noninterest-bearing deposits increased $10,102 to $315,064 at March 31, 2010 compared to $304,962 at December 31, 2009. Interest-bearing deposits increased $127,646 to $2,398,784 at March 31, 2010 from $2,271,138 at December 31, 2009. The cost of the Companys interest-bearing deposits decreased 44 basis points to 1.80% for the three months ended March 31, 2010 from 2.24% for the three months ended March 31, 2009. Approximately $80,920 of the increase in total deposits during the first quarter of 2010 represents public fund deposits, as government agencies received proceeds from tax collections. Management expects the balances of these public fund deposits to decrease through the remainder of the year as government agencies utilize the funds held in these accounts. Managements plan is to replace these deposits with core deposits.
Total borrowed funds were $483,183 at March 31, 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 $21,750 at March 31, 2010 compared to $22,397 at December 31, 2009. Long-term debt, consisting of long-term Federal Home Loan Bank (FHLB) advances and junior subordinated debentures, was $461,433 at March 31, 2010 compared to $595,627 at December 31, 2009. We repaid $134,141 of long-term FHLB borrowings that matured during the three months ended March 31, 2010 with the proceeds of deposits generated in the quarter.
Net income for the three month period ended March 31, 2010 was $3,607, a decrease of $2,399, or 39.94%, from net income of $6,006 for the same period in 2009. Basic and diluted earnings per share were $0.17 for the three month period ended March 31, 2010, as compared to basic earnings per share of $0.29 and diluted earnings per share of $0.28 for the comparable period a year ago.
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