Renasant posts record earnings in second quarter

McGRAW

McGRAW

Daily Journal

TUPELO – Renasant Corp. posted second-quarter earnings of $14.85 million, a record amount for the 110-year-old financial holding company.

Renasant’s net income of 47 cents per share was 3 cents higher than consensus estimates, and was 85 percent higher than the $8.1 million, or 32 cents a share, recorded during last year’s second quarter.

The results demonstrated the continuing benefit of Renasant’s merger with First M&F Bank, which was completed last September.

“Our second quarter financial results reflect the achievement of several key short-term initiatives and continued progress on our long-term strategies, specifically a return to higher levels of sustainable profitability and replenishing capital deployed in the First M&F acquisition,” said Renasant Chairman and CEO Robin McGraw.

Renasant announced return on assets and return on equity of 1.02 percent and 8.67 percent respectively, compared to 0.76 percent and 6.35 percent in the year-ago quarter.

Renasant’s total assets as of June 30 were $5.83 billion. Total loans were about $3.96 billion,

Excluding acquired loans, loans grew 7.3 percent to $3.1 billion at the end of the quarter.

Total deposits were $4.89 billion.

Net interest income was $52.2 million, compared to $34.4 million a year earlier. Net interest margin – the percentage difference between the interest a bank earns from loans and investments and the interest it pays to depositors – was 4.24 percent for the second quarter compared to 3.88 percent for the second quarter of 2013 and 4.04 percent for the first quarter of this year.

Noninterest income was $19.5 million up from $17.3 million.

Renasant said its increase in noninterest income was primarily due to the First M&F merger, with a 37 percent increase in service charges and a 120 percent increase in insurance commissions and fees.

The company’s nonperforming loans – loans 90 days or more past due – were $20.8 million.

Renasant’s net charge-offs as a percentage of average loans were 0.23 percent, down from 0.35 percent from last year’s quarter. The company set aside $1.5 million for bad loans in the quarter, compared to $3 million last year.

The allowance for loan losses totaled $47.3 million at the end of June, equating to a percentage of loans of 1.53 percent.

“Our quarterly results represent our efforts to increase profitability in an economic period where competition results in thin margins,” McGraw said. “Despite these headwinds, our strong commercial and mortgage loan pipelines and our continued focus on improving our efficiency positions us to be opportunistic and drive higher levels of future profitability.”