Renasant Bank reports Q3 earnings growth
by Ted Carter
Published: October 21,2010
Tags: Renasant Bank
TUPELO — Tupelo’s $4. 2 billion Renasant Bank, coming off this summer’s acquisition of a troubled Georgia bank, reported a third quarter income increase of nearly $16 million over the last quarter and a 63-cents increase in basic and diluted earnings per share from the second quarter.
The strong showing for the quarter has the regional bank touting its potential for more growth, including acquisitions.
The bank also shored up its capital reserves in July with a public stock offering that raised $51.4 million.
Renasant earned net income of $19,551,000 compared to $3,796,000 for the second quarter of 2010 and $4,225,000 for the third quarter of 2009, it said in an earnings release Wednesday.
Basic and diluted earnings per share were 81 cents during the third quarter compared to basic and diluted earnings per share of 18 cents for the second quarter. Renasant reported diluted earnings per share of 20 cents for the third quarter of 2009.
Renasant’s F.D.I.C.-assisted July acquisition of Crescent Bank & Trust in North Georgia added 11 branches and increased total assets of $778.8 million, total loans of $369.6 million, total deposits of $698 million, and resulted in a pre-tax gain of $42.2 million.
The $51.4 million from completion of the sale of 3.9 million shares on July 23 brought the bank’s leverage, Tier 1 and total capital ratios to 9.03 percent, 13.55 percent and 14.80 percent, respectively.
Also in the third quarter, Renasant opened its fifth branch in Birmingham and will open in the next six weeks in Columbus, a part of the economically resurgent “Golden Triangle” region of Northeast Mississippi.
Look for more growth in the months ahead, said Chairman & CEO E. Robinson McGraw. “With additional capital, excess cash and strong reserves, we believe that we are positioned to take advantage of opportunities to expand our market share and footprint as they present themselves in the future.”
The bank reported total loans of about $2.58 billion for the third quarter compared to a second quarter total of $2.26 billion and $2.35 billion at the end of 2009.
Renasant says it continued to focus on reducing its exposure to construction and land development loans. For the nine months ended Sept. 30, the bank has reduced its construction and land development portfolio by $130.2 million, or 31.40 percent.
Renasant increased its provision for loan losses to $11.5 million from the second quarter provision of $7 million. It reported non-performing loans of $64.7 million for the quarter, up from $64.7 million the previous quarter.
The higher number is “reflective of higher net charge offs in the third quarter,” McGraw said.
Annualized net charge-offs as a percentage of average loans were 1.18 percent for the third quarter compared to 1.21 percent for the second quarter and 1.12 percent for the third quarter of 2009.
The third quarter totals do not include the $67.1 million in bad loans acquired in the Crescent acquisition. Renasant expects to gain “substantial protection” from the bad Crescent loans through a loss share agreement with the FDIC, McGraw said.
McGraw noted improvement in the bank’s collection of loans late by 89 days or fewer, declining to going 1.05 percent compared to 1.57 percent on June 30.
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