Renasant reports better profits after First M&F acquisition
Published: April 23,2014
Tags: acquisition, bank, banking, E. Robinson McGraw, FactSet, Federal Deposit Insurance Corp., finance, financial institution, First M&F Corp., loan, loan loss, merger, profit, publicly traded company, Renasant Corp
TUPELO — Regional bank Renasant Corp. says profit in 2013’s fourth quarter rose 80 percent in the second period following its takeover of First M&F Corp.
Renasant posted quarterly profit yesterday of $13.6 million, or 43 cents per share. That’s up from $7.6 million, or 30 cents per share, in 2013’s first quarter. Because that earlier period was before the Sept. 1 merger, results aren’t strictly comparable.
Analysts polled by FactSet estimated 39 cents per share for the quarter, on average.
The bank reported merger expenses of $195,000 during 2014’s first three months, down from $1.9 million in 2013’s fourth quarter, part of a larger $3.5 million drop in noninterest expenses. Renasant set aside $1.45 million to cover future bad loans in the quarter, down from $2 million in 2013’s fourth quarter.
“We believe we have made a strong start toward achieving our key performance goals and increasing profitability throughout 2014,” Chairman and CEO E. Robinson McGraw said in a statement.
Return on average assets, a key measure of bank profitability, rose to 0.93 percent in the first quarter. That’s getting close to the national average of 0.96 percent that all banks nationwide achieved in the three months ended Dec. 31, according to Federal Deposit Insurance Corp. statistics, and well above the levels Renasant has recorded in many recent quarters.
Total loans fell slightly, as a drop in loans acquired from First M&F outweighed growth elsewhere.
The amount that the company collected in interest from borrowers, net of what it paid out to savers, fell slightly from fourth-quarter levels to $50 million. The net interest margin, a measure of that spread divided by all loans, fell to 4.04 percent in 2014’s first quarter from 4.16 percent from 2013’s fourth quarter. Renasant said it saw a seasonal influx of government deposits that it loaned out for short periods at low interest rates.
Based in Tupelo, the $5.9 billion bank has offices in Mississippi, Tennessee, Alabama and Georgia.
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