Renasant Corporation today announced earnings results for the fourth quarter and year ended December 31, 2014. Net income for the fourth quarter of 2014 was approximately $15.6 million, up 39%, as compared to $11.3 million for the fourth quarter of 2013. Basic and diluted earnings per share ("EPS") were $0.49for the fourth quarter of 2014, as compared to basic and diluted EPS of $0.36 for the fourth quarter of 2013. 

Net income for 2014 was $59.6 million, as compared to $33.5 million for 2013. Basic and diluted EPS were $1.89 and $1.88, respectively, for 2014, as compared to basic and diluted EPS of $1.23 and $1.22, respectively, for 2013. 

In December of 2014, the Company announced a definitive merger agreement to acquire Heritage Financial Group, Inc. ("Heritage"), a bank holding company headquartered in Albany, Georgia, and the parent of HeritageBank of the South, in an all-stock merger. During the fourth quarter of 2014, the Company incurred merger expenses of approximately $500 thousand, or $0.01 in EPS, related to the Heritage merger. 

For the fourth quarter of 2014, the Company's return on average assets and return on average equity were 1.08% and 8.72%, respectively, as compared to 0.78% and 6.71%, respectively, for the fourth quarter of 2013. The Company's 2014 fourth quarter return on average tangible assets and return on average tangible equity were 1.20% and 15.89%, respectively, as compared to 0.90% and 13.55%, respectively, for the fourth quarter of 2013.

For 2014, the Company's return on average assets and return on average equity were 1.02% and 8.61%, respectively, as compared to 0.71% and 6.01%, respectively, for 2013. The Company's 2014 return on average tangible assets and return on average tangible equity were 1.15% and 16.25%, respectively, as compared to 0.79% and 10.83%, respectively, for 2013.

"Our financial results for the fourth quarter of 2014 represent a strong finish to a great year.  During 2014, we grew non-acquired loans over 13%, increased net interest margin, enhanced efficiency and improved our credit risk portfolio.  All of these accomplishments resulted in record earnings and superior returns on profitability metrics," commented Renasant Chairman and Chief Executive Officer, E. Robinson McGraw. "As we look to 2015, we believe we are well positioned to continue to improve on profitability and earnings growth, which in turn will generate shareholder value."

Total assets at December 31, 2014, were approximately $5.80 billion, as compared to $5.75 billion at December 31, 2013.

Total loans, including loans acquired in either the Company's acquisition of First M&F Corporation ("First M&F") in the third quarter of 2013 or in FDIC-assisted transactions (collectively referred to as "acquired loans"), increased 2.75% to approximately $3.99 billion at December 31, 2014, as compared to $3.88 billion at December 31, 2013. Excluding acquired loans, loans grew 13.23% to $3.27 billionat December 31, 2014, as compared to $2.89 billion at December 31, 2013. 

Total period end deposits remained flat at $4.84 billion at December 31, 2014, as compared to December 31, 2013. The Company's noninterest-bearing deposits averaged approximately $937 million, or 19.6% of average deposits, for the fourth quarter of 2014, as compared to $889 million, or 18.4% of average deposits, for the fourth quarter of 2013. The Company's cost of funds was 45 basis points for the fourth quarter of 2014, as compared to 51 basis points for the same quarter in 2013.

At December 31, 2014, the Company's tangible common equity ratio was 7.52%, Tier 1 leverage capital ratio was 9.53%, Tier 1 risk-based capital ratio was 12.45%, and total risk-based capital ratio was 13.54%. The Company's capital ratios were all in excess of regulatory minimums required to be classified as "well-capitalized."  

Net interest income was $50.0 million for the fourth quarter of 2014, as compared to $50.7 million for the fourth quarter of 2013. Net interest margin was 4.09% for the fourth quarter of 2014, as compared to 4.16% for the fourth quarter of 2013.  Additional interest income recognized in connection with the acceleration of pay downs and payoffs from acquired loans increased net interest margin 11 basis points in the fourth quarter of 2014, as compared to 16 basis points in the same period in 2013. 

The Company's noninterest income is derived from diverse lines of business which primarily consist of mortgage, wealth management and insurance revenue sources along with income from deposit and loan products. For the fourth quarter of 2014, noninterest income increased to $20.0 million, as compared to $18.3 million for the fourth quarter of 2013. The Company's growth in noninterest income for the fourth quarter of 2014, as compared to the fourth quarter of 2013, was driven primarily by higher levels of service charges on deposits and mortgage banking income.  

Noninterest expense was $46.0 million for the fourth quarter of 2014, as compared to $51.1 million for the fourth quarter of 2013. The reduction in noninterest expenses for the fourth quarter of 2014, as compared to the same period in 2013, is primarily due to reductions in salary and employee benefits, other real estate expense and merger related expenses. The Company recorded merger expenses during the fourth quarter of 2014 of approximately $500 thousand related to the pending Heritage merger and $1.9 million during the fourth quarter of 2013 related to the First M&F acquisition.  

At December 31, 2014, total nonperforming loans (loans 90 days or more past due and nonaccrual loans) were $55.1 million and total other real estate owned ("OREO") was $34.5 million. The Company's nonperforming loans and OREO that were acquired either through the First M&F merger or in connection with FDIC-assisted transactions (collectively referred to as "acquired nonperforming assets") were $34.9 million and $17.4 million, respectively at December 31, 2014. 

Since the acquired nonperforming assets were recorded at fair value at the time of acquisition or are subject to loss-share agreements with the FDIC, which significantly mitigates our actual loss, the remaining information in this release on nonperforming loans, OREO and the related asset quality ratios excludes these acquired nonperforming assets. 

Nonperforming assets decreased 20.17% to $37.3 million at December 31, 2014, as compared to $46.7 million at December 31, 2013.

Nonperforming loans were $20.2 million at December 31, 2014, as compared to $19.2 million at December 31, 2013. Early stage delinquencies, or loans 30-to-89 days past due, as a percentage of total loans were 0.32% at December 31, 2014, as compared to  0.31% at December 31, 2013. 

OREO was $17.1 million at December 31, 2014, as compared to $27.5 million at December 31, 2013, a 38.0% decrease. The Company continues to proactively market the properties held in OREO as it sold approximately $28.8 million of OREO during 2014 and $6.1 million during the fourth quarter of 2014. 

The Company recorded a provision for loan losses of $1.1 million for the fourth quarter of 2014, as compared to $2.0 million for the fourth quarter of 2013.  For the fourth quarter of 2014, net charge-offs were $3.3 million, as compared to $584 thousand in net charge-offs for the same period in 2013. Annualized net charge-offs as a percentage of average loans were 0.33% for the fourth quarter of 2014, as compared to 0.06% for the same quarter in 2013. 

The allowance for loan losses as a percentage of loans was 1.29% at December 31, 2014, as compared to 1.65% at December 31, 2013. The Company's coverage ratio, or the allowance for loan losses as a percentage of nonperforming loans, decreased to 209.49% at December 31, 2014, as compared to 248.90% at December 31, 2013.  

CONFERENCE CALL INFORMATION:

A live audio webcast of a conference call with analysts will be available beginning at 10:00 a.m. Eastern time on Wednesday, January 21, 2015, through the Company's website: www.renasant.com or http://services.choruscall.com/links/rnst150121.html. If Internet access is unavailable, the conference may also be heard live (listen-only) via telephone by dialing 1-877-513-1143 in the United Statesand requesting the Renasant Corporation earnings call. International participants should dial 1-412-902-4145.

The webcast will be archived on www.renasant.com beginning one hour after the call and will remain accessible for one year.  Replays can also be accessed via telephone by dialing 1-877-344-7529 in the United States and entering conference number 10058507 or by dialing 1-412-317-0088 internationally and entering the conference number.  Telephone replay access is available until 9:00 a.m. ET on February 5, 2015.