Annual Report 2 EE
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YEAR AT A GLANCE A Letter TO OUR SHAREHOLDERS For the past year Renasant Corporation’s mindset might have been summed up best “Renasant Bank is by Mississippi Business Journal reporter Ted Carter when he wrote in his November 21, 2010, column, “Renasant Bank is telling the Great Recession you’re not the boss telling the Great of me... In fact, the recession hasn’t called many shots at all in the Tupelo boardroom Recession you’re of Renasant.” not the boss of Although we were mindful of the recession and its impact, we did not spend 2010 merely waiting for change and a stagnant economy to turn around. We found that me... In fact, the even in a downturn, strong companies like ours can advance with purpose and recession hasn’t capitalize on opportunities as they present themselves. called many shots During 2010, we entered into a new state via acquisition, expanded into a new at all in the Tupelo Mississippi market with a de novo branch and added two new locations in previously established markets. We released new banking products such as mobile banking boardroom of and ID theft protection. We hired new banking talent and strategically positioned Renasant.” ourselves to capitalize on banking disruptions both in and outside our legacy banking footprint. Of great importance, we never reduced our dividend, maintaining a payout of 68 cents per share in 2010. Ted Carter Mississippi Business Journal November 21, 2010 In addition, all of this was accomplished against the backdrop of the largest financial regulatory overhaul in modern U.S. history, coupled with the most banking failures in a single year since 1992. GEORGIA In July 2010, we acquired certain assets and assumed the deposits of Crescent Bank & Trust of Jasper, Georgia (“Crescent”), through our first FDIC-assisted acquisition. All Crescent deposits were safe and accessible with no interruption in service. For Renasant, the acquisition of Crescent was immediately accretive to the Company’s earnings per share and tangible book value per share. Under the terms of the transaction, we acquired approximately $1 billion in assets, including approximately $600 million of loans and other real estate, and assumed approximately $900 million in deposits. Renasant and the FDIC entered into an arrangement in which the FDIC will share in 80% of the losses incurred on substantially all of the loans and OREO we acquired. 2010 Annual Report 2 EE.. RRobinsonobinson MMcGrawcGraw CChairman,hairman, PresidentPresident aandnd CChiefhief EExecutivexecutive OfficerOfficer In evaluating this FDIC-assisted transaction, we saw reflective of our own. We named Mark Williams, who’s Crescent as a tremendous opportunity to enhance our been with Renasant for 10 years and has more than 20 franchise while at the same time giving us access to new years of executive banking experience, to oversee the markets that would have otherwise been more difficult integration of Crescent into Renasant and to manage to enter. our North Georgia markets. In early 2011 the Crescent conversion was completed, and we now offer our full With the Crescent acquisition, we expanded our footprint product line to North Georgia. into North Georgia with 11 full-service locations in the markets of Jasper, Marble Hill, Cartersville, Adairsville, The Crescent acquisition was our fourth expansion since Canton, Woodstock, Cumming and Alpharetta. 2004 outside our headquarter’s state of Mississippi, and According to a report by Dunn & Bradstreet, there are we believe this acquisition represents a logical expansion over 36,000 small businesses (that is, businesses with for us. annual sales under $5 million) located in our new North Georgia footprint. In these markets, we believe small In February 2011 we further expanded into North Georgia businesses are underserved by the existing community with our second FDIC-assisted acquisition when we banks, and these markets are a perfect fit for our banking acquired American Trust Bank of Roswell, Georgia, model: offering all the products and services of the which had one branch each in Roswell, Alpharetta and major regionals, while at the same time providing the Cumming. We acquired approximately $158 million of relationship-driven service of a local community bank. American Trust’s assets, and we assumed approximately $237 million in liabilities. As with Crescent, all American In addition, with Crescent, we found banking markets Trust deposits were safe and no clients lost any money. that have similar demographics to many of our current markets and an employee service culture that was Advancing With Purpose 3 In this transaction, the FDIC retained substantially all Huntsville and Decatur areas in connection with the U.S. of American Trust’s nonperforming loans and other real military’s Base Realignment and Closure Act. estate owned. The loans acquired, except for a small portfolio of consumer loans, are covered by a loss share It is worth noting that our Alabama franchise grew loans agreement in which the FDIC will reimburse us for 80% by 3.28% and deposits by 40.99% in 2010 as compared of the losses incurred on these loans. Similar to the to 2009 while at the same time shifting its deposit mix to Crescent transaction, this acquisition is expected to be lower costing core deposits. We believe this is evidence of immediately accretive to Renasant’s earnings per share our ability to capitalize on the combination of disruptions and tangible book value. in the Alabama banking markets and the hard work by our Alabama franchise to take advantage of opportunities Our Georgia franchise branch network now has a total of to generate new business. 14 full-service locations in North Georgia. As we are now providing service in this region’s banking markets, we will TENNESSEE continue to look for strategic opportunities to grow. Our Tennessee franchise consists of seven locations in ALABAMA the Nashville region, and three locations in suburban Memphis. Although we did not have any expansions in In Alabama, we added a new full-service banking location these markets during 2010, we were pleased with the in Mountain Brook, a suburb of Birmingham. Mountain resiliency of Nashville emerging from a near catastrophic Brook boasts the highest per capita income ratios in all natural disaster. of Alabama and represents another major investment in our Alabama franchise and our Birmingham market in The entire Nashville region was paralyzed by a major particular. flood in the spring of 2010. The efforts of our Nashville franchise’s management team and employees to This was our third major Alabama opening over the past minimize the impact of the May floods on our business three years, as Renasant opened its Greystone location were a noteworthy achievement. in January 2009, and moved its Alabama Operations Headquarters and a branch location to the Park Place Due to these efforts and a little luck, the damage to our Tower in historic downtown Birmingham in February branches was minimal. Although our Hendersonville 2008. Our Alabama franchise now has a total of nine branch lobby was closed for one day due to the heavy locations in the cities of Decatur, Huntsville, Madison and rains, our drive-through remained open. All other Birmingham. branches remained open for business as usual despite the circumstances. Huntsville and Decatur continue to be strong growth markets due to their strong industrial, military, engineering Showing our dedication to the markets we serve, our and aerospace industries, as evidenced during 2010 with employees delivered food and water to variously affected aerospace, military and engineering companies Vector small businesses, donated and collected household Aerospace, Cummings Aerospace, Boecore, CSC and items, and assisted in cleaning up some of Nashville’s Redstone Arsenal all announcing major openings or hardest hit subdivisions. expansions. Beyond the flood, Nashville had a number of promising We look to continue expanding our presence and market economic announcements during the past year. For share in Alabama by taking advantage of opportunities example, the downtown area landed a new medical trade such as the influx of professionals and families into the center that is expected to supply approximately 2,700 2010 Annual Report 4 jobs and open in three years. Nashville is also adding business clients well and allow us to expand our services a $585 million convention center, and the construction and products to a thriving part of New Albany. project is estimated to create up to 3,000 jobs. Also during 2010 we entered a new Mississippi market by Our other Tennessee franchise market of Memphis opening a location in Columbus. We believe good things appears to be climbing its way back as well. In late are happening in the Golden Triangle, which includes 2010, national cooking products manufacturer Electrolux Columbus, Starkville, which is home to Mississippi announced it will open a new $190 million plant in the State University, and the city of West Point. Adding a Memphis region. The Electrolux plant is expected to Columbus location to partner with our two locations in provide approximately 3,500 direct and indirect supplier West Point and our ATM at the Mississippi State Student jobs when it commences operations. Union will help to fill in our footprint in this thriving part of Mississippi. This announcement is much welcomed news as this region was hit very hard by the recession, especially within The availability of a Main Street location in Columbus the residential construction and development sector. gives us a tremendous opportunity to access this market, and the recent disruptions in the banking industry in that MISSISSIPPI area are allowing us to acquire top-tier banking talent to help us obtain market share and quickly build a strong We’ve been serving Mississippi for over 106 years, and presence. the strength of our bank is evident in that we are opening new locations as the economy begins to rebound.