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Renasant Corp. (NASDAQ:RNST)

Q2 2014 Earnings Conference Call

July 16, 2014 10:00 AM ET

Executives

John Oxford - VP, Director of External Affairs

E. Robinson McGraw - President and CEO

Kevin Chapman - EVP and CFO

Mitch Waycaster - EVP and Chief Administrative Officer

Mike Ross - EVP and Chief Commercial Officer

Jim Gray - EVP and Chief Revenue Officer

Stuart Johnson - EVP and Treasurer

Analysts

Michael Rose - Raymond James

Catherine Mealor - KBW

David Bishop - Drexel Hamilton

Matt Olney - Stephens Incorporated

John Rodis - FIG Partners

Operator

Good morning and welcome to the Renasant Corporation’s Second Quarter Earnings Conference Call and Webcast. All participants will be in listen-only mode. (Operator Instructions). After today's presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note this event is being recorded.

I would now like to turn the conference over to John Oxford. Please go ahead, sir.

John Oxford

Thank you, Betty. Good morning and thank you for joining us for Renasant Corporation’s second quarter 2014 earnings conference call. Participating in this call today are members of Renasant Corporation’s executive management team. Before we begin, let me remind you that some of our comments during this call may be forward-looking statements, which involve risk and uncertainty. A number of factors could cause actual results to differ materially from anticipated results or other expectations expressed in the forward-looking statements. Those factors include, but are not limited to, interest rate fluctuation, regulatory changes, portfolio performance and other factors discussed in our recent filings with the Securities and Exchange Commission. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

And now I'll turn the call over to our Chairman and CEO, E. Robinson McGraw.

E. Robinson McGraw

Thank you, John. Good morning everyone, and welcome to our second quarter 2014 conference call. Our second quarter financial results reflect the achievement of several key short-term initiatives and continued progress on long-term strategies, specifically a return to higher levels of sustainable profitability and replenishing the capital that we deployed in the First M&F acquisition.

Focusing first on sustainable profitability, our earnings per share of $0.47 represent our highest quarterly earnings in the 110 year history of our company, excluding quarters where we recognize one-time gains associated with acquisitions. In addition, our return on assets was 1.02% for the quarter, marking the first time our return on assets exceeded 1% since the economic downturn.

These accomplishments were driven by annualized linked quarter loan growth in our non-acquired portfolio of 20.1% and a continued focus on generating revenues from our diversified lines of business while at the same time managing expenses to ensure future revenue growth is maximized. In regards to capital levels, our TCE ratio stands at 7% at June 30, 2014, which, coupled with our strong regulatory capital ratios, will continue to support future balance sheet growth, whether that growth is organic or the result of an external opportunity.

During the second quarter of ‘14, net income was approximately $14.8 million, as compared to approximately $8 million for the second quarter of ‘13. Basic and diluted EPS were $0.47 for the second quarter of ’14, as compared to $0.32 for the same period in ‘13.

Let me remind you, our balance sheet and results of operations as of and for the three months ending June 30, 2014, including impact of acquisition of M&F, which was completed on September 1, 2013. Periods discussed prior to September 1, 2013 do not reflect any impact from the First M&F acquisition.

For the second quarter of ‘14 our return on average assets and return on average equity were 1.02% and 8.7%, respectively, as compared to 0.76% and 6.4%, respectively for the second quarter of 2013. Our return on average tangible assets and return on average tangible equity were 1.15% and 16.55%, respectively, as compared to 0.87% and 10.5% respectively for the second quarter of ‘13.

Total assets as of June 30, 2014 were approximately $5.8 billion, as compared to $5.7 billion from December 31, 2013, and $5.9 billion on a linked quarter basis. The decrease in assets on a linked quarter basis is due to the seasonal runoff of deposits, primarily in public fund deposits, and related sale of the liquid assets in which these seasonal deposits were invested, such as low-yielding interest bearing cash or short-term investments.

Total deposits, including deposits acquired in the First M&F acquisition were $4.9 billion at June 30, 2014, as compared to approximately $4.8 billion on December 31, 2013, and $5 billion on a linked quarter basis. Noninterest-bearing deposits averaged approximately $905 million, which represents 18.4% of our average deposits for the second quarter of ‘14, as compared to approximately $562 million or 16% of average deposits for the second quarter of ‘13.

A continued improvement in our funding mix, along with continued downward re-pricing of time deposits resulted in our cost of funds declining to 48 basis points for the second quarter of ‘14, as compared to 60 basis points for the same quarter in ‘13. Total loans, including loans acquired in either the First M&F merger or in FDIC acquisitions which we collectively refer to as acquired loans, were approximately $3.96 billion on June 30, 2014, as compared to $3.88 billion at December 31, 2013, and $3.87 billion on a linked quarter basis.

Excluding acquired loans, non-acquired loans grew 7.3%, or 14.6% annualized to $3.1 billion at June 30, 2014, compared to $2.8 billion on December 31, 2013 and increased 5% or 20.1% annualized on a linked quarter basis. Breaking down year-on-year non-acquired loan growth by market, our Alabama market grew loans by 9.1% and has now grown loans in 17 of the last 18 quarters. Our Mississippi market increased loans by 14.4%. Our Tennessee market grew loans by 17.9%, which is their 10th consecutive quarter of loan growth and in Georgia, we grew loans by 30% as compared to the second quarter of ’13. Looking ahead, our loan pipelines and opportunities for growth throughout all of our markets project healthy loan growth for the remainder of ’14.

As of June 30, ’14, our Tier 1 leverage capital ratio was 8.91%. Tier 1 risk-based capital ratio was 11.82% and total risk based capital ratio was 12.96%. In all capital ratio categories, our regulatory capital ratios continue to be in excess of the regulatory minimum required to be classified is well capitalized. Net interest income was $52.2 million for the second quarter ’14, as compared to $34.4 million for the second quarter of ‘13 and $50 million for the first quarter of ’14. Net interest margin was 4.24% for the second quarter of ’14, as compared to 3.88% for the second quarter of ’13 and 4.04% for the first quarter of ’14.

Non-interest income was $19.5 million for the second quarter of ’14, as compared to $17.3 million for the second quarter of ’13 and 18.6 on a linked quarter basis. On a linked quarter basis, our growth in non-interest income was driven by higher levels of deposit and loan fees and increased revenues generated from our insurance, wealth management and mortgage banking divisions.

For the second quarter of ’14, our mortgage production volume increased 49%. Our gain on sale of mortgage loans increased 26% and our overall pipeline of mortgage loans increased 12% on a linked quarter basis. It’s worth pointing out that near the end of the quarter we hired a seasoned team of mortgage bankers in Birmingham and Montgomery, Alabama that we expect to greatly enhance production in those markets in the near future.

In addition, we are looking to add to our retail mortgage production capacity in Huntsville, Nashville, the Memphis/DeSoto County area, Atlanta and Jackson, Mississippi and also continuing to focus on wholesale production across our footprint and in contiguous states. Non-interest expense was $49.4 million for the second quarter ’14, as compared to $37.7 million for the second quarter of ‘13. The increase in non-interest expense as compared to the same period in ‘13 was primarily due to the expenses of the acquired M&F operations. This increase in expense was offset however by significant reduction in costs associated with our OREO as OREO expense decreased approximately 40% as compared to the second quarter of ’13.

On a linked quarter comparison, non-interest expense increased primarily due to higher level of salaries and employee benefits as a result of higher commissions on mortgages and higher insurance production, and also higher than anticipated health insurance claims, which we consider to be a one-time event. Our non-performing loans or loans 90 days or more past due and non-accrual loans were approximately $73 million and total OREO was approximately $42 million at June 30, ’14. Our non-performing loans in OREO that were acquired either in the M&F merger or in connection with FDIC assisted transactions, collectively referred to as acquired non-performing assets were approximately $52 million and approximately $18 million respectively at June 30, 2014. Since the acquired non-performing 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 discussion on non-performing loans, OREO and the related asset quality ratios exclude these acquired non-performing assets.

Our non-performing loans were approximately $21 million as of June 30, 2014 as compared to $19 million as of December 31, 2013. Non-performing loans as a percentage of total loans were 67 basis points as of June 30, 2014, as compared to 66 basis points as of December 31, ’13. Annualized net charge offs as a percentage of average loans were 23 basis points for the second quarter of ’14, as compared to 35 basis points for the second quarter of ’13. We recorded a provision for loan losses of $1.5 million for the second quarter of ’14 as compared to $3 million for the second quarter of ’13.

The allowance for loan losses totals $47.3 million or 1.53% of total loans at June 30, ’14 as compared to $47.7 million or 1.65% at December 31, ’13. Our coverage ratio or its allowance for loan losses as a percentage of non-performing loans was approximately 228% at June 30.

Loans 30 to 89 days past due as a percentage of total loans declined to 25 basis points at June 30, ’14 as compared to 31 basis points, December 31, ’13. OREO declined 13% to $23.9 million at June 30, ’14 as compared to $27.5 million on December 31, ’13.

In closing, our quarterly results are representative of our efforts to increase profitability in an economic period where competition results in thin margins. 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.

Now Betty I’ll turn it back over to you for any questions that anyone might have.

Question-And-Answer Session

Operator

Thank you, we will now begin the question and answer session. (Operator Instructions). At this time we will pause momentarily to assemble our roster. And our first question comes from Michael Rose of Raymond James. Please go ahead sir.

Michael Rose - Raymond James

I’m sorry if I missed this, I got on the call a little bit late but I wanted to drill into the expenses a little bit. Obviously the revenue growth was pretty good, this quarter. Happy to see it. But wanted to drill into maybe some of the things you mentioned in the press release about some elevated healthcare costs, things like that. How should we think about what is really the core kind of run rate of expenses as we move forward?

E. Robinson McGraw

Kevin, you want to answer that?

Kevin Chapman

Yes, I will. So Michael I think we reported non-interest expenses around $9.3 million for the quarter. If you look, the increases came primarily in salaries, employee benefits and other non-interest expenses. Salaries, employee benefits, the majority of that increase can be summed up in two areas as Robin mentioned, the commission expense from production and that’s going to vary with and be offset by the revenue that drives that expense and it’s a variable expense. The other is we did see a spike in Q2 on health and life insurance claims. We had an extraordinary event where we had three individuals hit the reinsurance limit, all in one quarter. I think that’s the first time where we’ve had three individuals hit the limit in the same quarter. We’ve had over the course of the year and previously in the course of the year where we had four or five individuals meet that in a yearly timeframe, this was the first time we experienced it on a quarterly basis.

E. Robinson McGraw

And we are self-funded.

Kevin Chapman

And we are self-funded. So we had to incur all of that expense in Q2. We do expect health insurance claims to level out for the remainder of the year. We don’t see - we don’t expect events to the magnitude that we had in Q2. When you look at other non-interest expenses, we did have -- other non-interest expenses increased about a $1 million and a majority of that is due to -- I would label it as onetime or non-recurring expenses. We were able to bring to resolution several ongoing matters, some in problem loan expense that will reduce the run rate in that expense going forward. So a run rate, it would be not be unrealistic to expect a run rate on future non-interest expenses below $9 million.

Michael Rose - Raymond James

Okay, and what was the impact of the healthcare costs?

Kevin Chapman

It is about $400,000 to $500,000.

Michael Rose - Raymond James

Okay, and then and could we just get an update on your loan pipeline and then maybe if you can talk about some of the trends by market, particularly as it relates to Georgia? Thanks.

E. Robinson McGraw

I’ll let Mitch Waycaster answer the first part of that question and then Mike Ross may join in afterwards.

Mitch Waycaster

Michael, the 30 day loan pipeline currently stands at $88 million. If you break that down by state, 23% would be in Tennessee, 15% in Alabama, 24% in Georgia and 38% in Mississippi. This pipeline should result in approximately $32 million in growth in non-acquired loans within 30 days which would equate to a low double digit annualized growth rate in non-acquired loans. An equivalent pipeline in the second quarter resulted in a somewhat higher growth in non-acquired, given lower than expected payoffs and paydowns. The current pipeline of $88 million, you look back to the end of the prior quarter, it equated to $88 million. On the linked quarter, prior year same period was $80 million. So the $88 million pipeline that we continue to experience is a strong pipeline as we enter the third quarter and we expect continued healthy loan growth.

Mike Ross

And Michael, this is Mike. Specifically to your question on Georgia, we are very bullish on what we’re seeing going on in Georgia. Specifically some of the bankers that we’ve referred to in the past that we had hired as replacements to our existing team that we acquired in our acquisitions are continuing to see solid results and as you heard Mitch talk about in our pipelines, our Georgia pipeline is actually quite healthy going into third quarter.

Operator

And the next question comes from Catherine Mealor of KBW. Please go ahead.

Catherine Mealor - KBW

Can we dig into the margin a little bit and Kevin, I want to see if you could give us the core margins for the quarter and break out how much is accelerated accretable yield that you saw.

Kevin Chapman

Yes, so, our reported margin was a 4.24% and on the acceleration of discount, credit discount due to pay-offs and pay-downs, that was 28 basis points for the quarter. We also had -- if you remember we had an overhang -- we had the excess liquidity in Q1 that weighed on margin in Q1. That liquidity started to roll out, but we still in Q2 had elevated levels of liquidity. And that pulled margin back about 9 basis points. So you net those two items together and you get back to that margin in that 3.99% to 4.02% range.

Catherine Mealor - KBW

And is it fair to say that you will continue to deploy that excess liquidity going into next quarter? So we should probably get some of that 9 bps back going into the third quarter, but the accretable yield is probably going to pull back from that 28 bps range. Is the reported margin still going to be coming down, but the core margins still has a little bit of upside?

Kevin Chapman

That's correct. If you look at the liquidity on a quarterly basis, it did impact margin. But if you look towards the end of the -- if you look at period end, for the most part that liquidity was off the balance sheet. And it’s hard to -- on the excess accretion, it’s hard to predict the pay-downs. For example in Q2 we had a large loan that we had concerns about credit deterioration. We received a pay-off in full on the second to last day of the quarter.

It’s just hard to predict those unexpected pay-offs. What I would say is I do expect us to continue to have unexpected pay-offs in the M&F portfolio. I just don’t think it’s going to be at the magnitude of 28 basis points per quarter. But it will -- we will continue to have unexpected pay-offs and we’ll accrete back additional levels of income through margin.

Catherine Mealor - KBW

Okay great. And then how about the loan pricing, the growth this quarter was just phenomenal. What are you seeing on the pricing side? Are you still able to hold your core loan yields relatively stable or are you seeing more pressure there given this amount of growth?

E. Robinson McGraw

I’ll let Mike Ross give a little color on Georgia and Alabama and Kevin if you want to just on the company as a whole?

Mike Ross

Catherine we’re seeing -- there is no doubt we are seeing intense pricing pressure out there in the marketplace. But if you look at what we’ve done as a Company, we’ve managed to grow the loans in the quarter. Our overall yields have come down a little bit. But we’ve also had a favorable variance in terms of more variable and less fixed than we had been having. So that's -- we feel like at this stage of the rate cycle that that's the right way to approach it. And as we’ve already talked about, we’re seeing the loan yields, even though that declined a little bit overall, we’re still growing margin.

Kevin Chapman

Yes. And Catherine, for the quarter on new and renewed total company, it came in right at that 4.50% level, which we’ve been holding for the last several quarters. And to Mike’s point, that 4.50% is supporting, what we think is very robust and strong loan growth. We could have stronger levels of loan growth if we gave on some of those pricing metrics. We just don’t feel the risk/reward is worth tying up capital in low levels of return. So that's why we’ve been sticking to those pricing metrics and making sure we stay in the mid 4s.

To Mike’s point, we are doing more variable rate loans, just the overall concern about interest rate risk. We’re cognizant of that. We are tying up money in long-term fixed assets. So we have made a conservative effort to do more variable rate loans. And if you look at our -- that weighted average rate of 4.50%, that consisted of a 60%-40% mix for the quarter, 60% fixed 40% variable. If we go back to previous quarters where we were maintaining a 4.50% or higher, that would have been more heavily weighted to fixed rate loans. So we’re seeing improved -- we’re seeing a stabilization of the new and renewed rates. And from an interest rate standpoint, more favorable mix of variable rate loans.

E. Robinson McGraw

And Catherine, one thing that we consider advantageous, if you’re saying there has been significant loan growth in Mississippi, most of our Mississippi loans are small business and consumer-oriented type credits that carry much higher rates than we see in some of our metropolitan markets. So that does impact even with the higher amount of variable rate loans that obviously are at lower rates, that Mississippi portfolio is able to bring up that average and keep us at that 4.50% level.

Operator

And our next question comes from David Bishop of Drexel Hamilton. Please go ahead sir.

David Bishop - Drexel Hamilton

Robin, maybe talk about -- obviously credit is bumping along very nicely here in terms of NPAs and card losses still remaining very manageable. But how about in terms of provisioning here? Obviously with the loan growth here, how should we think about provisioning relative to losses moving forward?

E. Robinson McGraw

David, over the first two quarters we basically offset charge-offs with provision. We actually saw -- we had at the end of the quarter we took a charge-off on a loan that actually paid off in the quarter, in the third quarter where we went ahead and took the charge-off on it, but we were able to claw back a very significant provision on this impaired credit which was a non-performing loan. So from that standpoint, our allowance is still extremely strong. Going forward, again we should be looking at covering charge-offs basically in loan growth with the provision.

Kevin Chapman

And Dave, also just to add on to that, our reported credit quality metrics are improving. They’re flat. They’re improving. But our watch list is improving at a much more dramatic pace. We have significant improvement on our watch list loans which is what’s driving the flat to improving reported non-performing loans in 90 days past due. We are at the point of some of our non-accrual loans where we’re finally able to work through the core system and we do expect to move off several non-performing loans, specifically non-accrual loans as a result of bringing some litigation -- ongoing litigation to an end. And you’ll see that for the remainder of the year.

In addition to that on our TDRs, one of the credits that was paid off was a non-performing loan and the other was a TDR of about a $1.3 million in that regard. And then if the payoff comes, that’s anticipated, there’s another large, probably I’ll -- in fact our largest TDR should in fact be paid off during the course of this quarter. So we could see TDRs in fact drop by about 25% over the course of the quarter, if things go as anticipated. We see -- actually looks are deceiving. I think we are seeing credit quality actually improving as opposed to deteriorating in that regard.

Operator

And our next question comes from Matt Olney of Stephens Incorporated. Please go ahead, sir.

Matt Olney - Stephens Incorporated

I want to circle back on the expense discussion, but I want to get your thoughts kind of longer term, and I’m curious what kind of opportunities you think you have to really slow expense growth the next several years and produce some positive operating leverage?

E. Robinson McGraw

Matt, again we’ve talked previously about our opportunities there. We still are right on track for our efficiency ratio to drop below the 60% level at the end of ‘15 if not before. We still have a lot of credit expense that we are seeing going away from the standpoint of both OREO and special assets. Kevin mentioned a while ago – we’ve had brought to fruition some litigation that we’ve had ongoing for quite some time on some of these problem credits that should be cleared up. Expenses associated with OREO should be dropping. We have more OREO under contract. We are seeing that drop this quarter. It will continue to drop.

Our loss-share -- obviously we’ll be seeing some decrease in loss-share expenses. It goes away in a year from this month, as a matter of fact. We are also continuing our efficiency initiatives. We have an efficiency task force that Jim Gray heads up for me, that we are keeping -- we’re looking at every contract that comes up for renewal. We have identified opportunities, we have people retiring and kind of downsizing in force, but we are seeing attrition and in taking advantage of that opportunities as they come up. So, yes, we still see some real opportunities for a decrease in expense. And as Kevin pointed out a while ago, we had some pretty good one-timers this particular quarter that we don’t see as recurring in future quarters.

Matt Olney - Stephens Incorporated

And then, as far as M&A, I think in the press release you noted that the TCE ratio is now at 7%; how are you thinking about M&A relative to your capital levels and what size are you targeting right now? And it seems from our point of view that M&A is getting more expensive. Could you talk more about your financial metrics and have those changed at all over the last few months?

E. Robinson McGraw

Really Matt, we are still holding at this stage to what our previously stated metrics are. I agree with you, we are seeing some pricing being paid. We think there are still opportunities out there. We still feel that, for the right deal, for $1 billion or less, we are okay from a capital standpoint. A larger transaction would result in a capital raise but feel like just in time capital would be available for us in that particular situation. And we are still looking at an under three-year payback as far as tangible book value. We are looking for immediate accretion as far as earnings go. And somewhere in the high teens low 20s and IRR on any transaction that we would in fact do. Obviously as we look at opportunities, we are seeing budgets being a little bit inflated today along that line. So we have to adjust accordingly. We’ll be disciplined in what we are doing in that regard. Kevin, you want to make any comments?

Kevin Chapman

Sure, and I’ll just briefly talk on about the M&A. Pricing has come up -- to set a timeframe, since the M&F transaction pricing has come up. And so what that has caused us to do is kind of reevaluate the opportunities that are available and ensuring that the quality of the earnings to the point Robin was making, the quality of the earnings and the stability and the sustainability of the earnings, of the seller support the price and that’s really where our biggest focus is and that’s where we -- that's where we are somewhat re-filtering the opportunities and making sure that the price supports the earnings lift that we get. In regards to the capital, one point I will make is we did get back to a 7% TCE this quarter. When we announced M&F, we knew we’d be spending some capital. The TCE ratio specifically dropped below 7% and we were comfortable with that because we felt we would grow up back in a year’s time frame. We’d beat that timeframe by a quarter. We actually grew it back in nine months.

If you look at our other capital ratios, we are just a couple of basis points away from a 9% leverage and even fewer basis points away from a 13% total capital. So the capital levels are rebuilding quickly, which we think will just allow us to support higher balance sheet, higher total assets of potential acquisitions without having to tap the capital markets to support the acquisition.

Operator

(Operator Instructions). And our next question comes from John Rodis of FIG Partners. Please go ahead sir.

John Rodis - FIG Partners

I guess most of questions were asked and answered. But maybe just couple I guess just thoughts maybe if you could give on I guess fee income line items. It looks like you saw a nice little increase in insurance and then the other non-interest income line item dropped a little bit linked quarter. Can you talk a little bit about those two items?

E. Robinson McGraw

Mitch, do you want to talk a little about insurance and then Jim talk a little bit about mortgage?

Mitch Waycaster

Yes, John with the merger with M&F, we actually doubled the size of our insurance company, actually more than double commissions given that M&F had a higher percentage of property and casualty commission. So the combined Company, it was a run rate of about 1.8, 1.9 and you can see this quarter, we’re up to 2 million. Our business has continued to grow, growing existing accounts, developing new business, bank integration with commercial RMs as playing a role that as well. Of course, we did improve contingency income as well with the merger and between the two companies we utilized many of the same insurance companies. So that increased volume and experience is helping to drive contingency income.

E. Robinson McGraw

Mitch, before Jim talks about mortgage, talk a little bit about wealth management and net increase in revenue.

Mitchell Waycaster

Yes. You will notice -- we’ve hit a run rate of 2 million to 2.1 million a quarter in revenue, that growth being driven again by adding new relationships, expanding existing relationships. Again integration throughout commercial and private banking is helping in that arena and we are seeing that growth across all lines, whether that be trust services, asset management, employee benefits and brokerage services and we expect to continue to see that growth throughout the footprint.

Jim Gray

John, before talking about mortgage, so your comment about the other income dropping in the second quarter, that was mostly attributable to contingency income from insurance, that all seasonally -- well it comes in, in the first quarter. So that was expected there.

On the mortgage front, Robin mentioned in some of this prepared comments that our volumes were up pretty significantly. Our gain on sale was up and our pipeline was up. We’re continuing to see that move forward into the third quarter as some of the recent hires that he also mentioned the team that we lifted out in the Birmingham, Montgomery area start to build a pretty good pipeline and actually starting to close some of those loans. We are also focused on improving our -- increasing and improving our retail origination teams and particularly in the Jackson market, the Atlanta market, the Huntsville market and also possibly some other markets within our footprint where we might have a banking presence. Also on the wholesale side, we have hired some wholesale reps that are starting to build some good increases in clientele and that’s primarily focusing our foresight footprint as well as some of the contiguous states.

John Rodis - FIG Partners

Okay. So the other line -- the other income line item -- so it’s about 1.05 million, is that sort of absent to contingent income, I guess is that sort of good level going forward?

Jim Gray

Yes.

John Rodis - FIG Partners

Okay. And then just one other question Kevin I guess on the tax rate. It dipped a little bit in the second quarter. Is sort of that 29% to 29.5% level still a good run rate going forward?

Stuart Johnson

John, this is Stuart. We made an adjustment to true-up some tax accruals in the second quarter. First quarter we were running a little over 30% indicated tax rate and of course we dropped below that in the second quarter due to some tax adjustments. Expect third quarter to resume to about the 30% range.

Operator

This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks.

E. Robinson McGraw

Thank you Betty. We certainly appreciate everyone’s time and interest in Renasant Corporation and we look forward to speaking with you again in the near future. Goodbye everyone.

Operator

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect your lines.

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Source: Renasant's (RNST) CEO Robinson McGraw on Q2 2014 Results - Earnings Call Transcript

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