Mergers and Acquisitions

(Dollar amounts in thousands)

Acquisition of Brand Group Holdings, Inc.

Effective September 1, 2018, the Company completed its acquisition by merger of Brand Group Holdings, Inc. (“Brand”), the parent company of The Brand Banking Company (“Brand Bank”), in a transaction valued at approximately $474,453. The Company issued 9,306,477 shares of common stock and paid approximately $21,879 to Brand shareholders, excluding cash paid for fractional shares, and paid approximately $17,157, net of tax benefit, to Brand stock option holders for 100% of the voting equity interest in Brand. At closing, Brand merged with and into the Company, with the Company the surviving corporation in the merger; immediately thereafter, Brand Bank merged with and into Renasant Bank, with Renasant Bank the surviving banking corporation in the merger. On September 1, 2018, Brand operated thirteen banking locations throughout the greater Atlanta market.

The Company recorded approximately $349,416 in intangible assets which consist of goodwill of $321,882 and a core deposit intangible of $27,534. Goodwill resulted from a combination of revenue enhancements from expansion in existing markets and efficiencies resulting from operational synergies. The fair value of the core deposit intangible is being amortized over the estimated useful life, currently expected to be approximately 10 years. The goodwill is not deductible for income tax purposes. The following table summarizes the allocation of purchase price to assets and liabilities acquired in connection with the Company’s acquisition of Brand based on their fair values on September 1, 2018.



Purchase Price:
Shares issued to common shareholders	9,306,477
Purchase price per share	$	46.69
Value of stock paid				$	434,519
Cash consideration paid				21,879
Cash paid for fractional shares				4
Cash settlement for stock options, net of tax benefit				17,157
Deal charges paid on behalf of Brand				894
Total Purchase Price				$	474,453
Net Assets Acquired:
Stockholders’ equity at acquisition date	$	138,896
Increase (decrease) to net assets as a result of fair value adjustments to assets acquired and liabilities assumed:
Securities	(231		)
Loans, including loans held for sale	(20,926		)
Premises and equipment	910
Intangible assets	27,534
Other assets	(3,304		)
Deposits	(1,367		)
Borrowings	(3,236		)
Other liabilities	13,338
Deferred income taxes	957
Total Net Assets Acquired				152,571
Goodwill resulting from merger⁽¹⁾				$	321,882

(1) The goodwill resulting from the merger has been assigned to the Community Banks operating segment.

The following table summarizes the estimated fair value on September 1, 2018 of assets acquired and liabilities assumed on that

date in connection with the merger with Brand. These estimates are subject to change pending the finalization of all valuations.



Cash and cash equivalents	$	193,436
Securities	71,246
Loans, including loans held for sale	1,589,254
Premises and equipment	20,070
Intangible assets	349,416
Other assets	112,050
Total assets	2,335,472

Deposits	1,714,177
Borrowings	90,912
Other liabilities	55,930
Total liabilities	1,861,019

As part of the merger agreement, Brand agreed to divest the operations of its subsidiary Brand Mortgage Group, LLC (“BMG”), which transaction was completed as of October 31, 2018. As a result, the balance sheet and results of operations of BMG, which the Company considers to be immaterial to the overall results of the Company, were included in the Company’s balance sheet and consolidated results of operations from September 1, 2018 to October 31, 2018. The following table summarizes the significant assets acquired and liabilities assumed from BMG:



(in thousands)		September 1, 2018
Loans held for sale		48,100
Borrowings		34,139

The following table summarizes the results of operations for BMG included in the Company’s Consolidated Statements of

Income for the twelve months ended December 31, 2018:



(in thousands)
Interest income	$	357
Interest expense	279
Net interest income	78
Noninterest income	4,043
Noninterest expense	4,398
Net income before taxes	$	(277	)

Acquisition of Metropolitan BancGroup, Inc.

Effective July 1, 2017, the Company completed its acquisition of Metropolitan BancGroup, Inc. (“Metropolitan”), the parent company of Metropolitan Bank, in a transaction valued at approximately $219,461. The Company issued 4,883,182 shares of common stock and paid approximately $4,764 to Metropolitan stock option holders for 100% of the voting equity interest in Metropolitan. At closing, Metropolitan merged with and into the Company, with the Company the surviving corporation in the merger; immediately thereafter, Metropolitan Bank merged with and into Renasant Bank, with Renasant Bank the surviving banking corporation in the merger. On July 1, 2017, Metropolitan operated eight banking locations in Nashville and Memphis, Tennessee and the Jackson, Mississippi Metropolitan Statistical Area.

The Company recorded approximately $147,478 in intangible assets which consist of goodwill of $140,512 and a core deposit intangible of $6,966. Goodwill resulted from a combination of revenue enhancements from expansion in existing markets and efficiencies resulting from operational synergies. The fair value of the core deposit intangible is being amortized on an accelerated basis over the estimated useful life, currently expected to be approximately 10 years. The goodwill is not deductible for income tax purposes.

The following table summarizes the allocation of purchase price to assets and liabilities acquired in connection with the Company’s acquisition of Metropolitan based on their fair values on July 1, 2017.



Purchase Price:
Shares issued to common shareholders	4,883,182
Purchase price per share	$	43.74
Value of stock paid				$	213,590
Cash paid for fractional shares				5
Cash settlement for stock options				4,764
Deal charges paid on behalf of Metropolitan				1,102
Total Purchase Price				$	219,461
Net Assets Acquired:
Stockholders’ equity at acquisition date	$	89,253
Increase (decrease) to net assets as a result of fair value adjustments to assets acquired and liabilities assumed:
Securities	(731		)
Mortgage loans held for sale	30
Loans	(13,071		)
Premises and equipment	(4,629		)
Intangible assets, net of Metropolitan’s existing intangibles	2,340
Other real estate owned	(1,251		)
Other assets	2,731
Deposits	(3,603		)
Borrowings	(1,294		)
Other liabilities	3,930
Deferred income taxes	5,244
Total Net Assets Acquired				78,949
Goodwill resulting from merger⁽¹⁾				$	140,512

(1) The goodwill resulting from the merger has been assigned to the Community Banks operating segment.

The following table summarizes the fair value on July 1, 2017 of assets acquired and liabilities assumed at acquisition date in connection with the merger with Metropolitan.



Cash and cash equivalents	$	47,556
Securities	108,697
Loans, including mortgage loans held for sale	967,804
Premises and equipment	8,576
Other real estate owned	1,203
Intangible assets	147,478
Other assets	69,567
Total assets	1,350,881

Deposits	942,084
Borrowings	174,522
Other liabilities	20,685
Total liabilities	1,137,291

Supplemental Pro Forma Combined Condensed Results of Operations

The following unaudited pro forma combined condensed consolidated financial information presents the results of operations for the twelve months ended December 31, 2018 and 2017 of the Company as though the Brand and Metropolitan mergers had been completed as of January 1, 2017. The unaudited estimated pro forma information combines the historical results of Brand and Metropolitan with the Company’s historical consolidated results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments for the periods presented. The pro forma information is not necessarily indicative of what would have occurred had the acquisitions taken place on January 1, 2017. The pro forma information does not include the effect of any cost-saving or revenue-enhancing strategies. Merger expenses are reflected in the period in which they were incurred.



	Twelve Months Ended
	December 31,
	2018		2017
Net interest income - pro forma (unaudited)	$	455,513	$	450,353

Noninterest income - pro forma (unaudited)	$	153,850	$	176,699

Noninterest expense - pro forma (unaudited)	$	452,699	$	422,700

Net income - pro forma (unaudited)	$	115,646	$	105,729

Earnings per share - pro forma (unaudited):
Basic	$	1.97	$	1.80
Diluted	$	1.97	$	1.80

Due to the timing of the respective system conversions and the integration of operations into the Company's existing operations, historical reporting for acquired operations is impracticable, and, therefore, disclosure of the amounts of revenue and expenses of the acquired institutions since the acquisition dates is impracticable.