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Mergers and Acquisitions | 6 Months Ended
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Jun. 30, 2018
Business Combinations [Abstract] |
Mergers and Acquisitions | Mergers and Acquisitions (In Thousands, Except Share Data) Merger with Brand Group Holdings, Inc. On March 28, 2018, the Company and Brand Group Holdings, Inc. (“Brand”), the parent company of The Brand Banking Company (“Brand Bank”), jointly announced the signing of a definitive merger agreement pursuant to which the Company will acquire Brand. Under the terms of the agreement, Brand will merge with and into Renasant, with Renasant continuing as the surviving corporation. Immediately after the merger of Brand with and into Renasant, Brand Bank will merge with and into Renasant Bank, with Renasant Bank continuing as the surviving banking corporation in the merger. Under the terms of the merger agreement, the merger consideration to be received by Brand shareholders and the amount to be paid to cash out in-the-money Brand stock options is contingent (and subject to reduction only) upon Brand's divestiture of certain assets, as outlined in the definitive merger agreement filed with the Securities and Exchange Commission on March 30, 2018. Although the deadline for fixing the merger consideration and the option cash-out amount has not yet occurred, as of July 20, 2018 Brand had already divested all of the assets impacting the merger consideration and the option cash-out amount. Accordingly, the Company does not anticipate any further adjustments to the merger consideration and the option cash-out amount. After adjusting the merger consideration and the option cash-out amount to reflect Brand’s divestiture of these assets, each Brand shareholder will have the right to receive 31.72 shares of Renasant common stock and $74.57 in cash for each share of Brand common stock. Additionally, all in-the-money Brand stock options will be cashed out at an amount equal to the excess of $1,519 per share over the exercise price of such option (underwater options will be cancelled). As of June 30, 2018, Brand, which has 13 locations throughout the greater Atlanta market, had approximately $2,240,000 in total assets, which included approximately $1,730,000 in total loans (excluding mortgage loans held for sale), and approximately $1,800,000 in total deposits. The acquisition is expected to close in the third quarter of 2018 and is subject customary conditions set forth in the merger agreement. Brand shareholders approved the merger on July 26, 2018 and all required regulatory approvals have been received. Acquisition of Metropolitan BancGroup, Inc. Effective July 1, 2017, the Company completed its acquisition of 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, net of taxes |  | 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, net of Metropolitan’s allowance for loan losses | (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 on that date in connection with the merger with Metropolitan.
Cash and cash equivalents |  | $ | 47,556 |
Securities |  | 108,697 |
Loans, including mortgage loans held for sale, net of unearned income |  | 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 |
The following unaudited pro forma combined condensed consolidated financial information presents the results of operations for the six months ended June 30, 2018 and 2017 of the Company as though the Metropolitan merger had been completed as of January 1, 2016. The unaudited pro forma information combines the historical results of 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 acquisition taken place on January 1, 2016. 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.
| (Unaudited)
| Six Months Ended
| June 30,
| 2018 |  | 2017
Net interest income - pro forma | $ | 181,629 |  |  | $ | 173,508 |
Net income - pro forma | $ | 70,536 |  |  | $ | 46,912 |
Earnings per share - pro forma: |  |  |
Basic | $ | 1.43 |  |  | $ | 1.00 |
Diluted | $ | 1.42 |  |  | $ | 1.00 |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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