2024
Annual Report
During 2024, Renasant Corporation remained
as resilient and strong as ever. We maintained
our focus on organic growth, disciplined pricing
on both sides of the balance sheet and steady
credit performance, despite the challenges
posed
by
vigorous
competition
for
core
deposits, expanding regulatory expectations
and declining interest rates. This approach
not only enabled Renasant to navigate through
these and other obstacles, but also positioned us
to achieve sustainable growth and capitalize on
strategic opportunities.
Guided by the principles that have shaped our
120-year legacy, we remain steadfast in our
vision: to be the financial services advisor and
provider of choice in each community we serve.
Our mission continues to be supported by four
core pillars: prioritizing employee well-being,
offering client-centric solutions, fostering deep
community engagement, and generating lasting
value for our shareholders.
Corporate Culture
At the heart of Renasant is a recognition that our
employees are our greatest asset. In recent years,
we’ve taken significant steps to invest in their well-
being, including raising our minimum wage, offering
paid parental leave for the birth, adoption, or foster
care placement of a child, and introducing flexible
work options. In 2024, we continued to act on our
commitment to our employees by adding Ember,
our employee-focused banking program offering
discounted services and products. We will continue
to invest in employee training, development and
flexible staffing models to foster a positive work
environment and an enhanced client experience.
In
addition,
our
commitment
to
corporate
citizenship remains a call to action at Renasant.
Through our Renasant Roots program, we have
supported community development and small
business growth. In 2024, we expanded our
philanthropic efforts, engaged in more volunteer
opportunities, and forged strategic partnerships to
uplift underserved communities. We contributed
more than 1,962 activities and 6,938 service hours
in 2024, and we continue to invest in meaningful
ways to give back to our communities.
Financial Results
Our financial performance in 2024 demonstrates
our ability to deliver solid financial performance
in a challenging environment. For 2024, total
loans and deposits grew 4.32% and 3.52% year-
over-year, respectively. Our mortgage banking
income grew 12.23% from 2023 to 2024, and our
mortgage division was recognized as one of the
top 20 mortgage loan producing teams by retail
mortgage volume in the United States according
to National Mortgage News.
We achieved diluted earnings per share of $3.27,
a return on average assets of 1.11%, and a return
on average equity of 7.92%. Net income for the
year was $195.5 million. Throughout 2024, we
continued to reward our shareholders with
a quarterly dividend of $0.22 per share. Our
detailed 2024 financial performance is available
in our Annual Report on Form 10-K for the year
ended December 31, 2024, which follows this
letter.
Merger With The First
In July 2024, we announced our transformative
merger with The First Bancshares, Inc. (The
First), the parent company of The First Bank, in
an all-stock transaction valued at approximately
$1.2 billion.
Headquartered in Hattiesburg, Mississippi, The
First operates 111 branches across Mississippi,
Louisiana, Alabama, Florida and Georgia. As of
December 31, 2024, The First had approximately
$8.0 billion in total assets, $5.4 billion in total
loans and $6.6 billion in total deposits. The
merger will create a six-state Southeastern
banking franchise with approximately $25
billion in total assets, $18 billion in total loans
and $21 billion in total deposits.
Both companies, each with a footprint across
the Southeast, are dedicated to providing best-
in-class customer service and are committed
to the communities they serve. The First’s
locations are in some of the most dynamic,
fastest growing markets in the Southeast. This
Dear Respected Shareholder
1
combination accelerates our profitability growth,
enhances our operating efficiency and provides
the additional scale needed to compete in today’s
operating environment. The merger has been
approved by each company’s board of directors
and shareholders and is expected to close in the
first half of 2025.
Public Stock Offering
At the same time we announced our merger with
The First, we completed a public stock offering
of approximately 7.2 million shares of common
stock at a price of $32.00 per share. The offering
generated net proceeds of approximately $217.0
million, which we intend to use for general
corporate purposes to support our continued
growth, including investments in Renasant and
future strategic acquisitions.
Sale Of Insurance Agency
Earlier in July, prior to announcing our merger
with The First and the stock offering, we
completed the sale of our insurance agency,
Renasant Insurance, to a large regional insurance
provider. The transaction provided an attractive
financial return to Renasant while also, in our
view, creating a great opportunity for both our
customers and employees to build on the legacy
of Renasant Insurance.
Leadership Transition
At our 2024 Annual Shareholders Meeting, the
Board of Directors of Renasant Corporation
implemented the next step of our company’s
management succession plan, designating Kevin
D. Chapman to become Chief Executive Officer
of Renasant effective May 1, 2025. Chapman will
retain his current title and duties of President.
Chapman
has
been
President
and
Chief
Operating Officer for the Company since May
2023. From October 2011 until he assumed the
Chief Operating Officer role, he was the Chief
Financial Officer for Renasant. Prior to that,
Chapman served in various capacities since
joining the Bank in 2005, including the Chief
Strategy Officer and Chief Accounting Officer.
Chapman has also been a director of the Bank
since 2018 and has been nominated for election
as a director of Renasant at its 2025 Annual
Meeting of Shareholders.
“On behalf of the Board of Directors, our employees
and
our
shareholders,
and
following
our
Company’s succession plan, we are proud to name
Kevin Chapman as the next CEO of Renasant,” said
Robin McGraw, Executive Chairman, and Mitchell
Waycaster, Chief Executive Officer and Executive
Vice Chairman. “He is a dynamic leader with a
keen understanding of both corporate banking
strategy and the financial services marketplace.
We believe Renasant will be in great hands with
Kevin guiding the Company, and we look forward
to a bright future under his leadership.”
Moving Forward
As we move forward into 2025, our commitment
to putting customers first remains unwavering. We
are focused on continued growth and expanding
our diverse banking businesses, while remaining
vigilant in our underwriting processes and
attentiveness to emerging risks.
With technological innovation at the forefront
of our strategy, we will continue to invest in
solutions that enhance our customer experience.
In addition, we will remain opportunistic about
acquiring banking talent and partnering with
fintech providers, ensuring we are fully equipped
to meet the evolving needs of our customers.
In conclusion, we express our heartfelt appreciation
to our extraordinary employees for their tireless
efforts and commitment over the past year. Their
dedication to our customers and communities
is the cornerstone of our success. The future of
Renasant is bright, full of exciting opportunities.
Our relentless pursuit of exceptional service,
substantial investments in our products and
services, and unwavering commitment to our
markets and communities will define our journey
forward. We are deeply grateful for your continued
support and trust in us as a Renasant shareholder.
E. Robinson McGraw
Executive Chairman
C. Mitchell Waycaster
Chief Executive Officer &
Executive Vice Chairman
Kevin D. Chapman
President & Chief Operating Officer
2
Gary D. Butler, Ph,D.
Chairman &
Chief Executive Officer
Camgian Corp.
Starkville, Mississippi
Kevin D. Chapman*
President & Chief Operating Officer
Renasant Corporation
& Renasant Bank
Tupelo, Mississippi
Donald Clark, Jr.
Senior Counsel
Butler Snow, LLP
Ridgeland, Mississippi
John M. Creekmore
Retired
Consultant & Former
General Counsel
United Furniture Industries, Inc.
Verona, Mississippi
Albert J. Dale, III
Chairman
Dale, Inc.
Nashville, Tennessee
Jill V. Deer
Executive Vice President
Brasfield & Gorrie, LLC
Birmingham, Alabama
0. Leonard Dorminey*
Retired Former President,
Eastern Region
Renasant Bank
Albany, Georgia
Connie L. Engel
Principal
Strada Senior Living Development & Brokerage
Atlanta, Georgia
Rose J. Flenorl
Manager of Global Citizenship
FedEx Corporation
Memphis, Tennessee
John T. (Tom) Foy
Retired
Former President & Chief Operating Officer
Furniture Brands International, Inc.
Tupelo, Mississippi
Richard L. Heyer, Jr., M.D.
Retired
Former Physician
Tupelo Anesthesia Group, P.A..
Tupelo, Mississippi
Neal A. Holland. Jr.
Chairman & CEO
Alliance Sand & Aggregates, LLC
President & CEO
Holland Company, Inc.
Decatur, Alabama
E. Robinson McGraw
Executive Chairman
Renasant Corporation & Renasant Bank
Tupelo, Mississippi
Sean M. Suggs
President
Toyota Battery Manufacturing
Greensboro, North Carolina
C. Mitchell Waycaster
Chief Executive Officer & Executive Vice Chairman
Renasant Corporation &
Renasant Bank
Tupelo, Mississippi
Renasant
Corporation
& Renasant
Bank Board of
Directors
Renasant Corporation
Renasant Bank
209 Troy Street
Tupelo, MS 38804-4827
Telephone: (800) 680-1601
www.renasant.com
www.renasantbank.com
Annual Meeting
Renasant Corporation’s Annual Meeting of
Shareholders will be
held at 1:30 p.m., CDT, Tuesday, April 22, 2025
at Corporate Headquarters
209 Troy Street, Tupelo, Mississippi 38804
Financial Information
Analysts and investors seeking financial
Information about Renasant Corporation may
contact Jim Mabry, Renasant Chief Financial Officer.
Stock Transfer Agent
Broadridge Corporate
Issuer Solutions
P.O. Box 1342
Brentwood, New York, 11717
Stock Listing
Renasant Corporation’s common stock is
traded on the New York Stock Exchange under the
symbol RNST.
Independent Auditors
Horne LLP
1020 Highland Colony Pkwy.
Suite 400
Ridgeland, MS 39157
Financial Publications
Additional copies of Renasant’s Annual Report,
Form 10-K and other corporate publications are
available on request through www.prars.com
or investors.renasant.com, or by contacting
John Oxford, Renasant Chief Marketing Officer.
*Renasant Bank board only
3
20
24
Diluted Earnings
per Share
2021
2020
Net Income
in Thousands
2022
2021
2020
2022
2021
2020
2022
2021
2020
2022
2021
2020
2022
$83,651
$3.12
$1.48
Dividends
per Share
$0.88
$0.88
Assets
in Millions
Return
on Tangible Equity (non-GAAP*)
14.53%
7.83%
$14,930
$16,810
$16,988
$2.95
$166,068
$175,892
2023
2023
$2.56
$144,678
$0.88
2023
$0.88
13.97%
2023
2023
$17,361
12.29%
2024
2024
$175,892
$3.27
$195,457
2024
$0.88
2024
2024
$18,035
13.63%
Please refer to "Non-GAAP Financial Measures" in the attached Annual Report on Form 10-K for a reconciliation of Return on
Tangible Equity to Return on Average Equity in Item 7, Management's Discussion and Analysis of Financial Condition and
Results of Operations.
*
Year At A Glance
The charts below highlight our financial results for the previous five years. For an analysis of our
results for 2024 and a discussion of the one-time or unusual transactions impacting our results
during the year, please refer to the attached Annual Report on Form 10-K, including Item 7,
Management's Discussion and Analysis of Financial Condition and Results of Operations.
4
2021
2020
2022
2021
2020
2022
2021
2020
2022
2021
2020
2022
2021
2020
2022
2021
2020
2022
Non-Interest Income
in Thousands
Net Interest Income
in Thousands
$426,797
$424,001
$235,532
$226,984
Deposits
in Millions
Loans
in Millions
$10,934
$10,021
$12,059
$13,906
Net Charge-Offs
to Average Loans
Book Value
per Share
$37.95
$39.63
0.10%
$481,298
$149,253
$11,578
$13,487
$38.18
0.09%
2023
2023
2023
2023
2023
2023
$519,327
$113,075
$12,351
$14,077
$40.92
0.06%
2024
2024
2024
2024
2024
2024
$512,196
$203,660
$12,885
$14,573
$42.13
0.05%
0.04%
Financial
Highlights
20
24
5
FORWARD-LOOKING STATEMENTS
This summary annual report may contain forward-looking statements regarding Renasant Corporation as defined by the federal securities
laws. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “estimates,”
“plans,” “may increase,” “may fluctuate,” “will likely result,” and similar expressions, or future or conditional verbs such as “will,” “should,”
“would,” and “could,” are generally forward-looking in nature and not historical facts. All forward-looking statements involve risk and
uncertainty, and actual results could differ from the anticipated results or other expectations expressed in the forward-looking statements,
and such differences could be material. A discussion of factors that could cause actual results to differ materially from those expressed in
the forward-looking statements is included in Renasant Corporation’s filings with the United States Securities and Exchange Commission.
Renasant Corporation expressly disclaims any obligation to update any forward-looking statements, all of which are expressly qualified by
the statements above.
6
Form 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________________to _______________________
Commission file number 001-13253
RENASANT CORPORATION
(Exact name of registrant as specified in its charter)
Mississippi
64-0676974
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
209 Troy Street, Tupelo, Mississippi
38804-4827
(Address of principal executive offices)
(Zip Code)
(662) 680-1001
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common stock, $5.00 par value per share
RNST
The New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
☑
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report.
☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
As of June 28, 2024, the aggregate market value of the registrant’s common stock, par value $5.00 per share, held by non-affiliates of the
registrant, computed by reference to the last sale price as reported on The New York Stock Exchange for such date, was $1,675,664,047.
As of February 18, 2025, 63,657,444 shares of the registrant’s common stock, par value $5.00 per share, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the 2025 Annual Meeting of Shareholders of Renasant Corporation are incorporated by reference into Part
III of this Form 10-K.
Renasant Corporation and Subsidiaries
Form 10-K
For the Year Ended December 31, 2024
CONTENTS
PART I
Page
Item 1.
Business
2
Item 1A. Risk Factors
15
Item 1B. Unresolved Staff Comments
28
Item 1C. Cybersecurity
28
Item 2.
Properties
32
Item 3.
Legal Proceedings
32
Item 4.
Mine Safety Disclosures
32
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
33
Item 6.
[Reserved]
34
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
35
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
62
Item 8.
Financial Statements and Supplementary Data
63
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
135
Item 9A. Controls and Procedures
135
Item 9B. Other Information
135
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
135
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
135
Item 11.
Executive Compensation
136
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
136
Item 13.
Certain Relationships and Related Transactions, and Director Independence
137
Item 14.
Principal Accountant Fees and Services
137
PART IV
Item 15.
Exhibits and Financial Statement Schedules
138
Item 16.
Form 10-K Summary
142
SIGNATURES
S-1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K may contain or incorporate by reference statements regarding Renasant Corporation
(referred to herein as the “Company”, “we”, “our”, or “us”) that constitute “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “projects,” “anticipates,”
“intends,” “estimates,” “plans,” “potential,” “focus,” “possible,” “may increase,” “may fluctuate,” “will likely result,” and
similar expressions, or future or conditional verbs such as “will,” “should,” “would” and “could,” are generally forward-looking
in nature and not historical facts. Forward-looking statements include information about the Company’s future financial
performance, business strategy, projected plans and objectives and are based on the current beliefs and expectations of
management. The Company’s management believes these forward-looking statements are reasonable, but they are all inherently
subject to significant business, economic and competitive risks and uncertainties, many of which are beyond the Company’s
control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and
decisions that are subject to change. Actual results may differ from those indicated or implied in the forward-looking
statements, and such differences may be material. Prospective investors are cautioned that any such forward-looking statements
are not guarantees of future performance and involve risks and uncertainties and, accordingly, investors should not place undue
reliance on these forward-looking statements, which speak only as of the date they are made.
Important factors currently known to management that could cause our actual results to differ materially from those in forward-
looking statements include the following:
•
the Company’s ability to efficiently integrate acquisitions (including its pending acquisition of The First Bancshares,
Inc.) into its operations, retain the customers of these businesses, grow the acquired operations and realize the cost
savings expected from an acquisition to the extent and in the timeframe anticipated by management (including the
possibility that such cost savings will not be realized when expected, or at all, as a result of the impact of, or challenges
arising from, the integration of the acquired assets and assumed liabilities into the Company, potential adverse
reactions or changes to business or employee relationships, or as a result of other unexpected factors or events);
•
potential exposure to unknown or contingent risks and liabilities we have acquired, or may acquire, or target for
acquisition, including in connection with the proposed merger with The First Bancshares, Inc.;
•
the effect of economic conditions and interest rates on a national, regional or international basis;
•
timing and success of the implementation of changes in operations to achieve enhanced earnings or effect cost savings;
•
competitive pressures in the consumer finance, commercial finance, financial services, asset management, retail
banking, factoring, mortgage lending and auto lending industries;
•
the financial resources of, and products available from, competitors;
•
changes in laws and regulations as well as changes in accounting standards;
•
changes in policy by regulatory agencies or increased scrutiny by, and/or additional regulatory requirements of,
regulatory agencies as a result of our proposed merger with The First Bancshares, Inc.;
•
changes in the securities and foreign exchange markets;
•
the Company’s potential growth, including its entrance or expansion into new markets, and the need for sufficient
capital to support that growth;
•
changes in the quality or composition of the Company’s loan or investment portfolios, including adverse developments
in borrower industries or in the repayment ability of individual borrowers or issuers of investment securities, or the
impact of interest rates on the value of our investment securities portfolio;
•
an insufficient allowance for credit losses as a result of inaccurate assumptions;
•
changes in the sources and costs of the capital we use to make loans and otherwise fund our operations due to deposit
outflows, changes in the mix of deposits and the cost and availability of borrowings;
•
general economic, market or business conditions, including the impact of inflation;
•
changes in demand for loan and deposit products and other financial services;
1
•
concentrations of deposit or credit exposure;
•
changes or the lack of changes in interest rates, yield curves and interest rate spread relationships;
•
losses resulting from fraudulent activity, including loan and deposit fraud and social engineering attacks targeting our
customers, employees and third party vendors;
•
increased cybersecurity risk, including potential network breaches, business disruptions or financial losses, including
as a result of sophisticated attacks using artificial intelligence and similar tools;
•
civil unrest, natural disasters, epidemics and other catastrophic events;
•
geopolitical conditions, including acts or threats of terrorism, and actions taken by the United States or other
governments in response to acts or threats of terrorism and/or military conflicts, which could impact business and
economic conditions in the United States and abroad;
•
the impact, extent and timing of technological changes. including the rapid development of artificial intelligence; and
•
other circumstances, many of which are beyond management’s control.
Management believes that the assumptions underlying the Company’s forward-looking statements are reasonable, but any of
the assumptions could prove to be inaccurate. Investors are urged to carefully consider the risks described elsewhere in this
report and in the Company’s other filings with the Securities and Exchange Commission (the “SEC”) from time to time,
including its Quarterly Reports on Form 10-Q, which are available at www.renasant.com and the SEC’s website at
www.sec.gov.
The Company undertakes no obligation, and specifically disclaims any obligation, to update or revise forward-looking
statements, whether as a result of new information or to reflect changed assumptions, the occurrence of unanticipated events or
changes to future operating results over time, except as required by federal securities laws.
The information set forth in this Annual Report on Form 10-K is as of February 25, 2025 unless otherwise indicated herein.
PART I
ITEM 1. BUSINESS
General
Renasant Corporation, a Mississippi corporation incorporated in 1982, owns and operates Renasant Bank, a Mississippi banking
corporation with operations throughout the Southeast as well as offering factoring and asset-based lending on a nationwide
basis. Renasant Bank, in turn, owns and operates Park Place Capital Corporation, a Tennessee corporation with operations
across our footprint, and Continental Republic Capital, LLC (doing business as “Republic Business Credit”), a Louisiana
limited liability company with nationwide operations. Renasant Bank also owns Renasant Insurance, Inc., a Mississippi
corporation, which was engaged in the insurance agency business until Renasant Bank’s sale of substantially all of the assets of
Renasant Insurance, Inc. on July 1, 2024. More information about this transaction can be found in Item 7, Management’s
Discussion and Analysis of Financial Condition and Results of Operations. In this Annual Report, Renasant Bank is sometimes
referred to as the “Bank,” while Park Place Capital Corporation is referred to as “Park Place Capital,” and Continental Republic
Capital, LLC is referred to as “Republic Business Credit.”
Our vision is to be the financial services advisor and provider of choice in each community we serve. With this vision in mind,
management has organized the branch banks into community banks using a franchise concept. The franchise approach
empowers community bank presidents to execute their own business plans in order to achieve our vision. Specific performance
measurement tools are available to assist these presidents in determining the success of their plan implementation. A few of the
ratios used in measuring the success of their business plan include:
— return on average assets
— net interest margin and spread
— the efficiency ratio
— fee income shown as a percentage of loans and deposits
— loan and deposit growth
— the volume and cost of deposits
— net charge-offs to average loans
— the percentage of loans past due and nonaccruing
2
While we have preserved decision-making at a local level, we have centralized our legal, accounting, investment, risk
management, loan review, human resources, audit and data processing/operations functions. The centralization of these
functions enables us to maintain consistent quality and achieve certain economies of scale.
Our vision is further validated through our core values which include: (1) employees are our greatest assets, (2) quality is not
negotiable and (3) clients’ trust is foremost. Our strategic plan is centered on these values; the plan focuses on attracting high
quality deposits, generating organic loan growth and increasing our noninterest income, improving our operating efficiency and
enhancing our technological capabilities, remaining opportunistic, and achieving financial performance targets, both on an
absolute basis and relative to our peer institutions. We believe that the successful implementation of our strategic plan will
promote the satisfaction and development of our employees, clients and shareholders.
Members of our Board of Directors also serve as members of the Board of Directors of the Bank (which has a broader
membership than the Company board). Responsibility for the management of the Bank remains with the Board of Directors and
officers of the Bank; however, management services rendered by the Company to the Bank are intended to supplement internal
management and expand the scope of banking services normally offered by the Bank.
Proposed Merger with The First Bancshares, Inc.
On July 29, 2024, the Company and The First Bancshares, Inc., a Mississippi corporation (“The First”), entered into an
agreement and plan of merger, dated as of July 29, 2024, pursuant to which, subject to the terms and conditions set forth
therein, among other things, The First will merge with and into the Company, with the Company as the surviving entity in such
merger, and immediately thereafter The First’s subsidiary bank and the Bank will enter into a subsidiary plan of merger,
pursuant to which The First’s subsidiary bank will merge with and into the Bank, with the Bank as the surviving entity in such
merger. Subject to the terms and conditions of the merger agreement, at the effective time of the merger, each outstanding share
of common stock of The First will be converted into the right to receive one share of common stock of the Company.
The shareholders of the Company and The First approved the merger at special meetings held on October 22, 2024. The
transaction is expected to close in the first half of 2025 and is subject to certain closing conditions, including the receipt of
required regulatory approvals.
Operations
In the first half of 2024, the Company had three reportable segments: a Community Banks segment, an Insurance segment and
a Wealth Management segment. The Company no longer has an Insurance segment as a result of the sale of the Company’s
insurance agency business in July 2024. We do not have any foreign operations.
Operations of Community Banks
Substantially all of our business activities are conducted through, and substantially all of our assets and revenues are derived
from, the operations of our community banks, which offer a complete range of banking and financial services to individuals and
to businesses of all sizes. As described in more detail below, these services include business and personal loans, interim
construction loans, specialty commercial lending, factoring and asset-based lending, treasury management services and
checking and savings accounts, as well as safe deposit boxes and night depository facilities. Automated teller machines are
located throughout our market area, and we have interactive teller machines in many of our urban markets. Our Online and
Mobile Banking products and our call center also provide 24-hour banking services.
As of December 31, 2024, we had 180 banking, lending and mortgage offices located throughout our markets in the Southeast,
while our subsidiary Republic Business Credit had four stand-alone offices in California, Illinois, Louisiana and Texas.
Customers may also conduct many banking transactions, such as opening deposit accounts and applying for certain types of
loans, through our Online and Mobile Banking Products.
Lending Activities. Income generated by our lending activities, in the form of interest income, loan-related fees, and income
from the sale and servicing of mortgage loans, comprises a substantial portion of our revenue, accounting for approximately
77.7%, 82.8% and 75.1% of our total gross revenues in 2024, 2023 and 2022, respectively. (Total gross revenues consist of
interest income on a fully taxable equivalent basis and noninterest income.) Our lending philosophy is to minimize credit losses
by following strict credit approval standards, diversifying our loan portfolio by both type, size and geography and conducting
ongoing review and management of the loan portfolio. Loans are originated through either our commercial lending groups
(which includes the operations of Republic Business Credit) or personal bankers, depending on the relationship and type of
service or product desired. Our commercial lending group provides banking services to corporations or other business
customers and originates loans for general corporate purposes, such as financing for commercial and industrial projects or
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income producing commercial real estate. Also included in our commercial lending group are experienced lenders within our
specialty lines of business, which consist of our asset-based lending, Small Business Administration lending, healthcare,
factoring, and equipment lease financing banking groups. Our personal banking group provides small consumer installment
loans, residential real estate loans, lines of credit and construction financing and originates conventional first and second
mortgages.
The following is a general description of each of the principal types of loans in our loan portfolio, the relative credit risk of each
type of loan and the steps we take to reduce such risk. Our loans are primarily generated within the market areas where our
offices are located, while Republic Business Credit generates loans on a nationwide basis.
— Commercial, Financial and Agricultural Loans. Commercial, financial and agricultural loans (referred to as “C&I loans”),
which accounted for approximately 14.64% of our total loans at December 31, 2024, are customarily granted to established
local business customers in our market area on a fully collateralized basis to meet their credit needs. The terms and loan
structure are dependent on the collateral and strength of the borrower. Loan-to-value ratios typically range from 50% to 85%,
depending on the type of collateral. Terms are typically short term in nature and are commensurate with the secondary source
of repayment that serves as our collateral.
Although C&I loans may be collateralized by equipment or other business assets, including receivables, the repayment of this
type of loan depends primarily on the creditworthiness and projected cash flow of the borrower (and any guarantors). Thus, the
chief considerations when assessing the risk of a C&I loan are the local business borrower’s ability to sell its products/services,
thereby generating sufficient operating revenue to repay us under the agreed upon terms and conditions, and the general
business conditions of the local economy or other market that the business serves. The liquidation of collateral is considered a
secondary source of repayment. Another source of repayment are guarantors of the loan, if any. To manage these risks, the
Bank’s policy is to secure its C&I loans with both the assets of the borrowing business and any other collateral and guarantees
that may be available. In addition, we actively monitor certain financial measures of the borrower, including advance rate, cash
flow, collateral value and other appropriate credit factors. We use C&I loan credit scoring models for smaller-size loans.
The Company’s factoring receivables are categorized as C&I loans. In assessing the risk associated with this type of loan,
management considers the ability of the client’s account customer, rather than the client itself, to repay the Company.
— Real Estate – 1-4 Family Mortgage. We are active in the real estate – 1-4 family mortgage area (referred to as “residential
real estate loans”), with approximately 27.07% of our total loans at December 31, 2024, being residential real estate loans. In
addition, in 2024, we originated for sale on the secondary market approximately $2.0 billion in residential real estate loans
through our Mortgage division. The decision to retain residential real estate loans in our portfolio is dependent upon whether
the Bank has sufficient liquidity to fund the needs of customers and if rates are favorable to retain the loans. Retained portfolio
loans are made primarily through the Bank’s variable-rate mortgage product offerings. We offer both first and second
mortgages on residential real estate. Loans secured by residential real estate in which the property is the principal residence of
the borrower are referred to as “primary” 1-4 family mortgages. Loans secured by residential real estate in which the property is
rented to tenants or is not otherwise the principal residence of the borrower are referred to as “rental/investment” 1-4 family
mortgages. We also offer loans for the preparation of residential real property prior to construction (referred to as “residential
land development loans”). In addition, we offer home equity loans or lines of credit and term loans secured by first and second
mortgages on the residences of borrowers who elect to use the accumulated equity in their homes for purchases, refinances,
home improvements, education and other personal expenditures. Both fixed and variable rate loans are offered with competitive
terms and fees. Originations of residential real estate loans are generated through retail efforts in our branches or originations by
or referrals from our Mortgage division or online by our retail mortgage originators. We attempt to minimize the risk associated
with residential real estate loans by strictly scrutinizing the financial condition of the borrower; typically, we also limit the
maximum loan-to-value ratio. With respect to second lien home equity loans or lines of credit, which inherently carry a higher
risk of loss upon default, we limit our exposure by limiting these types of loans to borrowers with higher credit scores.
As noted above, we also originate residential real estate loans with the intention of selling them in the secondary market to third
party investors or directly to government sponsored entities. In addition to the origination channels mentioned above, mortgage
loans held for sale are also originated through wholesale relationships where we purchase loans from smaller banks, credit
unions and brokerage agencies. When these loans are sold, we either release or retain the related servicing rights, depending on
a number of factors, such as the pricing of such loans in the secondary market, fluctuations in interest rates that would impact
the profitability of the loans and other market-related conditions. Residential real estate originations to be sold are sold either on
a “best efforts” basis or under a “mandatory delivery” sales agreement. Under a “best efforts” sales agreement, residential real
estate originations are locked in at a contractual rate with third party private investors or directly with government sponsored
agencies, and we are obligated to sell the mortgages to such investors only if the mortgages are closed and funded. The risk we
assume is conditioned upon loan underwriting and market conditions in the national mortgage market. Under a “mandatory
delivery” sales agreement, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a
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specified price and delivery date. Penalties are paid to the investor if we fail to satisfy the contract. The Company does not
actively market or originate subprime mortgage loans.
— Real Estate – Commercial Mortgage. Our real estate – commercial mortgage loans (“commercial real estate loans”)
represented approximately 48.40% of our total loans at December 31, 2024. Included in this portfolio are loans in which the
owner develops a property with the intention of locating its business there. These loans are referred to as “owner-occupied”
commercial real estate loans. Payments on these loans are dependent on the successful development and management of the
business as well as the borrower’s ability to generate sufficient operating revenue to repay the loan. The Bank mitigates the risk
that our estimate of value will prove to be inaccurate by having sufficient sources of secondary repayment as well as guarantor
support. In some instances, in addition to our mortgage on the underlying real estate of the business, our commercial real estate
loans are secured by other non-real estate collateral, such as equipment or other assets used in the business.
In addition to owner-occupied commercial real estate loans, we offer loans in which the owner develops a property where the
source of repayment of the loan will come from the sale or lease of the developed property, for example, retail shopping
centers, hotels and storage facilities. These loans are referred to as “non-owner occupied” commercial real estate loans. We also
offer commercial real estate loans to developers of commercial properties for purposes of site acquisition and preparation and
other development prior to actual construction (referred to as “commercial land development loans”). Non-owner occupied
commercial real estate loans and commercial land development loans are dependent on the successful completion of the project
and may be affected by adverse conditions in the real estate market or the economy as a whole.
We seek to minimize risks relating to all commercial real estate loans by limiting the maximum loan-to-value ratio and strictly
scrutinizing the financial condition of the borrower, the quality of the collateral, the management of the property securing the
loan and, where applicable, the financial strength of the tenant occupying the property. Loans are usually structured either to
fully amortize over the term of the loan or to balloon after the third year or fifth year of the loan, typically with an amortization
period not to exceed 20 years. We also actively monitor such financial measures as advance rate, cash flow, collateral value and
other appropriate credit factors. We generally obtain loan guarantees from financially capable parties to the transaction based on
a review of the guarantor’s financial statements.
— Real Estate – Construction. Our real estate – construction loans (“construction loans”) represented approximately 8.49% of
our total loans at December 31, 2024. Our construction loan portfolio consists of loans for the construction of single family
residential properties, multi-family properties and commercial projects. Maturities for construction loans generally range from
six to 12 months for residential property and from 24 to 36 months for non-residential and multi-family properties. Similar to
non-owner occupied commercial real estate loans, the source of repayment of a construction loan comes from the sale or lease
of newly-constructed property, although often construction loans are repaid with the proceeds of a commercial real estate loan
that we make to the owner or lessor of the newly-constructed property.
Construction lending entails significant additional risks compared to residential real estate or commercial real estate lending,
including the risk that loan funds are advanced upon the security of the property under construction, which is of uncertain value
prior to the completion of construction. The risk is to evaluate accurately the total loan funds required to complete a project and
to ensure proper loan-to-value ratios during the construction phase. We address the risks associated with construction lending in
a number of ways. As a threshold matter, we generally limit loan-to-value and loan-to-cost ratios to regulatory guidance of
85% of when-completed appraised values for owner-occupied and investor-owned residential or commercial properties, with
the exception of those loans with clearly defined risk mitigants. We monitor draw requests either internally or with the
assistance of a third party, creating an additional safeguard that ensures advances are in line with project budgets.
— Installment Loans to Individuals. Installment loans to individuals (or “consumer loans”), which represented approximately
0.70% of our total loans at December 31, 2024, are granted to individuals for the purchase of personal goods. Loss or decline of
income by the borrower due to unplanned occurrences represents the primary risk of default to us. In the event of default, a
shortfall in the value of the collateral may pose a loss to us in this loan category. Before making a consumer loan, we assess the
applicant’s credit history and ability to meet existing and proposed debt obligations. Although the applicant’s creditworthiness
is the primary consideration, the underwriting process also includes a comparison of the value of the collateral, if any, to the
proposed loan amount. We obtain a lien against the collateral securing the loan and hold title until the loan is repaid in full.
— Equipment Financing and Leasing. Equipment financing loans (or “lease financing loans”), which represented
approximately 0.70% of our total loans at December 31, 2024, are granted to provide capital to businesses for commercial
equipment needs. These loans are generally granted for periods ranging between two and five years at fixed rates of interest.
Loss or decline of income by the borrower due to unplanned occurrences represents the primary risk of default to us. In the
event of default, a shortfall in the value of the collateral may pose a loss to us in this loan category. We obtain a lien against the
collateral securing the loan and hold title (if applicable) until the loan is repaid in full. Transportation, manufacturing,
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healthcare, material handling, printing and construction are the industries that typically obtain lease financing. In addition, we
offer a product tailored to qualified not-for-profit customers that provides real estate financing at tax-exempt rates.
Addressing Aggregate Lending Risks. In addition to the steps described above to mitigate the risks posed by any individual loan
relationship, management has implemented a structure that proactively monitors the risk to the Company presented by the
Bank’s loan portfolio as a whole. First, we purposefully manage the loan portfolio to avoid excessive concentrations in any
particular loan category, industry or geographic region. Our goal is to structure the loan portfolio so that it is well balanced
among C&I loans, owner-occupied commercial real estate loans, non-owner occupied commercial real estate loans, residential
real estate loans and consumer loans and other lending categories while taking into account current market risks and lending
opportunities. Construction and land development loans are allocated between the commercial real estate and residential real
estate categories based on the property securing the loan. With respect to construction and land development loans in particular,
management monitors whether the allocation of these loans across geography and asset type heightens the general risk
associated with these types of loans. We also monitor concentrations in our construction and land development loans based on
guidelines promulgated by banking regulators, which involves evaluating the aggregate value of these loans as a percentage of
our risk-based capital (this is referred to as the “100/300 Test” and is discussed in more detail under the “Supervision and
Regulation” heading below) as well as monitoring loans considered to be high volatility commercial real estate. A further
discussion of the risk reduction policies and procedures applicable to our lending activities can be found in Item 7,
Management’s Discussion and Analysis of Financial Condition and Results of Operations, under the heading “Risk
Management – Credit Risk and Allowance for Credit Losses on Loans and Unfunded Commitments.”
Investment Activities. We acquire investment securities to provide a source for meeting our liquidity needs, to generate
investment returns and to supply securities to be used in collateralizing certain deposits and other types of borrowings. We
primarily acquire mortgage-backed securities and collateralized mortgage obligations issued by government-sponsored entities
such as FNMA, FHLMC and GNMA (colloquially known as “Fannie Mae,” “Freddie Mac” and “Ginnie Mae,” respectively) as
well as municipal securities. Generally, cash flows from maturities and calls of our investment securities that are not used to
fund loan growth or repay debt are reinvested in investment securities. We also hold investments in corporate debt and pooled
trust preferred securities. At December 31, 2024, the Company’s investment securities included both available for sale and held
to maturity classifications.
Investment income generated by our investment activities, both taxable and tax-exempt, accounted for approximately 3.9%,
1.1% and 7.9% of our total gross revenues in 2024, 2023 and 2022, respectively.
Deposit Services. We offer a broad range of deposit services and products to our consumer and commercial clients. Through
our community branch networks, we offer consumer checking accounts with free online and mobile banking, which includes
bill pay and transfer features, remote deposit capture, peer-to-peer payment, interest bearing checking, money market accounts,
savings accounts, certificates of deposit, individual retirement accounts and health savings accounts.
For our commercial clients, we offer competitive checking and savings services and a suite of treasury management products,
including remote deposit capture, account reconciliation, electronic statements, fraud protection via positive pay, ACH
origination and wire transfer, lockbox services, overnight investment sweep options, enhanced business Internet banking and
mobile banking.
Fees generated through the deposit services we offer accounted for approximately 4.9%, 5.7% and 7.6% of our total gross
revenues in 2024, 2023 and 2022, respectively. Excluding brokered deposits, the deposits held by the Bank have been primarily
generated within the market areas where our branches are located.
Operations of Wealth Management
Our Wealth Management segment operates through two divisions: Trust and Financial Services. The Trust division, which is
housed in the Bank’s trust department, offers a wide variety of fiduciary and custodial services, including investment advisory,
accounting and administrative services (acting as trustee or in other capacities) for qualified retirement and other employee
benefit plans, IRAs, personal trusts and estates. Our fees for managing these accounts are based on changes in market values of
the assets under management in the account, with the amount of the fee depending on services we provide and the type of
account.
The Financial Services division, which primarily operates through Park Place Capital (although the Bank’s trust department
maintains some legacy financial service operations), offers specialized products and services to our customers. These products
and services include fixed and variable annuities, mutual funds and stocks, some of which are offered through a third party
provider. Park Place Capital also provides administrative and compliance services for certain mutual funds.
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For 2024, the Wealth Management segment generated total revenue of $25.9 million, or 2.4% of the Company’s total gross
revenues. Wealth Management operations are headquartered in Tupelo, Mississippi, and Birmingham, Alabama, but our
products and services are available to customers in all of our markets through our community banks.
Operations of Insurance
Prior to the sale of our insurance agency business in July 2024, Renasant Insurance, Inc. was a full-service insurance agency
offering all lines of commercial and personal insurance through major carriers. For 2024, Renasant Insurance, Inc. generated
total revenue of $7.4 million, or 0.1% of the Company’s total gross revenues, and operated eight offices throughout north and
north central Mississippi. Renasant Insurance, Inc. now leases all of these offices to the party that acquired its insurance agency
business.
Competition
Community Banks
Vigorous competition exists in all major product and geographic areas in which we conduct banking business. We compete
through the Bank for available loans and deposits and the provision of other financial services (such as treasury management)
with state, regional and national banks as well as savings and loan associations, credit unions, finance companies, mortgage
companies, insurance companies, brokerage firms and investment companies in all of our service areas. All of these numerous
institutions compete in the delivery of products and services through availability, quality and pricing, and many of our
competitors are larger and have substantially greater resources than we do, including higher total assets and capitalization,
larger technology and marketing budgets and a broader offering of financial services.
Wealth Management
Our Wealth Management segment competes with other banks, brokerage firms, financial advisers and trust companies, which
provide one or more of the services and products that we offer. Our wealth management operations compete on the basis of
available product lines, rates and fees, as well as reputation and professional expertise. No particular company or group of
companies dominates this industry in our markets.
Supervision and Regulation
General
The U.S. banking industry is highly regulated under federal and state law. We are a bank holding company registered under the
Bank Holding Company Act of 1956, as amended (the “BHC Act”). As a result, we are subject to supervision, regulation and
examination by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). The Bank is a commercial
bank chartered under the laws of the State of Mississippi; it is not a member of the Federal Reserve System. As a Mississippi
non-member bank, the Bank is subject to supervision, regulation and examination by the Mississippi Department of Banking
and Consumer Finance (the “DBCF”), as the chartering entity of the Bank, and by the FDIC, as the insurer of the Bank’s
deposits. As an institution with more than $10 billion in assets, we are subject to examination by the Consumer Financial
Protection Bureau (the “CFPB”) for compliance with federal consumer protection laws. Finally, as a publicly-traded company,
the Company must comply with federal securities laws administered by the SEC as well as the listing rules of the New York
Stock Exchange (the “NYSE”). As a result of this extensive system of supervision and regulation, the growth and earnings
performance of the Company and the Bank are affected not only by management decisions and general and local economic
conditions, but also by the statutes, rules, regulations and policies administered by the Federal Reserve, the FDIC, the DBCF,
the CFPB, the SEC and other federal and state regulatory authorities with jurisdiction over our operations.
The bank regulatory scheme has two primary goals: to maintain a safe and sound banking system and to facilitate the conduct
of sound monetary policy. This scheme, including the laws and regulations administered by the CFPB, also seeks to ensure
broad, non-discriminatory access to financial services on fair and reasonable terms. This comprehensive system of supervision
and regulation is intended primarily for the protection of the FDIC’s deposit insurance fund, bank depositors, consumers and
the public in general, rather than our shareholders or creditors. To this end, federal and state banking laws and regulations
govern, among other things, the types of activities in which we and the Bank may engage, the terms and conditions of our
products and services and the manner in which we offer our products and services, permissible investments, the level of
reserves that the Bank must maintain against deposits, minimum equity capital levels, the nature and amount of collateral
required for loans, maximum interest rates that can be charged, the manner and amount of the dividends that may be paid, and
corporate activities regarding mergers, acquisitions and the establishment of branch offices. The federal securities laws are
designed to protect investors, maintain the integrity and efficiency of the securities trading markets and facilitate capital
formation. These goals are accomplished through rules that restrict the type of activities we can engage in with respect to our
7
publicly-traded securities and through a disclosure regime requiring us to disclose a significant amount of information on an
annual, quarterly and current basis.
The description below summarizes certain elements of the regulatory framework applicable to us and the Bank. This summary
is not, however, intended to describe all laws, regulations and policies applicable to us and the Bank, and the description is
qualified in its entirety by reference to the full text of the statutes, regulations, policies, interpretative letters and other written
guidance that are described below. Further, the following discussion addresses the regulatory framework as in effect as of the
date of this Annual Report on Form 10-K. Legislation and regulatory action to implement new laws and regulations and to
revise or repeal existing federal and Mississippi banking, consumer protection, securities and other applicable laws and
regulations, sometimes in a substantial manner, are continually under consideration by the U.S. Congress, state legislatures and
federal and state regulatory agencies. For example, the FDIC has recently given indications that the scope and focus of its
activities may be significantly altered, and the Trump Administration has stated that it plans to substantially streamline the
CFPB’s operations, which have essentially ceased as of the date of this Annual Report on Form 10-K. Accordingly, the
following discussion must be read in light of the enactment of any new federal or state banking laws or regulations or any
amendment or repeal of existing laws, regulations or regulatory guidance, or any change in the policies or the enforcement
focus of the regulatory agencies with jurisdiction over the Company’s operations, after the date of this Annual Report on Form
10-K.
Supervision and Regulation of Renasant Corporation
General. As a bank holding company registered under the BHC Act, we are subject to the regulation and supervision applicable
to bank holding companies by the Federal Reserve. The BHC Act and other federal laws subject bank holding companies to
particular restrictions on the types of activities in which they may engage and to a range of supervisory requirements and
activities, including regulatory enforcement actions for violations of laws and regulations or engaging in unsafe and unsound
banking practices. The Federal Reserve’s jurisdiction also extends to any company that we directly or indirectly control, such as
any non-bank subsidiaries and other companies in which we own a controlling investment.
Scope of Permissible Activities. Under the BHC Act, we are prohibited from engaging directly or indirectly in activities other
than those of banking, managing or controlling banks or furnishing services to or performing services for the Bank and from
acquiring a direct or indirect interest in or control of more than 5% of the voting shares of any company that is not a bank or
financial holding company. The principal exception to this prohibition is that we may engage, directly or indirectly (including
through the ownership of shares of another company), in certain activities that the Federal Reserve has found to be so closely
related to banking or managing and controlling banks as to be a proper incident thereto. In making determinations whether
activities are closely related to banking or managing banks, the Federal Reserve must consider whether the performance of such
activities by a bank holding company or its subsidiaries can reasonably be expected to produce benefits to the public, such as
greater convenience, increased competition or gains in efficiency of resources, and whether such public benefits outweigh the
risks of possible adverse effects, such as decreased or unfair competition, conflicts of interest or unsound banking practices.
Currently-permitted activities include, among others, operating a mortgage, finance, credit card or factoring company;
providing certain data processing, storage and transmission services; acting as an investment or financial advisor; acting as an
insurance agent for certain types of credit-related insurance; leasing personal or real property on a non-operating basis; and
providing certain stock brokerage services.
Pursuant to the amendment to the BHC Act effected by the Financial Services Modernization Act of 1999 (commonly referred
to as the Gramm-Leach Bliley Act, or the “GLBA”), a bank holding company whose subsidiary deposit institutions are “well
capitalized” and “well managed” may elect to become a “financial holding company” and thereby engage without prior Federal
Reserve approval in certain banking and non-banking activities that are deemed to be financial in nature or incidental to
financial activity. These “financial in nature” activities include securities underwriting, dealing and market making; organizing,
sponsoring and managing mutual funds; insurance underwriting and agency activities; merchant banking activities; and other
activities that the Federal Reserve has determined to be closely related to banking. No regulatory approval is required for a
financial holding company to acquire a company, other than a bank or savings association, engaged in activities that are
financial in nature or incidental to activities that are financial in nature, as determined by the Federal Reserve. We have not
elected to become a financial holding company.
A dominant theme of the GLBA is functional regulation of financial services, with the primary regulator of the Company or its
subsidiaries being the agency that traditionally regulates the activity in which the Company or its subsidiaries wish to engage.
For example, the SEC regulates bank holding company securities transactions, and the various banking regulators oversee our
banking activities.
Capital Adequacy Guidelines. The Federal Reserve has adopted risk-based capital guidelines for bank holding companies. The
risk-based capital guidelines are designed to make regulatory capital requirements more sensitive to differences in risk profiles
among banks and bank holding companies, to factor off-balance sheet exposure into the assessment of capital adequacy, to
minimize disincentives for holding liquid, low-risk assets and to achieve greater consistency in the evaluation of the capital
8
adequacy of major banking organizations worldwide. Under these guidelines, assets and off-balance sheet items are assigned to
broad risk categories, each with appropriate weights. The resulting capital ratios represent capital as a percentage of total risk-
weighted assets and off-balance sheet items. In addition to the risk-based capital guidelines, the Federal Reserve has adopted a
minimum Tier 1 capital (leverage) ratio, under which a bank holding company must maintain a minimum level of Tier 1 capital
to average total consolidated assets of at least 4%.
The capital requirements applicable to the Company are substantially similar to those imposed on the Bank under FDIC
regulations, described below under the heading “Supervision and Regulation of Renasant Bank - Capital Adequacy Guidelines;
Prompt Corrective Action.”
Payment of Dividends; Source of Strength. Under Federal Reserve policy, in general a bank holding company should pay
dividends only when (1) its net income available to shareholders over the last four quarters (net of dividends paid) has been
sufficient to fully fund the dividends, (2) the prospective rate of earnings retention appears to be consistent with the capital
needs and overall current and prospective financial condition of the bank holding company and its subsidiaries and (3) the bank
holding company will continue to meet minimum regulatory capital adequacy ratios after giving effect to the dividend.
The Federal Reserve has provided guidance on the criteria it uses to evaluate a bank holding company’s request to pay
dividends in an aggregate amount that will exceed the company’s earnings for the period in which the dividends will be paid.
For purposes of this analysis, “dividend” includes not only dividends on preferred and common equity but also dividends on
debt underlying trust preferred securities and other Tier 1 capital instruments. The criteria evaluates whether the holding
company (1) has net income over the past four quarters sufficient to fully fund the proposed dividend (taking into account prior
dividends paid during this period), (2) is considering stock repurchases or redemptions in the quarter, (3) does not have a
concentration in commercial real estate and (4) is in good supervisory condition, based on its overall condition and its asset
quality risk. A holding company not meeting these criteria will require more in-depth consultations with the Federal Reserve.
In addition, a bank holding company is required to serve as a source of financial strength to its subsidiary bank(s). This means
that we are expected to use available resources to provide adequate financial resources to the Bank, including during periods of
financial stress or adversity, and to maintain the financial flexibility and capital-raising capacity to obtain additional resources
for assisting the Bank where necessary. In addition, any capital loans that we make to the Bank are subordinate in right of
payment to deposits and to certain other indebtedness of the Bank. In the event of our bankruptcy, any commitment by us to a
federal bank regulatory agency to maintain the capital of the Bank will be assumed by the bankruptcy trustee and entitled to a
priority of payment.
Acquisitions by Bank Holding Companies. The BHC Act requires every bank holding company to obtain the prior approval of
the Federal Reserve (subject to waiver under certain circumstances) before it acquires all or substantially all of the assets of any
bank, merges or consolidates with another bank holding company or acquires ownership or control of any voting shares of any
bank if after such acquisition it would own or control, directly or indirectly, more than 5% of the voting shares of such bank.
The Federal Reserve will not approve any acquisition, merger or consolidation that would have a substantially anti-competitive
effect, unless the anti-competitive impact of the proposed transaction is clearly outweighed by a greater public interest in
meeting the convenience and needs of the community to be served. The Federal Reserve also considers capital adequacy and
other financial and managerial resources and future prospects of the companies and the banks concerned, together with the
convenience and needs of the community to be served and the record of the bank holding company and its subsidiary bank(s) in
combating money laundering activities. Finally, in order to acquire a bank located outside its home state, a bank holding
company and its subsidiary institutions must be “well capitalized” and “well managed.” In addition, as detailed under the
heading “Scope of Permissible Activities” above, we cannot acquire direct or indirect control of more than 5% of the voting
shares of a company engaged in non-banking activities.
Control Acquisitions. Federal and state laws, including the BHC Act and the Change in Bank Control Act, also impose prior
notice or approval requirements and ongoing regulatory requirements on any investor that seeks to acquire direct or indirect
“control” of an FDIC-insured depository institution or bank holding company. “Control” of a depository institution is a facts
and circumstances analysis, but generally an investor is deemed to control a depository institution or other company if the
investor owns or controls 25% or more of any class of voting securities. For ownership or control at less than the 25% level,
there are multiple factors that contribute to whether “control” will be presumed to exist, which depend on the ownership level of
the depository institution or bank holding company’s voting securities. These presumptions are rebuttable.
Anti-Tying Restrictions. Bank holding companies and their affiliates are prohibited from tying the provision of certain services,
such as extensions of credit, to other nonbanking services offered by a bank holding company or its affiliates.
Status as a Public Company. As a publicly-traded company, Renasant Corporation is also subject to laws, rules and regulations,
as well as the standards of self-regulatory organizations, relating to corporate governance, financial reporting and public
disclosure, and auditor independence, including the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and
9
Consumer Protection Act of 2010 (the “Dodd-Frank Act”), SEC rules and regulations and NYSE listing rules. We incur
significant expense in, and devote substantial management time and attention to, complying with these laws, regulations and
standards, which are subject to varying interpretations, amendment or outright repeal. We are committed to maintaining high
standards of corporate governance, financial reporting and public disclosure, and management continually monitors changes in
laws, rules and regulations, as well as best practices, in this area to ensure that we fulfill this commitment.
Supervision and Regulation of Renasant Bank
General. As a Mississippi-chartered bank, the Bank is subject to the regulation and supervision of the DBCF. As an FDIC-
insured institution that is not a member of the Federal Reserve, the Bank is subject to the regulation and supervision of the
FDIC. The regulations of the FDIC and the DBCF affect virtually all of the Bank’s activities, including the minimum levels of
capital required, the ability to pay dividends, mergers and acquisitions, borrowing, the ability to expand through new branches
or acquisitions and various other matters. Finally, having more than $10 billion in assets, our compliance with federal consumer
protection laws is subject to examination by the CFPB.
Insurance of Deposits. The deposits of the Bank are insured through the Deposit Insurance Fund (the “DIF”) up to $250,000
for most accounts. The FDIC administers the DIF, and the FDIC must by law maintain the DIF at an amount equal to a
specified percentage of the estimated annual insured deposits or assessment base. The minimum designated reserve ratio of the
DIF is 1.35% of total insured deposits, but the FDIC is authorized to designate a reserve ratio above the statutory minimum.
The FDIC must offset the effect of this increase for banks with assets less than $10 billion, meaning that banks above such asset
threshold, such as the Bank, will bear the cost of the increase.
To fund the DIF, FDIC-insured banks are required to pay deposit insurance assessments to the FDIC on a quarterly basis. An
institution’s assessment is based on its average consolidated total assets less its average tangible equity during the assessment
period. For banks like Renasant Bank, with assets in excess of $10 billion, the assessment rate is based on both our risk
classification and certain forward-looking measures. An institution’s risk classification is assigned based on its capital levels
and the level of supervisory concern that the institution poses to the regulators. The higher an institution’s risk classification,
the higher its assessment rate (on the assumption that such institutions pose a greater risk of loss to the DIF). In addition, the
FDIC can impose special assessments in certain instances. Also, we are subject to a surcharge designed to increase the DIF to
specified levels.
The FDIC may terminate the deposit insurance of any insured depository institution, including the Bank, if it determines after a
hearing that the institution has engaged or is engaging in unsafe or unsound practices, is in an unsafe or unsound condition to
continue operations or has violated any applicable law, regulation, order or any condition imposed by an agreement with the
FDIC. For an institution with no tangible capital, deposit insurance may be temporarily suspended during the hearing process
for the permanent termination of insurance. If the FDIC terminates an institution’s deposit insurance, accounts insured at the
time of the termination, less withdrawals, will continue to be insured for a period of six months to two years, as determined by
the FDIC. We are not aware of any existing circumstances that would result in termination of the Bank’s deposit insurance.
Interstate Banking and Branching. Under federal and Mississippi law, the Bank may establish additional branch offices within
Mississippi, subject to the approval of the DBCF, and the Bank can also establish additional branch offices outside Mississippi,
subject to prior regulatory approval, so long as the laws of the state where the branch will be located would permit a state bank
chartered in that state to establish a branch. Finally, the Bank may also establish offices in other states by merging with banks
or by purchasing branches and related assets of banks in other states, subject to certain restrictions.
Dividends. The restrictions and guidelines with respect to the Company’s payment of dividends are described above. As a
practical matter, for so long as our operations chiefly consist of the operation of the Bank, the Bank will remain our source of
dividend payments. Accordingly, our ability to pay dividends depends upon the Bank’s earnings and financial condition.
The ability of the Bank to pay dividends also is restricted by federal and state laws, regulations and policies. Under Mississippi
law, a Mississippi bank may not pay dividends unless its earned surplus is in excess of three times capital stock. A Mississippi
bank with earned surplus in excess of three times capital stock may pay a dividend, subject to the approval of the DBCF. In
addition, the FDIC also has the authority to prohibit the Bank from engaging in business practices that the FDIC considers to be
unsafe or unsound, which, depending on the financial condition of the Bank, could include the payment of dividends. Federal
Reserve regulations also limit the amount the Bank may loan to the Company unless such loans are collateralized by specific
obligations. Accordingly, the approval of the DBCF is required prior to the Bank paying dividends to the Company, and under
certain circumstances the approval of the FDIC may be required.
Capital Adequacy Guidelines; Prompt Corrective Action. The FDIC has promulgated risk-based capital guidelines similar to,
and with the same underlying purposes as, those established by the Federal Reserve with respect to bank holding companies.
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Under those guidelines, assets and off-balance sheet items are assigned to broad risk categories, each with appropriate weights.
The resulting capital ratios represent capital as a percentage of total risk-weighted assets and off-balance sheet items.
Capital requirements for insured depository institutions are countercyclical, such that capital requirements increase in times of
economic expansion and decrease in times of economic contraction.
Under the current risk-based capital adequacy guidelines, we are required to maintain (1) a ratio of common equity Tier 1
capital (“CET1”) to total risk-weighted assets of not less than 4.5%; (2) a minimum leverage capital ratio of 4%; (3) a minimum
Tier 1 risk-based capital ratio of 6%; and (4) a minimum total risk-based capital ratio of 8%. CET1 generally consists of
common stock, retained earnings, accumulated other comprehensive income and certain minority interests, less certain
adjustments and deductions. In addition, we must maintain a “capital conservation buffer,” which is a specified amount of
CET1 capital in addition to the amount necessary to meet minimum risk-based capital requirements. The capital conservation
buffer is designed to absorb losses during periods of economic stress. If our ratio of CET1 to risk-weighted capital is below the
capital conservation buffer, we will face restrictions on our ability to pay dividends, repurchase our outstanding stock and make
certain discretionary bonus payments. The required capital conservation buffer is 2.5% of CET1 to risk-weighted assets in
addition to the amount necessary to meet minimum risk-based capital requirements.
In addition, the Federal Reserve, the FDIC and the Office of the Comptroller of the Currency rules for calculating risk-weighted
assets have been set to enhance risk sensitivity and to incorporate certain international capital standards of the Basel Committee
on Banking Supervision. These rules affect the calculation of the denominator of a banking organization’s risk-based capital
ratios to reflect the higher-risk nature of certain types of loans. For example, a 150% risk weight applies to both certain high
volatility commercial real estate acquisition, development and construction loans as well as non-residential mortgage loans 90
days past due or on nonaccrual status. Also, “hybrid” capital items like trust preferred securities no longer enjoy Tier 1 capital
treatment, subject to various grandfathering rules. We and the Bank meet all minimum capital requirements as currently in
effect, and our grandfathered trust preferred securities qualify for Tier 1 capital treatment. Now that the Company has exceeded
$15 billion in assets, we will lose Tier 1 treatment of our junior subordinated debentures if we complete the proposed merger
with The First (or we make any other acquisition of a financial institution).
For a detailed discussion of the Company’s capital ratios, see Note 20, “Regulatory Matters,” in the Notes to Consolidated
Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report.
Under Section 38 of the Federal Deposit Insurance Act (the “FDIA”), each federal banking agency is required to implement a
system of prompt corrective action for institutions that it regulates. The federal banking agencies (including the FDIC) have
adopted substantially similar regulations to implement this mandate. Under current regulations, a bank is (1) “well capitalized”
if it has total risk-based capital of 10% or more, has a Tier 1 risk-based ratio of 8% or more, has a common equity Tier 1 capital
ratio of 6.5%, has a Tier 1 leverage capital ratio of 5% or more and is not subject to any order or final capital directive to meet
and maintain a specific capital level for any capital measure, (2) “adequately capitalized” if it has a total risk-based capital ratio
of 8% or more, a Tier 1 risk-based capital ratio of 6% or more, a common equity Tier 1 capital ratio of 4.5% and a Tier 1
leverage capital ratio of 4% or more (3% under certain circumstances) and does not meet the definition of “well
capitalized,” (3) “undercapitalized” if it has a total risk-based capital ratio that is less than 8%, a Tier 1 risk-based capital ratio
that is less than 6%, a common equity Tier 1 capital ratio that is less than 4.5% or a Tier 1 leverage capital ratio that is less than
4%, (4) “significantly undercapitalized” if it has a total risk-based ratio that is less than 6%, a Tier 1 risk-based capital ratio that
is less than 4%, a common equity Tier 1 capital ratio of less than 3% or a Tier 1 leverage capital ratio that is less than 3%, and
(5) “critically undercapitalized” if it has a ratio of tangible equity to total assets that is equal to or less than 2%.
The capital classification of a bank affects the frequency of regulatory examinations, the bank’s ability to engage in certain
activities and the deposit insurance premiums paid by the bank. In addition, federal banking regulators must take various
mandatory supervisory actions, and may take other discretionary actions, with respect to institutions in the three
undercapitalized categories. The severity of the action depends upon the capital category in which the institution is placed. An
institution that is categorized as undercapitalized, significantly undercapitalized or critically undercapitalized is required to
submit an acceptable capital restoration plan to its appropriate federal banking agency. An undercapitalized institution also is
generally prohibited from increasing its average total assets, making acquisitions, establishing any branches or engaging in any
new line of business, except under an accepted capital restoration plan or with FDIC approval. Generally, banking regulators
must appoint a receiver or conservator for an institution that is critically undercapitalized.
Section 38 of the FDIA and related regulations also specify circumstances under which the FDIC may reclassify a well-
capitalized bank as adequately capitalized and may require an adequately capitalized bank or an undercapitalized bank to
comply with supervisory actions as if it were in the next lower category (except that the FDIC may not reclassify a significantly
undercapitalized bank as critically undercapitalized).
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The provisions discussed above, as well as any other aspects of current or proposed regulatory or legislative changes to laws
applicable to the financial industry, may impact the profitability of our business activities and may change certain of our
business practices, including the ability to offer new products, obtain financing, attract deposits, make loans, and achieve
satisfactory interest spreads, and could expose us to additional costs, including increased compliance costs. These changes also
may require us to invest significant management attention and resources to make any necessary changes to operations in order
to comply, and could therefore also materially and adversely affect our business, financial condition and results of operations.
Interchange Fees. Under Section 1075 of the Dodd-Frank Act (often referred to as the “Durbin Amendment”), the Federal
Reserve established standards for assessing whether the interchange fees, or “swipe” fees, that banks charge for processing
electronic payment transactions are “reasonable and proportional” to the costs incurred by issuers for processing such
transactions. Under the Federal Reserve’s current rules, the maximum permissible interchange fee is no more than 21 cents plus
5 basis points of the transaction value for many types of debit interchange transactions. A debit card issuer may also recover
one cent per transaction for fraud prevention purposes if the issuer develops and implements policies and procedures reasonably
designed to achieve certain fraud-prevention standards. The Federal Reserve also has rules governing routing and exclusivity
that require issuers to offer two unaffiliated networks for routing transactions on each debit or prepaid product.
Activities and Investments of Insured State-Chartered Banks. Section 24 of the FDIA generally limits the activities and equity
investments of FDIC-insured, state-chartered banks to those that are permissible for national banks. Under regulations dealing
with equity investments, an insured state bank generally may not directly or indirectly acquire or retain any equity investment
of a type, or in an amount, that is not permissible for a national bank. An insured state bank is not prohibited from, among other
things, taking the following actions:
-
acquiring or retaining a majority interest in a subsidiary;
-
investing as a limited partner in a partnership the sole purpose of which is direct or indirect investment in the
acquisition, rehabilitation or new construction of a qualified housing project, provided that such limited
partnership investments may not exceed 2% of the bank’s total assets;
-
acquiring up to 10% of the voting stock of a company that solely provides or reinsures directors’, trustees’ and
officers’ liability insurance coverage or bankers’ blanket bond group insurance coverage for insured depository
institutions; and
-
acquiring or retaining the voting shares of a depository institution if certain requirements are met.
Under FDIC regulations, insured banks engaging in impermissible activities, or banks that wish to engage in otherwise
impermissible activities, may seek approval from the FDIC to continue or commence such activities, as the case may be. The
FDIC will not approve such an application if the bank does not meet its minimum capital requirements or the proposed
activities present a significant risk to the deposit insurance fund.
100/300 Test. Federal banking regulators use certain criteria to identify financial institutions that are potentially exposed to
significant commercial real estate (“CRE”) concentration risk. Among other things, an institution will be deemed to potentially
have significant CRE concentration risk exposure if, based on its call report, either (1) total loans classified as acquisition,
development and construction (“ADC”) loans represent 100% or more of the institution’s total capital or (2) total CRE loans,
which consists of ADC and non-owner occupied CRE loans as defined in regulatory guidance, represent 300% or more the
institution’s total capital, where the balance of the institution’s CRE loan portfolio has increased by 50% or more during the
prior 36 months. The foregoing criteria are commonly referred to as the 100/300 Test. As of December 31, 2024, our ADC
loans represented 65% of our total bank level capital, and our total CRE loans represented 273% of our Bank level capital.
Safety and Soundness. The federal banking agencies, including the FDIC, have implemented rules and guidelines concerning
standards for safety and soundness required pursuant to Section 39 of the FDIA. In general, the standards relate to operational
and managerial matters, asset quality and earnings and compensation. The operational and managerial standards cover (1)
internal controls and information systems, (2) internal audit systems, (3) loan documentation, (4) credit underwriting, (5)
interest rate exposure, (6) asset growth and (7) compensation, fees and benefits. Under the asset quality and earnings standards,
the Bank must establish and maintain systems to identify problem assets and prevent deterioration in those assets and to
evaluate and monitor earnings and ensure that earnings are sufficient to maintain adequate capital reserves. The compensation
standard states that compensation will be considered excessive if it is unreasonable or disproportionate to the services actually
performed by the individual being compensated.
If an insured state-chartered bank fails to meet any of the standards promulgated by regulation, then such institution will be
required to submit a plan to the FDIC specifying the steps it will take to correct the deficiency. In the event that an insured
state-chartered bank fails to submit or fails in any material respect to implement a compliance plan within the time allowed by
the federal banking agency, Section 39 of the FDIA provides that the FDIC must order the institution to correct the deficiency.
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The FDIC may also (1) restrict asset growth; (2) require the bank to increase its ratio of tangible equity to assets; (3) restrict the
rates of interest that the bank may pay; or (4) take any other action that would better carry out the purpose of prompt corrective
action. We believe that the Bank has been and will continue to be in compliance with each of these standards.
Consumer Protection. We are subject to a broad array of federal and state laws designed to ensure that we offer our products
and services in a non-discriminatory manner and to protect consumers in connection with our lending and deposit-taking
activities. These statutes include the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act, the
Truth in Savings Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, the Electronic Funds
Transfer Act, and, in some cases, their respective state law counterparts. The CFPB has broad regulatory, supervisory and
enforcement authority over our offering and provision of consumer financial products and services under these laws. Among
other things, the CFPB is responsible for enforcing the Dodd-Frank Act’s prohibition on unfair, deceptive, or abusive acts or
practices in connection with any transaction with a consumer for a consumer financial products or services, or the offering of a
consumer financial product or service.
Relating to mortgage lending in particular, the CFPB issued regulations governing the ability to repay, qualified mortgages,
mortgage servicing, appraisals and compensation of mortgage lenders. These regulations limit the type of mortgage products
that the Bank can offer; they also affect our ability to enforce delinquent mortgage loans. The CFPB has also issued rules
integrating the required disclosures under the Truth in Lending Act, the Truth in Savings Act and the Real Estate Settlement
Procedures Act.
We have established numerous controls and procedures designed to ensure that we fully comply with all other consumer
protection laws, both federal and state, as they are currently interpreted (which interpretations are subject to change by the
CFPB). These controls and procedures are tested regularly to ensure they are accurate and are working properly. In addition,
our employees undergo at least annual training to ensure that they remain aware of consumer protection laws and the activities
mandated, or prohibited, thereunder.
Community Reinvestment Act. Under the Community Reinvestment Act (the “CRA”), the FDIC assesses the Bank’s record in
meeting the credit needs of its entire community, including low- and moderate-income neighborhoods. The FDIC’s assessment
is taken into account when evaluating any application we submit for, among other things, approval of the acquisition or
establishment of a branch or other deposit facility, an office relocation, a merger or the acquisition of shares of capital stock of
another financial institution. Under the CRA, institutions are assigned a rating of “outstanding,” “satisfactory,” “needs to
improve,” or “unsatisfactory.” The Bank has undertaken significant actions to comply with the CRA, and it received a
“satisfactory” rating by the FDIC with respect to its CRA compliance in its most recent assessment.
Financial Privacy Requirements. Federal law and regulations limit a financial institution’s ability to share a customer’s
financial information with unaffiliated third parties and contain extensive protections for a customer’s private information.
Specifically, these provisions require all financial institutions offering financial products or services to retail customers to
provide such customers with the financial institution’s privacy policy at the beginning of the relationship and annually
thereafter. Further, such customers must be given the opportunity to “opt out” of the sharing of personal financial information
with unaffiliated third parties. The sharing of information for marketing purposes is also subject to limitations. In addition to
law and regulation at the federal level, a number of states - some of which we have loan or deposit customers in - have enacted
broad statutes governing the use of an individual’s personal information. These statutes typically encompass a broader scope of
personal information than the financial information covered by federal privacy laws and regulations, and the statutes generally
place more stringent restrictions on the ability of a third party to disclose, share or otherwise use an individual’s personal
information than exist under federal law and regulations. Many of these states’ privacy laws and regulations impose severe
penalties for violations.
The Bank has adopted a privacy policy and implemented procedures governing the use and disclosure of personal financial
information for both customers and non-customers. We believe our policy and procedures currently comply with all applicable
laws and regulations, and we continually monitor federal and state laws, as well as changes in the nature and scope of our
operations, so that any necessary changes in our privacy policy and procedures can be enacted in a timely manner.
Anti-Money Laundering/Combatting the Financing of Terrorism. Federal anti-money laundering rules impose various
requirements on financial institutions intended to prevent the use of the U.S. financial system to fund terrorist activities or other
criminal activity. These provisions include a requirement that financial institutions operating in the United States have anti-
money laundering compliance programs, due diligence policies and controls to ensure the detection and reporting of money
laundering. Such compliance programs supplement existing compliance requirements, also applicable to financial institutions,
under the Bank Secrecy Act and the Office of Foreign Assets Control regulations. The Bank has established policies and
procedures to ensure compliance with federal anti-money laundering laws and regulations.
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The Volcker Rule. The Federal Reserve and the other federal banking regulators as well as the SEC each adopted a rule,
commonly referred to as the “Volcker Rule,” implementing Section 619 of the Dodd-Frank Act. Generally speaking, the
Volcker rule prohibits a bank and its affiliates from engaging in proprietary trading and from acquiring or retaining ownership
interests in, sponsoring, or having relationships with certain “covered funds,” including certain hedge funds and private equity
funds. The Volcker Rule does not impact any of our current activities, but it does limit the scope of permissible activities in
which we might engage in the future.
Supervision and Regulation of our Wealth Management Operations
Our Wealth Management operations are subject to licensing requirements and regulation under the laws of the United States
and the states in which they operate. The laws and regulations are primarily for the benefit of clients. In all jurisdictions, the
applicable laws and regulations are subject to amendment by regulatory authorities. Generally, such authorities are vested with
relatively broad discretion to grant, renew and revoke licenses and approvals and to implement regulations. Licenses may be
denied or revoked for various reasons, including the violation of such regulations, conviction of crimes and the like. Other
possible sanctions which may be imposed for violation of regulations include suspension of individual employees, limitations
on engaging in a particular business for a specified period of time, censures and fines.
Monetary Policy and Economic Controls
We and the Bank are affected by the policies of regulatory authorities, including the Federal Reserve. An important function of
the Federal Reserve is to regulate the national supply of bank credit in order to stabilize prices. Among the instruments of
monetary policy used by the Federal Reserve to implement these objectives are open market operations in U.S. Government
securities and changes in the discount rate on bank borrowings. These instruments are used in varying degrees to influence
overall growth of bank loans, investments and deposits and may also affect interest rates charged on loans or paid for deposits.
The monetary policies of the Federal Reserve have had a significant effect on the operating results of commercial banks in the
past and are expected to do so in the future. In view of changing conditions in the national economy and in the various money
markets, as well as the effect of actions by monetary and fiscal authorities including the Federal Reserve, the effect on our, and
the Bank’s, future business and earnings cannot be predicted with accuracy.
Sources and Availability of Funds
The funds essential to our, and the Bank’s, business consist primarily of funds derived from customer deposits, loan
repayments, cash flows from our investment securities, securities sold under repurchase agreements, Federal Home Loan Bank
advances and subordinated notes. The availability of such funds is primarily dependent upon the economic policies of the
federal government, the economy in general and the general credit market for loans. Additional information about our funding
sources can be found under the heading “Liquidity and Capital Resources” in Item 7, Management’s Discussion and Analysis
of Financial Condition and Results of Operations, in this report.
Human Capital Resources
The Company’s employees are the key to its success and represent our greatest asset. The Company’s strategic approach to
human capital includes (1) attracting, developing and retaining a diverse and talented workforce, (2) providing opportunities for
learning, development and advancement within the Company, (3) offering a competitive suite of compensation and benefits, (4)
investing in the financial health of our employees, and (5) obtaining employee feedback. As of December 31, 2024, we
employed more than 2,200 people throughout all of our segments on a full-time equivalent basis. At December 31, 2024, 14
employees of the Bank served as officers of the Company in addition to their positions with the Bank.
To measure our employees’ overall satisfaction with their job and their experience working for the Company, we periodically
survey our employees, with the most recent survey completed at the end of 2023. The participation rate was over 90%, and the
survey results generally affirmed that our employees were satisfied with overall working conditions at the Company.
Through its Organizational Development department led by our Chief Experience Officer, the Company provides opportunities
for employees to engage in personalized learning and development experiences, including new employee orientation, role-based
training programs, technical and enterprise-wide systems trainings, mentoring programs, and leadership development. The
intent underlying these programs is to build individual capabilities while supporting the career aspirations of our employees and
meeting business objectives. These experiences are delivered through various learning channels including classroom, virtual,
on-the-job, and online training. The Company also supports its employees through external continuing education relevant to the
operations of the Company and encourages participation in professional organizations. In alignment with the Company’s vision,
mission, values and behaviors and in an effort to retain high performing employees, the Company conducts employee feedback
surveys regularly and seeks to engage, reward, and recognize employees through strategic programming and initiatives.
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In addition to professional development, the Company provides bank-paid and voluntary benefits to eligible employees. Several
of the benefits include wellness benefits to encourage healthier lifestyles and promote self-care. In addition to health, dental and
vision benefits, the Company provides paid parental leave for the birth, adoption or placement of a child through foster care.
We also pay employees for community service work (subject to a cap on the number of paid hours). We also have an employee
assistance program, which is a Bank-paid benefit available to all employees and immediate family members for mental health,
behavioral, stress management, and other personal care needs.
Available Information
We file and furnish annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC
filings are available to the public at the SEC’s website at www.sec.gov. Our Internet address is www.renasant.com, and the
Bank’s Internet address is www.renasantbank.com. We make available on the Company’s website, at the “SEC Filings” link,
free of charge, our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and
amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
ITEM 1A. RISK FACTORS
In addition to the other information contained in or incorporated by reference into this Form 10-K and the exhibits hereto, the
following risk factors should be considered carefully in evaluating our business. The risks disclosed below, either alone or in
combination, could materially adversely affect the business, financial condition or results of operations of the Company.
Risks Related to Our Industry
We are subject to lending risk.
There are inherent risks associated with our lending activities. These risks include, among other things, the impact of changes in
interest rates and changes in the economic conditions in the markets where we operate as well as those across the United States.
Increases in interest rates on loans and/or weakening economic conditions could adversely impact the ability of borrowers to
repay outstanding loans or the value of the collateral securing these loans.
As of December 31, 2024, approximately 71.52% of our loan portfolio consisted of C&I, construction and commercial real
estate loans. These types of loans are generally viewed as having more risk to our financial condition than other types of loans
due primarily to the large amounts loaned to individual borrowers. Because the loan portfolio contains a significant number of
C&I, construction and commercial real estate loans with relatively large balances, the deterioration of one or a few of these
loans could cause a significant increase in nonperforming loans. An increase in nonperforming loans could result in a net loss of
earnings from these loans, an increase in the provision for credit losses and an increase in loan charge-offs, all of which could
have a material adverse effect on our financial condition and results of operations.
Our allowance for credit losses may be insufficient, and we may be required to further increase our provision for credit losses.
Although we try to maintain diversification within our loan portfolio to minimize the effect of economic conditions within a
particular industry, management also maintains an allowance for credit losses, which is a reserve established through a
provision for credit losses on loans charged to expense, to absorb credit losses inherent in the entire loan portfolio. The credit
loss estimation process involves procedures to appropriately consider the unique characteristics of the Company’s loan portfolio
segments, and the results of those evaluations are utilized in the Company’s estimation of expected credit losses. Credit quality
monitoring procedures and indicators can include an assessment of problem loans, the types of loans, historical loss experience,
new lending products, emerging credit trends, changes in the size and character of loan categories and other factors, including
the Company’s risk rating system, regulatory guidance and economic conditions, such as the unemployment rate and GDP
growth, as well as trends in the market values of underlying collateral securing loans, all as determined based on input from
management, loan review staff and other sources. This evaluation is complex and inherently subjective, as it requires estimates
by management that are inherently uncertain and therefore susceptible to significant revision as more information becomes
available. In addition, our credit quality monitoring procedures may fail to detect credit risk issues within the loan portfolio if
important factors contributing to credit risk are not identified by management or given sufficient weight. There may be
significant changes in the allowance and provision for credit losses in future periods as the estimates used by management, and
assumptions underlying such estimates, are supplemented and adjusted in light of then-prevailing factors and forecasts.
Any deterioration of current and future economic conditions could cause us to experience higher than normal delinquencies and
credit losses. As a result, we may be required to make further increases in our provision for credit losses and to charge off
additional loans in the future, which could materially adversely affect our financial condition and results of operations.
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In addition, bank regulatory agencies periodically review the allowance for credit losses and may require an increase in the
provision for credit losses or the recognition of further loan charge-offs or downgrades, based on judgments different than those
of management. In addition, if charge-offs in future periods exceed the allowance for credit losses, we will incur additional
provision expense to increase the allowance for credit losses. Any increase in our provision for credit losses will result in a
decrease in net income and, possibly, capital and may have a material adverse effect on our financial condition and results of
operations. A discussion of the policies and procedures related to management’s process for determining the appropriate level
of the allowance for credit losses is set forth under the headings “Critical Accounting Policies and Estimates” and “Risk
Management – Credit Risk and Allowance for Credit Losses on Loans and Unfunded Commitments” in Item 7, Management’s
Discussion and Analysis of Financial Condition and Results of Operations, in this report.
We are subject to interest rate risk.
Our earnings and cash flows are largely dependent upon our net interest income. Net interest income is the difference between
interest earned on assets, such as loans and securities, and the cost of interest-bearing liabilities, such as deposits and borrowed
funds. Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions and
policies of various governmental and regulatory agencies and, in particular, the Federal Reserve. Changes in monetary policy
by the Federal Reserve, including changes in interest rates, could influence not only the interest we receive on loans and
securities and the interest we pay on deposits and borrowings, but such changes could also affect (1) our ability to originate
loans and generate deposits or access other sources of liquidity, which could reduce the amount of fee income generated, and
(2) the fair value of our financial assets and liabilities. Any substantial unexpected or prolonged change in interest rates could
have a material adverse effect on our businesses, financial conditions and results of operations.
Our financial results are constantly exposed to market risk.
Market risk refers to the probability of variations in net interest income or the fair value of our assets and liabilities due to
changes in interest rates, among other things. The primary source of market risk to us is the impact of changes in interest rates
on net interest income. We are subject to market risk because of the following factors:
—
Assets and liabilities mature or reprice at different times. For example, if assets reprice more slowly than liabilities and
interest rates are generally rising, earnings may decline.
—
Assets and liabilities reprice at the same time but by different amounts. For example, when interest rates are generally
rising, we may increase rates charged on loans by an amount that is less than the general increase in market interest rates
because of intense pricing competition, while similarly intense pricing competition for deposits dictates that we raise our
deposit rates in line with the general increase in market rates. Also, risk occurs when assets and liabilities have similar
repricing frequencies but are tied to different market interest rate indices that may not move in tandem.
—
Short-term and long-term market interest rates change by different amounts, i.e., the shape of the yield curve may affect
new loan yields and funding costs differently.
—
The remaining maturity of various assets and liabilities shorten or lengthen as interest rates change. For example, if long-
term mortgage interest rates decline sharply, mortgage-backed securities held in our securities portfolio may prepay
significantly earlier than anticipated, which could reduce portfolio income. If prepayment rates on our loans increase, we
would be required to amortize net premiums into income over a shorter period of time, thereby reducing the
corresponding asset yield and net interest income.
—
Interest rates have an indirect impact on loan demand, credit losses, loan origination volume, the value of financial assets
and financial liabilities, gains and losses on sales of securities and loans, the value of mortgage servicing rights and other
sources of earnings.
Although management believes it has implemented effective asset and liability management strategies to reduce market risk on
the results of our operations, these strategies are based on assumptions that may be incorrect or not comprehensive. Any
substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial
condition and results of operations.
Volatility in interest rates may also result in disintermediation, which is the flow of funds away from financial institutions into
direct investments, such as U.S. Government and Agency securities and other investment vehicles, including mutual funds,
which generally pay higher rates of return than financial institutions because of the absence of federal deposit insurance
premiums and reserve requirements. The interest rate increases in 2022 and 2023 were followed by significant outflows of
funds from financial institutions (including the Company) into mutual funds and other investment vehicles, increasing the
competition for, and cost of, deposits. Disintermediation could also result in material adverse effects on our financial condition
and results of operations.
16
A discussion of our policies and procedures used to identify, assess and manage certain interest rate risk is set forth under the
heading “Risk Management – Interest Rate Risk” in Item 7, Management’s Discussion and Analysis of Financial Condition and
Results of Operations, in this report.
Inflation can have an impact on our business and our customers.
Inflation risk is the risk that the value of assets or income from investments will be less in the future as inflation decreases the
value of money. As noted above, over the course of 2022 and 2023 the Federal Reserve raised interest rates in an effort to fight
inflationary conditions. Although the rate of inflation declined in 2024, it remains elevated above the Federal Reserve’s goal of
inflation averaging 2% over time. While this elevated level of inflation persists, the value of our investment securities,
particularly those with longer maturities, decreases, although this effect can be less pronounced for floating rate instruments.
Additionally, inflation increases the cost of goods and services we use in our daily operations which increases our noninterest
expense. Furthermore, our customers are impacted by inflation and the rising costs of goods and services used in their
households and businesses, which could have a negative impact on the deposits they maintain with us or their ability to repay
their loans from us.
Liquidity needs could adversely affect our results of operations and financial condition.
Maintaining adequate liquidity is crucial to the operation of our business. We need sufficient liquidity to meet customer loan
requests, deposit maturities and withdrawals and other cash commitments arising in both the ordinary course of business and in
other unpredictable circumstances. We rely on dividends from the Bank as our primary source of funds. The primary source of
the Bank’s funds are customer deposits, loan repayments, proceeds from our investment securities and borrowings. While
scheduled loan repayments are a relatively stable source of funds, they are subject to the ability of borrowers to repay the loans.
The ability of borrowers to repay loans can be adversely affected by a number of factors, including changes in economic
conditions, adverse trends or events affecting business industry groups, reductions in real estate values or markets, business
closings or lay-offs, pandemics, inclement weather, natural disasters and international instability.
Additionally, deposit levels may be affected by a number of factors, including interest rates paid by competitors, general
interest rate levels, returns available to customers on alternative investments and general economic conditions. For example,
following the March 2023 bank failures, many depositors became concerned about the soundness of other financial institutions
and moved deposits to larger financial institutions or to other investment vehicles. Accordingly, we may be required from time
to time to rely on secondary sources of liquidity to meet withdrawal demands or otherwise fund operations or to support
growth. These secondary sources, which generally have a higher cost than deposits, include Federal Home Loan Bank advances
and federal funds lines of credit from correspondent banks.
If we are unable to maintain adequate liquidity, we may attempt to raise additional capital in the equity or debt markets, the
success of which will depend on market conditions outside our control and on our financial performance.
If we are unable to meet our liquidity needs through any of the aforementioned sources, whether at all or at the time or the cost
that we anticipate, we may be required to slow or discontinue loan growth, capital expenditures or other investments or
liquidate assets.
We depend on the accuracy and completeness of information furnished by others about customers and counterparties.
In deciding whether to extend credit or enter into other transactions, we often rely on information furnished by or on behalf of
customers and counterparties, including financial statements, credit reports, other financial information and appraisals of the
value of collateral. We may also rely on representations of those customers, counterparties or other third parties, such as
independent auditors, as to the accuracy and completeness of that information. Reliance on inaccurate or misleading financial
statements, credit reports, other financial information or appraisals could have a material adverse effect on our business and, in
turn, our financial condition and results of operations.
Competition in our industry is intense and may adversely affect our profitability.
We face substantial competition in all areas of our operations from a variety of different competitors, many of which are larger
and have substantially greater resources than we have, including higher total assets and capitalization, greater access to capital
markets and a broader offering of financial services. Such competitors primarily include national, regional and community
banks within the various markets in which we operate. We also face competition from many other types of financial institutions
(including savings and loans and credit unions), finance companies, brokerage firms, insurance companies, factoring
companies, fintech companies and other financial intermediaries. Many of these competitors have fewer regulatory constraints
and may have lower cost structures than the Company.
17
Our ability to compete successfully depends on a number of factors, including, among other things:
•
the ability to develop, maintain and build upon long-term customer relationships based on top quality service, high
ethical standards and safe and sound assets;
•
the ability to expand our market position;
•
the scope, relevance and pricing of products and services offered to meet customer needs and demands;
•
consolidation in the banking industry;
•
the impact of legislative, regulatory and technological changes;
•
the rate at which we introduce new products and services relative to our competitors;
•
customer satisfaction with our level of service; and
•
industry and general economic trends.
Failure to perform in any of these areas could significantly weaken our competitive position, which could adversely affect our
growth and profitability, which, in turn, could have a material adverse effect on our financial condition and results of
operations.
We may be adversely affected by the soundness of other financial institutions and other third parties.
The bank failures in March 2023 resulted in general uncertainty regarding the adequacy of liquidity of the banking sector
generally and caused significant volatility in the stock prices of publicly-traded bank holding companies. These developments
appear to have prompted some customers to maintain their deposits with larger financial institutions. Competition for deposits
remains intense, and the cost of funding, both for deposits and other sources of liquidity, has increased. If the concerns
surrounding the banking sector persist, our businesses, financial condition and results of operations could be materially
adversely impacted.
In addition to the general negative impact on us that could result from the failure of other financial institutions, the failure or
financial distress of a financial institution with which we have a relationship could have a material adverse impact on us.
Entities within the financial services industry are interrelated as a result of trading, clearing, counterparty and other
relationships. We have exposure to many different industries and counterparties and from time to time execute transactions with
counterparties in the financial services industry, including commercial banks, brokers and dealers, investment banks and other
institutional clients. Many of these transactions expose us to credit risk in the event of a default by a counterparty or client. In
addition, our credit risk may be exacerbated when the collateral we hold cannot be realized upon or is liquidated at prices not
sufficient to recover the full amount of the credit due to us. Any such losses could have a material adverse effect on our
financial condition and results of operations.
We are subject to extensive government regulation, and such regulation could limit or restrict our activities and adversely
affect our earnings.
As a publicly-traded bank holding company and a state nonmember bank with assets in excess of $10 billion, we and the Bank,
respectively, are subject to extensive federal and state regulation and supervision, and we are committed to maintaining high
standards of legal and regulatory compliance. Banking regulations are primarily intended to protect depositors’ funds, federal
deposit insurance funds and the banking system as a whole, while consumer protection statutes are primarily focused on the fair
treatment and protection of the users of our lending and deposit services. The federal securities laws and regulations that we are
subject to are designed to protect the investing public and the integrity and efficiency of the securities markets. These
regulations affect our corporate governance, dividend policy, capital structure, lending and deposit practices, investment
practices, public disclosures and, ultimately, our financial performance and growth.
New regulations, as well as significant changes to existing regulations, relating to every facet of our operations, have been
proposed or may be proposed in the future. New laws and regulations, and changes to (or repeal of) existing laws, regulations or
policies, as well as changes in interpretation, implementation or enforcement of the foregoing, could affect us and/or the Bank
in substantial and unpredictable ways. Among other impacts, new or revised laws and regulations could limit the types of
financial services and products we may offer or fees we may charge, require extensive new disclosures in our public filings,
increase the ability of non-banks to offer competing financial services and products and/or otherwise result in continuing
uncertainty regarding legal and regulatory compliance matters. Any of the foregoing may, in turn, necessitate that we hire
additional employees, acquire or develop new software, implement new processes and procedures and otherwise incur
18
substantial additional costs as part of our efforts to comply with our legal and regulatory obligations. In addition, these efforts
may divert management time and attention from initiatives designed to grow the Company and the Bank and enhance our
earnings and profitability.
Under regulatory capital adequacy guidelines and other regulatory requirements, we and the Bank must meet guidelines that
include quantitative measures of assets, liabilities and certain off-balance sheet items, subject to qualitative judgments by
regulators about components, risk weightings and other factors. If we fail to meet these minimum capital guidelines and other
regulatory requirements, our financial condition would be materially and adversely affected. Our failure to maintain the status
of “well capitalized” under our regulatory framework could affect the confidence of our customers in us, thus compromising
our competitive position. In addition, failure to maintain the status of “well capitalized” under our regulatory framework, “well
managed” under regulatory examination procedures or “satisfactory” under the CRA could compromise our status as a bank
holding company and related eligibility for a streamlined review process for merger or acquisition proposals and would result in
higher deposit insurance premiums assessed by the FDIC.
We are also subject to various privacy, data protection and information security laws. Under the GLBA, we are subject to
limitations on our ability to share our customers’ nonpublic personal information with unaffiliated parties, and we are required
to provide certain disclosures to our customers about our data collection and security practices. Customers have the right to opt
out of our disclosure of their personal financial information to unaffiliated parties. We are also subject to state laws regulating
the privacy of individual’s private information, many of which are more restrictive, and have more severe sanctions for
noncompliance, than the GLBA. Finally, the GLBA requires us to develop, implement and maintain a written comprehensive
information security program containing appropriate safeguards for our customers’ nonpublic personal information. Our failure
to comply with privacy, data protection and information security laws and regulations could result in regulatory or
governmental investigations and/or fines, sanctions and other expenses which could have a material adverse effect on our
financial condition and results of operations.
In addition to the costs we incur in complying with our various legal and regulatory obligations, we may be found to have failed
to fully comply with applicable laws, regulations or policies. Any such failure could result in sanctions by regulatory agencies
and/or civil money penalties, which could have a material adverse effect on our business, financial condition and results of
operations. Although we have not yet been subject to any sanctions or penalties that have had a material impact on our business,
financial condition or results of operations, such material violations could occur, even though we have policies and procedures
designed to prevent such violations.
Higher FDIC deposit insurance premiums and assessments could adversely affect our financial condition.
The FDIC is required under the Dodd-Frank Act to maintain the Deposit Insurance Fund at a minimum reserve ratio of 1.35%.
The FDIC’s announced long-term goal is to maintain the reserve ratio at 2.00%. In October 2022, the FDIC raised the
assessment rate by two basis points, effective in the first quarter of 2023, which increase is intended to remain in effect until the
2.00% goal is reached. The FDIC reaffirmed this goal in November 2023. The FDIC may also charge special assessments, such
as the special assessment the FDIC charged certain financial institutions, including the Bank, in December 2023 based on their
size and amount of uninsured deposits. Increases in deposit insurance assessment rates as well as any special assessments that
the FDIC may charge us in the future may adversely affect our financial condition and results of operations.
The Company’s financial condition and results of operations contain estimates and assumptions made by management that
could be inaccurate.
Accounting estimates and processes are fundamental to how we record and report our financial condition and results of
operations. Accounting principles generally accepted in the United States (“GAAP”) require our management to make estimates
about future events that are inherently uncertain. We use models and other forecasting processes to make these estimates. In
doing so, management must choose between many alternatives, all of which may be reasonable under prevailing circumstances.
As a result, these models and other forecasting processes may reflect assumptions that ultimately prove to be inaccurate,
particularly in times of market stress or other unforeseen circumstances. Even if these assumptions are adequate, the models
may include flaws in their design or their implementation, including flaws caused by failures in controls, data management,
human error or from the reliance on technology. Because of the uncertainty and subjectivity surrounding management’s
judgments and the estimates pertaining to these matters, the Company cannot guarantee that it will not be required to adjust
accounting policies or restate prior period financial statements. Any such failure in our analytical or forecasting models could
have a material adverse effect on our business, financial condition and results of operations.
We are subject to environmental liability risk associated with lending activities.
A significant portion of our loan portfolio is secured by real property. During the ordinary course of business, we may foreclose
on and take title to properties securing certain loans. In doing so, there is a risk that hazardous or toxic substances could be
19
found on these properties. If hazardous or toxic substances are found, we may be liable for remediation costs, as well as for
personal injury and property damage. Environmental laws may require us to incur substantial expenses and may materially
reduce the affected property’s value or limit our ability to use or sell the affected property. The remediation costs and any other
financial liabilities associated with an environmental hazard could have a material adverse effect on our financial condition and
results of operations. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing
laws may increase our exposure to environmental liability. Although management has policies and procedures to perform an
environmental review before the loan is recorded and before initiating any foreclosure action on real property, these reviews
may not be sufficient to detect all potential environmental hazards.
Risks Related to Our Business
Our business may be adversely affected by current economic conditions in general and specifically in the markets in which we
operate.
General business and economic conditions in the United States and abroad can materially affect our business and operations and
the businesses and operations of our customers. A weak U.S. economy is likely to cause uncertainty about the federal fiscal
policymaking process, the medium and long-term fiscal outlook of the federal government and future tax rates. In addition,
economic and other conditions in foreign countries could affect the stability of global financial markets and adversely impact
global supply chains, which could hinder U.S. economic growth.
Weak economic conditions are characterized by deflation, fluctuations in debt and equity capital markets, a lack of liquidity
and/or depressed prices in the secondary market for mortgage loans, increased delinquencies on mortgage, consumer and C&I
loans, residential and commercial real estate price declines and lower home sales and commercial activity. All of these factors
are detrimental to our business, and the interplay between these factors can be complex and unpredictable. Our business is also
significantly affected by monetary and related policies of the U.S. federal government and its agencies. Changes in any of these
policies are influenced by macroeconomic conditions and other factors that are beyond our control. Adverse economic
conditions and government policy responses to such conditions could have a material adverse effect on the businesses and
operations of our customers and in turn on our business, financial condition, results of operations and growth prospects.
More particularly, much of our business development and marketing strategy is directed toward fulfilling the banking and
financial services needs of small to medium size businesses. Such businesses generally have fewer financial resources in terms
of capital or borrowing capacity than larger entities. If general economic conditions negatively impact the markets in which we
operate and these businesses are adversely affected, our financial condition and results of operations may be negatively
affected.
We have a high concentration of loans secured by real estate.
At December 31, 2024, approximately 83.96% of our loan portfolio had real estate as a primary or secondary component of the
collateral securing the loan. The real estate provides an alternate source of repayment in the event of a default by the borrower.
Any adverse change in real estate values in our markets could significantly impair the value of the particular collateral securing
our loans and our ability to sell the collateral upon foreclosure for an amount necessary to satisfy the borrower’s obligations to
us. Furthermore, in a declining real estate market, we often will need to further increase our allowance for credit losses to
address the deterioration in the value of the real estate securing our loans. Any of the foregoing could have a material adverse
effect on our financial condition and results of operations.
We have significant credit exposure in commercial real estate.
In addition to the general risks associated with our lending activities described above, CRE loans are subject to additional risks.
These loans depend on cash flows from the property to service the debt. Cash flows, either in the form of rental income or the
proceeds from sales of commercial real estate, may be affected significantly by general economic conditions. A general
downturn in the local economy where the property is located, or a decline in occupancy rates in particular, could increase the
likelihood of default. An increase in defaults in our CRE loan portfolio could have a material adverse effect on our financial
condition and results of operations. As discussed under the heading “Supervision and Regulation” in Item 1, Business, above,
the federal banking agencies promulgated guidance regarding when an institution will be deemed to potentially have significant
CRE concentration risk exposure, as indicated by the results of the 100/300 Test. Although the 100/300 Test is not a limit on
our lending activity, if any future results of a 100/300 Test evaluation show us to have a potential CRE concentration risk, we
may elect, or be required by our regulators, to adopt additional risk management practices or other limits on our activities,
which could have a material adverse effect on our financial condition and results of operations.
20
We rely extensively on a number of vendors.
We rely on numerous vendors and other third party service providers (which we refer to collectively as “vendors”) to assist us
in providing our lending, deposit and other financial services as well as the back-office functions that support our day-to-day
operations. We are therefore subject to the risks associated with a vendor’s failure to provide the agreed-upon products or
services, or its delivery of products or services at a level or in a manner that does not meet expectations. Deficient performance
may result from the vendor’s failure to meet its service standards under the contract (due to, among other reasons, insufficient
support for its existing products and services or a change in its strategic focus) or simply because the vendor’s products or
services do not include the functionality, convenience or adaptability necessary to compete effectively or efficiently with other
providers of the financial services we offer. Although we rigorously evaluate vendors before entering into contracts, we do not
control a vendor’s performance of its contractual obligations or its actions with respect thereto. A vendor’s failure to meet its
contractual obligations or otherwise perform as expected could be disruptive to our operations, which could have a material
adverse impact on our business, financial condition and results of operations. Further, replacing service providers often entails
significant delay and expense.
Additionally, some external vendors require access to the Company’s information systems to provide their services. We have
identified these vendors as a source of information security risk, and, accordingly, our information security team monitors such
vendors in accordance with Company policies. While the Company has implemented an active program to oversee the
information security risk posed by vendors, there can be no assurance that the Company will not experience material security
breaches associated with vendors (or service providers to our vendors). The Company’s policies related to the monitoring of
vendors and other third parties are discussed in detail below in Item IC, Cybersecurity, under the heading “Risk Management
and Strategy - Diligence of Vendors and Other Third Parties.”
Fraud is a major, and increasing, operational risk for us and all banks.
In recent years, fraud risk has emerged as a significant risk for all financial institutions, including us. Deposit fraud (such as
check forging, check kiting and wire fraud) and loan fraud continue to be major sources of fraud attempts and actual loss. Fraud
directed against our employees, vendors and customers – generally using deception to initiate unauthorized funds transfers –
has emerged as another major source of fraud loss. The methods used by illicit actors to perpetrate fraud, and our efforts to
combat it, constantly evolve as technology advances. In addition to cybersecurity risk (discussed below), emerging
technologies, including rapid developments in the capabilities and applications of artificial intelligence, have made it easier for
illicit actors to obtain and use customer personal information, mimic communications to or from customers, mimic signatures,
and create false, or “synthetic,” instructions, documents and media that appear genuine.
Our efforts to combat fraud are both preventive (anticipating fraudulent activity, educating employees and customers) and
responsive (detecting, halting and remediating fraud attempts). We have established policies and procedures to identify, monitor
and mitigate fraud-related risks, and we continue to invest in systems, resources, and controls to better detect and prevent fraud.
However, there are inherent limitations to our ability to anticipate, mitigate and remediate all fraud-related risks, particularly in
light of the pace of technological advances. Some level of fraud loss is unavoidable, and the risk of a major loss cannot be
eliminated. Accordingly, we could suffer unexpected losses, incur additional expenses to correct failures in our systems, and be
subject to potential claims from third parties and government agencies. Any of these consequences could adversely affect our
reputation, business, financial condition, and results of operations.
A failure or breach of our communications and information security systems, or those of our vendors and customers, and
cybersecurity incidents, including cyber-attacks, could disrupt our business, result in the disclosure or misuse of confidential or
proprietary information, damage our reputation and create significant financial and legal exposure for us.
The Company, our vendors (inclusive of vendors to our vendors) and our customers rely heavily on communications and
information security systems to securely and reliably process, record, transmit and monitor confidential and other information
through our and their computer systems and networks. Our operational systems, including, among other things, deposit and loan
servicing, online and mobile banking, wealth management, accounting and data processing, could be materially adversely
impacted by a failure, interruption or breach in the security or integrity of any of these systems, including systems under the
control of vendors. As a financial institution, the Company is subject to ongoing threats to its systems, software, networks and
other technology that originate from various sources, including our employees, cyber-criminals, hacktivists, groups linked to
terrorist organizations or hostile countries, and third parties aiming to disrupt financial institutions more generally. Information
security threats include computer hacking involving the introduction of computer viruses or malicious code known as
“malware” into the Company’s systems, cyber-attacks, identity theft, electronic fraudulent activity and attempted theft of
financial assets. These threats, which are designed to obtain unauthorized access to confidential information belonging to the
Company or its customers, manipulate or destroy data or systems, disrupt service on the Company’s systems, or steal money
through the use of “ransomware” or unauthorized funds transfers, are increasing in frequency and sophistication and are often
21
facilitated by artificial intelligence tools. In addition, our systems are threatened by unpredictable events such as terrorist
attacks, power outages or tornadoes or other natural disasters. The Company may not be able to effectively implement, develop
and manage critical systems and information technology infrastructure to facilitate strategic business initiatives, which could
impair our ability to achieve financial, operational, compliance and strategic objectives and negatively affect our business,
financial condition or results of operations.
We have invested a significant amount of time and expense in security infrastructure investments and the development of
policies and procedures governing our operations as well as in employee training and the monitoring of our vendors, in our
efforts to preserve the security, integrity and continuity of our operations from the aforementioned threats. As described in the
next paragraph, however, we have experienced security breaches and cyber-attacks, none of which have materially impacted the
Company. Importantly, though, due to the difficulty in anticipating, detecting and recognizing threats to the Company’s
systems, coupled with the fact that we do not have control over the information security systems of customers, vendors and
third parties, we can provide no assurances that our systems, or our vendor’s or customer’s systems, will not experience in the
future any material failures, interruptions or security breaches of our communications and information securities systems or
that, if any such failures, interruptions or breaches occur, they will be addressed in a timely and adequate manner. A successful
penetration or circumvention of our security systems or other significant disruption of our information systems or those of
customers, vendors or other third parties, including as a result of cyber-attacks, could (i) significantly and adversely impact our
operations or those of our customers by disrupting our networks and systems; (ii) result in the unauthorized access to, and
destruction, loss, theft, misappropriation or release of confidential, sensitive or otherwise valuable information and the use of
such information to process fraudulent transactions; (iii) result in a violation of applicable privacy, data breach and other laws,
subjecting the Company to additional regulatory scrutiny and exposure to civil litigation, criminal penalties, governmental fines
or sanctions or financial liability; (iv) require significant management attention and resources to respond, remediate or remedy
the damages that result; and/or (v) harm the reputation of or cause a loss of confidence in, the Company, in turn resulting in a
decrease in the number of customers that choose to do business with the Company. Further, the extent of a particular failure,
interruption or security breach of our communications and information securities systems, and the steps that the Company may
need to take to investigate and remedy the matter, may not be immediately clear, and it may take a significant amount of time
before such an investigation or determination, judicial or otherwise, can be completed. The occurrence of any of the foregoing
could have a material adverse effect on our business, financial condition, results of operations or profitability. This in turn could
result in financial losses to us or our customers, lasting damage to our reputation, the violation of privacy or other laws and
significant litigation risk, all of which could have a material adverse effect on our financial condition and results of operations.
The Company has experienced security breaches and cyber-attacks in the past, although to date none of these attacks has
materially impacted the Company. For example, beginning in May 2023, the Company began receiving notices from a number
of its vendors regarding the data breach related to the MOVEit Transfer software suffered by the vendor or a vendor to such
vendor (the Company itself did not use the software). The data breach experienced by these vendors involved the names,
account numbers, Social Security numbers and other nonpublic personal information of a relatively small number of our
customers. For each incident, the Company caused notices of the data breach to be delivered to impacted clients and notified
federal and state regulatory authorities about the incident. The relevant vendors also offered complementary credit monitoring
services to consumer customers. The Company has also heightened its monitoring of the vendors’ efforts to strengthen their
information security infrastructure and prevent any further unauthorized access to its systems. Nonetheless, it is inevitable that
additional attacks will occur in the future, which may result in security breaches. Future security breaches could result in serious
and harmful consequences for the Company or its clients and customers.
Our risk management framework may not be effective in mitigating risk and loss to us.
We are subject to numerous risks, including lending risk, interest rate risk, liquidity risk, market risk, information security risk
and model risk, among other risks encountered in the ordinary course of our operations. We have implemented processes and
procedures designed to identify, measure, monitor and mitigate these risks. However, all risk management frameworks are
inherently limited, for a number of reasons. First, we may not have identified all material risks affecting our operations. Next,
our current procedures may not anticipate future development of currently unanticipated or unknown risks. Also, we may have
underestimated the impact of known risks or overestimated the effectiveness of the policies and procedures we have
implemented to mitigate these risks. Increases in the scope and complexity of our operations and our reliance on vendors,
among other things, have increased the level of risk that we must manage. Accordingly, we could suffer losses as a result of our
failure to properly anticipate and manage these risks.
Our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth
effectively.
We have grown our business through the acquisition of entire financial institutions and non-bank commercial finance
22
companies and through de novo branching. We intend to continue pursuing this growth strategy for the foreseeable future,
including our proposed merger with The First. Our prospects must be considered in light of the risks, expenses and difficulties
frequently encountered by companies when expanding their franchise, including the following:
Management of Growth. We may be unable to successfully:
•
maintain loan quality in the context of significant loan growth;
•
maintain adequate management personnel and systems to oversee such growth;
•
maintain adequate internal audit, loan review and compliance functions; and
•
implement additional policies, procedures and operating systems required to support such growth.
Operating Results. Existing offices or future offices may not maintain or achieve deposit levels, loan balances or other
operating results necessary to avoid losses or produce profits in an efficient manner. Our growth strategy necessarily entails
growth in overhead expenses as we add new offices and staff. Our historical results may not be indicative of future results or
results that may be achieved if we increase the number of our branch offices. Should any new location be unprofitable or
marginally profitable, or should existing locations experience a decline in profitability or incur losses, the adverse effect on our
results of operations and financial condition could be more significant than would be the case for a larger company.
Expansion into New Markets. Much of our recent growth has been focused in the highly-competitive metropolitan areas within
our footprint. In these growth markets we face competition from a wide array of financial institutions and commercial finance
companies, including much larger, well-established companies.
Regulatory and Economic Factors. Our growth and expansion plans may be adversely affected by a number of regulatory and
economic developments or other events. Failure to obtain, or a delay in obtaining, required regulatory approvals, changes in
laws and regulations or other regulatory developments and changes in prevailing economic conditions or other unanticipated
events may prevent or adversely affect our continued growth and expansion. Such factors may cause us to alter our growth and
expansion plans or slow or halt the growth and expansion process, which may prevent us from entering certain target markets or
allow competitors to gain or retain market share in our existing or expected markets.
Failure to successfully address these issues could have a material adverse effect on our financial condition and results of
operations and could adversely affect our ability to successfully implement our business strategy. Also, if our growth occurs
more slowly than anticipated or declines, our operating results could be materially adversely affected.
We may fail to realize the anticipated benefits of our acquisitions.
The success of our acquisitions, including our proposed merger with The First, depends on, among other things, our ability to
realize anticipated cost savings and integrate the acquired assets and operations in a manner that permits growth opportunities
and does not materially disrupt our existing customer relationships or result in decreased revenues resulting from any loss of
customers. If we are not able to successfully achieve these objectives, the anticipated benefits of the acquisition may not be
realized fully or at all or may take longer to realize than expected. Additionally, we make fair value estimates of certain assets
and liabilities in recording each acquisition. Actual values of these assets and liabilities could differ from our estimates, which
could result in our not achieving the anticipated benefits of the particular acquisition.
We cannot assure investors that our acquisitions will have positive results, including results relating to: correctly assessing the
asset quality of the assets acquired; the total cost of integration, including management attention and resources; the time
required to complete the integration successfully; the amount of longer-term cost savings; being able to profitably deploy funds
acquired in the transaction; retaining the existing client relationships; or the overall performance of the combined business.
Our future growth and profitability depend, in part, on our ability to successfully manage the combined operations. Integration
of an acquired business can be complex and costly, and we may encounter a number of difficulties, such as:
•
deposit attrition, customer loss and revenue loss;
•
the loss of key employees;
•
the disruption of our operations and business;
•
our inability to maintain and increase competitive presence;
•
possible inconsistencies in standards, control procedures and policies;
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•
unexpected problems with costs, operations, personnel, technology and credit; and/or
•
general market and economic conditions or governmental actions affecting the financial industry.
Additionally, general market and economic conditions or governmental actions affecting the financial industry generally may
inhibit our successful integration of the operations acquired.
We may continue to experience increased credit costs or need to take additional markdowns and make additional provisions to
the allowance for credit losses on loans. Any of these actions could adversely affect our financial condition and results of
operations in the future. In addition, the attention and effort devoted to the integration of an acquired business may divert
management’s attention from other important issues and could harm our business.
We may face risks with respect to future acquisitions.
When we attempt to expand our business through mergers and acquisitions (including FDIC-assisted transactions), we seek
targets that are culturally similar to us, have experienced management and possess either significant market presence or have
potential for improved profitability through economies of scale or expanded services or, in the case of FDIC-assisted
transactions, on account of the loss share arrangements with the FDIC associated with such transactions. In addition to the
general risks associated with our growth plans and the particular risks associated with FDIC-assisted transactions, both of which
are highlighted above, in general acquiring other banks, businesses or branches involves various risks commonly associated
with acquisitions, including, among other things:
•
the time and costs associated with identifying and evaluating potential acquisition and merger targets and negotiating a
transaction;
•
inaccuracies in the estimates and judgments used to evaluate credit, operations, management and market risks with
respect to the target institution;
•
the time and costs of evaluating new markets, hiring experienced local management and opening new bank locations,
and the time lags between these activities and the generation of sufficient assets and deposits to support the costs of the
expansion;
•
our ability to finance an acquisition and possible dilution to our existing shareholders;
•
the incurrence of an impairment of goodwill associated with an acquisition and adverse effects on our results of
operations;
•
entry into new markets where we lack experience; and
•
risks associated with integrating the operations and personnel of acquired businesses.
We expect to continue to evaluate merger and acquisition opportunities (including FDIC-assisted transactions) that are
presented to us and conduct due diligence activities related to possible transactions with other financial institutions and other
companies. As a result, merger or acquisition discussions and, in some cases, negotiations may take place and future mergers or
acquisitions involving cash, debt or equity securities may occur at any time. Historically, acquisitions of non-failed financial
institutions and other companies involve the payment of a premium over book and market values, and, therefore, some dilution
of our book value and net income per common share may occur in connection with any future transaction. Failure to realize the
expected revenue increases, cost savings, increases in geographic or product presence and/or other projected benefits from an
acquisition could have a material adverse effect on our financial condition and results of operations.
Risks Associated With Our Common Stock
Our ability to declare and pay dividends is limited by law, and we may be unable to pay future dividends.
We are a separate and distinct legal entity from the Bank, and we receive substantially all of our revenue from dividends from
the Bank. These dividends are the principal source of funds to pay dividends on our common stock and interest and principal on
our debt. Various federal and/or state laws and regulations limit the amount of dividends that the Bank may pay to us. In the
event the Bank is unable to pay dividends to us, we may not be able to service our debt, pay our obligations or pay dividends on
our common stock. The inability to receive dividends from the Bank could have a material adverse effect on our business,
financial condition and results of operations. The information under Note 19, “Restrictions on Cash, Securities, Bank
Dividends, Loans or Advances,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and
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Supplementary Data, in this report provides a detailed discussion about the restrictions governing the Bank’s ability to transfer
funds to us.
The trading volume in our common stock is less than that of other bank holding companies.
Although our common stock is listed for trading on the New York Stock Exchange, the average daily trading volume in our
common stock is generally less than that of many of our competitors and other bank holding companies that are publicly-traded
companies. For the 60 days ended February 18, 2025, the average daily trading volume for Renasant common stock was
533,278 shares per day. A public trading market having the desired characteristics of depth, liquidity and orderliness depends
on the presence in the marketplace of willing buyers and sellers of our common stock at any given time. This presence depends
on the individual decisions of investors and general economic and market conditions over which we have no control.
Significant sales of our common stock, or the expectation of these sales, could cause volatility in the price of our common
stock.
Holders of our junior subordinated debentures have rights that are senior to those of our common shareholders.
We have supported a portion of our growth through the issuance of trust preferred securities from special purpose trusts and
accompanying junior subordinated debentures. Also, in connection with our acquisitions of other financial institutions, we have
assumed junior subordinated debentures. Payments of the principal and interest on the trust preferred securities of these trusts
are conditionally guaranteed by us. Further, the junior subordinated debentures we issued to the trusts are senior to our shares of
common stock. As a result, we must make payments on the junior subordinated debentures before any dividends can be paid on
our common stock and, in the event of our bankruptcy, dissolution or liquidation, the holders of the junior subordinated
debentures must be satisfied before any distributions can be made on our common stock (such dividend restrictions do not
apply to our outstanding subordinated notes). We have the right to defer distributions on our junior subordinated debentures
(and the related trust preferred securities) for up to five years, during which time no dividends may be paid on our common
stock.
An investment in our common stock is not an insured deposit.
Our common stock is not a bank deposit and, therefore, is not insured against loss by the FDIC, any deposit insurance fund or
by any other public or private entity. Investment in our common stock is inherently risky and is subject to the same market
forces that affect the price of common stock in any company. As a result, an investor may lose some or all of its investment in
our common stock.
Our Articles of Incorporation and Bylaws, as well as certain banking laws, could decrease our chances of being acquired even
if our acquisition is in our shareholders’ best interests.
Provisions of our Articles of Incorporation and Bylaws and federal banking laws, including regulatory approval requirements,
could make it more difficult for a third party to acquire us, even if doing so would be perceived to be beneficial to our
shareholders. The combination of these provisions impedes a non-negotiated merger or other business combination, which, in
turn, could adversely affect the market price of our common stock.
Our issuance of preferred stock could adversely affect holders of our common stock and discourage a takeover.
Our shareholders authorized the Board of Directors to issue up to 5,000,000 shares of preferred stock without any further action
on the part of our shareholders. Our Board of Directors also has the power, without shareholder approval, to set the terms of any
series of preferred stock that may be issued, including voting rights, dividend rights, preferences over our common stock with
respect to dividends or in the event of a dissolution, liquidation or winding up and other terms. In the event that we issue
preferred stock in the future that has preference over our common stock with respect to payment of dividends or upon our
liquidation, dissolution or winding up, or if we issue preferred stock with voting rights that dilute the voting power of our
common stock, the rights of the holders of our common stock or the market price of our common stock could be materially and
adversely affected. In addition, the ability of our Board of Directors to issue shares of preferred stock without any action on the
part of our shareholders may impede a takeover of us and prevent a transaction perceived to be favorable to our shareholders.
Shares eligible for future sale could have a dilutive effect.
Shares of our common stock eligible for future sale, including those that may be issued in any other private or public offering of
our common stock for cash or as incentives under equity incentive plans, could have a dilutive effect on the market for our
common stock and could adversely affect market prices. As of February 18, 2025, there were 150,000,000 shares of our
common stock authorized, of which 63,657,444 shares were outstanding, and we anticipate issuing approximately 31.8 million
shares in connection with the completion of our merger with The First.
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Risks Relating to the Merger with The First
Failure to complete our merger with The First could negatively affect our share price, future business and financial results.
Although we anticipate closing the merger with The First in the first half of 2025, we cannot guarantee when, or whether, the
merger will be completed. The completion of the merger is subject to a number of customary conditions which must be fulfilled
in order to complete the merger.
If the merger with The First is not completed for any reason, our ongoing business and financial results may be adversely
affected and we will be subject to several risks, including:
•
having to pay significant transaction costs without realizing any of the anticipated benefits of completing the merger;
•
failing to pursue other beneficial opportunities due to the focus of our management on the merger, without realizing
any of the anticipated benefits of completing the merger;
•
declines in our share price to the extent that the current market prices reflect an assumption by the market that the
merger will be completed; and
•
becoming subject to litigation related to any failure to complete the merger.
Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently
anticipated, cannot be met, or that could have an adverse effect on the combined company following the consummation of the
merger with The First.
Before the merger with The First may be completed, various approvals, consents and/or non-objections must be obtained from
bank regulatory authorities, including the Federal Reserve, FDIC, and the DBCF. Additionally, the U.S. Department of Justice
has between 15 and 30 days following approval of the merger by the Federal Reserve and FDIC, respectively, to challenge the
approval on antitrust grounds.
In determining whether to grant their approvals, the regulatory agencies consider a variety of factors, including the regulatory
standing of each party. These approvals could be delayed or not obtained at all, including due to an adverse development in
either party’s regulatory standing or in any other factors considered by regulators in granting such approvals; governmental,
political or community group inquiries, investigations or opposition; or changes in legislation or the political or regulatory
environment generally.
The approvals that are granted may impose terms and conditions, limitations, obligations or costs, or place restrictions on the
conduct of the combined company’s business or require changes to the terms of the merger. There can be no assurance that
regulators will not impose any such conditions, limitations, obligations or restrictions and that such conditions, limitations,
obligations or restrictions will not have the effect of delaying the completion of the merger, imposing additional material costs
on or materially limiting the revenues of the combined company following the merger or otherwise reduce the anticipated
benefits of the merger if the merger were consummated successfully within the expected timeframe. In addition, there can be no
assurance that any such conditions, terms, obligations or restrictions will not result in the delay or abandonment of the merger.
The completion of the merger is conditioned on the receipt of the requisite regulatory approvals without the imposition of any
materially financially burdensome regulatory condition and the expiration of all statutory waiting periods. Additionally, the
completion of the merger is conditioned on the absence of certain laws, orders, injunctions or decrees issued by any court or
governmental entity of competent jurisdiction that would prevent, prohibit or make illegal the completion of the merger or any
of the other transactions contemplated by the agreement governing the merger with The First.
Our ongoing business and financial results may be adversely affected by a delay in receipt of necessary regulatory approvals, a
denial of a regulatory application, or the imposition of a burdensome regulatory condition.
We and The First will be subject to various uncertainties while the merger is pending that could adversely affect our financial
results or the anticipated benefits of the merger.
Uncertainty about the effect of the merger with The First on counterparties to contracts, employees and other parties may have
an adverse effect on us or the anticipated benefits of the merger. These uncertainties could cause contract counterparties and
others who deal with us or The First to seek to change existing business relationships with us or The First, and may impair our
and The First’s ability to attract, retain and motivate key personnel until the Merger is completed and for a period of time
thereafter. Employee retention and recruitment may be particularly challenging prior to completion of the Merger, as our
employees and prospective employees, and the employees and prospective employees of The First, may experience uncertainty
about their future roles with us following the merger.
26
The First may have liabilities that are not known to us.
In connection with the merger with The First, we will assume all of The First’s liabilities by operation of law. There may be
liabilities that we failed or were unable to discover in the course of performing due diligence investigations into The First, or we
may not have correctly assessed the significance of certain liabilities of The First identified in the course of our due diligence.
Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business, financial condition
and results of operations.
The merger with The First may be completed on different terms from those contained in the merger agreement.
Prior to the completion of the merger with The First, we and The First may, by mutual agreement, amend or alter the terms of
the agreement governing the merger, including with respect to, among other things, the merger consideration or any covenants
or agreements with respect to the parties’ respective operations during the pendency of the merger. Any such amendments or
alterations may have negative consequences to us.
Risks Relating to the Combined Company’s Business Following the Merger with The First
The market price of the common stock of the combined company after the merger with The First may be affected by factors
different from those currently affecting the shares of Renasant common stock.
Upon the completion of the merger with The First, Renasant shareholders and The First shareholders will become shareholders
of the combined company. Renasant’s business differs from that of The First, and, accordingly, the results of operations of the
combined company and the market price of the combined company’s shares of common stock may be affected by factors
different from those currently affecting the independent results of operations of each of The First and Renasant.
Sales of substantial amounts of Renasant common stock in the open market by former shareholders of The First could depress
Renasant’s stock price.
Shares of Renasant common stock that are issued to The First shareholders in the merger will be freely tradable without
restrictions or further registration under the Securities Act of 1933, as amended. As noted above, approximately 31.8 million
shares of Renasant common stock in connection with the merger. If the merger is completed and if The First’s former
shareholders sell substantial amounts of Renasant common stock in the public market following completion of the merger, the
market price of Renasant common stock may decrease. These sales might also make it more difficult for Renasant to sell equity
or equity-related securities at a time and price that it otherwise would deem appropriate.
We expect to incur substantial transaction costs in connection with the merger with The First.
We have incurred, and we expect to continue to incur, a significant amount of non-recurring expenses in connection with the
merger with The First, including legal, accounting, consulting and other expenses. In general, these expenses are payable by us
whether or not the merger is completed. Additional unanticipated costs may be incurred following consummation of the merger
in the course of the integration of our business and the business of The First. We cannot be certain that the elimination of
duplicative costs or the realization of other efficiencies related to the integration of the two businesses will offset the transaction
and integration costs in the near term, or at all..
The merger with The First will result in changes to the board of directors of the combined company and the surviving bank.
Upon completion of the merger, the composition of the combined company boards of directors will be different than the current
Company and Bank boards of directors. The Company board of directors and the Bank board of directors will consist of: (1) the
current members of the Company board of directors and four current members of The First board of directors and (2) the
current members of the Bank board of directors and six current members of The First Bank board of directors, respectively.
This new composition of the combined company boards of directors may affect the future decisions of the combined company.
The unaudited pro forma financial information included as an exhibit to our Current Report on Form 8-K filed on July 29,
2024, is presented for illustrative purposes only and does not purport to be indicative of our financial condition or results of
operations following the completion of the merger with The First.
The unaudited pro forma financial information included as an exhibit to our Current Report on Form 8-K filed on July 29, 2024,
is presented for illustrative purposes only, is based on various adjustments, assumptions and preliminary estimates and may not
be an indication of our financial condition or results of operations following the consummation of the merger with The First.
Our actual financial condition and results of operations following the consummation of the merger may not be consistent with,
or evident from, the pro forma financial statements. In addition, the assumptions used in preparing the pro forma financial
information may not prove to be accurate, and other factors may affect our financial condition or results of operations following
27
the consummation of the merger. Our potential for future business success and operating profitability must be considered in
light of the risks, uncertainties, expenses and difficulties typically encountered by recently combined companies.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Risk Management and Strategy
General. The Company’s information security program, including its processes with respect to cybersecurity, is focused on
protecting our systems, networks and data from unauthorized access by a third party. Concerns about cybersecurity risks
impact, at some level, every facet of the Company’s operations, from the way we structure the services we offer, to how we
communicate with our customers, to our interactions with and training of employees, and to the expenditures we make when
expanding and enhancing our technological infrastructure. We expect this continue to be the case as cybersecurity threats, and
the means to respond to those threats, continue to evolve.
The Company has adopted a defense-in-depth philosophy that relies on multiple systems and processes to reasonably provide
for the confidentiality, integrity and availability of our systems, networks and data. Features of our information security include:
•
Documentation: We have written policies and procedures that delineate the roles and responsibilities of the Company’s
Board of Directors, executive management and other employees, as well as outside parties, with respect to the various
aspects of the information security program. This documentation helps to align the entire information security program
with our efforts to maintain the integrity of the Company’s cybersecurity. These policies and procedures are reviewed
and updated at least annually.
•
Separation of duties: Separation of duties means that, where appropriate, a task is designed to ensure that more than
one person or group is responsible for its completion. We believe that separation of duties helps to prevent fraud,
misuse or other security compromise, and we apply this concept when we delegate administrative and oversight
responsibilities to multiple groups for certain aspects of the information security program, including identity and
access management, network management, system administration, policy oversight, monitoring and alerting.
•
The principle of least privilege: Access approval for the Company’s employees is coordinated between an employee’s
manager, the Company’s human resources department and the information systems administrator. The goal is to give
an employee access rights to our data, applications and other information resources only to the extent necessary for the
employee to perform the functions of the particular job. Any change in employment responsibilities that requires
access changes is implemented using the same access approval procedures. Finally, all remote access into the
Company’s networks must be approved by the Chief Information Security Officer (which we refer to as the “CISO”).
•
Vulnerability and patch management: The Company’s vulnerability management program includes internal and
external scanning using third-party tools and services. Software patches are deployed based on criticality of
vulnerability. Further, we track our performance in implementing patches, and if implementation timing falls below
performance expectations, management will take steps to identify and remediate the root causes of implementation
delays.
•
Risk assessments: At least annually, management conducts risk assessments to assess the existence, severity and trends
of cybersecurity risks and other risks that the Company’s information security program faces. The scope of an
individual risk assessment can be the whole organization, parts of the organization, an individual information system,
specific system components, or services.
•
Log management: System security logs are consolidated by the Company’s Security Incident and Event Management
system and are reviewed via both automatic and manual processes for anomalous behavior.
•
Incident response: The incident response process is designed to, among other things, promptly elevate a cybersecurity
threat or incident to the parties responsible for leading our efforts to identify, contain and mitigate the threat or
incident, notify impacted customers or other third parties and comply with applicable law, regulations and regulatory
expectations.
•
Employee training: Information security is an integral component of our employee training program. Training includes
efforts to maintain security awareness among employees at all times by means of company-wide communications of
cybersecurity risks or incidents affecting third parties, internal testing and similar efforts.
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The information security program applies to all of the Company’s business lines and employees as well as to vendors and other
third parties with access to the Company’s information systems or its confidential and proprietary information. Whenever we
consider a new product or service to offer to our clients, or a new means of offering or providing an existing product or service,
or a new back-office process or procedure, the implications to the Company’s information security are required to be
considered.
Our CISO, a Certified Information Systems Security Professional, leads the Company’s information security team, which has
over 50 years’ combined experience in providing solutions to manage information security, compliance, privacy and technology
management. The Board of Directors’ Technology Committee and its Enterprise Risk Management Committee (the “ERM
Committee”) oversee our information security team, receiving regular updates related to the material features of the information
security program, our success and failures in maintaining information security and emerging threats and management’s
proposed response thereto.
Strategy and Testing. As mentioned above, the Company employs a layered, defense-in-depth approach that leverages people,
processes and technology to manage and maintain cybersecurity controls. We also employ a variety of preventative and
detective tools to monitor, block and provide alerts regarding suspicious activity and to report on any suspected threats. These
controls include appropriate access controls based on least privilege, multifactor authentication for remote and privilege access,
and encryption to protect data. The information security program is designed to comply with applicable laws and regulations
and is driven by industry standards for financial institutions, including the Federal Financial Institutions Examination Council
(“FFIEC”) Cybersecurity Assessment Tool, as well as by the guidance promulgated by the National Institute of Standards and
Technology (“NIST”). We work closely with government and industry associations to stay abreast of developments and share
best practices with respect to cybersecurity. The following paragraphs describe how we test, or otherwise obtain feedback
about, the Company’s cybersecurity and other information security. The feedback we develop through testing and assessment,
in addition to information about cybersecurity threats or incidents impacting other entities, is incorporated into the Company’s
information security program to enhance our cybersecurity; in certain circumstances a new or emerging cybersecurity threat
may require modifications to how we conduct business.
The Company’s information security team utilizes the Financial Services Sector Coordinating Council for Critical Infrastructure
Protection and Homeland Security version of the FFIEC Cybersecurity Assessment Tool to perform an annual assessment of
our information security program. The assessment provides a repeatable and measurable process for institutions to measure
their cybersecurity preparedness over time. The assessment incorporates cybersecurity-related principles from the FFIEC
Information Technology Examination Handbook and regulatory guidance, and concepts from other industry standards,
including the NIST Cybersecurity Framework.
The assessment consists of two parts: Inherent Risk Profile and Cybersecurity Maturity. The Cybersecurity Maturity aspect of
the assessment is designed to help management measure the institution’s level of risk and corresponding controls. The levels
range from baseline to innovative. Cybersecurity Maturity includes tests to determine whether an institution’s behaviors,
practices and processes can support cybersecurity preparedness within the following five domains:
•
Cyber risk management and oversight
•
Threat intelligence and collaboration
•
Cybersecurity controls
•
External dependency management
•
Cyber incident management and resilience
We also retain third parties to test the effectiveness of our cybersecurity efforts. Annually, we obtain independent third party
audits of the information security program, including program maturity and overall control effectiveness. In addition, multiple
times over the course of each year we engage third party security firms to conduct both external and internal penetration tests.
The goal of these assessments is to discover vulnerabilities in the Company’s in-scope corporate networks. When testing
reveals potential vulnerabilities in the Company’s security, management works to develop appropriate mitigation plans to
resolve any outstanding issues; we also consider other recommendations to enhance our cybersecurity that these security firms
may offer, implementing those that management concludes are appropriate within the context of the Company’s information
security program and processes.
In addition to audits and testing by third party security firms, our information security program and infrastructure is subject to
continuous supervision by the FDIC and the DBCF, including an annual in-depth examination by subject-matter experts from
the FDIC and DBCF. The laws and regulations that these regulators administer impose very high expectations on the Company
29
with respect to its information security policies, procedures, processes and controls. In particular, the Interagency Guidelines
Establishing Information Security Standards (the “Guidelines”) require us to implement a comprehensive written information
security program that includes administrative, technical and physical safeguards designed to (1) ensure the security and
confidentiality of customer information; (2) protect against any anticipated threats or hazards to the security or integrity of such
information; (3) protect against unauthorized access to or use of such information that could result in substantial harm or
inconvenience to any customer; and (4) ensure the proper disposal of customer information and consumer information. We also
must comply with the information sharing requirements and restrictions enacted pursuant to the GLBA. The regulators’
continuous supervision of the Company is designed to ensure, among other things, that our information security program meets
all the standards set forth in the Guidelines and that we operate in compliance with the GLBA and all other applicable
information security laws and regulations. Finally, in addition to external scrutiny, our internal audit department reviews our
compliance with the Guidelines, the GLBA and other laws and regulations, including those related to information security. If
any of these examinations identify deficiencies or areas for improvement, the Company’s information security team works with
management to act as promptly as reasonably possible to address the action item resulting from any such examination or
review.
Diligence of Vendors and Other Third Parties. As noted above, the Company’s information security program applies to our
vendors and other third parties (referred to collectively as “vendors”) with access to our information systems and networks and/
or confidential and proprietary information. Before we grant access to the Company’s systems or a vendor otherwise obtains
access to the Company’s confidential and proprietary information, our information security team assesses the vendor’s
information security program. We review the vendor’s information security policy (to the extent the third party is willing to
provide a copy of such policy), information security audits, service organization reports and similar information as well as
examination reports of the vendor if available from the banking regulators or other governmental entities; the team will also
investigate the background, reputation and history of prior cybersecurity incidents of such vendor or other third party. If the
information security team is not satisfied that the vendor’s information security infrastructure is adequate to reasonably protect
the Company’s systems and confidential and proprietary information from unauthorized access, and there are no suitable
solution to address the information security team’s concerns, then we will not engage such vendor.
The vendors we retain are also categorized by the level of risk that the vendor presents to us, of which information security risk
is a component. The information security team annually reviews those vendors in the “high risk” category and periodically
reviews other vendors. This review includes obtaining updated information security audits and service organization reports,
where available, and otherwise analyzing whether the vendor’s cybersecurity risk profile has materially changed.
The information security team’s review process does not, and cannot, guarantee that a Company vendor will not suffer a
cybersecurity incident that impacts us. Due to the possibility that a vendor’s information security may be breached, we also
negotiate provisions in vendor contracts that address cybersecurity incidents. In addition to including provisions that address the
parties’ relative responsibility for damages resulting from a cybersecurity incident at a vendor, these contracts also typically
include provisions to ensure that the Company receives timely and complete notification of a cybersecurity incident and
cooperation in responding thereto so that we can assess the extent of the incident’s impact on the Company’s systems or
information, mitigate any adverse effects arising therefrom and comply with any customer or regulation notification
requirements and other legal, regulator or contractual obligations.
Incident Response. For those situations where a cybersecurity threat or incident arises, whether internal to the Company or
relating to one of its vendors, we have also organized an incident response team. The incident response team includes
representatives from the information technology, operations, risk management, legal (including securities law counsel), privacy
and finance departments, among others. In addition to meeting quarterly, the incident response team (or a subset of the team)
gathers whenever there is a threatened or actual breach of the Company’s information security (whether involving an external
actor or an internal party) to determine the nature and extent of the threatened or actual breach and, if appropriate, the steps to
take in response thereto to protect the Company’s information security and mitigate any harm that has already occurred. The
team is also responsible for ensuring the Company complies with legal and regulatory requirements (including notifying
affected customers and regulators and making any filings required by the securities laws). The activities of our incident
response team are reported to the Board’s Enterprise Risk Management Committee.
The Company also maintains a cyber insurance policy that provides cyber liability coverage.
Employee Training and Security Awareness. All employees are required to complete an annual security awareness training
program. Courses within the training program include general cybersecurity best practices as well as a course specifically
related to social engineering, email and social media security. The Company also conducts routine internally-focused exercises
to help raise employee awareness of the risks associated with cybersecurity. For example, over the course of 2024, employees
received at least one email per quarter designed to test employees’ ability to identify and avoid potential “phishing” emails, and
those employees that fail this phishing test are assigned additional training. In addition, annually the Company’s incident
30
response team engages in a cyber attack tabletop exercise designed by the Financial Services Information Sharing and Analysis
Center that helps to train the incident response team in overcoming a simulated attack against Renasant’s payment systems and
processes.
Governance and Oversight
Management Role. The Company takes a layered approach to the governance of its cybersecurity risk management. The first
line of defense against cybersecurity risk is the company’s information security team, led by the CISO. This team is primarily
responsible for promptly identifying cybersecurity risks associated with our existing and anticipated operations and, once
identified, assessing the level that each cybersecurity risk poses to us, and then controlling or mitigating to the extent reasonably
possible (in the context of the Company’s operations and resources, and competitive factors affecting how banks and other
financial services companies conduct operations, among other things).
The efforts of our information security team to address cybersecurity risk are reviewed by the Company’s Risk Department,
which oversees our enterprise risk management program. The department focuses on the quality of the Company’s risk
management process in order to manage risks within acceptable tolerance levels. As it pertains to cybersecurity risk, the Risk
Department challenges the processes that the information security team has implemented to identify, assess, control and
mitigate cybersecurity risk. The department collaborates with the CISO and other business unit owners impacted by our
cybersecurity risk management practices to develop and monitor controls and other processes that mitigate identified risks. In
addition, the Risk Department conducts independent risk evaluations related to cybersecurity risk.
The primary means by which the Risk Department evaluates cybersecurity risk is the development, in conjunction with the
information security team, of risk metrics related to cybersecurity as well as risk tolerances with respect to each such metric.
Risk tolerances are set such that the overall cybersecurity risk presented to us is consistent with the risk appetite statement
adopted by our Board annually. Management believes these metrics provide a holistic picture of the Company’s cybersecurity
risk profile, but at the same time, we recognize that, given the continual evolution of cybersecurity risks, including the tools and
vectors that bad actors take to compromise a company’s information security, our risk metrics cannot remain static. At least
annually, the Risk Department meets with the CISO to assess whether the risk metrics, and the tolerances for each metric,
remain appropriate in light of the Company’s operations and the cybersecurity threat environment.
As the third line of defense against cybersecurity risk, our Internal Audit Department, with the assistance of outside experts,
annually reviews and tests the Company’s processes, including its policies, procedures and controls, with respect to
cybersecurity risk. The Internal Audit Department reports the results of its review, including the steps management intends to
take to address any findings, to the Audit Committee of the Board of Directors.
Finally, as a means to ensure that our senior executive management has an integrated understanding of the cybersecurity and
other risks facing the company at any particular time, the Company has organized a Management Enterprise Risk Management
Committee (the “management ERM committee”). Our Chief Risk Officer leads this committee, whose membership includes the
Company’s President and the leaders of our major business lines and back-office functions. Among other things, the
management ERM committee reviews the Company’s cybersecurity and other risk metrics and the direction in which each risk
is trending (increasing risk or decreasing risk), both in isolation and in the context of other existing and emerging risks facing
the company, and the status of risk mitigants therefor. We believe that this committee helps management better focus its efforts
to minimize cybersecurity risk and that it assists in more focused reporting of cybersecurity risks to the Board of Directors.
Board Oversight. The Company’s Board of Directors primarily oversees the risks related to our technological infrastructure,
information security, cybersecurity, business continuity and disaster recovery programs through its Technology Committee and
the ERM Committee. These committees meet quarterly, and their activities are reported to the full Board of Directors.
The Technology Committee is responsible for the oversight of Renasant’s strategies and operations with respect to information
technology. Although this committee’s focus is broader than just information security and cybersecurity risk, at each meeting
the CISO reports to the committee on, among other topics, the status of any cybersecurity and network security initiatives
designed to enhance the Company’s cybersecurity, emerging cybersecurity risks that may not yet be addressed by the existing
risk metrics and management’s plans to mitigate such risks, and employee training on cybersecurity and related issues.
The ERM Committee incorporates the assessment, monitoring and mitigation of cybersecurity risk into its monitoring of the
Company’s broader enterprise risk management function. The Company tracks numerous risk metrics relating to cybersecurity,
and at each meeting of the ERM Committee, the Chief Risk Officer reports on the status within established tolerances of each
risk metric as well as the assessment of the metric’s trend of increasing or decreasing risk. These metric reports give the ERM
Committee a broad view of the aggregate cybersecurity risk that the Company faces at any particular time, insight into any
particular areas of risk as well as an opportunity for the ERM Committee to discuss with management the steps taken or to be
taken to address risks that are out of tolerance or trending in that direction. In addition to this report, the CISO’s report to the
31
Technology Committee described above is included the materials for ERM Committee meetings. The chair of the Technology
Committee is a member of the ERM Committee, enabling the chair to convey to the ERM Committee details of the discussions
with respect to the CISO’s report as well as other matters related to our technological infrastructure and the impact thereof on
matters within the ERM Committee’s focus. Finally, the CISO attends ERM Committee meetings, providing additional detail,
and answering committee members’ questions, about the CISO’s report.
ITEM 2. PROPERTIES
The principal executive offices of the Company are located at 209 Troy Street, Tupelo, Mississippi. Various departments
occupy each floor of the five-story building.
As of December 31, 2024, Renasant operated 150 full-service branches, 11 limited-service branches, 157 ATMs and 54
Interactive Teller Machines (ITMs). Our Community Banks and Wealth Management segments operate out of all of these
branches.
The Bank also operates 16 locations used exclusively for mortgage banking and three locations used exclusively for loan
production. The Wealth Management segment operates two locations used exclusively for investment services.
Republic Business Credit, a wholly-owned subsidiary of the Bank, operates four stand-alone offices in California, Illinois,
Louisiana and Texas.
We own or lease our facilities and believe all of our properties are in good condition to meet our business needs. None of our
properties are subject to any material encumbrances.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company, the Bank, or any of its subsidiaries are a party or to
which any of their property is subject, and no such legal proceedings were terminated in the fourth quarter of 2024.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
32
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Market Information and Holders
The Company’s common stock trades on The New York Stock Exchange under the ticker symbol “RNST.” On February 18,
2025, the Company had approximately 3,894 shareholders of record and the closing sales price of the Company’s common
stock was $38.29.
Please refer to Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,
for a discussion of the securities authorized for issuance under the Company’s equity compensation plans.
Issuer Purchases of Equity Securities
Total Number of
Shares
Purchased(1)
Average
Price
Paid per
Share
Total Number of
Shares Purchased
as Part of Publicly
Announced Share
Repurchase Plans
Maximum Number or
Approximate Dollar
Value of Shares That
May Yet Be
Purchased Under
Share Repurchase
Plans(2)(3)
October 1, 2024 to October 31, 2024
588 $
32.74
— $
100,000
November 1, 2024 to November 30, 2024
—
—
—
100,000
December 1, 2024 to December 31, 2024
—
—
—
100,000
Total
588 $
32.74
—
(1)
All shares in this column represent shares of Renasant Corporation stock withheld to satisfy the federal and state tax liabilities
related to the vesting of time-based restricted stock awards.
(2)
The Company announced a $100.0 million stock repurchase program in October 2023 under which the Company was
authorized to repurchase outstanding shares of its common stock either in open market purchases or privately-negotiated
transactions. No shares were repurchased during the fourth quarter of 2024 under this plan, which expired in October 2024 and
was replaced with a $100.0 million stock repurchase program approved in October 2024. This new plan will remain in effect
for one year or, if earlier, the repurchase of the entire amount of common stock authorized to be repurchased. No shares were
repurchased during the fourth quarter of 2024 under this plan.
(3)
Dollars in thousands.
Unregistered Sales of Equity Securities
The Company did not sell any unregistered equity securities during 2024.
33
Stock Performance Graph
The following performance graph, obtained from S&P Global Market Intelligence, compares the performance of our common
stock to the NYSE Composite Index and to the S&P U.S. BMI Banks - Southeast Region Index, which is a peer group of
regional bank holding companies (including the Company), for the measurement period. The performance graph assumes that
the value of the investment in our common stock, the NYSE Composite Index and the S&P U.S. BMI Banks - Southeast Region
Index was $100 at January 1, 2019, and that all dividends were reinvested.
Period Ending
Index Value
Total Return Performance
Renasant Corporation
NYSE Composite Index
S&P U.S. BMI Banks - Southeast Region Index
2019
2020
2021
2022
2023
2024
50
100
150
200
250
Period Ending December 31,
2019
2020
2021
2022
2023
2024
Renasant Corporation
$ 100.00 $
98.38 $ 113.42 $ 115.35 $ 106.47 $ 116.18
NYSE Composite Index
100.00
106.99
129.11
117.04
133.16
154.19
S&P U.S. BMI Banks - Southeast Region Index
100.00
89.66
128.06
104.16
107.45
139.40
(1)
The S&P U.S. BMI Banks - Southeast Region Index, is a peer group of 50 regional bank holding companies, whose common stock is traded either on the
New York Stock Exchange, NYSE Amex or NASDAQ, and which are headquartered in Alabama, Arkansas, Florida, Georgia, Mississippi, North
Carolina, South Carolina, Tennessee, Virginia and West Virginia.
There can be no assurance that our common stock performance will continue in the future with the same or similar trends
depicted in the performance graph above. We will not make or endorse any predictions as to future stock performance. The
information provided under the heading “Stock Performance Graph” shall not be deemed to be “soliciting material” or to be
“filed” with the SEC or subject to its proxy regulations or to the liabilities of Section 18 of the Securities Exchange Act of 1934,
as amended, other than as provided in Item 201 of Regulation S-K. The information provided in this section shall not be
deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended.
ITEM 6. [RESERVED]
34
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
(In Thousands, Except Share Data)
The following discussion and analysis of our financial condition as of December 31, 2024 and 2023 and results of operations
for each of the years then ended should be read together with the cautionary language regarding forward-looking statements at
the beginning of this Annual Report on Form 10-K and the consolidated financial statements and related notes included under
Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K, as well as Part II, Item 7,
Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K
for the year ended December 31, 2023, filed with the SEC on February 23, 2024, which provides a discussion of 2022 items and
year-to-year comparisons between 2023 and 2022 that are not included in this Annual Report on Form 10-K.
Performance Overview
Net income was $195,457 for 2024 compared to $144,678 for 2023. Basic and diluted earnings per share (“EPS”) were $3.29
and $3.27, respectively, for 2024 compared to $2.58 and $2.56, respectively, for 2023. At December 31, 2024, total assets
increased to $18,034,868 from $17,360,535 at December 31, 2023. The changes in our financial condition and results of
operations from 2023 to 2024 were driven by a number of factors, the most prominent of which are highlighted below:
Financial Highlights
—
In July 2024, the Company and The First Bancshares, Inc. (“The First”) entered into an agreement and plan of merger,
pursuant to which, subject to the terms and conditions set forth therein, among other things, The First will merge with
and into the Company, with the Company as the surviving entity in such merger, and immediately thereafter, The First’s
subsidiary bank and Renasant Bank will enter into a subsidiary plan of merger, pursuant to which The First’s subsidiary
bank will merge with and into Renasant Bank, with Renasant Bank as the surviving entity in such merger. Subject to the
terms and conditions of the merger agreement, at the effective time of the merger, each outstanding share of common
stock of The First will be converted into the right to receive one share of common stock of the Company.
The merger is expected to close in the first half of 2025 and is subject to certain closing conditions, including the receipt
of required regulatory approvals
—
In July 2024, the Company completed its public offering of an aggregate of 7,187,500 shares of its common stock for net
proceeds of approximately $217,000. The Company intends to use the net proceeds of the offering for general corporate
purposes to support its continued growth, including investments in the Bank and future strategic acquisitions.
—
In July 2024, Renasant Bank sold substantially all of the assets of Renasant Insurance, Inc., its insurance agency
(“Renasant Insurance”), for cash proceeds of $56,390 resulting in a positive after-tax impact to earnings of $34,092,
which is net of transaction expenses.
—
Net interest income decreased $7,131 to $512,196 for 2024 as compared to $519,327 for 2023. The decrease from 2023
to 2024 was due to the increase in deposit costs more than offsetting the increase in interest income from higher yields,
bolstered by the growth in our average earning assets exceeding the growth in interest bearing deposits.
—
Net charge-offs as a percentage of average loans were 0.06% and 0.10% in 2024 and 2023, respectively. The Company
recorded a provision for credit losses of $9,273 in 2024 as compared to a provision for credit losses of $15,593 in 2023.
—
Noninterest income was $203,660 for 2024 compared to $113,075 for 2023. The increase in noninterest income is
primarily attributable to the sale of Renasant Insurance in 2024 resulting in a pre-tax gross gain on sale of $53,349. Also
in 2023, the Company recognized net losses on sales of securities (including impairments) in connection with the
repositioning of our securities portfolio.
—
Noninterest expense was $461,618 and $439,622 for 2024 and 2023, respectively. The increase in noninterest expense is
primarily attributable to the aforementioned merger and conversion related expenses in connection with the Company’s
announced acquisition of The First and the sale of Renasant Insurance.
—
Loans, net of unearned income, were $12,885,020 at December 31, 2024 compared to $12,351,230 at December 31,
2023, an increase of 4.3%.
—
Deposits totaled $14,572,612 at December 31, 2024 compared to $14,076,785 at December 31, 2023. The Company used
core retail deposit growth to paydown $461,441 in brokered deposits during the year.
35
A historical look at key performance indicators is presented below.
2024
2023
2022
Diluted EPS
$
3.27
$
2.56
$
2.95
Diluted EPS Growth
27.73 %
(13.22) %
(5.45) %
Shareholders’ equity to assets
14.85 %
13.23 %
12.57 %
Tangible shareholders’ equity to tangible assets(1)
9.84 %
7.87 %
7.01 %
Return on Average Assets
1.11 %
0.84 %
1.00 %
Return on Average Tangible Assets(1)
1.20 %
0.92 %
1.09 %
Return on Average Shareholders’ Equity
7.92 %
6.50 %
7.60 %
Return on Average Tangible Shareholders’ Equity(1)
13.63 %
12.29 %
13.97 %
(1) These performance indicators are non-GAAP financial measures. A reconciliation of these financial measures from GAAP to non-GAAP as well as an
explanation of why the Company provides these non-GAAP financial measures can be found under the “Non-GAAP Financial Measures” heading at the
end of this Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Critical Accounting Policies and Estimates
Our financial statements are prepared using accounting estimates for various accounts. Wherever feasible, we utilize third-party
information to provide management with estimates. Although independent third parties are engaged to assist us in the
estimation process, management evaluates the results, challenges assumptions and considers other factors that could impact
these estimates. We monitor the status of proposed and newly issued accounting standards to evaluate the impact (or potential
impact) on our financial condition and results of operations or on the preparation of our financial statements. Our accounting
policies, including the impact of newly issued accounting standards, are discussed in detail in Note 1, “Significant Accounting
Policies,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this
report. The following discussion supplements the discussion of our significant accounting policies in the financial statements.
Allowance for Credit Losses on Loans
The accounting estimate most important to the presentation of our financial statements that involves considerable subjective
judgment and evaluation by management is the allowance for credit losses and the related provision for credit losses. The
allowance for credit losses is an estimate of expected losses inherent within the Company’s loans held for investment portfolio
and is maintained at a level believed adequate by management to absorb such expected credit losses, as prescribed by the
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic (“ASC”) 326, “Financial
Instruments - Credit Losses” (“ASC 326”; ASC 326 is also referred to herein as “CECL”). The discussion under the heading
“Loans and the Allowance for Credit Losses” in Note 1, “Significant Accounting Policies,” in the Notes to Consolidated
Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report provides more information
regarding the estimates and assumptions, and the uncertainties underlying such estimates and assumptions, involved in the
calculation of the allowance for credit losses. Although we consider all reasonably-available information that we believe is
relevant to making the assumptions that underlie the Company’s determination of the appropriate amount of the allowance for
credit losses, if actual economic or other conditions ultimately differ substantially from the assumptions we used in making the
evaluation, then future adjustments (positive or negative) to the allowance may be necessary. Additionally, banking regulators
periodically review our allowance for credit losses and may require us to recognize adjustments to the allowance based on their
subjective judgment of information available to them at the time of their examination. Management evaluates the adequacy of
the allowance for credit losses on a quarterly basis.
For more information about our loan policies and procedures for addressing credit risk, as well as for a discussion of the
changes in the allowance for credit losses in 2024 and 2023, please refer to the disclosures in this Item under the heading “Risk
Management – Credit Risk and Allowance for Credit Losses for Loans and Unfunded Commitments.”
Business Combinations, Accounting for Purchased Loans
The Company accounts for its acquisitions under ASC 805, “Business Combinations,” which requires the use of the acquisition
method of accounting. For more information about the accounting for acquisitions, including the estimates and assumptions,
and uncertainties underlying such estimates and assumptions, please refer to the information under the heading “Business
Combinations, Accounting for Purchased Credit Deteriorated Loans and Related Assets” in Note 1, “Significant Accounting
Policies,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this
report.
36
Additional details about loans acquired in connection with our acquisitions is set forth below under the heading “Risk
Management - Credit Risk and Allowance for Credit Losses.”
Financial Condition
The following discussion provides details regarding the changes in significant balance sheet accounts at December 31, 2024
compared to December 31, 2023. Total assets were $18,034,868 at December 31, 2024 compared to $17,360,535 at
December 31, 2023.
Securities
The securities portfolio is used to provide a source for meeting liquidity needs and to supply securities to be used in
collateralizing certain deposits and other types of borrowings. The securities portfolio also serves as an outlet to deploy excess
liquidity rather than hold such excess funds as cash. The following table shows the carrying value of our securities portfolio by
investment type and the percentage of such investment type relative to the entire securities portfolio at December 31:
2024
2023
Balance
% of
Portfolio
Balance
% of
Portfolio
Obligations of states and political subdivisions
302,596
15.46
322,764
15.05
Mortgage-backed securities
1,472,918
75.26
1,695,604
79.06
Other debt securities
181,643
9.28
126,407
5.89
$ 1,957,157
100.00 % $ 2,144,775
100.00 %
Allowance for credit losses - held to maturity securities
(32)
(32)
Securities, net of allowance for credit losses
$ 1,957,125
$ 2,144,743
During 2024, we deployed a portion of our liquidity into the securities portfolio and purchased $174,229 in investment
securities, with mortgage-backed securities and collateralized mortgage obligations (“CMOs”), in the aggregate, comprising the
majority of such purchases. CMOs are included in the “Mortgage-backed securities” line item in the above table. The mortgage-
backed securities and CMOs held in our investment portfolio are issued by government sponsored entities. Proceeds from the
sale of securities in 2024 totaled $177,185, which the Company had the intent to sell as of December 31, 2023, and therefore
recognized a non-credit related impairment loss of $19,352 in 2023 in addition to losses on sales of securities earlier in the year
of $22,438. During 2024, proceeds from maturities and calls of securities totaled $191,008, and such proceeds were primarily
used to fund loan growth.
During 2023, we purchased $11,899 in investment securities, with mortgage-backed securities and CMOs, in the aggregate,
comprising the majority of such purchases. Proceeds from the sale of securities in 2023 totaled $488,981. Proceeds from
maturities and calls of securities during 2023 totaled $258,978, which were primarily reinvested in the securities portfolio or
used to fund loan growth.
During the year ended December 31, 2022, the Company transferred, at fair value, $882,927 of securities from the available for
sale portfolio to the held to maturity portfolio. The related net unrealized losses of $99,675 (after tax losses of $74,307)
remained in accumulated other comprehensive income (loss) and are amortized over the remaining life of the securities,
offsetting the related amortization of discount on the transferred securities. At December 31, 2024, the net unrealized after tax
losses remaining to be amortized in accumulated other comprehensive income (loss) was $49,045.
The allowance for credit losses on held to maturity securities is evaluated on a quarterly basis in accordance with ASC 326.
Expected credit losses on debt securities classified as held to maturity are measured on a collective basis by major security type.
The estimates of expected credit losses are based on historical default rates, investment grades, current conditions, and
reasonable and supportable forecasts about the future. At December 31, 2024 and 2023, the allowance for credit losses on held
to maturity securities was $32.
At December 31, 2024, unrealized losses of $138,608 were recorded on available for sale investment securities with a carrying
value of $701,844. At December 31, 2023, unrealized losses of $139,794 were recorded on available for sale securities with a
carrying value of $692,593. It is not more likely than not that the Company will be required to sell any security in the
investment portfolio prior to the recovery of its amortized cost basis, which may be maturity. Furthermore, more than 90% of
available for sale securities have the explicit or implicit backing of the United States government. Performance of these
securities has been in line with broader market price performance, indicating to management that increases in market-based,
37
risk free rates, and not credit-related factors, are the reason for the losses. For municipal and corporate securities, the Company
considers historical experience with credit sensitive securities, current market conditions, the financial health of the issuer,
current credit ratings, ratings changes and outlook, explicit and implicit guarantees, and/or insurance programs when
determining the fair value of the contractual cash flows. Based on its review of these factors as of December 31, 2024 and 2023,
the Company determined that all such losses resulted from factors not deemed credit related. As a result, no credit-related
impairment was recognized in current earnings, and all unrealized losses for available for sale securities were recorded in
Accumulated other comprehensive income (loss).
The following table sets forth the scheduled maturity distribution and weighted average yield based on the amortized cost of the
debt securities in our investment portfolio as of December 31, 2024.
Amortized
Cost
Yield
Held to Maturity:
Obligations of states and political subdivisions
Maturing within one year
$
1,494
2.61 %
Maturing after one year through five years
6,017
1.00 %
Maturing after five years through ten years
127,004
1.57 %
Maturing after ten years
150,027
1.85 %
Residential mortgage-backed securities not due at a single maturity date:
Government agency MBS
372,414
1.93 %
Government agency CMO
354,882
1.86 %
Commercial mortgage-backed securities not due at a single maturity date:
Government agency MBS
16,961
1.79 %
Government agency CMO
43,662
1.79 %
Other debt securities not due at a single maturity date:
53,683
2.68 %
Available for Sale:
Obligations of states and political subdivisions
Maturing within one year or less
1,997
5.46 %
Maturing after one year through five years
4,301
3.72 %
Maturing after five years through ten years
9,891
1.50 %
Maturing after ten years
4,077
1.30 %
Other debt securities
Maturing within one year or less
—
— %
Maturing after one year through five years
37,557
6.29 %
Maturing after five years through ten years
24,884
4.87 %
Maturing after ten years
—
— %
Residential mortgage-backed securities not due at a single maturity date:
Government agency MBS
185,292
1.95 %
Government agency CMO
475,311
1.99 %
Commercial mortgage-backed securities not due at a single maturity date:
Government agency MBS
11,373
3.53 %
Government agency CMO
146,510
2.24 %
Other debt securities not due at a single maturity date:
67,734
6.01 %
$
2,095,071
2.20 %
In the table above, weighted average yields on tax-exempt obligations have been computed on a fully tax equivalent basis
assuming a federal tax rate of 21%. These yields were calculated using coupon interest for the month of December of 2024,
adjusted for discount accretion and premium amortization, where applicable.
For more information about the Company’s securities, see Note 2, “Securities,” in the Notes to Consolidated Financial
Statements in Item 8, Financial Statements and Supplementary Data, in this report.
38
Loans Held for Sale
Loans held for sale were $246,171 at December 31, 2024 compared to $179,756 at December 31, 2023. Mortgage loans to be
sold, which made up all of our loans held for sale at each of December 31, 2024 and 2023, are sold either on a “best efforts”
basis or under a “mandatory delivery” sales agreement. Under a “best efforts” sales agreement, residential real estate
originations are locked in at a contractual rate with third party private investors or directly with government sponsored entities,
and the Company is obligated to sell the mortgages to such investors only if the mortgages are closed and funded. The risk we
assume is conditioned upon loan underwriting and market conditions in the national mortgage market. Under a “mandatory
delivery” sales agreement, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a
specified price and delivery date. Penalties are paid to the investor if we fail to satisfy the contract. Gains and losses are realized
at the time consideration is received and all other criteria for sales treatment have been met. These loans are typically sold
within 30-40 days after the loan is funded. Although loan fees and some interest income are derived from mortgage loans held
for sale, the main source of income is gains from the sale of these loans in the secondary market. Loans held for sale fluctuates
based on mortgage production volume.
Loans
Loans held for investment, which excludes loans held for sale, is the Company’s most significant earning asset, comprising
71.45% and 71.15% of total assets at December 31, 2024 and 2023, respectively. This percentage will fluctuate based on a
number of factors, including the extent of our loan growth and whether the Company has excess liquidity on its balance sheet.
The tables below set forth the balance of loans outstanding by loan type and the percentage of loans, by category, to total loans
at December 31:
December 31, 2024
December 31, 2023
Total
Loans
Percentage
of Total
Loans
Total
Loans
Percentage
of Total
Loans
Commercial, financial, agricultural
$
1,885,817
14.64 % $
1,871,821
15.15 %
Lease financing, net of unearned discount
90,591
0.70 %
116,020
0.94 %
Real estate – construction:
Residential
256,655
1.99 %
269,616
2.18 %
Commercial
836,998
6.50 %
1,063,781
8.61 %
Total real estate – construction
1,093,653
8.49 %
1,333,397
10.79 %
Real estate – 1-4 family mortgage:
Primary
2,428,076
18.84 %
2,422,482
19.61 %
Home equity
544,158
4.22 %
522,688
4.23 %
Rental/investment
402,938
3.13 %
373,755
3.03 %
Land development
113,705
0.88 %
120,994
0.98 %
Total real estate – 1-4 family mortgage
3,488,877
27.07 %
3,439,919
27.85 %
Real estate – commercial mortgage:
Owner-occupied
1,894,679
14.70 %
1,648,961
13.35 %
Non-owner occupied
4,226,937
32.81 %
3,733,174
30.23 %
Land development
114,452
0.89 %
104,415
0.85 %
Total real estate – commercial mortgage
6,236,068
48.40 %
5,486,550
44.43 %
Installment loans to individuals
90,014
0.70 %
103,523
0.84 %
Total loans, net of unearned income
$
12,885,020
100.00 % $ 12,351,230
100.00 %
Loan concentrations exist when there are amounts loaned to a number of borrowers engaged in similar activities that would
cause them to be similarly impacted by economic or other conditions. At December 31, 2024 and 2023, there were no
concentrations of loans exceeding 10% of total loans other than loans disclosed in the table above.
39
The following table sets forth loans held for investment, net of unearned income, outstanding at December 31, 2024, which,
based on remaining contractually-scheduled repayments of principal, are due in the periods indicated. Loans with balloon
payments and longer amortizations are often repriced and extended beyond the initial maturity when credit conditions remain
satisfactory. Demand loans, loans having no stated schedule of repayments and no stated maturity, and overdrafts are reported
below as due in one year or less. See “Risk Management – Credit Risk and Allowance for Credit Losses on Loans and
Unfunded Commitments” in this Item 7 for information regarding the risk elements applicable to, and a summary of our loan
loss experience with respect to, the loans in each of the categories listed below.
One Year or
Less
After One
Year
Through
Five Years
After Five
Years
Through
Fifteen
Years
After
Fifteen
Years
Total
Commercial, financial, agricultural
$ 1,326,851 $
472,565 $
86,116 $
285 $ 1,885,817
Lease financing, net of unearned income
1,982
62,985
25,624
—
90,591
Real estate – construction:
Residential
184,178
5,249
42,520
24,708
256,655
Commercial
768,722
56,732
9,619
1,925
836,998
Total real estate – construction
952,900
61,981
52,139
26,633
1,093,653
Real estate – 1-4 family mortgage:
Primary
199,628
525,684
896,711
806,053
2,428,076
Home equity
540,152
2,879
1,046
81
544,158
Rental/investment
95,919
290,406
16,289
324
402,938
Land development
102,306
11,136
263
—
113,705
Total real estate – 1-4 family mortgage
938,005
830,105
914,309
806,458
3,488,877
Real estate – commercial mortgage:
Owner-occupied
797,436
746,254
335,658
15,331
1,894,679
Non-owner occupied
2,598,060
1,427,044
200,986
847
4,226,937
Land development
64,153
47,750
2,549
—
114,452
Total real estate – commercial mortgage
3,459,649
2,221,048
539,193
16,178
6,236,068
Installment loans to individuals
36,495
41,526
11,973
20
90,014
Total loans, net of unearned income
$ 6,715,882 $ 3,690,210 $ 1,629,354 $
849,574 $ 12,885,020
40
The following table sets forth the fixed and variable rate loans maturing or scheduled to reprice after one year as of
December 31, 2024:
Interest Sensitivity
Fixed
Rate
Variable
Rate
Commercial, financial, agricultural
$
439,653 $
119,313
Lease financing, net of unearned income
88,609
—
Real estate – construction:
Residential
37,085
35,392
Commercial
67,193
1,083
Total real estate – construction
104,278
36,475
Real estate – 1-4 family mortgage:
Primary
1,098,447
1,130,001
Home equity
3,847
159
Rental/investment
291,955
15,064
Land development
11,058
341
Total real estate – 1-4 family mortgage
1,405,307
1,145,565
Real estate – commercial mortgage:
Owner-occupied
1,016,519
80,724
Non-owner occupied
1,506,161
122,716
Land development
48,183
2,116
Total real estate – commercial mortgage
2,570,863
205,556
Installment loans to individuals
52,295
1,224
Total loans, net of unearned income
$
4,661,005 $
1,508,133
Deposits
The Company relies on deposits as its major source of funds. Total deposits were $14,572,612 and $14,076,785 at
December 31, 2024 and 2023, respectively. Noninterest-bearing deposits were $3,403,981 and $3,583,675 at December 31,
2024 and 2023, respectively, while interest-bearing deposits were $11,168,631 and $10,493,110 at December 31, 2024 and
2023, respectively. Interest-bearing deposits included brokered deposits at December 31, 2023 of $461,441, while the Company
did not hold any brokered deposits at December 31, 2024.
The decrease in noninterest-bearing deposits across the Company’s footprint in 2024 and 2023 was primarily driven by
increases in interest-bearing deposit rates. Management continues to focus on growing and maintaining a stable source of
funding, specifically noninterest-bearing deposits and other core deposits (that is, deposits excluding brokered deposits and time
deposits greater than $250,000). Noninterest-bearing deposits decreased to 23.36% of total deposits at December 31, 2024, as
compared to 25.46% of total deposits at December 31, 2023, due to noninterest-bearing deposits being moved to other types of
deposits or financial products bearing higher interest rates. Under certain circumstances, management may elect to acquire non-
core deposits (in the form of brokered or time deposits) or public fund deposits (which are deposits of counties, municipalities
or other political subdivisions). The source of funds that we select depends on the terms and how those terms assist us in
mitigating interest rate risk, maintaining our liquidity position and managing our net interest margin as well as business
opportunities that may accompany deposits we acquire. Accordingly, funds are acquired to meet anticipated funding needs at
the rate and with other terms that, in management’s view, best address our interest rate risk, liquidity and net interest margin
parameters.
Public fund deposits may be readily obtained based on the Company’s pricing bid in comparison with competitors. Public fund
deposits may fluctuate as competitive and market forces change because these deposits are obtained through a bid process.
Although the Company has focused on growing stable sources of deposits to reduce reliance on public fund deposits, it
participates in the bidding process for public fund deposits when pricing and other terms make it reasonable given market
conditions or when management perceives that other factors, such as the public entity’s use of our treasury management or
other products and services, make such participation advisable. Our public fund transaction accounts are principally obtained
41
from public universities and municipalities, including school boards and utilities. Public fund deposits at December 31, 2024
were $2,256,461 compared to $1,866,495 at December 31, 2023.
Deposits that are in excess of the FDIC insurance limit were $6,489,547 and $5,778,174 at December 31, 2024 and 2023,
respectively. Public fund deposits in excess of the FDIC insurance limit but that were collateralized by pledged securities in the
Company’s investment portfolio totaled $1,765,510. The following table shows the maturity of time deposits at December 31,
2024 that are in excess of the FDIC insurance limit (or similar state deposit insurance limits) and that are otherwise uninsured:
Three Months or Less
$
293,798
Over Three through Six Months
276,583
Over Six through Twelve Months
184,875
Over 12 Months
10,324
Total
$
765,580
Borrowed Funds
Total borrowings include federal funds purchased, securities sold under agreements to repurchase, advances from the Federal
Home Loan Bank (“FHLB”), subordinated notes and junior subordinated debentures and are classified on the Consolidated
Balance Sheets as either short-term borrowings or long-term debt. Short-term borrowings have original maturities less than one
year and typically include federal funds purchased, securities sold under agreements to repurchase, and short-term FHLB
advances. During 2024 and 2023, we used short-term FHLB borrowings to meet anticipated short-term liquidity needs, which
varied throughout the year in response to loan demand and competition for deposits. The weighted-average interest rates on
outstanding advances at December 31, 2024 and 2023 were 4.63% and 5.70%, respectively. The following table presents our
short-term borrowings by type at December 31:
2024
2023
Security repurchase agreements
$
8,018 $
7,577
Short-term borrowings from the FHLB
100,000
300,000
Total short-term borrowings
$
108,018 $
307,577
At December 31, 2024, long-term debt consists of our junior subordinated debentures and our subordinated notes; no long-term
FHLB advances were outstanding. The following table presents our long-term debt by type at December 31:
2024
2023
Junior subordinated debentures
$
113,916 $
112,978
Subordinated notes
316,698
316,422
Total long-term debt
$
430,614 $
429,400
Long-term FHLB borrowings are used to match-fund against large, fixed rate commercial or real estate loans with long-term
maturities, which helps mitigate interest rate exposure when rates rise and are also used to meet day-to-day liquidity needs,
particularly when the costs of such borrowings compare favorably to the rates required to attract deposits. The Company had
$4,004,630 of availability on unused lines of credit with the FHLB at December 31, 2024 compared to $2,922,315 at
December 31, 2023. The Company also had credit available at the Federal Reserve Discount Window in the amount of
$656,683.
The Company owns subordinated notes, the proceeds of which have been used for general corporate purposes. The
subordinated notes qualify as Tier 2 capital under the current regulatory guidelines.
Finally, the Company owns the outstanding common securities of business trusts that issued corporation-obligated mandatorily
redeemable preferred capital securities to third-party investors. The trusts used the proceeds from the issuance of their preferred
capital securities and common securities (collectively referred to as “capital securities”) to buy floating rate junior subordinated
debentures issued by the Company (or by companies that the Company subsequently acquired). The debentures are the trusts’
only assets and interest payments from the debentures finance the distributions paid on the capital securities.
For more information about the terms and conditions of the Company’s junior subordinated debentures and subordinated notes,
see Note 11, “Long-Term Debt,” in the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and
Supplementary Data, in this report.
42
Results of Operations
Net Income
Net income for the year ended December 31, 2024 was $195,457 compared to net income of $144,678 for the year ended
December 31, 2023. Basic earnings per share for the year ended December 31, 2024 was $3.29 as compared to $2.58 for the
year ended December 31, 2023. Diluted earnings per share for the year ended December 31, 2024 was $3.27 as compared to
$2.56 for the year ended December 31, 2023.
From time to time, the Company incurs expenses and charges in connection with certain transactions with respect to which
management is unable to accurately predict when these expenses or charges will be incurred or, when incurred, the amount of
such expenses or charges. The following table presents the impact of these expenses and charges on reported EPS for the dates
presented. The gain on the sale of mortgage servicing rights (“MSRs”), gain on extinguishment of debt and losses on security
sales are discussed below under the “Noninterest Income” heading.
Twelve Months Ended December 31,
2024
2023
Pre-tax
After-
tax
Impact to
Diluted
EPS
Pre-tax After-tax
Impact to
Diluted
EPS
Gain on sale of MSR
$ (3,724) $ (2,793) $
(0.05) $
(547) $
(44) $
—
Merger and conversion expenses
13,349 11,395
0.19
—
—
—
Gain on extinguishment of debt
(56)
(42)
—
(620)
(503)
(0.01)
Gain on sale of insurance agency
(53,349) (38,951)
(0.65)
—
—
—
Losses on security sales (including impairments)
—
—
— 41,790 33,926
0.60
Note: Balances in the table above are shown to reflect impact to income if removed (i.e. negative balances for income items and positive balances for expense
items).
Net Interest Income
Net interest income, the difference between interest earned on assets and the cost of interest-bearing liabilities, is the largest
component of our net income, comprising 71.95% of total net revenue in 2024. Total net revenue consists of net interest income
on a fully taxable equivalent basis and noninterest income. The percentage of net interest income as a share of total net revenue
decreased from prior years in 2024 due to the sale of our insurance agency and the corresponding increase in noninterest
income. If not for the sale of the insurance agency, the percentage of net interest income as a share of total net revenue would
be consistent with prior years. The primary concerns in managing net interest income are the volume, mix and repricing of
assets and liabilities.
As discussed below, net interest income decreased 1.37% to $512,196 for 2024 compared to $519,327 in 2023. On a tax
equivalent basis, net interest income decreased $7,814 to $522,526 in 2024 as compared to $530,340 in 2023. Net interest
margin was 3.34% for 2024 as compared to 3.45% for 2023.
The following table sets forth the daily average balance sheet data, including all major categories of interest-earning assets and
interest-bearing liabilities, together with the interest earned or interest paid and the average yield or average rate on each such
category for the years ended December 31, 2024, 2023 and 2022:
43
2024
2023
2022
Average
Balance
Interest
Income/
Expense
Yield/
Rate
Average
Balance
Interest
Income/
Expense
Yield/
Rate
Average
Balance
Interest
Income/
Expense
Yield/
Rate
Assets
Interest-earning assets:
Loans held for investment(1)
$ 12,579,143
$ 801,807
6.37 %
$ 11,963,141
$ 713,897
5.97 %
$ 10,677,995
$ 476,746
4.15 %
Loans held for sale
224,734
13,614
6.06 %
181,253
11,807
6.51 %
203,981
9,212
4.52 %
Securities:
Taxable(2)
1,825,404
37,383
2.05 %
2,313,874
44,619
1.93 %
2,699,556
45,769
1.70 %
Tax-exempt
264,615
5,746
2.17 %
332,749
7,634
2.29 %
401,960
9,636
2.40 %
Total securities
2,090,019
43,129
2.06 %
2,646,623
52,253
1.97 %
3,101,516
55,405
1.79 %
Interest-bearing balances with banks
772,274
39,557
5.12 %
568,155
30,375
5.35 %
846,768
8,853
1.05 %
Total interest-earning assets
15,666,170
898,107
5.73 %
15,359,172
808,332
5.26 %
14,830,260
550,216
3.71 %
Cash and due from banks
188,487
187,127
201,419
Intangible assets
1,006,665
1,012,239
967,018
Other assets
691,373
673,345
639,155
Total assets
$ 17,552,695
$ 17,231,883
$ 16,637,852
Liabilities and shareholders’ equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand(3)
$ 7,254,646
$ 226,563
3.12 %
$ 6,357,753
$ 138,730
2.18 %
$ 6,420,905
$ 25,840
0.40 %
Savings deposits
829,818
2,894
0.35 %
971,522
3,197
0.33 %
1,116,013
1,023
0.09 %
Brokered deposits
237,164
12,942
5.46 %
697,699
36,039
5.17 %
23,634
1,072
— %
Time deposits
2,466,906
104,193
4.22 %
1,874,224
54,365
2.90 %
1,310,398
7,273
0.56 %
Total interest-bearing deposits
10,788,534
346,592
3.21 %
9,901,198
232,331
2.35 %
8,870,950
35,208
0.40 %
Borrowed funds
566,332
28,989
5.12 %
890,765
45,661
5.13 %
624,887
25,304
4.05 %
Total interest-bearing liabilities
11,354,866
375,581
3.31 %
10,791,963
277,992
2.58 %
9,495,837
60,512
0.64 %
Noninterest-bearing deposits
3,509,958
3,979,951
4,760,432
Other liabilities
221,487
235,463
196,980
Shareholders’ equity
2,466,384
2,224,506
2,184,603
Total liabilities and shareholders’ equity
$ 17,552,695
$ 17,231,883
$ 16,637,852
Net interest income/ net interest margin
$ 522,526
3.34 %
$ 530,340
3.45 %
$ 489,704
3.31 %
(1)
Shown net of unearned income.
(2)
U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which we operate.
(3)
Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.
The daily average balances of nonaccruing assets are included in the foregoing table. Interest income and weighted average
yields on tax-exempt loans and securities have been computed on a fully tax equivalent basis assuming a federal tax rate of 21%
and a state tax rate of 4.45%, which is net of federal tax benefit.
Net interest income and net interest margin are influenced by internal and external factors. Internal factors include balance sheet
changes in volume and mix as well as loan and deposit pricing decisions. External factors include changes in market interest
rates, competition and the shape of the interest rate yield curve. During 2024, the decline in net interest income and margin was
primarily driven by the increase in the cost of deposits year over year. The higher interest rate environment continued to benefit
yields on earnings assets, which, coupled with steady loan growth, resulted in an increase in interest income year over year, but
this increase was offset by an increase in deposit interest expense. The rate environment negatively impacted both the cost and
mix of our funding sources while we continued to grow deposits. The Company has continued its efforts to mitigate increases in
the cost of funding through maintaining noninterest-bearing deposits and staying disciplined yet competitive in pricing on
interest-bearing deposits in the current rate environment.
The following table sets forth a summary of the changes in interest earned, on a tax equivalent basis, and interest paid resulting
from changes in volume and rates for the Company for the years indicated. Information is provided in each category with
respect to changes attributable to (1) changes in volume (changes in volume multiplied by prior yield/rate); (2) changes in yield/
rate (changes in yield/rate multiplied by prior volume); and (3) changes in both yield/rate and volume (changes in yield/rate
44
multiplied by changes in volume). The changes attributable to the combined impact of yield/rate and volume have been
allocated on a pro-rata basis using the absolute ratio value of amounts calculated.
2024 Compared to 2023
2023 Compared to 2022
Volume
Rate
Net
Volume
Rate
Net
Interest income:
Loans
$
37,847 $
50,063 $
87,910 $
62,453 $ 174,698 $ 237,151
Loans held for sale
2,679
(872)
1,807
(1,118)
3,713
2,595
Securities:
Taxable
(9,871)
2,635
(7,236)
(6,997)
5,847
(1,150)
Tax-exempt
(1,497)
(391)
(1,888)
(1,602)
(400)
(2,002)
Interest-bearing balances with banks
10,503
(1,321)
9,182
(3,800)
25,322
21,522
Total interest-earning assets
39,661
50,114
89,775
48,936
209,180
258,116
Interest expense:
Interest-bearing demand deposits
21,651
66,182
87,833
(257)
113,147
112,890
Savings deposits
(486)
183
(303)
(149)
2,323
2,174
Brokered deposits
(25,025)
1,928
(23,097)
34,798
169
34,967
Time deposits
20,402
29,426
49,828
4,351
42,741
47,092
Borrowed funds
(17,553)
881
(16,672)
12,535
7,822
20,357
Total interest-bearing liabilities
(1,011)
98,600
97,589
51,278
166,202
217,480
Change in net interest income
$
40,672 $ (48,486) $
(7,814) $
(2,342) $
42,978 $
40,636
The daily average balances of nonaccruing assets are included in the foregoing table. Interest income and weighted average
yields on tax-exempt loans and securities have been computed on a fully tax equivalent basis assuming a federal tax rate of 21%
and a state tax rate of 4.45%, which is net of federal tax benefit.
Interest income, on a tax equivalent basis, was $898,107 for 2024 compared to $808,332 for 2023, an increase of $89,775. The
following table presents the percentage of total average earning assets, by type and yield, for 2024 and 2023:
Percentage of Total
Yield
2024
2023
2024
2023
Loans held for investment
80.29 %
77.89 %
6.37 %
5.97 %
Loans held for sale
1.43
1.18
6.06
6.51
Securities
13.34
17.23
2.06
1.97
Interest-bearing balances with banks
4.94
3.70
5.12
5.35
Total earning assets
100.00 %
100.00 %
5.73 %
5.26 %
In 2024, interest income on loans held for investment, on a tax equivalent basis, increased $87,910 to $801,807 from $713,897
in 2023. This increase was primarily due to a $616,002 increase in our average balance of loans to $12,579,143 in 2024 from
$11,963,141 in 2023, bolstered by a continued mix shift from the repricing of maturing fixed rate lower yielding assets into
higher yielding assets
The impact from interest income collected on problem loans and purchase accounting adjustments on purchased loans to total
interest income on loans, loan yield and net interest margin is shown in the table below for the periods presented:
Twelve months ended December 31,
2024
2023
Net interest income collected on problem loans
$
770
$
219
Accretable yield recognized on purchased loans
3,402
4,166
Total impact to interest income on loans
$
4,172
$
4,385
Impact to total loan yield
0.03 %
0.04 %
Impact to net interest margin
0.03 %
0.03 %
Interest income on loans held for sale, on a tax equivalent basis, increased $1,807 to $13,614 in 2024 from $11,807 in 2023, due
to an increase in average balances during 2024, offset by a decrease in the yield on loans held for sale during the year.
45
In 2024, investment income, on a tax equivalent basis, decreased $9,124 to $43,129 from $52,253 in 2023, primarily due to the
decrease in the balance of the securities portfolio during the year, offset slightly by the increase in yield on securities during
2024 due to the sale or maturity of lower yielding securities. The following table presents the taxable equivalent yield on
securities for the periods presented:
Twelve months ended December 31,
2024
2023
Taxable equivalent interest income on securities
$
43,129
$
52,253
Average securities
$
2,090,019
$
2,646,623
Taxable equivalent yield on securities
2.06 %
1.97 %
Interest expense was $375,581 in 2024 compared to $277,992 in 2023. The following table presents, by type, the Company’s
funding sources, which consist of total average deposits and borrowed funds, and the total cost of each funding source for each
of the years presented:
Percentage of Total
Cost of Funds
2024
2023
2024
2023
Noninterest-bearing demand
23.61 %
26.94 %
— %
— %
Interest-bearing demand
48.80
43.04
3.12
2.18
Savings
5.58
6.58
0.35
0.33
Brokered deposits
1.60
4.72
5.46
5.17
Time deposits
16.60
12.69
4.22
2.90
Borrowed funds
3.81
6.03
5.12
5.13
Total deposits and borrowed funds
100.00 %
100.00 %
2.53 %
1.88 %
Interest expense on deposits was $346,592 and $232,331 for 2024 and 2023, respectively. The cost of total deposits was 2.42%
and 1.67% for the years ending December 31, 2024 and 2023, respectively. The cost of interest-bearing deposits was 3.21% and
2.35% for the same respective periods. The increase in both deposit expense and cost is attributable to the Company’s efforts to
offer competitive deposit rates in the high interest rate environment and the continued focus on deposit growth, even while the
Company continued its efforts to maintain noninterest-bearing deposits. Low cost deposits continue to be the preferred choice
of funding; however, the Company may rely on brokered deposits or wholesale borrowings when advantageous or otherwise
deemed advisable due to market conditions.
Interest expense on total borrowings was $28,989 and $45,661 for the years ending December 31, 2024 and 2023, respectively,
while the cost of total borrowings was 5.12% and 5.13% for the years ended December 31, 2024 and 2023, respectively. The
decrease in interest expense is a result of lower average borrowings during 2024.
A more detailed discussion of the cost of our funding sources is set forth below under the heading “Liquidity and Capital
Resources” in this item.
Noninterest Income
Noninterest Income to Average Assets
2024
2023
1.16%
0.66%
Total noninterest income includes fees generated from deposit services and other fees and commissions, income from our
insurance, wealth management and mortgage banking operations, realized gains and losses on the sale or impairment of
securities and all other noninterest income. Our focus is to develop and enhance our products that generate noninterest income
in order to diversify our revenue sources. Noninterest income as a percentage of total net revenue was 28.05% and 17.57% for
2024 and 2023, respectively. Noninterest income was $203,660 for the year ended December 31, 2024, an increase of $90,585,
or 80.11%, as compared to $113,075 for 2023. The increase during the year was driven primarily by the gain on the sale of
Renasant Insurance in July 2024 (which is also the reason that our noninterest income as a percentage of total net revenue was
elevated as compared to 2023). The Company also recognized a loss on the sale of securities (including impairment charges)
during 2023.
46
Service charges on deposit accounts include maintenance fees on accounts, per item charges, account enhancement charges for
additional packaged benefits and overdraft fees. Service charges on deposit accounts were $41,779 and $39,199 for the twelve
months ended December 31, 2024 and 2023, respectively. Overdraft fees, the largest component of service charges on deposits,
increased to $20,611 for the twelve months ended December 31, 2024 compared to $20,095 for the same period in 2023.
Fees and commissions decreased to $16,190 in 2024 as compared to $17,901 in 2023. Fees and commissions include fees
related to deposit services, such as ATM fees and interchange fees on debit card transactions. Interchange fees on debit card
transactions, the largest component of fees and commissions, were $8,911 for the twelve months ended December 31, 2024
compared to $9,383 for the same period in 2023.
The Company sold Renasant Insurance in July 2024 recognizing a gross gain on sale of $53,349. Prior to the sale, income
earned on insurance products in 2024 was $5,473, as compared to $11,102 for the year ended December 31, 2023. Contingency
income is a bonus received from the insurance underwriters and is based both on commission income and claims experience on
our clients’ policies during the previous year. Increases and decreases in contingency income are reflective of corresponding
increases and decreases in the amount of claims paid by insurance carriers. Contingency income, which is included in the
“Other noninterest income” line item on the Consolidated Statements of Income, was $987 and $970 for 2024 and 2023,
respectively.
Our Wealth Management segment has two divisions: Trust and Financial Services. The Trust division operates on a custodial
basis which includes administration of benefit plans, as well as accounting and money management for trust accounts. The
division manages a number of trust accounts inclusive of personal and corporate benefit accounts, IRAs, and custodial accounts.
Fees for managing these accounts are based on changes in market values of the assets under management in the account, with
the amount of the fee depending on the type of account. The Financial Services division provides specialized products and
services to our customers, which include fixed and variable annuities, mutual funds, and stocks offered through a third party
provider. Wealth Management revenue was $23,559 for 2024 compared to $22,132 for 2023. The market value of assets under
management or administration was $6,472,526 and $5,238,131 at December 31, 2024 and 2023, respectively.
Mortgage banking income is derived from the origination and sale of mortgage loans and the servicing of mortgage loans that
the Company has sold but retained the right to service. Although loan fees and some interest income are derived from mortgage
loans held for sale, the main source of income is gains from the sale of these loans in the secondary market. Originations of
mortgage loans to be sold totaled $1,400,467 in 2024 and $1,330,912 in 2023. In 2024, the Company sold a portion of its
mortgage servicing rights portfolio with a carrying value of $19,539 for a pre-tax gain of $3,472. The Company recognized a
gain of $547 in 2023 related to the release of a holdback on previously sold mortgage servicing rights assets.
The following table presents the components of mortgage banking income included in noninterest income at December 31:
2024
2023
Gain on sales of loans, net(1)
$
16,612 $
14,573
Fees, net
10,216
9,051
Mortgage servicing income, net(2)
9,548
8,789
Mortgage banking income, net
$
36,376 $
32,413
(1) Gain on sales of loans, net includes pipeline fair value adjustments
(2) Mortgage servicing income, net includes gain on sale of mortgage servicing rights of $3,724 and $547, respectively.
Losses on sales of securities for the twelve months ended 2023 were $22,438, resulting from the sale of approximately
$511,419 in securities. The Company also determined to sell a portion of its available-for-sale securities portfolio in December
2023 and thus recognized an impairment on those identified securities of $19,352 as of year-end (the securities were
subsequently sold in January 2024). There were no other net gains or losses on sales of securities during 2024. For more
information on securities sold in 2024, see Note 2, “Securities,” in the Notes to Consolidated Financial Statements in Item 8,
Financial Statements and Supplementary Data, in this report.
Bank-owned life insurance (“BOLI”) income is derived from changes in the cash surrender value of the bank-owned life
insurance policies and can fluctuate upon the collection of life insurance proceeds. BOLI income increased to $11,567 in 2024
as compared to $10,463 in 2023.
Other noninterest income was $15,311 for 2024 compared to $21,035 for 2023. In addition to the contingency income described
above, other noninterest income includes income from our SBA banking division, our capital markets division and other
miscellaneous income and can fluctuate based on production within our SBA and capital markets divisions and recognition of
47
other nonseasonal income items. For 2023 other noninterest income included a one-time payment of $2,300 related to our
participation in a recovery agreement assumed as part of a previous acquisition.
Noninterest Expense
Noninterest Expense to Average Assets
2024
2023
2.63%
2.55%
Noninterest expense was $461,618 and $439,622 for 2024 and 2023, respectively.
Salaries and employee benefits is the largest component of noninterest expense and represented 61.47% and 64.09% of total
noninterest expense at December 31, 2024 and 2023, respectively. During 2024, salaries and employee benefits increased
$2,000, or 0.71%, to $283,768 as compared to $281,768 for 2023. The increase in salaries and employee benefits is primarily
due to annual merit increases implemented in April 2024 along with increased health and life insurance costs due to unusual
claims experience.
Compensation expense recorded in connection with awards of restricted stock, which is included within salaries and employee
benefits, was $12,736 and $12,746 for 2024 and 2023, respectively. A portion of the restricted stock awards in both years was
subject to the satisfaction of performance-based conditions.
Data processing costs increased $835 to $16,030 in 2024 from $15,195 in 2023. The Company continues to examine new and
existing contracts to negotiate favorable terms to offset the increased variable cost components of our data processing costs,
such as new accounts and increased transaction volume.
Net occupancy and equipment expense in 2024 was $45,960, a decrease of $511 from $46,471 for 2023.
Professional fees include fees for legal and accounting services, such as routine litigation matters, external audit services as well
as assistance in complying with newly-enacted and existing banking and governmental regulation. Professional fees were
$12,418 for 2024 as compared to $13,671 for 2023.
Advertising and public relations expense was $16,210 for 2024, an increase of $1,484 compared to $14,726 for 2023. During
2024 and 2023, the Company contributed approximately $1,255 and $1,392, respectively, to charitable organizations
throughout Mississippi, Georgia and Alabama, for which it received a dollar-for-dollar tax credit, and such contributions are
included in our advertising and public relations expense.
Amortization of intangible assets totaled $4,691 for 2024 compared to $5,380 for 2023. This amortization relates to finite-lived
intangible assets which are being amortized over the useful lives as determined at acquisition. These finite-lived intangible
assets have remaining estimated useful lives ranging from approximately one year to ten years.
Communication expenses are those expenses incurred for communication to clients and between employees. Communication
expenses were $8,379 for 2024 as compared to $8,238 for 2023.
Merger and conversion related expenses totaled $13,349 in 2024. These expenses are related to the announced acquisition of
The First and the sale of Renasant Insurance. There were no such expense in 2023.
Other noninterest expense includes business development and travel expenses, other discretionary expenses, loan fees expense,
fraud losses and other miscellaneous fees and operating expenses. Other noninterest expense was $59,955 for 2024 as compared
to $53,906 for 2023. Increased levels of fraud losses from, for example, counterfeit or forged checks, unauthorized debit card
charges and wire fraud, is the primary reason for the increase in other noninterest expense. Working with its vendors, the
Company is actively working to implement policies and procedures designed to curtail the opportunity for, and the losses
resulting from, fraud.
Efficiency Ratio
Efficiency Ratio
2024
2023
63.57%
68.33%
The efficiency ratio is a measure of productivity in the banking industry. (This ratio is a measure of our ability to turn expenses
into revenue. That is, the ratio is designed to reflect the percentage of one dollar which must be expended to generate a dollar of
revenue.) The Company calculates this ratio by dividing noninterest expense by the sum of net interest income on a fully tax
48
equivalent basis and noninterest income. The efficiency ratio for 2024 was positively impacted by 504 basis points due to the
sale of the insurance agency and was negatively impacted by 184 basis points due to merger and conversion expenses. The
efficiency ratio for 2023 was negatively impacted by 496 basis points due to losses and impairments on strategic sales of
securities. We remain committed to aggressively managing our costs within the framework of our business model. Our goal is
to improve the efficiency ratio over time from currently reported levels as a result of revenue growth while at the same time
controlling noninterest expenses.
Income Taxes
Income tax expense for 2024 and 2023 was $49,508 and $32,509, respectively. The effective tax rates for those years were
20.21% and 18.35%, respectively, with the increase in rate driven primarily by changes in the Company’s BOLI portfolio,
nondeductible transaction costs related to our potential merger with The First and the gain on the divestiture of the insurance
agency. For additional information regarding the Company’s income taxes, please refer to in Note 14, “Income Taxes,” in the
Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report.
Risk Management
The management of risk is an on-going process. Primary risks that are associated with the Company include credit, interest rate
and liquidity risk. Credit and interest rate risk are discussed below, while liquidity risk is discussed in the next subsection under
the heading “Liquidity and Capital Resources.”
Credit Risk and Allowance for Credit Losses on Loans and Unfunded Commitments
Management of Credit Risk. Inherent in any lending activity is credit risk, that is, the risk of loss should a borrower default.
Credit risk is monitored and managed on an ongoing basis by a credit administration department, a problem asset resolution
committee and the Board of Directors Credit Review Committee. Oversight of the Company’s lending operations (including
adherence to our policies and procedures governing the loan underwriting and monitoring process), credit quality and loss
mitigation are major concerns of credit administration and these committees. The Company’s central appraisal review
department reviews and approves third-party appraisals obtained by the Company on real estate collateral and monitors loan
maturities to ensure updated appraisals are obtained. This department is managed by a State Certified General Real Estate
Appraiser and employs three additional State Certified General Real Estate Appraisers and four real estate evaluators. In
addition, we maintain a loan review staff to independently monitor loan quality and lending practices. Loan review personnel
monitor and, if necessary, adjust the grades assigned to loans through periodic examination, focusing their review on
commercial and real estate loans rather than consumer and small balance consumer mortgage loans, such as 1-4 family
mortgage loans.
In compliance with loan policy, the lending staff is given lending limits based on their knowledge and experience. In addition,
each lending officer’s prior performance is evaluated for credit quality and compliance as a tool for establishing and enhancing
lending limits. Before funds are advanced on consumer and commercial loans below certain dollar thresholds, loans are
reviewed and scored using centralized underwriting methodologies. Loan quality, or “risk-rating,” grades are assigned based
upon certain factors, which include the scoring of the loans. This information is used to assist management in monitoring credit
quality. Loan requests are reviewed for approval by senior credit officers.
For commercial and commercial real estate secured loans, internal risk-rating grades are assigned by lending, credit
administration and loan review personnel, based on an analysis of the financial and collateral strength and other credit attributes
underlying each loan. Loan grades range from 10 to 95, with 10 rated loans having the least credit risk. For more information
about the Company’s loan grades, see the information under the heading “Credit Quality” in Note 3, “Loans,” in the Notes to
Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report.
Management’s problem asset resolution committee and the Board of Directors Credit Review Committee monitor loans that are
past due or those that have been downgraded and are considered special mention or substandard due to a decline in the
collateral value or cash flow of the debtor; the committees then adjust loan grades accordingly. This information is used to
assist management in monitoring credit quality. When the ultimate collectability of a loan’s principal is in doubt, wholly or
partially, the loan is placed on nonaccrual.
After all collection efforts have failed, collateral securing loans may be repossessed and sold or, for loans secured by real estate,
foreclosure proceedings initiated. The collateral is sold at public auction for fair market value (based upon recent appraisals
described in the above paragraph), with fees associated with the foreclosure being deducted from the sales price. The purchase
price is applied to the outstanding loan balance. If the loan balance is greater than the sales proceeds, the deficient balance is
sent to the Credit Review Committee for charge-off approval. These charge-offs reduce the allowance for credit losses on loans.
49
Charge-offs reflect the realization of losses in the portfolio that were recognized previously through the provision for credit
losses on loans.
The Company’s practice is to charge off estimated losses as soon as such loss is identified and reasonably quantified. Net
charge-offs for 2024 were $8,070, or 0.06% as a percentage of average loans, compared to net charge-offs of $12,330, or 0.10%
as a percentage of average loans, for 2023. The charge-offs in 2024 were fully reserved for in the Company’s allowance for
credit losses.
Allowance for Credit Losses on Loans; Provision for Credit Losses on Loans. The allowance for credit losses is available to
absorb credit losses inherent in the loans held for investment portfolio. Loan losses are charged against the allowance for credit
losses when management confirms the uncollectability of a loan balance. Subsequent recoveries, if any, are credited to the
allowance. Management evaluates the adequacy of the allowance on a quarterly basis. For an in-depth discussion of our
accounting policies and our methodology for determining the appropriate level of the allowance for credit losses, please refer to
the information in the “Critical Accounting Policies and Estimates” section above as well as the information under the headings
“Loans and the Allowance for Credit Losses” and “Business Combinations, Accounting for Purchased Credit Deteriorated
Loans and Related Assets” in Note 1, “Significant Accounting Policies,” in the Notes to Consolidated Financial Statements in
Item 8, Financial Statements and Supplementary Data, in this report.
In addition to its quarterly analysis of the allowance for credit losses, on a regular basis, management and the Board of
Directors review loan ratios. These ratios include the allowance for credit losses as a percentage of total loans, net charge-offs
as a percentage of average loans, nonperforming loans as a percentage of total loans and the allowance coverage on
nonperforming loans. Also, management reviews past due ratios by officer, community bank and the Company as a whole.
The allowance for credit losses on loans was $201,756 and $198,578 at December 31, 2024 and 2023, respectively. The
following table presents the allocation of the allowance for credit losses on loans and the percentage of each loan category to
total loans at December 31 for each of the years presented.
2024
2023
Balance
% of
Total
Balance
% of
Total
Commercial, financial, agricultural
$
38,527
14.64 % $
43,980
15.15 %
Lease financing
3,368
0.70 %
2,515
0.94 %
Real estate – construction
15,126
8.49 %
18,612
10.79 %
Real estate – 1-4 family mortgage
47,761
27.07 %
47,283
27.85 %
Real estate – commercial mortgage
90,204
48.40 %
77,020
44.43 %
Installment loans to individuals
6,770
0.70 %
9,168
0.84 %
Total
$
201,756 100.00 % $
198,578 100.00 %
The provision for credit losses on loans charged to operating expense is an amount that, in the judgment of management, is
necessary to maintain the allowance for credit losses on loans at a level that is believed to be adequate to meet the inherent risks
of losses in our loan portfolio. The Company recorded a provision for credit losses on loans of $11,248 during 2024, as
compared to $18,793 during 2023. The Company’s allowance for credit loss model considers economic projections, primarily
the national unemployment rate and GDP, over a reasonable and supportable period of two years. While credit metrics
remained relatively stable, loan growth caused the Company’s model to indicate that the aforementioned provision for credit
losses on loans was appropriate during 2024.
Provision for Credit Losses on Loans to Average Loans
2024
2023
0.16%
0.16%
50
The table below reflects the activity in the allowance for credit losses on loans for the years ended December 31:
2024
2023
Balance at beginning of year
$ 198,578
$ 192,090
Initial allowance for purchased loans with more than insignificant credit deterioration existing
at the date of acquisition
—
25
Provision for credit losses on loans
11,248
18,793
Charge-offs
Commercial, financial, agricultural
4,463
8,838
Lease financing
642
1,524
Real estate – construction
145
57
Real estate – 1-4 family mortgage
966
417
Real estate – commercial mortgage
5,737
5,568
Installment loans to individuals
1,856
2,636
Total charge-offs
13,809
19,040
Recoveries
Commercial, financial, agricultural
1,710
3,090
Lease financing
34
18
Real estate – construction
—
48
Real estate – 1-4 family mortgage
166
389
Real estate – commercial mortgage
2,278
712
Installment loans to individuals
1,551
2,453
Total recoveries
5,739
6,710
Net charge-offs
8,070
12,330
Balance at end of year
$ 201,756
$ 198,578
Provision for credit losses on loans to average loans
0.09 %
0.16 %
Net charge-offs to average loans
0.06 %
0.10 %
Net charge-offs to allowance for credit losses on loans
4.00 %
6.21 %
Allowance for credit losses on loans to:
Total loans
1.57 %
1.61 %
Nonperforming loans
178.11 %
286.26 %
Nonaccrual loans
182.07 %
288.56 %
Nonaccrual loans to total loans:
0.88 %
0.56 %
The decrease in the ratio of the allowance for credit losses on loans to each of nonperforming loans and nonaccrual loans is
primarily attributable to the increase in nonaccrual loans from the prior year. The migration of three large relationships
accounted for a significant majority of the increase in nonaccrual loans from 2023. The reserve for each loan, if any, is derived
from the value of the underlying collateral and is believed to be sufficient to cover any expected loss.
51
The table below reflects net charge-offs to daily average loans outstanding, by loan category, during the years ended
December 31:
2024
2023
Net
Charge-
offs
Average
Loans
Net
Charge-offs
to Average
Loans
Net
Charge-
offs
Average
Loans
Net
Charge-offs
to Average
Loans
Commercial, financial, agricultural
$ 2,753 $ 1,848,195
0.15 %
$ 5,748 $ 1,761,103
0.33 %
Lease financing
608
101,517
0.60 %
1,506
119,376
1.26 %
Real estate – construction
145
1,264,819
0.01 %
9
1,347,228
— %
Real estate – 1-4 family mortgage
800
3,427,368
0.02 %
28
3,382,553
— %
Real estate – commercial mortgage
3,459
5,842,796
0.06 %
4,856
5,241,881
0.09 %
Installment loans to individuals
305
94,448
0.32 %
183
111,000
0.16 %
Total
$ 8,070 $ 12,579,143
0.06 %
$ 12,330 $ 11,963,141
0.10 %
The following table provides further details of the Company’s net charge-offs (recoveries) of loans secured by real estate for the
years ended December 31:
2024
2023
Real estate – construction:
Residential
$
145 $
9
Real estate – 1-4 family mortgage:
Primary
392
(111)
Home equity
414
76
Rental/investment
(5)
82
Land development
(1)
(19)
Total real estate – 1-4 family mortgage
800
28
Real estate – commercial mortgage:
Owner-occupied
(75)
157
Non-owner occupied
3,527
4,699
Land development
7
—
Total real estate – commercial mortgage
3,459
4,856
Total net charge-offs of loans secured by real estate
$
4,404 $
4,893
Allowance for Credit Losses on Unfunded Commitments; Provision for Credit Losses on Unfunded Commitments. The
Company maintains a separate allowance for credit losses on unfunded loan commitments, which is included in the “Other
liabilities” line item on the Consolidated Balance Sheets. Management estimates the amount of expected losses on unfunded
loan commitments by calculating a likelihood of funding over the contractual period for exposures that are not unconditionally
cancellable by the Company and applying the loss factors used in the allowance for credit loss on loans methodology described
above to unfunded commitments for each loan type. No credit loss estimate is reported for off-balance-sheet credit exposures
that are unconditionally cancellable by the Company. A roll-forward of the allowance for credit losses on unfunded
commitments is shown in the table below.
Year Ended December 31,
2024
2023
Allowance for credit losses on unfunded loan commitments:
Beginning balance
$
16,918 $
20,118
Recovery of credit losses on unfunded loan commitments
(1,975)
(3,200)
Ending balance
$
14,943 $
16,918
52
Nonperforming Assets. Nonperforming assets consist of nonperforming loans and other real estate owned. Nonperforming
loans are loans on which the accrual of interest has stopped and loans that are contractually 90 days past due on which interest
continues to accrue. Generally, the accrual of interest is discontinued when the full collection of principal or interest is in doubt
or when the payment of principal or interest has been contractually 90 days past due, unless the obligation is both well secured
and in the process of collection. Management, the problem asset resolution committee and our loan review staff closely monitor
loans that are considered to be nonperforming.
Other real estate owned consists of properties acquired through foreclosure or acceptance of a deed in lieu of foreclosure. These
properties are carried at the lower of cost or fair market value based on appraised value less estimated selling costs. Losses
arising at the time of foreclosure of properties are charged against the allowance for credit losses. Reductions in the carrying
value subsequent to acquisition are charged to earnings and are included in “Other real estate owned” in the Consolidated
Statements of Income.
The following table provides details of the Company’s nonperforming assets as of December 31 for each of the years presented.
2024
2023
Nonaccruing loans
$
110,811
$
68,816
Accruing loans past due 90 days or more
2,464
554
Total nonperforming loans
113,275
69,370
Other real estate owned
8,673
9,622
Total nonperforming assets
$
121,948
$
78,992
Nonperforming loans to total loans
0.88 %
0.56 %
Nonaccruing loans to total loans
0.88 %
0.56 %
Nonperforming assets to total assets
0.68 %
0.46 %
The level of nonperforming loans increased $43,905 from December 31, 2023, while other real estate owned decreased $949
during the same period. The increase in nonperforming loans is primarily due to current macroeconomic conditions with the
impact spread among commercial and consumer loans.
The following table presents nonperforming loans by loan category at December 31 for each of the years presented.
2024
2023
Commercial, financial, agricultural
$
2,000 $
6,282
Lease financing
4,083
—
Real estate – construction:
Residential
1,223
—
Commercial
16
—
Total real estate – construction
1,239
—
Real estate – 1-4 family mortgage:
Primary
55,037
44,174
Home equity
3,404
2,849
Rental/investment
388
2,238
Land development
1,760
19
Total real estate – 1-4 family mortgage
60,589
49,280
Real estate – commercial mortgage:
Owner-occupied
12,679
3,373
Non-owner occupied
29,280
9,774
Land development
3,291
300
Total real estate – commercial mortgage
45,250
13,447
Installment loans to individuals
114
361
Total nonperforming loans
$ 113,275 $
69,370
53
Management has evaluated the aforementioned loans and other loans classified as nonperforming and believes that all
nonperforming loans have been adequately reserved for in the allowance for credit losses on loans at December 31, 2024.
Management also continually monitors past due loans for potential credit quality deterioration. Total loans 30-89 days past due
on which interest was still accruing were $39,842 at December 31, 2024 as compared to $54,031 at December 31, 2023.
Certain modifications of loans made to borrowers experiencing financial difficulty in the form of principal forgiveness, an
interest rate reduction, an other-than-insignificant payment delay (including extension of the amortization period), or a term
extension, excluding covenant waivers and modification of contingent acceleration clauses, are required to be disclosed in
accordance with ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage
Disclosures” (“ASU 2022-02”). Unused commitments relating to such modified loans totaled $1,135 and $3,115 at December
31, 2024 and 2023, respectively. Upon the Company’s determination that a modification has been subsequently deemed
uncollectible, the loan, or portion of the loan, is charged off, the amortized cost basis of the loan is reduced by the uncollectible
amount, and the allowance for credit losses is adjusted accordingly. See the information under the heading “Certain
Modifications to Borrowers Experiencing Financial Difficulties” in Note 3, “Loans,” Item 8, Financials Statements and
Supplementary Data, in this report for more information.
The following table provides details of the Company’s other real estate owned as of December 31 for each of the years
presented:
2024
2023
Residential real estate
$
2,966 $
1,211
Commercial real estate
5,681
8,407
Residential land development
19
4
Commercial land development
7
—
Total other real estate owned
$
8,673 $
9,622
Changes in the Company’s other real estate owned were as follows for the periods presented:
2024
2023
Balance as of January 1
$
9,622 $
1,763
Transfers of loans
5,037
10,738
Impairments
(438)
(18)
Dispositions
(3,123)
(2,840)
Other
(2,425)
(21)
Balance as of December 31
$
8,673 $
9,622
We realized net gains of $227 and $275 on dispositions of other real estate owned during 2024 and 2023, respectively.
Interest Rate Risk
Market risk is the risk of loss from adverse changes in market prices and rates. The majority of assets and liabilities of a
financial institution are monetary in nature and therefore differ greatly from most commercial and industrial companies that
have significant investments in fixed assets and inventories. Our market risk arises primarily from interest rate risk inherent in
lending and deposit-taking activities. Management believes a significant impact on the Company’s financial results stems from
our ability to react to changes in interest rates. A sudden and substantial change in interest rates may adversely impact our
earnings because the interest rates borne by assets and liabilities do not change at the same speed, to the same extent or on the
same basis.
Because of the impact of interest rate fluctuations on our profitability, the Board of Directors and management actively monitor
and manage our interest rate risk exposure. We have an Asset/Liability Committee (the “ALCO”) that is authorized by the
Board of Directors to monitor our interest rate sensitivity and to make decisions relating to that process. The ALCO’s goal is to
structure our asset/liability composition to maximize net interest income while managing interest rate risk so as to minimize the
adverse impact of changes in interest rates on net interest income and capital. The ALCO uses an asset/liability model as the
primary quantitative tool in measuring the amount of interest rate risk associated with changing market rates. The model is
used to perform both net interest income forecast simulations for multiple year horizons and economic value of equity (“EVE”)
analyses, each under various interest rate scenarios, which could impact the results presented in the table below.
54
Net interest income simulations measure the short and medium-term earnings exposure from changes in market interest rates in
a rigorous and explicit fashion. Our current financial position is combined with assumptions regarding future business to
calculate net interest income under various hypothetical rate scenarios. EVE measures our long-term earnings exposure from
changes in market rates of interest. EVE is defined as the present value of assets minus the present value of liabilities at a point
in time for a given set of market rate assumptions. An increase in EVE due to a specified rate change indicates an improvement
in the long-term earnings capacity of the balance sheet assuming that the rate change remains in effect over the life of the
current balance sheet.
The following table presents the projected impact of a change in interest rates on (1) static EVE and (2) earnings at risk (that is,
net interest income) for the 1-12 and 13-24 month periods commencing January 1, 2025, in each case as compared to the result
under rates present in the market on December 31, 2024. The changes in interest rates assume an instantaneous and parallel
shift in the yield curve and do not take into account changes in the slope of the yield curve.
Percentage Change In:
Immediate Change in Rates of:
Economic Value Equity
(EVE)
Earning at Risk (EAR)
(Net Interest Income)
Static
1-12 Months
13-24 Months
+200
4.44%
6.40%
8.83%
+100
2.69%
3.75%
4.99%
-100
(3.48)%
(4.48)%
(5.71)%
-200
(7.79)%
(8.33)%
(11.08)%
The rate shock results for the EVE and net interest income simulations for the next 24 months produce an asset sensitive
position at December 31, 2024.
The preceding measures assume no change in the size or asset/liability compositions of the balance sheet, and they do not
reflect future actions the ALCO may undertake in response to such changes in interest rates.
The scenarios assume instantaneous movements in interest rates in the increments described in the table above. As interest rates
are adjusted over a period of time, it is our strategy to proactively change the volume and mix of our balance sheet in order to
mitigate our interest rate risk. The computation of the prospective effects of hypothetical interest rate changes requires
numerous assumptions including asset prepayment speeds, the impact of competitive factors on our pricing of loans and
deposits, how responsive our deposit repricing is to the change in market rates and the expected life of non-maturity deposits.
These business assumptions are based upon our experience, business plans and published industry experience. Such
assumptions may not necessarily reflect the manner or timing in which cash flows, asset yields and liability costs respond to
changes in market rates. Because these assumptions are inherently uncertain, actual results will differ from simulated results.
The Company utilizes derivative financial instruments, including interest rate contracts such as swaps, caps and/or floors,
forward commitments, and interest rate lock commitments, as part of its ongoing efforts to mitigate its interest rate risk
exposure. For more information about the Company’s derivative financial instruments, see the “Off-Balance Sheet
Transactions” section below and Note 13, “Derivative Instruments,” in the Notes to Consolidated Financial Statements in
Item 8, Financial Statements and Supplementary Data, in this report.
Liquidity and Capital Resources
Liquidity management is the ability to meet the cash flow requirements of customers who may be either depositors wishing to
withdraw funds or borrowers needing assurance that sufficient funds will be available to meet their credit needs.
Core deposits, which are deposits excluding time deposits greater than $250,000 and brokered deposits, are the major source of
funds used by the Bank to meet short- and long-term cash flow needs. Maintaining the ability to acquire these funds as needed
in a variety of markets is the key to assuring the Bank’s liquidity. We may also choose to access the brokered deposit market
where rates are favorable to other sources of liquidity. We did not hold any brokered deposits at December 31, 2024, while our
brokered deposits were $461,446 at December 31, 2023. The maturities of these deposits are described in the table under the
“Contractual Obligations” heading below. Management continually monitors the Bank’s liquidity and non-core dependency
ratios to ensure compliance with targets established by the ALCO. At December 31, 2024 and 2023, the Company remained
below limits on brokered deposits and other funding sources established by the ALCO.
55
Our investment portfolio is another alternative for meeting liquidity needs. These assets generally have readily available
markets that offer conversions to cash as needed. Within the next twelve months the securities portfolio is forecasted to
generate cash flow through principal payments and maturities equal to 11.3% of the carrying value of the total securities
portfolio. Securities within our investment portfolio are also used to secure certain deposit types and short-term borrowings. At
December 31, 2024, securities with a carrying value of $843,870 were pledged to secure government, public, trust, and other
deposits and as collateral for short-term borrowings and derivative instruments as compared to $895,044 at December 31, 2023.
Other sources available for meeting liquidity needs include federal funds purchased, security repurchase agreements and short-
term and long-term advances from the FHLB. Interest is charged at the prevailing market rate on these borrowings. Federal
funds are short term borrowings, generally overnight borrowings, between financial institutions, while security repurchase
agreements represent funds received from customers, generally on an overnight or continuous basis, that are collateralized by
investment securities owned or, at times, borrowed and re-hypothecated by the Company. There were no federal funds
purchased outstanding at December 31, 2024, and 2023, while security repurchase agreements were $8,018 at December 31,
2024, as compared to $7,577 at December 31, 2023. The Company had $100,000 and $300,000 in short-term borrowings from
the FHLB (i.e., advances with original maturities less than one year) at December 31, 2024, and 2023, respectively. Long-term
FHLB borrowings are used to match-fund fixed rate loans in order to minimize interest rate risk and also are used to meet day-
to-day liquidity needs, particularly when the cost of such borrowings compares favorably to the rates that we would be required
to pay to attract deposits. At December 31, 2024 and 2023, there were no outstanding long-term advances with the FHLB. The
total amount of the remaining credit available to us from the FHLB at December 31, 2024 was $4,004,630. We also maintain
lines of credit with other commercial banks totaling $150,000. These are unsecured, uncommitted lines of credit maturing at
various times within the next twelve months. There were no amounts outstanding under these lines of credit at December 31,
2024 or 2023.
Finally, we can access the capital markets to meet liquidity needs. The Company maintains a shelf registration statement with
the SEC, which allows the Company to raise capital from time to time through the sale of common stock, preferred stock, debt
securities, warrants and units, or a combination thereof, subject to market conditions. Specific terms and prices will be
determined at the time of any offering under a separate prospectus supplement that the Company will be required to file with
the SEC at the time of the specific offering. The proceeds of the sale of securities, if and when offered, will be used as described
in any prospectus supplement and could include general corporate purposes, the expansion of the Company’s banking,
insurance and wealth management operations as well as other business opportunities. Our common stock offering described
under the “Performance Overview” heading above reflects our access of the capital markets as described in this paragraph. In
addition, in previous years, we have accessed the capital markets to generate liquidity in the form of subordinated notes, as
discussed under the heading “Borrowed Funds” in this Item 7.
Our strategy in choosing funding sources is focused on minimizing cost in the context of our balance sheet composition, interest
rate risk position and our immediate and future liquidity needs to fund loan growth and other cash needs of customers.
Accordingly, management targets growth of non-interest bearing deposits. While we do not control the types of deposit
instruments our clients choose, we do influence those choices with the rates and the deposit specials we offer. We constantly
monitor our funds position, short- and long-term liquidity needs and evaluate the effect that various funding sources have on
our financial position. The following table presents, by type, the Company’s funding sources, which consist of total average
deposits and borrowed funds, and the total cost of each funding source for each of the years presented:
Percentage of Total
Cost of Funds
2024
2023
2024
2023
Noninterest-bearing demand
23.61 %
26.94 %
— %
— %
Interest-bearing demand
48.80
43.04
3.12
2.18
Savings
5.58
6.58
0.35
0.33
Brokered deposits
1.60
4.72
5.46
5.17
Time deposits
16.60
12.69
4.22
2.90
Borrowings
3.81
6.03
5.12
5.13
Total deposits and borrowed funds
100.00 %
100.00 %
2.53 %
1.88 %
Cash and cash equivalents were $1,092,032 at December 31, 2024, compared to $801,351 at December 31, 2023. Cash used in
investing activities for the year ended December 31, 2024 was $298,041 compared to $55,399 in 2023. Proceeds from the sale,
maturity or call of securities within our investment portfolio were $368,193 for 2024 compared to $747,959 for 2023. Proceeds
from the investment portfolio were primarily used to fund loan growth or purchase investment securities. Purchases of
investment securities were $174,229 for 2024 compared to $11,899 for 2023.
56
Cash provided by financing activities for the year ended December 31, 2024 was $459,296 compared to $132,205 for the year
ended December 31, 2023. Total deposits increased $495,827 for the year ended December 31, 2024 compared to an increase of
$589,819 for 2023.
Restrictions on Bank Dividends, Loans and Advances
The Company’s liquidity and capital resources, as well as its ability to pay dividends to our shareholders, are substantially
dependent on the ability of the Bank to transfer funds to the Company in the form of dividends, loans and advances. Under
Mississippi law, a Mississippi bank may not pay dividends unless its earned surplus is in excess of three times capital stock. A
Mississippi bank with earned surplus in excess of three times capital stock may pay a dividend, subject to the approval of the
DBCF. In addition, the FDIC has the authority to prohibit the Bank from engaging in business practices that the FDIC considers
to be unsafe or unsound, which, depending on the financial condition of the Bank, could include the payment of dividends.
Accordingly, the approval of the DBCF is required prior to the Bank paying dividends to the Company, and under certain
circumstances the approval of the FDIC may be required.
In addition to the FDIC and DBCF restrictions on dividends payable by the Bank to the Company, the Federal Reserve has
provided guidance on the criteria that it will use to evaluate the request by a bank holding company to pay dividends in an
aggregate amount that will exceed the company’s earnings for the period in which the dividends will be paid, which did not
apply to the Company in 2024 or 2023. For purposes of this analysis, “dividend” includes not only dividends on preferred and
common equity but also dividends on debt underlying trust preferred securities and other Tier 1 capital instruments. The
Federal Reserve’s criteria evaluates whether the holding company (1) has net income over the past four quarters sufficient to
fully fund the proposed dividend (taking into account prior dividends paid during this period), (2) is considering stock
repurchases or redemptions in the quarter, (3) does not have a concentration in commercial real estate and (4) is in good
supervisory condition, based on its overall condition and its asset quality risk. A holding company not meeting these criteria
will require more in-depth consultations with the Federal Reserve.
Federal Reserve regulations also limit the amount the Bank may loan to the Company unless such loans are collateralized by
specific obligations. At December 31, 2024, the maximum amount available for transfer from the Bank to the Company in the
form of loans was $202,274. The Company maintains a line of credit collateralized by cash with the Bank totaling $3,000.
There were no amounts outstanding under this line of credit at December 31, 2024.
None of these restrictions had any impact on the Company’s ability to meet its cash obligations in 2024, nor does management
expect such restrictions to materially impact the Company’s ability to meet its currently-anticipated cash obligations.
Contractual Obligations
The following table presents, as of December 31, 2024, significant fixed and determinable contractual obligations to third
parties by payment date, that may impact the Company’s liquidity position. The Note Reference below refers to the applicable
footnote in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this
report.
Payments Due In:
Note
Reference
Less Than
One Year
One to
Three
Years
Three to
Five Years
Over Five
Years
Total
Lease liabilities(1)
23
$
6,186 $
10,094 $
8,768 $
42,294 $
67,342
Deposits without a stated maturity(2)
9
12,093,328
—
—
— 12,093,328
Time deposits(2)
9
2,394,116
72,912
11,078
1,178
2,479,284
Short-term Federal Home Loan Bank
advances
10
100,000
—
—
—
100,000
Other short-term borrowings
10
8,018
—
—
—
8,018
Junior subordinated debentures
11
—
—
—
113,916
113,916
Subordinated notes
11
—
—
—
316,698
316,698
Total contractual obligations
$ 14,601,648 $
83,006 $
19,846 $
474,086 $ 15,178,586
(1)
Represents the undiscounted cash flows.
(2)
Excludes interest.
57
Off-Balance Sheet Commitments
The Company enters into loan commitments, standby letters of credit and derivative financial instruments in the normal course
of its business. Loan commitments are made to accommodate the financial needs of the Company’s customers. Standby letters
of credit commit the Company to make payments on behalf of customers when certain specified future events occur. Both
arrangements have credit risk essentially the same as that involved in extending loans to customers and are subject to the
Company’s normal credit policies. Collateral (e.g., securities, receivables, inventory, equipment, etc.) is obtained based on
management’s credit assessment of the customer.
Loan commitments and standby letters of credit do not necessarily represent future cash requirements of the Company. While
the borrower has the ability to draw upon these commitments at any time (assuming the borrower’s compliance with the terms
of the loan commitment), these commitments often expire without being drawn upon. The Company’s unfunded loan
commitments and standby letters of credit outstanding at December 31, 2024 and 2023 were as follows:
2024
2023
Loan commitments
$
2,856,308 $
3,091,997
Standby letters of credit
90,267
113,970
The Company closely monitors the amount of remaining future commitments to borrowers in light of prevailing economic
conditions and adjusts these commitments as necessary. The Company will continue this process as new commitments are
entered into or existing commitments are renewed.
The Company utilizes derivative financial instruments, including interest rate contracts such as swaps, caps, floors and/or
collars, as part of its ongoing efforts to mitigate its interest rate risk exposure and to facilitate the needs of its customers. The
Company enters into derivative instruments that are not designated as hedging instruments to help its commercial customers
manage their exposure to interest rate fluctuations. To mitigate the interest rate risk associated with these customer contracts,
the Company enters into an offsetting derivative contract position with other financial institutions. The Company manages its
credit risk, or potential risk of default by its commercial customers, through credit limit approval and monitoring procedures. At
December 31, 2024, the Company had notional amounts of $880,371 on interest rate contracts with corporate customers and
$877,051 in offsetting interest rate contracts with other financial institutions to mitigate the Company’s rate exposure on its
corporate customers’ contracts.
Additionally, the Company enters into interest rate lock commitments with its customers to mitigate the interest rate risk
associated with the commitments to fund fixed-rate residential mortgage loans and also enters into forward commitments to sell
residential mortgage loans to secondary market investors.
Finally, the Company enters into forward interest rate swap contracts on its FHLB borrowings and its junior subordinated
debentures that are accounted for as cash flow hedges. Under each of these contracts, the Company pays a fixed rate of interest
and receives a variable rate of interest. The Company entered into an interest rate swap contract on its subordinated notes that is
accounted for as a fair value hedge. Under this contract, the Company pays a variable rate of interest and receives a fixed rate of
interest.
For more information about the Company’s off-balance sheet transactions, see Note 13, “Derivative Instruments” and Note 18,
“Commitments, Contingent Liabilities and Financial Instruments with Off-Balance Sheet Risk,” in the Notes to Consolidated
Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report.
Shareholders’ Equity and Regulatory Matters
Total shareholders’ equity of the Company was $2,678,318 and $2,297,383 at December 31, 2024 and 2023, respectively. Book
value per share was $42.13 and $40.92 at December 31, 2024 and 2023, respectively. The increase in shareholders’ equity was
attributable to the common stock offering (discussed below), earnings retention and changes in accumulated other
comprehensive income, offset by dividends declared.
In July 2024, the Company completed its public offering of an aggregate of 7,187,500 shares of its common stock with net
proceeds of $217,000.
In October 2024, the Company’s Board of Directors approved a stock repurchase program, authorizing the Company to
repurchase up to $100,000 of its outstanding common stock, either in open market purchases or privately-negotiated
58
transactions. The program will remain in effect until the earlier of October 2025 or the repurchase of the entire amount of
common stock authorized to be repurchased by the Board of Directors.
The Company has junior subordinated debentures with a carrying value of $113,916 at December 31, 2024, of which $110,325
are included in the Company’s Tier 1 capital. Federal Reserve guidelines limit the amount of securities that, similar to our
junior subordinated debentures, are includable in Tier 1 capital, but these guidelines did not impact the amount of debentures
we include in Tier 1 capital. Although our existing junior subordinated debentures are currently unaffected by these Federal
Reserve guidelines, on account of changes enacted as part of the Dodd-Frank Act, any new trust preferred securities are not
includable in Tier 1 capital. Further, if we complete the proposed merger with The First (or we make any other acquisition of a
financial institution) now that we have exceeded $15,000,000 in assets, we will lose Tier 1 treatment of our junior subordinated
debentures. The Company has subordinated notes with a carrying value of $316,698 at December 31, 2024, and $316,422 at
December 31, 2023 included in the Company’s Tier 2 capital.
The Federal Reserve, the FDIC and the Office of the Comptroller of the Currency have issued guidelines governing the levels
of capital that bank holding companies and banks must maintain. Those guidelines specify capital tiers, which include the
following classifications (which include the “capital conservation buffer” discussed below):
Capital Tiers
Tier 1 Capital to
Average Assets
(Leverage)
Common Equity
Tier 1 to
Risk - Weighted
Assets
Tier 1 Capital to
Risk - Weighted
Assets
Total Capital to
Risk - Weighted
Assets
Well capitalized
5% or above
6.5% or above 8% or above
10% or above
Adequately capitalized
4% or above
4.5% or above 6% or above
8% or above
Undercapitalized
Less than 4%
Less than 4.5% Less than 6% Less than 8%
Significantly undercapitalized
Less than 3%
Less than 3%
Less than 4% Less than 6%
Critically undercapitalized
Tangible Equity / Total Assets less than 2%
59
The following table includes the capital ratios and capital amounts for the Company and the Bank as of the dates presented:
Actual
Minimum Capital
Requirement to be
Well Capitalized
Minimum Capital
Requirement to be
Adequately
Capitalized (including
the Capital
Conservation Buffer)
Amount
Ratio
Amount
Ratio
Amount
Ratio
December 31, 2024
Renasant Corporation:
Tier 1 leverage ratio
$ 1,935,522
11.34 % $ 853,556
5.00 % $ 682,845
4.00 %
Common equity tier 1 capital ratio
1,825,197
12.73 %
932,162
6.50 % 1,003,867
7.00 %
Tier 1 risk-based capital ratio
1,935,522
13.50 % 1,147,276
8.00 % 1,218,981
8.50 %
Total risk-based capital ratio
2,449,129
17.08 % 1,434,095
10.00 % 1,505,800
10.50 %
Renasant Bank:
Tier 1 leverage ratio
$ 1,843,123
10.80 % $ 852,933
5.00 % $ 682,346
4.00 %
Common equity tier 1 capital ratio
1,843,123
12.85 %
932,552
6.50 % 1,004,287
7.00 %
Tier 1 risk-based capital ratio
1,843,123
12.85 % 1,147,756
8.00 % 1,219,491
8.50 %
Total risk-based capital ratio
2,022,737
14.10 % 1,434,695
10.00 % 1,506,430
10.50 %
December 31, 2023
Renasant Corporation:
Tier 1 leverage ratio
$ 1,578,918
9.62 % $ 820,428
5.00 % $ 656,342
4.00 %
Common equity tier 1 capital ratio
1,469,531
10.52 %
908,163
6.50 %
978,022
7.00 %
Tier 1 risk-based capital ratio
1,578,918
11.30 % 1,117,740
8.00 % 1,187,598
8.50 %
Total risk-based capital ratio
2,085,531
14.93 % 1,397,175
10.00 % 1,467,033
10.50 %
Renasant Bank:
Tier 1 leverage ratio
$ 1,714,965
10.45 % $ 820,761
5.00 % $ 656,608
4.00 %
Common equity tier 1 capital ratio
1,714,965
12.25 %
909,711
6.50 %
979,689
7.00 %
Tier 1 risk-based capital ratio
1,714,965
12.25 % 1,119,644
8.00 % 1,189,622
8.50 %
Total risk-based capital ratio
1,888,104
13.49 % 1,399,556
10.00 % 1,469,533
10.50 %
As previously disclosed, the Company adopted CECL as of January 1, 2020. The Company has elected to take advantage of
transitional relief offered by the Federal Reserve and FDIC to delay for two years the estimated impact of CECL on regulatory
capital, followed by a three-year transitional period to phase out the capital benefit provided by the two-year delay.
For a detailed discussion of the capital adequacy guidelines applicable to the Company and the Bank, please refer to the
information under the heading “Capital Adequacy Guidelines” in the “Supervision and Regulation-Supervision and Regulation
of Renasant Corporation” section and the “Supervision and Regulation-Supervision and Regulation of Renasant Bank” section
in Item 1, Business, in this report.
Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this document contains certain non-GAAP financial measures,
namely, return on average tangible shareholders’ equity, return on average tangible assets and the ratio of tangible equity to
tangible assets. These non-GAAP financial measures adjust GAAP financial measures to exclude intangible assets.
Management uses these non-GAAP financial measures when evaluating capital utilization and adequacy. In addition, the
Company believes that these non-GAAP financial measures facilitate the making of period-to-period comparisons and are
meaningful indicators of its operating performance, particularly because these measures are widely used by industry analysts for
companies with merger and acquisition activities. Also, because intangible assets such as goodwill and the core deposit
intangible can vary extensively from company to company and are excluded from the calculation of a financial institution’s
regulatory capital, the Company believes that the presentation of this non-GAAP financial information allows readers to more
60
easily compare the Company’s results to information provided in other regulatory reports and the results of other companies.
The reconciliations from GAAP to non-GAAP for these financial measures are below.
Return on average tangible shareholders’ equity and Return on average tangible assets
2024
2023
2022
Net income (GAAP)
$
195,457
$
144,678
$
166,068
Amortization of intangibles
4,691
5,380
5,122
Tax effect of adjustment noted above (1)
(1,173)
(1,012)
(1,119)
Tangible net income (non-GAAP)
$
198,975
$
149,046
$
170,071
Average shareholders’ equity (GAAP)
$
2,466,384
$
2,224,506
$
2,184,603
Intangibles
1,006,665
1,012,239
967,018
Average tangible shareholders’ equity (non-GAAP)
$
1,459,719
$
1,212,267
$
1,217,585
Average total assets (GAAP)
$ 17,552,695
$ 17,231,883
$ 16,637,852
Intangibles
1,006,665
1,012,239
967,018
Average tangible assets (non-GAAP)
$ 16,546,030
$ 16,219,644
$ 15,670,834
Return on (average) shareholders’ equity (GAAP)
7.92 %
6.50 %
7.60 %
Effect of adjustment for intangible assets
5.71 %
5.79 %
6.37 %
Return on average tangible shareholders’ equity (non-GAAP)
13.63 %
12.29 %
13.97 %
Return on (average) assets (GAAP)
1.11 %
0.84 %
1.00 %
Effect of adjustment for intangible assets
0.09 %
0.08 %
0.09 %
Return on average tangible assets (non-GAAP)
1.20 %
0.92 %
1.09 %
(1) Tax effect is calculated based on the applicable periods’ effective tax rate.
Tangible common equity ratio (Tangible shareholders’ equity to tangible assets)
2024
2023
2022
Shareholders’ equity (GAAP)
$
2,678,318
$
2,297,383
$
2,136,016
Intangibles
1,003,003
1,010,460
1,015,884
Tangible shareholders’ equity (non-GAAP)
$
1,675,315
$
1,286,923
$
1,120,132
Total assets (GAAP)
$ 18,034,868
$ 17,360,535
$ 16,988,176
Intangibles
1,003,003
1,010,460
1,015,884
Tangible assets (non-GAAP)
$ 17,031,865
$ 16,350,075
$ 15,972,292
Shareholders’ equity to assets (GAAP)
14.85 %
13.23 %
12.57 %
Effect of adjustment for intangible assets
5.01 %
5.36 %
5.56 %
Tangible shareholders’ equity to tangible assets (non-GAAP)
9.84 %
7.87 %
7.01 %
None of the non-GAAP financial measures the Company has included in this document is intended to be considered in isolation
or as a substitute for any measure prepared in accordance with GAAP. Readers of this Form 10-K should note that, because
there are no standard definitions for how to calculate the non-GAAP financial measures that we use as well as the results, the
Company’s calculations may not be comparable to similarly titled measures presented by other companies. Also, there may be
limits in the usefulness of these measures to readers of this document. As a result, the Company encourages readers to consider
its consolidated financial statements and footnotes thereto in their entirety and not to rely on any single financial measure.
61
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Please refer to the discussion found under the headings “Risk Management – Interest Rate Risk” and “Liquidity and Capital
Resources” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in this report
for the disclosures required pursuant to this Item 7A.
SEC Form 10-K
A COPY OF THIS ANNUAL REPORT ON FORM 10-K, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, MAY BE OBTAINED WITHOUT CHARGE BY DIRECTING A WRITTEN REQUEST TO: JOHN S.
OXFORD, SENIOR VICE PRESIDENT AND CHIEF MARKETING OFFICER, RENASANT BANK, 204 S. BROADWAY,
TUPELO, MISSISSIPPI, 38804.
62
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements of the Company meeting the requirements of Regulation S-X are included on the
succeeding pages of this Item. All schedules have been omitted because they are not required or are not applicable.
RENASANT CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2024, 2023 and 2022
CONTENTS
Page
Report on Management’s Assessment of Internal Control over Financial Reporting
64
Reports of Independent Registered Public Accounting Firm (Horne LLP, Memphis, TN PCAOB ID #: 171)
65
Consolidated Balance Sheets
68
Consolidated Statements of Income
69
Consolidated Statements of Comprehensive Income
70
Consolidated Statements of Changes in Shareholders’ Equity
71
Consolidated Statements of Cash Flows
72
Notes to Consolidated Financial Statements
74
63
Report on Management’s Assessment of Internal Control over Financial Reporting
Renasant Corporation (the “Company”) is responsible for the preparation, integrity and fair presentation of the consolidated
financial statements included in this annual report. The consolidated financial statements and notes included in this annual
report have been prepared in conformity with accounting principles generally accepted in the United States and necessarily
include some amounts that are based on management’s best estimates and judgments.
Management of the Company is responsible for establishing and maintaining effective internal control over financial reporting
designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with accounting principles generally accepted in the United States. The
Company’s internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of
the Company are being made only in accordance with authorizations of management and directors of the Company; and
(3) provide reasonable assurance regarding prevention or timely detection of any unauthorized acquisition, use or disposition of
the Company’s assets that could have a material effect on the financial statements.
The system of internal control over financial reporting as it relates to the financial statements is evaluated for effectiveness by
management and tested for reliability through a program of internal audits. Actions are taken to correct potential deficiencies as
they are identified. Any system of internal control, no matter how well designed, has inherent limitations, including the
possibility that a control can be circumvented or overridden, and misstatements due to error or fraud may occur and not be
detected. Also, because of changes in conditions, internal control effectiveness may vary over time. Accordingly, even an
effective system of internal control will provide only reasonable assurance with respect to financial statement preparation.
Management, with the participation of the Company’s principal executive officer and principal financial officer, conducted an
assessment of the effectiveness of the Company’s system of internal control over financial reporting as of December 31, 2024,
based on criteria for effective internal control over financial reporting described in the “Internal Control - Integrated
Framework,” (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this
assessment, management has concluded that, as of December 31, 2024, the Company’s system of internal control over financial
reporting is effective and meets the criteria of the “Internal Control – Integrated Framework.” HORNE LLP, the Company’s
independent registered public accounting firm that has audited the Company’s financial statements included in this annual
report, has issued an attestation report on the Company’s internal control over financial reporting which is included herein.
C. Mitchell Waycaster
James C. Mabry IV
Chief Executive Officer
Executive Vice President and
Chief Financial Officer
February 26, 2025
64
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of Renasant Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Renasant Corporation (the “Company”) as of December 31,
2024 and 2023, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and
cash flows, for each of the three years in the period ended December 31, 2024, and the related notes to the consolidated
financial statements (collectively, referred to as the “financial statements”). In our opinion, the financial statements present
fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its
operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting
principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(the “PCAOB”), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established
in the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission in 2013, and our report dated February 26, 2025, expressed an unqualified opinion on the effectiveness of the
Company’s internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that
was communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial
statements and (2) involves especially challenging, subjective or complex judgments. The communication of critical audit
matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating
the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to
which it relates.
Allowance for Credit Losses - Loans
Description of the Matter
As described in Notes 1 and 4 to the financial statements, the Company’s allowance for credit losses (“ACL”) is a valuation
allowance that reflects the Company’s best estimate of expected credit losses inherent within the Company’s loans held for
investment portfolio and is maintained at a level believed adequate by management to absorb credit losses inherent in the entire
loan portfolio in accordance with Accounting Standards Codification ASC 326: Financial Instruments – Credit Losses. The
ACL is measured over the contractual life of loans held for investment and is estimated using relevant available information
relating to past events, current conditions, and reasonable and supportable forecasts, as well as qualitative adjustments. The
Company’s loans held for investment portfolio totaled $12,885,020,000 at December 31, 2024 with an ACL of $201,756,000
which consisted of 1) $186,704,000 of loss allocations on pools of loans that share similar risk characteristics and 2)
$15,052,000 of loss allocations on individual loans that do not share risk characteristics with other loans and the measurement
of expected credit losses for such individual loans.
The Company’s measurement of expected credit losses of loans on a pool basis when the loans share similar risk characteristics
is based off historical data that is adjusted, as necessary, for both internal and external qualitative factors where there are
differences in the historical loss data of the Company and current or projected future conditions. Consideration of the relevant
65
qualitative factors are used to bring the ACL to the level management believes is appropriate based on factors that are otherwise
unaccounted for in the quantitative process. The ACL also includes reserves for loans evaluated on an individual basis, such as
certain loans graded substandard or on nonaccrual. Management applies judgment in the determination of the qualitative factors
and reserves assigned on an individual basis to estimate the ACL.
The ACL was identified by us as a critical audit matter because of the extent of auditor judgment applied and significant audit
effort to evaluate the significant subjective and complex judgments made by management including the judgment required in
evaluating management’s determination of the qualitative factors and the reserve assumptions for loans evaluated on an
individual basis.
How We Addressed the Matter in Our Audit
The primary audit procedures we performed in response to this critical audit matter included:
a.
Obtained an understanding of the Company’s process for establishing the ACL, including determination of the
qualitative factors and reserve assumptions for loans evaluated on an individual basis, and evaluated the process
utilized by management to challenge the model results and determine the best estimate of the ACL as of the balance
sheet date.
b.
Evaluated the design and tested the operating effectiveness of the controls associated with the ACL process, including
controls around the reliability and accuracy of data used in the model, management’s oversight, review and approval of
the selected qualitative factors, the reserve assumptions for loans evaluated on an individual basis, the governance of
the credit loss methodology, and management’s review and approval of the overall ACL.
c.
Assessed reasonableness of model methodology and key modeling assumptions, as well as the appropriateness of
management’s qualitative framework, and reserve assumptions for loans evaluated on an individual basis.
d.
Performed specific substantive tests of the model utilized, qualitative factors and the reserve assumptions for loans
evaluated on an individual basis. We evaluated if qualitative factors were applied based on a comprehensive
framework and compared the adjustments utilized by management to both internal portfolio metrics and external
macroeconomic data (as applicable) to support adjustments and evaluate trends in such adjustments. Within our
reserve testing for loans evaluated on an individual basis, we evaluated management’s assumptions, including
collateral valuations. In addition, we evaluated the Company’s estimate of the overall ACL giving consideration to the
Company’s borrowers, loan portfolio, and macroeconomic trends, independently obtained and compared such
information to comparable financial institutions and considered whether new or contrary information existed.
We have served as the Company’s auditor since 2005.
Memphis, Tennessee
February 26, 2025
66
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of Renasant Corporation:
Opinion on the Internal Control Over Financial Reporting
We have audited Renasant Corporation’s (the “Company”) internal control over financial reporting as of December 31, 2024,
based on criteria established in the Internal Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission in 2013. In our opinion, the Company maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2024, based on criteria established in the Internal Control -
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(the “PCAOB”), the consolidated financial statements of the Company as of December 31, 2024 and our report dated
February 26, 2025 expressed an unqualified opinion.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting in the accompanying Report on Management’s
Assessment of Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal
control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Memphis, Tennessee
February 26, 2025
67
Renasant Corporation and Subsidiaries
Consolidated Balance Sheets
(In Thousands, Except Share Data)
December 31,
2024
2023
Assets
Cash and due from banks
$
198,408
$
206,680
Interest-bearing balances with banks
893,624
594,671
Cash and cash equivalents
1,092,032
801,351
Securities held to maturity (net of allowance for credit losses of $32 at both December 31, 2024 and
2023) (fair value of $1,002,544 and $1,121,830, respectively)
1,126,112
1,221,464
Securities available for sale, at fair value
831,013
923,279
Loans held for sale, at fair value
246,171
179,756
Loans held for investment, net of unearned income
12,885,020
12,351,230
Allowance for credit losses
(201,756)
(198,578)
Loans, net
12,683,264
12,152,652
Premises and equipment, net
279,796
283,195
Other real estate owned, net
8,673
9,622
Goodwill
988,898
991,665
Other intangible assets, net
14,105
18,795
Bank-owned life insurance
391,810
382,584
Mortgage servicing rights
72,991
91,688
Other assets
300,003
304,484
Total assets
$
18,034,868
$
17,360,535
Liabilities and shareholders’ equity
Liabilities
Deposits
Noninterest-bearing
$
3,403,981
$
3,583,675
Interest-bearing
11,168,631
10,493,110
Total deposits
14,572,612
14,076,785
Short-term borrowings
108,018
307,577
Long-term debt
430,614
429,400
Other liabilities
245,306
249,390
Total liabilities
15,356,550
15,063,152
Shareholders’ equity
Preferred stock, $0.01 par value – 5,000,000 shares authorized; no shares issued and outstanding
—
—
Common stock, $5.00 par value – 150,000,000 shares authorized; 66,484,225 shares issued;
63,565,690 and 56,142,207 shares outstanding, respectively
332,421
296,483
Treasury stock, at cost, 2,918,535 and 3,154,518 shares, respectively
(97,196)
(105,249)
Additional paid-in capital
1,491,847
1,308,281
Retained earnings
1,093,854
952,124
Accumulated other comprehensive loss, net of taxes
(142,608)
(154,256)
Total shareholders’ equity
2,678,318
2,297,383
Total liabilities and shareholders’ equity
$
18,034,868
$
17,360,535
See Notes to Consolidated Financial Statements.
68
Renasant Corporation and Subsidiaries
Consolidated Statements of Income
(In Thousands, Except Share Data)
Year Ended December 31,
2024
2023
2022
Interest income
Loans
$
806,296
$
716,456
$
479,910
Securities
Taxable
37,383
44,482
45,523
Tax-exempt
4,541
6,006
7,524
Other
39,557
30,375
8,853
Total interest income
887,777
797,319
541,810
Interest expense
Deposits
346,592
232,331
35,208
Borrowings
28,989
45,661
25,304
Total interest expense
375,581
277,992
60,512
Net interest income
512,196
519,327
481,298
Provision for credit losses on loans
11,248
18,793
23,788
(Recovery of) provision for credit losses on unfunded commitments
(1,975)
(3,200)
83
Provision for credit losses
9,273
15,593
23,871
Net interest income after provision for credit losses
502,923
503,734
457,427
Noninterest income
Service charges on deposit accounts
41,779
39,199
39,957
Fees and commissions
16,190
17,901
17,268
Insurance commissions
5,473
11,102
10,754
Wealth management revenue
23,559
22,132
22,339
Mortgage banking income
36,376
32,413
35,794
Gain on sale of insurance agency
53,349
—
—
Gain on debt extinguishment
56
620
—
Net losses on sales of securities
—
(22,438)
—
Impairment losses on securities
—
(19,352)
—
BOLI income
11,567
10,463
9,267
Other
15,311
21,035
13,874
Total noninterest income
203,660
113,075
149,253
Noninterest expense
Salaries and employee benefits
283,768
281,768
261,654
Data processing
16,030
15,195
14,900
Net occupancy and equipment
45,960
46,471
44,819
Other real estate owned
858
267
(453)
Professional fees
12,418
13,671
11,872
Advertising and public relations
16,210
14,726
14,325
Intangible amortization
4,691
5,380
5,122
Communications
8,379
8,238
7,958
Merger and conversion related expenses
13,349
—
1,787
Restructuring charges
—
—
732
Other
59,955
53,906
32,656
Total noninterest expense
461,618
439,622
395,372
Income before income taxes
244,965
177,187
211,308
Income taxes
49,508
32,509
45,240
Net income
$
195,457
$
144,678
$
166,068
Basic earnings per share
$
3.29
$
2.58
$
2.97
Diluted earnings per share
$
3.27
$
2.56
$
2.95
Cash dividends per common share
$
0.88
$
0.88
$
0.88
See Notes to Consolidated Financial Statements.
69
Renasant Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income
(In Thousands)
Year Ended December 31,
2024
2023
2022
Net income
$
195,457 $
144,678 $
166,068
Other comprehensive income, net of tax:
Securities available for sale:
Unrealized holding gains (losses) on securities
1,074
15,128
(214,351)
Reclassification adjustment for losses realized in net income
—
31,063
—
Amortization of unrealized holding losses on securities transferred to
the held to maturity category
9,476
10,091
3,701
Total securities available for sale
10,550
56,282
(210,650)
Derivative instruments:
Unrealized holding gains (losses) on derivative instruments
378
(1,905)
14,993
Total derivative instruments
378
(1,905)
14,993
Defined benefit pension and post-retirement benefit plans:
Net gain (loss) arising during the period
405
60
(3,062)
Amortization of net actuarial loss recognized in net periodic pension
cost
315
344
125
Total defined benefit pension and post-retirement benefit plans
720
404
(2,937)
Other comprehensive income (loss), net of tax
11,648
54,781
(198,594)
Comprehensive income (loss)
$
207,105 $
199,459 $
(32,526)
See Notes to Consolidated Financial Statements.
70
Renasant Corporation and Subsidiaries
Consolidated Statements of Changes in Shareholders’ Equity
(In Thousands, Except Share Data)
Common Stock
Treasury
Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Shares
Amount
Total
Balance at January 1, 2022
55,756,233
$ 296,483
$ (118,027) $ 1,300,192
$ 741,648
$
(10,443) $ 2,209,853
Net income
—
—
—
—
166,068
—
166,068
Other comprehensive loss
—
—
—
—
—
(198,594)
(198,594)
Comprehensive loss
(32,526)
Cash dividends ($0.88 per share)
—
—
—
—
(49,991)
—
(49,991)
Issuance of common stock for stock-
based compensation awards
196,871
—
6,450
(9,275)
—
—
(2,825)
Stock-based compensation expense
—
—
—
11,505
—
—
11,505
Balance at December 31, 2022
55,953,104
$ 296,483
$ (111,577) $ 1,302,422
$ 857,725
$
(209,037) $ 2,136,016
Net income
—
—
—
—
144,678
—
144,678
Other comprehensive income
—
—
—
—
—
54,781
54,781
Comprehensive income
199,459
Cash dividends ($0.88 per share)
—
—
—
—
(50,279)
—
(50,279)
Issuance of common stock for stock-
based compensation awards
189,103
—
6,328
(7,857)
—
—
(1,529)
Stock-based compensation expense
—
—
—
13,716
—
—
13,716
Balance at December 31, 2023
56,142,207
$ 296,483
$ (105,249) $ 1,308,281
$ 952,124
$
(154,256) $ 2,297,383
Net income
—
—
—
—
195,457
—
195,457
Other comprehensive income
—
—
—
—
—
11,648
11,648
Comprehensive income
207,105
Cash dividends ($0.88 per share)
—
—
—
—
(53,727)
—
(53,727)
Common stock issued in public
offering
7,187,500
35,938
—
181,062
—
—
217,000
Issuance of common stock for stock-
based compensation awards
235,983
—
8,053
(11,379)
—
—
(3,326)
Stock-based compensation expense
—
—
—
13,883
—
—
13,883
Balance at December 31, 2024
63,565,690
$ 332,421
$ (97,196) $ 1,491,847
$ 1,093,854
$
(142,608) $ 2,678,318
See Notes to Consolidated Financial Statements.
71
Renasant Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(In Thousands, Except Share Data)
Operating activities
Net income
$
195,457
$
144,678
$
166,068
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses
9,273
15,593
23,871
Depreciation, amortization and accretion
32,284
35,231
42,744
Deferred income tax expense (benefit)
4,649
(5,005)
2,280
Impairment losses on securities
—
19,352
—
Proceeds from sale of mortgage servicing rights
23,011
—
18,525
Gain on sale of mortgage servicing rights
(3,472)
(547)
(2,960)
Gain on sale of insurance agency
(53,349)
—
—
Funding of mortgage loans held for sale
(1,400,467)
(1,330,912)
(1,679,356)
Proceeds from sales of mortgage loans held for sale
1,347,659
1,277,363
2,043,360
Gains on sales of mortgage loans held for sale
(16,611)
(14,573)
(15,803)
Losses on sales of securities
—
22,438
—
Gain on debt extinguishment
(56)
(620)
—
Losses (gains) on sales of premises and equipment
33
(173)
(239)
Stock-based compensation
13,883
13,716
11,505
Increase in other assets
(15,014)
(51,986)
(29,671)
(Decrease) increase in other liabilities
(7,854)
23,998
(6,279)
Net cash provided by operating activities
129,426
148,553
574,045
Investing activities
Purchases of securities available for sale
(174,229)
(11,899)
(713,096)
Proceeds from sales of securities available for sale
177,185
488,981
—
Proceeds from call/maturities of securities available for sale
88,830
149,025
385,507
Purchases of securities held to maturity
—
—
(91,803)
Proceeds from call/maturities of securities held to maturity
102,178
109,953
67,448
Net increase in loans
(543,495)
(791,803)
(1,456,119)
Purchases of premises and equipment
(13,645)
(21,634)
(14,838)
Proceeds from sales of premises and equipment
344
943
1,234
Net cash received from sale of insurance agency
55,333
—
—
Purchase of bank-owned life insurance
—
—
(80,000)
Net change in FHLB stock
4,795
16,076
(27,807)
Proceeds from sales of other assets
3,350
3,115
3,578
Net cash paid in acquisitions
—
—
(120,888)
Other, net
1,313
1,844
3,127
Net cash used in investing activities
(298,041)
(55,399)
(2,043,657)
Financing activities
Net decrease in noninterest-bearing deposits
(179,694)
(975,081)
(159,368)
Net increase (decrease) in interest-bearing deposits
675,521
1,564,900
(259,390)
Net (decrease) increase in short-term borrowings
(199,559)
(404,655)
668,805
Repayment of long-term debt
(245)
(2,680)
(32,417)
Cash paid for dividends
(53,727)
(50,279)
(49,991)
Proceeds from equity offering
217,000
—
—
Net cash provided by financing activities
459,296
132,205
167,639
Net increase (decrease) in cash and cash equivalents
290,681
225,359
(1,301,973)
Year Ended December 31,
2024
2023
2022
See Notes to Consolidated Financial Statements.
72
Cash and cash equivalents at beginning of year
801,351
575,992
1,877,965
Cash and cash equivalents at end of year
$
1,092,032
$
801,351
$
575,992
Supplemental disclosures
Cash paid for interest
$
381,004
$
239,611
$
54,562
Cash paid for income taxes
$
29,065
$
42,047
$
41,764
Noncash transactions:
Transfers of loans to other real estate
$
5,037
$
10,738
$
2,207
Recognition of operating right-of-use assets
$
4,630
$
3,126
$
3,475
Recognition of operating lease liabilities
$
4,630
$
3,126
$
3,475
Available for sale securities transferred to held to maturity securities
$
—
$
—
$
882,927
Year Ended December 31,
2024
2023
2022
See Notes to Consolidated Financial Statements.
Renasant Corporation and Subsidiaries
Consolidated Statements of Cash Flows (continued)
73
Note 1 – Significant Accounting Policies
(Dollar amounts in thousands)
Nature of Operations: Renasant Corporation (referred to herein as the “Company”) owns and operates Renasant Bank
(“Renasant Bank” or the “Bank”), Renasant Insurance, Inc., Park Place Capital Corporation and Continental Republic Capital,
LLC (doing business as “Republic Business Credit”). On July 1, 2024, the Bank sold substantially all of the assets of Renasant
Insurance, Inc., which thereafter discontinued its insurance agency operations. Through its subsidiaries, the Company offers a
diversified range of financial, wealth management and fiduciary services to its retail and commercial customers from offices
located throughout the Southeast as well as offers factoring and asset-based lending on a nationwide basis.
Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual results could differ from those estimates.
Consolidation: The accompanying Consolidated Financial Statements and these Notes to Consolidated Financial Statements
include the accounts of the Company and its consolidated subsidiaries, all of which are wholly-owned. All intercompany
balances and transactions have been eliminated. Certain prior year amounts have been reclassified to conform to the current
year presentation. Reclassifications had no effect on prior years’ net income or shareholders’ equity.
Cash and Cash Equivalents: The Company considers all highly liquid investments with a maturity of three months or less when
purchased to be cash equivalents.
Securities: Debt securities are classified as held to maturity when purchased if management has the positive intent and ability to
hold the securities to maturity. Held to maturity securities are stated at amortized cost. Presently, the Company has no intention
of establishing a trading classification. Securities not classified as held to maturity or trading are classified as available for sale.
Available for sale securities are stated at fair value, with the unrealized gains and losses, net of tax, reported in accumulated
other comprehensive income within shareholders’ equity.
The amortized cost of securities, regardless of classification, is adjusted for amortization of premiums and accretion of
discounts. Such amortization and accretion is included in interest income from securities, as is dividend income. Realized gains
and losses on sales of securities and impairments are reflected under the line items “Net losses on sales of securities” and
“Impairment losses on securities” on the Consolidated Statements of Income. The cost of securities sold is based on the specific
identification method.
The Company evaluates its allowance for credit losses on the held to maturity investment portfolio on a quarterly basis in
accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic (“ASC”) 326,
“Financial Instruments - Credit Losses (“ASC 326”; ASC 326 is also referred to as “CECL”). Expected credit losses on debt
securities classified as held to maturity are measured on a collective basis by major security type. The estimates of expected
credit losses are based on historical default rates, investment grades, current conditions, and reasonable and supportable
forecasts about the future. The allowance is increased through provision for credit losses and decreased by charge-offs, net of
recoveries of amounts previously charged-off. All of the residential and commercial mortgage-backed securities recorded as
held to maturity are issued by U.S. Government agencies and government-sponsored entities.. These securities are either
explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of
no credit losses. The state and political subdivision securities are highly rated by major rating agencies.
The Company also evaluates available for sale investment securities in an unrealized loss position on a quarterly basis. If the
Company intends to sell the security or it is more likely than not that it will be required to sell before recovery, the entire
unrealized loss is recorded as a loss within noninterest income in the Consolidated Statements of Income with a corresponding
adjustment to the amortized cost basis of the security. If the Company does not intend to sell the security and it is not more
likely than not that it will be required to sell the security before recovery of its amortized cost basis, the Company evaluates if
any of the unrealized loss is related to a potential credit loss. The amount, if any, related to credit loss is recognized in earnings
as a provision for credit loss and a corresponding allowance for credit losses is established; each is calculated as the difference
between the estimate of discounted future cash flows and the amortized cost basis of the security. A number of qualitative and
quantitative factors, including the financial condition of the underlying issuer, current and projected deferrals or defaults and
credit ratings by nationally recognized statistical rating agencies are considered by management in the estimate of the
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
74
discounted future cash flows. The remaining difference between the fair value and the amortized cost basis of the security is
considered the amount related to other market factors and is recognized in other comprehensive income, net of applicable taxes.
Recognition of interest is discontinued on debt securities that are transferred to nonaccrual status. A number of qualitative
factors, including the financial condition of the underlying issuer and current and projected deferrals or defaults, are considered
by management in the determination of whether the debt security should be transferred to nonaccrual status. The interest on
nonaccrual investment securities is accounted for on the cash-basis method until the debt security qualifies for return to accrual
status. See Note 2, “Securities,” for further details regarding the Company’s securities portfolio.
Securities Sold Under Agreements to Repurchase: Securities sold under agreements to repurchase are accounted for as
collateralized financing transactions and are recorded at the amounts at which the securities were sold. Securities, generally
U.S. government and agency securities, pledged as collateral under these financing arrangements cannot be sold or repledged
by the secured party.
Loans Held for Sale: The “Loans held for sale” line item on the Company’s Consolidated Balance Sheets consists of residential
mortgage loans held for sale. The Company has elected to carry these loans at fair value as permitted under the guidance in
ASC 825, “Financial Instruments” (“ASC 825”). Gains and losses are realized at the time consideration is received and all
other criteria for sales treatment have been met. These realized and unrealized gains and losses are classified under the line item
“Mortgage banking income” on the Consolidated Statements of Income.
Factoring: The Company provides short-term financing to certain clients by operating as a factor. The Company purchases
accounts receivable from its clients and then generally collects the receivables directly from the clients’ account customers.
Cash is advanced to the Company’s client to the extent of the advance rate, less any applicable fees, set forth in the individual
factoring agreement. The unadvanced portion of the purchased receivables are considered client reserves and may be used to
settle payment disputes or collection shortfalls. Upon collection of the receivable and settlement of any client obligation, the
client reserves are returned to the client. Factoring receivables, net of client reserves, are reported as “Loans” on the
Consolidated Balance Sheets (this includes arrangements where the Company does not directly collect the receivables of the
client’s account customers). Factoring fees are reported as interest income on loans while other fees generated from factoring
relationships are reported as noninterest income on the Consolidated Statements of Income.
Loans and the Allowance for Credit Losses: Loans that management has the intent and ability to hold for the foreseeable future
or until maturity or pay-off generally are reported at their amortized cost or outstanding unpaid principal balances, in either case
adjusted for charge-offs, the allowance for credit losses, any deferred fees or costs on originated loans and any purchase
discounts or premiums on purchased loans. Renasant Bank defers certain nonrefundable loan origination fees as well as the
direct costs of originating or acquiring loans. The deferred fees and costs are then amortized over the term of the note for all
loans with payment schedules. Loans with no payment schedule are amortized using the interest method. The amortization of
these deferred fees is presented as an adjustment to the yield on loans. Interest income is accrued on the unpaid principal
balance.
Loans are considered past due if the required principal and interest payments have not been received as of the date such
payments were due. Generally, the recognition of interest on mortgage and commercial and industrial loans is discontinued at
the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Consumer and other retail
loans are typically charged-off no later than the time the loan is 120 days past due. In all cases, loans are placed on nonaccrual
status or charged-off at an earlier date if collection of principal or interest is considered doubtful. Loans may be placed on
nonaccrual regardless of whether or not such loans are considered past due. All interest accrued for the current year, but not
collected, for loans that are placed on nonaccrual or charged-off is reversed against interest income; the amount of interest
income recognized on nonaccrual loans was immaterial for the years ended December 31, 2024, 2023 and 2022. The interest on
these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned
to accrual status when all the principal and interest amounts contractually due are brought current and future payments are
reasonably assured. As a result, the Company has made an accounting policy election to exclude accrued interest from the
measurement of the allowance for credit losses. As of December 31, 2024 and 2023, the Company has accrued interest
receivable for loans of $54,395 and $54,804, respectively, which is recorded in the “Other assets” line item on the Consolidated
Balance Sheets. Although the Company made the election to exclude accrued interest from the measurement of the allowance
for credit losses, the Company did have an allowance for credit losses on interest deferred as part of the loan deferral program
implemented in response to the COVID-19 pandemic of $732 and $1,244, respectively, as of December 31, 2024 and 2023.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 – Significant Accounting Policies (continued)
75
The allowance for credit losses is an estimate of expected losses inherent within the Company’s loans held for investment
portfolio and is maintained at a level believed adequate by management to absorb credit losses inherent in such loan portfolio in
accordance with ASC 326. Management evaluates the adequacy of the allowance for credit losses on a quarterly basis.
Expected credit loss inherent in non-cancellable off-balance-sheet credit exposures is accounted for as a separate liability in the
Consolidated Balance Sheets. The allowance for credit losses on loans held for investment, as reported in the Company’s
Consolidated Balance Sheets, is adjusted by a provision for credit losses, which is reported in earnings, and reduced by net
charge-offs. Loan losses are charged against the allowance for credit losses when management confirms the uncollectability of
a loan balance. Subsequent recoveries, if any, are credited to the allowance.
The credit loss estimation process involves procedures to appropriately consider the unique characteristics of the Company’s
loan portfolio segments. Credit quality is assessed and monitored by evaluating various attributes, and the results of those
evaluations are utilized in underwriting new loans and in the Company’s process for the estimation of expected credit losses.
Credit quality monitoring procedures and indicators can include an assessment of problem loans, the types of loans, historical
loss experience, new lending products, emerging credit trends, changes in the size and character of loan categories and other
factors, including the Company’s risk rating system, regulatory guidance and economic conditions, such as the unemployment
rate and GDP growth in the markets in which the Company operates, as well as trends in the market values of underlying
collateral securing loans, all as determined based on input from management, loan review staff and other sources. This
evaluation is complex and inherently subjective, as it requires estimates by management that are inherently uncertain and
therefore susceptible to significant revision as more information becomes available. Similarly, there may be significant changes
in the allowance and provision for credit losses in future periods as the estimates and assumptions underlying such estimates are
adjusted in light of then-prevailing factors and forecasts. Changes in any of the assumptions involved in the estimation process
may result in significant changes in the allowance and provision for credit losses in those future periods.
The methodology for estimating the amount of expected credit losses reported in the allowance for credit losses has two basic
components: first, a collective (or pooled) component for estimating expected credit losses for pools of loans that share similar
risk characteristics; and second, an asset-specific component involving individual loans that do not share risk characteristics
with other loans and the measurement of expected credit losses for such individual loans.
Loans Evaluated on a Collective (Pool) Basis
The allowance for credit losses for loans that share similar risk characteristics with other loans is calculated on a collective or
pool basis, where such loans are segregated into loan portfolio segments based upon similarity of credit risk. The Company’s
primary loan portfolio segments are as follows:
Commercial, Financial, and Agricultural (“Commercial”) - Commercial loans are customarily granted to established local
business customers in the Company’s market area on a collateralized basis to meet their credit needs. Maturities are typically
short term in nature and are commensurate with the secondary source of repayment that serves as the Company’s collateral.
Although commercial loans may be collateralized by equipment or other business assets, the repayment of this type of loan
depends primarily on the creditworthiness and projected cash flow of the borrower (and any guarantors). Thus, the chief
considerations when assessing the risk of a commercial loan are the local business borrower’s ability to sell its products/
services, thereby generating sufficient operating revenue to repay the Company under the agreed upon terms and conditions,
and the general business conditions of the local economy or other market that the business serves. The Company’s factoring
receivables are categorized as commercial loans; for these commercial loans, the risk assessment considers the ability of the
client’s account customer, rather than the client itself, to repay the Company.
Real Estate - Construction - The Company’s construction loan portfolio consists of loans for the construction of single-family
residential properties, multi-family properties and commercial projects. Maturities for construction loans generally range from
six to 12 months for residential properties and from 24 to 36 months for non-residential and multi-family properties. The source
of repayment of a construction loan comes from the sale or lease of newly-constructed property, although often construction
loans are repaid with the proceeds of a commercial real estate loan that the Company makes to the owner or lessor of the newly-
constructed property.
Real Estate - 1-4 Family Mortgage - This segment of the Company’s loan portfolio includes loans secured by first or second
liens on residential real estate in which the property is the principal residence of the borrower, as well as loans secured by
residential real estate in which the property is rented to tenants or is otherwise not the principal residence of the borrower; loans
for the preparation of residential real property prior to construction are also included in this segment. Finally, this segment
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 – Significant Accounting Policies (continued)
76
includes home equity loans or lines of credit and term loans secured by first and second mortgages on the residences of
borrowers who elect to use the accumulated equity in their homes for purchases, refinances, home improvements, education and
other personal expenditures. The Company attempts to minimize the risk associated with residential real estate loans by
scrutinizing the financial condition of the borrower; typically, the maximum loan-to-value ratio is also limited.
Real Estate - Commercial Mortgage - Included in this portfolio segment (referred to collectively as “commercial real estate
loans”) are “owner-occupied” loans in which the owner develops a property with the intention of locating its business there.
Payments on these loans are dependent on the successful development and management of the business as well as the
borrower’s ability to generate sufficient operating revenue to repay the loan. In some instances, in addition to the mortgage on
the underlying real estate of the business, commercial real estate loans are secured by other non-real estate collateral, such as
equipment or other assets used in the business. In addition to owner-occupied commercial real estate loans, the Company offers
loans in which the owner develops a property where the source of repayment of the loan will come from the sale or lease of the
developed property, for example, retail shopping centers, hotels and storage facilities. These loans are referred to as “non-owner
occupied” commercial real estate loans. The Company also offers commercial real estate loans to developers of commercial
properties for purposes of site acquisition and preparation and other development prior to actual construction (referred to as
“commercial land development loans”). Non-owner occupied commercial real estate loans and commercial land development
loans are dependent on the successful completion of the project and may be affected by adverse conditions in the real estate
market or the economy as a whole.
Lease Financing - This segment of the Company’s loan portfolio includes loans granted to provide capital to businesses for
commercial equipment needs. These loans are generally granted for periods ranging between two and five years at fixed rates
of interest. Loss or decline of income by the borrower due to unplanned occurrences represents the primary risk of default to the
Company. In the event of default, a shortfall in the value of the collateral may pose a loss in this loan category. The Company
obtains a lien against the collateral securing the loan and holds title (if applicable) until the loan is repaid in full. Transportation,
manufacturing, healthcare, material handling, printing and construction are the industries that typically obtain lease financing.
Installment Loans to Individuals - Installment loans to individuals (or “consumer loans”) are granted to individuals for the
purchase of personal goods. Loss or decline of income by the borrower due to unplanned occurrences represents the primary
risk of default to the Company. In the event of default, a shortfall in the value of the collateral may pose a loss in this loan
category. Before granting a consumer loan, the Company assesses the applicant’s credit history and ability to meet existing and
proposed debt obligations. Although the applicant’s creditworthiness is the primary consideration, the underwriting process also
includes a comparison of the value of the collateral, if any, to the proposed loan amount. The Company obtains a lien against
the collateral securing the loan and holds title (if applicable) until the loan is repaid in full.
In determining the allowance for credit losses on loans evaluated on a collective basis, the Company categorizes loan pools
based on loan type and/or risk rating. The Company uses two CECL models: (1) a loss rate model, based on average historical
life-of-loan loss rates, which is used for the Real Estate - 1-4 Family Mortgage, Real Estate - Construction and the consumer
loans portfolio segments, and (2) for the Commercial, Real Estate - Commercial Mortgage and Lease Financing portfolio
segments, the Company uses a probability of default/loss given default model, which calculates an expected loss percentage for
each loan pool by considering (a) the probability of default, based on the migration of loans from performing (using risk
ratings) to default using life-of-loan analysis periods, and (b) the historical severity of loss, based on the aggregate net lifetime
losses incurred per loan pool.
The historical loss rates calculated as described above are adjusted, as necessary, for both internal and external qualitative
factors where there are differences in the historical loss data of the Company and current or projected future conditions. Internal
factors include loss history, changes in credit quality (including movement between risk ratings) and/or credit concentration and
changes in the nature and volume of the respective loan portfolio segments. External factors include current and reasonable and
supportable forecasted economic conditions and changes in collateral values. These factors are used to adjust the historical loss
rates (as described above) to ensure that they reflect management’s expectation of future conditions based on a reasonable and
supportable forecast period. To the extent the lives of the loans in the portfolio extend beyond the period for which a reasonable
and supportable forecast can be made, when necessary, the models immediately revert to the historical loss rates adjusted for
qualitative factors related to current conditions.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 – Significant Accounting Policies (continued)
77
Loans Evaluated on an Individual Basis
For loans that do not share similar risk characteristics with other loans, an analysis of the loan is performed to determine the
expected credit loss. If a respective loan is collateral dependent (that is, when the borrower is experiencing financial difficulty
and repayment is expected to be provided substantially through the operation or sale of the collateral), the expected credit loss is
measured as the difference between the amortized cost basis of the loan and the fair value of the collateral. The fair value of
collateral is initially based on external appraisals. Generally, collateral values for loans for which measurement of expected
losses is dependent on the fair value of such collateral are updated every twelve months, either from external third parties or in-
house certified appraisers. Third-party appraisals are obtained from a pre-approved list of independent, local appraisal firms.
The fair value of the collateral derived from external appraisal is then adjusted for the estimated cost to sell if repayment or
satisfaction of a loan is dependent on the sale (rather than only on the operation) of the collateral. Other acceptable methods for
determining the expected credit losses for individually evaluated loans (typically used when the loan is not collateral dependent)
is a discounted cash flow approach or, if applicable, an observable market price. Once the expected credit loss amount is
determined, an allowance equal to such expected credit loss is included in the allowance for credit losses.
The Company considers the loans in the Real Estate - Construction, Real Estate - 1-4 Family Mortgage and Real Estate -
Commercial Mortgage loan segments disclosed as individually evaluated in Note 4, “Allowance for Credit Losses” as collateral
dependent with the type of collateral being real estate.
The Company maintains a separate allowance for credit losses on unfunded loan commitments, which is included in the “Other
liabilities” line item on the Consolidated Balance Sheets. Changes in such allowance are recorded in the “(Recovery of)
provision for credit losses on unfunded commitments” line item on the Consolidated Statements of Income. Management
estimates the amount of expected losses on unfunded loan commitments by calculating a likelihood of funding over the
contractual period for exposures that are not unconditionally cancellable by the Company and applying the loss factors used in
the allowance for credit losses on loans methodology described above to unfunded commitments for each loan type. No credit
loss estimate is reported for off-balance-sheet credit exposures that are unconditionally cancellable by the Company.
See Note 3, “Loans,” and Note 4, “Allowance for Credit Losses” for disclosures regarding the Company’s past due and
nonaccrual loans, and its allowance for credit losses.
Business Combinations, Accounting for Purchased Credit Deteriorated Loans and Related Assets: Business combinations are
accounted for by applying the acquisition method in accordance with ASC 805, “Business Combinations.” Under the
acquisition method, identifiable assets acquired and liabilities assumed and any non-controlling interest in the acquired
company at the acquisition date are measured at their fair values as of that date and are recognized separately from goodwill.
Results of operations of the acquired entities are included in the Consolidated Statements of Income from the date of
acquisition. Acquisition costs incurred by the Company are expensed as incurred.
For a purchased asset that the Company has the intent of holding for investment, ASC 326 requires the Company to determine
whether the asset has experienced more-than-insignificant deterioration in credit quality since origination. Factors used in the
determination will vary but may include delinquency history, historical accrual status, and downgrades in the risk rating by the
seller, among others. The Company’s review of an asset during its due diligence evaluation of the purchase may identify other
unique attributes that would indicate more-than-insignificant deterioration has occurred such as the borrower’s financial
condition, credit rating or credit score as well as the value of underlying collateral. The Company analyzes these factors
collectively and may also consider market conditions or economic factors that would indicate a purchased asset has experienced
more-than-insignificant deterioration in credit quality since origination. Such assets that have experienced more-than
insignificant deterioration are referred to as purchased credit deteriorated (“PCD”) assets. ASC 326 provides for special initial
recognition of PCD assets, commonly referred to as the “gross-up” approach, where the allowance for credit losses is
recognized by adding it to the fair value to arrive at the Day 1 amortized cost basis. After initial recognition, the accounting for
PCD assets will generally follow the credit loss model that applies to that type of asset. Non-PCD assets record the Day 1
allowance for credit losses through earnings on the date of purchase. The Company accretes or amortizes as interest income the
fair value discounts on both PCD and non-PCD assets over the life of the asset.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 – Significant Accounting Policies (continued)
78
Premises and Equipment: Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed
primarily by use of the straight-line method for furniture, fixtures, equipment, autos and premises. The annual provisions for
depreciation have been computed primarily using estimated lives of 40 years for premises, three to seven years for furniture and
equipment and three to five years for computer equipment and autos. Leasehold improvements are expensed over the period of
the leases or the estimated useful life of the improvements, whichever is shorter.
ASC 842, “Leases” (“ASC 842”) requires a lessee to recognize a right-of-use asset and a lease liability for all leases with a term
greater than 12 months on its balance sheet regardless whether the lease is classified as financing or operating.
All of the Company’s lessee arrangements are operating leases, being real estate leases for Company facilities. Under these
arrangements, the Company records right-of-use assets and corresponding lease liabilities, each of which is based on the present
value of the remaining lease payments and are discounted at the Company’s incremental borrowing rate. Right-of-use assets are
reported in premises and equipment on the Consolidated Balance Sheets and the related lease liabilities are reported in other
liabilities. All leases are recorded on the Consolidated Balance Sheets except for leases with an initial term less than 12 months
for which the Company elected short-term lease recognition under ASC 842. Lease terms may contain renewal and extension
options and early termination features. Many leases include one or more options to renew, with renewal terms that can extend
the lease term from one to 20 years or more. The exercise of lease renewal options is at the Company’s sole discretion. Renewal
options which are reasonably certain to be exercised in the future were included in the measurement of right-of-use assets and
lease liabilities.
Lease expense is recognized on a straight-line basis over the lease term and is recorded in the “Net occupancy and equipment
expense” line item in the Consolidated Statements of Income. Variable lease payments consist primarily of common area
maintenance, insurance and taxes. The Company does not have any material sublease agreements currently in place.
Other Real Estate Owned: Other real estate owned (“OREO”) consists of properties acquired through foreclosure or acceptance
of a deed in lieu of foreclosure. These properties are initially recorded into other real estate owned at fair market value less cost
to sell and are subsequently carried at the lower of cost or fair market value based on appraised value less estimated selling
costs. Losses arising at the time of foreclosure of properties are charged against the allowance for credit losses. Reductions in
the carrying value subsequent to acquisition are charged to earnings and are included under the line item “Other real estate
owned” on the Consolidated Statements of Income.
Mortgage Servicing Rights: The Company retains the right to service certain mortgage loans that it sells to secondary market
investors. These mortgage servicing rights are recognized as a separate asset on the date the corresponding mortgage loan is
sold. Mortgage servicing rights are amortized in proportion to and over the period of estimated net servicing income. These
servicing rights are carried at the lower of amortized cost or fair value. Fair value is determined using an income approach with
various assumptions including expected cash flows, prepayment speeds, market discount rates, servicing costs, mortgage
interest rates and other factors. Servicing rights are evaluated for impairment based upon the fair value of the rights as
compared to carrying amount. Impairment is recognized through a valuation allowance, to the extent that unamortized cost
exceeds fair value. If the Company later determines that all or a portion of the impairment no longer exists, a reduction of the
valuation allowance may be recorded as an increase to income. Changes in valuation allowances related to servicing rights are
reported in the line item “Mortgage banking income” on the Consolidated Statements of Income. The fair value of servicing
rights is subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds and default rates
and losses. See Note 8, “Mortgage Servicing Rights,” for further details. From time to time, the Company may sell a portion or
all of its mortgage servicing rights. Any gains or losses on such sales are reported in the line item “Mortgage banking income”
on the Consolidated Statements of Income.
Goodwill and Other Intangible Assets: Goodwill represents the excess of the cost of an acquisition over the fair value of the net
assets acquired. Other intangible assets represent purchased assets that lack physical substance but can be distinguished from
goodwill because of contractual or other legal rights. Intangibles with finite lives are amortized over their estimated useful lives.
Goodwill and other intangible assets are subject to impairment testing annually or more frequently if events or circumstances
indicate possible impairment; if impaired, such assets are recorded at fair value. Goodwill is assigned to the Company’s
reporting segments. In determining the fair value of the Company’s reporting units, management uses the market approach.
Other intangible assets, consisting of core deposit intangibles and customer relationship intangibles, are reviewed for events or
circumstances that could impact the recoverability of the intangible asset, such as a loss of core deposits, increased competition
or adverse changes in the economy. No impairment was identified for the Company’s goodwill or its other intangible assets as a
result of the testing performed during 2024, 2023 or 2022.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 – Significant Accounting Policies (continued)
79
Bank-Owned Life Insurance: Bank-owned life insurance (“BOLI”) is an institutionally-priced insurance product that is
specifically designed for purchase by insured depository institutions. The Company has purchased such insurance policies on
certain employees, with Renasant Bank being listed as the primary beneficiary. The carrying value of BOLI is recorded at the
cash surrender value of the policies, net of any applicable surrender charges. Changes in the value of the cash surrender value
of the policies are reflected under the line item “BOLI income” on the Consolidated Statements of Income.
Revenue from Contracts with Customers: ASC 606, “Revenue from Contracts with Customers” (“ASC 606”), provides
guidance on revenue recognition from contracts with customers. For revenue streams within its scope, ASC 606 requires costs
that are incremental to obtaining a contract to be capitalized. In the case of the Company, these costs include sales commissions
for insurance, wealth management fees, and revenue from certain sales of OREO. ASC 606 has established, and the Company
has utilized, a practical expedient allowing costs that, if capitalized, would have an amortization period of one year or less to
instead be expensed as incurred.
Service Charges on Deposit Accounts
- Service charges on deposit accounts include maintenance fees on accounts, per item charges, account enhancement charges
for additional packaged benefits and overdraft fees. The contracts with deposit account customers are day-to-day contracts and
are considered to be terminable at will by either party. Therefore, the fees are all considered to be earned when charged and
simultaneously collected.
Fees and Commissions
- Fees and commissions include fees related to deposit services, such as ATM fees and interchange fees on debit card
transactions. These fees are earned at the point in time when the services are rendered, and therefore the related revenue is
recognized as the Company’s performance obligation is satisfied.
Insurance Commissions
- Insurance commissions are earned when policies are placed by customers with the insurance carriers and are collected and
recognized using two different methods: the agency bill method and the direct bill method. Prior to the sale of the Company’s
insurance agency business in July 2024, under the agency bill method, Renasant Insurance was responsible for billing the
customers directly and then collecting and remitting the premiums to the insurance carriers. Agency bill revenue was
recognized at the later of the invoice date or effective date of the policy. Under the direct bill method, premium billing and
collections were handled by the insurance carriers, and a commission was then paid to Renasant Insurance. Direct bill revenue
was recognized when the commission payment was received from the insurance carriers.
The Company also earned contingency income that it recognized on a cash basis. Contingency income is a bonus received from
the insurance underwriters based on commission income and claims experience on policies during the previous year. Increases
and decreases in contingency income are reflective of corresponding increases and decreases in the amount of claims paid by
insurance carriers.
Wealth Management Revenue
- Fees for managing trust accounts (inclusive of personal and corporate benefit accounts, IRAs, and custodial accounts) are
based on the value of assets under management in the account, with the amount of the fee depending on the type of account.
Revenue is recognized on a monthly basis, and there is little to no risk of a material reversal of revenue. Fees for other wealth
management services, such as investment guidance relating to fixed and variable annuities, mutual funds, stocks and other
investments, are recognized based on either trade activity, where fees are recognized at the time of the trade, or assets under
management, where fees are recognized monthly, and there is little to no risk of material reversal of revenue.
Sales of OREO
- The Company continually markets the properties included in the OREO portfolio. The Company will at times, in the ordinary
course of business, provide seller-financing on sales of OREO. In cases where a sale is seller-financed, the Company must
ensure the commitment of both parties to perform their respective obligations and the collectability of the transaction price in
order to properly recognize the revenue on the sale of OREO. This is accomplished through the Company’s loan underwriting
process. In this process the Company considers factors such as the buyer’s initial equity in the property, the credit quality of the
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 – Significant Accounting Policies (continued)
80
buyer, the financing terms of the loan and the cash flow from the property, if applicable. If it is determined that the contract
criteria in ASC 606 have been met, the revenue on the sale of OREO will be recognized on the closing date of the sale when the
Company has transferred title to the buyer and obtained the right to receive payment for the property. In instances where sales
are not seller-financed, the Company recognizes revenue on the closing date of the sale when the Company has obtained
payment for the property and transferred title to the buyer. For additional information on OREO, please see Note 6, “Other Real
Estate Owned.”
Income Taxes: Income taxes are accounted for under the liability method. Under this method, deferred tax assets and liabilities
are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using
the enacted tax rates and laws that will be in effect when the differences are expected to reverse. It is the Company’s policy to
recognize interest and penalties, if incurred, related to unrecognized tax benefits in income tax expense. The Company and its
subsidiaries file a consolidated federal income tax return. Renasant Bank provides for income taxes on a separate-return basis
and remits to the Company amounts determined to be currently payable.
Deferred income taxes, included in “Other assets” on the Consolidated Balance Sheets, reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for
income tax purposes. Realization of deferred tax assets is dependent upon the generation of a sufficient level of future taxable
income and recoverable taxes paid in prior years. Although realization is not assured, management believes that the Company
and its subsidiaries will realize a substantial majority of the deferred tax assets. A valuation allowance, if needed, reduces
deferred tax assets to the expected amount most likely to be realized through a charge to income tax expense.
Fair Value Measurements: ASC 820, “Fair Value Measurements and Disclosures,” provides guidance for using fair value to
measure assets and liabilities and also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to
measure fair value into three broad levels. The fair value hierarchy gives the highest priority to a valuation based on quoted
prices in active markets for identical assets and liabilities (Level 1), moderate priority to a valuation based on quoted prices in
active markets for similar assets and liabilities and/or based on assumptions that are observable in the market (Level 2), and the
lowest priority to a valuation based on assumptions that are not observable in the market (Level 3). See Note 15, “Fair Value
Measurements,” for further details regarding the Company’s methods and assumptions used to estimate the fair values of the
Company’s financial assets and liabilities.
Derivative Instruments and Hedging Activities: The Company utilizes derivative financial instruments as part of its ongoing
efforts to manage its interest rate risk exposure as well as to meet the needs of its customers. Derivative financial instruments
are included in the Consolidated Balance Sheets line item “Other assets” or “Other liabilities” at fair value in accordance with
ASC 815, “Derivatives and Hedging.”
Cash flow hedges are utilized to mitigate the exposure to variability in expected future cash flows or other types of forecasted
transactions. For the Company’s derivatives designated as cash flow hedges, changes in the fair value of cash flow hedges are,
to the extent that the hedging relationship is effective, recorded as other comprehensive income and are subsequently
recognized in earnings at the same time that the hedged item is recognized in earnings. The ineffective portions of the changes
in fair value of the hedging instruments are immediately recognized in earnings. There were no ineffective portions for 2024
and 2023. The assessment of the effectiveness of a hedging relationship is evaluated under the hypothetical derivative method.
Fair value hedges are utilized to mitigate the exposure to future interest rate risk. For the Company’s derivatives designated as
fair value hedges, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged liability
attributable to the hedged risk are recognized in current earnings. The gain or loss on the derivative instrument is presented on
the same line item as the earnings effect of the hedged item.
The Company also utilizes derivative instruments that are not designated as hedging instruments. The Company enters into
interest rate cap and/or floor agreements with its customers and then enters into an offsetting derivative contract position with
other financial institutions to mitigate the interest rate risk associated with these customer contracts. Because these derivative
instruments are not designated as hedging instruments, changes in the fair value of the derivative instruments are recognized
currently in earnings.
The Company enters into interest rate lock commitments on certain residential mortgage loans with its customers to mitigate the
interest rate risk associated with the commitments to fund fixed-rate mortgage loans. Under such commitments, interest rates
for a mortgage loan are typically locked in for up to 45 days with the customer. These interest rate lock commitments are
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 – Significant Accounting Policies (continued)
81
recorded at fair value in the Company’s Consolidated Balance Sheets. Gains and losses arising from changes in the valuation of
the commitments are recognized currently in earnings and are reflected under the line item “Mortgage banking income” on the
Consolidated Statements of Income.
The Company utilizes two methods to deliver mortgage loans to be sold to an investor. Under a “best efforts” sales agreement,
the Company enters into a sales agreement with an investor in the secondary market to sell the loan when an interest rate lock
commitment is entered into with a customer, as described above. Under a “best efforts” sales agreement, the Company is
obligated to sell the mortgage loan to the investor only if the loan is closed and funded. Thus, the Company will not incur any
liability to an investor if the mortgage loan commitment in the pipeline fails to close. Under a “mandatory delivery” sales
agreement, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price and
delivery date. Penalties are paid to the investor should the Company fail to satisfy the contract. These types of mortgage loan
commitments are recorded at fair value on the Company’s Consolidated Balance Sheets. Gains and losses arising from changes
in the valuation of these commitments are recognized currently in earnings and are reflected under the line item “Mortgage
banking income” on the Consolidated Statements of Income.
Treasury Stock: Treasury stock is recorded at cost. Shares held in treasury are authorized but unissued shares.
Retirement Plans: The Company sponsors a noncontributory pension plan and provides retiree medical benefits for certain
employees. The Company’s independent actuary firm prepares actuarial valuations of pension cost and obligation under ASC
715, “Compensation – Retirement Benefits” (“ASC 715”), using assumptions and estimates derived in accordance with the
guidance set forth in ASC 715. Expense related to the plans is included under the line item “Salaries and employee benefits” on
the Consolidated Statements of Income. Actuarial gains and losses are recognized in accumulated other comprehensive income,
net of tax, until they are amortized as a component of plan expense. See Note 12, “Employee Benefit and Deferred
Compensation Plans,” for further details regarding the Company’s retirement plans.
Stock-Based Compensation: The Company recognizes compensation expense for all share-based payments to employees in
accordance with ASC 718, “Compensation - Stock Compensation” (“ASC 718”). Compensation expense for option grants and
restricted stock awards is determined based on the estimated fair value of the stock options and restricted stock on the
applicable grant or award date and is recognized over the respective awards’ vesting period. The Company has elected to
account for forfeitures in compensation cost when they occur as permitted under the guidance in ASC 718. Expense associated
with the Company’s stock-based compensation is included under the line item “Salaries and employee benefits” on the
Consolidated Statements of Income. See Note 12, “Employee Benefit and Deferred Compensation Plans,” for further details
regarding the Company’s stock-based compensation.
Earnings Per Common Share: Basic net income per common share is calculated by dividing net income by the weighted-
average number of common shares outstanding for the period. Diluted net income per common share reflects the pro forma
dilution of shares outstanding, assuming nonvested restricted stock awards, whose vesting is subject to future service
requirements, were outstanding common shares as of the awards’ respective grant dates, calculated in accordance with the
treasury method (the Company had no stock options outstanding in 2024, 2023 or 2022). See Note 17, “Net Income Per
Common Share,” for the reconciliation of the numerators and denominators of the basic and diluted earnings per share
computations.
Subsequent Events: The Company has evaluated, for consideration of recognition or disclosure, subsequent events that have
occurred through the date of issuance of its financial statements and determined that no significant events occurred after
December 31, 2024 but prior to the issuance of these financial statements that would have a material impact on its Consolidated
Financial Statements.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 – Significant Accounting Policies (continued)
82
Impact of Recently-Issued Accounting Standards and Pronouncements:
In March 2023, FASB issued Accounting Standards Update (“ASU”) 2023-02, “Investments - Equity Method and Joint
Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization
Method” (“ASU 2023-02”), which permits reporting entities to elect to account for their tax equity investments, regardless of
the tax credit program from which the income tax credits are received, using the proportional amortization method if certain
conditions are met. ASU 2023-02 was effective on January 1, 2024. The adoption of this accounting pronouncement did not
have a significant impact on the Company’s historical financial statements but could influence the Company’s decisions with
respect to investments in certain tax credits prospectively.
In October 2023, FASB issued ASU 2023-06, “Disclosure Improvements” (“ASU 2023-06”), which amends the disclosure
requirements related to various subtopics in the FASB Accounting Standards Codification (the “Codification”). ASU 2023-06
adds a number of disclosure requirements to the Codification in response to the SEC initiative to update and simplify disclosure
requirements. ASU 2023-06 is to be applied prospectively, and early adoption is prohibited. For SEC reporting entities, the
effective dates will be the respective effective dates of the SEC’s removal of the related disclosure requirements from
Regulation S-X or Regulation S-K. If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation
S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not
become effective for any entities. ASU 2023-06 is not expected to have a significant impact on the Company’s financial
statements.
In November 2023, FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment
Disclosures” (“ASU 2023-07”), which amends the disclosure requirements related to segment reporting primarily through
enhanced disclosure about significant segment expenses and by requiring disclosure of segment information on an annual and
interim basis. ASU 2023-07 was effective January 1, 2024 and did not have a significant impact on the Company’s financial
statements or segment disclosures.
In December 2023, FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU
2023-09”), which enhances the transparency and decision usefulness of income tax disclosures. ASU 2023-09 will require
disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes
paid. Entities will also be required to disclose income/(loss) from continuing operations before income tax expense/(benefit)
disaggregated between domestic and foreign, as well as income tax expense/(benefit) from continuing operations disaggregated
by federal, state and foreign. ASU 2023-09 was effective January 1, 2025 and is not expected to have a significant impact on
our financial statements.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 – Significant Accounting Policies (continued)
83
Note 2 – Securities
(In Thousands, Except Number of Securities)
The amortized cost and fair value of securities available for sale were as follows as of the dates presented:
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
December 31, 2024
Obligations of states and political subdivisions
$
20,266 $
57 $
(2,269) $
18,054
Residential mortgage-backed securities:
Government agency mortgage-backed securities
185,292
81
(24,468)
160,905
Government agency collateralized mortgage
obligations
475,311
75
(86,870)
388,516
Commercial mortgage-backed securities:
Government agency mortgage-backed securities
11,373
—
(751)
10,622
Government agency collateralized mortgage
obligations
146,510
41
(21,595)
124,956
Other debt securities
130,175
440
(2,655)
127,960
$
968,927 $
694 $
(138,608) $
831,013
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
December 31, 2023
Obligations of states and political subdivisions
$
36,374 $
119 $
(1,883) $
34,610
Residential mortgage-backed securities:
Government agency mortgage-backed securities
301,400
172
(24,968)
276,604
Government agency collateralized mortgage
obligations
485,164
—
(85,883)
399,281
Commercial mortgage-backed securities:
Government agency mortgage-backed securities
6,029
—
(637)
5,392
Government agency collateralized mortgage
obligations
161,299
24
(21,965)
139,358
Other debt securities
72,383
109
(4,458)
68,034
$
1,062,649 $
424 $
(139,794) $
923,279
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
84
The amortized cost and fair value of securities held to maturity were as follows as of the dates presented:
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
December 31, 2024
Obligations of states and political subdivisions
$
284,542 $
3 $
(42,491) $
242,054
Residential mortgage-backed securities
Government agency mortgage-backed securities
372,414
—
(25,251)
347,163
Government agency collateralized mortgage obligations
354,882
—
(41,506)
313,376
Commercial mortgage-backed securities
Government agency mortgage-backed securities
16,961
—
(2,958)
14,003
Government agency collateralized mortgage obligations
43,662
—
(7,317)
36,345
Other debt securities
53,683
—
(4,080)
49,603
$ 1,126,144 $
3 $ (123,603) $ 1,002,544
Allowance for credit losses - held to maturity securities
(32)
Held-to-maturity securities, net of allowance for credit losses
$ 1,126,112
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
December 31, 2023
Obligations of states and political subdivisions
$
288,154 $
74 $
(33,688) $
254,540
Residential mortgage-backed securities
Government agency mortgage-backed securities
426,264
—
(20,314)
405,950
Government agency collateralized mortgage obligations
387,208
—
(31,670)
355,538
Commercial mortgage-backed securities
Government agency mortgage-backed securities
16,983
—
(2,972)
14,011
Government agency collateralized mortgage obligations
44,514
—
(6,977)
37,537
Other debt securities
58,373
—
(4,119)
54,254
$ 1,221,496 $
74 $
(99,740) $ 1,121,830
Allowance for credit losses - held to maturity securities
(32)
Held-to-maturity securities, net of allowance for credit losses
$ 1,221,464
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 2 – Securities (continued)
85
Available for sale securities sold were as follows for the years ended December 31, 2024 and 2023. There were no available for
sale securities sold during the year ended December 31, 2022. For the securities sold for the year ended December 31, 2024, the
Company intended to sell these as of December 31, 2023, and thereafter completed the sale in January 2024. Therefore, the
Company impaired the securities identified to be sold as of December 31, 2023 and did not recognize a gain or loss during
2024.
Carrying Value
Prior to
Impairment
Net Proceeds
Impairment
Recognized in
December 2023
Twelve months ended December 31, 2024
Obligations of states and political subdivisions
$
12,301 $
11,360 $
(941)
Residential mortgage-backed securities:
Government agency mortgage-backed securities
107,389
95,922
(11,467)
Government agency collateralized mortgage obligations
48,300
43,990
(4,310)
Commercial mortgage-backed securities:
Government agency collateralized mortgage obligations
28,547
25,913
(2,634)
$
196,537 $
177,185 $
(19,352)
Carrying Value
Net Proceeds
Gain/(Loss)
Twelve months ended December 31, 2023
Obligations of other U.S. Government agencies and corporations
$
170,000 $
164,915 $
(5,085)
Obligations of states and political subdivisions
104,950
99,439
(5,511)
Residential mortgage backed securities:
Government agency mortgage backed securities
137,196
130,602
(6,594)
Government agency collateralized mortgage obligations
54,028
51,101
(2,927)
Commercial mortgage backed securities:
Government agency mortgage backed securities
5,048
4,825
(223)
Government agency collateralized mortgage obligations
40,197
38,099
(2,098)
$
511,419 $
488,981 $
(22,438)
Gross realized gains and gross realized losses on sales of securities available for sale were as follows for the periods presented:
Year Ended December 31,
2024(1)
2023
2022
Gross gains on sales of securities available for sale
$
5 $
126 $
—
Gross losses on sales of securities available for sale
(19,357)
(22,564)
—
Losses on sales of securities available for sale, net
$
(19,352) $
(22,438) $
—
(1) Impairment recognized in December 2023.
At December 31, 2024 and 2023, securities with a carrying value of approximately $818,344 and $880,715, respectively, were
pledged to secure government, public, trust, and other deposits. Securities with a carrying value of $25,526 and $14,329 were
pledged as collateral for short-term borrowings and derivative instruments at December 31, 2024 and 2023, respectively.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 2 – Securities (continued)
86
The amortized cost and fair value of securities at December 31, 2024 by contractual maturity are shown below. Expected
maturities will differ from contractual maturities because issuers may call or prepay obligations with or without call or
prepayment penalties.
Held to Maturity
Available for Sale
Amortized
Cost
Fair
Value
Amortized
Cost
Fair
Value
Due within one year
$
1,494 $
1,484 $
1,997 $
2,043
Due after one year through five years
6,017
5,634
41,859
41,823
Due after five years through ten years
127,004
109,571
34,774
31,648
Due after ten years
150,027
125,365
4,077
3,461
Residential mortgage-backed securities:
Government agency mortgage-backed securities
372,414
347,163
185,292
160,905
Government agency collateralized mortgage
obligations
354,882
313,376
475,311
388,516
Commercial mortgage-backed securities:
Government agency mortgage-backed securities
16,961
14,003
11,373
10,622
Government agency collateralized mortgage
obligations
43,662
36,345
146,510
124,956
Other debt securities
53,683
49,603
67,734
67,039
$
1,126,144 $
1,002,544 $
968,927 $
831,013
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 2 – Securities (continued)
87
The following tables present the gross unrealized losses and fair value of investment securities, aggregated by investment
category and the length of time the investments have been in a continuous unrealized loss position, as of the dates presented:
Less than 12 Months
12 Months or More
Total
#
Fair
Value
Unrealized
Losses
#
Fair
Value
Unrealized
Losses
#
Fair
Value
Unrealized
Losses
Available for Sale:
December 31, 2024
Obligations of states and political
subdivisions
—
$
—
$
—
7
$
12,841
$
(2,269)
7
$
12,841
$
(2,269)
Residential mortgage-backed securities:
Government agency mortgage-
backed securities
7
11,051
(259)
34
141,321
(24,208)
41
152,372
(24,467)
Government agency collateralized
mortgage obligations
3
48,879
(482)
37
311,964
(86,389)
40
360,843
(86,871)
Commercial mortgage-backed
securities:
Government agency mortgage-
backed securities
2
5,248
(122)
2
5,375
(629)
4
10,623
(751)
Government agency collateralized
mortgage obligations
2
7,681
(39)
25
104,326
(21,556)
27
112,007
(21,595)
Other debt securities
2
22,357
(218)
17
30,801
(2,437)
19
53,158
(2,655)
Total
16
$
95,216
$
(1,120)
122
$
606,628
$
(137,488)
138
$
701,844
$
(138,608)
December 31, 2023
Obligations of states and political
subdivisions
3
$
2,914
$
(2)
9
$
15,198
$
(1,881)
12
$
18,112
$
(1,883)
Residential mortgage-backed securities:
Government agency mortgage-
backed securities
1
806
(25)
35
166,963
(24,943)
36
167,769
(24,968)
Government agency collateralized
mortgage obligations
—
—
—
37
354,574
(85,883)
37
354,574
(85,883)
Commercial mortgage-backed
securities:
Government agency mortgage-
backed securities
—
—
—
2
5,392
(637)
2
5,392
(637)
Government agency collateralized
mortgage obligations
—
—
—
25
108,575
(21,965)
25
108,575
(21,965)
Other debt securities
2
3,099
(195)
19
35,072
(4,263)
21
38,171
(4,458)
Total
6
$
6,819
$
(222)
127
$
685,774
$
(139,572)
133
$
692,593
$
(139,794)
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 2 – Securities (continued)
88
Less than 12 months
12 months or more
Total
Held to Maturity:
#
Fair Value
Unrealized
Losses
#
Fair Value
Unrealized
Losses
#
Fair Value
Unrealized
Losses
December 31, 2024
Obligations of states and political
subdivisions
—
$
—
$
—
128
$
240,394
$
(42,491)
128
$
240,394
$
(42,491)
Residential mortgage-backed securities:
Government agency mortgage-backed
securities
—
—
—
69
347,154
(25,251)
69
347,154
(25,251)
Government agency collateralized
mortgage obligations
—
—
—
18
313,376
(41,506)
18
313,376
(41,506)
Commercial mortgage-backed
securities:
Government agency mortgage-backed
securities
—
—
—
1
14,002
(2,958)
1
14,002
(2,958)
Government agency collateralized
mortgage obligations
—
—
—
9
36,345
(7,317)
9
36,345
(7,317)
Other debt securities
—
—
—
10
49,603
(4,080)
10
49,603
(4,080)
Total
—
$
—
$
—
235
$ 1,000,874
$
(123,603)
235
$ 1,000,874
$
(123,603)
December 31, 2023
Obligations of states and political
subdivisions
2
$
2,807
$
(25)
126
$
249,995
$
(33,663)
128
$
252,802
$
(33,688)
Residential mortgage-backed securities:
Government agency mortgage-backed
securities
—
—
—
70
405,950
(20,314)
70
405,950
(20,314)
Government agency collateralized
mortgage obligations
—
—
—
18
355,538
(31,670)
18
355,538
(31,670)
Commercial mortgage-backed
securities:
Government agency mortgage-backed
securities
—
—
—
1
14,011
(2,972)
1
14,011
(2,972)
Government agency collateralized
mortgage obligations
—
—
—
9
37,537
(6,977)
9
37,537
(6,977)
Other debt securities
—
—
—
10
54,254
(4,119)
10
54,254
(4,119)
Total
2
$
2,807
$
(25)
234
$ 1,117,285
$
(99,715)
236
$ 1,120,092
$
(99,740)
The Company does not intend to sell any of the securities in an unrealized loss position, and it is not more likely than not that
the Company will be required to sell any such security prior to the recovery of its amortized cost basis, which may be maturity.
Furthermore, more than 90% of available for sale securities have the explicit or implicit backing of the United States
government. Performance of these securities has been in line with broader market price performance indicating that increases in
market-based, risk free rates, and not credit-related factors, are driving losses. For municipal and corporate securities, the
Company considers historical experience with credit sensitive securities, current market conditions, the financial health of the
issuer, current credit ratings, ratings changes and outlook, explicit and implicit guarantees, or insurance programs when
determining the fair value of the contractual cash flows. Based on its review of these factors as of December 31, 2024, the
Company determined that all such losses resulted from factors not deemed credit related. As a result, no credit-related
impairment was recognized in current earnings, and all unrealized losses for available for sale securities were recorded in
Accumulated other Comprehensive Income.
At each of December 31, 2024 and 2023, the allowance for credit losses on held to maturity securities was $32. The Company
monitors the credit quality of debt securities held to maturity using bond investment grades assigned by third party ratings
agencies. Updated investment grades are obtained as they become available from the agencies. On December 31, 2024, all debt
securities held to maturity were rated A or higher by the ratings agencies. As such, no additional credit loss was recorded for
held to maturity securities.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 2 – Securities (continued)
89
Note 3 – Loans
(In Thousands, Except Number of Loans)
The following is a summary of loans and leases, excluding loans held for sale, at December 31:
2024
2023
Commercial, financial, agricultural
$
1,885,817 $
1,871,821
Lease financing
95,071
122,807
Real estate – construction:
Residential
256,655
269,616
Commercial
836,998
1,063,781
Total real estate – construction
1,093,653
1,333,397
Real estate – 1-4 family mortgage:
Primary
2,428,076
2,422,482
Home equity
544,158
522,688
Rental/investment
402,938
373,755
Land development
113,705
120,994
Total real estate – 1-4 family mortgage
3,488,877
3,439,919
Real estate – commercial mortgage:
Owner-occupied
1,894,679
1,648,961
Non-owner occupied
4,226,937
3,733,174
Land development
114,452
104,415
Total real estate – commercial mortgage
6,236,068
5,486,550
Installment loans to individuals
90,014
103,523
Gross loans
12,889,500
12,358,017
Unearned income
(4,480)
(6,787)
Loans, net of unearned income
$
12,885,020 $
12,351,230
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
90
Past Due and Nonaccrual Loans
The following table provides an aging of past due and nonaccrual loans, segregated by class, as of the dates presented:
December 31, 2024
Commercial, financial,
agricultural
$
807 $
125 $ 1,883,010 $ 1,883,942 $
245 $
734 $
896 $
1,875 $ 1,885,817
Lease financing
27
—
90,961
90,988
78
614
3,391
4,083
95,071
Real estate – construction:
Residential
2,194
—
253,238
255,432
—
1,023
200
1,223
256,655
Commercial
—
16
836,982
836,998
—
—
—
—
836,998
Total real estate –
construction
2,194
16
1,090,220
1,092,430
—
1,023
200
1,223 1,093,653
Real estate – 1-4 family
t Primary
29,258
—
2,343,781
2,373,039
13,627
25,335
16,075
55,037 2,428,076
Home equity
3,186
35
537,568
540,789
941
1,094
1,334
3,369
544,158
Rental/investment
573
12
401,977
402,562
136
240
—
376
402,938
Land development
25
1,740
111,920
113,685
20
—
—
20
113,705
Total real estate – 1-4 family
t
33,042
1,787
3,395,246
3,430,075
14,724
26,669
17,409
58,802 3,488,877
Real estate – commercial
mortgage:
Owner-occupied
2,650
365
1,879,350
1,882,365
296
1,000
11,018
12,314 1,894,679
Non-owner occupied
326
—
4,197,331
4,197,657
—
—
29,280
29,280 4,226,937
Land development
142
160
111,019
111,321
98
16
3,017
3,131
114,452
Total real estate –
commercial mortgage
3,118
525
6,187,700
6,191,343
394
1,016
43,315
44,725 6,236,068
Installment loans to
individuals
654
11
89,246
89,911
4
42
57
103
90,014
Unearned income
—
—
(4,480)
(4,480)
—
—
—
—
(4,480)
Loans, net of unearned
income
$
39,842 $
2,464 $ 12,731,903 $ 12,774,209 $
15,445 $
30,098 $
65,268 $
110,811 $ 12,885,020
Accruing Loans
Nonaccruing Loans
30-89 Days
Past Due
90 Days
or More
Past Due
Current
Loans
Total
Loans
30-89 Days
Past Due
90 Days
or More
Past Due
Current
Loans
Total
Loans
Total
Loans
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 – Loans (continued)
91
December 31, 2023
Commercial, financial,
agricultural
$
1,098 $
483 $ 1,864,441 $ 1,866,022 $
1,310 $
1,296 $
3,193 $
5,799 $ 1,871,821
Lease financing
687
—
122,120
122,807
—
—
—
—
122,807
Real estate – construction:
Residential
—
—
269,616
269,616
—
—
—
—
269,616
Commercial
—
—
1,063,781
1,063,781
—
—
—
— 1,063,781
Total real estate –
construction
—
—
1,333,397
1,333,397
—
—
—
— 1,333,397
Real estate – 1-4 family
mortgage:
Primary
33,679
—
2,344,629
2,378,308
9,454
19,394
15,326
44,174 2,422,482
Home equity
3,004
—
516,835
519,839
987
868
994
2,849
522,688
Rental/investment
9
58
371,508
371,575
43
1,786
351
2,180
373,755
Land development
206
—
120,769
120,975
—
19
—
19
120,994
Total real estate – 1-4 family
mortgage
36,898
58
3,353,741
3,390,697
10,484
22,067
16,671
49,222 3,439,919
Real estate – commercial
mortgage:
Owner-occupied
4,867
—
1,640,721
1,645,588
131
1,904
1,338
3,373 1,648,961
Non-owner occupied
9,161
—
3,714,239
3,723,400
6,740
—
3,034
9,774 3,733,174
Land development
90
—
104,025
104,115
—
259
41
300
104,415
Total real estate –
commercial mortgage
14,118
—
5,458,985
5,473,103
6,871
2,163
4,413
13,447 5,486,550
Installment loans to
individuals
1,230
13
101,932
103,175
13
4
331
348
103,523
Unearned income
—
—
(6,787)
(6,787)
—
—
—
—
(6,787)
Loans, net of unearned
income
$
54,031 $
554 $ 12,227,829 $ 12,282,414 $
18,678 $
25,530 $
24,608 $
68,816 $ 12,351,230
Accruing Loans
Nonaccruing Loans
30-89 Days
Past Due
90 Days
or More
Past Due
Current
Loans
Total
Loans
30-89 Days
Past Due
90 Days
or More
Past Due
Current
Loans
Total
Loans
Total
Loans
Certain Modifications to Borrowers Experiencing Financial Difficulty
Certain modifications of loans made to borrowers experiencing financial difficulty in the form of principal forgiveness, an
interest rate reduction, an other-than-insignificant payment delay (including extension of the amortization period), or a term
extension, excluding covenant waivers and modification of contingent acceleration clauses, are required to be disclosed in
accordance with ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage
Disclosures” (“ASU 2022-02”). Unused commitments relating to such modified loans totaled $1,135 and $3,115 at December
31, 2024 and 2023, respectively. Upon the Company’s determination that a modification has been subsequently deemed
uncollectible, the loan, or portion of the loan, is charged off, the amortized cost basis of the loan is reduced by the uncollectible
amount, and the allowance for credit losses is adjusted accordingly.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 – Loans (continued)
92
The following tables present the amortized cost basis of loans that were experiencing financial difficulty, modified during the
years ended December 31, 2024 and 2023, and required to be disclosed under ASU 2022-02, by class of financing receivable
and by type of modification. The percentage of the amortized cost basis for each class of disclosed modifications as compared
to the amortized cost basis of each class of loans is also presented below.
Year Ended December 31, 2024
Interest
Rate
Reduction
Term
Extension
Payment
Delay
Term
Extension
and
Payment
Delay
Interest
Rate
Reduction
and Term
Extension
Interest
Rate
Reduction,
Term
Extension
and
Payment
Delay
Interest
Rate
Reduction
and
Payment
Delay
Total
%
Total
Loans
by
Class
Commercial, financial, agricultural
$
3,215
$
67
$
47
$
—
$
—
$
113
$
—
$ 3,442
0.18 %
Real estate – 1-4 family mortgage:
Primary
—
55
2,046
405
—
—
204
2,710
0.11
Home equity
—
103
—
—
—
—
—
103
0.02
Rental/investment
—
36
—
—
—
—
—
36
0.01
Total real estate – 1-4 family
mortgage
—
194
2,046
405
—
—
204
2,849
0.08
Real estate – commercial mortgage:
Owner-occupied
6,948
1,249
204
232
252
—
—
8,885
0.47
Non-owner occupied
—
19,288
79
—
—
—
—
19,367
0.46
Total real estate – commercial
mortgage
6,948
20,537
283
232
252
—
—
28,252
0.45
Installment loans to individuals
—
—
13
—
—
3
—
16
0.02
Loans, net of unearned income
$
10,163
$
20,798
$
2,389
$
637
$
252
$
116
$
204
$ 34,559
0.27 %
Year Ended December 31, 2023
Interest
Rate
Reduction
Term
Extension
Payment
Delay
Interest
Rate
Reduction
and
Payment
Delay
Term
Extension
and
Payment
Delay
Interest
Rate
Reduction
and Term
Extension
Total
%
Total
Loans
by
Class
Commercial, financial, agricultural
$
—
$
1,339
$
220
$
—
$
—
$
—
$ 1,559
0.08 %
Lease financing
—
—
—
—
—
—
—
—
Real estate – construction:
Residential
—
3,018
—
—
—
—
3,018
1.02
Total real estate – construction
—
3,018
—
—
—
—
3,018
0.23
Real estate – 1-4 family mortgage:
Primary
218
31
786
85
153
—
1,273
0.05
Home equity
18
14
—
—
—
—
32
0.01
Rental/investment
—
235
16
—
—
—
251
0.07
Total real estate – 1-4 family mortgage
236
280
802
85
153
—
1,556
0.05
Real estate – commercial mortgage:
Owner-occupied
11,540
727
—
—
—
—
12,267
0.74
Non-owner occupied
999
14,003
—
—
15,323
—
30,325
0.81
Total real estate – commercial mortgage
12,539
14,730
—
—
15,323
—
42,592
0.78
Installment loans to individuals
—
—
22
—
6
20
48
0.05
Loans, net of unearned income
$
12,775
$
19,367
$
1,044
$
85
$
15,482
$
20
$ 48,773
0.39 %
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 – Loans (continued)
93
The following tables present the weighted average financial effect of loan modifications requiring disclosure under ASU
2022-02 by class of financing receivable for the periods presented.
Year ended December 31, 2024
Loan Type
Financial Effect
Interest Rate Reduction
Commercial, financial, agricultural
Reduced the interest rate 46 basis points
Real Estate - Commercial Mortgage - Owner Occupied
Reduced the interest rate 47 basis points
Term Extension
Commercial, financial, agricultural
Extended the term 8 months
Real estate – 1-4 family mortgage - Primary
Extended the term 51 months
Real estate – 1-4 family mortgage - Home Equity
Extended the term 16 months
Real estate – 1-4 family mortgage - Rental/investment
Extended the term 6 months
Real Estate - Commercial Mortgage - Owner Occupied
Extended the term 8 months
Real Estate - Commercial Mortgage - Non-owner Occupied
Extended the term 17 months
Payment Delay
Commercial, financial, agricultural
Delayed the payment 8 months
Real estate – 1-4 family mortgage - Primary
Delayed the payment 20 months
Real estate – 1-4 family mortgage - Rental/investment
Delayed the payment 131 months
Real Estate - Commercial Mortgage - Owner Occupied
Delayed the payment 40 months
Real Estate - Commercial Mortgage - Non-owner Occupied
Delayed the payment 9 months
Installment loans to individuals
Delayed the payment 17 months
Combination - Term Extension and Payment Delay
Commercial, financial, agricultural
Extended the term and delayed the payment 42 months
Real Estate - Commercial Mortgage - Owner Occupied
Extended the term and delayed the payment 9 months
Installment loans to individuals
Extended the term and delayed the payment 61 months
Combination - Interest Rate Reduction and Term Extension
Real Estate - Commercial Mortgage - Owner Occupied
Reduced the interest rate 275 basis points and extended the term 21
months
Combination - Interest Rate Reduction and Payment Delay
Real estate – 1-4 family mortgage - Primary
Reduced the interest rate 25 basis points and delayed the payment 51
months
Combination - Interest Rate Reduction, Term Extension and
Payment Delay
Commercial, financial, agricultural
Reduced the interest rate 181 basis points and extended the term and
delayed the payment 59 months
Installment loans to individuals
Reduced the interest rate 460 basis points and extended the term and
delayed the payment 54 months
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 – Loans (continued)
94
Year ended December 31, 2023
Loan Type
Financial Effect
Interest Rate Reduction
Real estate – 1-4 family mortgage - Primary
Reduced the interest rate 25 basis points
Real estate – 1-4 family mortgage - Home Equity
Reduced the interest rate 345 basis points
Real Estate - Commercial Mortgage - Owner Occupied
Reduced the interest rate 41 basis points
Real Estate - Commercial Mortgage - Non-owner Occupied
Reduced the interest rate 12 basis points
Term Extension
Commercial, financial, agricultural
Extended the term 5 months
Real estate – Construction - Residential
Extended the term 5 months
Real estate – 1-4 family mortgage - Primary
Extended the term 7 months
Real estate – 1-4 family mortgage - Home Equity
Extended the term 49 months
Real estate – 1-4 family mortgage - Rental/investment
Extended the term 7 months
Real Estate - Commercial Mortgage - Owner Occupied
Extended the term 8 months
Real Estate - Commercial Mortgage - Non-owner Occupied
Extended the term 8 months
Payment Delay
Commercial, financial, agricultural
Delayed the payment 31 months
Real estate – 1-4 family mortgage - Primary
Delayed the payment 45 months
Real estate – 1-4 family mortgage - Rental/investment
Delayed the payment 17 months
Real Estate - Commercial Mortgage - Owner Occupied
Delayed the payment 3 months
Installment loans to individuals
Delayed the payment 12 months
Combination - Interest Rate Reduction and Payment Delay
Real estate – 1-4 family mortgage - Primary
Reduced the interest rate 25 basis points and delayed the payment 43
months
Combination - Interest Rate Reduction and Term Extension
Installment loans to individuals
Reduced the interest rate 115 basis points and extended the term 12
months
Combination - Term Extension and Payment Delay
Real Estate - Commercial Mortgage - Non-owner Occupied
Extended the term 10 months and delayed the payment 8 months
Real estate – 1-4 family mortgage - Primary
Extended the term and delayed the payment 117 months
Installment loans to individuals
Extended the term and delayed the payment 15 months
Loan modifications requiring disclosure under ASU 2022-02, that were modified in 2024 and for which the accrual or past due
status had deteriorated since the modification totaled $34 at December 31, 2024. The past due status of these loans moved from
current to 30-89 days past due. At December 31, 2023, there were no modifications with accrual or past due status deterioration
during 2023.
Credit Quality
For commercial and commercial real estate-secured loans, internal risk-rating grades are assigned jointly by lending and credit
administration, with validation by loan review personnel. The risk rating is based on an analysis of the financial and collateral
strength of the borrower, guarantor strength, as well as other credit attributes underlying each loan based on asset type and
industry. Management analyzes the resulting ratings, as well as other external statistics and factors such as delinquency, to track
the migration performance of the portfolio balances of commercial and commercial real estate secured loans. Loan grades range
between 10 and 95, with 10 being loans with the least credit risk. Loans within the “Pass” grade (those with a risk rating
between 10 and 69) generally have a lower risk of loss and therefore a lower risk factor applied to the loan balances. The
“Special Mention” grade (those with a risk rating between 70 and 79) represents a loan where a significant adverse risk-
modifying action is anticipated in the near term and, left uncorrected, could result in deterioration of the credit quality of the
loan. Loans that migrate toward the “Substandard” grade (those with a risk rating between 80 and 95) generally have a higher
risk of loss and therefore a higher risk factor applied to those related loan balances.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 – Loans (continued)
95
The following tables present the Company’s loan portfolio by year of origination and internal risk-rating grades as of the dates
presented:
December 31, 2024
Commercial, Financial,
Agricultural
$ 292,917 $ 208,900 $ 228,690 $ 113,192 $
66,121 $
54,163 $ 898,772 $
2,889 $ 1,865,644
Pass
287,632
206,087
213,209
112,527
64,780
52,756
874,104
2,767 1,813,862
Special Mention
591
1,613
185
242
107
378
7,006
—
10,122
Substandard
4,694
1,200
15,296
423
1,234
1,029
17,662
122
41,660
Lease Financing Receivables
$
12,239 $
22,339 $
39,738 $
9,125 $
3,724 $
3,426 $
— $
— $
90,591
Pass
12,239
17,225
34,637
8,778
2,587
3,246
—
—
78,712
Watch
—
1,261
3,254
173
1,137
180
—
—
6,005
Substandard
—
3,853
1,847
174
—
—
—
—
5,874
Real Estate - Construction
$ 353,568 $ 243,827 $ 382,439 $
18,443 $
— $
625 $
20,096 $
— $ 1,018,998
Residential
$ 162,966 $
15,455 $
1,708 $
— $
— $
625 $
1,246 $
— $ 182,000
Pass
160,772
14,673
1,467
—
—
625
1,246
—
178,783
Special Mention
2,194
—
—
—
—
—
—
—
2,194
Substandard
—
782
241
—
—
—
—
—
1,023
Commercial
$ 190,602 $ 228,372 $ 380,731 $
18,443 $
— $
— $
18,850 $
— $ 836,998
Pass
190,602
216,051
380,731
18,443
—
—
18,850
—
824,677
Special Mention
—
12,321
—
—
—
—
—
—
12,321
Substandard
—
—
—
—
—
—
—
—
—
Real Estate - 1-4 Family Mortgage
$ 187,587 $ 110,606 $ 120,025 $
66,034 $
33,800 $
26,150 $
35,740 $
1,150 $ 581,092
Primary
$
10,925 $
5,336 $
7,865 $
4,247 $
2,463 $
6,534 $
1,704 $
796 $
39,870
Pass
10,925
5,126
7,558
3,979
2,463
5,776
1,704
796
38,327
Special Mention
—
—
143
—
—
—
—
—
143
Substandard
—
210
164
268
—
758
—
—
1,400
Home Equity
$
966 $
1,005 $
7 $
937 $
— $
35 $
28,976 $
51 $
31,977
Pass
966
1,005
7
937
—
—
28,976
—
31,891
Special Mention
—
—
—
—
—
—
—
—
—
Substandard
—
—
—
—
—
35
—
51
86
Rental/Investment
$
96,447 $
83,682 $ 108,436 $
59,836 $
31,029 $
18,146 $
4,745 $
303 $ 402,624
Pass
95,903
82,878
108,296
59,553
30,936
17,487
4,745
213
400,011
Special Mention
180
564
44
52
24
—
—
—
864
Substandard
364
240
96
231
69
659
—
90
1,749
Land Development
$
79,249 $
20,583 $
3,717 $
1,014 $
308 $
1,435 $
315 $
— $ 106,621
Pass
79,150
20,583
1,977
1,014
308
1,435
315
—
104,782
Special Mention
99
—
1,740
—
—
—
—
—
1,839
Substandard
—
—
—
—
—
—
—
—
—
Real Estate - Commercial
Mortgage
$ 996,574 $ 708,788 $ 1,807,169 $ 1,009,177 $ 622,818 $ 792,959 $ 251,819 $
35,475 $ 6,224,779
Owner-Occupied
$ 373,353 $ 271,445 $ 339,116 $ 275,077 $ 190,911 $ 304,663 $ 137,023 $
2,969 $ 1,894,557
Pass
372,183
261,624
330,018
271,228
188,860
299,578
130,847
2,717 1,857,055
Special Mention
948
348
388
850
131
1,538
—
—
4,203
Substandard
222
9,473
8,710
2,999
1,920
3,547
6,176
252
33,299
Non-Owner Occupied
$ 576,021 $ 427,715 $ 1,447,377 $ 724,161 $ 428,874 $ 484,792 $ 105,645 $
32,331 $ 4,226,916
Pass
554,095
427,339 1,354,418
718,043
425,291
430,220
105,645
24,360 4,039,411
Term Loans Amortized Cost Basis by Origination Year
2024
2023
2022
2021
2020
Prior
Revolving
Loans
Revolving
Loans
Converted
to Term
Total
Loans
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 – Loans (continued)
96
Special Mention
4,900
21
77,741
814
1,138
8,254
—
—
92,868
Substandard
17,026
355
15,218
5,304
2,445
46,318
—
7,971
94,637
Land Development
$
47,200 $
9,628 $
20,676 $
9,939 $
3,033 $
3,504 $
9,151 $
175 $ 103,306
Pass
47,134
9,585
17,187
9,735
2,783
3,468
9,151
175
99,218
Special Mention
66
24
142
31
59
—
—
—
322
Substandard
—
19
3,347
173
191
36
—
—
3,766
Installment loans to individuals
$
5 $
— $
— $
— $
— $
— $
— $
— $
5
Pass
5
—
—
—
—
—
—
—
5
Special Mention
—
—
—
—
—
—
—
—
—
Substandard
—
—
—
—
—
—
—
—
—
Total loans subject to risk rating
$ 1,842,890 $ 1,294,460 $ 2,578,061 $ 1,215,971 $ 726,463 $ 877,323 $ 1,206,427 $
39,514 $ 9,781,109
Pass
1,811,606 1,262,176 2,449,505 1,204,237
718,008
814,591 1,175,583
31,028 9,466,734
Special Mention
8,978
16,152
83,637
2,162
2,596
10,350
7,006
—
130,881
Substandard
22,306
16,132
44,919
9,572
5,859
52,382
23,838
8,486
183,494
Term Loans Amortized Cost Basis by Origination Year
2024
2023
2022
2021
2020
Prior
Revolving
Loans
Revolving
Loans
Converted
to Term
Total
Loans
December 31, 2023
Commercial, Financial,
Agricultural
$ 312,902 $ 289,264 $ 162,535 $
98,894 $
51,162 $
38,518 $ 883,302 $
19,440 $ 1,856,017
Pass
311,312
288,249
161,902
97,771
50,936
32,169
870,792
19,338 1,832,469
Special Mention
893
364
10
294
—
291
914
63
2,829
Substandard
697
651
623
829
226
6,058
11,596
39
20,719
Lease Financing Receivables
$
32,842 $
49,628 $
12,317 $
13,553 $
5,969 $
1,700 $
— $
— $ 116,009
Pass
32,842
47,050
12,317
11,735
5,443
1,395
—
—
110,782
Watch
—
2,578
—
1,818
526
305
—
—
5,227
Substandard
—
—
—
—
—
—
—
—
—
Real Estate - Construction
$ 320,889 $ 581,201 $ 308,442 $
16,066 $
— $
1,823 $
1,225 $
— $ 1,229,646
Residential
$ 149,399 $
12,883 $
1,989 $
— $
— $
369 $
1,225 $
— $ 165,865
Pass
146,535
10,147
1,989
—
—
369
1,225
—
160,265
Special Mention
2,415
—
—
—
—
—
—
—
2,415
Substandard
449
2,736
—
—
—
—
—
—
3,185
Commercial
$ 171,490 $ 568,318 $ 306,453 $
16,066 $
— $
1,454 $
— $
— $ 1,063,781
Pass
142,917
568,318
306,453
16,066
—
1,454
—
— 1,035,208
Special Mention
28,573
—
—
—
—
—
—
—
28,573
Substandard
—
—
—
—
—
—
—
—
—
Real Estate - 1-4 Family Mortgage
$ 145,568 $ 176,724 $ 100,757 $
41,542 $
19,753 $
30,783 $
30,889 $
1,834 $ 547,850
Primary
$
8,512 $
8,729 $
6,194 $
3,943 $
1,792 $
8,573 $
3,272 $
915 $
41,930
Pass
8,134
8,511
5,859
3,943
1,781
8,140
3,272
915
40,555
Special Mention
183
—
—
—
—
34
—
—
217
Substandard
195
218
335
—
11
399
—
—
1,158
Home Equity
$
1,107 $
10 $
996 $
— $
— $
16 $
20,628 $
74 $
22,831
Term Loans Amortized Cost Basis by Origination Year
2023
2022
2021
2020
2019
Prior
Revolving
Loans
Revolving
Loans
Converted
to Term
Total
Loans
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 – Loans (continued)
97
Pass
1,107
10
996
—
—
1
20,628
—
22,742
Special Mention
—
—
—
—
—
—
—
—
—
Substandard
—
—
—
—
—
15
—
74
89
Rental/Investment
$
89,760 $ 129,241 $
75,457 $
37,171 $
17,817 $
18,721 $
4,678 $
845 $ 373,690
Pass
89,135
128,939
74,330
35,388
16,670
18,109
4,678
583
367,832
Special Mention
63
47
256
4
50
42
—
—
462
Substandard
562
255
871
1,779
1,097
570
—
262
5,396
Land Development
$
46,189 $
38,744 $
18,110 $
428 $
144 $
3,473 $
2,311 $
— $ 109,399
Pass
46,151
38,744
18,110
409
144
3,372
2,311
—
109,241
Special Mention
—
—
—
—
—
101
—
—
101
Substandard
38
—
—
19
—
—
—
—
57
Real Estate - Commercial
Mortgage
$ 716,844 $ 1,572,099 $ 1,111,564 $ 717,571 $ 429,783 $ 723,344 $ 176,617 $
26,252 $ 5,474,074
Owner-Occupied
$ 264,589 $ 336,491 $ 321,491 $ 214,365 $ 164,931 $ 283,517 $
60,200 $
3,247 $ 1,648,831
Pass
260,831
325,575
318,391
212,368
159,552
275,088
56,453
2,977 1,611,235
Special Mention
562
1,147
890
107
3,385
2,953
25
—
9,069
Substandard
3,196
9,769
2,210
1,890
1,994
5,476
3,722
270
28,527
Non-Owner Occupied
$ 432,769 $ 1,195,500 $ 776,264 $ 499,290 $ 260,355 $ 434,541 $ 111,609 $
22,821 $ 3,733,149
Pass
428,740 1,194,864
761,476
494,971
223,264
398,188
111,609
13,774 3,626,886
Special Mention
1,339
454
14,422
4,111
14,001
12,677
—
—
47,004
Substandard
2,690
182
366
208
23,090
23,676
—
9,047
59,259
Land Development
$
19,486 $
40,108 $
13,809 $
3,916 $
4,497 $
5,286 $
4,808 $
184 $
92,094
Pass
18,996
36,479
13,567
3,775
4,479
5,046
4,776
184
87,302
Special Mention
432
3,334
36
—
—
—
—
—
3,802
Substandard
58
295
206
141
18
240
32
—
990
Installment loans to individuals
$
— $
— $
— $
— $
3 $
— $
— $
— $
3
Pass
—
—
—
—
3
—
—
—
3
Special Mention
—
—
—
—
—
—
—
—
—
Substandard
—
—
—
—
—
—
—
—
—
Total loans subject to risk rating
$ 1,529,045 $ 2,668,916 $ 1,695,615 $ 887,626 $ 506,670 $ 796,168 $ 1,092,033 $
47,526 $ 9,223,599
Pass
1,486,700 2,646,886 1,675,390
876,426
462,272
743,331 1,075,744
37,771 9,004,520
Special Mention
34,460
7,924
15,614
6,334
17,962
16,403
939
63
99,699
Substandard
7,885
14,106
4,611
4,866
26,436
36,434
15,350
9,692
119,380
Term Loans Amortized Cost Basis by Origination Year
2023
2022
2021
2020
2019
Prior
Revolving
Loans
Revolving
Loans
Converted
to Term
Total
Loans
The following tables present the performing status of the Company’s loan portfolio not subject to risk rating as of the dates
presented:
December 31, 2024
Commercial, Financial,
Agricultural
$
— $
— $
— $
— $
— $
20,173 $
— $
— $
20,173
Performing Loans
—
—
—
—
—
20,173
—
—
20,173
Non-Performing Loans
—
—
—
—
—
—
—
—
—
Lease Financing Receivables
$
— $
— $
— $
— $
— $
— $
— $
— $
—
Term Loans Amortized Cost Basis by Origination Year
2024
2023
2022
2021
2020
Prior
Revolving
Loans
Revolving
Loans
Converted
to Term
Total
Loans
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 – Loans (continued)
98
Performing Loans
—
—
—
—
—
—
—
—
—
Non-Performing Loans
—
—
—
—
—
—
—
—
—
Real Estate - Construction
$
37,714 $
23,301 $
11,210 $
2,056 $
— $
— $
108 $
266 $
74,655
Residential
$
37,714 $
23,301 $
11,210 $
2,056 $
— $
— $
108 $
266 $
74,655
Performing Loans
37,514
23,301
11,210
2,056
—
—
108
266
74,455
Non-Performing Loans
200
—
—
—
—
—
—
—
200
Commercial
$
— $
— $
— $
— $
— $
— $
— $
— $
—
Performing Loans
—
—
—
—
—
—
—
—
—
Non-Performing Loans
—
—
—
—
—
—
—
—
—
Real Estate - 1-4 Family
Mortgage
$ 154,305 $ 341,962 $ 708,223 $ 492,408 $ 280,382 $ 417,656 $ 499,157 $
13,692 $ 2,907,785
Primary
$ 152,511 $ 340,032 $ 706,868 $ 490,903 $ 279,683 $ 417,316 $
— $
893 $ 2,388,206
Performing Loans
152,207
336,019
692,470
485,325
269,503
397,394
—
893 2,333,811
Non-Performing Loans
304
4,013
14,398
5,578
10,180
19,922
—
—
54,395
Home Equity
$
30 $
— $
— $
— $
— $
195 $ 499,157 $
12,799 $ 512,181
Performing Loans
30
—
—
—
—
177
499,052
9,553
508,812
Non-Performing Loans
—
—
—
—
—
18
105
3,246
3,369
Rental/Investment
$
— $
— $
— $
256 $
— $
58 $
— $
— $
314
Performing Loans
—
—
—
256
—
58
—
—
314
Non-Performing Loans
—
—
—
—
—
—
—
—
—
Land Development
$
1,764 $
1,930 $
1,355 $
1,249 $
699 $
87 $
— $
— $
7,084
Performing Loans
1,764
1,919
1,355
1,240
699
87
—
—
7,064
Non-Performing Loans
—
11
—
9
—
—
—
—
20
Real Estate - Commercial
Mortgage
$
2,614 $
2,350 $
1,902 $
2,567 $
1,460 $
396 $
— $
— $
11,289
Owner-Occupied
$
— $
— $
— $
— $
121 $
1 $
— $
— $
122
Performing Loans
—
—
—
—
121
1
—
—
122
Non-Performing Loans
—
—
—
—
—
—
—
—
—
Non-Owner Occupied
$
— $
— $
— $
— $
21 $
— $
— $
— $
21
Performing Loans
—
—
—
—
21
—
—
—
21
Non-Performing Loans
—
—
—
—
—
—
—
—
—
Land Development
$
2,614 $
2,350 $
1,902 $
2,567 $
1,318 $
395 $
— $
— $
11,146
Performing Loans
2,614
2,350
1,789
2,567
1,317
395
—
—
11,032
Non-Performing Loans
—
—
113
—
1
—
—
—
114
Installment loans to individuals
$
32,598 $
11,488 $
7,971 $
3,815 $
1,317 $
17,261 $
15,530 $
29 $
90,009
Performing Loans
32,561
11,472
7,971
3,802
1,317
17,212
15,529
29
89,893
Non-Performing Loans
37
16
—
13
—
49
1
—
116
Total loans not subject to risk
rating
$ 227,231 $ 379,101 $ 729,306 $ 500,846 $ 283,159 $ 455,486 $ 514,795 $
13,987 $ 3,103,911
Performing Loans
226,690
375,061
714,795
495,246
272,978
435,497
514,689
10,741 3,045,697
Non-Performing Loans
541
4,040
14,511
5,600
10,181
19,989
106
3,246
58,214
Term Loans Amortized Cost Basis by Origination Year
2024
2023
2022
2021
2020
Prior
Revolving
Loans
Revolving
Loans
Converted
to Term
Total
Loans
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 – Loans (continued)
99
Term Loans Amortized Cost Basis by Origination Year
2023
2022
2021
2020
2019
Prior
Revolving
Loans
Revolving
Loans
Converted
to Term
Total
Loans
December 31, 2023
Commercial, Financial,
Agricultural
$
— $
— $
— $
— $
— $
15,804 $
— $
— $
15,804
Performing Loans
—
—
—
—
—
15,804
—
—
15,804
Non-Performing Loans
—
—
—
—
—
—
—
—
—
Lease Financing Receivables
$
— $
— $
— $
— $
— $
11 $
— $
— $
11
Performing Loans
—
—
—
—
—
11
—
—
11
Non-Performing Loans
—
—
—
—
—
—
—
—
—
Real Estate - Construction
$
48,003 $
41,070 $
14,158 $
— $
— $
— $
490 $
30 $ 103,751
Residential
$
48,003 $
41,070 $
14,158 $
— $
— $
— $
490 $
30 $ 103,751
Performing Loans
48,003
41,070
14,158
—
—
—
490
30
103,751
Non-Performing Loans
—
—
—
—
—
—
—
—
—
Commercial
$
— $
— $
— $
— $
— $
— $
— $
— $
—
Performing Loans
—
—
—
—
—
—
—
—
—
Non-Performing Loans
—
—
—
—
—
—
—
—
—
Real Estate - 1-4 Family
Mortgage
$ 339,406 $ 731,088 $ 536,544 $ 312,015 $ 133,852 $ 339,842 $ 493,515 $
5,807 $ 2,892,069
Primary
$ 334,103 $ 727,993 $ 534,667 $ 311,199 $ 133,433 $ 339,111 $
— $
46 $ 2,380,552
Performing Loans
333,751
720,759
528,383
302,065
128,859
322,677
—
46 2,336,540
Non-Performing Loans
352
7,234
6,284
9,134
4,574
16,434
—
—
44,012
Home Equity
$
— $
— $
111 $
— $
— $
470 $ 493,515 $
5,761 $ 499,857
Performing Loans
—
—
111
—
—
466
491,849
4,584
497,010
Non-Performing Loans
—
—
—
—
—
4
1,666
1,177
2,847
Rental/Investment
$
— $
— $
— $
— $
— $
65 $
— $
— $
65
Performing Loans
—
—
—
—
—
65
—
—
65
Non-Performing Loans
—
—
—
—
—
—
—
—
—
Land Development
$
5,303 $
3,095 $
1,766 $
816 $
419 $
196 $
— $
— $
11,595
Performing Loans
5,303
3,095
1,766
816
419
196
—
—
11,595
Non-Performing Loans
—
—
—
—
—
—
—
—
—
Real Estate - Commercial
Mortgage
$
3,640 $
2,674 $
3,054 $
1,890 $
902 $
316 $
— $
— $
12,476
Owner-Occupied
$
— $
— $
— $
126 $
— $
4 $
— $
— $
130
Performing Loans
—
—
—
126
—
4
—
—
130
Non-Performing Loans
—
—
—
—
—
—
—
—
—
Non-Owner Occupied
$
— $
— $
— $
25 $
— $
— $
— $
— $
25
Performing Loans
—
—
—
25
—
—
—
—
25
Non-Performing Loans
—
—
—
—
—
—
—
—
—
Land Development
$
3,640 $
2,674 $
3,054 $
1,739 $
902 $
312 $
— $
— $
12,321
Performing Loans
3,640
2,383
3,054
1,736
902
312
—
—
12,027
Non-Performing Loans
—
291
—
3
—
—
—
—
294
Installment loans to individuals
$
35,274 $
17,322 $
7,121 $
2,827 $
9,786 $
17,276 $
13,769 $
145 $ 103,520
Performing Loans
35,112
17,229
7,121
2,824
9,754
17,206
13,769
145
103,160
Non-Performing Loans
162
93
—
3
32
70
—
—
360
Total loans not subject to risk
rating
$ 426,323 $ 792,154 $ 560,877 $ 316,732 $ 144,540 $ 373,249 $ 507,774 $
5,982 $ 3,127,631
Performing Loans
425,809
784,536
554,593
307,592
139,934
356,741
506,108
4,805 3,080,118
Non-Performing Loans
514
7,618
6,284
9,140
4,606
16,508
1,666
1,177
47,513
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 – Loans (continued)
100
The following table discloses gross charge-offs by year of origination for the year ended December 31, 2024:
2024
2023
2022
2021
2020
Prior
Revolving
Loans
Revolving
Loans
Converted
to Term
Total
Charge-
offs
Commercial, financial, agricultural
$
—
$
46
$
152
$
879
$
4
$
2,975
$
407
$
—
$ 4,463
Lease financing
—
336
306
—
—
—
—
—
642
Real estate – construction:
Residential
—
—
145
—
—
—
—
—
145
Commercial
—
—
—
—
—
—
—
—
—
Total real estate – construction
$
—
$
—
$
145
$
—
$
—
$
—
$
—
$
—
$
145
Real estate – 1-4 family mortgage:
Primary
—
29
195
35
110
102
—
—
471
Home equity
—
—
329
—
—
121
—
—
450
Rental/investment
—
—
—
—
—
45
—
—
45
Total real estate – 1-4 family mortgage
$
—
$
29
$
524
$
35
$
110
$
268
$
—
$
—
$
966
Real estate – commercial mortgage:
Owner-occupied
—
—
37
—
—
—
—
—
37
Non-owner occupied
—
—
—
—
—
5,693
—
—
5,693
Total real estate – commercial mortgage $
—
$
—
$
37
$
—
$
—
$
5,700
$
—
$
—
$ 5,737
Installment loans to individuals
$
36
$
110
$
69
$
15
$
3
$
1,623
$
—
$
—
$ 1,856
Loans, net of unearned income
$
36
$
521
$
1,233
$
929
$
117
$ 10,566
$
407
$
—
$ 13,809
The following table discloses gross charge-offs by year of origination for the year ended December 31, 2023:
2023
2022
2021
2020
2019
Prior
Revolving
Loans
Revolving
Loans
Converted
to Term
Total
Charge-
offs
Commercial, financial, agricultural
$
898
$
1,909
$
235
$
131
$
635
$
4,165
$
865
$
—
$ 8,838
Lease financing
883
273
248
72
48
—
—
—
1,524
Real estate – construction:
Residential
—
57
—
—
—
—
—
—
57
Commercial
—
—
—
—
—
—
—
—
—
Total real estate – construction
$
—
$
57
$
—
$
—
$
—
$
—
$
—
$
—
$
57
Real estate – 1-4 family mortgage:
Primary
—
17
—
—
—
92
—
—
109
Home equity
—
—
—
—
25
90
—
—
115
Rental/investment
—
—
91
72
10
20
—
—
193
Total real estate – 1-4 family mortgage
$
—
$
17
$
91
$
72
$
35
$
202
$
—
$
—
$
417
Real estate – commercial mortgage:
Owner-occupied
—
—
—
—
—
582
—
—
582
Non-owner occupied
—
—
—
—
—
4,986
—
—
4,986
Total real estate – commercial mortgage $
—
$
—
$
—
$
—
$
—
$
5,568
$
—
$
—
$ 5,568
Installment loans to individuals
$
29
$
45
$
43
$
35
$
7
$
2,477
$
—
$
—
$ 2,636
Loans, net of unearned income
$
1,810
$
2,301
$
617
$
310
$
725
$ 12,412
$
865
$
—
$ 19,040
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 – Loans (continued)
101
Related Party Loans
Certain executive officers and directors of the Bank and their associates are customers of and have other transactions with the
Bank. Related party loans and commitments are made on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with persons not related to the Company or the Bank and do not
involve more than a normal risk of collectability or present other unfavorable features. A summary of the changes in related
party loans follows:
Loans at December 31, 2023
$
5,063
New loans and advances
94
Payments received
(907)
Loans at December 31, 2024
$
4,250
No related party loans were classified as past due or nonaccrual at December 31, 2024 or 2023. Unfunded commitments to
certain executive officers and directors and their associates totaled $1,168 and $5,461 at December 31, 2024 and 2023,
respectively.
Note 4 – Allowance for Credit Losses
(In Thousands)
Allowance for Credit Losses on Loans
The following table provides a roll-forward of the allowance for credit losses by loan category and a breakdown of the ending
balance of the allowance based on the Company’s credit loss methodology for the periods presented:
Commercial
Real Estate -
Construction
Real Estate -
1-4 Family
Mortgage
Real Estate -
Commercial
Mortgage
Lease
Financing
Installment
Loans to
Individuals
Total
Year Ended December 31,
2024
Allowance for credit losses
on loans:
Beginning balance
$
43,980
$
18,612
$
47,283
$
77,020
$
2,515 $
9,168
$
198,578
Impact of PCD loans
acquired during the period
—
—
—
—
—
—
—
Charge-offs
(4,463)
(145)
(966)
(5,737)
(642)
(1,856)
(13,809)
Recoveries
1,710
—
166
2,278
34
1,551
5,739
Net charge-offs
(2,753)
(145)
(800)
(3,459)
(608)
(305)
(8,070)
(Recoveries of) provision
for credit losses on loans
(2,700)
(3,341)
1,278
16,643
1,461
(2,093)
11,248
Ending balance
$
38,527
$
15,126
$
47,761
$
90,204
$
3,368 $
6,770
$
201,756
Period-End Amount
Allocated to:
Individually evaluated
$
3,823
$
—
$
—
$
9,622
$
1,337 $
270
$
15,052
Collectively evaluated
34,704
15,126
47,761
80,582
2,031
6,500
186,704
Ending balance
$
38,527
$
15,126
$
47,761
$
90,204
$
3,368 $
6,770
$
201,756
Loans:
Individually evaluated
$
9,712
$
241
$
6,576
$
45,182
$
4,082 $
270
$
66,063
Collectively evaluated
1,876,105
1,093,412
3,482,301
6,190,886
86,509
89,744
12,818,957
Ending balance
$ 1,885,817
$ 1,093,653
$ 3,488,877
$ 6,236,068
$
90,591 $
90,014
$ 12,885,020
Nonaccruing loans with no
allowance for credit losses
$
122
$
241
$
6,298
$
14,764
$
614 $
—
$
22,039
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 – Loans (continued)
102
Commercial
Real Estate -
Construction
Real Estate -
1-4 Family
Mortgage
Real Estate -
Commercial
Mortgage
Lease
Financing
Installment
Loans to
Individuals
Total
Year Ended December 31,
2023
Allowance for credit losses
on loans:
Beginning balance
$
44,255
$
19,114
$
44,727
$
71,798
$
2,463 $
9,733
$
192,090
Impact of PCD loans
acquired during the period
25
—
—
—
—
—
25
Charge-offs
(8,838)
(57)
(417)
(5,568)
(1,524)
(2,636)
(19,040)
Recoveries
3,090
48
389
712
18
2,453
6,710
Net charge-offs
(5,748)
(9)
(28)
(4,856)
(1,506)
(183)
(12,330)
Provision for (recoveries of)
credit losses on loans
5,448
(493)
2,584
10,078
1,558
(382)
18,793
Ending balance
$
43,980
$
18,612
$
47,283
$
77,020
$
2,515 $
9,168
$
198,578
Period-End Amount
Allocated to:
Individually evaluated
$
9,093
$
—
$
83
$
1,132
$
— $
270
$
10,578
Collectively evaluated
34,887
18,612
47,200
75,888
2,515
8,898
188,000
Ending balance
$
43,980
$
18,612
$
47,283
$
77,020
$
2,515 $
9,168
$
198,578
Loans:
Individually evaluated
$
18,026
$
—
$
11,600
$
15,705
$
— $
270
$
45,601
Collectively evaluated
1,853,795
1,333,397
3,428,319
5,470,845
116,020
103,253
12,305,629
Ending balance
$ 1,871,821
$ 1,333,397
$ 3,439,919
$ 5,486,550
$
116,020 $
103,523
$ 12,351,230
Nonaccruing loans with no
allowance for credit losses
$
1,689
$
—
$
10,876
$
11,027
$
— $
—
$
23,592
The Company’s allowance for credit loss model considers economic projections, primarily the national unemployment rate and
GDP, over a reasonable and supportable period of two years. While credit metrics remained relatively stable, loan growth
caused the Company’s allowance model to indicate that the size of the allowance for credit losses was appropriate during 2024.
Allowance for Credit Losses on Unfunded Loan Commitments
The following table provides a roll-forward of the allowance for credit losses on unfunded loan commitments included in
“Other liabilities” in the Consolidated Balance Sheets for the periods presented.
Year Ended
2024
2023
Allowance for credit losses on unfunded loan commitments:
Beginning balance
$
16,918 $
20,118
Recovery of credit losses on unfunded loan commitments
(1,975)
(3,200)
Ending balance
$
14,943 $
16,918
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 4 – Allowance for Credit Losses (continued)
103
Note 5 – Premises and Equipment
(In Thousands)
Bank premises and equipment at December 31 are summarized as follows:
2024
2023
Premises
$
262,536 $
258,481
Leasehold improvements
37,155
36,308
Furniture and equipment
70,197
68,546
Computer equipment
28,577
27,102
Autos
180
144
Lease right-of-use assets
46,811
48,517
Total
445,456
439,098
Accumulated depreciation
(165,660)
(155,903)
Net
$
279,796 $
283,195
Depreciation expense was $14,911, $14,881 and $14,857 for the years ended December 31, 2024, 2023 and 2022, respectively.
See Note 23, “Leases,” for further details regarding the Company’s right-of-use assets.
Note 6 – Other Real Estate Owned
(In Thousands)
The following table provides details of the Company’s other real estate owned (“OREO”), net of valuation allowances and
direct write-downs, as of the dates presented:
December 31,
2024
December 31,
2023
Residential real estate
$
2,966 $
1,211
Commercial real estate
5,681
8,407
Residential land development
19
4
Commercial land development
7
—
Total
$
8,673 $
9,622
Changes in the Company’s OREO were as follows for the periods presented:
Total
OREO
Balance at December 31, 2022
$
1,763
Transfers of loans
10,738
Impairments
(18)
Dispositions
(2,840)
Other
(21)
Balance at December 31, 2023
$
9,622
Transfers of loans
5,037
Impairments
(438)
Dispositions
(3,123)
Other
(2,425)
Balance at December 31, 2024
$
8,673
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
104
At December 31, 2024 and 2023, the amortized cost of loans secured by Real Estate - 1-4 Family Mortgage in the process of
foreclosure was $505 and $395, respectively.
Components of the line item “Other real estate owned” in the Consolidated Statements of Income were as follows, as of the
dates presented:
Year Ended December 31,
2024
2023
2022
Repairs and maintenance
$
372 $
103 $
54
Property taxes and insurance
280
427
93
Impairments
438
18
110
Net gains on OREO sales
(227)
(275)
(703)
Rental income
(5)
(6)
(7)
Total
$
858 $
267 $
(453)
Note 7 – Goodwill and Other Intangible Assets
(In Thousands)
Changes in the carrying amount of goodwill during the years ended December 31, 2024 were as follows:
Community
Banks
Insurance
Total
Balance at December 31, 2022
$
988,941 $
2,767 $
991,708
Measurement period adjustments to goodwill from the Continental
Republic Capital, LLC acquisition
(43)
—
(43)
Balance at December 31, 2023
$
988,898 $
2,767 $
991,665
Sale of the insurance agency
—
(2,767)
(2,767)
Balance at December 31, 2024
$
988,898 $
— $
988,898
The following table provides a summary of finite-lived intangible assets as of the dates presented:
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
December 31, 2024
Core deposit intangible
$
82,492 $
(71,881) $
10,611
Customer relationship intangible
7,670
(4,176)
3,494
Total finite-lived intangible assets
$
90,162 $
(76,057) $
14,105
December 31, 2023
Core deposit intangible
$
82,492 $
(68,383) $
14,109
Customer relationship intangible
7,670
(2,984)
4,686
Total finite-lived intangible assets
$
90,162 $
(71,367) $
18,795
Core deposit intangible amortization expense for the years ended December 31, 2024, 2023 and 2022 was $3,498, $4,044 and
$4,941, respectively. Customer relationship intangible amortization expense for the year ended December 31, 2024, 2023 and
2022 was $1,192, $1,337 and $181, respectively.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 6 – Other Real Estate Owned (continued)
105
The estimated amortization expense of finite-lived intangible assets for the five succeeding fiscal years is summarized as
follows:
Core Deposit
Intangible
Customer
Relationship
Intangible
Total
2025
$
3,102
$
1,048
$
4,150
2026
2,899
860
3,759
2027
2,775
628
3,403
2028
1,835
483
2,318
2029
—
330
330
Thereafter
—
144
144
Note 8 – Mortgage Servicing Rights
(In Thousands)
Changes in the Company’s mortgage servicing rights (“MSRs”) were as follows, for the periods presented:
Carrying value at January 1, 2023
$
84,448
Capitalization
17,079
Amortization
(9,839)
Carrying value at December 31, 2023
$
91,688
Sale of MSRs
(19,539)
Capitalization
10,195
Amortization
(9,353)
Carrying value at December 31, 2024
$
72,991
The gains recognized on the sale of MSRs are included in “Mortgage banking income” in the Consolidated Statements of
Income. During 2024, the Company sold a portion of its MSR portfolio for net proceeds of $23,011, resulting in a gain of
$3,472. The Company recognized a gain of $547 in 2023 related to a holdback of previously sold MSR assets.
Data and key economic assumptions related to the Company’s mortgage servicing rights as of December 31 are as follows:
2024
2023
2022
Unpaid principal balance
$ 6,008,937
$ 7,826,182
$ 7,494,413
Weighted-average prepayment speed (CPR)
9.48 %
8.77 %
7.00 %
Estimated impact of a 10% increase
$
(3,134)
$
(2,653)
$
(5,393)
Estimated impact of a 20% increase
(6,062)
(5,457)
(10,354)
Discount rate
11.05 %
10.85 %
10.30 %
Estimated impact of a 100bp increase
$
(3,809)
$
(4,753)
$
(1,765)
Estimated impact of a 200bp increase
(7,336)
(9,149)
(3,957)
Weighted-average coupon interest rate
4.29 %
3.88 %
3.51 %
Weighted-average servicing fee (basis points)
35.91
33.24
32.44
Weighted-average remaining maturity (in years)
7.30
7.50
8.33
The movement of mortgage interest rates has an inverse relationship with prepayment speeds and discount rates.
The Company recorded servicing fees of $15,177, $18,081 and $18,452, for the twelve months ended December 31, 2024, 2023
and 2022, respectively. These fees are included under the line item “Mortgage banking income” in the Consolidated Statements
of Income.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 7 – Goodwill and Other Intangible Assets (continued)
106
Note 9 – Deposits
(In Thousands)
The following is a summary of deposits as of December 31:
2024
2023
Noninterest-bearing deposits
$
3,403,981 $
3,583,675
Interest-bearing demand deposits
7,879,917
6,923,039
Savings deposits
809,430
874,842
Time deposits(1)
2,479,284
2,695,229
Total deposits
$ 14,572,612 $ 14,076,785
(1) Includes brokered deposits in the amount of $0 and $461,441 as of December 31,2024 and 2023, respectively.
The approximate scheduled maturities of time deposits, including brokered deposits, at December 31, 2024 are as follows:
2025
$
2,394,116
2026
51,609
2027
21,303
2028
6,561
2029
4,517
Thereafter
1,178
Total
$
2,479,284
The aggregate amount of time deposits in denominations of $250 or more at December 31, 2024 and 2023 was $827,329 and
$774,206, respectively. Certain executive officers and directors and their respective affiliates had amounts on deposit with
Renasant Bank of approximately $21,883 and $10,800 at December 31, 2024 and 2023, respectively.
Note 10 – Short-Term Borrowings
(In Thousands)
Short-term borrowings as of December 31 are summarized as follows:
2024
2023
Securities sold under agreements to repurchase
$
8,018 $
7,577
Federal Home Loan Bank short-term advances
100,000
300,000
Total short-term borrowings
$
108,018 $
307,577
Securities sold under agreements to repurchase (“repurchase agreements”) represent funds received from customers, generally
on an overnight or continuous basis, which are collateralized by investment securities owned or, at times, borrowed and re-
hypothecated by the Company. The securities used as collateral consist primarily of U.S. Government agency mortgage backed
securities, U.S. Government agency collateralized mortgage obligations, obligations of U.S. Government agencies, and
obligations of states and political subdivisions. All securities are maintained by the Company’s safekeeping agents. These
securities are reviewed by the Company on a daily basis, and the Company may be required to provide additional collateral due
to changes in the fair market value of these securities. The terms of the Company’s repurchase agreements are continuous but
may be canceled at any time by the Company or the customer.
Federal funds purchased, of which there were none outstanding at December 31, 2024 and 2023, are short term borrowings,
generally overnight borrowings, between financial institutions that are generally used to maintain reserve requirements at the
Federal Reserve Bank or elsewhere. Short-term borrowings from the FHLB (i.e. advances with original maturities of less than
one year) are used to meet anticipated short-term liquidity needs. The Company had availability on unused lines of credit with
the FHLB of $4,004,630 at December 31, 2024. The Company also had credit available at the Federal Reserve Discount
Window in the amount of $656,683.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
107
The average balances and cost of funds of short-term borrowings for the years ending December 31 are summarized as follows:
Average Balances
Cost of Funds
2024
2023
2022
2024
2023
2022
Federal Home Loan Bank short-term advances $ 110,601 $ 453,630 $ 175,370
1.34 %
4.11 %
2.52 %
Federal funds purchased
5
25
97
2.05
6.34
3.97
Securities sold under agreements to
repurchase
8,658
8,037
12,217
0.96
0.98
0.36
Total short-term borrowings
$ 119,264 $ 461,692 $ 187,684
1.32 %
4.05 %
2.38 %
The Company maintains lines of credit with correspondent banks totaling $150,000 at December 31, 2024. Interest is charged at
the market federal funds rate on all advances. There were no amounts outstanding under these lines of credit at December 31,
2024 or 2023.
Note 11 – Long-Term Debt
(In Thousands)
Long-term debt as of December 31, 2024 and 2023 is summarized as follows:
2024
2023
Federal Home Loan Bank advances
$
— $
—
Junior subordinated debentures
113,916
112,978
Subordinated notes
316,698
316,422
Total long-term debt
$
430,614 $
429,400
Federal Home Loan Bank Advances
Long-term FHLB borrowings are used to match fund fixed rate loans in order to minimize interest rate risk and also are used to
meet day-to-day liquidity needs, particularly when the cost of such borrowings compares favorably to the rates required to
attract deposits. The Company did not prepay any outstanding long-term advances from the FHLB during 2023 and 2022.
Junior Subordinated Debentures
The Company owns the outstanding common securities of business trusts that issued corporation-obligated mandatorily
redeemable preferred capital securities to third-party investors. The trusts used the proceeds from the issuance of their preferred
capital securities and common securities (collectively referred to as “capital securities”) to buy floating rate junior subordinated
debentures issued by the Company (or by companies that the Company subsequently acquired). The debentures are the trusts’
only assets and interest payments from the debentures finance the distributions paid on the capital securities. Distributions on
the capital securities are payable quarterly at a rate per annum equal to the interest rate being earned by the trusts on the
debentures held by the trusts. The capital securities are subject to mandatory redemption, in whole or in part, upon repayment of
the debentures. The Company has entered into an agreement which fully and unconditionally guarantees the capital securities of
each trust subject to the terms of the guarantee.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 10 – Short-Term Borrowings (continued)
108
The interest rate on the debentures reprices quarterly equal to the three-month CME Term SOFR at the determination date plus
the applicable spread. The debentures owned by the respective trusts are currently redeemable at par. The following table
provides the details of the debentures as of December 31, 2024:
Principal
Amount
Carrying Value
Spread (in bps)
Year of
Maturity
Amount
Included in
Tier 1 Capital
PHC Statutory Trust I
$
20,619 $
20,619
285
2033
$
20,000
PHC Statutory Trust II
31,959
31,959
187
2035
31,000
Capital Bancorp Capital Trust I
12,372
12,372
150
2035
12,000
First M&F Statutory Trust I
30,928
25,490
133
2036
24,563
Brand Trust I
10,310
9,777
205
2035
9,466
Brand Trust II
5,155
5,195
300
2037
5,040
Brand Trust III
5,155
5,196
300
2038
5,041
Brand Trust IV
3,093
3,308
375
2038
3,215
Total
$
113,916
$
110,325
The Company has entered into an interest rate swap agreement on the First M&F Statutory Trust I pursuant to which the
Company received an amount approximately equal to the interest paid on the debentures and paid a fixed rate of interest equal
to 4.18% at December 31, 2024.
Federal Reserve guidelines limit the amount of securities that, similar to the Company’s junior subordinated debentures, are
includable in Tier 1 capital, but these guidelines did not impact the amount of debentures the Company includes in Tier 1
capital. Although the Company’s existing junior subordinated debentures are currently unaffected by these Federal Reserve
guidelines, on account of changes enacted as part of the Dodd-Frank Act, any new trust preferred securities are not includable
in Tier 1 capital.
For more information about the Company’s derivative financial instruments, see Note 13, “Derivative Instruments.”
Subordinated notes
The Company has issued and sold fixed-to-floating rate subordinated notes (referred to collectively as the “Notes”) in
underwritten public offerings at a price equal to 100% of the aggregate principal amounts of the Notes. Interest on the Notes is
payable semi-annually in arrears at the applicable fixed rate until but excluding the fixed to floating transition date and payable
quarterly in arrears thereafter at the applicable benchmark rate plus spread, until but excluding the maturity date or earlier
redemption date. A summary of the Notes is as follows:
Issue Date
Initial
principal
Fixed
rate
Fixed to floating
transition date
Benchmark rate
Spread
(in bps)
Debt
outstanding
Maturity
August 22, 2016
$ 40,000
5.50%
September 1, 2026
3-month CME
Term SOFR
407.1
$
40,000
September 1, 2031
September 3, 2020
$ 100,000
4.50%
September 15, 2030
3-month CME
Term SOFR
402.5
$
100,000
September 15, 2035
November 23, 2021
$ 200,000
3.00%
December 1, 2026
3-month CME
Term SOFR
191
$
196,400
December 1, 2031
Debt issuance costs and fair value adjustment
(19,702)
Total subordinated debt
$
316,698
Beginning with the fixed to floating transition date and on any interest payment date thereafter, the Company may redeem the
applicable Notes in whole or in part at a redemption price equal to 100% of the principal amount of the respective Notes to be
redeemed plus accrued and unpaid interest to but excluding the date of redemption.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 11 – Long-Term Debt (continued)
109
The Company may also redeem any series of the Notes at any time, at the Company’s option, in whole or in part, if: (i) a
change or prospective change in law occurs that could prevent the Company from deducting interest payable on the Notes for
U.S. federal income tax purposes; (ii) a subsequent event occurs that could preclude the Notes from being recognized as Tier 2
capital for regulatory capital purposes; or (iii) the Company is required to register as an investment company under the
Investment Company Act of 1940, as amended. In each case, the redemption price is 100% of the principal amount of the Notes
being redeemed plus any accrued and unpaid interest to but excluding the redemption date. There is no sinking fund for the
benefit of the Notes, and none of the Notes are convertible or exchangeable.
During 2023, the Company purchased and subsequently extinguished $3,300 of its aggregate $200,000 fixed-to-floating
subordinated notes and realized a gain of $620. During October and December 2021, respectively, the Company redeemed at
par its $15,000 6.50% fixed-to-floating rate subordinated notes and redeemed $30,000 of its aggregate $60,000 5.00% fixed-to-
floating rate subordinated notes, with the remaining $30,000 of such notes redeemed in the first quarter of 2022.
The aggregate stated maturities of long-term debt outstanding at December 31, 2024, are summarized as follows:
Federal
Home Loan
Bank
advances
Junior
subordinated
debentures
Subordinated
notes
Total
2025
$
— $
— $
— $
—
2026
—
—
—
—
2027
—
—
—
—
2028
—
—
—
—
2029
—
—
—
—
Thereafter
—
113,916
316,698
430,614
Total
$
— $
113,916 $
316,698 $
430,614
Note 12 – Employee Benefit and Deferred Compensation Plans
(In Thousands, Except Share Data)
Pension and Post-retirement Medical Plans
The Company sponsors a noncontributory defined benefit pension plan, under which participation and benefit accruals ceased
as of December 31, 1996. The Company’s funding policy is to contribute annually to the plan an amount not less than the
minimum required contribution, as determined annually by consulting actuaries in accordance with funding standards imposed
under the Internal Revenue Code of 1986, as amended. No contributions were made or required in 2024 or 2023. The Company
does not anticipate that a contribution will be required in 2025. The plan’s accumulated benefit obligation and projected benefit
obligation are substantially the same since benefit accruals have ceased. The accumulated benefit obligation was $18,685 and
$20,195 at December 31, 2024 and 2023, respectively. There is no additional minimum pension liability required to be
recognized.
The Company provides retiree medical benefits, consisting of the opportunity to purchase coverage at subsidized rates under the
Company’s group medical plan. Employees eligible to participate must (i) have been employed by the Company and enrolled in
the Company’s group medical plan as of December 31, 2004 and (ii) retire from the Company between ages 55 and 65 with at
least 15 years of service or 70 points (points determined as the sum of the employee’s age and years of service). The Company
periodically determines the portion of the premiums to be paid by each retiree and the portion to be paid by the Company.
Coverage ceases when a retiree attains age 65 and is eligible for Medicare. The Company did not contribute to the plan in 2024
and contributed $41 to the plan in 2023; the Company expects to contribute approximately $86 in 2025.
The Company accounts for its obligations related to retiree benefits in accordance with ASC 715, “Compensation – Retirement
Benefits.” The assumed rate of increase in the per capita cost of covered benefits (i.e., the health care cost trend rate) for 2024 is
7.5%. Increasing or decreasing the assumed health care cost trend rates by one percentage point in each year would not
materially increase or decrease the accumulated post-retirement benefit obligation or the service and interest cost components
of net periodic post-retirement benefit costs as of December 31, 2024 and for the year then ended.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 11 – Long-Term Debt (continued)
110
The following table presents information relating to the defined benefit pension plan maintained by Renasant Bank (“Pension
Benefits - Renasant”) and the post-retirement health plan (“Other Benefits”) as of December 31, 2024 and 2023:
Pension Benefits
Renasant
Other Benefits
2024
2023
2024
2023
Change in benefit obligation
Benefit obligation at beginning of year
$ 20,195
$ 21,230
$
512
$
551
Service cost
—
—
—
1
Interest cost
908
995
21
22
Plan participants’ contributions
—
—
21
49
Actuarial (gain) loss
(620)
74
(89)
(21)
Benefits paid
(1,798)
(2,104)
(17)
(90)
Benefit obligation at end of year
$ 18,685
$ 20,195
$
448
$
512
Change in fair value of plan assets
Fair value of plan assets at beginning of year
$ 20,119
$ 20,854
Actual return on plan assets
827
1,369
Contribution by employer
—
—
Benefits paid
(1,798)
(2,104)
Fair value of plan assets at end of year
$ 19,148
$ 20,119
Funded status at end of year
$
463
$
(76)
$
(448)
$
(512)
Weighted-average assumptions as of December 31
Discount rate used to determine the benefit obligation
5.37 %
4.74 %
4.99 %
4.53 %
The discount rate assumptions at December 31, 2024 were determined using a yield curve approach. A yield curve was
developed from a selection of high quality fixed-income investments whose cash flows approximate the timing and amount of
expected cash flows from the plans. The selected discount rate is the rate that produces the same present value of the plans’
projected benefit payments.
The components of net periodic benefit cost and other amounts recognized in other comprehensive income for the defined
benefit pension and post-retirement health plans for the years ended December 31, 2024, 2023 and 2022 are as follows:
Pension Benefits Renasant
Other Benefits
2024
2023
2022
2024
2023
2022
Service cost
$
—
$
—
$
—
$
—
$
1
$
4
Interest cost
908
995
738
21
22
12
Expected return on plan assets
(993)
(1,236)
(1,684)
—
—
—
Recognized actuarial loss (gain)
517
523
243
(93)
(61)
(76)
Net periodic benefit cost
432
282
(703)
(72)
(38)
(60)
Net actuarial (gain) loss arising during the period
(455)
(60)
4,155
(89)
(20)
(48)
Amortization of net actuarial (loss) gain recognized in net
periodic pension cost
(516)
(523)
(243)
94
61
76
Total recognized in other comprehensive income
(971)
(583)
3,912
5
41
28
Total recognized in net periodic benefit cost and other
comprehensive income
$ (539)
$ (301)
$ 3,209
$ (67)
$
3
$ (32)
Weighted-average assumptions as of December 31
Discount rate used to determine net periodic pension cost
4.74 %
4.94 %
2.79 %
4.53 %
4.74 %
2.35 %
Expected return on plan assets
5.20 %
6.25 %
5.75 %
N/A
N/A
N/A
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 12 – Employee Benefit and Deferred Compensation Plans (continued)
111
Future estimated benefit payments under the Renasant defined benefit pension plan and other benefits are as follows:
Pension Benefits
Renasant
Other
Benefits
2025
$
2,101 $
86
2026
1,967
76
2027
1,896
76
2028
1,890
54
2029
1,836
70
2030 - 2034
7,763
149
Amounts recognized in accumulated other comprehensive income, before tax, for the year ended December 31, 2024 are as
follows:
Pension Benefits
Renasant
Other
Benefits
Prior service cost
$
— $
—
Actuarial loss (gain)
9,752
(225)
Total
$
9,752 $
(225)
The estimated costs that will be amortized from accumulated other comprehensive income into net periodic benefit cost during
2025 are as follows:
Pension Benefits
Renasant
Other
Benefits
Prior service cost
$
— $
—
Actuarial loss (gain)
485
(88)
Total
$
485 $
(88)
Approximately 87% of the pension plan’s assets are invested in a collective trust, which in turn invests in other collective or
pooled trusts with individual investment mandates. The collective trust’s asset allocation is approximately 63% in growth
assets, consisting of interests in trusts invested in equity securities, high yield fixed income securities, and direct real estate
investments (approximately 6% of assets), and approximately 37% in assets intended to hedge against the volatility arising from
interest rate risk, consisting of interests in trusts invested in long duration fixed income securities. The collective trust is
actively managed, allowing changes in the asset allocation to enhance returns and mitigate risk, with the mandate to preserve
the funded status of the plan through portfolio growth and interest rate hedging. Management’s investment committee
periodically reviews the collective trust’s performance and asset allocation to ensure that the plan’s investment objectives are
satisfied and that the investment strategy of the trust has not materially changed.
The remaining 13% of the pension plan’s assets are managed by Park Place Capital, a wholly owned subsidiary of Renasant
Bank. These assets are invested in large cap securities on which covered call options are written to generate income.
The expected long-term rate of return was estimated using market benchmarks for investment classes applied to the plan’s
target asset allocation and was computed using a valuation methodology which projects future returns based on current
valuations rather than historical returns.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 12 – Employee Benefit and Deferred Compensation Plans (continued)
112
The fair values of the Company’s defined benefit pension plan assets by category at December 31, 2024 and 2023 are below.
Investments in collective trusts consist of trusts that invest primarily in liquid equity and fixed income securities and have a
small direct investment in real estate. There is generally no restriction on redemptions or withdrawals for benefit payments or in
the event of plan termination; 60 days notice is required to redeem or withdraw assets for any other purpose.
Quoted Prices In
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Measured at net
asset value per
share (“NAV”)
Totals
December 31, 2024
Cash and cash equivalents
$
281 $
— $
— $
— $
281
Investments in collective trusts
—
—
—
16,590
16,590
U.S. government securities
—
156
—
—
156
Corporate stocks
2,121
—
—
—
2,121
$
2,402 $
156 $
— $
16,590 $
19,148
Quoted Prices In
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Measured at
NAV
Totals
December 31, 2023
Cash and cash equivalents
$
1,042 $
— $
— $
— $
1,042
Investments in collective trusts
—
—
—
17,830
17,830
U.S. government securities
—
47
—
—
47
Corporate stocks
1,200
—
—
—
1,200
$
2,242 $
47 $
— $
17,830 $
20,119
Other Retirement Plans
The Company maintains a 401(k) plan, which is a contributory plan maintained in the form of a “safe harbor” arrangement.
Employees are immediately enrolled in the plan and eligible to make pre-tax deferrals, subject to limits imposed under the plan
and the deferral limit established annually by the IRS, and receive Company matching contributions not in excess of 4% of
compensation. The Company may make a discretionary profit-sharing contribution for each eligible participant as an equal
percentage of each participant’s compensation. To be eligible to receive this profit-sharing contribution, an employee must: (i)
be employed on the last day of the year and be credited with 1000 hours of service during the year; (ii) die or become disabled
during the year; or (iii) have attained the early or normal retirement age (as defined in the plan). Senior executive officers of the
Bank are not eligible to receive these discretionary contributions. No profit-sharing contribution was made for the year 2024.
The Company’s costs related to the 401(k) plan, excluding employee deferrals, in 2024, 2023 and 2022 were $7,290, $6,757
and $7,045, respectively.
Deferred Compensation Plans and Arrangements
The Company maintains two deferred compensation plans: a Deferred Stock Unit Plan and a Deferred Income Plan.
Nonemployee directors may defer all or a portion of their retainer; eligible officers may defer base salary and bonus subject to
limits determined annually by the Company. Amounts deferred to the Deferred Stock Unit Plan are invested in units
representing shares of the Company’s common stock; benefits are paid in the form of common stock, with cash distributed in
lieu of fractional shares. Amounts deferred to the Deferred Income Plan are notionally invested in the discretion of each
participant from among investment alternatives substantially similar to those available under the Company’s 401(k) plan.
Directors and officers who participated in the predecessor to the Deferred Income Plan as of December 31, 2006, may also
invest in a preferential interest rate alternative that is derived from the Moody’s Average Corporate Bond Rate. Benefits
payable from the Deferred Income Plan equal the account balance of each participant. A director or officer’s beneficiaries may
receive an additional preretirement death benefit from the Deferred Income Plan when the officer or director has continuously
deferred at rates prescribed by the Company since January 1, 2005, and when such officer or director dies while employed by
the Company or serving as a director.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 12 – Employee Benefit and Deferred Compensation Plans (continued)
113
The Company’s Deferred Stock Unit and Deferred Income Plan are unfunded. It is anticipated that such plans will result in no
additional cost to the Company because life insurance policies on the lives of participants have been purchased in amounts
estimated to be sufficient to pay plan benefits. The Company is both the owner and beneficiary of the policies. The expense
recorded in 2024, 2023 and 2022 for the Company’s Deferred Stock Unit and Deferred Income Plan, including deferrals, was
$3,269, $3,265 and $1,486, respectively.
In connection with the Company’s acquisition of Brand Group Holdings, Inc., the Company assumed the Brand Group
Holdings, Inc. Deferred Compensation Plan. Deferral elections in effect as of the time of acquisition were given effect for
compensation earned during 2018; no further deferrals have been or will be made to the plan. Account balances maintained
under the plan will be distributed as provided under the terms of the plan and individual participant elections. Pending
distribution, balances will be notionally invested by each participant in designated investment alternatives.
In 2007, the Company assumed supplemental executive retirement plans (SERPs) in connection with the acquisition of Capital
Bancorp, Inc. and its affiliates. The plans are designed to provide four officers specified annual benefits for a 15-year period
upon the attainment of a designated retirement age. Liabilities associated with the SERPs totaled $3,143 and $3,345 at
December 31, 2024 and 2023, respectively. The plans are not qualified under Section 401 of the Internal Revenue Code of
1986, as amended.
Incentive Compensation Plans
Under the Company’s Performance Based Rewards Plan, annual cash bonuses are paid to eligible officers and employees,
subject to the attainment of designated performance criteria that may relate to the Company’s performance, the performance of
an affiliate, region, division or profit center, and/or to individual or team performance. The Company annually sets minimum,
target, and superior levels of performance. Minimum performance must be attained for the payment of any bonus; superior
performance must be attained for maximum payouts. The expense associated with the plan for 2024, 2023 and 2022 was
$8,659, $10,303 and $9,545, respectively.
In 2020, the Company implemented the 2020 Long-Term Incentive Compensation Plan that provides for the grant of stock
options and stock appreciation rights and the award of restricted stock and restricted stock units.
Options granted under the plan permit the acquisition of shares of the Company’s common stock at an exercise price equal to
the fair market value of the shares on the date of grant. Options may be subject to time-based vesting or the attainment of
performance criteria; all options expire ten years after the date of grant. Options that do not vest or expire unexercised are
forfeited and canceled. Stock appreciation rights may be granted under the plan on terms similar to options. There were no
stock options or stock appreciation rights granted, or associated compensation expense (recognized or unrecognized), during the
years ended December 31, 2024, 2023 or 2022.
No options have been outstanding since December 31, 2021.
The plan permits the award of performance-based restricted stock to officers and employees and time-based restricted stock to
non-employee directors, officers and employees. The plan also permits the award of restricted stock units to officers and
employees on terms similar to restricted stock awards. Performance-based awards are subject to the attainment of designated
performance criteria during a fixed performance cycle. Performance criteria may relate to the Company’s performance
measured on an absolute basis or relative to a defined peer group. Performance criteria may also relate to the performance of an
affiliate, region, division or profit center of the Company or to individual performance. The Company annually sets minimum,
target, and superior levels; minimum performance must be attained for the vesting of any shares; superior performance must be
attained for maximum payouts. Time-based restricted stock awards relate to a fixed number of shares that vest at the end of a
designated service period.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 12 – Employee Benefit and Deferred Compensation Plans (continued)
114
In 2024, the Company made performance-based and time-based restricted stock awards; restricted stock units were not
awarded. The fair value of each restricted stock award is the closing price of the Company’s common stock on the business day
immediately preceding the date of the award. For restricted stock awarded under the plan, the Company recorded compensation
expense of $13,562, $13,458 and $11,244 for the years ended December 31, 2024, 2023 and 2022, respectively. The following
table summarizes the changes in restricted stock as of and for the year ended December 31, 2024:
Performance-
Based
Restricted
Stock
Weighted
Average
Grant-Date
Fair Value
Time-
Based
Restricted
Stock
Weighted
Average
Grant-Date
Fair Value
Not vested at beginning of year
169,575 $
36.38
779,564 $
36.20
Awarded
95,048
33.44
351,418
32.87
Vested
(61,508)
38.62
(298,600)
35.52
Forfeited and cancelled
—
—
(31,201)
33.99
Not vested at end of year
203,115 $
34.32
801,181 $
35.08
Unrecognized stock-based compensation expense related to restricted stock totaled $13,322 at December 31, 2024. As of such
date, the weighted average period over which the unrecognized expense is expected to be recognized was approximately 1.68
years.
At December 31, 2024, an aggregate of 2,418,071 shares of Company common stock were available for issuance under the
Company’s employee benefit plans of which 955,493 shares were available for issuance under the Company’s 401(k) plan,
124,250 shares were available under the Company’s Deferred Stock Unit Plan, and 1,338,328 shares were available under the
Company’s 2020 Long-Term Incentive Compensation Plan.
Note 13 – Derivative Instruments
(In Thousands)
The Company uses certain derivative instruments to meet the needs of customers as well as to manage the interest rate risk
associated with certain transactions.
Non-hedge derivatives
The Company enters into derivative instruments that are not designated as hedging instruments to help its commercial
customers manage their exposure to interest rate fluctuations. To mitigate the interest rate risk associated with these customer
contracts, the Company enters into an offsetting derivative contract position. The Company manages its credit risk, or potential
risk of default by its commercial customers, through credit limit approval and monitoring procedures.
The Company enters into interest rate lock commitments with its customers to mitigate the interest rate risk associated with the
commitments to fund fixed-rate residential mortgage loans. The Company also enters into forward commitments to sell
residential mortgage loans to secondary market investors.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 12 – Employee Benefit and Deferred Compensation Plans (continued)
115
The following table provides a summary of the Company’s derivatives not designated as hedging instruments as of the dates
presented:
Balance Sheet
December 31, 2024
December 31, 2023
Location
Notional Amount
Fair Value
Notional Amount
Fair Value
Derivative assets:
Interest rate contracts
Other Assets
$
877,051 $
14,071 $
532,279 $
13,567
Interest rate lock commitments
Other Assets
64,365
861
61,957
1,483
Forward commitments
Other Assets
174,000
1,242
20,000
43
Totals
$
1,115,416 $
16,174 $
614,236 $
15,093
Derivative liabilities:
Interest rate contracts
Other Liabilities
$
880,371 $
14,094 $
535,725 $
13,567
Interest rate lock commitments
Other Liabilities
1,829
122
2,292
—
Forward commitments
Other Liabilities
52,000
86
165,000
2,605
Totals
$
934,200 $
14,302 $
703,017 $
16,172
Gains (losses) included in the Consolidated Statements of Income related to the Company’s derivative financial instruments
were as follows, as of the dates presented:
Year Ended December 31,
2024
2023
2022
Interest rate contracts:
Included in interest income on loans
$
14,128 $
8,156 $
2,470
Interest rate lock commitments:
Included in mortgage banking income
(713)
319
(4,128)
Forward commitments
Included in mortgage banking income
3,718
(1,848)
(645)
Total
$
17,133 $
6,627 $
(2,303)
Derivatives designated as cash flow hedges
Cash flow hedge relationships mitigate exposure to the variability of future cash flow or other forecasted transactions. The
Company uses interest rate swap contracts in an effort to manage future interest rate exposure on borrowings. The swap
hedging strategy converts the SOFR-based variable interest rate on the forecasted borrowings to a fixed interest rate. The collar
hedging strategy stabilizes interest rate fluctuation by setting both a floor and a cap.
The following table provides a summary of the Company’s derivatives designated as cash flow hedges as of the dates
presented:
Balance Sheet
December 31, 2024
December 31, 2023
Location
Notional Amount
Fair Value
Notional Amount
Fair Value
Derivative assets:
Interest rate swaps
Other Assets
$
130,000 $
22,780 $
130,000 $
21,486
Interest rate collars
Other Assets
—
—
200,000
572
Totals
$
130,000 $
22,780 $
330,000 $
22,058
Derivative liabilities:
Interest rate swaps
Other Liabilities
$
— $
— $
— $
—
Interest rate collars
Other Liabilities
450,000
598
250,000
384
Totals
$
450,000 $
598 $
250,000 $
384
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 13 – Derivative Instruments (continued)
116
The impact on other comprehensive income for the years ended December 31, 2024, 2023, and 2022, is described in Note 16,
“Other Comprehensive Income (Loss).”
In October 2021, the Company terminated four interest rate swap contracts with notional amounts of $25,000 each. These
swaps hedged forecasted future FHLB borrowings which were no longer expected to occur. As a result of the termination the
Company recognized a gain of $4,676 for the year ended December 31, 2022. There have been no such terminations since
October 2021.
Derivatives designated as fair value hedges
Fair value hedges protect against changes in the fair value of an asset, liability or firm commitment. The Company enters into
interest rate swap agreements to manage interest rate exposure on certain of the Company’s fixed-to-floating rate subordinated
notes. The agreements convert the currently-fixed interest rates to SOFR-based variable interest rates.
The following table provides a summary of the Company’s derivatives designated as fair value hedges as of the dates presented:
Balance Sheet
December 31, 2024
December 31, 2023
Location
Notional Amount
Fair Value
Notional Amount
Fair Value
Derivative liabilities:
Interest rate swaps
Other Liabilities
$
100,000 $
17,368 $
100,000 $
17,052
The following table presents the effects of the Company’s fair value hedge relationships on the Consolidated Statements of
Income for the periods presented:
Amount of Gain (Loss) Recognized in Income
Income Statement
Year ended December 31,
Location
2024
2023
2022
Derivative liabilities:
Interest rate swaps - subordinated notes
Interest Expense
$
(317) $
2,737 $
(14,378)
Derivative liabilities - hedged items:
Interest rate swaps - subordinated notes
Interest Expense
$
317 $
(2,737) $
14,378
The following table presents the amounts that were recorded in the Consolidated Balance Sheets related to cumulative basis
adjustments for fair value hedges as of the dates presented:
Carrying Amount of the Hedged Liability
Cumulative Amount of Fair Value Hedging
Adjustments Included in the Carrying
Amount of the Hedged Liability
Balance Sheet Location
December 31, 2024
December 31, 2023
December 31, 2024
December 31, 2023
Long-term debt
$
81,648 $
81,791 $
17,369 $
17,052
Offsetting
Certain financial instruments, including derivatives, may be eligible for offset in the consolidated balance sheet when the “right
of setoff” exists or when the instruments are subject to an enforceable master netting agreement, which includes the right of the
non-defaulting party or non-affected party to offset recognized amounts, including collateral posted with the counterparty, to
determine a net receivable or net payable upon early termination of the agreement. Certain of the Company’s derivative
instruments are subject to master netting agreements; however, the Company has not elected to offset such financial instruments
in the Consolidated Balance Sheets. The following table presents the Company’s gross derivative positions as recognized in the
Consolidated Balance Sheets as well as the net derivative positions, including collateral pledged to the extent the application of
such collateral did not reduce the net derivative liability position below zero, had the Company elected to offset those
instruments subject to an enforceable master netting agreement as of the dates presented:
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 13 – Derivative Instruments (continued)
117
Offsetting Derivative Assets
Offsetting Derivative Liabilities
December 31,
2024
December 31,
2023
December 31,
2024
December 31,
2023
Gross amounts recognized
$
34,505 $
29,284 $
28,550 $
26,425
Gross amounts offset in the consolidated balance sheets
—
—
—
—
Net amounts presented in the consolidated balance sheets
34,505
29,284
28,550
26,425
Gross amounts not offset in the consolidated balance sheets
Financial instruments
27,939
23,863
27,939
23,863
Financial collateral pledged
—
—
611
1,074
Net amounts
$
6,566 $
5,421 $
— $
1,488
Note 14 – Income Taxes
(In Thousands)
Significant components of the provision for income taxes are as follows for the periods presented:
Year Ended December 31,
2024
2023
2022
Current
Federal
$
42,179 $
36,138 $
39,507
State
2,680
1,376
3,453
44,859
37,514
42,960
Deferred
Federal
7,028
(1,187)
1,630
State
(2,379)
(3,818)
650
4,649
(5,005)
2,280
$
49,508 $
32,509 $
45,240
Total income tax expense does not reflect the tax effects of items that are included in other comprehensive income each period.
The tax effects included each period resulted in net expense in other comprehensive income of $4,012 and $19,716 in 2024 and
2023, respectively, and a net benefit in other comprehensive income of $67,453 in 2022.
The reconciliation of income taxes computed at the United States federal statutory tax rates to the provision for income taxes is
as follows, for the periods presented:
Year Ended December 31,
2024
2023
2022
Tax at U.S. statutory rate
$
51,443 $
37,209 $
44,375
Increase (decrease) in taxes resulting from:
Tax-exempt interest income
(1,750)
(1,505)
(1,832)
BOLI income
(1,178)
(2,197)
(1,946)
Investment tax credits
(3,950)
(1,901)
(928)
Amortization of investment in low-income housing tax credits
2,851
1,741
683
State income tax expense, net of federal benefit
(262)
(1,929)
3,241
Nondeductible transaction costs
1,060
—
—
Other items, net
1,294
1,091
1,647
$
49,508 $
32,509 $
45,240
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 13 – Derivative Instruments (continued)
118
Significant components of the Company’s deferred tax assets and liabilities are as follows for the periods presented:
December 31,
2024
2023
Deferred tax assets
Allowance for credit losses
$
53,349 $
53,432
Loans
—
1,631
Deferred compensation
15,695
15,310
Net unrealized losses on securities
47,199
51,211
Impairment of assets
874
138
Tax credits
8,781
4,035
Net operating loss carryforwards
2
33
Investments in partnerships
77
1,491
Lease liabilities under operating leases
12,423
13,066
Realized losses on securities
—
4,892
Other
3,073
2,660
Total deferred tax assets
141,473
147,899
Deferred tax liabilities
Fixed assets
9,927
11,023
Mortgage servicing rights
15,841
21,282
Junior subordinated debt
1,452
1,708
Intangibles
3,652
2,447
Lease right-of-use asset
11,775
12,399
Loans
7,638
—
Other
4,153
3,344
Total deferred tax liabilities
54,438
52,203
Net deferred tax assets
$
87,035 $
95,696
The effective tax rate was 20.21% and 18.35% for the year ended December 31, 2024 and 2023, respectively. The Company
and its subsidiaries file a consolidated U.S. federal income tax return. The Company is currently open to audit under the statute
of limitations by the Internal Revenue Service for the years ending December 31, 2021 through 2023. The Company and its
subsidiaries’ state income tax returns are open to audit under the statute of limitations for the years ended December 31, 2020
through 2023.
The Company previously had Federal net operating losses which were fully utilized in the year ending December 31, 2024. No
valuation allowance existed against these net operating losses, as we determined it was more likely than not they would be fully
utilized.
The Company has unused state tax credits in various jurisdictions for the year ended December 31, 2024 and 2023 of $11,115
and $5,107, respectively, which can be carried forward for periods ranging from five to 25 years. The Company determined,
based on all available evidence, that it is more likely than not that the Company will realize the full amount of these credits, and
no valuation allowance has been recorded.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 14 – Income Taxes (continued)
119
The table below presents the breakout of net operating losses as of December 31, 2023. There were no net operating losses as of
December 31, 2024.
December 31,
2023
Net Operating Losses
Federal
$
138
State
—
A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest, related to federal and
state income tax matters as of December 31 follows below:
2024
2023
2022
Balance at January 1
$
399 $
407 $
408
Additions based on positions related to current period
190
78
65
Reductions due to lapse of statute of limitations
(88)
(86)
(66)
Balance at December 31
$
501 $
399 $
407
If ultimately recognized, the Company does not anticipate any material increase in the effective tax rate for 2024 relative to any
tax positions taken prior to January 1, 2024. The Company has accrued $41, $26 and $17 for interest and penalties related to
unrecognized tax benefits as of December 31, 2024, 2023 and 2022, respectively. The Company recognized accrued interest
and penalties on unrecognized tax benefits as a component of income tax expense.
The Company holds investments in limited partnerships and similar entities (“LP”) that are not consolidated in the financial
statements. These LP construct, own, and operate affordable housing and similar projects. Typically, an unrelated third party is
the general partner or managing member and is primarily responsible for overseeing and controlling these projects. As an
investor in these LP, certain tax credits (“ITC”), primarily Low-Income Housing Tax Credits under Section 42 of the Internal
Revenue Code, are allocated to the Company. These ITC are recognized as income tax benefits in the Company’s Consolidated
Statements of Income over the period in which they are earned, which is typically ten years beginning when the related projects
are placed in service as determined by the Internal Revenue Code and related regulations. These investments are recorded to
Other assets on the Consolidated Balance Sheets, and are amortized ratably based on the realization of ITC using the practical
expedient method described in ASU 2014-01. The balance of these investments recorded to Other assets was $13,366 and
$11,951 at December 31 2024 and December 31 2023, respectively. In the years ended December 31, 2024 and December 31,
2023, the Company recognized $2,977 and $1,844 of benefits from ITC, and recorded $2,851 and $1,741 of amortization on the
LP investments, all of which were recorded to the Income taxes line of the Consolidated Statements of Income. The non-
income-tax-related income or expenses related to our LP entities were not significant in 2024 and 2023. The Company is
continuing to pursue opportunities to invest in similar LP entities, and as of December 31, 2024, had unfunded commitments
related to similar ITC investments of $16,711. The Company’s risk of loss on these projects is generally mitigated by policies
requiring that the project qualify for the expected ITC prior to making its investment.
Note 15 – Fair Value Measurements
(In Thousands)
Recurring Fair Value Measurements
The Company carries certain assets and liabilities at fair value on a recurring basis in accordance with applicable standards. The
Company’s recurring fair value measurements are based on the requirement to carry such assets and liabilities at fair value or
the Company’s election to carry certain eligible assets and liabilities at fair value. Assets and liabilities that are required to be
carried at fair value include securities available for sale and derivative instruments. The Company has elected to carry mortgage
loans held for sale at fair value on a recurring basis as permitted under the guidance in ASC 825.
The following methods and assumptions are used by the Company to estimate the fair values of the Company’s financial assets
and liabilities that are measured on a recurring basis:
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 14 – Income Taxes (continued)
120
Securities available for sale: Securities available for sale consist primarily of debt securities, such as obligations of U.S.
Government agencies and corporations and mortgage-backed securities. Where quoted market prices in active markets are
available, securities are classified within Level 1 of the fair value hierarchy. If quoted prices from active markets are not
available, fair values are based on quoted market prices for similar instruments traded in active markets, quoted market prices
for identical or similar instruments traded in markets that are not active, or model-based valuation techniques where all
significant assumptions are observable in the market. Such instruments are classified within Level 2 of the fair value hierarchy.
When assumptions used in model-based valuation techniques are not observable in the market, the assumptions used by
management reflect estimates of assumptions used by other market participants in determining fair value. When there is limited
transparency around the inputs to the valuation, the instruments are classified within Level 3 of the fair value hierarchy.
Derivative instruments: Most of the Company’s derivative contracts are actively traded in over-the-counter markets and are
valued using discounted cash flow models which incorporate observable market based inputs including current market interest
rates, credit spreads, and other factors. Such instruments are categorized within Level 2 of the fair value hierarchy and include
interest rate swaps and other interest rate contracts including interest rate caps and/or floors. The Company’s interest rate lock
commitments are valued using current market prices for mortgage-backed securities with similar characteristics, adjusted for
certain factors including servicing and risk. The value of the Company’s forward commitments is based on current prices for
securities backed by similar types of loans. Because these assumptions are observable in active markets, the Company’s interest
rate lock commitments and forward commitments are categorized within Level 2 of the fair value hierarchy.
Mortgage loans held for sale in loans held for sale: Mortgage loans held for sale are primarily agency loans which trade in
active secondary markets. The fair value of these instruments is derived from current market pricing for similar loans, adjusted
for differences in loan characteristics, including servicing and risk. Because the valuation is based on external pricing of similar
instruments, mortgage loans held for sale are classified within Level 2 of the fair value hierarchy.
The following tables present assets and liabilities that are measured at fair value on a recurring basis as of the dates presented:
Level 1
Level 2
Level 3
Totals
December 31, 2024
Financial assets:
Securities available for sale
$
— $
831,013 $
— $
831,013
Total securities available for sale
—
831,013
—
831,013
Derivative instruments
—
38,954
—
38,954
Mortgage loans held for sale in loans held for sale
—
246,171
—
246,171
Total financial assets
$
— $
1,116,138 $
— $
1,116,138
Financial liabilities:
Derivative instruments
$
— $
32,268 $
— $
32,268
Level 1
Level 2
Level 3
Totals
December 31, 2023
Financial assets:
Securities available for sale:
Other available for sale securities
$
— $
923,279 $
— $
923,279
Total securities available for sale
—
923,279
—
923,279
Derivative instruments
—
37,151
—
37,151
Mortgage loans held for sale in loans held for sale
—
179,756
—
179,756
Total financial assets
$
— $
1,140,186 $
— $
1,140,186
Financial liabilities:
Derivative instruments
$
— $
33,608 $
— $
33,608
The Company reviews fair value hierarchy classifications on a quarterly basis. Changes in the Company’s ability to observe
inputs to the valuation may cause reclassification of certain assets or liabilities within the fair value hierarchy. There were no
such transfers between levels of the fair value hierarchy during the year ended December 31, 2024.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 15 – Fair Value Measurements (continued)
121
For 2024 and 2023, there were no gains or losses included in earnings that were attributable to the change in unrealized gains or
losses related to assets or liabilities held at the end of each respective period that were measured on a recurring basis using
significant unobservable inputs.
Nonrecurring Fair Value Measurements
Certain assets may be recorded at fair value on a nonrecurring basis. These nonrecurring fair value adjustments typically are a
result of the application of the lower of cost or market accounting or a write-down occurring during the period. The following
tables provide as of the dates presented the fair value measurement for assets measured at fair value on a nonrecurring basis that
were still held on the Consolidated Balance Sheets at period end and the level within the fair value hierarchy each is
classified:
Level 1
Level 2
Level 3
Totals
December 31, 2024
Individually evaluated loans, net of allowance for credit
losses
$
— $
— $
38,374 $
38,374
OREO
—
—
3,666
3,666
Total
$
— $
— $
42,040 $
42,040
Level 1
Level 2
Level 3
Totals
December 31, 2023
Individually evaluated loans, net of allowance for credit
losses
$
— $
— $
21,303 $
21,303
Total
$
— $
— $
21,303 $
21,303
The following methods and assumptions are used by the Company to estimate the fair values of the Company’s assets measured
on a nonrecurring basis:
Individually evaluated loans: Loans that do not share similar risk characteristics such that they can be evaluated on a collective
(pooled) basis are individually evaluated for credit losses each quarter taking into account the fair value of the collateral less
estimated selling costs. Collateral may be real estate and/or business assets including but not limited to equipment, inventory
and accounts receivable. The fair value of real estate is determined based on appraisals by qualified licensed appraisers. The fair
value of the business assets is generally based on amounts reported on the business’s financial statements. Appraised and
reported values may be adjusted based on changes in market conditions from the time of valuation and management’s
knowledge of the client and the client’s business. Since not all valuation inputs are observable, these nonrecurring fair value
determinations are classified as Level 3. Individually evaluated loans are reviewed and evaluated on at least a quarterly basis for
additional impairment and adjusted accordingly, based on the same factors previously identified. Individually evaluated loans
that were measured or re-measured at fair value had a carrying value of $53,157 and $37,515 at December 31, 2024 and
December 31, 2023, respectively, and a reserve for these loans of $14,782 and $9,753 was included in the allowance for credit
losses for the same periods.
Other real estate owned: OREO is comprised of commercial and residential real estate obtained in partial or total satisfaction of
loan obligations. OREO acquired in settlement of indebtedness is recorded at the fair value of the real estate less estimated costs
to sell. Subsequently, it may be necessary to record nonrecurring fair value adjustments for declines in fair value. Fair value,
when recorded, is determined based on appraisals by qualified licensed appraisers and adjusted for management’s estimates of
costs to sell. Accordingly, values for OREO are classified as Level 3.
The following table presents, as of December 31, 2024, OREO measured at fair value on a nonrecurring basis that was still held
in the Consolidated Balance Sheets at period-end. There was no impairment recognized during 2023 of OREO assets still held
in the Consolidated Balance Sheets at period end.
December 31,
2024
Carrying amount prior to remeasurement
$
4,038
Impairment recognized in results of operations
(372)
Fair value
$
3,666
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 15 – Fair Value Measurements (continued)
122
Mortgage servicing rights: The fair value of mortgage servicing rights is determined using an income approach with various
assumptions including expected cash flows, market discount rates, prepayment speeds, servicing costs, and other factors.
Because these factors are not all observable and include management’s assumptions, mortgage servicing rights are classified
within Level 3 of the fair value hierarchy. Mortgage servicing rights were carried at amortized cost at December 31, 2024 and
December 31, 2023. See Note 8, “Mortgage Servicing Rights,” for information about the valuation adjustments to the
Company’s mortgage servicing rights.
The following table presents information as of December 31, 2024 about significant unobservable inputs (Level 3) used in the
valuation of assets measured at fair value on a nonrecurring basis:
Financial instrument
Fair
Value
Valuation Technique
Significant
Unobservable Inputs
Range of Inputs
Individually evaluated loans, net of
allowance for credit losses
$
38,374
Appraised value of
collateral less estimated
costs to sell
Estimated costs to sell
4-10%
OREO
$
3,666
Appraised value of
property less estimated
costs to sell
Estimated costs to sell
4-10%
Fair Value Option
The Company elected to measure all mortgage loans originated for sale on or after July 1, 2012 at fair value under the fair value
option as permitted under ASC 825. Electing to measure these assets at fair value reduces certain timing differences and better
matches the changes in fair value of the loans with changes in the fair value of derivative instruments used to economically
hedge them.
Net losses of $3,309 resulting from fair value changes of these mortgage loans were recorded in income during 2024, as
compared to net gains of $3,300 in 2023 and net losses of $9,854 in 2022. The amounts do not reflect changes in fair values of
related derivative instruments used to hedge exposure to market-related risks associated with these mortgage loans. The change
in fair value of both mortgage loans held for sale and the related derivative instruments are recorded in “Mortgage banking
income” in the Consolidated Statements of Income.
The Company’s valuation of mortgage loans held for sale incorporates an assumption for credit risk; however, given the short-
term period that the Company holds these loans, valuation adjustments attributable to instrument-specific credit risk is nominal.
Interest income on mortgage loans held for sale measured at fair value is accrued as it is earned based on contractual rates and is
reflected in loan interest income on the Consolidated Statements of Income.
The following table summarizes the differences between the fair value and the principal balance for mortgage loans held for
sale measured at fair value as of December 31, 2024 and December 31, 2023:
Aggregate
Fair Value
Aggregate
Unpaid
Principal
Balance
Difference
December 31, 2024
Mortgage loans held for sale measured at fair value
$
246,171 $
244,218 $
1,953
December 31, 2023
Mortgage loans held for sale measured at fair value
$
179,756 $
174,471 $
5,285
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 15 – Fair Value Measurements (continued)
123
Fair Value of Financial Instruments
The carrying amounts and estimated fair values of the Company’s financial instruments, including those assets and liabilities
that are not measured and reported at fair value on a recurring basis or nonrecurring basis, were as follows as of the dates
presented:
Fair Value
Carrying
Value
Level 1
Level 2
Level 3
Total
December 31, 2024
Financial assets
Cash and cash equivalents
$ 1,092,032 $ 1,092,032 $
— $
— $ 1,092,032
Securities held to maturity
1,126,112
— 1,002,544
— 1,002,544
Securities available for sale
831,013
—
831,013
—
831,013
Loans held for sale
246,171
—
246,171
—
246,171
Loans, net
12,683,264
—
— 12,340,638 12,340,638
Mortgage servicing rights
72,991
—
—
96,290
96,290
Derivative instruments
38,954
—
38,954
—
38,954
Financial liabilities
Deposits
$ 14,572,612 $ 12,093,327 $ 2,476,977 $
— $ 14,570,304
Short-term borrowings
108,018
108,018
—
—
108,018
Junior subordinated debentures
113,916
—
100,668
—
100,668
Subordinated notes
316,698
—
295,868
—
295,868
Derivative instruments
32,268
—
32,268
—
32,268
Fair Value
Carrying
Value
Level 1
Level 2
Level 3
Total
December 31, 2023
Financial assets
Cash and cash equivalents
$
801,351 $
801,351 $
— $
— $
801,351
Securities held to maturity
1,221,464
— 1,121,830
— 1,121,830
Securities available for sale
923,279
—
923,279
—
923,279
Loans held for sale
179,756
—
179,756
—
179,756
Loans, net
12,152,652
—
— 11,594,363 11,594,363
Mortgage servicing rights
91,688
—
—
117,664
117,664
Derivative instruments
37,151
—
37,151
—
37,151
Financial liabilities
Deposits
$ 14,076,785 $ 11,381,556 $ 2,678,494 $
— $ 14,060,050
Short-term borrowings
307,577
307,577
—
—
307,577
Junior subordinated debentures
112,978
—
96,435
—
96,435
Subordinated notes
316,422
—
255,192
—
255,192
Derivative instruments
33,608
—
33,608
—
33,608
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 15 – Fair Value Measurements (continued)
124
Note 16 – Other Comprehensive Income (Loss)
(In Thousands)
Changes in the components of other comprehensive income (loss), net of tax, were as follows:
Pre-Tax
Tax Expense
(Benefit)
Net of Tax
Year Ended December 31, 2024
Securities available for sale:
Unrealized holding gains on securities
$
1,455 $
381 $
1,074
Amortization of unrealized holding losses on securities transferred to
the held to maturity category
12,731
3,255
9,476
Total securities available for sale
14,186
3,636
10,550
Derivative instruments:
Unrealized holding gains on derivative instruments
508
130
378
Total derivative instruments
508
130
378
Defined benefit pension and post-retirement benefit plans:
Net gain arising during the period
543
138
405
Amortization of net actuarial loss recognized in net periodic pension
cost(2)
423
108
315
Total defined benefit pension and post-retirement benefit plans
966
246
720
Total other comprehensive income
$
15,660 $
4,012 $
11,648
Year Ended December 31, 2023
Securities available for sale:
Unrealized holding gains on securities
$
20,194 $
5,066 $
15,128
Reclassification adjustment for gains realized in net income(2)
41,494
10,431
31,063
Amortization of unrealized holding losses on securities transferred to
the held to maturity category
13,557
3,466
10,091
Total securities available for sale
75,245
18,963
56,282
Derivative instruments:
Unrealized holding losses on derivative instruments
(2,558)
(653)
(1,905)
Total derivative instruments
(2,558)
(653)
(1,905)
Defined benefit pension and post-retirement benefit plans:
Net gain arising during the period
80
20
60
Amortization of net actuarial loss recognized in net periodic pension
cost(1)
462
118
344
Total defined benefit pension and post-retirement benefit plans
542
138
404
Total other comprehensive income
$
73,229 $
18,448 $
54,781
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
125
Pre-Tax
Tax Expense
(Benefit)
Net of Tax
Year Ended December 31, 2022
Securities available for sale:
Unrealized holding losses on securities
$
(285,829) $
(71,478) $
(214,351)
Amortization of unrealized holding losses on securities transferred to
the held to maturity category
4,964
1,263
3,701
Total securities available for sale
(280,865)
(70,215)
(210,650)
Derivative instruments:
Unrealized holding gains on derivative instruments
20,118
5,125
14,993
Total derivative instruments
20,118
5,125
14,993
Defined benefit pension and post-retirement benefit plans:
Net loss arising during the period
(4,107)
(1,045)
(3,062)
Amortization of net actuarial loss recognized in net periodic pension
cost(2)
167
42
125
Total defined benefit pension and post-retirement benefit plans
(3,940)
(1,003)
(2,937)
Total other comprehensive loss
$
(264,687) $
(66,093) $
(198,594)
(1) Included in Salaries and employee benefits in the Consolidated Statements of Income
(2) Included in Net (losses) gains on sales of securities and Impairment losses on securities in the Consolidated Statements of Income
The accumulated balances for each component of other comprehensive loss, net of tax, at December 31 were as follows:
2024
2023
2022
Unrealized losses on securities
$
(152,934) $
(163,484) $
(219,766)
Unrealized gains on derivative instruments
17,429
17,051
18,956
Unrecognized losses on defined benefit pension and post-retirement benefit
plans obligations
(7,103)
(7,823)
(8,227)
Total accumulated other comprehensive loss
$
(142,608) $
(154,256) $
(209,037)
Note 17 – Net Income Per Common Share
(In Thousands, Except Share Data)
Basic and diluted net income per common share calculations are as follows for the periods presented:
Year Ended December 31,
2024
2023
2022
Basic
Net income applicable to common stock
$
195,457 $
144,678 $
166,068
Average common shares outstanding
59,350,157
56,099,689
55,904,579
Net income per common share—basic
$
3.29 $
2.58 $
2.97
Diluted
Net income applicable to common stock
$
195,457 $
144,678 $
166,068
Average common shares outstanding
59,350,157
56,099,689
55,904,579
Effect of dilutive stock-based compensation
398,633
348,474
309,651
Average common shares outstanding—diluted
59,748,790
56,448,163
56,214,230
Net income per common share—diluted
$
3.27 $
2.56 $
2.95
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 16 – Other Comprehensive Income (Loss) (continued)
126
Outstanding stock-based compensation awards that could potentially dilute basic net income per common share in the future
that were not included in the computation of diluted net income per common share due to their anti-dilutive effect were as
follows for the periods presented:
Year Ended
December 31,
2024
2023
2022
Number of shares
—
6,600
9,250
Note 18 – Commitments, Contingent Liabilities and Financial Instruments with Off-Balance Sheet Risk
(In Thousands)
Loan commitments are made to accommodate the financial needs of the Company’s customers. Standby letters of credit commit
the Company to make payments on behalf of customers when certain specified future events occur. Both arrangements have
credit risk essentially the same as that involved in extending loans to customers and are subject to the Company’s normal credit
policies. Collateral (e.g., securities, receivables, inventory, equipment, etc.) is obtained based on management’s credit
assessment of the customer. The Company’s unfunded loan commitments (unfunded loans and unused lines of credit) and
standby letters of credit outstanding at December 31, 2024 were $2,856,308 and $90,267, respectively, compared to $3,091,997
and $113,970, respectively, at December 31, 2023.
Various claims and lawsuits are pending against the Company and Renasant Bank. In the opinion of management, after
consultation with legal counsel, resolution of these matters is not expected to have a material effect on the consolidated
financial statements.
Market risk resulting from interest rate changes on particular off-balance sheet financial instruments may be offset by other on -
or off-balance sheet transactions. Interest rate sensitivity is monitored by the Company for determining the net effect of
potential changes in interest rates on the market value of both on- and off-balance sheet financial instruments.
Note 19 – Restrictions on Cash, Securities, Bank Dividends, Loans or Advances
(In Thousands)
In March 2020, the Federal Reserve announced that effective March 26, 2020 the reserve requirement would be reduced to zero
to support the flow of credit to households and businesses in response to the economic environment caused by the COVID-19
pandemic. The reserve requirement has remained at zero since that time.
The Company’s balance of FHLB stock, which is carried at amortized cost, at December 31, 2024 and 2023, was $15,209 and
$20,003, respectively. The required investment for the same time period was $11,044 and $19,098, respectively.
The Company’s ability to pay dividends to its shareholders is substantially dependent on the ability of Renasant Bank to
transfer funds to the Company in the form of dividends, loans and advances. Under Mississippi law, a Mississippi bank with
earned surplus in excess of three times capital stock may pay a dividend, subject to the approval of the Mississippi Department
of Banking and Consumer Finance (the “DBCF”). In addition, the FDIC has the authority to prohibit the Bank from engaging in
business practices that the FDIC considers to be unsafe or unsound, which, depending on the financial condition of the Bank,
could include the payment of dividends. Accordingly, the approval of the DBCF is required prior to Renasant Bank paying
dividends to the Company, and under certain circumstances the approval of the FDIC may be required. At December 31, 2024,
the Bank’s earned surplus exceeded the Bank’s capital stock by more than ten times.
In addition to the FDIC and DBCF restrictions on dividends payable by the Bank to the Company, the Federal Reserve has
provided guidance on the criteria that it will use to evaluate the request by a bank holding company to pay dividends in an
aggregate amount that will exceed the company’s earnings for the period in which the dividends will be paid, which did not
apply to the Company in 2024 or 2023. For purposes of this analysis, “dividend” includes not only dividends on preferred and
common equity but also dividends on debt underlying trust preferred securities and other Tier 1 capital instruments. The
Federal Reserve’s criteria evaluates whether the holding company (1) has net income over the past four quarters sufficient to
fully fund the proposed dividend (taking into account prior dividends paid during this period), (2) is considering stock
repurchases or redemptions in the quarter, (3) does not have a concentration in commercial real estate and (4) is in good
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 17 – Net Income Per Common Share (continued)
127
supervisory condition, based on its overall condition and its asset quality risk. A holding company not meeting these criteria
will require more in-depth consultations with the Federal Reserve.
Federal Reserve regulations also limit the amount Renasant Bank may loan to the Company unless such loans are collateralized
by specific obligations. At December 31, 2024, the maximum amount available for transfer from Renasant Bank to the
Company in the form of loans was $202,274. The Company also maintains a $3,000 line of credit collateralized by cash with
the Bank. As of December 31, 2024, no loans from the Bank to the Company were outstanding.
Note 20 – Regulatory Matters
(In Thousands)
The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies.
Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by
regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific
capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under
regulatory accounting practices. Capital amounts and classification are also subject to qualitative judgments by the regulators
about components, risk weightings, and other factors.
The Federal Reserve, the FDIC and the Office of the Comptroller of the Currency have issued guidelines governing the levels
of capital that bank holding companies and banks must maintain. Those guidelines specify capital tiers, which include the
following classifications (which include the “capital conservation buffer” discussed below):
Capital Tiers
Tier 1 Capital to
Average Assets
(Leverage)
Common Equity
Tier 1 to
Risk - Weighted
Assets
Tier 1 Capital to
Risk – Weighted
Assets
Total Capital to
Risk – Weighted
Assets
Well capitalized
5% or above
6.5% or above
8% or above
10% or above
Adequately capitalized
4% or above
4.5% or above
6% or above
8% or above
Undercapitalized
Less than 4%
Less than 4.5%
Less than 6%
Less than 8%
Significantly undercapitalized
Less than 3%
Less than 3%
Less than 4%
Less than 6%
Critically undercapitalized
Tangible Equity / Total Assets less than 2%
The following table provides the capital and risk-based capital and leverage ratios for the Company and for Renasant Bank as of
December 31:
2024
2023
Amount
Ratio
Amount
Ratio
Renasant Corporation
Tier 1 Capital to Average Assets (Leverage)
$
1,935,522
11.34 % $
1,578,918
9.62 %
Common Equity Tier 1 Capital to Risk-Weighted Assets
1,825,197
12.73 %
1,469,531
10.52 %
Tier 1 Capital to Risk-Weighted Assets
1,935,522
13.50 %
1,578,918
11.30 %
Total Capital to Risk-Weighted Assets
2,449,129
17.08 %
2,085,531
14.93 %
Renasant Bank
Tier 1 Capital to Average Assets (Leverage)
$
1,843,123
10.80 % $
1,714,965
10.45 %
Common Equity Tier 1 Capital to Risk-Weighted Assets
1,843,123
12.85 %
1,714,965
12.25 %
Tier 1 Capital to Risk-Weighted Assets
1,843,123
12.85 %
1,714,965
12.25 %
Total Capital to Risk-Weighted Assets
2,022,737
14.10 %
1,888,104
13.49 %
Common equity Tier 1 capital (“CET1”) generally consists of common stock, retained earnings, accumulated other
comprehensive income and certain minority interests, less certain adjustments and deductions. In addition, the Company must
maintain a “capital conservation buffer,” which is a specified amount of CET1 in addition to the amount necessary to meet
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 19 – Restrictions on Cash, Securities, Bank Dividends, Loans or Advances (continued)
128
minimum risk-based capital requirements. The capital conservation buffer is designed to absorb losses during periods of
economic stress. If the Company’s ratio of CET1 to risk-weighted capital is below the capital conservation buffer, the Company
will face restrictions on its ability to pay dividends, repurchase outstanding stock and make certain discretionary bonus
payments. The required capital conservation buffer is 2.5% of CET1 to risk-weighted assets in addition to the amount necessary
to meet minimum risk-based capital requirements.
As previously disclosed, the Company adopted CECL as of January 1, 2020. The Company has elected to take advantage of
transitional relief offered by the Federal Reserve and the FDIC to delay for two years the estimated impact of CECL on
regulatory capital, followed by a three-year transitional period to phase out the capital benefit provided by the two-year delay.
Note 21 – Segment Reporting
(In Thousands)
The operations of the Company’s reportable segments are described as follows:
•
The Community Banks segment delivers a complete range of banking and financial services to individuals and small to
medium-size businesses including checking and savings accounts, business and personal loans, asset-based lending,
factoring and equipment leasing, as well as safe deposit and night depository facilities.
•
The Insurance segment included a full service insurance agency offering all major lines of commercial and personal
insurance through major carriers. Effective July 1, 2024, the Bank sold substantially all of the assets of its Insurance
segment.
•
The Wealth Management segment, through the Trust division, offers a broad range of fiduciary services including the
administration (as trustee or in other fiduciary or representative capacities) of benefit plans, management of trust accounts,
inclusive of personal and corporate benefit accounts and custodial accounts, as well as accounting and money management
for trust accounts. In addition, the Wealth Management segment, through the Financial Services division, provides
specialized products and services to customers, which include fixed and variable annuities, mutual funds and other
investment services through a third party broker-dealer. The Financial Services division also provides administrative and
compliance services for certain mutual funds.
The Company’s reportable segments are determined by the Chief Executive Officer, who is the designated chief operating
decision maker (“CODM”), based upon information provided about the Company’s products and services. The CODM
evaluates the financial performance of the segments by evaluating revenue streams, significant expenses and budget to actual
results, and the CODM provides guidance in strategy and the allocation of resources.
In order to give the CODM a more precise indication of the income and expenses controlled by each segment, the results of
operations for the Community Banks, Insurance and the Wealth Management segments reflect their own direct revenues and
expenses. Indirect revenues and expenses, including but not limited to income from the Company’s investment portfolio, as
well as certain costs associated with data processing and back office functions, primarily support the operations of the
community banks and, therefore, are included in the results of the Community Banks segment. Included in “Other” are the
operations of the holding company and other eliminations which are necessary for purposes of reconciling to the consolidated
amounts. Accounting policies for each segment are the same as those described in Note, “Significant Accounting Policies.”
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 20 – Regulatory Matters (continued)
129
The following table provides financial information for the Company’s operating segments as of and for the years ended
December 31, 2024, 2023 and 2022:
2024
Total interest income
$
886,666 $
942 $
64 $
105 $
887,777
Total interest expense
348,199
—
—
27,382
375,581
Net interest income
538,467
942
64
(27,277)
512,196
Provision for credit losses
9,273
—
—
—
9,273
Noninterest income
172,877
6,473
25,873
(1,563)
203,660
Salaries and employee benefits
266,639
3,645
13,484
—
283,768
Net occupancy and equipment
44,989
163
808
—
45,960
Other segment expenses(1)
125,678
584
4,362
1,266
131,890
Income before income taxes
264,765
3,023
7,283
(30,106)
244,965
Income taxes
56,369
785
196
(7,842)
49,508
Net income (loss)
$
208,396 $
2,238 $
7,087 $
(22,264) $
195,457
Total assets
$
18,033,458 $
— $
3,392 $
(1,982) $
18,034,868
Goodwill
988,898
—
—
—
988,898
2023
Total interest income
$
795,500 $
1,653 $
68 $
98 $
797,319
Total interest expense
251,026
—
—
26,966
277,992
Net interest income
544,474
1,653
68
(26,868)
519,327
Provision for credit losses
15,593
—
—
—
15,593
Noninterest income
76,130
12,578
25,311
(944)
113,075
Salaries and employee benefits
262,325
7,038
12,405
—
281,768
Net occupancy and equipment
45,303
438
730
—
46,471
Other segment expenses(2)
102,221
1,176
6,461
1,525
111,383
Income before income taxes
195,162
5,579
5,783
(29,337)
177,187
Income taxes
38,597
1,452
37
(7,577)
32,509
Net income (loss)
$
156,565 $
4,127 $
5,746 $
(21,760) $
144,678
Total assets
$
17,313,704 $
40,405 $
6,590 $
(164) $
17,360,535
Goodwill
988,898
2,767
—
—
991,665
2022
Total interest income
$
538,596 $
619 $
2,560 $
35 $
541,810
Total interest expense
39,562
—
128
20,822
60,512
Net interest income
499,034
619
2,432
(20,787)
481,298
Provision for credit losses
23,871
—
—
—
23,871
Noninterest income
114,263
11,821
24,839
(1,670)
149,253
Salaries and employee benefits
242,360
7,107
12,187
—
261,654
Net occupancy and equipment
43,814
420
585
—
44,819
Other segment expenses(3)
80,510
915
5,892
1,582
88,899
Income before income taxes
222,742
3,998
8,607
(24,039)
211,308
Income taxes
50,425
1,046
—
(6,231)
45,240
Net income (loss)
$
172,317 $
2,952 $
8,607 $
(17,808) $
166,068
Total assets
$
16,882,534 $
37,567 $
75,383 $
(7,308) $
16,988,176
Goodwill
988,941
2,767
—
—
991,708
Community
Banks
Insurance
Wealth
Management
Other
Consolidated
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 21 – Segment Reporting (continued)
130
(1) Other segment expenses for Community Banks include data processing, other real estate owned, legal and professional
fees, advertising and public relations, intangible amortization, communications, merger and conversion related expenses
and other miscellaneous expenses. Other segment expenses for Insurance include data processing, legal and professional
fees, advertising and public relations, communications and other miscellaneous expenses. Other segment expenses for
Wealth Management include data processing, legal and professional fees, advertising and public relations, intangible
amortization, communications and other miscellaneous expenses.
(2)
Other segment expenses for Community Banks include data processing, other real estate owned, legal and professional
fees, advertising and public relations, intangible amortization, communications and other miscellaneous expenses. Other
segment expenses for Insurance include data processing, legal and professional fees, advertising and public relations,
communications and other miscellaneous expenses. Other segment expenses for Wealth Management include data
processing, legal and professional fees, advertising and public relations, intangible amortization, communications and
other miscellaneous expenses.
(3)
Other segment expenses for Community Banks include data processing, other real estate owned, legal and professional
fees, advertising and public relations, intangible amortization, communications, restructuring charges, merger and
conversion related expenses and other miscellaneous expenses. Other segment expenses for Insurance include data
processing, advertising and public relations, communications and other miscellaneous expenses. Other segment expenses
for Wealth Management include data processing, legal and professional fees, advertising and public relations, intangible
amortization, communications and other miscellaneous expenses.
Note 22 – Renasant Corporation (Parent Company Only) Condensed Financial Information
(In Thousands)
Balance Sheets
December 31,
2024
2023
Assets
Cash and cash equivalents(1)
$
405,782 $
169,597
Investment in bank subsidiary(2)
2,694,503
2,541,195
Accrued interest receivable on bank balances(2)
27
27
Other assets
30,726
37,268
Total assets
$
3,131,038 $
2,748,087
Liabilities and shareholders’ equity
Junior subordinated debentures
$
113,916 $
112,978
Subordinated notes
316,698
316,422
Other liabilities
22,106
21,304
Shareholders’ equity
2,678,318
2,297,383
Total liabilities and shareholders’ equity
$
3,131,038 $
2,748,087
(1)
Eliminates in consolidation, with the exception of $2,092 and $1,987 in 2024 and 2023, respectively, pledged for collateral and held at non-subsidiary
bank
(2)
Eliminates in consolidation
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 21 – Segment Reporting (continued)
131
Statements of Income
Year Ended December 31,
2024
2023
2022
Income
Dividends from bank subsidiary(1)
$
75,907 $
72,042 $
68,114
Interest income from bank subsidiary(1)
39
28
5
Other dividends
270
260
134
Other income
354
919
85
Total income
76,570
73,249
68,338
Expenses
30,768
30,544
24,264
Income before income tax benefit and equity in undistributed net income of
bank subsidiary
45,802
42,705
44,074
Income tax benefit
(7,842)
(7,577)
(6,231)
Equity in undistributed net income of bank subsidiary(1)
141,813
94,396
115,763
Net income
$
195,457 $
144,678 $
166,068
(1)
Eliminates in consolidation
Statements of Cash Flows
Year Ended December 31,
2024
2023
2022
Operating activities
Net income
$
195,457 $
144,678 $
166,068
Adjustments to reconcile net income to net cash provided by operating
activities:
Equity in undistributed net income of bank subsidiary
(141,813)
(94,396)
(115,763)
Amortization/depreciation
1,425
1,770
1,478
Increase (decrease) in other assets
6,540
(8,824)
284
Increase in other liabilities
11,303
8,921
9,225
Net cash provided by operating activities
72,912
52,149
61,292
Investing activities
Sales and maturities of securities and available for sale
—
—
2,000
Net cash provided by investing activities
—
—
2,000
Financing activities
Cash paid for dividends
(53,727)
(50,279)
(49,991)
Repayment of long-term debt
—
—
(30,000)
Proceeds from equity offering
217,000
—
—
Net cash provided by (used in) financing activities
163,273
(50,279)
(79,991)
Increase (decrease) in cash and cash equivalents
236,185
1,870
(16,699)
Cash and cash equivalents at beginning of year
169,597
167,727
184,426
Cash and cash equivalents at end of year
$
405,782 $
169,597 $
167,727
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 22 – Renasant Corporation (Parent Company Only) Condensed Financial Information (continued)
132
Note 23 – Leases
(In Thousands)
The Company enters into leases in both lessor and lessee capacities.
Lessor Arrangements
As of December 31, 2024 and 2023, the net investment in these leases was $30,846 and $42,761, comprised of $26,655 and
$34,929 in lease receivables, $7,961 and $13,446 in residual balances and $3,770 and $5,614 in deferred income, respectively.
In order to mitigate potential exposure to residual asset risk, the Company utilizes first amendment or terminal rental adjustment
clause leases.
For the twelve months ended December 31, 2024 and 2023, the Company generated $1,080 and $1,441 in income from these
leases, respectively, which is included in interest income on loans on the Consolidated Statements of Income.
The maturities of the lessor arrangements outstanding at December 31, 2024 is presented in the table below.
2025
$
365
2026
722
2027
205
2028
479
2029
8,395
Thereafter
20,680
Total lease receivables
$
30,846
Lessee Arrangements
As of December 31, 2024 and 2023, right-of-use assets totaled $46,811 and $48,517 and lease liabilities totaled $49,385 and
$51,130, respectively. The table below provides the components of lease cost and supplemental information for the periods
presented.
Year ended December 31,
2024
2023
Operating lease cost (cost resulting from lease payments)
$
6,705
$
7,333
Short-term lease cost
51
217
Variable lease cost (cost excluded from lease payments)
960
800
Sublease income
(639)
(551)
Net lease cost
$
7,077
$
7,799
Operating lease - operating cash flows (fixed payments)
6,714
7,171
Operating lease - operating cash flows (liability reduction)
4,943
5,472
Weighted average lease term - operating leases (in years) (at period end)
18.11
18.51
Weighted average discount rate - operating leases (at period end)
3.55 %
3.49 %
Right-of-use assets obtained in exchange for new lease liabilities -
operating leases
$
4,630
$
3,126
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
133
The maturities of the lessee arrangements outstanding at December 31, 2024 are presented in the table below.
2025
$
6,186
2026
5,367
2027
4,727
2028
4,494
2029
4,274
Thereafter
42,294
Total undiscounted cash flows
67,342
Discount on cash flows
17,957
Total operating lease liabilities
$
49,385
Rental expense was $6,136, $6,859, and $7,623 for 2024, 2023, and 2022, respectively.
For more information on lease accounting, see Note 1, “Significant Accounting Policies” and on lease financing receivables,
see Note 3, “Loans.”
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 23 – Leases (continued)
134
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Based upon their evaluation as of December 31, 2024, our Principal Executive Officer and Principal Financial Officer have
concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended) are effective for ensuring that information the Company is required to disclose in reports
that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such
information is accumulated and communicated to the Company’s management, including its Principal Executive and Principal
Financial Officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required
disclosure.
Management’s Annual Report on Internal Control over Financial Reporting and Attestation Report of the Independent
Registered Public Accounting Firm
The information required to be provided pursuant to this item is set forth under the headings “Report on Management’s
Assessment of Internal Control over Financial Reporting” and “Reports of Independent Registered Public Accounting Firm” in
Item 8, Financial Statements and Supplementary Data, in this report.
Changes in Internal Control over Financial Reporting
There was no change to internal control over financial reporting during the fourth quarter of 2024 that has materially affected,
or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
Trading Plans
During the quarter ended December 31, 2024, no director or officer (as defined in Rule 16a-1(f) under the Securities Exchange
Act of 1934, as amended) adopted or terminated any “Rule 10b5-1 trading arrangements” or “non-Rule 10b5-1 trading
arrangements” (each as defined in Item 408(a) of Regulation S-K).
ITEM 9C. DISCLOSURES REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Executive Officers of the Company
The information appearing under the heading “Executive Officers” in the Company’s Definitive Proxy Statement for its 2025
Annual Meeting of Shareholders is incorporated herein by reference.
Code of Ethics
The Company has adopted a code of business conduct and ethics in compliance with Item 406 of Regulation S-K that applies to
the Company’s principal executive officer, principal financial officer and principal accounting officer, among others. The
Company’s Code of Ethics is available on its website at www.renasant.com by clicking on “Corporate Governance,” then
“Documents, Charters & Selected Policies” and then “Code of Business Conduct and Ethics.” Any person may request a free
copy of the Code of Business Conduct and Ethics from the Company by sending a request to the following address: Renasant
Corporation, 209 Troy Street, Tupelo, Mississippi, 38804-4827, Attention: General Counsel. The Company intends to satisfy
135
the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of the
Company’s Code of Business Conduct and Ethics by posting such information on its website, at the address specified above.
Directors of the Company, Shareholder Recommendations of Director Candidates, Audit Committee Members and
Insider Trading Arrangements and Policies
The information appearing under the headings “Corporate Governance and the Board of Directors” and “Board Members and
Compensation - Members of the Board of Directors” in the Company’s Definitive Proxy Statement for its 2025 Annual Meeting
of Shareholders is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information appearing under the headings “Corporate Governance and the Board of Directors - Role of the Board in Risk
Oversight,” “Board Members and Compensation - Director Compensation,” “Compensation Discussion and Analysis,”
“Compensation Committee Report,” “Compensation Committee Interlocks and Insider Participation,” “Compensation Tables”
and “Other Compensation-Related Disclosures” in the Company’s Definitive Proxy Statement for its 2025 Annual Meeting of
Shareholders is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information appearing under the heading “Stock Ownership” in the Company’s Definitive Proxy Statement for its 2025
Annual Meeting of Shareholders is incorporated herein by reference.
Equity Compensation Plans
There were no options, warrants or rights outstanding under plans approved by our shareholders and plans or arrangements that
were not approved by our shareholders, as of December 31, 2024. These plans and arrangements are:
•
Shareholder-Approved Plans: The only shareholder-approved equity compensation plan under which awards are
outstanding is the Renasant Corporation 2020 Long-Term Incentive Compensation Plan, as amended (the “LTIP”).
The LTIP authorizes the Company to make grants and awards of stock options, stock appreciation rights, restricted
stock and restricted stock units to directors, officers and employees designated for participation in the plan. As of
December 31, 2024, an aggregate of 1,004,296 shares of unvested restricted stock remained outstanding under the
plan, while there were no options or other securities outstanding under the plan as of such date.
•
Non-Shareholder Approved Plans and Arrangements: The only equity compensation plan or arrangement currently in
force that was not approved by our shareholders is our DSU Plan. An aggregate of 467,500 shares of Company
common stock are reserved for issuance; as of December 31, 2024, units representing an aggregate of 343,249 shares
of common stock have been allocated to accounts, some of which has been distributed in the form of common stock.
From time to time, the Company without shareholder approval enters into employment agreements which may include
commitments by the Company to make awards of equity under the Company’s long-term incentive compensation
plans, either stated in terms of a fixed number of shares or a percentage of the employee’s base compensation.
136
The table below reports shares remaining available for issuance under our equity compensation plans:
Equity Compensation Plan Information
(at December 31, 2024)
Plan Category
(a) Number of
securities to be issued
upon exercise of
outstanding options,
warrants and rights
(b) Weighted-average
exercise price of
outstanding options,
warrants and rights(1)
(c) Number of
securities remaining
available for future
issuance under equity
compensation plans
(excluding securities
in column (a))
Equity compensation plans approved by security
holders
—
—
1,338,328
Equity compensation plans not approved by security
holders
—
—
124,250
Total
—
—
1,462,578
(1)Does not take into account units allocated under the DSU plan.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information appearing under the headings “Corporate Governance and the Board of Directors – Director Independence”
and “Corporate Governance and the Board of Directors – Related Person Transactions” in the Company’s Definitive Proxy
Statement for its 2025 Annual Meeting of Shareholders is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information appearing under the heading “Independent Registered Public Accountants” in the Company’s Definitive Proxy
Statement for its 2025 Annual Meeting of Shareholders is incorporated herein by reference.
137
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) - (1) Financial Statements
The following consolidated financial statements and supplementary information for the fiscal years ended December 31, 2024,
2023 and 2022 are included in Part II, Item 8, Financial Statements and Supplementary Data, in this report:
(i)
Report on Management’s Assessment of Internal Control over Financial Reporting
(ii)
Reports of Independent Registered Public Accounting Firm
(iii)
Consolidated Balance Sheets – December 31, 2024 and 2023
(iv)
Consolidated Statements of Income – Years ended December 31, 2024, 2023 and 2022
(v)
Consolidated Statements of Comprehensive Income – Years ended December 31, 2024, 2023 and 2022
(vi)
Consolidated Statements of Changes in Shareholders’ Equity – Years ended December 31, 2024, 2023 and
2022
(vii)
Consolidated Statements of Cash Flows – Years ended December 31, 2024, 2023 and 2022
(viii)
Notes to Consolidated Financial Statements
(a) - (2) Financial Statement Schedules
All schedules have been omitted because they are either not applicable or the required information has been included in the
consolidated financial statements or notes thereto.
(a) - (3) Exhibits required by Item 601 of Regulation S-K
(2)(i)
Agreement and Plan of Merger by and between Renasant Corporation and The First Bancshares, Inc., dated as of
July 29, 2024, filed as exhibit 2(i) to the Form 8-K of the Company filed with the Securities and Exchange
Commission (the “Commission”) on July 29, 2024, and incorporated herein by reference. The disclosure
schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to
furnish supplementally a copy of any omitted schedule or exhibit to the Commission upon request.
(3)(i)
Articles of Incorporation of the Company, as amended, filed as exhibit 3.1 to the Form 10-Q of the Company
filed with the Commission May 10, 2016 and incorporated herein by reference.
(3)(ii)
Articles of Amendment to the Articles of Incorporation of the Company, filed as exhibit 3(i) to the Form 8-K of
the Company filed with the Commission on April 25, 2024 and incorporated herein by reference.
(3)(iii)
Amended and Restated Bylaws of the Company, filed as exhibit 3(ii) to the Form 8-K of the Company filed with
the Commission on October 24, 2024 and incorporated herein by reference.
(4)(i)
Articles of Incorporation of the Company, as amended, filed as exhibit 3.1 to the Form 10-Q of the Company
filed with the Commission on May 10, 2016 and incorporated herein by reference.
(4)(ii)
Articles of Amendment to the Articles of Incorporation of the Company, filed as exhibit 3(i) to the Form 8-K of
the Company filed with the Commission on April 25, 2024 and incorporated herein by reference.
(4)(iii)
Amended and Restated Bylaws of the Company, filed as exhibit 3(ii) to the Form 8-K of the Company filed with
the Commission on October 24, 2024 and incorporated herein by reference.
(4)(iv)
Subordinated Indenture dated August 22, 2016 between Renasant Corporation and Wilmington Trust, National
Association, filed as exhibit 4.1 to the Form 8-K of the Company filed with the Commission on August 22, 2016
and incorporated herein by reference.
(4)(v)
First Supplemental Indenture dated August 22, 2016 between Renasant Corporation and Wilmington Trust,
National Association, filed as exhibit 4.2 to the Form 8-K of the Company filed with the Commission on August
22, 2016 and incorporated herein by reference.
(4)(vi)
Second Supplemental Indenture dated August 22, 2016 between Renasant Corporation and Wilmington Trust,
National Association, filed as exhibit 4.3 to the Form 8-K of the Company filed with the Commission on August
22, 2016 and incorporated herein by reference.
(4)(vii)
Third Supplemental Indenture dated September 3, 2020 between Renasant Corporation and Wilmington Trust,
National Association, filed as exhibit 4.2 to the Form 8-K of the Company filed with the Commission on
September 3, 2020 and incorporated herein by reference.
(4)(viii)
First Amendment to Third Supplemental Indenture dated November 24, 2021 between Renasant Corporation and
Wilmington Trust, National Association, filed as exhibit 4.3 to the Form 8-K of the Company filed with the
Commission on November 24, 2021 and incorporated herein by reference.
138
(4)(ix)
Fourth Supplemental Indenture dated November 23, 2021 between Renasant Corporation and Wilmington Trust,
National Association, filed as exhibit 4.2 to the Form 8-K of the Company filed with the Commission on
November 23, 2021 and incorporated herein by reference.
(4)(x)
Form of 5.0% Fixed-to-Floating Subordinated Note due 2026 (included in exhibit (4)(v)).
(4)(xi)
Form of 5.50% Fixed-to-Floating Subordinated Note due 2031 (included in exhibit (4)(vi)).
(4)(xii)
Form of 4.50% Fixed-to-Floating Rate Subordinated Note due 2035 (included in exhibit (4)(vii)).
(4)(xiii)
Form of 3.00% Fixed-to-Floating Rate Subordinated Note due 2031 (included in exhibit (4)(ix)).
(4)(xiv)
Description of Renasant Corporation’s Securities Registered under Section 12 of the Securities Exchange Act of
1934, as amended, filed as exhibit 4(i) to the Quarterly Report on Form 10-Q of the Company filed with the
Commission on August 7, 2024 and incorporated herein by reference.
(10)(i)
Renasant Corporation Deferred Stock Unit Plan, filed as exhibit 4.3 to the Form S-8 Registration Statement of
the Company (File No. 333-102152) filed with the Commission on December 23, 2002 and incorporated herein
by reference.*
(10)(ii)
Amendment to the Renasant Corporation Deferred Stock Unit Plan dated December 4, 2002, filed as exhibit 4.4
to the Form S-8 Registration Statement of the Company (File No. 333-102152) filed with the Commission on
December 23, 2002 and incorporated herein by reference.*
(10)(iii)
Amended and Restated Renasant Corporation Deferred Stock Unit Plan, filed as exhibit 99.2 to the Form 8-K of
the Company filed with the Commission on July 19, 2006 and incorporated herein by reference.*
(10)(iv)
Amendment to the Amended and Restated Renasant Corporation Deferred Stock Unit Plan dated June 5, 2007,
filed as exhibit 99.1 to the Form S-8 Registration Statement of the Company (File No. 333-144185) filed with
the Commission on June 29, 2007 and incorporated herein by reference.*
(10)(v)
Amendment to the Amended and Restated Renasant Corporation Deferred Stock Unit Plan dated December 16,
2008, filed as exhibit 10.2 to the Form 8-K of the Company filed with the Commission on February 17, 2009 and
incorporated herein by reference.*
(10)(vi)
Amendment to the Amended and Restated Renasant Corporation Deferred Stock Unit Plan dated January 17,
2012, filed as exhibit 99.1 to the Form 8-K of the Company filed with the Commission on January 23, 2012 and
incorporated herein by reference.*
(10)(vii)
Amendment No. 5 to the Renasant Corporation Deferred Stock Unit Plan, filed as exhibit 10.1 to the Form 8-K
of the Company filed with the Commission on December 18, 2020 and incorporated herein by reference.*
(10)(viii)
Amended and Restated Renasant Corporation Performance Based Rewards Plan, dated as of April 23, 2024,
filed as exhibit 10(i) to the Form 10-Q of the Company filed with the Commission on May 8, 2024 and
incorporated herein by reference.*
(10)(ix)
Renasant Bank Executive Deferred Income Plan, filed as exhibit 99.1 to the Form 8-K of the Company filed with
the Commission on January 5, 2007 and incorporated herein by reference.*
(10)(x)
Amendment to the Renasant Bank Executive Deferred Income Plan dated December 16, 2008, filed as exhibit
10.3 to the Form 8-K of the Company filed with the Commission on February 17, 2009 and incorporated herein
by reference.*
(10)(xi)
Amendment to the Renasant Bank Executive Deferred Income Plan dated December 27, 2016, filed as exhibit
10.1 to the Form 10-K/A of the Company filed with the Commission on February 28, 2017 and incorporated
herein by reference.*
(10)(xii)
Renasant Bank Directors’ Deferred Fee Plan, filed as exhibit 99.2 to the Form 8-K of the Company filed with the
Commission on January 5, 2007 and incorporated herein by reference.*
(10)(xiii)
Amendment to the Renasant Bank Directors’ Deferred Fee Plan dated December 16, 2008, filed as exhibit 10.4
to the Form 8-K of the Company filed with the Commission on February 17, 2009 and incorporated herein by
reference.*
(10)(xiv)
Amendment to the Renasant Bank Directors’ Deferred Fee Plan dated December 27, 2016, filed as exhibit 10.2
to the Form 10-K/A of the Company filed with the Commission on February 28, 2017 and incorporated herein
by reference.*
(10)(xv)
Executive Employment Agreement dated January 2, 2008 by and between E. Robinson McGraw and
Renasant Corporation, filed as exhibit 10.1 to the Form 8-K of the Company filed with the Commission on
March 7, 2008 and incorporated herein by reference.*
139
(10)(xvi)
Amendment to Executive Employment Agreement dated April 25, 2017 by and between E. Robinson McGraw
and Renasant Corporation, filed as exhibit 10.1 to the Form 8-K of the Company filed with the Commission on
April 28, 2017 and incorporated herein by reference.*
(10)(xvii)
Amendment No. 2 to Executive Employment Agreement dated August 19, 2019 by and between E. Robinson
McGraw and Renasant Corporation, filed as exhibit 10.1 to the Form 10-Q of the Company filed with the
Commission on November 7, 2019 and incorporated herein by reference.*
(10)(xviii)
Amendment No. 3 to Executive Employment Agreement dated April 27, 2021 by and between E. Robinson
McGraw and Renasant Corporation, filed as exhibit 10(i) to the Form 10-Q of the Company filed with the
Commission on May 7, 2021 and incorporated herein by reference.*
(10)(xix)
Amendment No. 4 to Executive Employment Agreement dated December 19, 2023 by and between E. Robinson
McGraw and Renasant Corporation, filed as exhibit 10(xix) to the Form 10-K of the Company filed with the
Commission on February 23, 2024 and incorporated herein by reference.*
(10)(xx)
Renasant Corporation Severance Pay Plan, filed as exhibit 10.5 to the Form 8-K of the Company filed with the
Commission on February 17, 2009 and incorporated herein by reference.*
(10)(xxi)
Executive Employment Agreement dated January 12, 2016, between Renasant Corporation and Kevin D.
Chapman, filed as exhibit 10.1 to the Form 8-K of the Company filed with the Commission on January 13, 2016
and incorporated herein by reference.*
(10)(xxii)
Amendment to the Executive Employment Agreement dated February 14, 2018, between Renasant Corporation
and Kevin D. Chapman, filed as exhibit 10.2 to the Form 10-K of the Company filed with the Commission on
February 28, 2018 and incorporated herein by reference.*
10(xxiii)
Amendment No. 2 to the Executive Employment Agreement dated February 25, 2025, between Renasant
Corporation and Kevin D. Chapman.*
(10)(xxiv)
Executive Employment Agreement dated January 12, 2016, between Renasant Corporation and C. Mitchell
Waycaster, filed as exhibit 10.2 to the Form 8-K of the Company filed with the Commission on January 13, 2016
and incorporated herein by reference.*
(10)(xxv)
Amendment to the Executive Employment Agreement dated February 14, 2018, between Renasant Corporation
and C. Mitchell Waycaster, filed as exhibit 10.3 to the Form 10-K of the Company filed with the Commission on
February 28, 2018 and incorporated herein by reference.*
10(xxvi)
Amendment No. 2 to the Executive Employment Agreement dated December 17, 2024, between Renasant
Corporation and C. Mitchell Waycaster.*
(10)(xxvii)
Brand Group Holdings, Inc. Deferred Compensation Plan, as amended on January 1, 2016 and September 5,
2018, filed as exhibit 10.1 to the Form 10-K of the Company filed with the Commission on February 27, 2019
and incorporated herein by reference.*
(10)(xxviii)
Renasant Bank Deferred Income Plan, filed as exhibit 10.2 to the Form 10-K of the Company filed with the
Commission on February 27, 2019 and incorporated herein by reference.*
(10)(xxix)
Amendment to the Renasant Bank Deferred Income Plan dated December 14, 2020, filed as exhibit 10.31 to the
Form 10-K of the Company filed with the Commission on February 26, 2021 and incorporated herein by
reference.*
(10)(xxx)
Renasant Corporation 2020 Long Term Equity Incentive Compensation Plan, filed as exhibit 10.1 to the Form 8-
K of the Company filed with the Commission on May 8, 2020 and incorporated herein by reference.*
(10)(xxxi)
Amendment No. 1 to Renasant Corporation 2020 Long Term Equity Incentive Compensation Plan, filed as
exhibit 10(ii) to the Form 10-Q of the Company filed with the Commission on May 8, 2024 and incorporated
herein by reference.*
(10)(xxxii)
Form of Time-Based Restricted Stock Award Agreement under the Renasant Corporation 2020 Long Term
Equity Incentive Compensation Plan.*
(10)(xxxiii)
Form of Performance-Based Restricted Stock Award Letter under the Renasant Corporation 2020 Long Term
Equity Incentive Compensation Plan.*
(10)(xxxiv)
Executive Employment Agreement effective dated May 3, 2019 by and between Renasant Corporation and
Curtis J. Perry, filed as exhibit 10.33 to the Form 10-K of the Company filed with the Commission on February
26, 2021 and incorporated herein by reference.*
(10)(xxxv)
Executive Employment Agreement effective dated July 27, 2020, by and between Renasant Corporation and
James C. Mabry IV, filed as exhibit 10.1 to the Form 8-K of the Company filed with the Commission on July 31,
2020 and incorporated herein by reference.*
140
(10)(xxxvi)
Form of Renasant Voting Agreement, filed as exhibit 10(ii) to the Form 10-Q of the Company filed with the
Commission on November 6, 2024 and incorporated herein by reference.
(19)
Renasant Corporation Insider Trading Policy
(21)
Subsidiaries of the Company
(23)
Consent of Independent Registered Public Accounting Firm
(31)(i)
Certification of the Principal Executive Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
(31)(ii)
Certification of the Principal Financial Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
(32)(i)
Certification of the Principal Executive Officer, as required pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
(32)(ii)
Certification of the Principal Financial Officer, as required pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
(97)
Renasant Corporation Clawback Policy
(101)
The following materials from Renasant Corporation’s Annual Report on Form 10-K for the year ended
December 31, 2024 were formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Consolidated
Balance Sheets as of December 31, 2024 and December 31, 2023, (ii) Consolidated Statements of Income for the
years ended December 31, 2024, 2023 and 2022, (iii) Consolidated Statements of Comprehensive Income for the
years ended December 31, 2024, 2023 and 2022, (iv) Consolidated Statements of Changes in Shareholders’
Equity for the years ended December 31, 2024, 2023 and 2022, (v) Consolidated Statements of Cash Flows for
the years ended December 31, 2024, 2023 and 2022 and (vi) Notes to Consolidated Financial Statements.
(104)
The cover page of Renasant Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024,
formatted in Inline XBRL (included in Exhibit 101).
*
Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Form 10-K
pursuant to Item 15(b) of Form 10-K.
The Company does not have any long-term debt instruments under which securities are authorized exceeding ten percent of the
total assets of the Company and its subsidiaries on a consolidated basis. The Company will furnish to the Securities and
Exchange Commission, upon its request, a copy of all long-term debt instruments not filed herewith.
141
ITEM 16. FORM 10-K SUMMARY
None.
142
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
RENASANT CORPORATION
Date: February 26, 2025
by:
/s/ C. Mitchell Waycaster
C. Mitchell Waycaster
Chief Executive Officer and
Executive Vice Chairman
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the date indicated.
Date: February 26, 2025
by:
/s/ James C. Mabry IV
James C. Mabry IV
Chief Financial Officer
(Principal Financial Officer)
Date: February 26, 2025
by:
/s/ Kelly W. Hutcheson
Kelly W. Hutcheson
Chief Accounting Officer
(Principal Accounting Officer)
Date: February 26, 2025
by:
/s/ Gary D. Butler
Gary D. Butler
Director
Date: February 26, 2025
by:
/s/ Donald Clark, Jr.
Donald Clark, Jr.
Director
Date: February 26, 2025
by:
/s/ John M. Creekmore
John M. Creekmore
Vice Chairman of the Board and Director
Date: February 26, 2025
by:
/s/ Albert J. Dale, III
Albert J. Dale, III
Director
Date: February 26, 2025
by:
/s/ Jill V. Deer
Jill V. Deer
Director
Date: February 26, 2025
by:
/s/ Connie L. Engel
Connie L. Engel
Director
S-1
Date: February 26, 2025
by:
/s/ Rose J. Flenorl
Rose J. Flenorl
Director
Date: February 26, 2025
by:
/s/ John T. Foy
John T. Foy
Director
Date: February 26, 2025
by:
/s/ Richard L. Heyer, Jr.
Richard L. Heyer, Jr.
Director
Date: February 26, 2025
by:
/s/ Neal A. Holland, Jr.
Neal A. Holland, Jr.
Director
Date: February 26, 2025
by:
/s/ E. Robinson McGraw
E. Robinson McGraw
Chairman of the Board and
Director
Date: February 26, 2025
by:
/s/ Sean M. Suggs
Sean M. Suggs
Director
Date: February 26, 2025
by:
/s/ C. Mitchell Waycaster
C. Mitchell Waycaster
Director, Chief Executive Officer
and Executive Vice Chairman
(Principal Executive Officer)
S-2
209 Troy Street
Tupelo, MS 38804-4827
1.800.680.1601
Renasantbank.com
/renasantbank
@renasant
/company/renasant-bank
@renasantbank