~~0000715072rnst:AccruingLoansMemberus-gaap:FinancialAssetNotPastDueMemberus-gaap:ConstructionLoansMemberus-gaap:CommercialRealEstateMemberrnst:LoanPortfolioPurchasedMember2022-09-30~~

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________

FORM 10-Q

________________________________________________________

(Mark One)


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~September 30, 2022~~March 31, 2023


☐			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 NASDAQ Stock Market LLC

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 (§232.405 of this chapter) 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Table of Contents

As of ~~October 31, 2022, 55,953,104~~April 30, 2023, 56,092,901 shares of the registrant’s common stock, $5.00 par value per share, were outstanding.

Table of Contents

Renasant Corporation and Subsidiaries

Form 10-Q

For the Quarterly Period Ended ~~September 30, 2022~~March 31, 2023

CONTENTS

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

Renasant Corporation and Subsidiaries

Consolidated Balance Sheets

(In Thousands, Except Share Data)


		(Unaudited)					(Unaudited)
		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Assets	Assets					Assets
Cash and due from banks	Cash and due from banks	$	206,943	$	182,710	Cash and due from banks	$	193,818	$	193,513
Interest-bearing balances with banks	Interest-bearing balances with banks	272,557		1,695,255		Interest-bearing balances with banks	653,879		382,479
Cash and cash equivalents	Cash and cash equivalents	479,500		1,877,965		Cash and cash equivalents	847,697		575,992
Securities held to maturity (net of allowance for credit losses of $32 at each of September 30, 2022 and December 31, 2021) (fair value of $1,218,656 and $415,552, respectively)		1,353,502		416,357
Securities held to maturity (net of allowance for credit losses of $32 at each of March 31, 2023 and December 31, 2022) (fair value of $1,204,079 and $1,206,540, respectively)						Securities held to maturity (net of allowance for credit losses of $32 at each of March 31, 2023 and December 31, 2022) (fair value of $1,204,079 and $1,206,540, respectively)	1,300,240		1,324,040
Securities available for sale, at fair value	Securities available for sale, at fair value	1,569,242		2,386,052		Securities available for sale, at fair value	1,507,907		1,533,942
Loans held for sale, at fair value	Loans held for sale, at fair value	144,642		453,533		Loans held for sale, at fair value	159,318		110,105
Loans, net of unearned income:
Non purchased loans and leases		10,259,840		9,011,011
Purchased loans		845,164		1,009,903
Total loans, net of unearned income		11,105,004		10,020,914

Loans held for investment, net of unearned income						Loans held for investment, net of unearned income	11,766,425		11,578,304
Allowance for credit losses on loans	Allowance for credit losses on loans	(174,356)		(164,171)		Allowance for credit losses on loans	(195,292)		(192,090)
Loans, net	Loans, net	10,930,648		9,856,743		Loans, net	11,571,133		11,386,214
Premises and equipment, net	Premises and equipment, net	284,062		293,122		Premises and equipment, net	287,006		283,595
Other real estate owned:
Non purchased		867		951
Purchased		1,545		1,589
Total other real estate owned, net		2,412		2,540
Other real estate owned, net						Other real estate owned, net	4,818		1,763
Goodwill	Goodwill	946,291		939,683		Goodwill	991,665		991,708
Other intangible assets, net	Other intangible assets, net	20,170		24,098		Other intangible assets, net	22,750		24,176
Bank-owned life insurance	Bank-owned life insurance	371,650		287,359		Bank-owned life insurance	375,572		373,808
Mortgage servicing rights	Mortgage servicing rights	81,980		89,018		Mortgage servicing rights	85,039		84,448
Other assets	Other assets	287,000		183,841		Other assets	320,938		298,385
Total assets	Total assets	$	16,471,099	$	16,810,311	Total assets	$	17,474,083	$	16,988,176
Liabilities and shareholders’ equity	Liabilities and shareholders’ equity					Liabilities and shareholders’ equity
Liabilities	Liabilities					Liabilities
Deposits	Deposits					Deposits
Noninterest-bearing	Noninterest-bearing	$	4,827,220	$	4,718,124	Noninterest-bearing	$	4,244,877	$	4,558,756
Interest-bearing	Interest-bearing	8,604,904		9,187,600		Interest-bearing	9,667,142		8,928,210
Total deposits	Total deposits	13,432,124		13,905,724		Total deposits	13,912,019		13,486,966
Short-term borrowings	Short-term borrowings	312,818		13,947		Short-term borrowings	732,057		712,232
Long-term debt	Long-term debt	426,821		471,209		Long-term debt	431,111		428,133
Other liabilities	Other liabilities	207,055		209,578		Other liabilities	211,596		224,829
Total liabilities	Total liabilities	14,378,818		14,600,458		Total liabilities	15,286,783		14,852,160
Shareholders’ equity	Shareholders’ equity					Shareholders’ equity
Preferred stock, $0.01 par value – 5,000,000 shares authorized; no shares issued and outstanding	Preferred stock, $0.01 par value – 5,000,000 shares authorized; no shares issued and outstanding	—		—		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; 59,296,725 shares issued; 55,953,104 and 55,756,233 shares outstanding, respectively		296,483		296,483
Treasury stock, at cost – 3,343,621 and 3,540,492 shares, respectively		(111,577)		(118,027)
Common stock, $5.00 par value – 150,000,000 shares authorized; 59,296,725 shares issued; 56,073,658 and 55,953,104 shares outstanding, respectively						Common stock, $5.00 par value – 150,000,000 shares authorized; 59,296,725 shares issued; 56,073,658 and 55,953,104 shares outstanding, respectively	296,483		296,483
Treasury stock, at cost – 3,223,067 and 3,343,621 shares, respectively						Treasury stock, at cost – 3,223,067 and 3,343,621 shares, respectively	(107,559)		(111,577)
Additional paid-in capital	Additional paid-in capital	1,299,476		1,300,192		Additional paid-in capital	1,299,458		1,302,422
Retained earnings	Retained earnings	823,951		741,648		Retained earnings	891,242		857,725
Accumulated other comprehensive loss, net of taxes	Accumulated other comprehensive loss, net of taxes	(216,052)		(10,443)		Accumulated other comprehensive loss, net of taxes	(192,324)		(209,037)
Total shareholders’ equity	Total shareholders’ equity	2,092,281		2,209,853		Total shareholders’ equity	2,187,300		2,136,016
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	16,471,099	$	16,810,311	Total liabilities and shareholders’ equity	$	17,474,083	$	16,988,176

See Notes to Consolidated Financial Statements.

Table of Contents

Renasant Corporation and Subsidiaries

Consolidated Statements of Income (Unaudited)

(In Thousands, Except Share Data)


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30,				September 30,					March 31,
		2022		2021		2022		2021			2023		2022
Interest income	Interest income									Interest income
Loans	Loans	$	125,175	$	105,004	$	332,862	$	333,334	Loans	$	163,524	$	98,692
Securities	Securities									Securities
Taxable	Taxable	12,636		6,749		32,137		17,285		Taxable	13,253		8,934
Tax-exempt	Tax-exempt	1,864		1,667		5,669		5,025		Tax-exempt	1,838		1,901
Other	Other	3,458		593		6,076		1,122		Other	5,430		664
Total interest income	Total interest income	143,133		114,013		376,744		356,766		Total interest income	184,045		110,191
Interest expense	Interest expense									Interest expense
Deposits	Deposits	7,241		6,972		17,896		22,920		Deposits	32,866		5,637
Borrowings	Borrowings	5,574		3,749		15,386		11,327		Borrowings	15,404		4,925
Total interest expense	Total interest expense	12,815		10,721		33,282		34,247		Total interest expense	48,270		10,562
Net interest income	Net interest income	130,318		103,292		343,462		322,519		Net interest income	135,775		99,629
Provision for (recovery of provision for) credit losses on loans		9,800		(1,200)		13,300		(1,200)
Provision for credit losses on loans										Provision for credit losses on loans	7,960		1,500

Provision for (recovery of provision for) credit losses		9,800		(1,200)		13,300		(1,200)

Net interest income after provision for credit losses	Net interest income after provision for credit losses	120,518		104,492		330,162		323,719		Net interest income after provision for credit losses	127,815		98,129
Noninterest income	Noninterest income									Noninterest income
Service charges on deposit accounts	Service charges on deposit accounts	10,216		9,337		29,512		26,818		Service charges on deposit accounts	9,120		9,562
Fees and commissions	Fees and commissions	4,148		3,837		12,798		11,847		Fees and commissions	4,676		3,982
Insurance commissions	Insurance commissions	3,108		2,829		8,253		7,488		Insurance commissions	2,446		2,554
Wealth management revenue	Wealth management revenue	5,467		5,371		17,102		15,182		Wealth management revenue	5,140		5,924
Mortgage banking income	Mortgage banking income	12,675		23,292		30,624		94,878		Mortgage banking income	8,517		9,633
Net gain on sales of securities		—		764		—		2,121

BOLI income	BOLI income	2,296		1,602		6,780		5,318		BOLI income	3,003		2,153

Other	Other	3,276		3,723		10,789		15,750		Other	4,391		3,650
Total noninterest income	Total noninterest income	41,186		50,755		115,858		179,402		Total noninterest income	37,293		37,458
Noninterest expense	Noninterest expense									Noninterest expense
Salaries and employee benefits	Salaries and employee benefits	66,463		69,115		194,282		218,104		Salaries and employee benefits	69,832		62,239
Data processing	Data processing	3,526		5,277		11,379		16,380		Data processing	3,633		4,263
Net occupancy and equipment	Net occupancy and equipment	11,266		11,748		33,697		35,660		Net occupancy and equipment	11,405		11,276
Other real estate owned	Other real estate owned	34		168		(394)		313		Other real estate owned	30		(241)
Professional fees	Professional fees	3,087		2,972		9,016		8,566		Professional fees	3,467		3,151
Advertising and public relations	Advertising and public relations	3,229		2,922		10,694		9,274		Advertising and public relations	4,686		4,059
Intangible amortization	Intangible amortization	1,251		1,481		3,927		4,618		Intangible amortization	1,426		1,366
Communications	Communications	1,999		2,198		5,930		6,781		Communications	1,980		2,027
Merger and conversion related expenses	Merger and conversion related expenses	—		—		687		—		Merger and conversion related expenses	—		687
Restructuring charges	Restructuring charges	—		—		732		307		Restructuring charges	—		(455)

Other	Other	10,719		8,118		23,923		28,708		Other	11,249		5,733
Total noninterest expense	Total noninterest expense	101,574		103,999		293,873		328,711		Total noninterest expense	107,708		94,105
Income before income taxes	Income before income taxes	60,130		51,248		152,147		174,410		Income before income taxes	57,400		41,482
Income taxes	Income taxes	13,563		11,185		32,355		35,572		Income taxes	11,322		7,935
Net income	Net income	$	46,567	$	40,063	$	119,792	$	138,838	Net income	$	46,078	$	33,547

Basic earnings per share	Basic earnings per share	$	0.83	$	0.71	$	2.14	$	2.47	Basic earnings per share	$	0.82	$	0.60
Diluted earnings per share	Diluted earnings per share	$	0.83	$	0.71	$	2.13	$	2.46	Diluted earnings per share	$	0.82	$	0.60
Cash dividends per common share	Cash dividends per common share	$	0.22	$	0.22	$	0.66	$	0.66	Cash dividends per common share	$	0.22	$	0.22

See Notes to Consolidated Financial Statements.

Table of Contents

Renasant Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income (Unaudited)

(In Thousands)


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30,				September 30,					March 31,
		2022		2021		2022		2021			2023		2022
Net income	Net income	$	46,567	$	40,063	$	119,792	$	138,838	Net income	$	46,078	$	33,547
Other comprehensive loss, net of tax:
Other comprehensive income (loss), net of tax:										Other comprehensive income (loss), net of tax:
Securities available for sale:	Securities available for sale:									Securities available for sale:
Unrealized holding losses on securities		(63,579)		(9,250)		(220,999)		(20,491)
Reclassification adjustment for gains realized in net income		—		(570)		—		(1,582)
Unrealized holding gains (losses) on securities										Unrealized holding gains (losses) on securities	15,531		(100,462)

Amortization of unrealized holding gains on securities transferred to the held to maturity category		1,207		—		969		—

Amortization of unrealized holding losses (gains) on securities transferred to the held to maturity category										Amortization of unrealized holding losses (gains) on securities transferred to the held to maturity category	2,328		(74)
Total securities available for sale	Total securities available for sale	(62,372)		(9,820)		(220,030)		(22,073)		Total securities available for sale	17,859		(100,536)
Derivative instruments:	Derivative instruments:									Derivative instruments:
Unrealized holding gains on derivative instruments		1,687		1,215		14,328		7,551
Unrealized holding (losses) gains on derivative instruments										Unrealized holding (losses) gains on derivative instruments	(1,232)		6,379

Total derivative instruments	Total derivative instruments	1,687		1,215		14,328		7,551		Total derivative instruments	(1,232)		6,379
Defined benefit pension and post-retirement benefit plans:	Defined benefit pension and post-retirement benefit plans:									Defined benefit pension and post-retirement benefit plans:

Amortization of net actuarial loss recognized in net periodic pension cost	Amortization of net actuarial loss recognized in net periodic pension cost	31		49		93		148		Amortization of net actuarial loss recognized in net periodic pension cost	86		31
Total defined benefit pension and post-retirement benefit plans	Total defined benefit pension and post-retirement benefit plans	31		49		93		148		Total defined benefit pension and post-retirement benefit plans	86		31
Other comprehensive loss, net of tax		(60,654)		(8,556)		(205,609)		(14,374)
Comprehensive (loss) income		$	(14,087)	$	31,507	$	(85,817)	$	124,464
Other comprehensive income (loss), net of tax										Other comprehensive income (loss), net of tax	16,713		(94,126)
Comprehensive income (loss)										Comprehensive income (loss)	$	62,791	$	(60,579)

See Notes to Consolidated Financial Statements.

Table of Contents

Renasant Corporation and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited)

(In Thousands, Except Share Data)


		Common Stock			Treasury Stock				Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss				Total			Common Stock						Treasury Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total
Nine Months Ended September 30, 2022		Shares	Amount
Balance at January 1, 2022		55,756,233	$	296,483			$	(118,027)			$	1,300,192			$	741,648					$	(10,443)		$	2,209,853
Three Months Ended March 31, 2023																			Three Months Ended March 31, 2023	Shares			Amount			Treasury Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total
Balance at January 1, 2023																			Balance at January 1, 2023	55,953,104			$	296,483

Net income	Net income	—	—		—				—		33,547		—				33,547		Net income	—			—					—			—			46,078			—			46,078
Other comprehensive loss		—	—		—				—		—		(94,126)				(94,126)
Comprehensive loss																	(60,579)
Cash dividends ($0.22 per share)		—	—		—				—		(12,505)		—				(12,505)

Issuance of common stock for stock-based compensation awards		124,433	—		3,977				(6,442)		—		—				(2,465)
Stock-based compensation expense		—	—		—				3,338		—		—				3,338

Balance at March 31, 2022		55,880,666	$	296,483	$	(114,050)			$	1,297,088	$	762,690	$	(104,569)			$	2,137,642
Net income		—	—		—				—		39,678		—				39,678
Other comprehensive loss		—	—		—				—		—		(50,829)				(50,829)
Comprehensive loss																	(11,151)
Cash dividends ($0.22 per share)		—	—		—				—		(12,488)		—				(12,488)

Issuance of common stock for stock-based compensation awards		51,351	—		1,755				(1,833)		—		—				(78)
Stock-based compensation expense		—	—		—				2,952		—		—				2,952

Balance at June 30, 2022		55,932,017	$	296,483	$	(112,295)			$	1,298,207	$	789,880	$	(155,398)			$	2,116,877
Net income		—	—		—				—		46,567		—				46,567
Other comprehensive loss		—	—		—				—		—		(60,654)				(60,654)
Other comprehensive income																			Other comprehensive income	—			—			—			—			—			16,713			16,713
Comprehensive income	Comprehensive income																(14,087)		Comprehensive income																			62,791
Cash dividends ($0.22 per share)	Cash dividends ($0.22 per share)	—	—		—				—		(12,496)		—				(12,496)		Cash dividends ($0.22 per share)	—			—			—			—			(12,561)			—			(12,561)

Issuance of common stock for stock-based compensation awards	Issuance of common stock for stock-based compensation awards	21,087	—		718				(1,000)		—		—				(282)		Issuance of common stock for stock-based compensation awards	120,554			—			4,018			(6,409)			—			—			(2,391)
Stock-based compensation expense	Stock-based compensation expense	—	—		—				2,269		—		—				2,269		Stock-based compensation expense	—			—			—			3,445			—			—			3,445

Balance at September 30, 2022		55,953,104	$	296,483	$	(111,577)			$	1,299,476	$	823,951	$	(216,052)			$	2,092,281
Balance at March 31, 2023																			Balance at March 31, 2023	56,073,658			$	296,483		$	(107,559)		$	1,299,458		$	891,242		$	(192,324)		$	2,187,300

~~Table of Contents~~


		Common Stock			Treasury Stock				Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)				Total			Common Stock						Treasury Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Nine Months Ended September 30, 2021		Shares	Amount
Balance at January 1, 2021		56,200,487	$	296,483			$	(101,554)			$	1,296,963			$	615,773					$	25,068		$	2,132,733
Three Months Ended March 31, 2022																			Three Months Ended March 31, 2022	Shares			Amount			Treasury Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance at January 1, 2022																			Balance at January 1, 2022	55,756,233			$	296,483

Net income	Net income	—	—		—				—		57,908		—				57,908		Net income	—			—					—			—			33,547			—			33,547
Other comprehensive loss	Other comprehensive loss	—	—		—				—		—		(4,929)				(4,929)		Other comprehensive loss	—			—			—			—			—			(94,126)			(94,126)
Comprehensive income																	52,979
Comprehensive loss																			Comprehensive loss																			(60,579)
Cash dividends ($0.22 per share)	Cash dividends ($0.22 per share)	—	—		—				—		(12,564)		—				(12,564)		Cash dividends ($0.22 per share)	—			—			—			—			(12,505)			—			(12,505)

Issuance of common stock for stock-based compensation awards	Issuance of common stock for stock-based compensation awards	93,859	—		2,605				(4,808)		—		—				(2,203)		Issuance of common stock for stock-based compensation awards	124,433			—			3,977			(6,442)			—			—			(2,465)
Stock-based compensation expense	Stock-based compensation expense	—	—		—				2,756		—		—				2,756		Stock-based compensation expense	—			—			—			3,338			—			—			3,338

Balance at March 31, 2021		56,294,346	$	296,483	$	(98,949)			$	1,294,911	$	661,117	$	20,139			$	2,173,701
Net income		—	—		—				—		40,867		—				40,867
Other comprehensive loss		—	—		—				—		—		(889)				(889)
Comprehensive income																	39,978
Cash dividends ($0.22 per share)		—	—		—				—		(12,540)		—				(12,540)
Balance at March 31, 2022																			Balance at March 31, 2022	55,880,666			$	296,483		$	(114,050)		$	1,297,088		$	762,690		$	(104,569)		$	2,137,642

Issuance of common stock for stock-based compensation awards		56,532	—		1,700				(1,417)		—		—				283
Stock-based compensation expense		—	—		—				2,385		—		—				2,385

Balance at June 30, 2021		56,350,878	$	296,483	$	(97,249)			$	1,295,879	$	689,444	$	19,250			$	2,203,807
Net income		—	—		—				—		40,063		—				40,063
Other comprehensive loss		—	—		—				—		—		(8,556)				(8,556)
Comprehensive income																	31,507
Cash dividends ($0.22 per share)		—	—		—				—		(12,474)		—				(12,474)
Repurchase of shares in connection with stock repurchase program		(612,107)	—		(21,314)				—		—		—				(21,314)

Issuance of common stock for stock-based compensation awards		8,636	—		275				(451)		—		—				(176)
Stock-based compensation expense		—	—		—				2,594		—		—				2,594

Balance at September 30, 2021		55,747,407	$	296,483	$	(118,288)			$	1,298,022	$	717,033	$	10,694			$	2,203,944

See Notes to Consolidated Financial Statements.

Table of Contents

Renasant Corporation and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

(In Thousands)

Nine Months Ended September 30,
2022 2021
Operating activities
Net income $ 119,792 $ 138,838
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for (recovery of provision for) credit losses 13,300 (1,200)
Depreciation, amortization and accretion 33,590 34,421
Deferred income tax expense 3,600 5,071
Proceeds from sale of MSR 18,525 —
Gain on sale of MSR (2,960) —
Funding of mortgage loans held for sale (1,436,158) (3,189,474)
Proceeds from sales of mortgage loans held for sale 1,757,353 3,230,039
Gains on sales of mortgage loans held for sale (9,808) (71,598)
Valuation adjustment to mortgage servicing rights — (13,561)
Gains on sales of securities — (2,121)
Gains on sales of premises and equipment (245) (519)
Stock-based compensation expense 8,558 7,736
Increase in other assets (32,187) (16,429)
Decrease in other liabilities (10,253) (31,032)
Net cash provided by operating activities 463,107 90,171
Investing activities
Purchases of securities available for sale (708,457) (1,743,105)
Proceeds from sales of securities available for sale — 176,406
Proceeds from call/maturities of securities available for sale 336,504 329,520
Purchases of securities held to maturity (91,803) —
Proceeds from call/maturities of securities held to maturity 35,980 —
Net (increase) decrease in loans (1,057,998) 917,343
Purchases of premises and equipment (10,374) (16,797)
Proceeds from sales of premises and equipment 1,230 8,715
Purchase of bank-owned life insurance (80,000) (50,000)
Net change in FHLB stock (7,538) (1,226)
Proceeds from sales of other assets 2,458 4,081
Net cash paid in acquisition of businesses (10,066) —
Other, net 2,607 2,803
Net cash used in investing activities (1,587,457) (372,260)
Financing activities
Net increase in noninterest-bearing deposits 109,096 807,602
Net (decrease) increase in interest-bearing deposits (582,696) 388,146
Net increase (decrease) in short-term borrowings 269,391 (10,087)
Repayment of long-term debt (32,417) (1,742)
Cash paid for dividends (37,489) (37,578)
Repurchase of shares in connection with stock repurchase program — (21,314)
Net cash (used in) provided by financing activities (274,115) 1,125,027
Net (decrease) increase in cash and cash equivalents (1,398,465) 842,938
Cash and cash equivalents at beginning of period 1,877,965 633,203
Cash and cash equivalents at end of period $ 479,500 $ 1,476,141
Supplemental disclosures
Cash paid for interest $ 32,506 $ 37,827
Cash paid for income taxes $ 19,245 $ 41,248
Noncash transactions:
Transfers of loans to other real estate owned $ 1,828 $ 3,171
Recognition of operating right-of-use assets $ 3,045 $ 6,718
Recognition of operating lease liabilities $ 3,045 $ 6,718

~~Table of Contents~~


	Three Months Ended March 31,
	2023		2022
Operating activities
Net income	$	46,078	$	33,547
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	7,960		1,500
Depreciation, amortization and accretion	9,237		12,804
Deferred income tax expense	2,667		4,649


Funding of mortgage loans held for sale	(258,946)		(595,046)
Proceeds from sales of mortgage loans held for sale	212,755		769,797
Gains on sales of mortgage loans held for sale	(4,769)		(6,047)



Losses (gains) on sales of premises and equipment	2		(3)
Stock-based compensation expense	3,445		3,338

(Increase) decrease in other assets	(10,945)		5,746
Decrease in other liabilities	(14,866)		(24,469)
Net cash (used in) provided by operating activities	(7,382)		205,816
Investing activities
Purchases of securities available for sale	—		(285,635)

Proceeds from call/maturities of securities available for sale	45,342		128,155
Purchases of securities held to maturity	—		(79,434)

Proceeds from call/maturities of securities held to maturity	25,424		7,620
Net increase in loans	(195,617)		(264,251)
Purchases of premises and equipment	(8,237)		(2,030)
Proceeds from sales of premises and equipment	—		100
Purchase of bank-owned life insurance	—		(80,000)
Net change in FHLB stock	(22,130)		(422)
Proceeds from sales of other assets	647		956
Net cash paid in acquisition of businesses	—		(10,066)
Other, net	1,340		207
Net cash used in investing activities	(153,231)		(584,800)
Financing activities
Net decrease in noninterest-bearing deposits	(313,879)		(11,868)
Net increase in interest-bearing deposits	738,933		97,041
Net increase in short-term borrowings	19,825		67,852

Repayment of long-term debt	—		(32,008)
Cash paid for dividends	(12,561)		(12,505)



Net cash provided by financing activities	432,318		108,512
Net increase (decrease) in cash and cash equivalents	271,705		(270,472)
Cash and cash equivalents at beginning of period	575,992		1,877,965
Cash and cash equivalents at end of period	$	847,697	$	1,607,493


Supplemental disclosures
Cash paid for interest	$	41,239	$	10,324
Cash paid for income taxes	$	17,443	$	6,195
Noncash transactions:
Transfers of loans to other real estate owned	$	3,623	$	200




Recognition of operating right-of-use assets	$	531	$	30
Recognition of operating lease liabilities	$	531	$	30

See Notes to Consolidated Financial Statements.

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 1 – Summary of Significant Accounting Policies

(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. ~~and~~, Park Place Capital ~~Corporation.~~Corporation and Continental Republic Capital, LLC (doing business as “Republic Business Credit”). Through its subsidiaries, the Company offers a diversified range of financial, wealth management, fiduciary and insurance services to its retail and commercial customers from ~~full service~~ offices located throughout ~~Mississippi, Tennessee, Alabama, Georgia, Florida, North Carolina~~the Southeast as well as offers factoring and ~~South Carolina.~~asset-based lending on a nationwide basis.

The Bank acquired Southeastern Commercial Finance, LLC (“SCF”), an asset-based lending company headquartered in Birmingham, Alabama, effective March 1, 2022. Prior to the end of the third quarter of 2022, all of SCF's assets were distributed to the Bank in connection with the conversion and integration of SCF into the Bank.

In September 2022, the Bank formed Renasant Capital Funding Corporation (the “REIT”), which is intended to qualify as a real estate investment trust under the Internal Revenue Code of 1986, as amended. The REIT will purchase from the Bank, either by assignment or participation, eligible loans collateralized by real estate located in Georgia and Florida, which allows for more effective monitoring of the loans and better managing liquidity related to such real estate assets. The arrangement provides tax benefits in certain states in which ~~we operate.~~the Company operates.

The Bank acquired Republic Business Credit, a factoring and asset-based lending company headquartered in New Orleans, Louisiana (“RBC”), effective December 30, 2022.

Basis of Presentation: The accompanying unaudited consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information regarding the Company’s significant accounting policies, refer to the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 filed with the Securities and Exchange Commission on February ~~25, 2022.~~24, 2023.

Use of Estimates: The preparation of financial statements in conformity with 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, and such differences may be material.

Impact of Recently-Issued Accounting Standards and Pronouncements:

In ~~September~~March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ~~2022-04,~~2022-02, “~~Liabilities~~Financial Instruments - ~~Supplier Finance Programs (Subtopic 405-50)~~Credit Losses (Topic 326): ~~Disclosure of Supplier Finance Program Obligations”~~Troubled Debt Restructurings and Vintage Disclosures” (“ASU ~~2022-04”~~2022-02”), which ~~enhances~~eliminates the ~~transparency~~accounting guidance for troubled debt restructurings in Accounting Standards Codification (“ASC”) Subtopic 310-40, “Receivables - Troubled Debt Restructurings by Creditors,” while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Additionally, ASU 2022-02 requires entities to disclose current-period gross write-offs by year of ~~supplier finance programs by requiring that a buyer~~origination for financing receivables and net investments in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program's nature, activity during the period, changes from period to period, and potential magnitude.leases. ASU ~~2022-04 will be~~2022-02 was effective on January 1, 2023. ~~Early adoption is permitted, including in an interim period.~~ The adoption of this accounting pronouncement ~~will have~~had no impact on the ~~Company's~~Company’s financial ~~statements.~~statements aside from additional and revised disclosures.

In ~~June 2022,~~March 2023, FASB issued ASU ~~2022-03,~~2023-02, “~~Fair Value Measurement~~Investments - Equity Method and Joint Ventures (Topic ~~820)~~323): ~~Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”~~Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method” (“ASU ~~2022-03”~~2023-02”), which ~~clarifies that a contractual restriction on the sale of an~~permits reporting entities to elect to account for their tax equity ~~security is not considered part~~investments, regardless of the ~~unit of account of~~tax credit program from which the equity security and, therefore, is not considered in measuring fair value. It also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. In addition,income tax credits are received, using the proportional amortization method if certain conditions are met. ASU 2022-03 requires the following disclosures for equity securities subject to contractual sale restrictions: (1) the fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet, (2) the nature and remaining duration of the restriction(s) and (3) the circumstances that could cause a lapse in the restrictions(s). ASU 2022-032023-02 will be effective on January 1, 2024. Early adoption is permitted, including in an interim period. The adoption of this accounting pronouncement will have no impact on the ~~Company's~~Company’s historical financial statements ~~aside from additional and revised disclosures.~~but could influence the Company’s decisions with respect to investments in certain tax credits prospectively.

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

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 in the tables below.

There was no allowance for credit losses allocated to any of the Company’s available for sale securities as of ~~September 30, 2022~~March 31, 2023 or December 31, ~~2021.~~2022.


		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2022
March 31, 2023										March 31, 2023

Obligations of other U.S. Government agencies and corporations	Obligations of other U.S. Government agencies and corporations	$	170,000	$	—	$	(5,480)	$	164,520	Obligations of other U.S. Government agencies and corporations	$	170,000	$	—	$	(4,110)	$	165,890
Obligations of states and political subdivisions	Obligations of states and political subdivisions	155,188		88		(14,635)		140,641		Obligations of states and political subdivisions	149,646		377		(6,866)		143,157
Residential mortgage backed securities:	Residential mortgage backed securities:									Residential mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	528,196		13		(59,181)		469,028		Government agency mortgage backed securities	487,834		77		(45,812)		442,099
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	626,821		—		(102,823)		523,998		Government agency collateralized mortgage obligations	589,560		—		(95,044)		494,516
Commercial mortgage backed securities:	Commercial mortgage backed securities:									Commercial mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	11,204		—		(957)		10,247		Government agency mortgage backed securities	11,128		—		(900)		10,228
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	214,617		—		(25,129)		189,488		Government agency collateralized mortgage obligations	207,032		—		(24,236)		182,796

Other debt securities	Other debt securities	74,888		3		(3,571)		71,320		Other debt securities	73,051		15		(3,845)		69,221

		$	1,780,914	$	104	$	(211,776)	$	1,569,242		$	1,688,251	$	469	$	(180,813)	$	1,507,907


		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2021
U.S. Treasury securities		$	3,007	$	3	$	—	$	3,010
December 31, 2022										December 31, 2022

Obligations of other U.S. Government agencies and corporations										Obligations of other U.S. Government agencies and corporations	$	170,000	$	—	$	(5,340)	$	164,660
Obligations of states and political subdivisions	Obligations of states and political subdivisions	153,847		5,532		(269)		159,110		Obligations of states and political subdivisions	154,066		204		(9,368)		144,902
Residential mortgage backed securities:	Residential mortgage backed securities:									Residential mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	967,497		7,854		(6,816)		968,535		Government agency mortgage backed securities	508,415		37		(52,036)		456,416
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	1,008,514		457		(20,371)		988,600		Government agency collateralized mortgage obligations	605,033		—		(103,864)		501,169
Commercial mortgage backed securities:	Commercial mortgage backed securities:									Commercial mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	14,717		365		(1)		15,081		Government agency mortgage backed securities	11,166		—		(1,053)		10,113
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	216,859		812		(3,419)		214,252		Government agency collateralized mortgage obligations	211,435		—		(25,589)		185,846

Other debt securities	Other debt securities	36,515		1,097		(148)		37,464		Other debt securities	74,885		—		(4,049)		70,836

		$	2,400,956	$	16,120	$	(31,024)	$	2,386,052		$	1,735,000	$	241	$	(201,299)	$	1,533,942

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

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			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2022
March 31, 2023										March 31, 2023
Obligations of states and political subdivisions	Obligations of states and political subdivisions	$	292,769	$	—	$	(63,602)	$	229,167	Obligations of states and political subdivisions	$	290,983	$	91	$	(38,774)	$	252,300
Residential mortgage backed securities	Residential mortgage backed securities									Residential mortgage backed securities
Government agency mortgage backed securities	Government agency mortgage backed securities	499,348		—		(29,278)		470,070		Government agency mortgage backed securities	470,833		—		(19,656)		451,177
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	433,407		—		(27,038)		406,369		Government agency collateralized mortgage obligations	415,243		—		(25,330)		389,913
Commercial mortgage backed securities:	Commercial mortgage backed securities:									Commercial mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	17,011		—		(3,429)		13,582		Government agency mortgage backed securities	17,001		—		(2,931)		14,070
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	45,655		—		(6,200)		39,455		Government agency collateralized mortgage obligations	45,144		—		(6,321)		38,823
Other debt securities	Other debt securities	65,344		—		(5,331)		60,013		Other debt securities	61,068		—		(3,272)		57,796
		$	1,353,534	$	—	$	(134,878)	$	1,218,656		$	1,300,272	$	91	$	(96,284)	$	1,204,079
Allowance for credit losses - held to maturity securities	Allowance for credit losses - held to maturity securities	(32)								Allowance for credit losses - held to maturity securities	(32)
Held to maturity securities, net of allowance for credit losses	Held to maturity securities, net of allowance for credit losses	$	1,353,502							Held to maturity securities, net of allowance for credit losses	$	1,300,240


		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2021
December 31, 2022										December 31, 2022
Obligations of states and political subdivisions	Obligations of states and political subdivisions	$	267,641	$	333	$	(685)	$	267,289	Obligations of states and political subdivisions	$	291,886	$	17	$	(48,325)	$	243,578
Residential mortgage backed securities	Residential mortgage backed securities									Residential mortgage backed securities
Government agency mortgage backed securities	Government agency mortgage backed securities	60,507		1		(198)		60,310		Government agency mortgage backed securities	483,560		—		(24,432)		459,128
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	24,832		—		(92)		24,740		Government agency collateralized mortgage obligations	423,315		—		(30,706)		392,609
Commercial mortgage backed securities:	Commercial mortgage backed securities:									Commercial mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	1,855		—		—		1,855		Government agency mortgage backed securities	17,006		—		(3,261)		13,745
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	39,505		—		(117)		39,388		Government agency collateralized mortgage obligations	45,430		—		(6,559)		38,871
Other debt securities	Other debt securities	22,049		—		(79)		21,970		Other debt securities	62,875		—		(4,266)		58,609
		$	416,389	$	334	$	(1,171)	$	415,552		$	1,324,072	$	17	$	(117,549)	$	1,206,540
Allowance for credit losses - held to maturity securities	Allowance for credit losses - held to maturity securities	(32)								Allowance for credit losses - held to maturity securities	(32)
Held to maturity securities, net of allowance for credit losses	Held to maturity securities, net of allowance for credit losses	$	416,357							Held to maturity securities, net of allowance for credit losses	$	1,324,040

During the third quarter, the Company transferred, at fair value, $882,927 of securities from the available for sale portfolio to the held to maturity portfolio as the Company has no intention to sell these securities. The related net unrealized loss of $99,675 (after tax losses of $74,307) remained in accumulated other comprehensive income (loss) and will be amortized over the remaining life of the securities, offsetting the related amortization of discount on the transferred securities. No gains or losses were recognized at the time of transfer.

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

There were no securities sold during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 or 2022. ~~Securities sold during the three and nine months ended September 30, 2021 were as set forth in the table below.~~

Carrying Value Net Proceeds Gain/(Loss)
Three months ended September 30, 2021
Residential mortgage backed securities:
Government agency mortgage backed securities $ 9,232 $ 9,739 $ 507
Government agency collateralized mortgage obligations 6,736 6,866 130
Other debt securities 4,283 4,410 127
$ 20,251 $ 21,015 $ 764
Nine months ended September 30, 2021
Obligations of states and political subdivisions $ 47 $ 50 $ 3
Residential mortgage backed securities:
Government agency mortgage backed securities 145,572 149,474 3,902
Government agency collateralized mortgage obligations 12,362 12,512 150
Trust preferred securities 12,021 9,960 (2,061)
Other debt securities 4,283 4,410 127
$ 174,285 $ 176,406 $ 2,121

~~Gross realized gains and losses on sales of securities available for sale for the three and nine months ended September 30, 2021 were as follows:~~

Three Months Ended Nine Months Ended
September 30, September 30,
2021 2021
Gross gains on sales of securities available for sale $ 825 $ 4,333
Gross losses on sales of securities available for sale (61) (2,212)
Gains on sales of securities available for sale, net $ 764 $ 2,121

At September 30, 2022 and December 31, 2021, securities with a carrying value of $804,161 and $607,681, respectively, were pledged to secure government, public and trust deposits. Securities with a carrying value of $17,472 and $21,493 were pledged as collateral for short-term borrowings and derivative instruments at September 30, 2022 and December 31, 2021, respectively.

The amortized cost and fair value of securities at September 30, 2022 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.

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Held to Maturity Available for Sale
Amortized
Cost Fair
Value Amortized
Cost Fair
Value
Due within one year $ 150 $ 147 $ 8,900 $ 8,864
Due after one year through five years 1,863 1,750 227,785 221,447
Due after five years through ten years 44,350 37,553 77,471 71,942
Due after ten years 246,406 189,717 75,791 65,160
Residential mortgage backed securities:
Government agency mortgage backed securities 500,348 471,070 528,196 469,028
Government agency collateralized mortgage obligations 433,407 406,369 626,821 523,998
Commercial mortgage backed securities:
Government agency mortgage backed securities 17,011 13,582 11,204 10,247
Government agency collateralized mortgage obligations 45,655 39,455 214,617 189,488
Other debt securities 64,344 59,013 10,129 9,068
$ 1,353,534 $ 1,218,656 $ 1,780,914 $ 1,569,242

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~The following tables present the age of gross unrealized losses and fair value by investment category for which an allowance for credit losses has not been recorded 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:
September 30, 2022
Obligations of other U.S. Government agencies and corporations 5 $ 164,520 $ (5,480) — $ — $ — 5 $ 164,520 $ (5,480)
Obligations of states and political subdivisions 95 100,822 (8,433) 11 31,571 (6,202) 106 132,393 (14,635)
Residential mortgage backed securities:
Government agency mortgage backed securities 104 291,428 (28,600) 22 176,036 (30,581) 126 467,464 (59,181)
Government agency collateralized mortgage obligations 28 248,142 (39,982) 24 275,856 (62,841) 52 523,998 (102,823)
Commercial mortgage backed securities:
Government agency mortgage backed securities 4 10,247 (957) — — — 4 10,247 (957)
Government agency collateralized mortgage obligations 18 119,176 (11,340) 11 70,312 (13,789) 29 189,488 (25,129)
Other debt securities 32 70,317 (3,571) — — — 32 70,317 (3,571)
Total 286 $ 1,004,652 $ (98,363) 68 $ 553,775 $ (113,413) 354 $ 1,558,427 $ (211,776)
December 31, 2021
Obligations of states and political subdivisions 8 $ 34,303 $ (216) 3 $ 3,892 $ (53) 11 $ 38,195 $ (269)
Residential mortgage backed securities:
Government agency mortgage backed securities 41 727,546 (6,312) 1 12,305 (504) 42 739,851 (6,816)
Government agency collateralized mortgage obligations 49 966,126 (20,371) — — — 49 966,126 (20,371)
Commercial mortgage backed securities:
Government agency mortgage backed securities 1 1,791 (1) 1 432 — 2 2,223 (1)
Government agency collateralized mortgage obligations 21 160,919 (3,072) 2 9,005 (347) 23 169,924 (3,419)
Trust preferred securities — — — — — — — — —
Other debt securities 1 8,699 (148) — — — 1 8,699 (148)
Total 121 $ 1,899,384 $ (30,120) 7 $ 25,634 $ (904) 128 $ 1,925,018 $ (31,024)

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Less than 12 Months 12 Months or More Total
# Fair
Value Unrealized
Losses # Fair
Value Unrealized
Losses # Fair
Value Unrealized
Losses
Held to Maturity:
September 30, 2022
Obligations of states and political subdivisions 125 $ 212,242 $ (57,474) 5 $ 16,925 $ (6,128) 130 $ 229,167 $ (63,602)
Residential mortgage backed securities:
Government agency mortgage backed securities 48 272,247 (14,993) 23 197,823 (14,285) 71 470,070 (29,278)
Government agency collateralized mortgage obligations 9 206,711 (12,589) 9 199,658 (14,449) 18 406,369 (27,038)
Commercial mortgage backed securities:
Government agency mortgage backed securities 1 13,582 (3,429) — — — 1 13,582 (3,429)
Government agency collateralized mortgage obligations 3 13,190 (1,522) 6 26,265 (4,678) 9 39,455 (6,200)
Other debt securities 10 60,013 (5,331) — — — 10 60,013 (5,331)
Total 196 $ 777,985 $ (95,338) 43 $ 440,671 $ (39,540) 239 $ 1,218,656 $ (134,878)
December 31, 2021
Obligations of states and political subdivisions 24 $ 62,131 $ (685) — $ — $ — 24 $ 62,131 $ (685)
Residential mortgage backed securities:
Government agency mortgage backed securities 50 53,560 (181) 1 5,354 (17) 51 58,914 (198)
Government agency collateralized mortgage obligations 1 24,740 (92) — — — 1 24,740 (92)
Commercial mortgage backed securities:
Government agency collateralized mortgage obligations 7 39,388 (117) — — — 7 39,388 (117)
Other debt securities 8 21,972 (79) — — — 8 21,972 (79)
Total 90 $ 201,791 $ (1,154) 1 $ 5,354 $ (17) 91 $ 207,145 $ (1,171)

The Company evaluates its investment portfolio for impairment related to credit losses on a quarterly basis. Impairment is assessed at the individual security level. The Company considers an investment security impaired if the fair value of the security is less than its cost or amortized cost basis. If the Company intends to sell the investment security or if the Company does not expect to recover the entire amortized cost basis of the security before the Company is required to sell the security or before the security’s maturity, the security is impaired and written down to fair value with all losses recognized in earnings.

The Company does not intend to sell any 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 at maturity. Furthermore, even though a number of these securities have been in a continuous unrealized loss position for a period longer than twelve months, the Company is collecting principal and interest payments from the respective issuers as scheduled. Based upon its review of securities with unrealized losses as of September 30, 2022, the Company determined that all such losses resulted from factors not deemed credit related. As such, the Company did not record any impairment for the first nine months of 2022.

The allowance for credit losses on held to maturity securities was $32 at September 30, 2022 and December 31, 2021. 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 agencies. As of September 30, 2022, 99.99% of the amortized cost of debt securities held to maturity were rated A or higher by the ratings agencies.

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~Note 3 – Non Purchased Loans~~

~~(In Thousands, Except Number of Loans)~~

~~For purposes of this Note 3, all references to “loans” mean non purchased loans excluding loans held for sale.~~

~~The following is a summary of non purchased loans and leases as of the dates presented:~~

September 30,
2022 December 31, 2021
Commercial, financial, agricultural(1)
$ 1,435,275 $ 1,332,962
Lease financing 108,517 80,192
Real estate – construction:
Residential 359,367 300,988
Commercial 848,941 798,914
Total real estate – construction 1,208,308 1,099,902
Real estate – 1-4 family mortgage:
Primary 2,041,885 1,682,050
Home equity 456,765 423,108
Rental/investment 306,165 268,245
Land development 151,986 135,070
Total real estate – 1-4 family mortgage 2,956,801 2,508,473
Real estate – commercial mortgage:
Owner-occupied 1,368,196 1,329,219
Non-owner occupied 2,963,631 2,446,370
Land development 120,026 110,395
Total real estate – commercial mortgage 4,451,853 3,885,984
Installment loans to individuals 104,246 107,565
Gross loans 10,265,000 9,015,078
Unearned income (5,160) (4,067)
Loans, net of unearned income $ 10,259,840 $ 9,011,011

~~(1)Includes Paycheck Protection Program (“PPP”) loans of $5,476 and $58,391 as of September 30, 2022 and December 31, 2021, respectively.~~

~~Past Due and Nonaccrual Loans~~

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 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 status regardless of whether or not such loans are considered past due. For loans that are placed on nonaccrual status or charged-off, all interest accrued for the current year but not collected is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~The following tables provide an aging of past due accruing and nonaccruing loans, segregated by class, as of the dates presented:~~

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
September 30, 2022
Commercial, financial, agricultural $ 10,754 $ 64 $ 1,423,095 $ 1,433,913 $ — $ 934 $ 428 $ 1,362 $ 1,435,275
Lease financing — — 108,517 108,517 — — — — 108,517
Real estate – construction:
Residential 179 — 358,956 359,135 153 79 — 232 359,367
Commercial 507 — 848,433 848,940 — 1 — 1 848,941
Total real estate – construction 686 — 1,207,389 1,208,075 153 80 — 233 1,208,308
Real estate – 1-4 family mortgage:
Primary 6,207 29 2,016,242 2,022,478 2,730 10,105 6,572 19,407 2,041,885
Home equity 2,116 — 453,351 455,467 119 636 543 1,298 456,765
Rental/investment 542 44 304,407 304,993 — 587 585 1,172 306,165
Land development 57 — 150,481 150,538 100 1,302 46 1,448 151,986
Total real estate – 1-4 family mortgage 8,922 73 2,924,481 2,933,476 2,949 12,630 7,746 23,325 2,956,801
Real estate – commercial mortgage:
Owner-occupied 1,041 — 1,361,701 1,362,742 — 3,534 1,920 5,454 1,368,196
Non-owner occupied 256 — 2,951,655 2,951,911 — — 11,720 11,720 2,963,631
Land development 397 — 119,572 119,969 — 17 40 57 120,026
Total real estate – commercial mortgage 1,694 — 4,432,928 4,434,622 — 3,551 13,680 17,231 4,451,853
Installment loans to individuals 605 — 103,460 104,065 13 64 104 181 104,246
Unearned income — — (5,160) (5,160) — — — — (5,160)
Loans, net of unearned income $ 22,661 $ 137 $ 10,194,710 $ 10,217,508 $ 3,115 $ 17,259 $ 21,958 $ 42,332 $ 10,259,840

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

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
December 31, 2021
Commercial, financial, agricultural $ 3,325 $ 103 $ 1,323,774 $ 1,327,202 $ 1,669 $ 2,665 $ 1,426 $ 5,760 $ 1,332,962
Lease financing — — 80,181 80,181 — 11 — 11 80,192
Real estate – construction:
Residential 1,077 — 299,911 300,988 — — — — 300,988
Commercial — — 798,914 798,914 — — — — 798,914
Total real estate – construction 1,077 — 1,098,825 1,099,902 — — — — 1,099,902
Real estate – 1-4 family mortgage:
Primary 14,785 389 1,652,940 1,668,114 1,920 8,195 3,821 13,936 1,682,050
Home equity 1,468 — 420,695 422,163 182 546 217 945 423,108
Rental/investment 401 445 266,353 267,199 — 771 275 1,046 268,245
Land development 431 — 134,382 134,813 — 65 192 257 135,070
Total real estate – 1-4 family mortgage 17,085 834 2,474,370 2,492,289 2,102 9,577 4,505 16,184 2,508,473
Real estate – commercial mortgage:
Owner-occupied 720 36 1,325,776 1,326,532 163 822 1,702 2,687 1,329,219
Non-owner occupied 260 89 2,440,513 2,440,862 — — 5,508 5,508 2,446,370
Land development 476 — 109,575 110,051 — 292 52 344 110,395
Total real estate – commercial mortgage 1,456 125 3,875,864 3,877,445 163 1,114 7,262 8,539 3,885,984
Installment loans to individuals 978 12 106,318 107,308 30 95 132 257 107,565
Unearned income — — (4,067) (4,067) — — — — (4,067)
Loans, net of unearned income $ 23,921 $ 1,074 $ 8,955,265 $ 8,980,260 $ 3,964 $ 13,462 $ 13,325 $ 30,751 $ 9,011,011

Restructured loans not performing in accordance with their restructured terms that are either contractually 90 days or more past due or placed on nonaccrual status are reported as nonperforming loans. There were no restructured loans contractually 90 days past due or more and still accruing at September 30, 2022 or September 30, 2021. The outstanding balance of restructured loans on nonaccrual status was $14,186 and $12,411 at September 30, 2022 and September 30, 2021, respectively.

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~Restructured Loans~~

Restructured loans are those for which concessions have been granted to the borrower due to a deterioration of the borrower’s financial condition and which are performing in accordance with the new terms. Such concessions may include reduction in interest rates or deferral of interest or principal payments. In evaluating whether to restructure a loan, management analyzes the long-term financial condition of the borrower, including guarantor and collateral support, to determine whether the proposed concessions will increase the likelihood of repayment of principal and interest.

The tables below illustrate the impact of modifications classified as restructured loans which were made during the periods presented and held on the Consolidated Balance Sheets at the respective period end.

Number of
Loans Pre-
Modification
Amortized
Cost Post-
Modification
Amortized
Cost
Three months ended September 30, 2022
Real estate – 1-4 family mortgage:
Primary 3 $ 436 $ 442
Total 3 $ 436 $ 442
Three months ended September 30, 2021
Commercial, financial, agricultural 1 $ 30 $ 30
Real estate – 1-4 family mortgage:
Primary 11 1,518 1,538
Total 12 $ 1,548 $ 1,568

Number of
Loans Pre-
Modification
Amortized
Cost Post-
Modification
Amortized
Cost
Nine months ended September 30, 2022
Real estate – 1-4 family mortgage:
Primary 15 $ 2,146 $ 2,168
Real estate – commercial mortgage:
Owner-occupied 1 246 246
Non-owner occupied 1 6,500 6,500
Total real estate – commercial mortgage 2 6,746 6,746
Total 17 $ 8,892 $ 8,914
Nine months ended September 30, 2021
Commercial, financial, agricultural 7 $ 5,258 $ 5,258
Real estate – 1-4 family mortgage:
Primary 23 3,321 3,350
Real estate – commercial mortgage:
Non-owner occupied 1 837 810
Total 31 $ 9,416 $ 9,418

~~With respect~~At March 31, 2023 and December 31, 2022, securities with a carrying value of $879,751 and $824,417, respectively, were pledged to ~~loans that~~secure government, public and trust deposits. Securities with a carrying value of $15,549 and $18,184 were ~~restructured during the nine months ended September 30,~~pledged as collateral for short-term borrowings and derivative instruments at March 31, 2023 and December 31, 2022, ~~$258 have subsequently defaulted as~~respectively.

The amortized cost and fair value of ~~the date of this report. With respect to loans that were restructured during the nine months ended September 30, 2021, none have subsequently defaulted as of the date of this report.~~securities at March 31, 2023 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.

188

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

~~Changes in~~


	Held to Maturity				Available for Sale
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	150	$	150	$	10,205	$	10,201
Due after one year through five years	3,323		3,174		231,194		226,806
Due after five years through ten years	63,319		56,205		90,554		85,065
Due after ten years	224,191		192,771		51,463		47,748
Residential mortgage backed securities:
Government agency mortgage backed securities	470,833		451,177		487,834		442,099
Government agency collateralized mortgage obligations	415,243		389,913		589,560		494,516
Commercial mortgage backed securities:
Government agency mortgage backed securities	17,001		14,070		11,128		10,228
Government agency collateralized mortgage obligations	45,144		38,823		207,032		182,796
Other debt securities	61,068		57,796		9,281		8,448

	$	1,300,272	$	1,204,079	$	1,688,251	$	1,507,907

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

The following tables present the ~~Company’s restructured loans are set forth in~~age of gross unrealized losses and fair value by investment category for which an allowance for credit losses has not been recorded as of the ~~table below:~~dates presented:

Number of
Loans Amortized Cost
Totals at January 1, 2022 97 $ 14,650
Additional advances or loans with concessions 17 8,944
Reclassified as performing restructured loan 3 1,226
Reductions due to:
Reclassified as nonperforming (12) (1,845)
Paid in full (13) (1,907)
Charge-offs — —
Transfer to other real estate owned — —
Principal paydowns — (416)
Lapse of concession period — —
Totals at September 30, 2022 92 $ 20,652


	Less than 12 Months					12 Months or More					Total
	#	Fair Value		Unrealized Losses		#	Fair Value		Unrealized Losses		#	Fair Value		Unrealized Losses
Available for Sale:
March 31, 2023
Obligations of other U.S. Government agencies and corporations	5	$	165,890	$	(4,110)	—	$	—	$	—	5	$	165,890	$	(4,110)
Obligations of states and political subdivisions	39	38,653		(248)		41	81,072		(6,618)		80	119,725		(6,866)
Residential mortgage backed securities:
Government agency mortgage backed securities	63	128,869		(4,799)		62	309,322		(41,013)		125	438,191		(45,812)
Government agency collateralized mortgage obligations	4	30,958		(728)		48	463,558		(94,316)		52	494,516		(95,044)
Commercial mortgage backed securities:
Government agency mortgage backed securities	1	395		(1)		3	9,833		(899)		4	10,228		(900)
Government agency collateralized mortgage obligations	7	33,579		(836)		28	149,217		(23,400)		35	182,796		(24,236)

Other debt securities	15	35,768		(1,177)		9	23,608		(2,668)		24	59,376		(3,845)
Total	134	$	434,112	$	(11,899)	191	$	1,036,610	$	(168,914)	325	$	1,470,722	$	(180,813)
December 31, 2022
Obligations of other U.S. Government agencies and corporations	5	$	164,660	$	(5,340)	—	$	—	$	—	5	$	164,660	$	(5,340)
Obligations of states and political subdivisions	84	$	96,939	$	(4,869)	11	$	33,038	$	(4,499)	95	$	129,977	$	(9,368)
Residential mortgage backed securities:
Government agency mortgage backed securities	97	214,516		(15,115)		29	237,970		(36,921)		126	452,486		(52,036)
Government agency collateralized mortgage obligations	16	109,753		(8,552)		36	391,416		(95,312)		52	501,169		(103,864)
Commercial mortgage backed securities:
Government agency mortgage backed securities	4	10,114		(1,053)		—	—		—		4	10,114		(1,053)
Government agency collateralized mortgage obligations	16	67,026		(3,828)		21	118,821		(21,760)		37	185,847		(25,588)

Other debt securities	25	63,423		(3,167)		1	7,412		(883)		26	70,835		(4,050)

Total	247	$	726,431	$	(41,924)	98	$	788,657	$	(159,375)	345	$	1,515,088	$	(201,299)

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


	Less than 12 Months					12 Months or More					Total
	#	Fair Value		Unrealized Losses		#	Fair Value		Unrealized Losses		#	Fair Value		Unrealized Losses
Held to Maturity:
March 31, 2023
Obligations of states and political subdivisions	1	$	440	$	—	127	$	247,694	$	(38,774)	128	$	248,134	$	(38,774)
Residential mortgage backed securities:
Government agency mortgage backed securities	2	42,422		(751)		68	408,755		(18,905)		70	451,177		(19,656)
Government agency collateralized mortgage obligations	2	51,648		(1,622)		16	338,265		(23,708)		18	389,913		(25,330)
Commercial mortgage backed securities:
Government agency mortgage backed securities	—	—		—		1	14,069		(2,931)		1	14,069		(2,931)
Government agency collateralized mortgage obligations	2	7,656		(623)		7	31,167		(5,698)		9	38,823		(6,321)
Other debt securities	1	23,156		(625)		9	34,639		(2,647)		10	57,795		(3,272)
Total	8	$	125,322	$	(3,621)	228	$	1,074,589	$	(92,663)	236	$	1,199,911	$	(96,284)
December 31, 2022
Obligations of states and political subdivisions	105	$	191,442	$	(35,871)	24	$	49,697	$	(12,454)	129	$	241,139	$	(48,325)
Residential mortgage backed securities:
Government agency mortgage backed securities	8	94,258		(4,186)		62	364,870		(20,246)		70	459,128		(24,432)
Government agency collateralized mortgage obligations	4	98,912		(5,479)		14	293,698		(25,227)		18	392,610		(30,706)
Commercial mortgage backed securities:
Government agency mortgage backed securities	1	13,745		(3,261)		—	—		—		1	13,745		(3,261)
Government agency collateralized mortgage obligations	2	7,651		(626)		7	31,220		(5,933)		9	38,871		(6,559)
Other debt securities	2	42,567		(2,013)		8	16,042		(2,253)		10	58,609		(4,266)
Total	122	$	448,575	$	(51,436)	115	$	755,527	$	(66,113)	237	$	1,204,102	$	(117,549)

The Company does not currently intend to sell any 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 at maturity. Furthermore, even though a number of these securities have been in a continuous unrealized loss position for a period longer than twelve months, the Company is collecting principal and interest payments from the respective issuers as scheduled. Based upon its review of securities with unrealized losses as of March 31, 2023, the Company determined that all such losses resulted from factors not deemed credit related. As such, the Company did not record any impairment for the first three months of 2023.

The allowance for credit losses ~~attributable~~on held to ~~restructured loans~~maturity securities was ~~$834~~$32 at March 31, 2023 and ~~$260 at September 30, 2022 and September 30, 2021, respectively.~~December 31, 2022. 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 agencies. As of March 31, 2023, 99.99% of the amortized cost of debt securities held to maturity were rated A or higher by the ratings agencies.

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 3 – Loans

(In Thousands, Except Number of Loans)

For purposes of this Note 3, all references to “loans” mean loans excluding loans held for sale.

The following is a summary of loans and leases as of the dates presented:


	March 31, 2023		December 31, 2022
Commercial, financial, agricultural	$	1,740,778	$	1,673,883
Lease financing	128,274		122,167
Real estate – construction:
Residential	333,439		355,500
Commercial	1,090,913		974,837
Total real estate – construction	1,424,352		1,330,337
Real estate – 1-4 family mortgage:
Primary	2,288,592		2,222,856
Home equity	497,925		501,906
Rental/investment	344,705		334,382
Land development	147,758		157,119
Total real estate – 1-4 family mortgage	3,278,980		3,216,263
Real estate – commercial mortgage:
Owner-occupied	1,521,327		1,539,296
Non-owner occupied	3,447,217		3,452,910
Land development	117,269		125,857
Total real estate – commercial mortgage	5,085,813		5,118,063
Installment loans to individuals	115,356		124,745
Gross loans	11,773,553		11,585,458
Unearned income	(7,128)		(7,154)
Loans, net of unearned income	$	11,766,425	$	11,578,304

Past Due and Nonaccrual Loans

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

The following tables provide an aging of past due accruing and nonaccruing loans, segregated by class, as of the dates presented:


	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
March 31, 2023
Commercial, financial, agricultural	$	1,978	$	—	$	1,727,418	$	1,729,396	$	13	$	2,552	$	8,817	$	11,382	$	1,740,778
Lease financing	—		—		128,274		128,274		—		—		—		—		128,274
Real estate – construction:
Residential	445		—		332,842		333,287		—		—		152		152		333,439
Commercial	—		—		1,090,913		1,090,913		—		—		—		—		1,090,913
Total real estate – construction	445		—		1,423,755		1,424,200		—		—		152		152		1,424,352
Real estate – 1-4 family mortgage:
Primary	22,507		—		2,231,330		2,253,837		11,647		8,151		14,957		34,755		2,288,592
Home equity	2,335		—		493,312		495,647		109		994		1,175		2,278		497,925
Rental/investment	780		1,738		341,076		343,594		744		87		280		1,111		344,705
Land development	27		17		147,711		147,755		—		3		—		3		147,758
Total real estate – 1-4 family mortgage	25,649		1,755		3,213,429		3,240,833		12,500		9,235		16,412		38,147		3,278,980
Real estate – commercial mortgage:
Owner-occupied	6,047		16,724		1,494,891		1,517,662		126		2,159		1,380		3,665		1,521,327
Non-owner occupied	15,688		—		3,428,566		3,444,254		—		2,963		—		2,963		3,447,217
Land development	275		185		116,729		117,189		—		—		80		80		117,269
Total real estate – commercial mortgage	22,010		16,909		5,040,186		5,079,105		126		5,122		1,460		6,708		5,085,813
Installment loans to individuals	910		—		114,209		115,119		31		49		157		237		115,356
Unearned income	—		—		(7,128)		(7,128)		—		—		—		—		(7,128)
Loans, net of unearned income	$	50,992	$	18,664	$	11,640,143	$	11,709,799	$	12,670	$	16,958	$	26,998	$	56,626	$	11,766,425

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


	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
December 31, 2022
Commercial, financial, agricultural	$	1,303	$	69	$	1,660,037	$	1,661,409	$	18	$	2,373	$	10,083	$	12,474	$	1,673,883
Lease financing	—		—		122,167		122,167		—		—		—		—		122,167
Real estate – construction:
Residential	49		—		355,374		355,423		—		—		77		77		355,500
Commercial	8,525		—		966,312		974,837		—		—		—		—		974,837
Total real estate – construction	8,574		—		1,321,686		1,330,260		—		—		77		77		1,330,337
Real estate – 1-4 family mortgage:
Primary	28,198		—		2,164,582		2,192,780		6,015		12,503		11,558		30,076		2,222,856
Home equity	5,376		—		494,621		499,997		450		754		705		1,909		501,906
Rental/investment	720		38		332,648		333,406		20		331		625		976		334,382
Land development	174		—		156,863		157,037		46		36		—		82		157,119
Total real estate – 1-4 family mortgage	34,468		38		3,148,714		3,183,220		6,531		13,624		12,888		33,043		3,216,263
Real estate – commercial mortgage:
Owner-occupied	8,557		219		1,525,240		1,534,016		1,495		2,244		1,541		5,280		1,539,296
Non-owner occupied	3,521		—		3,444,047		3,447,568		5,304		—		38		5,342		3,452,910
Land development	279		—		125,507		125,786		—		40		31		71		125,857
Total real estate – commercial mortgage	12,357		219		5,094,794		5,107,370		6,799		2,284		1,610		10,693		5,118,063
Installment loans to individuals	2,001		5		122,481		124,487		38		100		120		258		124,745
Unearned income	—		—		(7,154)		(7,154)		—		—		—		—		(7,154)
Loans, net of unearned income	$	58,703	$	331	$	11,462,725	$	11,521,759	$	13,386	$	18,381	$	24,778	$	56,545	$	11,578,304

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, or a term extension, excluding covenant waivers and modification of contingent acceleration clauses are required to be disclosed in accordance with ASU 2022-02. The amortized cost of these modifications, all of which were in the form of interest rate reductions, totaled $1,184 during the first quarter of 2023, of which $1,029 and $155 were Real estate - commercial mortgage, non-owner occupied and Real estate - commercial mortgage, owner-occupied, respectively. These modifications represent an immaterial percentage of total loans. For modified loans in the Real estate - commercial mortgage, non-owner occupied class, the weighted average interest rate at modification was 6.67% and was reduced to 6.55%. For modified loans in the Real estate - commercial mortgage, owner occupied class, the weighted average interest rate at modification was 5.43% and was reduced to 4.75%. These loan modifications were current and accruing at March 31, 2023, and had no ~~restructured loans with remaining availability under commitments to lend additional funds at either September 30, 2022~~unused commitments. Upon the Company's determination that a modified loan has been subsequently deemed uncollectible, the loan, or ~~September 30, 2021.~~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 Note 4, “Allowance for Credit Losses,” for more information on the allowance for credit losses.

Credit Quality

For loans with a commercial purpose, internal risk-rating grades are assigned by lending, credit administration or loan review personnel, based on an analysis of the financial and collateral strength and other credit attributes underlying each loan. 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 110 and 9,95, with 110 being loans with the least credit risk. Loans within the “Pass” grade ~~(reserved for loans~~(those with a risk rating between 110 and ~~4B)~~60) 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 of ~~4E)~~70) represents a loan where a significant adverse risk-modifying action is anticipated in the near term and, if left uncorrected, could result in deterioration of the credit quality of the loan. Loans that

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

migrate toward the “Substandard” grade (those with a risk rating between 580 and 9)95) generally have a higher risk of loss and therefore a higher risk factor applied to those related loan balances.

The following tables present the Company’s loan portfolio by year of origination and internal risk-rating grades as of the dates presented:


		Term Loans Amortized Cost Basis by Origination Year																			Term Loans Amortized Cost Basis by Origination Year
		2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans			2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
September 30, 2022
March 31, 2023																				March 31, 2023
Commercial, Financial, Agricultural	Commercial, Financial, Agricultural	$	278,691	$	229,188	$	157,408	$	65,049	$	26,542	$	13,316	$	626,010	$	2,961	$	1,399,165	Commercial, Financial, Agricultural	$	116,077	$	368,138	$	210,939	$	131,648	$	72,135	$	92,677	$	734,968	$	7,549	$	1,734,131
Pass	Pass	277,634		228,252		150,963		64,457		24,154		13,278		617,768		2,246		1,378,752		Pass	116,027		361,587		210,444		130,659		71,369		80,240		723,341		6,525		1,700,192
Special Mention	Special Mention	594		—		—		162		256		—		6,993		—		8,005		Special Mention	—		138		118		937		128		636		9,062		76		11,095
Substandard	Substandard	463		936		6,445		430		2,132		38		1,249		715		12,408		Substandard	50		6,413		377		52		638		11,801		2,565		948		22,844

Lease Financing Receivables	Lease Financing Receivables	$	44,088	$	20,889	$	19,530	$	11,785	$	5,208	$	1,857	$	—	$	—	$	103,357	Lease Financing Receivables	$	12,933	$	59,874	$	16,481	$	17,419	$	9,122	$	5,317	$	—	$	—	$	121,146
Pass	Pass	40,708		20,889		16,898		9,982		3,682		1,462		—		—		93,621		Pass	12,933		56,812		16,481		15,108		8,069		3,943		—		—		113,346
Special Mention	Special Mention	—		—		—		—		—		395		—		—		395		Special Mention	—		—		—		—		—		324		—		—		324
Substandard	Substandard	3,380		—		2,632		1,803		1,526		—		—		—		9,341		Substandard	—		3,062		—		2,311		1,053		1,050		—		—		7,476

Real Estate - Construction	Real Estate - Construction	$	447,899	$	459,751	$	122,418	$	47,829	$	—	$	—	$	18,516	$	—	$	1,096,413	Real Estate - Construction	$	71,159	$	599,389	$	505,187	$	100,439	$	—	$	1,885	$	18,675	$	—	$	1,296,734
Residential	Residential	198,849		42,847		593		—		—		—		5,183		—		247,472		Residential	54,092		140,184		7,138		584		—		379		3,444		—		205,821
Pass	Pass	198,849		42,694		593		—		—		—		5,183		—		247,319		Pass	53,845		135,551		7,138		584		—		379		3,444		—		200,941
Special Mention	Special Mention	—		—		—		—		—		—		—		—		—		Special Mention	247		4,091		—		—		—		—		—		—		4,338
Substandard	Substandard	—		153		—		—		—		—		—		—		153		Substandard	—		542		—		—		—		—		—		—		542

Commercial																				Commercial	17,067		459,205		498,049		99,855		—		1,506		15,231		—		1,090,913
Pass																				Pass	17,067		459,205		498,049		99,855		—		1,506		15,231		—		1,090,913
Special Mention																				Special Mention	—		—		—		—		—		—		—		—		—
Substandard																				Substandard	—		—		—		—		—		—		—		—		—

Real Estate - 1-4 Family Mortgage																				Real Estate - 1-4 Family Mortgage	$	38,818	$	211,413	$	134,661	$	47,942	$	22,490	$	54,820	$	25,233	$	2,200	$	537,577
Primary																				Primary	1,043		11,486		7,147		4,860		2,340		11,971		4,003		1,000		43,850
Pass																				Pass	857		11,229		6,839		4,860		2,327		11,473		4,003		1,000		42,588
Special Mention																				Special Mention	186		—		—		—		—		47		—		—		233
Substandard																				Substandard	—		257		308		—		13		451		—		—		1,029

Home Equity																				Home Equity	745		189		1,079		—		37		31		14,323		118		16,522
Pass																				Pass	745		189		1,079		—		37		31		14,291		—		16,372
Special Mention																				Special Mention	—		—		—		—		—		—		32		—		32
Substandard																				Substandard	—		—		—		—		—		—		—		118		118

Rental/Investment																				Rental/Investment	19,615		135,062		86,466		42,566		19,930		34,078		5,773		1,082		344,572
Pass																				Pass	19,377		134,639		86,253		40,136		18,525		32,240		5,773		721		337,664
Special Mention																				Special Mention	51		229		—		—		—		173		—		—		453
Substandard																				Substandard	187		194		213		2,430		1,405		1,665		—		361		6,455

Land Development																				Land Development	17,415		64,676		39,969		516		183		8,740		1,134		—		132,633
Pass																				Pass	17,374		64,676		39,969		512		183		8,643		1,134		—		132,491
Special Mention																				Special Mention	—		—		—		—		—		—		—		—		—
Substandard																				Substandard	41		—		—		4		—		97		—		—		142

Real Estate - Commercial Mortgage																				Real Estate - Commercial Mortgage	$	106,196	$	1,609,693	$	1,008,812	$	718,231	$	485,850	$	1,007,547	$	110,736	$	24,977	$	5,072,042
Owner-Occupied																				Owner-Occupied	33,207		314,821		317,958		233,070		173,009		395,505		50,089		3,538		1,521,197
Pass																				Pass	33,207		302,753		314,593		230,140		170,149		373,294		40,485		3,253		1,467,874
Special Mention																				Special Mention	—		313		3,035		807		305		837		—		—		5,297
Substandard																				Substandard	—		11,755		330		2,123		2,555		21,374		9,604		285		48,026

Non-Owner Occupied																				Non-Owner Occupied	66,313		1,242,726		673,257		479,353		306,706		602,322		55,265		21,248		3,447,190

1916

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


		Term Loans Amortized Cost Basis by Origination Year																			Term Loans Amortized Cost Basis by Origination Year
		2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans			2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans

Commercial		249,050		416,904		121,825		47,829		—		—		13,333		—		848,941
Pass		249,050		416,904		121,825		47,829		—		—		13,333		—		848,941
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—

Real Estate - 1-4 Family Mortgage		$	203,241	$	155,577	$	52,387	$	25,732	$	18,635	$	14,716	$	29,166	$	733	$	500,187
Primary		13,310		9,906		6,089		2,513		2,959		2,329		5,781		108		42,995
Pass		11,071		9,906		6,089		2,498		2,959		2,329		5,781		108		40,741
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		2,239		—		—		15		—		—		—		—		2,254

Home Equity		228		1,201		—		39		121		—		15,032		8		16,629
Pass		228		1,201		—		39		121		—		15,032		8		16,629
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—

Rental/Investment		111,564		90,875		44,333		22,974		15,408		12,311		7,755		617		305,837
Pass		111,456		90,708		44,311		22,065		15,256		11,644		7,472		584		303,496
Special Mention		—		—		—		—		—		33		—		—		33
Substandard		108		167		22		909		152		634		283		33		2,308

Land Development		78,139		53,595		1,965		206		147		76		598		—		134,726
Pass		77,138		53,595		1,664		206		147		76		598		—		133,424
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		1,001		—		301		—		—		—		—		—		1,302

Real Estate - Commercial Mortgage		$	1,218,578	$	1,065,547	$	797,002	$	558,703	$	252,272	$	424,024	$	107,234	$	15,780	$	4,439,140
Owner-Occupied		259,980		317,839		264,207		178,756		124,945		173,537		45,455		3,345		1,368,064
Pass		259,492		314,960		261,115		177,213		117,283		158,319		45,197		3,345		1,336,924
Special Mention		—		1,157		1,024		327		—		—		—		—		2,508
Substandard		488		1,722		2,068		1,216		7,662		15,218		258		—		28,632

Non-Owner Occupied		912,598		718,884		521,624		373,079		122,806		248,669		53,702		12,240		2,963,602
Pass	Pass	912,363		709,652		521,624		359,844		105,306		179,055		53,702		12,240		2,853,786		Pass	66,313		1,239,253		670,786		471,954		282,890		507,750		55,265		12,063		3,306,274
Special Mention	Special Mention	—		—		—		11,266		17,500		24,294		—		—		53,060		Special Mention	—		501		2,323		7,399		7,014		25,784		—		—		43,021
Substandard	Substandard	235		9,232		—		1,969		—		45,320		—		—		56,756		Substandard	—		2,972		148		—		16,802		68,788		—		9,185		97,895

Land Development	Land Development	46,000		28,824		11,171		6,868		4,521		1,818		8,077		195		107,474		Land Development	6,676		52,146		17,597		5,808		6,135		9,720		5,382		191		103,655
Pass	Pass	46,000		28,783		10,850		6,868		4,445		1,818		8,077		195		107,036		Pass	6,640		52,146		17,558		5,504		6,135		9,197		5,382		191		102,753
Special Mention	Special Mention	—		41		—		—		—		—		—		—		41		Special Mention	—		—		39		—		—		—		—		—		39
Substandard	Substandard	—		—		321		—		76		—		—		—		397		Substandard	36		—		—		304		—		523		—		—		863

Installment loans to individuals	Installment loans to individuals	$	61	$	—	$	—	$	28	$	—	$	—	$	—	$	—	$	89	Installment loans to individuals	$	281	$	—	$	—	$	—	$	18	$	—	$	—	$	—	$	299
Pass	Pass	61		—		—		28		—		—		—		—		89		Pass	281		—		—		—		18		—		—		—		299
Special Mention	Special Mention	—		—		—		—		—		—		—		—		—		Special Mention	—		—		—		—		—		—		—		—		—
Substandard	Substandard	—		—		—		—		—		—		—		—		—		Substandard	—		—		—		—		—		—		—		—		—

Total loans subject to risk rating	Total loans subject to risk rating	$	2,192,558	$	1,930,952	$	1,148,745	$	709,126	$	302,657	$	453,913	$	780,926	$	19,474	$	7,538,351	Total loans subject to risk rating	$	345,464	$	2,848,507	$	1,876,080	$	1,015,679	$	589,615	$	1,162,246	$	889,612	$	34,726	$	8,761,929
Pass	Pass	2,184,050		1,917,544		1,135,932		691,029		273,353		367,981		772,143		18,726		7,360,758		Pass	344,666		2,818,040		1,869,189		999,312		559,702		1,028,696		868,349		23,753		8,511,707
Special Mention	Special Mention	594		1,198		1,024		11,755		17,756		24,722		6,993		—		64,042		Special Mention	484		5,272		5,515		9,143		7,447		27,801		9,094		76		64,832
Substandard	Substandard	7,914		12,210		11,789		6,342		11,548		61,210		1,790		748		113,551		Substandard	314		25,195		1,376		7,224		22,466		105,749		12,169		10,897		185,390


	Term Loans Amortized Cost Basis by Origination Year
	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
December 31, 2022
Commercial, Financial, Agricultural	$	460,604	$	209,964	$	142,790	$	63,164	$	25,099	$	35,142	$	717,422	$	3,522	$	1,657,707
Pass	450,559		209,580		141,712		62,370		21,963		28,014		704,491		2,384		1,621,073
Special Mention	719		—		1,010		383		678		—		11,616		80		14,486
Substandard	9,326		384		68		411		2,458		7,128		1,315		1,058		22,148

Lease Financing Receivables	$	61,424	$	18,379	$	18,318	$	10,628	$	4,557	$	1,707	$	—	$	—	$	115,013
Pass	58,204		18,379		15,846		9,060		3,269		1,353		—		—		106,111
Watch	—		—		—		—		—		354		—		—		354
Substandard	3,220		—		2,472		1,568		1,288		—		—		—		8,548

Real Estate - Construction	$	595,185	$	476,190	$	109,705	$	8,525	$	381	$	6,858	$	13,757	$	424	$	1,211,025
Residential	214,386		16,483		589		—		381		—		3,925		424		236,188
Pass	214,371		16,483		589		—		381		—		3,925		424		236,173
Special Mention	6		—		—		—		—		—		—		—		6
Substandard	9		—		—		—		—		—		—		—		9

Commercial	380,799		459,707		109,116		8,525		—		6,858		9,832		—		974,837
Pass	380,799		459,707		109,116		8,525		—		6,858		9,832		—		974,837
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Term Loans Amortized Cost Basis by Origination Year
2021 2020 2019 2018 2017 Prior Revolving Loans Revolving Loans Converted to Term Total
Loans
December 31, 2021
Commercial, Financial, Agricultural $ 300,748 $ 245,940 $ 122,350 $ 44,533 $ 15,384 $ 11,103 $ 557,628 $ 2,757 $ 1,300,443
Pass 299,731 245,657 120,102 43,042 14,603 8,605 553,541 2,002 1,287,283
Special Mention — 136 1,798 281 605 1,196 651 — 4,667
Substandard 1,017 147 450 1,210 176 1,302 3,436 755 8,493
Real Estate - Construction $ 461,370 $ 371,694 $ 174,369 $ 14,813 $ — $ — $ 3,769 $ 2,428 $ 1,028,443
Residential 210,734 12,598 — — — — 3,769 2,428 229,529
Pass 210,734 12,598 — — — — 3,769 2,428 229,529
Special Mention — — — — — — — — —
Substandard — — — — — — — — —
Commercial 250,636 359,096 174,369 14,813 — — — — 798,914
Pass 250,636 359,096 174,369 14,813 — — — — 798,914
Special Mention — — — — — — — — —
Substandard — — — — — — — — —

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~


		Term Loans Amortized Cost Basis by Origination Year																			Term Loans Amortized Cost Basis by Origination Year
		2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans			2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
Real Estate - 1-4 Family Mortgage	Real Estate - 1-4 Family Mortgage	$	205,137	$	83,038	$	60,240	$	30,044	$	28,340	$	8,846	$	25,534	$	941	$	442,120	Real Estate - 1-4 Family Mortgage	$	233,370	$	141,066	$	48,653	$	24,664	$	25,604	$	35,971	$	26,920	$	1,238	$	537,486
Primary	Primary	15,599		7,698		3,662		5,985		4,150		1,066		4,727		—		42,887		Primary	12,877		7,965		5,068		2,435		4,522		8,723		4,931		106		46,627
Pass	Pass	15,599		7,698		3,496		5,985		4,066		1,057		4,716		—		42,617		Pass	12,616		7,965		5,068		2,421		4,522		8,419		4,931		106		46,048
Special Mention	Special Mention	—		—		—		—		—		—		—		—		—		Special Mention	—		—		—		—		—		51		—		—		51
Substandard	Substandard	—		—		166		—		84		9		11		—		270		Substandard	261		—		—		14		—		253		—		—		528

Home Equity	Home Equity	1,318		—		42		131		—		—		13,615		10		15,116		Home Equity	272		1,187		—		38		5		27		14,485		141		16,155
Pass	Pass	1,318		—		42		131		—		—		13,615		10		15,116		Pass	272		1,187		—		38		5		27		14,485		7		16,021
Special Mention	Special Mention	—		—		—		—		—		—		—		—		—		Special Mention	—		—		—		—		—		—		—		—		—
Substandard	Substandard	—		—		—		—		—		—		—		—		—		Substandard	—		—		—		—		—		—		—		134		134

Rental/Investment	Rental/Investment	111,006		61,801		33,734		23,520		23,890		7,469		5,554		931		267,905		Rental/Investment	138,481		85,711		42,056		21,997		14,785		24,448		5,972		787		334,237
Pass	Pass	110,987		60,855		32,733		23,246		23,708		7,098		5,554		931		265,112		Pass	138,137		85,522		41,604		21,097		14,671		22,899		5,972		482		330,384
Special Mention	Special Mention	—		249		—		—		—		—		—		—		249		Special Mention	231		—		—		—		—		174		—		—		405
Substandard	Substandard	19		697		1,001		274		182		371		—		—		2,544		Substandard	113		189		452		900		114		1,375		—		305		3,448

Land Development	Land Development	77,214		13,539		22,802		408		300		311		1,638		—		116,212		Land Development	81,740		46,203		1,529		194		6,292		2,773		1,532		204		140,467
Pass	Pass	74,818		13,539		22,769		408		300		311		1,638		—		113,783		Pass	80,514		46,203		1,525		194		6,292		2,723		1,532		204		139,187
Special Mention	Special Mention	2,396		—		—		—		—		—		—		—		2,396		Special Mention	1,226		—		—		—		—		—		—		—		1,226
Substandard	Substandard	—		—		33		—		—		—		—		—		33		Substandard	—		—		4		—		—		50		—		—		54

Real Estate - Commercial Mortgage	Real Estate - Commercial Mortgage	$	1,168,118	$	836,549	$	680,506	$	344,089	$	298,644	$	376,652	$	147,446	$	21,644	$	3,873,648	Real Estate - Commercial Mortgage	$	1,624,197	$	1,000,563	$	713,303	$	531,424	$	277,862	$	810,919	$	121,305	$	25,173	$	5,104,746
Owner-Occupied	Owner-Occupied	312,031		305,686		220,057		164,345		140,265		117,767		59,126		9,748		1,329,025		Owner-Occupied	309,792		319,174		239,946		178,137		128,452		302,495		57,869		3,300		1,539,165
Pass	Pass	310,736		304,555		218,447		161,521		134,410		109,577		59,126		8,036		1,306,408		Pass	298,851		314,429		237,058		175,262		122,537		282,657		50,640		3,300		1,484,734
Special Mention	Special Mention	1,210		1,131		—		—		1,733		328		—		1,712		6,114		Special Mention	9,640		3,047		815		1,670		—		672		4,808		—		20,652
Substandard	Substandard	85		—		1,610		2,824		4,122		7,862		—		—		16,503		Substandard	1,301		1,698		2,073		1,205		5,915		19,166		2,421		—		33,779

Non-Owner Occupied	Non-Owner Occupied	809,784		511,803		449,409		173,123		155,175		256,133		79,016		11,896		2,446,339		Non-Owner Occupied	1,256,098		657,121		466,703		346,908		144,872		501,863		57,637		21,680		3,452,882
Pass	Pass	800,348		503,009		436,062		165,843		102,446		242,665		79,016		11,896		2,341,285		Pass	1,252,484		647,937		466,703		322,997		127,358		418,294		57,637		12,142		3,305,552
Special Mention	Special Mention	9,235		8,794		11,356		7,280		33,176		8,024		—		—		77,865		Special Mention	506		—		—		21,961		17,509		8,975		—		—		48,951
Substandard	Substandard	201		—		1,991		—		19,553		5,444		—		—		27,189		Substandard	3,108		9,184		—		1,950		5		74,594		—		9,538		98,379

Land Development	Land Development	46,303		19,060		11,040		6,621		3,204		2,752		9,304		—		98,284		Land Development	58,307		24,268		6,654		6,379		4,538		6,561		5,799		193		112,699
Pass	Pass	46,034		17,030		11,040		6,569		3,204		2,752		9,304		—		95,933		Pass	58,307		24,228		6,342		6,379		4,465		6,067		5,799		193		111,780
Special Mention	Special Mention	44		—		—		—		—		—		—		—		44		Special Mention	—		40		—		—		—		—		—		—		40
Substandard	Substandard	225		2,030		—		52		—		—		—		—		2,307		Substandard	—		—		312		—		73		494		—		—		879

Installment loans to individuals	Installment loans to individuals	$	—	$	—	$	42	$	—	$	—	$	—	$	—	$	—	$	42	Installment loans to individuals	$	—	$	—	$	—	$	24	$	—	$	—	$	—	$	—	$	24
Pass	Pass	—		—		42		—		—		—		—		—		42		Pass	—		—		—		24		—		—		—		—		24
Special Mention	Special Mention	—		—		—		—		—		—		—		—		—		Special Mention	—		—		—		—		—		—		—		—		—
Substandard	Substandard	—		—		—		—		—		—		—		—		—		Substandard	—		—		—		—		—		—		—		—		—

Total loans subject to risk rating	Total loans subject to risk rating	$	2,135,373	$	1,537,221	$	1,037,507	$	433,479	$	342,368	$	396,601	$	734,377	$	27,770	$	6,644,696	Total loans subject to risk rating	$	2,974,780	$	1,846,162	$	1,032,769	$	638,429	$	333,503	$	890,597	$	879,404	$	30,357	$	8,626,001
Pass	Pass	2,120,941		1,524,037		1,019,102		421,558		282,737		372,065		730,279		25,303		6,496,022		Pass	2,945,114		1,831,620		1,025,563		608,367		305,463		777,311		859,244		19,242		8,371,924
Special Mention	Special Mention	12,885		10,310		13,154		7,561		35,514		9,548		651		1,712		91,335		Special Mention	12,328		3,087		1,825		24,014		18,187		10,226		16,424		80		86,171
Substandard	Substandard	1,547		2,874		5,251		4,360		24,117		14,988		3,447		755		57,339		Substandard	17,338		11,455		5,381		6,048		9,853		103,060		3,736		11,035		167,906

The following tables present the performing status of the Company’s loan portfolio not subject to risk rating as of the dates presented:

2218

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


		Term Loans Amortized Cost Basis by Origination Year																			Term Loans Amortized Cost Basis by Origination Year
		2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans			2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
September 30, 2022
March 31, 2023																				March 31, 2023
Commercial, Financial, Agricultural	Commercial, Financial, Agricultural	$	—	$	—	$	—	$	—	$	—	$	16,774	$	19,336	$	—	$	36,110	Commercial, Financial, Agricultural	$	—	$	13	$	—	$	—	$	—	$	6,635	$	—	$	—	$	6,648
Performing Loans	Performing Loans	—		—		—		—		—		16,774		19,336		—		36,110		Performing Loans	—		13		—		—		—		6,635		—		—		6,648
Non-Performing Loans	Non-Performing Loans	—		—		—		—		—		—		—		—		—		Non-Performing Loans	—		—		—		—		—		—		—		—		—

Real Estate - Construction	Real Estate - Construction	$	37,074	$	72,550	$	1,694	$	577	$	—	$	—	$	—	$	—	$	111,895	Real Estate - Construction	$	5,640	$	74,105	$	47,582	$	291	$	—	$	—	$	—	$	—	$	127,618
Residential	Residential	37,074		72,550		1,694		577		—		—		—		—		111,895		Residential	5,640		74,105		47,582		291		—		—		—		—		127,618
Performing Loans	Performing Loans	37,074		72,472		1,694		577		—		—		—		—		111,817		Performing Loans	5,640		73,953		47,582		291		—		—		—		—		127,466
Non-Performing Loans	Non-Performing Loans	—		78		—		—		—		—		—		—		78		Non-Performing Loans	—		152		—		—		—		—		—		—		152

Commercial	Commercial	—		—		—		—		—		—		—		—		—		Commercial	—		—		—		—		—		—		—		—		—
Performing Loans	Performing Loans	—		—		—		—		—		—		—		—		—		Performing Loans	—		—		—		—		—		—		—		—		—
Non-Performing Loans	Non-Performing Loans	—		—		—		—		—		—		—		—		—		Non-Performing Loans	—		—		—		—		—		—		—		—		—

Real Estate - 1-4 Family Mortgage	Real Estate - 1-4 Family Mortgage	$	584,747	$	548,163	$	364,506	$	160,804	$	122,688	$	236,271	$	436,673	$	2,762	$	2,456,614	Real Estate - 1-4 Family Mortgage	$	91,446	$	715,261	$	550,406	$	342,567	$	150,212	$	410,823	$	475,448	$	5,240	$	2,741,403
Primary	Primary	576,169		543,197		362,828		160,212		121,295		235,189		—		—		1,998,890		Primary	90,554		706,700		547,270		341,603		149,663		408,894		—		58		2,244,742
Performing Loans	Performing Loans	575,894		541,053		360,179		157,445		115,494		229,418		—		—		1,979,483		Performing Loans	90,495		704,525		543,912		335,424		145,203		390,530		—		58		2,210,147
Non-Performing Loans	Non-Performing Loans	275		2,144		2,649		2,767		5,801		5,771		—		—		19,407		Non-Performing Loans	59		2,175		3,358		6,179		4,460		18,364		—		—		34,595

Home Equity	Home Equity	—		111		—		—		223		367		436,673		2,762		440,136		Home Equity	—		—		111		—		—		662		475,448		5,182		481,403
Performing Loans	Performing Loans	—		111		—		—		223		298		435,952		2,254		438,838		Performing Loans	—		—		111		—		—		596		474,188		4,230		479,125
Non-Performing Loans	Non-Performing Loans	—		—		—		—		—		69		721		508		1,298		Non-Performing Loans	—		—		—		—		—		66		1,260		952		2,278

Rental/Investment	Rental/Investment	—		—		—		—		—		328		—		—		328		Rental/Investment	—		—		—		—		—		133		—		—		133
Performing Loans	Performing Loans	—		—		—		—		—		155		—		—		155		Performing Loans	—		—		—		—		—		133		—		—		133
Non-Performing Loans	Non-Performing Loans	—		—		—		—		—		173		—		—		173		Non-Performing Loans	—		—		—		—		—		—		—		—		—

Land Development	Land Development	8,578		4,855		1,678		592		1,170		387		—		—		17,260		Land Development	892		8,561		3,025		964		549		1,134		—		—		15,125
Performing Loans	Performing Loans	8,578		4,855		1,678		592		1,170		241		—		—		17,114		Performing Loans	892		8,561		3,025		964		549		1,134		—		—		15,125
Non-Performing Loans	Non-Performing Loans	—		—		—		—		—		146		—		—		146		Non-Performing Loans	—		—		—		—		—		—		—		—		—

Real Estate - Commercial Mortgage	Real Estate - Commercial Mortgage	$	3,764	$	3,992	$	2,883	$	1,348	$	603	$	123	$	—	$	—	$	12,713	Real Estate - Commercial Mortgage	$	1,678	$	4,299	$	3,353	$	2,378	$	1,192	$	871	$	—	$	—	$	13,771
Owner-Occupied	Owner-Occupied	—		—		132		—		—		—		—		—		132		Owner-Occupied	—		—		—		130		—		—		—		—		130
Performing Loans	Performing Loans	—		—		132		—		—		—		—		—		132		Performing Loans	—		—		—		130		—		—		—		—		130
Non-Performing Loans	Non-Performing Loans	—		—		—		—		—		—		—		—		—		Non-Performing Loans	—		—		—		—		—		—		—		—		—

Non-Owner Occupied	Non-Owner Occupied	—		—		29		—		—		—		—		—		29		Non-Owner Occupied	—		—		—		27		—		—		—		—		27
Performing Loans	Performing Loans	—		—		29		—		—		—		—		—		29		Performing Loans	—		—		—		27		—		—		—		—		27
Non-Performing Loans	Non-Performing Loans	—		—		—		—		—		—		—		—		—		Non-Performing Loans	—		—		—		—		—		—		—		—		—

Land Development	Land Development	3,764		3,992		2,722		1,348		603		123		—		—		12,552		Land Development	1,678		4,299		3,353		2,221		1,192		871		—		—		13,614
Performing Loans	Performing Loans	3,764		3,992		2,700		1,348		603		123		—		—		12,530		Performing Loans	1,678		4,254		3,353		2,217		1,192		871		—		—		13,565
Non-Performing Loans	Non-Performing Loans	—		—		22		—		—		—		—		—		22		Non-Performing Loans	—		45		—		4		—		—		—		—		49

Installment loans to individuals	Installment loans to individuals	$	35,560	$	21,583	$	7,661	$	15,827	$	5,621	$	2,260	$	15,613	$	32	$	104,157	Installment loans to individuals	$	10,016	$	35,603	$	12,894	$	5,347	$	12,941	$	24,340	$	13,880	$	36	$	115,057
Performing Loans	Performing Loans	35,535		21,548		7,644		15,787		5,610		2,214		15,613		24		103,975		Performing Loans	9,988		35,581		12,872		5,320		12,901		24,246		13,879		33		114,820
Non-Performing Loans	Non-Performing Loans	25		35		17		40		11		46		—		8		182		Non-Performing Loans	28		22		22		27		40		94		1		3		237

Total loans not subject to risk rating	Total loans not subject to risk rating	$	661,145	$	646,288	$	376,744	$	178,556	$	128,912	$	255,428	$	471,622	$	2,794	$	2,721,489	Total loans not subject to risk rating	$	108,780	$	829,281	$	614,235	$	350,583	$	164,345	$	442,669	$	489,328	$	5,276	$	3,004,497
Performing Loans	Performing Loans	660,845		644,031		374,056		175,749		123,100		249,223		470,901		2,278		2,700,183		Performing Loans	108,693		826,887		610,855		344,373		159,845		424,145		488,067		4,321		2,967,186
Non-Performing Loans	Non-Performing Loans	300		2,257		2,688		2,807		5,812		6,205		721		516		21,306		Non-Performing Loans	87		2,394		3,380		6,210		4,500		18,524		1,261		955		37,311

2319

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


		Term Loans Amortized Cost Basis by Origination Year																			Term Loans Amortized Cost Basis by Origination Year
		2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans			2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
December 31, 2021
December 31, 2022																				December 31, 2022
Commercial, Financial, Agricultural	Commercial, Financial, Agricultural	$	71	$	—	$	—	$	1	$	—	$	8,983	$	23,464	$	—	$	32,519	Commercial, Financial, Agricultural	$	13	$	—	$	—	$	—	$	—	$	16,163	$	—	$	—	$	16,176
Performing Loans	Performing Loans	71		—		—		1		—		8,983		23,464		—		32,519		Performing Loans	13		—		—		—		—		16,163		—		—		16,176
Non-Performing Loans	Non-Performing Loans	—		—		—		—		—		—		—		—		—		Non-Performing Loans	—		—		—		—		—		—		—		—		—

Lease Financing Receivables	Lease Financing Receivables	$	26,301	$	23,270	$	15,504	$	7,713	$	2,169	$	1,168	$	—	$	—	$	76,125	Lease Financing Receivables	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Performing Loans	Performing Loans	26,301		23,270		15,504		7,713		2,167		1,159		—		—		76,114		Performing Loans	—		—		—		—		—		—		—		—		—
Non-Performing Loans	Non-Performing Loans	—		—		—		—		2		9		—		—		11		Non-Performing Loans	—		—		—		—		—		—		—		—		—

Real Estate - Construction	Real Estate - Construction	$	57,283	$	12,561	$	1,615	$	—	$	—	$	—	$	—	$	—	$	71,459	Real Estate - Construction	$	57,570	$	61,245	$	497	$	—	$	—	$	—	$	—	$	—	$	119,312
Residential	Residential	57,283		12,561		1,615		—		—		—		—		—		71,459		Residential	57,570		61,245		497		—		—		—		—		—		119,312
Performing Loans	Performing Loans	57,283		12,561		1,615		—		—		—		—		—		71,459		Performing Loans	57,493		61,245		497		—		—		—		—		—		119,235
Non-Performing Loans	Non-Performing Loans	—		—		—		—		—		—		—		—		—		Non-Performing Loans	77		—		—		—		—		—		—		—		77

Commercial	Commercial	—		—		—		—		—		—		—		—		—		Commercial	—		—		—		—		—		—		—		—		—
Performing Loans	Performing Loans	—		—		—		—		—		—		—		—		—		Performing Loans	—		—		—		—		—		—		—		—		—
Non-Performing Loans	Non-Performing Loans	—		—		—		—		—		—		—		—		—		Non-Performing Loans	—		—		—		—		—		—		—		—		—

Real Estate - 1-4 Family Mortgage	Real Estate - 1-4 Family Mortgage	$	554,483	$	419,252	$	205,014	$	155,535	$	117,619	$	207,381	$	404,293	$	2,776	$	2,066,353	Real Estate - 1-4 Family Mortgage	$	704,214	$	546,256	$	351,213	$	155,549	$	116,951	$	319,567	$	481,254	$	3,773	$	2,678,777
Primary	Primary	542,659		415,863		203,739		153,717		116,689		206,496		—		—		1,639,163		Primary	694,941		541,801		350,205		154,979		115,876		318,364		—		63		2,176,229
Performing Loans	Performing Loans	542,053		414,931		201,273		148,649		114,669		203,416		—		—		1,624,991		Performing Loans	694,221		538,870		345,912		150,821		109,156		307,178		—		63		2,146,221
Non-Performing Loans	Non-Performing Loans	606		932		2,466		5,068		2,020		3,080		—		—		14,172		Non-Performing Loans	720		2,931		4,293		4,158		6,720		11,186		—		—		30,008

Home Equity	Home Equity	111		—		79		225		—		508		404,293		2,776		407,992		Home Equity	—		111		—		—		—		676		481,254		3,710		485,751
Performing Loans	Performing Loans	111		—		79		225		—		435		403,598		2,599		407,047		Performing Loans	—		111		—		—		—		609		480,094		3,026		483,840
Non-Performing Loans	Non-Performing Loans	—		—		—		—		—		73		695		177		945		Non-Performing Loans	—		—		—		—		—		67		1,160		684		1,911

Rental/Investment	Rental/Investment	—		—		99		—		23		218		—		—		340		Rental/Investment	—		—		—		—		—		145		—		—		145
Performing Loans	Performing Loans	—		—		99		—		23		164		—		—		286		Performing Loans	—		—		—		—		—		145		—		—		145
Non-Performing Loans	Non-Performing Loans	—		—		—		—		—		54		—		—		54		Non-Performing Loans	—		—		—		—		—		—		—		—		—

Land Development	Land Development	11,713		3,389		1,097		1,593		907		159		—		—		18,858		Land Development	9,273		4,344		1,008		570		1,075		382		—		—		16,652
Performing Loans	Performing Loans	11,688		3,298		1,065		1,593		832		159		—		—		18,635		Performing Loans	9,257		4,344		1,008		570		1,075		319		—		—		16,573
Non-Performing Loans	Non-Performing Loans	25		91		32		—		75		—		—		—		223		Non-Performing Loans	16		—		—		—		—		63		—		—		79

Real Estate - Commercial Mortgage	Real Estate - Commercial Mortgage	$	5,265	$	3,584	$	2,082	$	800	$	468	$	137	$	—	$	—	$	12,336	Real Estate - Commercial Mortgage	$	4,805	$	3,518	$	2,587	$	1,281	$	691	$	435	$	—	$	—	$	13,317
Owner-Occupied	Owner-Occupied	—		136		58		—		—		—		—		—		194		Owner-Occupied	—		—		131		—		—		—		—		—		131
Performing Loans	Performing Loans	—		136		58		—		—		—		—		—		194		Performing Loans	—		—		131		—		—		—		—		—		131
Non-Performing Loans	Non-Performing Loans	—		—		—		—		—		—		—		—		—		Non-Performing Loans	—		—		—		—		—		—		—		—		—

Non-Owner Occupied	Non-Owner Occupied	—		31		—		—		—		—		—		—		31		Non-Owner Occupied	—		—		28		—		—		—		—		—		28
Performing Loans	Performing Loans	—		31		—		—		—		—		—		—		31		Performing Loans	—		—		28		—		—		—		—		—		28
Non-Performing Loans	Non-Performing Loans	—		—		—		—		—		—		—		—		—		Non-Performing Loans	—		—		—		—		—		—		—		—		—

Land Development	Land Development	5,265		3,417		2,024		800		468		137		—		—		12,111		Land Development	4,805		3,518		2,428		1,281		691		435		—		—		13,158
Performing Loans	Performing Loans	5,265		3,417		2,008		800		468		86		—		—		12,044		Performing Loans	4,805		3,518		2,422		1,281		691		435		—		—		13,152
Non-Performing Loans	Non-Performing Loans	—		—		16		—		—		51		—		—		67		Non-Performing Loans	—		—		6		—		—		—		—		—		6

Installment loans to individuals	Installment loans to individuals	$	44,302	$	15,436	$	23,114	$	7,717	$	1,985	$	1,917	$	13,016	$	36	$	107,523	Installment loans to individuals	$	44,255	$	15,976	$	6,416	$	14,252	$	17,095	$	10,626	$	16,062	$	39	$	124,721
Performing Loans	Performing Loans	44,254		15,360		23,035		7,704		1,958		1,890		13,016		36		107,253		Performing Loans	44,227		15,927		6,389		14,211		17,076		10,532		16,062		35		124,459
Non-Performing Loans	Non-Performing Loans	48		76		79		13		27		27		—		—		270		Non-Performing Loans	28		49		27		41		19		94		—		4		262

Total loans not subject to risk rating	Total loans not subject to risk rating	$	687,705	$	474,103	$	247,329	$	171,766	$	122,241	$	219,586	$	440,773	$	2,812	$	2,366,315	Total loans not subject to risk rating	$	810,857	$	626,995	$	360,713	$	171,082	$	134,737	$	346,791	$	497,316	$	3,812	$	2,952,303
Performing Loans	Performing Loans	687,026		473,004		244,736		166,685		120,117		216,292		440,078		2,635		2,350,573		Performing Loans	810,016		624,015		356,387		166,883		127,998		335,381		496,156		3,124		2,919,960
Non-Performing Loans	Non-Performing Loans	679		1,099		2,593		5,081		2,124		3,294		695		177		15,742		Non-Performing Loans	841		2,980		4,326		4,199		6,739		11,410		1,160		688		32,343

2420

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

The following table represents gross charge-offs by year of origination for the three months ended March 31, 2023:


	2023	2022	2021	2020	2019	Prior	Revolving Loans	Revolving Loans Converted to Term	Total Charge-offs
Commercial, financial, agricultural	—	277	103	—	—	134	15	—	529





Real estate – 1-4 family mortgage:
Primary	—	—	—	—	—	3	—	—	3



Total real estate – 1-4 family mortgage	—	—	—	—	—	3	—	—	3
Real estate – commercial mortgage:
Owner-occupied	—	—	—	—	—	128	—	—	128
Non-owner occupied	—	—	—	2,442	—	2,545	—	—	4,987

Total real estate – commercial mortgage	—	—	—	2,442	—	2,673	—	—	5,115
Installment loans to individuals	—	33	21	26	132	598	—	—	810
Loans, net of unearned income	—	310	124	2,468	132	3,408	15	—	6,457

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 4 – ~~Purchased Loans~~

~~(In Thousands, Except Number of Loans)~~

~~For purposes of this Note 4, all references to “loans” mean purchased loans excluding loans held for sale.~~

~~The following is a summary of purchased loans as of the dates presented:~~

September 30,
2022 December 31, 2021
Commercial, financial, agricultural $ 77,816 $ 90,308
Real estate – construction:
Residential 387 1,287
Commercial 6,361 3,707
Total real estate – construction 6,748 4,994
Real estate – 1-4 family mortgage:
Primary 102,234 134,070
Home equity 42,861 51,496
Rental/investment 16,679 20,229
Land development 9,314 9,978
Total real estate – 1-4 family mortgage 171,088 215,773
Real estate – commercial mortgage:
Owner-occupied 194,756 234,132
Non-owner occupied 356,485 410,577
Land development 13,571 18,344
Total real estate – commercial mortgage 564,812 663,053
Installment loans to individuals 24,700 35,775
Loans $ 845,164 $ 1,009,903

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~Past Due and Nonaccrual Loans~~

The Company’s policies with respect to placing loans on nonaccrual status or charging off loans, and its accounting for interest on any such loans, are described above in Note 3, “Non Purchased Loans.”

~~The following tables provide an aging of past due accruing and nonaccruing loans, segregated by class, as of the dates presented:~~

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
September 30, 2022
Commercial, financial, agricultural $ 379 $ — $ 73,564 $ 73,943 $ — $ 2,059 $ 1,814 $ 3,873 $ 77,816
Real estate – construction:
Residential — — 387 387 — — — — 387
Commercial — — 6,361 6,361 — — — — 6,361
Total real estate – construction — — 6,748 6,748 — — — — 6,748
Real estate – 1-4 family mortgage:
Primary 1,163 — 95,377 96,540 1,359 2,468 1,867 5,694 102,234
Home equity 658 — 41,659 42,317 95 119 330 544 42,861
Rental/investment 26 — 16,629 16,655 — — 24 24 16,679
Land development 62 — 9,252 9,314 — — — — 9,314
Total real estate – 1-4 family mortgage 1,909 — 162,917 164,826 1,454 2,587 2,221 6,262 171,088
Real estate – commercial mortgage:
Owner-occupied 439 1,432 191,217 193,088 33 152 1,483 1,668 194,756
Non-owner occupied — — 356,480 356,480 — — 5 5 356,485
Land development — — 13,535 13,535 — 36 — 36 13,571
Total real estate – commercial mortgage 439 1,432 561,232 563,103 33 188 1,488 1,709 564,812
Installment loans to individuals 715 18 23,865 24,598 1 45 56 102 24,700
Loans, net of unearned income $ 3,442 $ 1,450 $ 828,326 $ 833,218 $ 1,488 $ 4,879 $ 5,579 $ 11,946 $ 845,164

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

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
December 31, 2021
Commercial, financial, agricultural $ 122 $ — $ 82,918 $ 83,040 $ 42 $ 1,618 $ 5,608 $ 7,268 $ 90,308
Real estate – construction:
Residential — — 1,287 1,287 — — — — 1,287
Commercial — — 3,707 3,707 — — — — 3,707
Total real estate – construction — — 4,994 4,994 — — — — 4,994
Real estate – 1-4 family mortgage:
Primary 1,042 36 127,820 128,898 257 2,225 2,690 5,172 134,070
Home equity 149 — 50,573 50,722 — 373 401 774 51,496
Rental/investment 20 — 20,105 20,125 26 — 78 104 20,229
Land development — — 9,978 9,978 — — — — 9,978
Total real estate – 1-4 family mortgage 1,211 36 208,476 209,723 283 2,598 3,169 6,050 215,773
Real estate – commercial mortgage:
Owner-occupied 1,511 323 230,305 232,139 — 289 1,704 1,993 234,132
Non-owner occupied — — 407,639 407,639 — — 2,938 2,938 410,577
Land development — — 18,218 18,218 — — 126 126 18,344
Total real estate – commercial mortgage 1,511 323 656,162 657,996 — 289 4,768 5,057 663,053
Installment loans to individuals 839 8 34,690 35,537 15 11 212 238 35,775
Loans, net of unearned income $ 3,683 $ 367 $ 987,240 $ 991,290 $ 340 $ 4,516 $ 13,757 $ 18,613 $ 1,009,903

There were no restructured loans contractually 90 days past due or more and still accruing at September 30, 2022. There was one restructured loan in the amount of $40 contractually 90 days past due or more and still accruing at September 30, 2021. The outstanding balance of restructured loans on nonaccrual status was $3,029 and $17,726 at September 30, 2022 and September 30, 2021, respectively.

~~Restructured Loans~~

~~An explanation of what constitutes a “restructured loan,” and management’s analysis in determining whether to restructure a loan, are described above in Note 3, “Non Purchased Loans.”~~

Number of
Loans Pre-
Modification
Amortized Cost Post-
Modification
Amortized Cost
Three months ended September 30, 2021
Real estate – 1-4 family mortgage:
Primary 1 $ 164 $ 164
Total 1 $ 164 $ 164

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Number of
Loans Pre-
Modification
Amortized Cost Post-
Modification
Amortized Cost
Nine months ended September 30, 2022
Real estate – 1-4 family mortgage:
Land development 3 $ 98 $ 94
Nine months ended September 30, 2021
Commercial, financial, agricultural 1 $ 135 $ 135
Real estate – 1-4 family mortgage:
Primary 2 1,026 1,026
Total 3 $ 1,161 $ 1,161

~~With respect to loans that were restructured during the nine months ended September 30, 2022 and September 30, 2021, none have subsequently defaulted as of the date of this report.~~

~~Changes in the Company’s restructured loans are set forth in the table below:~~

Number of
Loans Recorded
Investment
Totals at January 1, 2022 38 $ 5,609
Additional advances or loans with concessions 3 206
Reclassified as performing restructured loan 8 4,064
Reductions due to:
Reclassified to nonperforming loans (6) (231)
Paid in full (6) (2,064)
Principal paydowns — (568)
Totals at September 30, 2022 37 $ 7,016

The allowance for credit losses attributable to restructured loans was $37 and $111 at September 30, 2022 and September 30, 2021, respectively. The Company had no remaining availability under commitments to lend additional funds on these restructured loans at September 30, 2022, as compared to $2 in remaining availability at September 30, 2021.

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~Credit Quality~~

A discussion of the Company’s policies regarding internal risk-rating of loans is discussed above in Note 3, “Non Purchased Loans.” The following tables present the Company’s loan portfolio by year of origination and internal risk-rating grades as of the dates presented:

Term Loans Amortized Cost Basis by Origination Year
2022 2021 2020 2019 2018 Prior Revolving Loans Revolving Loans Converted to Term Total
Loans
September 30, 2022
Commercial, Financial, Agricultural $ — $ — $ — $ 993 $ 927 $ 26,235 $ 48,917 $ 744 $ 77,816
Pass — — — 993 378 19,174 47,121 403 68,069
Special Mention — — — — 226 — — — 226
Substandard — — — — 323 7,061 1,796 341 9,521
Real Estate - Construction $ — $ — $ — $ — $ 387 $ 6,361 $ — $ — $ 6,748
Residential — — — — 387 — — — 387
Pass — — — — 387 — — — 387
Special Mention — — — — — — — — —
Substandard — — — — — — — — —
Commercial — — — — — 6,361 — — 6,361
Pass — — — — — 6,361 — — 6,361
Special Mention — — — — — — — — —
Substandard — — — — — — — — —
Real Estate - 1-4 Family Mortgage $ — $ — $ — $ 145 $ 8,721 $ 26,322 $ 335 $ 157 $ 35,680
Primary — — — 33 2,230 7,116 — — 9,379
Pass — — — 33 2,230 6,683 — — 8,946
Special Mention — — — — — 54 — — 54
Substandard — — — — — 379 — — 379
Home Equity — — — — — 30 333 157 520
Pass — — — — — 30 333 — 363
Special Mention — — — — — — — — —
Substandard — — — — — — — 157 157
Rental/Investment — — — 112 308 16,259 — — 16,679
Pass — — — 112 308 15,550 — — 15,970
Special Mention — — — — — — — — —
Substandard — — — — — 709 — — 709
Land Development — — — — 6,183 2,917 2 — 9,102
Pass — — — — 6,183 2,866 2 — 9,051
Special Mention — — — — — — — — —
Substandard — — — — — 51 — — 51

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Term Loans Amortized Cost Basis by Origination Year
2022 2021 2020 2019 2018 Prior Revolving Loans Revolving Loans Converted to Term Total
Loans
Real Estate - Commercial Mortgage $ — $ — $ — $ 319 $ 45,713 $ 499,483 $ 8,923 $ 9,752 $ 564,190
Owner-Occupied — — — — 10,461 177,284 7,011 — 194,756
Pass — — — — 10,461 167,960 7,011 — 185,432
Special Mention — — — — — 595 — — 595
Substandard — — — — — 8,729 — — 8,729
Non-Owner Occupied — — — 319 35,013 309,833 1,568 9,752 356,485
Pass — — — 319 35,008 287,093 1,568 — 323,988
Special Mention — — — — — — — — —
Substandard — — — — 5 22,740 — 9,752 32,497
Land Development — — — — 239 12,366 344 — 12,949
Pass — — — — 239 6,767 344 — 7,350
Special Mention — — — — — 4,966 — — 4,966
Substandard — — — — — 633 — — 633
Installment loans to individuals $ — $ — $ — $ — $ — $ — $ — $ — $ —
Pass — — — — — — — — —
Special Mention — — — — — — — — —
Substandard — — — — — — — — —
Total loans subject to risk rating $ — $ — $ — $ 1,457 $ 55,748 $ 558,401 $ 58,175 $ 10,653 $ 684,434
Pass — — — 1,457 55,194 512,484 56,379 403 625,917
Special Mention — — — — 226 5,615 — — 5,841
Substandard — — — — 328 40,302 1,796 10,250 52,676

Term Loans Amortized Cost Basis by Origination Year
2021 2020 2019 2018 2017 Prior Revolving Loans Revolving Loans Converted to Term Total
Loans
December 31, 2021
Commercial, Financial, Agricultural $ — $ — $ 646 $ 12,199 $ 12,247 $ 25,562 $ 38,328 $ 1,326 $ 90,308
Pass — — 646 11,612 8,918 18,877 37,555 899 78,507
Special Mention — — — 246 — — — — 246
Substandard — — — 341 3,329 6,685 773 427 11,555
Real Estate - Construction $ — $ — $ — $ 601 $ — $ 4,393 $ — $ — $ 4,994
Residential — — — 601 — 686 — — 1,287
Pass — — — 601 — 686 — — 1,287
Special Mention — — — — — — — — —
Substandard — — — — — — — — —
Commercial — — — — — 3,707 — — 3,707
Pass — — — — — 3,707 — — 3,707
Special Mention — — — — — — — — —
Substandard — — — — — — — — —

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Term Loans Amortized Cost Basis by Origination Year
2021 2020 2019 2018 2017 Prior Revolving Loans Revolving Loans Converted to Term Total
Loans
Real Estate - 1-4 Family Mortgage $ — $ — $ 152 $ 10,151 $ 2,781 $ 32,841 $ 1,476 $ 201 $ 47,602
Primary — — 34 2,485 1,367 12,336 161 — 16,383
Pass — — 34 2,485 1,367 9,408 161 — 13,455
Special Mention — — — — — 59 — — 59
Substandard — — — — — 2,869 — — 2,869
Home Equity — — — — — 42 1,087 201 1,330
Pass — — — — — 42 717 — 759
Special Mention — — — — — — — — —
Substandard — — — — — — 370 201 571
Rental/Investment — — 118 804 1,273 17,806 228 — 20,229
Pass — — 118 804 1,273 17,035 77 — 19,307
Special Mention — — — — — 38 — — 38
Substandard — — — — — 733 151 — 884
Land Development — — — 6,862 141 2,657 — — 9,660
Pass — — — 6,862 111 1,249 — — 8,222
Special Mention — — — — — — — — —
Substandard — — — — 30 1,408 — — 1,438
Real Estate - Commercial Mortgage $ — $ — $ 325 $ 50,519 $ 123,254 $ 467,983 $ 5,912 $ 14,324 $ 662,317
Owner-Occupied — — — 13,344 17,621 200,111 3,056 — 234,132
Pass — — — 13,344 13,888 182,779 3,056 — 213,067
Special Mention — — — — 1,553 394 — — 1,947
Substandard — — — — 2,180 16,938 — — 19,118
Non-Owner Occupied — — 325 35,887 103,739 254,080 2,222 14,324 410,577
Pass — — 325 19,510 100,682 222,048 2,222 4,418 349,205
Special Mention — — — 16,370 — 359 — — 16,729
Substandard — — — 7 3,057 31,673 — 9,906 44,643
Land Development — — — 1,288 1,894 13,792 634 — 17,608
Pass — — — 1,288 1,894 7,904 634 — 11,720
Special Mention — — — — — 5,141 — — 5,141
Substandard — — — — — 747 — — 747
Installment loans to individuals $ — $ — $ — $ — $ — $ — $ — $ — $ —
Pass — — — — — — — — —
Special Mention — — — — — — — — —
Substandard — — — — — — — — —
Total loans subject to risk rating $ — $ — $ 1,123 $ 73,470 $ 138,282 $ 530,779 $ 45,716 $ 15,851 $ 805,221
Pass — — 1,123 56,506 128,133 463,735 44,422 5,317 699,236
Special Mention — — — 16,616 1,553 5,991 — — 24,160
Substandard — — — 348 8,596 61,053 1,294 10,534 81,825

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~The following tables present the performing status of the Company’s loan portfolio not subject to risk rating by origination date:~~

Term Loans Amortized Cost Basis by Origination Year
2022 2021 2020 2019 2018 Prior Revolving Loans Revolving Loans Converted to Term Total
Loans
September 30, 2022
Commercial, Financial, Agricultural $ — $ — $ — $ — $ — $ — $ — $ — $ —
Performing Loans — — — — — — — — —
Non-Performing Loans — — — — — — — — —
Real Estate - Construction $ — $ — $ — $ — $ — $ — $ — $ — $ —
Residential — — — — — — — — —
Performing Loans — — — — — — — — —
Non-Performing Loans — — — — — — — — —
Commercial — — — — — — — — —
Performing Loans — — — — — — — — —
Non-Performing Loans — — — — — — — — —
Real Estate - 1-4 Family Mortgage $ — $ — $ — $ 196 $ 1,061 $ 96,323 $ 36,430 $ 1,398 $ 135,408
Primary — — — 196 523 92,068 — 68 92,855
Performing Loans — — — 196 378 86,567 — 68 87,209
Non-Performing Loans — — — — 145 5,501 — — 5,646
Home Equity — — — — 538 4,043 36,430 1,330 42,341
Performing Loans — — — — 538 3,992 36,154 1,114 41,798
Non-Performing Loans — — — — — 51 276 216 543
Rental/Investment — — — — — — — — —
Performing Loans — — — — — — — — —
Non-Performing Loans — — — — — — — — —
Land Development — — — — — 212 — — 212
Performing Loans — — — — — 212 — — 212
Non-Performing Loans — — — — — — — — —
Real Estate - Commercial Mortgage $ — $ — $ — $ — $ 141 $ 481 $ — $ — $ 622
Owner-Occupied — — — — — — — — —
Performing Loans — — — — — — — — —
Non-Performing Loans — — — — — — — — —
Non-Owner Occupied — — — — — — — — —
Performing Loans — — — — — — — — —
Non-Performing Loans — — — — — — — — —
Land Development — — — — 141 481 — — 622
Performing Loans — — — — 141 481 — — 622
Non-Performing Loans — — — — — — — — —
Installment loans to individuals $ — $ — $ — $ — $ 13,734 $ 9,644 $ 1,272 $ 50 $ 24,700
Performing Loans — — — — 13,721 9,571 1,272 14 24,578
Non-Performing Loans — — — — 13 73 — 36 122
Total loans not subject to risk rating $ — $ — $ — $ 196 $ 14,936 $ 106,448 $ 37,702 $ 1,448 $ 160,730
Performing Loans — — — 196 14,778 100,823 37,426 1,196 154,419
Non-Performing Loans — — — — 158 5,625 276 252 6,311

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Term Loans Amortized Cost Basis by Origination Year
2021 2020 2019 2018 2017 Prior Revolving Loans Revolving Loans Converted to Term Total
Loans
December 31, 2021
Commercial, Financial, Agricultural $ — $ — $ — $ — $ — $ — $ — $ — $ —
Performing Loans — — — — — — — — —
Non-Performing Loans — — — — — — — — —
Real Estate - Construction $ — $ — $ — $ — $ — $ — $ — $ — $ —
Residential — — — — — — — — —
Performing Loans — — — — — — — — —
Non-Performing Loans — — — — — — — — —
Commercial — — — — — — — — —
Performing Loans — — — — — — — — —
Non-Performing Loans — — — — — — — — —
Real Estate - 1-4 Family Mortgage $ — $ — $ 202 $ 1,480 $ 19,988 $ 101,060 $ 44,086 $ 1,355 $ 168,171
Primary — — 202 938 17,505 98,961 — 81 117,687
Performing Loans — — 202 829 16,902 94,607 — 81 112,621
Non-Performing Loans — — — 109 603 4,354 — — 5,066
Home Equity — — — 542 2,441 1,823 44,086 1,274 50,166
Performing Loans — — — 542 2,441 1,769 43,700 1,141 49,593
Non-Performing Loans — — — — — 54 386 133 573
Rental/Investment — — — — — — — — —
Performing Loans — — — — — — — — —
Non-Performing Loans — — — — — — — — —
Land Development — — — — 42 276 — — 318
Performing Loans — — — — 42 276 — — 318
Non-Performing Loans — — — — — — — — —
Real Estate - Commercial Mortgage $ — $ — $ — $ 147 $ 31 $ 558 $ — $ — $ 736
Owner-Occupied — — — — — — — — —
Performing Loans — — — — — — — — —
Non-Performing Loans — — — — — — — — —
Non-Owner Occupied — — — — — — — — —
Performing Loans — — — — — — — — —
Non-Performing Loans — — — — — — — — —
Land Development — — — 147 31 558 — — 736
Performing Loans — — — 147 31 558 — — 736
Non-Performing Loans — — — — — — — — —
Installment loans to individuals $ — $ — $ — $ 20,581 $ 9,721 $ 3,881 $ 1,558 $ 34 $ 35,775
Performing Loans — — — 20,566 9,714 3,684 1,541 23 35,528
Non-Performing Loans — — — 15 7 197 17 11 247
Total loans not subject to risk rating $ — $ — $ 202 $ 22,208 $ 29,740 $ 105,499 $ 45,644 $ 1,389 $ 204,682
Performing Loans — — 202 22,084 29,130 100,894 45,241 1,245 198,796
Non-Performing Loans — — — 124 610 4,605 403 144 5,886

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~Note 5 –~~ Allowance for Credit Losses

(In Thousands)

~~The following is a summary of total non purchased and purchased loans as of the dates presented:~~

September 30,
2022 December 31, 2021
Commercial, financial, agricultural (1)
$ 1,513,091 $ 1,423,270
Lease financing 108,517 80,192
Real estate – construction:
Residential 359,754 302,275
Commercial 855,302 802,621
Total real estate – construction 1,215,056 1,104,896
Real estate – 1-4 family mortgage:
Primary 2,144,119 1,816,120
Home equity 499,626 474,604
Rental/investment 322,844 288,474
Land development 161,300 145,048
Total real estate – 1-4 family mortgage 3,127,889 2,724,246
Real estate – commercial mortgage:
Owner-occupied 1,562,952 1,563,351
Non-owner occupied 3,320,116 2,856,947
Land development 133,597 128,739
Total real estate – commercial mortgage 5,016,665 4,549,037
Installment loans to individuals 128,946 143,340
Gross loans 11,110,164 10,024,981
Unearned income (5,160) (4,067)
Loans, net of unearned income 11,105,004 10,020,914
Allowance for credit losses on loans (174,356) (164,171)
Net loans $ 10,930,648 $ 9,856,743

~~(1)Includes Paycheck Protection Program (“PPP”) loans of $5,476 and $58,391 as of September 30, 2022 and December 31, 2021, respectively.~~

Allowance for Credit Losses on Loans

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 the entire loan portfolio. 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 believes the uncollectability of a loan balance is ~~confirmed.~~confirmed and such losses are reasonably quantified. Subsequent recoveries, if any, are credited to the allowance. For more information about the Company’s policies and procedures for determining the amount of the allowance for credit losses, please refer to the discussion in Note 1, “Significant Accounting Policies,” in the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

The Company has made an accounting policy election to exclude accrued interest from the measurement of the allowance for credit losses in the Company’s loan portfolio. As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the Company had accrued interest receivable for loans of ~~$45,293~~$52,202 and ~~$41,692,~~$49,850, 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 established in 2020 in response to the COVID-19 pandemic of $1,248 as of March 31, 2023 and December 31, 2022.

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Notes to Consolidated Financial Statements (Unaudited)

~~deferral program established in 2020 in response to the COVID-19 pandemic of $1,263 and $1,273, respectively, as of September 30, 2022 and December 31, 2021.~~

The following tables provide 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			Commercial		Real Estate - Construction		Real Estate - 1-4 Family Mortgage		Real Estate - Commercial Mortgage		Lease Financing		Installment Loans to Individuals		Total
Three Months Ended September 30, 2022
Three Months Ended March 31, 2023																Three Months Ended March 31, 2023
Allowance for credit losses:	Allowance for credit losses:															Allowance for credit losses:
Beginning balance	Beginning balance	$	30,193	$	17,290	$	41,910	$	64,373	$	1,802	$	10,563	$	166,131	Beginning balance	$	44,255	$	19,114	$	44,727	$	71,798	$	2,463	$	9,733	$	192,090

Initial impact of purchased credit deteriorated (“PCD”) loans acquired																Initial impact of purchased credit deteriorated (“PCD”) loans acquired	(26)		—		—		—		—		—		(26)
Charge-offs	Charge-offs	(373)		—		(208)		(1,956)		—		(722)		(3,259)		Charge-offs	(529)		—		(3)		(5,115)		—		(810)		(6,457)
Recoveries	Recoveries	415		—		378		50		113		728		1,684		Recoveries	725		—		24		211		5		760		1,725
Net (charge-offs) recoveries	Net (charge-offs) recoveries	42		—		170		(1,906)		113		6		(1,575)		Net (charge-offs) recoveries	196		—		21		(4,904)		5		(50)		(4,732)
(Recovery of) provision for credit losses on loans		268		1,454		1,452		6,800		399		(573)		9,800
Provision for (recovery of) credit losses on loans																Provision for (recovery of) credit losses on loans	253		845		1,233		5,876		(31)		(216)		7,960
Ending balance	Ending balance	$	30,503	$	18,744	$	43,532	$	69,267	$	2,314	$	9,996	$	174,356	Ending balance	$	44,678	$	19,959	$	45,981	$	72,770	$	2,437	$	9,467	$	195,292
Nine Months Ended September 30, 2022
Allowance for credit losses:
Beginning balance		$	33,922	$	16,419	$	32,356	$	68,940	$	1,486	$	11,048	$	164,171
Impact of PCD loans acquired during the period		1,648		—		—		—		—		—		1,648
Charge-offs		(4,714)		—		(532)		(2,670)		(7)		(2,351)		(10,274)
Recoveries		1,982		—		725		397		136		2,271		5,511
Net (charge-offs) recoveries		(2,732)		—		193		(2,273)		129		(80)		(4,763)
(Recovery of) provision for credit losses on loans		(2,335)		2,325		10,983		2,600		699		(972)		13,300
Ending balance		$	30,503	$	18,744	$	43,532	$	69,267	$	2,314	$	9,996	$	174,356

Period-End Amount Allocated to:	Period-End Amount Allocated to:															Period-End Amount Allocated to:
Individually evaluated	Individually evaluated	$	4,064	$	—	$	—	$	2,649	$	—	$	370	$	7,083	Individually evaluated	$	14,162	$	35	$	608	$	1,734	$	—	$	270	$	16,809
Collectively evaluated	Collectively evaluated	26,439		18,744		43,532		66,618		2,314		9,626		167,273		Collectively evaluated	30,516		19,924		45,373		71,036		2,437		9,197		178,483
Ending balance	Ending balance	$	30,503	$	18,744	$	43,532	$	69,267	$	2,314	$	9,996	$	174,356	Ending balance	$	44,678	$	19,959	$	45,981	$	72,770	$	2,437	$	9,467	$	195,292
Loans:	Loans:															Loans:
Individually evaluated	Individually evaluated	$	9,088	$	153	$	5,965	$	19,043	$	—	$	370	$	34,619	Individually evaluated	$	24,985	$	652	$	12,637	$	10,375	$	—	$	274	$	48,923
Collectively evaluated	Collectively evaluated	1,504,003		1,214,903		3,121,924		4,997,622		103,357		128,576		11,070,385		Collectively evaluated	1,715,793		1,423,700		3,266,343		5,075,438		121,146		115,082		11,717,502
Ending balance	Ending balance	$	1,513,091	$	1,215,056	$	3,127,889	$	5,016,665	$	103,357	$	128,946	$	11,105,004	Ending balance	$	1,740,778	$	1,424,352	$	3,278,980	$	5,085,813	$	121,146	$	115,356	$	11,766,425

Nonaccruing loans with no allowance for credit losses	Nonaccruing loans with no allowance for credit losses	$	429	$	153	$	5,809	$	4,633	$	—	$	2	$	11,026	Nonaccruing loans with no allowance for credit losses	$	768	$	—	$	9,710	$	5,511	$	—	$	5	$	15,994

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Notes to Consolidated Financial Statements (Unaudited)


		Commercial		Real Estate - Construction		Real Estate - 1-4 Family Mortgage		Real Estate - Commercial Mortgage		Lease Financing		Installment Loans to Individuals		Total			Commercial		Real Estate - Construction		Real Estate - 1-4 Family Mortgage		Real Estate - Commercial Mortgage		Lease Financing		Installment Loans to Individuals		Total

Three Months Ended September 30, 2021
Three Months Ended March 31, 2022																Three Months Ended March 31, 2022
Allowance for credit losses:	Allowance for credit losses:															Allowance for credit losses:
Beginning balance	Beginning balance	$	36,994	$	15,729	$	31,303	$	74,893	$	1,511	$	11,924	$	172,354	Beginning balance	$	33,922	$	16,419	$	32,356	$	68,940	$	1,486	$	11,048	$	164,171

Initial impact of PCD loans acquired																Initial impact of PCD loans acquired	1,648		—		—		—		—		—		1,648
Charge-offs	Charge-offs	(1,225)		—		(276)		(184)		(13)		(1,281)		(2,979)		Charge-offs	(2,102)		—		(163)		(6)		(7)		(779)		(3,057)
Recoveries	Recoveries	418		—		193		190		11		1,051		1,863		Recoveries	1,136		—		178		155		12		725		2,206
Net (charge-offs) recoveries	Net (charge-offs) recoveries	(807)		—		(83)		6		(2)		(230)		(1,116)		Net (charge-offs) recoveries	(966)		—		15		149		5		(54)		(851)
(Recovery of) Provision for credit losses on loans		(1,210)		440		961		(1,004)		61		(448)		(1,200)
(Recovery of) provision for credit losses on loans																(Recovery of) provision for credit losses on loans	(998)		1,992		4,477		(3,858)		91		(204)		1,500
Ending balance	Ending balance	$	34,977	$	16,169	$	32,181	$	73,895	$	1,570	$	11,246	$	170,038	Ending balance	$	33,606	$	18,411	$	36,848	$	65,231	$	1,582	$	10,790	$	166,468
Nine Months Ended September 30, 2021
Allowance for credit losses:
Beginning balance		$	39,031	$	16,047	$	32,165	$	76,127	$	1,624	$	11,150	$	176,144

Charge-offs		(5,907)		(52)		(529)		(416)		(13)		(4,286)		(11,203)
Recoveries		940		13		855		504		36		3,949		6,297
Net (charge-offs) recoveries		(4,967)		(39)		326		88		23		(337)		(4,906)
(Recovery of) Provision for credit losses on loans		913		161		(310)		(2,320)		(77)		433		(1,200)
Ending balance		$	34,977	$	16,169	$	32,181	$	73,895	$	1,570	$	11,246	$	170,038

Period-End Amount Allocated to:	Period-End Amount Allocated to:															Period-End Amount Allocated to:
Individually evaluated	Individually evaluated	$	9,717	$	—	$	206	$	5,968	$	—	$	607	$	16,498	Individually evaluated	$	9,225	$	—	$	396	$	2,660	$	—	$	570	$	12,851
Collectively evaluated	Collectively evaluated	25,260		16,169		31,975		67,927		1,570		10,639		153,540		Collectively evaluated	24,381		18,411		36,452		62,571		1,582		10,220		153,617
Ending balance	Ending balance	$	34,977	$	16,169	$	32,181	$	73,895	$	1,570	$	11,246	$	170,038	Ending balance	$	33,606	$	18,411	$	36,848	$	65,231	$	1,582	$	10,790	$	166,468
Loans:	Loans:															Loans:
Individually evaluated	Individually evaluated	$	15,193	$	—	$	5,311	$	19,120	$	—	$	617	$	40,241	Individually evaluated	$	13,070	$	—	$	4,477	$	15,464	$	—	$	570	$	33,581
Collectively evaluated	Collectively evaluated	1,420,826		1,091,296		2,719,432		4,516,610		79,215		149,204		9,976,583		Collectively evaluated	1,432,537		1,222,052		2,836,502		4,562,400		89,842		136,545		10,279,878
Ending balance	Ending balance	$	1,436,019	$	1,091,296	$	2,724,743	$	4,535,730	$	79,215	$	149,821	$	10,016,824	Ending balance	$	1,445,607	$	1,222,052	$	2,840,979	$	4,577,864	$	89,842	$	137,115	$	10,313,459

Nonaccruing loans with no allowance for credit losses	Nonaccruing loans with no allowance for credit losses	$	2,658	$	—	$	3,039	$	2,865	$	—	$	10	$	8,572	Nonaccruing loans with no allowance for credit losses	$	435	$	—	$	2,614	$	5,298	$	—	$	2	$	8,349

The Company recorded a provision for credit losses of ~~$9,800~~$7,960 during the ~~third~~first quarter of ~~2022,~~2023, as compared to a ~~negative~~ provision for credit losses ~~$1,200~~$1,500 recorded in the ~~third~~first quarter of ~~2021.~~2022. The Company’s allowance for credit losses model considers economic projections, primarily the national unemployment rate and GDP, over a reasonable and supportable period of two years. The increase in provision ~~activity during~~for credit losses on loans in the ~~current~~first quarter as compared to the provision in the first quarter of the prior year was ~~primarily~~ driven by ~~strong~~ loan ~~growth.~~growth coupled with a slight deterioration in our economic forecast.

Allowance for Credit Losses on Unfunded Loan 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. For more information about the Company’s policies and procedures for determining the amount of the allowance for credit losses on unfunded loan commitments, please refer to the discussion in Note 1, “Significant Accounting Policies,” in the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

The following table provides a roll-forward of the allowance for credit losses on unfunded loan commitments for the periods presented.


Three Months Ended March 31,	2023		2022
Allowance for credit losses on unfunded loan commitments:
Beginning balance	$	20,118	$	20,035
Recovery of credit losses on unfunded loan commitments (included in other noninterest expense)	(1,500)		(550)
Ending balance	$	18,618	$	19,485

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Three Months Ended September 30, 2022 2021
Allowance for credit losses on unfunded loan commitments:
Beginning balance $ 19,935 $ 20,535
Provision for (recovery of provision for) credit losses on unfunded loan commitments (included in other noninterest expense) — (200)
Ending balance $ 19,935 $ 20,335
Nine Months Ended September 30, 2022 2021
Allowance for credit losses on unfunded loan commitments:
Beginning balance $ 20,035 $ 20,535
Recovery of provision for credit losses on unfunded loan commitments (included in other noninterest expense) (100) (200)
Ending balance $ 19,935 $ 20,335

Note 65 – Other Real Estate Owned

(In Thousands)

The following table provides details of the Company’s other real estate owned (“OREO”) ~~purchased and non purchased,~~, net of

valuation allowances and direct write-downs, as of the dates presented:


		Purchased OREO		Non Purchased OREO		Total OREO			March 31, 2023		December 31, 2022
September 30, 2022
Residential real estate	Residential real estate	$	173	$	740	$	913	Residential real estate	$	551	$	699
Commercial real estate	Commercial real estate	—		62		62		Commercial real estate	3,507		62
Residential land development	Residential land development	242		4		246		Residential land development	4		246
Commercial land development	Commercial land development	1,130		61		1,191		Commercial land development	756		756

Total	Total	$	1,545	$	867	$	2,412	Total	$	4,818	$	1,763
December 31, 2021
Residential real estate		$	93	$	166	$	259
Commercial real estate		39		722		761
Residential land development		301		4		305
Commercial land development		1,156		59		1,215

Total		$	1,589	$	951	$	2,540

Changes in the Company’s ~~purchased and non purchased~~ OREO were as follows:

Purchased
OREO Non Purchased OREO Total
OREO
Balance at January 1, 2022 $ 1,589 $ 951 $ 2,540
Transfers of loans 190 1,638 1,828
Impairments (96) (14) (110)
Dispositions (137) (1,710) (1,847)
Other (1) 2 1
Balance at September 30, 2022 $ 1,545 $ 867 $ 2,412


	Total OREO
Balance at January 1, 2023	$	1,763


Transfers of loans	3,623


Dispositions	(552)
Other	(16)
Balance at March 31, 2023	$	4,818

At ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the amortized cost of loans secured by Real Estate - 1-4 Family Mortgage in the process of foreclosure was ~~$780~~$392 and ~~$22,~~$375, respectively.

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Components of the line item “Other real estate owned” in the Consolidated Statements of Income were as follows for the periods presented:


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30,				September 30,					March 31,
		2022		2021		2022		2021			2023		2022
Repairs and maintenance	Repairs and maintenance	$	24	$	17	$	44	$	60	Repairs and maintenance	$	16	$	3
Property taxes and insurance	Property taxes and insurance	7		6		69		54		Property taxes and insurance	111		35
Impairments	Impairments	59		173		110		290		Impairments	—		14
Net (gains) losses on OREO sales		(54)		(24)		(611)		(74)
Net gains on OREO sales										Net gains on OREO sales	(95)		(291)
Rental income	Rental income	(2)		(4)		(6)		(17)		Rental income	(2)		(2)
Total	Total	$	34	$	168	$	(394)	$	313	Total	$	30	$	(241)

Note 76 – Goodwill and Other Intangible Assets

(In Thousands)

The carrying amounts of goodwill by operating segments for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 were as follows:

Community Banks Insurance Total
Balance at January 1, 2022 $ 936,916 $ 2,767 $ 939,683
Additions to goodwill from the Southeastern Commercial Finance, LLC acquisition 6,608 — 6,608
Balance at September 30, 2022 $ 943,524 $ 2,767 $ 946,291


	Community Banks		Insurance		Total
Balance at January 1, 2023	$	988,941	$	2,767	$	991,708
Deductions to goodwill and other adjustments	(43)		—		(43)
Balance at March 31, 2023	$	988,898	$	2,767	$	991,665

~~The following table provides a summary of finite-lived intangible assets as of the dates presented:~~

Gross Carrying
Amount Accumulated
Amortization Net Carrying
Amount
September 30, 2022
Core deposit intangibles $ 82,492 $ (63,190) $ 19,302
Customer relationship intangible 2,470 (1,602) 868
Total finite-lived intangible assets $ 84,962 $ (64,792) $ 20,170
December 31, 2021
Core deposit intangibles $ 82,492 $ (59,399) $ 23,093
Customer relationship intangible 2,470 (1,465) 1,005
Total finite-lived intangible assets $ 84,962 $ (60,864) $ 24,098

~~Current year amortization expense for finite-lived intangible assets is presented in the table below.~~

Three Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Amortization expense for:
Core deposit intangibles $ 1,206 $ 1,436 $ 3,791 $ 4,482
Customer relationship intangible 45 45 136 136
Total intangible amortization $ 1,251 $ 1,481 $ 3,927 $ 4,618

~~The estimated amortization expense of finite-lived intangible assets for the year ending December 31, 2022 and the succeeding four years is summarized as follows:~~

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Notes to Consolidated Financial Statements (Unaudited)

Core Deposit Intangibles Customer Relationship Intangible Total
2022 $ 4,941 $ 181 $ 5,122
2023 4,044 181 4,225
2024 3,498 181 3,679
2025 3,102 181 3,283
2026 2,899 138 3,037
The following table provides a summary of finite-lived intangible assets as of the dates presented:


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
March 31, 2023
Core deposit intangibles	$	82,492	$	(65,431)	$	17,061
Customer relationship intangible	7,670		(1,981)		5,689
Total finite-lived intangible assets	$	90,162	$	(67,412)	$	22,750
December 31, 2022
Core deposit intangibles	$	82,492	$	(64,339)	$	18,153
Customer relationship intangible	7,670		(1,647)		6,023
Total finite-lived intangible assets	$	90,162	$	(65,986)	$	24,176

Current year amortization expense for finite-lived intangible assets is presented in the table below.


	Three Months Ended
	March 31,
	2023		2022
Amortization expense for:
Core deposit intangibles	$	1,092	$	1,321
Customer relationship intangible	334		45
Total intangible amortization	$	1,426	$	1,366

The estimated amortization expense of finite-lived intangible assets for the year ending December 31, 2023 and the succeeding four years is summarized as follows:


	Core Deposit Intangibles		Customer Relationship Intangible		Total

2023	$	4,043	$	1,337	$	5,380
2024	3,498		1,192		4,690
2025	3,102		1,048		4,150
2026	2,899		860		3,759
2027	2,774		628		3,402

Note 87 – Mortgage Servicing Rights

(In Thousands)

The Company retains the right to service certain mortgage loans that it sells to secondary market investors. These mortgage servicing rights (“MSRs”) are recognized as a separate asset on the date the corresponding mortgage loan is sold. MSRs 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, and other factors, and is subject to significant fluctuation as a result of actual prepayment speeds, default rates and losses differing from estimates thereof. For example, an increase in mortgage interest rates or a decrease in actual prepayment speeds may cause positive adjustments to the valuation of the Company’s MSRs.

MSRs are evaluated for impairment (or reversals of prior impairments) quarterly based upon the fair value of the rights as compared to the carrying amount. Impairment is recognized through a valuation allowance in the amount 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 “Mortgage banking income” on the Consolidated Statements of Income.

There was no valuation adjustment on MSRs during the ~~nine~~three months ended ~~September 30,~~March 31, 2023 or 2022. ~~During the nine months ended September 30, 2021, there was a positive valuation adjustment~~

Table of ~~$13,561 which was caused primarily by an increase in mortgage interest rates~~Contents

Renasant Corporation and ~~a corresponding decrease in actual prepayment speeds.~~Subsidiaries

~~During the third quarter of 2022, the Company sold MSRs relating~~Notes to ~~mortgage loans having an aggregate unpaid principal balance of $1,700,823 to a third party for net proceeds of $18,525, resulting in a gain of $2,960.~~Consolidated Financial Statements (Unaudited)

Changes in the Company’s MSRs were as follows:


Balance at January 1, ~~2022~~2023	$	~~89,018~~84,448
~~Sale of MSRs~~	~~(15,565)~~
Capitalization	~~18,052~~2,915
Amortization	~~(9,525)~~(2,324)

Balance at ~~September 30, 2022~~March 31, 2023	$	~~81,980~~85,039

Data and key economic assumptions related to the Company’s MSRs are as follows as of the dates presented:

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~


		September 30, 2022			December 31, 2021				March 31, 2023			December 31, 2022
Unpaid principal balance	Unpaid principal balance	$	7,406,373		$	8,728,629		Unpaid principal balance	$	7,537,652		$	7,494,413

Weighted-average prepayment speed (CPR)	Weighted-average prepayment speed (CPR)	7.08		%	10.56		%	Weighted-average prepayment speed (CPR)	7.49		%	7.00		%
Estimated impact of a 10% increase	Estimated impact of a 10% increase	$	(5,254)		$	(3,875)		Estimated impact of a 10% increase	$	(2,308)		$	(5,393)
Estimated impact of a 20% increase	Estimated impact of a 20% increase	(10,089)			(7,464)			Estimated impact of a 20% increase	(4,922)			(10,354)

Discount rate	Discount rate	10.34		%	9.82		%	Discount rate	10.31		%	10.30		%
Estimated impact of a 10% increase	Estimated impact of a 10% increase	$	(323)		$	(4,153)		Estimated impact of a 10% increase	$	(5,149)		$	(1,765)
Estimated impact of a 20% increase	Estimated impact of a 20% increase	(891)			(8,119)			Estimated impact of a 20% increase	(9,894)			(3,957)

Weighted-average coupon interest rate	Weighted-average coupon interest rate	3.43		%	3.29		%	Weighted-average coupon interest rate	3.58		%	3.51		%
Weighted-average servicing fee (basis points)	Weighted-average servicing fee (basis points)	32.14			30.37			Weighted-average servicing fee (basis points)	32.46			32.44
Weighted-average remaining maturity (in years)	Weighted-average remaining maturity (in years)	8.24			6.69			Weighted-average remaining maturity (in years)	8.06			8.33

The Company recorded servicing fees of ~~$4,445~~$4,265 and ~~$4,891~~$4,423 for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and servicing fees of $13,868 and $13,578 for the nine months ended September 30, 2022 and 2021,~~ respectively, all of which are included in “Mortgage banking income” in the Consolidated Statements of Income.

Note 98 - 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, and it provides retiree medical benefits, consisting of the opportunity to purchase coverage at subsidized rates under the Company’s group medical plan.

Information related to the defined benefit pension plan maintained by Renasant Bank (“Pension Benefits”) and to the post-retirement health and life plan (“Other Benefits”) as of the dates presented is as follows:



		Pension Benefits				Other Benefits			Pension Benefits								Other Benefits
		Three Months Ended				Three Months Ended			Three Months Ended								Three Months Ended
		September 30,				September 30,			March 31,								March 31,
		2022		2021			2022			2021			2023		2022			2023		2022
Service cost	Service cost	$	—	$	—		$	1		$	2	Service cost	$	—	$	—		$	—	$	1
Interest cost	Interest cost	185		171			3			4		Interest cost	249		184			6		3
Expected return on plan assets	Expected return on plan assets	(421)		(442)			—			—		Expected return on plan assets	(309)		(421)			—		—

Recognized actuarial loss (gain)	Recognized actuarial loss (gain)	60		67			(19)			—		Recognized actuarial loss (gain)	131		61			(15)		(19)

Net periodic (return) benefit cost		$	(176)	$	(204)		$	(15)		$	6
Net periodic benefit cost (return)												Net periodic benefit cost (return)	$	71	$	(176)		$	(9)	$	(15)

Pension Benefits Other Benefits
Nine Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Service cost $ — $ — $ 3 $ 4
Interest cost 554 512 9 11
Expected return on plan assets (1,263) (1,326) — —
Recognized actuarial loss (gain) 182 199 (57) (2)
Net periodic (return) benefit cost $ (527) $ (615) $ (45) $ 13

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Notes to Consolidated Financial Statements (Unaudited)

Incentive Compensation Plans

The Company maintains a long-term equity compensation plan that provides for the grant of stock options and the award of restricted stock. There were no stock options granted, nor compensation expense associated with options recorded, during the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 or ~~2021.~~2022. There were no stock options outstanding as of ~~September 30, 2022.~~March 31, 2023.

The Company also awards performance-based restricted stock to executives and other officers and employees and time-based restricted stock to non-employee directors, executives, and other officers and employees.

The following table summarizes the changes in restricted stock as of and for the ~~nine~~three months ended ~~September 30, 2022:~~March 31, 2023:


		Performance-Based Restricted Stock	Weighted Average Grant-Date Fair Value		Time-Based Restricted Stock	Weighted Average Grant-Date Fair Value			Performance-Based Restricted Stock	Weighted Average Grant-Date Fair Value		Time-Based Restricted Stock	Weighted Average Grant-Date Fair Value
Nonvested at beginning of period	Nonvested at beginning of period	146,561	$	34.67	603,714	$	34.48	Nonvested at beginning of period	155,838	$	36.23	680,403	$	36.23
Awarded	Awarded	63,308	38.62		295,406	37.51		Awarded	67,118	37.52		293,577	36.56
Vested	Vested	—	—		(222,283)	32.81		Vested	—	—		(176,826)	35.94
Cancelled	Cancelled	(5,465)	37.26		(23,461)	37.23		Cancelled	—	—		(19,250)	34.48
Nonvested at end of period	Nonvested at end of period	204,404	$	35.83	653,376	$	36.32	Nonvested at end of period	222,956	$	36.62	777,904	$	36.46

During the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, the Company reissued ~~187,951~~120,554 shares from treasury in connection with awards of restricted stock. The Company recorded total stock-based compensation expense of ~~$2,268~~$3,445 and ~~$2,595~~$3,338 for the three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021, respectively, and $8,558 and $7,736 for the nine months ended September 30,~~ 2022, respectively.

Note 109 – 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 and adjustable-rate residential mortgage loans. The Company also enters into forward commitments to sell residential mortgage loans to secondary market investors.

The following table provides a summary of the Company’s derivatives not designated as hedging instruments as of the dates presented:

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Notes to Consolidated Financial Statements (Unaudited)


		Balance Sheet	September 30, 2022				December 31, 2021					Balance Sheet	March 31, 2023				December 31, 2022
		Location	Notional Amount		Fair Value		Notional Amount		Fair Value			Location	Notional Amount		Fair Value		Notional Amount		Fair Value
Derivative assets:	Derivative assets:										Derivative assets:
Interest rate contracts	Interest rate contracts	Other Assets	$	223,569	$	11,343	$	185,447	$	4,711	Interest rate contracts	Other Assets	$	305,029	$	10,429	$	258,646	$	11,354
Interest rate lock commitments	Interest rate lock commitments	Other Assets	44,785		657		310,941		5,304		Interest rate lock commitments	Other Assets	135,187		3,382		92,901		1,231
Forward commitments	Forward commitments	Other Assets	225,000		8,941		280,000		667		Forward commitments	Other Assets	56,000		215		84,000		484
Totals	Totals		$	493,354	$	20,941	$	776,388	$	10,682	Totals		$	496,216	$	14,026	$	435,547	$	13,069
Derivative liabilities:	Derivative liabilities:										Derivative liabilities:
Interest rate contracts	Interest rate contracts	Other Liabilities	$	223,569	$	11,343	$	185,447	$	4,711	Interest rate contracts	Other Liabilities	$	305,029	$	10,429	$	258,646	$	11,354
Interest rate lock commitments	Interest rate lock commitments	Other Liabilities	84,830		1,861		19,961		43		Interest rate lock commitments	Other Liabilities	3,120		12		19,488		98
Forward commitments	Forward commitments	Other Liabilities	10,000		49		320,000		736		Forward commitments	Other Liabilities	176,000		1,419		73,000		1,198
Totals	Totals		$	318,399	$	13,253	$	525,408	$	5,490	Totals		$	484,149	$	11,860	$	351,134	$	12,650

Gains and losses included in the Consolidated Statements of Income related to the Company’s derivative financial instruments were as follows as of the dates presented:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022
Interest rate contracts:	Interest rate contracts:									Interest rate contracts:
Included in interest income on loans	Included in interest income on loans	$	811	$	589	$	1,255	$	1,795	Included in interest income on loans		$	1,742	$	305

Interest rate lock commitments:	Interest rate lock commitments:									Interest rate lock commitments:
Included in mortgage banking income	Included in mortgage banking income	(4,046)		(3,251)		(6,466)		(12,655)		Included in mortgage banking income		2,237		(5,823)
Forward commitments	Forward commitments									Forward commitments
Included in mortgage banking income	Included in mortgage banking income	9,381		5,310		8,962		8,590		Included in mortgage banking income		(490)		10,188
Total	Total	$	6,146	$	2,648	$	3,751	$	(2,270)	Total		$	3,489	$	4,670

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 both interest rate swap contracts and interest rate collars in an effort to manage future interest rate exposure on borrowings. The swap hedging strategy converts the LIBOR-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 Company entered into an interest rate collar in June 2022 with a 2.25% floor and 4.57% cap. The Company entered into a second interest rate collar in October 2022 with a 2.75% floor and 4.75% cap. As of ~~September 30, 2022,~~March 31, 2023, the Company is hedging its exposure to the variability of future cash flows through 2032 and a portion of these hedges are forward starting.

The following table provides a summary of the Company’s derivatives designated as cash flow hedges as of the dates presented:


		Balance Sheet	September 30, 2022				December 31, 2021					Balance Sheet	March 31, 2023				December 31, 2022
		Location	Notional Amount		Fair Value		Notional Amount		Fair Value			Location	Notional Amount		Fair Value		Notional Amount		Fair Value
Derivative assets:	Derivative assets:										Derivative assets:
Interest rate swaps	Interest rate swaps	Other Assets	$	130,000	$	25,266	$	100,000	$	7,016	Interest rate swaps	Other Assets	$	130,000	$	21,080	$	130,000	$	24,514

Interest rate collars											Interest rate collars	Other Assets	450,000		1,496		200,000		464
Total											Total		$	580,000	$	22,576	$	330,000	$	24,978
Derivative liabilities:	Derivative liabilities:										Derivative liabilities:
Interest rate swaps	Interest rate swaps	Other Liabilities	$	—	$	—	$	62,000	$	2,902	Interest rate swaps	Other Liabilities	$	—	$	—	$	—	$	—
Interest rate collars	Interest rate collars	Other Liabilities	250,000		1,934		—		—		Interest rate collars	Other Liabilities	—		—		250,000		746
Totals	Totals		$	250,000	$	1,934	$	62,000	$	2,902	Totals		$	—	$	—	$	250,000	$	746

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Changes in fair value of the 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. The assessment of the effectiveness of the hedging relationship is evaluated under the hypothetical derivative method.

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

There were no ineffective portions for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 or ~~2021.~~2022. The impact on other comprehensive income for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ is discussed in Note ~~13,~~12, “Other Comprehensive Income (Loss).”

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-rate subordinated notes. The agreements convert the fixed interest rates to LIBOR-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	September 30, 2022				December 31, 2021					Balance Sheet	March 31, 2023				December 31, 2022
		Location	Notional Amount		Fair Value		Notional Amount		Fair Value			Location	Notional Amount		Fair Value		Notional Amount		Fair Value

Derivative liabilities:	Derivative liabilities:										Derivative liabilities:
Interest rate swaps	Interest rate swaps	Other Liabilities	$	100,000	$	20,643	$	100,000	$	5,411	Interest rate swaps	Other Liabilities	$	100,000	$	17,268	$	100,000	$	19,789

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											Amount of Gain (Loss) Recognized in Income
		Income Statement	Three Months Ended September 30,				Nine Months Ended September 30,					Income Statement	Three Months Ended March 31,
		Location	2022		2021		2022		2021			Location		2023		2022
Derivative liabilities:	Derivative liabilities:										Derivative liabilities:
Interest rate swaps - subordinated notes	Interest rate swaps - subordinated notes	Interest Expense	$	(10,495)	$	(764)	$	(15,232)	$	(4,941)	Interest rate swaps - subordinated notes	Interest Expense		$	2,521	$	(6,343)

Derivative liabilities - hedged items:	Derivative liabilities - hedged items:										Derivative liabilities - hedged items:
Interest rate swaps - subordinated notes	Interest rate swaps - subordinated notes	Interest Expense	$	10,495	$	764	$	15,232	$	4,941	Interest rate swaps - subordinated notes	Interest Expense		$	(2,521)	$	6,343

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					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	Balance Sheet Location	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021		Balance Sheet Location	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
Long-term debt	Long-term debt	$	77,984	$	93,085	$	20,643	$	5,411	Long-term debt	$	81,445	$	78,881	$	17,268	$	19,789

Offsetting

Certain financial instruments, including derivatives, may be eligible for offset in the consolidated balance sheet when the “right of offset” 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:

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Notes to Consolidated Financial Statements (Unaudited)


		Offsetting Derivative Assets				Offsetting Derivative Liabilities					Offsetting Derivative Assets				Offsetting Derivative Liabilities
		September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
Gross amounts recognized	Gross amounts recognized	$	45,510	$	8,007	$	22,665	$	13,436	Gross amounts recognized	$	31,041	$	36,493	$	20,866	$	22,056
Gross amounts offset in the Consolidated Balance Sheets	Gross amounts offset in the Consolidated Balance Sheets	—		—		—		—		Gross amounts offset in the Consolidated Balance Sheets	—		—		—		—
Net amounts presented in the Consolidated Balance Sheets	Net amounts presented in the Consolidated Balance Sheets	45,510		8,007		22,665		13,436		Net amounts presented in the Consolidated Balance Sheets	31,041		36,493		20,866		22,056
Gross amounts not offset in the Consolidated Balance Sheets	Gross amounts not offset in the Consolidated Balance Sheets									Gross amounts not offset in the Consolidated Balance Sheets
Financial instruments	Financial instruments	22,665		7,208		22,665		7,208		Financial instruments	19,662		22,056		19,662		22,056
Financial collateral pledged	Financial collateral pledged	—		—		—		6,228		Financial collateral pledged	—		—		701		—
Net amounts	Net amounts	$	22,845	$	799	$	—	$	—	Net amounts	$	11,379	$	14,437	$	503	$	—

Note 1110 – Income Taxes

(In Thousands)

The following table is a summary of the Company’s temporary differences between the tax basis of assets and liabilities and their financial reporting amounts that give rise to deferred income tax assets and liabilities and their approximate tax effects as of the dates presented.


		September 30,		December 31,			March 31,		December 31,
		2022		2021			2023		2022
Deferred tax assets	Deferred tax assets					Deferred tax assets
Allowance for credit losses	Allowance for credit losses	$	51,156	$	50,712	Allowance for credit losses	$	53,030	$	52,551
Loans	Loans	2,017		2,855		Loans	2,335		2,518
Deferred compensation	Deferred compensation	14,029		14,522		Deferred compensation	10,752		14,447
Net unrealized losses on securities	Net unrealized losses on securities	73,827		3,545		Net unrealized losses on securities	64,140		70,999
Impairment of assets	Impairment of assets	355		392		Impairment of assets	180		316
Net operating loss carryforwards	Net operating loss carryforwards	682		1,211		Net operating loss carryforwards	320		497
Investment in partnerships	Investment in partnerships	1,010		890		Investment in partnerships	1,204		1,164

Lease liabilities under operating leases	Lease liabilities under operating leases	15,013		17,106		Lease liabilities under operating leases	14,369		14,641
Other	Other	2,954		3,241		Other	4,707		3,523
Total deferred tax assets	Total deferred tax assets	161,043		94,474		Total deferred tax assets	151,037		160,656

Deferred tax liabilities	Deferred tax liabilities					Deferred tax liabilities

Fixed assets	Fixed assets	9,735		5,339		Fixed assets	10,999		10,342
Mortgage servicing rights	Mortgage servicing rights	18,984		20,779		Mortgage servicing rights	19,775		19,624
Junior subordinated debt	Junior subordinated debt	2,018		2,130		Junior subordinated debt	1,888		1,948
Intangibles	Intangibles	2,817		3,177		Intangibles	2,612		2,702
Lease right-of-use asset	Lease right-of-use asset	14,395		16,209		Lease right-of-use asset	13,736		14,018
Other	Other	1,178		1,607		Other	1,145		1,614
Total deferred tax liabilities	Total deferred tax liabilities	49,127		49,241		Total deferred tax liabilities	50,155		50,248
Net deferred tax assets	Net deferred tax assets	$	111,916	$	45,233	Net deferred tax assets	$	100,882	$	110,408

For the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ the Company recorded a provision for income taxes totaling ~~$32,355~~$11,322 and ~~$35,572,~~$7,935, respectively. The provision for income taxes includes both federal and state income taxes and differs from the statutory rate due to favorable permanent differences.

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 and state departments of revenue for the years ending December 31, ~~2018~~2020 through December 31, ~~2020.~~2022.

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Notes to Consolidated Financial Statements (Unaudited)

Note 1211 – Fair Value Measurements

(In Thousands)

Fair Value Measurements and the Fair Level Hierarchy

~~FASB Accounting Standards Codification Topic (“ASC”)~~ASC 820, “Fair Value Measurements and Disclosures,” provides guidance for using fair value to measure assets and liabilities and 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).

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 on a recurring basis 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, “Financial Instruments” (“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:

Securities available for sale: Securities available for sale consist primarily of debt securities, such as obligations of U.S. Government agencies and corporations, obligations of states and political subdivisions 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 extensively 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, interest rate collars and other interest rate contracts such as 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:

4532

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


		Level 1		Level 2		Level 3		Totals			Level 1		Level 2		Level 3		Totals
September 30, 2022
March 31, 2023										March 31, 2023
Financial assets:	Financial assets:									Financial assets:

Securities available for sale	Securities available for sale	$	—	$	1,569,242	$	—	$	1,569,242	Securities available for sale	$	—	$	1,507,907	$	—	$	1,507,907
Derivative instruments	Derivative instruments	—		46,207		—		46,207		Derivative instruments	—		36,602		—		36,602
Mortgage loans held for sale in loans held for sale	Mortgage loans held for sale in loans held for sale	—		144,642		—		144,642		Mortgage loans held for sale in loans held for sale	—		159,318		—		159,318
Total financial assets	Total financial assets	$	—	$	1,760,091	$	—	$	1,760,091	Total financial assets	$	—	$	1,703,827	$	—	$	1,703,827
Financial liabilities:	Financial liabilities:									Financial liabilities:
Derivative instruments:	Derivative instruments:	$	—	$	35,830	$	—	$	35,830	Derivative instruments:	$	—	$	29,128	$	—	$	29,128


		Level 1		Level 2		Level 3		Totals			Level 1		Level 2		Level 3		Totals
December 31, 2021
December 31, 2022										December 31, 2022
Financial assets:	Financial assets:									Financial assets:

Securities available for sale	Securities available for sale	$	—	$	2,386,052	$	—	$	2,386,052	Securities available for sale	$	—	$	1,533,942	$	—	$	1,533,942

Derivative instruments	Derivative instruments	—		17,698		—		17,698		Derivative instruments	—		38,047		—		38,047
Mortgage loans held for sale in loans held for sale	Mortgage loans held for sale in loans held for sale	—		453,533		—		453,533		Mortgage loans held for sale in loans held for sale	—		110,105		—		110,105
Total financial assets	Total financial assets	$	—	$	2,857,283	$	—	$	2,857,283	Total financial assets	$	—	$	1,682,094	$	—	$	1,682,094
Financial liabilities:	Financial liabilities:									Financial liabilities:
Derivative instruments	Derivative instruments	$	—	$	13,803	$	—	$	13,803	Derivative instruments	$	—	$	33,185	$	—	$	33,185

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. Transfers between levels of the hierarchy are deemed to have occurred at the end of period. There were no such transfers between levels of the fair value hierarchy during the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023.

For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and the three months ended September 30, 2021,~~ respectively, 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. The following table provides a reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs, or Level 3 inputs, for the nine months ended September 30, 2021.

~~2021~~

~~Three Months Ended September 30, 2022~~

Trust preferred
securities

~~Nine Months Ended September 30,~~

~~Balance at beginning of period~~

~~9,012~~

~~Accretion included in net income~~

~~Unrealized gains included in other comprehensive income~~

~~941~~

~~Realized losses~~

~~2,061~~

~~Purchases~~

~~(12,021)~~

~~Balance at end of period~~

—

Nonrecurring Fair Value Measurements

Certain assets and liabilities 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 the fair value measurement for assets measured at fair value on a nonrecurring basis that were still held on the Consolidated Balance Sheets as of the dates presented and the level within the fair value hierarchy each is classified:

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~


September 30, 2022		Level 1		Level 2		Level 3		Totals
March 31, 2023										March 31, 2023	Level 1		Level 2		Level 3		Totals
Individually evaluated loans, net of allowance for credit losses	Individually evaluated loans, net of allowance for credit losses	$	—	$	—	$	12,107	$	12,107	Individually evaluated loans, net of allowance for credit losses	$	—	$	—	$	20,114	$	20,114
OREO	OREO	—		—		2,412		2,412		OREO	—		—		4,818		4,818

Total	Total	$	—	$	—	$	14,519	$	14,519	Total	$	—	$	—	$	24,932	$	24,932


December 31, 2021		Level 1		Level 2		Level 3		Totals
December 31, 2022										December 31, 2022	Level 1		Level 2		Level 3		Totals
Individually evaluated loans, net of allowance for credit losses	Individually evaluated loans, net of allowance for credit losses	$	—	$	—	$	7,928	$	7,928	Individually evaluated loans, net of allowance for credit losses	$	—	$	—	$	14,732	$	14,732
OREO	OREO	—		—		2,540		2,540		OREO	—		—		1,763		1,763

Total	Total	$	—	$	—	$	10,468	$	10,468	Total	$	—	$	—	$	16,495	$	16,495

The following methods and assumptions are used by the Company to estimate the fair values of the Company’s financial assets measured on a nonrecurring basis:

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Individually evaluated loans: Loans 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 ~~$14,774~~$35,184 and ~~$12,939~~$18,288 at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively, and a specific reserve for these loans of ~~$2,667~~$15,070 and ~~$5,011~~$3,556 was included in the allowance for credit losses as of such dates.

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 OREO measured at fair value on a nonrecurring basis that was still held on the Consolidated Balance Sheets as of the dates presented:


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022

Carrying amount prior to remeasurement	Carrying amount prior to remeasurement	$	2,517	$	2,556	Carrying amount prior to remeasurement	$	4,818	$	1,842
Impairment recognized in results of operations	Impairment recognized in results of operations	(105)		(16)		Impairment recognized in results of operations	—		(79)
Fair value	Fair value	$	2,412	$	2,540	Fair value	$	4,818	$	1,763

Mortgage servicing rights: Mortgage 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, 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 ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022. There were no valuation adjustments on MSRs during the ~~nine~~three months ended ~~September 30, 2022 and $13,561 of positive valuation adjustments recognized during the nine months ended September 30, 2021.~~March 31, 2023 or 2022.

The following table presents information as of ~~September 30, 2022~~March 31, 2023 about significant unobservable inputs (Level 3) used in the valuation of assets measured at fair value on a nonrecurring basis:

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Financial instrument

Fair
Value

Valuation Technique

Significant
Unobservable Inputs

Range of Inputs

Individually evaluated loans, net of allowance for credit losses

~~12,107~~20,114

Appraised value of collateral less estimated costs to sell

Estimated costs to sell

4-10%

OREO

~~2,412~~4,818

Appraised value of property less estimated costs to sell

Estimated costs to sell

4-10%

Fair Value Option

The Company has elected to measure all mortgage loans held for sale 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~~A net gain of ~~$14,537~~$1,780 and ~~$10,425~~net loss of $13,021 resulting from fair value changes of these mortgage loans were recorded in income during the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively. The amount does 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.

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

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 ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


		Aggregate Fair Value		Aggregate Unpaid Principal Balance		Difference			Aggregate Fair Value		Aggregate Unpaid Principal Balance		Difference
September 30, 2022
March 31, 2023								March 31, 2023
Mortgage loans held for sale measured at fair value	Mortgage loans held for sale measured at fair value	$	144,642	$	147,363	$	(2,721)	Mortgage loans held for sale measured at fair value	$	159,318	$	155,576	$	3,742

December 31, 2021
December 31, 2022								December 31, 2022
Mortgage loans held for sale measured at fair value	Mortgage loans held for sale measured at fair value	$	453,533	$	441,717	$	11,816	Mortgage loans held for sale measured at fair value	$	110,105	$	108,143	$	1,962

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
As of March 31, 2023	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	847,697	$	847,697	$	—	$	—	$	847,697
Securities held to maturity	1,300,240		—		1,204,079		—		1,204,079
Securities available for sale	1,507,907		—		1,507,907		—		1,507,907
Loans held for sale	159,318		—		159,318		—		159,318
Loans, net	11,571,133		—		—		11,117,319		11,117,319
Mortgage servicing rights	85,039		—		—		119,556		119,556
Derivative instruments	36,602		—		36,602		—		36,602
Financial liabilities
Deposits	$	13,912,019	$	11,409,503	$	2,466,863	$	—	$	13,876,366
Short-term borrowings	732,057		732,057		—		—		732,057


Junior subordinated debentures	112,276		—		94,423		—		94,423
Subordinated notes	318,835		—		263,350		—		263,350
Derivative instruments	29,128		—		29,128		—		29,128

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


				Fair Value											Fair Value
As of September 30, 2022		Carrying Value		Level 1		Level 2		Level 3		Total
As of December 31, 2022												As of December 31, 2022	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets	Financial assets											Financial assets
Cash and cash equivalents	Cash and cash equivalents	$	479,500	$	479,500	$	—	$	—	$	479,500	Cash and cash equivalents	$	575,992	$	575,992	$	—	$	—	$	575,992
Securities held to maturity	Securities held to maturity	1,353,502		—		1,218,656		—		1,218,656		Securities held to maturity	1,324,040		—		1,206,540		—		1,206,540
Securities available for sale	Securities available for sale	1,569,242		—		1,569,242		—		1,569,242		Securities available for sale	1,533,942		—		1,533,942		—		1,533,942
Loans held for sale	Loans held for sale	144,642		—		144,642		—		144,642		Loans held for sale	110,105		—		110,105		—		110,105
Loans, net	Loans, net	10,930,648		—		—		10,392,244		10,392,244		Loans, net	11,386,214		—		—		10,850,181		10,850,181
Mortgage servicing rights	Mortgage servicing rights	81,980		—		—		119,752		119,752		Mortgage servicing rights	84,448		—		—		122,454		122,454
Derivative instruments	Derivative instruments	46,207		—		46,207		—		46,207		Derivative instruments	38,047		—		38,047		—		38,047
Financial liabilities	Financial liabilities											Financial liabilities
Deposits	Deposits	$	13,432,124	$	12,225,041	$	1,167,728	$	—	$	13,392,769	Deposits	$	13,486,966	$	11,791,526	$	1,653,891	$	—	$	13,445,417
Short-term borrowings	Short-term borrowings	312,818		312,818		—		—		312,818		Short-term borrowings	712,232		712,232		—		—		712,232

Junior subordinated debentures	Junior subordinated debentures	111,807		—		101,088		—		101,088		Junior subordinated debentures	112,042		—		98,754		—		98,754
Subordinated notes	Subordinated notes	315,014		—		284,000		—		284,000		Subordinated notes	316,091		—		277,500		—		277,500
Derivative instruments	Derivative instruments	35,830		—		35,830		—		35,830		Derivative instruments	33,185		—		33,185		—		33,185

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 12 – Other Comprehensive Income (Loss)

(In Thousands)

Changes in the components of other comprehensive income (loss), net of tax, were as follows for the periods presented:

Fair Value
As of December 31, 2021 Carrying
Value Level 1 Level 2 Level 3 Total
Financial assets
Cash and cash equivalents $ 1,877,965 $ 1,877,965 $ — $ — $ 1,877,965
Securities held to maturity 416,357 — 415,552 — 415,552
Securities available for sale 2,386,052 — 2,386,052 — 2,386,052
Loans held for sale 453,533 — 453,533 — 453,533
Loans, net 9,856,743 — — 9,690,604 9,690,604
Mortgage servicing rights 89,018 — — 99,425 99,425
Derivative instruments 17,698 — 17,698 — 17,698
Financial liabilities
Deposits $ 13,905,724 $ 12,494,342 $ 1,408,397 $ — $ 13,902,739
Short-term borrowings 13,947 13,947 — — 13,947
Federal Home Loan Bank advances 417 — 422 — 422
Junior subordinated debentures 111,373 — 106,682 — 106,682
Subordinated notes 359,419 — 373,950 — 373,950
Derivative instruments 13,803 — 13,803 — 13,803


	Pre-Tax		Tax Expense (Benefit)		Net of Tax
Three months ended March 31, 2023
Securities available for sale:
Unrealized holding gains on securities	$	20,714	$	5,183	$	15,531



Amortization of unrealized holding losses on securities transferred to the held to maturity category	3,128		800		2,328
Total securities available for sale	23,842		5,983		17,859
Derivative instruments:
Unrealized holding losses on derivative instruments	(1,656)		(424)		(1,232)
Reclassification adjustment for gains realized in net income	—		—		—
Total derivative instruments	(1,656)		(424)		(1,232)
Defined benefit pension and post-retirement benefit plans:


Amortization of net actuarial loss recognized in net periodic pension cost	116		30		86
Total defined benefit pension and post-retirement benefit plans	116		30		86
Total other comprehensive income	$	22,302	$	5,589	$	16,713
Three months ended March 31, 2022
Securities available for sale:

Unrealized holding losses on securities	$	(134,756)	$	(34,294)	$	(100,462)


Amortization of unrealized holding gains on securities transferred to the held to maturity category	(99)		(25)		(74)
Total securities available for sale	(134,855)		(34,319)		(100,536)
Derivative instruments:
Unrealized holding gains on derivative instruments	8,556		2,177		6,379

Total derivative instruments	8,556		2,177		6,379
Defined benefit pension and post-retirement benefit plans:

Amortization of net actuarial loss recognized in net periodic pension cost	42		11		31
Total defined benefit pension and post-retirement benefit plans	42		11		31
Total other comprehensive loss	$	(126,257)	$	(32,131)	$	(94,126)

The accumulated balances for each component of other comprehensive loss, net of tax, were as follows as of the dates presented:


	March 31, 2023		December 31, 2022
Unrealized losses on securities	$	(201,907)	$	(219,766)

Unrealized gains on derivative instruments	17,724		18,956
Unrecognized losses on defined benefit pension and post-retirement benefit plans obligations	(8,141)		(8,227)
Total accumulated other comprehensive loss	$	(192,324)	$	(209,037)

4937

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 13 ~~– Other Comprehensive Income (Loss)~~

~~(In Thousands)~~

~~Changes in the components of other comprehensive income, net of tax, were as follows for the periods presented:~~

Pre-Tax Tax Expense
(Benefit) Net of Tax
Three months ended September 30, 2022
Securities available for sale:
Unrealized holding losses on securities $ (85,283) $ (21,704) $ (63,579)
Amortization of unrealized holding gains on securities transferred to the held to maturity category 1,619 412 1,207
Total securities available for sale (83,664) (21,292) (62,372)
Derivative instruments:
Unrealized holding gains on derivative instruments 2,262 575 1,687
Total derivative instruments 2,262 575 1,687
Defined benefit pension and post-retirement benefit plans:
Amortization of net actuarial loss recognized in net periodic pension cost 42 11 31
Total defined benefit pension and post-retirement benefit plans 42 11 31
Total other comprehensive loss $ (81,360) $ (20,706) $ (60,654)
Three months ended September 30, 2021
Securities available for sale:
Unrealized holding losses on securities $ (12,408) $ (3,158) $ (9,250)
Reclassification adjustment for gains realized in net income (764) (194) (570)
Total securities available for sale (13,172) (3,352) (9,820)
Derivative instruments:
Unrealized holding gains on derivative instruments 1,629 414 1,215
Total derivative instruments 1,629 414 1,215
Defined benefit pension and post-retirement benefit plans:
Amortization of net actuarial loss recognized in net periodic pension cost 67 18 49
Total defined benefit pension and post-retirement benefit plans 67 18 49
Total other comprehensive loss $ (11,476) $ (2,920) $ (8,556)

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Pre-Tax Tax Expense
(Benefit) Net of Tax
Nine months ended September 30, 2022
Securities available for sale:
Unrealized holding losses on securities $ (296,444) $ (75,445) $ (220,999)
Amortization of unrealized holding gains on securities transferred to the held to maturity category 1,300 331 969
Total securities available for sale (295,144) (75,114) (220,030)
Derivative instruments:
Unrealized holding gains on derivative instruments 19,219 4,891 14,328
Total derivative instruments 19,219 4,891 14,328
Defined benefit pension and post-retirement benefit plans:
Amortization of net actuarial loss recognized in net periodic pension cost 125 32 93
Total defined benefit pension and post-retirement benefit plans 125 32 93
Total other comprehensive loss $ (275,800) $ (70,191) $ (205,609)
Nine months ended September 30, 2021
Securities available for sale:
Unrealized holding losses on securities $ (27,487) $ (6,996) $ (20,491)
Reclassification adjustment for gains realized in net income (2,121) (539) (1,582)
Total securities available for sale (29,608) (7,535) (22,073)
Derivative instruments:
Unrealized holding gains on derivative instruments 10,129 2,578 7,551
Total derivative instruments 10,129 2,578 7,551
Defined benefit pension and post-retirement benefit plans:
Amortization of net actuarial loss recognized in net periodic pension cost 197 49 148
Total defined benefit pension and post-retirement benefit plans 197 49 148
Total other comprehensive loss $ (19,282) $ (4,908) $ (14,374)

~~The accumulated balances for each component of other comprehensive income, net of tax, were as follows as of the dates presented:~~

September 30,
2022 December 31, 2021
Unrealized losses on securities $ (229,146) $ (9,116)
Unrealized gains on derivative instruments 18,290 3,963
Unrecognized losses on defined benefit pension and post-retirement benefit plans obligations (5,196) (5,290)
Total accumulated other comprehensive loss $ (216,052) $ (10,443)

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~Note 14~~ – Net Income Per Common Share

(In Thousands, Except Share Data)

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 outstanding service-based restricted stock awards fully vested, calculated in accordance with the treasury method. Basic and diluted net income per common share calculations are as follows for the periods presented:


		Three Months Ended					Three Months Ended
		September 30,					March 31,
		2022		2021			2023		2022
Basic	Basic					Basic
Net income applicable to common stock	Net income applicable to common stock	$	46,567	$	40,063	Net income applicable to common stock	$	46,078	$	33,547
Average common shares outstanding	Average common shares outstanding	55,947,214		56,146,285		Average common shares outstanding	56,008,741		55,809,192
Net income per common share - basic	Net income per common share - basic	$	0.83	$	0.71	Net income per common share - basic	$	0.82	$	0.60
Diluted	Diluted					Diluted
Net income applicable to common stock	Net income applicable to common stock	$	46,567	$	40,063	Net income applicable to common stock	$	46,078	$	33,547
Average common shares outstanding	Average common shares outstanding	55,947,214		56,146,285		Average common shares outstanding	56,008,741		55,809,192
Effect of dilutive stock-based compensation	Effect of dilutive stock-based compensation	301,506		300,899		Effect of dilutive stock-based compensation	261,478		272,671
Average common shares outstanding - diluted	Average common shares outstanding - diluted	56,248,720		56,447,184		Average common shares outstanding - diluted	56,270,219		56,081,863
Net income per common share - diluted	Net income per common share - diluted	$	0.83	$	0.71	Net income per common share - diluted	$	0.82	$	0.60

Nine Months Ended
September 30,
2022 2021
Basic
Net income applicable to common stock $ 119,792 $ 138,838
Average common shares outstanding 55,888,226 56,237,056
Net income per common share - basic $ 2.14 $ 2.47
Diluted
Net income applicable to common stock $ 119,792 $ 138,838
Average common shares outstanding 55,888,226 56,237,056
Effect of dilutive stock-based compensation 281,660 296,038
Average common shares outstanding - diluted 56,169,886 56,533,094
Net income per common share - diluted $ 2.13 $ 2.46

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:

Three Months Ended
September 30,
2022 2021
Number of shares 9,750 19,929


	Three Months Ended
	March 31,
	2023	2022
Number of shares	68,771	2,200

Nine Months Ended
September 30,
2022 2021
Number of shares 19,750 19,929

Note 1514 – Regulatory Matters

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

(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:

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

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 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 the Bank as of the dates presented:


		September 30, 2022				December 31, 2021					March 31, 2023				December 31, 2022
		Amount		Ratio		Amount		Ratio			Amount		Ratio		Amount		Ratio
Renasant Corporation	Renasant Corporation									Renasant Corporation
Tier 1 Capital to Average Assets (Leverage)	Tier 1 Capital to Average Assets (Leverage)	$	1,493,705	9.39	%	$	1,422,077	9.15	%	Tier 1 Capital to Average Assets (Leverage)	$	1,503,086	9.18	%	$	1,481,197	9.36	%
Common Equity Tier 1 Capital to Risk-Weighted Assets	Common Equity Tier 1 Capital to Risk-Weighted Assets	1,385,489		10.64	%	1,314,295		11.18	%	Common Equity Tier 1 Capital to Risk-Weighted Assets	1,394,401		10.19	%	1,372,747		10.21	%
Tier 1 Capital to Risk-Weighted Assets	Tier 1 Capital to Risk-Weighted Assets	1,493,705		11.47	%	1,422,077		12.10	%	Tier 1 Capital to Risk-Weighted Assets	1,503,086		10.98	%	1,481,197		11.01	%
Total Capital to Risk-Weighted Assets	Total Capital to Risk-Weighted Assets	1,973,206		15.15	%	1,897,167		16.14	%	Total Capital to Risk-Weighted Assets	2,009,552		14.68	%	1,968,001		14.63	%
Renasant Bank	Renasant Bank									Renasant Bank
Tier 1 Capital to Average Assets (Leverage)	Tier 1 Capital to Average Assets (Leverage)	$	1,645,539	10.34	%	$	1,580,904	10.18	%	Tier 1 Capital to Average Assets (Leverage)	$	1,651,005	10.08	%	$	1,630,389	10.30	%
Common Equity Tier 1 Capital to Risk-Weighted Assets	Common Equity Tier 1 Capital to Risk-Weighted Assets	1,645,539		12.61	%	1,580,904		13.46	%	Common Equity Tier 1 Capital to Risk-Weighted Assets	1,651,005		12.03	%	1,630,389		12.10	%
Tier 1 Capital to Risk-Weighted Assets	Tier 1 Capital to Risk-Weighted Assets	1,645,539		12.61	%	1,580,904		13.46	%	Tier 1 Capital to Risk-Weighted Assets	1,651,005		12.03	%	1,630,389		12.10	%
Total Capital to Risk-Weighted Assets	Total Capital to Risk-Weighted Assets	1,789,382		13.71	%	1,697,163		14.44	%	Total Capital to Risk-Weighted Assets	1,821,367		13.28	%	1,781,312		13.22	%

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 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 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 shown in the table above, as of ~~September 30, 2022,~~March 31, 2023, the Company’s CET1 capital was in excess of the capital conservation buffer.

The Company elected to take advantage of transitional relief offered by the Federal Reserve and the FDIC to delay for two years the estimated impact of ASC Topic 326, “Financial Instruments - Credit Losses” (“ASC 326”), often referred to as CECL, on regulatory capital, followed by a three-year transitional period to phase out the capital benefit provided by the two-year delay. The three-year transitional period began on January 1, 2022.

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Note 1615 – 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-sized businesses including checking and savings accounts, business and personal loans, asset-based lending, ~~and~~factoring, equipment leasing and treasury management services, as well as safe deposit and night depository facilities.

•The Insurance segment includes a full service insurance agency offering all major lines of commercial and personal insurance through major carriers.

•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,

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

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.

To give the Company’s divisional management a more precise indication of the income and expenses they can control, the results of operations for the Community Banks, the Insurance and the Wealth Management segments reflect the direct revenues and expenses of each respective segment. 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.

The following tables provide financial information for the Company’s operating segments as of and for the periods presented:


		Community Banks		Insurance		Wealth Management		Other		Consolidated			Community Banks		Insurance		Wealth Management		Other		Consolidated
Three months ended September 30, 2022
Three months ended March 31, 2023												Three months ended March 31, 2023
Net interest income (loss)	Net interest income (loss)	$	134,528	$	98	$	794	$	(5,102)	$	130,318	Net interest income (loss)	$	140,757	$	286	$	1,050	$	(6,318)	$	135,775
Provision for credit losses	Provision for credit losses	9,800		—		—		—		9,800		Provision for credit losses	7,960		—		—		—		7,960
Noninterest income (loss)	Noninterest income (loss)	32,324		3,123		6,132		(393)		41,186		Noninterest income (loss)	28,493		3,362		5,812		(374)		37,293
Noninterest expense	Noninterest expense	94,474		2,190		4,553		357		101,574		Noninterest expense	100,381		2,039		4,928		360		107,708
Income (loss) before income taxes	Income (loss) before income taxes	62,578		1,031		2,373		(5,852)		60,130		Income (loss) before income taxes	60,909		1,609		1,934		(7,052)		57,400
Income tax expense (benefit)	Income tax expense (benefit)	14,811		268		—		(1,516)		13,563		Income tax expense (benefit)	12,722		416		4		(1,820)		11,322
Net income (loss)	Net income (loss)	$	47,767	$	763	$	2,373	$	(4,336)	$	46,567	Net income (loss)	$	48,187	$	1,193	$	1,930	$	(5,232)	$	46,078

Total assets	Total assets	$	16,369,592	$	35,761	$	73,704	$	(7,958)	$	16,471,099	Total assets	$	17,362,799	$	37,168	$	79,452	$	(5,336)	$	17,474,083
Goodwill	Goodwill	$	943,524	$	2,767	—		—		$	946,291	Goodwill	$	988,898	$	2,767	—		—		$	991,665

Three months ended September 30, 2021
Three months ended March 31, 2022												Three months ended March 31, 2022
Net interest income (loss)	Net interest income (loss)	$	106,506	$	115	$	404	$	(3,733)	$	103,292	Net interest income (loss)	$	103,932	$	93	$	490	$	(4,886)	$	99,629
Provision for (recovery of provision for) credit losses		(1,088)		—		(112)		—		(1,200)
Provision for credit losses												Provision for credit losses	1,500		—		—		—		1,500
Noninterest income (loss)	Noninterest income (loss)	42,546		2,835		5,820		(446)		50,755		Noninterest income (loss)	28,306		3,097		6,505		(450)		37,458
Noninterest expense	Noninterest expense	97,437		2,095		4,189		278		103,999		Noninterest expense	86,871		2,116		4,755		363		94,105
Income (loss) before income taxes	Income (loss) before income taxes	52,703		855		2,147		(4,457)		51,248		Income (loss) before income taxes	43,867		1,074		2,240		(5,699)		41,482
Income tax expense (benefit)	Income tax expense (benefit)	12,117		220		—		(1,152)		11,185		Income tax expense (benefit)	9,131		281		—		(1,477)		7,935
Net income (loss)	Net income (loss)	$	40,586	$	635	$	2,147	$	(3,305)	$	40,063	Net income (loss)	$	34,736	$	793	$	2,240	$	(4,222)	$	33,547

Total assets	Total assets	$	16,040,728	$	33,036	$	67,204	$	14,582	$	16,155,550	Total assets	$	16,757,670	$	33,794	$	64,761	$	7,532	$	16,863,757
Goodwill	Goodwill	$	936,916	$	2,767	—		—		$	939,683	Goodwill	$	943,524	$	2,767	—		—		$	946,291

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Community
Banks Insurance Wealth
Management Other Consolidated
Nine months ended September 30, 2022
Net interest income (loss) $ 356,040 $ 286 $ 1,813 $ (14,677) $ 343,462
Provision for credit losses 13,300 — — — 13,300
Noninterest income (loss) 89,359 8,831 18,952 (1,284) 115,858
Noninterest expense 272,594 6,311 13,899 1,069 293,873
Income (loss) before income taxes 159,505 2,806 6,866 (17,030) 152,147
Income tax expense (benefit) 36,035 734 — (4,414) 32,355
Net income (loss) $ 123,470 $ 2,072 $ 6,866 $ (12,616) $ 119,792
Total assets $ 16,369,592 $ 35,761 $ 73,704 $ (7,958) $ 16,471,099
Goodwill $ 943,524 $ 2,767 $ — $ — $ 946,291
Nine months ended September 30, 2021
Net interest income (loss) $ 332,234 $ 333 $ 1,184 $ (11,232) $ 322,519
Provision for (recovery of provision for) credit losses (1,088) — (112) — (1,200)
Noninterest income (loss) 155,765 8,558 16,421 (1,342) 179,402
Noninterest expense 309,449 6,005 12,337 920 328,711
Income (loss) before income taxes 179,638 2,886 5,380 (13,494) 174,410
Income tax expense (benefit) 38,320 740 — (3,488) 35,572
Net income (loss) $ 141,318 $ 2,146 $ 5,380 $ (10,006) $ 138,838
Total assets $ 16,040,728 $ 33,036 $ 67,204 $ 14,582 $ 16,155,550
Goodwill $ 936,916 $ 2,767 $ — $ — $ 939,683

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(In Thousands, Except Share Data)

This Form 10-Q 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: (i) the Company’s ability to efficiently integrate acquisitions 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; (ii) the effect of economic conditions and interest rates on a national, regional or international basis; (iii) timing and success of the implementation of changes in operations to achieve enhanced earnings or effect cost savings; (iv) competitive pressures in the consumer finance, commercial finance, insurance, financial services, asset management, retail banking, factoring and mortgage lending and auto lending industries; (v) the financial resources of, and products available from, competitors; (vi) changes in laws and regulations as well as changes in accounting standards; (vii) changes in policy by regulatory agencies; (viii) changes in the securities and foreign exchange markets; (ix) the Company’s potential growth, including its entrance or expansion into new markets, and the need for sufficient capital to support that growth; (x) 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;~~borrowers or issuers of investment securities, or the impact of interest rates on the value of our investment securities portfolio; (xi) an insufficient allowance for credit losses ~~on loans or unfunded commitments~~ as a result of inaccurate assumptions; (xii) 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; (xiii) general economic, market or business conditions, including the impact and cost of ~~inflation and changes in monetary policy by the Federal Reserve Board; (xiii)~~inflation; (xiv) changes in demand for loan products and financial services; ~~(xiv)~~(xv) concentration of credit exposure; ~~(xv)~~(xvi) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships; ~~(xvi)~~(xvii) increased cybersecurity risk, including potential network breaches, business disruptions or financial losses; ~~(xvii)~~(xviii) civil unrest, natural disasters, epidemics (including the re-emergence of the COVID-19 pandemic) and other catastrophic events in the Company’s geographic area; ~~(xviii)~~(xix) the impact, extent and timing of technological changes; and ~~(xix)~~(xx) 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.

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.

Financial Condition

The following discussion provides details regarding the changes in significant balance sheet accounts at ~~September 30, 2022~~March 31, 2023 compared to December 31, ~~2021.~~2022.

Assets

Total assets were ~~$16,471,099~~$17,474,083 at ~~September 30, 2022~~March 31, 2023 compared to ~~$16,810,311~~$16,988,176 at December 31, 2021. Renasant Bank (“Renasant Bank” or the “Bank”) acquired Southeastern Commercial Finance, LLC, an asset-based lending company headquartered in Birmingham, Alabama, effective March 1, 2022, which added $43,946 in total assets, including $28,110 in loans, on the date of acquisition.2022.

Investments

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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 certain types of borrowings. The securities portfolio also serves as an outlet to deploy excess liquidity and generate interest income 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 as of the dates presented:


		September 30, 2022				December 31, 2021					March 31, 2023				December 31, 2022
		Balance		Percentage of Portfolio		Balance		Percentage of Portfolio			Balance		Percentage of Portfolio		Balance		Percentage of Portfolio
U.S. Treasury securities		$	—	—	%	$	3,010	0.11	%

Obligations of other U.S. Government agencies and corporations	Obligations of other U.S. Government agencies and corporations	164,520		5.63		—		—		Obligations of other U.S. Government agencies and corporations	$	165,890	5.91	%	$	164,660	5.76	%
Obligations of states and political subdivisions	Obligations of states and political subdivisions	433,410		14.83		426,751		15.23		Obligations of states and political subdivisions	434,140		15.46		436,788		15.28
Mortgage-backed securities	Mortgage-backed securities	2,188,182		74.87		2,313,167		82.54		Mortgage-backed securities	2,077,860		73.99		2,122,855		74.28

Other debt securities	Other debt securities	136,664		4.67		59,513		2.12		Other debt securities	130,289		4.64		133,711		4.68

		$	2,922,776	100.00	%	$	2,802,441	100.00	%		$	2,808,179	100.00	%	$	2,858,014	100.00	%
Allowance for credit losses - held to maturity securities	Allowance for credit losses - held to maturity securities	(32)				(32)				Allowance for credit losses - held to maturity securities	(32)				(32)
Securities, net of allowance for credit losses	Securities, net of allowance for credit losses	$	2,922,744			$	2,802,409			Securities, net of allowance for credit losses	$	2,808,147			$	2,857,982

~~During~~The Company did not purchase any securities during the ~~nine~~three months ended September 30, 2022, we deployed a portion of our excess liquidity into the securities portfolio and purchased $800,260 in investment securities. Mortgage-backed securities and collateralized mortgage obligations (“CMOs”), in the aggregate, comprised approximately 62% of these 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 primarily issued by government sponsored entities. Obligations of other U.S. Government agencies and corporations comprised approximately 21% of purchases made during the first nine months of 2022. Obligations of state and political subdivisions comprised approximately 5% of purchases made during the first nine months of 2022. Other debt securities in our investment portfolio, consisting of corporate debt securities, issuances from the Small Business Administration (“SBA”) and subordinated debt issuances, comprised the remaining 12% of purchases made during the first nine months of 2022.March 31, 2023.

During the third quarter of 2022, the Company transferred, at fair value, $882,927 of securities from the available for sale portfolio to the held to maturity portfolio as the Company has ~~no intention~~the intent and ability to ~~sell~~hold these ~~securities.~~securities until their maturity. The related net unrealized losses of $99,675 (after tax losses of $74,307) remained in accumulated other comprehensive income (loss) and will be amortized over the remaining life of the securities, offsetting the related amortization of discount on the transferred securities. At March 31, 2023, the net unrealized after tax losses remaining to be amortized in accumulated other comprehensive income (loss) was $66,284. No gains or losses were recognized at the time of transfer.

Rising interest rates in the first three quarters of 2022 had a negative impact on the value of our securities portfolio resulting in a fair market value adjustment of our available for sale securities of $296,442, which contributed to our accumulated other comprehensive loss.

Proceeds from maturities, calls and principal payments on securities during the first ~~nine~~three months of ~~2022~~2023 totaled ~~$372,484.~~$70,766. The Company did not sell any securities during the first ~~nine~~three months of ~~2022.~~2023. Proceeds from the maturities, calls and principal payments on securities during the first ~~nine~~three months of ~~2021~~2022 totaled ~~$329,520.~~$135,775. The Company ~~sold municipal~~did not sell any securities residential mortgage backed securities, trust preferred securities and other debt securities with a carrying value of $174,285 at the time of sale for net proceeds of $176,406, resulting in a net gain on sale of $2,121 during the first ~~nine~~three months of ~~2021.~~2022.

For more information about the Company’s security portfolio, see Note 2, “Securities,” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements, in this report.

Loans Held for Sale

Loans held for sale, which consist of residential mortgage loans being held until they are sold in the secondary market, were ~~$144,642~~$159,318 at ~~September 30, 2022,~~March 31, 2023, as compared to ~~$453,533~~$110,105 at December 31, ~~2021.~~2022. Mortgage loans 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 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

~~Table of Contents~~

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. Our standard practice is to sell the loans 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

Total loans, excluding loans held for sale, were ~~$11,105,004~~$11,766,425 at ~~September 30, 2022~~March 31, 2023 and ~~$10,020,914~~$11,578,304 at December 31, 2021. Non purchased loans totaled $10,259,840 at September 30, 2022 compared to $9,011,011 at December 31, 2021. Loans purchased in previous acquisitions totaled $845,164 and $1,009,903 at September 30, 2022 and December 31, 2021, respectively.2022.

The tables below set forth the balance of loans outstanding, net of unearned income and excluding loans held for sale, by loan type and the percentage of each loan type to total loans as of the dates presented:

September 30, 2022
Non Purchased Purchased Total
Loans Percentage of Total Loans
Commercial, financial, agricultural (1)
$ 1,435,275 $ 77,816 $ 1,513,091 13.63 %
Lease financing, net of unearned income 103,357 — 103,357 0.93
Real estate – construction:
Residential 359,367 387 359,754 3.24
Commercial 848,941 6,361 855,302 7.70
Total real estate – construction 1,208,308 6,748 1,215,056 10.94
Real estate – 1-4 family mortgage:
Primary 2,041,885 102,234 2,144,119 19.31
Home equity 456,765 42,861 499,626 4.50
Rental/investment 306,165 16,679 322,844 2.91
Land development 151,986 9,314 161,300 1.45
Total real estate – 1-4 family mortgage 2,956,801 171,088 3,127,889 28.17
Real estate – commercial mortgage:
Owner-occupied 1,368,196 194,756 1,562,952 14.07
Non-owner occupied 2,963,631 356,485 3,320,116 29.90
Land development 120,026 13,571 133,597 1.20
Total real estate – commercial mortgage 4,451,853 564,812 5,016,665 45.17
Installment loans to individuals 104,246 24,700 128,946 1.16
Total loans, net of unearned income $ 10,259,840 $ 845,164 $ 11,105,004 100.00 %

~~(1)Includes Paycheck Protection Program (“PPP”) loans of $5,477 as of September 30, 2022.~~

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December 31, 2021
Non Purchased Purchased Total
Loans Percentage of Total Loans
Commercial, financial, agricultural (1)
$ 1,332,962 $ 90,308 $ 1,423,270 14.20 %
Lease financing, net of unearned income 76,125 — 76,125 0.76
Real estate – construction:
Residential 300,988 1,287 302,275 3.02
Commercial 798,914 3,707 802,621 8.01
Total real estate – construction 1,099,902 4,994 1,104,896 11.03
Real estate – 1-4 family mortgage:
Primary 1,682,050 134,070 1,816,120 18.12
Home equity 423,108 51,496 474,604 4.74
Rental/investment 268,245 20,229 288,474 2.88
Land development 135,070 9,978 145,048 1.45
Total real estate – 1-4 family mortgage 2,508,473 215,773 2,724,246 27.19
Real estate – commercial mortgage:
Owner-occupied 1,329,219 234,132 1,563,351 15.60
Non-owner occupied 2,446,370 410,577 2,856,947 28.51
Land development 110,395 18,344 128,739 1.28
Total real estate – commercial mortgage 3,885,984 663,053 4,549,037 45.39
Installment loans to individuals 107,565 35,775 143,340 1.43
Total loans, net of unearned income $ 9,011,011 $ 1,009,903 $ 10,020,914 100.00 %


	March 31, 2023				December 31, 2022
	Total Loans		Percentage of Total Loans		Total Loans		Percentage of Total Loans
Commercial, financial, agricultural	$	1,740,778	14.79	%	$	1,673,883	14.46	%
Lease financing, net of unearned income	121,146		1.03		115,013		0.99
Real estate – construction:
Residential	333,439		2.83		355,500		3.07
Commercial	1,090,913		9.27		974,837		8.42

Total real estate – construction	1,424,352		12.10		1,330,337		11.49
Real estate – 1-4 family mortgage:
Primary	2,288,592		19.45		2,222,856		19.20
Home equity	497,925		4.23		501,906		4.33
Rental/investment	344,705		2.93		334,382		2.89
Land development	147,758		1.26		157,119		1.36
Total real estate – 1-4 family mortgage	3,278,980		27.87		3,216,263		27.78
Real estate – commercial mortgage:
Owner-occupied	1,521,327		12.93		1,539,296		13.29
Non-owner occupied	3,447,217		29.30		3,452,910		29.82
Land development	117,269		1.00		125,857		1.09
Total real estate – commercial mortgage	5,085,813		43.23		5,118,063		44.20
Installment loans to individuals	115,356		0.98		124,745		1.08
Total loans, net of unearned income	$	11,766,425	100.00	%	$	11,578,304	100.00	%

~~(1)Includes PPP loans of $58,391 as of December 31, 2021.~~

Loan concentrations are considered to 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 ~~September 30, 2022,~~March 31, 2023, there were no concentrations of loans exceeding 10% of total loans which are not disclosed as a category of loans separate from the categories listed above.

Deposits

The Company relies on deposits as its major source of funds. Total deposits were ~~$13,432,124~~$13,912,019 and ~~$13,905,724~~$13,486,966 at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. Noninterest-bearing deposits were ~~$4,827,220~~$4,244,877 and ~~$4,718,124~~$4,558,756 at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively, while interest-bearing deposits were ~~$8,604,904~~$9,667,142 and ~~$9,187,600~~$8,928,210 at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. ~~Although there was an overall decline in~~Interest-bearing deposits ~~noninterest-bearing~~included brokered deposits ~~increased $109,096,~~of $856,946 and ~~the Company's liquidity position remains strong.~~$233,133 at March 31, 2023 and December 31, 2022, respectively.

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 represented ~~35.94%~~30.51% of total deposits at ~~September 30, 2022,~~March 31, 2023, as compared to ~~33.93%~~33.80% of total deposits at December 31, ~~2021.~~2022. The decrease in noninterest-bearing deposits reflects both deposit customers transferring noninterest-bearing deposits to interest-bearing deposits such as money market funds offered by financial institutions and other financial services companies, and the impact of our increase in brokered deposits in the first quarter of 2023 as compared to brokered deposits at December 31, 2022. Under certain circumstances, management may elect to acquire non-core deposits (in the form of ~~time~~brokered 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. 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. Because public fund deposits are obtained through a bid process, these deposit balances may fluctuate as competitive and market forces change. 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

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other products and services, make such participation advisable. Our public fund transaction accounts are principally obtained from public universities and municipalities, including school boards and utilities. Public fund deposits were ~~$1,696,290~~$1,882,616 and

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~~$1,787,414~~ $1,760,460 at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively, and represented ~~12.63%~~13.53% and ~~12.85%~~13.05% of total deposits as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively.

Borrowed Funds

Total borrowings include federal funds purchased, securities sold under agreements to repurchase, advances from the 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. The following table presents our short-term borrowings by type as of the dates presented:


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Security repurchase agreements	Security repurchase agreements	$	12,818	$	13,947	Security repurchase agreements	$	7,057	$	12,232

Short-term borrowings from the FHLB	Short-term borrowings from the FHLB	300,000		—		Short-term borrowings from the FHLB	725,000		700,000

		$	312,818	$	13,947		$	732,057	$	712,232

Long-term debt typically consists of long-term FHLB advances, our junior subordinated debentures and our subordinated notes. The following table presents our long-term debt by type as of the dates presented:


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Long-term FHLB advances		$	—	$	417

Junior subordinated debentures	Junior subordinated debentures	111,807		111,373		Junior subordinated debentures	$	112,276	$	112,042
Subordinated notes	Subordinated notes	315,014		359,419		Subordinated notes	318,835		316,091
		$	426,821	$	471,209		$	431,111	$	428,133

Long-term funds obtained from the FHLB are used to match-fund fixed rate loans in order to minimize interest rate risk and to meet day-to-day liquidity needs, particularly when the cost of such borrowing compares favorably to the rates that we would be required to pay to attract deposits. There were no long-term advances from the FHLB outstanding at March 31, 2023 or December 31, 2022. The Company had ~~$3,818,637~~$2,923,320 of availability on unused lines of credit with the FHLB at ~~September 30, 2022,~~March 31, 2023, as compared to ~~$4,214,274~~$3,651,678 at December 31, ~~2021.~~2022.

The Company has issued subordinated notes, the proceeds of which have been used for general corporate purposes, including providing capital to support the Company’s growth organically or through strategic acquisitions, repaying indebtedness and financing investments and capital expenditures, and for investments in Renasant Bank as regulatory capital. The subordinated notes qualify as Tier 2 capital under current regulatory guidelines.

On March 1, 2022, the Company redeemed at par the remaining $30,000 of its $60,000 5.00% fixed-to-floating rate subordinated notes. The Company redeemed the initial $30,000 of these notes in December 2021.

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.

Results of Operations

Net Income

Net income for the ~~third~~first quarter of ~~2022~~2023 was ~~$46,567~~$46,078 compared to net income of ~~$40,063~~$33,547 for the ~~third~~first quarter of ~~2021.~~2022. Basic and diluted earnings per share (“EPS”) for the ~~third~~first quarter of ~~2022~~2023 were ~~$0.83~~$0.82 as compared to basic and diluted EPS of $0.71 for the third quarter of 2021. Net income for the nine months ended September 30, 2022, was $119,792 compared to net income of $138,838 for the same period in 2021. Basic and diluted EPS were $2.14 and $2.13, respectively,$0.60 for the first ~~nine months~~quarter of ~~2022 as compared to $2.47 and $2.46 for the first nine months of 2021.~~2022.

From time to time, the Company incurs expenses and charges or recognizes valuation adjustments in connection with certain transactions with respect to which management is unable to accurately predict when these items will be incurred or, when incurred, the amount of such items. The following table presents the impact of these items on reported EPS for the dates presented. ~~The “COVID-19 related expenses” line item in the table below primarily consists of (a) employee overtime and~~

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employee benefit accruals directly related to the Company’s response to both the COVID-19 pandemic itself and federal legislation enacted to address the pandemic, such as the CARES Act, and (b) expenses associated with supplying branches with protective equipment and sanitation supplies (such as floor markings and cautionary signage for branches, face coverings and hand sanitizer) as well as more frequent and rigorous branch cleaning.

Three Months Ended
September 30, 2022 September 30, 2021
Pre-tax After-tax Impact to Diluted EPS Pre-tax After-tax Impact to Diluted EPS
Gain on sale of MSR $ (2,960) $ (2,292) $ (0.04) $ — $ — $ —
COVID-19 related expenses — — — 323 253 —
Nine Months Ended
September 30, 2022 September 30, 2021
Pre-tax After-tax Impact to Diluted EPS Pre-tax After-tax Impact to Diluted EPS
Merger and conversion expenses $ 687 $ 541 $ 0.01 $ — $ — $ —
Gain on sale of MSR (2,960) (2,330) (0.04)
MSR valuation adjustment — — — (13,561) (10,549) (0.19)
Restructuring charges 732 576 0.01 307 239 —
COVID-19 related expenses — — — 1,478 1,151 0.02


	Three Months Ended
	March 31, 2023						March 31, 2022
	Pre-tax		After-tax		Impact to Diluted EPS		Pre-tax		After-tax		Impact to Diluted EPS
Merger and conversion expenses	$	—	$	—	$	—	$	687	$	556	$	0.01



Restructuring benefit	$	—	$	—	$	—	$	(455)	$	(368)	$	(0.01)

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 ~~76.28%~~78.79% of total revenue (i.e., net interest income on a fully taxable equivalent basis and noninterest income) for the ~~third~~first quarter of ~~2022.~~2023. The primary concerns in managing net interest income are the volume, mix and repricing of assets and liabilities.

Net interest income was ~~$130,318 and $343,462~~$135,775 for the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, as compared to ~~$103,292 and $322,519~~$99,629 for the same ~~periods~~period in ~~2021.~~2022. On a tax equivalent basis, net interest income was ~~$132,435 and $349,139~~$138,529 for the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, as compared to ~~$105,002 and $327,471~~$101,383 same ~~periods~~period in ~~2021.~~2022.

The following ~~tables set~~table sets forth 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 paid on each such category on a tax-equivalent basis for the periods presented:

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		Three Months Ended September 30,													Three Months Ended March 31,
		2022						2021							2023						2022
		Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate			Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate
Assets	Assets													Assets
Interest-earning assets:	Interest-earning assets:													Interest-earning assets:

Loans held for investment	Loans held for investment	$	10,829,137	$	124,614	4.57	%	$	10,017,742	$	103,770	4.11	%	Loans held for investment	$	11,688,534	$	163,970	5.68	%	$	10,108,511	$	97,001	3.88	%
Loans held for sale	Loans held for sale	143,837		2,075		5.77		451,586		2,376		2.13		Loans held for sale	103,410		1,737		6.72		330,442		2,863		3.48
Securities:	Securities:													Securities:
Taxable	Taxable	2,773,924		12,439		1.79		1,942,647		6,688		1.38		Taxable	2,588,148		13,054		2.02		2,499,822		8,782		1.41
Tax-exempt(1)	Tax-exempt(1)	449,927		2,664		2.37		324,219		2,297		2.83		Tax-exempt(1)	443,996		2,608		2.35		438,380		2,635		2.40
Interest-bearing balances with banks	Interest-bearing balances with banks	663,218		3,458		2.07		1,520,227		592		0.15		Interest-bearing balances with banks	464,229		5,430		4.74		1,463,991		664		0.18
Total interest-earning assets	Total interest-earning assets	14,860,043		145,250		3.89		14,256,421		115,723		3.23		Total interest-earning assets	15,288,317		186,799		4.94		14,841,146		111,945		3.05
Cash and due from banks	Cash and due from banks	191,358						195,095						Cash and due from banks	197,782						206,224
Intangible assets	Intangible assets	967,154						965,960						Intangible assets	1,011,557						965,430

Other assets	Other assets	626,926						712,673						Other assets	660,242						684,464
Total assets	Total assets	$	16,645,481					$	16,130,149					Total assets	$	17,157,898					$	16,697,264
Liabilities and shareholders’ equity	Liabilities and shareholders’ equity													Liabilities and shareholders’ equity
Interest-bearing liabilities:	Interest-bearing liabilities:													Interest-bearing liabilities:
Deposits:	Deposits:													Deposits:
Interest-bearing demand(2)	Interest-bearing demand(2)	$	6,462,940	$	6,061	0.37	%	$	6,231,718	$	3,821	0.24	%	Interest-bearing demand(2)	$	6,066,770	$	20,298	1.36	%	$	6,636,392	$	3,647	0.22	%
Savings deposits	Savings deposits	1,134,665		155		0.05		1,006,847		192		0.08		Savings deposits	1,052,802		826		0.32		1,097,560		139		0.05
Brokered deposits														Brokered deposits	395,942		4,318		4.42		—		—		—
Time deposits	Time deposits	1,240,439		1,025		0.33		1,506,192		2,959		0.78		Time deposits	1,564,658		7,424		1.92		1,374,722		1,851		0.55
Total interest-bearing deposits	Total interest-bearing deposits	8,838,044		7,241		0.33		8,744,757		6,972		0.32		Total interest-bearing deposits	9,080,172		32,866		1.47		9,108,674		5,637		0.25
Borrowed funds	Borrowed funds	572,376		5,574		3.88		482,709		3,749		3.08		Borrowed funds	1,281,552		15,404		4.86		485,777		4,925		4.08
Total interest-bearing liabilities	Total interest-bearing liabilities	9,410,420		12,815		0.54		9,227,466		10,721		0.46		Total interest-bearing liabilities	10,361,724		48,270		1.89		9,594,451		10,562		0.44
Noninterest-bearing deposits	Noninterest-bearing deposits	4,867,314						4,470,262						Noninterest-bearing deposits	4,386,998						4,651,793
Other liabilities	Other liabilities	194,339						212,990						Other liabilities	222,382						201,353
Shareholders’ equity	Shareholders’ equity	2,173,408						2,219,431						Shareholders’ equity	2,186,794						2,249,667
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	16,645,481					$	16,130,149					Total liabilities and shareholders’ equity	$	17,157,898					$	16,697,264
Net interest income/net interest margin	Net interest income/net interest margin			$	132,435	3.54	%			$	105,002	2.93	%	Net interest income/net interest margin			$	138,529	3.66	%			$	101,383	2.76	%

(1)U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which the Company operates.

(2)Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.

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Nine Months Ended September 30,
2022 2021
Average
Balance Interest
Income/
Expense Yield/
Rate Average
Balance Interest
Income/
Expense Yield/
Rate
Assets
Interest-earning assets:
Loans held for investment $ 10,474,305 $ 329,227 4.20 % $ 10,431,436 $ 327,625 4.20 %
Loans held for sale 233,266 7,524 4.30 439,954 8,980 2.73
Securities:
Taxable 2,653,735 31,576 1.59 1,505,611 17,077 1.51
Tax-exempt(1)
446,762 8,018 2.39 316,159 6,915 2.92
Interest-bearing balances with banks 1,041,145 6,076 0.78 1,176,378 1,121 0.13
Total interest-earning assets 14,849,213 382,421 3.44 13,869,538 361,718 3.49
Cash and due from banks 201,436 198,955
Intangible assets 967,023 967,458
Other assets 640,403 687,159
Total assets $ 16,658,075 $ 15,723,110
Liabilities and shareholders’ equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand(2)
$ 6,556,454 $ 13,306 0.27 % $ 6,083,179 $ 11,821 0.26 %
Savings deposits 1,123,433 441 0.05 953,391 547 0.08
Time deposits 1,305,800 4,149 0.42 1,575,220 10,552 0.90
Total interest-bearing deposits 8,985,687 17,896 0.27 8,611,790 22,920 0.36
Borrowed funds 534,296 15,386 3.84 483,230 11,327 3.13
Total interest-bearing liabilities 9,519,983 33,282 0.47 9,095,020 34,247 0.50
Noninterest-bearing deposits 4,745,409 4,202,364
Other liabilities 192,744 223,796
Shareholders’ equity 2,199,939 2,201,930
Total liabilities and shareholders’ equity $ 16,658,075 $ 15,723,110
Net interest income/net interest margin $ 349,139 3.14 % $ 327,471 3.16 %

~~(1)U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which the Company operates.~~

~~(2)Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.~~

The average balances of nonaccruing assets are included in the tables above. 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 margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes in volume and mix and pricing decisions. External factors include changes in market interest rates, competition and other factors affecting the banking industry in general, and the shape of the interest rate yield curve. The ~~rising interest rate environment this year coupled with steady loan growth were the~~ largest contributing factors to the increase in net interest income for the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, as compared to the same ~~periods~~period in ~~2021.~~2022, were the rising interest rate environment throughout 2022 and thus far in 2023, for both interest-earning assets and interest-bearing liabilities, coupled with steady loan growth, offset by the Company’s decision to increase on-balance sheet liquidity following the bank failures in March 2023. The Company has continued to focus on ~~lowering, or at least~~ mitigating increases in the cost of funding through ~~growing~~maintaining noninterest-bearing deposits, staying disciplined yet competitive in pricing on interest-bearing deposits in the current rising rate environment and accessing alternative sources of ~~liquidity. During~~liquidity, such as brokered deposits. In the first ~~six months~~quarter of ~~2022,~~2023, however, ensuring the safe and sound operation of the Bank in light of industry-wide conditions was management’s paramount concern, which led to the Company ~~also increased~~electing to significantly increase its ~~purchases of investment securities~~brokered deposits and borrowed funds in ~~order to mitigate~~ the ~~pressure on net interest margin. During the third~~first quarter of ~~2022,~~2023, as compared to the ~~Company slowed its purchases~~same quarter in 2022.

Table of ~~investment securities, and cash flows were primarily reinvested in the securities portfolio or used to fund loan growth.~~Contents

The following tables set 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 three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, as compared to

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the same ~~periods~~period in ~~2021~~2022 (the changes attributable to the combined impact of yield/rate and volume have been allocated on a pro-rata basis using the absolute value of amounts calculated):


		Three Months Ended September 30, 2022 Compared to the Three Months Ended September 30, 2021							Three Months Ended March 31, 2023 Compared to the Three Months Ended March 31, 2022
		Volume		Rate		Net			Volume		Rate		Net
Interest income:	Interest income:							Interest income:
Loans held for investment	Loans held for investment	$	8,763	$	12,082	$	20,845	Loans held for investment	$	16,897	$	50,072	$	66,969
Loans held for sale	Loans held for sale	(2,431)		2,130		(301)		Loans held for sale	(2,716)		1,590		(1,126)
Securities:	Securities:							Securities:
Taxable	Taxable	3,320		2,430		5,750		Taxable	334		3,938		4,272
Tax-exempt	Tax-exempt	792		(425)		367		Tax-exempt	33		(60)		(27)
Interest-bearing balances with banks	Interest-bearing balances with banks	(514)		3,380		2,866		Interest-bearing balances with banks	(755)		5,521		4,766
Total interest-earning assets	Total interest-earning assets	9,930		19,597		29,527		Total interest-earning assets	13,793		61,061		74,854
Interest expense:	Interest expense:							Interest expense:
Interest-bearing demand deposits	Interest-bearing demand deposits	147		2,093		2,240		Interest-bearing demand deposits	(340)		16,991		16,651
Savings deposits	Savings deposits	22		(59)		(37)		Savings deposits	(6)		693		687
Brokered deposits								Brokered deposits	4,318		—		4,318
Time deposits	Time deposits	(451)		(1,483)		(1,934)		Time deposits	289		5,284		5,573
Borrowed funds	Borrowed funds	760		1,065		1,825		Borrowed funds	9,433		1,046		10,479
Total interest-bearing liabilities	Total interest-bearing liabilities	478		1,616		2,094		Total interest-bearing liabilities	13,694		24,014		37,708
Change in net interest income	Change in net interest income	$	9,452	$	17,981	$	27,433	Change in net interest income	$	99	$	37,047	$	37,146

		Nine months ended September 30, 2022 Compared to the Nine Months Ended September 30, 2021
		Volume		Rate		Net
Interest income:
Loans held for investment		$	1,438	$	164	$	1,602
Loans held for sale		(5,301)		3,845		(1,456)
Securities:
Taxable		13,623		876		14,499
Tax-exempt		2,494		(1,391)		1,103
Interest-bearing balances with banks		(143)		5,098		4,955
Total interest-earning assets		12,111		8,592		20,703
Interest expense:
Interest-bearing demand deposits		945		540		1,485
Savings deposits		86		(192)		(106)
Time deposits		(1,571)		(4,832)		(6,403)
Borrowed funds		1,284		2,775		4,059
Total interest-bearing liabilities		744		(1,709)		(965)
Change in net interest income		$	11,367	$	10,301	$	21,668

Interest income, on a tax equivalent basis, was ~~$145,250 and $382,421, respectively,~~$186,799 for the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, as compared to ~~$115,723 and $361,718,~~$111,945 for the same ~~periods~~period in ~~2021.~~2022. The increase in interest income, on a tax equivalent basis, for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 as compared to the same time ~~periods~~period in ~~2021~~2022 is due primarily to ~~continued loan growth as well as the~~ additional interest rate increases by the Federal Reserve since March 2022, coupled with an improved mix of earning assets as excess cash was deployed into higher yielding assets since March 2022.

The following table presents the percentage of total average earning assets, by type and yield, for the periods presented:

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		Percentage of Total Average Earning Assets				Yield					Percentage of Total Average Earning Assets				Yield
		Three Months Ended				Three Months Ended					Three Months Ended				Three Months Ended
		September 30,				September 30,					March 31,				March 31,
		2022		2021		2022		2021			2023		2022		2023		2022
Loans held for investment, excl. PPP		72.83	%	69.38	%	4.57	%	4.02	%
Paycheck Protection Program		0.04		0.89		0.29		10.95
Loans held for investment										Loans held for investment	76.45	%	68.11	%	5.68	%	3.88	%
Loans held for sale	Loans held for sale	0.97		3.17		5.77		2.13		Loans held for sale	0.68		2.23		6.72		3.48
Securities	Securities	21.69		15.90		1.87		1.59		Securities	19.83		19.80		2.07		1.55
Other	Other	4.47		10.66		2.07		0.15		Other	3.04		9.86		4.74		0.18
Total earning assets	Total earning assets	100.00	%	100.00	%	3.89	%	3.23	%	Total earning assets	100.00	%	100.00	%	4.94	%	3.05	%

Percentage of Total Average Earning Assets Yield
Nine Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Loans held for investment excl. PPP 70.42 % 71.04 % 4.20 % 4.12 %
Paycheck Protection Program 0.12 4.17 5.22 5.62
Loans held for sale 1.57 3.17 4.30 2.73
Securities 20.88 13.14 1.70 1.76
Interest-bearing balances with banks 7.01 8.48 0.78 0.13
Total earning assets 100.00 % 100.00 % 3.44 % 3.49 %

For the ~~third~~first quarter of ~~2022,~~2023, interest income on loans held for investment, on a tax equivalent basis, increased ~~$20,845~~$66,969 to ~~$124,614~~$163,970 from ~~$103,770~~$97,001 for the same period in ~~2021. For~~2022. In addition to loan growth since the ~~nine months ended September 30,~~first quarter of 2022, ~~interest income on loans held for investment, on a tax equivalent basis, increased $1,602 to $329,227 from $327,625 in~~ the ~~same period in 2021. The~~ Federal Reserve began to raise interest rates in March 2022, which positively impacted the ~~Company's~~Company’s loan pricing, and the average balance of loans held for investment increased $1,580,023 from March 2022, thereby resulting in the increase in interest income on loans held for investment for the ~~quarterly and year-to-date periods in 2022~~first quarter of 2023 as compared to the corresponding periods in 2021. Interest income attributable to PPP loans included in loan interest income for the three months ended September 30, 2022, was $5, which consisted of $17 in interest income and $12 in amortization of net origination costs, as compared to $3,503 for the three months ended September 30, 2021, which consisted of $306 in interest income and $3,197 in accretion of net origination fees. Interest income attributable to PPP loans included in loan interest income for the nine months ended September 30, 2022, was $697, which consisted of $130 in interest income and $567 in accretion of net origination fees, as compared to $24,310 for the nine months ended September 30, 2021, which consisted of $4,222 in interest income and $20,088 in accretion of net origination fees. The PPP origination fees, net of agent fees paid and other origination costs, are being accreted into interest income over the life of the loan. If a PPP loan is forgiven in whole or in part, as provided under the CARES Act, the Company will recognize the non-accreted portion of the net origination fee attributable to the forgiven portion of such loan as of the date of the final forgiveness determination. PPP loans did not impact margin or loan yield during the three or nine months ended September 30, 2022. PPP loans increased margin and loan yield by seven basis points and nine basis points, respectively, in the thirdfirst quarter of ~~2021, and 11 basis points and eight basis points, respectively, in the first nine months of 2021.~~2022.

The impact from interest income collected on problem loans and purchase accounting adjustments on loans to total interest income on loans held for investment, loan yield and net interest margin is shown in the following table for the periods presented.

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		Three Months Ended						Nine Months Ended							Three Months Ended
		September 30,						September 30,							March 31,
		2022			2021			2022			2021				2023			2022
Net interest income collected on problem loans	Net interest income collected on problem loans	$	78		$	316		$	2,788		$	3,835		Net interest income collected on problem loans	$	392		$	434
Accretable yield recognized on purchased loans(1)	Accretable yield recognized on purchased loans(1)	1,317			2,871			4,573			8,597			Accretable yield recognized on purchased loans(1)	670			1,235
Total impact to interest income on loans	Total impact to interest income on loans	$	1,395		$	3,187		$	7,361		$	12,432		Total impact to interest income on loans	$	1,062		$	1,669

Impact to loan yield	Impact to loan yield	0.05		%	0.13		%	0.09		%	0.16		%	Impact to loan yield	0.04		%	0.07		%

Impact to net interest margin	Impact to net interest margin	0.04		%	0.09		%	0.07		%	0.12		%	Impact to net interest margin	0.03		%	0.05		%

(1)Includes additional interest income recognized in connection with the acceleration of paydowns and payoffs from purchased loans of ~~$713~~$261 and ~~$1,649~~$373 for the ~~third~~first quarter of ~~2022~~2023 and ~~2021, respectively. The impact was $2,269 and $4,145 for the nine months ended September 30,~~ 2022, ~~and 2021,~~ respectively. This additional interest income increased total loan yield by ~~three and seven~~one basis ~~points~~point for the ~~third~~first quarter of ~~2022~~2023 and ~~2021, respectively,~~2022, while increasing net interest margin by ~~two and five~~one basis ~~points~~point for the same respective periods. For the nine months ended September 30, 2022 and 2021, the additional interest income increased total loan yields by three and five basis points, respectively, while increasing net interest margin by two and four basis points, respectively.

For the ~~third~~first quarter of ~~2022,~~2023, interest income on loans held for sale (consisting of mortgage loans held for sale) decreased ~~$301~~$1,126 to ~~$2,075~~$1,737 from ~~$2,376~~$2,863 for the same period in 2021. For the nine months ended September 30, 2022, interest income on loans held for sale (consisting of mortgage loans held for sale), decreased $1,456 to $7,524 from $8,980 for the same period in 2021.2022.

Investment income, on a tax equivalent basis, increased ~~$6,118~~$4,245 to ~~$15,103~~$15,662 for the ~~third~~first quarter of ~~2022~~2023 from ~~$8,985~~$11,417 for the ~~third~~first quarter of ~~2021. Investment income, on a tax equivalent basis, increased $15,602 to $39,594 for the nine months ended September 30, 2022 from $23,992 for the same period in 2021.~~2022. The tax equivalent yield on the investment portfolio for the ~~third~~first quarter of ~~2022~~2023 was ~~1.87%~~2.07%, up 2852 basis points from ~~1.59%~~1.55% for the same period in ~~2021.~~2022. The ~~tax equivalent yield on the investment portfolio for the nine months ended September 30, 2022 was 1.70%, down 6 basis points from 1.76% in the same period in 2021. The decrease~~increase in taxable equivalent yield on securities for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 as compared to the same period in ~~2021~~2022 was ~~a result~~due to purchases of ~~the low interest rate environment during the first half of the year before the Federal Reserve rate increases began to be seen~~higher yielding securities. The increase in ~~investment security yields. The~~yield, coupled with growth in the ~~Company’s investment~~ securities portfolio during 2022 led to the ~~year offset the loss of~~growth in investment income, ~~due to lower yield~~ on ~~securities and caused the increase in taxable~~a tax equivalent ~~yield for the three months ended September 30, 2022 as compared to the same period in 2021.~~basis.

Interest expense was ~~$12,815~~$48,270 for the ~~third~~first quarter of ~~2022~~2023 as compared to ~~$10,721~~$10,562 for the same period in ~~2021. Interest expense for the nine months ended September 30, 2022 was $33,282 as compared to $34,247 for the same period in 2021.~~2022.

The following tables present, 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 the periods presented:


		Percentage of Total Average Deposits and Borrowed Funds				Cost of Funds					Percentage of Total Average Deposits and Borrowed Funds				Cost of Funds
		Three Months Ended				Three Months Ended					Three Months Ended				Three Months Ended
		September 30,				September 30,					March 31,				March 31,
		2022		2021		2022		2021			2023		2022		2023		2022
Noninterest-bearing demand	Noninterest-bearing demand	34.09	%	32.64	%	—	%	—	%	Noninterest-bearing demand	29.74	%	32.65	%	—	%	—	%
Interest-bearing demand	Interest-bearing demand	45.27		45.49		0.37		0.24		Interest-bearing demand	41.13		46.59		1.36		0.22
Savings	Savings	7.95		7.35		0.05		0.08		Savings	7.14		7.70		0.32		0.05
Brokered deposits										Brokered deposits	2.68		—		4.42		—
Time deposits	Time deposits	8.69		11.00		0.33		0.78		Time deposits	10.61		9.65		1.92		0.55
Short term borrowings	Short term borrowings	0.99		0.09		1.30		0.29		Short term borrowings	5.78		0.19		4.31		0.48
Long-term Federal Home Loan Bank advances	Long-term Federal Home Loan Bank advances	—		1.10		—		0.01		Long-term Federal Home Loan Bank advances	—		0.01		—		1.86
Subordinated notes	Subordinated notes	2.23		1.52		4.55		4.79		Subordinated notes	2.15		2.43		5.33		4.26
Other borrowed funds	Other borrowed funds	0.78		0.81		5.24		4.36		Other borrowed funds	0.77		0.78		7.67		4.41
Total deposits and borrowed funds	Total deposits and borrowed funds	100.00	%	100.00	%	0.36	%	0.31	%	Total deposits and borrowed funds	100.00	%	100.00	%	1.33	%	0.30	%

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Percentage of Total Average Deposits and Borrowed Funds Cost of Funds
Nine Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Noninterest-bearing demand 33.27 % 31.60 % — % — %
Interest-bearing demand 45.96 45.75 0.27 0.26
Savings 7.88 7.17 0.05 0.08
Time deposits 9.15 11.85 0.42 0.90
Short-term borrowings 0.66 0.10 0.98 0.30
Long-term Federal Home Loan Bank advances — 1.14 1.88 0.03
Subordinated notes 2.30 1.56 4.39 4.97
Other long term borrowings 0.78 0.83 4.66 4.27
Total deposits and borrowed funds 100.00 % 100.00 % 0.31 % 0.34 %

Interest expense on deposits was ~~$7,241~~$32,866 and ~~$6,972~~$5,637 for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively. The cost of total deposits was ~~0.21% for both periods. Interest expense on deposits was $17,896~~0.99% and ~~$22,920~~0.17% for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and the cost of total deposits was 0.17% and 0.24% for the same respective periods.~~respectively. The ~~decrease~~increase in both deposit expense and cost ~~for the nine months ended September 30, 2022 compared to the same period in 2021~~ is attributable to the Company’s efforts to ~~reduce~~offer competitive deposit rates ~~as they repriced~~ in ~~a low~~the rising interest rate ~~environment.~~environment and its decision to maintain additional on-balance sheet liquidity following the bank failures and broader industry concerns about bank liquidity that arose in March 2023. The increase in deposit expense for the third quarter of 2022 compared to the same period in 2021 is due to the recent rising rate environment which has resulted in higher deposit costs, which is expected to continue through the remainder of 2022. During 2022, the Company has continued its efforts to ~~grow and~~ maintain non-interest bearing ~~deposits, and such deposits represent 35.94% of total deposits at September 30, 2022 compared to 33.93% of total deposits at December 31, 2021.~~deposits. Low cost deposits continue to be the preferred choice of funding; however, the Company may rely on brokered deposits or wholesale borrowings when ~~rates are~~ advantageous ~~as well as higher-costing deposits as dictated by liquidity needs.~~or otherwise deemed advisable due to market conditions.

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Interest expense on total borrowings was ~~$5,574~~$15,404 and ~~$3,749~~$4,925 for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively. Interest expense on total borrowings was $15,386 and $11,327 for the nine months ended September 30, 2022 and 2021,~~ respectively. The increase in interest expense is a result of higher average borrowings and interest rates primarily due to ~~the Company's issuance of $200,000 of subordinated notes in November 2021 and $300,000~~an increase in short-term ~~advances from~~FHLB borrowings during the ~~FHLB in September 2022.~~first quarter of 2023.

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
Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
0.98% 1.25% 0.93% 1.53%


Noninterest Income to Average Assets
Three Months Ended March 31,
2023						2022
0.88%						0.91%

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 on the sale of securities and all other noninterest income. Our focus is to develop and enhance our products that generate noninterest income in order to diversify revenue sources. Noninterest income was ~~$41,186~~$37,293 for the ~~third~~first quarter of ~~2022~~2023 as compared to ~~$50,755~~$37,458 for the same period in 2021. Noninterest income was $115,858 for the nine months ended September 30, 2022 as compared to $179,402 for the same period in 2021. This decrease is primarily due to the reduction in mortgage banking income during the first nine months of 2022 (discussed in more detail below) as compared to record production during the first nine months of 2021.2022.

Service charges on deposit accounts include maintenance fees on accounts, per item charges, account enhancement charges for additional packaged benefits and overdraft fees (which encompasses traditional overdraft fees as well as non-sufficient funds fees). Service charges on deposit accounts were ~~$10,216~~$9,120 and ~~$9,337~~$9,562 for the ~~third~~first quarter of ~~2022~~2023 and ~~2021, respectively, and $29,512 and $26,818 for the nine months ended September 30,~~ 2022, ~~and 2021,~~ respectively. Overdraft fees, the largest component of service charges on deposits, were ~~$5,540~~$4,580 for the three months ended ~~September 30, 2022,~~March 31, 2023, as compared to ~~$4,876~~$5,178 for the same period in ~~2021. These fees were $15,967 for the nine months ended September 30, 2022 compared to $13,830 for the same period in 2021.~~2022. The Company ~~plans to eliminate~~eliminated consumer non-sufficient funds fees as well as transfer fees to linked

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customer ~~accounts. These changes will take effect~~accounts effective January 1, 2023. The fees ~~to be~~ eliminated totaled approximately ~~$1,500 and $4,100~~$1,300 for the ~~three and nine months ended September 30, 2022, respectively.~~first quarter of 2022.

Fees and commissions were ~~$4,148~~$4,676 during the ~~third~~first quarter of ~~2022~~2023 as compared to ~~$3,837~~$3,982 for the same period in ~~2021, and were $12,798 for the first nine months of 2022 as compared to $11,847 for the same period in 2021.~~2022. Fees and commissions include fees related to deposit services, such as ATM fees and interchange fees on debit card transactions. For the ~~third~~first quarter of ~~2022,~~2023, interchange fees were ~~$2,341~~$2,327 as compared to ~~$2,685~~$2,431 for the same period in ~~2021. Interchange fees were $7,419 for the nine months ended September 30, 2022 as compared to $7,901 for the same period in 2021.~~2022.

Through Renasant Insurance, we offer a range of commercial and personal insurance products through major insurance carriers. Income earned on insurance products was ~~$3,108~~$2,446 and ~~$2,829~~$2,554 for the three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021, respectively, and was $8,253 and $7,488 for the nine months ended September 30, 2022 and 2021, respectively.~~2022. 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 number of claims paid by insurance carriers. Contingency income, which is included in “Other noninterest income” in the Consolidated Statements of Income, was ~~$10~~$910 and $4$534 for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $559 and $1,057 for the nine months ended September 30, 2022 and 2021,~~ respectively.

Our Wealth Management segment has two ~~primary~~ 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 ~~$5,467~~$5,140 for the ~~third~~first quarter of ~~2022~~2023 compared to ~~$5,371~~$5,924 for the same period in ~~2021, and was $17,102 for the nine months ended September 30, 2022 compared to $15,182 for the same period in 2021.~~2022. The market value of assets under management or administration was ~~$4,842,723~~$4,980,887 and ~~$4,687,357~~$5,021,299 at ~~September 30,~~March 31, 2023 and March 31, 2022, ~~and September 30, 2021,~~ 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~~Interest rate lock commitments and originations of mortgage loans to be sold totaled ~~$359,444~~$629,833 and $258,946, respectively, in the ~~third~~first quarter of ~~2022~~2023 compared to ~~$966,651~~$1,174,146 and $595,045, respectively for the same period in ~~2021. Mortgage loan originations totaled $1,436,158~~2022. The decrease in ~~the nine months ended September 30, 2022 compared to $3,189,474 for the same period in 2021. During the first nine months of 2022~~both interest rate lock commitments and mortgage loan originations ~~continued~~was due to ~~normalize and trend toward pre-pandemic levels while margins on the sale of loans~~material increases in ~~the secondary market compressed as~~mortgage interest rates ~~rose and housing inventories remained below demand. Mortgage banking income was $12,675 and $23,292~~from historically low rates, significantly dampening demand for ~~the three months ended September 30, 2022 and 2021, respectively, and was $30,624 for the first nine months ended September 30, 2022 compared to $94,878 for the same period in 2021. During~~mortgages nationwide. In the third quarter of 2022, the Company sold ~~MSRs relating to~~a portion of its mortgage ~~loans having an aggregate unpaid principal balance~~servicing rights portfolio with a carrying value of ~~$1,700,823 to~~$15,565 for a ~~third party for net proceeds of $18,525, resulting in a~~pre-tax gain of $2,960. Mortgage banking income was $8,517 and $9,633 for the three months ended March 31, 2023 and 2022, respectively. The table below presents the components of mortgage banking income included in noninterest income for the periods presented.

Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Gain on sales of loans, net (1)
$ 5,263 $ 20,116 $ 14,800 $ 71,598
Fees, net 2,405 3,420 8,522 12,841
Mortgage servicing income (loss), net 2,047 (244) 4,342 (3,122)
Gain on sale of MSRs 2,960 — 2,960 —
MSR valuation adjustment — — — 13,561
Mortgage banking income, net $ 12,675 $ 23,292 $ 30,624 $ 94,878

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	Three Months Ended March 31,
	2023		2022
Gain on sales of loans, net (1)	$	4,770	$	6,047
Fees, net	1,806		3,053
Mortgage servicing income, net	1,941		533


Mortgage banking income, net	$	8,517	$	9,633

(1) Gain on sales of loans, net includes pipeline fair value adjustments

Bank-owned life insurance (“BOLI”) income is derived from changes in the cash surrender value of the bank-owned life insurance policies and proceeds received upon the death of covered individuals. BOLI income was ~~$2,296~~$3,003 for the three months ended ~~September 30, 2022~~March 31, 2023 as compared to ~~$1,602~~$2,153 for the same period in ~~2021, and $6,780 for the nine months ended~~

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~~September 30, 2022 as compared to $5,318 for the same period in 2021.~~2022. The Company purchased an additional $80,000 in BOLI policies during the first quarter of 2022. No such purchases were made in the first quarter of 2023.

Other noninterest income was ~~$3,276~~$4,391 and ~~$3,723~~$3,650 for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and was $10,789 and $15,750 for the nine months ended September 30, 2022 and 2021,~~ respectively. Other noninterest income includes income from our SBA banking division, our capital markets division and other miscellaneous income and can fluctuate based on production in our SBA banking ~~division~~and capital markets divisions and recognition of other seasonal income items.

Noninterest Expense

Noninterest Expense to Average Assets
Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
2.42% 2.56% 2.36% 2.80%


Noninterest Expense to Average Assets
Three Months Ended March 31,
2023						2022
2.55%						2.29%

Noninterest expense was ~~$101,574~~$107,708 and ~~$103,999~~$94,105 for the ~~third~~first quarter of ~~2022~~2023 and ~~2021, respectively, and was $293,873 and $328,711 for the nine months ended September 30,~~ 2022, ~~and 2021,~~ respectively.

Salaries and employee benefits ~~decreased $2,652~~increased $7,593 to ~~$66,463~~$69,832 for the ~~third~~first quarter of ~~2022~~2023 as compared to ~~$69,115~~$62,239 for the same period in ~~2021. Salaries and employee benefits decreased $23,822 to $194,282 for the nine months ended September 30, 2022 as compared to $218,104 for the same period in 2021.~~2022. The ~~decrease~~increase in salaries and employee benefits is ~~primarily~~ due to ~~a decrease in mortgage commissions and incentives, driven by the decrease in mortgage production described above, offset by~~ increases in the minimum wage we pay our employees that were implemented in May 2022. The Company also incurred higher levels of performance-based incentive expense and medical and other insurance related expense in the first quarter of 2023. The acquisition of RBC added $1,563 to salaries and employee benefits expense in the first quarter of 2023.

Data processing costs decreased to ~~$3,526~~$3,633 in the ~~third~~first quarter of ~~2022~~2023 from ~~$5,277~~$4,263 for the same period in ~~2021 and were $11,379 for the nine months ended September 30, 2022 as compared to $16,380 for the same period in 2021.~~2022. The decline in the first ~~nine months~~quarter of ~~2022~~2023 as compared to the same period in ~~2021~~2022 is primarily due to the Company's renegotiation of certain vendor contracts. 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 for the ~~third~~first quarter of ~~2022~~2023 was ~~$11,266, down from $11,748~~$11,405, as compared to $11,276 for the same period in 2021. These expenses for the first nine months of 2022 were $33,697, down from $35,660 for the same period in 2021. The decrease in occupancy and equipment expense is primarily attributable to the restructuring and non-renewal or termination of certain branch leases.2022.

For the ~~third~~first quarter of ~~2022~~2023 the Company had expenses of ~~$34~~$30 related to other real estate owned as compared to ~~expenses~~a net gain of ~~$168~~$241 for the same period in ~~2021. The Company experienced a net gain of $394 in other real estate expense for the first nine months of 2022 as compared to expenses of $313 for the same period in 2021.~~2022. Expenses on other real estate owned included write downs of the carrying value to fair value on certain pieces of property held in other real estate owned of ~~$110 and $290~~$14 for the first ~~nine~~three months of ~~2022 and 2021, respectively.~~2022. There were no such write downs during the first quarter of 2023. For the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ other real estate owned with a cost basis of ~~$1,847~~$552 and ~~$4,007,~~$665, respectively, was sold, resulting in a net gain of ~~$611~~$95 and ~~$74,~~$291, respectively.

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 regulations. Professional fees were ~~$3,087~~$3,467 for the ~~third~~first quarter of ~~2022~~2023 as compared to ~~$2,972~~$3,151 for the same period in ~~2021, and $9,016 for the nine months ended September 30, 2022 as compared to $8,566 for the same period in 2021.~~2022.

Advertising and public relations expense was ~~$3,229~~$4,686 for the ~~third~~first quarter of ~~2022~~2023 as compared to ~~$2,922~~$4,059 for the same period in ~~2021, and $10,694 for~~2022. During the ~~nine~~three months ended ~~September 30, 2022 as compared to $9,274 for the same period in 2021. During the nine months ended September 30,~~March 31, 2023 and 2022, the Company contributed approximately ~~$1,350~~$1,067 and $1,000, respectively, to charitable organizations throughout Mississippi ~~Georgia~~ and ~~Alabama,~~Georgia, which contributions are included in our advertising and public relations expense, for which it received a dollar-for-dollar tax credit.

Amortization of intangible assets totaled ~~$1,251~~$1,426 and ~~$1,481~~$1,366 for the ~~third~~first quarter of ~~2022~~2023 and ~~2021, respectively, and $3,927 and $4,618 for the nine months ended September 30,~~ 2022, ~~and 2021,~~ respectively. This amortization relates to finite-lived intangible assets which are being amortized over the useful lives as determined at

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acquisition. These finite-lived intangible assets have remaining estimated useful lives ranging from approximately 1 year to 78 years.

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Communication expenses, those expenses incurred for communication to clients and between employees, were ~~$1,999~~$1,980 for the ~~third~~first quarter of ~~2022~~2023 as compared to ~~$2,198~~$2,027 for the same period in ~~2021. Communication expenses were $5,930 for the nine months ended September 30, 2022 as compared to $6,781 for the same period in 2021.~~2022.

Other noninterest expense includes the provision for unfunded commitments, business development and travel expenses, other discretionary expenses, loan fees expense and other miscellaneous fees and operating expenses. Other noninterest expense was ~~$10,719 and $23,923~~$11,249 for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 as compared to ~~$8,118 and $28,708~~$5,733 for the same ~~periods~~period in ~~2021. There was no provision for unfunded commitments recorded for~~2022. The increase in other noninterest expense is primarily attributable to lower deferred loan origination expense in the ~~third~~first quarter of ~~2022~~2023 compared to the same period in 2022. The amount of loan origination expense deferred is directly correlated to the volume and ~~a recovery~~mix of our loan production during the quarter. A negative provision (recovery) for unfunded commitments of ~~$100~~$1,500 and $550 was recorded for the ~~nine months ended September 30, 2022. The provision for unfunded commitments was $200 for the three~~first quarter of 2023 and ~~nine months ended September 30, 2021.~~2022, respectively.

Efficiency Ratio

Efficiency Ratio
Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Efficiency ratio (GAAP) 58.50 % 66.77 % 63.20 % 64.85 %
Adjusted efficiency ratio (Non-GAAP)(1)
58.78 % 66.06 % 62.47 % 65.66 %


	Efficiency Ratio
	Three Months Ended March 31,
	2023		2022
Efficiency ratio (GAAP)	61.26	%	67.78	%

~~(1)~~A reconciliation of this financial measure from GAAP to non-GAAP can be found under the “Non-GAAP Financial Measures” heading at the end of this Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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 that we must expend 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 equivalent basis and noninterest income. The table above shows the impact on the efficiency ratio of items that (1) the Company does not consider to be part of its core operating activities, such as amortization of intangibles, or (2) the Company incurred in connection with certain transactions where management is unable to accurately predict the timing of when these items will be incurred or, when incurred, the amount of such items, such as, for the third quarter of 2022, the gain from our sale of mortgage servicing rights. 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 the ~~third~~first quarter of 2023 and 2022 was $11,322 and ~~2021 was $13,563 and $11,185, respectively, and $32,355 and $35,572 for the nine months ended September 30, 2022 and 2021,~~$7,935, respectively. The Company recognized tax credits of approximately ~~$1,350~~$1,067 in the first ~~nine months~~quarter of ~~2022~~2023 (as mentioned above in the advertising and public relations discussion) as compared to ~~the one-time state tax credit of $3,460 that reduced income taxes for~~approximately $1,000 in the first ~~nine months~~quarter of ~~2021.~~2022.

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 risk 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 our credit administration department, our 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 approval 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.

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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

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upon certain factors, which include the scoring of the loans. This information is used to assist management in monitoring credit quality. Loan requests of amounts greater than an officer’s lending limit are reviewed for approval by senior credit officers.

For loans with a commercial purpose, 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 110 to 9,95, with 110 rated loans having the least credit risk.

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 to criticized due to a decline in the collateral value or cash flow of the borrower. 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 as described above), with fees associated with the foreclosure being deducted from the sales price. The purchase price is applied to the outstanding loan balance. Any remaining balance is charged-off, which reduces the allowance for credit losses on loans. 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 management believes the uncollectability of a loan balance is confirmed and such losses are reasonably quantified. Net charge-offs for the first ~~nine~~three months of ~~2022~~2023 were ~~$4,763,~~$4,732, or ~~0.06%~~0.16% of average loans (annualized), compared to net charge-offs of ~~$4,906,~~$851, or ~~0.06%~~0.03% of average loans (annualized), for the same period in ~~2021.~~2022. The charge-offs were fully reserved for in the Company’s allowance for credit losses on loans. Subsequent recoveries, if any, are credited to the allowance for credit losses on loans.

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. Management evaluates the adequacy of the allowance on a quarterly basis.

The appropriate level of the allowance is based on an ongoing analysis of the loan portfolio and represents an amount that management deems adequate to provide for inherent losses, including loans evaluated on a collective (pooled) basis and those evaluated on an individual basis as set forth in ASC 326. 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 our risk rating system, regulatory guidance and economic conditions, such as the unemployment rate and change in GDP in the national and local economies 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 future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and provision for credit loss 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 estimated 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.

•The allowance for credit losses for loans that share similar risk characteristics with other loans is calculated on a collective (or pooled) basis, where such loans are segregated into loan portfolio segments. In determining the allowance for credit losses on loans evaluated on a collective basis, the Company further categorizes the loan segments based on risk rating. The Company uses two CECL models: (1) for the Real Estate - 1-4 Family Mortgage, Real Estate - Construction and the Installment Loans to Individuals portfolio segments, the Company uses a loss rate model, based on average historical life-of-loan loss rates, 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

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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.

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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 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.

•For loans that do not share similar risk characteristics with other loans, an individual analysis is performed to determine the expected credit loss. If the 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, third-party, local appraisal firms. The fair value of the collateral derived from the 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 for loans that are 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.

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, among others. Also, management reviews past due ratios by officer, community bank and the Company as a whole.

The following table presents the allocation of the allowance for credit losses on loans by loan category and the percentage of loans in each category to total loans as of the dates presented:


		September 30, 2022				December 31, 2021			September 30, 2021				March 31, 2023				December 31, 2022				March 31, 2022
		Balance		% of Total			Balance		% of Total		Balance			% of Total			Balance		% of Total			Balance		% of Total		Balance		% of Total
Commercial, financial, agricultural	Commercial, financial, agricultural	$	30,503	13.63	%		$	33,922	14.20	%	$	34,977		14.34	%	Commercial, financial, agricultural	$	44,678	14.79	%		$	44,255	14.46	%	$	33,606	14.02	%
Lease financing	Lease financing	2,314		0.93	%		1,486		0.76	%	1,570			0.79	%	Lease financing	2,437		1.03	%		2,463		0.99	%	1,582		0.87	%
Real estate – construction	Real estate – construction	18,744		10.94	%		16,419		11.03	%	16,169			10.89	%	Real estate – construction	19,959		12.10	%		19,114		11.49	%	18,411		11.85	%
Real estate – 1-4 family mortgage	Real estate – 1-4 family mortgage	43,532		28.17	%		32,356		27.19	%	32,181			27.21	%	Real estate – 1-4 family mortgage	45,981		27.87	%		44,727		27.78	%	36,848		27.54	%
Real estate – commercial mortgage	Real estate – commercial mortgage	69,267		45.17	%		68,940		45.39	%	73,895			45.27	%	Real estate – commercial mortgage	72,770		43.23	%		71,798		44.20	%	65,231		44.39	%
Installment loans to individuals	Installment loans to individuals	9,996		1.16	%		11,048		1.43	%	11,246			1.50	%	Installment loans to individuals	9,467		0.98	%		9,733		1.08	%	10,790		1.33	%
Total	Total	$	174,356	100.00	%		$	164,171	100.00	%	$	170,038		100.00	%	Total	$	195,292	100.00	%		$	192,090	100.00	%	$	166,468	100.00	%

The provision for credit losses on loans charged to operating expense is an amount which, 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 of ~~$9,800 in the third quarter of 2022 and $13,300~~$7,960 in the first ~~nine months~~quarter of ~~2022,~~2023, as compared to ~~a $1,200 recovery~~$1,500 in the first quarter of ~~provision for credit losses recorded for the three and nine months of 2021.~~2022. The Company’s allowance for credit losses model considers economic projections, primarily the national unemployment rate and GDP, over a reasonable and supportable period of two years. The provision activity during the current quarter was primarily driven by ~~strong~~ loan ~~growth.~~growth coupled with a slight deterioration in our economic forecast.

The table below reflects the activity in the allowance for credit losses on loans for the periods presented:

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Three Months Ended Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Balance at beginning of period $ 166,131 $ 172,354 $ 164,171 $ 176,144
Impact of PCD loans acquired during the period — — 1,648 —
Charge-offs
Commercial, financial, agricultural 373 1,225 4,714 5,907
Lease financing — 13 7 13
Real estate – construction — — — 52
Real estate – 1-4 family mortgage 208 276 532 529
Real estate – commercial mortgage 1,956 184 2,670 416
Installment loans to individuals 722 1,281 2,351 4,286
Total charge-offs 3,259 2,979 10,274 11,203
Recoveries
Commercial, financial, agricultural 415 418 1,982 940
Lease financing 113 11 136 36
Real estate – construction — — — 13
Real estate – 1-4 family mortgage 378 193 725 855
Real estate – commercial mortgage 50 190 397 504
Installment loans to individuals 728 1,051 2,271 3,949
Total recoveries 1,684 1,863 5,511 6,297
Net charge-offs 1,575 1,116 4,763 4,906
Provision for credit losses on loans 9,800 (1,200) 13,300 (1,200)
Balance at end of period $ 174,356 $ 170,038 $ 174,356 $ 170,038
Net charge-offs (annualized) to average loans 0.06 % 0.04 % 0.06 % 0.06 %
Net charge-offs to allowance for credit losses on loans 0.90 % 0.66 % 2.73 % 2.89 %
Allowance for credit losses on loans to:
Total loans 1.57 % 1.70 %
Total loans excluding PPP loans(1)
1.57 % 1.71 %
Nonperforming loans 312.10 % 299.68 %
Nonaccrual loans 321.23 % 304.96 %

~~(1)~~Allowance for credit losses on loans to total loans excluding PPP loans is a non-GAAP financial measure. A reconciliation of this financial measure from GAAP to non-GAAP as well as an explanation of why the Company provides non-GAAP financial measures can be found under the “Non-GAAP Financial Measures” heading at the end of this Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations.


	Three Months Ended
	March 31,
		2023			2022
Balance at beginning of period		$	192,090		$	164,171
Impact of PCD loans acquired during the period		(26)			1,648
Charge-offs
Commercial, financial, agricultural		529			2,102
Lease financing		—			7

Real estate – 1-4 family mortgage		3			163
Real estate – commercial mortgage		5,115			6
Installment loans to individuals		810			779
Total charge-offs		6,457			3,057
Recoveries
Commercial, financial, agricultural		725			1,136
Lease financing		5			12

Real estate – 1-4 family mortgage		24			178
Real estate – commercial mortgage		211			155
Installment loans to individuals		760			725
Total recoveries		1,725			2,206
Net charge-offs		4,732			851
Provision for credit losses on loans		7,960			1,500
Balance at end of period		$	195,292		$	166,468
Net charge-offs (annualized) to average loans		0.16		%	0.03		%
Net charge-offs to allowance for credit losses on loans		2.42		%	0.51		%
Allowance for credit losses on loans to:
Total loans		1.66		%	1.61		%
Nonperforming loans		259.39		%	318.65		%
Nonaccrual loans		344.88		%	320.16		%

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The table below reflects annualized net charge-offs (recoveries) to daily average loans outstanding, by loan category, during the periods presented:


		Nine Months Ended											Three Months Ended
		September 30, 2022					September 30, 2021						March 31, 2023					March 31, 2022
		Net Charge-offs		Average Loans		Annualized Net Charge-offs to Average Loans	Net Charge-offs		Average Loans		Annualized Net Charge-offs to Average Loans		Net Charge-offs		Average Loans		Annualized Net Charge-offs to Average Loans	Net Charge-offs		Average Loans		Annualized Net Charge-offs to Average Loans
Commercial, financial, agricultural	Commercial, financial, agricultural	$	2,732	$	1,474,633	0.25%	$	4,967	$	1,968,541	0.34%	Commercial, financial, agricultural	$	(196)	$	1,721,838	(0.05)%	$	966	$	1,424,565	0.28%
Lease financing	Lease financing	(129)		93,838		(0.18)	(23)		75,620		(0.04)%	Lease financing	(5)		116,164		(0.02)	(5)		84,681		(0.02)%
Real estate – construction	Real estate – construction	—		1,124,713		—	39		986,337		0.01%	Real estate – construction	—		1,310,125		—	—		1,107,529		—%
Real estate – 1-4 family mortgage	Real estate – 1-4 family mortgage	(193)		2,976,081		(0.01)	(326)		2,711,619		(0.02)%	Real estate – 1-4 family mortgage	(21)		3,319,795		—	(15)		2,810,988		—%
Real estate – commercial mortgage	Real estate – commercial mortgage	2,273		4,670,508		0.07	(88)		4,519,793		—%	Real estate – commercial mortgage	4,904		5,101,752		0.39	(149)		4,540,731		(0.01)%
Installment loans to individuals	Installment loans to individuals	80		134,532		0.08	337		169,526		0.27%	Installment loans to individuals	50		118,860		0.17	54		140,017		0.16%
Total	Total	$	4,763	$	10,474,305	0.06%	$	4,906	$	10,431,436	0.06%	Total	$	4,732	$	11,688,534	0.16%	$	851	$	10,108,511	0.03%

The following table provides further details of the Company’s net charge-offs (recoveries) of loans secured by real estate for the periods presented:


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30,				September 30,					March 31,
		2022		2021		2022		2021			2023		2022
Real estate – construction:	Real estate – construction:									Real estate – construction:
Residential	Residential	$	—	$	—	$	—	$	39	Residential	$	—	$	—

Total real estate – construction	Total real estate – construction	—		—		—		39		Total real estate – construction	—		—
Real estate – 1-4 family mortgage:	Real estate – 1-4 family mortgage:									Real estate – 1-4 family mortgage:
Primary	Primary	(59)		115		98		57		Primary	(10)		62
Home equity	Home equity	(44)		(46)		(92)		(109)		Home equity	(3)		22
Rental/investment	Rental/investment	(19)		7		(40)		(192)		Rental/investment	(2)		(2)
Land development	Land development	(48)		7		(159)		(82)		Land development	(6)		(97)
Total real estate – 1-4 family mortgage	Total real estate – 1-4 family mortgage	(170)		83		(193)		(326)		Total real estate – 1-4 family mortgage	(21)		(15)
Real estate – commercial mortgage:	Real estate – commercial mortgage:									Real estate – commercial mortgage:
Owner-occupied	Owner-occupied	(36)		18		490		(98)		Owner-occupied	(78)		(149)
Non-owner occupied	Non-owner occupied	1,951		(24)		1,949		(14)		Non-owner occupied	4,982		—
Land development	Land development	(9)		—		(166)		24		Land development	—		—
Total real estate – commercial mortgage	Total real estate – commercial mortgage	1,906		(6)		2,273		(88)		Total real estate – commercial mortgage	4,904		(149)
Total net charge-offs of loans secured by real estate		$	1,736	$	77	$	2,080	$	(375)
Total net charge-offs (recoveries) of loans secured by real estate										Total net charge-offs (recoveries) of loans secured by real estate	$	4,883	$	(164)

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 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. A roll-forward of the allowance for credit losses on unfunded commitments is shown in the ~~tables~~table below.

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Three Months Ended September 30,		2022		2021
Three Months Ended March 31,						Three Months Ended March 31,	2023		2022
Allowance for credit losses on unfunded loan commitments:	Allowance for credit losses on unfunded loan commitments:					Allowance for credit losses on unfunded loan commitments:
Beginning balance	Beginning balance	$	19,935	$	20,535	Beginning balance	$	20,118	$	20,035

Provision for (recovery of provision for) credit losses on unfunded loan commitments (included in other noninterest expense)	Provision for (recovery of provision for) credit losses on unfunded loan commitments (included in other noninterest expense)	—		(200)		Provision for (recovery of provision for) credit losses on unfunded loan commitments (included in other noninterest expense)	(1,500)		(550)
Ending balance	Ending balance	$	19,935	$	20,335	Ending balance	$	18,618	$	19,485

Nine Months Ended September 30,		2022		2021
Allowance for credit losses on unfunded loan commitments:
Beginning balance		$	20,035	$	20,535

Recovery of provision for credit losses on unfunded loan commitments (included in other noninterest expense)		(100)		(200)
Ending balance		$	19,935	$	20,335

Nonperforming Assets. Nonperforming assets consist of nonperforming loans and other real estate owned. Nonperforming loans are those on which the accrual of interest has stopped or loans which 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 on loans. 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 tables provide details of the Company’s ~~non purchased and purchased~~ nonperforming assets as of the dates presented.

Non Purchased Purchased Total
September 30, 2022
Nonaccruing loans $ 42,332 $ 11,946 $ 54,278
Accruing loans past due 90 days or more 137 1,450 1,587
Total nonperforming loans 42,469 13,396 55,865
Other real estate owned 867 1,545 2,412
Total nonperforming assets $ 43,336 $ 14,941 $ 58,277
Nonperforming loans to total loans 0.50 %
Nonaccruing loans to total loans 0.49 %
Nonperforming assets to total assets 0.35 %
December 31, 2021
Nonaccruing loans $ 30,751 $ 18,613 $ 49,364
Accruing loans past due 90 days or more 1,074 367 1,441
Total nonperforming loans 31,825 18,980 50,805
Other real estate owned 951 1,589 2,540
Total nonperforming assets $ 32,776 $ 20,569 $ 53,345
Nonperforming loans to total loans 0.51 %
Nonaccruing loans to total loans 0.49 %
Nonperforming assets to total assets 0.32 %

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	March 31, 2023			December 31, 2022
Nonaccruing loans	$	56,626		$	56,545
Accruing loans past due 90 days or more	18,664			331
Total nonperforming loans	75,290			56,876
Other real estate owned	4,818			1,763


Total nonperforming assets	$	80,108		$	58,639
Nonperforming loans to total loans	0.64		%	0.49		%
Nonaccruing loans to total loans	0.49		%	0.49		%
Nonperforming assets to total assets	0.46		%	0.35		%

The following table presents nonperforming loans by loan category as of the dates presented:

September 30,
2022 December 31, 2021 September 30,
2021
Commercial, financial, agricultural $ 5,299 $ 13,131 $ 16,027
Lease financing — 11 11
Real estate – construction:
Residential 232 — —
Commercial 1 — —
Total real estate – construction 233 — —
Real estate – 1-4 family mortgage:
Primary 25,130 19,533 17,378
Home equity 1,842 1,719 2,041
Rental/investment 1,240 1,595 1,016
Land development 1,448 257 243
Total real estate – 1-4 family mortgage 29,660 23,104 20,678
Real estate – commercial mortgage:
Owner-occupied 8,554 5,039 5,732
Non-owner occupied 11,725 8,535 13,412
Land development 93 470 366
Total real estate – commercial mortgage 20,372 14,044 19,510
Installment loans to individuals 301 515 514
Total nonperforming loans $ 55,865 $ 50,805 $ 56,740

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	March 31, 2023		December 31, 2022		March 31, 2022
Commercial, financial, agricultural	$	11,382	$	12,543	$	13,177
Lease financing	—		—		—
Real estate – construction:
Residential	152		77		—
Commercial	—		—		—
Total real estate – construction	152		77		—
Real estate – 1-4 family mortgage:
Primary	34,755		30,076		20,331
Home equity	2,278		1,909		2,233
Rental/investment	2,849		1,014		878
Land development	20		82		521
Total real estate – 1-4 family mortgage	39,902		33,081		23,963
Real estate – commercial mortgage:
Owner-occupied	20,389		5,499		5,700
Non-owner occupied	2,963		5,342		8,558
Land development	265		71		485
Total real estate – commercial mortgage	23,617		10,912		14,743
Installment loans to individuals	237		263		359

Total nonperforming loans	$	75,290	$	56,876	$	52,242

Total nonperforming loans as a percentage of total loans were ~~0.50%~~0.64% as of ~~September 30, 2022~~March 31, 2023 as compared to ~~0.51%~~0.49% and ~~0.57%~~0.51% as of December 31, ~~2021~~2022 and ~~September 30, 2021,~~March 31, 2022, respectively. The increase in nonperforming loans is primarily due to two loans, both of which are fully secured and with respect to which the Company expects no loss. The Company’s coverage ratio, or its allowance for credit losses on loans as a percentage of nonperforming loans, was ~~312.10%~~259.39% as of ~~September 30, 2022~~March 31, 2023 as compared to ~~323.14%~~337.73% as of December 31, ~~2021~~2022 and ~~299.68%~~318.65% as of ~~September 30, 2021.~~March 31, 2022.

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 at ~~September 30, 2022.~~March 31, 2023. Management also continually monitors past due loans for potential credit quality deterioration. Total loans 30-89 days past due but still accruing interest were ~~$26,103,~~$50,992, or ~~0.25%~~0.43% of total loans, at ~~September 30, 2022~~March 31, 2023 as compared to ~~$27,604,~~$58,703, or ~~0.26%~~0.51% of total loans, at December 31, ~~2021~~2022 and ~~$14,806,~~$30,617, or ~~0.15%~~0.30% of total loans, at ~~September 30, 2021.~~March 31, 2022.

~~Although not classified as nonperforming~~Certain modifications of loans ~~restructured loans~~made to borrowers experiencing financial difficulty in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension, excluding covenant waivers and modification of contingent acceleration clauses are ~~another category of assets that~~required to be disclosed in accordance with ASU 2022-02 and can contribute to our credit risk. ~~Restructured loans are those for~~The amortized cost of these modifications, all of which ~~concessions have been granted to~~were in the ~~borrower due to a deterioration of the borrower’s financial condition and are performing in accordance with the new terms. Such concessions may include reduction in interest rates or deferral~~form of interest ~~or principal payments. In evaluating whether to restructure a loan, management analyzes~~rate reductions, totaled $1,184 during the ~~long-term financial condition~~first quarter of 2023, of which $1,029 and $155 were Real estate - commercial mortgage, non-owner occupied and Real estate - commercial mortgage, owner-occupied, respectively. These modifications represent an insignificant percentage of total loans. For modified loans in the ~~borrower, including guarantor and collateral support, to determine whether~~Real estate - commercial mortgage, non-owner occupied class, the proposed concessions will increase the likelihood of repayment of principal and interest. Restructured loans that are not performing in accordance with their restructured terms that are either contractually 90 days past due or placed on nonaccrual status are reported as nonperforming loans.

As shown below, restructured loans totaled $27,669 at September 30, 2022 as compared to $20,259 at December 31, 2021 and $20,183 at September 30, 2021. At September 30, 2022, loans restructured throughweighted average interest rate ~~concessions represented 15% of total restructured~~at modification was 6.67% and was reduced to 6.55%. For modified loans ~~while loans restructured by a concession~~ in ~~payment terms represented~~ the ~~remainder. The following table provides further details of~~Real estate - commercial mortgage, owner occupied class, the weighted average interest rate at modification was 5.43% and was reduced to 4.75%. These loan modifications were current and accruing at March 31, 2023, and had no unused commitments. Upon the Company’s ~~restructured loans in compliance with their~~determination that a modified ~~terms as of~~loan has been subsequently deemed uncollectible, the ~~dates presented:~~

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September 30,
2022 December 31, 2021 September 30,
2021
Commercial, financial, agricultural $ 5,232 $ 967 $ 1,062
Real estate – 1-4 family mortgage:
Primary 10,688 11,750 11,415
Home equity 157 298 299
Rental/investment 238 350 354
Land development 90 — —
Total real estate – 1-4 family mortgage 11,173 12,398 12,068
Real estate – commercial mortgage:
Owner-occupied 3,623 5,407 5,546
Non-owner occupied 7,515 1,341 1,357
Land development 72 75 76
Total real estate – commercial mortgage 11,210 6,823 6,979
Installment loans to individuals 54 71 74
Total restructured loans in compliance with modified terms $ 27,669 $ 20,259 $ 20,183

~~Changes in the Company’s restructured loans are set forth in the table below:~~

2022 2021
Balance at January 1, $ 20,259 $ 20,448
Additional advances or loans with concessions 9,150 10,852
Reclassified as performing restructured loan 5,290 150
Reductions due to:
Reclassified as nonperforming (2,076) (2,855)
Paid in full (3,971) (7,341)
Charge-offs — (205)
Paydowns (984) (866)
Balance at September 30, $ 27,668 $ 20,183

The following table shows the principal amounts of nonperforming and restructured loans as of the dates presented. All loans where information exists about possible credit problems that would cause us to have serious doubts about the borrower’s ability to comply with the current repayment termsloan, or portion of the loan, ~~have been reflected in~~is charged off, the ~~table below.~~

September 30,
2022 December 31, 2021 September 30,
2021
Nonaccruing loans $ 54,278 $ 49,364 $ 55,758
Accruing loans past due 90 days or more 1,587 1,441 982
Total nonperforming loans 55,865 50,805 56,740
Restructured loans in compliance with modified terms 27,669 20,259 20,183
Total nonperforming and restructured loans $ 83,534 $ 71,064 $ 76,923

amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted accordingly.

The following table provides details of the Company’s other real estate owned as of the dates presented:

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		September 30, 2022		December 31, 2021		September 30, 2021			March 31, 2023		December 31, 2022		March 31, 2022
Residential real estate	Residential real estate	$	913	$	259	$	503	Residential real estate	$	551	$	699	$	376
Commercial real estate	Commercial real estate	62		761		2,671		Commercial real estate	3,507		62		175
Residential land development	Residential land development	246		305		315		Residential land development	4		246		295
Commercial land development	Commercial land development	1,191		1,215		1,216		Commercial land development	756		756		1,216

Total other real estate owned	Total other real estate owned	$	2,412	$	2,540	$	4,705	Total other real estate owned	$	4,818	$	1,763	$	2,062

Changes in the Company’s other real estate owned were as follows:


		2022		2021			2023		2022
Balance at January 1,		$	2,540	$	5,972
Balance at January 1						Balance at January 1	$	1,763	$	2,540

Transfers of loans	Transfers of loans	1,828		3,171		Transfers of loans	3,623		200

Impairments	Impairments	(110)		(290)		Impairments	—		(14)
Dispositions	Dispositions	(1,847)		(4,007)		Dispositions	(552)		(665)
Other	Other	1		(141)		Other	(16)		1
Balance at September 30,		$	2,412	$	4,705
Balance at March 31						Balance at March 31	$	4,818	$	2,062

Other real estate owned with a cost basis of ~~$1,847~~$552 was sold during the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, resulting in a net gain of ~~$611,~~$95, while other real estate owned with a cost basis of ~~$4,007~~$665 was sold during the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, resulting in a net gain of ~~$74.~~$291.

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, investing 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. Changes in rates may also limit our liquidity, making it more costly for the Company to generate funds to make loans and to satisfy customers wishing to withdraw deposits.

Because of the impact of interest rate fluctuations on our profitability and liquidity, the Board of Directors and management actively monitor and manage our interest rate risk exposure. We have an Asset/Liability Committee (“ALCO”) that is authorized by the Board of Directors to monitor our interest rate sensitivity and liquidity risk and to make decisions relating to ~~that process.~~these processes. The ALCO’s goal is to structure our asset/liability composition to maximize net interest income while managing interest rate risk and preserving adequate liquidity so as to minimize the adverse impact of changes in interest rates on net interest income, liquidity and capital. We regularly monitor liquidity and stress our liquidity position in various simulated scenarios, which are incorporated in our contingency funding plan outlining different potential liquidity environments. 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.

Net interest income forecast 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 future 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 ~~October~~April 1, ~~2022,~~2023, in each case as compared to the result under rates present in the market on ~~September 30, 2022.~~March 31, 2023. The changes in interest rates assume an instantaneous and parallel shift in the yield curve and do not account for changes in the slope of the yield curve.

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		Percentage Change In:				Percentage Change In:
Immediate Change in Rates of (in basis points):	Immediate Change in Rates of (in basis points):	Economic Value Equity (EVE)	Earning at Risk (Net Interest Income)		Immediate Change in Rates of (in basis points):	Economic Value Equity (EVE)	Earning at Risk (Net Interest Income)
		Static	1-12 Months	13-24 Months		Static	1-12 Months	13-24 Months
+400		4.77%	17.57%	23.58%
+300		4.10%	13.40%	17.88%
+200	+200	3.02%	9.25%	12.27%	+200	1.63%	5.71%	5.76%
+100	+100	1.74%	4.72%	6.25%	+100	1.31%	3.01%	3.06%
-100	-100	(4.62)%	(6.77)%	(8.90)%	-100	(3.31)%	(4.05)%	(4.47)%
-200	-200	(12.51)%	(15.06)%	(19.96)%	-200	(9.31)%	(8.80)%	(10.33)%
-300		(23.15)%	(23.25)%	(32.22)%

The rate shock results for the net interest income simulations for the next 24 months produce an asset sensitive position at ~~September 30, 2022.~~March 31, 2023. 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 increments ~~of plus 100, 200, 300 and 400 and minus 100, 200 and 300 basis points.~~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, deposits and ~~deposits,~~borrowings, 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; however, 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, collars, 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 derivatives, see the information under the heading “Loan Commitments and Other Off-Balance Sheet Arrangements” in the Liquidity and Capital Resources section below and Note ~~10,~~9, “Derivative Instruments,” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements. The Liquidity and Capital Resources section also details our available sources of liquidity, both on and off-balance sheet.

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 brokered deposits and time deposits greater than $250,000, are the major source of funds used by the Bank to meet 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 access the brokered deposit market where rates are favorable to other sources of liquidity (especially in light of collateral requirements for certain borrowings, as described below) and core deposits are not sufficient for meeting our current and anticipated liquidity needs. During the first quarter of 2023, brokered deposits increased by $623,813 as compared to the balance at December 31, 2022. Management continually monitors the Bank’s liquidity and non-core dependency ratios to ensure compliance with targets established by the ALCO.

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 approximately ~~17.28%~~17.29% of the carrying value of the total securities portfolio. Securities within our investment portfolio are also used to secure certain deposit types, short-term borrowings and derivative instruments. At ~~September 30, 2022,~~March 31, 2023, securities with a carrying value of ~~$821,633~~$895,300 were pledged to secure public fund deposits and as collateral for short-term borrowings and derivative instruments as compared to securities with a carrying value of ~~$629,174~~$842,601 similarly pledged at December 31, ~~2021.~~2022.

Other sources available for meeting liquidity needs include federal funds purchased and short-term and long-term advances from the FHLB. Interest is charged at the prevailing market rate on federal funds purchased and FHLB advances. There were ~~$300,000~~$725,000 in short-term borrowings from the FHLB at ~~September 30, 2022,~~March 31, 2023, as compared to ~~no such borrowings~~$700,000 at December 31, ~~2021.~~2022. Long-term funds obtained from the FHLB 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 borrowing compares favorably to the rates that we would be required to pay to attract deposits. ~~At September 30, 2022, there~~There were no outstanding long-term advances with the FHLB ~~as compared to $417~~ at March 31, 2023 or December 31, ~~2021.~~2022. The total amount of the remaining credit available to us from the FHLB at ~~September 30, 2022~~March 31, 2023 was ~~$3,818,637.~~$2,923,320. We also maintain lines of credit with other commercial banks totaling $180,000. These are unsecured lines of

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~~$180,000. These are unsecured lines of~~ credit with the majority maturing at various times within the next twelve months. There were no amounts outstanding under these lines of credit at ~~September 30, 2022~~March 31, 2023 or December 31, ~~2021.~~2022.

Finally, we can access the capital markets to meet liquidity ~~needs, as we did in 2016, 2020 and 2021 in the form of subordinated notes.~~needs. The Company maintains a shelf registration statement with the Securities and Exchange Commission (“SEC”). The shelf registration statement, which was effective upon filing, allows the Company to raise capital from time to time through the sale of common stock, preferred stock, depositary shares, debt securities, rights, 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 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 for general corporate purposes or as otherwise described in the prospectus supplement applicable to the offering and could include the expansion of the Company's banking, insurance and wealth management operations as well as other business opportunities. In previous years, we have accessed the capital markets to generate liquidity in the form of common stock and subordinated notes. We have also assumed subordinated notes as part of acquisitions. The carrying value of ~~the~~ subordinated notes, net of unamortized debt issuance costs, was ~~$315,014~~$318,835 at ~~September 30, 2022. We redeemed $30,000 of subordinated notes in the first quarter of 2022.~~March 31, 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 the periods presented:


		Percentage of Total Average Deposits and Borrowed Funds				Cost of Funds					Percentage of Total Average Deposits and Borrowed Funds				Cost of Funds
		Nine Months Ended				Nine Months Ended					Three Months Ended				Three Months Ended
		September 30,				September 30,					March 31,				March 31,
		2022		2021		2022		2021			2023		2022		2023		2022
Noninterest-bearing demand	Noninterest-bearing demand	33.27	%	31.60	%	—	%	—	%	Noninterest-bearing demand	29.74	%	32.65	%	—	%	—	%
Interest-bearing demand	Interest-bearing demand	45.96		45.75		0.27		0.26		Interest-bearing demand	41.13		46.59		1.36		0.22
Savings	Savings	7.88		7.17		0.05		0.08		Savings	7.14		7.70		0.32		0.05
Brokered deposits										Brokered deposits	2.68		—		4.42		—
Time deposits	Time deposits	9.15		11.85		0.42		0.90		Time deposits	10.61		9.65		1.92		0.55
Short-term borrowings	Short-term borrowings	0.66		0.10		0.98		0.30		Short-term borrowings	5.78		0.19		4.31		0.48
Long-term Federal Home Loan Bank advances	Long-term Federal Home Loan Bank advances	—		1.14		1.88		0.03		Long-term Federal Home Loan Bank advances	—		0.01		—		1.86
Subordinated notes	Subordinated notes	2.30		1.56		4.39		4.97		Subordinated notes	2.15		2.43		5.33		4.26
Other borrowed funds	Other borrowed funds	0.78		0.83		4.66		4.27		Other borrowed funds	0.77		0.78		7.67		4.41
Total deposits and borrowed funds	Total deposits and borrowed funds	100.00	%	100.00	%	0.31	%	0.34	%	Total deposits and borrowed funds	100.00	%	100.00	%	1.33	%	0.30	%

The estimated amount of uninsured and uncollateralized deposits at March 31, 2023 was $4,147,639. Collateralized public funds over the FDIC insurance limits were $1,485,827.

Our strategy in choosing funds is focused on minimizing cost in the context of our balance sheet composition, ~~and~~ interest rate risk ~~position.~~position and liquidity forecast. Accordingly, management targets growth of core deposits, focusing on noninterest-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 and evaluate the effect that various funding sources have on our financial position.

Cash and cash equivalents were ~~$479,500~~$847,697 at ~~September 30, 2022,~~March 31, 2023, as compared to ~~$1,476,141~~$1,607,493 at ~~September 30, 2021.~~March 31, 2022. Cash used in investing activities for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 was ~~$1,587,457,~~$153,231, as compared to cash used in investing activities of ~~$372,260~~$584,800 for the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022. Proceeds from the sale, maturity or call of securities within our investment portfolio were ~~$372,484~~$70,766 for the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, as compared to ~~$505,926~~$135,775 for the same period in ~~2021.~~2022. These proceeds were primarily used to fund loan growth in 2023, while they were primarily reinvested into the investment portfolio ~~or, during 2022, used to fund loan growth. Purchases~~in 2022. There were no purchases of investment securities ~~were $800,260 for~~during the first ~~nine~~three months of ~~2022,~~2023, as compared to ~~$1,743,105~~$365,069 for the same period in ~~2021.~~2022.

Cash ~~used in~~provided by financing activities for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 was ~~$274,115,~~$432,318, as compared to cash provided by financing activities of ~~$1,125,027~~$108,512 for the same period in ~~2021.~~2022. Deposits ~~decreased $473,600~~increased $425,054 and ~~increased $1,195,748~~$85,173 for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively.

Restrictions on Bank Dividends, Loans and Advances

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The Company’s liquidity and capital resources, as well as its ability to pay dividends to its shareholders, are 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 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 Mississippi Department of Banking and Consumer Finance (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

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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.

Federal Reserve regulations also limit the amount the Bank may loan to the Company unless such loans are collateralized by specific obligations. At ~~September 30, 2022,~~March 31, 2023, the maximum amount available for transfer from the Bank to the Company in the form of loans was ~~$178,938.~~$182,137. The Company maintains a $3,000 line of credit collateralized by cash with the Bank. There were no amounts outstanding under this line of credit at ~~September 30, 2022.~~March 31, 2023.

These restrictions did not have any impact on the Company’s ability to meet its cash obligations in the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, nor does management expect such restrictions to materially impact the Company’s ability to meet its currently-anticipated cash obligations.

Loan Commitments and Other Off-Balance Sheet Arrangements

The Company enters into loan commitments and standby letters of credit 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, including establishing a provision for credit losses on unfunded commitments. 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 in that while the borrower has the ability to draw upon these commitments at any time, these commitments often expire without being drawn upon. The Company’s unfunded loan commitments and standby letters of credit outstanding were as follows as of the dates presented:


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Loan commitments	Loan commitments	$	3,476,743	$	3,104,940	Loan commitments	$	3,484,332	$	3,577,614
Standby letters of credit	Standby letters of credit	98,075		89,830		Standby letters of credit	120,787		98,357

The Company closely monitors the amount of remaining future commitments to borrowers in light of prevailing economic conditions and adjusts these commitments and the provision related thereto as necessary; the Company also reviews these commitments as part of its analysis of loan concentrations within the loan portfolio. The Company will continue this process as new commitments are entered into or existing commitments are renewed. For a more detailed discussion related to the allowance and provision for credit losses on unfunded loan commitments, refer to the “Risk Management” section above.

The Company utilizes derivative financial instruments, including interest rate contracts such as swaps, collars, caps and/or floors, 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 ~~September 30, 2022,~~March 31, 2023, the Company had notional amounts of ~~$223,569~~$305,029 on interest rate contracts with corporate customers and ~~$223,569~~$305,029 in offsetting interest rate contracts with other financial institutions to mitigate the Company’s rate exposure on its corporate customers’ contracts and certain fixed rate loans.

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 and adjustable rate residential mortgage loans and also enters into forward commitments to sell residential mortgage loans to secondary market investors.

The Company also 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 based on the three-month or one-month LIBOR plus a predetermined spread. The Company entered into

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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 based on the three-month LIBOR plus a predetermined spread and receives a fixed rate of interest. Additionally, the Company entered into an interest rate collar on forecasted borrowings in June 2022 with a 2.25% floor and 4.57% cap, which is accounted for as a cash flow hedge. The Company entered into a second interest rate collar in October 2022 with a 2.75% floor and 4.75% cap. The collar hedging strategy stabilizes interest rate fluctuation by setting both a floor and a cap.

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For more information about the Company’s derivatives, see Note ~~10,~~9, “Derivative Instruments,” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements.

Shareholders’ Equity and Regulatory Matters

Total shareholders’ equity of the Company was ~~$2,092,281~~$2,187,300 at ~~September 30, 2022~~March 31, 2023 compared to ~~$2,209,853~~$2,136,016 at December 31, ~~2021.~~2022. Book value per share was ~~$37.39~~$39.01 and ~~$39.63~~$38.18 at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. The ~~decrease~~growth in shareholders’ equity was attributable to changes in accumulated other comprehensive income and ~~dividends declared, partially~~current period earnings, offset by ~~current period earnings.~~dividends declared.

OnIn October ~~26, 2021,~~2022, the Company’s Board of Directors approved a ~~stock repurchase program, authorizing the Company to repurchase up to $50,000 of its outstanding common stock, which expired in October 2022 and was replaced with a new~~ 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 transactions. The ~~new repurchase~~ program will remain in effect for one year or, if earlier, the repurchase of the entire amount of common stock authorized to be repurchased. The Company did not repurchase any of its common stock under the stock repurchase plan in the first ~~nine months~~quarter of ~~2022.~~2023.

The Company has junior subordinated debentures with a carrying value of ~~$111,807~~$112,276 at ~~September 30, 2022,~~March 31, 2023, of which ~~$108,216~~$108,685 is 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 debentures we include in Tier 1 capital at ~~September 30, 2022.~~March 31, 2023. 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 make any 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 par value of $340,000 at ~~September 30, 2022,~~March 31, 2023, of which ~~$335,657~~$336,104 is included in the Company’s Tier 2 capital.

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 4%

Less than 6%

Critically undercapitalized

Tangible Equity / Total Assets less than 2%

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The following table provides the capital and risk-based capital and leverage ratios for the Company and for Renasant 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)					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			Amount		Ratio		Amount		Ratio		Amount		Ratio
September 30, 2022
March 31, 2023														March 31, 2023
Renasant Corporation:	Renasant Corporation:													Renasant Corporation:
Risk-based capital ratios:	Risk-based capital ratios:													Risk-based capital ratios:
Common equity tier 1 capital ratio	Common equity tier 1 capital ratio	$	1,385,489	10.64	%	$	846,403	6.50	%	$	911,511	7.00	%	Common equity tier 1 capital ratio	$	1,394,401	10.19	%	$	889,836	6.50	%	$	958,285	7.00	%
Tier 1 risk-based capital ratio	Tier 1 risk-based capital ratio	1,493,705		11.47	%	1,041,727		8.00	%	1,106,835		8.50	%	Tier 1 risk-based capital ratio	1,503,086		10.98	%	1,095,183		8.00	%	1,163,632		8.50	%
Total risk-based capital ratio	Total risk-based capital ratio	1,973,206		15.15	%	1,302,159		10.00	%	1,367,267		10.50	%	Total risk-based capital ratio	2,009,552		14.68	%	1,368,979		10.00	%	1,437,428		10.50	%
Leverage capital ratios:	Leverage capital ratios:													Leverage capital ratios:
Tier 1 leverage ratio	Tier 1 leverage ratio	1,493,705		9.39	%	795,621		5.00	%	636,497		4.00	%	Tier 1 leverage ratio	1,503,086		9.18	%	818,319		5.00	%	654,655		4.00	%

Renasant Bank:	Renasant Bank:													Renasant Bank:
Risk-based capital ratios:	Risk-based capital ratios:													Risk-based capital ratios:
Common equity tier 1 capital ratio	Common equity tier 1 capital ratio	$	1,645,539	12.61	%	$	848,358	6.50	%	$	913,616	7.00	%	Common equity tier 1 capital ratio	$	1,651,005	12.03	%	$	891,753	6.50	%	$	960,349	7.00	%
Tier 1 risk-based capital ratio	Tier 1 risk-based capital ratio	1,645,539		12.61	%	1,044,132		8.00	%	1,109,391		8.50	%	Tier 1 risk-based capital ratio	1,651,005		12.03	%	1,097,542		8.00	%	1,166,138		8.50	%
Total risk-based capital ratio	Total risk-based capital ratio	1,789,382		13.71	%	1,305,165		10.00	%	1,370,424		10.50	%	Total risk-based capital ratio	1,821,367		13.28	%	1,371,927		10.00	%	1,440,524		10.50	%
Leverage capital ratios:	Leverage capital ratios:													Leverage capital ratios:
Tier 1 leverage ratio	Tier 1 leverage ratio	1,645,539		10.34	%	795,852		5.00	%	636,681		4.00	%	Tier 1 leverage ratio	1,651,005		10.08	%	818,664		5.00	%	654,931		4.00	%

December 31, 2021
December 31, 2022														December 31, 2022
Renasant Corporation:	Renasant Corporation:													Renasant Corporation:
Risk-based capital ratios:	Risk-based capital ratios:													Risk-based capital ratios:
Common equity tier 1 capital ratio	Common equity tier 1 capital ratio	$	1,314,295	11.18	%	$	763,952	6.50	%	$	822,717	7.00	%	Common equity tier 1 capital ratio	$	1,372,747	10.21	%	$	874,093	6.50	%	$	941,331	7.00	%
Tier 1 risk-based capital ratio	Tier 1 risk-based capital ratio	1,422,077		12.10	%	940,248		8.00	%	999,014		8.50	%	Tier 1 risk-based capital ratio	1,481,197		11.01	%	1,075,807		8.00	%	1,143,045		8.50	%
Total risk-based capital ratio	Total risk-based capital ratio	1,897,167		16.14	%	1,175,610		10.00	%	1,234,076		10.50	%	Total risk-based capital ratio	1,968,001		14.63	%	1,344,758		10.00	%	1,411,996		10.50	%
Leverage capital ratios:	Leverage capital ratios:													Leverage capital ratios:
Tier 1 leverage ratio	Tier 1 leverage ratio	1,422,077		9.15	%	777,289		5.00	%	621,831		4.00	%	Tier 1 leverage ratio	1,481,197		9.36	%	790,853		5.00	%	632,683		4.00	%

Renasant Bank:	Renasant Bank:													Renasant Bank:
Risk-based capital ratios:	Risk-based capital ratios:													Risk-based capital ratios:
Common equity tier 1 capital ratio	Common equity tier 1 capital ratio	$	1,580,904	13.46	%	$	763,713	6.50	%	$	822,460	7.00	%	Common equity tier 1 capital ratio	$	1,630,389	12.10	%	$	876,066	6.50	%	$	943,455	7.00	%
Tier 1 risk-based capital ratio	Tier 1 risk-based capital ratio	1,580,904		13.46	%	939,954		8.00	%	998,702		8.50	%	Tier 1 risk-based capital ratio	1,630,389		12.10	%	1,078,235		8.00	%	1,145,624		8.50	%
Total risk-based capital ratio	Total risk-based capital ratio	1,697,163		14.44	%	1,174,943		10.00	%	1,233,690		10.50	%	Total risk-based capital ratio	1,781,312		13.22	%	1,347,794		10.00	%	1,415,183		10.50	%
Leverage capital ratios:	Leverage capital ratios:													Leverage capital ratios:
Tier 1 leverage ratio	Tier 1 leverage ratio	1,580,904		10.18	%	776,700		5.00	%	621,360		4.00	%	Tier 1 leverage ratio	1,630,389		10.30	%	791,299		5.00	%	633,040		4.00	%

The Company 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. The three-year transitional period began on January 1, 2022.

For more information regarding the capital adequacy guidelines applicable to the Company and Renasant Bank, please refer to Note ~~15,~~14, “Regulatory Matters,” in the Notes to the Consolidated Financial Statements of the Company in Item 1, Financial Statements.

Critical Accounting Estimates

We have identified certain accounting estimates that involve significant judgment and estimates which can have a material impact on our financial condition or results of operations. Our accounting policies are more fully described in Note 1,

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“Significant Accounting Policies,” in the Notes to Consolidated Financial Statements of the Company in Item 8, Financial Statements and Supplementary Data, in our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, filed with the Securities and Exchange Commission on February ~~25, 2022.~~24, 2023. Actual amounts and values as of the balance sheet dates may be materially different than the amounts and values reported due to the inherent uncertainty in the estimation process. Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date.

The critical accounting estimates that we believe to be the most critical in preparing our consolidated financial statements relate to the allowance for credit losses and acquisition accounting, which are described under “Critical Accounting Policies and Estimates” in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. Since December 31, ~~2021,~~2022, there have been no material changes in these critical accounting estimates.

~~Non-GAAP Financial Measures~~

In addition to results presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”), this document contains certain non-GAAP financial measures, namely, an adjusted efficiency ratio and the allowance for credit losses on loans to total loans, excluding PPP loans (the “adjusted allowance ratio”). The adjusted allowance ratio only excludes PPP loans; the adjusted efficiency ratio adjusts GAAP financial measures to exclude the amortization of intangible assets and certain items (such as, among others, merger and conversion related expenses, COVID-19 related expenses and a recovery of a portion of the reserve for unfunded commitments, gains on sales of securities and mortgage servicing rights and asset valuation adjustments) with respect to which the Company is unable to accurately predict when these items will be incurred or, when incurred, the amount thereof. With respect to COVID-19 related expenses in particular, management added these expenses as a charge to exclude when calculating non-GAAP financial measures because the expenses included within this line item are readily quantifiable and possess the same characteristics with respect to management’s inability to accurately predict the timing or amount thereof as the other items excluded when calculating non-GAAP financial measures. Management uses the adjusted efficiency ratio when evaluating capital utilization and adequacy, while it uses the adjusted allowance ratio to determine the adequacy of our allowance with respect to loans not fully guaranteed by the U.S. Small Business Administration. In addition, the Company believes that 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 the amortization of intangible assets and items such as gains from the sale of mortgage servicing rights and COVID-19 related expenses can vary extensively from company to company and, as to intangible assets, 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 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.

~~Table of Contents~~

Adjusted Efficiency Ratio
Three months ended September 30, Nine months ended September 30,
2022 2021 2022 2021
Interest income (fully tax equivalent basis) $ 145,250 $ 115,723 $ 382,421 $ 361,718
Interest expense 12,815 10,721 33,282 34,247
Net interest income (fully tax equivalent basis) 132,435 105,002 349,139 327,471
Total noninterest income 41,186 50,755 115,858 179,402
Net gains on sales of securities — 764 — 2,121
MSR valuation adjustment — — — 13,561
Gain on sale of MSR 2,960 — 2,960 —
Adjusted noninterest income 38,226 49,991 112,898 163,720
Total noninterest expense 101,574 103,999 293,873 328,711
Intangible amortization 1,251 1,481 3,927 4,618
Merger and conversion related expenses — — 687 —
Restructuring (benefit) charges — — 732 307
COVID-19 related expenses — 323 — 1,478
Partial recovery of reserves for unfunded commitments — (200) (100) (200)
Adjusted noninterest expense 100,323 102,395 288,627 322,508
Efficiency Ratio (GAAP) 58.50 % 66.77 % 63.20 % 64.85 %
Adjusted Efficiency Ratio (non-GAAP) 58.78 % 66.06 % 62.47 % 65.66 %

Allowance for Credit Losses on Loans to Total Loans, excluding PPP Loans
September 30, 2022 December 31, 2021
Total loans (GAAP) $ 11,105,004 $ 10,020,914
Less PPP loans 5,476 58,391
Adjusted total loans (non-GAAP) $ 11,099,528 $ 9,962,523
Allowance for Credit Losses on Loans $ 174,356 $ 164,171
ACL/Total loans (GAAP) 1.57 % 1.64 %
ACL/Total loans excluding PPP loans (non-GAAP) 1.57 % 1.65 %

The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. Readers of this Form 10-Q should note that, because there are no standard definitions for the calculations as well as the results, the Company’s calculations may not be comparable to a similarly-titled measure presented by other companies. Also, there may be limits in the usefulness of this measure 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.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our market risk since December 31, ~~2021.~~2022. For additional information regarding our market risk, see our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, filed with the Securities and Exchange Commission on February ~~25, 2022.~~24, 2023.

Item 4. CONTROLS AND PROCEDURES

~~Table of Contents~~

Based on their evaluation as of the end of the period covered by this quarterly report on Form 10-Q, 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, as appropriate to allow timely decisions regarding required disclosure. There was no change in the Company’s internal control over financial reporting during the fiscal quarter covered by this quarterly report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II. OTHER INFORMATION

Item 1A. RISK FACTORS

When evaluating the risk of an investment in the Company’s common stock, potential investors should carefully consider the risk factors appearing in Part I, Item 1A, Risk Factors, of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021. There~~2022. Except as set forth below, there have been no material changes from the risk factors set forth in our Annual Report on Form ~~10-K filed~~10-K.

Our business, financial condition and results of operations could be materially affected by adverse developments impacting the financial services industry, such as recent bank failures or concerns involving liquidity.

Recent bank failures have created general uncertainty and generated concerns regarding the adequacy of liquidity of the banking sector generally, resulting in significant volatility in stock prices of publicly-traded bank holding companies. These developments appear to have negatively impacted some customers’ confidence in banks, prompting these customers to maintain their deposits with larger financial institutions, and additional bank failures or sales of distressed banks in anticipation of their failure could prolong customer concerns. In addition, competition for deposits has increased in recent periods, and the ~~Securities~~cost of funding, both for deposits and ~~Exchange Commission on February 25, 2022.~~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.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

None.

Issuer Purchases of Equity Securities

During the three month period ended ~~September 30, 2022,~~March 31, 2023, the Company repurchased shares of its common stock as indicated in the following table:

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 of Shares or Approximate Dollar Value of Shares That May Yet Be Purchased Under Share Repurchase Plans(2)
July 1, 2022 to July 31, 2022 5,840 $ 30.80 — $ 50,000
August 1, 2022 to August 31, 2022 2,993 33.40 — 50,000
September 1, 2022 to September 30, 2022 64 33.23 — 50,000
Total 8,897 $ 31.69 —


	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 of Shares or Approximate Dollar Value of Shares That May Yet Be Purchased Under Share Repurchase Plans(2)(3)
January 1, 2023 to January 31, 2023	26,331	$	37.59	—	$	100,000
February 1, 2023 to February 28, 2023	—	—		—	100,000
March 1, 2023 to March 31, 2023	45,125	31.08		—	100,000
Total	71,456	$	33.48	—

(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 performance- and time-based restricted stock awards.

(2)The Company announced a ~~$50.0~~$100.0 million stock repurchase program in October ~~2021~~2022 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 third quarter of 2022 under this plan, which expired in October 2022 and was replaced with a $100.0 million stock repurchase program approved in October 2022.~~ 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 first quarter of 2023 under this plan.

~~(2)~~(3)Dollars in thousands

Please refer to the information discussing restrictions on the Company’s ability to pay dividends under the heading “Liquidity and Capital Resources” in Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this report, which is incorporated by reference herein.

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Item 6. EXHIBITS


Exhibit Number						Description

(3)(i)						Articles of Incorporation of Renasant Corporation, as amended (1)

(3)(ii)						Amended and Restated Bylaws of Renasant Corporation (2)

(3)(iii)						Articles of Amendment to the Amended and Restated Bylaws of Renasant Corporation (3)

(3)(iv)						Articles of Amendment to the Amended and Restated Bylaws of Renasant Corporation (4)

(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.

(101)						The following materials from Renasant Corporation’s Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2022~~March 31, 2023 were formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Shareholders’ Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements (Unaudited).

(104)						The cover page of Renasant Corporation’s Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2022,~~March 31, 2023, formatted in Inline XBRL (included in Exhibit 101).

(1)Filed as exhibit 3.1 to the Form 10-Q of the Company filed with the Securities and Exchange Commission (the “Commission”) on May 10, 2016 and incorporated herein by reference.

(2)Filed as exhibit 3(ii) to the Form 8-K of the Company filed with the Commission on July 20, 2018 and incorporated herein by reference.

(3)Filed as exhibit 3(ii) to the Form 8-K of the Company filed with the Commission on April 30, 2021 and incorporated herein by reference.

(4)Filed as exhibit 3(ii) to the Form 8-K of the Company filed with the Commission on January 28, 2022 and incorporated herein by reference.

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.

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SIGNATURES

Pursuant to the requirements 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
		(Registrant)

Date:	~~November 4, 2022~~May 8, 2023	/s/ C. Mitchell Waycaster
		C. Mitchell Waycaster
		President and
		Chief Executive Officer
		(Principal Executive Officer)

Date:	~~November 4, 2022~~May 8, 2023	/s/ James C. Mabry IV
		James C. Mabry IV
		Executive Vice President and
		Chief Financial Officer
		(Principal Financial Officer)

8967


		Page
PART I	Financial Information
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets	1
	Consolidated Statements of Income	2
	Consolidated Statements of Comprehensive Income	3
	Consolidated Statements of Changes in Shareholders’ Equity	4
	Consolidated Statements of Cash Flows	65
	Notes to Consolidated Financial Statements	86

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5641

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	8564

Item 4.	Controls and Procedures	8564

PART II	Other Information


Item 1A.	Risk Factors	8765

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	8765

Item 6.	Exhibits	8866

SIGNATURES		8967


	Carrying Value		Net Proceeds		Gain/(Loss)
Three months ended September 30, 2021


Residential mortgage backed securities:
Government agency mortgage backed securities	$	9,232	$	9,739	$	507
Government agency collateralized mortgage obligations	6,736		6,866		130




Other debt securities	4,283		4,410		127

	$	20,251	$	21,015	$	764
Nine months ended September 30, 2021

Obligations of states and political subdivisions	$	47	$	50	$	3
Residential mortgage backed securities:
Government agency mortgage backed securities	145,572		149,474		3,902
Government agency collateralized mortgage obligations	12,362		12,512		150



Trust preferred securities	12,021		9,960		(2,061)
Other debt securities	4,283		4,410		127

	$	174,285	$	176,406	$	2,121


	September 30, 2022		December 31, 2021
Commercial, financial, agricultural(1)	$	1,435,275	$	1,332,962
Lease financing	108,517		80,192
Real estate – construction:
Residential	359,367		300,988
Commercial	848,941		798,914
Total real estate – construction	1,208,308		1,099,902
Real estate – 1-4 family mortgage:
Primary	2,041,885		1,682,050
Home equity	456,765		423,108
Rental/investment	306,165		268,245
Land development	151,986		135,070
Total real estate – 1-4 family mortgage	2,956,801		2,508,473
Real estate – commercial mortgage:
Owner-occupied	1,368,196		1,329,219
Non-owner occupied	2,963,631		2,446,370
Land development	120,026		110,395
Total real estate – commercial mortgage	4,451,853		3,885,984
Installment loans to individuals	104,246		107,565
Gross loans	10,265,000		9,015,078
Unearned income	(5,160)		(4,067)
Loans, net of unearned income	$	10,259,840	$	9,011,011


	Number of Loans	Pre- Modification Amortized Cost		Post- Modification Amortized Cost
Three months ended September 30, 2022






Real estate – 1-4 family mortgage:
Primary	3	$	436	$	442










Total	3	$	436	$	442

Three months ended September 30, 2021
Commercial, financial, agricultural	1	$	30	$	30





Real estate – 1-4 family mortgage:
Primary	11	1,518		1,538










Total	12	$	1,548	$	1,568


	Number of Loans	Amortized Cost
Totals at January 1, 2022	97	$	14,650
Additional advances or loans with concessions	17	8,944
Reclassified as performing restructured loan	3	1,226
Reductions due to:
Reclassified as nonperforming	(12)	(1,845)
Paid in full	(13)	(1,907)
Charge-offs	—	—
Transfer to other real estate owned	—	—
Principal paydowns	—	(416)
Lapse of concession period	—	—
Totals at September 30, 2022	92	$	20,652


	Number of Loans	Pre- Modification Amortized Cost		Post- Modification Amortized Cost




















Three months ended September 30, 2021






Real estate – 1-4 family mortgage:
Primary	1	$	164	$	164










Total	1	$	164	$	164


	Number of Loans	Recorded Investment
Totals at January 1, 2022	38	$	5,609
Additional advances or loans with concessions	3	206
Reclassified as performing restructured loan	8	4,064
Reductions due to:
Reclassified to nonperforming loans	(6)	(231)
Paid in full	(6)	(2,064)



Principal paydowns	—	(568)

Totals at September 30, 2022	37	$	7,016


	September 30, 2022		December 31, 2021
Commercial, financial, agricultural (1)	$	1,513,091	$	1,423,270
Lease financing	108,517		80,192
Real estate – construction:
Residential	359,754		302,275
Commercial	855,302		802,621
Total real estate – construction	1,215,056		1,104,896
Real estate – 1-4 family mortgage:
Primary	2,144,119		1,816,120
Home equity	499,626		474,604
Rental/investment	322,844		288,474
Land development	161,300		145,048
Total real estate – 1-4 family mortgage	3,127,889		2,724,246
Real estate – commercial mortgage:
Owner-occupied	1,562,952		1,563,351
Non-owner occupied	3,320,116		2,856,947
Land development	133,597		128,739
Total real estate – commercial mortgage	5,016,665		4,549,037
Installment loans to individuals	128,946		143,340
Gross loans	11,110,164		10,024,981
Unearned income	(5,160)		(4,067)
Loans, net of unearned income	11,105,004		10,020,914
Allowance for credit losses on loans	(174,356)		(164,171)
Net loans	$	10,930,648	$	9,856,743


	Purchased OREO		Non Purchased OREO		Total OREO
Balance at January 1, 2022	$	1,589	$	951	$	2,540


Transfers of loans	190		1,638		1,828

Impairments	(96)		(14)		(110)
Dispositions	(137)		(1,710)		(1,847)
Other	(1)		2		1
Balance at September 30, 2022	$	1,545	$	867	$	2,412


			Fair Value
As of December 31, 2021	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	1,877,965	$	1,877,965	$	—	$	—	$	1,877,965
Securities held to maturity	416,357		—		415,552		—		415,552
Securities available for sale	2,386,052		—		2,386,052		—		2,386,052
Loans held for sale	453,533		—		453,533		—		453,533
Loans, net	9,856,743		—		—		9,690,604		9,690,604
Mortgage servicing rights	89,018		—		—		99,425		99,425
Derivative instruments	17,698		—		17,698		—		17,698
Financial liabilities
Deposits	$	13,905,724	$	12,494,342	$	1,408,397	$	—	$	13,902,739
Short-term borrowings	13,947		13,947		—		—		13,947

Federal Home Loan Bank advances	417		—		422		—		422
Junior subordinated debentures	111,373		—		106,682		—		106,682
Subordinated notes	359,419		—		373,950		—		373,950
Derivative instruments	13,803		—		13,803		—		13,803


Adjusted Efficiency Ratio
	Three months ended September 30,						Nine months ended September 30,
	2022			2021			2022			2021
Interest income (fully tax equivalent basis)	$	145,250		$	115,723		$	382,421		$	361,718
Interest expense	12,815			10,721			33,282			34,247
Net interest income (fully tax equivalent basis)	132,435			105,002			349,139			327,471

Total noninterest income	41,186			50,755			115,858			179,402
Net gains on sales of securities	—			764			—			2,121
MSR valuation adjustment	—			—			—			13,561
Gain on sale of MSR	2,960			—			2,960			—
Adjusted noninterest income	38,226			49,991			112,898			163,720

Total noninterest expense	101,574			103,999			293,873			328,711
Intangible amortization	1,251			1,481			3,927			4,618
Merger and conversion related expenses	—			—			687			—

Restructuring (benefit) charges	—			—			732			307
COVID-19 related expenses	—			323			—			1,478
Partial recovery of reserves for unfunded commitments	—			(200)			(100)			(200)
Adjusted noninterest expense	100,323			102,395			288,627			322,508

Efficiency Ratio (GAAP)	58.50		%	66.77		%	63.20		%	64.85		%
Adjusted Efficiency Ratio (non-GAAP)	58.78		%	66.06		%	62.47		%	65.66		%