~~0000715072us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2022-04-012022-06-30~~0000715072rnst:InsuranceMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-30

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 ~~June~~September 30, 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~~New York Stock ~~Market LLC~~Exchange

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 ~~July~~October 31, 2023, ~~56,136,863~~56,141,545 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 ~~June~~September 30, 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)
		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022
Assets	Assets					Assets
Cash and due from banks	Cash and due from banks	$	211,452	$	193,513	Cash and due from banks	$	179,111	$	193,513
Interest-bearing balances with banks	Interest-bearing balances with banks	735,447		382,479		Interest-bearing balances with banks	562,045		382,479
Cash and cash equivalents	Cash and cash equivalents	946,899		575,992		Cash and cash equivalents	741,156		575,992
Securities held to maturity (net of allowance for credit losses of $32 at each of June 30, 2023 and December 31, 2022) (fair value of $1,153,541 and $1,206,540, respectively)		1,273,044		1,324,040
Securities held to maturity (net of allowance for credit losses of $32 at each of September 30, 2023 and December 31, 2022) (fair value of $1,079,123 and $1,206,540, respectively)						Securities held to maturity (net of allowance for credit losses of $32 at each of September 30, 2023 and December 31, 2022) (fair value of $1,079,123 and $1,206,540, respectively)	1,245,595		1,324,040
Securities available for sale, at fair value	Securities available for sale, at fair value	950,930		1,533,942		Securities available for sale, at fair value	909,108		1,533,942
Loans held for sale, at fair value	Loans held for sale, at fair value	249,615		110,105		Loans held for sale, at fair value	241,613		110,105

Loans held for investment, net of unearned income	Loans held for investment, net of unearned income	11,930,516		11,578,304		Loans held for investment, net of unearned income	12,168,023		11,578,304
Allowance for credit losses on loans	Allowance for credit losses on loans	(194,391)		(192,090)		Allowance for credit losses on loans	(197,773)		(192,090)
Loans, net	Loans, net	11,736,125		11,386,214		Loans, net	11,970,250		11,386,214
Premises and equipment, net	Premises and equipment, net	285,952		283,595		Premises and equipment, net	284,368		283,595
Other real estate owned, net	Other real estate owned, net	5,120		1,763		Other real estate owned, net	9,258		1,763
Goodwill	Goodwill	991,665		991,708		Goodwill	991,665		991,708
Other intangible assets, net	Other intangible assets, net	21,381		24,176		Other intangible assets, net	20,070		24,176
Bank-owned life insurance	Bank-owned life insurance	377,649		373,808		Bank-owned life insurance	379,945		373,808
Mortgage servicing rights	Mortgage servicing rights	87,432		84,448		Mortgage servicing rights	90,241		84,448
Other assets	Other assets	298,530		298,385		Other assets	298,352		298,385
Total assets	Total assets	$	17,224,342	$	16,988,176	Total assets	$	17,181,621	$	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	$	3,878,953	$	4,558,756	Noninterest-bearing	$	3,734,197	$	4,558,756
Interest-bearing	Interest-bearing	10,216,408		8,928,210		Interest-bearing	10,422,913		8,928,210
Total deposits	Total deposits	14,095,361		13,486,966		Total deposits	14,157,110		13,486,966
Short-term borrowings	Short-term borrowings	257,305		712,232		Short-term borrowings	107,662		712,232
Long-term debt	Long-term debt	429,630		428,133		Long-term debt	427,399		428,133
Other liabilities	Other liabilities	233,418		224,829		Other liabilities	256,127		224,829
Total liabilities	Total liabilities	15,015,714		14,852,160		Total liabilities	14,948,298		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; 56,132,478 and 55,953,104 shares outstanding, respectively		296,483		296,483
Treasury stock, at cost – 3,164,247 and 3,343,621 shares, respectively		(105,589)		(111,577)
Common stock, $5.00 par value – 150,000,000 shares authorized; 59,296,725 shares issued; 56,140,713 and 55,953,104 shares outstanding, respectively						Common stock, $5.00 par value – 150,000,000 shares authorized; 59,296,725 shares issued; 56,140,713 and 55,953,104 shares outstanding, respectively	296,483		296,483
Treasury stock, at cost – 3,156,012 and 3,343,621 shares, respectively						Treasury stock, at cost – 3,156,012 and 3,343,621 shares, respectively	(105,300)		(111,577)
Additional paid-in capital	Additional paid-in capital	1,301,883		1,302,422		Additional paid-in capital	1,304,891		1,302,422
Retained earnings	Retained earnings	907,312		857,725		Retained earnings	936,573		857,725
Accumulated other comprehensive loss, net of taxes	Accumulated other comprehensive loss, net of taxes	(191,461)		(209,037)		Accumulated other comprehensive loss, net of taxes	(199,324)		(209,037)
Total shareholders’ equity	Total shareholders’ equity	2,208,628		2,136,016		Total shareholders’ equity	2,233,323		2,136,016
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	17,224,342	$	16,988,176	Total liabilities and shareholders’ equity	$	17,181,621	$	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				Six Months Ended					Three Months Ended				Nine Months Ended
		June 30,				June 30,					September 30,				September 30,
		2023		2022		2023		2022			2023		2022		2023		2022
Interest income	Interest income									Interest income
Loans	Loans	$	176,188	$	108,995	$	339,712	$	207,687	Loans	$	184,880	$	125,175	$	524,592	$	332,862
Securities	Securities									Securities
Taxable	Taxable	12,300		10,567		25,553		19,501		Taxable	9,439		12,636		34,992		32,137
Tax-exempt	Tax-exempt	1,700		1,904		3,538		3,805		Tax-exempt	1,230		1,864		4,768		5,669
Other	Other	6,978		1,954		12,408		2,618		Other	10,128		3,458		22,536		6,076
Total interest income	Total interest income	197,166		123,420		381,211		233,611		Total interest income	205,677		143,133		586,888		376,744
Interest expense	Interest expense									Interest expense
Deposits	Deposits	51,391		5,018		84,257		10,655		Deposits	70,906		7,241		155,163		17,896
Borrowings	Borrowings	15,559		4,887		30,963		9,812		Borrowings	7,388		5,574		38,351		15,386
Total interest expense	Total interest expense	66,950		9,905		115,220		20,467		Total interest expense	78,294		12,815		193,514		33,282
Net interest income	Net interest income	130,216		113,515		265,991		213,144		Net interest income	127,383		130,318		393,374		343,462
Provision for credit losses on loans	Provision for credit losses on loans	3,000		2,000		10,960		3,500		Provision for credit losses on loans	5,315		9,800		16,275		13,300

Net interest income after provision for credit losses	Net interest income after provision for credit losses	127,216		111,515		255,031		209,644		Net interest income after provision for credit losses	122,068		120,518		377,099		330,162
Noninterest income	Noninterest income									Noninterest income
Service charges on deposit accounts	Service charges on deposit accounts	9,733		9,734		18,853		19,296		Service charges on deposit accounts	9,743		10,216		28,596		29,512
Fees and commissions	Fees and commissions	4,987		4,668		9,663		8,650		Fees and commissions	4,108		4,148		13,771		12,798
Insurance commissions	Insurance commissions	2,809		2,591		5,255		5,145		Insurance commissions	3,264		3,108		8,519		8,253
Wealth management revenue	Wealth management revenue	5,338		5,711		10,478		11,635		Wealth management revenue	5,986		5,467		16,464		17,102
Mortgage banking income	Mortgage banking income	9,771		8,316		18,288		17,949		Mortgage banking income	7,533		12,675		25,821		30,624
Net loss on sales of securities	Net loss on sales of securities	(22,438)		—		(22,438)		—		Net loss on sales of securities	—		—		(22,438)		—
BOLI income	BOLI income	2,402		2,331		5,405		4,484		BOLI income	2,469		2,296		7,874		6,780

Other	Other	4,624		3,863		9,015		7,513		Other	5,097		3,276		14,112		10,789
Total noninterest income	Total noninterest income	17,226		37,214		54,519		74,672		Total noninterest income	38,200		41,186		92,719		115,858
Noninterest expense	Noninterest expense									Noninterest expense
Salaries and employee benefits	Salaries and employee benefits	70,637		65,580		140,469		127,819		Salaries and employee benefits	69,458		66,463		209,927		194,282
Data processing	Data processing	3,684		3,590		7,317		7,853		Data processing	3,907		3,526		11,224		11,379
Net occupancy and equipment	Net occupancy and equipment	11,865		11,155		23,270		22,431		Net occupancy and equipment	11,548		11,266		34,818		33,697
Other real estate owned	Other real estate owned	51		(187)		81		(428)		Other real estate owned	(120)		34		(39)		(394)
Professional fees	Professional fees	4,012		2,778		7,479		5,929		Professional fees	3,338		3,087		10,817		9,016
Advertising and public relations	Advertising and public relations	3,482		3,406		8,168		7,465		Advertising and public relations	3,474		3,229		11,642		10,694
Intangible amortization	Intangible amortization	1,369		1,310		2,795		2,676		Intangible amortization	1,311		1,251		4,106		3,927
Communications	Communications	2,226		1,904		4,206		3,931		Communications	2,006		1,999		6,212		5,930
Merger and conversion related expenses	Merger and conversion related expenses	—		—		—		687		Merger and conversion related expenses	—		—		—		687
Restructuring charges	Restructuring charges	—		1,187		—		732		Restructuring charges	—		—		—		732

Other	Other	11,839		7,471		23,088		13,204		Other	12,747		10,719		35,835		23,923
Total noninterest expense	Total noninterest expense	109,165		98,194		216,873		192,299		Total noninterest expense	107,669		101,574		324,542		293,873
Income before income taxes	Income before income taxes	35,277		50,535		92,677		92,017		Income before income taxes	52,599		60,130		145,276		152,147
Income taxes	Income taxes	6,634		10,857		17,956		18,792		Income taxes	10,766		13,563		28,722		32,355
Net income	Net income	$	28,643	$	39,678	$	74,721	$	73,225	Net income	$	41,833	$	46,567	$	116,554	$	119,792

Basic earnings per share	Basic earnings per share	$	0.51	$	0.71	$	1.33	$	1.31	Basic earnings per share	$	0.75	$	0.83	$	2.08	$	2.14
Diluted earnings per share	Diluted earnings per share	$	0.51	$	0.71	$	1.33	$	1.30	Diluted earnings per share	$	0.74	$	0.83	$	2.07	$	2.13
Cash dividends per common share	Cash dividends per common share	$	0.22	$	0.22	$	0.44	$	0.44	Cash dividends per common share	$	0.22	$	0.22	$	0.66	$	0.66

See Notes to Consolidated Financial Statements.

Table of Contents

Renasant Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income (Unaudited)

(In Thousands)


		Three Months Ended				Six Months Ended					Three Months Ended				Nine Months Ended
		June 30,				June 30,					September 30,				September 30,
		2023		2022		2023		2022			2023		2022		2023		2022
Net income	Net income	$	28,643	$	39,678	$	74,721	$	73,225	Net income	$	41,833	$	46,567	$	116,554	$	119,792
Other comprehensive income (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	Unrealized holding losses on securities	(15,930)		(56,958)		(399)		(157,420)		Unrealized holding losses on securities	(12,883)		(63,579)		(13,282)		(220,999)
Reclassification adjustment for losses realized in net income	Reclassification adjustment for losses realized in net income	16,816		—		16,816		—		Reclassification adjustment for losses realized in net income	—		—		16,816		—

Amortization of unrealized holding losses (gains) on securities transferred to the held to maturity category		2,252		(164)		4,580		(238)
Amortization of unrealized holding losses on securities transferred to the held to maturity category										Amortization of unrealized holding losses on securities transferred to the held to maturity category	2,947		1,207		7,527		969
Total securities available for sale	Total securities available for sale	3,138		(57,122)		20,997		(157,658)		Total securities available for sale	(9,936)		(62,372)		11,061		(220,030)
Derivative instruments:	Derivative instruments:									Derivative instruments:
Unrealized holding (losses) gains on derivative instruments		(2,361)		6,262		(3,593)		12,641
Unrealized holding gains (losses) on derivative instruments										Unrealized holding gains (losses) on derivative instruments	1,987		1,687		(1,606)		14,328

Total derivative instruments	Total derivative instruments	(2,361)		6,262		(3,593)		12,641		Total derivative instruments	1,987		1,687		(1,606)		14,328
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	86		31		172		62		Amortization of net actuarial loss recognized in net periodic pension cost	86		31		258		93
Total defined benefit pension and post-retirement benefit plans	Total defined benefit pension and post-retirement benefit plans	86		31		172		62		Total defined benefit pension and post-retirement benefit plans	86		31		258		93
Other comprehensive income (loss), net of tax		863		(50,829)		17,576		(144,955)
Other comprehensive (loss) income, net of tax										Other comprehensive (loss) income, net of tax	(7,863)		(60,654)		9,713		(205,609)
Comprehensive income (loss)	Comprehensive income (loss)	$	29,506	$	(11,151)	$	92,297	$	(71,730)	Comprehensive income (loss)	$	33,970	$	(14,087)	$	126,267	$	(85,817)

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 Income (Loss) Total
Six Months Ended June 30, 2023 Shares Amount
Balance at January 1, 2023 55,953,104 $ 296,483 $ (111,577) $ 1,302,422 $ 857,725 $ (209,037) $ 2,136,016
Net income — — — — 46,078 — 46,078
Other comprehensive income — — — — — 16,713 16,713
Comprehensive income 62,791
Cash dividends ($0.22 per share) — — — — (12,561) — (12,561)
Issuance of common stock for stock-based compensation awards 120,554 — 4,018 (6,409) — — (2,391)
Stock-based compensation expense — — — 3,445 — — 3,445
Balance at March 31, 2023 56,073,658 $ 296,483 $ (107,559) $ 1,299,458 $ 891,242 $ (192,324) $ 2,187,300
Net income — $ — $ — $ — $ 28,643 $ — $ 28,643
Other comprehensive income — — — — — 863 863
Comprehensive income 29,506
Cash dividends ($0.22 per share) — — — — (12,573) — (12,573)
Issuance of common stock for stock-based compensation awards 58,820 — 1,970 (970) — — 1,000
Stock-based compensation expense — — — 3,395 — — 3,395
Balance at June 30, 2023 56,132,478 $ 296,483 $ (105,589) $ 1,301,883 $ 907,312 $ (191,461) $ 2,208,628

Common Stock Treasury Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total
Six Months Ended June 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
Net income — — — — 33,547 — 33,547
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

~~See Notes to Consolidated Financial Statements.~~


	Common Stock			Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Nine Months Ended September 30, 2023	Shares	Amount
Balance at January 1, 2023	55,953,104	$	296,483	$	(111,577)	$	1,302,422	$	857,725	$	(209,037)	$	2,136,016

Net income	—	—		—		—		46,078		—		46,078
Other comprehensive income	—	—		—		—		—		16,713		16,713
Comprehensive income												62,791
Cash dividends ($0.22 per share)	—	—		—		—		(12,561)		—		(12,561)


Issuance of common stock for stock-based compensation awards	120,554	—		4,018		(6,409)		—		—		(2,391)
Stock-based compensation expense	—	—		—		3,445		—		—		3,445

Balance at March 31, 2023	56,073,658	$	296,483	$	(107,559)	$	1,299,458	$	891,242	$	(192,324)	$	2,187,300
Net income	—	$	—	$	—	$	—	$	28,643	$	—	$	28,643
Other comprehensive income	—	—		—		—		—		863		863
Comprehensive income												29,506
Cash dividends ($0.22 per share)	—	—		—		—		(12,573)		—		(12,573)


Issuance of common stock for stock-based compensation awards	58,820	—		1,970		(970)		—		—		1,000
Stock-based compensation expense	—	—		—		3,395		—		—		3,395

Balance at June 30, 2023	56,132,478	$	296,483	$	(105,589)	$	1,301,883	$	907,312	$	(191,461)	$	2,208,628
Net income	—	—		—		—		$	41,833			$	41,833
Other comprehensive loss	—	—		—		—		—		(7,863)		(7,863)
Comprehensive income												33,970
Cash dividends ($0.22 per share)	—	—		—		—		(12,572)		—		(12,572)


Issuance of common stock for stock-based compensation awards	8,235	—		289		(416)		—		—		(127)
Stock-based compensation expense	—	—		—		3,424		—		—		3,424

Balance at September 30, 2023	56,140,713	$	296,483	$	(105,300)	$	1,304,891	$	936,573	$	(199,324)	$	2,233,323

Table of Contents

~~Renasant Corporation and Subsidiaries~~

~~Consolidated Statements of Cash Flows (Unaudited)~~

~~(In Thousands)~~

Six Months Ended June 30,
2023 2022
Operating activities
Net income $ 74,721 $ 73,225
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Provision for credit losses 10,960 3,500
Depreciation, amortization and accretion 18,365 23,947
Deferred income tax expense 302 5,150
Funding of mortgage loans held for sale (659,921) (1,076,613)
Proceeds from sales of mortgage loans held for sale 526,853 1,345,924
Gains on sales of mortgage loans held for sale (9,417) (9,537)
Losses on sales of securities 22,438 —
Losses (gains) on sales of premises and equipment 7 (236)
Stock-based compensation expense 6,840 6,290
Increase in other assets (26,264) (2,867)
Increase (decrease) in other liabilities 3,576 (19,077)
Net cash (used in) provided by operating activities (31,540) 349,706
Investing activities
Purchases of securities available for sale — (609,752)
Proceeds from sales of securities available for sale 488,981 —
Proceeds from call/maturities of securities available for sale 90,830 249,394
Purchases of securities held to maturity — (91,803)
Proceeds from call/maturities of securities held to maturity 54,123 17,262
Net increase in loans (363,231) (555,936)
Purchases of premises and equipment (12,353) (5,865)
Proceeds from sales of premises and equipment — 933
Purchase of bank-owned life insurance — (80,000)
Net change in FHLB stock 13,268 (3,526)
Proceeds from sales of other assets 827 1,524
Net cash paid in acquisition of businesses — (10,066)
Other, net 1,668 622
Net cash provided by (used in) investing activities 274,113 (1,087,213)
Financing activities
Net (decrease) increase in noninterest-bearing deposits (679,803) 23,273
Net increase (decrease) in interest-bearing deposits 1,288,198 (165,068)
Net (decrease) increase in short-term borrowings (454,927) 69,215
Repayment of long-term debt — (32,417)
Cash paid for dividends (25,134) (24,993)
Net cash provided by (used in) financing activities 128,334 (129,990)
Net increase (decrease) in cash and cash equivalents 370,907 (867,497)
Cash and cash equivalents at beginning of period 575,992 1,877,965
Cash and cash equivalents at end of period $ 946,899 $ 1,010,468
Supplemental disclosures
Cash paid for interest $ 91,861 $ 19,959
Cash paid for income taxes $ 23,071 $ 6,367
Noncash transactions:
Transfers of loans to other real estate owned $ 4,119 $ 1,284
Recognition of operating right-of-use assets $ 611 $ 1,595
Recognition of operating lease liabilities $ 611 $ 1,595


	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

Net income	—	—		—		—		33,547		—		33,547
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)
Comprehensive loss												(14,087)
Cash dividends ($0.22 per share)	—	—		—		—		(12,496)		—		(12,496)


Issuance of common stock for stock-based compensation awards	21,087	—		718		(1,000)		—		—		(282)
Stock-based compensation expense	—	—		—		2,269		—		—		2,269

Balance at September 30, 2022	55,953,104	$	296,483	$	(111,577)	$	1,299,476	$	823,951	$	(216,052)	$	2,092,281

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,
	2023		2022
Operating activities
Net income	$	116,554	$	119,792
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	16,275		13,300
Depreciation, amortization and accretion	26,723		33,590
Deferred income tax (benefit) expense	(1,231)		3,600
Proceeds from sale of MSR	—		18,525
Gain on sale of MSR	—		(2,960)
Funding of mortgage loans held for sale	(1,057,277)		(1,436,158)
Proceeds from sales of mortgage loans held for sale	934,761		1,757,353
Gains on sales of mortgage loans held for sale	(12,639)		(9,808)

Losses on sales of securities	22,438		—

Losses (gains) on sales of premises and equipment	8		(245)
Stock-based compensation expense	10,264		8,558

Increase in other assets	(30,741)		(32,187)
Increase (decrease) in other liabilities	22,989		(10,253)
Net cash provided by operating activities	48,124		463,107
Investing activities
Purchases of securities available for sale	(9,646)		(708,457)
Proceeds from sales of securities available for sale	488,981		—
Proceeds from call/maturities of securities available for sale	124,150		336,504
Purchases of securities held to maturity	—		(91,803)

Proceeds from call/maturities of securities held to maturity	83,945		35,980
Net increase in loans	(607,335)		(1,057,998)
Purchases of premises and equipment	(16,394)		(10,374)
Proceeds from sales of premises and equipment	—		1,230
Purchase of bank-owned life insurance	—		(80,000)
Net change in FHLB stock	20,794		(7,538)
Proceeds from sales of other assets	2,833		2,458
Net cash paid in acquisition of businesses	—		(10,066)
Other, net	1,844		2,607
Net cash provided by (used in) investing activities	89,172		(1,587,457)
Financing activities
Net (decrease) increase in noninterest-bearing deposits	(824,559)		109,096
Net increase (decrease) in interest-bearing deposits	1,494,703		(582,696)
Net (decrease) increase in short-term borrowings	(604,570)		269,391

Repayment of long-term debt	—		(32,417)
Cash paid for dividends	(37,706)		(37,489)



Net cash provided by (used in) financing activities	27,868		(274,115)
Net increase (decrease) in cash and cash equivalents	165,164		(1,398,465)
Cash and cash equivalents at beginning of period	575,992		1,877,965
Cash and cash equivalents at end of period	$	741,156	$	479,500


Supplemental disclosures
Cash paid for interest	$	153,732	$	32,506
Cash paid for income taxes	$	30,922	$	19,245
Noncash transactions:
Transfers of loans to other real estate owned	$	10,073	$	1,828




Recognition of operating right-of-use assets	$	3,077	$	3,045
Recognition of operating lease liabilities	$	3,077	$	3,045

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., Park Place Capital 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 offices located throughout the Southeast and offers factoring and 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~~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 purchases 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 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, 2022 filed with the Securities and Exchange Commission on February 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 March 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-02, “Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method” (“ASU 2023-02”), which permits reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. ASU 2023-02 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 historical financial statements 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 ~~June~~September 30, 2023 or December 31, 2022.


		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2023
September 30, 2023										September 30, 2023

Obligations of states and political subdivisions	Obligations of states and political subdivisions	$	41,474	$	16	$	(3,439)	$	38,051	Obligations of states and political subdivisions	$	38,200	$	71	$	(4,732)	$	33,539
Residential mortgage backed securities:	Residential mortgage backed securities:									Residential mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	328,760		28		(42,751)		286,037		Government agency mortgage backed securities	321,245		2		(49,799)		271,448
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	516,474		—		(101,385)		415,089		Government agency collateralized mortgage obligations	501,793		—		(108,896)		392,897
Commercial mortgage backed securities:	Commercial mortgage backed securities:									Commercial mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	6,042		—		(797)		5,245		Government agency mortgage backed securities	6,036		—		(908)		5,128
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	164,320		—		(25,508)		138,812		Government agency collateralized mortgage obligations	165,812		—		(27,071)		138,741

Other debt securities	Other debt securities	73,049		316		(5,669)		67,696		Other debt securities	72,386		207		(5,238)		67,355

		$	1,130,119	$	360	$	(179,549)	$	950,930		$	1,105,472	$	280	$	(196,644)	$	909,108


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2022

Obligations of other U.S. Government agencies and corporations	$	170,000	$	—	$	(5,340)	$	164,660
Obligations of states and political subdivisions	154,066		204		(9,368)		144,902
Residential mortgage backed securities:
Government agency mortgage backed securities	508,415		37		(52,036)		456,416
Government agency collateralized mortgage obligations	605,033		—		(103,864)		501,169
Commercial mortgage backed securities:
Government agency mortgage backed securities	11,166		—		(1,053)		10,113
Government agency collateralized mortgage obligations	211,435		—		(25,589)		185,846

Other debt securities	74,885		—		(4,049)		70,836

	$	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
June 30, 2023
September 30, 2023										September 30, 2023
Obligations of states and political subdivisions	Obligations of states and political subdivisions	$	289,949	$	23	$	(42,782)	$	247,190	Obligations of states and political subdivisions	$	289,053	$	—	$	(57,660)	$	231,393
Residential mortgage backed securities	Residential mortgage backed securities									Residential mortgage backed securities
Government agency mortgage backed securities	Government agency mortgage backed securities	455,199		—		(25,797)		429,402		Government agency mortgage backed securities	440,227		—		(41,350)		398,877
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	405,793		—		(35,372)		370,421		Government agency collateralized mortgage obligations	395,441		—		(49,030)		346,411
Commercial mortgage backed securities:	Commercial mortgage backed securities:									Commercial mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	16,995		—		(3,231)		13,764		Government agency mortgage backed securities	16,989		—		(3,800)		13,189
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	44,913		—		(7,318)		37,595		Government agency collateralized mortgage obligations	44,725		—		(8,235)		36,490
Other debt securities	Other debt securities	60,227		—		(5,058)		55,169		Other debt securities	59,192		—		(6,429)		52,763
		$	1,273,076	$	23	$	(119,558)	$	1,153,541		$	1,245,627	$	—	$	(166,504)	$	1,079,123
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	$	1,273,044							Held to maturity securities, net of allowance for credit losses	$	1,245,595


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2022
Obligations of states and political subdivisions	$	291,886	$	17	$	(48,325)	$	243,578
Residential mortgage backed securities
Government agency mortgage backed securities	483,560		—		(24,432)		459,128
Government agency collateralized mortgage obligations	423,315		—		(30,706)		392,609
Commercial mortgage backed securities:
Government agency mortgage backed securities	17,006		—		(3,261)		13,745
Government agency collateralized mortgage obligations	45,430		—		(6,559)		38,871
Other debt securities	62,875		—		(4,266)		58,609
	$	1,324,072	$	17	$	(117,549)	$	1,206,540
Allowance for credit losses - held to maturity securities	(32)
Held to maturity securities, net of allowance for credit losses	$	1,324,040

Securities sold were as follows for the ~~three and six~~nine months ended ~~June~~September 30, 2023. There were no securities sold during the third quarter of 2023 nor the three and ~~six~~nine months ended ~~June~~September 30, 2022.



	Carrying Value		Net Proceeds		(Loss)













Nine months ended September 30, 2023
Obligations of other U.S. Government agencies and corporations	$	170,000	$	164,915	$	(5,085)
Obligations of states and political subdivisions	104,950		99,439		(5,511)
Residential mortgage backed securities:
Government agency mortgage backed securities	137,196		130,602		(6,594)
Government agency collateralized mortgage obligations	54,028		51,101		(2,927)
Commercial mortgage backed securities:
Government agency mortgage backed securities	5,048		4,825		(223)
Government agency collateralized mortgage obligations	40,197		38,099		(2,098)



	$	511,419	$	488,981	$	(22,438)

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Carrying Value Net Proceeds (Loss)
Three months ended June 30, 2023
Obligations of other U.S. Government agencies and corporations $ 170,000 $ 164,915 $ (5,085)
Obligations of states and political subdivisions 104,950 99,439 $ (5,511)
Residential mortgage backed securities:
Government agency mortgage backed securities 137,196 130,602 $ (6,594)
Government agency collateralized mortgage obligations 54,028 51,101 (2,927)
Commercial mortgage backed securities:
Government agency mortgage backed securities 5,048 4,825 (223)
Government agency collateralized mortgage obligations 40,197 38,099 (2,098)
$ 511,419 $ 488,981 $ (22,438)
Six months ended June 30, 2023
Obligations of other U.S. Government agencies and corporations $ 170,000 $ 164,915 $ (5,085)
Obligations of states and political subdivisions 104,950 99,439 (5,511)
Residential mortgage backed securities:
Government agency mortgage backed securities 137,196 130,602 (6,594)
Government agency collateralized mortgage obligations 54,028 51,101 (2,927)
Commercial mortgage backed securities:
Government agency mortgage backed securities 5,048 4,825 (223)
Government agency collateralized mortgage obligations 40,197 38,099 (2,098)
$ 511,419 $ 488,981 $ (22,438)

At ~~June~~September 30, 2023 and December 31, 2022, securities with a carrying value of ~~$771,201~~$783,250 and $824,417, respectively, were pledged to secure government, public and trust deposits. Securities with a carrying value of ~~$14,822~~$24,034 and $18,184 were pledged as collateral for short-term borrowings and derivative instruments at ~~June~~September 30, 2023 and December 31, 2022, respectively.

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


		Held to Maturity				Available for Sale					Held to Maturity				Available for Sale
		Amortized Cost		Fair Value		Amortized Cost		Fair Value			Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	Due within one year	$	—	$	—	$	8,630	$	8,599	Due within one year	$	—	$	—	$	6,482	$	6,402
Due after one year through five years	Due after one year through five years	3,294		3,115		37,323		37,428		Due after one year through five years	3,265		3,044		36,332		36,386
Due after five years through ten years	Due after five years through ten years	70,241		61,158		51,728		44,978		Due after five years through ten years	75,045		62,072		42,481		36,784
Due after ten years	Due after ten years	216,413		182,917		16,769		14,671		Due after ten years	210,743		166,277		16,688		13,887
Residential mortgage backed securities:	Residential mortgage backed securities:									Residential mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	455,199		429,402		328,760		286,037		Government agency mortgage backed securities	440,227		398,877		321,245		271,448
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	405,793		370,421		516,474		415,089		Government agency collateralized mortgage obligations	395,441		346,411		501,793		392,897
Commercial mortgage backed securities:	Commercial mortgage backed securities:									Commercial mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	16,995		13,764		6,042		5,245		Government agency mortgage backed securities	16,989		13,189		6,036		5,128
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	44,913		37,595		164,320		138,812		Government agency collateralized mortgage obligations	44,725		36,490		165,812		138,741
Other debt securities	Other debt securities	60,228		55,169		73		71		Other debt securities	59,192		52,763		8,603		7,435

		$	1,273,076	$	1,153,541	$	1,130,119	$	950,930		$	1,245,627	$	1,079,123	$	1,105,472	$	909,108

910

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						Less than 12 Months					12 Months or More					Total
		#	Fair Value		Unrealized Losses		#	Fair Value		Unrealized Losses		#	Fair Value		Unrealized Losses			#	Fair Value		Unrealized Losses		#	Fair Value		Unrealized Losses		#	Fair Value		Unrealized Losses
Available for Sale:	Available for Sale:																Available for Sale:
June 30, 2023
September 30, 2023																	September 30, 2023

Obligations of states and political subdivisions	Obligations of states and political subdivisions	10	7,827		(35)		10	23,073		(3,404)		20	30,900		(3,439)		Obligations of states and political subdivisions	6	5,196		(27)		16	23,814		(4,705)		22	29,010		(4,732)
Residential mortgage backed securities:	Residential mortgage backed securities:																Residential mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	4	6,673		(368)		46	275,823		(42,383)		50	282,496		(42,751)		Government agency mortgage backed securities	—	—		—		53	267,412		(49,799)		53	267,412		(49,799)
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	0	—		—		41	415,090		(101,385)		41	415,090		(101,385)		Government agency collateralized mortgage obligations	—	—		—		41	392,897		(108,896)		41	392,897		(108,896)
Commercial mortgage backed securities:	Commercial mortgage backed securities:																Commercial mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	—	—		—		2	5,245		(797)		2	5,245		(797)		Government agency mortgage backed securities	—	—		—		2	5,128		(908)		2	5,128		(908)
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	1	1,131		(38)		26	137,681		(25,470)		27	138,812		(25,508)		Government agency collateralized mortgage obligations	—	—		—		28	138,742		(27,071)		28	138,742		(27,071)

Other debt securities	Other debt securities	3	5,492		(800)		18	32,171		(4,869)		21	37,663		(5,669)		Other debt securities	1	957		(53)		20	36,456		(5,185)		21	37,413		(5,238)
Total	Total	18	$	21,123	$	(1,241)	143	$	889,083	$	(178,308)	161	$	910,206	$	(179,549)	Total	7	$	6,153	$	(80)	160	$	864,449	$	(196,564)	167	$	870,602	$	(196,644)
December 31, 2022	December 31, 2022																December 31, 2022
Obligations of other U.S. Government agencies and corporations	Obligations of other U.S. Government agencies and corporations	5	$	164,660	$	(5,340)	—	$	—	$	—	5	$	164,660	$	(5,340)	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	Obligations of states and political subdivisions	84	$	96,939	$	(4,869)	11	$	33,038	$	(4,499)	95	$	129,977	$	(9,368)	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:	Residential mortgage backed securities:																Residential mortgage backed securities:
Government agency 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 mortgage backed securities	97	214,516		(15,115)		29	237,970		(36,921)		126	452,486		(52,036)
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	16	109,753		(8,552)		36	391,416		(95,312)		52	501,169		(103,864)		Government agency collateralized mortgage obligations	16	109,753		(8,552)		36	391,416		(95,312)		52	501,169		(103,864)
Commercial mortgage backed securities:	Commercial mortgage backed securities:																Commercial mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	4	10,114		(1,053)		—	—		—		4	10,114		(1,053)		Government agency mortgage backed securities	4	10,114		(1,053)		—	—		—		4	10,114		(1,053)
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	16	67,026		(3,828)		21	118,821		(21,760)		37	185,847		(25,588)		Government agency collateralized mortgage obligations	16	67,026		(3,829)		21	118,821		(21,760)		37	185,847		(25,589)

Other debt securities	Other debt securities	25	63,423		(3,167)		1	7,412		(883)		26	70,835		(4,050)		Other debt securities	25	63,423		(3,166)		1	7,412		(883)		26	70,835		(4,049)

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

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Notes to Consolidated Financial Statements (Unaudited)


		Less than 12 Months					12 Months or More					Total						Less than 12 Months					12 Months or More					Total
		#	Fair Value		Unrealized Losses		#	Fair Value		Unrealized Losses		#	Fair Value		Unrealized Losses			#	Fair Value		Unrealized Losses		#	Fair Value		Unrealized Losses		#	Fair Value		Unrealized Losses
Held to Maturity:	Held to Maturity:																Held to Maturity:
June 30, 2023
September 30, 2023																	September 30, 2023
Obligations of states and political subdivisions	Obligations of states and political subdivisions	126	$	242,673	$	(42,767)	1	$	426	$	(15)	127	$	243,099	$	(42,782)	Obligations of states and political subdivisions	—	$	—	$	—	129	$	231,393	$	(57,660)	129	$	231,393	$	(57,660)
Residential mortgage backed securities:	Residential mortgage backed securities:																Residential mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	2	39,028		(1,387)		68	395,220		(24,410)		70	434,248		(25,797)		Government agency mortgage backed securities	—	—		—		70	398,876		(41,350)		70	398,876		(41,350)
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	1	26,396		(1,278)		17	344,025		(34,094)		18	370,421		(35,372)		Government agency collateralized mortgage obligations	—	—		—		18	346,411		(49,030)		18	346,411		(49,030)
Commercial mortgage backed securities:	Commercial mortgage backed securities:																Commercial mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	—	—		—		1	13,764		(3,231)		1	13,764		(3,231)		Government agency mortgage backed securities	—	—		—		1	13,189		(3,800)		1	13,189		(3,800)
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	1	4,290		(298)		8	33,305		(7,020)		9	37,595		(7,318)		Government agency collateralized mortgage obligations	—	—		—		9	36,490		(8,235)		9	36,490		(8,235)
Other debt securities	Other debt securities	—	—		—		10	50,323		(5,058)		10	50,323		(5,058)		Other debt securities	—	—		—		10	52,761		(6,429)		10	52,761		(6,429)
Total	Total	130	$	312,387	$	(45,730)	105	$	837,063	$	(73,828)	235	$	1,149,450	$	(119,558)	Total	—	$	—	$	—	237	$	1,079,120	$	(166,504)	237	$	1,079,120	$	(166,504)
December 31, 2022	December 31, 2022																December 31, 2022
Obligations of states and political subdivisions	Obligations of states and political subdivisions	105	$	191,442	$	(35,871)	24	$	49,697	$	(12,454)	129	$	241,139	$	(48,325)	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:	Residential mortgage backed securities:																Residential mortgage backed securities:
Government agency 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 mortgage backed securities	8	94,258		(4,186)		62	364,870		(20,246)		70	459,128		(24,432)
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	4	98,912		(5,479)		14	293,698		(25,227)		18	392,610		(30,706)		Government agency collateralized mortgage obligations	4	98,912		(5,479)		14	293,698		(25,227)		18	392,610		(30,706)
Commercial mortgage backed securities:	Commercial mortgage backed securities:																Commercial mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	1	13,745		(3,261)		—	—		—		1	13,745		(3,261)		Government agency mortgage backed securities	1	13,745		(3,261)		—	—		—		1	13,745		(3,261)
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	2	7,651		(626)		7	31,220		(5,933)		9	38,871		(6,559)		Government agency collateralized mortgage obligations	2	7,651		(626)		7	31,220		(5,933)		9	38,871		(6,559)
Other debt securities	Other debt securities	2	42,567		(2,013)		8	16,042		(2,253)		10	58,609		(4,266)		Other debt securities	2	42,567		(2,013)		8	16,042		(2,253)		10	58,609		(4,266)
Total	Total	122	$	448,575	$	(51,436)	115	$	755,527	$	(66,113)	237	$	1,204,102	$	(117,549)	Total	122	$	448,575	$	(51,436)	115	$	755,527	$	(66,113)	237	$	1,204,102	$	(117,549)

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.

As of ~~June~~September 30, 2023, 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 ~~June~~September 30, 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 ~~six~~nine months of 2023.

The allowance for credit losses on held to maturity securities was $32 at ~~June~~September 30, 2023 and 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 ~~June~~September 30, 2023, all of the amortized cost of debt securities held to maturity were rated A or higher by the ratings agencies.

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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:


		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022
Commercial, financial, agricultural	Commercial, financial, agricultural	$	1,729,070	$	1,673,883	Commercial, financial, agricultural	$	1,819,891	$	1,673,883
Lease financing	Lease financing	129,998		122,167		Lease financing	127,935		122,167
Real estate – construction:	Real estate – construction:					Real estate – construction:
Residential	Residential	308,401		355,500		Residential	300,238		355,500
Commercial	Commercial	1,060,618		974,837		Commercial	1,107,126		974,837
Total real estate – construction	Total real estate – construction	1,369,019		1,330,337		Total real estate – construction	1,407,364		1,330,337
Real estate – 1-4 family mortgage:	Real estate – 1-4 family mortgage:					Real estate – 1-4 family mortgage:
Primary	Primary	2,372,739		2,222,856		Primary	2,405,703		2,222,856
Home equity	Home equity	502,341		501,906		Home equity	509,394		501,906
Rental/investment	Rental/investment	335,509		334,382		Rental/investment	353,613		334,382
Land development	Land development	138,065		157,119		Land development	130,166		157,119
Total real estate – 1-4 family mortgage	Total real estate – 1-4 family mortgage	3,348,654		3,216,263		Total real estate – 1-4 family mortgage	3,398,876		3,216,263
Real estate – commercial mortgage:	Real estate – commercial mortgage:					Real estate – commercial mortgage:
Owner-occupied	Owner-occupied	1,553,890		1,539,296		Owner-occupied	1,588,174		1,539,296
Non-owner occupied	Non-owner occupied	3,585,160		3,452,910		Non-owner occupied	3,610,578		3,452,910
Land development	Land development	113,429		125,857		Land development	114,414		125,857
Total real estate – commercial mortgage	Total real estate – commercial mortgage	5,252,479		5,118,063		Total real estate – commercial mortgage	5,313,166		5,118,063
Installment loans to individuals	Installment loans to individuals	108,924		124,745		Installment loans to individuals	108,002		124,745
Gross loans	Gross loans	11,938,144		11,585,458		Gross loans	12,175,234		11,585,458
Unearned income	Unearned income	(7,628)		(7,154)		Unearned income	(7,211)		(7,154)
Loans, net of unearned income	Loans, net of unearned income	$	11,930,516	$	11,578,304	Loans, net of unearned income	$	12,168,023	$	11,578,304

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.

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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											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			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
June 30, 2023
September 30, 2023																				September 30, 2023
Commercial, financial, agricultural	Commercial, financial, agricultural	$	238	$	228	$	1,721,134	$	1,721,600	$	14	$	1,904	$	5,552	$	7,470	$	1,729,070	Commercial, financial, agricultural	$	343	$	46	$	1,811,803	$	1,812,192	$	14	$	2,737	$	4,948	$	7,699	$	1,819,891
Lease financing	Lease financing	—		—		129,998		129,998		—		—		—		—		129,998		Lease financing	—		—		126,887		126,887		64		—		984		1,048		127,935
Real estate – construction:	Real estate – construction:																			Real estate – construction:
Residential	Residential	—		—		308,401		308,401		—		—		—		—		308,401		Residential	402		—		299,836		300,238		—		—		—		—		300,238
Commercial	Commercial	—		—		1,060,618		1,060,618		—		—		—		—		1,060,618		Commercial	—		—		1,107,126		1,107,126		—		—		—		—		1,107,126
Total real estate – construction	Total real estate – construction	—		—		1,369,019		1,369,019		—		—		—		—		1,369,019		Total real estate – construction	402		—		1,406,962		1,407,364		—		—		—		—		1,407,364
Real estate – 1-4 family mortgage:	Real estate – 1-4 family mortgage:																			Real estate – 1-4 family mortgage:
Primary	Primary	6,127		—		2,330,145		2,336,272		4,350		17,260		14,857		36,467		2,372,739		Primary	7,379		63		2,356,252		2,363,694		4,721		20,287		17,001		42,009		2,405,703
Home equity	Home equity	2,340		—		497,702		500,042		296		835		1,168		2,299		502,341		Home equity	2,429		—		504,367		506,796		1,155		690		753		2,598		509,394
Rental/investment	Rental/investment	146		1		332,277		332,424		319		2,236		530		3,085		335,509		Rental/investment	251		397		350,715		351,363		325		1,751		174		2,250		353,613
Land development	Land development	64		—		137,982		138,046		—		3		16		19		138,065		Land development	32		—		129,965		129,997		—		154		15		169		130,166
Total real estate – 1-4 family mortgage	Total real estate – 1-4 family mortgage	8,677		1		3,298,106		3,306,784		4,965		20,334		16,571		41,870		3,348,654		Total real estate – 1-4 family mortgage	10,091		460		3,341,299		3,351,850		6,201		22,882		17,943		47,026		3,398,876
Real estate – commercial mortgage:	Real estate – commercial mortgage:																			Real estate – commercial mortgage:
Owner-occupied	Owner-occupied	1,110		20,999		1,528,758		1,550,867		—		1,639		1,384		3,023		1,553,890		Owner-occupied	1,311		—		1,583,493		1,584,804		319		1,640		1,411		3,370		1,588,174
Non-owner occupied	Non-owner occupied	741		15,092		3,566,577		3,582,410		—		—		2,750		2,750		3,585,160		Non-owner occupied	36		—		3,600,622		3,600,658		—		—		9,920		9,920		3,610,578
Land development	Land development	414		—		112,961		113,375		7		—		47		54		113,429		Land development	411		—		113,756		114,167		—		202		45		247		114,414
Total real estate – commercial mortgage	Total real estate – commercial mortgage	2,265		36,091		5,208,296		5,246,652		7		1,639		4,181		5,827		5,252,479		Total real estate – commercial mortgage	1,758		—		5,297,871		5,299,629		319		1,842		11,376		13,537		5,313,166
Installment loans to individuals	Installment loans to individuals	966		1		107,685		108,652		25		123		124		272		108,924		Installment loans to individuals	1,047		26		106,698		107,771		32		11		188		231		108,002
Unearned income	Unearned income	—		—		(7,628)		(7,628)		—		—		—		—		(7,628)		Unearned income	—		—		(7,211)		(7,211)		—		—		—		—		(7,211)
Loans, net of unearned income	Loans, net of unearned income	$	12,146	$	36,321	$	11,826,610	$	11,875,077	$	5,011	$	24,000	$	26,428	$	55,439	$	11,930,516	Loans, net of unearned income	$	13,641	$	532	$	12,084,309	$	12,098,482	$	6,630	$	27,472	$	35,439	$	69,541	$	12,168,023

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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 ~~Accounting Standards Update~~ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”). At ~~June~~September 30, 2023, ~~these loan~~ modifications meeting the disclosure criteria in ASU 2022-02 were performing in accordance with their modified terms, and unused commitments totaled ~~$1,600.~~$721. Upon the Company’s determination that a ~~modified loan~~modification has been subsequently deemed uncollectible, the loan, or portion of the loan, is charged off, the amortized cost basis of the loan is reduced by the uncollectible amount, and the allowance for credit losses is adjusted accordingly. See Note 4, “Allowance for Credit Losses,” for more information on the allowance for credit losses.

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Notes to Consolidated Financial Statements (Unaudited)

The following table presents the amortized cost basis of loans that were ~~both~~ experiencing financial difficulty, ~~and~~ modified during the ~~three months and six~~nine months ended ~~June~~September 30, 2023 and required to be disclosed under ASU 2022-02, by class and by type of modification. There were no modifications requiring disclosure for the three months ended September 30, 2023. The percentage of the amortized cost basis for each class of ~~loans that were modified to borrowers in financial distress~~disclosed modifications as compared to the amortized cost basis of each class of loans is also presented below.


		Three Months Ended										Six Months Ended											Nine Months Ended September 30, 2023
		Interest Rate Reduction		Term Extension		Payment Delay		Total		% Total Loans by Class		Interest Rate Reduction		Term Extension		Payment Delay		Total		% Total Loans by Class				Interest Rate Reduction		Term Extension		Payment Delay		Total		% Total Loans by Class
Commercial, financial, agricultural	Commercial, financial, agricultural	$	—	$	1,210	$	—	$	1,210	0.07	%	$	—	$	1,210	$	—	$	1,210	0.07	%	Commercial, financial, agricultural		$	—	$	1,209	$	—	$	1,209	0.07	%

Real estate – construction:	Real estate – construction:																					Real estate – construction:
Residential	Residential	—		4,366		—		4,366		1.42		—		4,366		—		4,366		1.42		Residential		—		3,751		—		3,751		1.25

Total real estate – construction	Total real estate – construction	—		4,366		—		4,366		0.32		—		4,366		—		4,366		0.32		Total real estate – construction		—		3,751		—		3,751		0.27
Real estate – 1-4 family mortgage:	Real estate – 1-4 family mortgage:																					Real estate – 1-4 family mortgage:

Home equity	Home equity	9		—		—		9		—		9		—		—		9		—		Home equity		7		—		—		7		—

Total real estate – 1-4 family mortgage	Total real estate – 1-4 family mortgage	9		—		—		9		—		9		—		—		9		—		Total real estate – 1-4 family mortgage		7		—		—		7		—
Real estate – commercial mortgage:	Real estate – commercial mortgage:																					Real estate – commercial mortgage:
Owner-occupied	Owner-occupied	—		—		—		—		—		155		—		—		155		0.01		Owner-occupied		149		96		277		522		0.03
Non-owner occupied	Non-owner occupied	—		—		—		—		—		1,026		—		—		1,026		0.03		Non-owner occupied		1,008		—		—		1,008		0.03
Land development		—		97		277		374		0.33		—		97		277		374		0.33

Total real estate – commercial mortgage	Total real estate – commercial mortgage	—		97		277		374		0.01		1,181		97		277		1,555		0.03		Total real estate – commercial mortgage		1,157		96		277		1,530		0.03

Loans, net of unearned income	Loans, net of unearned income	$	9	$	5,673	$	277	$	5,959	0.05	%	$	1,190	$	5,673	$	277	$	7,140	0.06	%	Loans, net of unearned income		$	1,164	$	5,056	$	277	$	6,497	0.05	%

The following table presents the weighted average financial effect of ~~the~~ loan modifications ~~presented above to borrowers experiencing financial difficulty~~requiring disclosure under ASU 2022-02 by class of financing receivable for the ~~three and six~~nine months ended ~~June~~September 30, 2023.


		Three Months Ended			Six Months Ended				Nine Months Ended
		Interest Rate Reduction (in basis points)	Term Extension (in months)	Payment Delay (in months)	Interest Rate Reduction (in basis points)	Term Extension (in months)	Payment Delay (in months)			Interest Rate Reduction (in basis points)	Term Extension (in months)	Payment Delay (in months)
Commercial, financial, agricultural	Commercial, financial, agricultural	—	2.1	—	—	2.1	—	Commercial, financial, agricultural		—	2.1	—

Real estate – construction:	Real estate – construction:							Real estate – construction:
Residential	Residential	—	4.7	—	—	4.7	—	Residential		—	4.7	—

Real estate – 1-4 family mortgage:	Real estate – 1-4 family mortgage:							Real estate – 1-4 family mortgage:

Home equity	Home equity	300	—	—	300	—	—	Home equity		300	—	—

Real estate – commercial mortgage:	Real estate – commercial mortgage:							Real estate – commercial mortgage:
Owner-occupied	Owner-occupied	—	—	—	68	—	—	Owner-occupied		68	8.4	3.0
Non-owner occupied	Non-owner occupied	—	—	—	12	—	—	Non-owner occupied		12	—	—
Land development		—	8.4	3.0	—	8.4	3.0

Loans, net of unearned income		300	4.2	3.0	21	4.2	3.0

Credit Quality

For loans with a commercial purpose, internal risk-rating grades are assigned by lending, credit administration and loan review personnel, based on an analysis of the financial and collateral strength and other credit attributes underlying each loan.

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

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

Management analyzes the resulting ratings, as well as other external statistics and factors such as delinquency, to track the migration performance of the portfolio balances of commercial and commercial real estate secured loans. Loan grades range between 10 and 95, with 10 being loans with the least credit risk. Loans within the “Pass” grade (those with a risk rating between 10 and 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 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 migrate toward the “Substandard” grade (those with a risk rating between 80 and 95) generally have a higher risk of loss and therefore a higher risk factor applied to those related loan balances.

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
2023 2022 2021 2020 2019 Prior Revolving Loans Revolving Loans Converted to Term Total
Loans
June 30, 2023
Commercial, Financial, Agricultural $ 160,357 $ 337,339 $ 181,509 $ 115,728 $ 57,124 $ 48,682 $ 807,867 $ 8,310 $ 1,716,916
Pass 159,095 330,341 180,712 114,617 56,481 38,893 792,703 8,071 1,680,913
Special Mention 108 255 84 882 122 1,360 3,437 73 6,321
Substandard 1,154 6,743 713 229 521 8,429 11,727 166 29,682
Lease Financing Receivables $ 23,672 $ 54,488 $ 15,192 $ 16,291 $ 8,155 $ 4,572 $ — $ — $ 122,370
Pass 23,672 51,207 14,852 14,069 7,209 3,461 — — 114,470
Special Mention — 2,903 — 2,148 880 1,111 — — 7,042
Substandard — 378 340 74 66 — — — 858
Real Estate - Construction $ 185,727 $ 550,565 $ 401,648 $ 90,582 $ — $ 1,881 $ 20,208 $ — $ 1,250,611
Residential 115,937 65,608 4,667 — — 375 3,406 — 189,993
Pass 115,701 60,205 4,667 — — 375 3,406 — 184,354
Special Mention — 1,273 — — — — — — 1,273
Substandard 236 4,130 — — — — — — 4,366
Commercial 69,790 484,957 396,981 90,582 — 1,506 16,802 — 1,060,618
Pass 69,790 484,957 396,835 90,582 — 1,506 16,802 — 1,060,472
Special Mention — — 146 — — — — — 146
Substandard — — — — — — — — —
Real Estate - 1-4 Family Mortgage $ 59,631 $ 198,349 $ 119,937 $ 46,460 $ 21,573 $ 45,521 $ 26,542 $ 1,978 $ 519,991
Primary 4,982 10,317 6,702 4,437 2,030 10,265 1,684 972 41,389
Pass 4,797 10,093 6,484 4,437 2,017 9,788 1,684 972 40,272
Special Mention 185 — — — — 41 — — 226
Substandard — 224 218 — 13 436 — — 891
Home Equity 1,258 188 1,066 — 36 26 16,086 102 18,762
Pass 1,258 188 1,024 — 36 3 16,038 — 18,547
Special Mention — — — — — — — — —
Substandard — — 42 — — 23 48 102 215
Rental/Investment 32,640 130,610 77,454 41,538 19,341 26,730 6,169 904 335,386
Pass 32,183 129,979 76,118 39,050 17,653 24,885 6,169 688 326,725
Special Mention 49 244 64 6 53 210 — — 626
Substandard 408 387 1,272 2,482 1,635 1,635 — 216 8,035
Land Development 20,751 57,234 34,715 485 166 8,500 2,603 — 124,454
Pass 20,711 57,184 34,715 466 166 8,356 2,603 — 124,201
Special Mention — 50 — — — 101 — — 151
Substandard 40 — — 19 — 43 — — 102

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
																					2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
September 30, 2023																				September 30, 2023
Commercial, Financial, Agricultural																				Commercial, Financial, Agricultural	$	209,517	$	321,447	$	173,774	$	111,082	$	54,041	$	43,272	$	887,332	$	9,638	$	1,810,103
Pass																				Pass	208,279		313,954		173,042		103,496		53,443		35,709		874,771		9,205		1,771,899
Special Mention																				Special Mention	956		199		76		7,382		104		282		2,016		68		11,083
Substandard																				Substandard	282		7,294		656		204		494		7,281		10,545		365		27,121

Lease Financing Receivables																				Lease Financing Receivables	$	29,823	$	51,869	$	13,669	$	14,435	$	7,183	$	3,728	$	—	$	—	$	120,707
Pass																				Pass	28,967		49,031		13,589		12,451		6,464		3,173		—		—		113,675
Special Mention																				Special Mention	—		2,742		—		1,984		704		555		—		—		5,985
Substandard																				Substandard	856		96		80		—		15		—		—		—		1,047

Real Estate - Construction																				Real Estate - Construction	$	291,375	$	530,558	$	380,465	$	70,196	$	—	$	1,853	$	19,420	$	—	$	1,293,867
Residential																				Residential	154,594		28,190		1,691		—		—		373		1,893		—		186,741
Pass																				Pass	152,666		24,691		1,691		—		—		373		1,893		—		181,314
Special Mention																				Special Mention	1,676		—		—		—		—		—		—		—		1,676
Substandard																				Substandard	252		3,499		—		—		—		—		—		—		3,751

Commercial																				Commercial	136,781		502,368		378,774		70,196		—		1,480		17,527		—		1,107,126
Pass																				Pass	122,844		490,026		378,774		70,196		—		1,480		17,527		—		1,080,847
Special Mention																				Special Mention	13,937		12,342		—		—		—		—		—		—		26,279
Substandard																				Substandard	—		—		—		—		—		—		—		—		—

Real Estate - 1-4 Family Mortgage																				Real Estate - 1-4 Family Mortgage	$	97,047	$	187,590	$	111,150	$	44,383	$	21,226	$	40,209	$	27,447	$	1,645	$	530,697
Primary																				Primary	5,184		9,098		6,517		4,211		1,948		9,510		2,039		944		39,451
Pass																				Pass	5,000		8,874		6,180		4,211		1,936		8,893		2,039		944		38,077
Special Mention																				Special Mention	184		—		—		—		—		38		—		—		222
Substandard																				Substandard	—		224		337		—		12		579		—		—		1,152

Home Equity																				Home Equity	1,012		13		1,010		—		—		21		18,082		90		20,228
Pass																				Pass	1,012		13		1,010		—		—		2		18,082		—		20,119
Special Mention																				Special Mention	—		—		—		—		—		—		—		—		—
Substandard																				Substandard	—		—		—		—		—		19		—		90		109

Rental/Investment																				Rental/Investment	58,230		130,212		77,443		39,715		19,122		23,171		5,039		611		353,543
Pass																				Pass	57,836		129,791		76,496		37,532		17,748		22,002		5,039		352		346,796
Special Mention																				Special Mention	111		49		63		5		51		45		—		—		324
Substandard																				Substandard	283		372		884		2,178		1,323		1,124		—		259		6,423

Land Development																				Land Development	32,621		48,267		26,180		457		156		7,507		2,287		—		117,475
Pass																				Pass	32,582		48,267		26,180		438		156		7,365		2,287		—		117,275
Special Mention																				Special Mention	—		—		—		—		—		101		—		—		101
Substandard																				Substandard	39		—		—		19		—		41		—		—		99
		2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
Real Estate - Commercial Mortgage	Real Estate - Commercial Mortgage	$	299,282	$	1,632,288	$	1,081,857	$	703,409	$	451,560	$	920,297	$	125,452	$	24,729	$	5,238,874	Real Estate - Commercial Mortgage	$	497,538	$	1,621,729	$	1,096,136	$	684,074	$	440,916	$	797,222	$	135,203	$	26,339	$	5,299,157
Owner-Occupied	Owner-Occupied	88,498		324,773		327,055		225,311		166,529		362,717		55,483		3,395		1,553,761		Owner-Occupied	167,252		342,672		319,261		224,003		163,826		312,580		55,112		3,335		1,588,041
Pass	Pass	87,853		313,918		323,360		221,598		162,782		340,878		46,343		3,110		1,499,842		Pass	166,283		331,636		316,304		222,279		161,151		302,212		51,184		3,050		1,554,099
Special Mention	Special Mention	322		—		2,281		1,115		405		679		19		—		4,821		Special Mention	315		2,671		1,262		—		283		1,899		20		—		6,450
Substandard	Substandard	323		10,855		1,414		2,598		3,342		21,160		9,121		285		49,098		Substandard	654		8,365		1,695		1,724		2,392		8,469		3,908		285		27,492

Non-Owner Occupied	Non-Owner Occupied	201,254		1,258,819		739,030		472,819		279,605		548,488		63,974		21,145		3,585,134		Non-Owner Occupied	312,830		1,232,860		762,571		454,981		272,048		477,974		74,471		22,818		3,610,553
Pass	Pass	201,225		1,255,224		736,016		472,819		256,063		466,144		63,974		11,960		3,463,425		Pass	312,801		1,229,495		758,940		452,226		234,511		427,970		74,471		13,899		3,504,313
Special Mention	Special Mention	29		463		2,633		—		7,007		25,645		—		—		35,777		Special Mention	29		458		3,257		2,755		14,253		13,132		—		—		33,884
Substandard	Substandard	—		3,132		381		—		16,535		56,699		—		9,185		85,932		Substandard	—		2,907		374		—		23,284		36,872		—		8,919		72,356

Land Development	Land Development	9,530		48,696		15,772		5,279		5,426		9,092		5,995		189		99,979		Land Development	17,456		46,197		14,304		5,090		5,042		6,668		5,620		186		100,563
Pass		9,495		48,194		15,452		4,836		5,404		8,635		5,938		189		98,143
Special Mention		—		193		38		—		—		—		—		—		231
Substandard		35		309		282		443		22		457		57		—		1,605

Installment loans to individuals		$	—	$	—	$	—	$	—	$	13	$	—	$	—	$	—	$	13
Pass		—		—		—		—		13		—		—		—		13
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—

Total loans subject to risk rating		$	728,669	$	2,773,029	$	1,800,143	$	972,470	$	538,425	$	1,020,953	$	980,069	$	35,017	$	8,848,775
Pass		725,780		2,741,490		1,790,235		962,474		507,824		902,924		955,660		24,990		8,611,377
Special Mention		693		5,381		5,246		4,151		8,467		29,147		3,456		73		56,614
Substandard		2,196		26,158		4,662		5,845		22,134		88,882		20,953		9,954		180,784

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


	Term Loans Amortized Cost Basis by Origination Year
	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
Pass	16,999		42,280		13,953		4,658		5,022		6,423		5,597		186		95,118
Special Mention	396		3,421		36		—		—		—		—		—		3,853
Substandard	61		496		315		432		20		245		23		—		1,592

Installment loans to individuals	$	65	$	—	$	—	$	—	$	8	$	—	$	—	$	—	$	73
Pass	65		—		—		—		8		—		—		—		73
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—

Total loans subject to risk rating	$	1,125,365	$	2,713,193	$	1,775,194	$	924,170	$	523,374	$	886,284	$	1,069,402	$	37,622	$	9,054,604
Pass	1,105,334		2,668,058		1,766,159		907,487		480,439		815,602		1,052,890		27,636		8,823,605
Special Mention	17,604		21,882		4,694		12,126		15,395		16,052		2,036		68		89,857
Substandard	2,427		23,253		4,341		4,557		27,540		54,630		14,476		9,918		141,142


	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	—		—		—		—		—		—		—		—		—

1718

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 - 1-4 Family Mortgage	$	233,370	$	141,066	$	48,653	$	24,664	$	25,604	$	35,971	$	26,920	$	1,238	$	537,486
Primary	12,877		7,965		5,068		2,435		4,522		8,723		4,931		106		46,627
Pass	12,616		7,965		5,068		2,421		4,522		8,419		4,931		106		46,048
Special Mention	—		—		—		—		—		51		—		—		51
Substandard	261		—		—		14		—		253		—		—		528

Home Equity	272		1,187		—		38		5		27		14,485		141		16,155
Pass	272		1,187		—		38		5		27		14,485		7		16,021
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		134		134

Rental/Investment	138,481		85,711		42,056		21,997		14,785		24,448		5,972		787		334,237
Pass	138,137		85,522		41,604		21,097		14,671		22,899		5,972		482		330,384
Special Mention	231		—		—		—		—		174		—		—		405
Substandard	113		189		452		900		114		1,375		—		305		3,448

Land Development	81,740		46,203		1,529		194		6,292		2,773		1,532		204		140,467
Pass	80,514		46,203		1,525		194		6,292		2,723		1,532		204		139,187
Special Mention	1,226		—		—		—		—		—		—		—		1,226
Substandard	—		—		4		—		—		50		—		—		54

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	309,792		319,174		239,946		178,137		128,452		302,495		57,869		3,300		1,539,165
Pass	298,851		314,429		237,058		175,262		122,537		282,657		50,640		3,300		1,484,734
Special Mention	9,640		3,047		815		1,670		—		672		4,808		—		20,652
Substandard	1,301		1,698		2,073		1,205		5,915		19,166		2,421		—		33,779

Non-Owner Occupied	1,256,098		657,121		466,703		346,908		144,872		501,863		57,637		21,680		3,452,882
Pass	1,252,484		647,937		466,703		322,997		127,358		418,294		57,637		12,142		3,305,552
Special Mention	506		—		—		21,961		17,509		8,975		—		—		48,951
Substandard	3,108		9,184		—		1,950		5		74,594		—		9,538		98,379

Land Development	58,307		24,268		6,654		6,379		4,538		6,561		5,799		193		112,699
Pass	58,307		24,228		6,342		6,379		4,465		6,067		5,799		193		111,780
Special Mention	—		40		—		—		—		—		—		—		40
Substandard	—		—		312		—		73		494		—		—		879

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

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	2,945,114		1,831,620		1,025,563		608,367		305,463		777,311		859,244		19,242		8,371,924
Special Mention	12,328		3,087		1,825		24,014		18,187		10,226		16,424		80		86,171
Substandard	17,338		11,455		5,381		6,048		9,853		103,060		3,736		11,035		167,906

~~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 as of the dates presented:

Term Loans Amortized Cost Basis by Origination Year
2023 2022 2021 2020 2019 Prior Revolving Loans Revolving Loans Converted to Term Total
Loans
June 30, 2023
Commercial, Financial, Agricultural $ — $ 13 $ — $ — $ — $ 12,141 $ — $ — $ 12,154
Performing Loans — 13 — — — 12,141 — — 12,154
Non-Performing Loans — — — — — — — — —
Real Estate - Construction $ 13,699 $ 71,472 $ 33,228 $ — $ — $ — $ 9 $ — $ 118,408
Residential 13,699 71,472 33,228 — — — 9 — 118,408
Performing Loans 13,699 71,472 33,228 — — — 9 — 118,408
Non-Performing Loans — — — — — — — — —
Commercial — — — — — — — — —
Performing Loans — — — — — — — — —
Non-Performing Loans — — — — — — — — —
Real Estate - 1-4 Family Mortgage $ 212,571 $ 715,606 $ 548,966 $ 331,405 $ 145,876 $ 391,344 $ 477,190 $ 5,705 $ 2,828,663
Primary 209,042 710,207 546,177 330,520 145,348 390,002 — 54 2,331,350
Performing Loans 208,984 706,836 542,180 323,546 140,598 372,881 — 54 2,295,079
Non-Performing Loans 58 3,371 3,997 6,974 4,750 17,121 — — 36,271
Home Equity — — 111 — — 627 477,190 5,651 483,579
Performing Loans — — 111 — — 562 475,953 4,653 481,279
Non-Performing Loans — — — — — 65 1,237 998 2,300
Rental/Investment — — — — — 123 — — 123
Performing Loans — — — — — 123 — — 123
Non-Performing Loans — — — — — — — — —
Land Development 3,529 5,399 2,678 885 528 592 — — 13,611
Performing Loans 3,529 5,399 2,678 885 528 592 — — 13,611
Non-Performing Loans — — — — — — — — —
Real Estate - Commercial Mortgage $ 2,816 $ 3,768 $ 3,223 $ 2,203 $ 1,046 $ 549 $ — $ — $ 13,605
Owner-Occupied — — — 129 — — — — 129
Performing Loans — — — 129 — — — — 129
Non-Performing Loans — — — — — — — — —
Non-Owner Occupied — — — 26 — — — — 26
Performing Loans — — — 26 — — — — 26
Non-Performing Loans — — — — — — — — —
Land Development 2,816 3,768 3,223 2,048 1,046 549 — — 13,450
Performing Loans 2,816 3,725 3,223 2,044 1,046 549 — — 13,403
Non-Performing Loans — 43 — 4 — — — — 47
Installment loans to individuals $ 21,153 $ 25,881 $ 10,415 $ 4,340 $ 11,782 $ 21,476 $ 13,843 $ 21 $ 108,911
Performing Loans 21,153 25,779 10,413 4,309 11,745 21,382 13,843 15 108,639
Non-Performing Loans — 102 2 31 37 94 — 6 272
Total loans not subject to risk rating $ 250,239 $ 816,740 $ 595,832 $ 337,948 $ 158,704 $ 425,510 $ 491,042 $ 5,726 $ 3,081,741
Performing Loans 250,181 813,224 591,833 330,939 153,917 408,230 489,805 4,722 3,042,851
Non-Performing Loans 58 3,516 3,999 7,009 4,787 17,280 1,237 1,004 38,890

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


	Term Loans Amortized Cost Basis by Origination Year
	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
September 30, 2023
Commercial, Financial, Agricultural	$	—	$	13	$	—	$	—��	$	—	$	9,775	$	—	$	—	$	9,788
Performing Loans	—		13		—		—		—		9,775		—		—		9,788
Non-Performing Loans	—		—		—		—		—		—		—		—		—

Lease Financing Receivables	$	—	$	—	$	—	$	—	$	—	$	17	$	—	$	—	$	17
Performing Loans	—		—		—		—		—		17		—		—		17
Non-Performing Loans	—		—		—		—		—		—		—		—		—

Real Estate - Construction	$	27,241	$	61,868	$	24,191	$	—	$	—	$	—	$	189	$	8	$	113,497
Residential	27,241		61,868		24,191		—		—		—		189		8		113,497
Performing Loans	27,241		61,868		24,191		—		—		—		189		8		113,497
Non-Performing Loans	—		—		—		—		—		—		—		—		—

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

Real Estate - 1-4 Family Mortgage	$	295,730	$	717,003	$	543,011	$	320,975	$	139,564	$	363,347	$	482,745	$	5,804	$	2,868,179
Primary	291,259		712,365		540,970		320,125		139,123		362,360		—		50		2,366,252
Performing Loans	290,861		706,613		536,131		311,060		134,619		345,018		—		50		2,324,352
Non-Performing Loans	398		5,752		4,839		9,065		4,504		17,342		—		—		41,900

Home Equity	—		—		111		—		—		556		482,745		5,754		489,166
Performing Loans	—		—		111		—		—		494		481,565		4,398		486,568
Non-Performing Loans	—		—		—		—		—		62		1,180		1,356		2,598

Rental/Investment	—		—		—		—		—		70		—		—		70
Performing Loans	—		—		—		—		—		70		—		—		70
Non-Performing Loans	—		—		—		—		—		—		—		—		—

Land Development	4,471		4,638		1,930		850		441		361		—		—		12,691
Performing Loans	4,471		4,528		1,930		850		441		361		—		—		12,581
Non-Performing Loans	—		110		—		—		—		—		—		—		110

Real Estate - Commercial Mortgage	$	3,913	$	3,529	$	3,145	$	2,046	$	947	$	429	$	—	$	—	$	14,009
Owner-Occupied	—		—		—		128		—		5		—		—		133
Performing Loans	—		—		—		128		—		5		—		—		133
Non-Performing Loans	—		—		—		—		—		—		—		—		—

Non-Owner Occupied	—		—		—		25		—		—		—		—		25
Performing Loans	—		—		—		25		—		—		—		—		25
Non-Performing Loans	—		—		—		—		—		—		—		—		—

Land Development	3,913		3,529		3,145		1,893		947		424		—		—		13,851
Performing Loans	3,913		3,487		3,145		1,890		947		424		—		—		13,806
Non-Performing Loans	—		42		—		3		—		—		—		—		45

Installment loans to individuals	$	30,842	$	21,118	$	8,719	$	3,647	$	10,714	$	19,182	$	13,689	$	18	$	107,929
Performing Loans	30,836		21,021		8,719		3,643		10,680		19,067		13,689		17		107,672
Non-Performing Loans	6		97		—		4		34		115		—		1		257

Total loans not subject to risk rating	$	357,726	$	803,531	$	579,066	$	326,668	$	151,225	$	392,750	$	496,623	$	5,830	$	3,113,419
Performing Loans	357,322		797,530		574,227		317,596		146,687		375,231		495,443		4,473		3,068,509
Non-Performing Loans	404		6,001		4,839		9,072		4,538		17,519		1,180		1,357		44,910

1920

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
December 31, 2022
Commercial, Financial, Agricultural	$	13	$	—	$	—	$	—	$	—	$	16,163	$	—	$	—	$	16,176
Performing Loans	13		—		—		—		—		16,163		—		—		16,176
Non-Performing Loans	—		—		—		—		—		—		—		—		—

Lease Financing Receivables	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Performing Loans	—		—		—		—		—		—		—		—		—
Non-Performing Loans	—		—		—		—		—		—		—		—		—

Real Estate - Construction	$	57,570	$	61,245	$	497	$	—	$	—	$	—	$	—	$	—	$	119,312
Residential	57,570		61,245		497		—		—		—		—		—		119,312
Performing Loans	57,493		61,245		497		—		—		—		—		—		119,235
Non-Performing Loans	77		—		—		—		—		—		—		—		77

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

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	694,941		541,801		350,205		154,979		115,876		318,364		—		63		2,176,229
Performing Loans	694,221		538,870		345,912		150,821		109,156		307,178		—		63		2,146,221
Non-Performing Loans	720		2,931		4,293		4,158		6,720		11,186		—		—		30,008

Home Equity	—		111		—		—		—		676		481,254		3,710		485,751
Performing Loans	—		111		—		—		—		609		480,094		3,026		483,840
Non-Performing Loans	—		—		—		—		—		67		1,160		684		1,911

Rental/Investment	—		—		—		—		—		145		—		—		145
Performing Loans	—		—		—		—		—		145		—		—		145
Non-Performing Loans	—		—		—		—		—		—		—		—		—

Land Development	9,273		4,344		1,008		570		1,075		382		—		—		16,652
Performing Loans	9,257		4,344		1,008		570		1,075		319		—		—		16,573
Non-Performing Loans	16		—		—		—		—		63		—		—		79

Real Estate - Commercial Mortgage	$	4,805	$	3,518	$	2,587	$	1,281	$	691	$	435	$	—	$	—	$	13,317
Owner-Occupied	—		—		131		—		—		—		—		—		131
Performing Loans	—		—		131		—		—		—		—		—		131
Non-Performing Loans	—		—		—		—		—		—		—		—		—

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

Land Development	4,805		3,518		2,428		1,281		691		435		—		—		13,158
Performing Loans	4,805		3,518		2,422		1,281		691		435		—		—		13,152
Non-Performing Loans	—		—		6		—		—		—		—		—		6

Installment loans to individuals	$	44,255	$	15,976	$	6,416	$	14,252	$	17,095	$	10,626	$	16,062	$	39	$	124,721
Performing Loans	44,227		15,927		6,389		14,211		17,076		10,532		16,062		35		124,459
Non-Performing Loans	28		49		27		41		19		94		—		4		262

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	810,016		624,015		356,387		166,883		127,998		335,381		496,156		3,124		2,919,960
Non-Performing Loans	841		2,980		4,326		4,199		6,739		11,410		1,160		688		32,343

2021

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

The following table discloses gross charge-offs by year of origination for the ~~six~~nine months ended ~~June 30:~~September 30, 2023:


		2023		2022		2021		2020		2019		Prior		Revolving Loans		Total Charge-offs			2023		2022		2021		2020		2019		Prior		Revolving Loans		Total Charge-offs
Commercial, financial, agricultural	Commercial, financial, agricultural	$	17	$	403	$	118	$	120	$	—	$	3,945	$	865	$	5,468	Commercial, financial, agricultural	$	898	$	1,064	$	59	$	123	$	583	$	4,128	$	865	$	7,720

Lease financing																		Lease financing	—		273		248		72		48		—		—		641
Real estate – construction:	Real estate – construction:																	Real estate – construction:
Residential	Residential	—		57		—		—		—		—		—		57		Residential	—		57		—		—		—		—		—		57

Real estate – 1-4 family mortgage:	Real estate – 1-4 family mortgage:																	Real estate – 1-4 family mortgage:
Primary	Primary	—		—		—		—		—		57		—		57		Primary	—		—		—		—		—		57		—		57
Home equity	Home equity	—		—		—		—		25		82		—		107		Home equity	—		—		—		—		25		90		—		115
Rental/investment	Rental/investment	—		51		—		—		—		—		—		51		Rental/investment	—		—		91		72		10		—		—		173

Total real estate – 1-4 family mortgage	Total real estate – 1-4 family mortgage	—		51		—		—		25		139		—		215		Total real estate – 1-4 family mortgage	—		—		91		72		35		147		—		345
Real estate – commercial mortgage:	Real estate – commercial mortgage:																	Real estate – commercial mortgage:
Owner-occupied	Owner-occupied	—		—		—		—		—		525		—		525		Owner-occupied	—		—		—		—		—		527		—		527
Non-owner occupied	Non-owner occupied	—		—		—		2,442		—		2,545		—		4,987		Non-owner occupied	—		—		—		—		—		4,985		—		4,985

Total real estate – commercial mortgage	Total real estate – commercial mortgage	—		—		—		2,442		—		3,070		—		5,512		Total real estate – commercial mortgage	—		—		—		—		—		5,512		—		5,512
Installment loans to individuals	Installment loans to individuals	3		37		38		5		2		1,305		—		1,390		Installment loans to individuals	29		34		41		35		4		1,854		—		1,997
Loans, net of unearned income	Loans, net of unearned income	$	20	$	548	$	156	$	2,567	$	27	$	8,459	$	865	$	12,642	Loans, net of unearned income	$	927	$	1,428	$	439	$	302	$	670	$	11,641	$	865	$	16,272

2122

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 4 – Allowance for Credit Losses

(In Thousands)

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 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, 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 ~~June~~September 30, 2023 and December 31, 2022, the Company had accrued interest receivable for loans of ~~$51,410~~$53,565 and $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 ~~$1,231~~$1,245 and $1,248 as of ~~June~~September 30, 2023 and December 31, 2022, respectively.

2223

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

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 June 30, 2023
Three Months Ended September 30, 2023																Three Months Ended September 30, 2023
Allowance for credit losses:	Allowance for credit losses:															Allowance for credit losses:
Beginning balance	Beginning balance	$	44,678	$	19,959	$	45,981	$	72,770	$	2,437	$	9,467	$	195,292	Beginning balance	$	41,310	$	19,125	$	46,434	$	75,667	$	2,480	$	9,375	$	194,391

Charge-offs	Charge-offs	(4,939)		(57)		(212)		(397)		—		(580)		(6,185)		Charge-offs	(2,252)		—		(130)		—		(641)		(607)		(3,630)
Recoveries	Recoveries	1,274		—		170		278		6		556		2,284		Recoveries	690		48		181		208		2		568		1,697
Net (charge-offs) recoveries	Net (charge-offs) recoveries	(3,665)		(57)		(42)		(119)		6		(24)		(3,901)		Net (charge-offs) recoveries	(1,562)		48		51		208		(639)		(39)		(1,933)
Provision for (recovery of) credit losses on loans	Provision for (recovery of) credit losses on loans	297		(777)		495		3,016		37		(68)		3,000		Provision for (recovery of) credit losses on loans	4,696		483		(686)		(642)		1,514		(50)		5,315
Ending balance	Ending balance	$	41,310	$	19,125	$	46,434	$	75,667	$	2,480	$	9,375	$	194,391	Ending balance	$	44,444	$	19,656	$	45,799	$	75,233	$	3,355	$	9,286	$	197,773
Six Months Ended June 30, 2023
Nine Months Ended September 30, 2023																Nine Months Ended September 30, 2023
Allowance for credit losses:	Allowance for credit losses:															Allowance for credit losses:
Beginning balance	Beginning balance	$	44,255	$	19,114	$	44,727	$	71,798	$	2,463	$	9,733	$	192,090	Beginning balance	$	44,255	$	19,114	$	44,727	$	71,798	$	2,463	$	9,733	$	192,090
Initial impact of purchased credit deteriorated loans acquired during the period	Initial impact of purchased credit deteriorated loans acquired during the period	(26)		—		—		—		—		—		(26)		Initial impact of purchased credit deteriorated loans acquired during the period	(26)		—		—		—		—		—		(26)
Charge-offs	Charge-offs	(5,468)		(57)		(215)		(5,512)		—		(1,390)		(12,642)		Charge-offs	(7,720)		(57)		(345)		(5,512)		(641)		(1,997)		(16,272)
Recoveries	Recoveries	1,999		—		194		489		11		1,316		4,009		Recoveries	2,689		48		375		697		13		1,884		5,706
Net (charge-offs) recoveries	Net (charge-offs) recoveries	(3,469)		(57)		(21)		(5,023)		11		(74)		(8,633)		Net (charge-offs) recoveries	(5,031)		(9)		30		(4,815)		(628)		(113)		(10,566)
Provision for (recovery of) credit losses on loans	Provision for (recovery of) credit losses on loans	550		68		1,728		8,892		6		(284)		10,960		Provision for (recovery of) credit losses on loans	5,246		551		1,042		8,250		1,520		(334)		16,275
Ending balance	Ending balance	$	41,310	$	19,125	$	46,434	$	75,667	$	2,480	$	9,375	$	194,391	Ending balance	$	44,444	$	19,656	$	45,799	$	75,233	$	3,355	$	9,286	$	197,773
Period-End Amount Allocated to:	Period-End Amount Allocated to:															Period-End Amount Allocated to:
Individually evaluated	Individually evaluated	$	10,773	$	—	$	703	$	1,269	$	—	$	270	$	13,015	Individually evaluated	$	11,194	$	—	$	77	$	1,260	$	856	$	270	$	13,657
Collectively evaluated	Collectively evaluated	30,537		19,125		45,731		74,398		2,480		9,105		181,376		Collectively evaluated	33,250		19,656		45,722		73,973		2,499		9,016		184,116
Ending balance	Ending balance	$	41,310	$	19,125	$	46,434	$	75,667	$	2,480	$	9,375	$	194,391	Ending balance	$	44,444	$	19,656	$	45,799	$	75,233	$	3,355	$	9,286	$	197,773
Loans:	Loans:															Loans:
Individually evaluated	Individually evaluated	$	21,418	$	—	$	13,545	$	40,239	$	—	$	270	$	75,472	Individually evaluated	$	20,996	$	—	$	13,007	$	18,403	$	1,047	$	270	$	53,723
Collectively evaluated	Collectively evaluated	1,707,652		1,369,019		3,335,109		5,212,240		122,370		108,654		11,855,044		Collectively evaluated	1,798,895		1,407,364		3,385,869		5,294,763		119,677		107,732		12,114,300
Ending balance	Ending balance	$	1,729,070	$	1,369,019	$	3,348,654	$	5,252,479	$	122,370	$	108,924	$	11,930,516	Ending balance	$	1,819,891	$	1,407,364	$	3,398,876	$	5,313,166	$	120,724	$	108,002	$	12,168,023

Nonaccruing loans with no allowance for credit losses	Nonaccruing loans with no allowance for credit losses	$	2,021	$	—	$	10,516	$	3,969	$	—	$	—	$	16,506	Nonaccruing loans with no allowance for credit losses	$	1,987	$	—	$	11,441	$	11,226	$	191	$	—	$	24,845

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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 June 30, 2022
Three Months Ended September 30, 2022																Three Months Ended September 30, 2022
Allowance for credit losses:	Allowance for credit losses:															Allowance for credit losses:
Beginning balance	Beginning balance	$	33,606	$	18,411	$	36,848	$	65,231	$	1,582	$	10,790	$	166,468	Beginning balance	$	30,193	$	17,290	$	41,910	$	64,373	$	1,802	$	10,563	$	166,131

Charge-offs	Charge-offs	(2,239)		—		(161)		(708)		—		(850)		(3,958)		Charge-offs	(373)		—		(208)		(1,956)		—		(722)		(3,259)
Recoveries	Recoveries	431		—		169		192		11		818		1,621		Recoveries	415		—		378		50		113		728		1,684
Net (charge-offs) recoveries	Net (charge-offs) recoveries	(1,808)		—		8		(516)		11		(32)		(2,337)		Net (charge-offs) recoveries	42		—		170		(1,906)		113		6		(1,575)
Provision for (recovery of) credit losses on loans	Provision for (recovery of) credit losses on loans	(1,605)		(1,121)		5,054		(342)		209		(195)		2,000		Provision for (recovery of) credit losses on loans	268		1,454		1,452		6,800		399		(573)		9,800
Ending balance	Ending balance	$	30,193	$	17,290	$	41,910	$	64,373	$	1,802	$	10,563	$	166,131	Ending balance	$	30,503	$	18,744	$	43,532	$	69,267	$	2,314	$	9,996	$	174,356
Six Months Ended June 30, 2022
Nine Months Ended September 30, 2022																Nine Months Ended September 30, 2022
Allowance for credit losses:	Allowance for credit losses:															Allowance for credit losses:
Beginning balance	Beginning balance	$	33,922	$	16,419	$	32,356	$	68,940	$	1,486	$	11,048	$	164,171	Beginning balance	$	33,922	$	16,419	$	32,356	$	68,940	$	1,486	$	11,048	$	164,171
Initial impact of purchased credit deteriorated loans acquired during the period	Initial impact of purchased credit deteriorated loans acquired during the period	1,648		—		—		—		—		—		1,648		Initial impact of purchased credit deteriorated loans acquired during the period	1,648		—		—		—		—		—		1,648
Charge-offs	Charge-offs	(4,341)		—		(324)		(714)		(7)		(1,629)		(7,015)		Charge-offs	(4,714)		—		(532)		(2,670)		(7)		(2,351)		(10,274)
Recoveries	Recoveries	1,567		—		347		347		23		1,543		3,827		Recoveries	1,982		—		725		397		136		2,271		5,511
Net (charge-offs) recoveries	Net (charge-offs) recoveries	(2,774)		—		23		(367)		16		(86)		(3,188)		Net (charge-offs) recoveries	(2,732)		—		193		(2,273)		129		(80)		(4,763)
Provision for (recovery of) credit losses on loans	Provision for (recovery of) credit losses on loans	(2,603)		871		9,531		(4,200)		300		(399)		3,500		Provision for (recovery of) credit losses on loans	(2,335)		2,325		10,983		2,600		699		(972)		13,300
Ending balance	Ending balance	$	30,193	$	17,290	$	41,910	$	64,373	$	1,802	$	10,563	$	166,131	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	$	4,567	$	—	$	85	$	1,674	$	—	$	570	$	6,896	Individually evaluated	$	4,064	$	—	$	—	$	2,649	$	—	$	370	$	7,083
Collectively evaluated	Collectively evaluated	25,626		17,290		41,825		62,699		1,802		9,993		159,235		Collectively evaluated	26,439		18,744		43,532		66,618		2,314		9,626		167,273
Ending balance	Ending balance	$	30,193	$	17,290	$	41,910	$	64,373	$	1,802	$	10,563	$	166,131	Ending balance	$	30,503	$	18,744	$	43,532	$	69,267	$	2,314	$	9,996	$	174,356
Loans:	Loans:															Loans:
Individually evaluated	Individually evaluated	$	9,534	$	—	$	4,127	$	11,716	$	—	$	570	$	25,947	Individually evaluated	$	9,088	$	153	$	5,965	$	19,043	$	—	$	370	$	34,619
Collectively evaluated	Collectively evaluated	1,487,738		1,126,363		3,025,956		4,705,797		101,350		130,593		10,577,797		Collectively evaluated	1,504,003		1,214,903		3,121,924		4,997,622		103,357		128,576		11,070,385
Ending balance	Ending balance	$	1,497,272	$	1,126,363	$	3,030,083	$	4,717,513	$	101,350	$	131,163	$	10,603,744	Ending balance	$	1,513,091	$	1,215,056	$	3,127,889	$	5,016,665	$	103,357	$	128,946	$	11,105,004

Nonaccruing loans with no allowance for credit losses	Nonaccruing loans with no allowance for credit losses	$	849	$	—	$	3,594	$	3,492	$	—	$	—	$	7,935	Nonaccruing loans with no allowance for credit losses	$	429	$	153	$	5,809	$	4,633	$	—	$	2	$	11,026

The Company recorded a provision for credit losses of ~~$3,000~~$5,315 during the ~~second~~third quarter of 2023, as compared to a provision for credit losses ~~$2,000~~$9,800 recorded in the ~~second~~third quarter of 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 for credit losses on loans of $5,315 in the ~~second quarter as compared to the provision in the second~~third quarter of ~~the prior year~~2023 was primarily driven by loan growth.

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

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

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

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, 2022.

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

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


Three Months Ended June 30,		2023		2022
Allowance for credit losses on unfunded loan commitments:
Beginning balance		$	18,618	$	19,485
(Recovery of) provision for credit losses on unfunded loan commitments (included in other noninterest expense)		(1,000)		450
Ending balance		$	17,618	$	19,935

Six Months Ended June 30,		2023		2022
Three Months Ended September 30,						Three Months Ended September 30,	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	$	20,118	$	20,035	Beginning balance	$	17,618	$	19,935
Recovery of credit losses on unfunded loan commitments (included in other noninterest expense)	Recovery of credit losses on unfunded loan commitments (included in other noninterest expense)	(2,500)		(100)		Recovery of credit losses on unfunded loan commitments (included in other noninterest expense)	(700)		—
Ending balance	Ending balance	$	17,618	$	19,935	Ending balance	$	16,918	$	19,935

Nine Months Ended September 30,						Nine Months Ended September 30,	2023		2022
Allowance for credit losses on unfunded loan commitments:						Allowance for credit losses on unfunded loan commitments:
Beginning balance						Beginning balance	$	20,118	$	20,035
Recovery of credit losses on unfunded loan commitments (included in other noninterest expense)						Recovery of credit losses on unfunded loan commitments (included in other noninterest expense)	(3,200)		(100)
Ending balance						Ending balance	$	16,918	$	19,935

Note 5 – Other Real Estate Owned

(In Thousands)

The following table provides details of the Company’s other real estate owned (“OREO”), net of valuation allowances and direct write-downs, as of the dates presented:


		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022
Residential real estate	Residential real estate	$	459	$	699	Residential real estate	$	1,045	$	699
Commercial real estate	Commercial real estate	3,481		62		Commercial real estate	8,182		62
Residential land development	Residential land development	448		246		Residential land development	4		246
Commercial land development	Commercial land development	732		756		Commercial land development	27		756

Total	Total	$	5,120	$	1,763	Total	$	9,258	$	1,763

Changes in the Company’s OREO were as follows:


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


Transfers of loans	~~4,119~~10,073

Impairments	~~(8)~~(18)
Dispositions	~~(738)~~(2,544)
Other	(16)
Balance at ~~June~~September 30, 2023	$	~~5,120~~9,258

At ~~June~~September 30, 2023 and December 31, 2022, the amortized cost of loans secured by Real Estate - 1-4 Family Mortgage in the process of foreclosure was ~~$2,735~~$489 and $375, respectively.

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

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Notes to Consolidated Financial Statements (Unaudited)


		Three Months Ended				Six Months Ended					Three Months Ended				Nine Months Ended
		June 30,				June 30,					September 30,				September 30,
		2023		2022		2023		2022			2023		2022		2023		2022
Repairs and maintenance	Repairs and maintenance	$	28	$	17	$	44	$	20	Repairs and maintenance	$	51	$	24	$	95	$	44
Property taxes and insurance	Property taxes and insurance	11		27		122		62		Property taxes and insurance	20		7		142		69
Impairments	Impairments	8		37		8		51		Impairments	10		59		18		110
Net losses (gains) on OREO sales		6		(266)		(89)		(557)
Net gains on OREO sales										Net gains on OREO sales	(200)		(54)		(289)		(611)
Rental income	Rental income	(2)		(2)		(4)		(4)		Rental income	(1)		(2)		(5)		(6)
Total	Total	$	51	$	(187)	$	81	$	(428)	Total	$	(120)	$	34	$	(39)	$	(394)

Note 6 – Goodwill and Other Intangible Assets

(In Thousands)

The carrying amounts of goodwill by operating segments for the ~~six~~nine months ended ~~June~~September 30, 2023 are set forth in the table below. The deduction from goodwill resulted from measurement period adjustments following the RBC acquisition and is primarily related to adjustments on the fair value of other liabilities.


		Community Banks		Insurance		Total			Community Banks		Insurance		Total
Balance at January 1, 2023	Balance at January 1, 2023	$	988,941	$	2,767	$	991,708	Balance at January 1, 2023	$	988,941	$	2,767	$	991,708
Deductions to goodwill and other adjustments	Deductions to goodwill and other adjustments	(43)		—		(43)		Deductions to goodwill and other adjustments	(43)		—		(43)
Balance at June 30, 2023		$	988,898	$	2,767	$	991,665
Balance at September 30, 2023								Balance at September 30, 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			Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
June 30, 2023
September 30, 2023								September 30, 2023
Core deposit intangibles	Core deposit intangibles	$	82,492	$	(66,466)	$	16,026	Core deposit intangibles	$	82,492	$	(67,443)	$	15,049
Customer relationship intangible	Customer relationship intangible	7,670		(2,315)		5,355		Customer relationship intangible	7,670		(2,649)		5,021
Total finite-lived intangible assets	Total finite-lived intangible assets	$	90,162	$	(68,781)	$	21,381	Total finite-lived intangible assets	$	90,162	$	(70,092)	$	20,070
December 31, 2022	December 31, 2022							December 31, 2022
Core deposit intangibles	Core deposit intangibles	$	82,492	$	(64,339)	$	18,153	Core deposit intangibles	$	82,492	$	(64,339)	$	18,153
Customer relationship intangible	Customer relationship intangible	7,670		(1,647)		6,023		Customer relationship intangible	7,670		(1,647)		6,023
Total finite-lived intangible assets	Total finite-lived intangible assets	$	90,162	$	(65,986)	$	24,176	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				Six Months Ended					Three Months Ended				Nine Months Ended
		June 30,				June 30,					September 30,				September 30,
		2023		2022		2023		2022			2023		2022		2023		2022
Amortization expense for:	Amortization expense for:									Amortization expense for:
Core deposit intangibles	Core deposit intangibles	$	1,034	$	1,264	$	2,126	$	2,585	Core deposit intangibles	$	977	$	1,206	$	3,103	$	3,791
Customer relationship intangible	Customer relationship intangible	335		46		669		91		Customer relationship intangible	334		45		1,003		136
Total intangible amortization	Total intangible amortization	$	1,369	$	1,310	$	2,795	$	2,676	Total intangible amortization	$	1,311	$	1,251	$	4,106	$	3,927

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:

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Notes to Consolidated Financial Statements (Unaudited)


	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 7 – 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 ~~six~~nine months ended ~~June~~September 30, 2023 or 2022.

Changes in the Company’s MSRs were as follows:


Balance at January 1, 2023	$	84,448

Capitalization	~~7,717~~13,001
Amortization	~~(4,733)~~(7,208)

Balance at ~~June~~September 30, 2023	$	~~87,432~~90,241

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


		June 30, 2023			December 31, 2022				September 30, 2023			December 31, 2022
Unpaid principal balance	Unpaid principal balance	$	7,612,976		$	7,494,413		Unpaid principal balance	$	7,707,919		$	7,494,413

Weighted-average prepayment speed (CPR)	Weighted-average prepayment speed (CPR)	7.43		%	7.00		%	Weighted-average prepayment speed (CPR)	7.50		%	7.00		%
Estimated impact of a 10% increase	Estimated impact of a 10% increase	$	(2,245)		$	(1,765)		Estimated impact of a 10% increase	$	(2,242)		$	(1,765)
Estimated impact of a 20% increase	Estimated impact of a 20% increase	(4,791)			(3,957)			Estimated impact of a 20% increase	(4,758)			(3,957)

Discount rate	Discount rate	10.32		%	10.30		%	Discount rate	10.84		%	10.30		%
Estimated impact of a 10% increase	Estimated impact of a 10% increase	$	(5,414)		$	(5,393)		Estimated impact of a 10% increase	$	(5,430)		$	(5,393)
Estimated impact of a 20% increase	Estimated impact of a 20% increase	(10,400)			(10,354)			Estimated impact of a 20% increase	(10,436)			(10,354)

Weighted-average coupon interest rate	Weighted-average coupon interest rate	3.67		%	3.51		%	Weighted-average coupon interest rate	3.77		%	3.51		%
Weighted-average servicing fee (basis points)	Weighted-average servicing fee (basis points)	32.62			32.44			Weighted-average servicing fee (basis points)	33.04			32.44
Weighted-average remaining maturity (in years)	Weighted-average remaining maturity (in years)	8.08			8.33			Weighted-average remaining maturity (in years)	8.05			8.33

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Notes to Consolidated Financial Statements (Unaudited)

The Company recorded servicing fees of ~~$4,674~~$4,335 and ~~$5,000~~$4,445 for the three months ended ~~June~~September 30, 2023 and 2022, respectively, and servicing fees of ~~$8,939~~$13,275 and ~~$9,423~~$13,868 for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively, all of which are included in “Mortgage banking income” in the Consolidated Statements of Income.

Note 8 - 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
		June 30,				June 30,			September 30,								September 30,
		2023		2022			2023			2022			2023		2022			2023		2022
Service cost	Service cost	$	—	$	—		$	—		$	1	Service cost	$	—	$	—		$	—	$	1
Interest cost	Interest cost	248		185			5			3		Interest cost	249		185			6		3
Expected return on plan assets	Expected return on plan assets	(309)		(421)			—			—		Expected return on plan assets	(309)		(421)			—		—

Recognized actuarial loss (gain)	Recognized actuarial loss (gain)	131		61			(16)			(19)		Recognized actuarial loss (gain)	131		60			(15)		(19)

Net periodic benefit cost (return)	Net periodic benefit cost (return)	$	70	$	(175)		$	(11)		$	(15)	Net periodic benefit cost (return)	$	71	$	(176)		$	(9)	$	(15)


		Pension Benefits				Other Benefits			Pension Benefits								Other Benefits
		Six Months Ended				Six Months Ended			Nine Months Ended								Nine Months Ended
		June 30,				June 30,			September 30,								September 30,
		2023		2022			2023			2022			2023		2022			2023		2022
Service cost	Service cost	$	—	$	—		$	—		$	2	Service cost	$	—	$	—		$	—	$	3
Interest cost	Interest cost	497		369			11			6		Interest cost	746		554			17		9
Expected return on plan assets	Expected return on plan assets	(618)		(842)			—			—		Expected return on plan assets	(927)		(1,263)			—		—

Recognized actuarial loss (gain)	Recognized actuarial loss (gain)	262		122			(31)			(38)		Recognized actuarial loss (gain)	393		182			(46)		(57)

Net periodic benefit cost (return)	Net periodic benefit cost (return)	$	141	$	(351)		$	(20)		$	(30)	Net periodic benefit cost (return)	$	212	$	(527)		$	(29)	$	(45)

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 or outstanding, nor compensation expense associated with options recorded, during the ~~six~~nine months ended ~~June~~September 30, 2023 or 2022. ~~There were no stock options outstanding as of June 30, 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 ~~six~~nine months ended ~~June~~September 30, 2023:

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


		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	155,838	$	36.23	680,403	$	36.23	Nonvested at beginning of period	155,838	$	36.23	680,403	$	36.23
Awarded	Awarded	81,867	35.57		334,467	35.52		Awarded	81,867	35.57		335,917	35.49
Vested	Vested	—	—		(199,122)	35.37		Vested	—	—		(212,574)	34.78
Cancelled	Cancelled	—	—		(28,999)	35.49		Cancelled	—	—		(31,504)	35.67
Nonvested at end of period	Nonvested at end of period	237,705	$	36.01	786,749	$	36.17	Nonvested at end of period	237,705	$	36.01	772,242	$	36.33

During the ~~six~~nine months ended ~~June~~September 30, 2023, the Company reissued ~~142,012~~150,247 shares from treasury in connection with awards of restricted stock. The Company recorded total stock-based compensation expense of ~~$3,395~~$3,424 and ~~$2,952~~$2,268 for the three months ended ~~June~~September 30, 2023 and 2022, respectively, and ~~$6,840~~$10,264 and ~~$6,290~~$8,558 for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively.

Note 9 – 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:


		Balance Sheet	June 30, 2023				December 31, 2022					Balance Sheet	September 30, 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	$	510,641	$	11,483	$	258,646	$	11,354	Interest rate contracts	Other Assets	$	404,646	$	15,484	$	258,646	$	11,354
Interest rate lock commitments	Interest rate lock commitments	Other Assets	86,727		1,712		92,901		1,231		Interest rate lock commitments	Other Assets	76,576		1,534		92,901		1,231
Forward commitments	Forward commitments	Other Assets	256,000		1,787		84,000		484		Forward commitments	Other Assets	248,000		2,651		84,000		484
Totals	Totals		$	853,368	$	14,982	$	435,547	$	13,069	Totals		$	729,222	$	19,669	$	435,547	$	13,069
Derivative liabilities:	Derivative liabilities:										Derivative liabilities:
Interest rate contracts	Interest rate contracts	Other Liabilities	$	436,028	$	11,483	$	258,646	$	11,354	Interest rate contracts	Other Liabilities	$	401,910	$	15,484	$	258,646	$	11,354
Interest rate lock commitments	Interest rate lock commitments	Other Liabilities	8,422		27		19,488		98		Interest rate lock commitments	Other Liabilities	20,327		95		19,488		98
Forward commitments	Forward commitments	Other Liabilities	25,000		78		73,000		1,198		Forward commitments	Other Liabilities	25,000		23		73,000		1,198
Totals	Totals		$	469,450	$	11,588	$	351,134	$	12,650	Totals		$	447,237	$	15,602	$	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:

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Notes to Consolidated Financial Statements (Unaudited)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022			2023		2022		2023		2022
Interest rate contracts:	Interest rate contracts:									Interest rate contracts:
Included in interest income on loans	Included in interest income on loans	$	1,804	$	390	$	3,546	$	444	Included in interest income on loans	$	1,327	$	811	$	4,873	$	1,255

Interest rate lock commitments:	Interest rate lock commitments:									Interest rate lock commitments:
Included in mortgage banking income	Included in mortgage banking income	(1,686)		3,404		551		(2,420)		Included in mortgage banking income	(247)		(4,046)		304		(6,466)
Forward commitments	Forward commitments									Forward commitments
Included in mortgage banking income	Included in mortgage banking income	1,041		(10,607)		2,424		(419)		Included in mortgage banking income	918		9,381		3,342		8,962
Total	Total	$	1,159	$	(6,813)	$	6,521	$	(2,395)	Total	$	1,998	$	6,146	$	8,519	$	3,751

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 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 ~~June~~September 30, 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	June 30, 2023				December 31, 2022					Balance Sheet	September 30, 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	$	330,000	$	23,764	$	130,000	$	24,514	Interest rate swaps	Other Assets	$	130,000	$	28,050	$	130,000	$	24,514
Interest rate collars	Interest rate collars	Other Assets	—		—		200,000		464		Interest rate collars	Other Assets	—		—		200,000		464
Total	Total		$	330,000	$	23,764	$	330,000	$	24,978	Total		$	130,000	$	28,050	$	330,000	$	24,978
Derivative liabilities:	Derivative liabilities:										Derivative liabilities:
Interest rate swaps		Other Liabilities	$	—	$	—	$	—	$	—

Interest rate collars	Interest rate collars	Other Liabilities	450,000		4,355		250,000		746		Interest rate collars	Other Liabilities	450,000		5,971		250,000		746
Totals	Totals		$	450,000	$	4,355	$	250,000	$	746	Totals		$	450,000	$	5,971	$	250,000	$	746

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. There were no ineffective portions for the ~~six~~nine months ended ~~June~~September 30, 2023 or 2022. The impact on other comprehensive income for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 is discussed in Note 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 variable interest rates.

The following table provides a summary of the Company's derivatives designated as fair value hedges as of the dates presented:

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Notes to Consolidated Financial Statements (Unaudited)


		Balance Sheet	June 30, 2023				December 31, 2022					Balance Sheet	September 30, 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	$	300,000	$	19,208	$	100,000	$	19,789	Interest rate swaps	Other Liabilities	$	100,000	$	21,896	$	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 June 30,				Six Months Ended June 30,					Income Statement	Three Months Ended September 30,				Nine Months Ended September 30,
		Location	2023		2022		2023		2022			Location	2023		2022		2023		2022
Derivative liabilities:	Derivative liabilities:										Derivative liabilities:
Interest rate swaps - subordinated notes	Interest rate swaps - subordinated notes	Interest Expense	$	(1,939)	$	(3,805)	$	582	$	(10,148)	Interest rate swaps - subordinated notes	Interest Expense	$	(2,688)	$	(10,495)	$	(2,106)	$	(15,232)

Derivative liabilities - hedged items:	Derivative liabilities - hedged items:										Derivative liabilities - hedged items:
Interest rate swaps - subordinated notes	Interest rate swaps - subordinated notes	Interest Expense	$	1,939	$	3,805	$	(582)	$	10,148	Interest rate swaps - subordinated notes	Interest Expense	$	2,688	$	10,495	$	2,106	$	15,232

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	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022		Balance Sheet Location	September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Long-term debt	Long-term debt	$	79,550	$	78,881	$	19,207	$	19,789	Long-term debt	$	76,905	$	78,881	$	21,896	$	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:


		Offsetting Derivative Assets				Offsetting Derivative Liabilities					Offsetting Derivative Assets				Offsetting Derivative Liabilities
		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Gross amounts recognized	Gross amounts recognized	$	36,832	$	36,493	$	23,894	$	22,056	Gross amounts recognized	$	45,807	$	36,493	$	28,081	$	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	36,832		36,493		23,894		22,056		Net amounts presented in the Consolidated Balance Sheets	45,807		36,493		28,081		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	23,842		22,056		23,842		22,056		Financial instruments	28,081		22,056		28,081		22,056
Financial collateral pledged	Financial collateral pledged	—		—		—		—		Financial collateral pledged	—		—		—		—
Net amounts	Net amounts	$	12,990	$	14,437	$	52	$	—	Net amounts	$	17,726	$	14,437	$	—	$	—

Note 10 – Income Taxes

(In Thousands)

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Notes to Consolidated Financial Statements (Unaudited)

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.


		June 30,		December 31,			September 30,		December 31,
		2023		2022			2023		2022
Deferred tax assets	Deferred tax assets					Deferred tax assets
Allowance for credit losses	Allowance for credit losses	$	52,475	$	52,551	Allowance for credit losses	$	53,078	$	52,551
Loans	Loans	2,173		2,518		Loans	1,932		2,518
Deferred compensation	Deferred compensation	12,449		14,447		Deferred compensation	14,381		14,447
Net unrealized losses on securities	Net unrealized losses on securities	63,874		70,999		Net unrealized losses on securities	66,442		70,999
Impairment of assets	Impairment of assets	220		316		Impairment of assets	135		316
Net operating loss carryforwards	Net operating loss carryforwards	151		497		Net operating loss carryforwards	—		497
Investment in partnerships	Investment in partnerships	1,366		1,164		Investment in partnerships	1,481		1,164

Lease liabilities under operating leases	Lease liabilities under operating leases	14,004		14,641		Lease liabilities under operating leases	13,505		14,641
Other	Other	5,897		3,523		Other	5,703		3,523
Total deferred tax assets	Total deferred tax assets	152,609		160,656		Total deferred tax assets	156,657		160,656

Deferred tax liabilities	Deferred tax liabilities					Deferred tax liabilities

Fixed assets	Fixed assets	10,340		10,342		Fixed assets	10,340		10,342
Mortgage servicing rights	Mortgage servicing rights	20,386		19,624		Mortgage servicing rights	21,103		19,624
Junior subordinated debt	Junior subordinated debt	1,827		1,948		Junior subordinated debt	1,767		1,948
Intangibles	Intangibles	2,539		2,702		Intangibles	2,483		2,702
Lease right-of-use asset	Lease right-of-use asset	13,363		14,018		Lease right-of-use asset	12,889		14,018
Other	Other	1,173		1,614		Other	993		1,614
Total deferred tax liabilities	Total deferred tax liabilities	49,628		50,248		Total deferred tax liabilities	49,575		50,248
Net deferred tax assets	Net deferred tax assets	$	102,981	$	110,408	Net deferred tax assets	$	107,082	$	110,408

For the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, the Company recorded a provision for income taxes totaling ~~$17,956~~$28,722 and ~~$18,792,~~$32,355, 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, 2020 through December 31, 2022.

Note 11 – Fair Value Measurements

(In Thousands)

Fair Value Measurements and the Fair Level Hierarchy

Accounting Standards Codification (“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

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Notes to Consolidated Financial Statements (Unaudited)

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:


		Level 1		Level 2		Level 3		Totals			Level 1		Level 2		Level 3		Totals
June 30, 2023
September 30, 2023										September 30, 2023
Financial assets:	Financial assets:									Financial assets:

Securities available for sale	Securities available for sale	$	—	$	950,930	$	—	$	950,930	Securities available for sale	$	—	$	909,108	$	—	$	909,108
Derivative instruments	Derivative instruments	—		38,746		—		38,746		Derivative instruments	—		47,719		—		47,719
Mortgage loans held for sale in loans held for sale	Mortgage loans held for sale in loans held for sale	—		249,615		—		249,615		Mortgage loans held for sale in loans held for sale	—		241,613		—		241,613
Total financial assets	Total financial assets	$	—	$	1,239,291	$	—	$	1,239,291	Total financial assets	$	—	$	1,198,440	$	—	$	1,198,440
Financial liabilities:	Financial liabilities:									Financial liabilities:
Derivative instruments:	Derivative instruments:	$	—	$	35,151	$	—	$	35,151	Derivative instruments:	$	—	$	43,469	$	—	$	43,469

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Notes to Consolidated Financial Statements (Unaudited)


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

Securities available for sale	$	—	$	1,533,942	$	—	$	1,533,942

Derivative instruments	—		38,047		—		38,047
Mortgage loans held for sale in loans held for sale	—		110,105		—		110,105
Total financial assets	$	—	$	1,682,094	$	—	$	1,682,094
Financial liabilities:
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 ~~six~~nine months ended ~~June~~September 30, 2023.

For the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, 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.

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:


June 30, 2023		Level 1		Level 2		Level 3		Totals
September 30, 2023										September 30, 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	$	—	$	—	$	51,537	$	51,537	Individually evaluated loans, net of allowance for credit losses	$	—	$	—	$	30,842	$	30,842
OREO	OREO	—		—		37		37		OREO	—		—		27		27

Total	Total	$	—	$	—	$	51,574	$	51,574	Total	$	—	$	—	$	30,869	$	30,869


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

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:

Individually evaluated loans: Individually evaluated loans are reviewed and evaluated for credit losses on at least a quarterly basis for additional impairment and adjusted accordingly, 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 that were measured or re-measured at fair value had a carrying value of ~~$63,680~~$43,648 and $18,288 at ~~June~~September 30, 2023 and December 31, 2022, respectively, and a specific reserve for these loans of ~~$12,143~~$12,806 and $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,

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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:


		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022

Carrying amount prior to remeasurement	Carrying amount prior to remeasurement	$	45	$	1,842	Carrying amount prior to remeasurement	$	45	$	1,842
Impairment recognized in results of operations	Impairment recognized in results of operations	(8)		(79)		Impairment recognized in results of operations	(18)		(79)
Fair value	Fair value	$	37	$	1,763	Fair value	$	27	$	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 ~~June~~September 30, 2023 and December 31, 2022. There were no valuation adjustments on MSRs during the ~~six~~nine months ended ~~June~~September 30, 2023 or 2022.

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

Financial instrument

Fair
Value

Valuation Technique

Significant
Unobservable Inputs

Range of Inputs

Individually evaluated loans, net of allowance for credit losses

~~51,537~~30,842

Appraised value of collateral less estimated costs to sell

Estimated costs to sell

4-10%

OREO

3727

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.

~~A net gain~~Net losses of ~~$1,133~~$256 and ~~net loss of $9,528~~$14,537 resulting from fair value changes of these mortgage loans were recorded in income during the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, 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.

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 ~~June~~September 30, 2023 and December 31, 2022:

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Notes to Consolidated Financial Statements (Unaudited)


		Aggregate Fair Value		Aggregate Unpaid Principal Balance		Difference			Aggregate Fair Value		Aggregate Unpaid Principal Balance		Difference
June 30, 2023
September 30, 2023								September 30, 2023
Mortgage loans held for sale measured at fair value	Mortgage loans held for sale measured at fair value	$	249,615	$	246,520	$	3,095	Mortgage loans held for sale measured at fair value	$	241,613	$	239,907	$	1,706

December 31, 2022	December 31, 2022							December 31, 2022
Mortgage loans held for sale measured at fair value	Mortgage loans held for sale measured at fair value	$	110,105	$	108,143	$	1,962	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											Fair Value
As of June 30, 2023		Carrying Value		Level 1		Level 2		Level 3		Total
As of September 30, 2023												As of September 30, 2023	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets	Financial assets											Financial assets
Cash and cash equivalents	Cash and cash equivalents	$	946,899	$	946,899	$	—	$	—	$	946,899	Cash and cash equivalents	$	741,156	$	741,156	$	—	$	—	$	741,156
Securities held to maturity	Securities held to maturity	1,273,044		—		1,153,541		—		1,153,541		Securities held to maturity	1,245,595		—		1,079,123		—		1,079,123
Securities available for sale	Securities available for sale	950,930		—		950,930		—		950,930		Securities available for sale	909,108		—		909,108		—		909,108
Loans held for sale	Loans held for sale	249,615		—		249,615		—		249,615		Loans held for sale	241,613		—		241,613		—		241,613
Loans, net	Loans, net	11,736,125		—		—		11,059,520		11,059,520		Loans, net	11,970,250		—		—		11,178,841		11,178,841
Mortgage servicing rights	Mortgage servicing rights	87,432		—		—		125,055		125,055		Mortgage servicing rights	90,241		—		—		127,719		127,719
Derivative instruments	Derivative instruments	38,746		—		38,746		—		38,746		Derivative instruments	47,719		—		47,719		—		47,719
Financial liabilities	Financial liabilities											Financial liabilities
Deposits	Deposits	$	14,095,361	$	11,139,951	$	2,917,822	$	—	$	14,057,773	Deposits	$	14,157,110	$	11,284,243	$	2,846,025	$	—	$	14,130,268
Short-term borrowings	Short-term borrowings	257,305		257,305		—		—		257,305		Short-term borrowings	107,662		107,662		—		—		107,662

Junior subordinated debentures	Junior subordinated debentures	112,510		—		93,243		—		93,243		Junior subordinated debentures	112,744		—		94,410		—		94,410
Subordinated notes	Subordinated notes	317,120		—		258,250		—		258,250		Subordinated notes	314,655		—		249,900		—		249,900
Derivative instruments	Derivative instruments	35,151		—		35,151		—		35,151		Derivative instruments	43,469		—		43,469		—		43,469


			Fair Value
As of December 31, 2022	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	575,992	$	575,992	$	—	$	—	$	575,992
Securities held to maturity	1,324,040		—		1,206,540		—		1,206,540
Securities available for sale	1,533,942		—		1,533,942		—		1,533,942
Loans held for sale	110,105		—		110,105		—		110,105
Loans, net	11,386,214		—		—		10,850,181		10,850,181
Mortgage servicing rights	84,448		—		—		122,454		122,454
Derivative instruments	38,047		—		38,047		—		38,047
Financial liabilities
Deposits	$	13,486,966	$	11,791,526	$	1,653,891	$	—	$	13,445,417
Short-term borrowings	712,232		712,232		—		—		712,232


Junior subordinated debentures	112,042		—		98,754		—		98,754
Subordinated notes	316,091		—		277,500		—		277,500
Derivative instruments	33,185		—		33,185		—		33,185

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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:


		Pre-Tax		Tax Expense (Benefit)		Net of Tax			Pre-Tax		Tax Expense (Benefit)		Net of Tax
Three months ended June 30, 2023
Three months ended September 30, 2023								Three months ended September 30, 2023
Securities available for sale:	Securities available for sale:							Securities available for sale:
Unrealized holding losses on securities	Unrealized holding losses on securities	$	(21,283)	$	(5,353)	$	(15,930)	Unrealized holding losses on securities	$	(17,175)	$	(4,292)	$	(12,883)

Reclassification adjustment for losses realized in net income		22,438		5,622		16,816

Amortization of unrealized holding losses on securities transferred to the held to maturity category	Amortization of unrealized holding losses on securities transferred to the held to maturity category	3,026		774		2,252		Amortization of unrealized holding losses on securities transferred to the held to maturity category	3,959		1,012		2,947
Total securities available for sale	Total securities available for sale	4,181		1,043		3,138		Total securities available for sale	(13,216)		(3,280)		(9,936)
Derivative instruments:	Derivative instruments:							Derivative instruments:
Unrealized holding losses on derivative instruments		(3,167)		(806)		(2,361)
Unrealized holding gains on derivative instruments								Unrealized holding gains on derivative instruments	2,670		683		1,987

Total derivative instruments	Total derivative instruments	(3,167)		(806)		(2,361)		Total derivative instruments	2,670		683		1,987
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	115		29		86		Amortization of net actuarial loss recognized in net periodic pension cost	116		30		86
Total defined benefit pension and post-retirement benefit plans	Total defined benefit pension and post-retirement benefit plans	115		29		86		Total defined benefit pension and post-retirement benefit plans	116		30		86
Total other comprehensive income		$	1,129	$	266	$	863
Three months ended June 30, 2022
Total other comprehensive loss								Total other comprehensive loss	$	(10,430)	$	(2,567)	$	(7,863)
Three months ended September 30, 2022								Three months ended September 30, 2022
Securities available for sale:	Securities available for sale:							Securities available for sale:

Unrealized holding losses on securities	Unrealized holding losses on securities	$	(76,405)	$	(19,447)	$	(56,958)	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	Amortization of unrealized holding gains on securities transferred to the held to maturity category	(220)		(56)		(164)		Amortization of unrealized holding gains on securities transferred to the held to maturity category	1,619		412		1,207
Total securities available for sale	Total securities available for sale	(76,625)		(19,503)		(57,122)		Total securities available for sale	(83,664)		(21,292)		(62,372)
Derivative instruments:	Derivative instruments:							Derivative instruments:
Unrealized holding gains on derivative instruments	Unrealized holding gains on derivative instruments	8,401		2,139		6,262		Unrealized holding gains on derivative instruments	2,262		575		1,687

Total derivative instruments	Total derivative instruments	8,401		2,139		6,262		Total derivative instruments	2,262		575		1,687
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	41		10		31		Amortization of net actuarial loss recognized in net periodic pension cost	42		11		31
Total defined benefit pension and post-retirement benefit plans	Total defined benefit pension and post-retirement benefit plans	41		10		31		Total defined benefit pension and post-retirement benefit plans	42		11		31
Total other comprehensive loss	Total other comprehensive loss	$	(68,183)	$	(17,354)	$	(50,829)	Total other comprehensive loss	$	(81,360)	$	(20,706)	$	(60,654)

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Notes to Consolidated Financial Statements (Unaudited)


		Pre-Tax		Tax Expense (Benefit)		Net of Tax			Pre-Tax		Tax Expense (Benefit)		Net of Tax
Six months ended June 30, 2023
Nine months ended September 30, 2023								Nine months ended September 30, 2023
Securities available for sale:	Securities available for sale:							Securities available for sale:
Unrealized holding losses on securities	Unrealized holding losses on securities	$	(569)	$	(170)	$	(399)	Unrealized holding losses on securities	$	(17,744)	$	(4,462)	$	(13,282)

Reclassification adjustment for losses realized in net income	Reclassification adjustment for losses realized in net income	22,438		5,622		16,816		Reclassification adjustment for losses realized in net income	22,438		5,622		16,816

Amortization of unrealized holding losses on securities transferred to the held to maturity category	Amortization of unrealized holding losses on securities transferred to the held to maturity category	6,154		1,574		4,580		Amortization of unrealized holding losses on securities transferred to the held to maturity category	10,113		2,586		7,527
Total securities available for sale	Total securities available for sale	28,023		7,026		20,997		Total securities available for sale	14,807		3,746		11,061
Derivative instruments:	Derivative instruments:							Derivative instruments:
Unrealized holding losses on derivative instruments	Unrealized holding losses on derivative instruments	(4,823)		(1,230)		(3,593)		Unrealized holding losses on derivative instruments	(2,153)		(547)		(1,606)

Total derivative instruments	Total derivative instruments	(4,823)		(1,230)		(3,593)		Total derivative instruments	(2,153)		(547)		(1,606)
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	231		59		172		Amortization of net actuarial loss recognized in net periodic pension cost	347		89		258
Total defined benefit pension and post-retirement benefit plans	Total defined benefit pension and post-retirement benefit plans	231		59		172		Total defined benefit pension and post-retirement benefit plans	347		89		258
Total other comprehensive income	Total other comprehensive income	$	23,431	$	5,855	$	17,576	Total other comprehensive income	$	13,001	$	3,288	$	9,713

Six months ended June 30, 2022
Nine months ended September 30, 2022								Nine months ended September 30, 2022
Securities available for sale:	Securities available for sale:							Securities available for sale:
Unrealized holding losses on securities	Unrealized holding losses on securities	$	(211,161)	$	(53,741)	$	(157,420)	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		(319)		(81)		(238)
Amortization of unrealized holding losses on securities transferred to the held to maturity category								Amortization of unrealized holding losses on securities transferred to the held to maturity category	1,300		331		969
Total securities available for sale	Total securities available for sale	(211,480)		(53,822)		(157,658)		Total securities available for sale	(295,144)		(75,114)		(220,030)
Derivative instruments:	Derivative instruments:							Derivative instruments:
Unrealized holding gains on derivative instruments	Unrealized holding gains on derivative instruments	16,957		4,316		12,641		Unrealized holding gains on derivative instruments	19,219		4,891		14,328

Total derivative instruments	Total derivative instruments	16,957		4,316		12,641		Total derivative instruments	19,219		4,891		14,328
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	83		21		62		Amortization of net actuarial loss recognized in net periodic pension cost	125		32		93
Total defined benefit pension and post-retirement benefit plans	Total defined benefit pension and post-retirement benefit plans	83		21		62		Total defined benefit pension and post-retirement benefit plans	125		32		93
Total other comprehensive loss	Total other comprehensive loss	$	(194,440)	$	(49,485)	$	(144,955)	Total other comprehensive loss	$	(275,800)	$	(70,191)	$	(205,609)

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


		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022
Unrealized losses on securities	Unrealized losses on securities	$	(198,769)	$	(219,766)	Unrealized losses on securities	$	(208,705)	$	(219,766)

Unrealized gains on derivative instruments	Unrealized gains on derivative instruments	15,363		18,956		Unrealized gains on derivative instruments	17,350		18,956
Unrecognized losses on defined benefit pension and post-retirement benefit plans obligations	Unrecognized losses on defined benefit pension and post-retirement benefit plans obligations	(8,055)		(8,227)		Unrecognized losses on defined benefit pension and post-retirement benefit plans obligations	(7,969)		(8,227)
Total accumulated other comprehensive loss	Total accumulated other comprehensive loss	$	(191,461)	$	(209,037)	Total accumulated other comprehensive loss	$	(199,324)	$	(209,037)

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Notes to Consolidated Financial Statements (Unaudited)

Note 13 – 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
		June 30,					September 30,
		2023		2022			2023		2022
Basic	Basic					Basic
Net income applicable to common stock	Net income applicable to common stock	$	28,643	$	39,678	Net income applicable to common stock	$	41,833	$	46,567
Average common shares outstanding	Average common shares outstanding	56,107,881		55,906,755		Average common shares outstanding	56,138,618		55,947,214
Net income per common share - basic	Net income per common share - basic	$	0.51	$	0.71	Net income per common share - basic	$	0.75	$	0.83
Diluted	Diluted					Diluted
Net income applicable to common stock	Net income applicable to common stock	$	28,643	$	39,678	Net income applicable to common stock	$	41,833	$	46,567
Average common shares outstanding	Average common shares outstanding	56,107,881		55,906,755		Average common shares outstanding	56,138,618		55,947,214
Effect of dilutive stock-based compensation	Effect of dilutive stock-based compensation	287,772		276,090		Effect of dilutive stock-based compensation	385,269		301,506
Average common shares outstanding - diluted	Average common shares outstanding - diluted	56,395,653		56,182,845		Average common shares outstanding - diluted	56,523,887		56,248,720
Net income per common share - diluted	Net income per common share - diluted	$	0.51	$	0.71	Net income per common share - diluted	$	0.74	$	0.83


		Six Months Ended					Nine Months Ended
		June 30,					September 30,
		2023		2022			2023		2022
Basic	Basic					Basic
Net income applicable to common stock	Net income applicable to common stock	$	74,721	$	73,225	Net income applicable to common stock	$	116,554	$	119,792
Average common shares outstanding	Average common shares outstanding	56,058,585		55,858,243		Average common shares outstanding	56,085,556		55,888,226
Net income per common share - basic	Net income per common share - basic	$	1.33	$	1.31	Net income per common share - basic	$	2.08	$	2.14
Diluted	Diluted					Diluted
Net income applicable to common stock	Net income applicable to common stock	$	74,721	$	73,225	Net income applicable to common stock	$	116,554	$	119,792
Average common shares outstanding	Average common shares outstanding	56,058,585		55,858,243		Average common shares outstanding	56,085,556		55,888,226
Effect of dilutive stock-based compensation	Effect of dilutive stock-based compensation	271,710		272,519		Effect of dilutive stock-based compensation	308,401		281,660
Average common shares outstanding - diluted	Average common shares outstanding - diluted	56,330,295		56,130,762		Average common shares outstanding - diluted	56,393,957		56,169,886
Net income per common share - diluted	Net income per common share - diluted	$	1.33	$	1.30	Net income per common share - diluted	$	2.07	$	2.13

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
June 30,
2023 2022
Number of shares 179,226 213,953


	Three Months Ended
	September 30,
	2023	2022
Number of shares	1,000	9,750

Six Months Ended
June 30,
2023 2022
Number of shares 182,226 214,203


	Nine Months Ended
	September 30,
	2023	2022
Number of shares	24,146	19,750

Note 14 – Regulatory Matters

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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:

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:


		June 30, 2023				December 31, 2022					September 30, 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)	$	1,524,545	9.22	%	$	1,481,197	9.36	%	Tier 1 Capital to Average Assets (Leverage)	$	1,558,521	9.48	%	$	1,481,197	9.36	%
Common Equity Tier 1 Capital to Risk-Weighted Assets	Common Equity Tier 1 Capital to Risk-Weighted Assets	1,415,626		10.30	%	1,372,747		10.21	%	Common Equity Tier 1 Capital to Risk-Weighted Assets	1,449,367		10.46	%	1,372,747		10.21	%
Tier 1 Capital to Risk-Weighted Assets	Tier 1 Capital to Risk-Weighted Assets	1,524,545		11.09	%	1,481,197		11.01	%	Tier 1 Capital to Risk-Weighted Assets	1,558,521		11.25	%	1,481,197		11.01	%
Total Capital to Risk-Weighted Assets	Total Capital to Risk-Weighted Assets	2,028,793		14.76	%	1,968,001		14.63	%	Total Capital to Risk-Weighted Assets	2,065,992		14.91	%	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)	$	1,668,033	10.09	%	$	1,630,389	10.30	%	Tier 1 Capital to Average Assets (Leverage)	$	1,698,680	10.33	%	$	1,630,389	10.30	%
Common Equity Tier 1 Capital to Risk-Weighted Assets	Common Equity Tier 1 Capital to Risk-Weighted Assets	1,668,033		12.06	%	1,630,389		12.10	%	Common Equity Tier 1 Capital to Risk-Weighted Assets	1,698,680		12.23	%	1,630,389		12.10	%
Tier 1 Capital to Risk-Weighted Assets	Tier 1 Capital to Risk-Weighted Assets	1,668,033		12.06	%	1,630,389		12.10	%	Tier 1 Capital to Risk-Weighted Assets	1,698,680		12.23	%	1,630,389		12.10	%
Total Capital to Risk-Weighted Assets	Total Capital to Risk-Weighted Assets	1,835,954		13.27	%	1,781,312		13.22	%	Total Capital to Risk-Weighted Assets	1,869,600		13.46	%	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 ~~June~~September 30, 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.

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Notes to Consolidated Financial Statements (Unaudited)

Note 15 – 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, 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, 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 June 30, 2023
Three months ended September 30, 2023												Three months ended September 30, 2023
Net interest income (loss)	Net interest income (loss)	$	136,370	$	428	$	28	$	(6,610)	$	130,216	Net interest income (loss)	$	133,909	$	456	$	8	$	(6,990)	$	127,383
Provision for credit losses	Provision for credit losses	3,000		—		—		—		3,000		Provision for credit losses	5,315		—		—		—		5,315
Noninterest income (loss)	Noninterest income (loss)	8,931		2,859		5,866		(430)		17,226		Noninterest income (loss)	28,679		3,276		6,638		(393)		38,200
Noninterest expense	Noninterest expense	102,044		2,070		4,645		406		109,165		Noninterest expense	99,791		2,237		5,150		491		107,669
Income (loss) before income taxes	Income (loss) before income taxes	40,257		1,217		1,249		(7,446)		35,277		Income (loss) before income taxes	57,482		1,495		1,496		(7,874)		52,599
Income tax expense (benefit)	Income tax expense (benefit)	8,258		316		(18)		(1,922)		6,634		Income tax expense (benefit)	12,339		387		72		(2,032)		10,766
Net income (loss)	Net income (loss)	$	31,999	$	901	$	1,267	$	(5,524)	$	28,643	Net income (loss)	$	45,143	$	1,108	$	1,424	$	(5,842)	$	41,833

Total assets	Total assets	$	17,181,988	$	37,867	$	4,757	$	(270)	$	17,224,342	Total assets	$	17,143,564	$	39,434	$	5,077	$	(6,454)	$	17,181,621
Goodwill	Goodwill	$	988,898	$	2,767	—		—		$	991,665	Goodwill	$	988,898	$	2,767	—		—		$	991,665

Three months ended June 30, 2022
Three months ended September 30, 2022												Three months ended September 30, 2022
Net interest income (loss)	Net interest income (loss)	$	117,580	$	95	$	529	$	(4,689)	$	113,515	Net interest income (loss)	$	134,528	$	98	$	794	$	(5,102)	$	130,318
Provision for credit losses	Provision for credit losses	2,000		—		—		—		2,000		Provision for credit losses	9,800		—		—		—		9,800
Noninterest income (loss)	Noninterest income (loss)	28,729		2,611		6,315		(441)		37,214		Noninterest income (loss)	32,324		3,123		6,132		(393)		41,186
Noninterest expense	Noninterest expense	91,249		2,005		4,591		349		98,194		Noninterest expense	94,474		2,190		4,553		357		101,574
Income (loss) before income taxes	Income (loss) before income taxes	53,060		701		2,253		(5,479)		50,535		Income (loss) before income taxes	62,578		1,031		2,373		(5,852)		60,130
Income tax expense (benefit)	Income tax expense (benefit)	12,093		185		—		(1,421)		10,857		Income tax expense (benefit)	14,811		268		—		(1,516)		13,563
Net income (loss)	Net income (loss)	$	40,967	$	516	$	2,253	$	(4,058)	$	39,678	Net income (loss)	$	47,767	$	763	$	2,373	$	(4,336)	$	46,567

Total assets	Total assets	$	16,520,685	$	34,264	$	65,709	$	(2,557)	$	16,618,101	Total assets	$	16,369,592	$	35,761	$	73,704	$	(7,958)	$	16,471,099
Goodwill	Goodwill	$	943,524	$	2,767	—		—		$	946,291	Goodwill	$	943,524	$	2,767	—		—		$	946,291

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


		Community Banks		Insurance		Wealth Management		Other		Consolidated			Community Banks		Insurance		Wealth Management		Other		Consolidated
Six months ended June 30, 2023
Nine months ended September 30, 2023												Nine months ended September 30, 2023
Net interest income (loss)	Net interest income (loss)	$	278,153	$	714	$	52	$	(12,928)	$	265,991	Net interest income (loss)	$	412,066	$	1,170	$	56	$	(19,918)	$	393,374
Provision for credit losses	Provision for credit losses	10,960		—		—		—		10,960		Provision for credit losses	16,275		—		—		—		16,275
Noninterest income (loss)	Noninterest income (loss)	37,652		6,221		11,450		(804)		54,519		Noninterest income (loss)	66,331		9,497		18,088		(1,197)		92,719
Noninterest expense	Noninterest expense	202,663		4,109		9,335		766		216,873		Noninterest expense	302,454		6,346		14,485		1,257		324,542
Income (loss) before income taxes	Income (loss) before income taxes	102,182		2,826		2,167		(14,498)		92,677		Income (loss) before income taxes	159,668		4,321		3,659		(22,372)		145,276
Income tax expense (benefit)	Income tax expense (benefit)	20,980		732		(14)		(3,742)		17,956		Income tax expense (benefit)	33,319		1,119		58		(5,774)		28,722
Net income (loss)	Net income (loss)	$	81,202	$	2,094	$	2,181	$	(10,756)	$	74,721	Net income (loss)	$	126,349	$	3,202	$	3,601	$	(16,598)	$	116,554

Total assets	Total assets	$	17,181,988	$	37,867	$	4,757	$	(270)	$	17,224,342	Total assets	$	17,143,564	$	39,434	$	5,077	$	(6,454)	$	17,181,621
Goodwill	Goodwill	$	988,898	$	2,767	$	—	$	—	$	991,665	Goodwill	$	988,898	$	2,767	$	—	$	—	$	991,665

Six months ended June 30, 2022
Nine months ended September 30, 2022												Nine months ended September 30, 2022
Net interest income (loss)	Net interest income (loss)	$	221,512	$	188	$	1,019	$	(9,575)	$	213,144	Net interest income (loss)	$	356,040	$	286	$	1,813	$	(14,677)	$	343,462
Provision for credit losses	Provision for credit losses	3,500		—		—		—		3,500		Provision for credit losses	13,300		—		—		—		13,300
Noninterest income (loss)	Noninterest income (loss)	57,035		5,708		12,820		(891)		74,672		Noninterest income (loss)	89,359		8,831		18,952		(1,284)		115,858
Noninterest expense	Noninterest expense	178,120		4,121		9,346		712		192,299		Noninterest expense	272,594		6,311		13,899		1,069		293,873
Income (loss) before income taxes	Income (loss) before income taxes	96,927		1,775		4,493		(11,178)		92,017		Income (loss) before income taxes	159,505		2,806		6,866		(17,030)		152,147
Income tax expense (benefit)	Income tax expense (benefit)	21,224		466		—		(2,898)		18,792		Income tax expense (benefit)	36,035		734		—		(4,414)		32,355
Net income (loss)	Net income (loss)	$	75,703	$	1,309	$	4,493	$	(8,280)	$	73,225	Net income (loss)	$	123,470	$	2,072	$	6,866	$	(12,616)	$	119,792

Total assets	Total assets	$	16,520,685	$	34,264	$	65,709	$	(2,557)	$	16,618,101	Total assets	$	16,369,592	$	35,761	$	73,704	$	(7,958)	$	16,471,099
Goodwill	Goodwill	$	943,524	$	2,767	$	—	$	—	$	946,291	Goodwill	$	943,524	$	2,767	$	—	$	—	$	946,291

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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 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 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; (xiv) changes in demand for loan and deposit products and other financial services; (xv) concentrations of credit or deposit exposure; (xvi) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships; (xvii) increased cybersecurity risk, including potential network breaches, business disruptions or financial losses; (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; (xix) the impact, extent and timing of technological changes; and (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 ~~June~~September 30, 2023 compared to December 31, 2022.

Assets

Total assets were ~~$17,224,342~~$17,181,621 at ~~June~~September 30, 2023 compared to $16,988,176 at December 31, 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:


		June 30, 2023				December 31, 2022					September 30, 2023				December 31, 2022
		Balance		Percentage of Portfolio		Balance		Percentage of Portfolio			Balance		Percentage of Portfolio		Balance		Percentage of Portfolio

Obligations of other U.S. Government agencies and corporations	Obligations of other U.S. Government agencies and corporations	$	—	—	%	$	164,660	5.76	%	Obligations of other U.S. Government agencies and corporations	$	—	—	%	$	164,660	5.76	%
Obligations of states and political subdivisions	Obligations of states and political subdivisions	328,000		14.75		436,788		15.28		Obligations of states and political subdivisions	322,592		14.97		436,788		15.28
Mortgage-backed securities	Mortgage-backed securities	1,768,083		79.50		2,122,855		74.28		Mortgage-backed securities	1,705,596		79.16		2,122,855		74.28

Other debt securities	Other debt securities	127,923		5.75		133,711		4.68		Other debt securities	126,547		5.87		133,711		4.68

		$	2,224,006	100.00	%	$	2,858,014	100.00	%		$	2,154,735	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	$	2,223,974			$	2,857,982			Securities, net of allowance for credit losses	$	2,154,703			$	2,857,982

~~The Company did not purchase any securities during~~During the ~~six~~nine months ended ~~June~~September 30, ~~2023. During the six months ended June 30, 2022,~~2023, the Company ~~deployed a portion of excess liquidity into the securities portfolio and~~ purchased ~~$701,555~~$9,646 in investment ~~securities. Mortgage-backed~~securities, with mortgage-backed securities and collateralized mortgage obligations (“CMOs”), comprising all of these purchases, which occurred in the ~~aggregate, comprised approximately 60%~~third quarter of ~~these purchases.~~2023. 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. During the nine months ended September 30, 2022, we purchased $800,260 in investment securities, with mortgage-backed securities and CMOs, in the aggregate, comprising approximately 62% of these purchases. Obligations of other U.S. Government agencies and corporations comprised approximately 21% of purchases made during the first ~~six~~nine months of 2022. Obligations of state and political subdivisions comprised approximately 6%5% of purchases made during the first ~~six~~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 ~~approximately 13%~~12% of purchases made during the first ~~six~~nine months of 2022. Our purchases of securities in the first nine months of 2023 substantially declined from the levels during the same period in 2022 as the proceeds of our securities portfolio was used to fund loan growth rather than being reinvested in the securities portfolio.

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 the intent and ability to hold these 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 ~~June~~September 30, 2023, the net unrealized after tax losses remaining to be amortized in accumulated other comprehensive income (loss) was ~~$64,033.~~$61,086. No gains or losses were recognized at the time of transfer.

Proceeds from maturities, calls and principal payments on securities during the first ~~six~~nine months of 2023 totaled ~~$144,953.~~$208,095. The Company sold from the available for sale portfolio agency securities, municipal securities, residential mortgage backed securities and commercial mortgage backed securities with a carrying value of $511,419 at the time of sale for net proceeds of $488,981, resulting in a net loss on sale of $22,438 for the ~~three and six~~nine months ended ~~June~~September 30, 2023. Proceeds from the maturities, calls and principal payments on securities during the first ~~six~~nine months of 2022 totaled ~~$266,656.~~$372,484. The Company did not sell any securities during the first ~~six~~nine months of 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 ~~$249,615~~$241,613 at ~~June~~September 30, 2023, as compared to $110,105 at December 31, 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

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mandatory delivery sales agreement, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price and delivery date. Penalties are paid to the investor if we fail to satisfy the contract. Gains and losses are realized at the time consideration is received and all other criteria for sales treatment have been met. Our standard practice is to sell the

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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 ~~$11,930,516~~$12,168,023 at ~~June~~September 30, 2023 and $11,578,304 at December 31, 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:


		June 30, 2023				December 31, 2022					September 30, 2023				December 31, 2022
		Total Loans		Percentage of Total Loans		Total Loans		Percentage of Total Loans			Total Loans		Percentage of Total Loans		Total Loans		Percentage of Total Loans
Commercial, financial, agricultural	Commercial, financial, agricultural	$	1,729,070	14.49	%	$	1,673,883	14.46	%	Commercial, financial, agricultural	$	1,819,891	14.96	%	$	1,673,883	14.46	%
Lease financing, net of unearned income	Lease financing, net of unearned income	122,370		1.03		115,013		0.99		Lease financing, net of unearned income	120,724		0.99		115,013		0.99
Real estate – construction:	Real estate – construction:									Real estate – construction:
Residential	Residential	308,401		2.58		355,500		3.07		Residential	300,238		2.47		355,500		3.07
Commercial	Commercial	1,060,618		8.89		974,837		8.42		Commercial	1,107,126		9.10		974,837		8.42

Total real estate – construction	Total real estate – construction	1,369,019		11.47		1,330,337		11.49		Total real estate – construction	1,407,364		11.57		1,330,337		11.49
Real estate – 1-4 family mortgage:	Real estate – 1-4 family mortgage:									Real estate – 1-4 family mortgage:
Primary	Primary	2,372,739		19.89		2,222,856		19.20		Primary	2,405,703		19.77		2,222,856		19.20
Home equity	Home equity	502,341		4.21		501,906		4.33		Home equity	509,394		4.19		501,906		4.33
Rental/investment	Rental/investment	335,509		2.81		334,382		2.89		Rental/investment	353,613		2.91		334,382		2.89
Land development	Land development	138,065		1.16		157,119		1.36		Land development	130,166		1.07		157,119		1.36
Total real estate – 1-4 family mortgage	Total real estate – 1-4 family mortgage	3,348,654		28.07		3,216,263		27.78		Total real estate – 1-4 family mortgage	3,398,876		27.94		3,216,263		27.78
Real estate – commercial mortgage:	Real estate – commercial mortgage:									Real estate – commercial mortgage:
Owner-occupied	Owner-occupied	1,553,890		13.03		1,539,296		13.29		Owner-occupied	1,588,174		13.04		1,539,296		13.29
Non-owner occupied	Non-owner occupied	3,585,160		30.05		3,452,910		29.82		Non-owner occupied	3,610,578		29.67		3,452,910		29.82
Land development	Land development	113,429		0.95		125,857		1.09		Land development	114,414		0.94		125,857		1.09
Total real estate – commercial mortgage	Total real estate – commercial mortgage	5,252,479		44.03		5,118,063		44.20		Total real estate – commercial mortgage	5,313,166		43.65		5,118,063		44.20
Installment loans to individuals	Installment loans to individuals	108,924		0.91		124,745		1.08		Installment loans to individuals	108,002		0.89		124,745		1.08
Total loans, net of unearned income	Total loans, net of unearned income	$	11,930,516	100.00	%	$	11,578,304	100.00	%	Total loans, net of unearned income	$	12,168,023	100.00	%	$	11,578,304	100.00	%

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 ~~June~~September 30, 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 primary source of funds. Total deposits were ~~$14,095,361~~$14,157,110 and $13,486,966 at ~~June~~September 30, 2023 and December 31, 2022, respectively. Noninterest-bearing deposits were ~~$3,878,953~~$3,734,197 and $4,558,756 at ~~June~~September 30, 2023 and December 31, 2022, respectively, while interest-bearing deposits were ~~$10,216,408~~$10,422,913 and $8,928,210 at ~~June~~September 30, 2023 and December 31, 2022, respectively. Interest-bearing deposits included brokered deposits of ~~$1,080,958~~$757,775 and $233,133 at ~~June~~September 30, 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 ~~27.52%~~26.38% of total deposits at ~~June~~September 30, 2023, as compared to 33.80% of total deposits at December 31, 2022. The decrease in noninterest-bearing deposits as a percentage of total deposits reflects both deposit customers transferring noninterest-bearing deposits to interest-bearing deposits such as money market funds offered by the Company, other financial institutions and other financial services companies, and the impact of our increase in brokered

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deposits in the first ~~six~~nine months of 2023 as compared to brokered deposits at December 31, 2022, as management elected to maintain a high level of on-balance sheet liquidity in light of the conditions affecting financial institutions nationwide. Under certain circumstances, management may elect to acquire non-core deposits (in the form of brokered deposits) or public fund

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deposits (which are deposits of counties, municipalities or other political subdivisions). The source of funds that we select depends on the terms of the deposits and how those terms assist us in mitigating interest rate risk, maintaining our liquidity position and managing our net interest ~~margin.~~margin; business factors, described in the following paragraph, may cause us to obtain public deposits. 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 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 ~~$1,850,108~~$1,879,215 and $1,760,460 at ~~June~~September 30, 2023 and December 31, 2022, respectively, and represented ~~13.13%~~13.27% and 13.05% of total deposits as of ~~June~~September 30, 2023 and December 31, 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:


		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022
Security repurchase agreements	Security repurchase agreements	$	7,305	$	12,232	Security repurchase agreements	$	7,662	$	12,232

Short-term borrowings from the FHLB	Short-term borrowings from the FHLB	250,000		700,000		Short-term borrowings from the FHLB	100,000		700,000

		$	257,305	$	712,232		$	107,662	$	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:


		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022

Junior subordinated debentures	Junior subordinated debentures	$	112,510	$	112,042	Junior subordinated debentures	$	112,744	$	112,042
Subordinated notes	Subordinated notes	317,120		316,091		Subordinated notes	314,655		316,091
		$	429,630	$	428,133		$	427,399	$	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 ~~June~~September 30, 2023 or December 31, 2022. All advances from the FHLB are collateralized by a blanket lien on the Bank’s loans. The Company had ~~$3,484,050~~$3,111,063 of availability on unused lines of credit with the FHLB at ~~June~~September 30, 2023, as compared to $3,651,678 at December 31, 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.

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.

Table of Contents

Results of Operations

Net Income

~~Table of Contents~~

Net income for the ~~second~~third quarter of 2023 was ~~$28,643~~$41,833 compared to net income of ~~$39,678~~$46,567 for the ~~second~~third quarter of 2022. Basic and diluted earnings per share (“EPS”) for the ~~second~~third quarter of 2023 were ~~$0.51~~$0.75 and $0.74, respectively, as compared to basic and diluted EPS of ~~$0.71~~$0.83 for the ~~second~~third quarter of 2022. Net income for the ~~six~~nine months ended ~~June~~September 30, 2023, was ~~$74,721~~$116,554 compared to net income of ~~$73,225~~$119,792 for the same period in 2022. Basic and diluted EPS were ~~$1.33~~$2.08 and $2.07, respectively, for the first ~~six~~nine months of 2023 as compared to ~~$1.31~~$2.14 and ~~$1.30,~~$2.13, respectively, for the first ~~six~~nine months of 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.


		Three Months Ended													Three Months Ended
		June 30, 2023						June 30, 2022							September 30, 2023						September 30, 2022
		Pre-tax		After-tax		Impact to Diluted EPS		Pre-tax		After-tax		Impact to Diluted EPS			Pre-tax		After-tax		Impact to Diluted EPS		Pre-tax		After-tax		Impact to Diluted EPS

Gain on sale of MSR														Gain on sale of MSR	$	—	$	—	$	—	$	(2,960)	$	(2,292)	$	(0.04)

Restructuring charges		$	—	$	—	$	—	$	1,187	$	932	$	0.01
Loss on sale of securities		22,438		18,085		0.32		—		—		—

		Six Months Ended													Nine Months Ended
		June 30, 2023						June 30, 2022							September 30, 2023						September 30, 2022
		Pre-tax		After-tax		Impact to Diluted EPS		Pre-tax		After-tax		Impact to Diluted EPS			Pre-tax		After-tax		Impact to Diluted EPS		Pre-tax		After-tax		Impact to Diluted EPS
Merger and conversion expenses	Merger and conversion expenses	$	—	$	—	$	—	$	687	$	547	$	0.01	Merger and conversion expenses	$	—	$	—	$	—	$	687	$	541	$	0.01

Gain on sale of MSR														Gain on sale of MSR	—		—		—		(2,960)		(2,330)		(0.04)

Restructuring charges	Restructuring charges	—		—		—		732		583		0.01		Restructuring charges	—		—		—		732		576		0.01
Loss on sale of securities	Loss on sale of securities	22,438		17,870		0.31		—		—		—		Loss on sale of securities	22,438		17,859		0.31		—		—		—

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 ~~88.54%~~77.31% of total revenue (i.e., net interest income on a fully taxable equivalent basis and noninterest income) for the ~~second~~third quarter of 2023. The primary concerns in managing net interest income are the volume, mix and repricing of assets and liabilities.

Net interest income was ~~$130,216~~$127,383 and ~~$265,991~~$393,374 for the three and ~~six~~nine months ended ~~June~~September 30, 2023, as compared to ~~$113,515~~$130,318 and ~~$213,144~~$343,462 for the same periods in 2022. On a tax equivalent basis, net interest income was ~~$133,085~~$130,131 and ~~$271,614~~$401,745 for the three and ~~six~~nine months ended ~~June~~September 30, 2023, as compared to ~~$115,321~~$132,435 and ~~$216,704~~$349,139 for the same periods in 2022.

The following 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 June 30,													Three Months Ended September 30,
		2023						2022							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	$	11,877,592	$	175,549	5.93	%	$	10,477,036	$	107,612	4.12	%	Loans held for investment	$	12,030,109	$	183,521	6.06	%	$	10,829,137	$	124,614	4.57	%
Loans held for sale	Loans held for sale	192,539		2,990		6.21		227,435		2,586		4.55		Loans held for sale	227,982		3,751		6.58		143,837		2,075		5.77
Securities:	Securities:													Securities:
Taxable	Taxable	2,435,442		12,089		1.99		2,684,624		10,355		1.54		Taxable	2,053,113		9,218		1.80		2,773,924		12,439		1.79
Tax-exempt(1)	Tax-exempt(1)	413,680		2,429		2.35		451,878		2,719		2.41		Tax-exempt(1)	329,760		1,807		2.19		449,927		2,664		2.37
Interest-bearing balances with banks	Interest-bearing balances with banks	524,307		6,978		5.34		1,004,226		1,954		0.78		Interest-bearing balances with banks	729,049		10,128		5.51		663,218		3,458		2.07
Total interest-earning assets	Total interest-earning assets	15,443,560		200,035		5.19		14,845,199		125,226		3.38		Total interest-earning assets	15,370,013		208,425		5.39		14,860,043		145,250		3.89
Cash and due from banks	Cash and due from banks	189,668						206,882						Cash and due from banks	180,708						191,358
Intangible assets	Intangible assets	1,013,811						968,441						Intangible assets	1,012,460						967,154

Other assets	Other assets	690,885						610,768						Other assets	672,232						626,926
Total assets	Total assets	$	17,337,924					$	16,631,290					Total assets	$	17,235,413					$	16,645,481
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)	$	6,114,067	$	29,185	1.91	%	$	6,571,905	$	3,598	0.22	%	Interest-bearing demand(2)	$	6,520,145	$	41,464	2.52	%	$	6,462,940	$	6,061	0.37	%
Savings deposits	Savings deposits	1,004,096		813		0.32		1,137,607		147		0.05		Savings deposits	942,619		793		0.33		1,134,665		155		0.05
Brokered deposits	Brokered deposits	810,087		10,090		5.00		—		—		—		Brokered deposits	947,970		12,490		5.23		—		—		—
Time deposits	Time deposits	1,735,093		11,303		2.61		1,303,735		1,273		0.39		Time deposits	2,001,923		16,159		3.20		1,240,439		1,025		0.33
Total interest-bearing deposits	Total interest-bearing deposits	9,663,343		51,391		2.13		9,013,247		5,018		0.22		Total interest-bearing deposits	10,412,657		70,906		2.70		8,838,044		7,241		0.33
Borrowed funds	Borrowed funds	1,204,968		15,559		5.18		543,728		4,887		3.60		Borrowed funds	545,105		7,388		5.40		572,376		5,574		3.88
Total interest-bearing liabilities	Total interest-bearing liabilities	10,868,311		66,950		2.47		9,556,975		9,905		0.42		Total interest-bearing liabilities	10,957,762		78,294		2.84		9,410,420		12,815		0.54
Noninterest-bearing deposits	Noninterest-bearing deposits	4,039,087						4,714,161						Noninterest-bearing deposits	3,800,160						4,867,314
Other liabilities	Other liabilities	212,818						182,617						Other liabilities	245,886						194,339
Shareholders’ equity	Shareholders’ equity	2,217,708						2,177,537						Shareholders’ equity	2,231,605						2,173,408
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	17,337,924					$	16,631,290					Total liabilities and shareholders’ equity	$	17,235,413					$	16,645,481
Net interest income/net interest margin	Net interest income/net interest margin			$	133,085	3.45	%			$	115,321	3.11	%	Net interest income/net interest margin			$	130,131	3.36	%			$	132,435	3.54	%

(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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		Six Months Ended June 30,													Nine Months Ended September 30,
		2023						2022							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	$	11,783,585	$	339,519	5.81	%	$	10,293,949	$	204,613	4.00	%	Loans held for investment	$	11,866,662	$	523,040	5.89	%	$	10,474,305	$	329,227	4.20	%
Loans held for sale	Loans held for sale	148,221		4,727		6.38		278,722		5,449		3.91		Loans held for sale	175,100		8,478		6.46		233,266		7,524		4.30
Securities:	Securities:													Securities:
Taxable	Taxable	2,511,373		25,143		2.00		2,592,645		19,137		1.48		Taxable	2,356,962		34,361		1.94		2,653,735		31,576		1.59
Tax-exempt(1)	Tax-exempt(1)	428,754		5,037		2.35		445,154		5,354		2.41		Tax-exempt(1)	395,394		6,844		2.31		446,762		8,018		2.39
Interest-bearing balances with banks	Interest-bearing balances with banks	494,434		12,408		5.06		1,233,241		2,618		0.43		Interest-bearing balances with banks	573,498		22,536		5.25		1,041,145		6,076		0.78
Total interest-earning assets	Total interest-earning assets	15,366,367		386,834		5.07		14,843,711		237,171		3.21		Total interest-earning assets	15,367,616		595,259		5.18		14,849,213		382,421		3.44
Cash and due from banks	Cash and due from banks	193,703						206,559						Cash and due from banks	189,324						201,436
Intangible assets	Intangible assets	1,012,690						966,956						Intangible assets	1,012,613						967,023

Other assets	Other assets	675,648						647,254						Other assets	674,476						640,403
Total assets	Total assets	$	17,248,408					$	16,664,480					Total assets	$	17,244,029					$	16,658,075
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)	$	6,090,549	$	49,483	1.64	%	$	6,603,986	$	7,245	0.22	%	Interest-bearing demand(2)	$	6,235,322	$	90,947	1.95	%	$	6,556,454	$	13,306	0.27	%
Savings deposits	Savings deposits	1,028,315		1,639		0.32		1,117,724		286		0.05		Savings deposits	999,436		2,432		0.33		1,123,433		441		0.05
Brokered deposits	Brokered deposits	604,158		14,408		4.81		—		—		—		Brokered deposits	720,022		26,898		4.99		—		—		—
Time deposits	Time deposits	1,650,347		18,727		2.29		1,339,022		3,124		0.47		Time deposits	1,768,827		34,886		2.64		1,305,800		4,149		0.42
Total interest-bearing deposits	Total interest-bearing deposits	9,373,369		84,257		1.81		9,060,732		10,655		0.24		Total interest-bearing deposits	9,723,607		155,163		2.13		8,985,687		17,896		0.27
Borrowed funds	Borrowed funds	1,243,049		30,963		5.01		514,940		9,812		3.82		Borrowed funds	1,007,844		38,351		5.08		534,296		15,386		3.84
Total interest-bearing liabilities	Total interest-bearing liabilities	10,616,418		115,220		2.19		9,575,672		20,467		0.43		Total interest-bearing liabilities	10,731,451		193,514		2.41		9,519,983		33,282		0.47
Noninterest-bearing deposits	Noninterest-bearing deposits	4,212,081						4,683,446						Noninterest-bearing deposits	4,073,265						4,745,409
Other liabilities	Other liabilities	217,573						191,938						Other liabilities	227,114						192,744
Shareholders’ equity	Shareholders’ equity	2,202,336						2,213,424						Shareholders’ equity	2,212,199						2,199,939
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	17,248,408					$	16,664,480					Total liabilities and shareholders’ equity	$	17,244,029					$	16,658,075
Net interest income/net interest margin	Net interest income/net interest margin			$	271,614	3.56	%			$	216,704	2.94	%	Net interest income/net interest margin			$	401,745	3.49	%			$	349,139	3.14	%

(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 largest contributing factor to the increase in net interest income for the ~~six~~nine months ended ~~June~~September 30, 2023, as compared to the same period in 2022, was the rising rate environment throughout 2022 and thus far in 2023. The higher interest rates benefited yields on earning assets, which, coupled with steady loan growth, resulted in an increase in interest income year over year. This increase was offset to some degree by an increase in interest expense. The rising interest rates negatively impacted both the cost and mix of our funding sources, and the Company’s decision to increase on-balance sheet liquidity following the bank failures in March 2023 has also resulted in higher cost of funds and interest expense. The Company has continued its efforts to mitigate increases in the cost of funding through 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, such as brokered

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deposits. In the first ~~half~~nine months of 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 significantly increasing its brokered deposits and borrowed funds in the first ~~six~~nine months of 2023 as compared to the same period in 2022 in order to maintain robust on-balance sheet liquidity.

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 ~~six~~three and nine months ended ~~June~~September 30, 2023, as compared to the same period in 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 June 30, 2023 Compared to the Three Months Ended June 30, 2022							Three Months Ended September 30, 2023 Compared to the Three Months Ended September 30, 2022
		Volume		Rate		Net			Volume		Rate		Net
Interest income:	Interest income:							Interest income:
Loans held for investment	Loans held for investment	$	15,853	$	52,084	$	67,937	Loans held for investment	$	14,993	$	43,914	$	58,907
Loans held for sale	Loans held for sale	(438)		842		404		Loans held for sale	1,351		325		1,676
Securities:	Securities:							Securities:
Taxable	Taxable	(1,021)		2,755		1,734		Taxable	(3,336)		115		(3,221)
Tax-exempt	Tax-exempt	(225)		(65)		(290)		Tax-exempt	(670)		(187)		(857)
Interest-bearing balances with banks	Interest-bearing balances with banks	(1,346)		6,370		5,024		Interest-bearing balances with banks	376		6,294		6,670
Total interest-earning assets	Total interest-earning assets	12,823		61,986		74,809		Total interest-earning assets	12,714		50,461		63,175
Interest expense:	Interest expense:							Interest expense:
Interest-bearing demand deposits	Interest-bearing demand deposits	(268)		25,855		25,587		Interest-bearing demand deposits	54		35,349		35,403
Savings deposits	Savings deposits	(19)		685		666		Savings deposits	(31)		669		638
Brokered deposits	Brokered deposits	10,090		—		10,090		Brokered deposits	12,490		—		12,490
Time deposits	Time deposits	552		9,478		10,030		Time deposits	990		14,144		15,134
Borrowed funds	Borrowed funds	7,857		2,815		10,672		Borrowed funds	(281)		2,095		1,814
Total interest-bearing liabilities	Total interest-bearing liabilities	18,212		38,833		57,045		Total interest-bearing liabilities	13,222		52,257		65,479
Change in net interest income	Change in net interest income	$	(5,389)	$	23,153	$	17,764	Change in net interest income	$	(508)	$	(1,796)	$	(2,304)

		Six months ended June 30, 2023 Compared to the Six Months Ended June 30, 2022							Nine months ended September 30, 2023 Compared to the Nine Months Ended September 30, 2022
		Volume		Rate		Net			Volume		Rate		Net
Interest income:	Interest income:							Interest income:
Loans held for investment	Loans held for investment	$	32,902	$	102,004	$	134,906	Loans held for investment	$	48,155	$	145,658	$	193,813
Loans held for sale	Loans held for sale	(3,213)		2,491		(722)		Loans held for sale	(2,182)		3,136		954
Securities:	Securities:							Securities:
Taxable	Taxable	(608)		6,614		6,006		Taxable	(3,783)		6,568		2,785
Tax-exempt	Tax-exempt	(195)		(122)		(317)		Tax-exempt	(898)		(276)		(1,174)
Interest-bearing balances with banks	Interest-bearing balances with banks	(2,458)		12,248		9,790		Interest-bearing balances with banks	(3,866)		20,326		16,460
Total interest-earning assets	Total interest-earning assets	26,428		123,235		149,663		Total interest-earning assets	37,426		175,412		212,838
Interest expense:	Interest expense:							Interest expense:
Interest-bearing demand deposits	Interest-bearing demand deposits	(606)		42,844		42,238		Interest-bearing demand deposits	(684)		78,325		77,641
Savings deposits	Savings deposits	(24)		1,377		1,353		Savings deposits	(53)		2,044		1,991
Brokered deposits	Brokered deposits	14,408		—		14,408		Brokered deposits	26,898		—		26,898
Time deposits	Time deposits	885		14,718		15,603		Time deposits	1,959		28,778		30,737
Borrowed funds	Borrowed funds	17,334		3,817		21,151		Borrowed funds	16,840		6,125		22,965
Total interest-bearing liabilities	Total interest-bearing liabilities	31,997		62,756		94,753		Total interest-bearing liabilities	44,960		115,272		160,232
Change in net interest income	Change in net interest income	$	(5,569)	$	60,479	$	54,910	Change in net interest income	$	(7,534)	$	60,140	$	52,606

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Interest income, on a tax equivalent basis, was ~~$200,035~~$208,425 and ~~$386,834~~$595,259 for the three and ~~six~~nine months ended ~~June~~September 30, 2023, as compared to ~~$125,226~~$145,250 and ~~$237,171~~$382,421 for the same periods in 2022. The increase in interest income, on a tax equivalent basis, for the three and ~~six~~nine months ended ~~June~~September 30, 2023, as compared to the same time periods in 2022 is due primarily to 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:


		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
		June 30,				June 30,					September 30,				September 30,
		2023		2022		2023		2022			2023		2022		2023		2022
Loans held for investment	Loans held for investment	76.91	%	70.57	%	5.93	%	4.12	%	Loans held for investment	78.27	%	72.87	%	6.06	%	4.57	%
Loans held for sale	Loans held for sale	1.25		1.53		6.21		4.55		Loans held for sale	1.48		0.97		6.58		5.77
Securities	Securities	18.45		21.13		2.04		1.67		Securities	15.50		21.69		1.85		1.87
Other	Other	3.39		6.77		5.34		0.78		Other	4.75		4.47		5.51		2.07
Total earning assets	Total earning assets	100.00	%	100.00	%	5.19	%	3.38	%	Total earning assets	100.00	%	100.00	%	5.39	%	3.89	%


		Percentage of Total Average Earning Assets				Yield					Percentage of Total Average Earning Assets				Yield
		Six Months Ended				Six Months Ended					Nine Months Ended				Nine Months Ended
		June 30,				June 30,					September 30,				September 30,
		2023		2022		2023		2022			2023		2022		2023		2022
Loans held for investment	Loans held for investment	76.68	%	69.35	%	5.81	%	4.00	%	Loans held for investment	77.22	%	70.54	%	5.89	%	4.20	%

Loans held for sale	Loans held for sale	0.96		1.88		6.38		3.91		Loans held for sale	1.14		1.57		6.46		4.30
Securities	Securities	19.13		20.47		2.05		1.61		Securities	17.91		20.88		2.00		1.70
Interest-bearing balances with banks	Interest-bearing balances with banks	3.23		8.30		5.06		0.43		Interest-bearing balances with banks	3.73		7.01		5.25		0.78
Total earning assets	Total earning assets	100.00	%	100.00	%	5.07	%	3.21	%	Total earning assets	100.00	%	100.00	%	5.18	%	3.44	%

For the ~~second~~third quarter of 2023, interest income on loans held for investment, on a tax equivalent basis, increased ~~$67,937~~$58,907 to ~~$175,549~~$183,521 from ~~$107,612~~$124,614 for the same period in 2022. For the ~~six~~nine months ended ~~June~~September 30, 2023, interest income on loans held for investment, on a tax equivalent basis, increased ~~$134,906~~$193,813 to ~~$339,519~~$523,040 from ~~$204,613~~$329,227 in the same period in 2022. The Federal Reserve began to raise interest rates in March 2022, which positively impacted the Company’s loan pricing, and the year-to-date average balance of loans held for investment increased ~~$1,489,636~~$1,392,357 from ~~June~~September 2022, thereby resulting in the increase in interest income on loans held for investment for the three and ~~six~~nine months ended ~~June~~September 30, 2023, as compared to the same periods in 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.


		Three Months Ended						Six Months Ended							Three Months Ended						Nine Months Ended
		June 30,						June 30,							September 30,						September 30,
		2023			2022			2023			2022				2023			2022			2023			2022
Net interest income collected on problem loans	Net interest income collected on problem loans	$	364		$	2,276		$	756		$	2,710		Net interest income collected on problem loans	$	(820)		$	78		$	(64)		$	2,788
Accretable yield recognized on purchased loans(1)	Accretable yield recognized on purchased loans(1)	874			2,021			1,759			3,256			Accretable yield recognized on purchased loans(1)	1,290			1,317			3,049			4,573
Total impact to interest income on loans	Total impact to interest income on loans	$	1,238		$	4,297		$	2,515		$	5,966		Total impact to interest income on loans	$	470		$	1,395		$	2,985		$	7,361

Impact to loan yield	Impact to loan yield	0.04		%	0.16		%	0.04		%	0.12		%	Impact to loan yield	0.02		%	0.05		%	0.03		%	0.09		%

Impact to net interest margin	Impact to net interest margin	0.03		%	0.12		%	0.03		%	0.08		%	Impact to net interest margin	0.01		%	0.04		%	0.02		%	0.07		%

(1)Includes additional interest income recognized in connection with the acceleration of paydowns and payoffs from purchased loans of ~~$289~~$821 and ~~$1,183~~$713 for the ~~second~~third quarter of 2023 and 2022, respectively. The impact was ~~$550~~$1,371 and $2,269

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~~$1,556~~ for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively. This additional interest income increased total loan yield by ~~one basis point and five~~three basis points for both the ~~second~~third quarter of 2023 and 2022, ~~respectively,~~ while increasing net interest margin by ~~one and three~~two basis points for the same respective periods. For the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, the additional interest income increased total loan yields by ~~one~~two and three basis points, respectively, while increasing net interest margin by one and two basis points, respectively.

For the ~~second~~third quarter of 2023, interest income on loans held for sale (consisting of mortgage loans held for sale) increased ~~$404~~$1,676 to ~~$2,990~~$3,751 from ~~$2,586~~$2,075 for the same period in 2022. For the ~~six~~nine months ended ~~June~~September 30, 2023, interest income on loans held for sale (consisting of mortgage loans held for sale), ~~decreased $722~~increased $954 to ~~$4,727~~$8,478 from ~~$5,449~~$7,524 for the same period in 2022.

Investment income, on a tax equivalent basis, ~~increased $1,444~~decreased $4,078 to ~~$14,518~~$11,025 for the ~~second~~third quarter of 2023 from ~~$13,074~~$15,103 for the ~~second~~third quarter of 2022. Investment income, on a tax equivalent basis, increased ~~$5,689~~$1,611 to ~~$30,180~~$41,205 for the ~~six~~nine months ended ~~June~~September 30, 2023 from ~~$24,491~~$39,594 for the same period in 2022. The tax equivalent yield on the investment portfolio for the ~~second~~third quarter of 2023 was ~~2.04%~~1.85%, ~~up 37~~down 2 basis points from ~~1.67%~~1.87% for the same period in 2022. The tax equivalent yield on the investment portfolio for the ~~six~~nine months ended ~~June~~September 30, 2023 was ~~2.05%~~2.00%, up 4430 basis points from ~~1.61%~~1.70% in the same period in 2022. The decrease in taxable equivalent yield on securities for the three months ended September 30, 2023 as compared to the same period in 2022 was due to the aforementioned sale of securities during the first nine months of 2023. The increase in taxable equivalent yield on securities for the ~~three and six~~nine months ended ~~June~~September 30, 2023 as compared to the same ~~periods~~period in 2022 was due to purchases of higher yielding securities during 2022. The increase in yield led to the growth in investment income, on a tax equivalent basis. ~~The aforementioned sale of securities during the first six months of 2023 had a nominal impact to investment income for the three and six months ended June 30, 2023.~~

Interest expense was ~~$66,950~~$78,294 for the ~~second~~third quarter of 2023 as compared to ~~$9,905~~$12,815 for the same period in 2022. Interest expense for the ~~six~~nine months ended ~~June~~September 30, 2023 was ~~$115,220~~$193,514 as compared to ~~$20,467~~$33,282 for the same period in 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
		June 30,				June 30,					September 30,				September 30,
		2023		2022		2023		2022			2023		2022		2023		2022
Noninterest-bearing demand	Noninterest-bearing demand	27.10	%	33.03	%	—	%	—	%	Noninterest-bearing demand	25.75	%	34.09	%	—	%	—	%
Interest-bearing demand	Interest-bearing demand	41.01		46.05		1.91		0.22		Interest-bearing demand	44.18		45.27		2.52		0.37
Savings	Savings	6.74		7.97		0.32		0.05		Savings	6.39		7.95		0.33		0.05
Brokered deposits	Brokered deposits	5.43		—		5.00		—		Brokered deposits	6.42		—		5.23		—
Time deposits	Time deposits	11.64		9.14		2.61		0.39		Time deposits	13.57		8.69		3.20		0.33
Short term borrowings	Short term borrowings	5.19		0.78		4.62		0.69		Short term borrowings	0.78		0.99		1.24		1.30
Long-term Federal Home Loan Bank advances		—		—		—		1.88

Subordinated notes	Subordinated notes	2.14		2.25		5.57		4.36		Subordinated notes	2.15		2.23		5.91		4.55
Other borrowed funds	Other borrowed funds	0.75		0.78		7.86		4.33		Other borrowed funds	0.76		0.78		8.25		5.24
Total deposits and borrowed funds	Total deposits and borrowed funds	100.00	%	100.00	%	1.80	%	0.28	%	Total deposits and borrowed funds	100.00	%	100.00	%	2.11	%	0.36	%

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		Percentage of Total Average Deposits and Borrowed Funds				Cost of Funds					Percentage of Total Average Deposits and Borrowed Funds				Cost of Funds
		Six Months Ended				Six Months Ended					Nine Months Ended				Nine Months Ended
		June 30,				June 30,					September 30,				September 30,
		2023		2022		2023		2022			2023		2022		2023		2022
Noninterest-bearing demand	Noninterest-bearing demand	28.41	%	32.85	%	—	%	—	%	Noninterest-bearing demand	27.51	%	33.27	%	—	%	—	%
Interest-bearing demand	Interest-bearing demand	41.07		46.31		1.64		0.22		Interest-bearing demand	42.12		45.96		1.95		0.27
Savings	Savings	6.94		7.84		0.32		0.05		Savings	6.75		7.88		0.33		0.05
Brokered deposits	Brokered deposits	4.07		—		4.81		—		Brokered deposits	4.86		—		4.99		—
Time deposits	Time deposits	11.13		9.39		2.29		0.47		Time deposits	11.95		9.15		2.64		0.42
Short-term borrowings	Short-term borrowings	5.48		0.49		4.46		0.65		Short-term borrowings	3.90		0.66		4.24		0.98
Long-term Federal Home Loan Bank advances	Long-term Federal Home Loan Bank advances	—		—		—		1.87		Long-term Federal Home Loan Bank advances	—		—		—		1.88
Subordinated notes	Subordinated notes	2.14		2.34		5.45		4.31		Subordinated notes	2.15		2.30		5.61		4.39
Other long term borrowings	Other long term borrowings	0.76		0.78		7.77		4.37		Other long term borrowings	0.76		0.78		7.93		4.66
Total deposits and borrowed funds	Total deposits and borrowed funds	100.00	%	100.00	%	1.57	%	0.29	%	Total deposits and borrowed funds	100.00	%	100.00	%	1.75	%	0.31	%

Interest expense on deposits was ~~$51,391~~$70,906 and ~~$5,018~~$7,241 for the three months ended ~~June~~September 30, 2023 and 2022, respectively. The cost of total deposits was ~~1.50%~~1.98% and ~~0.15%~~0.21% for the same respective periods. Interest expense on deposits was ~~$84,257~~$155,163 and ~~$10,655~~$17,896 for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively, and the cost of total deposits was ~~1.25%~~1.50% and ~~0.16%~~0.17% for the same respective periods. The increase in both deposit expense and cost is attributable to the Company’s efforts to offer competitive deposit rates in the rising interest rate 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 Company has continued its efforts to maintain non-interest bearing deposits. Low cost deposits continue to be the preferred choice of funding; however, the Company may rely on brokered deposits or wholesale borrowings when advantageous or otherwise deemed advisable due to market conditions.

Interest expense on total borrowings was ~~$15,559~~$7,388 and ~~$4,887~~$5,574 for the three months ended ~~June~~September 30, 2023 and 2022, respectively. Interest expense on total borrowings was ~~$30,963~~$38,351 and ~~$9,812~~$15,386 for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively. The increase in interest expense is a result of higher average borrowings and interest rates primarily due to an increase in short-term FHLB borrowings during the first ~~half~~nine months of 2023. The repayment of FHLB borrowings during the second ~~quarter~~and third quarters of 2023 had a nominal impact to interest expense for the three and ~~six~~nine months ended ~~June~~September 30, 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	Noninterest Income to Average Assets				Noninterest Income to Average Assets
Three Months Ended June 30,			Six Months Ended June 30,
Three Months Ended September 30,					Three Months Ended September 30,		Nine Months Ended September 30,
2023	2023	2022	2023	2022	2023	2022	2023	2022
0.40%		0.90%	0.64%	0.90%
0.88%					0.88%	0.98%	0.72%	0.93%

Total noninterest income includes fees generated from deposit services and other fees and commissions, income from our insurance, wealth management and mortgage banking operations, realized gains and losses on the sale 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 ~~$17,226~~$38,200 for the ~~second~~third quarter of 2023 as compared to ~~$37,214~~$41,186 for the same period in 2022. Noninterest income was ~~$54,519~~$92,719 for the ~~six~~nine months ended ~~June~~September 30, 2023 as compared to ~~$74,672~~$115,858 for the same period in 2022. The decrease over the three and ~~six~~nine month periods is primarily due to the decrease in mortgage banking income during the three and nine month periods and, with respect to the nine month period, the $22,438 loss on the sale of securities during June 2023.

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 ~~$9,733~~$9,743 and ~~$9,734~~$10,216 for the ~~second~~third quarter of 2023 and 2022, respectively, and ~~$18,853~~$28,596 and ~~$19,296~~$29,512 for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively. Overdraft fees, the largest component of service charges on deposits, were ~~$5,088~~$5,065 for the three months ended ~~June~~September 30, 2023, as compared to ~~$5,249~~ $5,540

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for the same period in 2022. These fees were ~~$9,669~~$14,734 for the ~~six~~nine months ended ~~June~~September 30, 2023 compared to ~~$10,428~~$15,967 for the same period in 2022. The Company eliminated consumer non-sufficient funds fees as well as transfer fees to linked customer accounts effective January

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1, 2023. The fees eliminated totaled approximately ~~$1,300~~$1,500 for the ~~second~~third quarter of 2022 and ~~$2,600~~$4,100 for the first ~~six~~nine months of 2022.

Fees and commissions were ~~$4,987~~$4,108 during the ~~second~~third quarter of 2023 as compared to ~~$4,668~~$4,148 for the same period in 2022, and were ~~$9,663~~$13,771 for the first ~~six~~nine months of 2023 as compared to ~~$8,650~~$12,798 for the same period in 2022. Fees and commissions include fees related to deposit services, such as ATM fees and interchange fees on debit card transactions, and lending services, such as collateral management fees and unused commitment fees. For the ~~second~~third quarter of 2023, interchange fees were ~~$2,467~~$2,337 as compared to ~~$2,646~~$2,341 for the same period in 2022. Interchange fees were ~~$4,793~~$7,130 for the ~~six~~nine months ended ~~June~~September 30, 2023 as compared to ~~$5,078~~$7,419 for the same period in 2022.

Through Renasant Insurance, we offer a range of commercial and personal insurance products through major insurance carriers. Income earned on insurance products was ~~$2,809~~$3,264 and ~~$2,591~~$3,108 for the three months ended ~~June~~September 30, 2023 and 2022, respectively, and was ~~$5,255~~$8,519 and ~~$5,145~~$8,253 for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively. 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 ~~$46~~$7 and ~~$15~~$10 for the three months ended ~~June~~September 30, 2023 and 2022, respectively, and ~~$956~~$963 and ~~$549~~$559 for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively.

Our Wealth Management segment has two divisions: Trust and Financial Services. The Trust division operates on a custodial basis, which includes administration of benefit plans, as well as accounting and money management for trust accounts. The division manages a number of trust accounts inclusive of personal and corporate benefit accounts, IRAs, and custodial accounts. Fees for managing these accounts are based on changes in market values of the assets under management in the account, with the amount of the fee depending on the type of account. The Financial Services division provides specialized products and services to our customers, which include fixed and variable annuities, mutual funds, and stocks offered through a third party provider. Wealth Management revenue was ~~$5,338~~$5,986 for the ~~second~~third quarter of 2023 compared to ~~$5,711~~$5,467 for the same period in 2022, and was ~~$10,478~~$16,464 for the ~~six~~nine months ended ~~June~~September 30, 2023 compared to ~~$11,635~~$17,102 for the same period in 2022. The market value of assets under management or administration was ~~$5,135,465~~$4,999,504 and ~~$5,084,867~~$4,842,723 at ~~June~~September 30, 2023 and ~~June~~September 30, 2022, 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. Interest rate lock commitments and originations of mortgage loans to be sold totaled ~~$610,611~~$494,442 and ~~$400,975,~~$397,355, respectively, in the ~~second~~third quarter of 2023 compared to ~~$866,048~~$636,987 and ~~$481,568,~~$359,444, respectively for the same period in 2022. Interest rate lock commitments and originations of mortgage loans to be sold totaled ~~$1,240,443~~$1,734,035 and ~~$659,921~~$1,057,277 in the ~~six~~nine months ended ~~June~~September 30, 2023 compared to ~~$2,040,194~~$2,677,181 and ~~$1,076,613~~$1,436,158 for the same period in 2022. The decrease in both interest rate lock commitments and, for the nine month comparative period, mortgage loan originations was due to material increases in mortgage interest rates from historically low rates, significantly dampening demand for mortgages nationwide. In the third quarter of 2022, the Company sold a portion of its mortgage servicing rights portfolio with a carrying value of $15,565 for a pre-tax gain of $2,960. The table below presents the components of mortgage banking income included in noninterest income for the periods presented.


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022			2023		2022		2023		2022
Gain on sales of loans, net (1)	Gain on sales of loans, net (1)	$	4,646	$	3,490	$	9,416	$	9,537	Gain on sales of loans, net (1)	$	3,297	$	5,263	$	12,713	$	14,800
Fees, net	Fees, net	2,859		3,064		4,665		6,117		Fees, net	2,376		2,405		7,041		8,522
Mortgage servicing income, net	Mortgage servicing income, net	2,266		1,762		4,207		2,295		Mortgage servicing income, net	1,860		5,007		6,067		7,302

Mortgage banking income, net	Mortgage banking income, net	$	9,771	$	8,316	$	18,288	$	17,949	Mortgage banking income, net	$	7,533	$	12,675	$	25,821	$	30,624

(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 ~~$2,402~~$2,469 for the three months ended ~~June~~September 30, 2023 as compared to ~~$2,331~~$2,296 for the same period in 2022, and ~~$5,405~~$7,874 for the ~~six~~nine months ended ~~June~~September 30, 2023 as compared to ~~$4,484~~$6,780 for the same period in 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 ~~half~~nine months of 2023.

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Other noninterest income was ~~$4,624~~$5,097 and ~~$3,863~~$3,276 for the three months ended ~~June~~September 30, 2023 and 2022, respectively, and was ~~$9,015~~$14,112 and ~~$7,513~~$10,789 for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively. Other noninterest income includes income

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from our SBA banking division, our capital markets division and other miscellaneous income and can fluctuate based on production in our SBA banking and capital markets divisions and recognition of other seasonal income items.

Noninterest Expense


Noninterest Expense to Average Assets	Noninterest Expense to Average Assets				Noninterest Expense to Average Assets
Three Months Ended June 30,			Six Months Ended June 30,
Three Months Ended September 30,					Three Months Ended September 30,		Nine Months Ended September 30,
2023	2023	2022	2023	2022	2023	2022	2023	2022
2.53%		2.37%	2.54%	2.33%
2.48%					2.48%	2.42%	2.52%	2.36%

Noninterest expense was ~~$109,165~~$107,669 and ~~$98,194~~$101,574 for the ~~second~~third quarter of 2023 and 2022, respectively, and was ~~$216,873~~$324,542 and ~~$192,299~~$293,873 for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively.

Salaries and employee benefits increased ~~$5,057~~$2,995 to ~~$70,637~~$69,458 for the ~~second~~third quarter of 2023 as compared to ~~$65,580~~$66,463 for the same period in 2022. Salaries and employee benefits increased ~~$12,650~~$15,645 to ~~$140,469~~$209,927 for the ~~six~~nine months ended ~~June~~September 30, 2023 as compared to ~~$127,819~~$194,282 for the same period in 2022. The increase in salaries and employee benefits is primarily due to increases in the minimum wage we pay our employees that were implemented in May 2022 along with annual merit increases implemented in April 2023. The acquisition of RBC added ~~$3,174~~$4,682 to salaries and employee benefits expense in the first ~~half~~nine months of 2023.

Data processing costs were ~~$3,684~~$3,907 in the ~~second~~third quarter of 2023 as compared to ~~$3,590~~$3,526 for the same period in 2022 and were ~~$7,317~~$11,224 for the ~~six~~nine months ended ~~June~~September 30, 2023 as compared to ~~$7,853~~$11,379 for the same period in 2022. 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 ~~second~~third quarter of 2023 was ~~$11,865,~~$11,548, as compared to ~~$11,155~~$11,266 for the same period in 2022. These expenses for the first ~~six~~nine months of 2023 were ~~$23,270,~~$34,818, as compared to ~~$22,431~~$33,697 for the same period in ~~2022~~2022.

For the ~~second~~third quarter of 2023 the Company ~~had expenses~~experienced a net gain of ~~$51~~$120 related to other real estate owned as compared to ~~a net gain~~expenses of ~~$187~~$34 for the same period in 2022. ~~These expenses were $81~~The Company experienced a net gain of $39 for the ~~six~~nine months ended ~~June~~September 30, 2023 as compared to a net gain of ~~$428~~$394 for the same period in 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 $8$18 and ~~$51~~$110 for the first ~~six~~nine months of 2023 and 2022, respectively. For the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, other real estate owned with a cost basis of ~~$738~~$2,544 and ~~$967,~~$1,847, respectively, was sold, resulting in a net gain of ~~$89~~$289 and ~~$557,~~$611, 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 ~~$4,012~~$3,338 for the ~~second~~third quarter of 2023 as compared to ~~$2,778~~$3,087 for the same period in 2022, and ~~$7,479~~$10,817 for the ~~six~~nine months ended ~~June~~September 30, 2023 as compared to ~~$5,929~~$9,016 for the same period in 2022.

Advertising and public relations expense was ~~$3,482~~$3,474 for the ~~second~~third quarter of 2023 as compared to ~~$3,406~~$3,229 for the same period in 2022, and ~~$8,168~~$11,642 for the ~~six~~nine months ended ~~June~~September 30, 2023 as compared to ~~$7,465~~$10,694 for the same period in 2022. During the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, the Company contributed approximately $1,292 and $1,350, respectively, to charitable organizations throughout Mississippi, Alabama and 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 ~~$1,369~~$1,311 and ~~$1,310~~$1,251 for the ~~second~~third quarter of 2023 and 2022, respectively, and ~~$2,795~~$4,106 and ~~$2,676~~$3,927 for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively. This amortization relates to finite-lived intangible assets which are being amortized over the useful lives as determined at acquisition. These finite-lived intangible assets have remaining estimated useful lives ranging from approximately 1 year to 8 years.

Communication expenses, those expenses incurred for communication to clients and between employees, were ~~$2,226~~$2,006 for the ~~second~~third quarter of 2023 as compared to ~~$1,904~~$1,999 for the same period in 2022. Communication expenses were ~~$4,206~~$6,212 for the ~~six~~nine months ended ~~June~~September 30, 2023 as compared to ~~$3,931~~$5,930 for the same period in 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 ~~$11,839~~$12,747 and ~~$23,088~~$35,835 for the three and ~~six~~nine months ended ~~June~~September 30, 2023 as compared to ~~$7,471~~$10,719 and ~~$13,204~~$23,923 for the same periods in 2022. The increase in other noninterest expense is primarily attributable to lower deferred loan origination

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expense in the first ~~half~~nine months of 2023 compared to the same period in 2022. The amount of loan origination expense deferred is directly correlated to the volume and mix of our loan production during the period. A negative provision (recovery) for unfunded commitments of

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~~$1,000~~ $700 and ~~$2,500~~$3,200 was recorded for the three and ~~six~~nine months ended ~~June~~September 30, 2023. There was ano provision for unfunded commitments ~~of $450~~recorded for the ~~second~~third quarter of 2022 and a recovery of provision for unfunded commitments of $100 for the ~~six~~nine months ended ~~June~~September 30, 2022.

Efficiency Ratio

Efficiency Ratio
Three Months Ended June 30, Six Months Ended June 30,
2023 2022 2023 2022
Efficiency ratio 72.63 % 64.37 % 66.50 % 66.00 %


	Efficiency Ratio
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Efficiency ratio	63.96	%	58.50	%	65.64	%	63.20	%

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 loss on the sale of securities reduced the efficiency ratio by ~~9.44% and 6.22%~~2.84 basis points for the ~~three and six~~nine months ended ~~June~~September 30, ~~2023, respectively.~~2023. 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 ~~second~~third quarter of 2023 and 2022 was ~~$6,634~~$10,766 and ~~$10,857,~~$13,563, respectively, and ~~$17,956~~$28,722 and ~~$18,792~~$32,355 for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively. The Company recognized tax credits of approximately $1,292 in the first ~~half~~nine months of 2023 (as mentioned above in the advertising and public relations discussion) as compared to approximately $1,350 in the first ~~half~~nine months of 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.

In compliance with loan policy, the lending staff is given lending limits based on their knowledge and experience. In addition, each lending officer’s prior performance is evaluated for credit quality and compliance as a tool for establishing and enhancing lending limits. Before funds are advanced on consumer and commercial loans below certain dollar thresholds, loans are reviewed and scored using centralized underwriting methodologies. Loan quality, or “risk-rating,” grades are assigned based upon certain factors, which include the scoring of the loans. This information is used to assist management in monitoring credit quality. Loan requests of amounts greater than an officer’s lending limit are reviewed for approval by senior credit officers.

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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

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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 or private sale 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 ~~six~~nine months of 2023 were ~~$8,633,~~$10,566, or ~~0.15%~~0.12% of average loans (annualized), compared to net charge-offs of ~~$3,188,~~$4,763, or 0.06% of average loans (annualized), for the same period in 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 percentage for each loan pool by considering (a) the probability of default, based on the migration of loans from performing (using risk ratings) to default using life-of-loan analysis periods, and (b) the historical severity of loss, based on the aggregate net lifetime losses incurred per loan pool.

The historical loss rates calculated as described above are adjusted, as necessary, for both internal and external qualitative factors where there are differences in the historical loss data of the Company and current or projected future conditions. Internal factors include loss history, changes in credit quality (including movement between risk ratings) and/or credit concentration and 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

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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.

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•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:


		June 30, 2023				December 31, 2022			June 30, 2022				September 30, 2023				December 31, 2022				September 30, 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	$	41,310	14.49	%		$	44,255	14.46	%	$	30,193		14.12	%	Commercial, financial, agricultural	$	44,444	14.96	%		$	44,255	14.46	%	$	30,503	13.63	%
Lease financing	Lease financing	2,480		1.03	%		2,463		0.99	%	1,802			0.96	%	Lease financing	3,355		0.99	%		2,463		0.99	%	2,314		0.93	%
Real estate – construction	Real estate – construction	19,125		11.47	%		19,114		11.49	%	17,290			10.62	%	Real estate – construction	19,656		11.57	%		19,114		11.49	%	18,744		10.94	%
Real estate – 1-4 family mortgage	Real estate – 1-4 family mortgage	46,434		28.07	%		44,727		27.78	%	41,910			28.57	%	Real estate – 1-4 family mortgage	45,799		27.94	%		44,727		27.78	%	43,532		28.17	%
Real estate – commercial mortgage	Real estate – commercial mortgage	75,667		44.03	%		71,798		44.20	%	64,373			44.49	%	Real estate – commercial mortgage	75,233		43.65	%		71,798		44.20	%	69,267		45.17	%
Installment loans to individuals	Installment loans to individuals	9,375		0.91	%		9,733		1.08	%	10,563			1.24	%	Installment loans to individuals	9,286		0.89	%		9,733		1.08	%	9,996		1.16	%
Total	Total	$	194,391	100.00	%		$	192,090	100.00	%	$	166,131		100.00	%	Total	$	197,773	100.00	%		$	192,090	100.00	%	$	174,356	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 ~~$3,000~~$5,315 in the ~~second~~third quarter of 2023 and ~~$10,960~~$16,275 in the first ~~half~~nine months of 2023, as compared to ~~$2,000~~$9,800 in the ~~second~~third quarter of 2022 and ~~$3,500~~$13,300 in the first ~~half~~nine months of 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 first ~~six~~nine months months of 2023 as compared to the same period in 2022 was primarily driven by loan 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						Six Months Ended							Three Months Ended						Nine Months Ended
		June 30,						June 30,							September 30,						September 30,
		2023			2022			2023			2022				2023			2022			2023			2022
Balance at beginning of period	Balance at beginning of period	$	195,292		$	166,468		$	192,090		$	164,171		Balance at beginning of period	$	194,391		$	166,131		$	192,090		$	164,171
Impact of purchased credit deteriorated loans acquired during the period	Impact of purchased credit deteriorated loans acquired during the period	—			—			(26)			1,648			Impact of purchased credit deteriorated loans acquired during the period	—			—			(26)			1,648
Charge-offs	Charge-offs													Charge-offs
Commercial, financial, agricultural	Commercial, financial, agricultural	4,939			2,239			5,468			4,341			Commercial, financial, agricultural	2,252			373			7,720			4,714
Lease financing	Lease financing	—			—			—			7			Lease financing	641			—			641			7

Real estate – construction														Real estate – construction	—			—			57			—
Real estate – 1-4 family mortgage	Real estate – 1-4 family mortgage	212			161			215			324			Real estate – 1-4 family mortgage	130			208			345			532
Real estate – commercial mortgage	Real estate – commercial mortgage	397			708			5,512			714			Real estate – commercial mortgage	—			1,956			5,512			2,670
Installment loans to individuals	Installment loans to individuals	580			850			1,390			1,629			Installment loans to individuals	607			722			1,997			2,351
Total charge-offs	Total charge-offs	6,185			3,958			12,642			7,015			Total charge-offs	3,630			3,259			16,272			10,274
Recoveries	Recoveries													Recoveries
Commercial, financial, agricultural	Commercial, financial, agricultural	1,274			431			1,999			1,567			Commercial, financial, agricultural	690			415			2,689			1,982
Lease financing	Lease financing	6			11			11			23			Lease financing	2			113			13			136

Real estate – construction														Real estate – construction	48			—			48			—
Real estate – 1-4 family mortgage	Real estate – 1-4 family mortgage	170			169			194			347			Real estate – 1-4 family mortgage	181			378			375			725
Real estate – commercial mortgage	Real estate – commercial mortgage	278			192			489			347			Real estate – commercial mortgage	208			50			697			397
Installment loans to individuals	Installment loans to individuals	556			818			1,316			1,543			Installment loans to individuals	568			728			1,884			2,271
Total recoveries	Total recoveries	2,284			1,621			4,009			3,827			Total recoveries	1,697			1,684			5,706			5,511
Net charge-offs	Net charge-offs	3,901			2,337			8,633			3,188			Net charge-offs	1,933			1,575			10,566			4,763
Provision for credit losses on loans	Provision for credit losses on loans	3,000			2,000			10,960			3,500			Provision for credit losses on loans	5,315			9,800			16,275			13,300
Balance at end of period	Balance at end of period	$	194,391		$	166,131		$	194,391		$	166,131		Balance at end of period	$	197,773		$	174,356		$	197,773		$	174,356
Net charge-offs (annualized) to average loans	Net charge-offs (annualized) to average loans	0.13		%	0.09		%	0.15		%	0.06		%	Net charge-offs (annualized) to average loans	0.06		%	0.06		%	0.12		%	0.06		%
Net charge-offs to allowance for credit losses on loans	Net charge-offs to allowance for credit losses on loans	2.01			1.41			4.44			1.92			Net charge-offs to allowance for credit losses on loans	0.98			0.90			5.34			2.73
Allowance for credit losses on loans to:	Allowance for credit losses on loans to:													Allowance for credit losses on loans to:
Total loans	Total loans							1.63			1.57			Total loans							1.63			1.57
Nonperforming loans	Nonperforming loans							211.85			373.21			Nonperforming loans							282.24			312.10
Nonaccrual loans	Nonaccrual loans							350.64			378.46			Nonaccrual loans							284.40			321.23

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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:


		Six Months Ended											Nine Months Ended
		June 30, 2023					June 30, 2022						September 30, 2023					September 30, 2022
		Net Charge-offs (Recoveries)		Average Loans		Annualized Net Charge-offs to Average Loans	Net Charge-offs (Recoveries)		Average Loans		Annualized Net Charge-offs to Average Loans		Net Charge-offs (Recoveries)		Average Loans		Annualized Net Charge-offs to Average Loans	Net Charge-offs (Recoveries)		Average Loans		Annualized Net Charge-offs to Average Loans
Commercial, financial, agricultural	Commercial, financial, agricultural	$	3,469	$	1,734,709	0.40%	$	2,774	$	1,457,164	0.38%	Commercial, financial, agricultural	$	5,031	$	1,740,424	0.39%	$	2,732	$	1,474,633	0.25%
Lease financing	Lease financing	(11)		118,892		(0.02)	(16)		89,479		(0.04)	Lease financing	628		119,564		0.70	(129)		93,838		(0.18)%
Real estate – construction	Real estate – construction	57		1,327,028		0.01	—		1,114,992		—	Real estate – construction	9		1,336,385		—	—		1,124,713		—%
Real estate – 1-4 family mortgage	Real estate – 1-4 family mortgage	21		3,362,300		—	(23)		2,894,206		—	Real estate – 1-4 family mortgage	(30)		3,373,754		—	(193)		2,976,081		(0.01)%
Real estate – commercial mortgage	Real estate – commercial mortgage	5,023		5,125,192		0.20	367		4,601,353		0.02	Real estate – commercial mortgage	4,815		5,183,733		0.12	2,273		4,670,508		0.07%
Installment loans to individuals	Installment loans to individuals	74		115,464		0.13	86		136,755		0.13	Installment loans to individuals	113		112,802		0.13	80		134,532		0.08%
Total	Total	$	8,633	$	11,783,585	0.15%	$	3,188	$	10,293,949	0.06%	Total	$	10,566	$	11,866,662	0.12%	$	4,763	$	10,474,305	0.06%

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				Six Months Ended					Three Months Ended				Nine Months Ended
		June 30,				June 30,					September 30,				September 30,
		2023		2022		2023		2022			2023		2022		2023		2022
Real estate – construction:	Real estate – construction:									Real estate – construction:
Residential	Residential	$	57	$	—	$	57	$	—	Residential	$	(48)	$	—	$	9	$	—

Total real estate – construction	Total real estate – construction	57		—		57		—		Total real estate – construction	(48)		—		9		—
Real estate – 1-4 family mortgage:	Real estate – 1-4 family mortgage:									Real estate – 1-4 family mortgage:
Primary	Primary	(55)		95		(65)		157		Primary	(91)		(59)		(156)		98
Home equity	Home equity	102		(70)		99		(48)		Home equity	(20)		(44)		79		(92)
Rental/investment	Rental/investment	1		(19)		(1)		(21)		Rental/investment	66		(19)		65		(40)
Land development	Land development	(6)		(14)		(12)		(111)		Land development	(6)		(48)		(18)		(159)
Total real estate – 1-4 family mortgage	Total real estate – 1-4 family mortgage	42		(8)		21		(23)		Total real estate – 1-4 family mortgage	(51)		(170)		(30)		(193)
Real estate – commercial mortgage:	Real estate – commercial mortgage:									Real estate – commercial mortgage:
Owner-occupied	Owner-occupied	396		675		318		526		Owner-occupied	(205)		(36)		113		490
Non-owner occupied	Non-owner occupied	(277)		(2)		4,705		(2)		Non-owner occupied	(3)		1,951		4,702		1,949
Land development	Land development	—		(157)		—		(157)		Land development	—		(9)		—		(166)
Total real estate – commercial mortgage	Total real estate – commercial mortgage	119		516		5,023		367		Total real estate – commercial mortgage	(208)		1,906		4,815		2,273
Total net charge-offs (recoveries) of loans secured by real estate	Total net charge-offs (recoveries) of loans secured by real estate	$	218	$	508	$	5,101	$	344	Total net charge-offs (recoveries) of loans secured by real estate	$	(307)	$	1,736	$	4,794	$	2,080

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 below.

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Three Months Ended June 30,		2023		2022
Allowance for credit losses on unfunded loan commitments:
Beginning balance		$	18,618	$	19,485

(Recovery of) provision for credit losses on unfunded loan commitments (included in other noninterest expense)		(1,000)		450
Ending balance		$	17,618	$	19,935

Six Months Ended June 30,		2023		2022
Three Months Ended September 30,						Three Months Ended September 30,	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	$	20,118	$	20,035	Beginning balance	$	17,618	$	19,935

Recovery of provision for credit losses on unfunded loan commitments (included in other noninterest expense)	Recovery of provision for credit losses on unfunded loan commitments (included in other noninterest expense)	(2,500)		(100)		Recovery of provision for credit losses on unfunded loan commitments (included in other noninterest expense)	(700)		—
Ending balance	Ending balance	$	17,618	$	19,935	Ending balance	$	16,918	$	19,935

Nine Months Ended September 30,						Nine Months Ended September 30,	2023		2022
Allowance for credit losses on unfunded loan commitments:						Allowance for credit losses on unfunded loan commitments:
Beginning balance						Beginning balance	$	20,118	$	20,035

Recovery of provision for credit losses on unfunded loan commitments (included in other noninterest expense)						Recovery of provision for credit losses on unfunded loan commitments (included in other noninterest expense)	(3,200)		(100)
Ending balance						Ending balance	$	16,918	$	19,935

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.~~collection, but loans may also be placed on nonaccrual status at an earlier date if collection of principal or interest is considered doubtful. 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 table provides details of the Company’s nonperforming assets as of the dates presented.


		June 30, 2023			December 31, 2022				September 30, 2023			December 31, 2022
Nonaccruing loans	Nonaccruing loans	$	55,439		$	56,545		Nonaccruing loans	$	69,541		$	56,545
Accruing loans past due 90 days or more	Accruing loans past due 90 days or more	36,321			331			Accruing loans past due 90 days or more	532			331
Total nonperforming loans	Total nonperforming loans	91,760			56,876			Total nonperforming loans	70,073			56,876
Other real estate owned	Other real estate owned	5,120			1,763			Other real estate owned	9,258			1,763

Total nonperforming assets	Total nonperforming assets	$	96,880		$	58,639		Total nonperforming assets	$	79,331		$	58,639
Nonperforming loans to total loans	Nonperforming loans to total loans	0.77		%	0.49		%	Nonperforming loans to total loans	0.58		%	0.49		%
Nonaccruing loans to total loans	Nonaccruing loans to total loans	0.46		%	0.49		%	Nonaccruing loans to total loans	0.57		%	0.49		%
Nonperforming assets to total assets	Nonperforming assets to total assets	0.56		%	0.35		%	Nonperforming assets to total assets	0.46		%	0.35		%

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

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		June 30, 2023		December 31, 2022		June 30, 2022			September 30, 2023		December 31, 2022		September 30, 2022
Commercial, financial, agricultural	Commercial, financial, agricultural	$	7,698	$	12,543	$	6,199	Commercial, financial, agricultural	$	7,745	$	12,543	$	5,299
Lease financing	Lease financing	—		—		—		Lease financing	1,048		—		—
Real estate – construction:	Real estate – construction:							Real estate – construction:
Residential	Residential	—		77		—		Residential	—		77		232
Commercial	Commercial	—		—		—		Commercial	—		—		1
Total real estate – construction	Total real estate – construction	—		77		—		Total real estate – construction	—		77		233
Real estate – 1-4 family mortgage:	Real estate – 1-4 family mortgage:							Real estate – 1-4 family mortgage:
Primary	Primary	36,467		30,076		22,440		Primary	42,072		30,076		25,130
Home equity	Home equity	2,299		1,909		2,082		Home equity	2,598		1,909		1,842
Rental/investment	Rental/investment	3,086		1,014		1,034		Rental/investment	2,647		1,014		1,240
Land development	Land development	19		82		598		Land development	169		82		1,448
Total real estate – 1-4 family mortgage	Total real estate – 1-4 family mortgage	41,871		33,081		26,154		Total real estate – 1-4 family mortgage	47,486		33,081		29,660
Real estate – commercial mortgage:	Real estate – commercial mortgage:							Real estate – commercial mortgage:
Owner-occupied	Owner-occupied	24,022		5,499		5,991		Owner-occupied	3,370		5,499		8,554
Non-owner occupied	Non-owner occupied	17,842		5,342		5,630		Non-owner occupied	9,920		5,342		11,725
Land development	Land development	54		71		186		Land development	247		71		93
Total real estate – commercial mortgage	Total real estate – commercial mortgage	41,918		10,912		11,807		Total real estate – commercial mortgage	13,537		10,912		20,372
Installment loans to individuals	Installment loans to individuals	273		263		354		Installment loans to individuals	257		263		301

Total nonperforming loans	Total nonperforming loans	$	91,760	$	56,876	$	44,514	Total nonperforming loans	$	70,073	$	56,876	$	55,865

Total nonperforming loans as a percentage of total loans were ~~0.77%~~0.58% as of ~~June~~September 30, 2023 as compared to 0.49% and ~~0.42%~~0.50% as of December 31, 2022 and ~~June~~September 30, 2022, respectively. ~~The increase in nonperforming loans is primarily due to two relationships, both of which are well collateralized 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 ~~211.85%~~282.24% as of ~~June~~September 30, 2023 as compared to 337.73% as of December 31, 2022 and ~~373.21%~~312.10% as of ~~June~~September 30, 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 ~~June~~September 30, 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 ~~$12,146,~~$13,641, or ~~0.10%~~0.11% of total loans, at ~~June~~September 30, 2023 as compared to $58,703, or 0.51% of total loans, at December 31, 2022 and ~~$16,910,~~$26,103, or ~~0.16%~~0.25% of total loans, at ~~June~~September 30, 2022.

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. At ~~June~~September 30, 2023, these loan modifications were performing in accordance with their modified terms and unused commitments totaled ~~$1,600.~~$721. Upon the Company’s determination that a modified loan has been subsequently deemed uncollectible, the loan, or portion of the loan, is charged off, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted accordingly. See Note 4, “Allowance for Credit Losses,” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements for more information on the allowance for credit losses.

The following table presents the amortized cost basis of loans that were both experiencing financial difficulty and modified during the ~~three months and six~~nine months ended ~~June~~September 30, 2023, which are required to be disclosed under ASU 2022-02, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of loans is also presented below.

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		Three Months Ended										Six Months Ended											Nine Months Ended
		Interest Rate Reduction		Term Extension		Payment Delay		Total		% Total Loans by Class		Interest Rate Reduction		Term Extension		Payment Delay		Total		% Total Loans by Class				Interest Rate Reduction		Term Extension		Payment Delay		Total		% Total Loans by Class
Commercial, financial, agricultural	Commercial, financial, agricultural	$	—	$	1,210	$	—	$	1,210	0.07	%	$	—	$	1,210	$	—	$	1,210	0.07	%	Commercial, financial, agricultural		$	—	$	1,209	$	—	$	1,209	0.07	%

Real estate – construction:	Real estate – construction:																					Real estate – construction:
Residential	Residential	—		4,366		—		4,366		1.42		—		4,366		—		4,366		1.42		Residential		—		3,751		—		3,751		1.25

Total real estate – construction	Total real estate – construction	—		4,366		—		4,366		0.32		—		4,366		—		4,366		0.32		Total real estate – construction		—		3,751		—		3,751		0.27
Real estate – 1-4 family mortgage:	Real estate – 1-4 family mortgage:																					Real estate – 1-4 family mortgage:

Home equity	Home equity	9		—		—		9		—		9		—		—		9		—		Home equity		7		—		—		7		—

Total real estate – 1-4 family mortgage	Total real estate – 1-4 family mortgage	9		—		—		9		—		9		—		—		9		—		Total real estate – 1-4 family mortgage		7		—		—		7		—
Real estate – commercial mortgage:	Real estate – commercial mortgage:																					Real estate – commercial mortgage:
Owner-occupied	Owner-occupied	—		—		—		—		—		155		—		—		155		0.01		Owner-occupied		149		96		277		522		0.03
Non-owner occupied	Non-owner occupied	—		—		—		—		—		1,026		—		—		1,026		0.03		Non-owner occupied		1,008		—		—		1,008		0.03
Land development		—		97		277		374		0.33		—		97		277		374		0.33

Total real estate – commercial mortgage	Total real estate – commercial mortgage	—		97		277		374		0.01		1,181		97		277		1,555		0.03		Total real estate – commercial mortgage		1,157		96		277		1,530		0.03

Loans, net of unearned income	Loans, net of unearned income	$	9	$	5,673	$	277	$	5,959	0.05	%	$	1,190	$	5,673	$	277	$	7,140	0.06	%	Loans, net of unearned income		$	1,164	$	5,056	$	277	$	6,497	0.05	%

The following table presents the weighted average financial effect of the loan modifications ~~presented above to borrowers experiencing financial difficulty~~requiring disclosure under ASU 2022-02 by class of financing receivable for the ~~three and six~~nine months ended ~~June~~September 30, 2023.


		Three Months Ended			Six Months Ended				Nine Months Ended
		Interest Rate Reduction (in basis points)	Term Extension (in months)	Payment Delay (in months)	Interest Rate Reduction (in basis points)	Term Extension (in months)	Payment Delay (in months)			Interest Rate Reduction (in basis points)	Term Extension (in months)	Payment Delay (in months)
Commercial, financial, agricultural	Commercial, financial, agricultural	—	2.1	—	—	2.1	—	Commercial, financial, agricultural		—	2.1	—

Real estate – construction:	Real estate – construction:							Real estate – construction:
Residential	Residential	—	4.7	—	—	4.7	—	Residential		—	4.7	—

Real estate – 1-4 family mortgage:	Real estate – 1-4 family mortgage:							Real estate – 1-4 family mortgage:

Home equity	Home equity	300	—	—	300	—	—	Home equity		300	—	—

Real estate – commercial mortgage:	Real estate – commercial mortgage:							Real estate – commercial mortgage:
Owner-occupied	Owner-occupied	—	—	—	68	—	—	Owner-occupied		68	8.4	3.0
Non-owner occupied	Non-owner occupied	—	—	—	12	—	—	Non-owner occupied		12	—	—
Land development		—	8.4	3.0	—	8.4	3.0

Loans, net of unearned income		300	4.2	3.0	21	4.2	3.0

The following table provides details of the Company’s other real estate owned, net of valuation allowance and direct write-downs, as of the dates presented:

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		June 30, 2023		December 31, 2022		June 30, 2022			September 30, 2023		December 31, 2022		September 30, 2022
Residential real estate	Residential real estate	$	459	$	699	$	1,251	Residential real estate	$	1,045	$	699	$	913
Commercial real estate	Commercial real estate	3,481		62		101		Commercial real estate	8,182		62		62
Residential land development	Residential land development	448		246		261		Residential land development	4		246		246
Commercial land development	Commercial land development	732		756		1,194		Commercial land development	27		756		1,191

Total other real estate owned	Total other real estate owned	$	5,120	$	1,763	$	2,807	Total other real estate owned	$	9,258	$	1,763	$	2,412

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

2023 2022
Balance at January 1 $ 1,763 $ 2,540
Transfers of loans 4,119 1,284
Impairments (8) (51)
Dispositions (738) (967)
Other (16) 1
Balance at June 30 $ 5,120 $ 2,807

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	2023		2022
Balance at January 1	$	1,763	$	2,540

Transfers of loans	10,073		1,828

Impairments	(18)		(110)
Dispositions	(2,544)		(1,847)
Other	(16)		1
Balance at September 30	$	9,258	$	2,412

Other real estate owned with a cost basis of ~~$738~~$2,544 was sold during the ~~six~~nine months ended ~~June~~September 30, 2023, resulting in a net gain of ~~$89,~~$289, while other real estate owned with a cost basis of ~~$967~~$1,847 was sold during the ~~six~~nine months ended ~~June~~September 30, 2022, resulting in a net gain of ~~$557.~~$611.

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~~we actively monitor and manage our interest rate risk exposure. We have an Asset/Liability Committee (“ALCO”) ~~that~~, which is comprised of various members of senior management and is authorized by the Board of Directors to monitor interest rate sensitivity and liquidity risk, over the short-, ~~medium,~~medium-, and long-term, and to make decisions relating to 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~~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 ~~July~~October 1, 2023, in each case as compared to the result under rates present in the market on ~~June~~September 30, 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.


	Percentage Change In:
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

+100	2.11%	2.33%	3.56%
-100	(2.96)%	(2.96)%	(4.17)%
-200	(7.32)%	(6.72)%	(9.35)%

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Percentage Change In:
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
+200 4.22% 6.79% 8.62%
+100 2.50% 3.45% 4.34%
-100 (3.67)% (4.29)% (5.22)%
-200 (9.05)% (9.24)% (11.31)%

The rate shock results for the net interest income simulations for the next 24 months produce an asset sensitive position at ~~June~~September 30, 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 described in the table above. As interest rates are adjusted over a period of time, it is our strategy to proactively change the volume and mix of our balance sheet in order to mitigate our interest rate risk. The computation of the prospective effects of hypothetical interest rate changes requires numerous assumptions, including asset prepayment speeds, the impact of competitive factors on our pricing of loans and deposits, the impact of market conditions on the securities yields and interest rates of our 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 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)~~borrowings) and core deposits are not sufficient for meeting our current and anticipated liquidity needs. During the first ~~half~~nine months of 2023, brokered deposits increased by ~~$847,825~~$524,642 as compared to the balance at December 31, 2022. The Bank obtained brokered deposits in the amount of $1,206,856 during the first nine months of 2023 and paid down $682,214. 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 ~~10.43%~~10.40% 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 ~~June~~September 30, 2023, securities with a carrying value of ~~$786,023~~$807,284 were pledged to secure government, public fund and trust deposits and as collateral for short-term borrowings and derivative instruments as compared to securities with a carrying value of $842,601 similarly pledged at December 31, 2022.

Other sources available for meeting liquidity needs include federal funds purchased, ~~and~~ short-term and long-term advances from the ~~FHLB.~~FHLB and borrowings from the Federal Reserve Discount Window. Interest is charged at the prevailing market rate on federal funds purchased and FHLB advances. There were ~~$250,000~~$100,000 in short-term borrowings from the FHLB at ~~June~~September 30, 2023, as compared to $700,000 at December 31, ~~2022.~~2022, as we used the proceeds of our sale of securities in the third quarter to pay down our short-term FHLB advances. 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. There were no outstanding long-term advances with the FHLB at ~~June~~September 30, 2023 or December 31, 2022. The total amount of the remaining credit available to us from the FHLB at ~~June~~September 30, 2023 was ~~$3,484,050.~~$3,111,063. The credit available at the Federal Reserve Discount Window at September 30, 2023 was $585,406, with no borrowings currently outstanding. We also maintain lines of credit with other commercial banks totaling $180,000. These are unsecured lines of credit with the

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majority maturing at various times within the next twelve months. There were no amounts outstanding under these lines of credit at ~~June~~September 30, 2023 or December 31, 2022.

Finally, we can access the capital markets to meet liquidity 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

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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 subordinated notes, net of unamortized debt issuance costs, was ~~$317,120~~$314,655 at ~~June~~September 30, 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
		Six Months Ended				Six Months Ended					Nine Months Ended				Nine Months Ended
		June 30,				June 30,					September 30,				September 30,
		2023		2022		2023		2022			2023		2022		2023		2022
Noninterest-bearing demand	Noninterest-bearing demand	28.41	%	32.85	%	—	%	—	%	Noninterest-bearing demand	27.51	%	33.27	%	—	%	—	%
Interest-bearing demand	Interest-bearing demand	41.07		46.31		1.64		0.22		Interest-bearing demand	42.12		45.96		1.95		0.27
Savings	Savings	6.94		7.84		0.32		0.05		Savings	6.75		7.88		0.33		0.05
Brokered deposits	Brokered deposits	4.07		—		4.81		—		Brokered deposits	4.86		—		4.99		—
Time deposits	Time deposits	11.13		9.39		2.29		0.47		Time deposits	11.95		9.15		2.64		0.42
Short-term borrowings	Short-term borrowings	5.48		0.49		4.46		0.65		Short-term borrowings	3.90		0.66		4.24		0.98
Long-term Federal Home Loan Bank advances	Long-term Federal Home Loan Bank advances	—		—		—		1.87		Long-term Federal Home Loan Bank advances	—		—		—		1.88
Subordinated notes	Subordinated notes	2.14		2.34		5.45		4.31		Subordinated notes	2.15		2.30		5.61		4.39
Other borrowed funds	Other borrowed funds	0.76		0.78		7.77		4.37		Other borrowed funds	0.76		0.78		7.93		4.66
Total deposits and borrowed funds	Total deposits and borrowed funds	100.00	%	100.00	%	1.57	%	0.29	%	Total deposits and borrowed funds	100.00	%	100.00	%	1.75	%	0.31	%

The estimated amount of uninsured and uncollateralized deposits at ~~June~~September 30, 2023 was ~~$3,885,983.~~$4,204,524. Collateralized public funds over the FDIC insurance limits were ~~$1,448,039.~~$1,451,674 at September 30, 2023.

Our strategy in choosing funds is focused on minimizing cost in the context of our balance sheet composition, interest rate risk 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 ~~$946,899~~$741,156 at ~~June~~September 30, 2023, as compared to ~~$1,010,468~~$479,500 at ~~June~~September 30, 2022. Cash provided by investing activities for the ~~six~~nine months ended ~~June~~September 30, 2023 was ~~$274,113,~~$89,172, as compared to cash used in investing activities of ~~$1,087,213~~$1,587,457 for the ~~six~~nine months ended ~~June~~September 30, 2022. Proceeds from the sale, maturity or call of securities within our investment portfolio were ~~$633,934~~$697,076 for the ~~six~~nine months ended ~~June~~September 30, 2023, as compared to ~~$266,656~~$372,484 for the same period in 2022. A portion of the securities portfolio was sold during the second quarter, resulting in proceeds of $488,981 which were used to pay off short-term FHLB borrowings. Other proceeds were primarily used to fund loan growth in 2023, while they were primarily reinvested into the investment portfolio in 2022. ~~There were no purchases~~Purchases of investment securities were $9,646 during the first ~~six~~nine months of 2023, as compared to ~~$701,555~~$800,260 for the same period in 2022.

Cash provided by financing activities for the ~~six~~nine months ended ~~June~~September 30, 2023 was ~~$128,334,~~$27,868, as compared to cash used in financing activities of ~~$129,990~~$274,115 for the same period in 2022. Deposits increased ~~$608,395~~$670,144 and decreased ~~$141,795~~$473,600 for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, 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 ~~June~~September 30, 2023, the maximum amount available for transfer from the Bank to the Company in the form of loans was ~~$183,595.~~$186,960. 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 ~~June~~September 30, 2023.

These restrictions did not have any impact on the Company’s ability to meet its cash obligations in the ~~six~~nine months ended ~~June~~September 30, 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:


		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022
Loan commitments	Loan commitments	$	3,268,716	$	3,577,614	Loan commitments	$	3,138,292	$	3,577,614
Standby letters of credit	Standby letters of credit	117,786		98,357		Standby letters of credit	114,173		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 ~~June~~September 30, 2023, the Company had notional amounts of ~~$510,641~~$404,646 on interest rate contracts with corporate customers and ~~$436,028~~$401,910 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 interest rate swap contracts and interest rate collars on its FHLB borrowings and its junior subordinated debentures that are accounted for as cash flow hedges. Under ~~each of these~~interest rate swap contracts, the Company pays a fixed rate of interest and receives a variable rate of ~~interest. The Company entered into an~~interest, while the collar hedging strategy stabilizes interest rate ~~swap contract on its subordinated notes that is accounted for~~

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asfluctuation by setting both a ~~fair value hedge. Under this contract, the Company pays~~floor and a ~~variable rate of interest and receives a fixed rate of interest. Additionally, the~~cap. 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~~Additionally, the Company entered into an interest rate ~~fluctuation by setting both~~swap contract on its subordinated notes that is accounted for as a ~~floor~~fair value hedge. Under this contract, the Company pays a variable rate of interest and receives a ~~cap.~~fixed rate of interest.

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For more information about the Company’s derivatives, see Note 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 ~~$2,208,628~~$2,233,323 at ~~June~~September 30, 2023 compared to $2,136,016 at December 31, 2022. Book value per share was ~~$39.35~~$39.78 and $38.18 at ~~June~~September 30, 2023 and December 31, 2022, respectively. The growth in shareholders’ equity was attributable to ~~changes~~reductions in accumulated other comprehensive ~~income~~loss and current period earnings, offset by dividends declared.

In October 2022, the Company’s Board of Directors approved a stock repurchase program, authorizing the Company to repurchase up to $100,000 of its outstanding common stock, which expired in October 2023 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 ~~second quarter~~first nine months of 2023.

The Company has junior subordinated debentures with a carrying value of ~~$112,510~~$112,744 at ~~June~~September 30, 2023, of which ~~$108,919~~$109,153 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 ~~June~~September 30, 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 ~~June~~September 30, 2023, of which ~~$336,327~~$336,551 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
June 30, 2023
September 30, 2023														September 30, 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	$	1,415,626	10.30	%	$	893,220	6.50	%	$	961,929	7.00	%	Common equity tier 1 capital ratio	$	1,449,367	10.46	%	$	900,405	6.50	%	$	969,667	7.00	%
Tier 1 risk-based capital ratio	Tier 1 risk-based capital ratio	1,524,545		11.09		1,099,348		8.00		1,168,057		8.50		Tier 1 risk-based capital ratio	1,558,521		11.25		1,108,191		8.00		1,177,453		8.50
Total risk-based capital ratio	Total risk-based capital ratio	2,028,793		14.76		1,374,185		10.00		1,442,894		10.50		Total risk-based capital ratio	2,065,992		14.91		1,385,238		10.00		1,454,500		10.50
Leverage capital ratios:	Leverage capital ratios:													Leverage capital ratios:
Tier 1 leverage ratio	Tier 1 leverage ratio	1,524,545		9.22		826,868		5.00		661,495		4.00		Tier 1 leverage ratio	1,558,521		9.48		821,665		5.00		657,332		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	$	1,668,033	12.06	%	$	899,078	6.50	%	$	968,237	7.00	%	Common equity tier 1 capital ratio	$	1,698,680	12.23	%	$	902,615	6.50	%	$	972,047	7.00	%
Tier 1 risk-based capital ratio	Tier 1 risk-based capital ratio	1,668,033		12.06		1,106,557		8.00		1,175,717		8.50		Tier 1 risk-based capital ratio	1,698,680		12.23		1,110,911		8.00		1,180,343		8.50
Total risk-based capital ratio	Total risk-based capital ratio	1,835,954		13.27		1,383,196		10.00		1,452,356		10.50		Total risk-based capital ratio	1,869,600		13.46		1,388,639		10.00		1,458,071		10.50
Leverage capital ratios:	Leverage capital ratios:													Leverage capital ratios:
Tier 1 leverage ratio	Tier 1 leverage ratio	1,668,033		10.09		826,954		5.00		661,563		4.00		Tier 1 leverage ratio	1,698,680		10.33		821,813		5.00		657,450		4.00

December 31, 2022	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	$	1,372,747	10.21	%	$	874,093	6.50	%	$	941,331	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	1,481,197		11.01		1,075,807		8.00		1,143,045		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	1,968,001		14.63		1,344,758		10.00		1,411,996		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	1,481,197		9.36		790,853		5.00		632,683		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	$	1,630,389	12.10	%	$	876,066	6.50	%	$	943,455	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	1,630,389		12.10		1,078,235		8.00		1,145,624		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	1,781,312		13.22		1,347,794		10.00		1,415,183		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	1,630,389		10.30		791,299		5.00		633,040		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 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, 2022, filed with the Securities and Exchange Commission on February 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, 2022. Since December 31, 2022, there have been no material changes in these critical accounting estimates.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

Item 4. CONTROLS AND PROCEDURES

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, 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.

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 cost of funding, both for deposits and other sources of liquidity, has increased. If the concerns surrounding the banking sector persist, our businesses, financial condition and results of operations could be materially adversely impacted.

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 ~~June~~September 30, 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)(3)
April 1, 2023 to April 30, 2023 253 $ 29.82 — $ 100,000
May 1, 2023 to May 31, 2023 227 26.34 — 100,000
June 1, 2023 to June 30, 2023 358 29.48 — 100,000
Total 838 $ 28.73 —


	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)
July 1, 2023 to July 31, 2023	1,115	$	27.95	—	$	100,000
August 1, 2023 to August 31, 2023	3,107	30.93		—	100,000
September 1, 2023 to September 30, 2023	—	—		—	100,000
Total	4,222	$	30.15	—

(1)All shares in this column represent shares of Renasant Corporation stock withheld to satisfy the federal and state tax liabilities related to the vesting of time-based restricted stock awards.

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

(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 5. OTHER INFORMATION

Trading Plans

During the quarter ended ~~June~~September 30, 2023, no director or officer (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended) adopted or terminated any “Rule 10b5-1 trading arrangements” or “non-Rule 10b5-1 trading arrangements” (each as defined in Item 408(a) of Regulation S-K).

Item 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)

(3)(v)						Articles of Amendment to the Amended and Restated Bylaws of Renasant Corporation (5 )

(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 ~~June~~September 30, 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 ~~June~~September 30, 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.

(5)Filed as exhibit 3(ii) to the Form 8-K of the Company filed with the Commission on October 27, 2023 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:	~~August 4,~~November 8, 2023	/s/ C. Mitchell Waycaster
		C. Mitchell Waycaster
		Chief Executive Officer
		(Principal Executive Officer)

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

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		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	56
	Notes to Consolidated Financial Statements	67

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4344

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	7071

Item 4.	Controls and Procedures	7071

PART II	Other Information


Item 1A.	Risk Factors	7172

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	7172

Item 5.	Other Information	7273

Item 6.	Exhibits	7273

SIGNATURES		7374