23 unchanged sentences
(xiv) changes in demand for loan products and financial services;
−Removed: (xv) concentration of credit exposure;
+Added: (xv) concentrations of credit or deposit exposure;
(xvi) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships;
6 unchanged sentences
Financial Condition
−Removed: The following discussion provides details regarding the changes in significant balance sheet accounts at March 31, 2023 compared to December 31, 2022.
−Removed: Total assets were $17,474,083 at March 31, 2023 compared to $16,988,176 at December 31, 2022.
+Added: The following discussion provides details regarding the changes in significant balance sheet accounts at June 30, 2023 compared to December 31, 2022.
+Added: Total assets were $17,224,342 at June 30, 2023 compared to $16,988,176 at December 31, 2022.
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.
1 unchanged sentence
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:
−Removed: March 31, 2023 December 31, 2022
+Added: June 30, 2023 December 31, 2022
Balance Percentage of
8 unchanged sentences
Securities, net of allowance for credit losses $ 2,223,974 $ 2,857,982
−Removed: The Company did not purchase any securities during the three months ended March 31, 2023.
+Added: The Company did not purchase any securities during the six months ended June 30, 2023.
+Added: During the six months ended June 30, 2022, the Company deployed a portion of excess liquidity into the securities portfolio and purchased $701,555 in investment securities.
+Added: Mortgage-backed securities and collateralized mortgage obligations (“CMOs”), in the aggregate, comprised approximately 60% of these purchases.
+Added: CMOs are included in the “Mortgage-backed securities” line item in the above table.
+Added: The mortgage-backed securities and CMOs held in our investment portfolio are primarily issued by government sponsored entities.
+Added: Obligations of other U.S.
+Added: Government agencies and corporations comprised approximately 21% of purchases made during the first six months of 2022.
+Added: Obligations of state and political subdivisions comprised approximately 6% of purchases made during the first six months of 2022.
+Added: 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% of purchases made during the first six months of 2022.
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.
−Removed: At March 31, 2023, the net unrealized after tax losses remaining to be amortized in accumulated other comprehensive income (loss) was $66,284.
+Added: At June 30, 2023, the net unrealized after tax losses remaining to be amortized in accumulated other comprehensive income (loss) was $64,033.
No gains or losses were recognized at the time of transfer.
−Removed: Proceeds from maturities, calls and principal payments on securities during the first three months of 2023 totaled $70,766.
−Removed: The Company did not sell any securities during the first three months of 2023.
−Removed: Proceeds from the maturities, calls and principal payments on securities during the first three months of 2022 totaled $135,775.
−Removed: The Company did not sell any securities during the first three months of 2022.
+Added: Proceeds from maturities, calls and principal payments on securities during the first six months of 2023 totaled $144,953.
+Added: 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 months ended June 30, 2023.
+Added: Proceeds from the maturities, calls and principal payments on securities during the first six months of 2022 totaled $266,656.
+Added: The Company did not sell any securities during the first six 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
−Removed: Loans held for sale, which consist of residential mortgage loans being held until they are sold in the secondary market, were $159,318 at March 31, 2023, as compared to $110,105 at December 31, 2022.
+Added: Loans held for sale, which consist of residential mortgage loans being held until they are sold in the secondary market, were $249,615 at June 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.
4 unchanged sentences
Gains and losses are realized at the time consideration is received and all other criteria for sales treatment have been met.
−Removed: Our standard practice is to sell the loans within 30-40 days after the loan is funded.
+Added: Our standard practice is to sell the
+Added: 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.
−Removed: Total loans, excluding loans held for sale, were $11,766,425 at March 31, 2023 and $11,578,304 at December 31, 2022.
+Added: Total loans, excluding loans held for sale, were $11,930,516 at June 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:
−Removed: March 31, 2023 December 31, 2022
+Added: June 30, 2023 December 31, 2022
Loans Percentage of Total Loans Total
20 unchanged sentences
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.
−Removed: At March 31, 2023, there were no concentrations of loans exceeding 10% of total loans which are not disclosed as a category of loans separate from the categories listed above.
−Removed: The Company relies on deposits as its major source of funds.
−Removed: Total deposits were $13,912,019 and $13,486,966 at March 31, 2023 and December 31, 2022, respectively.
−Removed: Noninterest-bearing deposits were $4,244,877 and $4,558,756 at March 31, 2023 and December 31, 2022, respectively, while interest-bearing deposits were $9,667,142 and $8,928,210 at March 31, 2023 and December 31, 2022, respectively.
−Removed: Interest-bearing deposits included brokered deposits of $856,946 and $233,133 at March 31, 2023 and December 31, 2022, respectively.
+Added: At June 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.
+Added: The Company relies on deposits as its primary source of funds.
+Added: Total deposits were $14,095,361 and $13,486,966 at June 30, 2023 and December 31, 2022, respectively.
+Added: Noninterest-bearing deposits were $3,878,953 and $4,558,756 at June 30, 2023 and December 31, 2022, respectively, while interest-bearing deposits were $10,216,408 and $8,928,210 at June 30, 2023 and December 31, 2022, respectively.
+Added: Interest-bearing deposits included brokered deposits of $1,080,958 and $233,133 at June 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).
−Removed: Noninterest-bearing deposits represented 30.51% of total deposits at March 31, 2023, as compared to 33.80% of total deposits at December 31, 2022.
−Removed: The decrease in noninterest-bearing deposits reflects both deposit customers transferring noninterest-bearing deposits to interest-bearing deposits such as money market funds offered by financial institutions and other financial services companies, and the impact of our increase in brokered deposits in the first quarter of 2023 as compared to brokered deposits at December 31, 2022.
−Removed: Under certain circumstances, management may elect to acquire non-core deposits (in the form of brokered deposits) or public fund deposits (which are deposits of counties, municipalities or other political subdivisions).
+Added: Noninterest-bearing deposits represented 27.52% of total deposits at June 30, 2023, as compared to 33.80% of total deposits at December 31, 2022.
+Added: 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 deposits in the first six 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.
+Added: Under certain circumstances, management may elect to acquire non-core deposits (in the form of brokered deposits) or public fund
+Added: deposits (which are deposits of counties, municipalities or other political subdivisions).
The source of funds that we select depends on the terms and how those terms assist us in mitigating interest rate risk, maintaining our liquidity position and managing our net interest margin.
2 unchanged sentences
Because public fund deposits are obtained through a bid process, these deposit balances may fluctuate as competitive and market forces change.
−Removed: 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
−Removed: other products and services, make such participation advisable.
+Added: 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.
−Removed: Public fund deposits were $1,882,616 and $1,760,460 at March 31, 2023 and December 31, 2022, respectively, and represented 13.53% and 13.05% of total deposits as of March 31, 2023 and December 31, 2022, respectively.
+Added: Public fund deposits were $1,850,108 and $1,760,460 at June 30, 2023 and December 31, 2022, respectively, and represented 13.13% and 13.05% of total deposits as of June 30, 2023 and December 31, 2022, respectively.
Borrowed Funds
2 unchanged sentences
The following table presents our short-term borrowings by type as of the dates presented:
−Removed: March 31, 2023 December 31, 2022
+Added: June 30, 2023 December 31, 2022
Security repurchase agreements $ 7,305 $ 12,232
3 unchanged sentences
The following table presents our long-term debt by type as of the dates presented:
−Removed: March 31, 2023 December 31, 2022
+Added: June 30, 2023 December 31, 2022
Junior subordinated debentures $ 112,510 $ 112,042
2 unchanged sentences
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.
−Removed: There were no long-term advances from the FHLB outstanding at March 31, 2023 or December 31, 2022.
−Removed: The Company had $2,923,320 of availability on unused lines of credit with the FHLB at March 31, 2023, as compared to $3,651,678 at December 31, 2022.
+Added: There were no long-term advances from the FHLB outstanding at June 30, 2023 or December 31, 2022.
+Added: All advances from the FHLB are collateralized by a blanket lien on the Bank’s loans.
+Added: The Company had $3,484,050 of availability on unused lines of credit with the FHLB at June 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.
4 unchanged sentences
Results of Operations
−Removed: Net income for the first quarter of 2023 was $46,078 compared to net income of $33,547 for the first quarter of 2022.
−Removed: Basic and diluted earnings per share (“EPS”) for the first quarter of 2023 were $0.82 as compared to basic and diluted EPS of $0.60 for the first quarter of 2022.
+Added: Net income for the second quarter of 2023 was $28,643 compared to net income of $39,678 for the second quarter of 2022.
+Added: Basic and diluted earnings per share (“EPS”) for the second quarter of 2023 were $0.51 as compared to basic and diluted EPS of $0.71 for the second quarter of 2022.
+Added: Net income for the six months ended June 30, 2023, was $74,721 compared to net income of $73,225 for the same period in 2022.
+Added: Basic and diluted EPS were $1.33 for the first six months of 2023 as compared to $1.31 and $1.30, respectively, for the first six 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.
1 unchanged sentence
Three Months Ended
−Removed: March 31, 2023 March 31, 2022
+Added: June 30, 2023 June 30, 2022
Pre-tax After-tax Impact to Diluted EPS Pre-tax After-tax Impact to Diluted EPS
+Added: Restructuring charges $ — $ — $ — $ 1,187 $ 932 $ 0.01
+Added: Loss on sale of securities 22,438 18,085 0.32 — — —
+Added: Six Months Ended
+Added: June 30, 2023 June 30, 2022
+Added: Pre-tax After-tax Impact to Diluted EPS Pre-tax After-tax Impact to Diluted EPS
Merger and conversion expenses $ — $ — $ — $ 687 $ 547 $ 0.01
−Removed: Restructuring benefit $ — $ — $ — $ (455) $ (368) $ (0.01)
+Added: Restructuring charges — — — 732 583 0.01
+Added: Loss on sale of securities 22,438 17,870 0.31 — — —
Net Interest Income
−Removed: 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 78.79% of total revenue (i.e., net interest income on a fully taxable equivalent basis and noninterest income) for the first quarter of 2023.
+Added: 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% of total revenue (i.e., net interest income on a fully taxable equivalent basis and noninterest income) for the second quarter of 2023.
The primary concerns in managing net interest income are the volume, mix and repricing of assets and liabilities.
−Removed: Net interest income was $135,775 for the three months ended March 31, 2023, as compared to $99,629 for the same period in 2022.
−Removed: On a tax equivalent basis, net interest income was $138,529 for the three months ended March 31, 2023, as compared to $101,383 same period in 2022.
+Added: Net interest income was $130,216 and $265,991 for the three and six months ended June 30, 2023, as compared to $113,515 and $213,144 for the same periods in 2022.
+Added: On a tax equivalent basis, net interest income was $133,085 and $271,614 for the three and six months ended June 30, 2023, as compared to $115,321 and $216,704 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:
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30,
Balance Interest
32 unchanged sentences
(2) Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.
+Added: Six Months Ended June 30,
+Added: Balance Interest
+Added: Expense Yield/
+Added: Balance Interest
+Added: Expense Yield/
+Added: Interest-earning assets:
+Added: Loans held for investment $ 11,783,585 $ 339,519 5.81 % $ 10,293,949 $ 204,613 4.00 %
+Added: Loans held for sale 148,221 4,727 6.38 278,722 5,449 3.91
+Added: Taxable 2,511,373 25,143 2.00 2,592,645 19,137 1.48
+Added: Tax-exempt (1)
+Added: 428,754 5,037 2.35 445,154 5,354 2.41
+Added: Interest-bearing balances with banks 494,434 12,408 5.06 1,233,241 2,618 0.43
+Added: Total interest-earning assets 15,366,367 386,834 5.07 14,843,711 237,171 3.21
+Added: Cash and due from banks 193,703 206,559
+Added: Intangible assets 1,012,690 966,956
+Added: Other assets 675,648 647,254
+Added: Total assets $ 17,248,408 $ 16,664,480
+Added: Liabilities and shareholders’ equity
+Added: Interest-bearing liabilities:
+Added: Interest-bearing demand (2)
+Added: $ 6,090,549 $ 49,483 1.64 % $ 6,603,986 $ 7,245 0.22 %
+Added: Savings deposits 1,028,315 1,639 0.32 1,117,724 286 0.05
+Added: Brokered deposits 604,158 14,408 4.81 — — —
+Added: Time deposits 1,650,347 18,727 2.29 1,339,022 3,124 0.47
+Added: Total interest-bearing deposits 9,373,369 84,257 1.81 9,060,732 10,655 0.24
+Added: Borrowed funds 1,243,049 30,963 5.01 514,940 9,812 3.82
+Added: Total interest-bearing liabilities 10,616,418 115,220 2.19 9,575,672 20,467 0.43
+Added: Noninterest-bearing deposits 4,212,081 4,683,446
+Added: Other liabilities 217,573 191,938
+Added: Shareholders’ equity 2,202,336 2,213,424
+Added: Total liabilities and shareholders’ equity $ 17,248,408 $ 16,664,480
+Added: Net interest income/net interest margin $ 271,614 3.56 % $ 216,704 2.94 %
+Added: Government and some U.S.
+Added: Government Agency securities are tax-exempt in the states in which the Company operates.
+Added: (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.
3 unchanged sentences
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.
−Removed: The largest contributing factors to the increase in net interest income for the three months ended March 31, 2023, as compared to the same period in 2022, were the rising interest rate environment throughout 2022 and thus far in 2023, for both interest-earning assets and interest-bearing liabilities, coupled with steady loan growth, offset by the Company’s decision to increase on-balance sheet liquidity following the bank failures in March 2023.
−Removed: The Company has continued to focus on mitigating 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 deposits.
−Removed: In the first quarter 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 electing to significantly increase its brokered deposits and borrowed funds in the first quarter of 2023, as compared to the same quarter in 2022.
−Removed: The following tables set forth a summary of the changes in interest earned, on a tax equivalent basis, and interest paid resulting from changes in volume and rates for the Company for the three months ended March 31, 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):
−Removed: Three Months Ended March 31, 2023 Compared to the Three Months Ended March 31, 2022
+Added: The largest contributing factor to the increase in net interest income for the six months ended June 30, 2023, as compared to the same period in 2022, was the rising rate environment throughout 2022 and thus far in 2023.
+Added: 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.
+Added: This increase was offset to some degree by an increase in interest expense.
+Added: 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.
+Added: 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
+Added: In the first half 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 months of 2023, as compared to the same period in 2022 in order to maintain robust on-balance sheet liquidity.
+Added: 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 months ended June 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):
+Added: Three Months Ended June 30, 2023 Compared to the Three Months Ended June 30, 2022
Volume Rate Net
14 unchanged sentences
Change in net interest income $ (5,389) $ 23,153 $ 17,764
−Removed: Interest income, on a tax equivalent basis, was $186,799 for the three months ended March 31, 2023, as compared to $111,945 for the same period in 2022.
−Removed: The increase in interest income, on a tax equivalent basis, for the three months ended March 31, 2023 as compared to the same time period 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.
+Added: Six months ended June 30, 2023 Compared to the Six Months Ended June 30, 2022
+Added: Volume Rate Net
+Added: Interest income:
+Added: Loans held for investment $ 32,902 $ 102,004 $ 134,906
+Added: Loans held for sale (3,213) 2,491 (722)
+Added: Taxable (608) 6,614 6,006
+Added: Tax-exempt (195) (122) (317)
+Added: Interest-bearing balances with banks (2,458) 12,248 9,790
+Added: Total interest-earning assets 26,428 123,235 149,663
+Added: Interest expense:
+Added: Interest-bearing demand deposits (606) 42,844 42,238
+Added: Savings deposits (24) 1,377 1,353
+Added: Brokered deposits 14,408 — 14,408
+Added: Time deposits 885 14,718 15,603
+Added: Borrowed funds 17,334 3,817 21,151
+Added: Total interest-bearing liabilities 31,997 62,756 94,753
+Added: Change in net interest income $ (5,569) $ 60,479 $ 54,910
+Added: Interest income, on a tax equivalent basis, was $200,035 and $386,834 for the three and six months ended June 30, 2023, as compared to $125,226 and $237,171 for the same periods in 2022.
+Added: The increase in interest income, on a tax equivalent basis, for the three and six months ended June 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:
1 unchanged sentence
Three Months Ended Three Months Ended
−Removed: March 31, March 31,
+Added: June 30, June 30,
2023 2022 2023 2022
4 unchanged sentences
Total earning assets 100.00 % 100.00 % 5.19 % 3.38 %
−Removed: For the first quarter of 2023, interest income on loans held for investment, on a tax equivalent basis, increased $66,969 to $163,970 from $97,001 for the same period in 2022.
−Removed: In addition to loan growth since the first quarter of 2022, the Federal Reserve began to raise interest rates in March 2022, which positively impacted the Company’s loan pricing, and the average balance of loans held for investment increased $1,580,023 from March 2022, thereby resulting in the increase in interest income on loans held for investment for the first quarter of 2023 as compared to the first quarter of 2022.
+Added: Percentage of Total Average Earning Assets Yield
+Added: Six Months Ended Six Months Ended
+Added: June 30, June 30,
+Added: 2023 2022 2023 2022
+Added: Loans held for investment 76.68 % 69.35 % 5.81 % 4.00 %
+Added: Loans held for sale 0.96 1.88 6.38 3.91
+Added: Securities 19.13 20.47 2.05 1.61
+Added: Interest-bearing balances with banks 3.23 8.30 5.06 0.43
+Added: Total earning assets 100.00 % 100.00 % 5.07 % 3.21 %
+Added: For the second quarter of 2023, interest income on loans held for investment, on a tax equivalent basis, increased $67,937 to $175,549 from $107,612 for the same period in 2022.
+Added: For the six months ended June 30, 2023, interest income on loans held for investment, on a tax equivalent basis, increased $134,906 to $339,519 from $204,613 in the same period in 2022.
+Added: 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 from June 2022, thereby resulting in the increase in interest income on loans held for investment for the three and six months ended June 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.
−Removed: Three Months Ended
+Added: Three Months Ended Six Months Ended
+Added: June 30, June 30,
+Added: 2023 2022 2023 2022
Net interest income collected on problem loans $ 364 $ 2,276 $ 756 $ 2,710
Accretable yield recognized on purchased loans (1)
+Added: 874 2,021 1,759 3,256
Total impact to interest income on loans $ 1,238 $ 4,297 $ 2,515 $ 5,966
1 unchanged sentence
Impact to net interest margin 0.03 % 0.12 % 0.03 % 0.08 %
−Removed: (1) Includes additional interest income recognized in connection with the acceleration of paydowns and payoffs from purchased loans of $261 and $373 for the first quarter of 2023 and 2022, respectively.
−Removed: This additional interest income increased total loan yield by one basis point for the first quarter of 2023 and 2022, while increasing net interest margin by one basis point for the same respective periods.
−Removed: For the first quarter of 2023, interest income on loans held for sale (consisting of mortgage loans held for sale) decreased $1,126 to $1,737 from $2,863 for the same period in 2022.
−Removed: Investment income, on a tax equivalent basis, increased $4,245 to $15,662 for the first quarter of 2023 from $11,417 for the first quarter of 2022.
−Removed: The tax equivalent yield on the investment portfolio for the first quarter of 2023 was 2.07%, up 52 basis points from 1.55% for the same period in 2022.
−Removed: The increase in taxable equivalent yield on securities for the three months ended March 31, 2023 as compared to the same period in 2022 was due to purchases of higher yielding securities.
−Removed: The increase in yield, coupled with growth in the securities portfolio during 2022 led to the growth in investment income, on a tax equivalent basis.
−Removed: Interest expense was $48,270 for the first quarter of 2023 as compared to $10,562 for the same period in 2022.
+Added: (1) Includes additional interest income recognized in connection with the acceleration of paydowns and payoffs from purchased loans of $289 and $1,183 for the second quarter of 2023 and 2022, respectively.
+Added: The impact was $550 and
+Added: $1,556 for the six months ended June 30, 2023 and 2022, respectively.
+Added: This additional interest income increased total loan yield by one basis point and five basis points for the second quarter of 2023 and 2022, respectively, while increasing net interest margin by one and three basis points for the same respective periods.
+Added: For the six months ended June 30, 2023 and 2022, the additional interest income increased total loan yields by one and three basis points, respectively, while increasing net interest margin by one and two basis points, respectively.
+Added: For the second quarter of 2023, interest income on loans held for sale (consisting of mortgage loans held for sale) increased $404 to $2,990 from $2,586 for the same period in 2022.
+Added: For the six months ended June 30, 2023, interest income on loans held for sale (consisting of mortgage loans held for sale), decreased $722 to $4,727 from $5,449 for the same period in 2022.
+Added: Investment income, on a tax equivalent basis, increased $1,444 to $14,518 for the second quarter of 2023 from $13,074 for the second quarter of 2022.
+Added: Investment income, on a tax equivalent basis, increased $5,689 to $30,180 for the six months ended June 30, 2023 from $24,491 for the same period in 2022.
+Added: The tax equivalent yield on the investment portfolio for the second quarter of 2023 was 2.04%, up 37 basis points from 1.67% for the same period in 2022.
+Added: The tax equivalent yield on the investment portfolio for the six months ended June 30, 2023 was 2.05%, up 44 basis points from 1.61% in the same period in 2022.
+Added: The increase in taxable equivalent yield on securities for the three and six months ended June 30, 2023 as compared to the same periods in 2022 was due to purchases of higher yielding securities during 2022.
+Added: The increase in yield led to the growth in investment income, on a tax equivalent basis.
+Added: 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.
+Added: Interest expense was $66,950 for the second quarter of 2023 as compared to $9,905 for the same period in 2022.
+Added: Interest expense for the six months ended June 30, 2023 was $115,220 as compared to $20,467 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:
1 unchanged sentence
Three Months Ended Three Months Ended
−Removed: March 31, March 31,
+Added: June 30, June 30,
2023 2022 2023 2022
9 unchanged sentences
Total deposits and borrowed funds 100.00 % 100.00 % 1.80 % 0.28 %
−Removed: Interest expense on deposits was $32,866 and $5,637 for the three months ended March 31, 2023 and 2022, respectively.
−Removed: The cost of total deposits was 0.99% and 0.17% for the three months ended March 31, 2023 and 2022, respectively.
+Added: Percentage of Total Average Deposits and Borrowed Funds Cost of Funds
+Added: Six Months Ended Six Months Ended
+Added: June 30, June 30,
+Added: 2023 2022 2023 2022
+Added: Noninterest-bearing demand 28.41 % 32.85 % — % — %
+Added: Interest-bearing demand 41.07 46.31 1.64 0.22
+Added: Savings 6.94 7.84 0.32 0.05
+Added: Brokered deposits 4.07 — 4.81 —
+Added: Time deposits 11.13 9.39 2.29 0.47
+Added: Short-term borrowings 5.48 0.49 4.46 0.65
+Added: Long-term Federal Home Loan Bank advances — — — 1.87
+Added: Subordinated notes 2.14 2.34 5.45 4.31
+Added: Other long term borrowings 0.76 0.78 7.77 4.37
+Added: Total deposits and borrowed funds 100.00 % 100.00 % 1.57 % 0.29 %
+Added: Interest expense on deposits was $51,391 and $5,018 for the three months ended June 30, 2023 and 2022, respectively.
+Added: The cost of total deposits was 1.50% and 0.15% for the same respective periods.
+Added: Interest expense on deposits was $84,257 and $10,655 for the six months ended June 30, 2023 and 2022, respectively, and the cost of total deposits was 1.25% and 0.16% 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.
2 unchanged sentences
however, the Company may rely on brokered deposits or wholesale borrowings when advantageous or otherwise deemed advisable due to market conditions.
−Removed: Interest expense on total borrowings was $15,404 and $4,925 for the three months ended March 31, 2023 and 2022, respectively.
−Removed: 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 quarter of 2023.
+Added: Interest expense on total borrowings was $15,559 and $4,887 for the three months ended June 30, 2023 and 2022, respectively.
+Added: Interest expense on total borrowings was $30,963 and $9,812 for the six months ended June 30, 2023 and 2022, respectively.
+Added: 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 of 2023.
+Added: The repayment of FHLB borrowings during the second quarter of 2023 had a nominal impact to interest expense for the three and six months ended June 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.
1 unchanged sentence
Noninterest Income to Average Assets
−Removed: Three Months Ended March 31,
−Removed: Total noninterest income includes fees generated from deposit services and other fees and commissions, income from our insurance, wealth management and mortgage banking operations, realized gains on the sale of securities and all other noninterest income.
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 2023 2022
+Added: 0.40% 0.90% 0.64% 0.90%
+Added: 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.
−Removed: Noninterest income was $37,293 for the first quarter of 2023 as compared to $37,458 for the same period in 2022.
+Added: Noninterest income was $17,226 for the second quarter of 2023 as compared to $37,214 for the same period in 2022.
+Added: Noninterest income was $54,519 for the six months ended June 30, 2023 as compared to $74,672 for the same period in 2022.
+Added: The decrease over the three and six month periods is primarily due to 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).
−Removed: Service charges on deposit accounts were $9,120 and $9,562 for the first quarter of 2023 and 2022, respectively.
−Removed: Overdraft fees, the largest component of service charges on deposits, were $4,580 for the three months ended March 31, 2023, as compared to $5,178 for the same period in 2022.
+Added: Service charges on deposit accounts were $9,733 and $9,734 for the second quarter of 2023 and 2022, respectively, and $18,853 and $19,296 for the six months ended June 30, 2023 and 2022, respectively.
+Added: Overdraft fees, the largest component of service charges on deposits, were $5,088 for the three months ended June 30, 2023, as compared to $5,249 for the same period in 2022.
+Added: These fees were $9,669 for the six months ended June 30, 2023 compared to $10,428 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
−Removed: The fees eliminated totaled approximately $1,300 for the first quarter of 2022.
−Removed: Fees and commissions were $4,676 during the first quarter of 2023 as compared to $3,982 for the same period in 2022.
−Removed: Fees and commissions include fees related to deposit services, such as ATM fees and interchange fees on debit card transactions.
−Removed: For the first quarter of 2023, interchange fees were $2,327 as compared to $2,431 for the same period in 2022.
+Added: The fees eliminated totaled approximately $1,300 for the second quarter of 2022 and $2,600 for the first six months of 2022.
+Added: Fees and commissions were $4,987 during the second quarter of 2023 as compared to $4,668 for the same period in 2022, and were $9,663 for the first six months of 2023 as compared to $8,650 for the same period in 2022.
+Added: 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.
+Added: For the second quarter of 2023, interchange fees were $2,467 as compared to $2,646 for the same period in 2022.
+Added: Interchange fees were $4,793 for the six months ended June 30, 2023 as compared to $5,078 for the same period in 2022.
Through Renasant Insurance, we offer a range of commercial and personal insurance products through major insurance carriers.
−Removed: Income earned on insurance products was $2,446 and $2,554 for the three months ended March 31, 2023 and 2022.
+Added: Income earned on insurance products was $2,809 and $2,591 for the three months ended June 30, 2023 and 2022, respectively, and was $5,255 and $5,145 for the six months ended June 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.
−Removed: Contingency income, which is included in “Other noninterest income” in the Consolidated Statements of Income, was $910 and $534 for the three months ended March 31, 2023 and 2022, respectively.
+Added: Contingency income, which is included in “Other noninterest income” in the Consolidated Statements of Income, was $46 and $15 for the three months ended June 30, 2023 and 2022, respectively, and $956 and $549 for the six months ended June 30, 2023 and 2022, respectively.
Our Wealth Management segment has two divisions:
4 unchanged sentences
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.
−Removed: Wealth Management revenue was $5,140 for the first quarter of 2023 compared to $5,924 for the same period in 2022.
−Removed: The market value of assets under management or administration was $4,980,887 and $5,021,299 at March 31, 2023 and March 31, 2022, respectively.
+Added: Wealth Management revenue was $5,338 for the second quarter of 2023 compared to $5,711 for the same period in 2022, and was $10,478 for the six months ended June 30, 2023 compared to $11,635 for the same period in 2022.
+Added: The market value of assets under management or administration was $5,135,465 and $5,084,867 at June 30, 2023 and June 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.
−Removed: Interest rate lock commitments and originations of mortgage loans to be sold totaled $629,833 and $258,946, respectively, in the first quarter of 2023 compared to $1,174,146 and $595,045, respectively for the same period in 2022.
+Added: Interest rate lock commitments and originations of mortgage loans to be sold totaled $610,611 and $400,975, respectively, in the second quarter of 2023 compared to $866,048 and $481,568, respectively for the same period in 2022.
+Added: Interest rate lock commitments and originations of mortgage loans to be sold totaled $1,240,443 and $659,921 in the six months ended June 30, 2023 compared to $2,040,194 and $1,076,613 for the same period in 2022.
The decrease in both interest rate lock commitments and 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.
−Removed: Mortgage banking income was $8,517 and $9,633 for the three months ended March 31, 2023 and 2022, respectively.
The table below presents the components of mortgage banking income included in noninterest income for the periods presented.
−Removed: Three Months Ended March 31,
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 2023 2022
Gain on sales of loans, net (1)
5 unchanged sentences
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.
−Removed: BOLI income was $3,003 for the three months ended March 31, 2023 as compared to $2,153 for the same period in 2022.
+Added: BOLI income was $2,402 for the three months ended June 30, 2023 as compared to $2,331 for the same period in 2022, and $5,405 for the six months ended June 30, 2023 as compared to $4,484 for the same period in 2022.
The Company purchased an additional $80,000 in BOLI policies during the first quarter of 2022.
−Removed: No such purchases were made in the first quarter of 2023.
−Removed: Other noninterest income was $4,391 and $3,650 for the three months ended March 31, 2023 and 2022, respectively.
−Removed: Other noninterest income includes income from our SBA banking division, our capital markets division and other miscellaneous income and can fluctuate based on production in our SBA banking and capital markets divisions and recognition of other seasonal income items.
+Added: No such purchases were made in the first half of 2023.
+Added: Other noninterest income was $4,624 and $3,863 for the three months ended June 30, 2023 and 2022, respectively, and was $9,015 and $7,513 for the six months ended June 30, 2023 and 2022, respectively.
+Added: Other noninterest income includes income
+Added: 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
−Removed: Three Months Ended March 31,
−Removed: Noninterest expense was $107,708 and $94,105 for the first quarter of 2023 and 2022, respectively.
−Removed: Salaries and employee benefits increased $7,593 to $69,832 for the first quarter of 2023 as compared to $62,239 for the same period in 2022.
−Removed: The increase in salaries and employee benefits is due to increases in the minimum wage we pay our employees that were implemented in May 2022.
−Removed: The Company also incurred higher levels of performance-based incentive expense and medical and other insurance related expense in the first quarter of 2023.
−Removed: The acquisition of RBC added $1,563 to salaries and employee benefits expense in the first quarter of 2023.
−Removed: Data processing costs decreased to $3,633 in the first quarter of 2023 from $4,263 for the same period in 2022.
−Removed: The decline in the first quarter of 2023 as compared to the same period in 2022 is primarily due to the Company's renegotiation of certain vendor contracts.
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 2023 2022
+Added: 2.53% 2.37% 2.54% 2.33%
+Added: Noninterest expense was $109,165 and $98,194 for the second quarter of 2023 and 2022, respectively, and was $216,873 and $192,299 for the six months ended June 30, 2023 and 2022, respectively.
+Added: Salaries and employee benefits increased $5,057 to $70,637 for the second quarter of 2023 as compared to $65,580 for the same period in 2022.
+Added: Salaries and employee benefits increased $12,650 to $140,469 for the six months ended June 30, 2023 as compared to $127,819 for the same period in 2022.
+Added: 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.
+Added: The acquisition of RBC added $3,174 to salaries and employee benefits expense in the first half of 2023.
+Added: Data processing costs were $3,684 in the second quarter of 2023 as compared to $3,590 for the same period in 2022 and were $7,317 for the six months ended June 30, 2023 as compared to $7,853 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.
−Removed: Net occupancy and equipment expense for the first quarter of 2023 was $11,405, as compared to $11,276 for the same period in 2022.
−Removed: For the first quarter of 2023 the Company had expenses of $30 related to other real estate owned as compared to a net gain of $241 for the same period in 2022.
−Removed: 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 $14 for the first three months of 2022.
−Removed: There were no such write downs during the first quarter of 2023.
−Removed: For the three months ended March 31, 2023 and 2022, other real estate owned with a cost basis of $552 and $665, respectively, was sold, resulting in a net gain of $95 and $291, respectively.
+Added: Net occupancy and equipment expense for the second quarter of 2023 was $11,865, as compared to $11,155 for the same period in 2022.
+Added: These expenses for the first six months of 2023 were $23,270, as compared to $22,431 for the same period in 2022
+Added: For the second quarter of 2023 the Company had expenses of $51 related to other real estate owned as compared to a net gain of $187 for the same period in 2022.
+Added: These expenses were $81 for the six months ended June 30, 2023 as compared to a net gain of $428 for the same period in 2022.
+Added: 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 and $51 for the first six months of 2023 and 2022, respectively.
+Added: For the six months ended June 30, 2023 and 2022, other real estate owned with a cost basis of $738 and $967, respectively, was sold, resulting in a net gain of $89 and $557, 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.
−Removed: Professional fees were $3,467 for the first quarter of 2023 as compared to $3,151 for the same period in 2022.
−Removed: Advertising and public relations expense was $4,686 for the first quarter of 2023 as compared to $4,059 for the same period in 2022.
−Removed: During the three months ended March 31, 2023 and 2022, the Company contributed approximately $1,067 and $1,000, respectively, to charitable organizations throughout Mississippi and Georgia, which contributions are included in our advertising and public relations expense, for which it received a dollar-for-dollar tax credit.
−Removed: Amortization of intangible assets totaled $1,426 and $1,366 for the first quarter of 2023 and 2022, respectively.
−Removed: This amortization relates to finite-lived intangible assets which are being amortized over the useful lives as determined at
+Added: Professional fees were $4,012 for the second quarter of 2023 as compared to $2,778 for the same period in 2022, and $7,479 for the six months ended June 30, 2023 as compared to $5,929 for the same period in 2022.
+Added: Advertising and public relations expense was $3,482 for the second quarter of 2023 as compared to $3,406 for the same period in 2022, and $8,168 for the six months ended June 30, 2023 as compared to $7,465 for the same period in 2022.
+Added: During the six months ended June 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.
+Added: Amortization of intangible assets totaled $1,369 and $1,310 for the second quarter of 2023 and 2022, respectively, and $2,795 and $2,676 for the six months ended June 30, 2023 and 2022, respectively.
+Added: 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.
−Removed: Communication expenses, those expenses incurred for communication to clients and between employees, were $1,980 for the first quarter of 2023 as compared to $2,027 for the same period in 2022.
+Added: Communication expenses, those expenses incurred for communication to clients and between employees, were $2,226 for the second quarter of 2023 as compared to $1,904 for the same period in 2022.
+Added: Communication expenses were $4,206 for the six months ended June 30, 2023 as compared to $3,931 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.
−Removed: Other noninterest expense was $11,249 for the three months ended March 31, 2023 as compared to $5,733 for the same period in 2022.
−Removed: The increase in other noninterest expense is primarily attributable to lower deferred loan origination expense in the first quarter of 2023 compared to the same period in 2022.
−Removed: The amount of loan origination expense deferred is directly correlated to the volume and mix of our loan production during the quarter.
−Removed: A negative provision (recovery) for unfunded commitments of $1,500 and $550 was recorded for the first quarter of 2023 and 2022, respectively.
+Added: Other noninterest expense was $11,839 and $23,088 for the three and six months ended June 30, 2023 as compared to $7,471 and $13,204 for the same periods in 2022.
+Added: The increase in other noninterest expense is primarily attributable to lower deferred loan origination expense in the first half of 2023 compared to the same period in 2022.
+Added: The amount of loan origination expense deferred is directly correlated to the volume and mix of our loan production during the period.
+Added: A negative provision (recovery) for unfunded commitments of
+Added: $1,000 and $2,500 was recorded for the three and six months ended June 30, 2023.
+Added: There was a provision for unfunded commitments of $450 for the second quarter of 2022 and a recovery of provision for unfunded commitments of $100 for the six months ended June 30, 2022.
Efficiency Ratio
Efficiency Ratio
−Removed: Three Months Ended March 31,
−Removed: Efficiency ratio (GAAP) 61.26 % 67.78 %
+Added: Three Months Ended June 30, Six Months Ended June 30,
+Added: 2023 2022 2023 2022
+Added: Efficiency ratio 72.63 % 64.37 % 66.50 % 66.00 %
The efficiency ratio is a measure of productivity in the banking industry.
1 unchanged sentence
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.
+Added: The loss on the sale of securities reduced the efficiency ratio by 9.44% and 6.22% for the three and six months ended June 30, 2023, respectively.
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.
−Removed: Income tax expense for the first quarter of 2023 and 2022 was $11,322 and $7,935, respectively.
−Removed: The Company recognized tax credits of approximately $1,067 in the first quarter of 2023 (as mentioned above in the advertising and public relations discussion) as compared to approximately $1,000 in the first quarter of 2022.
+Added: Income tax expense for the second quarter of 2023 and 2022 was $6,634 and $10,857, respectively, and $17,956 and $18,792 for the six months ended June 30, 2023 and 2022, respectively.
+Added: The Company recognized tax credits of approximately $1,292 in the first half of 2023 (as mentioned above in the advertising and public relations discussion) as compared to approximately $1,350 in the first half of 2022.
Risk Management
14 unchanged sentences
Before funds are advanced on consumer and commercial loans below certain dollar thresholds, loans are reviewed and scored using centralized underwriting methodologies.
−Removed: Loan quality, or “risk-rating,” grades are assigned based
−Removed: upon certain factors, which include the scoring of the loans.
+Added: 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.
−Removed: For loans with a commercial purpose, risk-rating grades are assigned by lending, credit administration and loan review personnel, based on an analysis of the financial and collateral strength and other credit attributes underlying each loan.
−Removed: Loan grades range from 10 to 95, with 10 rated loans having the least credit risk.
−Removed: Management’s problem asset resolution committee and the Board of Directors’ Credit Review Committee monitor loans that are past due or those that have been downgraded to criticized due to a decline in the collateral value or cash flow of the borrower.
+Added: 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.
+Added: Loan grades range from 10 to 95, with 10 being loans with the least credit risk.
+Added: 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
This information is used to assist management in monitoring credit quality.
1 unchanged sentence
After all collection efforts have failed, collateral securing loans may be repossessed and sold or, for loans secured by real estate, foreclosure proceedings initiated.
−Removed: The collateral is sold at public auction for fair market value (based upon recent appraisals as described above), with fees associated with the foreclosure being deducted from the sales price.
+Added: 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.
2 unchanged sentences
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.
−Removed: Net charge-offs for the first three months of 2023 were $4,732, or 0.16% of average loans (annualized), compared to net charge-offs of $851, or 0.03% of average loans (annualized), for the same period in 2022.
+Added: Net charge-offs for the first six months of 2023 were $8,633, or 0.15% of average loans (annualized), compared to net charge-offs of $3,188, 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.
34 unchanged sentences
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:
−Removed: March 31, 2023 December 31, 2022 March 31, 2022
+Added: June 30, 2023 December 31, 2022 June 30, 2022
Balance % of Total Balance % of Total Balance % of Total
7 unchanged sentences
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.
−Removed: The Company recorded a provision for credit losses of $7,960 in the first quarter of 2023, as compared to $1,500 in the first quarter of 2022.
+Added: The Company recorded a provision for credit losses of $3,000 in the second quarter of 2023 and $10,960 in the first half of 2023, as compared to $2,000 in the second quarter of 2022 and $3,500 in the first half 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.
−Removed: The provision activity during the current quarter was primarily driven by loan growth coupled with a slight deterioration in our economic forecast.
+Added: The provision activity during the first six 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:
−Removed: Three Months Ended
+Added: Three Months Ended Six Months Ended
+Added: June 30, June 30,
+Added: 2023 2022 2023 2022
Balance at beginning of period $ 195,292 $ 166,468 $ 192,090 $ 164,171
−Removed: Impact of PCD loans acquired during the period (26) 1,648
+Added: Impact of purchased credit deteriorated loans acquired during the period — — (26) 1,648
Commercial, financial, agricultural 4,939 2,239 5,468 4,341
20 unchanged sentences
The table below reflects annualized net charge-offs (recoveries) to daily average loans outstanding, by loan category, during the periods presented:
−Removed: Three Months Ended
−Removed: March 31, 2023 March 31, 2022
−Removed: Net Charge-offs Average Loans Annualized Net Charge-offs to Average Loans Net Charge-offs Average Loans Annualized Net Charge-offs to Average Loans
+Added: Six Months Ended
+Added: June 30, 2023 June 30, 2022
+Added: 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 $ 3,469 $ 1,734,709 0.40% $ 2,774 $ 1,457,164 0.38%
6 unchanged sentences
The following table provides further details of the Company’s net charge-offs (recoveries) of loans secured by real estate for the periods presented:
−Removed: Three Months Ended
+Added: Three Months Ended Six Months Ended
+Added: June 30, June 30,
+Added: 2023 2022 2023 2022
Real estate – construction:
18 unchanged sentences
No credit loss estimate is reported for off-balance-sheet credit exposures that are unconditionally cancellable by the Company.
−Removed: A roll-forward of the allowance for credit losses on unfunded commitments is shown in the table below.
−Removed: Three Months Ended March 31, 2023 2022
+Added: A roll-forward of the allowance for credit losses on unfunded commitments is shown in the tables below.
+Added: Three Months Ended June 30, 2023 2022
Allowance for credit losses on unfunded loan commitments:
Beginning balance $ 18,618 $ 19,485
−Removed: Provision for (recovery of provision for) credit losses on unfunded loan commitments (included in other noninterest expense) (1,500) (550)
+Added: (Recovery of) provision for credit losses on unfunded loan commitments (included in other noninterest expense) (1,000) 450
Ending balance $ 17,618 $ 19,935
+Added: Six Months Ended June 30, 2023 2022
+Added: Allowance for credit losses on unfunded loan commitments:
+Added: Beginning balance $ 20,118 $ 20,035
+Added: Recovery of provision for credit losses on unfunded loan commitments (included in other noninterest expense) (2,500) (100)
+Added: Ending balance $ 17,618 $ 19,935
Nonperforming Assets .
7 unchanged sentences
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.
−Removed: The following tables provide details of the Company’s nonperforming assets as of the dates presented.
−Removed: March 31, 2023 December 31, 2022
+Added: The following table provides details of the Company’s nonperforming assets as of the dates presented.
+Added: June 30, 2023 December 31, 2022
Nonaccruing loans $ 55,439 $ 56,545
7 unchanged sentences
The following table presents nonperforming loans by loan category as of the dates presented:
−Removed: 2023 December 31, 2022 March 31,
+Added: 2023 December 31, 2022 June 30,
Commercial, financial, agricultural $ 7,698 $ 12,543 $ 6,199
17 unchanged sentences
Total nonperforming loans $ 91,760 $ 56,876 $ 44,514
−Removed: Total nonperforming loans as a percentage of total loans were 0.64% as of March 31, 2023 as compared to 0.49% and 0.51% as of December 31, 2022 and March 31, 2022, respectively.
−Removed: The increase in nonperforming loans is primarily due to two loans, both of which are fully secured and with respect to which the Company expects no loss.
−Removed: The Company’s coverage ratio, or its allowance for credit losses on loans as a percentage of nonperforming loans, was 259.39% as of March 31, 2023 as compared to 337.73% as of December 31, 2022 and 318.65% as of March 31, 2022.
−Removed: 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 March 31, 2023.
+Added: Total nonperforming loans as a percentage of total loans were 0.77% as of June 30, 2023 as compared to 0.49% and 0.42% as of December 31, 2022 and June 30, 2022, respectively.
+Added: 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.
+Added: The Company’s coverage ratio, or its allowance for credit losses on loans as a percentage of nonperforming loans, was 211.85% as of June 30, 2023 as compared to 337.73% as of December 31, 2022 and 373.21% as of June 30, 2022.
+Added: 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 30, 2023.
Management also continually monitors past due loans for potential credit quality deterioration.
−Removed: Total loans 30-89 days past due but still accruing interest were $50,992, or 0.43% of total loans, at March 31, 2023 as compared to $58,703, or 0.51% of total loans, at December 31, 2022 and $30,617, or 0.30% of total loans, at March 31, 2022.
−Removed: 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 and can contribute to our credit risk.
−Removed: The amortized cost of these modifications, all of which were in the form of interest rate reductions, totaled $1,184 during the first quarter of 2023, of which $1,029 and $155 were Real estate - commercial mortgage, non-owner occupied and Real estate - commercial mortgage, owner-occupied, respectively.
−Removed: These modifications represent an insignificant percentage of total loans.
−Removed: For modified loans in the Real estate - commercial mortgage, non-owner occupied class, the weighted average interest rate at modification was 6.67% and was reduced to 6.55%.
−Removed: For modified loans in the Real estate - commercial mortgage, owner occupied class, the weighted average interest rate at modification was 5.43% and was reduced to 4.75%.
−Removed: These loan modifications were current and accruing at March 31, 2023, and had no unused commitments.
+Added: Total loans 30-89 days past due but still accruing interest were $12,146, or 0.10% of total loans, at June 30, 2023 as compared to $58,703, or 0.51% of total loans, at December 31, 2022 and $16,910, or 0.16% of total loans, at June 30, 2022.
+Added: 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.
+Added: At June 30, 2023, these loan modifications were performing in accordance with their modified terms and unused commitments totaled $1,600.
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.
−Removed: The following table provides details of the Company’s other real estate owned as of the dates presented:
−Removed: 2023 December 31, 2022 March 31,
+Added: 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.
+Added: The following table presents the amortized cost basis of loans that were both experiencing financial difficulty and modified during the three months and six months ended June 30, 2023, by class and by type of modification.
+Added: 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.
+Added: Three Months Ended Six Months Ended
+Added: Interest Rate Reduction Term Extension Payment Delay Total % Total Loans by Class Interest Rate Reduction Term Extension Payment Delay Total % Total Loans by Class
+Added: Commercial, financial, agricultural $ — $ 1,210 $ — $ 1,210 0.07 % $ — $ 1,210 $ — $ 1,210 0.07 %
+Added: Real estate – construction:
+Added: Residential — 4,366 — 4,366 1.42 — 4,366 — 4,366 1.42
+Added: Total real estate – construction — 4,366 — 4,366 0.32 — 4,366 — 4,366 0.32
+Added: Real estate – 1-4 family mortgage:
+Added: Home equity 9 — — 9 — 9 — — 9 —
+Added: Total real estate – 1-4 family mortgage 9 — — 9 — 9 — — 9 —
+Added: Real estate – commercial mortgage:
+Added: Owner-occupied — — — — — 155 — — 155 0.01
+Added: Non-owner occupied — — — — — 1,026 — — 1,026 0.03
+Added: Land development — 97 277 374 0.33 — 97 277 374 0.33
+Added: Total real estate – commercial mortgage — 97 277 374 0.01 1,181 97 277 1,555 0.03
+Added: Loans, net of unearned income $ 9 $ 5,673 $ 277 $ 5,959 0.05 % $ 1,190 $ 5,673 $ 277 $ 7,140 0.06 %
+Added: The following table presents the weighted average financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the three and six months ended June 30, 2023.
+Added: Three Months Ended Six Months Ended
+Added: 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)
+Added: Commercial, financial, agricultural — 2.1 — — 2.1 —
+Added: Real estate – construction:
+Added: Residential — 4.7 — — 4.7 —
+Added: Real estate – 1-4 family mortgage:
+Added: Home equity 300 — — 300 — —
+Added: Real estate – commercial mortgage:
+Added: Owner-occupied — — — 68 — —
+Added: Non-owner occupied — — — 12 — —
+Added: Land development — 8.4 3.0 — 8.4 3.0
+Added: Loans, net of unearned income 300 4.2 3.0 21 4.2 3.0
+Added: 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:
+Added: 2023 December 31, 2022 June 30,
Residential real estate $ 459 $ 699 $ 1,251
8 unchanged sentences
Dispositions (738) (967)
−Removed: Balance at March 31 $ 4,818 $ 2,062
−Removed: Other real estate owned with a cost basis of $552 was sold during the three months ended March 31, 2023, resulting in a net gain of $95, while other real estate owned with a cost basis of $665 was sold during the three months ended March 31, 2022, resulting in a net gain of $291.
+Added: Balance at June 30 $ 5,120 $ 2,807
+Added: Other real estate owned with a cost basis of $738 was sold during the six months ended June 30, 2023, resulting in a net gain of $89, while other real estate owned with a cost basis of $967 was sold during the six months ended June 30, 2022, resulting in a net gain of $557.
Interest Rate Risk
6 unchanged sentences
Because of the impact of interest rate fluctuations on our profitability and liquidity, the Board of Directors and management actively monitor and manage our interest rate risk exposure.
−Removed: We have an Asset/Liability Committee (“ALCO”) that is authorized by the Board of Directors to monitor our interest rate sensitivity and liquidity risk and to make decisions relating to these processes.
+Added: We have an Asset/Liability Committee (“ALCO”) that is authorized by the Board of Directors to monitor interest rate sensitivity and liquidity risk, over the short-, 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.
7 unchanged sentences
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.
−Removed: 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 April 1, 2023, in each case as compared to the result under rates present in the market on March 31, 2023.
+Added: 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 1, 2023, in each case as compared to the result under rates present in the market on June 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.
7 unchanged sentences
-200 (9.05)% (9.24)% (11.31)%
−Removed: The rate shock results for the net interest income simulations for the next 24 months produce an asset sensitive position at March 31, 2023.
+Added: The rate shock results for the net interest income simulations for the next 24 months produce an asset sensitive position at June 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.
1 unchanged sentence
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.
−Removed: The computation of the prospective effects of hypothetical interest rate changes requires numerous assumptions, including asset prepayment speeds, the impact of competitive factors on our pricing of loans, deposits and borrowings, how responsive our deposit repricing is to the change in market rates and the expected life of non-maturity deposits.
+Added: 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;
9 unchanged sentences
We may also access the brokered deposit market where rates are favorable to other sources of liquidity (especially in light of collateral requirements for certain borrowings, as described below) and core deposits are not sufficient for meeting our current and anticipated liquidity needs.
−Removed: During the first quarter of 2023, brokered deposits increased by $623,813 as compared to the balance at December 31, 2022.
+Added: During the first half of 2023, brokered deposits increased by $847,825 as compared to the balance at December 31, 2022.
Management continually monitors the Bank’s liquidity and non-core dependency ratios to ensure compliance with targets established by the ALCO.
3 unchanged sentences
Securities within our investment portfolio are also used to secure certain deposit types, short-term borrowings and derivative instruments.
−Removed: At March 31, 2023, securities with a carrying value of $895,300 were pledged to secure public fund deposits and as collateral for short-term borrowings and derivative instruments as compared to securities with a carrying value of $842,601 similarly pledged at December 31, 2022.
+Added: At June 30, 2023, securities with a carrying value of $786,023 were pledged to secure public fund deposits and as collateral for short-term borrowings and derivative instruments as compared to securities with a carrying value of $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.
Interest is charged at the prevailing market rate on federal funds purchased and FHLB advances.
−Removed: There were $725,000 in short-term borrowings from the FHLB at March 31, 2023, as compared to $700,000 at December 31, 2022.
+Added: There were $250,000 in short-term borrowings from the FHLB at June 30, 2023, as compared to $700,000 at December 31, 2022.
Long-term funds obtained from the FHLB are used to match-fund fixed rate loans in order to minimize interest rate risk and also are used to meet day-to-day liquidity needs, particularly when the cost of such borrowing compares favorably to the rates that we would be required to pay to attract deposits.
−Removed: There were no outstanding long-term advances with the FHLB at March 31, 2023 or December 31, 2022.
−Removed: The total amount of the remaining credit available to us from the FHLB at March 31, 2023 was $2,923,320.
+Added: There were no outstanding long-term advances with the FHLB at June 30, 2023 or December 31, 2022.
+Added: The total amount of the remaining credit available to us from the FHLB at June 30, 2023 was $3,484,050.
We also maintain lines of credit with other commercial banks totaling $180,000.
−Removed: These are unsecured lines of
−Removed: credit with the majority maturing at various times within the next twelve months.
−Removed: There were no amounts outstanding under these lines of credit at March 31, 2023 or December 31, 2022.
+Added: These are unsecured lines of credit with the
+Added: majority maturing at various times within the next twelve months.
+Added: There were no amounts outstanding under these lines of credit at June 30, 2023 or December 31, 2022.
Finally, we can access the capital markets to meet liquidity needs.
5 unchanged sentences
We have also assumed subordinated notes as part of acquisitions.
−Removed: The carrying value of subordinated notes, net of unamortized debt issuance costs, was $318,835 at March 31, 2023.
+Added: The carrying value of subordinated notes, net of unamortized debt issuance costs, was $317,120 at June 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
−Removed: Three Months Ended Three Months Ended
−Removed: March 31, March 31,
+Added: Six Months Ended Six Months Ended
+Added: June 30, June 30,
2023 2022 2023 2022
9 unchanged sentences
Total deposits and borrowed funds 100.00 % 100.00 % 1.57 % 0.29 %
−Removed: The estimated amount of uninsured and uncollateralized deposits at March 31, 2023 was $4,147,639.
+Added: The estimated amount of uninsured and uncollateralized deposits at June 30, 2023 was $3,885,983.
Collateralized public funds over the FDIC insurance limits were $1,448,039.
3 unchanged sentences
We constantly monitor our funds position and evaluate the effect that various funding sources have on our financial position.
−Removed: Cash and cash equivalents were $847,697 at March 31, 2023, as compared to $1,607,493 at March 31, 2022.
−Removed: Cash used in investing activities for the three months ended March 31, 2023 was $153,231, as compared to cash used in investing activities of $584,800 for the three months ended March 31, 2022.
−Removed: Proceeds from the sale, maturity or call of securities within our investment portfolio were $70,766 for the three months ended March 31, 2023, as compared to $135,775 for the same period in 2022.
−Removed: These proceeds were primarily used to fund loan growth in 2023, while they were primarily reinvested into the investment portfolio in 2022.
−Removed: There were no purchases of investment securities during the first three months of 2023, as compared to $365,069 for the same period in 2022.
−Removed: Cash provided by financing activities for the three months ended March 31, 2023 was $432,318, as compared to cash provided by financing activities of $108,512 for the same period in 2022.
−Removed: Deposits increased $425,054 and $85,173 for the three months ended March 31, 2023 and 2022, respectively.
+Added: Cash and cash equivalents were $946,899 at June 30, 2023, as compared to $1,010,468 at June 30, 2022.
+Added: Cash provided by investing activities for the six months ended June 30, 2023 was $274,113, as compared to cash used in investing activities of $1,087,213 for the six months ended June 30, 2022.
+Added: Proceeds from the sale, maturity or call of securities within our investment portfolio were $633,934 for the six months ended June 30, 2023, as compared to $266,656 for the same period in 2022.
+Added: 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.
+Added: Other proceeds were primarily used to fund loan growth in 2023, while they were primarily reinvested into the investment portfolio in 2022.
+Added: There were no purchases of investment securities during the first six months of 2023, as compared to $701,555 for the same period in 2022.
+Added: Cash provided by financing activities for the six months ended June 30, 2023 was $128,334, as compared to cash used in financing activities of $129,990 for the same period in 2022.
+Added: Deposits increased $608,395 and decreased $141,795 for the six months ended June 30, 2023 and 2022, respectively.
Restrictions on Bank Dividends, Loans and Advances
5 unchanged sentences
Federal Reserve regulations also limit the amount the Bank may loan to the Company unless such loans are collateralized by specific obligations.
−Removed: At March 31, 2023, the maximum amount available for transfer from the Bank to the Company in the form of loans was $182,137.
+Added: At June 30, 2023, the maximum amount available for transfer from the Bank to the Company in the form of loans was $183,595.
The Company maintains a $3,000 line of credit collateralized by cash with the Bank.
−Removed: There were no amounts outstanding under this line of credit at March 31, 2023.
−Removed: These restrictions did not have any impact on the Company’s ability to meet its cash obligations in the three months ended March 31, 2023, nor does management expect such restrictions to materially impact the Company’s ability to meet its currently-anticipated cash obligations.
+Added: There were no amounts outstanding under this line of credit at June 30, 2023.
+Added: These restrictions did not have any impact on the Company’s ability to meet its cash obligations in the six months ended June 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
6 unchanged sentences
The Company’s unfunded loan commitments and standby letters of credit outstanding were as follows as of the dates presented:
−Removed: March 31, 2023 December 31, 2022
+Added: June 30, 2023 December 31, 2022
Loan commitments $ 3,268,716 $ 3,577,614
8 unchanged sentences
The Company manages its credit risk, or potential risk of default by its commercial customers, through credit limit approval and monitoring procedures.
−Removed: At March 31, 2023, the Company had notional amounts of $305,029 on interest rate contracts with corporate customers and $305,029 in offsetting interest rate contracts with other financial institutions to mitigate the Company’s rate exposure on its corporate customers’ contracts and certain fixed rate loans.
+Added: At June 30, 2023, the Company had notional amounts of $510,641 on interest rate contracts with corporate customers and $436,028 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 on its FHLB borrowings and its junior subordinated debentures that are accounted for as cash flow hedges.
−Removed: Under each of these contracts, the Company pays a fixed rate of interest and receives a variable rate of interest based on the three-month or one-month LIBOR plus a predetermined spread.
−Removed: The Company entered into
−Removed: an interest rate swap contract on its subordinated notes that is accounted for as a fair value hedge.
−Removed: Under this contract, the Company pays a variable rate of interest based on the three-month LIBOR plus a predetermined spread and receives a fixed rate of interest.
+Added: Under each of these contracts, the Company pays a fixed rate of interest and receives a variable rate of interest.
+Added: The Company entered into an interest rate swap contract on its subordinated notes that is accounted for
+Added: as a fair value hedge.
+Added: Under this contract, the Company pays a variable rate of interest and receives a fixed rate of interest.
Additionally, the Company entered into an interest rate collar on forecasted borrowings in June 2022 with a 2.25% floor and 4.57% cap, which is accounted for as a cash flow hedge.
3 unchanged sentences
Shareholders’ Equity and Regulatory Matters
−Removed: Total shareholders’ equity of the Company was $2,187,300 at March 31, 2023 compared to $2,136,016 at December 31, 2022.
−Removed: Book value per share was $39.01 and $38.18 at March 31, 2023 and December 31, 2022, respectively.
+Added: Total shareholders’ equity of the Company was $2,208,628 at June 30, 2023 compared to $2,136,016 at December 31, 2022.
+Added: Book value per share was $39.35 and $38.18 at June 30, 2023 and December 31, 2022, respectively.
The growth in shareholders’ equity was attributable to changes in accumulated other comprehensive income and current period earnings, offset by dividends declared.
1 unchanged sentence
The program will remain in effect for one year or, if earlier, the repurchase of the entire amount of common stock authorized to be repurchased.
−Removed: The Company did not repurchase any of its common stock under the stock repurchase plan in the first quarter of 2023.
−Removed: The Company has junior subordinated debentures with a carrying value of $112,276 at March 31, 2023, of which $108,685 is included in the Company’s Tier 1 capital.
−Removed: 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 March 31, 2023.
+Added: The Company did not repurchase any of its common stock under the stock repurchase plan in the second quarter of 2023.
+Added: The Company has junior subordinated debentures with a carrying value of $112,510 at June 30, 2023, of which $108,919 is included in the Company’s Tier 1 capital.
+Added: 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 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.
−Removed: The Company has subordinated notes with a par value of $340,000 at March 31, 2023, of which $336,104 is included in the Company’s Tier 2 capital.
+Added: The Company has subordinated notes with a par value of $340,000 at June 30, 2023, of which $336,327 is included in the Company’s Tier 2 capital.
The Federal Reserve, the FDIC and the Office of the Comptroller of the Currency have issued guidelines governing the levels of capital that bank holding companies and banks must maintain.
19 unchanged sentences
Amount Ratio Amount Ratio Amount Ratio
−Removed: March 31, 2023
+Added: June 30, 2023
Renasant Corporation:
42 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.