Item 1. Financial Statements
Item 1. FINANCIAL STATEMENTS
Renasant Corporation and Subsidiaries
Consolidated Balance Sheets
(In Thousands, Except Share Data)
(Unaudited)
September 30,
2024 December 31, 2023
Assets
Cash and due from banks $ 228,937 $ 206,680
Interest-bearing balances with banks 1,046,683 594,671
Cash and cash equivalents 1,275,620 801,351
Securities held to maturity (net of allowance for credit losses of $ 32 at each of September 30, 2024 and December 31, 2023) (fair value of $ 1,068,968 and $ 1,121,830 , respectively)
1,150,531 1,221,464
Securities available for sale, at fair value 764,844 923,279
Loans held for sale, at fair value 291,735 179,756
Loans held for investment, net of unearned income 12,627,648 12,351,230
Allowance for credit losses on loans ( 200,378 ) ( 198,578 )
Loans, net 12,427,270 12,152,652
Premises and equipment, net 280,550 283,195
Other real estate owned, net 9,136 9,622
Goodwill 988,898 991,665
Other intangible assets, net 15,238 18,795
Bank-owned life insurance 389,138 382,584
Mortgage servicing rights 71,990 91,688
Other assets 293,890 304,484
Total assets $ 17,958,840 $ 17,360,535
Liabilities and shareholders’ equity
Liabilities
Deposits
Noninterest-bearing $ 3,529,801 $ 3,583,675
Interest-bearing 10,979,950 10,493,110
Total deposits 14,509,751 14,076,785
Short-term borrowings 108,732 307,577
Long-term debt 433,177 429,400
Other liabilities 249,102 249,390
Total liabilities 15,300,762 15,063,152
Shareholders’ equity
Preferred stock, $ 0.01 par value – 5,000,000 shares authorized; no shares issued and outstanding
— —
Common stock, $ 5.00 par value – 150,000,000 shares authorized; 66,484,225 and 59,296,725 shares issued, respectively; 63,564,028 and 56,142,207 shares outstanding, respectively
332,421 296,483
Treasury stock, at cost – 2,920,197 and 3,154,518 shares, respectively
( 97,251 ) ( 105,249 )
Additional paid-in capital 1,488,678 1,308,281
Retained earnings 1,063,324 952,124
Accumulated other comprehensive loss, net of taxes ( 129,094 ) ( 154,256 )
Total shareholders’ equity 2,658,078 2,297,383
Total liabilities and shareholders’ equity $ 17,958,840 $ 17,360,535
See Notes to Consolidated Financial Statements.
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Renasant Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
(In Thousands, Except Share Data)
Three Months Ended Nine Months Ended
September 30, September 30,
2024 2023 2024 2023
Interest income
Loans $ 206,867 $ 184,880 $ 603,492 $ 524,592
Securities
Taxable 9,212 9,439 27,975 34,992
Tax-exempt 1,092 1,230 3,439 4,768
Other 11,872 10,128 27,527 22,536
Total interest income 229,043 205,677 662,433 586,888
Interest expense
Deposits 90,787 70,906 261,021 155,163
Borrowings 7,258 7,388 22,098 38,351
Total interest expense 98,045 78,294 283,119 193,514
Net interest income 130,998 127,383 379,314 393,374
Provision for credit losses on loans 1,210 5,315 8,148 16,275
Recovery of credit losses on unfunded commitments ( 275 ) ( 700 ) ( 1,475 ) ( 3,200 )
Provision for credit losses 935 4,615 6,673 13,075
Net interest income after provision for credit losses 130,063 122,768 372,641 380,299
Noninterest income
Service charges on deposit accounts 10,438 9,743 31,230 28,596
Fees and commissions 4,116 4,108 12,009 13,771
Insurance commissions — 3,264 5,474 8,519
Wealth management revenue 5,835 5,986 17,188 16,464
Mortgage banking income 8,447 7,533 29,515 25,821
Gain on sale of insurance agency 53,349 — 53,349 —
Gain on debt extinguishment — — 56 —
Net loss on sales of securities — — — ( 22,438 )
BOLI income 2,858 2,469 8,250 7,874
Other 4,256 5,097 12,371 14,112
Total noninterest income 89,299 38,200 169,442 92,719
Noninterest expense
Salaries and employee benefits 71,307 69,458 213,508 209,927
Data processing 4,133 3,907 11,885 11,224
Net occupancy and equipment 11,415 11,548 34,648 34,818
Other real estate owned 56 ( 120 ) 268 ( 39 )
Professional fees 3,189 3,338 9,732 10,817
Advertising and public relations 3,677 3,474 12,370 11,642
Intangible amortization 1,160 1,311 3,558 4,106
Communications 2,176 2,006 6,312 6,212
Merger and conversion related expenses 11,273 — 11,273 —
Other 13,597 13,447 43,317 39,035
Total noninterest expense 121,983 108,369 346,871 327,742
Income before income taxes 97,379 52,599 195,212 145,276
Income taxes 24,924 10,766 44,502 28,722
Net income $ 72,455 $ 41,833 $ 150,710 $ 116,554
Basic earnings per share $ 1.18 $ 0.75 $ 2.60 $ 2.08
Diluted earnings per share $ 1.18 $ 0.74 $ 2.59 $ 2.07
Cash dividends per common share $ 0.22 $ 0.22 $ 0.66 $ 0.66
See Notes to Consolidated Financial Statements.
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Renasant Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income (Unaudited)
(In Thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2024 2023 2024 2023
Net income $ 72,455 $ 41,833 $ 150,710 $ 116,554
Other comprehensive income, net of tax:
Securities available for sale:
Unrealized holding gains (losses) on securities 23,441 ( 12,883 ) 19,275 ( 13,282 )
Reclassification adjustment for losses realized in net income — — — 16,816
Amortization of unrealized holding losses on securities transferred to the held to maturity category 2,331 2,947 7,190 7,527
Total securities available for sale 25,772 ( 9,936 ) 26,465 11,061
Derivative instruments:
Unrealized holding (losses) gains on derivative instruments ( 828 ) 1,987 ( 1,539 ) ( 1,606 )
Total derivative instruments ( 828 ) 1,987 ( 1,539 ) ( 1,606 )
Defined benefit pension and post-retirement benefit plans:
Amortization of net actuarial loss recognized in net periodic pension cost 78 86 236 258
Total defined benefit pension and post-retirement benefit plans 78 86 236 258
Other comprehensive income (loss), net of tax 25,022 ( 7,863 ) 25,162 9,713
Comprehensive income $ 97,477 $ 33,970 $ 175,872 $ 126,267
See Notes to Consolidated Financial Statements.
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Renasant Corporation and Subsidiaries
Consolidated Statements of Changes in Shareholders’ Equity
(Unaudited)
(In Thousands, Except Share Data)
Common Stock Treasury Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total
Nine Months Ended September 30, 2024 Shares Amount
Balance at January 1, 2024 56,142,207 $ 296,483 $ ( 105,249 ) $ 1,308,281 $ 952,124 $ ( 154,256 ) $ 2,297,383
Net income — — — — 39,409 — 39,409
Other comprehensive loss — — — — — ( 2,687 ) ( 2,687 )
Comprehensive income 36,722
Cash dividends ($ 0.22 per share)
— — — — ( 12,653 ) — ( 12,653 )
Issuance of common stock for stock-based compensation awards 162,653 — 5,566 ( 8,660 ) — — ( 3,094 )
Stock-based compensation expense — — — 3,992 — — 3,992
Balance at March 31, 2024 56,304,860 $ 296,483 $ ( 99,683 ) $ 1,303,613 $ 978,880 $ ( 156,943 ) $ 2,322,350
Net income — $ — $ — $ — $ 38,846 $ — $ 38,846
Other comprehensive income — — — — — 2,827 2,827
Comprehensive income 41,673
Cash dividends ($ 0.22 per share)
— — — — ( 12,640 ) — ( 12,640 )
Issuance of common stock for stock-based compensation awards 63,064 — 2,149 ( 2,205 ) — — ( 56 )
Stock-based compensation expense — — — 3,374 — — 3,374
Balance at June 30, 2024 56,367,924 $ 296,483 $ ( 97,534 ) $ 1,304,782 $ 1,005,086 $ ( 154,116 ) $ 2,354,701
Net income — — — — $ 72,455 $ 72,455
Other comprehensive income — — — — — 25,022 25,022
Comprehensive income 97,477
Cash dividends ($ 0.22 per share)
— — — — ( 14,217 ) — ( 14,217 )
Common stock issued in public offering 7,187,500 35,938 — 181,062 — — 217,000
Issuance of common stock for stock-based compensation awards 8,604 — 283 ( 439 ) — — ( 156 )
Stock-based compensation expense — — — 3,273 — — 3,273
Balance at September 30, 2024 63,564,028 $ 332,421 $ ( 97,251 ) $ 1,488,678 $ 1,063,324 $ ( 129,094 ) $ 2,658,078
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Common Stock Treasury Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive 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
See Notes to Consolidated Financial Statements.
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Renasant Corporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
(In Thousands)
Nine Months Ended September 30,
2024 2023
Operating activities
Net income $ 150,710 $ 116,554
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses 6,673 13,075
Depreciation, amortization and accretion 23,780 26,723
Deferred income tax expense (benefit) 2,494 ( 1,231 )
Proceeds from sale of MSR 23,011 —
Gain on sale of MSR ( 3,472 ) —
Gain on sale of insurance agency ( 53,349 ) —
Funding of mortgage loans held for sale ( 1,053,190 ) ( 1,057,277 )
Proceeds from sales of mortgage loans held for sale 954,133 934,761
Gains on sales of mortgage loans held for sale ( 14,233 ) ( 12,639 )
Losses on sales of securities — 22,438
Debt prepayment benefit ( 56 ) —
Losses on sales of premises and equipment 11 8
Stock-based compensation expense 10,639 10,264
Increase in other assets ( 8,108 ) ( 30,741 )
(Decrease) increase in other liabilities ( 1,712 ) 26,189
Net cash provided by operating activities 37,331 48,124
Investing activities
Purchases of securities available for sale ( 60,656 ) ( 9,646 )
Proceeds from sales of securities available for sale 177,185 488,981
Proceeds from call/maturities of securities available for sale 66,310 124,150
Proceeds from call/maturities of securities held to maturity 76,170 83,945
Net increase in loans ( 283,266 ) ( 607,335 )
Purchases of premises and equipment ( 10,408 ) ( 16,394 )
Proceeds from sales of premises and equipment 339 —
Net cash received from sale of insurance agency 55,333 —
Net change in FHLB stock 2,443 20,794
Proceeds from sales of other assets 1,466 2,833
Other, net 656 1,844
Net cash provided by investing activities 25,572 89,172
Financing activities
Net decrease in noninterest-bearing deposits ( 53,874 ) ( 824,559 )
Net increase in interest-bearing deposits 486,840 1,494,703
Net decrease in short-term borrowings ( 198,845 ) ( 604,570 )
Repayment of long-term debt ( 245 ) —
Cash paid for dividends ( 39,510 ) ( 37,706 )
Proceeds from equity offering 217,000 —
Net cash provided by financing activities 411,366 27,868
Net increase in cash and cash equivalents 474,269 165,164
Cash and cash equivalents at beginning of period 801,351 575,992
Cash and cash equivalents at end of period $ 1,275,620 $ 741,156
Supplemental disclosures
Cash paid for interest $ 286,930 $ 153,732
Cash paid for income taxes $ 27,412 $ 30,922
Noncash transactions:
Transfers of loans to other real estate owned $ 3,286 $ 10,073
Recognition of operating right-of-use assets $ 2,503 $ 3,077
Recognition of operating lease liabilities $ 2,503 $ 3,077
See Notes to Consolidated Financial Statements.
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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”). On July 1, 2024, the Bank sold substantially all of the assets of Renasant Insurance, Inc. Through its subsidiaries, the Company offers a diversified range of financial, wealth management and fiduciary services to its retail and commercial customers from offices located throughout the Southeast and offers factoring and asset-based lending on a nationwide basis.
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, 2023 filed with the Securities and Exchange Commission (the “SEC”) on February 23, 2024.
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 (“FASB”) issued Accounting Standards Update (“ASU”) 2023-02, “Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method” (“ASU 2023-02”) , which permits reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. ASU 2023-02 was effective on January 1, 2024. The adoption of this accounting pronouncement did not have an impact on the Company’s historical financial statements but could influence the Company’s decisions with respect to investments in certain tax credits prospectively.
In October 2023, FASB issued ASU 2023-06, “Disclosure Improvements” (“ASU 2023-06”), which amends the disclosure requirements related to various subtopics in the FASB Accounting Standards Codification (the “Codification”). ASU 2023-06 adds a number of disclosure requirements to the Codification in response to the SEC initiative to update and simplify disclosure requirements. ASU 2023-06 is to be applied prospectively, and early adoption is prohibited. For SEC reporting entities, the effective dates will be the respective effective dates of the SEC’s removal of the related disclosure requirements from Regulation S-X or Regulation S-K. If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entities. ASU 2023-06 is not expected to have significant impact on the Company’s financial statements.
In November 2023, FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which amends the disclosure requirements related to segment reporting primarily through enhanced disclosure about significant segment expenses and by requiring disclosure of segment information on an annual and interim basis. ASU 2023-07 was effective January 1, 2024 and did not have a significant impact on our financial statements or segment disclosures.
In December 2023, FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which enhances the transparency and decision usefulness of income tax disclosures. ASU 2023-09 will require disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. Entities will also be required to disclose income/(loss) from continuing operations before income tax expense/(benefit) disaggregated between domestic and foreign, as well as income tax expense/(benefit) from continuing operations disaggregated by federal, state and foreign. ASU 2023-09 is effective January 1, 2025 and is not expected to have a significant impact on our financial statements.
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Note 2 – Securities
(In Thousands, Except Number of Securities)
The amortized cost and fair value of securities available for sale were as follows as of the dates presented in the tables below.
There was no allowance for credit losses allocated to any of the Company’s available for sale securities as of September 30, 2024 or December 31, 2023.
Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair
Value
September 30, 2024
Obligations of states and political subdivisions $ 20,310 $ 130 $ ( 1,878 ) $ 18,562
Residential mortgage backed securities:
Government agency mortgage backed securities 191,650 374 ( 19,177 ) 172,847
Government agency collateralized mortgage obligations 408,364 — ( 71,481 ) 336,883
Commercial mortgage backed securities:
Government agency mortgage backed securities 6,010 — ( 466 ) 5,544
Government agency collateralized mortgage obligations 137,474 192 ( 19,224 ) 118,442
Other debt securities 114,637 605 ( 2,676 ) 112,566
$ 878,445 $ 1,301 $ ( 114,902 ) $ 764,844
Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair
Value
December 31, 2023
Obligations of states and political subdivisions $ 36,374 $ 119 $ ( 1,883 ) $ 34,610
Residential mortgage backed securities:
Government agency mortgage backed securities 301,400 172 ( 24,968 ) 276,604
Government agency collateralized mortgage obligations 485,164 — ( 85,883 ) 399,281
Commercial mortgage backed securities:
Government agency mortgage backed securities 6,029 — ( 637 ) 5,392
Government agency collateralized mortgage obligations 161,299 24 ( 21,965 ) 139,358
Other debt securities 72,383 109 ( 4,458 ) 68,034
$ 1,062,649 $ 424 $ ( 139,794 ) $ 923,279
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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
September 30, 2024
Obligations of states and political subdivisions $ 285,450 $ 38 $ ( 34,861 ) $ 250,627
Residential mortgage backed securities
Government agency mortgage backed securities 386,654 14 ( 11,742 ) 374,926
Government agency collateralized mortgage obligations 363,095 — ( 23,736 ) 339,359
Commercial mortgage backed securities:
Government agency mortgage backed securities 16,966 — ( 2,404 ) 14,562
Government agency collateralized mortgage obligations 43,966 — ( 6,326 ) 37,640
Other debt securities 54,432 — ( 2,578 ) 51,854
$ 1,150,563 $ 52 $ ( 81,647 ) $ 1,068,968
Allowance for credit losses - held to maturity securities ( 32 )
Held to maturity securities, net of allowance for credit losses $ 1,150,531
Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair
Value
December 31, 2023
Obligations of states and political subdivisions $ 288,154 $ 74 $ ( 33,688 ) $ 254,540
Residential mortgage backed securities
Government agency mortgage backed securities 426,264 — ( 20,314 ) 405,950
Government agency collateralized mortgage obligations 387,208 — ( 31,670 ) 355,538
Commercial mortgage backed securities:
Government agency mortgage backed securities 16,983 — ( 2,972 ) 14,011
Government agency collateralized mortgage obligations 44,514 — ( 6,977 ) 37,537
Other debt securities 58,373 — ( 4,119 ) 54,254
$ 1,221,496 $ 74 $ ( 99,740 ) $ 1,121,830
Allowance for credit losses - held to maturity securities ( 32 )
Held to maturity securities, net of allowance for credit losses $ 1,221,464
Securities sold during the nine months ended September 30, 2024 and 2023 are presented in the tables below. With respect to the securities sold during the first nine months ended September 30, 2024, the Company intended to sell these securities as of December 31, 2023, and completed the sale in January 2024. Therefore, the Company impaired the securities and recognized the loss in net income as of December 31, 2023. There were no securities sold during the third quarters of 2024 or 2023.
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Carrying Value Immediately Prior to Sale Net Proceeds Impairment (Recognized in December 2023)
Nine months ended September 30, 2024
Obligations of states and political subdivisions $ 12,301 $ 11,360 $ ( 941 )
Residential mortgage backed securities:
Government agency mortgage backed securities 107,389 95,922 ( 11,467 )
Government agency collateralized mortgage obligations 48,300 43,990 ( 4,310 )
Commercial mortgage backed securities:
Government agency collateralized mortgage obligations 28,547 25,913 ( 2,634 )
$ 196,537 $ 177,185 $ ( 19,352 )
Carrying Value Immediately Prior to Sale Net Proceeds Impairment
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 )
At September 30, 2024 and December 31, 2023, securities with a carrying value of $ 796,621 and $ 880,715 , respectively, were pledged to secure government, public and trust deposits. Securities with a carrying value of $ 27,542 and $ 14,329 were pledged as collateral for short-term borrowings and derivative instruments at September 30, 2024 and December 31, 2023, respectively.
The amortized cost and fair value of securities at September 30, 2024 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because issuers may call or prepay obligations with or without call or prepayment penalties.
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Held to Maturity Available for Sale
Amortized
Cost Fair
Value Amortized
Cost Fair
Value
Due within one year $ 1,308 $ 1,293 $ 998 $ 1,046
Due after one year through five years 6,268 5,963 42,107 42,171
Due after five years through ten years 139,202 125,714 35,012 32,414
Due after ten years 193,104 169,511 50,312 49,462
Residential mortgage backed securities:
Government agency mortgage backed securities 386,654 374,926 191,650 172,847
Government agency collateralized mortgage obligations 363,095 339,359 408,364 336,883
Commercial mortgage backed securities:
Government agency mortgage backed securities 16,966 14,562 6,010 5,544
Government agency collateralized mortgage obligations 43,966 37,640 137,474 118,442
Other debt securities — — 6,518 6,035
$ 1,150,563 $ 1,068,968 $ 878,445 $ 764,844
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
The following tables present the age of gross unrealized losses and fair value by investment category for which an allowance for credit losses has not been recorded as of the dates presented:
Less than 12 Months 12 Months or More Total
# Fair
Value Unrealized
Losses # Fair
Value Unrealized
Losses # Fair
Value Unrealized
Losses
Available for Sale:
September 30, 2024
Obligations of states and political subdivisions — $ — $ — 7 $ 13,278 $ ( 1,878 ) 7 $ 13,278 $ ( 1,878 )
Residential mortgage backed securities:
Government agency mortgage backed securities 2 3,914 ( 61 ) 34 152,229 ( 19,116 ) 36 156,143 ( 19,177 )
Government agency collateralized mortgage obligations — — — 37 336,883 ( 71,481 ) 37 336,883 ( 71,481 )
Commercial mortgage backed securities:
Government agency mortgage backed securities — — — 2 5,543 ( 466 ) 2 5,543 ( 466 )
Government agency collateralized mortgage obligations — — — 25 107,597 ( 19,224 ) 25 107,597 ( 19,224 )
Other debt securities — — — 18 34,337 ( 2,676 ) 18 34,337 ( 2,676 )
Total 2 $ 3,914 $ ( 61 ) 123 $ 649,867 $ ( 114,841 ) 125 $ 653,781 $ ( 114,902 )
December 31, 2023
Obligations of states and political subdivisions 3 $ 2,914 $ ( 2 ) 9 $ 15,198 $ ( 1,881 ) 12 $ 18,112 $ ( 1,883 )
Residential mortgage backed securities:
Government agency mortgage backed securities 1 806 ( 25 ) 35 166,963 ( 24,943 ) 36 167,769 ( 24,968 )
Government agency collateralized mortgage obligations — — — 37 354,574 ( 85,883 ) 37 354,574 ( 85,883 )
Commercial mortgage backed securities:
Government agency mortgage backed securities — — — 2 5,392 ( 637 ) 2 5,392 ( 637 )
Government agency collateralized mortgage obligations — — — 25 108,575 ( 21,965 ) 25 108,575 ( 21,965 )
Other debt securities 2 3,099 ( 195 ) 19 35,072 ( 4,263 ) 21 38,171 ( 4,458 )
Total 6 $ 6,819 $ ( 222 ) 127 $ 685,774 $ ( 139,572 ) 133 $ 692,593 $ ( 139,794 )
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Less than 12 Months 12 Months or More Total
# Fair
Value Unrealized
Losses # Fair
Value Unrealized
Losses # Fair
Value Unrealized
Losses
Held to Maturity:
September 30, 2024
Obligations of states and political subdivisions 1 $ 2,370 $ ( 10 ) 127 $ 246,559 $ ( 34,851 ) 128 $ 248,929 $ ( 34,861 )
Residential mortgage backed securities:
Government agency mortgage backed securities — — — 69 357,350 ( 11,742 ) 69 357,350 ( 11,742 )
Government agency collateralized mortgage obligations — — — 18 339,359 ( 23,736 ) 18 339,359 ( 23,736 )
Commercial mortgage backed securities:
Government agency mortgage backed securities — — — 1 14,562 ( 2,404 ) 1 14,562 ( 2,404 )
Government agency collateralized mortgage obligations — — — 9 37,640 ( 6,326 ) 9 37,640 ( 6,326 )
Other debt securities — — — 10 51,854 ( 2,578 ) 10 51,854 ( 2,578 )
Total 1 $ 2,370 $ ( 10 ) 234 $ 1,047,324 $ ( 81,637 ) 235 $ 1,049,694 $ ( 81,647 )
December 31, 2023
Obligations of states and political subdivisions 2 $ 2,807 $ ( 25 ) 126 $ 249,995 $ ( 33,663 ) 128 $ 252,802 $ ( 33,688 )
Residential mortgage backed securities:
Government agency mortgage backed securities — — — 70 405,950 ( 20,314 ) 70 405,950 ( 20,314 )
Government agency collateralized mortgage obligations — — — 18 355,538 ( 31,670 ) 18 355,538 ( 31,670 )
Commercial mortgage backed securities:
Government agency mortgage backed securities — — — 1 14,011 ( 2,972 ) 1 14,011 ( 2,972 )
Government agency collateralized mortgage obligations — — — 9 37,537 ( 6,977 ) 9 37,537 ( 6,977 )
Other debt securities — — — 10 54,254 ( 4,119 ) 10 54,254 ( 4,119 )
Total 2 $ 2,807 $ ( 25 ) 234 $ 1,117,285 $ ( 99,715 ) 236 $ 1,120,092 $ ( 99,740 )
The Company evaluates its available for sale investment securities in an unrealized loss position on a quarterly basis. If the Company intends to sell the security or it is more likely than not that it will be required to sell before recovery, the entire unrealized loss is recorded as a loss within noninterest income in the Consolidated Statements of Income along with a corresponding adjustment to the amortized cost basis of the security. If the Company does not intend to sell the security and it is not more likely than not that it will be required to sell the security before recovery of its amortized cost basis, the Company evaluates if any of the unrealized loss is related to a potential credit loss. The amount related to credit loss, if any, is recognized in earnings as a provision for credit loss and a corresponding allowance for credit losses is established; each is calculated as the difference between the estimate of the discounted future contractual cash flows and the amortized cost basis of the security. A number of qualitative and quantitative factors are considered by management in the estimate of the discounted future contractual cash flows, including the financial condition of the underlying issuer, current and projected deferrals or defaults and credit ratings by nationally recognized statistical rating agencies. The remaining difference between the fair value and the amortized cost basis of the security is considered the amount related to other market factors and is recognized in other comprehensive income, net of tax.
As of September 30, 2024, the Company does not intend to sell any of the securities in an unrealized loss position, and it is not more likely than not that the Company will be required to sell any such security prior to the recovery of its amortized cost basis, which may be maturity. Furthermore, more than 90% of available for sale securities have the explicit or implicit backing of the federal government. Performance of these securities has been in line with broader market price performance, indicating that increases in market-based, risk-free rates, and not credit-related factors, are driving losses. When determining the fair value of
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Notes to Consolidated Financial Statements (Unaudited)
the contractual cash flows for municipal and corporate securities, the Company considers historical experience with credit sensitive securities, current market conditions, the financial condition of the underlying issuer, current credit ratings, ratings changes and outlook, explicit and implicit guarantees, or insurance programs. Based upon its review of these factors as of September 30, 2024, the Company determined that all such losses resulted from factors not deemed credit-related. As a result, no credit-related impairment was recognized in current earnings, and all unrealized losses for available for sale securities were recorded in other comprehensive income (loss). See Note 12, “Other Comprehensive Income” for more information on the Company’s unrealized losses on securities.
The allowance for credit losses on held to maturity securities was $ 32 at September 30, 2024 and December 31, 2023. The Company monitors the credit quality of debt securities held to maturity using bond investment grades assigned by nationally recognized statistical ratings agencies. Updated investment grades are obtained as they become available from agencies. As of September 30, 2024, all of the amortized cost of debt securities held to maturity were rated A or higher by the ratings agencies.
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:
September 30,
2024 December 31, 2023
Commercial, financial, agricultural $ 1,804,961 $ 1,871,821
Lease financing 103,005 122,807
Real estate – construction:
Residential 258,356 269,616
Commercial 940,482 1,063,781
Total real estate – construction 1,198,838 1,333,397
Real estate – 1-4 family mortgage:
Primary 2,409,912 2,422,482
Home equity 537,372 522,688
Rental/investment 390,029 373,755
Land development 102,725 120,994
Total real estate – 1-4 family mortgage 3,440,038 3,439,919
Real estate – commercial mortgage:
Owner-occupied 1,845,791 1,648,961
Non-owner occupied 4,045,666 3,733,174
Land development 103,695 104,415
Total real estate – commercial mortgage 5,995,152 5,486,550
Installment loans to individuals 90,500 103,523
Gross loans 12,632,494 12,358,017
Unearned income ( 4,846 ) ( 6,787 )
Loans, net of unearned income $ 12,627,648 $ 12,351,230
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
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Notes to Consolidated Financial Statements (Unaudited)
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.
The following tables provide an aging of past due accruing and nonaccruing loans, segregated by class, as of the dates presented:
Accruing Loans Nonaccruing Loans
30-89 Days
Past Due 90 Days
or More
Past Due Current
Loans Total
Loans 30-89 Days
Past Due 90 Days
or More
Past Due Current
Loans Total
Loans Total
Loans
September 30, 2024
Commercial, financial, agricultural $ 333 $ 309 $ 1,799,604 $ 1,800,246 $ 120 $ 720 $ 3,875 $ 4,715 $ 1,804,961
Lease financing — — 102,391 102,391 — 614 — 614 103,005
Real estate – construction:
Residential 653 1,168 256,396 258,217 — — 139 139 258,356
Commercial — — 940,482 940,482 — — — — 940,482
Total real estate – construction 653 1,168 1,196,878 1,198,699 — — 139 139 1,198,838
Real estate – 1-4 family mortgage:
Primary 8,902 — 2,345,934 2,354,836 7,742 27,460 19,874 55,076 2,409,912
Home equity 3,414 — 530,662 534,076 731 1,235 1,330 3,296 537,372
Rental/investment 315 17 388,787 389,119 18 752 140 910 390,029
Land development — — 102,703 102,703 22 — — 22 102,725
Total real estate – 1-4 family mortgage 12,631 17 3,368,086 3,380,734 8,513 29,447 21,344 59,304 3,440,038
Real estate – commercial mortgage:
Owner-occupied 2,397 3,822 1,833,784 1,840,003 — 843 4,945 5,788 1,845,791
Non-owner occupied 442 — 4,005,280 4,005,722 — 1,054 38,890 39,944 4,045,666
Land development 356 — 100,170 100,526 — 15 3,154 3,169 103,695
Total real estate – commercial mortgage 3,195 3,822 5,939,234 5,946,251 — 1,912 46,989 48,901 5,995,152
Installment loans to individuals 711 35 89,555 90,301 52 57 90 199 90,500
Unearned income — — ( 4,846 ) ( 4,846 ) — — — — ( 4,846 )
Loans, net of unearned income $ 17,523 $ 5,351 $ 12,490,902 $ 12,513,776 $ 8,685 $ 32,750 $ 72,437 $ 113,872 $ 12,627,648
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Accruing Loans Nonaccruing Loans
30-89 Days
Past Due 90 Days
or More
Past Due Current
Loans Total
Loans 30-89 Days
Past Due 90 Days
or More
Past Due Current
Loans Total
Loans Total
Loans
December 31, 2023
Commercial, financial, agricultural $ 1,098 $ 483 $ 1,864,441 $ 1,866,022 $ 1,310 $ 1,296 $ 3,193 $ 5,799 $ 1,871,821
Lease financing 687 — 122,120 122,807 — — — — 122,807
Real estate – construction:
Residential — — 269,616 269,616 — — — — 269,616
Commercial — — 1,063,781 1,063,781 — — — — 1,063,781
Total real estate – construction — — 1,333,397 1,333,397 — — — — 1,333,397
Real estate – 1-4 family mortgage:
Primary 33,679 — 2,344,629 2,378,308 9,454 19,394 15,326 44,174 2,422,482
Home equity 3,004 — 516,835 519,839 987 868 994 2,849 522,688
Rental/investment 9 58 371,508 371,575 43 1,786 351 2,180 373,755
Land development 206 — 120,769 120,975 — 19 — 19 120,994
Total real estate – 1-4 family mortgage 36,898 58 3,353,741 3,390,697 10,484 22,067 16,671 49,222 3,439,919
Real estate – commercial mortgage:
Owner-occupied 4,867 — 1,640,721 1,645,588 131 1,904 1,338 3,373 1,648,961
Non-owner occupied 9,161 — 3,714,239 3,723,400 6,740 — 3,034 9,774 3,733,174
Land development 90 — 104,025 104,115 — 259 41 300 104,415
Total real estate – commercial mortgage 14,118 — 5,458,985 5,473,103 6,871 2,163 4,413 13,447 5,486,550
Installment loans to individuals 1,230 13 101,932 103,175 13 4 331 348 103,523
Unearned income — — ( 6,787 ) ( 6,787 ) — — — — ( 6,787 )
Loans, net of unearned income $ 54,031 $ 554 $ 12,227,829 $ 12,282,414 $ 18,678 $ 25,530 $ 24,608 $ 68,816 $ 12,351,230
Certain Modifications to Borrowers Experiencing Financial Difficulty
Certain modifications of loans made to borrowers experiencing financial difficulty in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay (including extension of the amortization period), or a term extension, excluding covenant waivers and modification of contingent acceleration clauses, are required to be disclosed in accordance with ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”). All modifications for the three and nine months ended September 30, 2024 and 2023 and which met the disclosure criteria in ASU 2022-02 were performing in accordance with their modified terms at September 30, 2024 and 2023, respectively. Unused commitments totaled $ 464 at September 30, 2024. There were $ 721 in unused commitments at September 30, 2023. Upon the Company’s determination that a modification has been subsequently deemed uncollectible, the loan, or portion of the loan, is charged off, the amortized cost basis of the loan is reduced by the uncollectible amount, and the allowance for credit losses is adjusted accordingly. See Note 4, “Allowance for Credit Losses,” for more information on the allowance for credit losses.
The following tables present the amortized cost basis of loans that were experiencing financial difficulty, modified during the three and nine months ended September 30, 2024 and the nine months ended September 30, 2023, and required to be disclosed under ASU 2022-02, by class of financing receivable and by type of modification. There were no modifications for the three months ended September 30, 2023. The percentage of the amortized cost basis for each class of disclosed modifications as compared to the amortized cost basis of each class of loans is also presented below.
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Notes to Consolidated Financial Statements (Unaudited)
Three Months Ended September 30, 2024
Term Extension Payment Delay Interest Rate Reduction and Payment Delay Interest Rate Reduction, Term Extension and Payment Delay Total % Total Loans by Class
Commercial, financial, agricultural $ — $ 53 $ — $ — $ 53 — %
Real estate – construction:
Residential — — — — — —
Real estate – 1-4 family mortgage:
Primary 23 1,620 206 — 1,849 0.08
Home equity 106 — — — 106 0.02
Rental/investment 36 548 — — 584 0.15
Total real estate – 1-4 family mortgage 165 2,168 206 — 2,539 0.07
Real estate – commercial mortgage:
Owner-occupied 1,086 206 — — 1,292 0.07
Installment loans to individuals — — — 3 3 —
Loans, net of unearned income $ 1,251 $ 2,427 $ 206 $ 3 $ 3,887 0.03 %
Nine Months Ended September 30, 2024
Interest Rate Reduction Term Extension Payment Delay Term Extension and Payment Delay Interest Rate Reduction and Term Extension Interest Rate Reduction, Term Extension and Payment Delay Interest Rate Reduction and Payment Delay Total % Total Loans by Class
Commercial, financial, agricultural $ 1,097 $ 69 $ 53 $ — $ — $ 125 $ — $ 1,344 0.07 %
Real estate – construction:
Residential — — — — — — — — — %
Real estate – 1-4 family mortgage:
Primary — 56 1,806 442 — — 206 2,510 0.10
Home equity — 106 — — — — — 106 0.02
Rental/investment — 36 548 — — — — 584 0.15
Total real estate – 1-4 family mortgage — 198 2,354 442 — — 206 3,200 0.09
Real estate – commercial mortgage:
Owner-occupied 6,946 1,266 206 — 255 — — 8,673 0.47
Non-owner occupied — 2,431 83 — — — — 2,514 0.06
Total real estate – commercial mortgage 6,946 3,697 289 — 255 — — 11,187 0.19
Installment loans to individuals — — 13 — — 3 — 16 0.02
Loans, net of unearned income $ 8,043 $ 3,964 $ 2,709 $ 442 $ 255 $ 128 $ 206 $ 15,747 0.12 %
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Notes to Consolidated Financial Statements (Unaudited)
Nine Months Ended September 30, 2023
Interest Rate Reduction Term Extension Payment Delay Total % Total Loans by Class
Commercial, financial, agricultural $ — $ 1,209 $ — $ 1,209 0.07 %
Real estate – construction:
Residential — 3,751 — 3,751 1.25
Real estate – 1-4 family mortgage:
Home equity 7 — — 7 —
Real estate – commercial mortgage:
Owner-occupied 149 96 277 522 0.03
Non-owner occupied 1,008 — — 1,008 0.03
Total real estate – commercial mortgage 1,157 96 277 1,530 0.03 %
Loans, net of unearned income $ 1,164 $ 5,056 $ 277 $ 6,497 0.05 %
The following tables present the weighted average financial effect of loan modifications requiring disclosure under ASU 2022-02 by class of financing receivable for the periods presented.
Three months ended September 30, 2024
Loan Type Financial Effect
Term Extension
Real estate – 1-4 family mortgage - Primary Extended the term 90 months
Real estate – 1-4 family mortgage - Home Equity Extended the term 16 months
Real estate – 1-4 family mortgage - Rental/investment Extended the term 6 months
Real Estate - Commercial Mortgage - Owner Occupied Extended the term 8 months
Payment Delay
Commercial, financial, agricultural Delayed the payment 8 months
Real estate – 1-4 family mortgage - Primary Delayed the payment 19 months
Real estate – 1-4 family mortgage - Rental/investment Delayed the payment 131 months
Real Estate - Commercial Mortgage - Owner Occupied Delayed the payment 40 months
Combination - Interest Rate Reduction and Payment Delay
Real estate – 1-4 family mortgage - Primary Reduced the interest rate 25 basis points and delayed the payment 51 months
Combination - Interest Rate Reduction, Term Extension and Payment Delay
Installment loans to individuals Reduced the interest rate 460 basis points and extended the term and delayed the payment 54 months
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Notes to Consolidated Financial Statements (Unaudited)
Nine months ended September 30, 2024
Loan Type Financial Effect
Interest Rate Reduction
Commercial, financial, agricultural Reduced the interest rate 39 basis points
Real Estate - Commercial Mortgage - Owner Occupied Reduced the interest rate 47 basis points
Term Extension
Commercial, financial, agricultural Extended the term 8 months
Real estate – 1-4 family mortgage - Primary Extended the term 51 months
Real estate – 1-4 family mortgage - Home Equity Extended the term 16 months
Real estate – 1-4 family mortgage - Rental/investment Extended the term 6 months
Real Estate - Commercial Mortgage - Owner Occupied Extended the term 8 months
Real Estate - Commercial Mortgage - Non-owner Occupied Extended the term 8 months
Payment Delay
Commercial, financial, agricultural Delayed the payment 8 months
Real estate – 1-4 family mortgage - Primary Delayed the payment 22 months
Real estate – 1-4 family mortgage - Rental/investment Delayed the payment 131 months
Real Estate - Commercial Mortgage - Owner Occupied Delayed the payment 40 months
Real Estate - Commercial Mortgage - Non-owner Occupied Delayed the payment 9 months
Installment loans to individuals Delayed the payment 17 months
Combination - Term Extension and Payment Delay
Commercial, financial, agricultural Extended the term and delayed the payment 42 months
Installment loans to individuals Extended the term and delayed the payment 61 months
Combination - Interest Rate Reduction and Term Extension
Real Estate - Commercial Mortgage - Owner Occupied Reduced the interest rate 275 basis points and extended the term 21 months
Combination - Interest Rate Reduction and Payment Delay
Real Estate - Commercial Mortgage - Owner Occupied Reduced the interest rate 25 basis points and delayed the payment 51 months
Combination - Interest Rate Reduction, Term Extension and Payment Delay
Commercial, financial, agricultural Reduced the interest rate 181 basis points and extended the term and delayed the payment 59 months
Installment loans to individuals Reduced the interest rate 460 basis points and extended the term and delayed the payment 54 months
Nine months ended September 30, 2023
Loan Type Financial Effect
Interest Rate Reduction
Real estate – 1-4 family mortgage - Home Equity Reduced the interest rate 300 basis points
Real Estate - Commercial Mortgage - Owner Occupied Reduced the interest rate 68 basis points
Real Estate - Commercial Mortgage - Non-owner Occupied Reduced the interest rate 12 basis points
Term Extension
Commercial, financial, agricultural Extended the term 2 months
Real estate – Construction - Residential Extended the term 5 months
Real Estate - Commercial Mortgage - Owner Occupied Extended the term 8 months
Payment Delay
Real Estate - Commercial Mortgage - Owner Occupied Delayed the payment 3 months
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Notes to Consolidated Financial Statements (Unaudited)
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. 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 that, 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
2024 2023 2022 2021 2020 Prior Revolving Loans Revolving Loans Converted to Term Total
Loans
September 30, 2024
Commercial, Financial, Agricultural $ 169,011 $ 245,027 $ 242,343 $ 120,226 $ 81,822 $ 72,830 $ 861,207 $ 7,519 $ 1,799,985
Pass 163,622 242,583 227,798 119,696 80,650 68,705 837,371 2,878 1,743,303
Special Mention 311 1,905 163 242 766 394 16,290 — 20,071
Substandard 5,078 539 14,382 288 406 3,731 7,546 4,641 36,611
Lease Financing Receivables $ 11,869 $ 26,194 $ 42,225 $ 9,702 $ 4,221 $ 3,948 $ — $ — $ 98,159
Pass 11,869 24,236 36,482 9,494 2,911 3,592 — — 88,584
Special Mention — 1,638 5,075 208 1,310 356 — — 8,587
Substandard — 320 668 — — — — — 988
Real Estate - Construction $ 248,163 $ 225,018 $ 578,234 $ 50,368 $ — $ 355 $ 19,743 $ — $ 1,121,881
Residential 141,680 36,481 1,619 — — 355 1,264 — 181,399
Pass 139,320 35,554 1,378 — — 355 1,264 — 177,871
Special Mention 2,360 — — — — — — — 2,360
Substandard — 927 241 — — — — — 1,168
Commercial 106,483 188,537 576,615 50,368 — — 18,479 — 940,482
Pass 106,483 176,223 551,568 50,368 — — 18,479 — 903,121
Special Mention — 12,314 25,047 — — — — — 37,361
Substandard — — — — — — — — —
Real Estate - 1-4 Family Mortgage $ 121,751 $ 118,893 $ 134,553 $ 72,236 $ 36,236 $ 32,963 $ 33,958 $ 1,625 $ 552,215
Primary 6,563 5,954 7,817 4,397 2,754 6,883 1,133 826 36,327
Pass 6,563 5,714 7,650 4,016 2,754 6,212 1,133 826 34,868
Special Mention — — — — — 22 — — 22
Substandard — 240 167 381 — 649 — — 1,437
Home Equity — 1,019 10 952 — 41 29,106 176 31,304
Pass — 1,019 10 952 — — 28,910 176 31,067
Special Mention — — — — — — 196 — 196
Substandard — — — — — 41 — — 41
Rental/Investment 64,721 86,085 115,122 64,506 33,144 23,468 2,043 623 389,712
Pass 64,538 85,783 114,977 64,176 32,492 22,774 2,043 532 387,315
Special Mention 41 58 45 — 28 — — — 172
Substandard 142 244 100 330 624 694 — 91 2,225
Land Development 50,467 25,835 11,604 2,381 338 2,571 1,676 — 94,872
Pass 50,366 25,835 10,935 2,381 338 2,571 1,676 — 94,102
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Notes to Consolidated Financial Statements (Unaudited)
Term Loans Amortized Cost Basis by Origination Year
2024 2023 2022 2021 2020 Prior Revolving Loans Revolving Loans Converted to Term Total
Loans
Special Mention 101 — 669 — — — — — 770
Substandard — — — — — — — — —
Real Estate - Commercial Mortgage $ 726,397 $ 714,248 $ 1,646,532 $ 1,072,648 $ 651,594 $ 901,046 $ 227,711 $ 43,122 $ 5,983,298
Owner-Occupied 266,261 270,115 358,245 294,918 198,790 340,790 113,477 3,070 1,845,666
Pass 260,485 262,019 345,552 293,087 196,996 334,473 113,477 2,815 1,808,904
Special Mention 5,641 4,723 7,121 1,156 135 2,865 — — 21,641
Substandard 135 3,373 5,572 675 1,659 3,452 — 255 15,121
Non-Owner Occupied 429,400 432,159 1,264,254 767,551 449,641 554,679 108,085 39,875 4,045,644
Pass 429,285 430,887 1,196,381 760,711 445,962 471,557 108,085 31,808 3,874,676
Special Mention — 1,272 54,807 5,471 1,149 9,655 — — 72,354
Substandard 115 — 13,066 1,369 2,530 73,467 — 8,067 98,614
Land Development 30,736 11,974 24,033 10,179 3,163 5,577 6,149 177 91,988
Pass 30,669 11,929 20,495 9,968 3,032 5,538 6,149 177 87,957
Special Mention 67 24 146 33 — — — — 270
Substandard — 21 3,392 178 131 39 — — 3,761
Installment loans to individuals $ 7 $ — $ — $ — $ — $ — $ — $ — $ 7
Pass 7 — — — — — — — 7
Special Mention — — — — — — — — —
Substandard — — — — — — — — —
Total loans subject to risk rating $ 1,277,198 $ 1,329,380 $ 2,643,887 $ 1,325,180 $ 773,873 $ 1,011,142 $ 1,142,619 $ 52,266 $ 9,555,545
Pass 1,263,207 1,301,782 2,513,226 1,314,849 765,135 915,777 1,118,587 39,212 9,231,775
Special Mention 8,521 21,934 93,073 7,110 3,388 13,292 16,486 — 163,804
Substandard 5,470 5,664 37,588 3,221 5,350 82,073 7,546 13,054 159,966
Term Loans Amortized Cost Basis by Origination Year
2023 2022 2021 2020 2019 Prior Revolving Loans Revolving Loans Converted to Term Total
Loans
December 31, 2023
Commercial, Financial, Agricultural $ 312,902 $ 289,264 $ 162,535 $ 98,894 $ 51,162 $ 38,518 $ 883,302 $ 19,440 $ 1,856,017
Pass 311,312 288,249 161,902 97,771 50,936 32,169 870,792 19,338 1,832,469
Special Mention 893 364 10 294 — 291 914 63 2,829
Substandard 697 651 623 829 226 6,058 11,596 39 20,719
Lease Financing Receivables $ 32,842 $ 49,628 $ 12,317 $ 13,553 $ 5,969 $ 1,700 $ — $ — $ 116,009
Pass 32,842 47,050 12,317 11,735 5,443 1,395 — — 110,782
Watch — 2,578 — 1,818 526 305 — — 5,227
Substandard — — — — — — — — —
Real Estate - Construction $ 320,889 $ 581,201 $ 308,442 $ 16,066 $ — $ 1,823 $ 1,225 $ — $ 1,229,646
Residential 149,399 12,883 1,989 — — 369 1,225 — 165,865
Pass 146,535 10,147 1,989 — — 369 1,225 — 160,265
Special Mention 2,415 — — — — — — — 2,415
Substandard 449 2,736 — — — — — — 3,185
Commercial 171,490 568,318 306,453 16,066 — 1,454 — — 1,063,781
Pass 142,917 568,318 306,453 16,066 — 1,454 — — 1,035,208
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Term Loans Amortized Cost Basis by Origination Year
2023 2022 2021 2020 2019 Prior Revolving Loans Revolving Loans Converted to Term Total
Loans
Special Mention 28,573 — — — — — — — 28,573
Substandard — — — — — — — — —
Real Estate - 1-4 Family Mortgage $ 145,568 $ 176,724 $ 100,757 $ 41,542 $ 19,753 $ 30,783 $ 30,889 $ 1,834 $ 547,850
Primary 8,512 8,729 6,194 3,943 1,792 8,573 3,272 915 41,930
Pass 8,134 8,511 5,859 3,943 1,781 8,140 3,272 915 40,555
Special Mention 183 — — — — 34 — — 217
Substandard 195 218 335 — 11 399 — — 1,158
Home Equity 1,107 10 996 — — 16 20,628 74 22,831
Pass 1,107 10 996 — — 1 20,628 — 22,742
Special Mention — — — — — — — — —
Substandard — — — — — 15 — 74 89
Rental/Investment 89,760 129,241 75,457 37,171 17,817 18,721 4,678 845 373,690
Pass 89,135 128,939 74,330 35,388 16,670 18,109 4,678 583 367,832
Special Mention 63 47 256 4 50 42 — — 462
Substandard 562 255 871 1,779 1,097 570 — 262 5,396
Land Development 46,189 38,744 18,110 428 144 3,473 2,311 — 109,399
Pass 46,151 38,744 18,110 409 144 3,372 2,311 — 109,241
Special Mention — — — — — 101 — — 101
Substandard 38 — — 19 — — — — 57
Real Estate - Commercial Mortgage $ 716,844 $ 1,572,099 $ 1,111,564 $ 717,571 $ 429,783 $ 723,344 $ 176,617 $ 26,252 $ 5,474,074
Owner-Occupied 264,589 336,491 321,491 214,365 164,931 283,517 60,200 3,247 1,648,831
Pass 260,831 325,575 318,391 212,368 159,552 275,088 56,453 2,977 1,611,235
Special Mention 562 1,147 890 107 3,385 2,953 25 — 9,069
Substandard 3,196 9,769 2,210 1,890 1,994 5,476 3,722 270 28,527
Non-Owner Occupied 432,769 1,195,500 776,264 499,290 260,355 434,541 111,609 22,821 3,733,149
Pass 428,740 1,194,864 761,476 494,971 223,264 398,188 111,609 13,774 3,626,886
Special Mention 1,339 454 14,422 4,111 14,001 12,677 — — 47,004
Substandard 2,690 182 366 208 23,090 23,676 — 9,047 59,259
Land Development 19,486 40,108 13,809 3,916 4,497 5,286 4,808 184 92,094
Pass 18,996 36,479 13,567 3,775 4,479 5,046 4,776 184 87,302
Special Mention 432 3,334 36 — — — — — 3,802
Substandard 58 295 206 141 18 240 32 — 990
Installment loans to individuals $ — $ — $ — $ — $ 3 $ — $ — $ — $ 3
Pass — — — — 3 — — — 3
Special Mention — — — — — — — — —
Substandard — — — — — — — — —
Total loans subject to risk rating $ 1,529,045 $ 2,668,916 $ 1,695,615 $ 887,626 $ 506,670 $ 796,168 $ 1,092,033 $ 47,526 $ 9,223,599
Pass 1,486,700 2,646,886 1,675,390 876,426 462,272 743,331 1,075,744 37,771 9,004,520
Special Mention 34,460 7,924 15,614 6,334 17,962 16,403 939 63 99,699
Substandard 7,885 14,106 4,611 4,866 26,436 36,434 15,350 9,692 119,380
The following tables present the performing status of the Company’s loan portfolio not subject to risk rating as of the dates presented:
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Term Loans Amortized Cost Basis by Origination Year
2024 2023 2022 2021 2020 Prior Revolving Loans Revolving Loans Converted to Term Total
Loans
September 30, 2024
Commercial, Financial, Agricultural $ — $ — $ — $ — $ — $ 4,976 $ — $ — $ 4,976
Performing Loans — — — — — 4,976 — — 4,976
Non-Performing Loans — — — — — — — — —
Lease Financing Receivables $ — $ — $ — $ — $ — $ — $ — $ — $ —
Performing Loans — — — — — — — — —
Non-Performing Loans — — — — — — — — —
Real Estate - Construction $ 21,699 $ 33,062 $ 14,302 $ 7,882 $ — $ — $ 6 $ 6 $ 76,957
Residential 21,699 33,062 14,302 7,882 — — 6 6 76,957
Performing Loans 21,560 33,062 14,302 7,882 — — 6 6 76,818
Non-Performing Loans 139 — — — — — — — 139
Commercial — — — — — — — — —
Performing Loans — — — — — — — — —
Non-Performing Loans — — — — — — — — —
Real Estate - 1-4 Family Mortgage $ 109,075 $ 343,841 $ 720,081 $ 500,107 $ 288,465 $ 419,693 $ 493,820 $ 12,741 $ 2,887,823
Primary 107,560 341,372 718,634 498,299 287,735 419,085 — 900 2,373,585
Performing Loans 107,526 337,695 704,371 491,964 278,247 398,518 — 900 2,319,221
Non-Performing Loans 34 3,677 14,263 6,335 9,488 20,567 — — 54,364
Home Equity — — — — — 407 493,820 11,841 506,068
Performing Loans — — — — — 402 493,672 8,697 502,771
Non-Performing Loans — — — — — 5 148 3,144 3,297
Rental/Investment — — — 258 — 59 — — 317
Performing Loans — — — 258 — 59 — — 317
Non-Performing Loans — — — — — — — — —
Land Development 1,515 2,469 1,447 1,550 730 142 — — 7,853
Performing Loans 1,515 2,457 1,447 1,540 730 142 — — 7,831
Non-Performing Loans — 12 — 10 — — — — 22
Real Estate - Commercial Mortgage $ 2,400 $ 2,615 $ 1,965 $ 2,663 $ 1,637 $ 574 $ — $ — $ 11,854
Owner-Occupied — — — — 123 2 — — 125
Performing Loans — — — — 123 2 — — 125
Non-Performing Loans — — — — — — — — —
Non-Owner Occupied — — — — 22 — — — 22
Performing Loans — — — — 22 — — — 22
Non-Performing Loans — — — — — — — — —
Land Development 2,400 2,615 1,965 2,663 1,492 572 — — 11,707
Performing Loans 2,400 2,615 1,852 2,663 1,491 572 — — 11,593
Non-Performing Loans — — 113 — 1 — — — 114
Installment loans to individuals $ 27,812 $ 14,761 $ 9,498 $ 4,397 $ 1,607 $ 19,116 $ 13,195 $ 107 $ 90,493
Performing Loans 27,758 14,726 9,463 4,384 1,607 19,040 13,175 107 90,260
Non-Performing Loans 54 35 35 13 — 76 20 — 233
Total loans not subject to risk rating $ 160,986 $ 394,279 $ 745,846 $ 515,049 $ 291,709 $ 444,359 $ 507,021 $ 12,854 $ 3,072,103
Performing Loans 160,759 390,555 731,435 508,691 282,220 423,711 506,853 9,710 3,013,934
Non-Performing Loans 227 3,724 14,411 6,358 9,489 20,648 168 3,144 58,169
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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
December 31, 2023
Commercial, Financial, Agricultural $ — $ — $ — $ — $ — $ 15,804 $ — $ — $ 15,804
Performing Loans — — — — — 15,804 — — 15,804
Non-Performing Loans — — — — — — — — —
Lease Financing Receivables $ — $ — $ — $ — $ — $ 11 $ — $ — $ 11
Performing Loans — — — — — 11 — — 11
Non-Performing Loans — — — — — — — — —
Real Estate - Construction $ 48,003 $ 41,070 $ 14,158 $ — $ — $ — $ 490 $ 30 $ 103,751
Residential 48,003 41,070 14,158 — — — 490 30 103,751
Performing Loans 48,003 41,070 14,158 — — — 490 30 103,751
Non-Performing Loans — — — — — — — — —
Commercial — — — — — — — — —
Performing Loans — — — — — — — — —
Non-Performing Loans — — — — — — — — —
Real Estate - 1-4 Family Mortgage $ 339,406 $ 731,088 $ 536,544 $ 312,015 $ 133,852 $ 339,842 $ 493,515 $ 5,807 $ 2,892,069
Primary 334,103 727,993 534,667 311,199 133,433 339,111 — 46 2,380,552
Performing Loans 333,751 720,759 528,383 302,065 128,859 322,677 — 46 2,336,540
Non-Performing Loans 352 7,234 6,284 9,134 4,574 16,434 — — 44,012
Home Equity — — 111 — — 470 493,515 5,761 499,857
Performing Loans — — 111 — — 466 491,849 4,584 497,010
Non-Performing Loans — — — — — 4 1,666 1,177 2,847
Rental/Investment — — — — — 65 — — 65
Performing Loans — — — — — 65 — — 65
Non-Performing Loans — — — — — — — — —
Land Development 5,303 3,095 1,766 816 419 196 — — 11,595
Performing Loans 5,303 3,095 1,766 816 419 196 — — 11,595
Non-Performing Loans — — — — — — — — —
Real Estate - Commercial Mortgage $ 3,640 $ 2,674 $ 3,054 $ 1,890 $ 902 $ 316 $ — $ — $ 12,476
Owner-Occupied — — — 126 — 4 — — 130
Performing Loans — — — 126 — 4 — — 130
Non-Performing Loans — — — — — — — — —
Non-Owner Occupied — — — 25 — — — — 25
Performing Loans — — — 25 — — — — 25
Non-Performing Loans — — — — — — — — —
Land Development 3,640 2,674 3,054 1,739 902 312 — — 12,321
Performing Loans 3,640 2,383 3,054 1,736 902 312 — — 12,027
Non-Performing Loans — 291 — 3 — — — — 294
Installment loans to individuals $ 35,274 $ 17,322 $ 7,121 $ 2,827 $ 9,786 $ 17,276 $ 13,769 $ 145 $ 103,520
Performing Loans 35,112 17,229 7,121 2,824 9,754 17,206 13,769 145 103,160
Non-Performing Loans 162 93 — 3 32 70 — — 360
Total loans not subject to risk rating $ 426,323 $ 792,154 $ 560,877 $ 316,732 $ 144,540 $ 373,249 $ 507,774 $ 5,982 $ 3,127,631
Performing Loans 425,809 784,536 554,593 307,592 139,934 356,741 506,108 4,805 3,080,118
Non-Performing Loans 514 7,618 6,284 9,140 4,606 16,508 1,666 1,177 47,513
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
The following tables disclose gross charge-offs by year of origination for the nine months ended September 30, 2024 and year ended December 31, 2023, respectively:
September 30, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Total Charge-offs
Commercial, financial, agricultural $ — $ 33 $ 152 $ 34 $ 4 $ 251 $ 408 $ 882
Lease financing — 336 306 — — — — 642
Real estate – 1-4 family mortgage:
Primary — 12 137 35 110 83 — 377
Home equity — — 49 — — 75 — 124
Rental/investment — — — — — 45 — 45
Total real estate – 1-4 family mortgage — 12 186 35 110 203 — 546
Real estate – commercial mortgage:
Owner-occupied — — 37 — — — — 37
Non-owner occupied — — — — — 5,693 — 5,693
Land development — — — — — 7 — 7
Total real estate – commercial mortgage — — 37 — — 5,700 — 5,737
Installment loans to individuals 6 73 63 6 1 1,229 1 1,379
Loans, net of unearned income $ 6 $ 454 $ 744 $ 75 $ 115 $ 7,383 $ 409 $ 9,186
December 31, 2023 2023 2022 2021 2020 2019 Prior Revolving Loans Total Charge-offs
Commercial, financial, agricultural $ 898 $ 1,909 $ 235 $ 131 $ 635 $ 4,165 $ 865 $ 8,838
Lease financing 883 273 248 72 48 — — 1,524
Real estate – construction:
Residential — 57 — — — — — 57
Real estate – 1-4 family mortgage:
Primary — 17 — — — 92 — 109
Home equity — — — — 25 90 — 115
Rental/investment — — 91 72 10 20 — 193
Total real estate – 1-4 family mortgage — 17 91 72 35 202 — 417
Real estate – commercial mortgage:
Owner-occupied — — — — — 582 — 582
Non-owner occupied — — — — — 4,986 — 4,986
Total real estate – commercial mortgage — — — — — 5,568 — 5,568
Installment loans to individuals 29 45 43 35 7 2,477 — 2,636
Loans, net of unearned income $ 1,810 $ 2,301 $ 617 $ 310 $ 725 $ 12,412 $ 865 $ 19,040
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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 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, 2023.
The Company has made an accounting policy election to exclude accrued interest from the measurement of the allowance for credit losses in the Company’s loan portfolio. As of September 30, 2024 and December 31, 2023, the Company had accrued interest receivable for loans of $ 55,542 and $ 54,804 , respectively, which is recorded in the “Other assets” line item on the Consolidated Balance Sheets. Although the Company made the election to exclude accrued interest from the measurement of the allowance for credit losses, the Company did have an allowance for credit losses on interest deferred as part of the loan deferral program established in 2020 in response to the COVID-19 pandemic of $ 758 and $ 1,245 as of September 30, 2024 and December 31, 2023, respectively.
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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
Three Months Ended September 30, 2024
Allowance for credit losses:
Beginning balance $ 44,951 $ 18,896 $ 47,421 $ 77,125 $ 2,515 $ 8,963 $ 199,871
Charge-offs ( 347 ) — ( 256 ) ( 10 ) ( 642 ) ( 649 ) ( 1,904 )
Recoveries 514 — 57 11 8 611 1,201
Net (charge-offs) recoveries 167 — ( 199 ) 1 ( 634 ) ( 38 ) ( 703 )
Provision for (recovery of) credit losses on loans ( 2,065 ) ( 2,240 ) ( 3 ) 4,961 503 54 1,210
Ending balance $ 43,053 $ 16,656 $ 47,219 $ 82,087 $ 2,384 $ 8,979 $ 200,378
Nine Months Ended September 30, 2024
Allowance for credit losses:
Beginning balance $ 43,980 $ 18,612 $ 47,283 $ 77,020 $ 2,515 $ 9,168 $ 198,578
Charge-offs ( 882 ) ( 546 ) ( 5,737 ) ( 642 ) ( 1,379 ) ( 9,186 )
Recoveries 1,385 130 116 26 1,181 2,838
Net (charge-offs) recoveries 503 — ( 416 ) ( 5,621 ) ( 616 ) ( 198 ) ( 6,348 )
Provision for (recovery of) credit losses on loans ( 1,430 ) ( 1,956 ) 352 10,688 485 9 8,148
Ending balance $ 43,053 $ 16,656 $ 47,219 $ 82,087 $ 2,384 $ 8,979 $ 200,378
Period-End Amount Allocated to:
Individually evaluated $ 8,805 $ — $ — $ 4,878 $ — $ 270 $ 13,953
Collectively evaluated 34,248 16,656 47,219 77,209 2,384 8,709 186,425
Ending balance $ 43,053 $ 16,656 $ 47,219 $ 82,087 $ 2,384 $ 8,979 $ 200,378
Loans:
Individually evaluated $ 15,370 $ 241 $ 7,815 $ 47,321 $ 614 $ 270 $ 71,631
Collectively evaluated 1,789,591 1,198,597 3,432,223 5,947,831 97,545 90,230 12,556,017
Ending balance $ 1,804,961 $ 1,198,838 $ 3,440,038 $ 5,995,152 $ 98,159 $ 90,500 $ 12,627,648
Nonaccruing loans with no allowance for credit losses $ 122 $ — $ 6,868 $ 25,016 $ 614 $ — $ 32,620
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Renasant Corporation and Subsidiaries
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
Three Months Ended September 30, 2023
Allowance for credit losses:
Beginning balance $ 41,310 $ 19,125 $ 46,434 $ 75,667 $ 2,480 $ 9,375 $ 194,391
Charge-offs ( 2,252 ) — ( 130 ) — ( 641 ) ( 607 ) ( 3,630 )
Recoveries 690 48 181 208 2 568 1,697
Net (charge-offs) recoveries ( 1,562 ) 48 51 208 ( 639 ) ( 39 ) ( 1,933 )
Provision for (recovery of) credit losses on loans 4,696 483 ( 686 ) ( 642 ) 1,514 ( 50 ) 5,315
Ending balance $ 44,444 $ 19,656 $ 45,799 $ 75,233 $ 3,355 $ 9,286 $ 197,773
Nine Months Ended September 30, 2023
Allowance for credit losses:
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 ( 26 ) — — — — — ( 26 )
Charge-offs ( 7,720 ) ( 57 ) ( 345 ) ( 5,512 ) ( 641 ) ( 1,997 ) ( 16,272 )
Recoveries 2,689 48 375 697 13 1,884 5,706
Net (charge-offs) recoveries ( 5,031 ) ( 9 ) 30 ( 4,815 ) ( 628 ) ( 113 ) ( 10,566 )
Provision for (recovery of) credit losses on loans 5,246 551 1,042 8,250 1,520 ( 334 ) 16,275
Ending balance $ 44,444 $ 19,656 $ 45,799 $ 75,233 $ 3,355 $ 9,286 $ 197,773
Period-End Amount Allocated to:
Individually evaluated $ 11,194 $ — $ 77 $ 1,260 $ 856 $ 270 $ 13,657
Collectively evaluated 33,250 19,656 45,722 73,973 2,499 9,016 184,116
Ending balance $ 44,444 $ 19,656 $ 45,799 $ 75,233 $ 3,355 $ 9,286 $ 197,773
Loans:
Individually evaluated $ 20,996 $ — $ 13,007 $ 18,403 $ 1,047 $ 270 $ 53,723
Collectively evaluated 1,798,895 1,407,364 3,385,869 5,294,763 119,677 107,732 12,114,300
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 $ 1,987 $ — $ 11,441 $ 11,226 $ 191 $ — $ 24,845
The Company recorded a provision for credit losses on loans of $ 1,210 during the third quarter of 2024, as compared to a provision for credit losses on loans of $ 5,315 recorded in the third quarter of 2023. 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 for credit losses on loans of $ 1,210 in the third quarter of 2024 was primarily driven by loan growth and changes in credit metrics that influence the Company’s expectations of future losses, including but not limited to the balance of nonperforming loans, underlying collateral values, and historical levels of charge-offs, all considered in the context of the existing balance of the allowance for credit losses.
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
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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, 2023.
The following tables provide a roll-forward of the allowance for credit losses on unfunded loan commitments for the periods presented.
Three Months Ended September 30, 2024 2023
Allowance for credit losses on unfunded loan commitments:
Beginning balance $ 15,718 $ 17,618
Recovery of credit losses on unfunded loan commitments ( 275 ) ( 700 )
Ending balance $ 15,443 $ 16,918
Nine Months Ended September 30, 2024 2023
Allowance for credit losses on unfunded loan commitments:
Beginning balance $ 16,918 $ 20,118
Recovery of credit losses on unfunded loan commitments ( 1,475 ) ( 3,200 )
Ending balance $ 15,443 $ 16,918
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:
September 30, 2024 December 31, 2023
Residential real estate $ 2,774 $ 1,211
Commercial real estate 6,336 8,407
Residential land development 19 4
Commercial land development 7 —
Total $ 9,136 $ 9,622
Changes in the Company’s OREO were as follows:
Total
OREO
Balance at January 1, 2024 $ 9,622
Transfers of loans 3,286
Impairments ( 67 )
Dispositions ( 1,323 )
Other ( 2,382 )
Balance at September 30, 2024 $ 9,136
At September 30, 2024 and December 31, 2023, the amortized cost of loans secured by Real Estate - 1-4 Family Mortgage in the process of foreclosure was $ 1,324 and $ 395 , 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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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2024 2023 2024 2023
Repairs and maintenance $ 62 $ 51 $ 273 $ 95
Property taxes and insurance 24 20 76 142
Impairments — 10 67 18
Net gains on OREO sales ( 28 ) ( 200 ) ( 143 ) ( 289 )
Rental income ( 2 ) ( 1 ) ( 5 ) ( 5 )
Total $ 56 $ ( 120 ) $ 268 $ ( 39 )
Note 6 – Goodwill and Other Intangible Assets
(In Thousands)
The carrying amounts of goodwill by operating segments for the nine months ended September 30, 2024 are set forth in the table below.
Community Banks Insurance Total
Balance at January 1, 2024 $ 988,898 $ 2,767 $ 991,665
Sale of the insurance agency — ( 2,767 ) ( 2,767 )
Balance at September 30, 2024 $ 988,898 $ — $ 988,898
The following table provides a summary of finite-lived intangible assets as of the dates presented:
Gross Carrying
Amount Accumulated
Amortization Net Carrying
Amount
September 30, 2024
Core deposit intangibles $ 82,492 $ ( 71,046 ) $ 11,446
Customer relationship intangible 7,670 ( 3,878 ) 3,792
Total finite-lived intangible assets $ 90,162 $ ( 74,924 ) $ 15,238
December 31, 2023
Core deposit intangibles $ 82,492 $ ( 68,383 ) $ 14,109
Customer relationship intangible 7,670 ( 2,984 ) 4,686
Total finite-lived intangible assets $ 90,162 $ ( 71,367 ) $ 18,795
Current year amortization expense for finite-lived intangible assets is presented in the table below.
Three Months Ended Nine Months Ended
September 30, September 30,
2024 2023 2024 2023
Amortization expense for:
Core deposit intangibles $ 862 $ 977 $ 2,664 $ 3,103
Customer relationship intangible 298 334 894 1,003
Total intangible amortization $ 1,160 $ 1,311 $ 3,558 $ 4,106
The estimated amortization expense of finite-lived intangible assets for the year ending December 31, 2024 and the succeeding four years is summarized as follows:
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Core Deposit Intangibles Customer Relationship Intangible Total
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
2028 1,836 483 2,319
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 nine months ended September 30, 2024 or 2023.
During the first quarter of 2024, the Company sold MSRs relating to mortgage loans having an aggregate unpaid principal balance of $ 2,013,235 to a third party for net proceeds of $ 23,011 , resulting in a gain of $ 3,472 .
Changes in the Company’s MSRs were as follows:
Balance at January 1, 2024 $ 91,688
Sale of MSRs ( 19,539 )
Capitalization 6,860
Amortization ( 7,019 )
Balance at September 30, 2024 $ 71,990
Data and key economic assumptions related to the Company’s MSRs are as follows as of the dates presented:
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2024 December 31, 2023
Unpaid principal balance $ 5,938,135 $ 7,826,182
Weighted-average prepayment speed (CPR) 10.71 % 8.77 %
Estimated impact of a 10% increase $ ( 3,081 ) $ ( 2,653 )
Estimated impact of a 20% increase ( 5,946 ) ( 5,457 )
Discount rate 11.08 % 10.85 %
Estimated impact of a 10% increase $ ( 3,399 ) $ ( 4,753 )
Estimated impact of a 20% increase ( 6,552 ) ( 9,149 )
Weighted-average coupon interest rate 4.22 % 3.88 %
Weighted-average servicing fee (basis points) 36.04 33.24
Weighted-average remaining maturity (in years) 6.90 7.50
The Company recorded servicing fees of $ 3,594 and $ 4,335 for the three months ended September 30, 2024 and 2023, respectively, and servicing fees of $ 11,463 and $ 13,275 for the nine months ended September 30, 2024 and 2023, 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
Three Months Ended Three Months Ended
September 30, September 30,
2024 2023 2024 2023
Interest cost $ 227 $ 249 $ 5 $ 6
Expected return on plan assets ( 249 ) ( 309 ) — —
Recognized actuarial loss (gain) 129 131 ( 23 ) ( 15 )
Net periodic benefit cost (return) $ 107 $ 71 $ ( 18 ) $ ( 9 )
Pension Benefits Other Benefits
Nine Months Ended Nine Months Ended
September 30, September 30,
2024 2023 2024 2023
Interest cost $ 681 $ 746 $ 16 $ 17
Expected return on plan assets ( 745 ) ( 927 ) — —
Recognized actuarial loss (gain) 387 393 ( 70 ) ( 46 )
Net periodic benefit cost (return) $ 323 $ 212 $ ( 54 ) $ ( 29 )
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Incentive Compensation Plans
The Company maintains a long-term equity compensation plan that provides for the grant of stock options and the award of restricted stock. There were no stock options granted or outstanding, nor compensation expense associated with options recorded, during the nine months ended September 30, 2024 or 2023.
The Company also awards performance-based restricted stock to executives and other officers and employees and time-based restricted stock to non-employee directors, executives, and other officers and employees.
The following table summarizes the changes in restricted stock as of and for the nine months ended September 30, 2024:
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 169,575 $ 36.38 779,564 $ 36.20
Awarded 95,048 33.44 348,918 32.87
Vested — — ( 296,350 ) 35.53
Cancelled — — ( 28,751 ) 33.90
Nonvested at end of period 264,623 $ 35.32 803,381 $ 35.08
During the nine months ended September 30, 2024, the Company reissued 224,629 shares from treasury in connection with awards of restricted stock. The Company recorded total stock-based compensation expense of $ 3,273 and $ 3,424 for the three months ended September 30, 2024 and 2023, respectively, and $ 10,639 and $ 10,264 for the nine months ended September 30, 2024 and 2023, 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:
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Balance Sheet September 30, 2024 December 31, 2023
Location Notional Amount Fair Value Notional Amount Fair Value
Derivative assets:
Interest rate contracts Other Assets $ 830,409 $ 18,561 $ 532,279 $ 13,567
Interest rate lock commitments Other Assets 121,577 1,620 61,957 1,483
Forward commitments Other Assets 80,000 177 20,000 43
Totals $ 1,031,986 $ 20,358 $ 614,236 $ 15,093
Derivative liabilities:
Interest rate contracts Other Liabilities $ 833,761 $ 18,613 $ 535,725 $ 13,567
Interest rate lock commitments Other Liabilities 8,296 41 2,292 —
Forward commitments Other Liabilities 199,000 1,554 165,000 2,605
Totals $ 1,041,057 $ 20,208 $ 703,017 $ 16,172
Gains and losses included in the Consolidated Statements of Income related to the Company’s derivative financial instruments were as follows as of the dates presented:
Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
Interest rate contracts:
Included in interest income on loans $ 3,958 $ 1,327 $ 10,388 $ 4,873
Interest rate lock commitments:
Included in mortgage banking income ( 261 ) ( 247 ) 127 304
Forward commitments
Included in mortgage banking income ( 1,167 ) 918 1,184 3,342
Total $ 2,530 $ 1,998 $ 11,699 $ 8,519
Derivatives designated as cash flow hedges
Cash flow hedge relationships mitigate exposure to the variability of future cash flows 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 and loans, respectively. The swap hedging strategy converts the variable interest rate on the forecasted borrowings to a fixed interest rate. The collar hedging strategy limits the benefit to interest income when rates exceed the cap but protects interest income from interest rate fluctuations below the floor strike rate.
The following table provides a summary of the Company’s derivatives designated as cash flow hedges as of the dates presented:
Balance Sheet September 30, 2024 December 31, 2023
Location Notional Amount Fair Value Notional Amount Fair Value
Derivative assets:
Interest rate swaps Other Assets $ 130,000 $ 18,373 $ 130,000 $ 21,486
Interest rate collars Other Assets 450,000 1,232 200,000 572
Total $ 580,000 $ 19,605 $ 330,000 $ 22,058
Derivative liabilities:
Interest rate collars Other Liabilities $ — $ — $ 250,000 $ 384
Totals $ — $ — $ 250,000 $ 384
Changes in fair value of cash flow hedges are, to the extent that the hedging relationship is effective, recorded as other comprehensive income and are subsequently recognized in earnings at the same time that the hedged item is recognized in earnings. The ineffective portions of the changes in fair value of the hedging instruments are immediately recognized in earnings. The assessment of the effectiveness of the hedging relationship is evaluated under the hypothetical derivative method.
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
There were no ineffective portions for the nine months ended September 30, 2024 or 2023. The impact on other comprehensive income for the nine months ended September 30, 2024 and 2023 is discussed in Note 12, “Other Comprehensive Income.”
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:
Balance Sheet September 30, 2024 December 31, 2023
Location Notional Amount Fair Value Notional Amount Fair Value
Derivative liabilities:
Interest rate swaps Other Liabilities $ 100,000 $ 14,347 $ 100,000 $ 17,052
The following table presents the effects of the Company’s fair value hedge relationships on the Consolidated Statements of Income for the periods presented:
Amount of Gain (Loss) Recognized in Income
Income Statement Three Months Ended September 30, Nine Months Ended September 30,
Location 2024 2023 2024 2023
Derivative liabilities:
Interest rate swaps - subordinated notes Interest Expense $ 4,042 $ ( 2,688 ) $ 2,705 $ ( 2,106 )
Derivative liabilities - hedged items:
Interest rate swaps - subordinated notes Interest Expense $ ( 4,042 ) $ 2,688 $ ( 2,705 ) $ 2,106
The following table presents the amounts that were recorded in the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges as of the dates presented:
Carrying Amount of the Hedged Liability Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Liability
Balance Sheet Location September 30, 2024 December 31, 2023 September 30, 2024 December 31, 2023
Long-term debt $ 84,626 $ 81,791 $ 14,348 $ 17,052
Offsetting
Certain financial instruments, including derivatives, may be eligible for offset in the consolidated balance sheet when the “right of offset” exists or when the instruments are subject to an enforceable master netting agreement, which includes the right of the non-defaulting party or non-affected party to offset recognized amounts, including collateral posted with the counterparty, to determine a net receivable or net payable upon early termination of the agreement. Certain of the Company’s derivative instruments are subject to master netting agreements; however, the Company has not elected to offset such financial instruments in the Consolidated Balance Sheets. The following table presents the Company’s gross derivative positions as recognized in the Consolidated Balance Sheets as well as the net derivative positions, including collateral pledged to the extent the application of such collateral did not reduce the net derivative liability position below zero, had the Company elected to offset those instruments subject to an enforceable master netting agreement:
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Offsetting Derivative Assets Offsetting Derivative Liabilities
September 30,
2024 December 31, 2023 September 30,
2024 December 31, 2023
Gross amounts recognized $ 24,514 $ 29,284 $ 20,661 $ 26,425
Gross amounts offset in the Consolidated Balance Sheets — — — —
Net amounts presented in the Consolidated Balance Sheets 24,514 29,284 20,661 26,425
Gross amounts not offset in the Consolidated Balance Sheets
Financial instruments 19,285 23,863 19,285 23,863
Financial collateral pledged — — 810 1,074
Net amounts $ 5,229 $ 5,421 $ 566 $ 1,488
Note 10 – Income Taxes
For the nine months ended September 30, 2024 and 2023, the effective tax rate was 22.80 % and 19.77 %, respectively. The year-over-year increase in the Company’s effective tax rate was driven primarily by taxable gains from the sale of its insurance business, taxable effects from certain restructurings of the investment portfolio, and nondeductible expense related to the Company’s potential acquisition of The First Bancshares, Inc. The Company calculated the provision for income taxes by applying the estimated annual effective tax rate to year-to-date pre-tax income, and adjusting for discrete items that occurred during the period.
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 at fair value. Assets and liabilities that are required to be carried at fair value on a recurring basis include securities available for sale and derivative instruments. The Company has elected to carry mortgage loans held for sale at fair value on a recurring basis as permitted under the guidance in ASC 825, “Financial Instruments” (“ASC 825”).
The following methods and assumptions are used by the Company to estimate the fair values of the Company’s financial assets and liabilities that are measured on a recurring basis:
Securities available for sale : Securities available for sale consist primarily of debt securities, such as obligations of U.S. Government agencies and corporations, obligations of states and political subdivisions and mortgage-backed securities. Where quoted market prices in active markets are available, securities are classified within Level 1 of the fair value hierarchy. If quoted prices from active markets are not available, fair values are based on quoted market prices for similar instruments traded in active markets, quoted market prices for identical or similar instruments traded in markets that are not active, or model-based valuation techniques where all significant assumptions are observable in the market. Such instruments are classified within Level 2 of the fair value hierarchy. When assumptions used in model-based valuation techniques are not observable in the market, the assumptions used by management reflect estimates of assumptions used by other market participants in determining fair value. When there is limited transparency around the inputs to the valuation, the instruments are classified within Level 3 of the fair value hierarchy.
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
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
September 30, 2024
Financial assets:
Securities available for sale $ — $ 764,844 $ — $ 764,844
Derivative instruments — 39,963 — 39,963
Mortgage loans held for sale in loans held for sale — 291,735 — 291,735
Total financial assets $ — $ 1,096,542 $ — $ 1,096,542
Financial liabilities:
Derivative instruments: $ — $ 34,555 $ — $ 34,555
Level 1 Level 2 Level 3 Totals
December 31, 2023
Financial assets:
Securities available for sale $ — $ 923,279 $ — $ 923,279
Derivative instruments — 37,151 — 37,151
Mortgage loans held for sale in loans held for sale — 179,756 — 179,756
Total financial assets $ — $ 1,140,186 $ — $ 1,140,186
Financial liabilities:
Derivative instruments $ — $ 33,608 $ — $ 33,608
The Company reviews fair value hierarchy classifications on a quarterly basis. Changes in the Company’s ability to observe inputs to the valuation may cause reclassification of certain assets or liabilities within the fair value hierarchy. Transfers between levels of the hierarchy are deemed to have occurred at the end of period. There were no such transfers between levels of the fair value hierarchy during the nine months ended September 30, 2024.
For the nine months ended September 30, 2024 and 2023, 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:
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
September 30, 2024 Level 1 Level 2 Level 3 Totals
Individually evaluated loans, net of allowance for credit losses $ — $ — $ 42,248 $ 42,248
OREO — — 29 29
Total $ — $ — $ 42,277 $ 42,277
December 31, 2023 Level 1 Level 2 Level 3 Totals
Individually evaluated loans, net of allowance for credit losses $ — $ — $ 21,303 $ 21,303
Total $ — $ — $ 21,303 $ 21,303
The following methods and assumptions are used by the Company to estimate the fair values of the Company’s 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 $ 50,898 and $ 22,328 at September 30, 2024 and December 31, 2023, respectively, and a specific reserve for these loans of $ 8,650 and $ 1,025 was included in the allowance for credit losses as of such dates.
Other real estate owned : OREO is comprised of commercial and residential real estate obtained in partial or total satisfaction of loan obligations. OREO acquired in settlement of indebtedness is recorded at the fair value of the real estate less estimated costs to sell. Subsequently, it may be necessary to record nonrecurring fair value adjustments for declines in fair value. Fair value, when recorded, is determined based on appraisals by qualified licensed appraisers and adjusted for management’s estimates of costs to sell. Accordingly, values for OREO are classified as Level 3.
The following table presents OREO measured at fair value on a nonrecurring basis that was still held on the Consolidated Balance Sheets as of September 30, 2024. There was no impairment recognized during 2023 of OREO assets still held in the Consolidated Balance Sheets as of December 31, 2023.
September 30,
2024
Carrying amount prior to remeasurement $ 62
Impairment recognized in results of operations ( 33 )
Fair value $ 29
Mortgage servicing rights : Mortgage servicing rights are carried at the lower of amortized cost or fair value. Fair value is determined using an income approach with various assumptions including expected cash flows, market discount rates, prepayment speeds, servicing costs, and other factors. Because these factors are not all observable and include management’s assumptions, mortgage servicing rights are classified within Level 3 of the fair value hierarchy. Mortgage servicing rights were carried at amortized cost at September 30, 2024 and December 31, 2023. There were no valuation adjustments on MSRs during the nine months ended September 30, 2024 or 2023.
The following table presents information as of September 30, 2024 about significant unobservable inputs (Level 3) used in the valuation of assets measured at fair value on a nonrecurring basis:
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Financial instrument Fair
Value Valuation Technique Significant
Unobservable Inputs Range of Inputs
Individually evaluated loans, net of allowance for credit losses $ 42,248 Appraised value of collateral less estimated costs to sell Estimated costs to sell 4 - 10 %
OREO $ 29 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 of $ 1,826 and net loss of $ 256 resulting from fair value changes of these mortgage loans were recorded in income during the nine months ended September 30, 2024 and 2023, respectively. These amounts do not reflect changes in fair values of related derivative instruments used to hedge exposure to market-related risks associated with these mortgage loans. The change in fair value of both mortgage loans held for sale and the related derivative instruments are recorded in “Mortgage banking income” in the Consolidated Statements of Income.
The Company’s valuation of mortgage loans held for sale incorporates an assumption for credit risk; however, given the short-term period that the Company holds these loans, valuation adjustments attributable to instrument-specific credit risk is nominal. Interest income on mortgage loans held for sale measured at fair value is accrued as it is earned based on contractual rates and is reflected in loan interest income on the Consolidated Statements of Income.
The following table summarizes the differences between the fair value and the principal balance for mortgage loans held for sale measured at fair value as of September 30, 2024 and December 31, 2023:
Aggregate
Fair Value Aggregate
Unpaid
Principal
Balance Difference
September 30, 2024
Mortgage loans held for sale measured at fair value $ 291,735 $ 284,647 $ 7,088
December 31, 2023
Mortgage loans held for sale measured at fair value $ 179,756 $ 174,471 $ 5,285
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:
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Fair Value
As of September 30, 2024 Carrying
Value Level 1 Level 2 Level 3 Total
Financial assets
Cash and cash equivalents $ 1,275,620 $ 1,275,620 $ — $ — $ 1,275,620
Securities held to maturity 1,150,531 — 1,068,968 — 1,068,968
Securities available for sale 764,844 — 764,844 — 764,844
Loans held for sale 291,735 — 291,735 — 291,735
Loans, net 12,427,270 — — 12,051,978 12,051,978
Mortgage servicing rights 71,990 — — 88,461 88,461
Derivative instruments 39,963 — 39,963 — 39,963
Financial liabilities
Deposits $ 14,509,751 $ 11,816,487 $ 2,687,734 $ — $ 14,504,221
Short-term borrowings 108,732 108,732 — — 108,732
Junior subordinated debentures 113,681 — 98,822 — 98,822
Subordinated notes 319,496 — 286,140 — 286,140
Derivative instruments 34,555 — 34,555 — 34,555
Fair Value
As of December 31, 2023 Carrying
Value Level 1 Level 2 Level 3 Total
Financial assets
Cash and cash equivalents $ 801,351 $ 801,351 $ — $ — $ 801,351
Securities held to maturity 1,221,464 — 1,121,830 — 1,121,830
Securities available for sale 923,279 — 923,279 — 923,279
Loans held for sale 179,756 — 179,756 — 179,756
Loans, net 12,152,652 — — 11,594,363 11,594,363
Mortgage servicing rights 91,688 — — 117,664 117,664
Derivative instruments 37,151 — 37,151 — 37,151
Financial liabilities
Deposits $ 14,076,785 $ 11,381,556 $ 2,678,494 $ — $ 14,060,050
Short-term borrowings 307,577 307,577 — — 307,577
Junior subordinated debentures 112,978 — 96,435 — 96,435
Subordinated notes 316,422 — 255,192 — 255,192
Derivative instruments 33,608 — 33,608 — 33,608
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Note 12 – Other Comprehensive Income
(In Thousands)
Changes in the components of other comprehensive income, net of tax, were as follows for the periods presented:
Pre-Tax Tax Expense
(Benefit) Net of Tax
Three months ended September 30, 2024
Securities available for sale:
Unrealized holding gains on securities $ 31,313 $ 7,872 $ 23,441
Amortization of unrealized holding losses on securities transferred to the held to maturity category 3,131 800 2,331
Total securities available for sale 34,444 8,672 25,772
Derivative instruments:
Unrealized holding losses on derivative instruments ( 1,116 ) ( 288 ) ( 828 )
Total derivative instruments ( 1,116 ) ( 288 ) ( 828 )
Defined benefit pension and post-retirement benefit plans:
Amortization of net actuarial loss recognized in net periodic pension cost 106 28 78
Total defined benefit pension and post-retirement benefit plans 106 28 78
Total other comprehensive income $ 33,434 $ 8,412 $ 25,022
Three months ended September 30, 2023
Securities available for sale:
Unrealized holding losses on securities $ ( 17,175 ) $ ( 4,292 ) $ ( 12,883 )
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 ( 13,216 ) ( 3,280 ) ( 9,936 )
Derivative instruments:
Unrealized holding gains on derivative instruments 2,670 683 1,987
Total derivative instruments 2,670 683 1,987
Defined benefit pension and post-retirement benefit plans:
Amortization of net actuarial loss recognized in net periodic pension cost 116 30 86
Total defined benefit pension and post-retirement benefit plans 116 30 86
Total other comprehensive loss $ ( 10,430 ) $ ( 2,567 ) $ ( 7,863 )
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Pre-Tax Tax Expense
(Benefit) Net of Tax
Nine months ended September 30, 2024
Securities available for sale:
Unrealized holding gains on securities $ 25,769 $ 6,494 $ 19,275
Amortization of unrealized holding losses on securities transferred to the held to maturity category 9,658 2,468 7,190
Total securities available for sale 35,427 8,962 26,465
Derivative instruments:
Unrealized holding losses on derivative instruments ( 2,069 ) ( 530 ) ( 1,539 )
Total derivative instruments ( 2,069 ) ( 530 ) ( 1,539 )
Defined benefit pension and post-retirement benefit plans:
Amortization of net actuarial loss recognized in net periodic pension cost 317 81 236
Total defined benefit pension and post-retirement benefit plans 317 81 236
Total other comprehensive income $ 33,675 $ 8,513 $ 25,162
Nine months ended September 30, 2023
Securities available for sale:
Unrealized holding losses on securities $ ( 17,744 ) $ ( 4,462 ) $ ( 13,282 )
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 10,113 2,586 7,527
Total securities available for sale 14,807 3,746 11,061
Derivative instruments:
Unrealized holding losses on derivative instruments ( 2,153 ) ( 547 ) ( 1,606 )
Total derivative instruments ( 2,153 ) ( 547 ) ( 1,606 )
Defined benefit pension and post-retirement benefit plans:
Amortization of net actuarial loss recognized in net periodic pension cost 347 89 258
Total defined benefit pension and post-retirement benefit plans 347 89 258
Total other comprehensive income $ 13,001 $ 3,288 $ 9,713
The accumulated balances for each component of other comprehensive loss, net of tax, were as follows as of the dates presented:
September 30,
2024 December 31, 2023
Unrealized losses on securities $ ( 137,019 ) $ ( 163,484 )
Unrealized gains on derivative instruments 15,512 17,051
Unrecognized losses on defined benefit pension and post-retirement benefit plans obligations ( 7,587 ) ( 7,823 )
Total accumulated other comprehensive loss $ ( 129,094 ) $ ( 154,256 )
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Renasant Corporation and Subsidiaries
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
September 30,
2024 2023
Basic
Net income applicable to common stock $ 72,455 $ 41,833
Average common shares outstanding 61,217,094 56,138,618
Net income per common share - basic $ 1.18 $ 0.75
Diluted
Net income applicable to common stock $ 72,455 $ 41,833
Average common shares outstanding 61,217,094 56,138,618
Effect of dilutive stock-based compensation 415,354 385,269
Average common shares outstanding - diluted 61,632,448 56,523,887
Net income per common share - diluted $ 1.18 $ 0.74
Nine Months Ended
September 30,
2024 2023
Basic
Net income applicable to common stock $ 150,711 $ 116,554
Average common shares outstanding 57,934,806 56,085,556
Net income per common share - basic $ 2.60 $ 2.08
Diluted
Net income applicable to common stock $ 150,711 $ 116,554
Average common shares outstanding 57,934,806 56,085,556
Effect of dilutive stock-based compensation 362,748 308,401
Average common shares outstanding - diluted 58,297,554 56,393,957
Net income per common share - diluted $ 2.59 $ 2.07
Stock-based compensation awards that could potentially dilute basic net income per common share in the future that were not included in the computation of diluted net income per common share due to their anti-dilutive effect were as follows for the periods presented:
Three Months Ended
September 30,
2024 2023
Number of shares 1,000 1,000
Nine Months Ended
September 30,
2024 2023
Number of shares 1,000 24,146
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Note 14 – Regulatory Matters
(In Thousands)
The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. Capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
The Federal Reserve, the FDIC and the Office of the Comptroller of the Currency have issued guidelines governing the levels of capital that bank holding companies and banks must maintain. Those guidelines specify capital tiers, which include the following classifications:
Capital Tiers Tier 1 Capital to
Average Assets
(Leverage) Common Equity Tier 1 to
Risk - Weighted Assets Tier 1 Capital to
Risk - Weighted
Assets Total Capital to
Risk - Weighted
Assets
Well capitalized 5 % or above
6.5 % or above
8 % or above
10 % or above
Adequately capitalized 4 % or above
4.5 % or above
6 % or above
8 % or above
Undercapitalized Less than 4 %
Less than 4.5 %
Less than 6 %
Less than 8 %
Significantly undercapitalized Less than 3 %
Less than 3 %
Less than 4 %
Less than 6 %
Critically undercapitalized Tangible Equity / Total Assets less than 2 %
The following table provides the capital and risk-based capital and leverage ratios for the Company and for the Bank as of the dates presented:
September 30, 2024 December 31, 2023
Amount Ratio Amount Ratio
Renasant Corporation
Tier 1 Capital to Average Assets (Leverage) $ 1,904,006 11.32 % $ 1,578,918 9.62 %
Common Equity Tier 1 Capital to Risk-Weighted Assets 1,793,916 12.88 % 1,469,531 10.52 %
Tier 1 Capital to Risk-Weighted Assets 1,904,006 13.67 % 1,578,918 11.30 %
Total Capital to Risk-Weighted Assets 2,412,254 17.32 % 2,085,531 14.93 %
Renasant Bank
Tier 1 Capital to Average Assets (Leverage) $ 1,814,955 10.80 % $ 1,714,965 10.45 %
Common Equity Tier 1 Capital to Risk-Weighted Assets 1,814,955 13.03 % 1,714,965 12.25 %
Tier 1 Capital to Risk-Weighted Assets 1,814,955 13.03 % 1,714,965 12.25 %
Total Capital to Risk-Weighted Assets 1,989,433 14.28 % 1,888,104 13.49 %
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 .
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.
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
• For periods prior to the third quarter of 2024, the Insurance segment included a full service insurance agency offering all major lines of commercial and personal insurance through major carriers. Effective July 1, 2024, the Bank sold substantially all of the assets of its Insurance segment.
• The Wealth Management segment, through the Trust division, offers a broad range of fiduciary services including the administration (as trustee or in other fiduciary or representative capacities) of benefit plans, management of trust accounts, inclusive of personal and corporate benefit accounts, and custodial accounts, as well as accounting and money management for trust accounts. In addition, the Wealth Management segment, through the Financial Services division, provides specialized products and services to customers, which include fixed and variable annuities, mutual funds and other investment services through a third party broker-dealer.
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 Wealth
Management Other Consolidated
Three months ended September 30, 2024
Net interest income (loss) $ 137,860 $ 15 $ ( 6,877 ) $ 130,998
Provision for credit losses 935 — — 935
Noninterest income (loss) 83,244 6,447 ( 392 ) 89,299
Noninterest expense 117,035 4,511 437 121,983
Income (loss) before income taxes 103,134 1,951 ( 7,706 ) 97,379
Income tax expense (benefit) 26,867 47 ( 1,990 ) 24,924
Net income (loss) $ 76,267 $ 1,904 $ ( 5,716 ) $ 72,455
Total assets $ 17,959,839 $ 1,163 $ ( 2,162 ) $ 17,958,840
Goodwill $ 988,898 — — $ 988,898
Community
Banks Insurance Wealth
Management Other Consolidated
Three months ended September 30, 2023
Net interest income (loss) $ 133,901 $ 456 $ 16 $ ( 6,990 ) $ 127,383
Provision for credit losses 4,615 — — — 4,615
Noninterest income (loss) 28,956 3,276 6,361 ( 393 ) 38,200
Noninterest expense 100,902 2,237 4,739 491 108,369
Income (loss) before income taxes 57,340 1,495 1,638 ( 7,874 ) 52,599
Income tax expense (benefit) 12,339 387 72 ( 2,032 ) 10,766
Net income (loss) $ 45,001 $ 1,108 $ 1,566 $ ( 5,842 ) $ 41,833
Total assets $ 17,143,564 $ 39,434 $ 5,077 $ ( 6,454 ) $ 17,181,621
Goodwill $ 988,898 $ 2,767 — — $ 991,665
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Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Community
Banks Insurance Wealth
Management Other Consolidated
Nine months ended September 30, 2024
Net interest income (loss) $ 398,970 $ 942 $ 47 $ ( 20,645 ) $ 379,314
Provision for credit losses 6,673 — — — 6,673
Noninterest income (loss) 145,179 6,473 18,933 ( 1,143 ) 169,442
Noninterest expense 327,541 4,392 13,725 1,213 346,871
Income (loss) before income taxes 209,935 3,023 5,255 ( 23,001 ) 195,212
Income tax expense (benefit) 49,507 785 147 ( 5,937 ) 44,502
Net income (loss) $ 160,428 $ 2,238 $ 5,108 $ ( 17,064 ) $ 150,710
Total assets $ 17,959,839 $ — $ 1,163 $ ( 2,162 ) $ 17,958,840
Goodwill $ 988,898 $ — $ — $ — $ 988,898
Nine months ended September 30, 2023
Net interest income (loss) $ 412,070 $ 1,170 $ 52 $ ( 19,918 ) $ 393,374
Provision for credit losses 13,075 — — — 13,075
Noninterest income (loss) 66,895 9,497 17,524 ( 1,197 ) 92,719
Noninterest expense 306,666 6,346 13,473 1,257 327,742
Income (loss) before income taxes 159,224 4,321 4,103 ( 22,372 ) 145,276
Income tax expense (benefit) 33,305 1,119 72 ( 5,774 ) 28,722
Net income (loss) $ 125,919 $ 3,202 $ 4,031 $ ( 16,598 ) $ 116,554
Total assets $ 17,143,564 $ 39,434 $ 5,077 $ ( 6,454 ) $ 17,181,621
Goodwill $ 988,898 $ 2,767 $ — $ — $ 991,665
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.