RENASANT CORP 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (In Thousands, Except Share Data) This Form 10-Q may contain or incorporate by reference statements regarding Renasant Corporation (referred to herein as the “Company”, “Renasant”, “we”, “our”, or “us”) that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements preceded by, followed by or that otherwise include the words “believes,” “expects”, “projects,” “anticipates,” “intends,” “estimates,” “plans,” “potential,” “focus,” “possible,” “may increase,” “may fluctuate,” “will likely result,” and similar expressions, or future or conditional verbs such as “will,” “should,” “would” and “could,” are generally forward-looking in nature and not historical facts. Forward-looking statements include information about the Company’s future financial performance, business strategy, projected plans and objectives and are based on the current beliefs and expectations of management. The Company’s management believes these forward-looking statements are reasonable, but they are all inherently subject to significant business, economic and competitive risks and uncertainties, many of which are beyond the Company’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ from those indicated or implied in the forward-looking statements, and such differences may be material. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and, accordingly, investors should not place undue reliance on these forward-looking statements, which speak only as of the date they are made. Important factors currently known to management that could cause our actual results to differ materially from those in forward-looking statements include the following: (i) the Company’s ability to efficiently integrate acquisitions (including its recently-completed merger with The First Bancshares, Inc. (“The First”)) into its operations, retain the customers of these businesses, grow the acquired operations and realize the cost savings expected from an acquisition to the extent and in the timeframe anticipated by management (including the possibility that such cost savings will not be realized when expected, or at all, as a result of the impact of, or challenges arising from, the integration of the acquired assets and assumed liabilities into the Company, potential adverse reactions or changes to business or employee relationships, or as a result of other unexpected factors or events); (ii) potential exposure to unknown or contingent risks and liabilities we have acquired, or may acquire, or target for acquisition, including in connection with the Company’s merger with The First; (iii) the effect of economic conditions and interest rates on a national, regional or international basis; (iv) timing and success of the implementation of changes in operations to achieve enhanced earnings or effect cost savings; (v) competitive pressures in the consumer finance, commercial finance, financial services, asset management, retail banking, factoring, mortgage lending and auto lending industries; (vi) the financial resources of, and products available from, competitors; (vii) changes in laws and regulations as well as changes in accounting standards; (viii) changes in governmental and regulatory policy, whether applicable specifically to financial institutions or impacting the United States generally (such as, for example, changes in trade policy); (ix) increased scrutiny by, and/or additional regulatory requirements of, regulatory agencies as a result of the Company’s merger with The First; (x) changes in the securities and foreign exchange markets; (xi) the Company’s potential growth, including its entrance or expansion into new markets, and the need for sufficient capital to support that growth; (xii) changes in the quality or composition of the Company’s loan or investment securities portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers or issuers of investment securities, or the impact of interest rates on the value of our investment portfolio; (xiii) an insufficient allowance for credit losses as a result of inaccurate assumptions; (xiv) changes in the sources and costs of the capital we use to make loans and otherwise fund our operations, due to deposit outflows, changes in the mix of deposits and the cost and availability of borrowings; (xv) general economic, market or business conditions, including the impact of inflation; (xvi) changes in demand for loan and deposit products and other financial services; (xvii) concentrations of credit or deposit exposure; (xviii) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships; (xix) increased cybersecurity risk, including potential network breaches, business disruptions or financial losses; (xx) civil unrest, natural disasters, epidemics and other catastrophic events in the Company’s geographic area; (xxi) geopolitical conditions, including acts or threats of terrorism and actions taken by the United States or other governments in response to acts or threats of terrorism and/or military conflicts, which could impact business and economic conditions in the United States and abroad; (xxii) the impact, extent and timing of technological changes; and (xxiii) other circumstances, many of which are beyond management’s control. Management believes that the assumptions underlying the Company’s forward-looking statements are reasonable, but any of the assumptions could prove to be inaccurate. The Company undertakes no obligation, and specifically disclaims any obligation, to update or revise forward-looking statements, whether as a result of new information or to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, except as required by federal securities laws. 50 Table of Contents Financial Condition The following discussion provides details regarding the changes in significant balance sheet accounts at June 30, 2025 compared to December 31, 2024. Mergers and Acquisitions On April 1, 2025 the Company completed its merger with The First. At closing, The First merged with and into the Company, with the Company the surviving corporation in the merger; immediately thereafter, The First Bank merged with and into Renasant Bank, with Renasant Bank the surviving banking corporation in the merger. For more information, including the fair value of assets acquired and liabilities assumed, see Note 2, “Mergers and Acquisitions,” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements, in this report. Assets Total assets were $26,624,975 at June 30, 2025, compared to $18,034,868 at December 31, 2024. The acquisition of The First increased total assets $7,988,327 at April 1, 2025. Investments The securities portfolio is used to provide a source for meeting liquidity needs and to supply securities to be used in collateralizing certain deposits and certain types of borrowings. The securities portfolio also serves as an outlet to deploy excess liquidity and generate interest income rather than hold excess funds as cash. The following table shows the carrying value of our securities portfolio by investment type and the percentage of such investment type relative to the entire securities portfolio as of the dates presented: June 30, 2025 December 31, 2024 Balance Percentage of Portfolio Balance Percentage of Portfolio Obligations of states and political subdivisions $ 548,044 15.45 % $ 302,596 15.46 % Mortgage-backed securities 2,578,032 72.65 1,472,918 75.26 Other debt securities 422,260 11.90 181,643 9.28 $ 3,548,336 100.00 % $ 1,957,157 100.00 % Allowance for credit losses - held to maturity securities (32) (32) Securities, net of allowance for credit losses $ 3,548,304 $ 1,957,125 The merger with The First contributed approximately $1,457,203 to the securities portfolio at April 1, 2025. The Company purchased $946,095 and $52,679 in investment securities during the six months ended June 30, 2025 and 2024, respectively. Proceeds from maturities, calls and principal payments on securities during the first six months of 2025 totaled $165,377. Shortly after the merger with The First, certain securities from the acquired portfolio were sold at carrying value, resulting in net proceeds of $686,485. No gain or loss on sales of securities was recorded in the first half of 2025. Proceeds from the maturities, calls and principal payments on securities during the first six months of 2024 totaled $93,085. During the first quarter of 2024, the Company sold from the available for sale portfolio municipal securities, residential mortgage backed securities and commercial mortgage backed securities for net proceeds of $177,185. The Company intended to sell these securities as of December 31, 2023; therefore, the Company impaired the securities and recognized the loss in net income as of December 31, 2023. The carrying value of the securities immediately prior to the impairment was $196,537, and the impairment charge was $19,352. No loss on sales of securities was recorded in the first six months of 2024. During the third quarter of 2022, the Company transferred, at fair value, $882,927 of securities from the available for sale portfolio to the held to maturity portfolio as the Company has the intent and ability to hold these securities until their maturity. The related net unrealized losses of $99,675 (after tax losses of $74,307) remained in accumulated other comprehensive income (loss) and will be amortized over the remaining life of the securities, offsetting the related amortization of discount on the transferred securities. At June 30, 2025, the net unrealized after tax losses remaining to be amortized in accumulated other comprehensive income (loss) was $44,668. No gains or losses were recognized at the time of transfer. For more information about the Company’s security portfolio, see Note 3, “Securities,” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements, in this report. 51 Table of Contents Loans Held for Sale Loans held for sale, which consist of residential mortgage loans being held until they are sold in the secondary market, were $356,791 at June 30, 2025, as compared to $246,171 at December 31, 2024. Mortgage loans to be sold are sold either on a “best efforts” basis or under a mandatory delivery sales agreement. Under a “best efforts” sales agreement, residential real estate originations are locked in at a contractual rate with third party private investors or directly with government sponsored agencies, and the Company is obligated to sell the mortgages to such investors only if the mortgages are closed and funded. The risk we assume is conditioned upon loan underwriting and market conditions in the national mortgage market. Under a mandatory delivery sales agreement, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price and delivery date. Penalties are paid to the investor if we fail to satisfy the contract. Gains and losses are realized at the time consideration is received and all other criteria for sales treatment have been met. Our standard practice is to sell the loans within 30-40 days after the loan is funded. Although loan fees and some interest income are derived from mortgage loans held for sale, the main source of income is gains from the sale of these loans in the secondary market. Loans Total loans, excluding loans held for sale, were $18,563,447 at June 30, 2025 and $12,885,020 at December 31, 2024. The acquisition of The First increased total loans $5,196,239 at April 1, 2025. The table below sets forth the balance of loans outstanding, net of unearned income and excluding loans held for sale, by loan type and the percentage of each loan type to total loans as of the dates presented: June 30, 2025 December 31, 2024 Total Loans Percentage of Total Loans Total Loans Percentage of Total Loans Commercial, financial, agricultural $ 2,666,923 14.37 % $ 1,885,817 14.64 % Lease financing, net of unearned income 89,568 0.48 90,591 0.70 Real estate – construction: Residential 380,040 2.05 256,655 1.99 Commercial 959,927 5.17 836,998 6.50 Total real estate – construction 1,339,967 7.22 1,093,653 8.49 Real estate – 1-4 family mortgage: Primary 3,082,720 16.61 2,428,076 18.84 Home equity 722,389 3.89 544,158 4.22 Rental/investment 843,334 4.54 402,938 3.13 Land development 226,236 1.22 113,705 0.88 Total real estate – 1-4 family mortgage 4,874,679 26.26 3,488,877 27.07 Real estate – commercial mortgage: Owner-occupied 3,288,006 17.71 1,894,679 14.70 Non-owner occupied 5,953,136 32.07 4,226,937 32.81 Land development 228,992 1.23 114,452 0.89 Total real estate – commercial mortgage 9,470,134 51.01 6,236,068 48.40 Installment loans to individuals 122,176 0.66 90,014 0.70 Total loans, net of unearned income $ 18,563,447 100.00 % $ 12,885,020 100.00 % Loan concentrations are considered to exist when there are loans to a number of borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. At June 30, 2025, there were no concentrations of loans exceeding 10% of total loans other than loans disclosed in the table above. Non-owner occupied commercial mortgage term loans was the largest concentration and comprised 32.07% of total loans at June 30, 2025. The following table presents the loan segments, determined by collateral type, within the non-owner occupied commercial mortgage loan category as of the date presented. 52 Table of Contents June 30, 2025 Balance Average Loan Size Percentage of Total Loans Weighted-Average Loan-to-Value Percentage 30-89 Days Past Due Percentage Non-performing Hotels $ 761,812 $ 4,481 4.10 % 55 % 0.32 % — % Self Storage 550,286 2,493 2.97 54 0.04 — Multi-Family 1,321,246 2,713 7.12 52 — 0.06 Office - Medical 352,800 2,063 1.90 49 0.06 — Office - Non-Medical 510,623 844 2.75 56 0.03 6.46 Retail 1,066,880 1,169 5.75 54 0.08 0.26 Senior Housing 365,341 6,766 1.97 61 — 3.22 Warehouse/Industrial 861,722 2,244 4.64 54 — 0.09 Other 162,426 944 0.87 54 0.10 — Total non-owner occupied commercial mortgage term loans $ 5,953,136 $ 1,894 32.07 % 54 % 0.07 % 0.82 % Bank-owned life insurance The Company holds bank-owned life insurance policies (“BOLI”) on certain employees. The carrying value of these policies was $486,613 and $391,810 at June 30, 2025 and December 31, 2024, respectively. The Company acquired $146,601 of BOLI as a result of its merger with The First. The Company elected to surrender $56,255 of BOLI with below market yields during the first quarter of 2025. The proceeds were deployed into higher yielding assets. Deposits The Company relies on deposits as its primary source of funds. Total deposits were $21,582,637 and $14,572,612 at June 30, 2025 and December 31, 2024, respectively. Noninterest-bearing deposits were $5,356,153 and $3,403,981 at June 30, 2025 and December 31, 2024, respectively, while interest-bearing deposits were $16,226,484 and $11,168,631 at June 30, 2025 and December 31, 2024, respectively. The merger with The First increased total deposits at April 1, 2025 by $6,449,394, which consisted of $1,787,866 and $4,661,527 of noninterest-bearing deposit and interest-bearing deposits, respectively. Management continues to focus on growing and maintaining a stable source of funding, specifically noninterest-bearing deposits and other core deposits (that is, deposits excluding brokered deposits and time deposits greater than $250,000). Noninterest-bearing deposits represented 24.82% of total deposits at June 30, 2025, as compared to 23.36% of total deposits at December 31, 2024. The slight increase in noninterest-bearing deposits as a percentage of total deposits was driven by the seasonal inflow of public fund deposits as well as the acquisition of The First as its noninterest-bearing deposits represented 27.72% of its total deposits on the date of acquisition. Under certain circumstances, management may elect to acquire non-core deposits (in the form of brokered deposits) or public fund deposits (which are deposits of counties, municipalities or other political subdivisions). The source of funds that we select depends on the terms of the deposits and how those terms assist us in mitigating interest rate risk, maintaining our liquidity position and managing our net interest margin; business factors, described in the following paragraph, may lead us to obtain public deposits. Accordingly, funds are acquired to meet anticipated funding needs at the rate and with other terms that, in management’s view, best address our interest rate risk, liquidity and net interest margin parameters. Public fund deposits may be readily obtained based on the Company’s pricing bid in comparison with competitors. Because public fund deposits are obtained through a bid process, these deposit balances may fluctuate as competitive and market forces change. Although the Company has focused on growing stable sources of deposits to reduce reliance on public fund deposits, it participates in the bidding process for public fund deposits when pricing and other terms make it reasonable given market conditions or when management perceives that other factors, such as the public entity’s use of our treasury management or other products and services, make such participation advisable. Our public fund transaction accounts are principally obtained from public universities and municipalities, including school boards and utilities. Public fund deposits were $3,916,060 and $2,256,461 at June 30, 2025 and December 31, 2024, respectively, and represented 18.14% and 15.48% of total deposits as of June 30, 2025 and December 31, 2024, respectively. Borrowed Funds 53 Table of Contents Total borrowings may include federal funds purchased, securities sold under agreements to repurchase, advances from the Federal Home Loan Bank of Dallas (the “FHLB”), borrowings from the Federal Reserve Discount Window, subordinated notes and junior subordinated debentures and are classified on the Consolidated Balance Sheets as either short-term borrowings or long-term debt. Short-term borrowings have original maturities less than one year and typically consist of federal funds purchased, securities sold under agreements to repurchase, and short-term FHLB advances. As a result of the acquisition of The First, short-term borrowings from the FHLB increased $298,250. The following table presents our short-term borrowings by type as of the dates presented: June 30, 2025 December 31, 2024 Security repurchase agreements $ 5,349 $ 8,018 Short-term borrowings from the FHLB 400,000 100,000 $ 405,349 $ 108,018 Long-term debt typically consists of long-term FHLB advances, our junior subordinated debentures and our subordinated notes. The Company acquired through its merger with The First subordinated notes and junior subordinated notes in the amounts of $95,262 and $25,653, respectively. The following table presents our long-term debt by type as of the dates presented: June 30, 2025 December 31, 2024 Junior subordinated debentures $ 140,079 $ 113,916 Subordinated notes 416,896 316,698 $ 556,975 $ 430,614 Long-term funds obtained from the FHLB are used to match-fund fixed rate loans in order to minimize interest rate risk and to meet day-to-day liquidity needs, particularly when the cost of such borrowing compares favorably to the rates that we would be required to pay to attract deposits (which has not been the case in recent periods). Advances from the FHLB are collateralized by a blanket lien on the Bank’s loans. The Company had $5,067,251 of availability on unused lines of credit with the FHLB at June 30, 2025, as compared to $4,004,630 at December 31, 2024. The Company also had credit available at the Federal Reserve Discount Window in the amount of $636,245. The Company has issued subordinated notes, and the Company owns the outstanding common securities of business trusts that issued corporation-obligated mandatorily redeemable preferred capital securities to third-party investors, the proceeds of which were used to buy floating rate junior subordinated debentures issued by the Company (or by companies that the Company subsequently acquired). The proceeds generated by the Company’s subordinated notes and trust preferred securities transactions have been used for general corporate purposes, including providing capital to support the Company’s growth organically or through strategic acquisitions, repaying indebtedness and financing investments and capital expenditures, and for investments in Renasant Bank as regulatory capital. The subordinated notes and trust preferred securities qualify as Tier 2 capital under current regulatory guidelines. Results of Operations Net Income Net income for the second quarter of 2025 was $1,018 compared to net income of $38,846 for the second quarter of 2024. Basic and diluted earnings per share (“EPS”) for the second quarter of 2025 were $0.01, as compared to basic and diluted EPS of $0.69 for the second quarter of 2024. Net income for the six months ended June 30, 2025, was $42,536 compared to net income of $78,255 for the same period in 2024. Basic and diluted EPS were $0.54 and $0.53, respectively for the first six months of 2025 as compared to $1.39 and $1.38 for the first six months of 2024. From time to time, the Company incurs expenses and charges or recognizes valuation adjustments in connection with certain transactions with respect to which management is unable to accurately predict when these items will be incurred or, when incurred, the amount of such items. The following table presents the impact of these items on reported EPS for the dates presented. 54 Table of Contents Three Months Ended June 30, 2025 June 30, 2024 Pre-tax After-tax Impact to Diluted EPS Pre-tax After-tax Impact to Diluted EPS Merger and conversion expenses $ (20,479) $ (15,875) $ (0.17) $ — $ — $ — Day 1 acquisition provision (66,612) (50,026) (0.53) $ — $ — $ — Gain on sale of MSR 1,467 1,102 0.01 $ — $ — $ — Six Months Ended June 30, 2025 June 30, 2024 Pre-tax After-tax Impact to Diluted EPS Pre-tax After-tax Impact to Diluted EPS Merger and conversion expenses $ (21,270) $ (16,470) $ (0.21) $ — $ — $ — Day 1 acquisition provision (66,612) (50,026) (0.63) — — — Gain on sale of MSR 1,467 1,102 0.01 3,472 2,777 0.05 Net Interest Income Net interest income, the difference between interest earned on assets and the cost of interest-bearing liabilities, is the largest component of our net income, comprising 82.17% of total revenue (i.e., net interest income on a fully taxable equivalent basis and noninterest income) for the second quarter of 2025. The primary concerns in managing net interest income are the volume, mix and repricing of assets and liabilities. Net interest income was $218,859 and $353,056 for the three and six months ended June 30, 2025, as compared to $125,026 and $248,316 for the same period in 2024. On a tax equivalent basis, net interest income was $222,717 and $360,149 for the three and six months ended June 30, 2025, as compared to $127,598 and $253,448 for the same period in 2024. The following tables set forth average balance sheet data, including all major categories of interest-earning assets and interest-bearing liabilities, together with the interest earned or interest paid and the average yield or average rate paid on each such category on a tax-equivalent basis for the periods presented: 55 Table of Contents Three Months Ended June 30, 2025 2024 Average Balance Interest Income/ Expense Yield/ Rate Average Balance Interest Income/ Expense Yield/ Rate Assets Interest-earning assets: Loans held for investment $ 18,448,000 $ 304,834 6.63 % $ 12,575,651 $ 200,670 6.41 % Loans held for sale 287,855 4,639 6.45 219,826 3,530 6.42 Securities: Taxable 3,106,565 24,917 3.21 1,832,002 9,258 2.02 Tax-exempt (1) 462,732 4,309 3.72 263,937 1,451 2.20 Interest-bearing balances with banks 901,803 9,057 4.03 595,030 7,874 5.32 Total interest-earning assets 23,206,955 347,756 6.01 15,486,446 222,783 5.77 Cash and due from banks 357,338 187,519 Intangible assets 1,589,490 1,008,638 Other assets 1,029,082 688,766 Total assets $ 26,182,865 $ 17,371,369 Liabilities and shareholders’ equity Interest-bearing liabilities: Deposits: Interest-bearing demand (2) $ 11,191,443 $ 76,542 2.74 % $ 7,094,411 $ 56,132 3.17 % Savings deposits 1,322,007 1,032 0.31 839,638 729 0.35 Brokered deposits — — — 294,650 3,944 5.37 Time deposits 3,404,482 34,347 4.05 2,487,873 26,816 4.34 Total interest-bearing deposits 15,917,932 111,921 2.82 10,716,572 87,621 3.27 Borrowed funds 1,036,045 13,118 5.07 583,965 7,564 5.19 Total interest-bearing liabilities 16,953,977 125,039 2.96 11,300,537 95,185 3.37 Noninterest-bearing deposits 5,233,976 3,509,109 Other liabilities 249,861 223,992 Shareholders’ equity 3,745,051 2,337,731 Total liabilities and shareholders’ equity $ 26,182,865 $ 17,371,369 Net interest income/net interest margin $ 222,717 3.85 % $ 127,598 3.31 % (1) U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which the Company operates. (2) Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits. 56 Table of Contents Six Months Ended June 30, 2025 2024 Average Balance Interest Income/ Expense Yield/ Rate Average Balance Interest Income/ Expense Yield/ Rate Assets Interest-earning assets: Loans held for investment $ 15,722,576 $ 504,338 6.47 % $ 12,491,814 $ 395,310 6.35 % Loans held for sale 244,626 7,647 6.25 187,604 5,838 6.22 Securities: Taxable 2,498,428 35,888 2.87 1,861,909 18,763 2.02 Tax-exempt (1) 361,827 5,752 3.18 267,108 2,956 2.21 Interest-bearing balances with banks 863,486 17,696 4.13 582,683 15,655 5.40 Total interest-earning assets 19,690,943 571,321 5.84 15,391,118 438,522 5.72 Cash and due from banks 270,088 188,011 Intangible assets 1,297,622 1,009,232 Other assets 850,231 701,770 Total assets $ 22,108,884 $ 17,290,131 Liabilities and shareholders’ equity Interest-bearing liabilities: Deposits: Interest-bearing demand (2) $ 9,522,800 $ 131,252 2.78 % $ 7,025,200 $ 108,632 3.10 % Savings deposits 1,069,134 1,743 0.33 850,018 1,459 0.34 Brokered deposits — — — 370,129 9,931 5.38 Time deposits 2,941,920 58,312 3.99 2,403,646 50,212 4.20 Total interest-bearing deposits 13,533,854 191,307 2.85 10,648,993 170,234 3.21 Borrowed funds 797,714 19,865 5.00 573,182 14,840 5.19 Total interest-bearing liabilities 14,331,568 211,172 2.97 11,222,175 185,074 3.31 Noninterest-bearing deposits 4,326,445 3,513,860 Other liabilities 229,098 228,090 Shareholders’ equity 3,221,773 2,326,006 Total liabilities and shareholders’ equity $ 22,108,884 $ 17,290,131 Net interest income/net interest margin $ 360,149 3.68 % $ 253,448 3.30 % (1) U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which the Company operates. (2) Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits. The average balances of nonaccruing assets are included in the tables above. Interest income and weighted average yields on tax-exempt loans and securities have been computed on a fully tax equivalent basis assuming a federal tax rate of 21%. Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes in volume and mix and pricing decisions. External factors include changes in market interest rates, competition and other factors affecting the banking industry in general, and the shape of the interest rate yield curve. The addition of The First’s loan portfolio, strong organic loan growth and the Federal Reserve lowering the federal funds rate by 100 basis points in the second half of 2024 were the largest contributing factors to the increase in net interest income for the three and six months ended June 30, 2025, as compared to the same periods in 2024. The lower interest rates, and the addition of The First’s deposits generated a positive impact to both the cost and mix of our funding sources. The Company has continued its efforts to mitigate increases in the cost of funding due to competition or otherwise through maintaining noninterest-bearing deposits and staying disciplined yet competitive in pricing on interest-bearing deposits in the current rate environment. 57 Table of Contents The following tables set forth a summary of the changes in interest earned, on a tax equivalent basis, and interest paid resulting from changes in volume and rates for the Company for the three and six months ended June 30, 2025, as compared to the same periods in 2024 (the changes attributable to the combined impact of yield/rate and volume have been allocated on a pro-rata basis using the absolute value of amounts calculated): Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024 Volume Rate Net Interest income: Loans held for investment $ 97,032 $ 7,132 $ 104,164 Loans held for sale 1,093 16 1,109 Securities: Taxable 8,479 7,180 15,659 Tax-exempt 1,491 1,367 2,858 Interest-bearing balances with banks 3,379 (2,196) 1,183 Total interest-earning assets 111,474 13,499 124,973 Interest expense: Interest-bearing demand deposits 28,710 (8,300) 20,410 Savings deposits 391 (88) 303 Brokered deposits (3,944) — (3,944) Time deposits 9,387 (1,856) 7,531 Borrowed funds 5,728 (174) 5,554 Total interest-bearing liabilities 40,272 (10,418) 29,854 Change in net interest income $ 71,202 $ 23,917 $ 95,119 Six months ended June 30, 2025 Compared to the Six Months Ended June 30, 2024 Volume Rate Net Interest income: Loans held for investment $ 101,604 $ 7,424 $ 109,028 Loans held for sale 1,781 28 1,809 Securities: Taxable 7,676 9,449 17,125 Tax-exempt 1,249 1,547 2,796 Interest-bearing balances with banks 3,824 (1,783) 2,041 Total interest-earning assets 116,134 16,665 132,799 Interest expense: Interest-bearing demand deposits 26,122 (3,502) 22,620 Savings deposits 293 (9) 284 Brokered deposits (9,931) — (9,931) Time deposits 8,656 (556) 8,100 Borrowed funds 5,087 (62) 5,025 Total interest-bearing liabilities 30,227 (4,129) 26,098 Change in net interest income $ 85,907 $ 20,794 $ 106,701 Interest income, on a tax equivalent basis, was $347,756 and $571,321 for the three and six months ended June 30, 2025, as compared to $222,783 and $438,522 for the same period in 2024. The increase in interest income, on a tax equivalent basis, for the three and six months ended June 30, 2025, as compared to the same time periods in 2024 is due primarily to the addition of The First’s loan portfolio. 58 Table of Contents The following tables present the percentage of total average earning assets, by type and yield, for the periods presented: Percentage of Total Average Earning Assets Yield Three Months Ended Three Months Ended June 30, June 30, 2025 2024 2025 2024 Loans held for investment 79.49 % 81.20 % 6.63 % 6.41 % Loans held for sale 1.24 1.42 6.45 6.42 Securities 15.38 13.53 3.28 2.04 Other 3.89 3.85 4.03 5.32 Total earning assets 100.00 % 100.00 % 6.01 % 5.77 % Percentage of Total Average Earning Assets Yield Six Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Loans held for investment 79.84 % 81.16 % 6.47 % 6.35 % Loans held for sale 1.24 1.22 6.25 6.22 Securities 14.53 13.83 2.94 2.04 Interest-bearing balances with banks 4.39 3.79 4.13 5.40 Total earning assets 100.00 % 100.00 % 5.84 % 5.72 % For the second quarter of 2025, interest income on loans held for investment, on a tax equivalent basis, increased $104,164 to $304,834 from $200,670 for the same period in 2024. For the six months ended June 30, 2025, interest income on loans held for investment, on a tax equivalent basis, increased $109,028 to $504,338 from $395,310 in the same period of 2024. Driven largely by the addition of $5,196,239 in loans held for investment through our merger with The First on April l, 2025, the year-to-date average balance of loans held for investment increased $3,230,762 from June 2024, thereby resulting in the increase in interest income on loans held for investment for the three and six months ended June 30, 2025, as compared to the same periods in 2024. The impact from interest income collected on problem loans and purchase accounting adjustments on loans to total interest income on loans held for investment, loan yield and net interest margin is shown in the following table for the periods presented. Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Net interest income collected on problem loans $ 2,779 $ (146) $ 3,805 $ (23) Accretable yield recognized on purchased loans 17,834 897 18,392 1,697 Total impact to interest income on loans $ 20,613 $ 751 $ 22,197 $ 1,674 Impact to loan yield 0.45 % 0.02 % 0.29 % 0.03 % Impact to net interest margin 0.27 % 0.02 % 0.17 % 0.02 % Interest income on loans held for sale (consisting of mortgage loans held for sale) increased $1,109 to $4,639 for the second quarter of 2025 from $3,530 for the same period in 2024. Interest income on loans held for sale (consisting of mortgage loans held for sale) for the six months ended June 30, 2025 was $7,647 as compared to $5,838 for the same period in 2024. Investment income, on a tax equivalent basis, increased $18,517 to $29,226 for the second quarter of 2025 from $10,709 for the second quarter of 2024, primarily due to the acquisition of The First’s investment portfolio. Investment income, on a tax equivalent basis, increased $19,921 to $41,640 for the six months ended June 30, 2025 from $21,719 for the same period in 2024. The tax equivalent yield on the investment portfolio for the second quarter of 2025 was 3.28%, up 124 basis points from 59 Table of Contents 2.04% for the same period in 2024. The tax equivalent yield on the investment portfolio for the six months ended June 30, 2025 was 2.94%, up 90 basis points from 2.04% for the same period in 2024. Interest expense was $125,039 for the second quarter of 2025 as compared to $95,185 for the same period in 2024. Interest expense for the six months ended June 30, 2025 was $211,172 as compared to $185,074 for the same period in 2024. The increase in interest expense was primarily due to the assumption of The First’s deposits and borrowed funds. The following table presents, by type, the Company’s funding sources, which consist of total average deposits and borrowed funds, and the total cost of each funding source for the periods presented: Percentage of Total Average Deposits and Borrowed Funds Cost of Funds Three Months Ended Three Months Ended June 30, June 30, 2025 2024 2025 2024 Noninterest-bearing demand 23.59 % 23.69 % — % — % Interest-bearing demand 50.44 47.90 2.74 3.17 Savings 5.96 5.67 0.31 0.35 Brokered deposits — 1.99 — 5.37 Time deposits 15.34 16.80 4.05 4.34 Short term borrowings 2.10 0.93 3.72 1.92 Subordinated notes 1.94 2.25 5.70 5.50 Other borrowed funds 0.63 0.77 7.66 8.24 Total deposits and borrowed funds 100.00 % 100.00 % 2.26 % 2.58 % Percentage of Total Average Deposits and Borrowed Funds Cost of Funds Six Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Noninterest-bearing demand 23.19 % 23.85 % — % — % Interest-bearing demand 51.04 47.67 2.78 3.10 Savings 5.73 5.77 0.33 0.34 Brokered deposits — 2.51 — 5.38 Time deposits 15.77 16.31 3.99 4.20 Short-term borrowings 1.54 0.86 3.19 1.59 Subordinated notes 2.05 2.26 5.46 5.51 Other long term borrowings 0.68 0.77 7.76 8.26 Total deposits and borrowed funds 100.00 % 100.00 % 2.28 % 2.52 % Interest expense on deposits was $111,921 and $87,621 for the three months ended June 30, 2025 and 2024, respectively, and the cost of total deposits was 2.12% and 2.47% for the same respective periods. The increase in deposit expense and decrease in cost is attributable to the acquisition of The First’s deposits. The cost of total deposits was also affected by the Federal Reserve’s rate cuts during the second half of 2024. As liquidity risks abated, the Company also repaid advances and allowed brokered deposits to mature, which lowered our deposit costs. The Company has continued its efforts to maintain non-interest bearing deposits. Low cost deposits continue to be the preferred choice of funding; however, the Company may rely on brokered deposits or wholesale borrowings when advantageous or otherwise deemed advisable due to market conditions. Interest expense on total borrowings was $13,118 and $7,564 for the three months ended June 30, 2025 and 2024, respectively. Interest expense on total borrowings was $19,865 and $14,840 for the six months ended June 30, 2025 and 2024, respectively. The increase in interest expense on borrowings is a result of the merger with The First. A more detailed discussion of the cost of our funding sources is set forth below under the heading “Liquidity and Capital Resources” in this Item. Noninterest Income 60 Table of Contents Noninterest Income to Average Assets Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 0.74% 0.90% 0.77% 0.93% Total noninterest income includes fees generated from deposit services and other fees and commissions, income from our wealth management and mortgage banking operations, realized gains and losses on the sale of securities and all other noninterest income. Our focus is to develop and enhance our products that generate noninterest income in order to diversify revenue sources. Noninterest income was $48,334 for the second quarter of 2025 as compared to $38,762 for the same period in 2024. Noninterest income was $84,729 for the six months ended June 30, 2025 as compared to $80,143 for the same period in 2024. The increase in noninterest income for both the three and six months ended June 30, 2025 was primarily driven by the additional income associated with the acquisition of The First’s operations. Service charges on deposit accounts include maintenance fees on accounts, per item charges, account enhancement charges for additional packaged benefits and overdraft fees (which encompasses traditional overdraft fees as well as non-sufficient funds fees). Service charges on deposit accounts were $13,618 and $10,286 for the second quarter of 2025 and 2024, respectively, and $23,982 and $20,792 for the six months ended June 30, 2025 and 2024, respectively. Overdraft fees, the largest component of service charges on deposits, were $6,759 for the three months ended June 30, 2025, as compared to $5,003 for the same period in 2024. These fees were $11,900 for the six months ended June 30, 2025 compared to $10,259 for the same period in 2024. Fees and commissions were $6,650 during the second quarter of 2025 as compared to $3,944 for the same period in 2024, and were $10,437 for the first six months of 2025 as compared to $7,893 for the same period in 2024. Fees and commissions include fees related to deposit services, such as ATM fees and interchange fees on debit card transactions, and lending services, such as collateral management fees and unused commitment fees. For the second quarter of 2025, interchange fees were $4,194 as compared to $2,321 for the same period in 2024. Interchange fees were $6,207 for the six months ended June 30, 2025 as compared to $4,451 for the same period in 2024. Our Wealth Management segment has two divisions: Trust and Financial Services. The Trust division operates on a custodial basis, which includes administration of benefit plans, as well as accounting and money management for trust accounts. The division manages a number of trust accounts inclusive of personal and corporate benefit accounts, IRAs, and custodial accounts. Fees for managing these accounts are based on changes in market values of the assets under management in the account, with the amount of the fee depending on the type of account. The Financial Services division provides specialized products and services to our customers, which include fixed and variable annuities, mutual funds, and stocks offered through a third party provider. Wealth Management revenue was $7,345 for the second quarter of 2025 compared to $5,684 for the same period in 2024, and was $14,412 for the six months ended June 30, 2025 compared to $11,353 for the same period in 2024. The market value of assets under management or administration was $7,347,104 and $5,502,476 at June 30, 2025 and June 30, 2024, respectively. The Company acquired approximately $471,000 of assets under management through its merger with The First. Mortgage banking income is derived from the origination and sale of mortgage loans and the servicing of mortgage loans that the Company has sold but retained the right to service. Although loan fees and some interest income are derived from mortgage loans held for sale, the main source of income is gains from the sale of these loans in the secondary market. Interest rate lock commitments and originations of mortgage loans to be sold totaled $679,633 and $491,627, respectively, in the second quarter of 2025 compared to $560,303 and $380,707, respectively, for the same period in 2024. The increase in interest rate lock commitments for the three months ended June 30, 2025 as compared to the same period in 2024 was due to the slight decrease in mortgage interest rates during the first quarter of 2025 as compared to the same period in 2024. Interest rate lock commitments and originations of mortgage loans to be sold totaled $1,311,758 and $794,785 in the six months ended June 30, 2025 compared to $1,004,601 and $643,131 for the same period in 2024. The high rates in 2024 significantly dampened demand for mortgages nationwide. In the second quarter of 2025 and the first quarter of 2024, the Company sold a portion of its mortgage servicing rights portfolio with a carrying value of $7,886 and $19,539, respectively, for a pre-tax gain of $1,467 and $3,472, respectively. The table below presents the components of mortgage banking income included in noninterest income for the periods presented. 61 Table of Contents Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Gain on sales of loans, net (1) $ 5,316 $ 5,199 $ 9,816 $ 9,734 Fees, net 3,740 2,866 6,057 4,720 Mortgage servicing income, net (2) 2,207 1,633 3,537 6,614 Mortgage banking income, net $ 11,263 $ 9,698 $ 19,410 $ 21,068 (1) Gain on sales of loans, net includes pipeline fair value adjustments (2) Mortgage servicing income, net includes gain on sale of MSR BOLI income is derived from changes in the cash surrender value of the bank-owned life insurance policies and proceeds received upon the death of covered individuals. BOLI income was $3,383 for the three months ended June 30, 2025 as compared to $2,701 for the same period in 2024, and $6,312 for the six months ended June 30, 2025 as compared to $5,392 for the same period in 2024. The increase in BOLI income is primarily due to the acquisition of BOLI from The First with a cash surrender value of $146,601. Other noninterest income was $6,075 and $3,691 for the three months ended June 30, 2025 and 2024, respectively, and was $10,176 and $8,115 for the six months ended June 30, 2025 and 2024, respectively. Other noninterest income includes income from our SBA banking division, our capital markets division and other miscellaneous income and can fluctuate based on production in our SBA banking and capital markets divisions and recognition of other seasonal income items. Noninterest Expense Noninterest Expense to Average Assets Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 2.81% 2.59% 2.71% 2.62% Noninterest expense was $183,204 and $111,976 for the second quarter of 2025 and 2024, respectively, and was $297,080 and $224,888 for the six months ended June 30, 2025 and 2024, respectively. The increase is primarily due to $21,270 in expenses relating to the merger with The First and additional expenses associated with the operations of The First. Salaries and employee benefits increased $28,811 to $99,542 for the second quarter of 2025 as compared to $70,731 for the same period in 2024. Salaries and employee benefits increased $29,298 to $171,499 for the six months ended June 30, 2025 as compared to $142,201 for the same period in 2024. The increase in salaries and employee benefits is primarily attributable to the addition of The First employees, and to a lesser extent to annual merit increases implemented in April 2025. Data processing costs were $5,438 in the second quarter of 2025 as compared to $3,945 for the same period in 2024 and were $9,527 for the six months ended June 30, 2025 as compared to $7,752 for the same period in 2024. The increase in data processing costs is attributable to the acquisition of The First and the cost associated with operating two core systems. Core systems were converted during the third quarter of 2025. The Company continues to examine new and existing contracts to negotiate favorable terms to offset the increased variable cost components of our data processing costs, such as new accounts and increased transaction volume. Net occupancy and equipment expense for the second quarter of 2025 was $17,359, as compared to $11,844 for the same period in 2024. These expenses for the first six months of 2025 were $29,113, as compared to $23,233 for the same period in 2024. The increase in net occupancy and equipment expense is primarily due to the additional locations and assets attributable to the merger with The First. Professional fees include fees for legal and accounting services, such as routine litigation matters, external audit services as well as assistance in complying with newly-enacted and existing banking and other governmental regulations. Professional fees were $4,223 for the second quarter of 2025 as compared to $3,195 for the same period in 2024 and were $7,107 for the six months ended June 30, 2025 as compared to $6,543 for the same period in 2024. Advertising and public relations expense was $4,490 for the second quarter of 2025 as compared to $3,807 for the same period in 2024 and was $8,787 for the six months ended June 30, 2025 as compared to $8,693 for the same period in 2024. During the six months ended June 30, 2025 and 2024, the Company contributed approximately $925 and $1,305, respectively, to charitable organizations throughout Mississippi and Georgia, which contributions are included in our advertising and public relations expense, for which it received a dollar-for-dollar tax credit. 62 Table of Contents Amortization of intangible assets totaled $8,884 and $1,186 for the second quarter of 2025 and 2024, respectively, and $9,964 and $2,398 for the six months ended June 30, 2025 and 2024, respectively. This amortization relates to finite-lived intangible assets which are being amortized over the useful lives as determined at acquisition. The increase for the three and six months ended June 30, 2025 is primarily due to the addition of the core deposit intangible associated with our merger with The First. These finite-lived intangible assets have remaining estimated useful lives ranging from approximately 1 year to 10 years. Communication expenses, those expenses incurred for communication to clients and between employees, were $3,184 for the second quarter of 2025 as compared to $2,112 for the same period in 2024. Communication expenses were $5,217 for the six months ended June 30, 2025 as compared to $4,136 for the same period in 2024. Other noninterest expense includes business development and travel expenses, other discretionary expenses, loan fees expense and other miscellaneous fees and operating expenses. Other noninterest expense was $19,448 for the second quarter of 2025 as compared to $15,051 for the same period in 2024 and was $33,754 for the six months ended June 30, 2025 as compared to $29,720 for the same period in 2024. Efficiency Ratio Efficiency Ratio Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Efficiency ratio 67.59 % 67.31 % 66.78 % 67.41 % The efficiency ratio is a measure of productivity in the banking industry. (This ratio is a measure of our ability to turn expenses into revenue. That is, the ratio is designed to reflect the percentage of one dollar that we must expend to generate a dollar of revenue.) The Company calculates this ratio by dividing noninterest expense by the sum of net interest income on a fully tax equivalent basis and noninterest income. The improvement in our efficiency ratio for the six months ended June 30, 2025 as compared to the same period in 2024 was driven by the increase in our net interest income and is a reflection of our commitment to aggressively manage our costs within the framework of our business model. Our goal is to improve the efficiency ratio over time from currently reported levels as a result of revenue growth while at the same time controlling noninterest expenses and eliminating duplicative expenses as we continue to integrate The First into our business model throughout the remainder of 2025. Income Taxes Income tax expense for the second quarter of 2025 and 2024 was $1,649 and $9,666, respectively, and $12,097 and $19,578 for the six months ended June 30, 2025 and 2024, respectively. The decrease in income tax expense is primarily due to the decrease in pre-tax income caused by expenses associated with our merger with The First. Risk Management The management of risk is an on-going process. Primary risks that are associated with the Company include credit, interest rate and liquidity risk. Credit risk and interest rate risk are discussed below, while liquidity risk is discussed in the next subsection under the heading “Liquidity and Capital Resources.” Credit Risk and the Allowance for Credit Losses on Loans and Unfunded Commitments Management of Credit Risk – Roles and Responsibilities. Inherent in any lending activity is credit risk related to asset quality deterioration and its impact on capital should a borrower default. Credit risk is monitored and managed on an ongoing basis using a cross-functional and multi-layered approach that includes the Company’s loan production, credit administration (including appraisal review), and internal loan review functions. The Board of Directors, and specifically its Credit Review Committee, provide oversight and governance of the Company’s credit risk management process. The first line of defense against credit risk is embedded within our lending function. An integral part of a lending officer’s responsibilities is to assess credit risk at the inception of the lending relationship, monitor ongoing risk over the life of the loan, and report any changes in asset quality or other components of credit risk to the appropriate parties within the Company. The Company’s policies and procedures governing our lending function provide guidelines for assigning lending limits based on a lending officer’s knowledge and experience. These lending limits are monitored on an ongoing basis for appropriateness based on evaluations of the credit quality and compliance with the approved terms of the loan agreements within such lending officer’s loan portfolio. Based on the Company’s risk appetite and procedures for the management of loan concentrations (by 63 Table of Contents geography, collateral type and other criteria), a lending officer may be subject to additional levels of approval for new loan originations, so that more technical expertise and greater oversight are allocated to such portfolio. The Company’s credit administration function is considered the second line of defense against credit risk. Oversight of the Company’s lending operations (including adherence to our policies and procedures governing the loan underwriting and monitoring process), ongoing credit quality monitoring and loss mitigation are the primary focus areas of credit administration. This includes monitoring the loan portfolio to ensure it is properly underwritten, evaluating credit quality metrics to identify indicators of potential loss and assigning risk rating grades which appropriately reflect the potential risk of loss. The Company’s central appraisal review department, which operates within credit administration, engages, reviews and approves third-party appraisals obtained by the Company on real estate collateral in accordance with banking regulations. This department is managed by a State Certified General Real Estate Appraiser and employs other trained appraisers and evaluators. The internal loan review function is considered the third line of defense and operates independently of credit administration to monitor the Company’s lending practices and loan quality. Loan review personnel evaluate and, if necessary, adjust the risk rating grades assigned to loans through periodic examination, focusing their review on commercial and real estate loans, and the consumer loan portfolio. Finally, the Company’s internal audit department provides oversight of all of the above functions. Internal audit staff reviews, among other things, whether these units are operating in adherence to their respective policies, processes and procedures. The internal audit department reports independently to the Board’s Audit Committee. Management of Credit Risk – Risk Measurement Practices . For commercial and commercial real estate secured loans, internal risk-rating grades are assigned based on an analysis of the financial and collateral strength and other credit attributes underlying each loan. Risk rating grades are evaluated on an ongoing basis over the life of the loan. The Company maintains an internal risk rating scale that aligns with regulatory risk classifications. For more information about the Company’s risk rating grades, see the information under the heading “Credit Quality” in Note 4, “Loans,” in the Notes to Consolidated Financial Statements in Item 1, Financial Statements, in this report. In response to changes in the economic, geopolitical, or operating environments impacting the Company’s loan portfolio, the Company may implement additional or enhanced risk management practices. The Company adjusts its processes to the current environment and evaluates the sensitivity of industry sectors, loan types and underlying collateral to changes in macroeconomic factors. Such factors include, but are not limited to, changes in interest rates, inflation on goods, labor costs, and supply chain disruptions. When such factors indicate that a heightened level of credit risk may impact our portfolio, risk management procedures are expanded to include enhanced oversight of past due loans, documented plans for resolving problem loans, enhanced exception monitoring as well as targeted reviews of loans within certain risk classifications. The Company uses information from these risk measurement processes to formulate its credit risk appetite statement, which is used to manage production activity and concentrations within the portfolio, whether by collateral type, industry, geography, relationship size or others factors, such that the Company’s loan mix is consistent with its risk tolerance and does not expose the Company to undue risk. For more information about the Company’s evaluation of loan concentrations, see the information under the heading “Loans” in the Financial Condition section above. Management of Credit Risk – Loss Identification . Loans that are past due or not in compliance with financial or performance covenants, or that are otherwise adversely rated are subject to enhanced scrutiny and monitoring through a variety of processes within our special assets department, which is a division of credit administration. Results and findings are reported to management’s problem asset resolution committee and the Board of Directors Credit Review Committee. When the ultimate collectability of a loan’s principal becomes doubtful, the loan is placed on nonaccrual. The Company’s practice is to charge off estimated losses as soon as such loss is identified and reasonably quantifiable. If the value of the collateral after consideration of disposition costs is less than the loan balance, a charge off is recorded to reduce the allowance for credit losses on loans. Charge-offs reflect the realization of losses in the portfolio that were recognized previously through the provision for credit losses on loans. Net charge-offs for the three and six months ended June 30, 2025 were $12,054, or 0.26% of average loans (annualized), and $11,929, or 0.15% of average loans (annualized), respectively, compared to net charge-offs of $5,481, or 0.18% of average loans (annualized) and $5,645, or 0.09% of average loans (annualized), for the same periods in 2024. After collection efforts have been exhausted or a settlement agreement is reached with the borrower, underlying collateral is liquidated. Allowance for Credit Losses on Loans; Provision for Credit Losses on Loans . The allowance for credit losses is available to absorb credit losses inherent in the loans held for investment portfolio. Management evaluates the adequacy of the allowance on a quarterly basis. 64 Table of Contents The appropriate level of the allowance is based on an ongoing analysis of the loan portfolio and represents an amount that management deems adequate to provide for inherent losses, including loans evaluated on a collective (pooled) basis and those evaluated on an individual basis as set forth in ASC 326. The credit loss estimation process involves procedures to appropriately consider the unique characteristics of the Company’s loan portfolio segments. Credit quality is assessed and monitored by evaluating various attributes, and the results of those evaluations are utilized in underwriting new loans and in the Company’s process for the estimation of expected credit losses. Credit quality monitoring procedures and indicators can include an assessment of problem loans, the types of loans, historical loss experience, new lending products, emerging credit trends, changes in the size and character of loan categories, and other factors, including our risk rating system, regulatory guidance and economic conditions, such as the unemployment rate and change in GDP in the national and local economies as well as trends in the market values of underlying collateral securing loans, all as determined based on input from management, loan review staff and other sources. This evaluation is complex and inherently subjective, as it requires estimates by management that are inherently uncertain and therefore susceptible to significant revision as more information becomes available. In future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and provision for credit loss in those future periods. The methodology for estimating the amount of expected credit losses reported in the allowance for credit losses has two basic components: first, a collective or pooled component for estimated expected credit losses for pools of loans that share similar risk characteristics; and second, an asset-specific component involving individual loans that do not share risk characteristics with other loans and the measurement of expected credit losses for such individual loans. • The allowance for credit losses for loans that share similar risk characteristics with other loans is calculated on a collective (or pooled) basis, where such loans are segregated into loan portfolio segments. In determining the allowance for credit losses on loans evaluated on a collective basis, the Company further categorizes the loan segments based on risk rating. The Company uses two CECL models: (1) for the Real Estate - 1-4 Family Mortgage, Real Estate - Construction and the Installment Loans to Individuals portfolio segments, the Company uses a loss rate model, based on average historical life-of-loan loss rates, and (2) for the Commercial, Real Estate - Commercial Mortgage and Lease Financing portfolio segments, the Company uses a probability of default/loss given default model, which calculates an expected loss percentage for each loan pool by considering (a) the probability of default, based on the migration of loans from performing (using risk ratings) to default using life-of-loan analysis periods, and (b) the historical severity of loss, based on the aggregate net lifetime losses incurred per loan pool. The historical loss rates calculated as described above are adjusted, as necessary, for both internal and external qualitative factors where there are differences in the historical loss data of the Company and current or projected future conditions. Internal factors include loss history, changes in credit quality (including movement between risk ratings) and/or credit concentration and the nature and volume of the respective loan portfolio segments. External factors include current and reasonable and supportable forecasted economic conditions and changes in collateral values. These factors are used to adjust the historical loss rates (as described above) to ensure that they reflect management’s expectation of future conditions based on a reasonable and supportable forecast period. To the extent the lives of the loans in the portfolio extend beyond the period for which a reasonable and supportable forecast can be made, when necessary, the models immediately revert to the historical loss rates adjusted for qualitative factors related to current conditions. • For loans that do not share similar risk characteristics with other loans, an individual analysis is performed to determine the expected credit loss. If the respective loan is collateral dependent (that is, when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral), the expected credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral. The fair value of collateral is initially based on external appraisals. Generally, collateral values for loans for which measurement of expected losses is dependent on the fair value of such collateral are updated every twelve months, either from external third parties or in-house certified appraisers. Third-party appraisals are obtained from a pre-approved list of independent, third-party, local appraisal firms. The fair value of the collateral derived from the external appraisal is then adjusted for the estimated cost to sell if repayment or satisfaction of a loan is dependent on the sale (rather than only on the operation) of the collateral. Other acceptable methods for determining the expected credit losses for individually evaluated loans (typically used for loans that are not collateral dependent) is a discounted cash flow approach or, if applicable, an observable market price. Once the expected credit loss amount is determined, an allowance equal to such expected credit loss is included in the allowance for credit losses. In addition to its quarterly analysis of the allowance for credit losses, management and the Board of Directors review loan ratios on a regular basis. These ratios include the allowance for credit losses as a percentage of total loans, net charge-offs as a percentage of average loans, nonperforming loans as a percentage of total loans and the allowance coverage on nonperforming loans, among others. Also, management reviews past due ratios by officer, community bank and the Company as a whole. 65 Table of Contents The following table presents the allocation of the allowance for credit losses on loans by loan category and the percentage of loans in each category to total loans as of the dates presented: June 30, 2025 December 31, 2024 June 30, 2024 Balance % of Total Balance % of Total Balance % of Total Commercial, financial, agricultural $ 59,676 14.37 % $ 38,527 14.64 % $ 44,951 14.95 % Lease financing 1,935 0.48 3,368 0.70 2,515 0.86 Real estate – construction 21,784 7.22 15,126 8.49 18,896 9.95 Real estate – 1-4 family mortgage 65,703 26.26 47,761 27.07 47,421 27.43 Real estate – commercial mortgage 135,572 51.01 90,204 48.40 77,125 46.03 Installment loans to individuals 6,100 0.66 6,770 0.70 8,963 0.78 Total $ 290,770 100.00 % $ 201,756 100.00 % $ 199,871 100.00 % The provision for credit losses on loans charged to operating expense is an amount which, in the judgment of management, is necessary to maintain the allowance for credit losses on loans at a level that is believed to be adequate to meet the inherent risks of losses in our loan portfolio. The Company recorded a provision for credit losses on loans of $75,400 in the second quarter of 2025 and $77,450 in the first half of 2025, as compared to $4,300 in the second quarter of 2024 and $6,938 in the first half of 2024. Included in the 2025 recorded provision for credit losses on loans is $62,190 of Day 1 acquisition provision associated with the merger with The First. 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. Loan growth, including the addition of loans acquired from The First, as well as changes in credit metrics that influenced our expectations of future credit losses, considered in the context of the existing balance of the allowance for credit losses, resulted in the Company’s model indicating that the aforementioned provision for credit losses on loans was appropriate during the first half of 2025. The table below reflects the activity in the allowance for credit losses on loans for the periods presented: 66 Table of Contents Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Balance at beginning of period $ 203,931 $ 201,052 $ 201,756 $ 198,578 Impact of purchased credit deteriorated loans acquired during the period 23,493 — 23,493 — Charge-offs Commercial, financial, agricultural 5,823 186 5,917 535 Lease financing 2,394 — 2,394 — Real estate – construction 105 — 105 — Real estate – 1-4 family mortgage 319 208 628 290 Real estate – commercial mortgage 3,944 5,727 4,405 5,727 Installment loans to individuals 394 251 659 730 Total charge-offs 12,979 6,372 14,108 7,282 Recoveries Commercial, financial, agricultural 627 525 1,585 871 Lease financing 4 10 13 18 Real estate – 1-4 family mortgage 37 25 70 73 Real estate – commercial mortgage 116 99 122 105 Installment loans to individuals 141 232 389 570 Total recoveries 925 891 2,179 1,637 Net charge-offs 12,054 5,481 11,929 5,645 Provision for credit losses on loans 75,400 4,300 77,450 6,938 Balance at end of period $ 290,770 $ 199,871 $ 290,770 $ 199,871 Net charge-offs (annualized) to average loans 0.26 % 0.18 % 0.15 % 0.09 % Net charge-offs to allowance for credit losses on loans 4.15 % 2.74 % 4.10 % 2.82 % Allowance for credit losses on loans to: Total loans 1.57 % 1.59 % Nonperforming loans 204.97 % 203.88 % Nonaccrual loans 210.70 % 204.38 % 67 Table of Contents The table below reflects annualized net charge-offs (recoveries) to daily average loans outstanding, by loan category, for the periods presented: Six Months Ended June 30, 2025 June 30, 2024 Net Charge-offs (Recoveries) Average Loans Annualized Net Charge-offs (Recoveries) to Average Loans Net Charge-offs (Recoveries) Average Loans Annualized Net Charge-offs (Recoveries) to Average Loans Commercial, financial, agricultural $ 4,332 $ 2,171,892 0.40% $ (336) $ 1,860,832 (0.04)% Lease financing 2,381 87,189 5.51% (18) 105,877 (0.03)% Real estate – construction 105 1,240,707 0.02% — 1,319,572 —% Real estate – 1-4 family mortgage 558 4,193,229 0.03% 217 3,422,433 0.01% Real estate – commercial mortgage 4,283 7,923,677 0.11% 5,622 5,684,881 0.20% Installment loans to individuals 270 105,882 0.51% 160 98,219 0.33% Total $ 11,929 $ 15,722,576 0.15% $ 5,645 $ 12,491,814 0.09% The following table provides further details of the Company’s net charge-offs of loans secured by real estate for the periods presented: Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Real estate – construction: Residential $ 105 $ — $ 105 $ — Total real estate – construction 105 — 105 — Real estate – 1-4 family mortgage: Primary 152 169 391 161 Home equity 130 18 190 19 Rental/investment — (3) (23) 38 Land development — (1) — (1) Total real estate – 1-4 family mortgage 282 183 558 217 Real estate – commercial mortgage: Owner-occupied 3,884 (56) 4,341 (59) Non-owner occupied (55) 5,684 (57) 5,681 Land development (1) — (1) — Total real estate – commercial mortgage 3,828 5,628 4,283 5,622 Total net charge-offs of loans secured by real estate $ 4,215 $ 5,811 $ 4,946 $ 5,839 Allowance for Credit Losses on Unfunded Commitments; Provision for Credit Losses on Unfunded Commitments . The Company maintains a separate allowance for credit losses on unfunded loan commitments, which is included in the “Other liabilities” line item on the Consolidated Balance Sheets. Management estimates the amount of expected losses on unfunded loan commitments by calculating a likelihood of funding over the contractual period for exposures that are not unconditionally cancellable by the Company and applying the loss factors used in the allowance for credit losses on loans methodology described above to unfunded commitments for each loan type. No credit loss estimate is reported for off-balance-sheet credit exposures that are unconditionally cancellable by the Company. A roll-forward of the allowance for credit losses on unfunded commitments is shown in the tables below. 68 Table of Contents Three Months Ended June 30, 2025 2024 Allowance for credit losses on unfunded loan commitments: Beginning balance $ 17,643 $ 16,718 Provision for (recovery of) credit losses on unfunded loan commitments 5,922 (1,000) Ending balance $ 23,565 $ 15,718 Six Months Ended June 30, 2025 2024 Allowance for credit losses on unfunded loan commitments: Beginning balance $ 14,943 $ 16,918 Provision for (recovery of) credit losses on unfunded loan commitments 8,622 (1,200) Ending balance $ 23,565 $ 15,718 The increase in the provision for credit losses on unfunded commitments during the three and six months ended June 30, 2025, as compared to the same periods in 2024 was largely driven by the Day 1 acquisition provision of $4,422 associated with our merger with The First. Nonperforming Assets . Nonperforming assets consist of nonperforming loans and other real estate owned. Nonperforming loans are those on which the accrual of interest has stopped or loans which are contractually 90 days past due on which interest continues to accrue. Generally, the accrual of interest is discontinued when the full collection of principal or interest is in doubt or when the payment of principal or interest has been contractually 90 days past due, unless the obligation is both well secured and in the process of collection. Management, the problem asset resolution committee and our loan review staff closely monitor loans that are considered to be nonperforming. Other real estate owned consists of properties acquired through foreclosure or acceptance of a deed in lieu of foreclosure. These properties are carried at the lower of cost or fair market value based on appraised value less estimated selling costs. Losses arising at the time of foreclosure of properties are charged against the allowance for credit losses on loans. Reductions in the carrying value subsequent to acquisition are charged to earnings and are included in “Other real estate owned” in the Consolidated Statements of Income. The following table provides details of the Company’s nonperforming assets as of the dates presented. June 30, 2025 December 31, 2024 Nonaccruing loans $ 137,999 $ 110,811 Accruing loans past due 90 days or more 3,860 2,464 Total nonperforming loans 141,859 113,275 Other real estate owned 11,750 8,673 Total nonperforming assets $ 153,609 $ 121,948 Nonperforming loans to total loans 0.76 % 0.88 % Nonaccruing loans to total loans 0.74 % 0.88 % Nonperforming assets to total assets 0.58 % 0.68 % The following table presents nonperforming loans by loan category as of the dates presented: 69 Table of Contents June 30, 2025 December 31, 2024 June 30, 2024 Commercial, financial, agricultural $ 10,625 $ 2,000 $ 5,866 Lease financing 1,675 4,083 2 Real estate – construction: Residential 2,567 1,223 — Commercial 2,168 16 — Total real estate – construction 4,735 1,239 — Real estate – 1-4 family mortgage: Primary 38,515 55,037 53,803 Home equity 3,611 3,404 3,233 Rental/investment 2,460 388 943 Land development 77 1,760 40 Total real estate – 1-4 family mortgage 44,663 60,589 58,019 Real estate – commercial mortgage: Owner-occupied 29,694 12,679 6,252 Non-owner occupied 49,104 29,280 24,424 Land development 1,113 3,291 3,210 Total real estate – commercial mortgage 79,911 45,250 33,886 Installment loans to individuals 250 114 262 Total nonperforming loans $ 141,859 $ 113,275 $ 98,035 Total nonperforming loans as a percentage of total loans were 0.76% as of June 30, 2025 as compared to 0.88% and 0.78% as of December 31, 2024 and June 30, 2024, respectively. The Company’s coverage ratio, or its allowance for credit losses on loans as a percentage of nonperforming loans, was 204.97% as of June 30, 2025 as compared to 178.11% as of December 31, 2024 and 203.88% as of June 30, 2024. Management has evaluated loans classified as nonperforming and believes that all nonperforming loans have been adequately reserved for in the allowance for credit losses at June 30, 2025. Management also continually monitors past due loans for potential credit quality deterioration. Total loans 30-89 days past due but still accruing interest were $46,560, or 0.25% of total loans, at June 30, 2025 as compared to $39,842, or 0.31% of total loans, at December 31, 2024 and $28,507, or 0.23% of total loans, at June 30, 2024. 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 an extension of the amortization period), or a term extension, but excluding covenant waivers and modification of contingent acceleration clauses, are required to be disclosed in accordance with ASU 2022-02, “ Financial Instruments - Credit Losses (Topic326): Troubled Debt Restructurings and Vintage Disclosures ” (“ASU 2022-02”). All modifications for the three and six months ended June 30, 2025 and 2024 and which met the disclosure criteria in ASU 2022-02 were performing in accordance with their modified terms at June 30, 2025 and 2024, respectively. The total amortized cost basis of loans that were experiencing financial difficulty, modified during the three and six months ended June 30, 2025 were $329 and $2,450, respectively, as compared to $2,645, and $13,338, respectively, for the same periods in 2024. There were no unused commitments at June 30, 2025, and unused commitments were $338 at June 30, 2024. Upon the Company’s determination that a modified loan has subsequently become 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. For more information about loan modifications made to borrowers experiencing financial difficulty, see the information under the heading “Certain Modifications to Borrowers Experiencing Financial Difficulty” in Note 4, “Loans,” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements. The following table provides details of the Company’s other real estate owned, net of valuation allowance and direct write-downs, as of the dates presented: 70 Table of Contents June 30, 2025 December 31, 2024 June 30, 2024 Residential real estate $ 5,701 $ 2,966 $ 1,004 Commercial real estate 4,426 5,681 6,336 Residential land development 24 19 19 Commercial land development 1,599 7 7 Total other real estate owned $ 11,750 $ 8,673 $ 7,366 Changes in the Company’s other real estate owned were as follows: 2025 2024 Balance at January 1 $ 8,673 $ 9,622 Acquired OREO 11,109 — Transfers of loans 4,281 1,135 Impairments (585) (67) Dispositions (11,713) (1,052) Other (15) (2,272) Balance at June 30 $ 11,750 $ 7,366 Other real estate owned with a cost basis of $11,713 was sold during the six months ended June 30, 2025, resulting in a net gain of $65, while other real estate owned with a cost basis of $1,052 was sold during the six months ended June 30, 2024, resulting in a net gain of $115. Interest Rate Risk Market risk is the risk of loss from adverse changes in market prices and rates. The majority of assets and liabilities of a financial institution are monetary in nature and therefore differ greatly from most commercial and industrial companies that have significant investments in fixed assets and inventories. Our market risk arises primarily from interest rate risk inherent in lending, investing and deposit-taking activities. Management believes a significant impact on the Company’s financial results stems from our ability to react to changes in interest rates. A sudden and substantial change in interest rates may adversely impact our earnings because the interest rates borne by assets and liabilities do not change at the same speed, to the same extent or on the same basis. Changes in rates may also limit our liquidity, making it more costly for the Company to generate funds to make loans and to satisfy customers wishing to withdraw deposits. Because of the impact of interest rate fluctuations on our profitability and liquidity, we actively monitor and manage our interest rate risk exposure. We have an Asset/Liability Committee (“ALCO”), which is comprised of various members of senior management and is authorized by the Board of Directors to monitor interest rate sensitivity and liquidity risk, over the short-, medium-, and long-term, and to make decisions relating to these processes. The ALCO’s goal is to structure our asset/liability composition to maximize net interest income while managing interest rate risk and preserving adequate liquidity so as to minimize the adverse impact of changes in interest rates on net interest income, liquidity and capital. We regularly monitor liquidity and stress our liquidity position in various simulated scenarios, which are incorporated in our contingency funding plan outlining different potential liquidity environments. The ALCO uses an asset/liability model as the primary quantitative tool in measuring the amount of interest rate risk associated with changing market rates. The model is used to perform both net interest income forecast simulations for multiple year horizons and economic value of equity (“EVE”) analyses, each under various interest rate scenarios. Net interest income forecast simulations measure the short- and medium-term earnings exposure from changes in market interest rates in a rigorous and explicit fashion. Our current financial position is combined with assumptions regarding future business to calculate future net interest income under various hypothetical rate scenarios. EVE measures our long-term earnings exposure from changes in market rates of interest. EVE is defined as the present value of assets minus the present value of liabilities at a point in time for a given set of market rate assumptions. An increase in EVE due to a specified rate change indicates an improvement in the long-term earnings capacity of the balance sheet assuming that the rate change remains in effect over the life of the current balance sheet. The following table presents the projected impact of a change in interest rates on (1) static EVE and (2) earnings at risk (that is, net interest income) for the 1-12 and 13-24 month periods commencing July 1, 2025, in each case as compared to the result 71 Table of Contents under rates present in the market on June 30, 2025. The changes in interest rates assume an instantaneous and parallel shift in the yield curve and do not account for changes in the slope of the yield curve. Percentage Change In: Immediate Change in Rates of (in basis points): Economic Value Equity (EVE) Earning at Risk (Net Interest Income) Static 1-12 Months 13-24 Months +100 2.79% 2.51% 4.15% -100 (4.09)% (3.04)% (4.81)% -200 (9.35)% (5.41)% (9.59)% The rate shock results for the net interest income simulations for the next 24 months produce an asset sensitive position at June 30, 2025. The preceding measures assume no change in the size or asset/liability compositions of the balance sheet, and they do not reflect future actions the ALCO may undertake in response to such changes in interest rates. The scenarios assume instantaneous movements in interest rates in increments described in the table above. As interest rates are adjusted over a period of time, it is our strategy to proactively change the volume and mix of our balance sheet in order to mitigate our interest rate risk. The computation of the prospective effects of hypothetical interest rate changes requires numerous assumptions, including asset prepayment speeds, the impact of competitive factors on our pricing of loans and deposits, the impact of market conditions on the securities yields and interest rates of our borrowings, how responsive our deposit repricing is to the change in market rates and the expected life of non-maturity deposits. These business assumptions are based upon our experience, business plans and published industry experience; however, such assumptions may not necessarily reflect the manner or timing in which cash flows, asset yields and liability costs respond to changes in market rates. Because these assumptions are inherently uncertain, actual results will differ from simulated results. The Company utilizes derivative financial instruments, including interest rate contracts such as swaps, collars, caps and/or floors, forward commitments, and interest rate lock commitments, as part of its ongoing efforts to mitigate its interest rate risk exposure. For more information about the Company’s derivatives, see the information under the heading “Loan Commitments and Other Off-Balance Sheet Arrangements” in the Liquidity and Capital Resources section below and Note 10, “Derivative Instruments,” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements. The next section also details our available sources of liquidity, both on and off-balance sheet. Liquidity and Capital Resources Liquidity management is the ability to meet the cash flow requirements of customers who may be either depositors wishing to withdraw funds or borrowers needing assurance that sufficient funds will be available to meet their credit needs. Core deposits, which are deposits excluding brokered deposits and time deposits greater than $250,000, are the major source of funds used by the Bank to meet cash flow needs. Maintaining the ability to acquire these funds as needed in a variety of markets is the key to assuring the Bank’s liquidity. We may also access the brokered deposit market where rates are favorable to other sources of liquidity (especially in light of collateral requirements for certain borrowings) and core deposits are not sufficient for meeting our current and anticipated short- or long-term liquidity needs. We did not hold any brokered deposits at June 30, 2025 or December 31, 2024. Management continually monitors the Bank’s liquidity and non-core dependency ratios to ensure compliance with targets established by the ALCO. Our investment portfolio is another alternative for meeting liquidity needs. These assets generally have readily available markets that offer conversions to cash as needed. Within the next twelve months the securities portfolio is forecasted to generate cash flow through principal payments and maturities equal to approximately 12.79% of the carrying value of the total securities portfolio. Securities within our investment portfolio are also used to secure certain deposit types, short-term borrowings and derivative instruments. At June 30, 2025, securities with a carrying value of $1,216,276 were pledged to secure government, public fund and trust deposits and as collateral for short-term borrowings and derivative instruments as compared to securities with a carrying value of $843,870 similarly pledged at December 31, 2024. Other sources available for meeting liquidity needs include federal funds purchased, short-term and long-term advances from the FHLB and borrowings from the Federal Reserve Discount Window. Interest is charged at the prevailing market rate on federal funds purchased, FHLB advances and borrowings from the Federal Reserve Discount Window. There were $400,000 in short-term borrowings from the FHLB at June 30, 2025 and December 31, 2024. Long-term funds obtained from the FHLB are used to match-fund fixed rate loans in order to minimize interest rate risk and also are used to meet day-to-day liquidity needs, 72 Table of Contents particularly when the cost of such borrowing compares favorably to the rates that we would be required to pay to attract deposits. There were no outstanding long-term advances with the FHLB at June 30, 2025 or December 31, 2024. The total amount of the remaining credit available to us from the FHLB at June 30, 2025 was $5,067,251. The credit available at the Federal Reserve Discount Window at June 30, 2025 was $636,245 with no borrowings outstanding as of such date. We also maintain lines of credit with other commercial banks totaling $150,000. These are unsecured lines of credit with the majority maturing at various times within the next twelve months. There were no amounts outstanding under these lines of credit at June 30, 2025 or December 31, 2024. Finally, we can access the capital markets to meet liquidity needs. The Company maintains a shelf registration statement with the Securities and Exchange Commission (“SEC”). The shelf registration statement, which was effective upon filing, allows the Company to raise capital from time to time through the sale of common stock, preferred stock, depositary shares, debt securities, rights, warrants and units, or a combination thereof, subject to market conditions. Specific terms and prices will be determined at the time of any offering under a separate prospectus supplement that the Company will file with the SEC at the time of the specific offering. The proceeds of the sale of securities, if and when offered, will be used for general corporate purposes or as otherwise described in the prospectus supplement applicable to the offering and could include the expansion of the Company’s banking and wealth management operations as well as other business opportunities. Our common stock offering completed in July 2024 reflects our access of the capital markets as described in this paragraph. In addition, in previous years, we have accessed the capital markets to generate liquidity in the form of subordinated notes. We have also assumed subordinated notes as part of acquisitions. The carrying value of subordinated notes, net of unamortized debt issuance costs, was $416,896 at June 30, 2025. The following table presents, by type, the Company’s funding sources, which consist of total average deposits and borrowed funds, and the total cost of each funding source for the periods presented: Percentage of Total Average Deposits and Borrowed Funds Cost of Funds Six Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Noninterest-bearing demand 23.19 % 23.85 % — % — % Interest-bearing demand 51.04 47.67 2.78 3.10 Savings 5.73 5.77 0.33 0.34 Brokered deposits — 2.51 — 5.38 Time deposits 15.77 16.31 3.99 4.20 Short-term borrowings 1.54 0.86 3.19 1.59 Subordinated notes 2.05 2.26 5.46 5.51 Other borrowed funds 0.68 0.77 7.76 8.26 Total deposits and borrowed funds 100.00 % 100.00 % 2.28 % 2.52 % The estimated amount of uninsured and uncollateralized deposits at June 30, 2025 was $6,259,510. Collateralized public funds over FDIC insurance limits were $3,039,016 at June 30, 2025. Our strategy in choosing funds is focused on minimizing cost in the context of our balance sheet composition, interest rate risk position and liquidity forecast. Accordingly, management targets growth of core deposits, focusing on noninterest-bearing deposits. While we do not control the types of deposit instruments our clients choose, we do influence those choices with the rates and the deposit specials we offer. We constantly monitor our funds position and evaluate the effect that various funding sources have on our financial position. Cash and cash equivalents were $1,378,612 at June 30, 2025, as compared to $851,906 at June 30, 2024. The increase is largely driven by growth in deposits and our acquisition of The First. Cash used in investing activities for the six months ended June 30, 2025 was $262,173, as compared to cash used in investing activities of $43,479 for the six months ended June 30, 2024. Proceeds from the sale, maturity or call of securities within our investment portfolio were $851,862 for the six months ended June 30, 2025, as compared to $270,270 for the same period in 2024. Shortly after merger with The First, certain securities from the acquired portfolio were sold at carrying value, resulting in proceeds of $686,485. A portion of the securities portfolio was also sold during the first quarter of 2024, resulting in proceeds of $177,185 of which a portion were used to purchase higher yielding securities, while the remainder was used to fund loan 73 Table of Contents growth. Purchases of investment securities were $946,095 during the first six months of 2025 and $52,679 for the same period in 2024. The Company received $261,483 in net cash from its acquisition of The First. Cash provided by financing activities for the six months ended June 30, 2025 was $519,892, as compared to cash provided by financing activities of $78,054 for the same period in 2024. Deposits increased $556,236 and $178,428 for the six months ended June 30, 2025 and 2024, respectively. Restrictions on Bank Dividends, Loans and Advances The Company’s liquidity and capital resources, as well as its ability to pay dividends to its shareholders, are substantially dependent on the ability of Renasant Bank to transfer funds to the Company in the form of dividends, loans and advances. Under Mississippi law, a Mississippi bank may not pay dividends unless its earned surplus is in excess of three times capital stock. A Mississippi bank with earned surplus in excess of three times capital stock may pay a dividend, subject to the approval of the Mississippi Department of Banking and Consumer Finance (the “DBCF”). In addition, the FDIC also has the authority to prohibit the Bank from engaging in business practices that the FDIC considers to be unsafe or unsound, which, depending on the financial condition of the bank, could include the payment of dividends. Accordingly, the approval of the DBCF is required prior to the Bank paying dividends to the Company, and under certain circumstances the approval of the FDIC may be required. Federal Reserve regulations also limit the amount the Bank may loan to the Company unless such loans are collateralized by specific obligations. At June 30, 2025, the maximum amount available for transfer from the Bank to the Company in the form of loans was $274,176. The Company maintains a $3,000 line of credit collateralized by cash with the Bank. There were no amounts outstanding under this line of credit at June 30, 2025. These restrictions did not have any impact on the Company’s ability to meet its cash obligations in the six months ended June 30, 2025, nor does management expect such restrictions to materially impact the Company’s ability to meet its currently-anticipated cash obligations. Loan Commitments and Other Off-Balance Sheet Arrangements The Company enters into loan commitments and standby letters of credit in the normal course of its business. Loan commitments are made to accommodate the financial needs of the Company’s customers. Standby letters of credit commit the Company to make payments on behalf of customers when certain specified future events occur. Both arrangements have credit risk essentially the same as that involved in extending loans to customers and are subject to the Company’s normal credit policies, including establishing a provision for credit losses on unfunded commitments. Collateral (e.g., securities, receivables, inventory, equipment, etc.) is obtained based on management’s credit assessment of the customer. Loan commitments and standby letters of credit do not necessarily represent future cash requirements of the Company in that while the borrower has the ability to draw upon these commitments at any time, these commitments often expire without being drawn upon. The Company’s unfunded loan commitments and standby letters of credit outstanding were as follows as of the dates presented: June 30, 2025 December 31, 2024 Loan commitments $ 4,190,916 $ 2,856,308 Standby letters of credit 92,703 90,267 The Company closely monitors the amount of remaining future commitments to borrowers in light of prevailing economic conditions and adjusts these commitments and the provision related thereto as necessary; the Company also reviews these commitments as part of its analysis of loan concentrations within the loan portfolio. The Company will continue this process as new commitments are entered into or existing commitments are renewed. For a more detailed discussion related to the allowance and provision for credit losses on unfunded loan commitments, refer to the “Risk Management” section above. The Company utilizes derivative financial instruments, including interest rate contracts such as swaps, collars, risk participations, caps and/or floors, as part of its ongoing efforts to mitigate its interest rate risk exposure and to facilitate the needs of its customers. The Company enters into derivative instruments that are not designated as hedging instruments to help its commercial customers manage their exposure to interest rate fluctuations. To mitigate the interest rate risk associated with these customer contracts, the Company enters into an offsetting derivative contract position with other financial institutions. The Company manages its credit risk, or potential risk of default by its commercial customers, through credit limit approval and monitoring procedures. At June 30, 2025, the Company had notional amounts of $1,429,422 on interest rate contracts with 74 Table of Contents corporate customers and $1,429,734 in offsetting interest rate contracts with other financial institutions to mitigate the Company’s rate exposure on its corporate customers’ contracts and certain fixed rate loans. Additionally, the Company enters into interest rate lock commitments with its customers to mitigate the interest rate risk associated with the commitments to fund fixed-rate and adjustable rate residential mortgage loans and also enters into forward commitments to sell residential mortgage loans to secondary market investors. The Company also enters into interest rate swap contracts on its FHLB borrowings and its junior subordinated debentures that are accounted for as cash flow hedges. Under each of these contracts, the Company pays a fixed rate of interest and receives a variable rate of interest. The Company entered into an interest rate swap contract on its subordinated notes that is accounted for as a fair value hedge. Under this contract, the Company pays a variable rate of interest and receives a fixed rate of interest. The Company utilizes interest rate collars to protect against interest rate fluctuations on certain variable-rate loans. Under these contracts, interest income is limited to the interest rate cap; however, interest income is protected when market rates fall below the floor strike rate. For more information about the Company’s derivatives, see Note 10, “Derivative Instruments,” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements. Shareholders’ Equity and Regulatory Matters Total shareholders’ equity of the Company was $3,778,854 at June 30, 2025 compared to $2,678,318 at December 31, 2024. Book value per share was $39.77 and $42.13 at June 30, 2025 and December 31, 2024, respectively. The growth in shareholders’ equity is attributable to the merger with The First, current period earnings and declines in accumulated other comprehensive loss, offset by dividends declared. In October 2024, the Company’s Board of Directors approved a stock repurchase program, authorizing the Company to repurchase up to $100,000 of its outstanding common stock, either in open market purchases or privately-negotiated transactions. The program will remain in effect through October 2025 or, if earlier, the repurchase of the entire amount of common stock authorized to be repurchased. The Company did not repurchase any of its common stock in the first half of 2025. The Company has junior subordinated debentures with a carrying value of $140,079 at June 30, 2025, of which $135,682 was included in the Company’s Tier 2 capital. The Company has subordinated notes with a par value of $433,400 at June 30, 2025, of which $416,879 is included in the Company’s Tier 2 capital. The Federal Reserve, the FDIC and the Office of the Comptroller of the Currency have issued guidelines governing the levels of capital that bank holding companies and banks must maintain. 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% 75 Table of Contents The following table provides the capital, risk-based capital and leverage ratios for the Company and for Renasant Bank as of the dates presented: Actual Minimum Capital Requirement to be Well Capitalized Minimum Capital Requirement to be Adequately Capitalized (including the Capital Conservation Buffer) Amount Ratio Amount Ratio Amount Ratio June 30, 2025 Renasant Corporation: Risk-based capital ratios: Common equity tier 1 capital ratio $ 2,314,564 11.08 % $ 1,358,118 6.50 % $ 1,462,589 7.00 % Tier 1 risk-based capital ratio 2,314,564 11.08 1,671,530 8.00 1,776,001 8.50 Total risk-based capital ratio 3,128,661 14.97 2,089,413 10.00 2,193,883 10.50 Leverage capital ratios: Tier 1 leverage ratio 2,314,564 9.36 1,235,856 5.00 988,685 4.00 Renasant Bank: Risk-based capital ratios: Common equity tier 1 capital ratio $ 2,480,714 11.88 % $ 1,357,025 6.50 % $ 1,461,411 7.00 % Tier 1 risk-based capital ratio 2,480,714 11.88 1,670,184 8.00 1,774,571 8.50 Total risk-based capital ratio 2,742,024 13.13 2,087,730 10.00 2,192,117 10.50 Leverage capital ratios: Tier 1 leverage ratio 2,480,714 10.05 1,234,471 5.00 987,577 4.00 December 31, 2024 Renasant Corporation: Risk-based capital ratios: Common equity tier 1 capital ratio $ 1,825,197 12.73 % $ 932,162 6.50 % $ 1,003,867 7.00 % Tier 1 risk-based capital ratio 1,935,522 13.50 1,147,276 8.00 1,218,981 8.50 Total risk-based capital ratio 2,449,129 17.08 1,434,095 10.00 1,505,800 10.50 Leverage capital ratios: Tier 1 leverage ratio 1,935,522 11.34 853,556 5.00 682,845 4.00 Renasant Bank: Risk-based capital ratios: Common equity tier 1 capital ratio $ 1,843,123 12.85 % $ 932,552 6.50 % $ 1,004,287 7.00 % Tier 1 risk-based capital ratio 1,843,123 12.85 1,147,756 8.00 1,219,491 8.50 Total risk-based capital ratio 2,022,737 14.10 1,434,695 10.00 1,506,430 10.50 Leverage capital ratios: Tier 1 leverage ratio 1,843,123 10.80 852,933 5.00 682,346 4.00 The Company elected to take advantage of transitional relief offered by the Federal Reserve and FDIC to delay for two years the estimated impact of CECL on regulatory capital, followed by a three-year transitional period to phase out the capital benefit provided by the two-year delay. The three-year transitional period began on January 1, 2022; the full impact of CECL is reflected in our capital ratios as of June 30, 2025. For more information regarding the capital adequacy guidelines applicable to the Company and Renasant Bank, please refer to Note 15, “Regulatory Matters,” in the Notes to the Consolidated Financial Statements of the Company in Item 1, Financial Statements. 76 Table of Contents Critical Accounting Estimates We have identified certain accounting estimates that involve significant judgment and estimates which can have a material impact on our financial condition or results of operations. Our accounting policies are more fully described in Note 1, “Significant Accounting Policies,” in the Notes to Consolidated Financial Statements of the Company in Item 8, Financial Statements and Supplementary Data, in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on February 26, 2025. Actual amounts and values as of the balance sheet dates may be materially different from the amounts and values reported due to the inherent uncertainty in the estimation process. Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date. The critical accounting estimates that we believe to be the most critical in preparing our consolidated financial statements relate to the allowance for credit losses and acquisition accounting, which are described under “Critical Accounting Policies and Estimates” in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the year ended December 31, 2024. Since December 31, 2024, there have been no material changes in these critical accounting estimates. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There have been no material changes in our market risk since December 31, 2024. For additional information regarding our market risk, see our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on February 26, 2025.