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What changed in RENASANT CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of RENASANT CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+382 added−356 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-23)

Top changes in RENASANT CORP's 2024 10-K

382 paragraphs added · 356 removed · 293 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

69 edited+12 added−10 removed155 unchanged
Biggest changeThe provisions discussed above, as well as any other aspects of current or proposed regulatory or legislative changes to laws applicable to the financial industry, may impact the profitability of our business activities and may change certain of our business practices, including the ability to offer new products, obtain financing, attract deposits, make loans, and achieve satisfactory interest spreads, and could expose us to additional costs, including increased compliance costs.
Biggest changeSection 38 of the FDIA and related regulations also specify circumstances under which the FDIC may reclassify a well-capitalized bank as adequately capitalized and may require an adequately capitalized bank or an undercapitalized bank to comply with supervisory actions as if it were in the next lower category (except that the FDIC may not reclassify a significantly undercapitalized bank as critically undercapitalized). 11 The provisions discussed above, as well as any other aspects of current or proposed regulatory or legislative changes to laws applicable to the financial industry, may impact the profitability of our business activities and may change certain of our business practices, including the ability to offer new products, obtain financing, attract deposits, make loans, and achieve satisfactory interest spreads, and could expose us to additional costs, including increased compliance costs.
The regulations of the FDIC and the DBCF affect virtually all of the Bank’s activities, including the minimum levels of capital required, the ability to pay dividends, mergers and acquisitions, borrowing and the ability to expand through new branches or acquisitions and various other matters.
The regulations of the FDIC and the DBCF affect virtually all of the Bank’s activities, including the minimum levels of capital required, the ability to pay dividends, mergers and acquisitions, borrowing, the ability to expand through new branches or acquisitions and various other matters.
We make available on the Company’s website, at the “SEC Filings” link, free of charge, our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. 15
We make available on the Company’s website, at the “SEC Filings” link, free of charge, our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
An insured state bank is not prohibited from, among other things, taking the following actions: 11 - acquiring or retaining a majority interest in a subsidiary; - investing as a limited partner in a partnership the sole purpose of which is direct or indirect investment in the acquisition, rehabilitation or new construction of a qualified housing project, provided that such limited partnership investments may not exceed 2% of the bank’s total assets; - acquiring up to 10% of the voting stock of a company that solely provides or reinsures directors’, trustees’ and officers’ liability insurance coverage or bankers’ blanket bond group insurance coverage for insured depository institutions; and - acquiring or retaining the voting shares of a depository institution if certain requirements are met.
An insured state bank is not prohibited from, among other things, taking the following actions: - acquiring or retaining a majority interest in a subsidiary; - investing as a limited partner in a partnership the sole purpose of which is direct or indirect investment in the acquisition, rehabilitation or new construction of a qualified housing project, provided that such limited partnership investments may not exceed 2% of the bank’s total assets; - acquiring up to 10% of the voting stock of a company that solely provides or reinsures directors’, trustees’ and officers’ liability insurance coverage or bankers’ blanket bond group insurance coverage for insured depository institutions; and - acquiring or retaining the voting shares of a depository institution if certain requirements are met.
A few of the ratios used in measuring the success of their business plan include: — return on average assets — net interest margin and spread — the efficiency ratio — fee income shown as a percentage of loans and deposits — loan and deposit growth — the volume and cost of deposits — net charge-offs to average loans — the percentage of loans past due and nonaccruing While we have preserved decision-making at a local level, we have centralized our legal, accounting, investment, risk management, loan review, human resources, audit and data processing/operations functions.
A few of the ratios used in measuring the success of their business plan include: — return on average assets — net interest margin and spread — the efficiency ratio — fee income shown as a percentage of loans and deposits — loan and deposit growth — the volume and cost of deposits — net charge-offs to average loans — the percentage of loans past due and nonaccruing 2 While we have preserved decision-making at a local level, we have centralized our legal, accounting, investment, risk management, loan review, human resources, audit and data processing/operations functions.
Among other things, an institution will be deemed to potentially have significant CRE concentration risk exposure if, based on its call report, either (1) total loans classified as acquisition, development and construction (“ADC”) loans represent 100% or more of the institution’s total capital or (2) total CRE loans, which consists of ADC and non-owner occupied CRE loans as defined in the CRE guidance, represent 300% or more the institution’s total capital, where the balance of the institution’s CRE loan portfolio has increased by 50% or more during the prior 36 months.
Among other things, an institution will be deemed to potentially have significant CRE concentration risk exposure if, based on its call report, either (1) total loans classified as acquisition, development and construction (“ADC”) loans represent 100% or more of the institution’s total capital or (2) total CRE loans, which consists of ADC and non-owner occupied CRE loans as defined in regulatory guidance, represent 300% or more the institution’s total capital, where the balance of the institution’s CRE loan portfolio has increased by 50% or more during the prior 36 months.
We also monitor concentrations in our construction and land development loans based on regulatory guidelines promulgated by banking regulators, which involves evaluating the aggregate value of these loans as a percentage of our risk-based capital (this is referred to as the “100/300 Test” and is discussed in more detail under the “Supervision and Regulation” heading below) as well as monitoring loans considered to be high volatility commercial real estate.
We also monitor concentrations in our construction and land development loans based on guidelines promulgated by banking regulators, which involves evaluating the aggregate value of these loans as a percentage of our risk-based capital (this is referred to as the “100/300 Test” and is discussed in more detail under the “Supervision and Regulation” heading below) as well as monitoring loans considered to be high volatility commercial real estate.
We obtain a lien against the collateral securing the loan and hold title (if applicable) until the loan is repaid in full. Transportation, manufacturing, healthcare, material handling, printing and construction are the industries that typically obtain lease financing. In addition, we offer a product tailored to qualified not-for-profit customers that provides real estate financing at tax-exempt rates.
We obtain a lien against the collateral securing the loan and hold title (if applicable) until the loan is repaid in full. Transportation, manufacturing, 5 healthcare, material handling, printing and construction are the industries that typically obtain lease financing. In addition, we offer a product tailored to qualified not-for-profit customers that provides real estate financing at tax-exempt rates.
As a publicly-traded company, Renasant Corporation is also subject to laws, rules and regulations, as well as the standards of self-regulatory organizations, relating to corporate governance, financial reporting and public disclosure, and auditor independence, including the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), SEC rules and regulations and NYSE listing rules.
As a publicly-traded company, Renasant Corporation is also subject to laws, rules and regulations, as well as the standards of self-regulatory organizations, relating to corporate governance, financial reporting and public disclosure, and auditor independence, including the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and 9 Consumer Protection Act of 2010 (the “Dodd-Frank Act”), SEC rules and regulations and NYSE listing rules.
These goals are accomplished through rules that restrict the type of activities we can engage in with respect to our publicly-traded securities and through a disclosure regime requiring us to disclose a significant amount of information on an annual, quarterly and current basis. The description below summarizes certain elements of the regulatory framework applicable to us and the Bank.
These goals are accomplished through rules that restrict the type of activities we can engage in with respect to our 7 publicly-traded securities and through a disclosure regime requiring us to disclose a significant amount of information on an annual, quarterly and current basis. The description below summarizes certain elements of the regulatory framework applicable to us and the Bank.
The risk-based capital guidelines are designed to make regulatory capital requirements more sensitive to differences in risk profiles among banks and bank holding companies, to factor off-balance sheet exposure into the assessment of capital adequacy, to minimize disincentives for holding liquid, low-risk assets and to achieve greater consistency in the evaluation of the capital adequacy of major banking organizations worldwide.
The risk-based capital guidelines are designed to make regulatory capital requirements more sensitive to differences in risk profiles among banks and bank holding companies, to factor off-balance sheet exposure into the assessment of capital adequacy, to minimize disincentives for holding liquid, low-risk assets and to achieve greater consistency in the evaluation of the capital 8 adequacy of major banking organizations worldwide.
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.
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 4 specified price and delivery date. Penalties are paid to the investor if we fail to satisfy the contract.
Other possible sanctions which may be imposed for violation of regulations include suspension of individual employees, limitations on engaging in a particular business for a specified period of time, censures and fines. 13 Monetary Policy and Economic Controls We and the Bank are affected by the policies of regulatory authorities, including the Federal Reserve.
Other possible sanctions which may be imposed for violation of regulations include suspension of individual employees, limitations on engaging in a particular business for a specified period of time, censures and fines. Monetary Policy and Economic Controls We and the Bank are affected by the policies of regulatory authorities, including the Federal Reserve.
We also have an employee 14 assistance program, which is a Bank-paid benefit available to all employees and immediate family members for mental health, behavioral, stress management, and other personal care needs. Available Information We file and furnish annual, quarterly and current reports, proxy statements and other information with the SEC.
We also have an employee assistance program, which is a Bank-paid benefit available to all employees and immediate family members for mental health, behavioral, stress management, and other personal care needs. Available Information We file and furnish annual, quarterly and current reports, proxy statements and other information with the SEC.
The principal exception to this prohibition is that we may engage, directly or indirectly (including through the ownership of shares of another company), in certain activities that the Federal Reserve has found to be so closely 7 related to banking or managing and controlling banks as to be a proper incident thereto.
The principal exception to this prohibition is that we may engage, directly or indirectly (including through the ownership of shares of another company), in certain activities that the Federal Reserve has found to be so closely related to banking or managing and controlling banks as to be a proper incident thereto.
As a practical matter, for so long as our operations chiefly consist of the operation of the Bank, the Bank will remain our source of dividend payments. Accordingly, our ability to pay dividends depends upon the Bank’s earnings and financial condition. The ability of the Bank to pay dividends is restricted by federal and state laws, regulations and policies.
As a practical matter, for so long as our operations chiefly consist of the operation of the Bank, the Bank will remain our source of dividend payments. Accordingly, our ability to pay dividends depends upon the Bank’s earnings and financial condition. The ability of the Bank to pay dividends also is restricted by federal and state laws, regulations and policies.
In alignment with the Company’s vision, mission, values, and behaviors and in an effort to retain high performing employees, the Company conducts employee feedback surveys regularly and seeks to engage, reward, and recognize employees through strategic programming and initiatives. In addition to professional development, the Company provides bank-paid and voluntary benefits to eligible employees.
In alignment with the Company’s vision, mission, values and behaviors and in an effort to retain high performing employees, the Company conducts employee feedback surveys regularly and seeks to engage, reward, and recognize employees through strategic programming and initiatives. 14 In addition to professional development, the Company provides bank-paid and voluntary benefits to eligible employees.
(Total gross revenues consist of interest income on a fully taxable equivalent basis and noninterest income.) Our lending philosophy is to minimize credit losses by following strict credit approval standards, diversifying our loan portfolio by both type and geography and conducting ongoing review and management of the loan portfolio.
(Total gross revenues consist of interest income on a fully taxable equivalent basis and noninterest income.) Our lending philosophy is to minimize credit losses by following strict credit approval standards, diversifying our loan portfolio by both type, size and geography and conducting ongoing review and management of the loan portfolio.
The FDIC has promulgated risk-based capital guidelines similar to, and with the same underlying purposes as, those established by the Federal Reserve with respect to bank holding companies. Under those guidelines, assets and off-balance sheet items are assigned to broad risk categories, each with appropriate weights.
The FDIC has promulgated risk-based capital guidelines similar to, and with the same underlying purposes as, those established by the Federal Reserve with respect to bank holding companies. 10 Under those guidelines, assets and off-balance sheet items are assigned to broad risk categories, each with appropriate weights.
Such compliance programs supplement existing compliance requirements, also applicable to financial institutions, under the Bank Secrecy Act and the Office of Foreign Assets Control regulations. The Bank has established policies and procedures to ensure compliance with federal anti-money laundering laws and regulations. The Volcker Rule .
Such compliance programs supplement existing compliance requirements, also applicable to financial institutions, under the Bank Secrecy Act and the Office of Foreign Assets Control regulations. The Bank has established policies and procedures to ensure compliance with federal anti-money laundering laws and regulations. 13 The Volcker Rule .
The Federal Reserve provided guidance on the criteria it uses to evaluate a bank holding company’s request to pay dividends in an aggregate amount that will exceed the company’s earnings for the period in which the dividends will be paid.
The Federal Reserve has provided guidance on the criteria it uses to evaluate a bank holding company’s request to pay dividends in an aggregate amount that will exceed the company’s earnings for the period in which the dividends will be paid.
Our construction loan portfolio consists of loans for the construction of single family residential properties, multi-family properties and commercial projects. Maturities for construction loans generally range from 4 six to 12 months for residential property and from 24 to 36 months for non-residential and multi-family properties.
Our construction loan portfolio consists of loans for the construction of single family residential properties, multi-family properties and commercial projects. Maturities for construction loans generally range from six to 12 months for residential property and from 24 to 36 months for non-residential and multi-family properties.
In the event of our bankruptcy, any commitment by us to a 8 federal bank regulatory agency to maintain the capital of the Bank will be assumed by the bankruptcy trustee and entitled to a priority of payment. Acquisitions by Bank Holding Companies .
In the event of our bankruptcy, any commitment by us to a federal bank regulatory agency to maintain the capital of the Bank will be assumed by the bankruptcy trustee and entitled to a priority of payment. Acquisitions by Bank Holding Companies .
As noted above, we also originate residential real estate loans with the intention of selling them in the secondary market to third party private investors or directly to government sponsored entities.
As noted above, we also originate residential real estate loans with the intention of selling them in the secondary market to third party investors or directly to government sponsored entities.
Generally, cash flows from maturities and calls of our investment securities that are not used to fund loan growth or repay debt are reinvested in investment securities. We also hold investments in corporate debt and pooled trust preferred securities. At December 31, 2023, the Company’s investment securities included both available for sale and held to maturity classifications.
Generally, cash flows from maturities and calls of our investment securities that are not used to fund loan growth or repay debt are reinvested in investment securities. We also hold investments in corporate debt and pooled trust preferred securities. At December 31, 2024, the Company’s investment securities included both available for sale and held to maturity classifications.
The CFPB has also issued rules 12 integrating the required disclosures under the Truth in Lending Act, the Truth in Savings Act and the Real Estate Settlement Procedures Act.
The CFPB has also issued rules integrating the required disclosures under the Truth in Lending Act, the Truth in Savings Act and the Real Estate Settlement Procedures Act.
As a threshold matter, we generally limit loan-to-value and loan-to-cost ratios to regulatory guidance of 85% of when-completed appraised values for owner-occupied and investor-owned residential or commercial properties, with the exception of those loans with clearly definable risk mitigants.
As a threshold matter, we generally limit loan-to-value and loan-to-cost ratios to regulatory guidance of 85% of when-completed appraised values for owner-occupied and investor-owned residential or commercial properties, with the exception of those loans with clearly defined risk mitigants.
Legislation and regulatory action to implement new laws and regulations and to revise existing federal and Mississippi banking, consumer protection, securities and other applicable laws and regulations, sometimes in a substantial manner, are continually under consideration by the U.S. Congress, state legislatures and federal and state regulatory agencies.
Legislation and regulatory action to implement new laws and regulations and to revise or repeal existing federal and Mississippi banking, consumer protection, securities and other applicable laws and regulations, sometimes in a substantial manner, are continually under consideration by the U.S. Congress, state legislatures and federal and state regulatory agencies.
The resulting capital ratios represent capital as a percentage of total risk-weighted assets and off-balance sheet items. Capital requirements for insured depository institutions are countercyclical, such that capital requirements increase in times of economic expansion and decrease in times of economic contraction. - Current Guidelines .
The resulting capital ratios represent capital as a percentage of total risk-weighted assets and off-balance sheet items. Capital requirements for insured depository institutions are countercyclical, such that capital requirements increase in times of economic expansion and decrease in times of economic contraction.
In addition to the origination channels mentioned above, mortgage loans held for sale are also originated through wholesale relationships where we purchase loans from smaller banks, credit unions and brokerage shops.
In addition to the origination channels mentioned above, mortgage loans held for sale are also originated through wholesale relationships where we purchase loans from smaller banks, credit unions and brokerage agencies.
In this Annual Report, Renasant Bank is sometimes referred to as the “Bank,” while Renasant Insurance, Inc. is referred to as “Renasant Insurance,” Park Place Capital Corporation is referred to as “Park Place Capital,” and Continental Republic Capital, LLC is referred to as “Republic Business Credit.” Our vision is to be the financial services advisor and provider of choice in each community we serve.
In this Annual Report, Renasant Bank is sometimes referred to as the “Bank,” while Park Place Capital Corporation is referred to as “Park Place Capital,” and Continental Republic Capital, LLC is referred to as “Republic Business Credit.” Our vision is to be the financial services advisor and provider of choice in each community we serve.
Accordingly, the following discussion must be read in light of the enactment of any new federal or state banking laws or regulations or any amendment or repeal of existing laws or regulations, or any change in the policies of the regulatory agencies with jurisdiction over the Company’s operations, after the date of this Annual Report on Form 10-K.
Accordingly, the following discussion must be read in light of the enactment of any new federal or state banking laws or regulations or any amendment or repeal of existing laws, regulations or regulatory guidance, or any change in the policies or the enforcement focus of the regulatory agencies with jurisdiction over the Company’s operations, after the date of this Annual Report on Form 10-K.
We believe our policy and procedures currently comply with all applicable laws and regulations, and we continually monitor federal and state laws, as well as changes in the nature and scope of our operations, so that any necessary changes in our privacy policy and procedures can be enacted in a timely manner. Anti-Money Laundering .
We believe our policy and procedures currently comply with all applicable laws and regulations, and we continually monitor federal and state laws, as well as changes in the nature and scope of our operations, so that any necessary changes in our privacy policy and procedures can be enacted in a timely manner. Anti-Money Laundering/Combatting the Financing of Terrorism.
Federal Reserve regulations also limit the amount the Bank may loan to the Company unless such loans are collateralized by specific obligations. 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. Capital Adequacy Guidelines .
Federal Reserve regulations also limit the amount the Bank may loan to the Company unless such loans are collateralized by specific obligations. 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. Capital Adequacy Guidelines; Prompt Corrective Action.
Renasant Bank, in turn, owns and operates Renasant Insurance, Inc., a Mississippi corporation with operations in Mississippi, Park Place Capital Corporation, a Tennessee corporation with operations across our footprint, and Continental Republic Capital, LLC (doing business as “Republic Business Credit”), a Louisiana limited liability company with nationwide operations.
Renasant Bank, in turn, owns and operates Park Place Capital Corporation, a Tennessee corporation with operations across our footprint, and Continental Republic Capital, LLC (doing business as “Republic Business Credit”), a Louisiana limited liability company with nationwide operations.
The capital requirements applicable to the Company are substantially similar to those imposed on the Bank under FDIC regulations, described below under the heading “Supervision and Regulation of Renasant Bank - Capital Adequacy Guidelines.” Payment of Dividends; Source of Strength .
The capital requirements applicable to the Company are substantially similar to those imposed on the Bank under FDIC regulations, described below under the heading “Supervision and Regulation of Renasant Bank - Capital Adequacy Guidelines; Prompt Corrective Action.” Payment of Dividends; Source of Strength .
Income generated by our lending activities, in the form of interest income, loan-related fees, and income from the sale and servicing of mortgage loans, comprises a substantial portion of our revenue, accounting for approximately 82.8%, 75.1% and 78.7% of our total gross revenues in 2023, 2022 and 2021, respectively.
Income generated by our lending activities, in the form of interest income, loan-related fees, and income from the sale and servicing of mortgage loans, comprises a substantial portion of our revenue, accounting for approximately 77.7%, 82.8% and 75.1% of our total gross revenues in 2024, 2023 and 2022, respectively.
Commercial, financial and agricultural loans (referred to as “C&I loans”), which accounted for approximately 15.15% of our total loans at December 31, 2023, are customarily granted to established local business customers in our market area on a fully collateralized basis to meet their credit needs. The terms and loan structure are dependent on the collateral and strength of the borrower.
Commercial, financial and agricultural loans (referred to as “C&I loans”), which accounted for approximately 14.64% of our total loans at December 31, 2024, are customarily granted to established local business customers in our market area on a fully collateralized basis to meet their credit needs. The terms and loan structure are dependent on the collateral and strength of the borrower.
Installment loans to individuals (or “consumer loans”), which represented approximately 0.84% of our total loans at December 31, 2023, are granted to individuals for the purchase of personal goods. Loss or decline of income by the borrower due to unplanned occurrences represents the primary risk of default to us.
Installment loans to individuals (or “consumer loans”), which represented approximately 0.70% of our total loans at December 31, 2024, are granted to individuals for the purchase of personal goods. Loss or decline of income by the borrower due to unplanned occurrences represents the primary risk of default to us.
Equipment financing loans (or “lease financing loans”), which represented approximately 0.94% of our total loans at December 31, 2023, are granted to provide capital to businesses for commercial equipment needs. These loans are generally granted for periods ranging between two and five years at fixed rates of interest.
Equipment financing loans (or “lease financing loans”), which represented approximately 0.70% of our total loans at December 31, 2024, are granted to provide capital to businesses for commercial equipment needs. These loans are generally granted for periods ranging between two and five years at fixed rates of interest.
Investment income generated by our investment activities, both taxable and tax-exempt, accounted for approximately 1.1%, 7.9% and 5.1% of our total gross revenues in 2023, 2022 and 2021, respectively. 5 Deposit Services . We offer a broad range of deposit services and products to our consumer and commercial clients.
Investment income generated by our investment activities, both taxable and tax-exempt, accounted for approximately 3.9%, 1.1% and 7.9% of our total gross revenues in 2024, 2023 and 2022, respectively. Deposit Services . We offer a broad range of deposit services and products to our consumer and commercial clients.
Fees generated through the deposit services we offer accounted for approximately 5.7%, 7.6% and 7.2% of our total gross revenues in 2023, 2022 and 2021, respectively. Excluding brokered deposits, the deposits held by the Bank have been primarily generated within the market areas where our branches are located.
Fees generated through the deposit services we offer accounted for approximately 4.9%, 5.7% and 7.6% of our total gross revenues in 2024, 2023 and 2022, respectively. Excluding brokered deposits, the deposits held by the Bank have been primarily generated within the market areas where our branches are located.
In addition, the Federal Reserve, the FDIC and the Office of the Comptroller of the Currency rules for calculating risk-weighted assets have been revised in recent years to enhance risk sensitivity and to incorporate certain international capital standards of the Basel Committee on Banking Supervision.
In addition, the Federal Reserve, the FDIC and the Office of the Comptroller of the Currency rules for calculating risk-weighted assets have been set to enhance risk sensitivity and to incorporate certain international capital standards of the Basel Committee on Banking Supervision.
As of December 31, 2023, we had 181 banking, lending and mortgage offices located throughout our markets in the Southeast, while our subsidiary Republic Business Credit had four stand-alone offices in California, Illinois, Louisiana and Texas.
As of December 31, 2024, we had 180 banking, lending and mortgage offices located throughout our markets in the Southeast, while our subsidiary Republic Business Credit had four stand-alone offices in California, Illinois, Louisiana and Texas.
For a detailed discussion of the Company’s capital ratios, see Note 20, “Regulatory Matters,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report. 10 - Prompt Corrective Action .
For a detailed discussion of the Company’s capital ratios, see Note 20, “Regulatory Matters,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report.
We are active in the real estate – 1-4 family mortgage area (referred to as “residential real estate loans”), with approximately 27.85% of our total loans at December 31, 2023, being residential real estate loans. In addition, in 2023, we originated for sale on the secondary market approximately $2.1 billion in residential real estate loans 3 through our Mortgage division.
We are active in the real estate – 1-4 family mortgage area (referred to as “residential real estate loans”), with approximately 27.07% of our total loans at December 31, 2024, being residential real estate loans. In addition, in 2024, we originated for sale on the secondary market approximately $2.0 billion in residential real estate loans through our Mortgage division.
We generally obtain loan guarantees from financially capable parties to the transaction based on a review of the guarantor’s financial statements. — Real Estate – Construction . Our real estate – construction loans (“construction loans”) represented approximately 10.79% of our total loans at December 31, 2023.
We generally obtain loan guarantees from financially capable parties to the transaction based on a review of the guarantor’s financial statements. — Real Estate – Construction . Our real estate – construction loans (“construction loans”) represented approximately 8.49% of our total loans at December 31, 2024.
We do not have any foreign operations. Operations of Community Banks Substantially all of our business activities are conducted through, and substantially all of our assets and revenues are derived from, the operations of our community banks, which offer a complete range of banking and financial services to individuals and to businesses of all sizes.
Operations of Community Banks Substantially all of our business activities are conducted through, and substantially all of our assets and revenues are derived from, the operations of our community banks, which offer a complete range of banking and financial services to individuals and to businesses of all sizes.
The foregoing criteria are commonly referred to as the 100/300 Test. As of December 31, 2023, our ADC loans represented 83% of our total bank level capital, and our total CRE loans represented 281% of our Bank level capital. Safety and Soundness .
The foregoing criteria are commonly referred to as the 100/300 Test. As of December 31, 2024, our ADC loans represented 65% of our total bank level capital, and our total CRE loans represented 273% of our Bank level capital. Safety and Soundness .
The Company does not actively market or originate subprime mortgage loans. — Real Estate – Commercial Mortgage . Our real estate – commercial mortgage loans (“commercial real estate loans”) represented approximately 44.43% of our total loans at December 31, 2023.
The Company does not actively market or originate subprime mortgage loans. — Real Estate – Commercial Mortgage . Our real estate – commercial mortgage loans (“commercial real estate loans”) represented approximately 48.40% of our total loans at December 31, 2024.
Park Place Capital also provides administrative and compliance services for certain mutual funds. For 2023, the Wealth Management segment generated total revenue of $25.3 million, or 2.8% of the Company’s total gross revenues.
Park Place Capital also provides administrative and compliance services for certain mutual funds. 6 For 2024, the Wealth Management segment generated total revenue of $25.9 million, or 2.4% of the Company’s total gross revenues.
Also, we are subject to a surcharge designed to increase the DIF to specified levels. 9 The FDIC may terminate the deposit insurance of any insured depository institution, including the Bank, if it determines after a hearing that the institution has engaged or is engaging in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, order or any condition imposed by an agreement with the FDIC.
The FDIC may terminate the deposit insurance of any insured depository institution, including the Bank, if it determines after a hearing that the institution has engaged or is engaging in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, order or any condition imposed by an agreement with the FDIC.
In all jurisdictions, the applicable laws and regulations are subject to amendment by regulatory authorities. Generally, such authorities are vested with relatively broad discretion to grant, renew and revoke licenses and approvals and to implement regulations. Licenses may be denied or revoked for various reasons, including the violation of such regulations, conviction of crimes and the like.
Generally, such authorities are vested with relatively broad discretion to grant, renew and revoke licenses and approvals and to implement regulations. Licenses may be denied or revoked for various reasons, including the violation of such regulations, conviction of crimes and the like.
Supervision and Regulation of our Wealth Management and Insurance Operations Our Wealth Management and Insurance operations are subject to licensing requirements and regulation under the laws of the United States and the states in which they operate. The laws and regulations are primarily for the benefit of clients.
Supervision and Regulation of our Wealth Management Operations Our Wealth Management operations are subject to licensing requirements and regulation under the laws of the United States and the states in which they operate. The laws and regulations are primarily for the benefit of clients. In all jurisdictions, the applicable laws and regulations are subject to amendment by regulatory authorities.
Loans secured by residential real estate in which the property is rented to tenants or is not otherwise the principal residence of the borrower are referred to as “rental/investment” 1-4 family mortgages. We also offer loans for the preparation of residential real property prior to construction (referred to as “residential land development loans”).
Loans secured by residential real estate in which the property is the principal residence of the borrower are referred to as “primary” 1-4 family mortgages. Loans secured by residential real estate in which the property is rented to tenants or is not otherwise the principal residence of the borrower are referred to as “rental/investment” 1-4 family mortgages.
We retain residential real estate loans in our portfolio when the Bank has sufficient liquidity to fund the needs of established customers and when rates are favorable to retain the loans. Retained portfolio loans are made primarily through the Bank’s variable-rate mortgage product offerings.
The decision to retain residential real estate loans in our portfolio is dependent upon whether the Bank has sufficient liquidity to fund the needs of customers and if rates are favorable to retain the loans. Retained portfolio loans are made primarily through the Bank’s variable-rate mortgage product offerings. We offer both first and second mortgages on residential real estate.
The following is a general description of each of the principal types of loans in our loan portfolio, the relative credit risk of each type of loan and the steps we take to reduce such risk. Our loans are primarily generated within the market areas where our offices are located. — Commercial, Financial and Agricultural Loans .
The following is a general description of each of the principal types of loans in our loan portfolio, the relative credit risk of each type of loan and the steps we take to reduce such risk.
Centered on these values was the development of our strategic plan, which focuses on attracting high quality, organic loan growth and increasing our noninterest income, improving our operating efficiency and enhancing our technological capabilities, remaining opportunistic, and achieving financial performance targets.
Our strategic plan is centered on these values; the plan focuses on attracting high quality deposits, generating organic loan growth and increasing our noninterest income, improving our operating efficiency and enhancing our technological capabilities, remaining opportunistic, and achieving financial performance targets, both on an absolute basis and relative to our peer institutions.
Wealth Management operations are headquartered in Tupelo, Mississippi, and Birmingham, Alabama, but our products and services are available to customers in all of our markets through our community banks. Operations of Insurance Renasant Insurance is a full-service insurance agency offering all lines of commercial and personal insurance through major carriers.
Wealth Management operations are headquartered in Tupelo, Mississippi, and Birmingham, Alabama, but our products and services are available to customers in all of our markets through our community banks.
Loans are originated through either our commercial lending groups or personal bankers depending on the relationship and type of service or product desired. Our commercial lending group provides banking services to corporations or other business customers and originates loans for general corporate purposes, such as financing for commercial and industrial projects or income producing commercial real estate.
Our commercial lending group provides banking services to corporations or other business customers and originates loans for general corporate purposes, such as financing for commercial and industrial projects or 3 income producing commercial real estate.
All of these 6 agencies compete in the delivery of personal and commercial product lines. There is no dominant insurance agency in our markets. Supervision and Regulation General The U.S. banking industry is highly regulated under federal and state law. We are a bank holding company registered under the Bank Holding Company Act of 1956, as amended (the “BHC Act”).
No particular company or group of companies dominates this industry in our markets. Supervision and Regulation General The U.S. banking industry is highly regulated under federal and state law. We are a bank holding company registered under the Bank Holding Company Act of 1956, as amended (the “BHC Act”).
The FDIC will not approve such an application if the bank does not meet its minimum capital requirements or the proposed activities present a significant risk to the deposit insurance fund. 100/300 Test .
The FDIC will not approve such an application if the bank does not meet its minimum capital requirements or the proposed activities present a significant risk to the deposit insurance fund. 100/300 Test . Federal banking regulators use certain criteria to identify financial institutions that are potentially exposed to significant commercial real estate (“CRE”) concentration risk.
Responsibility for the management of the Bank remains with the Board of Directors and officers of the Bank; however, management services rendered by the Company to the Bank are intended to supplement internal management and expand the scope of banking services normally offered by the Bank. 2 Operations The Company has three reportable segments: a Community Banks segment, an Insurance segment and a Wealth Management segment.
Responsibility for the management of the Bank remains with the Board of Directors and officers of the Bank; however, management services rendered by the Company to the Bank are intended to supplement internal management and expand the scope of banking services normally offered by the Bank. Proposed Merger with The First Bancshares, Inc.
In the event that an insured state-chartered bank fails to submit or fails in any material respect to implement a compliance plan within the time allowed by the federal banking agency, Section 39 of the FDIA provides that the FDIC must order the institution to correct the deficiency.
In the event that an insured state-chartered bank fails to submit or fails in any material respect to implement a compliance plan within the time allowed by the federal banking agency, Section 39 of the FDIA provides that the FDIC must order the institution to correct the deficiency. 12 The FDIC may also (1) restrict asset growth; (2) require the bank to increase its ratio of tangible equity to assets; (3) restrict the rates of interest that the bank may pay; or (4) take any other action that would better carry out the purpose of prompt corrective action.
In addition, the FDIC can impose special assessments in certain instances.
In addition, the FDIC can impose special assessments in certain instances. Also, we are subject to a surcharge designed to increase the DIF to specified levels.
For example, residential mortgages are risk-weighted between 35% and 200%, depending on the mortgage’s loan-to-value ratio and whether the mortgage falls into one of two categories based on eight criteria that include the term, use of negative amortization and balloon payments, certain rate increases and documented and verified borrower income, while a 150% risk weight applies to both certain high volatility commercial real estate acquisition, development and construction loans as well as non-residential mortgage loans 90 days past due or on nonaccrual status.
These rules affect the calculation of the denominator of a banking organization’s risk-based capital ratios to reflect the higher-risk nature of certain types of loans. For example, a 150% risk weight applies to both certain high volatility commercial real estate acquisition, development and construction loans as well as non-residential mortgage loans 90 days past due or on nonaccrual status.
For 2023, Renasant Insurance generated total revenue of $14.2 million, or 1.5% of the Company’s total gross revenues, and operated eight offices throughout north and north central Mississippi. Competition Community Banks Vigorous competition exists in all major product and geographic areas in which we conduct banking business.
For 2024, Renasant Insurance, Inc. generated total revenue of $7.4 million, or 0.1% of the Company’s total gross revenues, and operated eight offices throughout north and north central Mississippi. Renasant Insurance, Inc. now leases all of these offices to the party that acquired its insurance agency business.
At December 31, 2023, 14 employees of the Bank served as officers of the Company in addition to their positions with the Bank. To measure our employees’ overall satisfaction with their job and their experience working for the Company, we surveyed employees at the end of 2023.
To measure our employees’ overall satisfaction with their job and their experience working for the Company, we periodically survey our employees, with the most recent survey completed at the end of 2023. The participation rate was over 90%, and the survey results generally affirmed that our employees were satisfied with overall working conditions at the Company.
As of December 31, 2023, we employed more than 2,300 people throughout all of our segments on a full-time equivalent basis primarily within the Bank (inclusive of employees in our Community Banks and Wealth Management segments, such as employees of Bank subsidiaries Park Place Capital and Republic Business Credit). Renasant Insurance employed 63 individuals.
As of December 31, 2024, we employed more than 2,200 people throughout all of our segments on a full-time equivalent basis. At December 31, 2024, 14 employees of the Bank served as officers of the Company in addition to their positions with the Bank.
Removed
We offer both first and second mortgages on residential real estate. Loans secured by residential real estate in which the property is the principal residence of the borrower are referred to as “primary” 1-4 family mortgages.
Added
Renasant Bank also owns Renasant Insurance, Inc., a Mississippi corporation, which was engaged in the insurance agency business until Renasant Bank’s sale of substantially all of the assets of Renasant Insurance, Inc. on July 1, 2024. More information about this transaction can be found in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Removed
No particular company or group of companies dominates this industry in our markets. Insurance We encounter strong competition in the markets in which we conduct insurance operations. Through our insurance subsidiary, we compete with independent insurance agencies and agencies affiliated with other banks and/or insurance carriers.
Added
On July 29, 2024, the Company and The First Bancshares, Inc., a Mississippi corporation (“The First”), entered into an agreement and plan of merger, dated as of July 29, 2024, pursuant to which, subject to the terms and conditions set forth therein, among other things, The First will merge with and into the Company, with the Company as the surviving entity in such merger, and immediately thereafter The First’s subsidiary bank and the Bank will enter into a subsidiary plan of merger, pursuant to which The First’s subsidiary bank will merge with and into the Bank, with the Bank as the surviving entity in such merger.
Removed
These revisions affect the calculation of the denominator of a banking organization’s risk-based capital ratios to reflect the higher-risk nature of certain types of loans.
Added
Subject to the terms and conditions of the merger agreement, at the effective time of the merger, each outstanding share of common stock of The First will be converted into the right to receive one share of common stock of the Company.
Removed
Section 38 of the FDIA and related regulations also specify circumstances under which the FDIC may reclassify a well-capitalized bank as adequately capitalized and may require an adequately capitalized bank or an undercapitalized bank to comply with supervisory actions as if it were in the next lower category (except that the FDIC may not reclassify a significantly undercapitalized bank as critically undercapitalized).
Added
The shareholders of the Company and The First approved the merger at special meetings held on October 22, 2024. The transaction is expected to close in the first half of 2025 and is subject to certain closing conditions, including the receipt of required regulatory approvals.
Removed
In response to rapid growth in commercial real estate (“CRE”) loan concentrations and observed weaknesses in risk management practices at some financial institutions, the FDIC, the Federal Reserve, and the Office of the Comptroller of the Currency published Joint Guidance on Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices (which we refer to as the “CRE guidance”).
Added
Operations In the first half of 2024, the Company had three reportable segments: a Community Banks segment, an Insurance segment and a Wealth Management segment. The Company no longer has an Insurance segment as a result of the sale of the Company’s insurance agency business in July 2024. We do not have any foreign operations.
Removed
The CRE guidance is intended to promote sound risk management practices and appropriate levels of capital to enable institutions to engage in CRE lending in a safe and sound manner. Federal banking regulators use certain criteria to identify financial institutions that are potentially exposed to significant CRE concentration risk.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

52 edited+46 added−22 removed120 unchanged
Biggest changeAt December 31, 2023, we had approximately $6.8 billion in commercial real estate loans, representing approximately 55.22% of our loans outstanding on that date, as follows: (thousands) December 31, 2023 Commercial Real Estate Owner-occupied $ 1,648,961 Non-owner occupied 3,733,174 Construction 1,333,397 Land Development: Commercial mortgage 104,415 Total Commercial real estate loans $ 6,819,947 As discussed under the heading “Supervision and Regulation” in Item 1, Business, above, the federal banking agencies promulgated guidance regarding when an institution will be deemed to potentially have significant CRE concentration risk exposure, as indicated by the results of the 100/300 Test.
Biggest changeAs discussed under the heading “Supervision and Regulation” in Item 1, Business, above, the federal banking agencies promulgated guidance regarding when an institution will be deemed to potentially have significant CRE concentration risk exposure, as indicated by the results of the 100/300 Test.
We are subject to market risk because of the following factors: — Assets and liabilities may mature or reprice at different times. For example, if assets reprice more slowly than liabilities and interest rates are generally rising, earnings may decline. — Assets and liabilities may reprice at the same time but by different amounts.
We are subject to market risk because of the following factors: — Assets and liabilities mature or reprice at different times. For example, if assets reprice more slowly than liabilities and interest rates are generally rising, earnings may decline. — Assets and liabilities reprice at the same time but by different amounts.
Also, risk occurs when assets and liabilities have similar repricing frequencies but are tied to different market interest rate indices that may not move in tandem. — Short-term and long-term market interest rates may change by different amounts, i.e., the shape of the yield curve may affect new loan yields and funding costs differently. — The remaining maturity of various assets and liabilities may shorten or lengthen as interest rates change.
Also, risk occurs when assets and liabilities have similar repricing frequencies but are tied to different market interest rate indices that may not move in tandem. — Short-term and long-term market interest rates change by different amounts, i.e., the shape of the yield curve may affect new loan yields and funding costs differently. — The remaining maturity of various assets and liabilities shorten or lengthen as interest rates change.
If prepayment rates on our loans increase, we would be required to amortize net premiums into income over a shorter period of time, thereby reducing the corresponding asset yield and net interest income. — Interest rates may have an indirect impact on loan demand, credit losses, loan origination volume, the value of financial assets and financial liabilities, gains and losses on sales of securities and loans, the value of mortgage servicing rights and other sources of earnings.
If prepayment rates on our loans increase, we would be required to amortize net premiums into income over a shorter period of time, thereby reducing the corresponding asset yield and net interest income. — Interest rates have an indirect impact on loan demand, credit losses, loan origination volume, the value of financial assets and financial liabilities, gains and losses on sales of securities and loans, the value of mortgage servicing rights and other sources of earnings.
Deficient performance may result from the vendor’s failure to meet its service standards under the contract (due to, among other reasons, insufficient support for its existing products and services or a change in its strategic focus) or simply because the vendor’s products or services do not include the functionality, convenience or adaptability necessary to compete effectively or efficiently with other 22 providers of the financial services we offer.
Deficient performance may result from the vendor’s failure to meet its service standards under the contract (due to, among other reasons, insufficient support for its existing products and services or a change in its strategic focus) or simply because the vendor’s products or services do not include the functionality, convenience or adaptability necessary to compete effectively or efficiently with other providers of the financial services we offer.
Weak economic conditions are characterized by deflation, fluctuations in debt and equity capital markets, a lack of liquidity and/or depressed prices in the secondary market for mortgage loans, increased delinquencies on mortgage, consumer and C&I 21 loans, residential and commercial real estate price declines and lower home sales and commercial activity.
Weak economic conditions are characterized by deflation, fluctuations in debt and equity capital markets, a lack of liquidity and/or depressed prices in the secondary market for mortgage loans, increased delinquencies on mortgage, consumer and C&I loans, residential and commercial real estate price declines and lower home sales and commercial activity.
The data breach experienced by these vendors involved the names, account numbers, Social Security numbers and other nonpublic personal information of a relatively small number of our customers. For each incident, the Company caused notices of the data breach to be delivered to impacted clients, and we notified federal and state regulatory authorities about the incident.
The data breach experienced by these vendors involved the names, account numbers, Social Security numbers and other nonpublic personal information of a relatively small number of our customers. For each incident, the Company caused notices of the data breach to be delivered to impacted clients and notified federal and state regulatory authorities about the incident.
The information under Note 19, “Restrictions on Cash, Securities, Bank Dividends, Loans or Advances,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report provides a detailed discussion about the restrictions governing the Bank’s ability to transfer funds to us.
The information under Note 19, “Restrictions on Cash, Securities, Bank Dividends, Loans or Advances,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and 24 Supplementary Data, in this report provides a detailed discussion about the restrictions governing the Bank’s ability to transfer funds to us.
We have the right to defer distributions on our junior subordinated debentures (and the related trust preferred securities) for up to five years, during which time no dividends may be paid on our common stock. 26 An investment in our common stock is not an insured deposit.
We have the right to defer distributions on our junior subordinated debentures (and the related trust preferred securities) for up to five years, during which time no dividends may be paid on our common stock. An investment in our common stock is not an insured deposit.
Such factors may cause us to alter our growth and 24 expansion plans or slow or halt the growth and expansion process, which may prevent us from entering certain target markets or allow competitors to gain or retain market share in our existing or expected markets.
Such factors may cause us to alter our growth and expansion plans or slow or halt the growth and expansion process, which may prevent us from entering certain target markets or allow competitors to gain or retain market share in our existing or expected markets.
Any of the foregoing may, in turn, necessitate that we hire 19 additional employees, acquire or develop new software, implement new processes and procedures and otherwise incur substantial additional costs as part of our efforts to comply with our legal and regulatory obligations.
Any of the foregoing may, in turn, necessitate that we hire additional employees, acquire or develop new software, implement new processes and procedures and otherwise incur 18 substantial additional costs as part of our efforts to comply with our legal and regulatory obligations.
Also, we may have underestimated the impact of known risks or overestimated the effectiveness of the policies and procedures we have implemented to mitigate these risks. Increases in the scope and complexity of our operations and our reliance, among other things, have increased the level of risk that we must manage.
Also, we may have underestimated the impact of known risks or overestimated the effectiveness of the policies and procedures we have implemented to mitigate these risks. Increases in the scope and complexity of our operations and our reliance on vendors, among other things, have increased the level of risk that we must manage.
In addition to the general risks associated with our growth plans and the particular risks associated with FDIC-assisted transactions, both of which are highlighted above, in general acquiring other banks, businesses or branches involves various risks commonly associated with acquisitions, including, among other things: 25 — the time and costs associated with identifying and evaluating potential acquisition and merger targets; — inaccuracies in the estimates and judgments used to evaluate credit, operations, management and market risks with respect to the target institution; — the time and costs of evaluating new markets, hiring experienced local management and opening new bank locations, and the time lags between these activities and the generation of sufficient assets and deposits to support the costs of the expansion; — our ability to finance an acquisition and possible dilution to our existing shareholders; — the diversion of our management’s attention to the negotiation of a transaction; — the incurrence of an impairment of goodwill associated with an acquisition and adverse effects on our results of operations; — entry into new markets where we lack experience; and — risks associated with integrating the operations and personnel of acquired businesses.
In addition to the general risks associated with our growth plans and the particular risks associated with FDIC-assisted transactions, both of which are highlighted above, in general acquiring other banks, businesses or branches involves various risks commonly associated with acquisitions, including, among other things: • the time and costs associated with identifying and evaluating potential acquisition and merger targets and negotiating a transaction; • inaccuracies in the estimates and judgments used to evaluate credit, operations, management and market risks with respect to the target institution; • the time and costs of evaluating new markets, hiring experienced local management and opening new bank locations, and the time lags between these activities and the generation of sufficient assets and deposits to support the costs of the expansion; • our ability to finance an acquisition and possible dilution to our existing shareholders; • the incurrence of an impairment of goodwill associated with an acquisition and adverse effects on our results of operations; • entry into new markets where we lack experience; and • risks associated with integrating the operations and personnel of acquired businesses.
Beginning in May 2023, the Company began receiving notices from a number of its vendors regarding the data breach related to the MOVEit Transfer software suffered by the vendor or a vendor to such vendor (the Company itself did not use the software).
For example, beginning in May 2023, the Company began receiving notices from a number of its vendors regarding the data breach related to the MOVEit Transfer software suffered by the vendor or a vendor to such vendor (the Company itself did not use the software).
The relevant vendors also offered complementary credit monitoring services to consumer customers. The Company has also heightened its monitoring of the vendors’ efforts to strengthen their information security infrastructure and prevent any further unauthorized access to its systems. Nonetheless, it is inevitable that additional breaches and attacks will occur in the future.
The relevant vendors also offered complementary credit monitoring services to consumer customers. The Company has also heightened its monitoring of the vendors’ efforts to strengthen their information security infrastructure and prevent any further unauthorized access to its systems. Nonetheless, it is inevitable that additional attacks will occur in the future, which may result in security breaches.
Furthermore, in a declining real estate market, we often will need to further increase our allowance for credit losses to address the deterioration in the value of the real estate securing our loans. Any of the foregoing could have a material adverse effect on our financial condition and results of operations.
Furthermore, in a declining real estate market, we often will need to further increase our allowance for credit losses to address the deterioration in the value of the real estate securing our loans. Any of the foregoing could have a material adverse effect on our financial condition and results of operations. We have significant credit exposure in commercial real estate.
Further changes in monetary policy, including changes in interest rates, could influence not only the interest we receive on loans and securities and the interest we pay on deposits and borrowings, but such changes could also affect (1) our ability to originate loans and generate deposits or access other sources of liquidity, which could reduce the amount of fee income generated, and (2) the fair value of our financial assets and liabilities.
Changes in monetary policy by the Federal Reserve, including changes in interest rates, could influence not only the interest we receive on loans and securities and the interest we pay on deposits and borrowings, but such changes could also affect (1) our ability to originate loans and generate deposits or access other sources of liquidity, which could reduce the amount of fee income generated, and (2) the fair value of our financial assets and liabilities.
Although the 100/300 Test is not a limit on our lending activity, if any future results of a 100/300 Test evaluation show us to have a potential CRE concentration risk, we may elect, or be required by our regulators, to adopt additional risk management practices or other limits on our activities, which could have a material adverse effect on our financial condition and results of operations.
Although the 100/300 Test is not a limit on our lending activity, if any future results of a 100/300 Test evaluation show us to have a potential CRE concentration risk, we may elect, or be required by our regulators, to adopt additional risk management practices or other limits on our activities, which could have a material adverse effect on our financial condition and results of operations. 20 We rely extensively on a number of vendors.
The success of our acquisitions depends on, among other things, our ability to realize anticipated cost savings and integrate the acquired assets and operations in a manner that permits growth opportunities and does not materially disrupt our existing customer relationships or result in decreased revenues resulting from any loss of customers.
The success of our acquisitions, including our proposed merger with The First, depends on, among other things, our ability to realize anticipated cost savings and integrate the acquired assets and operations in a manner that permits growth opportunities and does not materially disrupt our existing customer relationships or result in decreased revenues resulting from any loss of customers.
We rely extensively on a number of vendors. We rely on numerous vendors and other third party service providers (which we refer to collectively as “vendors”) to assist us in providing our lending, deposit and other financial services as well as the back-office functions that support our day-to-day operations.
We rely on numerous vendors and other third party service providers (which we refer to collectively as “vendors”) to assist us in providing our lending, deposit and other financial services as well as the back-office functions that support our day-to-day operations.
At December 31, 2023, approximately 83.07% of our loan portfolio had real estate as a primary or secondary component of the collateral securing the loan. The real estate provides an alternate source of repayment in the event of a default by the borrower.
At December 31, 2024, approximately 83.96% of our loan portfolio had real estate as a primary or secondary component of the collateral securing the loan. The real estate provides an alternate source of repayment in the event of a default by the borrower.
A discussion of the policies and procedures related to management’s process for determining the appropriate level of the allowance for credit losses is set forth under the headings “Critical Accounting Policies and Estimates” and “Risk Management – Credit Risk and Allowance for Credit Losses on Loans and Unfunded Commitments” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in this report. 16 We are subject to interest rate risk.
A discussion of the policies and procedures related to management’s process for determining the appropriate level of the allowance for credit losses is set forth under the headings “Critical Accounting Policies and Estimates” and “Risk Management – Credit Risk and Allowance for Credit Losses on Loans and Unfunded Commitments” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in this report.
Increases in interest rates on loans and/or weakening economic conditions could adversely impact the ability of borrowers to repay outstanding loans or the value of the collateral securing these loans. As of December 31, 2023, approximately 70.37% of our loan portfolio consisted of C&I, construction and commercial real estate loans.
Increases in interest rates on loans and/or weakening economic conditions could adversely impact the ability of borrowers to repay outstanding loans or the value of the collateral securing these loans. As of December 31, 2024, approximately 71.52% of our loan portfolio consisted of C&I, construction and commercial real estate loans.
Our earnings and cash flows are largely dependent upon our net interest income. Net interest income is the difference between interest earned on assets, such as loans and securities, and the cost of interest-bearing liabilities, such as deposits and borrowed funds.
We are subject to interest rate risk. Our earnings and cash flows are largely dependent upon our net interest income. Net interest income is the difference between interest earned on assets, such as loans and securities, and the cost of interest-bearing liabilities, such as deposits and borrowed funds.
The bank failures in March 2023 resulted in general uncertainty regarding the adequacy of liquidity of the banking sector generally and caused significant volatility in the stock prices of publicly-traded bank holding companies. These developments appear to have negatively impacted some customers’ confidence in banks, prompting some customers to maintain their deposits with larger financial institutions.
The bank failures in March 2023 resulted in general uncertainty regarding the adequacy of liquidity of the banking sector generally and caused significant volatility in the stock prices of publicly-traded bank holding companies. These developments appear to have prompted some customers to maintain their deposits with larger financial institutions.
We have grown our business through the acquisition of entire financial institutions and non-bank commercial finance companies and through de novo branching. We intend to continue pursuing this growth strategy for the foreseeable future.
We have grown our business through the acquisition of entire financial institutions and non-bank commercial finance 22 companies and through de novo branching. We intend to continue pursuing this growth strategy for the foreseeable future, including our proposed merger with The First.
For the 60 days ended February 16, 2024, the average daily trading volume for Renasant common stock was 242,165 shares per day. A public trading market having the desired characteristics of depth, liquidity and orderliness depends on the presence in the marketplace of willing buyers and sellers of our common stock at any given time.
For the 60 days ended February 18, 2025, the average daily trading volume for Renasant common stock was 533,278 shares per day. A public trading market having the desired characteristics of depth, liquidity and orderliness depends on the presence in the marketplace of willing buyers and sellers of our common stock at any given time.
Integration of an acquired business can be complex and costly, and we may encounter a number of difficulties, such as: — deposit attrition, customer loss and revenue loss; — the loss of key employees; — the disruption of our operations and business; — our inability to maintain and increase competitive presence; — possible inconsistencies in standards, control procedures and policies; and/or — unexpected problems with costs, operations, personnel, technology and credit.
Integration of an acquired business can be complex and costly, and we may encounter a number of difficulties, such as: • deposit attrition, customer loss and revenue loss; • the loss of key employees; • the disruption of our operations and business; • our inability to maintain and increase competitive presence; • possible inconsistencies in standards, control procedures and policies; 23 • unexpected problems with costs, operations, personnel, technology and credit; and/or • general market and economic conditions or governmental actions affecting the financial industry.
A significant portion of our loan portfolio is secured by real property. During the ordinary course of business, we may foreclose on and take title to properties securing certain loans. In doing so, there is a risk that hazardous or toxic substances could be found on these properties.
We are subject to environmental liability risk associated with lending activities. A significant portion of our loan portfolio is secured by real property. During the ordinary course of business, we may foreclose on and take title to properties securing certain loans. In doing so, there is a risk that hazardous or toxic substances could be 19 found on these properties.
If inflation persists, the value of our investment securities, particularly those with longer maturities, would decrease, although this effect can be less pronounced for floating rate instruments. Additionally, inflation increases the 17 cost of goods and services we use in our daily operations which increases our noninterest expense.
While this elevated level of inflation persists, the value of our investment securities, particularly those with longer maturities, decreases, although this effect can be less pronounced for floating rate instruments. Additionally, inflation increases the cost of goods and services we use in our daily operations which increases our noninterest expense.
Although we have not yet been subject to any sanctions or penalties that have had a material impact on our business, financial condition or results of operations, such material violations could occur, even though we have policies and procedures designed to prevent such violations.
Although we have not yet been subject to any sanctions or penalties that have had a material impact on our business, financial condition or results of operations, such material violations could occur, even though we have policies and procedures designed to prevent such violations. Higher FDIC deposit insurance premiums and assessments could adversely affect our financial condition.
This in turn could result in financial losses to us or our customers, lasting damage to our reputation, the violation of privacy or other laws and significant litigation risk, all of which could have a material adverse effect on our financial condition and results of operations. 23 The Company has experienced security breaches and cyber-attacks in the past.
This in turn could result in financial losses to us or our customers, lasting damage to our reputation, the violation of privacy or other laws and significant litigation risk, all of which could have a material adverse effect on our financial condition and results of operations.
While such breaches and attacks have not materially impacted the Company to date, future security breaches and cyber-attacks could result in serious and harmful consequences for the Company or its clients and customers. Our risk management framework may not be effective in mitigating risk and loss to us.
Future security breaches could result in serious and harmful consequences for the Company or its clients and customers. Our risk management framework may not be effective in mitigating risk and loss to us.
Failure to perform in any of these areas could significantly weaken our competitive position, which could adversely affect our growth and profitability, which, in turn, could have a material adverse effect on our financial condition and results of operations.
Failure to perform in any of these areas could significantly weaken our competitive position, which could adversely affect our growth and profitability, which, in turn, could have a material adverse effect on our financial condition and results of operations. We may be adversely affected by the soundness of other financial institutions and other third parties.
Higher FDIC deposit insurance premiums and assessments could adversely affect our financial condition. The FDIC is required under the Dodd-Frank Act to maintain the Deposit Insurance Fund at a minimum reserve ratio of 1.35%. The FDIC’s announced long-term goal is to maintain the reserve ratio at 2.00%.
The FDIC is required under the Dodd-Frank Act to maintain the Deposit Insurance Fund at a minimum reserve ratio of 1.35%. The FDIC’s announced long-term goal is to maintain the reserve ratio at 2.00%.
The interest rate increases in 2022 and 2023 were followed by significant outflows of funds from financial institutions (including the Company) into mutual funds and other investment vehicles, increasing the competition for, and cost of, deposits. Disintermediation could also result in material adverse effects on our financial condition and results of operations.
The interest rate increases in 2022 and 2023 were followed by significant outflows of funds from financial institutions (including the Company) into mutual funds and other investment vehicles, increasing the competition for, and cost of, deposits.
A discussion of our policies and procedures used to identify, assess and manage certain interest rate risk is set forth under the heading “Risk Management – Interest Rate Risk” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in this report. Inflation can have an impact on our business and our customers.
Disintermediation could also result in material adverse effects on our financial condition and results of operations. 16 A discussion of our policies and procedures used to identify, assess and manage certain interest rate risk is set forth under the heading “Risk Management – Interest Rate Risk” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in this report.
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.
The credit loss estimation process involves procedures to appropriately consider the unique characteristics of the Company’s loan portfolio segments, and the results of those evaluations are utilized in the Company’s estimation of expected credit losses.
Although management has policies and procedures to perform an environmental review before the loan is recorded and before initiating any foreclosure action on real property, these reviews may not be sufficient to detect all potential environmental hazards. The discontinuation of the London Interbank Offered Rate (“LIBOR”) as a financial benchmark may adversely affect our business and financial results.
Although management has policies and procedures to perform an environmental review before the loan is recorded and before initiating any foreclosure action on real property, these reviews may not be sufficient to detect all potential environmental hazards.
Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions and policies of various governmental and regulatory agencies and, in particular, the Federal Reserve. Over the course of 2022 and into 2023, the Federal Reserve significantly raised interest rates to combat inflationary conditions, and interest rates remain at these elevated levels.
Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions and policies of various governmental and regulatory agencies and, in particular, the Federal Reserve.
Our common stock is not a bank deposit and, therefore, is not insured against loss by the FDIC, any deposit insurance fund or by any other public or private entity.
Our common stock is not a bank deposit and, therefore, is not insured against loss by the FDIC, any deposit insurance fund or by any other public or private entity. Investment in our common stock is inherently risky and is subject to the same market forces that affect the price of common stock in any company.
The Company’s policies related to the monitoring of vendors and other third parties are discussed in detail below in Item IC, Cybersecurity, under the heading “Risk Management and Strategy - Diligence of Vendors and Other Third Parties.” A failure or breach of our communications and information security systems, or those of our vendors and customers, including as a result of cyber-attacks, could disrupt our business, result in the disclosure or misuse of confidential or proprietary information, damage our reputation and create significant financial and legal exposure for us.
A failure or breach of our communications and information security systems, or those of our vendors and customers, and cybersecurity incidents, including cyber-attacks, could disrupt our business, result in the disclosure or misuse of confidential or proprietary information, damage our reputation and create significant financial and legal exposure for us.
These threats, which are designed to obtain unauthorized access to confidential information belonging to the Company or its customers, manipulate or destroy data or systems, disrupt service on the Company’s systems, or steal money through the use of “ransomware,” are increasingly sophisticated and constantly evolving.
These threats, which are designed to obtain unauthorized access to confidential information belonging to the Company or its customers, manipulate or destroy data or systems, disrupt service on the Company’s systems, or steal money through the use of “ransomware” or unauthorized funds transfers, are increasing in frequency and sophistication and are often 21 facilitated by artificial intelligence tools.
As a result, we may be required to make further increases in our provision for credit losses and to charge off additional loans in the future, which could materially adversely affect our financial condition and results of operations.
As a result, we may be required to make further increases in our provision for credit losses and to charge off additional loans in the future, which could materially adversely affect our financial condition and results of operations. 15 In addition, bank regulatory agencies periodically review the allowance for credit losses and may require an increase in the provision for credit losses or the recognition of further loan charge-offs or downgrades, based on judgments different than those of management.
Finally, technology has lowered barriers to entry and made it possible for non-banks to offer products and services traditionally provided by banks, such as loans and automatic transfer and payment systems. 18 Our ability to compete successfully depends on a number of factors, including, among other things: — the ability to develop, maintain and build upon long-term customer relationships based on top quality service, high ethical standards and safe and sound assets; — the ability to expand our market position; — the scope, relevance and pricing of products and services offered to meet customer needs and demands; — the rate at which we introduce new products and services relative to our competitors; — customer satisfaction with our level of service; and — industry and general economic trends.
Many of these competitors have fewer regulatory constraints and may have lower cost structures than the Company. 17 Our ability to compete successfully depends on a number of factors, including, among other things: • the ability to develop, maintain and build upon long-term customer relationships based on top quality service, high ethical standards and safe and sound assets; • the ability to expand our market position; • the scope, relevance and pricing of products and services offered to meet customer needs and demands; • consolidation in the banking industry; • the impact of legislative, regulatory and technological changes; • the rate at which we introduce new products and services relative to our competitors; • customer satisfaction with our level of service; and • industry and general economic trends.
An increase in defaults in our CRE loan portfolio could have a material adverse effect on our financial condition and results of operations.
A general downturn in the local economy where the property is located, or a decline in occupancy rates in particular, could increase the likelihood of default. An increase in defaults in our CRE loan portfolio could have a material adverse effect on our financial condition and results of operations.
We have a concentration of credit exposure in commercial real estate. In addition to the general risks associated with our lending activities described above, including the effects of declines in real estate values, CRE loans are subject to additional risks. These loans depend on cash flows from the property to service the debt.
In addition to the general risks associated with our lending activities described above, CRE loans are subject to additional risks. These loans depend on cash flows from the property to service the debt. Cash flows, either in the form of rental income or the proceeds from sales of commercial real estate, may be affected significantly by general economic conditions.
These secondary sources, which generally have a higher cost than deposits, include Federal Home Loan Bank advances and federal funds lines of credit from correspondent banks. If the aforementioned sources of liquidity are not adequate for our needs, we may attempt to raise additional capital in the equity or debt markets.
These secondary sources, which generally have a higher cost than deposits, include Federal Home Loan Bank advances and federal funds lines of credit from correspondent banks.
If the concerns surrounding the banking sector persist, our businesses, financial condition and results of operations could be materially adversely impacted. We may be adversely affected by the soundness of other financial institutions and other third parties.
Competition for deposits remains intense, and the cost of funding, both for deposits and other sources of liquidity, has increased. If the concerns surrounding the banking sector persist, our businesses, financial condition and results of operations could be materially adversely impacted.
Inflation risk is the risk that the value of assets or income from investments will be less in the future as inflation decreases the value of money. As noted above, over the course of 2022 and 2023 the Federal Reserve raised interest rates in an effort to fight inflationary conditions.
Inflation can have an impact on our business and our customers. Inflation risk is the risk that the value of assets or income from investments will be less in the future as inflation decreases the value of money.
Our ability to raise additional capital, if needed, will depend on conditions in such markets at that time, which are outside our control, and on our financial performance.
If we are unable to maintain adequate liquidity, we may attempt to raise additional capital in the equity or debt markets, the success of which will depend on market conditions outside our control and on our financial performance.
Our C&I, construction and commercial real estate loan portfolios are discussed in more detail under the heading “Operations – Operations of Community Banks” in Item 1, Business, in this report. Our allowance for credit losses may be insufficient, and we may be required to further increase our provision for credit losses.
Our allowance for credit losses may be insufficient, and we may be required to further increase our provision for credit losses.
Removed
In addition, bank regulatory agencies periodically review the allowance for credit losses and may require an increase in the provision for credit losses or the recognition of further loan charge-offs, based on judgments different than those of management.
Added
As noted above, over the course of 2022 and 2023 the Federal Reserve raised interest rates in an effort to fight inflationary conditions. Although the rate of inflation declined in 2024, it remains elevated above the Federal Reserve’s goal of inflation averaging 2% over time.
Removed
Many of these competitors have fewer regulatory constraints and may have lower cost structures than the Company. The information under the heading “Competition” in Item 1, Business, in this report provides more information regarding the competitive conditions in our growth markets. Our industry could become even more competitive as a result of legislative, regulatory and technological changes.
Added
The Company’s policies related to the monitoring of vendors and other third parties are discussed in detail below in Item IC, Cybersecurity, under the heading “Risk Management and Strategy - Diligence of Vendors and Other Third Parties.” Fraud is a major, and increasing, operational risk for us and all banks.
Removed
We also expect continued consolidation in the banking industry as a result of, among other things, elevated regulatory compliance and other legal costs and the benefits of scale when making investments in new technology.
Added
In recent years, fraud risk has emerged as a significant risk for all financial institutions, including us. Deposit fraud (such as check forging, check kiting and wire fraud) and loan fraud continue to be major sources of fraud attempts and actual loss.
Removed
Banks, securities firms and insurance companies can merge under the umbrella of a financial holding company, which can offer virtually any type of financial service, including banking, securities underwriting, insurance (both agency and underwriting) and merchant banking. Also, legislative and regulatory changes on both the federal and state level may materially affect competitive conditions in our industry.
Added
Fraud directed against our employees, vendors and customers – generally using deception to initiate unauthorized funds transfers – has emerged as another major source of fraud loss. The methods used by illicit actors to perpetrate fraud, and our efforts to combat it, constantly evolve as technology advances.
Removed
Our business, financial condition and results of operations could be materially affected by adverse developments impacting the financial services industry, such as recent bank failures or concerns involving liquidity and the increased competition for and cost of deposits.
Added
In addition to cybersecurity risk (discussed below), emerging technologies, including rapid developments in the capabilities and applications of artificial intelligence, have made it easier for illicit actors to obtain and use customer personal information, mimic communications to or from customers, mimic signatures, and create false, or “synthetic,” instructions, documents and media that appear genuine.
Removed
Additional bank failures or sales of distressed banks in anticipation of failure could prolong these concerns despite the extensive measures taken by federal banking regulators to restore confidence in the banking system. In addition, competition for deposits has increased in recent periods, and the cost of funding, both for deposits and other sources of liquidity, has increased.
Added
Our efforts to combat fraud are both preventive (anticipating fraudulent activity, educating employees and customers) and responsive (detecting, halting and remediating fraud attempts). We have established policies and procedures to identify, monitor and mitigate fraud-related risks, and we continue to invest in systems, resources, and controls to better detect and prevent fraud.
Removed
The information under the heading “Supervision and Regulation” in Item 1, Business, and Note 20, “Regulatory Matters,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report provides more information regarding the regulatory environment in which we and the Bank operate.
Added
However, there are inherent limitations to our ability to anticipate, mitigate and remediate all fraud-related risks, particularly in light of the pace of technological advances. Some level of fraud loss is unavoidable, and the risk of a major loss cannot be eliminated.
Removed
See “Critical Accounting Policies 20 and Estimates” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Note 1, “Significant Accounting Policies,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report.
Added
Accordingly, we could suffer unexpected losses, incur additional expenses to correct failures in our systems, and be subject to potential claims from third parties and government agencies. Any of these consequences could adversely affect our reputation, business, financial condition, and results of operations.
Removed
Changes in accounting standards issued by FASB or other standard-setting bodies may adversely affect our financial statements. Our financial statements are subject to the application of GAAP, which are periodically revised and/or expanded. From time to time, FASB or other accounting standard setting bodies adopt new accounting standards or amend existing standards.
Added
The Company has experienced security breaches and cyber-attacks in the past, although to date none of these attacks has materially impacted the Company.
Removed
In addition, market conditions often prompt these bodies to promulgate new guidance that further interprets or seeks to revise accounting pronouncements related to financial instruments, structures or transactions as well as to issue new standards expanding disclosures.
Added
As of February 18, 2025, there were 150,000,000 shares of our common stock authorized, of which 63,657,444 shares were outstanding, and we anticipate issuing approximately 31.8 million shares in connection with the completion of our merger with The First. 25 Risks Relating to the Merger with The First Failure to complete our merger with The First could negatively affect our share price, future business and financial results.
Removed
Our estimate of the impact of accounting developments that have been issued but not yet implemented is disclosed in our annual reports on Form 10-K and our quarterly reports on Form 10-Q, but the impact of these changes often is difficult to precisely assess.
Added
Although we anticipate closing the merger with The First in the first half of 2025, we cannot guarantee when, or whether, the merger will be completed. The completion of the merger is subject to a number of customary conditions which must be fulfilled in order to complete the merger.
Removed
In some cases, we could be required to apply a new or revised standard retroactively, resulting in changes to previously reported financial results, or a cumulative charge to retained earnings.
Added
If the merger with The First is not completed for any reason, our ongoing business and financial results may be adversely affected and we will be subject to several risks, including: • having to pay significant transaction costs without realizing any of the anticipated benefits of completing the merger; • failing to pursue other beneficial opportunities due to the focus of our management on the merger, without realizing any of the anticipated benefits of completing the merger; • declines in our share price to the extent that the current market prices reflect an assumption by the market that the merger will be completed; and • becoming subject to litigation related to any failure to complete the merger.
Removed
It is possible that future accounting standards that we are required to adopt could change the current accounting treatment that we apply to our consolidated financial statements and that such changes could have a material effect on our financial condition and results of operations. We are subject to environmental liability risk associated with lending activities.
Added
Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated, cannot be met, or that could have an adverse effect on the combined company following the consummation of the merger with The First.
Removed
Prior to January 1, 2022, LIBOR was the reference rate used for many of our transactions, including a substantial portion of our variable rate loans as well as our borrowings and securities; in addition, the derivatives that we used to manage risk related to the foregoing transactions were tied to LIBOR. All LIBOR tenors were discontinued by June 30, 2023.
Added
Before the merger with The First may be completed, various approvals, consents and/or non-objections must be obtained from bank regulatory authorities, including the Federal Reserve, FDIC, and the DBCF. Additionally, the U.S. Department of Justice has between 15 and 30 days following approval of the merger by the Federal Reserve and FDIC, respectively, to challenge the approval on antitrust grounds.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

12 edited+2 added−1 removed55 unchanged
Biggest changeThe ERM Committee incorporates the assessment, monitoring and mitigation of cybersecurity risk into its monitoring of the Company’s broader enterprise risk management function. At each meeting of the ERM Committee, the Chief Risk Officer reports on the status within established tolerances of each risk metric as well as the assessment of the direction such metric is trending.
Biggest changeThe ERM Committee incorporates the assessment, monitoring and mitigation of cybersecurity risk into its monitoring of the Company’s broader enterprise risk management function.
In addition, annually the Company’s incident response team engages in a cyber attack tabletop exercise designed by the Financial Services Information Sharing and Analysis 30 Center that helps to train the incident response team in overcoming a simulated attack against Renasant’s payment systems and processes. Governance and Oversight Management Role .
In addition, annually the Company’s incident 30 response team engages in a cyber attack tabletop exercise designed by the Financial Services Information Sharing and Analysis Center that helps to train the incident response team in overcoming a simulated attack against Renasant’s payment systems and processes. Governance and Oversight Management Role .
In particular, the Interagency Guidelines 29 Establishing Information Security Standards (the “Guidelines”) require us to implement a comprehensive written information security program that includes administrative, technical and physical safeguards designed to (1) ensure the security and confidentiality of customer information; (2) protect against any anticipated threats or hazards to the security or integrity of such information; (3) protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer; and (4) ensure the proper disposal of customer information and consumer information.
In particular, the Interagency Guidelines Establishing Information Security Standards (the “Guidelines”) require us to implement a comprehensive written information security program that includes administrative, technical and physical safeguards designed to (1) ensure the security and confidentiality of customer information; (2) protect against any anticipated threats or hazards to the security or integrity of such information; (3) protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer; and (4) ensure the proper disposal of customer information and consumer information.
The chair of the 31 Technology Committee is a member of the ERM Committee, enabling the chair to convey to the ERM Committee details of the discussions with respect to the CISO’s report as well as other matters related to our technological infrastructure and the impact thereof on matters within the ERM Committee’s focus.
The chair of the Technology Committee is a member of the ERM Committee, enabling the chair to convey to the ERM Committee details of the discussions with respect to the CISO’s report as well as other matters related to our technological infrastructure and the impact thereof on matters within the ERM Committee’s focus.
This team is primarily responsible for promptly identifying cybersecurity risks associated with our existing and anticipated operations and, once identified, assessing as to the level that each cybersecurity risk poses to us, and then controlling or mitigating to the extent reasonably possible (in the context the Company’s operations and resources, and competitive factors affecting how banks and other financial services companies conduct operations, among other things).
This team is primarily responsible for promptly identifying cybersecurity risks associated with our existing and anticipated operations and, once identified, assessing the level that each cybersecurity risk poses to us, and then controlling or mitigating to the extent reasonably possible (in the context of the Company’s operations and resources, and competitive factors affecting how banks and other financial services companies conduct operations, among other things).
The Company also conducts routine internally-focused exercises to help raise employee awareness of the risks associated with cybersecurity. For example, over the course of 2023, employees received at least one email per quarter designed to test employees’ ability to identify and avoid potential “phishing” emails, and those employees that fail this phishing test are assigned additional training.
The Company also conducts routine internally-focused exercises to help raise employee awareness of the risks associated with cybersecurity. For example, over the course of 2024, employees received at least one email per quarter designed to test employees’ ability to identify and avoid potential “phishing” emails, and those employees that fail this phishing test are assigned additional training.
The laws and regulations that these regulators administer impose very high expectations on the Company with respect to its information security policies, procedures, processes and controls.
The laws and regulations that these regulators administer impose very high expectations on the Company 29 with respect to its information security policies, procedures, processes and controls.
The Board of Directors’ Technology Committee and its Enterprise Risk Management Committee oversee our information security team, receiving regular updates related to the material features of the information security program, our success and failures in maintaining information security and emerging threats and management’s proposed response thereto. Strategy and Testing .
The Board of Directors’ Technology Committee and its Enterprise Risk Management Committee (the “ERM Committee”) oversee our information security team, receiving regular updates related to the material features of the information security program, our success and failures in maintaining information security and emerging threats and management’s proposed response thereto. Strategy and Testing .
Whenever we consider a new product or service to offer to its clients, or a new means of offering or providing an existing product or service, or a new back-office process or procedure, the implications to the Company’s information security are required to be considered.
Whenever we consider a new product or service to offer to our clients, or a new means of offering or providing an existing product or service, or a new back-office process or procedure, the implications to the Company’s information security are required to be considered.
Finally, all remote access into the Company’s networks must include approval by the Chief Information Security Officer (which we refer to as the “CISO”). • Vulnerability and patch management: The Company’s vulnerability management program includes internal and external scanning using third-party tools and services. Software patches are deployed based on criticality of vulnerability.
Finally, all remote access into the Company’s networks must be approved by the Chief Information Security Officer (which we refer to as the “CISO”). • Vulnerability and patch management: The Company’s vulnerability management program includes internal and external scanning using third-party tools and services. Software patches are deployed based on criticality of vulnerability.
The Company’s Board of Directors primarily oversees the risks related to our technological infrastructure, information security, cybersecurity, business continuity and disaster recovery programs through its Technology Committee and its Enterprise Risk Management Committee (the “ERM Committee”). These committees meet quarterly, and their activities are reported to the full Board of Directors.
The Company’s Board of Directors primarily oversees the risks related to our technological infrastructure, information security, cybersecurity, business continuity and disaster recovery programs through its Technology Committee and the ERM Committee. These committees meet quarterly, and their activities are reported to the full Board of Directors.
In addition to this report, the CISO’s report to the Technology Committee is included the materials for ERM meetings.
In addition to this report, the CISO’s report to the 31 Technology Committee described above is included the materials for ERM Committee meetings.
Removed
Finally, at each ERM Committee meeting our Chief Technology Officer addresses various information technology topics with the ERM Committee.
Added
The Company tracks numerous risk metrics relating to cybersecurity, and at each meeting of the ERM Committee, the Chief Risk Officer reports on the status within established tolerances of each risk metric as well as the assessment of the metric’s trend of increasing or decreasing risk.
Added
Finally, the CISO attends ERM Committee meetings, providing additional detail, and answering committee members’ questions, about the CISO’s report.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−1 removed0 unchanged
Biggest changeRenasant Insurance, a wholly-owned subsidiary of the Bank, operates out of eight stand-alone offices throughout Mississippi. Republic Business Credit, a wholly-owned subsidiary of the Bank, operates four stand-alone offices in California, Illinois, Louisiana and Texas. We own or lease our facilities and believe all of our properties are in good condition to meet our business needs.
Biggest changeRepublic Business Credit, a wholly-owned subsidiary of the Bank, operates four stand-alone offices in California, Illinois, Louisiana and Texas. We own or lease our facilities and believe all of our properties are in good condition to meet our business needs. None of our properties are subject to any material encumbrances.
Our Community Banks and Wealth Management segments operate out of all of these branches. The Bank also operates 17 locations used exclusively for mortgage banking and four locations used exclusively for loan production. The Wealth Management segment operates two locations used exclusively for investment services.
Our Community Banks and Wealth Management segments operate out of all of these branches. The Bank also operates 16 locations used exclusively for mortgage banking and three locations used exclusively for loan production. The Wealth Management segment operates two locations used exclusively for investment services.
ITEM 2. PROPERTIES The principal executive offices of the Company are located at 209 Troy Street, Tupelo, Mississippi. Various departments occupy each floor of the five-story building. As of December 31, 2023, Renasant operated 148 full-service branches, 12 limited-service branches, 160 ATMs and 51 Interactive Teller Machines (ITMs).
ITEM 2. PROPERTIES The principal executive offices of the Company are located at 209 Troy Street, Tupelo, Mississippi. Various departments occupy each floor of the five-story building. As of December 31, 2024, Renasant operated 150 full-service branches, 11 limited-service branches, 157 ATMs and 54 Interactive Teller Machines (ITMs).
Removed
None of our properties are subject to any material encumbrances.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeITEM 3. LEGAL PROCEEDINGS There are no material pending legal proceedings to which the Company, the Bank, or any of its subsidiaries are a party or to which any of their property is subject, and no such legal proceedings were terminated in the fourth quarter of 2023. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 32 PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS There are no material pending legal proceedings to which the Company, the Bank, or any of its subsidiaries are a party or to which any of their property is subject, and no such legal proceedings were terminated in the fourth quarter of 2024. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 32 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+0 added−0 removed5 unchanged
Biggest changeIssuer Purchases of Equity Securities Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Share Repurchase Plans Maximum Number of Shares or Approximate Dollar Value of Shares That May Yet Be Purchased Under Share Repurchase Plans (2)(3) October 1, 2023 to October 31, 2023 163 $ 25.66 — $ 100,000 November 1, 2023 to November 30, 2023 — — — 100,000 December 1, 2023 to December 31, 2023 216 33.24 — 100,000 Total 379 $ 29.98 — (1) All shares in this column represent shares of Renasant Corporation stock withheld to satisfy the federal and state tax liabilities related to the vesting of time-based restricted stock awards.
Biggest changeIssuer Purchases of Equity Securities Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Share Repurchase Plans Maximum Number or Approximate Dollar Value of Shares That May Yet Be Purchased Under Share Repurchase Plans (2)(3) October 1, 2024 to October 31, 2024 588 $ 32.74 — $ 100,000 November 1, 2024 to November 30, 2024 — — — 100,000 December 1, 2024 to December 31, 2024 — — — 100,000 Total 588 $ 32.74 — (1) All shares in this column represent shares of Renasant Corporation stock withheld to satisfy the federal and state tax liabilities related to the vesting of time-based restricted stock awards.
No shares were repurchased during the fourth quarter of 2023 under this plan, which expired in October 2023 and was replaced with a $100.0 million stock repurchase program approved in October 2023. This new plan will remain in effect for one year or, if earlier, the repurchase of the entire amount of common stock authorized to be repurchased.
No shares were repurchased during the fourth quarter of 2024 under this plan, which expired in October 2024 and was replaced with a $100.0 million stock repurchase program approved in October 2024. This new plan will remain in effect for one year or, if earlier, the repurchase of the entire amount of common stock authorized to be repurchased.
BMI Banks - Southeast Region Index, is a peer group of 52 regional bank holding companies, whose common stock is traded either on the New York Stock Exchange, NYSE Amex or NASDAQ, and which are headquartered in Alabama, Arkansas, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Virginia and West Virginia.
BMI Banks - Southeast Region Index, is a peer group of 50 regional bank holding companies, whose common stock is traded either on the New York Stock Exchange, NYSE Amex or NASDAQ, and which are headquartered in Alabama, Arkansas, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Virginia and West Virginia.
Unregistered Sales of Equity Securities The Company did not sell any unregistered equity securities during 2023. 33 Stock Performance Graph The following performance graph, obtained from S&P Global Market Intelligence, compares the performance of our common stock to the NYSE Composite Index and to the S&P U.S.
Unregistered Sales of Equity Securities The Company did not sell any unregistered equity securities during 2024. 33 Stock Performance Graph The following performance graph, obtained from S&P Global Market Intelligence, compares the performance of our common stock to the NYSE Composite Index and to the S&P U.S.
(2) The Company announced a $100.0 million stock repurchase program in October 2022 under which the Company was authorized to repurchase outstanding shares of its common stock either in open market purchases or privately-negotiated transactions.
(2) The Company announced a $100.0 million stock repurchase program in October 2023 under which the Company was authorized to repurchase outstanding shares of its common stock either in open market purchases or privately-negotiated transactions.
No shares were repurchased during the fourth quarter of 2023 under this plan. (3) Dollars in thousands.
No shares were repurchased during the fourth quarter of 2024 under this plan. (3) Dollars in thousands.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders The Company’s common stock trades on The New York Stock Exchange under the ticker symbol “RNST.” On February 16, 2024, the Company had approximately 4,040 shareholders of record and the closing sales price of the Company’s common stock was $32.13.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders The Company’s common stock trades on The New York Stock Exchange under the ticker symbol “RNST.” On February 18, 2025, the Company had approximately 3,894 shareholders of record and the closing sales price of the Company’s common stock was $38.29.
BMI Banks - Southeast Region Index was $100 at January 1, 2018, and that all dividends were reinvested. Period Ending December 31, 2018 2019 2020 2021 2022 2023 Renasant Corporation $ 100.00 $ 120.24 $ 118.29 $ 136.37 $ 138.69 $ 128.01 NYSE Composite Index 100.00 125.51 134.28 162.04 146.89 167.12 S&P U.S.
BMI Banks - Southeast Region Index was $100 at January 1, 2019, and that all dividends were reinvested. Period Ending December 31, 2019 2020 2021 2022 2023 2024 Renasant Corporation $ 100.00 $ 98.38 $ 113.42 $ 115.35 $ 106.47 $ 116.18 NYSE Composite Index 100.00 106.99 129.11 117.04 133.16 154.19 S&P U.S.
BMI Banks - Southeast Region Index 100.00 140.94 126.37 180.49 146.81 151.44 (1) The S&P U.S.
BMI Banks - Southeast Region Index 100.00 89.66 128.06 104.16 107.45 139.40 (1) The S&P U.S.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

147 edited+29 added−29 removed91 unchanged
Biggest changeProvision for Credit Losses on Loans to Average Loans 2023 2022 0.16% 0.22% 51 The table below reflects the activity in the allowance for credit losses on loans for the years ended December 31: 2023 2022 Balance at beginning of year $ 192,090 $ 164,171 Initial allowance for purchased loans with more than insignificant credit deterioration existing at the date of acquisition 25 11,460 Provision for credit losses on loans 18,793 23,788 Charge-offs Commercial, financial, agricultural 8,838 5,120 Lease financing 1,524 7 Real estate – construction 57 — Real estate – 1-4 family mortgage 417 757 Real estate – commercial mortgage 5,568 5,134 Installment loans to individuals 2,636 3,167 Total charge-offs 19,040 14,185 Recoveries Commercial, financial, agricultural 3,090 2,471 Lease financing 18 146 Real estate – construction 48 — Real estate – 1-4 family mortgage 389 821 Real estate – commercial mortgage 712 418 Installment loans to individuals 2,453 3,000 Total recoveries 6,710 6,856 Net charge-offs 12,330 7,329 Balance at end of year $ 198,578 $ 192,090 Provision for credit losses on loans to average loans 0.16 % 0.22 % Net charge-offs to average loans 0.10 % 0.07 % Net charge-offs to allowance for credit losses on loans 6.21 % 3.82 % Allowance for credit losses on loans to: Total loans 1.61 % 1.66 % Nonperforming loans 286.26 % 337.73 % Nonaccrual loans 288.56 % 339.71 % Nonaccrual loans to total loans: 0.56 % 0.49 % The table below reflects net charge-offs to daily average loans outstanding, by loan category, during the years ended December 31: 2023 2022 Net Charge-offs Average Loans Net Charge-offs to Average Loans Net Charge-offs Average Loans Net Charge-offs to Average Loans Commercial, financial, agricultural $ 5,748 $ 1,761,103 0.33% $ 2,649 $ 1,489,595 0.18% Lease financing 1,506 119,376 1.26% (139) 95,906 (0.14)% Real estate – construction 9 1,347,228 —% — 1,149,925 —% Real estate – 1-4 family mortgage 28 3,382,553 —% (64) 3,042,187 —% Real estate – commercial mortgage 4,856 5,241,881 0.09% 4,716 4,767,888 0.10% Installment loans to individuals 183 111,000 0.16% 167 132,494 0.13% Total $ 12,330 $ 11,963,141 0.10% $ 7,329 $ 10,677,995 0.07% 52 The following table provides further details of the Company’s net charge-offs (recoveries) of loans secured by real estate for the years ended December 31: 2023 2022 Real estate – construction: Residential $ 9 $ — Real estate – 1-4 family mortgage: Primary (111) 223 Home equity 76 (75) Rental/investment 82 (9) Land development (19) (203) Total real estate – 1-4 family mortgage 28 (64) Real estate – commercial mortgage: Owner-occupied 157 609 Non-owner occupied 4,699 4,276 Land development — (169) Total real estate – commercial mortgage 4,856 4,716 Total net charge-offs of loans secured by real estate $ 4,893 $ 4,652 Allowance for Credit Losses on Unfunded Commitments; Provision for Credit Losses on Unfunded Commitments .
Biggest changeProvision for Credit Losses on Loans to Average Loans 2024 2023 0.16% 0.16% 50 The table below reflects the activity in the allowance for credit losses on loans for the years ended December 31: 2024 2023 Balance at beginning of year $ 198,578 $ 192,090 Initial allowance for purchased loans with more than insignificant credit deterioration existing at the date of acquisition — 25 Provision for credit losses on loans 11,248 18,793 Charge-offs Commercial, financial, agricultural 4,463 8,838 Lease financing 642 1,524 Real estate – construction 145 57 Real estate – 1-4 family mortgage 966 417 Real estate – commercial mortgage 5,737 5,568 Installment loans to individuals 1,856 2,636 Total charge-offs 13,809 19,040 Recoveries Commercial, financial, agricultural 1,710 3,090 Lease financing 34 18 Real estate – construction — 48 Real estate – 1-4 family mortgage 166 389 Real estate – commercial mortgage 2,278 712 Installment loans to individuals 1,551 2,453 Total recoveries 5,739 6,710 Net charge-offs 8,070 12,330 Balance at end of year $ 201,756 $ 198,578 Provision for credit losses on loans to average loans 0.09 % 0.16 % Net charge-offs to average loans 0.06 % 0.10 % Net charge-offs to allowance for credit losses on loans 4.00 % 6.21 % Allowance for credit losses on loans to: Total loans 1.57 % 1.61 % Nonperforming loans 178.11 % 286.26 % Nonaccrual loans 182.07 % 288.56 % Nonaccrual loans to total loans: 0.88 % 0.56 % The decrease in the ratio of the allowance for credit losses on loans to each of nonperforming loans and nonaccrual loans is primarily attributable to the increase in nonaccrual loans from the prior year.
Furthermore, more than 90% of available for sale securities have the explicit or implicit backing of the United States government. Performance of these securities has been in line with broader market price performance, indicating to management that increases in market-based, risk free rates, and not credit-related factors, are the reason for the losses.
Furthermore, more than 90% of available for sale securities have the explicit or implicit backing of the United States government. Performance of these securities has been in line with broader market price performance, indicating to management that increases in market-based, 37 risk free rates, and not credit-related factors, are the reason for the losses.
For more information about the accounting for acquisitions, including the estimates and assumptions, and uncertainties underlying such estimates and assumptions, please refer to the information under the heading “Business Combinations, Accounting for Purchased Credit Deteriorated Loans and Related Assets” in Note 1, “Significant Accounting Policies,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report. 36 Additional details about loans acquired in connection with our acquisitions is set forth below under the heading “Risk Management - Credit Risk and Allowance for Credit Losses.” Financial Condition The following discussion provides details regarding the changes in significant balance sheet accounts at December 31, 2023 compared to December 31, 2022.
For more information about the accounting for acquisitions, including the estimates and assumptions, and uncertainties underlying such estimates and assumptions, please refer to the information under the heading “Business Combinations, Accounting for Purchased Credit Deteriorated Loans and Related Assets” in Note 1, “Significant Accounting Policies,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report. 36 Additional details about loans acquired in connection with our acquisitions is set forth below under the heading “Risk Management - Credit Risk and Allowance for Credit Losses.” Financial Condition The following discussion provides details regarding the changes in significant balance sheet accounts at December 31, 2024 compared to December 31, 2023.
Also, there may be limits in the usefulness of these measures to readers of this document. As a result, the Company encourages readers to consider its consolidated financial statements and footnotes thereto in their entirety and not to rely on any single financial measure.
Also, there may be limits in the usefulness of these measures to readers of this document. As a result, the Company encourages readers to consider its consolidated financial statements and footnotes thereto in their entirety and not to rely on any single financial measure. 61
That is, the ratio is designed to reflect the percentage of one dollar which must be expended 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.
That is, the ratio is designed to reflect the percentage of one dollar which must be expended 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 48 equivalent basis and noninterest income.
For an in-depth discussion of our accounting policies and our methodology for determining the appropriate level of the allowance for credit losses, please refer to the information in the “Critical Accounting Policies and Estimates” section above as well as the information under the headings “Loans and the Allowance for Credit Losses” and “Business Combinations, Accounting for Purchased Credit Deteriorated Loans and Related Assets” in Note 1, “Significant Accounting Policies,” and Note 4, “Allowance for Credit Losses,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report.
For an in-depth discussion of our accounting policies and our methodology for determining the appropriate level of the allowance for credit losses, please refer to the information in the “Critical Accounting Policies and Estimates” section above as well as the information under the headings “Loans and the Allowance for Credit Losses” and “Business Combinations, Accounting for Purchased Credit Deteriorated Loans and Related Assets” in Note 1, “Significant Accounting Policies,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report.
For more information about our loan policies and procedures for addressing credit risk, as well as for a discussion of the changes in the allowance for credit losses in 2023 and 2022, please refer to the disclosures in this Item under the heading “Risk Management – Credit Risk and Allowance for Credit Losses for Loans and Unfunded Commitments.” Business Combinations, Accounting for Purchased Loans The Company accounts for its acquisitions under ASC 805, “ Business Combinations ,” which requires the use of the acquisition method of accounting.
For more information about our loan policies and procedures for addressing credit risk, as well as for a discussion of the changes in the allowance for credit losses in 2024 and 2023, please refer to the disclosures in this Item under the heading “Risk Management – Credit Risk and Allowance for Credit Losses for Loans and Unfunded Commitments.” Business Combinations, Accounting for Purchased Loans The Company accounts for its acquisitions under ASC 805, “ Business Combinations ,” which requires the use of the acquisition method of accounting.
While the borrower has the ability to draw upon these commitments at any time (assuming the borrower’s compliance with the terms 58 of the loan commitment), these commitments often expire without being drawn upon.
While the borrower has the ability to draw upon these commitments at any time (assuming the borrower’s compliance with the terms of the loan commitment), these commitments often expire without being drawn upon.
At December 31, 2023 and 2022, there were no concentrations of loans exceeding 10% of total loans other than loans disclosed in the table above. 39 The following table sets forth loans held for investment, net of unearned income, outstanding at December 31, 2023, which, based on remaining contractually-scheduled repayments of principal, are due in the periods indicated.
At December 31, 2024 and 2023, there were no concentrations of loans exceeding 10% of total loans other than loans disclosed in the table above. 39 The following table sets forth loans held for investment, net of unearned income, outstanding at December 31, 2024, which, based on remaining contractually-scheduled repayments of principal, are due in the periods indicated.
Information is provided in each category with respect to changes attributable to (1) changes in volume (changes in volume multiplied by prior yield/rate); (2) changes in yield/rate (changes in yield/rate multiplied by prior volume); and (3) changes in both yield/rate and volume (changes in yield/rate multiplied by changes in volume).
Information is provided in each category with respect to changes attributable to (1) changes in volume (changes in volume multiplied by prior yield/rate); (2) changes in yield/rate (changes in yield/rate multiplied by prior volume); and (3) changes in both yield/rate and volume (changes in yield/rate 44 multiplied by changes in volume).
Short-term borrowings have original maturities less than one year and typically include federal funds purchased, securities sold under agreements to repurchase, and short-term FHLB advances. During 2023 and 2022, we used short-term FHLB borrowings to meet anticipated short-term liquidity needs, which varied throughout the year in response to loan demand and competition for deposits.
Short-term borrowings have original maturities less than one year and typically include federal funds purchased, securities sold under agreements to repurchase, and short-term FHLB advances. During 2024 and 2023, we used short-term FHLB borrowings to meet anticipated short-term liquidity needs, which varied throughout the year in response to loan demand and competition for deposits.
Contractual Obligations The following table presents, as of December 31, 2023, significant fixed and determinable contractual obligations to third parties by payment date, that may impact the Company’s liquidity position. The Note Reference below refers to the applicable footnote in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report.
Contractual Obligations The following table presents, as of December 31, 2024, significant fixed and determinable contractual obligations to third parties by payment date, that may impact the Company’s liquidity position. The Note Reference below refers to the applicable footnote in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report.
Management’s problem asset resolution committee and the Board of Directors’ Credit Review Committee monitor loans that are past due or those that have been downgraded and are considered special mention or substandard due to a decline in the collateral value or cash flow of the debtor; the committees then adjust loan grades accordingly.
Management’s problem asset resolution committee and the Board of Directors Credit Review Committee monitor loans that are past due or those that have been downgraded and are considered special mention or substandard due to a decline in the collateral value or cash flow of the debtor; the committees then adjust loan grades accordingly.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (In Thousands, Except Share Data) The following discussion and analysis of our financial condition as of December 31, 2023 and 2022 and results of operations for each of the years then ended should be read together with the cautionary language regarding forward-looking statements at the beginning of this Annual Report on Form 10-K and the consolidated financial statements and related notes included under Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K, as well as Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 24, 2023, which provides a discussion of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Annual Report on Form 10-K.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (In Thousands, Except Share Data) The following discussion and analysis of our financial condition as of December 31, 2024 and 2023 and results of operations for each of the years then ended should be read together with the cautionary language regarding forward-looking statements at the beginning of this Annual Report on Form 10-K and the consolidated financial statements and related notes included under Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K, as well as Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 23, 2024, which provides a discussion of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Annual Report on Form 10-K.
These are unsecured, uncommitted lines of credit maturing at various times within the next twelve months. There were no amounts outstanding under these lines of credit at December 31, 2023 or 2022. Finally, we can access the capital markets to meet liquidity needs.
These are unsecured, uncommitted lines of credit maturing at various times within the next twelve months. There were no amounts outstanding under these lines of credit at December 31, 2024 or 2023. Finally, we can access the capital markets to meet liquidity needs.
Mortgage loans to be sold, which made up all of our loans held for sale at each of December 31, 2023 and 2022, are sold either on a “best efforts” basis or under a “mandatory delivery” sales agreement.
Mortgage loans to be sold, which made up all of our loans held for sale at each of December 31, 2024 and 2023, are sold either on a “best efforts” basis or under a “mandatory delivery” sales agreement.
Upon the Company’s determination that a modified loan has been subsequently deemed uncollectible, the loan, or portion of the loan, is charged off, the amortized cost basis of the loan is reduced by the uncollectible amount, and the allowance for credit losses is adjusted accordingly.
Upon the Company’s determination that a modification has been subsequently deemed uncollectible, the loan, or portion of the loan, is charged off, the amortized cost basis of the loan is reduced by the uncollectible amount, and the allowance for credit losses is adjusted accordingly.
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, excluding covenant waivers and modification of contingent acceleration clauses, are required to be disclosed in accordance with Accounting Standards Update 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”).
Certain modifications of loans made to borrowers experiencing financial difficulty in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay (including extension of the amortization period), or a term extension, excluding covenant waivers and modification of contingent acceleration clauses, are required to be disclosed in accordance with ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”).
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 January 1, 2024, in each case as compared to the result 55 under rates present in the market on December 31, 2023.
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 January 1, 2025, in each case as compared to the result under rates present in the market on December 31, 2024.
In addition to the FDIC and DBCF restrictions on dividends payable by the Bank to the Company, the Federal Reserve provided guidance on the criteria that it will use to evaluate the request by a bank holding company to pay dividends in an aggregate amount that will exceed the company’s earnings for the period in which the dividends will be paid, which did not apply to the Company in 2023 or 2022.
In addition to the FDIC and DBCF restrictions on dividends payable by the Bank to the Company, the Federal Reserve has provided guidance on the criteria that it will use to evaluate the request by a bank holding company to pay dividends in an aggregate amount that will exceed the company’s earnings for the period in which the dividends will be paid, which did not apply to the Company in 2024 or 2023.
In October 2023, 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.
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.
Although we consider all reasonably-available information that we believe is relevant to making the assumptions that underlie the Company’s determination of the appropriate amount of the allowance for credit losses, future adjustments to the allowance may be necessary if actual economic or other conditions ultimately differ substantially from the assumptions we used in making the evaluation.
Although we consider all reasonably-available information that we believe is relevant to making the assumptions that underlie the Company’s determination of the appropriate amount of the allowance for credit losses, if actual economic or other conditions ultimately differ substantially from the assumptions we used in making the evaluation, then future adjustments (positive or negative) to the allowance may be necessary.
Allowance for Credit Losses on Loans The accounting estimate most important to the presentation of our financial statements is the allowance for credit losses and the related provision for credit losses which involves considerable subjective judgment and evaluation by management.
Allowance for Credit Losses on Loans The accounting estimate most important to the presentation of our financial statements that involves considerable subjective judgment and evaluation by management is the allowance for credit losses and the related provision for credit losses.
Management continually monitors the Bank’s liquidity and non-core dependency ratios to ensure compliance with targets established by the ALCO. At December 31, 2023 and 2022, the Company remained below limits on brokered deposits and other funding sources established by the ALCO. Our investment portfolio is another alternative for meeting liquidity needs.
Management continually monitors the Bank’s liquidity and non-core dependency ratios to ensure compliance with targets established by the ALCO. At December 31, 2024 and 2023, the Company remained below limits on brokered deposits and other funding sources established by the ALCO. 55 Our investment portfolio is another alternative for meeting liquidity needs.
Please refer to the discussion under the heading “Loans and the Allowance for Credit Losses” in Note 1, “Significant Accounting Policies,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report for more information regarding the estimates and assumptions, and the uncertainties underlying such estimates and assumptions, involved in the calculation of the allowance for credit losses.
The discussion under the heading “Loans and the Allowance for Credit Losses” in Note 1, “Significant Accounting Policies,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report provides more information regarding the estimates and assumptions, and the uncertainties underlying such estimates and assumptions, involved in the calculation of the allowance for credit losses.
The following table sets forth the scheduled maturity distribution and weighted average yield based on the amortized cost of the debt securities in our investment portfolio as of December 31, 2023.
The following table sets forth the scheduled maturity distribution and weighted average yield based on the amortized cost of the debt securities in our investment portfolio as of December 31, 2024.
None of these restrictions had any impact on the Company’s ability to meet its cash obligations in 2023, nor does management expect such restrictions to materially impact the Company’s ability to meet its currently-anticipated cash obligations.
None of these restrictions had any impact on the Company’s ability to meet its cash obligations in 2024, nor does management expect such restrictions to materially impact the Company’s ability to meet its currently-anticipated cash obligations.
If the loan balance is greater than the sales proceeds, the deficient balance is sent to the Board of Directors’ Credit Review Committee for charge-off approval. These charge-offs 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.
If the loan balance is greater than the sales proceeds, the deficient balance is sent to the Credit Review Committee for charge-off approval. These charge-offs reduce the allowance for credit losses on loans. 49 Charge-offs reflect the realization of losses in the portfolio that were recognized previously through the provision for credit losses on loans.
The charge-offs in 2023 were fully reserved for in the Company’s allowance for credit losses. 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.
The charge-offs in 2024 were fully reserved for in the Company’s allowance for credit losses. 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.
Based on its review of these factors as of December 31, 2023 and 2022, the Company determined that all such losses resulted from factors not deemed credit related. As a result, no credit-related impairment was recognized in current earnings, and all unrealized losses for available for sale securities were recorded in Other comprehensive income.
Based on its review of these factors as of December 31, 2024 and 2023, the Company determined that all such losses resulted from factors not deemed credit related. As a result, no credit-related impairment was recognized in current earnings, and all unrealized losses for available for sale securities were recorded in Accumulated other comprehensive income (loss).
The Company has subordinated notes with a carrying value of $316,422 at December 31, 2023, and $316,091 at December 31, 2022 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.
The Company has subordinated notes with a carrying value of $316,698 at December 31, 2024, and $316,422 at December 31, 2023 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.
These yields were calculated using coupon interest for the month of December of 2023, adjusted for discount accretion and premium amortization, where applicable.
These yields were calculated using coupon interest for the month of December of 2024, adjusted for discount accretion and premium amortization, where applicable.
Loans Loans held for investment, which excludes loans held for sale, is the Company’s most significant earning asset, comprising 71.15% and 68.16% of total assets at December 31, 2023 and 2022, respectively. This percentage will fluctuate based on a number of factors, including the extent of our loan growth and whether the Company has excess liquidity on its balance sheet.
Loans Loans held for investment, which excludes loans held for sale, is the Company’s most significant earning asset, comprising 71.45% and 71.15% of total assets at December 31, 2024 and 2023, respectively. This percentage will fluctuate based on a number of factors, including the extent of our loan growth and whether the Company has excess liquidity on its balance sheet.
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 13.7% of the carrying value of the total securities portfolio.
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 11.3% of the carrying value of the total securities portfolio.
Contingency income, which is included in the “Other noninterest income” line item on the Consolidated Statements of Income, was $970 and $567 for 2023 and 2022, respectively. Our Wealth Management segment has two divisions: Trust and Financial Services.
Contingency income, which is included in the “Other noninterest income” line item on the Consolidated Statements of Income, was $987 and $970 for 2024 and 2023, respectively. Our Wealth Management segment has two divisions: Trust and Financial Services.
For more information about the terms and conditions of the Company’s junior subordinated debentures and subordinated notes, see Note 11, “Long-Term Debt,” in the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report. 42 Results of Operations Net Income Net income for the year ended December 31, 2023 was $144,678 compared to net income of $166,068 for the year ended December 31, 2022.
For more information about the terms and conditions of the Company’s junior subordinated debentures and subordinated notes, see Note 11, “Long-Term Debt,” in the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report. 42 Results of Operations Net Income Net income for the year ended December 31, 2024 was $195,457 compared to net income of $144,678 for the year ended December 31, 2023.
Securities within our investment portfolio are also used to secure certain deposit types and short-term borrowings. At December 31, 2023, securities with a carrying value of $895,044 were pledged to secure government, public, trust, and other deposits and as collateral for short-term borrowings and derivative instruments as compared to $842,601 at December 31, 2022.
Securities within our investment portfolio are also used to secure certain deposit types and short-term borrowings. At December 31, 2024, securities with a carrying value of $843,870 were pledged to secure government, public, trust, and other deposits and as collateral for short-term borrowings and derivative instruments as compared to $895,044 at December 31, 2023.
Fees and commissions include fees related to deposit services, such as ATM fees and interchange fees on debit card transactions. Interchange fees on debit card transactions, the largest component of fees and commissions, were $9,383 for the twelve months ended December 31, 2023 compared to $9,899 for the same period in 2022.
Fees and commissions include fees related to deposit services, such as ATM fees and interchange fees on debit card transactions. Interchange fees on debit card transactions, the largest component of fees and commissions, were $8,911 for the twelve months ended December 31, 2024 compared to $9,383 for the same period in 2023.
For more information about the Company’s securities, see Note 2, “Securities,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report. 38 Loans Held for Sale Loans held for sale were $179,756 at December 31, 2023 compared to $110,105 at December 31, 2022.
For more information about the Company’s securities, see Note 2, “Securities,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report. 38 Loans Held for Sale Loans held for sale were $246,171 at December 31, 2024 compared to $179,756 at December 31, 2023.
At December 31, 2023, the maximum amount available for transfer from the Bank to the Company in the form of loans was $188,810. The Company maintains a line of credit collateralized by cash with the Bank totaling $3,000. There were no amounts outstanding under this line of credit at December 31, 2023.
At December 31, 2024, the maximum amount available for transfer from the Bank to the Company in the form of loans was $202,274. The Company maintains a line of credit collateralized by cash with the Bank totaling $3,000. There were no amounts outstanding under this line of credit at December 31, 2024.
Although loan fees and some interest income are derived from mortgage loans held for sale, the main source of income is gains from the sale of these loans in the secondary market. Originations of mortgage loans to be sold totaled $1,330,912 in 2023 and $1,679,356 in 2022.
Although loan fees and some interest income are derived from mortgage loans held for sale, the main source of income is gains from the sale of these loans in the secondary market. Originations of mortgage loans to be sold totaled $1,400,467 in 2024 and $1,330,912 in 2023.
Public fund deposits in excess of the FDIC insurance limit but that were collateralized by pledged securities in the Company's investment portfolio totaled $1,485,684.
Public fund deposits in excess of the FDIC insurance limit but that were collateralized by pledged securities in the Company’s investment portfolio totaled $1,765,510.
Management also continually monitors past due loans for potential credit quality deterioration. Total loans 30-89 days past due on which interest was still accruing were $54,031 at December 31, 2023 as compared to $58,703 at December 31, 2022.
Management also continually monitors past due loans for potential credit quality deterioration. Total loans 30-89 days past due on which interest was still accruing were $39,842 at December 31, 2024 as compared to $54,031 at December 31, 2023.
In addition, the Company believes that these non-GAAP financial measures facilitate the making of period-to-period comparisons and are meaningful indicators of its operating performance, particularly because these measures are widely used by industry analysts for companies with merger and acquisition activities.
Management uses these non-GAAP financial measures when evaluating capital utilization and adequacy. In addition, the Company believes that these non-GAAP financial measures facilitate the making of period-to-period comparisons and are meaningful indicators of its operating performance, particularly because these measures are widely used by industry analysts for companies with merger and acquisition activities.
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 82.43% of total net revenue in 2023. Total net revenue consists of net interest income on a fully taxable equivalent basis and noninterest income.
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 71.95% of total net revenue in 2024. Total net revenue consists of net interest income on a fully taxable equivalent basis and noninterest income.
There were no federal funds 56 purchased outstanding at December 31, 2023, and 2022, while security repurchase agreements were $7,577 at December 31, 2023, as compared to $12,232 at December 31, 2022. The Company had $300,000 and $700,000 in short-term borrowings from the FHLB (i.e., advances with original maturities less than one year) at December 31, 2023, and 2022, respectively.
There were no federal funds purchased outstanding at December 31, 2024, and 2023, while security repurchase agreements were $8,018 at December 31, 2024, as compared to $7,577 at December 31, 2023. The Company had $100,000 and $300,000 in short-term borrowings from the FHLB (i.e., advances with original maturities less than one year) at December 31, 2024, and 2023, respectively.
The weighted-average interest rates on outstanding advances at December 31, 2023 and 2022 were 5.70% and 4.57%, respectively.
The weighted-average interest rates on outstanding advances at December 31, 2024 and 2023 were 4.63% and 5.70%, respectively.
Total assets were $17,360,535 at December 31, 2023 compared to $16,988,176 at December 31, 2022. Securities 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 other types of borrowings.
Total assets were $18,034,868 at December 31, 2024 compared to $17,360,535 at December 31, 2023. Securities 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 other types of borrowings.
Noninterest-bearing deposits decreased to 25.46% of total deposits at December 31, 2023, as compared to 33.80% of total deposits at December 31, 2022, due to noninterest-bearing deposits being moved to other types of deposits or financial products bearing higher interest rates.
Noninterest-bearing deposits decreased to 23.36% of total deposits at December 31, 2024, as compared to 25.46% of total deposits at December 31, 2023, due to noninterest-bearing deposits being moved to other types of deposits or financial products bearing higher interest rates.
The Company has continued its efforts to mitigate increases in the cost of funding through maintaining noninterest-bearing deposits, staying disciplined yet competitive in pricing on interest-bearing deposits in the current rate environment and accessing alternative sources of liquidity, such as brokered deposits.
The Company has continued its efforts to mitigate increases in the cost of funding through maintaining noninterest-bearing deposits and staying disciplined yet competitive in pricing on interest-bearing deposits in the current rate environment.
In addition to the contingency income described above, other noninterest income includes income from our SBA banking division, our capital markets division and other miscellaneous income and can fluctuate based on the claims experience in our Insurance agency, SBA production and recognition of other nonseasonal income items.
In addition to the contingency income described above, other noninterest income includes income from our SBA banking division, our capital markets division and other miscellaneous income and can fluctuate based on production within our SBA and capital markets divisions and recognition of 47 other nonseasonal income items.
The Company’s practice is to charge off estimated losses as soon as such loss is identified and reasonably quantified. Net charge-offs for 2023 were $12,330, or 0.10% as a percentage of average loans, compared to net charge-offs of $7,329, or 0.07% as a percentage of average loans, for 2022.
The Company’s practice is to charge off estimated losses as soon as such loss is identified and reasonably quantified. Net charge-offs for 2024 were $8,070, or 0.06% as a percentage of average loans, compared to net charge-offs of $12,330, or 0.10% as a percentage of average loans, for 2023.
(2) Excludes interest. (3) Includes brokered deposits in the amount of $461,441. Off-Balance Sheet Commitments The Company enters into loan commitments, standby letters of credit and derivative financial instruments in the normal course of its business. Loan commitments are made to accommodate the financial needs of the Company’s customers.
(2) Excludes interest. Off-Balance Sheet Commitments 57 The Company enters into loan commitments, standby letters of credit and derivative financial instruments in the normal course of its business. Loan commitments are made to accommodate the financial needs of the Company’s customers.
The program will remain in effect until the earlier of October 2024 or the repurchase of the entire amount of common stock authorized to be repurchased by the Board of Directors. The Company has junior subordinated debentures with a carrying value of $112,978 at December 31, 2023, of which $109,388 are included in the Company’s Tier 1 capital.
The program will remain in effect until the earlier of October 2025 or the repurchase of the entire amount of common stock authorized to be repurchased by the Board of Directors. 58 The Company has junior subordinated debentures with a carrying value of $113,916 at December 31, 2024, of which $110,325 are included in the Company’s Tier 1 capital.
The following table presents our short-term borrowings by type at December 31: 2023 2022 Security repurchase agreements $ 7,577 $ 12,232 Short-term borrowings from the FHLB 300,000 700,000 Total short-term borrowings $ 307,577 $ 712,232 At December 31, 2023, long-term debt consists of our junior subordinated debentures and our subordinated notes; no long-term FHLB advances were outstanding.
The following table presents our short-term borrowings by type at December 31: 2024 2023 Security repurchase agreements $ 8,018 $ 7,577 Short-term borrowings from the FHLB 100,000 300,000 Total short-term borrowings $ 108,018 $ 307,577 At December 31, 2024, long-term debt consists of our junior subordinated debentures and our subordinated notes; no long-term FHLB advances were outstanding.
Our public fund transaction accounts are principally obtained 41 from public universities and municipalities, including school boards and utilities. Public fund deposits at December 31, 2023 were $1,866,495 compared to $1,760,460 at December 31, 2022. Deposits that are in excess of the FDIC insurance limit were $5,778,174 and $6,017,030 at December 31, 2023 and 2022, respectively.
Our public fund transaction accounts are principally obtained 41 from public universities and municipalities, including school boards and utilities. Public fund deposits at December 31, 2024 were $2,256,461 compared to $1,866,495 at December 31, 2023. Deposits that are in excess of the FDIC insurance limit were $6,489,547 and $5,778,174 at December 31, 2024 and 2023, respectively.
Efficiency Ratio Efficiency Ratio 2023 2022 68.33% 61.88% 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.
Efficiency Ratio Efficiency Ratio 2024 2023 63.57% 68.33% 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.
The Company’s unfunded loan commitments and standby letters of credit outstanding at December 31, 2023 and 2022 were as follows: 2023 2022 Loan commitments $ 3,091,997 $ 3,577,614 Standby letters of credit 113,970 98,357 The Company closely monitors the amount of remaining future commitments to borrowers in light of prevailing economic conditions and adjusts these commitments as necessary.
The Company’s unfunded loan commitments and standby letters of credit outstanding at December 31, 2024 and 2023 were as follows: 2024 2023 Loan commitments $ 2,856,308 $ 3,091,997 Standby letters of credit 90,267 113,970 The Company closely monitors the amount of remaining future commitments to borrowers in light of prevailing economic conditions and adjusts these commitments as necessary.
During 2023, the Company continued its efforts to maintain noninterest-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.
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.
At December 31, 2023 and 2022, there were no outstanding long-term advances with the FHLB. The total amount of the remaining credit available to us from the FHLB at December 31, 2023 was $2,922,315. We also maintain lines of credit with other commercial banks totaling $180,000.
At December 31, 2024 and 2023, there were no outstanding long-term advances with the FHLB. The total amount of the remaining credit available to us from the FHLB at December 31, 2024 was $4,004,630. We also maintain lines of credit with other commercial banks totaling $150,000.
Year Ended December 31, 2023 2022 Allowance for credit losses on unfunded loan commitments: Beginning balance $ 20,118 $ 20,035 (Recovery of) provision for credit losses on unfunded loan commitments (3,200) 83 Ending balance $ 16,918 $ 20,118 Nonperforming Assets . Nonperforming assets consist of nonperforming loans and other real estate owned.
Year Ended December 31, 2024 2023 Allowance for credit losses on unfunded loan commitments: Beginning balance $ 16,918 $ 20,118 Recovery of credit losses on unfunded loan commitments (1,975) (3,200) Ending balance $ 14,943 $ 16,918 52 Nonperforming Assets . Nonperforming assets consist of nonperforming loans and other real estate owned.
Net interest income 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 net interest income under various hypothetical rate scenarios. EVE measures our long-term earnings exposure from changes in market rates of interest.
Our current financial position is combined with assumptions regarding future business to calculate net interest income under various hypothetical rate scenarios. EVE measures our long-term earnings exposure from changes in market rates of interest.
The following table shows the maturity of time deposits at December 31, 2023 that are in excess of the FDIC insurance limit (or similar state deposit insurance limits) and that are otherwise uninsured: Three Months or Less $ 218,089 Over Three through Six Months 246,454 Over Six through Twelve Months 210,453 Over 12 Months 23,960 Total $ 698,956 Borrowed Funds Total borrowings include federal funds purchased, securities sold under agreements to repurchase, advances from the Federal Home Loan Bank (“FHLB”), subordinated notes and junior subordinated debentures and are classified on the Consolidated Balance Sheets as either short-term borrowings or long-term debt.
The following table shows the maturity of time deposits at December 31, 2024 that are in excess of the FDIC insurance limit (or similar state deposit insurance limits) and that are otherwise uninsured: Three Months or Less $ 293,798 Over Three through Six Months 276,583 Over Six through Twelve Months 184,875 Over 12 Months 10,324 Total $ 765,580 Borrowed Funds Total borrowings include federal funds purchased, securities sold under agreements to repurchase, advances from the Federal Home Loan Bank (“FHLB”), subordinated notes and junior subordinated debentures and are classified on the Consolidated Balance Sheets as either short-term borrowings or long-term debt.
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 in 2023 was $46,471, an increase of $1,652 from $44,819 for 2022.
The Company continues to examine new and existing contracts to negotiate favorable terms to offset the increased variable cost components of our data processing costs, such as new accounts and increased transaction volume. Net occupancy and equipment expense in 2024 was $45,960, a decrease of $511 from $46,471 for 2023.
Professional fees include fees for legal and accounting services, such as routine litigation matters, external audit services as well as assistance in complying with newly-enacted and existing banking and governmental regulation.
Professional fees include fees for legal and accounting services, such as routine litigation matters, external audit services as well as assistance in complying with newly-enacted and existing banking and governmental regulation. Professional fees were $12,418 for 2024 as compared to $13,671 for 2023.
The cost of total deposits was 1.67% and 0.26% for the years ending December 31, 2023 and 2022, respectively. The cost of interest-bearing deposits was 2.35% and 0.40% for the same respective periods.
The cost of total deposits was 2.42% and 1.67% for the years ending December 31, 2024 and 2023, respectively. The cost of interest-bearing deposits was 3.21% and 2.35% for the same respective periods.
At December 31, 2023 and 2022, the allowance for credit losses on held to maturity securities was $32. At December 31, 2023, unrealized losses of $139,794 were recorded on available for sale investment securities with a carrying value of $692,593.
At December 31, 2024 and 2023, the allowance for credit losses on held to maturity securities was $32. At December 31, 2024, unrealized losses of $138,608 were recorded on available for sale investment securities with a carrying value of $701,844.
At December 31, 2023, the Company had notional amounts of $535,725 on interest rate contracts with corporate customers and $532,279 in offsetting interest rate contracts with other financial institutions to mitigate the Company’s rate exposure on its corporate customers’ contracts.
At December 31, 2024, the Company had notional amounts of $880,371 on interest rate contracts with corporate customers and $877,051 in offsetting interest rate contracts with other financial institutions to mitigate the Company’s rate exposure on its corporate customers’ contracts.
For more information about the Company’s loan grades, see the information under the heading “Credit Quality” in Note 3, “Loans,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report.
Loan grades range from 10 to 95, with 10 rated loans having the least credit risk. For more information about the Company’s loan grades, see the information under the heading “Credit Quality” in Note 3, “Loans,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report.
Basic earnings per share for the year ended December 31, 2023 was $2.58 as compared to $2.97 for the year ended December 31, 2022. Diluted earnings per share for the year ended December 31, 2023 was $2.56 as compared to $2.95 for the year ended December 31, 2022.
Basic earnings per share for the year ended December 31, 2024 was $3.29 as compared to $2.58 for the year ended December 31, 2023. Diluted earnings per share for the year ended December 31, 2024 was $3.27 as compared to $2.56 for the year ended December 31, 2023.
For 2023 other noninterest income included a one-time payment of $2,300 related to our participation in a recovery agreement assumed as part of a previous acquisition. Other noninterest income was $21,035 for 2023 compared to $13,874 for 2022. Noninterest Expense Noninterest Expense to Average Assets 2023 2022 2.55% 2.38% Noninterest expense was $439,622 and $395,372 for 2023 and 2022, respectively.
For 2023 other noninterest income included a one-time payment of $2,300 related to our participation in a recovery agreement assumed as part of a previous acquisition. Noninterest Expense Noninterest Expense to Average Assets 2024 2023 2.63% 2.55% Noninterest expense was $461,618 and $439,622 for 2024 and 2023, respectively.
Wealth Management revenue was $22,132 for 2023 compared to $22,339 for 2022. The market value of assets under management or administration was $5,238,131 and $5,004,329 at December 31, 2023 and 2022, respectively.
Wealth Management revenue was $23,559 for 2024 compared to $22,132 for 2023. The market value of assets under management or administration was $6,472,526 and $5,238,131 at December 31, 2024 and 2023, respectively.
The following table presents the allocation of the allowance for credit losses on loans and the percentage of each loan category to total loans at December 31 for each of the years presented. 2023 2022 Balance % of Total Balance % of Total Commercial, financial, agricultural $ 43,980 15.15 % $ 44,255 14.46 % Lease financing 2,515 0.94 % 2,463 0.99 % Real estate – construction 18,612 10.79 % 19,114 11.49 % Real estate – 1-4 family mortgage 47,283 27.85 % 44,727 27.78 % Real estate – commercial mortgage 77,020 44.43 % 71,798 44.20 % Installment loans to individuals 9,168 0.84 % 9,733 1.08 % Total $ 198,578 100.00 % $ 192,090 100.00 % The provision for credit losses on loans charged to operating expense is an amount that, 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 following table presents the allocation of the allowance for credit losses on loans and the percentage of each loan category to total loans at December 31 for each of the years presented. 2024 2023 Balance % of Total Balance % of Total Commercial, financial, agricultural $ 38,527 14.64 % $ 43,980 15.15 % Lease financing 3,368 0.70 % 2,515 0.94 % Real estate – construction 15,126 8.49 % 18,612 10.79 % Real estate – 1-4 family mortgage 47,761 27.07 % 47,283 27.85 % Real estate – commercial mortgage 90,204 48.40 % 77,020 44.43 % Installment loans to individuals 6,770 0.70 % 9,168 0.84 % Total $ 201,756 100.00 % $ 198,578 100.00 % The provision for credit losses on loans charged to operating expense is an amount that, 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.
Internal factors include balance sheet changes in volume and mix as well as loan and deposit pricing decisions. External factors include changes in market interest rates, competition and the shape of the interest rate yield curve. During 2023, net interest income growth was primarily driven by the rising rate environment throughout 2022 and 2023.
Internal factors include balance sheet changes in volume and mix as well as loan and deposit pricing decisions. External factors include changes in market interest rates, competition and the shape of the interest rate yield curve. During 2024, the decline in net interest income and margin was primarily driven by the increase in the cost of deposits year over year.
The model is used to perform both net interest income forecast simulations for multiple year horizons and economic value of equity (“EVE”) analyses, each under various interest rate scenarios, which could impact the results presented in the table below.
The model is used to perform both net interest income forecast simulations for multiple year horizons and economic value of equity (“EVE”) analyses, each under various interest rate scenarios, which could impact the results presented in the table below. 54 Net interest income simulations measure the short and medium-term earnings exposure from changes in market interest rates in a rigorous and explicit fashion.
For commercial and commercial real estate secured loans, internal risk-rating grades are assigned by lending, credit administration and loan review personnel, based on an analysis of the financial and collateral strength and other credit attributes underlying each loan. Loan grades range from 10 to 95, with 10 rated loans having the least credit risk.
Loan requests are reviewed for approval by senior credit officers. For commercial and commercial real estate secured loans, internal risk-rating grades are assigned by lending, credit administration and loan review personnel, based on an analysis of the financial and collateral strength and other credit attributes underlying each loan.
Our goal is to improve the efficiency ratio over time from currently reported levels as a result of revenue growth while at the same time controlling noninterest expenses. Income Taxes Income tax expense for 2023 and 2022 was $32,509 and $45,240, respectively.
We remain committed to aggressively managing our costs within the framework of our business model. Our goal is to improve the efficiency ratio over time from currently reported levels as a result of revenue growth while at the same time controlling noninterest expenses. Income Taxes Income tax expense for 2024 and 2023 was $49,508 and $32,509, respectively.
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 each of the years presented: Percentage of Total Cost of Funds 2023 2022 2023 2022 Noninterest-bearing demand 26.94 % 33.39 % — % — % Interest-bearing demand 43.04 45.04 2.18 0.40 Savings 6.58 7.83 0.33 0.09 Brokered deposits 4.72 0.17 5.17 4.43 Time deposits 12.69 9.19 2.90 0.56 Borrowed funds 6.03 4.38 5.13 4.05 Total deposits and borrowed funds 100.00 % 100.00 % 1.88 % 0.42 % Interest expense on deposits was $232,331 and $35,208 for 2023 and 2022, respectively.
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 each of the years presented: Percentage of Total Cost of Funds 2024 2023 2024 2023 Noninterest-bearing demand 23.61 % 26.94 % — % — % Interest-bearing demand 48.80 43.04 3.12 2.18 Savings 5.58 6.58 0.35 0.33 Brokered deposits 1.60 4.72 5.46 5.17 Time deposits 16.60 12.69 4.22 2.90 Borrowed funds 3.81 6.03 5.12 5.13 Total deposits and borrowed funds 100.00 % 100.00 % 2.53 % 1.88 % Interest expense on deposits was $346,592 and $232,331 for 2024 and 2023, respectively.
The Company also determined to sell a portion of its available-for-sale securities portfolio in December of 2023 and thus recognized an impairment on those identified securities of $19,352 as of year-end (the securities were subsequently sold in January 2024). There were no net gains or losses on sales of securities during 2022.
Losses on sales of securities for the twelve months ended 2023 were $22,438, resulting from the sale of approximately $511,419 in securities. The Company also determined to sell a portion of its available-for-sale securities portfolio in December 2023 and thus recognized an impairment on those identified securities of $19,352 as of year-end (the securities were subsequently sold in January 2024).
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 each of the years presented: Percentage of Total Cost of Funds 2023 2022 2023 2022 Noninterest-bearing demand 26.94 % 33.39 % — % — % Interest-bearing demand 43.04 45.04 2.18 0.40 Savings 6.58 7.83 0.33 0.09 Brokered deposits 4.72 0.17 5.17 4.43 Time deposits 12.69 9.19 2.90 0.56 Borrowings 6.03 4.38 5.13 4.05 Total deposits and borrowed funds 100.00 % 100.00 % 1.88 % 0.42 % Cash and cash equivalents were $801,351 at December 31, 2023, compared to $575,992 at December 31, 2022.
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 each of the years presented: Percentage of Total Cost of Funds 2024 2023 2024 2023 Noninterest-bearing demand 23.61 % 26.94 % — % — % Interest-bearing demand 48.80 43.04 3.12 2.18 Savings 5.58 6.58 0.35 0.33 Brokered deposits 1.60 4.72 5.46 5.17 Time deposits 16.60 12.69 4.22 2.90 Borrowings 3.81 6.03 5.12 5.13 Total deposits and borrowed funds 100.00 % 100.00 % 2.53 % 1.88 % Cash and cash equivalents were $1,092,032 at December 31, 2024, compared to $801,351 at December 31, 2023.

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