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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section☒ ANNUAL REPORT PURSUANT TO SECTION 13 orOR 15(d) of the Securities Exchange Act ofOF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 20182021
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________________to _______________________
Commission file number 001-13253
RENASANT CORPORATION
(Exact name of registrant as specified in its charter)
RENASANT CORPORATIONMississippi64-0676974
(Exact name of registrant as specified in its charter)
Mississippi64-0676974
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
(I.R.S. Employer
Identification No.)
209 Troy Street, Tupelo, MississippiTupelo,Mississippi38804-4827
(Address of principal executive offices)(Zip Code)
(662) 680-1001
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Registrant’s telephone number, including area code(662) 680-1001
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock,stock, $5.00 par value per shareRNSTThe NASDAQ Global SelectStock Market LLC
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     Yes þ No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.     Yes ¨ No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.                                             ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company,”company” in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated filer
Large accelerated filerþAccelerated filer¨
Non-accelerated filer¨Smaller reporting company¨
Emerging growth company¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.                                 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ
As of June 30, 2018,2021, the aggregate market value of the registrant’s common stock, $5.00 par value per share, held by non-affiliates of the registrant, computed by reference to the last sale price as reported on The NASDAQ Global Select Market for such date, was $2,191,549,020.$2,196,590,080.
As of February 22, 2019, 58,569,90418, 2022, 55,815,152 shares of the registrant’s common stock, $5.00 par value per share, were outstanding.




DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the 20192022 Annual Meeting of Shareholders of Renasant Corporation are incorporated by reference into Part III of this Form 10-K.




Renasant Corporation and Subsidiaries
Form 10-K
For the Year Ended December 31, 20182021
CONTENTS
Page
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Item 15.
Item 16.


PART I



CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K may contain or incorporate by reference statements regarding Renasant Corporation (referred to herein as the “Company”, “we”, “our”, or “us”) that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements usuallyStatements preceded by, followed by or that otherwise include the words such as“believes,” “expects,” “projects,” “proposes,” “anticipates,” “believes,” “intends,” “estimates,” “strategy,” “plan,“plans,” “potential,” “focus,” “possible,” “approximately,“may increase,“should”“may fluctuate,” “will likely result,” and variations ofsimilar expressions, or future or conditional verbs such wordsas “will,” “should,” “would” and other similar expressions. The“could,” are generally forward-looking in nature and not historical facts. Forward-looking statements in, or incorporated by reference into, this report reflect our current assumptions and estimates of, among other things,include information about the Company’s future economic circumstances, industry conditions,financial performance, business strategy, projected plans and decisions, Company performanceobjectives and financial results. Managementare based on the current beliefs and expectations of management.The Company’s management believes its assumptions and estimatesthese forward-looking statements are reasonable, but they are all inherently subject to significant business, economic and competitive risks and uncertainties, many of which are beyond management’s control, that could cause the Company’s actualcontrol.In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results and experience tomay differ from the anticipated results and expectationsthose indicated or implied in suchthe forward-looking statements. Suchstatements, and such differences may be material. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and, accordingly, investors should not place undue reliance on these forward-looking statements, which speak only as of the date they are made.

Important factors currently known to management that could cause our actual results to differ materially from those in forward-looking statements include the following risks (which are addressedfollowing:
the continued impact of the COVID-19 pandemic (and variants thereof) and related governmental response measures on the U.S. economy and the economies of the markets in more detail in Item 1A, Risk Factors, of this Form 10-K):which the Company operates;
the Company’s ability to efficiently integrate acquisitions into its operations, retain the customers of these businesses, grow the acquired operations and realize the cost savings expected from an acquisition to the extent and in the timeframe anticipated by management, including with respect to the Company’s recently-completed acquisition of Brand Group Holdings, Inc.;management;
the effect of economic conditions and interest rates on a national, regional or international basis;
timing and success of the implementation of changes in operations to achieve enhanced earnings or effect cost savings;
competitive pressures in the consumer finance, commercial finance, insurance, financial services, asset management, retail banking, mortgage lending and auto lending industries;
the financial resources of, and products available to,from, competitors;
changes in laws and regulations as well as changes in accounting standards;
changes in policy by regulatory agencies;
changes in the securities and foreign exchange markets;
the Company’s potential growth, including its entrance or expansion into new markets, and the need for sufficient capital to support that growth;
changes in the quality or composition of the Company’s loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers;
an insufficient allowance for loancredit losses as a result of inaccurate assumptions;
general economic, market or business conditions, including the impact of inflation;
changes in demand for loan products and financial services;
concentration of credit exposure;
changes or the lack of changes in interest rates, yield curves and interest rate spread relationships;
increased cybersecurity risk, including potential network breaches, business disruptions or financial losses;
civil unrest, natural disasters, epidemics and other catastrophic events in the Company’s geographic area;
the impact, extent and timing of technological changes; and
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other circumstances, many of which are beyond management’s control.
The Company expresslybelieves that the assumptions underlying its forward-looking statements are reasonable, but any of the assumptions could prove to be inaccurate. Investors are urged to carefully consider the risks described elsewhere in this report and in the Company’s other filings with the Securities and Exchange Commission (the “SEC”) from time to time, including its Quarterly Reports on Form 10-Q, which are available at www.renasant.com and the SEC’s website at www.sec.gov.

The Company undertakes no obligation, and specifically disclaims any obligation, to update or revise forward-looking statements, whether as a result of new information or to reflect changed assumptions,

or estimates, the occurrence of unanticipated events or changes to future operating results that occur after the date the forward-looking statements are made.over time, except as required by federal securities laws.

The information set forth in this Annual Report on Form 10-K is as of February 22, 2019,18, 2022 unless otherwise indicated herein.

PART I
ITEM 1. BUSINESS
General
Renasant Corporation, a Mississippi corporation incorporated in 1982, owns and operates Renasant Bank, a Mississippi banking corporation with operations in Mississippi, Tennessee, Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina and Georgia,Tennessee. Renasant Bank, in turn, owns and operates Renasant Insurance, Inc., a Mississippi corporation with operations in Mississippi. Renasant Insurance, Inc. isMississippi, and Park Place Capital Corporation, a wholly-owned subsidiary of Renasant Bank.Tennessee corporation with operations across our footprint. Renasant Bank is sometimes referred to herein as the “Bank,” andwhile Renasant Insurance, Inc. is referred to herein as “Renasant Insurance.Insurance” and Park Place Capital Corporation is referred to as “Park Place Capital.
Our vision is to be the financial services advisor and provider of choice in each community we serve. With this vision in mind, management has organized the branch banks into community banks using a franchise concept. The franchise approach empowers community bank presidents to execute their own business plans in order to achieve our vision. Specific performance measurement tools are available to assist these presidents in determining the success of their plan implementation. A few of the ratios used in measuring the success of their business plan include:
return on average assetsnet interest margin and spread
the efficiency ratiofee income shown as a percentage of loans and deposits
loan and deposit growththe volume and pricing of deposits
net charge-offs to average loansthe 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. The centralization of these functions enables us to maintain consistent quality and achieve certain economies of scale.
Our vision is further validated through our core values. TheseOur core values includeinclude: (1) employees are our greatest assets, (2) quality is not negotiable and (3) clients’ trust is foremost. Centered on these values was the development of five objectivesour 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. We believe that are the focal pointsuccessful implementation of our strategic plan. Those objectives include: (1) clientplan will promote the satisfaction and development (2) financial soundnessof our employees, clients and profitability, (3) growth, (4) employee satisfaction and development and (5) shareholder satisfaction and development.shareholders.
Members of our Board of Directors also serve as members of the Board of Directors of the Bank (which has a broader membership than the Company board). 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.
Acquisition of Brand Group Holdings, Inc.
On September 1, 2018, the Company completed its acquisition by merger of Brand Group Holdings, Inc. (“Brand”), a bank holding company headquartered in Atlanta, Georgia and the parent company of The Brand Banking Company (“Brand Bank”), a Georgia banking corporation. On the same date, Brand Bank merged with and into Renasant Bank. On the closing date of the acquisition, Brand operated thirteen banking locations throughout the greater Atlanta metropolitan area. The Company issued 9,306,477 shares of common stock and paid approximately $21.9 million to Brand shareholders, excluding cash paid for fractional shares, and paid approximately $17.2 million, net of tax benefit, to Brand stock option holders for 100% of the voting equity in Brand in a transaction valued at approximately $474 million. Including the effect of purchase accounting adjustments, the Company acquired assets with a fair value of $2.3 billion which included loans held for investment and loans held for sale with a fair value of $1.6 billion, and assumed liabilities with a fair value of $1.9 billion, including deposits with a fair value of $1.7 billion. At the acquisition date, approximately $321.9 million of goodwill and $27.5 million of core deposit intangible assets were recorded. The Company is finalizing the fair values of the assets acquired and liabilities assumed as part of the acquisition; accordingly, the foregoing amounts remain subject to change.
Acquisition of Metropolitan BancGroup, Inc.
On July 1, 2017, the Company completed its acquisition by merger of Metropolitan BancGroup, Inc. (“Metropolitan”), a bank holding company headquartered in Ridgeland, Mississippi and the parent of Metropolitan Bank, a Mississippi banking corporation. On the same date, Metropolitan Bank merged with and into Renasant Bank. On the closing date of the acquisition, Metropolitan operated eight banking locations in Nashville and Memphis, Tennessee and the Jackson, Mississippi Metropolitan Statistical Area.

The Company issued 4,883,182 shares of its common stock and paid $4.8 million to Metropolitan stock option holders, net of tax benefit, for 100% of the voting equity interest in Metropolitan in a transaction valued at $219.5 million. Including the effect of purchase accounting adjustments, the Company acquired assets with a fair value of $1.4 billion, including loans held for investment and loans held for sale with a fair value of $967.8 million, and assumed liabilities with a fair value of $1.1 billion, including deposits with a fair value of $942.1 million. At the acquisition date, approximately $140.5 million of goodwill and $7.0 million of core deposit intangible assets were recorded.
Operations
The Company has three reportable segments: a Community Banks segment, an Insurance segment and a Wealth Management segment.
Neither we, the Bank nor Renasant Insurance We do not have any foreign operations.


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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 small to medium-size businesses.businesses of all sizes. As described in more detail below, these services include checking and savings accounts, business and personal loans, interim construction loans, specialty commercial lending, treasury management services and checking and savings accounts, as well as safe deposit boxes and night depository facilities. Automated teller machines are located throughout our market area.area, and we have interactive teller machines in many of our urban markets. Our Online and Mobile Banking products and our call center also provide 24-hour banking services.
As of December 31, 2018,2021, we had 199189 banking, insurancelending and wealth managementmortgage offices located throughout our markets in Mississippi, Tennessee, Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina and Georgia.Tennessee. Customers may also conduct many banking transactions, such as opening deposit accounts and applying for certain types of loans, through our Online and Mobile Banking Products.
Lending Activities.  Income generated by our lending activities (including our Mortgage division), in the form of both interest income, and loan-related fees, and income from the sale and servicing of mortgage loans, comprises a substantial portion of our revenue, accounting for approximately 68.52%78.66%, 66.16%84.01% and 67.92%79.32% of our total gross revenues in 2018, 20172021, 2020 and 2016,2019, respectively. 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. Loans are originated through our traditional community banking model based on customer need. Customer needs are met either through our commercial lending groups or personal banking lending groupsbankers 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. Also included in our commercial lending group are experienced lenders within our specialty lines of business, which consist of our asset-based lending, Small Business Administration lending, healthcare, factoring, and equipment lease financing banking groups. Our personal banking group provides small consumer installment loans, residential real estate loans, lines of credit and construction financing and originates conventional first and second mortgages.
The following is a 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 creditsuch risk. Our loans are primarily generated within the market areas where our branchesoffices are located.
— Commercial, Financial and Agricultural Loans. Commercial, financial and agricultural loans (referred to as “commercial“C&I loans”), which accounted for approximately 14.27%14.20% of our total loans at December 31, 2018,2021, 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. The loan-to-valueLoan-to-value ratios range from 50% to 85%, depending on the type of collateral. Terms are typically short term in nature and are commensurate with the secondary source of repayment that serves as our collateral.
Although commercialC&I loans may be collateralized by equipment or other business assets, the repayment of this type of loan depends primarily on the creditworthiness and projected cash flow of the borrower (and any guarantors). Thus, the chief considerations when assessing the risk of a commercialC&I loan are the local business borrower’s ability to sell its products and products/services, thereby generating sufficient operating revenue to repay us under the agreed upon terms and conditions, and the general business conditions of the local economy.economy or other market that the business serves. The liquidation of collateral is considered a secondary source of repayment. Another source of repayment are guarantors of the loan, if any. To manage these risks, the Bank’s policy is to secure its commercialC&I loans with both the assets of the borrowing business and any other additional collateral and guarantees that may be available. In addition, we actively monitor certain financial measures of the borrower, including advance rate, cash flow, collateral value and other appropriate credit factors. We use commercialC&I loan credit scoring models for smaller size commercialsmaller-size loans.

— Real Estate – 1-4 Family Mortgage. We are active in the real estate – 1-4 family mortgage area (referred to as “residential real estate loans”), with approximately 30.78%27.19% of our total loans at December 31, 2018,2021, being residential real estate loans. In addition, in 2021, we originated for sale on the secondary market approximately $4.06 billion in residential real estate loans through our Mortgage division. 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. 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 in this Annual Report as “residential land development loans”). In addition, we offer home equity loans or lines of credit and term loans secured by first and second mortgages on the residences of borrowers who elect to use the accumulated equity in their homes for purchases, refinances, home improvements, education and other personal expenditures.
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Both fixed and variable rate loans are offered with competitive terms and fees. Originations of residential real estate loans are generated through retail efforts in our branches or originations by or referrals from our mortgage operations, via our correspondent relationships with other financial institutions,Mortgage division and online through our Renasant Consumer Direct channel. We attempt to minimize the risk associated with residential real estate loans by strictly scrutinizing the financial condition of the borrower; typically, we also limit the maximum loan-to-value ratio. With respect to second lien home equity loans or lines of credit, which inherently carry a higher risk of loss upon default, we limit our exposure by limiting these types of loans to borrowers with high credit scores.
We retain residential real estate loans forin 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 adjustable-ratevariable-rate mortgage product offerings.
WeAs 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. 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. When these loans are sold, we either release or retain the related servicing rights, depending on a number of factors, such as the pricing of such loans in the secondary market, fluctuations in interest rates that would impact the profitability of the loans and other market-related conditions. Residential real estate originations to be sold are sold either on a “best efforts” basis or under a “mandatory delivery” sales agreement. Under a “best efforts” sales agreement, residential real estate originations are locked in at a contractual rate with third party private investors or directly with government sponsored agencies, and we are obligated to sell the mortgages to such investors only if the mortgages are closed and funded. The risk we assume is conditioned upon loan underwriting and market conditions in the national mortgage market. Under a “mandatory delivery” sales agreement, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price and delivery date. Penalties are paid to the investor if we fail to satisfy the contract. The Company does not actively market or originate subprime mortgage loans.
With respect to second lien home equity loans or lines of credit, which inherently carry a higher risk of loss upon default, we limit our exposure by limiting these types of loans to borrowers with high credit scores.
— Real Estate – Commercial Mortgage. Our real estate – commercial mortgage loans (“commercial real estate loans”) represented approximately 44.60%45.39% of our total loans at December 31, 2018.2021. Included in this portfolio are loans in which the owner develops a property with the intention of locating its business there. These loans are referred to as “owner-occupied” commercial real estate loans. Payments on these loans are dependent on the successful development and management of the business as well as the borrower’s ability to generate sufficient operating revenue to repay the loan. The Bank mitigates the risk that our estimate of value will prove to be inaccurate by having sufficient sources of secondary repayment as well as guarantor support. In some instances, in addition to our mortgage on the underlying real estate of the business, our commercial real estate loans are secured by other non-real estate collateral, such as equipment or other assets used in the business.
In addition to owner-occupied commercial real estate loans, we offer loans in which the owner develops a property where the source of repayment of the loan will come from the sale or lease of the developed property, for example, retail shopping centers, hotels and storage facilities, etc.facilities. These loans are referred to as “non-owner occupied” commercial real estate loans. We also offer commercial real estate loans to developers of commercial properties for purposes of site acquisition and preparation and other development prior to actual construction (referred to in this Annual Report as “commercial land development loans”). Non-owner occupied commercial real estate loans and commercial land development loans are dependent on the successful completion of the project and may be affected by adverse conditions in the real estate market or the economy as a whole.
We seek to minimize risks relating to all commercial real estate loans by limiting the maximum loan-to-value ratio and strictly scrutinizing the financial condition of the borrower, the quality of the collateral, the management of the property securing the loan and, where applicable, the financial strength of the tenant occupying the property. Loans are usually structured either to fully amortize over the term of the loan or to balloon after the third year or fifth year of the loan, typically with an amortization period not to exceed 20 years. We also actively monitor such financial measures as advance rate, cash flow, collateral value and other appropriate credit factors. 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 8.15%11.03% of our total loans at December 31, 2018.2021. 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 96 to 12 months for residential property and from 1224 to 2436 months for non-residential and multi-family properties. Similar to non-owner occupied commercial real estate loans, the source of repayment of a construction loan comes from the sale or lease of newly-constructed property, although often construction loans are repaid with the proceeds of a commercial real estate loan that we make to the owner or lessor of the newly-constructed property.
Construction lending entails significant additional risks compared to residential real estate or commercial real estate lending, including the risk that loan funds are advanced upon the security of the property under construction, which is of uncertain value
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prior to the completion of construction. The risk is to evaluate accurately the total loan funds required to complete a project and to ensure proper loan-to-value ratios during the construction phase. We address the risks associated with construction lending in a number of ways. As a threshold matter, we limit loan-to-value and loan-to-cost ratios to 85% of when-completed appraised values for owner-occupied and investor-owned residential or commercial properties. We monitor draw requests either internally or with the assistance of a third party, creating an additional safeguard that ensures advances are in line with project budgets.
— Installment Loans to Individuals. Installment loans to individuals (or “consumer loans”), which represented approximately 1.52%1.43% of our total loans at December 31, 2018,2021, 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. In the event of default, a shortfall in the value of the collateral may pose a loss to us in this loan category. Before granting a consumer loan, we assess the applicant’s credit history and ability to meet existing and proposed debt obligations. Although the applicant’s creditworthiness is the primary consideration, the underwriting process also includes a comparison of the value of the collateral, if any, to the proposed loan amount. We obtain a lien against the collateral securing the loan and hold title until the loan is repaid in full.
— Equipment Financing and Leasing. Equipment financing loans (or “lease financing loans”), which represented approximately 0.68%0.76% of our total loans at December 31, 2018,2021, 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. Loss or decline of income by the borrower due to unplanned occurrences represents the primary risk of default to us. In the event of default, a shortfall in the value of the collateral may pose a loss to us in this loan category.  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.
Addressing Aggregate Lending Risks. To protect against In addition to the steps described above to mitigate the risks associated with fluctuations in economic conditions within the Bank’s footprint,posed by any individual loan relationship, management has implemented a strategy tostructure that proactively monitormonitors the risk to the Company presented by the Bank’s loan portfolio as a whole. First, we purposefully manage the loan portfolio to avoid excessive concentrations in any particular loan category. Our goal is to structure the loan portfolio so that it is comprised of approximately one-third commercialwell balanced among C&I loans and owner-occupied commercial real estate loans, one-third non-owner occupied commercial real estate loans and one-third residential real estate loans and consumer loans.loans while taking into account current market risks and lending opportunities. Construction and land development loans are allocated between the commercial real estate and residential real estate categories based on the property securing the loan. With respect to construction and land development loans in particular, management monitors whether the allocation of these loans across geography and asset type heightens the general risk associated with these types of loans. We also monitor concentrations in our construction and land development loans based on regulatory guidelines promulgated by banking regulators, which includeinvolves 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. A further discussion of the risk reduction policies and procedures applicable to our lending activities can be found in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, under the heading “Risk Management – Credit Risk and Allowance for LoanCredit Losses.”
Investment Activities. We acquire investment securities to provide a source for meeting our liquidity needs as well as to supply securities to be used in collateralizing certain deposits and other types of borrowings. During 2021, we also deployed a portion of our excess liquidity into the securities portfolio. We primarily acquire mortgage-backedmortgage backed securities and collateralized mortgage obligations issued by government-sponsored entities such as FNMA, FHLMC and GNMA (colloquially known as “Fannie Mae,” “Freddie Mac” and “Ginnie Mae,” respectively) as well as municipal securities. 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, 2018, all of2021, the Company’s investment securities were classified asincluded both available for sale.sale and held to maturity classifications.
Investment income generated by our investment activities, both taxable and tax-exempt, accounted for approximately 5.38%5.13%, 6.48%4.46% and 6.98%5.41% of our total gross revenues in 2018, 20172021, 2020 and 2016,2019, respectively.

Deposit Services. We offer a broad range of deposit services and products to our consumer and commercial clients. Through our community branch networks, we offer consumer checking accounts with free online and mobile banking, which includes bill pay and transfer features, peer-to-peer payment, interest bearing checking, money market accounts, savings accounts, certificates of deposit, individual retirement accounts and health savings accounts.
For our commercial clients, we offer competitive checking and savings services as well as a competitive suite of cashtreasury management products which include but are not limited to, remote deposit capture, account reconciliation, with CD-ROM statements, electronic statements, fraud protection via positive pay,
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ACH origination and wire transfer, wholesale and retail lockbox services, overnight investment sweep accounts,options, enhanced business Internet banking outbound data exchange and multi-bank reporting.mobile banking.
TheFees generated through the deposit services we offer accounted for approximately 9.52%7.15%, 10.57%5.88% and 10.78%7.78% of our total gross revenues in 2018, 20172021, 2020 and 2016, respectively, in the form of fees for deposit services.2019, respectively. The deposits held by the Bank have been primarily generated within the market areas where our branches are located.
Operations of Wealth Management
Through theOur Wealth Management segment we offeroperates through two divisions: Trust and Financial Services. The Trust division, which is housed in the Bank’s trust department, offers a wide variety of fiduciary and custodial services, including investment advisory, accounting and administer (asadministrative services (acting as trustee or in other fiduciary or representative capacities) for qualified retirement plans, profit sharing and other employee benefit plans, IRAs, personal trusts and estates. In addition,Our fees for managing these accounts are based on changes in market values of the assets under management in the account, with the amount of the fee depending on services we provide and the type of account.

The Financial Services division, which operates through Park Place Capital (although the Bank’s trust department maintains some legacy financial service operations), offers specialized products and services to our customers.These products and services include fixed and variable annuities, mutual funds and stocks, some of which are offered through a third party provider. Park Place Capital also provides administrative and compliance services for certain mutual funds.

For 2021, the Wealth Management segment offers annuities, mutual funds and other investment services through a third party broker-dealer. For 2018, the Wealth Management segment contributedgenerated total revenue of $15.8$23.8 million, or 2.59%,3.39% of the Company’s total gross revenues. 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. For 2018,2021, Renasant Insurance contributedgenerated total revenue of $10.3$11.8 million, or 1.69%, of the Company’s total gross revenues, and operated teneight offices - one office each in Ackerman, Brandon, Corinth, Durant, Kosciusko, Louisville, Madison, Oxford, Starkvillethroughout north and Tupelo,north central Mississippi.
Competition
Community Banks
Vigorous competition exists in all major product and geographic areas in which we conduct banking business. We compete through the Bank for available loans and deposits and the provision of other financial services (such as treasury management) with state, regional and national banks in all of our service areas, as well as savings and loan associations, credit unions, finance companies, mortgage companies, insurance companies, brokerage firms and investment companies.companies in all of our service areas. All of these numerous institutions compete in the delivery of servicesproducts and productsservices through availability, quality and pricing, and many of our competitors are larger and have substantially greater resources than we do, including higher total assets and capitalization, greater access to capital marketslarger technology and marketing budgets and a broader offering of financial services.
For 2018, we maintained approximately 14% of the market share (deposit base) in our entire Mississippi area, approximately 2% in our entire Tennessee area, approximately 2% in our entire Alabama area, approximately 2% in our entire Florida area and approximately 2% in our entire Georgia area.









Certain markets in which we operate have demographics that we believe indicate the possibility of future growth at higher rates than other markets in which we operate. The following table shows our deposit share in those markets as of June 30, 2018 (which is the latest date that such information is available):
Market Available Deposits (in billions)      
 Deposit
Share         
Mississippi    
Tupelo $2.4
 50.6%
DeSoto County 2.6
 13.5%
Oxford 1.2
 9.0%
Columbus 1.0
 8.7%
Starkville 1.0
 31.0%
Jackson 12.6
 4.1%
Tennessee    
Memphis 26.1
 2.4%
Nashville 48.7
 1.2%
Maryville 2.1
 2.9%
Alabama    
Birmingham 34.8
 0.7%
Decatur 1.9
 18.0%
Huntsville/Madison 7.2
 1.5%
Montgomery 6.4
 1.1%
Tuscaloosa 3.5
 1.4%
Florida    
Columbia 1.0
 2.5%
Gainesville 4.4
 2.2%
Ocala 6.2
 2.1%
Georgia    
Alpharetta/Roswell 9.0
 1.9%
Canton/Woodstock 3.2
 5.0%
Cartersville/Cumming 4.0
 4.4%
Gwinnett County 17.1
 10.6%
Lowndes County 2.0
 2.9%
Source:  FDIC, as of June 30, 2018
Wealth Management
Our Wealth Management segment competes with other banks, brokerage firms, financial advisers and trust companies, which provide one or more of the services and products that we offer. Our wealth management operations compete on the basis of available product lines, rates and fees, as well as reputation and professional expertise. No particular company or group of companies dominates this industry.
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 other insurance carriers. All of these agencies compete in the delivery of personal and commercial product lines. There is no dominant insurance agency in our markets.

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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”). As a result, we are subject to supervision, regulation and examination by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). The Bank is a commercial bank chartered under the laws of the State of Mississippi; it is not a member of the Federal Reserve System. As a Mississippi non-member bank, the Bank is subject to supervision, regulation and examination by the Mississippi Department of Banking and Consumer Finance (the “DBCF”), as the chartering entity of the bank,Bank, and by the FDIC, as the insurer of the Bank’s deposits. As an institution with more than $10 billion in assets, we are subject to examination by the Consumer Financial Protection Bureau (the “CFPB”) for compliance with federal consumer protection laws.As a result of this extensive system of supervision and regulation, the growth and earnings performance of the Company and the Bank are affected not only by management decisions and general and local economic conditions, but also by the statutes, rules, regulations

and policies administered by the Federal Reserve, the FDIC, and the DBCF, as well as bythe CFPB and other federal and state regulatory authorities with jurisdiction over our operations, such as the Consumer Financial Protection Bureau (the “CFPB”).operations.

The bank regulatory scheme has two primary goals: to maintain a safe and sound banking system and to facilitate the conduct of sound monetary policy. This scheme, including the laws and regulations administered by the CFPB, also seeks to ensure broad, non-discriminatory access to financial services on fair and reasonable terms. This comprehensive system of supervision and regulation is intended primarily for the protection of the FDIC’s deposit insurance fund, bank depositors, consumers and the public in general, rather than our shareholders or creditors. To this end, federal and state banking laws and regulations control,govern, among other things, the types of activities in which we and the Bank may engage, the terms and conditions of our products and services and the manner in which we offer our products and services, permissible investments, the level of reserves that the Bank must maintain against deposits, minimum equity capital levels, the nature and amount of collateral required for loans, maximum interest rates that can be charged, the manner and amount of the dividends that may be paid, and corporate activities regarding mergers, acquisitions and the establishment of branch offices.
The description below summarizes certain elements of the bank regulatory framework applicable to us and the Bank. This summary is not, however, intended to describe all laws, regulations and policies applicable to us and the Bank, and the description is qualified in its entirety by reference to the full text of the statutes, regulations, policies, interpretative letters and other written guidance that are described below. Further, the following discussion addresses the bank regulatory framework as in effect as of the date of this Annual Report on Form 10-K. Legislation and regulatory action to revise 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. 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.
Supervision and Regulation of Renasant Corporation
General. As a bank holding company registered under the BHC Act, we are subject to the regulation and supervision applicable to bank holding companies by the Federal Reserve. The BHC Act and other federal laws subject bank holding companies to particular restrictions on the types of activities in which they may engage and to a range of supervisory requirements and activities, including regulatory enforcement actions for violations of laws and regulations or engaging in unsafe and unsound banking practices. The Federal Reserve’s jurisdiction also extends to any company that we directly or indirectly control, such as any non-bank subsidiaries and other companies in which we own a controlling investment.
Scope of Permissible Activities. Under the BHC Act, we are prohibited from engaging directly or indirectly in activities other than those of banking, managing or controlling banks or furnishing services to or performing services for our subsidiary banksthe Bank and from acquiring a direct or indirect interest in or control of more than 5% of the voting shares of any company that is not a bank or financial holding company. 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. In making determinations whether activities are closely related to banking or managing banks, the Federal Reserve must consider whether the performance of such activities by a bank holding company or its subsidiaries can reasonably be expected to produce benefits to the public, such as greater convenience, increased competition or gains in efficiency of resources, and whether such public benefits outweigh the risks of possible adverse effects, such as decreased or unfair competition, conflicts of interest or unsound banking practices. Currently-permitted activities include, among others, operating a mortgage, finance, credit card or factoring company; providing certain data processing, storage and transmission services; acting as an investment or financial advisor; acting as an
7


insurance agent for certain types of credit-related insurance; leasing personal or real property on a nonoperating basis; and providing certain stock brokerage services.
Pursuant to the amendment to the BHC Act effected by the Financial Services Modernization Act of 1999 (commonly referred to as the Gramm-Leach Bliley Act, or the “GLB Act”), a bank holding company whose subsidiary deposit institutions are “well capitalized” and “well managed” may elect to become a “financial holding company” (“FHC”) and thereby engage without prior Federal Reserve approval in certain banking and non-banking activities that are deemed to be financial in nature or incidental to financial activity. These “financial in nature” activities include securities underwriting, dealing and market making; organizing, sponsoring and managing mutual funds; insurance underwriting and agency activities; merchant banking activities; and other activities that the Federal Reserve has determined to be closely related to banking. No regulatory approval is required for a financial holding company to acquire a company, other than a bank or savings association, engaged in activities that are financial in nature or incidental to activities that are financial in nature, as determined by the Federal Reserve. We have not elected to become an FHC.
A dominant theme of the GLB Act is functional regulation of financial services, with the primary regulator of the Company or its subsidiaries being the agency that traditionally regulates the activity in which the Company or its subsidiaries wish to engage. For example, the Securities and Exchange Commission (“SEC”)SEC regulates bank holding company securities transactions, and the various banking regulators oversee our banking activities.

Capital Adequacy Guidelines. The Federal Reserve has adopted risk-based capital guidelines for bank holding companies. 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. Under these guidelines, assets and off-balance sheet items are assigned to broad risk categories, each with appropriate weights. The resulting capital ratios represent capital as a percentage of total risk-weighted assets and off-balance sheet items. These requirements apply on a consolidated basis to bank holding companies with consolidated assets of $500 million, such as the Company. In addition to the risk-based capital guidelines, the Federal Reserve has adopted a minimum Tier 1 capital (leverage) ratio, under which a bank holding company must maintain a minimum level of Tier 1 capital to average total consolidated assets of at least 4%.
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. Under Federal Reserve policy, in general a bank holding company should pay dividends only when (1) its net income available to shareholders over the last four quarters (net of dividends paid) has been sufficient to fully fund the dividends, (2) the prospective rate of earnings retention appears to be consistent with the capital needs and overall current and prospective financial condition of the bank holding company and its subsidiaries and (3) the bank holding company will continue to meet minimum regulatory capital adequacy ratios after giving effect to the dividend.
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.For purposes of this analysis, “dividend” includes not only dividends on preferred and common equity but also dividends on debt underlying trust preferred securities and other Tier 1 capital instruments. The criteria evaluates whether the holding company (1) has net income over the past four quarters sufficient to fully fund the proposed dividend (taking into account prior dividends paid during this period), (2) is considering stock repurchases or redemptions in the quarter, (3) does not have a concentration in commercial real estate and (4) is in good supervisory condition, based on its overall condition and its asset quality risk.A holding company not meeting these criteria will require more in-depth consultations with the Federal Reserve.
In addition, a bank holding company is required to serve as a source of financial strength to its subsidiary banks.bank(s). This means that we are expected to use available resources to provide adequate financial resources to the Bank, including during periods of financial stress or adversity, and to maintain the financial flexibility and capital-raising capacity to obtain additional resources for assisting the Bank where necessary. In addition, any capital loans that we make to the Bank are subordinate in right of payment to deposits and to certain other indebtedness of the Bank. 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. The BHC Act requires every bank holding company to obtain the prior approval of the Federal Reserve before it acquires all or substantially all of the assets of any bank, merges or consolidates with another bank holding company or acquires ownership or control of any voting shares of any bank if after such acquisition it would own or control, directly or indirectly, more than 5% of the voting shares of such bank. The Federal Reserve will not approve any
8


acquisition, merger or consolidation that would have a substantially anti-competitive effect, unless the anti-competitive impact of the proposed transaction is clearly outweighed by a greater public interest in meeting the convenience and needs of the community to be served. The Federal Reserve also considers capital adequacy and other financial and managerial resources and future prospects of the companies and the banks concerned, together with the convenience and needs of the community to be served and the record of the bank holding company and its subsidiary bank(s) in combating money laundering activities. Finally, in order to acquire banksa bank located outside of theirits home state, a bank holding company and its subsidiary institutions must be “well capitalized” and “well managed.” In addition, as detailed inunder the heading “Scope of Permissible Activities” above, we cannot acquire direct or indirect control of more than 5% of the voting shares of a company engaged in non-banking activities.
Control Acquisitions. Federal and state laws, including the BHC Act and the Change in Bank Control Act, also impose prior notice or approval requirements and ongoing regulatory requirements on any investor that seeks to acquire direct or indirect “control” of an FDIC-insured depository institution or bank holding company. “Control” of a depository institution is a facts and circumstances analysis, but generally an investor is deemed to control a depository institution or other company if the investor owns or controls 25% or more of any class of voting securities. OwnershipFor ownership or control at less than the 25% level, there are multiple factors that contribute to whether “control” will be presumed to exist, which depend on the ownership level of 10% or more of any class of voting securities, where either the depository institution or company is a public company or no other person will own or control a greater percentage of that class ofbank holding company’s voting securities after the acquisition, is also presumed to result in the investor controlling the depository institution or other company, although this is subject to rebuttal.securities. These presumptions are rebuttable.
Anti-Tying Restrictions. Bank holding companies and their affiliates are prohibited from tying the provision of certain services, such as extensions of credit, to other nonbanking services offered by a bank holding company or its affiliates.
Status as a Public Company. As a publicly-traded company, we are 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 Sarbanes-Oxley Act of 2002 generally established a comprehensive framework to modernize and reform the oversight of public company auditing, improve the quality and transparency of financial reporting by those companies and strengthen the independence of auditors. Among other things, the legislation:

-Created the Public Company Accounting Oversight Board, which is empowered to set auditing, quality control and ethics standards, to inspect registered public accounting firms, to conduct investigations and to take disciplinary actions, subject to SEC oversight and review;
-Strengthened auditor independence from corporate management by, among other things, limiting the scope of consulting services that auditors can offer their public company audit clients;
-Heightened the responsibility of public company directors and senior managers for the quality of the financial reporting and disclosure made by their companies. A number of provisions to deter wrongdoing by corporate management were also adopted;
-Imposed a number of new corporate disclosure requirements; and
-Imposed a range of new criminal penalties for fraud and other wrongful acts, as well as extended the period during which certain types of lawsuits can be brought against a company or its insiders.
Heightened Requirements for Bank Holding Companies with $10 Billion or More in Assets. Various federal banking laws and regulations, including rules adopted by the Federal Reserve pursuant to the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), impose heightened requirements on certain large banksSEC rules and bank holding companies, including thoseregulations and Nasdaq listing rules. We incur significant expense in, and devote substantial management time and attention to, complying with at least $10 billionthese laws, regulations and standards, which are subject to varying interpretations, amendment or outright repeal. We are committed to maintaining high standards of corporate governance, financial reporting and public disclosure, and management continually monitors changes in total consolidated assets. Although the Economic Growth, Regulatory Relief,laws, rules and Consumer Protection Act enactedregulations, as well as best practices, in May 2018 resulted in a number of the Dodd-Frank Act requirements no longer being applicablethis area to banks of our size, such as the requirement to conduct stress testing and to establish a risk committee,ensure that we had already begun developing policies and procedures to comply with the Dodd-Frank Act rules well before the Company approached $10 billion in assets. For example, we established an Enterprise Risk Management Committee tasked with monitoring the risks identified by other Company and Bank committees in the context of the impact of each identified risk on other identified risks and ultimately on the Company as a whole. We also implemented new controls and procedures related to stress testing. These actions enhanced the Company’s risk oversight practices. The recent legislation did not eliminate the Dodd-Frank Act provision requiring that the Company be examined for compliance with federal consumer protection laws primarily by the CFPB now that it has over $10 billion in assets.fulfill this commitment.
Supervision and Regulation of theRenasant Bank
General. As a Mississippi-chartered bank, the Bank is subject to the regulation and supervision of the Mississippi Department of Banking and Consumer Finance.DBCF. As an FDIC-insured institution that is not a member of the Federal Reserve, the Bank is subject to the regulation and supervision of the FDIC. 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. Finally, having more than $10 billion in assets, our compliance with federal consumer protection laws is subject to examination by the CFPB.
Insurance of Deposits. The deposits of the Bank are insured through the Deposit Insurance Fund (the “DIF”) up to $250,000 for most accounts. The FDIC administers the DIF, and the FDIC must by law maintain the DIF at an amount equal to a specified percentage of the estimated annual insured deposits or assessment base. The minimum designated reserve ratio of the DIF is currently 1.15%1.35% of total insured deposits, but thisthe FDIC is authorized to designate a reserve ratio will increase to 1.35% by September 30, 2020.above the statutory minimum. The FDIC must offset the effect of this increase for banks with assets less than $10 billion, meaning that banks above such asset threshold, such as the Bank, will bear the cost of the increase.
To fund the DIF, FDIC-insured banks are required to pay deposit insurance assessments to the FDIC on a quarterly basis. The amount of an institution’s assessment is based on its average consolidated total assets less its average tangible equity during the assessment period. As to the rate, it is based on our risk classification. An institution’s risk classification is assigned based on its capital levels and the level of supervisory concern that the institution poses to the regulators. The higher an institution’s risk classification, the higher its assessment rate (on the assumption that such institutions pose a greater risk of loss to the DIF). In addition, the FDIC can impose special assessments in certain instances. Now thatAs we have reported assets in excess of $10 billion, for four consecutive quarters, our assessment rate is based not only on our risk classification but also incorporates forward-looking measures. Also, we are subject to a surcharge designed to increase the DIF to specified levels.
In addition to assessments to fundlevels, although this surcharge is not currently applicable because the DIF all institutions with deposits insured by the FDIC must pay assessments to fund interest payments on bonds issued by the Financing Corporation, a mixed-ownership government corporation established as a financing vehicle for the Federal Savings & Loan Insurance Corporation. The assessment rate for the first quarter of fiscal 2019 is .0014% of insured deposits and is adjusted quarterly. These assessments will continue until the bonds mature in 2019 (the corporation’s ability to issue new debt has been terminated).sufficiently funded.
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. For an institution with no tangible capital, deposit insurance may be temporarily suspended during the hearing process for the

permanent termination of insurance. If the FDIC terminates an institution’s deposit insurance, accounts insured at the
9


time of the termination, less withdrawals, will continue to be insured for a period of six months to two years, as determined by the FDIC. We are not aware of any existing circumstances whichthat would result in termination of the Bank’s deposit insurance.
Interstate Banking and Branching. Under federal and Mississippi law, the Bank may establish additional branch offices within Mississippi, subject to the approval of the DBCF. AfterDBCF, and the Dodd-Frank Act, which repealed the “opt-in” provisions of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1997, weBank can also establish additional branch offices outside Mississippi, subject to prior regulatory approval, so long as the laws of the state where the branch is to be located would permit a state bank chartered in that state to establish a branch. Finally, wethe Bank may also establish offices in other states by merging with banks or by purchasing branches and related assets of other banks in other states, subject to certain restrictions.
Dividends. The restrictions and guidelines with respect to the Company’s payment of dividends are described above. As a practical matter, for so long as our operations chiefly consist of ownership of the Bank, the Bank will remain our source of dividend payments, andpayments. Accordingly, our ability to pay dividends depends upon the Bank's earnings and financial condition, as well as upon general economic conditions and other factors, and will be subject to any restrictions applicable to the Bank.
The ability of the Bank to pay dividends is restricted by federal and state laws, regulations and policies. Under Mississippi law, a Mississippi bank may not pay dividends unless its earned surplus is in excess of three times capital stock. A Mississippi bank with earned surplus in excess of three times capital stock may pay a dividend, subject to the approval of the DBCF. In addition, the FDIC also has the authority to prohibit the Bank from engaging in business practices that the FDIC considers to be unsafe or unsound, which, depending on the financial condition of the Bank, could include the payment of dividends. 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. 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 resulting capital ratios represent capital as a percentage of total risk-weighted assets and off-balance sheet items.
The capital guidelines have been subject to a number of revisions in recent years. Pursuant to the Dodd-Frank Act, capitalCapital requirements for insured depository institutions are countercyclical, such that capital requirements increase in times of economic expansion and decrease in times of economic contraction. More recently, the Federal Reserve, the FDIC and the Office of the Comptroller of the Currency adopted rules implementing the “Basel III” regulatory capital reforms, promulgated by the Basel Committee on Banking Supervision, a committee of central banks and bank supervisors, including the standardized approach of Basel II for non-core banks and bank holding companies such as the Bank and the Company. The Basel III rules substantially revised the risk-based capital requirements.
- Current Guidelines. Under the current risk-based capital adequacy guidelines, we are required to maintain (1) a ratio of common equity Tier 1 capital (“CET1”) to total risk-weighted assets of not less than 4.5%; (2) a minimum leverage capital ratio of 4%; (3) a minimum Tier 1 risk-based capital ratio of 6%; and (4) a minimum total risk-based capital ratio of 8%. CET1 generally consists of common stock, retained earnings, accumulated other comprehensive income and certain minority interests, less certain adjustments and deductions. In addition, we must maintain a “capital conservation buffer,” which is a specified amount of CET1 capital in addition to the amount necessary to meet minimum risk-based capital requirements. The capital conservation buffer is designed to absorb losses during periods of economic stress. If our ratio of CET1 to risk-weighted capital is below the capital conservation buffer, we will face restrictions on our ability to pay dividends, repurchase our outstanding stock and make certain discretionary bonus payments. As of January 1, 2019, theThe required capital conservation buffer is 2.5% of CET1 to risk-weighted assets in addition to the amount necessary to meet minimum risk-based capital requirements.
In addition, the Basel III Rules have revisedFederal Reserve, the agencies’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. 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. As applicable
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 (in both cases, as opposed to the Bank:
-For residential mortgages, the former 50% risk weight for performing residential first-lien mortgages and 100% risk-weight for all other mortgages has been replaced with a risk weight of between 35% and 200% determined by 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.
-For commercial mortgages, a 150% risk weight for certain high volatility commercial real estate acquisition, development and construction loans has been substituted for the former 100% risk weight.
-The former 100% risk weight is now a 150% risk weight for loans, other than residential mortgages, that are 90 days past due or on nonaccrual status.

Finally, Tier 1 capital treatment forformer 100% risk weight). Also, “hybrid” capital items like trust preferred securities has been eliminated,no longer enjoy Tier 1 capital treatment, subject to various grandfathering and transition rules. We and the Bank meet all minimum capital requirements as currently in effect. effect, and our grandfathered trust preferred securities qualify for Tier 1 capital treatment.
For a detailed discussion of the Company’s capital ratios, see Note 24,21, “Regulatory Matters,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data.Data, in this report.
-    Prompt Corrective Action. Under Section 38 of the Federal Deposit Insurance Act (the “FDIA”), each federal banking agency is required to implement a system of prompt corrective action for institutions that it regulates. The federal banking
10


agencies (including the FDIC) have adopted substantially similar regulations to implement this mandate. Under current regulations, a bank is (i)(1) “well capitalized” if it has total risk-based capital of 10% or more, has a Tier 1 risk-based ratio of 8% or more, has a common equity Tier 1 capital ratio of 6.5%, has a Tier 1 leverage capital ratio of 5% or more and is not subject to any order or final capital directive to meet and maintain a specific capital level for any capital measure, (ii)(2) “adequately capitalized” if it has a total risk-based capital ratio of 8% or more, a Tier 1 risk-based capital ratio of 6% or more, a common equity Tier 1 capital ratio of 4.5% and a Tier 1 leverage capital ratio of 4% or more (3% under certain circumstances) and does not meet the definition of “well capitalized,” (iii)(3) “undercapitalized” if it has a total risk-based capital ratio that is less than 8%, a Tier 1 risk-based capital ratio that is less than 6%, a common equity Tier 1 capital ratio that is less than 4.5% or a Tier 1 leverage capital ratio that is less than 4%, (iv)(4) “significantly undercapitalized” if it has a total risk-based ratio that is less than 6%, a Tier 1 risk-based capital ratio that is less than 4%, a common equity Tier 1 capital ratio of less than 3% or a Tier 1 leverage capital ratio that is less than 3%, and (v)(5) “critically undercapitalized” if it has a ratio of tangible equity to total assets that is equal to or less than 2%.
The capital classification of a bank affects the frequency of regulatory examinations, the bank’s ability to engage in certain activities and the deposit insurance premiums paid by the bank. In addition, federal banking regulators must take various mandatory supervisory actions, and may take other discretionary actions, with respect to institutions in the three undercapitalized categories. The severity of the action depends upon the capital category in which the institution is placed. An institution that is categorized as undercapitalized, significantly undercapitalized or critically undercapitalized is required to submit an acceptable capital restoration plan to its appropriate federal banking agency. An undercapitalized institution also is generally prohibited from increasing its average total assets, making acquisitions, establishing any branches or engaging in any new line of business, except under an accepted capital restoration plan or with FDIC approval. Generally, banking regulators must appoint a receiver or conservator for an institution that is critically undercapitalized.
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).
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. These changes also may require us to invest significant management attention and resources to make any necessary changes to operations in order to comply, and could therefore also materially and adversely affect our business, financial condition and results of operations.
Interchange Fees. Under Section 1075 of the Dodd-Frank Act (often referred to as the “Durbin Amendment”), the Federal Reserve established standards for assessing whether the interchange fees, or “swipe” fees, that banks charge for processing electronic payment transactions are “reasonable and proportional” to the costs incurred by issuers for processing such transactions. Under the Federal Reserve’s rules, the maximum permissible interchange fee is no more than 21 cents plus 5 basis points of the transaction value for many types of debit interchange transactions. A debit card issuer may also recover one cent per transaction for fraud prevention purposes if the issuer develops and implements policies and procedures reasonably designed to achieve certain fraud-prevention standards. The Federal Reserve also has rules governing routing and exclusivity that require issuers to offer two unaffiliated networks for routing transactions on each debit or prepaid product. Due to being over $10 billion in total assets as of December 31, 2018, Renasant Bank will be subject to the interchange fee cap beginning July 1, 2019.
Activities and Investments of Insured State-Chartered Banks. Section 24 of the FDIA generally limits the activities and equity investments of FDIC-insured, state-chartered banks to those that are permissible for national banks. Under regulations dealing with equity investments, an insured state bank generally may not directly or indirectly acquire or retain any equity investment of a type, or in an amount, that is not permissible for a national bank. 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.
11


Under FDIC regulations, insured banks engaging in impermissible activities, or banks that wish to engage in otherwise impermissible activities, may seek approval from the FDIC to continue or commence such activities, as the case may be. 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. 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”). 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. 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. The foregoing criteria are commonly referred to as the 100/300 Test. As of December 31, 2018,2021, our ADC loans represented 76.65%82% of our total bank level capital, and our total CRE loans represented 240.58%251% of our bank level capital.
Safety and Soundness. The federal banking agencies, including the FDIC, have implemented rules and guidelines concerning standards for safety and soundness required pursuant to Section 39 of the FDIA. In general, the standards relate to operational and managerial matters, asset quality and earnings and compensation. The operational and managerial standards cover (1) internal controls and information systems, (2) internal audit systems, (3) loan documentation, (4) credit underwriting, (5) interest rate exposure, (6) asset growth and (7) compensation, fees and benefits. Under the asset quality and earnings standards, the Bank must establish and maintain systems to identify problem assets and prevent deterioration in those assets and to evaluate and monitor earnings and ensure that earnings are sufficient to maintain adequate capital reserves. The compensation standard states that compensation will be considered excessive if it is unreasonable or disproportionate to the services actually performed by the individual being compensated.
If an insured state-chartered bank fails to meet any of the standards promulgated by regulation, then such institution will be required to submit a plan to the FDIC specifying the steps it will take 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. 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. We believe that the Bank has been and will continue to be in compliance with each of these standards.
Federal Reserve System. The Federal Reserve requires all depository institutions to maintain reserves against their transaction accounts (primarily NOW and Super NOW checking accounts) and non-personal time deposits. The required reserves must be maintained in the form of vault cash or an account at a Federal Reserve bank. At December 31, 2018, the Bank was in compliance with its reserve requirements.
Consumer Financial Products and Services. We are subject to a broad array of federal and state laws designed to protect consumers in connection with our lending activities, including the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Truth in Savings Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, the Electronic Funds Transfer Act, and, in some cases, their respective state law counterparts. The CFPB, which is an independent bureau within the Federal Reserve, has broad regulatory, supervisory and enforcement authority over our offering and provision of consumer financial products and services under these laws.
Relating to mortgage lending in particular, the CFPB issued regulations governing the ability to repay, qualified mortgages, mortgage servicing, appraisals and compensation of mortgage lenders. These regulations limit the type of mortgage products that

the Bank can offer; they also affect our ability to enforce delinquent mortgage loans. The CFPB has also issued complex rules integrating the required disclosures under the Truth in Lending Act, the Truth in Savings Act and the Real Estate Settlement Procedures Act (the “TRID rules”). The TRID rules combine the prior good faith estimate and truth in lending disclosure form into a new “loan estimate” form and combine the HUD-1 and final truth in lending disclosure forms into a new “closing disclosure” form.
We have established numerous controls and procedures designed to ensure that we fully comply with the TRID rules and all other consumer protection laws, both federal and state, as they are currently interpreted (which interpretations are subject to change by the CFPB). In addition, our employees undergo at least annual training to ensure that they remain aware of consumer protection laws and the activities mandated, or prohibited, thereunder.
Community Reinvestment Act. Under the Community Reinvestment Act (the “CRA”), the FDIC assesses the Bank’s record in meeting the credit needs of its entire community, including low- and moderate-income neighborhoods. The FDIC’s assessment is taken into account when evaluating any application we submit for, among other things, approval of the acquisition or
12


establishment of a branch or other deposit facility, an office relocation, a merger or the acquisition of shares of capital stock of another financial institution. Under the CRA, institutions are assigned a rating of “outstanding,” “satisfactory,” “needs to improve,” or “unsatisfactory.” The Bank has undertaken significant actions to comply with the CRA, and it received a “satisfactory” rating by the FDIC with respect to its CRA compliance in its most recent assessment. Both the U.S. Congress
Financial and banking regulatory agencies have proposed substantial changes to the CRA and fair lending laws, rules and regulations, and there can be no certainty as to the effect, if any, that any such changes would have on us or the Bank.
FinancialState Privacy Requirements. Federal law and regulations limit a financial institution’s ability to share a customer’s financial information with unaffiliated third parties and otherwise contain extensive protections for a customer’s private information. Specifically, these provisions require all financial institutions offering financial products or services to retail customers to provide such customers with the financial institution’s privacy policy at the beginning of the relationship and annually thereafter. Further, such customers must be given the opportunity to “opt out” of the sharing of personal financial information with unaffiliated third parties. The sharing of information for marketing purposes is also subject to limitations. In addition to law and regulation at the federal level, a number of states - some of which we have loan or deposit customers in - have enacted broad statutes governing the use of an individual’s personal information. These statutes typically encompass a broader scope of personal information than the financial information covered by federal privacy laws and regulations, and the statutes generally place more stringent restrictions on the ability of a third party to disclose, share or otherwise use an individual’s personal information than exist under federal law and regulations. Many of these states’ privacy laws and regulations impose severe penalties for violations.

The Bank currently has adopted a privacy protectionpolicy and implemented procedures governing the use and disclosure of personal financial information for both customers and non-customers. We believe our policy and procedures in place, which we believecurrently comply with all applicable regulations.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. Federal anti-money laundering rules impose various requirements on financial institutions intended to prevent the use of the U.S. financial system to fund terrorist activities. These provisions include a requirement that financial institutions operating in the United States have anti-money laundering compliance programs, due diligence policies and controls to ensure the detection and reporting of money laundering. 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-launderinganti-money laundering laws and regulations.
The Volcker Rule. On December 10, 2013, theThe Federal Reserve and the other federal banking regulators as well as the SEC each adopted a final rule, commonly referred to as the “Volcker Rule,” implementing Section 619 of the Dodd-Frank Act, commonly referred to as the “Volcker Rule.” Act.Generally speaking, the finalVolcker rule prohibits a bank and its affiliates from engaging in proprietary trading and from sponsoring certain “covered funds” or from acquiring or retaining any ownership interestinterests in, such covered funds. Mostsponsoring, or having relationships with certain “covered funds,” including certain hedge funds and private equity venture capital and hedge funds are considered “covered funds” as are bank trust preferred collateralized debt obligations. The final rule required banking entities to divest disallowed securities by July 21, 2015, subject to extension upon application. funds.The Volcker Rule diddoes not impact any of our current activities, nor do we hold any securities that we were required to sell under the rule, but it does limit the scope of permissible activities in which we might engage in the future.

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 State of Mississippi.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. 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. 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. An important function of the Federal Reserve is to regulate the national supply of bank credit in order to stabilize prices. Among the instruments of monetary policy used by the Federal Reserve to implement these objectives are open market operations in U.S. Government securities

and changes in the discount rate on bank borrowings and changes in reserve requirements against bank deposits.borrowings. These instruments are used in varying degrees to influence overall growth of bank loans, investments and deposits and may also affect interest rates charged on loans or paid for deposits.
The monetary policies of the Federal Reserve have had a significant effect on the operating results of commercial banks in the past and are expected to do so in the future. In view of changing conditions in the national economy and in the various money markets, as well as the effect of actions by monetary and fiscal authorities including the Federal Reserve, the effect on our, and the Bank’s, future business and earnings cannot be predicted with accuracy.
13


Sources and Availability of Funds
The funds essential to our, and the Bank’s, business consist primarily of funds derived from customer deposits, loan repayments, cash flows from our investment securities, securities sold under repurchase agreements, Federal Home Loan Bank advances and subordinated notes. The availability of such funds is primarily dependent upon the economic policies of the federal government, the economy in general and the general credit market for loans. Additional information about our funding sources can be found under the heading "Liquidity and Capital Resources" in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, in this report.
PersonnelHuman Capital Resources
AtThe Company’s employees are the key to its success and represent our greatest asset. The Company’s strategic approach to human capital includes (1) attracting, developing and retaining a diverse and talented workforce, (2) providing opportunities for learning and advancement within the Company, (3) offering a competitive suite of compensation and benefits, (4) investing in the financial health of our employees, and (5) obtaining employee feedback. As of December 31, 2018,2021, we employed 2,3592,409 people throughout all of our segments on a full-time equivalent basis. Of this total, the Bank accounted for 2,2942,342 employees (inclusive of employees in our Community Banks and Wealth Management segments), and Renasant Insurance employed 6567 individuals. The Company has no additional employees; however, atemployees. At December 31, 2018,2021, 14 employees of the Bank served as officers of the Company in addition to their positions with the Bank.
Dependence Upon
Throughout 2021, the Company continued personnel policies and procedures implemented in 2020 to minimize our employees’ exposure to COVID-19 without impairing our team’s ability to deliver our products to our customers. We remain committed to responding as circumstances change. The Company surveyed its employees at the end of 2021 to gauge how employees adjusted to changes during the pandemic, as well as learning about employees’ overall satisfaction with their job and their experience working for the Company. The participation rate was over 65% and generally affirmed that our employees were satisfied with overall working conditions at the Company.

The Company’s Social Responsibility Diversity and Inclusion Committee (referred to as the “SRDI Committee”), consisting of four permanent members and four rotating members, and one ex-officio member, continued its momentum during 2021. During 2021, the SRDI Committee implemented and communicated key initiatives of the Company’s long-range equality, diversity and inclusion (“EDI”) strategic plan, which plan has five key areas of focus: (1) education and communication, (2) diversity in the workforce, (3) inclusion in the workplace, (4) vendor/supplier diversity and (5) a Single Customercommitment to ongoing evaluation of each of the previous components. In 2021, the Company launched an EDI education series and developed an internal resource page to reinforce education and to provide a platform for employees to learn about one another. The Company is committed to advancing its EDI strategic plan through ongoing internal and external initiatives.
No material portion
The Company, through its Organizational Development department, provides a wide array of our loans have been madetraining and employee engagement, including but not limited to nor have our deposits been obtained from, a single or small groupnew employee orientation and recognition programs, mentoring, and classroom and online education. The Company also supports its employees through external continuing education relevant to the operations of customers; the lossCompany. In addition to professional development, the Company provides bank-paid and voluntary benefits to eligible employees. Several of any single customer or small group of customers with respectthe benefits include wellness benefits to any of our reportable segments would not have a material adverse effect on our business as a whole or with respect to that segment in particular. A discussion of concentrations of credit in our loan portfolio is set forth under the heading “Financial Condition - Loans” in Item 7, Management’s Discussionencourage healthier lifestyles and Analysis of Financial Condition and Results of Operations.promote self-care.

Available Information
We file annual, quarterly and current reports, proxy statements and other information with the SEC under the Securities Exchange Act of 1934, as amended. Our SEC filings are available to the public at the SEC’s website at www.sec.gov. Our Internet address is www.renasant.com, and the Bank’s Internet address is www.renasantbank.com. We make available aton the Company’s website, at the “SEC Filings” link, under the “Investor Relations” tab, 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.

Table 1 – Distribution of Assets, Liabilities and Shareholders’ Equity; Interest Rates and Interest Differential
(In Thousands)
The following table sets forth average balance sheet data, including all major categories of interest-earning assets and interest-bearing liabilities, together with the interest earned or interest paid and the average yield or average rate on each such category for the years ended December 31, 2018, 2017 and 2016:
 2018 2017 2016
 
Average
Balance
 
Interest
Income/
Expense
 
Yield/  
 Rate
 
Average
Balance
 
Interest
Income/
Expense
 
Yield/  
 Rate
 
Average
Balance
 
Interest
Income/
Expense
 
Yield/  
 Rate
Assets                 
Interest-earning assets:                 
Loans:                 
     Not purchased(1)
$6,019,177
 $286,643
 4.76% $5,060,496
 $226,524
 4.48% $4,294,032
 $187,055
 4.36%
     Purchased2,162,410
 132,199
 6.11% 1,795,306
 114,043
 6.35% 1,555,502
 104,983
 6.75%
     Purchased and covered(2)

 
 % 
 
 % 46,438
 3,295
 7.10%
Total Loans8,181,587
 418,842
 5.12% 6,855,802
 340,567
 4.97% 5,895,972
 295,333
 5.01%
Loans held for sale270,270
 12,892
 4.77% 174,369
 7,469
 4.28% 237,199
 8,497
 3.58%
Securities:                 
Taxable(3)
844,692
 23,713
 2.81% 746,557
 17,408
 2.33% 721,661
 15,305
 2.12%
Tax-exempt217,190
 9,232
 4.25% 329,430
 15,838
 4.81% 351,950
 16,555
 4.70%
Total securities1,061,882
 32,945
 3.10% 1,075,987
 33,246
 3.09% 1,073,611
 31,860
 2.97%
Interest-bearing balances with banks148,677
 3,076
 2.07% 195,072
 2,314
 1.19% 89,514
 459
 0.51%
Total interest-earning assets9,662,416
 467,755
 4.84% 8,301,230
 383,596
 4.62% 7,296,296
 336,149
 4.61%
Cash and due from banks163,286
     140,742
     130,360
    
Intangible assets747,008
     565,507
     491,530
    
FDIC loss share indemnification asset (2)

     
     4,961
    
Other assets531,857
     501,829
     493,363
    
Total assets$11,104,567
     $9,509,308
     $8,416,510
    
Liabilities and shareholders’ equity                 
Interest-bearing liabilities:                 
Deposits:                 
Interest-bearing demand(4)
$4,246,585
 $23,678
 0.56% $3,609,567
 $9,559
 0.26% $3,090,495
 $5,874
 0.19%
Savings deposits596,990
 868
 0.15% 567,723
 394
 0.07% 525,498
 372
 0.07%
Time deposits2,040,675
 25,214
 1.24% 1,715,828
 14,667
 0.85% 1,587,444
 11,610
 0.73%
Total interest-bearing deposits6,884,250
 49,760
 0.72% 5,893,118
 24,620
 0.42% 5,203,437
 17,856
 0.34%
Borrowed funds388,077
 15,569
 4.01% 419,070
 13,233
 3.16% 523,812
 10,291
 1.96%
Total interest-bearing liabilities7,272,327
 65,329
 0.90% 6,312,188
 37,853
 0.60% 5,727,249
 28,147
 0.49%
Noninterest-bearing deposits2,036,754
     1,724,834
     1,467,881
    
Other liabilities94,152
     91,336
     105,342
    
Shareholders’ equity1,701,334
     1,380,950
     1,116,038
    
Total liabilities and shareholders’ equity$11,104,567
     $9,509,308
     $8,416,510
    
Net interest income/ net interest margin  $402,426
 4.16%   $345,743
 4.16%   $308,002
 4.22%
14
(1)Shown net of unearned income.
(2)Represents information associated with purchased loans covered under FDIC loss sharing agreements prior to the termination of such agreements on December 8, 2016.
(3)U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which we operate.
(4)Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.
The average balances of nonaccruing assets are included in this table. Interest income and weighted average yields on tax-exempt loans and securities have been computed on a fully tax equivalent basis assuming a federal tax rate of 21% and a state tax rate of 4.45%, which is net of federal tax benefit.

Table 2 – Volume/Rate Analysis
(In Thousands)
The following table sets forth a summary of the changes in interest earned, on a tax equivalent basis, and interest paid resulting from changes in volume and rates for the Company for the years 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). The changes attributable to the combined impact of yield/rate and volume have been allocated on a pro-rata basis using the absolute ratio value of amounts calculated.
 2018 Compared to 2017 2017 Compared to 2016
 Volume    Rate            Net   Volume    Rate           Net 
Interest income:           
Loans:           
     Not purchased$44,963
 $15,156
 $60,119
 $34,309
 $5,160
 $39,469
     Purchased22,200
 (4,044) 18,156
 15,278
 (6,218) 9,060
     Purchased and covered(1)

 
 
 (3,295) 
 (3,295)
Loans held for sale4,916
 507
 5,423
 (2,691) 1,663
 (1,028)
Securities:           
Taxable2,471
 3,834
 6,305
 581
 1,522
 2,103
Tax-exempt(4,929) (1,677) (6,606) (1,082) 365
 (717)
Interest-bearing balances with banks(358) 1,120
 762
 1,252
 603
 1,855
Total interest-earning assets69,263
 14,896
 84,159
 44,352
 3,095
 47,447
Interest expense:           
Interest-bearing demand deposits1,944
 12,175
 14,119
 1,375
 2,310
 3,685
Savings deposits21
 453
 474
 29
 (7) 22
Time deposits3,145
 7,402
 10,547
 1,098
 1,959
 3,057
Borrowed funds(879) 3,215
 2,336
 (3,307) 6,249
 2,942
Total interest-bearing liabilities4,231
 23,245
 27,476
 (805) 10,511
 9,706
Change in net interest income$65,032
 $(8,349) $56,683
 $45,157
 $(7,416) $37,741
(1)Represents information associated with purchased loans covered under FDIC loss sharing agreements prior to the termination of such agreements on December 8, 2016.


Table 3 – Investment Portfolio
(In Thousands)
The following table sets forth the scheduled maturity distribution and weighted average yield based on the amortized cost of our investment portfolio as of December 31, 2018. Information regarding the carrying value of the investment securities listed below as of December 31, 2018, 2017 and 2016 is contained under the heading “Financial Condition – Investments” and “Results of Operations – Net Interest Income” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.


 Amount Yield  
Available for Sale:   
Obligations of other U.S. Government agencies and corporations   
 Maturing after one year through five years$2,536
 2.40%
Obligations of states and political subdivisions   
 Maturing within one year39,310
 4.65%
 Maturing after one year through five years41,768
 3.73%
 Maturing after five years through ten years73,028
 3.54%
 Maturing after ten years46,692
 4.24%
Trust preferred securities   
 Maturing after ten years12,359
 2.93%
Other debt securities - corporate debt   
 Maturing after five years through ten years8,797
 4.93%
Residential mortgage backed securities not due at a single maturity date:   
Government agency MBS621,690
 2.67%
Government agency CMO332,697
 2.75%
Commercial mortgage backed securities not due at a single maturity date:   
Government agency MBS21,957
 3.05%
Government agency CMO28,446
 2.86%
Other debt securities not due at a single maturity date35,249
 3.97%
 $1,264,529
 3.10%
Weighted average yields on tax-exempt obligations have been computed on a fully tax equivalent basis assuming a federal tax rate of 21% and a state tax rate of 4.45%, which is net of federal tax benefit.


Table 4 – Loan Portfolio
(In Thousands)
The following table sets forth loans held for investment, net of unearned income, outstanding at December 31, 2018, which, based on remaining scheduled repayments of principal, are due in the periods indicated. Loans with balloon payments and longer amortizations are often repriced and extended beyond the initial maturity when credit conditions remain satisfactory. Demand loans, loans having no stated schedule of repayments and no stated maturity, and overdrafts are reported below as due in one year or less. For information regarding the loan balances in each of the categories listed below as of the end of each of the last five years, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, under the heading “Financial Condition – Loans.” See “Risk Management – Credit Risk and Allowance for Loan Losses” in Item 7 for information regarding the risk elements applicable to, and a summary of our loan loss experience with respect to, the loans in each of the categories listed below.
 One Year or Less 
 After One Year
Through Five Years
 After Five Years Total           
Commercial, financial, agricultural$704,179
 $529,914
 $61,819
 $1,295,912
Lease financing2,178
 58,126
 1,561
 61,865
Real estate – construction578,832
 85,702
 76,134
 740,668
Real estate – 1-4 family mortgage974,789
 686,866
 1,133,688
 2,795,343
Real estate – commercial mortgage1,215,660
 2,124,930
 710,919
 4,051,509
Installment loans to individuals49,628
 73,643
 14,561
 137,832
 $3,525,266
 $3,559,181
 $1,998,682
 $9,083,129
The following table sets forth the fixed and variable rate loans maturing or scheduled to reprice after one year as of December 31, 2018:
 Interest Sensitivity
 
Fixed           
Rate
 
Variable        
Rate
Due after one year through five years$2,877,670
 $681,511
Due after five years966,613
 1,032,069
 $3,844,283
 $1,713,580

Table 5 – Deposits
(In Thousands)
The following table shows the maturity of certificates of deposit and other time deposits of $100 or more at December 31, 2018:
 
Certificates of
Deposit
 Other
Three Months or Less$178,231
 $26,343
Over Three through Six Months139,362
 27,699
Over Six through Twelve Months363,525
 13,060
Over 12 Months566,281
 2,232
 $1,247,399
 $69,334

ITEM 1A. RISK FACTORS
In addition to the other information contained in or incorporated by reference into this Form 10-K and the exhibits hereto, the following risk factors should be considered carefully in evaluating our business. The risks disclosed below, either alone or in combination, could materially adversely affect the business, financial condition or results of operations of the Company.


Risks Related Toto Our Business and Industry
Our business may be adversely affected by current economic conditions in general and specifically in our Mississippi, Tennessee, Alabama, Florida and Georgia markets.
General business and economic conditions in the United States and abroad can materially affect our business and operations. A weak U.S. economy is likely to cause uncertainty about the federal fiscal policymaking process, the medium and long-term fiscal outlook of the federal government and future tax rates. In addition, economic conditions in foreign countries could affect the stability of global financial markets, which could hinder U.S. economic growth.
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 commercial loans, residential and commercial real estate price declines and lower home sales and commercial activity. All of these factors are detrimental to our business, and the interplay between these factors can be complex and unpredictable. Our business is also significantly affected by monetary and related policies of the U.S. federal government and its agencies. Changes in any of these policies are influenced by macroeconomic conditions and other factors that are beyond our control. Adverse economic conditions and government policy responses to such conditions could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
More particularly, much of our business development and marketing strategy is directed toward fulfilling the banking and financial services needs of small to medium size businesses. Such businesses generally have fewer financial resources in terms of capital or borrowing capacity than larger entities. If general economic conditions negatively impact our Mississippi, Tennessee, Alabama, Florida and Georgia markets generally and these businesses are adversely affected, our financial condition and results of operations may be negatively affected.
We are subject to lending risk.
There are inherent risks associated with our lending activities. These risks include, among other things, the impact of changes in interest rates and changes in the economic conditions in the markets where we operate as well as those across the United States. 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, 2018,2021, approximately 67.03%70.62% of our loan portfolio consisted of commercial,C&I, construction and commercial real estate loans. These types of loans are generally viewed as having more risk to our financial condition than other types of loans due primarily to the large amounts loaned to individual borrowers. Because the loan portfolio contains a significant number of commercial,C&I, construction and commercial real estate loans with relatively large balances, the deterioration of one or a few of these loans could cause a significant increase in nonperforming loans. An increase in nonperforming loans could result in a net loss of earnings from these loans, an increase in the provision for possible loancredit losses and an increase in loan charge-offs, all of which could have a material adverse effect on our financial condition and results of operations.
Our commercial,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.
We have a high concentration of loans secured by real estate.
At December 31, 2018, approximately 83.53% 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 repaymentBusiness, in the event of a default by the borrower. Real estate values have generally recovered since the recent recession, but any adverse change in our markets could significantly impair the value of the particular collateral securing our loans and our ability to sell the collateral upon foreclosure for an amount necessary to satisfy the borrower’s obligations to us. Furthermore, in a declining real estate market, we often will need to further increase our allowance for loan 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 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, commercial real estate (“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. 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. At December 31, 2018, we had approximately $4.5 billion in commercial real estate loans, representing approximately 49.79% of our loans outstanding on that date, as follows:
(thousands)December 31, 2018
 Commercial Real Estate
Owner-occupied$1,600,262
Non-owner occupied2,272,859
Construction471,120
Land Development: 
Commercial mortgage178,388
Total Commercial real estate loans$4,522,629
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. 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.
We depend on the accuracy and completeness of information furnished by others about customers and counterparties.
In deciding whether to extend credit or enter into other transactions, we often rely on information furnished by or on behalf of customers and counterparties, including financial statements, credit reports, other financial information and appraisals of the value of collateral. We may also rely on representations of those customers, counterparties or other third parties, such as independent auditors, as to the accuracy and completeness of that information. Reliance on inaccurate or misleading financial statements, credit reports, other financial information or appraisals could have a material adverse effect on our business and, in turn, our financial condition and results of operations.this report.
Our allowance for possible loancredit losses may be insufficient, and we may be required to further increase our provision for loancredit losses.
Although we try to maintain diversification within our loan portfolio in order to minimize the effect of economic conditions within a particular industry, management also maintains an allowance for loancredit losses, which is a reserve established through a provision for loancredit losses on loans charged to expense, to absorb probable credit losses inherent in the entire loan portfolio. The appropriate levelcredit loss estimation process involves procedures to appropriately consider the unique characteristics of the allowance is based on management’s ongoing analysis of theCompany’s loan portfolio segments. Credit quality is assessed and representsmonitored by evaluating various attributes, and the results of those evaluations are utilized in underwriting new loans and in the Company’s process for the estimation of expected credit losses. Credit quality monitoring procedures and indicators can include an amount that management deems adequate to provide for inherent losses,assessment of problem loans, the types of loans, historical loss experience, new lending products, emerging credit trends, changes in the size and character of loan categories and other factors, including collateral impairment. Among other considerations in establishing the allowance for loan losses, management considersCompany’s risk rating system, regulatory guidance and economic conditions, reflected within industry segments,such as the unemployment rate and GDP growth in ourthe markets in which the Company operates, as well as trends in the market values of underlying collateral securing loans, all as determined based on input from management, loan segmentationreview staff and historical lossesother sources. This evaluation is complex and inherently subjective, as it requires estimates by management that are inherent in the loan portfolio. The determinationinherently uncertain and therefore susceptible to significant revision as more information becomes available. In future periods, evaluations of the appropriate leveloverall loan portfolio, in light of the allowance for loan losses inherently involves a high degree of subjectivityfactors and requires management to makeforecasts then prevailing, may result in significant estimates of current credit risks and future trends, all of which may undergo material changes. Changes in economic conditions affecting borrowers, new information regarding existing loans, identification of additional problem loans and other factors, both within and outside our control, may require an increasechanges in the allowance and provision for loan losses.credit losses in those future periods.
The recent recession in the United States highlighted the inherent difficulty in estimating with precision the extent to which credit risks and future trends need to be addressed through a provision to our allowance for loan losses. Any deterioration of current and future economic conditions could cause us to experience higher than normal delinquencies and credit losses. As a result, we may be required to make further increases in our provision for loancredit losses and to charge off additional loans in the future, which could materially adversely affect our financial condition and results of operations.
In addition, bankBank regulatory agencies periodically review the allowance for loancredit losses and may require an increase in the provision for loancredit losses or the recognition of further loan charge-offs, based on judgments different than those of management. In addition,


if charge-offs in future periods exceed the allowance for loancredit losses, we will needincur additional provisionsprovision expense to increase the allowance for loancredit losses. Any increasesincrease in the allowanceour provision for loancredit losses will result in a decrease in net income and, possibly, capital and may have a material adverse effect on our financial condition and results of operations. A discussion of the policies and procedures related to management’s process for determining the appropriate level of the allowance for loancredit losses is set forth under the headingheadings “Critical Accounting Policies” and “Risk Management – Credit Risk and Allowance for Loan Losses”Credit Losses on Loans and Unfunded Commitments” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.Operations, in this report.
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
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funds. 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. In light of improving labor markets and its assessment ofresponse to the rate of inflation,COVID-19 pandemic, the Federal Reserve has increased the federal funds target rate by 25 basis points on eight separate occasions since December 2016 and has indicated that economic conditions may warrant additional increases indecreased the federal funds target rate in March 2020, and it now appears poised to raise the future.target rate to combat inflationary conditions. Changes in monetary policy, including changes in interest rates, could influence not only the interest we receive on loans and securities and the amount of interest we pay on deposits and borrowings, but such changes could also affect (1) our ability to originate loans and obtain deposits, which could reduce the amount of fee income generated, and (2) the fair value of our financial assets and liabilities.
Our financial results are constantly exposed to market risk.
Market risk refers to the probability of variations in net interest income or the fair value of our assets and liabilities due to changes in interest rates, among other things. The primary source of market risk to us is the impact of changes in interest rates on net interest income. 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 initially decline.
Assets and liabilities may reprice at the same time but by different amounts. For example, when interest rates are generally rising, we may increase rates charged on loans by an amount that is less than the general increase in market interest rates because of intense pricing competition, while similarly-intensesimilarly intense pricing competition for deposits dictates that we raise our deposit rates in line with the general increase in market rates. 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. For example, if long-term mortgage interest rates decline sharply, mortgage-backedmortgage backed securities held in our securities portfolio may prepay significantly earlier than anticipated, which could reduce portfolio income. 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.
Although management believes it has implemented effective asset and liability management strategies to reduce market risk on the results of our operations, these strategies are based on assumptions that may be incorrect. Any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial condition and results of operations.
Volatility in interest rates may also result in disintermediation, which is the flow of funds away from financial institutions into direct investments, such as U.S. Government and Agency securities and other investment vehicles, including mutual funds, which generally pay higher rates of return than financial institutions because of the absence of federal insurance premiums and reserve requirements. Disintermediation could also result in material adverse effects on our financial condition and results of operations.
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.


Operations, in this report.
The planned phasing outdiscontinuation of the London Interbank Offered Rate (“LIBOR”) as a financial benchmark may adversely affect our business and financial results.
The discontinuation of LIBOR isas a financial benchmark presents risks to the financial instruments originated or held by the Company. Prior to January 1, 2022, LIBOR was the reference rate used for many of our transactions, including a substantial portion of our lending and borrowing and our purchase and sale of securities,variable rate loans as well as our borrowings and securities; in addition, the derivatives that we useused to manage risk related to such transactions. In July 2017, the United Kingdom Financial Conduct Authority, which regulatesforegoing transactions were tied to LIBOR prior to January 1, 2022. Although some LIBOR tenors were discontinued at the process for establishingend of 2021, the LIBOR announced that it would no longer compel banks to submittenors impacting the rates required to calculate LIBOR after 2021, meaning that the continuation of LIBOR on its current basis cannot be guaranteed after that date. It is impossible to predict at this time whether LIBORCompany's financial instruments will continue to be viewedquoted until June 30, 2023.
When one-month LIBOR, which is the LIBOR tenor that the Company most frequently uses, is fully discontinued after June 30, 2023, there may be uncertainty or differences in the calculation of the applicable interest rate or payment amount depending on the terms of the governing instruments. We have made significant efforts to amend these governing instruments and transition to a new reference rate. Nevertheless, any such uncertainty may increase operational and other risks to the Company and the
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industry.
While there is no consensus yet on what rate or rates may become accepted alternatives to LIBOR, a steering committee comprised of large U.S. financial institutions, the Alternative Reference Rate Committee (“ARRC”) selected the Secured Overnight Finance Rate (“SOFR”) as an acceptablealternative to LIBOR. SOFR has been published by the Federal Reserve Bank of New York (“FRBNY”) since May 2018, and it is intended to be a broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury securities. ARRC has proposed a paced market benchmark, what benchmark rate(s) may replacetransition plan to SOFR from LIBOR or howand organizations are currently considering industry wide and company-specific transition plans as it relates to derivatives and cash markets exposed to LIBOR.
The Company’s 4.50% fixed-to-floating rate subordinated notes due 2035 and its 3.00% fixed-to-floating rate subordinated notes due 2031 are linked to SOFR, and the Company has adopted daily simple SOFR in lieu of LIBOR as the primary reference rate for its lending transactions with other reference rates used on a case-by-case basis. There can be no assurances, however, that, regardless of the Company’s decision, SOFR will be determinedwidely adopted as the replacement reference rate for purposesLIBOR. Accordingly, the Company may need to select a different reference rate, or multiple rates in order to maintain its competitive position. In addition, because SOFR is published by the FRBNY based on data received from other sources, we have no control over its determination, calculation or publication. Finally, there can be no assurance that SOFR will not be discontinued or fundamentally altered in a manner that is materially adverse to the parties that utilize SOFR as the reference rate for transactions.
The market transition away from LIBOR to an alternative reference rate, including SOFR, is complex and could have a range of adverse effects on our business, financial instruments that are currently referencingcondition, and results of operations. In particular, any such transition could:
adversely affect the interest rates paid or received on, and the revenue and expenses associated with, our floating rate obligations, loans, deposits, derivatives and other financial instruments tied to LIBOR rates, or other securities or financial arrangements given LIBOR's role in determining market interest rates globally;
adversely affect the value of our floating rate obligations, loans, deposits, derivatives and other financial instruments tied to LIBOR rates, or other securities or financial arrangements;
result in disputes, litigation or other actions with counterparties regarding the interpretation and enforceability of certain fallback language in LIBOR-based notes, securities and other instruments; and
require the transition to or development of appropriate systems and analytics to effectively transition our risk management processes from LIBOR-based products to those based on the applicable alternative pricing benchmark.
Finally, the implementation of LIBOR ifreform proposals may result in increased compliance costs and when it ceasesoperational costs including costs related to exist.
We have loans, borrowings and other financial instruments with attributes that are either directly or indirectly dependent oncontinued participation in LIBOR and the uncertainty surrounding potential reforms, including the use of alternativetransition to a replacement reference rate or rates, and changes to the methods and processes used to calculate rates, may have an adverse effect on these financial instruments. In addition, since proposed alternative rates are calculated differently, payments under contracts referencing new rates will differ from those referencing LIBOR, creating additional costs and risks. Our failure to adequately manage the transition process, which include changes to risk and pricing models, valuation tools and product design could adversely impactaffect our reputation with our customers. Although we are currently unable to assess what the ultimate impact of the transition from LIBOR will be, failure to adequately manage the transition could have a material adverse effect on our business, financial condition and results of operations.
Liquidity needs could adversely affect our results of operations and financial condition.
Maintaining adequate liquidity is crucial to the operation of our business. We need sufficient liquidity to meet customer loan requests, deposit maturities and withdrawals and other cash commitments arising in both the ordinary course of business and in other unpredictable circumstances. We rely on dividends from the Bank as our primary source of funds. The primary source of the Bank’s funds are customer deposits, loan repayments, proceeds from our investment securities and borrowings. While scheduled loan repayments are a relatively stable source of funds, they are subject to the ability of borrowers to repay the loans. The ability of borrowers to repay loans can be adversely affected by a number of factors, including changes in economic conditions, adverse trends or events affecting business industry groups, reductions in real estate values or markets, business closings or lay-offs, pandemics, inclement weather, natural disasters and international instability. Additionally, deposit levels may be affected by a number of factors, including rates paid by competitors, general interest rate levels, returns available to customers on alternative investments and general economic conditions. Accordingly, we may be required from time to time to rely on secondary sources of liquidity to meet withdrawal demands or otherwise fund operations or to support growth. Such sources 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. 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 meet our liquidity needs through any of the aforementioned sources, whether at all or at the time or the cost that we anticipate, we may be required to slow or discontinue loan growth, capital expenditures or other investments or liquidate assets.
A failure or breach of our operational or security systems, 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.
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As a financial institution, we rely heavily on our ability, and the ability of our third party service providers, to securely process, record, transmit and monitor confidential and other information through our and our third party service provider’s computer systems and networks. Our operational systems, including, among other things, deposit and loan servicing, online banking, wealth management, accounting and data processing, could be materially adversely impacted by a failure, interruption or breach in the security or integrity of any of these systems, whether our own or one of our third party service provider’s. Threats to these systems come from a variety of sources, including computer hacking involving the introduction of computer viruses or malware, cyber-attacks, electronic fraudulent activity and attempted theft of financial assets. These threats are very sophisticated and constantly evolving.

We have invested a significant amountdepend on the accuracy and completeness of timeinformation furnished by others about customers and expense, in both security infrastructure investmentscounterparties.
In deciding whether to extend credit or enter into other transactions, we often rely on information furnished by or on behalf of customers and counterparties, including financial statements, credit reports, other financial information and appraisals of the developmentvalue of policies and procedures governing our operations, in our efforts to ensure the security and integritycollateral. We may also rely on representations of our systems from the aforementioned threats, and we continue to upgrade our systems and evolve our policies and procedures to address vulnerabilities that we identify as well as new techniques being used to compromise our systems of which we become aware, especially as we expand our mobile and online banking presence. In addition, we require our third party service providers to be similarly diligent


in protecting their own systems from such existing and new threats. Despite these efforts, we can provide no assurances that our systems, or our provider’s systems, will not experience any failures, interruptions or security breaches or that, if any such failures, interruptions or breaches occur, they will be addressed in a timely and adequate manner. If the security and integrity of our systems, or the systems of one of our providers, are compromised, our operations could be significantly disrupted and our or our customer’s confidential information could be misappropriated, among other things. This in turn could result in financial losses to us or ourthose customers, damage to our reputation, the violation of privacycounterparties or other lawsthird parties, such as independent auditors, as to the accuracy and significant litigation risk, allcompleteness of whichthat information. Reliance on inaccurate or misleading financial statements, credit reports, other financial information or appraisals could have a material adverse effect on our financial conditionbusiness and, results of operations.
Our risk management framework may not be effective in mitigating risk and loss to us.
We are subject to numerous risks, including lending risk, interest rate risk, liquidity risk, market risk, information security risk and model risk, among other risks encountered in the ordinary course of our operations. We have put in place processes and procedures designed to identify, measure, monitor, report and analyze these risks. However, all risk management frameworks are inherently limited when current procedures cannot anticipate the existence or future development of currently unanticipated or unknown risks, and we may have underestimated the impact of known risks. The recent recession and the heightened regulatory scrutiny of financial institutions that resulted therefrom, coupled with increases in the scope and complexity of our operations, among other things, have increased the level of risk that we must manage. Accordingly, we could suffer losses as a result of our failure to properly anticipate and manage these risks.
Our business strategy includes the continuation of growth plans, andturn, our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively.
We have grown our business through the acquisition of entire financial institutions and through de novo branching. We have engaged in whole-bank acquisitions, most recently acquiring Brand and its wholly-owned subsidiary Brand Bank on September 1, 2018. In addition, since the beginning of 2011, we have opened eight de novo branches, acquired specified assets and the operations of, and assumed specified liabilities of, failed financial institutions in two FDIC-assisted transactions and acquired the RBC Bank (USA) trust division. We intend to continue pursuing a growth strategy for our business through de novo branching and to evaluate attractive acquisition opportunities that are presented to us. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies when expanding their franchise, including the following:
Management of Growth.  We may be unable to successfully:
maintain loan quality in the context of significant loan growth;
maintain adequate management personnel and systems to oversee such growth;
maintain adequate internal audit, loan review and compliance functions; and
implement additional policies, procedures and operating systems required to support such growth.
Operating Results. Existing offices or future offices may not maintain or achieve deposit levels, loan balances or other operating results necessary to avoid losses or produce profits. Our growth and de novo branching strategy necessarily entails growth in overhead expenses as we routinely add new offices and staff. Our historical results may not be indicative of future results or results that may be achieved as we continue to increase the number and concentration of our branch offices. Should any new location be unprofitable or marginally profitable, or should any existing location experience a decline in profitability or incur losses, the adverse effect on our results of operations and financial condition could be more significant than would be the case for a larger company.
Development of Offices. There are considerable costs involved in opening branches, and new branches generally do not generate sufficient revenues to offset their costs until they have been in operation for at least a year or more. Accordingly, our de novo branches can be expected to negatively impact our earnings for some period of time until the branches reach certain economies of scale. Our expenses could be further increased if we encounter delays in opening any of our de novo branches. We may be unable to accomplish future branch expansion plans due to a lack of available satisfactory sites, difficulties in acquiring such sites, increased expenses or loss of potential sites due to complexities associated with zoning and permitting processes, higher than anticipated merger and acquisition costs or other factors. Finally, our de novo branches or branches that we may acquire may not be successful even after they have been established or acquired, as the case may be.
Expansion into New Markets. Much of our recent growth has been focused in the highly-competitive metropolitan areas of Memphis and Nashville, Tennessee, Birmingham and Huntsville, Alabama, Atlanta, Georgia, east Tennessee, as well as Gainesville and Ocala, Florida. In these growth markets we face competition from a wide array of financial institutions, including much larger, well-established financial institutions. Our acquisition of Brand increased our presence in Atlanta, Georgia, a highly attractive and competitive market.


Regulatory and Economic Factors. Our growth and expansion plans may be adversely affected by a number of regulatory and economic developments or other events. Failure to obtain required regulatory approvals, changes in laws and regulations or other regulatory developments and changes in prevailing economic conditions or other unanticipated events may prevent or adversely affect our continued growth and expansion. 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.
Failure to successfully address these issues could have a material adverse effect on our financial condition and results of operations, and could adversely affect our ability to successfully implement our business strategy. Also, if our growth occurs more slowly than anticipated or declines, our operating results could be materially adversely affected.
We may fail to realize the anticipated benefits of our recent and pending acquisitions.
The success of our acquisitions, including our recently completed acquisition of Brand, will depend on, among other things, our ability to realize anticipated cost savings and to 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. If we are not able to successfully achieve these objectives, the anticipated benefits of the acquisition may not be realized fully or at all or may take longer to realize than expected. Additionally, we will make fair value estimates of certain assets and liabilities in recording each acquisition. Actual values of these assets and liabilities could differ from our estimates, which could result in our not achieving the anticipated benefits of the particular acquisition.
We cannot assure investors that our acquisitions will have positive results, including results relating to: correctly assessing the asset quality of the assets acquired; the total cost of integration, including management attention and resources; the time required to complete the integration successfully; the amount of longer-term cost savings; being able to profitably deploy funds acquired in the transaction; retaining the existing client relationships; or the overall performance of the combined business.
Our future growth and profitability depends, in part, on our ability to successfully manage the combined operations. 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.
Additionally, general market and economic conditions or governmental actions affecting the financial industry generally may inhibit our successful integration of the operations acquired.
We may continue to experience increased credit costs or need to take additional markdowns and make additional provisions to the allowance for loan losses on purchased loans. Any of these actions could adversely affect our financial condition and results of operations in the future. In addition, as our integration efforts continue in connection with the Brand acquisition, we may incur other unanticipated costs, including the diversion of personnel, or losses. In addition, the attention and effort devoted to the integration of an acquired business may divert management’s attention from other important issues and could harm our business.
We may face risks with respect to future acquisitions.
When we attempt to expand our business through mergers and acquisitions (including FDIC-assisted transactions), we seek targets that are culturally similar to us, have experienced management and possess either significant market presence or have potential for improved profitability through economies of scale or expanded services or, in the case of FDIC-assisted transactions, on account of the loss share arrangements with the FDIC associated with such transactions. 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;
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.
We expect to continue to evaluate merger and acquisition opportunities (including FDIC-assisted transactions) that are presented to us and conduct due diligence activities related to possible transactions with other financial institutions. As a result, merger or acquisition discussions and, in some cases, negotiations may take place and future mergers or acquisitions involving cash, debt or equity securities may occur at any time. Historically, acquisitions of non-failed financial institutions involve the payment of a premium over book and market values, and, therefore, some dilution of our book value and net income per common share may occur in connection with any future transaction. Failure to realize the expected revenue increases, cost savings, increases in geographic or product presence and/or other projected benefits from an acquisition could have a material adverse effect on our financial condition and results of operations.
Our profitability may be negatively impacted by changes in the amount and timing of the resolution of purchased impaired loans.
Under applicable accounting standards, we are required to periodically re-estimate the expected cash flows from impaired loans that we have purchased as part of our acquisition transactions. The carrying value of these loans can be impaired due to lower-than-expected cash flows, increases in loss estimates or defaults. Any such impairment must be recognized in the period in which the change in estimated cash flow occurs. Any such impairment will reduce our results of operations and profitability, and such reduction could be material.
Competition in our industry is intense and may adversely affect our profitability.
We face substantial competition in all areas of our operations from a variety of different competitors, many of which are larger and have substantially greater resources than we have, including higher total assets and capitalization, greater access to capital markets and a broader offering of financial services. Such competitors primarily include national, regional and community banks within the various markets in which we operate. We also face competition from many other types of financial institutions, including savings and loans, credit unions, finance companies, brokerage firms, insurance companies, factoring companies, FinTechfintech companies and other financial intermediaries. 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 andchanges. We also expect continued consolidation. The consolidation of financial institutions in connection with the 2008-2009 recession has continued to the present time, and we expect additional consolidation to occurbanking industry as a result of, among other things, elevated regulatory compliance and other legal costs and changesthe benefits of scale when making investments in laws affecting larger financial institutions.new technology. 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. 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 automatic payment systems. Many of our competitors have fewer regulatory constraints and may have lower cost structures.








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.
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.
Entities within the financial services industry are interrelated as a result of trading, clearing, counterparty and other relationships. We have exposure to many different industries and counterparties and from time to time execute transactions with counterparties in the financial services industry, including commercial banks, brokers and dealers, investment banks and other institutional clients. Many of these transactions expose us to credit risk in the event of a default by a counterparty or client. In addition, our credit risk may be exacerbated when the collateral we hold cannot be realized upon or is liquidated at prices not sufficient to recover the full amount of the credit due to us. Any such losses could have a material adverse effect on our financial condition and results of operations.
We are subject to extensive government regulation, and such regulation could limit or restrict our activities and adversely affect our earnings.

We and the Bank are subject to extensive federal and state regulation and supervision. Banking regulations are primarily intended to protect depositors’ funds, federal deposit insurance funds and the banking system as a whole.whole, while consumer protection statutes are primarily focused on the protection of the users of our lending and deposit services. These regulations
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affect our lending practices, capital structure, investment practices, dividend policy and growth, among other things. In addition, significant changes to such regulations have been proposed or may be proposed. Changes to statutes, regulations or regulatory policies, including changes in interpretation or implementation of the foregoing, could affect us and/or the Bank in substantial and unpredictable ways. Such changes could subject us to additional costs, limit the types of financial services and products we may offer and/or increase the ability of non-banks to offer competing financial services and products, among other things.
Under regulatory capital adequacy guidelines and other regulatory requirements, we and the Bank must meet guidelines that include quantitative measures of assets, liabilities and certain off-balance sheet items, subject to qualitative judgments by regulators about components, risk weightings and other factors. If we fail to meet these minimum capital guidelines and other regulatory requirements, our financial condition would be materially and adversely affected. Our failure to maintain the status of “well capitalized” under our regulatory framework could affect the confidence of our customers in us, thus compromising our competitive position. In addition, failure to maintain the status of “well capitalized” under our regulatory framework, “well managed” under regulatory examination procedures or “satisfactory” under the CRA could compromise our status as a bank holding company and related eligibility for a streamlined review process for merger or acquisition proposals and would result in higher deposit insurance premiums assessed by the FDIC.
We are also subject to various privacy, data protection and information security laws. Under the GLB Act, we are subject to limitations on our ability to share our customers’ nonpublic personal information with unaffiliated parties, and we are required to provide certain disclosures to our customers about our data collection and security practices. Customers have the right to opt out of our disclosure of their personal financial information to unaffiliated parties. We are also subject to state laws regulating the privacy of individual's private information, many of which are more restrictive, and have more severe sanctions for noncompliance, than the GLB Act. Finally, the GLB Act requires us to develop, implement and maintain a written comprehensive information security program containing appropriate safeguards for our customers’ nonpublic personal information. New laws and regulations have also been proposed that could increase our privacy, data protection and information security compliance costs. Our failure to comply with new or existing privacy, data protection and information security laws and regulations could result in material regulatory or governmental investigations and/or fines, sanctions and other expenses.expenses which could have a material adverse effect on our financial condition and results of operations.
As a public company, we are also subject to laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, the Dodd-Frank Act and SEC regulations. These laws, regulations and standards are subject to varying interpretations, amendment or outright repeal. As a result, the amendment or repeal of any such laws, regulations or standards, or the issuance of new guidance for complying therewith by regulatory and governing bodies, could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.


We are committed to maintaining high standards of corporate governance and public disclosure. As a result, our efforts to comply with evolving laws, regulations and standards have resulted in, and are likely to continue to result in, increased expenses and a diversion of management time and attention.
Failure to comply with laws, regulations or policies could also result in sanctions by regulatory agencies and/or civil money penalties, which could have a material adverse effect on our business, financial condition and results of operations. WhileAlthough 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 any such violations, such violations nevertheless may occur.violations. The information under the heading “Supervision and Regulation” in Item 1, Business, and Note 24,21, “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.
Higher FDIC deposit insurance premiums and assessments could adversely affect our financial condition.
In order to replenish the Deposit Insurance Fund following the recession in 2008-2009, the FDIC significantly increased the assessment rates paid by financial institutions for deposit insurance. In 2016,November 2018, the targetedDIF reached the minimum reserve ratio of 1.35% required under the DIFDodd-Frank Act, which resulted in the discontinuance of the assessment surcharges that had been charged to insured deposits was achieved, which allowed banks with assets less than $10 billion to have a reduction in costs. However, banks, including the Bank, with greater than $10 billion in assets will continue to have higher assessed rates untillike the DIF ratio reaches 1.35%. Additionally,Bank. However, under the Dodd-Frank Act, if the reserve ratio falls or is projected within 6 months to fall below 1.35%, or if the FDIC increases reserves against future losses, the increased assessments are to be borne primarily by institutions with assets greater than $10 billion, which will apply to the Bank. Any increases in FDIC insurance premiums and any special assessments may adversely affect our financial condition and results of operations.
The Company’s financial condition and results of operations contain estimates and assumptions made by management that could be inaccurate.

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Accounting estimates and processes are fundamental to how we record and report our financial condition and results of operations. Accounting principles generally accepted in the United States (“GAAP”) require our management to make estimates about future events that are inherently uncertain. We use models and other forecasting processes to make these estimates. In doing so, management must choose between many alternatives, all of which may be reasonable under prevailing circumstances. As a result, these models and other forecasting processes may reflect assumptions that ultimately prove to be inaccurate, particularly in times of market stress or other unforeseen circumstances. Even if these assumptions are subjectadequate, the models may include flaws in their design or their implementation, including flaws caused by failures in controls, data management, human error or from the reliance on technology. Because of the uncertainty and subjectivity surrounding management’s judgments and the estimates pertaining to heightened regulatory requirements now that we exceed $10 billion in assets.
As discussed under the heading “Supervision and Regulation” in Item 1, Business, the Dodd-Frank Act and regulations promulgated thereunder impose additional requirements on bank holding companies with total assets of at least $10 billion. In addition, banks with total assets of at least $10 billion are primarily examined by the Consumer Financial Protection Bureau with respect to various federal consumer financial protection laws and regulations. Finally, since we exceeded $10 billion in assets as of December 31, 2018, we are subject to the limitation on interchange fees imposed pursuant to the Durbin Amendment to the Dodd-Frank Act. To prepare forthese matters, the Company being subjectcannot guarantee that it will not be required to additional regulations upon exceeding $10 billionadjust accounting policies or restate prior period financial statements. Any such failure in assets, in recent years we incurred a number of significant expenses, and we expect to continue to incur additional expenses to address heightened regulatory requirements on account of having in excess of $10 billion in assets. Further, the impact of the Durbin Amendment will reduce our noninterest income. These additional expenses and the expected decrease in interchange fee revenueanalytical or forecasting models could have a material adverse effect on our business, financial condition and results of operations. Our regulators may also consider our compliance with these regulatory requirements when examining our operations generally or considering any request for regulatory approval we may make, even requests for approvals on unrelated matters such as acquisitionsSee “Critical Accounting Policies and Estimates” and Note 1 of other financial institutions.the Notes to Consolidated Financial Statements of this report.

Changes in accounting standards issued by the Financial Accounting Standards Board (“FASB”)FASB or other standard-setting bodies may adversely affect our financial statements.
Our financial statements are subject to the application of accounting principles generally accepted in the United States (“GAAP”),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. 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. 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. 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. 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.
In particular, in June 2016 FASB issued Accounting Standards Update 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which significantly changes the way entities recognize impairment on many financial assets by requiring immediate recognition of estimated credit losses expected to occur over the asset's remaining life, in place of the current “incurred loss” model for recognizing credit losses, which delays recognition of credit losses until it is probable a loss has been incurred. This new impairment recognition model is referred to as the current expected credit loss (“CECL”) model. The CECL model, which applies to loans, held-to-maturity debt instruments, lease receivables, loan commitments and financial guarantees that are not accounted for at fair value, will require us to present these financial assets at the net amount expected to be collected, at the time the loan is booked and subject to periodic adjustment. The amount of expected credit losses is to be based on past events, historical experience, current conditions as well as reasonable and


supportable forecasts that affect the collectability of the reported amount. This new accounting standard will be effective for us in the first quarter 2020.
The anticipated change in loan loss reserves due to the implementation of the CECL model is currently unknown and is dependent upon many factors that are yet to be determined, such as the economic environment at adoption and any future FASB clarifications. However, we currently expect to recognize a one-time cumulative-effect adjustment to our allowance for loan losses as of the beginning of the first quarter of 2020, consistent with regulatory expectations. We also anticipate that the adoption of the CECL model will materially affect how we determine our allowance for loan losses and could require us to significantly increase our allowance. Moreover, the CECL model may create more volatility in the level of our allowance for loan losses. If we are required to materially increase our level of allowance for loan losses for any reason, such increase could materially and adversely affect our business, financial condition and results of operations.
We may not be able to attract and retain skilled people.
Our success depends in part on our ability to retain key executives and to attract and retain additional qualified personnel who have experience both in sophisticated banking matters and in operating a bank of our size. Competition for such personnel can be intense in the banking industry, and we may not be successful in attracting or retaining the personnel we require. The unexpected loss of one or more of our key personnel could have a material adverse effect on our business because of their skills, knowledge of our markets, years of industry experience and the difficulty of promptly finding qualified replacements.
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 found on these properties. If hazardous or toxic substances are found, we may be liable for remediation costs, as well as for personal injury and property damage. Environmental laws may require us to incur substantial expenses and may materially reduce the affected property’s value or limit our ability to use or sell the affected property. The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on our financial condition and results of operations. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental liability. 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.
Severe weather, natural disasters, actsRisks Related to Our Business
Our business may be adversely affected by current economic conditions in general and specifically in the markets in which we operate.
General business and economic conditions in the United States and abroad can materially affect our business and operations and the businesses and operations of war or terrorismour customers. A weak U.S. economy is likely to cause uncertainty about the federal fiscal policymaking process, the medium and long-term fiscal outlook of the federal government and future tax rates. In addition, economic and other external events could significantly impact our business.
Severe weather, natural disasters, acts of war or terrorism and other adverse external events could have a significant impact on our ability to conduct business. Such events, such as Hurricane Michaelconditions in October 2018 and Hurricane Irma in September 2017, which impacted our Florida markets, and the April 2011 storms that devastated much of east Mississippi and west Alabama,foreign countries could affect the stability of our deposit base, impair the abilityglobal financial markets and adversely impact global supply chains, which could hinder U.S. economic growth.

Weak economic conditions are characterized by deflation, fluctuations in debt and equity capital markets, a lack of borrowers to repay outstanding loans, impair the value of collateral securing loans, cause significant property damage, result in loss of revenueliquidity and/or cause usdepressed 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. All of these factors are detrimental to incur additional expenses. Although management has established disaster recoveryour business, and the interplay between these factors can be complex and unpredictable. Our business is also significantly affected by monetary and related policies of the U.S. federal government and procedures, the occurrenceits agencies. Changes in any of anythese policies are influenced by macroeconomic conditions and other factors that are beyond our control. Adverse economic conditions and government policy responses to such eventconditions could have a material adverse effect on the businesses and operations of our customers and in turn on our business, financial condition, results of operations and growth prospects.
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More particularly, much of our business development and marketing strategy is directed toward fulfilling the banking and financial services needs of small to medium size businesses. Such businesses generally have fewer financial resources in terms of capital or borrowing capacity than larger entities. If general economic conditions negatively impact the markets in which we operate and these businesses are adversely affected, our financial condition and results of operations may be negatively affected.

We have a high concentration of loans secured by real estate.

At December 31, 2021, approximately 83.61% 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 turn,the event of a default by the borrower. Any adverse change in real estate values in our markets could significantly impair the value of the particular collateral securing our loans and our ability to sell the collateral upon foreclosure for an amount necessary to satisfy the borrower’s obligations to us. 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 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, commercial real estate (“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. 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. At December 31, 2021, we had approximately $5.7 billion in commercial real estate loans, representing approximately 56.42% of our loans outstanding on that date, as follows:
(thousands)December 31, 2021
Commercial Real Estate
Owner-occupied$1,563,351 
Non-owner occupied2,856,947 
Construction1,104,896 
Land Development:
Commercial mortgage128,739 
Total Commercial real estate loans$5,653,933 
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. 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.
A failure or breach of our operational or security systems, 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.
As a financial institution, we rely heavily on our ability, and the ability of our third party service providers, to securely and reliably process, record, transmit and monitor confidential and other information through our and our third party service provider’s computer systems and networks. Our operational systems, including, among other things, deposit and loan servicing, online and mobile banking, wealth management, accounting and data processing, could be materially adversely impacted by a failure, interruption or breach in the security or integrity of any of these systems, whether our own or one of our third party service provider’s. Threats to these systems come from a variety of sources, including computer hacking involving the introduction of computer viruses or malware, cyber-attacks, identity theft, electronic fraudulent activity and attempted theft of financial assets. These threats are very sophisticated and constantly evolving. In addition, our systems are threatened by unpredictable events such as terrorist attacks, power outages or tornadoes or other natural disasters.
We have invested a significant amount of time and expense, in security infrastructure investments and the development of
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policies and procedures governing our operations as well as employee training and monitoring of our third party service providers, in our efforts to preserve the security and integrity of our systems from the aforementioned threats. Despite these efforts, we can provide no assurances that our systems, or our provider’s systems, will not experience any failures, interruptions or security breaches or that, if any such failures, interruptions or breaches occur, they will be addressed in a timely and adequate manner. If the security and integrity of our systems, or the systems of one of our providers, are compromised, our operations could be significantly disrupted and our or our customers confidential information could be misappropriated, among other things. 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.
We rely extensively on a number of third party service providers.

Third-party service providers provide certain products and services necessary to maintain our day-to-day operations. In addition to the information security risks discussed immediately above, we are subject to risks associated with a service provider’s failure to provide the agreed-upon products or services for reasons not related to information security or its delivery of a product or provision of services at a level or in a manner that does not satisfy our expectations. Such poor performance may be due to the service provider’s failure to meet its contractual service level standards (due to, among other reasons, insufficient support for its existing products and services or a change in its strategic focus) or simply because the service provider’s products or services do not include the functionality, convenience or other aspects necessary to compete effectively in the marketplace. Although we rigorously evaluate potential third party service providers before entering into a business arrangement, we ultimately do not control the service provider’s performance of its contractual obligations or its actions with respect thereto. A service provider’s failure to meet its contractual obligations or otherwise perform as expected could be disruptive to our operations, which could have a material adverse impact on our business, financial condition and results of operations. Further, replacing service providers often entails significant delay and expense.
Our risk management framework may not be effective in mitigating risk and loss to us.
We are subject to numerous risks, including lending risk, interest rate risk, liquidity risk, market risk, information security risk and model risk, among other risks encountered in the ordinary course of our operations. We have implemented processes and procedures designed to identify, measure, monitor and mitigate these risks. However, all risk management frameworks are inherently limited, for a number of reasons. First, we may not have identified all material risks affecting our operations. Next, our current procedures may not anticipate future development of currently unanticipated or unknown risks. 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. Accordingly, we could suffer losses as a result of our failure to properly anticipate and manage these risks.
Our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively.
Historically, we have grown our business through the acquisition of entire financial institutions and through de novo branching and we intend to continue pursuing this growth strategy for the foreseeable future. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies when expanding their franchise, including the following:
Management of Growth.  We may be unable to successfully:
maintain loan quality in the context of significant loan growth;
maintain adequate management personnel and systems to oversee such growth;
maintain adequate internal audit, loan review and compliance functions; and
implement additional policies, procedures and operating systems required to support such growth.
Operating Results. Existing offices or future offices may not maintain or achieve deposit levels, loan balances or other operating results necessary to avoid losses or produce profits in an efficient manner. Our growth strategy necessarily entails growth in overhead expenses as we add new offices and staff. Our historical results may not be indicative of future results or results that may be achieved if we increase the number of our branch offices. Should any new location be unprofitable or marginally profitable, or should existing locations experience a decline in profitability or incur losses, the adverse effect on our results of operations and financial condition could be more significant than would be the case for a larger company.
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Expansion into New Markets. Much of our recent growth has been focused in the highly-competitive metropolitan areas within our footprint. In these growth markets we face competition from a wide array of financial institutions, including much larger, well-established financial institutions.
Regulatory and Economic Factors. Our growth and expansion plans may be adversely affected by a number of regulatory and economic developments or other events. Failure to obtain, or a delay in obtaining, required regulatory approvals, changes in laws and regulations or other regulatory developments and changes in prevailing economic conditions or other unanticipated events may prevent or adversely affect our continued growth and expansion. 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.
Failure to successfully address these issues could have a material adverse effect on our financial condition and results of operations, and could adversely affect our ability to successfully implement our business strategy. Also, if our growth occurs more slowly than anticipated or declines, our operating results could be materially adversely affected.
We may fail to realize the anticipated benefits of our acquisitions.
The success of our acquisitions will depend on, among other things, our ability to realize anticipated cost savings and to 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. If we are not able to successfully achieve these objectives, the anticipated benefits of the acquisition may not be realized fully or at all or may take longer to realize than expected. Additionally, we will make fair value estimates of certain assets and liabilities in recording each acquisition. Actual values of these assets and liabilities could differ from our estimates, which could result in our not achieving the anticipated benefits of the particular acquisition.
We cannot assure investors that our acquisitions will have positive results, including results relating to: correctly assessing the asset quality of the assets acquired; the total cost of integration, including management attention and resources; the time required to complete the integration successfully; the amount of longer-term cost savings; being able to profitably deploy funds acquired in the transaction; retaining the existing client relationships; or the overall performance of the combined business.
Our future growth and profitability depends, in part, on our ability to successfully manage the combined operations. 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.
Additionally, general market and economic conditions or governmental actions affecting the financial industry generally may inhibit our successful integration of the operations acquired.
We may continue to experience increased credit costs or need to take additional markdowns and make additional provisions to the allowance for credit losses on loans. Any of these actions could adversely affect our financial condition and results of operations in the future. In addition, the attention and effort devoted to the integration of an acquired business may divert management’s attention from other important issues and could harm our business.
We may face risks with respect to future acquisitions.
When we attempt to expand our business through mergers and acquisitions (including FDIC-assisted transactions), we seek targets that are culturally similar to us, have experienced management and possess either significant market presence or have potential for improved profitability through economies of scale or expanded services or, in the case of FDIC-assisted transactions, on account of the loss share arrangements with the FDIC associated with such transactions. 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:
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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.
We expect to continue to evaluate merger and acquisition opportunities (including FDIC-assisted transactions) that are presented to us and conduct due diligence activities related to possible transactions with other financial institutions. As a result, merger or acquisition discussions and, in some cases, negotiations may take place and future mergers or acquisitions involving cash, debt or equity securities may occur at any time. Historically, acquisitions of non-failed financial institutions involve the payment of a premium over book and market values, and, therefore, some dilution of our book value and net income per common share may occur in connection with any future transaction. Failure to realize the expected revenue increases, cost savings, increases in geographic or product presence and/or other projected benefits from an acquisition could have a material adverse effect on our financial condition and results of operations.
Risks Associated With Our Common Stock
Our ability to declare and pay dividends is limited by law, and we may be unable to pay future dividends.
We are a separate and distinct legal entity from the Bank, and we receive substantially all of our revenue from dividends from the Bank. These dividends are the principal source of funds to pay dividends on our common stock and interest and principal on our debt. Various federal and/or state laws and regulations limit the amount of dividends that the Bank may pay to us. In the event the Bank is unable to pay dividends to us, we may not be able to service our debt, pay our obligations or pay dividends on our common stock. The inability to receive dividends from the Bank could have a material adverse effect on our business, financial condition and results of operations. The information under Note 20, “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.
Our stock price can be volatile.
Stock price volatility may make it more difficult for an investor to resell our common stock when desired and at attractive prices. Our stock price can fluctuate significantly in response to a variety of factors including, among other things:


actual or anticipated variations in quarterly results of operations;
recommendations by securities analysts;
operating and stock price performance of other companies that investors deem comparable to us;
news reports relating to trends, concerns and other issues in the banking and financial services industry;
perceptions in the marketplace regarding us and/or our competitors;
new technology used, or services offered, by us or our competitors;
significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors;
failure to integrate acquisitions or realize anticipated benefits from acquisitions;
changes in government regulations; and
civil unrest and geopolitical conditions such as acts or threats of terrorism or military conflicts.
General market fluctuations, industry factors and general economic and political conditions and events, such as economic slowdowns or recessions, pandemics, interest rate changes or credit loss trends, could also cause our stock price to decrease regardless of operating results.
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The trading volume in our common stock is less than that of other bank holding companies.
Although our common stock is listed for trading on The NASDAQ Global Select Market, the average daily trading volume in our common stock is generally less than that of many of our competitors and other bank holding companies that are publicly-traded companies. For the 60 days ended February 22, 2019,18, 2022, the average daily trading volume for Renasant common stock was 206,346288,154 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. This presence depends on the individual decisions of investors and general economic and market conditions over which we have no control. Significant sales of our common stock, or the expectation of these sales, could cause volatility in the price of our common stock.
Our ability to declare and pay dividends is limited by law, and we may be unable to pay future dividends.
We are a separate and distinct legal entity from the Bank, and we receive substantially all of our revenue from dividends from the Bank. These dividends are the principal source of funds to pay dividends on our common stock and interest and principal on debt. Various federal and/or state laws and regulations limit the amount of dividends that the Bank may pay to us. In the event the Bank is unable to pay dividends to us, we may not be able to service debt, pay obligations or pay dividends on our common stock. The inability to receive dividends from the Bank could have a material adverse effect on our business, financial condition and results of operations. The information under Note 23, “Restrictions on Cash, Securities, Bank Dividends, Loans or Advances,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, provides a detailed discussion about the restrictions governing the Bank’s ability to transfer funds to us.
Holders of our junior subordinated debentures have rights that are senior to those of our common shareholders.
We have supported a portion of our growth through the issuance of trust preferred securities from special purpose trusts and accompanying junior subordinated debentures. Also, in connection with our acquisitions of other financial institutions, we have assumed junior subordinated debentures. At December 31, 2018, we had trust preferred securities and accompanying junior subordinated debentures with a carrying value of $109.6 million. Payments of the principal and interest on the trust preferred securities of these trusts are conditionally guaranteed by us. Further, the junior subordinated debentures we issued to the trusts are senior to our shares of common stock. As a result, we must make payments on the junior subordinated debentures before any dividends can be paid on our common stock and, in the event of our bankruptcy, dissolution or liquidation, the holders of the junior subordinated debentures must be satisfied before any distributions can be made on our common stock (such dividend restrictions do not apply to theour outstanding subordinated notes issued in August 2016 or assumed in connection with the Metropolitan and Brand acquisitions)notes). 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.
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 for the reasons described in this “Risk Factors” section and elsewhere in this Annual Report on Form 10-K and is subject to the same market forces that affect the price of common stock in any company. As a result, an investor may lose some or all of hisits investment in our common stock.


Our Articles of Incorporation and Bylaws, as well as certain banking laws, could decrease our chances of being acquired even if our acquisition is in our shareholders’ best interests.
Provisions of our Articles of Incorporation and Bylaws and federal banking laws, including regulatory approval requirements, could make it more difficult for a third party to acquire us, even if doing so would be perceived to be beneficial to our shareholders. The combination of these provisions impedes a non-negotiated merger or other business combination, which, in turn, could adversely affect the market price of our common stock.
Our issuance of preferred stock could adversely affect holders of our common stock and discourage a takeover.
Our shareholders authorized the Board of Directors to issue up to 5,000,000 shares of preferred stock without any further action on the part of our shareholders. Our Board of Directors also has the power, without shareholder approval, to set the terms of any series of preferred stock that may be issued, including voting rights, dividend rights, preferences over our common stock with respect to dividends or in the event of a dissolution, liquidation or winding up and other terms. In the event that we issue preferred stock in the future that has preference over our common stock with respect to payment of dividends or upon our liquidation, dissolution or winding up, or if we issue preferred stock with voting rights that dilute the voting power of our common stock, the rights of the holders of our common stock or the market price of our common stock could be adversely affected. In addition, the ability of our Board of Directors to issue shares of preferred stock without any action on the part of our shareholders may impede a takeover of us and prevent a transaction perceived to be favorable to our shareholders.
Shares eligible for future sale could have a dilutive effect.
Shares of our common stock eligible for future sale, including those that may be issued in any other private or public offering of our common stock for cash or as incentives under equity incentive plans, could have a dilutive effect on the market for our common stock and could adversely affect market prices. As of February 22, 2019,18, 2022, there were 150,000,000 shares of our common stock authorized, of which 58,569,90455,815,152 shares were outstanding.
The FDIC’s Statement of Policy on Qualifications for Failed Bank Acquisitions may restrict our activities and those of certain investors in us.
On August 26, 2009, the FDIC adopted the final Statement of Policy on Qualifications for Failed Bank Acquisitions (the “Statement”). The Statement purports to provide guidance concerning the standards for more than de minimis investments in acquirers of deposit liabilities and the operations of failed insured depository institutions. The Statement applies to private investors in a company, including any company acquired to facilitate bidding on failed banks or thrifts that is proposing to, directly or indirectly, assume deposit liabilities, or such liabilities and assets, from the resolution of a failed insured depository institution. By its terms, the Statement does not apply to investors with 5% or less of the total voting power of an acquired depository institution or its bank or thrift holding company (provided there is no evidence of concerted action by these investors). When applicable, among other things, covered investors (other than certain mutual funds) are prohibited by the Statement from selling their securities in the relevant institution for three years. In addition, covered investors must disclose to the FDIC information about the investors and all entities in the ownership chain, including information as to the size of the capital fund or funds, its diversification, the return profile, the marketing documents, the management team and the business model, as well as such other information as is determined to be necessary to assure compliance with the Statement. Furthermore, among other restrictions, the acquired institution must maintain a ratio of Tier 1 common equity to total assets of at least 10% for a period of three years from the time of acquisition; thereafter, the institution must maintain capital such that it is “well capitalized” during the remaining period of ownership by the covered investor. In addition, under the Statement, covered investors employing ownership structures utilizing entities that are domiciled in Secrecy Law Jurisdictions (as defined in the Statement) would not be eligible to own a direct or indirect interest in an insured depository institution, subject to certain exceptions.
The Statement may be applicable to private investors in us and, in the event of any such private investors covered by the Statement, will be applicable to us. Furthermore, because the applicability of the Statement depends in large part on the specific investor, we may not know at any given point in time whether the Statement applies to any investor and, accordingly, to us. Each investor must make its own determination concerning whether the Statement applies to it and its investment in us. Each investor is cautioned to consult its own legal advisors concerning such matters. We cannot assure investors that the Statement will not be applicable to us.
25


ITEM 1B. UNRESOLVED STAFF COMMENTS
None.



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. The Technology Center, also located in Tupelo, houses electronic data processing, document preparation, document imaging, loan servicing and deposit operations.
As of December 31, 2018,2021, Renasant operated 152150 full-service branches, 1211 limited-service branches, an ATM network, which includes 151173 ATMs at on-premise locations and 24 ATMs located at off-premise sites, and an38 Interactive Teller MachineMachines (ITM) network that includes 14 ITMs at on-premise locations and two ITMs located at off-premise sites.. Our Community Banks and Wealth Management segments operate out of all of these offices.branches.
The Bank owns 121 of its 152 full-service branch banking facilities. The remaining 31 full-service branches are under lease agreements. The Bank owns 11 of the 12 limited-service branches. The Bank also operates 2021 locations used exclusively for Mortgage Banking, threemortgage banking and seven locations used exclusively for loan production andproduction. The Wealth Management segment operates two locations used exclusively for investment services; of these locations, two are owned by the Bank with the remaining 23 under lease agreements. The 55 banking facilities that are occupied under leases have unexpired terms ranging from one to sixteen years.services.
Renasant Insurance, a wholly-owned subsidiary of the Bank, owns sevenoperates out of eight stand-alone offices and leases three branches throughout Mississippi.
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.

ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company, the Bank, Renasant Insurance or any otherof 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 2018.2021.

ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.



26



PART II

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 NASDAQ Global Select Market (“NASDAQ”) under the ticker symbol “RNST.” On February 22, 2019,18, 2022, the Company had approximately 4,5314,255 shareholders of record and the closing sales price of the Company’s common stock was $38.58.$36.60.
Please refer to Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, for a discussion of the securities authorized for issuance under the Company’s equity compensation plans.
Issuer Purchases of Equity Securities
Total Number of Shares Purchased (1)
Average Price per ShareTotal Number of Shares Purchased as Part of Publicly Announced Share Repurchase Plans
Maximum Number of Shares or Approximate Dollar Value That May Yet Be Purchased Under Share Repurchase Plans (2)
October 1, 2021 to October 31, 2021— $— — $50,000 
November 1, 2021 to November 30, 20211,116 39.13 — 50,000 
December 1, 2021 to December 31, 20211,937 37.07 — 50,000 
Total3,053 $37.82 — 
(1)For the three months ended December 31, 2021, share amounts in this column represent shares of Renasant Corporation stock withheld to satisfy the exercise price of stock options and federal and state tax liabilities related thereto.
  
Total Number of Shares Repurchased (1)
 Average Price per Share 
Total Number of Shares Purchased as Part of Publicly Announced Share Repurchase Plans (2)
 
Maximum Number of Shares or Approximate Dollar Value That May Yet Be Purchased Under Share Repurchase Plans (3)
October 1, 2018 to October 31, 2018 77,000
 $34.96
 77,000
 $47,308
November 1, 2018 to November 31, 2018 122,121
 35.81
 122,065
 42,938
December 1, 2018 to December 31, 2018 
 
 
 42,938
Total 199,121
 $35.48
 199,065
 
The Company announced a $50.0 million stock repurchase program in October 2020. This plan expired in October 2021, and no shares were repurchased under this plan in the fourth quarter of 2021 prior to its expiration. The Company announced a new $50.0 million stock repurchase program in October 2021 under which the Company is authorized to repurchase outstanding shares of its common stock either in open market purchases or privately-negotiated transactions. This 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 2021 under this plan.
(1)
Represents shares repurchased as part of a publicly announced share repurchase plan or shares withheld to satisfy federal and state tax liabilities related to the vesting of time-based restricted stock awards during the three month period ended December 31, 2018

(2)Dollars in thousands.
(2)The Company announced a $50.0 million stock repurchase program on October 24, 2018. During the fourth quarter of 2018, the Company repurchased $7.1 million of common stock, or 199,065 shares, at a weighted average price of $35.48. The plan will remain in effect until the earlier of October 23, 2019 or the repurchase of the entire amount of common stock authorized to be repurchased by the Board of Directors.
(3)Dollars in thousands
Unregistered Sales of Equity Securities
The Company did not sell any unregistered equity securities during 2018.2021.

27



Stock Performance Graph
The following performance graph, obtained from S&P Global Market Intelligence, compares the performance of our common stock to the NASDAQ MarketComposite Index and to the SNL GeographicS&P U.S. BMI Banks - Southeast Region Index, Southeast, which is a peer group of regional southeast bank holding companies (which includes(including the Company), for our reportingthe measurement period. The performance graph assumes that the value of the investment in our common stock, the NASDAQ Market Index and the SNL GeographicS&P U.S. BMI Banks - Southeast Region Index Southeast was $100 at December 31, 2013,January 1, 2016, and that all dividends were reinvested.

rnst-20211231_g1.jpg
 Period Ending December 31,
 201620172018201920202021
Renasant Corporation$100.00 $98.57 $74.21 $89.23 $87.79 $101.20 
NASDAQ Composite Index100.00 129.64 125.96 172.18 249.51 304.85 
S&P U.S. BMI Banks - Southeast Region Index100.00 123.70 102.20 144.05 129.15 184.47 
chart-47f97657c5495a51b99.jpg(1)The S&P U.S. BMI Banks - Southeast Region Index, is a peer group of 54 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. The Company began the use of this index in 2021 due to the discontinuation of the index used in prior periods.
 Period Ending December 31,
 2013 2014 2015 2016 2017 2018
Renasant Corporation$100.00
 $94.17
 $114.40
 $143.19
 $141.16
 $106.26
NASDAQ Market Index100.00
 114.75
 122.74
 133.62
 173.22
 168.30
SNL Geographic Index, Southeast(1)
100.00
 112.63
 110.87
 147.18
 182.06
 150.42
(1)The SNL Geographic Index, Southeast, is a peer group of 74 regional bank holding companies, whose common stock is traded either on the New York Stock Exchange, NYSE Amex or NASDAQ, and who are headquartered in Alabama, Arkansas, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Virginia and West Virginia.
There can be no assurance that our common stock performance will continue in the future with the same or similar trends depicted in the performance graph above. We will not make or endorse any predictions as to future stock performance. The information provided under the heading “Stock Performance Graph” shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to its proxy regulations or to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended, other than as provided in Item 201 of Regulation S-K. The information provided in this section shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.



ITEM 6. SELECTED FINANCIAL DATA(1)
(In Thousands, Except Share Data) (Unaudited)[RESERVED]
28
Year Ended December 31,2018 20172016 2015 2014
Interest income$461,854
 $374,750
$329,138
 $263,023
 $226,409
Interest expense65,329
 37,853
28,147
 21,665
 23,927
Net interest income396,525
 336,897
300,991
 241,358
 202,482
Provision for loan losses6,810
 7,550
7,530
 4,750
 6,167
Noninterest income143,961
 132,140
137,415
 108,270
 80,509
Noninterest expense345,029
 301,618
295,099
 245,114
 190,937
Income before income taxes188,647
 159,869
135,777
 99,764
 85,887
Income taxes41,727
 67,681
44,847
 31,750
 26,305
Net income$146,920
 $92,188
$90,930
 $68,014
 $59,582
Per Common Share        
Net income – Basic$2.80
 $1.97
$2.18
 $1.89
 $1.89
Net income – Diluted2.79
 1.96
2.17
 1.88
 1.88
Book value at December 3134.91
 30.72
27.81
 25.73
 22.56
Closing price(2)
30.18
 40.89
42.22
 34.41
 28.93
Cash dividends declared and paid0.80
 0.73
0.71
 0.68
 0.68
Dividend payout28.67% 37.24%32.72% 36.17% 36.17%
At December 31,        
Assets$12,934,878
 $9,829,981
$8,699,851
 $7,926,496
 $5,805,129
Loans, net of unearned income9,083,129
 7,620,322
6,202,709
 5,413,462
 3,987,874
Securities1,250,777
 671,488
1,030,530
 1,105,205
 983,747
Deposits10,128,557
 7,921,075
7,059,137
 6,218,602
 4,838,418
Borrowings651,324
 297,360
312,135
 570,496
 188,825
Shareholders’ equity2,043,913
 1,514,983
1,232,883
 1,036,818
 711,651
Selected Ratios        
Return on average:        
Total assets1.32% 0.97%1.08% 0.99% 1.02%
Shareholders’ equity8.64% 6.68%8.15% 7.76% 8.61%
Average shareholders’ equity to average assets15.32% 14.52%13.26% 12.76% 11.89%
At December 31,        
Shareholders’ equity to assets15.80% 15.41%14.17% 13.08% 12.26%
Allowance for loan losses to total loans, net of unearned income(3)
0.77% 0.83%0.91% 1.11% 1.29%
Allowance for loan losses to nonperforming loans(3)
379.96% 348.37%320.08% 283.46% 209.49%
Nonperforming loans to total loans, net of unearned income(3)
0.20% 0.24%0.28% 0.39% 0.62%
(1)Selected consolidated financial data includes the effect of mergers and other acquisition transactions from the date of each merger or other transaction. On September 1, 2018, Renasant Corporation acquired Brand Group Holdings, Inc., a Georgia corporation (“Brand”), headquartered in Lawrenceville, Georgia. On July 1, 2017, Renasant Corporation acquired Metropolitan BancGroup, Inc., a Delaware corporation (“Metropolitan”), headquartered in Ridgeland, Mississippi. On April 1, 2016, Renasant Bank, Renasant Corporation's wholly-owned subsidiary, acquired KeyWorth Bank, a Georgia banking corporation (“KeyWorth”), headquartered in Johns Creek, Georgia. On July 1, 2015, Renasant Corporation acquired Heritage Financial Group, Inc., a Maryland corporation (“Heritage”), headquartered in Albany, Georgia. For additional information about the Brand and Metropolitan acquisitions, please refer to Item 1, Business, and Note 2, “Mergers and Acquisitions,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this Annual Report on Form 10-K. For additional information about the KeyWorth and Heritage acquisitions, please refer to Item 1, Business, and




Note 2, “Mergers and Acquisitions,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data in Renasant’s Annual Report on Form 10-K/A for the year ended December 31, 2017, filed with the SEC on February 28, 2018.
(2)Reflects the closing price on The NASDAQ Global Select Market on the last trading day of the Company’s fiscal year.
(3)Excludes assets acquired from Brand, Metropolitan, KeyWorth, Heritage and prior acquisitions and assets covered under loss share agreements with the FDIC. Effective December 8, 2016, Renasant Bank entered into an agreement with the FDIC that terminated all of the loss share agreements.


ITEM 7. 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, 2021 and 2020 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 our 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, 2020, which provides a discussion of 2019 items and year-to-year comparisons between 2020 and 2019 that are not included in this Annual Report on Form 10-K.
Performance Overview
Net income was $146,920$175,892 for 20182021 compared to $92,188$83,651 for 2017 and $90,930 for 2016.2020. Basic and diluted earnings per share (“EPS”) were $2.80$3.13 and $2.79,$3.12, respectively, for 20182021 compared to $1.97$1.49 and $1.96,$1.48, respectively, for 2017 and $2.18 and $2.17, respectively, for 2016.2020. At December 31, 2018,2021, total assets increased to $12,934,878$16,810,311 from $9,829,981$14,929,612 at December 31, 2017.2020. The comparability ofchanges in our financial condition and results of operations since 2016 has been influencedfrom 2020 to 2021 were driven by a number of factors:
factors, the most prominent of which are highlighted below:
Acquisitions
Effective September 1, 2018, the Company completed its acquisition of Brand Group Holdings, Inc. (“Brand”) in a transaction valued at $474,453. Including the effect of purchase accounting adjustments, which are still being finalized by the Company and are subject to change, the Company acquired assets with a fair value of $2,335,472 which included gross loans with a fair value of $1,589,254, and assumed liabilities with a fair value of $1,861,019, including deposits with a fair value of $1,714,177. The acquisition expanded the Company’s footprint in the greater Atlanta, Georgia metropolitan area.
Effective July 1, 2017, the Company completed its acquisition of Metropolitan BancGroup, Inc. (“Metropolitan”) in a transaction valued at $219,461. Including the effect of purchase accounting adjustments, the Company acquired assets with a fair value of $1,350,881, including gross loans with a fair value of $967,804, and assumed liabilities with a fair value of $1,137,291, including deposits with a fair value of $942,084. The acquisition expanded the Company’s footprint in the Memphis and Nashville markets in Tennessee and in the metro Jackson area in Mississippi.
Other
The Tax Cuts and Jobs Act, enacted on December 22, 2017, among other things, permanently lowered the federal corporate tax rate, effective for tax years including or beginning January 1, 2018. United States generally accepted accounting principles required the Company to revalue its net deferred tax assets on the date of enactment based on the reduction in the overall future tax benefit expected to be realized at the lower tax rate implemented by the new legislation. After reviewing the Company’s inventory of deferred tax assets and liabilities on the date of enactment and giving consideration to the future impact of the lower corporate tax rates and other provisions of the new legislation, the Company’s revaluation of its net deferred tax assets in December 2017 was $14,486. This write-down lowered our diluted EPS for 2017 by $0.31.
In December 2016, the Bank entered into an agreement with the Federal Deposit Insurance Corporation (the "FDIC") to terminate all of the Bank’s loss share agreements. As part of this termination, we made a $4,849 payment to the FDIC. The Company incurred a one-time pre-tax charge of $2,053 in connection with the termination of the agreement, which impacted diluted EPS in 2016 by $0.04.
In August 2016, the Company completed the public offering and sale of a combined $100,000 in subordinated notes. A portion of the proceeds was used to prepay approximately $38,900 in borrowings from the FHLB resulting in a penalty charge of approximately $2,200. Together with other penalties incurred in the prepayment of other borrowings in 2016, the penalty had an impact to diluted EPS of $0.04.
Financial Highlights
Net interest income increased 17.70%decreased $2,796 to $396,525$424,001 for 20182021 as compared to $336,897$426,797 for 2017; net interest income was $300,991 for 2016.2020. The increase since 2016decrease from 2020 to 2021 was due primarily to the increasecontinued decline in average earnings assets fromloan yields due to the acquisitions of Brand and Metropolitan and organic growthcurrent rate environment, as well as changes in the Company’s non purchased loan portfolio. Yields onmix of earning assets during the year due to increased as we replaced maturing assets with assets earning similar or higher rates of interest. Furthermore,liquidity on the increases to the target federal funds rate implementedbalance sheet, partially offset by the Federal Reserve Board over the last three years resulted in higher yields on loansa decline in our portfolio that earn a variable ratecost of interest.funds. The Company was ablehas continued to managefocus on lowering the cost of itsfunding through both growing noninterest-bearing deposits with theseand aggressively lowering interest rate increases such that interest expense increased at a much lower rate during this time.rates on interest-bearing deposits.
Net charge-offs as a percentage of average loans decreased to 0.05%were 0.10% and 0.04% in 20182021 and 2020, respectively. The Company recorded a recovery of provision for credit losses on loans of $1,700 in 2021 as compared to 0.06% in 2017. Net charge-offs as a percentage of average loans was 0.12% in 2016. The provision for loancredit losses was $6,810 for 2018 compared to $7,550 for 2017of $85,350 in 2020. The decrease year over year is reflective of the continued economic improvement and $7,530 for 2016.stable credit metrics.
Noninterest income was $143,961$226,984 for 20182021 compared to $132,140$235,532 for 2017 and $137,415 for 2016. The overall growth in noninterest income since 2016 is primarily attributable to the Brand and Metropolitan acquisitions.2020. The decrease in noninterest income from 2016 to 2017 is primarily attributable to a year-over-year decreasedecreased mortgage production during the year, partially offset by an increase in mortgage bankingother fee income which was driven by lower mortgage loan originations.


categories.
Noninterest expense was $345,029, $301,618$429,826 and $295,099$471,988 for 2018, 20172021 and 2016,2020, respectively. The increasedecrease in noninterest expense and its related components since 2016 is primarily attributable to decreases in salaries and employee benefits, which decreased partially due to the Brandvoluntary early retirement program offered in 2020 and Metropolitan acquisitions. The Company recorded mergerother expense initiatives. Salaries and employee benefits for 2020 also included approximately $8,237 in expense related to its recent acquisitions of $14,246, $10,378employee overtime and $4,023employee benefit accruals directly related to the Company's response to both the COVID-19 pandemic itself and federal legislation enacted to address the pandemic, such as the CARES Act. The Company also had a decrease in 2018, 2017net occupancy and 2016, respectively, which impacted diluted EPSequipment in each year by $0.21, $0.15 and $0.06, respectively.2021 resulting from the branch efficiency initiatives implemented in late 2020.
Loans, net of unearned income, were $9,083,129$10,020,914 at December 31, 20182021 compared to $7,620,322 in 2017 and $6,202,709 in 2016. Excluding purchased loans of $2,693,417 and $2,031,766$10,933,647 at December 31, 2018 and 2017, respectively,2020, which represents a decrease of 8.35% from the portfolioprevious year. The balance of PPP loans decreased to $58,391 at December 31, 2021 from $1,128,703 at December 31, 2020, while loans other than PPP loans increased by $801,156,$157,579, or 14.34%1.61%, from December 31, 2017.2020.
Deposits totaled $10,128,557$13,905,724 at December 31, 20182021 compared to $7,921,075$12,059,081 at December 31, 2017 and $7,059,137 at December 31, 2016. The growth in deposits from 2016 to 2018 was partially attributable to the Brand and Metropolitan acquisitions noted above.2020. Noninterest bearing deposits averaged $2,036,754,$4,310,834, or 22.83%33.15% of average deposits, for 20182021 compared to $1,724,834,$3,391,619, or 22.64%29.79% of average deposits, for 2017 and $1,467,881 or 22.00% of average deposits, for 2016.2020.

29


A historical look at key performance indicators is presented below.
202120202019
Diluted EPS$3.12 $1.48 $2.88 
Diluted EPS Growth110.81 %(48.61)%3.23 %
Shareholders’ equity to assets13.15 %14.29 %15.86 %
Tangible shareholders’ equity to tangible assets(1)
7.86 %8.33 %9.25 %
Return on Average Assets1.11 %0.58 %1.30 %
Return on Average Tangible Assets(1)
1.21 %0.66 %1.46 %
Return on Average Shareholders’ Equity7.96 %3.96 %7.95 %
Return on Average Tangible Shareholders’ Equity(1)
14.53 %7.83 %15.36 %
(1)These performance indicators are non-GAAP financial measures. A reconciliation of these financial measures from GAAP to non-GAAP as well as an explanation of why the Company provides these non-GAAP financial measures can be found under the “Non-GAAP Financial Measures” heading at the end of this Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 2018 2017 2016 2015 2014
Diluted EPS$2.79
 $1.96
 $2.17
 $1.88
 $1.88
Diluted EPS Growth42.35% (9.68)% 15.43% % 54.10%
Shareholders’ equity to assets15.80% 15.41 % 14.17% 13.08% 12.26%
Tangible shareholders’ equity to tangible assets(1)
8.92% 9.56 % 9.00% 7.54% 7.52%
Return on Average Assets1.32% 0.97 % 1.08% 0.99% 1.02%
Return on Average Tangible Assets(1)
1.47% 1.08 % 1.20% 1.11% 1.15%
Return on Average Shareholders’ Equity8.64% 6.68 % 8.15% 7.76% 8.61%
Return on Average Tangible Shareholders’ Equity(1)
15.98% 11.84 % 15.28% 14.50% 16.25%

(1)These performance indicators are non-GAAP financial measures. A reconciliation of these financial measures from GAAP to non-GAAP can be found under the “Non-GAAP Financial Measures” heading at the end of this Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Critical Accounting Policies and Estimates
Our financial statements are prepared using accounting estimates for various accounts. Wherever feasible, we utilize third-party information to provide management with estimates. Although independent third parties are engaged to assist us in the estimation process, management evaluates the results, challenges assumptions and considers other factors that could impact these estimates. We monitor the status of proposed and newly issued accounting standards to evaluate the impact (or potential impact) on our financial condition and results of operations.operations or on the preparation of our financial statements. Our accounting policies, including the impact of newly issued accounting standards, are discussed in further detail in Note 1, “Significant Accounting Policies,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data.Data, in this report. The following discussion presents somesupplements the discussion of the moreour significant estimates usedaccounting policies in preparing ourthe financial statements.
Allowance for LoanCredit Losses on Loans
The accounting policyestimate most important to the presentation of our financial statements relates to the allowance for loancredit losses and the related provision for loancredit losses. The allowance for loancredit losses is availablean estimate of expected losses inherent within the Company’s loans held for investment portfolio and is maintained at a level believed adequate by management to absorb probablesuch expected credit losses, inherentas prescribed by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic (“ASC”) 326, “Financial Instruments - Credit Losses” (“ASC 326”). Management evaluates the adequacy of the allowance for credit losses on a quarterly basis. Please refer to the discussion under the heading “Loans and the Allowance for Credit Losses” in Note 1, “Significant Accounting Policies,” in the entire loan portfolio. TheNotes 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.

Prior to the adoption of ASC 326 on January 1, 2020, the appropriate level of the allowance iswas based on an ongoing analysis of the loan portfolio and representsrepresented an amount that management deemsdeemed adequate to provide for inherent losses, including collective impairment as recognized under the Financial Accounting Standards Board Accounting Standards Codification Topic (“ASC”)ASC 450, “Contingencies”Contingencies (“ASC 450”)., in our loan portfolio. Collective impairment iswas calculated based on loans grouped by grade. Another component of the allowance iswas losses on loans assessed as impaired under ASC 310, “Receivables”Receivables (“ASC 310”). The balance of the loans determined to be impaired under ASC 310 and the related allowance iswas included in management’s estimation and analysis of the allowance for loan losses. The determination of the appropriate level of the allowance iswas sensitive to a variety of internal factors, primarily historical loss ratios and assigned risk ratings, and external factors, primarily the economic environment. While no one factor iswas dominant, each could cause actual loan losses to differ materially from originally estimated amounts.
For more information about the considerations in establishing the allowance for loan losses and 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 2020 and 2021, please refer to the disclosures in this Item under the heading “Risk Management – Credit Risk and Allowance for LoanCredit Losses.”
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 the accounting for acquisitions, 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.
30


Prior to the adoption of ASC 326 on January 1, 2020, in regards to a purchased in acquisitions or mergersloan, no allowance for loan losses was recorded on the acquisition date because the fair value measurements incorporated assumptions regarding credit risk. This applied even to a purchased loan with evidence of credit deterioration since origination are accounted for underpursuant to ASC 310-30, “LoansLoans and Debt Securities Acquired with Deteriorated Credit Quality”Quality (“ASC 310-30”). ASC 310-30 prohibits the carryover ofGenerally speaking, rather than carry over an allowance for loan losses, foras part of the acquisition we established a “Day 1 Fair Value” of a purchased loan or pools of purchased loans sharing common risk characteristics, which was equal to the outstanding balance of a purchased in whichloan or pool on the acquirer concludes that it will not collectacquisition date less any credit and/or yield discount applied against the contractual


amount. As a result,purchased loan or pool of loans. In other words, these loans areor pools of loans were carried at values which represent management’srepresented our estimate of thetheir future cash flows of these loans. Increases in expected cash flows to be collected fromflows. After the contractual cash flows are required to be recognized as an adjustment of the loan’s yield over its remaining life, while decreases in expected cash flows are required to be recognized as an impairment. A more detailed discussionacquisition date, a purchased loan or pool of loans accountedeither met or exceeded the performance expectations established in determining the Day 1 Fair Values or deteriorated from such expected performance which resulted in accelerated accretion or impairment recognized through the provision for under ASC 310-30, which wereloan losses.
Additional details about loans acquired in connection with our mergers, including our acquisitions of Brand and Metropolitan, is set forth below under the heading “Risk Management - Credit Risk and Allowance for LoanCredit Losses” and in Note 5,4, “Purchased Loans” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data.
Other-Than-Temporary-Impairment on Investment Securities
On a quarterly basis, we evaluate our investment portfolio for other-than-temporary-impairment (“OTTI”) in accordance with ASC 320, “Investments – Debt and Equity Securities.” An investment security is considered impaired if the fair value of the security is less than its cost or amortized cost basis. Impairment is considered to be other-than-temporary if the Company intends to sell the investment security or if the Company does not expect to recover the entire amortized cost basis of the security before the Company is required to sell the security or the security’s maturity. When impairment of an equity security is considered to be other-than-temporary, the security is written down to its fair value and an impairment loss is recorded in earnings. When impairment of a debt security is considered to be other-than-temporary, the security is written down to its fair value. The amount of OTTI recorded as a loss in earnings depends on whether we intend to sell the debt security and whether it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If we intend to sell the debt security or more likely than not will be required to sell the security before recovery of its amortized cost basis, the entire difference between the security’s amortized cost basis and its fair value is recorded as an impairment loss in earnings. If we do not intend to sell the debt security and it is not more likely than not that we will be required to sell the security before recovery of its amortized cost basis, OTTI is separated into the amount representing credit loss and the amount related to all other market factors. The amount related to credit loss is recognized in earnings. The amount related to other market factors is recognized in other comprehensive income, net of applicable taxes.
The amount of OTTI recorded in earnings as a credit loss is dependent upon management’s estimate of discounted future cash flows expected from the investment security. The difference between the expected cash flows and the amortized cost basis of the security is considered to be credit loss. The remaining difference between the fair value and the amortized cost basis of the security is considered to be related to all other market factors. Our estimate of discounted future cash flows incorporates a number of assumptions based on both qualitative and quantitative factors. Performance indicators of the security’s underlying assets, including credit ratings and current and projected default and deferral rates, as well as the credit quality and capital ratios of the issuing institutions are considered in the analysis. Changes in these assumptions could impact the amount of OTTI recognized as a credit loss in earnings. For additional information regarding the evaluation of our securities portfolio for OTTI, please refer to Note 1, “Significant Accounting Policies,” and Note 3, “Securities,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data.
Intangible Assets
Our intangible assets consist primarily of goodwill, core deposit intangibles, and customer relationship intangibles. Goodwill arises from business combinations and represents the value attributable to unidentifiable intangible elements of the business acquired. Other intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. We review the goodwill of each of our reporting units (that is, our reportable segments for financial accounting purposes) for impairment on an annual basis, or more often, if events or circumstances indicate that it is more likely than not that the fair value of the reporting unit is below the carrying value of its equity. In determining the fair value of our reporting units, we use the market approach. The market approach averages the values derived by applying a market multiple, based on observed purchase transactions, to the book value, tangible book value, loan and/or deposit balances and the last twelve months adjusted and unadjusted net income. If the carrying amount of goodwill allocated to each reporting unit exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the excess.
The estimated fair value of a reporting unit is highly sensitive to changes in the estimates and assumptions. In some instances changes in these assumptions could impact whether the fair value of a reporting unit is greater than its carrying value. We perform sensitivity analyses around these assumptions in order to assess the reasonableness of the assumptions and the resulting estimated fair values. If the carrying value of a reporting unit’s equity exceeds its estimated fair value, we then calculate the fair value of the reporting unit’s implied goodwill. Implied goodwill is the excess fair value of a reporting unit (as determined using the above-described methodology) over the fair value of its net assets and is calculated by determining the fair value of the reporting unit’s assets and liabilities, including previously unrecognized intangible assets, on an individual basis. This calculation is performed in the same manner as goodwill is recognized in a business combination. Significant judgment and estimates are involved in estimating the fair value of the assets and liabilities of the reporting unit.


Other identifiable intangible assets, primarily core deposit intangibles and customer relationship intangibles, are reviewed at least annually for events or circumstances which could impact the recoverability of the intangible asset, such as loss of core deposits, increased competition or adverse changes in the economy. To the extent any other identifiable intangible asset is deemed unrecoverable, an impairment loss would be recorded as a noninterest expense to reduce the carrying amount. These events or circumstances, when or if they occur, could be material to our operating results for any particular reporting period.
Benefit Plans and Stock Based Compensation
Our independent actuary firm prepares actuarial valuations of our pension cost under ASC 715, “Compensation – Retirement Benefits” (“ASC 715”). The discount rate utilized in the December 31, 2018 valuation was 4.56%, compared to 3.96% in 2017. Actual plan assets as of December 31, 2018 were used in the calculation and the expected long-term return on plan assets assumed for this valuation was 6.00%. Changes in these assumptions and estimates can materially affect the benefit plan obligation and the funded status of the plan which in turn may impact shareholders’ equity through an adjustment to accumulated other comprehensive income and future pension expense. The pension plan covered under ASC 715 was frozen as of December 31, 1996.
The Company recognizes compensation expense for all share-based payments to employees in accordance with ASC 718, “Compensation – Stock Compensation.” We utilize the Black-Scholes model for determining fair value of our options. Determining the fair value of, and ultimately the expense we recognize related to, our stock options requires us to make assumptions regarding dividend yields, expected stock price volatility, estimated forfeitures and the expected life of the option. Changes in these assumptions and estimates can materially affect the calculated fair value of stock-based compensation and the related expense to be recognized. The fair value of restricted stock awards equals the closing price of our common stock as of the business day immediately preceding the date of the award. The Company has elected to account for forfeitures in compensation cost when they occur as permitted under the guidance in ASC 718. ChangesData, in this assumption in the future could result in lower expenses related to the Company’s share-based payments. For a description of our assumptions utilized in calculating the fair value of our share-based payments, please refer to Note 14, “Employee Benefit and Deferred Compensation Plans,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data.report.
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. All identifiable assets acquired, including loans, are recorded at fair value. No allowance for loan losses related to the purchased loans is recorded on the acquisition date because the fair value measurements incorporate assumptions regarding credit risk. The fair value measurements of purchased loans are based on estimates related to expected prepayments and the amount and timing of undiscounted expected principal, interest and other cash flows.
Over the life of the purchased loans, the Company continues to estimate cash flows expected to be collected on individual loans or on pools of loans sharing common risk characteristics. The Company determines, as of the end of each fiscal quarter, the present value of the purchased loans using the effective interest rates. If the cash flows expected to be collected have decreased, the Company recognizes a provision for loan loss in its consolidated statement of income; for any increases in cash flows expected to be collected, the Company adjusts the amount of accretable yield recognized on a prospective basis over the loan’s or pool’s remaining life.
Mortgage Servicing Rights
The Company recognizes as assets the right to service mortgage loans that it sells to secondary market investors, known as mortgage servicing rights. Mortgage servicing rights are carried at the lower of cost or fair value. Mortgage servicing rights are amortized in proportion to and over the period of estimated servicing income. External valuations of the fair value of mortgage servicing rights are obtained monthly and determined using various assumptions including expected cash flows, prepayment speeds, market discount rates, servicing costs, mortgage interest rates and other factors. These assumptions can, and generally will, change as market conditions and interest rates change resulting in fluctuations of the fair value. The Company does not currently hedge the mortgage servicing rights asset. For additional information regarding our mortgage servicing rights, please refer to Note 10, “Mortgage Servicing Rights,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data.
Other Real Estate Owned
Other real estate owned (“OREO”) consists of properties obtained through foreclosure or acceptance of a deed in lieu of foreclosure in satisfaction of a loan obligation. Other real estate owned is initially recorded at fair market value based on appraised value less selling costs, estimated as of the date acquired, with any loss recognized as a charge-off through the allowance for loan losses. Reductions in the carrying value subsequent to acquisition are charged to earnings. The fair value of OREO is derived primarily


from independent appraisers. Our internal policies generally require OREO properties to be appraised every 12 months. Significant judgments and complex estimates are required in estimating the fair value of OREO, and the period of time within which such estimates can be considered current is significantly shortened during periods of market volatility. As a result, the net proceeds realized from sales transactions could differ significantly from appraisals, comparable sales, and other estimates used to determine the fair value of OREO.
Income Taxes
Accrued taxes represent the estimated amount payable to or receivable from taxing jurisdictions, either currently or in the future, and are reported, on a net basis, as a component of “Other assets” in the Consolidated Balance Sheets. The calculation of our income tax expense is complex and requires the use of many estimates and judgments in its determination.
Management’s determination of the realization of the net deferred tax asset is based upon management’s judgment of various future events and uncertainties, including the statutory tax rate, the timing and amount of future income earned by certain subsidiaries and the implementation of various tax plans to maximize realization of the deferred tax asset. Management believes that the Company and its subsidiaries will generate sufficient operating earnings to realize the deferred tax assets.
For certain business plans enacted by the Company, management bases the estimates of related tax liabilities on its belief that future events will validate management’s current assumptions regarding the ultimate outcome of tax-related exposures. As part of this process, management consults with its outside advisers to assess the relative merits and risks of our proposed tax treatment of such business plans. Although we have received from these outside advisers opinions that our proposed tax treatment should prevail, the examination of our income tax returns, changes in tax law and regulatory guidance may impact the tax treatment of these transactions and resulting provisions for income taxes.
We believe that we employ appropriate methods for these calculations and that the results of such calculations closely approximate the actual cost. We review the calculated results for reasonableness and compare those calculations to prior period costs. We also consider the effect of current economic conditions on the calculations.
For additional information regarding our income tax accounting, please refer to Note 1, “Significant Accounting Policies,” and Note 16, “Income Taxes,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data.


Financial Condition
The following discussion provides details regarding the changes in significant balance sheet accounts at December 31, 20182021 compared to December 31, 2017 and December 31, 2016.
Mergers and Acquisitions
Acquisition of Brand Group Holdings, Inc.
On September 1, 2018, the Company completed its acquisition by merger of Brand Group Holdings, Inc. (“Brand”), the parent company of The Brand Banking Company. At closing, Brand merged with and into the Company, with the Company the surviving corporation in the merger; immediately thereafter, The Brand Banking Company merged with and into Renasant Bank, with Renasant Bank the surviving banking corporation in the merger. The assets acquired and liabilities assumed, as presented in the table below, have been recorded at estimated fair value and are subject to change pending finalization of all valuations.
(in thousands) September 1, 2018
Cash and cash equivalents $193,436
Securities 71,246
Loans including loans held for sale 1,589,254
Premises and equipment 20,070
Intangible assets 349,416
Other assets 112,050
Total assets $2,335,472
   
Deposits $1,714,177
Borrowings 90,912
Other liabilities 55,930
Total liabilities $1,861,019
As part of the merger agreement, Brand agreed to divest the operations of its subsidiary Brand Mortgage Group, LLC (“BMG”), which transaction was completed as of October 31, 2018. As a result, the balance sheet and results of operations of BMG, which the Company considers to be immaterial to the overall results of the Company, are included in the Company's results from September 1, 2018 to October 31, 2018. The following table summarizes the results of operations for BMG included in the Company’s Consolidated Statements of Income for the year ended December 31, 2018:
(in thousands)  
Interest income $357
Interest expense 279
Net interest income 78
Noninterest income 4,043
Noninterest expense 4,398
Net income before taxes $(277)
The Company's financial condition and results of operations include the impact of Brand's operations since the September 1, 2018 acquisition date.
Acquisition of Metropolitan BancGroup, Inc.
Effective July 1, 2017, the Company completed its acquisition of Metropolitan BancGroup, Inc. (“Metropolitan”), the parent company of Metropolitan Bank. At closing, Metropolitan merged with and into the Company, with the Company the surviving corporation in the merger; immediately thereafter, Metropolitan Bank merged with and into Renasant Bank, with Renasant Bank the surviving banking corporation in the merger. The following table summarizes the fair value on July 1, 2017 of assets acquired and liabilities assumed at acquisition date in connection with the merger with Metropolitan.


Cash and cash equivalents $47,556
Securities 108,697
Loans, including mortgage loans held for sale 967,804
Premises and equipment 8,576
Other real estate owned 1,203
Intangible assets 147,478
Other assets 69,567
Total assets $1,350,881
   
Deposits $942,084
Borrowings 174,522
Other liabilities 20,685
Total liabilities $1,137,291
The Company's financial condition and results of operations include the impact of Metropolitan’s operations since the July 1, 2017 acquisition date.
See Note 2, “Mergers and Acquisitions,” in the Notes to Consolidated Financial Statements included in Item 1, “Financial Statements,” for details regarding the Company’s recent mergers and acquisitions.
Assets
2020. Total assets were $12,934,878$16,810,311 at December 31, 20182021 compared to $9,829,981$14,929,612 at December 31, 2017 and $8,699,851 at December 31, 2016. The acquisition of Brand increased total assets $2,335,472 at September 1, 2018, and the acquisition of Metropolitan increased total assets $1,350,881 at July 1, 2017. The increase in total assets from 2016 to 2017 due to the Metropolitan acquisition and organic loan growth was offset by the strategic initiatives to manage total assets to below $10,000,000 at December 31, 2017. The Company sold certain investment securities and shortened the holding period of mortgage loans held for sale and used these proceeds to reduce certain wholesale funding sources. More details regarding these initiatives are provided below.2020.
InvestmentsSecurities
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. The securities portfolio also serves as an outlet to deploy excess liquidity rather than hold such excess funds as cash. The following table shows the carrying value of our securities portfolio by investment type and the percentage of such investment type relative to the entire securities portfolio at December 31:
 20212020
Balance% of
Portfolio
Balance% of
Portfolio
U.S. Treasury securities$3,010 0.11 %$7,079 0.53 %
Obligations of other U.S. Government agencies and corporations— — 1,009 0.08 
Obligations of states and political subdivisions426,751 15.23 305,201 22.72 
Mortgage backed securities2,313,167 82.54 955,549 71.12 
Trust preferred securities— — 9,012 0.67 
Other debt securities59,513 2.12 65,607 4.88 
$2,802,441 100.00 %$1,343,457 100.00 %
Allowance for credit losses - held to maturity securities(32)— 
Securities, net of allowance for credit losses$2,802,409 $1,343,457 
 2018 2017 2016
 Balance 
% of
Portfolio
 Balance 
% of
Portfolio
 Balance 
% of
Portfolio
Obligations of other U.S. Government agencies and corporations$2,511
 0.20% $3,564
 0.53% $16,259
 1.58%
Obligations of states and political subdivisions203,269
 16.25
 234,481
 34.92
 342,181
 33.20
Mortgage-backed securities990,437
 79.19
 406,765
 60.58
 631,556
 61.29
Trust preferred securities10,633
 0.85
 9,388
 1.40
 18,389
 1.78
Other debt securities43,927
 3.51
 17,290
 2.57
 22,145
 2.15
 $1,250,777
 100.00% $671,488
 100.00% $1,030,530
 100.00%
The Brand acquisition in 2018 andDuring 2021, management determined that the Metropolitan acquisition in 2017 contributed approximately $71,246 and $108,697 at each respective acquisition date toCompany held excess liquidity on the balance sheet, so we deployed a portion of our excess liquidity into the securities portfolio.
The overall decreaseportfolio and purchased $2,160,069 in the balance of our securities portfolio from 2016 to 2017 was a result of the Company’s successful implementation of several strategic initiatives, collectively referred to as our “deleveraging strategy,” to manage its consolidated assets below $10,000,000 at December 31, 2017 in order to delay the impact of the Durbin Amendment to the Dodd-Frank Act. Among other things, the Durbin Amendment imposes limitations on the amount of debit card interchange fees banking institutions with more than $10,000,000 in assets as of the end of a fiscal year can charge its customers. The deleveraging strategy involved the sale of certain investment securities, and the shortening of the holding period ofwith mortgage loans held for sale; the proceeds from these sales were used to reduce certain wholesale funding sources. Securities sold during the fourth quarter of 2017 pursuant


to our deleveraging strategy had an aggregate carrying value of $446,880 on the dates of sale. The Company collected net proceeds of $446,971 which resulted in a net gain of $91 on the sales.
During 2018, we purchased $686,887 in investment securities; the majority of these purchases were made as part of the releveraging of the Company’s balance sheet, which was completed in the second quarter of 2018, with the remainder of our purchases being ordinary course purchases of investment securities. Mortgage-backedbacked securities and collateralized mortgage obligations (“CMOs”), in the aggregate, comprised 97.31%comprising approximately 93% of thesuch purchases. CMOs are included in the “Mortgage-backed“Mortgage backed securities” line item in the above table. The mortgage-backedmortgage backed securities and CMOs held in our investment portfolio are issued by government sponsored entities. Obligations of state and political subdivisions made up the remainder of purchases in 2021. Other debt securities in our investment portfolio consist of corporate debt securities and issuances from the Small Business Administration (“SBA”). The carrying value of securities sold during 20182021 totaled $2,403$174,285, resulting in a net lossgain of $16,$2,170, while proceeds from maturities and calls of securities during 20182021 totaled $160,703,$460,266, which were primarily reinvested in the securities portfolio.
During 2017,the year ended December 31, 2021, the Company transferred, at fair value, $366,886 of securities from the available for sale portfolio to the held to maturity portfolio. The related net unrealized after tax gains of $2,048 remained in accumulated other comprehensive income (loss) and will be amortized over the remaining life of the securities, offsetting the related amortization of discount on the transferred securities. No gains or losses were recognized at the time of transfer. There were no held to maturity securities at December 31, 2020.
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During 2020, we purchased $210,190$515,657 in investment securities. Mortgage-backedsecurities, with mortgage backed securities and CMOs, in the aggregate, comprising approximately 73% of such purchases. Obligations of state and political subdivisions comprised 99.05%approximately 23% of the purchases.purchases made in 2020. The carrying value of securities sold during 2017, including the aforementioned sales of securities as part of our deleveraging strategy,2020 totaled $495,192$44,860 resulting in a net gain of $148.$46. Proceeds from maturities and calls of securities during 20172020 totaled $185,327,$437,981, which were primarily used to reduce wholesale funding or reinvested in the securities portfolio.
In the third quarter of 2017, the Company also decided to transfer allThe allowance for credit losses on held to maturity securities which primarily consistedis evaluated on a quarterly basis in accordance with ASC 326. Expected credit losses on debt securities classified as held to maturity are measured on a collective basis by major security type. The estimates of municipal securities, intoexpected credit losses are based on historical default rates, investment grades, current conditions, and reasonable and supportable forecasts about the availablefuture. At December 31, 2021 the allowance for sale portfolio in light of the ongoing fiscal uncertainty in many state and local governments. Although the Company’s analysis of its securities portfolio in third quarter of 2017 showed that its municipal securities had not experienced significant deterioration as of the date of such analysis, the Company transferred allcredit losses on held to maturity securities to available for sale in order to give management the flexibility to quickly liquidate any municipal securities should further analysis review more significant deterioration than had been experienced to date. At the date of transfer, the securities transferred had a carrying value of $365,941, which included an unrealized gain of $13,219.was $32.
At December 31, 2018,2021, unrealized losses of $18,269$31,024 were recorded on available for sale investment securities with a carrying value of $822,506.$1,925,018. At December 31, 2017 and 2016,2020, unrealized losses of $10,488 and $16,065, respectively,$3,215 were recorded on available for sale securities with a carrying value of $373,947 and $494,619, respectively.$85,396. The Company does not intend to sell any of the securities in an unrealized loss position, and it is not more likely than not that the Company will be required to sell any such security prior to the recovery of its amortized cost basis, which may be maturity. Furthermore, even though a number of these securities have been in a continuous unrealized loss position for a period greater than twelve months, the Company is collecting principal and interest payments from the respective securities as scheduled. Accordingly,As such, the Company did not record any other-than-temporary impairment for the years endedDecember 31, 2018, 2017 or 2016.2021 and 2020.
The Company holds investmentsfollowing table sets forth the scheduled maturity distribution and weighted average yield based on the amortized cost of the debt securities in pooled trust preferred securities. Thisour investment portfolio hadas of December 31, 2021.
 AmountYield  
Held to Maturity:
Obligations of states and political subdivisions
 Maturing within one year$530 2.09 %
 Maturing after one year through five years2,064 0.68 %
 Maturing after five years through ten years18,368 1.16 %
 Maturing after ten years246,678 1.79 %
Residential mortgage backed securities not due at a single maturity date:
Government agency MBS60,507 1.35 %
Government agency CMO24,832 1.02 %
Commercial mortgage backed securities not due at a single maturity date:
Government agency MBS1,855 5.96 %
Government agency CMO39,505 1.39 %
Other debt securities not due at a single maturity date22,049 3.04 %
Available for Sale:
U.S. Treasury securities
 Maturing within one year or less3,007 0.92 %
Obligations of states and political subdivisions
 Maturing within one year or less5,516 5.47 %
 Maturing after one year through five years40,253 3.37 %
 Maturing after five years through ten years30,280 3.62 %
 Maturing after ten years77,798 2.13 %
Other debt securities - corporate debt
 Maturing after one year through five years1,529 4.69 %
 Maturing after five years through ten years22,989 4.42 %
Residential mortgage backed securities not due at a single maturity date:
Government agency MBS967,497 1.65 %
Government agency CMO1,008,514 0.95 %
Commercial mortgage backed securities not due at a single maturity date:
Government agency MBS14,717 4.56 %
Government agency CMO216,859 1.45 %
Other debt securities not due at a single maturity date11,997 3.60 %
$2,817,344 1.67 %
In the table above, weighted average yields on tax-exempt obligations have been computed on a costfully tax equivalent basis assuming a federal tax rate of $12,359, $12,442 and $23,74921% and a fair valuestate tax rate of $10,633, $9,3884.45%, which is net of federal tax benefit. These yields were calculated using coupon interest and $18,389 at December 31, 2018, 2017adjusting for discount accretion and 2016, respectively. The investment in pooled trust preferred securities consists of two securities representing interests in various tranches of trusts collateralized by debt issued by over 160 financial institutions. During 2017, the Company sold one of its pooled trust preferred securities with a carrying value of $9,346 at the time of sale for net proceeds of $9,403 resulting in a gain of $57. premium amortization, where applicable.
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For more information about the Company’s trust preferred securities, see Note 3,2, “Securities,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report.
Loans
Loans, excluding loans held for sale, are the Company’s most significant earning asset, comprising 70.22%, 77.52% and 71.30% of total assets at December 31, 2018, 2017 and 2016, respectively. The table below sets forth the balance of loans outstanding by loan type at December 31:
 2018 2017 2016 2015 2014
Commercial, financial, agricultural$1,295,912
 $1,039,393
 $717,490
 $636,837
 $483,283
Lease financing61,865
 54,013
 46,841
 34,815
 10,114
Real estate – construction740,668
 633,389
 552,679
 357,665
 212,061
Real estate – 1-4 family mortgage2,795,343
 2,343,721
 1,878,177
 1,735,323
 1,236,360
Real estate – commercial mortgage4,051,509
 3,427,530
 2,898,895
 2,533,729
 1,956,914
Installment loans to individuals137,832
 122,276
 108,627
 115,093
 89,142
Total loans, net of unearned income$9,083,129
 $7,620,322
 $6,202,709
 $5,413,462
 $3,987,874


The Brand acquisition on September 1, 2018 and the Metropolitan acquisition on July 1, 2017 increased the loan portfolio by $1,331,087 and $965,033, respectively, on the acquisition dates.
The following table presents the percentage of loans, by category, to total loans at December 31 for the last five years:
 2018 2017 2016 2015 2014
Commercial, financial, agricultural14.27% 13.64% 11.57% 11.76% 12.12%
Lease financing0.68
 0.71
 0.75
 0.64
 0.25
Real estate – construction8.15
 8.31
 8.91
 6.61
 5.32
Real estate – 1-4 family mortgage30.78
 30.76
 30.28
 32.06
 31.00
Real estate – commercial mortgage44.60
 44.98
 46.74
 46.80
 49.07
Installment loans to individuals1.52
 1.60
 1.75
 2.13
 2.24
Total100.00% 100.00% 100.00% 100.00% 100.00%
Loan concentrations are considered to exist when there are amounts loaned to a number of borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. At December 31, 2018, there were no concentrations of loans exceeding 10% of total loans other than loans disclosed in the table above.
Non purchased loans at December 31, 2018 were $6,389,712, compared to $5,588,556 at December 31, 2017 and $4,713,572 at December 31, 2016. Since 2016, the Company has experienced organic loan growth across all categories of loans with loans from our specialty commercial business lines, which consist of our asset-based lending, Small Business Administration lending, healthcare, factoring, and equipment lease financing banking groups, contributing $102,251 of the total increase in non purchased loans from December 31, 2017. Our specialty commercial business lines contributed $55,259 of the total increase in non purchased loans from December 31, 2016 to December 31, 2017.
Looking at the change in loans geographically, non purchased loans in our Mississippi, Tennessee and Georgia markets increased by $115,797, $36,400 and $403,942, respectively, while non purchased loans in our Alabama and Florida markets (collectively referred to as our “Central Region”) increased by $245,017 when compared to December 31, 2017.


Loans purchased in previous acquisitions, collectively referred to as “purchased loans,” totaled $2,693,417, $2,031,766 and $1,489,137 at December 31, 2018, 2017 and 2016, respectively. The following tables provide a breakdown of non purchased loans and purchased loans from previous acquisitions as of the dates presented:
 December 31, 2018
 Non Purchased Purchased Total
Loans
Commercial, financial, agricultural$875,649
 $420,263
 $1,295,912
Lease financing61,865
 
 61,865
Real estate – construction:     
Residential214,452
 55,096
 269,548
Commercial421,067
 50,053
 471,120
Condominiums
 
 
Total real estate – construction635,519
 105,149
 740,668
Real estate – 1-4 family mortgage:     
Primary1,221,908
 458,035
 1,679,943
Home equity452,248
 157,245
 609,493
Rental/investment304,309
 57,878
 362,187
Land development109,425
 34,295
 143,720
Total real estate – 1-4 family mortgage2,087,890
 707,453
 2,795,343
Real estate – commercial mortgage:     
Owner-occupied1,052,521
 547,741
 1,600,262
Non-owner occupied1,446,353
 826,506
 2,272,859
Land development129,491
 48,897
 178,388
Total real estate – commercial mortgage2,628,365
 1,423,144
 4,051,509
Installment loans to individuals100,424
 37,408
 137,832
Total loans, net of unearned income$6,389,712
 $2,693,417
 $9,083,129
 December 31, 2017
 Non Purchased Purchased Total
Loans
Commercial, financial, agricultural$763,823
 $275,570
 $1,039,393
Lease financing54,013
 
 54,013
Real estate – construction:     
Residential178,400
 25,041
 203,441
Commercial361,345
 55,734
 417,079
Condominiums7,913
 4,956
 12,869
Total real estate – construction547,658
 85,731
 633,389
Real estate – 1-4 family mortgage:     
Primary924,468
 403,637
 1,328,105
Home equity445,149
 116,990
 562,139
Rental/investment281,662
 72,590
 354,252
Land development78,255
 20,970
 99,225
Total real estate – 1-4 family mortgage1,729,534
 614,187
 2,343,721
Real estate – commercial mortgage:     
Owner-occupied938,444
 436,011
 1,374,455
Non-owner occupied1,319,453
 554,239
 1,873,692
Land development132,179
 47,204
 179,383
Total real estate – commercial mortgage2,390,076
 1,037,454
 3,427,530
Installment loans to individuals103,452
 18,824
 122,276
Total loans, net of unearned income$5,588,556
 $2,031,766
 $7,620,322


 December 31, 2016
 Non Purchased Loans Purchased Loans Total
Loans
Commercial, financial, agricultural$589,290
 $128,200
 $717,490
Lease financing46,841
 
 46,841
Real estate – construction:     
Residential197,029
 19,282
 216,311
Commercial285,638
 49,471
 335,109
Condominiums1,259
 
 1,259
Total real estate – construction483,926
 68,753
 552,679
Real estate – 1-4 family mortgage:     
Primary747,678
 281,721
 1,029,399
Home equity400,448
 86,151
 486,599
Rental/investment219,237
 62,917
 282,154
Land development58,367
 21,658
 80,025
Total real estate – 1-4 family mortgage1,425,730
 452,447
 1,878,177
Real estate – commercial mortgage:     
Owner-occupied833,509
 378,756
 1,212,265
Non-owner occupied1,106,727
 397,404
 1,504,131
Land development134,901
 47,598
 182,499
Total real estate – commercial mortgage2,075,137
 823,758
 2,898,895
Installment loans to individuals92,648
 15,979
 108,627
Total loans, net of unearned income$4,713,572
 $1,489,137
 $6,202,709
Loans secured by real estate represented 83.53%, 84.05%, 85.93%, 85.47% and 85.39% of the Company’s total loan portfolio at December 31, 2018, 2017, 2016, 2015 and 2014, respectively. The following table provides further details of the types of loans in the Company’s loan portfolio secured by real estate at December 31:
 2018 2017 2016 2015 2014
Real estate – construction:         
Residential$269,548
 $203,441
 $216,311
 $168,615
 $93,273
Commercial471,120
 417,079
 335,109
 186,569
 116,263
Condominiums
 12,869
 1,259
 2,481
 2,525
Total real estate – construction740,668
 633,389
 552,679
 357,665
 212,061
Real estate – 1-4 family mortgage:         
Primary1,679,943
 1,328,105
 1,029,399
 1,031,909
 701,735
Home equity609,493
 562,139
 486,599
 382,255
 296,036
Rental/investment362,187
 354,252
 282,154
 251,966
 190,879
Land development143,720
 99,225
 80,025
 69,193
 47,710
Total real estate – 1-4 family mortgage2,795,343
 2,343,721
 1,878,177
 1,735,323
 1,236,360
Real estate – commercial mortgage:         
Owner-occupied1,600,262
 1,374,455
 1,212,265
 1,082,554
 865,361
Non-owner occupied2,272,859
 1,873,692
 1,504,131
 1,272,259
 944,428
Land development178,388
 179,383
 182,499
 178,916
 147,125
Total real estate – commercial mortgage4,051,509
 3,427,530
 2,898,895
 2,533,729
 1,956,914
Total loans secured by real estate$7,587,520
 $6,404,640
 $5,329,751
 $4,626,717
 $3,405,335
Loans Held for Sale
Loans held for sale were $411,427$453,533 at December 31, 20182021 compared to $108,316$417,771 at December 31, 2017 and $177,866 at December 31, 2016. Included in the balance at December 31, 2018 is a portfolio2020. Mortgage loans to be sold, which made up all of non-mortgage consumer loans of approximately $191,578 acquired from Brand. The Company is currently evaluating its long-term plans with respect to this portfolio.


The remaining increase in loans held for sale is attributable to mortgage loans held for sale. The acquisition of Brand added $47,845 to mortgageour loans held for sale at the acquisition date. The Company’s aforementioned strategy to manage consolidated assets below $10,000,000 at December 31, 2017 included shortening the holding period of mortgage loans held for sale, which was the primary driver for the decrease in the balance from 2016 to 2017. At the beginning of 2018, the holding period of mortgage loans held for sale reverted to standard practice, which was the primary reason for the remaining increase in the balance from December 31, 2017.
Mortgage loans to be sold2021, are sold either on a “best efforts” basis or under a “mandatory delivery” sales agreement. Under a “best efforts” sales agreement, residential real estate originations are locked in at a contractual rate with third party private investors or directly with government sponsored entities, and the Company is obligated to sell the mortgages to such investors only if the mortgages are closed and funded. The risk we assume is conditioned upon loan underwriting and market conditions in the national mortgage market. Under a “mandatory delivery” sales agreement, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price and delivery date. Penalties are paid to the investor if we fail to satisfy the contract. Gains and losses are realized at the time consideration is received and all other criteria for sales treatment have been met. These loans are typically sold within 30-40 days after the loan is funded. Although loan fees and some interest income are derived from mortgage loans held for sale, the main source of income is gains from the sale of these loans in the secondary market.
Loans
Loans, excluding loans held for sale, are the Company’s most significant earning asset, comprising 59.61% and 73.23% of total assets at December 31, 2021 and 2020, respectively. The decrease in the percentage of our total earning assets that loans make up from 2020 to 2021 is a result of a material increase in the size of the investment securities portfolio in 2021, while loans also slightly declined from 2020 to 2021. 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.

The tables below set forth the balance of loans outstanding by loan type and the percentage of loans, by category, to total loans at December 31:
 December 31, 2021
 Non PurchasedPurchasedTotal
Loans
Percentage of Total Loans
Commercial, financial, agricultural (1)
$1,332,962 $90,308 $1,423,270 14.20 %
Lease financing, net of unearned discount76,125 — 76,125 0.76 %
Real estate – construction:
Residential300,988 1,287 302,275 3.02 %
Commercial798,914 3,707 802,621 8.01 %
Total real estate – construction1,099,902 4,994 1,104,896 11.03 %
Real estate – 1-4 family mortgage:
Primary1,682,050 134,070 1,816,120 18.12 %
Home equity423,108 51,496 474,604 4.74 %
Rental/investment268,245 20,229 288,474 2.88 %
Land development135,070 9,978 145,048 1.45 %
Total real estate – 1-4 family mortgage2,508,473 215,773 2,724,246 27.19 %
Real estate – commercial mortgage:
Owner-occupied1,329,219 234,132 1,563,351 15.60 %
Non-owner occupied2,446,370 410,577 2,856,947 28.51 %
Land development110,395 18,344 128,739 1.28 %
Total real estate – commercial mortgage3,885,984 663,053 4,549,037 45.39 %
Installment loans to individuals107,565 35,775 143,340 1.43 %
Total loans, net of unearned income$9,011,011 $1,009,903 $10,020,914 100.00 %
(1)Includes PPP loans of $58,391 as of December 31, 2021.

33


 December 31, 2020
 Non PurchasedPurchasedTotal
Loans
Percentage of Total Loans
Commercial, financial, agricultural (1)
$2,360,471 $176,513 $2,536,984 23.20 %
Lease financing75,862 — 75,862 0.69 %
Real estate – construction:
Residential243,814 2,859 246,673 2.26 %
Commercial583,338 28,093 611,431 5.59 %
Total real estate – construction827,152 30,952 858,104 7.85 %
Real estate – 1-4 family mortgage:
Primary1,536,181 214,770 1,750,951 16.02 %
Home equity432,768 80,392 513,160 4.69 %
Rental/investment264,436 31,928 296,364 2.71 %
Land development123,179 14,654 137,833 1.26 %
Total real estate – 1-4 family mortgage2,356,564 341,744 2,698,308 24.68 %
Real estate – commercial mortgage:
Owner-occupied1,334,765 323,041 1,657,806 15.16 %
Non-owner occupied2,194,739 552,728 2,747,467 25.13 %
Land development120,125 29,454 149,579 1.37 %
Total real estate – commercial mortgage3,649,629 905,223 4,554,852 41.66 %
Installment loans to individuals149,862 59,675 209,537 1.92 %
Total loans, net of unearned income$9,419,540 $1,514,107 $10,933,647 100.00 %
(1)Includes PPP loans of $1,128,703 as of December 31, 2020.
Loan concentrations are considered to exist when there are amounts loaned to a number of borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. At December 31, 2021 and 2020, there were no concentrations of loans exceeding 10% of total loans other than loans disclosed in the table above.

34


The following table sets forth loans held for investment, net of unearned income, outstanding at December 31, 2021, which, based on remaining contractually-scheduled repayments of principal, are due in the periods indicated. Loans with balloon payments and longer amortizations are often repriced and extended beyond the initial maturity when credit conditions remain satisfactory. Demand loans, loans having no stated schedule of repayments and no stated maturity, and overdrafts are reported below as due in one year or less. See “Risk Management – Credit Risk and Allowance for Credit Losses” in this Item 7 for information regarding the risk elements applicable to, and a summary of our loan loss experience with respect to, the loans in each of the categories listed below.
One Year or Less After One Year
Through Five Years
After Five Years Through Fifteen YearsAfter Fifteen YearsTotal
Commercial, financial, agricultural (1)
$808,617 $497,453 $116,890 $310 $1,423,270 
Lease financing, net of unearned income1,856 46,845 27,424 — 76,125 
Real estate – construction:
Residential238,009 12,131 42,608 9,527 302,275 
Commercial382,935 361,256 58,430 — 802,621 
Total real estate – construction620,944 373,387 101,038 9,527 1,104,896 
Real estate – 1-4 family mortgage:
Primary214,471 355,825 905,189 340,635 1,816,120 
Home equity452,005 13,447 4,467 4,685 474,604 
Rental/investment61,728 196,758 29,833 155 288,474 
Land development108,547 35,179 1,322 — 145,048 
Total real estate – 1-4 family mortgage836,751 601,209 940,811 345,475 2,724,246 
Real estate – commercial mortgage:
Owner-occupied351,908 761,202 442,794 7,447 1,563,351 
Non-owner occupied1,188,727 1,270,431 397,733 56 2,856,947 
Land development51,158 73,193 4,388 — 128,739 
Total real estate – commercial mortgage1,591,793 2,104,826 844,915 7,503 4,549,037 
Installment loans to individuals35,826 63,094 43,212 1,208 143,340 
Total loans, net of unearned income$3,895,787 $3,686,814 $2,074,290 $364,023 $10,020,914 
(1)Includes PPP loans of $58,391 as of December 31, 2021.

35


The following table sets forth the fixed and variable rate loans maturing or scheduled to reprice after one year as of December 31, 2021:
 Interest Sensitivity
 Fixed
Rate
Variable
Rate
Commercial, financial, agricultural$445,052 $169,601 
Lease financing, net of unearned income74,269 — 
Real estate – construction:
Residential20,869 43,397 
Commercial174,787 244,899 
Total real estate – construction195,656 288,296 
Real estate – 1-4 family mortgage:
Primary657,603 944,046 
Home equity6,056 16,543 
Rental/investment216,030 10,716 
Land development32,205 4,296 
Total real estate – 1-4 family mortgage911,894 975,601 
Real estate – commercial mortgage:
Owner-occupied1,089,096 122,347 
Non-owner occupied1,394,220 274,000 
Land development69,385 8,196 
Total real estate – commercial mortgage2,552,701 404,543 
Installment loans to individuals103,602 3,912 
Total loans, net of unearned income$4,283,174 $1,841,953 
Deposits
Noninterest-Bearing Deposits to Total Deposits  
20212020
33.93%30.56%
Noninterest-Bearing Deposits to Total Deposits  
2018 2017 2016
22.89% 23.23% 22.12%


The Company relies on deposits as its major source of funds. Total deposits were $10,128,557, $7,921,075$13,905,724 and $7,059,137$12,059,081 at December 31, 2018, 20172021 and 2016,2020, respectively. Noninterest-bearing deposits were $2,318,706, $1,840,424$4,718,124 and $1,561,357$3,685,048 at December 31, 2018, 20172021 and 2016,2020, respectively, while interest-bearing deposits were $7,809,851, $6,080,651$9,187,600 and $5,497,780$8,374,033 at December 31, 2018, 20172021 and 2016,2020, respectively.
The increasegrowth in noninterest-bearing deposits across the Company’s footprint in 20182021 was primarily attributabledriven by client sentiment to organic growth across our footprint, as discussed below, and the acquisition of Brand, which increased total deposits by $1,714,177 at the acquisition date, which consisted of $429,195 and $1,284,982 of noninterest-bearing and interest-bearing deposits, respectively. The increase in deposits in 2017 was partly due to the acquisition of Metropolitan, which increased total deposits by $942,084 at the acquisition date. This consisted of noninterest-bearing deposits of $267,479 and interest-bearing deposits of $674,605.maintain liquidity. Management continues to focus on growing and maintaining a stable source of funding, specifically noninterest-bearing deposits and other core deposits.deposits (that is, deposits excluding time deposits greater than $250,000). Noninterest-bearing deposits increased to 33.93% of total deposits at December 31, 2021, as compared to 30.56% of total deposits at December 31, 2020. Under certain circumstances, however, management may elect to acquire non-core deposits in(in the form of time deposits) or public fund deposits (which are deposits of counties, municipalities or time deposits.other political subdivisions). The source of funds that we select depends on the terms and how those terms assist us in mitigating interest rate risk, maintaining our liquidity position and managing our net interest margin. Accordingly, funds are only acquired when neededto meet anticipated funding needs at the rate and at awith other terms that, in management’s view, best address our interest rate that is prudent under the circumstances.risk, liquidity and net interest margin parameters.
Public fund deposits are those of counties, municipalities or other political subdivisions and may be readily obtained based on the Company’s pricing bid in comparison with competitors. Since publicPublic fund deposits are obtained through a bid process, these deposit balances may fluctuate as competitive and market forces change. Thechange because these deposits are obtained through a bid process. Although the Company has focused on growing stable sources of deposits to reduce reliance on public fund deposits. However, the Company continues to participatedeposits, it
36


participates in the bidding process for public fund deposits when pricing and other terms make it is reasonable undergiven market conditions or when management perceives that other factors, such as the circumstances.public entity’s use of our treasury management or other products and services, make such participation advisable. Our public fund transaction accounts are principally obtained from public universities and municipalities, including school boards and utilities. Public fund deposits at December 31, 20182021 were $1,271,139$1,787,414 compared to $1,000,324$1,398,330 at December 31, 20172020.
Deposits that are in excess of the FDIC insurance limit (or similar state deposit insurance limits) and $894,321that are otherwise uninsured were $4,353,952 and $3,348,376 at December 31, 2016.
Looking2021 and 2020, respectively. The following table shows the maturity of time deposits at the change in deposits geographically, and excluding deposits assumed in connection with the Brand acquisition, deposits increased $206,866, $82,669 and $101,235 in our Mississippi, Central Region and Georgia markets, respectively, while deposits decreased $6 in our Tennessee markets when compared to December 31, 2017.2021 that are in excess of the FDIC insurance limit (or similar state deposit insurance limits) and that are otherwise uninsured:
Three Months or Less$89,698 
Over Three through Six Months71,863 
Over Six through Twelve Months94,606 
Over 12 Months58,159 
$314,326 

Borrowed Funds

Total borrowings include federal funds purchased, securities sold under agreements to repurchase, advances from the FHLB,Federal Home Loan Bank (“FHLB”), subordinated notes and junior subordinated debentures. Borrowingsdebentures and are classified on the Consolidated Balance Sheets as either short-term borrowings or long-term debt. Short-term borrowings have original maturities less than one year and typically include federal funds purchased, securities sold under agreements to repurchase, federal funds purchased and short-term FHLB advances. There was $387,706 ofThe following table presents our short-term borrowings on the balance sheetby type at December 31, 2018, consisting of security repurchase agreements of $7,706 and short-term borrowings from the FHLB of $380,000 compared to security repurchase agreements of $6,814 and short-term borrowings from the FHLB of $83,000 at December 31, 2017 and security repurchase agreement of $9,676 and short-term borrowings from the FHLB of $100,000 at31:


December 31, 2016. In connection with the Company's aforementioned deleveraging strategy implemented during the fourth quarter of 2017, the Company used the proceeds from the sale of investment securities and the shortening of the holding period of mortgage loans held for sale to pay down short-term borrowings from the FHLB.
20212020
Security repurchase agreements$13,947 $10,947 
Federal funds purchased— 10,393 
$13,947 $21,340 
At December 31, 2018,2021, long-term debt totaled $263,618 compared to $207,546consists of long-term FHLB advances, our junior subordinated debentures and our subordinated notes. The following table presents our long-term debt by type at December 31, 2017 and $202,459 at December 31, 2016. Funds31:
20212020
Federal Home Loan Bank advances$417 $152,167 
Junior subordinated debentures111,373 110,794 
Subordinated notes359,419 212,009 
Total long-term debt$471,209 $474,970 
Long-term FHLB borrowings are borrowed from the FHLB primarilyused to match-fund against certain loans, negating interest rate exposure when rates rise. Such match-funded loans are typically large, fixed rate commercial or real estate loans with long-term maturities. Long-termmaturities, which helps mitigate interest rate exposure when rates rise. During 2021, we used the proceeds of our deposit growth and other sources of liquidity to substantially reduce our long-term FHLB advances were $6,690, $7,493 and $8,542 at December 31, 2018, December 31, 2017 and December 31, 2016, respectively.borrowings. At December 31, 2018, there were $1,759 in2021, all of our long-term FHLB advances outstanding are scheduled to mature within twelve months or less. The Company had $3,301,543$4,214,274 of availability on unused lines of credit with the FHLB at December 31, 20182021 compared to $2,670,141$3,784,520 at December 31, 2017 and $2,633,5432020. The weighted-average interest rates on outstanding advances at December 31, 2016.2021 and 2020 were 1.86% and 0.05%, respectively.
On November 23, 2021, the Company completed the public offering and sale of $200,000 of its 3.00% fixed-to-floating rate subordinated notes due December 1, 2031. The average costsubordinated notes were sold at par, resulting in net proceeds, after deducting underwriting discounts and offering expenses, of our long-term FHLB advances was 3.29%, 3.40%approximately $197,000. The Company intends to use the net proceeds from this offering for general corporate purposes, which may include providing capital to support the Company’s organic growth or growth through strategic acquisitions, repaying indebtedness, financing investments, capital expenditures or for investments in Renasant Bank as regulatory capital.
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During October and 4.02%December 2021, respectively, the Company redeemed at par its $15,000 6.50% fixed-to-floating rate subordinated notes and redeemed $30,000 of its aggregate $60,000 5.00% fixed-to-floating rate subordinated notes, with the remaining $30,000 of such notes to be redeemed in the first quarter of 2022.
The Company owns other subordinated notes, the proceeds of which have been used for 2018, 2017, and 2016, respectively.general corporate purposes similar to those described above. The subordinated notes qualify as Tier 2 capital under the current regulatory guidelines.
The Company owns the outstanding common securities of business trusts that issued corporation-obligated mandatorily redeemable preferred capital securities to third-party investors. The trusts used the proceeds from the issuance of their preferred capital securities and common securities (collectively referred to as “capital securities”) to buy floating rate junior subordinated debentures issued by the Company (or by companies that the Company subsequently acquired). The debentures are the trusts’ only assets and interest payments from the debentures finance the distributions paid on the capital securities. The Company’s junior subordinated debentures totaled $109,636 at December 31, 2018 compared to $85,881 at December 31, 2017 and $95,643 at December 31, 2016. The Company assumed $23,198 of junior subordinated debentures as a result of the acquisition of Brand. During the first quarter of 2017, the Company prepaid $10,310 of junior subordinated debentures and incurred a prepayment penalty of $205.
During 2016, the Company completed an underwritten public offering and sale of $60,000 of its 5.00% fixed-to-floating rate subordinated notes due September 1, 2026, and $40,000 of its 5.50% fixed-to-floating rate subordinated notes due September 1, 2031. As part of the Brand acquisition, the Company assumed $30,000 of 8.50% fixed rate subordinated notes due June 27, 2024, and as part of the Metropolitan acquisition, the Company assumed $15,000 of 6.50% fixed-to-floating rate subordinated notes due July 1, 2026 (collectively, the “Notes”). The Notes, net of unamortized debt issuance costs, totaled $147,239 at December 31, 2018 compared to $114,074 at December 31, 2017 and $98,127 at December 31, 2016. The Company has used, and intends to continue to use, the net proceeds from the Notes offerings for general corporate purposes, which may include providing capital to support the Company's growth organically or through strategic acquisitions, repaying indebtedness and financing investments and capital expenditures, and for investments in the Bank as regulatory capital. The Notes qualify as Tier 2 capital under the current regulatory guidelines.
For more information about the terms and conditions of the Company’s junior subordinated debentures and Notes,subordinated notes, see Note 13,12, “Long-Term Debt,” in the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report.


Results of Operations
Net Income
Net income for the year ended December 31, 20182021 was $146,920$175,892 compared to net income of $92,188$83,651 for the year ended December 31, 2017 and $90,930 for the year ended December 31, 2016.2020. Basic earnings per share for the year ended December 31, 20182021 was $2.80$3.13 as compared to $1.97 and $2.18$1.49 for the yearsyear ended December 31, 2017 and 2016, respectively.2020. Diluted earnings per share for the year ended December 31, 20182021 was $2.79$3.12 as compared to $1.96 and $2.17$1.48 for each of the yearsyear ended December 31, 2017 and 2016, respectively.2020.
TheFrom time to time, the Company incurredincurs expenses and charges in connection with certain transactions with respect to which management is unable to accurately predict when these expenses or charges will be incurred or, when incurred, the amount of such expenses or charges. The following table presents the impact of these expenses and charges on reported earnings per shareEPS for the periods presented:dates presented. The “COVID-19 related expenses” line item in the table below primarily consists of (a) employee overtime and employee benefit accruals directly related to the Company’s response to both the COVID-19 pandemic itself and federal legislation enacted to address the pandemic, such as the CARES Act, and (b) expenses associated with supplying branches with protective equipment, sanitation supplies (such as floor markings and cautionary signage for branches, face coverings and hand sanitizer) and more frequent and rigorous branch cleaning. The mortgage servicing rights (“MSR”) valuation adjustment and swap termination gains are discussed below under the “Noninterest Income” heading, and the debt prepayment penalty and restructuring charges are discussed below under the “Noninterest Expense” heading in this Item.


 Twelve Months Ended December 31,
 2018 2017 2016
 Pre-taxAfter-taxImpact to Diluted EPS Pre-taxAfter-taxImpact to Diluted EPS Pre-taxAfter-taxImpact to Diluted EPS
Merger and Conversion expenses$14,246
$11,095
$0.21
 $10,378
$6,925
$0.15
 $4,023
$2,694
$0.06
Revaluation of net deferred tax assets


 
14,486
0.31
 


Debt prepayment penalty


 205
137

 2,539
1,700
0.04
Loss share termination


 


 2,053
1,495
0.04
Twelve Months Ended December 31,
 20212020
Pre-taxAfter-taxImpact to Diluted EPSPre-taxAfter-taxImpact to Diluted EPS
MSR valuation adjustment$(13,561)$(10,522)$(0.19)$11,726 $9,450 $0.17 
Swap termination gains(4,676)(3,628)(0.06)— — — 
COVID-19 related expenses1,511 1,172 0.02 10,343 8,336 0.14 
Restructuring charges368 286 0.01 7,365 5,936 0.11 
Swap termination charges— — — 2,040 1,644 0.03 
Debt prepayment penalty6,123 4,751 0.08 121 97 — 
Note: Balances in the table above are shown to reflect impact to income if removed (i.e. negative balances for income items and positive balances for expense items).
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 73.65%65.49% of total net revenue in 2018.2021. Total net revenue consists of net interest income on a fully taxable equivalent basis and noninterest income. The primary concerns in managing net interest income are the volume, mix and repricing of assets and liabilities.
38


Net interest income increased 17.70%decreased 0.66% to $396,525$424,001 for 20182021 compared to $336,897$426,797 in 2017 and $300,991 in 2016.2020. On a tax equivalent basis, net interest income increased $56,683decreased $2,962 to $402,426$430,720 in 20182021 as compared to $345,743 and $308,002$433,682 in 2017 and 2016, respectively.2020. Net interest margin was 4.16%3.07% for each of 2018 and 20172021 as compared to 4.22%3.44% for 2016.2020.
The following table sets forth the daily average balance sheet data, including all major categories of interest-earning assets and interest-bearing liabilities, together with the interest earned or interest paid and the average yield or average rate on each such category for the years ended December 31, 2021, 2020 and 2019:

202120202019
 Average
Balance
Interest
Income/
Expense
Yield/  
 Rate
Average
Balance
Interest
Income/
Expense
Yield/  
 Rate
Average
Balance
Interest
Income/
Expense
Yield/  
 Rate
Assets
Interest-earning assets:
Loans(1)
$10,310,070 $427,296 4.15 %$10,593,556 $458,686 4.33 %$9,168,555 $487,240 5.31 %
Loans held for sale454,727 12,632 2.78 %361,391 12,191 3.37 %358,735 18,171 5.07 %
Securities:
Taxable(2)
1,691,531 24,370 1.44 %1,021,999 24,102 2.36 %1,051,124 29,786 2.83 %
Tax-exempt335,399 9,418 2.81 %259,705 8,848 3.41 %193,252 7,821 4.05 %
Total securities2,026,930 33,788 1.67 %1,281,704 32,950 2.57 %1,244,376 37,607 3.02 %
Interest-bearing balances with banks1,263,364 1,688 0.13 %385,810 1,190 0.31 %256,374 5,891 2.30 %
Total interest-earning assets14,055,091 475,404 3.38 %12,622,461 505,017 4.00 %11,028,040 548,909 4.98 %
Cash and due from banks199,705 201,815 179,991 
Intangible assets966,733 973,287 976,065 
Other assets684,457 705,886 691,890 
Total assets$15,905,986 $14,503,449 $12,875,986 
Liabilities and shareholders’ equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand(3)
$6,177,944 $15,308 0.25 %$5,277,374 $23,995 0.45 %$4,754,201 $40,991 0.86 %
Savings deposits976,616 698 0.07 %764,146 758 0.10 %647,271 1,258 0.19 %
Time deposits1,539,763 12,970 0.84 %1,952,213 29,263 1.50 %2,320,775 39,746 1.71 %
Total interest-bearing deposits8,694,323 28,976 0.33 %7,993,733 54,016 0.68 %7,722,247 81,995 1.06 %
Borrowed funds470,993 15,708 3.34 %765,769 17,319 2.26 %405,975 16,928 4.17 %
Total interest-bearing liabilities9,165,316 44,684 0.49 %8,759,502 71,335 0.81 %8,128,222 98,923 1.22 %
Noninterest-bearing deposits4,310,834 3,391,619 2,463,436 
Other liabilities220,427 237,738 176,496 
Shareholders’ equity2,209,409 2,114,590 2,107,832 
Total liabilities and shareholders’ equity$15,905,986 $14,503,449 $12,875,986 
Net interest income/ net interest margin$430,720 3.07 %$433,682 3.44 %$449,986 4.08 %
(1)Shown net of unearned income.
(2)U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which we operate.
(3)Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.

The daily average balances of nonaccruing assets are included in the foregoing table. Interest income and weighted average yields on tax-exempt loans and securities have been computed on a fully tax equivalent basis assuming a federal tax rate of 21% and a state tax rate of 4.45%, which is net of federal tax benefit.
Net interest income and net interest margin are influenced by internal and external factors. Internal factors include balance sheet changes on bothin 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. As discussed in more detail below, the decline in loan yields due to the current low interest rate environment as well as changes in the mix of earning assets during the year due to increased liquidity on the balance sheet were the largest contributing factors to the decrease in net interest margin. The Company has continued to focus on lowering the cost of funding through growing noninterest-bearing deposits and
39


aggressively lowering interest rates on interest-bearing deposits. The Company has also increased its purchases of investment securities and continues to evaluate options to mitigate the pressure on net interest margin.
The following table sets forth a summary of the changes in interest earned, on a tax equivalent basis, and interest paid resulting from changes in volume and rates for the Company for the years 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). The changes attributable to the combined impact of yield/rate and volume have been allocated on a pro-rata basis using the absolute ratio value of amounts calculated.
 2021 Compared to 20202020 Compared to 2019
 Volume   Rate           Net  Volume   Rate          Net 
Interest income:
Loans$(17,322)$(14,068)$(31,390)$42,331 $(70,885)$(28,554)
Loans held for sale2,802 (2,361)441 134 (6,114)(5,980)
Securities:
Taxable11,853 (11,585)268 (806)(4,878)(5,684)
Tax-exempt2,296 (1,726)570 2,398 (1,371)1,027 
Interest-bearing balances with banks1,479 (981)498 2,026 (6,727)(4,701)
Total interest-earning assets1,108 (30,721)(29,613)46,083 (89,975)(43,892)
Interest expense:
Interest-bearing demand deposits3,586 (12,273)(8,687)4,108 (21,104)(16,996)
Savings deposits181 (241)(60)197 (697)(500)
Time deposits(5,305)(10,988)(16,293)(5,871)(4,612)(10,483)
Borrowed funds(8,092)6,481 (1,611)10,475 (10,084)391 
Total interest-bearing liabilities(9,630)(17,021)(26,651)8,909 (36,497)(27,588)
Change in net interest income$10,738 $(13,700)$(2,962)$37,174 $(53,478)$(16,304)
The daily average balances of nonaccruing assets are included in the foregoing table. Interest income and weighted average yields on tax-exempt loans and securities have been computed on a fully tax equivalent basis assuming a federal tax rate of 21% and a state tax rate of 4.45%, which is net of federal tax benefit.
Interest income, on a tax equivalent basis, was $467,755$475,404 for 20182021 compared to $383,596$505,017 for 2017, an increase2020, a decrease of $84,159. Interest income, on a tax equivalent basis, was $336,149 for 2016.$29,613. The following table presents the percentage of total average earning assets, by type and yield, for 2018, 20172021 and 2016:2020:
Percentage of TotalYield
Percentage of Total Yield 2021202020212020
2018 2017 2016 2018 2017 2016
Loans84.67% 82.59% 80.81% 5.12% 4.97% 5.01%
Loans held for investment excluding PPP loansLoans held for investment excluding PPP loans70.16 %77.13 %4.08 %4.47 %
Paycheck Protection Program loansPaycheck Protection Program loans3.19 6.80 5.52 2.75 
Loans held for sale2.80
 2.10
 3.25
 4.77
 4.28
 3.58
Loans held for sale3.24 2.86 2.78 3.37 
Securities10.99
 12.96
 14.71
 3.10
 3.09
 2.97
Securities14.42 10.15 1.67 2.57 
Other1.54
 2.35
 1.23
 2.07
 1.19
 0.51
Interest-bearing balances with banksInterest-bearing balances with banks8.99 3.06 0.13 0.31 
Total earning assets100.00% 100.00% 100.00% 4.84% 4.62% 4.61%Total earning assets100.00 %100.00 %3.38 %4.00 %
In 2018, loan2021, interest income on loans held for investment, on a tax equivalent basis, increased $78,275decreased $31,390 to $418,842$427,296 from $340,567$458,686 in 2017. Loan2020. Interest income on a tax equivalent basis, was $295,333 in 2016. The following table presents reported taxable equivalent yield on loans held for the periods presented:
 Twelve months ended December 31,
 2018 2017 2016
Taxable equivalent interest income on loans, as reported$418,842
 $340,567
 $295,333
      
Average loans$8,181,587
 $6,855,802
 $5,895,972
      
Taxable equivalent loan yield, as reported5.12% 4.97% 5.01%
The increase in loan income since 2016 is driven by an increase in the average balance of loans as a result of the Brand and Metropolitan acquisitions and organic loan growth in the Company's non purchased loan portfolio as well as an increase in the yield on loansinvestment decreased primarily due to replacing maturing loans with loans earning similar or higher rates of interest. The Company's yield on loans that earn a variable rate of interest has also benefited from the Federal Reserve Board's increasemaintaining low interest rates since March 2020. Interest income attributable to PPP loans included in loan interest income for 2021 was $24,794, which consisted of $4,380 in interest income and $20,414 in accretion of net origination fees, as compared to $23,605 for 2020, which consisted of $8,729 in interest income and $14,876 in accretion of net origination fees. The PPP origination fees, net of agent fees paid and other origination costs, are being accreted into interest income over the life of the loan. When a PPP loan is forgiven in whole or in part, as provided under the CARES Act, the Company recognizes the non-accreted portion of the net origination fee attributable to the target federal funds rate onforgiven portion of such loan as of the date of the final forgiveness determination. PPP loans increased margin and loan yield eight separate occasions since December 2016.and six basis points, respectively, during 2021, and reduced margin and loan yield five and 13 basis points, respectively, during 2020.

40



The impact from interest income collected on problem loans and purchase accounting adjustments on purchased loans to total interest income on loans, loan yield and net interest margin is shown in the table below for the periods presented:
Twelve months ended December 31,
 20212020
Net interest income collected on problem loans$4,412 $1,011 
Accretable yield recognized on purchased loans(1)
10,783 19,248 
Total impact to interest income on loans$15,195 $20,259 
Impact to total loan yield0.15 %0.18 %
Impact to net interest margin0.11 %0.16 %
 Twelve months ended December 31,
 2018 2017 2016
Net interest income collected on problem loans$2,861
 $8,807
 $4,581
Accretable yield recognized on purchased loans(1)
24,333
 23,151
 29,436
Total impact to interest income on loans$27,194
 $31,958
 $34,017
      
Impact to loan yield0.33% 0.47% 0.58%
Impact to net interest margin0.28% 0.38% 0.46%
(1)Includes additional interest income recognized in connection with the acceleration of paydowns and payoffs from purchased loans of $5,293 and $8,077 for the twelve months ended December 31, 2021 and 2020, respectively, which increased loan yield by 4 basis points and 7 basis points, respectively, for 2021 and 2020.
(1)Includes additional interest income recognized in connection with the acceleration of paydowns and payoffs from purchased loans of $12,339, $10,932 and $14,555 for the twelve months ended December 31, 2018, 2017 and 2016, respectively, which increased loan yield by 15 basis points, 16 basis points and 25 basis points for the same periods, respectively.
Interest income on loans held for sale, on a tax equivalent basis, increased $441 to $12,632 in 2021 from $12,191 in 2020.
In 2018,2021, investment income, on a tax equivalent basis, decreased $301increased $838 to $32,945$33,788 from $33,246$32,950 in 2017. Investment income, on a tax equivalent basis, was $31,860 in 2016.2020. The following table presents the taxable equivalent yield on securities for the periods presented:
Twelve months ended December 31,
 20212020
Taxable equivalent interest income on securities$33,788 $32,950 
Average securities$2,026,930 $1,281,704 
Taxable equivalent yield on securities1.67 %2.57 %
 Twelve months ended December 31,
 2018 2017 2016
Taxable equivalent interest income on securities$32,945
 $33,246
 $31,860
      
Average securities$1,061,882
 $1,075,987
 $1,073,611
      
Taxable equivalent yield on securities3.10% 3.09% 2.97%
The average balance in the investment portfolio was down for the year ended December 31, 2018 as compared to the same period in 2017 resulting in the decline in interest income. The decrease in the average balance of the investment portfolio was due to the pace at which we repurchased investment securities following the deleveraging strategy implemented by the Company in the fourth quarter of 2017. However, our ability to repurchase investments with higher yields as we releveraged the balance sheet coupled with rising interest rates and changes in the investment portfolio allocation resulted in an increase to the taxable equivalent yield on securities during 2021 was offset by security purchases during the year as the Company deployed a portion of its excess liquidity into the securities portfolio. The growth in 2018 when comparedthe securities portfolio during 2021 led to 2017 and 2016.the growth in investment income, on a tax equivalent basis.
Interest expense was $65,329$44,684 in 20182021 compared to $37,853 and $28,147$71,335 in 2017 and 2016, respectively.2020. 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 Percentage of TotalCost of Funds
2018 2017 2016 2018 2017 2016 2021202020212020
Noninterest-bearing demand21.88% 21.46% 20.40% % % %Noninterest-bearing demand32.00 %27.91 %— %— %
Interest-bearing demand45.62
 44.91
 42.96
 0.56
 0.26
 0.19
Interest-bearing demand45.84 43.43 0.25 0.45 
Savings6.41
 7.06
 7.30
 0.15
 0.07
 0.07
Savings7.25 6.29 0.07 0.10 
Time deposits21.92
 21.35
 22.06
 1.24
 0.85
 0.73
Time deposits11.42 16.07 0.84 1.50 
Short-term borrowings1.67
 2.71
 4.96
 2.10
 1.22
 0.45
Short-term borrowings0.10 2.94 0.29 1.07 
Long-term Federal Home Loan Bank advances0.08
 0.10
 0.50
 3.29
 3.40
 4.02
Long-term Federal Home Loan Bank advances0.92 1.25 0.07 0.61 
Subordinated notes1.35
 1.32
 0.49
 5.54
 5.59
 5.45
Subordinated notes1.65 1.20 4.86 5.28 
Other long-term borrowed funds1.07
 1.09
 1.33
 5.11
 5.01
 5.56
Other long-term borrowed funds0.82 0.91 4.30 4.40 
Total deposits and borrowed funds100.00% 100.00% 100.00% 0.70% 0.47% 0.39%Total deposits and borrowed funds100.00 %100.00 %0.33 %0.59 %
Interest expense on deposits was $49,760, $24,620$28,976 and $17,856$54,016 for 2018, 20172021 and 2016,2020, respectively. The cost of total deposits was 0.56%, 0.32%,0.22% and 0.27%0.47% for the years ending December 31, 2018, 2017,2021 and 2016,2020, respectively. The cost of interest-bearing deposits was 0.72%, 0.42%0.33% and 0.34%0.68% for the same respective periods. The increasedecrease in both deposit expense and cost is attributable to both the increaseCompany’s efforts to reduce deposit rates as they reprice in the average balance of all interest-bearing deposits resulting from the Metropolitan and Brand acquisitions and organic deposit growth as well as an increase in thecurrent low interest rates on interest-bearing deposits. Althoughrate environment. During 2021, the Company continuescontinued its efforts to seek changesgrow noninterest-bearing deposits, with the growth in noninterest-bearing deposits during the mix of its deposits from higher costing time deposits to lower costing interest-bearing deposits and noninterest-


bearing deposits, rates offered on the Company’s interest-bearing deposit accounts, including time deposits, have increased to match competitive market interest rates in orderyear primarily driven by client sentiment to maintain stable sourcesliquidity. Low cost deposits continue to be the preferred choice of funding.funding; however, the Company may rely on wholesale borrowings when rates are advantageous.
41


Interest expense on total borrowings was $15,569, $13,233$15,708 and $10,291$17,319 for the years ending December 31, 2018, 20172021 and 2016,2020, respectively, while the cost of total borrowings was 4.01%, 3.16%3.34% and 1.96%2.26% for the years ended December 31, 2018, 20172021 and 2016,2020, respectively. The decrease in interest expense is a result of lower average borrowings. As previously mentioned, the Company also issued higher costing$200,000 of its fixed-to-floating rate subordinated notes in 2016, assumedduring the year and redeemed certain tranches of subordinated notes in its acquisitions of Metropolitan and Brand and assumed junior subordinated debentures in its acquisition of Brand, increasing the average balance of borrowings from 2016. Additional interest expense from these issued and assumed notes, coupled with higher interest rates charged on our short-term FHLB advances, resulted in the increase to interest expense and cost of total borrowings from 2016.notes.
A more detailed discussion of the cost of our funding sources is set forth below under the heading “Liquidity and Capital Resources” in this item. Additionally, forFor more information about our outstanding subordinated notes and junior subordinated debentures, see Note 13,12, “Long-Term Debt,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data.Data, in this report.
Noninterest Income
Noninterest Income to Average Assets Noninterest Income to Average Assets Noninterest Income to Average Assets
(Excludes securities gains/losses)(Excludes securities gains/losses)(Excludes securities gains/losses)
2018 2017 2016
1.30% 1.39% 1.62%
202120212020
1.41%1.41%1.62%
Total noninterest income includes fees generated from deposit services and other fees and commissions, income from our insurance, wealth management and mortgage banking operations, realized gains on the sale of securities and all other noninterest income. Our focus is to develop and enhance our products that generate noninterest income in order to diversify our revenue sources. Noninterest income as a percentage of total net revenuesrevenue was 26.35%, 27.65%34.51% and 30.85%35.20% for 2018, 20172021 and 2016.
2020, respectively. Noninterest income was $143,961$226,984 for the year ended December 31, 2018, an increase2021, a decrease of $11,821,$8,548, or 8.95%3.63%, as compared to $132,140$235,532 for 2017. Noninterest income was $137,415 for2020. The decrease during the year ended December 31, 2016. The increase in noninterest income was primarily driven by the additionallower mortgage banking production offset by increases in service charges and fees and commissions, as well as income associated with the acquisitionfrom other lines of Metropolitan’s operations and, to a lesser extent, Brand’s operations.business as more fully-explained below.
Service charges on deposit accounts include maintenance fees on accounts, per item charges, account enhancement charges for additional packaged benefits and overdraft fees. Service charges on deposit accounts were $34,660, $33,224$36,569 and $31,875$31,326 for the twelve months ended December 31, 2018, 20172021 and 2016,2020, respectively. Overdraft fees, the largest component of service charges on deposits, were $24,105increased to $19,140 for the twelve months ended December 31, 20182021 compared to $23,463 and $22,869$18,597 for the same period in 2017 and 2016, respectively.2020.
Fees and commissions increased to $23,868$15,732 in 20182021 as compared to $21,934 and $18,814 for the same period$13,043 in 2017 and 2016, respectively.2020. 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 $20,390$10,405 for the twelve months ended December 31, 20182021 compared to $18,149 and $16,182$8,979 for the same period in 2017 and 2016, respectively. Because our total assets exceeded $10,000,000 at December 31, 2018, beginning on July 1, 2019, we will become subject to the limitations on interchange fees imposed pursuant to §1075 of the Dodd-Frank Act (this provision, which is commonly referred to as the “Durbin Amendment,” is discussed in more detail under the heading “Supervision and Regulation” in Item 1, Business.) Management continues to examine this issue and develop strategies to offset the impact of the Durbin Amendment.2020.
Through Renasant Insurance, we offer a range of commercial and personal insurance products through major insurance carriers. Income earned on insurance products was $8,590, $8,361$9,841 and $8,508$8,990 for the years ended December 31, 2018, 20172021 and 2016,2020, respectively. Contingency income is a bonus received from the insurance underwriters and is based both on commission income and claims experience on our clients’ policies during the previous year. Increases and decreases in contingency income are reflective of corresponding increases and decreases in the amount of claims paid by insurance carriers. Contingency income, which is included in the “Other noninterest income” inline item on the Consolidated Statements of Income, was $832, $816$1,063 and $1,177$934 for 2018, 20172021 and 2016,2020, respectively.
Our Wealth Management segment has two primary divisions: Trust and Financial Services. The Trust division operates on a custodial basis which includes administration of benefit plans, as well as accounting and money management for trust accounts. The division manages a number of trust accounts inclusive of personal and corporate benefit accounts, self-directed IRAs, and custodial accounts. Fees for managing these accounts are based on changes in market values of the assets under management in the account, with the amount of the fee depending on the type of account. The Financial Services division provides specialized


products and services to our customers, which include fixed and variable annuities, mutual funds, and stocks offered through a third party provider. Wealth Management revenue was $13,540$20,455 for 20182021 compared to $11,884$16,504 for 2017 and $11,652 for 2016.2020. The market value of assets under management or administration was $3,307,879, $3,233,426$5,177,984 and $3,170,174$4,196,072 at December 31, 2018, 20172021 and 2016,2020, respectively.
Mortgage banking income is derived from the origination and sale of mortgage loans and the servicing of mortgage loans that the Company has sold but retained the right to service. Although loan fees and some interest income are derived from mortgage loans held for sale, the main source of income is gains from the sale of these loans in the secondary market. Originations of mortgage loans to be sold totaled $1,763,246$4,059,927 in 2018, $1,683,4542021 and $4,479,421 in 2017 and $1,951,144 in 2016.2020. The overall decrease in mortgage loan originations from 2016 isin 2021 was due to a reductionthe changes in the refinancing of mortgage loans as mortgage interest rate environment from the historically low rates have increased; however, the Company's recruiting efforts to add producers throughout our footprint has resulted in additional volume to offset the impact from rising rates.2020. Mortgage banking income was impacted in 2021 by a positive mortgage servicing rights valuation adjustment of $13,561 and in 2020 by a negative mortgage servicing rights valuation adjustment of $11,726.
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The following table presents the components of mortgage banking income included in noninterest income at December 31:
20212020
2018 2017 2016
Gain on sales of loans, net(1)
Gain on sales of loans, net(1)
$82,399 $150,406 
Fees, netFees, net17,161 18,914 
Mortgage servicing income, net$3,846
 $1,796
 $268
Mortgage servicing income, net(3,517)(7,095)
Gain on sales of loans, net40,318
 19,675
 31,654
Fees, net5,978
 21,944
 17,521
MSR valuation adjustmentMSR valuation adjustment13,561 (11,726)
Mortgage banking income, net$50,142
 $43,415
 $49,443
Mortgage banking income, net$109,604 $150,499 
BMG contributed $3,683(1)Gain on sales of loans, net includes pipeline fair value adjustments
During 2021, the Company terminated four interest rate swap contracts with notional amounts of $25,000 each. These swaps hedged forecasted future FHLB borrowings which were no longer expected to mortgage banking income during 2018 prior to its divestiture.occur. As a result of these terminations, the Company recognized a gain of $4,676 for the year ended December 31, 2021.
Noninterest income for the twelve months ended December 31, 20182021 includes the Company'sCompany’s net lossesgains on sale of securities of $16,$2,170, as the Company sold securities with a carrying value $2,403$174,285 at the time of sale for net proceeds of $2,387.$176,455. Gains on sales of securities for the twelve months ended 20172020 were $148,$46, resulting from the sale of approximately $495,192 in securities. Securities sold during the fourth quarter of 2017 specifically as part of our deleveraging strategy had an aggregate carrying value of $446,880 on the dates of sale. The Company collected net proceeds of $446,971 which resulted in a net gain of $91 on these sales. Gains on sales of securities for 2016 were $1,186, resulting from the sale of approximately $2,842$44,860 in securities. For more information on securities sold during the three year period ended December 31, 2018,in 2021 and 2020, see Note 3,2, “Securities,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report.
Bank-owned life insurance (“BOLI”) income is derived from changes in the cash surrender value of the bank-owned life insurance policies and can fluctuate upon the collection of death benefitlife insurance proceeds. BOLI income increased to $4,644$7,366 in 20182021 as compared to $4,353 for the same period$5,627 in 2017; BOLI income was $4,635 for 2016. In connection with the acquisitions of Brand and Metropolitan,2020. Additionally, the Company acquiredpurchased $50,000 in BOLI with a cash surrender value of $40,081 and $19,283, respectively.policies during 2021.
OtherIn addition to the contingency income described above, other noninterest income includes contingency income from our insurance underwriters, income from our SBA banking division and other miscellaneous income and can fluctuate based on the claims experience in our Insurance agency, production in our SBA banking division,production and recognition of other unseasonalnonseasonal income items. Other noninterest income was $8,533$20,571 for 20182021 compared to $8,821 and $11,302$9,497 for 2017 and 2016, respectively.2020.
Noninterest Expense
Noninterest Expense to Average Assets         
2018 2017 2016
3.11% 3.17% 3.51%
Noninterest Expense to Average Assets
20212020
2.70%3.25%
Noninterest expense was $345,029, $301,618$429,826 and $295,099$471,988 for 2018, 20172021 and 2016,2020, respectively. As mentioned previously, the Company incurred expenses in connection with certain transactions with respect to which management is unable to accurately predict when these expenses will be incurred or, when incurred, the amount of such expenses. The following table presents these expenses for the periods presented:

Twelve Months Ended December 31,
 20212020
COVID-19 related expenses$1,511 $10,343 
Restructuring charges368 7,365 
Swap termination charges— 2,040 
Debt prepayment penalty6,123 121 

 Twelve Months Ended December 31,
 2018 2017 2016
Merger and Conversion expenses$14,246
 $10,378
 $4,023
Debt prepayment penalty
 205
 2,539
Loss share termination
 
 2,053
Aside from the expenses presented above, the increaseThe Company incurred a $6,123 debt prepayment penalty in noninterest expense since 2016 was primarily driven by the additional expenses associated2021 in connection with the acquisitionprepayment of Metropolitan’s operations and, to a lesser extent, Brand’s operations, as discussed in more detail in the remainder of this section. Included in noninterest expense for the year ended December 31, 2018 is $4,398 attributable to BMG.$150,000 long-term FHLB advance.
Salaries and employee benefits is the largest component of noninterest expense and represented 62.11%, 61.18%65.29% and 58.44%64.07% of total noninterest expense at December 31, 2018, 20172021 and 2016,2020, respectively. During 2018,2021, salaries and employee benefits increased $29,754,decreased $21,761, or 16.12%7.20%, to $214,294$280,627 as compared to $184,540$302,388 for 2017.2020. The increasedecrease in salaries and employee benefits is primarily attributabledue to the additioncost savings realized by the voluntary early retirement program offered during the fourth quarter of the Brand operations2020 and the full-year impact of the acquired Metropolitan operations as well as annual merit based pay increases. Mortgage commissions from the increase in production also contributed to the increase inother expense from 2017.initiatives. Salaries and employee benefits increased $12,092for 2020 also includes approximately $8,237 in 2017 from $172,448 in 2016. The increase in salariesexpense related to employee
43


overtime and employee benefits is primarily attributablebenefit accruals directly related to the addition ofCompany’s response to both the Metropolitan operationsCOVID-19 pandemic itself and was slightly offset by a decrease in mortgage commission expense resulting fromfederal legislation enacted to address the decrease in mortgage production from 2016.pandemic, such as the CARES Act.
The compensationCompensation expense recorded in connection with grants of stock options and awards of restricted stock, which is included within salaries and employee benefits, was $6,633, $4,823$9,415 and $2,790$9,910 for 2018, 20172021 and 2016,2020, respectively. A portion of the restricted stock awards in all threeboth years was subject to the satisfaction of performance-based conditions.
Data processing costs increased $2,153$1,041 to $18,627$21,726 in 20182021 from $16,474$20,685 in 2017. Data2020, driven by continued enhancement to digital offerings and increases in transaction volume. 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, were $17,723 in 2016. Increased costs resulting from the acquired operations of Metropolitansuch as new accounts and Brand have been slightly offset by cost savings realized through contract renegotiations.increased transaction volume.
Net occupancy and equipment expense in 20182021 was $42,111, an increase$46,837, a decrease of $4,355, compared to $37,756$7,243 from $54,080 for 2017. Net occupancy and equipment expense in 2016 was $34,394. Aside from the increase attributable to the additional locations and assets from Brand and Metropolitan, the increase2020. The decrease in net occupancy and equipment expense since 2016 is alsoprimarily attributable to investments in our IT infrastructure in response to bankingthe restructuring and governmental regulation and increased global risk from cyber security breaches.non-renewal of certain branch leases.
Expenses related to other real estate owned for 20182021 were $1,892,$253, compared to $2,470$2,754 in 2017 and $5,696 in 2016.2020. Expenses on other real estate owned for 20182021 include write downs of $1,545$306 of the carrying value to fair value on certain pieces of property held in other real estate owned compared to write downs of $1,893 and $3,018$2,160 in 2017 and 2016, respectively.2020. Other real estate owned with a cost basis of $7,127$6,166 was sold during 2018,2021, resulting in a net gain of $423$176, compared to other real estate owned with a cost basis of $13,465$8,415 sold during 20172020 for a net gain of $405. Other real estate owned with a cost basis of $17,529 was sold during 2016, resulting in a net loss of $590.$23.
Professional fees include fees for legal and accounting services. Professional fees were $8,753 for 2018services, such as compared to $7,150 for 2017 and $7,970 for 2016. Professional fees remain elevated in large part due to additional legal, accounting and consulting fees associated with compliance costs of newly enactedroutine litigation matters, external audit services as well as assistance in complying with newly-enacted and existing banking and governmental regulation. Professional fees were $11,776 for 2021 as compared to $11,293 for 2020.
Advertising and public relations expense was $9,464$12,203 for 2018,2021, an increase of $1,216$1,881 compared to $8,248$10,322 for 2017. Advertising and public relations expense increased $1,168 for 2017 from $7,080 for 2016. These year-over-year increases are2020. The increase is primarily attributable to advertising and marketing costs associated with the Company’s expansion into new markets, an increased focus on digital marketing and branding throughout our footprint as well as an increase in the marketing of the Company’s community involvement.sponsorship spending, as COVID-19 restrictions on public events were relaxed.
Amortization of intangible assets totaled $7,179$6,042 for 20182021 compared to $6,530$7,121 for 2017 and $6,747 for 2016.2020. This amortization relates to finite-lived intangible assets which are being amortized over the useful lives as determined at acquisition. These finite-lived intangible assets have remaining estimated useful lives ranging from approximately 1.5two years to approximately 10eight years.
Communication expenses are those expenses incurred for communication to clients and between employees. Communication expenses were $8,318$8,869 for 20182021 as compared to $7,578$8,866 for 20172020.
Other noninterest expense includes the provision for unfunded commitments, business development and $8,329travel expenses, other discretionary expenses, loan fees expense and other miscellaneous fees and operating expenses. Other noninterest expense was $35,002 for 2016. The increased costs2021 as compared to $44,953 for 2020. A negative provision (recovery) for unfunded commitments of $500 was recorded for 2021 and a resultpositive provision for unfunded commitments of the acquisitions over the last three years$9,200 was offsetrecorded in 2017 as the Company transitioned from a traditional telephone system to a Voice over IP phone system, which is more cost efficient.


2020.
Efficiency Ratio
Efficiency Ratio
20212020
Efficiency ratio (GAAP)65.35%70.53%
Adjusted efficiency ratio (Non-GAAP) (1)
65.32%64.00%
 Efficiency Ratio
 2018 2017 2016
Efficiency ratio (GAAP)63.15% 63.12% 66.25%
Impact on efficiency ratio from:     
Net gains on sales of securities 0.02 0.17
Intangible amortization(1.32) (1.37) (1.52)
Merger and conversion related expenses(2.61) (2.18) (0.90)
Extinguishment of debt (0.04) (0.57)
Loss share termination  (0.46)
Adjusted efficiency ratio (Non-GAAP)59.22% 59.55% 62.97%
(1)Adjusted efficiency ratio is a non-GAAP financial measure. A reconciliation of this financial measure from GAAP to non-GAAP as well as an explanation of why the Company provides non-GAAP financial measures can be found under the “Non-GAAP Financial Measures” heading at the end of this Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in this report.

The efficiency ratio is onea measure of productivity in the banking industry. This(This ratio is calculateda measure of our ability to measure the cost of generating one dollar ofturn expenses into revenue. That is, the ratio is designed to reflect the percentage of one dollar which must be expended to generate thata dollar of revenue.) The Company calculates this ratio by dividing noninterest expense by the sum of net interest income on a fully tax equivalent basis and noninterest income. The table above shows the impact on the efficiency ratio of expenses that (1) the Company does not consider to be part of our normal operations,its core operating activities, such as amortization of intangibles, or (2) the Company incurred in connection with certain transactions where management is unable to accurately predict the timing of when these expenses will be incurred or, when incurred, the amount of such expenses, such as mergerexpenses incurred in connection with our response to the COVID-19 pandemic, our MSR valuation adjustment, restructuring and conversion related expensesswap termination charges and debt prepayment penalties.the provision for unfunded commitments. We remain committed to aggressively managing our costs within the framework of our
44


business model. We expectOur goal is to improve the efficiency ratio to continue to improveover time from levels currently reported levels as a result of revenue growth while at the same time controlling noninterest expenses.
Income Taxes
Income tax expense for 2018, 20172021 and 20162020 was $41,727, $67,681$46,935 and $44,847,$19,840, respectively. The effective tax rates for those years were 22.12%, 42.34%22.41% and 33.03%19.40%, respectively. Although taxableFor additional information regarding the Company’s income has continuedtaxes, please refer to increase from 2016, the decreased effective tax rate in 2018 as compared to 2017 and 2016 is a result of the lower corporate tax rate that resulted from the enactment of the Tax Cut and Jobs Act which became effective January 1, 2018. The legislation was enacted in December 2017, and as a result, the Company revalued its deferred tax assets based on the reductionNote 15, “Income Taxes,” in the overall future tax benefit expectedNotes to be realized at the lower tax rate implemented by the new legislation. IncludedConsolidated Financial Statements in income tax expense for 2017 is $14,486 attributable to the revaluation of deferred tax assets. ExcludingItem 8, Financial Statements and Supplementary Data, in this revaluation, the adjusted effective tax rate for 2017 was 33.27%.

report.


Risk Management
The management of risk is an on-going process. Primary risks that are associated with the Company include credit, interest rate and liquidity risk. Credit and interest rate risk are discussed below, while liquidity risk is discussed in the next subsection under the heading “Liquidity and Capital Resources.”
Credit Risk and Allowance for LoanCredit Losses on Loans and Unfunded Commitments
COVID-19 Update. At December 31, 2021, the Company’s credit quality metrics remained sound. The Company is continuing to monitor all asset categories given that any category or borrower could be negatively impacted by the pandemic, with enhanced monitoring of loans remaining on deferral under the Company’s loan deferral programs implemented in 2020, as well as a focus on those industries more highly impacted by the pandemic, primarily the hospitality and senior living industries.Under the now-expired loan deferral programs, any customer current on loan payments, taxes and insurance qualified for an initial 90-day deferral of principal and interest payments. A second 90-day deferral was available to borrowers that remained current on taxes and insurance through the first deferral period and also satisfied underwriting standards established by the Company that analyzed the ability of the borrower to service its loan in accordance with its existing terms in light of the impact of the COVID-19 pandemic on the borrower, its industry and the markets in which it operated.The Company’s loan deferral program complies with the guidance set forth in the CARES Act and related guidance from the FDIC and other banking regulators. At December 31, 2021, the Company has discontinued its deferral program but had nine loans (not in thousands) on deferral with an aggregate balance of approximately $519, or 0.01% of our loan portfolio (excluding PPP loans) by dollar value.In accordance with the applicable guidance, none of these loans were considered “restructured loans” and thus are not included in the discussion of our restructured loans below.

Management of Credit Risk. Inherent in any lending activity is credit risk, that is, the risk of loss should a borrower default. The Company’s credit quality remained strong in 2018, and the Company continues to see the lowest levels of charge-offs and nonperforming loans since the 2008-2009 recession. This improvement is due in part to the pace of the economic recovery, declining unemployment levels, improved labor participation rate, improved performance of the housing market, and the Company’s continued efforts to bring problem credits to resolution.
Management of Credit Risk. Credit risk is monitored and managed on an ongoing basis by a credit administration department, a loss managementproblem asset resolution committee and the Board of Directors loan committee. Credit quality,Review Committee.Oversight of the Company’s lending operations (including adherence to our policies and procedures governing the loan underwriting and monitoring process), credit quality and loss mitigation are major concerns of credit administration and these committees. The Company’s central appraisal review department reviews and approves third-party appraisals obtained by the Company on real estate collateral and monitors loan maturities to ensure updated appraisals are obtained. This department is managed by a State Certified General Real Estate Appraiser and employs twothree additional State Certified General Real Estate Appraisers one Appraisal Intern and threefour real estate evaluators.
We have a number of documented loan policies and procedures that set forth the approval and monitoring process of the lending function. Adherence to these policies and procedures is monitored by management and the Board of Directors. A number of committees and an underwriting staff oversee the lending operations of the Company. These include in-house loss management committees and the Board of Directors loan committee. In addition, we maintain a loan review staff to independently monitor loan quality and lending practices, which reports directly to the audit committee of the Board of Directors.practices. Loan review personnel monitor and, if necessary, adjust the grades assigned to loans through periodic examination, focusing their review on commercial and real estate loans rather than consumer and small balance consumer mortgage loans, such as 1-4 family mortgage loans.

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

For commercial and commercial real estate secured loans, internal risk-rating grades are assigned by lending, credit administration orand loan review personnel, based on an analysis of the financial and collateral strength and other credit attributes underlying each loan. Loan grades range from 1 to 9, with 1 beingrated loans withhaving the least credit risk. Allowance factors established by management are applied toFor more information about the total balance of loansCompany’s loan grades, see the information under the heading “Credit Quality” in each grade to determine the amount neededNote 3, “Non Purchased Loans,” in the allowance for loan losses. The allowance factors are established based on historical loss ratios experienced by the Company for these loan types, as well as the credit quality criteria underlying each grade, adjusted for trendsNotes to Consolidated Financial Statements in Item 8, Financial Statements and expectations about losses inherentSupplementary Data, in our existing portfolios. In making these adjustments to the allowance factors, management takes into consideration factors which it believes are causing, or are likely in the future to cause, losses within our loan portfolio but that may not be fully reflected in our historical loss ratios. For portfolio balances of consumer, small balance consumer mortgage loans, such as 1-4 family mortgage loans, and certain other similar loan types, allowance factors are determined based on historical loss ratios by portfolio for the preceding eight quarters and may be adjusted by other qualitative criteria.this report.
The loss management
45


Management’s problem asset resolution committee and the Board of Directors’ loan committeeCredit Review Committee monitor loans that are past due or those that have been downgraded and placed on the Company’s internal watch list due to a decline in the collateral value or cash flow of the debtor; the committees then adjust loan grades accordingly. This information is used to assist management in monitoring credit quality.
A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement. Impairment is measured on a loan-by-loan basis for problem loans of $500 or greater by, as applicable, the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent. For real estate collateral, the fair market value of the collateral is based upon a recent appraisal by a qualified and licensed appraiser of the underlying collateral. When the ultimate collectability of a loan’s principal is in doubt, wholly or partially, the loan is placed on nonaccrual.



After all collection efforts have failed, collateral securing loans may be repossessed and sold or, for loans secured by real estate, foreclosure proceedings initiated. The collateral is sold at public auction for fair market value (based upon recent appraisals described in the above paragraph), with fees associated with the foreclosure being deducted from the sales price. The purchase price is applied to the outstanding loan balance. If the loan balance is greater than the sales proceeds, the deficient balance is sent to the Board of Directors’ loan committeeCredit Review Committee for charge-off approval. These charge-offs reduce the allowance for loan losses.credit losses on loans. Charge-offs reflect the realization of losses in the portfolio that were recognized previously through the provision for loan losses.credit losses on loans.

The Company'sCompany’s practice is to charge off estimated losses as soon as such loss is identified and reasonably quantified. Net charge-offs for 20182021 were $3,995,$10,273, or 0.05%0.10% as a percentage of average loans, compared to net charge-offs of $4,076,$3,852, or 0.06%,0.04% as a percentage of average loans, for 2017 and $7,230, or 0.12%, for 2016.2020. The charge-offs in 20182021 were fully reserved for in the Company’s allowance for loan losses and resulted in no additional provision for loan loss expense.credit losses.
Allowance for Loan Losses;Credit Losses on Loans; Provision for LoanCredit Losses on Loans. The allowance for loancredit losses is available to absorb probable credit losses inherent in the entireloans held for investment portfolio. Loan losses are charged against the allowance for credit losses when management believes the uncollectability of a loan portfolio. Thebalance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management evaluates the adequacy of the allowance on a quarterly basis. Please refer to 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 an in-depth discussion of our accounting policies and our methodology for determining the appropriate level of the allowance is based on an ongoing analysis of the loan portfolio and represents the amount that management deems adequatefor credit losses.

In addition to provide for inherent losses, including collective impairment as recognized under ASC 450, in our loan portfolio. Collective impairment is calculated based on loans grouped by grade. Another component of the allowance is losses on loans assessed as impaired under ASC 310. The balance of these loans and their related allowance is included in management’s estimation andits quarterly analysis of the allowance for loan losses.
The allowance for loancredit losses, is established after input from management, loan review and the loss management committee. Factors considered by management in evaluating the adequacy of the allowance, which occurs on a quarterly basis, include the internal risk rating of individual credits, loan segmentation, historical and current trends in net charge-offs, trends in nonperforming loans, trends in past due loans, trends in the market values of underlying collateral securing loans and the unemployment rate and other current economic conditions in the markets in which we operate. In addition, on a regular basis, management and the Board of Directors review loan ratios. These ratios include the allowance for loancredit losses as a percentage of total loans, net charge-offs as a percentage of average loans, the provision for loancredit lossesas a percentage of average loans, nonperforming loans as a percentage of total loans and the allowance coverage on nonperforming loans. Also, management reviews past due ratios by officer, community bank and the Company as a whole.
The allowance for loancredit losses on loans was $49,026, $46,211$164,171 and $42,737$176,144 at December 31, 2018, 20172021 and 2016,2020, respectively.
The following table presents the allocation of the allowance for loancredit losses by loan categoryon loans and the percentage byof each loan category relative to the total allowanceloans at December 31 for each of the years presented.
 2018 2017 2016 2015 2014
 Balance% of Total Balance% of Total Balance% of Total Balance% of Total Balance% of Total
Commercial, financial, agricultural$8,269
16.87% $5,542
11.99% $5,486
12.84% $4,186
9.86% $3,305
7.82%
Real estate – construction4,755
9.70% 3,428
7.42% 2,380
5.57% 1,852
4.36% 1,415
3.35%
Real estate – 1-4 family mortgage10,139
20.68% 12,009
25.99% 14,294
33.45% 13,908
32.77% 13,549
32.04%
Real estate – commercial mortgage24,492
49.96% 23,384
50.60% 19,059
44.60% 21,111
49.75% 22,759
53.82%
Installment loans to individuals(1)
1,371
2.79% 1,848
4.00% 1,518
3.54% 1,380
3.26% 1,261
2.97%
Total$49,026
100.00% $46,211
100.00% $42,737
100.00% $42,437
100.00% $42,289
100.00%
(1)
Includes lease financing receivables.


For impaired loans, specific reserves are established to adjust the carrying value of the loan to its estimated net realizable value. The following table quantifies the amount of the specific reserve component of the allowance for loan losses, the amount of the allowance determined by applying allowance factors to graded loans, and the amount of the allowance allocated to credit-deteriorated purchased loans, as of the dates presented.
 2018 2017 2016 2015 2014
Specific reserves for impaired loans$1,514
 $2,674
 $4,141
 $7,600
 $10,256
Allocated reserves for remaining portfolio44,960
 41,760
 35,776
 33,131
 30,308
Purchased with deteriorated credit quality2,552
 1,777
 2,820
 1,706
 1,725
Total$49,026
 $46,211
 $42,737
 $42,437
 $42,289
20212020
Balance% of TotalBalance% of Total
Commercial, financial, agricultural$33,922 14.20 %$39,031 23.20 %
Lease financing1,486 0.76 %1,624 0.69 %
Real estate – construction16,419 11.03 %16,047 7.85 %
Real estate – 1-4 family mortgage32,356 27.19 %32,165 24.68 %
Real estate – commercial mortgage68,940 45.39 %76,127 41.66 %
Installment loans to individuals11,048 1.43 %11,150 1.92 %
Total$164,171 100.00 %$176,144 100.00 %
The provision for loancredit losses is a chargeon loans charged to operating expense is an amount that, in the amount thatjudgment of management, determines is necessary to maintain the allowance for credit losses on loans at thea level consideredthat is believed to be adequate by management to meet the inherent risks of losses in our loan portfolio. AlthoughThe Company recorded a negative provision (recovery) of $1,700 in total provision for credit losses on loans during 2021, as compared to a provision for credit losses on loans of $85,350 during 2020. The Company’s allowance for credit loss model considers economic projections, primarily the Company has experienced lower levelsnational unemployment rate and GDP, over a reasonable and supportable period of classified loans and nonperforming loanstwo years. Based on the continual improvements in these forecasts over the last five years, as illustrated inyear,
46


nominal loan growth excluding PPP loans and stable credit metrics, the nonperforming loan tables later in this section, and while our other credit quality measures have also improved, the growth in non purchased loans over such period has dictatedCompany’s allowance model indicated that we maintain an increased levela release of the provision for loan losses in order to maintain the allowance for loan losses at an acceptable level in light of the increased size of our non purchased loan portfolio. The provision for loancredit losses was $6,810, $7,550 and $7,530 for 2018, 2017 and 2016, respectively.appropriate during 2021.
Provision for Loan Losses to Average Loans
2018 2017 2016
0.08% 0.11% 0.13%
For a purchased loan, as part of the acquisition we establish a “Day 1 Fair Value,” which equals the outstanding customer balance of a purchased loan on the acquisition date less any credit and/or yield discount applied against the purchased loan. A purchased loan will either meet or exceed the performance expectations established in determining the Day 1 Fair Values or deteriorate from such expected performance. If the purchased loan’s performance deteriorates from expectations established in determining the Day 1 Fair Values or since our most recent review of such portfolio’s performance, then the Company provides for such loan in the provision for loan losses and may ultimately partially or fully charge-off the carrying value of such purchased loan. If performance expectations are exceeded, then the Company reverses any previous provision for such loan. If the purchased loan continues to exceed expectations subsequent to the reversal of previously-established provision, then an adjustment to accretable yield is warranted, which has a positive impact on interest income.
Certain loans purchased are accounted for under ASC 310-30 and are carried at their Day 1 Fair Values, adjusted for any subsequent discount accretion. The fair value of loans accounted for in accordance with ASC 310-30 was $222,254, $227,260 and $271,758 at December 31, 2018, 2017 and 2016, respectively. The Company continually monitors these loans as part of our normal credit review and monitoring procedures for changes in the estimated future cash flows. The period end amount of our allowance for loan losses allocated to loans accounted for under ASC 310-30 totaled $2,552, $1,777 and $2,820 during 2018, 2017 and 2016, respectively.


Provision for Credit Losses on Loans to Average Loans
20212020
(0.02)%0.81%
The table below reflects the activity in the allowance for loancredit losses on loans for the years ended December 31:
20212020
Balance at beginning of year$176,144 $52,162 
Impact of adoption of ASC 326— 42,484 
(Recovery of) provision for credit losses on loans(1,700)85,350 
Charge-offs
Commercial, financial, agricultural7,087 3,577 
Lease financing13 168 
Real estate – construction52 716 
Real estate – 1-4 family mortgage1,164 1,167 
Real estate – commercial mortgage5,184 2,642 
Installment loans to individuals5,374 7,835 
Total charge-offs18,874 16,105 
Recoveries
Commercial, financial, agricultural1,470 1,263 
Lease financing49 11 
Real estate – construction13 31 
Real estate – 1-4 family mortgage1,498 838 
Real estate – commercial mortgage541 2,478 
Installment loans to individuals5,030 7,632 
Total recoveries8,601 12,253 
Net charge-offs10,273 3,852 
Balance at end of year$164,171 $176,144 
Net charge-offs to average loans0.10 %0.04 %
Net charge-offs to allowance for credit losses on loans6.26 %2.19 %
Allowance for credit losses on loans to:
Total loans1.64 %1.61 %
Total loans excluding PPP loans(1)
1.65 %1.80 %
Nonperforming loans323.14 %317.55 %
Nonaccrual loans332.57 %342.56 %
(1) Allowance for credit losses on loans to total loans excluding PPP loans is a non-GAAP financial measure. A reconciliation of this financial measure from GAAP to non-GAAP as well as an explanation of why the Company provides non-GAAP financial measures can be found under the “Non-GAAP Financial Measures” heading at the end of this Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in this report.
47


 2018 2017 2016 2015 2014
Balance at beginning of year$46,211
 $42,737
 $42,437
 $42,289
 $47,665
Provision for loan losses6,810
 7,550
 7,530
 4,750
 6,167
Charge-offs         
Commercial, financial, agricultural2,415
 2,874
 2,725
 943
 1,516
Lease financing202
 87
 
 419
 
Real estate – construction51
 
 
 26
 
Real estate – 1-4 family mortgage2,023
 1,713
 3,906
 2,173
 5,662
Real estate – commercial mortgage1,197
 1,791
 2,123
 2,613
 6,186
Installment loans to individuals540
 543
 717
 602
 495
Total charge-offs6,428
 7,008
 9,471
 6,776
 13,859
Recoveries         
Commercial, financial, agricultural618
 422
 331
 361
 455
Lease financing
 
 
 
 
Real estate – construction13
 105
 47
 26
 33
Real estate – 1-4 family mortgage573
 733
 997
 1,064
 1,325
Real estate – commercial mortgage1,108
 1,565
 757
 614
 436
Installment loans to individuals121
 107
 109
 109
 67
Total recoveries2,433
 2,932
 2,241
 2,174
 2,316
Net charge-offs3,995
 4,076
 7,230
 4,602
 11,543
Balance at end of year$49,026
 $46,211
 $42,737
 $42,437
 $42,289
          
Net charge-offs to average loans0.05% 0.06% 0.12% 0.10% 0.29%
Net charge-offs to allowance for loan losses8.15% 8.82% 16.92% 10.84% 27.30%
  Allowance for loan losses to loans0.54% 0.61% 0.69% 0.78% 1.06%
  Allowance for loan losses to loans(1)
0.77% 0.83% 0.91% 1.11% 1.29%
  Allowance for loan losses to nonperforming loans(1)
379.96% 348.37% 320.08% 283.46% 209.49%
(1)
Excludes loans and nonperforming loans purchased in previous acquisitions (for additional information, see the information in footnote 3 to the table in Item 6, Selected Financial Data).

The table below reflects net charge-offs to daily average loans outstanding, by loan category, during the years ended December 31:

20212020
Net Charge-offsAverage LoansNet Charge-offs to Average LoansNet Charge-offsAverage LoansNet Charge-offs to Average Loans
Commercial, financial, agricultural$5,617$1,832,4530.31%$2,314$2,242,7640.10%
Lease financing(36)75,988(0.05)%15783,5710.19%
Real estate – construction391,012,017—%685816,3110.08%
Real estate – 1-4 family mortgage(334)2,721,765(0.01)%3292,785,0180.01%
Real estate – commercial mortgage4,6434,504,0930.10%1644,388,743—%
Installment loans to individuals344163,7540.21%203277,1490.07%
Total$10,273$10,310,0700.10%$3,852$10,593,5560.04%

The following table provides further details of the Company’s net charge-offs of loans secured by real estate for the years ended December 31:
20212020
Real estate – construction:
Residential$39 $685 
Commercial— — 
Total real estate – construction39 685 
Real estate – 1-4 family mortgage:
Primary30 883 
Home equity(79)(87)
Rental/investment(193)27 
Land development(92)(494)
Total real estate – 1-4 family mortgage(334)329 
Real estate – commercial mortgage:
Owner-occupied(89)1,257 
Non-owner occupied4,733 (1,115)
Land development(1)22 
Total real estate – commercial mortgage4,643 164 
Total net charge-offs of loans secured by real estate$4,348 $1,178 
Allowance for Credit Losses on Unfunded Commitments; Provision for Credit Losses on Unfunded Commitments. The Company maintains a separate allowance for credit losses on unfunded loan commitments, which is included in the “Other liabilities” line item on the Consolidated Balance Sheets. Management estimates the amount of expected losses on unfunded loan commitments by calculating a likelihood of funding over the contractual period for exposures that are not unconditionally cancellable by the Company and applying the loss factors used in the allowance for credit loss on loans methodology described above to unfunded commitments for each loan type. No credit loss estimate is reported for off-balance-sheet credit exposures
48


 2018 2017 2016 2015 2014
Real estate – construction:         
Residential$38
 $(105) $(45) $5
 $(33)
Commercial
 
 
 
 
Condominiums
 
 (2) (5) 
Total real estate – construction38
 (105) (47) 
 (33)
Real estate – 1-4 family mortgage:         
Primary351
 1,058
 941
 1,141
 953
Home equity823
 221
 210
 68
 878
Rental/investment(54) (131) 121
 179
 702
Land development330
 (168) 1,637
 (279) 1,804
Total real estate – 1-4 family mortgage1,450
 980
 2,909
 1,109
 4,337
Real estate – commercial mortgage:         
Owner-occupied162
 335
 522
 1,976
 1,649
Non-owner occupied134
 184
 439
 177
 2,981
Land development(207) (293) 405
 (154) 1,120
Total real estate – commercial mortgage89
 226
 1,366
 1,999
 5,750
Total net charge-offs of loans secured by real estate$1,577
 $1,101
 $4,228
 $3,108
 $10,054
that are unconditionally cancellable by the Company. A roll-forward of the allowance for credit losses on unfunded commitments is shown in the table below.
Year Ended December 31,
20212020
Allowance for credit losses on unfunded loan commitments:
Beginning balance$20,535 $946 
Impact of the adoption of ASC 326— 10,389 
(Recovery of) provision for credit losses on unfunded loan commitments (included in other noninterest expense)(500)9,200 
Ending balance$20,035 $20,535 
Nonperforming Assets. Nonperforming assets consist of nonperforming loans and other real estate owned and nonaccruing securities available-for-sale.owned. Nonperforming loans are loans on which the accrual of interest has stopped and loans that are contractually 90 days past due on which interest continues to accrue. Generally, the accrual of interest is discontinued when the full collection of principal or interest is in doubt or when the payment of principal or interest has been contractually 90 days past due, unless the obligation is both well secured and in the process of collection. Management, the loss managementproblem asset resolution committee and our loan review staff closely monitor loans that are considered to be nonperforming.
Other real estate owned consists of properties acquired through foreclosure or acceptance of a deed in lieu of foreclosure. These properties are carried at the lower of cost or fair market value based on appraised value less estimated selling costs. Losses arising at the time of foreclosure of properties are charged against the allowance for loancredit losses. Reductions in the carrying value subsequent to acquisition are charged to earnings and are included in “Other real estate owned” in the Consolidated Statements of Income.
Investment securities may be transferred to nonaccrual status where the recognition of investment interest is discontinued. A number of qualitative factors, including but not limited to the financial condition of the underlying issuer and current and projected deferrals or defaults, are considered by management in the determination of whether an investment security should be transferred to nonaccrual status. The interest on these nonaccrual investment securities is accounted for on the cash-basis method until qualifying for return to accrual status. There were no nonaccruing investment securities available-for-sale held in our portfolio at December 31, 2018 and 2017, while at December 31, 2016 one of the Company’s investments in pooled trust preferred securities was on nonaccrual status. This security was sold in 2017. For more information about the Company’s trust preferred securities, see Note 3, “Securities,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data.



The following table provides details of the Company’s nonperforming assets that are non purchased and nonperforming assets that have been purchased in onethose acquired as part of the Company'sCompany’s previous acquisitions as of the dates presented.
Non PurchasedPurchased Total
Non Purchased Purchased  Total
December 31, 2018     
December 31, 2021December 31, 2021
Nonaccruing loans$10,218
 $5,836
 $16,054
Nonaccruing loans$30,751 $18,613 $49,364 
Accruing loans past due 90 days or more2,685
 7,232
 9,917
Accruing loans past due 90 days or more1,074 367 1,441 
Total nonperforming loans12,903
 13,068
 25,971
Total nonperforming loans31,825 18,980 50,805 
Other real estate owned4,853
 6,187
 11,040
Other real estate owned951 1,589 2,540 
Total nonperforming loans and OREO17,756
 19,255
 37,011
Nonaccruing securities available-for-sale, at fair value
 
 
Total nonperforming assets$17,756
 $19,255
 $37,011
Total nonperforming assets$32,776 $20,569 $53,345 
Nonperforming loans to total loans    0.29%Nonperforming loans to total loans0.51 %
Nonaccruing loans to total loansNonaccruing loans to total loans0.49 %
Nonperforming assets to total assets    0.29%Nonperforming assets to total assets0.32 %
     
December 31, 2017     
December 31, 2020December 31, 2020
Nonaccruing loans$10,250
 $4,424
 $14,674
Nonaccruing loans$20,369 $31,051 $51,420 
Accruing loans past due 90 days or more3,015
 5,731
 8,746
Accruing loans past due 90 days or more3,783 267 4,050 
Total nonperforming loans13,265
 10,155
 23,420
Total nonperforming loans24,152 31,318 55,470 
Other real estate owned4,410
 11,524
 15,934
Other real estate owned2,045 3,927 5,972 
Total nonperforming loans and OREO17,675
 21,679
 39,354
Nonaccruing securities available-for-sale, at fair value
 
 
Total nonperforming assets$17,675
 $21,679
 $39,354
Total nonperforming assets$26,197 $35,245 $61,442 
Nonperforming loans to total loans    0.31%Nonperforming loans to total loans0.51 %
Nonaccruing loans to total loansNonaccruing loans to total loans0.47 %
Nonperforming assets to total assets    0.40%Nonperforming assets to total assets0.41 %
     
December 31, 2016     
Nonaccruing loans$11,273
 $11,347
 $22,620
Accruing loans past due 90 days or more2,079
 10,815
 12,894
Total nonperforming loans13,352
 22,162
 35,514
Other real estate owned5,929
 17,370
 23,299
Total nonperforming loans and OREO19,281
 39,532
 58,813
Nonaccruing securities available-for-sale, at fair value9,645
 
 9,645
Total nonperforming assets$28,926
 $39,532
 $68,458
Nonperforming loans to total loans    0.57%
Nonperforming assets to total assets    0.79%
The recent acquisitionlevel of Brand added $3,893 of purchased nonperforming loans at December 31, 2018. Excluding the purchased nonperforming loans from the Company's acquisitions, nonperforming loans decreased $362, or 2.73%,$4,665 from December 31, 2017 and2020, while OREO decreased $449, or 3.36%, from December 31, 2016.$3,432 during the same period.

49



The following table presents nonperforming loans by loan category at December 31 for each of the years presented.
 2018 2017 2016 2015 2014
Commercial, financial, agricultural$2,461
 $2,921
 $3,709
 $1,504
 $1,838
Lease financing89
 159
 138
 
 
Real estate – construction:         
Residential68
 
 466
 176
 201
Commercial
 
 
 
 
Condominiums
 
 
 
 
Total real estate – construction68
 
 466
 176
 201
Real estate – 1-4 family mortgage:         
Primary10,102
 6,221
 6,179
 9,764
 7,535
Home equity2,047
 2,701
 2,777
 1,900
 2,460
Rental/investment757
 395
 2,292
 5,142
 4,600
Land development980
 1,078
 1,656
 2,091
 1,153
Total real estate – 1-4 family mortgage13,886
 10,395
 12,904
 18,897
 15,748
Real estate – commercial mortgage:         
Owner-occupied3,779
 5,473
 8,282
 9,177
 12,810
Non-owner occupied3,933
 3,087
 6,821
 8,372
 12,025
Land development958
 1,090
 2,757
 7,139
 12,397
Total real estate – commercial mortgage8,670
 9,650
 17,860
 24,688
 37,232
Installment loans to individuals797
 295
 437
 162
 91
Total nonperforming loans$25,971
 $23,420
 $35,514
 $45,427
 $55,110
The decrease in the level of nonperforming loans, relative to our total loans and our total assets, as shown in the above two tables is a reflection of the Company's continued strategy to aggressively manage problem loans and assets. The Company continues its efforts to bring problem credits to resolution. The Company’s coverage ratio, or its allowance for loan losses as a percentage of nonperforming loans, was 188.77% as of December 31, 2018 as compared to 197.31% as of December 31, 2017 and 120.34% as of December 31, 2016. The coverage ratio for non purchased, nonperforming loans was 379.96% as of December 31, 2018 as compared to 348.37% as of December 31, 2017 and 320.08% as of December 31, 2016.
20212020
Commercial, financial, agricultural$13,131 $16,668 
Lease financing11 48 
Real estate – construction:
Residential— 497 
Commercial— — 
Total real estate – construction— 497 
Real estate – 1-4 family mortgage:
Primary19,533 16,317 
Home equity1,719 2,273 
Rental/investment1,595 1,526 
Land development257 345 
Total real estate – 1-4 family mortgage23,104 20,461 
Real estate – commercial mortgage:
Owner-occupied5,039 6,364 
Non-owner occupied8,535 10,204 
Land development470 572 
Total real estate – commercial mortgage14,044 17,140 
Installment loans to individuals515 656 
Total nonperforming loans$50,805 $55,470 
Management has evaluated the aforementioned loans and other loans classified as nonperforming and believes that all nonperforming loans have been adequately reserved for in the allowance for loancredit losses on loans at December 31, 2018.2021. 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 $36,597$27,604 at December 31, 20182021 as compared to $27,738$26,286 at December 31, 2017. The recent acquisition of Brand added $11,156 of purchased, loans 30-89 days past due at December 31, 2018.2020.
Although not classified as nonperforming loans, another category of assets that contribute to our credit risk is restructured loans. Restructured loans are those for which concessions have been granted to the borrower due to a deterioration of the borrower’s financial condition and are performing in accordance with the new terms. Such concessions may include reduction in interest rates or deferral of interest or principal payments. In evaluating whether to restructure a loan, management analyzes the long-term financial condition of the borrower, including guarantor and collateral support, to determine whether the proposed concessions will increase the likelihood of repayment of principal and interest. Restructured loans that are not performing in accordance with their restructured terms that are either contractually 90 days past due or placed on nonaccrual status are reported as nonperforming loans.


As shown below, restructured loans totaled $12,820$20,259 at December 31, 20182021 compared to $14,553$20,448 at December 31, 2017.2020. At December 31, 2018,2021, loans restructured through interest rate concessions represented 27%32% of total restructured loans, while
50


loans restructured by a concession in payment terms represented the remainder. The following table provides further details of the Company’s restructured loans at December 31 2018 and 2017:for each of the years presented:

20212020
Commercial, financial, agriculturalCommercial, financial, agricultural$967 $2,326 
2018 2017
Commercial, financial, agricultural$337
 $331
Real estate – 1-4 family mortgage:   Real estate – 1-4 family mortgage:
Primary6,261
 6,213
Primary11,750 9,460 
Home equity186
 282
Home equity298 332 
Rental/investment2,005
 2,247
Rental/investment350 432 
Land development1
 4
Total real estate – 1-4 family mortgage8,453
 8,746
Total real estate – 1-4 family mortgage12,398 10,224 
Real estate – commercial mortgage:   Real estate – commercial mortgage:
Owner-occupied3,189
 3,503
Owner-occupied5,407 6,838 
Non-owner occupied722
 1,466
Non-owner occupied1,341 797 
Land development56
 440
Land development75 183 
Total real estate – commercial mortgage3,967
 5,409
Total real estate – commercial mortgage6,823 7,818 
Installment loans to individuals63
 67
Installment loans to individuals71 80 
Total restructured loans$12,820
 $14,553
Total restructured loans$20,259 $20,448 
Changes in the Company’s restructured loans are set forth in the table below for the periods presented.
20212020
Balance as of January 1$20,448 $11,954 
Additional loans with concessions12,639 14,533 
Reclassified as performing366 428 
Reductions due to:
Reclassified as nonperforming(4,390)(3,321)
Paid in full(7,586)(2,387)
Charge-offs(205)(3)
Principal paydowns(1,013)(756)
Balance as of December 31$20,259 $20,448 
 2018 2017
Balance as of January 1$14,553
 $11,475
Additional loans with concessions2,573
 7,156
Reclassified as performing730
 1,021
Reductions due to:   
Reclassified as nonperforming(1,868) (1,639)
Paid in full(2,300) (1,488)
Charge-offs
 (267)
Paydowns(868) (681)
Lapse of concession period
 (1,024)
Balance as of December 31$12,820
 $14,553

The following table shows the principal amounts of nonperforming and restructured loans as of December 31 of each year presented. All loans where information exists about possible credit problems that would cause us to have serious doubts about the borrower’s ability to comply with the current repayment terms of the loan have been reflected in the table below.
20212020
Nonaccruing loans$49,364 $51,420 
Accruing loans past due 90 days or more1,441 4,050 
Total nonperforming loans50,805 55,470 
Restructured loans20,259 20,448 
Total nonperforming and restructured loans$71,064 $75,918 
51

 2018 2017 2016 2015 2014
Nonaccruing loans$16,054
 $14,674
 $22,620
 $29,034
 $44,396
Accruing loans past due 90 days or more9,917
 8,746
 12,894
 16,393
 10,713
Total nonperforming loans25,971
 23,420
 35,514
 45,427
 55,109
Restructured loans12,820
 14,553
 11,475
 13,453
 14,337
Total nonperforming and restructured loans$38,791
 $37,973
 $46,989
 $58,880
 $69,446
Nonperforming loans to loans0.29% 0.31% 0.57% 0.84% 1.38%



The following table provides details of the Company’s other real estate owned as of December 31 2018 and 2017:for each of the years presented:
20212020
Residential real estate$259 $179 
Commercial real estate761 2,665 
Residential land development305 1,013 
Commercial land development1,215 2,115 
Total other real estate owned$2,540 $5,972 
 2018 2017
Residential real estate$2,333
 $2,441
Commercial real estate4,297
 5,938
Residential land development1,099
 1,881
Commercial land development3,311
 5,674
Total other real estate owned$11,040
 $15,934
Changes in the Company’s other real estate owned were as follows for the periods presented:
2018 201720212020
Balance as of January 1$15,934
 $23,299
Balance as of January 1$5,972 $8,010 
Purchased OREO
 1,203
Transfers of loans3,826
 6,699
Transfers of loans3,180 8,588 
Impairments(1,545) (1,893)Impairments(306)(2,160)
Dispositions(7,127) (13,465)Dispositions(6,166)(8,415)
Other(48) 91
Other(140)(51)
Balance as of December 31$11,040
 $15,934
Balance as of December 31$2,540 $5,972 
We realized net gains of $423$176 and $405$23 on dispositions of other real estate owned during 20182021 and 2017,2020, respectively.
Interest Rate Risk
Market risk is the risk of loss from adverse changes in market prices and rates. The majority of assets and liabilities of a financial institution are monetary in nature and therefore differ greatly from most commercial and industrial companies that have significant investments in fixed assets and inventories. Our market risk arises primarily from interest rate risk inherent in lending and deposit-taking activities. Management believes a significant impact on the Company’s financial results stems from our ability to react to changes in interest rates. A sudden and substantial change in interest rates may adversely impact our earnings because the interest rates borne by assets and liabilities do not change at the same speed, to the same extent or on the same basis.
Because of the impact of interest rate fluctuations on our profitability, the Board of Directors and management actively monitor and manage our interest rate risk exposure. We have an Asset/Liability Committee (“ALCO”(the “ALCO”) whichthat is authorized by the Board of Directors to monitor our interest rate sensitivity and to make decisions relating to that process. The ALCO reports to the Investment Committee of the Board of Directors. The ALCO’s goal is to structure our asset/liability composition to maximize net interest income while managing interest rate risk so as to minimize the adverse impact of changes in interest rates on net interest income and capital. The ALCO uses an asset/liability model as the primary quantitative tool in measuring the amount of interest rate risk associated with changing market rates. The model is used to perform both net interest income forecast simulations for multiple year horizons and economic value of equity (“EVE”) analyses, each under various interest rate scenarios.scenarios, which could impact the results presented in the table below.
Net interest income forecast simulations measure the short and medium-term earnings exposure from changes in market interest rates in a rigorous and explicit fashion. Our current financial position is combined with assumptions regarding future business to calculate net interest income under varyingvarious hypothetical rate scenarios. EVE measures our long-term earnings exposure from changes in market rates of interest. EVE is defined as the present value of assets minus the present value of liabilities at a point in time for a given set of market rate assumptions. An increase in EVE due to a specified rate change indicates an improvement in the long-term earnings capacity of the balance sheet assuming that the rate change remains in effect over the life of the current balance sheet.


The following table presents the projected impact of a change in interest rates on (1) static EVE and (2) earnings at risk (that is, net interest income) for the 1-12 and 13-24 month periods commencing January 1, 2019,2022, in each case as compared to the result
52


under rates present in the market on December 31, 2018.2021. The changes in interest rates assume an instantaneous and parallel shift in the yield curve and doesdo not take into account changes in the slope of the yield curve.

 Percentage Change In: Percentage Change In:
Immediate Change in Rates of: Economic Value Equity (EVE) Earning at Risk (EAR) (Net Interest Income)Immediate Change in Rates of:Economic Value Equity (EVE)Earning at Risk (EAR)
(Net Interest Income)
Static 1-12 Months 13-24 MonthsStatic1-12 Months13-24 Months
+400 10.85% 4.84% 7.79%
+300 9.48% 3.63% 5.85%
+200 7.21% 2.43% 3.90%+20013.78%18.39%24.26%
+100 4.00% 1.26% 2.00%+1008.18%9.35%12.83%
-100 (4.87)% (1.79)% (2.70)%
The rate shock results for the EVE and net interest income simulations for the next 24 months produce an asset sensitive position at December 31, 2018. These results2021 and are all within the parameters set by the Board of Directors. The Company’s interest rate risk strategy is to remain in an asset sensitive position with a focus on increasing variable rate loan production and generating deposits that are less sensitive to increases in interest rates.
The preceding measures assume no change in the size or asset/liability compositions of the balance sheet. Thus, the measuressheet, and they do not reflect future actions the ALCO may undertake in response to such changes in interest rates.
The scenarios assume instantaneous movements in interest rates in increments of plus 100 200, 300 and 400 basis points and minus 100200 basis points. As interest rates are adjusted over a period of time, it is our strategy to proactively change the volume and mix of our balance sheet in order to mitigate our interest rate risk. The computation of the prospective effects of hypothetical interest rate changes requires numerous assumptions regarding characteristicsincluding asset prepayment speeds, the impact of new businesscompetitive factors on our pricing of loans and deposits, how responsive our deposit repricing is to the change in market rates and the behaviorexpected life of existing positions.non-maturity deposits. These business assumptions are based upon our experience, business plans and published industry experience. KeySuch assumptions employedmay not necessarily reflect the manner or timing in the model includewhich cash flows, asset prepayment speeds, competitive factors, the relative price sensitivity of certain assetsyields and liabilities and the expected life of non-maturity deposits.liability costs respond to changes in market rates. Because these assumptions are inherently uncertain, actual results will differ from simulated results.
The Company utilizes derivative financial instruments, including interest rate contracts such as swaps, caps and/or floors, forward commitments, and interest rate lock commitments, as part of its ongoing efforts to mitigate its interest rate risk exposure. For more information about the Company’s derivative financial instruments, see the “Off-Balance Sheet Transactions” section below and Note 15,14, “Derivative Instruments,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data.Data, in this report.

Liquidity and Capital Resources
Liquidity management is the ability to meet the cash flow requirements of customers who may be either depositors wishing to withdraw funds or borrowers needing assurance that sufficient funds will be available to meet their credit needs.
Core deposits, which are deposits excluding time deposits and public fund deposits,greater than $250,000, are athe major source of funds used by Renasantthe Bank to meet cash flow needs. Maintaining the ability to acquire these funds as needed in a variety of markets is the key to assuring Renasantthe Bank’s liquidity. Management continually monitors the Bank’s liquidity and non-core dependency ratios to ensure compliance with targets established by the Asset/Liability Management Committee.
Our investment portfolio is another alternative for meeting liquidity needs. These assets generally have readily available markets that offer conversions to cash as needed. Within the next twelve months the securities portfolio is forecasted to generate cash flow through principal payments and maturities equal to 17.41%19.75% of the carrying value of the total securities portfolio. Securities within our investment portfolio are also used to secure certain deposit types and short-term borrowings. At December 31, 2018,2021, securities with a carrying value of $637,607$629,174 were pledged to secure government, public, trust, and other deposits and as collateral for short-term borrowings and derivative instruments as compared to $243,755$614,610 at December 31, 2017.2020.
Other sources available for meeting liquidity needs include federal funds purchased, security repurchase agreements and short-term and long-term advances from the FHLB. Interest is charged at the prevailing market rate on federal funds purchased and FHLB advances.these borrowings. Federal funds are short term borrowings, generally overnight borrowings, between financial institutions, thatwhile security repurchase agreements represent funds received from customers, generally on an overnight or continuous basis, which are used to maintain reserve requirementscollateralized by investment securities owned or, at times, borrowed and re-hypothecated by the Federal Reserve Bank.Company. There were no federal funds purchased outstanding at December 31, 2018 or 2017.2021, and $10,393 were outstanding at December 31, 2020. Security repurchase agreements were $13,947 at December 31, 2021, as compared to $10,947 at December 31, 2020. The balance ofCompany had no short-term borrowingborrowings from the FHLB (i.e., advances with original maturities less than one year) at December 31, 2018 was $380,000, as compared to $83,000 at December 31, 2017.2021, and 2020. Long-term funds obtained from the FHLB borrowings are used primarily to match-fund fixed


rate loans in order to minimize interest rate risk and may also beare used to meet day to dayday-to-day liquidity needs, particularly when the cost of such borrowingborrowings compares favorably to the rates that we would be required to pay to attract deposits. At December 31, 2018,2021, the balance of our outstanding long-term advances with the FHLB
53


was $6,690$417 as compared to $7,493$152,167 at December 31, 2017.2020. The total amount of the remaining credit available to us from the FHLB at December 31, 20182021 was $3,301,543.$4,214,274. We also maintain lines of credit with other commercial banks totaling $150,000.$180,000. 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, 20182021 or 2017.2020.
In connectionFinally, we can access the capital markets to meet liquidity needs. The Company maintains a shelf registration statement with the acquisition of Brand,SEC, which allows the Company assumed $30,000 aggregate principal amountto raise capital from time to time through the sale of 8.50% fixed rate subordinated notes due June 27, 2024. In 2017, as partcommon stock, preferred stock, debt securities, warrants and units, or a combination thereof, subject to market conditions. Specific terms and prices will be determined at the time of any offering under a separate prospectus supplement that the Company will be required to file with the SEC at the time of the Metropolitan acquisition,specific offering. The proceeds of the Company assumed $15,000 aggregate principal amountsale of 6.50% fixed-to-floating rate subordinated notes due July 1, 2026. Additionally,securities, if and when offered, will be used as described in 2016,any prospectus supplement and could include general corporate purposes, the expansion of the Company’s banking, insurance and wealth management operations as well as other business opportunities. In 2021, we accessed the equity and debt capital markets to generate liquidity.liquidity in the form of subordinated notes and in prior years we have issued other subordinated notes and assumed subordinated notes as part of acquisitions. For more information please refer to the discussion of the offering ofabout our subordinated notes, undersee Note 12, “Long-Term Debt” in the heading “Financial Condition, Borrowings” aboveNotes to Consolidated Financial Statements in Item 8, Financial Statements and the discussion of our common stock offering under the heading “Shareholders’ Equity and Regulatory Matters” below.Supplementary Data, in this report.
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
 2018 2017 2016 2018 2017 2016
Noninterest-bearing demand21.88% 21.46% 20.40% % % %
Interest-bearing demand45.62
 44.91
 42.96
 0.56
 0.26
 0.19
Savings6.41
 7.06
 7.30
 0.15
 0.07
 0.07
Time deposits21.92
 21.35
 22.06
 1.24
 0.85
 0.73
Short-term borrowings1.67
 2.71
 4.96
 2.10
 1.22
 0.45
Long-term Federal Home Loan Bank advances0.08
 0.10
 0.50
 3.29
 3.40
 4.02
Subordinated notes1.35
 1.32
 0.49
 5.54
 5.59
 5.45
Other long-term borrowings1.07
 1.09
 1.33
 5.11
 5.01
 5.56
Total deposits and borrowed funds100.00% 100.00% 100.00% 0.70% 0.47% 0.39%

Our strategy in choosing funds is focused on minimizing cost along with consideringin the context of our balance sheet composition and interest rate risk position. Accordingly, management targets growth of non-interest bearing deposits. While we do not control the types of deposit instruments our clients choose, we do influence those choices with the rates and the deposit specials we offer. We constantly monitor our funds position and evaluate the effect that various funding sources have on our financial position. 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 TotalCost of Funds
 2021202020212020
Noninterest-bearing demand32.00 %27.91 %— %— %
Interest-bearing demand45.84 43.43 0.25 0.45 
Savings7.25 6.29 0.07 0.10 
Time deposits11.42 16.07 0.84 1.50 
Short-term borrowings0.10 2.94 0.29 1.07 
Long-term Federal Home Loan Bank advances0.92 1.25 0.07 0.61 
Subordinated notes1.65 1.20 4.86 5.28 
Other long-term borrowings0.82 0.91 4.30 4.40 
Total deposits and borrowed funds100.00 %100.00 %0.33 %0.59 %
Cash and cash equivalents were $569,111$1,877,965 at December 31, 2018,2021, compared to $281,453$633,203 at December 31, 2017 and $306,224 at December 31, 2016.2020. Cash used in investing activities for the year ended December 31, 20182021 was $498,581$660,003 compared to cash provided by investing activities of $75,142$1,265,548 in 2017 and cash used in investing activities of $351,993 in 2016.2020. Proceeds from the sale, maturity or call of securities within our investment portfolio were $163,090$636,721 for 20182021 compared to $680,667$482,887 for 2017 and $281,792 in 2016. The large increase in proceeds from the sale, maturity or call of securities in 2017 was related to our deleveraging strategy. As is discussed above under the heading “Financial Condition,” the majority of these proceeds were used to pay down certain wholesale funding sources. The remainder of these2020. These proceeds from the investment portfolio were primarily reinvested back into the securities portfolio or used to fund loan growth.portfolio. Purchases of investment securities were $686,887$2,160,069 for 20182021 compared to $210,190$515,657 for 2017 and $155,400 for 2016. The large increase in the purchases of investment securities in 2018 is related to the releveraging of the balance sheet.2020.
Cash provided by financing activities for the year ended December 31, 20182021 was $708,833$1,762,106 compared to cash used in financing activities of $301,474 and provided by financing activities of $282,849 for the years ended December 31, 2017 and 2016, respectively. Overall deposits, excluding deposits acquired during each year, increased $496,404$1,401,579 for the year ended December 31, 20182020. Overall deposits increased $1,846,643 for the year ended December 31, 2021 compared to a decreasean increase of $77,129$1,846,059 for the same period in 2017 and an increase of $489,089 for the year end 2016.2020.
Restrictions on Bank Dividends, Loans and Advances
The Company’s liquidity and capital resources, as well as its ability to pay dividends to our shareholders, are substantially dependent on the ability of the Bank to transfer funds to the Company in the form of dividends, loans and advances. Under Mississippi law, a Mississippi bank may not pay dividends unless its earned surplus is in excess of three times capital stock. A Mississippi bank


with earned surplus in excess of three times capital stock may pay a dividend, subject to the approval of the Mississippi Department of Banking and Consumer Finance.DBCF. In addition, the FDIC has the authority to prohibit the Bank from engaging in business practices that the FDIC considers to be unsafe or unsound, which, depending on the financial condition of the Bank, could include the payment of dividends. Accordingly, the approval of the DBCF is required prior to the Bank paying dividends to the Company, and under certain circumstances the approval of the FDIC may be required.
54


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 2021 or 2020. For purposes of this analysis, “dividend” includes not only dividends on preferred and common equity but also dividends on debt underlying trust preferred securities and other Tier 1 capital instruments. The Federal Reserve’s criteria evaluates whether the holding company (1) has net income over the past four quarters sufficient to fully fund the proposed dividend (taking into account prior dividends paid during this period), (2) is considering stock repurchases or redemptions in the quarter, (3) does not have a concentration in commercial real estate and (4) is in good supervisory condition, based on its overall condition and its asset quality risk. A holding company not meeting these criteria will require more in-depth consultations with the Federal Reserve.
Federal Reserve regulations also limit the amount the Bank may loan to the Company unless such loans are collateralized by specific obligations. At December 31, 2018,2021, the maximum amount available for transfer from the Bank to the Company in the form of loans was $133,162.$169,716. The Company maintains a line of credit collateralized by cash with the Bank totaling $3,052.$3,070. There were no amounts outstanding under this line of credit at December 31, 2018. These2021.

None of these restrictions did not havediscussed above had any impact on the Company’s ability to meet its cash obligations in 2021, nor does management expect such restrictions to materially impact the Company’s ability to meet its currently-anticipated cash obligations.

Off-Balance Sheet Transactions
The Company enters into loan commitments and standby letters of credit in the normal course of its business. Loan commitments are made to accommodate the financial needs of the Company’s customers. Standby letters of credit commit the Company to make payments on behalf of customers when certain specified future events occur. Both arrangements have credit risk essentially the same as that involved in extending loans to customers and are subject to the Company’s normal credit policies. Collateral (e.g., securities, receivables, inventory, equipment, etc.) is obtained based on management’s credit assessment of the customer.
Loan commitments and standby letters of credit do not necessarily represent future cash requirements of the Company in that while the borrower has the ability to draw upon these commitments at any time, these commitments often expire without being drawn upon. The Company’s unfunded loan commitments and standby letters of credit outstanding at December 31, 2018, 2017 and 2016 were as follows:
 2018 2017 2016
Loan commitments$2,068,749
 $1,619,022
 $1,263,059
Standby letters of credit104,664
 68,946
 44,086
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 will continue this process as new commitments are entered into or existing commitments are renewed.
The Company utilizes derivative financial instruments, including interest rate contracts such as swaps, caps and/or floors, as part of its ongoing efforts to mitigate its interest rate risk exposure and to facilitate the needs of its customers. The Company enters into derivative instruments that are not designated as hedging instruments to help its commercial customers manage their exposure to interest rate fluctuations. To mitigate the interest rate risk associated with these customer contracts, the Company enters into an offsetting derivative contract position with other financial institutions. The Company manages its credit risk, or potential risk of default by its commercial customers, through credit limit approval and monitoring procedures. At December 31, 2018, the Company had notional amounts of $196,049 on interest rate contracts with corporate customers and $196,049 in offsetting interest rate contracts with other financial institutions to mitigate the Company’s rate exposure on its corporate customers’ contracts.
Additionally, the Company enters into interest rate lock commitments with its customers to mitigate the interest rate risk associated with the commitments to fund fixed-rate residential mortgage loans and also enters into forward commitments to sell residential mortgage loans to secondary market investors.
The Company has also entered into forward interest rate swap contracts on FHLB borrowings, as well as interest rate swap agreements on junior subordinated debentures that are all accounted for as cash flow hedges. Under each of these contracts, the Company pays a fixed rate of interest and receives a variable rate of interest based on the three-month LIBOR plus a predetermined spread.
For more information about the Company’s off-balance sheet transactions, see Note 15, “Derivative Instruments” and Note 22, “Commitments, Contingent Liabilities and Financial Instruments with Off-Balance Sheet Risk,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data.


Contractual Obligations

The following table presents, as of December 31, 2018,2021, significant fixed and determinable contractual obligations to third parties by payment date. The Note Reference below refers to the applicable footnote in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data.Data, in this report.

  Payments Due In:
 Note
Reference  
Less Than
One Year  
One to
Three
Years
Three to
Five Years
Over Five
Years
Total
Lease liabilities(1)
24$8,402 $14,697 $10,693 $54,507 $88,299 
Deposits without a stated maturity(2)
1012,494,341 — — — 12,494,341 
Time deposits(2)
101,089,198 272,292 48,721 1,172 1,411,383 
Short-term borrowings1113,947 — — — 13,947 
Federal Home Loan Bank advances12417 — — — 417 
Junior subordinated debentures12— — — 111,373 111,373 
Subordinated notes12— — 29,724 329,695 359,419 
Total contractual obligations$13,606,305 $286,989 $89,138 $496,747 $14,479,179 
(1)Represents the undiscounted cash flows.
(2)Excludes interest.

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. Standby letters of credit commit the Company to make payments on behalf of customers when certain specified future events occur. Both arrangements have credit risk essentially the same as that involved in extending loans to customers and are subject to the Company’s normal credit policies. Collateral (e.g., securities, receivables, inventory, equipment, etc.) is obtained based on management’s credit assessment of the customer.
Loan commitments and standby letters of credit do not necessarily represent future cash requirements of the Company. While the borrower has the ability to draw upon these commitments at any time (assuming the borrower’s compliance with the terms
55


   Payments Due In:
 
Note
Reference  
 
Less Than
One Year  
 
One to
Three
Years
 
Three to
Five Years
 
Over Five
Years
 Total
Operating leases7 $9,389
 $14,538
 $8,640
 $12,592
 $45,159
Deposits without a stated maturity(1)
11 7,765,773
 
 
 
 7,765,773
Time deposits(1)
11 1,389,489
 877,317
 93,697
 2,281
 2,362,784
Short-term borrowings12 387,706
 
 
 
 387,706
Federal Home Loan Bank advances13 1,759
 452
 1,340
 3,139
 6,690
Junior subordinated debentures13 
 
 
 109,636
 109,636
Subordinated notes13 
 
 
 147,239
 147,239
Other long-term debt13 53
 
 
 
 53
Total contractual obligations  $9,554,169
 $892,307
 $103,677
 $274,887
 $10,825,040
of the loan commitment), these commitments often expire without being drawn upon. The Company’s unfunded loan commitments and standby letters of credit outstanding at December 31, 2021 and 2020 were as follows:
(1)Excludes interest.
20212020
Loan commitments$3,104,940 $2,749,988 
Standby letters of credit89,830 90,597 
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 will continue this process as new commitments are entered into or existing commitments are renewed.
The Company utilizes derivative financial instruments, including interest rate contracts such as swaps, caps and/or floors, as part of its ongoing efforts to mitigate its interest rate risk exposure and to facilitate the needs of its customers. The Company enters into derivative instruments that are not designated as hedging instruments to help its commercial customers manage their exposure to interest rate fluctuations. To mitigate the interest rate risk associated with these customer contracts, the Company enters into an offsetting derivative contract position with other financial institutions. The Company manages its credit risk, or potential risk of default by its commercial customers, through credit limit approval and monitoring procedures. At December 31, 2021, the Company had notional amounts of $185,447 on interest rate contracts with corporate customers and $185,447 in offsetting interest rate contracts with other financial institutions to mitigate the Company’s rate exposure on its corporate customers’ contracts.
Additionally, the Company enters into interest rate lock commitments with its customers to mitigate the interest rate risk associated with the commitments to fund fixed-rate residential mortgage loans and also enters into forward commitments to sell residential mortgage loans to secondary market investors.
Finally, the Company enters into forward interest rate swap contracts on its FHLB borrowings and its junior subordinated debentures that are accounted for as cash flow hedges. Under each of these contracts, the Company pays a fixed rate of interest and receives a variable rate of interest based on the three-month or one-month LIBOR plus a predetermined spread. The Company entered into an interest rate swap contract on its subordinated notes that is accounted for as a fair value hedge. Under this contract, the Company pays a variable rate of interest based on the three-month LIBOR plus a predetermined spread and receives a fixed rate of interest.
For more information about the Company’s off-balance sheet transactions, see Note 14, “Derivative Instruments” and Note 19, “Commitments, Contingent Liabilities and Financial Instruments with Off-Balance Sheet Risk,” in the Notes to Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in this report.

Shareholders’ Equity and Regulatory Matters
Total shareholders’ equity of the Company was $2,043,913$2,209,853 and $1,514,983$2,132,733 at December 31, 20182021 and 2017,2020, respectively. Book value per share was $34.91$39.63 and $30.72$37.95 at December 31, 20182021 and 2017,2020, respectively. The growth in shareholders’ equity was attributable to the acquisition of Brand as well as earnings retention offset by dividends declared and changes in accumulated other comprehensive income.income, share repurchases and dividends declared.
The Company maintainsIn October 2021, the Company’s Board of Directors approved a shelf registration statement with the SEC. The shelf registration statement, which was effective upon filing, allowsstock repurchase program, authorizing the Company to raise capital from timerepurchase up to time through the sale$50,000 of its outstanding common stock, preferred stock, debt securities, warrants and units,either in open market purchases or a combination thereof, subject to market conditions. Specific terms and prices will be determined at the time of any offering under a separate prospectus supplement that the Company will be required to file with the SEC at the time of the specific offering.privately-negotiated transactions. The proceeds of the sale of securities, if and when offered, will be used for general corporate purposes as described in any prospectus supplement and could include the expansion of the Company’s banking, insurance and wealth management operations as well as other business opportunities. As discussed above under the heading “Financial Condition, Borrowings,” in August 2016 the Company completed its underwritten public offering of subordinated notes pursuant to this registration statement. In December 2016 the Company completed its underwritten public offering of 2,135,000 shares of the Company’s common stock pursuant to this registration statement at a public offering price of $41.50 per share.
The Company announced a $50 million stock repurchase program in October 2018. During the fourth quarter of 2018, the Company repurchased $7.1 million of common stock at a weighted average price of $35.48. The plan will remain in effect until the earlier of October 20192022 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 $109,636$111,373 at December 31, 2018,2021, of which $106,045$107,782 are included in the Company’s Tier 1 capital. Federal Reserve guidelines limit the amount of securities that, similar to our junior subordinated debentures, are includable in Tier 1 capital, but these guidelines did not impact the amount of debentures we include in Tier 1 capital. Although our existing junior subordinated debentures are currently unaffected by these Federal Reserve guidelines, on account of changes enacted as part of the Dodd-Frank Act, any new trust preferred securities are not includable in Tier 1 capital. Further, if as a result of an acquisition of another financial institution we exceed $15,000,000 in assets, or if we make any such acquisition after we have exceeded $15,000,000 in assets, we will lose Tier 1 treatment of our junior subordinated debentures.
The Company has subordinated notes with a carrying value of $147,239$359,419 at December 31, 2018,2021, of which $143,452$358,831 are included in the Company'sCompany’s Tier 2 capital. As previously discussed in the “Financial Condition” section above, in the fourth quarter of

56



2021, the Company issued $200,000 of its 3.00% fixed-to-floating rate subordinated notes due December 1, 2031, and it redeemed $45,000 of its outstanding notes.
The Federal Reserve, the FDIC and the Office of the Comptroller of the Currency have issued guidelines governing the levels of capital that bank holding companies and banks must maintain. Those guidelines specify capital tiers, which include the following classifications:
Capital Tiers
Tier 1 Capital to

Average Assets

(Leverage)
Common Equity Tier 1 to

Risk - Weighted Assets
Tier 1 Capital to

Risk - Weighted

Assets
Total Capital to

Risk - Weighted

Assets
Well capitalized5% or above6.5% or above8% or above10% or above
Adequately capitalized4% or above4.5% or above6% or above8% or above
UndercapitalizedLess than 4%Less than 4.5%Less than 6%Less than 8%
Significantly undercapitalizedLess than 3%Less than 3%Less than 4%Less than 6%
Critically undercapitalized Tangible Equity / Total Assets less than 2%
The following table includes the capital ratios and capital amounts for the Company and the Bank for the years presented:
 ActualMinimum Capital
Requirement to be
Well Capitalized
Minimum Capital
Requirement to be
Adequately
Capitalized (including the phase-in of the Capital Conservation Buffer)
 AmountRatioAmountRatioAmountRatio
December 31, 2021
Renasant Corporation:
Tier 1 leverage ratio$1,422,077 9.15 %$777,289 5.00 %$621,831 4.00 %
Common equity tier 1 capital ratio1,314,295 11.18 %763,952 6.50 %822,717 7.00 %
Tier 1 risk-based capital ratio1,422,077 12.10 %940,248 8.00 %999,014 8.50 %
Total risk-based capital ratio1,897,167 16.14 %1,175,610 10.00 %1,234,076 10.50 %
Renasant Bank:
Tier 1 leverage ratio$1,580,904 10.18 %$776,700 5.00 %$621,360 4.00 %
Common equity tier 1 capital ratio1,580,904 13.46 %763,713 6.50 %822,460 7.00 %
Tier 1 risk-based capital ratio1,580,904 13.46 %939,954 8.00 %998,702 8.50 %
Total risk-based capital ratio1,697,163 14.44 %1,174,943 10.00 %1,233,690 10.50 %
December 31, 2020
Renasant Corporation:
Tier 1 leverage ratio$1,306,597 9.37 %$697,579 5.00 %$558,063 4.00 %
Common equity tier 1 capital ratio1,199,394 10.93 %713,086 6.50 %767,939 7.00 %
Tier 1 risk-based capital ratio1,306,597 11.91 %877,644 8.00 %932,497 8.50 %
Total risk-based capital ratio1,653,694 15.07 %1,097,055 10.00 %1,151,908 10.50 %
Renasant Bank:
Tier 1 leverage ratio$1,369,994 9.83 %$696,738 5.00 %$557,391 4.00 %
Common equity tier 1 capital ratio1,369,994 12.49 %712,709 6.50 %767,533 7.00 %
Tier 1 risk-based capital ratio1,369,994 12.49 %877,181 8.00 %932,004 8.50 %
Total risk-based capital ratio1,504,985 13.73 %1,096,476 10.00 %151,299 10.50 %
As previously disclosed, the Company adopted CECL as of January 1, 2020. The Company has elected to take advantage of transitional relief offered by the Federal Reserve and FDIC to delay for two years the estimated impact of CECL on regulatory capital, followed by a three-year transitional period to phase out the capital benefit provided by the two-year delay.
57

 Actual 
Minimum Capital
Requirement to be
Well Capitalized
 
Minimum Capital
Requirement to be
Adequately
Capitalized (including the phase-in of the Capital Conservation Buffer)
 Amount Ratio Amount Ratio Amount Ratio
December 31, 2018           
Renasant Corporation:           
Tier 1 leverage ratio$1,188,412
 10.11% $587,939
 5.00% $470,352
 4.00%
Common equity tier 1 capital ratio1,085,751
 11.05% 638,468
 6.50% 626,189
 6.375%
Tier 1 risk-based capital ratio1,188,412
 12.10% 785,806
 8.00% 773,528
 7.875%
Total risk-based capital ratio1,386,507
 14.12% 982,258
 10.00% 969,979
 9.875%
Renasant Bank:           
Tier 1 leverage ratio$1,276,976
 10.88% $587,090
 5.00% $469,672
 4.00%
Common equity tier 1 capital ratio1,276,976
 13.02% 637,552
 6.50% 625,291
 6.375%
Tier 1 risk-based capital ratio1,276,976
 13.02% 784,679
 8.00% 772,418
 7.875%
Total risk-based capital ratio1,331,619
 13.58% 980,849
 10.00% 968,588
 9.875%
December 31, 2017           
Renasant Corporation:           
Tier 1 leverage ratio$979,604
 10.18% $481,086
 5.00% $384,968
 4.00%
Common equity tier 1 capital ratio896,733
 11.34% 513,827
 6.50% 454,539
 5.75%
Tier 1 risk-based capital ratio979,604
 12.39% 632,402
 8.00% 573,114
 7.25%
Total risk-based capital ratio1,142,926
 14.46% 790,503
 10.00% 731,215
 9.25%
Renasant Bank:           
Tier 1 leverage ratio$1,000,715
 10.42% $480,353
 5.00% $384,282
 4.00%
Common equity tier 1 capital ratio1,000,715
 12.69% 512,570
 6.50% 453,427
 5.75%
Tier 1 risk-based capital ratio1,000,715
 12.69% 630,856
 8.00% 571,713
 7.25%
Total risk-based capital ratio1,050,751
 13.32% 788,569
 10.00% 729,427
 9.25%

For a detailed discussion of the capital adequacy guidelines applicable to the Company and the Bank, please refer to the information under the heading “Capital Adequacy Guidelines” in the “Supervision and Regulation-Supervision and Regulation of Renasant Corporation” sectionssection and the “Supervision and Regulation-Supervision and Regulation of Renasant Bank” section in Item 1, Business.

Business, in this report.



58


Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”), this document contains certain non-GAAP financial measures, namely, return on average tangible shareholders’ equity, return on average tangible assets, the ratio of tangible equity to tangible assets, the ratio of the allowance for credit losses on loans to total loans, excluding PPP loans (the “adjusted allowance ratio”), and an adjusted efficiency ratio. TheseOther than the adjusted allowance ratio (which only excludes PPP loans), these non-GAAP financial measures adjust GAAP financial measures to exclude intangible assets and, with respect to the efficiency ratio, certain charges (such as, merger and conversionwhen applicable, COVID-19 related expenses, gains on sales of securities, debt prepayment penalties, restructuring charges, swap termination gains and loss share termination expense)charges and asset valuation adjustments) with respect to which the Company is unable to accurately predict when these charges will be incurred or, when incurred, the amount thereof. With respect to COVID-19 related expenses in particular, management added these expenses as a charge to exclude when calculating non-GAAP financial measures because the expenses included within this line item are readily quantifiable and possess the same characteristics with respect to management’s inability to accurately predict the timing or amount thereof as the other charges excluded when calculating non-GAAP financial measures. Management uses these non-GAAP financial measures to evaluate(other than the adjusted allowance ratio) when evaluating capital utilization and adequacy.adequacy, while it uses the adjusted allowance ratio to determine the adequacy of our allowance with respect to loans not fully guaranteed by the U.S. Small Business Administration. 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. Also, because intangible assets such as goodwill and the core deposit intangible and charges such as mergerdebt prepayment penalties, restructuring charges and conversionCOVID-19 related expenses can vary extensively from company to company and, as to intangible assets, are excluded from the calculation of a financial institution’s regulatory capital, the Company believes that the presentation of this non-GAAP financial information allows readers to more easily compare the Company’s results to information provided in other regulatory reports and the results of other companies. The reconciliations from GAAP to non-GAAP for these financial measures are below.
Return on average tangible shareholders' equity and Return on average tangible assets
202120202019
Net income (GAAP)$175,892 $83,651 $167,596 
   Amortization of intangibles6,042 7,121 8,105 
Tax effect of adjustment noted above (1)
(1,354)(1,382)(1,807)
Tangible net income (non-GAAP)$180,580 $89,390 $173,894 
Average shareholders' equity (GAAP)$2,209,409 $2,114,590 $2,107,832 
   Intangibles966,733 973,287 976,065 
Average tangible shareholders' equity (non-GAAP)$1,242,676 $1,141,303 $1,131,767 
Average total assets (GAAP)$15,905,986 $14,503,449 $12,875,986 
   Intangibles966,733 973,287 976,065 
Average tangible assets (non-GAAP)$14,939,253 $13,530,162 $11,899,921 
Return on (average) shareholders' equity (GAAP)7.96 %3.96 %7.95 %
   Effect of adjustment for intangible assets6.57 %3.87 %7.41 %
Return on average tangible shareholders' equity (non-GAAP)14.53 %7.83 %15.36 %
Return on (average) assets (GAAP)1.11 %0.58 %1.30 %
   Effect of adjustment for intangible assets0.10 %0.08 %0.16 %
Return on average tangible assets (non-GAAP)1.21 %0.66 %1.46 %
(1) Tax effect is calculated based on the respective periods’ effective tax rate.
59


Return on average tangible shareholders' equity and Return on average tangible assets
  2018 2017 2016 2015 2014
Net income (GAAP) $146,920
 $92,188
 $90,930
 $68,014
 $59,582
   Amortization of intangibles, net of tax 5,591
 4,358
 4,518
 4,137
 3,889
Tangible net income (non-GAAP) 152,511
 96,546
 95,448
 72,151
 63,471
  
        
Average shareholders' equity (GAAP) 1,701,334
 1,380,950
 1,116,038
 876,915
 691,802
   Intangibles 747,008
 565,507
 491,530
 379,469
 301,104
Average tangible shareholders' equity (non-GAAP) 954,326
 815,443
 624,508
 497,446
 390,698
  
        
Average total assets (GAAP) 11,104,567
 9,509,308
 8,416,510
 6,874,982
 5,816,517
   Intangibles 747,008
 565,507
 491,530
 379,469
 301,104
Average tangible assets (non-GAAP) 10,357,559
 8,943,801
 7,924,980
 6,495,513
 5,515,413
  
        
Return on (average) shareholders' equity (GAAP) 8.64% 6.68% 8.15% 7.76% 8.61%
   Effect of adjustment for intangible assets 7.34% 5.16% 7.13% 6.74% 7.64%
Return on average tangible shareholders' equity (non-GAAP) 15.98% 11.84% 15.28% 14.50% 16.25%
  
        
Return on (average) assets (GAAP) 1.32% 0.97% 1.08% 0.99% 1.02%
   Effect of adjustment for intangible assets 0.15% 0.11% 0.12% 0.12% 0.13%
Return on average tangible assets (non-GAAP) 1.47% 1.08% 1.20% 1.11% 1.15%
Tangible common equity ratio (Tangible shareholders' equity to tangible assets)
202120202019
Actual shareholders' equity (GAAP)$2,209,853 $2,132,733 $2,125,689 
   Intangibles963,781 969,823 976,943 
Actual tangible shareholders' equity (non-GAAP)$1,246,072 $1,162,910 $1,148,746 
Actual total assets (GAAP)$16,810,311 $14,929,612 $13,400,618 
   Intangibles963,781 969,823 976,943 
Actual tangible assets (non-GAAP)$15,846,530 $13,959,789 $12,423,675 
Tangible Common Equity Ratio
Shareholders' equity to actual assets (GAAP)13.15 %14.29 %15.86 %
   Effect of adjustment for intangible assets5.29 %5.96 %6.61 %
Tangible shareholders' equity to tangible assets (non-GAAP)7.86 %8.33 %9.25 %


Adjusted Efficiency Ratio
20212020
Interest income (fully tax equivalent basis)$475,404 $505,017 
Interest expense44,684 71,335 
Net interest income (fully tax equivalent basis)$430,720 $433,682 
Total noninterest income$226,984 $235,532 
Net gains on sales of securities2,170 46 
Swap termination gains4,676 — 
MSR valuation adjustment13,561 (11,726)
Adjusted noninterest income$206,577 $247,212 
Total noninterest expense$429,826 $471,988 
Intangible amortization6,042 7,121 
Debt prepayment penalty6,123 121 
Restructuring charges368 7,365 
Swap termination charges— 2,040 
COVID-19 related expenses1,511 10,343 
Provision (recovery) for unfunded commitments(500)9,200 
Adjusted noninterest expense$416,282 $435,798 
Efficiency Ratio (GAAP)65.35 %70.53 %
Adjusted Efficiency Ratio (non-GAAP)65.32 %64.00 %
60


Tangible common equity ratio (Tangible shareholders' equity to tangible assets)
 2018 2017 2016 2015 2014
Actual shareholders' equity (GAAP)$2,043,913
 $1,514,983
 $1,232,883
 $1,036,818
 $711,651
   Intangibles977,793
 635,556
 494,608
 474,682
 297,330
Actual tangible shareholders' equity (non-GAAP)1,066,120
 879,427
 738,275
 562,136
 414,321
          
Actual total assets (GAAP)12,934,878
 9,829,981
 8,699,851
 7,926,496
 5,805,129
   Intangibles977,793
 635,556
 494,608
 474,682
 297,330
Actual tangible assets (non-GAAP)11,957,085
 9,194,425
 8,205,243
 7,451,814
 5,507,799
          
Tangible Common Equity Ratio         
Shareholders' equity to actual assets (GAAP)15.80% 15.41% 14.17% 13.08% 12.26%
   Effect of adjustment for intangible assets6.88% 5.85% 5.17% 5.54% 4.74%
Tangible shareholders' equity to tangible assets (non-GAAP)8.92% 9.56% 9.00% 7.54% 7.52%
Return on average tangible shareholders' equity and Return on average tangible assets with exclusions
  2018 2017 2016
Net income (GAAP) $146,920
 $92,188
 $90,930
Merger and conversion expense, net of tax 11,095
 6,925
 2,694
Debt prepayment penalties, net of tax 
 137
 1,700
Loss share termination, net of tax 
 
 1,495
Revaluation of net deferred tax assets 
 14,486
 
Net income with exclusions (non-GAAP) 158,015
 113,736
 96,819
Amortization of intangibles, net of tax 5,591
 4,358
 4,518
Tangible net income with exclusions (non-GAAP) 163,606
 118,094
 101,337
    
 
Average shareholders' equity (GAAP) 1,701,334
 1,380,950
 1,116,038
Intangibles 747,008
 565,507
 491,530
Average tangible shareholders' equity (non-GAAP) 954,326
 815,443
 624,508
    
 
Average total assets (GAAP) 11,104,567
 9,509,308
 8,416,510
Intangibles 747,008
 565,507
 491,530
Average tangible assets (non-GAAP) 10,357,559
 8,943,801
 7,924,980
    
 
Return on average shareholders' equity with exclusions (non-GAAP) 9.29% 8.24% 8.68%
Effect of adjustment for intangible assets 7.85% 6.24% 7.55%
Return on average tangible shareholders' equity with exclusions (non-GAAP) 17.14% 14.48% 16.23%
    
 
Return on average assets with exclusions (non-GAAP) 1.42% 1.20% 1.15%
Effect of adjustment for intangible assets 0.16% 0.12% 0.13%
Return on average tangible assets with exclusions(non-GAAP) 1.58% 1.32% 1.28%


Adjusted Efficiency Ratio
  2018 2017 2016
Interest income (fully tax equivalent basis) $467,755
 $383,596
 $336,149
Interest expense 65,329
 37,853
 28,147
Net interest income (fully tax equivalent basis) 402,426
 345,743
 308,002
       
Total noninterest income 143,961
 132,140
 137,415
Net gains on sales of securities (16) 148
 1,186
Adjusted noninterest income 143,977
 131,992
 136,229
       
Total noninterest expense 345,029
 301,618
 295,099
Intangible amortization 7,179
 6,530
 6,747
Merger and conversion related expenses 14,246
 10,378
 4,023
Extinguishment of debt 
 205
 2,539
Loss share termination 
 
 2,053
Adjusted noninterest expense 323,604
 284,505
 279,737
       
Efficiency Ratio (GAAP) 63.15% 63.12% 66.25%
Adjusted Efficiency Ratio (non-GAAP) 59.22% 59.55% 62.97%
Allowance for Credit Losses on Loans to Total Loans, excluding PPP Loans
20212020
Total loans (GAAP)$10,020,914 $10,933,647 
Less PPP loans58,391 1,128,703 
Adjusted total loans (non-GAAP)$9,962,523 $9,804,944 
Allowance for Credit Losses on Loans$164,171 $176,144 
ACL/Total loans (GAAP)1.64 %1.61 %
ACL/Total loans excluding PPP loans (non-GAAP)1.65 %1.80 %
None of the non-GAAP financial measures the Company has included in this document is intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. Readers of this Form 10-K should note that, because there are no standard definitions for how to calculate the non-GAAP financial measures that we use as well as the results, the Company's calculations may not be comparable to similarly titled measures presented by other companies. 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.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Please refer to the discussion found under the headings “Risk Management – Interest Rate Risk” and “Liquidity and Capital Resources” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in this report for the disclosures required pursuant to this Item 7A.

SEC Form 10-K
A COPY OF THIS ANNUAL REPORT ON FORM 10-K, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, MAY BE OBTAINED WITHOUT CHARGE BY DIRECTING A WRITTEN REQUEST TO: JOHN S. OXFORD, SENIOR VICE PRESIDENT AND DIRECTOR OF MARKETING AND PUBLIC RELATIONS, RENASANT BANK, 209 TROY STREET, TUPELO, MISSISSIPPI, 38804-4827.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
61
Please refer to the discussion found under the headings “Risk Management – Interest Rate Risk” and “Liquidity and Capital Resources” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, for the disclosures required pursuant to this Item 7A.





ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements of the Company meeting the requirements of Regulation S-X are included on the succeeding pages of this Item. All schedules have been omitted because they are not required or are not applicable.

RENASANT CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2018, 20172021, 2020 and 20162019
CONTENTS
Page
Reports of Independent Registered Public Accounting Firm (Horne LLP, Memphis, TN PCAOB ID #: 171)



62


Report on Management’s Assessment of Internal Control over Financial Reporting
Renasant Corporation (the “Company”) is responsible for the preparation, integrity and fair presentation of the consolidated financial statements included in this annual report. The consolidated financial statements and notes included in this annual report have been prepared in conformity with accounting principles generally accepted in the United States and necessarily include some amounts that are based on management’s best estimates and judgments.
Management of the Company is responsible for establishing and maintaining effective internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. The Company’s internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of any unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
The system of internal control over financial reporting as it relates to the financial statements is evaluated for effectiveness by management and tested for reliability through a program of internal audits. Actions are taken to correct potential deficiencies as they are identified. Any system of internal control, no matter how well designed, has inherent limitations, including the possibility that a control can be circumvented or overridden, and misstatements due to error or fraud may occur and not be detected. Also, because of changes in conditions, internal control effectiveness may vary over time. Accordingly, even an effective system of internal control will provide only reasonable assurance with respect to financial statement preparation.
Management, with the participation of the Company’s principal executive officer and principal financial officer, conducted an assessment of the effectiveness of the Company’s system of internal control over financial reporting as of December 31, 2018,2021, based on criteria for effective internal control over financial reporting described in the “Internal Control - Integrated Framework,” (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has concluded that, as of December 31, 2018,2021, the Company’s system of internal control over financial reporting is effective and meets the criteria of the “Internal Control – Integrated Framework.” HORNE LLP, the Company’s independent registered public accounting firm that has audited the Company’s financial statements included in this annual report, has issued an attestation report on the Company’s internal control over financial reporting which is included herein.
rnst-20211231_g2.jpg
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C. Mitchell WaycasterKevin D. ChapmanJames C. Mabry IV
President andExecutive Vice President and
Chief Executive OfficerChief Financial and Operating Officer
February 27, 201925, 2022



63


Report of Independent Registered Public Accounting Firm


To the Shareholders and Board of Directors of Renasant Corporation


Opinion on the Financial Statements


We have audited the accompanying consolidated balance sheets of Renasant Corporation and its subsidiaries (the “Company”) as of December 31, 20182021 and 2017,2020, the related consolidated statements of income, comprehensive income, changes in shareholders'shareholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2018,2021, and the related notes to the consolidated financial statements (collectively, referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20182021 and 2017,2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018,2021, in conformity with accounting principles generally accepted in the United States of America.


We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”), the Company'sCompany’s internal control over financial reporting as of December 31, 2018,2021, based on criteria established in the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated February 27, 2019, 25, 2022, expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.


Basis for Opinion


These financial statements are the responsibility of the Company'sCompany’s management. Our responsibility is to express an opinion on the Company'sCompany’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the auditaudits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.


Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses - Loans

Description of the Matter

As described in Notes 1 and 5 to the financial statements, the Company’s allowance for credit losses (“ACL”) is a valuation allowance that reflects the Company's best estimate of expected credit losses inherent within the Company’s loans held for investment portfolio and is maintained at a level believed adequate by management to absorb credit losses inherent in the entire loan portfolio in accordance with Accounting Standards Codification ASC 326: Financial Instruments – Credit Losses. The ACL is measured over the contractual life of loans held for investment and for off-balance sheet commitments and is estimated using relevant available information relating to past events, current conditions, and reasonable and supportable forecasts, as well as qualitative adjustments. The ACL was $164,171,000 at December 31, 2021, which consisted of 1) $151,708,000 of loss allocations on pools of loans that share similar risk characteristics (“collectively evaluated loans”) and 2) $12,463,000 of loss allocations on individual loans that do not share risk characteristics with other loans and the measurement of expected credit losses for such individual loans (“individually evaluated loans”).

The Company’s measurement of expected credit losses of loans on a pool basis when the loans share similar risk characteristics is based off of historical data that is adjusted, as necessary, for both internal and external qualitative factors where there are
64


differences in the historical loss data of the Company and current or projected future conditions. Consideration of the relevant qualitative factors are used to bring the ACL to the level management believes is appropriate based on factors that are otherwise unaccounted for in the quantitative process. The ACL also includes reserves for loans evaluated on an individual basis, such as certain loans graded substandard or on nonaccrual. Management applies judgment in the determination of the qualitative factors and reserves assigned on an individual basis to estimate the ACL.

The ACL was identified by us as a critical audit matter because of the extent of auditor judgment applied and significant audit effort to evaluate the significant subjective and complex judgments made by management including the judgment required in evaluating management’s determination of the qualitative factors and the reserve assumptions for loans evaluated on an individual basis.

How We Addressed the Matter in Our Audit

The primary audit procedures we performed in response to this critical audit matter included:

a.Obtained an understanding of the Company’s process for establishing the ACL, including determination of the qualitative factors and reserve assumptions for loans evaluated on an individual basis, and evaluated the process utilized by management to challenge the model results and determine the best estimate of the ACL as of the balance sheet date.

b.Evaluated the design and tested the operating effectiveness of the controls associated with the ACL process, including controls around the reliability and accuracy of data used in the model, management’s review and approval of the selected qualitative factors, the reserve assumptions for loans evaluated on an individual basis, the governance of the credit loss methodology, and management’s review and approval of the ACL.

c.Assessed reasonableness of model methodology and key modeling assumptions, as well as the appropriateness of management’s qualitative framework, and reserve assumptions for loans evaluated on an individual basis.

d.Performed specific substantive tests of the model utilized, qualitative factors and the reserve assumptions for loans evaluated on an individual basis. We evaluated if qualitative factors were applied based on a comprehensive framework and compared the adjustments utilized by management to both internal portfolio metrics and external macroeconomic data (as applicable) to support adjustments and evaluate trends in such adjustments. Within our reserve testing for loans evaluated on an individual basis, we evaluated management’s assumptions, including collateral valuations. In addition, we evaluated the Company’s estimate of the overall ACL giving consideration to the Company’s borrowers, loan portfolio, and macroeconomic trends, independently obtained and compared such information to comparable financial institutions and considered whether new or contrary information existed.

/s/ HORNE LLP
/s/ HORNE LLP
We have served as the Company'sCompany’s auditor since 2005.
Memphis, Tennessee
February 27, 201925, 2022



65


Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of Renasant CorporationCorporation:
Opinion on the Internal Control Over Financial Reporting


We have audited Renasant Corporation and subsidiaries'Corporation’s (the "Company"“Company”) internal control over financial reporting as of December 31, 2018,2021, based on criteria established in the Internal Control - Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018,2021, based on criteria for effective internal control over financial reporting describedestablished in the Internal Control - Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.


We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”), the consolidated financial statements of the Company as of December 31, 20182021 and our report dated February 27, 201925, 2022 expressed an unqualified opinion.


Basis for Opinion


The Company'sCompany’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Report on Management'sManagement’s Assessment of Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company'sCompany’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.


Definition and Limitations of Internal Control Over Financial Reporting


A company'scompany’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company'scompany’s internal control over financial reporting includes those policies and procedures that (a)(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (b)(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (c)(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company'scompany’s assets that could have a material effect on the financial statements.


Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


/s/ HORNE LLP
Memphis, Tennessee
February 27, 201925, 2022



66


Renasant Corporation and Subsidiaries
Consolidated Balance Sheets
(In Thousands, Except Share Data)
 December 31,
 2018 2017
Assets   
Cash and due from banks$198,515
 $187,838
Interest-bearing balances with banks370,596
 93,615
Cash and cash equivalents569,111
 281,453
Securities available for sale, at fair value1,250,777
 671,488
Loans held for sale ($219,848 and $108,316 carried at fair value at December 31, 2018 and 2017, respectively)411,427
 108,316
Loans, net of unearned income:   
Non purchased loans and leases6,389,712
 5,588,556
Purchased loans2,693,417
 2,031,766
Total loans, net of unearned income9,083,129
 7,620,322
Allowance for loan losses(49,026) (46,211)
Loans, net9,034,103
 7,574,111
Premises and equipment, net209,168
 183,254
Other real estate owned:   
Non purchased4,853
 4,410
Purchased6,187
 11,524
Total other real estate owned, net11,040
 15,934
Goodwill932,928
 611,046
Other intangible assets, net44,865
 24,510
Bank-owned life insurance220,608
 175,863
Mortgage servicing rights48,230
 39,339
Other assets202,621
 144,667
Total assets$12,934,878
 $9,829,981
Liabilities and shareholders’ equity   
Liabilities   
Deposits   
Noninterest-bearing$2,318,706
 $1,840,424
Interest-bearing7,809,851
 6,080,651
Total deposits10,128,557
 7,921,075
Short-term borrowings387,706
 89,814
Long-term debt263,618
 207,546
Other liabilities111,084
 96,563
Total liabilities10,890,965
 8,314,998
Shareholders’ equity   
Preferred stock, $.01 par value – 5,000,000 shares authorized; no shares issued and outstanding
 
Common stock, $5.00 par value – 150,000,000 shares authorized; 59,296,725 and 49,990,248 shares issued, respectively; 58,546,480 and 49,321,231 shares outstanding, respectively296,483
 249,951
Treasury stock, at cost, 750,245 and 669,017 shares, respectively(24,245) (19,906)
Additional paid-in capital1,288,911
 898,095
Retained earnings500,660
 397,354
Accumulated other comprehensive loss, net of taxes(17,896) (10,511)
Total shareholders’ equity2,043,913
 1,514,983
Total liabilities and shareholders’ equity$12,934,878
 $9,829,981
 December 31,
 20212020
Assets
Cash and due from banks$182,710 $176,372 
Interest-bearing balances with banks1,695,255 456,831 
Cash and cash equivalents1,877,965 633,203 
Securities held to maturity, net of allowance for credit losses of $32 at December 31, 2021 (fair value of $415,552)416,357 — 
Securities available for sale, at fair value2,386,052 1,343,457 
Loans held for sale, at fair value453,533 417,771 
Loans, net of unearned income:
Non purchased loans and leases9,011,011 9,419,540 
Purchased loans1,009,903 1,514,107 
Total loans, net of unearned income10,020,914 10,933,647 
Allowance for credit losses(164,171)(176,144)
Loans, net9,856,743 10,757,503 
Premises and equipment, net293,122 300,496 
Other real estate owned:
Non purchased951 2,045 
Purchased1,589 3,927 
Total other real estate owned, net2,540 5,972 
Goodwill939,683 939,683 
Other intangible assets, net24,098 30,139 
Bank-owned life insurance287,359 230,609 
Mortgage servicing rights89,018 62,994 
Other assets183,841 207,785 
Total assets$16,810,311 $14,929,612 
Liabilities and shareholders’ equity
Liabilities
Deposits
Noninterest-bearing$4,718,124 $3,685,048 
Interest-bearing9,187,600 8,374,033 
Total deposits13,905,724 12,059,081 
Short-term borrowings13,947 21,340 
Long-term debt471,209 474,970 
Other liabilities209,578 241,488 
Total liabilities14,600,458 12,796,879 
Shareholders’ equity
Preferred stock, $0.01 par value – 5,000,000 shares authorized; no shares issued and outstanding— — 
Common stock, $5.00 par value – 150,000,000 shares authorized; 59,296,725 shares issued; 55,756,233 and 56,200,487 shares outstanding, respectively296,483 296,483 
Treasury stock, at cost, 3,540,492 and 3,096,238 shares, respectively(118,027)(101,554)
Additional paid-in capital1,300,192 1,296,963 
Retained earnings741,648 615,773 
Accumulated other comprehensive (loss) income, net of taxes(10,443)25,068 
Total shareholders’ equity2,209,853 2,132,733 
Total liabilities and shareholders’ equity$16,810,311 $14,929,612 
See Notes to Consolidated Financial Statements.

67



Renasant Corporation and Subsidiaries
Consolidated Statements of Income
(In Thousands, Except Share Data)
 Year Ended December 31,
 2018 2017 2016
Interest income     
Loans$428,374
 $344,472
 $302,314
Securities     
Taxable23,948
 18,531
 16,551
Tax-exempt6,456
 9,433
 9,814
Other3,076
 2,314
 459
Total interest income461,854
 374,750
 329,138
Interest expense     
Deposits49,760
 24,620
 17,856
Borrowings15,569
 13,233
 10,291
Total interest expense65,329
 37,853
 28,147
Net interest income396,525
 336,897
 300,991
Provision for loan losses6,810
 7,550
 7,530
Net interest income after provision for loan losses389,715
 329,347
 293,461
Noninterest income     
Service charges on deposit accounts34,660
 33,224
 31,875
Fees and commissions23,868
 21,934
 18,814
Insurance commissions8,590
 8,361
 8,508
Wealth management revenue13,540
 11,884
 11,652
Mortgage banking income50,142
 43,415
 49,443
Net (losses) gains on sales of securities(16) 148
 1,186
BOLI income4,644
 4,353
 4,635
Other8,533
 8,821
 11,302
Total noninterest income143,961
 132,140
 137,415
Noninterest expense     
Salaries and employee benefits214,294
 184,540
 172,448
Data processing18,627
 16,474
 17,723
Net occupancy and equipment42,111
 37,756
 34,394
Other real estate owned1,892
 2,470
 5,696
Professional fees8,753
 7,150
 7,970
Advertising and public relations9,464
 8,248
 7,080
Intangible amortization7,179
 6,530
 6,747
Communications8,318
 7,578
 8,329
Merger and conversion related expenses14,246
 10,378
 4,023
Extinguishment of debt
 205
 2,539
Loss share termination
 
 2,053
Other20,145
 20,289
 26,097
Total noninterest expense345,029
 301,618
 295,099
Income before income taxes188,647
 159,869
 135,777
Income taxes41,727
 67,681
 44,847
Net income$146,920
 $92,188
 $90,930
Basic earnings per share$2.80
 $1.97
 $2.18
Diluted earnings per share$2.79
 $1.96
 $2.17
Cash dividends per common share$0.80
 $0.73
 $0.71
 Year Ended December 31,
 202120202019
Interest income
Loans$435,464 $466,432 $501,336 
Securities
Taxable24,732 24,224 29,875 
Tax-exempt6,800 6,287 5,477 
Other1,689 1,189 5,892 
Total interest income468,685 498,132 542,580 
Interest expense
Deposits28,976 54,016 81,995 
Borrowings15,708 17,319 16,928 
Total interest expense44,684 71,335 98,923 
Net interest income424,001 426,797 443,657 
(Recovery of) provision for credit losses on loans(1,700)85,350 7,050 
Provision for credit losses on HTM securities32 — — 
Provision for other credit losses— 1,500 — 
(Recovery of) provision for credit losses(1,668)86,850 7,050 
Net interest income after provision for credit losses425,669 339,947 436,607 
Noninterest income
Service charges on deposit accounts36,569 31,326 35,972 
Fees and commissions15,732 13,043 19,430 
Insurance commissions9,841 8,990 8,919 
Wealth management revenue20,455 16,504 14,433 
Mortgage banking income109,604 150,499 57,896 
Swap termination gains4,676 — — 
Net gains on sales of securities2,170 46 348 
BOLI income7,366 5,627 6,109 
Other20,571 9,497 10,147 
Total noninterest income226,984 235,532 153,254 
Noninterest expense
Salaries and employee benefits280,627 302,388 250,784 
Data processing21,726 20,685 19,679 
Net occupancy and equipment46,837 54,080 49,553 
Other real estate owned253 2,754 2,013 
Professional fees11,776 11,293 10,166 
Advertising and public relations12,203 10,322 11,607 
Intangible amortization6,042 7,121 8,105 
Communications8,869 8,866 8,858 
Merger and conversion related expenses— — 279 
Restructuring charges368 7,365 — 
Swap termination charges— 2,040 — 
Debt prepayment penalty6,123 121 54 
Other35,002 44,953 13,076 
Total noninterest expense429,826 471,988 374,174 
Income before income taxes222,827 103,491 215,687 
Income taxes46,935 19,840 48,091 
Net income$175,892 $83,651 $167,596 
Basic earnings per share$3.13 $1.49 $2.89 
Diluted earnings per share$3.12 $1.48 $2.88 
Cash dividends per common share$0.88 $0.88 $0.87 
See Notes to Consolidated Financial Statements.

68



Renasant Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income
(In Thousands)
 Year Ended December 31,
 2018 2017 2016
Net income$146,920
 $92,188
 $90,930
Other comprehensive income, net of tax:     
Securities available for sale:     
Unrealized holding losses on securities(8,315) (2,218) (6,206)
Reclassification adjustment for losses (gains) realized in net income12
 (91) (727)
Unrealized holding gains on securities transferred from held to maturity to available for sale
 8,108
 
Amortization of unrealized holding gains on securities transferred to the held to maturity category
 (173) (61)
Total securities available for sale(8,303) 5,626
 (6,994)
Derivative instruments:     
Unrealized holding gains on derivative instruments365
 536
 527
Total derivative instruments365
 536
 527
Defined benefit pension and post-retirement benefit plans:     
Net gain arising during the period308
 1,028
 31
Amortization of net actuarial loss recognized in net periodic pension cost245
 249
 302
Reclassification adjustment for net settlement gain realized in net income
 
 (235)
Total defined benefit pension and post-retirement benefit plans553
 1,277
 98
Other comprehensive (loss) income, net of tax(7,385) 7,439
 (6,369)
Comprehensive income$139,535
 $99,627
 $84,561
 Year Ended December 31,
 202120202019
Net income$175,892 $83,651 $167,596 
Other comprehensive income, net of tax:
Securities available for sale:
Unrealized holding (losses) gains on securities(38,371)20,717 18,625 
Reclassification adjustment for (gains) losses realized in net income(1,618)(34)1,872 
Amortization of unrealized holding gains on securities transferred to the held to maturity category(54)— — 
Total securities available for sale(40,043)20,683 20,497 
Derivative instruments:
Unrealized holding gains (losses) on derivative instruments8,087 688 (2,217)
Reclassification adjustment for (gains) losses realized in net income related to swap termination(3,486)1,521 — 
Total derivative instruments4,601 2,209 (2,217)
Defined benefit pension and post-retirement benefit plans:
Net (loss) gain arising during the period(264)797 68 
Reclassification adjustment for settlement loss related to the VERP realized in net income— 422 — 
New prior service cost— (362)— 
Amortization of net actuarial loss recognized in net periodic pension cost195 193 312 
Amortization of prior service cost— 362 — 
Total defined benefit pension and post-retirement benefit plans(69)1,412 380 
Other comprehensive (loss) income, net of tax(35,511)24,304 18,660 
Comprehensive income$140,381 $107,955 $186,256 
See Notes to Consolidated Financial Statements.

69



Renasant Corporation and Subsidiaries
Consolidated Statements of Changes in Shareholders’ Equity
(In Thousands, Except Share Data)
  
Common Stock Treasury Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss)  
 Shares Amount     Total
Balance at January 1, 201640,293,291
 $206,460
 $(22,385) $585,938
 $276,340
 $(9,535) $1,036,818
Net income        90,930
   90,930
Other comprehensive income (loss)          (6,369) (6,369)
Comprehensive income            84,561
Cash dividends ($0.71 per share)        (29,734)   (29,734)
Common stock issued in connection with an acquisition1,680,021
 8,400
 

 46,890
     55,290
Common stock issued in public offering2,135,000
 10,675
 

 73,430
     84,105
Issuance of common stock for stock-based compensation awards223,961
   693
 (2,345)     (1,652)
Stock-based compensation expense      3,117
     3,117
Other, net      378
 
   378
Balance at December 31, 201644,332,273
 $225,535
 $(21,692) $707,408
 $337,536
 $(15,904) $1,232,883
Net income        92,188
   92,188
Other comprehensive income          7,439
 7,439
Comprehensive income            99,627
Reclassification of the income tax effects of the Tax Cuts and Jobs Act to Retained earnings        2,046
 (2,046) 
Cash dividends ($0.73 per share)        (34,416)   (34,416)
Common stock issued in connection with an acquisition4,883,182
 24,416
 

 189,174
     213,590
Issuance of common stock for stock-based compensation awards105,776
   1,786
 (3,976)     (2,190)
Stock-based compensation expense      5,293
     5,293
Other, net      196
 

   196
Balance at December 31, 201749,321,231
 $249,951
 $(19,906) $898,095
 $397,354
 $(10,511) $1,514,983
Net income        146,920
   146,920
Other comprehensive income (loss)          (7,385) (7,385)
Comprehensive income            139,535
Repurchase of shares in connection with stock repurchase program(199,065)   (7,062)       (7,062)
Cash dividends ($0.80 per share)        (43,614)   (43,614)
Common stock issued in connection with an acquisition9,306,477
 46,532
 

 387,987
     434,519
Repurchase of shares in connection with acquisition related to stock-based compensation awards(2,000)   (93)       (93)
Issuance of common stock for stock-based compensation awards119,837
   2,816
 (4,679)     (1,863)
Stock-based compensation expense      7,251
     7,251
Other, net      257
 

   257
Balance at December 31, 201858,546,480
 $296,483
 $(24,245) $1,288,911
 $500,660
 $(17,896) $2,043,913
  
Common StockTreasury StockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss) 
 SharesAmountTotal
Balance at January 1, 201958,546,480 $296,483 $(24,245)$1,288,911 $500,660 $(17,896)$2,043,913 
Net income— — — — 167,596 — 167,596 
Other comprehensive income— — — — — 18,660 18,660 
Comprehensive income186,256 
Repurchase of shares in connection with stock repurchase program(1,820,202)— (62,944)— — — (62,944)
Cash dividends ($0.87 per share)— — — — (50,901)— (50,901)
Issuance of common stock for stock-based compensation awards128,724 — 4,000 (4,831)— — (831)
Stock-based compensation expense— — — 10,196 — — 10,196 
Balance at December 31, 201956,855,002 $296,483 $(83,189)$1,294,276 $617,355 $764 $2,125,689 
Cumulative effect adjustment due to the adoption of ASU 2016-13— — — — (35,099)— (35,099)
Net income— — — — 83,651 — 83,651 
Other comprehensive income— — — — — 24,304 24,304 
Comprehensive income107,955 
Repurchase of shares in connection with stock repurchase program(818,886)— (24,569)— — — (24,569)
Cash dividends ($0.88 per share)— — — — (50,134)— (50,134)
Issuance of common stock for stock-based compensation awards164,371 — 6,204 (7,890)— — (1,686)
Stock-based compensation expense— — — 10,577 — — 10,577 
Balance at December 31, 202056,200,487 $296,483 $(101,554)$1,296,963 $615,773 $25,068 $2,132,733 
Net income— — — — 175,892 — 175,892 
Other comprehensive loss— — — — — (35,511)(35,511)
Comprehensive income140,381 
Repurchase of shares in connection with stock repurchase program(612,107)— (21,315)— — — (21,315)
Cash dividends ($0.88 per share)— — — — (50,017)— (50,017)
Issuance of common stock for stock-based compensation awards167,853 — 4,842 (6,845)— — (2,003)
Stock-based compensation expense— — — 10,074 — — 10,074 
Balance at December 31, 202155,756,233 $296,483 $(118,027)$1,300,192 $741,648 $(10,443)$2,209,853 
See Notes to Consolidated Financial Statements.

70



Renasant Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(In Thousands, Except Share Data)
 Year Ended December 31,
 2018 2017 2016
Operating activities     
Net income$146,920
 $92,188
 $90,930
Adjustments to reconcile net income to net cash provided by operating activities:     
Provision for loan losses6,810
 7,550
 7,530
Depreciation, amortization and accretion3,496
 4,832
 3,091
Deferred income tax expense16,444
 23,461
 11,037
Revaluation of net deferred tax assets due to changes in tax law
 14,486
 
Funding of mortgage loans held for sale(1,763,246) (1,683,454) (1,951,144)
Proceeds from sales of mortgage loans held for sale1,698,141
 1,775,450
 2,031,036
Gains on sales of mortgage loans held for sale(40,318) (19,675) (31,654)
Losses (gains) on sales of securities16
 (148) (1,186)
Loss on extinguishment of debt
 205
 2,539
(Gains) losses on sales of premises and equipment(198) 565
 115
Stock-based compensation7,251
 5,293
 3,117
Decrease in FDIC loss share indemnification asset, net of accretion and amortization
 
 2,891
Loss on termination of FDIC loss share agreements
 
 2,053
Decrease (increase) in other assets44,044
 (6,620) 10,136
Decrease in other liabilities(41,954) (12,572) (16,694)
Net cash provided by operating activities77,406
 201,561
 163,797
Investing activities     
Purchases of securities available for sale(686,887) (210,190) (140,133)
Proceeds from sales of securities available for sale2,387
 495,340
 4,028
Proceeds from call/maturities of securities available for sale160,703
 169,445
 158,359
Purchases of securities held to maturity
 
 (15,267)
Proceeds from call/maturities of securities held to maturity
 15,882
 119,405
Net increase in loans(115,208) (440,205) (504,640)
Purchases of premises and equipment(22,360) (13,047) (13,560)
Proceeds from sales of premises and equipment921
 2,101
 2,462
Proceeds from sales of other assets8,361
 14,131
 16,939
Payment made to FDIC to terminate loss share agreements
 
 (4,849)
Net cash received in acquisition153,502
 41,685
 25,263
Net cash (used in) provided by investing activities(498,581) 75,142
 (351,993)
Financing activities     
Net increase in noninterest-bearing deposits49,087
 11,588
 209,943
Net increase (decrease) in interest-bearing deposits447,317
 (88,717) 279,146
Net increase (decrease) in short-term borrowings263,753
 (19,862) (314,952)
Proceeds from long-term debt
 
 98,385
Repayment of long-term debt(849) (170,240) (47,230)
Cash paid for dividends(43,614) (34,416) (29,734)
Repurchase of shares in connection with stock repurchase program(7,062) 
 
Cash received on exercise of stock options201
 173
 415
Excess tax benefits from exercise of stock options
 
 2,771
Proceeds from equity offering
 
 84,105
Net cash provided by (used in) financing activities708,833
 (301,474) 282,849
Net increase (decrease) in cash and cash equivalents287,658
 (24,771) 94,653
Cash and cash equivalents at beginning of year281,453
 306,224
 211,571
Cash and cash equivalents at end of year$569,111
 $281,453
 $306,224

 Year Ended December 31,
 202120202019
Operating activities
Net income$175,892 $83,651 $167,596 
Adjustments to reconcile net income to net cash provided by operating activities:
(Recovery of) provision for credit losses(1,668)86,850 7,050 
Depreciation, amortization and accretion47,350 34,633 8,185 
Deferred income tax expense (benefit)11,411 (13,662)20,041 
Funding of mortgage loans held for sale(4,059,927)(4,479,421)(2,381,178)
Proceeds from sales of mortgage loans held for sale4,116,106 4,530,328 2,328,607 
Gains on sales of mortgage loans held for sale(82,399)(150,406)(45,854)
Valuation adjustment to mortgage servicing rights(13,561)11,726 1,836 
Gains on sales of securities(2,170)(46)(348)
Debt prepayment penalty6,123 121 54 
(Gains) losses on sales of premises and equipment(840)38 (881)
Stock-based compensation10,074 10,577 10,196 
Net change in other loans held for sale— — 59,885 
(Increase) decrease in other assets(20,812)(59,224)683 
(Decrease) increase in other liabilities(42,920)27,077 (12,249)
Net cash provided by operating activities142,659 82,242 163,623 
Investing activities
Purchases of securities available for sale(2,107,934)(515,657)(492,018)
Proceeds from sales of securities available for sale176,455 44,906 212,485 
Proceeds from call/maturities of securities available for sale458,020 437,981 262,287 
Purchases of securities held to maturity(52,135)— — 
Proceeds from call/maturities of securities held to maturity2,246 — — 
Net decrease (increase) in loans910,063 (1,233,232)(465,182)
Purchases of premises and equipment(20,516)(28,270)(34,966)
Proceeds from sales of premises and equipment9,813 — 3,728 
Purchase of bank-owned life insurance(50,000)— — 
Net change in FHLB stock3,980 18,840 (11,315)
Proceeds from sales of other assets6,342 8,438 18,404 
Net cash paid in acquisition— — (250)
Other, net3,663 1,446 917 
Net cash used in investing activities(660,003)(1,265,548)(505,910)
Financing activities
Net increase in noninterest-bearing deposits1,033,076 1,133,278 233,064 
Net increase (decrease) in interest-bearing deposits813,567 712,781 (147,139)
Net (decrease) increase in short-term borrowings(7,393)(467,872)101,385 
Proceeds from long-term debt197,061 98,266 150,000 
Repayment of long-term debt(202,873)(171)(35,359)
Cash paid for dividends(50,017)(50,134)(50,901)
Repurchase of shares in connection with stock repurchase program(21,315)(24,569)(62,944)
Net cash provided by financing activities1,762,106 1,401,579 188,106 
Net increase (decrease) in cash and cash equivalents1,244,762 218,273 (154,181)
Cash and cash equivalents at beginning of year633,203 414,930 569,111 
Cash and cash equivalents at end of year$1,877,965 $633,203 $414,930 
See Notes to Consolidated Financial Statements.         81         71







Renasant Corporation and Subsidiaries
Consolidated Statements of Cash Flows (continued)



Year Ended December 31, Year Ended December 31,
2018 2017 2016 202120202019
Supplemental disclosures     Supplemental disclosures
Cash paid for interest$66,706
 $36,888
 $25,871
Cash paid for interest$45,745 $73,686 $98,396 
Cash paid for income taxes$24,520
 $32,556
 $22,731
Cash paid for income taxes$50,977 $39,989 $26,727 
Noncash transactions:     Noncash transactions:
Transfers of loans to other real estate$3,826
 $6,699
 $8,870
Transfers of loans to other real estate$3,180 $8,588 $4,764 
Financed sales of other real estate owned$531
 $773
 $2,070
Financed sales of other real estate owned$577 $148 $611 
Transfers of loans held for sale to loan portfolio$1,732
 $563
 $17,838
Common stock issued in acquisition of businesses$434,519
 $213,590
 $55,290
Transfers of mortgage loans held for sale to loans held for investmentTransfers of mortgage loans held for sale to loans held for investment$— $— $189 
Transfers of other loans held for sale to loans held for investmentTransfers of other loans held for sale to loans held for investment$— $— $134,335 
Recognition of operating right-of-use assetsRecognition of operating right-of-use assets$8,142 $9,393 $91,181 
Recognition of operating lease liabilitiesRecognition of operating lease liabilities$8,142 $9,393 $94,700 
Available for sale securities transferred to held to maturity securitiesAvailable for sale securities transferred to held to maturity securities$366,886 $— $— 
See Notes to Consolidated Financial Statements.

72


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements



Note 1 – Significant Accounting Policies
(Dollar amounts in thousands)
Nature of Operations: Renasant Corporation (referred to herein as the “Company”) owns and operates Renasant Bank (“Renasant Bank” or the “Bank”) and, Renasant Insurance, Inc. and Park Place Capital Corporation. Through its subsidiaries, the Company offers a diversified range of financial, wealth management, fiduciary and insurance services to its retail and commercial customers from full service offices located throughout northAlabama, Florida, Georgia, Mississippi, North Carolina, South Carolina and central Mississippi, Tennessee, Alabama, Georgia and Florida.Tennessee.
Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Consolidation: The accompanying Consolidated Financial Statements and these Notes to Consolidated Financial Statements include the accounts of the Company and its consolidated subsidiaries, all of which are wholly-owned. All intercompany balances and transactions have been eliminated. Certain prior year amounts have been reclassified to conform to the current year presentation. Reclassifications had no effect on prior years’ net income or shareholders’ equity.
Cash and Cash Equivalents: The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
Securities: Debt securities are classified as held to maturity when purchased if management has the positive intent and ability to hold the securities to maturity. Held to maturity securities are stated at amortized cost. Presently, the Company has no intention of establishing a trading classification. Securities not classified as held to maturity or trading are classified as available for sale. Available for sale securities are stated at fair value, with the unrealized gains and losses, net of tax, reported in accumulated other comprehensive income within shareholders’ equity.
The amortized cost of securities, regardless of classification, is adjusted for amortization of premiums and accretion of discounts. Such amortization and accretion is included in interest income from securities, as is dividend income. Realized gains and losses on sales of securities are reflected under the line item “Net gains on sales of securities” on the Consolidated Statements of Income. The cost of securities sold is based on the specific identification method.
The Company evaluates its allowance for credit losses on the held to maturity investment portfolio for other-than-temporary-impairment (“OTTI”) on a quarterly basis in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic (“ASC”) 326, “Financial Instruments - Credit Losses (“ASC 320, “Investments - Debt326”). Expected credit losses on debt securities classified as held to maturity are measured on a collective basis by major security type. The estimates of expected credit losses are based on historical default rates, investment grades, current conditions, and Equity Securities.” Impairmentreasonable and supportable forecasts about the future. The allowance is assessed atincreased through provision for credit losses and decreased by charge-offs, net of recoveries of amounts previously charged-off. All of the individual security level. residential and commercial mortgage-backed securities recorded as held to maturity are issued by U.S. Government agencies and GSEs. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. The state and political subdivision securities are highly rated by major rating agencies.
The Company considersalso evaluates available for sale investment securities in an investment security impaired if the fair value of the security is less than its cost or amortized costunrealized loss position on a quarterly basis. Impairment is considered to be other-than-temporary ifIf the Company intends to sell the investment security or if the Company doesit is more likely than not expect to recover the entire amortized cost basis of the security before the Company isthat it will be required to sell before recovery, the security or the security’s maturity. When impairment of an equity security is considered to be other-than-temporary, the security is written down to its fair value and an impairmententire unrealized loss is recorded as a loss within noninterest income in the Consolidated Statements of Income. When impairmentIncome with a corresponding adjustment to the amortized cost basis of a debt security is considered to be other-than-temporary, the security is written down to its fair value. The amount of OTTI recorded as a loss within noninterest income depends on whether an entity intendssecurity. If the Company does not intend to sell the debt security and whether it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis. If an entity intends to, or has decided to, sell the debt security or more likely than notit will be required to sell the security before recovery of its amortized cost basis, OTTI must be recognized in earnings in an amount equal to the entire difference betweenCompany evaluates if any of the security’s amortized cost basis and its fair value. If an entity does not intend to sell the debt security and itunrealized loss is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis, OTTI is separated into the amount representing credit loss and the amount related to all other market factors.a potential credit loss. The amount, if any, related to credit loss is recognized in earnings as a provision for credit loss and a corresponding allowance for credit losses is established and each is calculated as the difference between the estimate of discounted future cash flows and the amortized cost basis of the security. A number of qualitative and quantitative factors, including but not limited to the financial condition of the underlying issuer and current and projected deferrals or defaults, are considered by management in the estimate of the discounted future cash flows. The remaining difference between the fair value and the amortized cost basis of the security is considered the amount related to other market factors and is recognized in other comprehensive income, net of applicable taxes.
Debt securities may be transferred
73


Renasant Corporation and Subsidiaries
Notes to nonaccrual status where the recognitionConsolidated Financial Statements
Note 1 – Significant Accounting Policies (continued)

Recognition of investment interest is discontinued.discontinued on debt securities that are transferred to nonaccrual status. A number of qualitative factors, including but not limited to the financial condition of the underlying issuer and current and projected deferrals or defaults, are considered by management in the determination of whether the debt security should be transferred to nonaccrual status. The interest on nonaccrual investment securities is accounted for on the cash-basis method until the debt security qualifies for return to accrual status. See Note 3,2, “Securities,” for further details regarding the Company’s securities portfolio.

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 – Significant Accounting Policies (continued)


Securities Sold Under Agreements to Repurchase: Securities sold under agreements to repurchase are accounted for as collateralized financing transactions and are recorded at the amounts at which the securities were sold. Securities, generally U.S. government and federal agency securities, pledged as collateral under these financing arrangements cannot be sold or repledged by the secured party.
Loans Held for Sale: Residential mortgage loans held for sale are included in the line item “Loans held for sale” on the Company’s Consolidated Balance Sheet.Sheets. The Company has elected to carry these loans at fair value as permitted under the guidance in ASC 825, “Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 825, “Financial Instruments”Instruments (“ASC 825”). Gains and losses are realized at the time consideration is received and all other criteria for sales treatment have been met. These realized and unrealized gains and losses are classified under the line item “Mortgage banking income” on the Consolidated Statements of Income.
In connection with the acquisition of Brand, the Company acquired a portfolio of non-mortgage consumer loans, which are also included in the line item “Loans held for sale” on the Company’s Consolidated Balance Sheet as of December 31, 2018. The Company is currently evaluating its long-term plans with respect to this portfolio. In accordance with ASC Topic 850, “Business Combinations”, these loans were measured at fair value as of the acquisition date. Subsequent to the acquisition date, these loans are carried at the lower of amortized cost or fair value.
Loans and the Allowance for LoanCredit Losses: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their amortized cost or outstanding unpaid principal balances, in either case adjusted for charge-offs, the allowance for loancredit losses, and any deferred fees or costs on originated loans and any purchase discounts or premiums on purchased loans. Renasant Bank defers certain nonrefundable loan origination fees as well as the direct costs of originating or acquiring loans. The deferred fees and costs are then amortized over the term of the note for all loans with payment schedules. Loans with no payment schedule are amortized using the interest method. The amortization of these deferred fees is presented as an adjustment to the yield on loans. Interest income is accrued on the unpaid principal balance.
Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Generally, the recognition of interest on mortgage and commercial and industrial loans is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Consumer and other retail loans are typically charged-off no later than the time the loan is 120 days past due. In all cases, loans are placed on nonaccrual status or charged-off at an earlier date if collection of principal or interest is considered doubtful. Loans may be placed on nonaccrual regardless of whether or not such loans are considered past due. All interest accrued for the current year, but not collected, for loans that are placed on nonaccrual or charged-off is reversed against interest income.income, the amount of which was immaterial for the years ended December 31, 2021, 2020 and 2019. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Interest income recognized on nonaccrual loans was immaterial for the year ended December 31, 2021. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.
A loan is considered impaired when, based on current information and events, it is probable that As a result, the Company will be unablehas made an accounting policy election to collectexclude accrued interest from the scheduled paymentsmeasurement of principal orthe allowance for credit losses. As of December 31, 2021 and 2020, the Company has accrued interest when due accordingreceivable for loans of $41,692 and $56,459, respectively, which is recorded in the “Other assets” line item on the Consolidated Balance Sheets. Although the Company made the election to exclude accrued interest from the contractual termsmeasurement of the allowance for credit losses, the Company did have an allowance for credit losses on interest deferred as part of the loan agreement. Impairment is measured on a loan-by-loan basis for commercial and construction loans above a minimum dollar amount threshold by, as applicable, the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are evaluated collectively for impairment. When the ultimate collectability of an impaired loan’s principal isdeferral program implemented in doubt, wholly or partially, all cash receipts are applied to principal. Once the recorded balance has been reduced to zero, future cash receipts are applied to interest income,response to the extent any interest has been foregone,COVID-19 pandemic of $1,273 and then they are recorded$1,500, respectively, as recoveries of any amounts previously charged-off. For impaired loans, a specific reserve is established to adjust the carrying value of the loan to its estimated net realizable value.December 31, 2021 and 2020.
Restructured loans are those for which concessions have been granted to the borrower due to a deterioration of the borrower’s financial condition and are performing in accordance with the new terms. Such concessions may include reduction in interest rates or deferral of interest or principal payments. In evaluating whether to restructure a loan, management analyzes the long-term financial condition of the borrower, including guarantor and collateral support, to determine whether the proposed concessions will increase the likelihood of repayment of principal and interest. Restructured loans that are not performing in accordance with their restructured terms that are either contractually 90 days past due or have been placed on nonaccrual status are reported as nonperforming loans.
The allowance for loancredit losses is an estimate of expected losses inherent within the Company’s loans held for investment portfolio and is maintained at a level believed adequate by management to absorb probable credit losses inherent in the entire loan portfolio. The appropriate levelportfolio in accordance with ASC 326. Management evaluates the adequacy of the allowance for credit losses on a quarterly basis. Expected credit loss inherent in non-cancellable off-balance-sheet credit exposures is based on an ongoing analysis of the loan portfolio and represents an amount that management deems adequate to provideaccounted for inherent losses, including collective impairment as recognizeda separate liability

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under ASC 450, “Contingencies.” Collective impairmentin the Consolidated Balance Sheets. The allowance for credit losses for loans held for investment, as reported in the Company’s Consolidated Balance Sheets, is calculated based on loans groupedadjusted by grade. Another component of the allowancea provision for credit losses, which is reported in earnings, and reduced by net charge-offs. Loan losses on loans assessed as impaired under ASC 310, “Receivables” (“ASC 310”). The balance of these loans and their related allowance is included in management’s estimation and analysis ofare charged against the allowance for credit losses when management believes the uncollectability of a loan losses. Managementbalance is confirmed. Subsequent recoveries, if any, are credited to the allowance.
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 internal loan review staff evaluateresults of those evaluations are utilized in underwriting new loans and in the adequacyCompany’s process for the estimation of the allowance for loan losses quarterly. The allowance for loan losses is evaluated based on a continuingexpected credit losses. Credit quality monitoring procedures and indicators can include an assessment of problem loans, the types of loans, historical loss experience, new lending products, emerging credit trends, changes in the size and character of loan categories and other factors, including itsthe Company’s risk rating system, regulatory guidance and economic conditions.conditions, such as the unemployment rate and GDP growth in the markets in which the Company operates, as well as trends in the market values of underlying collateral securing loans, all as determined based on input from management, loan review staff and other sources. This evaluation is complex and inherently subjective, as it requires estimates by management that are inherently uncertain and therefore susceptible to significant revision as more information becomes available. In future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and provision for credit losses in those future periods.
The methodology for estimating the amount of expected credit losses reported in the allowance for credit losses has two basic components: first, a collective or pooled component for estimating expected credit losses for pools of loans that share similar risk characteristics; and second, an asset-specific component involving individual loans that do not share risk characteristics with other loans and the measurement of expected credit losses for such individual loans.
Loans Evaluated on a Collective (Pool) Basis
The allowance for credit losses for loans that share similar risk characteristics with other loans is calculated on a collective or pool basis, where such loans are segregated into loan portfolio segments based upon similarity of credit risk. The Company’s primary loan portfolio segments are as follows:
Commercial, Financial, and Agricultural (“Commercial”) - Commercial loans are customarily granted to established local business customers in the Company’s market area on a collateralized basis to meet their credit needs. Maturities are typically short term in nature and are commensurate with the secondary source of repayment that serves as the Company’s collateral. Although commercial loans may be collateralized by equipment or other business assets, the repayment of this type of loan depends primarily on the creditworthiness and projected cash flow of the borrower (and any guarantors). Thus, the chief considerations when assessing the risk of a commercial loan are the local business borrower’s ability to sell its products/services, thereby generating sufficient operating revenue to repay the Company under the agreed upon terms and conditions, and the general business conditions of the local economy or other market that the business serves.
Real Estate - Construction - The Company’s 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 6 to 12 months for residential properties and from 24 to 36 months for non-residential and multi-family properties. The source of repayment of a construction loan comes from the sale or lease of newly-constructed property, although often construction loans are repaid with the proceeds of a commercial real estate loan that the Company makes to the owner or lessor of the newly-constructed property.
Real Estate - 1-4 Family Mortgage - This segment of the Company’s loan portfolio includes loans secured by first or second liens on residential real estate in which the property is the principal residence of the borrower, as well as loans secured by residential real estate in which the property is rented to tenants or is otherwise not the principal residence of the borrower; loans for the preparation of residential real property prior to construction are also included in this segment. Finally, this segment includes home equity loans or lines of credit and term loans secured by first and second mortgages on the residences of borrowers who elect to use the accumulated equity in their homes for purchases, refinances, home improvements, education and other personal expenditures. The Company attempts to minimize the risk associated with residential real estate loans by scrutinizing the financial condition of the borrower; typically, the maximum loan-to-value ratio is also limited.
Real Estate - Commercial Mortgage - Included in this portfolio segment (referred to collectively as “commercial real estate loans”) are “owner-occupied” loans in which the owner develops a property with the intention of locating its business there. Payments on these loans are dependent on the successful development and management of the business as well as the
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Note 1 – Significant Accounting Policies (continued)

borrower’s ability to generate sufficient operating revenue to repay the loan. In some instances, in addition to the mortgage on the underlying real estate of the business, commercial real estate loans are secured by other non-real estate collateral, such as equipment or other assets used in the business. In addition to owner-occupied commercial real estate loans, the Company offers loans in which the owner develops a property where the source of repayment of the loan will come from the sale or lease of the developed property, for example, retail shopping centers, hotels and storage facilities. These loans are referred to as “non-owner occupied” commercial real estate loans. The Company also offers commercial real estate loans to developers of commercial properties for purposes of site acquisition and preparation and other development prior to actual construction (referred to as “commercial land development loans”). Non-owner occupied commercial real estate loans and commercial land development loans are dependent on the successful completion of the project and may be affected by adverse conditions in the real estate market or the economy as a whole.
Lease Financing - This segment of the Company’s loan portfolio includes loans 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. Loss or decline of income by the borrower due to unplanned occurrences represents the primary risk of default to the Company. In the event of default, a shortfall in the value of the collateral may pose a loss in this loan category. The Company obtains a lien against the collateral securing the loan and holds 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.
Installment Loans to Individuals - Installment loans to individuals (or “consumer loans”) 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 the Company. In the event of default, a shortfall in the value of the collateral may pose a loss in this loan category. Before granting a consumer loan, the Company assesses the applicant’s credit history and ability to meet existing and proposed debt obligations. Although the applicant’s creditworthiness is the primary consideration, the underwriting process also includes a comparison of the value of the collateral, if any, to the proposed loan amount. The Company obtains a lien against the collateral securing the loan and holds title until the loan is repaid in full.
In determining the allowance for credit losses on loans evaluated on a collective basis, the Company categorizes loan pools based on loan type and/or risk rating. The Company uses two CECL models: (1) a loss rate model, based on average historical life-of-loan loss rates, which is used for the Real Estate - 1-4 Family Mortgage, Real Estate - Construction and the Installment Loans to Individuals portfolio segments, and (2) for the C&I, Real Estate - Commercial Mortgage and Lease Financing portfolio segments, the Company uses a probability of default/loss given default model, which calculates an expected loss percentage for each loan pool by considering (a) the probability of default, based on the migration of loans from performing (using risk ratings) to default using life-of-loan analysis periods, and (b) the historical severity of loss, based on the aggregate net lifetime losses incurred per loan pool.
The historical loss rates calculated as described above are adjusted, as necessary, for both internal and external qualitative factors where there are differences in the historical loss data of the Company and current or projected future conditions. Internal factors include loss history, changes in credit quality (including movement between risk ratings) and/or credit concentration and changes in the nature and volume of the respective loan portfolio segments. External factors include current and reasonable and supportable forecasted economic conditions and changes in collateral values. These factors are used to adjust the historical loss rates (as described above) to ensure that they reflect management’s expectation of future conditions based on a reasonable and supportable forecast period. To the extent the lives of the loans in the portfolio extend beyond the period for which a reasonable and supportable forecast can be made, when necessary, the models immediately revert back to the historical loss rates adjusted for qualitative factors related to current conditions.
Loans Evaluated on an Individual Basis
For loans that do not share similar risk characteristics with other loans, an individual analysis is performed to determine the expected credit loss. If the respective loan is collateral dependent (that is, when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral), the expected credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral. The fair value of collateral is initially based on external appraisals. Generally, collateral values for loans for which measurement of expected losses is established throughdependent on the fair value of such collateral are updated every twelve months, either from external third parties or in-house certified appraisers. Third-party appraisals are obtained from a provisionpre-approved list of independent, local appraisal firms. The fair value of the collateral derived from external appraisal is then adjusted for loan losses chargedthe estimated cost to earnings resulting from measurements of inherent credit risk in the loan portfolio and estimates of probable lossessell if repayment or impairments of individual loans. Loan losses are charged against the allowance when management believes the uncollectabilitysatisfaction of a loan balance is confirmed. Subsequent recoveries,dependent on the sale (rather than only on the operation) of the collateral. Other acceptable methods for
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determining the expected credit losses for individually evaluated loans (typically used when the loan is not collateral dependent) is a discounted cash flow approach or, if any,applicable, an observable market price. Once the expected credit loss amount is determined, an allowance equal to such expected credit loss is included in the allowance for credit losses.
The Company considers the loans in the Real Estate - Construction, Real Estate - 1-4 Family Mortgage and Real Estate - Commercial Mortgage loan segments disclosed as individually evaluated in Note 5, “Allowance for Credit Losses” as collateral dependent with the type of collateral being real estate.
The Company maintains a separate allowance for credit losses on unfunded loan commitments, which is included in the “Other liabilities” line item on the Consolidated Balance Sheets. Changes in such allowance are creditedrecorded in the “Other noninterest expense” line item on the Consolidated Statements of Income. Management estimates the amount of expected losses on unfunded loan commitments by calculating a likelihood of funding over the contractual period for exposures that are not unconditionally cancellable by the Company and applying the loss factors used in the allowance for credit losses on loans methodology described above to unfunded commitments for each loan type. No credit loss estimate is reported for off-balance-sheet credit exposures that are unconditionally cancellable by the Company.
Prior to the allowance.adoption of ASC 326 on January 1, 2020, the allowance was calculated under the guidance on collective impairment as recognized under ASC 450, “Contingencies.” Collective impairment was calculated based on loans grouped by grade. Another component of the allowance was losses on loans assessed as impaired under ASC 310, “Receivables” (“ASC 310”). The balance of these loans and their related allowance was included in management’s estimation and analysis of the allowance for loan losses.
See Note 4,3, “ Non Purchased Loans,” Note 5,4, “Purchased Loans,” and Note 6,5, “ Allowance for LoanCredit Losses” for disclosures regarding the Company’s past due and nonaccrual loans, impaired loans and restructured loans and its allowance for loancredit losses.
Business Combinations, Accounting for Credit-Deteriorated Purchased Credit Deteriorated Loans and Related Assets: Business combinations are accounted for by applying the acquisition method in accordance with ASC 805, “Business Combinations.Business Combinations.” Under the acquisition method, identifiable assets acquired and liabilities assumed and any non-controlling interest in the acquireeacquired company at the acquisition date are measured at their fair values as of that date and are recognized separately from goodwill. Results of operations of the acquired entities are included in the Consolidated Statements of Income from the date of acquisition. Acquisition costs incurred by the Company are expensed as incurred.
LoansFor a purchased asset that the Company has the intent of holding for investment, ASC 326 requires the Company to determine whether the asset has experienced more-than-insignificant deterioration in business combinations with evidence of credit quality since origination. Assets that have experienced more-than insignificant deterioration since origination and for which it is probable that all contractually required payments will not be collected are consideredreferred to be credit-impaired. Purchasedas purchased credit deteriorated loans are accounted(“PCD”) assets. ASC 326 provides for in accordance with ASC 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality” (“ASC 310-30”), and initially measured atspecial initial recognition of PCD assets, commonly referred to as the “gross-up” approach, where the allowance for credit losses is recognized by adding it to the fair value which includes estimated futureto arrive at the Day 1 amortized cost basis. After initial recognition, the accounting for PCD assets will generally follow the credit loss model that applies to that type of asset. Non-PCD assets record the Day 1 allowance for credit losses expected to be incurredthrough earnings on the date of purchase. The Company will accrete or amortize as interest income the fair value discounts on both PCD and non-PCD assets over the life of the loans. Increases in expected cash flows to be collected on these loans are recognized as an adjustment of the loan’s yield over its remaining life, while decreases in expected cash flows are recognized as an impairment.asset.
FDIC-Assisted Acquisitions:
During 2010 and 2011, the Bank acquired in FDIC-assisted acquisitions substantially all of the assets and assumed substantially all of the deposits and certain other liabilities of the following two failed financial institutions:
Crescent Bank and Trust Company (Jasper, GA), July 2010
American Trust Bank (Roswell, GA), February 2011
In connection with the July 2015 acquisition of Heritage Financial Group, Inc. (“Heritage”) and its wholly-owned subsidiary HeritageBank of the South (“HeritageBank”), the Bank assumed two additional loss share agreements that HeritageBank had entered into in connection with its acquisition in FDIC-assisted acquisitions of substantially all of the assets and assumption of substantially all of the deposits and certain other liabilities of the following two failed financial institutions:
Citizens Bank of Effingham (Springfield, GA), February 2011
First Southern National Bank (Statesboro, GA), August 2011
A significant portion of the loans and foreclosed assets acquired in each of these FDIC-assisted acquisitions were subject to loss share agreements with the Federal Deposit Insurance Corporation (the “FDIC”) whereby the Company was indemnified against a portion of the losses on such loans and foreclosed assets.
On December 8, 2016, the Bank entered into an agreement with the FDIC that terminated all of the Bank’s loss share agreements, resulting in a payment by the Company to the FDIC of $4,849. All rights and obligations of the parties under these loss share agreements, including the claw-back provisions, terminated effective December 8, 2016. As a result, after such date all recoveries, gains, charge-offs, losses and expenses related to assets previously covered under loss share are recognized entirely by the Company. Notwithstanding the termination of loss share with the FDIC, the terms of the purchase and assumption agreements for each of these FDIC-assisted acquisitions continue to require the FDIC to indemnify the Company against certain claims, including claims with respect to assets, liabilities or any affiliate not acquired or otherwise assumed by the Bank and with respect to claims based on any action by directors, officers or employees of the relevant failed financial institutions.

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 – Significant Accounting Policies (continued)


Premises and Equipment: Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed primarily by use of the straight-line method for furniture, fixtures, equipment, autos and premises. The annual provisions for depreciation have been computed primarily using estimated lives of forty40 years for premises,three to seven years for furniture and equipment and three to five years for computer equipment and autos. Leasehold improvements are expensed over the period of the leases or the estimated useful life of the improvements, whichever is shorter.
ASC 842, “Leases” ("ASC 842") requires a lessee to recognize a right-of-use asset and a lease liability for all leases with a term greater than 12 months on its balance sheet regardless of whether the lease is classified as financing or operating.
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All of the Company’s lessee arrangements are operating leases, being real estate leases for Company facilities. Under these arrangements, the Company records right-of-use assets and corresponding lease liabilities, each of which is based on the present value of the remaining lease payments and are discounted at the Company’s incremental borrowing rate. Right-of-use assets are reported in premises and equipment on the Consolidated Balance Sheets and the related lease liabilities are reported in other liabilities. All leases are recorded on the Consolidated Balance Sheets except for leases with an initial term less than 12 months for which the Company elected short-term lease recognition under ASC 842. Lease terms may contain renewal and extension options and early termination features. Many leases include one or more options to renew, with renewal terms that can extend the lease term from one to 20 years or more. The exercise of lease renewal options is at the Company’s sole discretion. Renewal options which are reasonably certain to be exercised in the future were included in the measurement of right-of-use assets and lease liabilities.
Lease expense is recognized on a straight-line basis over the lease term and is recorded in the “Net occupancy and equipment expense” line item in the Consolidated Statements of Income. Variable lease payments consist primarily of common area maintenance and taxes. The Company does not have any material sublease agreements currently in place.
Other Real Estate Owned: Other real estate owned consists of properties acquired through foreclosure or acceptance of a deed in lieu of foreclosure. These properties are initially recorded into other real estate at fair market value less cost to sell and are subsequently carried at the lower of cost or fair market value based on appraised value less estimated selling costs. Losses arising at the time of foreclosure of properties are charged against the allowance for loancredit losses. Reductions in the carrying value subsequent to acquisition are charged to earnings and are included under the line item “Other real estate owned” inon the Consolidated Statements of Income.
Mortgage Servicing Rights: The Company retains the right to service certain mortgage loans that it sells to secondary market investors. These mortgage servicing rights are recognized as a separate asset on the date the corresponding mortgage loan is sold. Mortgage servicing rights are amortized in proportion to and over the period of estimated net servicing income. These servicing rights are carried at the lower of amortized cost or fair value. Fair value is determined using an income approach with various assumptions including expected cash flows, prepayment speeds, market discount rates, servicing costs, mortgage interest rates and other factors. Mortgage servicing rights were carried at amortized cost at December 31, 2018 and 2017, respectively. Impairment losses on mortgage servicingServicing rights are evaluated for impairment based upon the fair value of the rights as compared to carrying amount. Impairment is recognized through a valuation allowance, to the extent by which thethat unamortized cost exceeds fair value. Changes toIf the fair valueCompany later determines that all or a portion of the mortgageimpairment no longer exists, a reduction of the valuation allowance may be recorded as an increase to income. Changes in valuation allowances related to servicing rights are recorded as part of Mortgagereported in the line item “Mortgage banking income inincome” on the Consolidated Statements of Income. The fair values of servicing rights are subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds and default rates and losses. See Note 9, "Mortgage Servicing Rights", for further details.
Goodwill and Other Intangible Assets: Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Other intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. Intangibles with finite lives are amortized over their estimated useful lives. Goodwill and other intangible assets are subject to impairment testing annually or more frequently if events or circumstances indicate possible impairment.impairment; if impaired, such assets are recorded at fair value. Goodwill is assigned to the Company’s reporting segments. In determining the fair value of the Company’s reporting units, management uses the market approach. Other intangible assets, consisting of core deposit intangibles and customer relationship intangibles, are reviewed for events or circumstances which could impact the recoverability of the intangible asset, such as a loss of core deposits, increased competition or adverse changes in the economy. No impairment was identified for the Company’s goodwill or its other intangible assets as a result of the testing performed during 2018, 20172021, 2020 or 2016.2019.
Bank-Owned Life Insurance: Bank-owned life insurance (“BOLI”) is an institutionally-priced insurance product that is specifically designed for purchase by insured depository institutions. The Company has purchased such insurance policies on certain employees, with Renasant Bank being listed as the primary beneficiary. The carrying value of BOLI is recorded at the cash surrender value of the policies, net of any applicable surrender charges. In connection with the acquisitions of Brand and Metropolitan (each as defined below in Note 2, “Mergers and Acquisitions”), the Company acquired BOLI with a cash surrender value of $40,081 and $19,283, respectively, at the acquisition date. Changes in the value of the cash surrender value of the policies are reflected under the line item “BOLI income” on the Consolidated Statements of Income.
Insurance Agency RevenuesRevenue from Contracts with Customers: ASC 606, “Revenue from Contracts with Customers” (“ASC 606”) provides guidance on revenue recognition from contracts with customers. For revenue streams within its scope, ASC 606 requires costs that are incremental to obtaining a contract to be capitalized. In the case of the Company, these costs include sales commissions for insurance, wealth management fees, and revenue from certain sales of OREO. ASC 606 has established, and the Company has
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utilized, a full-service insurance agency offering all linespractical expedient allowing costs that, if capitalized, would have an amortization period of commercialone year or less to instead be expensed as incurred.
Service Charges on Deposit Accounts
Service charges on deposit accounts include maintenance fees on accounts, per item charges, account enhancement charges for additional packaged benefits and personal insurance through major third-party insurance carriers. Commissionsoverdraft fees. The contracts with deposit account customers are day-to-day contracts and are considered to be terminable at will by either party. Therefore, the fees are all considered to be earned when charged and simultaneously collected.
Fees and Commissions
Fees and commissions include fees related to deposit services, such as ATM fees and interchange fees on debit card transactions. These fees are earned at the point in time when the services are rendered, and therefore the related revenue is recognized as the Company’s performance obligation is satisfied.
Insurance Commissions
Insurance commissions are earned when earned based on contractual terms and conditions of insurance policies are placed by customers with the insurance carriers and are collected and recognized using two different methods: the agency bill method and the direct bill method.
Under the agency bill method, Renasant Insurance is responsible for billing the customers directly and then collecting and remitting the premiums to the insurance carriers. TheseAgency bill revenue is recognized at the later of the invoice date or effective date of the policy. The Company has established a reserve for such policies which is derived from historical collection experience and updated annually. The contract balances (i.e. accounts receivable and accounts payable related to insurance commissions earned and feespremiums due) and the reserve established are classified underconsidered immaterial to the line item “Insurance commissions” onoverall financial results of the Consolidated Statements of Income. Contingency fee income paidCompany.
Under the direct bill method, premium billing and collections are handled by the insurance carriers, and a commission is then paid to Renasant Insurance. Direct bill revenue is recognized upon receipt and classified underwhen the line item “Other noninterest income”commission payment is received from the insurance carriers. While there is recourse on these commissions in the event of policy cancellations, based on the Consolidated StatementsCompany’s historical data, material reversals of Income.revenue based on policy cancellations are not anticipated. The Company monitors policy cancellations on a monthly basis and, if a material set of cancellations were to occur, the Company would adjust earnings accordingly.
TrustThe Company also earns contingency income that it recognizes on a cash basis. Contingency income is a bonus received from the insurance underwriters and is based on commission income and claims experience on the Company’s clients’ policies during the previous year. Increases and decreases in contingency income are reflective of corresponding increases and decreases in the amount of claims paid by insurance carriers.
Wealth Management Revenues: Revenue
Fees for managing trust accounts (inclusive of personal and corporate benefit accounts, IRAs, and custodial accounts) are based on the value of assets under management in the account, with the amount of the fee depending on the type of account. Revenue is recognized on a monthly basis, and there is little to no risk of a material reversal of revenue.        
Fees for other wealth management services, such as investment guidance relating to fixed and variable annuities, mutual funds, stocks and other investments, are recognized based on either trade activity, where fees are recognized at the time of the trade, or assets under management, where fees are recognized monthly.
Sales of Other Real Estate Owned
The Company offers trust servicescontinually markets the properties included in the OREO portfolio. The Company will at times, in the ordinary course of business, provide seller-financing on sales of OREO. In cases where a sale is seller-financed, the Company must ensure the commitment of both parties to perform their respective obligations and the collectability of the transaction price in order to properly recognize the revenue on the sale of OREO. This is accomplished through the Company’s loan underwriting process. In this process the Company considers factors such as well as various investment products, including annuitiesthe buyer’s initial equity in the property, the credit quality of the buyer, the financing terms of the loan and mutual funds. Trust revenues arethe cash flow from the property, if applicable. If it is determined that the contract criteria in ASC 606 have been met, the revenue on the sale of OREO will be recognized on the accrual basis in accordance with the contractual termsclosing date of the trust. Commissionssale when the
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Note 1 – Significant Accounting Policies (continued)

Company has transferred title to the buyer and obtained the right to receive payment for the property. In instances where sales are not seller-financed, the Company recognizes revenue on the closing date of the sale of annuities, mutual fundswhen the Company has obtained payment for the property and other investment products are recognized when earned basedtransferred title to the buyer. For additional information on contractual terms with the third party broker-dealer. These commissions and fees are classified under the line item “Wealth management revenue” on the Consolidated Statements of Income.OREO, please see Note 7, “Other Real Estate Owned.”
Income Taxes: Income taxes are accounted for under the liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. It is the Company’s policy to recognize interest and penalties, if incurred, related to unrecognized tax benefits in income tax expense. The Company and its subsidiaries

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements

file a consolidated federal income tax return. Renasant Bank provides for income taxes on a separate-return basis and remits to the Company amounts determined to be currently payable.
Deferred income taxes, included in “Other assets” on the Consolidated Balance Sheets, reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Realization of deferred tax assets is dependent upon the generation of a sufficient level of future taxable income and recoverable taxes paid in prior years. Although realization is not assured, management believes that the Company and its subsidiaries will realize a substantial majority of the deferred tax assets. A valuation allowance, if needed, reduces deferred tax assets to the expected amount most likely to be realized through a charge to income tax expense.
Fair Value Measurements: ASC 820, “FairFair Value Measurements and Disclosures,” provides guidance for using fair value to measure assets and liabilities and also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to a valuation based on quoted prices in active markets for identical assets and liabilities (Level 1), moderate priority to a valuation based on quoted prices in active markets for similar assets and liabilities and/or based on assumptions that are observable in the market (Level 2), and the lowest priority to a valuation based on assumptions that are not observable in the market (Level 3). See Note 18,16, “Fair Value Measurements,” for further details regarding the Company’s methods and assumptions used to estimate the fair values of the Company’s financial assets and liabilities.
Derivative Instruments and Hedging Activities: The Company utilizes derivative financial instruments as part of its ongoing efforts to manage its interest rate risk exposure.exposure as well as to meet the needs of its customers. Derivative financial instruments are included in the Consolidated Balance Sheets line item “Other assets” or “Other liabilities” at fair value in accordance with ASC 815, “DerivativesDerivatives and Hedging.Hedging.
Cash flow hedges are utilized to mitigate the exposure to variability in expected future cash flows or other types of forecasted transactions. For the Company’s derivatives designated as cash flow hedges, changes in the fair value of cash flow hedges are, to the extent that the hedging relationship is effective, recorded as other comprehensive income and are subsequently recognized in earnings at the same time that the hedged item is recognized in earnings. There were no ineffective portions for 2021. The ineffective portions of the changes in fair value of the hedging instruments are immediately recognized in earnings. The assessment of the effectiveness of the hedging relationship is evaluated under the hypothetical derivative method.
Fair value hedges are utilized to mitigate the exposure to future interest rate risk. For the Company’s derivatives designated as fair value hedges, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged liability attributable to the hedged risk are recognized in current earnings. The gain or loss on the derivative instrument is presented on the same line item as the earnings effect of the hedged item.
The Company also utilizes derivative instruments that are not designated as hedging instruments. The Company enters into interest rate cap and/or floor agreements with its customers and then enters into an offsetting derivative contract position with other financial institutions to mitigate the interest rate risk associated with these customer contracts. Because these derivative instruments are not designated as hedging instruments, changes in the fair value of the derivative instruments are recognized currently in earnings.
The Company enters into interest rate lock commitments on certain residential mortgage loans with its customers to mitigate the interest rate risk associated with the commitments to fund fixed-rate mortgage loans. Under such commitments, interest rates for a mortgage loan are typically locked in for up to 45 days with the customer. These interest rate lock commitments are recorded at fair value in the Company’s Consolidated Balance Sheets. Gains and losses arising from changes in the valuation of the commitments are recognized currently in earnings and are reflected under the line item “Mortgage banking income” on the Consolidated Statements of Income.
80


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 – Significant Accounting Policies (continued)

The Company utilizes two methods to deliver mortgage loans to be sold to an investor. Under a “best efforts” sales agreement, the Company enters into a sales agreement with an investor in the secondary market to sell the loan when an interest rate lock commitment is entered into with a customer, as described above. Under a “best efforts” sales agreement, the Company is obligated to sell the mortgage loan to the investor only if the loan is closed and funded. Thus, the Company will not incur any liability to an investor if the mortgage loan commitment in the pipeline fails to close. 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 should the Company fail to satisfy the contract. These types of mortgage loan commitments are recorded at fair value in the Company’s Consolidated Balance Sheets. Gains and losses arising from changes in the valuation of these commitments are recognized currently in earnings and are reflected under the line item “Mortgage banking income” on the Consolidated Statements of Income.
Treasury Stock: Treasury stock is recorded at cost. Shares held in treasury are not retired.
Retirement Plans: The Company sponsors a noncontributory pension plan and provides retiree medical benefits for certain employees. The Company’s independent actuary firm prepares actuarial valuations of pension cost and obligation under ASC 715, “CompensationCompensation – Retirement Benefits”Benefits (“ASC 715”), using assumptions and estimates derived in accordance with the guidance set forth in ASC 715. Expense related to the plans is included under the line item “Salaries and employee benefits” on the

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1 – Significant Accounting Policies (continued)


Consolidated Statements of Income. Actuarial gains and losses are recognized in accumulated other comprehensive income, net of tax, until they are amortized as a component of plan expense. See Note 14,13, “Employee Benefit and Deferred Compensation Plans,” for further details regarding the Company’s retirement plans.
Stock-Based Compensation: The Company recognizes compensation expense for all share-based payments to employees in accordance with ASC 718, “CompensationCompensation - Stock Compensation.Compensation (“ASC 718”). Compensation expense for option grants and restricted stock awards is determined based on the estimated fair value of the stock options and restricted stock on the applicable grant or award date and is recognized over the respective awards’ vesting period. The Company has elected to account for forfeitures in compensation cost when they occur as permitted under the guidance in ASC 718, “Compensation - Stock Compensation” (“ASC 718”).718. Expense associated with the Company’s stock-based compensation is included under the line item “Salaries and employee benefits” on the Consolidated Statements of Income. See Note 14,13, “Employee Benefit and Deferred Compensation Plans,” for further details regarding the Company’s stock-based compensation.
Earnings Per Common Share: Basic net income per common share is calculated by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted net income per common share reflects the pro forma dilution of shares outstanding, assuming outstanding stock options were exercised into common shares and nonvested restricted stock awards, whose vesting is subject to future service requirements, were outstanding common shares as of the awards'awards’ respective grant dates, calculated in accordance with the treasury method. See Note 21,18, “Net Income Per Common Share,” for the reconciliation of the numerators and denominators of the basic and diluted earnings per share computations.
Subsequent Events: The Company has evaluated, for consideration of recognition or disclosure, subsequent events that have occurred through the date of issuance of its financial statements, and has determined that no significant events occurred after December 31, 20182021 but prior to the issuance of these financial statements that would have a material impact on its Consolidated Financial Statements.
Impact of Recently-Issued Accounting Standards and Pronouncements:
In May 2014, theMarch 2020, FASB issued Accounting Standards Update (“ASU”) 2014-09 (“ASU 2014-09”2020-04, “Reference Rate Reform (Topic 842): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”), which is an updateprovides temporary, optional guidance to FASB Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers” (“ASC 606”).ease the potential burden of accounting for reference rate reform on financial reporting. ASU 2014-092020-04 provides guidanceoptional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions if certain criteria are met that an entity should recognize revenue to depict the transfer of promised goodsreference LIBOR or services to customers in an amount that reflects the consideration to which the entity expectsanother reference rate expected to be entitleddiscontinued. As the guidance is intended to assist stakeholders during the global market-wide reference rate transition period, it is in exchange for those goods and services. For a majority of the Company’s income streams, including interest income earned on loans and leases, the recognition of revenue is governed by other accounting standards and is specifically excludedeffect only from the coverage of ASC 606. In addition, the Company’s revenue that is covered by ASC 606, the most significant of which is service charges on deposit accounts, is generally based on day-to-day contracts with Company customers and, as a result, is not impacted by the new guidance.March 12, 2020 through December 31, 2022. The Company adopted ASU 2014-09 intransitioned new production from LIBOR instruments to a set of alternative indices at December 31, 2021. The Company’s LIBOR Transition Committee is currently developing a plan to transition legacy positions with the first quarter of 2018, and there was nointent to minimize the impact to the financial statements at the time of adoption. The Company has included newly applicable revenue disclosures in this filing in Note 27, “Revenue Recognition.”
In January 2016, FASB issued ASU 2016-01, “RecognitionBank and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). ASU 2016-01 revises the accounting for the classification and measurement of investments in equity securities and revises the presentation of certain fair value changes for financial liabilities measured at fair value. For equity securities, the guidance in ASU 2016-01 requires equity investments to be measured at fair value with changes in fair value recognized in net income. For financial liabilities that are measured at fair value in accordance with the fair value option, the guidance requires presenting, in other comprehensive income, the change in fair value that relates to a change in instrument-specific credit risk. ASU 2016-01 also eliminates the disclosure assumptions used to estimate fair value for financial instruments measured at amortized cost and requires disclosure of an exit price notion in determining the fair value of financial instruments measured at amortized cost. The Company used an entry price notion in determining the fair value of certain financial instruments prior to its changing to the exit price notion upon adoption of this standard in the first quarter of 2018. This ASU did not have any other impact on the Company at the time of adoption.
In February 2016, FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 amends the accounting model and disclosure requirements for leases.  The prior accounting model for leases distinguished between capital leases, which were recognized on-balance sheet, and operating leases, which were not.  Under the new standard, lease classifications are defined as finance leases, which are similar to capital leases under prior GAAP, and operating leases.  Further, a lessee recognizes a lease liability and a right-of-use asset for all leases with a term greater than 12 months on its balance sheet regardless of the lease’s classification, which will increase reported assets and liabilities.  The accounting model and disclosure requirements for lessors remains substantially unchanged from prior GAAP. This standard became effective on January 1, 2019. The Company will record a right-of-use asset and a lease liability of approximately $55,000 as of the effective date of the standard. The guidance will notcustomers.

81


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements

have a material impact on the Company’s statement of income. The Company will include newly required disclosures beginning in the quarterly reporting for the first quarter of 2019.
In June 2016, FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). The update will significantly change the way entities recognize impairment on many financial assets by requiring immediate recognition of estimated credit losses expected to occur over the asset's remaining life. FASB describes this impairment recognition model as the current expected credit loss (“CECL”) model and believes the CECL model will result in more timely recognition of credit losses since the CECL model incorporates expected credit losses versus incurred credit losses. The scope of FASB’s CECL model would include loans, held-to-maturity debt instruments, lease receivables, loan commitments and financial guarantees that are not accounted for at fair value. For public companies, this update becomes effective for interim and annual periods beginning after December 15, 2019. The Company has formed an implementation committee comprised of both accounting and credit employees to guide Renasant Bank through the implementation of ASU 2016-13. The Company has also engaged a third party to act as a consultant and software provider to assist in the implementation of the CECL model. The implementation committee and the consultant have established the CECL blueprint for Renasant Bank, which includes the selected methodology, proper pool segmentation and loan data validation. Currently, the CECL committee is working with the consultant to build the CECL model and expects to run a preliminary CECL calculation in the second quarter of 2019.
In August 2016, FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 is intended to reduce the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows, including (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (6) distributions received from equity method investees, (7) beneficial interests in securitization transactions and (8) separately identifiable cash flows and application of the predominance principle. This update became effective January 1, 2018 and did not have a material impact on the Company’s financial statements.
In March 2017, FASB issued ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (“ASU 2017-07”). ASU 2017-07 requires employers to report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. These amendments also allow only the service cost component to be eligible for capitalization when applicable. This update became effective January 1, 2018 and did not have a material impact on the Company’s financial statements.
In March 2017, FASB issued ASU 2017-08, “Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities” (“ASU 2017-08”). ASU 2017-08 requires the amortization period for certain callable debt securities held at a premium to be the earliest call date.  ASU 2017-08 will be effective for interim and annual periods beginning after December 15, 2018. This update became effective January 1, 2019 and did not have a material impact on the Company’s financial statements.
In August 2017, FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities” (“ASU 2017-12”). ASU 2017-12 is intended to simplify hedge accounting by eliminating the requirement to separately measure and report hedge effectiveness. ASU 2017-12 also seeks to expand the application of hedge accounting by modifying current requirements to include hedge accounting on partial-term hedges, the hedging of prepayable financial instruments and other strategies. This update became effective January 1, 2019 and did not have a material impact on the Company’s financial statements.
In August 2018, FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 is intended to improve the disclosures on fair value measurements by eliminating, amending and adding certain disclosure requirements. These changes are intended to reduce costs for preparers while providing more useful information for financial statement users. ASU 2018-13 will be effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the effect that ASU 2018-13 will have on its financial position and results of operations and its financial statement disclosures.

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements

Note 2 – Mergers and Acquisitions
(Dollar amounts in thousands)
Acquisition of Brand Group Holdings, Inc.
Effective September 1, 2018, the Company completed its acquisition by merger of Brand Group Holdings, Inc. (“Brand”), the parent company of The Brand Banking Company (“Brand Bank”), in a transaction valued at approximately $474,453. The Company issued 9,306,477 shares of common stock and paid approximately $21,879 to Brand shareholders, excluding cash paid for fractional shares, and paid approximately $17,157, net of tax benefit, to Brand stock option holders for 100% of the voting equity interest in Brand. At closing, Brand merged with and into the Company, with the Company the surviving corporation in the merger; immediately thereafter, Brand Bank merged with and into Renasant Bank, with Renasant Bank the surviving banking corporation in the merger. On September 1, 2018, Brand operated thirteen banking locations throughout the greater Atlanta market.

The Company recorded approximately $349,416 in intangible assets which consist of goodwill of $321,882 and a core deposit intangible of $27,534. Goodwill resulted from a combination of revenue enhancements from expansion in existing markets and efficiencies resulting from operational synergies. The fair value of the core deposit intangible is being amortized over the estimated useful life, currently expected to be approximately 10 years. The goodwill is not deductible for income tax purposes. The following table summarizes the allocation of purchase price to assets and liabilities acquired in connection with the Company’s acquisition of Brand based on their fair values on September 1, 2018.
Purchase Price:  
Shares issued to common shareholders9,306,477
 
Purchase price per share$46.69
 
Value of stock paid $434,519
Cash consideration paid 21,879
Cash paid for fractional shares 4
Cash settlement for stock options, net of tax benefit 17,157
Deal charges paid on behalf of Brand 894
  Total Purchase Price
 $474,453
Net Assets Acquired:  
Stockholders’ equity at acquisition date$138,896
 
Increase (decrease) to net assets as a result of fair value adjustments
to assets acquired and liabilities assumed:
  
  Securities(231) 
Loans, including loans held for sale(20,926) 
Premises and equipment910
 
Intangible assets27,534
 
Other assets(3,304) 
  Deposits(1,367) 
  Borrowings(3,236) 
  Other liabilities13,338
 
  Deferred income taxes957
 
     Total Net Assets Acquired
 152,571
Goodwill resulting from merger(1)
 $321,882
(1) The goodwill resulting from the merger has been assigned to the Community Banks operating segment.

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 2 - Mergers and Acquisitions (continued)


The following table summarizes the estimated fair value on September 1, 2018 of assets acquired and liabilities assumed on that
date in connection with the merger with Brand. These estimates are subject to change pending the finalization of all valuations.
Cash and cash equivalents $193,436
Securities 71,246
Loans, including loans held for sale 1,589,254
Premises and equipment 20,070
Intangible assets 349,416
Other assets 112,050
Total assets 2,335,472
   
Deposits 1,714,177
Borrowings 90,912
Other liabilities 55,930
Total liabilities 1,861,019
As part of the merger agreement, Brand agreed to divest the operations of its subsidiary Brand Mortgage Group, LLC (“BMG”), which transaction was completed as of October 31, 2018. As a result, the balance sheet and results of operations of BMG, which the Company considers to be immaterial to the overall results of the Company, were included in the Company’s balance sheet and consolidated results of operations from September 1, 2018 to October 31, 2018. The following table summarizes the significant assets acquired and liabilities assumed from BMG:

(in thousands)September 1, 2018
Loans held for sale48,100
Borrowings34,139

The following table summarizes the results of operations for BMG included in the Company’s Consolidated Statements of
Income for the twelve months ended December 31, 2018:

(in thousands)  
Interest income $357
Interest expense 279
Net interest income 78
Noninterest income 4,043
Noninterest expense 4,398
Net income before taxes $(277)

Acquisition of Metropolitan BancGroup, Inc.
Effective July 1, 2017, the Company completed its acquisition of Metropolitan BancGroup, Inc. (“Metropolitan”), the parent company of Metropolitan Bank, in a transaction valued at approximately $219,461. The Company issued 4,883,182 shares of common stock and paid approximately $4,764 to Metropolitan stock option holders for 100% of the voting equity interest in Metropolitan. At closing, Metropolitan merged with and into the Company, with the Company the surviving corporation in the merger; immediately thereafter, Metropolitan Bank merged with and into Renasant Bank, with Renasant Bank the surviving banking corporation in the merger. On July 1, 2017, Metropolitan operated eight banking locations in Nashville and Memphis, Tennessee and the Jackson, Mississippi Metropolitan Statistical Area.
The Company recorded approximately $147,478 in intangible assets which consist of goodwill of $140,512 and a core deposit intangible of $6,966. Goodwill resulted from a combination of revenue enhancements from expansion in existing markets and efficiencies resulting from operational synergies. The fair value of the core deposit intangible is being amortized on an accelerated basis over the estimated useful life, currently expected to be approximately 10 years. The goodwill is not deductible for income tax purposes.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 2 - Mergers and Acquisitions (continued)


The following table summarizes the allocation of purchase price to assets and liabilities acquired in connection with the Company’s acquisition of Metropolitan based on their fair values on July 1, 2017.
Purchase Price:  
Shares issued to common shareholders4,883,182
 
Purchase price per share$43.74
 
Value of stock paid $213,590
Cash paid for fractional shares 5
Cash settlement for stock options 4,764
Deal charges paid on behalf of Metropolitan 1,102
  Total Purchase Price
 $219,461
Net Assets Acquired:  
Stockholders’ equity at acquisition date$89,253
 
Increase (decrease) to net assets as a result of fair value adjustments
to assets acquired and liabilities assumed:
  
  Securities(731) 
Mortgage loans held for sale30
 
Loans(13,071) 
Premises and equipment(4,629) 
Intangible assets, net of Metropolitan’s existing intangibles2,340
 
Other real estate owned(1,251) 
Other assets2,731
 
  Deposits(3,603) 
  Borrowings(1,294) 
  Other liabilities3,930
 
  Deferred income taxes5,244
 
     Total Net Assets Acquired
 78,949
Goodwill resulting from merger(1)
 $140,512
(1) The goodwill resulting from the merger has been assigned to the Community Banks operating segment.
The following table summarizes the fair value on July 1, 2017 of assets acquired and liabilities assumed at acquisition date in connection with the merger with Metropolitan.
Cash and cash equivalents $47,556
Securities 108,697
Loans, including mortgage loans held for sale 967,804
Premises and equipment 8,576
Other real estate owned 1,203
Intangible assets 147,478
Other assets 69,567
Total assets 1,350,881
   
Deposits 942,084
Borrowings 174,522
Other liabilities 20,685
Total liabilities 1,137,291


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 2 - Mergers and Acquisitions (continued)


Supplemental Pro Forma Combined Condensed Results of Operations
The following unaudited pro forma combined condensed consolidated financial information presents the results of operations for the twelve months ended December 31, 2018 and 2017 of the Company as though the Brand and Metropolitan mergers had been completed as of January 1, 2017. The unaudited estimated pro forma information combines the historical results of Brand and Metropolitan with the Company’s historical consolidated results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments for the periods presented. The pro forma information is not necessarily indicative of what would have occurred had the acquisitions taken place on January 1, 2017. The pro forma information does not include the effect of any cost-saving or revenue-enhancing strategies. Merger expenses are reflected in the period in which they were incurred.
 Twelve Months Ended
 December 31,
 2018 2017
Net interest income - pro forma (unaudited)$455,513
 $450,353
    
Noninterest income - pro forma (unaudited)$153,850
 $176,699
    
Noninterest expense - pro forma (unaudited)$452,699
 $422,700
    
Net income - pro forma (unaudited)$115,646
 $105,729
    
Earnings per share - pro forma (unaudited):   
Basic$1.97
 $1.80
Diluted$1.97
 $1.80
Due to the timing of the respective system conversions and the integration of operations into the Company's existing operations, historical reporting for acquired operations is impracticable, and, therefore, disclosure of the amounts of revenue and expenses of the acquired institutions since the acquisition dates is impracticable.



Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements

Note 3 – Securities
(In Thousands, Except Number of Securities)

The amortized cost and fair value of securities available for sale were as follows as of the dates presented:
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
December 31, 2021
U.S. Treasury securities$3,007 $$— $3,010 
Obligations of states and political subdivisions153,847 5,532 (269)159,110 
Residential mortgage backed securities:
Government agency mortgage backed securities967,497 7,854 (6,816)968,535 
Government agency collateralized mortgage obligations1,008,514 457 (20,371)988,600 
Commercial mortgage backed securities:
Government agency mortgage backed securities14,717 365 (1)15,081 
Government agency collateralized mortgage obligations216,859 812 (3,419)214,252 
Other debt securities36,515 1,097 (148)37,464 
$2,400,956 $16,120 $(31,024)$2,386,052 
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
December 31, 2020
U.S. Treasury securities$7,047 $32 $— $7,079 
Obligations of other U.S. Government agencies and corporations1,003 — 1,009 
Obligations of states and political subdivisions291,231 14,015 (45)305,201 
Residential mortgage backed securities:
Government agency mortgage backed securities581,105 21,564 (23)602,646 
Government agency collateralized mortgage obligations218,373 1,946 (51)220,268 
Commercial mortgage backed securities:
Government agency mortgage backed securities29,053 1,235 (1)30,287 
Government agency collateralized mortgage obligations99,377 2,992 (21)102,348 
Trust preferred securities12,013 — (3,001)9,012 
Other debt securities62,771 2,909 (73)65,607 
$1,301,973 $44,699 $(3,215)$1,343,457 

82
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
December 31, 2018       
Obligations of other U.S. Government agencies and corporations$2,536
 $13
 $(38) $2,511
Obligations of states and political subdivisions200,798
 3,038
 (567) 203,269
Residential mortgage backed securities:       
Government agency mortgage backed securities621,690
 719
 (9,126) 613,283
Government agency collateralized mortgage obligations332,697
 274
 (5,982) 326,989
Commercial mortgage backed securities:       
Government agency mortgage backed securities21,957
 257
 (384) 21,830
Government agency collateralized mortgage obligations28,446
 24
 (135) 28,335
Trust preferred securities12,359
 
 (1,726) 10,633
Other debt securities44,046
 192
 (311) 43,927
 $1,264,529
 $4,517
 $(18,269) $1,250,777

 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
December 31, 2017       
Obligations of other U.S. Government agencies and corporations$3,554
 $40
 $(30) $3,564
Obligations of states and political subdivisions228,589
 6,161

(269)
234,481
Residential mortgage backed securities:       
Government agency mortgage backed securities196,121
 888
 (3,059) 193,950
Government agency collateralized mortgage obligations180,258
 133
 (3,752) 176,639
Commercial mortgage backed securities:       
Government agency mortgage backed securities31,015
 389
 (234) 31,170
Government agency collateralized mortgage obligations5,019
 1
 (14) 5,006
Trust preferred securities12,442
 
 (3,054) 9,388
Other debt securities17,106
 260
 (76) 17,290
 $674,104
 $7,872
 $(10,488) $671,488


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 -2 – Securities (continued)



The amortized cost and fair value of securities held to maturity were as follows as of the dates presented:
Securities
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
December 31, 2021
Obligations of states and political subdivisions$267,641 $333 $(685)$267,289 
Residential mortgage backed securities
Government agency mortgage backed securities60,507 (198)60,310 
Government agency collateralized mortgage obligations24,832 — (92)24,740 
Commercial mortgage backed securities
Government agency mortgage backed securities1,855 — — 1,855 
Government agency collateralized mortgage obligations39,505 — (117)39,388 
Other debt securities22,049 — (79)21,970 
$416,389 $334 $(1,171)$415,552 
Allowance for credit losses - held to maturity securities(32)
Held-to-maturity securities, net of allowance for credit losses$416,357 
During the year ended December 31, 2021, the Company transferred, at fair value, $366,886 of securities from the available for sale portfolio to the held to maturity portfolio. The related net unrealized gain of $2,748 (after tax gains of $2,048) remained in accumulated other comprehensive income (loss) and will be amortized over the remaining life of the securities, offsetting the related amortization of discount on the transferred securities. No gains or losses were recognized at the time of transfer. There were no held to maturity securities at December 31, 2020.
Available for sale securities sold were as follows for the periods presented:
Carrying ValueNet ProceedsGain/(Loss)
Twelve months ended December 31, 2021
Obligations of states and political subdivisions$47 $49 $
Residential mortgage backed securities:
Government agency mortgage backed securities145,572 149,473 3,901 
Government agency collateralized mortgage obligations12,362 12,562 200 
Trust preferred securities12,021 9,961 (2,060)
Other debt securities4,283 4,410 127 
$174,285 $176,455 $2,170 
Carrying ValueNet ProceedsGain/(Loss)
Twelve months ended December 31, 2020
Obligations of states and political subdivisions$2,696 $2,561 $(135)
Residential mortgage backed securities:
Government agency mortgage backed securities16,093 16,294 201 
Government agency collateralized mortgage obligations26,071 26,051 (20)
$44,860 $44,906 $46 
83


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 2 – Securities (continued)

Carrying ValueNet ProceedsGain/(Loss)
Twelve months ended December 31, 2019Twelve months ended December 31, 2019
Carrying Value Net Proceeds Gain/(Loss)
Twelve months ended December 31, 2018     
Obligations of states and political subdivisions$901
 $893
 $(8)Obligations of states and political subdivisions$11,799 $11,813 $14 
Residential mortgage backed securities:     Residential mortgage backed securities:
Government agency mortgage backed securities943
 942
 (1)Government agency mortgage backed securities72,556 71,944 (612)
Government agency collateralized mortgage obligations559
 552
 (7)Government agency collateralized mortgage obligations122,692 120,892 (1,800)
Commercial mortgage backed securities:Commercial mortgage backed securities:
$2,403
 $2,387
 $(16)
Government agency collateralized mortgage obligationsGovernment agency collateralized mortgage obligations4,838 4,720 (118)
Other debt securitiesOther debt securities252 257 
Other equity securitiesOther equity securities— 2,859 2,859 
$212,137 $212,485 $348 
 Carrying Value Net Proceeds Gain/(Loss)
Twelve months ended December 31, 2017     
Obligations of other U.S. Government agencies and corporations$11,088
 $10,974
 $(114)
Obligations of states and political subdivisions110,019
 112,199
 2,180
Residential mortgage backed securities:     
Government agency mortgage backed securities264,924
 263,217
 (1,707)
Government agency collateralized mortgage obligations72,153
 71,781
 (372)
Commercial mortgage backed securities:     
Government agency mortgage backed securities14,104
 14,082
 (22)
Government agency collateralized mortgage obligations6,289
 6,289
 
Trust preferred securities9,346
 9,403
 57
Other debt securities7,269
 7,395
 126
 $495,192
 $495,340
 $148
 Carrying Value Net Proceeds Gain/(Loss)
Twelve months ended December 31, 2016     
Other equity securities$2,842
 $4,028
 $1,186
 $2,842
 $4,028
 $1,186
Included in the table above for the twelve months ended December 31, 2017 are certainThe sales of other equity securities acquired from Metropolitan sold shortly after acquisition. These securities had an aggregate carrying value of $36,021 at the time of sale, and the Company received net proceeds of $36,021, resulting in no gain or loss on the sale.
Also included in the table above for the twelve months ended December 31, 2017 are certain securities sold by2019 represent the CompanyCompany’s sale of its shares of Visa Class B common stock during the fourththird quarter of 2017 in an effort to manage its consolidated assets below $10,000,000 at December 31, 2017, in order to delay the adverse impact of the Durbin Amendment to the Dodd-Frank Act, which applies to banking institutions with assets over $10,000,000 at year-end. Securities sold to achieve this strategy had an aggregate carrying value of $446,880 on the dates of sale, and the Company collected net proceeds of $446,971, resulting in a $91 net gain on the sales.2019.
Gross realized gains and gross realized losses on sales of securities available for sale were as follows for the periods presented:
 Year Ended December 31,
 2018 2017 2016
Gross gains on sales of securities available for sale$11
 $2,497
 $1,257
Gross losses on sales of securities available for sale(27) (2,349) (71)
Gain on sales of securities available for sale, net$(16) $148
 $1,186

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 - Securities (continued)


 Year Ended December 31,
 202120202019
Gross gains on sales of securities available for sale$4,322 $230 $2,979 
Gross losses on sales of securities available for sale(2,152)(184)(2,631)
Gains on sales of securities available for sale, net$2,170 $46 $348 
At December 31, 20182021 and 2017,2020, securities with a carrying value of approximately $619,308$607,681 and $217,867,$582,338, respectively, were pledged to secure government, public, trust, and other deposits. Securities with a carrying value of $18,299$21,493 and $25,888$32,272 were pledged as collateral for short-term borrowings and derivative instruments at December 31, 20182021 and 2017,2020, respectively.
The amortized cost and fair value of securities at December 31, 20182021 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because issuers may call or prepay obligations with or without call or prepayment penalties.
Available for Sale Held to MaturityAvailable for Sale
Amortized
Cost
 
Fair
Value
Amortized
Cost
Fair
Value
Amortized
Cost
Fair
Value
Due within one year$39,310
 $39,649
Due within one year$530 $529 $8,523 $8,579 
Due after one year through five years44,304
 44,788
Due after one year through five years2,064 2,064 41,782 43,383 
Due after five years through ten years81,825
 82,781
Due after five years through ten years18,368 18,403 53,269 56,068 
Due after ten years59,051
 58,001
Due after ten years246,679 246,291 77,798 79,610 
Residential mortgage backed securities:   Residential mortgage backed securities:
Government agency mortgage backed securities621,690
 613,283
Government agency mortgage backed securities60,507 60,310 967,497 968,535 
Government agency collateralized mortgage obligations332,697
 326,989
Government agency collateralized mortgage obligations24,832 24,740 1,008,514 988,600 
Commercial mortgage backed securities:   Commercial mortgage backed securities:
Government agency mortgage backed securities21,957
 21,830
Government agency mortgage backed securities1,855 1,855 14,717 15,081 
Government agency collateralized mortgage obligations28,446
 28,335
Government agency collateralized mortgage obligations39,505 39,388 216,859 214,252 
Other debt securities35,249
 35,121
Other debt securities22,049 21,972 11,997 11,944 
$1,264,529
 $1,250,777
$416,389 $415,552 $2,400,956 $2,386,052 

84


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 -2 – Securities (continued)



The following table presentstables present the gross unrealized losses and fair value of investment securities, aggregated by investment category and the length of time the investments have been in a continuous unrealized loss position, as of the dates presented:
Less than 12 Months 12 Months or More Total Less than 12 Months12 Months or MoreTotal
# 
Fair
Value
 
Unrealized
Losses
 # 
Fair
Value
 
Unrealized
Losses
 # 
Fair
Value
 
Unrealized
Losses
#Fair
Value
Unrealized
Losses
#Fair
Value
Unrealized
Losses
#Fair
Value
Unrealized
Losses
Available for Sale:            Available for Sale:
December 31, 2018            
Obligations of other U.S. Government agencies and corporations0 $
 $
 2 $1,480
 $(38) 2 $1,480
 $(38)
December 31, 2021December 31, 2021
Obligations of states and political subdivisionsObligations of states and political subdivisions8$34,303 $(216)3$3,892 $(53)11$38,195 $(269)
Residential mortgage backed securities:Residential mortgage backed securities:
Government agency mortgage backed securitiesGovernment agency mortgage backed securities41727,546 (6,312)112,305 (504)42739,851 (6,816)
Government agency collateralized mortgage obligationsGovernment agency collateralized mortgage obligations49966,126 (20,371)— — 49966,126 (20,371)
Commercial mortgage backed securities:Commercial mortgage backed securities:
Government agency mortgage backed securitiesGovernment agency mortgage backed securities11,791 (1)1432 — 22,223 (1)
Government agency collateralized mortgage obligationsGovernment agency collateralized mortgage obligations21160,919 (3,072)29,005 (347)23169,924 (3,419)
Other debt securitiesOther debt securities18,699 (148)— — 18,699 (148)
TotalTotal121$1,899,384 $(30,120)7$25,634 $(904)128$1,925,018 $(31,024)
December 31, 2020December 31, 2020
Obligations of states and political subdivisions34 22,159
 (193) 26 16,775
 (374) 60 38,934
 (567)Obligations of states and political subdivisions69,403 (45)— — 69,403 (45)
Residential mortgage backed securities:            Residential mortgage backed securities:
Government agency mortgage backed securities91 354,731
 (3,945) 73 125,757
 (5,181) 164 480,488
 (9,126)Government agency mortgage backed securities219,755 (23)— — 219,755 (23)
Government agency collateralized mortgage obligations24 97,451
 (840) 60 140,076
 (5,142) 84 237,527
 (5,982)Government agency collateralized mortgage obligations527,143 (51)— — 527,143 (51)
Commercial mortgage backed securities:            Commercial mortgage backed securities:
Government agency mortgage backed securities5 6,506
 (74) 4 7,468
 (310) 9 13,974
 (384)Government agency mortgage backed securities11,538 (1)1459 — 21,997 (1)
Government agency collateralized mortgage obligations2 9,950
 (23) 1 4,888
 (112) 3 14,838
 (135)Government agency collateralized mortgage obligations314,190 (21)— — 314,190 (21)
Trust preferred securities0 
 
 2 10,633
 (1,726) 2 10,633
 (1,726)Trust preferred securities— — 29,012 (3,001)29,012 (3,001)
Other debt securities12 19,011
 (88) 3 5,621
 (223) 15 24,632
 (311)Other debt securities43,330 (70)1566 (3)53,896 (73)
Total168 $509,808
 $(5,163) 171 $312,698
 $(13,106) 339 $822,506
 $(18,269)Total21$75,359 $(211)4$10,037 $(3,004)25$85,396 $(3,215)
December 31, 2017            
Obligations of other U.S. Government agencies and corporations1 $497
 $(3) 2 $1,999
 $(27) 3 $2,496
 $(30)
Obligations of states and political subdivisions23 11,860

(59) 12 7,728

(210) 35 19,588

(269)
Residential mortgage backed securities:            
Government agency mortgage backed securities29 64,595
 (659) 44 89,414
 (2,400) 73 154,009
 (3,059)
Government agency collateralized mortgage obligations33 102,509
 (1,470) 29 62,406
 (2,282) 62 164,915
 (3,752)
Commercial mortgage backed securities:            
Government agency mortgage backed securities2 5,629
 (17) 3 5,872
 (217) 5 11,501
 (234)
Government agency collateralized mortgage obligations1 4,986
 (14) 0 
 
 1 4,986
 (14)
Trust preferred securities0 
 
 2 9,388
 (3,054) 2 9,388
 (3,054)
Other debt securities2 756
 (12) 2 6,308
 (64) 4 7,064
 (76)
Total91 $190,832
 $(2,234) 94 $183,115
 $(8,254) 185 $373,947
 $(10,488)
 Less than 12 months 12 months or more Total
Held to Maturity:# Fair Value Unrealized Losses# Fair Value Unrealized Losses# Fair Value Unrealized Losses
December 31, 2021
Obligations of states and political subdivisions24$62,131 $(685)$— $— 24$62,131 $(685)
Residential mortgage backed securities:
Government agency mortgage backed securities5053,560 (181)15,354 (17)5158,914 (198)
Government agency collateralized mortgage obligations124,740 (92)— — 124,740 (92)
Commercial mortgage backed securities:
Government agency collateralized mortgage obligations739,388 (117)— — 739,388 (117)
Other debt securities821,972 (79)— — 821,972 (79)
Total90$201,791 $(1,154)1$5,354 $(17)91$207,145 $(1,171)
85


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 2 – Securities (continued)

The Company does not intend to sell any of the securities in an unrealized loss position, and it is not more likely than not that the Company will be required to sell any such security prior to the recovery of its amortized cost basis, which may be maturity. Furthermore, even though a number of these securities have been in a continuous unrealized loss position for a period greater than twelve months, the Company is collecting principal and interest payments from the respective issuers as scheduled. Based upon its review of securities with unrealized losses as of December 31, 2021, the Company determined that all such losses resulted from factors not deemed credit related. As such, the Company did not record any other-than-temporary impairment for the years ended December 31, 2018 or 2017.2021 and 2020.
The Company holds investments in pooled trust preferredAt December 31, 2021, the allowance for credit losses on held to maturity securities that had a cost basis of $12,359 and $12,442 and a fair value of $10,633 and $9,388was $32. There was no allowance for credit losses for debt securities at December 31, 2018 and 2017, respectively. One2020. The Company monitors the credit quality of debt securities held to maturity using bond investment in pooled trust preferred securities with a carrying value of $9,346 was sold in 2017 for a gain of $57. As ofgrades assigned by third party ratings agencies. Updated investment grades are obtained as they become available from the agencies. On December 31, 2018, the investments in pooled trust preferred securities consisted2021, 99.9% of two securities representing interests in various tranches of trusts collateralized by debt issued by over 160 financial institutions. Management’s determination of the fair value of each of its holdings in pooled trust preferred securities is based on the current credit ratings, the known deferrals and defaults by the underlying issuing financial institutions and the degree to which future deferrals and defaults would be required to occur before the cash flow for the Company’s tranches is negatively

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 - Securities (continued)


impacted. In addition, management continually monitors key credit quality and capital ratios of the issuing institutions. This determination is further supported by quarterly valuations, which are performed by third parties, of each security obtained by the Company. At December 31, 2018, management did not, and does not currently, believe such securities will be settled at a price less than the amortized cost of debt securities held to maturity were rated A or higher by the investment, but the Company previously concluded that it was probable that there had been an adverse change in estimated cash flows for both trust preferred securities and recognized credit related impairment losses on these securities in 2010 and 2011. For the years ended December 31, 2018, 2017 and 2016, the Company determined the pooled trust preferred securities and their estimated cash flow were fairly valued, and no additional impairment was recognized during these periods.
The following table provides information regarding the Company’s investments in pooled trust preferred securities at December 31, 2018:ratings agencies.
86
Name 
Single/
Pooled
 
Class/
Tranche
 
Amortized
Cost
 
Fair
Value
 
Unrealized
Loss
 
Lowest
Credit
Rating
 
Issuers
Currently
in Deferral
or Default
XXIII Pooled B-2 $8,292
 $6,956
 $(1,336) BB 16%
XXVI Pooled B-2 4,067
 3,677
 (390) B 19%
      $12,359
 $10,633
 $(1,726)    
The following table provides a summary of the cumulative credit related losses recognized in earnings for which a portion of OTTI has been recognized in other comprehensive income:

 2018 2017
Balance at January 1$(261) $(3,337)
Additions related to credit losses for which OTTI was not previously recognized
 
Increases in credit loss for which OTTI was previously recognized
 
Reductions for securities sold during the period
 3,076
Balance at December 31$(261) $(261)


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements

Note 43 – Non Purchased Loans
(In Thousands, Except Number of Loans)
“Purchased” loans are those loans acquired in any of the Company’s previous acquisitions, including FDIC-assisted acquisitions. “Non purchased” loans include all of the Company’s other loans, other than loans held for sale.
For purposes of this Note 4,3, all references to “loans” mean non purchased loans, including PPP loans.
The following is a summary of non purchased loans and leases at December 31:
20212020
Commercial, financial, agricultural$1,332,962 $2,360,471 
Lease financing80,192 80,022 
Real estate – construction:
Residential300,988 243,814 
Commercial798,914 583,338 
Total real estate – construction1,099,902 827,152 
Real estate – 1-4 family mortgage:
Primary1,682,050 1,536,181 
Home equity423,108 432,768 
Rental/investment268,245 264,436 
Land development135,070 123,179 
Total real estate – 1-4 family mortgage2,508,473 2,356,564 
Real estate – commercial mortgage:
Owner-occupied1,329,219 1,334,765 
Non-owner occupied2,446,370 2,194,739 
Land development110,395 120,125 
Total real estate – commercial mortgage3,885,984 3,649,629 
Installment loans to individuals107,565 149,862 
Gross loans9,015,078 9,423,700 
Unearned income(4,067)(4,160)
Loans, net of unearned income$9,011,011 $9,419,540 

87

 2018 2017
Commercial, financial, agricultural$875,649
 $763,823
Lease financing64,992
 57,354
Real estate – construction635,519
 547,658
Real estate – 1-4 family mortgage2,087,890
 1,729,534
Real estate – commercial mortgage2,628,365
 2,390,076
Installment loans to individuals100,424
 103,452
Gross loans6,392,839
 5,591,897
Unearned income(3,127) (3,341)
Loans, net of unearned income$6,389,712
 $5,588,556


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 4 -3 – Non Purchased Loans (continued)





Past Due and Nonaccrual Loans
The following table providestables provide an aging of past due and nonaccrual loans, segregated by class, as of the dates presented:
 Accruing LoansNonaccruing Loans
 30-89 Days
Past Due
90 Days
or More
Past Due
Current
Loans
Total
Loans
30-89 Days
Past Due
90 Days
or More
Past Due
Current
Loans
Total
Loans
Total
Loans
December 31, 2021
Commercial, financial, agricultural$3,325 $103 $1,323,774 $1,327,202 $1,669 $2,665 $1,426 $5,760 $1,332,962 
Lease financing— — 80,181 80,181 — 11 — 11 80,192 
Real estate – construction:
Residential1,077 — 299,911 300,988 — — — — 300,988 
Commercial— — 798,914 798,914 — — — — 798,914 
Total real estate – construction1,077 — 1,098,825 1,099,902 — — — — 1,099,902 
Real estate – 1-4 family mortgage:
Primary14,785 389 1,652,940 1,668,114 1,920 8,195 3,821 13,936 1,682,050 
Home equity1,468 — 420,695 422,163 182 546 217 945 423,108 
Rental/investment401 445 266,353 267,199 — 771 275 1,046 268,245 
Land development431 — 134,382 134,813 — 65 192 257 135,070 
Total real estate – 1-4 family mortgage17,085 834 2,474,370 2,492,289 2,102 9,577 4,505 16,184 2,508,473 
Real estate – commercial mortgage:
Owner-occupied720 36 1,325,776 1,326,532 163 822 1,702 2,687 1,329,219 
Non-owner occupied260 89 2,440,513 2,440,862 — — 5,508 5,508 2,446,370 
Land development476 — 109,575 110,051 — 292 52 344 110,395 
Total real estate – commercial mortgage1,456 125 3,875,864 3,877,445 163 1,114 7,262 8,539 3,885,984 
Installment loans to individuals978 12 106,318 107,308 30 95 132 257 107,565 
Unearned income— — (4,067)(4,067)— — — — (4,067)
Loans, net of unearned income$23,921 $1,074 $8,955,265 $8,980,260 $3,964 $13,462 $13,325 $30,751 $9,011,011 
88


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 – Non Purchased Loans (continued)


 Accruing Loans Nonaccruing Loans
 
30-89 Days
Past Due
 
90 Days
or More
Past Due
 
Current
Loans
 
Total
Loans
 
30-89 Days
Past Due
 
90 Days
or More
Past Due
 
Current
Loans
 
Total
Loans
 
Total
Loans
December 31, 2018                 
Commercial, financial, agricultural$3,397
 $267
 $870,457
 $874,121
 $
 $1,356
 $172
 $1,528
 $875,649
Lease financing607
 89
 64,296
 64,992
 
 
 
 
 64,992
Real estate – construction887
 
 634,632
 635,519
 
 
 
 
 635,519
Real estate – 1-4 family mortgage10,378
 2,151
 2,071,401
 2,083,930
 238
 2,676
 1,046
 3,960
 2,087,890
Real estate – commercial mortgage1,880
 13
 2,621,902
 2,623,795
 
 2,974
 1,596
 4,570
 2,628,365
Installment loans to individuals368
 165
 99,731
 100,264
 3
 157
 
 160
 100,424
Unearned income
 
 (3,127) (3,127) 
 
 
 
 (3,127)
Total$17,517
 $2,685
 $6,359,292
 $6,379,494
 $241
 $7,163
 $2,814
 $10,218
 $6,389,712
December 31, 2017                 
Commercial, financial, agricultural$2,722
 $22
 $759,143
 $761,887
 $205
 $1,033
 $698
 $1,936
 $763,823
Lease financing47
 
 57,148
 57,195
 
 159
 
 159
 57,354
Real estate – construction50
 
 547,608
 547,658
 
 
 
 
 547,658
Real estate – 1-4 family mortgage11,810
 2,194
 1,712,982
 1,726,986
 
 1,818
 730
 2,548
 1,729,534
Real estate – commercial mortgage1,921
 727
 2,381,871
 2,384,519
 
 2,877
 2,680
 5,557
 2,390,076
Installment loans to individuals429
 72
 102,901
 103,402
 1
 28
 21
 50
 103,452
Unearned income
 
 (3,341) (3,341) 
 
 
 
 (3,341)
Total$16,979
 $3,015
 $5,558,312
 $5,578,306
 $206
 $5,915
 $4,129
 $10,250
 $5,588,556
 Accruing LoansNonaccruing Loans
 30-89 Days
Past Due
90 Days
or More
Past Due
Current
Loans
Total
Loans
30-89 Days
Past Due
90 Days
or More
Past Due
Current
Loans
Total
Loans
Total
Loans
December 31, 2020
Commercial, financial, agricultural$1,124 $231 $2,354,716 $2,356,071 $164 $1,804 $2,432 $4,400 $2,360,471 
Lease financing— — 79,974 79,974 — 48 — 48 80,022 
Real estate – construction:
Residential— — 243,317 243,317 — 497 — 497 243,814 
Commercial— — 583,338 583,338 — — — — 583,338 
Total real estate – construction— — 826,655 826,655 — 497 — 497 827,152 
Real estate – 1-4 family mortgage:
Primary11,889 1,754 1,513,716 1,527,359 1,865 2,744 4,213 8,822 1,536,181 
Home equity1,152 360 430,702 432,214 66 111 377 554 432,768 
Rental/investment663 210 263,064 263,937 61 194 244 499 264,436 
Land development97 — 123,051 123,148 — — 31 31 123,179 
Total real estate – 1-4 family mortgage13,801 2,324 2,330,533 2,346,658 1,992 3,049 4,865 9,906 2,356,564 
Real estate – commercial mortgage:
Owner-occupied779 795 1,330,155 1,331,729 — 2,598 438 3,036 1,334,765 
Non-owner occupied922 127 2,191,440 2,192,489 — 2,197 53 2,250 2,194,739 
Land development113 115 119,820 120,048 44 29 77 120,125 
Total real estate – commercial mortgage1,814 1,037 3,641,415 3,644,266 44 4,824 495 5,363 3,649,629 
Installment loans to individuals896 191 148,620 149,707 117 34 155 149,862 
Unearned income— — (4,160)(4,160)— — — — (4,160)
Loans, net of unearned income$17,635 $3,783 $9,377,753 $9,399,171 $2,204 $10,339 $7,826 $20,369 $9,419,540 
Restructured loans that are not performing in accordance with their restructured terms that are either contractually 90 days or more past due or placed on nonaccrual status are reported as nonperforming loans. There was onewere no restructured loan totaling $41 that was contractually 90 days past due or more and still accruing at December 31, 2018. There were four restructured loans totaling $649 that were contractually 90 days past due or more and still accruing at December 31, 2017.2021. There were 2 restructured loans totaling $177 that were contractually 90 days past due or more and still accruing at December 31, 2020. The outstanding balance of restructured loans on nonaccrual status was $3,128$15,322 and $2,673$5,787 at December 31, 20182021 and 2017,2020, respectively.

89


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 4 -3 – Non Purchased Loans (continued)





Impaired Loans
Impaired loans recognized in conformity with ASC 310, segregated by class, were as follows as of the dates and for the periods presented:
 As of December 31, 2018 Year Ended December 31, 2018
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
With a related allowance recorded:         
Commercial, financial, agricultural$1,834
 $2,280
 $163
 $2,079
 $35
Lease financing
 
 
 
 
Real estate – construction7,302
 7,302
 63
 7,180
 162
Real estate – 1-4 family mortgage9,077
 9,767
 61
 9,212
 191
Real estate – commercial mortgage4,609
 5,765
 689
 4,889
 72
Installment loans to individuals223
 232
 1
 239
 2
Total$23,045
 $25,346
 $977
 $23,599
 $462
With no related allowance recorded:         
Commercial, financial, agricultural$
 $
 $
 $
 $
Lease financing
 
 
 
 
Real estate – construction2,165
 2,165
 
 2,165
 55
Real estate – 1-4 family mortgage
 
 
 
 
Real estate – commercial mortgage1,238
 2,860
 
 1,316
 32
Installment loans to individuals
 
 
 
 
Total$3,403
 $5,025
 $
 $3,481
 $87
Totals$26,448
 $30,371
 $977
 $27,080
 $549
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 4 - Non Purchased Loans (continued)



 As of December 31, 2017 Year Ended December 31, 2017
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
With a related allowance recorded:         
Commercial, financial, agricultural$2,365
 $3,043
 $138
 $2,861
 $47
Lease financing159
 159
 2
 159
 
Real estate – construction578
 578
 4
 526
 29
Real estate – 1-4 family mortgage8,169
 9,315
 561
 8,295
 259
Real estate – commercial mortgage9,652
 12,463
 1,861
 9,316
 206
Installment loans to individuals117
 121
 1
 130
 3
Total$21,040
 $25,679
 $2,567
 $21,287
 $544
With no related allowance recorded:         
Commercial, financial, agricultural$
 $
 $
 $
 $
Lease financing
 
 
 
 
Real estate – construction
 
 
 
 
Real estate – 1-4 family mortgage703
 703
 
 711
 29
Real estate – commercial mortgage
 
 
 
 
Installment loans to individuals
 
 
 
 
Total$703
 $703
 $
 $711
 $29
Totals$21,743
 $26,382
 $2,567
 $21,998
 $573
The average recorded investment in impaired loans for the year ended December 31, 2016 was $23,209. Interest income recognized on impaired loans for the year ended December 31, 2016 was $624.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 4 - Non Purchased Loans (continued)



Restructured Loans
At December 31, 2018, 20172021, 2020 and 2016,2019, there were $5,325, $5,588$14,650, $11,761 and $7,447,$4,679, respectively, of restructured loans. The following table illustrates the impact of modifications classified as restructured loans held on the Consolidated Balance Sheets and still performing in accordance with their restructured terms at period end, segregated by class, as of the periods presented.
Number of
Loans
Pre-Modification
Outstanding
Recorded
Investment
Post-Modification
Outstanding
Recorded
Investment
December 31, 2021December 31, 2021
Commercial, financial, agriculturalCommercial, financial, agricultural5,258 5,258 
Number of
Loans
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
December 31, 2018     
Real estate – 1-4 family mortgage:Real estate – 1-4 family mortgage:
PrimaryPrimary34 5,035 5,082 
Real estate – commercial mortgage:Real estate – commercial mortgage:
Non-owner occupiedNon-owner occupied837 810 
TotalTotal42 11,130 11,150 
December 31, 2020December 31, 2020
Commercial, financial, agricultural
 $
 $
Commercial, financial, agricultural1,862 1,859 
Lease financing
 
 
Real estate – construction
 
 
Real estate – 1-4 family mortgage9
 1,764
 1,763
Real estate – commercial mortgage2
 94
 89
Real estate – 1-4 family mortgage:Real estate – 1-4 family mortgage:
PrimaryPrimary20 3,594 3,659 
Rental/investmentRental/investment142 207 
Total real estate – 1-4 family mortgageTotal real estate – 1-4 family mortgage23 3,736 3,866 
Real estate – commercial mortgage:Real estate – commercial mortgage:
Owner-occupiedOwner-occupied3,019 2,970 
Non-owner occupiedNon-owner occupied210 210 
Land developmentLand development189 189 
Total real estate – commercial mortgageTotal real estate – commercial mortgage3,418 3,369 
Installment loans to individuals
 
 
Installment loans to individuals24 21 
Total11
 $1,858
 $1,852
Total38 9,040 9,115 
December 31, 2017     
December 31, 2019December 31, 2019
Commercial, financial, agricultural2
 $331
 $330
Commercial, financial, agricultural$187 $185 
Lease financing
 
 
Real estate – construction
 
 
Real estate – 1-4 family mortgage8
 598
 586
Real estate – 1-4 family mortgage460 459 
Real estate – commercial mortgage3
 683
 313
Installment loans to individuals1
 4
 3
Total14
 $1,616
 $1,232
Total$647 $644 
December 31, 2016     
Commercial, financial, agricultural
 $
 $
Lease financing
 
 
Real estate – construction1
 510
 518
Real estate – 1-4 family mortgage11
 1,188
 1,167
Real estate – commercial mortgage
 
 
Installment loans to individuals
 
 
Total12
 $1,698
 $1,685
At December 31, 20172021 and December 31, 2020 the Company had $184$117 and $448, respectively, in troubled debt restructurings that subsequently defaulted within twelve months of the restructuring. There were no such occurrences for the yearsyear ended December 31, 2018 and December 31, 2016.2019 that remained outstanding at period end.


90


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 4 -3 – Non Purchased Loans (continued)





Changes in the Company’s restructured loans are set forth in the table below.
Number of
Loans
Recorded
Investment
Number of
Loans
 
Recorded
Investment
Totals at January 1, 201753
 $7,447
Additional loans with concessions16
 1,453
Totals at January 1, 2020Totals at January 1, 202046 $4,679 
Additional advances or loans with concessionsAdditional advances or loans with concessions38 9,155 
Reclassified as performing2
 183
Reclassified as performing354 
Reductions due to:   Reductions due to:
Reclassified as nonperforming(7) (853)Reclassified as nonperforming(5)(758)
Paid in full(8) (1,165)Paid in full(6)(1,409)
Charge-offs(1) (250)
Principal paydowns
 (304)Principal paydowns— (260)
Lapse of concession period(1) (923)
Totals at December 31, 201754
 $5,588
Additional loans with concessions11
 1,861
Totals at December 31, 2020Totals at December 31, 202076 $11,761 
Additional advances or loans with concessionsAdditional advances or loans with concessions42 11,220 
Reclassified as performing3
 295
Reclassified as performing251 
Reductions due to:   Reductions due to:
Reclassified as nonperforming(8) (639)Reclassified as nonperforming(10)(1,639)
Paid in full(9) (1,556)Paid in full(15)(6,198)
Principal paydowns
 (224)Principal paydowns— (745)
Totals at December 31, 201851
 $5,325
Totals at December 31, 2021Totals at December 31, 202197 $14,650 
The allocated allowance for loancredit losses attributable to restructured loans was $34$285 and $85$337 at December 31, 20182021 and 2017,2020, respectively. The Company had $42$305 remaining availability under commitments to lend additional funds on these restructured loans at December 31, 20182021 and $18 inno remaining availability under commitments to lend additional funds on these restructured loans at December 31, 2017.2020.
Renasant CorporationIn response to the economic environment caused by the COVID-19 pandemic, the Company implemented a loan deferral program in the first quarter of 2020 to provide temporary payment relief to both consumer and Subsidiaries
Notescommercial customers. Any customer current on loan payments, taxes and insurance qualified for an initial 90-day deferral of principal and interest payments. A second 90-day deferral was available to Consolidated Financial Statements
Note 4 - Non Purchased Loans (continued)



borrowers that remained current on taxes and insurance through the first deferral period and also satisfied underwriting standards established by the Company that analyzed the ability of the borrower to service its loan in accordance with its existing terms in light of the impact of the COVID-19 pandemic on the borrower, its industry and the markets in which it operated. The Company’s loan deferral program complied with the guidance set forth in the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act and related guidance from the FDIC and other banking regulators. As of December 31, 2021, the Company has discontinued its deferral program but had 7 loans with total balances of approximately $443 remaining on deferral. In accordance with the applicable guidance, none of these loans were considered “restructured loans.”
Credit Quality
For commercial and commercial real estate securedestate-secured loans, internal risk-rating grades are assigned by lending, credit administration or loan review personnel, based on an analysis of the financial and collateral strength and other credit attributes underlying each loan. Management analyzes the resulting ratings, as well as other external statistics and factors such as delinquency, to track the migration performance of the portfolio balances of commercial and commercial real estate secured loans. Loan grades range between 1 and 9, with 1 being loans with the least credit risk. Loans within the “Pass” grade (historically, those(those with a risk rating between 1 and 4)4C) generally have a lower risk of loss and therefore a lower risk factor applied to the loan balances. In 2018, management has established more granular rating categories to better identify heightened credit risk as loans migrate downward in the risk rating system. The “Pass” grade is now reserved for loans with a risk rating between 1 and 4A, and the “Watch”“Special Mention” grade (those with a risk rating of 4B and 4E) is utilized onrepresents a temporary basis for “Pass” grade loansloan where a significant adverse risk-modifying action is anticipated in the near term.term and, left uncorrected, could result in deterioration of the credit quality of the loan. Loans that migrate toward the “Substandard” grade (those with a risk rating between 5 and 9) generally have a higher risk of loss and therefore a higher risk factor applied to those related loan balances.
The following table presentstables present the Company’s loan portfolio by year of origination and internal risk-rating grades as of the dates presented:
91

 Pass Watch Substandard Total
December 31, 2018       
Commercial, financial, agricultural$615,803
 $18,326
 $6,973
 $641,102
Real estate – construction558,494
 2,317
 8,157
 568,968
Real estate – 1-4 family mortgage321,564
 4,660
 4,260
 330,484
Real estate – commercial mortgage2,210,100
 54,579
 24,144
 2,288,823
Installment loans to individuals
 
 
 
Total$3,705,961
 $79,882
 $43,534
 $3,829,377
December 31, 2017       
Commercial, financial, agricultural$554,943
 $11,496
 $4,402
 $570,841
Real estate – construction483,498
 662
 81
 484,241
Real estate – 1-4 family mortgage254,643
 505
 8,697
 263,845
Real estate – commercial mortgage1,983,750
 50,428
 24,241
 2,058,419
Installment loans to individuals921
 
 
 921
Total$3,277,755
 $63,091
 $37,421
 $3,378,267

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 4 -3 – Non Purchased Loans (continued)





 Term Loans Amortized Cost Basis by Origination Year
 20212020201920182017PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
December 31, 2021
Commercial, Financial, Agricultural$300,748 $245,940 $122,350 $44,533 $15,384 $11,103 $557,628 $2,757 $1,300,443 
Pass299,731 245,657 120,102 43,042 14,603 8,605 553,541 2,002 1,287,283 
Special Mention— 136 1,798 281 605 1,196 651 — 4,667 
Substandard1,017 147 450 1,210 176 1,302 3,436 755 8,493 
Real Estate - Construction$461,370 $371,694 $174,369 $14,813 $ $ $3,769 $2,428 $1,028,443 
Residential$210,734 $12,598 $— $— $— $— $3,769 $2,428 $229,529 
Pass210,734 12,598 — — — — 3,769 2,428 229,529 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Commercial$250,636 $359,096 $174,369 $14,813 $— $— $— $— $798,914 
Pass250,636 359,096 174,369 14,813 — — — — 798,914 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Real Estate - 1-4 Family Mortgage$205,137 $83,038 $60,240 $30,044 $28,340 $8,846 $25,534 $941 $442,120 
Primary$15,599 $7,698 $3,662 $5,985 $4,150 $1,066 $4,727 $— $42,887 
Pass15,599 7,698 3,496 5,985 4,066 1,057 4,716 — 42,617 
Special Mention— — — — — — — — — 
Substandard— — 166 — 84 11 — 270 
Home Equity$1,318 $— $42 $131 $— $— $13,615 $10 $15,116 
Pass1,318 — 42 131 — — 13,615 10 15,116 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Rental/Investment$111,006 $61,801 $33,734 $23,520 $23,890 $7,469 $5,554 $931 $267,905 
Pass110,987 60,855 32,733 23,246 23,708 7,098 5,554 931 265,112 
Special Mention— 249 — — — — — — 249 
Substandard19 697 1,001 274 182 371 — — 2,544 
Land Development$77,214 $13,539 $22,802 $408 $300 $311 $1,638 $— $116,212 
Pass74,818 13,539 22,769 408 300 311 1,638 — 113,783 
Special Mention2,396 — — — — — — — 2,396 
Substandard— — 33 — — — — — 33 
Real Estate - Commercial Mortgage$1,168,118 $836,549 $680,506 $344,089 $298,644 $376,652 $147,446 $21,644 $3,873,648 
Owner-Occupied$312,031 $305,686 $220,057 $164,345 $140,265 $117,767 $59,126 $9,748 $1,329,025 
Pass310,736 304,555 218,447 161,521 134,410 109,577 59,126 8,036 1,306,408 
Special Mention1,210 1,131 — — 1,733 328 — 1,712 6,114 
Substandard85 — 1,610 2,824 4,122 7,862 — — 16,503 
Non-Owner Occupied$809,784 $511,803 $449,409 $173,123 $155,175 $256,133 $79,016 $11,896 $2,446,339 
Pass800,348 503,009 436,062 165,843 102,446 242,665 79,016 11,896 2,341,285 
Special Mention9,235 8,794 11,356 7,280 33,176 8,024 — — 77,865 
Substandard201 — 1,991 — 19,553 5,444 — — 27,189 
Land Development$46,303 $19,060 $11,040 $6,621 $3,204 $2,752 $9,304 $— $98,284 
Pass46,034 17,030 11,040 6,569 3,204 2,752 9,304 — 95,933 
Special Mention44 — — — — — — — 44 
Substandard225 2,030 — 52 — — — — 2,307 
For portfolio balances of consumer, consumer mortgage
92


Renasant Corporation and certain other similar loan types, allowance factors are determined based on historical loss ratios by portfolio for the preceding eight quartersSubsidiaries
Notes to Consolidated Financial Statements
Note 3 – Non Purchased Loans (continued)


 Term Loans Amortized Cost Basis by Origination Year
 20212020201920182017PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
Installment loans to individuals$ $ $42 $ $ $ $ $ $42 
Pass— — 42 — — — — — 42 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total loans subject to risk rating$2,135,373 $1,537,221 $1,037,507 $433,479 $342,368 $396,601 $734,377 $27,770 $6,644,696 
Pass2,120,941 1,524,037 1,019,102 421,558 282,737 372,065 730,279 25,303 6,496,022 
Special Mention12,885 10,310 13,154 7,561 35,514 9,548 651 1,712 91,335 
Substandard1,547 2,874 5,251 4,360 24,117 14,988 3,447 755 57,339 

 Term Loans Amortized Cost Basis by Origination Year
 20202019201820172016PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
December 31, 2020
Commercial, Financial, Agricultural$1,448,273 $183,627 $76,912 $36,866 $18,124 $15,844 $255,522 $2,449 $2,037,617 
Pass1,447,594 180,979 73,325 31,362 16,308 14,626 250,528 1,562 2,016,284 
Special Mention128 1,952 2,091 3,850 1,416 109 187 — 9,733 
Substandard551 696 1,496 1,654 400 1,109 4,807 887 11,600 
Real Estate - Construction$398,891 $266,471 $52,520 $29,300 $ $ $13,927 $ $761,109 
Residential$154,649 $9,836 $2,114 $— $— $— $13,923 $— $180,522 
Pass154,419 9,339 2,114 — — — 13,923 — 179,795 
Special Mention— — — — — — — — — 
Substandard230 497 — — — — — — 727 
Commercial$244,242 $256,635 $50,406 $29,300 $— $— $$— $580,587 
Pass244,242 251,937 50,406 29,300 — — — 575,889 
Special Mention— 4,698 — — — — — — 4,698 
Substandard— — — — — — — — — 
Real Estate - 1-4 Family Mortgage$110,246 $78,482 $36,613 $30,018 $13,197 $7,172 $10,658 $1,909 $288,295 
Primary$9,422 $6,691 $3,988 $4,644 $371 $1,060 $629 $— $26,805 
Pass9,422 5,870 3,988 4,644 371 1,045 629 — 25,969 
Special Mention— 125 — — — — — — 125 
Substandard— 696 — — — 15 — — 711 
Home Equity$157 $184 $— $— $— $— $6,051 $— $6,392 
Pass157 184 — — — — 6,051 — 6,392 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Rental/Investment$50,558 $32,656 $27,483 $25,019 $12,620 $5,699 $1,066 $557 $155,658 
Pass50,371 31,724 26,695 24,872 12,439 5,166 1,066 557 152,890 
Special Mention— — — 83 77 133 — — 293 
Substandard187 932 788 64 104 400 — — 2,475 
93


Renasant Corporation and may be adjusted by other qualitative criteria. Subsidiaries
Notes to Consolidated Financial Statements
Note 3 – Non Purchased Loans (continued)


 Term Loans Amortized Cost Basis by Origination Year
 20202019201820172016PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
Land Development$50,109 $38,951 $5,142 $355 $206 $413 $2,912 $1,352 $99,440 
Pass50,109 38,388 5,142 355 203 413 2,912 1,352 98,874 
Special Mention— — — — — — — — — 
Substandard— 563 — — — — — 566 
Real Estate - Commercial Mortgage$967,746 $801,083 $444,205 $402,110 $340,774 $277,789 $76,115 $20,845 $3,330,667 
Owner-Occupied$295,642 $256,807 $199,082 $169,527 $99,540 $85,614 $16,683 $9,733 $1,132,628 
Pass293,851 255,206 193,716 163,358 96,128 83,582 16,043 7,896 1,109,780 
Special Mention1,167 847 — 2,067 228 311 — 1,837 6,457 
Substandard624 754 5,366 4,102 3,184 1,721 640 — 16,391 
Non-Owner Occupied$635,232 $522,998 $237,075 $229,304 $236,347 $189,077 $52,456 $11,112 $2,113,601 
Pass624,289 514,030 237,075 184,673 218,106 175,702 52,456 11,112 2,017,443 
Special Mention9,105 — — 39,007 4,688 10,788 — — 63,588 
Substandard1,838 8,968 — 5,624 13,553 2,587 — — 32,570 
Land Development$36,872 $21,278 $8,048 $3,279 $4,887 $3,098 $6,976 $— $84,438 
Pass34,719 21,278 6,925 3,210 3,274 3,098 6,976 — 79,480 
Special Mention— — 1,123 69 46 — — — 1,238 
Substandard2,153 — — — 1,567 — — — 3,720 
Installment loans to individuals$74 $4 $ $ $ $ $ $16 $94 
Pass74 — — — — — 16 94 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total loans subject to risk rating$2,925,230 $1,329,667 $610,250 $498,294 $372,095 $300,805 $356,222 $25,219 $6,417,782 
Pass2,909,247 1,308,939 599,386 441,774 346,829 283,632 350,588 22,495 6,262,890 
Special Mention10,400 7,622 3,214 45,076 6,455 11,341 187 1,837 86,132 
Substandard5,583 13,106 7,650 11,444 18,811 5,832 5,447 887 68,760 

The following table presentstables present the performing status of the Company’s loan portfolio not subject to risk rating as of the dates presented:
 Term Loans Amortized Cost Basis by Origination Year
 20212020201920182017PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
December 31, 2021
Commercial, Financial, Agricultural$71 $ $ $1 $ $8,983 $23,464 $ $32,519 
Performing Loans71 — — — 8,983 23,464 — 32,519 
Non-Performing Loans— — — — — — — — — 
Lease Financing Receivables$26,301 $23,270 $15,504 $7,713 $2,169 $1,168 $ $ $76,125 
Performing Loans26,301 23,270 15,504 7,713 2,167 1,159 — — 76,114 
Non-Performing Loans— — — — — — 11 
Real Estate - Construction$57,283 $12,561 $1,615 $ $ $ $ $ $71,459 
Residential$57,283 $12,561 $1,615 $— $— $— $— $— $71,459 
Performing Loans57,283 12,561 1,615 — — — — — 71,459 
Non-Performing Loans— — — — — — — — — 
94


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 – Non Purchased Loans (continued)


 Performing Non-Performing Total
December 31, 2018     
Commercial, financial, agricultural$233,046
 $1,501
 $234,547
Lease financing61,776
 89
 61,865
Real estate – construction66,551
 
 66,551
Real estate – 1-4 family mortgage1,751,994
 5,412
 1,757,406
Real estate – commercial mortgage338,367
 1,175
 339,542
Installment loans to individuals100,099
 325
 100,424
Total$2,551,833
 $8,502
 $2,560,335
December 31, 2017     
Commercial, financial, agricultural$191,473
 $1,509
 $192,982
Lease financing53,854
 159
 54,013
Real estate – construction63,417
 
 63,417
Real estate – 1-4 family mortgage1,462,347
 3,342
 1,465,689
Real estate – commercial mortgage330,441
 1,216
 331,657
Installment loans to individuals102,409
 122
 102,531
Total$2,203,941
 $6,348
 $2,210,289
 Term Loans Amortized Cost Basis by Origination Year
 20212020201920182017PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
Commercial$— $— $— $— $— $— $— $— $— 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Real Estate - 1-4 Family Mortgage$554,483 $419,252 $205,014 $155,535 $117,619 $207,381 $404,293 $2,776 $2,066,353 
Primary$542,659 $415,863 $203,739 $153,717 $116,689 $206,496 $— $— $1,639,163 
Performing Loans542,053 414,931 201,273 148,649 114,669 203,416 — — 1,624,991 
Non-Performing Loans606 932 2,466 5,068 2,020 3,080 — — 14,172 
Home Equity$111 $— $79 $225 $— $508 $404,293 $2,776 $407,992 
Performing Loans111 — 79 225 — 435 403,598 2,599 407,047 
Non-Performing Loans— — — — — 73 695 177 945 
Rental/Investment$— $— $99 $— $23 $218 $— $— $340 
Performing Loans— — 99 — 23 164 — — 286 
Non-Performing Loans— — — — — 54 — — 54 
Land Development$11,713 $3,389 $1,097 $1,593 $907 $159 $— $— $18,858 
Performing Loans11,688 3,298 1,065 1,593 832 159 — — 18,635 
Non-Performing Loans25 91 32 — 75 — — — 223 
Real Estate - Commercial Mortgage$5,265 $3,584 $2,082 $800 $468 $137 $ $ $12,336 
Owner-Occupied$— $136 $58 $— $— $— $— $— $194 
Performing Loans— 136 58 — — — — — 194 
Non-Performing Loans— — — — — — — — — 
Non-Owner Occupied$— $31 $— $— $— $— $— $— $31 
Performing Loans— 31 — — — — — — 31 
Non-Performing Loans— — — — — — — — — 
Land Development$5,265 $3,417 $2,024 $800 $468 $137 $— $— $12,111 
Performing Loans5,265 3,417 2,008 800 468 86 — — 12,044 
Non-Performing Loans— — 16 — — 51 — — 67 
Installment loans to individuals$44,302 $15,436 $23,114 $7,717 $1,985 $1,917 $13,016 $36 $107,523 
Performing Loans44,254 15,360 23,035 7,704 1,958 1,890 13,016 36 107,253 
Non-Performing Loans48 76 79 13 27 27 — — 270 
Total loans not subject to risk rating$687,705 $474,103 $247,329 $171,766 $122,241 $219,586 $440,773 $2,812 $2,366,315 
Performing Loans687,026 473,004 244,736 166,685 120,117 216,292 440,078 2,635 2,350,573 
Non-Performing Loans679 1,099 2,593 5,081 2,124 3,294 695 177 15,742 

95


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 – Non Purchased Loans (continued)


 Term Loans Amortized Cost Basis by Origination Year
 20202019201820172016PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
December 31, 2020
Commercial, Financial, Agricultural$33,805 $16,455 $10,381 $6,396 $2,826 $7,201 $245,485 $305 $322,854 
Performing Loans33,794 16,343 10,340 6,026 2,748 7,181 245,059 305 321,796 
Non-Performing Loans11 112 41 370 78 20 426 — 1,058 
Lease Financing Receivables$32,150 $25,270 $10,999 $4,231 $1,040 $2,172 $ $ $75,862 
Performing Loans32,150 25,270 10,999 4,231 992 2,172 — — 75,814 
Non-Performing Loans— — — — 48 — — — 48 
Real Estate - Construction$54,918 $10,334 $295 $153 $ $ $343 $ $66,043 
Residential$53,108 $9,393 $295 $153 $— $— $343 $— $63,292 
Performing Loans53,108 9,393 295 153 — — 343 — 63,292 
Non-Performing Loans— — — — — — — — — 
Commercial$1,810 $941 $— $— $— $— $— $— $2,751 
Performing Loans1,810 941 — — — — — — 2,751 
Non-Performing Loans— — — — — — — — — 
Real Estate - 1-4 Family Mortgage$517,553 $344,643 $261,735 $196,777 $105,216 $212,214 $426,437 $3,694 $2,068,269 
Primary$470,034 $321,155 $239,542 $176,926 $92,195 $207,721 $1,758 $45 $1,509,376 
Performing Loans470,034 318,929 235,816 175,219 91,479 205,530 1,747 45 1,498,799 
Non-Performing Loans— 2,226 3,726 1,707 716 2,191 11 — 10,577 
Home Equity$— $203 $372 $— $45 $799 $421,838 $3,119 $426,376 
Performing Loans— 203 372 — 45 684 421,516 2,642 425,462 
Non-Performing Loans— — — — — 115 322 477 914 
Rental/Investment$34,079 $20,499 $18,319 $17,758 $11,907 $3,356 $2,330 $530 $108,778 
Performing Loans34,079 20,404 18,245 17,595 11,901 3,196 2,330 530 108,280 
Non-Performing Loans— 95 74 163 160 — — 498 
Land Development$13,440 $2,786 $3,502 $2,093 $1,069 $338 $511 $— $23,739 
Performing Loans13,440 2,786 3,502 2,062 1,069 338 511 — 23,708 
Non-Performing Loans— — — 31 — — — — 31 
Real Estate - Commercial Mortgage$81,953 $71,063 $56,193 $47,013 $35,801 $15,679 $10,772 $488 $318,962 
Owner-Occupied$48,814 $44,606 $36,661 $30,266 $23,974 $11,608 $5,919 $289 $202,137 
Performing Loans48,814 44,344 36,349 30,097 23,885 11,216 5,904 289 200,898 
Non-Performing Loans— 262 312 169 89 392 15 — 1,239 
Non-Owner Occupied$20,483 $18,585 $14,544 $13,821 $8,068 $3,491 $1,999 $147 $81,138 
Performing Loans20,483 18,460 14,486 13,821 8,068 3,439 1,999 147 80,903 
Non-Performing Loans— 125 58 — — 52 — — 235 
Land Development$12,656 $7,872 $4,988 $2,926 $3,759 $580 $2,854 $52 $35,687 
Performing Loans12,656 7,872 4,988 2,922 3,759 466 2,854 52 35,569 
Non-Performing Loans— — — — 114 — — 118 
Installment loans to individuals$60,133 $57,198 $13,704 $4,019 $2,459 $1,535 $10,661 $59 $149,768 
Performing Loans60,081 57,119 13,611 3,986 2,407 1,535 10,661 21 149,421 
Non-Performing Loans52 79 93 33 52 — — 38 347 
Total loans not subject to risk rating$780,512 $524,963 $353,307 $258,589 $147,342 $238,801 $693,698 $4,546 $3,001,758 
Performing Loans780,449 522,064 349,003 256,112 146,353 235,757 692,924 4,031 2,986,693 
Non-Performing Loans63 2,899 4,304 2,477 989 3,044 774 515 15,065 
96


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 3 – Non Purchased Loans (continued)


Related Party Loans
Certain executive officers and directors of Renasantthe Bank and their associates are customers of and have other transactions with Renasant Bank. Related party loans and commitments are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons not related to the Company or the Bank and do not involve more than a normal risk of collectability or present other unfavorable features. A summary of the changes in related party loans follows:
Loans at December 31, 2017$24,363
New loans and advances2,249
Loans to directors assumed in acquisition(1)
100
Payments received(3,860)
Changes in related parties(627)
Loans at December 31, 2018$22,225
Loans at December 31, 2020$27,328 
New loans and advances10,145 
(1)Payments received(4,866)
Changes in related parties(2,700)
Loans to directors assumed in acquisition are included in the tables in Note 5, “Purchased Loans.”at December 31, 2021$29,907 
No related party loans were classified as past due, nonaccrual, impaired or restructured at December 31, 20182021 or 2017.2020. Unfunded commitments to certain executive officers and directors and their associates totaled $6,982$10,471 and $9,333$19,911 at December 31, 20182021 and 2017,2020, respectively.


97


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements

Note 54 – Purchased Loans
(In Thousands, Except Number of Loans)
For purposes of this Note 5,4, all references to “loans” mean purchased loans.
The following is a summary of purchased loans at December 31:
20212020
Commercial, financial, agricultural$90,308 $176,513 
Real estate – construction:
Residential1,287 2,859 
Commercial3,707 28,093 
Total real estate – construction4,994 30,952 
Real estate – 1-4 family mortgage:
Primary134,070 214,770 
Home equity51,496 80,392 
Rental/investment20,229 31,928 
Land development9,978 14,654 
Total real estate – 1-4 family mortgage215,773 341,744 
Real estate – commercial mortgage:
Owner-occupied234,132 323,041 
Non-owner occupied410,577 552,728 
Land development18,344 29,454 
Total real estate – commercial mortgage663,053 905,223 
Installment loans to individuals35,775 59,675 
Loans$1,009,903 $1,514,107 

98
 2018 2017
Commercial, financial, agricultural$420,263
 $275,570
Lease financing
 
Real estate – construction105,149
 85,731
Real estate – 1-4 family mortgage707,453
 614,187
Real estate – commercial mortgage1,423,144
 1,037,454
Installment loans to individuals37,408
 18,824
Gross loans2,693,417
 2,031,766
Unearned income
 
Loans, net of unearned income$2,693,417
 $2,031,766



Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 54 – Purchased Loans (continued)



Past Due and Nonaccrual Loans
The following table providestables provide an aging of past due and nonaccrual loans, segregated by class, as of the dates presented:
 Accruing LoansNonaccruing Loans
 30-89 Days
Past Due
90 Days
or More
Past Due
Current
Loans
Total
Loans
30-89 Days
Past Due
90 Days
or More
Past Due
Current
Loans
Total
Loans
Total
Loans
December 31, 2021
Commercial, financial, agricultural$122 $— $82,918 $83,040 $42 $1,618 $5,608 $7,268 $90,308 
Real estate – construction:
Residential— — 1,287 1,287 — — — — 1,287 
Commercial— — 3,707 3,707 — — — — 3,707 
Total real estate – construction— — 4,994 4,994 — — — — 4,994 
Real estate – 1-4 family mortgage:
Primary1,042 36 127,820 128,898 257 2,225 2,690 5,172 134,070 
Home equity149 — 50,573 50,722 — 373 401 774 51,496 
Rental/investment20 — 20,105 20,125 26 — 78 104 20,229 
Land development— — 9,978 9,978 — — — — 9,978 
Total real estate – 1-4 family mortgage1,211 36 208,476 209,723 283 2,598 3,169 6,050 215,773 
Real estate – commercial mortgage:
Owner-occupied1,511 323 230,305 232,139 — 289 1,704 1,993 234,132 
Non-owner occupied— — 407,639 407,639 — — 2,938 2,938 410,577 
Land development— — 18,218 18,218 — — 126 126 18,344 
Total real estate – commercial mortgage1,511 323 656,162 657,996 — 289 4,768 5,057 663,053 
Installment loans to individuals839 34,690 35,537 15 11 212 238 35,775 
Loans, net of unearned income$3,683 $367 $987,240 $991,290 $340 $4,516 $13,757 $18,613 $1,009,903 
99


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 4 – Purchased Loans (continued)

 Accruing Loans Nonaccruing Loans
 
30-89 Days
Past Due
 
90 Days
or More
Past Due
 
Current
Loans
 
Total
Loans
 
30-89 Days
Past Due
 
90 Days
or More
Past Due
 
Current
Loans
 
Total
Loans
 
Total
Loans
December 31, 2018                 
Commercial, financial, agricultural$1,811
 $97
 $417,786
 $419,694
 $
 $477
 $92
 $569
 $420,263
Lease financing
 
 
 
 
 
 
 
 
Real estate – construction1,235
 68
 103,846
 105,149
 
 
 
 
 105,149
Real estate – 1-4 family mortgage8,981
 4,455
 690,697
 704,133
 202
 1,881
 1,237
 3,320
 707,453
Real estate – commercial mortgage5,711
 2,410
 1,413,346
 1,421,467
 
 1,401
 276
 1,677
 1,423,144
Installment loans to individuals1,342
 202
 35,594
 37,138
 2
 24
 244
 270
 37,408
Unearned income
 
 
 
 
 
 
 
 
Total$19,080
 $7,232
 $2,661,269
 $2,687,581
 $204
 $3,783
 $1,849
 $5,836
 $2,693,417
December 31, 2017                 
Commercial, financial, agricultural$1,119
 $532
 $273,488
 $275,139
 $
 $199
 $232
 $431
 $275,570
Lease financing
 
 
 
 
 
 
 
 
Real estate – construction415
 
 85,316
 85,731
 
 
 
 
 85,731
Real estate – 1-4 family mortgage6,070
 2,280
 602,464
 610,814
 385
 879
 2,109
 3,373
 614,187
Real estate – commercial mortgage2,947
 2,910
 1,031,141
 1,036,998
 191
 99
 166
 456
 1,037,454
Installment loans to individuals208
 9
 18,443
 18,660
 59
 
 105
 164
 18,824
Unearned income
 
 
 
 
 
 
 
 
Total$10,759
 $5,731
 $2,010,852
 $2,027,342
 $635
 $1,177
 $2,612
 $4,424
 $2,031,766
 Accruing LoansNonaccruing Loans
 30-89 Days
Past Due
90 Days
or More
Past Due
Current
Loans
Total
Loans
30-89 Days
Past Due
90 Days
or More
Past Due
Current
Loans
Total
Loans
Total
Loans
December 31, 2020
Commercial, financial, agricultural$818 $101 $163,658 $164,577 $74 $2,024 $9,838 $11,936 $176,513 
Real estate – construction:
Residential— — 2,859 2,859 — — — — 2,859 
Commercial— — 28,093 28,093 — — — — 28,093 
Total real estate – construction— — 30,952 30,952 — — — — 30,952 
Real estate – 1-4 family mortgage:
Primary2,394 74 206,635 209,103 687 2,799 2,181 5,667 214,770 
Home equity294 43 78,739 79,076 674 638 1,316 80,392 
Rental/investment180 14 30,931 31,125 — 724 79 803 31,928 
Land development109 — 14,231 14,340 — — 314 314 14,654 
Total real estate – 1-4 family mortgage2,977 131 330,536 333,644 691 4,197 3,212 8,100 341,744 
Real estate – commercial mortgage:
Owner-occupied2,511 — 317,997 320,508 193 447 1,893 2,533 323,041 
Non-owner occupied207 — 544,694 544,901 7,682 — 145 7,827 552,728 
Land development112 — 28,962 29,074 — 164 216 380 29,454 
Total real estate – commercial mortgage2,830 — 891,653 894,483 7,875 611 2,254 10,740 905,223 
Installment loans to individuals2,026 35 57,339 59,400 31 136 108 275 59,675 
Loans, net of unearned income$8,651 $267 $1,474,138 $1,483,056 $8,671 $6,968 $15,412 $31,051 $1,514,107 
Restructured loans that are not performing in accordance with their restructured terms that are either contractually 90 days or more past due or placed on nonaccrual status are reported as nonperforming loans. There were eightwas 1 restructured loansloan totaling $413$36 that werewas contractually 90 days past due or more and still accruing at December 31, 2018.2021. There were threewas 1 restructured loansloan totaling $128$74 that werewas contractually 90 days past due or more and still accruing at December 31, 2017.2020. The outstanding balance of restructured loans on nonaccrual status was $1,868$10,380 and $523$12,788 at December 31, 20182021 and 2017,2020, respectively.

100


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 54 – Purchased Loans (continued)



Impaired Loans
Non credit deteriorated loans that were subsequently impaired and recognized in conformity with ASC 310, segregated by class, were as follows as of the dates and for the periods presented:
 As of December 31, 2018 Year Ended December 31, 2018
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
With a related allowance recorded:         
Commercial, financial, agricultural$600
 $658
 $173
 $614
 $10
Lease financing
 
 
 
 
Real estate – construction576
 576
 5
 576
 6
Real estate – 1-4 family mortgage1,381
 1,404
 18
 1,362
 18
Real estate – commercial mortgage2,066
 2,116
 338
 2,011
 40
Installment loans to individuals246
 247
 3
 247
 1
Total$4,869
 $5,001
 $537
 $4,810
 $75
With no related allowance recorded:         
Commercial, financial, agricultural$11
 $13
 $
 $13
 $1
Lease financing
 
 
 
 
Real estate – construction
 
 
 
 
Real estate – 1-4 family mortgage3,780
 4,383
 
 4,407
 111
Real estate – commercial mortgage146
 150
 
 159
 7
Installment loans to individuals24
 33
 
 7
 
Total$3,961
 $4,579
 $
 $4,586
 $119
Totals$8,830
 $9,580
 $537
 $9,396
 $194

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 5 – Purchased Loans (continued)


 As of December 31, 2017 Year Ended December 31, 2017
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
With a related allowance recorded:         
Commercial, financial, agricultural$625
 $678
 $52
 $618
 $21
Lease financing
 
 
 
 
Real estate – construction
 
 
 
 
Real estate – 1-4 family mortgage1,385
 1,433
 45
 1,419
 18
Real estate – commercial mortgage728
 733
 6
 751
 26
Installment loans to individuals154
 155
 4
 155
 
Total$2,892
 $2,999
 $107
 $2,943
 $65
With no related allowance recorded:         
Commercial, financial, agricultural$74
 $79
 $
 $75
 $3
Lease financing
 
 
 
 
Real estate – construction1,199
 1,207
 
 318
 47
Real estate – 1-4 family mortgage4,225
 4,740
 
 4,161
 176
Real estate – commercial mortgage165
 168
 
 177
 8
Installment loans to individuals9
 10
 
 13
 
Total$5,672
 $6,204
 $
 $4,744
 $234
Totals$8,564
 $9,203
 $107
 $7,687
 $299
The average recorded investment in non credit deteriorated loans that were subsequently impaired for the year ended December 31, 2016 was $6,594. Interest income recognized on non credit deteriorated loans that were subsequently impaired for the year ended December 31, 2016 was $168.

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 5 – Purchased Loans (continued)


Credit deteriorated loans recognized in conformity with ASC 310-30, segregated by class, were as follows as of the dates and for the periods presented:
 As of December 31, 2018 Year Ended December 31, 2018
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
With a related allowance recorded:         
Commercial, financial, agricultural$3,779
 $4,071
 $161
 $4,276
 $204
Lease financing
 
 
 
 
Real estate – construction
 
 
 
 
Real estate – 1-4 family mortgage12,169
 12,601
 488
 12,894
 647
Real estate – commercial mortgage62,003
 65,273
 1,901
 65,756
 3,201
Installment loans to individuals660
 660
 2
 675
 29
Total$78,611
 $82,605
 $2,552
 $83,601
 $4,081
With no related allowance recorded:         
Commercial, financial, agricultural$25,364
 $40,332
 $
 $12,102
 $669
Lease financing
 
 
 
 
Real estate – construction
 
 
 
 
Real estate – 1-4 family mortgage36,074
 41,222
 
 36,801
 1,647
Real estate – commercial mortgage78,435
 100,427
 
 78,368
 3,578
Installment loans to individuals3,770
 7,630
 
 2,095
 109
Total$143,643
 $189,611
 $
 $129,366
 $6,003
Totals$222,254
 $272,216
 $2,552
 $212,967
 $10,084
 As of December 31, 2017 Year Ended December 31, 2017
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
With a related allowance recorded:         
Commercial, financial, agricultural$5,768
 $6,004
 $312
 $5,672
 $259
Lease financing
 
 
 
 
Real estate – construction
 
 
 
 
Real estate – 1-4 family mortgage15,910
 16,752
 572
 16,837
 793
Real estate – commercial mortgage65,108
 69,029
 892
 68,168
 3,333
Installment loans to individuals698
 698
 1
 710
 25
Total$87,484
 $92,483
 $1,777
 $91,387
 $4,410
With no related allowance recorded:         
Commercial, financial, agricultural$9,547
 $18,175
 $
 $9,208
 $989
Lease financing
 
 
 
 
Real estate – construction
 
 
 
 
Real estate – 1-4 family mortgage38,059
 48,297
 
 46,983
 1,993
Real estate – commercial mortgage91,230
 117,691
 
 104,485
 5,431
Installment loans to individuals940
 1,063
 
 1,109
 46
Total$139,776
 $185,226
 $
 $161,785
 $8,459
Totals$227,260
 $277,709
 $1,777
 $253,172
 $12,869

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 5 – Purchased Loans (continued)


The average recorded investment in credit-deteriorated loans for the year ended December 31, 2016 was $318,032. Interest income recognized on credit-deteriorated loans for the year ended December 31, 2016 was $14,532.
Restructured Loans
At December 31, 2018, 20172021, 2020 and 2016,2019, there were $7,495, $8,965$5,609, $8,687 and $4,028,$7,275, respectively, of restructured loans. The following table illustrates the impact of modifications classified as restructured loans held on the Consolidated Balance Sheets and still performing in accordance with their restructured terms at period end, segregated by class, as of the periods presented.
Number of
Loans
Pre-Modification
Outstanding
Recorded
Investment
Post-Modification
Outstanding
Recorded
Investment
December 31, 2021
Commercial, financial, agricultural$135 $135 
Real estate – 1-4 family mortgage:
Primary1,026 1,026 
Total$1,161 $1,161 
December 31, 2020
Commercial, financial, agricultural$1,029 $1,031 
Real estate – 1-4 family mortgage:
Primary334 227 
Home equity159 162 
Total real estate – 1-4 family mortgage493 389 
Real estate – commercial mortgage:
Owner-occupied3,173 2,913 
Non-owner occupied542 544 
Total real estate – commercial mortgage3,715 3,457 
Installment loans to individuals25 19 
Total13 $5,262 $4,896 
December 31, 2019
Commercial, financial, agricultural$2,778 $2,778 
Real estate – 1-4 family mortgage73 73 
Real estate – commercial mortgage80 76 
Total$2,931 $2,927 
 
Number of
Loans
 
Pre-Modification
Outstanding
Recorded
Investment
 
Post-Modification
Outstanding
Recorded
Investment
December 31, 2018     
Commercial, financial, agricultural1
 $48
 $44
Lease financing
 
 
Real estate – construction
 
 
Real estate – 1-4 family mortgage2
 142
 127
Real estate – commercial mortgage2
 522
 381
Installment loans to individuals
 
 
Total5
 $712
 $552
December 31, 2017     
Commercial, financial, agricultural
 $
 $
Lease financing
 
 
Real estate – construction
 
 
Real estate – 1-4 family mortgage23
 3,744
 3,127
Real estate – commercial mortgage5
 3,115
 2,231
Installment loans to individuals
 
 
Total28
 $6,859
 $5,358
December 31, 2016     
Commercial, financial, agricultural1
 $41
 $17
Lease financing
 
 
Real estate – construction
 
 
Real estate – 1-4 family mortgage17
 1,608
 1,269
Real estate – commercial mortgage5
 1,623
 1,079
Installment loans to individuals
 
 
Total23
 $3,272
 $2,365
During the year ended December 31, 2021, the Company had no troubled debt restructurings that subsequently defaulted within twelve months of the restructuring. During the years ended December 31, 20172020 and 2016,2019, the Company had $212$74 and $54,$101, respectively, in troubled debt restructurings that subsequently defaulted within twelve months of the restructuring. There was no such occurrence for the year ended December 31, 2018.



101


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 54 – Purchased Loans (continued)



Changes in the Company’s restructured loans are set forth in the table below.
Number of
Loans
Recorded
Investment
Number of
Loans
 
Recorded
Investment
Totals at January 1, 201742
 $4,028
Additional loans with concessions36
 5,703
Reclassified from nonperforming9
 838
Totals at January 1, 2020Totals at January 1, 202054 $7,275 
Additional advances or loans with concessionsAdditional advances or loans with concessions13 5,378 
Reclassified as performingReclassified as performing74 
Reductions due to:   Reductions due to:
Reclassified as nonperforming(10) (786)Reclassified as nonperforming(14)(2,563)
Paid in full(3) (323)Paid in full(5)(978)
Charge-offs(1) (17)Charge-offs(1)(3)
Principal paydowns
 (377)Principal paydowns— (496)
Lapse of concession period(1) (101)
Totals at December 31, 201772
 $8,965
Additional loans with concessions5
 712
Reclassified from nonperforming4
 435
Totals at December 31, 2020Totals at December 31, 202048 $8,687 
Additional advances or loans with concessionsAdditional advances or loans with concessions1,419 
Reclassified as performingReclassified as performing115 
Reductions due to:   Reductions due to:
Reclassified as nonperforming(13) (1,229)Reclassified as nonperforming(8)(2,751)
Paid in full(14) (744)Paid in full(6)(1,388)
Charge-offsCharge-offs(1)(205)
Principal paydowns
 (644)Principal paydowns— (268)
Totals at December 31, 201854
 $7,495
Totals at December 31, 2021Totals at December 31, 202138 $5,609 
The allocated allowance for loancredit losses attributable to restructured loans was $58$104 and $103$612 at December 31, 20182021 and 2017,2020, respectively. The Company had $3 remaining availability under commitments to lend additional funds on these restructured loans at December 31, 2018$2 and $9$370 in remaining availability under commitments to lend additional funds on these restructured loans at December 31, 2017.2021 and 2020, respectively.
As discussed in Note 3, “Non Purchased Loans,” the Company implemented a loan deferral program in response to the COVID-19 pandemic. As of December 31, 2021, the Company had 2 loans with total balances of approximately $76 remaining on deferral. Under the applicable guidance, none of these loans were considered “restructured loans.”
Credit Quality
A discussion of the Company’s policies regarding internal risk-rating of loans is discussed above in Note 3, “Non Purchased Loans.” The following table presentstables present the Company’s loan portfolio by year of origination and internal risk-rating grades as of the dates presented:
 Pass Watch Substandard Total
December 31, 2018       
Commercial, financial, agricultural$333,147
 $33,857
 $2,744
 $369,748
Real estate – construction101,122
 
 842
 101,964
Real estate – 1-4 family mortgage113,874
 7,347
 7,585
 128,806
Real estate – commercial mortgage1,198,540
 43,046
 9,984
 1,251,570
Installment loans to individuals
 
 2
 2
Total$1,746,683
 $84,250
 $21,157
 $1,852,090
December 31, 2017       
Commercial, financial, agricultural$241,195
 $4,974
 $2,824
 $248,993
Real estate – construction81,220
 
 
 81,220
Real estate – 1-4 family mortgage91,369
 2,498
 6,172
 100,039
Real estate – commercial mortgage827,372
 17,123
 9,003
 853,498
Installment loans to individuals678
 
 3
 681
Total$1,241,834
 $24,595
 $18,002
 $1,284,431
 Term Loans Amortized Cost Basis by Origination Year
 20212020201920182017PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
December 31, 2021
Commercial, Financial, Agricultural$ $ $646 $12,199 $12,247 $25,562 $38,328 $1,326 $90,308 
Pass— — 646 11,612 8,918 18,877 37,555 899 78,507 
Special Mention— — — 246 — — — — 246 
Substandard— — — 341 3,329 6,685 773 427 11,555 
Real Estate - Construction$ $ $ $601 $ $4,393 $ $ $4,994 
Residential$— $— $— $601 $— $686 $— $— $1,287 
Pass— — — 601 — 686 — — 1,287 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 

102


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 54 – Purchased Loans (continued)



 Term Loans Amortized Cost Basis by Origination Year
 20212020201920182017PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
Commercial$— $— $— $— $— $3,707 $— $— $3,707 
Pass— — — — — 3,707 — — 3,707 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Real Estate - 1-4 Family Mortgage$ $ $152 $10,151 $2,781 $32,841 $1,476 $201 $47,602 
Primary$— $— $34 $2,485 $1,367 $12,336 $161 $— $16,383 
Pass— — 34 2,485 1,367 9,408 161 — 13,455 
Special Mention— — — — — 59 — — 59 
Substandard— — — — — 2,869 — — 2,869 
Home Equity$— $— $— $— $— $42 $1,087 $201 $1,330 
Pass— — — — — 42 717 — 759 
Special Mention— — — — — — — — — 
Substandard— — — — — — 370 201 571 
Rental/Investment$— $— $118 $804 $1,273 $17,806 $228 $— $20,229 
Pass— — 118 804 1,273 17,035 77 — 19,307 
Special Mention— — — — — 38 — — 38 
Substandard— — — — — 733 151 — 884 
Land Development$— $— $— $6,862 $141 $2,657 $— $— $9,660 
Pass— — — 6,862 111 1,249 — — 8,222 
Special Mention— — — — — — — — — 
Substandard— — — — 30 1,408 — — 1,438 
Real Estate - Commercial Mortgage$ $ $325 $50,519 $123,254 $467,983 $5,912 $14,324 $662,317 
Owner-Occupied$— $— $— $13,344 $17,621 $200,111 $3,056 $— $234,132 
Pass— — — 13,344 13,888 182,779 3,056 — 213,067 
Special Mention— — — — 1,553 394 — — 1,947 
Substandard— — — — 2,180 16,938 — — 19,118 
Non-Owner Occupied$— $— $325 $35,887 $103,739 $254,080 $2,222 $14,324 $410,577 
Pass— — 325 19,510 100,682 222,048 2,222 4,418 349,205 
Special Mention— — — 16,370 — 359 — — 16,729 
Substandard— — — 3,057 31,673 — 9,906 44,643 
Land Development$— $— $— $1,288 $1,894 $13,792 $634 $— $17,608 
Pass— — — 1,288 1,894 7,904 634 — 11,720 
Special Mention— — — — — 5,141 — — 5,141 
Substandard— — — — — 747 — — 747 
Installment loans to individuals$ $ $ $ $ $ $ $ $ 
Pass— — — — — — — — — 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total loans subject to risk rating$ $ $1,123 $73,470 $138,282 $530,779 $45,716 $15,851 $805,221 
Pass— — 1,123 56,506 128,133 463,735 44,422 5,317 699,236 
Special Mention— — — 16,616 1,553 5,991 — — 24,160 
Substandard— — — 348 8,596 61,053 1,294 10,534 81,825 

103


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 4 – Purchased Loans (continued)


 Term Loans Amortized Cost Basis by Origination Year
 20202019201820172016PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
December 31, 2020
Commercial, Financial, Agricultural$ $711 $28,242 $27,222 $22,377 $20,759 $64,563 $1,788 $165,662 
Pass— 711 24,211 20,930 17,240 16,880 56,736 409 137,117 
Special Mention— — 357 97 104 — — — 558 
Substandard— — 3,674 6,195 5,033 3,879 7,827 1,379 27,987 
Real Estate - Construction$ $ $10,522 $9,228 $10,781 $ $ $ $30,531 
Residential$— $— $1,543 $211 $684 $— $— $— $2,438 
Pass— — 1,543 211 684 — — — 2,438 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Commercial$— $— $8,979 $9,017 $10,097 $— $— $— $28,093 
Pass— — 8,979 9,017 10,097 — — — 28,093 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Real Estate - 1-4 Family Mortgage$ $ $14,022 $7,126 $1,112 $38,747 $957 $253 $62,217 
Primary$— $— $6,873 $3,212 $595 $17,223 $249 $— $28,152 
Pass— — 5,556 3,212 594 12,665 249 — 22,276 
Special Mention— — — — — 1,120 — — 1,120 
Substandard— — 1,317 — 3,438 — — 4,756 
Home Equity$— $— $— $— $— $— $697 $253 $950 
Pass— — — — — — 59 — 59 
Special Mention— — — — — — — — — 
Substandard— — — — — — 638 253 891 
Rental/Investment$— $— $— $1,883 $232 $18,275 $$— $20,399 
Pass— — — 1,883 232 16,139 — 18,263 
Special Mention— — — — — 44 — — 44 
Substandard— — — — — 2,092 — — 2,092 
Land Development$— $— $7,149 $2,031 $285 $3,249 $$— $12,716 
Pass— — 7,149 2,009 285 1,793 — 11,238 
Special Mention— — — — — — — — — 
Substandard— — — 22 — 1,456 — — 1,478 
Real Estate - Commercial Mortgage$ $ $76,557 $153,960 $171,487 $435,073 $22,631 $4,688 $864,396 
Owner-Occupied$— $— $15,001 $32,567 $61,568 $181,007 $9,723 $$299,868 
Pass— — 15,001 29,276 43,962 161,790 5,808 — 255,837 
Special Mention— — — — 9,670 — — — 9,670 
Substandard— — — 3,291 7,936 19,217 3,915 34,361 
Non-Owner Occupied$— $— $55,962 $117,592 $107,004 $242,249 $12,720 $4,686 $540,213 
Pass— — 37,002 109,910 83,738 221,423 6,431 — 458,504 
Special Mention— — 2,591 — 5,302 2,622 — — 10,515 
Substandard— — 16,369 7,682 17,964 18,204 6,289 4,686 71,194 
104


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 4 – Purchased Loans (continued)

 Term Loans Amortized Cost Basis by Origination Year
 20202019201820172016PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
Land Development$— $— $5,594 $3,801 $2,915 $11,817 $188 $— $24,315 
Pass— — 5,594 3,801 2,780 4,962 188 — 17,325 
Special Mention— — — — — 5,438 — — 5,438 
Substandard— — — — 135 1,417 — — 1,552 
Installment loans to individuals$ $ $ $ $ $ $ $ $ 
Pass— — — — — — — — — 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total loans subject to risk rating$ $711 $129,343 $197,536 $205,757 $494,579 $88,151 $6,729 $1,122,806 
Pass— 711 105,035 180,249 159,612 435,652 69,482 409 951,150 
Special Mention— — 2,948 97 15,076 9,224 — — 27,345 
Substandard— — 21,360 17,190 31,069 49,703 18,669 6,320 144,311 

The following table presentstables present the performing status of the Company’s loan portfolio not subject to risk rating as of the dates presented:
 Term Loans Amortized Cost Basis by Origination Year
 20212020201920182017PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
December 31, 2021
Commercial, Financial, Agricultural$ $ $ $ $ $ $ $ $ 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Real Estate - Construction$ $ $ $ $ $ $ $ $ 
Residential$— $— $— $— $— $— $— $— $— 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Commercial$— $— $— $— $— $— $— $— $— 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Real Estate - 1-4 Family Mortgage$ $ $202 $1,480 $19,988 $101,060 $44,086 $1,355 $168,171 
Primary$— $— $202 $938 $17,505 $98,961 $— $81 $117,687 
Performing Loans— — 202 829 16,902 94,607 — 81 112,621 
Non-Performing Loans— — — 109 603 4,354 — — 5,066 
Home Equity$— $— $— $542 $2,441 $1,823 $44,086 $1,274 $50,166 
Performing Loans— — — 542 2,441 1,769 43,700 1,141 49,593 
Non-Performing Loans— — — — — 54 386 133 573 
Rental/Investment$— $— $— $— $— $— $— $— $— 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Land Development$— $— $— $— $42 $276 $— $— $318 
Performing Loans— — — — 42 276 — — 318 
Non-Performing Loans— — — — — — — — — 
105
 Performing Non-Performing Total
December 31, 2018     
Commercial, financial, agricultural$21,303
 $69
 $21,372
Lease financing
 
 
Real estate – construction3,185
 
 3,185
Real estate – 1-4 family mortgage526,699
 3,705
 530,404
Real estate – commercial mortgage30,951
 185
 31,136
Installment loans to individuals32,676
 300
 32,976
Total$614,814
 $4,259
 $619,073
December 31, 2017     
Commercial, financial, agricultural$11,216
 $46
 $11,262
Lease financing
 
 
Real estate – construction4,511
 
 4,511
Real estate – 1-4 family mortgage459,038
 1,141
 460,179
Real estate – commercial mortgage27,495
 123
 27,618
Installment loans to individuals16,344
 161
 16,505
Total$518,604
 $1,471
 $520,075
Loans Purchased with Deteriorated Credit Quality
Loans purchased in business combinations that exhibited, at the date of acquisition, evidence of deterioration of the credit quality since origination, such that it was probable that all contractually required payments would not be collected, were as follows as of the dates presented:

  Total Purchased Credit Deteriorated Loans
December 31, 2018  
Commercial, financial, agricultural $29,143
Lease financing 
Real estate – construction 
Real estate – 1-4 family mortgage 48,243
Real estate – commercial mortgage 140,438
Installment loans to individuals 4,430
Total $222,254
December 31, 2017  
Commercial, financial, agricultural $15,315
Lease financing 
Real estate – construction 
Real estate – 1-4 family mortgage 53,969
Real estate – commercial mortgage 156,338
Installment loans to individuals 1,638
Total $227,260


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 54 – Purchased Loans (continued)



 Term Loans Amortized Cost Basis by Origination Year
 20212020201920182017PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
Real Estate - Commercial Mortgage$ $ $ $147 $31 $558 $ $ $736 
Owner-Occupied$— $— $— $— $— $— $— $— $— 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Non-Owner Occupied$— $— $— $— $— $— $— $— $— 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Land Development$— $— $— $147 $31 $558 $— $— $736 
Performing Loans— — — 147 31 558 — — 736 
Non-Performing Loans— — — — — — — — — 
Installment loans to individuals$ $ $ $20,581 $9,721 $3,881 $1,558 $34 $35,775 
Performing Loans— — — 20,566 9,714 3,684 1,541 23 35,528 
Non-Performing Loans— — — 15 197 17 11 247 
Total loans not subject to risk rating$ $ $202 $22,208 $29,740 $105,499 $45,644 $1,389 $204,682 
Performing Loans— — 202 22,084 29,130 100,894 45,241 1,245 198,796 
Non-Performing Loans— — — 124 610 4,605 403 144 5,886 
The following table presents the fair value of loans determined to be impaired at the time of acquisition:
 Term Loans Amortized Cost Basis by Origination Year
 20202019201820172016PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
December 31, 2020
Commercial, Financial, Agricultural$ $ $445 $349 $303 $2,899 $6,809 $46 $10,851 
Performing Loans— — 445 349 303 2,899 6,784 46 10,826 
Non-Performing Loans— — — — — — 25 — 25 
Real Estate - Construction$ $ $421 $ $ $ $ $ $421 
Residential$— $— $421 $— $— $— $— $— $421 
Performing Loans— — 421 — — — — — 421 
Non-Performing Loans— — — — — — — — — 
Commercial$— $— $— $— $— $— $— $— $— 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Real Estate - 1-4 Family Mortgage$ $371 $3,082 $33,674 $28,169 $140,689 $70,870 $2,672 $279,527 
Primary$— $248 $1,953 $30,078 $25,956 $127,642 $630 $111 $186,618 
Performing Loans— 248 1,842 29,321 25,935 122,970 630 25 180,971 
Non-Performing Loans— — 111 757 21 4,672 — 86 5,647 
Home Equity$— $— $742 $3,324 $1,668 $1,027 $70,120 $2,561 $79,442 
Performing Loans— — 742 3,324 1,668 960 69,518 2,124 78,336 
Non-Performing Loans— — — — — 67 602 437 1,106 
Rental/Investment$— $123 $— $200 $193 $10,893 $120 $— $11,529 
Performing Loans— 123 — 200 193 10,800 120 — 11,436 
Non-Performing Loans— — — — — 93 — — 93 
106
 Total Purchased Credit Deteriorated Loans
December 31, 2018 
Contractually-required principal and interest$319,214
Nonaccretable difference(1)
(62,695)
Cash flows expected to be collected256,519
Accretable yield(2)
(34,265)
Fair value$222,254
December 31, 2017 
Contractually-required principal and interest$316,854
Nonaccretable difference(1)
(57,387)
Cash flows expected to be collected259,467
Accretable yield(2)
(32,207)
Fair value$227,260
(1)Represents contractual principal cash flows of $52,061 and $48,345, respectively, and interest cash flows of $10,634 and $9,042, respectively, not expected to be collected.
(2)Represents contractual principal cash flows of $1,667 and $1,640, respectively, and interest cash flows of $32,598 and $30,567, respectively, expected to be collected.
Changes in the accretable yield of loans purchased with deteriorated credit quality were as follows:

 Total Purchased Credit Deteriorated Loans
Balance at January 1, 2017$(37,473)
Additions through acquisition(1,777)
Reclasses from nonaccretable difference(9,750)
Accretion15,560
Charge-off1,233
Balance at December 31, 2017$(32,207)
Additions through acquisition(10,143)
Reclasses from nonaccretable difference(7,883)
Accretion15,340
Charge-off628
Balance at December 31, 2018$(34,265)
The following table presents the fair value of loans purchased from Brand as of the September 1, 2018 acquisition date.
At acquisition date: September 1, 2018
  Contractually-required principal and interest $1,625,137
  Nonaccretable difference (123,399)
  Cash flows expected to be collected 1,501,738
  Accretable yield (170,651)
      Fair value $1,331,087


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 54 – Purchased Loans (continued)



The following table presents the fair value of loans purchased from Metropolitan as of the July 1, 2017 acquisition date.
 Term Loans Amortized Cost Basis by Origination Year
 20202019201820172016PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
Land Development$— $— $387 $72 $352 $1,127 $— $— $1,938 
Performing Loans— — 387 30 117 1,127 — — 1,661 
Non-Performing Loans— — — 42 235 — — — 277 
Real Estate - Commercial Mortgage$ $337 $597 $1,063 $982 $35,946 $1,902 $ $40,827 
Owner-Occupied$— $— $— $625 $660 $20,531 $1,357 $— $23,173 
Performing Loans— — — 625 660 20,253 1,357 — 22,895 
Non-Performing Loans— — — — — 278 — — 278 
Non-Owner Occupied$— $337 $443 $49 $66 $11,467 $153 $— $12,515 
Performing Loans— 337 443 49 66 11,331 153 — 12,379 
Non-Performing Loans— — — — — 136 — — 136 
Land Development$— $— $154 $389 $256 $3,948 $392 $— $5,139 
Performing Loans— — 154 389 256 3,890 392 — 5,081 
Non-Performing Loans— — — — — 58 — — 58 
Installment loans to individuals$ $ $34,976 $15,497 $1,118 $4,348 $3,676 $60 $59,675 
Performing Loans— — 34,942 15,405 1,051 4,262 3,676 29 59,365 
Non-Performing Loans— — 34 92 67 86 — 31 310 
Total loans not subject to risk rating$ $708 $39,521 $50,583 $30,572 $183,882 $83,257 $2,778 $391,301 
Performing Loans— 708 39,376 49,692 30,249 178,492 82,630 2,224 383,371 
Non-Performing Loans— — 145 891 323 5,390 627 554 7,930 
107
At acquisition date: July 1, 2017
  Contractually-required principal and interest $1,198,741
  Nonaccretable difference (79,165)
  Cash flows expected to be collected 1,119,576
  Accretable yield (154,543)
      Fair value $965,033






Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements

Note 65 – Allowance for LoanCredit Losses
(In Thousands, Except Number of Loans)
The following is a summary of non purchased and purchased loans and leases at December 31:
20212020
Commercial, financial, agricultural$1,423,270 $2,536,984 
Lease financing80,192 80,022 
Real estate – construction:
Residential302,275 246,673 
Commercial802,621 611,431 
Total real estate – construction1,104,896 858,104 
Real estate – 1-4 family mortgage:
Primary1,816,120 1,750,951 
Home equity474,604 513,160 
Rental/investment288,474 296,364 
Land development145,048 137,833 
Total real estate – 1-4 family mortgage2,724,246 2,698,308 
Real estate – commercial mortgage:
Owner-occupied1,563,351 1,657,806 
Non-owner occupied2,856,947 2,747,467 
Land development128,739 149,579 
Total real estate – commercial mortgage4,549,037 4,554,852 
Installment loans to individuals143,340 209,537 
Gross loans10,024,981 10,937,807 
Unearned income(4,067)(4,160)
Loans, net of unearned income10,020,914 10,933,647 
Allowance for credit losses on loans(164,171)(176,144)
Net loans$9,856,743 $10,757,503 

108

 2018 2017
Commercial, financial, agricultural$1,295,912
 $1,039,393
Lease financing64,992
 57,354
Real estate – construction740,668
 633,389
Real estate – 1-4 family mortgage2,795,343
 2,343,721
Real estate – commercial mortgage4,051,509
 3,427,530
Installment loans to individuals137,832
 122,276
Gross loans9,086,256
 7,623,663
Unearned income(3,127) (3,341)
Loans, net of unearned income9,083,129
 7,620,322
Allowance for loan losses(49,026) (46,211)
Net loans$9,034,103
 $7,574,111

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 5 – Allowance for Credit Losses (continued)

Allowance for LoanCredit Losses on Loans
The following table provides a roll-forward of the allowance for credit losses by loan lossescategory and a breakdown of the ending balance of the allowance based on the Company’s impairmentcredit loss methodology for the periods presented:
CommercialReal Estate  -
Construction
Real Estate -
1-4 Family
Mortgage
Real Estate  -
Commercial
Mortgage
Lease FinancingInstallment Loans to IndividualsTotal
Year Ended December 31, 2021
Allowance for credit losses on loans:
Beginning balance$39,031 $16,047 $32,165 $76,127 $1,624 $11,150 $176,144 
Charge-offs(7,087)(52)(1,164)(5,184)(13)(5,374)(18,874)
Recoveries1,470 13 1,498 541 49 5,030 8,601 
Net charge-offs(5,617)(39)334 (4,643)36 (344)(10,273)
Provision (recoveries) of credit losses on loans508 411 (143)(2,544)(174)242 (1,700)
Ending balance$33,922 $16,419 $32,356 $68,940 $1,486 $11,048 $164,171 
Period-End Amount Allocated to:
Individually evaluated$9,239 $— $216 $2,401 $— $607 $12,463 
Collectively evaluated24,683 16,419 32,140 66,539 1,486 10,441 151,708 
Ending balance$33,922 $16,419 $32,356 $68,940 $1,486 $11,048 $164,171 
Loans:
Individually evaluated$12,776 $— $5,360 $14,623 $— $690 $33,449 
Collectively evaluated1,410,494 1,104,896 2,718,886 4,534,414 76,125 142,650 9,987,465 
Ending balance$1,423,270 $1,104,896 $2,724,246 $4,549,037 $76,125 $143,340 $10,020,914 
Nonaccruing loans with no allowance for credit losses$397 $— $2,329 $5,270 $— $22 $8,018 
109


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 5 – Allowance for Credit Losses (continued)

CommercialReal Estate  -
Construction
Real Estate -
1-4 Family
Mortgage
Real Estate  -
Commercial
Mortgage
Lease FinancingInstallment Loans to IndividualsTotal
Commercial 
Real Estate  -
Construction
 
Real Estate -
1-4 Family
Mortgage
 
Real Estate  -
Commercial
Mortgage
 
Installment
and Other(1)
 Total
Year Ended December 31, 2018           
Allowance for loan losses:           
Year Ended December 31, 2020Year Ended December 31, 2020
Allowance for credit losses on loans:Allowance for credit losses on loans:
Beginning balance$5,542
 $3,428
 $12,009
 $23,384
 $1,848
 $46,211
Beginning balance$10,658 $5,029 $9,814 $24,990 $910 $761 $52,162 
Impact of the adoption of ASC 326
Impact of the adoption of ASC 326
11,351 3,505 14,314 4,293 521 8,500 42,484 
Charge-offs(2,415) (51) (2,023) (1,197) (742) (6,428)Charge-offs(3,577)(716)(1,167)(2,642)(168)(7,835)(16,105)
Recoveries618
 13
 573
 1,108
 121
 2,433
Recoveries1,263 31 838 2,478 11 7,632 12,253 
Net charge-offs(1,797) (38) (1,450) (89) (621) (3,995)Net charge-offs(2,314)(685)(329)(164)(157)(203)(3,852)
Provision for loan losses charged to operations4,524
 1,365
 (420) 1,197
 144
 6,810
Provision for credit losses on loansProvision for credit losses on loans19,336 8,198 8,366 47,008 350 2,092 85,350 
Ending balance$8,269
 $4,755
 $10,139
 $24,492
 $1,371
 $49,026
Ending balance$39,031 $16,047 $32,165 $76,127 $1,624 $11,150 $176,144 
Period-End Amount Allocated to:           Period-End Amount Allocated to:
Individually evaluated for impairment$336
 $68
 $79
 $1,027
 $4
 $1,514
Collectively evaluated for impairment7,772
 4,687
 9,572
 21,564
 1,365
 44,960
Purchased with deteriorated credit quality161
 
 488
 1,901
 2
 2,552
Individually evaluatedIndividually evaluated$10,345 $497 $300 $2,444 $— $604 $14,190 
Collectively evaluatedCollectively evaluated28,686 15,550 31,865 73,683 1,624 10,546 161,954 
Ending balance$8,269
 $4,755
 $10,139
 $24,492
 $1,371
 $49,026
Ending balance$39,031 $16,047 $32,165 $76,127 $1,624 $11,150 $176,144 
Loans:Loans:
Individually evaluatedIndividually evaluated$16,091 $497 $5,379 $21,764 $— $619 $44,350 
Collectively evaluatedCollectively evaluated2,520,893 857,607 2,692,929 4,533,088 75,862 208,918 10,889,297 
Ending balanceEnding balance$2,536,984 $858,104 $2,698,308 $4,554,852 $75,862 $209,537 $10,933,647 
Nonaccruing loans with no allowance for credit lossesNonaccruing loans with no allowance for credit losses$541 $— $4,054 $4,382 $— $— $8,977 
The Company’s allowance for credit loss model considers economic projections, primarily the national unemployment rate and GDP, over a reasonable and supportable period of two years. Based on the continual improvements in these forecasts over the last year, nominal loan growth excluding PPP loans and stable credit metrics, the Company’s allowance model indicated that a release of the allowance for credit losses was appropriate during 2021.


110


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 5 – Allowance for Credit Losses (continued)

The following table provides a roll-forward of the allowance for credit losses by loan category and a breakdown of the ending balance of the allowance based on the Company’s credit loss methodology prior to the adoption of ASC 326 for the periods presented:
CommercialReal Estate  -
Construction
Real Estate -
1-4 Family
Mortgage
Real Estate  -
Commercial
Mortgage
Installment
and Other(1)
Total
Year Ended December 31, 2019
Allowance for loan losses:
Beginning balance$8,269 $4,755 $10,139 $24,492 $1,371 $49,026 
Charge-offs(2,681)— (1,602)(1,490)(7,705)(13,478)
Recoveries1,428 21 712 689 6,714 9,564 
Net charge-offs(1,253)21 (890)(801)(991)(3,914)
Provision for loan losses3,642 253 565 1,299 1,291 7,050 
Ending balance$10,658 $5,029 $9,814 $24,990 $1,671 $52,162 
Period-End Amount Allocated to:
Individually evaluated for impairment$1,434 $16 $160 $396 $$2,012 
Collectively evaluated for impairment8,932 5,013 9,363 23,208 1,663 48,179 
Purchased with deteriorated credit quality292 — 291 1,386 1,971 
Ending balance$10,658 $5,029 $9,814 $24,990 $1,671 $52,162 
(1)Includes lease financing receivables.

Allowance for Credit Losses on Unfunded Loan Commitments
The following table provides a roll-forward of the allowance for credit losses on unfunded loan commitments for the periods presented.
Year Ended
20212020
Allowance for credit losses on unfunded loan commitments:
Beginning balance$20,535 $946 
Impact of the adoption of ASC 326
— 10,389 
Provision for credit losses on unfunded loan commitments (included in other noninterest expense)(500)9,200 
Ending balance$20,035 $20,535 


Note 6 – Premises and Equipment
(In Thousands)
Bank premises and equipment at December 31 are summarized as follows:
20212020
Premises$247,484 $250,313 
Leasehold improvements29,412 21,289 
Furniture and equipment65,286 64,798 
Computer equipment24,412 24,114 
Autos143 144 
Lease right-of-use assets63,547 66,023 
Total430,284 426,681 
Accumulated depreciation(137,162)(126,185)
Net$293,122 $300,496 
111

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 6 – Allowance for Loan Losses (continued)


 Commercial 
Real Estate  -
Construction
 
Real Estate -
1-4 Family
Mortgage
 
Real Estate  -
Commercial
Mortgage
 
Installment
and Other(1)
 Total
Year Ended December 31, 2017           
Allowance for loan losses:           
Beginning balance$5,486
 $2,380
 $14,294
 $19,059
 $1,518
 $42,737
Charge-offs(2,874) 
 (1,713) (1,791) (630) (7,008)
Recoveries422
 105
 733
 1,565
 107
 2,932
Net charge-offs(2,452) 105
 (980) (226) (523) (4,076)
Provision for loan losses charged to operations2,508
 943
 (1,305) 4,551
 853
 7,550
Ending balance$5,542
 $3,428
 $12,009
 $23,384

$1,848
 $46,211
Period-End Amount Allocated to:           
Individually evaluated for impairment$190
 $4
 $606
 $1,867
 $7
 $2,674
Collectively evaluated for impairment5,040
 3,424
 10,831
 20,625
 1,840
 41,760
Purchased with deteriorated credit quality312
 
 572
 892
 1
 1,777
Ending balance$5,542
 $3,428
 $12,009
 $23,384
 $1,848
 $46,211
Year Ended December 31, 2016           
Allowance for loan losses:           
Beginning balance$4,186
 $1,852
 $13,908
 $21,111
 $1,380
 $42,437
Charge-offs(2,725) 
 (3,906) (2,123) (717) (9,471)
Recoveries331
 47
 997
 757
 109
 2,241
Net charge-offs(2,394) 47
 (2,909) (1,366) (608) (7,230)
Provision for loan losses3,716
 364
 2,616
 (879) 787
 6,604
Benefit attributable to FDIC loss share agreements(61) 
 (115) (48) (41) (265)
Recoveries payable to FDIC39
 117
 794
 241
 
 1,191
Provision for loan losses charged to operations3,694
 481
 3,295
 (686) 746
 7,530
Ending balance$5,486
 $2,380
 $14,294
 $19,059
 $1,518
 $42,737
Period-End Amount Allocated to:           
Individually evaluated for impairment$446
 $1
 $1,134
 $2,445
 $115
 $4,141
Collectively evaluated for impairment4,668
 2,379
 12,319
 15,008
 1,402
 35,776
Purchased with deteriorated credit quality372
 
 841
 1,606
 1
 2,820
Ending balance$5,486
 $2,380
 $14,294
 $19,059
 $1,518
 $42,737
            
(1)
Includes lease financing receivables.

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 6 – Allowance for Loan Losses (continued)


The following table provides the recorded investment in loans, net of unearned income, based on the Company’s impairment methodology as of the dates presented:
 Commercial 
Real Estate  -
Construction
 
Real Estate -
1-4 Family
Mortgage
 
Real Estate  -
Commercial
Mortgage
 
Installment
and Other(1)
 Total
December 31, 2018           
Individually evaluated for impairment$2,445
 $10,043
 $14,238
 $8,059
 $493
 $35,278
Collectively evaluated for impairment1,264,324
 730,625
 2,732,862
 3,903,012
 194,774
 8,825,597
Acquired with deteriorated credit quality29,143
 
 48,243
 140,438
 4,430
 222,254
Ending balance$1,295,912
 $740,668
 $2,795,343
 $4,051,509
 $199,697
 $9,083,129
December 31, 2017           
Individually evaluated for impairment$3,064
 $1,777
 $14,482
 $10,545
 $439
 $30,307
Collectively evaluated for impairment1,021,014
 631,612
 2,275,270
 3,260,648
 174,211
 7,362,755
Acquired with deteriorated credit quality15,315
 
 53,969
 156,337
 1,639
 227,260
Ending balance$1,039,393
 $633,389
 $2,343,721
 $3,427,530
 $176,289
 $7,620,322
(1)Includes lease financing receivables.
Note 7 –- Premises and Equipment (continued)
(In Thousands)
Bank premises and equipment at December 31 are summarized as follows:
 2018 2017
Premises$218,730
 $193,173
Leasehold improvements10,241
 7,736
Furniture and equipment52,043
 45,625
Computer equipment20,972
 15,686
Autos166
 182
Total302,152
 262,402
Accumulated depreciation(92,984) (79,148)
Net$209,168
 $183,254
Depreciation expense was $14,358, $13,136$16,406, $18,699 and $12,066$16,379 for the years ended December 31, 2018, 20172021, 2020 and 2016,2019, respectively.
The Company has operating leases which extend to 2034See Note 24, “Leases,” for certain land and office locations. Leases that expire are generally expected to be renewed or replaced by other leases. Rental expense was $6,157, $4,827 and $4,460 for 2018, 2017 and 2016, respectively. The following is a summary of future minimum lease payments for years following December 31, 2018:further details regarding the Company’s right-of-use assets.

2019$9,389
20208,199
20216,339
20224,929
20233,711
Thereafter12,592
Total$45,159
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 7 - Premises and Equipment (continued)

In the Brand acquisition, the Company assumed several leases with related parties. The future minimum lease payments for these leases are $10,078 and they have varying expiration dates through 2025. Rental expense on the assumed related party leases, which is included in the total rental expense above, was $638 for 2018.
Note 8 – Other Real Estate Owned
(In Thousands)
The following table provides details of the Company’s other real estate owned (“OREO”) purchased and non purchased, net of valuation allowances and direct write-downs, as of the dates presented:
Purchased OREONon Purchased OREOTotal
OREO
December 31, 2021
Residential real estate$93 $166 $259 
Commercial real estate39 722 761 
Residential land development301 305 
Commercial land development1,156 59 1,215 
Total$1,589 $951 $2,540 
December 31, 2020
Residential real estate$72 $107 $179 
Commercial real estate1,741 924 2,665 
Residential land development337 676 1,013 
Commercial land development1,777 338 2,115 
Total$3,927 $2,045 $5,972 
 Purchased OREO Non Purchased OREO 
Total
OREO
December 31, 2018     
Residential real estate$423
 $1,910
 $2,333
Commercial real estate2,686
 1,611
 4,297
Residential land development678
 421
 1,099
Commercial land development2,400
 911
 3,311
Total$6,187
 $4,853
 $11,040
December 31, 2017     
Residential real estate$1,683
 $758
 $2,441
Commercial real estate4,314
 1,624
 5,938
Residential land development1,100
 781
 1,881
Commercial land development4,427
 1,247
 5,674
Total$11,524
 $4,410
 $15,934

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 8 – Other Real Estate Owned (continued)


Changes in the Company’s purchased and non purchased OREO were as follows for the periods presented:
Purchased OREONon Purchased OREOTotal
OREO
Balance at December 31, 2019$5,248 $2,762 $8,010 
Transfers of loans4,058 4,530 8,588 
Impairments(1,581)(579)(2,160)
Dispositions(3,747)(4,668)(8,415)
Other(51)— (51)
Balance at December 31, 2020$3,927 $2,045 $5,972 
Transfers of loans1,056 2,124 3,180 
Impairments(220)(86)(306)
Dispositions(3,043)(3,123)(6,166)
Other(131)(9)(140)
Balance at December 31, 2021$1,589 $951 $2,540 
At December 31, 2021 and 2020, the amortized cost of loans secured by Real Estate - 1-4 Family Mortgage in the process of foreclosure was $22 and $1,308, respectively.

112

 Purchased OREO Non Purchased OREO 
Total
OREO
Balance at December 31, 2016$17,370
 $5,929
 $23,299
Purchased OREO1,203
 
 1,203
Transfers of loans4,970
 1,729
 6,699
Impairments(1,199) (694) (1,893)
Dispositions(10,438) (3,027) (13,465)
Other(382) 473
 91
Balance at December 31, 2017$11,524
 $4,410
 $15,934
Transfers of loans906
 2,920
 3,826
Impairments(1,021) (524) (1,545)
Dispositions(5,220) (1,907) (7,127)
Other(2) (46) (48)
Balance at December 31, 2018$6,187
 $4,853
 $11,040

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 7 – Other Real Estate Owned (continued)

Components of the line item “Other real estate owned” in the Consolidated Statements of Income were as follows, as of the dates presented:
 December 31,
 202120202019
Repairs and maintenance$79 $279 $326 
Property taxes and insurance69 364 343 
Impairments306 2,160 1,265 
Net (gains) losses on OREO sales(176)(23)94 
Rental income(25)(26)(15)
Total$253 $2,754 $2,013 
 December 31,
 2018 2017 2016
Repairs and maintenance$425
 $728
 $962
Property taxes and insurance385
 423
 1,374
Impairments1,545
 1,893
 3,018
Net (gains) losses on OREO sales(423) (405) 590
Rental income(40) (169) (248)
Total$1,892
 $2,470
 $5,696


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements


Note 98 – Goodwill and Other Intangible Assets
(In Thousands)
Changes in the carrying amount of goodwill during the years ended December 31, 2018 and 20172021 were as follows:
 Community BanksInsuranceTotal
Balance at December 31, 2019$936,916 $2,767 $939,683 
Additions to goodwill and other adjustments— — — 
Balance at December 31, 2020$936,916 $2,767 $939,683 
Additions to goodwill and other adjustments— — — 
Balance at December 31, 2021$936,916 $2,767 $939,683 
 Community Banks Insurance Total
Balance at December 31, 2016$467,767
 $2,767
 $470,534
Addition to goodwill from Metropolitan acquisition140,512
 
 140,512
Balance at December 31, 2017$608,279
 $2,767
 $611,046
Addition to goodwill from Brand acquisition321,882
 
 321,882
Balance at December 31, 2018$930,161
 $2,767
 $932,928
The additions to goodwill in 2018 from the Brand acquisition and in 2017 from the Metropolitan acquisition represent the excess of the purchase price over the fair value of assets acquired and liabilities assumed in the relevant transaction. The Company is in the process of completing Brand's final tax return and finalizing the fair values of loans and property and equipment related to the Brand acquisition; as a result, the recorded balance of goodwill attributable to the Brand acquisition is subject to change in future periods.
The following table provides a summary of finite-lived intangible assets as of the dates presented:
 
Gross  Carrying
Amount
 
Accumulated
Amortization
 
Net Carrying
Amount
December 31, 2018     
Core deposit intangible$82,492
 $(38,634) $43,858
Customer relationship intangible1,970
 (963) 1,007
Total finite-lived intangible assets$84,462
 $(39,597) $44,865
December 31, 2017     
Core deposit intangible$54,958
 $(31,586) $23,372
Customer relationship intangible1,970
 (832) 1,138
Total finite-lived intangible assets$56,928
 $(32,418) $24,510
Gross  Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
December 31, 2021
Core deposit intangible$82,492 $(59,399)$23,093 
Customer relationship intangible2,470 (1,465)1,005 
Total finite-lived intangible assets$84,962 $(60,864)$24,098 
December 31, 2020
Core deposit intangible$82,492 $(53,539)$28,953 
Customer relationship intangible2,470 (1,284)1,186 
Total finite-lived intangible assets$84,962 $(54,823)$30,139 
Core deposit intangible amortization expense for the years ended December 31, 2018, 20172021, 2020 and 20162019 was $7,048, $6,399$5,861, $6,940 and $6,616,$7,965, respectively. Customer relationship intangible amortization expense for the yearsyear ended December 31, 2018, 20172021, 2020 and 20162019 was $131 each year. $181, $181 and $140, respectively.
113


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 8 – Goodwill and Other Intangible Assets (continued)
The estimated amortization expense of finite-lived intangible assets for the five succeeding fiscal years is summarized as follows:
Core Deposit IntangibleCustomer Relationship IntangibleTotal
2022$4,940 $181 $5,121 
20234,042 181 4,223 
20243,498 181 3,679 
20253,102 181 3,283 
20262,899 138 3,037 

 Core Deposit Intangibles Customer Relationship Intangible Total
2019$7,965
 $131
 $8,096
20206,939
 131
 7,070
20215,860
 131
 5,991
20224,940
 131
 5,071
20234,044
 131
 4,175

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements

Note 109 – Mortgage Servicing Rights
(In Thousands)
Changes in the Company’s mortgage servicing rights (“MSRs”) were as follows, for the periods presented:
Carrying Value at January 1, 2020$53,208 
Capitalization41,235 
Amortization(19,723)
Valuation adjustment(11,726)
Carrying Value at December 31, 2020$62,994 
Capitalization33,948 
Amortization(21,485)
Valuation adjustment13,561 
Carrying Value at December 31, 2021$89,018 
Carrying Value at January 1, 2017$26,302
Capitalization16,973
Amortization(3,936)
Carrying Value at December 31, 2017$39,339
Capitalization13,905
Amortization(5,014)
Carrying Value at December 31, 2018$48,230
During 2016, the Company recognized an impairment loss on MSRs in earningsThe valuation adjustments reflected in the amount of $40, which wastable above are included in “Mortgage banking income” in the Consolidated Statements of Income. There were no impairment losses recognized during 2018 or 2017.The movement of mortgage interest rates has an inverse relationship with prepayment speeds and discount rates.
Data and key economic assumptions related to the Company’s mortgage servicing rights as of December 31 are as follows:
2018 2017 2016202120202019
Unpaid principal balance$4,635,712
 $4,012,519
 $2,763,344
Unpaid principal balance$8,728,629 $7,322,671 $4,871,155 
Weighted-average prepayment speed (CPR)7.95% 8.04% 7.34%Weighted-average prepayment speed (CPR)10.56 %15.05 %11.48 %
Estimated impact of a 10% increase$(1,264) $(1,592) $(1,034)Estimated impact of a 10% increase$(3,875)$(4,001)$(2,469)
Estimated impact of a 20% increase(2,569) (3,095) (2,010)Estimated impact of a 20% increase(7,464)(7,674)(4,774)
     
Discount rate9.45% 9.69% 9.64%Discount rate9.82 %9.86 %9.69 %
Estimated impact of a 100bp increase$(2,657) $(2,027) $(1,368)Estimated impact of a 100bp increase$(4,153)$(2,144)$(2,027)
Estimated impact of a 200bp increase(5,103) (3,896) (2,629)Estimated impact of a 200bp increase(8,119)(4,144)(3,908)
     
Weighted-average coupon interest rate4.04% 3.89% 3.83%Weighted-average coupon interest rate3.29 %3.58 %4.04 %
Weighted-average servicing fee (basis points)27.47
 26.36
 25.87
Weighted-average servicing fee (basis points)30.3729.9429.20
Weighted-average remaining maturity (in years)8.03
 7.98
 11.11
Weighted-average remaining maturity (in years)6.695.146.35
The Company recorded servicing fees of $8,876, $5,735$17,968, $12,628 and $3,212, respectively,$9,491, for the twelve months ended December 31, 2018, 20172021, 2020 and 2016,2019, respectively. These fees are included under the line item “Mortgage banking income” in the Consolidated Statements of Income.
114


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1110 – Deposits
(In Thousands)
The following is a summary of deposits as of December 31:
20212020
Noninterest-bearing deposits$4,718,124 $3,685,048 
Interest-bearing demand deposits6,695,879 5,830,288 
Savings deposits1,080,338 847,857 
Time deposits1,411,383 1,695,888 
Total deposits$13,905,724 $12,059,081 
 2018 2017
Noninterest-bearing deposits$2,318,706
 $1,840,424
Interest-bearing demand deposits4,822,382
 3,702,019
Savings deposits624,685
 571,948
Time deposits2,362,784
 1,806,684
Total deposits$10,128,557
 $7,921,075

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 11 – Deposits (continued)


The approximate scheduled maturities of time deposits at December 31, 20182021 are as follows:
2019$1,389,489
2020562,971
2021314,346
202272,034
202321,663
Thereafter2,281
Total$2,362,784
2022$1,089,198 
2023180,675 
202491,617 
202529,300 
202619,421 
Thereafter1,172 
Total$1,411,383 
The aggregate amount of time deposits in denominations of $250 or more at December 31, 20182021 and 20172020 was $549,351$326,076 and $382,630,$426,762, respectively. Certain executive officers and directors and their respective affiliates had amounts on deposit with Renasant Bank of approximately $44,327$27,908 and $43,777$25,302 at December 31, 20182021 and 2017,2020, respectively.

Note 1211 – Short-Term Borrowings
(In Thousands)
Short-term borrowings as of December 31 are summarized as follows: 
2018 201720212020
Securities sold under agreements to repurchase$7,706
 $6,814
Securities sold under agreements to repurchase$13,947 $10,947 
Federal Home Loan Bank short-term advances380,000
 83,000
Federal funds purchasedFederal funds purchased— 10,393 
Total short-term borrowings$387,706
 $89,814
Total short-term borrowings$13,947 $21,340 
Securities sold under agreements to repurchase (“repurchase agreements”) represent funds received from customers, generally on an overnight or continuous basis, which are collateralized by investment securities owned or, at times, borrowed and re-hypothecated by the Company. The securities used as collateral consist primarily of U.S. Government agency mortgage-backedmortgage backed securities, U.S. Government agency collateralized mortgage obligations, obligations of U.S. Government agencies, and obligations of states and political subdivisions. All securities are maintained by the Company’s safekeeping agents. These securities are reviewed by the Company on a daily basis, and the Company may be required to provide additional collateral due to changes in the fair market value of these securities. The terms of the Company’s repurchase agreements are continuous but may be canceled at any time by the Company or the customer.
Federal Home Loanfunds are short term borrowings, generally overnight borrowings, between financial institutions that are generally used to maintain reserve requirements at the Federal Reserve Bank or elsewhere.
FHLB short-term advances, of which there were none at December 31, 2021 and 2020, are borrowings with original maturities of less than one year. In connection with the prepayment of $430,000 in short-term advances from the FHLB during 2020, the Company incurred penalty charges of $121 which is included in the line item “Debt prepayment penalty” in the Consolidated Statements of Income. The Company did not prepay any outstanding short-term advances from the FHLB in 2021 and 2019.
115


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 11 – Short-Term Borrowings (continued)

The average balances and cost of funds of short-term borrowings for the years ending December 31 are summarized as follows:
 Average Balances Cost of Funds
 2018 2017 2016 2018 2017 2016
Federal Home Loan Bank short-term advances$147,749
 $208,332
 $344,724
 2.21% 1.27% 0.46%
Securities sold under agreements to repurchase7,986
 9,215
 12,205
 0.17
 0.17
 0.20
Total short-term borrowings$155,735
 $217,547
 $356,929
 2.10% 1.22% 0.45%
 Average BalancesCost of Funds
 202120202019202120202019
Federal Home Loan Bank short-term advances$— $345,601 $114,965 — %1.09 %2.59 %
Federal funds purchased747 363 — 0.33 — — 
Securities sold under agreements to repurchase12,662 10,889 8,479 0.29 0.30 0.15 
Total short-term borrowings$13,409 $356,853 $123,444 0.29 %1.07 %2.43 %
The Company maintains lines of credit with correspondent banks totaling $150,000$180,000 at December 31, 2018.2021. Interest is charged at the market federal funds rate on all advances. There were no amounts outstanding under these lines of credit at December 31, 20182021 or 2017.

2020.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements

Note 1312 – Long-Term Debt
(In Thousands)
Long-term debt as of December 31, 20182021 and 20172020 is summarized as follows:
 2018 2017
Federal Home Loan Bank advances$6,690
 $7,493
Other long-term debt53
 98
Junior subordinated debentures109,636
 85,881
Subordinated notes147,239
 114,074
Total long-term debt$263,618
 $207,546
20212020
Federal Home Loan Bank advances$417 $152,167 
Junior subordinated debentures111,373 110,794 
Subordinated notes359,419 212,009 
Total long-term debt$471,209 $474,970 
Federal Home Loan Bank advancesAdvances
Long-term advances from the FHLB outstanding at December 31, 2018 had maturities ranging from 2019 to 20302021 mature in 2022 with a combinationfixed rate of fixed and floating rates ranging from 1.09% to 5.28%1.86%. Weighted-average interest rates on outstanding advances at December 31, 20182021 and 20172020 were 3.28%1.86% and 3.33%0.05%, respectively. These advances are collateralized by a blanket lien on the Company’sBank’s loans. The Company had availability on unused lines of credit with the FHLB of $3,301,543$4,214,274 at December 31, 2018.2021.
In connection with the prepayment of $42,369$150,000 and $2,094 in long-term advances from the FHLB during 2016,2021 and 2019, respectively, the Company incurred penalty charges of $2,539,$6,123 and $54, respectively, which is included underin the line item “Extinguishment of debt”“Debt prepayment penalty” in the Consolidated Statements of Income. The Company did not prepay any outstanding long-term advances from the FHLB during 2018 or 2017.2020.
Junior subordinated debenturesSubordinated Debentures
The Company owns the outstanding common securities of business trusts that issued corporation-obligated mandatorily redeemable preferred capital securities to third-party investors. The trusts used the proceeds from the issuance of their preferred capital securities and common securities (collectively referred to as “capital securities”) to buy floating rate junior subordinated debentures issued by the Company (or by companies that the Company subsequently acquired). The debentures are the trusts’ only assets and interest payments from the debentures finance the distributions paid on the capital securities. Distributions on the capital securities are payable quarterly at a rate per annum equal to the interest rate being earned by the trusts on the debentures held by the trusts.trusts which interest rate reprices quarterly. The capital securities are subject to mandatory redemption, in whole or in part, upon repayment of the debentures. All of the debentures are currently redeemable at par. The Company has entered into an agreement which fully and unconditionally guarantees the capital securities of each trust subject to the terms of the guarantee.
116


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 12 – Long-Term Debt (continued)

The following table provides details on the debentures as of December 31, 2018:
 
Principal
Amount
 Interest Rate 
Year of
Maturity
 
Amount
Included in
Tier 1 Capital
PHC Statutory Trust I$20,619
 5.64% 2033 $20,000
PHC Statutory Trust II31,959
 4.66
 2035 31,000
Capital Bancorp Capital Trust I12,372
 4.30
 2035 12,000
First M&F Statutory Trust I30,928
 4.12
 2036 20,550
Brand Group Holdings Statutory Trust I10,310
 4.85
 2035 9,056
Brand Group Holdings Statutory Trust II5,155
 5.79
 2037 5,061
Brand Group Holdings Statutory Trust III5,155
 5.79
 2038 5,061
Brand Group Holdings Statutory Trust IV3,093
 6.54
 2038 3,317
2021:
Principal
Amount
Interest RateYear of
Maturity
Amount
Included in
Tier 1 Capital
PHC Statutory Trust I$20,619 3.07 %2033$20,000 
PHC Statutory Trust II31,959 2.07 203531,000 
Capital Bancorp Capital Trust I12,372 1.72 203512,000 
First M&F Statutory Trust I30,928 1.53 203622,194 
Brand Group Holdings Statutory Trust I10,310 2.27 20359,216 
Brand Group Holdings Statutory Trust II5,155 3.20 20375,051 
Brand Group Holdings Statutory Trust III5,155 3.20 20385,051 
Brand Group Holdings Statutory Trust IV3,093 3.95 20383,270 
During 2003, the Company formed PHC Statutory Trust I to provide funds for the cash portion of the Renasant Bancshares, Inc. acquisition. The interest rate for PHC Statutory Trust I reprices quarterly equal to the three-month LIBOR at the determination date plus 285 basis points. In April 2012, the Company entered into an interest rate swap agreement effective March 17, 2014,

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 13 – Long-Term Debt (continued)


pursuant to which the Company receives a variable rate of interest based on the three-month LIBOR plus a spread of 2.85% and pays a fixed rate of interest of 5.49%. The debentures owned by PHC Statutory Trust I are currently redeemable at par.
During 2005, the Company formed PHC Statutory Trust II to provide funds for the cash portion of the Heritage Financial Holding Corporation (“HFHC”) acquisition. The interest rate for PHC Statutory Trust II reprices quarterly equal to the three-month LIBOR at the determination date plus 187 basis points. The debentures owned by PHC Statutory Trust II are currently redeemable at par.
In connection with the acquisition of HFHC, the Company assumed the debentures issued by Heritage Financial Statutory Trust I. On February 22, 2017, the Company redeemed these debentures. The debentures were redeemed for an aggregate amount of $10,515, which included the principal amount of $10,310 and a prepayment penalty of $205.
In connection with the acquisition of Capital Bancorp, Inc. (“Capital”) in 2007, the Company assumed the debentures issued to Capital Bancorp Capital Trust I. The discount associated with the Company’s assumption of the debentures issued to Capital Bancorp Capital Trust I was fully amortized during 2010. The interest rate for Capital Bancorp Capital Trust I reprices quarterly equal to the three-month LIBOR plus 150 basis points. In March 2012, the Company entered into an interest rate swap agreement effective March 31, 2014, whereby the Company receives a variable rate of interest based on the three-month LIBOR plus a spread of 1.50% and pays a fixed rate of interest of 4.42%. The debentures owned by Capital Bancorp Capital Trust I are currently redeemable at par.
In connection with the acquisition of First M&F Corporation (“First M&F”) in 2013, the Company assumed the debentures issued to First M&F Statutory Trust I. The discount associated with the Company’s assumption of the debentures issued to First M&F Statutory Trust I had a carrying value of $9,450$7,806 at December 31, 20182021 and $9,997$8,354 at December 31, 2017.2020. The discount is being amortized through March 2036. The interest rate for First M&F Statutory Trust I reprices quarterly equal to the three-month LIBOR plus a spread of 133 basis points. The swap agreement related to these debentures assumed from First M&F matured in March 2018. In April 2018, the Company entered into an interest rate swap agreement effective June 15, 2018, which calls forwhereby the Company to paypays a fixed rate of 4.180% and receivereceives a variable rate of three-month LIBOR plus a spread of 133 basis points on a quarterly basis and will mature in June 2028. The debentures owned by First M&F Statutory Trust I are currently redeemable at par.
In connection with the acquisition of Brand Group Holdings, Inc. ("Brand") in 2018, the Company assumed the debentures issued to Brand Group Holdings Statutory Trust I, Brand Group Holdings Statutory Trust II, Brand Group Holdings Statutory Trust III and Brand Group Holdings Statutory Trust IV. The discount associated with the Company’s assumption of the debentures issued to the respective Brand trusts had a carrying value of $412 at December 31, 2021 and $443 at December 31, 2020 and is being amortized through September 2038. The interest rate for the each trust acquired from Brand reprices quarterly equal to the three-month LIBOR at the determination date plus 205 basis points for Brand Group Holdings Statutory Trust I, plus 300 basis points for Brand Group Holdings Statutory Trust II and III, and plus 375 basis points for Brand Group Holdings Statutory Trust IV. The debentures owned by the respective trusts listed above are all currently redeemable at par. The net discount associated with the Company’s assumption of the debentures issued to the respective Brand trusts had a carrying value of $505 at December 31, 2018 and is being amortized through September 2038.
The Company has classified $106,045$107,782 of the debentures described in the above paragraphs as Tier 1 capital. The Federal Reserve Board issued guidance in March 2005 providing more strict quantitative limits onguidelines limit the amount of securities that, similar to theour junior subordinated debentures, issued or assumed by the Company, that are includable in Tier 1 capital. The new guidance, which became effective in March 2009,capital, but these guidelines did not impact the amount of debentures the Company includeswe include in Tier 1 capital. Furthermore,Although the provisionsCompany’s existing junior subordinated debentures are currently unaffected by these Federal Reserve guidelines, on account of changes enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, have no effect onany new trust preferred securities are not includable in Tier 1 capital. Further, if as a result of an acquisition of a financial institution the Company exceeds $15,000,000 in assets, or if the Company makes any such acquisition after exceeding $15,000,000 in assets, the Company will lose Tier 1 treatment of these debentures as Tier 1 capital while the Company remains below $15,000,000 in assets.our junior subordinated debentures.
For more information about the Company’s derivative financial instruments, see Note 15,14, “Derivative Instruments.”
117


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 12 – Long-Term Debt (continued)

Subordinated notes
On August 22, 2016, the Company issued and sold in an underwritten public offering $60,000 aggregate principal amount of its 5.00% Fixed-to-Floating Rate Subordinated Notes due 2026 (the “2026 Notes”) and $40,000 aggregate principal amount of its 5.50% Fixed-to-Floating Rate Subordinated Notes due 2031 (the “2031“5.50% 2031 Notes”), at a public offering price equal to 100% of the aggregate principal amounts of the Notes. As part of the Metropolitan acquisition in 2017,notes. On September 3, 2020, the Company assumed $15,000issued and sold in an underwritten public offering $100,000 aggregate principal amount of 6.50%its 4.50% Fixed-to-Floating Rate Subordinated Notes due 20262035 (the “Metropolitan“2035 Notes”). As part, at a public offering price equal to 100% of the Brand acquisition in 2018,aggregate principal amounts of the notes. On November 23, 2021, the Company assumed $30,000issued and sold in an underwritten public offering $200,000 in aggregate principal amount of 8.50% Fixedits 3.00% Fixed-to-Floating Rate Subordinated Notes due 20242031 (the “Brand“3.00% 2031 Notes”;), at a public offering price equal to 100% of the aggregate principal amounts of the notes. The 2026 Notes, the 5.50% 2031 Notes, the 2035 Notes and the Metropolitan3.00% 2031 Notes are referred to collectively as the “Notes”).

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 13 – Long-Term Debt (continued)


The Brand Notes, Metropolitan Notes, 2026 Notes, 5.50% 2031 Notes, 2035 Notes and 3.00% 2031 Notes mature on June 27, 2024, JulySeptember 1, 2026, September 1, 20262031, September 15, 2035, and on SeptemberDecember 1, 2031, respectively. The Company pays interest on the Brand Notes quarterly in arrears on each March 31, June 30, September 30 and December 31 at a fixed annual interest rate equal to 8.50%. Until but excluding July 1, 2021, the Company pays interest on the Metropolitan Notes semi-annually in arrears on each January 1 and July 1 at a fixed annual interest rate equal to 6.50%. From and including July 1, 2021 to but excluding the maturity date or the date of earlier redemption, the interest rate on the Metropolitan Notes will reset quarterly to an annual interest rate equal to the then-current three-month LIBOR rate plus a spread of 554.5 basis points, payable quarterly in arrears on each January 1, April 1, July 1 and October 1. Until but excluding September 1, 2021 and 2026, respectively, the Company payspaid interest onas to the 2026 Notes, and 2031pays interest as to the 5.50% Notes, semi-annually in arrears on each March 1 and September 1 at a fixed annual interest rate equal to 5.00% and 5.50%, respectively. From and including September 1, 2021 and 2026, respectively, to but excluding the maturity date or the date of earlier redemption, the interest rate on the 2026 Notes and the 5.50% 2031 Notes will reset quarterly to an annual interest rate equal to the then-current three-month LIBOR rate plus a spread of 384 basis points and 407.1 basis points, respectively, payable quarterly in arrears on each March 1, June 1, September 1 and December 1. Until but excluding September 15, 2030, the Company pays interest on the 2035 Notes semi-annually in arrears on each March 15 and September 15 at a fixed annual interest rate equal to 4.50%. From and including September 15, 2030, to but excluding the maturity date or the date of earlier redemption, the interest rate on the 2035 Notes will reset quarterly to an annual interest rate equal to the then-current three-month Secured Overnight Finance Rate ("SOFR") plus a spread of 402.5 basis points, payable quarterly in arrears on each March 15, June 15, September 15 and December 15. Until but excluding December 1, 2026, the Company pays interest on the 3.00% 2031 Notes semi-annually in arrears on each June 1 and December 1 at a fixed annual interest rate equal to 3.00%. From and including December 1, 2026, to but excluding the maturity date or the date of earlier redemption, the interest rate on the 3.00% 2031 Notes will reset quarterly to an annual interest rate equal to the then-current benchmark rate (expected to be three-month SOFR plus a spread of 191 basis points, payable quarterly in arrears on each March 1, June 1, September 1, and December 1. Notwithstanding the foregoing, for all of the Notes, in the event that three-month LIBOR or three-month SOFR is less than zero, three-month LIBOR or three-month SOFR, as applicable, shall be deemed to be zero. Beginning with the interest payment date of June 30, 2019, as to the Brand Notes, July 1, 2021, as to the Metropolitan Notes, September 1, 2021 as to the 2026 Notes, and September 1, 2026 as to the 5.50% 2031 Notes, September 15, 2030 as to the 2035 Notes, and December 1, 2026 as to the 3.00% 2031 Notes, and on any interest payment date thereafter, the Company may redeem the applicable Notes in whole or in part at a redemption price equal to 100% of the principal amount of the respective Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption.
The Company may also redeem any series of the Notes at any time, at the Company’s option, in whole or in part, if: (i) a change or prospective change in law occurs that could prevent the Company from deducting interest payable on the Notes for U.S. federal income tax purposes; (ii) a subsequent event occurs that could preclude the Notes from being recognized as Tier 2 capital for regulatory capital purposes; or (iii) the Company is required to register as an investment company under the Investment Company Act of 1940, as amended. In each case, the redemption price is 100% of the principal amount of the Notes being redeemed plus any accrued and unpaid interest to but excluding the redemption date. There is no sinking fund for the benefit of the Notes, and none of the Notes are convertible or exchangeable.
During October 2021, the Company redeemed, at par, the $15,000 6.50% Fixed-to-Floating Rate Subordinated Notes acquired as part of the Metropolitan BancGroup, Inc. acquisition in 2017 and in December 2021 the Company redeemed, at par, $30,000 of the 2026 Notes. During 2019, the Company redeemed the $30,000 of 8.50% Fixed Rate Subordinated Notes assumed in the Brand acquisition and incurred a debt prepayment penalty of $900, which was accounted for in the purchase accounting fair value adjustment.

118


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 12 – Long-Term Debt (continued)

The aggregate stated maturities of long-term debt outstanding at December 31, 2018,2021, are summarized as follows:
Federal Home Loan Bank advancesJunior subordinated debenturesSubordinated notesTotal
2022$417 $— $— $417 
2023— — — — 
2024— — — — 
2025— — — — 
2026— — 29,724 29,724 
Thereafter— 111,373 329,695 441,068 
Total$417 $111,373 $359,419 $471,209 

2019$1,811
2020272
2021180
2022516
2023824
Thereafter260,015
Total$263,618

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements

Note 1413 – Employee Benefit and Deferred Compensation Plans
(In Thousands, Except Share Data)
Pension and Post-retirement Medical Plans
The Company sponsors a noncontributory defined benefit pension plan, under which participation and benefit accruals ceased as of December 31, 1996. The Company’s funding policy is to contribute annually to the plan an amount not less than the minimum required contribution, as determined annually by consulting actuaries in accordance with funding standards imposed under the Internal Revenue Code of 1986, as amended. No contributions were made or required in 20182021 or 2017.2020. The Company does not anticipate that a contribution will be required in 2019.2022. The plan’s accumulated benefit obligation and projected benefit obligation are substantially the same since benefit accruals have ceased. The accumulated benefit obligation was $24,945$27,567 and $27,859$28,226 at December 31, 20182021 and 2017,2020, respectively. There is no additional minimum pension liability required to be recognized.
In connection with the acquisition of Heritage Financial Group, Inc., and its affiliates, in 2015, the Company assumed the HeritageBank of the South Defined Benefit Plan. The plan was terminated by HeritageBank of the South immediately prior to the acquisition, and final distribution of all benefits was completed in August 2016.
The Company provides retiree medical benefits, consisting of the opportunity to purchase coverage at subsidized rates under the Company’s group medical plan. Employees eligible to participate must:must (i) have been employed by the Company and enrolled in the Company’s group medical plan as of December 31, 2004;2004 and (ii) retire from the Company between ages 55 and 65 with at least 15 years of service or 70 points (points determined as the sum of the employee’s age and service.)years of service). The Company periodically determines the portion of the premiums to be paid by each retiree and the portion to be paid by the Company. Coverage ceases when a retiree attains age 65 and is eligible for Medicare. The Company also provides life insurance for each retiree who receives retiree medical benefits. The face amount of the coverage is $5; coverage is provided until each retiree attains age 70. Retirees may purchase additional insurance or continue coverage beyond age 70 at their sole expense. The Company contributed $89$231 and $119$214 to the plan in 20182021 and 2017,2020, respectively; the Company expects to contribute approximately $156$176 in 2019.2022.
The Company accounts for its obligations related to retiree benefits in accordance with ASC 715, “CompensationCompensation – Retirement Benefits.Benefits.” The assumed rate of increase in the per capita cost of covered benefits (i.e., the health care cost trend rate) for the next year2021 is 5.6%5%. Increasing or decreasing the assumed health care cost trend rates by one percentage point in each year would not materially increase or decrease the accumulated post-retirement benefit obligation or the service and interest cost components of net periodic post-retirement benefit costs as of December 31, 20182021 and for the year then ended.

In 2020, the Company offered a voluntary early retirement program (referred to as the “VERP”) to eligible employees. Among other items, participants in the VERP received accelerated payouts from the Company’s defined benefit pension plan, retiree medical benefits on terms substantially identical to those applicable to other retirees, and other cash payments. Cash payments are a noninterest expense and are included in the “Restructuring charges” line item on the Consolidated Statements of Income. Amounts attributable to accelerated payouts from the defined benefit pension plan and post-retirement health benefits for participants in the VERP are included in the following tables.
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 14 – Employee Benefit and Deferred Compensation Plans (continued)


InformationThe following table presents information relating to the defined benefit pension plan maintained by the Renasant Bank (“Pension Benefits - Renasant”) and to the post-retirement health and life plan (“Other Benefits”) as of December 31, 20182021 and 2017 is as follows:2020:
119


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 13 – Employee Benefit and Deferred Compensation Plans (continued)

Pension Benefits Renasant Other Benefits Pension Benefits RenasantOther Benefits
2018 2017 2018 2017 2021202020212020
Change in benefit obligation       Change in benefit obligation
Benefit obligation at beginning of year$27,859
 $28,012
 $1,170
 $1,566
Benefit obligation at beginning of year$28,226 $28,020 $1,019 $707 
Service cost
 
 8
 9
Service cost— — 
Interest cost1,043
 1,168
 31
 42
Interest cost682 984 14 13 
Plan participants’ contributions
 
 75
 77
Plan participants’ contributions— — 152 52 
Actuarial (gain) loss(2,016) 582
 (239) (328)
Benefits paid(1,941) (1,903) (164) (196)
Amendments(1)
Amendments(1)
— — — 486 
Actuarial loss (gain)Actuarial loss (gain)672 3,239 (221)21 
Benefits paid(1)
Benefits paid(1)
(2,013)(4,017)(383)(266)
Benefit obligation at end of year$24,945
 $27,859
 $881
 $1,170
Benefit obligation at end of year$27,567 $28,226 $586 $1,019 
Change in fair value of plan assets       Change in fair value of plan assets
Fair value of plan assets at beginning of year$26,913
 $25,241
    Fair value of plan assets at beginning of year$30,549 $28,585 
Actual return on plan assets234
 3,575
    Actual return on plan assets1,863 5,981 
Contribution by employer
 
    Contribution by employer— — 
Benefits paid(1,941) (1,903)    Benefits paid(2,013)(4,017)
Fair value of plan assets at end of year$25,206
 $26,913
    Fair value of plan assets at end of year$30,399 $30,549 
Funded status at end of year$261
 $(946) $(881) $(1,170)Funded status at end of year$2,832 $2,323 $(586)$(1,019)
Weighted-average assumptions as of December 31       Weighted-average assumptions as of December 31
Discount rate used to determine the benefit obligation4.56% 3.96% 4.07% 3.37%Discount rate used to determine the benefit obligation2.79 %2.44 %2.35 %1.77 %
(1) Attributable to retiree medical benefits and $2,073 of accelerated defined benefit pension plan payouts in 2020 provided to VERP participants.
The discount rate assumptions at December 31, 20182021 were determined using a yield curve approach. A yield curve was developed forfrom a selection of high quality fixed-income investments whose cash flows approximate the timing and amount of expected cash flows from the plans. The selected discount rate is the rate that produces the same present value of the plans'plans’ projected benefit payments.


120


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1413 – Employee Benefit and Deferred Compensation Plans (continued)



The components of net periodic benefit cost and other amounts recognized in other comprehensive income for the defined benefit pension and post-retirement health and life plans for the years ended December 31, 2018, 20172021, 2020 and 20162019 are as follows:
 Pension Benefits RenasantOther Benefits
 202120202019202120202019
Service cost$— $— $— $$$
Interest cost682 984 1,176 14 13 31 
Expected return on plan assets(1,768)(1,651)(1,450)— — — 
Prior service cost recognized(1)
— — — — 485 — 
Recognized actuarial loss (gain)265 349 442 (3)(90)(23)
Settlement/curtailment/termination losses(1)
— 567 — — — — 
Net periodic benefit cost(821)249 168 16 414 15 
Net actuarial (gain) loss arising during the period577 (1,090)(31)(221)21 (60)
Net Settlement/curtailment/termination losses(1)
— (567)— — — — 
New prior service cost(1)
— — — — 485 — 
Amortization of net actuarial (loss) gain recognized in net periodic pension cost(265)(349)(442)90 23 
Amortization of prior service cost(1)
— — — — (485)— 
Total recognized in other comprehensive income312 (2,006)(473)(218)111 (37)
Total recognized in net periodic benefit cost and other comprehensive income$(509)$(1,757)$(305)$(202)$525 $(22)
Weighted-average assumptions as of December 31
Discount rate used to determine net periodic pension cost2.44 %3.59 %4.56 %1.77 %2.91 %4.07 %
Expected return on plan assets6.00 %6.00 %6.00 %N/AN/AN/A
(1) Attributable to retiree medical benefits and accelerated defined benefit pension plan payouts provided to VERP participants and, with respect to amounts included in Net periodic benefit cost, included in the “Restructuring charges” line item on the Consolidated Statements of Income.
 Pension Benefits Renasant 
Pension Benefits HeritageBank(1)
 Other Benefits
 2018 2017 2016 2016 2018 2017 2016
Service cost$
 $
 $
 $
 $8
 $9
 $12
Interest cost1,043
 1,168
 1,216
 172
 31
 42
 58
Expected return on plan assets(2,077) (1,941) (1,872) (113) 
 
 
Prior service cost recognized
 
 
 
 
 
 
Recognized actuarial loss328
 401
 404
 
 
 6
 76
Settlement/curtailment/termination losses
 
 
 (780) 
 
 
Net periodic benefit cost(706) (372) (252) (721) 39
 57
 146
Net actuarial (gain) loss arising during the period(173) (1,051) 5
 (397) (240) (328) (56)
Net Settlement/curtailment/termination losses
 
 
 780
 
 
 
Amortization of net actuarial loss recognized in net periodic pension cost(328) (401) (404) 
 
 (6) (76)
Total recognized in other comprehensive income(501) (1,452) (399) (383) (240) (334) (132)
Total recognized in net periodic benefit cost and other comprehensive income$(1,207) $(1,824) $(651) $(338) $(201) $(277) $14
Weighted-average assumptions as of December 31             
Discount rate used to determine net periodic pension cost3.96% 4.35% 4.56% 4.27% 3.37% 3.57% 3.63%
Expected return on plan assets6.00% 8.00% 8.00% 3.00% N/A
 N/A
 N/A
(1)
Because the final distribution of benefits under the HeritageBank of the South Defined Benefit Plan was completed in 2016, there was no impact on the Company’s consolidated financial statements as of and for the years ended December 31, 2018 and 2017.
Future estimated benefit payments under the Renasant defined benefit pension plan and post-retirement health and life planother benefits are as follows:
Pension Benefits RenasantOther
Benefits
2022$2,210 $176 
20232,190 125 
20242,178 67 
20252,142 64 
20262,106 53 
2027 - 20319,690 116 

121
 Pension Benefits Renasant 
Other
Benefits
2019$1,968
 $156
20201,973
 141
20211,988
 126
20221,980
 103
20231,958
 101
2024 - 20289,277
 279



Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1413 – Employee Benefit and Deferred Compensation Plans (continued)



Amounts recognized in accumulated other comprehensive income, before tax, for the year ended December 31, 20182021 are as follows:
Pension Benefits Renasant 
Other
Benefits
Pension Benefits RenasantOther
Benefits
Prior service cost$
 $
Prior service cost$— $— 
Actuarial loss (gain)9,562
 (155)Actuarial loss (gain)7,395 (299)
Total$9,562
 $(155)Total$7,395 $(299)
The estimated costs that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal yearduring 2022 are as follows:
Pension Benefits RenasantOther
Benefits
Prior service cost$— $— 
Actuarial loss (gain)243 (76)
Total$243 $(76)
 Pension Benefits Renasant 
Other
Benefits
Prior service cost$
 $
Actuarial loss (gain)345
 (56)
Total$345
 $(56)
The investment objectiveSubstantially all of the assets of the Company’s defined benefit pension plan has been to achieve above average income and moderate long-term growth, by combining an equity income strategy (allocation of 65% to 75% of assets) and an intermediate fixed income strategy (allocation of 25% to 35% of assets) and investing directly in debt and equity securities. In 2018, the Company’s investment committee modified the plan’s investment strategy in a manner intended to preserve its funded status by focusing on the achievement of portfolio growth and including an interest rate hedging strategy. As a consequence, substantially all of the plan’s assets were liquidated and the proceeds reinvestedare invested in a collective or pooled trust, which in turn invests in other collective or pooled trusts with distinctindividual investment mandates. The collective trust’s asset allocation is approximately 55%77% in growth assets, consisting of interests in trusts invested in equity securities, high yield fixed income securities, and direct real estate investments (approximately 5%6% of assets), and approximately 45% to23% in assets intended to hedge against the volatility arising from interest rate risk, consisting of interests in trusts invested in long duration fixed income securities. The collective trust is actively managed allowing changes in the asset allocationsallocation to enhance returns and mitigate risk. The Company’s Trust Investment Committee, as designated byrisk, with the senior management pensionmandate to preserve the funded status of the plan through portfolio growth and interest rate hedging. Management’s investment committee periodically reviews the collective trust’s performance and asset allocationsallocation to ensure that the plan’s investment objectives are satisfied and that the investment strategy of the trust has not materially changed.
The expected long-term rate of return was estimated using market benchmarks for investment classes applied to the plan’s target asset allocation and was computed using a valuation methodology which projects future returns based on current valuations rather than historical returns. The decrease in the expected return for 2018 (as compared to 2017) is attributable to the change in investment strategy, which resulted in a more conservative asset allocation.
The fair values of the Company’s defined benefit pension plan assets by category at December 31, 20182021 and 20172020 are below. For 2018, investmentsInvestments in collective trusts, which are measured at net asset value per share (or "NAV"“NAV”), consist of trusts that invest primarily in liquid equity and fixed income securities and have a small direct investment in real estate. There is generally no restriction on redemptions or withdrawals for benefit payments or in the event of plan termination; 60 daydays notice is required to redeem or withdraw assets for any other purpose. For 2017, direct investments in corporate stocks consisted primarily of common stocks of both U.S. companies and international companies that are traded in active markets and are valued based on quoted market prices of identical assets (Level 1). The investments in registered investment companies consist primarily of investments in funds that invest in investment grade fixed income securities. These investments are traded in active markets and are valued based on quoted market prices of identical assets (Level 1). Fixed income securities consist of U.S. Government securities, investment grade corporate debt, and foreign and municipal obligations. The fair values of these instruments are based on quoted market prices of similar instruments or a discounted cash flow model (Level 2).
Quoted Prices In
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Measured at NAVTotals
December 31, 2021
Cash and cash equivalents$42 $— $— $— $42 
Investments in collective trusts— — — 30,357 30,357 
$42 $— $— $30,357 $30,399 

122


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Notes to Consolidated Financial Statements
Note 1413 – Employee Benefit and Deferred Compensation Plans (continued)



 
Quoted Prices In
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 Measured at NAV Totals
December 31, 2018         
Cash and cash equivalents$40
 $
 $
 $
 $40
Investments in collective trusts
 
 
 25,166
 25,166
 $40
 $
 $
 $25,166
 $25,206
 
Quoted Prices In
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 Measured at NAV Totals
December 31, 2017         
Cash and cash equivalents$387
 $
 $
 $
 $387
U.S. government securities
 2,496
 
 
 2,496
Corporate debt
 1,908
 
 
 1,908
Corporate stocks20,557
 
 
 
 20,557
Investments in registered investment companies921
 
 
 
 921
Foreign obligations
 644
 
 
 644
 $21,865
 $5,048
 $
 $
 $26,913
Quoted Prices In
Active Markets
for Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Measured at NAVTotals
December 31, 2020
Cash and cash equivalents$779 $— $— $— $779 
Investments in collective trusts— — — 29,770 29,770 
$779 $— $— $29,770 $30,549 
Other Retirement Plans
The Company maintains a 401(k) plan, which is a contributory plan maintained in the form of a “safe harbor” arrangement. Employees are immediately enrolled in the plan and eligible to make pre-tax deferrals, subject to limits imposed under the plan and the deferral limit established annually by the IRS. Each pay period, theIRS, and receive Company matches employee deferrals on a dollar for dollar basis, up tomatching contributions not in excess of 4% of compensation. The Company also makesmay make a nondiscretionarydiscretionary profit-sharing contribution for each eligible participant in an amount equalup to 5% of plan compensation and 5% of plan compensation in excess of the Social Security wage base. In orderbase (prior to participate in2020, the nondiscretionaryprofit-sharing contribution was non-discretionary). To be eligible to receive this profit-sharing contribution, an employee must: (i) be employed on the last day of the year and be credited with 1000 hours of service during the year; (ii) die or become disabled during the year; or (iii) have attained the plan’s early or normal retirement age (as defined in the plan). For 2021, senior executive officers of the Bank are not eligible to receive these discretionary contributions. The Company’s costs related to the 401(k) plan, excluding employee deferrals, in 2018, 20172021, 2020 and 20162019 were $13,477, $11,471$11,919, $17,888 and $10,762,$16,009, respectively.
In connection with the acquisition of Metropolitan BancGroup, Inc. and its affiliates, the Company assumed the Metropolitan BancGroup, Inc. 401(k) Plan. The plan was terminated by Metropolitan BancGroup, Inc. prior to the acquisition, and the distribution of all account balances was completed during 2018. There was no impact on the Company’s consolidated financial statements as of and for the years ended December 31, 2018 or 2017 associated with these plans.
In connection with the acquisition of Brand Group Holdings, Inc. and its affiliates, the Company assumed the Brand Group Holdings, Inc. 401(k) and Employee Stock Ownership Plan. The plan was terminated by Brand Group Holdings, Inc. immediately prior to the acquisition. The final distribution of account balances is expected to occur once a favorable determination as to the plan’s tax-qualified status is issued by the Internal Revenue Service. There was no impact on the Company’s consolidated financial statements as of and for the years ended December 31, 2018 or 2017 associated with the plan.
Deferred Compensation Plans and Arrangements
The Company maintains 2 deferred compensation plans: a Deferred Stock Unit Plan and two deferred compensation plans.a Deferred Income Plan. Nonemployee directors may defer all or a portion of their fees and retainer to the Deferred Stock Unit Plan or the deferred compensation plan maintained for their benefit. Officersretainer; eligible officers may defer base salary and bonus to the Deferred Stock Unit Plan or base salary to the deferred compensation plan maintained for their benefit, subject to limits determined annually by the Company. Amounts deferred to the Deferred Stock Unit Plan are invested in units representing shares of the Company’s common stock; benefits are paid in the form of common stock, with cash distributed in lieu of fractional shares. Amounts crediteddeferred to the deferred compensation plansDeferred Income Plan are notionally invested in the discretion of each participant from among investment alternatives substantially similar to those available under the Company’s

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 14 – Employee Benefit and Deferred Compensation Plans (continued)


401(k) plan. Directors and officers who participated in these deferred compensation plans on or beforethe predecessor to the Deferred Income Plan as of December 31, 2006, may also invest in a preferential interest rate alternative that is derived from the Moody’s Average Corporate Bond Rate. Benefits payable from the deferred compensation plans generallyDeferred Income Plan equal the account balancesbalance of each participant. Beneficiaries of eligible directors and officers may receive a preretirement death benefit in excess of the amounts credited to plan accounts (eligible directors and officers mustwho have continuously deferred at rates prescribed by the Company since January 1, 2005, and who die while employed by the Company).Company or serving as a director may receive an additional preretirement death benefit from the Deferred Income Plan.
In connection with the Brand acquisition, of Metropolitan BancGroup, Inc. and its affiliates, the Company assumed and now maintains the Metropolitan BancGroup,Brand Group Holdings, Inc. Nonqualified Deferred Compensation Plan. Deferral elections in effect as of the time of acquisition were continued through and until December 31, 2017;given effect for compensation earned during 2018; no further deferrals have been or will be made to the plan. Account balances maintained under the plan will be distributed as provided under the terms of the plan and individual participant elections. Pending distribution, balances will be notionally invested by each participant in designated investment alternatives.
In connection with its acquisition of Brand Group Holdings, Inc.The Company’s Deferred Stock Unit and its affiliates, the Company assumed the Brand Group Holdings, Inc. Deferred Compensation Plan. Deferral elections in effect as of the time of acquisition will be given effect for compensation earned during 2018; no further deferrals will be made to the plan. Account balances maintained under the plan will be distributed as provided under the terms of the plan and individual participant elections. Pending distribution, balances will be notionally invested by each participant in designated investment alternatives.
All of the Company’s deferred compensation plans described aboveIncome Plan are unfunded. It is anticipated that thesuch plans will result in no additional cost to the Company because life insurance policies on the lives of participants have been purchased in amounts estimated to be sufficient to pay plan benefits. The Company is both the owner and beneficiary of the policies. The expense recorded in 2018, 20172021, 2020 and 20162019 for the Company’s Deferred Stock Unit and deferred compensation plans,Deferred Income Plan, including in 2019 expense for the plan assumed in connection with the Brand acquisition, inclusive of deferrals, was $1,290, $1,935$3,274, $3,965 and $1,537,$3,610, respectively.
In 2007, the Company assumed supplemental executive retirement plans (SERPs) in connection with the acquisition of Capital Bancorp, Inc. and its affiliates. The plans are designed to provide four4 officers specified annual benefits for a 15-year period upon the attainment of a designated retirement age. Liabilities associated with the SERPs totaled $3,865$3,679 and $3,846$3,816 at December 31, 20182021 and 2017,2020, respectively. The plans are not qualified under Section 401 of the Internal Revenue Code.

123


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 13 – Employee Benefit and Deferred Compensation Plans (continued)

Incentive Compensation Plans
Under the Company’s Performance Based Rewards Plan, annual cash bonuses are paid to eligible officers and employees, subject to the attainment of designated performance criteria that may relate to the Company’s performance, the performance of an affiliate, region, division or profit center, and/or to individual or team performance. The Company annually sets minimum, target, and superior levels of performance. Minimum performance must be attained for the payment of any bonus; superior performance must be attained for maximum payouts. The expense associated with the plan for 2018, 20172021, 2020 and 20162019 was $5,117, $4,490$8,609, $6,425 and $2,307,$4,200, respectively.
TheIn 2020, the Company maintainsimplemented a long-term equity compensation plan that provides for the grant of stock options and stock appreciation rights and the award of restricted stock. The planstock and restricted stock units (which replaced the Company’s previous long-term equity incentive compensation plan, adopted in 2001,under which expired in October 2011. restricted stock awards remain outstanding).
Options granted under the plan permit the acquisition of shares of the Company’s common stock at an exercise price equal to the fair market value of the shares on the date of grant. Options aremay be subject to time-based vesting andor the attainment of performance criteria; all options expire ten years after the date of grant. Options that do not vest or expire unexercised are forfeited and canceled. Stock appreciation rights may be granted under the plan on terms similar to options. There were no stock options or stock appreciation rights granted during the years ended December 31, 2018, 20172021, 2020 or 2016.2019. There was no compensation expense (recognized or unrecognized) associated with options recorded for the years ended December 31, 2018, 20172021, 2020 or 2016.
2019.

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 14 – Employee Benefit and Deferred Compensation Plans (continued)


The following table summarizes information about options outstanding, exercised and forfeited as of and for the three years ended December 31, 2018, 20172021, 2020 and 2016:2019:
SharesWeighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Life
Aggregate
Intrinsic
Value
Outstanding at January 1, 2019Outstanding at January 1, 201943,750 $15.84 
Shares 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life
 
Aggregate
Intrinsic
Value
Outstanding at January 1, 2016621,446
 $17.88
  
Granted
 
  Granted— — 
Exercised(435,177) 18.67
  Exercised(14,500)15.79 
Forfeited(644) 29.67
  Forfeited— — 
Outstanding at December 31, 2016185,625
 $15.97
 3.91 $4,872
Exercisable at December 31, 2016185,625
 $15.97
 3.91 $4,872
Outstanding at December 31, 2019Outstanding at December 31, 201929,250 $15.86 1.94$574 
Exercisable at December 31, 2019Exercisable at December 31, 201929,250 $15.86 1.94$574 
Granted
 
  Granted— — 
Exercised(95,875) 16.25
  Exercised(18,750)16.37 
Forfeited
 
  Forfeited— — 
Outstanding at December 31, 201789,750
 $15.67
 3.14 $2,263
Exercisable at December 31, 201789,750
 $15.67
 3.14 $2,263
Outstanding at December 31, 2020Outstanding at December 31, 202010,500 $14.96 1.00$191 
Exercisable at December 31, 2020Exercisable at December 31, 202010,500 $14.96 1.00$191 
Granted
 
  Granted— — 
Exercised(41,000) 15.54
  Exercised(10,500)14.96 
Forfeited(5,000) 15.32
  Forfeited— — 
Outstanding at December 31, 201843,750
 $15.84
 2.63 $627
Exercisable at December 31, 201843,750
 $15.84
 2.63 $627
Outstanding at December 31, 2021Outstanding at December 31, 2021— $— 0.00$— 
Exercisable at December 31, 2021Exercisable at December 31, 2021— $— 0.00$— 
The total intrinsic value of options exercised during the three years ended December 31, 2018, 20172021, 2020 and 20162019 was $1,180, $2,487$262, $279 and $8,323,$290, respectively. The total grant date fair value of options vested during December 31, 2016 was $78. All options outstanding during 20182021, 2020 and 20172019 were fully vested and exercisable as of December 31, 2016.2017.
The Company also awardsplan permits the award of performance-based restricted stock to executives and other officers and employees and time-based restricted stock to non-employee directors, executives, and other officers and employees. The plan also permits the award of restricted stock units to officers and employees on terms similar to restricted stock awards. Performance-based awards are subject to the attainment of designated performance criteria during a fixed performance cycle. Performance criteria may relate to the Company’s performance or to the performance of an affiliate, region, division or profit center in each case measured on an absolute basis or relative to a defined peer group. Performance criteria may also relate to the performance of an
124


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 13 – Employee Benefit and Deferred Compensation Plans (continued)

affiliate, region, division or profit center of the Company or to individual performance. The Company annually sets minimum, target, and superior levels of performance. Minimumlevels; minimum performance must be attained for the vesting of any shares; superior performance must be attained for maximum payouts. Time-based restricted stock awards relate to a fixed number of shares that vest at the end of a designated service period.
In 2021, the Company made performance-based and time-based restricted stock awards; restricted stock units were not awarded. The fair value of each restricted stock award is the closing price of the Company’s common stock on the business day immediately preceding the date of the award. For restricted stock awarded under the plan, the Company recorded compensation expense of $7,251, $5,293$9,882, $10,419 and $3,117$10,046 for the years ended December 31, 2018, 20172021, 2020 and 2016,2019, respectively. The following table summarizes the changes in restricted stock as of and for the year ended December 31, 2018:2021:
 
Performance-
Based
Restricted
Stock(1)
 
Weighted
Average
Grant-Date
Fair Value
 
Time-
Based
Restricted
Stock
 
Weighted
Average
Grant-Date
Fair Value
Not vested at beginning of year
 $
 218,075
 $39.08
Granted110,652
 40.89
 188,272
 42.93
Vested(66,338) 40.89
 (75,829) 36.98
Cancelled(3,014) 40.89
 (25,563) 40.97
Not vested at end of year41,300
 $40.89
 304,955
 $41.82
(1) In January 2018, the Company awarded an aggregate of 53,883 shares of performance-based restricted stock (at the target level), subject to a one-year performance cycle. An aggregate of 3,014 shares was forfeited and canceled prior to the end of the performance cycle. The Company's financial performance exceeded target levels, increasing the award by an aggregate of 15,469 shares.

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 14 – Employee Benefit and Deferred Compensation Plans (continued)


Performance-
Based
Restricted
Stock
Weighted
Average
Grant-Date
Fair Value
Time-
Based
Restricted
Stock
Weighted
Average
Grant-Date
Fair Value
Not vested at beginning of year132,827 $32.88 548,416 $34.15 
Awarded78,230 34.02 253,733 37.22 
Vested(64,496)30.18 (139,752)36.89 
Forfeited and cancelled— — (58,683)37.50 
Not vested at end of year146,561 $34.67 603,714 $34.48 
Unrecognized stock-based compensation expense related to restricted stock totaled $7,909$10,584 at December 31, 2018.2021. As of such date, the weighted average period over which the unrecognized expense is expected to be recognized was approximately 1.451.77 years. There was no unrecognized stock-based compensation expense related to stock options at December 31, 2018.
At December 31, 2018,2021, an aggregate of 2,043,4022,828,818 shares of Company common stock were reservedavailable for issuance under the Company’s employee benefit plans.plans of which 977,956 shares were available for issuance under the Company’s 401(k) plan, 159,111 shares were available under the Company’s Deferred Stock Unit Plan, and 1,447,883 shares were available under the Company’s 2020 Long-Term Incentive Compensation Plan.

Note 1514 – Derivative Instruments
(In Thousands)
The Company utilizesuses certain derivative financial instruments including interest rate contracts suchto meet the needs of customers as swaps, caps and/or floors,well as part of its ongoing efforts to mitigate itsmanage the interest rate risk exposure and to facilitate the needs of its customers. associated with certain transactions.
Non-hedge derivatives
The Company enters into derivative instruments that are not designated as hedging instruments to help its commercial customers manage their exposure to interest rate fluctuations. To mitigate the interest rate risk associated with these customer contracts, the Company enters into an offsetting derivative contract position. The Company manages its credit risk, or potential risk of default by its commercial customers, through credit limit approval and monitoring procedures. At December 31, 2018, the Company had notional amounts of $196,049 on interest rate contracts with corporate customers and $196,049 in offsetting interest rate contracts with other financial institutions to mitigate the Company’s rate exposure on its corporate customers’ contracts.
In June 2014, the Company entered into two forward interest rate swap contracts on floating rate liabilities at the Bank level with notional amounts of $15,000 each. The interest rate swap contracts are accounted for as cash flow hedges with the objective of protecting against any interest rate volatility on future FHLB borrowings for a four-year and five-year period beginning June 1, 2018 and December 3, 2018 and ending June 2022 and June 2023, respectively. Under these contracts, Renasant Bank will pay a fixed interest rate of interest, and will receive a variable interest rate based on the three-month LIBOR plus a pre-determined spread, with quarterly net settlements.
In March and April 2012, the Company entered into two interest rate swap agreements effective March 30, 2014 and March 17, 2014, respectively. Under these swap agreements, the Company receives a variable rate of interest based on the three-month LIBOR plus a pre-determined spread and pays a fixed rate of interest. The agreements, which both terminate in March 2022, are accounted for as cash flow hedges to reduce the variability in cash flows resulting from changes in interest rates on $32,000 of the Company’s junior subordinated debentures.
In April 2018, the Company entered into an interest rate swap agreement effective June 15, 2018. Under this swap agreement, the Company receives a variable rate of interest based on the three-month LIBOR plus a pre-determined spread and pays a fixed rate of interest. The agreement, which terminates in June 2028, is accounted for as a cash flow hedge to reduce the variability in cash flows resulting from changes in interest rates on $30,000 of the Company’s junior subordinated debentures.

The Company enters into interest rate lock commitments with its customers to mitigate the interest rate risk associated with the commitments to fund fixed-rate residential mortgage loans. The notional amount of commitments to fund fixed-rate mortgage loans was $159,464 and $131,000 at December 31, 2018 and 2017, respectively. The Company also enters into forward commitments to sell residential mortgage loans to secondary market investors.
The notional amountfollowing table provides a summary of commitments to sell residential mortgage loans to secondary market investors was $281,343 and $199,000 at December 31, 2018 and 2017, respectively.the Company’s derivatives not designated as hedging instruments as of the dates presented:

125


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1514 – Derivative Instruments (continued)



The following table provides details on the Company’s derivative financial instruments as of the dates presented:
  Fair Value
Balance SheetDecember 31, Balance SheetDecember 31, 2021December 31, 2020
Location2018 2017 LocationNotional AmountFair ValueNotional AmountFair Value
Derivative assets:    Derivative assets:
Not designated as hedging instruments:    
Interest rate contractsOther Assets $2,779
 $3,171
Interest rate contractsOther Assets$185,447 $4,711 $222,933 $9,884 
Interest rate lock commitmentsOther Assets 3,740
 2,756
Interest rate lock commitmentsOther Assets310,941 5,304 589,701 19,824 
Forward commitmentsOther Assets 
 50
Forward commitmentsOther Assets280,000 667 — — 
Totals $6,519
 $5,977
Totals$776,388 $10,682 $812,634 $29,708 
Derivative liabilities:    Derivative liabilities:
Designated as hedging instruments:    
Interest rate swapOther Liabilities $2,046
 $2,536
Totals $2,046
 $2,536
Not designated as hedging instruments:    
Interest rate contractsOther Liabilities $2,779
 $3,171
Interest rate contractsOther Liabilities$185,447 $4,711 $222,933 $9,884 
Interest rate lock commitmentsOther Liabilities 
 4
Interest rate lock commitmentsOther Liabilities19,961 43 — — 
Forward commitmentsOther Liabilities 3,563
 328
Forward commitmentsOther Liabilities320,000 736 716,000 5,090 
Totals $6,342
 $3,503
Totals$525,408 $5,490 $938,933 $14,974 
Gains (losses) included in the Consolidated Statements of Income related to the Company’s derivative financial instruments were as follows, as of the dates presented:
Year Ended December 31,
 202120202019
Interest rate contracts:
Included in interest income on loans$2,027 $2,051 $3,672 
Interest rate lock commitments:
Included in mortgage banking income(14,563)15,249 882 
Forward commitments
Included in mortgage banking income5,021 (4,033)2,506 
Total$(7,515)$13,267 $7,060 
 Year Ended December 31,
 2018 2017 2016
Derivatives not designated as hedging instruments:     
Interest rate contracts:     
Included in interest income on loans$4,137
 $3,981
 $2,402
Interest rate lock commitments:     
Included in mortgage banking income779
 356
 (2,111)
Forward commitments     
Included in mortgage banking income(3,069) (4,489) 4,275
Total$1,847
 $(152) $4,566
Derivatives designated as cash flow hedges
ForCash flow hedge relationships mitigate exposure to the variability of future cash flow or other forecasted transactions. The Company uses interest rate swap contracts in an effort to manage future interest rate exposure on borrowings. The hedging strategy converts the LIBOR-based variable interest rate on the forecasted borrowings to a fixed interest rate. As of December 31, 2021, the Company is hedging its exposure to the variability of future cash flows through 2030 and a portion of these hedges are forward starting.
The following table provides a summary of the Company’s derivatives designated as cash flow hedges changes in fair valueas of the cash flow hedges are, to the extent that the hedging relationship is effective, recorded as other comprehensive income and are subsequently recognized in earnings at the same time that the hedged item is recognized in earnings. The ineffective portions of the changes in fair value of the hedging instruments are immediately recognized in earnings. The assessment of the effectiveness of the hedging relationship is evaluated under the hypothetical derivative method. There were no ineffective portions for the years ended December 31, 2018, 2017 and 2016. dates presented:
 Balance SheetDecember 31, 2021December 31, 2020
 LocationNotional AmountFair ValueNotional AmountFair Value
Derivative assets:
  Interest rate swapsOther Assets$100,000 $7,016 $175,000 $3,866 
Derivative liabilities:
  Interest rate swapsOther Liabilities$62,000 $2,902 $87,000 $5,924 
The impact on other comprehensive income for the years ended December 31, 2018, 2017,2021, 2020, and 2016,2019, can be seen at Note 19,17, “Other Comprehensive Income.”
In October 2021, the Company terminated 4 interest rate swap contracts with notional amounts of $25,000 each. These swaps hedged forecasted future FHLB borrowings which were no longer expected to occur. As a result of the termination the Company recognized a gain of $4,676 for the year ended December 31, 2021.
126


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 14 – Derivative Instruments (continued)

In December 2020, the Company terminated 2 interest rate swap contracts with notional amounts of $15,000 each with ending dates of June 2022 and June 2023, respectively. The Company recorded $2,040 in swap termination charges for the year ended December 31, 2020.
Derivatives designated as fair value hedges
Fair value hedges protect against changes in the fair value of an asset, liability, or firm commitment. The Company enters into interest rate swap agreements to manage interest rate exposure on certain of the Company’s fixed-rate subordinated notes. The agreements convert the fixed interest rates to LIBOR-based variable interest rates.
The following table provides a summary of the Company's derivatives designated as fair value hedges as of the dates presented:
 Balance SheetDecember 31, 2021December 31, 2020
 LocationNotional AmountFair ValueNotional AmountFair Value
Derivative liabilities:
  Interest rate swapsOther Liabilities$100,000 $5,411 $100,000 $209 
The following table presents the effects of the Company’s fair value hedge relationships on the Consolidated Statements of Income for the periods presented:
 Amount of Gain (Loss Recognized in Income)
Income StatementYear ended December 31,
 Location202120202019
Derivative liabilities:
  Interest rate swaps - subordinated notesInterest Expense$(5,202)$(209)$— 
Derivative liabilities - hedged items:
  Interest rate swaps - subordinated notesInterest Expense$5,202 $209 $— 
The following table presents the amounts that were recorded in the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges as of the dates presented:
Carrying Amount of the Hedged LiabilityCumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Liability
Balance Sheet LocationDecember 31, 2021December 31, 2020December 31, 2021December 31, 2020
Long-term debt$93,085 $98,114 $5,411 $209 

127


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 14 – Derivative Instruments (continued)

Offsetting
Certain financial instruments, including derivatives, may be eligible for offset in the consolidated balance sheet when the “right of setoff” exists or when the instruments are subject to an enforceable master netting agreement, which includes the right of the non-defaulting party or non-affected party to offset recognized amounts, including collateral posted with the counterparty, to determine a net receivable or net payable upon early termination of the agreement. Certain of the Company’s derivative instruments are subject to master netting agreements; however, the Company has not elected to offset such financial instruments in the

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 15 – Derivative Instruments (continued)


Consolidated Balance Sheets. The following table presents the Company’s gross derivative positions as recognized in the Consolidated Balance Sheets as well as the net derivative positions, including collateral pledged to the extent the application of such collateral did not reduce the net derivative liability position below zero, had the Company elected to offset those instruments subject to an enforceable master netting agreement as of the dates presented:
Offsetting Derivative AssetsOffsetting Derivative Liabilities
December 31,
2021
December 31,
2020
December 31,
2021
December 31,
2020
Gross amounts recognized$8,007 $3,866 $13,436 $21,107 
Gross amounts offset in the consolidated balance sheets— — — — 
Net amounts presented in the consolidated balance sheets8,007 3,866 13,436 21,107 
Gross amounts not offset in the consolidated balance sheets
Financial instruments7,208 3,866 7,208 3,866 
Financial collateral pledged— — 6,228 14,042 
Net amounts$799 $— $— $3,199 
 Offsetting Derivative Assets Offsetting Derivative Liabilities
 December 31,
2018
 December 31,
2017
 December 31,
2018
 December 31,
2017
Gross amounts recognized$1,620
 $717
 $6,768
 $5,303
Gross amounts offset in the consolidated balance sheets
 
 
 
Net amounts presented in the consolidated balance sheets1,620
 717
 6,768
 5,303
Gross amounts not offset in the consolidated balance sheets       
Financial instruments1,620
 717
 1,620
 717
Financial collateral pledged
 
 2,745
 4,357
Net amounts$
 $
 $2,403
 $229


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements

Note 1615 – Income Taxes
(In Thousands)
Significant components of the provision for income taxes are as follows for the periods presented:
 Year Ended December 31,
 202120202019
Current
Federal$34,629 $30,193 $23,786 
State895 3,309 4,264 
35,524 33,502 28,050 
Deferred
Federal9,168 (10,947)17,331 
State2,243 (2,715)2,710 
11,411 (13,662)20,041 
$46,935 $19,840 $48,091 

128

 Year Ended December 31,
 2018 2017 2016
Current     
Federal$22,658
 $28,380
 $31,679
State2,625
 1,354
 2,131
 25,283
 29,734
 33,810
Deferred     
Federal13,369
 22,314
 10,480
State3,075
 1,147
 557
Revaluation of net deferred tax assets as a result of the Tax Cuts and Jobs Act
 14,486
 
 16,444
 37,947
 11,037
 $41,727
 $67,681
 $44,847

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 15 – Income Taxes (continued)

The reconciliation of income taxes computed at the United States federal statutory tax rates to the provision for income taxes is as follows, for the periods presented:
 Year Ended December 31,
 202120202019
Tax at U.S. statutory rate$46,794 $21,733 $45,294 
Increase (decrease) in taxes resulting from:
Tax-exempt interest income(1,669)(1,431)(1,205)
BOLI income(1,547)(1,182)(1,283)
Investment tax credits(988)(1,494)(1,863)
Amortization of investment in low-income housing tax credits817 1,280 1,575 
State income tax expense, net of federal benefit2,479 469 5,509 
Other items, net1,049 465 64 
$46,935 $19,840 $48,091 
 Year Ended December 31,
 2018 2017 2016
Tax at U.S. statutory rate$39,616
 $55,955
 $47,522
Increase (decrease) in taxes resulting from:     
Tax-exempt interest income(1,433) (3,595) (3,467)
BOLI income(975) (1,524) (1,622)
Investment tax credits(1,863) (1,591) (1,390)
Amortization of investment in low-income housing tax credits1,592
 1,873
 1,742
State income tax expense, net of federal benefit4,502
 1,626
 1,747
Revaluation of net deferred tax assets as a result of the Tax Cuts and Jobs Act
 14,486
 
Other items, net288
 451
 315
 $41,727
 $67,681
 $44,847

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 16 – Income Taxes (continued)


Significant components of the Company’s deferred tax assets and liabilities are as follows for the periods presented:
December 31,December 31,
2018 201720212020
Deferred tax assets   Deferred tax assets
Allowance for loan losses$14,097
 $13,966
Allowance for credit lossesAllowance for credit losses$50,712 $53,597 
Loans18,655
 15,062
Loans2,855 5,526 
Deferred compensation10,001
 7,093
Deferred compensation14,522 13,114 
Net unrealized losses on securities6,180
 3,659
Net unrealized losses on securities3,545 — 
Impairment of assets1,280
 1,748
Impairment of assets392 1,067 
Net operating loss carryforwards19,065
 2,419
Net operating loss carryforwards1,211 1,857 
Investments in partnershipsInvestments in partnerships890 — 
Lease liabilities under operating leasesLease liabilities under operating leases17,106 17,732 
Other3,610
 4,722
Other3,241 3,539 
Gross deferred tax assets72,888
 48,669
Valuation allowance on state net operating loss carryforwards
 
Total deferred tax assets72,888
 48,669
Total deferred tax assets94,474 96,432 
Deferred tax liabilities   Deferred tax liabilities
Net unrealized gains on securitiesNet unrealized gains on securities— 8,434 
Investment in partnerships1,572
 757
Investment in partnerships— 793 
Depreciation3,865
 3,163
Fixed assetsFixed assets5,339 3,285 
Mortgage servicing rights12,350
 10,139
Mortgage servicing rights20,779 14,623 
Subordinated debt1,607
 2,394
Junior subordinated debtJunior subordinated debt2,130 2,245 
IntangiblesIntangibles3,177 3,882 
Lease right-of-use assetLease right-of-use asset16,209 16,833 
Other1,792
 1,859
Other1,607 1,672 
Total deferred tax liabilities21,186
 18,312
Total deferred tax liabilities49,241 51,767 
Net deferred tax assets$51,702
 $30,357
Net deferred tax assets$45,233 $44,665 
The Tax Cuts and Jobs Act (the “Tax Act”), enacted on December 22, 2017, among other things, permanently lowered the statutory federal corporateeffective tax rate from 35% to 21%, effective for tax years including or beginning January 1, 2018. Under the guidance of ASC 740, “Income Taxes” (“ASC 740”), the Company revalued its net deferred tax assets on the date of enactment based on the reduction in the overall future tax benefit expected to be realized at the lower tax rate implemented by the new legislation. After reviewing the Company's inventory of deferred tax assetswas 22.41% and liabilities on the date of enactment and giving consideration to the future impact of the lower corporate tax rates and other provisions of the new legislation, the Company's revaluation of its net deferred tax assets was $14,486, which was included in “Income taxes” in the Consolidated Statements of Income19.40% for the year ended December 31, 2017. No further adjustments related to the Tax Act were required in 2018.
2021 and 2020, respectively. The Company and its subsidiaries file a consolidated U.S. federal income tax return. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the years ending December 31, 20152018 through 2017.2020. The Company and its subsidiaries’ state income tax returns are open to audit under the statute of limitations for the years ended December 31, 20152018 through 2017.2020.
129


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 15 – Income Taxes (continued)

The Company acquired federal and state net operating losses as part of its previous acquisitions, with varying expiration periods. The federal and state net operating losses acquired in the Brand acquisition were $83,960$81,288 and approximately $67,168,$55,067, respectively, all created in 2018. As part of the 2017 Tax Cuts and Jobs Act and corresponding state tax laws, the federal net operating losses and the majority of the state net operating losses created by Brand during 2018 have an indefinite carryforward period.  As of December 31, 2018, there areThe federal and state net operating losses,loss related to the Brand acquisition was fully utilized during 2021, while at December 31, 2021, there were state net operating losses without expiration periods of $71,963 of and $63,218, respectively.$15,712. The federal and state net operating losses acquired in the Heritage Financial Group, Inc. acquisition were $18,321 and $16,877,$16,849, respectively, of which $4,956$2,065 and $2,365$1,242 remain to be utilized as of December 31, 2018.2021. These losses begin to expire in 2029 and are expected to be fully utilized. Because the benefits are expected to be fully realized, the Company recorded no valuation allowance against the net operating losses for the year endended December 31, 2018.

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 16 – Income Taxes (continued)


2021.
The table below presents the breakout of net operating losses foras of the periodsdates presented.
December 31,December 31,
2018 201720212020
Net Operating Losses   Net Operating Losses
Federal$76,919
 $5,920
Federal$2,065 $3,029 
State65,583
 7,319
State16,954 26,971 
A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest, related to federal and state income tax matters as of December 31 follows below. These amounts have been adjusted for the change in the tax rate from 35% to 21%.below:
2018 2017 2016202120202019
Balance at January 1$1,606
 $1,510
 $1,485
Balance at January 1$402 $667 $1,919 
Additions based on positions related to current period313
 467
 25
Additions based on positions related to current period62 101 158 
Reductions based on positions related to prior periodReductions based on positions related to prior period— (314)(1,410)
Reductions due to lapse of statute of limitations
 (371) 
Reductions due to lapse of statute of limitations(56)(52)— 
Balance at December 31$1,919
 $1,606
 $1,510
Balance at December 31$408 $402 $667 
If ultimately recognized, the Company does not anticipate any material increase in the effective tax rate for 20182021 relative to any tax positions taken prior to January 1, 2018.2021. The Company had accrued $244, $169$15, $18 and $169$105 for interest and penalties related to unrecognized tax benefits as of December 31, 2018, 20172021, 2020 and 2016,2019, respectively.

Note 17 – Investments in Qualified Affordable Housing Projects
(In Thousands)
The Company has investments in qualified affordable housing projects (“QAHPs”) that provide low income housing tax credits and operating loss benefits over an extended period. At December 31, 2018 and December 31, 2017, the Company’s carrying value of QAHPs was $6,037 and $7,637, respectively. During the first quarter of 2017, the Company sold its interest in a limited liability partnership which reduced the carrying value of the investment in QAHPs by approximately $2,450. On July 1, 2017, the Company acquired $5,481 in QAHPs in its acquisition of Metropolitan. The Company has no remaining funding obligations related to the QAHPs. The investments in QAHPs are accounted for using the effective yield method. The investments in QAHPs are included in “Other assets” on the Consolidated Balance Sheets.
Components of the Company’s investments in qualified affordable housing projects were included in the line item “Income taxes” in the Consolidated Statements of Income for the periods presented as follows:
 Year Ended
 December 31,
 2018 2017
Investment amortization$1,592
 $1,714
Tax credits and other benefits(2,290) (2,190)
Total$(698) $(476)
Note 1816 – Fair Value Measurements
(In Thousands)
Recurring Fair Value Measurements
The Company carries certain assets and liabilities at fair value on a recurring basis in accordance with applicable standards. The Company’s recurring fair value measurements are based on the requirement to carry such assets and liabilities at fair value or the Company’s election to carry certain eligible assets and liabilities at fair value. Assets and liabilities that are required to be carried

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 18 – Fair Value Measurements (continued)

at fair value include securities available for sale and derivative instruments. The Company has elected to carry mortgage loans held for sale at fair value on a recurring basis as permitted under the guidance in ASC 825.
The following methods and assumptions are used by the Company to estimate the fair values of the Company’s financial assets and liabilities that are measured on a recurring basis:
Securities available for sale: Securities available for sale consist primarily of debt securities, such as obligations of U.S. Government agencies and corporations mortgage-backed securities, trust preferred securities, and other debtmortgage backed securities. Where quoted market prices in active markets are available, securities are classified within Level 1 of the fair value hierarchy. If quoted prices from active markets are not available, fair values are based on quoted market prices for similar instruments traded in active markets, quoted market prices for identical or similar instruments traded in markets that are not active, or model-based valuation techniques where all significant assumptions are observable in the market. Such instruments are classified within Level 2 of the fair value hierarchy. When assumptions used in model-based valuation techniques are not observable in the market, the assumptions used by
130


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 16 – Fair Value Measurements (continued)
management reflect estimates of assumptions used by other market participants in determining fair value. When there is limited transparency around the inputs to the valuation, the instruments are classified within Level 3 of the fair value hierarchy.
Derivative instruments: The Company uses derivatives to manage various financial risks. Most of the Company’s derivative contracts are actively traded in over-the-counter markets and are valued using discounted cash flow models which incorporate observable market based inputs including current market interest rates, credit spreads, and other factors. Such instruments are categorized within Level 2 of the fair value hierarchy and include interest rate swaps and other interest rate contracts including interest rate caps and/or floors. The Company’s interest rate lock commitments are valued using current market prices for mortgage-backedmortgage backed securities with similar characteristics, adjusted for certain factors including servicing and risk. The value of the Company’s forward commitments is based on current prices for securities backed by similar types of loans. Because these assumptions are observable in active markets, the Company’s interest rate lock commitments and forward commitments are categorized within Level 2 of the fair value hierarchy.
Mortgage loans held for sale in loans held for sale: Mortgage loans held for sale are primarily agency loans which trade in active secondary markets. The fair value of these instruments is derived from current market pricing for similar loans, adjusted for differences in loan characteristics, including servicing and risk. Because the valuation is based on external pricing of similar instruments, mortgage loans held for sale are classified within Level 2 of the fair value hierarchy.

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 18 – Fair Value Measurements (continued)

The following table presentstables present assets and liabilities that are measured at fair value on a recurring basis as of the dates presented:
Level 1Level 2Level 3Totals
December 31, 2021
Financial assets:
Securities available for sale$— $2,386,052 $— $2,386,052 
Total securities available for sale— 2,386,052 — 2,386,052 
Derivative instruments— 17,698 — 17,698 
Mortgage loans held for sale in loans held for sale— 453,533 — 453,533 
Total financial assets$— $2,857,283 $— $2,857,283 
Financial liabilities:
Derivative instruments$— $13,803 $— $13,803 
 Level 1 Level 2 Level 3 Totals
December 31, 2018       
Financial assets:       
Securities available for sale:       
Obligations of other U.S. Government agencies and corporations$
 $2,511
 $
 $2,511
Obligations of states and political subdivisions
 203,269
 
 203,269
Residential mortgage-backed securities:       
Government agency-mortgage backed securities
 613,283
 
 613,283
Government agency collateralized mortgage obligations
 326,989
 
 326,989
Commercial mortgage-backed securities:       
Government agency-mortgage backed securities
 21,830
 
 21,830
Government agency collateralized mortgage obligations
 28,335
 
 28,335
Trust preferred securities
 
 10,633
 10,633
Other debt securities
 43,927
 
 43,927
Total securities available for sale
 1,240,144
 10,633
 1,250,777
Derivative instruments:       
Interest rate contracts
 2,779
 
 2,779
Interest rate lock commitments
 3,740
 
 3,740
Forward commitments
 
 
 
Total derivative instruments
 6,519
 
 6,519
Mortgage loans held for sale in loans held for sale
 219,848
 
 219,848
Total financial assets$
 $1,466,511
 $10,633
 $1,477,144
Financial liabilities:       
Derivative instruments:       
Interest rate swap$
 $2,046
 $
 $2,046
Interest rate contracts
 2,779
 
 2,779
Interest rate lock commitments
 
 
 
Forward commitments
 3,563
 
 3,563
Total derivative instruments
 8,388
 
 8,388
Total financial liabilities$
 $8,388
 $
 $8,388


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 18 – Fair Value Measurements (continued)

 Level 1 Level 2 Level 3 Totals
December 31, 2017       
Financial assets:       
Securities available for sale:       
Obligations of other U.S. Government agencies and corporations$
 $3,564
 $
 $3,564
Obligations of states and political subdivisions
 234,481
 
 234,481
Residential mortgage-backed securities:       
Government agency mortgage-backed securities
 193,950
 
 193,950
Government agency collateralized mortgage obligations
 176,639
 
 176,639
Commercial mortgage-backed securities:       
Government agency-mortgage backed securities
 31,170
 
 31,170
Government agency collateralized mortgage obligations
 5,006
 
 5,006
Trust preferred securities
 
 9,388
 9,388
Other debt securities
 17,290
 
 17,290
Total securities available for sale
 662,100
 9,388
 671,488
Derivative instruments:       
Interest rate contracts
 3,171
 
 3,171
Interest rate lock commitments
 2,756
 
 2,756
Forward commitments
 50
 
 50
Total derivative instruments
 5,977
 
 5,977
Mortgage loans held for sale in loans held for sale
 108,316
 
 108,316
Total financial assets$
 $776,393
 $9,388
 $785,781
Financial liabilities:       
Derivative instruments:       
Interest rate swap$
 $2,536
 $
 $2,536
Interest rate contracts
 3,171
 
 3,171
Interest rate lock commitments
 4
 
 4
Forward commitments
 328
 
 328
Total derivative instruments
 6,039
 
 6,039
Total financial liabilities$
 $6,039
 $
 $6,039
Level 1Level 2Level 3Totals
December 31, 2020
Financial assets:
Securities available for sale:
Trust preferred securities$— $— $9,012 $9,012 
Other available for sale securities— 1,334,445 — 1,334,445 
Total securities available for sale— 1,334,445 9,012 1,343,457 
Derivative instruments— 33,574 — 33,574 
Mortgage loans held for sale in loans held for sale— 417,771 — 417,771 
Total financial assets$— $1,785,790 $9,012 $1,794,802 
Financial liabilities:
Derivative instruments$— $21,107 $— $21,107 
The Company reviews fair value hierarchy classifications on a quarterly basis. Changes in the Company’s ability to observe inputs to the valuation may cause reclassification of certain assets or liabilities within the fair value hierarchy.


131


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1816 – Fair Value Measurements (continued)

The following table provides for the periods presented a reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs, or Level 3 inputs:
 Securities available for sale
 
Trust preferred
securities
Balance at January 1, 2017$18,389
Realized (gains) losses included in net income, net of premium amortization25
Unrealized gains included in other comprehensive income2,364
Sales(9,346)
Issues
Settlements(2,044)
Transfers into Level 3
Transfers out of Level 3
Balance at December 31, 2017$9,388
Realized (gains) losses included in net income, net of premium amortization34
Unrealized gains included in other comprehensive income1,328
Sales
Issues
Settlements(117)
Transfers into Level 3
Transfers out of Level 3
Balance at December 31, 2018$10,633
Securities available for sale
Trust preferred
securities
Balance at January 1, 2020$9,986 
Accretion included in net income32 
Unrealized losses included in other comprehensive income(834)
Settlements(172)
Transfers out of Level 3— 
Balance at December 31, 2020$9,012 
Accretion included in net income
Realized losses included in net income, net of premium amortization2,060 
Unrealized losses included in other comprehensive income941 
Sales(12,021)
Balance at December 31, 2021$— 
For 20182021 and 2017,2020, there were no gains or losses included in earnings that were attributable to the change in unrealized gains or losses related to assets or liabilities held at the end of each respective period that were measured on a recurring basis using significant unobservable inputs.
The following table presents information as of December 31, 2018 about significant unobservable inputs (Level 3) used in the valuation of assets and liabilities measured at fair value on a recurring basis:
Financial instrument 
Fair
Value
 Valuation Technique 
Significant
Unobservable Inputs
 Range of Inputs
Trust preferred securities $10,633
 Discounted cash flows Default rate 0-100%

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 18 – Fair Value Measurements (continued)

Nonrecurring Fair Value Measurements
Certain assets may be recorded at fair value on a nonrecurring basis. These nonrecurring fair value adjustments typically are a result of the application of the lower of cost or market accounting or a write-down occurring during the period. The following table providestables provide as of the dates presented the fair value measurement for assets measured at fair value on a nonrecurring basis that were still held on the Consolidated Balance Sheets at period end and the level within the fair value hierarchy each is classified:
Level 1Level 2Level 3Totals
December 31, 2021
Individually evaluated loans, net of allowance for credit losses$— $— $7,928 $7,928 
OREO— — 2,540 2,540 
Mortgage servicing rights— — 89,018 89,018 
Total$— $— $99,486 $99,486 
 Level 1 Level 2 Level 3 Totals
December 31, 2018       
Impaired loans$
 $
 $21,686
 $21,686
OREO
 
 4,319
 4,319
Total$
 $
 $26,005
 $26,005
Level 1Level 2Level 3Totals
Level 1 Level 2 Level 3 Totals
December 31, 2017       
Impaired loans$
 $
 $19,365
 $19,365
December 31, 2020December 31, 2020
Individually evaluated loans, net of allowance for credit lossesIndividually evaluated loans, net of allowance for credit losses$— $— $24,145 $24,145 
OREO
 
 7,392
 7,392
OREO— — 2,736 2,736 
Mortgage servicing rightsMortgage servicing rights— — 62,994 62,994 
Total$
 $
 $26,757
 $26,757
Total$— $— $89,875 $89,875 
The following methods and assumptions are used by the Company to estimate the fair values of the Company’s assets measured on a nonrecurring basis:
ImpairedIndividually evaluated loans: Loans considered impaired are reservedindividually evaluated for at the time the loan is identified as impairedcredit losses each quarter taking into account the fair value of the collateral less estimated selling costs. Collateral may be real estate and/or business assets including but not limited to equipment, inventory and accounts receivable. The fair value of real estate is determined based on appraisals by qualified licensed appraisers. The fair value of the business assets is generally based on amounts reported on the business’s financial
132


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 16 – Fair Value Measurements (continued)
statements. Appraised and reported values may be adjusted based on changes in market conditions from the time of valuation and management’s knowledge of the client and the client’s business. Since not all valuation inputs are observable, these nonrecurring fair value determinations are classified as Level 3. ImpairedIndividually evaluated loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the same factors previously identified. ImpairedIndividually evaluated loans that were measured or re-measured at fair value had a carrying value of $22,621$12,939 and $20,394$36,990 at December 31, 20182021 and December 31, 2017,2020, respectively, and a specific reserve for these loans of $935$5,011 and $1,029$12,845 was included in the allowance for loancredit losses for the same periods ended.periods.
Other real estate owned: OREO is comprised of commercial and residential real estate obtained in partial or total satisfaction of loan obligations. OREO acquired in settlement of indebtedness is recorded at the fair value of the real estate less estimated costs to sell. Subsequently, it may be necessary to record nonrecurring fair value adjustments for declines in fair value. Fair value, when recorded, is determined based on appraisals by qualified licensed appraisers and adjusted for management’s estimates of costs to sell. Accordingly, values for OREO are classified as Level 3.
The following table presents, as of the dates presented, OREO measured at fair value on a nonrecurring basis that was still held in the Consolidated Balance Sheets at period-end:
December 31, 2021December 31, 2020
Carrying amount prior to remeasurement$2,556 $4,051 
Impairment recognized in results of operations(16)(1,315)
Fair value$2,540 $2,736 
 December 31, 2018 December 31, 2017
Carrying amount prior to remeasurement$5,258
 $8,732
Impairment recognized in results of operations(939) (1,340)
Fair value$4,319
 $7,392
Mortgage servicing rights: The Company retains the right to service certain mortgage loans that it sells to secondary market investors. Mortgage servicing rights are carried at the lower of amortized cost or fair value. Fair value is determined using an income approach with various assumptions including expected cash flows, market discount rates, prepayment speeds, servicing costs, and other factors. Because these factors are not all observable and include management's assumptions, mortgage servicing rights are classified within Level 3 of the fair value hierarchy. Mortgage servicing rights were carried at amortized cost at December 31, 2021 and December 31, 2020. See Note 9, “Mortgage Servicing Rights,” for information about the valuation adjustments to the Company's mortgage servicing rights.


133


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1816 – Fair Value Measurements (continued)

The following table presents information as of December 31, 20182021 about significant unobservable inputs (Level 3) used in the valuation of assets measured at fair value on a nonrecurring basis:
Financial instrument 
Fair
Value
 Valuation Technique 
Significant
Unobservable Inputs
 Range of Inputs
Impaired loans $21,686
 Appraised value of collateral less estimated costs to sell Estimated costs to sell 4-10%
OREO $4,319
 Appraised value of property less estimated costs to sell Estimated costs to sell 4-10%
Financial instrumentFair
Value
Valuation TechniqueSignificant
Unobservable Inputs
Range of Inputs
Individually evaluated loans, net of allowance for credit losses$7,928 Appraised value of collateral less estimated costs to sellEstimated costs to sell4-10%
OREO$2,540 Appraised value of property less estimated costs to sellEstimated costs to sell4-10%
Fair Value Option
The Company elected to measure all mortgage loans originated for sale on or after July 1, 2012 at fair value under the fair value option as permitted under ASC 825. Electing to measure these assets at fair value reduces certain timing differences and better matches the changes in fair value of the loans with changes in the fair value of derivative instruments used to economically hedge them.
Net gainslosses of $4,892$10,354 resulting from fair value changes of these mortgage loans were recorded in income during 2018,2021, as compared to net gains of $1,594$12,057 in 20172020 and net losses of $4,851$1,286 in 2016.2019. The amounts do not reflect changes in fair values of related derivative instruments used to hedge exposure to market-related risks associated with these mortgage loans. The change in fair value of both mortgage loans held for sale and the related derivative instruments are recorded in “Mortgage banking income” in the Consolidated Statements of Income.
The Company’s valuation of mortgage loans held for sale incorporates an assumption for credit risk; however, given the short-term period that the Company holds these loans, valuation adjustments attributable to instrument-specific credit risk is nominal. Interest income on mortgage loans held for sale measured at fair value is accrued as it is earned based on contractual rates and is reflected in loan interest income on the Consolidated Statements of Income.
The following table summarizes the differences between the fair value and the principal balance for mortgage loans held for sale measured at fair value as of December 31, 2018:2021:
Aggregate
Fair Value
Aggregate
Unpaid
Principal
Balance
Difference
Mortgage loans held for sale$453,533 $441,717 $11,816 

134
 
Aggregate
Fair Value
 
Aggregate
Unpaid
Principal
Balance
 Difference
Mortgage loans held for sale$219,848
 $211,460
 $8,388
Past due loans of 90 days or more
 
 
Nonaccrual loans
 
 




Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1816 – Fair Value Measurements (continued)

Fair Value of Financial Instruments
The carrying amounts and estimated fair values of the Company’s financial instruments, including those assets and liabilities that are not measured and reported at fair value on a recurring basis or nonrecurring basis, were as follows as of the dates presented:
  Fair Value
 Carrying
Value
Level 1Level 2Level 3Total
December 31, 2021
Financial assets
Cash and cash equivalents$1,877,965 $1,877,965 $— $— $1,877,965 
Securities held to maturity416,357 — 415,552 — 415,552 
Securities available for sale2,386,052 — 2,386,052 — 2,386,052 
Loans held for sale453,533 — 453,533 — 453,533 
Loans, net9,856,743 — — 9,690,604 9,690,604 
Mortgage servicing rights89,018 — — 99,425 99,425 
Derivative instruments17,698 — 17,698 — 17,698 
Financial liabilities
Deposits$13,905,724 $12,494,342 $1,408,397 $— $13,902,739 
Short-term borrowings13,947 13,947 — — 13,947 
Federal Home Loan Bank advances417 — 422 — 422 
Junior subordinated debentures111,373 — 106,682 — 106,682 
Subordinated notes359,419 — 373,950 — 373,950 
Derivative instruments13,803 — 13,803 — 13,803 
  Fair Value
 Carrying
Value
Level 1Level 2Level 3Total
December 31, 2020
Financial assets
Cash and cash equivalents$633,203 $633,203 $— $— $633,203 
Securities available for sale1,343,457 — 1,334,445 9,012 1,343,457 
Loans held for sale417,771 — 417,771 — 417,771 
Loans, net10,757,503 — — 10,668,625 10,668,625 
Mortgage servicing rights62,994 — — 62,994 62,994 
Derivative instruments33,574 — 33,574  33,574 
Financial liabilities
Deposits$12,059,081 $10,363,193 $1,706,005 $— $12,069,198 
Short-term borrowings21,340 21,340 — — 21,340 
Federal Home Loan Bank advances152,167 — 158,914 — 158,914 
Junior subordinated debentures110,794 — 93,092 — 93,092 
Subordinated notes212,009 — 217,575 — 217,575 
Derivative instruments21,107 — 21,107 — 21,107 

135
   Fair Value
 
Carrying
Value
 Level 1 Level 2 Level 3 Total
December 31, 2018         
Financial assets         
Cash and cash equivalents$569,111
 $569,111
 $
 $
 $569,111
Securities available for sale1,250,777
 
 1,240,144
 10,633
 1,250,777
Loans held for sale411,427
 
 219,848
 191,579
 411,427
Loans, net9,034,103
 
 
 8,818,039
 8,818,039
Mortgage servicing rights48,230
 
 
 61,111
 61,111
Derivative instruments6,519
 
 6,519
 
 6,519
Financial liabilities         
Deposits$10,128,557
 $7,765,773
 $2,337,334
 $
 $10,103,107
Short-term borrowings387,706
 387,706
 
 
 387,706
Other long-term borrowings53
 53
 
 
 53
Federal Home Loan Bank advances6,690
 
 6,751
 
 6,751
Junior subordinated debentures109,636
 
 109,766
 
 109,766
Subordinated notes147,239
 
 148,875
 
 148,875
Derivative instruments8,388
 
 8,388
 
 8,388

   Fair Value
 
Carrying
Value
 Level 1 Level 2 Level 3 Total
December 31, 2017         
Financial assets

 

      
Cash and cash equivalents$281,453
 $281,453
 $
 $
 $281,453
Securities available for sale671,488
 
 662,100
 9,388
 671,488
Loans held for sale108,316
 
 108,316
 
 108,316
Loans, net7,574,111
 
 
 7,514,185
 7,514,185
Mortgage servicing rights39,339
 
 
 47,868
 47,868
Derivative instruments5,977
 
 5,977
 
 5,977
Financial liabilities         
Deposits$7,921,075
 $6,114,391
 $1,809,085
 $
 $7,923,476
Short-term borrowings89,814
 89,814
 
 
 89,814
Other long-term borrowings98
 98
 
 
 98
Federal Home Loan Bank advances7,493
 
 7,661
 
 7,661
Junior subordinated debentures85,881
 
 69,702
 
 69,702
Subordinated notes114,074
 
 118,650
 
 118,650
Derivative instruments6,039
 
 6,039
 
 6,039



Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements

Note 1917 – Other Comprehensive Income (Loss)
(In Thousands)
Changes in the components of other comprehensive income, net of tax, were as follows:
Pre-TaxTax  Expense
(Benefit)
Net of Tax
Year Ended December 31, 2021
Securities available for sale:
Unrealized holding losses on securities$(51,470)$(13,099)$(38,371)
Reclassification adjustment for gains realized in net income(1)
(2,170)(552)(1,618)
Amortization of unrealized holding gains on securities transferred to the held to maturity category(73)(19)(54)
Total securities available for sale(53,713)(13,670)(40,043)
Derivative instruments:
Unrealized holding gains on derivative instruments10,848 2,761 8,087 
Reclassification adjustment for gains realized in net income related to swap termination(4,676)(1,190)(3,486)
Total derivative instruments6,172 1,571 4,601 
Defined benefit pension and post-retirement benefit plans:
Net loss arising during the period(356)(92)(264)
Amortization of net actuarial loss recognized in net periodic pension cost(2)
262 67 195 
Total defined benefit pension and post-retirement benefit plans(94)(25)(69)
Total other comprehensive loss$(47,635)$(12,124)$(35,511)
Year Ended December 31, 2020
Securities available for sale:
Unrealized holding gains on securities$27,788 $7,071 $20,717 
Reclassification adjustment for gains realized in net income(1)
(46)(12)(34)
Total securities available for sale27,742 7,059 20,683 
Derivative instruments:
Unrealized holding gains on derivative instruments923 235 688 
Reclassification adjustment for losses realized in net income related to swap termination2,040 519 1,521 
Total derivative instruments2,963 754 2,209 
Defined benefit pension and post-retirement benefit plans:
Net gain arising during the period1,069 272 797 
Reclassification adjustment for settlement loss related to the VERP realized in net income(3)
567 145 422 
New prior service cost(3)
(485)(123)(362)
Amortization of net actuarial loss recognized in net periodic pension cost(2)
259 66 193 
Amortization of prior service cost(3)
485 123 362 
Total defined benefit pension and post-retirement benefit plans1,895 483 1,412 
Total other comprehensive income$32,600 $8,296 $24,304 
136
 Pre-Tax 
Tax  Expense
(Benefit)
 Net of Tax
Year Ended December 31, 2018     
Securities available for sale:     
Unrealized holding losses on securities$(11,155) $(2,840) $(8,315)
Reclassification adjustment for losses realized in net income(1)
16
 4
 12
Total securities available for sale(11,139) (2,836) (8,303)
Derivative instruments:     
Unrealized holding gains on derivative instruments490
 125
 365
Total derivative instruments490
 125
 365
Defined benefit pension and post-retirement benefit plans:     
Net gain arising during the period413
 105
 308
Amortization of net actuarial loss recognized in net periodic pension cost(2)
328
 83
 245
Total defined benefit pension and post-retirement benefit plans741
 188
 553
Total other comprehensive loss$(9,908) $(2,523) $(7,385)
Year Ended December 31, 2017     
Securities available for sale:     
Unrealized holding losses on securities$(3,617) $(1,399) $(2,218)
Unrealized holding gains on securities transferred from held to maturity to available for sale13,219

5,111

8,108
Reclassification adjustment for gains realized in net income(1)
(148) (57) (91)
Amortization of unrealized holding gains on securities transferred to the held to maturity category(282) (109) (173)
Total securities available for sale9,172
 3,546
 5,626
Derivative instruments:     
Unrealized holding gains on derivative instruments874
 338
 536
Total derivative instruments874
 338
 536
Defined benefit pension and post-retirement benefit plans:

 

 

Net gain arising during the period1,379
 351
 1,028
Amortization of net actuarial loss recognized in net periodic pension cost(2)
407
 158
 249
Total defined benefit pension and post-retirement benefit plans1,786
 509
 1,277
Total other comprehensive income$11,832
 $4,393
 $7,439




Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 1917 – Other Comprehensive Income (Loss) (continued)



 Pre-Tax 
Tax  Expense
(Benefit)
 Net of Tax
Year Ended December 31, 2016     
Securities available for sale:     
Unrealized holding losses on securities$(10,119) $(3,913) $(6,206)
Reclassification adjustment for gains realized in net income(1)
(1,186) (459) (727)
Amortization of unrealized holding gains on securities transferred to the held to maturity category(99) (38) (61)
Total securities available for sale(11,404) (4,410) (6,994)
Derivative instruments:     
Unrealized holding gains on derivative instruments856
 329
 527
Total derivative instruments856
 329
 527
Defined benefit pension and post-retirement benefit plans:     
Net loss arising during the period51
 20
 31
Amortization of net actuarial loss recognized in net periodic pension cost(2)
480
 178
 302
Reclassification of adjustment for net settlement gain realized in net income (2)
(383) (148) (235)
Total defined benefit pension and post-retirement benefit plans148
 50
 98
Total other comprehensive loss$(10,400) $(4,031) $(6,369)
 Pre-TaxTax  Expense
(Benefit)
Net of Tax
Year Ended December 31, 2019
Securities available for sale:
Unrealized holding gains on securities$24,983 $6,358 $18,625 
Reclassification adjustment for losses realized in net income(1)
2,511 639 1,872 
Total securities available for sale27,494 6,997 20,497 
Derivative instruments:
Unrealized holding losses on derivative instruments(2,975)(758)(2,217)
Total derivative instruments(2,975)(758)(2,217)
Defined benefit pension and post-retirement benefit plans:
Net gain arising during the period91 23 68 
Amortization of net actuarial loss recognized in net periodic pension cost(2)
419 107 312 
Total defined benefit pension and post-retirement benefit plans510 130 380 
Total other comprehensive income$25,029 $6,369 $18,660 
(1) Included in Net gains (losses) gains on sales of securities in the Consolidated Statements of Income
(2) Included in Salaries and employee benefits in the Consolidated Statements of Income
(3) Included in Restructuring charges in the Consolidated Statements of Income
The accumulated balances for each component of other comprehensive income (loss), net of tax, at December 31 were as follows:
 202120202019
Unrealized (losses) gains on securities$(9,116)$42,246 $21,563 
Non-credit related portion of other-than-temporary impairment on securities— (11,319)(11,319)
Unrealized gains (losses) on derivative instruments3,963 (638)(2,847)
Unrecognized losses on defined benefit pension and post-retirement benefit plans obligations(5,290)(5,221)(6,633)
Total accumulated other comprehensive (loss) income$(10,443)$25,068 $764 

137
 2018 2017 2016
Unrealized gains on securities$1,066
 $9,369
 $9,490
Non-credit related portion of other-than-temporary impairment on securities(11,319) (11,319) (16,719)
Unrealized losses on derivative instruments(630) (995) (1,355)
Unrecognized losses on defined benefit pension and post-retirement benefit plans obligations(7,013) (7,566) (7,320)
Total accumulated other comprehensive loss$(17,896) $(10,511) $(15,904)



Renasant Corporation and Subsidiaries
Notes to Consolidated Financial StatementStatements





Note 20 – Quarterly Results of Operations
(In Thousands, Except Share Data) (Unaudited)
The following table sets forth a summary of the unaudited quarterly results of operations.
 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
2018       
Interest income$100,380
 $106,574
 $117,795
 $137,105
Interest expense11,140
 14,185
 18,356
 21,648
Net interest income89,240
 92,389
 99,439
 115,457
Provision for loan losses1,750
 1,810
 2,250
 1,000
Noninterest income33,953
 35,581
 38,053
 36,374
Noninterest expense77,944
 79,026
 94,746
 93,313
Income before income taxes43,499
 47,134
 40,496
 57,518
Income taxes9,673
 10,424
 8,532
 13,098
Net income$33,826
 $36,710
 $31,964
 $44,420
Basic earnings per share$0.69
 $0.74
 $0.61
 $0.76
Diluted earnings per share$0.68
 $0.74
 $0.61
 $0.76
        
2017       
Interest income$81,889
 $87,579
 $100,695
 $104,587
Interest expense7,874
 7,976
 10,678
 11,325
Net interest income74,015
 79,603
 90,017
 93,262
Provision for loan losses1,500
 1,750
 2,150
 2,150
Noninterest income32,021
 34,265
 33,413
 32,441
Noninterest expense69,309
 74,841
 80,660
 76,808
Income before income taxes35,227
 37,277
 40,620
 46,745
Income taxes11,255
 11,993
 14,199
 30,234
Net income$23,972
 $25,284
 $26,421
 $16,511
Basic earnings per share$0.54
 $0.57
 $0.54
 $0.33
Diluted earnings per share$0.54
 $0.57
 $0.53
 $0.33
See Note 2, “Mergers and Acquisitions” above for a discussion of the effect on the Company’s results of operations of its acquisitions of Brand in the third quarter of 2018 and Metropolitan in the third quarter of 2017.
Note 2118 – Net Income Per Common Share
(In Thousands, Except Share Data)
Basic net income per common share is calculated by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted net income per common share reflects the pro forma dilution of shares outstanding, assuming outstanding stock options were exercised into common shares and nonvested restricted stock awards, whose vesting is subject to future service requirements, were outstanding common shares as of the awards’ respective grant dates, calculated in accordance with the treasury method.

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statement
Note 21 – Net Income Per Common Share (continued)


Basic and diluted net income per common share calculations are as follows for the periods presented:
Year Ended December 31, Year Ended December 31,
2018 2017 2016 202120202019
Basic     Basic
Net income applicable to common stock$146,920
 $92,188
 $90,930
Net income applicable to common stock$175,892 $83,651 $167,596 
Average common shares outstanding52,492,104
 46,874,502
 41,737,636
Average common shares outstanding56,114,666 56,270,566 58,046,716 
Net income per common share—basic$2.80
 $1.97
 $2.18
Net income per common share—basic$3.13 $1.49 $2.89 
Diluted     Diluted
Net income applicable to common stock$146,920
 $92,188
 $90,930
Net income applicable to common stock$175,892 $83,651 $167,596 
Average common shares outstanding52,492,104
 46,874,502
 41,737,636
Average common shares outstanding56,114,666 56,270,566 58,046,716 
Effect of dilutive stock-based compensation134,746
 127,014
 251,819
Effect of dilutive stock-based compensation309,818 197,599 179,970 
Average common shares outstanding—diluted52,626,850
 47,001,516
 41,989,455
Average common shares outstanding—diluted56,424,484 56,468,165 58,226,686 
Net income per common share—diluted$2.79
 $1.96
 $2.17
Net income per common share—diluted$3.12 $1.48 $2.88 
Outstanding stock-based compensation awards that could potentially dilute basic net income per common share in the future that were not included in the computation of diluted net income per common share due to their anti-dilutive effect were as follows for the periods presented:
Year Ended
 December 31,
 202120202019
Number of shares245,146643
Range of exercise prices (for stock option awards)
 Year Ended
 December 31,
 2018 2017 2016
Number of shares73,257 77,545 
Range of exercise prices (for stock option awards)  

Note 2219 – Commitments, Contingent Liabilities and Financial Instruments with Off-Balance Sheet Risk
(In Thousands)
Loan commitments are made to accommodate the financial needs of the Company’s customers. Standby letters of credit commit the Company to make payments on behalf of customers when certain specified future events occur. Both arrangements have credit risk essentially the same as that involved in extending loans to customers and are subject to the Company’s normal credit policies. Collateral (e.g., securities, receivables, inventory, equipment, etc.) is obtained based on management’s credit assessment of the customer. The Company’s unfunded loan commitments (unfunded loans and unused lines of credit) and standby letters of credit outstanding at December 31, 20182021 were $2,068,749$3,104,940 and $104,664,$89,830, respectively, compared to $1,619,022$2,749,988 and $68,946,$90,597, respectively, at December 31, 2017.2020.
Various claims and lawsuits are pending against the Company and Renasant Bank. In the opinion of management, after consultation with legal counsel, resolution of these matters is not expected to have a material effect on the consolidated financial statements.
Market risk resulting from interest rate changes on particular off-balance sheet financial instruments may be offset by other on - or off-balance sheet transactions. Interest rate sensitivity is monitored by the Company for determining the net effect of potential changes in interest rates on the market value of both on- and off-balance sheet financial instruments.

138


Note 2320 – Restrictions on Cash, Securities, Bank Dividends, Loans or Advances
(In Thousands)
In prior years Renasant Bank ishas been required to maintain minimum average balances with the Federal Reserve. In March 2020, the Federal Reserve announced that effective March 26, 2020 the reserve requirement would be reduced to zero. This action was taken to support the flow of credit to households and businesses in response to the economic environment caused by the COVID-19 pandemic. At December 31, 20182021 and 2017,2020, Renasant Bank’s reserve requirementsrequirement with the Federal Reserve were $113,341 and $129,429, respectively, with which it was in full compliance.remained at $0.
The Company’s balance of FHLB stock, which is carried at amortized cost, at December 31, 20182021 and 2017,2020, was $19,777$8,272 and $15,070,$12,252, respectively. The required investment for the same time period was $7,471$5,984 and $7,181,$11,594 respectively.

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 23 – Restrictions on Cash, Securities, Bank Dividends, Loans or Advances (continued)


The Company’s ability to pay dividends to its shareholders is substantially dependent on the ability of Renasant Bank to transfer funds to the Company in the form of dividends, loans and advances. Under Mississippi law, a Mississippi bank may not pay dividends unless its earned surplus is in excess of three times capital stock. A Mississippi bank with earned surplus in excess of three times capital stock may pay a dividend, subject to the approval of the Mississippi Department of Banking and Consumer Finance (the “DBCF”). In addition, the FDIC also has the authority to prohibit the Bank from engaging in business practices that the FDIC considers to be unsafe or unsound, which, depending on the financial condition of the Bank, could include the payment of dividends. Accordingly, the approval of the DBCF is required prior to Renasant Bank paying dividends to the Company, and under certain circumstances the approval of the FDIC may be required. At December 31, 2018,2021, the Bank’s earned surplus exceeded the Bank’s capital stock by more than ten10 times.
Federal Reserve regulations also limit the amount Renasant Bank may loan to the Company unless such loans are collateralized by specific obligations. At December 31, 2018,2021, the maximum amount available for transfer from Renasant Bank to the Company in the form of loans was $133,162.$169,716. The Company also maintains a $3,000 line of credit collateralized by cash with the Bank. As of December 31, 2018,2021, no loans from the Bank to the Company were outstanding.

Note 2421 – Regulatory Matters
(In Thousands)
The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. Capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
The Federal Reserve, the FDIC and the Office of the Comptroller of the Currency have issued guidelines governing the levels of capital that bank holding companies and banks must maintain. Those guidelines specify capital tiers, which include the following classifications:
classifications (which include the “capital conservation buffer” discussed below):
Capital TiersTier 1 Capital to

Average Assets

(Leverage)
Common Equity Tier 1 to

Risk - Weighted Assets
Tier 1 Capital to

Risk – Weighted

Assets
Total Capital to

Risk – Weighted

Assets
Well capitalized5% or above6.5% or above8% or above10% or above
Adequately capitalized4% or above4.5% or above6% or above8% or above
UndercapitalizedLess than 4%Less than 4.5%Less than 6%Less than 8%
Significantly undercapitalizedLess than 3%Less than 3%Less than 4%Less than 6%
Critically undercapitalized Tangible Equity / Total Assets less than 2%


139


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 2421 – Regulatory Matters (continued)



The following table provides the capital and risk-based capital and leverage ratios for the Company and for Renasant Bank as of December 31:
2018 2017 20212020
Amount Ratio Amount Ratio AmountRatioAmountRatio
Renasant Corporation       Renasant Corporation
Tier 1 Capital to Average Assets (Leverage)$1,188,412
 10.11% $979,604
 10.18%Tier 1 Capital to Average Assets (Leverage)$1,422,077 9.15 %$1,306,597 9.37 %
Common Equity Tier 1 Capital to Risk-Weighted Assets1,085,751
 11.05% 896,733
 11.34%Common Equity Tier 1 Capital to Risk-Weighted Assets1,314,295 11.18 %1,199,394 10.93 %
Tier 1 Capital to Risk-Weighted Assets1,188,412
 12.10% 979,604
 12.39%Tier 1 Capital to Risk-Weighted Assets1,422,077 12.10 %1,306,597 11.91 %
Total Capital to Risk-Weighted Assets1,386,507
 14.12% 1,142,926
 14.46%Total Capital to Risk-Weighted Assets1,897,167 16.14 %1,653,694 15.07 %
Renasant Bank       Renasant Bank
Tier 1 Capital to Average Assets (Leverage)$1,276,976
 10.88% $1,000,715
 10.42%Tier 1 Capital to Average Assets (Leverage)$1,580,904 10.18 %$1,369,994 9.83 %
Common Equity Tier 1 Capital to Risk-Weighted Assets1,276,976
 13.02% 1,000,715
 12.69%Common Equity Tier 1 Capital to Risk-Weighted Assets1,580,904 13.46 %1,369,994 12.49 %
Tier 1 Capital to Risk-Weighted Assets1,276,976
 13.02% 1,000,715
 12.69%Tier 1 Capital to Risk-Weighted Assets1,580,904 13.46 %1,369,994 12.49 %
Total Capital to Risk-Weighted Assets1,331,619
 13.58% 1,050,751
 13.32%Total Capital to Risk-Weighted Assets1,697,163 14.44 %1,504,985 13.73 %
Common equity Tier 1 capital (“CET1”) generally consists of common stock, retained earnings, accumulated other comprehensive income and certain minority interests, less certain adjustments and deductions. In addition, the Company must maintain a “capital conservation buffer,” which is a specified amount of CET1 capital in addition to the amount necessary to meet minimum risk-based capital requirements. The capital conservation buffer is designed to absorb losses during periods of economic stress. If the Company’s ratio of CET1 to risk-weighted capital is below the capital conservation buffer, the Company will face restrictions on its ability to pay dividends, repurchase outstanding stock and make certain discretionary bonus payments. At December 31, 2018, theThe required capital conservation buffer was 1.875%is 2.5% of CET1 to risk-weighted assets in addition to the amount necessary to meet minimum risk-based capital requirements, andrequirements.
As previously disclosed, the buffer increased to 2.5%Company adopted CECL as of January 1, 2019. In addition, the Basel III regulatory capital reforms and rules effecting certain changes required by the Dodd-Frank Wall Street Reform and Consumer Protection Act2020. The Company has elected to take advantage of 2010 issuedtransitional relief offered by the Federal Reserve and the FDIC andto delay for two years the Officeestimated impact of CECL on regulatory capital, followed by a three-year transitional period to phase out the Comptroller of the Currency (the “Basel III Rules”) have revised the agencies’ rules for calculating risk-weighted assets to enhance risk sensitivity and to incorporate certain international capital standards of the Basel Committee on Banking Supervision. 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. As applicable to Renasant Bank:
— Residential mortgages: Replaced the current 50% risk weight for performing residential first-lien mortgages and a 100% risk-weight for all other mortgages with a risk weight of between 35% and 200% determinedbenefit provided by 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.two-year delay.
— Commercial mortgages: Replaced the current 100% risk weight with a 150% risk weight for certain high volatility commercial real estate acquisition, development and construction loans.
140
— Nonperforming loans: Replaced the current 100% risk weight with a 150% risk weight for loans, other than residential mortgages, that are 90 days past due or on nonaccrual status.
Finally, Tier 1 capital treatment for “hybrid” capital items like trust preferred securities has been eliminated, subject to various grandfathering and transition rules.




Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements

Note 2522 – Segment Reporting
(In Thousands)
The operations of the Company’s reportable segments are described as follows:
The Community Banks segment delivers a complete range of banking and financial services to individuals and small to medium-size businesses including checking and savings accounts, business and personal loans, asset-based lending and equipment leasing, as well as safe deposit and night depository facilities.
The Insurance segment includes a full service insurance agency offering all major lines of commercial and personal insurance through major carriers.
The Wealth Management segment, through the Trust division, offers a broad range of wealth management and fiduciary services which includesincluding the administration and(as trustee or in other fiduciary or representative capacities) of benefit plans, management of trust accounts, includinginclusive of personal and corporate benefit accounts self-directed IRAs, and custodial accounts, as well as accounting and money management for trust accounts. In addition, the Wealth Management segment, offersthrough the Financial Services division, provides specialized products and services to customers, which include fixed and variable annuities, mutual funds and other investment services through a third party broker-dealer.
In order to give the Company’s divisional management a more precise indication of the income and expenses they can control, the results of operations for the Community Banks, the Insurance and the Wealth Management segments reflect the direct revenues and expenses of each respective segment. Indirect revenues and expenses, including but not limited to income from the Company’s investment portfolio, as well as certain costs associated with data processing and back office functions, primarily support the operations of the community banks and, therefore, are included in the results of the Community Banks segment. Included in “Other” are the operations of the holding company and other eliminations which are necessary for purposes of reconciling to the consolidated amounts.


141


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 25 -22 – Segment Reporting (continued)



The following table provides financial information for the Company’s operating segments as of and for the years ended December 31, 2018, 20172021, 2020 and 2016:2019:
Community
Banks
InsuranceWealth
Management
OtherConsolidated
2021
Net interest income$437,435 $454 $1,657 $(15,545)$424,001 
Recovery for credit losses(1,668)— — — (1,668)
Noninterest income195,214 11,370 22,185 (1,785)226,984 
Noninterest expense404,066 8,060 16,475 1,225 429,826 
Income before income taxes230,251 3,764 7,367 (18,555)222,827 
Income taxes50,749 981 — (4,795)46,935 
Net income (loss)$179,502 $2,783 $7,367 $(13,760)$175,892 
Total assets$16,694,710 $33,544 $65,015 $17,042 $16,810,311 
Goodwill936,916 2,767 — — 939,683 
2020
Net interest income$437,101 $566 $1,658 $(12,528)$426,797 
Provision for credit losses86,850 — — — 86,850 
Noninterest income208,721 10,403 18,061 (1,653)235,532 
Noninterest expense448,475 7,751 14,940 822 471,988 
Income before income taxes110,497 3,218 4,779 (15,003)103,491 
Income taxes22,892 837 — (3,889)19,840 
Net income (loss)$87,605 $2,381 $4,779 $(11,114)$83,651 
Total assets$14,814,726 $30,375 $71,266 $13,245 $14,929,612 
Goodwill936,916 2,767 — — 939,683 
2019
Net interest income$454,433 $702 $1,761 $(13,239)$443,657 
Provision for credit losses7,050 — — — 7,050 
Noninterest income129,016 10,129 15,598 (1,489)153,254 
Noninterest expense351,640 7,574 13,863 1,097 374,174 
Income before income taxes224,759 3,257 3,496 (15,825)215,687 
Income taxes51,292 876 — (4,077)48,091 
Net income (loss)$173,467 $2,381 $3,496 $(11,748)$167,596 
Total assets$13,280,494 $28,284 $70,789 $21,051 $13,400,618 
Goodwill936,916 2,767 — — 939,683 

142
 
Community
Banks
 Insurance 
Wealth
Management
 Other Consolidated
2018         
Net interest income$406,420
 $484
 $1,297
 $(11,676) $396,525
Provision for loan losses6,810
 
 
 
 6,810
Noninterest income120,559
 9,831
 14,537
 (966) 143,961
Noninterest expense323,439
 7,294
 13,336
 960
 345,029
Income before income taxes196,730
 3,021
 2,498
 (13,602) 188,647
Income taxes44,464
 786
 
 (3,523) 41,727
Net income (loss)$152,266
 $2,235
 $2,498
 $(10,079) $146,920
Total assets$12,828,586
 $25,798
 $60,794
 $19,700
 $12,934,878
Goodwill930,161
 2,767
 
 
 932,928
2017         
Net interest income$344,499
 $457
 $2,160
 $(10,219) $336,897
Provision for loan losses7,550
 
 
 
 7,550
Noninterest income110,308
 9,530
 12,863
 (561) 132,140
Noninterest expense281,698
 6,957
 11,785
 1,178
 301,618
Income before income taxes165,559
 3,030
 3,238
 (11,958) 159,869
Income taxes70,257
 1,184
 
 (3,760) 67,681
Net income (loss)$95,302
 $1,846
 $3,238
 $(8,198) $92,188
Total assets$9,717,779
 $26,470
 $61,330
 $24,402
 $9,829,981
Goodwill608,279
 2,767
 
 
 611,046
2016         
Net interest income$305,583
 $350
 $1,846
 $(6,788) $300,991
Provision for loan losses7,530
 
 
 
 7,530
Noninterest income114,615
 10,074
 12,354
 372
 137,415
Noninterest expense276,260
 6,873
 11,099
 867
 295,099
Income before income taxes136,408
 3,551
 3,101
 (7,283) 135,777
Income taxes46,352
 1,385
 
 (2,890) 44,847
Net income (loss)$90,056
 $2,166
 $3,101
 $(4,393) $90,930
Total assets$8,602,022
 $23,693
 $54,857
 $19,279
 $8,699,851
Goodwill467,767
 2,767
 
 
 470,534



Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements

Note 2623 – Renasant Corporation (Parent Company Only) Condensed Financial Information
(In Thousands)
Balance Sheets
  
December 31,
 20212020
Assets
Cash and cash equivalents(1)
$184,426 $129,164 
Investments2,009 7,174 
Investment in bank subsidiary(2)
2,477,917 2,306,937 
Accrued interest receivable on bank balances(2)
Intercompany receivable(2)
— 184 
Other assets28,751 22,926 
Total assets$2,693,107 $2,466,391 
Liabilities and shareholders’ equity
Junior subordinated debentures$111,373 $110,794 
Subordinated notes359,419 212,009 
Other liabilities12,462 10,855 
Shareholders’ equity2,209,853 2,132,733 
Total liabilities and shareholders’ equity$2,693,107 $2,466,391 
  
December 31,
 2018 2017
Assets   
Cash and cash equivalents(1)
$44,581
 $81,839
Investments1,662
 2,734
Loans, net640
 
Investment in bank subsidiary(2)
2,236,932
 1,618,993
Accrued interest receivable on bank balances(2)
6
 6
Intercompany receivable(2)
1,618
 4,210
Other assets18,574
 10,839
Total assets$2,304,013
 $1,718,621
Liabilities and shareholders’ equity   
Junior subordinated debentures$109,636
 $85,881
Subordinated notes147,239
 114,074
Other liabilities3,225
 3,683
Shareholders’ equity2,043,913
 1,514,983
Total liabilities and shareholders’ equity$2,304,013
 $1,718,621
(1)Eliminates in consolidation, with the exception of $1,857 and $844, in 2021 and 2020, respectively, pledged for collateral and held at non-subsidiary bank
(1)Eliminates in consolidation, with the exception of $3,737 and $3,643, in 2018 and 2017, respectively, pledged for collateral and held at non-subsidiary bank
(2)Eliminates in consolidation
(2)Eliminates in consolidation
Statements of Income
  
Year Ended December 31,
 202120202019
Income
Dividends from bank subsidiary(1)
$80,965 $81,443 $132,563 
Interest income from bank subsidiary(1)
Other dividends80 93 175 
Other income32 74 138 
Total income81,084 81,619 132,885 
Expenses18,661 15,179 16,050 
Income before income tax benefit and equity in undistributed net income of bank subsidiary62,423 66,440 116,835 
Income tax benefit(4,795)(3,889)(4,077)
Equity in undistributed net income of bank subsidiary(1)
108,674 13,322 46,684 
Net income$175,892 $83,651 $167,596 
  
Year Ended December 31,
 2018 2017 2016
Income     
Dividends from bank subsidiary(1)
$53,381
 $34,416
 $29,733
Interest income from bank subsidiary(1)
8
 8
 8
Other dividends137
 94
 469
Other income121
 588
 1,275
Total income53,647
 35,106
 31,485
Expenses13,869
 12,649
 9,036
Income before income tax benefit and equity in undistributed net income of bank subsidiary39,778
 22,457
 22,449
Income tax benefit(3,523) (3,761) (2,890)
Equity in undistributed net income of bank subsidiary(1)
103,619
 65,970
 65,591
Net income$146,920
 $92,188
 $90,930
(1)Eliminates in consolidation
(1)Eliminates in consolidation
 

143


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 26 -23 – Renasant Corporation (Parent Company Only) Condensed Financial Information (continued)



Statements of Cash Flows
  
Year Ended December 31,
 202120202019
Operating activities
Net income$175,892 $83,651 $167,596 
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed net income of bank subsidiary(108,674)(13,322)(46,684)
Amortization/depreciation (accretion)891 692 (76)
Increase in other assets(5,628)(256)(2,678)
Increase in other liabilities6,952 10,932 10,872 
Net cash provided by operating activities69,433 81,697 129,030 
Investing activities
Purchases of securities available for sale— (6,104)— 
Sales and maturities of securities and available for sale5,100 541 42 
Other investing activities(100,000)— 632 
Net cash (used in) provided by investing activities(94,900)(5,563)674 
Financing activities
Cash paid for dividends(50,017)(50,134)(50,901)
Repurchase of shares in connection with stock repurchase program(21,315)(24,569)(62,944)
Repayment of long-term debt(45,000)— (30,973)
Proceeds from issuance of long-term debt197,061 98,266 — 
Net cash provided by (used in) financing activities80,729 23,563 (144,818)
Increase (decrease) in cash and cash equivalents55,262 99,697 (15,114)
Cash and cash equivalents at beginning of year129,164 29,467 44,581 
Cash and cash equivalents at end of year$184,426 $129,164 $29,467 

  
Year Ended December 31,
 2018 2017 2016
Operating activities     
Net income$146,920
 $92,188
 $90,930
Adjustments to reconcile net income to net cash provided by operating activities:     
Gain on sale of securities
 
 (1,186)
Equity in undistributed net income of bank subsidiary(103,619) (65,970) (65,591)
Amortization/depreciation/accretion160
 656
 560
Decrease (increase) in other assets3,381
 (1,069) (556)
(Decrease) increase in other liabilities(171) (2,291) 564
Net cash provided by operating activities46,671
 23,514
 24,721
Investing activities     
Purchases of securities held to maturity and available for sale
 
 (1,380)
Sales and maturities of securities held to maturity and available for sale1,052
 1,555
 6,101
Investment in subsidiaries
 (25,000) (75,000)
Net cash (paid) received in acquisition(34,836) 4,834
 
Other investing activities423
 (54) 
Net cash used in investing activities(33,361) (18,665) (70,279)
Financing activities     
Cash paid for dividends(43,614) (34,416) (29,734)
Cash received on exercise of stock-based compensation201
 173
 415
Excess tax benefits from exercise of stock options
 
 2,771
Repurchase of shares in connection with stock repurchase program(7,062) 
 
Repayment of long-term debt
 (10,310) 
Proceeds from issuance of long-term debt
 
 98,127
Proceeds from equity offering
 
 84,105
Other financing activities(93) 310
 
Net cash (used in) provided by financing activities(50,568) (44,243) 155,684
(Decrease) increase in cash and cash equivalents(37,258) (39,394) 110,126
Cash and cash equivalents at beginning of year81,839
 121,233
 11,107
Cash and cash equivalents at end of year$44,581
 $81,839
 $121,233
Note 2724Revenue RecognitionLeases
(In Thousands)


The Company adopted ASU 2014-09, an updateenters into leases in both lessor and lessee capacities.

Lessor Arrangements
As of December 31, 2021 and 2020, the net investment in these leases was $24,979 and $20,804, comprised of $19,646 and $16,012 in lease receivables, $8,323 and $7,532 in residual balances and $2,990 and $2,740 in deferred income, respectively. In order to ASC 606, “Revenue from Contracts with Customers” (“ASC 606”), in the first quarter of 2018. The majority of the Company’s revenue streams are governed by other authoritative guidance and, therefore, considered out-of-scope of ASC 606. The Company’s revenue streams that are considered in-scope of ASC 606 are discussed below.
ASC 606 requires costs that are incrementalmitigate potential exposure to obtaining a contract to be capitalized. In the case ofresidual asset risk, the Company these costs include sales commissions for insuranceutilizes first amendment or terminal rental adjustment clause leases.

For the twelve months ended December 31, 2021 and wealth management products. ASC 606 has established, and2020, the Company has utilized, a practical expedient allowing costs that, if capitalized, would have an amortization periodgenerated $698 and $554 in income from these leases, respectively, which is included in interest income on loans on the Consolidated Statements of one year or less to instead be expensed as incurred.Income.
144


Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 2724Revenue RecognitionLeases (continued)



Service Charges on Deposit Accounts
Service charges on deposit accounts include maintenance fees on accounts, per item charges, account enhancement charges for additional packaged benefits and overdraft fees. The contracts with deposit account customers are day-to-day contracts and are considered to be terminable at will by either party. Therefore, the fees are all considered to be earned when charged and simultaneously collected.
Fees and Commissions
Fees and commissions include fees related to deposit services, such as ATM fees and interchange fees on debit card transactions. These fees are earned at a point in time as the services are rendered, and therefore the related revenue is recognized as Company’s performance obligation is satisfied.
Insurance Commissions
Through Renasant Insurance, we offer a range of commercial and personal insurance products through major insurance carriers, which include health and life insurance and property and casualty insurance. Insurance commissions are earned when policies are placed by customers with the insurance carriers and are collected and recognized using two different methods: the agency bill method and the direct bill method.
Under the agency bill method, Renasant Insurance is responsible for billing the customers directly and then collecting and remitting the premiums to the insurance carriers. Agency bill revenue is recognized at the latermaturities of the invoice date or effective datelessor arrangements outstanding at December 31, 2021 is presented in the table below.
2022$433 
2023970 
20241,335 
20251,363 
20261,173 
Thereafter19,705 
Total lease receivables$24,979 
Lessee Arrangements
As of December 31, 2021 and 2020, right-of-use assets totaled $63,547 and $66,023 and lease liabilities totaled $67,067 and $69,549, respectively. The table below provides the components of lease cost and supplemental information for the periods presented.
Year ended December 31,
20212020
Operating lease cost (cost resulting from lease payments)$8,868 $10,826 
Short-term lease cost93 161 
Variable lease cost (cost excluded from lease payments)1,195 1,776 
Sublease income(658)(583)
Net lease cost$9,498 $12,180 
Operating lease - operating cash flows (fixed payments)8,666 9,811 
Operating lease - operating cash flows (liability reduction)6,640 7,187 
Weighted average lease term - operating leases (in years) (at period end)17.2515.99
Weighted average discount rate - operating leases (at period end)3.01 %3.17 %
Right-of-use assets obtained in exchange for new lease liabilities - operating leases$8,142 $9,393 

The maturities of the policy. The Company has established a reserve for such policies which is derived from historical collection experience and updated annually. The contract balances (i.e. accounts receivable and accounts payable related to insurance commissions earned and premiums due) and the reserve establishedlessee arrangements outstanding at December 31, 2021 are considered inconsequential to the overall financial results of the Company.
Under the direct bill method, premium billing and collections are handled by the insurance carriers, and a commission is then paid to Renasant Insurance. Direct bill revenue is recognized when the cash is received from the insurance carriers. While there is recourse on these commissionspresented in the event of policy cancellations, based on the Company’s historical data, significant or material reversals of revenue based on policy cancellations are not anticipated. The Company monitors policy cancellations on a monthly basistable below.
2022$8,402 
20237,605 
20247,092 
20255,696 
20264,997 
Thereafter54,507 
Total undiscounted cash flows88,299 
Discount on cash flows21,232 
Total operating lease liabilities$67,067 
Rental expense was $8,298, $10,044, and if a significant or material set of transactions occurred, the Company will adjust earnings accordingly.$9,159 for 2021, 2020, and 2019, respectively.
The Company also earns contingency income that it recognizes on a cash basis. Contingency income is a bonus received from the insurance underwriters and is based both on commission income and claims experience on the Company’s clients’ policies during the previous year. Increases and decreases in contingency income are reflective of corresponding increases and decreases in the amount of claims paid by insurance carriers. Contingency income, which is included in “Other noninterest income” in the Consolidated Statements of Income, was $832, $816 and $1,177, respectively, for each of the twelve months ended December 31, 2018, 2017 and 2016.
Wealth Management Revenue
Wealth management consists of the Trust division and the Financial Services division. The Trust division operates on a custodial basis which includes administration of benefit plans as well as accounting and money management for trust accounts. The division manages a number of trust accounts inclusive of personal and corporate benefit accounts, self-directed IRAs, and custodial accounts. Fees for managing these accounts are based on the value of assets under management in the account, with the amount of the fee depending on the type of account. Revenue is recognized on monthly basis, and there is little to no risk of a material reversal of revenue. The contract balance (i.e. management fee receivable) recognized is considered inconsequential to the overall financial results of the Company.         
The Financial Services division provides specialized products and services to the Company’s customers, which include investment guidance relating to fixed and variable annuities, mutual funds, stocks and other investments offered through a third party provider. Fees are recognized based on either trade activity, which are recognized at the time of the trade, or assets under management, which are recognized monthly.
Sales of Other Real Estate Owned
The Company continually markets the properties included in the OREO portfolio. The Company will at times, in the ordinary course of business, provide seller-financing on sales of OREO. In cases where a sale is seller-financed, the Company must ensure the commitment of both parties to perform their respective obligations and the collectability of the transaction price in order to
Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Note 27 – Revenue Recognition (continued)

properly recognize the revenue on the sale of OREO. This is accomplished through the Company’s loan underwriting process. In this process the Company considers things such as the buyer’s initial equity in the property, the credit quality of the buyer, the financing terms of the loan and the cash flow from the property, if applicable. If it is determined that the contract criteria in ASC 606 have been met, the revenue on the sale of OREO will be recognized on the closing date of the sale when the Company has transferred title to the buyer and obtained the right to receive payment for the property. In instances where sales are not seller-financed, the Company recognizes revenue on the closing date of the sale when the Company has obtained payment for the property and transferred title to the buyer. For additionalmore information on OREO, pleaselease accounting, see Note 8, “Other Real Estate Owned.1, “Significant Accounting Policies” and on lease financing receivables, see Note 3, “Non Purchased Loans.


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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Based upon their evaluation as of December 31, 2018,2021, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) are effective for ensuring that information the Company is required to disclose in reports that it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to the Company'sCompany’s management, including its Principal Executive and Principal Financial Officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control over Financial Reporting and Attestation Report of the Independent Registered Public Accounting Firm
The information required to be provided pursuant to this item is set forth under the headings “Report on Management’s Assessment of Internal Control over Financial Reporting” and “Reports of Independent Registered Public Accounting Firm” in Item 8, Financial Statements and Supplementary Data.Data, in this report.
Changes in Internal Control over Financial Reporting
There were no changes to internal control over financial reporting during the fourth quarter of 20182021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION
None.

146


ITEM 9C. DISCLOSURES REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.
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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Executive Officers of the Company
The information appearing under the heading “Executive Officers” in the Company’s Definitive Proxy Statement for its 20192022 Annual Meeting of Shareholders is incorporated herein by reference.
Code of Ethics
The Company has adopted a code of business conduct and ethics in compliance with Item 406 of Regulation S-K that applies to the Company’s principal executive officer, principal financial officer and principal accounting officer, and controller.among others. The Company’s Code of Ethics is available on its website at www.renasant.com under the “Investor Relations” tab by clicking on “Corporate Overview,Governance,and then “Governance Documents”“Documents & Charters” and then “Code of Business Conduct and Ethics.” Any person may request a free copy of the Code of Business Conduct and Ethics from the Company by sending a request to the following address: Renasant Corporation, 209 Troy Street, Tupelo, Mississippi, 38804-4827, Attention: Chief Financial Officer.General Counsel. The Company intends to satisfy the disclosure requirement under Item 5.05(c)5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of the Company’s Code of Business Conduct and Ethics by posting such information on its website, at the address specified above.


Directors of the Company, Shareholder Recommendations of Director Candidates, Audit Committee Members and Delinquent Section 16(a) Beneficial Ownership Reporting ComplianceReports
The information appearing under the headings “Corporate Governance and the Board of Directors,” “Board Members and Compensation”Compensation - Members of the Board of Directors” and “Stock Ownership”Ownership - Delinquent Section 16(a) Reports” in the Company’s Definitive Proxy Statement for its 20192022 Annual Meeting of Shareholders is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION
The information appearing under the headings “Corporate Governance and the Board of Directors - Role of the Board in Risk Oversight,” “Board Members and Compensation - Director Compensation,” “Compensation Discussion and Analysis,” “Compensation Committee Report,” “Compensation Committee Interlocks and Insider Participation” and “Compensation Tables” in the Company’s Definitive Proxy Statement for its 20192022 Annual Meeting of Shareholders is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information appearing under the heading “Stock Ownership” in the Company’s Definitive Proxy Statement for its 20192022 Annual Meeting of Shareholders is incorporated herein by reference.

Equity Compensation Plan Information

The table below includes informationreports outstanding options, warrants and rights granted under plans approved by our shareholders and plans or arrangements that were not approved by our shareholders, as of December 31, 2018 about the Company’s equity compensation plans, both approved and not approved by the Company’s shareholders.2021. These plans and arrangements are:
Shareholder-Approved Plans: We have two shareholder-approved equity compensation plans: (1) the 2020 Long-Term Incentive Compensation Plan (the “2020 LTIP”) and (2) the 2011 Long-Term Incentive Compensation Plan, which expired on April 19, 2021 but under which the Company ceased making grants or other awards upon our shareholders’ approval of the 2020 LTIP on April 27, 2020. The 2020 LTIP authorizes the Company to make grants and awards of stock options, stock appreciation rights, restricted stock and restricted stock units to directors, officers and employees designated for participation in the plan. As of December 31, 2018, the Company’s shareholder-approved2021, an aggregate of 750,275 shares of unvested restricted stock remained outstanding under both plans, while there were no options outstanding under either plan as of such date.
Non-Shareholder Approved Plans and Arrangements: The only equity compensation plans are as follows:
Renasant Corporation 2011 Long-Term Incentive Compensationplan or arrangement currently in force that was not approved by our shareholders is our Deferred Stock Unit Plan. Under this plan, a totaldeferred compensation is used to “purchase” units representing shares of 1,737,600our common stock at fair market value. An aggregate of 467,500 shares of Company common stock are reserved for issuance; as of December 31, 2018, 2021, units representing
148


an aggregate of 970,609 shares of common stock remained available, and options to purchase an aggregate of 27,250 shares of common stock were outstanding.
Renasant Corporation 2001 Long-Term Incentive Plan. This plan expired on October 8, 2011, and no further grants or other awards may be made under the plan. As of December 31, 2018, options to purchase an aggregate of 16,500 shares of Company common stock remained outstanding.
Non-Shareholder Approved Plans and Arrangements: As of December 31, 2018, there was one equity compensation plan that was not approved by the Company’s shareholders:
Deferred Stock Unit Plan. Under this plan, an aggregate of 317,500 shares of Company common stock are reserved for issuance; as of December 31, 2018, units representing an aggregate of 245,592308,388 shares of common stock were allocated to accounts, some of which has been distributed in the form of common stock.
Equity Compensation Plan Information
(at December 31, 2021)
Plan Category(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights
(b) Weighted-average exercise price of outstanding options, warrants and rights(1)
(c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities in column (a))
Equity compensation plans approved by security holders— — 1,447,883 
Equity compensation plans not approved by security holders— — 159,111 
Total— — 1,606,994 
       
Equity Compensation Plan Information at December 31, 2018
Plan category 
(a)
    Number  of securities to    
be issued upon exercise
of outstanding options,
warrants and rights
 
(b)
Weighted-average
exercise price of
outstanding
options,
    warrants and rights(1)    
 
(c)
Number of securities
remaining available for  
future issuance under
equity
compensation
plans (excluding securities in column (a))
Equity compensation plans approved by security holders 43,750
 $15.84
 970,609
Equity compensation plans not approved by security holders 
 
 71,908
Total 43,750
 $15.84
 1,042,517
(1)Does not take into account units allocated under the Deferred Stock UnitDSU Plan.



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information appearing under the heading “Corporate Governance and the Board of Directors” in the Company’s Definitive Proxy Statement for its 20192022 Annual Meeting of Shareholders is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTINGACCOUNTANT FEES AND SERVICES
The information appearing under the heading “Independent Registered Public Accountants” in the Company’s Definitive Proxy Statement for its 20192022 Annual Meeting of Shareholders is incorporated herein by reference.

149



PART IV


ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) - (1)  Financial Statements
The following consolidated financial statements and supplementary information for the fiscal years ended December 31, 2018, 20172021, 2020 and 20162019 are included in Part II, Item 8, Financial Statements and Supplementary Data:Data, in this report:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(a) - (2) Financial Statement Schedules
All schedules have been omitted because they are either not applicable or the required information has been included in the consolidated financial statements or notes thereto.
(a) - (3) Exhibits required by Item 601 of Regulation S-K
(2)(i)
(2)(i)
(2)(ii)
(2)(iii)
(2)(iv)
(3)(i)
(3)(ii)
(4)(i)(3)(iii)
(3)(iv)
(4)(i)
(4)(ii)
(4)(iii)4(iii)
4(iv)
(4)(v)
(4)(iv)(vi)
(4)(v)(vii)
4(viii)


150


(4)(vi)4(ix)
4(x)
(4)(xi)
(4)(vii)(xii)
(10)(i)(4)(xiii)
(4)(xiv)
(4)(xv)
(10)(ii)
(10)(iii)
(10)(iv)
(10)(v)(i)
(10)(vi)(ii)
(10)(vii)(iii)
(10)(viii)(iv)
(10)(ix)(v)
(10)(x)(vi)
(10)(xi)(vii)
(10)(viii)
(10)(xii)(ix)
(10)(xiii)(x)
(10)(xiv)(xi)
(10)(xv)(xii)
(10)(xvi)(xiii)
(10)(xvii)(xiv)
(10)(xviii)


151


(10)(xix)
(10)(xv)
(10)(xx)
(10)(xxi)
(10)(xxii)
(10)(xxiii)
(10)(xxiv)
(10)(xxv)
(10)(xxvi)(xvi)
(10)(xxvii)(xvii)
(10)(xviii)
(10)(xix)
(10)(xxviii)(xx)
(10)(xxix)(xxi)
(10)(xxx)(xxii)
(10)(xxxi)(xxiii)
(10)(xxxii)(xxiv)
(10)(xxxiii)(xxv)
(10)(xxxiv)(xxvi)
(10)(xxxv)
(10)(xxxvi)


(10)(xxxvii)(xxvii)
(21)(10)(xxviii)
(10)(xxix)
(10)(xxx)
(10)(xxxi)
(10)(xxxii)
(10)(xxxiii)
(21)
152


(23)
(31)(i)
(31)(ii)
(32)(i)
(32)(ii)
(101)The following materials from Renasant Corporation’s Annual Report on Form 10-K for the year ended December 31, 20182021 were formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 20182021 and December 31, 2017,2020, (ii) Consolidated Statements of Income for the years ended December 31, 2018, 20172021, 2020 and 2016,2019, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2018, 20172021, 2020 and 2016,2019, (iv) Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2018, 20172021, 2020 and 2016,2019, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2018, 20172021, 2020 and 20162019 and (vi) Notes to Consolidated Financial Statements.
*(104)The cover page of Renasant Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021, formatted in Inline XBRL (included in Exhibit 101).
*Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Form 10-K pursuant to Item 15(b) of Form 10-K.
 
The Company does not have any long-term debt instruments under which securities are authorized exceeding ten percent of the total assets of the Company and its subsidiaries on a consolidated basis. The Company will furnish to the Securities and Exchange Commission, upon its request, a copy of all long-term debt instruments.

153



ITEM 16. FORM 10-K SUMMARY
None.

154



SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
RENASANT CORPORATION
Date:February 25, 2022RENASANT CORPORATIONby:
Date:February 27, 2019by:/s/ C. Mitchell Waycaster
C. Mitchell Waycaster
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
Date:February 27, 201925, 2022by:
/s/ Kevin D. ChapmanJames C. Mabry IV                

Kevin D. ChapmanJames C. Mabry IV
Executive Vice President andChief Financial Officer
Chief Financial and Operating Officer
(Principal Financial and Accounting Officer)
Date:February 27, 2019by:/s/ Donald Clark, Jr.
Donald Clark, Jr.
Director
Date:February 27, 2019by:/s/ John M. Creekmore
John M. Creekmore
Vice Chairman of the Board and Director
Date:February 27, 2019by:/s/ Albert J. Dale, III
Albert J. Dale, III
Director
Date:February 27, 2019by:/s/ Jill V. Deer
Jill V. Deer
Director
Date:February 27, 2019by:/s/ Marshall H. Dickerson
Marshall H. Dickerson
Director
Date:February 27, 2019by:/s/ Connie L. Engel
Connie L. Engel
Director
Date:February 27, 2019by:/s/ John T. Foy
John T. Foy
Director


Date:February 27, 201925, 2022by:
/s/ R. Rick HartKelly W. Hutcheson                

R. Rick HartKelly W. Hutcheson
Executive Vice President and DirectorChief Accounting Officer
(Principal Accounting Officer)
Date:February 27, 2019by:/s/ Richard L. Heyer, Jr.
Date:February 25, 2022by:Richard L. Heyer, Jr./s/ Gary D. Butler
DirectorGary D. Butler
Director
Date:February 27, 2019by:/s/ Neal A. Holland, Jr.
Date:February 25, 2022by:Neal A. Holland,/s/ Donald Clark, Jr.
DirectorDonald Clark, Jr.
Director
Date:February 27, 2019by:/s/ E. Robinson McGraw
Date:February 25, 2022by:E. Robinson McGraw/s/ John M. Creekmore
John M. Creekmore
Vice Chairman of the Board and Director
Date:February 27, 201925, 2022by:/s/ Albert J. Niles McNeelDale, III
Albert J. Niles McNeelDale, III
Director
Date:February 27, 201925, 2022by:/s/ Jill V. Deer
Jill V. Deer
Director
Date:February 25, 2022by:/s/ Connie L. Engel
Connie L. Engel
Director
S-1


Date:February 25, 2022by:/s/ John T. Foy
John T. Foy
Director
Date:February 25, 2022by:/s/ Richard L. Heyer, Jr.
Richard L. Heyer, Jr.
Director
Date:February 25, 2022by:/s/ Neal A. Holland, Jr.
Neal A. Holland, Jr.
Director
Date:February 25, 2022by:/s/ E. Robinson McGraw
E. Robinson McGraw
Chairman of the Board and Director
Date:February 25, 2022by:/s/ Michael D. Shmerling
Michael D. Shmerling
Director
Date:February 27, 201925, 2022by:/s/ Sean M. Suggs
Sean M. Suggs
Director
Date:February 27, 201925, 2022by:/s/ C. Mitchell Waycaster
C. Mitchell Waycaster
Director, President and
Chief Executive Officer
(Principal Executive Officer)


S-2