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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________

FORM 10-Q

________________________________________________________

(Mark One)


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~September 30, 2020~~March 31, 2021


☐			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)

________________________________________________________


Mississippi						64-0676974
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)						Identification No.)

209 Troy Street,

Tupelo,

Mississippi

38804-4827

(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:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $5.00 par value per share	RNST	The NASDAQ Stock Market LLC

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 ☒ 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Table of Contents

As of ~~October~~April 30, ~~2020, 56,195,255~~2021, 56,314,166 shares of the registrant’s common stock, $5.00 par value per share, were outstanding.

Table of Contents

Renasant Corporation and Subsidiaries

Form 10-Q

For the Quarterly Period Ended ~~September 30, 2020~~March 31, 2021

CONTENTS

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

Renasant Corporation and Subsidiaries

Consolidated Balance Sheets

(In Thousands, Except Share Data)


		(Unaudited)					(Unaudited)
		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
Assets	Assets					Assets
Cash and due from banks	Cash and due from banks	$	207,353	$	191,065	Cash and due from banks	$	206,992	$	176,372
Interest-bearing balances with banks	Interest-bearing balances with banks	206,752		223,865		Interest-bearing balances with banks	1,054,924		456,831
Cash and cash equivalents	Cash and cash equivalents	414,105		414,930		Cash and cash equivalents	1,261,916		633,203

Securities available for sale, at fair value	Securities available for sale, at fair value	1,293,388		1,290,613		Securities available for sale, at fair value	1,536,041		1,343,457
Loans held for sale, at fair value	Loans held for sale, at fair value	399,773		318,272		Loans held for sale, at fair value	502,002		417,771
Loans, net of unearned income:	Loans, net of unearned income:					Loans, net of unearned income:
Non purchased loans and leases	Non purchased loans and leases	9,424,224		7,587,974		Non purchased loans and leases	9,292,502		9,419,540
Purchased loans	Purchased loans	1,660,514		2,101,664		Purchased loans	1,395,906		1,514,107
Total loans, net of unearned income	Total loans, net of unearned income	11,084,738		9,689,638		Total loans, net of unearned income	10,688,408		10,933,647
Allowance for credit losses	Allowance for credit losses	(168,098)		(52,162)		Allowance for credit losses	(173,106)		(176,144)
Loans, net	Loans, net	10,916,640		9,637,476		Loans, net	10,515,302		10,757,503
Premises and equipment, net	Premises and equipment, net	300,400		309,697		Premises and equipment, net	300,917		300,496
Other real estate owned:	Other real estate owned:					Other real estate owned:
Non purchased	Non purchased	3,576		2,762		Non purchased	2,292		2,045
Purchased	Purchased	4,577		5,248		Purchased	3,679		3,927
Total other real estate owned, net	Total other real estate owned, net	8,153		8,010		Total other real estate owned, net	5,971		5,972
Goodwill	Goodwill	939,683		939,683		Goodwill	939,683		939,683
Other intangible assets, net	Other intangible assets, net	31,798		37,260		Other intangible assets, net	28,542		30,139
Bank-owned life insurance	Bank-owned life insurance	230,022		225,942		Bank-owned life insurance	233,508		230,609
Mortgage servicing rights	Mortgage servicing rights	57,600		53,208		Mortgage servicing rights	80,263		62,994
Other assets	Other assets	217,371		165,527		Other assets	218,426		207,785
Total assets	Total assets	$	14,808,933	$	13,400,618	Total assets	$	15,622,571	$	14,929,612
Liabilities and shareholders’ equity	Liabilities and shareholders’ equity					Liabilities and shareholders’ equity
Liabilities	Liabilities					Liabilities
Deposits	Deposits					Deposits
Noninterest-bearing	Noninterest-bearing	$	3,758,242	$	2,551,770	Noninterest-bearing	$	4,135,360	$	3,685,048
Interest-bearing	Interest-bearing	8,175,898		7,661,398		Interest-bearing	8,601,548		8,374,033
Total deposits	Total deposits	11,934,140		10,213,168		Total deposits	12,736,908		12,059,081
Short-term borrowings	Short-term borrowings	42,624		489,091		Short-term borrowings	12,154		21,340
Long-term debt	Long-term debt	475,082		376,507		Long-term debt	467,660		474,970
Other liabilities	Other liabilities	252,787		196,163		Other liabilities	232,148		241,488
Total liabilities	Total liabilities	12,704,633		11,274,929		Total liabilities	13,448,870		12,796,879
Shareholders’ equity	Shareholders’ equity					Shareholders’ equity
Preferred stock, $0.01 par value – 5,000,000 shares authorized; 0 shares issued and outstanding	Preferred stock, $0.01 par value – 5,000,000 shares authorized; 0 shares issued and outstanding	0		0		Preferred stock, $0.01 par value – 5,000,000 shares authorized; 0 shares issued and outstanding	0		0
Common stock, $5.00 par value – 150,000,000 shares authorized; 59,296,725 shares issued; 56,193,705 and 56,855,002 shares outstanding, respectively		296,483		296,483
Treasury stock, at cost – 3,103,020 and 2,441,723 shares, respectively		(101,800)		(83,189)
Common stock, $5.00 par value – 150,000,000 shares authorized; 59,296,725 shares issued; 56,294,346 and 56,200,487 shares outstanding, respectively						Common stock, $5.00 par value – 150,000,000 shares authorized; 59,296,725 shares issued; 56,294,346 and 56,200,487 shares outstanding, respectively	296,483		296,483
Treasury stock, at cost – 3,002,379 and 3,096,238 shares, respectively						Treasury stock, at cost – 3,002,379 and 3,096,238 shares, respectively	(98,949)		(101,554)
Additional paid-in capital	Additional paid-in capital	1,294,888		1,294,276		Additional paid-in capital	1,294,911		1,296,963
Retained earnings	Retained earnings	596,779		617,355		Retained earnings	661,117		615,773
Accumulated other comprehensive income, net of taxes	Accumulated other comprehensive income, net of taxes	17,950		764		Accumulated other comprehensive income, net of taxes	20,139		25,068
Total shareholders’ equity	Total shareholders’ equity	2,104,300		2,125,689		Total shareholders’ equity	2,173,701		2,132,733
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	14,808,933	$	13,400,618	Total liabilities and shareholders’ equity	$	15,622,571	$	14,929,612

See Notes to Consolidated Financial Statements.

Table of Contents

Renasant Corporation and Subsidiaries

Consolidated Statements of Income (Unaudited)

(In Thousands, Except Share Data)

Three Months Ended Nine Months Ended
September 30, September 30,
2020 2019 2020 2019
Interest income
Loans $ 114,914 $ 124,476 $ 351,192 $ 377,788
Securities
Taxable 5,499 7,218 19,219 22,874
Tax-exempt 1,573 1,292 4,697 3,992
Other 92 1,490 1,098 4,778
Total interest income 122,078 134,476 376,206 409,432
Interest expense
Deposits 11,810 21,514 44,175 62,277
Borrowings 3,982 4,137 13,361 12,383
Total interest expense 15,792 25,651 57,536 74,660
Net interest income 106,286 108,825 318,670 334,772
Provision for credit losses on loans 23,100 1,700 76,350 4,100
Net interest income after provision for credit losses on loans 83,186 107,125 242,320 330,672
Noninterest income
Service charges on deposit accounts 7,486 8,992 23,388 26,699
Fees and commissions 3,402 3,090 9,427 16,608
Insurance commissions 2,681 2,508 6,797 6,814
Wealth management revenue 4,364 3,588 12,190 10,513
Mortgage banking income 49,714 15,710 110,739 42,731
Net gain on sales of securities 0 343 31 348
BOLI income 1,267 1,734 3,759 4,481
Other 2,014 1,988 6,337 7,604
Total noninterest income 70,928 37,953 172,668 115,798
Noninterest expense
Salaries and employee benefits 75,406 65,425 227,956 183,100
Data processing 5,259 4,980 15,312 14,584
Net occupancy and equipment 13,296 12,943 40,927 36,322
Other real estate owned 1,033 418 2,071 1,674
Professional fees 3,197 2,976 8,355 7,861
Advertising and public relations 2,240 3,318 8,560 8,833
Intangible amortization 1,733 1,996 5,462 6,159
Communications 2,319 2,310 6,698 6,553
Extinguishment of debt 28 54 118 54
Merger and conversion related expenses 0 24 0 203
Other 11,999 2,056 34,377 13,279
Total noninterest expense 116,510 96,500 349,836 278,622
Income before income taxes 37,604 48,578 65,152 167,848
Income taxes 7,612 11,132 13,022 38,667
Net income $ 29,992 $ 37,446 $ 52,130 $ 129,181
Basic earnings per share $ 0.53 $ 0.65 $ 0.93 $ 2.21
Diluted earnings per share $ 0.53 $ 0.64 $ 0.92 $ 2.21
Cash dividends per common share $ 0.22 $ 0.22 $ 0.66 $ 0.65

~~Table of Contents~~


	Three Months Ended
	March 31,
		2021		2020
Interest income
Loans		$	115,005	$	120,606
Securities
Taxable		4,917		7,302
Tax-exempt		1,657		1,454
Other		183		811
Total interest income		121,762		130,173
Interest expense
Deposits		8,279		18,494
Borrowings		3,835		5,077
Total interest expense		12,114		23,571
Net interest income		109,648		106,602
Provision for loan losses		0		26,350
Provision for other credit losses		0		0
Provision for credit losses		0		26,350
Net interest income after provision for credit losses		109,648		80,252
Noninterest income
Service charges on deposit accounts		8,023		9,070
Fees and commissions		3,900		3,054
Insurance commissions		2,237		1,991
Wealth management revenue		4,792		4,002
Mortgage banking income		50,733		15,535
Net gain on sales of securities		1,357		0
BOLI income		2,072		1,163
Other		7,923		2,755
Total noninterest income		81,037		37,570
Noninterest expense
Salaries and employee benefits		78,696		73,189
Data processing		5,451		5,006
Net occupancy and equipment		12,538		14,120
Other real estate owned		41		418
Professional fees		2,921		2,641
Advertising and public relations		3,252		3,400
Intangible amortization		1,598		1,895
Communications		2,292		2,198

Restructuring charges		292		0


Other		8,854		12,174
Total noninterest expense		115,935		115,041
Income before income taxes		74,750		2,781
Income taxes		16,842		773
Net income		$	57,908	$	2,008


Basic earnings per share		$	1.03	$	0.04
Diluted earnings per share		$	1.02	$	0.04
Cash dividends per common share		$	0.22	$	0.22

See Notes to Consolidated Financial Statements.

Table of Contents

Renasant Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income (Unaudited)

(In Thousands)


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30,				September 30,					March 31,
		2020		2019		2020		2019				2021		2020
Net income	Net income	$	29,992	$	37,446	$	52,130	$	129,181	Net income		$	57,908	$	2,008
Other comprehensive income, net of tax:	Other comprehensive income, net of tax:									Other comprehensive income, net of tax:
Securities available for sale:	Securities available for sale:									Securities available for sale:
Unrealized holding gains (losses) on securities		388		(62)		19,685		20,648
Reclassification adjustment for gains (losses) realized in net income		0		1,876		(23)		1,872
Unrealized holding (losses) gains on securities										Unrealized holding (losses) gains on securities		(14,943)		16,694
Reclassification adjustment for gains realized in net income										Reclassification adjustment for gains realized in net income		(1,012)		0

Total securities available for sale	Total securities available for sale	388		1,814		19,662		22,520		Total securities available for sale		(15,955)		16,694
Derivative instruments:	Derivative instruments:									Derivative instruments:
Unrealized holding gains (losses) on derivative instruments	Unrealized holding gains (losses) on derivative instruments	1,175		(708)		(2,621)		(3,164)		Unrealized holding gains (losses) on derivative instruments		10,984		(3,003)

Total derivative instruments	Total derivative instruments	1,175		(708)		(2,621)		(3,164)		Total derivative instruments		10,984		(3,003)
Defined benefit pension and post-retirement benefit plans:	Defined benefit pension and post-retirement benefit plans:									Defined benefit pension and post-retirement benefit plans:

Amortization of net actuarial loss recognized in net periodic pension cost	Amortization of net actuarial loss recognized in net periodic pension cost	48		78		145		234		Amortization of net actuarial loss recognized in net periodic pension cost		42		46
Total defined benefit pension and post-retirement benefit plans	Total defined benefit pension and post-retirement benefit plans	48		78		145		234		Total defined benefit pension and post-retirement benefit plans		42		46
Other comprehensive income, net of tax		1,611		1,184		17,186		19,590
Other comprehensive (loss) income, net of tax										Other comprehensive (loss) income, net of tax		(4,929)		13,737
Comprehensive income	Comprehensive income	$	31,603	$	38,630	$	69,316	$	148,771	Comprehensive income		$	52,979	$	15,745

See Notes to Consolidated Financial Statements.

Table of Contents

Renasant Corporation and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited)

(In Thousands, Except Share Data)


		Common Stock			Treasury Stock				Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income				Total			Common Stock						Treasury Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Nine Months Ended September 30, 2020		Shares	Amount
Balance at January 1, 2020		56,855,002	$	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)
Three Months Ended March 31, 2021																			Three Months Ended March 31, 2021	Shares			Amount			Treasury Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance at January 1, 2021																			Balance at January 1, 2021	56,200,487			$	296,483

Net income	Net income	—	—		—				—		2,008		—				2,008		Net income	—			—					—			—			57,908			—			57,908
Other comprehensive income		—	—		—				—		—		13,737				13,737
Comprehensive income																	15,745
Cash dividends ($0.22 per share)		—	—		—				—		(12,555)		—				(12,555)
Repurchase of shares in connection with stock repurchase program		(818,886)	—		(24,569)				—		—		—				(24,569)

Issuance of common stock for stock-based compensation awards		104,902	—		4,138				(5,587)		—		—				(1,449)
Stock-based compensation expense		—	—		—				2,750		—		—				2,750

Balance at March 31, 2020		56,141,018	$	296,483	$	(103,620)			$	1,291,439	$	571,709	$	14,501			$	2,070,512
Net income		—	—		—				—		20,130		—				20,130
Other comprehensive income		—	—		—				—		—		1,838				1,838
Other comprehensive loss																			Other comprehensive loss	—			—			—			—			—			(4,929)			(4,929)
Comprehensive income	Comprehensive income																21,968		Comprehensive income																			52,979
Cash dividends ($0.22 per share)	Cash dividends ($0.22 per share)	—	—		—				—		(12,525)		—				(12,525)		Cash dividends ($0.22 per share)	—			—			—			—			(12,564)			—			(12,564)

Issuance of common stock for stock-based compensation awards	Issuance of common stock for stock-based compensation awards	40,944	—		1,397				(1,404)		—		—				(7)		Issuance of common stock for stock-based compensation awards	93,859			—			2,605			(4,808)			—			—			(2,203)
Stock-based compensation expense	Stock-based compensation expense	—	—		—				2,998		—		—				2,998		Stock-based compensation expense	—			—			—			2,756			—			—			2,756

Balance at June 30, 2020		56,181,962	$	296,483	$	(102,223)			$	1,293,033	$	579,314	$	16,339			$	2,082,946
Net income		—	—		—				—		29,992		—				29,992
Other comprehensive income		—	—		—				—		—		1,611				1,611
Comprehensive income																	31,603
Cash dividends ($0.22 per share)		—	—		—				—		(12,527)		—				(12,527)
Balance at March 31, 2021																			Balance at March 31, 2021	56,294,346			$	296,483		$	(98,949)		$	1,294,911		$	661,117		$	20,139		$	2,173,701

Issuance of common stock for stock-based compensation awards		11,743	—		423				(550)		—		—				(127)
Stock-based compensation expense		—	—		—				2,405		—		—				2,405

Balance at September 30, 2020		56,193,705	$	296,483	$	(101,800)			$	1,294,888	$	596,779	$	17,950			$	2,104,300

~~Table of Contents~~


		Common Stock			Treasury Stock				Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)				Total			Common Stock						Treasury Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total
Nine Months Ended September 30, 2019		Shares	Amount
Balance at January 1, 2019		58,546,480	$	296,483			$	(24,245)			$	1,288,911			$	500,660					$	(17,896)		$	2,043,913
Net income		—	—		—				—		45,110		—				45,110
Other comprehensive income		—	—		—				—		—		10,446				10,446
Comprehensive income																	55,556
Cash dividends ($0.21 per share)		—	—		—				—		(12,442)		—				(12,442)

Issuance of common stock for stock-based compensation awards		87,150	—		2,655				(3,442)		—		—				(787)
Stock-based compensation expense		—	—		—				2,637		—		—				2,637

Balance at March 31, 2019		58,633,630	$	296,483	$	(21,590)			$	1,288,106	$	533,328	$	(7,450)			$	2,088,877
Three Months Ended March 31, 2020																			Three Months Ended March 31, 2020	Shares			Amount			Treasury Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total
Balance at January 1, 2020																			Balance at January 1, 2020	56,855,002			$	296,483
Cumulative effect adjustment due to the adoption of ASU 2016-13																			Cumulative effect adjustment due to the adoption of ASU 2016-13	—			—					—			—		(35,099)		—		(35,099)
Net income	Net income	—	—		—				—		46,625		—				46,625		Net income	—			—			—			—		2,008		—		2,008
Other comprehensive income	Other comprehensive income	—	—		—				—		—		7,960				7,960		Other comprehensive income	—			—			—			—		—		13,737		13,737
Comprehensive income	Comprehensive income																54,585		Comprehensive income																15,745
Cash dividends ($0.22 per share)	Cash dividends ($0.22 per share)	—	—		—				—		(12,971)		—				(12,971)		Cash dividends ($0.22 per share)	—			—			—			—		(12,555)		—		(12,555)
Repurchase of shares in connection with stock repurchase program	Repurchase of shares in connection with stock repurchase program	(363,704)	—		(12,938)				—		—		—				(12,938)		Repurchase of shares in connection with stock repurchase program	(818,886)			—			(24,569)			—		—		—		(24,569)

Issuance of common stock for stock-based compensation awards	Issuance of common stock for stock-based compensation awards	27,744	—		893				(832)		—		—				61		Issuance of common stock for stock-based compensation awards	104,902			—			4,138			(5,587)		—		—		(1,449)
Stock-based compensation expense	Stock-based compensation expense	—	—		—				2,082		—		—				2,082		Stock-based compensation expense	—			—			—			2,750		—		—		2,750

Balance at June 30, 2019		58,297,670	$	296,483	$	(33,635)			$	1,289,356	$	566,982	$	510			$	2,119,696
Net income		—	—		—				—		37,446		—				37,446
Other comprehensive income		—	—		—				—		—		1,184				1,184
Comprehensive income																	38,630
Cash dividends ($0.22 per share)		—	—		—				—		(12,829)		—				(12,829)
Repurchase of shares in connection with stock repurchase program		(851,421)	—		(28,707)				—		—		—				(28,707)
Balance at March 31, 2020																			Balance at March 31, 2020	56,141,018			$	296,483		$	(103,620)		$	1,291,439	$	571,709	$	14,501	$	2,070,512

Issuance of common stock for stock-based compensation awards		9,057	—		298				(431)		—		—				(133)
Stock-based compensation expense		—	—		—				3,002		—		—				3,002

Balance at September 30, 2019		57,455,306	$	296,483	$	(62,044)			$	1,291,927	$	591,599	$	1,694			$	2,119,659

See Notes to Consolidated Financial Statements.

Table of Contents

Renasant Corporation and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

(In Thousands)


		Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019			2021		2020
Operating activities	Operating activities					Operating activities
Net income	Net income	$	52,130	$	129,181	Net income	$	57,908	$	2,008
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses on loans		76,350		4,100
Adjustments to reconcile net income to net cash used in operating activities:						Adjustments to reconcile net income to net cash used in operating activities:
Provision for credit losses						Provision for credit losses	0		26,350
Depreciation, amortization and accretion	Depreciation, amortization and accretion	22,727		5,826		Depreciation, amortization and accretion	10,059		4,937
Deferred income tax (benefit) expense		(8,494)		13,911
Deferred income tax expense (benefit)						Deferred income tax expense (benefit)	5,542		(2,791)
Funding of mortgage loans held for sale	Funding of mortgage loans held for sale	(3,277,576)		(1,680,729)		Funding of mortgage loans held for sale	(1,143,349)		(715,760)
Proceeds from sales of mortgage loans held for sale	Proceeds from sales of mortgage loans held for sale	3,310,402		1,543,544		Proceeds from sales of mortgage loans held for sale	1,082,538		607,017
Gains on sales of mortgage loans held for sale	Gains on sales of mortgage loans held for sale	(114,327)		(35,416)		Gains on sales of mortgage loans held for sale	(33,901)		(21,782)
Valuation adjustment to mortgage servicing rights	Valuation adjustment to mortgage servicing rights	13,694		3,132		Valuation adjustment to mortgage servicing rights	(13,561)		9,571
Gains on sales of securities	Gains on sales of securities	(31)		(348)		Gains on sales of securities	(1,357)		0
Penalty on prepayment of debt		118		54
Loss (gains) on sales of premises and equipment		35		(1,062)

Gains on sales of premises and equipment						Gains on sales of premises and equipment	(22)		0
Stock-based compensation expense	Stock-based compensation expense	8,153		7,721		Stock-based compensation expense	2,756		2,750
Net change in other loans held for sale		0		59,885

Increase in other assets	Increase in other assets	(87,405)		(12,397)		Increase in other assets	(11,800)		(70,631)
Increase (decrease) in other liabilities		48,269		(7,520)
Net cash provided by operating activities		44,045		29,882
(Decrease) increase in other liabilities						(Decrease) increase in other liabilities	(11,601)		35,331
Net cash used in operating activities						Net cash used in operating activities	(56,788)		(123,000)
Investing activities	Investing activities					Investing activities
Purchases of securities available for sale	Purchases of securities available for sale	(304,955)		(366,265)		Purchases of securities available for sale	(465,245)		(123,670)
Proceeds from sales of securities available for sale	Proceeds from sales of securities available for sale	8,773		212,485		Proceeds from sales of securities available for sale	155,391		0
Proceeds from call/maturities of securities available for sale	Proceeds from call/maturities of securities available for sale	314,363		192,520		Proceeds from call/maturities of securities available for sale	95,382		76,269

Net increase in loans		(1,383,382)		(93,761)
Net decrease (increase) in loans						Net decrease (increase) in loans	243,250		(69,337)
Purchases of premises and equipment	Purchases of premises and equipment	(6,824)		(23,968)		Purchases of premises and equipment	(2,630)		(1,941)
Proceeds from sales of premises and equipment	Proceeds from sales of premises and equipment	0		2,246		Proceeds from sales of premises and equipment	34		0
Net change in FHLB stock	Net change in FHLB stock	10,607		6,389		Net change in FHLB stock	(24)		(12,432)
Proceeds from sales of other assets	Proceeds from sales of other assets	6,020		17,250		Proceeds from sales of other assets	1,962		770

Other, net	Other, net	0		917		Other, net	1,346		0
Net cash used in investing activities		(1,355,398)		(52,187)
Net cash provided by (used in) investing activities						Net cash provided by (used in) investing activities	29,466		(130,341)
Financing activities	Financing activities					Financing activities
Net increase in noninterest-bearing deposits	Net increase in noninterest-bearing deposits	1,206,472		288,350		Net increase in noninterest-bearing deposits	450,312		90,289
Net increase (decrease) in interest-bearing deposits		514,646		(129,873)
Net decrease in short-term borrowings		(446,467)		(182,104)
Proceeds from the issuance of long-term debt, net of issuance costs		98,299		0
Net increase in interest-bearing deposits						Net increase in interest-bearing deposits	227,515		109,115
Net (decrease) increase in short-term borrowings						Net (decrease) increase in short-term borrowings	(9,186)		313,946

Repayment of long-term debt	Repayment of long-term debt	(246)		(33,631)		Repayment of long-term debt	(42)		(43)
Cash paid for dividends	Cash paid for dividends	(37,607)		(38,242)		Cash paid for dividends	(12,564)		(12,555)
Repurchase of shares in connection with stock repurchase program	Repurchase of shares in connection with stock repurchase program	(24,569)		(41,645)		Repurchase of shares in connection with stock repurchase program	0		(24,569)

Net cash provided by (used in) financing activities		1,310,528		(137,145)
Net decrease in cash and cash equivalents		(825)		(159,450)
Net cash provided by financing activities						Net cash provided by financing activities	656,035		476,183
Net increase in cash and cash equivalents						Net increase in cash and cash equivalents	628,713		222,842
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	414,930		569,111		Cash and cash equivalents at beginning of period	633,203		414,930
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	414,105	$	409,661	Cash and cash equivalents at end of period	$	1,261,916	$	637,772

Supplemental disclosures	Supplemental disclosures					Supplemental disclosures
Cash paid for interest	Cash paid for interest	$	61,351	$	75,720	Cash paid for interest	$	15,108	$	26,264
Cash paid for income taxes	Cash paid for income taxes	$	26,148	$	25,892	Cash paid for income taxes	$	18,032	$	4,176
Noncash transactions:	Noncash transactions:					Noncash transactions:
Transfers of loans to other real estate owned	Transfers of loans to other real estate owned	$	7,887	$	3,613	Transfers of loans to other real estate owned	$	2,039	$	1,641
Financed sales of other real estate owned	Financed sales of other real estate owned	$	151	$	254	Financed sales of other real estate owned	$	0	$	159
Transfers of mortgage loans held for sale to loans held for investment		$	0	$	189
Transfers of other loans held for sale to loans held for investment		$	0	$	134,335

Recognition of operating right-of-use assets	Recognition of operating right-of-use assets	$	4,151	$	89,770	Recognition of operating right-of-use assets	$	3,601	$	1,968
Recognition of operating lease liabilities	Recognition of operating lease liabilities	$	4,151	$	93,289	Recognition of operating lease liabilities	$	3,601	$	2,034

~~Table of Contents~~

See Notes to Consolidated Financial Statements.

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 1 – Summary of Significant Accounting Policies

(In Thousands)

Nature of Operations: Renasant Corporation (referred to herein as the “Company”) owns and operates Renasant Bank (“Renasant Bank” or the “Bank”), Renasant Insurance, Inc. ~~(“Renasant Insurance”)~~ and Park Place Capital Corporation. ~~The~~Through its subsidiaries, the Company offers a diversified range of financial, wealth management, fiduciary and insurance services to its retail and commercial customers ~~through its subsidiaries and full-service~~from full service offices located throughout ~~north and central~~ Mississippi, Tennessee, Alabama, Georgia, ~~Alabama~~Florida, North Carolina and ~~north Florida.~~South Carolina.

Basis of Presentation: The accompanying unaudited consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. ~~Certain prior year amounts have been reclassified to conform to the current year presentation.~~ For further information regarding the Company’s significant accounting policies, refer to the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 filed with the Securities and Exchange Commission on February ~~27, 2020.~~26, 2021.

Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates, and such differences may be material.

Impact of Recently-Issued Accounting Standards and Pronouncements:

In ~~June 2016,~~March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ~~2016-13,~~ ~~“Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”~~ ~~(“ASU 2016-13”), which updated Accounting Standards Codification Topic (“ASC”) 326,~~ ~~Financial Instruments - Credit Losses~~ (“ASC 326”). ASU 2016-13 significantly changed 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 includes loans, held-to-maturity debt instruments, lease receivables, loan commitments and financial guarantees that are not accounted for at fair value. Additionally, ASU 2016-13 amended the accounting for credit losses on available for sale securities and purchased financial assets with credit deterioration (“PCD”). In the remainder of these Notes to Consolidated Financial Statements, unless the context clearly provides otherwise, references to “CECL” or to “ASC 326” shall mean the accounting standards and principles set forth in ASC 326 after giving effect to ASU 2016-13 and the clarifications thereto discussed in the next paragraph.

Over the course of 2018 and 2019, FASB issued a number of updates clarifying various matters arising under ASU 2016-13, including the following: (1) ASU 2018-19 was issued to clarify that receivables arising from operating leases are not within the scope of Subtopic 326-20; instead, impairment of receivables arising from operating leases should be accounted for in accordance with ASC 842, ~~Leases~~ (“ASC 842”); (2) ASU 2019-04 provides entities alternatives for measurement of accrued interest receivable, clarifies the steps entities should take when recording the transfer of loans or debt securities between measurement classifications or categories and clarifies that entities should include expected recoveries on financial assets; (3) ASU 2019-05 was issued to provide entities that have certain instruments within the scope of Subtopic 320-20 with an option to irrevocably elect the fair value option in Subtopic 825-10; and (4) ASU 2019-11 was issued to address stakeholders’ specific issues relating to expected recoveries on PCD assets and transition and disclosure relief related to troubled debt restructured loans and accrued interest, respectively.

~~ASU 2016-13~~ became effective on January 1, 2020 for publicly-traded companies like the Company, and the Company elected not to take advantage of federal legislation enacted in March 2020 allowing it to postpone the adoption of CECL. To implement CECL, entities are required to apply a one-time cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption, as disclosed in the table below.

~~Table of Contents~~

December 31, 2019
(as reported) Impact of ASU 2016-13 Adoption January 1, 2020
(adjusted)
Assets:
Allowance for credit losses $ (52,162) $ (42,484) $ (94,646)
Deferred tax assets, net $ 27,282 $ 12,305 $ 39,587
Remaining purchase discount on loans $ (50,958) $ 5,469 $ (45,489)
Liabilities:
Reserve for unfunded commitments $ 946 $ 10,389 $ 11,335
Shareholders’ equity:
Retained earnings $ 617,355 $ (35,099) $ 582,256

~~The Company used the prospective transition approach for PCD loans that were previously classified as purchased credit impaired (“PCI”) and accounted for under ASC 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality~~” (“ASC 310-30”). As permitted under ASC 326, the Company did not reassess whether PCI assets meet the criteria of PCD assets as of the date of adoption. As shown in the table above, the amortized cost basis of the PCD assets was adjusted to reflect the addition of $5,469 to the allowance for credit losses. The remaining noncredit discount will be accreted into interest income.

The prospective transition approach was also used for debt securities for which other-than-temporary impairment had been recognized prior to January 1, 2020. As a result, the amortized cost basis remained the same before and after the effective date of the adoption of CECL.

Additionally, the Company has elected to exclude accrued interest receivable from the amortized cost of loans. As of September 30, 2020, the Company has accrued interest receivable for loans of $56,382, which is recorded in other assets on the Consolidated Balance Sheets.

~~In January 2017, FASB issued ASU 2017-04,~~ ~~“Intangibles - Goodwill and Other (Topic 350)”~~ (“ASU 2017-04”), which amends and simplifies current goodwill impairment testing by eliminating certain testing under the earlier provisions. Under the new guidance, an entity performs the goodwill impairment test by comparing the fair value of a reporting unit with its carrying value and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if a quantitative impairment test is necessary. ASU 2017-04 was adopted on January 1, 2020 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”), which 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 was adopted on January 1, 2020 and did not have a material impact on the Company’s financial statements.

~~In March 2019, FASB issued ASU 2019-01,~~ ~~“Leases (Topic 842): Codification Improvements”~~ (“ASU 2019-01”), which is intended to clarify potential implementation questions related to ASC 842. This includes clarification on the determination of fair value of underlying assets by lessors that are not manufacturers or dealers, cash flow presentation of sales-type and direct financing leases and transition disclosures related to accounting changes and error corrections. ASU 2019-01 was adopted on January 1, 2020 and did not have a material impact on the Company’s financial statements.

~~In March 2020, FASB issued ASU~~ 2020-04, “Reference Rate Reform (Topic 842): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”), which provides temporary, optional guidance to ease the potential burden in accounting for reference rate reform on financial reporting. ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions if certain criteria are met that reference LIBOR or another reference rate expected to be discontinued. As the guidance is intended to assist stakeholders during the global market-wide reference rate transition period, it is in effect only from March 12, 2020 through December 31, 2022. The Company has established a LIBOR Transition Committee and is currently evaluating the impact of adopting ASU 2020-04 on the ~~Company's~~Company’s financial statements.

106

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 2 – Securities

(In Thousands, Except Number of Securities)

The amortized cost and fair value ~~and allowance for credit losses~~ of securities available for sale were as follows as of the dates ~~presented:~~presented in the tables below. There was no allowance for credit losses allocated to any of the Company’s available for sale securities as of March 31, 2021 or December 31, 2020.


		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2020
March 31, 2021												March 31, 2021
U.S. Treasury securities	U.S. Treasury securities	$	7,067	$	45	$	0	$	0	$	7,112	U.S. Treasury securities	$	3,028	$	22	$	0	$	3,050
Obligations of other U.S. Government agencies and corporations	Obligations of other U.S. Government agencies and corporations	1,505		10		0		0		1,515		Obligations of other U.S. Government agencies and corporations	1,001		3		0		1,004
Obligations of states and political subdivisions	Obligations of states and political subdivisions	267,067		11,224		(651)		0		277,640		Obligations of states and political subdivisions	321,156		9,344		(1,682)		328,818
Residential mortgage backed securities:	Residential mortgage backed securities:											Residential mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	649,383		23,601		(64)		0		672,920		Government agency mortgage backed securities	453,792		14,869		(2,206)		466,455
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	133,993		2,181		(29)		0		136,145		Government agency collateralized mortgage obligations	538,317		1,733		(4,718)		535,332
Commercial mortgage backed securities:	Commercial mortgage backed securities:											Commercial mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	29,198		1,316		(1)		0		30,513		Government agency mortgage backed securities	22,448		580		(23)		23,005
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	90,523		3,306		(77)		0		93,752		Government agency collateralized mortgage obligations	115,103		1,889		(1,814)		115,178
Trust preferred securities		12,042		0		(3,550)		0		8,492

Other debt securities	Other debt securities	62,495		2,935		(131)		0		65,299		Other debt securities	61,113		2,126		(40)		63,199

		$	1,253,273	$	44,618	$	(4,503)	$	0	$	1,293,388		$	1,515,958	$	30,566	$	(10,483)	$	1,536,041


		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2019
December 31, 2020										December 31, 2020
U.S. Treasury securities	U.S. Treasury securities	$	498	$	1	$	0	$	499	U.S. Treasury securities	$	7,047	$	32	$	0	$	7,079
Obligations of other U.S. Government agencies and corporations	Obligations of other U.S. Government agencies and corporations	2,518		16		(3)		2,531		Obligations of other U.S. Government agencies and corporations	1,003		6		0		1,009
Obligations of states and political subdivisions	Obligations of states and political subdivisions	218,362		5,134		(365)		223,131		Obligations of states and political subdivisions	291,231		14,015		(45)		305,201
Residential mortgage backed securities:	Residential mortgage backed securities:									Residential mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	708,970		8,951		(1,816)		716,105		Government agency mortgage backed securities	581,105		21,564		(23)		602,646
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	172,178		1,322		(262)		173,238		Government agency collateralized mortgage obligations	218,373		1,946		(51)		220,268
Commercial mortgage backed securities:	Commercial mortgage backed securities:									Commercial mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	30,372		659		(24)		31,007		Government agency mortgage backed securities	29,053		1,235		(1)		30,287
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	76,456		1,404		(109)		77,751		Government agency collateralized mortgage obligations	99,377		2,992		(21)		102,348
Trust preferred securities	Trust preferred securities	12,153		0		(2,167)		9,986		Trust preferred securities	12,013		0		(3,001)		9,012
Other debt securities	Other debt securities	55,364		1,133		(132)		56,365		Other debt securities	62,771		2,909		(73)		65,607

		$	1,276,871	$	18,620	$	(4,878)	$	1,290,613		$	1,301,973	$	44,699	$	(3,215)	$	1,343,457

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Securities sold were as follows for the periods presented:




	Carrying Value		Net Proceeds		Gain/(Loss)
Three months ended March 31, 2021

Obligations of states and political subdivisions	$	47	$	50	$	3
Residential mortgage backed securities:
Government agency mortgage backed securities	136,340		139,735		3,395
Government agency collateralized mortgage obligations	5,626		5,646		20



Trust preferred securities	12,021		9,960		(2,061)


	$	154,034	$	155,391	$	1,357

There were 0 securities sold during the three months ended ~~September 30,~~March 31, 2020.

Carrying Value Net Proceeds Gain/(Loss)
Nine months ended September 30, 2020
Obligations of states and political subdivisions $ 2,696 $ 2,561 $ (135)
Residential mortgage backed securities:
Government agency mortgage backed securities 6,046 6,212 166
$ 8,742 $ 8,773 $ 31

Carrying Value Net Proceeds Gain/(Loss)
Three months ended September 30, 2019
Obligations of states and political subdivisions $ 1,112 $ 1,111 $ (1)
Residential mortgage backed securities:
Government agency mortgage backed securities 70,926 70,322 (604)
Government agency collateralized mortgage obligations 122,404 120,606 (1,798)
Commercial mortgage backed securities:
Government agency mortgage backed securities 4,838 4,720 (118)
Other debt securities 252 257 5
Other equity securities 0 2,859 2,859
$ 199,532 $ 199,875 $ 343
Nine months ended September 30, 2019
Obligations of states and political subdivisions $ 11,799 $ 11,813 $ 14
Residential mortgage backed securities:
Government agency mortgage backed securities 72,556 71,944 (612)
Government agency collateralized mortgage obligations 122,692 120,892 (1,800)
Commercial mortgage backed securities:
Government agency mortgage backed securities 4,838 4,720 (118)
Other debt securities 252 257 5
Other equity securities 0 2,859 2,859
$ 212,137 $ 212,485 $ 348

~~The sale of other equity securities represents the Company's sale of all of its shares of Visa Class B common stock during the third quarter of 2019.~~

Gross realized gains and losses on sales of securities available for sale for the three ~~and nine~~ months ended ~~September 30, 2020 and 2019~~March 31, 2021 were as follows:

Three Months Ended Nine Months Ended
September 30, September 30,
2020 2019 2020 2019
Gross gains on sales of securities available for sale $ 0 $ 2,933 $ 166 $ 2,979
Gross losses on sales of securities available for sale 0 (2,590) (135) (2,631)
Gains on sales of securities available for sale, net $ 0 $ 343 $ 31 $ 348



	Three Months Ended
	March 31,
	2021
Gross gains on sales of securities available for sale	$	3,508
Gross losses on sales of securities available for sale	(2,151)
Gains on sales of securities available for sale, net	$	1,357

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

At ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, securities with a carrying value of ~~$534,408~~$611,832 and ~~$416,849,~~$582,338, respectively, were pledged to secure government, public and trust deposits. Securities with a carrying value of ~~$36,964~~$21,256 and ~~$27,754~~$32,272 were pledged as collateral for short-term borrowings and derivative instruments at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively.

The amortized cost and fair value of securities at ~~September 30, 2020~~March 31, 2021 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						Available for Sale
			Amortized Cost		Fair Value				Amortized Cost		Fair Value
Due within one year	Due within one year		$	9,258	$	9,316	Due within one year		$	10,286	$	10,401
Due after one year through five years	Due after one year through five years		38,526		40,210		Due after one year through five years		40,177		41,896
Due after five years through ten years	Due after five years through ten years		71,434		75,283		Due after five years through ten years		66,563		69,568
Due after ten years	Due after ten years		194,270		196,052		Due after ten years		235,945		239,498
Residential mortgage backed securities:	Residential mortgage backed securities:						Residential mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities		649,383		672,920		Government agency mortgage backed securities		453,792		466,455
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations		133,993		136,145		Government agency collateralized mortgage obligations		538,317		535,332
Commercial mortgage backed securities:	Commercial mortgage backed securities:						Commercial mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities		29,198		30,513		Government agency mortgage backed securities		22,448		23,005
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations		90,523		93,752		Government agency collateralized mortgage obligations		115,103		115,178
Other debt securities	Other debt securities		36,688		39,197		Other debt securities		33,327		34,708

			$	1,253,273	$	1,293,388			$	1,515,958	$	1,536,041

138

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

The following table presents the age of gross unrealized losses and fair value by investment category for which an allowance for credit losses has not been recorded as of the dates presented:


		Less than 12 Months					12 Months or More					Total						Less than 12 Months					12 Months or More					Total
		#	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:																Available for Sale:
September 30, 2020
March 31, 2021																	March 31, 2021

Obligations of states and political subdivisions	Obligations of states and political subdivisions	28	$	45,111	$	(651)	0	$	0	$	0	28	$	45,111	$	(651)	Obligations of states and political subdivisions	41	$	97,392	$	(1,634)	1	$	2,133	$	(48)	42	$	99,525	$	(1,682)
Residential mortgage backed securities:	Residential mortgage backed securities:																Residential mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	3	21,244		(64)		0	0		0		3	21,244		(64)		Government agency mortgage backed securities	14	119,498		(2,206)		0	0		0		14	119,498		(2,206)
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	6	18,206		(29)		0	0		0		6	18,206		(29)		Government agency collateralized mortgage obligations	17	351,956		(4,718)		0	0		0		17	351,956		(4,718)
Commercial mortgage backed securities:	Commercial mortgage backed securities:																Commercial mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	1	1,546		(1)		1	465		0		2	2,011		(1)		Government agency mortgage backed securities	1	1,082		(23)		1	452		0		2	1,534		(23)
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	3	12,846		(77)		0	0		0		3	12,846		(77)		Government agency collateralized mortgage obligations	10	58,722		(1,814)		0	0		0		10	58,722		(1,814)
Trust preferred securities		0	0		0		2	8,492		(3,550)		2	8,492		(3,550)

Other debt securities	Other debt securities	12	14,833		(128)		1	575		(3)		13	15,408		(131)		Other debt securities	6	9,042		(37)		1	557		(3)		7	9,599		(40)
Total	Total	53	$	113,786	$	(950)	4	$	9,532	$	(3,553)	57	$	123,318	$	(4,503)	Total	89	$	637,692	$	(10,432)	3	$	3,142	$	(51)	92	$	640,834	$	(10,483)
December 31, 2019
Obligations of other U.S. Government agencies and corporations		0	$	0	$	0	1	$	1,008	$	(3)	1	$	1,008	$	(3)
December 31, 2020																	December 31, 2020

Obligations of states and political subdivisions	Obligations of states and political subdivisions	26	33,902		(365)		0	0		0		26	33,902		(365)		Obligations of states and political subdivisions	6	$	9,403	$	(45)	0	$	0	$	0	6	$	9,403	$	(45)
Residential mortgage backed securities:	Residential mortgage backed securities:																Residential mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	37	233,179		(1,504)		16	20,775		(312)		53	253,954		(1,816)		Government agency mortgage backed securities	2	19,755		(23)		0	0		0		2	19,755		(23)
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	11	45,319		(262)		0	0		0		11	45,319		(262)		Government agency collateralized mortgage obligations	5	27,143		(51)		0	0		0		5	27,143		(51)
Commercial mortgage backed securities:	Commercial mortgage backed securities:																Commercial mortgage backed securities:
Government agency mortgage backed securities	Government agency mortgage backed securities	1	4,976		(23)		2	1,190		(1)		3	6,166		(24)		Government agency mortgage backed securities	1	1,538		(1)		1	459		0		2	1,997		(1)
Government agency collateralized mortgage obligations	Government agency collateralized mortgage obligations	1	4,910		(109)		0	0		0		1	4,910		(109)		Government agency collateralized mortgage obligations	3	14,190		(21)		0	0		0		3	14,190		(21)
Trust preferred securities	Trust preferred securities	0	0		0		2	9,986		(2,167)		2	9,986		(2,167)		Trust preferred securities	0	0		0		2	9,012		(3,001)		2	9,012		(3,001)
Other debt securities	Other debt securities	3	8,737		(131)		1	741		(1)		4	9,478		(132)		Other debt securities	4	3,330		(70)		1	566		(3)		5	3,896		(73)

Total	Total	79	$	331,023	$	(2,394)	22	$	33,700	$	(2,484)	101	$	364,723	$	(4,878)	Total	21	$	75,359	$	(211)	4	$	10,037	$	(3,004)	25	$	85,396	$	(3,215)

The Company evaluates its investment portfolio for impairment related to credit losses on a quarterly basis. Impairment is assessed at the individual security level. The Company considers an investment security impaired if the fair value of the security is less than its cost or amortized cost basis. 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 before the security’s maturity, the security is impaired and it is written down to fair value with all losses recognized in earnings.

The Company does not intend to sell any securities in an unrealized loss position that it holds, 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 at maturity. Furthermore, even though a number of these securities have been in a continuous unrealized loss position for a period

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

longer than twelve months, the Company is collecting principal and interest payments from the respective issuers as scheduled. As a result, no allowance for credit losses for securities was needed at September 30, 2020. There was no other-than-temporary impairment recorded during the nine months ended September 30, 2019 (determined in accordance with the accounting standards in effect prior to the Company's adoption of CECL).March 31, 2021.

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 3 – Non Purchased Loans

(In Thousands, Except Number of Loans)

For purposes of this Note 3, all references to “loans” mean non purchased loans excluding loans held for sale.

The following is a summary of non purchased loans and leases as of the dates presented:


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
Commercial, financial, agricultural(1)	Commercial, financial, agricultural(1)	$	2,445,294	$	1,052,353	Commercial, financial, agricultural(1)	$	2,105,444	$	2,360,471
Lease financing	Lease financing	87,257		85,700		Lease financing	79,271		80,022
Real estate – construction:	Real estate – construction:					Real estate – construction:
Residential	Residential	261,432		272,643		Residential	252,795		243,814
Commercial	Commercial	477,441		502,258		Commercial	680,791		583,338
Total real estate – construction	Total real estate – construction	738,873		774,901		Total real estate – construction	933,586		827,152
Real estate – 1-4 family mortgage:	Real estate – 1-4 family mortgage:					Real estate – 1-4 family mortgage:
Primary	Primary	1,517,528		1,449,219		Primary	1,576,212		1,536,181
Home equity	Home equity	442,380		456,265		Home equity	432,207		432,768
Rental/investment	Rental/investment	272,811		291,931		Rental/investment	256,979		264,436
Land development	Land development	136,573		152,711		Land development	115,522		123,179
Total real estate – 1-4 family mortgage	Total real estate – 1-4 family mortgage	2,369,292		2,350,126		Total real estate – 1-4 family mortgage	2,380,920		2,356,564
Real estate – commercial mortgage:	Real estate – commercial mortgage:					Real estate – commercial mortgage:
Owner-occupied	Owner-occupied	1,316,408		1,209,204		Owner-occupied	1,344,154		1,334,765
Non-owner occupied	Non-owner occupied	2,176,562		1,803,587		Non-owner occupied	2,221,206		2,194,739
Land development	Land development	117,672		116,085		Land development	110,800		120,125
Total real estate – commercial mortgage	Total real estate – commercial mortgage	3,610,642		3,128,876		Total real estate – commercial mortgage	3,676,160		3,649,629
Installment loans to individuals	Installment loans to individuals	177,195		199,843		Installment loans to individuals	121,136		149,862
Gross loans	Gross loans	9,428,553		7,591,799		Gross loans	9,296,517		9,423,700
Unearned income	Unearned income	(4,329)		(3,825)		Unearned income	(4,015)		(4,160)
Loans, net of unearned income	Loans, net of unearned income	$	9,424,224	$	7,587,974	Loans, net of unearned income	$	9,292,502	$	9,419,540

(1)Includes Paycheck Protection Program (“PPP”) loans of $860,864 and $1,128,703 as of March 31, 2021 and December 31, 2020, respectively.

Past Due and Nonaccrual Loans

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Generally, the recognition of interest on ~~mortgage and commercial~~ loans is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Consumer and other retail loans are typically charged-off no later than the time the loan is 120 days past due. In all cases, loans are placed on nonaccrual status or charged-off at an earlier date if collection of principal or interest is considered doubtful. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. All interest accrued for the current year, but not collected, for loans that are placed on nonaccrual status or charged-off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. ~~The Company recognized $189 in interest income on nonaccrual loans during the first nine months of 2020.~~

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

The following ~~table provides~~tables provide an aging of past due accruing and nonaccruing loans, segregated by class, as of the dates presented:


		Accruing Loans								Nonaccruing Loans											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			30-89 Days Past Due		90 Days or More Past Due		Current Loans		Total Loans		30-89 Days Past Due		90 Days or More Past Due		Current Loans		Total Loans		Total Loans
September 30, 2020
March 31, 2021																				March 31, 2021
Commercial, financial, agricultural	Commercial, financial, agricultural	$	876	$	288	$	2,439,040	$	2,440,204	$	650	$	2,666	$	1,774	$	5,090	$	2,445,294	Commercial, financial, agricultural	$	685	$	555	$	2,098,742	$	2,099,982	$	213	$	1,606	$	3,643	$	5,462	$	2,105,444
Lease financing	Lease financing	0		0		87,257		87,257		0		0		0		0		87,257		Lease financing	0		0		79,271		79,271		0		0		0		0		79,271
Real estate – construction:	Real estate – construction:																			Real estate – construction:
Residential	Residential	988		0		260,444		261,432		0		0		0		0		261,432		Residential	0		0		252,795		252,795		0		0		0		0		252,795
Commercial	Commercial	0		0		477,441		477,441		0		0		0		0		477,441		Commercial	0		0		680,791		680,791		0		0		0		0		680,791
Total real estate – construction	Total real estate – construction	988		0		737,885		738,873		0		0		0		0		738,873		Total real estate – construction	0		0		933,586		933,586		0		0		0		0		933,586
Real estate – 1-4 family mortgage:	Real estate – 1-4 family mortgage:																			Real estate – 1-4 family mortgage:
Primary	Primary	1,795		1,098		1,505,737		1,508,630		347		3,031		5,520		8,898		1,517,528		Primary	7,325		536		1,558,960		1,566,821		1,910		2,782		4,699		9,391		1,576,212
Home equity	Home equity	1,001		16		440,820		441,837		0		92		451		543		442,380		Home equity	545		150		430,672		431,367		65		343		432		840		432,207
Rental/investment	Rental/investment	1,334		207		270,995		272,536		7		178		90		275		272,811		Rental/investment	819		354		255,319		256,492		0		194		293		487		256,979
Land development	Land development	60		0		136,468		136,528		0		12		33		45		136,573		Land development	248		0		115,223		115,471		0		19		32		51		115,522
Total real estate – 1-4 family mortgage	Total real estate – 1-4 family mortgage	4,190		1,321		2,354,020		2,359,531		354		3,313		6,094		9,761		2,369,292		Total real estate – 1-4 family mortgage	8,937		1,040		2,360,174		2,370,151		1,975		3,338		5,456		10,769		2,380,920
Real estate – commercial mortgage:	Real estate – commercial mortgage:																			Real estate – commercial mortgage:
Owner-occupied	Owner-occupied	1,034		1		1,312,024		1,313,059		178		2,895		276		3,349		1,316,408		Owner-occupied	1,333		550		1,340,262		1,342,145		0		1,444		565		2,009		1,344,154
Non-owner occupied	Non-owner occupied	1,986		0		2,174,154		2,176,140		58		309		55		422		2,176,562		Non-owner occupied	3,687		0		2,211,485		2,215,172		0		360		5,674		6,034		2,221,206
Land development	Land development	257		43		117,287		117,587		0		39		46		85		117,672		Land development	41		0		110,536		110,577		0		179		44		223		110,800
Total real estate – commercial mortgage	Total real estate – commercial mortgage	3,277		44		3,603,465		3,606,786		236		3,243		377		3,856		3,610,642		Total real estate – commercial mortgage	5,061		550		3,662,283		3,667,894		0		1,983		6,283		8,266		3,676,160
Installment loans to individuals	Installment loans to individuals	923		173		175,975		177,071		6		84		34		124		177,195		Installment loans to individuals	1,147		90		119,602		120,839		57		219		21		297		121,136
Unearned income	Unearned income	—		—		(4,329)		(4,329)		—		—		—		—		(4,329)		Unearned income	—		—		(4,015)		(4,015)		—		—		—		—		(4,015)
Loans, net of unearned income	Loans, net of unearned income	$	10,254	$	1,826	$	9,393,313	$	9,405,393	$	1,246	$	9,306	$	8,279	$	18,831	$	9,424,224	Loans, net of unearned income	$	15,830	$	2,235	$	9,249,643	$	9,267,708	$	2,245	$	7,146	$	15,403	$	24,794	$	9,292,502

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, 2019
Commercial, financial, agricultural $ 605 $ 476 $ 1,045,802 $ 1,046,883 $ 387 $ 5,023 $ 60 $ 5,470 $ 1,052,353
Lease financing 0 0 85,474 85,474 0 226 0 226 85,700
Real estate – construction 794 0 774,107 774,901 0 0 0 0 774,901
Real estate – 1-4 family mortgage 18,020 2,502 2,320,328 2,340,850 623 6,571 2,082 9,276 2,350,126
Real estate – commercial mortgage 2,362 276 3,119,785 3,122,423 372 4,655 1,426 6,453 3,128,876
Installment loans to individuals 1,000 204 198,555 199,759 0 17 67 84 199,843
Unearned income — — (3,825) (3,825) — — — — (3,825)
Total loans, net $ 22,781 $ 3,458 $ 7,540,226 $ 7,566,465 $ 1,382 $ 16,492 $ 3,635 $ 21,509 $ 7,587,974

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


	Accruing Loans								Nonaccruing Loans
	30-89 Days Past Due		90 Days or More Past Due		Current Loans		Total Loans		30-89 Days Past Due		90 Days or More Past Due		Current Loans		Total Loans		Total Loans
December 31, 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	0		0		79,974		79,974		0		48		0		48		80,022
Real estate – construction:
Residential	0		0		243,317		243,317		0		497		0		497		243,814
Commercial	0		0		583,338		583,338		0		0		0		0		583,338
Total real estate – construction	0		0		826,655		826,655		0		497		0		497		827,152
Real estate – 1-4 family mortgage:
Primary	11,889		1,754		1,513,716		1,527,359		1,865		2,744		4,213		8,822		1,536,181
Home equity	1,152		360		430,702		432,214		66		111		377		554		432,768
Rental/investment	663		210		263,064		263,937		61		194		244		499		264,436
Land development	97		0		123,051		123,148		0		0		31		31		123,179
Total real estate – 1-4 family mortgage	13,801		2,324		2,330,533		2,346,658		1,992		3,049		4,865		9,906		2,356,564
Real estate – commercial mortgage:
Owner-occupied	779		795		1,330,155		1,331,729		0		2,598		438		3,036		1,334,765
Non-owner occupied	922		127		2,191,440		2,192,489		0		2,197		53		2,250		2,194,739
Land development	113		115		119,820		120,048		44		29		4		77		120,125
Total real estate – commercial mortgage	1,814		1,037		3,641,415		3,644,266		44		4,824		495		5,363		3,649,629
Installment loans to individuals	896		191		148,620		149,707		4		117		34		155		149,862
Unearned income	—		—		(4,160)		(4,160)		—		—		—		0		(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 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 0 restructured loans contractually 90 days past due or more and still accruing at March 31, 2021 and 2 restructured loans in the amount of $164 contractually 90 days past due or more and still accruing at March 31, 2020. The outstanding balance of restructured loans on nonaccrual status was $5,965 and $2,596 at March 31, 2021 and March 31, 2020, respectively.

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

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 which 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.

The tables below illustrate the impact of modifications classified as restructured loans which were made during the periods presented and held on the Consolidated Balance Sheets at the respective period end.


		Number of Loans	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment			Number of Loans	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Three months ended September 30, 2020
Three months ended March 31, 2021							Three months ended March 31, 2021

Real estate – 1-4 family mortgage:							Real estate – 1-4 family mortgage:
Primary							Primary	3	432		435

Real estate – commercial mortgage:							Real estate – commercial mortgage:

Non-owner occupied							Non-owner occupied	1	837		810

Total							Total	4	$	1,269	$	1,245

Three months ended March 31, 2020							Three months ended March 31, 2020
Commercial, financial, agricultural	Commercial, financial, agricultural	1	$	31	$	31	Commercial, financial, agricultural	2	$	898	$	898

Real estate – 1-4 family mortgage:	Real estate – 1-4 family mortgage:						Real estate – 1-4 family mortgage:
Primary	Primary	2	201		200		Primary	3	447		449

Rental/investment		1	33		32

Total real estate – 1-4 family mortgage		3	234		232
Real estate – commercial mortgage:
Owner-occupied		2	357		357
Non-owner occupied		2	210		210

Total real estate – commercial mortgage		4	567		567

Total		8	$	832	$	830

Three months ended September 30, 2019

Real estate – 1-4 family mortgage		1	$	16	$	16

Total	Total	1	$	16	$	16	Total	5	$	1,345	$	1,347

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Number of
Loans Pre-
Modification
Outstanding
Recorded
Investment Post-
Modification
Outstanding
Recorded
Investment
Nine months ended September 30, 2020
Commercial, financial, agricultural 7 $ 1,862 $ 1,859
Real estate – 1-4 family mortgage:
Primary 17 2,356 2,363
Rental/investment 2 142 142
Total real estate – 1-4 family mortgage 19 2,498 2,505
Real estate – commercial mortgage:
Owner-occupied 3 3,019 2,970
Non-owner occupied 2 210 210
Land development 1 189 189
Total real estate – commercial mortgage 6 3,418 3,369
Installment loans to individuals 2 24 21
Total 34 $ 7,802 $ 7,754
Nine months ended September 30, 2019
Commercial, financial, agricultural 2 $ 187 $ 185
Real estate – 1-4 family mortgage 4 321 320
Total 6 $ 508 $ 505

With respect to loans that were restructured during the nine months ended September 30, 2020, $420 have subsequently defaulted as of the date of this report. With respect to loans that were restructured during the nine months ended September 30, 2019, $61 subsequently defaulted within twelve months of restructuring.

Restructured loans 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 1 restructured loan in the amount of $92 contractually 90 days past due or more and still accruing at September 30, 2020 and 1 restructured loan in the amount of $40 contractually 90 days past due or more and still accruing at September 30, 2019. The outstanding balance of restructured loans on nonaccrual status was $3,703 and $3,101 at September 30, 2020 and September 30, 2019, respectively.

~~Changes in the Company’s restructured loans are set forth in the table below:~~

Number of
Loans Recorded
Investment
Totals at January 1, 2020 46 $ 4,679
Additional advances or loans with concessions 34 7,787
Reclassified as performing restructured loan 3 354
Reductions due to:
Reclassified as nonperforming (2) (510)
Paid in full (4) (938)
Principal paydowns 0 (200)
Totals at September 30, 2020 77 $ 11,172

The allowance for credit losses attributable to restructured loans was $279 and $30 at September 30, 2020 and September 30, 2019, respectively. The Company had 0 remaining availability under commitments to lend additional funds on these restructured loans at September 30, 2020 and $1 at September 30, 2019.

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

In response to the current 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 commercial customers. Any customer current on loan payments, taxes and insurance can qualify for an initial 90-day deferral of principal and interest payments. A second 90-day deferral has been made available to borrowers that remained current on taxes and insurance through the first deferral period and also satisfy underwriting standards established by the Company that analyze 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 operates. The Company’s loan deferral program complies 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 September 30, 2020, the Company had 804 loans with total balances of approximately $373,000 on deferral. In accordance with the applicable guidance, none of these loans were considered “restructured loans.”

~~Credit Quality~~

For commercial and commercial real estate loans, internal risk-rating grades are assigned by lending, credit administration and loan review personnel, based on an analysis of the financial and collateral strength and other credit attributes underlying each loan. 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 these loans. Loan grades range between 1 and 9, with 1 rated loans having the least credit risk. Loans within the “Pass” grade generally have a lower risk of loss and therefore a lower risk factor applied to the loan balances. The “Pass” grade is reserved for loans with a risk rating between 1 and 4A, and the “Pass-Watch” grade (those with a risk rating of 4B and 4E) is utilized on a temporary basis for “Pass” grade loans where a significant adverse risk-modifying action is anticipated in the near term. 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 the related loan balances. During the first quarter of 2020, the Company proactively downgraded to “Pass-Watch” certain “Pass” rated loans greater than $1,000 in industries the Company believed posed a greater risk in the current pandemic environment (at the time of the downgrade, borrowers in the hotel/motel, restaurant and entertainment industries). Note 5, “Allowance for Credit Losses,” provides additional information about the Company's heightened monitoring efforts.

~~The following table presents the Company’s loan portfolio by year of origination and internal risk-rating grades as of the dates presented:~~

Term Loans Amortized Cost Basis by Origination Year
2020 2019 2018 2017 2016 Prior Revolving Loans Revolving Loans Converted to Term Total
Loans
September 30, 2020
Commercial, Financial, Agricultural $ 1,496,869 $ 208,462 $ 82,029 $ 55,271 $ 21,981 $ 25,284 $ 249,974 $ 12,539 $ 2,152,409
Pass 1,490,637 184,292 77,209 47,560 17,411 23,379 234,139 10,846 2,085,473
Pass-Watch 5,841 23,483 3,318 6,056 4,177 178 11,352 796 55,201
Substandard 391 687 1,502 1,655 393 1,727 4,483 897 11,735
Real Estate - Construction $ 292,840 $ 277,380 $ 60,321 $ 27,528 $ 0 $ 0 $ 14,687 $ 145 $ 672,901
Residential $ 144,193 $ 37,303 $ 2,805 $ 0 $ 0 $ 0 $ 14,175 $ 145 $ 198,621
Pass 143,398 37,239 2,805 0 0 0 14,175 145 197,762
Pass-Watch 795 0 0 0 0 0 0 0 795
Substandard 0 64 0 0 0 0 0 0 64
Commercial $ 148,647 $ 240,077 $ 57,516 $ 27,528 $ 0 $ 0 $ 512 $ 0 $ 474,280
Pass 143,920 222,291 57,516 27,528 0 0 512 0 451,767
Pass-Watch 4,727 17,786 0 0 0 0 0 0 22,513
Substandard 0 0 0 0 0 0 0 0 0
Real Estate - 1-4 Family Mortgage $ 93,050 $ 90,316 $ 54,193 $ 35,024 $ 15,897 $ 11,028 $ 16,565 $ 2,411 $ 318,484
Primary $ 7,847 $ 7,610 $ 7,659 $ 5,548 $ 427 $ 2,099 $ 416 $ 0 $ 31,606
Pass 7,847 7,328 7,659 5,548 427 2,083 416 0 31,308
Pass-Watch 0 162 0 0 0 0 0 0 162
Substandard 0 120 0 0 0 16 0 0 136
Home Equity $ 97 $ 565 $ 0 $ 0 $ 0 $ 0 $ 10,563 $ 0 $ 11,225
Pass 97 565 0 0 0 0 10,438 0 11,100

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Term Loans Amortized Cost Basis by Origination Year
2020 2019 2018 2017 2016 Prior Revolving Loans Revolving Loans Converted to Term Total
Loans
Pass-Watch 0 0 0 0 0 0 125 0 125
Substandard 0 0 0 0 0 0 0 0 0
Rental/Investment $ 37,906 $ 38,376 $ 32,752 $ 29,097 $ 15,247 $ 8,516 $ 1,260 $ 570 $ 163,724
Pass 35,900 36,978 31,584 27,640 15,142 7,714 1,169 570 156,697
Pass-Watch 1,816 456 434 1,390 0 603 91 0 4,790
Substandard 190 942 734 67 105 199 0 0 2,237
Land Development $ 47,200 $ 43,765 $ 13,782 $ 379 $ 223 $ 413 $ 4,326 $ 1,841 $ 111,929
Pass 47,200 43,125 13,782 379 217 375 4,322 1,841 111,241
Pass-Watch 0 0 0 0 0 38 4 0 42
Substandard 0 640 0 0 6 0 0 0 646
Real Estate - Commercial Mortgage $ 674,040 $ 853,569 $ 495,652 $ 448,059 $ 387,416 $ 329,400 $ 79,338 $ 18,350 $ 3,285,824
Owner-Occupied $ 187,846 $ 272,468 $ 208,303 $ 186,479 $ 125,496 $ 101,549 $ 23,588 $ 5,804 $ 1,111,533
Pass 174,500 261,499 175,671 159,656 99,871 86,635 18,854 5,804 982,490
Pass-Watch 13,311 10,202 27,468 22,250 22,470 13,178 3,126 0 112,005
Substandard 35 767 5,164 4,573 3,155 1,736 1,608 0 17,038
Non-Owner Occupied $ 462,691 $ 555,163 $ 273,430 $ 256,342 $ 256,794 $ 223,031 $ 52,887 $ 12,546 $ 2,092,884
Pass 428,272 502,778 235,155 171,441 190,683 164,334 46,252 12,427 1,751,342
Pass-Watch 32,584 50,069 38,275 83,315 52,461 57,785 6,635 119 321,243
Substandard 1,835 2,316 0 1,586 13,650 912 0 0 20,299
Land Development $ 23,503 $ 25,938 $ 13,919 $ 5,238 $ 5,126 $ 4,820 $ 2,863 $ 0 $ 81,407
Pass 21,084 25,070 12,617 5,165 3,539 4,820 2,863 0 75,158
Pass-Watch 263 868 1,302 73 0 0 0 0 2,506
Substandard 2,156 0 0 0 1,587 0 0 0 3,743
Installment loans to individuals $ 25 $ 5 $ 0 $ 0 $ 0 $ 0 $ 0 $ 20 $ 50
Pass 25 5 0 0 0 0 0 20 50
Pass-Watch 0 0 0 0 0 0 0 0 0
Substandard 0 0 0 0 0 0 0 0 0
Total loans subject to risk rating $ 2,556,824 $ 1,429,732 $ 692,195 $ 565,882 $ 425,294 $ 365,712 $ 360,564 $ 33,465 $ 6,429,668
Pass 2,492,880 1,321,170 613,998 444,917 327,290 289,340 333,140 31,653 5,854,388
Pass-Watch 59,337 103,026 70,797 113,084 79,108 71,782 21,333 915 519,382
Substandard 4,607 5,536 7,400 7,881 18,896 4,590 6,091 897 55,898

~~The following table presents the performing status of the Company’s loan portfolio not subject to risk rating as of the dates presented:~~

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Term Loans Amortized Cost Basis by Origination Year
2020 2019 2018 2017 2016 Prior Revolving Loans Revolving Loans Converted to Term Total
Loans
September 30, 2020
Commercial, Financial, Agricultural $ 26,726 $ 19,164 $ 12,105 $ 7,487 $ 3,440 $ 12,258 $ 211,383 $ 322 $ 292,885
Performing Loans 26,726 19,052 12,049 7,107 3,291 12,235 210,916 322 291,698
Non-Performing Loans 0 112 56 380 149 23 467 0 1,187
Lease Financing Receivables $ 27,278 $ 27,274 $ 18,993 $ 5,056 $ 1,836 $ 2,491 $ 0 $ 0 $ 82,928
Performing Loans 27,278 27,274 18,993 5,056 1,836 2,491 0 0 82,928
Non-Performing Loans 0 0 0 0 0 0 0 0 0
Real Estate - Construction $ 37,614 $ 27,562 $ 295 $ 155 $ 0 $ 0 $ 346 $ 0 $ 65,972
Residential $ 36,288 $ 25,727 $ 295 $ 155 $ 0 $ 0 $ 346 $ 0 $ 62,811
Performing Loans 36,288 25,727 295 155 0 0 346 0 62,811
Non-Performing Loans 0 0 0 0 0 0 0 0 0
Commercial $ 1,326 $ 1,835 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 3,161
Performing Loans 1,326 1,835 0 0 0 0 0 0 3,161
Non-Performing Loans 0 0 0 0 0 0 0 0 0
Real Estate - 1-4 Family Mortgage $ 378,741 $ 381,768 $ 298,572 $ 223,228 $ 116,088 $ 218,792 $ 430,273 $ 3,346 $ 2,050,808
Primary $ 342,912 $ 353,445 $ 274,097 $ 200,836 $ 101,959 $ 211,184 $ 1,443 $ 46 $ 1,485,922
Performing Loans 342,912 351,059 271,076 199,061 101,238 209,090 1,443 46 1,475,925
Non-Performing Loans 0 2,386 3,021 1,775 721 2,094 0 0 9,997
Home Equity $ 0 $ 205 $ 377 $ 179 $ 45 $ 965 $ 426,583 $ 2,801 $ 431,155
Performing Loans 0 205 377 179 45 848 426,434 2,507 430,595
Non-Performing Loans 0 0 0 0 0 117 149 294 560
Rental/Investment $ 24,840 $ 22,936 $ 20,378 $ 19,980 $ 12,950 $ 6,007 $ 1,497 $ 499 $ 109,087
Performing Loans 24,840 22,830 20,378 19,859 12,943 5,759 1,497 499 108,605
Non-Performing Loans 0 106 0 121 7 248 0 0 482
Land Development $ 10,989 $ 5,182 $ 3,720 $ 2,233 $ 1,134 $ 636 $ 750 $ 0 $ 24,644
Performing Loans 10,989 5,182 3,708 2,200 1,134 636 750 0 24,599
Non-Performing Loans 0 0 12 33 0 0 0 0 45
Real Estate - Commercial Mortgage $ 62,694 $ 76,274 $ 61,617 $ 50,869 $ 39,150 $ 22,001 $ 11,674 $ 539 $ 324,818
Owner-Occupied $ 36,389 $ 47,042 $ 39,417 $ 33,561 $ 26,849 $ 15,425 $ 5,876 $ 316 $ 204,875
Performing Loans 36,389 47,042 39,203 33,382 26,758 14,956 5,876 316 203,922
Non-Performing Loans 0 0 214 179 91 469 0 0 953
Non-Owner Occupied $ 16,848 $ 19,873 $ 16,290 $ 14,117 $ 8,288 $ 5,011 $ 3,103 $ 148 $ 83,678
Performing Loans 16,848 19,873 16,232 14,117 8,288 4,956 3,103 148 83,565
Non-Performing Loans 0 0 58 0 0 55 0 0 113
Land Development $ 9,457 $ 9,359 $ 5,910 $ 3,191 $ 4,013 $ 1,565 $ 2,695 $ 75 $ 36,265
Performing Loans 9,457 9,359 5,910 3,181 4,013 1,522 2,695 75 36,212
Non-Performing Loans 0 0 0 10 0 43 0 0 53
Installment loans to individuals $ 59,631 $ 81,611 $ 15,836 $ 4,842 $ 2,856 $ 1,915�� $ 10,363 $ 91 $ 177,145
Performing Loans 59,621 81,507 15,730 4,821 2,804 1,914 10,360 91 176,848
Non-Performing Loans 10 104 106 21 52 1 3 0 297
Total loans not subject to risk rating $ 592,684 $ 613,653 $ 407,418 $ 291,637 $ 163,370 $ 257,457 $ 664,039 $ 4,298 $ 2,994,556
Performing Loans 592,674 610,945 403,951 289,118 162,350 254,407 663,420 4,004 2,980,869
Non-Performing Loans 10 2,708 3,467 2,519 1,020 3,050 619 294 13,687

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~The following disclosures are presented under GAAP in effect prior to the adoption of CECL. The Company has included these disclosures to address the applicable prior period.~~

A discussion of the Company’s policies regarding internal risk-rating of loans is discussed above and is applicable to these tables. The following table presents the Company’s loan portfolio by internal risk-rating grades as of the date presented:

Pass Pass-Watch Substandard Total
December 31, 2019
Commercial, financial, agricultural $ 779,798 $ 11,949 $ 11,715 $ 803,462
Real estate – construction 698,950 501 9,209 708,660
Real estate – 1-4 family mortgage 339,079 3,856 3,572 346,507
Real estate – commercial mortgage 2,737,629 31,867 26,711 2,796,207
Installment loans to individuals 6 0 0 6
Total $ 4,555,462 $ 48,173 $ 51,207 $ 4,654,842

~~The following table presents the performing status of the Company’s loan portfolio not subject to risk rating as of the date presented:~~

Performing Non-
Performing Total
December 31, 2019
Commercial, financial, agricultural $ 247,575 $ 1,316 $ 248,891
Lease financing 81,649 226 81,875
Real estate – construction 66,241 0 66,241
Real estate – 1-4 family mortgage 1,992,331 11,288 2,003,619
Real estate – commercial mortgage 330,714 1,955 332,669
Installment loans to individuals 199,549 288 199,837
Total $ 2,918,059 $ 15,073 $ 2,933,132

The following disclosures are presented under GAAP in effect prior to the adoption of CECL that are no longer applicable or required. The Company has included these disclosures to address the applicable prior periods.

~~Impaired Loans~~

Loans formerly accounted for under FASB ASC 310-20, “Nonrefundable Fees and Other Cost” (“ASC 310-20”), and which are impaired loans recognized in conformity with ASC 310, “Receivables” (“ASC 310”), segregated by class, were as follows as of the date presented:

Unpaid
Contractual
Principal
Balance Recorded
Investment
With
Allowance Recorded
Investment
With No
Allowance Total
Recorded
Investment Related
Allowance
December 31, 2019
Commercial, financial, agricultural $ 6,623 $ 5,722 $ 0 $ 5,722 $ 1,222
Lease financing 226 226 0 226 3
Real estate – construction 9,145 0 9,145 9,145 0
Real estate – 1-4 family mortgage 14,018 13,689 0 13,689 143
Real estate – commercial mortgage 11,067 7,361 1,080 8,441 390
Installment loans to individuals 91 84 0 84 1
Totals $ 41,170 $ 27,082 $ 10,225 $ 37,307 $ 1,759

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~The following table presents the average recorded investment and interest income recognized on loans formerly accounted for under ASC 310-20 and which are impaired loans for the periods presented:~~

Three Months Ended Nine Months Ended
September 30, 2019 September 30, 2019
Average
Recorded
Investment Interest
Income
Recognized Average
Recorded
Investment Interest
Income
Recognized
Commercial, financial, agricultural $ 5,705 $ 5 $ 5,656 $ 23
Lease financing 0 0 0 0
Real estate – construction 12,128 111 11,756 321
Real estate – 1-4 family mortgage 12,203 50 12,323 153
Real estate – commercial mortgage 10,692 41 10,652 122
Installment loans to individuals 130 0 130 1
Total $ 40,858 $ 207 $ 40,517 $ 620

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~Note 4 – Purchased Loans~~

~~(In Thousands, Except Number of Loans)~~

~~For purposes of this Note 4, all references to “loans” mean purchased loans excluding loans held for sale.~~

~~The following is a summary of purchased loans as of the dates presented:~~

September 30,
2020 December 31, 2019
Commercial, financial, agricultural $ 202,768 $ 315,619
Real estate – construction:
Residential 3,093 16,407
Commercial 31,153 35,175
Total real estate – construction 34,246 51,582
Real estate – 1-4 family mortgage:
Primary 245,369 332,729
Home equity 95,235 117,275
Rental/investment 33,567 43,169
Land development 16,931 23,314
Total real estate – 1-4 family mortgage 391,102 516,487
Real estate – commercial mortgage:
Owner-occupied 355,994 428,077
Non-owner occupied 577,679 647,308
Land development 32,694 40,004
Total real estate – commercial mortgage 966,367 1,115,389
Installment loans to individuals 66,031 102,587
Loans $ 1,660,514 $ 2,101,664

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~Past Due and Nonaccrual Loans~~

The Company’s policies with respect to placing loans on nonaccrual status or charging off loans, and its accounting for interest on any such loans, are described above in Note 3, “Non Purchased Loans.” The Company recognized $214 in interest income on nonaccrual loans during the first nine months of 2020.

~~The following tables provide an aging of past due accruing and nonaccruing loans, segregated by class, as of the dates presented:~~

Accruing Loans Nonaccruing Loans
30-89 Days
Past Due 90 Days
or More
Past Due Current
Loans Total
Loans 30-89 Days
Past Due 90 Days
or More
Past Due Current
Loans Total
Loans Total
Loans
September 30, 2020
Commercial, financial, agricultural $ 1,056 $ 36 $ 189,668 $ 190,760 $ 1,655 $ 6,233 $ 4,120 $ 12,008 $ 202,768
Real estate – construction:
Residential 0 0 3,093 3,093 0 0 0 0 3,093
Commercial 0 0 31,153 31,153 0 0 0 0 31,153
Total real estate – construction 0 0 34,246 34,246 0 0 0 0 34,246
Real estate – 1-4 family mortgage:
Primary 845 64 238,937 239,846 329 2,794 2,400 5,523 245,369
Home equity 839 114 93,006 93,959 0 629 647 1,276 95,235
Rental/investment 356 0 32,409 32,765 0 708 94 802 33,567
Land development 0 0 16,581 16,581 0 29 321 350 16,931
Total real estate – 1-4 family mortgage 2,040 178 380,933 383,151 329 4,160 3,462 7,951 391,102
Real estate – commercial mortgage:
Owner-occupied 851 0 351,688 352,539 505 891 2,059 3,455 355,994
Non-owner occupied 438 54 576,462 576,954 144 571 10 725 577,679
Land development 161 0 32,142 32,303 0 164 227 391 32,694
Total real estate – commercial mortgage 1,450 54 960,292 961,796 649 1,626 2,296 4,571 966,367
Installment loans to individuals 1,844 50 63,846 65,740 9 123 159 291 66,031
Loans, net of unearned income $ 6,390 $ 318 $ 1,628,985 $ 1,635,693 $ 2,642 $ 12,142 $ 10,037 $ 24,821 $ 1,660,514

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~Restructured Loans~~

~~An explanation of what constitutes a “restructured loan,” and management’s analysis in determining whether to restructure a loan, are described above in Note 3, “Non Purchased Loans.”~~

Number of
Loans Pre-
Modification
Outstanding
Recorded
Investment Post-
Modification
Outstanding
Recorded
Investment
Three months ended September 30, 2020
Real estate – 1-4 family mortgage:
Primary 2 44 44
Total real estate – 1-4 family mortgage 2 44 44
Real estate – commercial mortgage:
Owner-occupied 4 3,104 2,844
Total real estate – commercial mortgage 4 3,104 2,844
Total 6 $ 3,148 $ 2,888
Three months ended September 30, 2019
Commercial, financial, agricultural 1 $ 258 $ 258
Real estate – 1-4 family mortgage 1 34 34
Total 2 $ 292 $ 292

Number of
Loans Pre-
Modification
Outstanding
Recorded
Investment Post-
Modification
Outstanding
Recorded
Investment
Nine months ended September 30, 2020
Commercial, financial, agricultural 1 $ 1,029 $ 1,031
Real estate – 1-4 family mortgage:
Primary 4 334 227
Home equity 1 159 162
Total real estate – 1-4 family mortgage 5 493 389
Real estate – commercial mortgage:
Owner-occupied 5 3,173 2,913
Non-owner occupied 1 542 544
Total real estate – commercial mortgage 6 3,715 3,457
Installment loans to individuals 1 25 19
Total 13 $ 5,262 $ 4,896
Nine months ended September 30, 2019
Commercial, financial, agricultural 2 $ 2,778 $ 2,778
Real estate – 1-4 family mortgage 1 34 34
Real estate – commercial mortgage 1 80 76
Total 4 $ 2,892 $ 2,888

With respect to loans that were restructured during the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and March 31, 2020, ~~and September 30, 2019,~~ NaN have subsequently defaulted ~~and remain outstanding~~ as of the date of this report.

Changes in the Company’s restructured loans are set forth in the table below:


	Number of Loans	Recorded Investment
Totals at January 1, 2021	76	$	11,761
Additional advances or loans with concessions	4	1,257

Reductions due to:
Reclassified as nonperforming	(1)	(179)



Principal paydowns	0	(122)

Totals at March 31, 2021	79	$	12,717

The allowance for credit losses attributable to restructured loans was $328 and $193 at March 31, 2021 and March 31, 2020, respectively. The Company had 0 remaining availability under commitments to lend additional funds on these restructured loans at March 31, 2021 and March 31, 2020.

In 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 commercial 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 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

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

~~There was~~Coronavirus Aid, Relief, and Economic Security (“CARES”) Act and related guidance from the FDIC and other banking regulators. As of March 31, 2021, the Company has discontinued its deferral program but 453 loans with total balances of approximately $82,000 remained on deferral. In accordance with the applicable guidance, none of these loans were considered “restructured loans.”

Credit Quality

For loans with a commercial purpose, 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 ~~restructured~~and 9, with 1 being loans with the least credit risk. Loans within the “Pass” grade (reserved for loans with a risk rating between 1 and 4C) generally have a lower risk of loss and therefore a lower risk factor applied to the loan balances. The “Special Mention” grade (those with a risk rating of 4E) represents a loan where a significant adverse risk-modifying action is anticipated in the ~~amount~~near term and left uncorrected, could result in deterioration of ~~$40~~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 tables present the Company’s loan portfolio by year of origination and internal risk-rating grades as of the dates presented:


	Term Loans Amortized Cost Basis by Origination Year
	2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
March 31, 2021
Commercial, Financial, Agricultural	$	90,011	$	1,163,170	$	159,958	$	69,853	$	33,564	$	29,678	$	262,085	$	3,572	$	1,811,891
Pass	89,570		1,162,800		156,958		66,302		28,427		26,643		255,690		2,363		1,788,753
Special Mention	0		121		1,842		306		690		1,460		213		0		4,632
Substandard	441		249		1,158		3,245		4,447		1,575		6,182		1,209		18,506






Real Estate - Construction	$	92,532	$	436,057	$	282,944	$	48,981	$	155	$	0	$	12,280	$	0	$	872,949
Residential	$	58,265	$	119,326	$	4,745	$	0	$	0	$	0	$	12,280	$	0	$	194,616
Pass	58,265		118,233		4,745		0		0		0		12,280		0		193,523
Special Mention	0		808		0		0		0		0		0		0		808
Substandard	0		285		0		0		0		0		0		0		285

Commercial	$	34,267	$	316,731	$	278,199	$	48,981	$	155	$	0	$	0	$	0	$	678,333
Pass	34,267		316,731		273,501		48,981		155		0		0		0		673,635
Special Mention	0		0		4,698		0		0		0		0		0		4,698
Substandard	0		0		0		0		0		0		0		0		0

Real Estate - 1-4 Family Mortgage	$	31,603	$	95,809	$	72,233	$	26,901	$	21,376	$	15,190	$	14,359	$	546	$	278,017
Primary	$	4,437	$	7,928	$	5,065	$	3,869	$	3,979	$	1,152	$	1,217	$	0	$	27,647
Pass	4,437		7,928		4,257		3,869		3,979		1,139		1,217		0		26,826
Special Mention	0		0		122		0		0		0		0		0		122
Substandard	0		0		686		0		0		13		0		0		699

Home Equity	$	766	$	169	$	0	$	0	$	0	$	0	$	8,240	$	0	$	9,175
Pass	766		169		0		0		0		0		8,240		0		9,175
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		0		0		0

Rental/Investment	$	15,467	$	50,956	$	29,321	$	21,108	$	17,061	$	13,474	$	717	$	546	$	148,650
Pass	15,447		50,865		28,397		20,249		16,853		12,984		717		546		146,058
Special Mention	0		0		0		0		77		208		0		0		285
Substandard	20		91		924		859		131		282		0		0		2,307

Land Development	$	10,933	$	36,756	$	37,847	$	1,924	$	336	$	564	$	4,185	$	0	$	92,545
Pass	10,933		33,939		37,498		1,924		336		563		4,185		0		89,378

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


	Term Loans Amortized Cost Basis by Origination Year
	2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
Special Mention	0		2,817		0		0		0		0		0		0		2,817
Substandard	0		0		349		0		0		1		0		0		350

Real Estate - Commercial Mortgage	$	171,777	$	934,961	$	768,175	$	420,655	$	396,113	$	569,509	$	80,820	$	21,426	$	3,363,436
Owner-Occupied	$	60,551	$	301,265	$	235,112	$	183,534	$	164,501	$	169,547	$	22,732	$	9,313	$	1,146,555
Pass	60,551		299,469		233,528		178,701		158,299		165,302		22,715		7,526		1,126,091
Special Mention	0		1,153		840		0		1,972		532		0		1,787		6,284
Substandard	0		643		744		4,833		4,230		3,713		17		0		14,180

Non-Owner Occupied	$	106,264	$	600,412	$	516,319	$	230,201	$	228,491	$	394,757	$	51,818	$	12,113	$	2,140,375
Pass	106,264		591,416		507,372		224,229		183,705		361,486		51,818		12,113		2,038,403
Special Mention	0		8,996		0		5,972		39,161		15,319		0		0		69,448
Substandard	0		0		8,947		0		5,625		17,952		0		0		32,524

Land Development	$	4,962	$	33,284	$	16,744	$	6,920	$	3,121	$	5,205	$	6,270	$	0	$	76,506
Pass	4,962		31,148		16,744		5,815		3,058		4,339		6,270		0		72,336
Special Mention	0		0		0		1,105		63		46		0		0		1,214
Substandard	0		2,136		0		0		0		820		0		0		2,956

Installment loans to individuals	$	53	$	45	$	3	$	0	$	0	$	0	$	0	$	0	$	101
Pass	53		45		3		0		0		0		0		0		101
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		0		0		0

Total loans subject to risk rating	$	385,976	$	2,630,042	$	1,283,313	$	566,390	$	451,208	$	614,377	$	369,544	$	25,544	$	6,326,394
Pass	385,515		2,612,743		1,263,003		550,070		394,812		572,456		363,132		22,548		6,164,279
Special Mention	0		13,895		7,502		7,383		41,963		17,565		213		1,787		90,308
Substandard	461		3,404		12,808		8,937		14,433		24,356		6,199		1,209		71,807


	Term Loans Amortized Cost Basis by Origination Year
	2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term		Total 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
Pass	1,447,594		180,979		73,325		31,362		16,308		14,626		250,528		1,562		2,016,284
Special Mention	128		1,952		2,091		3,850		1,416		109		187		0		9,733
Substandard	551		696		1,496		1,654		400		1,109		4,807		887		11,600






Real Estate - Construction	$	398,891	$	266,471	$	52,520	$	29,300	$	0	$	0	$	13,927	$	0	$	761,109
Residential	$	154,649	$	9,836	$	2,114	$	0	$	0	$	0	$	13,923	$	0	$	180,522
Pass	154,419		9,339		2,114		0		0		0		13,923		0		179,795
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	230		497		0		0		0		0		0		0		727

Commercial	$	244,242	$	256,635	$	50,406	$	29,300	$	0	$	0	$	4	$	0	$	580,587
Pass	244,242		251,937		50,406		29,300		0		0		4		0		575,889
Special Mention	0		4,698		0		0		0		0		0		0		4,698
Substandard	0		0		0		0		0		0		0		0		0

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


	Term Loans Amortized Cost Basis by Origination Year
	2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
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	$	0	$	26,805
Pass	9,422		5,870		3,988		4,644		371		1,045		629		0		25,969
Special Mention	0		125		0		0		0		0		0		0		125
Substandard	0		696		0		0		0		15		0		0		711

Home Equity	$	157	$	184	$	0	$	0	$	0	$	0	$	6,051	$	0	$	6,392
Pass	157		184		0		0		0		0		6,051		0		6,392
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		0		0		0

Rental/Investment	$	50,558	$	32,656	$	27,483	$	25,019	$	12,620	$	5,699	$	1,066	$	557	$	155,658
Pass	50,371		31,724		26,695		24,872		12,439		5,166		1,066		557		152,890
Special Mention	0		0		0		83		77		133		0		0		293
Substandard	187		932		788		64		104		400		0		0		2,475

Land Development	$	50,109	$	38,951	$	5,142	$	355	$	206	$	413	$	2,912	$	1,352	$	99,440
Pass	50,109		38,388		5,142		355		203		413		2,912		1,352		98,874
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		563		0		0		3		0		0		0		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
Pass	293,851		255,206		193,716		163,358		96,128		83,582		16,043		7,896		1,109,780
Special Mention	1,167		847		0		2,067		228		311		0		1,837		6,457
Substandard	624		754		5,366		4,102		3,184		1,721		640		0		16,391

Non-Owner Occupied	$	635,232	$	522,998	$	237,075	$	229,304	$	236,347	$	189,077	$	52,456	$	11,112	$	2,113,601
Pass	624,289		514,030		237,075		184,673		218,106		175,702		52,456		11,112		2,017,443
Special Mention	9,105		0		0		39,007		4,688		10,788		0		0		63,588
Substandard	1,838		8,968		0		5,624		13,553		2,587		0		0		32,570

Land Development	$	36,872	$	21,278	$	8,048	$	3,279	$	4,887	$	3,098	$	6,976	$	0	$	84,438
Pass	34,719		21,278		6,925		3,210		3,274		3,098		6,976		0		79,480
Special Mention	0		0		1,123		69		46		0		0		0		1,238
Substandard	2,153		0		0		0		1,567		0		0		0		3,720

Installment loans to individuals	$	74	$	4	$	0	$	0	$	0	$	0	$	0	$	16	$	94
Pass	74		4		0		0		0		0		0		16		94
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		0		0		0

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
Pass	2,909,247		1,308,939		599,386		441,774		346,829		283,632		350,588		22,495		6,262,890
Special Mention	10,400		7,622		3,214		45,076		6,455		11,341		187		1,837		86,132
Substandard	5,583		13,106		7,650		11,444		18,811		5,832		5,447		887		68,760

The following tables present the performing status of the Company’s loan portfolio not subject to risk rating as of the dates presented:

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


	Term Loans Amortized Cost Basis by Origination Year
	2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
March 31, 2021
Commercial, Financial, Agricultural	$	14,217	$	22,648	$	13,758	$	8,645	$	5,216	$	11,821	$	216,971	$	277	$	293,553
Performing Loans	14,217		22,648		13,513		8,627		4,996		11,730		216,554		277		292,562
Non-Performing Loans	0		0		245		18		220		91		417		0		991

Lease Financing Receivables	$	6,376	$	29,408	$	23,195	$	10,129	$	3,725	$	2,423	$	0	$	0	$	75,256
Performing Loans	6,376		29,408		23,195		10,129		3,725		2,423		0		0		75,256
Non-Performing Loans	0		0		0		0		0		0		0		0		0

Real Estate - Construction	$	4,500	$	51,817	$	4,168	$	0	$	152	$	0	$	0	$	0	$	60,637
Residential	$	3,933	$	50,418	$	3,676	$	0	$	152	$	0	$	0	$	0	$	58,179
Performing Loans	3,933		50,418		3,676		0		152		0		0		0		58,179
Non-Performing Loans	0		0		0		0		0		0		0		0		0

Commercial	$	567	$	1,399	$	492	$	0	$	0	$	0	$	0	$	0	$	2,458
Performing Loans	567		1,399		492		0		0		0		0		0		2,458
Non-Performing Loans	0		0		0		0		0		0		0		0		0

Real Estate - 1-4 Family Mortgage	$	137,286	$	536,741	$	311,138	$	240,837	$	179,410	$	271,009	$	422,860	$	3,622	$	2,102,903
Primary	$	124,455	$	491,825	$	290,701	$	220,720	$	162,131	$	257,114	$	1,574	$	45	$	1,548,565
Performing Loans	124,455		491,758		288,911		216,768		160,569		254,570		1,563		45		1,538,639
Non-Performing Loans	0		67		1,790		3,952		1,562		2,544		11		0		9,926

Home Equity	$	49	$	0	$	125	$	368	$	0	$	817	$	418,553	$	3,120	$	423,032
Performing Loans	49		0		125		368		0		704		418,039		2,756		422,041
Non-Performing Loans	0		0		0		0		0		113		514		364		991

Rental/Investment	$	9,505	$	32,937	$	18,465	$	16,855	$	15,873	$	11,999	$	2,238	$	457	$	108,329
Performing Loans	9,505		32,631		18,370		16,855		15,790		11,789		2,238		457		107,635
Non-Performing Loans	0		306		95		0		83		210		0		0		694

Land Development	$	3,277	$	11,979	$	1,847	$	2,894	$	1,406	$	1,079	$	495	$	0	$	22,977
Performing Loans	3,277		11,979		1,847		2,891		1,376		1,060		495		0		22,925
Non-Performing Loans	0		0		0		3		30		19		0		0		52

Real Estate - Commercial Mortgage	$	22,358	$	78,624	$	65,782	$	50,946	$	43,187	$	40,740	$	10,561	$	526	$	312,724
Owner-Occupied	$	13,295	$	47,352	$	41,946	$	33,008	$	28,117	$	28,199	$	5,351	$	331	$	197,599
Performing Loans	13,295		47,352		41,946		33,008		27,952		27,692		5,351		331		196,927
Non-Performing Loans	0		0		0		0		165		507		0		0		672

Non-Owner Occupied	$	6,441	$	19,530	$	17,407	$	13,692	$	12,532	$	8,918	$	2,166	$	145	$	80,831
Performing Loans	6,441		19,530		17,407		13,634		12,532		8,868		2,166		145		80,723
Non-Performing Loans	0		0		0		58		0		50		0		0		108

Land Development	$	2,622	$	11,742	$	6,429	$	4,246	$	2,538	$	3,623	$	3,044	$	50	$	34,294
Performing Loans	2,622		11,737		6,429		4,246		2,535		3,478		3,044		50		34,141
Non-Performing Loans	0		5		0		0		3		145		0		0		153

Installment loans to individuals	$	10,052	$	41,255	$	41,440	$	11,944	$	3,380	$	3,296	$	9,619	$	49	$	121,035
Performing Loans	10,052		41,168		41,334		11,887		3,339		3,245		9,609		15		120,649
Non-Performing Loans	0		87		106		57		41		51		10		34		386

Total loans not subject to risk rating	$	194,789	$	760,493	$	459,481	$	322,501	$	235,070	$	329,289	$	660,011	$	4,474	$	2,966,108
Performing Loans	194,789		760,028		457,245		318,413		232,966		325,559		659,059		4,076		2,952,135
Non-Performing Loans	0		465		2,236		4,088		2,104		3,730		952		398		13,973

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


	Term Loans Amortized Cost Basis by Origination Year
	2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term		Total 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 Loans	33,794		16,343		10,340		6,026		2,748		7,181		245,059		305		321,796
Non-Performing Loans	11		112		41		370		78		20		426		0		1,058

Lease Financing Receivables	$	32,150	$	25,270	$	10,999	$	4,231	$	1,040	$	2,172	$	0	$	0	$	75,862
Performing Loans	32,150		25,270		10,999		4,231		992		2,172		0		0		75,814
Non-Performing Loans	0		0		0		0		48		0		0		0		48

Real Estate - Construction	$	54,918	$	10,334	$	295	$	153	$	0	$	0	$	343	$	0	$	66,043
Residential	$	53,108	$	9,393	$	295	$	153	$	0	$	0	$	343	$	—	$	63,292
Performing Loans	53,108		9,393		295		153		0		0		343		0		63,292
Non-Performing Loans	0		0		0		0		0		0		0		0		0

Commercial	$	1,810	$	941	$	0	$	0	$	0	$	0	$	0	$	0	$	2,751
Performing Loans	1,810		941		0		0		0		0		0		0		2,751
Non-Performing Loans	0		0		0		0		0		0		0		0		0

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 Loans	470,034		318,929		235,816		175,219		91,479		205,530		1,747		45		1,498,799
Non-Performing Loans	0		2,226		3,726		1,707		716		2,191		11		0		10,577

Home Equity	$	0	$	203	$	372	$	0	$	45	$	799	$	421,838	$	3,119	$	426,376
Performing Loans	0		203		372		0		45		684		421,516		2,642		425,462
Non-Performing Loans	0		0		0		0		0		115		322		477		914

Rental/Investment	$	34,079	$	20,499	$	18,319	$	17,758	$	11,907	$	3,356	$	2,330	$	530	$	108,778
Performing Loans	34,079		20,404		18,245		17,595		11,901		3,196		2,330		530		108,280
Non-Performing Loans	0		95		74		163		6		160		0		0		498

Land Development	$	13,440	$	2,786	$	3,502	$	2,093	$	1,069	$	338	$	511	$	0	$	23,739
Performing Loans	13,440		2,786		3,502		2,062		1,069		338		511		0		23,708
Non-Performing Loans	0		0		0		31		0		0		0		0		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 Loans	48,814		44,344		36,349		30,097		23,885		11,216		5,904		289		200,898
Non-Performing Loans	0		262		312		169		89		392		15		0		1,239

Non-Owner Occupied	$	20,483	$	18,585	$	14,544	$	13,821	$	8,068	$	3,491	$	1,999	$	147	$	81,138
Performing Loans	20,483		18,460		14,486		13,821		8,068		3,439		1,999		147		80,903
Non-Performing Loans	0		125		58		0		0		52		0		0		235

Land Development	$	12,656	$	7,872	$	4,988	$	2,926	$	3,759	$	580	$	2,854	$	52	$	35,687
Performing Loans	12,656		7,872		4,988		2,922		3,759		466		2,854		52		35,569
Non-Performing Loans	0		0		0		4		0		114		0		0		118

Installment loans to individuals	$	60,133	$	57,198	$	13,704	$	4,019	$	2,459	$	1,535	$	10,661	$	59	$	149,768
Performing Loans	60,081		57,119		13,611		3,986		2,407		1,535		10,661		21		149,421
Non-Performing Loans	52		79		93		33		52		0		0		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 Loans	780,449		522,064		349,003		256,112		146,353		235,757		692,924		4,031		2,986,693
Non-Performing Loans	63		2,899		4,304		2,477		989		3,044		774		515		15,065

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 4 – Purchased Loans

(In Thousands, Except Number of Loans)

For purposes of this Note 4, all references to “loans” mean purchased loans excluding loans held for sale.

The following is a summary of purchased loans as of the dates presented:


	March 31, 2021		December 31, 2020
Commercial, financial, agricultural	$	143,843	$	176,513

Real estate – construction:
Residential	2,561		2,859
Commercial	19,771		28,093
Total real estate – construction	22,332		30,952
Real estate – 1-4 family mortgage:
Primary	190,539		214,770
Home equity	72,413		80,392
Rental/investment	28,800		31,928
Land development	13,389		14,654
Total real estate – 1-4 family mortgage	305,141		341,744
Real estate – commercial mortgage:
Owner-occupied	300,616		323,041
Non-owner occupied	546,663		552,728
Land development	25,588		29,454
Total real estate – commercial mortgage	872,867		905,223
Installment loans to individuals	51,723		59,675


Loans	$	1,395,906	$	1,514,107

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Past Due and Nonaccrual Loans

The following tables provide an aging of past due accruing and nonaccruing loans, segregated by class, as of the dates presented:


	Accruing Loans								Nonaccruing Loans
	30-89 Days Past Due		90 Days or More Past Due		Current Loans		Total Loans		30-89 Days Past Due		90 Days or More Past Due		Current Loans		Total Loans		Total Loans
March 31, 2021
Commercial, financial, agricultural	$	213	$	2	$	133,655	$	133,870	$	65	$	1,762	$	8,146	$	9,973	$	143,843

Real estate – construction:
Residential	0		0		2,561		2,561		0		0		0		0		2,561
Commercial	0		0		19,771		19,771		0		0		0		0		19,771
Total real estate – construction	0		0		22,332		22,332		0		0		0		0		22,332
Real estate – 1-4 family mortgage:
Primary	2,819		11		181,372		184,202		339		3,470		2,528		6,337		190,539
Home equity	857		21		70,110		70,988		0		760		665		1,425		72,413
Rental/investment	135		0		28,338		28,473		0		257		70		327		28,800
Land development	66		0		13,289		13,355		0		0		34		34		13,389
Total real estate – 1-4 family mortgage	3,877		32		293,109		297,018		339		4,487		3,297		8,123		305,141
Real estate – commercial mortgage:
Owner-occupied	586		50		297,666		298,302		0		675		1,639		2,314		300,616
Non-owner occupied	0		0		538,699		538,699		0		145		7,819		7,964		546,663
Land development	0		0		25,245		25,245		0		138		205		343		25,588
Total real estate – commercial mortgage	586		50		861,610		862,246		0		958		9,663		10,621		872,867
Installment loans to individuals	1,295		45		50,153		51,493		12		118		100		230		51,723

Loans, net of unearned income	$	5,971	$	129	$	1,360,859	$	1,366,959	$	416	$	7,325	$	21,206	$	28,947	$	1,395,906

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


	Accruing Loans								Nonaccruing Loans
	30-89 Days Past Due		90 Days or More Past Due		Current Loans		Total Loans		30-89 Days Past Due		90 Days or More Past Due		Current Loans		Total Loans		Total Loans
December 31, 2020
Commercial, financial, agricultural	$	818	$	101	$	163,658	$	164,577	$	74	$	2,024	$	9,838	$	11,936	$	176,513

Real estate – construction:
Residential	0		0		2,859		2,859		0		0		0		0		2,859
Commercial	0		0		28,093		28,093		0		0		0		0		28,093
Total real estate – construction	0		0		30,952		30,952		0		0		0		0		30,952
Real estate – 1-4 family mortgage:
Primary	2,394		74		206,635		209,103		687		2,799		2,181		5,667		214,770
Home equity	294		43		78,739		79,076		4		674		638		1,316		80,392
Rental/investment	180		14		30,931		31,125		0		724		79		803		31,928
Land development	109		0		14,231		14,340		0		0		314		314		14,654
Total real estate – 1-4 family mortgage	2,977		131		330,536		333,644		691		4,197		3,212		8,100		341,744
Real estate – commercial mortgage:
Owner-occupied	2,511		0		317,997		320,508		193		447		1,893		2,533		323,041
Non-owner occupied	207		0		544,694		544,901		7,682		0		145		7,827		552,728
Land development	112		0		28,962		29,074		0		164		216		380		29,454
Total real estate – commercial mortgage	2,830		0		891,653		894,483		7,875		611		2,254		10,740		905,223
Installment loans to individuals	2,026		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

There were 0 restructured loans contractually 90 days past due or more and still accruing at ~~September 30, 2020~~March 31, 2021 and 2 restructured loans in the aggregate amount of ~~$272~~$134 contractually 90 days past due or more and still accruing at ~~September 30, 2019.~~March 31, 2020. The outstanding balance of restructured loans on nonaccrual status was ~~$7,775~~$19,140 and ~~$707~~$3,797 at ~~September 30,~~March 31, 2021 and March 31, 2020, ~~and September 30, 2019,~~ respectively.

Restructured Loans

An explanation of what constitutes a “restructured loan,” and management’s analysis in determining whether to restructure a loan, are described above in Note 3, “Non Purchased Loans.”

The table below illustrates the impact of modifications classified as restructured loans which were made during the periods presented and held on the Consolidated Balance Sheets at the respective period end.



	Number of Loans	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Three months ended March 31, 2021
Commercial, financial, agricultural	1	$	135	$	135


















Three months ended March 31, 2020






Real estate – 1-4 family mortgage:
Primary	1	$	223	$	114

With respect to loans that were restructured during the three months ended March 31, 2021 and March 31, 2020, NaN have subsequently defaulted and remain outstanding as of the date of this report.

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Changes in the Company’s restructured loans are set forth in the table below:

Number of
Loans Recorded
Investment
Totals at January 1, 2020 54 $ 7,275
Additional advances or loans with concessions 13 5,159
Reclassified as performing restructured loan 1 74
Reductions due to:
Reclassified to nonperforming loans (13) (2,489)
Paid in full (2) (422)
Charge-offs (1) (3)
Principal paydowns 0 (444)
Totals at September 30, 2020 52 $ 9,150


	Number of Loans	Recorded Investment
Totals at January 1, 2021	48	$	8,687
Additional advances or loans with concessions	1	364

Reductions due to:
Reclassified to nonperforming loans	(1)	(1,317)




Principal paydowns	0	(81)

Totals at March 31, 2021	48	$	7,653

The allowance for credit losses attributable to restructured loans was ~~$491~~$167 and ~~$91~~$56 at ~~September 30,~~March 31, 2021 and March 31, 2020, ~~and September 30, 2019,~~ respectively. The Company had ~~$539~~$153 and $5$7 in remaining availability under commitments to lend additional funds on these restructured loans at ~~September 30,~~March 31, 2021 and March 31, 2020, ~~and September 30, 2019,~~ 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 ~~September 30, 2020,~~March 31, 2021, the Company had ~~465~~139 loans with total balances of approximately ~~$124,000~~$12,000 remaining on deferral. Under the applicable guidance, none of these loans were considered “restructured loans.”

2722

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

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 presents~~tables present the Company’s loan portfolio by year of origination and internal risk-rating grades as of the dates presented:


		Term Loans Amortized Cost Basis by Origination Year																			Term Loans Amortized Cost Basis by Origination Year
		2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans			2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
September 30, 2020
March 31, 2021																				March 31, 2021
Commercial, Financial, Agricultural	Commercial, Financial, Agricultural	$	0	$	727	$	36,120	$	33,922	$	29,041	$	25,136	$	65,214	$	1,712	$	191,872	Commercial, Financial, Agricultural	$	0	$	0	$	695	$	19,849	$	19,070	$	36,825	$	57,113	$	992	$	134,544
Pass	Pass	0		727		23,006		25,516		22,081		20,778		55,670		628		148,406		Pass	0		0		695		17,492		12,727		28,753		49,572		480		109,719
Pass-Watch		0		0		10		1,270		1,499		584		676		0		4,039
Special Mention																				Special Mention	0		0		0		341		87		89		0		0		517
Substandard	Substandard	0		0		13,104		7,136		5,461		3,774		8,868		1,084		39,427		Substandard	0		0		0		2,016		6,256		7,983		7,541		512		24,308

Real Estate - Construction	Real Estate - Construction	$	0	$	0	$	10,887	$	9,268	$	14,091	$	0	$	0	$	0	$	34,246	Real Estate - Construction	$	0	$	0	$	0	$	10,679	$	449	$	10,783	$	0	$	0	$	21,911
Residential	Residential	$	0	$	0	$	2,203	$	207	$	683	$	0	$	0	$	0	$	3,093	Residential	$	0	$	0	$	0	$	1,006	$	449	$	685	$	0	$	0	$	2,140
Pass	Pass	0		0		2,203		207		683		0		0		0		3,093		Pass	0		0		0		1,006		449		685		0		0		2,140
Pass-Watch		0		0		0		0		0		0		0		0		0
Special Mention																				Special Mention	0		0		0		0		0		0		0		0		0
Substandard	Substandard	0		0		0		0		0		0		0		0		0		Substandard	0		0		0		0		0		0		0		0		0

Commercial	Commercial	$	0	$	0	$	8,684	$	9,061	$	13,408	$	0	$	0	$	0	$	31,153	Commercial	$	0	$	0	$	0	$	9,673	$	0	$	10,098	$	0	$	0	$	19,771
Pass	Pass	0		0		8,684		9,061		13,408		0		0		0		31,153		Pass	0		0		0		9,673		0		10,098		0		0		19,771
Pass-Watch		0		0		0		0		0		0		0		0		0
Special Mention																				Special Mention	0		0		0		0		0		0		0		0		0
Substandard	Substandard	0		0		0		0		0		0		0		0		0		Substandard	0		0		0		0		0		0		0		0		0

Real Estate - 1-4 Family Mortgage	Real Estate - 1-4 Family Mortgage	$	0	$	0	$	14,029	$	9,639	$	2,012	$	40,034	$	2,653	$	253	$	68,620	Real Estate - 1-4 Family Mortgage	$	0	$	0	$	0	$	14,248	$	5,259	$	35,994	$	847	$	234	$	56,582
Primary	Primary	$	0	$	0	$	7,734	$	5,163	$	611	$	17,809	$	249	$	0	$	31,566	Primary	$	0	$	0	$	0	$	5,773	$	2,699	$	16,786	$	0	$	0	$	25,258
Pass	Pass	0		0		6,438		5,163		604		12,904		249		0		25,358		Pass	0		0		0		4,438		2,608		12,494		0		0		19,540
Pass-Watch		0		0		0		0		0		314		0		0		314
Special Mention																				Special Mention	0		0		0		0		0		970		0		0		970
Substandard	Substandard	0		0		1,296		0		7		4,591		0		0		5,894		Substandard	0		0		0		1,335		91		3,322		0		0		4,748

Home Equity	Home Equity	$	0	$	0	$	0	$	0	$	0	$	0	$	943	$	253	$	1,196	Home Equity	$	0	$	0	$	0	$	0	$	0	$	0	$	756	$	234	$	990
Pass	Pass	0		0		0		0		0		0		221		0		221		Pass	0		0		0		0		0		0		60		0		60
Pass-Watch		0		0		0		0		0		0		0		0		0
Special Mention																				Special Mention	0		0		0		0		0		0		0		0		0
Substandard	Substandard	0		0		0		0		0		0		722		253		975		Substandard	0		0		0		0		0		0		696		234		930

Rental/Investment	Rental/Investment	$	0	$	0	$	0	$	1,904	$	316	$	19,013	$	0	$	0	$	21,233	Rental/Investment	$	0	$	0	$	0	$	0	$	1,863	$	16,242	$	88	$	0	$	18,193
Pass	Pass	0		0		0		1,904		316		16,511		0		0		18,731		Pass	0		0		0		0		1,863		15,062		88		0		17,013
Pass-Watch		0		0		0		0		0		201		0		0		201
Special Mention																				Special Mention	0		0		0		0		0		0		0		0		0
Substandard	Substandard	0		0		0		0		0		2,301		0		0		2,301		Substandard	0		0		0		0		0		1,180		0		0		1,180

Land Development	Land Development	$	0	$	0	$	6,295	$	2,572	$	1,085	$	3,212	$	1,461	$	0	$	14,625	Land Development	$	0	$	0	$	0	$	8,475	$	697	$	2,966	$	3	$	0	$	12,141
Pass	Pass	0		0		6,295		2,549		1,085		1,842		1,461		0		13,232		Pass	0		0		0		8,475		677		1,498		3		0		10,653
Pass-Watch		0		0		0		0		0		0		0		0		0
Special Mention																				Special Mention	0		0		0		0		0		0		0		0		0
Substandard	Substandard	0		0		0		23		0		1,370		0		0		1,393		Substandard	0		0		0		0		20		1,468		0		0		1,488

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


		Term Loans Amortized Cost Basis by Origination Year																			Term Loans Amortized Cost Basis by Origination Year
		2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans			2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
Real Estate - Commercial Mortgage	Real Estate - Commercial Mortgage	$	0	$	0	$	77,627	$	158,074	$	180,313	$	482,175	$	21,918	$	4,684	$	924,791	Real Estate - Commercial Mortgage	$	0	$	0	$	0	$	72,095	$	160,878	$	575,810	$	20,364	$	4,551	$	833,698
Owner-Occupied	Owner-Occupied	$	0	$	0	$	14,819	$	34,515	$	63,851	$	204,177	$	15,144	$	2	$	332,508	Owner-Occupied	$	0	$	0	$	0	$	14,539	$	33,862	$	225,908	$	3,632	$	2	$	277,943
Pass	Pass	0		0		12,732		31,558		44,681		157,159		4,987		0		251,117		Pass	0		0		0		14,539		28,985		190,103		3,605		0		237,232
Pass-Watch		0		0		2,087		1,615		11,202		24,427		0		0		39,331
Special Mention																				Special Mention	0		0		0		0		1,596		11,187		0		0		12,783
Substandard	Substandard	0		0		0		1,342		7,968		22,591		10,157		2		42,060		Substandard	0		0		0		0		3,281		24,618		27		2		27,928

Non-Owner Occupied	Non-Owner Occupied	$	0	$	0	$	56,269	$	119,256	$	113,496	$	264,440	$	6,596	$	4,682	$	564,739	Non-Owner Occupied	$	0	$	0	$	0	$	55,609	$	123,232	$	335,246	$	16,500	$	4,549	$	535,136
Pass	Pass	0		0		31,398		87,363		69,930		219,100		6,596		0		414,387		Pass	0		0		0		36,677		115,553		291,494		6,447		0		450,171
Pass-Watch		0		0		8,504		24,215		30,691		33,749		0		4,682		101,841
Special Mention																				Special Mention	0		0		0		2,561		0		7,877		0		0		10,438
Substandard	Substandard	0		0		16,367		7,678		12,875		11,591		0		0		48,511		Substandard	0		0		0		16,371		7,679		35,875		10,053		4,549		74,527

Land Development	Land Development	$	0	$	0	$	6,539	$	4,303	$	2,966	$	13,558	$	178	$	0	$	27,544	Land Development	$	0	$	0	$	0	$	1,947	$	3,784	$	14,656	$	232	$	0	$	20,619
Pass	Pass	0		0		5,665		4,249		2,785		6,000		66		0		18,765		Pass	0		0		0		1,947		3,784		8,017		232		0		13,980
Pass-Watch		0		0		874		54		44		6,141		112		0		7,225
Special Mention																				Special Mention	0		0		0		0		0		5,306		0		0		5,306
Substandard	Substandard	0		0		0		0		137		1,417		0		0		1,554		Substandard	0		0		0		0		0		1,333		0		0		1,333

Installment loans to individuals																				Installment loans to individuals	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Pass																				Pass	0		0		0		0		0		0		0		0		0
Special Mention																				Special Mention	0		0		0		0		0		0		0		0		0
Substandard																				Substandard	0		0		0		0		0		0		0		0		0

Total loans subject to risk rating	Total loans subject to risk rating	$	0	$	727	$	138,663	$	210,903	$	225,457	$	547,346	$	89,785	$	6,649	$	1,219,530	Total loans subject to risk rating	$	0	$	0	$	695	$	116,871	$	185,656	$	659,412	$	78,324	$	5,777	$	1,046,735
Pass	Pass	0		727		96,421		167,570		155,573		434,295		69,250		628		924,464		Pass	0		0		695		94,247		166,646		558,204		60,007		480		880,279
Pass-Watch		0		0		11,475		27,154		43,436		65,416		788		4,682		152,951
Special Mention																				Special Mention	0		0		0		2,902		1,683		25,429		0		0		30,014
Substandard	Substandard	0		0		30,767		16,179		26,448		47,635		19,747		1,339		142,115		Substandard	0		0		0		19,722		17,327		75,779		18,317		5,297		136,442

~~The following table presents the performing status of the Company’s loan portfolio not subject to risk rating by origination date:~~

Term Loans Amortized Cost Basis by Origination Year
2020 2019 2018 2017 2016 Prior Revolving Loans Revolving Loans Converted to Term Total
Loans
September 30, 2020
Commercial, Financial, Agricultural $ 0 $ 0 $ 491 $ 355 $ 330 $ 2,846 $ 6,825 $ 49 $ 10,896
Performing Loans 0 0 491 355 330 2,846 6,825 49 10,896
Non-Performing Loans 0 0 0 0 0 0 0 0 0
Real Estate - Construction $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Residential $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Performing Loans 0 0 0 0 0 0 0 0 0
Non-Performing Loans 0 0 0 0 0 0 0 0 0
Real Estate - 1-4 Family Mortgage $ 0 $ 375 $ 3,264 $ 43,061 $ 32,608 $ 156,497 $ 84,500 $ 2,177 $ 322,482
Primary $ 0 $ 250 $ 2,029 $ 38,366 $ 30,249 $ 142,336 $ 461 $ 112 $ 213,803
Performing Loans 0 250 1,918 37,605 30,227 137,837 461 26 208,324
Non-Performing Loans 0 0 111 761 22 4,499 0 86 5,479
Home Equity $ 0 $ 0 $ 744 $ 4,472 $ 1,799 $ 1,040 $ 83,919 $ 2,065 $ 94,039
Performing Loans 0 0 744 4,472 1,799 973 83,274 1,640 92,902
Non-Performing Loans 0 0 0 0 0 67 645 425 1,137
Rental/Investment $ 0 $ 125 $ 0 $ 150 $ 203 $ 11,736 $ 120 $ 0 $ 12,334
Performing Loans 0 125 0 150 203 11,632 120 0 12,230
Non-Performing Loans 0 0 0 0 0 104 0 0 104
Land Development $ 0 $ 0 $ 491 $ 73 $ 357 $ 1,385 $ 0 $ 0 $ 2,306
Performing Loans 0 0 491 30 118 1,385 0 0 2,024


	Term Loans Amortized Cost Basis by Origination Year
	2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
December 31, 2020
Commercial, Financial, Agricultural	$	0	$	711	$	28,242	$	27,222	$	22,377	$	20,759	$	64,563	$	1,788	$	165,662
Pass	0		711		24,211		20,930		17,240		16,880		56,736		409		137,117
Special Mention	0		0		357		97		104		0		0		0		558
Substandard	0		0		3,674		6,195		5,033		3,879		7,827		1,379		27,987






Real Estate - Construction	$	0	$	0	$	10,522	$	9,228	$	10,781	$	0	$	0	$	0	$	30,531
Residential	$	0	$	0	$	1,543	$	211	$	684	$	0	$	0	$	0	$	2,438
Pass	0		0		1,543		211		684		0		0		0		2,438
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		0		0		0

Commercial	$	0	$	0	$	8,979	$	9,017	$	10,097	$	0	$	0	$	0	$	28,093
Pass	0		0		8,979		9,017		10,097		0		0		0		28,093
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		0		0		0

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Notes to Consolidated Financial Statements (Unaudited)

Term Loans Amortized Cost Basis by Origination Year
2020 2019 2018 2017 2016 Prior Revolving Loans Revolving Loans Converted to Term Total
Loans
Non-Performing Loans 0 0 0 43 239 0 0 0 282
Real Estate - Commercial Mortgage $ 0 $ 339 $ 620 $ 1,339 $ 998 $ 36,416 $ 1,864 $ 0 $ 41,576
Owner-Occupied $ 0 $ 0 $ 0 $ 955 $ 670 $ 20,457 $ 1,404 $ 0 $ 23,486
Performing Loans 0 0 0 955 670 20,175 1,404 0 23,204
Non-Performing Loans 0 0 0 0 0 282 0 0 282
Non-Owner Occupied $ 0 $ 339 $ 463 $ 50 $ 67 $ 11,854 $ 167 $ 0 $ 12,940
Performing Loans 0 339 463 50 67 11,656 167 0 12,742
Non-Performing Loans 0 0 0 0 0 198 0 0 198
Land Development $ 0 $ 0 $ 157 $ 334 $ 261 $ 4,105 $ 293 $ 0 $ 5,150
Performing Loans 0 0 157 334 261 4,044 293 0 5,089
Non-Performing Loans 0 0 0 0 0 61 0 0 61
Installment loans to individuals $ 0 $ 0 $ 39,966 $ 17,061 $ 1,265 $ 4,497 $ 3,206 $ 35 $ 66,030
Performing Loans 0 0 39,901 16,985 1,187 4,375 3,206 35 65,689
Non-Performing Loans 0 0 65 76 78 122 0 0 341
Total loans not subject to risk rating $ 0 $ 714 $ 44,341 $ 61,816 $ 35,201 $ 200,256 $ 96,395 $ 2,261 $ 440,984
Performing Loans 0 714 44,165 60,936 34,862 194,923 95,750 1,750 433,100
Non-Performing Loans 0 0 176 880 339 5,333 645 511 7,884


	Term Loans Amortized Cost Basis by Origination Year
	2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
Real Estate - 1-4 Family Mortgage	$	0	$	0	$	14,022	$	7,126	$	1,112	$	38,747	$	957	$	253	$	62,217
Primary	$	0	$	0	$	6,873	$	3,212	$	595	$	17,223	$	249	$	0	$	28,152
Pass	0		0		5,556		3,212		594		12,665		249		0		22,276
Special Mention	0		0		0		0		0		1,120		0		0		1,120
Substandard	0		0		1,317		0		1		3,438		0		0		4,756

Home Equity	$	0	$	0	$	0	$	0	$	0	$	0	$	697	$	253	$	950
Pass	0		0		0		0		0		0		59		0		59
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		638		253		891

Rental/Investment	$	0	$	0	$	0	$	1,883	$	232	$	18,275	$	9	$	0	$	20,399
Pass	0		0		0		1,883		232		16,139		9		0		18,263
Special Mention	0		0		0		0		0		44		0		0		44
Substandard	0		0		0		0		0		2,092		0		0		2,092

Land Development	$	0	$	0	$	7,149	$	2,031	$	285	$	3,249	$	2	$	0	$	12,716
Pass	0		0		7,149		2,009		285		1,793		2		0		11,238
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		22		0		1,456		0		0		1,478

Real Estate - Commercial Mortgage	$	0	$	0	$	76,557	$	153,960	$	171,487	$	435,073	$	22,631	$	4,688	$	864,396
Owner-Occupied	$	0	$	0	$	15,001	$	32,567	$	61,568	$	181,007	$	9,723	$	2	$	299,868
Pass	0		0		15,001		29,276		43,962		161,790		5,808		0		255,837
Special Mention	0		0		0		0		9,670		0		0		0		9,670
Substandard	0		0		0		3,291		7,936		19,217		3,915		2		34,361

Non-Owner Occupied	$	0	$	0	$	55,962	$	117,592	$	107,004	$	242,249	$	12,720	$	4,686	$	540,213
Pass	0		0		37,002		109,910		83,738		221,423		6,431		0		458,504
Special Mention	0		0		2,591		0		5,302		2,622		0		0		10,515
Substandard	0		0		16,369		7,682		17,964		18,204		6,289		4,686		71,194

Land Development	$	0	$	0	$	5,594	$	3,801	$	2,915	$	11,817	$	188	$	0	$	24,315
Pass	0		0		5,594		3,801		2,780		4,962		188		0		17,325
Special Mention	0		0		0		0		0		5,438		0		0		5,438
Substandard	0		0		0		0		135		1,417		0		0		1,552

Installment loans to individuals	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Pass	0		0		0		0		0		0		0		0		0
Special Mention	0		0		0		0		0		0		0		0		0
Substandard	0		0		0		0		0		0		0		0		0

Total loans subject to risk rating	$	0	$	711	$	129,343	$	197,536	$	205,757	$	494,579	$	88,151	$	6,729	$	1,122,806
Pass	0		711		105,035		180,249		159,612		435,652		69,482		409		951,150
Special Mention	0		0		2,948		97		15,076		9,224		0		0		27,345
Substandard	0		0		21,360		17,190		31,069		49,703		18,669		6,320		144,311

The following ~~disclosures are presented under GAAP in effect prior to the adoption of CECL. The Company has included these disclosures to address the applicable prior period.~~

A discussion of the Company’s policies regarding internal risk-rating of loans is discussed above in Note 3, “Non Purchased Loans,” and is applicable to these tables. The following table presents the Company’s loan portfolio by internal risk-rating grades as of the date presented:

Pass Pass-Watch Substandard Total
December 31, 2019
Commercial, financial, agricultural $ 259,760 $ 7,166 $ 5,220 $ 272,146
Real estate – construction 48,994 0 0 48,994
Real estate – 1-4 family mortgage 78,105 791 3,935 82,831
Real estate – commercial mortgage 909,513 56,334 15,835 981,682
Installment loans to individuals 0 0 0 0
Total $ 1,296,372 $ 64,291 $ 24,990 $ 1,385,653

~~The following table presents~~tables present the performing status of the Company’s loan portfolio not subject to risk rating ~~as of the date presented:~~

by origination date:

3025

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Performing Non-
Performing Total
December 31, 2019
Commercial, financial, agricultural $ 13,935 $ 0 $ 13,935
Real estate – construction 1,725 0 1,725
Real estate – 1-4 family mortgage 394,476 3,638 398,114
Real estate – commercial mortgage 30,472 101 30,573
Installment loans to individuals 99,139 261 99,400
Total $ 539,747 $ 4,000 $ 543,747

~~Impaired Loans~~

~~The Company’s former policies with respect to the determination of whether a loan is impaired and the treatment of such loans are described above in Note 3, “Non Purchased Loans.”~~

~~Loans formerly accounted for under ASC 310-20, and which are impaired loans recognized in conformity with ASC 310, segregated by class, were as follows as of the date presented:~~

Unpaid
Contractual
Principal
Balance Recorded
Investment
With
Allowance Recorded
Investment
With No
Allowance Total
Recorded
Investment Related
Allowance
December 31, 2019
Commercial, financial, agricultural $ 2,979 $ 1,837 $ 901 $ 2,738 $ 212
Real estate – construction 3,269 2,499 772 3,271 16
Real estate – 1-4 family mortgage 7,464 2,801 3,772 6,573 17
Real estate – commercial mortgage 1,148 981 128 1,109 6
Installment loans to individuals 202 110 71 181 2
Totals $ 15,062 $ 8,228 $ 5,644 $ 13,872 $ 253

Three Months Ended Nine Months Ended
September 30, 2019 September 30, 2019
Average
Recorded
Investment Interest
Income
Recognized Average
Recorded
Investment Interest
Income
Recognized
Commercial, financial, agricultural $ 2,533 $ 2 $ 2,312 $ 6
Real estate – construction 256 0 256 3
Real estate – 1-4 family mortgage 5,364 30 5,468 96
Real estate – commercial mortgage 1,150 11 1,185 36
Installment loans to individuals 333 0 340 0
Total $ 9,636 $ 43 $ 9,561 $ 141

~~Loans formerly accounted for under ASC 310-30, and which are impaired loans recognized in conformity with ASC 310, segregated by class, were as follows as of the date presented:~~


	Term Loans Amortized Cost Basis by Origination Year
	2021		2020		2019		2018		2017		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
March 31, 2021
Commercial, Financial, Agricultural	$	0	$	0	$	0	$	412	$	384	$	3,004	$	5,260	$	239	$	9,299
Performing Loans	0		0		0		412		384		3,004		5,240		239		9,279
Non-Performing Loans	0		0		0		0		0		0		20		0		20





Real Estate - Construction	$	0	$	0	$	0	$	421	$	0	$	0	$	0	$	0	$	421
Residential	$	0	$	0	$	0	$	421	$	0	$	0	$	0	$	0	$	421
Performing Loans	0		0		0		421		0		0		0		0		421
Non-Performing Loans	0		0		0		0		0		0		0		0		0

Commercial	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Performing Loans	0		0		0		0		0		0		0		0		0
Non-Performing Loans	0		0		0		0		0		0		0		0		0

Real Estate - 1-4 Family Mortgage	$	0	$	0	$	368	$	2,520	$	29,796	$	149,758	$	63,625	$	2,492	$	248,559
Primary	$	0	$	0	$	246	$	1,899	$	26,826	$	135,980	$	233	$	97	$	165,281
Performing Loans	0		0		246		1,789		26,072		131,995		233		24		160,359
Non-Performing Loans	0		0		0		110		754		3,985		0		73		4,922

Home Equity	$	0	$	0	$	0	$	550	$	2,702	$	2,504	$	63,272	$	2,395	$	71,423
Performing Loans	0		0		0		550		2,702		2,416		62,569		1,975		70,212
Non-Performing Loans	0		0		0		0		0		88		703		420		1,211

Rental/Investment	$	0	$	0	$	122	$	0	$	196	$	10,169	$	120	$	0	$	10,607
Performing Loans	0		0		122		0		196		10,080		120		0		10,518
Non-Performing Loans	0		0		0		0		0		89		0		0		89

Land Development	$	0	$	0	$	0	$	71	$	72	$	1,105	$	0	$	0	$	1,248
Performing Loans	0		0		0		71		72		1,105		0		0		1,248
Non-Performing Loans	0		0		0		0		0		0		0		0		0

Real Estate - Commercial Mortgage	$	0	$	0	$	334	$	1,230	$	994	$	34,460	$	2,151	$	0	$	39,169
Owner-Occupied	$	0	$	0	$	0	$	654	$	607	$	19,757	$	1,655	$	0	$	22,673
Performing Loans	0		0		0		654		607		19,437		1,655		0		22,353
Non-Performing Loans	0		0		0		0		0		320		0		0		320

Non-Owner Occupied	$	0	$	0	$	334	$	424	$	0	$	10,347	$	422	$	0	$	11,527
Performing Loans	0		0		334		424		0		10,215		422		0		11,395
Non-Performing Loans	0		0		0		0		0		132		0		0		132

Land Development	$	0	$	0	$	0	$	152	$	387	$	4,356	$	74	$	0	$	4,969
Performing Loans	0		0		0		152		387		4,301		74		0		4,914
Non-Performing Loans	0		0		0		0		0		55		0		0		55

Installment loans to individuals	$	0	$	0	$	0	$	30,610	$	13,880	$	5,004	$	2,179	$	50	$	51,723
Performing Loans	0		0		0		30,572		13,826		4,849		2,174		28		51,449
Non-Performing Loans	0		0		0		38		54		155		5		22		274

Total loans not subject to risk rating	$	0	$	0	$	702	$	35,193	$	45,054	$	192,226	$	73,215	$	2,781	$	349,171
Performing Loans	0		0		702		35,045		44,246		187,402		72,487		2,266		342,148
Non-Performing Loans	0		0		0		148		808		4,824		728		515		7,023

3126

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Unpaid
Contractual
Principal
Balance Recorded
Investment
With
Allowance Recorded
Investment
With No
Allowance Total
Recorded
Investment Related
Allowance
December 31, 2019
Commercial, financial, agricultural $ 49,162 $ 3,695 $ 25,843 $ 29,538 $ 292
Real estate – construction 882 0 863 863 0
Real estate – 1-4 family mortgage 42,969 10,061 25,482 35,543 291
Real estate – commercial mortgage 119,929 52,501 50,632 103,133 1,386
Installment loans to individuals 5,411 640 2,547 3,187 2
Totals $ 218,353 $ 66,897 $ 105,367 $ 172,264 $ 1,971


	Term Loans Amortized Cost Basis by Origination Year
	2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
December 31, 2020
Commercial, Financial, Agricultural	$	0	$	0	$	445	$	349	$	303	$	2,899	$	6,809	$	46	$	10,851
Performing Loans	0		0		445		349		303		2,899		6,784		46		10,826
Non-Performing Loans	0		0		0		0		0		0		25		0		25





Real Estate - Construction	$	0	$	0	$	421	$	0	$	0	$	0	$	0	$	0	$	421
Residential	$	0	$	0	$	421	$	0	$	0	$	0	$	0	$	0	$	421
Performing Loans	0		0		421		0		0		0		0		0		421
Non-Performing Loans	0		0		0		0		0		0		0		0		0

Commercial	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Performing Loans	0		0		0		0		0		0		0		0		0
Non-Performing Loans	0		0		0		0		0		0		0		0		0

Real Estate - 1-4 Family Mortgage	$	0	$	371	$	3,082	$	33,674	$	28,169	$	140,689	$	70,870	$	2,672	$	279,527
Primary	$	0	$	248	$	1,953	$	30,078	$	25,956	$	127,642	$	630	$	111	$	186,618
Performing Loans	0		248		1,842		29,321		25,935		122,970		630		25		180,971
Non-Performing Loans	0		0		111		757		21		4,672		0		86		5,647

Home Equity	$	0	$	0	$	742	$	3,324	$	1,668	$	1,027	$	70,120	$	2,561	$	79,442
Performing Loans	0		0		742		3,324		1,668		960		69,518		2,124		78,336
Non-Performing Loans	0		0		0		0		0		67		602		437		1,106

Rental/Investment	$	0	$	123	$	0	$	200	$	193	$	10,893	$	120	$	0	$	11,529
Performing Loans	0		123		0		200		193		10,800		120		0		11,436
Non-Performing Loans	0		0		0		0		0		93		0		0		93

Land Development	$	0	$	0	$	387	$	72	$	352	$	1,127	$	0	$	0	$	1,938
Performing Loans	0		0		387		30		117		1,127		0		0		1,661
Non-Performing Loans	0		0		0		42		235		0		0		0		277

Real Estate - Commercial Mortgage	$	0	$	337	$	597	$	1,063	$	982	$	35,946	$	1,902	$	0	$	40,827
Owner-Occupied	$	0	$	0	$	0	$	625	$	660	$	20,531	$	1,357	$	0	$	23,173
Performing Loans	0		0		0		625		660		20,253		1,357		0		22,895
Non-Performing Loans	0		0		0		0		0		278		0		0		278

Non-Owner Occupied	$	0	$	337	$	443	$	49	$	66	$	11,467	$	153	$	0	$	12,515
Performing Loans	0		337		443		49		66		11,331		153		0		12,379
Non-Performing Loans	0		0		0		0		0		136		0		0		136

Land Development	$	0	$	0	$	154	$	389	$	256	$	3,948	$	392	$	0	$	5,139
Performing Loans	0		0		154		389		256		3,890		392		0		5,081
Non-Performing Loans	0		0		0		0		0		58		0		0		58

Installment loans to individuals	$	0	$	0	$	34,976	$	15,497	$	1,118	$	4,348	$	3,676	$	60	$	59,675
Performing Loans	0		0		34,942		15,405		1,051		4,262		3,676		29		59,365
Non-Performing Loans	0		0		34		92		67		86		0		31		310

Total loans not subject to risk rating	$	0	$	708	$	39,521	$	50,583	$	30,572	$	183,882	$	83,257	$	2,778	$	391,301
Performing Loans	0		708		39,376		49,692		30,249		178,492		82,630		2,224		383,371
Non-Performing Loans	0		0		145		891		323		5,390		627		554		7,930

~~The following table presents the average recorded investment and interest income recognized on loans formerly accounted for under ASC 310-30 and which are impaired loans for the period presented:~~

Three Months Ended Nine Months Ended
September 30, 2019 September 30, 2019
Average
Recorded
Investment Interest
Income
Recognized Average
Recorded
Investment Interest
Income
Recognized
Commercial, financial, agricultural $ 32,150 $ 283 $ 35,304 $ 1,145
Real estate – construction 558 8 560 8
Real estate – 1-4 family mortgage 38,031 538 38,682 1,699
Real estate – commercial mortgage 117,179 1,541 119,327 5,015
Installment loans to individuals 3,192 86 3,576 287
Total $ 191,110 $ 2,456 $ 197,449 $ 8,154

~~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 date presented:


	~~Total Purchased Credit Deteriorated Loans~~








~~December 31, 2019~~
~~Commercial, financial, agricultural~~	$	~~29,538~~

~~Real estate – construction~~	~~863~~
~~Real estate – 1-4 family mortgage~~	~~35,543~~
~~Real estate – commercial mortgage~~	~~103,133~~
~~Installment loans to individuals~~	~~3,187~~
~~Total~~	$	~~172,264~~

3227

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 5 – Allowance for Credit Losses

(In Thousands)

The following is a summary of total non purchased and purchased loans as of the dates presented:


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
Commercial, financial, agricultural	Commercial, financial, agricultural	$	2,648,062	$	1,367,972	Commercial, financial, agricultural	$	2,249,287	$	2,536,984
Lease financing	Lease financing	87,257		85,700		Lease financing	79,271		80,022
Real estate – construction:	Real estate – construction:					Real estate – construction:
Residential	Residential	264,525		289,050		Residential	255,356		246,673
Commercial	Commercial	508,594		537,433		Commercial	700,562		611,431
Total real estate – construction	Total real estate – construction	773,119		826,483		Total real estate – construction	955,918		858,104
Real estate – 1-4 family mortgage:	Real estate – 1-4 family mortgage:					Real estate – 1-4 family mortgage:
Primary	Primary	1,762,897		1,781,948		Primary	1,766,751		1,750,951
Home equity	Home equity	537,615		573,540		Home equity	504,620		513,160
Rental/investment	Rental/investment	306,378		335,100		Rental/investment	285,779		296,364
Land development	Land development	153,504		176,025		Land development	128,911		137,833
Total real estate – 1-4 family mortgage	Total real estate – 1-4 family mortgage	2,760,394		2,866,613		Total real estate – 1-4 family mortgage	2,686,061		2,698,308
Real estate – commercial mortgage:	Real estate – commercial mortgage:					Real estate – commercial mortgage:
Owner-occupied	Owner-occupied	1,672,402		1,637,281		Owner-occupied	1,644,770		1,657,806
Non-owner occupied	Non-owner occupied	2,754,241		2,450,895		Non-owner occupied	2,767,869		2,747,467
Land development	Land development	150,366		156,089		Land development	136,388		149,579
Total real estate – commercial mortgage	Total real estate – commercial mortgage	4,577,009		4,244,265		Total real estate – commercial mortgage	4,549,027		4,554,852
Installment loans to individuals	Installment loans to individuals	243,226		302,430		Installment loans to individuals	172,859		209,537
Gross loans	Gross loans	11,089,067		9,693,463		Gross loans	10,692,423		10,937,807
Unearned income	Unearned income	(4,329)		(3,825)		Unearned income	(4,015)		(4,160)
Loans, net of unearned income	Loans, net of unearned income	11,084,738		9,689,638		Loans, net of unearned income	10,688,408		10,933,647
Allowance for credit losses on loans	Allowance for credit losses on loans	(168,098)		(52,162)		Allowance for credit losses on loans	(173,106)		(176,144)
Net loans	Net loans	$	10,916,640	$	9,637,476	Net loans	$	10,515,302	$	10,757,503

Allowance for Credit Losses on Loans

The allowance for credit losses is an estimate of expected losses inherent within the Company’s loans held for investment portfolio and is maintained at a level believed adequate by management to absorb credit losses inherent in the entire loan portfolio. Management evaluates the adequacy of the allowance for credit losses on a quarterly basis. Expected credit loss inherent in non-cancellable off-balance-sheet credit exposures is accounted for as a separate liability in the Consolidated Balance Sheets. The allowance for credit losses ~~for~~on loans held for investment, as reported in the Company’s Consolidated Balance Sheets, is adjusted by a provision for credit losses, which is reported in earnings, and reduced by net charge-offs. Loan losses are charged against the allowance for credit losses when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

~~The credit loss estimation process involves procedures to appropriately consider the unique characteristics of~~ For more information about the Company’s ~~loan portfolio segments. Credit quality is assessed~~policies and ~~monitored by evaluating various attributes, and the results of those evaluations are utilized in underwriting new loans and in the Company’s process~~procedures for the estimation of expected credit losses. Credit quality monitoring procedures and indicators can include an assessment of problem loans, the types of loans, historical loss experience, new lending products, emerging credit trends, changes in the size and character of loan categories and other factors, including the Company’s risk rating system, regulatory guidance and economic 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

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~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~~determining the amount of ~~expected credit losses reported in~~ the allowance for credit losses, please refer to the discussion in Note 1, “Significant Accounting Policies,” in the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

The Company 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,~~made an ~~asset-specific component involving individual loans that do not share risk characteristics with other loans and~~accounting policy election to exclude accrued interest from 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 9 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 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 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, the 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, storage facilities, etc. 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.

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

~~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,~~in the Company’s loan portfolio. As of March 31, 2021 and December 31, 2020, the Company ~~categorizes loan pools based~~had accrued interest receivable for loans of $56,199 and $56,459, respectively, which is recorded in the “Other assets” line item 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, 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 Commercial, Real Estate - Commercial Mortgage and Lease Financing portfolio segments,Consolidated Balance Sheets. Although the Company ~~uses a probability of default/loss given default model, which calculates an expected loss percentage for each loan pool by considering (a)~~made the ~~probability of default, based on~~election to exclude accrued interest from 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, the nature and volume of the respective loan portfolio segments, and changes in lending or loan review staffing. External factors include current and reasonable and supportable forecasted economic conditions, the competitive environment 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 dependent on the fair value of such collateral are updated every twelve months, either from external third parties or in-house certified appraisers. Third-party appraisals are obtained from a pre-approved list of independent, third-party, local appraisal firms. The fair value of the collateral derived from external appraisal is then adjusted for the estimated cost to sell if repayment or satisfaction of a loan is dependent on the sale (rather than only on the operation) of the collateral. Other acceptable methods for determining the expected credit losses for individually evaluated loans (typically used when the loan is not collateral dependent) is a discounted cash flow approach or, if applicable, an observable market price. Once the expected credit loss amount is determined, an allowance equal to such expected credit loss is included in the allowance for credit ~~losses.~~

losses, the Company did have an allowance for credit losses on interest deferred as part of the loan deferral program of $1,375 and $1,500, respectively, as of March 31, 2021 and December 31, 2020. The ~~Company considers the loans~~decrease in the ~~Real Estate - Construction, Real Estate - 1-4 Family Mortgage and Real Estate - Commercial Mortgage loan segments disclosed as individually evaluated in~~balance during the ~~table below as collateral dependent with~~first quarter of 2021 is due to the ~~type~~charge-off of ~~collateral being real estate.~~deferred interest balances.

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

The following ~~table provides~~tables provide a roll-forward of the allowance for credit losses by loan category and a breakdown of the ending balance of the allowance based on the Company’s credit loss methodology for the periods presented:


		Commercial		Real Estate - Construction		Real Estate - 1-4 Family Mortgage		Real Estate - Commercial Mortgage		Lease Financing		Installment Loans to Individuals		Total			Commercial		Real Estate - Construction		Real Estate - 1-4 Family Mortgage		Real Estate - Commercial Mortgage		Lease Financing		Installment Loans to Individuals		Total
Three Months Ended September 30, 2020
Three Months Ended March 31, 2021																Three Months Ended March 31, 2021
Allowance for credit losses:	Allowance for credit losses:															Allowance for credit losses:
Beginning balance	Beginning balance	$	30,685	$	12,538	$	29,401	$	60,061	$	1,812	$	10,890	$	145,387	Beginning balance	$	39,031	$	16,047	$	32,165	$	76,127	$	1,624	$	11,150	$	176,144

Charge-offs	Charge-offs	(420)		(136)		(720)		(553)		(168)		(1,579)		(3,576)		Charge-offs	(3,498)		(52)		(101)		(61)		0		(1,658)		(5,370)
Recoveries	Recoveries	698		31		152		711		1		1,594		3,187		Recoveries	289		13		261		171		11		1,587		2,332
Net (charge-offs) recoveries	Net (charge-offs) recoveries	278		(105)		(568)		158		(167)		15		(389)		Net (charge-offs) recoveries	(3,209)		(39)		160		110		11		(71)		(3,038)
Provision for credit losses on loans	Provision for credit losses on loans	7,232		1,386		3,872		10,363		187		60		23,100		Provision for credit losses on loans	1,770		(1,031)		(631)		(12)		(89)		(7)		0
Ending balance	Ending balance	$	38,195	$	13,819	$	32,705	$	70,582	$	1,832	$	10,965	$	168,098	Ending balance	$	37,592	$	14,977	$	31,694	$	76,225	$	1,546	$	11,072	$	173,106
Nine Months Ended September 30, 2020
Allowance for credit losses:
Beginning balance		$	10,658	$	5,029	$	9,814	$	24,990	$	910	$	761	$	52,162
Impact of the adoption of ASC 326		11,351		3,505		14,314		4,293		521		8,500		42,484
Charge-offs		(1,969)		(668)		(1,083)		(2,600)		(168)		(6,003)		(12,491)
Recoveries		996		31		288		2,451		11		5,816		9,593
Net (charge-offs) recoveries		(973)		(637)		(795)		(149)		(157)		(187)		(2,898)
Provision for credit losses on loans		17,159		5,922		9,372		41,448		558		1,891		76,350
Ending balance		$	38,195	$	13,819	$	32,705	$	70,582	$	1,832	$	10,965	$	168,098

Period-End Amount Allocated to:	Period-End Amount Allocated to:															Period-End Amount Allocated to:
Individually evaluated	Individually evaluated	$	10,211	$	0	$	275	$	380	$	0	$	270	$	11,136	Individually evaluated	$	9,908	$	0	$	232	$	4,846	$	0	$	607	$	15,593
Collectively evaluated	Collectively evaluated	27,984		13,819		32,430		70,202		1,832		10,695		156,962		Collectively evaluated	27,684		14,977		31,462		71,379		1,546		10,465		157,513
Ending balance	Ending balance	$	38,195	$	13,819	$	32,705	$	70,582	$	1,832	$	10,965	$	168,098	Ending balance	$	37,592	$	14,977	$	31,694	$	76,225	$	1,546	$	11,072	$	173,106
Loans:	Loans:															Loans:
Individually evaluated	Individually evaluated	$	17,670	$	0	$	4,718	$	6,596	$	0	$	618	$	29,602	Individually evaluated	$	15,435	$	0	$	6,311	$	18,508	$	0	$	621	$	40,875
Collectively evaluated	Collectively evaluated	2,630,392		773,119		2,755,676		4,570,413		82,928		242,608		11,055,136		Collectively evaluated	2,233,852		955,918		2,679,750		4,530,519		75,256		172,238		10,647,533
Ending balance	Ending balance	$	2,648,062	$	773,119	$	2,760,394	$	4,577,009	$	82,928	$	243,226	$	11,084,738	Ending balance	$	2,249,287	$	955,918	$	2,686,061	$	4,549,027	$	75,256	$	172,859	$	10,688,408

Nonaccruing loans with no allowance for credit losses	Nonaccruing loans with no allowance for credit losses	$	589	$	0	$	4,147	$	3,644	$	0	$	0	$	8,380	Nonaccruing loans with no allowance for credit losses	$	1,848	$	0	$	4,695	$	2,113	$	0	$	0	$	8,656

Upon adoption of ASC 326 on January 1, 2020, the allowance for credit losses on loans was increased by $42,484. The Company recorded a third quarter provision for credit losses on loans of $23,100 and has recorded $76,350 in total provision for credit losses on loans during the nine months ending September 30, 2020. The provision recorded during the current quarter and year-to-date period is primarily driven by the current and future economic uncertainty caused by the COVID-19 pandemic, including the current projections of a continued elevated national unemployment rate throughout 2020 and into 2021 and 2022 and forecasted negative to minimal GDP growth relative to pre-pandemic levels, and the increased likelihood of a more prolonged economic recovery period than previously expected. The Company also factored into its estimate the potential benefit and risk of the government programs implemented through the CARES Act and the internal loan deferral program

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Notes to Consolidated Financial Statements (Unaudited)

~~offered to qualified customers.~~



	Commercial		Real Estate - Construction		Real Estate - 1-4 Family Mortgage		Real Estate - Commercial Mortgage		Lease Financing		Installment Loans to Individuals		Total

Three Months Ended March 31, 2020
Allowance for credit losses:
Beginning balance	$	10,658	$	5,029	$	9,814	$	24,990	$	910	$	761	$	52,162
Impact of the adoption of ASC 326	11,351		3,505		14,314		4,293		521		8,500		42,484
Charge-offs	(393)		0		(221)		(2,047)		0		(2,688)		(5,349)
Recoveries	190		0		88		1,699		5		2,556		4,538
Net (charge-offs) recoveries	(203)		0		(133)		(348)		5		(132)		(811)
Provision for credit losses on loans	4,131		2,390		3,325		15,302		152		1,050		26,350
Ending balance	$	25,937	$	10,924	$	27,320	$	44,237	$	1,588	$	10,179	$	120,185









Period-End Amount Allocated to:
Individually evaluated	$	3,653	$	0	$	370	$	856	$	0	$	270	$	5,149
Collectively evaluated	22,284		10,924		26,950		43,381		1,588		9,909		115,036
Ending balance	$	25,937	$	10,924	$	27,320	$	44,237	$	1,588	$	10,179	$	120,185
Loans:
Individually evaluated	$	10,460	$	2,728	$	5,865	$	7,508	$	0	$	625	$	27,186
Collectively evaluated	1,414,116		785,167		2,840,436		4,301,200		84,679		316,593		9,742,191
Ending balance	$	1,424,576	$	787,895	$	2,846,301	$	4,308,708	$	84,679	$	317,218	$	9,769,377

Nonaccruing loans with no allowance for credit losses	$	4,224	$	2,728	$	3,309	$	2,594	$	0	$	0	$	12,855

The Company ~~utilized~~did 0t record a ~~two year~~provision for credit losses during the first quarter of 2021, as compared to a provision for credit losses on loans of $26,350 in the first quarter of 2020. The Company’s allowance for credit loss model considers economic projections, primarily the national unemployment rate and GDP, over a reasonable and supportable ~~forecast range~~period of two years. Based on the continual improvements in these forecasts over the last few quarters, the Company determined that additional provisioning during the current period. The Company continues its heightened monitoring efforts with respect to loans in certain industries the Company currently believes pose a greater risk in the current environment (i.e., hospitality and healthcare). In addition, the Company will continue to monitor the performancefirst quarter of ~~all portfolios, the severity and duration of the pandemic and potential subsequent recovery of the economic environment.~~2021 was not necessary.

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 period presented:

Commercial Real Estate -
Construction Real Estate -
1-4 Family
Mortgage Real Estate -
Commercial
Mortgage
Installment
and Other(1)
Total
Three Months Ended September 30, 2019
Allowance for credit losses:
Beginning balance $ 9,534 $ 5,302 $ 9,616 $ 24,302 $ 1,305 $ 50,059
Charge-offs (757) 0 (268) (677) (3,263) (4,965)
Recoveries 761 0 219 33 3,007 4,020
Net (charge-offs) recoveries 4 0 (49) (644) (256) (945)
Provision for credit losses on loans 750 (175) 282 381 462 1,700
Ending balance $ 10,288 $ 5,127 $ 9,849 $ 24,039 $ 1,511 $ 50,814
Nine Months Ended September 30, 2019
Allowance for credit losses:
Beginning balance $ 8,269 $ 4,755 $ 10,139 $ 24,492 $ 1,371 $ 49,026
Charge-offs (1,709) 0 (1,143) (1,406) (3,695) (7,953)
Recoveries 1,376 7 531 644 3,083 5,641
Net (charge-offs) recoveries (333) 7 (612) (762) (612) (2,312)
Provision for credit losses on loans 2,352 365 322 309 752 4,100
Ending balance $ 10,288 $ 5,127 $ 9,849 $ 24,039 $ 1,511 $ 50,814
Period-End Amount Allocated to:
Individually evaluated for impairment $ 1,382 $ 24 $ 186 $ 450 $ 3 $ 2,045
Collectively evaluated for impairment 8,778 5,103 9,313 21,521 1,506 46,221
Purchased with deteriorated credit quality 128 0 350 2,068 2 2,548
Ending balance $ 10,288 $ 5,127 $ 9,849 $ 24,039 $ 1,511 $ 50,814

~~(1)Includes lease financing receivables.~~

~~The following table provides the recorded investment in loans, net of unearned income, based on the Company’s former impairment methodology prior to the adoption of ASC 326.~~

Commercial Real Estate -
Construction Real Estate -
1-4 Family
Mortgage Real Estate -
Commercial
Mortgage
Installment
and Other(1)
Total
December 31, 2019
Individually evaluated for impairment $ 8,460 $ 12,416 $ 20,262 $ 9,550 $ 491 $ 51,179
Collectively evaluated for impairment 1,329,974 813,204 2,810,808 4,131,582 380,627 9,466,195
Purchased with deteriorated credit quality 29,538 863 35,543 103,133 3,187 172,264
Ending balance $ 1,367,972 $ 826,483 $ 2,866,613 $ 4,244,265 $ 384,305 $ 9,689,638

~~(1)Includes lease financing receivables.~~

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Allowance for Credit Losses on Unfunded Loan Commitments

The Company maintains a separate allowance for credit losses on unfunded loan commitments, which is included in the “Other liabilities” line item on the Consolidated Balance Sheets. ~~Management estimates~~For more information about the Company’s policies and procedures for determining 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~~unfunded loan commitments, please refer to ~~unfunded commitments~~the discussion in Note 1, “Significant Accounting Policies,” in the Notes to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in the Company’s Annual Report on Form 10-K for ~~each loan type. No credit loss estimate is reported for off-balance-sheet credit exposures that are unconditionally cancellable by~~ the ~~Company.~~ year ended December 31, 2020.

The following tables provide a roll-forward of the allowance for credit losses on unfunded loan commitments for the periods presented.

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)



Three Months Ended ~~September 30, 2020~~March 31, 2021
Allowance for credit losses on unfunded loan commitments:
Beginning balance	$	~~17,335~~20,535

Provision for credit losses on unfunded loan commitments (included in other noninterest expense)	~~2,700~~0
Ending balance	$	~~20,035~~20,535








~~Nine~~Three Months Ended ~~September 30,~~March 31, 2020
Allowance for credit losses on unfunded loan commitments:
Beginning balance	$	946
Impact of the adoption of ASC 326	10,389
Provision for credit losses on unfunded loan commitments (included in other noninterest expense)	~~8,700~~3,400
Ending balance	$	~~20,035~~14,735

Note 6 – Other Real Estate Owned

(In Thousands)

The following ~~table provides~~tables provide 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 OREO		Non Purchased OREO		Total OREO			Purchased OREO		Non Purchased OREO		Total OREO
September 30, 2020
March 31, 2021								March 31, 2021
Residential real estate	Residential real estate	$	754	$	1,116	$	1,870	Residential real estate	$	405	$	79	$	484
Commercial real estate	Commercial real estate	1,605		798		2,403		Commercial real estate	1,161		1,948		3,109
Residential land development	Residential land development	345		1,324		1,669		Residential land development	337		4		341
Commercial land development	Commercial land development	1,873		338		2,211		Commercial land development	1,776		261		2,037

Total	Total	$	4,577	$	3,576	$	8,153	Total	$	3,679	$	2,292	$	5,971
December 31, 2019
December 31, 2020								December 31, 2020
Residential real estate	Residential real estate	$	890	$	415	$	1,305	Residential real estate	$	72	$	107	$	179
Commercial real estate	Commercial real estate	2,106		1,548		3,654		Commercial real estate	1,741		924		2,665
Residential land development	Residential land development	530		369		899		Residential land development	337		676		1,013
Commercial land development	Commercial land development	1,722		430		2,152		Commercial land development	1,777		338		2,115

Total	Total	$	5,248	$	2,762	$	8,010	Total	$	3,927	$	2,045	$	5,972

Changes in the Company’s purchased and non purchased OREO were as follows:


	Purchased OREO		Non Purchased OREO		Total OREO
Balance at January 1, 2021	$	3,927	$	2,045	$	5,972


Transfers of loans	516		1,523		2,039

Impairments	0		(70)		(70)
Dispositions	(700)		(1,206)		(1,906)
Other	(64)		0		(64)
Balance at March 31, 2021	$	3,679	$	2,292	$	5,971

At March 31, 2021 and December 31, 2020, the amortized cost of loans secured by Real Estate - 1-4 Family Mortgage in the process of foreclosure was $1,830 and $1,308, respectively.

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Purchased
OREO Non Purchased OREO Total
OREO
Balance at January 1, 2020 $ 5,248 $ 2,762 $ 8,010
Transfers of loans 3,486 4,401 7,887
Impairments (1,232) (415) (1,647)
Dispositions (2,875) (3,172) (6,047)
Other (50) 0 (50)
Balance at September 30, 2020 $ 4,577 $ 3,576 $ 8,153

Components of the line item “Other real estate owned” in the Consolidated Statements of Income were as follows for the periods presented:


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30,				September 30,					March 31,
		2020		2019		2020		2019			2021		2020
Repairs and maintenance	Repairs and maintenance	$	64	$	94	$	234	$	306	Repairs and maintenance	$	20	$	86
Property taxes and insurance	Property taxes and insurance	35		43		186		169		Property taxes and insurance	11		133
Impairments	Impairments	820		253		1,647		1,121		Impairments	70		197
Net losses on OREO sales		117		31		27		91
Net (gains) losses on OREO sales										Net (gains) losses on OREO sales	(56)		12
Rental income	Rental income	(3)		(3)		(23)		(13)		Rental income	(4)		(10)
Total	Total	$	1,033	$	418	$	2,071	$	1,674	Total	$	41	$	418

Note 7 – Goodwill and Other Intangible Assets

(In Thousands)

The carrying amounts of goodwill by operating segments for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 were as follows:

Community Banks Insurance Total
Balance at January 1, 2020 $ 936,916 $ 2,767 $ 939,683
Addition to goodwill from acquisition 0 0 0
Balance at September 30, 2020 $ 936,916 $ 2,767 $ 939,683


	Community Banks		Insurance		Total
Balance at January 1, 2021	$	936,916	$	2,767	$	939,683
Additions to goodwill and other adjustments	0		0		0
Balance at March 31, 2021	$	936,916	$	2,767	$	939,683

The following table provides a summary of finite-lived intangible assets as of the dates presented:


		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount			Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
September 30, 2020
March 31, 2021								March 31, 2021
Core deposit intangibles	Core deposit intangibles	$	82,492	$	(51,925)	$	30,567	Core deposit intangibles	$	82,492	$	(55,091)	$	27,401
Customer relationship intangible	Customer relationship intangible	2,470		(1,239)		1,231		Customer relationship intangible	2,470		(1,329)		1,141
Total finite-lived intangible assets	Total finite-lived intangible assets	$	84,962	$	(53,164)	$	31,798	Total finite-lived intangible assets	$	84,962	$	(56,420)	$	28,542
December 31, 2019
December 31, 2020								December 31, 2020
Core deposit intangibles	Core deposit intangibles	$	82,492	$	(46,599)	$	35,893	Core deposit intangibles	$	82,492	$	(53,539)	$	28,953
Customer relationship intangible	Customer relationship intangible	2,470		(1,103)		1,367		Customer relationship intangible	2,470		(1,284)		1,186
Total finite-lived intangible assets	Total finite-lived intangible assets	$	84,962	$	(47,702)	$	37,260	Total finite-lived intangible assets	$	84,962	$	(54,823)	$	30,139

Current year amortization expense for finite-lived intangible assets is presented in the table below.


	Three Months Ended
	March 31,
	2021		2020
Amortization expense for:
Core deposit intangibles	$	1,553	$	1,850
Customer relationship intangible	45		45
Total intangible amortization	$	1,598	$	1,895

The estimated amortization expense of finite-lived intangible assets for the year ending December 31, 2021 and the succeeding four years is summarized as follows:

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
2020 2019 2020 2019
Amortization expense for:
Core deposit intangibles $ 1,688 $ 1,963 $ 5,326 $ 6,060
Customer relationship intangible 45 33 136 99
Total intangible amortization $ 1,733 $ 1,996 $ 5,462 $ 6,159

~~The estimated amortization expense of finite-lived intangible assets for the year ending December 31, 2020 and the succeeding four years is summarized as follows:~~


		Core Deposit Intangibles		Customer Relationship Intangible		Total			Core Deposit Intangibles		Customer Relationship Intangible		Total

2020		$	6,939	$	181	$	7,120
2021	2021	5,860		181		6,041		2021	$	5,860	$	181	$	6,041
2022	2022	4,940		181		5,121		2022	4,940		181		5,121
2023	2023	4,044		181		4,225		2023	4,044		181		4,225
2024	2024	3,498		181		3,679		2024	3,498		181		3,679
2025								2025	3,103		181		3,284

Note 8 – Mortgage Servicing Rights

(In Thousands)

The Company retains the right to service certain mortgage loans that it sells to secondary market investors. These mortgage servicing rights (“MSRs”) are recognized as a separate asset on the date the corresponding mortgage loan is sold. MSRs are amortized in proportion to and over the period of estimated net servicing income. These servicing rights are carried at the lower of amortized cost or fair value. Fair value is determined using an income approach with various assumptions, including expected cash flows, prepayment speeds, market discount rates, servicing costs, and other factors, and is subject to significant fluctuation as a result of actual prepayment speeds, default rates and losses differing from estimates thereof. Servicing rights are evaluated for impairment (or reversals of prior impairments) quarterly based upon the fair value of the rights as compared to the carrying amount. Impairment is recognized through a valuation allowance in the amount that unamortized cost exceeds fair value. If the Company later determines that all or a portion of the impairment no longer exists, a reduction of the valuation allowance may be recorded as an increase to income. Changes in valuation allowances related to servicing rights are reported in “Mortgage banking income” on the Consolidated Statements of Income.

There ~~were $13,694 and $3,132~~was a positive valuation adjustment of ~~valuation adjustments on MSRs~~$13,561 during the ~~nine~~three months ended ~~September 30,~~March 31, 2021 on MSRs. This positive adjustment primarily arose from an increase in mortgage interest rates and a corresponding decrease in actual prepayment speeds. During the three months ended March 31, 2020 ~~and 2019, respectively, primarily arising from the~~there was a negative valuation adjustment of $9,571 which was caused by a difference between actual prepayment speeds and the ~~Company's~~Company’s assumptions with respect to prepayment speeds. A ~~continued~~ decline in mortgage interest rates ~~and~~or an increase in actual prepayment speeds may cause ~~additional~~ negative adjustments to the valuation of the ~~Company's~~Company’s MSRs.

Changes in the Company’s MSRs were as follows:


Balance at January 1, ~~2020~~2021	$	~~53,208~~62,994

Capitalization	~~30,589~~9,409
Amortization	~~(12,503)~~(5,701)
Valuation adjustment	~~(13,694)~~13,561
Balance at ~~September 30, 2020~~March 31, 2021	$	~~57,600~~80,263

Data and key economic assumptions related to the Company’s MSRs are as follows as of the dates presented:

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


		September 30, 2020			December 31, 2019				March 31, 2021			December 31, 2020
Unpaid principal balance	Unpaid principal balance	$	6,680,256		$	4,871,155		Unpaid principal balance	$	7,776,998		$	7,322,671

Weighted-average prepayment speed (CPR)	Weighted-average prepayment speed (CPR)	15.09		%	11.48		%	Weighted-average prepayment speed (CPR)	11.53		%	15.05		%
Estimated impact of a 10% increase	Estimated impact of a 10% increase	$	(3,606)		$	(2,469)		Estimated impact of a 10% increase	$	(3,776)		$	(4,001)
Estimated impact of a 20% increase	Estimated impact of a 20% increase	(6,921)			(4,774)			Estimated impact of a 20% increase	(7,330)			(7,674)

Discount rate	Discount rate	9.88		%	9.69		%	Discount rate	9.84		%	9.86		%
Estimated impact of a 10% increase	Estimated impact of a 10% increase	$	(1,957)		$	(2,027)		Estimated impact of a 10% increase	$	(3,163)		$	(2,144)
Estimated impact of a 20% increase	Estimated impact of a 20% increase	(3,784)			(3,908)			Estimated impact of a 20% increase	(6,097)			(4,144)

Weighted-average coupon interest rate	Weighted-average coupon interest rate	3.71		%	4.04		%	Weighted-average coupon interest rate	3.46		%	3.58		%
Weighted-average servicing fee (basis points)	Weighted-average servicing fee (basis points)	29.94			29.20			Weighted-average servicing fee (basis points)	30.32			29.94
Weighted-average remaining maturity (in years)	Weighted-average remaining maturity (in years)	5.16			6.35			Weighted-average remaining maturity (in years)	6.37			5.14

The Company recorded servicing fees of ~~$3,400~~$4,071 and ~~$2,346~~$2,623 for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively, which are included in “Mortgage banking income” in the Consolidated Statements of Income. ~~The Company recorded servicing fees of $9,012 and $7,081 for the nine months ended September 30, 2020 and 2019, respectively.~~

Note 9 - Employee Benefit and Deferred Compensation Plans

(In Thousands, Except Share Data)

Pension and Post-retirement Medical Plans

The Company sponsors a noncontributory defined benefit pension plan, under which participation and benefit accruals ceased as of December 31, 1996, and it provides retiree medical benefits, consisting of the opportunity to purchase coverage at subsidized rates under the ~~Company's~~Company’s group medical plan.

Information related to the defined benefit pension plan maintained by Renasant Bank (“Pension Benefits”) and to the post-retirement health and life plan (“Other Benefits”) as of the dates presented is as follows:

Pension Benefits Other Benefits
Three Months Ended Three Months Ended
September 30, September 30,
2020 2019 2020 2019
Service cost $ 0 $ 0 $ 2 $ 2
Interest cost 246 294 3 7
Expected return on plan assets (412) (362) 0 0
Recognized actuarial loss (gain) 87 110 (23) (6)
Net periodic (return) benefit cost $ (79) $ 42 $ (18) $ 3



		Pension Benefits				Other Benefits			Pension Benefits								Other Benefits
		Nine Months Ended				Nine Months Ended			Three Months Ended								Three Months Ended
		September 30,				September 30,			March 31,								March 31,
		2020		2019			2020			2019			2021		2020			2021		2020
Service cost	Service cost	$	0	$	0		$	5		$	5	Service cost	$	0	$	0		$	1	$	2
Interest cost	Interest cost	738		882			10			23		Interest cost	166		242			4		5
Expected return on plan assets	Expected return on plan assets	(1,238)		(1,087)			0			0		Expected return on plan assets	(443)		(413)			0		0

Recognized actuarial loss (gain)	Recognized actuarial loss (gain)	262		331			(68)			(17)		Recognized actuarial loss (gain)	54		79			0		(18)

Net periodic (return) benefit cost	Net periodic (return) benefit cost	$	(238)	$	126		$	(53)		$	11	Net periodic (return) benefit cost	$	(223)	$	(92)		$	5	$	(11)

Incentive Compensation Plans

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~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

The Company maintains a long-term equity compensation plan that provides for the grant of stock options and the award of restricted stock. There were 0 stock options granted, nor compensation expense associated with options recorded, during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 or ~~2019.~~2020.

The following table summarizes information about options outstanding, exercised and forfeited as of and for the ~~nine~~three months ended ~~September 30, 2020:~~March 31, 2021:

Shares Weighted Average Exercise Price
Options outstanding at beginning of period 29,250 $ 15.86
Granted 0 0
Exercised 0 0
Forfeited 0 0
Options outstanding at end of period 29,250 $ 15.86

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


	Shares	Weighted Average Exercise Price
Options outstanding at beginning of period	10,500	$	14.96
Granted	0	0
Exercised	(2,000)	14.96
Forfeited	0	0
Options outstanding at end of period	8,500	$	14.96

The Company also awards performance-based restricted stock to executives and other officers and employees and time-based restricted stock to non-employee directors, executives, and other officers and employees.

The following table summarizes the changes in restricted stock as of and for the ~~nine~~three months ended ~~September 30, 2020:~~March 31, 2021:


		Performance-Based Restricted Stock	Weighted Average Grant-Date Fair Value		Time-Based Restricted Stock	Weighted Average Grant-Date Fair Value			Performance-Based Restricted Stock	Weighted Average Grant-Date Fair Value		Time-Based Restricted Stock	Weighted Average Grant-Date Fair Value
Nonvested at beginning of period	Nonvested at beginning of period	115,725	$	34.00	500,932	$	36.34	Nonvested at beginning of period	132,827	$	32.88	548,416	$	34.15
Awarded	Awarded	81,423	35.42		270,579	32.90		Awarded	78,230	34.02		212,224	36.20
Vested	Vested	0	0		(140,853)	38.67		Vested	0	0		(89,240)	40.20
Cancelled	Cancelled	(15,076)	33.29		(47,488)	35.73		Cancelled	0	0		(19,461)	37.05
Nonvested at end of period	Nonvested at end of period	182,072	$	34.70	583,170	$	34.23	Nonvested at end of period	211,057	$	33.30	651,939	$	33.90

During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, the Company reissued ~~150,387~~93,859 shares from treasury in connection with the exercise of stock options and awards of restricted stock. The Company recorded total stock-based compensation expense of ~~$2,405~~$2,756 and ~~$3,002~~$2,750 for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively and $8,153 and $7,721 for the nine months ended September 30, 2020 and 2019,~~ respectively.

Note 10 – Derivative Instruments

(In Thousands)

The Company ~~utilizes~~uses certain derivative ~~financial~~ instruments ~~including interest rate contracts such~~to meet the needs of customers as ~~swaps, caps and/or floors,~~well as ~~part of its ongoing efforts~~ to ~~mitigate its~~manage the interest rate risk ~~exposure and to facilitate the needs of its customers.~~ associated with certain transactions.

Non-hedge derivatives

The Company ~~also from time to time~~ 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 September 30, 2020, the Company had notional amounts of $272,136 on interest rate contracts with corporate customers and $272,136 in offsetting interest rate contracts with other financial institutions to mitigate the Company’s rate exposure on its corporate customers’ contracts and certain fixed-rate loans.

In June 2014, the Company entered into 2 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 each accounted for as a cash flow hedge with the objective of protecting against any interest rate volatility on future Federal Home Loan Bank (“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, the Bank pays a fixed interest rate and receives a variable interest rate based on the three-month LIBOR plus a pre-determined spread, with quarterly net settlements.

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

In March and April 2012, the Company entered into 2 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.

In March 2020, the Company entered into a forward interest rate swap contract on floating rate liabilities with a notional amount of $100,000. The interest rate swap contract is accounted for as a cash flow hedge with the objective of protecting against any interest rate volatility on future FHLB borrowings for a ten-year period beginning March 23, 2022 and ending March 23, 2032. Under this contract, the Company pays a fixed interest rate and receives a variable interest rate based on one-month LIBOR with monthly net settlements.

In May 2020, the Company entered into a forward interest rate swap contract on floating rate liabilities with a notional amount of $25,000. The interest rate swap contract is accounted for as a cash flow hedge with the objective of protecting against any interest rate volatility on future FHLB borrowings for a three-year period beginning on May 1, 2022 and ending on May 1, 2025. Under this contract, the Company pays a fixed interest rate and receives a variable interest rate based on one-month LIBOR with monthly net settlements.

In July 2020, the Company entered into 2 forward interest rate swap contracts on floating rate liabilities with a notional amount of $25,000 each. Both interest rate swap contracts are accounted for as a cash flow hedge with the objective of protecting against any interest rate volatility on future FHLB borrowings, one contract for a seven-year period beginning on July 14, 2022 and ending on July 14, 2029, the other contract for a five-year period beginning on July 31, 2022 and ending on July 31, 2027. Under both contracts, the Company pays a fixed interest rate and receives a variable interest rate based on one-month LIBOR with monthly net settlements.

In August 2020, the Company entered into a forward interest rate swap contract on floating rate liabilities with a notional amount of $25,000. The interest rate swap contract is accounted for as a cash flow hedge with the objective of protecting against any interest rate volatility on future FHLB borrowings for a seven-year period beginning on August 14, 2022 and ending on August 14, 2029. Under this contract, the Company pays a fixed interest rate and receives a variable interest rate based on one-month LIBOR with monthly net settlements.

The Company enters into interest rate lock commitments with its customers to mitigate the interest rate risk associated with the commitments to fund fixed-rate ~~and adjustable-rate~~ residential mortgage loans. ~~The notional amount of commitments to fund fixed-rate and adjustable-rate mortgage loans was $755,721 and $215,751 at September 30, 2020 and December 31, 2019, respectively.~~ The Company also enters into forward commitments to sell residential mortgage loans to secondary market investors. ~~The notional amount of commitments to sell residential mortgage loans to secondary market investors was $760,000 and $414,000 at September 30, 2020 and December 31, 2019, respectively.~~

The following table provides ~~details on~~a summary of the Company’s ~~derivative financial~~derivatives not designated as hedging instruments as of the dates presented:

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Fair Value
Balance Sheet
Location September 30,
2020 December 31, 2019
Derivative assets:
Designated as hedging instruments:
Interest rate swap Other Assets $ 468 $ 0
Totals $ 468 $ 0
Not designated as hedging instruments:
Interest rate contracts Other Assets $ 11,566 $ 3,880
Interest rate lock commitments Other Assets 28,185 4,579
Forward commitments Other Assets 59 39
Totals $ 39,810 $ 8,498
Derivative liabilities:
Designated as hedging instruments:
Interest rate swaps Other Liabilities $ 9,004 $ 5,021
Totals $ 9,004 $ 5,021
Not designated as hedging instruments:
Interest rate contracts Other Liabilities $ 11,566 $ 3,880
Interest rate lock commitments Other Liabilities 0 3
Forward commitments Other Liabilities 2,511 1,096
Totals $ 14,077 $ 4,979


	Balance Sheet	March 31, 2021				December 31, 2020
	Location	Notional Amount		Fair Value		Notional Amount		Fair Value
Derivative assets:
Interest rate contracts	Other Assets	$	232,095	$	7,111	$	222,933	$	9,884
Interest rate lock commitments	Other Assets	598,448		11,875		589,701		19,824
Forward commitments	Other Assets	847,000		13,767		0		0
Totals		$	1,677,543	$	32,753	$	812,634	$	29,708
Derivative liabilities:
Interest rate contracts	Other Liabilities	$	232,095	$	7,111	$	222,933	$	9,884
Interest rate lock commitments	Other Liabilities	51,290		373		0		0
Forward commitments	Other Liabilities	60,000		53		716,000		5,090
Totals		$	343,385	$	7,537	$	938,933	$	14,974

Gains ~~(losses)~~and losses included in the Consolidated Statements of Income related to the Company’s derivative financial instruments were as follows as of the ~~periods~~dates presented:


		Three Months Ended				Nine Months Ended					Three Months Ended March 31,
		September 30,				September 30,					2021		2020
		2020		2019		2020		2019

Derivatives not designated as hedging instruments:
Interest rate contracts:	Interest rate contracts:									Interest rate contracts:
Included in interest income on loans	Included in interest income on loans	$	451	$	950	$	1,710	$	2,985	Included in interest income on loans	$	370	$	736

Interest rate lock commitments:	Interest rate lock commitments:									Interest rate lock commitments:
Included in mortgage banking income	Included in mortgage banking income	(1,135)		(444)		23,610		2,954		Included in mortgage banking income	(8,322)		21,821
Forward commitments	Forward commitments									Forward commitments
Included in mortgage banking income	Included in mortgage banking income	2,754		3,526		(1,395)		3,006		Included in mortgage banking income	18,803		(15,470)
Total	Total	$	2,070	$	4,032	$	23,925	$	8,945	Total	$	10,851	$	7,087

Derivatives designated as cash flow hedges

~~For~~Cash 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 March 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~~as of the dates presented:


	Balance Sheet	March 31, 2021				December 31, 2020
	Location	Notional Amount		Fair Value		Notional Amount		Fair Value
Derivative assets:
Interest rate swaps	Other Assets	$	200,000	$	16,474	$	175,000	$	3,866

Derivative liabilities:
Interest rate swaps	Other Liabilities	$	62,000	$	3,798	$	87,000	$	5,924

Changes in fair value 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 ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 or ~~2019.~~2020. The impact on other comprehensive income for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019, respectively, can be seen at~~is discussed in Note 13, “Other Comprehensive ~~Income.~~Income (Loss).”

Derivatives designated as fair value hedges

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

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 Sheet	March 31, 2021				December 31, 2020
	Location	Notional Amount		Fair Value		Notional Amount		Fair Value



Derivative liabilities:
Interest rate swaps	Other Liabilities	$	100,000	$	7,650	$	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 Statement	Three Months Ended March 31,
	Location	2021		2020
Derivative liabilities:
Interest rate swaps - subordinated notes	Interest Expense	$	(7,650)	$	0

Derivative liabilities - hedged items:
Interest rate swaps - subordinated notes	Interest Expense	$	7,650	$	0

The following table presents the amounts that were recorded in the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges as of the dates presented:


	Carrying Amount of the Hedged Liability				Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Liability
Balance Sheet Location	March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020
Long-term debt	$	90,717	$	98,114	$	7,650	$	209

Offsetting

Certain financial instruments, including derivatives, may be eligible for offset in the consolidated balance sheet when the “right of offset” exists or when the instruments are subject to an enforceable master netting agreement, which includes the right of the non-defaulting party or non-affected party to offset recognized amounts, including collateral posted with the counterparty, to

~~Table of Contents~~

~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

determine a net receivable or net payable upon early termination of the agreement. Certain of the Company’s derivative instruments are subject to master netting agreements; however, the Company has not elected to offset such financial instruments in the Consolidated Balance Sheets. The following table presents the Company’s gross derivative positions as recognized in the Consolidated Balance Sheets as well as the net derivative positions, including collateral pledged to the extent the application of such collateral did not reduce the net derivative liability position below zero, had the Company elected to offset those instruments subject to an enforceable master netting agreement:


		Offsetting Derivative Assets				Offsetting Derivative Liabilities					Offsetting Derivative Assets				Offsetting Derivative Liabilities
		September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020
Gross amounts recognized	Gross amounts recognized	$	527	$	61	$	23,198	$	9,974	Gross amounts recognized	$	30,352	$	3,866	$	18,501	$	21,107
Gross amounts offset in the Consolidated Balance Sheets	Gross amounts offset in the Consolidated Balance Sheets	0		0		0		0		Gross amounts offset in the Consolidated Balance Sheets	0		0		0		0
Net amounts presented in the Consolidated Balance Sheets	Net amounts presented in the Consolidated Balance Sheets	527		61		23,198		9,974		Net amounts presented in the Consolidated Balance Sheets	30,352		3,866		18,501		21,107
Gross amounts not offset in the Consolidated Balance Sheets	Gross amounts not offset in the Consolidated Balance Sheets									Gross amounts not offset in the Consolidated Balance Sheets
Financial instruments	Financial instruments	527		61		527		61		Financial instruments	9,172		3,866		9,172		3,866
Financial collateral pledged	Financial collateral pledged	0		0		18,400		8,698		Financial collateral pledged	0		0		9,329		14,042
Net amounts	Net amounts	$	0	$	0	$	4,271	$	1,215	Net amounts	$	21,180	$	0	$	0	$	3,199

Table of Contents

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 11 – Income Taxes

(In Thousands)

The following table is a summary of the Company’s temporary differences between the tax basis of assets and liabilities and their financial reporting amounts that give rise to deferred income tax assets and liabilities and their approximate tax effects as of the dates presented.

September 30, December 31,
2020 2019
Deferred tax assets
Allowance for credit losses $ 45,891 $ 14,304
Loans 11,579 10,284
Deferred compensation 11,605 12,050
Impairment of assets 1,631 1,108
Net operating loss carryforwards 2,607 9,387
Lease liabilities under operating leases 22,271 22,686
Other 208 934
Total deferred tax assets 95,792 70,753
Deferred tax liabilities
Net unrealized gains on securities 6,057 190
Investment in partnerships 982 967
Fixed assets 7,688 2,952
Mortgage servicing rights 14,121 13,472
Junior subordinated debt 2,237 2,304
Lease right-of-use asset 21,203 21,727
Other 1,457 1,859
Total deferred tax liabilities 53,745 43,471
Net deferred tax assets $ 42,047 $ 27,282

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~~Notes to Consolidated Financial Statements (Unaudited)~~


	March 31,		December 31,
	2021		2020
Deferred tax assets
Allowance for credit losses	$	53,318	$	53,597
Loans	4,883		5,526
Deferred compensation	12,311		13,114

Impairment of assets	874		1,067
Net operating loss carryforwards	1,667		1,857

Lease liabilities under operating leases	18,168		17,732
Other	3,504		3,539
Total deferred tax assets	94,725		96,432


Deferred tax liabilities

Net unrealized gains on securities	6,804		8,434
Investment in partnerships	719		793

Fixed assets	2,534		3,285
Mortgage servicing rights	19,025		14,623
Junior subordinated debt	2,223		2,245
Intangibles	3,968		3,882
Lease right-of-use asset	17,239		16,833
Other	1,459		1,672
Total deferred tax liabilities	53,971		51,767
Net deferred tax assets	$	40,754	$	44,665

For the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ the Company recorded a provision for income taxes totaling ~~$13,022~~$16,842 and ~~$38,667,~~$773, respectively. The provision for income taxes includes both federal and state income taxes and differs from the statutory rate due to favorable permanent differences. The effective tax rate was ~~20.28%~~22.59% and ~~23.04%~~27.80% for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ 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 and ~~the~~ state departments of revenue for the years ending December 31, ~~2015~~2017 through December 31, 2019.

The Company acquired both 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 its acquisition of Brand Group Holdings, Inc. (“Brand”) were $81,288 and $55,067, respectively, as of the September 1, 2018 acquisition date, all created in 2018. As part of The 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 have an indefinite carryforward period. As of ~~September 30, 2020,~~March 31, 2021, there are ~~federal and~~ state net operating losses acquired in the Brand acquisition without expiration periods of ~~$2,248 and $28,495, respectively.~~$21,781. The federal and state net operating losses acquired in the Company’s acquisition of Heritage Financial Group, Inc. (“Heritage”) in 2015 were $18,321 and $16,849, respectively, of which ~~$3,269~~$2,788 and ~~$2,446~~$1,965 remain to be utilized as of ~~September 30, 2020.~~March 31, 2021. The net operating losses related to the Heritage acquisition begin to expire in 2029 and are expected to be utilized. Because the benefits are expected to be fully realized, the Company recorded no valuation allowance against the net operating losses for the period ending ~~September 30, 2020.~~March 31, 2021.

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 12 – Fair Value Measurements

(In Thousands)

Fair Value Measurements and the Fair Level Hierarchy

~~ASC~~FASB Accounting Standards Codification Topic (“ASC”) 820, “Fair 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).

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 at fair value on a recurring basis include securities available for sale and derivative instruments. The Company has elected to carry mortgage loans held for sale at fair value on a recurring basis as permitted under the guidance in ASC 825, “Financial Instruments” (“ASC 825”).

The following methods and assumptions are used by the Company to estimate the fair values of the Company’s financial assets and liabilities that are measured on a recurring basis:

Securities available for sale: Securities available for sale consist primarily of debt securities, such as obligations of U.S. Government agencies and corporations, obligations of states and political subdivisions, mortgage-backed securities and trust preferred securities. Where quoted market prices in active markets are available, securities are classified within Level 1 of the fair value hierarchy. If quoted prices from active markets are not available, fair values are based on quoted market prices for similar instruments traded in active markets, quoted market prices for identical or similar instruments traded in markets that are not active, or model-based valuation techniques where all significant assumptions are observable in the market. Such instruments are classified within Level 2 of the fair value hierarchy. When assumptions used in model-based valuation techniques are not observable in the market, the assumptions used by management reflect estimates of assumptions used by other market participants in determining fair value. When there is limited transparency around the inputs to the valuation, the instruments are classified within Level 3 of the fair value hierarchy.

Derivative instruments: Most of the Company’s derivative contracts are extensively traded in over-the-counter markets and are valued using discounted cash flow models which incorporate observable market based inputs including current market interest

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~~Notes to Consolidated Financial Statements (Unaudited)~~

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 such as interest rate caps and/or floors. The Company’s interest rate lock commitments are valued using current market prices for mortgage-backed securities with similar characteristics, adjusted for certain factors including servicing and risk. The value of the Company’s forward commitments is based on current prices for securities backed by similar types of loans. Because these assumptions are observable in active markets, the Company’s interest rate lock commitments and forward commitments are categorized within Level 2 of the fair value hierarchy.

Mortgage loans held for sale in loans held for sale: Mortgage loans held for sale are primarily agency loans which trade in active secondary markets. The fair value of these instruments is derived from current market pricing for similar loans, adjusted for differences in loan characteristics, including servicing and risk. Because the valuation is based on external pricing of similar instruments, mortgage loans held for sale are classified within Level 2 of the fair value hierarchy.

The following ~~table presents~~tables present assets and liabilities that are measured at fair value on a recurring basis as of the dates presented:

Level 1 Level 2 Level 3 Totals
September 30, 2020
Financial assets:
Trust preferred securities $ 0 $ 0 $ 8,492 $ 8,492
Other available for sale securities 0 1,284,896 0 1,284,896
Total securities available for sale 0 1,284,896 8,492 1,293,388
Derivative instruments 0 40,278 0 40,278
Mortgage loans held for sale in loans held for sale 0 399,773 0 399,773
Total financial assets $ 0 $ 1,724,947 $ 8,492 $ 1,733,439
Financial liabilities:
Derivative instruments: $ 0 $ 23,081 $ 0 $ 23,081

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)


	Level 1		Level 2		Level 3		Totals
March 31, 2021
Financial assets:

Securities available for sale	$	0	$	1,536,041	$	0	$	1,536,041
Derivative instruments	0		49,227		0		49,227
Mortgage loans held for sale in loans held for sale	0		502,002		0		502,002
Total financial assets	$	0	$	2,087,270	$	0	$	2,087,270
Financial liabilities:
Derivative instruments:	$	0	$	18,985	$	0	$	18,985


		Level 1		Level 2		Level 3		Totals			Level 1		Level 2		Level 3		Totals
December 31, 2019
December 31, 2020										December 31, 2020
Financial assets:	Financial assets:									Financial assets:
Trust preferred securities	Trust preferred securities	$	0	$	0	$	9,986	$	9,986	Trust preferred securities	$	0	$	0	$	9,012	$	9,012
Other available for sale securities	Other available for sale securities	0		1,280,627		0		1,280,627		Other available for sale securities	0		1,334,445		0		1,334,445
Total securities available for sale	Total securities available for sale	0		1,280,627		9,986		1,290,613		Total securities available for sale	0		1,334,445		9,012		1,343,457
Derivative instruments	Derivative instruments	0		8,498		0		8,498		Derivative instruments	0		33,574		0		33,574
Mortgage loans held for sale in loans held for sale	Mortgage loans held for sale in loans held for sale	0		318,272		0		318,272		Mortgage loans held for sale in loans held for sale	0		417,771		0		417,771
Total financial assets	Total financial assets	$	0	$	1,607,397	$	9,986	$	1,617,383	Total financial assets	$	0	$	1,785,790	$	9,012	$	1,794,802
Financial liabilities:	Financial liabilities:									Financial liabilities:
Derivative instruments	Derivative instruments	$	0	$	10,000	$	0	$	10,000	Derivative instruments	$	0	$	21,107	$	0	$	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. Transfers between levels of the hierarchy are deemed to have occurred at the end of period. There were no such transfers between levels of the fair value hierarchy during the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021.

The following tables provide a reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs, or Level 3 inputs, as of the dates presented:

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~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~


		2020		2019		2021				2020
Three Months Ended September 30, 2020		Trust preferred securities		Trust preferred securities
Three Months Ended September 30,
Three Months Ended March 31, 2021							Three Months Ended March 31, 2021	Trust preferred securities			Trust preferred securities
Three Months Ended March 31,							Three Months Ended March 31,
Balance at beginning of period	Balance at beginning of period	$	7,679	$	10,386		Balance at beginning of period	$	9,012		$	9,986
Accretion included in net income	Accretion included in net income	8		9			Accretion included in net income	7			9
Unrealized gains (losses) included in other comprehensive income	Unrealized gains (losses) included in other comprehensive income	840		(439)			Unrealized gains (losses) included in other comprehensive income	941			(1,319)

Realized losses							Realized losses	2,061			0

Sales							Sales	(12,021)			0

Settlements	Settlements	(35)		(94)			Settlements	0			(72)

Balance at end of period	Balance at end of period	$	8,492	$	9,862		Balance at end of period	$	0		$	8,604

Nine Months Ended September 30,
Balance at beginning of period		$	9,986	$	10,633
Accretion included in net income		26		26
Unrealized losses included in other comprehensive income		(1,382)		(572)

Settlements		(138)		(225)

Balance at end of period		$	8,492	$	9,862

For ~~each of~~ the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively, there were no gains or losses included in earnings that were attributable to the change in unrealized gains or losses related to assets or liabilities held at the end of each respective period that were measured on a recurring basis using significant unobservable inputs.

~~The following table presents information as of September 30, 2020 about significant unobservable inputs (Level 3) used in the valuation of assets measured at fair value on a recurring basis:~~

~~Financial instrument~~

Fair
Value

~~Valuation Technique~~

Significant
Unobservable Inputs

~~Range of Inputs~~

~~Trust preferred securities~~

~~8,492~~

~~Discounted cash flows~~

~~Default rate~~

~~0-100%~~

Nonrecurring Fair Value Measurements

Certain assets and liabilities may be recorded at fair value on a nonrecurring basis. These nonrecurring fair value adjustments typically are a result of the application of the lower of cost or market accounting or a write-down occurring during the period.

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

The following ~~table provides~~tables provide the fair value measurement for assets measured at fair value on a nonrecurring basis that were still held on the Consolidated Balance Sheets as of the dates presented and the level within the fair value hierarchy each is classified:


September 30, 2020		Level 1		Level 2		Level 3		Totals
Impaired loans		$	0	$	0	$	11,050	$	11,050
March 31, 2021										March 31, 2021	Level 1		Level 2		Level 3		Totals
Individually evaluated loans, net of allowance for credit losses										Individually evaluated loans, net of allowance for credit losses	$	0	$	0	$	8,810	$	8,810
OREO	OREO	0		0		1,788		1,788		OREO	0		0		215		215
Mortgage servicing rights	Mortgage servicing rights	0		0		57,600		57,600		Mortgage servicing rights	0		0		80,263		80,263
Total	Total	$	0	$	0	$	70,438	$	70,438	Total	$	0	$	0	$	89,288	$	89,288


December 31, 2019		Level 1		Level 2		Level 3		Totals
Impaired loans		$	0	$	0	$	27,348	$	27,348
December 31, 2020										December 31, 2020	Level 1		Level 2		Level 3		Totals
Individually evaluated loans, net of allowance for credit losses										Individually evaluated loans, net of allowance for credit losses	$	0	$	0	$	24,145	$	24,145
OREO	OREO	0		0		2,820		2,820		OREO	0		0		2,736		2,736
Mortgage servicing rights	Mortgage servicing rights	0		0		53,208		53,208		Mortgage servicing rights	0		0		62,994		62,994
Total	Total	$	0	$	0	$	83,376	$	83,376	Total	$	0	$	0	$	89,875	$	89,875

The following methods and assumptions are used by the Company to estimate the fair values of the Company’s financial assets measured on a nonrecurring basis:

~~Impaired~~Individually evaluated loans: Loans ~~considered impaired~~ are ~~reserved~~individually evaluated for ~~at the time the loan is identified as impaired~~credit 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

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~~Notes to Consolidated Financial Statements (Unaudited)~~

limited to equipment, inventory and accounts receivable. The fair value of real estate is determined based on appraisals by qualified licensed appraisers. The fair value of the business assets is generally based on amounts reported on the business’s financial statements. Appraised and reported values may be adjusted based on changes in market conditions from the time of valuation and management’s knowledge of the client and the client’s business. Since not all valuation inputs are observable, these nonrecurring fair value determinations are classified as Level 3. ~~Impaired~~Individually 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. ~~Impaired~~Individually evaluated loans that were measured or re-measured at fair value had a carrying value of ~~$19,775~~$14,477 and ~~$29,606~~$36,990 at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively, and a specific reserve for these loans of ~~$8,725~~$5,667 and ~~$2,258~~$12,845 was included in the allowance for credit losses as of such dates.

Other real estate owned: OREO is comprised of commercial and residential real estate obtained in partial or total satisfaction of loan obligations. OREO acquired in settlement of indebtedness is recorded at the fair value of the real estate less estimated costs to sell. Subsequently, it may be necessary to record nonrecurring fair value adjustments for declines in fair value. Fair value, when recorded, is determined based on appraisals by qualified licensed appraisers and adjusted for management’s estimates of costs to sell. Accordingly, values for OREO are classified as Level 3.

The following table presents OREO measured at fair value on a nonrecurring basis that was still held on the Consolidated Balance Sheets as of the dates presented:


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020

Carrying amount prior to remeasurement	Carrying amount prior to remeasurement	$	2,750	$	3,726	Carrying amount prior to remeasurement	$	285	$	4,051
Impairment recognized in results of operations	Impairment recognized in results of operations	(962)		(906)		Impairment recognized in results of operations	(70)		(1,315)
Fair value	Fair value	$	1,788	$	2,820	Fair value	$	215	$	2,736

Mortgage servicing rights: Mortgage servicing rights are carried at the lower of amortized cost or fair value. Fair value is determined using an income approach with various assumptions including expected cash flows, market discount rates, prepayment speeds, servicing costs, and other factors. Because these factors are not all observable and include management’s assumptions, mortgage servicing rights are classified within Level 3 of the fair value hierarchy. Mortgage servicing rights were carried at amortized cost at ~~September 30, 2020~~March 31, 2021 and fair value at December 31, ~~2019.~~2020. There were ~~$13,694~~$13,561 of positive valuation adjustments on MSRs during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 and ~~$1,836~~$11,726 of negative valuation adjustments recognized during the twelve months ended December 31, ~~2019.~~2020.

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

The following table presents information as of ~~September 30, 2020~~March 31, 2021 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~~Individually evaluated loans, net of allowance for credit losses

~~11,050~~8,810

Appraised value of collateral less estimated costs to sell

Estimated costs to sell

4-10%

OREO

~~1,788~~215

Appraised value of property less estimated costs to sell

Estimated costs to sell

4-10%

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 losses of $12,231 and net gains of ~~$10,876 and $3,895~~$12,709 resulting from fair value changes of these mortgage loans were recorded in income during the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively. The amount does 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.

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~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

The Company’s valuation of mortgage loans held for sale incorporates an assumption for credit risk; however, given the short-term period that the Company holds these loans, valuation adjustments attributable to instrument-specific credit risk is nominal. Interest income on mortgage loans held for sale measured at fair value is accrued as it is earned based on contractual rates and is reflected in loan interest income on the Consolidated Statements of Income.

The following table summarizes the differences between the fair value and the principal balance for mortgage loans held for sale measured at fair value as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019:~~2020:


		Aggregate Fair Value		Aggregate Unpaid Principal Balance		Difference			Aggregate Fair Value		Aggregate Unpaid Principal Balance		Difference
September 30, 2020
March 31, 2021								March 31, 2021
Mortgage loans held for sale measured at fair value	Mortgage loans held for sale measured at fair value	$	399,773	$	378,785	$	20,988	Mortgage loans held for sale measured at fair value	$	502,002	$	492,064	$	9,938

December 31, 2019
December 31, 2020								December 31, 2020
Mortgage loans held for sale measured at fair value	Mortgage loans held for sale measured at fair value	$	318,272	$	308,160	$	10,112	Mortgage loans held for sale measured at fair value	$	417,771	$	395,602	$	22,169

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
As of September 30, 2020 Carrying
Value Level 1 Level 2 Level 3 Total
Financial assets
Cash and cash equivalents $ 414,105 $ 414,105 $ 0 $ 0 $ 414,105
Securities available for sale 1,293,388 0 1,284,896 8,492 1,293,388
Loans held for sale 399,773 0 399,773 0 399,773
Loans, net 10,916,640 0 0 10,847,520 10,847,520
Mortgage servicing rights 57,600 0 0 57,600 57,600
Derivative instruments 40,278 0 40,278 0 40,278
Financial liabilities
Deposits $ 11,934,140 $ 10,100,060 $ 1,852,653 $ 0 $ 11,952,713
Short-term borrowings 42,624 42,624 0 0 42,624
Federal Home Loan Bank advances 152,210 0 158,952 0 158,952
Junior subordinated debentures 110,649 0 89,591 0 89,591
Subordinated notes 212,223 0 212,550 0 212,550
Derivative instruments 23,081 0 23,081 0 23,081

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Notes to Consolidated Financial Statements (Unaudited)


				Fair Value											Fair Value
As of December 31, 2019		Carrying Value		Level 1		Level 2		Level 3		Total
As of March 31, 2021												As of March 31, 2021	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets	Financial assets											Financial assets
Cash and cash equivalents	Cash and cash equivalents	$	414,930	$	414,930	$	0	$	0	$	414,930	Cash and cash equivalents	$	1,261,916	$	1,261,916	$	0	$	0	$	1,261,916

Securities available for sale	Securities available for sale	1,290,613		0		1,280,627		9,986		1,290,613		Securities available for sale	1,536,041		0		1,536,041		0		1,536,041
Loans held for sale	Loans held for sale	318,272		0		318,272		0		318,272		Loans held for sale	502,002		0		502,002		0		502,002
Loans, net	Loans, net	9,637,476		0		0		9,321,039		9,321,039		Loans, net	10,515,302		0		0		10,420,129		10,420,129
Mortgage servicing rights	Mortgage servicing rights	53,208		0		0		53,208		53,208		Mortgage servicing rights	80,263		0		0		83,730		83,730
Derivative instruments	Derivative instruments	8,498		0		8,498		0		8,498		Derivative instruments	49,227		0		49,227		0		49,227
Financial liabilities	Financial liabilities											Financial liabilities
Deposits	Deposits	$	10,213,168	$	8,052,536	$	2,158,431	$	0	$	10,210,967	Deposits	$	12,736,908	$	11,133,259	$	1,610,535	$	0	$	12,743,794
Short-term borrowings	Short-term borrowings	489,091		489,091		0		0		489,091		Short-term borrowings	12,154		12,154		0		0		12,154

Federal Home Loan Bank advances	Federal Home Loan Bank advances	152,337		0		152,321		0		152,321		Federal Home Loan Bank advances	152,124		0		157,139		0		157,139
Junior subordinated debentures	Junior subordinated debentures	110,215		0		104,480		0		104,480		Junior subordinated debentures	110,939		0		99,076		0		99,076
Subordinated notes	Subordinated notes	113,955		0		117,963		0		117,963		Subordinated notes	204,597		0		219,900		0		219,900
Derivative instruments	Derivative instruments	10,000		0		10,000		0		10,000		Derivative instruments	18,985		0		18,985		0		18,985


			Fair Value
As of December 31, 2020	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	633,203	$	633,203	$	0	$	0	$	633,203

Securities available for sale	1,343,457		0		1,334,445		9,012		1,343,457
Loans held for sale	417,771		0		417,771		0		417,771
Loans, net	10,757,503		0		0		10,668,625		10,668,625
Mortgage servicing rights	62,994		0		0		62,994		62,994
Derivative instruments	33,574		0		33,574		0		33,574
Financial liabilities
Deposits	$	12,059,081	$	10,363,193	$	1,706,005	$	0	$	12,069,198
Short-term borrowings	21,340		21,340		0		0		21,340

Federal Home Loan Bank advances	152,167		0		158,914		0		158,914
Junior subordinated debentures	110,794		0		93,092		0		93,092
Subordinated notes	212,009		0		217,575		0		217,575
Derivative instruments	21,107		0		21,107		0		21,107

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Notes to Consolidated Financial Statements (Unaudited)

Note 13 – Other Comprehensive Income (Loss)

(In Thousands)

Changes in the components of other comprehensive income, net of tax, were as follows for the periods presented:


		Pre-Tax		Tax Expense (Benefit)		Net of Tax			Pre-Tax		Tax Expense (Benefit)		Net of Tax
Three months ended September 30, 2020
Three months ended March 31, 2021								Three months ended March 31, 2021
Securities available for sale:	Securities available for sale:							Securities available for sale:
Unrealized holding gains on securities		$	519	$	131	$	388
Unrealized holding losses on securities								Unrealized holding losses on securities	$	(20,044)	$	(5,101)	$	(14,943)

Reclassification adjustment for gains realized in net income								Reclassification adjustment for gains realized in net income	(1,357)		(345)		(1,012)

Total securities available for sale	Total securities available for sale	519		131		388		Total securities available for sale	(21,401)		(5,446)		(15,955)
Derivative instruments:	Derivative instruments:							Derivative instruments:
Unrealized holding gains on derivative instruments	Unrealized holding gains on derivative instruments	1,576		401		1,175		Unrealized holding gains on derivative instruments	14,734		3,750		10,984

Total derivative instruments	Total derivative instruments	1,576		401		1,175		Total derivative instruments	14,734		3,750		10,984
Defined benefit pension and post-retirement benefit plans:	Defined benefit pension and post-retirement benefit plans:							Defined benefit pension and post-retirement benefit plans:

Amortization of net actuarial loss recognized in net periodic pension cost	Amortization of net actuarial loss recognized in net periodic pension cost	65		17		48		Amortization of net actuarial loss recognized in net periodic pension cost	54		12		42
Total defined benefit pension and post-retirement benefit plans	Total defined benefit pension and post-retirement benefit plans	65		17		48		Total defined benefit pension and post-retirement benefit plans	54		12		42
Total other comprehensive income		$	2,160	$	549	$	1,611
Three months ended September 30, 2019
Total other comprehensive loss								Total other comprehensive loss	$	(6,613)	$	(1,684)	$	(4,929)
Three months ended March 31, 2020								Three months ended March 31, 2020
Securities available for sale:	Securities available for sale:							Securities available for sale:
Unrealized holding losses on securities		$	(84)	$	(22)	$	(62)
Unrealized holding gains on securities								Unrealized holding gains on securities	$	22,389	$	5,695	$	16,694

Reclassification adjustment for losses realized in net income		2,516		640		1,876

Total securities available for sale	Total securities available for sale	2,432		618		1,814		Total securities available for sale	22,389		5,695		16,694
Derivative instruments:	Derivative instruments:							Derivative instruments:
Unrealized holding losses on derivative instruments	Unrealized holding losses on derivative instruments	(949)		(241)		(708)		Unrealized holding losses on derivative instruments	(4,028)		(1,025)		(3,003)

Total derivative instruments	Total derivative instruments	(949)		(241)		(708)		Total derivative instruments	(4,028)		(1,025)		(3,003)
Defined benefit pension and post-retirement benefit plans:	Defined benefit pension and post-retirement benefit plans:							Defined benefit pension and post-retirement benefit plans:

Amortization of net actuarial loss recognized in net periodic pension cost	Amortization of net actuarial loss recognized in net periodic pension cost	104		26		78		Amortization of net actuarial loss recognized in net periodic pension cost	62		16		46
Total defined benefit pension and post-retirement benefit plans	Total defined benefit pension and post-retirement benefit plans	104		26		78		Total defined benefit pension and post-retirement benefit plans	62		16		46
Total other comprehensive income	Total other comprehensive income	$	1,587	$	403	$	1,184	Total other comprehensive income	$	18,423	$	4,686	$	13,737

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~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Pre-Tax Tax Expense
(Benefit) Net of Tax
Nine months ended September 30, 2020
Securities available for sale:
Unrealized holding gains on securities $ 26,404 $ 6,719 $ 19,685
Reclassification adjustment for gains realized in net income (31) (8) (23)
Total securities available for sale 26,373 6,711 19,662
Derivative instruments:
Unrealized holding losses on derivative instruments (3,516) (895) (2,621)
Total derivative instruments (3,516) (895) (2,621)
Defined benefit pension and post-retirement benefit plans:
Amortization of net actuarial loss recognized in net periodic pension cost 195 50 145
Total defined benefit pension and post-retirement benefit plans 195 50 145
Total other comprehensive income $ 23,052 $ 5,866 $ 17,186
Nine months ended September 30, 2019
Securities available for sale:
Unrealized holding gains on securities $ 27,695 $ 7,047 $ 20,648
Reclassification adjustment for losses realized in net income 2,511 639 1,872
Total securities available for sale 30,206 7,686 22,520
Derivative instruments:
Unrealized holding losses on derivative instruments (4,244) (1,080) (3,164)
Total derivative instruments (4,244) (1,080) (3,164)
Defined benefit pension and post-retirement benefit plans:
Amortization of net actuarial loss recognized in net periodic pension cost 314 80 234
Total defined benefit pension and post-retirement benefit plans 314 80 234
Total other comprehensive income $ 26,276 $ 6,686 $ 19,590

The accumulated balances for each component of other comprehensive income, net of tax, were as follows as of the dates presented:


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
Unrealized gains on securities	Unrealized gains on securities	$	41,225	$	21,563	Unrealized gains on securities	$	14,972	$	42,246
Non-credit related portion of previously recorded other-than-temporary impairment on securities	Non-credit related portion of previously recorded other-than-temporary impairment on securities	(11,319)		(11,319)		Non-credit related portion of previously recorded other-than-temporary impairment on securities	0		(11,319)
Unrealized losses on derivative instruments		(5,468)		(2,847)
Unrealized gains (losses) on derivative instruments						Unrealized gains (losses) on derivative instruments	10,346		(638)
Unrecognized losses on defined benefit pension and post-retirement benefit plans obligations	Unrecognized losses on defined benefit pension and post-retirement benefit plans obligations	(6,488)		(6,633)		Unrecognized losses on defined benefit pension and post-retirement benefit plans obligations	(5,179)		(5,221)
Total accumulated other comprehensive income	Total accumulated other comprehensive income	$	17,950	$	764	Total accumulated other comprehensive income	$	20,139	$	25,068

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 14 – Net Income Per Common Share

(In Thousands, Except Share Data)

Basic net income per common share is calculated by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted net income per common share reflects the pro forma dilution of shares outstanding, assuming outstanding service-based restricted stock awards fully vested and outstanding stock options were exercised into common shares, calculated in accordance with the treasury method. Basic and diluted net income per common share calculations are as follows for the periods presented:


		Three Months Ended					Three Months Ended
		September 30,					March 31,
		2020		2019			2021		2020
Basic	Basic					Basic
Net income applicable to common stock	Net income applicable to common stock	$	29,992	$	37,446	Net income applicable to common stock	$	57,908	$	2,008
Average common shares outstanding	Average common shares outstanding	56,185,884		58,003,215		Average common shares outstanding	56,240,201		56,534,816
Net income per common share - basic	Net income per common share - basic	$	0.53	$	0.65	Net income per common share - basic	$	1.03	$	0.04
Diluted	Diluted					Diluted
Net income applicable to common stock	Net income applicable to common stock	$	29,992	$	37,446	Net income applicable to common stock	$	57,908	$	2,008
Average common shares outstanding	Average common shares outstanding	56,185,884		58,003,215		Average common shares outstanding	56,240,201		56,534,816
Effect of dilutive stock-based compensation	Effect of dilutive stock-based compensation	200,269		189,204		Effect of dilutive stock-based compensation	278,998		171,473
Average common shares outstanding - diluted	Average common shares outstanding - diluted	56,386,153		58,192,419		Average common shares outstanding - diluted	56,519,199		56,706,289
Net income per common share - diluted	Net income per common share - diluted	$	0.53	$	0.64	Net income per common share - diluted	$	1.02	$	0.04

Nine Months Ended
September 30,
2020 2019
Basic
Net income applicable to common stock $ 52,130 $ 129,181
Average common shares outstanding 56,294,984 58,347,840
Net income per common share - basic $ 0.93 $ 2.21
Diluted
Net income applicable to common stock $ 52,130 $ 129,181
Average common shares outstanding 56,294,984 58,347,840
Effect of dilutive stock-based compensation 173,593 160,742
Average common shares outstanding - diluted 56,468,577 58,508,582
Net income per common share - diluted $ 0.92 $ 2.21

Stock-based compensation awards that could potentially dilute basic net income per common share in the future that were not included in the computation of diluted net income per common share due to their anti-dilutive effect were as follows for the periods presented:


		Three Months Ended			Three Months Ended
		September 30,			March 31,
		2020	2019		2021	2020
Number of shares	Number of shares	237,212	691	Number of shares	1,875	236,327
Exercise prices (for stock option awards)	Exercise prices (for stock option awards)	0	0	Exercise prices (for stock option awards)	0	0

Nine Months Ended
September 30,
2020 2019
Number of shares 255,448 1,334
Exercise prices (for stock option awards) 0 0

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~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Note 15 – 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:

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Capital Tiers

Tier 1 Capital to
Average Assets
(Leverage)

Common Equity Tier 1 to
Risk - Weighted Assets

Tier 1 Capital to
Risk - Weighted
Assets

Total Capital to
Risk - Weighted
Assets

Well capitalized

5% or above

6.5% or above

8% or above

10% or above

Adequately capitalized

4% or above

4.5% or above

6% or above

8% or above

Undercapitalized

Less than 4%

Less than 4.5%

Less than 6%

Less than 8%

Significantly undercapitalized

Less than 3%

Less than 4%

Less than 6%

Critically undercapitalized

Tangible Equity / Total Assets less than 2%

The following table provides the capital and risk-based capital and leverage ratios for the Company and for the Bank as of the dates presented:


		September 30, 2020				December 31, 2019					March 31, 2021				December 31, 2020
		Amount		Ratio		Amount		Ratio			Amount		Ratio		Amount		Ratio
Renasant Corporation	Renasant Corporation									Renasant Corporation
Tier 1 Capital to Average Assets (Leverage)	Tier 1 Capital to Average Assets (Leverage)	$	1,281,318	9.17	%	$	1,262,588	10.37	%	Tier 1 Capital to Average Assets (Leverage)	$	1,353,317	9.49	%	$	1,306,597	9.37	%
Common Equity Tier 1 Capital to Risk-Weighted Assets	Common Equity Tier 1 Capital to Risk-Weighted Assets	1,174,260		10.80	%	1,156,828		11.12	%	Common Equity Tier 1 Capital to Risk-Weighted Assets	1,245,969		11.05	%	1,199,394		10.93	%
Tier 1 Capital to Risk-Weighted Assets	Tier 1 Capital to Risk-Weighted Assets	1,281,318		11.79	%	1,262,588		12.14	%	Tier 1 Capital to Risk-Weighted Assets	1,353,317		12.00	%	1,306,597		11.91	%
Total Capital to Risk-Weighted Assets	Total Capital to Risk-Weighted Assets	1,618,837		14.89	%	1,432,949		13.78	%	Total Capital to Risk-Weighted Assets	1,701,667		15.09	%	1,653,694		15.07	%
Renasant Bank	Renasant Bank									Renasant Bank
Tier 1 Capital to Average Assets (Leverage)	Tier 1 Capital to Average Assets (Leverage)	$	1,344,938	9.64	%	$	1,331,809	10.95	%	Tier 1 Capital to Average Assets (Leverage)	$	1,412,831	9.91	%	$	1,369,994	9.83	%
Common Equity Tier 1 Capital to Risk-Weighted Assets	Common Equity Tier 1 Capital to Risk-Weighted Assets	1,344,938		12.38	%	1,331,809		12.81	%	Common Equity Tier 1 Capital to Risk-Weighted Assets	1,412,831		12.52	%	1,369,994		12.49	%
Tier 1 Capital to Risk-Weighted Assets	Tier 1 Capital to Risk-Weighted Assets	1,344,938		12.38	%	1,331,809		12.81	%	Tier 1 Capital to Risk-Weighted Assets	1,412,831		12.52	%	1,369,994		12.49	%
Total Capital to Risk-Weighted Assets	Total Capital to Risk-Weighted Assets	1,470,402		13.53	%	1,388,553		13.36	%	Total Capital to Risk-Weighted Assets	1,548,990		13.72	%	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. The 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. As shown in the tables above, as of ~~September 30, 2020,~~March 31, 2021, the Company’s CET1 capital was in excess of the capital conservation buffer.

In addition, the Federal Reserve, the FDIC and the Office of the Comptroller of the Currency’s 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

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~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

banking organization’s risk-based capital ratios to reflect the higher-risk nature of certain types of loans. 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, among others, 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 former 100% risk weight). Also, “hybrid” capital items like trust preferred securities no longer enjoy Tier 1 capital treatment, subject to various grandfathering and transition rules.

~~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 the FDIC to delay for two years the estimated impact of Accounting Standards Codification Topic 326, “Financial Instruments - Credit Losses” (“ASC 326”), often referred to as CECL, on regulatory capital, followed by a three-year transitional period to phase out the capital benefit provided by the two-year delay.

Note 16 – Segment Reporting

(In Thousands)

The operations of the Company’s reportable segments are described as follows:

•The Community Banks segment delivers a complete range of banking and financial services to individuals and small to medium-sized businesses including checking and savings accounts, business and personal loans, asset-based lending 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.

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Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

•The Wealth Management segment, through the Trust division, offers a broad range of fiduciary services ~~which include~~including the administration ~~and~~(as trustee or in other fiduciary or representative capacities) of benefit plans, management of trust accounts, ~~including~~inclusive 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, ~~offers~~through the Financial Services division, provides specialized products and services to customers, which include fixed and variable annuities, mutual funds and other investment services through a third party broker-dealer.

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.

The following table provides financial information for the Company’s operating segments as of and for the periods presented:

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~~Renasant Corporation and Subsidiaries~~

~~Notes to Consolidated Financial Statements (Unaudited)~~

Community
Banks Insurance Wealth
Management Other Consolidated
Three months ended September 30, 2020
Net interest income (loss) $ 108,909 $ 126 $ 403 $ (3,152) $ 106,286
Provision for loan losses 22,408 0 692 0 23,100
Noninterest income 63,918 2,694 4,714 (398) 70,928
Noninterest expense 110,430 1,974 3,818 288 116,510
Income (loss) before income taxes 39,989 846 607 (3,838) 37,604
Income tax expense (benefit) 8,383 217 0 (988) 7,612
Net income (loss) $ 31,606 $ 629 $ 607 $ (2,850) $ 29,992
Total assets $ 14,694,683 $ 30,138 $ 68,261 $ 15,851 $ 14,808,933
Goodwill $ 936,916 $ 2,767 0 0 $ 939,683
Three months ended September 30, 2019
Net interest income (loss) $ 111,696 $ 177 $ 485 $ (3,533) $ 108,825
Provision for loan losses 1,700 0 0 0 1,700
Noninterest income 31,911 2,533 3,859 (350) 37,953
Noninterest expense 90,996 1,948 3,287 269 96,500
Income (loss) before income taxes 50,911 762 1,057 (4,152) 48,578
Income tax expense (benefit) 12,009 200 0 (1,077) 11,132
Net income (loss) $ 38,902 $ 562 $ 1,057 $ (3,075) $ 37,446
Total assets $ 12,922,205 $ 27,448 $ 70,973 $ 19,048 $ 13,039,674
Goodwill $ 936,916 $ 2,767 0 0 $ 939,683


		Community Banks		Insurance		Wealth Management		Other		Consolidated			Community Banks		Insurance		Wealth Management		Other		Consolidated
Nine months ended September 30, 2020
Three months ended March 31, 2021												Three months ended March 31, 2021
Net interest income (loss)	Net interest income (loss)	$	325,879	$	424	$	1,250	$	(8,883)	$	318,670	Net interest income (loss)	$	112,948	$	107	$	384	$	(3,791)	$	109,648
Provision for credit losses on loans		75,481		0		869		0		76,350
Provision for credit losses												Provision for credit losses	0		0		0		0		0
Noninterest income (loss)												Noninterest income (loss)	73,070		3,248		5,171		(452)		81,037
Noninterest expense												Noninterest expense	109,586		1,923		4,101		325		115,935
Income (loss) before income taxes												Income (loss) before income taxes	76,432		1,432		1,454		(4,568)		74,750
Income tax expense (benefit)												Income tax expense (benefit)	17,656		367		0		(1,181)		16,842
Net income (loss)												Net income (loss)	$	58,776	$	1,065	$	1,454	$	(3,387)	$	57,908

Total assets												Total assets	$	15,525,500	$	31,004	$	64,320	$	1,747	$	15,622,571
Goodwill												Goodwill	$	936,916	$	2,767	$	0	$	0	$	939,683

Three months ended March 31, 2020												Three months ended March 31, 2020
Net interest income (loss)												Net interest income (loss)	$	108,869	$	187	$	441	$	(2,895)	$	106,602
Provision for credit losses												Provision for credit losses	26,212		0		138		0		26,350
Noninterest income (loss)	Noninterest income (loss)	152,716		7,787		13,370		(1,205)		172,668		Noninterest income (loss)	30,683		2,940		4,344		(397)		37,570
Noninterest expense (benefit)	Noninterest expense (benefit)	332,490		5,708		11,215		423		349,836		Noninterest expense (benefit)	109,284		1,886		3,945		(74)		115,041
Income (loss) before income taxes	Income (loss) before income taxes	70,624		2,503		2,536		(10,511)		65,152		Income (loss) before income taxes	4,056		1,241		702		(3,218)		2,781
Income tax expense (benefit)	Income tax expense (benefit)	15,088		658		0		(2,724)		13,022		Income tax expense (benefit)	1,280		330		0		(837)		773
Net income (loss)	Net income (loss)	$	55,536	$	1,845	$	2,536	$	(7,787)	$	52,130	Net income (loss)	$	2,776	$	911	$	702	$	(2,381)	$	2,008

Total assets	Total assets	$	14,694,683	$	30,138	$	68,261	$	15,851	$	14,808,933	Total assets	$	13,776,076	$	28,448	$	71,895	$	24,131	$	13,900,550
Goodwill	Goodwill	$	936,916	$	2,767	$	0	$	0	$	939,683	Goodwill	$	936,916	$	2,767	$	0	$	0	$	939,683

Nine months ended September 30, 2019
Net interest income (loss)		$	343,418	$	516	$	1,244	$	(10,406)	$	334,772
Provision for credit losses on loans		4,100		0		0		0		4,100
Noninterest income		97,789		7,634		11,408		(1,033)		115,798
Noninterest expense		261,905		5,661		10,199		857		278,622
Income (loss) before income taxes		175,202		2,489		2,453		(12,296)		167,848
Income tax expense (benefit)		41,205		648		0		(3,186)		38,667
Net income (loss)		$	133,997	$	1,841	$	2,453	$	(9,110)	$	129,181

Total assets		$	12,922,205	$	27,448	$	70,973	$	19,048	$	13,039,674
Goodwill		$	936,916	$	2,767	$	0	$	0	$	939,683

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(In Thousands, Except Share Data)

This Form 10-Q may contain or incorporate by reference statements regarding Renasant Corporation (referred to herein as the “Company”, “we”, “our”, or “us”) that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “projects,” “anticipates,” “intends,” “estimates,” “plans,” “potential,” “possible,” “may increase,” “may fluctuate,” “will likely result,” and similar expressions, or future or conditional verbs such as “will,” “should,” “would” and “could,” are generally forward-looking in nature and not historical facts. Forward-looking statements include information about the Company’s future financial performance, business strategy, projected plans and objectives and are based on the current beliefs and expectations of management. The Company’s management believes these forward-looking statements are reasonable, but they are all inherently subject to significant business, economic and competitive risks and uncertainties, many of which are beyond the Company’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ from those indicated or implied in the forward-looking statements, and such differences may be material. Prospective investors are cautioned that any such forward-looking statements are not guarantees for future performance and involve risks and uncertainties and, accordingly, investors should not place undue reliance on these forward-looking statements, which speak only as of the date they are made.

In the current environment, one of the most important factors that could cause the Company’s actual results to differ materially from those in forward-looking statements is the continued impact of the COVID-19 pandemic and related governmental measures to respond to the pandemic on the United States economy and the economies of the markets in which the Company ~~operates.~~operates and its participation in government programs related to the pandemic. In this Form 10-Q, the Company addresses the historical impact of the pandemic on certain aspects of the Company’s operations and sets forth certain expectations regarding the COVID-19 pandemic’s future impact on the Company’s business, financial condition, results of operations, liquidity, asset quality, capital, cash flows and prospects. The Company believes that its statements regarding future events and conditions in light of the COVID-19 pandemic are reasonable, but these statements are based on assumptions regarding, among other things, how long the pandemic will continue, the pace at which the COVID-19 vaccine can be distributed and administered to residents of the markets the Company serves and the United States generally, the duration, extent and effectiveness of the governmental measures implemented to contain the pandemic and ameliorate its impact on businesses and individuals throughout the United States, and the impact of the pandemic and the government’s virus containment measures on national and local economies, all of which are out of the Company’s control. If the Company’s assumptions underlying its statements about future events prove to be incorrect, the Company’s business, financial condition, results of operations, liquidity, asset quality, capital, cash flows and prospects may be materially ~~and adversely affected.~~different from what is presented in the Company’s forward-looking statements.

Important factors other than the COVID-19 pandemic currently known to management that could cause actual results to differ materially from those in forward-looking statements include the following: (1) 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; (2) the effect of economic conditions and interest rates on a national, regional or international basis; (3) timing and success of the implementation of changes in operations to achieve enhanced earnings or effect cost savings; (4) competitive pressures in the consumer finance, commercial finance, insurance, financial services, asset management, retail banking, mortgage lending and auto lending industries; (5) the financial resources of, and products available from, competitors; (6) changes in laws and regulations as well as changes in accounting ~~standards, such as the adoption of ASC 326 (or CECL) as of January 1, 2020;~~standards; (7) changes in policy by regulatory agencies; (8) changes in the securities and foreign exchange markets; (9) the Company’s potential growth, including its entrance or expansion into new markets, and the need for sufficient capital to support that growth; (10) 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; (11) an insufficient allowance for credit losses as a result of inaccurate assumptions; (12) general economic, market or business conditions, including the impact of inflation; (13) changes in demand for loan products and financial services; (14) concentration of credit exposure; (15) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships; (16) increased cybersecurity risk, including potential network breaches, business disruptions or financial losses; (17) natural disasters, epidemics and other catastrophic events in the Company’s geographic area; (18) the impact, extent and timing of technological changes; and (19) other circumstances, many of which are beyond management’s control. The COVID-19 pandemic has exacerbated, and is likely to continue to exacerbate, the impact of any of these factors on the Company. Management believes that the assumptions underlying the Company’s forward-looking statements are reasonable, but any of the assumptions could prove to be inaccurate.

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The Company undertakes no obligation, and specifically disclaims any obligation, to update or revise forward-looking statements, whether as a result of new information or to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, except as required by federal securities laws.

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~~COVID-19 Response Update~~

The Company reopened its branch lobbies to the public on October 19, 2020, subject to capacity limitations, mask-wearing and social distancing requirements designed to promote the safety of our clients and employees. Also, the additional measures the Company implemented to minimize Company employees’ exposure to COVID-19, such as working remotely, reconfiguring work spaces to promote social distancing and adjusting staff levels, remain in place. As discussed in more detail below, in the third quarter of 2020, the Company continued to incur expenses, primarily related to employee overtime and other employee benefit costs, in its response to the COVID-19 pandemic and expects that these elevated expenses will continue in future periods even while conditions presenting significant challenges to growth persist. Readers are directed to the cautionary note regarding forward-looking statements at the beginning of this Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The Company has been active in the Paycheck Protection Program (“PPP”) and as of September 30, 2020, the balance of such loans included in the Company’s Consolidated Balance Sheets approximated $1,307,972. The impact of these loans on the Company’s results of operations is discussed in more detail below.

Financial Condition

The following discussion provides details regarding the changes in significant balance sheet accounts at ~~September 30, 2020~~March 31, 2021 compared to December 31, ~~2019.~~2020.

Assets

Total assets were ~~$14,808,933~~$15,622,571 at ~~September 30, 2020~~March 31, 2021 compared to ~~$13,400,618~~$14,929,612 at December 31, ~~2019.~~2020.

Investments

The securities portfolio is ~~used to provide~~ a liquid source ~~for meeting liquidity needs and to supply securities to~~of interest income that also can be used in collateralizing certain deposits and other types of borrowings. The following table shows the carrying value of our securities portfolio, all of which are classified as available for sale, by investment type and the percentage of such investment type relative to the entire securities portfolio as of the dates presented:


		September 30, 2020				December 31, 2019					March 31, 2021				December 31, 2020
		Balance		Percentage of Portfolio		Balance		Percentage of Portfolio			Balance		Percentage of Portfolio		Balance		Percentage of Portfolio
U.S. Treasury securities	U.S. Treasury securities	$	7,112	0.55	%	$	499	0.04	%	U.S. Treasury securities	$	3,050	0.20	%	$	7,079	0.53	%
Obligations of other U.S. Government agencies and corporations	Obligations of other U.S. Government agencies and corporations	1,515		0.12		2,531		0.20		Obligations of other U.S. Government agencies and corporations	1,004		0.07		1,009		0.08
Obligations of states and political subdivisions	Obligations of states and political subdivisions	277,640		21.47		223,131		17.29		Obligations of states and political subdivisions	328,818		21.41		305,201		22.72
Mortgage-backed securities	Mortgage-backed securities	933,330		72.15		998,101		77.33		Mortgage-backed securities	1,139,970		74.21		955,549		71.12
Trust preferred securities	Trust preferred securities	8,492		0.66		9,986		0.77		Trust preferred securities	—		—		9,012		0.67
Other debt securities	Other debt securities	65,299		5.05		56,365		4.37		Other debt securities	63,199		4.11		65,607		4.88

		$	1,293,388	100.00	%	$	1,290,613	100.00	%		$	1,536,041	100.00	%	$	1,343,457	100.00	%

During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, we purchased ~~$304,955~~$465,245 in investment securities. Mortgage-backed securities and collateralized mortgage obligations (“CMOs”), in the aggregate, comprised approximately ~~64%~~93% of these purchases. CMOs are included in the “Mortgage-backed securities” line item in the above table. The mortgage-backed securities and CMOs held in our investment portfolio are primarily issued by government sponsored entities. Obligations of state and political subdivisions comprised approximately ~~29%~~7% of purchases made during the first ~~nine~~three months of ~~2020.~~2021.

Proceeds from maturities, calls and principal payments on securities during the first ~~nine~~three months of ~~2020~~2021 totaled ~~$314,363.~~$95,382. The Company sold municipal securities, ~~and~~ residential mortgage backed securities, and trust preferred securities with a carrying value of ~~$8,742~~$154,034 at the time of sale for net proceeds of ~~$8,773,~~$155,391, resulting in a net gain on sale of ~~$31~~$1,357 during the first ~~nine~~three months of ~~2020.~~2021. Proceeds from the maturities, calls and principal payments on securities during the first ~~nine~~three months of ~~2019~~2020 totaled ~~$192,520. During~~$76,269. The Company did not sell any securities during the first ~~nine~~three months of 2019, the Company sold municipal securities and commercial and residential mortgage backed securities as well as other debt and equity securities with a carrying value of $212,137 at the time of sale for net proceeds of $212,485, resulting in a net gain on sale of $348.

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2020.

For more information about the Company’s security portfolio, see Note 2, “Securities,” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements, in this report.

Loans Held for Sale

Loans held for sale, which consist of residential mortgage loans being held until they are sold onin the secondary market, were ~~$399,773~~$502,002 at ~~September 30, 2020,~~March 31, 2021, as compared to ~~$318,272~~$417,771 at December 31, ~~2019.~~2020. Mortgage loans to be sold are sold either on a “best efforts” basis or under a mandatory delivery sales agreement. Under a “best efforts” sales agreement, residential real estate originations are locked in at a contractual rate with third party private investors or directly with government sponsored agencies, and the Company is obligated to sell the mortgages to such investors only if the mortgages are closed and funded. The risk we assume is conditioned upon loan underwriting and market conditions in the national mortgage market. Under a mandatory delivery sales agreement, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price and delivery date. Penalties are paid to the investor if we fail to satisfy the contract. Gains and losses are realized at the time consideration is received and all other criteria for sales treatment have been met. Our standard

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practice is to sell the loans within 30-40 days after the loan is funded. Although loan fees and some interest income are derived from mortgage loans held for sale, the main source of income is gains from the sale of these loans in the secondary market.

Loans

Total loans, excluding loans held for sale, were ~~$11,084,738~~$10,688,408 at ~~September 30, 2020~~March 31, 2021 and ~~$9,689,638~~$10,933,647 at December 31, ~~2019.~~2020. Non purchased loans totaled ~~$9,424,224~~$9,292,502 at ~~September 30, 2020~~March 31, 2021 compared to ~~$7,587,974~~$9,419,540 at December 31, ~~2019.~~2020. Loans purchased in previous acquisitions totaled ~~$1,660,514~~$1,395,906 and ~~$2,101,664~~$1,514,107 at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively.

The tables below set forth the balance of loans outstanding, net of unearned income and excluding loans held for sale, ~~outstanding~~ by loan type and the percentage of each loan type to total loans as of the dates presented:


		September 30, 2020									March 31, 2021
		Non Purchased		Purchased		Total Loans		Percentage of Total Loans			Non Purchased		Purchased		Total Loans		Percentage of Total Loans
Commercial, financial, agricultural (1)	Commercial, financial, agricultural (1)	$	2,445,294	$	202,768	$	2,648,062	23.89	%	Commercial, financial, agricultural (1)	$	2,105,444	$	143,843	$	2,249,287	21.04	%
Lease financing, net of unearned income	Lease financing, net of unearned income	82,928		—		82,928		0.75		Lease financing, net of unearned income	75,256		—		75,256		0.70
Real estate – construction:	Real estate – construction:									Real estate – construction:
Residential	Residential	261,432		3,093		264,525		2.39		Residential	252,795		2,561		255,356		2.39
Commercial	Commercial	477,441		31,153		508,594		4.59		Commercial	680,791		19,771		700,562		6.55

Total real estate – construction	Total real estate – construction	738,873		34,246		773,119		6.98		Total real estate – construction	933,586		22,332		955,918		8.94
Real estate – 1-4 family mortgage:	Real estate – 1-4 family mortgage:									Real estate – 1-4 family mortgage:
Primary	Primary	1,517,528		245,369		1,762,897		15.90		Primary	1,576,212		190,539		1,766,751		16.53
Home equity	Home equity	442,380		95,235		537,615		4.85		Home equity	432,207		72,413		504,620		4.72
Rental/investment	Rental/investment	272,811		33,567		306,378		2.76		Rental/investment	256,979		28,800		285,779		2.67
Land development	Land development	136,573		16,931		153,504		1.38		Land development	115,522		13,389		128,911		1.21
Total real estate – 1-4 family mortgage	Total real estate – 1-4 family mortgage	2,369,292		391,102		2,760,394		24.89		Total real estate – 1-4 family mortgage	2,380,920		305,141		2,686,061		25.13
Real estate – commercial mortgage:	Real estate – commercial mortgage:									Real estate – commercial mortgage:
Owner-occupied	Owner-occupied	1,316,408		355,994		1,672,402		15.09		Owner-occupied	1,344,154		300,616		1,644,770		15.39
Non-owner occupied	Non-owner occupied	2,176,562		577,679		2,754,241		24.85		Non-owner occupied	2,221,206		546,663		2,767,869		25.90
Land development	Land development	117,672		32,694		150,366		1.36		Land development	110,800		25,588		136,388		1.28
Total real estate – commercial mortgage	Total real estate – commercial mortgage	3,610,642		966,367		4,577,009		41.30		Total real estate – commercial mortgage	3,676,160		872,867		4,549,027		42.57
Installment loans to individuals	Installment loans to individuals	177,195		66,031		243,226		2.19		Installment loans to individuals	121,136		51,723		172,859		1.62
Total loans, net of unearned income	Total loans, net of unearned income	$	9,424,224	$	1,660,514	$	11,084,738	100.00	%	Total loans, net of unearned income	$	9,292,502	$	1,395,906	$	10,688,408	100.00	%

(1)Includes ~~PPP~~Paycheck Protection Program (“PPP”) loans of ~~$1,307,972~~$860,864 as of ~~September 30, 2020.~~March 31, 2021.

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		December 31, 2019									December 31, 2020
		Non Purchased		Purchased		Total Loans		Percentage of Total Loans			Non Purchased		Purchased		Total Loans		Percentage of Total Loans
Commercial, financial, agricultural(1)	Commercial, financial, agricultural(1)	$	1,052,353	$	315,619	$	1,367,972	14.12	%	Commercial, financial, agricultural(1)	$	2,360,471	$	176,513	$	2,536,984	23.20	%
Lease financing, net of unearned income	Lease financing, net of unearned income	81,875		—		81,875		0.84		Lease financing, net of unearned income	75,862		—		75,862		0.69
Real estate – construction:	Real estate – construction:									Real estate – construction:
Residential	Residential	272,643		16,407		289,050		2.98		Residential	243,814		2,859		246,673		2.26
Commercial	Commercial	502,258		35,175		537,433		5.55		Commercial	583,338		28,093		611,431		5.59
Total real estate – construction	Total real estate – construction	774,901		51,582		826,483		8.53		Total real estate – construction	827,152		30,952		858,104		7.85
Real estate – 1-4 family mortgage:	Real estate – 1-4 family mortgage:									Real estate – 1-4 family mortgage:
Primary	Primary	1,449,219		332,729		1,781,948		18.39		Primary	1,536,181		214,770		1,750,951		16.02
Home equity	Home equity	456,265		117,275		573,540		5.92		Home equity	432,768		80,392		513,160		4.69
Rental/investment	Rental/investment	291,931		43,169		335,100		3.46		Rental/investment	264,436		31,928		296,364		2.71
Land development	Land development	152,711		23,314		176,025		1.82		Land development	123,179		14,654		137,833		1.26
Total real estate – 1-4 family mortgage	Total real estate – 1-4 family mortgage	2,350,126		516,487		2,866,613		29.59		Total real estate – 1-4 family mortgage	2,356,564		341,744		2,698,308		24.68
Real estate – commercial mortgage:	Real estate – commercial mortgage:									Real estate – commercial mortgage:
Owner-occupied	Owner-occupied	1,209,204		428,077		1,637,281		16.90		Owner-occupied	1,334,765		323,041		1,657,806		15.16
Non-owner occupied	Non-owner occupied	1,803,587		647,308		2,450,895		25.29		Non-owner occupied	2,194,739		552,728		2,747,467		25.13
Land development	Land development	116,085		40,004		156,089		1.61		Land development	120,125		29,454		149,579		1.37
Total real estate – commercial mortgage	Total real estate – commercial mortgage	3,128,876		1,115,389		4,244,265		43.80		Total real estate – commercial mortgage	3,649,629		905,223		4,554,852		41.66
Installment loans to individuals	Installment loans to individuals	199,843		102,587		302,430		3.12		Installment loans to individuals	149,862		59,675		209,537		1.92
Total loans, net of unearned income	Total loans, net of unearned income	$	7,587,974	$	2,101,664	$	9,689,638	100.00	%	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 ~~September 30, 2020,~~March 31, 2021, there were no concentrations of loans exceeding 10% of total loans which are not disclosed as a category of loans separate from the categories listed above.

The Company participated in the Paycheck Protection Program (“PPP”) until its closure in August 2020. As of September 30, 2020, we had $1,307,972 in PPP loans included in our commercial, financial and agricultural loan portfolio.

Deposits

The Company relies on deposits as its major source of funds. Total deposits were ~~$11,934,140~~$12,736,908 and ~~$10,213,168~~$12,059,081 at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively. Noninterest-bearing deposits were ~~$3,758,242~~$4,135,360 and ~~$2,551,770~~$3,685,048 at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively, while interest-bearing deposits were ~~$8,175,898~~$8,601,548 and ~~$7,661,398~~$8,374,033 at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively.

The growth in noninterest-bearing deposits across the Company’s footprint during the current year is driven by ~~the Company’s PPP lending (as loan proceeds have been held as Company deposits until utilization), other~~ government stimulus payments and client sentiment to maintain liquidity. Management continues to focus on growing and maintaining a stable source of funding, specifically noninterest-bearing deposits and other core deposits. Noninterest bearing deposits represented ~~31.49%~~32.47% of total deposits at ~~September 30, 2020,~~March 31, 2021, as compared to ~~24.99%~~30.56% of total deposits at December 31, ~~2019.~~2020. Under certain circumstances, however, management may ~~seek~~elect to acquire non-core deposits in the form of time deposits or public fund deposits (which are deposits of counties, municipalities or other political subdivisions). The source of funds that we select depends on the terms and how those terms assist us in mitigating interest rate risk, maintaining our liquidity position and managing our net interest margin. Accordingly, funds are acquired to meet anticipated funding needs at the rate and with other terms that, in management’s view, best address our interest rate risk, liquidity and net interest margin parameters.

Public fund deposits may be readily obtained based on the Company’s pricing bid in comparison with competitors. Because public fund deposits are obtained through a bid process, these deposit balances may fluctuate as competitive and market forces change. Although the Company has focused on growing stable sources of deposits to reduce reliance on public fund deposits, it participates in the bidding process for public fund deposits when pricing and other terms make it reasonable given market conditions or when management perceives that other factors, such as the public entity’s use of our treasury management or other products and services, make such participation advisable. Our public fund transaction accounts are principally obtained

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from municipalities, including school boards and utilities. Public fund deposits were ~~$1,359,022~~$1,548,228 and ~~$1,367,827~~$1,398,330 at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively.

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Borrowed Funds

Total borrowings include federal funds purchased, securities sold under agreements to repurchase, advances from the FHLB, subordinated notes and junior subordinated debentures and are classified on the Consolidated Balance Sheets as either short-term borrowings or long-term debt. Short-term borrowings have original maturities less than one year and typically include federal funds purchased, securities sold under agreements to repurchase, and short-term FHLB advances. ~~In the first nine months of 2020, we used the proceeds of our deposit growth and other sources of liquidity to reduce our short-term borrowings.~~ The following table presents our short-term borrowings by type as of the dates presented:


		September 30, 2020		December 31, 2019
		Balance		Balance			March 31, 2021		December 31, 2020
							Balance		Balance
Security repurchase agreements	Security repurchase agreements	$	12,624	$	9,091	Security repurchase agreements	$	12,154	$	10,947
Short-term borrowings from the FHLB		30,000		480,000
Federal funds purchased						Federal funds purchased	—		10,393

		$	42,624	$	489,091
							$	12,154	$	21,340

At ~~September 30, 2020,~~March 31, 2021, long-term debt consists of long-term FHLB advances, our junior subordinated debentures and our subordinated notes. The following table presents our long-term debt by type as of the dates presented:


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
		Balance		Balance			Balance		Balance
Long-term FHLB advances	Long-term FHLB advances	$	152,210	$	152,337	Long-term FHLB advances	$	152,124	$	152,167
Junior subordinated debentures	Junior subordinated debentures	110,649		110,215		Junior subordinated debentures	110,939		110,794
Subordinated notes	Subordinated notes	212,223		113,955		Subordinated notes	204,597		212,009
		$	475,082	$	376,507		$	467,660	$	474,970

Long-term funds obtained from the FHLB ~~borrowings~~ are ~~generally~~ used to match-fund ~~against large,~~ fixed rate ~~commercial or real estate~~ loans ~~with long-term maturities, which helps mitigate~~in order to minimize interest rate ~~exposure~~risk and also are used to meet day-to-day liquidity needs, particularly when the cost of such borrowing compares favorably to the rates ~~rise. In the fourth quarter of 2019, however, as interest rates declined following the Federal Reserve’s interest rate cuts,~~that we used long-term FHLB borrowings as a source of liquidity in lieu of higher-costing deposits, which had not repriced as quickly following the interest rate cuts. These borrowings were still outstanding at September 30, 2020.would be required to pay to attract deposits. At ~~September 30, 2020,~~March 31, 2021, there were ~~$110~~$89 in outstanding long-term FHLB advances ~~outstanding~~ scheduled to mature within twelve months or less. The Company had ~~$3,590,752~~$3,681,061 of availability on unused lines of credit with the FHLB at ~~September 30, 2020,~~March 31, 2021, as compared to ~~$3,159,942~~$3,784,520 at December 31, ~~2019.~~

On September 3, 2020, the Company completed the public offering and sale of $100,000 of its 4.50% fixed-to-floating rate subordinated notes due September 1, 2035. The subordinated notes were sold at par, resulting in net proceeds, after deducting underwriting discounts and expenses, of approximately $98,299. 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.2020.

The Company ~~owns other~~has issued subordinated notes, the proceeds of which have been used for general corporate purposes, including providing capital to support the Company’s growth organically or through strategic acquisitions, repaying indebtedness and financing investments and capital expenditures, and for investments in the Bank as regulatory capital. 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.)~~acquired). The debentures are the trusts’ only assets and interest payments from the debentures finance the distributions paid on the capital securities.

Results of Operations

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Net Income

Net income for the ~~third~~first quarter of ~~2020~~2021 was ~~$29,992~~$57,908 compared to net income of ~~$37,446~~$2,008 for the ~~third~~first quarter of ~~2019.~~2020. Basic and diluted earnings per share (“EPS”) for the ~~third~~first quarter of ~~2020~~2021 were ~~$0.53,~~$1.03 and $1.02, respectively, as compared to basic ~~EPS of $0.65~~ and diluted EPS of $0.64 for the third quarter of 2019. Net income for the nine months ended September 30, 2020, was $52,130 compared to net income of $129,181 for the same period in 2019. Basic and diluted EPS were $0.93 and $0.92$0.04 for the first ~~nine months~~quarter of ~~2020, respectively, as compared to $2.21 for the first nine months of 2019.~~2020. As discussed in more detail below, our net income was significantly impacted by ~~expenses associated with the adoption of CECL, the COVID-19 pandemic (including provision expense related thereto), and~~ an adjustment to the valuation of our mortgage servicing rights (“MSR”). and the absence of a provision for credit losses expense in the quarter.

From time to time, the Company incurs expenses and charges or recognizes valuation adjustments in connection with certain transactions with respect to which management is unable to accurately predict when these ~~expenses or charges~~items will be incurred or, when incurred, the amount of such ~~expenses or charges.~~items. The following table presents the impact of these ~~expenses and charges~~items on reported EPS for the 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

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legislation enacted to address the pandemic, such as the CARES Act, and (b) expenses associated with supplying branches with protective equipment and sanitation supplies (such as floor markings and cautionary signage for branches, face coverings and hand sanitizer) as well as more frequent and rigorous branch cleaning. ~~The MSR valuation adjustment is discussed below under the “Noninterest Income” heading in this Item.~~


		Three Months Ended													Three Months Ended
		September 30, 2020						September 30, 2019							March 31, 2021						March 31, 2020
		Pre-tax		After-tax		Impact to Diluted EPS		Pre-tax		After-tax		Impact to Diluted EPS			Pre-tax		After-tax		Impact to Diluted EPS		Pre-tax		After-tax		Impact to Diluted EPS

MSR valuation adjustment	MSR valuation adjustment	$	(828)	$	(650)	$	(0.01)	$	3,132	$	2,414	$	0.04	MSR valuation adjustment	$	(13,561)	$	(10,497)	$	(0.19)	$	9,571	$	6,911	$	0.12
Restructuring charges														Restructuring charges	292		226		0.01		—		—		—
COVID-19 related expenses	COVID-19 related expenses	570		448		0.01		—		—		—		COVID-19 related expenses	785		608		0.01		2,903		2,096		0.04

		Nine Months Ended
		September 30, 2020						September 30, 2019
		Pre-tax		After-tax		Impact to Diluted EPS		Pre-tax		After-tax		Impact to Diluted EPS

MSR valuation adjustment		$	13,694	$	10,916	$	0.19	$	3,132	$	2,410	$	0.04
COVID-19 related expenses		9,730		7,758		0.14		—		—		—

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 ~~60.33%~~57.86% of total revenue (i.e., net interest income on a fully taxable equivalent basis and noninterest income) for the ~~third~~first quarter of ~~2020 and 65.21% of total revenue for the first nine months of 2020.~~2021. The primary concerns in managing net interest income are the volume, mix and repricing of assets and liabilities.

Net interest income was ~~$106,286 and $318,670~~$109,648 for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021 as compared to ~~$108,825 and $334,772~~$106,602 for the same ~~respective periods~~period in ~~2019.~~2020. On a tax equivalent basis, net interest income was ~~$107,885 and $323,659~~$111,264 for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021 as compared to ~~$110,276 and $339,130~~$108,316 for the same ~~respective~~ time ~~periods~~period in ~~2019.~~2020.

The following ~~tables set~~table sets forth average balance sheet data, including all major categories of interest-earning assets and interest-bearing liabilities, together with the interest earned or interest paid and the average yield or average rate paid on each such category for the periods presented:

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		Three Months Ended September 30,													Three Months Ended March 31,
		2020						2019							2021						2020
		Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate			Average Balance		Interest Income/ Expense		Yield/ Rate		Average Balance		Interest Income/ Expense		Yield/ Rate
Assets	Assets													Assets
Interest-earning assets:	Interest-earning assets:													Interest-earning assets:
Loans held for investment:	Loans held for investment:													Loans held for investment:
Non purchased	Non purchased	$	8,012,741	$	81,281	4.04	%	$	6,792,021	$	85,084	4.97	%	Non purchased	$	8,362,793	$	81,928	3.97	%	$	7,654,662	$	88,554	4.65	%
Purchased	Purchased	1,723,714		24,034		5.55		2,317,231		36,330		6.22		Purchased	1,454,637		20,457		5.69		2,032,623		30,187		5.97

Paycheck Protection Program	Paycheck Protection Program	1,305,229		7,449		2.27		—		—		—		Paycheck Protection Program	985,561		10,687		4.40		—		—		—
Total loans held for investment	Total loans held for investment	11,041,684		112,764		4.06		9,109,252		121,414		5.29		Total loans held for investment	10,802,991		113,072		4.24		9,687,285		118,741		4.93
Loans held for sale	Loans held for sale	378,225		3,144		3.31		385,437		3,977		4.09		Loans held for sale	406,397		2,999		2.96		336,829		2,988		3.57
Securities:	Securities:													Securities:
Taxable(1)	Taxable(1)	1,003,886		5,473		2.17		1,040,302		7,200		2.75		Taxable(1)	1,065,779		4,840		1.82		1,067,274		7,289		2.75
Tax-exempt	Tax-exempt	265,679		2,205		3.30		187,376		1,846		3.91		Tax-exempt	306,344		2,284		2.98		225,601		2,058		3.67
Interest-bearing balances with banks	Interest-bearing balances with banks	344,948		91		0.10		271,278		1,490		2.18		Interest-bearing balances with banks	777,166		183		0.10		292,488		811		1.12
Total interest-earning assets	Total interest-earning assets	13,034,422		123,677		3.77		10,993,645		135,927		4.91		Total interest-earning assets	13,358,677		123,378		3.74		11,609,477		131,887		4.57
Cash and due from banks	Cash and due from banks	210,278						173,156						Cash and due from banks	205,830						186,317
Intangible assets	Intangible assets	972,394						975,306						Intangible assets	969,001						975,933

Other assets	Other assets	711,065						704,024						Other assets	670,183						700,823
Total assets	Total assets	$	14,928,159					$	12,846,131					Total assets	$	15,203,691					$	13,472,550
Liabilities and shareholders’ equity	Liabilities and shareholders’ equity													Liabilities and shareholders’ equity
Interest-bearing liabilities:	Interest-bearing liabilities:													Interest-bearing liabilities:
Deposits:	Deposits:													Deposits:
Interest-bearing demand(2)	Interest-bearing demand(2)	$	5,405,085	$	4,839	0.36	%	$	4,740,426	$	10,769	0.90	%	Interest-bearing demand(2)	$	5,906,230	$	3,932	0.27	%	$	4,939,757	$	9,253	0.75	%
Savings deposits	Savings deposits	796,841		167		0.08		652,121		355		0.22		Savings deposits	882,758		169		0.08		681,182		252		0.15
Time deposits	Time deposits	1,907,918		6,804		1.42		2,326,963		10,390		1.77		Time deposits	1,655,778		4,178		1.02		2,116,676		8,989		1.71
Total interest-bearing deposits	Total interest-bearing deposits	8,109,844		11,810		0.58		7,719,510		21,514		1.11		Total interest-bearing deposits	8,444,766		8,279		0.40		7,737,615		18,494		0.96
Borrowed funds	Borrowed funds	719,800		3,982		2.20		308,931		4,137		5.31		Borrowed funds	483,907		3,835		3.21		829,320		5,077		2.46
Total interest-bearing liabilities	Total interest-bearing liabilities	8,829,644		15,792		0.71		8,028,441		25,651		1.27		Total interest-bearing liabilities	8,928,673		12,114		0.55		8,566,935		23,571		1.11
Noninterest-bearing deposits	Noninterest-bearing deposits	3,723,059						2,500,810						Noninterest-bearing deposits	3,862,422						2,586,963
Other liabilities	Other liabilities	255,956						185,343						Other liabilities	240,171						213,509
Shareholders’ equity	Shareholders’ equity	2,119,500						2,131,537						Shareholders’ equity	2,172,425						2,105,143
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	14,928,159					$	12,846,131					Total liabilities and shareholders’ equity	$	15,203,691					$	13,472,550
Net interest income/net interest margin	Net interest income/net interest margin			$	107,885	3.29	%			$	110,276	3.98	%	Net interest income/net interest margin			$	111,264	3.37	%			$	108,316	3.75	%

(1)U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which ~~we operate.~~the Company operates.

(2)Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.

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Nine Months Ended September 30,
2020 2019
Average
Balance Interest
Income/
Expense Yield/
Rate Average
Balance Interest
Income/
Expense Yield/
Rate
Assets
Interest-earning assets:
Loans held for investment:
Non purchased $ 7,847,197 $ 251,671 4.28 % $ 6,624,266 $ 250,190 5.05 %
Purchased 1,877,449 80,226 5.71 2,446,863 115,298 6.30
Paycheck Protection Program 725,891 13,335 2.45 — — —
Total loans held for investment 10,450,537 345,232 4.41 9,071,129 365,488 5.39
Loans held for sale 351,975 9,108 3.46 361,415 15,004 5.55
Securities:
Taxable(1)
1,034,189 19,148 2.47 1,062,261 22,792 2.87
Tax-exempt 251,744 6,609 3.51 185,370 5,728 4.13
Interest-bearing balances with banks 387,116 1,098 0.38 263,967 4,778 2.42
Total interest-earning assets 12,475,561 381,195 4.08 10,944,142 413,790 5.06
Cash and due from banks 203,582 181,140
Intangible assets 974,182 975,579
Other assets 717,628 680,140
Total assets $ 14,370,953 $ 12,781,001
Liabilities and shareholders’ equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand(2)
$ 5,166,393 $ 19,616 0.51 % $ 4,755,948 $ 31,338 0.88 %
Savings deposits 741,933 592 0.11 642,523 976 0.20
Time deposits 2,019,173 23,967 1.59 2,358,031 29,963 1.70
Total interest-bearing deposits 7,927,499 44,175 0.74 7,756,502 62,277 1.07
Borrowed funds 849,494 13,361 2.10 341,903 12,383 4.84
Total interest-bearing liabilities 8,776,993 57,536 0.88 8,098,405 74,660 1.23
Noninterest-bearing deposits 3,251,612 2,413,619
Other liabilities 233,730 169,068
Shareholders’ equity 2,108,618 2,099,909
Total liabilities and shareholders’ equity $ 14,370,953 $ 12,781,001
Net interest income/net interest margin $ 323,659 3.47 % $ 339,130 4.14 %

~~(1)U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which we operate.~~

~~(2)Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.~~

The average balances of nonaccruing assets are included in the ~~tables~~table above. Interest income and weighted average yields on tax-exempt loans and securities have been computed on a fully tax equivalent basis assuming a federal tax rate of 21% and a state tax rate of 4.45%, which is net of federal tax benefit.

Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes in volume, mix and 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, ~~for both the three and nine months ended September 30, 2020, as compared to the same respective periods in 2019,~~ the decline in loan yields ~~as a result of~~due to the ~~Federal Reserve’s decision to cut~~current low interest ~~rates~~rate environment as well as changes in the mix of earning assets during the quarter due to increased liquidity on the balance sheet were the largest contributing factors to the decrease in net interest ~~income.~~margin for the three months ended March 31, 2021, as compared to the same period in 2020. The Company has continued to focus on lowering the cost of funding through growing noninterest-bearing deposits and aggressively lowering interest rates on interest-bearing deposits.

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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 ~~both~~ the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, as compared to the same ~~respective periods~~period in ~~2019~~2020 (the changes attributable to the combined impact of yield/rate and volume have been allocated on a pro-rata basis using the absolute value of amounts calculated):


		Three Months Ended September 30, 2020 Compared to the Three Months Ended September 30, 2019							Three Months Ended March 31, 2021 Compared to the Three Months Ended March 31, 2020
		Volume		Rate		Net			Volume		Rate		Net
Interest income:	Interest income:							Interest income:
Loans held for investment:	Loans held for investment:							Loans held for investment:
Non purchased	Non purchased	$	13,736	$	(17,539)	$	(3,803)	Non purchased	$	7,496	$	(14,122)	$	(6,626)
Purchased	Purchased	(8,643)		(3,653)		(12,296)		Purchased	(8,319)		(1,411)		(9,730)

Paycheck Protection Program	Paycheck Protection Program	7,449		—		7,449		Paycheck Protection Program	10,687		—		10,687
Loans held for sale	Loans held for sale	(185)		(648)		(833)		Loans held for sale	565		(554)		11
Securities:	Securities:							Securities:
Taxable	Taxable	(247)		(1,480)		(1,727)		Taxable	(10)		(2,439)		(2,449)
Tax-exempt	Tax-exempt	678		(319)		359		Tax-exempt	654		(428)		226
Interest-bearing balances with banks	Interest-bearing balances with banks	317		(1,716)		(1,399)		Interest-bearing balances with banks	551		(1,179)		(628)
Total interest-earning assets	Total interest-earning assets	13,105		(25,355)		(12,250)		Total interest-earning assets	11,624		(20,133)		(8,509)
Interest expense:	Interest expense:							Interest expense:
Interest-bearing demand deposits	Interest-bearing demand deposits	1,328		(7,258)		(5,930)		Interest-bearing demand deposits	1,531		(6,852)		(5,321)
Savings deposits	Savings deposits	66		(254)		(188)		Savings deposits	61		(144)		(83)
Time deposits	Time deposits	(1,702)		(1,884)		(3,586)		Time deposits	(1,694)		(3,117)		(4,811)
Borrowed funds	Borrowed funds	3,246		(3,401)		(155)		Borrowed funds	(2,505)		1,263		(1,242)
Total interest-bearing liabilities	Total interest-bearing liabilities	2,938		(12,797)		(9,859)		Total interest-bearing liabilities	(2,607)		(8,850)		(11,457)
Change in net interest income	Change in net interest income	$	10,167	$	(12,558)	$	(2,391)	Change in net interest income	$	14,231	$	(11,283)	$	2,948

		Nine months ended September 30, 2020 Compared to the Nine Months Ended September 30, 2019
		Volume		Rate		Net
Interest income:
Loans held for investment:
Non purchased		$	42,312	$	(40,831)	$	1,481
Purchased		(24,981)		(10,091)		(35,072)

Paycheck Protection Program		13,335		—		13,335
Loans held for sale		(4,186)		(1,710)		(5,896)
Securities:
Taxable		(586)		(3,058)		(3,644)
Tax-exempt		1,837		(956)		881
Interest-bearing balances with banks		1,560		(5,240)		(3,680)
Total interest-earning assets		29,291		(61,886)		(32,595)
Interest expense:
Interest-bearing demand deposits		2,514		(14,236)		(11,722)
Savings deposits		133		(517)		(384)
Time deposits		(4,095)		(1,901)		(5,996)
Borrowed funds		10,858		(9,880)		978
Total interest-bearing liabilities		9,410		(26,534)		(17,124)
Change in net interest income		$	19,881	$	(35,352)	$	(15,471)

Interest income, on a tax equivalent basis, was ~~$123,677 and $381,195, respectively,~~$123,378 for the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2021, as compared to ~~$135,927 and $413,790, respectively,~~$131,887 for the same ~~periods~~period in ~~2019.~~2020. This decrease in

~~Table of Contents~~

interest income, on a tax equivalent basis, is due primarily to the ~~aforementioned~~Federal Reserve maintaining low interest ~~rate cuts by the Federal Reserve~~rates since March 2020 and changes in the mix of earning assets during the quarter due to increased liquidity on the balance ~~sheet, the effects of which the Company was able to partially offset by loan growth.~~sheet.

The following table presents the percentage of total average earning assets, by type and yield, for the periods presented:


		Percentage of Total Average Earning Assets				Yield					Percentage of Total Average Earning Assets				Yield
		Three Months Ended				Three Months Ended					Three Months Ended				Three Months Ended
		September 30,				September 30,					March 31,				March 31,
		2020		2019		2020		2019			2021		2020		2021		2020
Loans held for investment excl. PPP		74.70	%	82.86	%	4.30	%	5.29	%
Loans held for investment, excl. PPP										Loans held for investment, excl. PPP	73.49	%	83.44	%	4.22	%	4.93	%
Paycheck Protection Program	Paycheck Protection Program	10.01		—		2.27		—		Paycheck Protection Program	7.38		—		4.40		—
Loans held for sale	Loans held for sale	2.90		3.51		3.31		4.09		Loans held for sale	3.04		2.90		2.96		3.57
Securities	Securities	9.74		11.17		2.41		2.92		Securities	10.27		11.14		2.08		2.91
Other	Other	2.65		2.46		0.10		2.18		Other	5.82		2.52		0.10		1.12
Total earning assets	Total earning assets	100.00	%	100.00	%	3.77	%	4.91	%	Total earning assets	100.00	%	100.00	%	3.74	%	4.57	%

Percentage of Total Average Earning Assets Yield
Nine Months Ended Nine Months Ended
September 30, September 30,
2020 2019 2020 2019
Loans held for investment excl. PPP 77.95 % 82.89 % 4.56 % 5.39 %
Paycheck Protection Program 5.82 — 2.45 —
Loans held for sale 2.82 3.30 3.46 5.55
Securities 10.31 11.40 2.68 3.06
Interest-bearing balances with banks 3.10 2.41 0.38 2.42
Total earning assets 100.00 % 100.00 % 4.08 % 5.06 %

For the ~~third~~first quarter of ~~2020,~~2021, interest income on loans held for investment, on a tax equivalent basis, decreased ~~$8,650~~$5,669 to ~~$112,764~~$113,072 from ~~$121,414~~$118,741 in the same period in ~~2019. For the nine months ended September 30, 2020, interest~~2020. Interest income on loans held for investment ~~on a tax equivalent basis,~~ decreased ~~$20,256~~primarily due to ~~$345,232 from $365,488 in~~ the ~~same period in 2019.~~Federal Reserve maintaining low interest rates since March 2020. Interest income attributable to PPP loans included in loan interest income for the ~~third~~first quarter of ~~2020~~2021 was ~~$7,449,~~$10,687, which consisted of ~~$3,262~~$2,392 in interest income and ~~$4,187~~$8,295 in accretion of net origination fees. ~~For the nine months ended September 30, 2020~~There was no interest income attributable to PPP loans ~~included in loan interest income was $13,335, which consisted~~during the three months ended March 31, 2020.

Table of ~~$5,587 in interest income and $7,748 in accretion of net~~Contents

The PPP origination ~~fees. As of September 30, 2020, the Company received approximately $45,611 in gross origination fees from PPP loans. Such~~ fees, net of agent fees paid and other origination costs, are being accreted into interest income over the life of the loan. If a PPP loan is forgiven in whole or in part, as provided under the CARES Act, the Company will recognize the non-accreted portion of the net origination fee attributable to the forgiven portion of such loan as of the date of the final forgiveness determination. ~~Interest income on loans held for investment decreased primarily due to decreases in loan yields in response to the Federal Reserve’s rate cuts and the funding of~~ PPP loans ~~during the quarter, which by law bear a fixed interest rate of 1.0%, significantly lower than the yield on loans originated in the ordinary course of business. PPP loans reduced~~increased margin and loan yield by 12eight basis points and 23two basis points, respectively, induring the ~~third~~first quarter of ~~2020~~2021. There was no impact to margin and ~~6 basis points and 14 basis points, respectively, in the first nine months of 2020.~~

~~For the third quarter of 2020, interest income on~~loan yield attributable to PPP loans ~~held~~ for ~~sale (consisting of mortgage loans held for sale), on a tax equivalent basis, decreased $833 to $3,144 from $3,977 in~~ the same period in 2019. For the nine months ended September 30, 2020, interest income on loans held for sale, on a tax equivalent basis, decreased $5,896 to $9,108 from $15,004 in the same period in 2019. The average balance of loans held for sale during the first nine months of 2019 includes a portfolio of non-mortgage consumer loans, which earned a higher yield than mortgage loans held for sale. These non-mortgage consumer loans were reclassified to loans held for investment in the third quarter of 2019. The transfer of the higher earning assets out of loans held for sale coupled with the lower rates earned on mortgage loans held for sale during 2020 accounts for the decrease in interest income on loans held for sale from 2019.

~~The following table presents reported taxable equivalent yield on loans, including loans held for sale, for the periods presented.~~

~~Table of Contents~~

Three Months Ended Nine Months Ended
September 30, September 30,
2020 2019 2020 2019
Taxable equivalent interest income on loans $ 115,908 $ 125,391 $ 354,340 $ 380,492
Average loans, including loans held for sale 11,419,909 9,494,689 10,802,512 9,432,544
Loan yield 4.04 % 5.24 % 4.38 % 5.39 %
2020.

The impact from interest income collected on problem loans and purchase accounting adjustments on loans to total interest income on loans ~~including loans~~ held for ~~sale,~~investment, loan yield and net interest margin is shown in the following table for the ~~period~~periods presented.


		Three Months Ended						Nine Months Ended							Three Months Ended
		September 30,						September 30,							March 31,
		2020			2019			2020			2019				2021			2020
Net interest income collected on problem loans	Net interest income collected on problem loans	$	282		$	905		$	884		$	3,890		Net interest income collected on problem loans	$	2,180		$	218
Accretable yield recognized on purchased loans(1)	Accretable yield recognized on purchased loans(1)	4,949			5,510			15,118			20,566			Accretable yield recognized on purchased loans(1)	3,088			5,469
Total impact to interest income on loans	Total impact to interest income on loans	$	5,231		$	6,415		$	16,002		$	24,456		Total impact to interest income on loans	$	5,268		$	5,687

Impact to loan yield	Impact to loan yield	0.18		%	0.27		%	0.20		%	0.35		%	Impact to loan yield	0.20		%	0.24		%

Impact to net interest margin	Impact to net interest margin	0.16		%	0.23		%	0.17		%	0.30		%	Impact to net interest margin	0.16		%	0.20		%

(1)Includes additional interest income recognized in connection with the acceleration of paydowns and payoffs from purchased loans of ~~$2,286~~$1,272 and ~~$2,564,~~$2,187, for the ~~third~~first quarter of ~~2020~~2021 and ~~2019, respectively. The impact was $6,205 and $10,594 for the nine months ended September 30,~~ 2020, ~~and 2019,~~ respectively. This additional interest income increased total loan yield by 8five basis points and 11nine basis points for the ~~third~~first quarter of ~~2020~~2021 and ~~2019,~~2020, respectively, while increasing net interest margin by 7four and 9eight basis points for the same respective periods.

For the ~~nine months ended September 30, 2020 and 2019, the additional~~first quarter of 2021, interest income on loans held for sale (consisting of mortgage loans held for sale), on a tax equivalent basis, increased ~~total loan yield by 8 basis points and 15 basis points, respectively, while increasing net interest margin by 7 basis points and 13 basis points, respectively.~~$11 to $2,999 from $2,988 in the same period in 2020.

Investment income, on a tax equivalent basis, decreased ~~$1,368~~$2,223 to ~~$7,678~~$7,124 for the ~~third~~first quarter of ~~2020~~2021 from ~~$9,046~~$9,347 for the ~~third~~first quarter of ~~2019. Investment income, on a tax equivalent basis, decreased $2,763 to $25,757 for the nine months ended September 30, 2020 from $28,520 for the same period in 2019.~~2020. The tax equivalent yield on the investment portfolio for the ~~third~~first quarter of ~~2020~~2021 was ~~2.41%~~2.08%, down 5183 basis points from ~~2.92% in~~2.91% for the same period in ~~2019. The tax equivalent yield on the investment portfolio for the nine months ended September 30, 2020 was 2.68%, down 38 basis points from 3.06% in the same period in 2019.~~2020. The decrease in taxable equivalent yield on securities was a result of ~~an increase in premium amortization caused by the increase in prepayment speeds experienced in the Company’s mortgage backed securities portfolio given~~ the current interest rate environment.

Interest expense was ~~$15,792~~$12,114 for the ~~third~~first quarter of ~~2020~~2021 as compared to ~~$25,651~~$23,571 for the same period in ~~2019. Interest expense for the nine months ended September 30, 2020 was $57,536 as compared to $74,660 for the same period in 2019.~~2020.

The following ~~tables present,~~table presents, by type, the Company’s funding sources, which consist of total average deposits and borrowed funds, and the total cost of each funding source for the periods presented:


	Percentage of Total Average Deposits and Borrowed Funds				Cost of Funds
	Three Months Ended				Three Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Noninterest-bearing demand	30.20	%	23.19	%	—	%	—	%
Interest-bearing demand	46.18		44.29		0.27		0.75
Savings	6.90		6.11		0.08		0.15
Time deposits	12.94		18.98		1.02		1.71
Short term borrowings	0.10		4.06		0.31		1.44
Long-term Federal Home Loan Bank advances	1.19		1.37		0.05		1.42
Subordinated notes	1.63		1.01		5.15		5.59
Other borrowed funds	0.86		0.99		4.24		4.85
Total deposits and borrowed funds	100.00	%	100.00	%	0.38	%	0.85	%

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Percentage of Total Average Deposits and Borrowed Funds Cost of Funds
Three Months Ended Three Months Ended
September 30, September 30,
2020 2019 2020 2019
Noninterest-bearing demand 29.66 % 23.75 % — % — %
Interest-bearing demand 43.06 45.02 0.36 0.90
Savings 6.35 6.19 0.08 0.22
Time deposits 15.20 22.10 1.42 1.77
Short term borrowings 2.49 0.56 0.95 3.50
Long-term Federal Home Loan Bank advances 1.21 0.06 0.16 3.47
Subordinated notes 1.15 1.28 5.46 6.54
Other borrowed funds 0.88 1.04 4.32 4.89
Total deposits and borrowed funds 100.00 % 100.00 % 0.50 % 0.97 %

Percentage of Total Average Deposits and Borrowed Funds Cost of Funds
Nine Months Ended Nine Months Ended
September 30, September 30,
2020 2019 2020 2019
Noninterest-bearing demand 27.03 % 22.96 % — % — %
Interest-bearing demand 42.95 45.25 0.51 0.88
Savings 6.17 6.11 0.11 0.20
Time deposits 16.79 22.43 1.59 1.70
Short-term borrowings 3.85 0.79 1.02 2.76
Long-term Federal Home Loan Bank advances 1.27 0.06 0.80 3.33
Subordinated notes 1.03 1.36 5.54 6.24
Other long term borrowings 0.91 1.04 4.56 4.69
Total deposits and borrowed funds 100.00 % 100.00 % 0.64 % 0.95 %

Interest expense on deposits was ~~$11,810~~$8,279 and ~~$21,514~~$18,494 for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively. The cost of total deposits was ~~0.40%~~0.27% and 0.84% for the same respective periods. Interest expense on deposits was $44,175 and $62,277 for the nine months ended September 30, 2020 and 2019, respectively, with the costs of total deposits being 0.53% and 0.82%0.72% for the same respective periods. The decrease in both deposit expense and cost is attributable to the Company’s efforts to reduce deposit rates as they reprice in ~~order to mitigate~~ the ~~effect of the Federal Reserve’s~~current low interest rate ~~cuts on the Company’s loan yields.~~environment. During ~~2020,~~2021, the Company has continued its efforts to grow non-interest bearing deposits, and such deposits represent ~~31.49%~~32.47% of total deposits at ~~September 30, 2020~~March 31, 2021 compared to ~~24.99%~~30.56% of total deposits at December 31, ~~2019.~~2020. The growth in non-interest bearing deposits during the year to date has been primarily driven by ~~the Company’s PPP lending (as loan proceeds were held as Company deposits until utilization), other~~ government stimulus payments and client sentiment. Low cost deposits continue to be the preferred choice of funding; however, the Company may rely on wholesale borrowings when rates are advantageous.

Interest expense on total borrowings was ~~$3,982~~$3,835 and ~~$4,137~~$5,077 for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively. Interest expense on total borrowings was $13,361 and $12,383 for the nine months ended September 30, 2020 and 2019,~~ respectively. The ~~increase~~decrease in interest expense asis a result of ~~higher borrowings was offset slightly by~~ lower ~~interest rates charged on our FHLB advances as rates fell during 2020.~~average borrowings.

A more detailed discussion of the cost of our funding sources is set forth below under the heading “Liquidity and Capital Resources” in this Item.

Noninterest Income

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Noninterest Income to Average Assets
Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
1.89% 1.17% 1.60% 1.21%


Noninterest Income to Average Assets
Three Months Ended March 31,
2021						2020
2.16%						1.13%

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 revenue sources. Noninterest income was ~~$70,928~~$81,037 for the ~~third~~first quarter of ~~2020~~2021 as compared to ~~$37,953~~$37,570 for the same period in ~~2019. Noninterest income was $172,668 for the nine months ended September 30, 2020 as compared to $115,798 for the same period in 2019.~~2020.

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 ~~$7,486~~$8,023 and ~~$8,992~~$9,070 for the ~~third~~first quarter of ~~2020~~2021 and ~~2019, respectively, and $23,388 and $26,699 for the nine months ended September 30,~~ 2020, ~~and 2019,~~ respectively. Overdraft fees, the largest component of service charges on deposits, were ~~$4,299~~$3,955 for the three months ended ~~September 30, 2020~~March 31, 2021, as compared to ~~$5,713~~$5,896 for the same period in ~~2019. These fees were $13,935 for the nine months ended September 30, 2020 compared to $17,140 for the same period in 2019.~~2020. Management believes the decrease in the ~~third~~first quarter of ~~2020 and for the first nine months of the year~~2021 relative to the prior ~~periods~~period can be attributed to excess customer liquidity driven by the various government stimulus programs initiated in response to the COVID-19 ~~pandemic as well as an overall decrease in consumer spending as shelter-in-place and similar government restrictions were imposed across the country due to the COVID-19~~ pandemic.

Fees and commissions were ~~$3,402~~$3,900 during the ~~third~~first quarter of ~~2020~~2021 as compared to ~~$3,090~~$3,054 for the same period in ~~2019, and were $9,427 for the first nine months of 2020 as compared to $16,608 for the same period in 2019.~~2020. Fees and commissions include fees related to deposit services, such as ATM fees and interchange fees on debit card transactions. For the ~~third~~first quarter of ~~2020,~~2021, interchange fees were ~~$2,323~~$2,392 as compared to ~~$2,210~~$2,054 for the same period in 2019. Interchange fees were $6,534 for the nine months ended September 30, 2020 as compared to $13,526 for the same period in 2019. Effective July 1, 2019, we became 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 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 which was filed with the SEC on February 27, 2020). The Durbin Amendment limitations reduced interchange fees by approximately $9,000 for the first nine months of 2020 based on the volume and dollar amount of debit card transactions processed during the respective periods.2020.

Through Renasant Insurance, we offer a range of commercial and personal insurance products through major insurance carriers. Income earned on insurance products was ~~$2,681~~$2,237 and ~~$2,508~~$1,991 for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively, and was $6,797 and $6,814 for the nine months ended September 30, 2020 and 2019,~~ respectively. Contingency income is a bonus received from the insurance underwriters and is based both on commission income and claims experience on our clients’ policies during the previous year. Increases and decreases in contingency income are reflective of corresponding increases and decreases in the number of claims paid by insurance carriers. Contingency income, which is included in “Other noninterest income” in the Consolidated Statements of Income, was $8$1,006 and ~~$21~~$892 for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively, and $926 and $807 for the nine months ended September 30, 2020 and 2019,~~ 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 ~~employee~~ benefit plans, as well as accounting and money management for trust accounts. The division manages a number of trust accounts ~~including~~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 ~~equities~~stocks offered through a third party provider. Wealth Management revenue was ~~$4,364~~$4,792 for the ~~third~~first quarter of ~~2020~~2021 compared to ~~$3,588~~$4,002 for the same period in ~~2019 and was $12,190 for the nine months ended September 30, 2020 compared to $10,513 for the same period in 2019.~~2020. The market value of assets under management or administration was ~~$3,890,374~~$4,453,355 and ~~$3,605,350~~$3,628,163 at ~~September 30,~~March 31, 2021 and March 31, 2020, ~~and September 30, 2019,~~ 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 ~~$1,253,742~~$1,143,349 in the ~~third~~first quarter of ~~2020~~2021 compared to ~~$741,904~~$715,760 for the same period in 2019. Mortgage loan originations totaled $3,277,576 in the nine months ended September 30, 2020 compared to $1,680,729 for the same period in 2019. The increase in mortgage loan originations is primarily due to the current interest rate environment.2020.

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While mortgage loan originations remain elevated compared to pre-pandemic levels, margins have compressed as the interest rate environment has begun to rise and housing inventories are below demand. Mortgage banking income ~~specifically~~was $50,733 and $15,535 for the three months ended March 31, 2021 and 2020, respectively. The increase in mortgage ~~servicing~~banking income ~~despite~~is primarily the result of a ~~$828 recovery in the third quarter, was negatively impacted during the first nine months of 2020 by a~~positive mortgage servicing rights valuation adjustment of ~~$13,694, as actual prepayment speeds~~$13,561 during the first three months of 2021 compared to a $9,571 negative valuation adjustment for the ~~mortgages the Company serviced exceeded the Company’s original estimates.~~same period in 2020. The table below presents the components of mortgage banking income included in noninterest income for the periods presented.


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Gain on sales of loans, net	Gain on sales of loans, net	$	45,985	$	14,627	$	114,327	$	35,416	Gain on sales of loans, net	$	33,901	$	21,782
Fees, net	Fees, net	5,367		3,725		13,597		8,363		Fees, net	4,902		2,919
Mortgage servicing (loss) income, net	Mortgage servicing (loss) income, net	(2,466)		490		(3,491)		2,084		Mortgage servicing (loss) income, net	(1,631)		405
MSR valuation adjustment	MSR valuation adjustment	828		(3,132)		(13,694)		(3,132)		MSR valuation adjustment	13,561		(9,571)
Mortgage banking income, net	Mortgage banking income, net	$	49,714	$	15,710	$	110,739	$	42,731	Mortgage banking income, net	$	50,733	$	15,535

Bank-owned life insurance (“BOLI”) income is derived from changes in the cash surrender value of the bank-owned life insurance policies and death benefits received on covered individuals. BOLI income was ~~$1,267~~$2,072 for the three months ended ~~September 30, 2020~~March 31, 2021 as compared to ~~$1,734~~$1,163 for the same period in ~~2019, and $3,759 for~~2020. The increase is primarily due to the $896 of life insurance proceeds received during the first ~~nine~~three months of ~~September 30, 2020 as compared to $4,481 for~~2021. There were no life insurance proceeds received during the ~~same period in 2019.~~three months ended March 31, 2020.

Other noninterest income was ~~$2,014~~$7,923 and ~~$1,988~~$2,755 for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively, and $6,337 and $7,604 for the nine months ended September 30, 2020 and 2019,~~ respectively. Other noninterest income includes income from our SBA banking division and other miscellaneous income and can fluctuate based on production in our SBA banking division and recognition of other ~~nonseasonal~~seasonal income items. During the quarter the Company entered into a referral relationship with a separate firm to originate PPP loans under the latest round of funding. The Company earned $2,310 of PPP referral fees during the three months ended March 31, 2021.

Noninterest Expense

Noninterest Expense to Average Assets
Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
3.10% 2.98% 3.25% 2.91%


Noninterest Expense to Average Assets
Three Months Ended March 31,
2021						2020
3.09%						3.46%

Noninterest expense was ~~$116,510~~$115,935 and ~~$96,500~~$115,041 for the ~~third~~first quarter of ~~2020~~2021 and ~~2019, respectively, and was $349,836 and $278,622 for the nine months ended September 30,~~ 2020, ~~and 2019,~~ respectively.

Salaries and employee benefits increased ~~$9,981~~$5,507 to ~~$75,406~~$78,696 for the ~~third~~first quarter of ~~2020~~2021 as compared to ~~$65,425~~$73,189 for the same period in ~~2019. Salaries and employee benefits increased $44,856 to $227,956 for the nine months ended September 30, 2020 as compared to $183,100 for the same period in 2019.~~2020. The increase in salaries and employee benefits is primarily due to ~~the strategic production hires the Company made throughout its footprint~~incentive expenses recognized during the ~~last nine months~~first quarter of ~~2019 as well as increased mortgage commissions and incentives related to~~2021. This increase was partially offset by cost savings realized by the ~~increased mortgage production~~voluntary early retirement program offered during the ~~third~~fourth quarter ~~and first nine months~~ of 2020. Salaries and employee benefits for the first nine months of 2020 also includes approximately $8,153 in expense related to 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.

Data processing costs increased to ~~$5,259~~$5,451 in the ~~third~~first quarter of ~~2020~~2021 from ~~$4,980~~$5,006 for the same period in ~~2019 and were $15,312 for the nine months ended September 30, 2020 as compared to $14,584 for the same period in 2019.~~2020. The Company continues to examine new and existing contracts to negotiate favorable terms to offset the increased variable cost components of our data processing costs, such as new accounts and increased transaction volume.

Net occupancy and equipment expense for the ~~third~~first quarter of ~~2020~~2021 was ~~$13,296, up~~$12,538, down from ~~$12,943~~$14,120 for the same period in ~~2019. These expenses for the first nine months of 2020 were $40,927, up from $36,322 for the same period in 2019.~~2020. The ~~increase~~decrease in occupancy and equipment expense is primarily attributable to ~~new locations added during~~ the ~~last nine months~~restructuring and nonrenewal of ~~2019.~~certain leases.

Expenses related to other real estate owned for the ~~third~~first quarter of ~~2020~~2021 were ~~$1,033~~$41 as compared to $418 for the same period in ~~2019 and were $2,071 and $1,674, respectively, for the first nine months of 2020 and 2019.~~2020. Expenses on other real estate owned included write downs of the carrying value to fair value on certain pieces of property held in other real estate owned of ~~$1,647~~$70 and ~~$1,121~~$197 for the first ~~nine~~three months of ~~2020~~2021 and ~~2019,~~2020, respectively. For the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ other real estate owned with a cost basis of ~~$6,047~~$1,906 and ~~$5,341,~~$782, respectively, was sold, resulting in a net gain of $56 and a net loss of ~~$27 and $91,~~$12, respectively.

Professional fees include fees for legal and accounting services, such as routine litigation matters, external audit services as well as assistance in complying with newly-enacted and existing banking and governmental ~~regulation.~~regulations. Professional fees were $2,921 for the first quarter of 2021 as compared to $2,641 for the same period in 2020.

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~~$3,197 for the third quarter of 2020 as compared to $2,976 for the same period in 2019 and $8,355 for the nine months ended September 30, 2020 as compared to $7,861 for the same period in 2019.~~

Advertising and public relations expense was ~~$2,240~~$3,252 for the ~~third~~first quarter of ~~2020~~2021 as compared to ~~$3,318~~$3,400 for the same period in 2019, and $8,560 for the nine months ended September 30, 2020 compared to $8,833 for the same period in 2019. The decrease is primarily attributable to a reduction in sponsorship spending, as the COVID-19 pandemic has limited sporting and other public events.2020.

Amortization of intangible assets totaled ~~$1,733~~$1,598 and ~~$1,996~~$1,895 for the ~~third~~first quarter of ~~2020~~2021 and ~~2019, respectively, and $5,462 and $6,159 for the nine months ended September 30,~~ 2020, ~~and 2019,~~ respectively. 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 ~~5 months~~2 to ~~approximately 9~~8 years.

Communication expenses, those expenses incurred for communication to clients and between employees, were ~~$2,319~~$2,292 for the ~~third~~first quarter of ~~2020~~2021 as compared to ~~$2,310~~$2,198 for the same period in ~~2019. Communication expenses were $6,698 for the nine months ended September 30, 2020 as compared to $6,553 for the same period in 2019.~~2020.

Other noninterest expense includes the provision for unfunded commitments, business development and travel expenses, other discretionary expenses, loan fees expense and other miscellaneous fees and operating expenses. Other noninterest expense was ~~$11,999 and $34,377~~$8,854 for the three ~~and nine~~ months ended ~~September 30, 2020, respectively,~~March 31, 2021 as compared to ~~$2,056 and $13,279~~$12,174 for the same ~~periods~~period in ~~2019, respectively.~~2020. The provision for unfunded commitments was ~~$2,700 and $8,700~~$3,400 for the three months ~~and nine months~~ ended ~~September 30, 2020, respectively. No such~~March 31, 2020. There was no provision ~~was included in other noninterest expense~~recorded for unfunded commitments recorded for the same ~~periods~~period in 2019. Also included in noninterest expense for the third quarter and first nine months of 2020 were approximately $678 and $1,577, respectively, in expenses incurred to supply our branches with protective equipment and sanitation supplies (such as floor markings and cautionary signage for branches, face coverings and hand sanitizer) as well as more frequent and rigorous branch cleaning in response to the COVID-19 pandemic.2021.

Efficiency Ratio


		Efficiency Ratio									Efficiency Ratio
		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Efficiency ratio (GAAP)	Efficiency ratio (GAAP)	65.16	%	65.10	%	70.49	%	61.25	%	Efficiency ratio (GAAP)	60.29	%	78.86	%

Adjusted efficiency ratio (Non-GAAP)(1)	Adjusted efficiency ratio (Non-GAAP)(1)	62.63	%	62.53	%	63.89	%	59.47	%	Adjusted efficiency ratio (Non-GAAP)(1)	63.85	%	68.73	%

(1)A reconciliation of this financial measure from GAAP to non-GAAP can be found under the “Non-GAAP Financial Measures” heading at the end of this Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The efficiency ratio is a measure of productivity in the banking industry. (This ratio is a measure of our ability to turn expenses into revenue. That is, the ratio is designed to reflect the percentage of one dollar ~~which~~that we must ~~be expended~~expend to generate a dollar of revenue.) The Company calculates this ratio by dividing noninterest expense by the sum of net interest income on a fully tax equivalent basis and noninterest income. The table above shows the impact on the efficiency ratio of ~~expenses~~items that (1) the Company does not consider to be part of our 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~~items will be incurred or, when incurred, the amount of such ~~expenses,~~items, such as expenses or recoveries incurred in connection with our response to the COVID-19 pandemic, our MSR valuation adjustment and the provision for unfunded commitments. We remain committed to aggressively managing our costs within the framework of our business model. Our goal is to improve the efficiency ratio over time from currently reported levels as a result of revenue growth while at the same time controlling noninterest expenses.

Income Taxes

Income tax expense for the ~~third~~first quarter of 2021 and 2020 was $16,842 and ~~2019 was $7,612 and $11,132,~~$773, respectively. The effective tax rates for those periods were ~~21.58%~~22.59% and ~~22.92%, respectively. Income tax expenses for the nine months ended September 30, 2020 and 2019 were $13,022 and $38,667, respectively. The effective tax rates for those periods were 20.28% and 23.04%~~27.80%, respectively.

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Risk Management

The management of risk is an on-going process. Primary risks that are associated with the Company include credit, interest rate and liquidity risk. Credit risk and interest rate risk are discussed below, while liquidity risk is discussed in the next subsection under the heading “Liquidity and Capital Resources.”

Credit Risk and Allowance for Credit Losses on Loans and Unfunded Commitments

COVID-19 Update. At ~~September 30, 2020,~~March 31, 2021, the Company’s credit quality metrics remained ~~strong.~~stable. 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 as well as a focus on those industries more highly impacted by the pandemic, primarily the hospitality and ~~healthcare~~senior living industries. In addition, to provide necessary relief to the Company’s borrowers – both consumer and commercial clients – the Company established loan deferral programs allowing qualified clients to defer principal and interest payments for up to 90 days. A second 90-day deferral ~~has been made~~was available to borrowers that ~~remain~~remained current on taxes and insurance and also ~~satisfy~~satisfied underwriting standards established by the Company that ~~analyze~~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 ~~operates.~~operated. The Company has discontinued its deferral programs as economic

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conditions in the Company’s markets have improved to the extent that management viewed a broad deferral program as no longer necessary. At March 31, 2021, the Company had 592 loans (not in thousands) on deferral with an aggregate balance of approximately $94,000 or 0.96% 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.

The Company’s credit quality in future quarters may be impacted by both external and internal factors related to the pandemic in addition to those factors that traditionally affect credit quality.External factors outside the Company’s control include items such as the pace at which the COVID-19 vaccine is administered to residents in the Company’s markets and the United States generally, federal, state and local government measures, the re-imposition of “shelter-in-place” orders, and the economic impact of government programs, including additional fiscal stimulus and the ~~impact~~extension of ~~COVID-19.~~the Paycheck Protection Program. Internal factors that ~~could~~will potentially impact credit quality include items such as the performance of the Company’s ~~loan~~loans that remain on deferral, ~~programs,~~ involvement in government offered programs and the related financial impact of these programs. The impact of each of these items are unknown at this time and could materially and adversely impact future credit quality.

Management of Credit Risk. Inherent in any lending activity is credit risk, that is, the risk of loss should a borrower default. Credit risk is monitored and managed on an ongoing basis by a credit administration department, a problem asset resolution committee and the Board of Directors Credit Review Committee. ~~Credit quality,~~Oversight of the Company’s lending operations (including adherence to our policies and procedures governing the loan approval 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 ~~four~~three additional State Certified General Real Estate Appraisers and four 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 problem asset resolution committees and the Board of Directors Credit Review Committee. In addition, we maintain a loan review staff to independently monitor loan quality and lending 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.

For loans with a commercial ~~and commercial real estate secured loans,~~purpose, risk-rating grades are assigned by lending, credit administration and loan review personnel, based on an analysis of the financial and collateral strength and other credit attributes underlying each loan. Loan grades range from 1 to 9, with 1 rated loans having the least credit risk.

Management’s problem asset resolution committee and the Board of Directors’ Credit Review Committee monitor loans that are past due or those that have been downgraded and 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. When the ultimate collectability of a loan’s principal is in doubt, wholly or partially, the loan is placed on nonaccrual.

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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’ Credit Review Committee for charge-off approval. These charge-offs reduce the allowance for credit losses on loans. Charge-offs reflect the realization of losses in the portfolio that were recognized previously through the provision for credit losses on loans.

The Company’s practice is to charge off estimated losses as soon as such losses are identified and reasonably quantified. Net charge-offs for the first ~~nine~~three months of ~~2020~~2021 were ~~$2,898,~~$3,038, or ~~0.04%~~0.11% of average loans (annualized), compared to net charge-offs of ~~$2,312,~~$811, or 0.03% of average loans (annualized), for the same period in ~~2019.~~2020. The charge-offs were fully reserved for in the Company’s allowance for credit losses on loans.

Allowance for Credit Losses on Loans; Provision for Credit Losses on Loans. On January 1, 2020, the Company began calculating the allowance for credit losses under CECL. As of the date of adoption, the Company increased the allowance for credit losses on loans by $42,484 and the reserve for unfunded commitments by $10,389. Management evaluates the adequacy of the allowance on a quarterly basis. The allowance for credit losses is available to absorb credit losses inherent in the loans held for investment portfolio. Loan losses are charged against the allowance for credit

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losses when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management evaluates the adequacy of the allowance on a quarterly basis.

The appropriate level of the allowance is based on an ongoing analysis of the loan portfolio and represents an amount that management deems adequate to provide for inherent losses, including loans evaluated on a collective (pooled) basis and those evaluated on an individual basis as set forth in ~~the~~ ASC 326. The credit loss estimation process involves procedures to appropriately consider the unique characteristics of the Company’s loan portfolio segments. Credit quality is assessed and monitored by evaluating various attributes, and the results of those evaluations are utilized in underwriting new loans and in the Company’s process for the estimation of expected credit losses. Credit quality monitoring procedures and indicators can include an assessment of problem loans, the types of loans, historical loss experience, new lending products, emerging credit trends, changes in the size and character of loan categories, and other factors, including our risk rating system, regulatory guidance and economic conditions, such as the unemployment rate and GDP growth in the ~~markets in which we operate~~national and local economies as well as trends in the market values of underlying collateral securing loans, all as determined based on input from management, loan review staff and other sources. This evaluation is complex and inherently subjective, as it requires estimates by management that are inherently uncertain and therefore susceptible to significant revision as more information becomes available. In future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and provision for credit loss in those future periods.

The methodology for estimating the amount of expected credit losses reported in the allowance for credit losses has two basic components: first, a collective or pooled component for estimated expected credit losses for pools of loans that share similar risk characteristics; and second, an asset-specific component involving individual loans that do not share risk characteristics with other loans and the measurement of expected credit losses for such individual loans.

•The allowance for credit losses for loans that share similar risk characteristics with other loans is calculated on a collective (or pool) basis, where such loans are segregated into loan portfolio segments based upon similarity of credit risk. 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, 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 Commercial, Real Estate - Commercial Mortgage and Lease Financing portfolio segments, the Company uses a probability of default/loss given default model, which calculates an expected loss percentage for each loan pool by considering (a) the probability of default, based on the migration of loans from performing (using risk ratings) to default using life-of-loan analysis periods, and (b) the historical severity of loss, based on the aggregate net lifetime losses incurred per loan pool.

The historical loss rates calculated as described above are adjusted, as necessary, for both internal and external qualitative factors where there are differences in the historical loss data of the Company and current or projected future conditions. Internal factors include loss history, changes in credit quality (including movement between risk ratings) and/or credit concentration and the nature and volume of the respective loan portfolio ~~segments, and changes in lending or loan review staffing.~~segments. External factors include current and reasonable and supportable forecasted economic conditions ~~the competitive environment~~ 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

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forecast can be made, when necessary, the models immediately revert back to the historical loss rates adjusted for qualitative factors related to current conditions.

•For loans that do not share similar risk characteristics with other loans, an individual analysis is performed to determine the expected credit loss. If the respective loan is collateral dependent (that is, when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral), the expected credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral. The fair value of collateral is initially based on external appraisals. Generally, collateral values for loans for which measurement of expected losses is dependent on the fair value of such collateral are updated every twelve months, either from external third parties or in-house certified appraisers. Third-party appraisals are obtained from a pre-approved list of independent, third-party, local appraisal firms. The fair value of the collateral derived from the external appraisal is then adjusted for the estimated cost to sell if repayment or satisfaction of a loan is dependent on the sale (rather than only on the operation) of the collateral. Other acceptable methods for determining the expected credit losses for individually evaluated loans (typically used for loans that are not collateral dependent) is a discounted cash flow approach or, if applicable, an observable market price. Once the expected credit loss amount is determined, an allowance equal to such expected credit loss is included in the allowance for credit losses.

~~For periods prior to January 1, 2020, the Company calculated the allowance for credit losses using the incurred loss methodology.~~

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In addition to its quarterly analysis of the allowance for credit losses, on a regular basis, management and the Board of Directors review loan ratios. These ratios include the allowance for credit losses as a percentage of total loans, net charge-offs as a percentage of average loans, the provision for credit losses as 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 following table presents the allocation of the allowance for credit losses on loans by loan category and the percentage of loans in each category to total loans as of the dates presented:


		September 30, 2020				December 31, 2019			September 30, 2019				March 31, 2021				December 31, 2020				March 31, 2020
		Balance		% of Total			Balance		% of Total		Balance			% of Total			Balance		% of Total			Balance		% of Total		Balance		% of Total
Commercial, financial, agricultural	Commercial, financial, agricultural	$	38,195	23.89	%		$	10,658	14.12	%	$	10,288		14.26	%	Commercial, financial, agricultural	$	37,592	21.04	%		$	39,031	23.20	%	$	25,937	14.58	%
Lease financing	Lease financing	1,832		0.75	%		910		0.84	%	783			0.75	%	Lease financing	1,546		0.70	%		1,624		0.69	%	1,588		0.87	%
Real estate – construction	Real estate – construction	13,819		6.98	%		5,029		8.53	%	5,127			8.77	%	Real estate – construction	14,977		8.94	%		16,047		7.85	%	10,924		8.07	%
Real estate – 1-4 family mortgage	Real estate – 1-4 family mortgage	32,705		24.89	%		9,814		29.59	%	9,849			30.04	%	Real estate – 1-4 family mortgage	31,694		25.13	%		32,165		24.68	%	27,320		29.13	%
Real estate – commercial mortgage	Real estate – commercial mortgage	70,582		41.30	%		24,990		43.80	%	24,039			43.19	%	Real estate – commercial mortgage	76,225		42.57	%		76,127		41.66	%	44,237		44.10	%
Installment loans to individuals	Installment loans to individuals	10,965		2.19	%		761		3.12	%	728			2.99	%	Installment loans to individuals	11,072		1.62	%		11,150		1.92	%	10,179		3.25	%
Total	Total	$	168,098	100.00	%		$	52,162	100.00	%	$	50,814		100.00	%	Total	$	173,106	100.00	%		$	176,144	100.00	%	$	120,185	100.00	%

The provision for credit losses on loans charged to operating expense is an amount which, in the judgment of management, is necessary to maintain the allowance for credit losses on loans at a level that is believed to be adequate to meet the inherent risks of losses in our loan portfolio. The Company did not record a provision for credit losses during the first quarter of 2021, as compared to a provision for credit losses on loans ~~was $23,100 and $1,700~~of $26,350 in the first quarter of 2020. The Company’s allowance for the three months ended September 30, 2020 and 2019, respectively, and $76,350 and $4,100 for the nine months ended September 30, 2020 and 2019, respectively. The significant provision recorded during the quarter and year-to-date period iscredit loss model considers economic projections, primarily ~~driven by~~ the ~~current and future economic uncertainty caused by the COVID-19 pandemic, including the current projections of a continued elevated~~ national unemployment rate ~~throughout 2020~~ and ~~into~~GDP, over a reasonable and supportable period of two years. Based on the continual improvements in these forecasts over the last few quarters, the Company determined that additional provisioning during the first quarter of 2021 ~~and 2022 and forecasted negative to minimal GDP growth compared to the pre-COVID period, and the increased likelihood~~was not necessary.

Table of a more prolonged economic recovery period than previously expected. The Company also factored into its estimate the potential benefit and risk of the government programs implemented through the CARES Act and the internal loan deferral program offered to qualified customers. Contents

The table below reflects the activity in the allowance for credit losses on loans for the periods presented:


	Three Months Ended
	March 31,
		2021			2020
Balance at beginning of period		$	176,144		$	52,162
Impact of the adoption of ASC 326		—			42,484
Charge-offs
Commercial, financial, agricultural		3,498			393
Lease financing		—			—
Real estate – construction		52			—
Real estate – 1-4 family mortgage		101			221
Real estate – commercial mortgage		61			2,047
Installment loans to individuals		1,658			2,688
Total charge-offs		5,370			5,349
Recoveries
Commercial, financial, agricultural		289			190
Lease financing		11			5
Real estate – construction		13			—
Real estate – 1-4 family mortgage		261			88
Real estate – commercial mortgage		171			1,699
Installment loans to individuals		1,587			2,556
Total recoveries		2,332			4,538
Net charge-offs		3,038			811
Provision for credit losses on loans		—			26,350
Balance at end of period		$	173,106		$	120,185
Net charge-offs (annualized) to average loans		0.11		%	0.03		%
Net charge-offs to allowance for credit losses on loans
Allowance for credit losses on loans to:
Total loans		1.62		%	1.23		%
Total loans excluding PPP loans(1)		1.76		%	1.23		%
Nonperforming loans		308.54		%	240.19		%
Nonaccrual loans		322.11		%	296.94		%

(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 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations

The table below reflects annualized net charge-offs to daily average loans outstanding, by loan category, during the periods presented:

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Three Months Ended Nine Months Ended
September 30, September 30,
2020 2019 2020 2019
Balance at beginning of period $ 145,387 $ 50,059 $ 52,162 $ 49,026
Impact of the adoption of ASC 326 — — 42,484 —
Charge-offs
Commercial, financial, agricultural 420 757 1,969 1,709
Lease financing 168 45 168 45
Real estate – construction 136 — 668 —
Real estate – 1-4 family mortgage 720 268 1,083 1,143
Real estate – commercial mortgage 553 677 2,600 1,406
Installment loans to individuals 1,579 3,218 6,003 3,650
Total charge-offs 3,576 4,965 12,491 7,953
Recoveries
Commercial, financial, agricultural 698 761 996 1,376
Lease financing 1 — 11 2
Real estate – construction 31 — 31 7
Real estate – 1-4 family mortgage 152 219 288 531
Real estate – commercial mortgage 711 33 2,451 644
Installment loans to individuals 1,594 3,007 5,816 3,081
Total recoveries 3,187 4,020 9,593 5,641
Net charge-offs 389 945 2,898 2,312
Provision for credit losses on loans 23,100 1,700 76,350 4,100
Balance at end of period $ 168,098 $ 50,814 $ 168,098 $ 50,814
Net charge-offs (annualized) to average loans 0.01 % 0.04 % 0.04 % 0.03 %
Allowance for credit losses on loans to:
Total loans 1.52 % 0.55 %
Total loans excluding PPP loans 1.72 % —
Nonperforming loans 367.05 % 140.31 %


	Three Months Ended
	March 31, 2021					March 31, 2020
	Net Charge-offs		Average Loans		Annualized Net Charge-offs to Average Loans	Net Charge-offs		Average Loans		Annualized Net Charge-offs to Average Loans
Commercial, financial, agricultural	$	3,209	$	2,382,454	0.55%	$	203	$	1,377,156	0.06%
Lease financing	(11)		75,429		(0.06)	(5)		82,709		(0.02)
Real estate – construction	39		921,803		0.02	—		829,211		—
Real estate – 1-4 family mortgage	(160)		2,674,824		(0.02)	133		2,847,187		0.02
Real estate – commercial mortgage	(110)		4,558,003		(0.01)	348		4,236,561		0.03
Installment loans to individuals	71		190,478		0.15	132		314,461		0.17
Total	$	3,038	$	10,802,991	0.11%	$	811	$	9,687,285	0.03%

The following table provides further details of the Company’s net charge-offs (recoveries) of loans secured by real estate for the periods presented:

Three Months Ended Nine Months Ended
September 30, September 30,
2020 2019 2020 2019
Real estate – construction:
Residential $ 105 $ — $ 637 $ (7)
Total real estate – construction 105 — 637 (7)
Real estate – 1-4 family mortgage:
Primary 661 251 921 683
Home equity (29) — (51) 98
Rental/investment (8) (107) 20 46
Land development (56) (95) (95) (215)
Total real estate – 1-4 family mortgage 568 49 795 612
Real estate – commercial mortgage:
Owner-occupied (190) 383 1,224 427
Non-owner occupied 33 263 (1,097) 386
Land development (1) (2) 22 (51)
Total real estate – commercial mortgage (158) 644 149 762
Total net charge-offs of loans secured by real estate $ 515 $ 693 $ 1,581 $ 1,367

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	Three Months Ended
	March 31,
	2021		2020
Real estate – construction:
Residential	$	39	$	—


Total real estate – construction	39		—
Real estate – 1-4 family mortgage:
Primary	(79)		151
Home equity	(93)		(11)
Rental/investment	34		28
Land development	(22)		(35)
Total real estate – 1-4 family mortgage	(160)		133
Real estate – commercial mortgage:
Owner-occupied	(159)		1,443
Non-owner occupied	25		(1,118)
Land development	24		23
Total real estate – commercial mortgage	(110)		348
Total net charge-offs of loans secured by real estate	$	(231)	$	481

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. Just as with the allowance for credit losses, the Company began calculating the reserve for unfunded commitments under CECL, with the impact of CECL adoption on the reserve described in the tables below. 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~~losses on loans methodology described above to unfunded commitments for each loan type. No credit loss estimate is reported for off-balance-sheet credit exposures that are unconditionally cancellable by the Company. A roll-forward of the allowance for credit losses on unfunded commitments is shown in the ~~tables~~table below.



~~Three Months Ended September 30, 2020~~
~~Allowance for credit losses on unfunded loan commitments:~~
~~Beginning balance~~	$	~~17,335~~

~~Provision for credit losses on unfunded loan commitments (included in other noninterest expense)~~	$	~~2,700~~
~~Ending balance~~	$	~~20,035~~

~~Nine Months Ended September 30, 2020~~
~~Allowance for credit losses on unfunded loan commitments:~~
~~Beginning balance~~	$	~~946~~
~~Impact of the adoption of ASC 326~~	~~10,389~~
~~Provision for credit losses on unfunded loan commitments (included in other noninterest expense)~~	~~8,700~~
~~Ending balance~~	$	~~20,035~~

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	Three Months Ended
	March 31,
	2021		2020

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)	—		3,400
Ending balance	$	20,535	$	14,735

Nonperforming Assets. Nonperforming assets consist of nonperforming loans and other real estate owned. Nonperforming loans are those on which the accrual of interest has stopped or loans which are contractually 90 days past due on which interest continues to accrue. Generally, the accrual of interest is discontinued when the full collection of principal or interest is in doubt or when the payment of principal or interest has been contractually 90 days past due, unless the obligation is both well secured and in the process of collection. Management, the problem asset resolution committee and our loan review staff closely monitor loans that are considered to be nonperforming.

Other real estate owned consists of properties acquired through foreclosure or acceptance of a deed in lieu of foreclosure. These properties are carried at the lower of cost or fair market value based on appraised value less estimated selling costs. Losses arising at the time of foreclosure of properties are charged against the allowance for credit losses on loans. Reductions in the carrying value subsequent to acquisition are charged to earnings and are included in “Other real estate owned” in the Consolidated Statements of Income.

The following tables provide details of the Company’s non purchased and purchased nonperforming assets as of the dates presented.

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		Non Purchased		Purchased		Total				Non Purchased		Purchased		Total
September 30, 2020
March 31, 2021									March 31, 2021
Nonaccruing loans	Nonaccruing loans	$	18,831	$	24,821	$	43,652		Nonaccruing loans	$	24,794	$	28,947	$	53,741
Accruing loans past due 90 days or more	Accruing loans past due 90 days or more	1,826		318		2,144			Accruing loans past due 90 days or more	2,235		129		2,364
Total nonperforming loans	Total nonperforming loans	20,657		25,139		45,796			Total nonperforming loans	27,029		29,076		56,105
Other real estate owned	Other real estate owned	3,576		4,577		8,153			Other real estate owned	2,292		3,679		5,971

Total nonperforming assets	Total nonperforming assets	$	24,233	$	29,716	$	53,949		Total nonperforming assets	$	29,321	$	32,755	$	62,076
Nonperforming loans to total loans	Nonperforming loans to total loans					0.41		%	Nonperforming loans to total loans					0.52		%
Nonaccruing loans to total loans									Nonaccruing loans to total loans					0.50		%
Nonperforming assets to total assets	Nonperforming assets to total assets					0.36		%	Nonperforming assets to total assets					0.40		%

December 31, 2019
December 31, 2020									December 31, 2020
Nonaccruing loans	Nonaccruing loans	$	21,509	$	7,038	$	28,547		Nonaccruing loans	$	20,369	$	31,051	$	51,420
Accruing loans past due 90 days or more	Accruing loans past due 90 days or more	3,458		4,317		7,775			Accruing loans past due 90 days or more	3,783		267		4,050
Total nonperforming loans	Total nonperforming loans	24,967		11,355		36,322			Total nonperforming loans	24,152		31,318		55,470
Other real estate owned	Other real estate owned	2,762		5,248		8,010			Other real estate owned	2,045		3,927		5,972

Total nonperforming assets	Total nonperforming assets	$	27,729	$	16,603	$	44,332		Total nonperforming assets	$	26,197	$	35,245	$	61,442
Nonperforming loans to total loans	Nonperforming loans to total loans					0.37		%	Nonperforming loans to total loans					0.51		%
Nonaccruing loans to total loans									Nonaccruing loans to total loans					0.47		%
Nonperforming assets to total assets	Nonperforming assets to total assets					0.33		%	Nonperforming assets to total assets					0.41		%

The level of nonperforming loans increased ~~$9,474~~$635 from December 31, ~~2019~~2020 to ~~September 30, 2020,~~March 31, 2021, while OREO ~~increased $143~~decreased $1 during the same period. ~~The implementation of CECL, which requires purchased credit deteriorated loans to be classified as nonaccrual based on performance, contributed $4,728 to the increase in nonaccruing loans.~~

The following table presents nonperforming loans by loan category as of the dates presented:

September 30,
2020 December 31, 2019 September 30,
2019
Commercial, financial, agricultural $ 17,422 $ 8,458 $ 9,551
Lease financing — 226 404
Real estate – construction:
Residential — — 128
Commercial — — 254
Total real estate – construction — — 382
Real estate – 1-4 family mortgage:
Primary 15,583 14,270 12,119
Home equity 1,949 2,328 2,083
Rental/investment 1,284 1,958 1,454
Land development 395 367 561
Total real estate – 1-4 family mortgage 19,211 18,923 16,217
Real estate – commercial mortgage:
Owner-occupied 6,805 4,526 4,140
Non-owner occupied 1,201 2,459 3,754
Land development 519 1,109 1,192
Total real estate – commercial mortgage 8,525 8,094 9,086
Installment loans to individuals 638 621 575
Total nonperforming loans $ 45,796 $ 36,322 $ 36,215

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	March 31, 2021		December 31, 2020		March 31, 2020
Commercial, financial, agricultural	$	15,992	$	16,668	$	13,615
Lease financing	—		48		277
Real estate – construction:
Residential	—		497		3,012
Commercial	—		—		—
Total real estate – construction	—		497		3,012
Real estate – 1-4 family mortgage:
Primary	16,275		16,317		16,078
Home equity	2,436		2,273		2,819
Rental/investment	1,168		1,526		1,408
Land development	85		345		407
Total real estate – 1-4 family mortgage	19,964		20,461		20,712
Real estate – commercial mortgage:
Owner-occupied	4,923		6,364		9,226
Non-owner occupied	13,998		10,204		1,929
Land development	566		572		673
Total real estate – commercial mortgage	19,487		17,140		11,828
Installment loans to individuals	662		656		593

Total nonperforming loans	$	56,105	$	55,470	$	50,037

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Total nonperforming loans as a percentage of total loans were ~~0.41%~~0.52% as of ~~September 30, 2020~~March 31, 2021 as compared to ~~0.37%~~0.51% as of December 31, ~~2019~~2020 and ~~0.39% as of September 30, 2019.~~March 31, 2020. The Company’s coverage ratio, or its allowance for credit losses on loans as a percentage of nonperforming loans, was ~~367.05%~~308.54% as of ~~September 30, 2020~~March 31, 2021 as compared to ~~143.61%~~317.55% as of December 31, ~~2019~~2020 and ~~140.31%~~240.19% as of ~~September 30, 2019. As discussed above, the adoption of CECL resulted in an increase of $4,728 in nonaccruing loans as of September 30,~~March 31, 2020. ~~Although nonperforming loans have increased as of September 30, 2020, the coverage ratios have increased as a result of the increase in the allowance for credit losses discussed above.~~

Management has evaluated the aforementioned loans and other loans classified as nonperforming and believes that all nonperforming loans have been adequately reserved for in the allowance for credit losses at ~~September 30, 2020.~~March 31, 2021. Management also continually monitors past due loans for potential credit quality deterioration. Total loans 30-89 days past due but still accruing interest were ~~$16,644~~$21,801 at ~~September 30, 2020~~March 31, 2021 as compared to ~~$37,668~~$26,286 at December 31, ~~2019~~2020 and ~~$29,271~~$45,524 at ~~September 30, 2019.~~March 31, 2020.

Although not classified as nonperforming loans, restructured loans are another category of assets that contribute to our credit risk. 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 ~~$20,322~~$20,370 at ~~September 30, 2020~~March 31, 2021 as compared to ~~$11,954~~$20,448 at December 31, ~~2019~~2020 and ~~$13,429~~$11,039 at ~~September 30, 2019.~~March 31, 2020. At ~~September 30, 2020,~~March 31, 2021, loans restructured through interest rate concessions represented 37% of total restructured loans, while loans restructured by a concession in payment terms represented the remainder. The following table provides further details of the Company’s restructured loans in compliance with their modified terms as of the dates presented:


		September 30, 2020		December 31, 2019		September 30, 2019			March 31, 2021		December 31, 2020		March 31, 2020
Commercial, financial, agricultural	Commercial, financial, agricultural	$	2,417	$	523	$	533	Commercial, financial, agricultural	$	2,639	$	2,326	$	1,411

Real estate – 1-4 family mortgage:	Real estate – 1-4 family mortgage:							Real estate – 1-4 family mortgage:
Primary	Primary	8,359		6,987		7,027		Primary	8,363		9,460		6,853
Home equity	Home equity	333		213		379		Home equity	331		332		212
Rental/investment	Rental/investment	724		596		1,832		Rental/investment	427		432		587

Total real estate – 1-4 family mortgage	Total real estate – 1-4 family mortgage	9,416		7,796		9,238		Total real estate – 1-4 family mortgage	9,121		10,224		7,652
Real estate – commercial mortgage:	Real estate – commercial mortgage:							Real estate – commercial mortgage:
Owner-occupied	Owner-occupied	6,854		3,096		3,098		Owner-occupied	6,757		6,838		1,398
Non-owner occupied	Non-owner occupied	1,355		503		519		Non-owner occupied	1,595		797		520
Land development	Land development	186		36		41		Land development	179		183		—
Total real estate – commercial mortgage	Total real estate – commercial mortgage	8,395		3,635		3,658		Total real estate – commercial mortgage	8,531		7,818		1,918
Installment loans to individuals	Installment loans to individuals	94		—		—		Installment loans to individuals	79		80		58
Total restructured loans in compliance with modified terms	Total restructured loans in compliance with modified terms	$	20,322	$	11,954	$	13,429	Total restructured loans in compliance with modified terms	$	20,370	$	20,448	$	11,039

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Changes in the Company’s restructured loans are set forth in the table below:


		2020		2019			2021		2020
Balance at January 1,	Balance at January 1,	$	11,954	$	12,820	Balance at January 1,	$	20,448	$	11,954
Additional advances or loans with concessions	Additional advances or loans with concessions	12,946		3,650		Additional advances or loans with concessions	1,621		1,574
Reclassified as performing restructured loan	Reclassified as performing restructured loan	428		1,866		Reclassified as performing restructured loan	—		58
Reductions due to:	Reductions due to:					Reductions due to:
Reclassified as nonperforming	Reclassified as nonperforming	(2,999)		(1,251)		Reclassified as nonperforming	(1,495)		(2,449)
Paid in full	Paid in full	(1,360)		(786)		Paid in full	—		(34)
Measurement period adjustment on recently acquired loans		—		(2,376)

Charge-offs	Charge-offs	(3)		—		Charge-offs	—		(3)

Paydowns	Paydowns	(644)		(494)		Paydowns	(204)		(61)

Balance at September 30,		$	20,322	$	13,429
Balance at March 31,						Balance at March 31,	$	20,370	$	11,039

In response to the current 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 commercial customers. Any customer current on loan payments, taxes and insurance can qualify for a 90-day deferral of principal and interest payments. A second 90-day deferral has been made available to customers that remained current on taxes and insurance through the first deferral period and also satisfy underwriting standards established by the Company that analyze the ability of the customer to service its loan in accordance with its existing terms in light of the impact of the COVID-19 pandemic on the customer, its industry and the markets in which it operates. 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 September 30, 2020, the Company had 1,269 loans on deferral, or 5.1% of our loan portfolio (excluding PPP loans) by dollar value, down from 5,200 loans on deferral, or 21.5% of our loan portfolio (excluding PPP loans) by dollar value, at June 30, 2020. The aggregate balance of loans on deferral at September 30, 2020 and June 30, 2020 was approximately $497,000 and $2,094,000, respectively. In accordance with the applicable guidance, none of these loans were considered “restructured loans.”

The following table shows the principal amounts of nonperforming and restructured loans as of the dates 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.


		September 30, 2020		December 31, 2019		September 30, 2019			March 31, 2021		December 31, 2020		March 31, 2020
Nonaccruing loans	Nonaccruing loans	$	43,652	$	28,547	$	21,856	Nonaccruing loans	$	53,741	$	51,420	$	40,474
Accruing loans past due 90 days or more	Accruing loans past due 90 days or more	2,144		7,775		14,359		Accruing loans past due 90 days or more	2,364		4,050		9,563
Total nonperforming loans	Total nonperforming loans	45,796		36,322		36,215		Total nonperforming loans	56,105		55,470		50,037
Restructured loans in compliance with modified terms	Restructured loans in compliance with modified terms	20,322		11,954		13,429		Restructured loans in compliance with modified terms	20,370		20,448		11,039
Total nonperforming and restructured loans	Total nonperforming and restructured loans	$	66,118	$	48,276	$	49,644	Total nonperforming and restructured loans	$	76,475	$	75,918	$	61,076

The following table provides details of the Company’s other real estate owned as of the dates presented:


		September 30, 2020		December 31, 2019		September 30, 2019			March 31, 2021		December 31, 2020		March 31, 2020
Residential real estate	Residential real estate	$	1,870	$	1,305	$	1,004	Residential real estate	$	484	$	179	$	1,661
Commercial real estate	Commercial real estate	2,403		3,654		3,957		Commercial real estate	3,109		2,665		3,411
Residential land development	Residential land development	1,669		899		899		Residential land development	341		1,013		959
Commercial land development	Commercial land development	2,211		2,152		2,331		Commercial land development	2,037		2,115		2,640

Total other real estate owned	Total other real estate owned	$	8,153	$	8,010	$	8,191	Total other real estate owned	$	5,971	$	5,972	$	8,671

Changes in the Company’s other real estate owned were as follows:

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		2020		2019			2021		2020
Balance at January 1,	Balance at January 1,	$	8,010	$	11,040	Balance at January 1,	$	5,972	$	8,010

Transfers of loans	Transfers of loans	7,887		3,613		Transfers of loans	2,039		1,640

Impairments	Impairments	(1,647)		(1,121)		Impairments	(70)		(197)
Dispositions	Dispositions	(6,047)		(5,341)		Dispositions	(1,906)		(782)
Other	Other	(50)		—		Other	(64)		—
Balance at September 30,		$	8,153	$	8,191
Balance at March 31,						Balance at March 31,	$	5,971	$	8,671

Other real estate owned with a cost basis of ~~$6,047~~$1,906 was sold during the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, resulting in a net ~~loss~~gain of ~~$27,~~$56, while other real estate owned with a cost basis of ~~$5,341~~$782 was sold during the ~~nine~~three months ended ~~September 30, 2019,~~March 31, 2020, resulting in a net loss of ~~$91.~~$12.

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

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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”) that is authorized by the Board of Directors to monitor our interest rate sensitivity and to make decisions relating to that process. 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, which could impact the results presented in the table below.

Net interest income simulations measure the short and medium-term earnings exposure from changes in market interest rates in a rigorous and explicit fashion. Our current financial position is combined with assumptions regarding future business to calculate net interest income under various hypothetical rate scenarios. EVE measures our long-term earnings exposure from changes in market rates of interest. 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 ~~October~~April 1, ~~2020,~~2021, in each case as compared to the result under rates present in the market on ~~September 30, 2020.~~March 31, 2021. The changes in interest rates assume an instantaneous and parallel shift in the yield curve and do not account for changes in the slope of the yield curve.

Percentage Change In:

Immediate Change in Rates of (in basis points):

Economic Value Equity (EVE)

Earning at Risk (Net Interest Income)

Immediate Change in Rates of (in basis points):

Economic Value Equity (EVE)

Earning at Risk (Net Interest Income)

Static

1-12 Months

13-24 Months

Static

1-12 Months

13-24 Months

+200

18.87%

9.10%

16.19%

+200

17.75%

18.52%

25.83%

+100

10.68%

4.56%

8.44%

+100

9.79%

9.25%

13.19%

The rate shock results for the net interest income simulations for the next twenty-four months produce an asset sensitive position at ~~September 30, 2020~~March 31, 2021 and are all within the parameters set by the Board of Directors. The preceding measures assume no change in the size or asset/liability compositions of the balance sheet, and they do not reflect future actions the ALCO may undertake in response to such changes in interest rates.

The scenarios assume instantaneous movements in interest rates in increments of plus 100 and 200. 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

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mitigate our interest rate risk. The computation of the prospective effects of hypothetical interest rate changes requires numerous assumptions, including asset prepayment speeds, the impact of competitive factors on our pricing of loans and deposits, how responsive our deposit repricing is to the change in market rates and the expected life of non-maturity deposits. These business assumptions are based upon our experience, business plans and published industry experience; however, such assumptions may not necessarily reflect the manner or timing in which cash flows, asset yields and liability costs respond to changes in market rates. Because these assumptions are inherently uncertain, actual results will differ from simulated results.

The Company utilizes derivative financial instruments, including interest rate contracts such as swaps, caps and/or floors, ~~forward commitments, and interest rate lock commitments,~~ as part of its ongoing efforts to mitigate its interest rate risk ~~exposure.~~ 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 March 31, 2021, the Company had notional amounts of $232,095 on interest rate contracts with corporate customers and $232,095 in offsetting interest rate contracts with other financial institutions to mitigate the Company’s rate exposure on its corporate customers’ contracts and certain fixed rate loans.

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Additionally, the Company enters into interest rate lock commitments with its customers to mitigate the interest rate risk associated with the commitments to fund fixed-rate and adjustable rate residential mortgage loans and also enters into forward commitments to sell residential mortgage loans to secondary market investors.

The Company also enters into 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 ~~derivative financial instruments,~~derivatives, see ~~the “Off-Balance Sheet Transactions” section below and~~ Note 10, “Derivative Instruments,” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements.

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 greater than $250,000, are the major source of funds used by the Bank to meet cash flow needs. Maintaining the ability to acquire these funds as needed in a variety of markets is the key to assuring the Bank’s liquidity. 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 approximately ~~28.29%~~14.60% of the carrying value of the total securities portfolio. Securities within our investment portfolio are also used to secure certain deposit types, short-term borrowings and ~~short-term borrowings.~~derivative instruments. At ~~September 30, 2020,~~March 31, 2021, securities with a carrying value of ~~$571,372~~$633,088 were pledged to secure public fund deposits and as collateral for short-term borrowings and derivative instruments as compared to securities with a carrying value of ~~$444,603~~$614,610 similarly pledged at December 31, ~~2019.~~2020.

Other sources available for meeting liquidity needs include federal funds purchased and short-term and long-term advances from the FHLB. Interest is charged at the prevailing market rate on federal funds purchased and FHLB advances. There were no short-term borrowings from the FHLB ~~in the amount of $30,000~~ at ~~September 30, 2020~~ ~~compared to $480,000 at~~March 31, 2021 or December 31, ~~2019.~~2020. Long-term funds obtained from the FHLB are used ~~primarily~~ to match-fund fixed rate loans in order to minimize interest rate risk and also are used to meet day-to-day liquidity needs, particularly when the cost of such borrowing compares favorably to the rates that we would be required to pay to attract deposits. At ~~September 30, 2020,~~March 31, 2021, the balance of our outstanding long-term advances with the FHLB was ~~$152,210~~$152,124 compared to ~~$152,337~~$152,167 at December 31, ~~2019.~~2020. The total amount of the remaining credit available to us from the FHLB at ~~September 30, 2020~~March 31, 2021 was ~~$3,590,752.~~$3,681,061. We also maintain lines of credit with other commercial banks totaling $180,000. These are unsecured lines of credit with the majority maturing at various times within the next twelve months. There were no amounts outstanding under these lines of credit at ~~September 30, 2020~~March 31, 2021 or December 31, ~~2019.~~2020.

In 2016 and 2020, we accessed the capital markets to generate liquidity in the form of subordinated notes. ~~As part of the Metropolitan acquisition, the Company~~In addition, we assumed ~~$15,000 aggregate principal amount of 6.50% fixed-to-floating rate~~ subordinated notes ~~due July 1, 2026.~~in connection with our acquisition of Metropolitan BancGroup, Inc. in 2017. The carrying value of the subordinated notes, net of unamortized debt issuance costs, was ~~$212,223~~$204,597 at ~~September 30, 2020.~~March 31, 2021.

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The following table presents, by type, the Company’s funding sources, which consist of total average deposits and borrowed funds, and the total cost of each funding source for the periods presented:

Percentage of Total Average Deposits and Borrowed Funds Cost of Funds
Nine Months Ended Nine Months Ended
September 30, September 30,
2020 2019 2020 2019
Noninterest-bearing demand 27.03 % 22.96 % — % — %
Interest-bearing demand 42.95 45.25 0.51 0.88
Savings 6.17 6.11 0.11 0.20
Time deposits 16.79 22.43 1.59 1.70
Short-term borrowings 3.85 0.79 1.02 2.76
Long-term Federal Home Loan Bank advances 1.27 0.06 0.80 3.33
Subordinated notes 1.03 1.36 5.54 6.24
Other borrowed funds 0.91 1.04 4.56 4.69
Total deposits and borrowed funds 100.00 % 100.00 % 0.64 % 0.95 %

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	Percentage of Total Average Deposits and Borrowed Funds				Cost of Funds
	Three Months Ended				Three Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Noninterest-bearing demand	30.20	%	23.19	%	—	%	—	%
Interest-bearing demand	46.17		44.29		0.27		0.75
Savings	6.90		6.11		0.08		0.15
Time deposits	12.94		18.98		1.02		1.71
Short-term borrowings	0.10		4.06		0.31		1.44
Long-term Federal Home Loan Bank advances	1.19		1.37		0.05		1.42
Subordinated notes	1.63		1.01		5.15		5.59
Other borrowed funds	0.87		0.99		4.24		4.85
Total deposits and borrowed funds	100.00	%	100.00	%	0.38	%	0.84	%

Our strategy in choosing funds is focused on minimizing cost in the context of our balance sheet composition and interest rate risk position. Accordingly, management targets growth of noninterest-bearing deposits. While we do not control the types of deposit instruments our clients choose, we do influence those choices with the rates and the deposit specials we offer. We constantly monitor our funds position and evaluate the effect that various funding sources have on our financial position.

Cash and cash equivalents were ~~$414,105~~$1,261,916 at ~~September 30, 2020,~~March 31, 2021, as compared to ~~$409,661~~$637,772 at ~~September 30, 2019.~~March 31, 2020. Cash provided by investing activities for the three months ended March 31, 2021 was $29,466, as compared to cash used in investing activities of $130,341 for the ~~nine~~three months ended ~~September 30, 2020 was $1,355,398, as compared to $52,187 for the nine months ended September 30, 2019.~~March 31, 2020. Proceeds from the sale, maturity or call of securities within our investment portfolio were ~~$323,136~~$250,773 for the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, as compared to ~~$405,005~~$76,269 for the same period in ~~2019.~~2020. These proceeds were primarily reinvested into the investment ~~portfolio or used to fund loan growth.~~portfolio. Purchases of investment securities were ~~$304,955~~$465,245 for the first ~~nine~~three months of ~~2020,~~2021, as compared to ~~$366,265~~$123,670 for the same period in ~~2019.~~2020.

Cash provided by financing activities for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 was ~~$1,310,528,~~$656,035, as compared to ~~cash used in financing activities~~$476,183 for the same period in ~~2019 of $137,145.~~2020. Deposits increased ~~$1,721,118~~$677,827 and ~~$158,477~~$199,404 for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively.

Restrictions on Bank Dividends, Loans and Advances

The Company’s liquidity and capital resources, as well as its ability to pay dividends to its shareholders, are substantially dependent on the ability of the Renasant Bank (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 (the “DBCF”). In addition, the FDIC also has the authority to prohibit the Bank from engaging in business practices that the FDIC considers to be unsafe or unsound, which, depending on the financial condition of the bank, could include the payment of dividends. Accordingly, the approval of the DBCF is required prior to the Bank paying dividends to the Company, and under certain circumstances the approval of the FDIC may be required.

In addition to the FDIC and DBCF restrictions on dividends payable by the Bank to the Company, in July 2020 the Federal Reserve provided guidance regarding 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. 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. The Company’s dividends for the third quarter of 2020 did not exceed the Company’s earnings for such quarter.

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Federal Reserve regulations also limit the amount the Bank may loan to the Company unless such loans are collateralized by specific obligations. At ~~September 30, 2020,~~March 31, 2021, the maximum amount available for transfer from the Bank to the Company in the form of loans was ~~$147,040.~~$154,899. The Company maintains a line of credit collateralized by cash with the Bank totaling $3,070. There were no amounts outstanding under this line of credit at ~~September 30, 2020.~~

March 31, 2021.

These restrictions did not have any impact on the Company’s ability to meet its cash obligations in the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, nor does management expect such restrictions to materially impact the Company’s ability to meet its currently-anticipated cash obligations.

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Potential Demands on Liquidity from Off-Balance Sheet ~~Transactions~~Arrangements

The Company enters into loan commitments and standby letters of credit in the normal course of its business. Loan commitments are made to accommodate the financial needs of the Company’s customers. Standby letters of credit commit the Company to make payments on behalf of customers when certain specified future events occur. Both arrangements have credit risk essentially the same as that involved in extending loans to customers and are subject to the Company’s normal credit

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policies, including establishing a provision for credit losses on unfunded commitments. Collateral (e.g., securities, receivables, inventory, equipment, etc.) is obtained based on management’s credit assessment of the customer.

Loan commitments and standby letters of credit do not necessarily represent future cash requirements of the Company in that while the borrower has the ability to draw upon these commitments at any time, these commitments often expire without being drawn upon. The Company’s unfunded loan commitments and standby letters of credit outstanding were as follows as of the dates presented:


		September 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
Loan commitments	Loan commitments	$	2,650,843	$	2,324,262	Loan commitments	$	2,886,616	$	2,749,988
Standby letters of credit	Standby letters of credit	93,103		94,824		Standby letters of credit	92,525		90,597

The Company closely monitors the amount of remaining future commitments to borrowers in light of prevailing economic conditions and adjusts these commitments and the provision related thereto as necessary. The Company will continue this process as new commitments are entered into or existing commitments are renewed. For a more detailed discussion related to the allowance and provision for credit losses on unfunded loan commitments, refer to the “Risk Management” section above.

The Company utilizes derivative financial instruments, including interest rate contracts such as swaps, 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 September 30, 2020, the Company had notional amounts of $272,136 on interest rate contracts with corporate customers and $272,136 in offsetting interest rate contracts with other financial institutions to mitigate the Company’s rate exposure on its corporate customers’ contracts and certain fixed rate loans.

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, all of which are accounted for as cash flow hedges. Under each of these contracts, the Company will pay a fixed rate of interest and will receive a variable rate of interest based on the one-month or three-month LIBOR plus a predetermined spread.

For more information about the Company’s off-balance sheet transactions, see Note 10, “Derivative Instruments,” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements.

Shareholders’ Equity and Regulatory Matters

Total shareholders’ equity of the Company was ~~$2,104,300~~$2,173,701 at ~~September 30, 2020~~March 31, 2021 compared to ~~$2,125,689~~$2,132,733 at December 31, ~~2019.~~2020. Book value per share was ~~$37.45~~$38.61 and ~~$37.39~~$37.95 at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively. The ~~decrease~~growth in shareholders’ equity was attributable to ~~the day one impact of our adoption of CECL, an increased provision for credit losses during the first nine months of 2020 offsetting a portion of our~~ earnings retention offset by changes in ~~2020 while maintaining the quarterly~~accumulated other comprehensive income and dividends ~~and common stock repurchased in the first quarter of 2020.~~declared.

The Company maintains a shelf registration statement with the Securities and Exchange Commission (“SEC”). The shelf registration statement, which was effective upon filing, allows the Company to raise capital from time to time through the sale of common stock, preferred stock, depositary shares, debt securities, rights, warrants and units, or a combination thereof, subject to market conditions. Specific terms and prices will be determined at the time of any offering under a separate prospectus supplement that the Company will file with the SEC at the time of the specific offering. The proceeds of the sale of securities, if and when offered, will be used for general corporate purposes or as otherwise described in the prospectus

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supplement applicable to the offering and could include the expansion of the Company’s banking, insurance and wealth management operations as well as other business opportunities.

On October 20, 2020, the Company’s Board of Directors approved a ~~new~~ stock repurchase program, ~~(the previous program having just expired),~~ authorizing the Company to repurchase up to $50,000 of its outstanding common stock, either in open market purchases or privately-negotiated transactions. The ~~new~~ repurchase program will remain in effect for one year or, if earlier, the repurchase of the entire amount of common stock authorized to be repurchased. The Company ~~currently has no plans to initiate~~did not repurchase any of its common stock ~~repurchases~~ under the ~~new~~ stock ~~purchase plan.~~repurchase plan in the first quarter of 2021.

The Company has junior subordinated debentures with a carrying value of ~~$110,649~~$110,939 at ~~September 30, 2020,~~March 31, 2021, of which ~~$107,058~~$107,348 is 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 at ~~September 30, 2020.~~March 31, 2021. 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 we exceed $15,000,000 in assets, or if we make any 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 ~~$212,223~~$204,597 at ~~September 30, 2020,~~March 31, 2021, of which ~~$212,054~~$212,191 is included in the Company’s Tier 2 capital. ~~As previously discussed in the “Financial Condition” section above, in September 2020, the Company issued $100,000 of its 4.50% fixed-to-floating rate subordinated notes due September 1, 2035.~~

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Capital Tiers

Tier 1 Capital to
Average Assets
(Leverage)

Common Equity Tier 1 to
Risk - Weighted Assets

Tier 1 Capital to
Risk - Weighted
Assets

Total Capital to
Risk - Weighted
Assets

Well capitalized

5% or above

6.5% or above

8% or above

10% or above

Adequately capitalized

4% or above

4.5% or above

6% or above

8% or above

Undercapitalized

Less than 4%

Less than 4.5%

Less than 6%

Less than 8%

Significantly undercapitalized

Less than 3%

Less than 4%

Less than 6%

Critically undercapitalized

Tangible Equity / Total Assets less than 2%

8673

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The following table provides the capital and risk-based capital and leverage ratios for the Company and for Renasant Bank as of the dates presented:


		Actual				Minimum Capital Requirement to be Well Capitalized				Minimum Capital Requirement to be Adequately Capitalized (including the Capital Conservation Buffer)					Actual				Minimum Capital Requirement to be Well Capitalized				Minimum Capital Requirement to be Adequately Capitalized (including the Capital Conservation Buffer)
		Amount		Ratio		Amount		Ratio		Amount		Ratio			Amount		Ratio		Amount		Ratio		Amount		Ratio
September 30, 2020
March 31, 2021														March 31, 2021
Renasant Corporation:	Renasant Corporation:													Renasant Corporation:
Risk-based capital ratios:	Risk-based capital ratios:													Risk-based capital ratios:
Common equity tier 1 capital ratio	Common equity tier 1 capital ratio	$	1,174,260	10.80	%	$	706,678	6.50	%	$	761,037	7.00	%	Common equity tier 1 capital ratio	$	1,245,969	11.05	%	$	732,824	6.50	%	$	789,195	7.00	%
Tier 1 risk-based capital ratio	Tier 1 risk-based capital ratio	1,281,318		11.79	%	869,757		8.00	%	924,117		8.50	%	Tier 1 risk-based capital ratio	1,353,317		12.00	%	901,937		8.00	%	958,308		8.50	%
Total risk-based capital ratio	Total risk-based capital ratio	1,618,837		14.89	%	1,087,196		10.00	%	1,141,556		10.50	%	Total risk-based capital ratio	1,701,667		15.09	%	1,127,421		10.00	%	1,183,792		10.50	%
Leverage capital ratios:	Leverage capital ratios:													Leverage capital ratios:
Tier 1 leverage ratio	Tier 1 leverage ratio	1,281,318		9.17	%	698,723		5.00	%	558,979		4.00	%	Tier 1 leverage ratio	1,353,317		9.49	%	713,071		5.00	%	570,457		4.00	%

Renasant Bank:	Renasant Bank:													Renasant Bank:
Risk-based capital ratios:	Risk-based capital ratios:													Risk-based capital ratios:
Common equity tier 1 capital ratio	Common equity tier 1 capital ratio	$	1,344,938	12.38	%	$	706,155	6.50	%	$	760,474	7.00	%	Common equity tier 1 capital ratio	$	1,412,831	12.52	%	$	733,719	6.50	%	$	790,159	7.00	%
Tier 1 risk-based capital ratio	Tier 1 risk-based capital ratio	1,344,938		12.38	%	869,113		8.00	%	923,433		8.50	%	Tier 1 risk-based capital ratio	1,412,831		12.52	%	903,039		8.00	%	959,479		8.50	%
Total risk-based capital ratio	Total risk-based capital ratio	1,470,402		13.53	%	1,086,392		10.00	%	1,140,711		10.50	%	Total risk-based capital ratio	1,548,990		13.72	%	1,128,799		10.00	%	1,185,238		10.50	%
Leverage capital ratios:	Leverage capital ratios:													Leverage capital ratios:
Tier 1 leverage ratio	Tier 1 leverage ratio	1,344,938		9.64	%	697,927		5.00	%	558,341		4.00	%	Tier 1 leverage ratio	1,412,831		9.91	%	712,621		5.00	%	570,097		4.00	%

December 31, 2019
December 31, 2020														December 31, 2020
Renasant Corporation:	Renasant Corporation:													Renasant Corporation:
Risk-based capital ratios:	Risk-based capital ratios:													Risk-based capital ratios:
Common equity tier 1 capital ratio	Common equity tier 1 capital ratio	$	1,156,828	11.12	%	$	676,106	6.50	%	$	728,114	7.00	%	Common equity tier 1 capital ratio	$	1,199,394	10.93	%	$	713,086	6.50	%	$	767,939	7.00	%
Tier 1 risk-based capital ratio	Tier 1 risk-based capital ratio	1,262,588		12.14	%	832,131		8.00	%	884,139		8.50	%	Tier 1 risk-based capital ratio	1,306,597		11.91	%	877,644		8.00	%	932,497		8.50	%
Total risk-based capital ratio	Total risk-based capital ratio	1,432,949		13.78	%	1,040,163		10.00	%	1,092,171		10.50	%	Total risk-based capital ratio	1,653,694		15.07	%	1,097,055		10.00	%	1,151,908		10.50	%
Leverage capital ratios:	Leverage capital ratios:													Leverage capital ratios:
Tier 1 leverage ratio	Tier 1 leverage ratio	1,262,588		10.37	%	608,668		5.00	%	486,934		4.00	%	Tier 1 leverage ratio	1,306,597		9.37	%	697,579		5.00	%	558,063		4.00	%

Renasant Bank:	Renasant Bank:													Renasant Bank:
Risk-based capital ratios:	Risk-based capital ratios:													Risk-based capital ratios:
Common equity tier 1 capital ratio	Common equity tier 1 capital ratio	$	1,331,809	12.81	%	$	675,581	6.50	%	$	727,548	7.00	%	Common equity tier 1 capital ratio	$	1,369,994	12.49	%	$	712,709	6.50	%	$	767,533	7.00	%
Tier 1 risk-based capital ratio	Tier 1 risk-based capital ratio	1,331,809		12.81	%	831,484		8.00	%	883,452		8.50	%	Tier 1 risk-based capital ratio	1,369,994		12.49	%	877,181		8.00	%	932,004		8.50	%
Total risk-based capital ratio	Total risk-based capital ratio	1,388,553		13.36	%	1,039,355		10.00	%	1,091,323		10.50	%	Total risk-based capital ratio	1,504,985		13.73	%	1,096,476		10.00	%	1,151,299		10.50	%
Leverage capital ratios:	Leverage capital ratios:													Leverage capital ratios:
Tier 1 leverage ratio	Tier 1 leverage ratio	1,331,809		10.95	%	607,907		5.00	%	486,326		4.00	%	Tier 1 leverage ratio	1,369,994		9.83	%	696,738		5.00	%	557,391		4.00	%

~~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.

For more information regarding the capital adequacy guidelines applicable to the Company and Renasant Bank, please refer to Note 15, “Regulatory Matters,” in the Notes to the Consolidated Financial Statements of the Company in Item 1, Financial Statements.

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Non-GAAP Financial Measures

~~This report presents the Company’s efficiency ratio~~In addition to results presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”)~~. Additionally,~~, this ~~report presents~~document contains certain non-GAAP financial measures, namely, an adjusted efficiency ratio ~~which is a non-GAAP financial measure. We calculate~~and the ~~efficiency~~allowance for credit losses on loans to total loans, excluding PPP loans (the “adjusted allowance ratio”). The adjusted allowance ratio ~~by dividing noninterest expense by~~only excludes PPP loans; the ~~sum of net interest income on a fully tax equivalent basis and noninterest income. The~~ adjusted efficiency ratio ~~excludes expenses that (1)~~adjusts GAAP financial measures to exclude the ~~Company does not consider to be part of our core operating activities, such as~~ amortization of ~~intangibles, or (2)~~intangible assets and certain items (such as, when applicable, COVID-19 related expenses, debt prepayment penalties, restructuring charges, swap termination charges, provision for unfunded commitments, gains on sales of securities and asset valuation adjustments) with respect to which the Company ~~incurred in connection with certain transactions where management~~ is unable to accurately predict ~~the timing of~~ when these ~~expenses~~items will be incurred or, when incurred, the amount ~~of such expenses, such as, when applicable,~~thereof. With respect to COVID-19 related expenses ~~merger~~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 ~~conversion related expenses, debt prepayment penalties, asset valuation adjustments and provision for unfunded commitments.~~possess the same characteristics with respect to management’s inability to accurately predict the timing or amount thereof as the other items excluded when calculating non-GAAP financial measures. Management uses the adjusted efficiency ratio when evaluating capital utilization and adequacy, while it uses the adjusted allowance ratio to ~~evaluate ongoing~~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 non-GAAP financial measures facilitate the making of period-to-period comparisons and are meaningful indicators of its operating ~~results~~performance, particularly because these measures are widely used by industry analysts for companies with merger and ~~efficiency~~acquisition activities. Also, because the amortization of intangible assets and items such as restructuring charges and COVID-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 ~~operations.~~results to information provided in other regulatory reports and the results of other companies. The ~~reconciliation~~reconciliations from GAAP to non-GAAP for ~~this~~these financial ~~measure is~~measures are below.


Efficiency Ratio
Adjusted Efficiency Ratio														Adjusted Efficiency Ratio
		Three months ended September 30,						Nine months ended September 30,							Three months ended March 31,
		2020			2019			2020			2019					2021			2020
Interest income (fully tax equivalent basis)	Interest income (fully tax equivalent basis)	$	123,677		$	135,927		$	381,195		$	413,790		Interest income (fully tax equivalent basis)		$	123,378		$	131,887
Interest expense	Interest expense	15,792			25,651			57,536			74,660			Interest expense		12,114			23,571
Net interest income (fully tax equivalent basis)	Net interest income (fully tax equivalent basis)	107,885			110,276			323,659			339,130			Net interest income (fully tax equivalent basis)		111,264			108,316

Total noninterest income	Total noninterest income	70,928			37,953			172,668			115,798			Total noninterest income		81,037			37,570
Net gains (losses) on sales of securities		—			343			31			348
Net gains on sales of securities														Net gains on sales of securities		1,357			—
MSR valuation adjustment	MSR valuation adjustment	828			(3,132)			(13,694)			(3,132)			MSR valuation adjustment		13,561			(9,571)
Adjusted noninterest income	Adjusted noninterest income	70,100			40,742			186,331			118,582			Adjusted noninterest income		66,119			47,141

Total noninterest expense	Total noninterest expense	116,510			96,500			349,836			278,622			Total noninterest expense		115,935			115,041
Intangible amortization	Intangible amortization	1,733			1,996			5,462			6,159			Intangible amortization		1,598			1,895
Merger and conversion related expenses		—			24			—			203
Extinguishment of debt		28			54			118			54

Restructuring charges														Restructuring charges		292			—
COVID-19 related expenses	COVID-19 related expenses	570			—			9,730			—			COVID-19 related expenses		785			2,903
Provision for unfunded commitments	Provision for unfunded commitments	2,700			—			8,700			—			Provision for unfunded commitments		—			3,400
Adjusted noninterest expense	Adjusted noninterest expense	111,479			94,426			325,826			272,206			Adjusted noninterest expense		113,260			106,843

Efficiency Ratio (GAAP)	Efficiency Ratio (GAAP)	65.16		%	65.10		%	70.49		%	61.25		%	Efficiency Ratio (GAAP)		60.29		%	78.86		%
Adjusted Efficiency Ratio (non-GAAP)	Adjusted Efficiency Ratio (non-GAAP)	62.63		%	62.53		%	63.89		%	59.47		%	Adjusted Efficiency Ratio (non-GAAP)		63.85		%	68.73		%

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Allowance for Credit Losses on Loans to Total Loans, excluding PPP Loans
	March 31, 2021			December 31, 2020
Total loans (GAAP)	$	10,688,408		$	10,933,647
Less PPP loans	860,864			1,128,703
Adjusted total loans (non-GAAP)	$	9,827,544		$	9,804,944

Allowance for Credit Losses on Loans	$	173,106		$	176,144
ACL/Total loans (GAAP)	1.62		%	1.61		%
ACL/Total loans excluding PPP loans (non-GAAP)	1.76		%	1.80		%

The presentation of ~~this~~these non-GAAP financial ~~measure~~measures is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with GAAP. Readers of this Form 10-Q should note that, because there are no standard definitions for the calculations as well as the results, the Company’s calculations may not be comparable to a similarly-titled measure presented by other companies. Also, there may be limits in the usefulness of this measure 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 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our market risk since December 31, ~~2019.~~2020. For additional information regarding our market risk, see our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

Item 4. CONTROLS AND PROCEDURES

Based on their evaluation as of the end of the period covered by this quarterly report on Form 10-Q, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules

~~Table of Contents~~

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’s management, including its Principal Executive and Principal Financial Officers, as appropriate to allow timely decisions regarding required disclosure. There were no changes in the Company’s internal control over financial reporting during the fiscal quarter covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II. OTHER INFORMATION

Item 1A. RISK FACTORS

When evaluating the risk of an investment in the Company’s common stock, potential investors should carefully consider the risk factors appearing in Part I, Item 1A, Risk Factors, of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019. Except as set forth below, there~~2020. There have been no material changes from the risk factors set forth in our Annual Report on Form 10-K.

~~The ongoing COVID-19 pandemic and measures intended to arrest the virus’s spread have adversely affected, and are expected to continue to adversely affect, the Company.~~

The spread of the COVID-19 virus has created a global public health crisis that has resulted in unprecedented uncertainty, volatility and disruption in financial markets and in governmental, commercial and consumer activity in the United States and globally. In an effort to prevent the further spread of the virus, federal and state governments, including state and local governments in the markets in which we operate, have imposed various levels of restrictions on all businesses and the activities of individuals outside their residences, ranging from the required closure of “non-essential” businesses and restrictions on the number of customers that a business may allow inside its premises to orders mandating that all individuals wear protective face coverings and observe social distancing in all instances. In addition, most businesses, including the Company, have taken steps to protect the health and well-being of their customers and employees and to promote efforts to limit the transmission of the disease, and these steps, to varying degrees, have limited (if not entirely halted) the normal operations of these businesses. These actions (including those that remain in place and those that have lapsed as of the date hereof) by federal and state governments, businesses and individuals have had, and continue to have, a severe negative impact on the global and United States economies as well as the local economies across our footprint. Although these negative impacts lessened to some extent during the third quarter of 2020, as compared to conditions prior to the onset of the COVID-19 pandemic, both the United States economy and the Company's markets in particular continue to experience a significant decrease in commercial and consumer activity and changes in the manner of conducting permitted activities, a decrease in the demand for the Company’s services and products, elevated levels of unemployment, disrupted U.S. and global supply chains, increased volatility as well as other disruptions in the financial markets, and credit deterioration and defaults in many industries. The markets in which we operate have been significantly and adversely affected by the pandemic, which may in turn have a material and adverse effect on our business, financial condition, results of operations, liquidity, asset quality, capital, cash flows and prospects. Furthermore, additional measures taken in the future to address the pandemic by government, businesses in general and the Company, especially in light of rapid increases in positive COVID-19 diagnoses since October 2020, may exacerbate the economic impact of the pandemic on us, especially if the current level of restrictions on business activity fails to arrest the ongoing spread of the COVID-19 virus.

Federal and state governments have taken unprecedented actions to assist businesses and individuals impacted by the COVID-19 virus and to stabilize the financial markets and otherwise limit the impact of the pandemic on the economy as a whole, and additional legislation and other actions are currently being contemplated. The Company has itself implemented measures to assist its qualified commercial and consumer clients, including allowing principal and interest payments on loans to be deferred for a period of up to three months (with qualifying customers having the ability to defer for a second three-month period). It is unclear at this time how successful, if at all, these past, present and future governmental actions as well as the Company’s own efforts will be in supporting businesses and individuals, the markets and the broader economy over the long term and generally ameliorating the impact of the COVID-19 virus on the United States as a whole and the particular markets in which we operate. In the meantime, these governmental actions, along with the steps the Company has taken, may have a material adverse effect on our business, financial condition, results of operations, liquidity, asset quality, capital, cash flows and prospects. In addition, the Company faces an increased risk of litigation and governmental and regulatory scrutiny as a result of the effects of the pandemic on market and economic conditions and actions governmental authorities take in response to those conditions.

~~The extent to which the pandemic impacts our~~ ~~business, financial condition, results of operations, liquidity, asset quality, capital, cash flows and prospects~~ ~~ultimately depends on~~ the duration of the pandemic, the effectiveness of the measures implemented and to be implemented by governments and businesses, including the Company, to address it and the time it will take the global, national and local economies to recover to their pre-pandemic levels once they reopen, all of which are ~~highly uncertain and cannot be predicted at this time. Further, there can be no assurance that any of these efforts will be effective.~~ In the meantime, until the effects of the pandemic subside, we expect continued draws on lines of credit, reduced revenues in our business, and increased customer defaults. As described above in the “Risk Management” section in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this Form 10-Q, the Company significantly increased its allowance for credit losses in the first nine months of 2020, and the impact of the pandemic may result in further increases to our allowance for credit losses. Even after the pandemic has subsided, we may continue to experience adverse impacts to our business, financial condition, results of operations, liquidity, asset quality, capital, cash flows and prospects, which could be material, as a result of the economic impact and any recession that has occurred or may occur in the future.

~~Table of Contents~~

The COVID-19 virus has also resulted in heightened operational risks. A significant portion of our workforce is currently working remotely, and increased levels of remote access create additional cybersecurity risk and opportunities for cybercriminals to exploit vulnerabilities. Cybercriminals may increase their attempts to compromise business emails, including an increase in phishing attempts, and fraudulent vendors or other parties may view the pandemic as an opportunity to prey upon consumers and businesses during this time. This could result in increased fraud losses to us or our customers. The increase in online and remote banking activities may also increase the risk of fraud in certain instances. In addition, state and local orders and regulations limiting the conduct of in-person business operations may impact our ability to operate at normal levels and to restore operations to their pre-pandemic level for an unknown period of time. Separately, our third-party service providers have also been impacted by the pandemic, and we have experienced some disruption to certain services performed by vendors. To date, these disruptions have not been material and we have developed solutions to work around these disruptions, but we may experience additional disruption in the future, which could adversely impact our business.

Finally, our Annual Report on Form 10-K for the year ended December 31, 2019 lists numerous risk factors relating to the Company in particular as well as the financial services industry and public companies in general. These risk factors can be found in Item 1A, “Risk Factors,” of such Annual Report. The impact of the COVID-19 virus may also have the effect of exacerbating the adverse impact of these other risk factors on our business, financial condition, results of operations, liquidity, asset quality, capital, cash flows and prospects.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

None.

Issuer Purchases of Equity Securities

During the three month period ended ~~September 30, 2020,~~March 31, 2021, the Company repurchased shares of its common stock as indicated in the following table:

Total Number of Shares Purchased(1)
Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs(2)
July 1, 2020 to July 31, 2020 158 $ 23.75 — $ 5,464
August 1, 2020 to August 31, 2020 106 23.53 — 5,464
September 1, 2020 to September 30, 2020 4,752 25.35 — 5,464
Total 5,016 $ 25.27 —


	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Share Repurchase Plans	Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under Share Repurchase Plans(2)
January 1, 2021 to January 31, 2021	13,024	$	33.68	—	$	50,000
February 1, 2021 to February 28, 2021	1,253	39.60		—	50,000
March 1, 2021 to March 31, 2021	39,344	44.35		—	50,000
Total	53,621	$	41.65	—

(1)Share amounts in this column represent shares of Renasant Corporation stock withheld to satisfy federal and state tax liabilities related to the exercise of stock options and the vesting of time-based restricted stock awards.

The Company announced a $50.0 million stock repurchase program in October 2019, under which the Company was authorized to repurchase outstanding shares of its common stock either in open market purchases or privately-negotiated transactions. The Company suspended stock repurchases under this program in March 2020, and accordingly no shares were repurchased during the third quarter of 2020. The program expired in October 2020. The Company announced a new $50.0 million stock repurchase program on October 20, 2020 which will remain in effect for one year or, if earlier, the repurchase of the entire amount of common stock authorized to be repurchased. ~~The Company currently has no plans to initiate stock repurchases under the new stock purchase plan.~~

~~For the three months ended September 30, 2020, share amounts in this column represent~~No shares ~~of Renasant Corporation common stock withheld to satisfy federal and state tax liabilities related to the vesting of time-based restricted stock awards~~were repurchased during the ~~period.~~first quarter of 2021 under this plan.

(2)Dollars in thousands

Please refer to the information discussing restrictions on the Company’s ability to pay dividends under the heading “Liquidity and Capital Resources” in Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this report, which is incorporated by reference herein.

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Item 6. EXHIBITS


Exhibit Number						Description

(3)(i)						Articles of Incorporation of Renasant Corporation, as amended (1)

(3)(ii)						Amended and Restated Bylaws of Renasant Corporation (2)

~~(4)(i)~~						~~Subordinated Indenture dated August 22, 2016 between Renasant Corporation and Wilmington Trust, National Association, as Trustee~~ (3)

~~(4)(ii)~~						~~Third Supplemental Indenture dated August 31, 2020 between Renasant Corporation and Wilmington Trust, National Association, as Trustee (4)~~

~~(4)~~(iii)						~~Form~~A rticles of ~~4.50% Fixed-to-Floating Rate Subordinated Note due 2035 (included in exhibit 4(ii))~~Amendment to the Amended and Re stated Byl aws of Renasant Corporation (3)

(10)(i)						Amendment No. 3 to Executive Employment Agreement effective ~~dated July~~April 27, ~~2020,~~20 21 , by and between Renasant Corporation and ~~James C. Mabry, IV (~~5 )E. Robinson McGraw

(31)(i)						Certification of the Principal Executive Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(31)(ii)						Certification of the Principal Financial Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(32)(i)						Certification of the Principal Executive Officer, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(32)(ii)						Certification of the Principal Financial Officer, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(101)						The following materials from Renasant Corporation’s Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2020~~March 31, 2021 were formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Shareholders’ Equity, ~~and~~ (v) Consolidated Statements of Cash Flows and ~~(v)~~(vi) Notes to Consolidated Financial Statements (Unaudited).

(104)						The cover page of Renasant Corporation’s Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2020,~~March 31, 2021, formatted in Inline XBRL (included in Exhibit 101).

(1)Filed as exhibit 3.1 to the Form 10-Q of the Company filed with the Securities and Exchange Commission (~~the~~(the “Commission”)on May 10, 2016 and incorporated herein by reference.

(2)Filed as exhibit 3(ii) to the Form 8-K of the Company filed with the Commission on July 20, 2018 and incorporated herein by reference.

(3)Filed as exhibit ~~4.1~~3(ii) to the Form 8-K of the Company filed with the Commission on ~~August 22, 2016 and incorporated herein by reference.~~

~~(4)Filed as exhibit 4.2 to the Form 8-K of the Company filed with the Commission on September 3, 2020 and incorporated herein by reference.~~

~~(5)Filed as exhibit 10.1 to the Form 8-K of the Company filed with the Commission on July 31, 2020~~April 30, 2021 and incorporated herein by reference.

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.

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SIGNATURES

Pursuant to the requirements 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
		(Registrant)

Date:	~~November 9, 2020~~May 7, 2021	/s/ C. Mitchell Waycaster
		C. Mitchell Waycaster
		President and
		Chief Executive Officer
		(Principal Executive Officer)

Date:	~~November 9, 2020~~May 7, 2021	/s/ James C. Mabry IV
		James C. Mabry IV
		Executive Vice President and
		Chief Financial Officer
		(Principal Financial Officer)

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		Page
PART I	Financial Information
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets	1
	Consolidated Statements of Income	2
	Consolidated Statements of Comprehensive Income	43
	Consolidated Statements of Changes in Shareholders’ Equity	54
	Consolidated Statements of Cash Flows	75
	Notes to Consolidated Financial Statements	96

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5848

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	8876

Item 4.	Controls and Procedures	8876

PART II	Other Information


Item 1A.	Risk Factors	9077

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	9177

Item 6.	Exhibits	9278

SIGNATURES		9379


	December 31, 2019 (as reported)		Impact of ASU 2016-13 Adoption		January 1, 2020 (adjusted)
Assets:
Allowance for credit losses	$	(52,162)	$	(42,484)	$	(94,646)
Deferred tax assets, net	$	27,282	$	12,305	$	39,587
Remaining purchase discount on loans	$	(50,958)	$	5,469	$	(45,489)
Liabilities:
Reserve for unfunded commitments	$	946	$	10,389	$	11,335
Shareholders’ equity:
Retained earnings	$	617,355	$	(35,099)	$	582,256


	Number of Loans	Recorded Investment
Totals at January 1, 2020	46	$	4,679
Additional advances or loans with concessions	34	7,787
Reclassified as performing restructured loan	3	354
Reductions due to:
Reclassified as nonperforming	(2)	(510)
Paid in full	(4)	(938)


Principal paydowns	0	(200)

Totals at September 30, 2020	77	$	11,172


	Performing		Non- Performing		Total








December 31, 2019
Commercial, financial, agricultural	$	247,575	$	1,316	$	248,891
Lease financing	81,649		226		81,875
Real estate – construction	66,241		0		66,241
Real estate – 1-4 family mortgage	1,992,331		11,288		2,003,619
Real estate – commercial mortgage	330,714		1,955		332,669
Installment loans to individuals	199,549		288		199,837
Total	$	2,918,059	$	15,073	$	2,933,132


	Unpaid Contractual Principal Balance		Recorded Investment With Allowance		Recorded Investment With No Allowance		Total Recorded Investment		Related Allowance








December 31, 2019
Commercial, financial, agricultural	$	6,623	$	5,722	$	0	$	5,722	$	1,222
Lease financing	226		226		0		226		3
Real estate – construction	9,145		0		9,145		9,145		0
Real estate – 1-4 family mortgage	14,018		13,689		0		13,689		143
Real estate – commercial mortgage	11,067		7,361		1,080		8,441		390
Installment loans to individuals	91		84		0		84		1
Totals	$	41,170	$	27,082	$	10,225	$	37,307	$	1,759


		Fair Value
	Balance Sheet Location	September 30, 2020		December 31, 2019
Derivative assets:
Designated as hedging instruments:


Interest rate swap	Other Assets	$	468	$	0
Totals		$	468	$	0
Not designated as hedging instruments:
Interest rate contracts	Other Assets	$	11,566	$	3,880
Interest rate lock commitments	Other Assets	28,185		4,579
Forward commitments	Other Assets	59		39
Totals		$	39,810	$	8,498
Derivative liabilities:
Designated as hedging instruments:
Interest rate swaps	Other Liabilities	$	9,004	$	5,021
Totals		$	9,004	$	5,021
Not designated as hedging instruments:
Interest rate contracts	Other Liabilities	$	11,566	$	3,880
Interest rate lock commitments	Other Liabilities	0		3
Forward commitments	Other Liabilities	2,511		1,096
Totals		$	14,077	$	4,979


			Fair Value
As of September 30, 2020	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	414,105	$	414,105	$	0	$	0	$	414,105

Securities available for sale	1,293,388		0		1,284,896		8,492		1,293,388
Loans held for sale	399,773		0		399,773		0		399,773
Loans, net	10,916,640		0		0		10,847,520		10,847,520
Mortgage servicing rights	57,600		0		0		57,600		57,600
Derivative instruments	40,278		0		40,278		0		40,278
Financial liabilities
Deposits	$	11,934,140	$	10,100,060	$	1,852,653	$	0	$	11,952,713
Short-term borrowings	42,624		42,624		0		0		42,624

Federal Home Loan Bank advances	152,210		0		158,952		0		158,952
Junior subordinated debentures	110,649		0		89,591		0		89,591
Subordinated notes	212,223		0		212,550		0		212,550
Derivative instruments	23,081		0		23,081		0		23,081