RENASANT CORP

Previous wording

Important factors currently known to management that could cause our actual results to differ materially from those in forward-looking statements include the following: (i) the Company’s ability to efficiently integrate acquisitions (including its recently-announced acquisition of The First Bancshares, Inc. described under the “Recent Developments” heading below) into its operations, retain the customers of these businesses, grow the acquired operations and realize the cost savings expected from an acquisition to the extent and in the timeframe anticipated by management (including the possibility that such cost savings will not be realized when expected, or at all, as a result of the impact of, or challenges arising from, the integration of the acquired assets and assumed liabilities into the Company, potential adverse reactions or changes to business or employee relationships, or as a result of other unexpected factors or events); (ii) potential exposure to unknown or contingent risks and liabilities we have acquired, or may acquire, or target for acquisition, including in connection with the proposed merger with The First Bancshares, Inc.; (iii) the effect of economic conditions and interest rates on a national, regional or international basis; (iv) timing and success of the implementation of changes in operations to achieve enhanced earnings or effect cost savings; (v) competitive pressures in the consumer finance, commercial finance, financial services, asset management, retail banking, factoring, mortgage lending and auto lending industries; (vi) the financial resources of, and products available from, competitors; (vii) changes in laws and regulations as well as changes in accounting standards; (viii) changes in policy by regulatory agencies or increased scrutiny by, and/or additional regulatory requirements of, regulatory agencies as a result of our proposed merger with The First Bancshares, Inc.; (ix) changes in the securities and foreign exchange markets; (x) the Company’s potential growth, including its entrance or expansion into new markets, and the need for sufficient capital to support that growth; (xi) 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 or issuers of investment securities, or the impact of interest rates on the value of our investment securities portfolio; (xii) an insufficient allowance for credit losses as a result of inaccurate assumptions; (xiii) changes in the sources and costs of the capital we use to make loans and otherwise fund our operations, due to deposit outflows, changes in the mix of deposits and the cost and availability of borrowings; (xiv) general economic, market or business conditions, including the impact of inflation; (xv) changes in demand for loan and deposit products and other financial services; (xvi) concentrations of credit or deposit exposure; (xvii)…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Important factors currently known to management that could cause our actual results to differ materially from those in forward-looking statements include the following: (i) the Company’s ability to efficiently integrate acquisitions (including its recently-completed merger with The First Bancshares, Inc. described under the “Recent Developments” heading below) into its operations, retain the customers of these businesses, grow the acquired operations and realize the cost savings expected from an acquisition to the extent and in the timeframe anticipated by management (including the possibility that such cost savings will not be realized when expected, or at all, as a result of the impact of, or challenges arising from, the integration of the acquired assets and assumed liabilities into the Company, potential adverse reactions or changes to business or employee relationships, or as a result of other unexpected factors or events); (ii) potential exposure to unknown or contingent risks and liabilities we have acquired, or may acquire, or target for acquisition, including in connection with the merger with The First Bancshares, Inc.; (iii) the effect of economic conditions and interest rates on a national, regional or international basis; (iv) timing and success of the implementation of changes in operations to achieve enhanced earnings or effect cost savings; (v) competitive pressures in the consumer finance, commercial finance, financial services, asset management, retail banking, factoring, mortgage lending and auto lending industries; (vi) the financial resources of, and products available from, competitors; (vii) changes in laws and regulations as well as changes in accounting standards; (viii) changes in governmental and regulatory policy, whether applicable specifically to financial institutions or impacting the United States generally (such as, for example, changes in trade policy); (ix) increased scrutiny by, and/or additional regulatory requirements of, regulatory agencies as a result of the Company’s merger with The First; (x) changes in the securities and foreign exchange markets; (xi) the Company’s potential growth, including its entrance or expansion into new markets, and the need for sufficient capital to support that growth; (xii) changes in the quality or composition of the Company’s loan or investment securities portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers or issuers of investment securities, or the impact of interest rates on the value of our investment securities portfolio; (xiii) an insufficient allowance for credit losses as a result of inaccurate assumptions; (xiv) changes in the sources and costs of the capital we use to make loans and otherwise fund our operations, due to deposit outflows, changes in the mix of deposits and the cost and availability of borrowings; (xv) general economic, market or business conditions, including the impact of inflation; (x…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

On July 29, 2024, the Company and The First Bancshares, Inc., a Mississippi corporation (“The First”), entered into an agreement and plan of merger, dated as of July 29, 2024 (the “Merger Agreement”), pursuant to which, subject to the terms and conditions set forth therein, among other things, The First will merge with and into the Company, with the Company as the surviving entity in such merger (the “Merger”). Immediately following the Merger, The First’s subsidiary bank and Renasant Bank will enter into a subsidiary plan of merger, pursuant to which The First’s subsidiary bank will merge with and into Renasant Bank immediately after the Merger, with Renasant Bank as the surviving entity in such merger. Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each outstanding share of common stock of The First will be converted into the right to receive one share of common stock of the Company.

Current wording

On April 1, 2025, the Company completed its merger with The First Bancshares, Inc., a Mississippi corporation (“The First”), pursuant to the agreement and plan of merger between the Company and The First dated July 29, 2024 (the “Merger Agreement”). As provided in the Merger Agreement, subject to the terms and conditions set forth therein, on April 1, 2025, among other things, The First merged with and into the Company, with the Company as the surviving entity (the “Merger”). The First’s subsidiary bank and Renasant Bank entered into a subsidiary plan of merger, pursuant to which The First’s subsidiary bank merged with and into Renasant Bank immediately after the Merger, with Renasant Bank as the surviving entity. Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each outstanding share of common stock of The First converted into the right to receive one share of common stock of the Company.

Previous wording

The Company purchased $60,656 and $9,646 in investment securities during the nine months ended September 30, 2024 and 2023, respectively.

Current wording

The Company purchased $175,815 and $46,975 in investment securities during the three months ended March 31, 2025 and 2024, respectively.

Previous wording

Proceeds from maturities, calls and principal payments on securities during the first nine months of 2024 totaled $142,480. During the first quarter of 2024, the Company sold from the available for sale portfolio municipal securities, residential mortgage backed securities and commercial mortgage backed securities for net proceeds of $177,185. The Company intended to sell these securities as of December 31, 2023; therefore, the Company impaired the securities and recognized the loss in net income as of December 31, 2023. The carrying value of the securities immediately prior to the impairment was $196,537, and the impairment charge was $19,352. No loss was recorded in the first nine months of 2024. Proceeds from the maturities, calls and principal payments on securities during the first nine months of 2023 totaled $208,095. The Company sold from the available for sale portfolio agency securities, municipal securities, residential mortgage backed securities and commercial mortgage backed securities with a carrying value of $511,419 at the time of sale for net proceeds of $488,981, resulting in a net loss on sale of $22,438 during the nine months ended September 30, 2023. The Company did not sell any securities during the third quarter of 2024 or 2023.

Current wording

Proceeds from maturities, calls and principal payments on securities during the first three months of 2025 totaled $56,789. No securities were sold during the first quarter of 2025. Proceeds from the maturities, calls and principal payments on securities during the first three months of 2024 totaled $46,307. During the first quarter of 2024, the Company sold from the available for sale portfolio municipal securities, residential mortgage backed securities and commercial mortgage backed securities for net proceeds of $177,185. The Company intended to sell these securities as of December 31, 2023; therefore, the Company impaired the securities and recognized the loss in net income as of December 31, 2023. The carrying value of the securities immediately prior to the impairment was $196,537, and the impairment charge was $19,352. No loss was recorded in the first three months of 2024.

Previous wording

During the third quarter of 2022, the Company transferred, at fair value, $882,927 of securities from the available for sale portfolio to the held to maturity portfolio as the Company has the intent and ability to hold these securities until their maturity. The related net unrealized losses of $99,675 (after tax losses of $74,307) remained in accumulated other comprehensive income (loss) and will be amortized over the remaining life of the securities, offsetting the related amortization of discount on the transferred securities. At September 30, 2024, the net unrealized after tax losses remaining to be amortized in accumulated other comprehensive income (loss) was $51,332. No gains or losses were recognized at the time of transfer.

Current wording

During the third quarter of 2022, the Company transferred, at fair value, $882,927 of securities from the available for sale portfolio to the held to maturity portfolio as the Company has the intent and ability to hold these securities until their maturity. The related net unrealized losses of $99,675 (after tax losses of $74,307) remained in accumulated other comprehensive income (loss) and will be amortized over the remaining life of the securities, offsetting the related amortization of discount on the transferred securities. At March 31, 2025, the net unrealized after tax losses remaining to be amortized in accumulated other comprehensive income (loss) was $46,781. No gains or losses were recognized at the time of transfer.

Previous wording

Loans held for sale, which consist of residential mortgage loans being held until they are sold in the secondary market, were $291,735 at September 30, 2024, as compared to $179,756 at December 31, 2023. Mortgage loans to be sold are sold either on a “best efforts” basis or under a mandatory delivery sales agreement. Under a “best efforts” sales agreement, residential real estate originations are locked in at a contractual rate with third party private investors or directly with government sponsored agencies, and the Company is obligated to sell the mortgages to such investors only if the mortgages are closed and funded. The risk we assume is conditioned upon loan underwriting and market conditions in the national mortgage market. Under a mandatory delivery sales agreement, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price and delivery date. Penalties are paid to the investor if we fail to satisfy the contract. Gains and losses are realized at the time consideration is received and all other criteria for sales treatment have been met. Our standard practice is to sell the loans within 30-40 days after the loan is funded. Although loan fees and some interest income are derived from mortgage loans held for sale, the main source of income is gains from the sale of these loans in the secondary market.

Current wording

Loans held for sale, which consist of residential mortgage loans being held until they are sold in the secondary market, were $226,003 at March 31, 2025, as compared to $246,171 at December 31, 2024. Mortgage loans to be sold are sold either on a “best efforts” basis or under a mandatory delivery sales agreement. Under a “best efforts” sales agreement, residential real estate originations are locked in at a contractual rate with third party private investors or directly with government sponsored agencies, and the Company is obligated to sell the mortgages to such investors only if the mortgages are closed and funded. The risk we assume is conditioned upon loan underwriting and market conditions in the national mortgage market. Under a mandatory delivery sales agreement, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price and delivery date. Penalties are paid to the investor if we fail to satisfy the contract. Gains and losses are realized at the time consideration is received and all other criteria for sales treatment have been met. Our standard practice is to sell the loans within 30-40 days after the loan is funded. Although loan fees and some interest income are derived from mortgage loans held for sale, the main source of income is gains from the sale of these loans in the secondary market.

Previous wording

Total loans, excluding loans held for sale, were $12,627,648 at September 30, 2024 and $12,351,230 at December 31, 2023.

Current wording

Total loans, excluding loans held for sale, were $13,055,593 at March 31, 2025 and $12,885,020 at December 31, 2024.

Previous wording

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

Current wording

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

Previous wording

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, 2024, 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.

Current wording

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 March 31, 2025, there were no concentrations of loans exceeding 10% of total loans other than loans disclosed in the table above. Non-owner occupied commercial mortgage term loans was the largest concentration and compromised 32.65% of total loans at March 31, 2025. The following table presents the loan segments, determined by collateral type, within the non-owner occupied commercial mortgage loan category as of March 31, 2025.

Previous wording

The Company relies on deposits as its primary source of funds. Total deposits were $14,509,751 and $14,076,785 at September 30, 2024 and December 31, 2023, respectively. Noninterest-bearing deposits were $3,529,801 and $3,583,675 at September 30, 2024 and December 31, 2023, respectively, while interest-bearing deposits were $10,979,950 and $10,493,110 at September 30, 2024 and December 31, 2023, respectively. Interest-bearing deposits included brokered deposits of $126,995 and $461,441 at September 30, 2024 and December 31, 2023, respectively.

Current wording

The Company relies on deposits as its primary source of funds. Total deposits were $14,772,095 and $14,572,612 at March 31, 2025 and December 31, 2024, respectively. Noninterest-bearing deposits were $3,541,375 and $3,403,981 at March 31, 2025 and December 31, 2024, respectively, while interest-bearing deposits were $11,230,720 and $11,168,631 at March 31, 2025 and December 31, 2024, respectively.

Previous wording

Management continues to focus on growing and maintaining a stable source of funding, specifically noninterest-bearing deposits and other core deposits (that is, deposits excluding brokered deposits and time deposits greater than $250,000). Noninterest-bearing deposits represented 24.33% of total deposits at September 30, 2024, as compared to 25.46% of total deposits at December 31, 2023. The decrease in noninterest-bearing deposits as a percentage of total deposits primarily reflects deposit customers transferring noninterest-bearing deposits to interest-bearing deposits such as money market funds offered by the Company, other financial institutions and other financial services companies due to the elevated interest rate environment that continued in the first nine months of 2024. Under certain circumstances, management may elect to acquire non-core deposits (in the form of brokered deposits) or public fund deposits (which are deposits of counties, municipalities or other political subdivisions). The source of funds that we select depends on the terms of the deposits and how those terms assist us in mitigating interest rate risk, maintaining our liquidity position and managing our net interest margin; business factors, described in the following paragraph, may lead us to obtain public deposits. Accordingly, funds are acquired to meet anticipated funding needs at the rate and with other terms that, in management’s view, best address our interest rate risk, liquidity and net interest margin parameters.

Current wording

Management continues to focus on growing and maintaining a stable source of funding, specifically noninterest-bearing deposits and other core deposits (that is, deposits excluding brokered deposits and time deposits greater than $250,000). Noninterest-bearing deposits represented 23.97% of total deposits at March 31, 2025, as compared to 23.36% of total deposits at December 31, 2024. The slight increase in noninterest-bearing deposits as a percentage of total deposits was driven by the seasonal inflow of public fund deposits. Under certain circumstances, management may elect to acquire non-core deposits (in the form of brokered deposits) or public fund deposits (which are deposits of counties, municipalities or other political subdivisions). The source of funds that we select depends on the terms of the deposits and how those terms assist us in mitigating interest rate risk, maintaining our liquidity position and managing our net interest margin; business factors, described in the following paragraph, may lead us to obtain public deposits. Accordingly, funds are acquired to meet anticipated funding needs at the rate and with other terms that, in management’s view, best address our interest rate risk, liquidity and net interest margin parameters.

Previous wording

Public fund deposits may be readily obtained based on the Company’s pricing bid in comparison with competitors. Because public fund deposits are obtained through a bid process, these deposit balances may fluctuate as competitive and market forces change. Although the Company has focused on growing stable sources of deposits to reduce reliance on public fund deposits, it participates in the bidding process for public fund deposits when pricing and other terms make it reasonable given market conditions or when management perceives that other factors, such as the public entity’s use of our treasury management or other products and services, make such participation advisable. Our public fund transaction accounts are principally obtained from public universities and municipalities, including school boards and utilities. Public fund deposits were $2,185,034 and $1,866,495 at September 30, 2024 and December 31, 2023, respectively, and represented 15.06% and 13.26% of total deposits as of September 30, 2024 and December 31, 2023, respectively.

Current wording

Public fund deposits may be readily obtained based on the Company’s pricing bid in comparison with competitors. Because public fund deposits are obtained through a bid process, these deposit balances may fluctuate as competitive and market forces change. Although the Company has focused on growing stable sources of deposits to reduce reliance on public fund deposits, it participates in the bidding process for public fund deposits when pricing and other terms make it reasonable given market conditions or when management perceives that other factors, such as the public entity’s use of our treasury management or other products and services, make such participation advisable. Our public fund transaction accounts are principally obtained from public universities and municipalities, including school boards and utilities. Public fund deposits were $2,351,241 and

Previous wording

Total borrowings include federal funds purchased, securities sold under agreements to repurchase, advances from the Federal Home Loan Bank of Dallas (the “FHLB”), borrowings from the Federal Reserve Discount Window, subordinated notes and junior subordinated debentures and are classified on the Consolidated Balance Sheets as either short-term borrowings or long-term debt. Short-term borrowings have original maturities less than one year and typically consist of federal funds purchased, securities sold under agreements to repurchase, and short-term FHLB advances. The following table presents our short-term borrowings by type as of the dates presented:

Current wording

Total borrowings may include federal funds purchased, securities sold under agreements to repurchase, advances from the Federal Home Loan Bank of Dallas (the “FHLB”), borrowings from the Federal Reserve Discount Window, subordinated notes and junior subordinated debentures and are classified on the Consolidated Balance Sheets as either short-term borrowings or long-term debt. Short-term borrowings have original maturities less than one year and typically consist of federal funds purchased, securities sold under agreements to repurchase, and short-term FHLB advances. The following table presents our short-term borrowings by type as of the dates presented:

Previous wording

Long-term funds obtained from the FHLB are used to match-fund fixed rate loans in order to minimize interest rate risk and to meet day-to-day liquidity needs, particularly when the cost of such borrowing compares favorably to the rates that we would be required to pay to attract deposits. There were no long-term advances from the FHLB outstanding at September 30, 2024 or December 31, 2023. All advances from the FHLB are collateralized by a blanket lien on the Bank’s loans. The Company had $3,449,164 of availability on unused lines of credit with the FHLB at September 30, 2024, as compared to $2,922,315 at December 31, 2023. The Company also had credit available at the Federal Reserve Discount Window in the amount of $634,636 with no borrowings outstanding at September 30, 2024 or December 31, 2023.

Current wording

Long-term funds obtained from the FHLB are used to match-fund fixed rate loans in order to minimize interest rate risk and to meet day-to-day liquidity needs, particularly when the cost of such borrowing compares favorably to the rates that we would be required to pay to attract deposits (which has not been the case in recent periods). Advances from the FHLB are collateralized by a blanket lien on the Bank’s loans. The Company had $3,816,162 of availability on unused lines of credit with the FHLB at March 31, 2025, as compared to $4,004,630 at December 31, 2024. The Company also had credit available at the Federal Reserve Discount Window in the amount of $662,630.

Previous wording

The Company 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 Renasant Bank as regulatory capital. The subordinated notes qualify as Tier 2 capital under current regulatory guidelines.

Current wording

The Company has issued subordinated notes, and the Company owns the outstanding common securities of business trusts that issued corporation-obligated mandatorily redeemable preferred capital securities to third-party investors, the proceeds of which were used to buy floating rate junior subordinated debentures issued by the Company (or by companies that the Company subsequently acquired). The proceeds generated by the Company’s subordinated notes and trust preferred securities transactions have been used for general corporate purposes, including providing capital to support the Company’s growth organically or through strategic acquisitions, repaying indebtedness and financing investments and capital expenditures, and for investments in Renasant Bank as regulatory capital. The subordinated notes and trust preferred securities qualify as Tier 2 capital and Tier 1 capital, respectively, under current regulatory guidelines. On account of the completion of the merger with The First on April 1, 2025, the trust preferred securities now qualify as Tier 2 capital.

Previous wording

Net income for the third quarter of 2024 was $72,455 compared to net income of $41,833 for the third quarter of 2023. Basic and diluted earnings per share (“EPS”) for the third quarter of 2024 were $1.18, as compared to basic and diluted EPS of $0.75 and $0.74, respectively for the third quarter of 2023. Net income for the nine months ended September 30, 2024, was $150,710 compared to net income of $116,554 for the same period in 2023. Basic and diluted EPS were $2.60 and $2.59, respectively for the first nine months of 2024 as compared to $2.08 and 2.07, respectively for the first nine months of 2023.

Current wording

Net income for the first quarter of 2025 was $41,518 compared to net income of $39,409 for the first quarter of 2024. Basic and diluted earnings per share (“EPS”) for the first quarter of 2025 were $0.65, as compared to basic and diluted EPS of $0.70 for the first quarter of 2024.

Previous wording

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 59.93% of total revenue (i.e., net interest income on a fully taxable equivalent basis and noninterest income) for the third quarter of 2024 (this percentage for the quarter was impacted by the noninterest income generated by the sale of our insurance agency business). The primary concerns in managing net interest income are the volume, mix and repricing of assets and liabilities.

Current wording

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 79.03% of total revenue (i.e., net interest income on a fully taxable equivalent basis and noninterest income) for the first quarter of 2025. The primary concerns in managing net interest income are the volume, mix and repricing of assets and liabilities.

Previous wording

Net interest income was $130,998 and $379,314 for the three and nine months ended September 30, 2024, as compared to $127,383 and $393,374 for the same periods in 2023. On a tax equivalent basis, net interest income was $133,576 and $387,024 for the three and nine months ended September 30, 2024, as compared to $130,131 and $401,745 for the same periods in 2023.

Current wording

Net interest income was $134,197 for the three months ended March 31, 2025, as compared to $123,290 for the same period in 2024. On a tax equivalent basis, net interest income was $137,432 for the three months ended March 31, 2025, as compared to $125,850 for the same period in 2024.

Previous wording

Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes in volume and mix and pricing decisions. External factors include changes in market interest rates, competition and other factors affecting the banking industry in general, and the shape of the interest rate yield curve. The largest contributing factor to the decrease in net interest income for the nine months ended September 30, 2024, as compared to the same period in 2023, was the rising rate environment that began in 2022 and continued throughout 2023. The higher interest rates benefited yields on earning assets, but this increase was more than offset by an increase in interest expense. The rising interest rates negatively impacted both the cost and mix of our funding sources. The Federal Reserve lowered the federal funds rate by 50 basis points in September 2024, but it did not have a material impact on the Company’s results for the third quarter of 2024. The Company has continued its efforts to mitigate increases in the cost of funding through maintaining noninterest-bearing deposits, staying disciplined yet competitive in pricing on interest-bearing deposits in the current rate environment and accessing alternative sources of liquidity, such as brokered deposits. These efforts, coupled with loan growth, resulted in the growth of net interest income for the three months ended September 30, 2024, as compared to the same period in 2023.

Current wording

Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes in volume and mix and pricing decisions. External factors include changes in market interest rates, competition and other factors affecting the banking industry in general, and the shape of the interest rate yield curve. Strong loan growth and the Federal Reserve lowering the federal funds rate by 100 basis points in the second half of 2024 were the largest contributing factors to the increase in net interest income for the three months ended March 31, 2025, as compared to the same period in 2024. The lower interest rates generated a positive impact to both the cost and mix of our funding sources. The Company has continued its efforts to mitigate increases in the cost of funding due to competition, increases in the federal funds rate or otherwise through maintaining noninterest-bearing deposits, and staying disciplined yet competitive in pricing on interest-bearing deposits in the current rate environment.

Previous wording

The following tables set forth a summary of the changes in interest earned, on a tax equivalent basis, and interest paid resulting from changes in volume and rates for the Company for the three and nine months ended September 30, 2024, as compared to the same periods in 2023 (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):

Current wording

The following tables set forth a summary of the changes in interest earned, on a tax equivalent basis, and interest paid resulting from changes in volume and rates for the Company for the three months ended March 31, 2025, as compared to the same period in 2024 (the changes attributable to the combined impact of yield/rate and volume have been allocated on a pro-rata basis using the absolute value of amounts calculated):

Previous wording

Interest income, on a tax equivalent basis, was $231,621 and $670,143 for the three and nine months ended September 30, 2024, as compared to $208,425 and $595,259 for the same periods in 2023. The increase in interest income, on a tax equivalent basis, for the three and nine months ended September 30, 2024, as compared to the same time periods in 2023 is due primarily to interest rate increases by the Federal Reserve beginning in 2022 and continuing into 2023.

Current wording

Interest income, on a tax equivalent basis, was $223,565 for the three months ended March 31, 2025, as compared to $215,739 for the same period in 2024. The increase in interest income, on a tax equivalent basis, for the three months ended March 31, 2025, as compared to the same time period in 2024 is due primarily to loan growth.

Previous wording

For the third quarter of 2024, interest income on loans held for investment, on a tax equivalent basis, increased $21,414 to $204,935 from $183,521 for the same period in 2023. For the nine months ended September 30, 2024, interest income on loans held for investment, on a tax equivalent basis, increased $77,205 to $600,245 from $523,040 in the same period in 2023. The Federal Reserve continued to raise interest rates in 2023, which positively impacted the Company’s loan pricing, and the year-to-date average balance of loans held for investment increased $686,140 from September 2023, thereby resulting in the increase in interest income on loans held for investment for the three and nine months ended September 30, 2024, as compared to the same periods in 2023.

Current wording

For the first quarter of 2025, interest income on loans held for investment, on a tax equivalent basis, increased $4,864 to $199,504 from $194,640 for the same period in 2024. The year-to-date average balance of loans held for investment increased $558,893 from March 2024, thereby resulting in the increase in interest income on loans held for investment for the three months ended March 31, 2025, as compared to the same period in 2024.

Previous wording

Interest income on loans held for sale (consisting of mortgage loans held for sale) increased $461 to $4,212 for the third quarter of 2024 from $3,751 for the same period in 2023 and increased $1,572 to $10,050 for the nine months ended September 30, 2024 from $8,478 for the same period in 2023.

Current wording

Interest income on loans held for sale (consisting of mortgage loans held for sale) increased $700 to $3,008 for the first quarter of 2025 from $2,308 for the same period in 2024.

Previous wording

Interest expense on deposits was $90,787 and $70,906 for the three months ended September 30, 2024 and 2023, respectively, and the cost of total deposits was 2.51% and 1.98% for the same respective periods. Interest expense on deposits was $261,021 and $155,163 for the nine months ended September 30, 2024 and 2023, respectively, and the cost of total deposits was 2.45% and 1.50% for the same respective periods. The increase in both deposit expense and cost is attributable to the Company’s efforts to offer competitive deposit rates in the high interest rate environment. Following the bank failures and broader industry concerns about bank liquidity that arose in March 2023, the Company maintained additional on-balance sheet liquidity, primarily in the form of brokered deposits and short-term FHLB advances. As risks abated, the Company repaid the advances and has allowed brokered deposits to mature, mitigating to some degree the impact of rising rates on our deposit costs. The Company has continued its efforts to maintain non-interest bearing deposits. Low cost deposits continue to be the preferred choice of funding; however, the Company may rely on brokered deposits or wholesale borrowings when advantageous or otherwise deemed advisable due to market conditions.

Current wording

Interest expense on deposits was $79,386 and $82,613 for the three months ended March 31, 2025 and 2024, respectively, and the cost of total deposits was 2.22% and 2.35% for the same respective periods. The decrease in both deposit expense and cost is attributable to the Federal Reserve’s rate cuts during the second half of 2024. As liquidity risks abated, the Company also repaid advances and allowed brokered deposits to mature, which lowered our deposit costs. The Company has continued its efforts to maintain non-interest bearing deposits. Low cost deposits continue to be the preferred choice of funding; however, the Company may rely on brokered deposits or wholesale borrowings when advantageous or otherwise deemed advisable due to market conditions.

Previous wording

Interest expense on total borrowings was $7,258 and $7,388 for the three months ended September 30, 2024 and 2023, respectively. Interest expense on total borrowings was $22,098 and $38,351 for the nine months ended September 30, 2024 and 2023, respectively. The decrease in interest expense on borrowings is a result of the repayment of FHLB borrowings during 2023 and the first quarter of 2024.

Current wording

Interest expense on total borrowings was $6,747 and $7,276 for the three months ended March 31, 2025 and 2024, respectively. The decrease in interest expense on borrowings is a result of the Federal Reserve’s rate cuts during the second half of 2024.

Previous wording

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 and losses on the sale of securities, the gain from the sale of our insurance agency 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 $89,299 for the third quarter of 2024 as compared to $38,200 for the same period in 2023. Noninterest income was $169,442 for the nine months ended September 30, 2024 as compared to $92,719 for the same period in 2023. The increase over the three and nine month periods is primarily due to the gain on sale of our insurance agency business on July 1, 2024, as described under the “Recent Developments” heading above. Noninterest income in future periods will be negatively impacted by this sale, as we will no longer earn insurance commissions (the amount of these commissions for the three and nine months ended September 30, 2023 are described below).

Current wording

Total noninterest income includes fees generated from deposit services and other fees and commissions, income from our wealth management and mortgage banking operations, realized gains and losses on the sale of securities and all other noninterest income. Our focus is to develop and enhance our products that generate noninterest income in order to diversify revenue sources. Noninterest income was $36,468 for the first quarter of 2025 as compared to $41,381 for the same period in 2024. The decrease over the three month period is primarily due to the sale of our insurance agency business on July 1, 2024. Noninterest income for the first quarter of 2024 included income earned on insurance products in the amount of $2,716, while the Company did not earn any such income in the first quarter of 2025.

Previous wording

Service charges on deposit accounts include maintenance fees on accounts, per item charges, account enhancement charges for additional packaged benefits and overdraft fees (which encompasses traditional overdraft fees as well as non-sufficient funds fees). Service charges on deposit accounts were $10,438 and $9,743 for the third quarter of 2024 and 2023, respectively, and $31,230 and $28,596 for the nine months ended September 30, 2024 and 2023, respectively. Overdraft fees, the largest component of service charges on deposits, were $5,122 for the three months ended September 30, 2024, as compared to $5,065 for the same period in 2023. These fees were $15,380 for the nine months ended September 30, 2024 compared to $14,734 for the same period in 2023.

Current wording

Service charges on deposit accounts include maintenance fees on accounts, per item charges, account enhancement charges for additional packaged benefits and overdraft fees (which encompasses traditional overdraft fees as well as non-sufficient funds fees). Service charges on deposit accounts were $10,364 and $10,506 for the first quarter of 2025 and 2024, respectively. Overdraft fees, the largest component of service charges on deposits, were $5,140 for the three months ended March 31, 2025, as compared to $5,256 for the same period in 2024.

Previous wording

Fees and commissions were $4,116 during the third quarter of 2024 as compared to $4,108 for the same period in 2023, and were $12,009 for the first nine months of 2024 as compared to $13,771 for the same period in 2023. Fees and commissions include fees related to deposit services, such as ATM fees and interchange fees on debit card transactions, and lending services, such as collateral management fees and unused commitment fees. For the third quarter of 2024, interchange fees were $2,246 as compared to $2,337 for the same period in 2023. Interchange fees were $6,697 for the nine months ended September 30, 2024 as compared to $7,130 for the same period in 2023.

Current wording

Fees and commissions were $3,860 during the first quarter of 2025 as compared to $3,949 for the same period in 2024. Fees and commissions include fees related to deposit services, such as ATM fees and interchange fees on debit card transactions, and lending services, such as collateral management fees and unused commitment fees. For the first quarter of 2025, interchange fees were $2,013 as compared to $2,130 for the same period in 2024.

Previous wording

Our Wealth Management segment has two divisions: Trust and Financial Services. The Trust division operates on a custodial basis, which includes administration of benefit plans, as well as accounting and money management for trust accounts. The division manages a number of trust accounts inclusive of personal and corporate benefit accounts, IRAs, and custodial accounts. Fees for managing these accounts are based on changes in market values of the assets under management in the account, with the amount of the fee depending on the type of account. The Financial Services division provides specialized products and services to our customers, which include fixed and variable annuities, mutual funds, and stocks offered through a third party provider. Wealth Management revenue was $5,835 for the third quarter of 2024 compared to $5,986 for the same period in 2023, and was $17,188 for the nine months ended September 30, 2024 compared to $16,464 for the same period in 2023. The market value of assets under management or administration was $5,694,433 and $4,999,504 at September 30, 2024 and September 30, 2023, respectively.

Current wording

Our Wealth Management segment has two divisions: Trust and Financial Services. The Trust division operates on a custodial basis, which includes administration of benefit plans, as well as accounting and money management for trust accounts. The division manages a number of trust accounts inclusive of personal and corporate benefit accounts, IRAs, and custodial accounts. Fees for managing these accounts are based on changes in market values of the assets under management in the account, with the amount of the fee depending on the type of account. The Financial Services division provides specialized products and services to our customers, which include fixed and variable annuities, mutual funds, and stocks offered through a third party provider. Wealth Management revenue was $7,067 for the first quarter of 2025 compared to $5,669 for the same period in 2024. The market value of assets under management or administration was $6,469,093 and $5,386,011 at March 31, 2025 and March 31, 2024, respectively.

Previous wording

Mortgage banking income is derived from the origination and sale of mortgage loans and the servicing of mortgage loans that the Company has sold but retained the right to service. Although loan fees and some interest income are derived from mortgage loans held for sale, the main source of income is gains from the sale of these loans in the secondary market. Interest rate lock commitments and originations of mortgage loans to be sold totaled $543,597 and $412,059, respectively, in the third quarter of 2024 compared to $494,442 and $397,355, respectively for the same period in 2023. Interest rate lock commitments and originations of mortgage loans to be sold totaled $1,548,198 and $1,053,190 in the nine months ended September 30, 2024 compared to $1,734,035 and $1,057,277 for the same period in 2023. The decrease in interest rate lock commitments for the nine months ended September 30, 2024 as compared to the same period in 2023 was due to continued increases in mortgage interest rates during 2023, significantly dampening demand for mortgages nationwide. In the first quarter of 2024, the Company sold a portion of its mortgage servicing rights portfolio with a carrying value of $19,539 for a pre-tax gain of $3,472. The table below presents the components of mortgage banking income included in noninterest income for the periods presented.

Current wording

Mortgage banking income is derived from the origination and sale of mortgage loans and the servicing of mortgage loans that the Company has sold but retained the right to service. Although loan fees and some interest income are derived from mortgage loans held for sale, the main source of income is gains from the sale of these loans in the secondary market. Interest rate lock commitments and originations of mortgage loans to be sold totaled $632,125 and $303,158, respectively, in the first quarter of 2025 compared to $444,297 and $260,424, respectively for the same period in 2024. The increase in interest rate lock commitments for the three months ended March 31, 2025 as compared to the same period in 2024 was due to the slight decrease in mortgage interest rates during the first quarter of 2025 as compared to the same period in 2024. The high rates in 2024 significantly dampened demand for mortgages nationwide. In the first quarter of 2024, the Company sold a portion of its mortgage servicing rights portfolio with a carrying value of $19,539 for a pre-tax gain of $3,472. The table below presents the components of mortgage banking income included in noninterest income for the periods presented.

Previous wording

Bank-owned life insurance (“BOLI”) income is derived from changes in the cash surrender value of the bank-owned life insurance policies and proceeds received upon the death of covered individuals. BOLI income was $2,858 for the three months ended September 30, 2024 as compared to $2,469 for the same period in 2023, and $8,250 for the nine months ended September 30, 2024 as compared to $7,874 for the same period in 2023.

Current wording

BOLI income is derived from changes in the cash surrender value of the bank-owned life insurance policies and proceeds received upon the death of covered individuals. BOLI income was $2,929 for the three months ended March 31, 2025 as compared to $2,691 for the same period in 2024.

Previous wording

Other noninterest income was $4,256 and $5,097 for the three months ended September 30, 2024 and 2023, respectively, and was $12,371 and $14,112 for the nine months ended September 30, 2024 and 2023, respectively. Other noninterest income includes income from our SBA banking division, our capital markets division and other miscellaneous income and can fluctuate based on production in our SBA banking and capital markets divisions and recognition of other seasonal income items.

Current wording

Other noninterest income was $4,101 and $4,424 for the three months ended March 31, 2025 and 2024, respectively. Other noninterest income includes income from our SBA banking division, our capital markets division and other miscellaneous income and can fluctuate based on production in our SBA banking and capital markets divisions and recognition of other seasonal income items.

Previous wording

Noninterest expense was $121,983 and $108,369 for the third quarter of 2024 and 2023, respectively, and was $346,871 and $327,742 for the nine months ended September 30, 2024 and 2023, respectively. The increase is primarily due to $11,273 in expenses relating to the proposed merger with The First and the sale of substantially all of the assets of Renasant Insurance.

Current wording

Noninterest expense was $113,949 and $112,912 for the first quarter of 2025 and 2024, respectively. The increase is primarily due to $791 in expenses relating to the proposed merger with The First.

Previous wording

Data processing costs were $4,133 in the third quarter of 2024 as compared to $3,907 for the same period in 2023 and were $11,885 for the nine months ended September 30, 2024 as compared to $11,224 for the same period in 2023. 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.

Current wording

Data processing costs were $4,089 in the first quarter of 2025 as compared to $3,807 for the same period in 2024. 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.

Previous wording

Net occupancy and equipment expense for the third quarter of 2024 was $11,415, as compared to $11,548 for the same period in 2023. These expenses for the first nine months of 2024 were $34,648, as compared to $34,818 for the same period in 2023.

Current wording

Net occupancy and equipment expense for the first quarter of 2025 was $11,754, as compared to $11,389 for the same period in 2024.

Previous wording

Professional fees include fees for legal and accounting services, such as routine litigation matters, external audit services as well as assistance in complying with newly-enacted and existing banking and other governmental regulations. Professional fees were $3,189 for the third quarter of 2024 as compared to $3,338 for the same period in 2023 and were $9,732 for the nine months ended September 30, 2024 as compared to $10,817 for the same period in 2023.

Current wording

Professional fees include fees for legal and accounting services, such as routine litigation matters, external audit services as well as assistance in complying with newly-enacted and existing banking and other governmental regulations. Professional fees were $2,884 for the first quarter of 2025 as compared to $3,348 for the same period in 2024.

Previous wording

Advertising and public relations expense was $3,677 for the third quarter of 2024 as compared to $3,474 for the same period in 2023 and was $12,370 for the nine months ended September 30, 2024 as compared to $11,642 for the same period in 2023. During the nine months ended September 30, 2024 and 2023, the Company contributed approximately $1,305 and $1,292, respectively, to charitable organizations throughout Mississippi and Georgia, which contributions are included in our advertising and public relations expense, for which it received a dollar-for-dollar tax credit.

Current wording

Advertising and public relations expense was $4,297 for the first quarter of 2025 as compared to $4,886 for the same period in 2024. During the three months ended March 31, 2025 and 2024, the Company contributed approximately $925 and $1,055, respectively, to charitable organizations throughout Mississippi and Georgia, which contributions are included in our advertising and public relations expense, for which it received a dollar-for-dollar tax credit.

Previous wording

Amortization of intangible assets totaled $1,160 and $1,311 for the third quarter of 2024 and 2023 and $3,558 and $4,106 for the nine months ended September 30, 2024 and 2023, 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 1 year to 7 years.

Current wording

Amortization of intangible assets totaled $1,080 and $1,212 for the first quarter of 2025 and 2024. This amortization relates to finite-lived intangible assets which are being amortized over the useful lives as determined at acquisition. These finite-lived intangible assets have remaining estimated useful lives ranging from approximately 1 year to 6 years.

Previous wording

Communication expenses, those expenses incurred for communication to clients and between employees, were $2,176 for the third quarter of 2024 as compared to $2,006 for the same period in 2023. Communication expenses were $6,312 for the nine months ended September 30, 2024 as compared to $6,212 for the same period in 2023.

Current wording

Communication expenses, those expenses incurred for communication to clients and between employees, were $2,033 for the first quarter of 2025 as compared to $2,024 for the same period in 2024.

Previous wording

Other noninterest expense includes business development and travel expenses, other discretionary expenses, loan fees expense and other miscellaneous fees and operating expenses. Other noninterest expense was $13,597 and $43,317 for the three and nine months ended September 30, 2024 as compared to $13,447 and $39,035 for the same periods in 2023. The increase in other noninterest expense is primarily attributable to lower mortgage deferred loan origination expense in the first nine months of 2024 compared to the same period in 2023. The amount of loan origination expense deferred is directly correlated to the volume and mix of our loan production during the period. The Company also accrued $700 for an FDIC deposit insurance special assessment in the first quarter of 2024.

Current wording

Other noninterest expense includes business development and travel expenses, other discretionary expenses, loan fees expense and other miscellaneous fees and operating expenses. Other noninterest expense was $14,379 for the three months ended March 31, 2025 as compared to $14,669 for the same period in 2024.