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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 March 31, 2022
Or
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from                      to                     
Commission file number: 001-13253
 ________________________________________________________
RENASANT CORPORATION
(Exact name of registrant as specified in its charter)
 ________________________________________________________
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 classTrading Symbol(s)Name of each exchange on which registered
Common stock, $5.00 par value per shareRNSTThe 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 filerAccelerated 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  


As of April 29, 2022, 55,900,096 shares of the registrant’s common stock, $5.00 par value per share, were outstanding.


Renasant Corporation and Subsidiaries
Form 10-Q
For the Quarterly Period Ended March 31, 2022
CONTENTS
 




PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS

Renasant Corporation and Subsidiaries
Consolidated Balance Sheets

(In Thousands, Except Share Data)
(Unaudited)
March 31,
2022
December 31, 2021
Assets
Cash and due from banks$230,947 $182,710 
Interest-bearing balances with banks1,376,546 1,695,255 
Cash and cash equivalents1,607,493 1,877,965 
Securities held to maturity (net of allowance for credit losses of $32 at each of March 31, 2022 and December 31, 2021) (fair value of $449,541 and $415,552, respectively)
487,194 416,357 
Securities available for sale, at fair value2,405,316 2,386,052 
Loans held for sale, at fair value280,464 453,533 
Loans, net of unearned income:
Non purchased loans and leases9,338,890 9,011,011 
Purchased loans974,569 1,009,903 
Total loans, net of unearned income10,313,459 10,020,914 
Allowance for credit losses(166,468)(164,171)
Loans, net10,146,991 9,856,743 
Premises and equipment, net285,344 293,122 
Other real estate owned:
Non purchased531 951 
Purchased1,531 1,589 
Total other real estate owned, net2,062 2,540 
Goodwill946,291 939,683 
Other intangible assets, net22,731 24,098 
Bank-owned life insurance369,344 287,359 
Mortgage servicing rights91,730 89,018 
Other assets218,797 183,841 
Total assets$16,863,757 $16,810,311 
Liabilities and shareholders’ equity
Liabilities
Deposits
Noninterest-bearing$4,706,256 $4,718,124 
Interest-bearing9,284,641 9,187,600 
Total deposits13,990,897 13,905,724 
Short-term borrowings111,279 13,947 
Long-term debt435,416 471,209 
Other liabilities188,523 209,578 
Total liabilities14,726,115 14,600,458 
Shareholders’ equity
Preferred stock, $0.01 par value – 5,000,000 shares authorized; no shares issued and outstanding
— — 
Common stock, $5.00 par value – 150,000,000 shares authorized; 59,296,725 shares issued; 55,880,666 and 55,756,233 shares outstanding, respectively
296,483 296,483 
Treasury stock, at cost – 3,416,059 and 3,540,492 shares, respectively
(114,050)(118,027)
Additional paid-in capital1,297,088 1,300,192 
Retained earnings762,690 741,648 
Accumulated other comprehensive loss, net of taxes(104,569)(10,443)
Total shareholders’ equity2,137,642 2,209,853 
Total liabilities and shareholders’ equity$16,863,757 $16,810,311 
See Notes to Consolidated Financial Statements.    
1

Renasant Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
(In Thousands, Except Share Data)
Three Months Ended
 March 31,
 20222021
Interest income
Loans$98,692 $115,005 
Securities
Taxable8,934 4,917 
Tax-exempt1,901 1,657 
Other664 183 
Total interest income110,191 121,762 
Interest expense
Deposits5,637 8,279 
Borrowings4,925 3,835 
Total interest expense10,562 12,114 
Net interest income99,629 109,648 
Provision for credit losses on loans1,500 — 
Provision for credit losses1,500 — 
Net interest income after provision for credit losses98,129 109,648 
Noninterest income
Service charges on deposit accounts9,562 8,023 
Fees and commissions3,982 3,900 
Insurance commissions2,554 2,237 
Wealth management revenue5,924 4,792 
Mortgage banking income9,633 50,733 
Net gain on sales of securities— 1,357 
BOLI income2,153 2,072 
Other3,650 7,923 
Total noninterest income37,458 81,037 
Noninterest expense
Salaries and employee benefits62,239 78,696 
Data processing4,263 5,451 
Net occupancy and equipment11,276 12,538 
Other real estate owned(241)41 
Professional fees3,151 2,921 
Advertising and public relations4,059 3,252 
Intangible amortization1,366 1,598 
Communications2,027 2,292 
Merger and conversion related expenses687 — 
Restructuring (benefit) charges(455)292 
Other5,733 8,854 
Total noninterest expense94,105 115,935 
Income before income taxes41,482 74,750 
Income taxes7,935 16,842 
Net income$33,547 $57,908 
Basic earnings per share$0.60 $1.03 
Diluted earnings per share$0.60 $1.02 
Cash dividends per common share$0.22 $0.22 
See Notes to Consolidated Financial Statements.
2

Renasant Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income (Unaudited)
(In Thousands)
 
Three Months Ended
 March 31,
 20222021
Net income$33,547 $57,908 
Other comprehensive (loss) income, net of tax:
Securities available for sale:
Unrealized holding losses on securities(100,462)(14,943)
Reclassification adjustment for gains realized in net income— (1,012)
Amortization of unrealized holding gains on securities transferred to the held to maturity category(74)— 
Total securities available for sale(100,536)(15,955)
Derivative instruments:
Unrealized holding gains on derivative instruments6,379 10,984 
Total derivative instruments6,379 10,984 
Defined benefit pension and post-retirement benefit plans:
Amortization of net actuarial loss recognized in net periodic pension cost31 42 
Total defined benefit pension and post-retirement benefit plans31 42 
Other comprehensive loss, net of tax(94,126)(4,929)
Comprehensive (loss) income$(60,579)$52,979 

See Notes to Consolidated Financial Statements.
3


Renasant Corporation and Subsidiaries
Consolidated Statements of Changes in Shareholders’ Equity
(Unaudited)

(In Thousands, Except Share Data)

Common StockTreasury StockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total
Three Months Ended March 31, 2022SharesAmount
Balance at January 1, 202255,756,233 $296,483 $(118,027)$1,300,192 $741,648 $(10,443)$2,209,853 
Net income— — — — 33,547 — 33,547 
Other comprehensive loss— — — — — (94,126)(94,126)
Comprehensive loss(60,579)
Cash dividends ($0.22 per share)
— — — — (12,505)— (12,505)
Issuance of common stock for stock-based compensation awards124,433 — 3,977 (6,442)— — (2,465)
Stock-based compensation expense— — — 3,338 — — 3,338 
Balance at March 31, 202255,880,666 $296,483 $(114,050)$1,297,088 $762,690 $(104,569)$2,137,642 
Common StockTreasury StockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive IncomeTotal
Three Months Ended March 31, 2021SharesAmount
Balance at January 1, 202156,200,487 $296,483 $(101,554)$1,296,963 $615,773 $25,068 $2,132,733 
Net income— — — — 57,908 — 57,908 
Other comprehensive loss— — — — — (4,929)(4,929)
Comprehensive income52,979 
Cash dividends ($0.22 per share)
— — — — (12,564)— (12,564)
Issuance of common stock for stock-based compensation awards93,859 — 2,605 (4,808)— — (2,203)
Stock-based compensation expense— — — 2,756 — — 2,756 
Balance at March 31, 202156,294,346 $296,483 $(98,949)$1,294,911 $661,117 $20,139 $2,173,701 

See Notes to Consolidated Financial Statements.
4

Renasant Corporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
(In Thousands)
 Three Months Ended March 31,
 20222021
Operating activities
Net income$33,547 $57,908 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for credit losses1,500 — 
Depreciation, amortization and accretion12,804 10,059 
Deferred income tax expense4,649 5,542 
Funding of mortgage loans held for sale(595,046)(1,143,349)
Proceeds from sales of mortgage loans held for sale769,797 1,082,538 
Gains on sales of mortgage loans held for sale(6,047)(33,901)
Valuation adjustment to mortgage servicing rights— (13,561)
Gains on sales of securities— (1,357)
Gains on sales of premises and equipment(3)(22)
Stock-based compensation expense3,338 2,756 
Increase (decrease) in other assets5,746 (11,800)
Decrease in other liabilities(24,469)(11,601)
Net cash provided by (used in) operating activities205,816 (56,788)
Investing activities
Purchases of securities available for sale(285,635)(465,245)
Proceeds from sales of securities available for sale— 155,391 
Proceeds from call/maturities of securities available for sale128,155 95,382 
Purchases of securities held to maturity(79,434)— 
Proceeds from call/maturities of securities held to maturity7,620 — 
Net (increase) decrease in loans(264,251)243,250 
Purchases of premises and equipment(2,030)(2,630)
Proceeds from sales of premises and equipment100 34 
Purchase of bank-owned life insurance(80,000)— 
Net change in FHLB stock(422)(24)
Proceeds from sales of other assets956 1,962 
Net cash paid in acquisition of businesses(10,066)— 
Other, net207 1,346 
Net cash (used in) provided by investing activities(584,800)29,466 
Financing activities
Net (decrease) increase in noninterest-bearing deposits(11,868)450,312 
Net increase in interest-bearing deposits97,041 227,515 
Net increase (decrease) in short-term borrowings67,852 (9,186)
Repayment of long-term debt(32,008)(42)
Cash paid for dividends(12,505)(12,564)
Net cash provided by financing activities108,512 656,035 
Net (decrease) increase in cash and cash equivalents(270,472)628,713 
Cash and cash equivalents at beginning of period1,877,965 633,203 
Cash and cash equivalents at end of period$1,607,493 $1,261,916 
Supplemental disclosures
Cash paid for interest$10,324 $15,108 
Cash paid for income taxes$6,195 $18,032 
Noncash transactions:
Transfers of loans to other real estate owned$200 $2,039 
Recognition of operating right-of-use assets$30 $3,601 
Recognition of operating lease liabilities$30 $3,601 

See Notes to Consolidated Financial Statements.
5

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., Park Place Capital Corporation and Southeastern Commercial Finance, LLC. Through its subsidiaries, the Company offers a diversified range of financial, wealth management, fiduciary and insurance services to its retail and commercial customers from full service offices located throughout Mississippi, Tennessee, Alabama, Georgia, Florida, North Carolina and South Carolina.
The Company acquired Southeastern Commercial Finance, LLC, an asset-based lending company headquartered in Birmingham, Alabama, effective March 1, 2022.
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. 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, 2021 filed with the Securities and Exchange Commission on February 25, 2022.
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 March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method” (“ASU 2022-01”), which expands the last-of-layer method (which previously allowed entities to hedge exposure of a closed portfolio of prepayable financial assets to fair value changes due to changes in interest rates for a portion of the portfolio that is not expected to be affected by prepayments, defaults and other events impacting the timing and amount of cash flows on only one hedged layer) to the portfolio layer method which allows for multiple hedged layers in a single closed portfolio. ASU 2022-01 also expands the scope to include non-prepayable financial assets, specifies eligible hedging instruments in a single layer hedge, provides guidance on the accounting for and disclosure of hedge basis adjustment under the portfolio layer method and specifies how hedge basis adjustments should be considered when determining credit losses for assets included in a closed portfolio. ASU 2022-01 will be effective on January 1, 2023. Early adoption is permitted, including in an interim period. ASU 2022-01 is not expected to have a significant impact on the Company’s financial statements.
In March 2022, the FASB issued ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”), which eliminates the accounting guidance for troubled debt restructurings in Accounting Standards Codification (“ASC”) Subtopic 310-40, “Receivables - Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Additionally, ASU 2022-02 requires entities to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. ASU 2022-02 will be effective on January 1, 2023. Early adoption is permitted, including in an interim period. The adoption of this accounting pronouncement will have no impact on the Company’s financial statements aside from additional and revised disclosures.
6

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 of securities available for sale were as follows as of the dates 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, 2022 or December 31, 2021.
 
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
March 31, 2022
U.S. Treasury securities$2,000 $— $— $2,000 
Obligations of states and political subdivisions161,565 1,117 (5,205)157,477 
Residential mortgage backed securities:
Government agency mortgage backed securities969,140 1,249 (48,493)921,896 
Government agency collateralized mortgage obligations1,094,043 (83,591)1,010,457 
Commercial mortgage backed securities:
Government agency mortgage backed securities11,277 — (371)10,906 
Government agency collateralized mortgage obligations221,955 87 (12,852)209,190 
Other debt securities94,996 385 (1,991)93,390 
$2,554,976 $2,843 $(152,503)$2,405,316 
 
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
December 31, 2021
U.S. Treasury securities$3,007 $$— $3,010 
Obligations of other U.S. Government agencies and corporations153,847 5,532 (269)159,110 
Obligations of states and political subdivisions— — — — 
Residential mortgage backed securities:
Government agency mortgage backed securities967,497 7,854 (6,816)968,535 
Government agency collateralized mortgage obligations1,008,514 457 (20,371)988,600 
Commercial mortgage backed securities:
Government agency mortgage backed securities14,717 365 (1)15,081 
Government agency collateralized mortgage obligations216,859 812 (3,419)214,252 
Trust preferred securities— — — — 
Other debt securities36,515 1,097 (148)37,464 
$2,400,956 $16,120 $(31,024)$2,386,052 


7

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
The amortized cost and fair value of securities held to maturity were as follows as of the dates presented:
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
March 31, 2022
Obligations of states and political subdivisions$290,588 $— $(26,969)$263,619 
Residential mortgage backed securities
Government agency mortgage backed securities95,369 — (3,943)91,426 
Government agency collateralized mortgage obligations23,403 — (1,904)21,499 
Commercial mortgage backed securities:
Government agency mortgage backed securities17,022 — (1,488)15,534 
Government agency collateralized mortgage obligations38,906 — (2,261)36,645 
Other debt securities21,938 — (1,120)20,818 
$487,226 $— $(37,685)$449,541 
Allowance for credit losses - held to maturity securities(32)
Held to maturity securities, net of allowance for credit losses$487,194 
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
December 31, 2021
Obligations of states and political subdivisions$267,641 $333 $(685)$267,289 
Residential mortgage backed securities
Government agency mortgage backed securities60,507 (198)60,310 
Government agency collateralized mortgage obligations24,832 — (92)24,740 
Commercial mortgage backed securities:
Government agency mortgage backed securities1,855 — — 1,855 
Government agency collateralized mortgage obligations39,505 — (117)39,388 
Other debt securities22,049 — (79)21,970 
$416,389 $334 $(1,171)$415,552 
Allowance for credit losses - held to maturity securities(32)
Held to maturity securities, net of allowance for credit losses$416,357 
8

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
There were no securities sold during the three months ended March 31, 2022. Securities sold during the three months ended March 31, 2021 were as set forth in the table below.
Carrying ValueNet ProceedsGain/(Loss)
Three months ended March 31, 2021
Obligations of states and political subdivisions$47 $50 $
Residential mortgage backed securities:
Government agency mortgage backed securities136,340 139,735 3,395 
Government agency collateralized mortgage obligations5,626 5,646 20 
Trust preferred securities12,021 9,960 (2,061)
$154,034 $155,391 $1,357 

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

At March 31, 2022 and December 31, 2021, securities with a carrying value of $684,687 and $607,681, respectively, were pledged to secure government, public and trust deposits. Securities with a carrying value of $18,305 and $21,493 were pledged as collateral for short-term borrowings and derivative instruments at March 31, 2022 and December 31, 2021, respectively.
The amortized cost and fair value of securities at March 31, 2022 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.
 
 Held to MaturityAvailable for Sale
 Amortized
Cost
Fair
Value
Amortized
Cost
Fair
Value
Due within one year$155 $155 $3,996 $4,003 
Due after one year through five years2,047 1,977 37,518 37,814 
Due after five years through ten years18,244 16,884 66,830 66,946 
Due after ten years270,142 244,603 88,851 84,252 
Residential mortgage backed securities:
Government agency mortgage backed securities95,369 91,426 969,140 921,896 
Government agency collateralized mortgage obligations23,403 21,499 1,094,043 1,010,457 
Commercial mortgage backed securities:
Government agency mortgage backed securities17,022 15,534 11,277 10,906 
Government agency collateralized mortgage obligations38,906 36,645 221,955 209,190 
Other debt securities21,938 20,818 61,366 59,852 
$487,226 $449,541 $2,554,976 $2,405,316 
9

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)


The following tables present 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 Months12 Months or MoreTotal
 #Fair
Value
Unrealized
Losses
#Fair
Value
Unrealized
Losses
#Fair
Value
Unrealized
Losses
Available for Sale:
March 31, 2022
Obligations of states and political subdivisions41$81,646 $(4,767)4$5,805 $(438)45$87,451 $(5,205)
Residential mortgage backed securities:
Government agency mortgage backed securities80761,484 (43,653)649,651 (4,840)86811,135 (48,493)
Government agency collateralized mortgage obligations61932,820 (74,437)477,376 (9,154)651,010,196 (83,591)
Commercial mortgage backed securities:
Government agency mortgage backed securities310,481 (371)1425 — 410,906 (371)
Government agency collateralized mortgage obligations24150,009 (8,741)740,496 (4,111)31190,505 (12,852)
Other debt securities1051,369 (1,991)— — 1051,369 (1,991)
Total219$1,987,809 $(133,960)22$173,753 $(18,543)241$2,161,562 $(152,503)
December 31, 2021
Obligations of states and political subdivisions8$34,303 $(216)3$3,892 $(53)11$38,195 $(269)
Residential mortgage backed securities:
Government agency mortgage backed securities41727,546 (6,312)112,305 (504)42739,851 (6,816)
Government agency collateralized mortgage obligations49966,126 (20,371)— — 49966,126 (20,371)
Commercial mortgage backed securities:
Government agency mortgage backed securities11,791 (1)1432 — 22,223 (1)
Government agency collateralized mortgage obligations21160,919 (3,072)29,005 (347)23169,924 (3,419)
Trust preferred securities— — — — — — 
Other debt securities18,699 (148)— — 18,699 (148)
Total121$1,899,384 $(30,120)7$25,634 $(904)128$1,925,018 $(31,024)
10

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
 Less than 12 Months12 Months or MoreTotal
 #Fair
Value
Unrealized
Losses
#Fair
Value
Unrealized
Losses
#Fair
Value
Unrealized
Losses
Held to Maturity:
March 31, 2022
Obligations of states and political subdivisions127$261,920 $(26,786)1$1,699 $(183)128$263,619 $(26,969)
Residential mortgage backed securities:
Government agency mortgage backed securities5586,842 (3,599)14,584 (344)5691,426 (3,943)
Government agency collateralized mortgage obligations— — 121,499 (1,904)1$21,499 $(1,904)
Commercial mortgage backed securities:
Government agency mortgage backed securities115,534 (1,488)— — 1$15,534 $(1,488)
Government agency collateralized mortgage obligations631,380 (1,923)15,265 (338)7$36,645 $(2,261)
Other debt securities820,818 (1,120)— — 8$20,818 $(1,120)
Total197$416,494 $(34,916)4$33,047 $(2,769)201$449,541 $(37,685)
December 31, 2021
Obligations of states and political subdivisions24$62,131 $(685)$— $— 24$62,131 $(685)
Residential mortgage backed securities:
Government agency mortgage backed securities5053,560 (181)15,354 (17)5158,914 (198)
Government agency collateralized mortgage obligations124,740 (92)— — 124,740 (92)
Commercial mortgage backed securities:
Government agency collateralized mortgage obligations739,388 (117)— — 739,388 (117)
Other debt securities821,972 (79)— — 821,972 (79)
Total90$201,791 $(1,154)1$5,354 $(17)91$207,145 $(1,171)
 
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 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, and it is not more likely than not that the Company will be required to sell any such security prior to the recovery of its amortized cost basis, which may be maturity. Furthermore, even though a number of these securities have been in a continuous unrealized loss position for a period longer than twelve months, the Company is collecting principal and interest payments from the respective issuers as scheduled. Based upon its review of securities with unrealized losses as of March 31, 2022, the Company determined that all such losses resulted from factors not deemed credit related. As such, the Company did not record any impairment for the first quarter.

The allowance for credit losses on held to maturity securities was $32 at March 31, 2022 and December 31, 2021. The Company monitors the credit quality of debt securities held to maturity using bond investment grades assigned by third party ratings agencies. Updated investment grades are obtained as they become available from agencies. On March 31, 2022, 99.9% of the amortized cost of debt securities held to maturity were rated A or higher by the ratings agencies.


11

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:
 
March 31,
2022
December 31, 2021
Commercial, financial, agricultural(1)
$1,336,239 $1,332,962 
Lease financing94,954 80,192 
Real estate – construction:
Residential305,396 300,988 
Commercial911,532 798,914 
Total real estate – construction1,216,928 1,099,902 
Real estate – 1-4 family mortgage:
Primary1,803,750 1,682,050 
Home equity424,426 423,108 
Rental/investment274,117 268,245 
Land development142,294 135,070 
Total real estate – 1-4 family mortgage2,644,587 2,508,473 
Real estate – commercial mortgage:
Owner-occupied1,318,446 1,329,219 
Non-owner occupied2,510,981 2,446,370 
Land development116,113 110,395 
Total real estate – commercial mortgage3,945,540 3,885,984 
Installment loans to individuals105,754 107,565 
Gross loans9,344,002 9,015,078 
Unearned income(5,112)(4,067)
Loans, net of unearned income$9,338,890 $9,011,011 

(1)Includes Paycheck Protection Program (“PPP”) loans of $8,382 and $58,391 as of March 31, 2022 and December 31, 2021, 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 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. For loans that are placed on nonaccrual status or charged-off, all interest accrued for the current year but not collected 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.
12

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
The following tables provide an aging of past due accruing and nonaccruing loans, segregated by class, as of the dates presented:
 Accruing LoansNonaccruing Loans 
 30-89 Days
Past Due
90 Days
or More
Past Due
Current
Loans
Total
Loans
30-89 Days
Past Due
90 Days
or More
Past Due
Current
Loans
Total
Loans
Total
Loans
March 31, 2022
Commercial, financial, agricultural$1,519 $77 $1,329,682 $1,331,278 $739 $2,875 $1,347 $4,961 $1,336,239 
Lease financing— — 94,954 94,954 — — — — 94,954 
Real estate – construction:
Residential1,857 — 303,539 305,396 — — — — 305,396 
Commercial— — 911,532 911,532 — — — — 911,532 
Total real estate – construction1,857 — 1,215,071 1,216,928 — — — — 1,216,928 
Real estate – 1-4 family mortgage:
Primary16,852 — 1,771,806 1,788,658 4,018 6,812 4,262 15,092 1,803,750 
Home equity1,953 32 420,995 422,980 54 1,012 380 1,446 424,426 
Rental/investment562 100 272,736 273,398 16 438 265 719 274,117 
Land development332 — 141,441 141,773 — 333 188 521 142,294 
Total real estate – 1-4 family mortgage19,699 132 2,606,978 2,626,809 4,088 8,595 5,095 17,778 2,644,587 
Real estate – commercial mortgage:
Owner-occupied2,617 — 1,312,212 1,314,829 2,809 808 — 3,617 1,318,446 
Non-owner occupied662 — 2,504,698 2,505,360 — — 5,621 5,621 2,510,981 
Land development202 — 115,582 115,784 — 292 37 329 116,113 
Total real estate – commercial mortgage3,481 — 3,932,492 3,935,973 2,809 1,100 5,658 9,567 3,945,540 
Installment loans to individuals674 — 104,813 105,487 20 244 267 105,754 
Unearned income— — (5,112)(5,112)— — — — (5,112)
Loans, net of unearned income$27,230 $209 $9,278,878 $9,306,317 $7,639 $12,590 $12,344 $32,573 $9,338,890 
 
13

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

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 no restructured loans contractually 90 days past due or more and still accruing at March 31, 2022 or March 31, 2021. The outstanding balance of restructured loans on nonaccrual status was $15,267 and $5,965 at March 31, 2022 and March 31, 2021, respectively.
14

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
Amortized
Cost
Post-
Modification
Amortized
Cost
Three months ended March 31, 2022
Real estate – 1-4 family mortgage:
Primary$865 $873 
Real estate – commercial mortgage:
Owner-occupied6,500 6,500 
Total$7,365 $7,373 
Three months ended March 31, 2021
Real estate – 1-4 family mortgage:
Primary$432 $435 
Real estate – commercial mortgage:
Non-owner occupied837 810 
Total$1,269 $1,245 
With respect to loans that were restructured during the three months ended March 31, 2022 and March 31, 2021, none have subsequently defaulted 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, 202297 $14,650 
Additional advances or loans with concessions7,403 
Reductions due to:
Reclassified as nonperforming(4)(452)
Paid in full(5)(530)
Principal paydowns— (91)
Totals at March 31, 202296 $20,980 

The allowance for credit losses attributable to restructured loans was $646 and $328 at March 31, 2022 and March 31, 2021, respectively. The Company had $305 in remaining availability under commitments to lend additional funds on these restructured loans at March 31, 2022 and no remaining availability at March 31, 2021.
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
15

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
between 1 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 near term and, if left uncorrected, could result in deterioration of the credit quality of the loan. Loans that migrate toward the “Substandard” grade (those with a risk rating between 5 and 9) generally have a higher risk of loss and therefore a higher risk factor applied to those related loan balances.
The following 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
 20222021202020192018PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
March 31, 2022
Commercial, Financial, Agricultural$96,762 $276,836 $184,316 $105,812 $39,160 $21,356 $573,245 $4,504 $1,301,991 
Pass96,208 275,666 176,524 105,294 37,590 20,606 571,066 3,497 1,286,451 
Special Mention89 — — 194 272 — 601 — 1,156 
Substandard465 1,170 7,792 324 1,298 750 1,578 1,007 14,384 
Lease Financing Receivables$19,463 $24,644 $21,969 $14,215 $6,758 $2,793 $ $ $89,842 
Pass19,463 24,644 21,969 14,215 6,758 2,341 — — 89,390 
Special Mention— — — — — 452 — — 452 
Substandard— — — — — — — — — 
Real Estate - Construction$162,809 $482,341 $318,316 $145,402 $15,525 $ $6,539 $602 $1,131,534 
Residential$61,146 $150,122 $6,025 $— $— $— $2,107 $602 $220,002 
Pass61,146 150,122 6,025 — — — 2,107 602 220,002 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Commercial$101,663 $332,219 $312,291 $145,402 $15,525 $— $4,432 $— $911,532 
Pass101,663 331,298 312,291 145,402 15,525 — 4,432 — 910,611 
Special Mention— 921 — — — — — — 921 
Substandard— — — — — — — — — 
Real Estate - 1-4 Family Mortgage$86,992 $180,183 $67,130 $43,262 $24,115 $29,405 $26,986 $854 $458,927 
Primary$7,747 $12,478 $6,702 $2,969 $4,159 $4,803 $6,002 $— $44,860 
Pass7,538 12,478 6,702 2,848 4,159 4,436 5,991 — 44,152 
Special Mention— — — — — — — — — 
Substandard209 — — 121 — 367 11 — 708 
Home Equity$— $1,324 $— $41 $127 $— $13,817 $$15,318 
Pass— 1,324 — 41 127 — 13,817 15,318 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Rental/Investment$41,987 $100,533 $51,166 $29,396 $19,608 $24,032 $6,321 $845 $273,888 
Pass41,966 100,456 50,958 28,363 19,339 23,306 6,321 845 271,554 
Special Mention— — — — — — — — — 
Substandard21 77 208 1,033 269 726 — — 2,334 
Land Development$37,258 $65,848 $9,262 $10,856 $221 $570 $846 $— $124,861 
Pass37,258 65,848 8,974 10,832 221 570 846 — 124,549 
Special Mention— — — — — — — — — 
Substandard— — 288 24 — — — — 312 
Real Estate - Commercial Mortgage$398,640 $1,095,513 $790,229 $608,176 $304,844 $578,577 $137,549 $19,906 $3,933,434 
Owner-Occupied$121,718 $302,860 $266,970 $197,621 $146,863 $219,190 $55,759 $7,316 $1,318,297 
16

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
 Term Loans Amortized Cost Basis by Origination Year
 20222021202020192018PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
Pass121,353 301,595 265,142 196,020 145,137 203,852 55,759 6,347 1,295,205 
Special Mention— 1,191 — 347 — 3,127 — 932 5,597 
Substandard365 74 1,828 1,254 1,726 12,211 — 37 17,495 
Non-Owner Occupied$260,565 $749,262 $507,210 $400,465 $152,176 $356,205 $72,478 $12,590 $2,510,951 
Pass260,361 740,078 507,210 387,131 152,176 292,279 72,478 12,590 2,424,303 
Special Mention— 9,184 — 11,322 — 24,606 — — 45,112 
Substandard204 — — 2,012 — 39,320 — — 41,536 
Land Development$16,357 $43,391 $16,049 $10,090 $5,805 $3,182 $9,312 $— $104,186 
Pass14,759 43,123 15,713 10,090 5,724 3,182 9,312 — 101,903 
Special Mention— 43 — — — — — — 43 
Substandard1,598 225 336 — 81 — — — 2,240 
Installment loans to individuals$73 $ $ $37 $ $ $ $ $110 
Pass73 — — 37 — — — — 110 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total loans subject to risk rating$764,739 $2,059,517 $1,381,960 $916,904 $390,402 $632,131 $744,319 $25,866 $6,915,838 
Pass761,788 2,046,632 1,371,508 900,273 386,756 550,572 742,129 23,890 6,783,548 
Special Mention89 11,339 — 11,863 272 28,185 601 932 53,281 
Substandard2,862 1,546 10,452 4,768 3,374 53,374 1,589 1,044 79,009 


 Term Loans Amortized Cost Basis by Origination Year
 20212020201920182017PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
December 31, 2021
Commercial, Financial, Agricultural$300,748 $245,940 $122,350 $44,533 $15,384 $11,103 $557,628 $2,757 $1,300,443 
Pass299,731 245,657 120,102 43,042 14,603 8,605 553,541 2,002 1,287,283 
Special Mention— 136 1,798 281 605 1,196 651 — 4,667 
Substandard1,017 147 450 1,210 176 1,302 3,436 755 8,493 
Real Estate - Construction$461,370 $371,694 $174,369 $14,813 $ $ $3,769 $2,428 $1,028,443 
Residential$210,734 $12,598 $— $— $— $— $3,769 $2,428 $229,529 
Pass210,734 12,598 — — — — 3,769 2,428 229,529 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Commercial$250,636 $359,096 $174,369 $14,813 $— $— $— $— $798,914 
Pass250,636 359,096 174,369 14,813 — — — — 798,914 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
17

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
 Term Loans Amortized Cost Basis by Origination Year
 20212020201920182017PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
Real Estate - 1-4 Family Mortgage$205,137 $83,038 $60,240 $30,044 $28,340 $8,846 $25,534 $941 $442,120 
Primary$15,599 $7,698 $3,662 $5,985 $4,150 $1,066 $4,727 $— $42,887 
Pass15,599 7,698 3,496 5,985 4,066 1,057 4,716 — 42,617 
Special Mention— — — — — — — — — 
Substandard— — 166 — 84 11 — 270 
Home Equity$1,318 $— $42 $131 $— $— $13,615 $10 $15,116 
Pass1,318 — 42 131 — — 13,615 10 15,116 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Rental/Investment$111,006 $61,801 $33,734 $23,520 $23,890 $7,469 $5,554 $931 $267,905 
Pass110,987 60,855 32,733 23,246 23,708 7,098 5,554 931 265,112 
Special Mention— 249 — — — — — — 249 
Substandard19 697 1,001 274 182 371 — — 2,544 
Land Development$77,214 $13,539 $22,802 $408 $300 $311 $1,638 $— $116,212 
Pass74,818 13,539 22,769 408 300 311 1,638 — 113,783 
Special Mention2,396 — — — — — — — 2,396 
Substandard— — 33 — — — — — 33 
Real Estate - Commercial Mortgage$1,168,118 $836,549 $680,506 $344,089 $298,644 $376,652 $147,446 $21,644 $3,873,648 
Owner-Occupied$312,031 $305,686 $220,057 $164,345 $140,265 $117,767 $59,126 $9,748 $1,329,025 
Pass310,736 304,555 218,447 161,521 134,410 109,577 59,126 8,036 1,306,408 
Special Mention1,210 1,131 — — 1,733 328 — 1,712 6,114 
Substandard85 — 1,610 2,824 4,122 7,862 — — 16,503 
Non-Owner Occupied$809,784 $511,803 $449,409 $173,123 $155,175 $256,133 $79,016 $11,896 $2,446,339 
Pass800,348 503,009 436,062 165,843 102,446 242,665 79,016 11,896 2,341,285 
Special Mention9,235 8,794 11,356 7,280 33,176 8,024 — — 77,865 
Substandard201 — 1,991 — 19,553 5,444 — — 27,189 
Land Development$46,303 $19,060 $11,040 $6,621 $3,204 $2,752 $9,304 $— $98,284 
Pass46,034 17,030 11,040 6,569 3,204 2,752 9,304 — 95,933 
Special Mention44 — — — — — — — 44 
Substandard225 2,030 — 52 — — — — 2,307 
Installment loans to individuals$ $ $42 $ $ $ $ $ $42 
Pass— — 42 — — — — — 42 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total loans subject to risk rating$2,135,373 $1,537,221 $1,037,507 $433,479 $342,368 $396,601 $734,377 $27,770 $6,644,696 
Pass2,120,941 1,524,037 1,019,102 421,558 282,737 372,065 730,279 25,303 6,496,022 
Special Mention12,885 10,310 13,154 7,561 35,514 9,548 651 1,712 91,335 
Substandard1,547 2,874 5,251 4,360 24,117 14,988 3,447 755 57,339 

The following tables present the performing status of the Company’s loan portfolio not subject to risk rating as of the dates presented:
18

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
 Term Loans Amortized Cost Basis by Origination Year
 20222021202020192018PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
March 31, 2022
Commercial, Financial, Agricultural$ $24 $ $ $ $4,586 $29,638 $ $34,248 
Performing Loans— 24 — — — 4,586 29,638 — 34,248 
Non-Performing Loans— — — — — — — — — 
Real Estate - Construction$7,060 $70,624 $6,079 $1,631 $ $ $ $ $85,394 
Residential$7,060 $70,624 $6,079 $1,631 $— $— $— $— $85,394 
Performing Loans7,060 70,624 6,079 1,631 — — — — 85,394 
Non-Performing Loans— — — — — — — — — 
Commercial$— $— $— $— $— $— $— $— $— 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Real Estate - 1-4 Family Mortgage$202,102 $576,608 $389,909 $182,310 $142,482 $284,535 $404,747 $2,967 $2,185,660 
Primary$199,643 $566,132 $387,647 $181,465 $140,891 $283,112 $— $— $1,758,890 
Performing Loans199,643 565,669 386,148 179,052 136,035 277,478 — — 1,744,025 
Non-Performing Loans— 463 1,499 2,413 4,856 5,634 — — 14,865 
Home Equity$520 $111 $— $79 $224 $460 $404,747 $2,967 $409,108 
Performing Loans520 111 — 79 224 388 403,926 2,413 407,661 
Non-Performing Loans— — — — — 72 821 554 1,447 
Rental/Investment$— $— $— $— $— $229 $— $— $229 
Performing Loans— — — — — 176 — — 176 
Non-Performing Loans— — — — — 53 — — 53 
Land Development$1,939 $10,365 $2,262 $766 $1,367 $734 $— $— $17,433 
Performing Loans1,939 10,340 2,172 734 1,367 672 — — 17,224 
Non-Performing Loans— 25 90 32 — 62 — — 209 
Real Estate - Commercial Mortgage$1,004 $4,940 $3,204 $1,785 $748 $425 $ $ $12,106 
Owner-Occupied$— $— $135 $14 $— $— $— $— $149 
Performing Loans— — 135 14 — — — — 149 
Non-Performing Loans— — — — — — — — — 
Non-Owner Occupied$— $— $30 $— $— $— $— $— $30 
Performing Loans— — 30 — — — — — 30 
Non-Performing Loans— — — — — — — — — 
Land Development$1,004 $4,940 $3,039 $1,771 $748 $425 $— $— $11,927 
Performing Loans1,004 4,940 3,039 1,755 748 374 — — 11,860 
Non-Performing Loans— — — 16 — 51 — — 67 
Installment loans to individuals$13,094 $36,301 $11,810 $20,312 $6,858 $3,303 $13,926 $40 $105,644 
Performing Loans12,981 36,285 11,783 20,265 6,848 3,252 13,926 37 105,377 
Non-Performing Loans113 16 27 47 10 51 — 267 
Total loans not subject to risk rating$223,260 $688,497 $411,002 $206,038 $150,088 $292,849 $448,311 $3,007 $2,423,052 
Performing Loans223,147 687,993 409,386 203,530 145,222 286,926 447,490 2,450 2,406,144 
Non-Performing Loans113 504 1,616 2,508 4,866 5,923 821 557 16,908 
19

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
 Term Loans Amortized Cost Basis by Origination Year
 20212020201920182017PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
December 31, 2021
Commercial, Financial, Agricultural$71 $ $ $1 $ $8,983 $23,464 $ $32,519 
Performing Loans71 — — — 8,983 23,464 — 32,519 
Non-Performing Loans— — — — — — — — — 
Lease Financing Receivables$26,301 $23,270 $15,504 $7,713 $2,169 $1,168 $ $ $76,125 
Performing Loans26,301 23,270 15,504 7,713 2,167 1,159 — — 76,114 
Non-Performing Loans— — — — — — 11 
Real Estate - Construction$57,283 $12,561 $1,615 $ $ $ $ $ $71,459 
Residential$57,283 $12,561 $1,615 $— $— $— $— $— $71,459 
Performing Loans57,283 12,561 1,615 — — — — — 71,459 
Non-Performing Loans— — — — — — — — — 
Commercial$— $— $— $— $— $— $— $— $— 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Real Estate - 1-4 Family Mortgage$554,483 $419,252 $205,014 $155,535 $117,619 $207,381 $404,293 $2,776 $2,066,353 
Primary$542,659 $415,863 $203,739 $153,717 $116,689 $206,496 $— $— $1,639,163 
Performing Loans542,053 414,931 201,273 148,649 114,669 203,416 — — 1,624,991 
Non-Performing Loans606 932 2,466 5,068 2,020 3,080 — — 14,172 
Home Equity$111 $— $79 $225 $— $508 $404,293 $2,776 $407,992 
Performing Loans111 — 79 225 — 435 403,598 2,599 407,047 
Non-Performing Loans— — — — — 73 695 177 945 
Rental/Investment$— $— $99 $— $23 $218 $— $— $340 
Performing Loans— — 99 — 23 164 — — 286 
Non-Performing Loans— — — — — 54 — — 54 
Land Development$11,713 $3,389 $1,097 $1,593 $907 $159 $— $— $18,858 
Performing Loans11,688 3,298 1,065 1,593 832 159 — — 18,635 
Non-Performing Loans25 91 32 — 75 — — — 223 
Real Estate - Commercial Mortgage$5,265 $3,584 $2,082 $800 $468 $137 $ $ $12,336 
Owner-Occupied$— $136 $58 $— $— $— $— $— $194 
Performing Loans— 136 58 — — — — — 194 
Non-Performing Loans— — — — — — — — — 
Non-Owner Occupied$— $31 $— $— $— $— $— $— $31 
Performing Loans— 31 — — — — — — 31 
Non-Performing Loans— — — — — — — — — 
Land Development$5,265 $3,417 $2,024 $800 $468 $137 $— $— $12,111 
Performing Loans5,265 3,417 2,008 800 468 86 — — 12,044 
Non-Performing Loans— — 16 — — 51 — — 67 
Installment loans to individuals$44,302 $15,436 $23,114 $7,717 $1,985 $1,917 $13,016 $36 $107,523 
Performing Loans44,254 15,360 23,035 7,704 1,958 1,890 13,016 36 107,253 
Non-Performing Loans48 76 79 13 27 27 — — 270 
Total loans not subject to risk rating$687,705 $474,103 $247,329 $171,766 $122,241 $219,586 $440,773 $2,812 $2,366,315 
Performing Loans687,026 473,004 244,736 166,685 120,117 216,292 440,078 2,635 2,350,573 
Non-Performing Loans679 1,099 2,593 5,081 2,124 3,294 695 177 15,742 
20

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,
2022
December 31, 2021
Commercial, financial, agricultural$109,368 $90,308 
Real estate – construction:
Residential1,259 1,287 
Commercial3,865 3,707 
Total real estate – construction5,124 4,994 
Real estate – 1-4 family mortgage:
Primary122,063 134,070 
Home equity46,239 51,496 
Rental/investment18,694 20,229 
Land development9,396 9,978 
Total real estate – 1-4 family mortgage196,392 215,773 
Real estate – commercial mortgage:
Owner-occupied220,247 234,132 
Non-owner occupied396,135 410,577 
Land development15,942 18,344 
Total real estate – commercial mortgage632,324 663,053 
Installment loans to individuals31,361 35,775 
Loans$974,569 $1,009,903 

In the first quarter of 2022, the Company acquired Southeastern Commercial Finance, LLC. The acquired loans were added to the commercial, financial, and agricultural loan category at their fair value of $28,110 at the date of acquisition. The carrying amount of purchased credit deteriorated (“PCD”) loans at the acquisition date is detailed below.

Carrying Amount
Purchase price of loans at acquisition$6,543 
Allowance for credit losses at acquisition1,648 
Par value of acquired loans at acquisition$8,191 
21

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 following tables provide an aging of past due accruing and nonaccruing loans, segregated by class, as of the dates presented:
 Accruing LoansNonaccruing Loans 
 30-89 Days
Past Due
90 Days
or More
Past Due
Current
Loans
Total
Loans
30-89 Days
Past Due
90 Days
or More
Past Due
Current
Loans
Total
Loans
Total
Loans
March 31, 2022
Commercial, financial, agricultural$316 $— $100,913 $101,229 $203 $1,996 $5,940 $8,139 $109,368 
Real estate – construction:
Residential— — 1,259 1,259 — — — — 1,259 
Commercial— — 3,865 3,865 — — — — 3,865 
Total real estate – construction— — 5,124 5,124 — — — — 5,124 
Real estate – 1-4 family mortgage:
Primary1,224 — 115,600 116,824 981 1,706 2,552 5,239 122,063 
Home equity297 — 45,187 45,484 97 265 393 755 46,239 
Rental/investment— — 18,635 18,635 — — 59 59 18,694 
Land development75 — 9,321 9,396 — — — — 9,396 
Total real estate – 1-4 family mortgage1,596 — 188,743 190,339 1,078 1,971 3,004 6,053 196,392 
Real estate – commercial mortgage:
Owner-occupied314 — 217,850 218,164 — 138 1,945 2,083 220,247 
Non-owner occupied54 — 393,144 393,198 2,931 — 2,937 396,135 
Land development— 38 15,786 15,824 — — 118 118 15,942 
Total real estate – commercial mortgage368 38 626,780 627,186 2,931 138 2,069 5,138 632,324 
Installment loans to individuals1,107 — 30,162 31,269 16 — 76 92 31,361 
Loans, net of unearned income$3,387 $38 $951,722 $955,147 $4,228 $4,105 $11,089 $19,422 $974,569 

22

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

There were no restructured loans contractually 90 days past due or more and still accruing at March 31, 2022 or March 31, 2021. The outstanding balance of restructured loans on nonaccrual status was $9,944 and 19,140 at March 31, 2022 and March 31, 2021, 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 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
Three months ended March 31, 2022
Real estate – 1-4 family mortgage:
Land development$98 $94 
Three months ended March 31, 2021
Commercial, financial, agricultural$135 $135 

With respect to loans that were restructured during the three months ended March 31, 2022 and March 31, 2021, none have subsequently defaulted as of the date of this report.


23

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, 202238 $5,609 
Additional advances or loans with concessions110 
Reclassified as performing restructured loan302 
Reductions due to:
Reclassified to nonperforming loans(2)(41)
Paid in full(2)(1,596)
Charge-offs— — 
Principal paydowns— (44)
Totals at March 31, 202240 $4,340 

The allowance for credit losses attributable to restructured loans was $69 and $167 at March 31, 2022 and March 31, 2021, respectively. The Company had no remaining availability under commitments to lend additional funds on these restructured loans at March 31, 2022, as compared to $153 in remaining availability at March 31, 2021.


24

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 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
 20222021202020192018PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
March 31, 2022
Commercial, Financial, Agricultural$ $ $ $629 $6,149 $33,798 $67,658 $1,134 $109,368 
Pass— — — 629 5,569 25,590 66,049 740 98,577 
Special Mention— — — — 239 — — — 239 
Substandard— — — — 341 8,208 1,609 394 10,552 
Real Estate - Construction$ $ $ $ $575 $4,549 $ $ $5,124 
Residential$— $— $— $— $575 $684 $— $— $1,259 
Pass— — — — 575 684 — — 1,259 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Commercial$— $— $— $— $— $3,865 $— $— $3,865 
Pass— — — — — 3,865 — — 3,865 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Real Estate - 1-4 Family Mortgage$ $ $ $152 $9,106 $32,889 $903 $191 $43,241 
Primary$— $— $— $35 $2,317 $12,126 $158 $— $14,636 
Pass— — — 35 2,317 9,148 158 — 11,658 
Special Mention— — — — — 56 — — 56 
Substandard— — — — — 2,922 — — 2,922 
Home Equity$— $— $— $— $— $38 $590 $191 $819 
Pass— — — — — 38 590 — 628 
Special Mention— — — — — — — — — 
Substandard— — — — — — — 191 191 
Rental/Investment$— $— $— $117 $314 $18,108 $155 $— $18,694 
Pass— — — 117 314 17,367 — 17,803 
Special Mention— — — — — — — — — 
Substandard— — — — — 741 150 — 891 
Land Development$— $— $— $— $6,475 $2,617 $— $— $9,092 
Pass— — — — 6,475 1,285 — — 7,760 
Special Mention— — — — — — — — — 
Substandard— — — — — 1,332 — — 1,332 
25

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
 Term Loans Amortized Cost Basis by Origination Year
 20222021202020192018PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
Real Estate - Commercial Mortgage$ $ $ $322 $49,086 $566,330 $1,758 $14,136 $631,632 
Owner-Occupied$— $— $— $— $13,054 $206,267 $926 $— $220,247 
Pass— — — — 13,054 189,182 926 — 203,162 
Special Mention— — — — — 1,918 — — 1,918 
Substandard— — — — — 15,167 — — 15,167 
Non-Owner Occupied$— $— $— $322 $35,628 $345,803 $246 $14,136 $396,135 
Pass— — — 322 19,250 311,334 246 4,281 335,433 
Special Mention— — — — 16,372 — — — 16,372 
Substandard— — — — 34,469 — 9,855 44,330 
Land Development$— $— $— $— $404 $14,260 $586 $— $15,250 
Pass— — — — 404 8,446 586 — 9,436 
Special Mention— — — — — 5,083 — — 5,083 
Substandard— — — — — 731 — — 731 
Installment loans to individuals$ $ $ $ $ $ $ $ $ 
Pass— — — — — — — — — 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total loans subject to risk rating$ $ $ $1,103 $64,916 $637,566 $70,319 $15,461 $789,365 
Pass— — — 1,103 47,958 566,939 68,560 5,021 689,581 
Special Mention— — — — 16,611 7,057 — — 23,668 
Substandard— — — — 347 63,570 1,759 10,440 76,116 

 Term Loans Amortized Cost Basis by Origination Year
 20212020201920182017PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
December 31, 2021
Commercial, Financial, Agricultural$ $ $646 $12,199 $12,247 $25,562 $38,328 $1,326 $90,308 
Pass— — 646 11,612 8,918 18,877 37,555 899 78,507 
Special Mention— — — 246 — — — — 246 
Substandard— — — 341 3,329 6,685 773 427 11,555 
Real Estate - Construction$ $ $ $601 $ $4,393 $ $ $4,994 
Residential$— $— $— $601 $— $686 $— $— $1,287 
Pass— — — 601 — 686 — — 1,287 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Commercial$— $— $— $— $— $3,707 $— $— $3,707 
Pass— — — — — 3,707 — — 3,707 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
26

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




27

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
The following tables present 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
 20222021202020192018PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
March 31, 2022
Commercial, Financial, Agricultural$ $ $ $ $ $ $ $ $ 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Real Estate - Construction$ $ $ $ $ $ $ $ $ 
Residential$— $— $— $— $— $— $— $— $— 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Commercial$— $— $— $— $— $— $— $— $— 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Real Estate - 1-4 Family Mortgage$ $ $ $200 $1,079 $110,964 $39,583 $1,325 $153,151 
Primary$— $— $— $200 $538 $106,613 $— $76 $107,427 
Performing Loans— — — 200 429 101,584 — 76 102,289 
Non-Performing Loans— — — — 109 5,029 — — 5,138 
Home Equity$— $— $— $— $541 $4,047 $39,583 $1,249 $45,420 
Performing Loans— — — — 541 3,994 39,011 1,120 44,666 
Non-Performing Loans— — — — — 53 572 129 754 
Rental/Investment$— $— $— $— $— $— $— $— $— 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Land Development$— $— $— $— $— $304 $— $— $304 
Performing Loans— — — — — 304 — — 304 
Non-Performing Loans— — — — — — — — — 
Real Estate - Commercial Mortgage$ $ $ $ $145 $547 $ $ $692 
Owner-Occupied$— $— $— $— $— $— $— $— $— 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Non-Owner Occupied$— $— $— $— $— $— $— $— $— 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Land Development$— $— $— $— $145 $547 $— $— $692 
Performing Loans— — — — 145 547 — — 692 
Non-Performing Loans— — — — — — — — — 
Installment loans to individuals$ $ $ $ $17,963 $11,983 $1,391 $24 $31,361 
Performing Loans— — — — 17,959 11,912 1,378 20 31,269 
Non-Performing Loans— — — — 71 13 92 
Total loans not subject to risk rating$ $ $ $200 $19,187 $123,494 $40,974 $1,349 $185,204 
Performing Loans— — — 200 19,074 118,341 40,389 1,216 179,220 
Non-Performing Loans— — — — 113 5,153 585 133 5,984 
28

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
 Term Loans Amortized Cost Basis by Origination Year
 20212020201920182017PriorRevolving LoansRevolving Loans Converted to TermTotal
Loans
December 31, 2021
Commercial, Financial, Agricultural$ $ $ $ $ $ $ $ $ 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Real Estate - Construction$ $ $ $ $ $ $ $ $ 
Residential$— $— $— $— $— $— $— $— $— 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Commercial$— $— $— $— $— $— $— $— $— 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Real Estate - 1-4 Family Mortgage$ $ $202 $1,480 $19,988 $101,060 $44,086 $1,355 $168,171 
Primary$— $— $202 $938 $17,505 $98,961 $— $81 $117,687 
Performing Loans— — 202 829 16,902 94,607 — 81 112,621 
Non-Performing Loans— — — 109 603 4,354 — — 5,066 
Home Equity$— $— $— $542 $2,441 $1,823 $44,086 $1,274 $50,166 
Performing Loans— — — 542 2,441 1,769 43,700 1,141 49,593 
Non-Performing Loans— — — — — 54 386 133 573 
Rental/Investment$— $— $— $— $— $— $— $— $— 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Land Development$— $— $— $— $42 $276 $— $— $318 
Performing Loans— — — — 42 276 — — 318 
Non-Performing Loans— — — — — — — — — 
Real Estate - Commercial Mortgage$ $ $ $147 $31 $558 $ $ $736 
Owner-Occupied$— $— $— $— $— $— $— $— $— 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Non-Owner Occupied$— $— $— $— $— $— $— $— $— 
Performing Loans— — — — — — — — — 
Non-Performing Loans— — — — — — — — — 
Land Development$— $— $— $147 $31 $558 $— $— $736 
Performing Loans— — — 147 31 558 — — 736 
Non-Performing Loans— — — — — — — — — 
Installment loans to individuals$ $ $ $20,581 $9,721 $3,881 $1,558 $34 $35,775 
Performing Loans— — — 20,566 9,714 3,684 1,541 23 35,528 
Non-Performing Loans— — — 15 197 17 11 247 
Total loans not subject to risk rating$ $ $202 $22,208 $29,740 $105,499 $45,644 $1,389 $204,682 
Performing Loans— — 202 22,084 29,130 100,894 45,241 1,245 198,796 
Non-Performing Loans— — — 124 610 4,605 403 144 5,886 

 

29

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:
 
March 31,
2022
December 31, 2021
Commercial, financial, agricultural (1)
$1,445,607 $1,423,270 
Lease financing94,954 80,192 
Real estate – construction:
Residential306,655 302,275 
Commercial915,397 802,621 
Total real estate – construction1,222,052 1,104,896 
Real estate – 1-4 family mortgage:
Primary1,925,813 1,816,120 
Home equity470,665 474,604 
Rental/investment292,811 288,474 
Land development151,690 145,048 
Total real estate – 1-4 family mortgage2,840,979 2,724,246 
Real estate – commercial mortgage:
Owner-occupied1,538,693 1,563,351 
Non-owner occupied2,907,116 2,856,947 
Land development132,055 128,739 
Total real estate – commercial mortgage4,577,864 4,549,037 
Installment loans to individuals137,115 143,340 
Gross loans10,318,571 10,024,981 
Unearned income(5,112)(4,067)
Loans, net of unearned income10,313,459 10,020,914 
Allowance for credit losses on loans(166,468)(164,171)
Net loans$10,146,991 $9,856,743 

(1)Includes Paycheck Protection Program (“PPP”) loans of $8,382 and $58,391 as of March 31, 2022 and December 31, 2021, respectively.

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 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. For more information about the Company’s policies and procedures for determining the amount of 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, 2021.
The Company has made an accounting policy election to exclude accrued interest from the measurement of the allowance for credit losses in the Company’s loan portfolio. As of March 31, 2022 and December 31, 2021, the Company had accrued interest receivable for loans of $40,409 and $41,692, respectively, which is recorded in the “Other assets” line item on the Consolidated Balance Sheets. Although the Company made the election to exclude accrued interest from the measurement of the allowance
30

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
for credit losses, the Company did have an allowance for credit losses on interest deferred as part of the loan deferral program of $1,266 and $1,273, respectively, as of March 31, 2022 and December 31, 2021.
The following 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:
CommercialReal Estate -
Construction
Real Estate -
1-4 Family
Mortgage
Real Estate  -
Commercial
Mortgage
Lease FinancingInstallment
Loans to Individuals
Total
Three Months Ended March 31, 2022
Allowance for credit losses:
Beginning balance$33,922 $16,419 $32,356 $68,940 $1,486 $11,048 $164,171 
Impact of PCD loans acquired during the period1,648 — — — — — 1,648 
Charge-offs(2,102)— (163)(6)(7)(779)(3,057)
Recoveries1,136 — 178 155 12 725 2,206 
Net (charge-offs) recoveries(966)— 15 149 (54)(851)
Provision for credit losses on loans(998)1,992 4,477 (3,858)91 (204)1,500 
Ending balance$33,606 $18,411 $36,848 $65,231 $1,582 $10,790 $166,468 
Period-End Amount Allocated to:
Individually evaluated$9,225 $— $396 $2,660 $— $570 $12,851 
Collectively evaluated 24,381 18,411 36,452 62,571 1,582 10,220 153,617 
Ending balance$33,606 $18,411 $36,848 $65,231 $1,582 $10,790 $166,468 
Loans:
Individually evaluated$13,070 $— $4,477 $15,464 $— $570 $33,581 
Collectively evaluated 1,432,537 1,222,052 2,836,502 4,562,400 89,842 136,545 10,279,878 
Ending balance$1,445,607 $1,222,052 $2,840,979 $4,577,864 $89,842 $137,115 $10,313,459 
Nonaccruing loans with no allowance for credit losses$435 $— $2,614 $5,298 $— $$8,349 


31

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
CommercialReal Estate -
Construction
Real Estate -
1-4 Family
Mortgage
Real Estate  -
Commercial
Mortgage
Lease FinancingInstallment Loans to IndividualsTotal
Three Months Ended March 31, 2021
Allowance for credit losses:
Beginning balance$39,031 $16,047 $32,165 $76,127 $1,624 $11,150 $176,144 
Charge-offs(3,498)(52)(101)(61)— (1,658)(5,370)
Recoveries289 13 261 171 11 1,587 2,332 
Net (charge-offs) recoveries(3,209)(39)160 110 11 (71)(3,038)
Provision for credit losses on loans1,770 (1,031)(631)(12)(89)(7)— 
Ending balance$37,592 $14,977 $31,694 $76,225 $1,546 $11,072 $173,106 
Period-End Amount Allocated to:
Individually evaluated$9,908 $— $232 $4,846 $— $607 $15,593 
Collectively evaluated27,684 14,977 31,462 71,379 1,546 10,465 157,513 
Ending balance$37,592 $14,977 $31,694 $76,225 $1,546 $11,072 $173,106 
Loans:
Individually evaluated$15,435 $— $6,311 $18,508 $— $621 $40,875 
Collectively evaluated2,233,852 955,918 2,679,750 4,530,519 75,256 172,238 10,647,533 
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$1,848 $— $4,695 $2,113 $— $— $8,656 
 
The Company recorded a provision for credit losses of $1,500 during the first quarter of 2022, as compared to no provision for credit losses recorded in the first quarter of 2021. The Company’s allowance for credit losses model considers economic projections, primarily the national unemployment rate and GDP, over a reasonable and supportable period of two years. The provision activity during the current quarter was primarily driven by strong loan growth during the quarter and the acquisition of Southeastern Commercial Finance, LLC.
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. For more information about the Company’s policies and procedures for determining the amount of the allowance for credit losses on unfunded loan commitments, 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, 2021.
The following table provides a roll-forward of the allowance for credit losses on unfunded loan commitments for the periods presented.
Three Months Ended March 31,20222021
Allowance for credit losses on unfunded loan commitments:
Beginning balance$20,035 $20,535 
(Recovery of) provision for credit losses on unfunded loan commitments (included in other noninterest expense) (550)— 
Ending balance$19,485 $20,535 

32

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Note 6 – Other Real Estate Owned
(In Thousands)

The following table provides details of the Company’s other real estate owned (“OREO”) purchased and non purchased, net of
valuation allowances and direct write-downs, as of the dates presented:
 
Purchased OREONon Purchased OREOTotal
OREO
March 31, 2022
Residential real estate$44 $332 $376 
Commercial real estate39 136 175 
Residential land development291 295 
Commercial land development1,157 59 1,216 
Total$1,531 $531 $2,062 
December 31, 2021
Residential real estate$93 $166 $259 
Commercial real estate39 722 761 
Residential land development301 305 
Commercial land development1,156 59 1,215 
Total$1,589 $951 $2,540 

Changes in the Company’s purchased and non purchased OREO were as follows:
 
Purchased
OREO
Non Purchased OREOTotal
OREO
Balance at January 1, 2022$1,589 $951 $2,540 
Transfers of loans36 164 200 
Impairments(14)— (14)
Dispositions(79)(586)(665)
Other(1)
Balance at March 31, 2022$1,531 $531 $2,062 

At March 31, 2022 and December 31, 2021, the amortized cost of loans secured by Real Estate - 1-4 Family Mortgage in the process of foreclosure was $2,069 and $22, respectively.
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
 March 31,
 20222021
Repairs and maintenance$$20 
Property taxes and insurance35 11 
Impairments14 70 
Net gains on OREO sales(291)(56)
Rental income(2)(4)
Total$(241)$41 



33

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Note 7 – Goodwill and Other Intangible Assets
(In Thousands)
The carrying amounts of goodwill by operating segments for the three months ended March 31, 2022 were as follows:
 Community BanksInsuranceTotal
Balance at January 1, 2022$936,916 $2,767 $939,683 
Additions to goodwill from the Southeastern Commercial Finance, LLC acquisition6,608 — 6,608 
Balance at March 31, 2022$943,524 $2,767 $946,291 

The following table provides a summary of finite-lived intangible assets as of the dates presented:
 
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
March 31, 2022
Core deposit intangibles$82,492 $(60,720)$21,772 
Customer relationship intangible2,470 (1,511)959 
Total finite-lived intangible assets$84,962 $(62,231)$22,731 
December 31, 2021
Core deposit intangibles$82,492 $(59,399)$23,093 
Customer relationship intangible2,470 (1,465)1,005 
Total finite-lived intangible assets$84,962 $(60,864)$24,098 

Current year amortization expense for finite-lived intangible assets is presented in the table below.
Three Months Ended
March 31,
20222021
Amortization expense for:
  Core deposit intangibles$1,321 $1,553 
  Customer relationship intangible45 45 
Total intangible amortization$1,366 $1,598 

The estimated amortization expense of finite-lived intangible assets for the year ending December 31, 2022 and the succeeding four years is summarized as follows:
Core Deposit IntangiblesCustomer Relationship IntangibleTotal
2022$4,941 $181 $5,122 
20234,044 181 4,225 
20243,498 181 3,679 
20253,102 181 3,283 
20262,899 138 3,037 

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
34

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
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. For example, an increase in mortgage interest rates or a decrease in actual prepayment speeds may cause positive adjustments to the valuation of the Company’s MSRs.
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 was no valuation adjustment on MSRs during the three months ended March 31, 2022. During the three months ended March 31, 2021, there was a positive valuation adjustment of $13,561 which was caused primarily by an increase in mortgage interest rates and a corresponding decrease in actual prepayment speeds.
Changes in the Company’s MSRs were as follows: 
Balance at January 1, 2022$89,018 
Capitalization6,603 
Amortization(3,891)
Balance at March 31, 2022$91,730 

Data and key economic assumptions related to the Company’s MSRs are as follows as of the dates presented:
 
March 31, 2022December 31, 2021
Unpaid principal balance$8,931,901 $8,728,629 
Weighted-average prepayment speed (CPR)6.71 %10.56 %
Estimated impact of a 10% increase$(5,883)$(3,875)
Estimated impact of a 20% increase(11,291)(7,464)
Discount rate9.68 %9.82 %
Estimated impact of a 10% increase$(1,477)$(4,153)
Estimated impact of a 20% increase(3,264)(8,119)
Weighted-average coupon interest rate3.27 %3.29 %
Weighted-average servicing fee (basis points)30.47 30.37 
Weighted-average remaining maturity (in years)8.466.69

The Company recorded servicing fees of $4,423 and $4,071 for the three months ended March 31, 2022 and 2021, respectively, all of which are included in “Mortgage banking income” in the Consolidated Statements of Income.

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 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:
35

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
 
Pension BenefitsOther Benefits
Three Months EndedThree Months Ended
 March 31,March 31,
 2022202120222021
Service cost $— $— $$
Interest cost184 166 
Expected return on plan assets(421)(443)— — 
Recognized actuarial loss (gain)61 54 (19)— 
Net periodic (return) benefit cost $(176)$(223)$(15)$
 
Incentive Compensation Plans
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 no stock options granted, nor compensation expense associated with options recorded, during the three months ended March 31, 2022 or 2021. There were no stock options outstanding as of March 31, 2022.
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 three months ended March 31, 2022:

Performance-Based Restricted StockWeighted Average Grant-Date Fair ValueTime-Based Restricted StockWeighted Average Grant-Date Fair Value
Nonvested at beginning of period146,561 $34.67 603,714 $34.48 
Awarded63,308 38.62 252,719 38.32 
Vested— — (139,711)31.08 
Cancelled— — (2,000)35.85 
Nonvested at end of period209,869 $35.86 714,722 $36.50 

During the three months ended March 31, 2022, the Company reissued 124,433 shares from treasury in connection with awards of restricted stock. The Company recorded total stock-based compensation expense of $3,338 and $2,756 for the three months ended March 31, 2022 and 2021, respectively.

Note 10 – Derivative Instruments
(In Thousands)
The Company uses certain derivative instruments to meet the needs of customers as well as to manage the interest rate risk associated with certain transactions.
Non-hedge derivatives
The Company enters into derivative instruments that are not designated as hedging instruments to help its commercial customers manage their exposure to interest rate fluctuations. To mitigate the interest rate risk associated with these customer contracts, the Company enters into an offsetting derivative contract position. The Company manages its credit risk, or potential risk of default by its commercial customers, through credit limit approval and monitoring procedures.
The Company enters into interest rate lock commitments with its customers to mitigate the interest rate risk associated with the commitments to fund fixed-rate residential mortgage loans. The Company also enters into forward commitments to sell residential mortgage loans to secondary market investors.
The following table provides a summary of the Company’s derivatives not designated as hedging instruments as of the dates presented:
36

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
 Balance SheetMarch 31, 2022December 31, 2021
 LocationNotional AmountFair ValueNotional AmountFair Value
Derivative assets:
  Interest rate contractsOther Assets$179,648 $3,662 $185,447 $4,711 
  Interest rate lock commitmentsOther Assets130,896 2,032 310,941 5,304 
Forward commitmentsOther Assets436,000 10,216 280,000 667 
Totals$746,544 $15,910 $776,388 $10,682 
Derivative liabilities:
  Interest rate contractsOther Liabilities$179,648 $3,662 $185,447 $4,711 
Interest rate lock commitmentsOther Liabilities160,820 2,594 19,961 43 
  Forward commitmentsOther Liabilities35,000 97 320,000 736 
Totals$375,468 $6,353 $525,408 $5,490 
Gains and losses included in the Consolidated Statements of Income related to the Company’s derivative financial instruments were as follows as of the dates presented:
Three Months Ended March 31,
 20222021
Interest rate contracts:
Included in interest income on loans$305 $370 
Interest rate lock commitments:
Included in mortgage banking income(5,823)(8,322)
Forward commitments
Included in mortgage banking income10,188 18,803 
Total$4,670 $10,851 
Derivatives designated as cash flow hedges
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, 2022, 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 as of the dates presented:
 Balance SheetMarch 31, 2022December 31, 2021
 LocationNotional AmountFair ValueNotional AmountFair Value
Derivative assets:
  Interest rate swapsOther Assets$100,000 $13,486 $100,000 $7,016 
Derivative liabilities:
  Interest rate swapsOther Liabilities$30,000 $816 $62,000 $2,902 
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 three months ended March 31, 2022 or 2021. The impact on other comprehensive income for the three months ended March 31, 2022 and 2021 is discussed in Note 13, “Other Comprehensive Income (Loss).”
Derivatives designated as fair value hedges
37

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 SheetMarch 31, 2022December 31, 2021
 LocationNotional AmountFair ValueNotional AmountFair Value
Derivative liabilities:
  Interest rate swapsOther Liabilities$100,000 $11,754 $100,000 $5,411 
The following table presents the effects of the Company’s fair value hedge relationships on the Consolidated Statements of Income for the periods presented:
 Amount of Gain (Loss) Recognized in Income
Income StatementThree Months Ended March 31,
 Location20222021
Derivative liabilities:
  Interest rate swaps - subordinated notesInterest Expense$(6,343)$(7,650)
Derivative liabilities - hedged items:
  Interest rate swaps - subordinated notesInterest Expense$6,343 $7,650 
The following table presents the amounts that were recorded in the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges as of the dates presented:
Carrying Amount of the Hedged LiabilityCumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Liability
Balance Sheet LocationMarch 31, 2022December 31, 2021March 31, 2022December 31, 2021
Long-term debt$86,786 $93,085 $11,754 $5,411 
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 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 AssetsOffsetting Derivative Liabilities
March 31,
2022
December 31, 2021March 31,
2022
December 31, 2021
Gross amounts recognized$26,694 $8,007 $13,337 $13,436 
Gross amounts offset in the Consolidated Balance Sheets— — — — 
Net amounts presented in the Consolidated Balance Sheets26,694 8,007 13,337 13,436 
Gross amounts not offset in the Consolidated Balance Sheets
Financial instruments12,382 7,208 12,382 7,208 
Financial collateral pledged— — 955 6,228 
Net amounts$14,312 $799 $— $— 
38

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.

March 31,December 31,
20222021
Deferred tax assets
Allowance for credit losses$50,421 $50,712 
Loans2,602 2,855 
Deferred compensation10,777 14,522 
Net unrealized losses on securities35,769 3,545 
Impairment of assets394 392 
Net operating loss carryforwards1,035 1,211 
Investment in partnerships930 890 
Lease liabilities under operating leases15,423 17,106 
Other4,179 3,241 
Total deferred tax assets121,530 94,474 
Deferred tax liabilities
Fixed assets5,734 5,339 
Mortgage servicing rights21,470 20,779 
Junior subordinated debt2,093 2,130 
Intangibles3,005 3,177 
Lease right-of-use asset14,696 16,209 
Other1,722 1,607 
Total deferred tax liabilities48,720 49,241 
Net deferred tax assets$72,810 $45,233 

For the three months ended March 31, 2022 and 2021, the Company recorded a provision for income taxes totaling $7,935 and $16,842, 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 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 state departments of revenue for the years ending December 31, 2018 through December 31, 2020.

Note 12 – Fair Value Measurements
(In Thousands)
Fair Value Measurements and the Fair Level Hierarchy
FASB Accounting Standards Codification Topic (“ASC”) 820, “Fair Value Measurements and Disclosures,” provides guidance for using fair value to measure assets and liabilities and 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).
39

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
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 and mortgage-backed securities. Where quoted market prices in active markets are available, securities are classified within Level 1 of the fair value hierarchy. If quoted prices from active markets are not available, fair values are based on quoted market prices for similar instruments traded in active markets, quoted market prices for identical or similar instruments traded in markets that are not active, or model-based valuation techniques where all significant assumptions are observable in the market. Such instruments are classified within Level 2 of the fair value hierarchy. When assumptions used in model-based valuation techniques are not observable in the market, the assumptions used by 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 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 tables present assets and liabilities that are measured at fair value on a recurring basis as of the dates presented:
 
Level 1Level 2Level 3Totals
March 31, 2022
Financial assets:
Securities available for sale$— $2,405,316 $— $2,405,316 
Derivative instruments— 29,396 — 29,396 
Mortgage loans held for sale in loans held for sale— 280,464 — 280,464 
Total financial assets$— $2,715,176 $— $2,715,176 
Financial liabilities:
Derivative instruments:$— $18,923 $— $18,923 

40

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Level 1Level 2Level 3Totals
December 31, 2021
Financial assets:
Securities available for sale— 2,386,052 — 2,386,052 
Derivative instruments— 17,698 — 17,698 
Mortgage loans held for sale in loans held for sale— 453,533 — 453,533 
Total financial assets$— $2,857,283 $— $2,857,283 
Financial liabilities:
Derivative instruments$— $13,803 $— $13,803 

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 three months ended March 31, 2022.
The following table provides 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:
 
 2021
Three Months Ended March 31, 2022Trust preferred
securities
Three Months Ended March 31,
Balance at beginning of period$9,012 
   Accretion included in net income
   Unrealized losses included in other comprehensive income941 
   Realized losses2,061 
   Sales(12,021)
Balance at end of period$— 
 
For each of the three months ended March 31, 2022 and 2021, 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.

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. The following 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:
 
March 31, 2022Level 1Level 2Level 3Totals
Individually evaluated loans, net of allowance for credit losses$— $— $3,111 $3,111 
OREO— — 2,062 2,062 
Total$— $— $5,173 $5,173 
 
December 31, 2021Level 1Level 2Level 3Totals
Individually evaluated loans, net of allowance for credit losses$— $— $7,928 $7,928 
OREO— — 2,540 2,540 
Total$— $— $10,468 $10,468 

41

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
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:

Individually evaluated loans: Loans are individually evaluated for 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 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. 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. Individually evaluated loans that were measured or re-measured at fair value had a carrying value of $6,466 and $12,939 at March 31, 2022 and December 31, 2021, respectively, and a specific reserve for these loans of $3,355 and $5,011 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:
 
March 31,
2022
December 31, 2021
Carrying amount prior to remeasurement$2,076 $2,556 
Impairment recognized in results of operations(14)(16)
Fair value$2,062 $2,540 

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 March 31, 2022 and December 31, 2021. There were no valuation adjustments on MSRs during the three months ended March 31, 2022 and $13,561 of positive valuation adjustments recognized during the three months ended March 31, 2021.
The following table presents information as of March 31, 2022 about significant unobservable inputs (Level 3) used in the valuation of assets measured at fair value on a nonrecurring basis:
 
Financial instrumentFair
Value
Valuation TechniqueSignificant
Unobservable Inputs
Range of Inputs
Individually evaluated loans, net of allowance for credit losses$3,111 Appraised value of collateral less estimated costs to sellEstimated costs to sell
4-10%
OREO$2,062 Appraised value of property less estimated costs to sellEstimated costs to sell
4-10%

Fair Value Option
The Company has elected to measure all mortgage loans held for sale 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 $13,021 and $12,231 resulting from fair value changes of these mortgage loans were recorded in income during the three months ended March 31, 2022 and 2021, respectively. The amount does not reflect changes in fair values of related
42

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
derivative instruments used to hedge exposure to market-related risks associated with these mortgage loans. The change in fair value of both mortgage loans held for sale and the related derivative instruments are recorded in “Mortgage banking income” in the Consolidated Statements of Income.
The Company’s valuation of mortgage loans held for sale incorporates an assumption for credit risk; however, given the short-term period that the Company holds these loans, valuation adjustments attributable to instrument-specific credit risk is nominal. Interest income on mortgage loans held for sale measured at fair value is accrued as it is earned based on contractual rates and is reflected in loan interest income on the Consolidated Statements of Income.
The following table summarizes the differences between the fair value and the principal balance for mortgage loans held for sale measured at fair value as of March 31, 2022 and December 31, 2021:
 
Aggregate
Fair Value
Aggregate
Unpaid
Principal
Balance
Difference
March 31, 2022
Mortgage loans held for sale measured at fair value$280,464 $281,669 $(1,205)
December 31, 2021
Mortgage loans held for sale measured at fair value$453,533 $441,717 $11,816 

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 March 31, 2022Carrying
Value
Level 1Level 2Level 3Total
Financial assets
Cash and cash equivalents$1,607,493 $1,607,493 $— $— $1,607,493 
Securities available for sale2,405,316 — 2,405,316 — 2,405,316 
Loans held for sale280,464 — 280,464 — 280,464 
Loans, net10,146,991 — — 9,860,650 9,860,650 
Mortgage servicing rights91,730 — — 131,896 131,896 
Derivative instruments29,396 — 29,396 — 29,396 
Financial liabilities
Deposits$13,990,897 $12,650,868 $1,321,023 $— $13,971,891 
Short-term borrowings111,279 111,279 — — 111,279 
Federal Home Loan Bank advances408 — 409 — 409 
Junior subordinated debentures111,518 — 104,427 — 104,427 
Subordinated notes323,490 — 322,900 — 322,900 
Derivative instruments18,923 — 18,923 — 18,923 
 
43

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
  Fair Value
As of December 31, 2021Carrying
Value
Level 1Level 2Level 3Total
Financial assets
Cash and cash equivalents$1,877,965 $1,877,965 $— $— $1,877,965 
Securities available for sale2,386,052 — 2,386,052 — 2,386,052 
Loans held for sale453,533 — 453,533 — 453,533 
Loans, net9,856,743 — — 9,690,604 9,690,604 
Mortgage servicing rights89,018 — — 99,425 99,425 
Derivative instruments17,698 — 17,698 — 17,698 
Financial liabilities
Deposits$13,905,724 $12,494,342 $1,408,397 $— $13,902,739 
Short-term borrowings13,947 13,947 — — 13,947 
Federal Home Loan Bank advances417 — 422 — 422 
Junior subordinated debentures111,373 — 106,682 — 106,682 
Subordinated notes359,419 — 373,950 — 373,950 
Derivative instruments13,803 — 13,803 — 13,803 
44

Renasant Corporation and Subsidiaries
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-TaxTax Expense
(Benefit)
Net of Tax
Three months ended March 31, 2022
Securities available for sale:
Unrealized holding losses on securities$(134,756)$(34,294)$(100,462)
Amortization of unrealized holding gains on securities transferred to the held to maturity category(99)(25)(74)
Total securities available for sale(134,855)(34,319)(100,536)
Derivative instruments:
Unrealized holding gains on derivative instruments8,556 2,177 6,379 
Total derivative instruments8,556 2,177 6,379 
Defined benefit pension and post-retirement benefit plans:
Amortization of net actuarial loss recognized in net periodic pension cost42 11 31 
Total defined benefit pension and post-retirement benefit plans42 11 31 
Total other comprehensive loss$(126,257)$(32,131)$(94,126)
Three months ended March 31, 2021
Securities available for sale:
Unrealized holding losses on securities$(20,044)$(5,101)$(14,943)
Reclassification adjustment for gains realized in net income(1,357)(345)(1,012)
Total securities available for sale(21,401)(5,446)(15,955)
Derivative instruments:
Unrealized holding gains on derivative instruments14,734 3,750 10,984 
Total derivative instruments14,734 3,750 10,984 
Defined benefit pension and post-retirement benefit plans:
Amortization of net actuarial loss recognized in net periodic pension cost54 12 42 
Total defined benefit pension and post-retirement benefit plans54 12 42 
Total other comprehensive loss$(6,613)$(1,684)$(4,929)

The accumulated balances for each component of other comprehensive income, net of tax, were as follows as of the dates presented:
 
March 31,
2022
December 31, 2021
Unrealized losses on securities$(109,652)$(9,116)
Unrealized gains on derivative instruments10,342 3,963 
Unrecognized losses on defined benefit pension and post-retirement benefit plans obligations(5,259)(5,290)
Total accumulated other comprehensive loss$(104,569)$(10,443)
45

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, 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
 March 31,
 20222021
Basic
Net income applicable to common stock$33,547 $57,908 
Average common shares outstanding55,809,192 56,240,201 
Net income per common share - basic$0.60 $1.03 
Diluted
Net income applicable to common stock$33,547 $57,908 
Average common shares outstanding55,809,192 56,240,201 
Effect of dilutive stock-based compensation272,671 278,998 
Average common shares outstanding - diluted56,081,863 56,519,199 
Net income per common share - diluted$0.60 $1.02 
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
 March 31,
 20222021
Number of shares2,2001,875

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:
46

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
Capital TiersTier 1 Capital to
Average Assets
(Leverage)
Common Equity Tier 1 to
Risk - Weighted Assets
Tier 1 Capital to
Risk - Weighted
Assets
 Total Capital to
Risk - Weighted
Assets
Well capitalized
5% or above
6.5% or above
 
8% or above
 
10% or above
Adequately capitalized
4% or above
4.5% or above
 
6% or above
 
8% or above
Undercapitalized
Less than 4%
Less than 4.5%
 
Less than 6%
 
Less than 8%
Significantly undercapitalized
Less than 3%
Less than 3%
 
Less than 4%
 
Less than 6%
Critically undercapitalized
 Tangible Equity / Total Assets less than 2%

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:

 March 31, 2022December 31, 2021
 AmountRatioAmountRatio
Renasant Corporation
Tier 1 Capital to Average Assets (Leverage)$1,424,268 9.00 %$1,422,077 9.15 %
Common Equity Tier 1 Capital to Risk-Weighted Assets1,316,342 10.78 %1,314,295 11.18 %
Tier 1 Capital to Risk-Weighted Assets1,424,268 11.67 %1,422,077 12.10 %
Total Capital to Risk-Weighted Assets1,892,630 15.50 %1,897,167 16.14 %
Renasant Bank
Tier 1 Capital to Average Assets (Leverage)$1,581,608 10.00 %$1,580,904 10.18 %
Common Equity Tier 1 Capital to Risk-Weighted Assets1,581,608 12.95 %1,580,904 13.46 %
Tier 1 Capital to Risk-Weighted Assets1,581,608 12.95 %1,580,904 13.46 %
Total Capital to Risk-Weighted Assets1,714,725 14.04 %1,697,163 14.44 %

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 March 31, 2022, the Company’s CET1 capital was in excess of the capital conservation buffer.

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. The three-year transitional period began on January 1, 2022.

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.
The Wealth Management segment, through the Trust division, offers a broad range of fiduciary services including the administration (as trustee or in other fiduciary or representative capacities) of benefit plans, management of trust accounts,
47

Renasant Corporation and Subsidiaries
Notes to Consolidated Financial Statements (Unaudited)
inclusive of personal and corporate benefit accounts, and custodial accounts, as well as accounting and money management for trust accounts. In addition, the Wealth Management segment, 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.
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 tables provide financial information for the Company’s operating segments as of and for the periods presented:
Community
Banks
InsuranceWealth
Management
OtherConsolidated
Three months ended March 31, 2022
Net interest income (loss)$103,932 $93 $490 $(4,886)$99,629 
Provision for credit losses1,500 — — — 1,500 
Noninterest income (loss)28,306 3,097 6,505 (450)37,458 
Noninterest expense86,871 2,116 4,755 363 94,105 
Income (loss) before income taxes43,867 1,074 2,240 (5,699)41,482 
Income tax expense (benefit)9,131 281 — (1,477)7,935 
Net income (loss)$34,736 $793 $2,240 $(4,222)$33,547 
Total assets$16,757,670 $33,794 $64,761 $7,532 $16,863,757 
Goodwill$943,524 $2,767 $— $— $946,291 
Three months ended March 31, 2021
Net interest income (loss)$112,948 $107 $384 $(3,791)$109,648 
Provision for credit losses— — — — — 
Noninterest income (loss)73,070 3,248 5,171 (452)81,037 
Noninterest expense (benefit)109,586 1,923 4,101 325 115,935 
Income (loss) before income taxes76,432 1,432 1,454 (4,568)74,750 
Income tax expense (benefit)17,656 367 — (1,181)16,842 
Net income (loss)$58,776 $1,065 $1,454 $(3,387)$57,908 
Total assets$15,525,500 $31,004 $64,320 $1,747 $15,622,571 
Goodwill$936,916 $2,767 $— $— $939,683 
48

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 of future performance and involve risks and uncertainties and, accordingly, investors should not place undue reliance on these forward-looking statements, which speak only as of the date they are made.
Important factors currently known to management that could cause our actual results to differ materially from those in forward-looking statements include the following: (i) the Company’s ability to efficiently integrate acquisitions 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; (ii) the effect of economic conditions and interest rates on a national, regional or international basis; (iii) timing and success of the implementation of changes in operations to achieve enhanced earnings or effect cost savings; (iv) competitive pressures in the consumer finance, commercial finance, insurance, financial services, asset management, retail banking, mortgage lending and auto lending industries; (v) the financial resources of, and products available from, competitors; (vi) changes in laws and regulations as well as changes in accounting standards; (vii) changes in policy by regulatory agencies; (viii) changes in the securities and foreign exchange markets; (ix) the Company’s potential growth, including its entrance or expansion into new markets, and the need for sufficient capital to support that growth; (x) 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; (xi) an insufficient allowance for credit losses as a result of inaccurate assumptions; (xii) general economic, market or business conditions, including the impact of inflation and changes in monetary policy by the Federal Reserve Board; (xiii) changes in demand for loan products and financial services; (xiv) concentration of credit exposure; (xv) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships; (xvi) increased cybersecurity risk, including potential network breaches, business disruptions or financial losses; (xvii) civil unrest, natural disasters, epidemics (including the re-emergence of the COVID-19 pandemic) and other catastrophic events in the Company’s geographic area; (xviii) the impact, extent and timing of technological changes; and (xix) other circumstances, many of which are beyond management’s control. Management believes that the assumptions underlying the Company’s forward-looking statements are reasonable, but any of the assumptions could prove to be inaccurate.
The Company undertakes no obligation, and specifically disclaims any obligation, to update or revise forward-looking statements, whether as a result of new information or to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, except as required by federal securities laws.

Financial Condition
The following discussion provides details regarding the changes in significant balance sheet accounts at March 31, 2022 compared to December 31, 2021.
Assets
Total assets were $16,863,757 at March 31, 2022 compared to $16,810,311 at December 31, 2021. The Company acquired Southeastern Commercial Finance, LLC, an asset-based lending company headquartered in Birmingham, Alabama, effective March 1, 2022, which added $43,946 in total assets, including $28,110 in loans, on the date of acquisition.
Investments
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The securities portfolio is used to provide a source for meeting liquidity needs and to supply securities to be used in collateralizing certain deposits and certain types of borrowings. The securities portfolio also serves as an outlet to deploy excess liquidity and generate interest income rather than hold such excess funds as cash. The following table shows the carrying value of our securities portfolio by investment type and the percentage of such investment type relative to the entire securities portfolio as of the dates presented:
March 31, 2022December 31, 2021
BalancePercentage of
Portfolio
BalancePercentage of
Portfolio
U.S. Treasury securities$2,000 0.07 %$3,010 0.11 %
Obligations of states and political subdivisions448,065 15.49 426,751 15.23 
Mortgage-backed securities2,327,149 80.45 2,313,167 82.54 
Other debt securities115,328 3.99 59,513 2.12 
$2,892,542 100.00 %$2,802,441 100.00 %
Allowance for credit losses - held to maturity securities(32)(32)
Securities, net of allowance for credit losses$2,892,510 $2,802,409 
During the three months ended March 31, 2022, we deployed a portion of our excess liquidity into the securities portfolio and purchased $365,069 in investment securities. Mortgage-backed securities and collateralized mortgage obligations (“CMOs”), in the aggregate, comprised approximately 72% 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 11% of purchases made during the first three months of 2022. Other debt securities in our investment portfolio, consisting of corporate debt securities and issuances from the Small Business Administration (“SBA”), comprised approximately 17% of purchases made during the first three months of 2022.
Rising interest rates in the first quarter of 2022 had a negative impact on the value of our securities portfolio resulting in a fair market value adjustment of our available for sale securities of $134,756, which contributed to our accumulated other comprehensive loss.
Proceeds from maturities, calls and principal payments on securities during the first three months of 2022 totaled $135,775. The Company did not sell any securities during the first three months of 2022. Proceeds from the maturities, calls and principal payments on securities during the first three months of 2021 totaled $95,382. The Company sold municipal securities, residential mortgage backed securities and trust preferred securities with a carrying value of $154,034 at the time of sale for net proceeds of $155,391, resulting in a net gain on sale of $1,357 during the first three months of 2021.
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 in the secondary market, were $280,464 at March 31, 2022, as compared to $453,533 at December 31, 2021. Mortgage loans to be sold are sold either on a “best efforts” basis or under a mandatory delivery sales agreement. Under a “best efforts” sales agreement, residential real estate originations are locked in at a contractual rate with third party private investors or directly with government sponsored agencies, and the Company is obligated to sell the mortgages to such investors only if the mortgages are closed and funded. The risk we assume is conditioned upon loan underwriting and market conditions in the national mortgage market. Under a mandatory delivery sales agreement, the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price and delivery date. Penalties are paid to the investor if we fail to satisfy the contract. Gains and losses are realized at the time consideration is received and all other criteria for sales treatment have been met. Our standard practice is to sell the loans within 30-40 days after the loan is funded. Although loan fees and some interest income are derived from mortgage loans held for sale, the main source of income is gains from the sale of these loans in the secondary market.
Loans
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Total loans, excluding loans held for sale, were $10,313,459 at March 31, 2022 and $10,020,914 at December 31, 2021. Non purchased loans totaled $9,338,890 at March 31, 2022 compared to $9,011,011 at December 31, 2021. Loans purchased in previous acquisitions totaled $974,569 and $1,009,903 at March 31, 2022 and December 31, 2021, respectively.
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:
 March 31, 2022
 Non PurchasedPurchasedTotal
Loans
Percentage of Total Loans
Commercial, financial, agricultural (1)
$1,336,239 $109,368 $1,445,607 14.02 %
Lease financing, net of unearned income89,842 — 89,842 0.87 
Real estate – construction:
Residential305,396 1,259 306,655 2.97 
Commercial911,532 3,865 915,397 8.88 
Total real estate – construction1,216,928 5,124 1,222,052 11.85 
Real estate – 1-4 family mortgage:
Primary1,803,750 122,063 1,925,813 18.67 
Home equity424,426 46,239 470,665 4.56 
Rental/investment274,117 18,694 292,811 2.84 
Land development142,294 9,396 151,690 1.47 
Total real estate – 1-4 family mortgage2,644,587 196,392 2,840,979 27.54 
Real estate – commercial mortgage:
Owner-occupied1,318,446 220,247 1,538,693 14.92 
Non-owner occupied2,510,981 396,135 2,907,116 28.19 
Land development116,113 15,942 132,055 1.28 
Total real estate – commercial mortgage3,945,540 632,324 4,577,864 44.39 
Installment loans to individuals105,754 31,361 137,115 1.33 
Total loans, net of unearned income$9,338,890 $974,569 $10,313,459 100.00 %
(1)Includes Paycheck Protection Program (“PPP”) loans of $8,382 as of March 31, 2022.
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 December 31, 2021
 Non PurchasedPurchasedTotal
Loans
Percentage of Total Loans
Commercial, financial, agricultural (1)
$1,332,962 $90,308 $1,423,270 14.20 %
Lease financing, net of unearned income76,125 — 76,125 0.76 
Real estate – construction:
Residential300,988 1,287 302,275 3.02 
Commercial798,914 3,707 802,621 8.01 
Total real estate – construction1,099,902 4,994 1,104,896 11.03 
Real estate – 1-4 family mortgage:
Primary1,682,050 134,070 1,816,120 18.12 
Home equity423,108 51,496 474,604 4.74 
Rental/investment268,245 20,229 288,474 2.88 
Land development135,070 9,978 145,048 1.45 
Total real estate – 1-4 family mortgage2,508,473 215,773 2,724,246 27.19 
Real estate – commercial mortgage:
Owner-occupied1,329,219 234,132 1,563,351 15.60 
Non-owner occupied2,446,370 410,577 2,856,947 28.51 
Land development110,395 18,344 128,739 1.28 
Total real estate – commercial mortgage3,885,984 663,053 4,549,037 45.39 
Installment loans to individuals107,565 35,775 143,340 1.43 
Total loans, net of unearned income$9,011,011 $1,009,903 $10,020,914 100.00 %
(1)Includes PPP loans of $58,391 as of December 31, 2021.
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, 2022, 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.
Deposits
The Company relies on deposits as its major source of funds. Total deposits were $13,990,897 and $13,905,724 at March 31, 2022 and December 31, 2021, respectively. Noninterest-bearing deposits were $4,706,256 and $4,718,124 at March 31, 2022 and December 31, 2021, respectively, while interest-bearing deposits were $9,284,641 and $9,187,600 at March 31, 2022 and December 31, 2021, respectively.
Management continues to focus on growing and maintaining a stable source of funding, specifically noninterest-bearing deposits and other core deposits (that is, deposits excluding time deposits greater than $250,000). Noninterest bearing deposits represented 33.64% of total deposits at March 31, 2022, as compared to 33.93% of total deposits at December 31, 2021. Under certain circumstances, management may 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 from public universities and municipalities, including school boards and utilities. Public fund deposits were $1,825,839 and $1,787,414 at March 31, 2022 and December 31, 2021, 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. The following table presents our short-term borrowings by type as of the dates presented:
March 31, 2022December 31, 2021
Security repurchase agreements$11,279 $13,947 
Short-term borrowings from the FHLB100,000 — 
$111,279 $13,947 
The Company has hedged the interest rate risk associated with the short-term borrowings from the FHLB using an interest rate swap, which became effective in March 2022, in which it pays a fixed rate of interest. The effect of this interest rate hedge was to significantly reduce the cost to the Company of borrowing from the FHLB, and so the Company elected to take advantage of the availability of this low-cost funding in the first quarter of 2022.
At March 31, 2022, 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:
March 31, 2022December 31, 2021
Long-term FHLB advances$408 $417 
Junior subordinated debentures111,518 111,373 
Subordinated notes323,490 359,419 
$435,416 $471,209 
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. At March 31, 2022, all of our outstanding long-term FHLB advances were scheduled to mature within twelve months or less. The Company had $4,047,128 of availability on unused lines of credit with the FHLB at March 31, 2022, as compared to $4,214,274 at December 31, 2021.
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 (the “Bank”) as regulatory capital. The subordinated notes qualify as Tier 2 capital under the current regulatory guidelines.
On March 1, 2022, the Company redeemed at par the remaining $30,000 of its $60,000 5.00% fixed-to-floating rate subordinated notes. The Company redeemed the initial $30,000 of these notes in December 2021.
The Company owns the outstanding common securities of business trusts that issued corporation-obligated mandatorily redeemable preferred capital securities to third-party investors. The trusts used the proceeds from the issuance of their preferred capital securities and common securities (collectively referred to as “capital securities”) to buy floating rate junior subordinated debentures issued by the Company (or by companies that the Company subsequently acquired). The debentures are the trusts’ only assets and interest payments from the debentures finance the distributions paid on the capital securities.

Results of Operations
Net Income
Net income for the first quarter of 2022 was $33,547 compared to net income of $57,908 for the first quarter of 2021. Basic and diluted earnings per share (“EPS”) for the first quarter of 2022 were $0.60 as compared to basic and diluted EPS of $1.03 and $1.02, respectively, for the first quarter of 2021.
From time to time, the Company incurs expenses and charges or recognizes valuation adjustments in connection with certain transactions with respect to which management is unable to accurately predict when these items will be incurred or, when incurred, the amount of such items. The following table presents the impact of these items on reported EPS for the dates
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presented. The “COVID-19 related expenses” line item in the table below primarily consists of (a) employee overtime and employee benefit accruals directly related to the Company’s response to both the COVID-19 pandemic itself and federal legislation enacted to address the pandemic, such as the CARES Act, and (b) expenses associated with supplying branches with protective equipment 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.
Three Months Ended
 March 31, 2022March 31, 2021
Pre-taxAfter-taxImpact to Diluted EPSPre-taxAfter-taxImpact to Diluted EPS
Merger and conversion expenses$687 $556 $0.01 $— $— $— 
MSR valuation adjustment— — — (13,561)(10,497)(0.19)
Restructuring (benefit) charges(455)(368)(0.01)292 226 0.01 
COVID-19 related expenses— — — 785 608 0.01 
Net Interest Income
Net interest income, the difference between interest earned on assets and the cost of interest-bearing liabilities, is the largest component of our net income, comprising 73.02% of total revenue (i.e., net interest income on a fully taxable equivalent basis and noninterest income) for the first quarter of 2022. The primary concerns in managing net interest income are the volume, mix and repricing of assets and liabilities.
Net interest income was $99,629 for the three months ended March 31, 2022, as compared to $109,648 for the same period in 2021. On a tax equivalent basis, net interest income was $101,383 for the three months ended March 31, 2022, as compared to $111,264 same period in 2021.
The following tables set forth average balance sheet data, including all major categories of interest-earning assets and interest-bearing liabilities, together with the interest earned or interest paid and the average yield or average rate paid on each such category for the periods presented:
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 Three Months Ended March 31,
 20222021
 Average
Balance
Interest
Income/
Expense
Yield/
Rate
Average
Balance
Interest
Income/
Expense
Yield/
Rate
Assets
Interest-earning assets:
Loans held for investment10,108,511 97,001 3.88 10,802,991 113,072 4.24 
Loans held for sale330,442 2,863 3.48 406,397 2,999 2.96 
Securities:
Taxable2,499,822 8,782 1.41 1,065,779 4,840 1.82 
Tax-exempt(1)
438,380 2,635 2.40 306,344 2,284 2.98 
Interest-bearing balances with banks1,463,991 664 0.18 777,166 183 0.10 
Total interest-earning assets14,841,146 111,945 3.05 13,358,677 123,378 3.74 
Cash and due from banks206,224 205,830 
Intangible assets965,430 969,001 
Other assets684,464 670,183 
Total assets$16,697,264 $15,203,691 
Liabilities and shareholders’ equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand(2)
$6,636,392 $3,647 0.22 %$5,906,230 $3,932 0.27 %
Savings deposits1,097,560 139 0.05 882,758 169 0.08 
Time deposits1,374,722 1,851 0.55 1,655,778 4,178 1.02 
Total interest-bearing deposits9,108,674 5,637 0.25 8,444,766 8,279 0.40 
Borrowed funds485,777 4,925 4.08 483,907 3,835 3.21 
Total interest-bearing liabilities9,594,451 10,562 0.44 8,928,673 12,114 0.55 
Noninterest-bearing deposits4,651,793 3,862,422 
Other liabilities201,353 240,171 
Shareholders’ equity2,249,667 2,172,425 
Total liabilities and shareholders’ equity$16,697,264 $15,203,691 
Net interest income/net interest margin$101,383 2.76 %$111,264 3.37 %
(1)U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which the Company operates.
(2)Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.

The average balances of nonaccruing assets are included in the tables above. Interest income and weighted average yields on tax-exempt loans and securities have been computed on a fully tax equivalent basis assuming a federal tax rate of 21% 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, the decline in loan yields due to the low interest rate environment during the past year as well as changes in the mix of earning assets over the past year due to increased liquidity on the balance sheet were the largest contributing factors to the decrease in net interest margin and net interest income for the three months ended March 31, 2022, as compared to the same period in 2021. 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. The Company has also increased its purchases of investment securities and continues to evaluate options to mitigate the pressure on net interest margin.
The following table sets forth a summary of the changes in interest earned, on a tax equivalent basis, and interest paid resulting from changes in volume and rates for the Company for the three months ended March 31, 2022, as compared to the same period
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in 2021 (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 March 31, 2022 Compared to the Three Months Ended March 31, 2021
VolumeRateNet
Interest income:
Loans held for investment(6,966)(9,105)(16,071)
Loans held for sale(606)470 (136)
Securities:
Taxable5,224 (1,282)3,942 
Tax-exempt844 (493)351 
Interest-bearing balances with banks235 246 481 
Total interest-earning assets(1,269)(10,164)(11,433)
Interest expense:
Interest-bearing demand deposits451 (736)(285)
Savings deposits35 (65)(30)
Time deposits(621)(1,706)(2,327)
Borrowed funds15 1,075 1,090 
Total interest-bearing liabilities(120)(1,432)(1,552)
Change in net interest income$(1,149)$(8,732)$(9,881)
Interest income, on a tax equivalent basis, was $111,945 for the three months ended March 31, 2022, as compared to $123,378, for the same period in 2021. This decrease in interest income, on a tax equivalent basis, is due primarily to the Federal Reserve maintaining low interest rates since March 2020 (until the Federal Reserve's first rate increase in March 2022) and changes in the mix of earning assets during the year due to increased liquidity on the balance 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 AssetsYield
Three Months EndedThree Months Ended
 March 31,March 31,
 2022202120222021
Loans held for investment, excl. PPP67.84 %73.49 %3.88 %4.22 %
Paycheck Protection Program0.27 7.38 6.36 4.40 
Loans held for sale2.23 3.04 3.48 2.96 
Securities19.80 10.27 1.55 2.08 
Other9.86 5.82 0.18 0.10 
Total earning assets100.00 %100.00 %3.05 %3.74 %
For the first quarter of 2022, interest income on loans held for investment, on a tax equivalent basis, decreased $16,071 to $97,001 from $113,072 for the same period in 2021. Interest income on loans held for investment decreased primarily due to the Federal Reserve maintaining low interest rates since March 2020. Interest income attributable to PPP loans included in loan interest income for the three months ended March 31, 2022, was $619, which consisted of $94 in interest income and $526 in accretion of net origination fees, as compared to $10,687 for the three months ended March 31, 2021, which consisted of $2,392 in interest income and $8,295 in accretion of net origination fees. The PPP origination fees, net of agent fees paid and other origination costs, are being accreted into interest income over the life of the loan. 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. PPP loans increased margin and loan yield by one basis point each during the first quarter of 2022. PPP loans increased margin and loan yield by eight basis points and two basis points, respectively, in the first quarter of 2021.
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The impact from interest income collected on problem loans and purchase accounting adjustments on loans to total interest income on loans held for investment, loan yield and net interest margin is shown in the following table for the periods presented.
Three Months Ended
 March 31,
 20222021
Net interest income collected on problem loans$434 $2,180 
Accretable yield recognized on purchased loans(1)
1,235 3,088 
Total impact to interest income on loans$1,669 $5,268 
Impact to loan yield0.07 %0.20 %
Impact to net interest margin0.05 %0.16 %
(1)Includes additional interest income recognized in connection with the acceleration of paydowns and payoffs from purchased loans of $373 and $1,272, for the first quarter of 2022 and 2021, respectively. This additional interest income increased total loan yield by one basis point and five basis points for the first quarter of 2022 and 2021, respectively, while increasing net interest margin by one and four basis points for the same respective periods.
For the first quarter of 2022, interest income on loans held for sale (consisting of mortgage loans held for sale) decreased $136 to $2,863 from $2,999 for the same period in 2021.
Investment income, on a tax equivalent basis, increased $4,293 to $11,417 for the first quarter of 2022 from $7,124 for the first quarter of 2021. The tax equivalent yield on the investment portfolio for the first quarter of 2022 was 1.55%, down 53 basis points from 2.08% for the same period in 2021. The decrease in taxable equivalent yield on securities was a result of the low interest rate environment over the period. The growth in the Company’s investment securities portfolio during the year has helped offset the loss of investment income due to lower yield on securities.
Interest expense was $10,562 for the first quarter of 2022 as compared to $12,114 for the same period in 2021.
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 FundsCost of Funds
Three Months EndedThree Months Ended
 March 31,March 31,
 2022202120222021
Noninterest-bearing demand32.65 %30.20 %— %— %
Interest-bearing demand46.59 46.18 0.22 0.27 
Savings7.70 6.90 0.05 0.08 
Time deposits9.65 12.94 0.55 1.02 
Short term borrowings0.19 0.10 0.48 0.31 
Long-term Federal Home Loan Bank advances0.01 1.19 1.86 0.05 
Subordinated notes2.43 1.63 4.26 5.15 
Other borrowed funds0.78 0.86 4.41 4.24 
Total deposits and borrowed funds100.00 %100.00 %0.30 %0.38 %

Interest expense on deposits was $5,637 and $8,279 for the three months ended March 31, 2022 and 2021, respectively. The cost of total deposits was 0.17% and 0.27% 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 repriced in a low interest rate environment, although the Company expects that the rising rate environment will limit its ability to achieve further reductions in deposit interest rates and in fact may result in increased deposit costs in future periods. During 2022, the Company has continued its efforts to grow and maintain non-interest bearing deposits. Such deposits stayed relatively flat over the first quarter, representing 33.64% of total
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deposits at March 31, 2022 compared to 33.93% of total deposits at December 31, 2021. 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 $4,925 and $3,835 for the three months ended March 31, 2022 and 2021, respectively. The increase in interest expense is a result of higher average borrowings, primarily due to the Company's issuance of $200,000 of subordinated notes in November 2021.
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
Noninterest Income to Average Assets
Three Months Ended March 31,
2022 2021
0.91% 2.16%
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 $37,458 for the first quarter of 2022 as compared to $81,037 for the same period in 2021. This decrease is primarily due to the reduction in mortgage banking income during the first quarter of 2022 (discussed in more detail below) as compared to the record production during the first quarter of 2021.
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 $9,562 and $8,023 for the first quarter of 2022 and 2021, respectively. Overdraft fees, the largest component of service charges on deposits, were $5,178 for the three months ended March 31, 2022, as compared to $3,955 for the same period in 2021. The Company recently announced its plans to eliminate consumer non-sufficient funds fees as well as transfer fees to linked customer accounts. These changes will take effect January 1, 2023. The fees to be eliminated totaled approximately $1,300 in the first quarter of 2022.
Fees and commissions were $3,982 during the first quarter of 2022 as compared to $3,900 for the same period in 2021. Fees and commissions include fees related to deposit services, such as ATM fees and interchange fees on debit card transactions. For the first quarter of 2022, interchange fees were $2,431 as compared to $2,392 for the same period in 2021.
Through Renasant Insurance, we offer a range of commercial and personal insurance products through major insurance carriers. Income earned on insurance products was $2,554 and $2,237 for the three months ended March 31, 2022 and 2021, 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 $534 and $1,006 for the three months ended March 31, 2022 and 2021, respectively.
Our Wealth Management segment has two primary divisions: Trust and Financial Services. The Trust division operates on a custodial basis which includes administration of benefit plans, as well as accounting and money management for trust accounts. The division manages a number of trust accounts inclusive of personal and corporate benefit accounts, 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 $5,924 for the first quarter of 2022 compared to $4,792 for the same period in 2021. The market value of assets under management or administration was $5,021,299 and $4,453,355 at March 31, 2022 and March 31, 2021, 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 $595,045 in the first quarter of 2022 compared to $1,143,349 for the same period in 2021. During the first quarter of 2022 mortgage loan originations continued to normalize and trend toward pre-pandemic levels while margins on the sale of loans in the secondary market compressed as interest rates rose and housing inventories remained below
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demand. Mortgage banking income was $9,633 and $50,733 for the three months ended March 31, 2022 and 2021, respectively. The table below presents the components of mortgage banking income included in noninterest income for the periods presented.
Three Months Ended March 31,
2022 2021
Gain on sales of loans, net (1)
$6,047 $33,901 
Fees, net3,053 4,902 
Mortgage servicing loss (gain), net533 (1,631)
MSR valuation adjustment— 13,561 
Mortgage banking income, net$9,633 $50,733 
(1) Gain on sales of loans, net includes pipeline fair value adjustments
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 $2,153 for the three months ended March 31, 2022 as compared to $2,072 for the same period in 2021. The Company purchased an additional $80,000 in BOLI policies during the first three months of 2022.
Other noninterest income was $3,650 and $7,923 for the three months ended March 31, 2022 and 2021, 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 seasonal income items.
Noninterest Expense
Noninterest Expense to Average Assets
Three Months Ended March 31,
2022 2021
2.29% 3.09%
Noninterest expense was $94,105 and $115,935 for the first quarter of 2022 and 2021.
Salaries and employee benefits decreased $16,457 to $62,239 for the first quarter of 2022 as compared to $78,696 for the same period in 2021. The decrease in salaries and employee benefits is primarily due to a decrease in mortgage commissions and incentives, driven by the decrease in mortgage production described above.
Data processing costs decreased to $4,263 in the first quarter of 2022 from $5,451 for the same period in 2021. The decline in the first quarter of 2022 as compared to the same period in 2021 is primarily due to the Company's renegotiation of certain vendor contracts. 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 first quarter of 2022 was $11,276, down from $12,538 for the same period in 2021. The decrease in occupancy and equipment expense is primarily attributable to the restructuring and non-renewal of certain branch leases.
For the first quarter of 2022 the Company experienced a net gain of $241 in other real estate expense as compared to expenses of $41 for the same period in 2021. 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 $14 and $70 for the first three months of 2022 and 2021, respectively. For the three months ended March 31, 2022 and 2021, other real estate owned with a cost basis of $665 and $1,906, respectively, was sold, resulting in a net gain of $291 and net gain of $56, 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 regulations. Professional fees were $3,151 for the first quarter of 2022 as compared to $2,921 for the same period in 2021.
Advertising and public relations expense was $4,059 for the first quarter of 2022 as compared to $3,252 for the same period in 2021. During the first quarter of 2022, the Company contributed approximately $1,000 to charitable organizations throughout Mississippi and Georgia, which is included in our advertising and public relations expense, for which it received a dollar for dollar tax credit.
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Amortization of intangible assets totaled $1,366 and $1,598 for the first quarter of 2022 and 2021, 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 8 years.
Communication expenses, those expenses incurred for communication to clients and between employees, were $2,027 for the first quarter of 2022 as compared to $2,292 for the same period in 2021.
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 $5,733 for the three months ended March 31, 2022 as compared to $8,854 for the same periods in 2021. During the first quarter of 2022 there was a recovery of provision for unfunded commitments of $550. There was no provision for unfunded commitments recorded for the same period in 2021.
Efficiency Ratio
Efficiency Ratio
Three Months Ended March 31,
2022 2021
Efficiency ratio (GAAP)67.78 % 60.29 %
Adjusted efficiency ratio (Non-GAAP)(1)
67.02 %63.85 %
(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 that we must expend to generate a dollar of revenue.) The Company calculates this ratio by dividing noninterest expense by the sum of net interest income on a fully tax equivalent basis and noninterest income. The table above shows the impact on the efficiency ratio of items that (1) the Company does not consider to be part of its core operating activities, such as amortization of intangibles, or (2) the Company incurred in connection with certain transactions where management is unable to accurately predict the timing of when these items will be incurred or, when incurred, the amount of such items, such as, for the first quarter of 2022, merger and conversion related expenses, restructuring benefits and a recovery of a portion of the reserve 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 first quarter of 2022 and 2021 was $7,935 and $16,842, respectively. In addition to lower earnings in the first quarter of 2022 as compared to the first quarter of 2021, the Company also recognized tax credits of approximately $1,000 in the first quarter of 2022 as mentioned above in the advertising and public relations discussion.

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
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 our credit administration department, our problem asset resolution committee and the Board of Directors Credit Review Committee. 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 three additional State Certified General Real Estate Appraisers and four real estate evaluators. In addition, we maintain a loan review staff to independently monitor loan quality and lending practices. Loan review personnel
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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 limit are reviewed for approval by senior credit officers.
For loans with a commercial 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 to criticized due to a decline in the collateral value or cash flow of the borrower. 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.
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 as described above), with fees associated with the foreclosure being deducted from the sales price. The purchase price is applied to the outstanding loan balance. Any remaining balance is charged-off, which reduces 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 management believes the uncollectability of a loan balance is confirmed and such losses are reasonably quantified. Net charge-offs for the first quarter of 2022 were $851, or 0.03% of average loans (annualized), compared to net charge-offs of $3,038, or 0.11% of average loans (annualized), for the same period in 2021. The charge-offs were fully reserved for in the Company’s allowance for credit losses on loans. Subsequent recoveries, if any, are credited to the allowance for credit losses on loans.
Allowance for Credit Losses on Loans; Provision for Credit Losses on Loans. The allowance for credit losses is available to absorb credit losses inherent in the loans held for investment portfolio. Management evaluates the adequacy of the allowance on a quarterly basis.
The appropriate level of the allowance is based on an ongoing analysis of the loan portfolio and represents an amount that management deems adequate to provide for inherent losses, including loans evaluated on a collective (pooled) basis and those evaluated on an individual basis as set forth in ASC 326. The credit loss estimation process involves procedures to appropriately consider the unique characteristics of the Company’s loan portfolio segments. Credit quality is assessed and monitored by evaluating various attributes, and the results of those evaluations are utilized in underwriting new loans and in the Company’s process for the estimation of expected credit losses. Credit quality monitoring procedures and indicators can include an assessment of problem loans, the types of loans, historical loss experience, new lending products, emerging credit trends, changes in the size and character of loan categories, and other factors, including our risk rating system, regulatory guidance and economic conditions, such as the unemployment rate and GDP growth in the national and local economies as well as trends in the market values of underlying collateral securing loans, all as determined based on input from management, loan review staff and other sources. This evaluation is complex and inherently subjective, as it requires estimates by management that are inherently uncertain and therefore susceptible to significant revision as more information becomes available. In future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and provision for credit loss in those future periods.
The methodology for estimating the amount of expected credit losses reported in the allowance for credit losses has two basic components: first, a collective or pooled component for estimated expected credit losses for pools of loans that share similar risk characteristics; and second, an asset-specific component involving individual loans that do not share risk characteristics with other loans and the measurement of expected credit losses for such individual loans.

The allowance for credit losses for loans that share similar risk characteristics with other loans is calculated on a collective (or pooled) basis, where such loans are segregated into loan portfolio segments 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
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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. External factors include current and reasonable and supportable forecasted economic conditions and changes in collateral values. These factors are used to adjust the historical loss rates (as described above) to ensure that they reflect management’s expectation of future conditions based on a reasonable and supportable forecast period. To the extent the lives of the loans in the portfolio extend beyond the period for which a reasonable and supportable forecast can be made, when necessary, the models immediately revert back to the historical loss rates adjusted for qualitative factors related to current conditions.

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

In addition to its quarterly analysis of the allowance for credit losses, 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, among others. 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:
 
March 31, 2022December 31, 2021March 31, 2021
Balance% of TotalBalance% of TotalBalance% of Total
Commercial, financial, agricultural$33,606 14.02 %$33,922 14.20 %$37,592 21.04 %
Lease financing1,582 0.87 %1,486 0.76 %1,546 0.70 %
Real estate – construction18,411 11.85 %16,419 11.03 %14,977 8.94 %
Real estate – 1-4 family mortgage36,848 27.54 %32,356 27.19 %31,694 25.13 %
Real estate – commercial mortgage65,231 44.39 %68,940 45.39 %76,225 42.57 %
Installment loans to individuals10,790 1.33 %11,048 1.43 %11,072 1.62 %
Total$166,468 100.00 %$164,171 100.00 %$173,106 100.00 %

The provision for credit losses on loans charged to operating expense is an amount which, in the judgment of management, is necessary to maintain the allowance for credit losses on loans at a level that is believed to be adequate to meet the inherent risks of losses in our loan portfolio. The Company recorded a provision for credit losses of $1,500 during the first quarter of 2022, as compared to no provision for credit losses recorded in the first quarter of 2021. The Company’s allowance for credit losses model considers economic projections, primarily the national unemployment rate and GDP, over a reasonable and supportable
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period of two years. The provision activity during the current quarter was primarily driven by strong loan growth during the quarter and also the acquisition of Southeastern Commercial Finance, LLC.
The table below reflects the activity in the allowance for credit losses on loans for the periods presented:
Three Months Ended
 March 31,
 20222021
Balance at beginning of period$164,171 $176,144 
Impact of PCD loans acquired during the period1,648 — 
Charge-offs
Commercial, financial, agricultural2,102 3,498 
Lease financing— 
Real estate – construction— 52 
Real estate – 1-4 family mortgage163 101 
Real estate – commercial mortgage61 
Installment loans to individuals779 1,658 
Total charge-offs3,057 5,370 
Recoveries
Commercial, financial, agricultural1,136 289 
Lease financing12 11 
Real estate – construction— 13 
Real estate – 1-4 family mortgage178 261 
Real estate – commercial mortgage155 171 
Installment loans to individuals725 1,587 
Total recoveries2,206 2,332 
Net charge-offs851 3,038 
Provision for credit losses on loans1,500 — 
Balance at end of period$166,468 $173,106 
Net charge-offs (annualized) to average loans0.03 %0.11 %
Net charge-offs to allowance for credit losses on loans0.51 %1.75 %
Allowance for credit losses on loans to:
Total loans1.61 %1.62 %
Total loans excluding PPP loans(1)
1.62 %1.76 %
Nonperforming loans318.65 %308.54 %
Nonaccrual loans320.16 %322.11 %
(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


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

Three Months Ended
March 31, 2022March 31, 2021
Net Charge-offsAverage LoansAnnualized Net Charge-offs to Average LoansNet Charge-offsAverage LoansAnnualized Net Charge-offs to Average Loans
Commercial, financial, agricultural$966$1,424,5650.28%$3,209$2,382,4540.55%
Lease financing(5)84,681(0.02)(11)75,249(0.06)
Real estate – construction1,107,52939921,8030.02
Real estate – 1-4 family mortgage(15)2,810,988(160)2,674,824(0.02)
Real estate – commercial mortgage(149)4,540,731(0.01)(110)4,558,003(0.01)
Installment loans to individuals54140,0170.1671190,4780.15
Total$851$10,108,5110.03%$3,038$10,802,8110.11%

The following table provides further details of the Company’s net charge-offs of loans secured by real estate for the periods presented:
 
Three Months Ended
 March 31,
 20222021
Real estate – construction:
Residential$— $39 
Total real estate – construction— 39 
Real estate – 1-4 family mortgage:
Primary62 (79)
Home equity22 (93)
Rental/investment(2)34 
Land development(97)(22)
Total real estate – 1-4 family mortgage(15)(160)
Real estate – commercial mortgage:
Owner-occupied(149)(159)
Non-owner occupied— 25 
Land development— 24 
Total real estate – commercial mortgage(149)(110)
Total net charge-offs of loans secured by real estate$(164)$(231)

Allowance for Credit Losses on Unfunded Commitments; Provision for Credit Losses on Unfunded Commitments. The Company maintains a separate allowance for credit losses on unfunded loan commitments, which is included in the “Other liabilities” line item on the Consolidated Balance Sheets. Management estimates the amount of expected losses on unfunded loan commitments by calculating a likelihood of funding over the contractual period for exposures that are not unconditionally cancellable by the Company and applying the loss factors used in the allowance for credit losses on loans methodology described above to unfunded commitments for each loan type. No credit loss estimate is reported for off-balance-sheet credit exposures that are unconditionally cancellable by the Company. A roll-forward of the allowance for credit losses on unfunded commitments is shown in the table below.
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Three Months Ended March 31,20222021
Allowance for credit losses on unfunded loan commitments:
Beginning balance$20,035 $20,535 
(Recovery of) provision for credit losses on unfunded loan commitments (included in other noninterest expense)(550)— 
Ending balance$19,485 $20,535 
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.
Non PurchasedPurchased Total
March 31, 2022
Nonaccruing loans$32,573 $19,422 $51,995 
Accruing loans past due 90 days or more209 38 247 
Total nonperforming loans32,782 19,460 52,242 
Other real estate owned531 1,531 2,062 
Total nonperforming assets$33,313 $20,991 $54,304 
Nonperforming loans to total loans0.51 %
Nonaccruing loans to total loans0.50 %
Nonperforming assets to total assets0.32 %
December 31, 2021
Nonaccruing loans$30,751 $18,613 $49,364 
Accruing loans past due 90 days or more1,074 367 1,441 
Total nonperforming loans31,825 18,980 50,805 
Other real estate owned951 1,589 2,540 
Total nonperforming assets$32,776 $20,569 $53,345 
Nonperforming loans to total loans0.51 %
Nonaccruing loans to total loans0.49 %
Nonperforming assets to total assets0.32 %

The level of nonperforming loans increased $1,437 from December 31, 2021 to March 31, 2022, while OREO decreased $478 during the same period.
The following table presents nonperforming loans by loan category as of the dates presented:
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March 31,
2022
December 31, 2021March 31,
2021
Commercial, financial, agricultural$13,177 $13,131 $15,992 
Lease financing— 11 — 
Real estate – 1-4 family mortgage:
Primary20,331 19,533 16,275 
Home equity2,233 1,719 2,436 
Rental/investment878 1,595 1,168 
Land development521 257 85 
Total real estate – 1-4 family mortgage23,963 23,104 19,964 
Real estate – commercial mortgage:
Owner-occupied5,700 5,039 4,923 
Non-owner occupied8,558 8,535 13,998 
Land development485 470 566 
Total real estate – commercial mortgage14,743 14,044 19,487 
Installment loans to individuals359 515 662 
Total nonperforming loans$52,242 $50,805 $56,105 

Total nonperforming loans as a percentage of total loans were 0.51% as of March 31, 2022 as compared to 0.51% and 0.52% as of December 31, 2021 and March 31, 2021, respectively. The Company’s coverage ratio, or its allowance for credit losses on loans as a percentage of nonperforming loans, was 318.65% as of March 31, 2022 as compared to 323.14% as of December 31, 2021 and 308.54% as of March 31, 2021.
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 March 31, 2022. Management also continually monitors past due loans for potential credit quality deterioration. Total loans 30-89 days past due but still accruing interest were $30,617 at March 31, 2022 as compared to $27,604 at December 31, 2021 and $21,801 at March 31, 2021.
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 $25,320 at March 31, 2022 as compared to $20,259 at December 31, 2021 and $20,370 at March 31, 2021. At March 31, 2022, loans restructured through interest rate concessions represented 23% 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:

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March 31,
2022
December 31, 2021March 31,
2021
Commercial, financial, agricultural$774 $967 $2,639 
Real estate – 1-4 family mortgage:
Primary12,196 11,750 8,363 
Home equity191 298 331 
Rental/investment344 350 427 
Land development94 — — 
Total real estate – 1-4 family mortgage12,825 12,398 9,121 
Real estate – commercial mortgage:
Owner-occupied3,667 5,407 6,757 
Non-owner occupied7,911 1,341 1,595 
Land development74 75 179 
Total real estate – commercial mortgage11,652 6,823 8,531 
Installment loans to individuals69 71 79 
Total restructured loans in compliance with modified terms$25,320 $20,259 $20,370 

Changes in the Company’s restructured loans are set forth in the table below:
 
20222021
Balance at January 1,$20,259 $20,448 
Additional advances or loans with concessions7,513 1,621 
Reclassified as performing restructured loan302 — 
Reductions due to:
Reclassified as nonperforming(493)(1,495)
Paid in full(2,126)— 
Paydowns(135)(204)
Balance at March 31,$25,320 $20,370 

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.
 
March 31,
2022
December 31, 2021March 31,
2021
Nonaccruing loans$51,995 $49,364 $53,741 
Accruing loans past due 90 days or more247 1,441 2,364 
Total nonperforming loans52,242 50,805 56,105 
Restructured loans in compliance with modified terms25,320 20,259 20,370 
Total nonperforming and restructured loans$77,562 $71,064 $76,475 

The following table provides details of the Company’s other real estate owned as of the dates presented:
 
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March 31,
2022
December 31, 2021March 31,
2021
Residential real estate$376 $259 $484 
Commercial real estate175 761 3,109 
Residential land development295 305 341 
Commercial land development1,216 1,215 2,037 
Total other real estate owned$2,062 $2,540 $5,971 

Changes in the Company’s other real estate owned were as follows:
20222021
Balance at January 1,$2,540 $5,972 
Transfers of loans200 2,039 
Impairments(14)(70)
Dispositions(665)(1,906)
Other(64)
Balance at March 31,$2,062 $5,971 

Other real estate owned with a cost basis of $665 was sold during the three months ended March 31, 2022, resulting in a net gain of $291, while other real estate owned with a cost basis of $1,906 was sold during the three months ended March 31, 2021, resulting in a net gain of $56.
Interest Rate Risk
Market risk is the risk of loss from adverse changes in market prices and rates. The majority of assets and liabilities of a financial institution are monetary in nature and therefore differ greatly from most commercial and industrial companies that have significant investments in fixed assets and inventories. Our market risk arises primarily from interest rate risk inherent in lending and deposit-taking activities. Management believes a significant impact on the Company’s financial results stems from our ability to react to changes in interest rates. A sudden and substantial change in interest rates may adversely impact our earnings because the interest rates borne by assets and liabilities do not change at the same speed, to the same extent or on the same basis.
Because of the impact of interest rate fluctuations on our profitability, the Board of Directors and management actively monitor and manage our interest rate risk exposure. We have an Asset/Liability Committee (“ALCO”) 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 April 1, 2022, in each case as compared to the result under rates present in the market on March 31, 2022. 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.
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 Percentage Change In:
Immediate Change in Rates of (in basis points):Economic Value Equity (EVE)Earning at Risk (Net Interest Income)
Static1-12 Months13-24 Months
+40012.17%31.70%38.29%
+3009.78%23.94%28.87%
+2007.21%16.14%19.58%
+1004.26%8.20%10.21%

The rate shock results for the net interest income simulations for the next twenty-four months produce an asset sensitive position at March 31, 2022 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, 200, 300 and 400. As interest rates are adjusted over a period of time, it is our strategy to proactively change the volume and mix of our balance sheet in order to mitigate our interest rate risk. The computation of the prospective effects of hypothetical interest rate changes requires numerous assumptions, including asset prepayment speeds, the impact of competitive factors on our pricing of loans and deposits, 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. For more information about the Company’s derivatives, see the information under the heading “Loan Commitments and Other Off-Balance Sheet Arrangements” in the Liquidity and Capital Resources section below and Note 10, “Derivative Instruments,” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements.

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 13.31% of the carrying value of the total securities portfolio. Securities within our investment portfolio are also used to secure certain deposit types, short-term borrowings and derivative instruments. At March 31, 2022, securities with a carrying value of $702,992 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 $629,174 similarly pledged at December 31, 2021.
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 $100,000 in short-term borrowings from the FHLB at March 31, 2022, as compared to no such borrowings at December 31, 2021. Long-term funds obtained from the FHLB are used to match-fund fixed rate loans in order to minimize interest rate risk and also are used to meet day-to-day liquidity needs, particularly when the cost of such borrowing compares favorably to the rates that we would be required to pay to attract deposits. At March 31, 2022, the balance of our outstanding long-term advances with the FHLB was $408 compared to $417 at December 31, 2021. The total amount of the remaining credit available to us from the FHLB at March 31, 2022 was $4,047,128. 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 March 31, 2022 or December 31, 2021.

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Finally, we can access the capital markets to meet liquidity needs, as we did in 2016, 2020 and 2021 in the form of subordinated notes. The Company maintains a shelf registration statement with the Securities and Exchange Commission (“SEC”). The shelf registration statement, which was effective upon filing, allows the Company to raise capital from time to time through the sale of common stock, preferred stock, depositary shares, debt securities, rights, warrants and units, or a combination thereof, subject to market conditions. Specific terms and prices will be determined at the time of any offering under a separate prospectus supplement that the Company will file with the SEC at the time of the specific offering. The proceeds of the sale of securities, if and when offered, will be used for general corporate purposes or as otherwise described in the prospectus supplement applicable to the offering and could include the expansion of the Company's banking, insurance and wealth management operations as well as other business opportunities. The carrying value of the subordinated notes, net of unamortized debt issuance costs, was $323,490 at March 31, 2022. We redeemed $30,000 of subordinated notes in the first quarter of 2022.
The following table presents, by type, the Company’s funding sources, which consist of total average deposits and borrowed funds, and the total cost of each funding source for the periods presented:
 Percentage of Total Average Deposits and Borrowed FundsCost of Funds
Three Months EndedThree Months Ended
 March 31,March 31,
 2022202120222021
Noninterest-bearing demand32.65 %30.20 %— %— %
Interest-bearing demand46.59 46.17 0.22 0.27 
Savings7.70 6.90 0.05 0.08 
Time deposits9.65 12.94 0.55 1.02 
Short-term borrowings0.19 0.10 0.48 0.31 
Long-term Federal Home Loan Bank advances0.01 1.19 1.86 0.05 
Subordinated notes2.43 1.63 4.26 5.15 
Other borrowed funds0.78 0.87 4.41 4.24 
Total deposits and borrowed funds100.00 %100.00 %0.30 %0.38 %

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 $1,607,493 at March 31, 2022, as compared to $1,261,916 at March 31, 2021. Cash used in investing activities for the three months ended March 31, 2022 was $584,800, as compared to cash provided by investing activities of $29,466 for the three months ended March 31, 2021. Proceeds from the sale, maturity or call of securities within our investment portfolio were $135,775 for the three months ended March 31, 2022, as compared to $250,773 for the same period in 2021. These proceeds were primarily reinvested into the investment portfolio. Purchases of investment securities were $365,069 for the first three months of 2022, as compared to $465,245 for the same period in 2021.
Cash provided by financing activities for the three months ended March 31, 2022 was $108,512, as compared to $656,035 for the same period in 2021. Deposits increased $85,173 and $677,827 for the three months ended March 31, 2022 and 2021, 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 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.
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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 March 31, 2022, the maximum amount available for transfer from the Bank to the Company in the form of loans was $171,473. The Company maintains a $3,000 line of credit collateralized by cash with the Bank. There were no amounts outstanding under this line of credit at March 31, 2022.
These restrictions did not have any impact on the Company’s ability to meet its cash obligations in the three months ended March 31, 2022, nor does management expect such restrictions to materially impact the Company’s ability to meet its currently-anticipated cash obligations.
Loan Commitments and Other Off-Balance Sheet Arrangements
The Company enters into loan commitments and standby letters of credit in the normal course of its business. Loan commitments are made to accommodate the financial needs of the Company’s customers. Standby letters of credit commit the Company to make payments on behalf of customers when certain specified future events occur. Both arrangements have credit risk essentially the same as that involved in extending loans to customers and are subject to the Company’s normal credit policies, including establishing a provision for credit losses on unfunded commitments. Collateral (e.g., securities, receivables, inventory, equipment, etc.) is obtained based on management’s credit assessment of the customer.
Loan commitments and standby letters of credit do not necessarily represent future cash requirements of the Company in that while the borrower has the ability to draw upon these commitments at any time, these commitments often expire without being drawn upon. The Company’s unfunded loan commitments and standby letters of credit outstanding were as follows as of the dates presented:
March 31, 2022December 31, 2021
Loan commitments$3,254,402 $3,104,940 
Standby letters of credit89,723 89,830 

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 March 31, 2022, the Company had notional amounts of $179,648 on interest rate contracts with corporate customers and $179,648 in offsetting interest rate contracts with other financial institutions to mitigate the Company’s rate exposure on its corporate customers’ contracts and certain fixed rate loans.
Additionally, the Company enters into interest rate lock commitments with its customers to mitigate the interest rate risk associated with the commitments to fund fixed-rate and adjustable rate residential mortgage loans and also enters into forward commitments to sell residential mortgage loans to secondary market investors.
The Company also enters into 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 derivatives, see Note 10, “Derivative Instruments,” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements.

Shareholders’ Equity and Regulatory Matters
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Total shareholders’ equity of the Company was $2,137,642 at March 31, 2022 compared to $2,209,853 at December 31, 2021. Book value per share was $38.25 and $39.63 at March 31, 2022 and December 31, 2021, respectively. The decrease in shareholders’ equity was attributable to changes in accumulated other comprehensive income and dividends declared, partially offset by current period earnings.
On October 26, 2021, the Company’s Board of Directors approved a new stock repurchase program, 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 did not repurchase any of its common stock under the stock repurchase plan in the first quarter of 2022.
The Company has junior subordinated debentures with a carrying value of $111,518 at March 31, 2022, of which $107,927 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 debentures we include in Tier 1 capital at March 31, 2022. Although our existing junior subordinated debentures are currently unaffected by these Federal Reserve guidelines, on account of changes enacted as part of the Dodd-Frank Act, any new trust preferred securities are not includable in Tier 1 capital. Further, if as a result of an acquisition of a financial institution we exceed $15,000,000 in assets, or if we make any acquisition of a financial institution 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 par value of $340,000 at March 31, 2022, of which $335,244 is included in the Company’s Tier 2 capital.
The Federal Reserve, the FDIC and the Office of the Comptroller of the Currency have issued guidelines governing the levels of capital that bank holding companies and banks must maintain. Those guidelines specify capital tiers, which include the following classifications:
Capital TiersTier 1 Capital to
Average Assets
(Leverage)
Common Equity Tier 1 to
Risk - Weighted Assets
Tier 1 Capital to
Risk - Weighted
Assets
 Total Capital to
Risk - Weighted
Assets
Well capitalized5% or above6.5% or above 8% or above 10% or above
Adequately capitalized4% or above4.5% or above 6% or above 8% or above
UndercapitalizedLess than 4%Less than 4.5% Less than 6% Less than 8%
Significantly undercapitalizedLess than 3%Less than 3% Less than 4% Less than 6%
Critically undercapitalized Tangible Equity / Total Assets less than 2%

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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:
 ActualMinimum Capital
Requirement to be
Well Capitalized
Minimum Capital
Requirement to be
Adequately
Capitalized (including the Capital Conservation Buffer)
 AmountRatioAmountRatioAmountRatio
March 31, 2022
Renasant Corporation:
Risk-based capital ratios:
Common equity tier 1 capital ratio$1,316,342 10.78 %$793,569 6.50 %$854,613 7.00 %
Tier 1 risk-based capital ratio1,424,268 11.67 %976,700 8.00 %1,037,744 8.50 %
Total risk-based capital ratio1,892,630 15.50 %1,220,875 10.00 %1,281,919 10.50 %
Leverage capital ratios:
Tier 1 leverage ratio1,424,268 9.00 %791,134 5.00 %632,907 4.00 %
Renasant Bank:
Risk-based capital ratios:
Common equity tier 1 capital ratio$1,581,608 12.95 %$793,942 6.50 %$855,014 7.00 %
Tier 1 risk-based capital ratio1,581,608 12.95 %977,159 8.00 %1,038,232 8.50 %
Total risk-based capital ratio1,714,725 14.04 %1,221,449 10.00 %1,282,521 10.50 %
Leverage capital ratios:
Tier 1 leverage ratio1,581,608 10.00 %790,518 5.00 %632,414 4.00 %
December 31, 2021
Renasant Corporation:
Risk-based capital ratios:
Common equity tier 1 capital ratio$1,314,295 11.18 %$763,952 6.50 %$822,717 7.00 %
Tier 1 risk-based capital ratio1,422,077 12.10 %940,248 8.00 %999,014 8.50 %
Total risk-based capital ratio1,897,167 16.14 %1,175,610 10.00 %1,234,076 10.50 %
Leverage capital ratios:
Tier 1 leverage ratio1,422,077 9.15 %777,289 5.00 %621,831 4.00 %
Renasant Bank:
Risk-based capital ratios:
Common equity tier 1 capital ratio$1,580,904 13.46 %$763,713 6.50 %$822,460 7.00 %
Tier 1 risk-based capital ratio1,580,904 13.46 %939,954 8.00 %998,702 8.50 %
Total risk-based capital ratio1,697,163 14.44 %1,174,943 10.00 %1,233,690 10.50 %
Leverage capital ratios:
Tier 1 leverage ratio1,580,904 10.18 %776,700 5.00 %621,360 4.00 %

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. The three-year transitional period began on January1, 2022.
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.
Critical Accounting Estimates
We have identified certain accounting estimates which involve significant judgment and estimates which can have a material impact on our financial condition or results of operations. Our accounting policies are more fully described in Note 1,
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“Significant Accounting Policies,” in the Notes to Consolidated Financial Statements of the Company in Item 8, Financial Statements and Supplementary Data, in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on February 25, 2022. Actual amounts and values as of the balance sheet dates may be materially different than the amounts and values reported due to the inherent uncertainty in the estimation process. Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date.
The critical accounting estimates which we believe to be the most critical in preparing our consolidated financial statements relate to allowance for credit losses and acquisition accounting, which are described under “Critical Accounting Policies and Estimates” in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the year ended December 31, 2021. Since December 31, 2021, there have been no material changes in these critical accounting estimates.

Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”), this document contains certain non-GAAP financial measures, namely, an adjusted efficiency ratio and the allowance for credit losses on loans to total loans, excluding PPP loans (the “adjusted allowance ratio”). The adjusted allowance ratio only excludes PPP loans; the adjusted efficiency ratio adjusts GAAP financial measures to exclude the amortization of intangible assets and certain items (such as, among others, merger and conversion related expenses, COVID-19 related expenses, restructuring benefit, and a recovery of a portion of the reserve for unfunded commitments, gains on sales of securities and asset valuation adjustments) with respect to which the Company is unable to accurately predict when these items will be incurred or, when incurred, the amount thereof. With respect to COVID-19 related expenses in particular, management added these expenses as a charge to exclude when calculating non-GAAP financial measures because the expenses included within this line item are readily quantifiable and possess the same characteristics with respect to management’s inability to accurately predict the timing or amount thereof as the other 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 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 performance, particularly because these measures are widely used by industry analysts for companies with merger and 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 results to information provided in other regulatory reports and the results of other companies. The reconciliations from GAAP to non-GAAP for these financial measures are below.

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Adjusted Efficiency Ratio
Three months ended March 31,
20222021
Interest income (fully tax equivalent basis)$111,945 $123,378 
Interest expense10,562 12,114 
Net interest income (fully tax equivalent basis)101,383 111,264 
Total noninterest income37,458 81,037 
Net gains on sales of securities— 1,357 
MSR valuation adjustment— 13,561 
Adjusted noninterest income37,458 66,119 
Total noninterest expense94,105 115,935 
Intangible amortization1,366 1,598 
Merger and conversion related expenses687 — 
Restructuring (benefit) charges(455)292 
COVID-19 related expenses— 785 
Recovery of unfunded commitments(550)— 
Adjusted noninterest expense93,057 113,260 
Efficiency Ratio (GAAP)67.78 %60.29 %
Adjusted Efficiency Ratio (non-GAAP)67.02 %63.85 %

Allowance for Credit Losses on Loans to Total Loans, excluding PPP Loans
March 31, 2022December 31, 2021
Total loans (GAAP)$10,313,459 $10,020,914 
Less PPP loans8,382 58,391 
Adjusted total loans (non-GAAP)$10,305,077 $9,962,523 
Allowance for Credit Losses on Loans$166,468 $164,171 
ACL/Total loans (GAAP)1.61 %1.64 %
ACL/Total loans excluding PPP loans (non-GAAP)1.62 %1.65 %

The presentation of these non-GAAP financial 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, 2021. For additional information regarding our market risk, see our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on February 25, 2022.

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
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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 was no change in the Company’s internal control over financial reporting during the fiscal quarter covered by this quarterly report that has materially affected, or is 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, 2021. There have been no material changes from the risk factors set forth in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 25, 2022.

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 March 31, 2022, the Company repurchased shares of its common stock as indicated in the following table:
Total Number of Shares Purchased(1)
Average Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced Share Repurchase Plans
Maximum Number of Shares or Approximate Dollar Value That May Yet Be Purchased Under Share Repurchase Plans(2)
January 1, 2022 to January 31, 202219,397 $37.95 — $50,000 
February 1, 2022 to February 28, 2022— — — 50,000 
March 1, 2022 to March 31, 202249,291 35.05 — 50,000 
Total68,688 $35.87 — 
(1)For the three months ended March 31, 2022, all share amounts in this column represent shares of Renasant Corporation stock withheld to satisfy the federal and state tax liabilities related to the vesting of time-based and performance-based restricted stock awards.
The Company announced a $50.0 million stock repurchase program in October 2021 under which the Company is authorized to repurchase outstanding shares of its common stock either in open market purchases or privately-negotiated transactions. This plan will remain in effect for one year or, if earlier, the repurchase of the entire amount of common stock authorized to be repurchased. No shares were repurchased during the first quarter of 2022 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) 
(3)(ii) 
(3)(iii)
(3)(iv) 
(31)(i) 
(31)(ii) 
(32)(i) 
(32)(ii) 
(101) The following materials from Renasant Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 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, (v) Consolidated Statements of Cash Flows and (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 March 31, 2022, 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 “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 3(ii) to the Form 8-K of the Company filed with the Commission on April 30, 2021 and incorporated herein by reference.
(4)Filed as exhibit 3(ii) to the Form 8-K of the Company filed with the Commission on January 28, 2022 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.
78

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:May 6, 2022/s/ C. Mitchell Waycaster
 C. Mitchell Waycaster
 President and
 Chief Executive Officer
 (Principal Executive Officer)
Date:May 6, 2022/s/ James C. Mabry IV
 James C. Mabry IV
 Executive Vice President and
 Chief Financial Officer
 (Principal Financial Officer)
79
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