# Renasant Corp: Form 10-Q for the period ended Sep 30, 2024

- Company: [Renasant Corp](/companies/rnst.md) (CIK 715072)
- Form: 10-Q
- Filed: 2024-11-06
- Accepted by EDGAR: Nov 6, 2024, 16:23 ET
- Period: 2024-09-30
- Accession: 0000715072-24-000186
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/715072/000071507224000186/rnst-20240930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/715072/000071507224000186/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Income tax | 3 months, 2024-07-01 to 2024-09-30 | $24.9m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-01-01 to 2024-09-30 | $44.5m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-07-01 to 2024-09-30 | $72.5m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-01-01 to 2024-09-30 | $150.7m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-07-01 to 2024-09-30 | $1.18 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-01-01 to 2024-09-30 | $2.59 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-07-01 to 2024-09-30 | $1.18 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-01-01 to 2024-09-30 | $2.60 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-07-01 to 2024-09-30 | 61,632,448 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-01-01 to 2024-09-30 | 58,297,554 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-01-01 to 2024-09-30 | $37.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-01-01 to 2024-09-30 | $10.4m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 9 months, 2024-01-01 to 2024-09-30 | $39.5m | us-gaap:PaymentsOfDividends |
| Cash and equivalents | at 2024-09-30 | $1.28bn | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2024-09-30 | $17.96bn | us-gaap:Assets |
| Total liabilities | at 2024-09-30 | $15.30bn | us-gaap:Liabilities |
| Long-term debt | at 2024-09-30 | $433.2m | us-gaap:LongTermDebt |
| Short-term borrowings | at 2024-09-30 | $108.7m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2024-09-30 | $2.66bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 108,550 characters.

#### (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”, “Renasant”, “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,” “focus,” “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 (including its recently-announced acquisition of The First Bancshares, Inc. described under the “Recent Developments” heading below) into its operations, retain the customers of these businesses, grow the acquired operations and realize the cost savings expected from an acquisition to the extent and in the timeframe anticipated by management (including the possibility that such cost savings will not be realized when expected, or at all, as a result of the impact of, or challenges arising from, the integration of the acquired assets and assumed liabilities into the Company, potential adverse reactions or changes to business or employee relationships, or as a result of other unexpected factors or events); (ii) potential exposure to unknown or contingent risks and liabilities we have acquired, or may acquire, or target for acquisition, including in connection with the proposed merger with The First Bancshares, Inc.; (iii) the effect of economic conditions and interest rates on a national, regional or international basis; (iv) timing and success of the implementation of changes in operations to achieve enhanced earnings or effect cost savings; (v) competitive pressures in the consumer finance, commercial finance, financial services, asset management, retail banking, factoring, mortgage lending and auto lending industries; (vi) the financial resources of, and products available from, competitors; (vii) changes in laws and regulations as well as changes in accounting standards; (viii) changes in policy by regulatory agencies or increased scrutiny by, and/or additional regulatory requirements of, regulatory agencies as a result of our proposed merger with The First Bancshares, Inc.; (ix) changes in the securities and foreign exchange markets; (x) the Company’s potential growth, including its entrance or expansion into new markets, and the need for sufficient capital to support that growth; (xi) changes in the quality or composition of the Company’s loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers or issuers of investment securities, or the impact of interest rates on the value of our investment securities portfolio; (xii) an insufficient allowance for credit losses as a result of inaccurate assumptions; (xiii) changes in the sources and costs of the capital we use to make loans and otherwise fund our operations, due to deposit outflows, changes in the mix of deposits and the cost and availability of borrowings; (xiv) general economic, market or business conditions, including the impact of inflation; (xv) changes in demand for loan and deposit products and other financial services; (xvi) concentrations of credit or deposit exposure; (xvii) changes or the lack of changes in interest rates, yield curves and interest rate spread relationships; (xviii) increased cybersecurity risk, including potential network breaches, business disruptions or financial losses; (xix) civil unrest, natural disasters, epidemics and other catastrophic events in the Company’s geographic area; (xx) geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism and/or military conflicts, which could impact business and economic conditions in the United States and abroad; (xxi) the impact, extent and timing of technological changes; and (xxii) 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.

### Recent Developments

#### Sale of Renasant Insurance, Inc.

Effective July 1, 2024, Renasant Bank sold substantially all of the assets of Renasant Insurance, Inc. for gross cash proceeds to Renasant Bank of $56,390. The sale resulted in a positive after-tax impact to earnings of $34,092, which is net of estimated transaction-related expenses. The financial effects of the sale are reflected in the third quarter of 2024.

#### Proposed Merger with The First Bancshares, Inc.

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

The shareholders of the Company and The First approved the Merger at special meetings held on October 22, 2024. The Merger is expected to close in the first half of 2025 and is subject to certain closing conditions, including the receipt of required regulatory approvals.

#### Offering of Common Stock

On July 31, 2024, the Company completed its public offering of an aggregate of 7,187,500 shares of its common stock at a price of $32.00 per share, including 937,500 shares of common stock upon the exercise in full by the underwriters of their option to purchase additional shares. The aggregate gross proceeds were $230,000. The net proceeds of the offering after deducting underwriting discounts and other estimated offering expenses were approximately $217,000. The Company intends to use the net proceeds of the offering for general corporate purposes to support its continued growth, including investments in Renasant Bank and future strategic acquisitions.

### Financial Condition

The following discussion provides details regarding the changes in significant balance sheet accounts at September 30, 2024 compared to December 31, 2023.

#### Assets

Total assets were $17,958,840 at September 30, 2024 compared to $17,360,535 at December 31, 2023.

#### Investments

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 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:

|  | September 30, 2024 Balance | Percentage of Portfolio | December 31, 2023 Balance | Percentage of Portfolio |
| --- | ---: | ---: | ---: | ---: |
| Obligations of other U.S. Government agencies and corporations | $— | —% | $— | —% |
| Obligations of states and political subdivisions | 304,012 | 15.87 | 322,764 | 15.05 |
| Mortgage-backed securities | 1,444,397 | 75.41 | 1,695,604 | 79.06 |
| Other debt securities | 166,998 | 8.72 | 126,407 | 5.89 |
|  | $1,915,407 | 100.00% | $2,144,775 | 100.00% |
| Allowance for credit losses - held to maturity securities | (32) |  | (32) |  |
| Securities, net of allowance for credit losses | $1,915,375 |  | $2,144,743 |  |

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

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

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

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

#### Loans

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

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:

|  | September 30, 2024 Total Loans | Percentage of Total Loans | December 31, 2023 Total Loans | Percentage of Total Loans |
| --- | ---: | ---: | ---: | ---: |
| Commercial, financial, agricultural | $1,804,961 | 14.29% | $1,871,821 | 15.15% |
| Lease financing, net of unearned income | 98,159 | 0.78 | 116,020 | 0.94 |
| Real estate – construction: |  |  |  |  |
| Residential | 258,356 | 2.05 | 269,616 | 2.18 |
| Commercial | 940,482 | 7.45 | 1,063,781 | 8.61 |
| Total real estate – construction | 1,198,838 | 9.50 | 1,333,397 | 10.79 |
| Real estate – 1-4 family mortgage: |  |  |  |  |
| Primary | 2,409,912 | 19.08 | 2,422,482 | 19.61 |
| Home equity | 537,372 | 4.26 | 522,688 | 4.23 |
| Rental/investment | 390,029 | 3.09 | 373,755 | 3.03 |
| Land development | 102,725 | 0.81 | 120,994 | 0.98 |
| Total real estate – 1-4 family mortgage | 3,440,038 | 27.24 | 3,439,919 | 27.85 |
| Real estate – commercial mortgage: |  |  |  |  |
| Owner-occupied | 1,845,791 | 14.61 | 1,648,961 | 13.35 |
| Non-owner occupied | 4,045,666 | 32.04 | 3,733,174 | 30.23 |
| Land development | 103,695 | 0.82 | 104,415 | 0.85 |
| Total real estate – commercial mortgage | 5,995,152 | 47.47 | 5,486,550 | 44.43 |
| Installment loans to individuals | 90,500 | 0.72 | 103,523 | 0.84 |
| Total loans, net of unearned income | $12,627,648 | 100.00% | $12,351,230 | 100.00% |

Loan concentrations are considered to exist when there are amounts loaned to a number of borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. At September 30, 2024, there were no concentrations of loans exceeding 10% of total loans which are not disclosed as a category of loans separate from the categories listed above.

#### Deposits

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

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

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

#### Borrowed Funds

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

|  | September 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Security repurchase agreements | $8,732 | $7,577 |
| Short-term borrowings from the FHLB | 100,000 | 300,000 |
|  | $108,732 | $307,577 |

Long-term debt typically consists of long-term FHLB advances, our junior subordinated debentures and our subordinated notes. The following table presents our long-term debt by type as of the dates presented:

|  | September 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Junior subordinated debentures | $113,681 | $112,978 |
| Subordinated notes | 319,496 | 316,422 |
|  | $433,177 | $429,400 |

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

The Company has issued subordinated notes, the proceeds of which have been used for general corporate purposes, including providing capital to support the Company’s growth organically or through strategic acquisitions, repaying indebtedness and financing investments and capital expenditures, and for investments in Renasant Bank as regulatory capital. The subordinated notes qualify as Tier 2 capital under current regulatory guidelines.

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

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 presented.

|  | Three Months Ended September 30, 2024 Pre-tax After-tax Impact to Diluted EPS | September 30, 2023 Pre-tax After-tax Impact to Diluted EPS |
| --- | ---: | ---: |
| Merger and conversion expenses | $11,273 $9,456 $0.15 | $— $— $— |
| Gain on sale of insurance agency | (53,349) (38,951) (0.63) | — — — |
|  | **Nine Months Ended** |  |
|  | **September 30, 2024** | **September 30, 2023** |
|  | **Pre-tax** **After-tax** **Impact to Diluted EPS** | **Pre-tax** **After-tax** **Impact to Diluted EPS** |
| Merger and conversion expenses | $11,273 $9,456 $0.16 | $— $— $— |
| Loss on sale of securities | — — — | 22,438 17,859 0.31 |
| Gain on sale of insurance agency | (53,349) (38,951) (0.67) | — — — |

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

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

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

| Assets Interest-earning assets: | Three Months Ended September 30, 2024 Average Balance | Interest Income/ Expense | Yield/ Rate | 2023 Average Balance | Interest Income/ Expense | Yield/ Rate |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Loans held for investment | $12,584,104 | $204,935 | 6.47% | $12,030,109 | $183,521 | 6.06% |
| Loans held for sale | 272,110 | 4,212 | 6.19 | 227,982 | 3,751 | 6.58 |
| Securities: |  |  |  |  |  |  |
| Taxable | 1,794,421 | 9,212 | 2.05 | 2,097,285 | 9,459 | 1.80 |
| Tax-exempt(1) | 262,621 | 1,390 | 2.12 | 285,588 | 1,566 | 2.19 |
| Interest-bearing balances with banks | 894,313 | 11,872 | 5.28 | 729,049 | 10,128 | 5.51 |
| Total interest-earning assets | 15,807,569 | 231,621 | 5.82 | 15,370,013 | 208,425 | 5.39 |
| Cash and due from banks | 189,425 |  |  | 180,708 |  |  |
| Intangible assets | 1,004,701 |  |  | 1,012,460 |  |  |
| Other assets | 679,969 |  |  | 672,232 |  |  |
| Total assets | $17,681,664 |  |  | $17,235,413 |  |  |
| Liabilities and shareholders’ equity |  |  |  |  |  |  |
| Interest-bearing liabilities: |  |  |  |  |  |  |
| Deposits: |  |  |  |  |  |  |
| Interest-bearing demand(2) | $7,333,508 | $60,326 | 3.26% | $6,520,145 | $41,464 | 2.52% |
| Savings deposits | 815,545 | 729 | 0.36 | 942,619 | 793 | 0.33 |
| Brokered deposits | 150,991 | 1,998 | 5.25 | 947,387 | 12,732 | 5.33 |
| Time deposits | 2,546,860 | 27,734 | 4.33 | 2,002,506 | 15,917 | 3.15 |
| Total interest-bearing deposits | 10,846,904 | 90,787 | 3.32 | 10,412,657 | 70,906 | 2.70 |
| Borrowed funds | 562,146 | 7,258 | 5.14 | 564,772 | 7,388 | 5.22 |
| Total interest-bearing liabilities | 11,409,050 | 98,045 | 3.41 | 10,977,429 | 78,294 | 2.84 |
| Noninterest-bearing deposits | 3,509,266 |  |  | 3,800,160 |  |  |
| Other liabilities | 209,762 |  |  | 226,219 |  |  |
| Shareholders’ equity | 2,553,586 |  |  | 2,231,605 |  |  |
| Total liabilities and shareholders’ equity | $17,681,664 |  |  | $17,235,413 |  |  |
| Net interest income/net interest margin |  | $133,576 | 3.36% |  | $130,131 | 3.36% |

(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.

| Assets Interest-earning assets: | Nine Months Ended September 30, 2024 Average Balance | Interest Income/ Expense | Yield/ Rate | 2023 Average Balance | Interest Income/ Expense | Yield/ Rate |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Loans held for investment | $12,522,802 | $600,245 | 6.39% | $11,866,662 | $523,040 | 5.89% |
| Loans held for sale | 215,978 | 10,050 | 6.20 | 175,100 | 8,478 | 6.46 |
| Securities: |  |  |  |  |  |  |
| Taxable | 1,839,249 | 27,975 | 2.03 | 2,402,739 | 35,129 | 1.95 |
| Tax-exempt(1) | 265,601 | 4,346 | 2.18 | 349,617 | 6,076 | 2.32 |
| Interest-bearing balances with banks | 687,318 | 27,527 | 5.35 | 573,498 | 22,536 | 5.25 |
| Total interest-earning assets | 15,530,948 | 670,143 | 5.75 | 15,367,616 | 595,259 | 5.18 |
| Cash and due from banks | 188,485 |  |  | 189,324 |  |  |
| Intangible assets | 1,007,710 |  |  | 1,012,613 |  |  |
| Other assets | 694,450 |  |  | 674,476 |  |  |
| Total assets | $17,421,593 |  |  | $17,244,029 |  |  |
| Liabilities and shareholders’ equity |  |  |  |  |  |  |
| Interest-bearing liabilities: |  |  |  |  |  |  |
| Deposits: |  |  |  |  |  |  |
| Interest-bearing demand(2) | $7,128,721 | $168,958 | 3.16% | $6,235,322 | $90,947 | 1.95% |
| Savings deposits | 838,443 | 2,188 | 0.35 | 999,436 | 2,432 | 0.33 |
| Brokered deposits | 296,550 | 11,929 | 5.36 | 719,603 | 27,445 | 5.10 |
| Time deposits | 2,451,733 | 77,946 | 4.25 | 1,769,246 | 34,339 | 2.59 |
| Total interest-bearing deposits | 10,715,447 | 261,021 | 3.25 | 9,723,607 | 155,163 | 2.13 |
| Borrowed funds | 569,476 | 22,098 | 5.17 | 1,026,467 | 38,351 | 4.99 |
| Total interest-bearing liabilities | 11,284,923 | 283,119 | 3.35 | 10,750,074 | 193,514 | 2.41 |
| Noninterest-bearing deposits | 3,512,318 |  |  | 4,073,265 |  |  |
| Other liabilities | 221,932 |  |  | 208,491 |  |  |
| Shareholders’ equity | 2,402,420 |  |  | 2,212,199 |  |  |
| Total liabilities and shareholders’ equity | $17,421,593 |  |  | $17,244,029 |  |  |
| Net interest income/net interest margin |  | $387,024 | 3.32% |  | $401,745 | 3.49% |

(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%.

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

The following tables set forth a summary of the changes in interest earned, on a tax equivalent basis, and interest paid resulting from changes in volume and rates for the Company for the three and nine months ended September 30, 2024, as compared to the same periods in 2023 (the changes attributable to the combined impact of yield/rate and volume have been allocated on a pro-rata basis using the absolute value of amounts calculated):

| Interest income: | Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023 Volume | Rate | Net |
| --- | ---: | ---: | ---: |
| Loans held for investment | $8,662 | $12,752 | $21,414 |
| Loans held for sale | 695 | (234) | 461 |
| Securities: |  |  |  |
| Taxable | (1,499) | 1,252 | (247) |
| Tax-exempt | (123) | (53) | (176) |
| Interest-bearing balances with banks | 2,183 | (439) | 1,744 |
| Total interest-earning assets | 9,918 | 13,278 | 23,196 |
| **Interest expense:** |  |  |  |
| Interest-bearing demand deposits | 5,620 | 13,242 | 18,862 |
| Savings deposits | (112) | 48 | (64) |
| Brokered deposits | (10,542) | (192) | (10,734) |
| Time deposits | 4,975 | 6,842 | 11,817 |
| Borrowed funds | (45) | (85) | (130) |
| Total interest-bearing liabilities | (104) | 19,855 | 19,751 |
| Change in net interest income | $10,022 | $(6,577) | $3,445 |
|  | **Nine months ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023** |  |  |
|  | **Volume** | **Rate** | **Net** |
| **Interest income:** |  |  |  |
| Loans held for investment | $30,357 | $46,848 | $77,205 |
| Loans held for sale | 1,912 | (340) | 1,572 |
| Securities: |  |  |  |
| Taxable | (8,515) | 1,361 | (7,154) |
| Tax-exempt | (1,391) | (339) | (1,730) |
| Interest-bearing balances with banks | 4,572 | 419 | 4,991 |
| Total interest-earning assets | 26,935 | 47,949 | 74,884 |
| **Interest expense:** |  |  |  |
| Interest-bearing demand deposits | 14,651 | 63,360 | 78,011 |
| Savings deposits | (405) | 161 | (244) |
| Brokered deposits | (16,851) | 1,335 | (15,516) |
| Time deposits | 16,456 | 27,151 | 43,607 |
| Borrowed funds | (17,590) | 1,337 | (16,253) |
| Total interest-bearing liabilities | (3,739) | 93,344 | 89,605 |
| Change in net interest income | $30,674 | $(45,395) | $(14,721) |

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

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

|  | Percentage of Total Average Earning Assets Three Months Ended September 30, 2024 | 2023 | Yield Three Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Loans held for investment | 79.61% | 78.27% | 6.47% | 6.06% |
| Loans held for sale | 1.72 | 1.48 | 6.19 | 6.58 |
| Securities | 13.01 | 15.50 | 2.06 | 1.85 |
| Other | 5.66 | 4.75 | 5.28 | 5.51 |
| Total earning assets | 100.00% | 100.00% | 5.82% | 5.39% |

|  | Percentage of Total Average Earning Assets Nine Months Ended September 30, 2024 | 2023 | Yield Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Loans held for investment | 80.63% | 77.22% | 6.39% | 5.89% |
| Loans held for sale | 1.39 | 1.14 | 6.20 | 6.46 |
| Securities | 13.55 | 17.91 | 2.05 | 2.00 |
| Interest-bearing balances with banks | 4.43 | 3.73 | 5.35 | 5.25 |
| Total earning assets | 100.00% | 100.00% | 5.75% | 5.18% |

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

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 September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Net interest income collected on problem loans | $642 | $(820) | $619 | $(64) |
| Accretable yield recognized on purchased loans | 1,089 | 1,290 | 2,786 | 3,049 |
| Total impact to interest income on loans | $1,731 | $470 | $3,405 | $2,985 |
| Impact to loan yield | 0.05% | 0.02% | 0.04% | 0.03% |
| Impact to net interest margin | 0.04% | 0.01% | 0.03% | 0.02% |

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

Investment income, on a tax equivalent basis, decreased $423 to $10,602 for the third quarter of 2024 from $11,025 for the third quarter of 2023. Investment income, on a tax equivalent basis, decreased $8,884 to $32,321 for the nine months ended September 30, 2024 from $41,205 for the same period in 2023. The Company sold a portion of its securities portfolio in each of the first quarter of 2024 and the second quarter of 2023, driving the decrease to investment income for both the three and nine months ended September 30, 2024. The tax equivalent yield on the investment portfolio for the third quarter of 2024 was

2.06%, up 21 basis points from 1.85% for the same period in 2023. The tax equivalent yield on the investment portfolio for the nine months ended September 30, 2024 was 2.05%, up five basis points from 2.00% for the same period in 2023.

Interest expense was $98,045 for the third quarter of 2024 as compared to $78,294 for the same period in 2023. Interest expense for the nine months ended September 30, 2024 was $283,119 as compared to $193,514 for the same period in 2023.

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

|  | Percentage of Total Average Deposits and Borrowed Funds Three Months Ended September 30, 2024 | 2023 | Cost of Funds Three Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Noninterest-bearing demand | 23.52% | 25.72% | —% | —% |
| Interest-bearing demand | 49.16 | 44.12 | 3.26 | 2.52 |
| Savings | 5.47 | 6.38 | 0.36 | 0.33 |
| Brokered deposits | 1.01 | 6.41 | 5.25 | 5.33 |
| Time deposits | 17.07 | 13.55 | 4.33 | 3.15 |
| Short term borrowings | 0.77 | 0.78 | 1.11 | 1.24 |
| Subordinated notes | 2.24 | 2.28 | 5.50 | 5.57 |
| Other borrowed funds | 0.76 | 0.76 | 8.17 | 8.25 |
| Total deposits and borrowed funds | 100.00% | 100.00% | 2.61% | 2.11% |

|  | Percentage of Total Average Deposits and Borrowed Funds Nine Months Ended September 30, 2024 | 2023 | Cost of Funds Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Noninterest-bearing demand | 23.74% | 27.48% | —% | —% |
| Interest-bearing demand | 48.18 | 42.06 | 3.16 | 1.95 |
| Savings | 5.67 | 6.74 | 0.35 | 0.33 |
| Brokered deposits | 2.00 | 4.85 | 5.36 | 5.10 |
| Time deposits | 16.57 | 11.94 | 4.25 | 2.59 |
| Short-term borrowings | 0.83 | 3.90 | 1.44 | 4.24 |
| Subordinated notes | 2.25 | 2.27 | 5.51 | 5.30 |
| Other long term borrowings | 0.76 | 0.76 | 8.23 | 7.93 |
| Total deposits and borrowed funds | 100.00% | 100.00% | 2.55% | 1.75% |

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

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

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 September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| ---: | ---: | ---: | ---: |
| 2.01% | 0.88% | 1.30% | 0.72% |

Total noninterest income includes fees generated from deposit services and other fees and commissions, income from our insurance, wealth management and mortgage banking operations, realized gains and losses on the sale of securities, the gain from the sale of our insurance agency and all other noninterest income. Our focus is to develop and enhance our products that generate noninterest income in order to diversify revenue sources. Noninterest income was $89,299 for the third quarter of 2024 as compared to $38,200 for the same period in 2023. Noninterest income was $169,442 for the nine months ended September 30, 2024 as compared to $92,719 for the same period in 2023. The increase over the three and nine month periods is primarily due to the gain on sale of our insurance agency business on July 1, 2024, as described under the “Recent Developments” heading above. Noninterest income in future periods will be negatively impacted by this sale, as we will no longer earn insurance commissions (the amount of these commissions for the three and nine months ended September 30, 2023 are described below).

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

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

Prior to its sale on July 1, 2024, Renasant Insurance offered a range of commercial and personal insurance products through major insurance carriers. Income earned on insurance products was $3,264 for the three months ended September 30, 2023, and was $5,474 and $8,519 for the nine months ended September 30, 2024 and 2023, respectively.

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

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

|  | Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Gain on sales of loans, net (1) | $4,499 | $3,297 | $14,233 | $12,713 |
| Fees, net | 2,646 | 2,376 | 7,366 | 7,041 |
| Mortgage servicing income, net(2) | 1,302 | 1,860 | 7,916 | 6,067 |
| Mortgage banking income, net | $8,447 | $7,533 | $29,515 | $25,821 |

(1) Gain on sales of loans, net includes pipeline fair value adjustments

(2) Mortgage servicing income, net includes gain on sale of MSR

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

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

#### Noninterest Expense

*Noninterest Expense to Average Assets*

| Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| ---: | ---: | ---: | ---: |
| 2.74% | 2.49% | 2.66% | 2.54% |

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

Salaries and employee benefits increased $1,849 to $71,307 for the third quarter of 2024 as compared to $69,458 for the same period in 2023. Salaries and employee benefits increased $3,581 to $213,508 for the nine months ended September 30, 2024 as compared to $209,927 for the same period in 2023. The minimal change in salaries and employee benefits is primarily due to annual merit increases implemented in April 2024 and an increase in the cost associated with the Company’s health and welfare benefits offered to its employees offset by decreases in salaries and benefits within our mortgage division attributable to declines in mortgage production as well as the termination of insurance employees following the sale of substantially all of the assets of Renasant Insurance.

Data processing costs were $4,133 in the third quarter of 2024 as compared to $3,907 for the same period in 2023 and were $11,885 for the nine months ended September 30, 2024 as compared to $11,224 for the same period in 2023. The Company continues to examine new and existing contracts to negotiate favorable terms to offset the increased variable cost components of our data processing costs, such as new accounts and increased transaction volume.

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

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

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

Amortization of intangible assets totaled $1,160 and $1,311 for the third quarter of 2024 and 2023 and $3,558 and $4,106 for the nine months ended September 30, 2024 and 2023, respectively. This amortization relates to finite-lived intangible assets which are being amortized over the useful lives as determined at acquisition. These finite-lived intangible assets have remaining estimated useful lives ranging from approximately 1 year to 7 years.

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

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

#### Efficiency Ratio

|  | Efficiency Ratio Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Efficiency ratio | 54.73% | 64.38% | 62.33% | 66.28% |

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 efficiency ratio for both the three and nine months ended September 30, 2024 was impacted by the noninterest income generated by the sale of our insurance agency business. We remain committed to aggressively managing our costs within the framework of our business model. Our goal is to improve the efficiency ratio over time from currently reported levels as a result of revenue growth while at the same time controlling noninterest expenses.

#### Income Taxes

Income tax expense for the third quarter of 2024 and 2023 was $24,924 and $10,766, respectively, and $44,502 and $28,722 for the nine months ended September 30, 2024 and 2023, respectively. The increase in income tax expense is primarily due to the increase in pre-tax income generated from the gain on sale of substantially all of the assets of the insurance agency, nondeductible expenses from the planned acquisition of The First and certain changes to the Company’s investment portfolio.

### 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 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 or potentially the chief credit officer.

For loans with a commercial purpose, internal risk-rating grades are assigned by lending, credit administration and loan review personnel, based on an analysis of the financial and collateral strength and other credit attributes underlying each loan. Loan grades range from 10 to 95, with 10 being loans with 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 or private sale 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 nine months of 2024 were $6,348, or 0.07% of average loans (annualized), compared to net charge-offs of $10,566, or 0.12% of average loans (annualized), for the same period in 2023. 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 change in GDP 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. In determining the allowance for credit losses on loans evaluated on a collective basis, the Company further categorizes the loan segments based on risk rating. The Company uses two CECL models: (1) for the Real Estate - 1-4 Family Mortgage, Real Estate - Construction and the Installment Loans to Individuals portfolio segments, the Company uses a loss rate model, based on average historical life-of-loan loss rates, 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 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, 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:

|  | September 30, 2024 Balance | % of Total | December 31, 2023 Balance | % of Total | September 30, 2023 Balance | % of Total |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Commercial, financial, agricultural | $43,053 | 14.29% | $43,980 | 15.15% | $44,444 | 14.96% |
| Lease financing | 2,384 | 0.78 | 2,515 | 0.94 | 3,355 | 0.99 |
| Real estate – construction | 16,656 | 9.50 | 18,612 | 10.79 | 19,656 | 11.57 |
| Real estate – 1-4 family mortgage | 47,219 | 27.24 | 47,283 | 27.85 | 45,799 | 27.94 |
| Real estate – commercial mortgage | 82,087 | 47.47 | 77,020 | 44.43 | 75,233 | 43.65 |
| Installment loans to individuals | 8,979 | 0.72 | 9,168 | 0.84 | 9,286 | 0.89 |
| Total | $200,378 | 100.00% | $198,578 | 100.00% | $197,773 | 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 on loans of $1,210 in the third quarter of 2024 and $8,148 in the first nine months of 2024, as compared to $5,315 in the third quarter of 2023 and $16,275 in the first nine months of 2023. 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. Loan growth as well as changes in credit metrics that influenced our expectations of future credit losses, considered in the context of the existing balance of the allowance for credit losses, resulted in the Company’s model indicating that the aforementioned provision for credit losses on loans was appropriate during the first nine months of 2024.

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

|  | Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Balance at beginning of period | $199,871 | $194,391 | $198,578 | $192,090 |
| Impact of purchased credit deteriorated loans acquired during the period | — | — | — | (26) |
| Charge-offs |  |  |  |  |
| Commercial, financial, agricultural | 347 | 2,252 | 882 | 7,720 |
| Lease financing | 642 | 641 | 642 | 641 |
| Real estate – construction | — | — | — | 57 |
| Real estate – 1-4 family mortgage | 256 | 130 | 546 | 345 |
| Real estate – commercial mortgage | 10 | — | 5,737 | 5,512 |
| Installment loans to individuals | 649 | 607 | 1,379 | 1,997 |
| Total charge-offs | 1,904 | 3,630 | 9,186 | 16,272 |
| Recoveries |  |  |  |  |
| Commercial, financial, agricultural | 514 | 690 | 1,385 | 2,689 |
| Lease financing | 8 | 2 | 26 | 13 |
| Real estate – construction | — | 48 | — | 48 |
| Real estate – 1-4 family mortgage | 57 | 181 | 130 | 375 |
| Real estate – commercial mortgage | 11 | 208 | 116 | 697 |
| Installment loans to individuals | 611 | 568 | 1,181 | 1,884 |
| Total recoveries | 1,201 | 1,697 | 2,838 | 5,706 |
| Net charge-offs | 703 | 1,933 | 6,348 | 10,566 |
| Provision for credit losses on loans | 1,210 | 5,315 | 8,148 | 16,275 |
| Balance at end of period | $200,378 | $197,773 | $200,378 | $197,773 |
| Net charge-offs (annualized) to average loans | 0.02% | 0.06% | 0.07% | 0.12% |
| Net charge-offs to allowance for credit losses on loans | 0.35% | 0.98% | 3.17% | 5.34% |
| Allowance for credit losses on loans to: |  |  |  |  |
| Total loans |  |  | 1.59% | 1.63% |
| Nonperforming loans |  |  | 168.07% | 282.24% |
| Nonaccrual loans |  |  | 175.97% | 284.40% |

63

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

|  | Nine Months Ended September 30, 2024 Net Charge-offs (Recoveries) | Average Loans | Annualized Net Charge-offs (Recoveries) to Average Loans | September 30, 2023 Net Charge-offs (Recoveries) | Average Loans | Annualized Net Charge-offs to Average Loans |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Commercial, financial, agricultural | $(503) | $1,850,707 | (0.04)% | $5,031 | $1,740,424 | 0.39% |
| Lease financing | 616 | 103,954 | 0.79% | 628 | 119,564 | 0.70% |
| Real estate – construction | — | 1,297,036 | —% | 9 | 1,336,385 | —% |
| Real estate – 1-4 family mortgage | 416 | 3,422,711 | 0.02% | (30) | 3,373,754 | —% |
| Real estate – commercial mortgage | 5,621 | 5,752,206 | 0.13% | 4,815 | 5,183,733 | 0.12% |
| Installment loans to individuals | 198 | 96,188 | 0.27% | 113 | 112,802 | 0.13% |
| Total | $6,348 | $12,522,802 | 0.07% | $10,566 | $11,866,662 | 0.12% |

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

| Real estate – construction: | Three Months Ended September 30, 2024 | 2023 | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Residential | $— | $(48) | $— | $9 |
| Total real estate – construction | — | (48) | — | 9 |
| Real estate – 1-4 family mortgage: |  |  |  |  |
| Primary | 167 | (91) | 327 | (156) |
| Home equity | 74 | (20) | 93 | 79 |
| Rental/investment | (41) | 66 | (3) | 65 |
| Land development | — | (6) | (1) | (18) |
| Total real estate – 1-4 family mortgage | 200 | (51) | 416 | (30) |
| Real estate – commercial mortgage: |  |  |  |  |
| Owner-occupied | (9) | (205) | (68) | 113 |
| Non-owner occupied | (1) | (3) | 5,682 | 4,702 |
| Land development | 7 | — | 7 | — |
| Total real estate – commercial mortgage | (3) | (208) | 5,621 | 4,815 |
| Total net charge-offs (recoveries) of loans secured by real estate | $197 | $(307) | $6,037 | $4,794 |

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 tables below.

| Three Months Ended September 30, Allowance for credit losses on unfunded loan commitments: | 2024 | 2023 |
| --- | ---: | ---: |
| Beginning balance | $15,718 | $17,618 |
| Recovery of provision for credit losses on unfunded loan commitments | (275) | (700) |
| Ending balance | $15,443 | $16,918 |
| **Nine Months Ended September 30,** | **2024** | **2023** |
| Allowance for credit losses on unfunded loan commitments: |  |  |
| Beginning balance | $16,918 | $20,118 |
| Recovery of provision for credit losses on unfunded loan commitments | (1,475) | (3,200) |
| Ending balance | $15,443 | $16,918 |

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 table provides details of the Company’s nonperforming assets as of the dates presented.

|  | September 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Nonaccruing loans | $113,872 | $68,816 |
| Accruing loans past due 90 days or more | 5,351 | 554 |
| Total nonperforming loans | 119,223 | 69,370 |
| Other real estate owned | 9,136 | 9,622 |
| Total nonperforming assets | $128,359 | $78,992 |
| Nonperforming loans to total loans | 0.94% | 0.56% |
| Nonaccruing loans to total loans | 0.90% | 0.56% |
| Nonperforming assets to total assets | 0.71% | 0.46% |

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

|  | September 30, 2024 | December 31, 2023 | September 30, 2023 |
| --- | ---: | ---: | ---: |
| Commercial, financial, agricultural | $5,024 | $6,282 | $7,745 |
| Lease financing | 614 | — | 1,048 |
| Real estate – construction: |  |  |  |
| Residential | 1,307 | — | — |
| Total real estate – construction | 1,307 | — | — |
| Real estate – 1-4 family mortgage: |  |  |  |
| Primary | 55,076 | 44,174 | 42,072 |
| Home equity | 3,296 | 2,849 | 2,598 |
| Rental/investment | 927 | 2,238 | 2,647 |
| Land development | 22 | 19 | 169 |
| Total real estate – 1-4 family mortgage | 59,321 | 49,280 | 47,486 |
| Real estate – commercial mortgage: |  |  |  |
| Owner-occupied | 9,610 | 3,373 | 3,370 |
| Non-owner occupied | 39,944 | 9,774 | 9,920 |
| Land development | 3,169 | 300 | 247 |
| Total real estate – commercial mortgage | 52,723 | 13,447 | 13,537 |
| Installment loans to individuals | 234 | 361 | 257 |
| Total nonperforming loans | $119,223 | $69,370 | $70,073 |

Total nonperforming loans as a percentage of total loans were 0.94% as of September 30, 2024 as compared to 0.56% and 0.77% as of December 31, 2023 and September 30, 2023, respectively. The Company’s coverage ratio, or its allowance for credit losses on loans as a percentage of nonperforming loans, was 168.07% as of September 30, 2024 as compared to 286.26% as of December 31, 2023 and 282.24% as of September 30, 2023. The increase in nonperforming loans is due to a few larger loans, which management believes to be adequately reserved at September 30, 2024.

Management has evaluated loans classified as nonperforming and believes that all nonperforming loans have been adequately reserved for in the allowance for credit losses at September 30, 2024. Management also continually monitors past due loans for potential credit quality deterioration. Total loans 30-89 days past due but still accruing interest were $17,523, or 0.14% of total loans, at September 30, 2024 as compared to $54,031, or 0.44% of total loans, at December 31, 2023 and $13,641, or 0.11% of total loans, at September 30, 2023.

Certain modifications of loans made to borrowers experiencing financial difficulty in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay (including an extension of the amortization period), or a term extension, excluding covenant waivers and modification of contingent acceleration clauses, are required to be disclosed in accordance with ASU 2022-02, “*Financial Instruments - Credit Losses (Topic326): Troubled Debt Restructurings and Vintage Disclosures” (“*ASU 2022-02”). All modifications for the nine months ended September 30, 2024 and 2023 and which met the disclosure criteria in ASU 2022-02 were performing in accordance with their modified terms at September 30, 2024 and 2023, respectively. The total amortized cost basis of loans that were experiencing financial difficulty, modified during the nine months ended September 30, 2024 and 2023, were $15,747 and $6,497, respectively. Unused commitments totaled $464 and $721 at September 30, 2024 and 2023, respectively. Upon the Company’s determination that a modified loan has been subsequently deemed uncollectible, the loan, or portion of the loan, is charged off, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted accordingly. For more information about loan modifications made to borrowers experiencing financial difficulty, see the information under the heading “Certain Modifications to Borrowers Experiencing Financial Difficulty” in Note 3, “Loans,” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements.

The following table provides details of the Company’s other real estate owned, net of valuation allowance and direct write-downs, as of the dates presented:

|  | September 30, 2024 | December 31, 2023 | September 30, 2023 |
| --- | ---: | ---: | ---: |
| Residential real estate | $2,774 | $1,211 | $1,045 |
| Commercial real estate | 6,336 | 8,407 | 8,182 |
| Residential land development | 19 | 4 | 4 |
| Commercial land development | 7 | — | 27 |
| Total other real estate owned | $9,136 | $9,622 | $9,258 |

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

|  | 2024 | 2023 |
| --- | ---: | ---: |
| Balance at January 1 | $9,622 | $1,763 |
| Transfers of loans | 3,286 | 10,073 |
| Impairments | (67) | (18) |
| Dispositions | (1,323) | (2,544) |
| Other | (2,382) | (16) |
| Balance at September 30 | $9,136 | $9,258 |

Other real estate owned with a cost basis of $1,323 was sold during the nine months ended September 30, 2024, resulting in a net gain of $143, while other real estate owned with a cost basis of $2,544 was sold during the nine months ended September 30, 2023, resulting in a net gain of $289.

#### 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, investing 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. Changes in rates may also limit our liquidity, making it more costly for the Company to generate funds to make loans and to satisfy customers wishing to withdraw deposits.

Because of the impact of interest rate fluctuations on our profitability and liquidity, we actively monitor and manage our interest rate risk exposure. We have an Asset/Liability Committee (“ALCO”), which is comprised of various members of senior management and is authorized by the Board of Directors to monitor interest rate sensitivity and liquidity risk, over the short-, medium-, and long-term, and to make decisions relating to these processes. The ALCO’s goal is to structure our asset/liability composition to maximize net interest income while managing interest rate risk and preserving adequate liquidity so as to minimize the adverse impact of changes in interest rates on net interest income, liquidity and capital. We regularly monitor liquidity and stress our liquidity position in various simulated scenarios, which are incorporated in our contingency funding plan outlining different potential liquidity environments. 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.

Net interest income forecast simulations measure the short- and medium-term earnings exposure from changes in market interest rates in a rigorous and explicit fashion. Our current financial position is combined with assumptions regarding future business to calculate future net interest income under various hypothetical rate scenarios. EVE measures our long-term earnings exposure from changes in market rates of interest. EVE is defined as the present value of assets minus the present value of liabilities at a point in time for a given set of market rate assumptions. An increase in EVE due to a specified rate change indicates an improvement in the long-term earnings capacity of the balance sheet assuming that the rate change remains in effect over the life of the current balance sheet.

The following table presents the projected impact of a change in interest rates on (1) static EVE and (2) earnings at risk (that is, net interest income) for the 1-12 and 13-24 month periods commencing October 1, 2024, in each case as compared to the result under rates present in the market on September 30, 2024. 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.

| Immediate Change in Rates of (in basis points): Static | Percentage Change In: Economic Value Equity (EVE) 1-12 Months | Earning at Risk (Net Interest Income) 13-24 Months |  |
| ---: | ---: | ---: | ---: |
| +100 | 3.74% | 2.67% | 3.99% |
| -100 | (4.68)% | (3.81)% | (5.15)% |
| -200 | (10.07)% | (7.28)% | (10.08)% |

The rate shock results for the net interest income simulations for the next 24 months produce an asset sensitive position at September 30, 2024. 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 described in the table above. 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, the impact of market conditions on the securities yields and interest rates of our borrowings, 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, collars, 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 9, “Derivative Instruments,” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements. The next section also details our available sources of liquidity, both on and off-balance sheet.

### 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 brokered deposits and 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. We may also access the brokered deposit market where rates are favorable to other sources of liquidity (especially in light of collateral requirements for certain borrowings) and core deposits are not sufficient for meeting our current and anticipated short- or long-term liquidity needs. During the first nine months of 2024, brokered deposits decreased by $334,713 as compared to the balance at December 31, 2023. The Bank obtained brokered deposits in the amount of $120,345 during the first nine months of 2024 and paid down brokered deposits of $455,058 during the same period. Management continually monitors the Bank’s liquidity and non-core dependency ratios to ensure compliance with targets established by the ALCO.

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 11.64% 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 September 30, 2024, securities with a carrying value of $824,163 were pledged to secure government, public fund and trust deposits and as collateral for short-term borrowings and derivative instruments as compared to securities with a carrying value of $895,044 similarly pledged at December 31, 2023.

Other sources available for meeting liquidity needs include federal funds purchased, short-term and long-term advances from the FHLB and borrowings from the Federal Reserve Discount Window. Interest is charged at the prevailing market rate on federal funds purchased, FHLB advances and borrowings from the Federal Reserve Discount Window. There were $100,000 in short-term borrowings from the FHLB at September 30, 2024, as compared to $300,000 at December 31, 2023. 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. There were no outstanding long-term advances with the FHLB at September 30, 2024 or December 31, 2023. The total amount of the remaining credit available to us from the FHLB at September 30, 2024 was $3,449,164. The credit available at the Federal Reserve Discount Window at September 30, 2024 was $634,636 with no borrowings outstanding as of such date. We also maintain lines of credit with other commercial banks totaling $160,000. These are unsecured lines of credit with the majority maturing at various times within the next twelve months. There were no amounts outstanding under these lines of credit at September 30, 2024 or December 31, 2023.

Finally, we can access the capital markets to meet liquidity needs. 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 and wealth management operations as well as other business opportunities. Our common stock offering described under the “Recent Developments” heading above reflects our access of the capital markets as described in this paragraph. In addition, in previous years, we have accessed the capital markets to generate liquidity in the form of subordinated notes. We have also assumed subordinated notes as part of acquisitions. The carrying value of subordinated notes, net of unamortized debt issuance costs, was $319,496 at September 30, 2024.

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

|  | Percentage of Total Average Deposits and Borrowed Funds Nine Months Ended September 30, 2024 | 2023 | Cost of Funds Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: | ---: | ---: |
| Noninterest-bearing demand | 23.74% | 27.48% | —% | —% |
| Interest-bearing demand | 48.18 | 42.06 | 3.16 | 1.95 |
| Savings | 5.67 | 6.74 | 0.35 | 0.33 |
| Brokered deposits | 2.00 | 4.85 | 5.36 | 5.10 |
| Time deposits | 16.57 | 11.94 | 4.25 | 2.59 |
| Short-term borrowings | 0.83 | 3.90 | 1.44 | 4.24 |
| Subordinated notes | 2.25 | 2.27 | 5.51 | 5.30 |
| Other borrowed funds | 0.76 | 0.76 | 8.23 | 7.93 |
| Total deposits and borrowed funds | 100.00% | 100.00% | 2.55% | 1.75% |

The estimated amount of uninsured and uncollateralized deposits at September 30, 2024 was $4,574,707. Collateralized public funds over FDIC insurance limits were $1,804,840 at September 30, 2024.

Our strategy in choosing funds is focused on minimizing cost in the context of our balance sheet composition, interest rate risk position and liquidity forecast. Accordingly, management targets growth of core deposits, focusing on 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 $1,275,620 at September 30, 2024, as compared to $741,156 at September 30, 2023. The increase is largely driven by growth in deposits and proceeds from the aforementioned common stock offering offset to some degree by the payoff of certain short-term borrowings.

Cash provided by investing activities for the nine months ended September 30, 2024 was $25,572, as compared to cash provided by investing activities of $89,172 for the nine months ended September 30, 2023. Proceeds from the sale, maturity or call of securities within our investment portfolio were $319,665 for the nine months ended September 30, 2024, as compared to $697,076 for the same period in 2023. A portion of the securities portfolio was sold during the first quarter of 2024, resulting in proceeds of $177,185 of which a portion were used to purchase higher yielding securities, while the remainder was used to fund loan growth. A portion of the securities portfolio was sold during the second quarter of 2023, resulting in proceeds of $488,981 which were used to pay off short-term FHLB borrowings and to fund loan growth. Purchases of investment securities were $60,656 during the first nine months of 2024 and $9,646 for the same period in 2023.

Cash provided by financing activities for the nine months ended September 30, 2024 was $411,366, as compared to cash provided by financing activities of $27,868 for the same period in 2023. Deposits increased $432,966 and $670,144 for the nine months ended September 30, 2024 and 2023, 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 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.

Federal Reserve regulations also limit the amount the Bank may loan to the Company unless such loans are collateralized by specific obligations. At September 30, 2024, the maximum amount available for transfer from the Bank to the Company in the form of loans was $198,943. 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 September 30, 2024.

These restrictions did not have any impact on the Company’s ability to meet its cash obligations in the nine months ended September 30, 2024, 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:

|  | September 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Loan commitments | $2,826,873 | $3,091,997 |
| Standby letters of credit | 88,275 | 113,970 |

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 also reviews these commitments as part of its analysis of loan concentrations within the loan portfolio. 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, collars, caps and/or floors, as part of its ongoing efforts to mitigate its interest rate risk exposure and to facilitate the needs of its customers. The Company enters into derivative instruments that are not designated as hedging instruments to help its commercial customers manage their exposure to interest rate fluctuations. To mitigate the interest rate risk associated with these customer contracts, the Company enters into an offsetting derivative contract position with other financial institutions. The Company manages its credit risk, or potential risk of default by its commercial customers, through credit limit approval and monitoring procedures. At September 30, 2024, the Company had notional amounts of $830,409 on interest rate contracts with corporate customers and

$833,761 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 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. 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 and receives a fixed rate of interest. The Company utilizes interest rate collars to protect against interest rate fluctuations on certain variable-rate loans. Under these contracts, interest income is limited to the interest rate cap; however, interest income is protected when market rates fall below the floor strike rate.

For more information about the Company’s derivatives, see Note 9, “Derivative Instruments,” in the Notes to Consolidated Financial Statements of the Company in Item 1, Financial Statements.

### Shareholders’ Equity and Regulatory Matters

Total shareholders’ equity of the Company was $2,658,078 at September 30, 2024 compared to $2,297,383 at December 31, 2023. Book value per share was $41.82 and $40.92 at September 30, 2024 and December 31, 2023, respectively. The growth in shareholders’ equity was attributable to the previously mentioned common stock offering, current period earnings and declines in accumulated other comprehensive loss, offset by dividends declared.

In October 2023, the Company’s Board of Directors approved a stock repurchase program, authorizing the Company to repurchase up to $100,000 of its outstanding common stock. This program expired in October 2024 and was replaced with a new stock repurchase program authorizing the Company to repurchase up to $100,000 of its outstanding common stock, either in open market purchases or privately-negotiated transactions. The new repurchase program will remain in effect through October 2025 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 previous stock repurchase program in the first nine months of 2024.

The Company has junior subordinated debentures with a carrying value of $113,681 at September 30, 2024, of which $110,090 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 September 30, 2024. 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 we complete the proposed merger with The First (or we make any other acquisition of a financial institution) now that 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 $336,400 at September 30, 2024, of which $333,844 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 Tiers | Tier 1 Capital to Average Assets (Leverage) Common Equity Tier 1 to Risk - Weighted Assets Tier 1 Capital to Risk - Weighted Assets Total Capital to Risk - Weighted Assets |
| --- | --- |
| Well capitalized | 5% or above 6.5% or above 8% or above 10% or above |
| Adequately capitalized | 4% or above 4.5% or above 6% or above 8% or above |
| Undercapitalized | Less than 4% Less than 4.5% Less than 6% Less than 8% |
| Significantly undercapitalized | Less than 3% Less than 3% Less than 4% Less than 6% |
| Critically undercapitalized | Tangible Equity / Total Assets less than 2% |

71

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:

| September 30, 2024 Renasant Corporation: Risk-based capital ratios: | Actual Amount | Ratio | Minimum Capital Requirement to be Well Capitalized Amount | Ratio | Minimum Capital Requirement to be Adequately Capitalized (including the Capital Conservation Buffer) Amount | Ratio |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Common equity tier 1 capital ratio | $1,793,916 | 12.88% | $905,215 | 6.50% | $974,847 | 7.00% |
| Tier 1 risk-based capital ratio | 1,904,006 | 13.67 | 1,114,111 | 8.00 | 1,183,743 | 8.50 |
| Total risk-based capital ratio | 2,412,254 | 17.32 | 1,392,638 | 10.00 | 1,462,270 | 10.50 |
| Leverage capital ratios: |  |  |  |  |  |  |
| Tier 1 leverage ratio | 1,904,006 | 11.32 | 841,001 | 5.00 | 672,801 | 4.00 |
| **Renasant Bank:** |  |  |  |  |  |  |
| Risk-based capital ratios: |  |  |  |  |  |  |
| Common equity tier 1 capital ratio | $1,814,955 | 13.03% | $905,598 | 6.50% | $975,259 | 7.00% |
| Tier 1 risk-based capital ratio | 1,814,955 | 13.03 | 1,114,582 | 8.00 | 1,184,243 | 8.50 |
| Total risk-based capital ratio | 1,989,433 | 14.28 | 1,393,227 | 10.00 | 1,462,889 | 10.50 |
| Leverage capital ratios: |  |  |  |  |  |  |
| Tier 1 leverage ratio | 1,814,955 | 10.80 | 840,402 | 5.00 | 672,322 | 4.00 |
| **December 31, 2023** |  |  |  |  |  |  |
| **Renasant Corporation:** |  |  |  |  |  |  |
| Risk-based capital ratios: |  |  |  |  |  |  |
| Common equity tier 1 capital ratio | $1,469,531 | 10.52% | $908,163 | 6.50% | $978,022 | 7.00% |
| Tier 1 risk-based capital ratio | 1,578,918 | 11.30 | 1,117,740 | 8.00 | 1,187,598 | 8.50 |
| Total risk-based capital ratio | 2,085,531 | 14.93 | 1,397,175 | 10.00 | 1,467,033 | 10.50 |
| Leverage capital ratios: |  |  |  |  |  |  |
| Tier 1 leverage ratio | 1,578,918 | 9.62 | 820,428 | 5.00 | 656,342 | 4.00 |
| **Renasant Bank:** |  |  |  |  |  |  |
| Risk-based capital ratios: |  |  |  |  |  |  |
| Common equity tier 1 capital ratio | $1,714,965 | 12.25% | $909,711 | 6.50% | $979,689 | 7.00% |
| Tier 1 risk-based capital ratio | 1,714,965 | 12.25 | 1,119,644 | 8.00 | 1,189,622 | 8.50 |
| Total risk-based capital ratio | 1,888,104 | 13.49 | 1,399,556 | 10.00 | 1,469,533 | 10.50 |
| Leverage capital ratios: |  |  |  |  |  |  |
| Tier 1 leverage ratio | 1,714,965 | 10.45 | 820,761 | 5.00 | 656,608 | 4.00 |

The Company 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 January 1, 2022.

For more information regarding the capital adequacy guidelines applicable to the Company and Renasant Bank, please refer to Note 14, “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 that 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, “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, 2023, filed with the Securities and Exchange Commission on February 23, 2024. Actual amounts and values as of the balance sheet dates may be materially different from 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 that we believe to be the most critical in preparing our consolidated financial statements relate to the 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, 2023. Since December 31, 2023, there have been no material changes in these critical accounting estimates.

## Market risk

As filed, 278 characters.

There have been no material changes in our market risk since December 31, 2023. For additional information regarding our market risk, see our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 23, 2024.

## Controls and procedures

As filed, 1,134 characters.

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 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.

## Risk factors

As filed, 17,034 characters.

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, 2023.

On July 29, 2024, the Company announced that it had entered into a definitive merger agreement (the “Merger Agreement”) with The First Bancshares, Inc. (“The First”) under which the Company will acquire The First in an all-stock transaction (the “Merger”). The following represents material changes in the Company’s risk factors from the risk factors set forth in our Annual Report on Form 10-K.

### Risks Relating to the Merger

*Failure to complete the Merger could negatively affect our share price, future business and financial results.*

Although we anticipate closing the Merger in the first half of 2025, we cannot guarantee when, or whether, the Merger will be completed. The completion of the Merger is subject to a number of customary conditions which must be fulfilled in order to complete the merger.

If the Merger is not completed for any reason, our ongoing business and financial results may be adversely affected and we will be subject to several risks, including:

- having to pay significant transaction costs without realizing any of the anticipated benefits of completing the Merger;
- failing to pursue other beneficial opportunities due to the focus of our management on the Merger, without realizing any of the anticipated benefits of completing the Merger;
- declines in our share price to the extent that the current market prices reflect an assumption by the market that the Merger will be completed; and
- becoming subject to litigation related to any failure to complete the Merger.

*Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated, cannot be met, or that could have an adverse effect on the combined company following the consummation of the Merger.*

Before the Merger may be completed, various approvals, consents and/or non-objections must be obtained from bank regulatory authorities, including the Federal Reserve, FDIC, and the DBCF. Additionally, the U.S. Department of Justice has between 15 and 30 days following approval of the Merger by the Federal Reserve and FDIC, respectively, to challenge the approval on antitrust grounds.

In determining whether to grant their approvals, the regulatory agencies consider a variety of factors, including the regulatory standing of each party. These approvals could be delayed or not obtained at all, including due to an adverse development in either party’s regulatory standing or in any other factors considered by regulators in granting such approvals; governmental, political or community group inquiries, investigations or opposition; or changes in legislation or the political or regulatory environment generally.

The approvals that are granted may impose terms and conditions, limitations, obligations or costs, or place restrictions on the conduct of the combined company’s business or require changes to the terms of the Merger. There can be no assurance that regulators will not impose any such conditions, limitations, obligations or restrictions and that such conditions, limitations, obligations or restrictions will not have the effect of delaying the completion of any of the Merger, imposing additional material costs on or materially limiting the revenues of the combined company following the Merger or otherwise reduce the anticipated benefits of the Merger if the Merger were consummated successfully within the expected timeframe. In addition, there can be no assurance that any such conditions, terms, obligations or restrictions will not result in the delay or abandonment of the Merger. The completion of the Merger is conditioned on the receipt of the requisite regulatory approvals without the imposition of any materially financially burdensome regulatory condition and the expiration of all statutory waiting periods. Additionally, the completion of the Merger is conditioned on the absence of certain laws, orders, injunctions or decrees issued by any court or governmental entity of competent jurisdiction that would prevent, prohibit or make illegal the completion of the Merger or any of the other transactions contemplated by the Merger Agreement.

The federal banking agencies are in the process of revising their merger policies. In September 2024, the FDIC approved revisions to its Statement of Policy on Bank Merger Transactions, which updates the FDIC’s process for evaluating mergers and the principles that guide the FDIC’s review of proposed mergers. While the Federal Reserve has not issued a similar proposal, Federal Reserve Vice Chair for Supervision Michael Barr has stated that the Federal Reserve is working with the Department of Justice to update guidelines setting forth standards for the review of the competitive impact of a transaction. In addition, in September 2024 the Department of Justice withdrew from the 1995 Bank Merger Guidelines that it previously had used to review bank mergers, stating that its 2023 Merger Guidelines will apply to its review of bank mergers going forward. These regulatory revisions create uncertainty regarding how the agencies will review bank mergers and may make it more difficult and/or costly to obtain regulatory approval or otherwise result in more burdensome conditions in approval orders than the agencies have previously imposed.

Our ongoing business and financial results may be adversely affected by a delay in receipt of necessary regulatory approvals, a denial of a regulatory application, or the imposition of a burdensome regulatory condition.

*Shareholder litigation could prevent or delay the completion of the Merger or otherwise negatively impact our business, financial condition and results of operations.*

Shareholders of The First have filed lawsuits against The First and its directors in connection with the Merger and Renasant shareholders may do the same. One of the conditions to the closing of the Merger is that no law, order, injunction or decree issued by any court or governmental entity of competent jurisdiction that would restrict, prohibit or make illegal the completion of the Merger or any of the other transactions contemplated by the Merger Agreement be in effect. While Renasant believes that the suits filed against The First and its directors are without merit, if any plaintiff were successful in obtaining an injunction prohibiting Renasant or The First from completing the Merger or any of the other transactions contemplated by the Merger Agreement, then such injunction may delay or prevent the effectiveness of the Merger and could result in significant costs to us, including any cost associated with the indemnification of our directors and officers. We may incur costs in connection with the defense or settlement of any shareholder lawsuits filed in connection with the Merger. Shareholder lawsuits may divert management attention from management of our business or operations. Such litigation could have an adverse effect on our business, financial condition and results of operations and could prevent or delay the completion of the Merger.

*We and The First will be subject to various uncertainties while the Merger is pending that could adversely affect our financial results or the anticipated benefits of the Merger.*

Uncertainty about the effect of the Merger on counterparties to contracts, employees and other parties may have an adverse effect on us or the anticipated benefits of the Merger. These uncertainties could cause contract counterparties and others who deal with us or The First to seek to change existing business relationships with us or The First, and may impair our and The First’s ability to attract, retain and motivate key personnel until the Merger is completed and for a period of time thereafter. Employee retention and recruitment may be particularly challenging prior to completion of the Merger, as our employees and prospective employees, and the employees and prospective employees of The First, may experience uncertainty about their future roles with us following the Merger.

The pursuit of the Merger and the preparation for the integration of the two companies may place a significant burden on management and internal resources. Any significant diversion of management attention away from ongoing business and any difficulties encountered in the transition and integration process could affect our financial results prior to and/or following the completion of the Merger and could limit us from pursuing attractive business opportunities and making other changes to our business prior to completion of the Merger or termination of the Merger Agreement.

#### The First may have liabilities that are not known to us.

In connection with the Merger, we will assume all of The First’s liabilities by operation of law. There may be liabilities that we failed or were unable to discover in the course of performing due diligence investigations into The First, or we may not have correctly assessed the significance of certain liabilities of The First identified in the course of our due diligence. Any such liabilities, individually or in the aggregate, could have an adverse effect on our business, financial condition and results of operations.

*The Merger may be completed on different terms from those contained in the Merger Agreement.*

Prior to the completion of the Merger, we and The First may, by mutual agreement, amend or alter the terms of the Merger Agreement, including with respect to, among other things, the merger consideration or any covenants or agreements with respect to the parties’ respective operations during the pendency of the Merger Agreement. Any such amendments or alterations may have negative consequences to us.

### Risks Relating to the Combined Company’s Business Following the Merger

*The market price of the common stock of the combined company after the Merger may be affected by factors different from those currently affecting the shares of Renasant common stock.*

Upon the completion of the Merger, Renasant shareholders and The First shareholders will become shareholders of the combined company. Renasant’s business differs from that of The First, and, accordingly, the results of operations of the combined company and the market price of the combined company’s shares of common stock may be affected by factors different from those currently affecting the independent results of operations of each of The First and Renasant.

*Sales of substantial amounts of Renasant common stock in the open market by former shareholders of The First could depress Renasant’s stock price.*

Shares of Renasant common stock that are issued to The First shareholders in the Merger will be freely tradable without restrictions or further registration under the Securities Act of 1933, as amended. Based on the number of shares of The First common stock that are outstanding (which includes the shares of The First common stock underlying The First restricted stock awards), Renasant currently expects to issue approximately 31,782,668 shares of Renasant common stock in connection with the Merger. If the Merger is completed and if The First’s former shareholders sell substantial amounts of Renasant common stock in the public market following completion of the Merger, the market price of Renasant common stock may decrease. These sales might also make it more difficult for Renasant to sell equity or equity-related securities at a time and price that it otherwise would deem appropriate.

*Combining Renasant and The First may be more difficult, costly or time consuming than expected, and we may fail to realize the anticipated benefits of the Merger.*

The success of the Merger will depend on, among other things, our ability to integrate The First into our business in a manner that facilitates growth opportunities and achieves the anticipated benefits of the Merger. If we are not able to successfully achieve these objectives, the anticipated benefits of the Merger may not be realized fully or at all or may take longer to realize than expected. In addition, the actual cost savings and anticipated benefits of the Merger could be less than anticipated, and integration may result in additional unforeseen expenses.

Renasant and The First have operated and, until the completion of the Merger, will continue to operate, independently. The success of the Merger, including anticipated benefits and cost savings, will depend, in part, on the successful combination of the businesses of Renasant and The First. To realize these anticipated benefits and cost savings, after the completion of the Merger, Renasant expects to integrate The First’s business into its own. It is possible that the integration process could result in the loss of key employees, the disruption of the combined company’s ongoing businesses or inconsistencies in technologies, standards, controls, procedures and policies that adversely affect the combined company’s ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the Merger. The loss of key employees could have an adverse effect on the combined company’s financial results and the value of Renasant common stock. If Renasant experiences difficulties with the integration process, the anticipated benefits of the Merger may not be realized fully, or at all, or may take longer to realize than expected. As with any merger of financial institutions, there also may be business disruptions that cause The First or Renasant to lose current customers or cause current customers to remove their accounts from The First or Renasant and move their business to competing financial institutions. Integration efforts between the two companies will also divert management attention and resources. These integration matters could have an adverse effect on each of The First and Renasant during this transition period and for an undetermined period after consummation of the Merger.

#### We expect to incur substantial transaction costs in connection with the Merger.

We expect to incur a significant amount of non-recurring expenses in connection with the Merger, including legal, accounting, consulting and other expenses. In general, these expenses are payable by us whether or not the Merger is completed. Additional unanticipated costs may be incurred following consummation of the Merger in the course of the integration of our business and the business of The First. We cannot be certain that the elimination of duplicative costs or the realization of other efficiencies related to the integration of the two businesses will offset the transaction and integration costs in the near term, or at all.

*The Merger will result in changes to the board of directors of the combined company and the surviving bank.*

Upon completion of the Merger, the composition of the combined company boards of directors will be different than the current Renasant and Renasant Bank boards of directors. The Renasant board of directors and the Renasant Bank board of directors will consist of: (1) the current members of the Renasant board of directors and four current members of The First board of directors and (2) the current members of the Renasant Bank board of directors and six current members of The First Bank board of directors, respectively. This new composition of the combined company boards of directors may affect the future decisions of the combined company.

*The unaudited pro forma financial information included as an exhibit to our Current Report on Form 8-K filed on July 29, 2024, is presented for illustrative purposes only and does not purport to be indicative of our financial condition or results of operations following the completion of the Merger.*

The unaudited pro forma financial information included as an exhibit to our Current Report on Form 8-K filed on July 29, 2024, is presented for illustrative purposes only, is based on various adjustments, assumptions and preliminary estimates and may not be an indication of our financial condition or results of operations following the consummation of the Merger for several reasons. Our actual financial condition and results of operations following the consummation of the Merger may not be consistent with, or evident from, the pro forma financial statements. In addition, the assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect our financial condition or results of operations following the consummation of the Merger. Our potential for future business success and operating profitability must be considered in light of the risks, uncertainties, expenses and difficulties typically encountered by recently combined companies.

Filed Nov 6, 2024.
Source: SEC EDGAR, the filing index for accession 0000715072-24-000186. Last ingested by Listed: Oct 29, 2026, 04:33 ET. No prices; not investment advice.