Renasant (RNST) - 2024 Q4 - Annual Report

Lending Activities - Renasant Corporation's lending activities accounted for approximately 77.7%, 82.8%, and 75.1% of total gross revenues in 2024, 2023, and 2022 respectively[28] - As of December 31, 2024, commercial, financial, and agricultural loans represented approximately 14.64% of total loans[31] - Residential real estate loans comprised approximately 27.07% of total loans as of December 31, 2024, with $2.0 billion originated for sale on the secondary market in 2024[34] - Commercial real estate loans accounted for approximately 48.40% of total loans as of December 31, 2024[37] - Construction loans represented approximately 8.49% of total loans as of December 31, 2024[40] - Installment loans to individuals accounted for approximately 0.70% of total loans as of December 31, 2024[42] - Equipment financing loans also represented approximately 0.70% of total loans as of December 31, 2024[43] - The Company actively manages its loan portfolio to avoid excessive concentrations in any particular loan category, industry, or geographic region[45] Strategic Initiatives - The proposed merger with The First Bancshares, Inc. is expected to close in the first half of 2025, pending regulatory approvals[24] - The strategic plan focuses on attracting high-quality deposits, generating organic loan growth, and increasing noninterest income[21] - The company centralized legal, accounting, investment, risk management, and other functions to maintain consistent quality and achieve economies of scale[20] Revenue Sources - Investment income from investment activities was approximately 3.9%, 1.1%, and 7.9% of total gross revenues for 2024, 2023, and 2022, respectively[46] - Fees from deposit services accounted for approximately 4.9%, 5.7%, and 7.6% of total gross revenues in 2024, 2023, and 2022, respectively[49] - The Wealth Management segment generated total revenue of$ 25.9 million, or 2.4% of the Company's total gross revenues for 2024[52] - Prior to its sale in July 2024, Renasant Insurance, Inc. generated total revenue of $7.4 million, or 0.1% of total gross revenues for 2024[53] Regulatory Compliance - The Company is subject to supervision and regulation by multiple authorities, including the Federal Reserve and the FDIC, due to its status as a bank holding company with over$ 10 billion in assets[56] - The Federal Reserve has established risk-based capital guidelines that require a minimum Tier 1 capital ratio of at least 4% for bank holding companies[65] - The Company has not elected to become a financial holding company, which would allow it to engage in certain non-banking activities without prior Federal Reserve approval[62] - The company must maintain a common equity Tier 1 capital (CET1) ratio of at least 4.5% and a minimum total risk-based capital ratio of 8%[83] - The capital conservation buffer required is 2.5% of CET1 to risk-weighted assets, which restricts dividend payments if not met[83] - The company is classified as "well capitalized" if it has a total risk-based capital ratio of 10% or more[86] - The bank's deposits are insured up to $250,000 per account through the Deposit Insurance Fund (DIF)[75] - The minimum designated reserve ratio of the DIF is 1.35% of total insured deposits, with the FDIC authorized to set a higher ratio[75] - The bank's ability to pay dividends is contingent upon its earnings and financial condition, as well as regulatory approvals[79] - The bank must be "well capitalized" and "well managed" to acquire banks outside its home state[69] - The bank is subject to significant regulatory scrutiny due to its asset size exceeding$ 10 billion, including compliance with federal consumer protection laws[74] - The FDIC can terminate deposit insurance if the bank engages in unsafe practices or is in poor financial condition[77] - The company incurs significant expenses related to compliance with laws and regulations, impacting its financial performance[73] Employee and Operational Insights - The bank employs over 2,200 people on a full-time equivalent basis as of December 31, 2024[110] - The bank received a "satisfactory" rating from the FDIC regarding its compliance with the Community Reinvestment Act in its most recent assessment[100] - The bank has established policies and procedures to ensure compliance with federal anti-money laundering laws and regulations[103] - The bank's employees participated in a satisfaction survey with a participation rate of over 90%, indicating general satisfaction with working conditions[111] - The bank's privacy policy requires customers to be informed about their financial information sharing options and allows them to opt out[101] - The bank's compensation standard states that compensation will be considered excessive if it is unreasonable or disproportionate to the services performed[94] - The bank has implemented numerous controls and procedures to comply with consumer protection laws, which are regularly tested for accuracy[99] - The bank's funding sources primarily consist of customer deposits, loan repayments, and cash flows from investment securities[109] - The bank's compliance with safety and soundness standards is monitored, and corrective plans are required if deficiencies are identified[95] Capital and Loan Metrics - As of December 31, 2024, the bank's ADC loans represented 65% of total bank level capital, while total CRE loans represented 273% of total bank level capital[93]