Restrictions on Cash, Securities, Bank Dividends, Loans or Advances

12 Months Ended

Dec. 31, 2020

Regulated Operations [Abstract]

Restrictions on Cash, Securities, Bank Dividends, Loans or Advances

Restrictions on Cash, Securities, Bank Dividends, Loans or Advances

(In Thousands)

In prior years Renasant Bank has been required to maintain minimum average balances with the Federal Reserve. In March 2020, the Federal Reserve announced that effective March 26, 2020 the reserve requirement would be reduced to zero. This action was taken to support the flow of credit to households and businesses in response to the economic environment caused by the COVID-19 pandemic. At December 31, 2019, Renasant Bank’s reserve requirement with the Federal Reserve was $187,839, with which it was in full compliance.

The Company’s balance of FHLB stock, which is carried at amortized cost, at December 31, 2020 and 2019, was $12,252 and $31,092, respectively. The required investment for the same time period was $11,594 and $31,092, respectively.

The Company’s ability to pay dividends to its shareholders is 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 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 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 Renasant Bank paying dividends to the Company, and under certain circumstances the approval of the FDIC may be required. At December 31, 2020, the Bank’s earned surplus exceeded the Bank’s capital stock by more than ten times.

Federal Reserve regulations also limit the amount Renasant Bank may loan to the Company unless such loans are collateralized by specific obligations. At December 31, 2020, the maximum amount available for transfer from Renasant Bank to the Company in the form of loans was $150,478. As of December 31, 2020, no loans from the Bank to the Company were outstanding.