Edgar Filing: RENASANT CORP

/s/ Stuart R. Johnson

Stuart R. Johnson

Executive Vice President and

Chief Financial Officer

FORM 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2011

¨	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 001-13253

RENASANT CORPORATION

(Exact name of registrant as specified in its charter)


Mississippi		64-0676974
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

209 Troy Street, Tupelo, Mississippi		38804-4827
(Address of principal executive offices)		(Zip Code)

(662) 680-1001

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	¨	Accelerated filer	þ

Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

As of October 31, 2011, 25,061,068 shares of the registrant’s common stock, $5.00 par value per share, were outstanding. The registrant has no other classes of securities outstanding.

RENASANT CORPORATION AND SUBSIDIARIES

Form 10-Q

For the quarterly period ended September 30, 2011

CONTENTS


PART I - FINANCIAL INFORMATION			3

	Item 1.	Financial Statements (Unaudited)	3
		Consolidated Balance Sheets	3
		Consolidated Statements of Income	4
		Condensed Consolidated Statements of Cash Flows	5
		Notes to Consolidated Financial Statements	6

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	55

	Item 4.	Controls and Procedures	55

PART II - OTHER INFORMATION			56

	Item 1A.	Risk Factors	56

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	56

	Item 6.	Exhibits	57

SIGNATURES			58

EXHIBIT INDEX			59

PART I. FINANCIAL INFORMATION

Item 1.

FINANCIAL STATEMENTS

Renasant Corporation and Subsidiaries

Consolidated Balance Sheets

(In Thousands, Except Share Data)


	(Unaudited)
	September 30,			December 31,
	2011			2010
Assets
Cash and due from banks	$	62,723		$	47,705
Interest-bearing balances with banks		172,594			244,964

Cash and cash equivalents		235,317			292,669
Securities held to maturity (fair value of $262,342 and $228,157, respectively)		250,876			230,786
Securities available for sale, at fair value		468,005			603,686
Mortgage loans held for sale		24,739			27,704
Loans, net of unearned income:
Covered under loss-share agreements		359,813			333,681
Not covered under loss-share agreements		2,204,955			2,190,909

Total loans, net of unearned income		2,564,768			2,524,590
Allowance for loan losses		(48,532	)		(45,415	)

Loans, net		2,516,236			2,479,175
Premises and equipment, net		52,123			51,424
Other real estate owned and repossessions:
Covered under loss-share agreements		44,021			54,715
Not covered under loss-share agreements		72,765			71,833

Total other real estate owned and repossessions		116,786			126,548
Goodwill		184,879			184,879
Other intangible assets, net		7,876			6,988
FDIC loss-share indemnification asset		127,981			155,657
Other assets		151,656			137,811

Total assets	$	4,136,474		$	4,297,327

Liabilities and shareholders’ equity

Liabilities
Deposits
Noninterest-bearing	$	493,130		$	368,798
Interest-bearing		2,849,225			3,099,353

Total deposits		3,342,355			3,468,151
Short-term borrowings		17,388			15,386
Long-term debt		245,181			301,050
Other liabilities		44,149			43,231

Total liabilities		3,649,073			3,827,818

Shareholders’ equity
Preferred stock, $.01 par value – 5,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock, $5.00 par value – 75,000,000 shares authorized, 26,715,797 shares issued; 25,061,068 and 25,043,112 shares outstanding, respectively		133,579			133,579
Treasury stock, at cost		(26,899	)		(27,187	)
Additional paid-in capital		217,882			217,011
Retained earnings		169,586			162,547
Accumulated other comprehensive loss		(6,747	)		(16,441	)

Total shareholders’ equity		487,401			469,509

Total liabilities and shareholders’ equity	$	4,136,474		$	4,297,327

See Notes to Consolidated Financial Statements.

Renasant Corporation and Subsidiaries

Consolidated Statements of Income (Unaudited)

(In Thousands, Except Share Data)


	Three Months Ended September 30,					Nine Months Ended September 30,
	2011		2010			2011			2010
Interest income
Loans	$	35,057	$	36,118		$	107,098		$	100,224
Securities
Taxable		4,756		5,454			15,725			16,591
Tax-exempt		2,053		1,594			6,252			4,343
Other		64		267			433			364

Total interest income		41,930		43,433			129,508			121,522

Interest expense
Deposits		6,747		12,485			25,605			33,264
Borrowings		2,319		3,831			7,321			13,051

Total interest expense		9,066		16,316			32,926			46,315

Net interest income		32,864		27,117			96,582			75,207
Provision for loan losses		5,500		11,500			16,350			25,165

Net interest income after provision for loan losses		27,364		15,617			80,232			50,042

Noninterest income
Service charges on deposit accounts		4,797		5,771			14,759			16,222
Fees and commissions		4,898		3,654			13,584			10,784
Insurance commissions		847		828			2,462			2,492
Trust revenue		771		562			2,034			1,778
Gains on sales of securities		5,041		1,906			5,057			3,955
Other-than-temporary-impairment losses on securities available for sale		—		(13,406	)		(15,445	)		(14,748	)
Non-credit related portion of other-than-temporary impairment on securities, recognized in other comprehensive income		—		10,491			15,183			11,673

Net impairment losses on securities		—		(2,915	)		(262	)		(3,075	)
BOLI income		617		529			2,095			1,841
Gains on sales of mortgage loans held for sale		1,371		1,774			3,471			4,097
Gain on acquisition		570		42,211			9,344			42,211
Other		701		214			2,168			1,057

Total noninterest income		19,613		54,534			54,712			81,362

Noninterest expense
Salaries and employee benefits		17,493		16,694			49,903			42,943
Data processing		1,927		1,703			5,372			4,709
Net occupancy and equipment		3,434		3,271			10,030			9,128
Other real estate owned		6,336		4,635			11,969			6,330
Professional fees		1,004		913			3,108			2,660
Advertising and public relations		1,305		1,159			3,737			3,027
Intangible amortization		351		505			1,376			1,451
Communications		1,185		1,218			4,024			3,351
Merger-related expenses		326		1,955			1,651			1,955
Extinguishment of debt		—		2,785			1,903			2,785
Other		4,768		4,733			14,334			13,054

Total noninterest expense		38,129		39,571			107,407			91,393


Income before income taxes		8,848		30,580			27,537			40,011
Income taxes		2,316		11,029			7,695			13,057

Net income	$	6,532	$	19,551		$	19,842		$	26,954

Basic earnings per share	$	0.26	$	0.81		$	0.79		$	1.22

Diluted earnings per share	$	0.26	$	0.81		$	0.79		$	1.21

Cash dividends per common share	$	0.17	$	0.17		$	0.51		$	0.51

See Notes to Consolidated Financial Statements.

Renasant Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In Thousands)


	Nine Months Ended September 30,
	2011			2010
Operating activities
Net cash provided by operating activities	$	104,740		$	62,924

Investing activities
Purchases of securities available for sale		(57,535	)		(307,492	)
Proceeds from sales of securities available for sale		86,047			129,924
Proceeds from call/maturities of securities available for sale		121,620			203,577
Purchases of securities held to maturity		(89,666	)		(47,463	)
Proceeds from sales of securities held to maturity		13,033			—
Proceeds from call/maturities of securities held to maturity		56,427			8,525
Net (increase) decrease in loans		(5,889	)		91,523
Purchases of premises and equipment		(3,787	)		(2,015	)
Proceeds from sales of premises and equipment		85			8
Net cash paid in acquisition		(792	)		—
Net cash received in acquisition		148,443			337,127

Net cash provided by investing activities		267,986			413,714

Financing activities
Net increase in noninterest-bearing deposits		114,236			17,475
Net decrease in interest-bearing deposits		(463,039	)		(67,750	)
Net increase (decrease) in short-term borrowings		2,002			(2,975	)
Proceeds from long-term debt		—			2,180
Repayment of long-term debt		(70,729	)		(317,800	)
Cash paid for dividends		(12,803	)		(11,447	)
Cash received on exercise of stock-based compensation		255			126
Excess tax benefit from stock-based compensation		—			4
Proceeds from equity offering		—			51,402

Net cash used in financing activities		(430,078	)		(328,785	)


Net (decrease) increase in cash and cash equivalents		(57,352	)		147,853
Cash and cash equivalents at beginning of period		292,669			148,560

Cash and cash equivalents at end of period	$	235,317		$	296,413


Supplemental disclosures
Noncash transactions:
Transfers of loans to other real estate	$	31,279		$	25,471

See Notes to Consolidated Financial Statements.

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note A – Significant Accounting Policies

(In Thousands, Except Share Data)

Basis of Presentation: Renasant Corporation (referred to herein as the “Company”) owns and operates Renasant Bank (“Renasant Bank” or the “Bank”) and Renasant Insurance, Inc. The Company offers a diversified range of financial and insurance services to its retail and commercial customers through its subsidiaries and full service offices located throughout north and north central Mississippi, west and middle Tennessee, north and central Alabama and north Georgia.

The accompanying unaudited consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information regarding the Company’s accounting policies, refer to the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

The Company has evaluated subsequent events that have occurred after September 30, 2011 through the date of issuance of its financial statements for consideration of recognition or disclosure.

Impact of Recently-Issued Accounting Standards and Pronouncements: In January 2010, the Financial Accounting Standards Board (“FASB”) issued an update to Accounting Standards Codification Topic (“ASC”) 820, “Fair Value Measurements and Disclosures,” (“ASC 820”) that requires a reporting entity to present separately information about purchases, sales, issuances and settlements in the reconciliation for fair value measurements using Level 3 inputs. These disclosures are effective for interim and annual reporting periods beginning after December 15, 2010. See Note J, “Fair Value Measurements,” in these Notes to Consolidated Financial Statements for further disclosures regarding the Company’s adoption of this update.

In July 2010, FASB issued an update to ASC 310, “Receivables,” (“ASC 310”) that requires enhanced and additional disclosures that will provide financial statement users with greater transparency about a reporting entity’s allowance for credit losses and the credit quality of its financial receivables. A reporting entity must provide disclosures that facilitate financial statement users’ evaluation of the nature of credit risk inherent in its portfolio of financing receivables, explaining how that risk is analyzed and assessed in arriving at the allowance for credit losses, and detailing the changes and reasons for those changes in the allowance for credit losses. To achieve those objectives, a reporting entity should provide disclosures by portfolio segment and/or by class of financing receivable. This update to ASC 310 amends existing disclosures to require a reporting entity to provide a rollforward schedule of the allowance for credit losses on a portfolio segment basis, with the ending balance further segregated by impairment method. A reporting entity must also present nonaccrual, past due 90 days or more and still accruing and impaired financing receivables by class. Additional disclosures include (i) credit quality indicators of financing receivables at the end of the reporting period presented by class, (ii) the aging of past due financing receivables at the end of the reporting period presented by class, (iii) the nature and extent of troubled debt restructurings that occurred during the period presented by class and their effect on the allowance for credit losses, (iv) the nature and extent of financing receivables modified as troubled debt restructurings within the previous twelve months that defaulted during the reporting period presented by class and their effect on the allowance for credit losses, and (v) significant purchases and sales of financing receivables during the reporting period presented by portfolio segment. The disclosures as of the end of a reporting period became effective for the Company’s financial statements at December 31, 2010. The disclosures about activity that occurs during a reporting period became effective for the Company’s financial statements beginning on January 1, 2011. See Note D, “Loans and the Allowance for Loan Losses,” in these Notes to Consolidated Financial Statements for disclosures reflecting the Company’s adoption of this update. An update issued in January 2011 temporarily deferred the effective date for the disclosures related to troubled debt restructurings to be concurrent with the effective date of the then-proposed update which is discussed in the following paragraph.

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note A – Significant Accounting Policies (continued)

In April 2011, FASB issued an update to ASC 310 that clarifies which loan modifications constitute troubled debt restructurings in conformity with ASC 310 and is intended to assist creditors in determining whether a modification of the terms of a receivable meets the criteria to be considered a troubled debt restructuring, both for purposes of recording an impairment loss and for disclosure of troubled debt restructurings. In evaluating whether a restructuring constitutes a troubled debt restructuring, a creditor must separately conclude both that the restructuring constitutes a concession by the creditor to the borrower and that the borrower is experiencing financial difficulties. This update to ASC 310 became effective for interim and annual reporting periods beginning on or after June 15, 2011 and was to be applied retrospectively to troubled debt restructurings occurring on or after the beginning of the fiscal year of adoption. See Note D, “Loans and the Allowance for Loan Losses,” in these Notes to Consolidated Financial Statements for disclosures reflecting the Company’s adoption of this update.

In June 2011, FASB issued an update to ASC 220, “Comprehensive Income,” (“ASC 220”) that eliminates the option to present components of other comprehensive income as part of the Statements of Changes in Shareholders’ Equity. This update requires that all nonowner changes in shareholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In a single continuous statement, the entity is required to present the components of net income and total net income, the components of other comprehensive income and a total for other comprehensive income, along with the total of comprehensive income in that statement. In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income, and the total of comprehensive income. Regardless of whether an entity chooses to present comprehensive income in a single continuous statement or in two separate but consecutive statements, the entity is required to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the components of net income and the components of other comprehensive income are presented. This update to ASC 220 is effective for interim and annual reporting periods beginning on or after December 15, 2011 and should be applied retrospectively. The Company is currently in the process of evaluating the impact of adopting this update on its financial statements.

In September 2011, FASB issued an update to ASC 350, “Intangibles – Goodwill and Other,” (“ASC 350”) that gives a reporting entity the option, before performing the two-step impairment test required under ASC 350, to first assess qualitative factors to determine whether the existence of events or circumstances requires a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing these qualitative factors, a reporting entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. However, if a reporting entity concludes otherwise, then it is required to perform the first step of the two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. If the carrying amount of a reporting unit exceeds its fair value, then the reporting entity is required to perform the second step of the goodwill impairment test to measure the amount of the impairment loss, if any. The update to ASC 350 also provides that a reporting entity may bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the first step of the two-step goodwill impairment test. A reporting entity may resume performing the qualitative assessment in any subsequent period. This update to ASC 350 is effective for annual and interim impairment tests beginning after December 15, 2011. The Company is currently in the process of evaluating the impact of adopting this update on its goodwill impairment testing process.

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note B – Mergers and Acquisitions

(In Thousands)

Acquisition of RBC Bank (USA) Trust Division

On August 31, 2011, the Company acquired the Birmingham, Alabama-based trust department of RBC Bank (USA), which services clients in Alabama and Georgia. Under the terms of the transaction, RBC Bank (USA) transferred its approximately $680,000 in assets under management, comprised of personal and institutional clients with over 200 trust, custodial and escrow accounts, to a wholly-owned subsidiary, and Renasant Bank acquired all of the ownership interests in the subsidiary. In connection with the acquisition, the Company recognized a gain of $570, which is recognized under the line item “Gain on acquisition” in the Consolidated Statements of Income for the three and nine months ended September 30, 2011. Acquisition costs related to the transaction of $326 were recognized under the line item “Merger-related expenses” in the Consolidated Statements of Income for the three and nine months ended September 30, 2011.

FDIC-Assisted Acquisition of Certain Assets and Liabilities of American Trust Bank

On February 4, 2011, the Bank entered into a purchase and assumption agreement with loss-share agreements with the Federal Deposit Insurance Corporation (the “FDIC”) to acquire specified assets and assume specified liabilities of American Trust Bank, a Georgia-chartered bank headquartered in Roswell, Georgia (“American Trust”). American Trust operated 3 branches in the northwest region of Georgia.

In connection with the acquisition, the Bank entered into loss-share agreements with the FDIC that covered $73,657 of American Trust loans (the “covered loans”). The Bank will share in the losses on the asset pools (including single family residential mortgage loans and commercial loans) covered under the loss-share agreements. Pursuant to the terms of the loss-share agreements, the FDIC is obligated to reimburse the Bank for 80% of all eligible losses with respect to covered loans, beginning with the first dollar of loss incurred. The Bank has a corresponding obligation to reimburse the FDIC for 80% of eligible recoveries with respect to covered loans.

The acquisition of American Trust resulted in a pre-tax gain of $8,774. Due to the difference in tax bases of the assets acquired and liabilities assumed, the Company recorded a deferred tax liability of $3,356, resulting in an after-tax gain of $5,418. Acquisition costs related to the American Trust acquisition of $1,325 were recognized under the line item “Merger-related expenses” in the Consolidated Statements of Income for the nine months ended September 30, 2011.

The following table sets forth the fair values of the assets acquired and liabilities assumed by the Bank in the acquisition of American Trust as of February 4, 2011:


Assets Acquired
Cash and due from banks	$	148,443
Securities available for sale		7,060
Federal Home Loan Bank stock		1,192
Loans		74,399
FDIC loss-share indemnification asset		11,926
Core deposit intangible		229
Other assets		4,256

Total assets acquired		247,505

Liabilities Assumed
Deposits:
Noninterest-bearing		10,096
Interest-bearing		212,911

Total deposits		223,007
Advances from the Federal Home Loan Bank		15,020
Accrued expenses and other liabilities		704

Total liabilities assumed		238,731


Net assets acquired		8,774

Deferred tax liability		3,356


Net assets assumed, including deferred tax liability	$	5,418

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note B – Mergers and Acquistions (continued)

The Company’s operating results for the three and nine months ended September 30, 2011 include the operating results of the assets acquired and liabilities assumed in the American Trust acquisition subsequent to the February 4, 2011 closing date. The significance of the fair value adjustments recorded as well as the nature of the loss-share agreements in connection with an FDIC-assisted transaction are integral to accurately assessing the impact of the acquired operations on the operations of the Company. Disclosure of pro forma financial information is made more difficult by the troubled nature of American Trust prior to the date of the acquisition. Therefore, the Company has determined that pro forma financial information in relation to the acquisition of American Trust is neither practical nor meaningful.

FDIC-Assisted Acquisition of Certain Assets and Liabilities of Crescent Bank & Trust

On July 23, 2010 the Bank acquired specified assets and assumed specified liabilities of Crescent Bank & Trust Company, a Georgia-chartered bank headquartered in Jasper, Georgia (“Crescent”), from the FDIC, as receiver for Crescent. For more information regarding the Crescent acquisition, please refer to Note B, “FDIC-Assisted Acquisition of Certain Assets and Liabilities of Crescent Bank & Trust,” in the Notes to Consolidated Financial Statements of the Company in Item 8, Financial Statements and Supplementary Data, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note C – Securities

(In Thousands)

The amortized cost and fair value of securities held to maturity were as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
September 30, 2011
Obligations of other U.S. Government agencies and corporations	$	28,218	$	148	$	(26	)	$	28,340
Obligations of states and political subdivisions		222,658		11,371		(27	)		234,002

	$	250,876	$	11,519	$	(53	)	$	262,342


December 31, 2010
Obligations of other U.S. Government agencies and corporations	$	24,703	$	—	$	(404	)	$	24,299
Obligations of states and political subdivisions		206,083		1,408		(3,633	)		203,858

	$	230,786	$	1,408	$	(4,037	)	$	228,157

In light of the ongoing fiscal uncertainty in state and local governments, the Company analyzed its exposure to potential losses in its security portfolio. Management reviewed the underlying credit rating and analyzed the financial condition of the respective issuers. Based on this analysis, the Company sold certain securities representing obligations of state and political subdivisions that were classified as held to maturity. The securities sold showed significant credit deterioration in that an analysis of the financial condition of the respective issuers showed the issuers were operating at net deficits with little to no financial cushion to offset future contingencies. These securities had a carrying value of $13,017 and the Company recognized a net gain of $16 on the sale during the nine months ended September 30, 2011.

The amortized cost and fair value of securities available for sale were as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
September 30, 2011
Obligations of other U.S. Government agencies and corporations	$	34,664	$	269	$	—		$	34,933
Mortgage-backed securities		393,045		15,597		(47	)		408,595
Trust preferred securities		30,410		—		(20,424	)		9,986
Other equity securities		14,401		90		—			14,491

	$	472,520	$	15,956	$	(20,471	)	$	468,005


December 31, 2010
Obligations of other U.S. Government agencies and corporations	$	73,656	$	266	$	(1,170	)	$	72,752
Mortgage-backed securities		489,068		10,819		(3,377	)		496,510
Trust preferred securities		32,452		150		(28,019	)		4,583
Other equity securities		29,674		167		—			29,841

	$	624,850	$	11,402	$	(32,566	)	$	603,686

Gross gains on sales of securities available for sale for the nine months ended September 30, 2011 and 2010 were $5,041 and $4,499, respectively. No securities available for sale were sold at a loss during the nine months ended September 30, 2011. Gross losses on sales of securities available for sale were $544 for the nine months ended September 30, 2010.

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note C – Securities (continued)

The amortized cost and fair value of securities at September 30, 2011 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because issuers may call or prepay obligations with or without call or prepayment penalties.


	Held to Maturity				Available for Sale
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	6,355	$	6,381	$	—	$	—
Due after one year through five years		40,897		41,802		—		—
Due after five years through ten years		73,815		76,771		34,664		34,933
Due after ten years		129,809		137,388		30,410		9,986
Mortgage-backed securities		—		—		393,045		408,595
Other equity securities		—		—		14,401		14,491

	$	250,876	$	262,342	$	472,520	$	468,005

The following table presents the age of gross unrealized losses and fair value by investment category:


	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Held to Maturity:
September 30, 2011
Obligations of other U.S Government agencies and corporations	$	4,974	$	(26	)	$	—	$	—		$	4,974	$	(26	)
Obligations of states and political subdivisions		4,573		(27	)		—		—			4,573		(27	)

Total	$	9,547	$	(53	)	$	—	$	—		$	9,547	$	(53	)


December 31, 2010
Obligations of other U.S Government agencies and corporations	$	15,104	$	(404	)	$	—	$	—		$	15,104	$	(404	)
Obligations of states and political subdivisions		97,367		(3,633	)		—		—			97,367		(3,633	)

Total	$	112,471	$	(4,037	)	$	—	$	—		$	112,471	$	(4,037	)


Available for Sale:
September 30, 2011
Obligations of other U.S Government agencies and corporations	$	—	$	—		$	—	$	—		$	—	$	—
Mortgage-backed securities		7,809		(27	)		6,256		(20	)		14,065		(47	)
Trust preferred securities		—		—			9,986		(20,424	)		9,986		(20,424	)
Other equity securities		—		—			—		—			—		—

Total	$	7,809	$	(27	)	$	16,242	$	(20,444	)	$	24,051	$	(20,471	)


December 31, 2010
Obligations of other U.S Government agencies and corporations	$	39,513	$	(1,170	)	$	—	$	—		$	39,513	$	(1,170	)
Mortgage-backed securities		148,867		(3,359	)		2,254		(18	)		151,121		(3,377	)
Trust preferred securities		—		—			1,433		(28,019	)		1,433		(28,019	)
Other equity securities		—		—			—		—			—		—

Total	$	188,380	$	(4,529	)	$	3,687	$	(28,037	)	$	192,067	$	(32,566	)

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note C – Securities (continued)

The Company evaluates its investment portfolio for other-than-temporary-impairment (“OTTI”) on a quarterly basis. Impairment is assessed at the individual security level. The Company considers an investment security impaired if the fair value of the security is less than its cost or amortized cost basis.

When impairment of an equity security is considered to be other-than-temporary, the security is written down to its fair value and an impairment loss is recorded as a loss within noninterest income in the Consolidated Statements of Income. When impairment of a debt security is considered to be other-than-temporary, the security is written down to its fair value. The amount of OTTI recorded as a loss within noninterest income depends on whether an entity intends to sell the debt security and whether it is more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis. If an entity intends to, or has decided to, sell the debt security or more likely than not will be required to sell the security before recovery of its amortized cost basis, OTTI must be recognized in earnings in an amount equal to the entire difference between the security’s amortized cost basis and its fair value. If an entity does not intend to sell the debt security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis, OTTI is separated into the amount representing credit loss and the amount related to all other market factors. The amount related to credit loss is recognized in earnings. The amount related to other market factors is recognized in other comprehensive income, net of applicable taxes.

The Company holds investments in pooled trust preferred securities that had a cost basis of $30,410 and $29,452 and a fair value of $9,986 and $1,433 at September 30, 2011 and December 31, 2010, respectively. The investments in pooled trust preferred securities consists of four securities representing interests in various tranches of trusts collateralized by debt issued by over 358 financial institutions. Management’s determination of the fair value of each of its holdings in pooled trust preferred securities is based on the current credit ratings, the known deferrals and defaults by the underlying issuing financial institutions and the degree to which future deferrals and defaults would be required to occur before the cash flow for the Company’s tranches is negatively impacted. In addition, management continually monitors key credit quality and capital ratios of the issuing institutions. This determination is further supported by quarterly valuations of each security obtained by the Company performed by third parties. The Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of the investments’ amortized cost, which may be maturity. At September 30, 2011, management did not, and does not currently, believe such securities will be settled at a price less than the amortized cost of the investment.

The following table provides information regarding the Company’s investments in pooled trust preferred securities at September 30, 2011:


Name	Single/ Pooled		Class/ Tranche		Amortized Cost		Fair Value		Unrealized Loss			Lowest Credit Rating		Issuers Currently in Deferral or Default			Projected Additional Deferrals or Defaults
XIII		Pooled		B-2	$	1,245	$	689	$	(556	)		Ca		31	%		14	%
XXIII		Pooled		B-2		10,770		4,255		(6,515	)		Ca		24	%		7	%
XXIV		Pooled		B-2		12,733		4,051		(8,682	)		Ca		35	%		8	%
XXVI		Pooled		B-2		5,662		991		(4,671	)		Ca		32	%		4	%

					$	30,410	$	9,986	$	(20,424	)

The Company recognized credit related impairment losses on securities deemed other-than-temporarily impaired of $262 and $3,075 during the nine months ended September 30, 2011 and 2010, respectively. The following table provides a summary of the cumulative credit related losses recognized in earnings for which a portion of OTTI has been recognized in other comprehensive income:


	2011			2010
Balance at January 1	$	(3,075	)	$	—
Additions related to credit losses for which OTTI was not previously recognized		(262	)		(3,075	)
Increases in credit loss for which OTTI was previously recognized		—			—

Balance at September 30	$	(3,337	)	$	(3,075	)

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note D – Loans and the Allowance for Loan Losses

(In Thousands)

The following is a summary of loans:


	September 30, 2011			December 31, 2010
Commercial, financial, agricultural	$	267,146		$	265,276
Lease financing		368			533
Real estate – construction		86,501			82,361
Real estate – 1-4 family mortgage		827,099			872,382
Real estate – commercial mortgage		1,321,407			1,239,843
Installment loans to individuals		62,265			64,225

Gross loans		2,564,786			2,524,620
Unearned income		(18	)		(30	)

Loans, net of unearned income		2,564,768			2,524,590
Allowance for loan losses		(48,532	)		(45,415	)

Net loans	$	2,516,236		$	2,479,175

Loans acquired in FDIC-assisted acquisitions were recorded, as of their respective acquisition dates, at fair value. The fair value of these loans represents the expected discounted cash flows to be received over the lives of the loans, taking into account the Company’s estimate of future credit losses on the loans. These loans were excluded from the calculation of the allowance for loan losses and no provision for loan losses was recorded for these loans during the nine months ended September 30, 2011 or for the year ended December 31, 2010 because the fair value measurement incorporates an estimate of losses on acquired loans. The Company will continue to monitor future cash flows on these loans; to the extent future cash flows deteriorate below initial projections, the Company may be required to reserve for these loans in the allowance for loan losses through future provision for loan losses.

In these Notes to Consolidated Financial Statements, the Company refers to loans subject to the loss-share agreements as “covered loans” or “loans covered under loss-share agreements” and loans that are not subject to the loss-share agreements as “not covered loans” or “loans not covered by loss-share agreements.”

A summary of loans acquired in FDIC-assisted acquisitions at fair value follows:


	Impaired Covered Loans		Other Covered Loans		Not Covered Loans		Total Loans
September 30, 2011
Commercial, financial, agricultural	$	37	$	19,159	$	367	$	19,563
Real estate – construction		3,994		6,817		—		10,811
Real estate – 1-4 family mortgage		12,582		101,646		151		114,379
Real estate – commercial mortgage		48,978		166,392		1,009		216,379
Installment loans to individuals		—		208		5,112		5,320

Total	$	65,591	$	294,222	$	6,639	$	366,452


December 31, 2010
Commercial, financial, agricultural	$	10	$	20,911	$	3	$	20,924
Real estate – construction		8,313		7,250		—		15,563
Real estate – 1-4 family mortgage		20,293		102,225		—		122,518
Real estate – commercial mortgage		67,445		107,128		—		174,573
Installment loans to individuals		—		106		8,052		8,158

Total	$	96,061	$	237,620	$	8,055	$	341,736

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note D – Loans and the Allowance for Loan Losses (continued)

Allowance for Loan Losses

The allowance for loan losses is established through a provision for loan losses charged to earnings resulting from measurements of inherent credit risk in the loan portfolio and estimates of probable losses or impairments of individual loans. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The following table provides a rollforward of the allowance for loan losses and a breakdown of the ending balance of the allowance based on the Company’s impairment methodology for the periods presented:


	Commercial			Real Estate - Construction			Real Estate - 1-4 Family Mortgage			Real Estate - Commercial Mortgage			Installment and Other⁽¹⁾			Total
Three months ended September 30, 2011
Allowance for loan losses:
Beginning balance	$	3,841		$	1,389		$	19,864		$	21,518		$	959		$	47,571
Provision for loan losses		134			(240	)		4,298			1,318			(10	)		5,500
Charge-offs		(210	)		—			(3,281	)		(1,372	)		(105	)		(4,968	)
Recoveries		61			18			245			17			88			429

Ending balance	$	3,826		$	1,167		$	21,126		$	21,481		$	932		$	48,532

Nine Months Ended September 30, 2011
Allowance for loan losses:
Beginning balance	$	2,625		$	2,115		$	20,870		$	18,779		$	1,026		$	45,415
Provision for loan losses		2,456			(199	)		9,570			4,562			(39	)		16,350
Charge-offs		(1,494	)		(798	)		(9,896	)		(2,746	)		(194	)		(15,128	)
Recoveries		239			49			582			886			139			1,895

Ending balance	$	3,826		$	1,167		$	21,126		$	21,481		$	932		$	48,532

September 30, 2011
Individually evaluated for impairment	$	1,074		$	16		$	9,915		$	8,712		$	—		$	19,717
Collectively evaluated for impairment		2,752			1,151			11,211			12,769			932			28,815
Acquired with deteriorated credit quality		—			—			—			—			—			—

Ending balance	$	3,826		$	1,167		$	21,126		$	21,481		$	932		$	48,532

Three months ended September 30, 2010
Allowance for loan losses:
Beginning balance	$	2,090		$	2,081		$	20,811		$	15,459		$	705		$	41,146
Provision for loan losses		953			811			4,525			5,083			128			11,500
Charge-offs		(567	)		(388	)		(5,727	)		(1,243	)		(45	)		(7,970	)
Recoveries		101			—			295			39			21			456

Ending balance	$	2,577		$	2,504		$	19,904		$	19,338		$	809		$	45,132

Nine Months Ended September 30, 2010
Allowance for loan losses:
Beginning balance	$	4,855		$	4,494		$	15,593		$	12,577		$	1,626		$	39,145
Provision for loan losses		(1,608	)		1,779			14,884			10,755			(645	)		25,165
Charge-offs		(810	)		(3,806	)		(11,182	)		(4,044	)		(239	)		(20,081	)
Recoveries		140			37			609			50			67			903

Ending balance	$	2,577		$	2,504		$	19,904		$	19,338		$	809		$	45,132

September 30, 2010
Individually evaluated for impairment	$	433		$	170		$	8,927		$	6,073		$	—		$	15,603
Collectively evaluated for impairment		2,144			2,334			10,977			13,265			809			29,529
Acquired with deteriorated credit quality		—			—			—			—			—			—

Ending balance	$	2,577		$	2,504		$	19,904		$	19,338		$	809		$	45,132

⁽¹⁾	Includes lease financing receivables.

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note D – Loans and the Allowance for Loan Losses (continued)

The following table provides recorded investment in loans, net of unearned income, based on the Company’s impairment methodology as of the dates presented:


	Commercial		Real Estate - Construction		Real Estate - 1-4 Family Mortgage		Real Estate - Commercial Mortgage		Installment and Other⁽¹⁾		Total
September 30, 2011
Individually evaluated for impairment	$	4,886	$	7,939	$	64,930	$	106,193	$	—	$	183,948
Collectively evaluated for impairment		242,697		67,751		647,790		998,835		57,295		2,014,368
Acquired with deteriorated credit quality		19,563		10,811		114,379		216,379		5,320		366,452

Ending balance	$	267,146	$	86,501	$	827,099	$	1,321,407	$	62,615	$	2,564,768


December 31, 2010
Individually evaluated for impairment	$	7,361	$	8,837	$	94,883	$	81,288	$	—	$	192,369
Collectively evaluated for impairment		236,991		57,961		654,981		983,982		56,570		1,990,485
Acquired with deteriorated credit quality		20,924		15,563		122,518		174,573		8,158		341,736

Ending balance	$	265,276	$	82,361	$	872,382	$	1,239,843	$	64,728	$	2,524,590

⁽¹⁾	Includes lease financing receivables.

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note D – Loans and the Allowance for Loan Losses (continued)

Credit Quality

For commercial and commercial real estate secured loans, internal risk-rating grades are assigned by lending, credit administration or loan review personnel, based on an analysis of the financial and collateral strength and other credit attributes underlying each loan. Management analyzes the resulting ratings, as well as other external statistics and factors such as delinquency, to track the migration performance of the portfolio balances of commercial and commercial real estate secured loans. Loan grades range between 1 and 9, with 1 being loans with the least credit risk. Loans that migrate toward the “Pass” grade (those with a risk rating between 1 and 4) or within the “Pass” grade generally have a lower risk of loss and therefore a lower risk factor. The “Watch” grade (those with a risk rating of 5) is utilized on a temporary basis for “Pass” grade loans where a significant risk-modifying action is anticipated in the near term. Loans that migrate toward the “Substandard” grade (those with a risk rating between 6 and 9) generally have a higher risk of loss and therefore a higher risk factor applied to those related loan balances. The following table presents the Company’s loan portfolio by risk-rating grades:


	Pass		Watch		Substandard		Total
September 30, 2011
Commercial, financial, agricultural	$	179,909	$	3,453	$	6,268	$	189,630
Real estate – construction		52,104		3,169		250		55,523
Real estate – 1-4 family mortgage		93,884		33,095		43,036		170,015
Real estate – commercial mortgage		851,851		58,156		42,009		952,016

Total	$	1,177,748	$	97,873	$	91,563	$	1,367,184


December 31, 2010
Commercial, financial, agricultural	$	184,125	$	3,536	$	3,825	$	191,486
Real estate – construction		40,129		6,528		2,309		48,966
Real estate – 1-4 family mortgage		121,896		47,911		46,972		216,779
Real estate – commercial mortgage		856,819		49,408		31,880		938,107

Total	$	1,202,969	$	107,383	$	84,986	$	1,395,338

For portfolio balances of consumer, consumer mortgage and certain other similar loan types, allowance factors are determined based on historical loss ratios by portfolio for the preceding eight quarters and may be adjusted by other qualitative criteria. The following table presents the performing status of the Company’s loan portfolio not subject to risk rating:


			Non-
	Performing		Performing		Total
September 30, 2011
Commercial, financial, agricultural	$	57,471	$	482	$	57,953
Lease financing		368		—		368
Real estate – construction		20,167		—		20,167
Real estate – 1-4 family mortgage		535,591		7,114		542,705
Real estate – commercial mortgage		152,096		916		153,012
Installment loans to individuals		56,837		108		56,945

Total	$	822,530	$	8,620	$	831,150


December 31, 2010
Commercial, financial, agricultural	$	52,866	$	—	$	52,866
Lease financing		533		—		533
Real estate – construction		17,832		—		17,832
Real estate – 1-4 family mortgage		527,086		5,999		533,085
Real estate – commercial mortgage		127,068		95		127,163
Installment loans to individuals		55,996		71		56,067

Total	$	781,381	$	6,165	$	787,546

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note D – Loans and the Allowance for Loan Losses (continued)

Past Due and Nonaccrual Loans

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Generally, the recognition of interest on mortgage and commercial loans is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Consumer and other retail loans are typically charged-off no later than 120 days past due. In all cases, loans are placed on nonaccrual status or charged-off at an earlier date if collection of principal or interest is considered doubtful. Loans may be placed on nonaccrual regardless of whether or not such loans are considered past due. All interest accrued for the current year, but not collected, for loans that are placed on nonaccrual or charged-off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The following table provides an aging of past due and nonaccrual loans, segregated by class:


	Accruing Loans										Nonaccruing Loans
	30-89 Days Past Due		90 Days or More Past Due		Current Loans			Total Accruing Loans			30-89 Days Past Due		90 Days or More Past Due		Current Loans		Total Nonaccruing Loans		Total Loans
September 30, 2011
Commercial, financial, agricultural	$	1,214	$	1,307	$	259,427		$	261,948		$	210	$	4,194	$	794	$	5,198	$	267,146
Lease financing		—		—		368			368			—		—		—		—		368
Real estate – construction		340		275		77,947			78,562			—		7,939		—		7,939		86,501
Real estate – 1-4 family mortgage		15,690		7,231		757,904			780,825			3,355		34,172		8,747		46,274		827,099
Real estate – commercial mortgage		5,054		11,707		1,239,914			1,256,675			5,907		57,827		998		64,732		1,321,407
Installment loans to individuals		459		376		60,784			61,619			3		628		15		646		62,265
Unearned income		—		—		(18	)		(18	)		—		—		—		—		(18	)

Total	$	22,757	$	20,896	$	2,396,326		$	2,439,979		$	9,475	$	104,760	$	10,554	$	124,789	$	2,564,768


December 31, 2010
Commercial, financial, agricultural	$	1,446	$	224	$	258,098		$	259,768		$	1,471	$	3,645	$	392	$	5,508	$	265,276
Lease financing		—		—		533			533			—		—		—		—		533
Real estate – construction		516		128		69,737			70,381			151		11,290		539		11,980		82,361
Real estate – 1-4 family mortgage		17,138		4,794		790,247			812,179			5,116		41,178		13,909		60,203		872,382
Real estate – commercial mortgage		5,656		2,016		1,181,452			1,189,124			3,249		44,136		3,334		50,719		1,239,843
Installment loans to individuals		336		34		63,210			63,580			415		171		59		645		64,225
Unearned income		—		—		(30	)		(30	)		—		—		—		—		(30	)

Total	$	25,092	$	7,196	$	2,363,247		$	2,395,535		$	10,402	$	100,420	$	18,233	$	129,055	$	2,524,590

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note D – Loans and the Allowance for Loan Losses (continued)

Impaired Loans

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Impairment is measured on a loan-by-loan basis for commercial and construction loans above a minimum dollar amount threshold by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are evaluated collectively for impairment. When the ultimate collectability of an impaired loan’s principal is in doubt, wholly or partially, all cash receipts are applied to principal. Once the recorded balance has been reduced to zero, future cash receipts are applied to interest income, to the extent any interest has been foregone, and then they are recorded as recoveries of any amounts previously charged-off. For impaired loans, a specific reserve is established to adjust the carrying value of the loan to its estimated net realizable value.

Impaired loans recognized in conformity with ASC 310, segregated by class, were as follows:


	September 30, 2011						Three Months Ended September 30, 2011				Nine Months Ended September 30, 2011
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized⁽¹⁾		Average Recorded Investment		Interest Income Recognized⁽²⁾
With a related allowance recorded:
Commercial, financial, agricultural	$	2,411	$	2,452	$	1,074	$	2,482	$	63	$	2,578	$	74
Real estate – construction		108		108		16		108		—		108		—
Real estate – 1-4 family mortgage		37,320		37,462		9,915		38,057		213		33,541		804
Real estate – commercial mortgage		39,569		40,326		8,712		40,836		481		40,815		865

Total	$	79,408	$	80,348	$	19,717	$	81,483	$	757	$	77,042	$	1,743

With no related allowance recorded:
Commercial, financial, agricultural	$	2,475	$	5,278	$	—	$	2,524	$	12	$	2,096	$	26
Real estate – construction		7,831		19,461		—		12,801		—		13,693		—
Real estate – 1-4 family mortgage		27,610		76,149		—		30,867		118		33,781		444
Real estate – commercial mortgage		66,624		140,068		—		77,127		251		79,816		1,267

Total	$	104,540	$	240,956	$	—	$	123,319	$	381	$	129,386	$	1,737

Totals	$	183,948	$	321,304	$	19,717	$	204,802	$	1,138	$	206,428	$	3,480


	September 30, 2010						Three Months Ended September 30, 2010				Nine Months Ended September 30, 2010
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized⁽¹⁾		Average Recorded Investment		Interest Income Recognized⁽²⁾
With a related allowance recorded:
Commercial, financial, agricultural	$	3,372	$	3,372	$	433	$	3,566	$	51	$	3,703	$	82
Real estate – construction		841		841		170		841		—		842		—
Real estate – 1-4 family mortgage		44,910		45,131		8,927		45,464		491		45,787		835
Real estate – commercial mortgage		34,600		35,782		6,073		35,181		363		35,231		638

Total	$	83,723	$	85,126	$	15,603	$	85,052	$	905	$	85,563	$	1,555

With no related allowance recorded:
Commercial, financial, agricultural	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Real estate – construction		—		—		—		—		—		—		—
Real estate – 1-4 family mortgage		6,310		9,272		—		8,288		69		8,637		69
Real estate – commercial mortgage		702		702		—		707		7		716		25

Total	$	7,012	$	9,974	$	—	$	8,995	$	76	$	9,353	$	94

Totals	$	90,735	$	95,100	$	15,603	$	94,047	$	981	$	94,916	$	1,649

⁽¹⁾	Includes interest income recognized using the cash-basis method of income recognition of $500 and $342, respectively.

⁽²⁾	Includes interest income recognized using the cash-basis method of income recognition of $891 and $599, respectively.

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note D – Loans and the Allowance for Loan Losses (continued)

Restructured Loans

Restructured loans are those for which concessions have been granted to the borrower due to a deterioration of the borrower’s financial condition. Such concessions may include reduction in interest rates or deferral of interest or principal payments. In evaluating whether to restructure a loan, management analyzes the long-term financial condition of the borrower, including guarantor and collateral support, to determine whether the proposed concessions will increase the likelihood of repayment of principal and interest.

The following table presents restructured loans segregated by class:


	Number of Loans		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
September 30, 2011
Commercial, financial, agricultural		1	$	172	$	124
Lease financing		—		—		—
Real estate – construction		—		—		—
Real estate – 1-4 family mortgage		18		19,274		17,280
Real estate – commercial mortgage		13		18,069		18,190
Installment loans to individuals		1		184		180

Total		33	$	37,699	$	35,774


December 31, 2010
Commercial, financial, agricultural		1	$	172	$	125
Lease financing		—		—		—
Real estate – construction		—		—		—
Real estate – 1-4 family mortgage		26		21,854		21,116
Real estate – commercial mortgage		11		11,080		11,193
Installment loans to individuals		1		184		181

Total		39	$	33,290	$	32,615

Changes in the Company’s restructured loans were as follows:


	Number of Loans			Recorded Investment
Totals at January 1, 2011		39		$	32,615
Additional loans with concessions		12			17,177
Reductions due to:
Reclassified as nonperforming		(15	)		(9,524	)
Transfer to other real estate owned		(1	)		(2,574	)
Charge-offs		—			—
Principal paydowns					(1,288	)
Lapse of concession period		(2	)		(632	)

Totals at September 30, 2011		33		$	35,774

The allocated allowance for loan losses attributable to restructured loans was $5,807 and $5,138 at September 30, 2011 and December 31, 2010, respectively. The Company had $772 and $1,122 in remaining availability under commitments to lend additional funds on these restructured loans at September 30, 2011 and December 31, 2010, respectively.

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note D – Loans and the Allowance for Loan Losses (continued)

Loans Acquired with Deteriorated Credit Quality

Certain loans acquired in connection with prior acquisitions (excluding FDIC-assisted acquisitions) exhibited, at the date of acquisition, evidence of deterioration of the credit quality since origination, and it was probable that all contractually required payments would not be collected. The amount of such loans included in the Consolidated Balance Sheets under the line item “Loans - Not covered under loss-share agreements” at September 30, 2011 were as follows:


Real estate – 1-4 family mortgage	$	1,209
Real estate – commercial mortgage		1,761

Total outstanding balance		2,970
Nonaccretable difference		(711	)

Cash flows expected to be collected		2,259
Accretable yield		(85	)

Fair value	$	2,174

Changes in the accretable yield of these loans were as follows:


Balance at January 1, 2011	$	(172	)
Additions		—
Reclassifications from nonaccretable difference		(68	)
Accretion		155

Balance at September 30, 2011	$	(85	)

The following table presents the fair value of loans covered by loss-share agreements determined to be impaired at the time of acquisition and determined not to be impaired at the time of acquisition at September 30, 2011:


	Impaired Loans			Non-impaired Loans			Total Covered Loans
Contractually-required principal and interest	$	102,899		$	345,908		$	448,807
Nonaccretable difference⁽¹⁾		(36,467	)		(42,070	)		(78,537	)

Cash flows expected to be collected		66,432			303,838			370,270
Accretable yield⁽²⁾		(841	)		(9,616	)		(10,457	)

Fair value	$	65,591		$	294,222		$	359,813

⁽¹⁾

Represents contractual principal and interest cash flows of $67,385 and $11,152, respectively, not expected to be collected.

⁽²⁾

Represents future interest payments of $6,678 expected to be collected and purchase discount of $3,779.

Changes in the accretable yield of covered loans were as follows:


	Impaired Loans			Non-impaired Loans			Total Covered Loans
Balance at January 1, 2011	$	(3,626	)	$	(15	)	$	(3,641	)
Additions through acquisition		—			(3,405	)		(3,405	)
Reclassifications from nonaccretable difference		—			(325	)		(325	)
Accretion		2,785			807			3,592

Balance at September 30, 2011	$	(841	)	$	(2,938	)	$	(3,779	)

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note E – Other Real Estate and Repossessions

(In Thousands)

The following table provides details of the Company’s other real estate owned and repossessions (“OREO”) covered and not covered under a loss-share agreement:


	Covered OREO		Not Covered OREO		Total OREO
September 30, 2011
Residential real estate	$	9,935	$	15,650	$	25,585
Commercial real estate		8,355		13,628		21,983
Residential land development		5,753		37,416		43,169
Commercial land development		19,978		5,951		25,929
Other		—		120		120

Total other real estate and repossessions	$	44,021	$	72,765	$	116,786


December 31, 2010
Residential real estate	$	12,029		15,445		27,474
Commercial real estate		8,360		18,266		26,626
Residential land development		13,280		33,172		46,452
Commercial land development		21,046		4,501		25,547
Other		—		449		449

Total other real estate owned and repossessions	$	54,715	$	71,833	$	126,548

Changes in the Company’s OREO covered and not covered under a loss-share agreement were as follows:


	Covered OREO			Not Covered OREO			Total OREO
Balance at January 1, 2011	$	54,715		$	71,833		$	126,548
Transfers of loans		2,314			28,965			31,279
Capitalized improvements		—			41			41
Impairments		(110	)		(6,802	)		(6,912	)
Dispositions		(12,896	)		(21,863	)		(34,759	)
Other		(2	)		591			589

Balance at September 30, 2011	$	44,021		$	72,765		$	116,786

OREO with a cost basis of $34,759 was sold during the nine months ended September 30, 2011, resulting in a net loss of $2,414, while OREO with a cost basis of $19,216 was sold during the nine months ended September 30, 2010, resulting in a net loss of $746.

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note F – FDIC Loss-Share Indemnification Asset

(In Thousands)

As part of the loan portfolio fair value estimation in connection with the Crescent and American Trust acquisitions, the Bank established a FDIC loss-share indemnification asset, which represents the present value of the estimated losses on loans to be reimbursed by the FDIC. The estimated losses were based on the same cash flow estimates used in determining the fair value of the loans. The FDIC loss-share indemnification asset will be reduced as losses are recognized on loans and loss-share payments are received from the FDIC. Realized losses in excess of estimates as of the dates of the respective acquisitions will increase the FDIC loss-share indemnification asset. Conversely, if realized losses are less than these estimates, the portion of the FDIC loss-share indemnification asset no longer expected to result in a payment from the FDIC will be amortized to interest income using the effective interest method.

Changes in the loss-share indemnification asset were as follows:


Balance at January 1, 2011	$	155,657
Additions through acquisition		11,926
Realized losses in excess of initial estimates		128
Reimbursements received		(40,330	)
Accretion		600

Balance at September 30, 2011	$	127,981

Note G - Employee Benefit and Deferred Compensation Plans

(In Thousands, Except Share Data)

The plan expense for the Company-sponsored noncontributory defined benefit pension plan (“Pension Benefits”) and post-retirement health and life plans (“Other Benefits”) for the periods presented was as follows:


	Pension Benefits						Other Benefits
	Three Months Ended September 30,						Three Months Ended September 30,
	2011			2010			2011		2010
Service cost	$	—		$	—		$	9	$	9
Interest cost		228			248			21		23
Expected return on plan assets		(307	)		(252	)		—		—
Prior service cost recognized		—			5			—		—
Recognized actuarial loss		76			92			34		30
Recognized curtailment loss		—			—			—		—

Net periodic benefit (income) cost	$	(3	)	$	93		$	64	$	62


	Nine Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011		2010
Service cost	$	—		$	—		$	27	$	28
Interest cost		686			742			59		69
Expected return on plan assets		(923	)		(756	)		—		—
Prior service cost recognized		—			15			—		—
Recognized actuarial loss		228			278			106		89
Recognized curtailment loss		—			—			—		—

Net periodic benefit (income) cost	$	(9	)	$	279		$	192	$	186

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note G – Employee Benefit and Deferred Compensation Plans (continued)

In January 2011 and 2010, the Company granted stock options which generally vest and become exercisable in equal installments of 33 1/3% upon completion of one, two and three years of service measured from the grant date. The fair value of stock option grants is estimated on the grant date using the Black-Scholes option-pricing model. The Company employed the following assumptions with respect to its stock option grants in 2011 and 2010 for the nine month periods ended September 30, 2011 and 2010:


	2011 Grant			2010 Grant
Shares granted		170,000			138,500
Dividend yield		4.02	%		4.74	%
Expected volatility		36	%		34	%
Risk-free interest rate		1.97	%		2.48	%
Expected lives		6 years			6 years
Weighted average exercise price	$	16.91		$	14.22
Weighted average fair value	$	3.93		$	3.01

In addition, the Company awarded 7,500 shares of time-based restricted stock and 34,500 shares of performance-based restricted stock in January 2011. The time-based restricted stock is earned 100% upon completion of three years of service measured from the grant date. The performance-based restricted stock is earned, if at all, if the Company meets or exceeds financial performance results defined by the board of directors for the year in which the grant was made. The fair value of the restricted stock grants on the date of the grants was $16.91 per share.

During the nine months ended September 30, 2011, the Company reissued 17,956 shares from treasury in connection with the exercise of stock-based compensation. The Company recorded total stock-based compensation expense of $904 and $373 for the nine months ended September 30, 2011 and 2010, respectively.

Note H – Segment Reporting

(In Thousands)

The Company’s internal reporting process is currently organized into four segments that account for the Company’s principal activities: the delivery of financial services through its community banks in Mississippi, Tennessee and Alabama and the delivery of insurance services through its insurance agency. In order to give the Company’s regional management a more precise indication of the income and expenses they can control, the results of operations for the geographic regions of the community banks and for the insurance company reflect the direct revenues and expenses of each respective segment. The Company believes this management approach will enable its regional management to focus on serving customers through loan originations and deposit gathering. Indirect revenues and expenses, including but not limited to income from the Company’s investment portfolio, as well as certain costs associated with data processing and back office functions, are not allocated to the Company’s segments. Rather, these revenues and expenses are shown in the “Other” column along with the operations of the holding company and eliminations which are necessary for purposes of reconciling to the consolidated amounts. The operations of Crescent and American Trust are included in the operations of the Tennessee community bank. Management believes future strategic opportunities in eastern Tennessee will result from the operations acquired in Georgia.

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note H – Segment Reporting (continued)

The following table provides financial information for the Company’s operating segments for the periods presented:


	Community Banks
	Mississippi		Tennessee		Alabama		Insurance		Other			Consolidated
Three Months Ended September 30, 2011
Net interest income	$	12,034	$	12,385	$	6,620	$	23	$	1,802		$	32,864
Provision for loan losses		1,766		3,181		553		—		—			5,500
Noninterest income		7,058		2,927		2,031		871		6,726			19,613
Noninterest expense		8,417		7,842		4,088		755		17,027			38,129

Income before income taxes		8,909		4,289		4,010		139		(8,499	)		8,848
Income taxes		2,332		1,271		1,124		54		(2,465	)		2,316

Net income (loss)	$	6,577	$	3,018	$	2,886	$	85	$	(6,034	)	$	6,532


Nine Months Ended September 30, 2011
Net interest income	$	38,202	$	39,567	$	20,190	$	84	$	(1,461	)	$	96,582
Provision for loan losses		4,501		8,410		3,439		—		—			16,350
Noninterest income		21,354		16,161		5,799		2,812		8,586			54,712
Noninterest expense		24,538		26,491		12,622		2,211		41,545			107,407

Income before income taxes		30,517		20,827		9,928		685		(34,420	)		27,537
Income taxes		8,656		5,919		2,848		266		(9,994	)		7,695

Net income (loss)	$	21,861	$	14,908	$	7,080	$	419	$	(24,426	)	$	19,842


September 30, 2011
Total assets	$	1,510,750	$	1,858,763	$	752,004	$	9,452	$	5,505		$	4,136,474
Goodwill		2,265		133,316		46,515		2,783		—			184,879

Three Months Ended September 30, 2010
Net interest income	$	11,841	$	9,404	$	5,641	$	28	$	203		$	27,117
Provision for loan losses		2,530		6,413		2,557		—		—			11,500
Noninterest income		7,122		44,183		2,518		840		(129	)		54,534
Noninterest expense		8,246		9,286		5,320		743		15,976			39,571

Income before income taxes		8,187		37,888		282		125		(15,902	)		30,580
Income taxes		1,877		12,818		65		48		(3,779	)		11,029

Net income (loss)	$	6,310	$	25,070	$	217	$	77	$	(12,123	)	$	19,551


Nine Months Ended September 30, 2010
Net interest income	$	37,978	$	24,394	$	16,344	$	92	$	(3,601	)	$	75,207
Provision for loan losses		5,268		15,610		4,287		—		—			25,165
Noninterest income		21,768		47,007		6,369		2,760		3,458			81,362
Noninterest expense		24,044		18,744		13,319		2,208		33,078			91,393

Income before income taxes		30,434		37,047		5,107		644		(33,221	)		40,011
Income taxes		6,978		12,625		1,171		250		(7,967	)		13,057

Net income (loss)	$	23,456	$	24,422	$	3,936	$	394	$	(25,254	)	$	26,954


September 30, 2010
Total assets	$	1,409,567	$	2,043,958	$	786,832	$	8,810	$	7,086		$	4,256,253
Goodwill		2,265		133,316		46,515		2,783		—			184,879

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note I – Derivative Instruments

(In Thousands)

The Company utilizes derivative financial instruments as part of its ongoing efforts to manage its interest rate risk exposure and to facilitate the needs of its customers. The Company’s objectives for utilizing these derivative financial instruments are described below.

The Company utilizes interest rate contracts, including swaps, caps and/or floors, to mitigate exposure to interest rate risk and to facilitate the needs of its customers. Beginning in the first quarter of 2011, the Company began entering into derivative instruments that are not designated as hedging instruments to help its commercial customers manage their exposure to interest rate fluctuations. To mitigate the interest rate risk associated with these customer contracts, the Company enters into an offsetting derivative contract position. The Company manages its credit risk, or potential risk of default by its commercial customers, through credit limit approval and monitoring procedures. At September 30, 2011, the Company had notional amounts of $27,248 on interest rate contracts with corporate customers and $32,348 in offsetting interest rate contracts with other financial institutions to mitigate the Company’s rate exposure on its corporate customers’ contracts.

In May 2010, the Company terminated two interest rate swaps, each designated as a cash flow hedge, designed to convert the variable interest rate on an aggregate of $75,000 of loans to a fixed rate. As of the termination date, there were $1,679 of deferred gains related to the swaps, which are being amortized into interest income over the designated hedging periods ending in August 2012 and August 2013. Deferred gains related to the swaps of $457 and $209 were amortized into net interest income for the nine months ended September 30, 2011 and 2010, respectively.

The Company enters into interest rate lock commitments with its customers to mitigate the interest rate risk associated with the commitments to fund fixed-rate residential mortgage loans. The notional amount of commitments to fund fixed-rate mortgage loans was $66,546 and $31,685 at September 30, 2011 and December 31, 2010, respectively. The Company also enters into forward commitments to sell residential mortgage loans to secondary market investors. The notional amount of commitments to sell residential mortgage loans to secondary market investors was $68,311 at September 30, 2011. These mortgage loan commitments are recorded at fair value, with gains and losses arising from changes in the valuation of the commitments reflected under the line item “Gains on sales of mortgage loans held for sale” on the Consolidated Statements of Income and do not qualify for hedge accounting.

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note I – Derivative Instruments (continued)

The following table provides details on the Company’s derivative financial instruments:


	September 30, 2011			December 31, 2010
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivative assets:
Not designated as hedging instruments:
Interest rate contracts	Other Assets	$	1,685	Other Assets	$	941
Interest rate lock commitments	Other Assets		1,794	Other Assets		316

Totals		$	3,479		$	1,257


Derivative liabilities:
Not designated as hedging instruments:
Interest rate contracts	Other Liabilities	$	1,973	Other Liabilities	$	941
Forward commitments	Other Liabilities		839	Other Liabilities		—

Totals		$	2,812		$	941


Totals not designated as hedging instruments		$	667		$	316

The effect of the Company’s derivative financial instruments on the Consolidated Statements of Income was as follows:


	Income Statement Location	Three Months Ended September 30,
		2011			2010
Derivatives not designated as hedging instruments:
Interest rate contracts	Interest Income on Loans	$	203		$	—
Interest rate lock commitments	Gains on Sales of Mortgage Loans Held for Sale		1,324			30
Forward commitments	Gains on Sales of Mortgage Loans Held for Sale		(808	)		—

Total		$	719		$	30


	Income Statement Location	Nine Months Ended September 30,
		2011			2010
Derivatives designated as cash flow hedging instruments:
Interest rate contracts	Interest Income on Loans	$	—		$	552
Interest rate contracts	Interest Expense on Borrowings		—			225

Total		$	—		$	327

Derivatives not designated as hedging instruments:
Interest rate contracts	Interest Income on Loans	$	363		$	—
Interest rate lock commitments	Gains on Sales of Mortgage Loans Held for Sale		1,478			135
Forward commitments	Gains on Sales of Mortgage Loans Held for Sale		(839	)		—

Total		$	1,002		$	135

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note J – Fair Value Measurements

(In Thousands)

Fair Value Measurements and the Fair Level Hierarchy

ASC 820 provides guidance for using fair value to measure assets and liabilities and also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to a valuation based on quoted prices in active markets for identical assets and liabilities (Level 1), moderate priority to a valuation based on quoted prices in active markets for similar assets and liabilities and/or based on assumptions that are observable in the market (Level 2), and the lowest priority to a valuation based on assumptions that are not observable in the market (Level 3).

The following methods and assumptions are used by the Company to estimate the fair values of the Company’s financial assets and liabilities that are measured on a recurring basis:

Securities available for sale: Securities available for sale consist primarily of debt securities such as obligations of U.S. Government agencies and corporations, mortgage-backed securities and trust preferred securities. For securities available for sale, fair values for debt securities are based on quoted market prices, where available, or a discounted cash flow model. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments. The fair value of equity securities traded in an active market is based on quoted market prices; for equity securities not traded in an active market, fair value approximates their historical cost.

Derivative instruments: Interest rate contracts, including swaps, caps and/or floors, are extensively traded in over-the-counter markets at prices based upon projections of future cash payments/receipts discounted at market rates. The fair value of the Company’s interest rate contracts is determined based upon discounted cash flows. The fair values of the Company’s interest rate lock commitments to fund fixed-rate residential mortgage loans and forward commitments to sell residential mortgage loans to secondary market investors are based on readily available quoted market prices.

Certain assets may be recorded at fair value on a nonrecurring basis. These nonrecurring fair value adjustments typically are a result of the application of the lower of cost or market accounting or a write-down occurring during the period. The following methods and assumptions are used by the Company to estimate the fair values of the Company’s financial assets and liabilities measured on a nonrecurring basis:

Mortgage loans held for sale: Mortgage loans held for sale are carried at the lower of cost or fair value. If fair value is used, it is determined using current secondary market prices for loans with similar characteristics, that is, using Level 2 inputs. Mortgage loans held for sale were carried at cost on the Consolidated Balance Sheets at September 30, 2011 and December 31, 2010.

Impaired loans: Loans considered impaired are reserved for at the time the loan is identified as impaired taking into account the fair value of the collateral less estimated selling costs. Collateral may be real estate and/or business assets including but not limited to equipment, inventory and accounts receivable. The fair value of real estate is determined based on appraisals by qualified licensed appraisers. The fair value of the business assets is generally based on amounts reported on the business’s financial statements. Appraised and reported values may be adjusted based on changes in market conditions from the time of valuation and management’s knowledge of the client and the client’s business. Since not all valuation inputs are observable, these nonrecurring fair value determinations are classified as Level 3. Impaired loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the same factors previously identified. Impaired loans covered under loss-share agreements were recorded at their fair value upon the acquisition date, and no fair value adjustments were necessary through September 30, 2011 or for the year ended December 31, 2010.

Other real estate owned: OREO is comprised of commercial and residential real estate obtained in partial or total satisfaction of loan obligations. OREO covered under loss-share agreements were recorded at their fair value upon their acquisition date. OREO not covered under loss-share agreements acquired in settlement of indebtedness is recorded at the fair value of the real estate less estimated costs to sell. Subsequently, it may be necessary to record nonrecurring fair value adjustments for declines in fair value. Fair value, when recorded, is determined based on appraisals by qualified licensed appraisers and adjusted for management’s estimates of costs to sell. Accordingly, values for OREO are classified as Level 3.

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note J – Fair Value Measurements (continued)

The following table presents assets and liabilities that are measured at fair value on a recurring basis:


	Quoted Prices In Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Totals
September 30, 2011
Financial assets:
Securities available for sale:
Obligations of other U.S. Government agencies and corporations	$	—	$	34,933	$	—	$	34,933
Mortgage-backed securities		—		408,595		—		408,595
Trust preferred securities		—		—		9,986		9,986
Other equity securities		—		—		14,491		14,491

Total securities available for sale		—		443,528		24,477		468,005
Derivative instruments:
Interest rate contracts		—		1,685		—		1,685
Interest rate lock commitments		—		1,794		—		1,794

Total derivative instruments		—		3,479		—		3,479

Total financial assets	$	—	$	447,007	$	24,477	$	471,484

Financial liabilities:
Derivative instruments:
Interest rate contracts	$	—	$	1,973	$	—	$	1,973
Forward commitments		—		839		—		839

Total derivative instruments		—		2,812		—		2,812

Total financial liabilities	$	—	$	2,812	$	—	$	2,812


December 31, 2010
Securities available for sale:
Obligations of other U.S. Government agencies and corporations	$	—	$	72,752	$	—	$	72,752
Mortgage-backed securities		—		496,510		—		496,510
Trust preferred securities		—		3,150		1,433		4,583
Other equity securities		—		—		29,841		29,841

Total securities available for sale		—		572,412		31,274		603,686
Derivative instruments:
Interest rate contracts		—		941		—		941
Interest rate lock commitments		—		316		—		316

Total derivative instruments		—		1,257		—		1,257

Total financial assets	$	—	$	573,669	$	31,274	$	604,943

Financial liabilities:
Derivative instruments:
Interest rate contracts	$	—	$	941	$	—	$	941

Total derivative instruments		—		941		—		941

Total financial liabilities	$	—	$	941	$	—	$	941

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note J – Fair Value Measurements (continued)

The following table provides a reconciliation for assets and liabilities measured at fair value on a recurring basis using Level 3 inputs during the nine months ended September 30, 2011:


	Securities available for sale
	Trust preferred securities			Other equity securities			Total
Balance at January 1, 2011	$	1,433		$	29,841		$	31,274
Transfers in and/or out of Level 3		—			(12,453	)		(12,453	)
Realized gains (losses) included in net income		(256	)		23			(233	)
Unrealized gains (losses) included in other comprehensive income		7,595			(77	)		7,518
Additions through acquisition		—			1,194			1,194
Capitalization of interest		1,214			—			1,214
Settlements		—			(4,037	)		(4,037	)

Balance at September 30, 2011	$	9,986		$	14,491		$	24,477

The following table presents assets measured at fair value on a nonrecurring basis that were still held in the Consolidated Balance Sheets at those respective dates:


	Level 1		Level 2		Level 3		Totals
September 30, 2011
Impaired loans	$	—	$	—	$	79,408	$	79,408
Other real estate owned:
Covered under loss-share agreements		—		—		1,875		1,875
Not covered under loss-share agreements		—		—		15,239		15,239

Total other real estate owned		—		—		17,114		17,114

December 31, 2010
Impaired loans	$	—	$	—	$	78,954	$	78,954
Other real estate owned:
Not covered under loss-share agreements		—		—		15,150		15,150

Impaired loans not covered under loss-share agreements with a carrying value of $79,408 and $78,954 had an allocated allowance for loan losses of $19,717 and $17,529 at September 30, 2011 and December 31, 2010, respectively. The allocated allowance is based on the carrying value of the impaired loan and the fair value of the underlying collateral less estimated costs to sell.

OREO covered under loss-share agreements with a carrying amount of $1,985 was written down to $1,875, resulting in a loss of $110, of which $22 was included in the results of operations for the nine months ended September 30, 2011. The remainder of $88 increased the FDIC loss-share indemnification asset. OREO covered under loss-share agreements were recorded at their fair value upon the acquisition date of July 23, 2010, and no fair value adjustments were necessary through December 31, 2010.

OREO not covered under loss-share agreements with a carrying amount of $21,826 was written down to $15,239, resulting in a loss of $6,587, which was included in the results of operations for the nine months ended September 30, 2011. OREO with a carrying amount of $18,816 was written down to $15,150, resulting in a loss of $3,666, which was included in the results of operations for the year ended December 31, 2010.

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note J – Fair Value Measurements (continued)

Fair Value of Financial Instruments

The carrying amounts and estimated fair values of the Company’s financial instruments, including those assets and liabilities that are not measured and reported at fair value on a recurring basis or nonrecurring basis, were as follows:


	September 30, 2011				December 31, 2010
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets
Cash and cash equivalents	$	235,317	$	235,317	$	292,669	$	292,669
Securities held to maturity		250,876		262,342		230,786		228,157
Securities available for sale		468,005		468,005		603,686		603,686
Mortgage loans held for sale		24,739		24,739		27,704		27,704
Loans covered under loss-share agreements		359,813		362,866		333,681		334,096
Loans not covered under loss-share agreements		2,156,423		2,183,086		2,145,494		2,123,169
FDIC loss-share indemnification asset		127,981		127,981		155,657		155,657
Derivative instruments		3,479		3,479		1,257		1,257

Financial liabilities
Deposits		3,342,355		3,352,236		3,468,151		3,468,574
Short-term borrowings		17,388		17,388		15,386		15,386
Federal Home Loan Bank advances		119,370		130,356		175,119		181,909
Junior subordinated debentures		75,811		28,237		75,931		25,073
TLGP Senior Note		50,000		50,834		50,000		50,361
Derivative instruments		2,812		2,812		941		941

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value. The methodologies for estimating the fair value of financial assets and liabilities that are measured at fair value on a recurring or nonrecurring basis are discussed above.

Cash and cash equivalents: Cash and cash equivalents consists of cash and due from banks and interest-bearing balances with banks. The carrying amount reported in the Consolidated Balance Sheets for cash and cash equivalents approximates fair value based on the short-term nature of these assets.

Securities held to maturity: For securities held to maturity, fair values for debt securities are based on quoted market prices, where available, or a discounted cash flow model. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.

Loans covered under loss-share agreements: The fair value of loans covered under loss-share agreements is based on the net present value of future cash proceeds expected to be received using discount rates that are derived from current market rates and reflect the level of interest risk in the covered loans.

Loans not covered under loss-share agreements: For variable-rate loans not covered under loss-share agreements that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. Fair values of fixed-rate loans not covered under loss-share agreements, including mortgages, commercial, agricultural and consumer loans, are estimated using a discounted cash flow analysis based on interest rates currently being offered for loans with similar terms to borrowers of similar credit quality.

FDIC loss-share indemnification asset: The fair value of the FDIC loss-share indemnification asset is based on the net present value of future cash flows expected to be received from the FDIC under the provisions of the loss-share agreements using a discount rate that is based on current market rates for the underlying covered loans. Current market rates are used in light of the uncertainty of the timing and receipt of the loss-share reimbursement from the FDIC.

Deposits: The fair values disclosed for demand deposits, both interest-bearing and noninterest-bearing, are, by definition, equal to the amount payable on demand at the reporting date. The fair values of certificates of deposit and individual retirement accounts are estimated using a discounted cash flow based on currently effective interest rates for similar types of accounts.

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note J – Fair Value Measurements (continued)

Short-term borrowings: Short-term borrowings consist of treasury, tax and loan notes and securities sold under agreements to repurchase. The fair value of these short-term borrowings approximates the carrying value of the amounts reported in the Consolidated Balance Sheets for each respective account.

Federal Home Loan Bank advances: The fair value for Federal Home Loan Bank (“FHLB”) advances is determined by discounting the future cash flows using the current market rate.

Junior subordinated debentures: The fair value for the Company’s junior subordinated debentures is determined by discounting the future cash flows using the current market rate.

TLGP Senior Note: The fair value for the Company’s senior note guaranteed by the FDIC under the Temporary Liquidity Guarantee Program (“TLGP”) is determined by discounting the future cash flows using the current market rate.

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note K – Other Comprehensive Income

(In Thousands)

The components of other comprehensive income were as follows:


	Three Months Ended September 30,
	2011			2010
Net income	$	6,532		$	19,551
Other comprehensive income:
Unrealized holding gains on securities, net of tax expense of $4,932 and $3,356		7,963			5,418
Non-credit related portion of other-than-temporary impairment on securities, net of tax benefit of $4,013		—			(6,478	)
Reclassification adjustment for gains realized in net income, net of tax expense of $2,002 and $840		(3,234	)		(1,355	)

Net change in unrealized losses on securities		4,729			(2,415	)
Reclassification adjustment on derivative instruments for gains realized in net income, net of tax expense of $59 and $59		(95	)		(95	)
Net change in defined benefit pension and post-retirement benefit plans, net of tax expense of $42 and $49		69			79

Other comprehensive income (loss)		4,703			(2,431	)

Comprehensive income	$	11,235		$	17,120


	Nine Months Ended September 30,
	2011			2010
Net income	$	19,842		$	26,954
Other comprehensive income:
Unrealized holding gains on securities, net of tax expense of $14,009 and $5,498		22,618			8,876
Non-credit related portion of other-than-temporary impairment on securities, net of tax benefit of $5,807 and $4,465		(9,376	)		(7,208	)
Reclassification adjustment for gains realized in net income, net of tax expense of $2,150 and $1,798		(3,472	)		(2,902	)

Net change in unrealized gains (losses) on securities		9,770			(1,234	)
Unrealized holding gains on derivative instruments, net of tax expense of $98		—			158
Reclassification adjustment for gains realized in net income, net of tax expense of $175 and $80		(282	)		(129	)

Net change in unrealized gains on derivative instruments		(282	)		29
Net change in defined benefit pension and post-retirement benefit plans, net of tax expense of $127 and $146		206			236

Other comprehensive income (loss)		9,694			(969	)

Comprehensive income	$	29,536		$	25,985

Renasant Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note K – Other Comprehensive Income (continued)

The accumulated balances for each component of other comprehensive income, net of tax, were as follows:


	September 30, 2011			September 30, 2010
Net unrealized gains on securities	$	7,826		$	3,911
Net non-credit related portion of other-than-temporary impairment on securities		(9,376	)		(7,208	)
Net unrealized gains on derivative instruments		531			908
Net unrecognized defined benefit pension and post-retirement benefit plans obligations		(5,728	)		(6,036	)

Total accumulated other comprehensive loss	$	(6,747	)	$	(8,425	)

Note L – Net Income Per Common Share

(In Thousands, Except Share Data)

Basic and diluted net income per common share were as follows:


	Three Months Ended September 30,
	2011		2010
Basic
Net income applicable to common stock	$	6,532	$	19,551
Average common shares outstanding		25,061,068		24,098,629
Net income per common share - basic	$	0.26	$	0.81

Diluted
Net income applicable to common stock	$	6,532	$	19,551
Average common shares outstanding		25,061,068		24,098,629
Effect of dilutive stock-based compensation		119,855		110,013

Average common shares outstanding - diluted		25,180,923		24,208,642
Net income per common share - diluted	$	0.26	$	0.81


	Nine Months Ended September 30,
	2011		2010
Basic
Net income applicable to common stock	$	19,842	$	26,954
Average common shares outstanding		25,057,458		22,101,234
Net income per common share - basic	$	0.79	$	1.22

Diluted
Net income applicable to common stock	$	19,842	$	26,954
Average common shares outstanding		25,057,458		22,101,234
Effect of dilutive stock-based compensation		128,719		129,043

Average common shares outstanding - diluted		25,186,177		22,230,277
Net income per common share - diluted	$	0.79	$	1.21

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(In Thousands, Except Share Data)

This Form 10-Q may contain or incorporate by reference statements regarding Renasant Corporation (referred to herein as the “Company”, “we”, “our”, or “us”) which may 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. Such forward-looking statements usually include words such as “expects,” “projects,” “proposes,” “anticipates,” “believes,” “intends,” “estimates,” “strategy,” “plan,” “potential,” “possible” and other similar expressions. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those contemplated by such forward-looking statements.

Important factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include (1) the Company’s ability to efficiently integrate its acquisitions of Crescent Bank & Trust Company, American Trust Bank and the trust department of RBC Bank (USA) (each of which are described below) into its operations, retain the customers of these businesses and grow the acquired operations; (2) the effect of economic conditions and interest rates on a national, regional or international basis; (3) the timing of the implementation of changes in operations to achieve enhanced earnings or effect cost savings; (4) competitive pressures in the consumer finance, commercial finance, insurance, financial services, asset management, retail banking, mortgage lending and auto lending industries; (5) the financial resources of, and products available to, competitors; (6) changes in laws and regulations, including changes in accounting standards; (7) changes in policy by regulatory agencies; (8) changes in the securities and foreign exchange markets; (9) the Company’s potential growth, including its entrance or expansion into new markets, and the need for sufficient capital to support that growth; (10) 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; (11) an insufficient allowance for loan losses as a result of inaccurate assumptions; (12) general economic, market or business conditions; (13) changes in demand for loan products and financial services; (14) concentration of credit exposure; (15) changes or the lack of changes in interest rates, yield curves and interest rate spread relationship; and (16) other circumstances, many of which are beyond management’s control. Management undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

Overview

Renasant Corporation owns and operates Renasant Bank (“Renasant Bank” or the “Bank”) and Renasant Insurance, Inc. The Company offers a diversified range of financial and insurance services to its retail and commercial customers through its subsidiaries and full service offices located throughout north and north central Mississippi, west and middle Tennessee, north and central Alabama and north Georgia.

On August 31, 2011, the Company acquired the Birmingham, Alabama-based trust department of RBC Bank (USA), which services clients in Alabama and Georgia. The transition from RBC Bank (USA) to Renasant for client accounts and personnel was completed on September 1, 2011. Under the terms of the transaction, RBC Bank (USA) transferred its approximately $680,000 in assets under management, comprised of personal and institutional clients with over 200 trust, custodial and escrow accounts, to a wholly-owned subsidiary, and Renasant Bank acquired all of the ownership interests in the subsidiary. In connection with the acquisition, the Company recognized a gain of $570. Acquisition costs related to the transaction of $326 were recognized in noninterest expense for the three and nine months ended September 30, 2011.

On February 4, 2011, the Bank acquired specified assets and assumed specified liabilities of American Trust Bank, a Georgia-chartered bank headquartered in Roswell, Georgia (“American Trust”), from the Federal Deposit Insurance Corporation (the “FDIC”), as receiver for American Trust. American Trust operated, and the Bank acquired and retained, 3 branches in the northwest region of Georgia. The Bank acquired assets with a fair value of $247,505, including loans with a fair value of $74,399, and assumed liabilities with a fair value of $238,731, including deposits with a fair value of $223,007. At the acquisition date, approximately $73,657 of acquired loans were covered by loss-share agreements between the FDIC and the Bank. The acquisition of American Trust resulted in a pre-tax gain of $8,774. For more information regarding this transaction, please refer to Note B, “Mergers and Acquisitions,” in the Notes to Consolidated Financial Statements included in Item 1, “Financial Statements.”

On July 23, 2010, the Bank acquired specified assets and assumed specified liabilities of Crescent Bank & Trust Company, a Georgia-chartered bank headquartered in Jasper, Georgia (“Crescent”), from the FDIC, as receiver for Crescent. Crescent operated, and the Bank acquired and retained, 11 branches in the northwest region of Georgia. The Bank acquired assets with a fair value of $959,307, including loans with a fair value of $371,100, and assumed liabilities with a fair value of $917,096, including deposits with a fair value of $890,103. At the acquisition date, approximately $361,472 of acquired loans and $50,168 of other real estate owned were covered by loss-share agreements between the FDIC and the Bank. For more information regarding this transaction, please refer to Note B, “FDIC-Assisted Acquisition of Certain Assets and Liabilities of Crescent Bank & Trust,” in the Notes to Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

Financial Condition

The Company’s total assets were $4,136,474 at September 30, 2011 as compared to $4,297,327 on December 31, 2010.

Cash and cash equivalents decreased to $235,317 at September 30, 2011 from $292,669 at December 31, 2010. Cash and cash equivalents represented 5.69% of total assets at September 30, 2011 compared to 6.81% of total assets at December 31, 2010.

Investments

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, for the periods presented:


	September 30, 2011		Percentage of Portfolio			December 31, 2010		Percentage of Portfolio
Obligations of other U.S. Government agencies and corporations	$	63,151		8.78	%	$	97,455		11.68	%
Mortgage-backed securities		408,595		56.84			496,510		59.50
Obligations of states and political subdivisions		222,658		30.97			206,083		24.70
Trust preferred securities		9,986		1.39			4,583		0.54
Other equity securities		14,491		2.02			29,841		3.58

Total investments	$	718,881		100.00	%	$	834,472		100.00	%

During the first nine months of 2011, we purchased $147,201 in investment securities. The purchases were primarily mortgage-backed securities and collateralized mortgage obligations (“CMOs”), which in the aggregate made up approximately 39.09% of the purchases. CMOs are included in the “Mortgage-backed securities” line item in the above table. The mortgage-backed securities and CMOs held in our investment portfolio are primarily issued by government sponsored entities. U.S. Government Agency securities and municipal securities accounted for approximately 31.39% and 29.52%, respectively, of the remainder of the securities purchased in the first nine months of 2011. The carrying value of securities sold during the first nine months of 2011 totaled $94,023, consisting of mortgage-backed securities and municipal securities. Maturities and calls of securities during the first nine months of 2011 totaled $178,047. At September 30, 2011, unrealized losses of $20,471 were recorded on investment securities with a carrying value of $24,051.

Loans

The table below sets forth the balance of loans outstanding by loan type and the percentage of each loan type to the entire portfolio, as of the dates presented:


	September 30, 2011		Percentage of Total Loans			December 31, 2010		Percentage of Total Loans
Commercial, financial, agricultural	$	267,146		10.42	%	$	265,276		10.51	%
Lease financing		350		0.01			503		0.02
Real estate – construction		86,501		3.37			82,361		3.26
Real estate – 1-4 family mortgage		827,099		32.25			872,382		34.56
Real estate – commercial mortgage		1,321,407		51.52			1,239,843		49.11
Installment loans to individuals		62,265		2.43			64,225		2.54

Total loans, net of unearned income	$	2,564,768		100.00	%	$	2,524,590		100.00	%

Loan concentrations are considered to exist when there are amounts loaned to a number of borrowers engaged in similar activities which would cause them to be similarly impacted by economic or other conditions. At September 30, 2011, 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.

At September 30, 2011, loans increased $40,178 from December 31, 2010 which is primarily a result of the acquisition of American Trust. The loans acquired in the American Trust acquisition were, for the most part, covered under loss-share agreements with the FDIC. For loans covered under the loss-share agreements (referred to as “covered loans” or “loans covered under loss-share agreements”), the FDIC will reimburse the Bank 80% of the losses incurred on these loans.

The following table provides a breakdown of loans covered and not covered under a loss-share agreement as of the dates presented:


	September 30, 2011						December 31, 2011
	Covered Loans		Not Covered Loans		Total Loans		Covered Loans		Not Covered Loans		Total Loans
Commercial, financial, agricultural	$	19,196	$	247,950	$	267,146	$	20,921	$	244,355	$	265,276
Lease financing		—		350		350		—		503		503
Real estate – construction:
Residential		3,946		29,669		33,615		6,476		31,143		37,619
Commercial		6,865		42,090		48,955		9,087		30,638		39,725
Condominiums		—		3,931		3,931		—		5,017		5,017

Total real estate – construction		10,811		75,690		86,501		15,563		66,798		82,361
Real estate – 1-4 family mortgage:
Primary		22,269		340,990		363,259		19,786		343,712		363,498
Home equity		24,506		165,182		189,688		21,454		161,973		183,427
Rental/investment		45,475		133,797		179,272		51,065		148,308		199,373
Land development		21,978		72,902		94,880		30,214		95,870		126,084

Total real estate – 1-4 family mortgage		114,228		712,871		827,099		122,519		749,863		872,382
Real estate – commercial mortgage:
Owner-occupied		108,551		525,675		634,226		71,455		522,288		593,743
Non-owner occupied		48,088		470,282		518,370		24,863		432,872		457,735
Land development		58,731		110,080		168,811		78,254		110,111		188,365

Total real estate – commercial mortgage		215,370		1,106,037		1,321,407		174,572		1,065,271		1,239,843
Installment loans to individuals		208		62,057		62,265		106		64,119		64,225

Total loans, net of unearned income	$	359,813	$	2,204,955	$	2,564,768	$	333,681	$	2,190,909	$	2,524,590

During the first nine months of 2011, loans in our Alabama markets increased $25,969, while loans in our Mississippi and Tennessee markets decreased $1,452 and $40,242, respectively, from December 31, 2010. Loans in our Georgia markets increased $55,903 at September 30, 2011 since December 31, 2010 due primarily to the American Trust acquisition.

Mortgage loans held for sale were $24,739 at September 30, 2011 compared to $27,704 at December 31, 2010. Originations of mortgage loans to be sold totaled $293,974 for the first nine months of 2011 as compared to $366,241 for the same period in 2010. Gains and losses are realized at the time consideration is received and all other criteria for sales treatment have been met. These loans are typically sold within thirty 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 mortgage loans in the secondary market.

Deposits

The Company relies on deposits as its major source of funds. Total deposits were $3,342,355 at September 30, 2011 compared to $3,468,151 at December 31, 2010. Noninterest-bearing deposits were $493,130 at September 30, 2011 compared to $368,798 at December 31, 2010, while interest-bearing deposits were $2,849,225 at September 30, 2011 compared to $3,099,353 at December 31, 2010. The acquisition of American Trust increased noninterest-bearing and interest-bearing deposits by $9,766 and $11,793, respectively, at September 30, 2011 compared to December 31, 2010. Deposits in our Alabama, Tennessee and Mississippi markets decreased $41,422, $49,856 and $90,742, respectively, during the first nine months of 2011. Deposits in our Georgia markets increased $56,224 at September 30, 2011 since December 31, 2010 due to the American Trust acquisition.

Borrowed Funds

Total borrowings, which include federal funds purchased, treasury, tax and loan notes, securities sold under agreements to repurchase, advances from the Federal Home Loan Bank (“FHLB”), debt guaranteed by the FDIC under its Temporary Liquidity Guarantee Program and junior subordinated debentures, were $262,569 at September 30, 2011 compared to $316,436 at December 31, 2010. FHLB advances were $119,370 at September 30, 2011 compared to $175,119 at December 31, 2010. The Company assumed $15,020 in long-term FHLB advances in connection with the American Trust acquisition, all of which were repaid during the first quarter of 2011. The Company repaid $50,000 of long-term FHLB borrowings during the first quarter of 2011 and incurred prepayment penalties of $1,903.

Results of Operations

Three Months Ended September 30, 2011 as Compared to the Three Months Ended September 30, 2010

Net income for the three month period ended September 30, 2011 was $6,532, which represents a decrease of $13,019, or 66.59%, from net income of $19,551 for the three month period ended September 30, 2010. Basic and diluted earnings per share decreased $0.55 to $0.26 for the three month period ended September 30, 2011 as compared to $0.81 for the prior year. Net income for the three month period ended September 30, 2010 included a one-time gain of $42,211 recorded in connection with the acquisition of Crescent.

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. The primary concerns in managing net interest income are the mix and the repricing of rate-sensitive assets and liabilities. Net interest income increased 21.19% to $32,864 for the third quarter of 2011 compared to $27,117 for the same period in 2010. Net interest margin, the tax equivalent net yield on earning assets, increased to 3.92% for the third quarter of 2011 from 3.12% for the same period in 2010. Net interest margin and net interest income are influenced by several factors, primarily changes in interest rates, competition and the shape of the interest rate yield curve.

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 for the periods presented:


	Three Months Ended September 30,
	2011							2010
	Average Balance		Interest Income/ Expense		Yield/ Rate			Average Balance		Interest Income/ Expense		Yield/ Rate
Assets
Interest-earning assets:
Loans⁽¹⁾	$	2,577,539	$	35,227		5.42	%	$	2,533,567	$	36,354		5.66	%
Securities:
Taxable⁽²⁾		581,390		4,842		3.30			559,817		5,506		3.93
Tax-exempt		215,567		3,299		6.07			169,972		2,642		6.20
Interest-bearing balances with banks		103,558		64		0.24			336,677		268		0.32

Total interest-earning assets		3,478,054		43,432		4.96			3,600,033		44,770		4.92

Cash and due from banks		66,011							51,121
Intangible assets		191,574							192,447
FDIC loss-share indemnification asset		146,151							116,619
Other assets		261,061							286,346

Total assets	$	4,142,851						$	4,246,566


Liabilities and shareholders’ equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand⁽³⁾	$	1,285,793	$	1,594		0.49		$	1,142,796	$	3,123		1.08
Savings deposits		211,421		180		0.34			164,451		320		0.77
Time deposits		1,383,034		4,973		1.43			1,622,491		9,042		2.21

Total interest-bearing deposits		2,880,248		6,747		0.93			2,929,738		12,485		1.69
Borrowed funds		259,387		2,319		3.55			438,047		3,831		3.53

Total interest-bearing liabilities		3,139,635		9,066		1.15			3,367,785		16,316		1.93

Noninterest-bearing deposits		480,699							351,449
Other liabilities		39,396							61,223
Shareholders’ equity		483,121							466,109

Total liabilities and shareholders’ equity	$	4,142,851						$	4,246,566

Net interest income/net interest margin			$	34,366		3.92	%			$	28,454		3.12	%

⁽¹⁾	Includes mortgage loans held for sale and shown net of unearned income.

⁽²⁾	U.S. Government and some U.S. Government Agency securities are tax-exempt in the states in which we operate.

⁽³⁾	Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.

The average balances of nonaccruing loans and securities are included in the table 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 35% and a state tax rate of 3.3%, which is net of federal tax benefit.

Interest income, on a tax equivalent basis, was $43,432 for the third quarter of 2011 compared to $44,770 for the same period in 2010. The decrease in interest income was driven primarily by a decrease in the average balance of interest-earning assets offset by a slight increase in the yield on interest-earning assets. The tax equivalent yield on interest-earning assets increased 4 basis points in the third quarter of 2011 compared to the third quarter of 2010. The change in the mix of interest-earning assets from lower yielding interest-bearing cash balances to higher yielding loans further contributed to the increase in tax equivalent yield.

The following table presents the percentage of total average earning assets, by type and yield, for the three months ended September 30 for each of the years presented:


	Percentage of Total						Yield
	2011			2010			2011			2010
Loans		74.11	%		70.43	%		5.42	%		5.66	%
Securities		22.91			20.23			4.05			4.46
Other		2.98			9.34			0.24			0.32

Total earning assets		100.00	%		100.00	%		4.96	%		4.92	%

Interest expense was $9,066 for the third quarter of 2011, a decrease of $7,250, or 44.44%, as compared to the same period in 2010. The decrease in interest expense was due to the decrease in the cost of interest-bearing liabilities as a result of the declining interest rate environment and a change in the mix of our interest-bearing liabilities in which we utilized lower cost deposits to replace higher costing liabilities. The cost of interest-bearing liabilities was 1.15% for the third quarter of 2011 as compared to 1.93% for the same period in 2010.

The following table presents the Company’s funding sources by type and cost for the three months ended September 30 for each of the years presented:


	Percentage of Total						Cost of Funds
	2011			2010			2011			2010
Noninterest-bearing demand		13.28	%		9.45	%		—	%		—	%
Interest-bearing demand		35.52			30.73			0.49			1.08
Savings		5.84			4.42			0.34			0.77
Time deposits		38.20			43.62			1.43			2.21
Federal Home Loan Bank advances		3.31			7.91			4.02			3.69
Other borrowed funds		3.85			3.87			3.13			3.20

Total deposits and borrowed funds		100.00	%		100.00	%		0.99	%		1.75	%

Noninterest Income

Noninterest income was $19,613 for the three months ended September 30, 2011, a decrease of $34,921 as compared to 2010. The gain in 2010 on the acquisition of Crescent is the primary factor in the decrease in noninterest income for the third quarter of 2011 compared to the same period in 2010.

Charges for deposit services, the primary contributor to noninterest income, were $4,797 and $5,771 for the third quarter of 2011 and 2010, respectively. Overdraft fees, the largest component of service charges on deposits, were $4,229 for the three month period ended September 30, 2011 compared to $5,196 for the same period in 2010.

Fees and commissions (which includes fees charged for both deposit services and loan services) increased 34.04% to $4,898 during the third quarter of 2011 as compared to $3,654 for the third quarter of 2010. Fees charged on loans include origination, underwriting, documentation and other administrative fees. Loan fees were $2,190 during the third quarter of 2011 as compared to $1,587 for the third quarter of 2010. With respect to fees related to deposit services, interchange fees on debit card transactions continue to be a strong source of noninterest income. For the third quarter of 2011, fees associated with debit card usage were $1,824, an increase of 46.62% as compared to $1,244 for the same period of 2010. The Durbin Debit Interchange Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act, which went into effect October 1, 2011, places restrictions on the rates charged for interchange fees on debit card transactions. Management believes these restrictions could have an adverse impact on these interchange fees, but is unable at this time to predict the extent or timing of such impact. The Company also provides specialized products and services to our customers through our Financial Services division. Specialized products include fixed and variable annuities, mutual funds, and stocks offered through a third party provider. Revenues generated from the sale of all of these products, which are included in the Consolidated Statements of Income in the account line “Fees and commissions,” were $374 for the third quarter of 2011 compared to $334 for the same period of 2010.

The trust department operates on a custodial basis which includes administration of benefit plans, as well as accounting and money management for trust accounts. The trust department manages a number of trust accounts

inclusive of personal and corporate benefit accounts, self-directed IRA’s, 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. Trust revenue was $771 for the third quarter of 2011 compared to $562 for the same period in 2010. The market value of trust assets under management was $1,014,099 and $445,447 at September 30, 2011 and 2010, respectively. The increases in trust revenue and the market value of trust assets under management during the third quarter of 2011 are primarily attributable to the acquisition of the Birmingham, Alabama-based trust department of RBC Bank (USA).

Gains on sales of securities for the three months ended September 30, 2011 were $5,041, resulting from the sale of approximately $81,006 in mortgage-backed securities, compared to gains on sales of securities for the three months ended September 30, 2010 of $1,906, resulting from the sale of approximately $36,274 in securities. The Company did not record any other-than-temporary-impairment losses on securities for the three months ended September 30, 2011. For the three months ended September 30, 2010, the Company recognized net other-than-temporary-impairment losses of $2,915 related to investments in pooled trust preferred securities.

Gains on the sale of mortgage loans held for sale for the third quarter of 2011 were $1,371, a decrease of 22.72% from the third quarter of 2010. The decrease in gains on the sale of mortgage loans is attributable to higher volumes of loans sold during 2010 compared to 2011. Originations of mortgage loans to be sold totaled $108,322 for the third quarter of 2011 as compared to $151,856 for the same period in 2010.

Noninterest Expense


Noninterest Expense to Average Assets
2011		2010
3.65%		3.70%

Noninterest expense was $38,129 and $39,571 for the third quarter of 2011 and 2010, respectively, a decrease of $1,442, or 3.64%.

On July 1, the Company announced its entrance into the Montgomery, Alabama banking market. On July 26, the Company announced its entrance into the Golden Triangle market of Starkville, Mississippi, which is home to Mississippi State University. On August 23, the Company announced its entrance into the Alabama market of Tuscaloosa, home of the University of Alabama. Expenses related to the operations of these locations, as well as those attributable to the acquisition of the Birmingham, Alabama-based trust department of RBC Bank (USA), totaled $424 for the third quarter of 2011 and are reflected in the discussion below.

Salaries and employee benefits increased $799, or 4.79%, to $17,493 during the third quarter of 2011 as compared to $16,694 for the third quarter of 2010. The operations of American Trust increased salaries and employee benefits $346 during the third quarter of 2011.

Data processing costs increased $224 to $1,927 for the third quarter of 2011 as compared to the third quarter of 2010. The increase in data processing costs is reflective of increased loan and deposit processing from growth in the number of loans and deposits resulting from the Crescent and American Trust conversions, which occurred in the first and second quarters of 2011, respectively.

Net occupancy and equipment expense for the third quarter of 2011 was $3,434, up $163 from the third quarter of 2010. This increase is attributable to occupancy costs associated with the operations of the Company’s recent banking expansions over the past twelve months partially offset by lower depreciation expense.

Expenses related to other real estate owned for the third quarter of 2011 were $6,336, an increase of $1,701 compared to the same period in 2010. Expenses on other real estate owned include write downs of the carrying value to fair value on certain pieces of property held in other real estate owned of $5,200 and $3,318 for the three months ended September 30, 2011 and 2010, respectively. Other real estate owned with a cost basis of $9,525 was sold during the three months ended September 30, 2011, resulting in a net loss of $578.

Professional fees include fees for legal and accounting services as well as fees we pay our directors. Professional fees were $1,004 and $913 for the third quarter of 2011 and 2010, respectively. The higher levels of professional fees are attributable to legal fees associated with loan workouts and foreclosure proceedings.

Advertising and public relations expense was $1,305 for the third quarter of 2011 compared to $1,159 for the third quarter of 2010. This increase is attributable to advertising and marketing costs associated with our expansion into new markets.

Amortization of intangible assets decreased $154 to $351 for the third quarter of 2011 compared to $505 for the third quarter of 2010. 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 one to fifteen years.

Communication expenses are those expenses incurred for communication to clients and between employees. Communication expenses were $1,185 for the third quarter of 2011 as compared to $1,218 for the third quarter of 2010.

Other noninterest expense was $4,768 and $4,733 for the third quarter of 2011 and 2010, respectively.


Efficiency Ratio
2011		2010
70.64%		47.68%

The efficiency ratio, shown above for the third quarter for each year, is one measure of productivity in the banking industry. This ratio is calculated to measure the cost of generating one dollar of revenue. That is, the ratio is designed to reflect the percentage of one dollar which must be expended to generate that dollar of revenue. The Company calculates this ratio by dividing noninterest expense by the sum of net interest income on a fully taxable equivalent basis and noninterest income. The efficiency ratio for the third quarter of 2010 includes the $42,211 gain associated with the Crescent acquisition. We remain committed to aggressively managing our costs within the framework of our business model.

Income Taxes

Income tax expense for the third quarter of 2011 was $2,316 as compared to $11,029 for the third quarter of 2010. The effective tax rates for those periods were 26.18% and 36.06%, respectively. The higher effective tax rate for the third quarter of 2010 as compared to the same period in 2011 was attributable to higher levels of taxable income as a result of the Crescent acquisition.

Nine Months Ended September 30, 2011 as Compared to the Nine Months Ended September 30, 2010

Net income for the nine month period ended September 30, 2011 was $19,842, a decrease of $7,112, or 26.39%, from net income of $26,954 for the same period in 2010. Basic and diluted earnings per share were $0.79 for the nine month period ended September 30, 2011, as compared to basic earnings per share of $1.22 and diluted earnings per share of $1.21 for the comparable period in 2010.


	Nine Months Ended September 30,
	2011							2010
	Average Balance		Interest Income/ Expense		Yield/ Rate			Average Balance		Interest Income/ Expense		Yield/ Rate
Assets
Interest-earning assets:
Loans⁽¹⁾	$	2,574,516	$	107,635		5.59	%	$	2,400,482	$	100,926		5.65	%
Securities:
Taxable⁽²⁾		629,704		16,001		3.39			567,198		16,792		3.95
Tax-exempt		217,406		10,025		6.15			153,716		7,178		6.24
Interest-bearing balances with banks		195,296		433		0.30			189,771		364		0.26

Total interest-earning assets		3,616,922		134,094		4.95			3,311,167		125,260		5.08

Cash and due from banks		70,567							52,558
Intangible assets		191,542							192,391
FDIC loss-share indemnification asset		152,473							39,300
Other assets		252,959							234,739

Total assets	$	4,284,463						$	3,830,155

Liabilities and shareholders’ equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand⁽³⁾	$	1,357,968	$	7,668		0.75		$	1,037,839	$	8,985		1.16
Savings		210,004		620		0.39			140,685		757		0.72
Time deposits		1,464,901		17,317		1.58			1,373,543		23,522		2.32

Total interest-bearing deposits		3,032,873		25,605		1.13			2,552,064		33,264		1.76
Borrowed funds		270,103		7,321		3.62			478,620		13,051		3.64

Total interest-bearing liabilities		3,302,976		32,926		1.33			3,030,684		46,315		2.06
Noninterest-bearing deposits		475,009							325,890
Other liabilities		29,770							46,481
Shareholders’ equity		476,708							427,100

Total liabilities and shareholders’ equity	$	4,284,463						$	3,830,155


Net interest income/net interest margin			$	101,168		3.74	%			$	78,945		3.20	%

⁽¹⁾	Includes mortgage loans held for sale and shown net of unearned income.

⁽²⁾	U.S. Government and some U.S. Government Agency securities are tax-free in the states in which we operate.

⁽³⁾	Interest-bearing demand deposits include interest-bearing transactional accounts and money market deposits.

The average balances of nonaccruing loans and securities are included in this table. 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 35% and a state tax rate of 3.3%, which is net of federal tax benefit.

Net Interest Income

Net interest income increased 28.42% to $96,582 for the first nine months of 2011 compared to $75,207 for the same period in 2010. On a tax equivalent basis, net interest margin for the nine month period ending September 30, 2011 was 3.74% compared to 3.20% for the same period in 2010.

Interest income, on a tax equivalent basis, increased 7.05% to $134,094 for the first nine months of 2011 from $125,260 for the same period in 2010. The increase in interest income was driven primarily by an increase in the average balance of interest-earning assets from the FDIC-assisted acquisitions offset by a decline in the yield on interest-earning assets. The average balance of interest-earning assets increased $305,755 for the nine months ended September 30, 2011 as compared to the same period in 2010. The tax equivalent yield on earning assets decreased 13 basis points to 4.95% for the first nine months of 2011 compared to 5.08% for the same period in 2010. The tax equivalent yield on the investment portfolio was 4.10% for the first nine months of 2011, down 34 basis points from 4.44% in the corresponding period in 2010. The decline in yield on the investment portfolio was a result of the call or maturity of securities within the Company’s portfolio that had higher rates than the rates on the securities that the Company purchased with the proceeds. These rates were lower due to a generally lower interest rate environment.

The following table presents the percentage of total average earning assets, by type and yield, for the nine months ended September 30 for each of the years presented:


	Percentage of Total						Yield
	2011			2010			2011			2010
Loans		71.18	%		72.50	%		5.59	%		5.65	%
Securities		23.42			21.77			4.10			4.44
Other		5.40			5.73			0.30			0.26

Total earning assets		100.00	%		100.00	%		4.95	%		5.08	%

Interest expense decreased 28.91% to $32,926 for the nine months ended September 30, 2011 as compared to $46,315 for the same period in 2010. This decrease primarily resulted from reductions in the cost of deposits and in the volume of borrowed funds. The average balance of interest-bearing deposits, which had an average cost of 1.13%, increased $480,809 to $3,032,873 for the nine months ended September 30, 2011 as compared to $2,552,064, with an average cost of 1.76%, for the same period in 2010. The increase in the average balance of interest-bearing deposits is primarily attributable to the FDIC-assisted acquisitions. The average balance of borrowed funds decreased $208,517 for the nine months ended September 30, 2011 as compared to the same period in 2010. Overall, the cost of interest-bearing liabilities decreased 73 basis points to 1.33% for the first nine months of 2011 compared to 2.06% for the same period in 2010.

The following table presents the Company’s funding sources by type and cost for the nine months ended September 30 for each of the years presented:


	Percentage of Total						Cost of Funds
	2011			2010			2011			2010
Noninterest-bearing demand		12.57	%		9.71	%		—	%		—	%
Interest-bearing demand		35.94			30.92			0.75			1.16
Savings		5.56			4.19			0.39			0.72
Time deposits		38.78			40.92			1.58			2.32
Federal Home Loan Bank advances		3.46			9.93			4.09			3.66
Other borrowed funds		3.69			4.33			3.17			3.60

Total deposits and borrowed funds		100.00	%		100.00	%		1.16	%		1.86	%

Noninterest Income

Noninterest income was $54,712 for the nine month period ended September 30, 2011 compared to $81,362 for the same period in 2010, a decrease of $26,650, or 32.75%. The acquisition of American Trust resulted in a bargain purchase gain of $8,774 which is reflected in the noninterest income for nine months ended September 30, 2011, while the acquisition of Crescent resulted in a bargain purchase gain of $42,211 which is reflected in the noninterest income for the nine months ended September 30, 2010.

Service charges on deposits were $14,759 and $16,222 for the first nine months of 2011 and 2010, respectively. Overdraft fees were $13,068 for the nine month period ended September 30, 2011 compared to $14,581 for the same period in 2010.

Fees and commissions were $13,584 for the nine month period ended September 30, 2011 compared to $10,784 for the same period in 2010. Fees charged for loan services were $5,530 for the first nine months of 2011 compared to $4,261 for the same period in 2010. For the first nine months of 2011, fees associated with debit card usage were $5,375, up 23.98% from $4,335 for the same period in 2010. Revenues generated from the sale of all specialized products by the Financial Services division totaled $1,308 for the first nine months of 2011 compared to $957 for the same period of 2010. Revenue generated by the trust department for managing accounts was $2,034 for the first nine months of 2011 as compared to $1,778 for the same period in 2010.

Income earned on insurance products was $2,462 and $2,492 for the nine months ended September 30, 2011 and 2010, respectively. Contingency income is a bonus received from the insurance underwriters and is based both on commission income and claims experience on our client’s policies during the previous year. Increases and decreases in contingency income are reflective of corresponding increases and decreases in the amount of claims paid by insurance carriers. Contingency income, which is included in “Other noninterest income” in the Consolidated Statements of Income, was $345 and $264 for the nine months ended September 30, 2011 and 2010, respectively.

Gains on sales of securities available for sale for the nine months ended September 30, 2011 were $5,057, resulting from the sale of approximately $94,023 in securities, compared to gains on sales of securities available for sale for the nine months ended September 30, 2010 of $3,955, resulting from the sale of approximately $125,969 in securities. The Company recognized other-than-temporary-impairment losses of $262 and $3,075 related to investments in pooled trust preferred securities for the nine months ended September 30, 2011 and 2010, respectively.

Gains from sales of mortgage loans held for sale were $3,471 for the nine months ended September 30, 2011 compared to $4,097 for the same period in 2010.

Noninterest Expense

Noninterest expense was $107,407 for the nine month period ended September 30, 2011 compared to $91,393 for the same period in 2010, an increase of $16,014, or 17.52%. The additional expense from the operations of the FDIC-assisted acquisitions is the primary reason for the increase in total noninterest expenses, and the components thereof, during the first nine months of 2011 compared to the same period in 2010.

Salaries and employee benefits for the nine month period ended September 30, 2011 were $49,903 compared to $42,943 for the same period in 2010.

Data processing costs for the nine month period ended September 30, 2011 were $5,372, an increase of $663 compared to $4,709 for the same period in 2010. Data processing costs for the nine months ended September 30, 2011 include expenses associated with increased loans and deposits processing associated with the Crescent and American Trust acquisitions.

Net occupancy and equipment expense for the nine month period ended September 30, 2011 increased $902 to $10,030 over the comparable period for the prior year.

Expenses related to other real estate owned for the first nine months of 2011 were $11,969 compared to $6,330 for the same period in 2010. Expenses on other real estate owned include write downs of the carrying value to fair value on certain pieces of property held in other real estate owned of $6,824 and $3,318 for the nine months ended September 30, 2011 and 2010, respectively. Other real estate owned with a cost basis of $34,759 was sold during the nine months ended September 30, 2011, resulting in a net loss of $2,414. In comparison, other real estate owned with a cost basis of $19,216 was sold during the nine months ended September 30, 2010, resulting in a net loss of $746.

Advertising and public relations expense was $3,737 for the nine months ended September 30, 2011 compared to $3,027 for the same period in 2010.

Amortization of intangible assets was $1,376 for the nine months ended September 30, 2011 compared to $1,451 for the nine months ended September 30, 2010.

Communication expense was $4,024 for the nine months ended September 30, 2011 compared to $3,351 for the same period in 2010.

Total noninterest expenses for the first nine months of 2011 included $1,651 of acquisition-related expenses associated with the American Trust and RBC Bank (USA) trust division acquisitions and a prepayment penalty totaling $1,903 associated with the payoff of $50,000 of FHLB advances. In comparison, total noninterest expenses for the first nine months of 2010 included $1,955 of acquisition-related expenses associated with the Crescent acquisition and a prepayment penalty totaling $2,785 associated with the payoff of $148,000 of FHLB advances.

Noninterest expense as a percentage of average assets was 3.35% for the nine month period ended September 30, 2011 and 3.19% for the comparable period in 2010. The net overhead ratio was 1.79% and 0.38% for the first nine months of 2011 and 2010, respectively. Our efficiency ratio increased to 68.90% for the nine month period ended September 30, 2011 compared to 57.01% for the same period of 2010. The Company’s lower net overhead ratio and efficiency ratio primarily resulted from increases in noninterest income resulting from the $42,211 gain associated with the Crescent acquisition.

Income Taxes

Income tax expense was $7,695 for the nine month period ended September 30, 2011 compared to $13,057 for the same period in 2010. The effective tax rates for the nine month periods ended September 30, 2011 and 2010 were 27.94% and 32.63%, respectively. The higher effective tax rate for the nine months ended September 30, 2010 as compared to the same period in 2011 was attributable to higher levels of taxable income as a result of the Crescent acquisition.

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 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 Loan Losses

The allowance for loan losses is available to absorb probable credit losses inherent in the entire loan portfolio. The appropriate level of the allowance is based on a quarterly analysis of the loan portfolio and represents an amount that management deems adequate to provide for inherent losses, including collective impairment as recognized under Accounting Standards Codification Topic (“ASC”) 450, “Contingencies.” Other considerations in establishing the allowance include the risk rating of individual credits, the size and diversity of the portfolio, economic conditions reflected within industry segments, the unemployment rate in our markets, loan segmentation, historical losses that are inherent in the loan portfolio and the results of periodic credit reviews by internal loan review and regulators.

The provision for loan losses charged to operating expense is an amount which, in the judgment of management, is necessary to maintain the allowance for loan losses at a level that is believed to be adequate to meet the inherent risks of losses in our loan portfolio. Factors considered by management in determining the amount of provision for loan losses to charge to current operations include the internal risk rating of individual credits, historical and current trends in net charge-offs, trends in nonperforming loans, trends in past due loans, trends in the market values of underlying collateral securing loans and the current economic conditions in the market in which we operate.

Loans acquired in the Crescent and American Trust acquisitions were recorded, as of their respective acquisition dates, at fair value. The fair value of these loans represents the expected discounted cash flows to be received over the lives of the loans, taking into account the Company’s estimate of future credit losses on the loans. Because the fair value measurement incorporates an estimate of losses on acquired loans, these loans were excluded from the calculation of the allowance for loan losses and no provision for loan losses was recorded for these loans during the nine months ended September 30, 2011 or for the period from the acquisition date of these loans to December 31, 2010. The Company will continue to monitor future cash flows on these loans; to the extent future cash flows deteriorate below initial projections, the Company may be required to reserve for these loans in the allowance for loan losses through future provision for loan losses.

The table below reflects the activity in the allowance for loan losses, in thousands, for the periods presented:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Balance at beginning of period	$	47,571		$	41,146		$	45,415		$	39,145
Provision for loan losses		5,500			11,500			16,350			25,165
Charge-offs
Commercial, financial, agricultural		210			567			1,494			810
Lease financing		—			—			—			—
Real estate – construction		—			388			798			3,806
Real estate – 1-4 family mortgage		3,281			5,727			9,896			11,182
Real estate – commercial mortgage		1,372			1,243			2,746			4,044
Installment loans to individuals		105			45			194			239

Total charge-offs		4,968			7,970			15,128			20,081
Recoveries
Commercial, financial, agricultural		61			101			239			140
Lease financing		—			—			—			—
Real estate – construction		18			—			49			37
Real estate – 1-4 family mortgage		245			295			582			609
Real estate – commercial mortgage		17			39			886			50
Installment loans to individuals		88			21			139			67

Total recoveries		429			456			1,895			903

Net charge-offs		4,539			7,514			13,233			19,178

Balance at end of period	$	48,532		$	45,132		$	48,532		$	45,132

Net charge-offs to average loans (annualized)		0.70	%		1.18	%		0.69	%		1.07	%
Allowance for loan losses to:
Loans								2.20	%		2.02	%
Nonperforming loans								98.97	%		68.80	%

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


	Three Months Ended September 30,					Nine Months Ended September 30,
	2011			2010		2011			2010
Real estate – construction:
Residential	$	(22	)	$	388	$	749		$	1,034
Commercial		4			—		—			—
Condominiums		—			—		—			2,735

Total real estate – construction		(18	)		388		749			3,769
Real estate – 1-4 family mortgage:
Primary		237			734		1,091			2,367
Home equity		681			581		1,588			1,320
Rental/investment		1,096			441		2,393			1,205
Land development		1,022			3,676		4,242			5,681

Total real estate – 1-4 family mortgage		3,036			5,432		9,314			10,573
Real estate – commercial mortgage:
Owner-occupied		663			566		1,270			1,817
Non-owner occupied		436			118		(282	)		1,607
Land development		256			520		872			570

Total real estate – commercial mortgage		1,355			1,204		1,860			3,994

Total net-charge-offs of loans secured by real estate	$	4,373		$	7,024	$	11,923		$	18,336

The following table quantifies the amount of the specific reserves component of the allowance for loan losses and the amount of the allowance determined by applying allowance factors to graded loans as of the dates presented:


	September 30, 2011		December 31, 2010
Specific reserves for impaired loans	$	19,717	$	17,529
Allocated reserves for remaining portfolio		28,815		27,886

Total	$	48,532	$	45,415

Nonperforming loans are those on which the accrual of interest has stopped or loans which are contractually past due 90 days 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.

Nonaccruing securities available-for-sale consists of the Company’s investments in pooled trust preferred securities, each of which are on nonaccrual status.

The following table provides a detail of the Company’s nonperforming assets covered by loss-share agreements (“covered assets”) and not covered under loss-share agreements as of the dates presented:


	Covered Assets		Not Covered Assets		Total Assets
September 30, 2011
Nonaccruing loans	$	84,426	$	40,363	$	124,789
Accruing loans past due 90 days or more		12,222		8,674		20,896

Total nonperforming loans		96,648		49,037		145,685
Other real estate owned		44,021		72,765		116,786

Total nonperforming loans and OREO		140,669		121,802		262,471
Nonaccruing securities available-for-sale, at fair value		—		9,986		9,986

Total nonperforming assets	$	140,669	$	131,788	$	272,457


Nonperforming loans to total loans						5.68	%
Nonperforming assets to total assets						6.59	%
Allowance for loan losses to total loans						1.89	%

December 31, 2010
Nonaccruing loans	$	82,393	$	46,662	$	129,055
Accruing loans past due 90 days or more		—		7,196		7,196

Total nonperforming loans		82,393		53,858		136,251
Other real estate owned		54,715		71,833		126,548

Total nonperforming assets	$	137,108	$	125,691	$	262,799


Nonperforming loans to total loans						5.40	%
Nonperforming assets to total assets						6.12	%
Allowance for loan losses to total loans						1.80	%

Due to the significant difference in the accounting for the loans and other real estate owned covered by loss-share agreements and loss mitigation offered under the loss-share agreements with the FDIC, the Company believes that excluding the covered assets from its asset quality measures provides a more meaningful presentation of the Company’s asset quality. Purchased impaired loans had evidence of deterioration in credit quality prior to acquisition, and thus the fair value of these loans as of the acquisition date included an estimate of credit losses. These loans, as well as acquired loans with no evidence of credit deterioration at acquisition, are accounted for on a pool basis, and these pools are considered to be performing. Purchased impaired loans were not classified as nonperforming assets at September 30, 2011 or December 31, 2010 as the loans are considered to be performing under ASC 310-30, “Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality” (“ASC 310-30”). As a result, interest income, through the accretion of the difference between the carrying value of the loans and the expected cash flows, is being recognized on all purchased loans accounted for under ASC 310-30.

The asset quality measures surrounding the Company’s nonperforming loans and nonperforming assets discussed in the remainder of this section exclude covered assets relating to the Crescent and American Trust acquisitions.

The following table shows the principal amounts of nonperforming and restructured loans as of the dates presented. All loans where information exists about possible credit problems that would cause us to have serious doubts about the borrower’s ability to comply with the current repayment terms of the loan have been reflected in the table below.


	September 30,						December 31,
	2011			2010			2010
Nonaccruing loans	$	40,363		$	56,674		$	46,662
Accruing loans past due 90 days or more		8,674			8,923			7,196

Total nonperforming loans		49,037			65,597			53,858
Restructured loans		35,774			34,012			32,615

Total nonperforming and restructured loans	$	84,811		$	99,609		$	86,473

Nonperforming loans to total loans – period end		2.22	%		2.94	%		2.46	%

The following table provides details of the Company’s nonperforming loans by loan category as of the dates presented:


	September 30,				December 31,
	2011		2010		2010
Commercial, financial, agricultural	$	2,338	$	2,738	$	2,422
Lease financing		—		—		—
Real estate – construction:
Residential		383		1,557		333
Commercial		—		—		—
Condominiums		—		—		—

Total real estate – construction		383		1,557		333
Real estate – 1-4 family mortgage:
Primary		6,123		6,364		6,514
Home equity		848		663		829
Rental/investment		9,180		11,374		10,942
Land development		8,327		19,382		17,608

Total real estate – 1-4 family mortgage		24,478		37,783		35,893
Real estate – commercial mortgage:
Owner-occupied		4,181		12,413		6,336
Non-owner occupied		11,827		2,862		4,300
Land development		4,818		7,930		3,903

Total real estate – commercial mortgage		20,826		23,205		14,539
Installment loans to individuals		1,012		314		671

Total	$	49,037	$	65,597	$	53,858

Management has evaluated the aforementioned loans and other loans classified as nonperforming and believes that all nonperforming loans have been adequately reserved for in the allowance for loan losses at September 30, 2011. Management also continually monitors past due loans for potential credit quality deterioration. Total loans past due 30-89 days were $16,588 at September 30, 2011 as compared to $21,520 at December 31, 2010 and $23,576 at September 30, 2010.

As shown above, restructured loans totaled $35,774 at September 30, 2011 as compared to $32,615 at December 31, 2010 and $34,012 at September 30, 2010. At September 30, 2011, total loans restructured that included an interest rate concession represented 69.97% of total restructured loans, while loans restructured by a concession in payment or terms represented the remainder. The following table provides details of the Company’s restructured loans by loan category as of the dates presented:


	September 30,				December 31,
	2011		2010		2010
Commercial, financial, agricultural	$	124	$	717	$	125
Real estate – construction:
Residential		—		—		—
Commercial		—		—		—
Condominiums		—		—		—

Total real estate – construction		—		—		—
Real estate – 1-4 family mortgage:
Primary		3,766		3,609		4,313
Home equity		—		—		—
Rental/investment		2,398		2,338		1,969
Land development		11,116		16,137		14,834

Total real estate – 1-4 family mortgage		17,280		22,084		21,116
Real estate – commercial mortgage:
Owner-occupied		11,231		4,048		3,844
Non-owner occupied		6,361		5,142		5,510
Land development		598		1,839		1,839

Total real estate – commercial mortgage		18,190		11,029		11,193
Installment loans to individuals		180		182		181

Total restructured loans	$	35,774	$	34,012	$	32,615


Changes in the Company’s restructured loans were as follows:

Balance at January 1, 2011					$	32,615
Additional loans with concessions						17,177
Reductions due to:
Reclassified as nonperforming						(9,524	)
Transfer to other real estate owned						(2,574	)
Charge-offs						—
Paydowns						(1,288	)
Lapse of concession period						(632	)

Balance at September 30, 2011					$	35,774

Other real estate owned and repossessions consist 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 loan losses. Reductions in the carrying value subsequent to acquisition are charged to earnings and are included under the line item “Other real estate owned” in the Consolidated Statements of Income. Other real estate owned with a cost basis of $21,863 was sold during the nine months ended September 30, 2011, resulting in a net loss of $2,114.

The following table provides details of the Company’s other real estate owned and repossessions as of the dates presented:


	September 30, 2011		December 31, 2010
Residential real estate	$	15,650	$	15,445
Commercial real estate		13,628		18,266
Residential land development		37,416		33,172
Commercial land development		5,951		4,501
Other		120		449

Total other real estate owned and repossessions	$	72,765	$	71,833


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

Balance at January 1, 2011			$	71,833
Transfers of loans				28,965
Capitalized improvements				41
Impairments				(6,802	)
Dispositions				(21,863	)
Other				591

Balance at September 30, 2011			$	72,765

Interest Rate Risk

Market risk is the risk of loss from adverse changes in market prices and rates. The majority of assets and liabilities of a financial institution are monetary in nature and therefore differ greatly from most commercial and industrial companies that have significant investments in fixed assets and inventories. Our market risk arises primarily from interest rate risk inherent in lending and deposit-taking activities. Management believes the most significant impact on the Company’s financial results stems from our ability to react to changes in interest rates. To that end, management actively monitors and manages our interest rate risk exposure.

We have an Asset/Liability Committee (“ALCO”) which is authorized by the Board of Directors to monitor our interest rate sensitivity and to make decisions relating to that process. The ALCO’s goal is to structure our asset-liability composition to maximize net interest income while managing interest rate risk so as to minimize the adverse impact of changes in interest rates on net interest income and capital. Profitability is affected by fluctuations 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. We monitor the impact of changes in interest rates on our net interest income and economic value of equity (“EVE”) using rate shock analysis. Net interest income simulations measure the short-term earnings exposure from changes in market rates of interest in a more rigorous and explicit fashion. Our current financial position is combined with assumptions regarding future business to calculate net interest income under varying hypothetical rate scenarios. The 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. A decrease in EVE due to a specified rate change indicates a decline 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 rate shock analysis depicts the estimated impact on net interest income and EVE of immediate changes in interest rates at the specified levels at:


	Percentage Change In:
Change in Interest Rates⁽¹⁾ (In Basis Points)	Net Interest Income⁽²⁾						Economic Value of Equity⁽³⁾
Change in Interest Rates⁽¹⁾ (In Basis Points)	September 30, 2011			December 31, 2010			September 30, 2011			December 31, 2010
+200		2.86	%		(3.25	%)		18.43	%		10.70	%
+100		1.60	%		(3.37	%)		14.20	%		6.63	%
-100		(2.54	%)		(1.12	%)		(3.23	%)		(4.94	%)

⁽¹⁾

On account of the present position of the target federal funds rate, the Company did not perform an analysis assuming a downward movement in rates of 200 bps.

⁽²⁾

The percentage change in this column represents net interest income for 12 months in a stable interest rate environment versus the net interest income in the various rate scenarios.

⁽³⁾

The percentage change in this column represents our EVE in a stable interest rate environment versus the EVE in the various rate scenarios.

The preceding measures assume no change in the size or asset/liability compositions of the balance sheet. Thus, the measures do not reflect actions the ALCO may undertake in response to such changes in interest rates. The above results of the interest rate shock analysis are within the parameters set by the Board of Directors. The scenarios assume instantaneous movements in interest rates in increments of 100 and 200 basis points. With the present position of the target federal funds rate, the declining rate scenarios seem improbable. Furthermore, it has been the Federal Reserve’s policy to adjust the target federal funds rate incrementally over time. 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 regarding characteristics of new business and the behavior of existing positions. These business assumptions are based upon our experience, business plans and published industry experience. Key assumptions employed in the model include asset prepayment speeds, competitive factors, the relative price sensitivity of certain assets and liabilities and the expected life of non-maturity deposits. Because these assumptions are inherently uncertain, actual results will differ from simulated results.

The Company utilizes interest rate contracts, including swaps, caps and/or floors, to mitigate exposure to interest rate risk and to facilitate the needs of its customers. Beginning in the first quarter of 2011, the Company began entering into derivative instruments not designated as hedging instruments to help its commercial customers manage their exposure to interest rate fluctuations. To mitigate the interest rate risk associated with these customer contracts, the Company enters into an offsetting derivative contract position. The Company manages its credit risk, or potential risk of default by its commercial customers, through credit limit approval and monitoring procedures. At September 30, 2011, the Company had notional amounts of $27,248 on interest rate contracts with corporate customers and $32,348 in offsetting interest rate contracts with other financial institutions to mitigate the Company’s rate exposure on its corporate customers’ contracts.

The Company enters into interest rate lock commitments with its customers to mitigate the interest rate risk associated with the commitments to fund fixed-rate residential mortgage loans. Under the interest rate lock commitments, interest rates for a mortgage loan are locked in with the customer for a period of time, typically thirty days. Once an interest rate lock commitment is entered into with a customer, the Company also enters into forward commitments to sell the residential mortgage loan to secondary market investors. As such, the Company does not incur risk if the interest rate lock commitment in the pipeline fails to close.

For more information about the Company’s derivative financial instruments, see Note I, “Derivative Instruments,” in the Notes to Consolidated Financial Statements of the Company in Item 1, “Financial Statements,” in this report.

Liquidity and Capital Resources

Liquidity management is the ability to meet the cash flow requirements of customers who may be either depositors wishing to withdraw funds or borrowers needing assurance that sufficient funds will be available to meet their credit needs.

Core deposits, which are deposits excluding time deposits, are a major source of funds used by the Bank to meet cash flow needs. Maintaining the ability to acquire these funds as needed in a variety of markets is the key to

assuring the Bank’s liquidity. Management continually monitors the liquidity and non-core dependency ratios to ensure compliance with ALCO targets.

Our investment portfolio is another alternative for meeting liquidity needs. These assets generally have readily available markets that offer conversions to cash as needed. Securities within our investment portfolio are also used to secure certain deposit types and short-term borrowings. At September 30, 2011, securities with a carrying value of approximately $333,613 were pledged to secure public fund deposits and as collateral for short-term borrowings as compared to $348,392 at December 31, 2010. Lower levels of public fund deposits at September 30, 2011 as compared to December 31, 2010 resulted in the decrease in the amount of pledged investment securities at September 30, 2011.

Other sources available for meeting liquidity needs include federal funds purchased and advances from the FHLB. Interest is charged at the prevailing market rate on federal funds purchased and FHLB advances. There were no outstanding federal funds purchased at September 30, 2011 or December 31, 2010. Funds obtained from the FHLB are used primarily to match-fund real estate loans and other longer-term fixed rate loans in order to minimize interest rate risk. FHLB advances also may be used to meet day to day liquidity needs, primarily when the cost of such borrowing compares favorably to the rates that we would be required to pay to attract deposits. At September 30, 2011, the balance of our outstanding advances with the FHLB was $119,370. The total amount of the remaining credit available to us from the FHLB at September 30, 2011 was $847,949. We also maintain lines of credit with other commercial banks totaling $85,000. These are unsecured lines of credit maturing at various times within the next twelve months. There were no amounts outstanding under these lines of credit at September 30, 2011 or December 31, 2010.

Our strategy in choosing funds is focused on attempting to mitigate interest rate risk, and thus we utilize funding sources that are commensurate with the interest rate risk associated with the assets. Accordingly, management targets growth of noninterest bearing deposits. While we do not control the types of deposit instruments our clients choose, we do influence those choices with the rates and the deposit specials we offer. For example, we could obtain time deposits based on our aggressiveness in pricing and length of term. We constantly monitor our funds position and evaluate the effect various funding sources have on our financial position.

Cash and cash equivalents were $235,317 at September 30, 2011 compared to $296,413 at September 30, 2010. Cash provided by investing activities for the nine months ended September 30, 2011 was $267,986 compared to $413,714 for the same period of 2010. The net cash proceeds received from the acquisition of American Trust were $148,443 for the nine months ended September 30, 2011, compared to the net cash proceeds received from the acquisition of Crescent of $337,127 for the nine months ended September 30, 2011. Purchases of investment securities were $147,201 for the nine months ended September 30, 2011 compared to $354,955 for the nine months ended September 30, 2010. Proceeds from the sale, maturity or call of securities within our investment portfolio were $277,127 for the nine months ended September 30, 2011 compared to $342,026 for the nine months ended September 30, 2010. The net cash paid for the RBC Bank (USA) trust division acquisition, which was completed on August 31, 2011, was $792.

Cash used in financing activities for the nine months ended September 30, 2011 was $430,078 compared to $328,785 for the same period of 2010. Cash provided from the acquisition of American Trust was partially used to reduce long-term debt by $70,729 for the nine months ended September 30, 2011. Cash provided from the acquisition of Crescent was primarily used to reduce our total borrowings by $318,595. The net proceeds to the Company from the issuance and sale of 3,925,000 common shares in a private placement, which was completed on July 23, 2010, were $51,402.

Restrictions on Cash, Bank Dividends, Loans or Advances

The Company’s liquidity and capital resources, as well as its ability to pay dividends to our 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. Accordingly, the approval of this supervisory authority is required prior to Renasant Bank paying dividends to the Company.

Federal Reserve regulations also limit the amount Renasant Bank may loan to the Company unless such loans are collateralized by specific obligations. At September 30, 2011, the maximum amount available for transfer from

Renasant Bank to the Company in the form of loans was $40,045. There were no loans outstanding from Renasant Bank to the Company at September 30, 2011. These restrictions did not have any impact on the Company’s ability to meet its cash obligations in the first nine months of 2011, nor does management expect such restrictions to materially impact the Company’s ability to meet its currently-anticipated cash obligations.

Off-Balance Sheet Transactions

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. 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 at September 30, 2011 and December 31, 2010 were as follows:


	September 30, 2011		December 31, 2010
Loan commitments	$	366,199	$	325,309
Standby letters of credit		35,349		28,105

The Company closely monitors the amount of remaining future commitments to borrowers in light of prevailing economic conditions and adjusts these commitments as necessary. The Company will continue this process as new commitments are entered into or existing commitments are renewed.

Market risk resulting from interest rate changes on particular off-balance sheet financial instruments may be offset by other on- or off-balance sheet transactions. Interest rate sensitivity is monitored by the Company for determining the net effect of potential changes in interest rates on the market value of both on- and off-balance sheet financial instruments.

Contractual Obligations

There have not been any material changes outside of the ordinary course of business to any of the contractual obligations disclosed in our Annual Report on Form 10-K for the year ended December 31, 2010.

Shareholders’ Equity and Regulatory Matters

Shareholders’ Equity

Total shareholders’ equity of the Company at September 30, 2011 increased to $487,401 compared to $469,509 at December 31, 2010. The change in shareholders’ equity was attributable to earnings retention offset by dividends declared and changes in accumulated other comprehensive income.

On July 8, 2009, the Company filed a shelf registration statement with the Securities and Exchange Commission (“SEC”). The shelf registration statement, which the SEC declared effective on July 13, 2009, allows the Company to raise capital from time to time, up to an aggregate of $150,000, through the sale of common stock, preferred stock, 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 be required to 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 as described in any prospectus supplement and could include the expansion of the Company’s banking, insurance and wealth management operations as well as other business opportunities.

The following table sets forth the Company’s book value per share, tangible book value per share, capital ratio and tangible capital ratio as of the dates presented:


	September 30, 2011			December 31, 2010
Book value per share	$	19.45		$	18.75
Tangible book value per share		11.76			11.09
Capital ratio		11.78	%		10.93	%
Tangible capital ratio		7.47	%		6.76	%

Regulatory Matters

Renasant Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require Renasant Bank to maintain minimum balances and ratios. All banks are required to have core capital (Tier I) of at least 4% of risk-weighted assets, Tier I leverage of 4% of average assets, and total capital of 8% of risk-weighted assets (as such ratios are defined in Federal regulations). To be categorized as well capitalized, banks must maintain minimum Tier I leverage, Tier I risk-based and total risk-based ratios of 5%, 6%, and 10%, respectively. At September 30, 2011, Renasant Bank met all capital adequacy requirements to which it is subject.

At September 30, 2011, the most recent notification from the FDIC categorized Renasant Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Bank’s category.

The following table includes the capital ratios and capital amounts for the Company and the Bank at September 30, 2011:


	Actual					Minimum Capital Requirement to be Well Capitalized					Minimum Capital Requirement to be Adequately Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
Tier I Capital to Average Assets
Renasant Corporation	$	374,393		9.48	%	$	197,505		5.00	%	$	158,004		4.00	%
Renasant Bank		366,009		9.29	%		197,091		5.00	%		157,673		4.00	%

Tier I Capital to Risk-Weighted Assets
Renasant Corporation	$	374,393		13.64	%	$	164,751		6.00	%	$	109,834		4.00	%
Renasant Bank		366,009		13.35	%		164,473		6.00	%		109,649		4.00	%

Total Capital to Risk-Weighted Assets
Renasant Corporation	$	408,892		14.89	%	$	274,585		10.00	%	$	219,668		8.00	%
Renasant Bank		400,450		14.61	%		274,121		10.00	%		219,297		8.00	%

Item 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our market risk since December 31, 2010. For additional information regarding our market risk, see our Annual Report on Form 10-K for the year ended December 31, 2010.

Item 4.

CONTROLS AND PROCEDURES

Based on their evaluation as of the end of the period covered by this quarterly report on Form 10-Q, our Chief Executive Officer and Chief 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. There were no changes in the Company’s internal control over financial reporting during the fiscal quarter covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II.

OTHER INFORMATION

Item 1A.

RISK FACTORS

Information regarding risk factors appears in Part I, Item 1A, “Risk Factors,” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. There have been no material changes in the risk factors disclosed in our Annual Report on Form 10-K.

Item 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

None.

Issuer Purchases of Equity Securities

The Company did not repurchase any shares of its outstanding stock during the three month period ended September 30, 2011.

Please refer to the information discussing restrictions on the Company’s ability to pay dividends under the heading “Liquidity and Capital Resources” in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of this report, which is incorporated by reference herein.

Item 6.

EXHIBITS


Exhibit Number		Description

(3)(i)		Articles of Incorporation of Renasant Corporation, as amended⁽¹⁾

(3)(ii)		Restated Bylaws of Renasant Corporation⁽²⁾

(4)(i)		Articles of Incorporation of Renasant Corporation, as amended⁽¹⁾

(4)(ii)		Restated Bylaws of Renasant Corporation ⁽²⁾

(31)(i)		Certification of the Chief Executive Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(31)(ii)		Certification of the Chief Financial Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(31)(iii)		Certification of the Chief Financial Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(32)(i)		Certification of the Chief Executive Officer, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(32)(ii)		Certification of the Chief Financial Officer, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(32)(iii)		Certification of the Chief Financial Officer, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(101)		The following materials from Renasant Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 were formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of September 30, 2011 and December 31, 2010, (ii) Consolidated Statements of Income for the three and nine months ended September 30, 2011 and 2010, (iii) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2011 and 2010 and (iv) Notes to Consolidated Financial Statements (Unaudited).

⁽¹⁾	Filed as exhibit 3.1 to the Company’s Form 10-Q filed with the Securities and Exchange Commission on May 9, 2005 and incorporated herein by reference.

⁽²⁾	Filed as exhibit 3(ii) to the Company’s Form 8-K filed with the Securities and Exchange Commission on October 21, 2011 and incorporated herein by reference.

The Company does not have any long-term debt instruments under which securities are authorized exceeding ten percent of the total assets of the Company and its subsidiaries on a consolidated basis. The Company will furnish to the Securities and Exchange Commission, upon their request, a copy of all long-term debt instruments.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


						RENASANT CORPORATION

November 9, 2011						/s/ E. Robinson McGraw
						E. Robinson McGraw
						Chairman, President &
						Chief Executive Officer

EXHIBIT INDEX


Exhibit Number		Description

(31)(i)		Certification of the Chief Executive Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(31)(ii)		Certification of the Chief Financial Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(31)(iii)		Certification of the Chief Financial Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(32)(i)		Certification of the Chief Executive Officer, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(32)(ii)		Certification of the Chief Financial Officer, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(32)(iii)		Certification of the Chief Financial Officer, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(101)		The following materials from Renasant Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 were formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of September 30, 2011 and December 31, 2010, (ii) Consolidated Statements of Income for the three and nine months ended September 30, 2011 and 2010, (iii) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2011 and 2010 and (iv) Notes to Consolidated Financial Statements (Unaudited).