(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 effect of economic conditions and interest rates on a national, regional or international basis; (2) the timing of the implementation of changes in operations to achieve enhanced earnings or effect cost savings; (3) competitive pressures in the consumer finance, commercial finance, insurance, financial services, asset management, retail banking, mortgage lending and auto lending industries; (4) the financial resources of, and products available to, competitors; (5) changes in laws and regulations, including changes in accounting standards; (6) changes in policy by regulatory agencies; (7) changes in the securities and foreign exchange markets; (8) the Company's potential growth, including its entrance or expansion into new markets, and the need for sufficient capital to support that growth; (9) 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; (10) an insufficient allowance for loan losses as a result of inaccurate assumptions; (11) general economic, market or business conditions;
(12) changes in demand for loan products and financial services;
(13) concentration of credit exposure; (14) changes or the lack of changes in interest rates, yield curves and interest rate spread relationship; and
(15) 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, a Mississippi corporation, owns and operates Renasant Bank, a Mississippi-chartered bank with operations in Mississippi, Tennessee and Alabama, and Renasant Insurance, Inc., a Mississippi corporation and a wholly-owned subsidiary of Renasant Bank with operations in Mississippi. The Company offers a diversified range of financial and insurance services to its retail and commercial customers through its full service offices located throughout north and north central Mississippi, west and middle Tennessee and north and north central Alabama.

Financial Condition

Our total assets were $3,642,657 on September 30, 2009 as compared to $3,715,980 on December 31, 2008.

Cash and cash equivalents increased $11,862 from $100,394 at December 31, 2008 to $112,256 at September 30, 2009. Cash and cash equivalents represented 3.08% of total assets at September 30, 2009 compared to 2.70% of total assets at December 31, 2008.

Investments

Our investment portfolio increased to $738,204 at September 30, 2009 from $695,106 at December 31, 2008. During the first nine months of 2009, the Company purchased $309,873 of investment securities. Maturities and calls of securities during the first nine months of 2009 totaled $172,551. The carrying value of securities sold during the first nine months of 2009 totaled $100,295. During the third quarter of 2009, the Company transferred all of its securities representing obligations of states and political subdivisions from available for sale to held to maturity. The Company does not actively trade these securities and typically holds these until maturity or call.

Loans

The loan balance, net of unearned income, at September 30, 2009 was $2,402,423, representing a decrease of $128,463 from $2,530,886 at December 31, 2008. As the general economic environment began to decline in the last half of 2007, management responded by implementing a strategy to diversify our loan portfolio and reduce our exposure to construction and land development

loans. Despite this intentional reduction, management expects loan growth in upcoming periods to be relatively modest and in the immediate quarters the loan balances may continue to decline across all regions until improvements in the general economic conditions occur both nationally and in the local markets in which we operate.

The table below sets forth loans outstanding, according to loan type, net of unearned income.

                                               September 30,     December 31,
                                                   2009              2008
        Commercial, financial, agricultural   $       280,930   $      312,648
        Lease financing                                   936            1,746
        Real estate - construction                    153,367          241,818
        Real estate - 1-4 family mortgage             848,267          886,380
        Real estate - commercial mortgage           1,048,135        1,015,894
        Installment loans to individuals               70,788           72,400

        Total loans, net of unearned income   $     2,402,423   $    2,530,886

Loans secured by real estate represented 85.32% and 84.72% of the Company's total loan portfolio as September 30, 2009 and December 31, 2008, respectively. The following table provides further details of the Company's loan portfolio secured by real estate:

                                              September 30,     December 31,
                                                  2009              2008
        Construction:
        Residential                          $        62,128   $      139,332
        Commercial                                    77,590           90,039
        Condominiums                                  13,649           12,447

        Total construction                           153,367          241,818

        1-4 family mortgage:
        Primary                                      350,989          361,153
        Home equity                                  174,061          181,960
        Rental/investment                            159,764          178,814
        Land development                             163,453          164,453

        Total 1-4 family mortgage                    848,267          886,380

        Commercial mortgage:
        Owner-occupied                               547,823          530,938
        Non-owner occupied                           357,623          347,000
        Land development                             142,689          137,956

        Total commercial mortgage                  1,048,135        1,015,894

        Total loans secured by real estate   $     2,049,769   $    2,144,092

Loan concentrations are considered to exist when there are amounts loaned to a large number of borrowers engaged in similar activities who would be similarly impacted by economic or other conditions. At September 30, 2009, we had no significant concentrations of loans other than those presented in the categories in the tables above.

Loans in our Mississippi region decreased $76,913 while loans in our Alabama and Tennessee regions decreased $25,947 and $25,603, respectively, during the first nine months of 2009 compared to the respective balances at December 31, 2008.

Mortgage loans held for sale were $24,091 at September 30, 2009 compared to $41,805 at December 31, 2008. Originations of mortgage loans to be sold totaled $673,896 for the first nine months of 2009 as compared to $568,824 for the same period in 2008. Mortgage loans to be sold are locked in at a contractual rate with third party private investors, and the Company is obligated to sell the mortgages to such investors only if the mortgages are closed and funded. 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.

Goodwill and Intangible Assets

Intangible assets decreased $1,484 to $191,839 at September 30, 2009 from $193,323 at December 31, 2008. The decrease reflects the amortization of finite-lived intangible assets recorded in connection with the acquisitions of Capital Bancorp Inc. ("Capital"), Heritage Financial Holding Corporation ("Heritage") and Renasant Bancshares, Inc. These finite-lived intangible assets are being amortized over their remaining estimated useful lives which range from two to eight years.

Deposits

Total deposits increased $216,653 to $2,560,984 at September 30, 2009 from $2,344,331 on December 31, 2008. Noninterest-bearing deposits increased $13,631 to $297,858 at September 30, 2009 compared to $284,227 at December 31, 2008. Interest-bearing deposits increased $203,022 to $2,263,126 at September 30, 2009 from $2,060,104 at December 31, 2008. During the first nine months of 2009, the Company grew deposits as competition for deposits eased in our markets, causing deposit pricing to return to more normal levels. As a result of this growth, the Company used deposits as its primary source of funding rather than borrowed funds. The cost of the Company's interest-bearing deposits decreased 91 basis points to 2.10% for the nine months ended September 30, 2009 from 3.01% for the nine months ended September 30, 2008. The cost of the Company's FHLB borrowings were 3.37% for the nine months ended September 30, 2009 compared to 3.56% for the same period in 2008.

Deposits in our Mississippi region increased $108,136 while deposits in our Alabama and Tennessee regions increased $61,947 and $46,570, respectively, during the first nine months of 2009 compared to the respective balances at December 31, 2008.

Borrowed Funds

Total borrowed funds were $635,076 at September 30, 2009 compared to $933,976 at December 31, 2008. Short-term borrowings, consisting of federal funds purchased, short-term FHLB advances and other short-term borrowings, were $35,825 at September 30, 2009 compared to $314,541 at December 31, 2008. Long-term debt, consisting of long-term Federal Home Loan Bank ("FHLB") advances and junior subordinated debentures, was $599,251 at September 30, 2009 compared to $619,435 at December 31, 2008. The aforementioned growth in deposits allowed the Company to reduce its use of FHLB borrowings, primarily its short-term FHLB borrowings. Long-term debt also includes the proceeds of the offering by Renasant Bank of a $50,000 aggregate principal amount 2.625% senior note due March 30, 2012 which was completed on March 31, 2009. The note is guaranteed by the Federal Deposit Insurance Corporation ("FDIC") under its Temporary Liquidity Guarantee Program ("TLGP"). Please refer to the "Liquidity and Capital Resources" section below for information regarding the Company's participation in the TLGP.

Shareholders' equity increased to $410,473 at September 30, 2009 compared to $400,371 at December 31, 2008. Factors contributing to the increase in shareholders' equity include current year earnings offset by dividends and a reduction in other comprehensive losses attributable to improvements in the fair value of securities held in the investment portfolio.

Results of Operations

Three Months Ended September 30, 2009 as Compared to the Three Months Ended September 30, 2008

Net income for the three month period ended September 30, 2009 was $4,225, a decrease of $3,333, or 44.10%, from net income of $7,558 for the same period in 2008. Basic and diluted earnings per share were $0.20 for the three month period ended September 30, 2009, as compared to basic and diluted earnings per share of $0.36 for the comparable period a year ago.

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 three months ended September 30, 2009 and 2008:

                                                          Three Months Ended September 30,
                                                     2009                                  2008
                                                     Interest                              Interest
                                         Average      Income/    Yield/        Average      Income/    Yield/
                                         Balance      Expense     Rate         Balance      Expense     Rate
Assets
Interest-earning assets:
Loans(1)                               $ 2,465,298   $  34,893     5.62 %    $ 2,571,069   $  41,027     6.35 %
Securities:
Taxable(2)                                 567,500       6,658     4.69          614,696       7,909     5.15
Tax-exempt                                 136,476       2,220     6.51          121,281       1,854     6.12
Interest-bearing balances with banks        92,253          49     0.21           22,605         114     2.01

Total interest-earning assets:           3,261,527      43,820     5.33        3,329,651      50,904     6.08

Cash and due from banks                    118,833                                74,379
Intangible assets                          192,078                               194,382
Other assets                               103,154                               145,657

Total assets                           $ 3,675,592                           $ 3,744,069


Liabilities and shareholders' equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand                $    77,617   $     265     1.35      $   165,120   $     751     1.81
Savings and money market                   910,775       2,701     1.18          750,720       2,818     1.49
Time deposits                            1,297,792       8,501     2.60        1,227,840      10,789     3.50

Total interest-bearing deposits          2,286,184      11,467     1.99        2,143,680      14,358     2.66
Borrowed funds                             647,919       5,956     3.65          871,744       7,705     3.52

Total interest-bearing liabilities       2,934,103      17,423     2.36        3,015,424      22,063     2.91
Noninterest-bearing deposits               297,390                               287,197
Other liabilities                           37,320                                34,877
Shareholders' equity                       406,779                               406,571

Total liabilities and shareholders'
equity                                 $ 3,675,592                           $ 3,744,069


Net interest income/net interest
margin                                               $  26,397     3.22 %                  $  28,841     3.45 %

(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.

The average balances of nonaccruing loans 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 is the difference between interest earned on earning assets and the cost of interest-bearing liabilities, which are two of the largest components contributing to 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 decreased 9.84% to $25,191 for the third quarter of 2009 compared to $27,941 for the same period in 2008. On a tax equivalent basis, net interest margin for the three month period ended September 30, 2009 was 3.22% compared to 3.45% for the same period in 2008. Significant reductions in interest rate indices throughout 2008 have had a negative impact on net interest margin in 2009. With each rate reduction in rate indices, specifically, the prime rate, rates paid on U.S. Treasury securities and the London Interbank Offering Rate ("LIBOR"), the yield on our variable rate loans indexed to these indices decreased. At the same time, competitive and market-wide liquidity factors prevented the cost of funding sources, particularly deposits, from declining proportionately. As a result, net interest margin declined. Increased liquidity due to deposit growth, coupled with loan paydowns and higher than anticipated prepayment speeds within our investment portfolio, resulted in changes in the mix of our earning assets. These changes also had an impact on net interest margin. We currently intend to keep these excess funds in interest-bearing balances with banks until they are utilized in future quarters to fund loan growth, purchase investment securities or payoff borrowings. Not only do interest-bearing balances with banks typically pay a lower rate than the rates paid on investment securities and loans, but the rate has also been more sensitive to the decline in the interest rate environment as the average rate paid on such balances for the three months ended September 30, 2009 was 0.21% compared to 2.01% for the same period in 2008. In addition, higher levels of nonaccrual loans during the third quarter of 2009 as compared to the third quarter of 2008 had a further negative impact on net interest margin for three month period ended September 30, 2009 as compared to the same period in 2008.

Interest income decreased 14.78% to $42,614 for the third quarter of 2009 from $50,004 for the same period in 2008. The decrease in interest income was primarily due to aforementioned decreases in yield and changes in the mix of interest-earning assets. The average balance of loans decreased $105,771 for the three months ended September 30, 2009 as compared to the same period in 2008, while the average balance of interest-bearing balances with banks increased $69,648 for the three months ended September 30, 2009 as compared to the same period in 2008. The tax equivalent yield on earning assets decreased 75 basis points to 5.33% for the third quarter of 2009 compared to 6.08% for the same period in 2008. The Company reversed interest income totaling $371 related to loans placed on nonaccrual status during the three months ended September 30, 2009 compared to $298 for the same period in 2008. This reversal reduced net interest margin by 5 basis points and 3 basis points for the three months ended September 30, 2009 and 2008, respectively.

Interest expense decreased 21.03% to $17,423 for the three months ended September 30, 2009 as compared to $22,063 for the same period in 2008. This decrease primarily resulted from reductions in the cost of deposits and borrowed funds and a change in the mix of the Company's funding sources, in which lower costing deposits were utilized to reduce higher costing borrowed funds, such as FHLB advances. The average balance of interest-bearing deposits, which had an average cost of 1.99%, increased $142,504 for the three months ended September 30, 2009 as compared to the same period in 2008, while the average balance of borrowed funds, which had an average cost of 3.67%, decreased $223,825 for the three months ended September 30, 2009 as compared to the same period in 2008. The cost of interest-bearing liabilities decreased 55 basis points to 2.36% for the third quarter of 2009 compared to 2.91% for the same period in 2008.

Noninterest Income

Noninterest income was $13,953 for the three month period ended September 30, 2009 compared to $13,644 for the same period in 2008, an increase of $309, or 2.26%.

Service charges on deposits, representing the largest component of noninterest income, were $5,379 and $5,861 for the third quarter of 2009 and 2008, respectively. Overdraft fees, the largest component of service charges on deposits, were $4,833 for the three month period ended September 30, 2009 compared to $5,324 for the same period in 2008.

Fees and commissions, which include fees charged for both deposit services (other than service charges on deposits) and loan services, were $3,961 for the three month period ended September 30, 2009 compared to $4,198 for the same period in 2008. Fees charged for loan services were $1,907 for the third quarter of 2009 compared to $2,046 for the same period in 2008. Interchange fees on debit card transactions continue to be a strong source of noninterest income. For the third quarter of 2009, fees associated with debit card usage were $1,379, up 8.16% from $1,275 for the same period in 2008. 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 Condensed Consolidated Statements of Income in the account line "Fees and commissions," were $288 for the third quarter of 2009 compared to $419 for the same period of 2008.

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 generated based on the contractual terms of the accounts, including changes in market values of assets under management. Trust revenue for the third quarter of 2009 was $501 as compared to $597 for the same period in 2008. The market value of assets under management was $463,926 and $510,197 as of September 30, 2009 and 2008, respectively. The decline in the market value of assets under management is a result of the performance of the financial markets and the overall economic conditions over this same period.

Gains from sales of mortgage loans held for sale increased to $1,832 for the three months ended September 30, 2009 compared to $1,352 for the same period in 2008. The increase in gains on the sale of mortgage loans is attributable to higher volumes of loans sold during the third quarter of 2009 compared to the same period in 2008 due to an increase in originations and refinancing made possible by historically lower mortgage interest rates during the second quarter of 2009. Originations of mortgage loans to be sold totaled $150,928 for the third quarter of 2009 as compared to $174,157 for same period in 2008. Approximately 42.84% of the total mortgage originations during the three months ended September 30, 2009 were mortgages being refinanced with the Company, with the remainder being new originations.

Other noninterest income, which includes BOLI income, contingency income and other miscellaneous income, was $1,331 and $716 for the three months ended September 30, 2009 and 2008, respectively. Other noninterest income for the three months ended September 30, 2009 includes a $638 gain related to a change in vendors related to our debit card product.

Noninterest Expense

Noninterest expense was $26,118 for the three month period ended September 30, 2009 compared to $27,784 for the same period in 2008, a decrease of $1,666, or 6.00%.

Salaries and employee benefits for the three month period ended September 30, 2009 were $13,363, which is $1,887 less than the same period last year. This difference is primarily attributable to the realization of the full effect of workforce reductions as employee service capacity exceeded projected growth in certain areas.

Data processing costs for the three month period ended September 30, 2009 were $1,439, an increase of $150 compared to $1,289 for the same period last year. Net occupancy expense and equipment expense for the three month period ended September 30, 2009 decreased $354 to $3,045 over the comparable period for the prior year.

Amortization of intangible assets was $489 for the three months ended September 30, 2009 compared to $610 for the three months ended September 30, 2008. Intangible assets are amortized over their estimated useful lives, which, at the time of origination, ranged between five and ten years. These finite-lived intangible assets have remaining estimated useful lives ranging from two to eight years.

Advertising and marketing expense was $492 for the three months ending September 30, 2009, a decrease of 42.99% compared to $863 for the same period in 2008. The reduction in advertising and marketing expense was related to expenses which the Company does not anticipate will impact its ability to grow loans or deposits in the future.

Communication expense, that is, expenses incurred for communication to clients and between employees, was $1,057 for the three months ended September 30, 2009 compared to $1,102 for the same period in 2008.

Other noninterest expense was $5,165 and $4,374 for the three months ended September 30, 2009 and 2008, respectively. Other noninterest expense for the three months ended September 30, 2009 includes expenses related to other real estate owned of $1,054, an increase of $942 compared to $112 for the same period in 2008. In addition, other noninterest expense for the three months ended September 30, 2009 includes an increase of $515 in expenses associated with our FDIC deposit insurance assessments due to an increase in the base assessment rates applicable to all insured institutions. These increases were offset by reductions in expense resulting from renegotiations of various contracts with suppliers and vendors and the Company's overall efforts to reduce non-essential expenses.

Noninterest expense as a percentage of average assets was 2.82% for the three month period ended September 30, 2009 and 2.95% for the comparable period in 2008. The net overhead ratio, which is defined as noninterest expense less noninterest income, expressed as a percent of average assets, was 1.31% and 1.50% for the third quarter of 2009 and 2008, respectively. The efficiency ratio measures 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. Our efficiency ratio improved to 64.73% for the . . .