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 x NO ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES x NO ¨

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common stock, $5$5.00 Par Value, ~~10,393,373~~10,331,431 shares outstanding as of ~~July~~October 31, 2005.


	June 30, 2005			December 31, 2004			September 30, 2005			December 31, 2004
Assets
Cash and due from banks	$	62,172		$	52,096		$	84,568		$	52,096
Interest-bearing balances with banks		34,868			3,929			21,330			3,929

Cash and cash equivalents		97,040			56,025			105,898			56,025

Securities available for sale		415,193			371,581			400,786			371,581

Mortgage loans held for sale		32,792			2,714			42,865			2,714

Loans, net of unearned income		1,592,391			1,141,480			1,608,697			1,141,480
Allowance for loan losses		(18,080	)		(14,403	)		(18,448	)		(14,403	)

Net loans		1,574,311			1,127,077			1,590,249			1,127,077

Premises and equipment, net		41,468			33,998			43,574			33,998
Intangible assets		101,528			50,424			100,766			50,424
Other assets		91,053			65,726			95,655			65,726

Total assets	$	2,353,385		$	1,707,545		$	2,379,793		$	1,707,545

Liabilities and shareholders’ equity

Liabilities
Deposits
Noninterest-bearing	$	233,095		$	200,922		$	244,086		$	200,922
Interest-bearing		1,531,082			1,117,755			1,574,232			1,117,755

Total deposits		1,764,177			1,318,677			1,818,318			1,318,677

Federal funds purchased		5,366			51,500			24,216			51,500
Federal Home Loan Bank advances		256,299			109,756			202,797			109,756
Junior subordinated debentures		64,445			20,619			64,405			20,619
Other borrowed funds		8,842			9,672			7,658			9,672
Other liabilities		18,802			18,279			25,188			18,279

Total liabilities		2,117,931			1,528,503			2,142,582			1,528,503

Shareholders’ equity
Preferred stock, $.01 par value – 5,000,000 and 0 shares authorized at June 30, 2005 and December 31, 2004, respectively; no shares issued and outstanding		—			—
Common stock, $5 par value – 75,000,000 and 15,000,000 shares authorized at June 30, 2005 and December 31, 2004, respectively; 11,489,550 shares issued; 10,397,897 and 9,046,997 shares outstanding at June 30, 2005, and December 31, 2004, respectively		57,448			50,600
Preferred stock, $.01 par value – 5,000,000 and 0 shares authorized at September 30, 2005 and December 31, 2004, respectively; no shares issued and outstanding								—			—
Common stock, $5.00 par value – 75,000,000 and 15,000,000 shares authorized at September 30, 2005 and December 31, 2004, respectively; 11,489,549 shares issued; 10,380,372 and 9,046,997 shares outstanding at September 30, 2005, and December 31, 2004, respectively								57,448			50,600
Treasury stock, at cost		(23,341	)		(21,621	)		(24,127	)		(21,621	)
Additional paid-in capital		111,733			67,545			111,630			67,545
Retained earnings		88,910			81,720			92,949			81,720
Accumulated other comprehensive income		704			798
Accumulated other comprehensive income (loss)								(689	)		798

Total shareholders’ equity		235,454			179,042			237,211			179,042

Total liabilities and shareholders’ equity	$	2,353,385		$	1,707,545		$	2,379,793		$	1,707,545


	Three Months Ended June 30,						Six Months Ended June 30,				Three Months Ended September 30,				Nine Months Ended September 30,
	2005			2004			2005		2004		2005		2004		2005		2004
Interest income
Loans	$	27,307		$	13,369		$	51,837	$	26,656	$	27,963	$	16,667	$	79,800	$	43,323
Securities:
Taxable		3,306			3,047			6,801		6,153		3,184		2,974		9,985		9,105
Tax-exempt		1,133			1,131			2,297		2,246		1,148		1,098		3,445		3,344
Other		154			12			260		88		122		66		382		176

Total interest income		31,900			17,559			61,195		35,143		32,417		20,805		93,612		55,948

Interest expense
Deposits		8,139			4,036			15,046		8,214		9,476		4,613		24,522		12,827
Borrowings		3,306			976			6,376		1,932		3,202		1,189		9,578		3,121

Total interest expense		11,445			5,012			21,422		10,146		12,678		5,802		34,100		15,948

Net interest income		20,455			12,547			39,773		24,997		19,739		15,003		59,512		40,000
Provision for loan losses		847			488			1,444		993		833		636		2,278		1,629

Net interest income after provision for loan losses		19,608			12,059			38,329		24,004		18,906		14,367		57,234		38,371

Noninterest income
Service charges on deposit accounts		4,167			3,732			8,041		7,432		4,358		4,067		12,399		11,499
Fees and commissions		2,965			1,958			5,470		3,629		2,853		1,975		8,323		5,604
Insurance commissions		906			890			1,737		1,710		955		993		2,692		2,703
Trust revenue		611			606			1,236		1,070		613		658		1,849		1,728
Securities gains (losses)		(32	)		(31	)		70		58
Securities gains												—		51		70		109
BOLI income		402			283			806		568		389		302		1,195		870
Merchant discounts		2			270			4		626		2		7		6		633
Gains on sales of mortgage loans		673			151			1,366		279		766		138		2,132		417
Gain on sale of merchant business		—			1,000			—		1,000		—		—		—		1,000
Other		257			260			1,124		918		308		187		1,432		1,105

Total noninterest income		9,951			9,119			19,854		17,290		10,244		8,378		30,098		25,668

Noninterest expense
Salaries and employee benefits		11,520			7,952			22,979		15,545		11,696		9,067		34,675		24,612
Data processing		962			1,141			2,006		2,304		966		1,020		2,972		3,324
Net occupancy		1,181			866			2,796		1,721		1,457		1,006		4,253		2,727
Equipment		1,041			861			2,031		1,572		763		1,089		2,794		2,661
Professional fees		656			385			1,307		687		467		340		1,774		1,027
Advertising		958			422			1,698		916		889		532		2,587		1,448
Intangible amortization		571			100			1,157		223		557		403		1,714		626
Other		3,968			2,455			7,846		4,900		3,769		2,753		11,614		7,653

Total noninterest expense		20,857			14,182			41,820		27,868		20,564		16,210		62,383		44,078

Income before income taxes		8,702			6,996			16,363		13,426		8,586		6,535		24,949		19,961
Income taxes		2,495			1,939			4,697		3,722		2,261		1,844		6,958		5,566

Net income	$	6,207		$	5,057		$	11,666	$	9,704	$	6,325	$	4,691	$	17,991	$	14,395

Basic earnings per share	$	0.60		$	0.61		$	1.12	$	1.18	$	0.61	$	0.52	$	1.73	$	1.70

Diluted earnings per share	$	0.59		$	0.61		$	1.11	$	1.18	$	0.60	$	0.52	$	1.71	$	1.70


	Six months ended June 30						Nine Months Ended September 30
	2005			2004			2005			2004
Operating activities
Net cash provided by operating activities	$	24,933		$	12,427		$	37,300		$	20,400

Investing activities
Purchases of securities available for sale		(10,488	)		(70,772	)		(21,532	)		(87,585	)
Proceeds from sales of securities available for sale		25,409			52,191			31,225			62,246
Proceeds from call/maturities of securities available for sale		34,768			62,221			51,788			79,715
Net increase in loans		(78,351	)		(45,503	)		(105,735	)		(87,040	)
Proceeds from sales of premises and equipment		590			26			697			162
Purchases of premises and equipment		(4,321	)		(1,538	)		(7,264	)		(2,413	)
Net cash paid in business combination		(19,328	)		—			(19,328	)		(23,674	)

Net cash used in investing activities		(51,721	)		(3,375	)		(70,149	)		(58,589	)

Financing activities
Net increase in noninterest-bearing deposits		6,481			6,692			17,472			25,555
Net increase in interest-bearing deposits		58,056			10,458
Net decrease in short-term borrowings		(41,645	)		(5,730	)
Net increase (decrease) in interest-bearing deposits								101,206			(7,810	)
Net increase (decrease) in short-term borrowings								(81,978	)		38,772
Proceeds from long-term debt		150,043			1,130			163,445			2,614
Repayment of long-term debt		(98,217	)		(5,293	)		(107,161	)		(9,994	)
Purchase of treasury stock		(4,534	)		(245	)		(5,982	)		(1,423	)
Cash paid for dividends		(4,476	)		(3,275	)		(6,763	)		(5,168	)
Cash received on exercise of options		2,095			—			2,483			769

Net cash provided by financing activities		67,803			3,737			82,722			43,315

Net increase in cash and cash equivalents		41,015			12,789			49,873			5,126
Cash and cash equivalents at beginning of year		56,025			53,479
Cash and cash equivalents at beginning of period								56,025			53,479

Cash and cash equivalents at end of year	$	97,040		$	66,268
Cash and cash equivalents at end of period							$	105,898		$	58,605

Supplemental disclosures
Transfers of loans to other real estate	$	5,288		$	832		$	5,826		$	971

~~Business:~~Business: Renasant Corporation (formerly known as The Peoples Holding Company and referred to herein as the “Company”), a Mississippi corporation, owns and operates Renasant Bank (formerly known as The Peoples Bank & Trust Company), a Mississippi-chartered bank with operations in Mississippi, Tennessee and Alabama, and Renasant Insurance, Inc. (formerly known as The Peoples Insurance Agency, Inc.), a wholly-owned subsidiary of Renasant Bank with operations in Mississippi. On March 31, 2005, Renasant Bank of Tennessee, a Tennessee-chartered bank and wholly-owned subsidiary of the Company, was merged into Renasant Bank, and Renasant Bank survived the merger. The Company has full service offices located throughout north Mississippi, southwest Tennessee and north Alabama.

On December 16, 2004, the board of directors of the Company approved a plan to change the name of the Company from “The Peoples Holding Company” to “Renasant Corporation”. The change of the Company’s name was approved by the shareholders at the annual meeting held on April 19, 2005 and was effective on the same date.

On July 1, 2004, the Company completed its acquisition of Renasant Bancshares, Inc. (“Renasant Bancshares”). On January 1, 2005, the Company completed its acquisition of Heritage Financial Holding Corporation (“Heritage”). The financial condition and results of operations for Renasant and Heritage are included in the Company’s financial statements since the respective dates of each acquisition.

At the Company’s 2005 Annual Meeting of Shareholders held on April 19, 2005, the Company’s shareholders approved an amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of the Company’s common stock, par value $5.00 per share, from 15,000,000 shares to 75,000,000 shares. At the meeting, the Company’s shareholders also approved an amendment to the Company’s Articles of Incorporation to authorize 5,000,000 shares of preferred stock, par value $.01 per share. The Company’s board of directors will determine, in its sole discretion, the rights, preferences and other terms of the shares of preferred stock at the time of the issuance of such shares. As a result of these actions, the Company now has a total of 80,000,000 shares of stock authorized, of which 75,000,000 shares are common stock and 5,000,000 shares are preferred stock.

Basis of ~~Presentation:~~Presentation: The accompanying unaudited condensed 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 consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.

Certain amounts in prior periods have been reclassified to conform to the current presentation, and all dollar amounts are in thousands, except share data.

New accounting ~~pronouncements:~~pronouncements: In January 2005, the Company adopted and applied the provisions of the American Institute of Certified Public Accounts’ Statement of Position 03-3, “Accounting for Certain Loans or Debt Securities Acquired in a Transfer,” (“SOP 03-3”) on certain loans acquired in connection with the acquisition of ~~Heritage for which there~~Heritage. There was evidence of deterioration of the credit quality of these loans since origination, and ~~for which~~ it was probable, at the acquisition date, that all contractually required payments would not be collected. The amount of such loans included in the balance sheet heading “Loans, net of unearned income” at ~~June~~September 30, 2005 ~~are~~is as follows:

The Company did not increase the allowance for loan losses through a charge to the income statement for these loans during the ~~six~~nine months ended ~~June~~September 30, 2005. During ~~the second quarter of~~ 2005, the Company recorded ~~$1,048~~$1,147 in interest income when it transferred ~~$1,048~~$1,147 of nonaccretable difference to accretable yield as the Company realized improved cash flow on certain loans. The majority of the transfer was the result of a negotiated settlement with a guarantor on a single loan.

In December 2004, the Financial Accounting Standards Board issued a revision to Statement of Financial Accounting Standards No. 123, “Share-Based Payment” (“Statement 123R”). Statement 123R requires companies to recognize in their financial statements the cost resulting from all share-based payment transactions using a fair value-based measurement model. Companies are required to estimate the fair value of share-based payments to employees using a mathematical model that reflects the most accurate valuation given the information available and incorporates various factors, including exercise price of the option, expected volatility of the entity’s stock, expected term of the award, performance/service/market conditions, expected dividends, the risk-free rate, and grant date share price. Statement 123R replaces Statement 123 and supersedes Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”. Statement 123R became effective in annual reporting periods beginning after June 15, 2005, requiring all share-based payments granted or modified subsequent to the implementation date to be accounted for under Statement 123R. In 2002, the Company adopted the provisions of Statement 123 and began recognizing compensation expense in the income statement, based on the estimated fair value of all awards granted to employees. As such, the adoption of Statement 123R is not expected to have a material effect on the Company’s financial condition or results of operations.

In September 2002, the Company’s board of directors adopted a share buy-back plan which, as amended through ~~June~~September 30, 2005, allows the Company to purchase up to ~~1,175,657~~1,396,687 shares of our outstanding common stock, subject to a monthly purchase limit of $2,000 of our common stock. This plan will remain in effect until all authorized shares are repurchased or until otherwise instructed by the board of directors. As of ~~June~~September 30, 2005, ~~1,077,787~~1,124,087 shares of our common stock had been purchased and ~~97,870~~272,600 shares remained authorized under this plan. The reacquired common shares are held as treasury shares and may be reissued for various corporate purposes. During the ~~second~~third quarter of 2005, the Company reissued ~~99,932~~28,776 shares from treasury for the exercise of stock options assumed in the Renasant Bancshares and Heritage acquisitions.

The Company declared a cash dividend for the ~~second~~third quarter of 2005 of $0.22 per share as compared to $0.21 per share for the ~~first quarter of 2005 and $.20 per share for the second~~third quarter of 2004. Total cash dividends paid to shareholders by the Company were ~~$4,476~~$6,763 and ~~$3,275~~$5,168 for the ~~six~~nine month periods ended ~~June~~September 30, 2005 and 2004, respectively.

For the three month periods ended ~~June 30, 2005 and 2004, total comprehensive income (loss) was $8,569 and $(1,500), respectively. For the six month periods ended June~~September 30, 2005 and 2004, total comprehensive income was ~~$11,572~~$4,932 and ~~$3,916,~~$8,568, respectively. For the nine month periods ended September 30, 2005 and 2004, total comprehensive income was $16,504 and $12,484, respectively. Total comprehensive income consists of net income and the change in the unrealized gain (loss) on securities available for sale.

The following tables provide the components of net pension cost and other benefit cost recognized for the three and ~~six~~nine month periods ended ~~June~~September 30, 2005 and 2004:


	Three Months Ended June 30,										Three Months Ended September 30,
	Pension Benefits						Other Benefits				Pension Benefits						Other Benefits
	2005			2004			2005		2004		2005			2004			2005		2004
Service cost	$	—		$	—		$	18	$	16	$	—		$	—		$	18	$	18
Interest cost		242			240			17		16		242			241			17		20
Expected return on plan assets		(327	)		(312	)		—		—		(327	)		(311	)		—		—
Prior service cost recognized		8			8			1		1		8			7			1		2
Recognized loss		92			91			13		5		92			98			13		13

Net periodic benefit cost	$	15		$	27		$	49	$	38	$	15		$	35		$	49	$	53


	Six Months Ended June 30,
	Pension Benefits						Other Benefits
	2005			2004			2005		2004
Service cost	$	—		$	—		$	36	$	32
Interest cost		484			480			34		32
Expected return on plan assets		(654	)		(624	)		—		—
Prior service cost recognized		16			16			2		2
Recognized loss		184			182			26		10

Net periodic benefit cost	$	30		$	54		$	98	$	76


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended September 30,				Nine months Ended September 30,
	2005		2004		2005		2004		2005		2004		2005		2004
Basic:
Net income applicable to common stock	$	6,207	$	5,057	$	11,666	$	9,704	$	6,325	$	4,691	$	17,991	$	14,395

Average common shares outstanding		10,400,330		8,186,826		10,401,799		8,189,178		10,396,579		8,977,549		10,399,915		8,453,886

Net income per common share-basic	$	0.60	$	0.61	$	1.12	$	1.18	$	0.61	$	0.52	$	1.73	$	1.70

Diluted:
Net income	$	6,207	$	5,057	$	5,459	$	9,704	$	6,325	$	4,691	$	17,991	$	14,395

Average common shares outstanding		10,400,330		8,186,826		10,401,799		8,189,178		10,396,579		8,977,549		10,399,915		8,453,886
Stock awards		118,430		21,115		121,581		21,059		114,633		65,146		112,376		27,483

Average common shares outstanding-diluted		10,518,760		8,207,941		10,523,380		8,210,237		10,511,212		9,042,695		10,512,291		8,481,369

Net income per common share-diluted	$	0.59	$	0.61	$	1.11	$	1.18	$	0.60	$	0.52	$	1.71	$	1.70

Basic net income per common share is calculated by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted net income per common share reflects the pro forma dilution assuming outstanding unexercised stock options and warrants were exercised into common shares.

Financial Accounting Standards Board Statement No. 131, “Disclosures About Segments of an Enterprise and Related Information,” requires public companies to report certain financial and descriptive information about their reportable operating segments (as defined by management) and certain enterprise-wide financial information about products and services, geographic areas, and major customers.

The Company’s internal reporting process is organized into four segments that account for the Company’s principal activities: the delivery of financial services through its community banks in Mississippi (Mississippi Region), Tennessee (Tennessee Region) and Alabama (Alabama Region), and the delivery of insurance services through its insurance agency (Renasant Insurance). In order to more closely match expenses with revenues at the community bank level, direct and indirect expenses and revenues are allocated to the segments based on various factors, including percentage of loans, percentage of deposits, full-time employees, number of accounts serviced and actual sales. All of the Company’s products are offered to similar classes of customers and markets, are distributed using the same methods and operate in similar regulatory environments.

The following table provides financial information for our operating segments. The “Other” column in the following table represents financial information of the holding company and eliminations which are necessary for purposes of reconciling to the consolidated amounts.

On January 1, 2005, the Company completed its acquisition of Heritage, a bank holding company headquartered in Decatur, Alabama. Heritage was the parent of Heritage Bank and operated eight banking offices in Alabama. The acquisition allowed the Company to expand its geographical footprint into the key markets of Birmingham, Decatur and Huntsville, Alabama.

The Company issued 1,369,589 shares of its common stock and paid approximately $23,055 in cash for 100% of the voting equity interests in Heritage. The common stock issued by the Company was registered under the Securities Act of 1933, as amended. The aggregate transaction value, including the value of Heritage’s options assumed by the Company, was $75,658. At January 1, 2005, Heritage had total assets of approximately $540,296, total loans of approximately $389,740, total deposits of approximately $380,998 and total stockholders’ equity of approximately $28,842. In connection with the acquisition, the Company recorded approximately ~~$52,771~~$52,477 in intangible assets. The intangible assets are not deductible for income tax purposes.

InSOP 03-3, which became effective for loans acquired in fiscal years subsequent to December ~~2003, the American Institute of Certified Public Accountants issued Statement of Position 03-3, “Accounting for Certain Loans and Debt Securities Acquired in a Transfer” (“SOP 03-3”). SOP 03-3~~31, 2004, prohibits the carryover of an allowance for loan losses on certain loans acquired in a business combination accounted for as a purchase. Increases in expected cash flows to be collected from the contractual cash flows ~~will~~are to be recognized as an adjustment of the loan’s yield over its remaining life, while decreases in expected cash flows ~~will~~are to be recognized as an impairment. ~~This accounting guidance became effective for loans acquired in fiscal years subsequent to December 15, 2004. The Company applied the guidance under SOP 03-3 to~~Certain of the loans acquired in connection with the acquisition of ~~Heritage. As a result, certain acquired loans~~Heritage had experienced credit deterioration since date of origination to the date of ~~acquisition.~~acquisition and are required to be accounted for under SOP 03-3. These loans, which had an outstanding balance of $18,839 at the date of acquisition, are now carried at a balance which management believes, based on the facts and circumstances surrounding each respective loan at the date of acquisition, represents their future cash flows. Management continually monitors these loans individually as part of its normal credit review and monitoring procedures for changes in the estimated future cash flows. At ~~June~~September 30, 2005, none of the allowance for loan losses was allocated to these loans.

The following table summarizes the allocation of purchase price to assets and liabilities acquired in connection with the Company’s acquisition of Heritage based on their fair values on January 1, 2005. The Company is finalizing the value of ~~the leasehold improvements~~certain assets and ~~the amount of deferred taxes.~~liabilities. As such, the adjustments included in the following table ~~for fixed assets and deferred taxes~~ are preliminary and may change.


Net Assets Acquired:
Net assets acquired:
Heritage’s stockholders’ equity	$	28,842				$	28,842
Increase (decrease) to net assets as a result of fair value adjustments to assets acquired and liabilities assumed:
Investments		(885	)				(885	)
Loans, net of unearned income		(485	)				(485	)
Fixed assets		(1,012	)				(1,049	)
Core deposits intangible		4,590					4,590
Non-compete agreements		634					634
Other assets		(536	)				(269	)
Deposits		35					35
FHLB advances		(1,363	)				(1,363	)
Trust preferred securities		(1,638	)				(1,638	)
Other liabilities							(63	)
Deferred income taxes		(71	)				56

Increase (decrease) to net assets as a result of implementation of SOP 03-3
Loans		(5,742	)				(5,742	)
Allowance for loan losses		5,742					5,742

Total Net Assets Acquired					28,111
Total net assets acquired										28,405

Goodwill resulting from merger				$	47,547				$	47,253

Since the acquisition of Heritage was completed on January 1, 2005, the actual results of the combined companies through the ~~six-month~~nine-month period ended ~~June~~September 30, 2005 are indicative of the pro forma results. As such, no pro forma information is included herein.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (dollar amounts in thousands, except per share data)

This Form 10-Q may contain, or incorporate by reference, statements 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,” “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 for 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 significant fluctuations in interest rates, inflation, economic recession, significant changes in the federal and state legal and regulatory environment, significant underperformance in our portfolio of outstanding loans, and competition in our markets. 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.

Renasant Corporation (formerly known as The Peoples Holding Company and referred to herein as the “Company”, “we,” “our,” or “us”), a Mississippi corporation, owns and operates Renasant Bank (formerly known as The Peoples Bank & Trust Company), a Mississippi-chartered bank with operations in Mississippi, Tennessee and Alabama, and Renasant Insurance, Inc. (formerly known as The Peoples Insurance Agency, Inc.), a Mississippi corporation with operations in Mississippi. Renasant Insurance, Inc. is a wholly owned subsidiary of Renasant Bank. The Company has full service offices located throughout north Mississippi, southwest Tennessee and north Alabama. It is important to note that our operations were not materially affected by Hurricane Katrina.

On July 1, 2004, we completed our acquisition of Renasant Bancshares, Inc. (“Renasant Bancshares”), the parent company of Renasant Bank of Tennessee, and expanded our footprint into Tennessee. Renasant Bank of Tennessee became one of our subsidiaries as a result of our acquisition of Renasant Bancshares. In order to simplify our operations and reduce costs, on March 31, 2005, Renasant Bank of Tennessee merged into Renasant Bank, ~~and~~with Renasant Bank ~~survived~~surviving the merger. On January 1, 2005, we completed our acquisition of Heritage Financial Holding Corporation (“Heritage”), the parent company of Heritage Bank, and expanded our footprint into Alabama. On that date, Heritage merged into the Company, and Heritage Bank merged into Renasant Bank. The Company and Renasant Bank, respectively, survived the ~~merger.~~mergers. The financial condition and results of operations for both acquisitions are included in the Company’s financial statements since the date of relevant acquisition.

Total assets for the Company increased to ~~$2,353,385~~$2,379,793 on ~~June~~September 30, 2005 from $1,707,545 on December 31, 2004, representing an increase of ~~37.82%~~39.37%. The acquisition of Heritage contributed total assets of $540,296. The information contained in the ensuing paragraphs further discusses the increase in assets.

Cash and cash equivalents increased ~~$41,015~~$49,873 from $56,025 at December 31, 2004 to ~~$97,040~~$105,898 at ~~June~~September 30, 2005 and represented ~~4.12%~~4.45% of total assets at ~~June~~September 30, 2005 compared to 3.28% of total assets at December 31, 2004.

Our investment portfolio increased from $371,581 at December 31, 2004 to ~~$415,193~~$400,786 at ~~June~~September 30, 2005. The acquisition of Heritage contributed investment securities with a balance of $94,866. The decline in the investment portfolio, excluding the contribution from the Heritage acquisition, was a result of the Company utilizing the cash flow from its investment portfolio to partially fund loan growth generated during the first ~~half~~nine months of 2005.

Mortgage loans held for sale were ~~$32,792~~$42,865 at ~~June~~September 30, 2005 compared to $2,714 at December 31, 2004. The increase in mortgage loans held for sale since the beginning of the year is directly attributable to the mortgage loan operations acquired in connection with our acquisition of Heritage on January 1, 2005. Originations of mortgage loans to be sold totaled ~~$204,840~~$327,305 for the first ~~six~~nine months of 2005 as compared to $45,331 for the full year of 2004.

The balance of our mortgage loans held for sale portfolio typically ranges from $30,000 to $35,000 at any given reporting period. Due to the widespread impact of Hurricane Katrina, certain potential purchasers of our mortgage loans have required us to reappraise the collateral securing certain mortgage loans before agreeing to purchase such loans. This process has delayed the consummation of certain sales of our mortgage loans, which in turn has result in a higher than normal balance in mortgage loans held for sale at September 30, 2005. Management believes this delay is temporary and will not prevent our sale of these mortgage loans in the secondary market. Mortgage loans to be sold are locked in at a contractual rate with third party private investors, and the Company is obligated to ~~sale~~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 some interest income is derived from mortgage loans held for sale, the main source of income is gains from the sale of mortgage loans in the secondary market.

The loan balance, net of unearned income, at ~~June~~September 30, 2005 was ~~$1,592,391~~$1,608,697, representing an increase of ~~$450,911,~~$467,217, or ~~39.50%~~40.93%, from $1,141,480 at December 31, 2004. The acquisition of Heritage contributed total loans of $389,740. Excluding Heritage’s loans, loans increased ~~$61,171~~$77,477, or 6.78%, from December 31, 2004.

Excluding the impact on the loan portfolio from the Heritage acquisition, the growth in loans during the first ~~six~~nine months of 2005 is primarily attributable to loan production from our Tennessee region. Loans in the Tennessee region grew ~~$46,949~~$66,683 during the first ~~six~~nine months of 2005. The table below sets forth loans outstanding, according to loan type, net of unearned income.


	June 30, 2005		December 31, 2004		September 30, 2005		December 31, 2004
Commercial, financial, agricultural	$	228,371	$	175,571	$	224,673	$	175,571
Lease financing		9,576		10,809		8,143		10,809
Real estate – construction		159,798		96,404		162,694		96,404
Real estate – 1-4 family mortgages		547,307		375,698		558,616		375,698
Real estate – commercial mortgages		556,694		395,048		570,849		395,048
Installment loans to individuals		90,645		87,950		83,722		87,950

Total loans, net of unearned income	$	1,592,391	$	1,141,480	$	1,608,697	$	1,141,480

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 ~~June~~September 30, 2005, we had no significant concentrations of loans other than those presented in the categories in the table above.

Intangible assets increased ~~$51,104~~$50,342 to ~~$101,528~~$100,766 at ~~June~~September 30, 2005 from $50,424 at December 31, 2004. The increase reflects ~~$47,547,~~$47,253, $4,590 and $634 of goodwill, core deposits intangible, and noncompete agreements, respectively, recorded on January 1, 2005 in connection with the acquisition of Heritage. The core deposits intangible and noncompete agreements are being amortized over their estimated useful lives of ten and five years, respectively.

Other assets increased ~~$25,327~~$29,929 from $65,726 at December 31, 2004 to ~~$91,053~~$95,655 at ~~June~~September 30, 2005. This increase is primarily attributable to the Heritage acquisition. The increase also includes increases in Bank Owned Life Insurance, deferred tax assets and accrued interest receivable.

Total deposits increased ~~$445,500~~$499,641 to ~~$1,764,177~~$1,818,318 at ~~June~~September 30, 2005 from $1,318,677 on December 31, 2004. The acquisition of Heritage contributed total deposits of $380,998. Excluding Heritage’s deposits, deposits increased ~~$64,502,~~$118,643, or ~~4.89%~~9.00%, from December 31, 2004. Excluding the contribution to the deposit balances from the Heritage acquisition, the growth in deposits is primarily attributable to deposit generation in the Tennessee and Mississippi regions. Deposits in the ~~Tennessee~~Mississippi and ~~Mississippi~~Tennessee regions grew ~~$33,233~~$72,072 and ~~$24,042, repectively.~~$35,690, respectively, from the amounts at December 31, 2004. Deposits in Alabama grew $10,880 since December 31, 2004, which includes the intentional runoff of approximately $20 million in brokered deposits.

We continue to utilize advances from the Federal Home Loan Bank (“FHLB”) to fund our loan portfolio. In order to mitigate interest rate risk, long term fixed rate loans have been match-funded with FHLB borrowings. Advances

from the FHLB increased ~~$146,543~~$93,041 to ~~$256,299~~$202,797 at ~~June~~September 30, 2005 compared to $109,756 at December 31, 2004. The acquisition of Heritage increased our FHLB advances by $91,135. At ~~June~~September 30, 2005, the weighted average maturity of the long-term portion of our FHLB advances was 2 years and 910 months while the weighted average interest rate was ~~3.69%~~3.76%.

During January 2005, we formed PHC Statutory Trust II for the purpose of issuing corporation-obligated mandatory redeemable capital securities to third-party investors and investing the proceeds from the sale of such capital securities solely in floating rate junior debentures of the Company. The $31,959 issue provided us funds for the cash portion of the Heritage acquisition. The 30-year junior subordinated debentures pay interest quarterly equal to the three month LIBOR plus 187 basis points. In connection with the Heritage acquisition, we assumed $10,310 in fixed-rate junior subordinated debentures issued by Heritage. These junior subordinated debentures have similar characteristics to our debentures and, as such, qualify as Tier 1 capital for regulatory purposes.

Shareholders’ equity increased ~~$56,412,~~$58,169, or ~~31.51%~~32.49%, to ~~$235,454~~$237,211 at ~~June~~September 30, 2005 compared to $179,042 at December 31, ~~2004, primarily as a result of the~~2004. The Heritage acquisition ~~which~~ increased shareholders’ equity by $51,415. Other factors contributing to the change in capital include current year earnings ~~and unrealized security portfolio gains~~ offset by treasury stock purchases and dividends.

Results of Operations – ~~Second~~Third Quarter of 2005 as Compared to the ~~Second~~Third Quarter of 2004

Net income for the three month period ended ~~June~~September 30, 2005 was ~~$6,207,~~$6,325, an increase of ~~$1,150~~$1,634, or ~~22.74%~~34.83%, from net income of ~~$5,057~~$4,691 for the same period in 2004. Basic earnings per share were ~~$.60~~$.61 and diluted earnings per share were ~~$.59~~$.60 for the three month period ended ~~June~~September 30, 2005, as compared to basic and diluted earnings per share of ~~$.61~~$.52 for the comparable period a year ago. ~~The acquisitions of Renasant Bancshares and Heritage combined had a $.02 per share dilutive impact on earnings for the second half of 2005.~~

Net income for the second quarter of 2005 was increased by $647, or $.06 per share, in after-tax interest income as the cash flows from certain loans acquired in connection with the Company’s acquisition of Heritage, accounted for under AICPA Statement of Position 03-3 (“SOP 03-3”), exceeded initial estimates. This was offset by $295, or $.03 per share, in after-tax merger expenses related to the Heritage acquisition and after-tax expenses related to the name change. Net income for the second quarter of 2004 was increased by an after-tax gain of $617, or $.08 per share, recognized in connection with the sale of the Company’s merchant card business.

The annualized return on average assets and the annualized return on average equity are presented in the table below:


	Three Months Ended June 30,				Three Months Ended September 30,
	2005		2004		2005		2004
Return on average assets	1.06	%	1.40	%	1.07	%	1.12	%
Return on average tangible assets	1.17		1.43		1.17		1.21

Return on average equity	10.64		14.02		10.57		10.49
Return on average tangible equity	19.85		14.77		19.44		15.51

The annualized returns on average tangible assets and average tangible equity exclude the effects of intangible assets and related amortization expenses.

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. While the current interest rate environment has been unfavorable for net interest income, several factors have lessened the impact on the Company of the interest rate environment, including growth in variable-rate loans, risk-based loan pricing, and a shift from time deposits to less costly transaction deposits.

Net interest income for the three month periods ended ~~June~~September 30, 2005 and 2004 was ~~$20,455~~$19,739 and ~~$12,547,~~$15,003, respectively. On a tax equivalent basis, net interest margin for the three month period ended ~~June~~September 30, 2005 ~~increased 4~~decreased 22 basis points to ~~4.14%~~3.94% from ~~4.10%~~4.16% for the comparable period in 2004. Net interest income for the ~~second~~third quarter of 2005 includes ~~$1,048~~$99 in interest income as cash flows from certain Heritage loans accounted for under American Institute of Certified Public Accountants Statement of Position 03-3 (“SOP ~~03-3~~03-03”) exceeded initial estimates. This additional interest income increased net interest margin for the quarter by 202 basis points. Factors

negatively impacting our net interest margin for the quarter include the ~~acquisitions~~acquisition of ~~Renasant Bancshares and~~ Heritage, ~~both of~~ which had a lower net ~~margins~~margin than ours prior to the ~~acquisitions,~~acquisition, the issuance of ~~subordinate~~subordinated debentures to fund ~~the acquisitions~~that acquisition and the rising costs of deposits.

Interest income grew ~~81.67%~~55.81% to ~~$31,900~~$32,417 for the ~~second~~third quarter of 2005 from ~~$17,559~~$20,805 for the same period in 2004. The growth in interest income was driven by volume, as the average balance of interest earning assets at ~~June~~September 30, 2005 increased ~~$750,179~~$567,572 as compared to the same period in 2004. The acquisition of Heritage contributed interest income of $8,545 for the third quarter of 2005. During this same period, the tax equivalent yield on earning assets increased 7267 basis points to 6.36%. The increase in the average balance of earning assets was primarily due to the acquisitions of Renasant Bancshares and Heritage. These acquisitions contributed interest income of $3,408 and $8,207, respectively, for the second quarter of 2005. As discussed in the preceding paragraph, interest income includes $1,048 which we realized as a result of improved cash flows on certain Heritage loans accounted for under SOP 03-3. The majority of the interest income attributable to these Heritage loans resulted from a negotiated settlement with a guarantor on a single loan.

Interest expense increased ~~$6,433~~$6,876 to ~~$11,445~~$12,678 for the three months ended ~~June~~September 30, 2005 as compared to ~~$5,012~~$5,802 for the same period in 2004. Interest expense increased as a result of several factors. The ~~acquisitions~~acquisition of ~~Renasant Bancshares and~~ Heritage increased the average balance of interest bearing deposits by ~~$185,404 and $341,398, respectively.~~$353,967. In connection with ~~both acquisitions,~~the acquisition, the Company issued junior subordinated debentures and ~~in connection with the Heritage acquisition,~~ assumed Heritage’s outstanding junior subordinated debentures. ~~The rising cost of deposits also increased~~Interest expense for the three month period ending September 30, 2005 includes $994 in interest ~~expense.~~expense on the subordinated debentures issued and assumed in connection with the Renasant Bancshares and Heritage acquisitions compared to $232 for the same period last year. The cost of interest bearing deposits increased 5380 basis points to ~~2.15%~~2.39% for the ~~second~~third quarter of 2005 compared to ~~1.62%~~1.59% for the same period in 2004. Overall, the cost of interest-bearing liabilities increased to ~~2.48%~~2.70% for the ~~second~~third quarter of 2005 from ~~1.80%~~1.77% for the same period in 2004.

See Note 2, “Significant Accounting Policies,” to the Condensed Consolidated Financial Statements for discussion and analysis of the Company’s mortgage loans held for sale portfolio and recognition of related income.

Noninterest income was ~~$9,951~~$10,244 for the three month period ended ~~June~~September 30, 2005 compared to ~~$9,119~~$8,378 for the same period in 2004, an increase of ~~9.12%~~22.27%. For the three month period ended ~~June~~September 30, 2005, ~~Renasant Bancshares and~~ Heritage contributed ~~$199 and $1,548, respectively,~~$1,640 to noninterest income. Excluding the noninterest income contributed by Renasant Bancshares and Heritage, noninterest income in the second quarter of 2005 decreased from the corresponding period in 2004 on account of the $1,000 recognized in the second quarter of 2004 from the Company’s sale of its merchant card business, described in more detail below.

Service charges on deposits were ~~$4,167~~$4,358 for the ~~second~~third quarter of 2005, an increase of ~~$435,~~$291, or ~~11.66%~~7.16%, over ~~$3,732~~$4,067 for the same period in 2004. Service charges represent the largest component of noninterest income. Overdraft fees were ~~$3,509~~$3,714 for the three month period ended ~~June~~September 30, 2005, an increase of ~~$283,~~$1,529, or ~~8.77%~~69.98%, compared to the same period in 2004. This increase is ~~also~~primarily attributed to non-public transaction deposit growth. The fee charged to customers for insufficient funds remained the same throughout 2004 and 2005.

Fees and commissions were ~~$2,965~~$2,853 and ~~$1,958~~$1,975 for the three month periods ended ~~June~~September 30, 2005 and 2004, respectively. For the three month period ended ~~June~~September 30, 2005, mortgage loan fees (application and origination fees) were ~~$1,164~~$1,101 compared to ~~$344,~~$326 for the same period of 2004. This increase primarily resulted from the mortgage loan business acquired in connection with the Heritage transaction.

The Financial Services division of the Company focuses on providing specialized products and services to our customers. Specialized products include fixed and variable annuities, mutual funds, and stocks offered through a third party provider. Fixed annuities consist of a line of twelve products. We use six insurance carriers, all of which have an A. M. Best rating of an “A” or better. Mutual funds offered by the Company originate primarily from five fund families. Revenues generated from the sale of these products totaled ~~$211~~$223 for the ~~second~~third quarter of 2005 compared to ~~$150~~$195 for the same period in 2004. Revenues from these products are reported in the Condensed Consolidated Statements of Income in the account line “Fees and commissions.”

Our emphasis on specialized products and services is designed to better serve the needs of our clients. The trust department within the Financial Services division operates on a custodial basis which includes administration of

benefit plans, 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. Trust revenue for the ~~second~~third quarter of 2005 was ~~$611~~$613 as compared to ~~$606~~$658 for the same period of 2004. The market value of assets under management as of ~~June~~September 30, 2005 was ~~$431,906~~$440,814 an increase of approximately ~~15.94%~~27.76% from the prior year.

Gains from sales of mortgage loans increased to $766 for the three months ended September 30, 2005 compared to $138 for the same period in 2004. The increase in gains from sales of mortgage loans is due to the increase in mortgage loan volumes attributable to Heritage’s mortgage loan business.

Noninterest expense was $20,564 for the three month period ended September 30, 2005 compared to $16,210 for the same period in 2004, an increase of $4,354. The operations of Heritage increased noninterest expenses by $4,261.

Salaries and employee benefits for the three month period ended September 30, 2005 were $11,696, which is $2,941 greater than the same period last year. The acquisition of Heritage increased salaries and employee benefits by $1,869 for the three month period ended September 30, 2005. The balance of the increase in salaries and employee benefits is due to normal salary increases which were effective March 2005.

Data processing costs for the three month period ended September 30, 2005 were $966, a decrease of $54 compared to the same period last year. The decrease resulted from continued efficiencies in our back office processing and lower costs as a result of renegotiating our contract with our primary vendor. Net occupancy expense and equipment expense for the three month period ended September 30, 2005 increased $125 to $2,220 over the comparable period for the prior year primarily due to additional depreciation and expenses related to assets obtained in connection with our acquisitions of Heritage and our de novo branches.

Amortization of intangible assets increased to $557 for the three months ended September 30, 2005 compared to $403 for the same period in 2004. The increase is due to the amortization of the finite-lived intangible assets recorded as a result of the Heritage acquisition. These intangible assets are being amortized over their estimated useful lives, which range between five and ten years.

Noninterest expense as a percentage of average assets was 3.47% for the three month period ended September 30, 2005 and 3.86% for the comparable period in 2004. We anticipate a continued positive impact on future noninterest expense through our investments in personnel, technology, and programs such as High Performance Checking. The net overhead ratio was 1.74% and 1.88% for the third quarter of 2005 and 2004, respectively. The net overhead ratio is defined as noninterest expense less noninterest income, expressed as a percent of average assets. Our efficiency ratio decreased to 66.73% for the three month period ended September 30, 2005 compared to 67.22% for the same period of 2004. The improvements in the net overhead and efficiency ratios were due to operating efficiencies and income opportunities provided in our new markets of Tennessee and Alabama.

Income tax expense was $2,261 for the three month period ended September 30, 2005 (with an effective tax rate of 26.33%), compared to $1,844 (with an effective tax rate of 28.21%) for the same period in 2004. We continue to seek investing opportunities in assets whose earnings are given favorable tax treatment.

Results of Operations – Nine Months Ended September 30, 2005 as Compared to the Nine Months Ended September 30, 2004

Net income for the nine month period ended September 30, 2005 was $17,991, an increase of $3,596, or 24.98%, from net income of $14,395 for the same period in 2004. Basic earnings per share were $1.73 and diluted earnings per share were $1.71 for the nine month period ended September 30, 2005 as compared to basic and diluted earnings per share of $1.70 for the comparable period a year ago.

Net income in the nine months ended September 30, 2005 was increased by $708, or $.07 per diluted share, in after-tax interest income as the cash flows from certain loans acquired in connection with the Company’s acquisition of Heritage accounted for under SOP 03-3 exceeded initial estimates. This was offset by $699, or $.06 per diluted share, in after-tax merger expenses related to the Heritage acquisition and expenses associated with the change of the Company’s name. Net income in the nine months ended September 30, 2004 was increased by an after-tax gain of $617, or $.08 per diluted share, recognized in connection with the sale of the Company’s merchant card business.

The annualized return on average assets and the annualized return on average equity are presented in the table below:

The annualized returns on average tangible assets and average tangible equity exclude the effects of intangible assets and related amortization expenses.

Net interest income for the nine month periods ended September 30, 2005 and 2004 was $59,512 and $40,000, respectively. On a tax equivalent basis, net interest margin for the nine month period ended September 30, 2005 declined to 4.02% from 4.12% for the comparable period in 2004. The decline in our margin is primarily due to the acquisitions of Renasant Bancshares and Heritage, both of which had lower net margins than the Company.

Interest income grew 67.32% to $93,612 for the nine month period ended September 30, 2005 from $55,948 for the same period in 2004. The growth in interest income was driven by volume, as the average balance in interest earning assets for September 30, 2005 increased $684,913 as compared to the same period in 2004, while the tax equivalent yield on earning assets increased 57 basis points to 6.24%. The increase in the average balance of earning assets was primarily due to the acquisitions of Renasant Bancshares and Heritage. These acquisitions contributed interest income of $10,991 and $23,117, respectively, for the first nine months of 2005.

Interest expense increased $18,152 to $34,100 for the nine months ended September 30, 2005 as compared to $15,948 for the same period in 2004. Interest expense increased as a result of several factors. The acquisitions of Renasant Bancshares and Heritage increased the average balance of interest bearing deposits by $182,034 and $345,641, respectively. Interest expense for the nine month period ending September 30, 2005 also includes $2,772 in interest expense on the subordinated debentures issued and assumed in connection with the acquisitions compared to $689 for the same period last year. The cost of interest bearing deposits increased 52 basis points to 2.15% for the nine months ended September 30, 2005 compared to 1.63% for the same period in 2004. Overall, the cost of interest-bearing liabilities increased to 2.46% for the first nine months of 2005 from 1.80% for the same period in 2004.

Noninterest income was $30,098 for the nine month period ended September 30, 2005 compared to $25,668 for the same period in 2004, an increase of 17.26%. For the nine month period ended September 30, 2005, Renasant Bancshares and Heritage contributed $511 and $4,755, respectively, to noninterest income.

Service charges on deposits were $12,399 for the first nine months of 2005, an increase of $900, or 7.83%, over $11,499 for the nine month period ended September 30, 2004. Overdraft fees were $10,431 for the nine month period ended September 30, 2005, an increase of $1,016, or 10.79%, compared to the same period in 2004. This increase is attributed to non-public transaction deposit growth. The fee charged for insufficient funds remained the same throughout 2004 and 2005.

Fees and commissions were $8,323 and $5,604 for the nine month periods ended September 30, 2005 and 2004, respectively. For the nine month period ended September 30, 2005, mortgage loan fees (application and origination fees) were $3,147 compared to $967, for the same period of 2004. This increase primarily resulted from the acquisition of the mortgage loan business in connection with our acquisition of Heritage.

Revenues generated from the sale of specialized products by the Financial Services division, such as fixed and variable annuities, mutual funds, and stocks offered through a third party provider, totaled $683 for the first nine months of 2005 compared to $543 for the same period in 2004. Trust revenue for the first nine months of 2005 was $1,849 as compared to $1,728 for the same period of 2004.

Gains from sales of mortgage loans increased to ~~$673~~$2,132 for the ~~three~~nine months ended ~~June~~September 30, 2005 compared to ~~$151~~$417 for the same period in 2004. The increase in gains from sales of mortgage loans is due to the increase in mortgage loan volumes attributable to Heritage’s mortgage loan business.

Revenues from merchant discounts decreased ~~$268 from $270~~$627 for the ~~three~~nine months ended ~~June~~September 30, ~~2004 as compared to~~2005 from $633 for the same period in 2005. ~~In the second quarter of~~During 2004, we recognized a $1,000 gain when we sold our interest in and rights to future revenue on credit card merchant agreements involving point of sale based credit card, debit card and other card-based transaction processing services, electronic payment and settlement services to Nova Information Systems, Inc. (“Nova”). As such, we will no longer continue to receive merchant discount revenue. We will receive referral fees from Nova, although such fees will ~~likely~~ be significantly less than our merchant discount revenue.

Noninterest expense was $20,857 for the three month period ended June 30, 2005, compared to $14,182 for the same period in 2004, an increase of $6,675. The operations of Renasant Bancshares and Heritage increased noninterest expenses by $5,739, including $404 of Heritage merger related expenses incurred in connection with the Heritage acquisition.

Salaries and employee benefits for the three month period ended June 30, 2005, were $11,520, or $3,568 greater than the same period last year. The acquisition of Renasant Bancshares and Heritage increased salaries and employee benefits by $3,040 for the three month period ended June 30, 2005. The balance of the increase in salaries and employee benefits is due to normal salary increases which were effective March 2005.

Data processing costs for the three month period ended June 30, 2005 were $962, a decrease of $179 compared to the same period last year. The decrease resulted from continued efficiencies in our back office processing and lower costs as a result of renegotiating our contract with our primary vendor. Net occupancy expense and equipment expense for the three month period ended June 30, 2005 increased $315 and $180, respectively, to $1,181 and $1,041, respectively, over the comparable period for the prior year, primarily due to additional depreciation and expenses related to assets obtained in connection with our acquisitions of Renasant Bancshares and Heritage and our de novo branches.

Amortization of intangible assets increased to $571 for the three months ended June 30, 2005 compared to $100 for the same period in 2004. The increase is due to the amortization of the finite-lived intangible assets recorded as a result of the Renasant Bancshares and Heritage acquisitions. These intangible assets are being amortized over their estimated useful lives, which range between five and ten years.

In April 2005, our shareholders ratified the change of our name from The Peoples Holding Company to Renasant Corporation. As a result of the name change of the Company, we incurred approximately $73 in costs resulting from the disposal of obsolete supplies.

Noninterest expense as a percentage of average assets was 3.57% for the three month period ended June 30, 2005, and 3.94% for the comparable period in 2004. We anticipate a continued positive impact on future noninterest expense through our investments in personnel, technology, and programs such as High Performance Checking. The net overhead ratio was 1.86% and 1.68% for the second quarter of 2005 and 2004, respectively. The net overhead ratio is defined as noninterest expense less noninterest income, expressed as a percent of average assets. Our efficiency ratio increased to 66.80% for the three month period ended June 30, 2005, compared to 62.96% for the same period of 2004. The net overhead and efficiency ratios were negatively impacted by the merger costs and costs associated with the name change. We anticipate improvements in these ratios as we improve our operating efficiencies and take advantage of the income opportunities provided in our new markets of Tennessee and Alabama.

Income tax expense was $2,495 for the three month period ended June 30, 2005 (with an effective tax rate of 28.67%), compared to $1,939 (with an effective tax rate of 27.72%) for the same period in 2004. We continue to seek investing opportunities in assets whose earnings are given favorable tax treatment.

~~Results of Operations – Six Months Ended June 30, 2005 as Compared to the Six Months Ended June 30, 2004~~

Net income for the six month period ended June 30, 2005 was $11,666, an increase of $1,962, or 20.22%, from net income of $9,704 for the same period in 2004. Basic earnings per share were $1.12 and diluted earnings per share were $1.11 for the six month period ended June 30, 2005 as compared to basic and diluted earnings per share of $1.18 for the comparable period a year ago.

Net income in the six months ended June 30, 2005 increased $647, or $.06 per diluted share, due to the aforementioned recognition of interest income under SOP 03-3 and decreased $699, or $.06 per diluted share, due to after-tax merger expenses and name change expenses. Net income in the six months ended June 30, 2004 increased $617, or $.08 per diluted share, as a result of the aforementioned gain from the sale of the Company’s merchant card business.

~~The annualized return on average assets and the annualized return on average equity are presented in the table below:~~

~~The annualized returns on average tangible assets and average tangible equity exclude the effects of intangible assets and related amortization expenses.~~

Net interest income for the six month periods ended June 30, 2005 and 2004 was $39,773 and $24,997, respectively. On a tax equivalent basis, net interest margin for the six month period ended June 30, 2005 declined to 4.04% from 4.09% for the comparable period in 2004. The decline in our margin is primarily due to the acquisitions of Renasant Bancshares and Heritage, both of which had lower net margins than the Company.

Interest income grew 74.13% to $61,195 for the six month period ended June 30, 2005 from $35,143 for the same period in 2004. The growth in interest income was driven by volume, as the average balance in interest earning assets for June 30, 2005 increased $744,792 as compared to the same period in 2004, while the tax equivalent yield on earning assets increased 49 basis points to 6.14%. The increase in the average balance of earning assets was primarily due to the acquisitions of Renasant Bancshares and Heritage. These acquisitions contributed interest income of $6,573 and $14,979, respectively, for the first six months of 2005.

Interest expense increased $11,276 to $21,422 for the six months ended June 30, 2005 as compared to $10,146 for the same period in 2004. Interest expense increased as a result of several factors. The acquisitions of Renasant Bancshares and Heritage increased the average balance of interest bearing deposits by $174,792 and $341,832, respectively. The rising cost of deposits also increased interest expense. The cost of interest bearing deposits increased 37 basis points to 2.02% for the six months ended June 30, 2005 compared to 1.65% for the same period in 2004. Overall, the cost of interest-bearing liabilities increased to 2.34% for the first half of 2005 from 1.82% for the same period in 2004.

Noninterest income was $19,854 for the six month period ended June 30, 2005 compared to $17,290 for the same period in 2004, an increase of 14.83%. For the six month period ended June 30, 2005, Renasant Bancshares and Heritage contributed $368 and $2,998, respectively, to noninterest income. As discussed earlier, excluding Heritage, our noninterest income for the six months ended June 30, 2005 decreased compared to the same period in 2004 on account of the sale of our merchant card business in the second quarter of 2004.

Service charges on deposits were $8,041 for the first six months of 2005, an increase of $609, or 8.19%, over $7,432 for the six month period ended June 30, 2004. Overdraft fees were $6,717 for the six month period ended June 30, 2005, an increase of $513, or 8.27%, compared to the same period in 2004. This increase is attributed to non-public transaction deposit growth. The fee charged for insufficient funds remained the same throughout 2004 and 2005.

Fees and commissions were $5,470 and $3,629 for the six month periods ended June 30, 2005 and 2004, respectively. For the six month period ended June 30, 2005, mortgage loan fees (application and origination fees) were $2,045 compared to $641, for the same period of 2004. This increase primarily resulted from the acquisition of the mortgage loan business obtained in connection with our acquisition of Heritage.

Revenues generated from the sale of specialized products by the Financial Services division, such as fixed and variable annuities, mutual funds, and stocks offered through a third party provider, totaled $460 for the first six months of 2005 compared to $348 for the same period in 2004. Trust revenue for the first six months of 2005 was $1,236 as compared to $1,070 for the same period of 2004.

Gains from sales of mortgage loans increased to $1,366 for the six months ended June 30, 2005 compared to $279 for the same period in 2004. The increase in gains from sales of mortgage loans is due to the increase in mortgage loan volumes attributable to Heritage’s mortgage loan business.

Other noninterest income includes contingency income related to our insurance subsidiary, which was $370 for the ~~six~~nine month period ended ~~June~~September 30, 2005 as compared to $362 for the same period of 2004. Contingency income is based on both the premium volume with each individual insurance company and the amount of claims paid from each of those companies. Income fluctuates if the claims experience changes from year to year. Also included in other noninterest income is $264, representing our share of proceeds from the sale of the Pulse network to Discover during the first quarter of 2005.

Noninterest expense was ~~$41,820~~$62,383 for the ~~six~~nine month period ended ~~June~~September 30, 2005 compared to ~~$27,868~~$44,078 for the same period in 2004, an increase of ~~$13,952.~~$18,305. The operations of Renasant Bancshares and Heritage increased noninterest expenses by ~~$12,004,~~$19,044, including $803 of ~~Heritage~~ merger related expenses related to our acquisition of Heritage.

Salaries and employee benefits for the ~~six~~nine month period ended ~~June~~September 30, 2005 were ~~$22,979, or $7,434~~$34,675, which is $10,023 greater than the same period last year. The ~~acquisition~~acquisitions of Renasant Bancshares and Heritage increased salaries and employee benefits by ~~$6,187~~$9,634 for the ~~six~~nine month period ended ~~June~~September 30, 2005. The balance of the increase in salaries and employee benefits over the nine month period is due to duplicate staff at our headquarters and in our Alabama operations needed to facilitate the consolidation of back office functions related to the Heritage merger, strategic hiring of commercial lending and wealth management personnel in our new markets, normal salary increases which went into effect March 2005 and increases in health care and pension costs. The duplicate positions to facilitate the back office consolidation were eliminated early in the second quarter of 2005.

Data processing costs for the ~~six~~nine month period ended ~~June~~September 30, 2005 were ~~$2,006,~~$2,972, a decrease of ~~$298~~$352 compared to the same period last year. The decrease resulted from continued efficiencies in our back office processing. Net occupancy expense and equipment expense for the ~~six~~nine month period ended ~~June~~September 30, 2005 increased ~~$1,075~~$1,526 and ~~$459,~~$133, respectively, to ~~$2,796~~$4,253 and ~~$2,031,~~$2,794, respectively, over the comparable period for the prior year, primarily due to additional depreciation and expenses related to Renasant Bancshares and Heritage and our de novo branches.

Amortization of intangible assets increased to ~~$1,157~~$1,714 for the ~~six~~nine months ended ~~June~~September 30, 2005 compared to ~~$223~~$626 for the same period in 2004. The increase is due to the amortization of the finite-lived intangible assets recorded as a result of the Renasant Bancshares and Heritage acquisitions. These intangible assets are being amortized over their estimated useful lives, which range between 5-10 years.

During 2005, we changed the name of our subsidiary bank, The Peoples Bank & Trust Company, to Renasant Bank, and our insurance agency, The Peoples Insurance Agency, to Renasant Insurance, Inc. In addition, we changed our name to Renasant Corporation. As a result of the name change, we incurred approximately $334 in marketing, legal and printing costs during the first ~~six~~nine months of 2005.

Noninterest expense as a percentage of average assets was ~~3.60%~~3.56% for the ~~six~~nine month period ended ~~June~~September 30, 2005 and 3.87% for the comparable period in 2004. The net overhead ratio was ~~1.90%~~1.85% and ~~1.61%~~1.63% for the first ~~six~~nine months of 2005 and 2004, respectively. Our efficiency ratio increased to ~~68.58%~~67.73% for the ~~six~~nine month period ended ~~June~~September 30, 2005 compared to ~~63.33%~~64.71% for the same period of 2004. The net overhead and efficiency ratios for 2005 were negatively impacted by the merger costs and costs associated with the name change.

Income tax expense was ~~$4,697~~$6,958 for the ~~six~~nine month period ended ~~June~~September 30, 2005 (with an effective tax rate of ~~28.71%~~27.89%) compared to ~~$3,722~~$5,566 (with an effective tax rate of ~~27.72%~~27.88%) for the same period in 2004.

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 adequate to meet the inherent risks of losses on our current portfolio of loans. The appropriate level of the allowance is based on a quarterly analysis of the loan portfolio which includes consideration of such factors as the risk rating of individual credits, the size and diversity of the portfolio, economic conditions, prior loss experience, and the results of periodic credit reviews by internal loan review and regulators.

~~Credit~~We maintained our credit quality ~~continued to improve during~~in the ~~first half~~third quarter of 2005. ~~Accruing~~Nonperforming assets as a percentage of total assets at September 30, 2005 decreased to .58% as compared to .60% at September 30, 2004. Nonperforming loans (accruing loans past due 90 days or more and nonaccrual loans) as a percentage of total loans were ~~.14%~~.45% and ~~.20%~~.68% at ~~June~~September 30, 2005 and 2004, ~~respectively, while nonaccrual loans as a percentage of total loans were .26% and .61% for the same periods,~~ respectively. Nonaccrual loans at ~~June~~September 30, 2005, were ~~$4,157,~~$3,803, down ~~$1,409~~$1,823 as compared to the balance at ~~June~~September 30, 2004. As disclosed in previous filings with the Securities and Exchange Commission, one large credit relationship had previously represented over one-half of our nonaccrual loans. In the first quarter of 2005, we foreclosed on the collateral securing this relationship. As a result, the nonaccrual balance was reduced $4,129 as we brought to final resolution this one problem credit relationship. The ~~$5,213~~$4,130 increase in other real estate owned and repossessions was primarily a result of the foreclosure. The acquisition of Heritage increased the ~~June~~September 30, 2005 nonaccrual loan and other real estate owned balances by ~~$902~~$820 and ~~$1,557,~~$1,240, respectively. However, the majority of the loans accounted for in accordance with SOP 03-3 are not included in nonperforming loans at September 30, 2005.

The provision for loan losses was ~~$847~~$833 and ~~$488~~$636 for the three months ended ~~June~~September 30, 2005 and 2004, respectively. For the ~~second~~third quarter of 2005, net charge-offs were ~~$781,~~$465, or ~~.19%~~.11% annualized as a percentage of average loans. Net charge-offs for the same period in 2004 were ~~$610,~~$324, or ~~.28% annualized as a percentage of average loans.~~.12% annualized. The provision for loan losses for the ~~six~~nine month period ended ~~June~~September 30, 2005 and 2004 was ~~$1,444~~$2,278 and ~~$993,~~$1,629, respectfully. Net charge-offs for the first ~~half~~nine months of 2005 were ~~$1,967,~~$2,431, or ~~.25%~~.20% annualized as a percentage of loans. Net charge-offs for the same period in 2004 were ~~$1,073,~~$1,397, or ~~.24% annualized as a percentage of loans.~~.19% annualized. The foreclosure on the collateral securing the one credit relationship, as discussed in more detail in the preceding paragraph, resulted in charge-offs of ~~$301 and~~ $906 for the ~~three and six~~nine months ended ~~June~~September 30, ~~2005, respectively.~~2005. Excluding the charge-offs related to this one credit, net charge-offs as a percentage of average loans were ~~.12% and~~ .13% for the ~~three and six~~nine months ended ~~June~~September 30, ~~2005, respectively.~~2005. All amounts charged-off related to this one credit relationship had been fully reserved in the allowance for loan losses.

In determining the amount of provision to charge to operations, management considers the risk rating of individual credits, the size and diversity of the loan portfolio, current trends in net charge-offs, trends in non-performing loans, trends in past due loans and current economic conditions in the markets in which we operate.

~~There have been no material changes in assumptions or estimation techniques as compared to prior periods that have impacted the determination of the current period allowance for loan losses.~~ The allowance for loan losses as a percentage of loans was ~~1.14%~~1.15% at the ~~June~~September 30, 2005 as compared to 1.26% at December 31, 2004. The reduction of the allowance for loan losses as a percentage of loans was caused by our improved credit quality and growth in the loan portfolio. SOP 03-3 prohibits the carryover of an allowance for loan loss for loans acquired in which the acquirer concludes that the acquirer will not collect the contractual payments. ~~As such, certain~~Certain loans acquired ~~loans had~~as a part of our acquisition of Heritage experienced credit deterioration since date of origination to the date of acquisition. These loans, which had an outstanding balance of $18,839 at the date of acquisition, are now carried at a balance which management believes, based on the facts and circumstances surrounding each respective loan at the date of acquisition, represents their future cash flows. We continually monitor these loans as part of our normal credit review and monitoring procedures for changes in the estimated

future cash flows. At ~~June~~September 30, 2005, the carrying balance of these loans was ~~$10,604,~~$9,617, down ~~$2,493~~$987 from the carrying balance at ~~March 31, 2005.~~June 30, 2005, primarily related to principal reductions.

The table below presents information and ratios regarding loans, net charge-offs, the allowance for loan losses and nonperforming loans.

The table below presents net charge-offs by loan type for the three and ~~six~~nine month periods ending ~~June~~September 30, 2005 and 2004:


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended September 30,					Nine Months Ended September 30,
	2005		2004		2005		2004		2005			2004		2005		2004
Commercial, financial, agricultural	$	105	$	310	$	270	$	688	$	127		$	46	$	397	$	734
Lease financing		—		—		—		—		—			—		—		—
Real estate – construction		17		—		115		—		(2	)		—		113		—
Real estate – 1-4 family mortgages		537		207		1,154		261		269			141		1,422		402
Real estate – commercial mortgages		20		31		104		31		37			32		141		63
Installment loans to individuals		102		62		324		93		34			105		358		198

Total loans, net of unearned income	$	781	$	610	$	1,967	$	1,073	$	465		$	324	$	2,431	$	1,397

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 ~~June~~September 30, 2005, and December 31, 2004:


	June 30, 2005		December 31, 2004		September 30, 2005		December 31, 2004
Specific reserves	$	2,484	$	2,786	$	5,056	$	2,786
Allocated reserves based on loan grades		15,596		11,617		13,392		11,617
Unallocated reserves		—		—		—		—

Total reserves	$	18,080	$	14,403	$	18,448	$	14,403

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. 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. We constantly monitor our funds position and evaluate the effect various funding sources have on our financial position.

Deposits are our primary source of funds used to meet cash flow needs. While we do not control the types of deposit instruments our clients choose, we do influence those choices with the rates we offer and with the deposit ~~specials~~products we offer. Understanding the competitive pressures on deposits is key to maintaining the ability to acquire and retain these funds in a variety of markets. When evaluating the movement of these funds, even during large interest rate changes, it is ~~apparent~~essential that we continue to attract deposits that can be used to meet cash flow needs. Management continues to monitor the liquidity and volatility liabilities ratios to ensure compliance with Asset-Liability Committee targets.

For the ~~six~~nine months ended ~~June~~September 30, 2005, our total cost of funds, including noninterest bearing demand deposit accounts, was ~~2.08%~~2.19%, up from ~~1.59%~~1.58% for the same period in 2004. Noninterest bearing demand deposit accounts made up approximately ~~11.15%~~11.18% of our average total deposits and borrowed funds at ~~June~~September 30, 2005 as compared to ~~12.70%~~12.62% at ~~June~~September 30, 2004. Interest bearing transaction accounts, money market accounts and savings accounts made up approximately ~~31.81%~~32.29% of our funds and had an average cost of ~~1.02%~~1.16%, compared to ~~38.13%~~38.07% of the total with an average cost of ~~.88%~~.87% for the same period in 2004. Another significant source of funds was time deposits, making up ~~40.29%~~40.78% of the average total deposits and borrowed funds with an average cost of ~~2.81%~~2.93% for the ~~six~~nine months ended ~~June~~September 30, 2005, compared to ~~39.94%~~39.78% of the total with an average cost of ~~2.38%~~2.35% for the same period in 2004. FHLB advances, typically used for clients who prefer longer-term fixed rate loans, made up approximately ~~12.11%~~6.67% of our average total deposits and borrowed funds with an average cost of ~~3.21%~~3.42%, compared to ~~6.86%~~11.41% of the total with an average cost of ~~3.24%~~3.25% for the same period in 2004.

Our security portfolio is another alternative for meeting liquidity needs. These assets have readily available markets that offer conversions to cash as needed. Within the next twelve months the securities available for sale portfolio is forecasted to generate cash flow equal to approximately ~~9.50%~~13.90% of the carrying value of the total securities portfolio. Other sources available for meeting liquidity needs include federal funds purchased and advances from the FHLB. Interest is charged at the market federal funds rate on federal funds purchased and FHLB advances. Federal funds purchased at ~~June~~September 30, 2005 totaled ~~$5,366,~~$24,216, a decrease of ~~$46,134~~$27,284 from December 31, 2004. We reduced the amount of federal funds purchased by utilizing lower cost short-term FHLB advances. Funds obtained from the FHLB are used primarily to match-fund real estate loans in order to minimize interest rate risk and may be used to meet day to day liquidity needs. The total amount of remaining credit available to us from the FHLB was ~~$429,138.~~$477,696. As of ~~June~~September 30, 2005, our outstanding balance with the FHLB was ~~$256,299, of which $58,000 was short-term in nature.~~$202,797 compared to $109,756 at December 31, 2004. We also maintain lines of credits with other commercial banks totaling $35,000. These are unsecured lines of credit maturing at various times within the next twelve months. At ~~June~~September 30, 2005, there were no amounts outstanding under these lines of credits.

Cash and cash equivalents were ~~$97,040~~$105,898 at ~~June~~September 30, 2005 compared to $56,025 at December 31, 2004. Cash used in investing activities for the ~~six~~nine months ended ~~June~~September 30, 2005 was ~~$51,721,~~$70,149 compared to ~~$3,375~~$58,589 for the same period of 2004. The primary contribution to this increase was due to a net increase in loans of ~~$78,351~~$105,735 funded primarily by the proceeds from the sale and maturity of our investment portfolio of ~~$60,177.~~$83,013.

Cash provided by financing activities for the ~~six~~nine months ended ~~June~~September 30, 2005 was ~~$67,803,~~$82,722 compared to ~~$3,737~~$43,315 for the same period of 2004. Cash flows from the generation of deposits were $118,678 for the nine months ended September 30, 2005 compared to $17,745 for the same period in 2004. In January 2005, the Company issued $31,959 in junior subordinated debentures for the primary purpose of funding ~~for~~ the cash portion of the Heritage acquisition. Deposit growth and the issuance of the subordinated debentures primarily generated the cash provided by the financing activities.

The Company ~~acquired~~completed the acquisition of Renasant Bancshares on July 1, 2004. The aggregate transaction value, including ~~deal charges~~transaction expenses and the dilutive impact of Renasant Bancshares’ options and warrants assumed by the Company, was approximately $60,290. In accordance with the merger agreement, the Company delivered to Renasant Bancshares shareholders either cash, Company common stock, or a combination of cash and Company common stock in exchange for the shares of Renasant Bancshares common stock owned by a shareholder. The cash portion of the merger consideration was $26,128 and was funded with proceeds from the issuance of the junior subordinated debentures ~~under~~by the Company to PHC Statutory Trust I and a special dividend from Renasant Bank. The Company issued 802,094 shares of its common stock in the transaction, totaling approximately $27,720. These shares were registered under the Securities Act of 1933, as amended.

The Company completed the acquisition of Heritage on January 1, 2005. The aggregate transaction value, including ~~deal charges~~transaction expenses and the dilutive impact of Heritage’s options assumed by the Company, was approximately $75,658. In accordance with the merger agreement, the Company delivered to Heritage shareholders either cash, Company common stock, or a combination of cash and Company common stock in exchange for the shares of Heritage common stock owned by a shareholder. The cash portion of the merger consideration was $23,055 and was funded with proceeds from the issuance of $31,959 in junior subordinated debentures by the Company to PHC Statutory Trust II. The Company issued 1,369,589 shares of its common stock in the transaction, totaling approximately $45,333. These shares were registered under the Securities Act of 1933, as amended.

We are 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 our financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. Our 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 us 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). As of ~~June~~September 30, 2005, we met all capital adequacy requirements to which we are subject. As of

~~June~~ September 30, 2005, the most recent notification from the Federal Deposit Insurance Corporation categorized us as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, we must maintain minimum total risk-based, Tier I risk-based, and Tier I leverage ratios of 10%, 6%, and 5%, respectively. In the opinion of management, there are no conditions or events since the last notification that have changed our rating as well capitalized.

The following table includes our capital ratios and the capital ratios of our banking subsidiary as of ~~June~~September 30, 2005:


	Consolidated		Bank		Consolidated		Bank
Tier I Leverage (to average assets)	8.67	%	8.28	%	8.79	%	8.47	%
Tier I Capital (to risk-weighted assets)	11.38	%	10.86	%	11.68	%	11.26	%
Total Capital (to risk-weighted assets)	12.43	%	11.92	%	12.77	%	12.35	%

Management recognizes the importance of maintaining a strong capital base. As the above ratios indicate, we exceed the requirements for a well capitalized bank. The Company’s liquidity and capital resources are substantially dependent on the ability of ~~our~~Renasant Bank to transfer funds to the Company in the form of dividends, loans and advances. Please refer to the information under Part II Item 2, “Unregistered Sales of Securities and Use of Proceeds,” of this Quarterly Report on Form 10-Q for a discussion of the restrictions on Renasant Bank’s ability to transfer funds to the Company in the form of dividends, loans and advances.

Book value per share was ~~$22.64~~$22.85 and $19.79 at ~~June~~September 30, 2005 and December 31, 2004, respectively.

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, and equipment) is obtained based on management’s credit assessment of the customer.

The Company’s unfunded loan commitments (unfunded loans and unused lines of credit) and standby letters of credit outstanding at ~~June~~September 30, 2005 were approximately ~~$349,519~~$395,370 and ~~$20,985~~$23,641, respectively, compared to $219,087 and $15,468, respectively, at December 31, 2004.

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- or off-balance sheet financial instruments.

There have been no material changes to our disclosures about market risk since December 31, 2004. For additional information, see our Form 10-K for the year ended December 31, 2004.

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 timely alerting them to material information required to be included in our periodic SEC reports. There were no changes in the Company’s internal ~~controls~~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.

The following table summarizes the Company’s purchases of its own securities for the three month period ended ~~June~~September 30, 2005:

The Company’s ability to pay dividends to its shareholders is substantially dependent on the transfer from its subsidiary bank of sufficient funds to pay such dividends. Certain restrictions exist regarding the ability of Renasant Bank to transfer funds to the Company in the form of cash dividends, loans, or advances. The approval of the Mississippi Department of Banking and Consumer Finance is required prior to Renasant Bank paying dividends, which are limited to earned surplus in excess of three times capital stock. At ~~June~~September 30, 2005, the unrestricted surplus for Renasant Bank was approximately ~~$271,075.~~$275,667. Federal Reserve regulations also limit the amount Renasant Bank may loan to the Company unless such loans are collateralized by specific obligations. At ~~June~~September 30, 2005, the maximum amount available for transfer from Renasant Bank to the Company in the form of loans was ~~$20,308.~~$20,881. There were no loans outstanding from Renasant Bank to the Company at ~~June~~September 30, 2005.

The Annual Meeting of shareholders of Renasant Corporation was held on April 19, 2005. Proxies were solicited pursuant to Section 14(a) of the Securities Exchange Act of 1934, as amended, and there was no solicitation in opposition to the Company’s solicitations.

~~Proposals 1, 2, and 3 related to the election of directors. All of the Company’s nominees for directors as listed in the proxy statement were elected with the following vote:~~

~~The term of office of each of the following directors continued at the 2005 Annual Meeting:~~

~~John M. Creekmore, E. Robinson McGraw, Theodore S. Moll, John W. Smith and J. Larry Young.~~

Other proposals were acted upon at the 2005 Annual Meeting. Each of these proposals was approved by the shareholders. The following table sets forth a brief description of each proposal and the results of the voting on these proposals acted upon at the 2005 Annual Meeting:

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.


PART 1. FINANCIAL INFORMATION

Item 1

Condensed Consolidated Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets – ~~June~~September 30, 2005 and December 31, 2004

Condensed Consolidated Statements of Income - Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2005 and 2004

Condensed Consolidated Statements of Cash Flows – ~~Six~~Nine Months Ended ~~June~~September 30, 2005 and 2004

Notes to Condensed Consolidated Financial Statements

Item 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3

Quantitative and Qualitative Disclosures About Market Risk

Item 4

Controls and Procedures

PART II. OTHER INFORMATION

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

Item 6

Exhibits

SIGNATURES

EXHIBIT INDEX


Commercial	$	13,133
Consumer		120
Mortgage		907

Total outstanding balance	$	14,160

Total carrying amount	$	10,604


	~~Accretable~~ ~~Yield~~
~~Balance at January 1, 2005~~	—
~~Additions~~	20
~~Reclassifications from nonaccretable difference~~	~~1,048~~
~~Accretion~~	~~(1,051~~	)

~~Balance at June 30, 2005~~	17


Commercial	$	12,159
Consumer		119
Mortgage		794

Total outstanding balance	$	13,072

Total carrying amount	$	9,617


	Accretable Yield
Balance at January 1, 2005	$	—
Additions		20
Reclassifications from nonaccretable difference		1,147
Accretion		(1,150	)

Balance at September 30, 2005	$	17


	Treasury Share Transactions for 2005
	Total shares repurchased	Average repurchase price per share		Total shares reissued upon exercise of options	Average reissue price per share
January	11,700	$	31.96	—	$	—
February	7,200		31.42	3,627		24.38
March	12,138		31.57	23,600		24.38
April	64,700		31.19	37,000		20.17
May	36,410		30.45	59,762		22.28
June	13,700		30.90	3,170		23.00
July	18,900		31.83	14,376		23.00
August	10,700		30.63	14,400		23.00
September	16,700		31.00	—		—


	Nine Months Ended September 30,
	Pension Benefits						Other Benefits
	2005			2004			2005		2004
Service cost	$	—		$	—		$	54	$	50
Interest cost		726			721			51		52
Expected return on plan assets		(981	)		(935	)		—		—
Prior service cost recognized		24			23			3		4
Recognized loss		276			280			39		23

Net periodic benefit cost	$	45		$	89		$	147	$	129


	Community Bank
	Mississippi Region		Tennessee Region		Alabama Region		Renasant Insurance		Other			Consolidated
At or for the three month period ended June 30, 2005:
Net interest income	$	13,565	$	2,128	$	5,691	$	1	$	(930	)	$	20,455
Provision for loan losses		500		195		152		—		—			847
Noninterest income		7,158		171		1,645		978		(1	)		9,951
Noninterest expense		14,349		1,868		3,574		729		337			20,857
Income before income taxes		5,874		236		3,610		250		(1,268	)		8,702
Income tax expense		1,899		72		978		35		(489	)		2,495
Net income (loss)		3,975		164		2,632		215		(779	)		6,207
Total assets		1,570,856		280,809		492,368		5,171		4,181			2,353,385
Goodwill		2,265		39,259		47,547		2,783		—			91,854

At or for the three month period ended June 30, 2004:
Net interest income	$	12,603	$	—	$	—	$	1	$	(57	)	$	12,547
Provision for loan losses		488		—		—		—		—			488
Noninterest income		8,539		—		—		930		(350	)		9,119
Noninterest expense		13,305		—		—		736		141			14,182
Income before income taxes		7,349		—		—		195		(548	)		6,996
Income tax expense		1,997		—		—		26		(84	)		1,939
Net income (loss)		5,352		—		—		169		(464	)		5,057
Total assets		1,410,848		—		—		5,632		5,901			1,422,381
Goodwill		2,265		—		—		2,783		—			5,048

At or for the six month period ended June 30, 2005:
Net interest income	$	26,816	$	4,371	$	10,358	$	1	$	(1,773	)	$	39,773
Provision for loan losses		703		299		442		—		—			1,444
Noninterest income		14,292		340		3,095		2,134		(7	)		19,854
Noninterest expense		28,203		3,626		8,081		1,402		508			41,820
Income before income taxes		12,202		786		4,930		733		(2,288	)		16,363
Income tax expense		3,671		237		1,483		188		(882	)		4,697
Net income (loss)		8,531		549		3,447		545		(1,406	)		11,666
Total assets		1,570,856		280,809		492,368		5,171		4,181			2,353,385
Goodwill		2,265		39,259		47,547		2,783		—			91,854

At or for the six month period ended June 30, 2004:
Net interest income	$	25,081	$	—	$	—	$	1	$	(85	)	$	24,997
Provision for loan losses		993		—		—		—		—			993
Noninterest income		15,500		—		—		2,140		(350	)		17,290
Noninterest expense		26,115		—		—		1,439		314			27,868
Income before income taxes		13,473		—		—		702		(749	)		13,426
Income tax expense		3,714		—		—		180		(172	)		3,722
Net income (loss)		9,759		—		—		522		(577	)		9,704
Total assets		1,410,848		—		—		5,632		5,901			1,422,381
Goodwill		2,265		—		—		2,783		—			5,048


Purchase Price:
Shares issued to Heritage common shareholders		1,369,589
Purchase price per share	$	33.10

Value of stock paid			$	45,333
Cash paid				23,055
Fair value of Heritage options assumed				6,081
Transaction costs				1,189

Total Purchase Price			$	75,658


	2005						2004
	2^nd Quarter			1^st Quarter			4^th Quarter			3^rd Quarter			2^nd Quarter			1^st Quarter
Balance at beginning of period	$	18,012		$	14,403		$	16,309		$	13,152		$	13,274		$	13,232
Addition from acquisitions		—			4,198			—			2,845			—			—
Loans charged-off		922			1,413			1,982			470			681			484
Recoveries of loans previously charged-off		(141	)		(227	)		(158	)		(146	)		(71	)		(21	)

Net charge-offs		781			1,186			1,824			324			610			463
Provision for loan losses		847			597			(82	)		636			488			505

Balance at end of period		18,080		$	18,012		$	14,403		$	16,309		$	13,152		$	13,274

Nonaccruing loans		4,157		$	3,807		$	6,443		$	5,626		$	5,566		$	5,413
Accruing loans 90 days past due or more		2,292			3,002			2,228			2,054			1,848			3,891

Total nonperforming loans		6,449			6,809			8,671			7,680			7,414			9,304
Other real estate owned and repossessions		7,114			7,232			2,324			2,516			1,901			1,661

Total nonperforming assets	$	13,563		$	14,041		$	10,995		$	10,196		$	9,315		$	10,965

Allowance for loan losses to total loans		1.14	%		1.14	%		1.26	%		1.45	%		1.45	%		1.50	%
Reserve coverage ratio		280.35			264.53			166.30			212.36			177.39			142.67
Net charge-offs to average loans		0.05			0.08			0.17			0.03			0.07			0.05
Annualized net charge-offs to average loans		0.19			0.31			0.64			0.12			0.28			0.21
Nonperforming loans to total loans		0.40			0.43			0.76			0.68			0.82			1.05
Nonperforming assets to total assets		0.58			0.60			0.64			0.60			0.65			0.75


Period	(a) Total Number of Shares Purchased⁽¹⁾	(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ⁽¹⁾⁽²⁾	(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs⁽²⁾
April 1 to April 31, 2005	64,700	$	31.19	64,700	147,980
May 1 to May 31, 2005	36,410		30.45	36,410	111,570
June 1 to June 30, 2005	13,700		30.90	13,700	97,870

Total	114,810	$	30.92	114,810


Period	(a) Total Number of Shares Purchased⁽¹⁾	(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽¹⁾⁽²⁾	(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs⁽²⁾
July 1 to July 31, 2005	18,900	$	31.83	18,900	300,000
August 1 to August 31, 2005	10,700		30.63	10,700	289,300
September 1 to September 30, 2005	16,700		31.00	16,700	272,600

Total	46,300	$	31.25	46,300


	Votes “For”	Votes Withheld
Class 3 Directors (term expiring in 2008)
William M. Beasley	6,506,844	7,178
Marshall H. Dickerson	7,319,865	7,178
Eugene B. Gifford, Jr.	6,522,035	7,050
Richard L. Heyer, Jr.	7,329,677	6,852
J. Niles McNeel	6,510,279	9,387
H. Joe Trulove	7,328,551	8,575
Class 2 Directors (term expiring in 2007)
Francis J. Cianciola	7,285,901	3,584
Neal A. Holland, Jr.	7,302,835	6,060
Class 1 Directors (term expiring in 2006)
Harold B. Jeffreys	7,312,774	268
Jack C. Johnson	7,311,985	6,494


Proposal	Votes “For”	Votes “Against”	Abstentions	Broker Non-Votes
4. Increase number of shares available for grant, award or issuance under the Company’s Long-Term Incentive Plan	5,815,664	475,192	1,263,609	1,149,183
5. Amend the Company’s Articles of Incorporation to change the Company’s name to “Renasant Corporation”	7,123,462	389,013	41,990	0
6. Amend the Company’s Articles of Incorporation to increase the number of authorized shares of common stock	6,093,273	1,322,470	138,722	0
7. Amend the Company’s Articles of Incorporation to authorize a class of preferred stock	5,021,974	1,276,958	1,255,533	1,149,183
8. Amend the Company’s Articles of Incorporation to eliminate cumulative voting rights in the election of directors	5,390,164	841,090	1,323,211	1,149,183


Exhibit Number		Description

3.1		Articles of Incorporation of Renasant Corporation, as amended⁽¹⁾

3.2		Restated Bylaws of Renasant Corporation, as amended

4.1		Articles of Incorporation of Renasant Corporation, as amended⁽¹⁾

4.2		Restated Bylaws of Renasant Corporation, as amended⁽²⁾

31.1		Certification of the Chief Executive Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Chief Financial Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of the Chief Executive Officer, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of the Chief Financial Officer, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


~~August~~ November 8, 2005		RENASANT CORPORATION

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

		/s/ Stuart R. Johnson
		Senior Executive Vice President and
		Chief Financial Officer


Exhibit Number		Description

3.2		Restated Bylaws of Renasant Corporation, as amended

4.2		Restated Bylaws of Renasant Corporation, as amended⁽¹⁾

31.1		Certification of the Chief Executive Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Chief Financial Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of the Chief Executive Officer, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of the Chief Financial Officer, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.