Welcome to the second quarter 2008 Renasant Corporation earnings conference call. (Operator Instructions) I would now like to turn the presentation over to your host for today’s conference, Robinson McGraw, Chairman and Chief Executive Officer.

Thank you for joining us for Renasant Corporation’s second quarter 2008 earnings conference call. With me today are Jim Gray, Chief Information Officer; Stuart Johnson, Chief Financial Officer; Harold Livingston, Chief Credit Officer; C.H. Springfield, Chief Credit Policy Officer; Mitch Waycaster, Chief Administrative Officer; Mark Williams, Credit Administration Officer; and Kevin Chapman, our Chief Accounting Officer. Before we begin let me remind you that some of our comments during this call may be forward-looking statements which involve risk and uncertainty. A number of factors could cause actual results to differ materially from the anticipated results or other expectations expressed in forward-looking statements. Those factors include, but are not limited to, interest rate fluctuation, regulatory changes, portfolio performance and other factors discussed in our recent filings with the Securities & Exchange Commission. We undertake 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. Even as record high gas prices, slowing real estate markets, and lingering effects from the national credit issues continue to challenge the financial services and banking industry, we are pleased with our solid earnings results for the second quarter of 2008. In looking at the real estate markets within our tri-state footprint, there has been a definite slow down, especially within the housing market area, in these economies. The Nashville Tennessean newspaper reported on July 10, 2008, weaker home sale prices in the Nashville area for June 2008 compared to June 2007, with the median price of a single-family home down 6% from a year ago. This is the sharpest one-month decline since 2000. The drop in unit sales volume was 28% for June 2008 compared to June 2007. Nevertheless, we believe that Nashville’s diverse economy and its lack of dependency on…

(Operator Instructions) Your first question comes from Brian Klock – Keefe, Bruyette & Woods. Brian Klock – Keefe, Bruyette & Woods: Actually just a couple of quick questions related to the asset quality. I just wanted to make sure I understand this correctly. You said that post the end of the second quarter there was a $2.7 million reduction in non-performing loans.

Yes, let me give you a little color on what has occurred between quarter, how non-performing loans changed. We had a little over $3.3 million of non-performing loans at the end of the first quarter that went into OREO. We had a renewal of $156,000 loan. About $1.8 million of non-performing loans in the first quarter paid off during the second quarter, and we had a charge-off of $300,000 of the non-performing loans during that quarter. We also added a total of $10.7 million of new loans to non-performers during the quarter. Actually, though, of that $10.7 million that we added, $2.8 million of that $10.7 million actually moved out and became performing loans after June 30 of this year. Now a little color on your other real estate, at the end of the quarter we had $12.8 million. We actually at that time, on June 30, had seven properties under contract. That was $1.2 million of OREO book value. The sale price on that contract, under contract, was $1.234 million, so it was a slight gain in there. Of those three properties that already closed and have sold, we had a net gain of $31,000 on those that did close, at this point in time. We do anticipate the remaining four properties to in fact close this month. In addition to that, we have an additional six properties under contract now that came under contract after the end of the month, at the end of the quarter end, OREO book value of $1.194 million and the sales price is $1.184 million, which will be a $10,000 loss on that property, so all that should occur between now and July 31. We added about $8 million of OREO, as I mentioned during the call, after quarter end. This was actually…

The charge-offs for the quarter basically boiled down to about $3 million of charge-offs. We had recoveries of about $296, 000 during the quarter. Of the charge-offs, construction loans were about $598,000, commercial loans about $58,000, real estate one-to-four family mortgages was about $1.794 million, commercial mortgages about $597,000, and installment loans to individuals about $70,000. Then we had some recoveries that netted that out a little bit and the recoveries were pretty much similar to what we talked about what the charge-offs were. Now, part of that one-to-four family mortgage charge-off, of the $1,794 million, was the $300,000 we mentioned on the large home down in Destin that we had been talking about. It sold. Brian Klock – Keefe, Bruyette & Woods: Let me just ask you two more quick questions. In the other non-interest expense during the second quarter, it was about $7.6 million, up about $700,000 from the first quarter. And Stuart, was there anything in there that was non-recurring, like a quarter number?

In the second quarter we did have some ORE of about $160,000. As Robin had said, we believe we are pretty much at par with what’s in ORE right now. So most of the other increases, we will probably have until the third quarter. FDIC insurance, our credit runs out with that, so that will continue.

Let me mention something on that ORE. We actually did a gift sale that offset the loss we had when that piece of property, which made up most of that $158,000 that the offsetting tax effect made it a net wash. Brian Klock – Keefe, Bruyette & Woods: Then looking at that $7.6 million of other is that a good run rate to go forward with or will it come down in the third quarter?

It can be down.

We think it will be down slightly. Really, of those additional items the FDIC assessment kicked up about $168,000, which was, our credit running out with the FDIC. That was the reason for that. So that should be part of the run rate. But otherwise, the rest of them, I think, we shouldn’t see recurring. Brian Klock – Keefe, Bruyette & Woods: In the loan portfolio overall loans were down $40 million linked quarter. I like the fact that you were able to bring down the construction exposure without really taking any significant charge-offs on it. And then you talk about the plans within that construction portfolio as far as run off and what we can expect to see, overall loan growth to offset that runoff in the construction portfolio, just a little color on that.

Well, our pipeline is good, but again, we continue, this quarter we had about $143 million in new loans and ended up with a net decline. Including the net decline was about $9 million of student loans that were sold. We still had a decline in loans and that’s basically because we are not seeing draws, whether it be because of our efforts or the borrowers themselves, on construction lines, and we’re not actually making any, or many, of those types of loans at this point in time, so we should continue to see a decline in that area. For example, of our current pipeline, about 66% of the loans would be classified as not being under the CRE guidelines, which is a reversal from what we’ve probably seen in the past. Mostly what we’re seeing occur are more owner-occupied real estate, things of that nature, that we have a pretty good comport level with going forward.

Your next question comes from Matt Olney – Stephens, Inc. Matt Olney – Stephens, Inc.: You mentioned the $8 million in new OREO that has been put on since June 30. Can you give us an idea of the geography of that OREO?

Yes, it was actually in DeSoto County, Mississippi. Of that we had, it was actually about a $12 million credit. Someone bought at par about $3.5 million of it, a substantial portion of it. What we ended up getting was actually the residential portion, the houses that were already completed, and about $2 million of actual real estate. We have about 29 houses that came in that transaction. These houses have actually been selling and I’m just going to give you an example because there are various prices, but you’re talking about maybe $150,000 house that we’re in at about $120,000. And they’ve been selling pretty much for that asking price in the past, $140,000-$150,000. And we have seen closings on those houses. They were in an orderly liquidation and were doing a good job. This was a strong builder and they were not ahead of us. We felt like that it was the appropriate time, though, to go ahead and take deeds in lieu on this property and we are continuing with that orderly liquidation. And we anticipate being able to come out at a break-even basis on this, so we don’t anticipate any problems. It will just be that it will continue with that orderly liquidation. But it was in DeSoto County. Matt Olney – Stephens, Inc.: But of that $8 million it sounds like $2.8 million are lots that could stay on OREO for a few quarters.

I think its $2.1million and of that about $1 million is an office building and two shops, which we’ve had some interest in already. And the balance of it is about $4.3 million of it consists of 29 houses. And the lots are about $2.4 million, I think. Matt Olney – Stephens, Inc.: It looked like you added about $100 million in securities since Q1. Can you give us an idea of what opportunities you’re seeing there and do you expect these opportunities to continue going forward?

What we did in the quarter, we bought about $147 million of securities in that transaction we funded with laddered Federal Home Loan Bank money. Of that portfolio, about 62% came from mortgage-backs, about 25% from CMOs, 12% were PRETSLs, and about 1% were other, basically tax credits. At that particular time we did it we were looking at the market and we were able to evaluate a spread with those particular securities and then we laddered our Federal Home Loan Bank to match the cash flows of those securities. Matt Olney – Stephens, Inc.: So was that transaction big enough to affect the margin in Q2 or was it just too small to affect it?

Yes, in the second quarter it was close to four basis points 5-basis points. Matt Olney – Stephens, Inc.: Dilutive?

No, accretive. Matt Olney – Stephens, Inc.: So what is the outlook in terms of a similar strategy going forward in Q3 and Q4?

We will not be doing any more of that strategy. Matt Olney – Stephens, Inc.: Is that because of the loan growth outlook looks better than it did in Q2, the pipeline?

The pipeline looks better. Again, it goes back, Matt, on pay downs, as to what we see there. And that’s been our biggest issue in the first two quarters, has been the issue of pay downs on the other lines, so as to what the net result will be. We do anticipate toward the end of the year that we will see some net growth in the loan portfolios but at this stage we are still evaluating.

Your last question comes from Andrew Stapp – B. Riley & Company, Inc. Andrew Stapp – B. Riley & Company, Inc.: In the securities you purchased, did I hear you say there’s $12 million in PRETSLs?

Yes. About 12%, which would be about $17 million in PRETSLs? Andrew Stapp – B. Riley & Company, Inc.: Are you talking PRETSLs, the FTN ABW CDOs?

Yes, these are pooled trust preferreds. Andrew Stapp – B. Riley & Company, Inc.: And which trusts were they? AAA trusts?

Yes. Andrew Stapp – B. Riley & Company, Inc.: And what other CDOs do you have on your books?

We don’t really have any. Are you saying as far as trust preferreds or CDOs, because we’ve really stayed away from CDOs? We have some trust preferreds that are with Bancorp South, we have one that they have a private issue with trust preferreds. Andrew Stapp – B. Riley & Company, Inc.: These are single-issuer CDOs?

No, these right here are pooled. What we bought are pooled. Andrew Stapp – B. Riley & Company, Inc.: So they are CDOs, right?

Well, yes, from that standpoint. Andrew Stapp – B. Riley & Company, Inc.: I many have missed this, but what was the impact of SOP-03-3 on your net interest margin in the second quarter?

We can give you a pretty good breakdown on that, Andy. For the last several quarters, on a breakdown of what’s happened. Looking at a quarter-by-quarter basis, in the third quarter of 2007 our margin was 352, and we had no 03-3 and had no impact from non-accrual loans. If you look at taking out the impact of 03-3 and non-accrual loans on quarters four, one and two, you would see quarter 7 being about a 349. Net 346 in quarter one and a 347 in quarter two. So we actually, on a core basis, show an uptick of about one basis point over this quarter. But we had that 0 in 03-3 this quarter. It was very minimal. If it was a percentage point it would be 0%. Andrew Stapp – B. Riley & Company, Inc.: And do you hold any Freddie Mac or Fannie Mae securities?

No. Are you talking about the equity? No. Andrew Stapp – B. Riley & Company, Inc.: Equity, preferred, whatever.

No. Andrew Stapp – B. Riley & Company, Inc.: Do you have the dollar amount of development loans at June 30? Maybe you could also tell me how that compared to the end of the first quarter.

Are you talking all construction and land development or just development? Andrew Stapp – B. Riley & Company, Inc.: You disclosed the construction in your earnings release but I think the development loans are in CRE. If you could give me all construction and development loans, that would be fine.

Development loans would be $383 million. Andrew Stapp – B. Riley & Company, Inc.: And how did that compare, I don’t recall where they were at the end of [Q1].

It would be flat, Andy. Andrew Stapp – B. Riley & Company, Inc.: And your reserve power of MPAs was down late quarter. Is that just a reflection of your comments regarding the resolution of some of these MPAs, as well your total non-current loans going down? Is that basically it or anything else?

As we look at what our reserve is, taking into account the remaining 03-3 that we have on the books, that would increase our reserve up to a 113, which is not reflected in there. Based on what we see in the way of charge-offs, recoveries, and provisions in the upcoming quarter, we should see that coverage amount going up. Just based on what we see and anticipate happening. Andy, let me go back and remind you and everyone that we are very aggressive in our risk rating system. In addition to that, 22% of our reserve is based on qualitative factors. We have qualitative factors for such things as the oil situation, real estate crisis, the fact that we are in newer markets, and the fact that we have made larger loans over the past couple of years than we have made in the past. But that is nearly $6 million of our total reserve is based on those qualitative factors, $5.8+ million. And again, that is an increasing number that we do. And this is over and above the specific reserve that we have for the loans in our portfolio which are, in fact, risk rated rather aggressively. So we feel very, very comfortable with where we are from that standpoint. Andrew Stapp – B. Riley & Company, Inc.: How do you treat interest reserves on your construction involvement loans? Do you capitalize interest until the developers’ cash flow; do you make them pay periodically interest? Could you just give me some color on that?

If it’s a commercial development it may include interest in the cost figures that are part of the you determine what you’re going to loan against. If it’s any residential, they have to pay the interest, usually either monthly or quarterly.

There are no further questions.

We appreciate everybody joining us today and look forward to you joining us again on our third quarter conference call.