Good day ladies and gentlemen, and welcome to the Fourth Quarter 2008 Renasant Corporation Earnings Conference Call. My name is Chanelle and I will be your coordinator for you today. (Operator Instructions) I would now like to turn the presentation over to your host for today’s call Mr. Robinson McGraw, chairman and CEO. Please proceed.

Good morning, everyone. Thank you for joining us for Renasant Corporation’s fourth quarter 2008 earnings conference call. Joining me with this call today are members of Renasant Corporation’s Executive Management Team. 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 the factual results to differ materially from the anticipated results or other expectations expressed in the 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 and Exchange Commission. We undertake no obligation to update or revise forward looking statements to reflect changed assumptions at the occurrence of unanticipated events or changes to future operating results over time. Looking back over the past year, 2008 was a very trying year for the financial services industry and our earnings results were impacted by the ongoing economic downturn. In the fourth quarter of ’08 we made a decision not to participate in the US Treasury Department’s Capital Purchase Program, which is part of the federal government’s turf. Our board of directors and senior management team extensively analyzed the terms and conditions of the program, and while we applaud the Treasury Department’s actions to help stabilize the financial market, after careful consideration we ultimately decided that the cost, uncertainty, and potential restrictions associated with participating in the program outweighed the benefits to run this by our shareholders. Thus, we made the decision that Renasant would not apply for the program’s funds. Renasant is well capitalized pursuant to existing bank regulatory requirements, and based on projected balance sheet growth, we believe that our capital position coupled with future earnings will allow us to…

Thank you. (Operator instructions) And your first question comes from the line of Brian Klock of KBW.

Hey, good morning gentlemen.

Good morning, how are you, Brian?

I am doing fine, thanks. Rob I know you went over some of the credit detail, but I wonder if you could go over those again. Looking forward the inflow is into non-performing loans and out and went into or (inaudible), maybe you can kind of go through those flows, inflows and outflows for the NPLs and ROEs again.

Right, okay, lets go from a non-performers we had about $5.5 million of non-performers going into ROE we charged off by about $6.7 million of debt, that was a reduction in the other category little over $13 million we had about $21 million that went to non-accrual and about $1.3 million went over 90 but non-accrual or about $23 million that went in.

Okay. And so, with the $23 million that went into NPL, can you give us some granularity as to collateral type geography?

Yes, of that $23 million basically about three-fourth of it I think we can safely say was a construction and development and the other was just kind of spread I guess maybe 10% of it would be owner occupied and commercial real estate.

Okay, and is there anyone geography that you are seeing the weakness in?

Yes, you can look probably about 75% of it depending in Memphis MSA which includes the DeSota County, Mississippi.

Okay, and Robin with that we both on the C&D which I know you have been talking about that for a while but also it seems like to the first time maybe you are seeing the commercial real estate there are going to see a little bit contingent?

Well, actually the commercial real-estate that $2.8 million get really and truly I don’t think any of it was in that geography quite frankly one of them the largest credit which is about a little over third of it, was USDA guaranteed credit plan in Mississippi, fortunes of it were Mississippi type credits I think and looking at it one national credit so really and truly DeSoto County was not one of the areas of concern.

Okay. Now I guess with the charge-offs you mentioned the $6.7 million of what was already and I tell you talked about the loan in the past, that was the C&D related loan?

Correct.

Alright.

And the Memphis MSA. This is a relationship its two loans and we felt and we were in litigation and we feel that there will be a recovery at some point in time or anticipate just based on the facts in the case, but we just don’t like it's going to be prolonged and that at this point we felt that best to go ahead and take charge down on that particular loan and that was over half of this quarter, I mean that 6 million you were talking about.

Okay, and I guess the rest of the charge-offs in the quarter or two, another 1.5 million or so of net charge-offs, anything significant in Arizona -- again C&D related?

At very, very high percentage of it was C&D actually three-fourth sub it was C&D the other was just kind of (inaudible) some other real estate and other types outside of the C&D and other real estate types was minimal.

Okay. So I guess, just sticking with the C&D scene, how is the national market holding up and how are builder’s balance sheets in that market?

Well, for the most part, our builders that we are dealing with in the national market, they are doing relatively well. We’re seeing medium priced homes that dropped in national in double digits now. Sales have been down on a year-over-year type basis. But for the most part, our exposure is not significant in the southern part of Williamson County area. Hence, therefore we are not experiencing a lot of debt aspect of it. But, we are right now -- although we have seen some of our national loans in over the past years. For the most part, what we’re seeing difficulties. We have to not necessarily C&D but some other types of credits.

And what kind of credit for that? Commercial related or C&I related credit you’ve seen?

Some of them are consumer related, some haven’t yet considered commercial related. You’re seeing a little bit over occupied type properties out there. In fact, we don’t really -- we some one-half aspect type situations. But not any significant C&D type exposure.

Okay.

And, you know, it’s just a slowdown. It’s a low percentage in comparison to what we’ve been, again, in the DeSoto County and Memphis.

Okay. And I guess, when you think about the allowance and obviously you guys, to boost the provision increase of reserve, the loans ratio, and you talked earlier about, the current allowances, where it is and your projected quarterly provisions of 2009, would be enough to weather us through, can you give us kind of idea what you’re expecting your quarterly provisions to be in 2009?

We expect the run-rate to probably be about 50% high than what was in third quarter.

Okay.

Which would be about $4.5 million for the run-rate.

Okay.

And again, the special provision that we made this quarter, of that a half percentage of it would not to any specific loans. As you know, we've had qualitative factors going in the past and we increased the C&D qualitative factor to about half, in fact half of our allowance that is specific to any particular loan is related to C&D and about half of the qualitative factors are specific to C&D.

Okay. And I guess I think that.

Brian, we're still running about 25% to 30% of our allowance is being qualitative as oppose to specific to any loan.

Okay. And I know you have, when the 10-K comes out you'll kind of give us that the specific allocations by category. Would the specific allowance on the C&D, do you have an idea kind of what that ratio is so the specific allowance loan?

50% or so. For the total specific part and 50% qualitative, so basically 50% of our allowance is related to C&D either specific qualitative.

Got you. Okay, great. And I think Kevin, one last question and then I'll let someone else get on. How should we think about the reserve then going forward I guess, we know the provision level that kind of guessing, so that thing that we see some reserve build?

Well, we are looking at a run rate much higher than what we have in the past let’s say.

Okay.

As you look, Brian, and we did a pretty strong burn rate looking at our past dues that are over 30 days. And lot of theses just blips that are renewals that didn't get in the bucket before the end of the quarter. But looking at the over 30 past dues and with the term allowance and the projected provision for 2009, we could charge off 23%, we get our 23% charge off rate on our fourth quarter past dues over 30 and still not had to have any kind extraordinary provision next year.

Okay.

We think as we are conservative and looking at our portfolio.

Okay. Thanks for the color. I appreciate it.

You bet.

Your next question comes from the line of Ben Harvey of Stephens Incorporated.

Good morning, guys.

Good morning.

Thanks for taking my call.

How are you?

I am doing great. Most of my questions have already been answered. I’ve got couple left here. To start of with Robin, your earlier discussion on the non-interest expense in the employee compensation is that something we should expect as run rate going forward let’s say fairly stable or will return close or back of those 3Q levels?

Yes, it should be in probably the $14.5 million range give or take.

Got it.

From quarter run rate.

Alright. So could you give me a little bit of color on how that breaks down from the increase in non-accruals we saw during the quarter combined with probably some of the compression from fed rate cut. And then again going forward you discussed that your deposit rates be coming down, 200 basis points earlier kind of what do we see going forward as far as the margin?

In the fourth quarter 11 basis points of that decline -- of the margin was impacted by non-accruals that compares to about three basis points to prior quarter. So as you kind of analyze it out that you are looking at pretty close to a more flat to core margins on a linked quarter basis which we thought pretty good under the circumstances in the quarter. We have seen finally some downward movement in rates in the metro markets with the most pressure we've experienced on the rates that has been in our national Memphis and Birmingham markets. We are finally starting to see that rate pressure drop off to the extent within mid-market counts now and in the one and half to the low two range, depending on where it is even, to your see these in the three ranges. We see one or two just out of market rates out there now but it's not like before. We've see some significant drops and we feel like as we say it that over the course of year we'll be back to growing deposits like we have in the past as opposed to having sat launch also some of the pricing has been so extraordinarily half.

And, last I know you talked about this great deal operated based on some of its in terms of the is that still -- what's the composition there in terms of credit size is it several smaller credits or color on that?

We have like one-to-four family of builders and developers about the lower than the $10 million, about $9 million of residential loss. About $3.5 million of one to four family consumer mortgages and room type properties about $2.5 million of commercial income properties.

Okay and on some of those larger credits of those kind of separated out to be different?

Well, if you'll remember back to several quarters back we took these and loosed a barely significant credit in DeSoto County and that is a portion of both residential loss in the one to four homes but the balance over the none of the others are anyway near that large some of them are in the $1 million to $1.5 million range of some loss that came in or with one or two houses one it but for the most part we don’t have any substantial blocks. And quiet frankly as I mentioned, we have seen about $11 million of sales over the course of the last year and have another $1.2 million on the contract right now. The good thing too in going back and looking in fact that we've had some slight gain and my question was do we buy in too cheaply, but actually going back and looking at those loans, we actually lost, I think overall between 3% maybe. But if you take out one large credit, we actually lost that 20%. But if you take that one large credit that loss was about 7% to 8% on the balance of the portfolio, so we've done, and that was from the amount of loan at the time of foreclosure, so we actually have done pretty well with that portfolio overtime.

Okay. Well, that's all my questions. I appreciate you take them.

You bet. Thank you.

(Operator Instructions). You have a follow-up question from the line of Brian Klock.

Hey, guys.

Hey, Brian.

Stuart, with maybe some sort of modeling questions, I know Robin you already talked about that sort of normalized run rate for the personnel expenses. Looking at the fee income line, we did see linked quarter dropped in service charge and deposits and fees and commission revenues. Obviously the recession sort of playing into that, but maybe you can kind of give us some color on what to expect, and maybe what kind of drove some of the linked quarter variance in those fee lines?

Well, as you said economy-driven, the fees and commission obviously loan production has been slower than in prior quarter, so your origination in processing fees are lower, and from the standpoint, our service charges that were primarily coming through the number of come-through activity from deposit accounts primarily related overwrought, now we've seen a decline in that activity from the fourth quarter.

They are part of that, obviously the fourth quarter decline and over that phase was economy-based, but there was less spending. And one of the other areas that we've seen a little drop-off in the fee income, on the mortgage loans, a lot of our mortgage loan activity in December was on the wholesale side, and so we will see some of those fees appear this quarter.

Okay, okay. And you did mention on the other expense side, the $700,000 impairment and one of the deeds in lieu?

Right, that was that large deeds in lieu that we took a couple of quarters back in the DeSoto County.

Right.

And we had it appraised. And for the most part, how in fact all our houses, we were fine, but one of the developments, we felt over the price have felt and we already felt the same way had declined, so we went ahead with that impairment.

And can you again give us kind of range of sort of what that appraised value was brought down to us as far as appraise value to the loan value sort of?

Well, other than that one lot, the appraised value was about 90% or close to 80% to 90% of what loan value was. That one subdivision was I think about 65% of what the additional amount was.

Okay.

And we the time, Brian, we had some real concern about that particular subdivision. It was the only one that had not, it only have one house in a two, by the way, but it was the only one that did not appeared to be moving like the rest them were.

Okay.

So that was not unanticipated, but the rest of it was spread across the other developments that was $0.5 million spread across the other developments, so the rest of it was in pretty decent shape as far as what our loaned value were.

Okay. And a last question, the tax rate, obviously there’s lot of things, moving parts in there, looks like you have some tax credit, so I guess Stuart, you can you give us an idea what sort of normalize run-rate would be I guess going forward for your tax rate?

Okay. Brian, that’s going to be probably we have been running around the 30%, I don’t see that change in the whole lot in our indicated tax rate. The fourth quarter we had purchased a number of units as well coupled with tax credit, I think our units were up on an average about $4 million over the first quarter, so that coupled with an additional tax credit that we were able to take advantage of in the fourth quarter, but I think it will be somewhere in the range of the 30% still in (inaudible).

Brian, that takes in the caveat that there are no changes either direction, but in terms of compression.

Right, exactly. I guess we have to keep our eyes and ears open for that too. All right, thanks, thanks for taking the follow-up, guys. I appreciate it.

Thanks, Brian.

There are no further questions in the queue. I would now like to turn the call back over to Mr. McGraw.

Thank you, Chanelle. We appreciate everybody's time today and your interest in Renasant Corporation, and we look forward to speaking with you again in the near future. Good bye, everybody.

Ladies and gentlemen, that concludes the presentation. Thank you for your participation. You may now disconnect. Have a great day.