Notes to Financial Statements
Note A Description of Plan
The following brief description of the Renasant Bank
401(k) Plan (the Plan) is provided for general information purposes only. Participants should refer to the Plan agreement for more complete information.
General
: The Plan is a defined contribution plan and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The Plan covers substantially all
employees of Renasant Corporation and its wholly-owned subsidiaries Renasant Bank and Renasant Insurance, Inc. (collectively referred to herein as the Company).
Eligibility
: Common law employees of the Company, other than employees subject to a collective bargaining agreement, non-resident aliens, temporary and seasonal workers, are immediately eligible to
participate in the Plan.
Contributions
: Participants may voluntarily defer compensation up to applicable IRS limits, as defined in the
Plan agreement. Any deferrals in excess of applicable IRS limits are distributed to the Participant in accordance with the terms of the Plan and are included in the line item Corrective Distributions in the Statements of Changes in Net
Assets Available for Benefit. Participants may also rollover distributions from other qualified retirement plans, subject to the approval of the Plan administrator.
The Company matches 100% of each eligible participants voluntary deferrals, up to 4% of compensation as defined by the Plan. The Company also makes a nondiscretionary contribution for eligible
participants equal to 5% of compensation as defined by the Plan. For eligible participants whose compensation, as defined by the Plan, exceeds the Social Security wage base, the Company makes an additional nondiscretionary contribution equal to 5%
of the excess of compensation as defined by the Plan over the current Social Security wage base.
Participant Accounts; Allocations
:
The Plan maintains one or more accounts for each participant, including a money purchase account for participants in the prior The Peoples Bank & Trust Company Money Purchase Plan. Deferrals and rollover contributions are allocated to their
respective accounts when made. Company contributions are made and allocated to their respective accounts at the end of the Plan year for those participants who are employed on the last day of the Plan year and are credited with 1,000 hours of
service during the Plan year. No additional contributions are allocated to money purchase accounts.
Investments
: Participants direct
the investment of their accounts in an ERISA Section 404(c) arrangement. Earnings are allocated to accounts each business day.
Vesting
: Participants are fully vested in deferrals and rollovers and earnings allocable to such contributions. Matching and nondiscretionary
Company contributions and money purchase accounts vest under a six-year graduated schedule as presented below:
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|
|
|
|
Years of Service
|
|
Vested %
|
|
Less than two
|
|
|
0
|
%
|
Two, but less than three
|
|
|
20
|
%
|
Three, but less than four
|
|
|
40
|
%
|
Four, but less than five
|
|
|
60
|
%
|
Five, but less than six
|
|
|
80
|
%
|
Six or more
|
|
|
100
|
%
|
Forfeitures
: Forfeitures of non-vested Company contributions are used to reduce future Company contributions.
There were forfeitures pending in the amount of $178,921 and $150,163 at December 31, 2012 and 2011, respectively.
Benefits
:
Benefits are equal to the vested value of each participants accounts. Upon termination of service, benefits are paid in the form of a single sum, except those amounts allocable to a participants money purchase account which are paid in
the form of an annuity, unless a participant otherwise elects. Benefits are recorded when paid.
Administrative Expenses
: The Plan
sponsor pays the direct costs of the plan, including legal, audit, custodial and recordkeeping fees.
4
Renasant Bank 401(k) Plan
Notes to Financial Statements
Note A Description of Plan (continued)
Notes Receivable from Participants
:
Participants may borrow from their fund accounts up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. Loan availability is generally conditioned upon hardship conditions. Loan terms range from one to five years,
unless the loan is for the purchase of a principal residence. The loans are secured by the balance in the participants accounts and bear interest at the prime rate of Renasant Bank plus 100 basis points. Principal and interest are paid ratably
through payroll deductions.
Note B Summary of Significant Accounting Policies
Basis of Accounting
: The Plans financial statements are prepared using the accrual basis of accounting, with the exception of the payment of
benefits, which are recognized as a reduction in the net assets available for benefits of the Plan as they are disbursed to participants.
Use of Estimates
: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of
America requires the Plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates.
Investment Valuation and Income Recognition
: Investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. Refer to Note H, Fair Value Measurements, for a discussion of the methods and assumptions used by the Plan to estimate the fair values of the Plans investments.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation in the fair value of investments, as recorded in the Statements
of Changes in Net Assets Available for Benefits, includes changes in the fair value of investments acquired, sold or held during the year.
Notes Receivable from Participants
: Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid
interest. Delinquent notes are reclassified as distributions based upon applicable law and are included in the Statements of Changes in Net Assets Available for Benefits under the line item Certain deemed distributions.
Subsequent Events
:
The Plan has evaluated, for consideration of recognition or disclosure, subsequent events that have occurred
through the date of issuance of its financial statements, and has determined that no significant events occurred after December 31, 2012 but prior to the issuance of these financial statements that would have a material impact on its financial
statements.
Note C Related Party Transactions
Renasant Corporation sponsors the Plan. Renasant Corporation common stock is one of the investment options in the Plan. Renasant Bank is the trustee of the Plan. Federated Investors, Inc. and related
subsidiaries are third party administrators of the Plan. Transactions between the Plan and these entities constitute exempt party-in-interest transactions.
Certain of the Plans investments are managed funds consisting of mutual funds aggregated specifically for the investment option of participants in the Plan. Although these funds bear the name of
Renasant Bank, they do not consist of shares of the Company, and the underlying mutual funds are not proprietary to the Company.
Note D
Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are exposed to various risks such
as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such
changes could materially affect participants account balances and the amounts reported in the Statements of Net Assets Available for Benefits.
5
Renasant Bank 401(k) Plan
Notes to Financial Statements
Note E Tax Status
The Plan obtained its latest determination letter on February 22, 2011, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable
requirements of the Internal Revenue Code. The Plan has been amended since that date. The Plan administrator and the Plans tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plans financial statements.
The Plan had no uncertain tax positions at December 31, 2012 or 2011. If interest and penalties are incurred related to uncertain tax positions,
such amounts are recognized in income tax expense. Tax periods for all fiscal years after 2009 remain open to examination by the federal and state taxing jurisdictions to which the Plan is subject.
Note F Plan Termination
Although
it has not expressed any intent to do so, the Company has the right at any time to terminate the Plan, in whole or in part, subject to the provisions of ERISA. In the event of Plan termination, affected participants will become 100% vested in their
accounts.
Note G Investments
The fair value of individual investments that represent 5% or more of the Plans net assets at December 31, 2012 and 2011, were as follows:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
Number of
Units
|
|
|
Fair Value
|
|
|
Number of
Units
|
|
|
Fair Value
|
|
Renasant Corporation common stock
|
|
|
697,776
|
|
|
$
|
13,355,428
|
|
|
|
682,165
|
|
|
$
|
10,232,479
|
|
Renasant Bank Moderate Growth Fund
|
|
|
599,098
|
|
|
|
7,814,175
|
|
|
|
526,917
|
|
|
|
6,094,385
|
|
Renasant Bank Conservative Growth Fund
|
|
|
538,161
|
|
|
|
6,888,305
|
|
|
|
420,772
|
|
|
|
4,858,534
|
|
Metropolitan West Total Return Bond I
|
|
|
494,547
|
|
|
|
5,385,621
|
|
|
|
|
(2)
|
|
|
|
(2)
|
Federated Prime Obligations Fund IS
|
|
|
4,340,548
|
|
|
|
4,340,548
|
|
|
|
2,816,700
|
|
|
|
2,816,700
|
|
Vanguard Total Stock MKT IDX Signal
|
|
|
115,113
|
|
|
|
3,961,051
|
|
|
|
|
(2)
|
|
|
|
(2)
|
Renasant Bank Aggressive Growth Fund
|
|
|
259,659
|
|
|
|
3,438,728
|
|
|
|
306,577
|
|
|
|
3,540,334
|
|
Federated Total Return Bond IS
|
|
|
|
(1)
|
|
|
|
(1)
|
|
|
504,815
|
|
|
|
5,694,316
|
|
Lord Abbett Fundamental Equity Fund I
|
|
|
|
(1)
|
|
|
|
(1)
|
|
|
345,024
|
|
|
|
4,188,591
|
|
(1)
|
Not an investment option for the Plan at December 31, 2012.
|
(2)
|
Not an investment option for the Plan at December 31, 2011.
|
The Plans investments, including gains and losses on investments bought and sold, as well as investments held during the year, appreciated (depreciated) in value as follows:
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|
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2012
|
|
|
2011
|
|
Appreciation (depreciation) in fair value of investments:
|
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|
|
|
|
|
|
|
Mutual funds
|
|
$
|
1,915,122
|
|
|
$
|
(996,605
|
)
|
Collective trust fund
|
|
|
148,049
|
|
|
|
73,042
|
|
Separately managed accounts
|
|
|
2,234,324
|
|
|
|
71,310
|
|
Renasant Corporation common stock
|
|
|
2,957,104
|
|
|
|
(1,135,550
|
)
|
|
|
|
|
|
|
|
|
|
Net appreciation (depreciation) in fair value of investments
|
|
$
|
7,254,599
|
|
|
$
|
(1,987,803
|
)
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|
|
|
|
|
|
|
|
6
Renasant Bank 401(k) Plan
Notes to Financial Statements
Note H Fair Value Measurements
Financial Accounting Standards Board Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures, provides guidance for using fair value to measure assets and
liabilities and also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to a valuation based on quoted prices
in active markets for identical assets and liabilities (Level 1), moderate priority to a valuation based on quoted prices in active markets for similar assets and liabilities and/or based on assumptions that are observable in the market (Level 2),
and the lowest priority to a valuation based on assumptions that are not observable in the market (Level 3).
The following methods and
assumptions are used by the Plan to estimate the fair values of the Plans financial instruments on a recurring basis:
Mutual
funds
: These investments are valued using the Net Asset Value (NAV) provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of
shares outstanding.
Collective trust fund and separately managed accounts
: These investments are valued based on the market value of
the underlying investments.
Renasant Corporation common stock
: The Companys common stock is traded on the NASDAQ Global Select
Market and is valued using the closing price on the last day of the Plan year.
The following table presents the Plans financial
instruments that are measured at fair value on a recurring basis at December 31, 2012 and 2011:
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Quoted Prices
in Active
Markets for
Identical
Assets
|
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Significant
Other
Observable
Inputs
|
|
|
Significant
Unobservable
Inputs
|
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|
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|
(Level 1)
|
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|
(Level 2)
|
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(Level 3)
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|
Totals
|
|
December 31, 2012
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|
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|
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Mutual funds
|
|
$
|
26,547,892
|
|
|
|
|
|
|
|
|
|
|
$
|
26,547,892
|
|
Collective trust fund
|
|
|
|
|
|
|
2,403,079
|
|
|
|
|
|
|
|
2,403,079
|
|
Separately managed accounts
|
|
|
|
|
|
|
21,429,566
|
|
|
|
|
|
|
|
21,429,566
|
|
Renasant Corporation common stock
|
|
|
13,355,428
|
|
|
|
|
|
|
|
|
|
|
|
13,355,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
39,903,320
|
|
|
$
|
23,832,645
|
|
|
$
|
|
|
|
$
|
63,735,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual funds
|
|
$
|
24,459,459
|
|
|
|
|
|
|
|
|
|
|
$
|
24,459,459
|
|
Collective trust fund
|
|
|
|
|
|
|
1,502,016
|
|
|
|
|
|
|
|
1,502,016
|
|
Separately managed accounts
|
|
|
|
|
|
|
17,288,099
|
|
|
|
|
|
|
|
17,288,099
|
|
Renasant Corporation common stock
|
|
|
10,232,479
|
|
|
|
|
|
|
|
|
|
|
|
10,232,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
34,691,938
|
|
|
$
|
18,790,115
|
|
|
$
|
|
|
|
$
|
53,482,053
|
|
|
|
|
|
|
|
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|
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|
7
SUPPLEMENTAL SCHEDULE
8