TUPELO - Renasant Corp., the parent of Renasant Bank, on Tuesday reported first-quarter net income of $3.6 million, or 17 cents per share.

That compares to net earnings of $6 million, or 29 cents a share, for the same period a year earlier.

"During the first quarter of 2010 we saw positive trends as our net interest margin increased, our core deposits grew and we were able to hold non-interest expenses relatively flat compared to the fourth quarter of 2009," said Renasant Chairman and CEO Robin McGraw. "As anticipated, our first-quarter results reflect the challenging environment for the financial services industry as well as the national economy."

McGraw added that Renasant management believes "we are positioned to improve earnings in future quarters."

Total deposits grew to $2.71 billion, a 5.35 percent increase since Dec. 31 and a 0.91 percent increase from a year earlier. Noninterest-bearing demand deposits grew about $10 million, or 3.31 percent in the same time frame.

Total loans for the first quarter were $2.31 billion, a decrease from $2.35 billion in the fourth quarter of 2009 and from $2.51 billion from the first quarter of 2009. The decline was attributed primarily to Renasant's reduction of exposure to construction and land development loans.

Student loan effect

Total loans also were affected by the Renasant's exit from the student lending program. The sale of student loans reduced total loans by more than $10 million from the end of last year through the first quarter of 2010.

Total assets were $3.64 billion, a slight increase since Dec. 31, and a 4 percent decrease from the year-ago quarter.

Renasant's Tier 1 leverage capital ratio was 8.74 percent, its Tier I risk-based capital ratio was 11.19 percent, and its total risk-based capital ratio was 12.44 percent.

Net interest income for the period was $24.4 million, compared to $25.3 million a year ago. Net interest margin was 3.27 percent, compared to 3.22 percent for the fourth quarter of 2009 and 3.19 percent for the year-ago period.

"We are seeing positive results from our efforts to improve our net interest margin even as interest rates remain at historically low levels," McGraw said. "We anticipate this upward trend in our net interest margin continuing throughout 2010."

Annualized net charge-offs as a percentage of average loans were 0.81 percent for the first quarter, down from 0.83 percent for the fourth quarter of 2009 and up from 0.75 percent for the first quarter of 2009.

Nonperforming loans as a percentage of total loans were 2.37 percent, compared to 2.13 percent at the end of the fourth quarter of 2009 and 2.69 percent for the year-ago quarter. Loans 30-89 days past due as a percentage of total loans were 1.80 percent, compared to 1.03 percent at the end of 2009 and 1.04 percent a year ago.

The allowance for loan losses as a percentage of loans was 1.78 percent, compared to 1.67 percent at the end of 2009 and 1.40 percent last year. Renasant recorded a provision for loan losses of $6.67 million for the first quarter, compared to $7.8 million in the fourth quarter of 2009 and $5.04 million a year earlier.

Nonperforming loans - loans 90 days or more past due and non-accrual loans - dropped from $67.4 million a year ago to $54.6 million for the first quarter of 2010.