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Employee Benefit and Deferred Compensation Plans
 12 Months Ended
Dec. 31, 2015
Compensation and Retirement Disclosure [Abstract]  
Employee Benefit and Deferred Compensation Plans
Employee Benefit and Deferred Compensation Plans
(In Thousands, Except Share Data)
The Company sponsors a noncontributory defined benefit pension plan, under which participation and future benefit accruals ceased as of December 31, 1996. As a result of the acquisition of First M&F, the M&F Bank pension plan, under which accruals had ceased prior to the acquisition date, was merged into the Company’s existing pension plan during the fourth quarter of 2013. The Company’s funding policy is to contribute annually to the plan an amount at least equal to the minimum amount determined by consulting actuaries in accordance with the requirements of the Internal Revenue Code of 1986, as amended. No contributions were made to the pension plan in 2015 or 2014. The Company does not anticipate that a contribution will be required in 2016. In connection with the acquisition of Heritage in 2015, the Company assumed the defined benefit pension plan maintained by HeritageBank, under which accruals had ceased and which had been terminated by HeritageBank immediately prior to the acquisition date. Complete distribution of pension benefits under this plan is anticipated to occur once determinations as to the status of the plan’s termination have been received from the Pension Benefit Guarantee Corporation and the Internal Revenue Service. Each plan’s accumulated benefit obligation and respective projected benefit obligation are substantially the same since benefit accruals under each plan have ceased. The accumulated benefit obligation for the Renasant legacy plan was $27,856 and $28,087 at December 31, 2015 and 2014, respectively. The accumulated benefit obligation for the assumed HeritageBank plan was $12,913 at December 31, 2015. There is no additional minimum pension liability required to be recognized for either plan.
The Company also provides retiree health care benefits for certain employees who were employed by the Company and enrolled in the Company’s health plan as of December 31, 2004. To receive benefits, an eligible employee must retire from service with the Company and its affiliates between age 55 and 65 and be credited with at least 15 years of service or with 70 points, determined as the sum of age and service at retirement. The Company periodically determines the portion of the premium to be paid by each eligible retiree and the portion to be paid by the Company. Coverage ceases when an employee attains age 65 and is eligible for Medicare. The Company also provides life insurance coverage for each retiree in the face amount of $5 until age 70. Retirees can purchase additional insurance or continue coverage beyond age 70 at their sole expense.
The Company has accounted for its obligation related to these retiree benefits in accordance with ASC 715, “Compensation – Retirement Benefits.” The assumed rate of increase in the per capita cost of covered benefits (i.e., health care cost trend rate) for the next year is 5.6%. Increasing or decreasing the assumed health care cost trend rates by one percentage point in each year would not materially increase or decrease the accumulated post-retirement benefit obligation or the service and interest cost components of net periodic post-retirement benefit costs as of December 31, 2015, and for the year then ended.





Information relating to the legacy Renasant defined benefit pension plan (“Pension Benefits - Renasant”), the assumed HeritageBank defined benefit pension plan (“Pension Benefits - HeritageBank”) and post-retirement health and life plan (“Other Benefits”) as of December 31, 2015 and 2014 is as follows:
 
Pension Benefits Renasant
 
Pension Benefits HeritageBank
 
Other Benefits
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
Change in benefit obligation
 
 
 
 
 
 
 
 
 
 
 
Benefit obligation at beginning of year
$
28,087

 
$
27,364

 
$
—

 
$
—

 
$
1,941

 
$
2,082

Service cost
—

 
—

 
—

 
—

 
17

 
14

Interest cost
1,095

 
1,292

 
305

 
—

 
60

 
84

Plan participants’ contributions
—

 
—

 
—

 
—

 
82

 
77

Actuarial loss (gain)
605

 
2,601

 
(685
)
 
—

 
(37
)
 
(118
)
Benefits paid
(1,931
)
 
(3,170
)
 
(15
)
 
—

 
(359
)
 
(198
)
Settlements
—

 
—

 
(2,187
)
 
—

 
—

 
—

Addition from business combination
—

 
—

 
15,495

 
—

 
—

 
—

Benefit obligation at end of year
$
27,856

 
$
28,087

 
$
12,913

 
$
—

 
$
1,704

 
$
1,941

Change in fair value of plan assets
 
 
 
 
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
$
26,532

 
$
27,989

 
$
—

 
$
—

 
 
 
 
Actual return on plan assets
(167
)
 
1,713

 
(21
)
 
—

 
 
 
 
Contribution by employer
—

 
—

 
—

 
—

 
 
 
 
Benefits paid
(1,931
)
 
(3,170
)
 
(15
)
 
—

 
 
 
 
Settlements
 
 
 
 
(2,187
)
 
—

 
 
 
 
Addition from business combination
—

 
—

 
14,681

 
—

 
 
 
 
Fair value of plan assets at end of year
$
24,434

 
$
26,532

 
$
12,458

 
$
—

 
 
 
 
Funded status at end of year
$
(3,422
)
 
$
(1,555
)
 
$
(455
)
 
$
—

 
$
(1,704
)
 
$
(1,941
)
Weighted-average assumptions as of December 31
 
 
 
 
 
 
 
 
 
 
 
Discount rate used to determine the benefit obligation
4.56
%
 
4.00
%
 
4.27
%
 
N/A

 
3.63
%
 
3.22
%

The discount rate assumptions at December 31, 2015 were determined using a yield curve approach. A yield curve was developed for a selection of high quality fixed-income investments whose cash flows approximate the timing and amount of expected cash flows from the benefit plans. The selected discount rate is the rate that produces the same present value of the benefit plan’s projected benefit payments.
The components of net periodic benefit cost and other amounts recognized in other comprehensive income for the defined benefit pension and post-retirement health and life plans for the year ended December 31, 2015, 2014 and 2013 are as follows: 
 
Pension Benefits Renasant
 
Pension Benefits HeritageBank(1)
 
Other Benefits
 
2015
 
2014
 
2013
 
2015
 
2015
 
2014
 
2013
Service cost
$
—

 
$
—

 
$
—

 
$
—

 
$
17

 
$
14

 
$
28

Interest cost
1,095

 
1,292

 
899

 
305

 
60

 
84

 
70

Expected return on plan assets
(2,040
)
 
(2,160
)
 
(1,445
)
 
(216
)
 
—

 
—

 
—

Prior service cost recognized
—

 
—

 
—

 
—

 
—

 
—

 
—

Recognized actuarial loss
331

 
207

 
427

 
—

 
101

 
89

 
195

Settlement/curtailment/termination losses
—

 
453

 
—

 
(65
)
 
—

 
—

 
—

Net periodic benefit cost
(614
)
 
(208
)
 
(119
)
 
24

 
178

 
187

 
293

Net actuarial loss/(gain) arising during the period
2,812

 
3,047

 
(3,675
)
 
(448
)
 
(37
)
 
(118
)
 
505

Net Settlement/curtailment/termination losses
—

 
(453
)
 
—

 
65

 
 
 
 
 
 
Amortization of net actuarial loss recognized in net periodic pension cost
(331
)
 
(207
)
 
(427
)
 
—

 
(101
)
 
(89
)
 
(195
)
Total recognized in other comprehensive income
2,481

 
2,387

 
(4,102
)
 
(383
)
 
(138
)
 
(207
)
 
310

Total recognized in net periodic benefit cost and other comprehensive income
$
1,867

 
$
2,179

 
$
(4,221
)
 
$
(359
)
 
$
40

 
$
(20
)
 
$
603

Weighted-average assumptions as of December 31
 
 
 
 
 
 
 
 
 
 
 
 
 
Discount rate used to determine net periodic pension cost
4.00
%
 
4.83
%
 
3.90
%
 
4.00
%
 
3.22
%
 
4.66
%
 
3.04
%
Expected return on plan assets
8.00
%
 
8.00
%
 
8.00
%
 
3.00
%
 
N/A

 
N/A

 
N/A


(1) Net periodic benefit cost and other amounts recognized in other comprehensive income for the assumed HeritageBank defined benefit pension plan were recognized in the Company’s results of operations beginning on the date of acquisition; therefore, disclosure of amounts recognized in prior periods is not necessary.
Future estimated benefit payments under the defined benefit pension plans and post-retirement health and life plan are as follows:
 
Pension Benefits Renasant
 
Pension Benefits HeritageBank
 
Other
Benefits
2016
$
2,005

 
$
12,913

 
$
251

2017
2,002

 
—

 
249

2018
2,011

 
—

 
249

2019
2,013

 
—

 
212

2020
2,006

 
—

 
190

2021 - 2025
9,676

 
—

 
746





Amounts recognized in accumulated other comprehensive income, before tax, for the year ended December 31, 2015 are as follows:
 
Pension Benefits Renasant
 
Pension Benefits HeritageBank
 
Other
Benefits
Prior service cost
$
—

 
$
—

 
$
—

Actuarial loss
11,915

 
(383
)
 
550

Total
$
11,915

 
$
(383
)
 
$
550


The estimated costs that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are as follows:
 
Pension Benefits Renasant
 
Pension Benefits HeritageBank
 
Other
Benefits
Prior service cost
$
—

 
$
—

 
$
—

Actuarial loss
400

 
—

 
68

Total
$
400

 
$
—

 
$
68


The investment objective for the legacy Renasant defined benefit pension plan is to achieve above average income and moderate long term growth, while the investment objective for the Heritage defined benefit pension plan is to preserve capital pending the distribution of pension benefits upon its dissolution. An investment committee appointed by management seeks to accomplish this objective by combining an equity income strategy (approximately 60% to 70%), which generally invests in larger capitalization common stocks, and an intermediate fixed income strategy (approximately 30% to 40%), which generally invests in U.S. Government securities and investment grade corporate bonds. In response to the current interest rate environment, the committee has begun allocating assets to the higher end of the target range for equity funds in order to lessen the impact of anticipated rising interest rates on the fixed income funds. It is the investment committee’s intent to give the investment managers flexibility within the overall guidelines with respect to investment decisions and their timing. However, significant modifications of any previously approved investments or anticipated use of derivatives to execute investment strategies must be approved by the committee.
The plan’s expected long-term rate of return was estimated using market benchmarks for investment classes applied to the plan’s target asset allocation. The expected return on investment classes was computed using a valuation methodology which projected future returns based on current equity valuations rather than historical returns.
The fair values of the Company’s defined benefit pension plan assets by category for both the legacy Renasant defined benefit pension plan and the assumed HeritageBank defined benefit pension plan at December 31, 2015 and 2014 follow below. The plan assets of the assumed HeritageBank defined benefit pension plan were fully invested in cash and cash equivalents at December 31, 2015. Equity securities consist primarily of common stocks of both U.S. companies and international companies that are traded in active markets and are valued based on quoted market prices of identical assets (Level 1). The Company's investments in registered investment companies consist primarily of investments in funds that invest in investment grade fixed income securities. These investments are traded in active markets and are valued based on quoted market prices of identical assets (Level 1). Fixed income securities consist of U.S. Government securities, investment grade corporate bonds, and municipal obligations. The fair values of these instruments are based on quoted market prices of similar instruments or a discounted cash flow model (Level 2).
 
Quoted Prices In
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Totals
December 31, 2015
 
 
 
 
 
 
 
Cash and cash equivalents
$
13,927

 
$
—

 
$
—

 
$
13,927

Equity securities:
 
 
 
 
 
 
 
U.S. large cap companies
9,277

 
—

 
—

 
9,277

U.S. mid cap companies
5,085

 
—

 
—

 
5,085

U.S. small cap companies
1,516

 
—

 
—

 
1,516

International companies
1,505

 
—

 
—

 
1,505

Investments in registered investment companies
848

 
—

 
—

 
848

Fixed income securities:
 
 
 
 
 
 
 
U.S. government bonds
—

 
1,883

 
—

 
1,883

Corporate bonds
—

 
2,750

 
—

 
2,750

Municipal obligations
—

 
101

 
—

 
101

 
$
32,158

 
$
4,734

 
$
—

 
$
36,892

 
Quoted Prices In
Active Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Totals
December 31, 2014
 
 
 
 
 
 
 
Cash and cash equivalents
$
1,882

 
$
—

 
$
—

 
$
1,882

Equity securities:
 
 
 
 
 
 
 
U.S. large cap companies
9,144

 
—

 
—

 
9,144

U.S. mid cap companies
5,210

 
—

 
—

 
5,210

U.S. small cap companies
2,791

 
—

 
—

 
2,791

International companies
1,489

 
—

 
—

 
1,489

Investments in registered investment companies
898

 
—

 
—

 
898

Fixed income securities:
 
 
 
 
 
 
 
U.S. government bonds
—

 
2,003

 
—

 
2,003

Corporate bonds
—

 
3,008

 
—

 
3,008

Municipal obligations
—

 
107

 
—

 
107

 
$
21,414

 
$
5,118

 
$
—

 
$
26,532


The Company maintains a 401(k) plan, which is a contributory plan. Employees may contribute pre-tax earnings, subject to a maximum established annually by the IRS. The Company matches employee deferrals, up to 4% of compensation. The Company also makes a nondiscretionary contribution for each eligible employee in an amount equal to 5% of plan compensation and 5% of plan compensation in excess of the Social Security wage base. Employees are automatically enrolled in the plan when employment commences. Company contributions are allocated to participants who are employed on the last day of each plan year and credited with 1000 hours of service during the year. The Company’s costs related to the 401(k) plan, excluding employee deferrals, in 2015, 2014 and 2013 were $9,271, $7,230 and $5,488, respectively.
In connection with the Heritage acquisition, the Company assumed the HeritageBank of the South 401(k) Plan maintained by HeritageBank, under which all accruals had ceased and which had been terminated by HeritageBank immediately prior to the acquisition date. Distribution of benefits under this plan made solely on account of its termination is anticipated to occur once a determination as to its qualified status in connection with its termination has been received from the Internal Revenue Service. There was no impact on the Company's consolidated financial statements as of and for the year ended December 31, 2015 associated with this plan.
The Company adopted the “Performance Based Rewards” incentive compensation plan on January 1, 2001, under which annual cash bonuses are paid to eligible officers and employees, subject to the attainment of designated performance criteria. The Company designates minimum levels of performance for all applicable profit centers and rewards employees on performance over the minimum level. The expense associated with the plan for 2015, 2014 and 2013 was $3,608, $4,100 and $4,376, respectively.
The Company maintains three deferred compensation plans: a Deferred Stock Unit Plan and two conventional deferred compensation plans. Nonemployee directors may defer all or any portion of their fees and retainer to the Deferred Stock Unit Plan or the deferred compensation plan maintained for their benefit. Officers may defer base salary and bonus to the Deferred Stock Unit Plan or salary to the deferred compensation plan maintained for their benefit, subject to limits that are determined annually by the Company. Amounts credited to the Deferred Stock Unit Plan are invested in units representing shares of the Company’s common stock. Amounts credited to the conventional deferred compensation plans are invested at the discretion of each participant from among designated investment alternatives. Directors and officers who participated in these deferred compensation plans on or before December 31, 2006, may invest in a preferential interest rate investment that is derived from the Moody’s Average Corporate Bond Rate, adjusted monthly, and the beneficiaries of participants in the deferred compensation plans as of such date may receive a preretirement death benefit in excess of the amounts credited to plan accounts at the time of death. All of the Company’s deferred compensation plans are unfunded. It is anticipated that the two conventional deferred compensation plans will result in no additional cost to the Company because life insurance policies on the lives of the participants have been purchased in amounts estimated to be sufficient to pay plan benefits. The Company is both the owner and beneficiary of the life insurance policies. The expense recorded in 2015, 2014 and 2013 for the Company’s deferred compensation plans, inclusive of deferrals, was $1,225, $1,383 and $2,088, respectively. 
In connection with the Heritage acquisition, the Company assumed the Heritage Financial Group Deferred Compensation and Excess/Matching Contribution Plan maintained by Heritage, under which all accruals had ceased and which had been terminated by Heritage immediately prior to the acquisition date. The distribution of accrued account balances was effected as soon as practicable following the acquisition date. There was no other impact on the Company’s consolidated financial statements as of and for the year ended December 31, 2015 associated with this plan.
The Company assumed four supplemental executive retirement plans (SERPs) in connection with the acquisition of Capital in 2007. The SERPs were established by Capital to provide supplemental retirement benefits. The plans provide four officers of the Company specified annual benefits based upon a projected retirement date. These benefits are payable for a 15-year period after retirement. The supplemental executive retirement liabilities totaled $3,364 and $3,094 at December 31, 2015 and 2014, respectively. The plans are not qualified under Section 401 of the Internal Revenue Code.
In connection with the Heritage acquisition, the Company assumed the Heritage Financial Group Employee Stock Ownership Plan (“the Heritage ESOP”) maintained by Heritage, under which all accruals had ceased and which had been terminated by Heritage immediately prior to the acquisition date. As of the date of acquisition, the Heritage ESOP had a loan outstanding, inclusive of accrued interest, of $2,839 due to Heritage which was assumed by the Company. Unallocated shares of Company common stock pledged as collateral for the loan were sold in order to repay the loan in full, including any accrued interest. Any unallocated shares of Company common stock that remained after the repayment of the loan were allocated to the accounts of the participants. Distribution of benefits under the Heritage ESOP made solely on account of its termination is anticipated to occur once a determination as to its qualified status in connection with its termination has been received from the Internal Revenue Service. Other than the transactions recorded in connection with the loan repayment, there was no impact on the Company’s consolidated financial statements as of and for the year ended December 31, 2015 associated with this plan.
In March 2011, the Company adopted a long-term equity incentive plan, which provides for the grant of stock options and the award of restricted stock. The plan replaced the long-term incentive plan adopted in 2001, which expired in October 2011. The Company issues shares of treasury stock to satisfy stock options exercised or restricted stock granted under the plan. Options granted under the plan allow participants to acquire shares of the Company’s common stock at a fixed exercise price and expire ten years after the grant date. Options vest and become exercisable in installments over a three-year period measured from the grant date. Options that have not vested are forfeited and cancelled upon the termination of a participant’s employment. The Company recorded compensation expense of $73, $262 and $469 for the years ended December 31, 2015, 2014 and 2013, respectively, for options granted under the plan. There were no stock options granted during the years ended December 31, 2015 or December 31, 2014.


The fair value of the options granted during the year ended December 31, 2013 was estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions:
 
2013 Grant
Dividend yield
3.55
%
Expected volatility
37
%
Risk-free interest rate
0.76
%
Expected lives
6 years

Weighted average fair value
$
4.47


The following table summarizes information about options issued under the long-term equity incentive plan as of and for the three years ended December 31, 2015: 
 
Shares
 
Weighted
Average
Exercise
Price
 
Weighted
Average
Remaining
Contractual
Life
 
Aggregate
Intrinsic
Value
Outstanding at January 1, 2013
1,279,248

 
$
18.79

 
 
 
 
Assumed in acquisition
11,557

 
21.16

 
 
 
 
Granted
52,500

 
19.14

 
 
 
 
Exercised
(272,957
)
 
19.22

 
 
 
 
Forfeited
(10,000
)
 
27.20

 
 
 
 
Outstanding at December 31, 2013
1,060,348

 
$
18.64

 
4.89
 
$
13,592

Exercisable at December 31, 2013
843,237

 
$
19.21

 
4.08
 
$
10,331

Granted
—

 
—

 
 
 
 
Exercised
(227,499
)
 
18.39

 
 
 
 
Forfeited
(1,899
)
 
20.77

 
 
 
 
Outstanding at December 31, 2014
830,950

 
$
18.70

 
4.48
 
$
8,680

Exercisable at December 31, 2014
745,949

 
$
18.95

 
4.15
 
$
7,628

Granted
—

 
—

 
 
 
 
Exercised
(201,371
)
 
20.82

 
 
 
 
Forfeited
(8,133
)
 
29.45

 
 
 
 
Outstanding at December 31, 2015
621,446

 
$
17.88

 
3.91
 
$
10,274

Exercisable at December 31, 2015
606,027

 
$
17.85

 
3.83
 
$
10,038


The total intrinsic value of options exercised during the years ended December 31, 2015, 2014 and 2013 was $2,445, $2,519 and $1,655, respectively. The total grant date fair value of options vested during the same periods was $235, $458, and $535, respectively.









The Company awards performance-based restricted stock to executives and other officers and time-based restricted stock to directors, executives, and other officers and employees under the long-term equity incentive plan. The performance-based restricted stock vests upon completion of a one-year service period and the attainment of certain performance goals. Performance-based restricted stock is issued at the target level; the number of shares ultimately awarded is determined at the end of each year and may be increased or decreased depending upon the Company meeting or exceeding financial performance measures defined by the Board of Directors. Time-based restricted stock vests at the end of the service period defined in the respective grant. The fair value of each restricted stock grant is the closing price of the Company’s common stock on the day immediately preceding the grant date. The Company recorded compensation expense of $3,884, $3,647 and $2,330 for the years ended December 31, 2015, 2014 and 2013, respectively, for restricted stock awarded under the plan. The following table summarizes the changes in restricted stock as of and for the year ended December 31, 2015:
 
Performance-
Based
Restricted
Stock
 
Weighted
Average
Grant-Date
Fair Value
 
Time-
Based
Restricted
Stock
 
Weighted
Average
Grant-Date
Fair Value
Nonvested at beginning of year
—

 
$
—

 
38,336

 
$
27.26

Granted
97,666

 
28.93

 
103,588

(2) 
31.56

Vested
(94,916
)
(1) 
28.93

 
(32,236
)
 
29.54

Cancelled
(2,750
)
 
28.93

 
(4,250
)
 
25.54

Nonvested at end of year
—

 
$
—

 
105,438

 
$
31.04

(1) In January 2015, the Company awarded 81,750 shares of performance-based restricted stock based on the target level of performance goals of which 2,750 were cancelled prior to the attainment of performance goals. The Company exceeded the financial performance measures for the award; therefore, an additional 15,916 shares were issued for a total award of 94,916 shares.
(2) Includes shares of time-based restricted stock granted as an inducement award to certain employees in connection with the Heritage acquisition. This award was made outside the Company's long-term equity incentive plan.
Unrecognized stock-based compensation expense related to restricted stock totaled $1,463 at December 31, 2015. At such date, the weighted average period over which this unrecognized expense is expected to be recognized was approximately 1.7 years. There was no unrecognized stock-based compensation expense related to stock options at December 31, 2015.
At December 31, 2015, an aggregate of 1,030,578 shares of Company common stock were reserved for issuance under the Company’s employee benefit plans.