Renasant Reports 2nd Quarter Fiscal 2009 Results

MISSISSAUGA, ONTARIO, Oct 23 (MARKET WIRE) --
Renasant Financial Partners Ltd. (TSX: REN) ("Renasant" or the
"Corporation") today reported results of operations for the second
quarter ended September 30, 2008. Financial performance was negative
reflecting the market impacts on the fair value of the embedded
derivatives in the bond portfolio. This eliminated the majority of the
first quarter increase in fair value.

Net loss for the second quarter of Fiscal 2009 was $1.8 million or $0.21
per share, down significantly from the $0.2 million or $0.02 per share
achieved in the corresponding period last year. On a year to date basis,
net loss was $0.9 million on $0.10 per share as compared with net income
of $0.5 million or $0.06 per share. Net loss from continuing operations
was $0.8 million or $0.09 per share year to date as compared with nominal
losses in the corresponding periods last year. All of the income last
year was earned in the discontinued trading business. Movements in
investment income resulting from changes in the values of the embedded
derivatives accounts for the majority of the change in net income.

General and administrative expenses incurred in the quarter were $0.5
million down from the $0.6 million incurred in the second quarter of last
year and on a year to date basis declined to $1.0 million from $1.3
million primarily the result of smaller infrastructure costs associated
with lower activity levels. The Corporation incurs a significant level of
fixed costs associated with being a public company (directors' fees,
audit fees, insurance, etc.) which does not decline with activity levels
and will keep expenses disproportionately high compared to its income
level.

Shareholder's equity declined by $3.5 million in the quarter to $24.1
million the result of the period loss inclusive of changes in other
comprehensive income. Regular quarterly dividends are not expected in the
foreseeable future. There was no issuer bid activity in the quarter. As
previously announced, the Corporation is proceeding with a Substantial
Issuer Bid, offering to repurchase up to 3.5 million shares at $1.75 per
share.

The requirements to reflect the bridge loan investments at their current
fair market value in the financial statements will result in a much
higher level of volatility in both assets and income from that
historically achieved. These investments reflect smaller companies
involved in the resource sector. The first quarter reflected significant
increases in the underlying value of the embedded derivatives while this
quarter reflected dramatic reductions. The fair value of these
investments has declined by approximately $1.8 million before tax in the
period from September 30, 2008 to the date of Renasant's second quarter
management's discussion and analysis dated October 22, 2008.

In the near term, the Corporation will continue to be focused on
resolving the remaining contingencies, optimizing investment
opportunities within acceptable risk profiles, and minimizing the expense
base of the Corporation.

Management's discussion and analysis, financial statements and other
disclosure information relating to the Corporation is available through
SEDAR at www.sedar.com.

Second Quarter Report Fiscal 2009

Renasant Financial Partners Ltd.

Management Discussion and Analysis

REPORT TO SHAREHOLDERS

This management's discussion and analysis ("MD&A") sets out Renasant
Financial Partners Ltd.'s ("Renasant" or the "Corporation") strategies
and provides an analysis of the financial performance for the three and
six month period ended September 30, 2008, significant risks facing the
business, and management's outlook. Historical results, including trends
which might appear, should not be taken as indicative of future
operations or results.

Additional information relating to Renasant Financial Partners Ltd.,
including the Corporation's Annual Information Form, can be found at
www.sedar.com.

FORWARD-LOOKING STATEMENTS DISCLAIMER

Statements contained herein that are not based on historical or current
fact, including without limitation statements containing the words
"anticipates," "believes," "may," "continue," "estimate," "expects," and
"will" and words of similar import, constitute "forward-looking
statements". Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause the actual results,
events or developments to be materially different from any future
results, events or developments expressed or implied by such
forward-looking statements. Such factors include, among others, the
following: general economic and business conditions, both nationally and
in the regions in which the Corporation operates; changes in business
strategy or development/acquisition plans; environmental exposures,
financing risk; existing governmental regulations and changes in, or the
failure to comply with, governmental regulations; liability and other
claims asserted against the Corporation; and other factors referred to in
the Corporation's filings with Canadian securities regulators. Given
these uncertainties, readers are cautioned not to place undue reliance on
such forward-looking statements. The Corporation does not assume the
obligation to update or revise any forward-looking statements.

OVERVIEW

Financial performance in the second quarter of Fiscal 2009 reflected the
market volatility and negative share implications of the recent credit
crisis and resultant recessionary environment on small cap commodity
companies in Canada. The requirement to reflect fair values on embedded
derivatives in certain of our loan portfolio has created an unusual
circumstance whereby investment income comprises movements in underlying
share value much more then the rate of return on the related investments
and in the current environment fluctuates widely. The first quarter
reflected significant increases in the underlying value of the embedded
derivatives while this quarter reflected dramatic reductions.

Operating performance in the quarter focused on the transitional
components of the trading business sale, continued management of the
litigation files and investment and expense management.

In the absence of fair value adjustments, the Corporation will continue
to generate losses as the expense base will exceed investment income.

INCOME

Net loss for the second quarter of Fiscal 2009 was $1.8 million or $0.21
per share down significantly from the net income of $0.2 million or $0.02
per share achieved in the corresponding period last year. On a year to
date basis, net loss was $0.9 million or $0.10 per share as compared with
net income of $0.5 million or $0.06 per share in the first two quarters
of Fiscal 2008. Movements in investment income resulting from changes in
the values of embedded derivatives accounts for the majority of the
change.

The Corporation, having sold its equipment trading business with effect
from April 1, 2008 has a small loss of $0.1 million or 0.01 per share
from transaction costs in the current year. This compares to $0.25
million or $0.02 per share in the second quarter of last year and $0.6
million or $0.07 per share of income from the discontinued trading
business in the six month period ended September 30, 2007.

Accordingly, net loss from continuing operations was $1.7 million in the
quarter or $0.20 per share and $0.8 million or $0.09 per share year to
date. This compares to nominal loss levels from continuing operations in
the corresponding periods last year.

Income from continuing operations comprises investment income less
general and administrative expenses. Investment income was a loss of $2.0
million in the quarter and income of $0.5 million year to date. This
compares to $0.6 million and $1.2 million of investment income in the
corresponding periods of Fiscal 2008. A substantial portion of the
investment income in the current year is generated from Renasant's
participation in a private bridge loan investment facility provided by a
Canadian asset management company. The remaining investments are with
junior resource companies in Western Canada. While some investments have
experienced payment deficiencies, the asset collateral coverage exceeds
the loan balance. In the later part of Fiscal 2008, the facility included
an equity conversion option within a few of the loan agreements. Until
recently, the strength of the resource equity market in Canada created
substantial value in the conversion features of these securities. During
the current quarter, however, the disruption in the equity markets in
general and Canadian commodity markets in particular has substantially
eliminated the value increments generated by the conversion features.

While Renasant historically does not undertake common share investments,
one loan was converted to equity in early calendar 2008 to enhance
investor return and is still retained by the Corporation. Portions of
another convertible debenture were exercised and immediately sold in the
current quarter prior to the substantial drop in share value.

Recently implemented accounting pronouncements on financial instruments
require that a value be assigned to the conversion features of these
loans and the change in value during the year be reflected in investment
income. Approximately $2.1 million of negative investment income was
recognized in the quarter associated with declines in the value of the
embedded derivative respecting the conversion features of these loans. On
a year to date basis, approximately 0.4 million of gains have been
generated. Once the loan is converted to a common share investment,
Renasant adopts "available for sale" accounting treatment for the
investment with changes in value being reflected in other comprehensive
income until the investment is sold. During the current quarter of Fiscal
2009, Renasant's common share investment declined in value by
approximately $1.8 million with the change in value recorded in other
comprehensive income. The accumulated loss in other comprehensive income
approximates $0.3 million. The requirement to account for changes in the
fair value of the bridge loan investments will result in considerable
volatility in the Corporation's asset levels and total income
particularly due to the focus on relatively small cap companies in the
resource section. The fair value of these investments has declined by
approximately $1.8 million before tax in the period from September 30,
2008 to the date of this MD&A.

Since Fiscal 2002, the Corporation has accumulated cash balances surplus
to the needs of the business. The Corporation maintains certain cash
levels to address working capital requirements, to meet contingency
obligations and invests the excess in securities to generate investment
returns. The Corporation continued to invest surplus cash in the current
year although the magnitude of the investment was modest. Renasant
generally invests its surplus cash in short term, investment grade
securities such as Bankers Acceptances. While investment returns are
fairly low, the superior credit rating provides an appropriate balance to
the bridge loan facility where the inherent credit worthiness is more
risky. Investment income from this area totaled $0.1 million in the
current quarter and $0.2 million year to date.

The Corporation continues to explore various investment opportunities to
ensure surplus funds remain adequately invested.

GENERAL AND ADMINISTRATION EXPENSES

General and Administrative ("G&A") costs decreased to $0.5 million from
$0.6 million in the second quarter of Fiscal 2009 and on a year to date
basis declined to $1.0 million from $1.3 million, primarily the result of
smaller infrastructure costs associated with lower activity levels. A
significant level of fixed costs associated with being a public company
continues to keep the G&A disproportionately high given the substantial
reduction in assets, activities and income. Audit and professional fees,
insurance premiums and director costs comprise a substantial portion of
the G&A, which in combination with the management services expense will
continue to keep the G&A at disproportionately high levels into the
future.

FOREIGN CURRENCY TRANSLATION EXPENSE

The Corporation has historically carried on a substantial portion of its
business in foreign jurisdictions, which are subject to currency
fluctuations. The Corporation's subsidiaries in the United States and
Europe are considered self-sustaining with cumulative gains and losses
arising from the translation of assets and liabilities recorded in other
comprehensive income. As a result of the sale of the trading business,
the Corporation has ceased to have currency risk in Europe and has
substantially reduced its exposure to currency fluctuations in the United
States. The foreign currency translation expense in the first quarter of
the year of $0.7 million reflects the accumulated currency loss on the
permanent reduction of the net investment in the self-sustaining foreign
operations associated with the sale.

The remaining balance of the foreign currency translation loss reflected
in the other comprehensive income of $0.3 million will be addressed once
the remaining capital is repatriated.

INCOME FROM DISCONTINUED OPERATIONS

The sale of the equipment trading business closed in June of 2008 with
effect at April 1, 2008. The net purchase price was approximately $3.7
million plus the assumption of approximately $1.8 million in liabilities.
No material gain or loss resulted from the sale. The cash purchase price
was reduced by a holdback balance of $0.5 million pending the completion
of confirmatory due diligence. Renasant has also entered into a service
agreement to provide transitional services to the purchaser on a fee
basis. The holdback value plus certain transitional costs incurred by the
Corporation have been reflected as receivables in the consolidated
balance sheet and are expected to be collected in the near term.

As a result of the effective date of the sale, no income from the
discontinued trading business was earned in the current quarter and a
small loss was generated as a result of transaction expenses. This
compares to approximately $0.3 million of trading margin in the second
quarter and $0.8 million year to date in Fiscal 2008 on revenues
totalling approximately $13.7 million. The applicable tax rate is a
function of the geographic composition of the income and results in an
after tax contribution of $0.6 million on a year to date basis in Fiscal
2008.

BALANCE SHEET

Total assets declined by approximately $4.9 million in the quarter a
result of the $9.1 million reduction in loan investments as certain of
these investments were sold, with the proceeds reflected in an increase
of $3.5 million in cash, along with a downward adjustment as the
investments were revalued to reflect the market value of the embedded
derivatives. The liability reduction was primarily the litigation
settlement. Shareholder's equity declined by $3.5 million to $24.1
million as a result of the period loss inclusive of the changes in the
other comprehensive income. Regular quarterly dividends are not expected
for the foreseeable future. There was no issuer bid activity in the
quarter with total shares outstanding remaining at approximately 8.6
million.

As a result of the existing cash balances, the settlement of the Nova
Scotia matter and the illiquidity of the Corporation's shares, the Board
of Directors in October decided to proceed with a Substantial Issuer Bid,
offering to repurchase up to 3.5 million shares of the Corporation at
$1.75 per share. The requisite materials to commence this process have
been recently forwarded to shareholders of record.

CONTINGENCIES

Detailed information on the outstanding litigation matters is provided in
Note 9(a) to the 2008 Consolidated Financial Statements. A mediation on
the Nova Scotia matter was held on July 21, 2008. As a result of the
mediation, a settlement was reached on all aspects of this litigation.
The three party resolution between the Corporation, the Province of Nova
Scotia and the financial institution which funded the contracts, resulted
in a cash payment by the Corporation and contract modifications to remove
the Corporation from any ongoing involvement in the transaction within
the value estimate provided in its existing litigation reserves.

The other litigation matter of significance is with the City of Waterloo
which remains in the examination for discovery phase.

A detailed review of the federal and provincial income tax reassessments
received by the Corporation is outlined in Note 9(b) to the 2008
Consolidated Financial Statements. There has been no change in the status
of these reassessments.

The Corporation has established a liability for contingencies
representing the estimated costs to the Corporation of settling the
remaining contingencies in a reasonable manner. Should any settlement
discussion prove unsuccessful, the Corporation intends to defend these
actions. Should the Corporation be unsuccessful in its defense or
settlement of one or more of these legal actions, there could be a
materially adverse effect on the Corporation's financial position and
future operations.

OUTLOOK

In the near term, the Corporation will continue to be focused on
resolving the remaining contingencies, optimizing investment
opportunities within acceptable risk profiles and minimizing the expense
base of the Corporation.

October 22, 2008

NOTICE OF NO AUDITOR

REVIEW OF INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an
auditor has not performed a review of the interim financial statements,
they must be accompanied by a notice indicating that the financial
statements have not been reviewed by an auditor.

The accompanying unaudited interim financial statements of the company
have been prepared by and are the responsibility of the company's
management.

The company's independent auditor has not performed a review of these
financial statements in accordance with the standards established by the
Canadian Institute of Chartered Accountants for a review of interim
financial statements by an entity's auditor.

Fraser R. Berrill Robert D. Wright
President and Senior Vice President and
Chief Executive Officer Chief Financial Officer

October 22, 2008

Financial Statements

RENASANT FINANCIAL PARTNERS LTD
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)

September 30, 2008 March 31, 2008
--------------------------------------
--------------------------------------
(Unaudited) (Audited)
ASSETS
Cash and cash equivalents $ 18,020 $ 15,209
Bridge loan investments (Note 4) 5,157 9,839
Receivables 1,293 212
Income taxes recoverable 5,397 3,201
Capital assets (Note 5) 282 376
Discontinued trading assets (Note 3) - 5,570
--------------------------------------
$ 30,149 $ 34,407
--------------------------------------
--------------------------------------

LIABILITIES
Accounts payable and accrued charges $ 4,982 $ 6,958
Future income tax liabilities 1,040 976
Discontinued trading liabilities (Note 3)
- 1,830
--------------------------------------
6,022 9,764
--------------------------------------

Contingencies and commitments (Note 7)

SHAREHOLDERS' EQUITY
Share capital (Note 6) 20,870 20,870
Accumulated other comprehensive loss (621) (983)
Retained earnings 3,878 4,756
--------------------------------------
24,127 24,643
--------------------------------------
$ 30,149 $ 34,407
--------------------------------------
--------------------------------------

RENASANT FINANCIAL PARTNERS LTD
CONSOLIDATED STATEMENTS OF INCOME ANDCOMPREHENSIVE INCOME
(in thousands of dollars except per share data)

for three months ended for the six months ended
---------------------------------------------------------
Sept 30, Sept 30, Sept 30, Sept 30,
2008 2007 2008 2007
(Unaudited) (Unaudited)

INVESTMENT INCOME (2,025) 620 $ 487 $ 1,175
---------------------------------------------------------

GENERAL AND
ADMINISTRATIVE
EXPENSES 532 643 1,018 1,252

FOREIGN CURRENCY
TRANSLATION
EXPENSE - - 702 -
---------------------------------------------------------

LOSS FROM
CONTINUING
OPERATIONS (2,557) (23) (1,233) (77)

(RECOVERY OF)
PROVISION
FOR INCOME
TAXES (842) 8 (412) (23)
---------------------------------------------------------
NET LOSS FROM
CONTINUING
OPERATIONS (1,715) (31) (821) (54)
---------------------------------------------------------

NET(LOSS) INCOME FROM
DISCONTINUED
TRADING OPERATIONS (57) 250 (57) 595
---------------------------------------------------------

NET (LOSS) INCOME $ (1,772) $ 219 $ (878) $ 541
---------------------------------------------------------

OTHER
COMPREHENSIVE
LOSS
Unrealized foreign
currency
translation
loss of
self-sustaining
foreign
operations 89 (455) (33) (1,255)
Unrealized loss net
on available for
sale financial
assets, net of tax (1,758) - (307) -
---------------------------------------------------------

TOTAL
COMPREHENSIVE
LOSS $ (3,441) $ (236) $ (1,218) $ (714)
---------------------------------------------------------
---------------------------------------------------------

NET INCOME PER
COMMON
SHARE -
BASIC AND
DILUTED
Continuing
operations $ (0.20) $ - $ (0.09) $ (0.01)
Discontinued
trading
operations $ (0.01) $ 0.02 $ (0.01) 0.07
---------------------------------------------------------
$ (0.21) $ 0.02 $ (0.10) $ 0.06
---------------------------------------------------------
---------------------------------------------------------

AVERAGE SHARES
OUTSTANDING
Basic and Fully
Diluted 8,607,298 8,655,426 8,607,298 8,673,344
---------------------------------------------------------
---------------------------------------------------------

RENASANT FINANCIAL PARTNERS LTD
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS AND
ACCUMULATED OTHER COMPREHENSIVE LOSS
(in thousands of dollars)

for three months ended for six months ended
---------------------------------------------------------
Sept 30, Sept 30, Sept 30, Sept 30,
2008 2007 2008 2007
---------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)

RETAINED EARNINGS
Balance,
beginning
of period $ 5,650 $ 3,832 $ 4,756 $ 3,510
Net (loss)
income
for the
period (1,772) 219 (878) 541
Discount
(premium)
on
cancellation of
shares - 28 - 28
---------------------------------------------------------
Balance, end of
period 3,878 4,079 3,878 4,079
---------------------------------------------------------

ACCUMULATED OTHER
COMPREHENSIVE
LOSS

Balance,
beginning
of period 1,048 (1,475) (983) (675)
Translation of
net assets in
self sustaining
foreign
operations 89 (455) (33) (1,255)
Foreign currency
loss realized
on reduction of
net investment
in
self-sustaining
foreign
operations - 702
Available for
sale
securities (1,758) - (307) -
---------------------------------------------------------
Balance, end of
period (621) (1,930) (621) (1,930)
---------------------------------------------------------

RENASANT FINANCIAL PARTNERS LTD
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars)

for three months ended for six months ended
---------------------------------------------------------
Sept 30, Sept 30, Sept 30, Sept 30,
2008 2007 2008 2007
---------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)

NET INFLOW (OUTFLOW) OF
CASH RELATED TO THE
FOLLOWING ACTIVITIES:
OPERATING
Net loss from
continuing
operations $ (1,715) $ (31) $ (821) $ (54)
Items not affecting
cash
Amortization of
capital assets 47 49 94 56
Unrealized fair
value increment on
bridge loan
investments 5,320 - 2,643 -
Future income tax
provision (633) - 64 -
Net decrease
(increase) in
receivables,
accounts payable
and accrued charges (1,755) 3,495 (972) 2,162
---------------------------------------------------------
1,264 3,513 1,008 2,164
---------------------------------------------------------

FINANCING
Repurchase of
shares, net - (143) - (143)
---------------------------------------------------------
0 (143) - (143)
---------------------------------------------------------

INVESTING
Reduction to
Investment in UK 22 - 22 -
(Increase)
reduction of bridge
loan investments,
net 2,180 (732) 1,733 3,971
Additions to
capital assets - (9) - (127)
---------------------------------------------------------
2,202 (741) 1,755 3,844
---------------------------------------------------------

EFFECT OF FOREIGN
EXCHANGE RATES ON
CASH AND CASH
EQUIVALENTS 102 (351) 105 (395)
---------------------------------------------------------

NET CASH INFLOW FROM
CONTINUING
OPERATIONS 3,568 2,278 2,868 5,470
---------------------------------------------------------

NET CASH OUTFLOW
FROM DISCONTINUED
OPERATIONS (57) (2,078) (57) (495)
---------------------------------------------------------

NET CASH (OUTFLOW)
INFLOW 3,511 200 2,811 4,975

Cash and cash
equivalents,
beginning of year 14,509 7,803 15,209 3,028
---------------------------------------------------------

CASH AND CASH
EQUIVALENTS, END OF
YEAR $ 18,020 $ 8,003 $ 18,020 $ 8,003
---------------------------------------------------------
---------------------------------------------------------
SUPPLEMENTAL CASH
FLOW DATA:

CONTINUING
OPERATIONS
Cash paid during
the year for:
Interest $ - $ - $ - $ -
Income taxes $ (86) $ 56 $ 1,438 $ 1,194

DISCONTINUED
OPERATIONS
Cash paid during
the year for:
Interest $ - $ - $ - $ -
Income taxes $ - $ 9 $ - $ (3)

Notes to the Consolidated Financial Statements

RENASANT FINANCIAL PARTNERS LTD.
Notes to the Consolidated Financial Statements
September 30, 2008
(all dollar amounts are in thousands)

1. BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES

These financial statements should be read in conjunction with the
Consolidated Financial Statements included in the Corporation's Annual
Report for 2008 which provides information necessary or useful to
understanding the Corporation's businesses and financial statement
presentation. In particular, the Corporation's significant accounting
policies and practices were presented in Note 2 to the Consolidated
Financial Statements.

The quarterly financial statements are unaudited. Financial information
in the First Quarter Report reflects any adjustments that are, in the
opinion of management, necessary to a fair presentation of the financial
position of the Corporation and the results of its operations and cash
flows for the interim periods, in accordance with generally accepted
accounting principles ("GAAP") in Canada.

The results reported in these financial statements should not be regarded
as necessarily indicative of results that may be expected for the entire
year.

2. CHANGES IN ACCOUNTING POLICY

Effective April 1, 2008, Renasant adopted the following Canadian
Institute of Chartered Accountants ("CICA") accounting standards:

Section 1535 - Capital Disclosure
Section 3862 - Financial Instruments - Disclosures
Section 3863 - Financial Instruments - Presentation

The adoption of these new standards resulted in additional disclosures
with regards to financial instruments and the Corporation objectives,
policies and processes for managing capital. The new standards have no
impact on the classification and/or valuation of the Corporation's
financial instruments.

3. DISCONTINUED BUSINESS

In June 2008, the Corporation finalized the sale of the trading business
to a special purpose LLC owned jointly by a significant shareholder of
the Corporation and the trading management group. The business parameters
involved selling the operating assets, essentially inventory and
receivables, at fair value which approximates net book value, and
assuming the accounts payable and accrued liabilities. The sale was
effective April 1, 2008.

As at September 30, the discontinued trading business comprised the
following:

-------------------------------------------------------------------------
Discontinued Trading Assets: September March
2008 2008
-------------------------------------------------------------------------
Receivables $ - $ 3,316
Inventory - 2,207
Capital assets - 47
-------------------------------------------------------------------------
$ - $ 5,570
-------------------------------------------------------------------------
-------------------------------------------------------------------------

-------------------------------------------------------------------------
Discontinued Trading Liabilities:
-------------------------------------------------------------------------

-------------------------------------------------------------------------
Accounts payable and accrued liabilities $ - $ 1,830
-------------------------------------------------------------------------
-------------------------------------------------------------------------

The following outlines the revenues, income before taxes and net income
of the discontinued trading business:

-------------------------------------------------------------------------
September September
2008 2007
-------------------------------------------------------------------------

Revenues $ - $ 13,718

Income before costs and expenses - 850
Costs and expenses 86 -
-------------------------------------------------------------------------
Total income from discontinued trading business
before income taxes (86) 850

Income taxes (29) 255
-------------------------------------------------------------------------
Net (loss) income from discontinued trading
business $ (57) $ 595
-------------------------------------------------------------------------
-------------------------------------------------------------------------

4. BRIDGE LOAN INVESTMENTS
The bridge loan investments comprise:
-------------------------------------------------------------------------
September March
2008 2008
-------------------------------------------------------------------------

Bridge loans $ 277 $ 1,958
Convertible debentures 2,109 4,382
Common shares 2,771 3,499
-------------------------------------------------------------------------
$ 5,157 $ 9,839
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Bridge loans represent funds advanced on relatively short term,
mezzanine loans. The loans are secured through charges on the underlying
assets. The fair value of these loans is assumed to approximate their
carrying value as they generally involve variable rates that reprice
frequently.

The Corporation is committed to invest a further $2,000 (March 31, 2008 -
$1,500) in bridge lending depending on customer activity.

The convertible debenture embedded derivatives are recorded at their fair
market value based on the quoted market price, net of transaction
expenses, with changes in market value reflected in income. The debenture
value approximates carrying value given variable rates which re-price
frequently.

Notes to the Consolidated Financial Statements

The common shares investment is recorded at fair market value based on
the quoted market value, net of transaction expenses, with changes in
value reflected in other comprehensive income.

In Fiscal 2009, the Corporation recognized $381 (March 31, 2008 $4,452)
in investment income related to the embedded derivatives on bridge loan
investments.

5. CAPITAL ASSETS

-------------------------------------------------------------------------
September March
2008 2008
-------------------------------------------------------------------------

Cost $ 829 $ 829
Accumulated amortization (547) (453)
-------------------------------------------------------------------------
$ 282 $ 376
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Amortization charges recorded in the statements of income with respect
to

capital assets amounted to $94 (2008 - $78).

6. SHARE CAPITAL

Issued Common Shares

Number of Shares Amount
-------------------------------------------------------------------------
Balance as at March 31, 2007 8,691,260 $ 21,078
-------------------------------------------------------------------------
Issued - -
Purchased for cancellation (83,962) (208)
-------------------------------------------------------------------------
Balance as at March 31, 2008 8,607,298 $ 20,870
Issued shares - -
Purchased for cancellation - -
-------------------------------------------------------------------------
Balance as at September 30, 2008 8,607,298 $ 20,870
-------------------------------------------------------------------------
-------------------------------------------------------------------------

7. CONTINGENCIES AND COMMITMENTS

Litigation

Detailed information on the outstanding litigation matters is provided in
Note 9(a) to the 2008 consolidated financial statements. As a result of a
mediation on the Nova Scotia litigation held July 21, 2008, a settlement
was reached on all aspects of this litigation. The three party resolution
between the Corporation, the Province of Nova Scotia and the financial
institution which funded the contracts, resulted in a cash payment by the
Corporation and contract modifications to remove the Corporation from any
ongoing involvement in the transaction within the value estimate provided
in its existing litigation reserves. Income Tax Reassessment

A detailed review of the federal and provincial income tax reassessments
received by the Corporation is outlined in Note 9(b) to the 2008
Consolidated Financial Statements. There has been no significant change
in the status of these reassessments.

8. RELATED PARTY TRANSACTIONS

During the course of the year, the Corporation entered into transactions
with related entities. These transactions are measured at the exchange
amount. The Corporation has access to bridge loan investments (Note 4)
through an entity under control of one of the shareholders of the
Corporation. The Corporation has an ongoing management agreement with a
related entity.

9. CAPITAL MANAGEMENT

The Corporation has no debt obligations or other covenants for which it
must comply. The Corporation's capital is managed to a level that
management and the Board feels comfortable that it is sufficient to meet
the potential obligations associated with an uncertain outcome in its
contingent events. If and when capital is considered surplus to that
requirement, consideration will be given to its return to shareholders.
The Corporation had adopted a conservative investment strategy to
preserve capital and generate income to offset as much of the expense
base as possible.

There were no changes in the Corporation's approach to capital management
in the period.

10. FINANCIAL INTSRUMENTS AND RISK MANAGEMENT

Pursuant to Canadian GAAP, financial instruments are classified into one
of the following five categories: held-for-trading, held to maturity
investments, loans and receivables, available-for-sale financial assets
or other financial liabilities. The carrying values of the Corporation's
financial instruments on the consolidated balance sheet are classified
into the following categories:

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September 30, 2008
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Held-for-trading $ 18,432
Loans and receivables $ 9,078
Available-for-sale financial assets $ 2,771
Other financial liabilities $ 4,983

Held-for-trading includes cash and cash equivalents, and embedded
derivatives contained in the convertible debentures of the bridge fund.

Loans and receivables includes receivables, income taxes recoverable, the
bridge loans and the non-derivative portion of the convertible debentures
contained in the bridge fund.

Available-for-sale financial assets comprise the common share holdings in
the bridge fund.

Other financial liabilities include all accounts payable and accrued
liabilities.

Fair values

The Corporation has determined, using considerable judgement, the
estimated fair values of its financial instruments based on the valuation
methodologies which are described below. The fair values of the
Corporation's financial instruments approximate their carrying values for
financial statement purposes.

The methods and assumptions used to estimate the fair value of each type
of financial instrument are as follows:

The fair values of cash and cash equivalents, receivables, income taxes
recoverable, accounts payable and accrued liabilities approximate their
carrying values given their short-term maturities.

The fair value of the loans are assumed to approximate fair value as they
bear interest at current market rates which are periodically subject to
changes in market conditions.

Fair value of the common shareholdings and embedded derivatives contained
in the convertible debentures reflects market conditions as evidenced by
the stock exchange value less the anticipated transaction costs
reflective of this value.

Risks arising from financial instruments and risk management

The Corporation's activities expose it to a variety of financial risks:
market risk (including foreign exchange and interest rate risks), credit
risk and liquidity risk. The Corporation's overall risk management
program focuses on the unpredictability of financial markets and seeks to
minimize potential adverse effects on the Corporation's financial
performance.

Risk management is the responsibility of management whose function is to
identify, evaluate and, where appropriate, hedge financial risks.
Material risks are monitored and reported to the audit committee on a
regular basis.

Market risk

The bridge loan investments involve relatively small, resource based
entities whose value is subject to significant fluctuations due to the
nature of their business and the lack of liquidity in their
shareholdings. The Corporation continues to closely monitor developments
in these entities which have for the most part been very successful. The
inability to control fund activities limits active management of these
transactions.

Foreign exchange risk

The Corporation has sold the trading business which operated in foreign
currencies and is in process of eliminating its currency exposure once
all aspects of the sale transaction are finalized.

Interest rate risk

The majority of the Corporation's investments are very short term or
reprice on a regular basis limiting the exposure to interest rate risk.

Credit risk

Credit risk arises from cash and cash equivalents held with banks and
financial intermediaries, as well as credit exposure to receivables and
loans. The maximum exposure to credit risk is equal to the carrying value
of the financial assets.

The objective of managing credit risk is to prevent losses in financial
assets and is satisfied by the following determinants.

The investment of surplus cash balances are in short term, investment
grade securities with minimal credit risk. The loan balances are subject
to asset collateral coverage in excess of the loan balance to mitigate
the obligor risk. Receivables are of a short term duration with obligors
known to the Corporation.

Liquidity risk

Liquidity risk arises through excess of financial obligations over
available financial assets due at any point in time. The Corporation's
objective in managing liquidity risk is to maintain sufficient readily
available reserves in order to meet its liquidity requirements at any
point in time. The Corporation achieves this by maintaining sufficient
cash and cash equivalents to meet all potential obligations.

11. COMPARATIVES

Certain comparative figures have been reclassified to conform with
current year's presentation.

Contacts:
Renasant Financial Partners Ltd.
Robert D. Wright
Senior Vice President & Chief Financial Officer
(905) 281-5897
Email: bwright@morguard.com
Website: www.renasant.ca

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