The Company incurred expenses and charges in connection with certain transactions that are considered to be infrequent or non-recurring in nature. The following table presents the impact of these charges on reported EPS for the dates presented:

The Company's balance sheet and results of operations as of and for the year ending December 31, 2016, include the impact of the Company's acquisition of KeyWorth Bank ("KeyWorth"), a Georgia state bank headquartered in Atlanta, Georgia, which was completed on April 1, 2016. As of the acquisition date, KeyWorth operated six offices in the Atlanta metropolitan area and had approximately $399 million in assets, approximately $284 million in total loans, and approximately $347 million in total deposits. The assets acquired and liabilities assumed were recorded at estimated fair value as of the acquisition date and are subject to change pending finalization of all valuations.

On December 8, 2016, the Company's wholly owned subsidiary, Renasant Bank (the "Bank"), entered into an agreement with the Federal Deposit Insurance Corporation (the "FDIC") that terminated all of the Bank's loss share agreements with the FDIC, which includes Single-Family Shared Loss and Commercial Shared Loss agreements. All rights and obligations of the Bank and the FDIC under the FDIC loss share agreements were eliminated under the termination agreement.  The Company incurred a one-time pre-tax charge of $2.1 million, or $1.4 million on an after-tax basis, in connection with the termination agreement. At December 31, 2016, the Company had $28.1 million in loans, $2.6 million of which were nonperforming, and $487 thousand in other real estate owned ("OREO") which had been previously covered under these loss share agreements.  

"We made significant achievements in 2016, and the financial results for the year are a testament to a well executed plan. Our diluted EPS of $2.17 per share represents our highest reported yearly earnings which was driven by the strong performance of our overall company coupled with the successful conversion and integration of KeyWorth's operations," commented Renasant Chairman and Chief Executive Officer, E. Robinson McGraw. "The results include our successful completion of the KeyWorth acquisition and a 22.97% annual growth in our legacy loan portfolio. As we look to 2017, we believe we are well positioned to continue to improve on profitability and earnings growth, which in turn will generate shareholder value."

Highlights from the fourth quarter and annual results of 2016 include the following:

Enhanced Profitability

• Total assets increased $773.4 million to $8.7 billion at December 31, 2016, as compared to $7.9 billion at December 31, 2015. Earning assets contributed $778.3 million of the increase year over year.
                                                     
• Loans not acquired increased $880.0 million, or 22.97%, to $4.7 billion from December 31, 2015. For the fourth quarter of 2016, the yield on loans was 5.02% compared to 5.03% for the same period in 2015. The yield on loans excluding the impact from purchase accounting adjustments during the fourth quarter of 2016 was 4.51% compared to 4.48% for the same period in 2015. The yield on loans was 4.95% for the full year of 2016 compared to 4.91% for 2015. The yield on loans excluding the impact from purchase accounting adjustments on loans was 4.47% and 4.50% for 2016 and 2015, respectively. 

• Total deposits increased $840.5 million, or 13.52%, to $7.1 billion from December 31, 2015, with noninterest bearing deposits growing 22.14% during the same time. Noninterest-bearing deposits averaged $1.47 billion, or 22.00% of average deposits, for 2016, compared to $1.13 billion, or 20.29% of average deposits, for 2015. For the fourth quarter of 2016, the cost of total deposits was 28 basis points, as compared to 22 basis points for the same period in 2015. The cost of total deposits was 27 basis points for the full year of 2016, as compared to 25 basis points in 2015.
                                                             
• Net interest income was $78.0 million for the fourth quarter of 2016, as compared to $72.4 million for the fourth quarter of 2015. Net interest margin was 4.24% for the fourth quarter of 2016, as compared to 4.33% for the fourth quarter of 2015. The following table reconciles reported net interest margin to net interest margin excluding the impact from purchase accounting adjustments on loans for the periods presented:

• Net interest income was $301.0 million for the year ended December 31, 2016, as compared to $241.4 million for the year ended December 31, 2015. Net interest margin was 4.22% for 2016, as compared to 4.16% for the prior year. The following table reconciles reported net interest margin to net interest margin excluding the impact from purchase accounting adjustments on loans for the periods presented:

• Noninterest income for the fourth quarter of 2016 was $30.1 million, as compared to $31.4 million in the same period of 2015. The decrease is driven by a decline in mortgage banking income resulting from rising interest rates during the fourth quarter of 2016. Noninterest income increased to $137.2 million for the full year of 2016, as compared to $108.3 million for 2015. The growth is primarily attributable to an increase in mortgage banking income, income from the Company's wealth management division and the KeyWorth acquisition. 
                                                                
• Noninterest expense was $71.4 million for the fourth quarter of 2016, as compared to $70.7 million for the fourth quarter of 2015 and $294.9 million for the full year of 2016, as compared to $245.1 million for 2015. Excluding nonrecurring charges for merger and conversion expenses, debt prepayment penalties and loss share termination, the increase from 2015 is primarily attributable to the addition of KeyWorth operations and strategic additions of personnel. 

The following table presents the Company's profitability metrics for the quarter and year ending December 31, 2016, including and excluding the impact of after-tax merger and conversion expenses, debt prepayment penalties and loss share termination:

Aggressively Managed Problem Credits  
Total nonperforming assets were $58.8 million at December 31, 2016, a decrease of $22.0 million from December 31, 2015, and consisted of $35.5 million in nonperforming loans (loans 90 days or more past due and nonaccrual loans) and $23.3 million in OREO.  

The Company's nonperforming loans and OREO that were purchased in previous acquisitions (collectively referred to as "acquired nonperforming assets") were $22.2 million and $17.4 million, respectively, at December 31, 2016, as compared to $30.5 million and $22.4 million, respectively, at December 31, 2015.  The acquired nonperforming assets were recorded at fair value at the time of acquisition, which significantly mitigates the Company's actual loss. As such, the remaining information in this release on nonperforming loans, OREO and the related asset quality ratios primarily focuses on non-acquired nonperforming assets.

• Non-acquired nonperforming loans decreased to $13.4 million, or 0.28% of total non-acquired loans, at December 31, 2016, from $15.0 million, or 0.39% of total non-acquired loans, at December 31, 2015. Early stage delinquencies, or loans 30-to-89 days past due, as a percentage of total loans were 0.23% at December 31, 2016, as compared to 0.19% at December 31, 2015. 
                                                       
• Non-acquired OREO decreased 54.35% to $5.9 million at December 31, 2016, from $13.0 million at December 31, 2015. Non-acquired OREO sales totaled $10.0 million in 2016 with $4.2 million occurring during the fourth quarter of 2016. 
                                                       
• The allowance for loan losses represents 0.69% of total loans at December 31, 2016, as compared to 0.78% at December 31, 2015. The allowance for loan losses represents 0.91% of nonaquired loans at December 31, 2016, as compared to 1.11% at December 31, 2015. 
                                                       
  • Net loan charge-offs were $4.8 million, or 0.31% of average total loans, for the fourth quarter of 2016, as compared to $1.4 million, or 0.10% of average total loans, for the same period in 2015. Net loan charge-offs were $7.2 million, or 0.12% of average total loans, for 2016, as compared to $4.6 million, or 0.10% of average total loans, for 2015. The increase year over year and quarter over quarter is attributable to bringing several problem credits to final resolution. The charges were fully reserved for in the Company's allowance for loan losses and resulted in no additional provision for loan loss expense.
                                                         
  • Provision for loan losses was $1.7 million for the fourth quarter of 2016, as compared to $1.8 million for the fourth quarter of 2016 and $7.5 million for the full year 2016, as compared to $4.8 million for 2015. The increase in the Company's provision year over year is primarily attributable to the aforementioned nonacquired loan growth.

Built Our Capital Ratios

• At December 31, 2016, Tier 1 leverage capital ratio was 10.59%, Common Equity Tier 1 ratio was 11.48%, Tier 1 risk-based bapital ratio was 12.86%, and total risk-based capital ratio was 15.03%. All regulatory ratios exceed the minimums required to be considered "well-capitalized." 
                                                 
• Tangible common equity ratio was 9.00% at December 31, 2016, as compared to 7.54% at December 31, 2015. 
                                                 
• In December 2016, the Company completed the underwritten public offering of 2,135,000 shares of the Company's common stock at a public offering price of $41.50 per share resulting in net proceeds to the Company of $84.1 million. 
                                                 
• In August 2016, the Company completed the public offering and sale of $60 million of the Company's 5.00% fixed-to-floating rate subordinated notes due September 1, 2026, and $40 million of its 5.50% fixed-to-floating rate subordinated notes due September 1, 2031 (collectively, the "Notes"). The Notes resulted in net proceeds to the Company of $98.2 million and qualify as Tier 2 capital.