Trustmark (TRMK) 8-K Trustmark Corporation Announces Third Quarter Earnings

News Release

Trustmark Corporation Announces Third Quarter Earnings

Jackson, Miss. - October 17, 2006 - Trustmark Corporation (NASDAQ:TRMK) announced net income of $29.8 million in the third quarter of 2006, which represented basic earnings per share of $0.53. Trustmark’s third quarter net income produced returns on average shareholders’ equity and average assets of 14.23% and 1.39%, respectively. During the first nine months of 2006, Trustmark’s net income totaled $89.9 million, which represented basic earnings per share of $1.61. Trustmark’s performance during the first nine months of 2006 resulted in returns on average shareholders’ equity and average assets of 15.16% and 1.45%, respectively. Highlights include:

·   Successful merger and integration of Houston’s Republic Bancshares of Texas, Inc.

·   Excellent growth in loans and deposits

·   Solid credit quality

·   Continued investment in banking center expansion program

Richard G. Hickson, Chairman and CEO, commented, “Trustmark continued to make significant progress in advancing its strategic initiatives during the third quarter of 2006 as reflected by our successful merger and integration of Republic Bancshares of Texas on August 25. As a result, Trustmark significantly enhanced its position in this dynamic market and now has 11 banking centers with total loans and deposits of approximately $710 million and $771 million, respectively, serving the greater Houston area.”

“In addition, we achieved excellent loan and deposit growth while credit quality remained solid. During the third quarter of 2006 average loans totaled $6.3 billion, an increase of $421.5 million, or 7.1%, from figures one year earlier. While growth during the period was diversified geographically as well as by loan type, we are particularly pleased with the growth experienced in our Florida Panhandle and Houston, Texas markets as well as by our Corporate Lending Division,” said Hickson.

“Average deposits during the third quarter of 2006 were $6.5 billion, an increase of $949.0 million, or 17.1%, relative to the same period in 2005. We continued to focus on increasing core deposit relationships under attractive terms and experienced growth across much of our four-state franchise, with notable increases in areas affected by Hurricane Katrina,” said Hickson.

“We are pleased that Trustmark’s losses related to Hurricane Katrina have not been as great as originally anticipated. We have updated our estimates for probable losses resulting from Hurricane Katrina and reduced the allowance for loan losses by $1.4 million in the third quarter of 2006, which increased net income during the quarter by $888 thousand, or $0.016 per share. At September 30, 2006, Trustmark maintained specific Hurricane Katrina allocations in its allowance for loan losses of $3.4 million compared to $9.8 million at December 31, 2005,” said Hickson.

“Credit quality indicators remained solid during the third quarter. Non-performing assets totaled $31.0 million at September 30, 2006 and the allowance coverage for non-performing loans was 272%,” said Hickson.

“Our initiative to build additional banking centers in higher-growth markets within our franchise continues to be well received. Thus far in 2006, Trustmark has opened a total of six new banking centers in the Jackson, Memphis, and Houston suburban markets as well as the Mississippi Gulf Coast market. We anticipate opening one additional banking center during the remainder of 2006 as well as six to eight banking centers during 2007. This branching initiative reflects Trustmark’s commitment to build long-term value for shareholders through continued investment in attractive, growing markets,” said Hickson.

ADDITIONAL INFORMATION

As previously announced, Trustmark will host a conference call with analysts on Wednesday, October 18 at 10:00 a.m. Central Time to discuss the Corporation’s financial results. Interested parties may listen to the conference call by dialing (800) 817-4887, passcode 7006834or by clicking on the link provided under the Investor Relations section of our website at www.trustmark.com. A replay of the conference call will also be available through Wednesday, October 25 in archived format at the same web address or by calling (888) 203-1112, passcode 7006834.

Trustmark is a financial services company providing banking and financial solutions through over 150 offices and 2,700 associates in Florida, Mississippi, Tennessee and Texas. For additional information, visit our website at www.trustmark.com.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this document are not statements of historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements relating to anticipated future operating and financial performance measures, including net interest margin, credit quality, business initiatives, growth opportunities and growth rates, among other things and encompass any estimate, prediction, expectation, projection, opinion, anticipation, outlook or statement of belief included therein as well as the management assumptions underlying these forward-looking statements. Should one or more of these risks materialize, or should any such underlying assumptions prove to be significantly different, actual results may vary significantly from those anticipated, estimated, projected or expected.

These risks could cause actual results to differ materially from current expectations of Management and include, but are not limited to, changes in the level of nonperforming assets and charge-offs, local, state and national economic and market conditions, material changes in market interest rates, the costs and effects of litigation and of unexpected or adverse outcomes in such litigation, competition in loan and deposit pricing, as well as the entry of new competitors into our markets through de novo expansion and acquisitions, changes in existing regulations or the adoption of new regulations, natural disasters, acts of war or terrorism, changes in consumer spending, borrowings and savings habits, technological changes, changes in the financial performance or condition of Trustmark's borrowers, the ability to control expenses, changes in Trustmark's compensation and benefit plans, greater than expected costs or difficulties related to the integration of new products and lines of business and other risks described in Trustmark Corporation's filings with the Securities and Exchange Commission.

Although Management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Trustmark undertakes no obligation to update or revise any of this information, whether as the result of new information, future events or developments or otherwise.

Trustmark Contacts:

Investors:	Zach Wasson	Joseph Rein
	Executive Vice President and CFO	First Vice President
	601-208-6816	601-208-6898
Media:	Gray Wiggers
	Senior Vice President
	601-208-5942

  TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION September 30, 2006 ($ in thousands) (unaudited)

	Quarter Ended September 30,
AVERAGE BALANCES	2006			2005			$ Change			% Change
Securities AFS-taxable	$	863,757		$	1,133,718		$	(269,961	)		-23.8	%
Securities AFS-nontaxable		56,281			60,075			(3,794	)		-6.3	%
Securities HTM-taxable		198,513			208,221			(9,708	)		-4.7	%
Securities HTM-nontaxable		94,509			94,811			(302	)		-0.3	%
Total securities		1,213,060			1,496,825			(283,765	)		-19.0	%
Loans		6,336,043			5,914,589			421,454			7.1	%
Fed funds sold and rev repos		25,205			31,152			(5,947	)		-19.1	%
Total earning assets		7,574,308			7,442,566			131,742			1.8	%
Allowance for loan losses		(73,836	)		(66,120	)		(7,716	)		11.7	%
Cash and due from banks		325,817			313,434			12,383			4.0	%
Other assets		645,550			527,897			117,653			22.3	%
Total assets	$	8,471,839		$	8,217,777		$	254,062			3.1	%
Interest-bearing demand deposits	$	1,039,355		$	829,106		$	210,249			25.4	%
Savings deposits		1,669,894			1,488,974			180,920			12.2	%
Time deposits less than $100,000		1,533,155			1,323,998			209,157			15.8	%
Time deposits of $100,000 or more		880,505			674,440			206,065			30.6	%
Total interest-bearing deposits		5,122,909			4,316,518			806,391			18.7	%
Fed funds purchased and repos		432,486			637,923			(205,437	)		-32.2	%
Short-term borrowings		535,339			959,605			(424,266	)		-44.2	%
Long-term FHLB advances		-			205,812			(205,812	)		n/m
Junior subordinated debt securities		32,631			-			32,631			n/m
Total interest-bearing liabilities		6,123,365			6,119,858			3,507			0.1	%
Noninterest-bearing deposits		1,388,201			1,245,573			142,628			11.5	%
Other liabilities		130,811			99,102			31,709			32.0	%
Shareholders' equity		829,462			753,244			76,218			10.1	%
Total liabilities and equity	$	8,471,839		$	8,217,777		$	254,062			3.1	%
n/m - not meaningful

	Year-to-date September 30,
AVERAGE BALANCES	2006			2005			$ Change			% Change
Securities AFS-taxable	$	915,145		$	1,341,598		$	(426,453	)		-31.8	%
Securities AFS-nontaxable		58,176			63,372			(5,196	)		-8.2	%
Securities HTM-taxable		201,468			182,939			18,529			10.1	%
Securities HTM-nontaxable		93,403			91,420			1,983			2.2	%
Total securities		1,268,192			1,679,329			(411,137	)		-24.5	%
Loans		6,155,108			5,692,465			462,643			8.1	%
Fed funds sold and rev repos		27,164			32,435			(5,271	)		-16.3	%
Total earning assets		7,450,464			7,404,229			46,235			0.6	%
Allowance for loan losses		(74,786	)		(65,754	)		(9,032	)		13.7	%
Cash and due from banks		325,067			334,988			(9,921	)		-3.0	%
Other assets		592,634			530,551			62,083			11.7	%
Total assets	$	8,293,379		$	8,204,014		$	89,365			1.1	%
Interest-bearing demand deposits	$	932,196		$	1,177,438		$	(245,242	)		-20.8	%
Savings deposits		1,691,028			1,191,768			499,260			41.9	%
Time deposits less than $100,000		1,465,325			1,314,264			151,061			11.5	%
Time deposits of $100,000 or more		817,812			604,615			213,197			35.3	%
Total interest-bearing deposits		4,906,361			4,288,085			618,276			14.4	%
Fed funds purchased and repos		494,750			690,482			(195,732	)		-28.3	%
Short-term borrowings		592,602			938,206			(345,604	)		-36.8	%
Long-term FHLB advances		3,778			177,074			(173,296	)		-97.9	%
Junior subordinated debt securities		10,997			-			10,997			n/m
Total interest-bearing liabilities		6,008,488			6,093,847			(85,359	)		-1.4	%
Noninterest-bearing deposits		1,379,921			1,274,571			105,350			8.3	%
Other liabilities		112,366			82,766			29,600			35.8	%
Shareholders' equity		792,604			752,830			39,774			5.3	%
Total liabilities and equity	$	8,293,379		$	8,204,014		$	89,365			1.1	%
n/m - not meaningful

	September 30,
PERIOD END BALANCES	2006			2005			$ Change			% Change
Securities available for sale	$	862,482		$	1,143,524		$	(281,042	)		-24.6	%
Securities held to maturity		289,125			296,962			(7,837	)		-2.6	%
Total securities		1,151,607			1,440,486			(288,879	)		-20.1	%
Loans held for sale		125,988			127,209			(1,221	)		-1.0	%
Loans		6,538,872			5,873,257			665,615			11.3	%
Fed funds sold and rev repos		6,907			15,685			(8,778	)		-56.0	%
Total earning assets		7,823,374			7,456,637			366,737			4.9	%
Allowance for loan losses		(75,539	)		(75,750	)		211			-0.3	%
Cash and due from banks		348,397			398,027			(49,630	)		-12.5	%
Mortgage servicing rights		66,526			57,345			9,181			16.0	%
Goodwill		290,753			137,268			153,485			111.8	%
Identifiable intangible assets		45,704			29,637			16,067			54.2	%
Other assets		370,339			325,716			44,623			13.7	%
Total assets	$	8,869,554		$	8,328,880		$	540,674			6.5	%
Noninterest-bearing deposits	$	1,580,533		$	1,358,192		$	222,341			16.4	%
Interest-bearing deposits		5,541,680			4,487,250			1,054,430			23.5	%
Total deposits		7,122,213			5,845,442			1,276,771			21.8	%
Fed funds purchased and repos		258,463			519,173			(260,710	)		-50.2	%
Short-term borrowings		430,210			926,595			(496,385	)		-53.6	%
Long-term FHLB advances		-			205,789			(205,789	)		n/m
Junior subordinated debt securities		70,104			-			70,104			n/m
Other liabilities		98,634			99,327			(693	)		-0.7	%
Total liabilities		7,979,624			7,596,326			383,298			5.0	%
Common stock		12,212			11,655			557			4.8	%
Surplus		156,625			69,362			87,263			125.8	%
Retained earnings		732,781			661,764			71,017			10.7	%
Accum other comprehensive
loss, net of tax		(11,688	)		(10,227	)		(1,461	)		n/m
Total shareholders' equity		889,930			732,554			157,376			21.5	%
Total liabilities and equity	$	8,869,554		$	8,328,880		$	540,674			6.5	%
Total interest-bearing liabilities	$	6,300,457		$	6,138,807		$	161,650			2.6	%
n/m - not meaningful

PERIOD END BALANCES	9/30/2006			12/31/2005			$ Change			% Change
Securities available for sale	$	862,482		$	1,041,754		$	(179,272	)		-17.2	%
Securities held to maturity		289,125			294,902			(5,777	)		-2.0	%
Total securities		1,151,607			1,336,656			(185,049	)		-13.8	%
Loans held for sale		125,988			146,936			(20,948	)		-14.3	%
Loans		6,538,872			5,893,439			645,433			11.0	%
Fed funds sold and rev repos		6,907			130,115			(123,208	)		-94.7	%
Total earning assets		7,823,374			7,507,146			316,228			4.2	%
Allowance for loan losses		(75,539	)		(76,691	)		1,152			-1.5	%
Cash and due from banks		348,397			387,930			(39,533	)		-10.2	%
Mortgage servicing rights		66,526			58,424			8,102			13.9	%
Goodwill		290,753			137,368			153,385			111.7	%
Identifiable intangible assets		45,704			28,703			17,001			59.2	%
Other assets		370,339			346,870			23,469			6.8	%
Total assets	$	8,869,554		$	8,389,750		$	479,804			5.7	%
Noninterest-bearing deposits	$	1,580,533		$	1,556,142		$	24,391			1.6	%
Interest-bearing deposits		5,541,680			4,726,672			815,008			17.2	%
Total deposits		7,122,213			6,282,814			839,399			13.4	%
Fed funds purchased and repos		258,463			492,853			(234,390	)		-47.6	%
Short-term borrowings		430,210			775,402			(345,192	)		-44.5	%
Long-term FHLB advances		-			5,726			(5,726	)		n/m
Junior subordinated debt securities		70,104			-			70,104			n/m
Other liabilities		98,634			91,492			7,142			7.8	%
Total liabilities		7,979,624			7,648,287			331,337			4.3	%
Common stock		12,212			11,620			592			5.1	%
Surplus		156,625			65,374			91,251			139.6	%
Retained earnings		732,781			677,781			55,000			8.1	%
Accum other comprehensive
loss, net of tax		(11,688	)		(13,312	)		1,624			n/m
Total shareholders' equity		889,930			741,463			148,467			20.0	%
Total liabilities and equity	$	8,869,554		$	8,389,750		$	479,804			5.7	%
Total interest-bearing liabilities	$	6,300,457		$	6,000,653		$	299,804			5.0	%
n/m - not meaningful

	Quarter Ended September 30,
INCOME STATEMENTS	2006			2005		$ Change			% Change
Interest and fees on loans-FTE	$	113,421		$	92,589	$	20,832			22.5	%
Interest on securities-taxable		10,710			13,358		(2,648	)		-19.8	%
Interest on securities-tax exempt-FTE		2,773			2,846		(73	)		-2.6	%
Interest on fed funds sold and rev repos		346			287		59			20.6	%
Other interest income		56			15		41			273.3	%
Total interest income-FTE		127,306			109,095		18,211			16.7	%
Interest on deposits		41,781			21,415		20,366			95.1	%
Interest on fed funds pch and repos		4,896			5,050		(154	)		-3.0	%
Other interest expense		7,890			11,591		(3,701	)		-31.9	%
Total interest expense		54,567			38,056		16,511			43.4	%
Net interest income-FTE		72,739			71,039		1,700			2.4	%
Provision for loan losses		(81	)		12,127		(12,208	)		n/m
Net interest income after provision-FTE		72,820			58,912		13,908			23.6	%
Service charges on deposit accounts		14,360			13,025		1,335			10.2	%
Insurance commissions		8,935			9,294		(359	)		-3.9	%
Wealth management		5,770			5,293		477			9.0	%
General banking - other		5,668			5,226		442			8.5	%
Mortgage banking, net		1,131			3,290		(2,159	)		n/m
Other, net		3,559			8,028		(4,469	)		-55.7	%
Nonint inc-excl sec gains (losses)		39,423			44,156		(4,733	)		-10.7	%
Security gains (losses)		645			45		600			n/m
Total noninterest income		40,068			44,201		(4,133	)		-9.4	%
Salaries and employee benefits		40,231			37,808		2,423			6.4	%
Services and fees		9,240			8,269		971			11.7	%
Net occupancy-premises		4,479			3,956		523			13.2	%
Equipment expense		3,731			3,653		78			2.1	%
Other expense		8,144			7,293		851			11.7	%
Total noninterest expense		65,825			60,979		4,846			7.9	%
Income before income taxes		47,063			42,134		4,929			11.7	%
Tax equivalent adjustment		2,109			2,052		57			2.8	%
Income taxes		15,193			13,861		1,332			9.6	%
Net income	$	29,761		$	26,221	$	3,540			13.5	%
Earnings per share
Basic	$	0.53		$	0.46	$	0.07			15.2	%
Diluted	$	0.52		$	0.46	$	0.06			13.0	%
Weighted average shares outstanding
Basic		56,590,964			56,406,072					0.3	%
Diluted		56,830,753			56,543,248					0.5	%
Period end shares outstanding		58,611,242			55,935,184					4.8	%
Dividends per share	$	0.2100		$	0.2000					5.0	%
n/m - not meaningful

	Year-to-date September 30,
INCOME STATEMENTS	2006			2005			$ Change			% Change
Interest and fees on loans-FTE	$	315,347		$	257,274		$	58,073			22.6	%
Interest on securities-taxable		33,589			43,085			(9,496	)		-22.0	%
Interest on securities-tax exempt-FTE		8,335			8,626			(291	)		-3.4	%
Interest on fed funds sold and rev repos		1,018			703			315			44.8	%
Other interest income		107			57			50			87.7	%
Total interest income-FTE		358,396			309,745			48,651			15.7	%
Interest on deposits		105,225			56,109			49,116			87.5	%
Interest on fed funds pch and repos		15,700			13,693			2,007			14.7	%
Other interest expense		22,552			28,501			(5,949	)		-20.9	%
Total interest expense		143,477			98,303			45,174			46.0	%
Net interest income-FTE		214,919			211,442			3,477			1.6	%
Provision for loan losses		(5,029	)		16,352			(21,381	)		n/m
Net interest income after provision-FTE		219,948			195,090			24,858			12.7	%
Service charges on deposit accounts		39,357			38,950			407			1.0	%
Insurance commissions		26,002			25,526			476			1.9	%
Wealth management		17,246			15,950			1,296			8.1	%
General banking - other		16,333			15,262			1,071			7.0	%
Mortgage banking, net		7,481			3,895			3,586			n/m
Other, net		7,827			13,125			(5,298	)		-40.4	%
Nonint inc-excl sec gains (losses)		114,246			112,708			1,538			1.4	%
Security gains (losses)		1,895			(4,009	)		5,904			n/m
Total noninterest income		116,141			108,699			7,442			6.8	%
Salaries and employee benefits		119,175			112,412			6,763			6.0	%
Services and fees		26,983			25,331			1,652			6.5	%
Net occupancy-premises		12,433			11,308			1,125			9.9	%
Equipment expense		10,963			11,461			(498	)		-4.3	%
Other expense		23,535			21,870			1,665			7.6	%
Total noninterest expense		193,089			182,382			10,707			5.9	%
Income before income taxes		143,000			121,407			21,593			17.8	%
Tax equivalent adjustment		6,430			6,137			293			4.8	%
Income taxes		46,716			40,062			6,654			16.6	%
Net income	$	89,854		$	75,208		$	14,646			19.5	%
Earnings per share
Basic	$	1.61		$	1.32		$	0.29			22.0	%
Diluted	$	1.60		$	1.32		$	0.28			21.2	%
Weighted average shares outstanding
Basic		55,954,020			56,874,476						-1.6	%
Diluted		56,107,748			57,011,428						-1.6	%
Period end shares outstanding		58,611,242			55,935,184						4.8	%
Dividends per share	$	0.8400		$	0.6000						40.0	%
n/m - not meaningful

	September 30,
NONPERFORMING ASSETS	2006		2005		$ Change		% Change
Nonaccrual loans	$	27,758	$	27,153	$	605		2.2	%
Restructured loans		-		-		-
Total nonperforming loans		27,758		27,153		605		2.2	%
Other real estate		3,284		2,649		635		24.0	%
Total nonperforming assets		31,042		29,802		1,240		4.2	%
Loans past due over 90 days
Included in loan portfolio		3,721		1,655		2,066		124.8	%
Serviced GNMA loans eligible for repch		12,783		8,434		4,349		51.6	%
Total loans past due over 90 days		16,504		10,089		6,415		63.6	%
Total nonperforming assets plus past
due over 90 days	$	47,546	$	39,891	$	7,655		19.2	%

	Quarter Ended September 30,
ALLOWANCE FOR LOAN LOSSES	2006			2005			$ Change			% Change
Beginning Balance	$	71,846		$	65,902		$	5,944			9.0	%
Charge-offs		(4,056	)		(4,538	)		482			-10.6	%
Recoveries		2,513			2,259			254			11.2	%
Provision for loan losses		(81	)		12,127			(12,208	)		n/m
Allowance of acquired bank		5,317			-			5,317			n/m
Ending Balance	$	75,539		$	75,750		$	(211	)		-0.3	%

RATIOS
ROA	1.39	%	1.27	%
ROE	14.23	%	13.81	%
Return on average tangible equity	19.62	%	17.76	%
Equity generation rate	8.59	%	7.81	%
EOP equity/ EOP assets	10.03	%	8.80	%
Average equity/average assets	9.79	%	9.17	%
Interest margin - Yield - FTE	6.67	%	5.82	%
Interest margin - Cost - FTE	2.86	%	2.03	%
Net interest margin - FTE	3.81	%	3.79	%
Rate on interest-bearing liabilities	3.54	%	2.47	%
Efficiency ratio	58.70	%	55.89	%
Net charge offs/average loans	0.10	%	0.15	%
Provision for loan losses/average loans	-0.01	%	0.81	%
Nonperforming loans/total loans	0.42	%	0.46	%
Nonperforming assets/total loans	0.47	%	0.51	%
Nonperforming assets/total loans+ORE	0.47	%	0.51	%
ALL/nonperforming loans	272.13	%	278.97	%
ALL/total loans	1.16	%	1.29	%
Net loans/total assets	72.87	%	69.61	%

COMMON STOCK PERFORMANCE
Market value of stock-Close	$	31.43		$	27.85
Market value of stock-High	$	32.78		$	30.80
Market value of stock-Low	$	28.31		$	26.63
Book value of stock	$	15.18		$	13.10
Tangible book value of stock	$	9.44		$	10.11
Tangible equity	$	553,473		$	565,649
Market/Book value of stock		207.05	%		212.60	%

OTHER DATA
EOP Employees - FTE	2,674	2,601

n/m - not meaningful

	Year-to-date September 30,
ALLOWANCE FOR LOAN LOSSES	2006			2005			$ Change			% Change
Beginning Balance	$	76,691		$	64,757		$	11,934			18.4	%
Charge-offs		(9,874	)		(12,163	)		2,289			-18.8	%
Recoveries		8,434			6,804			1,630			24.0	%
Provision for loan losses		(5,029	)		16,352			(21,381	)		n/m
Allowance of acquired bank		5,317			-			5,317			n/m
Ending Balance	$	75,539		$	75,750		$	(211	)		-0.3	%

RATIOS
ROA	1.45	%	1.23	%
ROE	15.16	%	13.36	%
Return on average tangible equity	19.81	%	17.20	%
Equity generation rate	7.25	%	7.29	%
EOP equity/ EOP assets	10.03	%	8.80	%
Average equity/average assets	9.56	%	9.18	%
Interest margin - Yield - FTE	6.43	%	5.59	%
Interest margin - Cost - FTE	2.57	%	1.78	%
Net interest margin - FTE	3.86	%	3.82	%
Rate on interest-bearing liabilities	3.19	%	2.16	%
Efficiency ratio	58.86	%	57.17	%
Net charge offs/average loans	0.03	%	0.13	%
Provision for loan losses/average loans	-0.11	%	0.38	%
Nonperforming loans/total loans	0.42	%	0.46	%
Nonperforming assets/total loans	0.47	%	0.51	%
Nonperforming assets/total loans+ORE	0.47	%	0.51	%
ALL/nonperforming loans	272.13	%	278.97	%
ALL/total loans	1.16	%	1.29	%
Net loans/total assets	72.87	%	69.61	%

COMMON STOCK PERFORMANCE
Market value of stock-Close	$	31.43		$	27.85
Market value of stock-High	$	32.78		$	31.15
Market value of stock-Low	$	27.01		$	26.63
Book value of stock	$	15.18		$	13.10
Tangible book value of stock	$	9.44		$	10.11
Tangible equity	$	553,473		$	565,649
Market/Book value of stock		207.05	%		212.60	%

n/m - not meaningful

	Quarter Ended
AVERAGE BALANCES	9/30/2006			6/30/2006			$ Change			% Change
Securities AFS-taxable	$	863,757		$	908,736		$	(44,979	)		-4.9	%
Securities AFS-nontaxable		56,281			58,265			(1,984	)		-3.4	%
Securities HTM-taxable		198,513			203,272			(4,759	)		-2.3	%
Securities HTM-nontaxable		94,509			92,947			1,562			1.7	%
Total securities		1,213,060			1,263,220			(50,160	)		-4.0	%
Loans		6,336,043			6,078,847			257,196			4.2	%
Fed funds sold and rev repos		25,205			28,513			(3,308	)		-11.6	%
Total earning assets		7,574,308			7,370,580			203,728			2.8	%
Allowance for loan losses		(73,836	)		(73,679	)		(157	)		0.2	%
Cash and due from banks		325,817			315,722			10,095			3.2	%
Other assets		645,550			569,029			76,521			13.4	%
Total assets	$	8,471,839		$	8,181,652		$	290,187			3.5	%
Interest-bearing demand deposits	$	1,039,355		$	914,548		$	124,807			13.6	%
Savings deposits		1,669,894			1,666,594			3,300			0.2	%
Time deposits less than $100,000		1,533,155			1,425,602			107,553			7.5	%
Time deposits of $100,000 or more		880,505			778,831			101,674			13.1	%
Total interest-bearing deposits		5,122,909			4,785,575			337,334			7.0	%
Fed funds purchased and repos		432,486			522,632			(90,146	)		-17.2	%
Short-term borrowings		535,339			609,137			(73,798	)		-12.1	%
Long-term FHLB advances		-			5,650			(5,650	)		n/m
Junior subordinated debt securities		32,631			-			32,631			n/m
Total interest-bearing liabilities		6,123,365			5,922,994			200,371			3.4	%
Noninterest-bearing deposits		1,388,201			1,374,068			14,133			1.0	%
Other liabilities		130,811			102,611			28,200			27.5	%
Shareholders' equity		829,462			781,979			47,483			6.1	%
Total liabilities and equity	$	8,471,839		$	8,181,652		$	290,187			3.5	%

n/m - not meaningful

PERIOD END BALANCES	9/30/2006			6/30/2006			$ Change			% Change
Securities available for sale	$	862,482		$	905,573		$	(43,091	)		-4.8	%
Securities held to maturity		289,125			296,246			(7,121	)		-2.4	%
Total securities		1,151,607			1,201,819			(50,212	)		-4.2	%
Loans held for sale		125,988			127,107			(1,119	)		-0.9	%
Loans		6,538,872			6,005,936			532,936			8.9	%
Fed funds sold and rev repos		6,907			33,420			(26,513	)		-79.3	%
Total earning assets		7,823,374			7,368,282			455,092			6.2	%
Allowance for loan losses		(75,539	)		(71,846	)		(3,693	)		5.1	%
Cash and due from banks		348,397			353,888			(5,491	)		-1.6	%
Mortgage servicing rights		66,526			68,981			(2,455	)		-3.6	%
Goodwill		290,753			137,368			153,385			111.7	%
Identifiable intangible assets		45,704			26,706			18,998			71.1	%
Other assets		370,339			351,209			19,130			5.4	%
Total assets	$	8,869,554		$	8,234,588		$	634,966			7.7	%
Noninterest-bearing deposits	$	1,580,533		$	1,453,178		$	127,355			8.8	%
Interest-bearing deposits		5,541,680			4,910,135			631,545			12.9	%
Total deposits		7,122,213			6,363,313			758,900			11.9	%
Fed funds purchased and repos		258,463			487,010			(228,547	)		-46.9	%
Short-term borrowings		430,210			532,418			(102,208	)		-19.2	%
Junior subordinated debt securities		70,104			-			70,104			n/m
Other liabilities		98,634			90,572			8,062			8.9	%
Total liabilities		7,979,624			7,473,313			506,311			6.8	%
Common stock		12,212			11,514			698			6.1	%
Surplus		156,625			51,511			105,114			204.1	%
Retained earnings		732,781			715,345			17,436			2.4	%
Accum other comprehensive
loss, net of tax		(11,688	)		(17,095	)		5,407			-31.6	%
Total shareholders' equity		889,930			761,275			128,655			16.9	%
Total liabilities and equity	$	8,869,554		$	8,234,588		$	634,966			7.7	%
Total interest-bearing liabilities	$	6,300,457		$	5,929,563		$	370,894			6.3	%
n/m - not meaningful

	Quarter Ended
INCOME STATEMENTS	9/30/2006			6/30/2006			$ Change			% Change
Interest and fees on loans-FTE	$	113,421		$	103,778		$	9,643			9.3	%
Interest on securities-taxable		10,710			11,310			(600	)		-5.3	%
Interest on securities-tax exempt-FTE		2,773			2,759			14			0.5	%
Interest on fed funds sold and rev repos		346			365			(19	)		-5.2	%
Other interest income		56			31			25			80.6	%
Total interest income-FTE		127,306			118,243			9,063			7.7	%
Interest on deposits		41,781			33,469			8,312			24.8	%
Interest on fed funds pch and repos		4,896			5,748			(852	)		-14.8	%
Other interest expense		7,890			7,301			589			8.1	%
Total interest expense		54,567			46,518			8,049			17.3	%
Net interest income-FTE		72,739			71,725			1,014			1.4	%
Provision for loan losses		(81	)		(1,964	)		1,883			-95.9	%
Net interest income after provision-FTE		72,820			73,689			(869	)		-1.2	%
Service charges on deposit accounts		14,360			13,308			1,052			7.9	%
Insurance commissions		8,935			8,718			217			2.5	%
Wealth management		5,770			5,865			(95	)		-1.6	%
General banking - other		5,668			5,470			198			3.6	%
Mortgage banking, net		1,131			2,898			(1,767	)		-61.0	%
Other, net		3,559			2,740			819			29.9	%
Nonint inc-excl sec gains		39,423			38,999			424			1.1	%
Security gains		645			384			261			68.0	%
Total noninterest income		40,068			39,383			685			1.7	%
Salaries and employee benefits		40,231			39,567			664			1.7	%
Services and fees		9,240			8,979			261			2.9	%
Net occupancy-premises		4,479			4,070			409			10.0	%
Equipment expense		3,731			3,589			142			4.0	%
Other expense		8,144			7,547			597			7.9	%
Total noninterest expense		65,825			63,752			2,073			3.3	%
Income before income taxes		47,063			49,320			(2,257	)		-4.6	%
Tax equivalent adjustment		2,109			2,107			2			0.1	%
Income taxes		15,193			16,439			(1,246	)		-7.6	%
Net income	$	29,761		$	30,774		$	(1,013	)		-3.3	%
Earnings per share
Basic	$	0.53		$	0.55		$	(0.02	)		-3.6	%
Diluted	$	0.52		$	0.55		$	(0.03	)		-5.5	%
Weighted average shares outstanding
Basic		56,590,964			55,564,866						1.8	%
Diluted		56,830,753			55,834,174						1.8	%
Period end shares outstanding		58,611,242			55,262,232						6.1	%
Dividends per share	$	0.2100		$	0.2100						0.0	%
n/m - not meaningful

	Quarter Ended
NONPERFORMING ASSETS	9/30/2006		6/30/2006		$ Change			% Change
Nonaccrual loans	$	27,758	$	25,119	$	2,639			10.5	%
Restructured loans		-		-		-
Total nonperforming loans		27,758		25,119		2,639			10.5	%
Other real estate		3,284		3,107		177			5.7	%
Total nonperforming assets		31,042		28,226		2,816			10.0	%
Loans past due over 90 days
Included in Loan Portfolio		3,721		6,578		(2,857	)		-43.4	%
Serviced GNMA loans eligible for repch		12,783		15,957		(3,174	)		-19.9	%
Total loans past due over 90 days		16,504		22,535		(6,031	)		-26.8	%
Total nonperforming assets plus past
due over 90 days	$	47,546	$	50,761	$	(3,215	)		-6.3	%

	Quarter Ended
ALLOWANCE FOR LOAN LOSSES	9/30/2006			6/30/2006			$ Change			% Change
Beginning Balance	$	71,846		$	73,542		$	(1,696	)		-2.3	%
Charge-offs		(4,056	)		(2,983	)		(1,073	)		36.0	%
Recoveries		2,513			3,251			(738	)		-22.7	%
Provision for loan losses		(81	)		(1,964	)		1,883			-95.9	%
Allowance of acquired bank		5,317			-			5,317			n/m
Ending Balance	$	75,539		$	71,846		$	3,693			5.1	%

RATIOS
ROA	1.39	%	1.51	%
ROE	14.23	%	15.78	%
Return on average tangible equity	19.62	%	20.00	%
Equity generation rate	8.59	%	9.76	%
EOP equity/ EOP assets	10.03	%	9.24	%
Average equity/average assets	9.79	%	9.56	%
Interest margin - Yield - FTE	6.67	%	6.43	%
Interest margin - Cost - FTE	2.86	%	2.53	%
Net interest margin - FTE	3.81	%	3.90	%
Rate on interest-bearing liabilities	3.54	%	3.15	%
Efficiency ratio	58.70	%	57.72	%
Net charge offs/average loans	0.10	%	-0.02	%
Provision for loan losses/average loans	-0.01	%	-0.13	%
Nonperforming loans/total loans	0.42	%	0.42	%
Nonperforming assets/total loans	0.47	%	0.47	%
Nonperforming assets/total loans+ORE	0.47	%	0.47	%
ALL/nonperforming loans	272.13	%	286.02	%
ALL/total loans	1.16	%	1.20	%
Net loans/total assets	72.87	%	72.06	%

COMMON STOCK PERFORMANCE
Market value of stock-Close	$	31.43		$	30.97
Market value of stock-High	$	32.78		$	32.25
Market value of stock-Low	$	28.31		$	29.34
Book value of stock	$	15.18		$	13.78
Tangible book value of stock	$	9.44		$	10.81
Tangible equity	$	553,473		$	597,201
Market/Book value of stock		207.05	%		224.75	%

OTHER DATA
EOP Employees - FTE	2,674	2,585

n/m - not meaningful

  TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIALS September 30, 2006 ($ in thousands) (unaudited)

Note 1 - Financial Performance Non-GAAP

Management is presenting in the following table adjustments to net income as reported in accordance with generally accepted accounting principles for significant items resulting from Hurricane Katrina. Management believes this information will help users compare Trustmark’s current results to prior periods.

Financial Performance
Net Income Adjusted for Specific Items (Non-GAAP)
	Quarter Ended 9/30/06						Year-to-Date 9/30/06
	$			Basic EPS			$			Basic EPS
Net Income as reported – GAAP	$	29,761		$	0.526		$	89,854		$	1.606
Adjustments (net of taxes):
Less Hurricane Katrina reserves released
Provision for loan losses		(874	)		(0.015	)		(3,865	)		(0.069	)
Mortgage related charges		(14	)		(0.001	)		(694	)		(0.012	)
		(888	)		(0.016	)		(4,559	)		(0.081	)
Net Income adjusted for specific items (Non-GAAP)	$	28,873		$	0.510		$	85,295		$	1.525

On August 29, 2005, Hurricane Katrina struck the Mississippi Gulf Coast and Central and Eastern Mississippi causing significant damages. Immediately following the storm, Trustmark initiated a process to assess the storm’s impact on its customers and on Trustmark’s consolidated financial statements. In accordance with Statement of Financial Accounting Standards (SFAS) No. 5, “Accounting for Contingencies," Trustmark determined, through reasonable estimates, that specific losses were probable and initially increased its allowance for loan losses by $9.8 million and established other reserves for losses totaling $2.1 million, on a pre-tax basis.

Trustmark continually reevaluates its estimates for probable losses resulting from Hurricane Katrina. As a result, during 2006, Trustmark has released allowance for loan losses of $6.3 million and other reserves of $1.1 million on a pre-tax basis. At September 30, 2006, the allowance for loan losses included specific Katrina reserves totaling $3.4 million, comprised of $2.3 million for mortgage loans and $1.1 million for consumer loans. Management’s estimates, assumptions and judgments are based on information available as of the date of the consolidated financial statements; accordingly, as the information changes, actual results could differ from those estimates.

Note 2 - Loans and Allowance for Loan Losses

For the periods presented, loans consisted of the following:

	9/30/2006		6/30/2006		9/30/2005
Real estate loans:
Construction and land development	$	903,399	$	812,748	$	632,467
Secured by 1-4 family residential properties		1,865,395		1,837,392		2,061,788
Secured by nonfarm, nonresidential properties		1,310,191		1,110,566		994,316
Other		127,072		107,517		148,747
Loans to finance agricultural production		31,055		27,230		48,008
Commercial and industrial		1,115,452		948,647		863,815
Consumer		926,823		912,718		873,742
Obligations of states and political subdivisions		207,369		192,463		189,902
Other loans		52,116		56,655		60,472
Loans		6,538,872		6,005,936		5,873,257
Less Allowance for loan losses		75,539		71,846		75,750
Net Loans	$	6,463,333	$	5,934,090	$	5,797,507

The allowance for loans losses is maintained at a level believed adequate by management, based on estimated probable losses within the existing loan portfolio. Trustmark’s allowance for possible loan loss methodology is based on guidance provided in SEC Staff Accounting Bulletin No. 102, “Selected Loan Loss Allowance Methodology and Documentation Issues,” as well as other regulatory guidance. Accordingly, Trustmark’s methodology is based on historical loss experience by type of loan and internal risk ratings, homogeneous risk pools, and specific loss allocations, with adjustments considering current economic events and conditions. The provision for loan losses reflects loan quality trends, including the levels of and trends related to nonaccrual loans, past due loans, potential problem loans, criticized loans and net charge-offs or recoveries and other factors.

Note 3 - Mortgage Banking

For the periods presented, the carrying amount of mortgage servicing rights are as follows:

	9/30/06		6/30/06		9/30/05
Mortgage Servicing Rights	$	66,526	$	68,981	$	61,751
Valuation Allowance		-		-		(4,406	)
Mortgage Servicing Rights, net	$	66,526	$	68,981	$	57,345

On March 17, 2006, the Financial Accounting Standard Board (FASB) released SFAS No. 156, “Accounting for Servicing Financial Assets, an amendment of SFAS No. 140.” This statement amends SFAS No. 140 to require that all separately recognized servicing assets and liabilities be initially measured at fair value, if practical. The effective date of this statement is as of the beginning of its first fiscal year that begins after September 15, 2006, however early adoption is permitted as of the beginning of any fiscal year, provided the entity has not issued financial statements for the interim period. The initial recognition and measurement of servicing assets and servicing liabilities are required to be applied prospectively to transactions occurring after the effective date.

Trustmark elected to early adopt SFAS No. 156 in the first quarter of 2006 and has recorded its Mortgage Servicing Rights (MSR) and derivative hedged financial instruments utilized to mitigate risk inherent in the MSR at fair value. This election, effective January 1, 2006, increased MSR by $1.4 million while also increasing retained earnings by $0.8 million, net of taxes. For the quarter ended September 30, 2006, the fair value for MSR decreased by $7.1 million pretax and the cost of hedging decreased by $3.6 million pretax, which is included in mortgage banking, net, included in the consolidated income statements, as shown in the table below.

In the first quarter, Trustmark began utilizing derivative instruments to offset changes in the fair value of MSR attributable to changes in interest rates. Changes in the fair value of the derivative instrument are recorded in noninterest income in mortgage banking, net and are offset by the changes in the fair value of MSR, as shown in the table below. MSR fair values represent the effect of present value decay and the effect of changes in interest rates. Ineffectiveness of hedging MSR fair value is measured by comparing total hedge cost to the fair value of the MSR asset attributable to interest rate changes. During the third quarter, gross MSR values decreased $3.9 million due to changes in interest rates, while hedge profit totaled $3.6 million, resulting in net negative ineffectiveness from hedging of $0.3 million.

Prior to January 1, 2006, Trustmark purchased servicing rights were capitalized at cost. For loans originated and sold where the servicing rights had been retained, Trustmark allocated the cost of the loan and servicing right based on their relative fair values. MSR were amortized over the estimated period of the related net servicing income. MSR were evaluated quarterly for impairment and recorded as a valuation allowance. Impairment occurred when the estimated fair value of the MSR fell below its carrying value. 

The following table illustrates the components of mortgage banking, net included in noninterest income in the accompanying income statements:

	Quarter Ended									Year-to-date
	9/30/2006			6/30/2006			9/30/2005			9/30/2006			9/30/2005
Mortgage servicing income, net	$	3,279		$	3,239		$	3,070		$	9,853		$	9,254
Change in fair value MSR from market changes		(3,901	)		2,202			-			2,113			-
Change in fair value MSR from runoff		(3,202	)		(2,400	)		-			(7,654	)		-
Change in fair value of derivatives		3,551			(1,881	)		-			(886	)		-
Amortization of MSR		-			-			(2,750	)		-			(7,990	)
Impairment of MSR		-			-			3,727			-			1,638
Gain on sale of loans		1,057			1,613			(64	)		3,711			644
Other, net		347			125			(693	)		344			349
Mortgage banking, net	$	1,131		$	2,898		$	3,290		$	7,481		$	3,895

Note 4 - Nonperforming Assets

Government National Mortgage Association (GNMA) optional repurchase programs allow financial institutions to buy back individual delinquent mortgage loans that meet certain criteria from the securitized loan pool for which the institution provides servicing. At the servicer's option and without GNMA's prior authorization, the servicer may repurchase such a delinquent loan for an amount equal to 100 percent of the remaining principal balance of the loan. Under SFAS No. 140,“Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities-a replacement of SFAS No. 125,” this buy-back option is considered a conditional option until the delinquency criteria are met, at which time the option becomes unconditional. When Trustmark is deemed to have regained effective control over these loans, the loans can no longer be reported as sold and must be brought back onto the balance sheet as loans held for sale, regardless of whether Trustmark intends to exercise the buy-back option. During 2005, Trustmark began reporting delinquent GNMA loans that are eligible for repurchase as past due in accordance with their contractual repayment terms. At September 30, 2006, GNMA loans eligible for repurchase totaled $12.8 million compared with $16.0 million at June 30, 2006 and $8.4 million at September 30, 2005.

Note 5 - Earning Assets and Interest-Bearing Liabilities

The following table illustrates the yields on earning assets by category as well as the rates paid on interest-bearing liabilities on a tax equivalent basis:

	Quarter Ended									Year-to-date
	9/30/2006			6/30/2006			9/30/2005			9/30/2006			9/30/2005
Securities - Taxable		4.00	%		4.08	%		3.95	%		4.02	%		3.78	%
Securities - Nontaxable		7.30	%		7.32	%		7.29	%		7.35	%		7.45	%
Securities - Total		4.41	%		4.47	%		4.29	%		4.42	%		4.12	%
Loans		7.10	%		6.85	%		6.21	%		6.85	%		6.04	%
FF Sold & Rev Repo		5.45	%		5.13	%		3.66	%		5.01	%		2.90	%
Total Earning Assets		6.67	%		6.43	%		5.82	%		6.43	%		5.59	%
Interest-bearing Deposits		3.24	%		2.81	%		1.97	%		2.87	%		1.75	%
FF Pch & Repo		4.49	%		4.41	%		3.14	%		4.24	%		2.65	%
Borrowings		5.51	%		4.76	%		3.95	%		4.96	%		3.42	%
Total Interest-bearing Liabilities		3.54	%		3.15	%		2.47	%		3.19	%		2.16	%
Net interest margin		3.81	%		3.90	%		3.79	%		3.86	%		3.82	%

Note 6 - Business Combinations

On August 25, 2006, Trustmark completed its merger with Houston-based Republic Bancshares of Texas, Inc. (Republic) in a business combination accounted for by the purchase method of accounting. Trustmark purchased all the outstanding common and preferred shares of Republic for approximately $205.3 million. The purchase price includes approximately 3.3 million in common shares of Trustmark valued at $103.8 million, $100.0 million in cash and $1.5 million in acquisition-related costs. The purchase price allocations are preliminary and are subject to final determination and valuation of the fair value of assets acquired and liabilities assumed. At August 25, 2006, Republic had assets consisting of $19.6 million in cash and due from banks, $64.5 million in federal funds sold, $76.2 million in securities, $455.1 million in loans, $10.5 million in premises and equipment and $19.0 million in other assets as well as deposits of $594.0 million and borrowings and other liabilities of $4.7 million. These assets and liabilities have been recorded at fair value based on market conditions and risk characteristics at the acquisition date. Excess costs over tangible net assets acquired totaled $173.4 million, of which $19.3 million has been allocated to core deposits, $690 thousand to borrower relationships and $153.4 million to goodwill.

Note 7 - Issuance of Trust Preferred Securities and Junior Subordinated Debt Securities

On August 18, 2006, Trustmark completed a private placement of $60.0 million of trust preferred securities through a newly formed Delaware trust affiliate, Trustmark Preferred Capital Trust I, (the Trust). The trust preferred securities mature September 30, 2036, are redeemable at Trustmark’s option beginning after five years, and bear interest at a variable rate per annum equal to the three-month LIBOR plus 1.72%. Under applicable regulatory guidelines, these trust preferred securities qualify as Tier 1 capital.

The proceeds from the sale of the trust preferred securities were used by the Trust to purchase $61.856 million in aggregate principal amount of Trustmark’s junior subordinated debentures. The net proceeds to Trustmark from the sale of the notes to the Trust were used to finance its merger with Republic Bancshares of Texas, Inc.

The debentures were issued pursuant to a Junior Subordinated Indenture, dated August 18, 2006 between Trustmark, as issuer, and Wilmington Trust Company, as trustee. Like the trust preferred securities, the debentures bear interest at a variable rate per annum equal to the three-month LIBOR plus 1.72%. The debentures mature on September 30, 2036 but may be redeemed at the Trustmark’s option at anytime on or after September 30, 2011 or at anytime upon certain events, such as a change in the regulatory capital treatment of the debentures, the Trust being deemed an investment company or the occurrence of certain adverse tax events.

In addition, pursuant to the acquisition of Republic Bancshares of Texas, Inc. on August 25, 2006, Trustmark assumed the liability for $8.248 million in junior subordinated debt securities issued to Republic Bancshares Capital Trust I (Republic Trust), also a Delaware trust. Republic Trust used the proceeds from the issuance of $8.0 million in trust preferred securities to acquire the junior subordinated debt securities. Both the trust preferred securities and the junior subordinated debt securities mature on January 7, 2033, and are callable at the option of Trustmark, in whole or in part, on January 7, 2008. Both the trust preferred securities and junior subordinated debt securities bear interest at a variable rate per annum equal to the three-month LIBOR plus 3.35%.

Note 8 - Basis of Presentation

Certain reclassifications have been made to prior period amounts to conform with current period presentation.