Trustmark (TRMK) 8-K Trustmark Announces 2006 Financial Results

   News Release

Trustmark Announces 2006 Financial Results

Jackson, Miss. - January 16, 2007 - Trustmark Corporation (NASDAQ:TRMK) announced net income of $29.4 million in the fourth quarter of 2006, which represented basic earnings per share of $0.50. Trustmark’s fourth quarter net income produced a return on average tangible shareholders’ equity of 21.22% and a return on average assets of 1.32%. For the year ended December 31, 2006, Trustmark’s net income totaled $119.3 million, which represented basic earnings per share of $2.11. Trustmark’s performance in 2006 resulted in a return on average tangible shareholders’ equity of 20.78% and a return on average assets of 1.42%. Highlights include:

l   Average total loans in the fourth quarter of 2006 increased $638.6 million, or 10.6%, compared to figures one year earlier

 l  Average total deposits in the fourth quarter of 2006 increased $1.1 billion, or 18.2%, compared to figures one year earlier

l   Seven new banking centers opened during the year with plans to open an additional 8 to 12 banking centers in higher growth markets within the next 24 months

Richard G. Hickson, Chairman and CEO, stated, “Trustmark continued to advance its strategic initiatives during 2006 as evidenced by our successful merger with and integration of Houston’s Republic Bancshares of Texas, as well as the opening of seven new banking centers within the higher growth markets of our four-state franchise. Building new customer relationships and strengthening relationships with existing customers have allowed Trustmark to post solid gains across its financial services businesses. Average total loans during the fourth quarter of 2006 increased $638.6 million, or 10.6%, relative to the comparable period one year earlier. Our loan portfolio continues to be well diversified geographically, as well as by loan type.

“Solid credit quality continues to be a hallmark of the organization. Nonperforming assets were $38.9 million at December 31, 2006 and the allowance coverage for nonperforming loans was 198%. Net charge-offs represented 0.06% of average loans during 2006.

“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 and mortgage related charges, which increased net income during the fourth quarter of 2006 by $1.1 million, or $0.019 per share. At December 31, 2006, Trustmark maintained specific Hurricane Katrina allocations in its allowance for loan losses of $2.0 million,” said Hickson.

“We are pleased with the growth and composition of our deposit base. When compared to figures one year earlier, average deposits in the fourth quarter of 2006 increased $1.1 billion, or 18.2%. This growth was broad-based with increases noted across Trustmark’s franchise. Average noninterest-bearing deposits during the fourth quarter of 2006 increased $111.4 million, or 7.9%, while interest-bearing deposits rose $967.5 million, or 21.5%, when compared to figures one year earlier. During the fourth quarter of 2006, average noninterest-bearing deposits represented 21.8% of Trustmark’s total deposit base,” said Hickson.

“In addition to the growth of our general banking franchise, we have noted significant accomplishments in our other financial services businesses. During 2006, insurance agency revenue increased to $33.9 million while revenue from our wealth management businesses increased to $27.2 million. Collectively, revenue from our insurance agencies and wealth management businesses totaled $61.1 million and represented approximately 13.8% of Trustmark’s total revenue in 2006,” said Hickson.

“Revenue generation and expense management remain key areas of focus at Trustmark. We continued to make investments to support additional revenue growth and profitability as well as to reallocate resources to areas with additional growth potential. Our initiative to build banking centers in high-growth markets within our franchise continues to gain momentum. During the year, we opened a total of seven banking centers in the Houston, Jackson, Memphis and Mississippi Gulf Coast markets. We also closed five offices where growth opportunities were limited, reallocating resources to new offices. We also anticipate opening 8 to 12 additional banking centers within the next 24 months. These actions reflect our commitment to build long-term value for our shareholders,” said Hickson.

“During the year, we undertook a number of initiatives designed to improve the risk profile of the Corporation. As the relatively flat yield curve diminished the profitability of holding longer-term investment securities, we continued to reduce our investment securities portfolio as well as balances of higher-cost funding sources. At December 31, 2006, our investment securities portfolio comprised 12.3% of total assets and had an average duration of approximately 2 years. As a consequence of reducing our investment portfolio and maintaining a historically short duration, our spread has been constrained as investment yields remain low. As such, we have foregone current earnings in an effort to enhance the interest rate risk profile of the organization. The decline in the investment securities portfolio, coupled with significant loan growth, has resulted in a richer mix of earning assets and a stable net interest margin of 3.84% in 2006.

“We also enhanced the mix of the Corporation’s capital with the issuance of trust preferred securities and subordinated debt during 2006. The addition of these securities has provided Trustmark with a cost effective manner in which to manage capital and enhance financial flexibility,” said Hickson.

ADDITIONAL INFORMATION

As previously announced, Trustmark will host a conference call with analysts on Wednesday, January 17 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) 811-8845, passcode 4787634 or 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, January 24 in archived format at the same web address or by calling (888) 203-1112, passcode 4787634.

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.

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:	Media:
Joseph Rein	Gray Wiggers
First Vice President	Senior Vice President
601-208-6898	601-208-5942

  TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION
December 31, 2006 ($ in thousands) (unaudited)

	Quarter Ended December 31,
AVERAGE BALANCES		2006			2005		$ Change			% Change
Securities AFS-taxable	$	787,354		$	1,051,481		$	(264,127	)		-25.1	%
Securities AFS-nontaxable		56,367			61,777			(5,410	)		-8.8	%
Securities HTM-taxable		197,633			203,545			(5,912	)		-2.9	%
Securities HTM-nontaxable		93,549			92,105			1,444			1.6	%
Total securities		1,134,903			1,408,908			(274,005	)		-19.4	%
Loans		6,639,346			6,000,786			638,560			10.6	%
Fed funds sold and rev repos		22,559			28,324			(5,765	)		-20.4	%
Total earning assets		7,796,808			7,438,018			358,790			4.8	%
Allowance for loan losses		(75,336	)		(76,230	)		894			-1.2	%
Cash and due from banks		334,008			339,944			(5,936	)		-1.7	%
Other assets		769,964			537,572			232,392			43.2	%
Total assets	$	8,825,444		$	8,239,304		$	586,140			7.1	%
Interest-bearing demand deposits	$	1,215,676		$	823,025		$	392,651			47.7	%
Savings deposits		1,639,028			1,470,637			168,391			11.5	%
Time deposits less than $100,000		1,623,573			1,411,691			211,882			15.0	%
Time deposits of $100,000 or more		993,324			798,707			194,617			24.4	%
Total interest-bearing deposits		5,471,601			4,504,060			967,541			21.5	%
Fed funds purchased and repos		402,057			602,829			(200,772	)		-33.3	%
Short-term borrowings		308,299			757,148			(448,849	)		-59.3	%
Long-term FHLB advances		-			105,778			(105,778	)		n/m
Subordinated notes		10,259			-			10,259			n/m
Junior subordinated debt securities		70,104			-			70,104			n/m
Total interest-bearing liabilities		6,262,320			5,969,815			292,505			4.9	%
Noninterest-bearing deposits		1,528,891			1,417,500			111,391			7.9	%
Other liabilities		139,544			112,876			26,668			23.6	%
Shareholders' equity		894,689			739,113			155,576			21.0	%
Total liabilities and equity	$	8,825,444		$	8,239,304		$	586,140			7.1	%

n/m - not meaningful

	Year-to-date December 31,
AVERAGE BALANCES		2006			2005		$ Change			% Change
Securities AFS-taxable	$	882,935		$	1,268,472		$	(385,537	)		-30.4	%
Securities AFS-nontaxable		57,720			62,970			(5,250	)		-8.3	%
Securities HTM-taxable		200,501			188,133			12,368			6.6	%
Securities HTM-nontaxable		93,439			91,592			1,847			2.0	%
Total securities		1,234,595			1,611,167			(376,572	)		-23.4	%
Loans		6,277,162			5,770,178			506,984			8.8	%
Fed funds sold and rev repos		26,004			31,399			(5,395	)		-17.2	%
Total earning assets		7,537,761			7,412,744			125,017			1.7	%
Allowance for loan losses		(74,924	)		(68,395	)		(6,529	)		9.5	%
Cash and due from banks		327,320			336,238			(8,918	)		-2.7	%
Other assets		637,331			525,896			111,435			21.2	%
Total assets	$	8,427,488		$	8,206,483		$	221,005			2.7	%
Interest-bearing demand deposits	$	1,003,649		$	1,088,107		$	(84,458	)		-7.8	%
Savings deposits		1,677,921			1,262,059			415,862			33.0	%
Time deposits less than $100,000		1,505,213			1,338,821			166,392			12.4	%
Time deposits of $100,000 or more		862,050			653,537			208,513			31.9	%
Total interest-bearing deposits		5,048,833			4,342,524			706,309			16.3	%
Fed funds purchased and repos		471,386			668,389			(197,003	)		-29.5	%
Short-term borrowings		520,942			892,570			(371,628	)		-41.6	%
Long-term FHLB advances		2,825			159,103			(156,278	)		-98.2	%
Subordinated notes		2,586			-			2,586			n/m
Junior subordinated debt securities		25,895			-			25,895			n/m
Total interest-bearing liabilities		6,072,467			6,062,586			9,881			0.2	%
Noninterest-bearing deposits		1,417,470			1,310,597			106,873			8.2	%
Other liabilities		136,674			90,353			46,321			51.3	%
Shareholders' equity		800,877			742,947			57,930			7.8	%
Total liabilities and equity	$	8,427,488		$	8,206,483		$	221,005			2.7	%
n/m - not meaningful

	December 31,
PERIOD END BALANCES		2006			2005		$ Change			% Change
Securities available for sale	$	792,291		$	1,041,754		$	(249,463	)		-23.9	%
Securities held to maturity		292,243			294,902			(2,659	)		-0.9	%
Total securities		1,084,534			1,336,656			(252,122	)		-18.9	%
Loans held for sale		95,375			146,936			(51,561	)		-35.1	%
Loans		6,541,875			5,893,439			648,436			11.0	%
Fed funds sold and rev repos		27,259			130,115			(102,856	)		-79.1	%
Total earning assets		7,749,043			7,507,146			241,897			3.2	%
Allowance for loan losses		(72,098	)		(76,691	)		4,593			-6.0	%
Cash and due from banks		392,083			387,930			4,153			1.1	%
Mortgage servicing rights		69,272			58,424			10,848			18.6	%
Goodwill		290,363			137,368			152,995			111.4	%
Identifiable intangible assets		32,960			28,703			4,257			14.8	%
Other assets		379,347			346,870			32,477			9.4	%
Total assets	$	8,840,970		$	8,389,750		$	451,220			5.4	%
Noninterest-bearing deposits	$	1,574,769		$	1,556,142		$	18,627			1.2	%
Interest-bearing deposits		5,401,395			4,726,672			674,723			14.3	%
Total deposits		6,976,164			6,282,814			693,350			11.0	%
Fed funds purchased and repos		470,434			492,853			(22,419	)		-4.5	%
Short-term borrowings		271,067			775,402			(504,335	)		-65.0	%
Long-term FHLB advances		-			5,726			(5,726	)		n/m
Subordinated notes		49,677			-			49,677			n/m
Junior subordinated debt securities		70,104			-			70,104			n/m
Other liabilities		112,189			91,492			20,697			22.6	%
Total liabilities		7,949,635			7,648,287			301,348			3.9	%
Common stock		12,226			11,620			606			5.2	%
Surplus		158,856			65,374			93,482			143.0	%
Retained earnings		740,870			677,781			63,089			9.3	%
Accum other comprehensive
loss, net of tax		(20,617	)		(13,312	)		(7,305	)		n/m
Total shareholders' equity		891,335			741,463			149,872			20.2	%
Total liabilities and equity	$	8,840,970		$	8,389,750		$	451,220			5.4	%
Total interest-bearing liabilities	$	6,262,677		$	6,000,653		$	262,024			4.4	%
n/m - not meaningful

	Quarter Ended December 31,
INCOME STATEMENTS		2006			2005	$ Change			% Change
Interest and fees on loans-FTE	$	119,900		$	97,569	$	22,331			22.9	%
Interest on securities-taxable		9,950			13,483		(3,533	)		-26.2	%
Interest on securities-tax exempt-FTE		2,699			2,843		(144	)		-5.1	%
Interest on fed funds sold and rev repos		309			291		18			6.2	%
Other interest income		160			73		87			119.2	%
Total interest income-FTE		133,018			114,259		18,759			16.4	%
Interest on deposits		48,615			25,851		22,764			88.1	%
Interest on fed funds pch and repos		4,528			5,445		(917	)		-16.8	%
Other interest expense		5,555			9,657		(4,102	)		-42.5	%
Total interest expense		58,698			40,953		17,745			43.3	%
Net interest income-FTE		74,320			73,306		1,014			1.4	%
Provision for loan losses		(909	)		3,189		(4,098	)		n/m
Net interest income after provision-FTE		75,229			70,117		5,112			7.3	%
Service charges on deposit accounts		13,855			12,069		1,786			14.8	%
Insurance commissions		7,869			7,480		389			5.2	%
Wealth management		5,937			5,629		308			5.5	%
General banking - other		6,534			5,573		961			17.2	%
Mortgage banking, net		2,549			1,950		599			30.7	%
Other, net		2,216			1,342		874			65.1	%
Nonint inc-excl sec gains (losses)		38,960			34,043		4,917			14.4	%
Security gains (losses)		27		��	365		(338	)		-92.6	%
Total noninterest income		38,987			34,408		4,579			13.3	%
Salaries and employee benefits		40,515			37,405		3,110			8.3	%
Services and fees		9,676			8,672		1,004			11.6	%
Net occupancy-premises		4,687			3,972		715			18.0	%
Equipment expense		3,936			3,719		217			5.8	%
Other expense		8,577			7,126		1,451			20.4	%
Total noninterest expense		67,391			60,894		6,497			10.7	%
Income before income taxes		46,825			43,631		3,194			7.3	%
Tax equivalent adjustment		2,238			2,170		68			3.1	%
Income taxes		15,168			13,718		1,450			10.6	%
Net income	$	29,419		$	27,743	$	1,676			6.0	%

Earnings per share
Basic	$	0.50	$	0.50	$	-	0.0	%
Diluted	$	0.50	$	0.50	$	-	0.0	%
Weighted average shares outstanding
Basic		58,644,851		55,823,191			5.1	%
Diluted		59,062,050		55,950,917			5.6	%
Period end shares outstanding		58,676,586		55,771,459			5.2	%
Dividends per share	$	0.2200	$	0.2100			4.8	%
n/m - not meaningful

	Year-to-date December 31,
INCOME STATEMENTS		2006			2005		$ Change			% Change
Interest and fees on loans-FTE	$	435,247		$	354,843		$	80,404			22.7	%
Interest on securities-taxable		43,539			56,568			(13,029	)		-23.0	%
Interest on securities-tax exempt-FTE		11,034			11,469			(435	)		-3.8	%
Interest on fed funds sold and rev repos		1,327			994			333			33.5	%
Other interest income		267			130			137			105.4	%
Total interest income-FTE		491,414			424,004			67,410			15.9	%
Interest on deposits		153,840			81,960			71,880			87.7	%
Interest on fed funds pch and repos		20,228			19,138			1,090			5.7	%
Other interest expense		28,107			38,158			(10,051	)		-26.3	%
Total interest expense		202,175			139,256			62,919			45.2	%
Net interest income-FTE		289,239			284,748			4,491			1.6	%
Provision for loan losses		(5,938	)		19,541			(25,479	)		n/m
Net interest income after provision-FTE		295,177			265,207			29,970			11.3	%
Service charges on deposit accounts		53,212			51,019			2,193			4.3	%
Insurance commissions		33,871			33,006			865			2.6	%
Wealth management		23,183			21,579			1,604			7.4	%
General banking - other		22,867			20,835			2,032			9.8	%
Mortgage banking, net		10,030			5,845			4,185			71.6	%
Other, net		10,043			14,467			(4,424	)		-30.6	%
Nonint inc-excl sec gains (losses)		153,206			146,751			6,455			4.4	%
Security gains (losses)		1,922			(3,644	)		5,566			n/m
Total noninterest income		155,128			143,107			12,021			8.4	%
Salaries and employee benefits		159,690			149,817			9,873			6.6	%
Services and fees		36,659			34,003			2,656			7.8	%
Net occupancy-premises		17,120			15,280			1,840			12.0	%
Equipment expense		14,899			15,180			(281	)		-1.9	%
Other expense		32,112			28,996			3,116			10.7	%
Total noninterest expense		260,480			243,276			17,204			7.1	%
Income before income taxes		189,825			165,038			24,787			15.0	%
Tax equivalent adjustment		8,668			8,307			361			4.3	%
Income taxes		61,884			53,780			8,104			15.1	%
Net income	$	119,273		$	102,951		$	16,322			15.9	%
Earnings per share
Basic	$	2.11		$	1.82		$	0.29			15.9	%
Diluted	$	2.09		$	1.81		$	0.28			15.5	%
Weighted average shares outstanding
Basic		56,632,257			56,609,494						0.0	%
Diluted		57,097,330			56,742,730						0.6	%
Period end shares outstanding		58,676,586			55,771,459						5.2	%
Dividends per share	$	0.8500		$	0.8100						4.9	%
n/m - not meaningful

	December 31,
NONPERFORMING ASSETS		2006		2005	$ Change			% Change
Nonaccrual loans	$	36,399	$	28,914	$	7,485		25.9	%
Restructured loans		-		-		-
Total nonperforming loans		36,399		28,914		7,485		25.9	%
Other real estate		2,509		4,107		(1,598	)	-38.9	%
Total nonperforming assets		38,908		33,021		5,887		17.8	%
Loans past due over 90 days
Included in loan portfolio		2,957		2,719		238		8.8	%
Serviced GNMA loans eligible for repch		8,510		22,769		(14,259	)	-62.6	%
Total loans past due over 90 days		11,467		25,488		(14,021	)	-55.0	%
Total nonperforming assets plus past
due over 90 days	$	50,375	$	58,509	$	(8,134	)	-13.9	%

	Quarter Ended December 31,
ALLOWANCE FOR LOAN LOSSES		2006			2005		$ Change			% Change
Beginning Balance	$	75,539		$	75,750		$	(211	)	-0.3	%
Charge-offs		(5,064	)		(4,659	)		(405	)	8.7	%
Recoveries		2,532			2,411			121		5.0	%
Provision for loan losses		(909	)		3,189			(4,098	)	n/m
Allowance of acquired bank		-			-			-		n/m
Ending Balance	$	72,098		$	76,691		$	(4,593	)	-6.0	%

RATIOS
ROA	1.32	%	1.33	%
ROE	13.05	%	14.89	%
Return on average tangible equity	21.22	%	19.56	%
Equity generation rate	7.31	%	8.50	%
EOP equity/ EOP assets	10.08	%	8.84	%
Average equity/average assets	10.14	%	9.10	%
Interest margin - Yield - FTE	6.77	%	6.09	%
Interest margin - Cost - FTE	2.99	%	2.18	%
Net interest margin - FTE	3.78	%	3.91	%
Rate on interest-bearing liabilities	3.72	%	2.72	%
Efficiency ratio	59.71	%	56.24	%
Net charge offs/average loans	0.15	%	0.15	%
Provision for loan losses/average loans	-0.05	%	0.21	%
Nonperforming loans/total loans	0.56	%	0.49	%
Nonperforming assets/total loans	0.59	%	0.56	%
Nonperforming assets/total loans+ORE	0.59	%	0.56	%
ALL/nonperforming loans	198.08	%	265.24	%
ALL/total loans	1.10	%	1.30	%
Net loans/total assets	73.18	%	69.33	%

COMMON STOCK PERFORMANCE
Market value of stock-Close	$	32.71		$	27.47
Market value of stock-High	$	33.61		$	29.83
Market value of stock-Low	$	30.84		$	24.00
Book value of stock	$	15.19		$	13.29
Tangible book value of stock	$	9.68		$	10.32
Tangible equity	$	568,012		$	575,392
Market/Book value of stock		215.34	%		206.70	%

OTHER DATA
EOP Employees - FTE	2,707	2,582
n/m - not meaningful

	Year-to-date December 31,
ALLOWANCE FOR LOAN LOSSES		2006			2005		$ Change			% Change
Beginning Balance	$	76,691		$	64,757		$	11,934			18.4	%
Charge-offs		(14,938	)		(16,822	)		1,884			-11.2	%
Recoveries		10,966			9,215			1,751			19.0	%
Provision for loan losses		(5,938	)		19,541			(25,479	)		n/m
Allowance of acquired bank		5,317			-			5,317			n/m
Ending Balance	$	72,098		$	76,691		$	(4,593	)		-6.0	%

RATIOS
ROA	1.42	%	1.25	%
ROE	14.89	%	13.86	%
Return on average tangible equity	20.78	%	18.24	%
Equity generation rate	8.89	%	7.59	%
EOP equity/ EOP assets	10.08	%	8.84	%
Average equity/average assets	9.50	%	9.16	%
Interest margin - Yield - FTE	6.52	%	5.72	%
Interest margin - Cost - FTE	2.68	%	1.88	%
Net interest margin - FTE	3.84	%	3.84	%
Rate on interest-bearing liabilities	3.33	%	2.30	%
Efficiency ratio	59.08	%	56.95	%
Net charge offs/average loans	0.06	%	0.13	%
Provision for loan losses/average loans	-0.09	%	0.34	%
Nonperforming loans/total loans	0.56	%	0.49	%
Nonperforming assets/total loans	0.59	%	0.56	%
Nonperforming assets/total loans+ORE	0.59	%	0.56	%
ALL/nonperforming loans	198.08	%	265.24	%
ALL/total loans	1.10	%	1.30	%
Net loans/total assets	73.18	%	69.33	%

COMMON STOCK PERFORMANCE
Market value of stock-Close	$	32.71		$	27.47
Market value of stock-High	$	33.61		$	31.15
Market value of stock-Low	$	27.01		$	24.00
Book value of stock	$	15.19		$	13.29
Tangible book value of stock	$	9.68		$	10.32
Tangible equity	$	568,012		$	575,392
Market/Book value of stock		215.34	%		206.70	%

n/m - not meaningful

	Quarter Ended
AVERAGE BALANCES		12/31/2006			9/30/2006		$ Change			% Change
Securities AFS-taxable	$	787,354		$	863,757		$	(76,403	)		-8.8	%
Securities AFS-nontaxable		56,367			56,281			86			0.2	%
Securities HTM-taxable		197,633			198,513			(880	)		-0.4	%
Securities HTM-nontaxable		93,549			94,509			(960	)		-1.0	%
Total securities		1,134,903			1,213,060			(78,157	)		-6.4	%
Loans		6,639,346			6,336,043			303,303			4.8	%
Fed funds sold and rev repos		22,559			25,205			(2,646	)		-10.5	%
Total earning assets		7,796,808			7,574,308			222,500			2.9	%
Allowance for loan losses		(75,336	)		(73,836	)		(1,500	)		2.0	%
Cash and due from banks		334,008			325,817			8,191			2.5	%
Other assets		769,964			622,121			147,843			23.8	%
Total assets	$	8,825,444		$	8,448,410		$	377,034			4.5	%
Interest-bearing demand deposits	$	1,215,676		$	1,039,355		$	176,321			17.0	%
Savings deposits		1,639,028			1,669,894			(30,866	)		-1.8	%
Time deposits less than $100,000		1,623,573			1,533,155			90,418			5.9	%
Time deposits of $100,000 or more		993,324			880,505			112,819			12.8	%
Total interest-bearing deposits		5,471,601			5,122,909			348,692			6.8	%
Fed funds purchased and repos		402,057			432,486			(30,429	)		-7.0	%
Short-term borrowings		308,299			535,339			(227,040	)		-42.4	%
Long-term FHLB advances		-			-			-			n/m
Subordinated notes		10,259			-			10,259			n/m
Junior subordinated debt securities		70,104			32,631			37,473			n/m
Total interest-bearing liabilities		6,262,320			6,123,365			138,955			2.3	%
Noninterest-bearing deposits		1,528,891			1,388,201			140,690			10.1	%
Other liabilities		139,544			130,811			8,733			6.7	%
Shareholders' equity		894,689			806,033			88,656			11.0	%
Total liabilities and equity	$	8,825,444		$	8,448,410		$	377,034			4.5	%

n/m - not meaningful

PERIOD END BALANCES		12/31/2006			9/30/2006		$ Change			% Change
Securities available for sale	$	792,291		$	862,482		$	(70,191	)		-8.1	%
Securities held to maturity		292,243			289,125			3,118			1.1	%
Total securities		1,084,534			1,151,607			(67,073	)		-5.8	%
Loans held for sale		95,375			125,988			(30,613	)		-24.3	%
Loans		6,541,875			6,538,872			3,003			0.0	%
Fed funds sold and rev repos		27,259			6,907			20,352			294.7	%
Total earning assets		7,749,043			7,823,374			(74,331	)		-1.0	%
Allowance for loan losses		(72,098	)		(75,539	)		3,441			-4.6	%
Cash and due from banks		392,083			348,397			43,686			12.5	%
Mortgage servicing rights		69,272			66,526			2,746			4.1	%
Goodwill		290,363			290,753			(390	)		-0.1	%
Identifiable intangible assets		32,960			36,503			(3,543	)		-9.7	%
Other assets		379,347			372,754			6,593			1.8	%
Total assets	$	8,840,970		$	8,862,768		$	(21,798	)		-0.2	%
Noninterest-bearing deposits	$	1,574,769		$	1,580,533		$	(5,764	)		-0.4	%
Interest-bearing deposits		5,401,395			5,541,680			(140,285	)		-2.5	%
Total deposits		6,976,164			7,122,213			(146,049	)		-2.1	%
Fed funds purchased and repos		470,434			258,463			211,971			82.0	%
Short-term borrowings		271,067			430,210			(159,143	)		-37.0	%
Subordinated notes		49,677			-			49,677			n/m
Junior subordinated debt securities		70,104			70,104			-			n/m
Other liabilities		112,189			100,244			11,945			11.9	%
Total liabilities		7,949,635			7,981,234			(31,599	)		-0.4	%
Common stock		12,226			12,212			14			0.1	%
Surplus		158,856			156,625			2,231			1.4	%
Retained earnings		740,870			724,385			16,485			2.3	%
Accum other comprehensive
loss, net of tax		(20,617	)		(11,688	)		(8,929	)		76.4	%
Total shareholders' equity		891,335			881,534			9,801			1.1	%
Total liabilities and equity	$	8,840,970		$	8,862,768		$	(21,798	)		-0.2	%
Total interest-bearing liabilities	$	6,262,677		$	6,300,457		$	(37,780	)		-0.6	%
n/m - not meaningful

	Quarter Ended
INCOME STATEMENTS		12/31/2006			9/30/2006		$ Change			% Change
Interest and fees on loans-FTE	$	119,900		$	113,421		$	6,479			5.7	%
Interest on securities-taxable		9,950			10,710			(760	)		-7.1	%
Interest on securities-tax exempt-FTE		2,699			2,773			(74	)		-2.7	%
Interest on fed funds sold and rev repos		309			346			(37	)		-10.7	%
Other interest income		160			56			104			185.7	%
Total interest income-FTE		133,018			127,306			5,712			4.5	%
Interest on deposits		48,615			41,781			6,834			16.4	%
Interest on fed funds pch and repos		4,528			4,896			(368	)		-7.5	%
Other interest expense		5,555			7,890			(2,335	)		-29.6	%
Total interest expense		58,698			54,567			4,131			7.6	%
Net interest income-FTE		74,320			72,739			1,581			2.2	%
Provision for loan losses		(909	)		(81	)		(828	)		n/m
Net interest income after provision-FTE		75,229			72,820			2,409			3.3	%
Service charges on deposit accounts		13,855			14,360			(505	)		-3.5	%
Insurance commissions		7,869			8,935			(1,066	)		-11.9	%
Wealth management		5,937			5,770			167			2.9	%
General banking - other		6,534			5,668			866			15.3	%
Mortgage banking, net		2,549			1,131			1,418			125.4	%
Other, net		2,216			3,559			(1,343	)		-37.7	%
Nonint inc-excl sec gains		38,960			39,423			(463	)		-1.2	%
Security gains		27			645			(618	)		-95.8	%
Total noninterest income		38,987			40,068			(1,081	)		-2.7	%
Salaries and employee benefits		40,515			40,231			284			0.7	%
Services and fees		9,676			9,240			436			4.7	%
Net occupancy-premises		4,687			4,479			208			4.6	%
Equipment expense		3,936			3,731			205			5.5	%
Other expense		8,577			8,144			433			5.3	%
Total noninterest expense		67,391			65,825			1,566			2.4	%
Income before income taxes		46,825			47,063			(238	)		-0.5	%
Tax equivalent adjustment		2,238			2,109			129			6.1	%
Income taxes		15,168			15,193			(25	)		-0.2	%
Net income	$	29,419		$	29,761		$	(342	)		-1.1	%
Earnings per share
Basic	$	0.50		$	0.53		$	(0.03	)		-5.7	%
Diluted	$	0.50		$	0.52		$	(0.02	)		-3.8	%
Weighted average shares outstanding
Basic		58,644,851			56,590,964						3.6	%
Diluted		59,062,050			56,830,753						3.9	%
Period end shares outstanding		58,676,586			58,611,242						0.1	%
Dividends per share	$	0.2200		$	0.2100						4.8	%

n/m - not meaningful

	Quarter Ended
NONPERFORMING ASSETS		12/31/2006		9/30/2006	$ Change			% Change
Nonaccrual loans	$	36,399	$	27,758	$	8,641			31.1	%
Restructured loans		-		-		-
Total nonperforming loans		36,399		27,758		8,641			31.1	%
Other real estate		2,509		3,284		(775	)		-23.6	%
Total nonperforming assets		38,908		31,042		7,866			25.3	%
Loans past due over 90 days
Included in Loan Portfolio		2,957		3,721		(764	)		-20.5	%
Serviced GNMA loans eligible for repch		8,510		12,783		(4,273	)		-33.4	%
Total loans past due over 90 days		11,467		16,504		(5,037	)		-30.5	%
Total nonperforming assets plus past
due over 90 days	$	50,375	$	47,546	$	2,829			6.0	%

	Quarter Ended
ALLOWANCE FOR LOAN LOSSES		12/31/2006			9/30/2006		$ Change			% Change
Beginning Balance	$	75,539		$	71,846		$	3,693			5.1	%
Charge-offs		(5,064	)		(4,056	)		(1,008	)		24.9	%
Recoveries		2,532			2,513			19			0.8	%
Provision for loan losses		(909	)		(81	)		(828	)		n/m
Allowance of acquired bank		-			5,317			(5,317	)		n/m
Ending Balance	$	72,098		$	75,539		$	(3,441	)		-4.6	%

RATIOS
ROA	1.32	%	1.39	%
ROE	13.05	%	14.65	%
Return on average tangible equity	21.22	%	20.51	%
Equity generation rate	7.31	%	8.59	%
EOP equity/ EOP assets	10.08	%	10.03	%
Average equity/average assets	10.14	%	9.79	%
Interest margin - Yield - FTE	6.77	%	6.67	%
Interest margin - Cost - FTE	2.99	%	2.86	%
Net interest margin - FTE	3.78	%	3.81	%
Rate on interest-bearing liabilities	3.72	%	3.54	%
Efficiency ratio	59.71	%	58.70	%
Net charge offs/average loans	0.15	%	0.10	%
Provision for loan losses/average loans	-0.05	%	-0.01	%
Nonperforming loans/total loans	0.56	%	0.42	%
Nonperforming assets/total loans	0.59	%	0.47	%
Nonperforming assets/total loans+ORE	0.59	%	0.47	%
ALL/nonperforming loans	198.08	%	272.13	%
ALL/total loans	1.10	%	1.16	%
Net loans/total assets	73.18	%	72.87	%

COMMON STOCK PERFORMANCE
Market value of stock-Close	$	32.71		$	31.43
Market value of stock-High	$	33.61		$	32.78
Market value of stock-Low	$	30.84		$	28.31
Book value of stock	$	15.19		$	15.18
Tangible book value of stock	$	9.68		$	9.46
Tangible equity	$	568,012		$	554,278
Market/Book value of stock		215.34	%		207.05	%

OTHER DATA
EOP Employees - FTE	2,707	2,674

n/m - not meaningful

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 and the sale of the Merchant Service Portfolio. 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
	12/31/2006						9/30/2006						12/31/2005
	$			Basic EPS			$			Basic EPS			$		Basic EPS
Net Income as reported--GAAP	$	29,419		$	0.502		$	29,761		$	0.526		$	27,743	$	0.497
Adjustments (net of taxes):
Less Hurricane Katrina reserves released
Provision for loan losses		(871	)		(0.015	)		(874	)		(0.015	)		-		-
Mortgage related charges		(258	)		(0.004	)		(14	)		(0.001	)		627		0.011
Noninterest income - lost revenues		-			-			-			-			810		0.015
		(1,129	)		(0.019	)		(888	)		(0.016	)		1,437		0.026
Net Income adjusted for specific items (Non-GAAP)	$	28,290		$	0.483		$	28,873		$	0.510		$	29,180	$	0.523

	Year-to-date
	12/31/2006						12/31/2005
	$			Basic EPS			$			Basic EPS
Net Income as reported--GAAP	$	119,273		$	2.106		$	102,951		$	1.819
Adjustments (net of taxes):
Less Hurricane Katrina reserves released
Provision for loan losses		(4,736	)		(0.083	)		6,054			0.107
Mortgage related charges		(952	)		(0.017	)		2,047			0.036
Noninterest income - lost revenues		-			-			1,649			0.029
Noninterest expense - additional expenses		-			-			333			0.006
		(5,688	)		(0.100	)		10,083			0.178
Subtract sale of Merchant Service Portfolio		-			-			(3,551	)		(0.063	)
Net Income adjusted for specific items (Non-GAAP)	$	113,585		$	2.006		$	109,483		$	1.934

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 accruals 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 $7.8 million and other accruals of $1.5 million on a pre-tax basis. At December 31, 2006, the allowance for loan losses included specific Katrina accruals totaling $2.0 million, comprised of $1.3 million for mortgage loans and $0.7 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 - 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 $21.1 million in cash and due from banks, $64.5 million in federal funds sold, $76.5 million in securities, $458.0 million in loans, $9.0 million in premises and equipment and $18.4 million in other assets as well as deposits of $593.3 million and borrowings and other liabilities of $13.3 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 $173.0 million, of which $19.3 million has been allocated to core deposits, $690 thousand to borrower relationships and $153.0 million to goodwill.

Note 3 - Loans and Allowance for Loan Losses

For the periods presented, loans consisted of the following:

		12/31/06		9/30/06		12/31/05
Real estate loans:
Construction and land development	$	935,256	$	903,399	$	715,174
Secured by 1-4 family residential properties		1,842,886		1,865,395		1,901,196
Secured by nonfarm, nonresidential properties		1,314,602		1,310,191		1,061,669
Other		121,975		127,072		166,685
Loans to finance agricultural production		23,938		31,055		40,162
Commercial and industrial		1,106,460		1,115,452		861,167
Consumer		934,261		926,823		886,072
Obligations of states and political subdivisions		212,388		207,369		210,310
Other loans		50,109		52,116		51,004
Loans		6,541,875		6,538,872		5,893,439
Less Allowance for loan losses		72,098		75,539		76,691
Net Loans	$	6,469,777	$	6,463,333	$	5,816,748

The allowance for loan losses is maintained at a level believed adequate by management, based on estimated probable losses within the existing loan portfolio. Trustmark’s allowance for 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. Trustmark implemented specific changes to its allowance for loan loss methodology as a result of the Interagency Policy Statement on the Allowance for Loan and Lease Losses published by the governmental regulating agencies for financial services companies on December 13, 2006.

Note 4 - Mortgage Banking

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

	12/31/06		9/30/06		12/31/05
Mortgage Servicing Rights	$	69,272	$	66,526	$	62,425
Valuation Allowance		-		-		(4,001	)
Mortgage Servicing Rights, net	$	69,272	$	66,526	$	58,424

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 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.

In the first quarter of 2006, 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.

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
	12/31/06			9/30/06			12/31/05			12/31/06			12/31/05
Mortgage servicing income, net	$	3,395		$	3,279		$	3,157		$	13,248		$	12,411
Change in fair value-MSR from market changes		1,008			(3,901	)		-			3,122			-
Change in fair value-MSR from runoff		(2,204	)		(3,202	)		-			(9,858	)		-
Change in fair value of derivatives		(1,411	)		3,551			-			(2,298	)		-
Amortization of MSR		-			-			(2,475	)		-			(10,465	)
Recovery of MSR impairment		-			-			405			-			2,043
Gain on sale of loans		1,794			1,057			574			5,505			1,218
Other, net		(33	)		347			289			311			638
Mortgage banking, net	$	2,549		$	1,131		$	1,950		$	10,030		$	5,845

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
	12/31/06			9/30/06			12/31/05			12/31/06			12/31/05
Securities - Taxable		4.01	%		4.00	%		4.26	%		4.02	%		3.88	%
Securities - Nontaxable		7.14	%		7.30	%		7.33	%		7.30	%		7.42	%
Securities - Total		4.42	%		4.41	%		4.60	%		4.42	%		4.22	%
Loans		7.16	%		7.10	%		6.45	%		6.93	%		6.15	%
FF Sold & Rev Repo		5.43	%		5.45	%		4.08	%		5.10	%		3.17	%
Total Earning Assets		6.77	%		6.67	%		6.09	%		6.52	%		5.72	%
Interest-bearing Deposits		3.53	%		3.24	%		2.28	%		3.05	%		1.89	%
FF Pch & Repo		4.47	%		4.49	%		3.58	%		4.29	%		2.86	%
Borrowings		5.67	%		5.51	%		4.44	%		5.09	%		3.63	%
Total Interest-bearing Liabilities		3.72	%		3.54	%		2.72	%		3.33	%		2.30	%
Net interest margin		3.78	%		3.81	%		3.91	%		3.84	%		3.84	%

Note 6 - Issuance of Trust Preferred Securities and Subordinated Debt Securities

On December 13, 2006, Trustmark National Bank (TNB) issued $50.0 million aggregate principal amount of Subordinated Notes due December 15, 2016. The Notes bear interest at the rate of 5.673% per annum from December 13, 2006 until the principal of the Notes has been paid in full. Interest on the Notes is payable semi-annually in arrears on June 15 and December 15 of each year, commencing June 15, 2007, and on the Date of Maturity. The Notes are unsecured and subordinate and junior in right of payment to TNB’s obligations to its depositors, its obligations under bankers’ acceptances and letters of credit, its obligations to any Federal Reserve Bank or the FDIC and its obligations to its other creditors, and to any rights acquired by the FDIC as a result of loans made by the FDIC to TNB. The Notes, which are not redeemable prior to maturity, qualify as Tier 2 capital for both TNB and Trustmark. Proceeds from the sale of the Notes were used for general corporate purposes.

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 assist in financing 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% and mature on September 30, 2036. The debentures may be redeemed at 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 7 - Recent Pronouncements

In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans.” This statement requires the recognition of the overfunded or underfunded status of an employer’s defined benefit postretirement plan as an asset or liability in its balance sheet and to recognize changes in that funded status in other comprehensive income in the year in which the changes occur. At December 31, 2006, Trustmark adopted this statement and has recognized an additional liability of $4.5 million on its balance sheet representing the difference in its plan’s assets and benefit obligation with a charge to other comprehensive income, net of tax, of $10.8 million.

Also in September 2006, the SEC issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (SAB No. 108), which addresses the diversity in practice in quantifying financial misstatements and provides interpretative guidance regarding the consideration given to prior year misstatements when determining materiality in current year financial statements. SAB No. 108 permits adjustments for the cumulative effect of misstatements related to prior years, previously deemed to be immaterial, in the carrying amount of assets and liabilities as of the beginning of the current fiscal year, with an offsetting adjustment to beginning retained earnings in the year of adoption. In the fourth quarter of 2006, Trustmark adopted the provisions of SAB No. 108 and recorded an $8.4 million cumulative reduction to its 2006 beginning balance of retained earnings related to adjustments made to the carrying values of core deposit intangibles and other liabilities.

Note 8 - Basis of Presentation

Certain reclassifications have been made to prior period amounts to conform with current period presentation and the adoption of SAB No. 108 discussed in Note 7 above.