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

   News Release

Trustmark Corporation Announces Second Quarter Earnings

Jackson, Miss. – July 17, 2007 – Trustmark Corporation (NASDAQ:TRMK) announced net income of $29.8 million in the second quarter of 2007, which represented basic earnings per share of $0.52.  Trustmark’s second quarter net income produced a return on average tangible shareholders’ equity of 21.38% and a return on average assets of 1.36%.  During the first six months of 2007, Trustmark’s net income totaled $55.7 million, which represented basic earnings per share of $0.96.  Trustmark’s performance during the first half of 2007 resulted in returns on average tangible shareholders’ equity and average assets of 20.08% and 1.27%, respectively.  Highlights for the second quarter of 2007 compared to figures one year earlier include:

·   Average total loans increased $685.4 million, or 11.2%

·   Average total deposits increased $940.7 million, or 15.3%

·   Net interest income expanded $4.1 million, or 5.7%

·   Insurance and Wealth Management income grew 13.6% and 9.1%, respectively

·   Credit quality remained outstanding

Richard G. Hickson, Chairman and CEO, stated, “Trustmark made significant achievements during the second quarter.  The results of our continuing efforts to reposition our balance sheet by replacing lower yield maturing securities with quality, higher yield loans and enhancing our funding base by replacing borrowings with attractive core deposits is reflected in our financial performance.  Increasing momentum is especially evident when comparing our performance in the first and second quarters of 2007.  On a linked quarter basis, average loans increased $120.5 million, or 1.8%.  This growth was broad-based geographically as well as by type of loan.  Loan growth and diligent management of our funding base is reflected in increased net interest income as well as expansion of our net interest margin to 3.91%.

“In addition to improvement in net interest income, we experienced solid growth in noninterest income of 6.1% during the second quarter of 2007 relative to the prior quarter with Insurance and Wealth Management income posting increases of 12.9% and 8.9%, respectively,” said Hickson.

“Our efforts to proactively manage expenses continue to gain traction.  During the second quarter, noninterest expense declined $0.6 million, or 0.8%, relative to the first quarter of 2007.  This accomplishment was due in part to investments in imaging technology that reduced courier expenses and enhancements in check clearing processes that decreased clearing costs and expedited funds availability.  Trustmark remains committed to identifying reengineering and efficiency opportunities designed to enhance shareholder value,” said Hickson.

“We continue to make investments to support additional revenue growth and profitability as well as to reallocate resources to areas with additional growth potential.  In this regard, Trustmark opened two new banking centers in Houston and Memphis during the second quarter while closing three offices with limited opportunities for growth.  We anticipate opening four additional banking centers during the remainder of 2007 in the Jackson, Hattiesburg, Houston and Florida panhandle markets.  These actions reflect our commitment to build long-term value for our shareholders,” said Hickson.

Strong credit quality remains a hallmark of the organization.  Nonperforming assets totaled $31.2 million at June 30, 2007, down 20.5% relative to the end of the first quarter, and represented 0.46% of total loans.  Net charge-offs represented 0.07% of average loans during the second quarter and the allowance for loan losses represented 255.5% of nonperforming loans at June 30.

During the first six months of 2007, Trustmark repurchased approximately 1.4 million shares of its common stock, including 954 thousand in the second quarter.  At June 30, 2007, Trustmark had authorization to repurchase up to an additional 1.4 million shares.  The repurchase program is subject to market conditions and management discretion and will continue to be implemented through open market purchases or privately negotiated transactions.

ADDITIONAL INFORMATION

As previously announced, Trustmark will host a conference call with analysts on Wednesday, July 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) 810-0924, passcode 6152749 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, July 25 in archived format at the same web address or by calling (888) 203-1112, passcode 6152749.

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’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:	Louis E. Greer	Joseph Rein
	Treasurer and	First Vice President
	Principal Financial Officer	601-208-6898
	601-208-2310
Media:	Melanie A. Morgan
	First Vice President
	601-208-2979

  TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION June 30, 2007 ($ in thousands) (unaudited)

	Quarter Ended June 30,
AVERAGE BALANCES	2007			2006			$ Change			% Change
Securities AFS-taxable	$	655,815		$	873,844		$	(218,029	)		-25.0	%
Securities AFS-nontaxable		52,627			58,265			(5,638	)		-9.7	%
Securities HTM-taxable		196,424			203,272			(6,848	)		-3.4	%
Securities HTM-nontaxable		86,491			92,947			(6,456	)		-6.9	%
Total securities		991,357			1,228,328			(236,971	)		-19.3	%
Loans		6,784,126			6,098,751			685,375			11.2	%
Fed funds sold and rev repos		33,811			28,513			5,298			18.6	%
Total earning assets		7,809,294			7,355,592			453,702			6.2	%
Allowance for loan losses		(72,400	)		(73,679	)		1,279			-1.7	%
Cash and due from banks		285,424			315,722			(30,298	)		-9.6	%
Other assets		783,339			561,241			222,098			39.6	%
Total assets	$	8,805,657		$	8,158,876		$	646,781			7.9	%
Interest-bearing demand deposits	$	1,224,450		$	914,548		$	309,902			33.9	%
Savings deposits		1,770,576			1,666,594			103,982			6.2	%
Time deposits less than $100,000		1,613,569			1,425,602			187,967			13.2	%
Time deposits of $100,000 or more		1,007,157			778,831			228,326			29.3	%
Total interest-bearing deposits		5,615,752			4,785,575			830,177			17.3	%
Fed funds purchased and repos		426,738			522,632			(95,894	)		-18.3	%
Short-term borrowings		142,815			609,137			(466,322	)		-76.6	%
Long-term FHLB advances		-			5,650			(5,650	)		n/m
Subordinated notes		49,688			-			49,688			n/m
Junior subordinated debt securities		70,104			-			70,104			n/m
Total interest-bearing liabilities		6,305,097			5,922,994			382,103			6.5	%
Noninterest-bearing deposits		1,484,611			1,374,068			110,543			8.0	%
Other liabilities		120,879			104,221			16,658			16.0	%
Shareholders' equity		895,070			757,593			137,477			18.1	%
Total liabilities and equity	$	8,805,657		$	8,158,876		$	646,781			7.9	%
n/m - not meaningful

	Year-to-date June 30,
AVERAGE BALANCES	2007			2006			$ Change			% Change
Securities AFS-taxable	$	668,778		$	903,426		$	(234,648	)		-26.0	%
Securities AFS-nontaxable		53,715			59,139			(5,424	)		-9.2	%
Securities HTM-taxable		197,350			202,970			(5,620	)		-2.8	%
Securities HTM-nontaxable		88,230			92,840			(4,610	)		-5.0	%
Total securities		1,008,073			1,258,375			(250,302	)		-19.9	%
Loans		6,724,206			6,083,045			641,161			10.5	%
Fed funds sold and rev repos		53,832			28,160			25,672			91.2	%
Total earning assets		7,786,111			7,369,580			416,531			5.7	%
Allowance for loan losses		(72,426	)		(75,268	)		2,842			-3.8	%
Cash and due from banks		315,532			324,685			(9,153	)		-2.8	%
Other assets		780,980			561,986			218,994			39.0	%
Total assets	$	8,810,197		$	8,180,983		$	629,214			7.7	%
Interest-bearing demand deposits	$	1,210,062		$	877,728		$	332,334			37.9	%
Savings deposits		1,777,829			1,701,771			76,058			4.5	%
Time deposits less than $100,000		1,615,233			1,430,848			184,385			12.9	%
Time deposits of $100,000 or more		1,014,514			785,945			228,569			29.1	%
Total interest-bearing deposits		5,617,638			4,796,292			821,346			17.1	%
Fed funds purchased and repos		389,475			526,398			(136,923	)		-26.0	%
Short-term borrowings		172,661			621,709			(449,048	)		-72.2	%
Long-term FHLB advances		-			5,698			(5,698	)		n/m
Subordinated notes		49,684			-			49,684			n/m
Junior subordinated debt securities		70,104			-			70,104			n/m
Total interest-bearing liabilities		6,299,562			5,950,097			349,465			5.9	%
Noninterest-bearing deposits		1,489,999			1,375,713			114,286			8.3	%
Other liabilities		124,054			104,600			19,454			18.6	%
Shareholders' equity		896,582			750,573			146,009			19.5	%
Total liabilities and equity	$	8,810,197		$	8,180,983		$	629,214			7.7	%
n/m - not meaningful

	June 30,
PERIOD END BALANCES	2007			2006			$ Change			% Change
Securities available for sale	$	608,906		$	876,905		$	(267,999	)		-30.6	%
Securities held to maturity		281,403			296,246			(14,843	)		-5.0	%
Total securities		890,309			1,173,151			(282,842	)		-24.1	%
Loans held for sale		132,588			127,107			5,481			4.3	%
Loans		6,769,632			6,025,840			743,792			12.3	%
Fed funds sold and rev repos		20,081			33,420			(13,339	)		-39.9	%
Total earning assets		7,812,610			7,359,518			453,092			6.2	%
Allowance for loan losses		(70,948	)		(71,846	)		898			-1.2	%
Cash and due from banks		292,248			353,888			(61,640	)		-17.4	%
Mortgage servicing rights		76,955			68,981			7,974			11.6	%
Goodwill		290,852			137,368			153,484			111.7	%
Identifiable intangible assets		30,528			17,505			13,023			74.4	%
Other assets		396,522			362,387			34,135			9.4	%
Total assets	$	8,828,767		$	8,227,801		$	600,966			7.3	%
Noninterest-bearing deposits	$	1,505,821		$	1,453,178		$	52,643			3.6	%
Interest-bearing deposits		5,563,364			4,910,135			653,229			13.3	%
Total deposits		7,069,185			6,363,313			705,872			11.1	%
Fed funds purchased and repos		503,442			487,010			16,432			3.4	%
Short-term borrowings		138,529			532,418			(393,889	)		-74.0	%
Subordinated notes		49,693			-			49,693			n/m
Junior subordinated debt securities		70,104			-			70,104			n/m
Other liabilities		111,654			92,182			19,472			21.1	%
Total liabilities		7,942,607			7,474,923			467,684			6.3	%
Common stock		11,931			11,514			417			3.6	%
Surplus		122,185			51,511			70,674			137.2	%
Retained earnings		770,925			706,948			63,977			9.0	%
Accum other comprehensive
loss, net of tax		(18,881	)		(17,095	)		(1,786	)		n/m
Total shareholders' equity		886,160			752,878			133,282			17.7	%
Total liabilities and equity	$	8,828,767		$	8,227,801		$	600,966			7.3	%
Total interest-bearing liabilities	$	6,325,132		$	5,929,563		$	395,569			6.7	%
n/m - not meaningful

PERIOD END BALANCES	6/30/2007			12/31/2006			$ Change			% Change
Securities available for sale	$	608,906		$	758,273		$	(149,367	)		-19.7	%
Securities held to maturity		281,403			292,243			(10,840	)		-3.7	%
Total securities		890,309			1,050,516			(160,207	)		-15.3	%
Loans held for sale		132,588			95,375			37,213			39.0	%
Loans		6,769,632			6,563,153			206,479			3.1	%
Fed funds sold and rev repos		20,081			27,259			(7,178	)		-26.3	%
Total earning assets		7,812,610			7,736,303			76,307			1.0	%
Allowance for loan losses		(70,948	)		(72,098	)		1,150			-1.6	%
Cash and due from banks		292,248			392,083			(99,835	)		-25.5	%
Mortgage servicing rights		76,955			69,272			7,683			11.1	%
Goodwill		290,852			290,363			489			0.2	%
Identifiable intangible assets		30,528			32,960			(2,432	)		-7.4	%
Other assets		396,522			392,087			4,435			1.1	%
Total assets	$	8,828,767		$	8,840,970		$	(12,203	)		-0.1	%
Noninterest-bearing deposits	$	1,505,821		$	1,574,769		$	(68,948	)		-4.4	%
Interest-bearing deposits		5,563,364			5,401,395			161,969			3.0	%
Total deposits		7,069,185			6,976,164			93,021			1.3	%
Fed funds purchased and repos		503,442			470,434			33,008			7.0	%
Short-term borrowings		138,529			271,067			(132,538	)		-48.9	%
Subordinated notes		49,693			49,677			16			n/m
Junior subordinated debt securities		70,104			70,104			-			n/m
Other liabilities		111,654			112,189			(535	)		-0.5	%
Total liabilities		7,942,607			7,949,635			(7,028	)		-0.1	%
Common stock		11,931			12,226			(295	)		-2.4	%
Surplus		122,185			158,856			(36,671	)		-23.1	%
Retained earnings		770,925			740,870			30,055			4.1	%
Accum other comprehensive
loss, net of tax		(18,881	)		(20,617	)		1,736			n/m
Total shareholders' equity		886,160			891,335			(5,175	)		-0.6	%
Total liabilities and equity	$	8,828,767		$	8,840,970		$	(12,203	)		-0.1	%
Total interest-bearing liabilities	$	6,325,132		$	6,262,677		$	62,455			1.0	%
n/m - not meaningful

	Quarter Ended June 30,
INCOME STATEMENTS	2007		2006			$ Change			% Change
Interest and fees on loans-FTE	$	124,224	$	104,113		$	20,111			19.3	%
Interest on securities-taxable		9,018		10,853			(1,835	)		-16.9	%
Interest on securities-tax exempt-FTE		2,536		2,759			(223	)		-8.1	%
Interest on fed funds sold and rev repos		457		365			92			25.2	%
Other interest income		541		488			53			10.9	%
Total interest income-FTE		136,776		118,578			18,198			15.3	%
Interest on deposits		51,686		33,469			18,217			54.4	%
Interest on fed funds pch and repos		5,014		5,748			(734	)		-12.8	%
Other interest expense		3,937		7,301			(3,364	)		-46.1	%
Total interest expense		60,637		46,518			14,119			30.4	%
Net interest income-FTE		76,139		72,060			4,079			5.7	%
Provision for loan losses		145		(1,964	)		2,109			n/m
Net interest income after provision-FTE		75,994		74,024			1,970			2.7	%
Service charges on deposit accounts		13,729		13,308			421			3.2	%
Insurance commissions		9,901		8,718			1,183			13.6	%
Wealth management		6,400		5,865			535			9.1	%
General banking - other		6,418		5,470			948			17.3	%
Mortgage banking, net		1,799		2,898			(1,099	)		-37.9	%
Other, net		2,194		2,740			(546	)		-19.9	%
Nonint inc-excl sec gains, net		40,441		38,999			1,442			3.7	%
Security gains, net		29		384			(355	)		-92.4	%
Total noninterest income		40,470		39,383			1,087			2.8	%
Salaries and employee benefits		42,853		39,567			3,286			8.3	%
Services and fees		9,041		8,979			62			0.7	%
Net occupancy-premises		4,634		4,070			564			13.9	%
Equipment expense		4,048		3,589			459			12.8	%
Other expense		8,257		7,547			710			9.4	%
Total noninterest expense		68,833		63,752			5,081			8.0	%
Income before income taxes		47,631		49,655			(2,024	)		-4.1	%
Tax equivalent adjustment		2,307		2,442			(135	)		-5.5	%
Income taxes		15,496		16,439			(943	)		-5.7	%
Net income	$	29,828	$	30,774		$	(946	)		-3.1	%
Earnings per share
Basic	$	0.52	$	0.55		$	(0.03	)		-5.5	%
Diluted	$	0.51	$	0.55		$	(0.04	)		-7.3	%
Weighted average shares outstanding
Basic		57,807,447		55,564,866						4.0	%
Diluted		58,025,401		55,834,174						3.9	%
Period end shares outstanding		57,264,283		55,262,232						3.6	%
Dividends per share	$	0.2200	$	0.2100						4.8	%
n/m - not meaningful

	Year-to-date June 30,
INCOME STATEMENTS	2007		2006			$ Change			% Change
Interest and fees on loans-FTE	$	244,189	$	202,596		$	41,593			20.5	%
Interest on securities-taxable		18,098		21,928			(3,830	)		-17.5	%
Interest on securities-tax exempt-FTE		5,169		5,562			(393	)		-7.1	%
Interest on fed funds sold and rev repos		1,433		672			761			113.2	%
Other interest income		1,133		1,002			131			13.1	%
Total interest income-FTE		270,022		231,760			38,262			16.5	%
Interest on deposits		102,041		63,444			38,597			60.8	%
Interest on fed funds pch and repos		8,827		10,804			(1,977	)		-18.3	%
Other interest expense		8,520		14,662			(6,142	)		-41.9	%
Total interest expense		119,388		88,910			30,478			34.3	%
Net interest income-FTE		150,634		142,850			7,784			5.4	%
Provision for loan losses		1,784		(4,948	)		6,732			n/m
Net interest income after provision-FTE		148,850		147,798			1,052			0.7	%
Service charges on deposit accounts		26,422		24,997			1,425			5.7	%
Insurance commissions		18,673		17,067			1,606			9.4	%
Wealth management		12,279		11,476			803			7.0	%
General banking - other		12,588		10,665			1,923			18.0	%
Mortgage banking, net		4,554		6,350			(1,796	)		-28.3	%
Other, net		4,018		4,268			(250	)		-5.9	%
Nonint inc-excl sec gains, net		78,534		74,823			3,711			5.0	%
Security gains, net		87		1,250			(1,163	)		-93.0	%
Total noninterest income		78,621		76,073			2,548			3.3	%
Salaries and employee benefits		86,019		78,944			7,075			9.0	%
Services and fees		18,599		17,743			856			4.8	%
Net occupancy-premises		9,048		7,954			1,094			13.8	%
Equipment expense		7,952		7,232			720			10.0	%
Other expense		16,621		15,391			1,230			8.0	%
Total noninterest expense		138,239		127,264			10,975			8.6	%
Income before income taxes		89,232		96,607			(7,375	)		-7.6	%
Tax equivalent adjustment		4,860		4,991			(131	)		-2.6	%
Income taxes		28,687		31,523			(2,836	)		-9.0	%
Net income	$	55,685	$	60,093		$	(4,408	)		-7.3	%
Earnings per share
Basic	$	0.96	$	1.08		$	(0.12	)		-11.1	%
Diluted	$	0.95	$	1.08		$	(0.13	)		-12.0	%
Weighted average shares outstanding
Basic		58,155,955		55,630,270						4.5	%
Diluted		58,415,070		55,806,439						4.7	%
Period end shares outstanding		57,264,283		55,262,232						3.6	%
Dividends per share	$	0.4400	$	0.4200						4.8	%
n/m - not meaningful

	June 30,
NONPERFORMING ASSETS	2007		2006		$ Change			% Change
Nonaccrual loans	$	27,770	$	25,119	$	2,651			10.6	%
Restructured loans		-		-		-
Total nonperforming loans		27,770		25,119		2,651			10.6	%
Other real estate		3,408		3,107		301			9.7	%
Total nonperforming assets		31,178		28,226		2,952			10.5	%
Loans past due over 90 days
Included in loan portfolio		6,433		6,578		(145	)		-2.2	%
Serviced GNMA loans eligible for repch		11,273		15,957		(4,684	)		-29.4	%
Total loans past due over 90 days		17,706		22,535		(4,829	)		-21.4	%
Total nonperforming assets plus past
due over 90 days	$	48,884	$	50,761	$	(1,877	)		-3.7	%

	Quarter Ended June 30,
ALLOWANCE FOR LOAN LOSSES	2007			2006			$ Change			% Change
Beginning Balance	$	72,049		$	73,542		$	(1,493	)		-2.0	%
Provision for loan losses		145			(1,964	)		2,109			n/m
Charge-offs		(4,187	)		(2,983	)		(1,204	)		40.4	%
Recoveries		2,941			3,251			(310	)		-9.5	%
Net charge-offs		(1,246	)		268			(1,514	)		n/m
Ending Balance	$	70,948		$	71,846		$	(898	)		-1.2	%

	Quarter Ended June 30,
RATIOS	2007			2006
ROA		1.36	%		1.51	%
ROE		13.37	%		16.29	%
Return on average tangible equity		21.38	%		20.82	%
EOP equity/ EOP assets		10.04	%		9.15	%
Average equity/average assets		10.16	%		9.29	%
Interest margin - Yield - FTE		7.03	%		6.47	%
Interest margin - Cost - FTE		3.11	%		2.54	%
Net interest margin - FTE		3.91	%		3.93	%
Rate on interest-bearing liabilities		3.86	%		3.15	%
Efficiency ratio		59.04	%		57.54	%
Net charge offs/average loans		0.07	%		-0.02	%
Provision for loan losses/average loans		0.01	%		-0.13	%
Nonperforming loans/total loans		0.41	%		0.42	%
Nonperforming assets/total loans		0.46	%		0.47	%
Nonperforming assets/total loans+ORE		0.46	%		0.47	%
ALL/nonperforming loans		255.48	%		286.02	%
ALL/total loans		1.05	%		1.19	%
Net loans/total assets		75.87	%		72.36	%

	Quarter Ended June 30,
COMMON STOCK PERFORMANCE	2007			2006
Market value of stock-Close	$	25.86		$	30.97
Market value of stock-High	$	28.76		$	32.25
Market value of stock-Low	$	25.04		$	29.34
Book value of stock	$	15.47		$	13.62
Tangible book value of stock	$	9.86		$	10.82
Tangible equity	$	564,780		$	598,005
Market/Book value of stock		167.16	%		227.39	%

	June 30,
OTHER DATA	2007		2006
EOP Employees - FTE		2,694		2,585

n/m - not meaningful

	Year-to-date June 30,
ALLOWANCE FOR LOAN LOSSES	2007			2006			$ Change			% Change
Beginning Balance	$	72,098		$	76,691		$	(4,593	)		-6.0	%
Provision for loan losses		1,784			(4,948	)		6,732			n/m
Charge-offs		(8,469	)		(5,818	)		(2,651	)		45.6	%
Recoveries		5,535			5,921			(386	)		-6.5	%
Net charge-offs		(2,934	)		103			(3,037	)		n/m
Ending Balance	$	70,948		$	71,846		$	(898	)		-1.2	%

	Year-to-date June 30,
RATIOS	2007			2006
ROA		1.27	%		1.48	%
ROE		12.52	%		16.15	%
Return on average tangible equity		20.08	%		20.71	%
EOP equity/ EOP assets		10.04	%		9.15	%
Average equity/average assets		10.18	%		9.17	%
Interest margin - Yield - FTE		6.99	%		6.34	%
Interest margin - Cost - FTE		3.09	%		2.43	%
Net interest margin - FTE		3.90	%		3.91	%
Rate on interest-bearing liabilities		3.82	%		3.01	%
Efficiency ratio		60.44	%		58.76	%
Net charge offs/average loans		0.09	%		0.00	%
Provision for loan losses/average loans		0.05	%		-0.16	%
Nonperforming loans/total loans		0.41	%		0.42	%
Nonperforming assets/total loans		0.46	%		0.47	%
Nonperforming assets/total loans+ORE		0.46	%		0.47	%
ALL/nonperforming loans		255.48	%		286.02	%
ALL/total loans		1.05	%		1.19	%
Net loans/total assets		75.87	%		72.36	%

	Year-to-date June 30,
COMMON STOCK PERFORMANCE	2007			2006
Market value of stock-Close	$	25.86		$	30.97
Market value of stock-High	$	33.69		$	32.25
Market value of stock-Low	$	25.04		$	27.01
Book value of stock	$	15.47		$	13.62
Tangible book value of stock	$	9.86		$	10.82
Tangible equity	$	564,780		$	598,005
Market/Book value of stock		167.16	%		227.39	%

n/m - not meaningful

	Quarter Ended
AVERAGE BALANCES	6/30/2007			3/31/2007			$ Change			% Change
Securities AFS-taxable	$	655,815		$	681,885		$	(26,070	)		-3.8	%
Securities AFS-nontaxable		52,627			54,815			(2,188	)		-4.0	%
Securities HTM-taxable		196,424			198,286			(1,862	)		-0.9	%
Securities HTM-nontaxable		86,491			89,988			(3,497	)		-3.9	%
Total securities		991,357			1,024,974			(33,617	)		-3.3	%
Loans		6,784,126			6,663,620			120,506			1.8	%
Fed funds sold and rev repos		33,811			74,076			(40,265	)		-54.4	%
Total earning assets		7,809,294			7,762,670			46,624			0.6	%
Allowance for loan losses		(72,400	)		(72,452	)		52			-0.1	%
Cash and due from banks		285,424			345,974			(60,550	)		-17.5	%
Other assets		783,339			778,595			4,744			0.6	%
Total assets	$	8,805,657		$	8,814,787		$	(9,130	)		-0.1	%
Interest-bearing demand deposits	$	1,224,450		$	1,195,515		$	28,935			2.4	%
Savings deposits		1,770,576			1,785,162			(14,586	)		-0.8	%
Time deposits less than $100,000		1,613,569			1,616,916			(3,347	)		-0.2	%
Time deposits of $100,000 or more		1,007,157			1,021,953			(14,796	)		-1.4	%
Total interest-bearing deposits		5,615,752			5,619,546			(3,794	)		-0.1	%
Fed funds purchased and repos		426,738			351,797			74,941			21.3	%
Short-term borrowings		142,815			202,838			(60,023	)		-29.6	%
Subordinated notes		49,688			49,680			8			0.0	%
Junior subordinated debt securities		70,104			70,104			-			0.0	%
Total interest-bearing liabilities		6,305,097			6,293,965			11,132			0.2	%
Noninterest-bearing deposits		1,484,611			1,495,447			(10,836	)		-0.7	%
Other liabilities		120,879			127,264			(6,385	)		-5.0	%
Shareholders' equity		895,070			898,111			(3,041	)		-0.3	%
Total liabilities and equity	$	8,805,657		$	8,814,787		$	(9,130	)		-0.1	%

n/m - not meaningful

PERIOD END BALANCES	6/30/2007			3/31/2007			$ Change			% Change
Securities available for sale	$	608,906		$	703,296		$	(94,390	)		-13.4	%
Securities held to maturity		281,403			286,040			(4,637	)		-1.6	%
Total securities		890,309			989,336			(99,027	)		-10.0	%
Loans held for sale		132,588			125,898			6,690			5.3	%
Loans		6,769,632			6,626,515			143,117			2.2	%
Fed funds sold and rev repos		20,081			104,900			(84,819	)		-80.9	%
Total earning assets		7,812,610			7,846,649			(34,039	)		-0.4	%
Allowance for loan losses		(70,948	)		(72,049	)		1,101			-1.5	%
Cash and due from banks		292,248			336,438			(44,190	)		-13.1	%
Mortgage servicing rights		76,955			70,594			6,361			9.0	%
Goodwill		290,852			290,246			606			0.2	%
Identifiable intangible assets		30,528			31,744			(1,216	)		-3.8	%
Other assets		396,522			389,715			6,807			1.7	%
Total assets	$	8,828,767		$	8,893,337		$	(64,570	)		-0.7	%
Noninterest-bearing deposits	$	1,505,821		$	1,522,066		$	(16,245	)		-1.1	%
Interest-bearing deposits		5,563,364			5,792,236			(228,872	)		-4.0	%
Total deposits		7,069,185			7,314,302			(245,117	)		-3.4	%
Fed funds purchased and repos		503,442			289,798			213,644			73.7	%
Short-term borrowings		138,529			167,831			(29,302	)		-17.5	%
Subordinated notes		49,693			49,685			8			0.0	%
Junior subordinated debt securities		70,104			70,104			-			0.0	%
Other liabilities		111,654			107,610			4,044			3.8	%
Total liabilities		7,942,607			7,999,330			(56,723	)		-0.7	%
Common stock		11,931			12,130			(199	)		-1.6	%
Surplus		122,185			146,937			(24,752	)		-16.8	%
Retained earnings		770,925			753,801			17,124			2.3	%
Accum other comprehensive
loss, net of tax		(18,881	)		(18,861	)		(20	)		0.1	%
Total shareholders' equity		886,160			894,007			(7,847	)		-0.9	%
Total liabilities and equity	$	8,828,767		$	8,893,337		$	(64,570	)		-0.7	%
Total interest-bearing liabilities	$	6,325,132		$	6,369,654		$	(44,522	)		-0.7	%
n/m - not meaningful

	Quarter Ended
INCOME STATEMENTS	6/30/2007		3/31/2007		$ Change			% Change
Interest and fees on loans-FTE	$	124,224	$	119,965	$	4,259			3.6	%
Interest on securities-taxable		9,018		9,080		(62	)		-0.7	%
Interest on securities-tax exempt-FTE		2,536		2,633		(97	)		-3.7	%
Interest on fed funds sold and rev repos		457		976		(519	)		-53.2	%
Other interest income		541		592		(51	)		-8.6	%
Total interest income-FTE		136,776		133,246		3,530			2.6	%
Interest on deposits		51,686		50,355		1,331			2.6	%
Interest on fed funds pch and repos		5,014		3,813		1,201			31.5	%
Other interest expense		3,937		4,583		(646	)		-14.1	%
Total interest expense		60,637		58,751		1,886			3.2	%
Net interest income-FTE		76,139		74,495		1,644			2.2	%
Provision for loan losses		145		1,639		(1,494	)		n/m
Net interest income after provision-FTE		75,994		72,856		3,138			4.3	%
Service charges on deposit accounts		13,729		12,693		1,036			8.2	%
Insurance commissions		9,901		8,772		1,129			12.9	%
Wealth management		6,400		5,879		521			8.9	%
General banking - other		6,418		6,170		248			4.0	%
Mortgage banking, net		1,799		2,755		(956	)		-34.7	%
Other, net		2,194		1,824		370			20.3	%
Nonint inc-excl sec gains, net		40,441		38,093		2,348			6.2	%
Security gains, net		29		58		(29	)		-50.0	%
Total noninterest income		40,470		38,151		2,319			6.1	%
Salaries and employee benefits		42,853		43,166		(313	)		-0.7	%
Services and fees		9,041		9,558		(517	)		-5.4	%
Net occupancy-premises		4,634		4,414		220			5.0	%
Equipment expense		4,048		3,904		144			3.7	%
Other expense		8,257		8,364		(107	)		-1.3	%
Total noninterest expense		68,833		69,406		(573	)		-0.8	%
Income before income taxes		47,631		41,601		6,030			14.5	%
Tax equivalent adjustment		2,307		2,553		(246	)		-9.6	%
Income taxes		15,496		13,191		2,305			17.5	%
Net income	$	29,828	$	25,857	$	3,971			15.4	%
Earnings per share
Basic	$	0.52	$	0.44	$	0.08			18.2	%
Diluted	$	0.51	$	0.44	$	0.07			15.9	%
Weighted average shares outstanding
Basic		57,807,447		58,508,335					-1.2	%
Diluted		58,025,401		58,791,656					-1.3	%
Period end shares outstanding		57,264,283		58,217,983					-1.6	%
Dividends per share	$	0.2200	$	0.2200					0.0	%
n/m - not meaningful

NONPERFORMING ASSETS	6/30/2007		3/31/2007		$ Change			% Change
Nonaccrual loans	$	27,770	$	37,061	$	(9,291	)		-25.1	%
Restructured loans		-		-		-
Total nonperforming loans		27,770		37,061		(9,291	)		-25.1	%
Other real estate		3,408		2,158		1,250			57.9	%
Total nonperforming assets		31,178		39,219		(8,041	)		-20.5	%
Loans past due over 90 days
Included in Loan Portfolio		6,433		3,583		2,850			79.5	%
Serviced GNMA loans eligible for repch		11,273		6,336		4,937			77.9	%
Total loans past due over 90 days		17,706		9,919		7,787			78.5	%
Total nonperforming assets plus past
due over 90 days	$	48,884	$	49,138	$	(254	)		-0.5	%

	Quarter Ended
ALLOWANCE FOR LOAN LOSSES	6/30/2007			3/31/2007			$ Change			% Change
Beginning Balance	$	72,049		$	72,098		$	(49	)		-0.1	%
Provision for loan losses		145			1,639			(1,494	)		-91.2	%
Charge-offs		(4,187	)		(4,282	)		95			-2.2	%
Recoveries		2,941			2,594			347			13.4	%
Net charge-offs		(1,246	)		(1,688	)		442			-26.2	%
Ending Balance	$	70,948		$	72,049		$	(1,101	)		-1.5	%

	Quarter Ended
RATIOS	6/30/2007			3/31/2007
ROA		1.36	%		1.19	%
ROE		13.37	%		11.68	%
Return on average tangible equity		21.38	%		18.76	%
EOP equity/ EOP assets		10.04	%		10.05	%
Average equity/average assets		10.16	%		10.19	%
Interest margin - Yield - FTE		7.03	%		6.96	%
Interest margin - Cost - FTE		3.11	%		3.07	%
Net interest margin - FTE		3.91	%		3.89	%
Rate on interest-bearing liabilities		3.86	%		3.79	%
Efficiency ratio		59.04	%		61.89	%
Net charge offs/average loans		0.07	%		0.10	%
Provision for loan losses/average loans		0.01	%		0.10	%
Nonperforming loans/total loans		0.41	%		0.56	%
Nonperforming assets/total loans		0.46	%		0.59	%
Nonperforming assets/total loans+ORE		0.46	%		0.59	%
ALL/nonperforming loans		255.48	%		194.41	%
ALL/total loans		1.05	%		1.09	%
Net loans/total assets		75.87	%		73.70	%

	Quarter Ended
COMMON STOCK PERFORMANCE	6/30/2007			3/31/2007
Market value of stock-Close	$	25.86		$	28.04
Market value of stock-High	$	28.76		$	33.69
Market value of stock-Low	$	25.04		$	26.85
Book value of stock	$	15.47		$	15.36
Tangible book value of stock	$	9.86		$	9.83
Tangible equity	$	564,780		$	572,017
Market/Book value of stock		167.16	%		182.55	%

OTHER DATA	6/30/2007		3/31/2007
EOP Employees - FTE		2,694		2,729
n/m - not meaningful

  TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2007 ($ in thousands) (unaudited)

 Note 1 – Financial Performance Non-GAAP

Management is presenting, in the accompanying 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 those of prior periods.

Non-GAAP Disclosures

($ in thousands except per share amounts)

	Quarter Ended
	6/30/2007						3/31/2007						6/30/2006
	Amount			Basic EPS			Amount			Basic EPS			Amount			Basic EPS
Net Income as reported-GAAP	$	29,828		$	0.516		$	25,857		$	0.442		$	30,774		$	0.554
Adjustments (net of taxes):
Less items related to Hurricane Katrina
Provision for loan losses		-			-			(396	)		(0.007	)		(1,047	)		(0.019	)
Mortgage related charges		-			-			(269	)		(0.004	)		(164	)		(0.003	)
		-			-			(665	)		(0.011	)		(1,211	)		(0.022	)
Net Income adjusted for specific items (Non-GAAP)	$	29,828		$	0.516		$	25,192		$	0.431		$	29,563		$	0.532
	Year-to-Date
	6/30/2007						6/30/2006
	Amount			Basic EPS			Amount			Basic EPS
Net Income as reported-GAAP	$	55,685		$	0.958		$	60,093		$	1.080
Adjustments (net of taxes):
Less items related to Hurricane Katrina
Provision for loan losses		(396	)		(0.007	)		(2,991	)		(0.054	)
Mortgage related charges		(269	)		(0.005	)		(680	)		(0.012	)
		(665	)		(0.012	)		(3,671	)		(0.066	)
Net Income adjusted for specific items (Non-GAAP)	$	55,020		$	0.946		$	56,422		$	1.014

During the third quarter of 2005, immediately following in the aftermath of Hurricane Katrina, 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 pretax basis.

Trustmark updates its estimates for probable losses resulting from Hurricane Katrina on a quarterly basis.  As a result, Trustmark has reduced its allowance for loan losses during 2007 by $0.8 million and other reserves by $0.4 million on a pretax basis resulting in an increase to Trustmark’s net income of $0.7 million, or $0.01 per share.  The table above reflects the quarterly financial impact these changes in estimates had on reported earnings.

At June 30, 2007, the allowance for loan losses included specific Katrina accruals totaling $1.3 million, comprised of $0.9 million for mortgage loans and $0.4 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 $18.9 million in other assets as well as deposits of $593.3 million and borrowings and other liabilities of $13.8 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 $173.5 million, of which $19.3 million has been allocated to core deposits, $690 thousand to borrower relationships and $153.5 million to goodwill.

Note 3 – Loans and Allowance for Loan Losses

For the periods presented, loans consisted of the following:

	6/30/07		3/31/07		6/30/06
Loans secured by real estate:
Construction, land development and other land loans	$	1,059,721	$	1,000,006	$	812,748
Secured by 1-4 family residential properties		1,827,945		1,805,469		1,837,392
Secured by nonfarm, nonresidential properties		1,268,236		1,233,710		1,110,566
Other		132,833		150,120		107,517
Loans to finance agricultural production and other loans to farmers		38,999		25,707		27,230
Commercial and industrial loans		1,163,346		1,155,825		948,647
Consumer loans		1,018,427		969,739		912,718
Obligations of states and political subdivisions		205,431		231,245		212,367
Other loans		54,694		54,694		56,655
Loans		6,769,632		6,626,515		6,025,840
Less Allowance for loan losses		70,948		72,049		71,846
Net Loans	$	6,698,684	$	6,554,466	$	5,953,994

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 probable 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 on 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, among 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 during the fourth quarter of 2006.

Note 4 – Mortgage Banking

Trustmark utilizes derivative instruments to offset changes in the fair value of mortgage servicing rights (MSR) attributable to changes in interest rates. Changes in the fair value of the derivative instrument are recorded in mortgage banking income, net and are offset by the changes in the fair value of MSR, as shown in the accompanying table.  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 market changes.  During 2007, the impact of implementing this strategy resulted in a net negative ineffectiveness of $0.8 million.

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

	Quarter Ended									Year-to-date
	6/30/07			3/31/07			6/30/06			6/30/07			6/30/06
Mortgage servicing income, net	$	3,478		$	3,478		$	3,239		$	6,956		$	6,574
Change in fair value-MSR from market changes		4,392			(447	)		2,202			3,945			6,014
Change in fair value-MSR from runoff		(2,494	)		(2,104	)		(2,400	)		(4,598	)		(4,452	)
Change in fair value of derivatives		(5,492	)		715			(1,881	)		(4,777	)		(4,437	)
Gain on sales of loans		1,496			1,345			1,613			2,841			2,654
Other, net		419			(232	)		125			187			(3	)
Mortgage banking, net	$	1,799		$	2,755		$	2,898		$	4,554		$	6,350

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
	6/30/07			3/31/07			6/30/06			6/30/07			6/30/06
Securities – Taxable		4.24	%		4.18	%		4.04	%		4.21	%		4.00	%
Securities - Nontaxable		7.31	%		7.37	%		7.32	%		7.34	%		7.38	%
Securities – Total		4.67	%		4.63	%		4.44	%		4.65	%		4.41	%
Loans		7.34	%		7.30	%		6.85	%		7.32	%		6.72	%
FF Sold & Rev Repo		5.42	%		5.34	%		5.13	%		5.37	%		4.81	%
Total Earning Assets		7.03	%		6.96	%		6.47	%		6.99	%		6.34	%
Interest-bearing Deposits		3.69	%		3.63	%		2.81	%		3.66	%		2.67	%
FF Pch & Repo		4.71	%		4.40	%		4.41	%		4.57	%		4.14	%
Borrowings		6.01	%		5.76	%		4.76	%		5.87	%		4.71	%
Total Interest-bearing Liabilities		3.86	%		3.79	%		3.15	%		3.82	%		3.01	%
Net interest margin		3.91	%		3.89	%		3.93	%		3.90	%		3.91	%

Note 6 – Subordinated Notes Payable and Junior Subordinated Debt Securities

In December 2006, Trustmark National Bank (TNB) issued $50.0 million aggregate principal amount of Subordinated Notes (the Notes) due December 15, 2016.  At June 30, 2007, the carrying amount of the Notes was $49.7 million.  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 its Delaware trust affiliate, Trustmark Preferred Capital Trust I (the Trust).  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.

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.  Under applicable regulatory guidelines, these trust preferred securities qualify as Tier 1 capital.

As defined in applicable accounting standards, both Trustmark Preferred Capital Trust I and Republic Bancshares Capital Trust I, wholly-owned subsidiaries of Trustmark, are considered variable interest entities for which Trustmark is not the primary beneficiary.  Accordingly, the accounts of both trusts are not included in Trustmark’s consolidated financial statements.

Note 7 – Basis of Presentation

Trustmark’s investment in the stock of the Federal Reserve Bank (FRB) and Federal Home Loan Bank (FHLB) has been reclassed from investment securities to other assets since these equity securities do not have a readily determinable fair value which places them outside the scope of SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities.” Period end balances of FRB and FHLB stock totaled $25.3 million at June 30, 2007, $33.1 million at March 31, 2007, $34.0 million at December 31, 2006 and $28.7 million at June 30, 2006.

In addition, Trustmark has also reclassed its investment in Qualified Zone Academy Bonds (QZABs) from other assets into loans.  QZABs are part of a federal initiative that provides funds on a limited basis to schools that meet very specific criteria for construction and modernization projects.  To qualify for funds from this initiative a school must be located in a federal empowerment zone, an enterprise community or 35 percent or more of its students must qualify for free or reduced price lunch. Interest payments on QZABs, which are covered by the federal government, are provided to Trustmark in the form of tax credits, in lieu of cash.  Trustmark’s investment in QZABs will be measured in accordance with SFAS No. 115 since these investments meet the definition of a security, however, since Trustmark consistently reports investments of this nature as loans to states and political subdivisions, they will be classified as loans.  Period end balances of QZABs totaled $21.3 million at June 30, 2007, March 31, 2007 and December 31, 2006, with the June 30, 2006 balance equaling $19.9 million.

These reclassifications have been made to prior period amounts in order to conform to the current period presentation.