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

  News Release

Trustmark Corporation Announces Third Quarter Earnings

Jackson, Miss. – October 23, 2007 – Trustmark Corporation (NASDAQ:TRMK) announced net income of $29.1 million in the third quarter of 2007, which represented basic earnings per share of $0.51.  Trustmark’s third quarter net income produced a return on average tangible shareholders’ equity of 20.41% and a return on average assets of 1.31%.  During the first nine months of 2007, Trustmark’s net income totaled $84.8 million, which represented basic earnings per share of $1.47.  Trustmark’s performance during the first nine months of 2007 resulted in returns on average tangible shareholders’ equity and average assets of 20.19% and 1.29%, respectively.  Highlights for the third quarter of 2007 compared to the second quarter of 2007 include:

·   Average total loans increased $186.3 million, or 2.7%

·   Net interest income (FTE) expanded 1.6% to $77.4 million, resulting in a stable net interest margin of 3.91%

·   Noninterest income increased 2.7% to $41.6 million and represented 35.0% of total revenue

·   Noninterest expense declined for the second consecutive quarter

·   Continued investment in banking center expansion program with opening of two additional offices

Richard G. Hickson, Chairman and CEO, stated, “The repositioning of our balance sheet continued during the third quarter as quality, higher yield loans replaced maturing lower yield securities.  Increasing momentum of our balance sheet strategy is especially evident when reviewing our performance during the second and third quarters of 2007.  On a linked quarter basis, average loans increased $186.3 million, or 2.7%.  Commercial and consumer loan growth was well diversified and the disciplined reduction in our home mortgage loan portfolio continued.  From a geographic perspective, loan growth was most pronounced in our Houston, Jackson, and South Mississippi markets.  Our successful expansion into higher growth markets is reflected in Trustmark’s loan portfolio.  At the end of the third quarter, our Houston, Florida panhandle and Memphis loan portfolios represented 11%, 10%, and 7% of our total loans, respectively.

“Trustmark optimized its funding costs and reduced balances of higher yielding deposits during the third quarter.  Loan growth, coupled with diligent management of our funding base, is reflected in increased net interest income and a stable net interest margin of 3.91%,” said Hickson.

“Investments in image technology are generating significantly increasing returns for Trustmark.  The ability to capture and transmit check images electronically has been implemented in our banking centers in Florida, Tennessee and Texas.  This has significantly decreased clearing and courier costs and expedited funds availability.  In addition, Trustmark is now both sending and receiving its daily transit check clearings electronically with the Federal Reserve Bank of Atlanta.  The benefits of these investments have produced tangible results:  average cash and cash equivalent levels during the third quarter have been reduced by approximately $65 million relative to figures one year earlier, positively impacting the net interest margin and reducing staffing in operational areas.  Implementation of check image capture technology in our core Mississippi banking centers will be completed by mid-year 2008, resulting in additional efficiencies in courier costs and human capital.

“Trustmark initiated an enhanced process to proactively manage expenses during the first quarter of 2007 that has reduced our quarterly noninterest expense by approximately $1.0 million, or by 1.5% annually.  As a result, our efficiency ratio improved to 57.98% during the third quarter of 2007.  The success of this initiative is due in part to technology enhancements, vendor and contract management programs, and human capital management.  While we are pleased with our progress to date, we are committed to identifying additional reengineering and efficiency opportunities designed to enhance shareholder value,” said Hickson.

“We believe Trustmark’s credit culture and underwriting processes have well-positioned the organization to face the challenges presented by the current economic environment.  While Trustmark has no sub-prime mortgage loans, we are not immune to the credit challenges and current market conditions facing the financial services industry.  During the third quarter of 2007, nonperforming loans increased $17.7 million due principally to two relationships with residential real estate developers originated in our Florida and Tennessee markets that were impacted by the residential real estate slowdown.  Based upon current economic conditions, we believe Trustmark is adequately reserved.  Trustmark’s allocation of its allowance for loan losses represented 1.36% of commercial loans and 0.58% of consumer and home mortgage loans, resulting in an allowance to total loans of 1.05% at September 30, 2007.  Net charge-offs represented 0.20% of average loans during the third quarter and 0.13% of average loans year-to-date, comparing favorably to industry benchmarks,” 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.  During the third quarter, Trustmark opened two banking centers in Jackson and Hattiesburg.  We anticipate opening two additional banking centers in the Houston and Florida panhandle markets during the remainder of 2007.  During 2008, four additional banking offices are expected to open in the Florida panhandle, Houston, Memphis and Mississippi Gulf Coast markets.  These actions reflect our commitment to build long-term value for our shareholders through reallocation of resources to areas with additional growth potential," said Hickson.

“Our Board of Directors recently affirmed Trustmark’s 2008-10 Strategic Plan and strategy of continued migration into markets with higher growth opportunities, including Florida and Texas.  While expanding into higher growth markets, Trustmark will vigorously defend its leadership position in major legacy markets in Mississippi.  We will continue to focus on revenue growth and expense management in an effort to increase shareholder value,” said Hickson.

ADDITIONAL INFORMATION

As previously announced, Trustmark will host a conference call with analysts on Wednesday, October 24 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 6416369 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, October 31 in archived format at the same web address or by calling (888) 203-1112, passcode 6416369.

Trustmark is a financial services company providing banking and financial solutions through over 150 offices and 2,600 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 September 30, 2007 ($ in thousands) (unaudited)

	Quarter Ended September 30,
AVERAGE BALANCES	2007			2006			$ Change			% Change
Securities AFS-taxable	$	525,858		$	831,128		$	(305,270	)		-36.7	%
Securities AFS-nontaxable		48,818			56,281			(7,463	)		-13.3	%
Securities HTM-taxable		194,356			198,513			(4,157	)		-2.1	%
Securities HTM-nontaxable		84,767			94,509			(9,742	)		-10.3	%
Total securities		853,799			1,180,431			(326,632	)		-27.7	%
Loans		6,970,434			6,355,969			614,465			9.7	%
Fed funds sold and rev repos		30,201			25,205			4,996			19.8	%
Total earning assets		7,854,434			7,561,605			292,829			3.9	%
Allowance for loan losses		(70,950	)		(73,836	)		2,886			-3.9	%
Cash and due from banks		260,997			325,817			(64,820	)		-19.9	%
Other assets		792,967			636,434			156,533			24.6	%
Total assets	$	8,837,448		$	8,450,020		$	387,428			4.6	%
Interest-bearing demand deposits	$	1,166,548		$	1,039,355		$	127,193			12.2	%
Savings deposits		1,671,993			1,669,894			2,099			0.1	%
Time deposits less than $100,000		1,575,320			1,533,155			42,165			2.8	%
Time deposits of $100,000 or more		1,037,785			880,505			157,280			17.9	%
Total interest-bearing deposits		5,451,646			5,122,909			328,737			6.4	%
Fed funds purchased and repos		491,488			432,486			59,002			13.6	%
Short-term borrowings		314,264			535,339			(221,075	)		-41.3	%
Subordinated notes		49,696			-			49,696			n/m
Junior subordinated debt securities		70,104			32,631			37,473			114.8	%
Total interest-bearing liabilities		6,377,198			6,123,365			253,833			4.1	%
Noninterest-bearing deposits		1,423,745			1,388,201			35,544			2.6	%
Other liabilities		135,469			132,421			3,048			2.3	%
Shareholders' equity		901,036			806,033			95,003			11.8	%
Total liabilities and equity	$	8,837,448		$	8,450,020		$	387,428			4.6	%
n/m - not meaningful

	Year-to-date September 30,
AVERAGE BALANCES	2007			2006			$ Change			% Change
Securities AFS-taxable	$	620,614		$	879,062		$	(258,448	)		-29.4	%
Securities AFS-nontaxable		52,065			58,176			(6,111	)		-10.5	%
Securities HTM-taxable		196,341			201,468			(5,127	)		-2.5	%
Securities HTM-nontaxable		87,063			93,403			(6,340	)		-6.8	%
Total securities		956,083			1,232,109			(276,026	)		-22.4	%
Loans		6,807,184			6,175,020			632,164			10.2	%
Fed funds sold and rev repos		45,868			27,164			18,704			68.9	%
Total earning assets		7,809,135			7,434,293			374,842			5.0	%
Allowance for loan losses		(71,929	)		(74,786	)		2,857			-3.8	%
Cash and due from banks		297,154			325,067			(27,913	)		-8.6	%
Other assets		785,020			587,073			197,947			33.7	%
Total assets	$	8,819,380		$	8,271,647		$	547,733			6.6	%
Interest-bearing demand deposits	$	1,195,398		$	932,196		$	263,202			28.2	%
Savings deposits		1,742,163			1,691,028			51,135			3.0	%
Time deposits less than $100,000		1,601,783			1,465,325			136,458			9.3	%
Time deposits of $100,000 or more		1,022,356			817,812			204,544			25.0	%
Total interest-bearing deposits		5,561,700			4,906,361			655,339			13.4	%
Fed funds purchased and repos		423,853			494,750			(70,897	)		-14.3	%
Short-term borrowings		220,381			592,602			(372,221	)		-62.8	%
Long-term FHLB advances		-			3,778			(3,778	)		n/m
Subordinated notes		49,688			-			49,688			n/m
Junior subordinated debt securities		70,104			10,997			59,107			537.5	%
Total interest-bearing liabilities		6,325,726			6,008,488			317,238			5.3	%
Noninterest-bearing deposits		1,467,671			1,379,921			87,750			6.4	%
Other liabilities		127,900			113,976			13,924			12.2	%
Shareholders' equity		898,083			769,262			128,821			16.7	%
Total liabilities and equity	$	8,819,380		$	8,271,647		$	547,733			6.6	%
n/m - not meaningful

	September 30,
PERIOD END BALANCES	2007			2006			$ Change			% Change
Securities available for sale	$	519,920		$	825,106		$	(305,186	)		-37.0	%
Securities held to maturity		278,385			289,125			(10,740	)		-3.7	%
Total securities		798,305			1,114,231			(315,926	)		-28.4	%
Loans held for sale		133,693			125,988			7,705			6.1	%
Loans		6,917,541			6,558,900			358,641			5.5	%
Fed funds sold and rev repos		28,625			6,907			21,718			314.4	%
Total earning assets		7,878,164			7,806,026			72,138			0.9	%
Allowance for loan losses		(72,368	)		(75,539	)		3,171			-4.2	%
Cash and due from banks		306,107			348,397			(42,290	)		-12.1	%
Mortgage servicing rights		73,253			66,526			6,727			10.1	%
Goodwill		291,177			290,753			424			0.1	%
Identifiable intangible assets		29,313			36,503			(7,190	)		-19.7	%
Other assets		405,341			390,101			15,240			3.9	%
Total assets	$	8,910,987		$	8,862,767		$	48,220			0.5	%
Noninterest-bearing deposits	$	1,435,231		$	1,580,533		$	(145,302	)		-9.2	%
Interest-bearing deposits		5,467,221			5,541,680			(74,459	)		-1.3	%
Total deposits		6,902,452			7,122,213			(219,761	)		-3.1	%
Fed funds purchased and repos		525,142			258,463			266,679			103.2	%
Short-term borrowings		340,598			430,210			(89,612	)		-20.8	%
Subordinated notes		49,701			-			49,701			n/m
Junior subordinated debt securities		70,104			70,104			-			n/m
Other liabilities		115,453			100,244			15,209			15.2	%
Total liabilities		8,003,450			7,981,234			22,216			0.3	%
Common stock		11,933			12,212			(279	)		-2.3	%
Surplus		123,227			156,625			(33,398	)		-21.3	%
Retained earnings		787,356			724,384			62,972			8.7	%
Accum other comprehensive
loss, net of tax		(14,979	)		(11,688	)		(3,291	)		n/m
Total shareholders' equity		907,537			881,533			26,004			2.9	%
Total liabilities and equity	$	8,910,987		$	8,862,767		$	48,220			0.5	%
Total interest-bearing liabilities	$	6,452,766		$	6,300,457		$	152,309			2.4	%
n/m - not meaningful

PERIOD END BALANCES	9/30/2007			12/31/2006			$ Change			% Change
Securities available for sale	$	519,920		$	758,273		$	(238,353	)		-31.4	%
Securities held to maturity		278,385			292,243			(13,858	)		-4.7	%
Total securities		798,305			1,050,516			(252,211	)		-24.0	%
Loans held for sale		133,693			95,375			38,318			40.2	%
Loans		6,917,541			6,563,153			354,388			5.4	%
Fed funds sold and rev repos		28,625			27,259			1,366			5.0	%
Total earning assets		7,878,164			7,736,303			141,861			1.8	%
Allowance for loan losses		(72,368	)		(72,098	)		(270	)		0.4	%
Cash and due from banks		306,107			392,083			(85,976	)		-21.9	%
Mortgage servicing rights		73,253			69,272			3,981			5.7	%
Goodwill		291,177			290,363			814			0.3	%
Identifiable intangible assets		29,313			32,960			(3,647	)		-11.1	%
Other assets		405,341			392,087			13,254			3.4	%
Total assets	$	8,910,987		$	8,840,970		$	70,017			0.8	%
Noninterest-bearing deposits	$	1,435,231		$	1,574,769		$	(139,538	)		-8.9	%
Interest-bearing deposits		5,467,221			5,401,395			65,826			1.2	%
Total deposits		6,902,452			6,976,164			(73,712	)		-1.1	%
Fed funds purchased and repos		525,142			470,434			54,708			11.6	%
Short-term borrowings		340,598			271,067			69,531			25.7	%
Subordinated notes		49,701			49,677			24			n/m
Junior subordinated debt securities		70,104			70,104			-			n/m
Other liabilities		115,453			112,189			3,264			2.9	%
Total liabilities		8,003,450			7,949,635			53,815			0.7	%
Common stock		11,933			12,226			(293	)		-2.4	%
Surplus		123,227			158,856			(35,629	)		-22.4	%
Retained earnings		787,356			740,870			46,486			6.3	%
Accum other comprehensive
loss, net of tax		(14,979	)		(20,617	)		5,638			n/m
Total shareholders' equity		907,537			891,335			16,202			1.8	%
Total liabilities and equity	$	8,910,987		$	8,840,970		$	70,017			0.8	%
Total interest-bearing liabilities	$	6,452,766		$	6,262,677		$	190,089			3.0	%
n/m - not meaningful

	Quarter Ended September 30,
INCOME STATEMENTS	2007		2006			$ Change			% Change
Interest and fees on loans-FTE	$	129,394	$	113,756		$	15,638			13.7	%
Interest on securities-taxable		7,181		10,222			(3,041	)		-29.7	%
Interest on securities-tax exempt-FTE		2,422		2,773			(351	)		-12.7	%
Interest on fed funds sold and rev repos		397		346			51			14.7	%
Other interest income		482		544			(62	)		-11.4	%
Total interest income-FTE		139,876		127,641			12,235			9.6	%
Interest on deposits		50,423		41,781			8,642			20.7	%
Interest on fed funds pch and repos		5,898		4,896			1,002			20.5	%
Other interest expense		6,186		7,890			(1,704	)		-21.6	%
Total interest expense		62,507		54,567			7,940			14.6	%
Net interest income-FTE		77,369		73,074			4,295			5.9	%
Provision for loan losses		4,999		(81	)		5,080			n/m
Net interest income after provision-FTE		72,370		73,155			(785	)		-1.1	%
Service charges on deposit accounts		13,849		14,360			(511	)		-3.6	%
Insurance commissions		8,983		8,935			48			0.5	%
Wealth management		6,507		5,770			737			12.8	%
General banking - other		6,111		5,668			443			7.8	%
Mortgage banking, net		2,503		1,131			1,372			121.3	%
Other, net		3,593		3,559			34			1.0	%
Nonint inc-excl sec gains, net		41,546		39,423			2,123			5.4	%
Security gains, net		23		645			(622	)		-96.4	%
Total noninterest income		41,569		40,068			1,501			3.7	%
Salaries and employee benefits		42,257		40,231			2,026			5.0	%
Services and fees		9,285		9,240			45			0.5	%
Net occupancy-premises		4,753		4,479			274			6.1	%
Equipment expense		3,922		3,731			191			5.1	%
Other expense		8,271		8,144			127			1.6	%
Total noninterest expense		68,488		65,825			2,663			4.0	%
Income before income taxes		45,451		47,398			(1,947	)		-4.1	%
Tax equivalent adjustment		2,283		2,444			(161	)		-6.6	%
Income taxes		14,087		15,193			(1,106	)		-7.3	%
Net income	$	29,081	$	29,761		$	(680	)		-2.3	%
Earnings per share
Basic	$	0.51	$	0.53		$	(0.02	)		-3.8	%
Diluted	$	0.51	$	0.52		$	(0.01	)		-1.9	%
Weighted average shares outstanding
Basic		57,267,119		56,590,964						1.2	%
Diluted		57,526,573		56,830,753						1.2	%
Period end shares outstanding		57,272,408		58,611,242						-2.3	%
Dividends per share	$	0.2200	$	0.2100						4.8	%
n/m - not meaningful

	Year-to-date September 30,
INCOME STATEMENTS	2007		2006			$ Change			% Change
Interest and fees on loans-FTE	$	373,583	$	316,352		$	57,231			18.1	%
Interest on securities-taxable		25,279		32,150			(6,871	)		-21.4	%
Interest on securities-tax exempt-FTE		7,591		8,335			(744	)		-8.9	%
Interest on fed funds sold and rev repos		1,830		1,018			812			79.8	%
Other interest income		1,615		1,546			69			4.5	%
Total interest income-FTE		409,898		359,401			50,497			14.1	%
Interest on deposits		152,464		105,225			47,239			44.9	%
Interest on fed funds pch and repos		14,725		15,700			(975	)		-6.2	%
Other interest expense		14,706		22,552			(7,846	)		-34.8	%
Total interest expense		181,895		143,477			38,418			26.8	%
Net interest income-FTE		228,003		215,924			12,079			5.6	%
Provision for loan losses		6,783		(5,029	)		11,812			n/m
Net interest income after provision-FTE		221,220		220,953			267			0.1	%
Service charges on deposit accounts		40,271		39,357			914			2.3	%
Insurance commissions		27,656		26,002			1,654			6.4	%
Wealth management		18,786		17,246			1,540			8.9	%
General banking - other		18,699		16,333			2,366			14.5	%
Mortgage banking, net		7,057		7,481			(424	)		-5.7	%
Other, net		7,611		7,827			(216	)		-2.8	%
Nonint inc-excl sec gains, net		120,080		114,246			5,834			5.1	%
Security gains, net		110		1,895			(1,785	)		-94.2	%
Total noninterest income		120,190		116,141			4,049			3.5	%
Salaries and employee benefits		128,276		119,175			9,101			7.6	%
Services and fees		27,884		26,983			901			3.3	%
Net occupancy-premises		13,801		12,433			1,368			11.0	%
Equipment expense		11,874		10,963			911			8.3	%
Other expense		24,892		23,535			1,357			5.8	%
Total noninterest expense		206,727		193,089			13,638			7.1	%
Income before income taxes		134,683		144,005			(9,322	)		-6.5	%
Tax equivalent adjustment		7,143		7,435			(292	)		-3.9	%
Income taxes		42,774		46,716			(3,942	)		-8.4	%
Net income	$	84,766	$	89,854		$	(5,088	)		-5.7	%
Earnings per share
Basic	$	1.47	$	1.61		$	(0.14	)		-8.7	%
Diluted	$	1.46	$	1.60		$	(0.14	)		-8.8	%
Weighted average shares outstanding
Basic		57,856,420		55,954,020						3.4	%
Diluted		58,142,830		56,107,748						3.6	%
Period end shares outstanding		57,272,408		58,611,242						-2.3	%
Dividends per share	$	0.6600	$	0.6300						4.8	%
n/m - not meaningful

	September 30,
NONPERFORMING ASSETS	2007		2006		$ Change			% Change
Nonaccrual loans	$	45,449	$	27,758	$	17,691			63.7	%
Restructured loans		-		-		-
Total nonperforming loans		45,449		27,758		17,691			63.7	%
Other real estate		5,870		3,284		2,586			78.7	%
Total nonperforming assets		51,319		31,042		20,277			65.3	%
Loans past due over 90 days
Included in loan portfolio		9,521		3,721		5,800			155.9	%
Serviced GNMA loans eligible for repch		9,539		12,783		(3,244	)		-25.4	%
Total loans past due over 90 days		19,060		16,504		2,556			15.5	%
Total nonperforming assets plus past
due over 90 days	$	70,379	$	47,546	$	22,833			48.0	%

	Quarter Ended September 30,
ALLOWANCE FOR LOAN LOSSES	2007			2006			$ Change			% Change
Beginning Balance	$	70,948		$	71,846		$	(898	)		-1.2	%
Provision for loan losses		4,999			(81	)		5,080			n/m
Charge-offs		(6,417	)		(4,056	)		(2,361	)		58.2	%
Recoveries		2,838			2,513			325			12.9	%
Net charge-offs		(3,579	)		(1,543	)		(2,036	)		132.0	%
Allowance of acquired bank		-			5,317			(5,317	)		n/m
Ending Balance	$	72,368		$	75,539		$	(3,171	)		-4.2	%

	Quarter Ended September 30,
RATIOS	2007			2006
ROA		1.31	%		1.40	%
ROE		12.80	%		14.65	%
Return on average tangible equity		20.41	%		20.51	%
EOP equity/ EOP assets		10.18	%		9.95	%
Average equity/average assets		10.20	%		9.54	%
Interest margin - Yield - FTE		7.07	%		6.70	%
Interest margin - Cost - FTE		3.16	%		2.86	%
Net interest margin - FTE		3.91	%		3.83	%
Rate on interest-bearing liabilities		3.89	%		3.54	%
Efficiency ratio		57.98	%		58.52	%
Net charge offs/average loans		0.20	%		0.10	%
Provision for loan losses/average loans		0.28	%		-0.01	%
Nonperforming loans/total loans		0.66	%		0.42	%
Nonperforming assets/total loans		0.74	%		0.47	%
Nonperforming assets/total loans+ORE		0.74	%		0.47	%
ALL/nonperforming loans		159.23	%		272.13	%
ALL/total loans		1.05	%		1.15	%
Net loans/total assets		76.82	%		73.15	%

	Quarter Ended September 30,
COMMON STOCK PERFORMANCE	2007			2006
Market value of stock-Close	$	28.04		$	31.43
Market value of stock-High	$	30.15		$	32.78
Market value of stock-Low	$	24.13		$	28.31
Book value of stock	$	15.85		$	15.04
Tangible book value of stock	$	10.25		$	9.46
Tangible equity	$	587,047		$	554,277
Market/Book value of stock		176.91	%		208.98	%

	September 30,
OTHER DATA	2007		2006
EOP Employees - FTE		2,635		2,674

n/m - not meaningful

	Year-to-date September 30,
ALLOWANCE FOR LOAN LOSSES	2007			2006			$ Change			% Change
Beginning Balance	$	72,098		$	76,691		$	(4,593	)		-6.0	%
Provision for loan losses		6,783			(5,029	)		11,812			n/m
Charge-offs		(14,886	)		(9,874	)		(5,012	)		50.8	%
Recoveries		8,373			8,434			(61	)		-0.7	%
Net charge-offs		(6,513	)		(1,440	)		(5,073	)		352.3	%
Allowance of acquired bank		-			5,317			(5,317	)		n/m
Ending Balance	$	72,368		$	75,539		$	(3,171	)		-4.2	%

	Year-to-date September 30,
RATIOS	2007			2006
ROA		1.29	%		1.45	%
ROE		12.62	%		15.62	%
Return on average tangible equity		20.19	%		20.64	%
EOP equity/ EOP assets		10.18	%		9.95	%
Average equity/average assets		10.18	%		9.30	%
Interest margin - Yield - FTE		7.02	%		6.46	%
Interest margin - Cost - FTE		3.11	%		2.58	%
Net interest margin - FTE		3.90	%		3.88	%
Rate on interest-bearing liabilities		3.84	%		3.19	%
Efficiency ratio		59.60	%		58.68	%
Net charge offs/average loans		0.13	%		0.03	%
Provision for loan losses/average loans		0.13	%		-0.11	%
Nonperforming loans/total loans		0.66	%		0.42	%
Nonperforming assets/total loans		0.74	%		0.47	%
Nonperforming assets/total loans+ORE		0.74	%		0.47	%
ALL/nonperforming loans		159.23	%		272.13	%
ALL/total loans		1.05	%		1.15	%
Net loans/total assets		76.82	%		73.15	%

	Year-to-date September 30,
COMMON STOCK PERFORMANCE	2007			2006
Market value of stock-Close	$	28.04		$	31.43
Market value of stock-High	$	33.69		$	32.78
Market value of stock-Low	$	24.13		$	27.01
Book value of stock	$	15.85		$	15.04
Tangible book value of stock	$	10.25		$	9.46
Tangible equity	$	587,047		$	554,277
Market/Book value of stock		176.91	%		208.98	%

n/m - not meaningful

	Quarter Ended
AVERAGE BALANCES	9/30/2007			6/30/2007			$ Change			% Change
Securities AFS-taxable	$	525,858		$	655,815		$	(129,957	)		-19.8	%
Securities AFS-nontaxable		48,818			52,627			(3,809	)		-7.2	%
Securities HTM-taxable		194,356			196,424			(2,068	)		-1.1	%
Securities HTM-nontaxable		84,767			86,491			(1,724	)		-2.0	%
Total securities		853,799			991,357			(137,558	)		-13.9	%
Loans		6,970,434			6,784,126			186,308			2.7	%
Fed funds sold and rev repos		30,201			33,811			(3,610	)		-10.7	%
Total earning assets		7,854,434			7,809,294			45,140			0.6	%
Allowance for loan losses		(70,950	)		(72,400	)		1,450			-2.0	%
Cash and due from banks		260,997			285,424			(24,427	)		-8.6	%
Other assets		792,967			783,339			9,628			1.2	%
Total assets	$	8,837,448		$	8,805,657		$	31,791			0.4	%
Interest-bearing demand deposits	$	1,166,548		$	1,224,450		$	(57,902	)		-4.7	%
Savings deposits		1,671,993			1,770,576			(98,583	)		-5.6	%
Time deposits less than $100,000		1,575,320			1,613,569			(38,249	)		-2.4	%
Time deposits of $100,000 or more		1,037,785			1,007,157			30,628			3.0	%
Total interest-bearing deposits		5,451,646			5,615,752			(164,106	)		-2.9	%
Fed funds purchased and repos		491,488			426,738			64,750			15.2	%
Short-term borrowings		314,264			142,815			171,449			120.0	%
Subordinated notes		49,696			49,688			8			0.0	%
Junior subordinated debt securities		70,104			70,104			-			0.0	%
Total interest-bearing liabilities		6,377,198			6,305,097			72,101			1.1	%
Noninterest-bearing deposits		1,423,745			1,484,611			(60,866	)		-4.1	%
Other liabilities		135,469			120,879			14,590			12.1	%
Shareholders' equity		901,036			895,070			5,966			0.7	%
Total liabilities and equity	$	8,837,448		$	8,805,657		$	31,791			0.4	%

n/m - not meaningful

PERIOD END BALANCES	9/30/2007			6/30/2007			$ Change			% Change
Securities available for sale	$	519,920		$	608,906		$	(88,986	)		-14.6	%
Securities held to maturity		278,385			281,403			(3,018	)		-1.1	%
Total securities		798,305			890,309			(92,004	)		-10.3	%
Loans held for sale		133,693			132,588			1,105			0.8	%
Loans		6,917,541			6,769,632			147,909			2.2	%
Fed funds sold and rev repos		28,625			20,081			8,544			42.5	%
Total earning assets		7,878,164			7,812,610			65,554			0.8	%
Allowance for loan losses		(72,368	)		(70,948	)		(1,420	)		2.0	%
Cash and due from banks		306,107			292,248			13,859			4.7	%
Mortgage servicing rights		73,253			76,955			(3,702	)		-4.8	%
Goodwill		291,177			290,852			325			0.1	%
Identifiable intangible assets		29,313			30,528			(1,215	)		-4.0	%
Other assets		405,341			396,522			8,819			2.2	%
Total assets	$	8,910,987		$	8,828,767		$	82,220			0.9	%
Noninterest-bearing deposits	$	1,435,231		$	1,505,821		$	(70,590	)		-4.7	%
Interest-bearing deposits		5,467,221			5,563,364			(96,143	)		-1.7	%
Total deposits		6,902,452			7,069,185			(166,733	)		-2.4	%
Fed funds purchased and repos		525,142			503,442			21,700			4.3	%
Short-term borrowings		340,598			138,529			202,069			145.9	%
Subordinated notes		49,701			49,693			8			0.0	%
Junior subordinated debt securities		70,104			70,104			-			0.0	%
Other liabilities		115,453			111,654			3,799			3.4	%
Total liabilities		8,003,450			7,942,607			60,843			0.8	%
Common stock		11,933			11,931			2			0.0	%
Surplus		123,227			122,185			1,042			0.9	%
Retained earnings		787,356			770,925			16,431			2.1	%
Accum other comprehensive
loss, net of tax		(14,979	)		(18,881	)		3,902			-20.7	%
Total shareholders' equity		907,537			886,160			21,377			2.4	%
Total liabilities and equity	$	8,910,987		$	8,828,767		$	82,220			0.9	%
Total interest-bearing liabilities	$	6,452,766		$	6,325,132		$	127,634			2.0	%
n/m - not meaningful

	Quarter Ended
INCOME STATEMENTS	9/30/2007		6/30/2007		$ Change			% Change
Interest and fees on loans-FTE	$	129,394	$	124,224	$	5,170			4.2	%
Interest on securities-taxable		7,181		9,018		(1,837	)		-20.4	%
Interest on securities-tax exempt-FTE		2,422		2,536		(114	)		-4.5	%
Interest on fed funds sold and rev repos		397		457		(60	)		-13.1	%
Other interest income		482		541		(59	)		-10.9	%
Total interest income-FTE		139,876		136,776		3,100			2.3	%
Interest on deposits		50,423		51,686		(1,263	)		-2.4	%
Interest on fed funds pch and repos		5,898		5,014		884			17.6	%
Other interest expense		6,186		3,937		2,249			57.1	%
Total interest expense		62,507		60,637		1,870			3.1	%
Net interest income-FTE		77,369		76,139		1,230			1.6	%
Provision for loan losses		4,999		145		4,854			n/m
Net interest income after provision-FTE		72,370		75,994		(3,624	)		-4.8	%
Service charges on deposit accounts		13,849		13,729		120			0.9	%
Insurance commissions		8,983		9,901		(918	)		-9.3	%
Wealth management		6,507		6,400		107			1.7	%
General banking - other		6,111		6,418		(307	)		-4.8	%
Mortgage banking, net		2,503		1,799		704			39.1	%
Other, net		3,593		2,194		1,399			63.8	%
Nonint inc-excl sec gains, net		41,546		40,441		1,105			2.7	%
Security gains, net		23		29		(6	)		-20.7	%
Total noninterest income		41,569		40,470		1,099			2.7	%
Salaries and employee benefits		42,257		42,853		(596	)		-1.4	%
Services and fees		9,285		9,041		244			2.7	%
Net occupancy-premises		4,753		4,634		119			2.6	%
Equipment expense		3,922		4,048		(126	)		-3.1	%
Other expense		8,271		8,257		14			0.2	%
Total noninterest expense		68,488		68,833		(345	)		-0.5	%
Income before income taxes		45,451		47,631		(2,180	)		-4.6	%
Tax equivalent adjustment		2,283		2,307		(24	)		-1.0	%
Income taxes		14,087		15,496		(1,409	)		-9.1	%
Net income	$	29,081	$	29,828	$	(747	)		-2.5	%
Earnings per share
Basic	$	0.51	$	0.52	$	(0.01	)		-1.9	%
Diluted	$	0.51	$	0.51	$	-			0.0	%
Weighted average shares outstanding
Basic		57,267,119		57,807,447					-0.9	%
Diluted		57,526,573		58,025,401					-0.9	%
Period end shares outstanding		57,272,408		57,264,283					0.0	%
Dividends per share	$	0.2200	$	0.2200					0.0	%
n/m - not meaningful

NONPERFORMING ASSETS	9/30/2007		6/30/2007		$ Change			% Change
Nonaccrual loans	$	45,449	$	27,770	$	17,679			63.7	%
Restructured loans		-		-		-
Total nonperforming loans		45,449		27,770		17,679			63.7	%
Other real estate		5,870		3,408		2,462			72.2	%
Total nonperforming assets		51,319		31,178		20,141			64.6	%
Loans past due over 90 days
Included in Loan Portfolio		9,521		6,433		3,088			48.0	%
Serviced GNMA loans eligible for repch		9,539		11,273		(1,734	)		-15.4	%
Total loans past due over 90 days		19,060		17,706		1,354			7.6	%
Total nonperforming assets plus past
due over 90 days	$	70,379	$	48,884	$	21,495			44.0	%

	Quarter Ended
ALLOWANCE FOR LOAN LOSSES	9/30/2007			6/30/2007			$ Change			% Change
Beginning Balance	$	70,948		$	72,049		$	(1,101	)		-1.5	%
Provision for loan losses		4,999			145			4,854			n/m
Charge-offs		(6,417	)		(4,187	)		(2,230	)		53.3	%
Recoveries		2,838			2,941			(103	)		-3.5	%
Net charge-offs		(3,579	)		(1,246	)		(2,333	)		187.2	%
Ending Balance	$	72,368		$	70,948		$	1,420			2.0	%

	Quarter Ended
RATIOS	9/30/2007			6/30/2007
ROA		1.31	%		1.36	%
ROE		12.80	%		13.37	%
Return on average tangible equity		20.41	%		21.38	%
EOP equity/ EOP assets		10.18	%		10.04	%
Average equity/average assets		10.20	%		10.16	%
Interest margin - Yield - FTE		7.07	%		7.03	%
Interest margin - Cost - FTE		3.16	%		3.11	%
Net interest margin - FTE		3.91	%		3.91	%
Rate on interest-bearing liabilities		3.89	%		3.86	%
Efficiency ratio		57.98	%		59.04	%
Net charge offs/average loans		0.20	%		0.07	%
Provision for loan losses/average loans		0.28	%		0.01	%
Nonperforming loans/total loans		0.66	%		0.41	%
Nonperforming assets/total loans		0.74	%		0.46	%
Nonperforming assets/total loans+ORE		0.74	%		0.46	%
ALL/nonperforming loans		159.23	%		255.48	%
ALL/total loans		1.05	%		1.05	%
Net loans/total assets		76.82	%		75.87	%

	Quarter Ended
COMMON STOCK PERFORMANCE	9/30/2007			6/30/2007
Market value of stock-Close	$	28.04		$	25.86
Market value of stock-High	$	30.15		$	28.76
Market value of stock-Low	$	24.13		$	25.04
Book value of stock	$	15.85		$	15.47
Tangible book value of stock	$	10.25		$	9.86
Tangible equity	$	587,047		$	564,780
Market/Book value of stock		176.91	%		167.16	%

OTHER DATA	9/30/2007		6/30/2007
EOP Employees - FTE		2,635		2,694

n/m - not meaningful

  TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIALS September 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
	9/30/2007						6/30/2007						9/30/2006
	Amount			Basic EPS			Amount			Basic EPS			Amount			Basic EPS
Net Income as reported-GAAP	$	29,081		$	0.508		$	29,828		$	0.516		$	29,761		$	0.526
Adjustments (net of taxes):
Less items related to Hurricane Katrina
Provision for loan losses		-			-			-			-			(874	)		(0.015	)
Mortgage related charges		-			-			-			-			(14	)		(0.001	)
		-			-			-			-			(888	)		(0.016	)
Net Income adjusted for specific items (Non-GAAP)	$	29,081		$	0.508		$	29,828		$	0.516		$	28,873		$	0.510
	Year-to-Date
	9/30/2007						9/30/2006
	Amount			Basic EPS			Amount			Basic EPS
Net Income as reported-GAAP	$	84,766		$	1.465		$	89,854		$	1.606
Adjustments (net of taxes):
Less items related to Hurricane Katrina
Provision for loan losses		(396	)		(0.007	)		(3,865	)		(0.069	)
Mortgage related charges		(269	)		(0.005	)		(694	)		(0.012	)
		(665	)		(0.012	)		(4,559	)		(0.081	)
Net Income adjusted for specific items (Non-GAAP)	$	84,101		$	1.453		$	85,295		$	1.525

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.

As a result of its quarterly evaluation of estimated probable losses resulting from Hurricane Katrina, Trustmark reduced its allowance for loan losses during 2007 by $0.6 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 September 30, 2007, the allowance for loan losses included specific Katrina accruals totaling $1.2 million.  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 final.  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 $19.2 million in other assets as well as deposits of $593.3 million and borrowings and other liabilities of $14.2 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 $173.8 million, of which $19.3 million has been allocated to core deposits, $690 thousand to borrower relationships and $153.8 million to goodwill.

Note 3 – Loans and Allowance for Loan Losses

For the periods presented, loans consisted of the following:

	9/30/07		6/30/07		9/30/06
Loans secured by real estate:
Construction, land development and other land loans	$	1,155,737	$	1,059,721	$	903,399
Secured by 1-4 family residential properties		1,756,427		1,827,945		1,865,395
Secured by nonfarm, nonresidential properties		1,269,625		1,268,236		1,310,191
Other		142,505		132,833		127,072
Loans to finance agricultural production and other loans to farmers		30,486		38,999		31,055
Commercial and industrial loans		1,241,772		1,163,346		1,115,452
Consumer loans		1,068,610		1,018,427		926,823
Obligations of states and political subdivisions		210,925		205,431		227,397
Other loans		41,454		54,694		52,116
Loans		6,917,541		6,769,632		6,558,900
Less Allowance for loan losses		72,368		70,948		75,539
Net Loans	$	6,845,173	$	6,698,684	$	6,483,361

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, in compliance with the Interagency Policy Statement on the Allowance for Loan and Lease Losses published by the governmental regulating agencies for financial services companies.   Based on recommendations from regulatory authorities, Trustmark modified its methodology regarding industry concentrations during the third quarter of 2007.  As a result, there was an immaterial reclassification between components within the allowance for loan losses.

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
	9/30/07			6/30/07			9/30/06			9/30/07			9/30/06
Mortgage servicing income, net	$	3,503		$	3,478		$	3,279		$	10,459		$	9,853
Change in fair value-MSR from market changes		(5,268	)		4,392			(3,901	)		(1,323	)		2,113
Change in fair value-MSR from runoff		(2,681	)		(2,494	)		(3,202	)		(7,279	)		(7,654	)
Change in fair value of derivatives		5,298			(5,492	)		3,551			521			(886	)
Gain on sales of loans		1,224			1,496			1,057			4,065			3,711
Other, net		427			419			347			614			344
Mortgage banking, net	$	2,503		$	1,799		$	1,131		$	7,057		$	7,481

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
	9/30/07	6/30/07	9/30/06	9/30/07	9/30/06
Securities – Taxable	3.96%	4.24%	3.94%	4.14%	3.98%
Securities - Nontaxable	7.19%	7.31%	7.30%	7.29%	7.35%
Securities – Total	4.46%	4.67%	4.37%	4.60%	4.39%
Loans	7.36%	7.34%	7.10%	7.34%	6.85%
FF Sold & Rev Repo	5.22%	5.42%	5.45%	5.33%	5.01%
Total Earning Assets	7.07%	7.03%	6.70%	7.02%	6.46%
Interest-bearing Deposits	3.67%	3.69%	3.24%	3.67%	2.87%
FF Pch & Repo	4.76%	4.71%	4.49%	4.64%	4.24%
Borrowings	5.65%	6.01%	5.51%	5.78%	4.96%
Total Interest-bearing Liabilities	3.89%	3.86%	3.54%	3.84%	3.19%
Net interest margin	3.91%	3.91%	3.83%	3.90%	3.88%

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 September 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 $33.2 million at September 30, 2007, $25.3 million at June 30, 2007, $34.0 million at December 31, 2006 and $37.4 million at September 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 September 30, 2007, June 30, 2007 and December 31, 2006, with the September 30, 2006 balance equaling $20.0 million.

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