Trustmark (TRMK) 8-K Trustmark Corporation Announces Third Quarter 2009 Financial Results

   News Release

Trustmark Corporation Announces Third Quarter 2009 Financial Results

and Declares $0.23 Quarterly Cash Dividend

Jackson, Miss. – October 27, 2009 – Trustmark Corporation (NASDAQ:TRMK) announced net income available to common shareholders of $22.4 million in the third quarter of 2009, which represented basic earnings per common share of $0.39.    Trustmark’s third quarter 2009 net income produced a return on average tangible common equity of 13.06%.  During the first nine months of 2009, Trustmark’s net income available to common shareholders totaled $59.2 million, which represented basic earnings per common share of $1.03.  Trustmark’s performance during the first nine months of 2009 resulted in a return on average tangible common equity of 11.89%.  Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per common share.  The dividend is payable December 15, 2009, to shareholders of record on December 1, 2009.

Richard G. Hickson, Chairman and CEO, stated, “Trustmark’s performance in the third quarter reflected the diversified revenue strengths of the organization.  Robust net interest income, coupled with revenue growth in our general banking, mortgage banking, insurance and wealth management businesses, resulted in pre-tax, pre-provision earnings of $53.8 million during the third quarter.  We remain focused upon revenue generation, credit quality, and disciplined expense management.  Trustmark’s solid financial performance is reflected in internally generated growth in tangible common equity of $70.0 million during the last four quarters, resulting in capital ratios that significantly exceed well-capitalized levels.  As such, we remain well-positioned to meet the financial needs of our customers and take advantage of opportunities in the marketplace.”

Credit Quality

·   Continued reduction in Florida construction and land development portfolio

·   Nonperforming loans increased $5.5 million to 2.09% of total loans

Trustmark has made significant progress in the resolution of its construction and land development portfolio in Florida.  Over the last 24 months, this portfolio has been reduced by $171.5 million, or 45%, to $212.0 million.  At September 30, 2009, Florida non-impaired construction and land development loans totaled $177.1 million with an associated reserve for loan losses of $22.2 million, or 12.52%.

During the third quarter, nonperforming loans increased $5.5 million relative to the prior quarter to $138.5 million, or 2.09% of total loans.  Following the natural progression in the resolution of nonperforming loans, foreclosed real estate increased $16.5 million during the quarter.  At September 30, 2009, nonperforming assets totaled $210.2 million, representing 3.14% of total loans and other real estate.

Trustmark’s provision for loan losses totaled $15.8 million during the third quarter, exceeding net charge-offs of $14.5 million.  Allocation of Trustmark’s $103.0 million allowance for loan losses represented 2.08% of commercial loans and 0.76% of consumer and home mortgage loans, resulting in an allowance to total loans of 1.61% as of September 30, 2009.

Capital Strength

·   Tangible common equity to tangible assets increased to 7.76%

·   Total risk-based capital increased to 16.09%

Consistent profitability, sound balance sheet management and a prudent capital philosophy continue to be reflected in Trustmark’s solid capital base.  As of the third quarter of 2009, internally generated tangible common equity increased $70.0 million relative to the comparable period one year earlier to total $703.0 million and represented 7.76% of tangible assets at September 30, 2009.  Total risk-based capital expanded to 16.09% as of September 30, 2009.  Excluding the $215 million in Senior Preferred stock issued under the Capital Purchase Program, Trustmark’s total risk-based capital ratio is an estimated 12.80%, substantially exceeding guidelines to be classified as “well-capitalized” at September 30, 2009.

The fundamental strengths of Trustmark’s business, as reflected by pre-tax, pre-provision earnings, remain solid despite the challenging economic environment.  Based upon the existing capital base and the expectation of the level of profitability going forward, Trustmark believes at this time in the sustainability of its cash dividend to common shareholders.

Asset Liability Management

·   Net interest income totaled $91.3 million

·   Net interest margin expanded to 4.28%

Loans held for investment totaled $6.4 billion at September 30, 2009, down $188.1 million relative to the prior quarter.  This reduction reflects Trustmark’s continued efforts to reduce exposure to construction and land development lending and to its decision to discontinue indirect auto financing.  Current economic conditions have also resulted in reduced loan demand.

Trustmark continued to benefit from its capital strength and strong liquidity as deposit and funding costs were lowered during the third quarter.  Disciplined loan pricing and required minimum loan rates helped sustain loan yields.  As a result, net interest income totaled $91.3 million during the third quarter, resulting in expansion of the net interest margin to 4.28%.

Noninterest Income

·   Mortgage banking income increased to $8.9 million

·   Service charges expanded to $14.2 million

Noninterest income excluding security gains during the third quarter of 2009 totaled $43.1 million, an increase of $6.7 million relative to the prior quarter.  Mortgage banking income during the quarter was $8.9 million, up $6.3 million from the prior quarter, and reflected the Corporation’s successful mortgage servicing rights hedge strategy as well as continued secondary marketing gains.  Service charges on deposit accounts increased $913 thousand relative to the prior quarter to total $14.2 million while insurance revenue totaled $7.9 million, an increase of $522 thousand from the prior quarter.  Despite challenging market conditions, wealth management revenue remained stable at $5.6 million when compared to the prior quarter.

During the third quarter of 2009, Trustmark capitalized upon advantageous market conditions and sold approximately $30 million of longer duration mortgage securities, which resulted in a gain of $1.0 million.

Noninterest Expense

·   Core salary and benefit expense declined

·   Foreclosure expense increased $3.1 million

During the third quarter of 2009, noninterest expense totaled $79.2 million, an increase of $263 thousand from the prior quarter.  Salary and benefit expense totaled $42.6 million during the third quarter.  Excluding the one time benefit resulting from the decision to freeze benefits under the Corporation’s defined benefit pension plan in the second quarter of 2009, salary and benefit expense declined $253 thousand.  Services and fees, net occupancy expense, and equipment expense declined in the third quarter of 2009 relative to the prior quarter.  Other expense in the third quarter totaled $17.5 million, a decrease of $1.2 million from the prior quarter as lower FDIC expense of $4.3 million was partially offset by increased real estate foreclosure expense of $3.1 million.

ADDITIONAL INFORMATION

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, October 28 at 10:00 a.m. Central Time to discuss the Corporation's financial results. Interested parties may listen to the conference call by dialing (877) 627-6580, passcode 4074008 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, November 4, 2009 in archived format at the same web address or by calling (888) 203-1112, passcode 4074008.

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 constitute forward-looking statements within the meaning ofthe Private Securities Litigation Reform Act of 1995.  You can identify forward-looking statements by words such as “may,” “hope,” “will,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “continue,” “could,” “future” or the negative of those terms or other words of similar meaning. You should read statements that contain these words carefully because they discuss our future expectations or state other “forward-looking” information. 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. You should be aware that the occurrence of the events described under the caption “Risk Factors” in Trustmark’s filings with the Securities and Exchange Commission could have an adverse effect on our business, results of operations and financial condition.  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.

Risks that could cause actual results to differ materially from current expectations of Management include, but are not limited to, changes in the level of nonperforming assets and charge-offs, local, state and national economic and market conditions, including the extent and duration of the current volatility in the credit and financial markets, changes in our ability to measure the fair value of assets in our portfolio, material changes in the level and/or volatility of market interest rates, the performance and demand for the products and services we offer, including the level and timing of withdrawals from our deposit accounts, the costs and effects of litigation and of unexpected or adverse outcomes in such litigation, our ability to attract noninterest-bearing deposits and other low-cost funds, competition in loan and deposit pricing, as well as the entry of new competitors into our markets through de novo expansion and acquisitions, economic conditions and monetary and other governmental actions designed to address the level and volatility of interest rates and the volatility of securities, currency and other markets, the enactment of legislation and changes in existing regulations, or enforcement practices, or the adoption of new regulations, changes in accounting standards and practices, including changes in the interpretation of existing standards, that effect our consolidated financial statements, changes in consumer spending, borrowings and savings habits, technological changes, changes in the financial performance or condition of Trustmark’s borrowers, changes in Trustmark’s 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, natural disasters, acts of war or terrorism 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	F. Joseph Rein, Jr.
	Treasurer and	Senior Vice President
	Principal Financial Officer	601-208-6898
	601-208-2310
Media:	Melanie A. Morgan
	Senior Vice President
	601-208-2979

  TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION September 30, 2009 ($ in thousands) (unaudited)

										Linked Quarter						Year over Year
QUARTERLY AVERAGE BALANCES	9/30/2009			6/30/2009			9/30/2008			$ Change			% Change			$ Change			% Change
Securities AFS-taxable	$	1,377,318		$	1,395,303		$	822,995		$	(17,985	)		-1.3	%	$	554,323			67.4	%
Securities AFS-nontaxable		89,259			70,165			39,886			19,094			27.2	%		49,373			n/m
Securities HTM-taxable		191,934			194,079			184,001			(2,145	)		-1.1	%		7,933			4.3	%
Securities HTM-nontaxable		55,440			61,166			74,937			(5,726	)		-9.4	%		(19,497	)		-26.0	%
Total securities		1,713,951			1,720,713			1,121,819			(6,762	)		-0.4	%		592,132			52.8	%
Loans (including loans held for sale)		6,693,482			6,880,909			6,927,270			(187,427	)		-2.7	%		(233,788	)		-3.4	%
Fed funds sold and rev repos		12,821			20,973			17,401			(8,152	)		-38.9	%		(4,580	)		-26.3	%
Other earning assets		43,894			47,084			37,323			(3,190	)		-6.8	%		6,571			17.6	%
Total earning assets		8,464,148			8,669,679			8,103,813			(205,531	)		-2.4	%		360,335			4.4	%
Allowance for loan losses		(102,545	)		(106,491	)		(88,643	)		3,946			-3.7	%		(13,902	)		15.7	%
Cash and due from banks		205,361			214,633			246,515			(9,272	)		-4.3	%		(41,154	)		-16.7	%
Other assets		871,477			824,724			810,449			46,753			5.7	%		61,028			7.5	%
Total assets	$	9,438,441		$	9,602,545		$	9,072,134		$	(164,104	)		-1.7	%	$	366,307			4.0	%
Interest-bearing demand deposits	$	1,148,537		$	1,131,765		$	1,222,087		$	16,772			1.5	%	$	(73,550	)		-6.0	%
Savings deposits		1,797,421			1,869,794			1,774,188			(72,373	)		-3.9	%		23,233			1.3	%
Time deposits less than $100,000		1,434,097			1,493,172			1,532,630			(59,075	)		-4.0	%		(98,533	)		-6.4	%
Time deposits of $100,000 or more		1,095,431			1,096,170			1,108,677			(739	)		-0.1	%		(13,246	)		-1.2	%
Total interest-bearing deposits		5,475,486			5,590,901			5,637,582			(115,415	)		-2.1	%		(162,096	)		-2.9	%
Fed funds purchased and repos		644,012			589,542			659,312			54,470			9.2	%		(15,300	)		-2.3	%
Short-term borrowings		263,891			340,816			156,880			(76,925	)		-22.6	%		107,011			68.2	%
Long-term FHLB advances		75,000			75,000			-			-			0.0	%		75,000			n/m
Subordinated notes		49,760			49,752			49,728			8			0.0	%		32			0.1	%
Junior subordinated debt securities		70,104			70,104			70,104			-			0.0	%		-			0.0	%
Total interest-bearing liabilities		6,578,253			6,716,115			6,573,606			(137,862	)		-2.1	%		4,647			0.1	%
Noninterest-bearing deposits		1,529,381			1,554,642			1,415,402			(25,261	)		-1.6	%		113,979			8.1	%
Other liabilities		113,820			124,586			136,229			(10,766	)		-8.6	%		(22,409	)		-16.4	%
Total liabilities		8,221,454			8,395,343			8,125,237			(173,889	)		-2.1	%		96,217			1.2	%
Preferred equity		206,308			205,860			-			448			0.2	%		206,308			n/m
Common equity		1,010,679			1,001,342			946,897			9,337			0.9	%		63,782			6.7	%
Total shareholders' equity		1,216,987			1,207,202			946,897			9,785			0.8	%		270,090			28.5	%
Total liabilities and equity	$	9,438,441		$	9,602,545		$	9,072,134		$	(164,104	)		-1.7	%	$	366,307			4.0	%
										Linked Quarter						Year over Year
PERIOD END BALANCES	9/30/2009			6/30/2009			9/30/2008			$ Change			% Change			$ Change			% Change
Cash and due from banks	$	191,449		$	220,706		$	235,016		$	(29,257	)		-13.3	%	$	(43,567	)		-18.5	%
Fed funds sold and rev repos		8,551			16,367			14,782			(7,816	)		-47.8	%		(6,231	)		-42.2	%
Securities available for sale		1,528,625			1,488,428			907,629			40,197			2.7	%		620,996			68.4	%
Securities held to maturity		242,603			254,380			256,323			(11,777	)		-4.6	%		(13,720	)		-5.4	%
Loans held for sale		237,152			280,975			154,162			(43,823	)		-15.6	%		82,990			53.8	%
Loans		6,382,440			6,570,582			6,740,730			(188,142	)		-2.9	%		(358,290	)		-5.3	%
Allowance for loan losses		(103,016	)		(101,751	)		(90,888	)		(1,265	)		1.2	%		(12,128	)		13.3	%
Net Loans		6,279,424			6,468,831			6,649,842			(189,407	)		-2.9	%		(370,418	)		-5.6	%
Premises and equipment, net		151,828			156,541			156,298			(4,713	)		-3.0	%		(4,470	)		-2.9	%
Mortgage servicing rights		56,042			63,316			78,550			(7,274	)		-11.5	%		(22,508	)		-28.7	%
Goodwill		291,104			291,104			291,145			-			0.0	%		(41	)		0.0	%
Identifiable intangible assets		20,819			21,820			24,887			(1,001	)		-4.6	%		(4,068	)		-16.3	%
Other assets		360,901			364,402			317,639			(3,501	)		-1.0	%		43,262			13.6	%
Total assets	$	9,368,498		$	9,626,870		$	9,086,273		$	(258,372	)		-2.7	%	$	282,225			3.1	%
Deposits:
Noninterest-bearing	$	1,493,424		$	1,558,934		$	1,526,374		$	(65,510	)		-4.2	%	$	(32,950	)		-2.2	%
Interest-bearing		5,377,011			5,588,955			5,411,304			(211,944	)		-3.8	%		(34,293	)		-0.6	%
Total deposits		6,870,435			7,147,889			6,937,678			(277,454	)		-3.9	%		(67,243	)		-1.0	%
Fed funds purchased and repos		645,057			627,616			592,818			17,441			2.8	%		52,239			8.8	%
Short-term borrowings		315,105			314,751			369,037			354			0.1	%		(53,932	)		-14.6	%
Long-term FHLB advances		75,000			75,000			-			-			n/m			75,000			n/m
Subordinated notes		49,766			49,758			49,733			8			0.0	%		33			0.1	%
Junior subordinated debt securities		70,104			70,104			70,104			-			0.0	%		-			0.0	%
Other liabilities		121,670			139,638			117,905			(17,968	)		-12.9	%		3,765			3.2	%
Total liabilities		8,147,137			8,424,756			8,137,275			(277,619	)		-3.3	%		9,862			0.1	%
Preferred stock		206,461			206,009			-			452			0.2	%		206,461			n/m
Common stock		11,968			11,964			11,944			4			0.0	%		24			0.2	%
Capital surplus		145,352			143,654			128,617			1,698			1.2	%		16,735			13.0	%
Retained earnings		854,508			845,882			824,768			8,626			1.0	%		29,740			3.6	%
Accum other comprehensive
income (loss), net of tax		3,072			(5,395	)		(16,331	)		8,467			n/m			19,403			n/m
Total shareholders' equity		1,221,361			1,202,114			948,998			19,247			1.6	%		272,363			28.7	%
Total liabilities and equity	$	9,368,498		$	9,626,870		$	9,086,273		$	(258,372	)		-2.7	%	$	282,225			3.1	%
n/m - percentage changes greater than +/- 100% are considered not meaningful

See Notes to Consolidated Financials

 

  TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION September 30, 2009 ($ in thousands) (unaudited)

	Quarter Ended									Linked Quarter						Year over Year
INCOME STATEMENTS	9/30/2009			6/30/2009			9/30/2008			$ Change			% Change			$ Change			% Change
Interest and fees on loans-FTE	$	89,672		$	91,652		$	105,706		$	(1,980	)		-2.2	%	$	(16,034	)		-15.2	%
Interest on securities-taxable		19,524			20,444			12,117			(920	)		-4.5	%		7,407			61.1	%
Interest on securities-tax exempt-FTE		2,172			2,040			1,946			132			6.5	%		226			11.6	%
Interest on fed funds sold and rev repos		16			19			98			(3	)		-15.8	%		(82	)		-83.7	%
Other interest income		381			343			407			38			11.1	%		(26	)		-6.4	%
Total interest income-FTE		111,765			114,498			120,274			(2,733	)		-2.4	%		(8,509	)		-7.1	%
Interest on deposits		18,403			21,430			32,860			(3,027	)		-14.1	%		(14,457	)		-44.0	%
Interest on fed funds pch and repos		282			272			3,123			10			3.7	%		(2,841	)		-91.0	%
Other interest expense		1,786			1,980			2,653			(194	)		-9.8	%		(867	)		-32.7	%
Total interest expense		20,471			23,682			38,636			(3,211	)		-13.6	%		(18,165	)		-47.0	%
Net interest income-FTE		91,294			90,816			81,638			478			0.5	%		9,656			11.8	%
Provision for loan losses		15,770			26,767			14,473			(10,997	)		-41.1	%		1,297			9.0	%
Net interest income after provision-FTE		75,524			64,049			67,165			11,475			17.9	%		8,359			12.4	%
Service charges on deposit accounts		14,157			13,244			13,886			913			6.9	%		271			2.0	%
Insurance commissions		7,894			7,372			9,007			522			7.1	%		(1,113	)		-12.4	%
Wealth management		5,589			5,497			6,788			92			1.7	%		(1,199	)		-17.7	%
General banking - other		5,620			6,063			5,813			(443	)		-7.3	%		(193	)		-3.3	%
Mortgage banking, net		8,871			2,543			4,323			6,328			n/m			4,548			n/m
Other, net		994			1,693			2,131			(699	)		-41.3	%		(1,137	)		-53.4	%
Nonint inc-excl sec gains, net		43,125			36,412			41,948			6,713			18.4	%		1,177			2.8	%
Security gains, net		1,014			4,404			2			(3,390	)		-77.0	%		1,012			n/m
Total noninterest income		44,139			40,816			41,950			3,323			8.1	%		2,189			5.2	%
Salaries and employee benefits		42,629			40,989			42,859			1,640			4.0	%		(230	)		-0.5	%
Services and fees		10,124			10,249			9,785			(125	)		-1.2	%		339			3.5	%
Net occupancy-premises		4,862			4,948			5,153			(86	)		-1.7	%		(291	)		-5.6	%
Equipment expense		4,104			4,108			4,231			(4	)		-0.1	%		(127	)		-3.0	%
Other expense		17,515			18,677			10,706			(1,162	)		-6.2	%		6,809			63.6	%
Total noninterest expense		79,234			78,971			72,734			263			0.3	%		6,500			8.9	%
Income before income taxes and tax eq adj		40,429			25,894			36,381			14,535			56.1	%		4,048			11.1	%
Tax equivalent adjustment		2,417			2,325			2,242			92			4.0	%		175			7.8	%
Income before income taxes		38,012			23,569			34,139			14,443			61.3	%		3,873			11.3	%
Income taxes		12,502			6,994			10,785			5,508			78.8	%		1,717			15.9	%
Net income		25,510			16,575			23,354			8,935			53.9	%		2,156			9.2	%
Preferred stock dividends		2,688			2,687			-			1			0.0	%		2,688			n/m
Accretion of preferred stock discount		452			445			-			7			1.6	%		452			n/m
Net income available to common shareholders	$	22,370		$	13,443		$	23,354		$	8,927			66.4	%	$	(984	)		-4.2	%
Per common share data
Earnings per share - basic	$	0.39		$	0.23		$	0.41		$	0.16			69.6	%	$	(0.02	)		-4.9	%
Earnings per share - diluted	$	0.39		$	0.23		$	0.41		$	0.16			69.6	%	$	(0.02	)		-4.9	%
Dividends per share	$	0.23		$	0.23		$	0.23		$	-			0.0	%	$	-			0.0	%
Weighted average common shares outstanding
Basic		57,431,128			57,406,499			57,298,710
Diluted		57,559,492			57,546,928			57,337,342
Period end common shares outstanding		57,440,047			57,423,841			57,324,627
OTHER FINANCIAL DATA
Return on common equity		8.78	%		5.38	%		9.81	%
Return on average tangible common equity		13.06	%		8.20	%		15.16	%
Return on equity		8.32	%		5.51	%		9.81	%
Return on assets		1.07	%		0.69	%		1.02	%
Interest margin - Yield - FTE		5.24	%		5.30	%		5.90	%
Interest margin - Cost		0.96	%		1.10	%		1.90	%
Net interest margin - FTE		4.28	%		4.20	%		4.01	%
Efficiency ratio		58.95	%		58.57	%		58.85	%
Full-time equivalent employees		2,550			2,562			2,623
COMMON STOCK PERFORMANCE
Market value-Close	$	19.05		$	19.32		$	20.74
Common book value	$	17.67		$	17.35		$	16.55
Tangible common book value	$	12.24		$	11.90		$	11.04
n/m - percentage changes greater than +/- 100% are considered not meaningful

See Notes to Consolidated Financials

  TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION September 30, 2009 ($ in thousands) (unaudited)

	Quarter Ended									Linked Quarter						Year over Year
NONPERFORMING ASSETS	9/30/2009			6/30/2009			9/30/2008			$ Change			% Change			$ Change			% Change
Nonaccrual loans
Florida	$	72,063		$	72,185		$	71,125		$	(122	)		-0.2	%	$	938			1.3	%
Mississippi (1)		28,470			32,040			12,727			(3,570	)		-11.1	%		15,743			n/m
Tennessee (2)		11,481			2,941			4,012			8,540			n/m			7,469			n/m
Texas		26,490			25,824			17,418			666			2.6	%		9,072			52.1	%
Total nonaccrual loans		138,504			132,990			105,282			5,514			4.1	%		33,222			31.6	%
Other real estate
Florida		34,030			26,387			18,265			7,643			29.0	%		15,765			86.3	%
Mississippi (1)		22,932			15,542			6,062			7,390			47.5	%		16,870			n/m
Tennessee (2)		9,809			10,234			7,924			(425	)		-4.2	%		1,885			23.8	%
Texas		4,918			3,033			214			1,885			62.1	%		4,704			n/m
Total other real estate		71,689			55,196			32,465			16,493			29.9	%		39,224			n/m
Total nonperforming assets	$	210,193		$	188,186		$	137,747		$	22,007			11.7	%	$	72,446			52.6	%
LOANS PAST DUE OVER 90 DAYS
Loans held for investment	$	6,854		$	6,873		$	3,622		$	(19	)		-0.3	%	$	3,232			89.2	%
Loans HFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)	$	36,686		$	28,523		$	20,332		$	8,163			28.6	%	$	16,354			80.4	%
	Quarter Ended									Linked Quarter						Year over Year
ALLOWANCE FOR LOAN LOSSES	9/30/2009			6/30/2009			9/30/2008			$ Change			% Change			$ Change			% Change
Beginning Balance	$	101,751		$	100,358		$	86,576		$	1,393			1.4	%	$	15,175			17.5	%
Provision for loan losses		15,770			26,767			14,473			(10,997	)		-41.1	%		1,297			9.0	%
Charge-offs		(18,687	)		(27,870	)		(12,732	)		9,183			-32.9	%		(5,955	)		46.8	%
Recoveries		4,182			2,496			2,571			1,686			67.5	%		1,611			62.7	%
Net charge-offs		(14,505	)		(25,374	)		(10,161	)		10,869			-42.8	%		(4,344	)		42.8	%
Ending Balance	$	103,016		$	101,751		$	90,888		$	1,265			1.2	%	$	12,128			13.3	%
PROVISION FOR LOAN LOSSES
Florida	$	(3,295	)	$	28,915		$	3,167		$	(32,210	)		n/m		$	(6,462	)		n/m
Mississippi (1)		12,009			(1,044	)		8,476			13,053			n/m			3,533			41.7	%
Tennessee (2)		159			(659	)		27			818			n/m			132			n/m
Texas		6,897			(445	)		2,803			7,342			n/m			4,094			n/m
Total provision for loan losses	$	15,770		$	26,767		$	14,473		$	(10,997	)		-41.1	%	$	1,297			9.0	%
NET CHARGE-OFFS
Florida	$	131		$	21,167		$	3,779		$	(21,036	)		-99.4	%	$	(3,648	)		-96.5	%
Mississippi (1)		9,629			3,267			4,515			6,362			n/m			5,114			n/m
Tennessee (2)		872			897			1,291			(25	)		-2.8	%		(419	)		-32.5	%
Texas		3,873			43			576			3,830			n/m			3,297			n/m
Total net charge-offs	$	14,505		$	25,374		$	10,161		$	(10,869	)		-42.8	%	$	4,344			42.8	%
CREDIT QUALITY RATIOS
Net charge offs/average loans		0.86	%		1.48	%		0.58	%
Provision for loan losses/average loans		0.93	%		1.56	%		0.83	%
Nonperforming loans/total loans (incl LHFS)		2.09	%		1.94	%		1.53	%
Nonperforming assets/total loans (incl LHFS)		3.18	%		2.75	%		2.00	%
Nonperforming assets/total loans (incl LHFS) +ORE		3.14	%		2.72	%		1.99	%
ALL/total loans (excl LHFS)		1.61	%		1.55	%		1.35	%
ALL-commercial/total commercial loans		2.08	%		2.01	%		1.76	%
ALL-consumer/total consumer and home mortgage loans		0.76	%		0.73	%		0.64	%
ALL/nonperforming loans		74.38	%		76.51	%		86.33	%
ALL/nonperforming loans (excl impaired loans)		117.93	%		123.15	%		145.21	%
CAPITAL RATIOS
Total equity/total assets		13.04	%		12.49	%		10.44	%
Common equity/total assets		10.83	%		10.35	%		10.44	%
Tangible equity/tangible assets		10.04	%		9.55	%		7.22	%
Tangible common equity/tangible assets		7.76	%		7.34	%		7.22	%
Tangible common equity/risk-weighted assets		10.15	%		9.56	%		8.80	%
Tier 1 leverage ratio		10.70	%		10.38	%		8.11	%
Tier 1 common risk-based capital ratio		10.15	%		9.66	%		8.91	%
Tier 1 risk-based capital ratio		14.11	%		13.50	%		9.86	%
Total risk-based capital ratio		16.09	%		15.45	%		11.80	%
(1) - Mississippi includes Central and Southern Mississippi Regions
(2) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions
n/m - percentage changes greater than +/- 100% are considered not meaningful

See Notes to Consolidated Financials

  TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION September 30, 2009 ($ in thousands) (unaudited)

	Quarter Ended															Nine Months Ended
QUARTERLY AVERAGE BALANCES	9/30/2009			6/30/2009			3/31/2009			12/31/2008			9/30/2008			9/30/2009				9/30/2008
Securities AFS-taxable	$	1,377,318		$	1,395,303		$	1,505,328		$	1,226,843		$	822,995		$	1,425,514			$	649,258
Securities AFS-nontaxable		89,259			70,165			43,429			40,708			39,886			67,786				37,341
Securities HTM-taxable		191,934			194,079			178,417			169,958			184,001			188,193				186,542
Securities HTM-nontaxable		55,440			61,166			67,308			71,843			74,937			61,261				77,802
Total securities		1,713,951			1,720,713			1,794,482			1,509,352			1,121,819			1,742,754				950,943
Loans (including loans held for sale)		6,693,482			6,880,909			6,981,921			6,908,296			6,927,270			6,851,047				7,061,176
Fed funds sold and rev repos		12,821			20,973			15,988			22,871			17,401			16,582				23,607
Other earning assets		43,894			47,084			40,485			49,197			37,323			43,833				38,583
Total earning assets		8,464,148			8,669,679			8,832,876			8,489,716			8,103,813			8,654,216				8,074,309
Allowance for loan losses		(102,545	)		(106,491	)		(97,986	)		(91,802	)		(88,643	)		(102,357	)			(84,217	)
Cash and due from banks		205,361			214,633			239,508			223,774			246,515			219,709				253,127
Other assets		871,477			824,724			803,416			801,890			810,449			833,456				789,792
Total assets	$	9,438,441		$	9,602,545		$	9,777,814		$	9,423,578		$	9,072,134		$	9,605,024			$	9,033,011
Interest-bearing demand deposits	$	1,148,537		$	1,131,765		$	1,118,347		$	1,149,071		$	1,222,087		$	1,132,994			$	1,238,029
Savings deposits		1,797,421			1,869,794			1,815,672			1,709,670			1,774,188			1,827,562				1,798,801
Time deposits less than $100,000		1,434,097			1,493,172			1,485,680			1,478,753			1,532,630			1,470,794				1,559,629
Time deposits of $100,000 or more		1,095,431			1,096,170			1,074,873			1,045,377			1,108,677			1,088,900				1,063,805
Total interest-bearing deposits		5,475,486			5,590,901			5,494,572			5,382,871			5,637,582			5,520,250				5,660,264
Fed funds purchased and repos		644,012			589,542			674,175			809,822			659,312			635,799				565,304
Short-term borrowings		263,891			340,816			647,604			494,928			156,880			416,031				203,792
Long-term FHLB advances		75,000			75,000			58,333			-			-			69,505				-
Subordinated notes		49,760			49,752			49,744			49,736			49,728			49,752				49,720
Junior subordinated debt securities		70,104			70,104			70,104			70,104			70,104			70,104		��		70,104
Total interest-bearing liabilities		6,578,253			6,716,115			6,994,532			6,807,461			6,573,606			6,761,441				6,549,184
Noninterest-bearing deposits		1,529,381			1,554,642			1,470,822			1,433,361			1,415,402			1,518,496				1,405,244
Other liabilities		113,820			124,586			120,062			126,704			136,229			119,468				137,395
Total liabilities		8,221,454			8,395,343			8,585,416			8,367,526			8,125,237			8,399,405				8,091,823
Preferred equity		206,308			205,860			205,417			91,385			-			205,865				-
Common equity		1,010,679			1,001,342			986,981			964,667			946,897			999,754				941,188
Total shareholders' equity		1,216,987			1,207,202			1,192,398			1,056,052			946,897			1,205,619				941,188
Total liabilities and equity	$	9,438,441		$	9,602,545		$	9,777,814		$	9,423,578		$	9,072,134		$	9,605,024			$	9,033,011
PERIOD END BALANCES	9/30/2009			6/30/2009			3/31/2009			12/31/2008			9/30/2008
Cash and due from banks	$	191,449		$	220,706		$	231,211		$	257,930		$	235,016
Fed funds sold and rev repos		8,551			16,367			8,014			23,401			14,782
Securities available for sale		1,528,625			1,488,428			1,613,047			1,542,841			907,629
Securities held to maturity		242,603			254,380			256,677			259,629			256,323
Loans held for sale		237,152			280,975			301,691			238,265			154,162
Loans		6,382,440			6,570,582			6,640,597			6,722,403			6,740,730
Allowance for loan losses		(103,016	)		(101,751	)		(100,358	)		(94,922	)		(90,888	)
Net Loans		6,279,424			6,468,831			6,540,239			6,627,481			6,649,842
Premises and equipment, net		151,828			156,541			157,068			156,811			156,298
Mortgage servicing rights		56,042			63,316			45,256			42,882			78,550
Goodwill		291,104			291,104			291,104			291,104			291,145
Identifiable intangible assets		20,819			21,820			22,820			23,821			24,887
Other assets		360,901			364,402			308,587			326,744			317,639
Total assets	$	9,368,498		$	9,626,870		$	9,775,714		$	9,790,909		$	9,086,273
Deposits:
Noninterest-bearing	$	1,493,424		$	1,558,934		$	1,504,032		$	1,496,166		$	1,526,374
Interest-bearing		5,377,011			5,588,955			5,652,908			5,327,704			5,411,304
Total deposits		6,870,435			7,147,889			7,156,940			6,823,870			6,937,678
Fed funds purchased and repos		645,057			627,616			607,083			811,129			592,818
Short-term borrowings		315,105			314,751			448,380			730,958			369,037
Long-term FHLB advances		75,000			75,000			75,000			-			-
Subordinated notes		49,766			49,758			49,750			49,741			49,733
Junior subordinated debt securities		70,104			70,104			70,104			70,104			70,104
Other liabilities		121,670			139,638			168,089			126,641			117,905
Total liabilities		8,147,137			8,424,756			8,575,346			8,612,443			8,137,275
Preferred stock		206,461			206,009			205,564			205,126			-
Common stock		11,968			11,964			11,955			11,944			11,944
Capital surplus		145,352			143,654			142,167			139,471			128,617
Retained earnings		854,508			845,882			845,779			836,642			824,768
Accum other comprehensive
income (loss), net of tax		3,072			(5,395	)		(5,097	)		(14,717	)		(16,331	)
Total shareholders' equity		1,221,361			1,202,114			1,200,368			1,178,466			948,998
Total liabilities and equity	$	9,368,498		$	9,626,870		$	9,775,714		$	9,790,909		$	9,086,273

See Notes to Consolidated Financials

  TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION September 30, 2009 ($ in thousands) (unaudited)

	Quarter Ended															Nine Months Ended
INCOME STATEMENTS	9/30/2009			6/30/2009			3/31/2009			12/31/2008			9/30/2008			9/30/2009			9/30/2008
Interest and fees on loans-FTE	$	89,672		$	91,652		$	92,382		$	101,694		$	105,706		$	273,706		$	334,370
Interest on securities-taxable		19,524			20,444			21,654			17,108			12,117			61,622			29,053
Interest on securities-tax exempt-FTE		2,172			2,040			1,834			1,891			1,946			6,046			5,975
Interest on fed funds sold and rev repos		16			19			19			57			98			54			445
Other interest income		381			343			313			368			407			1,037			1,454
Total interest income-FTE		111,765			114,498			116,202			121,118			120,274			342,465			371,297
Interest on deposits		18,403			21,430			22,540			26,818			32,860			62,373			113,104
Interest on fed funds pch and repos		282			272			364			1,178			3,123			918			9,215
Other interest expense		1,786			1,980			2,352			3,399			2,653			6,118			10,405
Total interest expense		20,471			23,682			25,256			31,395			38,636			69,409			132,724
Net interest income-FTE		91,294			90,816			90,946			89,723			81,638			273,056			238,573
Provision for loan losses		15,770			26,767			16,866			16,684			14,473			59,403			59,728
Net interest income after provision-FTE		75,524			64,049			74,080			73,039			67,165			213,653			178,845
Service charges on deposit accounts		14,157			13,244			12,568			14,044			13,886			39,969			39,673
Insurance commissions		7,894			7,372			7,422			6,783			9,007			22,688			25,657
Wealth management		5,589			5,497			5,555			6,583			6,788			16,641			21,017
General banking - other		5,620			6,063			5,407			5,576			5,813			17,090			17,654
Mortgage banking, net		8,871			2,543			10,907			4,393			4,323			22,321			22,087
Other, net		994			1,693			1,115			935			2,131			3,802			12,351
Nonint inc-excl sec gains, net		43,125			36,412			42,974			38,314			41,948			122,511			138,439
Security gains, net		1,014			4,404			30			12			2			5,448			493
Total noninterest income		44,139			40,816			43,004			38,326			41,950			127,959			138,932
Salaries and employee benefits		42,629			40,989			43,425			41,923			42,859			127,043			129,214
Services and fees		10,124			10,249			10,000			9,638			9,785			30,373			28,741
Net occupancy-premises		4,862			4,948			5,178			4,704			5,153			14,988			14,804
Equipment expense		4,104			4,108			4,166			4,183			4,231			12,378			12,449
Other expense		17,515			18,677			11,638			11,097			10,706			47,830			26,966
Total noninterest expense		79,234			78,971			74,407			71,545			72,734			232,612			212,174
Income before income taxes and tax eq adj		40,429			25,894			42,677			39,820			36,381			109,000			105,603
Tax equivalent adjustment		2,417			2,325			2,397			2,326			2,242			7,139			6,810
Income before income taxes		38,012			23,569			40,280			37,494			34,139			101,861			98,793
Income taxes		12,502			6,994			13,795			12,162			10,785			33,291			31,708
Net income		25,510			16,575			26,485			25,332			23,354			68,570			67,085
Preferred stock dividends		2,688			2,687			2,688			1,165			-			8,063			-
Accretion of preferred stock discount		452			445			438			188			-			1,335			-
Net income available to common shareholders	$	22,370		$	13,443		$	23,359		$	23,979		$	23,354		$	59,172		$	67,085
Per common share data
Earnings per share - basic	$	0.39		$	0.23		$	0.41		$	0.42		$	0.41		$	1.03		$	1.17
Earnings per share - diluted	$	0.39		$	0.23		$	0.41		$	0.42		$	0.41		$	1.03		$	1.17
Dividends per share	$	0.23		$	0.23		$	0.23		$	0.23		$	0.23		$	0.69		$	0.69
Weighted average common shares outstanding
Basic		57,431,128			57,406,499			57,350,874			57,324,710			57,298,710			57,396,461			57,292,821
Diluted		57,559,492			57,546,928			57,398,375			57,375,590			57,337,342			57,496,230			57,326,007
Period end common shares outstanding		57,440,047			57,423,841			57,378,318			57,324,737			57,324,627			57,440,047			57,324,627
OTHER FINANCIAL DATA
Return on common equity		8.78	%		5.38	%		9.60	%		9.89	%		9.81	%		7.91	%		9.52	%
Return on average tangible common equity		13.06	%		8.20	%		14.46	%		15.10	%		15.16	%		11.89	%		14.80	%
Return on equity		8.32	%		5.51	%		9.01	%		9.54	%		9.81	%		7.60	%		9.52	%
Return on assets		1.07	%		0.69	%		1.10	%		1.07	%		1.02	%		0.95	%		0.99	%
Interest margin - Yield - FTE		5.24	%		5.30	%		5.34	%		5.68	%		5.90	%		5.29	%		6.14	%
Interest margin - Cost		0.96	%		1.10	%		1.16	%		1.47	%		1.90	%		1.07	%		2.20	%
Net interest margin - FTE		4.28	%		4.20	%		4.18	%		4.20	%		4.01	%		4.22	%		3.95	%
Efficiency ratio		58.95	%		58.57	%		55.56	%		55.86	%		58.85	%		57.70	%		57.38	%
Full-time equivalent employees		2,550			2,562			2,589			2,607			2,623
COMMON STOCK PERFORMANCE
Market value-Close	$	19.05		$	19.32		$	18.38		$	21.59		$	20.74
Common book value	$	17.67		$	17.35		$	17.34		$	16.98		$	16.55
Tangible common book value	$	12.24		$	11.90		$	11.87		$	11.49		$	11.04

See Notes to Consolidated Financials

  TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION September 30, 2009 ($ in thousands) (unaudited)

	Quarter Ended
NONPERFORMING ASSETS	9/30/2009			6/30/2009			3/31/2009			12/31/2008			9/30/2008
Nonaccrual loans
Florida	$	72,063		$	72,185		$	83,789		$	75,092		$	71,125
Mississippi (1)		28,470			32,040			21,829			18,703			12,727
Tennessee (2)		11,481			2,941			5,763			3,638			4,012
Texas		26,490			25,824			23,122			16,605			17,418
Total nonaccrual loans		138,504			132,990			134,503			114,038			105,282
Other real estate
Florida		34,030			26,387			19,830			21,265			18,265
Mississippi (1)		22,932			15,542			9,932			6,113			6,062
Tennessee (2)		9,809			10,234			9,051			8,862			7,924
Texas		4,918			3,033			3,322			2,326			214
Total other real estate		71,689			55,196			42,135			38,566			32,465
Total nonperforming assets	$	210,193		$	188,186		$	176,638		$	152,604		$	137,747
LOANS PAST DUE OVER 90 DAYS
Loans held for investment	$	6,854		$	6,873		$	10,004		$	5,139		$	3,622
Loans HFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)	$	36,686		$	28,523		$	21,128		$	18,095		$	20,332
	Quarter Ended															Nine Months Ended
ALLOWANCE FOR LOAN LOSSES	9/30/2009			6/30/2009			3/31/2009			12/31/2008			9/30/2008			9/30/2009			9/30/2008
Beginning Balance	$	101,751		$	100,358		$	94,922		$	90,888		$	86,576		$	94,922		$	79,851
Provision for loan losses		15,770			26,767			16,866			16,684			14,473			59,403			59,728
Charge-offs		(18,687	)		(27,870	)		(14,015	)		(15,039	)		(12,732	)		(60,572	)		(56,728	)
Recoveries		4,182			2,496			2,585			2,389			2,571			9,263			8,037
Net charge-offs		(14,505	)		(25,374	)		(11,430	)		(12,650	)		(10,161	)		(51,309	)		(48,691	)
Ending Balance	$	103,016		$	101,751		$	100,358		$	94,922		$	90,888		$	103,016		$	90,888
PROVISION FOR LOAN LOSSES
Florida	$	(3,295	)	$	28,915		$	10,733		$	6,491		$	3,167		$	36,353		$	36,869
Mississippi (1)		12,009			(1,044	)		4,386			5,756			8,476			15,351			14,950
Tennessee (2)		159			(659	)		1,621			1,461			27			1,121			3,246
Texas		6,897			(445	)		126			2,976			2,803			6,578			4,663
Total provision for loan losses	$	15,770		$	26,767		$	16,866		$	16,684		$	14,473		$	59,403		$	59,728
NET CHARGE-OFFS
Florida	$	131		$	21,167		$	6,933		$	7,160		$	3,779		$	28,231		$	35,531
Mississippi (1)		9,629			3,267			3,455			4,387			4,515			16,351			10,303
Tennessee (2)		872			897			785			816			1,291			2,554			1,525
Texas		3,873			43			257			287			576			4,173			1,332
Total net charge-offs	$	14,505		$	25,374		$	11,430		$	12,650		$	10,161		$	51,309		$	48,691
CREDIT QUALITY RATIOS
Net charge offs/average loans		0.86	%		1.48	%		0.66	%		0.73	%		0.58	%		1.00	%		0.92	%
Provision for loan losses/average loans		0.93	%		1.56	%		0.98	%		0.96	%		0.83	%		1.16	%		1.13	%
Nonperforming loans/total loans (incl LHFS)		2.09	%		1.94	%		1.94	%		1.64	%		1.53	%
Nonperforming assets/total loans (incl LHFS)		3.18	%		2.75	%		2.54	%		2.19	%		2.00	%
Nonperforming assets/total loans (incl LHFS) +ORE		3.14	%		2.72	%		2.53	%		2.18	%		1.99	%
ALL/total loans (excl LHFS)		1.61	%		1.55	%		1.51	%		1.41	%		1.35	%
ALL-commercial/total commercial loans		2.08	%		2.01	%		1.95	%		1.79	%		1.76	%
ALL-consumer/total consumer and home mortgage loans		0.76	%		0.73	%		0.73	%		0.72	%		0.64	%
ALL/nonperforming loans		74.38	%		76.51	%		74.61	%		83.24	%		86.33	%
ALL/nonperforming loans (excl impaired loans)		117.93	%		123.15	%		137.47	%		166.07	%		145.21	%
CAPITAL RATIOS
Total equity/total assets		13.04	%		12.49	%		12.28	%		12.04	%		10.44	%
Common equity/total assets		10.83	%		10.35	%		10.18	%		9.94	%		10.44	%
Tangible equity/tangible assets		10.04	%		9.55	%		9.37	%		9.11	%		7.22	%
Tangible common equity/tangible assets		7.76	%		7.34	%		7.20	%		6.95	%		7.22	%
Tangible common equity/risk-weighted assets		10.15	%		9.56	%		9.43	%		9.03	%		8.80	%
Tier 1 leverage ratio		10.70	%		10.38	%		10.17	%		10.42	%		8.11	%
Tier 1 common risk-based capital ratio		10.15	%		9.66	%		9.55	%		9.27	%		8.91	%
Tier 1 risk-based capital ratio		14.11	%		13.50	%		13.34	%		13.01	%		9.86	%
Total risk-based capital ratio		16.09	%		15.45	%		15.28	%		14.95	%		11.80	%
(1) - Mississippi includes Central and Southern Mississippi Regions
(2) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions

See Notes to Consolidated Financials

  TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIALS September 30, 2009 ($ in thousands) (unaudited)

Note 1 - Securities Available for Sale and Held to Maturity

The following table is a summary of the estimated fair value of securities available for sale and the amortized cost of securities held to maturity ($ in thousands):

	9/30/2009		6/30/2009		3/31/2009		12/31/2008		9/30/2008
SECURITIES AVAILABLE FOR SALE
U.S. Treasury and other U.S. Government agencies	$	25,013	$	25,212	$	26,019	$	31,892	$	7,547
Obligations of states and political subdivisions		151,427		137,799		125,366		98,653		39,132
Mortgage-backed securities
Pass-through securities
Guaranteed by GNMA		9,590		10,000		10,658		8,726		6,754
Issued by FNMA and FHLMC		7,229		7,193		79,007		19,186		15,821
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		1,258,779		1,209,677		1,287,745		1,365,015		819,020
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		70,359		92,395		76,183		11,499		8,226
Corporate debt securities		6,228		6,152		8,069		7,870		11,129
Total securities available for sale	$	1,528,625	$	1,488,428	$	1,613,047	$	1,542,841	$	907,629
SECURITIES HELD TO MATURITY
Obligations of states and political subdivisions	$	78,522	$	89,331	$	95,799	$	102,901	$	98,799
Mortgage-backed securities
Pass-through securities
Guaranteed by GNMA		7,269		7,298		5,325		-		-
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		153,728		154,655		155,553		156,728		157,524
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		3,084		3,096		-		-		-
Total securities held to maturity	$	242,603	$	254,380	$	256,677	$	259,629	$	256,323

Management continues to focus on asset quality as one of the strategic goals of the securities portfolio, which is evidenced by the investment of approximately 87% of the portfolio in U.S. Government agency-backed obligations and other AAA rated securities.  None of the securities in the portfolio are considered to be sub-prime. Furthermore, outside of membership in the Federal Home Loan Bank of Dallas, Federal Reserve Bank and Depository Trust and Clearing Corporation, Trustmark does not hold any equity investment in government sponsored entities.

Note 2 – Loan Composition

LOANS BY TYPE	9/30/2009			6/30/2009			3/31/2009			12/31/2008			9/30/2008
Loans secured by real estate:
Construction, land development and other land loans	$	872,367		$	960,945		$	1,000,020		$	1,028,788		$	1,062,319
Secured by 1-4 family residential properties		1,637,322			1,663,575			1,601,600			1,524,061			1,561,024
Secured by nonfarm, nonresidential properties		1,472,147			1,472,212			1,425,937			1,422,658			1,345,624
Other real estate secured		209,957			186,770			184,204			186,915			175,877
Commercial and industrial loans		1,165,970			1,203,230			1,258,887			1,305,938			1,328,035
Consumer loans		661,075			727,399			804,958			895,046			947,113
Other loans		363,602			356,451			364,991			358,997			320,738
Loans		6,382,440			6,570,582			6,640,597			6,722,403			6,740,730
Allowance for loan losses		(103,016	)		(101,751	)		(100,358	)		(94,922	)		(90,888	)
Net Loans	$	6,279,424		$	6,468,831		$	6,540,239		$	6,627,481		$	6,649,842

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 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 environmental factors such as current economic events, industry and geographical conditions and portfolio performance indicators.  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.

During the quarter ended June 30, 2009, Trustmark refined its allowance for loan loss methodology for commercial loans classifying them into thirteen separate homogenous loan types, while taking into consideration the uniqueness of our markets.  In addition, Trustmark combined its quantitative historical loan loss factors and qualitative risk factors for each of its homogenous loan types.  These enhancements were implemented based upon current regulatory guidance from Trustmark’s primary regulator and as a result, approximately $8.0 million in qualitative reserves were reallocated to specific reserves.

  TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIALS September 30, 2009 ($ in thousands) (unaudited)

Note 2 - Loan Composition (continued)
	September 30, 2009
LOAN COMPOSITION BY REGION	Total		Florida		Mississippi (Central and Southern Regions)		Tennessee (Memphis, TN and Northern MS Regions)		Texas
Loans secured by real estate:
Construction, land development and other land loans	$	872,367	$	211,974	$	321,954	$	61,780	$	276,659
Secured by 1-4 family residential properties		1,637,322		92,088		1,345,249		167,852		32,133
Secured by nonfarm, nonresidential properties		1,472,147		182,548		830,698		215,714		243,187
Other real estate secured		209,957		12,891		168,679		9,869		18,518
Commercial and industrial loans		1,165,970		19,762		836,231		60,117		249,860
Consumer loans		661,075		2,276		619,645		29,362		9,792
Other loans		363,602		29,880		289,894		22,921		20,907
Loans	$	6,382,440	$	551,419	$	4,412,350	$	567,615	$	851,056
CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION
Lots	$	104,966	$	63,645	$	24,816	$	4,535	$	11,970
Development		199,194		28,376		77,320		11,129		82,369
Unimproved land		280,701		83,437		107,037		32,352		57,875
1-4 family construction		137,477		13,237		77,555		6,398		40,287
Other construction		150,029		23,279		35,226		7,366		84,158
Construction, land development and other land loans	$	872,367	$	211,974	$	321,954	$	61,780	$	276,659

								Classified (3)
FLORIDA CREDIT QUALITY	Total Loans		Criticized Loans (1)		Special Mention (2)			Accruing			Nonimpaired Nonaccrual		Impaired Nonaccrual (4)
Construction, land development and other land loans:
Lots	$	63,645	$	26,047	$	-		$	12,152		$	11,436	$	2,459
Development		28,376		17,883		-			5,033			702		12,148
Unimproved land		83,437		49,261		18,980			10,945			3,891		15,445
1-4 family construction		13,237		4,726		-			1,767			244		2,715
Other construction		23,279		15,051		2,745			9,665			497		2,144
Construction, land development and other land loans		211,974		112,968		21,725			39,562			16,770		34,911
Commercial, commercial real estate and consumer		339,445		69,292		18,964			29,946			12,080		8,302
Total Florida loans	$	551,419	$	182,260	$	40,689		$	69,508		$	28,850	$	43,213
										��
FLORIDA CREDIT QUALITY (continued)	Total Loans Less Impaired Loans		Loan Loss Reserves		Loan Loss Reserve % of NonImpaired Loans
Construction, land development and other land loans:
Lots	$	61,186	$	7,361		12.03	%
Development		16,228		2,237		13.78	%
Unimproved land		67,992		9,066		13.33	%
1-4 family construction		10,522		374		3.55	%
Other construction		21,135		3,122		14.77	%
Construction, land development and other land loans		177,063		22,160		12.52	%
Commercial, commercial real estate and consumer		331,143		7,027		2.12	%
Total Florida loans	$	508,206	$	29,187		5.74	%

(1)   Criticized loans equal all special mention and classified loans.

(2)   Special mention loans exhibit potential credit weaknesses that, if not resolved, may ultimately result in a more severe classification.

(3)   Classified loans include those loans identified by management as exhibiting well-defined credit weaknesses that may jeopardize repayment in full of the debt.

(4)   All nonaccrual loans over $1 million are individually assessed for impairment in accordance with SFAS No. 114.  Impaired loans have been determined to be collateral dependent and assessed using a fair value approach.  Fair value estimates begin with appraised values, normally from recently received and reviewed appraisals.  Appraised values are adjusted down for costs associated with asset disposal.  When a loan is deemed to be impaired, the full difference between book value and the most likely estimate of the asset’s net realizable value is charged off.

  TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIALS September 30, 2009 ($ in thousands) (unaudited)

Note 2 - Loan Composition (continued)
LOAN COMPOSITION -FLORIDA	9/30/2009		6/30/2009		3/31/2009		12/31/2008		9/30/2008
Loans secured by real estate:
Construction, land development and other land loans	$	211,974	$	245,494	$	276,315	$	294,473	$	301,509
Secured by 1-4 family residential properties		92,088		88,007		93,911		91,559		90,790
Secured by nonfarm, nonresidential properties		182,548		180,559		180,649		179,123		176,512
Other real estate secured		12,891		12,900		12,747		12,632		12,518
Commercial and industrial loans		19,762		19,907		18,049		18,814		18,305
Consumer loans		2,276		2,238		2,531		3,206		3,008
Other loans		29,880		21,692		21,823		18,505		14,833
Loans	$	551,419	$	570,797	$	606,025	$	618,312	$	617,475
CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS - FLORIDA
Lots	$	63,645	$	69,005	$	74,002	$	76,849	$	82,472
Development		28,376		33,533		41,769		35,927		37,578
Unimproved land		83,437		93,379		99,063		114,232		111,548
1-4 family construction		13,237		17,344		25,878		29,246		29,265
Other construction		23,279		32,233		35,603		38,219		40,646
Construction, land development and other land loans	$	211,974	$	245,494	$	276,315	$	294,473	$	301,509

Note 3 –Preferred Stock

On November 21, 2008, Trustmark issued a total of 215,000 shares of Senior Preferred stock to the U.S. Treasury (Treasury) in a private placement transaction as part of the Troubled Assets Relief Program Capital Purchase Program (TARP CPP), a voluntary initiative for healthy U.S. financial institutions.  Trustmark chose to participate in the TARP CPP in order to reinforce its strong capital position, advance the Treasury’s efforts to facilitate additional lending in the markets where Trustmark operates and to support its growth and expansion opportunities.  Cumulative dividends on the Senior Preferred stock accrue on the liquidation preference of $1,000.00 per share at a rate of 5.00% per year until, but excluding, February 15, 2014, and from that date thereafter at the rate of 9.00% per share per year, and will be paid quarterly, but only if, as, and when declared by Trustmark’s Board of Directors. Trustmark may redeem the Senior Preferred stock at par.  Based upon recent legislation, it is not necessary for Trustmark to replace the Senior Preferred stock with Tier 1 (or other) capital as a condition to redemption.  Any redemption is, however, subject to the consent of the Treasury, the Federal Reserve and the OCC.

As part of its participation in the TARP CPP, in addition to issuing 215,000 shares of Senior Preferred stock to the Treasury, Trustmark also issued to the Treasury a ten-year warrant (the Warrant) to purchase up to 1,647,931 shares of Trustmark’s common stock, at an initial exercise price of $19.57 per share, subject to customary anti-dilution adjustments.

The Senior Preferred stock was recorded at issue for $204.9 million, with the remainder of the $10.1 million in cash proceeds recorded as warrants in Capital Surplus.  This allocation was derived by a third-party evaluation of the fair value of the Senior Preferred and warrant at the time of issuance.  The cash proceeds were then apportioned to the Senior Preferred and the warrants using their relative fair values.  The basis of the Senior Preferred will be accreted to the $215 million redemption value on a constant yield method over five years, and the accretion will be represented as an additional carrying cost of the equity.  The warrant is not subject to mark-to-market accounting, and will be carried in Capital Surplus at its original basis until exercise or expiration.  The warrant’s effect on shares outstanding will be included in dilutive shares using the treasury stock method.

Note 4 – Yields on 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															Nine Months Ended
	9/30/2009			6/30/2009			3/31/2009			12/31/2008			9/30/2008			9/30/2009			9/30/2008
Securities – Taxable		4.94	%		5.16	%		5.22	%		4.87	%		4.79	%		5.11	%		4.64	%
Securities – Nontaxable		5.96	%		6.23	%		6.72	%		6.68	%		6.74	%		6.26	%		6.93	%
Securities – Total		5.02	%		5.24	%		5.31	%		5.01	%		4.99	%		5.19	%		4.92	%
Loans		5.32	%		5.34	%		5.37	%		5.86	%		6.07	%		5.34	%		6.33	%
FF Sold & Rev Repo		0.50	%		0.36	%		0.48	%		0.99	%		2.24	%		0.44	%		2.52	%
Other Earning Assets		3.44	%		2.92	%		3.14	%		2.98	%		4.34	%		3.16	%		5.03	%
Total Earning Assets		5.24	%		5.30	%		5.34	%		5.68	%		5.90	%		5.29	%		6.14	%
Interest-bearing Deposits		1.33	%		1.54	%		1.66	%		1.98	%		2.32	%		1.51	%		2.67	%
FF Pch & Repo		0.17	%		0.19	%		0.22	%		0.58	%		1.88	%		0.19	%		2.18	%
Borrowings		1.54	%		1.48	%		1.16	%		2.20	%		3.81	%		1.35	%		4.29	%
Total Interest-bearing Liabilities		1.23	%		1.41	%		1.46	%		1.83	%		2.34	%		1.37	%		2.71	%
Net interest margin		4.28	%		4.20	%		4.18	%		4.20	%		4.01	%		4.22	%		3.95	%

During the third quarter 2009, the net interest margin increased 8 basis points to 4.28%, from 4.20% second quarter of 2009. The increase is due to decreasing deposit costs, offset somewhat by a modest decline in earning asset yields.

  TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIALS September 30, 2009 ($ in thousands) (unaudited)

Note 4 – Yields on Earning Assets and Interest-Bearing Liabilities (continued)

During the first nine months of 2009, Trustmark’s net interest margin expanded to 4.22%, up 27 basis points compared to the first nine months of 2008.  This increase is primarily a result of three factors including the impact of an increased level of fixed rate securities funded primarily through short-term and floating rate liabilities, moderating certificate of deposit costs and improved loan pricing trends.  These benefits have outweighed the continued downward repricing of fixed rate assets.

Note 5 – Other Noninterest Expense

Other noninterest expense consisted of the following ($ in thousands):

	Quarter Ended										Nine Months Ended
	9/30/2009		6/30/2009		3/31/2009		12/31/2008		9/30/2008		9/30/2009		9/30/2008
FDIC assessment expense	$	2,913	$	7,253	$	2,777	$	1,502	$	1,377	$	12,943	$	1,969
ORE/Foreclosure expense		5,870		2,733		630		684		1,146		9,233		1,697
Other expense		8,732		8,691		8,231		8,911		8,183		25,654		23,300
Total other expense	$	17,515	$	18,677	$	11,638	$	11,097	$	10,706	$	47,830	$	26,966

Note 6 – 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. The impact of this strategy resulted in a net positive ineffectiveness of $2.1 million and $0.8 million for the quarters endedSeptember 30, 2009 and 2008, respectively.  For the nine months ended September 30, 2009 and 2008, the impact was a net negative ineffectiveness of $0.4 million and a net positive ineffectiveness of $10.8 million, respectively.  The accompanying table shows that the MSR value decreased $9.3 million for the quarter ended September 30, 2009 due to a decrease in mortgage rates.  More than offsetting the MSR change is an $11.5 million increase in the value of derivative instruments primarily due to a decline in 10-year Treasury note yields.

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

	Quarter Ended															Nine Months Ended
	9/30/2009			6/30/2009			3/31/2009			12/31/2008			9/30/2008			9/30/2009			9/30/2008
Mortgage servicing income, net	$	4,092		$	4,029		$	4,001		$	4,188		$	4,002		$	12,122		$	11,553
Change in fair value-MSR from market changes		(9,344	)		13,593			(352	)		(36,846	)		(903	)		3,897			2,008
Change in fair value of derivatives		11,471			(18,206	)		2,407			37,160			1,680			(4,328	)		8,826
Change in fair value-MSR from runoff		(1,608	)		(3,097	)		(2,643	)		(2,101	)		(2,152	)		(7,348	)		(6,885	)
Gain on sales of loans		4,081			8,932			4,004			473			1,875			17,017			5,495
Other, net		179			(2,708	)		3,490			1,519			(179	)		961			1,090
Mortgage banking, net	$	8,871		$	2,543		$	10,907		$	4,393		$	4,323		$	22,321		$	22,087

Note 7 – Non-GAAP Financial Measures

In addition to capital ratios defined by generally accepted accounting principles (GAAP) and banking regulators, Trustmark utilizes various tangible common equity measures when evaluating capital utilization and adequacy.  Tangible common equity, as defined by Trustmark, represents common equity less goodwill and identifiable intangible assets.

Trustmark believes these measures are important because they reflect the level of capital available to withstand unexpected market conditions. Additionally, presentation of these measures allows readers to compare certain aspects of Trustmark’s capitalization to other organizations.  These ratios differ from capital measures defined by banking regulators principally in that the numerator excludes shareholders’ equity associated with preferred securities, the nature and extent of which varies across organizations.

These calculations are intended to complement the capital ratios defined by GAAP and banking regulators.  Because GAAP does not include these capital ratio measures, Trustmark believes there are no comparable GAAP financial measures to these tangible common equity ratios. The following table reconciles Trustmark’s calculation of these measures to amounts reported under GAAP.  Despite the importance of these measures to Trustmark, there are no standardized definitions for them and, as a result, Trustmark’s calculations may not be comparable with other organizations. Also there may be limits in the usefulness of these measures to investors. As a result, Trustmark encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

  TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIALS September 30, 2009 ($ in thousands) (unaudited)

Note 7 - Non-GAAP Financial Measures (continued)
			Quarter Ended															Nine Months Ended
			9/30/2009			6/30/2009			3/31/2009			12/31/2008			9/30/2008			9/30/2009			9/30/2008
TANGIBLE COMMON EQUITY
QUARTERLY AVERAGE BALANCES
Total shareholders' equity			$	1,216,987		$	1,207,202		$	1,192,398		$	1,056,052		$	946,897		$	1,205,619		$	941,188
Less:	Preferred stock			(206,308	)		(205,860	)		(205,417	)		(91,385	)		-			(205,865	)		-
Total average common equity				1,010,679			1,001,342			986,981			964,667			946,897			999,754			941,188
Less:	Goodwill			(291,104	)		(291,104	)		(291,104	)		(291,123	)		(291,145	)		(291,104	)		(291,162	)
	Identifiable intangible assets			(21,430	)		(22,424	)		(23,440	)		(24,466	)		(25,540	)		(22,424	)		(26,608	)
Total average tangible common equity			$	698,145		$	687,814		$	672,437		$	649,078		$	630,212		$	686,226		$	623,418
PERIOD END BALANCES
Total shareholders' equity			$	1,221,361		$	1,202,114		$	1,200,368		$	1,178,466		$	948,998
Less:	Preferred stock			(206,461	)		(206,009	)		(205,564	)		(205,126	)		-
Total common equity				1,014,900			996,105			994,804			973,340			948,998
Less:	Goodwill			(291,104	)		(291,104	)		(291,104	)		(291,104	)		(291,145	)
	Identifiable intangible assets			(20,819	)		(21,820	)		(22,820	)		(23,821	)		(24,887	)
Total tangible common equity		(a)	$	702,977		$	683,181		$	680,880		$	658,415		$	632,966
TANGIBLE ASSETS
Total assets			$	9,368,498		$	9,626,870		$	9,775,714		$	9,790,909		$	9,086,273
Less:	Goodwill			(291,104	)		(291,104	)		(291,104	)		(291,104	)		(291,145	)
	Identifiable intangible assets			(20,819	)		(21,820	)		(22,820	)		(23,821	)		(24,887	)
Total tangible assets		(b)	$	9,056,575		$	9,313,946		$	9,461,790		$	9,475,984		$	8,770,241
Risk-weighted assets		(c)	$	6,923,907		$	7,144,278		$	7,216,846		$	7,294,633		$	7,196,685
NET INCOME ADJUSTED FOR INTANGIBLE AMORTIZATION
Net income available to common shareholders			$	22,370		$	13,443		$	23,359		$	23,979		$	23,354		$	59,172		$	67,085
Plus:	Intangible amortization net of tax			619			618			618			658			662			1,855			1,986
Net income adjusted for intangible amortization			$	22,989		$	14,061		$	23,977		$	24,637		$	24,016		$	61,027		$	69,071
Period end common shares outstanding		(d)		57,440,047			57,423,841			57,378,318			57,324,737			57,324,627
TANGIBLE COMMON EQUITY MEASUREMENTS
Return on average tangible common equity 1				13.06	%		8.20	%		14.46	%		15.10	%		15.16	%		11.89	%		14.80	%
Tangible common equity/tangible assets		(a)/(b)		7.76	%		7.34	%		7.20	%		6.95	%		7.22	%
Tangible common equity/risk-weighted assets		(a)/(c)		10.15	%		9.56	%		9.43	%		9.03	%		8.80	%
Tangible common book value		(a)/(d)*1,000	$	12.24		$	11.90		$	11.87		$	11.49		$	11.04
TIER 1 COMMON RISK-BASED CAPITAL
Total shareholders' equity			$	1,221,361		$	1,202,114		$	1,200,368		$	1,178,466		$	948,998
Eliminate qualifying AOCI				(3,072	)		5,395			5,097			14,717			16,331
Qualifying tier 1 capital				68,000			68,000			68,000			68,000			68,000
Disallowed goodwill				(291,104	)		(291,104	)		(291,104	)		(291,104	)		(291,145	)
Adj to goodwill allowed for deferred taxes				8,453			8,100			7,748			7,395			-
Other disallowed intangibles				(20,819	)		(21,820	)		(22,820	)		(23,821	)		(24,887	)
Disallowed servicing intangible				(5,604	)		(6,331	)		(4,526	)		(4,288	)		(7,855	)
Total tier 1 capital			$	977,215		$	964,354		$	962,763		$	949,365		$	709,442
Less:	Qualifying tier 1 capital			(68,000	)		(68,000	)		(68,000	)		(68,000	)		(68,000	)
	Preferred stock			(206,461	)		(206,009	)		(205,564	)		(205,126	)		-
Total tier 1 common capital		(e)	$	702,754		$	690,345		$	689,199		$	676,239		$	641,442
Tier 1 common risk-based capital ratio		(e)/(c)		10.15	%		9.66	%		9.55	%		9.27	%		8.91	%
1Calculation = ((net income adjusted for intangible amortization/number of days in period)*number of days in year)/total average tangible common equity