Trustmark (TRMK) 8-K Trustmark Corporation Announces Fourth Quarter and Fiscal Year 2018 Financial Results

Exhibit 99.1

News Release

Trustmark Corporation Announces Fourth Quarter and Fiscal Year 2018 Financial Results

JACKSON, Miss. – January 23, 2019 – Trustmark Corporation (NASDAQ:TRMK) reported net income of $36.7 million in the fourth quarter of 2018, which represented diluted earnings per share of $0.55. Diluted earnings per share in the fourth quarter of 2018 increased 1.9% from the prior quarter and 14.6% when compared to the fourth quarter of 2017 excluding non-routine items.

For the full year, Trustmark’s net income totaled $149.6 million, which represented diluted earnings per share of $2.21.  This compares to reported diluted earnings per share in 2017 of $1.56, or $1.92 excluding non-routine items.  Diluted earnings per share in 2018 increased 41.7% from reported EPS in 2017 and 15.1% when compared to earnings per share excluding non-routine items. Trustmark’s net income in 2018 produced a return on average tangible equity of 12.86% and a return on average assets of 1.11%.

Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable March 15, 2019, to shareholders of record on March 1, 2019.  

2018 Highlights

• Loans held for investment increased $265.9 million, or 3.1%, during the year

• Credit quality remained solid; nonperforming assets declined 13.1%

• Deposits increased $786.9 million, or 7.4%

• Revenue excluding acquired loans totaled $587.1 million, an increase of 3.4%

• Core noninterest expense totaled $408.2 million, up 2.2%

Gerard R. Host, President and CEO, stated, “During 2018, we continued to focus on strategic initiatives of profitably growing each of our financial services businesses, optimizing our balance sheet, deploying capital through share repurchases and maintaining disciplined expense management. As we look forward in 2019, we will continue to provide the financial services and advice our customers have come to expect.  We remain committed to managing the franchise for the long term, supporting investments to promote profitable revenue growth, realigning delivery channels to support changing customer preferences, as well as reengineering and efficiency opportunities that enhance long-term shareholder value.”

Balance Sheet Management

• Continued balance sheet optimization program as maturing investment securities were replaced in part by organic loan growth

• Repurchased $54.5 million of common stock in fourth quarter

Loans held for investment totaled $8.8 billion at December 31, 2018, an increase of 1.0% from the prior quarter and 3.1% from the same period one year earlier. During the quarter, growth in other real estate secured loans ($90.1 million), state and political subdivision loans ($44.6 million), construction, land development and other land loans ($25.1 million) and residential mortgage loans ($24.5 million) was offset in part by declines in commercial and industrial loans ($27.2 million) and loans secured by nonfarm, nonresidential properties ($73.4 million).

Acquired loans totaled $106.9 million at December 31, 2018, down $25.7 million from the prior quarter.  Collectively, loans held for investment and acquired loans totaled $8.9 billion at December 31, 2018, up 0.7% from the prior quarter and 1.3% from the prior year.

Deposits totaled $11.4 billion at December 31, 2018, an increase of $407.5 million, or 3.7%, from the previous quarter and $786.9 million, or 7.4%, year-over-year.  Both the linked quarter and year-over-year increase reflects growth in personal and public fund balances.

Trustmark’s capital position remained solid, reflecting the consistent profitability of its diversified financial services businesses.  During the fourth quarter, Trustmark repurchased approximately $54.5 million, or 1.8 million shares of its common stock.  At December 31, 2018, Trustmark had $36.9 million in remaining authority under its existing stock repurchase program, which expires March 31, 2019.  The repurchase program, which is subject to market conditions and management discretion, will continue to be implemented through open market repurchases or privately negotiated transactions.  At December 31, 2018, Trustmark’s tangible equity to tangible assets ratio was 9.31%, while its total risk-based capital ratio was 13.07%.  Tangible book value per share was $18.24 at December 31, 2018, up 5.1% year-over-year.

Credit Quality

• Allowance for loan losses represented 350.77% of nonperforming loans, excluding specifically reviewed impaired loans

• Nonperforming assets declined $8.0 million in the fourth quarter and $14.5 million year-over-year

Nonperforming loans totaled $61.6 million at December 31, 2018, down 9.2% from the prior quarter and 8.8% year-over-year.  Other real estate totaled $34.7 million, reflecting a 5.0% linked-quarter decrease and a 19.8% year-over-year reduction.  Collectively, nonperforming assets totaled $96.3 million, reflecting linked-quarter and year-over-year decreases of 7.7% and 13.1%, respectively.  

Allocation of Trustmark's $79.3 million allowance for loan losses represented 0.99% of commercial loans and 0.57% of consumer and home mortgage loans, resulting in an allowance to total loans held for investment of 0.90% at December 31, 2018.  This represents a level management considers commensurate with the inherent risk in the loan portfolio.  In aggregate, the allowance for both held for investment and acquired loan losses represented 0.90% of total loans held for investment and acquired loans.  

Net charge-offs totaled $11.8 million in the fourth quarter resulting from resolution of two specific problem credits which were fully provisioned in prior periods.

Unless noted otherwise, all of the above credit quality metrics exclude acquired loans.

Revenue Generation

• Net interest income (FTE) excluding acquired loans in 2018 totaled $415.1 million, up 3.0% from the prior year

• Noninterest income in 2018 totaled $184.8 million, representing 31.5% of total revenue excluding acquired loans

Revenue in the fourth quarter totaled $148.7 million, down 3.5% from the prior quarter, reflecting higher interest expense as well as a seasonal reduction in noninterest income.  Net interest income (FTE) in the fourth quarter totaled $108.4 million, resulting in a net interest margin of 3.56%.  Compared to the prior quarter, net interest income (FTE) decreased $1.7 million, as growth in total interest income was more than offset by increased total interest expense.  During the fourth quarter of 2018, the yield on acquired loans totaled 9.89% and included $1.1 million in recoveries from the settlement of debt, which represented approximately 3.52% of the annualized total acquired loan yield.  Excluding acquired loans, the net interest margin (FTE) for the fourth quarter of 2018 remained stable at 3.50%  when compared to the third quarter of 2018, as growth in the yield on the loans held for investment and held for sale portfolio, runoff of maturing investment securities, and favorable funding mix were offset by higher costs of interest-bearing deposits. Net interest income (FTE) in 2018 totaled $432.2 million, resulting in a net interest margin (FTE) of 3.54%; excluding acquired loans, the net interest margin (FTE) was 3.46%.        

Noninterest income totaled $43.6 million in the fourth quarter, down from the prior quarter primarily because of seasonally lower insurance commissions and reduced mortgage banking revenue.  In the fourth quarter, bank card and other fees totaled $7.8 million, an increase of 3.9% from the prior quarter, while service charges on deposit accounts totaled $11.1 million, up 0.4% from the prior quarter.  Other income, net increased $546 thousand linked quarter, primarily due to an increase in other miscellaneous income.  

Insurance revenue in the fourth quarter totaled $9.6 million, reflecting a seasonal decrease of 11.2% from the prior quarter and an increase of 8.5% compared to one year earlier.  Insurance revenue in 2018 totaled $40.5 million, up $2.3 million, or 6.0%, relative to the prior year.  The solid performance in 2018 reflects increased business development efforts and initiatives that supported enhanced productivity.  

Wealth management revenue totaled $7.5 million in the fourth quarter, a decrease of 3.7% when compared to the prior quarter and 2.8% from levels one year earlier.  The decrease is primarily attributable to lower trust and investment management revenue.  Wealth management revenue in 2018 totaled $30.3 million, in-line with the prior year.  Trustmark remained focused on servicing clients and realigned processes to enhance productivity.    

Mortgage banking revenue in the fourth quarter totaled $5.7 million, down $2.9 million from the prior quarter.  The linked-quarter decrease reflects a decline in the fair value of loans held for sale, reduced secondary marketing gains, and negative mortgage servicing hedge ineffectiveness.  Mortgage loan production in the fourth quarter totaled $303.7 million, a seasonal decrease of 23.7% from the prior quarter and a 10.0% decrease year-over-year, primarily due to lower refinancing activity and higher interest rates.

In 2018, mortgage banking revenue totaled $34.7 million, up 16.0% from the prior year, reflecting increased secondary marketing gains, positive mortgage servicing hedge ineffectiveness and increased mortgage servicing income.  Mortgage loan production totaled $1.4 billion in 2018, up 3.4% from the prior year despite an extremely competitive third party origination environment.

Noninterest Expense

• Total noninterest expense decreased 1.2% from the prior quarter

• Effective Corporate tax rate in 2018 was 12.96%

Diligent expense management continues to be a priority for Trustmark.  Core noninterest expense, which excludes other real estate expense ($61 thousand) and intangible amortization ($1.3 million), totaled $102.6 million in the fourth quarter, a decrease of $181 thousand on a comparable basis from the prior quarter and an increase of $1.8 million from the prior year.

Salaries and benefits totaled $58.7 million in the fourth quarter, down 3.5% linked quarter primarily due to a seasonal decline in insurance commissions.  Services and fees increased 9.2% from the prior quarter, reflecting higher spending on outside services and fees, data processing and advertising.  Other real estate expense totaled $61 thousand during the fourth quarter, representing a 94.8% decrease compared to the prior quarter. Other expense totaled $12.3 million in the fourth quarter, an increase of 4.8% from the prior quarter primarily due to increased miscellaneous fees.

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Thursday, January 24, 2019, at 8:30 a.m. Central Time to discuss the Corporation’s financial results.  Interested parties may listen to the conference call by dialing (877) 317-3051 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 Thursday, February 7, 2019, in archived format at the same web address or by calling (877) 344-7529, passcode 10127330.

Trustmark Corporation is a financial services company providing banking and financial solutions through 196 offices in Alabama, Florida, Mississippi, Tennessee and Texas.

Forward-Looking Statements

Certain statements contained in this document constitute forward-looking statements within the meaning of the 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 potential market impacts of efforts by the Federal Reserve Board to reduce the size of its balance sheet, conditions in the housing and real estate markets in the regions in which Trustmark operates and the extent and duration of the current volatility in the credit and financial markets as well as crude oil prices, 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, including the potential impact of issues relating to the European financial system and monetary and other governmental actions designed to address credit, securities, and/or commodity 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 affect our consolidated financial statements, changes in consumer spending, borrowings and savings habits, technological changes, changes in the financial performance or condition of our borrowers, changes in our ability to control expenses, greater than expected costs or difficulties related to the integration of acquisitions or new products and lines of business, cyber-attacks and other breaches which could affect our information system security, natural disasters, environmental disasters, acts of war or terrorism, and other risks described in our filings with the Securities and Exchange Commission.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct.  Except as required by law, we undertake no obligation to update or revise any of this information, whether as the result of new information, future events or developments or otherwise.

Trustmark Investor Contacts:	Trustmark Media Contact:
Louis E. Greer	Melanie A. Morgan
Treasurer and	Senior Vice President
Principal Financial Officer	601-208-2979
601-208-2310

F. Joseph Rein, Jr.

Senior Vice President

601-208-6898

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	CONSOLIDATED FINANCIAL INFORMATION
	December 31, 2018
	($ in thousands)
	(unaudited)

										Linked Quarter						Year over Year
QUARTERLY AVERAGE BALANCES	12/31/2018			9/30/2018			12/31/2017			$ Change			% Change			$ Change			% Change
Securities AFS-taxable	$	1,847,421		$	1,937,807		$	2,247,247		$	(90,386	)		-4.7	%	$	(399,826	)		-17.8	%
Securities AFS-nontaxable		38,821			41,889			61,691			(3,068	)		-7.3	%		(22,870	)		-37.1	%
Securities HTM-taxable		893,186			933,294			1,045,723			(40,108	)		-4.3	%		(152,537	)		-14.6	%
Securities HTM-nontaxable		29,143			29,183			32,781			(40	)		-0.1	%		(3,638	)		-11.1	%
Total securities		2,808,571			2,942,173			3,387,442			(133,602	)		-4.5	%		(578,871	)		-17.1	%
Loans (including loans held for sale)		8,933,501			8,907,588			8,686,916			25,913			0.3	%		246,585			2.8	%
Acquired loans		127,747			147,811			273,918			(20,064	)		-13.6	%		(146,171	)		-53.4	%
Fed funds sold and rev repos		843			477			1,724			366			76.7	%		(881	)		-51.1	%
Other earning assets		200,282			189,471			80,218			10,811			5.7	%		120,064		n/m
Total earning assets		12,070,944			12,187,520			12,430,218			(116,576	)		-1.0	%		(359,274	)		-2.9	%
Allowance for loan losses		(85,842	)		(86,496	)		(86,704	)		654			0.8	%		862			1.0	%
Cash and due from banks		339,605			330,949			315,586			8,656			2.6	%		24,019			7.6	%
Other assets		1,023,226			1,035,327			1,192,464			(12,101	)		-1.2	%		(169,238	)		-14.2	%
Total assets	$	13,347,933		$	13,467,300		$	13,851,564		$	(119,367	)		-0.9	%	$	(503,631	)		-3.6	%
Interest-bearing demand deposits	$	2,722,841		$	2,602,658		$	2,244,625		$	120,183			4.6	%	$	478,216			21.3	%
Savings deposits		3,565,682			3,722,533			3,291,407			(156,851	)		-4.2	%		274,275			8.3	%
Time deposits		1,892,983			1,851,866			1,756,576			41,117			2.2	%		136,407			7.8	%
Total interest-bearing deposits		8,181,506			8,177,057			7,292,608			4,449			0.1	%		888,898			12.2	%
Fed funds purchased and repos		340,094			347,489			475,850			(7,395	)		-2.1	%		(135,756	)		-28.5	%
Short-term borrowings		89,364			186,293			1,276,543			(96,929	)		-52.0	%		(1,187,179	)		-93.0	%
Long-term FHLB advances		888			903			954			(15	)		-1.7	%		(66	)		-6.9	%
Junior subordinated debt securities		61,856			61,856			61,856			—			0.0	%		—			0.0	%
Total interest-bearing liabilities		8,673,708			8,773,598			9,107,811			(99,890	)		-1.1	%		(434,103	)		-4.8	%
Noninterest-bearing deposits		2,862,161			2,894,061			2,994,292			(31,900	)		-1.1	%		(132,131	)		-4.4	%
Other liabilities		216,932			202,053			169,828			14,879			7.4	%		47,104			27.7	%
Total liabilities		11,752,801			11,869,712			12,271,931			(116,911	)		-1.0	%		(519,130	)		-4.2	%
Shareholders' equity		1,595,132			1,597,588			1,579,633			(2,456	)		-0.2	%		15,499			1.0	%
Total liabilities and equity	$	13,347,933		$	13,467,300		$	13,851,564		$	(119,367	)		-0.9	%	$	(503,631	)		-3.6	%
n/m - percentage changes greater than +/- 100% are considered not meaningful

See Notes to Consolidated Financials

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	CONSOLIDATED FINANCIAL INFORMATION
	December 31, 2018
	($ in thousands)
	(unaudited)

										Linked Quarter						Year over Year
PERIOD END BALANCES	12/31/2018			9/30/2018			12/31/2017			$ Change			% Change			$ Change			% Change
Cash and due from banks	$	349,561		$	432,471		$	335,768		$	(82,910	)		-19.2	%	$	13,793			4.1	%
Fed funds sold and rev repos		830			1,000			615			(170	)		-17.0	%		215			35.0	%
Securities available for sale		1,811,813			1,864,633			2,238,635			(52,820	)		-2.8	%		(426,822	)		-19.1	%
Securities held to maturity		909,643			943,883			1,056,486			(34,240	)		-3.6	%		(146,843	)		-13.9	%
Loans held for sale (LHFS)		153,799			182,664			180,512			(28,865	)		-15.8	%		(26,713	)		-14.8	%
Loans held for investment (LHFI)		8,835,868			8,747,030			8,569,967			88,838			1.0	%		265,901			3.1	%
Allowance for loan losses, LHFI		(79,290	)		(88,874	)		(76,733	)		9,584			10.8	%		(2,557	)		-3.3	%
Net LHFI		8,756,578			8,658,156			8,493,234			98,422			1.1	%		263,344			3.1	%
Acquired loans		106,932			132,615			261,517			(25,683	)		-19.4	%		(154,585	)		-59.1	%
Allowance for loan losses, acquired loans		(1,231	)		(1,714	)		(4,079	)		483			28.2	%		2,848			69.8	%
Net acquired loans		105,701			130,901			257,438			(25,200	)		-19.3	%		(151,737	)		-58.9	%
Net LHFI and acquired loans		8,862,279			8,789,057			8,750,672			73,222			0.8	%		111,607			1.3	%
Premises and equipment, net		178,668			178,739			179,339			(71	)		0.0	%		(671	)		-0.4	%
Mortgage servicing rights		95,596			101,374			84,269			(5,778	)		-5.7	%		11,327			13.4	%
Goodwill		379,627			379,627			379,627			—			0.0	%		—			0.0	%
Identifiable intangible assets		11,112			12,391			16,360			(1,279	)		-10.3	%		(5,248	)		-32.1	%
Other real estate		34,668			36,475			43,228			(1,807	)		-5.0	%		(8,560	)		-19.8	%
Other assets		498,864			517,498			532,442			(18,634	)		-3.6	%		(33,578	)		-6.3	%
Total assets	$	13,286,460		$	13,439,812		$	13,797,953		$	(153,352	)		-1.1	%	$	(511,493	)		-3.7	%
Deposits:
Noninterest-bearing	$	2,937,594		$	2,786,539		$	2,978,074		$	151,055			5.4	%	$	(40,480	)		-1.4	%
Interest-bearing		8,426,817			8,170,371			7,599,438			256,446			3.1	%		827,379			10.9	%
Total deposits		11,364,411			10,956,910			10,577,512			407,501			3.7	%		786,899			7.4	%
Fed funds purchased and repos		50,471			486,865			469,827			(436,394	)		-89.6	%		(419,356	)		-89.3	%
Short-term borrowings		79,006			190,023			971,049			(111,017	)		-58.4	%		(892,043	)		-91.9	%
Long-term FHLB advances		879			896			946			(17	)		-1.9	%		(67	)		-7.1	%
Junior subordinated debt securities		61,856			61,856			61,856			—			0.0	%		—			0.0	%
Other liabilities		138,384			143,658			145,062			(5,274	)		-3.7	%		(6,678	)		-4.6	%
Total liabilities		11,695,007			11,840,208			12,226,252			(145,201	)		-1.2	%		(531,245	)		-4.3	%
Common stock		13,717			14,089			14,115			(372	)		-2.6	%		(398	)		-2.8	%
Capital surplus		309,545			362,868			369,124			(53,323	)		-14.7	%		(59,579	)		-16.1	%
Retained earnings		1,323,870			1,302,593			1,228,187			21,277			1.6	%		95,683			7.8	%
Accum other comprehensive loss, net of tax		(55,679	)		(79,946	)		(39,725	)		24,267			30.4	%		(15,954	)		40.2	%
Total shareholders' equity		1,591,453			1,599,604			1,571,701			(8,151	)		-0.5	%		19,752			1.3	%
Total liabilities and equity	$	13,286,460		$	13,439,812		$	13,797,953		$	(153,352	)		-1.1	%	$	(511,493	)		-3.7	%
n/m - percentage changes greater than +/- 100% are considered not meaningful

See Notes to Consolidated Financials

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	CONSOLIDATED FINANCIAL INFORMATION
	December 31, 2018
	($ in thousands except per share data)
	(unaudited)

	Quarter Ended									Linked Quarter						Year over Year
INCOME STATEMENTS	12/31/2018			9/30/2018			12/31/2017			$ Change			% Change			$ Change			% Change
Interest and fees on LHFS & LHFI-FTE	$	107,709		$	105,993		$	95,816		$	1,716			1.6	%	$	11,893			12.4	%
Interest and fees on acquired loans		3,183			4,033			6,401			(850	)		-21.1	%		(3,218	)		-50.3	%
Interest on securities-taxable		15,496			16,186			18,327			(690	)		-4.3	%		(2,831	)		-15.4	%
Interest on securities-tax exempt-FTE		617			656			1,035			(39	)		-5.9	%		(418	)		-40.4	%
Interest on fed funds sold and rev repos		4			3			7			1			33.3	%		(3	)		-42.9	%
Other interest income		1,158			1,050			473			108			10.3	%		685		n/m
Total interest income-FTE		128,167			127,921			122,059			246			0.2	%		6,108			5.0	%
Interest on deposits		17,334			14,972			7,284			2,362			15.8	%		10,050		n/m
Interest on fed funds pch and repos		1,528			1,348			1,116			180			13.4	%		412			36.9	%
Other interest expense		894			1,467			4,555			(573	)		-39.1	%		(3,661	)		-80.4	%
Total interest expense		19,756			17,787			12,955			1,969			11.1	%		6,801			52.5	%
Net interest income-FTE		108,411			110,134			109,104			(1,723	)		-1.6	%		(693	)		-0.6	%
Provision for loan losses, LHFI		2,192			8,673			5,739			(6,481	)		-74.7	%		(3,547	)		-61.8	%
Provision for loan losses, acquired loans		(247	)		(467	)		(1,573	)		220			47.1	%		1,326			84.3	%
Net interest income after provision-FTE		106,466			101,928			104,938			4,538			4.5	%		1,528			1.5	%
Service charges on deposit accounts		11,123			11,075			11,193			48			0.4	%		(70	)		-0.6	%
Bank card and other fees		7,750			7,459			7,266			291			3.9	%		484			6.7	%
Mortgage banking, net		5,716			8,647			6,284			(2,931	)		-33.9	%		(568	)		-9.0	%
Insurance commissions		9,562			10,765			8,813			(1,203	)		-11.2	%		749			8.5	%
Wealth management		7,504			7,789			7,723			(285	)		-3.7	%		(219	)		-2.8	%
Other, net		1,904			1,358			2,681			546			40.2	%		(777	)		-29.0	%
Nonint inc-excl sec gains (losses), net		43,559			47,093			43,960			(3,534	)		-7.5	%		(401	)		-0.9	%
Security gains (losses), net		—			—			—			—		n/m				—		n/m
Total noninterest income		43,559			47,093			43,960			(3,534	)		-7.5	%		(401	)		-0.9	%
Salaries and employee benefits		58,736			60,847			58,820			(2,111	)		-3.5	%		(84	)		-0.1	%
Defined benefit plan termination		—			—			—			—		n/m				—		n/m
Services and fees		17,910			16,404			15,419			1,506			9.2	%		2,491			16.2	%
Net occupancy-premises		6,741			6,910			6,617			(169	)		-2.4	%		124			1.9	%
Equipment expense		6,329			6,200			5,996			129			2.1	%		333			5.6	%
Other real estate expense, net		61			1,168			666			(1,107	)		-94.8	%		(605	)		-90.8	%
FDIC assessment expense		1,897			1,999			2,868			(102	)		-5.1	%		(971	)		-33.9	%
Other expense		12,253			11,695			12,565			558			4.8	%		(312	)		-2.5	%
Total noninterest expense		103,927			105,223			102,951			(1,296	)		-1.2	%		976			0.9	%
Income before income taxes and tax eq adj		46,098			43,798			45,947			2,300			5.3	%		151			0.3	%
Tax equivalent adjustment		3,231			3,151			5,060			80			2.5	%		(1,829	)		-36.1	%
Income before income taxes		42,867			40,647			40,887			2,220			5.5	%		1,980			4.8	%
Income taxes		6,179			4,394			25,119			1,785			40.6	%		(18,940	)		-75.4	%
Net income	$	36,688		$	36,253		$	15,768		$	435			1.2	%	$	20,920		n/m
Per share data
Earnings per share - basic	$	0.55		$	0.54		$	0.23		$	0.01			1.9	%	$	0.32		n/m
Earnings per share - diluted	$	0.55		$	0.54		$	0.23		$	0.01			1.9	%	$	0.32		n/m
Dividends per share	$	0.23		$	0.23		$	0.23			—			0.0	%		—			0.0	%
Weighted average shares outstanding
Basic		66,839,504			67,621,345			67,742,792
Diluted		67,028,978			67,796,346			67,938,986
Period end shares outstanding		65,834,395			67,621,369			67,746,094
n/m - percentage changes greater than +/- 100% are considered not meaningful

See Notes to Consolidated Financials

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	CONSOLIDATED FINANCIAL INFORMATION
	December 31, 2018
	($ in thousands)
	(unaudited)

	Quarter Ended									Linked Quarter						Year over Year
NONPERFORMING ASSETS (1)	12/31/2018			9/30/2018			12/31/2017			$ Change			% Change			$ Change			% Change
Nonaccrual loans
Alabama	$	3,361		$	3,953		$	3,083		$	(592	)		-15.0	%	$	278			9.0	%
Florida		1,175			1,180			3,034			(5	)		-0.4	%		(1,859	)		-61.3	%
Mississippi (2)		44,331			41,351			49,129			2,980			7.2	%		(4,798	)		-9.8	%
Tennessee (3)		8,696			13,195			4,436			(4,499	)		-34.1	%		4,260			96.0	%
Texas		4,061			8,157			7,893			(4,096	)		-50.2	%		(3,832	)		-48.5	%
Total nonaccrual loans		61,624			67,836			67,575			(6,212	)		-9.2	%		(5,951	)		-8.8	%
Other real estate
Alabama		6,873			7,526			11,714			(653	)		-8.7	%		(4,841	)		-41.3	%
Florida		8,771			8,931			13,937			(160	)		-1.8	%		(5,166	)		-37.1	%
Mississippi (2)		17,255			18,191			14,260			(936	)		-5.1	%		2,995			21.0	%
Tennessee (3)		1,025			1,083			2,535			(58	)		-5.4	%		(1,510	)		-59.6	%
Texas		744			744			782			—			0.0	%		(38	)		-4.9	%
Total other real estate		34,668			36,475			43,228			(1,807	)		-5.0	%		(8,560	)		-19.8	%
Total nonperforming assets	$	96,292		$	104,311		$	110,803		$	(8,019	)		-7.7	%	$	(14,511	)		-13.1	%
LOANS PAST DUE OVER 90 DAYS (1)
LHFI	$	856		$	726		$	2,171		$	130			17.9	%	$	(1,315	)		-60.6	%
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)	$	37,384		$	34,115		$	35,544		$	3,269			9.6	%	$	1,840			5.2	%
	Quarter Ended									Linked Quarter						Year over Year
ALLOWANCE FOR LOAN LOSSES (1)	12/31/2018			9/30/2018			12/31/2017			$ Change			% Change			$ Change			% Change
Beginning Balance	$	88,874		$	83,566		$	80,332		$	5,308			6.4	%	$	8,542			10.6	%
Transfers (4)		—			772			—			(772	)		-100.0	%		—		n/m
Provision for loan losses		2,192			8,673			5,739			(6,481	)		-74.7	%		(3,547	)		-61.8	%
Charge-offs		(16,509	)		(7,017	)		(12,075	)		(9,492	)	n/m				(4,434	)		-36.7	%
Recoveries		4,733			2,880			2,737			1,853			64.3	%		1,996			72.9	%
Net (charge-offs) recoveries		(11,776	)		(4,137	)		(9,338	)		(7,639	)	n/m				(2,438	)		-26.1	%
Ending Balance	$	79,290		$	88,874		$	76,733		$	(9,584	)		-10.8	%	$	2,557			3.3	%
PROVISION FOR LOAN LOSSES (1)
Alabama	$	(346	)	$	593		$	559		$	(939	)	n/m			$	(905	)	n/m
Florida		(160	)		(431	)		(1,235	)		271			62.9	%		1,075			87.0	%
Mississippi (2)		(3,594	)		(1,630	)		2,779			(1,964	)	n/m				(6,373	)	n/m
Tennessee (3)		3,039			8,100			(439	)		(5,061	)		-62.5	%		3,478		n/m
Texas		3,253			2,041			4,075			1,212			59.4	%		(822	)		-20.2	%
Total provision for loan losses	$	2,192		$	8,673		$	5,739		$	(6,481	)		-74.7	%	$	(3,547	)		-61.8	%
NET CHARGE-OFFS (RECOVERIES) (1)
Alabama	$	203		$	198		$	196		$	5			2.5	%	$	7			3.6	%
Florida		(238	)		(586	)		(946	)		348			59.4	%		708			74.8	%
Mississippi (2)		(1,873	)		4,677			5,574			(6,550	)	n/m				(7,447	)	n/m
Tennessee (3)		7,875			(96	)		79			7,971		n/m				7,796		n/m
Texas		5,809			(56	)		4,435			5,865		n/m				1,374			31.0	%
Total net charge-offs (recoveries)	$	11,776		$	4,137		$	9,338		$	7,639		n/m			$	2,438			26.1	%
(1) - Excludes acquired loans.
(2) - Mississippi includes Central and Southern Mississippi Regions.
(3) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.
(4) - The allowance for loan losses balance related to the remaining loans acquired in the Bay Bank merger, which were transferred from acquired impaired loans to         LHFI during the second quarter of 2018, and the remaining loans acquired in the Heritage acquisition and the Reliance merger, which were transferred from         acquired impaired loans to LHFI during the third quarter of 2018.
n/m - percentage changes greater than +/- 100% are considered not meaningful

See Notes to Consolidated Financials

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	CONSOLIDATED FINANCIAL INFORMATION
	December 31, 2018
	($ in thousands)
	(unaudited)

	Quarter Ended															Year Ended
AVERAGE BALANCES	12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017			12/31/2018			12/31/2017
Securities AFS-taxable	$	1,847,421		$	1,937,807		$	2,038,759		$	2,141,144		$	2,247,247		$	1,990,332		$	2,296,070
Securities AFS-nontaxable		38,821			41,889			50,035			57,972			61,691			47,112			73,373
Securities HTM-taxable		893,186			933,294			972,571			1,005,721			1,045,723			950,836			1,091,108
Securities HTM-nontaxable		29,143			29,183			30,337			32,734			32,781			30,336			32,874
Total securities		2,808,571			2,942,173			3,091,702			3,237,571			3,387,442			3,018,616			3,493,425
Loans (including loans held for sale)		8,933,501			8,907,588			8,707,466			8,636,967			8,686,916			8,797,498			8,412,673
Acquired loans		127,747			147,811			202,140			243,152			273,918			179,808			284,898
Fed funds sold and rev repos		843			477			1,063			478			1,724			716			2,229
Other earning assets		200,282			189,471			186,224			213,985			80,218			197,431			80,468
Total earning assets		12,070,944			12,187,520			12,188,595			12,332,153			12,430,218			12,194,069			12,273,693
Allowance for loan losses		(85,842	)		(86,496	)		(86,315	)		(82,304	)		(86,704	)		(85,252	)		(84,708	)
Cash and due from banks		339,605			330,949			319,075			336,642			315,586			331,574			311,642
Other assets		1,023,226			1,035,327			1,042,156			1,030,738			1,192,464			1,032,846			1,215,019
Total assets	$	13,347,933		$	13,467,300		$	13,463,511		$	13,617,229		$	13,851,564		$	13,473,237		$	13,715,646
Interest-bearing demand deposits	$	2,722,841		$	2,602,658		$	2,439,777		$	2,404,428		$	2,244,625		$	2,543,463		$	2,114,475
Savings deposits		3,565,682			3,722,533			3,860,096			3,737,507			3,291,407			3,720,987			3,308,027
Time deposits		1,892,983			1,851,866			1,798,855			1,748,645			1,756,576			1,823,562			1,730,569
Total interest-bearing deposits		8,181,506			8,177,057			8,098,728			7,890,580			7,292,608			8,088,012			7,153,071
Fed funds purchased and repos		340,094			347,489			352,256			277,877			475,850			329,649			512,085
Short-term borrowings		89,364			186,293			248,932			751,219			1,276,543			316,775			1,138,353
Long-term FHLB advances		888			903			921			938			954			912			97,561
Junior subordinated debt securities		61,856			61,856			61,856			61,856			61,856			61,856			61,856
Total interest-bearing liabilities		8,673,708			8,773,598			8,762,693			8,982,470			9,107,811			8,797,204			8,962,926
Noninterest-bearing deposits		2,862,161			2,894,061			2,930,726			2,881,374			2,994,292			2,892,033			3,028,982
Other liabilities		216,932			202,053			188,186			180,871			169,828			197,123			162,854
Total liabilities		11,752,801			11,869,712			11,881,605			12,044,715			12,271,931			11,886,360			12,154,762
Shareholders' equity		1,595,132			1,597,588			1,581,906			1,572,514			1,579,633			1,586,877			1,560,884
Total liabilities and equity	$	13,347,933		$	13,467,300		$	13,463,511		$	13,617,229		$	13,851,564		$	13,473,237		$	13,715,646

See Notes to Consolidated Financials

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	CONSOLIDATED FINANCIAL INFORMATION
	December 31, 2018
	($ in thousands)
	(unaudited)

PERIOD END BALANCES	12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017
Cash and due from banks	$	349,561		$	432,471		$	387,119		$	315,276		$	335,768
Fed funds sold and rev repos		830			1,000			—			112			615
Securities available for sale		1,811,813			1,864,633			1,974,675			2,097,497			2,238,635
Securities held to maturity		909,643			943,883			985,845			1,023,975			1,056,486
Loans held for sale (LHFS)		153,799			182,664			196,217			163,882			180,512
Loans held for investment (LHFI)		8,835,868			8,747,030			8,678,983			8,513,985			8,569,967
Allowance for loan losses, LHFI		(79,290	)		(88,874	)		(83,566	)		(81,235	)		(76,733	)
Net LHFI		8,756,578			8,658,156			8,595,417			8,432,750			8,493,234
Acquired loans		106,932			132,615			173,107			215,476			261,517
Allowance for loan losses, acquired loans		(1,231	)		(1,714	)		(3,046	)		(4,294	)		(4,079	)
Net acquired loans		105,701			130,901			170,061			211,182			257,438
Net LHFI and acquired loans		8,862,279			8,789,057			8,765,478			8,643,932			8,750,672
Premises and equipment, net		178,668			178,739			177,686			178,584			179,339
Mortgage servicing rights		95,596			101,374			97,411			94,850			84,269
Goodwill		379,627			379,627			379,627			379,627			379,627
Identifiable intangible assets		11,112			12,391			13,677			14,963			16,360
Other real estate		34,668			36,475			39,667			39,554			43,228
Other assets		498,864			517,498			507,863			511,187			532,442
Total assets	$	13,286,460		$	13,439,812		$	13,525,265		$	13,463,439		$	13,797,953
Deposits:
Noninterest-bearing	$	2,937,594		$	2,786,539		$	2,958,354		$	3,004,442		$	2,978,074
Interest-bearing		8,426,817			8,170,371			8,114,081			7,971,359			7,599,438
Total deposits		11,364,411			10,956,910			11,072,435			10,975,801			10,577,512
Fed funds purchased and repos		50,471			486,865			477,891			274,833			469,827
Short-term borrowings		79,006			190,023			186,647			442,689			971,049
Long-term FHLB advances		879			896			913			929			946
Junior subordinated debt securities		61,856			61,856			61,856			61,856			61,856
Other liabilities		138,384			143,658			141,451			137,194			145,062
Total liabilities		11,695,007			11,840,208			11,941,193			11,893,302			12,226,252
Common stock		13,717			14,089			14,089			14,121			14,115
Capital surplus		309,545			362,868			361,715			366,021			369,124
Retained earnings		1,323,870			1,302,593			1,282,007			1,257,881			1,228,187
Accum other comprehensive loss, net of tax		(55,679	)		(79,946	)		(73,739	)		(67,886	)		(39,725	)
Total shareholders' equity		1,591,453			1,599,604			1,584,072			1,570,137			1,571,701
Total liabilities and equity	$	13,286,460		$	13,439,812		$	13,525,265		$	13,463,439		$	13,797,953

See Notes to Consolidated Financials

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	CONSOLIDATED FINANCIAL INFORMATION
	December 31, 2018
	($ in thousands except per share data)
	(unaudited)

	Quarter Ended														Year Ended
INCOME STATEMENTS	12/31/2018			9/30/2018			6/30/2018			3/31/2018		12/31/2017			12/31/2018			12/31/2017
Interest and fees on LHFS & LHFI-FTE	$	107,709		$	105,993		$	99,761		$	94,712	$	95,816		$	408,175		$	362,795
Interest and fees on acquired loans		3,183			4,033			5,022			4,877		6,401			17,115			24,478
Interest on securities-taxable		15,496			16,186			16,894			17,506		18,327			66,082			76,192
Interest on securities-tax exempt-FTE		617			656			733			824		1,035			2,830			4,617
Interest on fed funds sold and rev repos		4			3			5			2		7			14			33
Other interest income		1,158			1,050			1,054			934		473			4,196			1,466
Total interest income-FTE		128,167			127,921			123,469			118,855		122,059			498,412			469,581
Interest on deposits		17,334			14,972			12,139			9,491		7,284			53,936			22,717
Interest on fed funds pch and repos		1,528			1,348			1,250			662		1,116			4,788			4,152
Other interest expense		894			1,467			1,713			3,394		4,555			7,468			15,376
Total interest expense		19,756			17,787			15,102			13,547		12,955			66,192			42,245
Net interest income-FTE		108,411			110,134			108,367			105,308		109,104			432,220			427,336
Provision for loan losses, LHFI		2,192			8,673			3,167			3,961		5,739			17,993			15,094
Provision for loan losses, acquired loans		(247	)		(467	)		(441	)		150		(1,573	)		(1,005	)		(7,395	)
Net interest income after provision-FTE		106,466			101,928			105,641			101,197		104,938			415,232			419,637
Service charges on deposit accounts		11,123			11,075			10,647			10,857		11,193			43,702			44,003
Bank card and other fees		7,750			7,459			7,070			6,626		7,266			28,905			28,286
Mortgage banking, net		5,716			8,647			9,046			11,265		6,284			34,674			29,902
Insurance commissions		9,562			10,765			10,735			9,419		8,813			40,481			38,168
Wealth management		7,504			7,789			7,478			7,567		7,723			30,338			30,340
Other, net		1,904			1,358			2,415			1,059		2,681			6,736			13,949
Nonint inc-excl sec gains (losses), net		43,559			47,093			47,391			46,793		43,960			184,836			184,648
Security gains (losses), net		—			—			—			—		—			—			15
Total noninterest income		43,559			47,093			47,391			46,793		43,960			184,836			184,663
Salaries and employee benefits		58,736			60,847			59,975			58,475		58,820			238,033			229,265
Defined benefit plan termination		—			—			—			—		—			—			17,644
Services and fees		17,910			16,404			16,322			15,746		15,419			66,382			60,893
Net occupancy-premises		6,741			6,910			6,550			6,502		6,617			26,703			25,767
Equipment expense		6,329			6,200			6,202			6,099		5,996			24,830			24,453
Other real estate expense, net		61			1,168			(93	)		866		666			2,002			3,672
FDIC assessment expense		1,897			1,999			2,538			2,995		2,868			9,429			11,010
Other expense		12,253			11,695			12,306			11,782		12,565			48,036			57,465
Total noninterest expense		103,927			105,223			103,800			102,465		102,951			415,415			430,169
Income before income taxes and tax eq adj		46,098			43,798			49,232			45,525		45,947			184,653			174,131
Tax equivalent adjustment		3,231			3,151			3,203			3,215		5,060			12,800			19,786
Income before income taxes		42,867			40,647			46,029			42,310		40,887			171,853			154,345
Income taxes		6,179			4,394			6,216			5,480		25,119			22,269			48,715
Net income	$	36,688		$	36,253		$	39,813		$	36,830	$	15,768		$	149,584		$	105,630
Per share data
Earnings per share - basic	$	0.55		$	0.54		$	0.59		$	0.54	$	0.23		$	2.22		$	1.56
Earnings per share - diluted	$	0.55		$	0.54		$	0.59		$	0.54	$	0.23		$	2.21		$	1.56
Dividends per share	$	0.23		$	0.23		$	0.23		$	0.23	$	0.23		$	0.92		$	0.92
Weighted average shares outstanding
Basic		66,839,504			67,621,345			67,758,097			67,809,234		67,742,792			67,504,701			67,727,219
Diluted		67,028,978			67,796,346			67,907,267			67,960,583		67,938,986			67,658,984			67,886,805
Period end shares outstanding		65,834,395			67,621,369			67,621,111			67,775,068		67,746,094			65,834,395			67,746,094

See Notes to Consolidated Financials

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	CONSOLIDATED FINANCIAL  INFORMATION
	December 31, 2018
	($ in thousands)
	(unaudited)

	Quarter Ended
NONPERFORMING ASSETS (1)	12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017
Nonaccrual loans
Alabama	$	3,361		$	3,953		$	3,685		$	3,121		$	3,083
Florida		1,175			1,180			2,978			2,116			3,034
Mississippi (2)		44,331			41,351			39,006			48,600			49,129
Tennessee (3)		8,696			13,195			5,338			5,530			4,436
Texas		4,061			8,157			10,356			9,329			7,893
Total nonaccrual loans		61,624			67,836			61,363			68,696			67,575
Other real estate
Alabama		6,873			7,526			8,290			8,962			11,714
Florida		8,771			8,931			9,789			12,550			13,937
Mississippi (2)		17,255			18,191			19,358			15,737			14,260
Tennessee (3)		1,025			1,083			1,486			1,523			2,535
Texas		744			744			744			782			782
Total other real estate		34,668			36,475			39,667			39,554			43,228
Total nonperforming assets	$	96,292		$	104,311		$	101,030		$	108,250		$	110,803
LOANS PAST DUE OVER 90 DAYS (1)
LHFI	$	856		$	726		$	529		$	1,419		$	2,171
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)	$	37,384		$	34,115		$	34,693		$	34,826		$	35,544
	Quarter Ended															Year Ended
ALLOWANCE FOR LOAN LOSSES(1)	12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017			12/31/2018			12/31/2017
Beginning Balance	$	88,874		$	83,566		$	81,235		$	76,733		$	80,332		$	76,733		$	71,265
Transfers (4)		—			772			782			—			—			1,554			—
Provision for loan losses		2,192			8,673			3,167			3,961			5,739			17,993			15,094
Charge-offs		(16,509	)		(7,017	)		(3,421	)		(2,542	)		(12,075	)		(29,489	)		(21,147	)
Recoveries		4,733			2,880			1,803			3,083			2,737			12,499			11,521
Net (charge-offs) recoveries		(11,776	)		(4,137	)		(1,618	)		541			(9,338	)		(16,990	)		(9,626	)
Ending Balance	$	79,290		$	88,874		$	83,566		$	81,235		$	76,733		$	79,290		$	76,733
PROVISION FOR LOAN LOSSES (1)
Alabama	$	(346	)	$	593		$	434		$	618		$	559		$	1,299		$	3,832
Florida		(160	)		(431	)		(811	)		(863	)		(1,235	)		(2,265	)		(2,951	)
Mississippi (2)		(3,594	)		(1,630	)		2,768			2,664			2,779			208			8,733
Tennessee (3)		3,039			8,100			82			(268	)		(439	)		10,953			19
Texas		3,253			2,041			694			1,810			4,075			7,798			5,461
Total provision for loan losses	$	2,192		$	8,673		$	3,167		$	3,961		$	5,739		$	17,993		$	15,094
NET CHARGE-OFFS (RECOVERIES) (1)
Alabama	$	203		$	198		$	112		$	84		$	196		$	597		$	547
Florida		(238	)		(586	)		(122	)		(960	)		(946	)		(1,906	)		(2,870	)
Mississippi (2)		(1,873	)		4,677			1,705			267			5,574			4,776			7,355
Tennessee (3)		7,875			(96	)		70			109			79			7,958			393
Texas		5,809			(56	)		(147	)		(41	)		4,435			5,565			4,201
Total net charge-offs (recoveries)	$	11,776		$	4,137		$	1,618		$	(541	)	$	9,338		$	16,990		$	9,626
(1) - Excludes acquired loans.
(2) - Mississippi includes Central and Southern Mississippi Regions.
(3) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.
(4) - The allowance for loan losses balance related to the remaining loans acquired in the Bay Bank merger, which were transferred from acquired         impaired loans to LHFI during the second quarter of 2018, and the remaining loans acquired in the Heritage acquisition and the Reliance         merger, which were transferred from acquired impaired loans to LHFI during the third quarter of 2018.

See Notes to Consolidated Financials

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	CONSOLIDATED FINANCIAL  INFORMATION
	December 31, 2018
	(unaudited)

	Quarter Ended															Year Ended
FINANCIAL RATIOS AND OTHER DATA	12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017			12/31/2018			12/31/2017
Return on equity		9.12	%		9.00	%		10.09	%		9.50	%		3.96	%		9.43	%		6.77	%
Return on average tangible equity		12.41	%		12.26	%		13.77	%		13.05	%		5.60	%		12.86	%		9.39	%
Return on assets		1.09	%		1.07	%		1.19	%		1.10	%		0.45	%		1.11	%		0.77	%
Interest margin - Yield - FTE		4.21	%		4.16	%		4.06	%		3.91	%		3.90	%		4.09	%		3.83	%
Interest margin - Cost		0.65	%		0.58	%		0.50	%		0.45	%		0.41	%		0.54	%		0.34	%
Net interest margin - FTE		3.56	%		3.59	%		3.57	%		3.46	%		3.48	%		3.54	%		3.48	%
Efficiency ratio (1)		66.62	%		65.19	%		64.90	%		65.50	%		65.21	%		65.55	%		65.37	%
Full-time equivalent employees		2,856			2,889			2,890			2,905			2,893
CREDIT QUALITY RATIOS (2)
Net charge-offs/average loans		0.52	%		0.18	%		0.07	%		-0.03	%		0.43	%		0.19	%		0.11	%
Provision for loan losses/average loans		0.10	%		0.39	%		0.15	%		0.19	%		0.26	%		0.20	%		0.18	%
Nonperforming loans/total loans (incl LHFS)		0.69	%		0.76	%		0.69	%		0.79	%		0.77	%
Nonperforming assets/total loans (incl LHFS)		1.07	%		1.17	%		1.14	%		1.25	%		1.27	%
Nonperforming assets/total loans (incl LHFS) +ORE		1.07	%		1.16	%		1.13	%		1.24	%		1.26	%
ALL/total loans (excl LHFS)		0.90	%		1.02	%		0.96	%		0.95	%		0.90	%
ALL-commercial/total commercial loans		0.99	%		1.13	%		1.05	%		1.04	%		0.95	%
ALL-consumer/total consumer and home mortgage loans		0.57	%		0.63	%		0.63	%		0.64	%		0.68	%
ALL/nonperforming loans		128.67	%		131.01	%		136.18	%		118.25	%		113.55	%
ALL/nonperforming loans (excl specifically reviewed impaired loans)		350.77	%		339.79	%		345.87	%		314.28	%		320.84	%
CAPITAL RATIOS
Total equity/total assets		11.98	%		11.90	%		11.71	%		11.66	%		11.39	%
Tangible equity/tangible assets		9.31	%		9.26	%		9.07	%		9.00	%		8.77	%
Tangible equity/risk-weighted assets		11.11	%		11.31	%		11.20	%		11.25	%		11.13	%
Tier 1 leverage ratio (3)		10.26	%		10.41	%		10.22	%		9.96	%		9.67	%
Common equity tier 1 capital ratio (3)		11.77	%		12.20	%		12.01	%		12.05	%		11.77	%
Tier 1 risk-based capital ratio (3)		12.33	%		12.76	%		12.58	%		12.62	%		12.33	%
Total risk-based capital ratio (3)		13.07	%		13.61	%		13.39	%		13.44	%		13.10	%
STOCK PERFORMANCE
Market value-Close	$	28.43		$	33.65		$	32.63		$	31.16		$	31.86
Book value	$	24.17		$	23.66		$	23.43		$	23.17		$	23.20
Tangible book value	$	18.24		$	17.86		$	17.61		$	17.34		$	17.35
(1) - The efficiency ratio is noninterest expense to total net interest income (FTE) and noninterest income, excluding security gains (losses), amortization
of partnership tax credits, amortization of purchased intangibles, and significant non-routine income and expense items .
(2) - Excludes acquired loans.
(3) - The regulatory capital ratios for December 31, 2017 contain a reclassification adjustment of $8.5 million from AOCI to retained earnings as allowed         by regulatory agencies in an interagency statement released January 18, 2018 to address disproportionate tax effect in AOCI resulting from the         recent enactment of the Tax Cuts and Jobs Act of 2017 and the application of Financial Accounting Standards Board Accounting Standards         Codification Topic 740, Income Taxes.

See Notes to Consolidated Financials

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIALS
	December 31, 2018
	($ 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):

	12/31/2018		9/30/2018		6/30/2018		3/31/2018		12/31/2017
SECURITIES AVAILABLE FOR SALE
U.S. Government agency obligations
Issued by U.S. Government agencies	$	30,335	$	32,371	$	36,414	$	40,381	$	45,285
Obligations of states and political subdivisions		50,676		57,264		65,348		75,013		79,229
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA		67,494		65,847		60,245		62,457		65,746
Issued by FNMA and FHLMC		666,684		684,474		727,433		767,676		814,450
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		811,601		840,073		897,652		954,537		1,016,790
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		185,023		184,604		187,583		197,433		217,135
Total securities available for sale	$	1,811,813	$	1,864,633	$	1,974,675	$	2,097,497	$	2,238,635
SECURITIES HELD TO MATURITY
U.S. Government agency obligations
Issued by U.S. Government sponsored agencies	$	3,736	$	3,725	$	3,714	$	3,703	$	3,692
Obligations of states and political subdivisions		35,783		42,623		42,458		46,011		46,039
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA		12,090		12,316		12,756		12,974		13,539
Issued by FNMA and FHLMC		115,133		119,040		123,377		128,517		133,975
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		578,827		600,635		627,470		653,325		678,926
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		164,074		165,544		176,070		179,445		180,315
Total securities held to maturity	$	909,643	$	943,883	$	985,845	$	1,023,975	$	1,056,486

At December 31, 2018, the net unamortized, unrealized loss included in accumulated other comprehensive loss in the accompanying balance sheet for securities held to maturity previously transferred from securities available for sale totaled approximately $15.7 million ($11.8 million, net of tax).

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 97% of the portfolio in GSE-backed obligations and other Aaa rated securities as determined by Moody’s. None of the securities owned by Trustmark are collateralized by assets which are considered sub-prime. Furthermore, outside of stock ownership in the Federal Home Loan Bank of Dallas, Federal Home Loan Bank of Atlanta and Federal Reserve Bank, Trustmark does not hold any other equity investment in a GSE.

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIALS
	December 31, 2018
	($ in thousands)
	(unaudited)

Note 2 – Loan Composition

LHFI BY TYPE (excluding acquired loans)	12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017
Loans secured by real estate:
Construction, land development and other land loans	$	1,056,601		$	1,031,491		$	1,038,745		$	986,188		$	987,624
Secured by 1-4 family residential properties		1,825,492			1,801,029			1,742,496			1,698,885			1,675,311
Secured by nonfarm, nonresidential properties		2,220,914			2,294,289			2,321,734			2,257,899			2,193,823
Other real estate secured		543,820			453,687			397,538			425,664			517,956
Commercial and industrial loans		1,538,715			1,565,922			1,572,764			1,561,967			1,570,345
Consumer loans		182,448			182,709			175,261			168,469			171,918
State and other political subdivision loans		973,818			929,178			925,452			936,014			952,483
Other loans		494,060			488,725			504,993			478,899			500,507
LHFI		8,835,868			8,747,030			8,678,983			8,513,985			8,569,967
Allowance for loan losses		(79,290	)		(88,874	)		(83,566	)		(81,235	)		(76,733	)
Net LHFI	$	8,756,578		$	8,658,156		$	8,595,417		$	8,432,750		$	8,493,234

ACQUIRED LOANS BY TYPE	12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017
Loans secured by real estate:
Construction, land development and other land loans	$	5,878		$	6,657		$	11,900		$	17,575		$	23,586
Secured by 1-4 family residential properties		22,556			25,274			36,419			49,289			61,751
Secured by nonfarm, nonresidential properties		47,979			66,865			85,117			100,285			114,694
Other real estate secured		8,253			8,507			9,862			14,581			16,746
Commercial and industrial loans		15,267			16,610			20,485			21,808			31,506
Consumer loans		1,356			1,514			1,700			1,920			2,600
Other loans		5,643			7,188			7,624			10,018			10,634
Acquired loans		106,932			132,615			173,107			215,476			261,517
Allowance for loan losses, acquired loans		(1,231	)		(1,714	)		(3,046	)		(4,294	)		(4,079	)
Net acquired loans	$	105,701		$	130,901		$	170,061		$	211,182		$	257,438

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIALS
	December 31, 2018
	($ in thousands)
	(unaudited)

Note 2 – Loan Composition (continued)

	December 31, 2018
LHFI - COMPOSITION BY REGION (1)	Total		Alabama		Florida		Mississippi (Central and Southern Regions)		Tennessee (Memphis, TN and NorthernMS Regions)		Texas
Loans secured by real estate:
Construction, land development and other land loans	$	1,056,601	$	360,363	$	88,170	$	303,166	$	19,512	$	285,390
Secured by 1-4 family residential properties		1,825,492		112,659		48,538		1,566,004		84,187		14,104
Secured by nonfarm, nonresidential properties		2,220,914		517,407		224,110		891,780		154,576		433,041
Other real estate secured		543,820		107,585		11,652		265,024		11,296		148,263
Commercial and industrial loans		1,538,715		203,322		17,912		784,265		354,131		179,085
Consumer loans		182,448		23,450		5,285		131,902		19,641		2,170
State and other political subdivision loans		973,818		89,244		41,979		601,579		30,201		210,815
Other loans		494,060		70,254		17,085		321,480		42,338		42,903
Loans	$	8,835,868	$	1,484,284	$	454,731	$	4,865,200	$	715,882	$	1,315,771
CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION(1)
Lots	$	63,092	$	15,956	$	20,124	$	21,699	$	1,617	$	3,696
Development		62,467		8,711		8,726		32,275		695		12,060
Unimproved land		101,885		19,318		15,810		32,660		12,895		21,202
1-4 family construction		223,427		92,661		11,303		88,929		1,398		29,136
Other construction		605,730		223,717		32,207		127,603		2,907		219,296
Construction, land development and other land loans	$	1,056,601	$	360,363	$	88,170	$	303,166	$	19,512	$	285,390
LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION(1)
Non-owner occupied:
Retail	$	367,722	$	133,354	$	53,685	$	99,728	$	25,273	$	55,682
Office		231,642		75,179		20,623		85,040		7,848		42,952
Nursing homes/senior living		191,042		40,316		—		144,602		6,124		—
Hotel/motel		247,276		65,020		54,287		52,197		33,735		42,037
Mini-storage		100,078		11,779		6,056		35,756		606		45,881
Industrial		97,998		21,836		9,479		15,001		1,466		50,216
Health care		44,155		14,623		1,439		26,059		—		2,034
Convenience stores		30,549		3,163		—		16,600		730		10,056
Other		61,875		7,573		8,423		13,279		6,939		25,661
Total non-owner occupied loans		1,372,337		372,843		153,992		488,262		82,721		274,519
Owner-occupied:
Office		157,762		33,428		26,123		54,448		6,591		37,172
Churches		91,542		19,046		6,611		45,426		15,839		4,620
Industrial warehouses		137,681		11,473		3,819		54,853		13,235		54,301
Health care		107,489		23,758		6,278		61,094		2,762		13,597
Convenience stores		113,378		14,526		12,803		62,101		1,206		22,742
Retail		85,025		24,664		7,619		32,491		3,858		16,393
Restaurants		52,002		4,100		1,512		27,368		17,021		2,001
Auto dealerships		31,895		8,144		319		14,428		9,004		—
Other		71,803		5,425		5,034		51,309		2,339		7,696
Total owner-occupied loans		848,577		144,564		70,118		403,518		71,855		158,522
Loans secured by nonfarm, nonresidential properties	$	2,220,914	$	517,407	$	224,110	$	891,780	$	154,576	$	433,041

(1) Excludes acquired loans.

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIALS
	December 31, 2018
	($ in thousands)
	(unaudited)

Note 3 – 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															Year Ended
	12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017			12/31/2018			12/31/2017
Securities – taxable		2.24	%		2.24	%		2.25	%		2.26	%		2.21	%		2.25	%		2.25	%
Securities – nontaxable		3.60	%		3.66	%		3.66	%		3.68	%		4.35	%		3.65	%		4.35	%
Securities – total		2.28	%		2.27	%		2.29	%		2.30	%		2.27	%		2.28	%		2.31	%
Loans - LHFI & LHFS		4.78	%		4.72	%		4.60	%		4.45	%		4.38	%		4.64	%		4.31	%
Acquired loans		9.89	%		10.82	%		9.96	%		8.13	%		9.27	%		9.52	%		8.59	%
Loans - total		4.86	%		4.82	%		4.72	%		4.55	%		4.53	%		4.74	%		4.45	%
FF sold & rev repo		1.88	%		2.50	%		1.89	%		1.70	%		1.61	%		1.96	%		1.48	%
Other earning assets		2.29	%		2.20	%		2.27	%		1.77	%		2.34	%		2.13	%		1.82	%
Total earning assets		4.21	%		4.16	%		4.06	%		3.91	%		3.90	%		4.09	%		3.83	%
Interest-bearing deposits		0.84	%		0.73	%		0.60	%		0.49	%		0.40	%		0.67	%		0.32	%
FF pch & repo		1.78	%		1.54	%		1.42	%		0.97	%		0.93	%		1.45	%		0.81	%
Other borrowings		2.33	%		2.34	%		2.20	%		1.69	%		1.35	%		1.97	%		1.18	%
Total interest-bearing liabilities		0.90	%		0.80	%		0.69	%		0.61	%		0.56	%		0.75	%		0.47	%
Net interest margin		3.56	%		3.59	%		3.57	%		3.46	%		3.48	%		3.54	%		3.48	%
Net interest margin excluding acquired loans		3.50	%		3.50	%		3.46	%		3.37	%		3.35	%		3.46	%		3.36	%

Reflected in the table above are yields on earning assets and liabilities, along with the net interest margin which equals reported net interest income-FTE, annualized, as a percent of average earning assets. In addition, the table includes net interest margin excluding acquired loans, which equals reported net interest income-FTE excluding interest income on acquired loans, annualized, as a percent of average earning assets excluding average acquired loans.  

During the fourth quarter of 2018, the yield on acquired loans totaled 9.89% and included $1.1 million in recoveries from the settlement of debt, which represented approximately 3.52% of the annualized total acquired loan yield.  Excluding acquired loans, the net interest margin remained flat at 3.50% for the fourth quarter of 2018 when compared to the third quarter of 2018, as growth in the yield on the loans held for investment and held for sale portfolio, runoff of maturing investment securities, and favorable funding mix were offset by higher costs of interest-bearing deposits.

Note 4 – Mortgage Banking

Trustmark utilizes a portfolio of exchange-traded derivative instruments, such as Treasury note futures contracts and option contracts, to achieve a fair value return that offsets the changes in fair value of mortgage servicing rights (MSR) attributable to interest rates.  These transactions are considered freestanding derivatives that do not otherwise qualify for hedge accounting under generally accepted accounting principles (GAAP).  Changes in the fair value of these exchange-traded derivative instruments, including administrative costs, are recorded in noninterest income in mortgage banking, net and are offset by the changes in the fair value of the MSR.  The MSR fair value represents the present value of future cash flows, which among other things includes decay and the effect of changes in interest rates.  Ineffectiveness of hedging the MSR fair value is measured by comparing the change in value of hedge instruments to the change in the fair value of the MSR asset attributable to changes in interest rates and other market driven changes in valuation inputs and assumptions.  

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

	Quarter Ended															Year Ended
	12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017			12/31/2018			12/31/2017
Mortgage servicing income, net	$	5,730		$	5,428		$	5,502		$	5,588		$	5,471		$	22,248		$	21,663
Change in fair value-MSR from runoff		(2,752	)		(3,181	)		(3,334	)		(2,507	)		(2,605	)		(11,774	)		(10,780	)
Gain on sales of loans, net		5,206			6,411			5,414			4,585			5,300			21,616			18,934
Other, net		(1,393	)		(83	)		1,365			295			(1,120	)		184			(169	)
Mortgage banking income before hedge ineffectiveness		6,791			8,575			8,947			7,961			7,046			32,274			29,648
Change in fair value-MSR from market changes		(6,537	)		2,615			1,743			9,521			1,168			7,342			(1,050	)
Change in fair value of derivatives		5,462			(2,543	)		(1,644	)		(6,217	)		(1,930	)		(4,942	)		1,304
Net positive (negative) hedge ineffectiveness		(1,075	)		72			99			3,304			(762	)		2,400			254
Mortgage banking, net	$	5,716		$	8,647		$	9,046		$	11,265		$	6,284		$	34,674		$	29,902

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIALS
	December 31, 2018
	($ in thousands)
	(unaudited)

Note 5 – Other Noninterest Income and Expense

Other noninterest income consisted of the following for the periods presented ($ in thousands):

	Quarter Ended															Year Ended
	12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017			12/31/2018			12/31/2017
Partnership amortization for tax credit purposes	$	(2,101	)	$	(2,202	)	$	(2,202	)	$	(2,202	)	$	(2,478	)	$	(8,707	)	$	(9,560	)
Increase in life insurance cash surrender value		1,808			1,805			1,770			1,738			1,816			7,121			7,125
Other miscellaneous income		2,197			1,755			2,847			1,523			3,343			8,322			16,384
Total other, net	$	1,904		$	1,358		$	2,415		$	1,059		$	2,681		$	6,736		$	13,949

Trustmark invests in partnerships that provide income tax credits on a Federal and/or State basis (i.e., new market tax credits, low income housing tax credits and historical tax credits). The income tax credits related to these partnerships are utilized as specifically allowed by income tax law and are recorded as a reduction in income tax expense.

Trustmark received $24 thousand, $13 thousand and $1.2 million of nontaxable proceeds related to bank-owned life insurance during the fourth quarter of 2018, the third quarter of 2018 and the second quarter of 2018, respectively.  Trustmark received no nontaxable proceeds related to bank-owned life insurance during the first quarter of 2018 compared to $1.7 million during the fourth quarter of 2017.  These proceeds were recorded in other miscellaneous income in the table above.  

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

	Quarter Ended										Year Ended
	12/31/2018		9/30/2018		6/30/2018		3/31/2018		12/31/2017		12/31/2018		12/31/2017
Loan expense	$	2,425	$	2,824	$	3,046	$	2,791	$	2,276	$	11,086	$	10,908
Amortization of intangibles		1,279		1,286		1,286		1,397		1,522		5,248		6,169
Defined benefit plans non-service cost reclass from salaries    and employee benefits		885		885		885		885		968		3,540		5,722
Other miscellaneous expense		7,664		6,700		7,089		6,709		7,799		28,162		34,666
Total other expense	$	12,253	$	11,695	$	12,306	$	11,782	$	12,565	$	48,036	$	57,465

Trustmark adopted ASU 2017-07, “Compensation-Retirement Benefits (Topic 715)-Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” effective January 1, 2018 and was required to reclassify the defined benefit plans non-service cost from salaries and employee benefits to other expense on the consolidated statements of income for each period presented.  

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIALS
	December 31, 2018
	($ in thousands)
	(unaudited)

Note 6 – Income Taxes

The income tax provision consisted of the following for the periods presented ($ in thousands):

	Quarter Ended											Year Ended
	12/31/2018		9/30/2018		6/30/2018		3/31/2018		12/31/2017			12/31/2018		12/31/2017
Current	$	51	$	2,782	$	5,516	$	2,180	$	3,850		$	10,529	$	22,646
Deferred		6,128		1,612		700		3,300		4,300			11,740		9,100
Elimination of deferred tax valuation allowance		—		—		—		—		(8,650	)		—		(8,650	)
Income tax provision before re-measurement		6,179		4,394		6,216		5,480		(500	)		22,269		23,096
Re-measurement of net deferred tax assets		—		—		—		—		25,619			—		25,619
Income tax provision	$	6,179	$	4,394	$	6,216	$	5,480	$	25,119		$	22,269	$	48,715

During 2013, a deferred tax valuation allowance was created as a result of Trustmark’s merger with BancTrust Financial Group, Inc. and was established to reduce deferred tax assets to the amount that was more likely than not to be realized in future years.  Trustmark has continually evaluated this allowance since inception and, based on the weight of the available evidence, has determined that the deferred tax assets will not be subject to the limitations on the deductibility of built-in losses (Internal Revenue Service Code, Section 382) in future years.  Therefore, during the fourth quarter of 2017, the valuation allowance was eliminated creating a decrease in deferred income tax expense of $8.7 million.

Following the recent enactment of the Tax Reform Act which resulted in the reduction of the corporate federal income tax rate, Trustmark re-measured its net deferred tax assets and recorded an increase in deferred income tax expense of $25.6 million during the fourth quarter of 2017.  

Note 7 – Non-GAAP Financial Measures

In addition to capital ratios defined by U.S. 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.  In Management’s experience, many stock analysts use tangible common equity measures in conjunction with more traditional bank capital ratios to compare capital adequacy of banking organizations with significant amounts of goodwill or other tangible assets, typically stemming from the use of the purchase accounting method in accounting for mergers and acquisitions.

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.  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.  The following table reconciles Trustmark’s calculation of these measures to amounts reported under GAAP.

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIALS
	December 31, 2018
	($ in thousands except per share data)
	(unaudited)

Note 7 – Non-GAAP Financial Measures (continued)

		Quarter Ended															Year Ended
		12/31/2018			9/30/2018			6/30/2018			3/31/2018			12/31/2017			12/31/2018			12/31/2017
TANGIBLE EQUITY
AVERAGE BALANCES
Total shareholders' equity		$	1,595,132		$	1,597,588		$	1,581,906		$	1,572,514		$	1,579,633		$	1,586,877		$	1,560,884
Less:  Goodwill			(379,627	)		(379,627	)		(379,627	)		(379,627	)		(379,627	)		(379,627	)		(375,947	)
Identifiable intangible assets			(11,811	)		(13,083	)		(14,380	)		(15,782	)		(17,196	)		(13,751	)		(18,885	)
Total average tangible equity		$	1,203,694		$	1,204,878		$	1,187,899		$	1,177,105		$	1,182,810		$	1,193,499		$	1,166,052
PERIOD END BALANCES
Total shareholders' equity		$	1,591,453		$	1,599,604		$	1,584,072		$	1,570,137		$	1,571,701
Less:  Goodwill			(379,627	)		(379,627	)		(379,627	)		(379,627	)		(379,627	)
Identifiable intangible assets			(11,112	)		(12,391	)		(13,677	)		(14,963	)		(16,360	)
Total tangible equity	(a)	$	1,200,714		$	1,207,586		$	1,190,768		$	1,175,547		$	1,175,714
TANGIBLE ASSETS
Total assets		$	13,286,460		$	13,439,812		$	13,525,265		$	13,463,439		$	13,797,953
Less:  Goodwill			(379,627	)		(379,627	)		(379,627	)		(379,627	)		(379,627	)
Identifiable intangible assets			(11,112	)		(12,391	)		(13,677	)		(14,963	)		(16,360	)
Total tangible assets	(b)	$	12,895,721		$	13,047,794		$	13,131,961		$	13,068,849		$	13,401,966
Risk-weighted assets	(c)	$	10,803,313		$	10,681,621		$	10,633,646		$	10,449,352		$	10,566,818
NET INCOME ADJUSTED FOR INTANGIBLE AMORTIZATION
Net income		$	36,688		$	36,253		$	39,813		$	36,830		$	15,768		$	149,584		$	105,630
Plus: Intangible amortization net of tax			959			965			965			1,049			940			3,938			3,810
Net income adjusted for intangible amortization		$	37,647		$	37,218		$	40,778		$	37,879		$	16,708		$	153,522		$	109,440
Period end common shares outstanding	(d)		65,834,395			67,621,369			67,621,111			67,775,068			67,746,094
TANGIBLE COMMON EQUITY MEASUREMENTS
Return on average tangible equity (1)			12.41	%		12.26	%		13.77	%		13.05	%		5.60	%		12.86	%		9.39	%
Tangible equity/tangible assets	(a)/(b)		9.31	%		9.26	%		9.07	%		9.00	%		8.77	%
Tangible equity/risk-weighted assets	(a)/(c)		11.11	%		11.31	%		11.20	%		11.25	%		11.13	%
Tangible book value	(a)/(d)*1,000	$	18.24		$	17.86		$	17.61		$	17.34		$	17.35
COMMON EQUITY TIER 1 CAPITAL (CET1)
Total shareholders' equity		$	1,591,453		$	1,599,604		$	1,584,072		$	1,570,137		$	1,571,701
AOCI-related adjustments (3)			55,679			79,946			73,739			67,886			48,248
CET1 adjustments and deductions:
Goodwill net of associated deferred tax liabilities (DTLs)			(365,779	)		(365,823	)		(366,036	)		(366,248	)		(366,461	)
Other adjustments and deductions for CET1 (2)			(9,815	)		(10,868	)		(14,204	)		(12,233	)		(10,248	)
CET1  capital	(e)		1,271,538			1,302,859			1,277,571			1,259,542			1,243,240
Additional tier 1 capital instruments plus related surplus			60,000			60,000			60,000			60,000			60,000
Less:  additional tier 1 capital deductions			—			—			—			(714	)		(2	)
Additional tier 1 capital			60,000			60,000			60,000			59,286			59,998
Tier 1 capital		$	1,331,538		$	1,362,859		$	1,337,571		$	1,318,828		$	1,303,238
Common equity tier 1 capital ratio	(e)/(c)		11.77	%		12.20	%		12.01	%		12.05	%		11.77	%

(1) Calculation = ((net income adjusted for intangible amortization/number of days in period)*number of days in year)/total average tangible equity

(2) Includes other intangible assets, net of DTLs, disallowed deferred tax assets (DTAS), threshold deductions and transition adjustments, as applicable.

(3) The December 31, 2017 amount contains a reclassification adjustment of $8.5 million from AOCI to retained earnings as allowed by regulatory agencies in an interagency statement released January 18, 2018 to address disproportionate tax effect in AOCI resulting from the recent enactment of the Tax Cuts and Jobs Act of 2017 and the application of Financial Accounting Standards Board Accounting Standards Codification Topic 740, Income Taxes.

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIALS
	December 31, 2018
	($ in thousands except per share data)
	(unaudited)

Note 7 – Non-GAAP Financial Measures (continued)

Trustmark discloses certain non-GAAP financial measures, including net income adjusted for significant non-routine transactions, because Management uses these measures for business planning purposes, including to manage Trustmark’s business against internal projected results of operations and to measure Trustmark’s performance. Trustmark views net income adjusted for significant non-routine transactions as a measure of our core operating business, which excludes the impact of the items detailed below, as these items are generally not operational in nature. This non-GAAP measure also provides another basis for comparing period-to-period results as presented in the accompanying selected financial data table and the audited consolidated financial statements by excluding potential differences caused by non-operational and unusual or non-recurring items. Readers are cautioned that these adjustments are not permitted under GAAP. Trustmark encourages readers to consider its consolidated financial statements and the notes related thereto in their entirety, and not to rely on any single financial measure.

The following table presents adjustments to net income and select financial ratios as reported in accordance with GAAP resulting from significant non-routine items occurring during the periods presented ($ in thousands, except per share data):

	Quarter Ended											Year Ended
	12/31/2018					12/31/2017						12/31/2018					12/31/2017
	Amount			Diluted EPS		Amount			Diluted EPS			Amount			Diluted EPS		Amount			Diluted EPS
Net Income (GAAP)	$	36,688			0.547	$	15,768		$	0.232		$	149,584		$	2.211	$	105,630		$	1.556
Significant non-routine transactions (net of taxes):
Re-measurement of net deferred taxes		—			—		25,619			0.377			—			—		25,619			0.377
Elimination of deferred tax valuation allowance		—			—		(8,650	)		(0.127	)		—			—		(8,650	)		(0.127	)
Defined benefit plan termination		—			—		—			—			—			—		10,895			0.160
Reliance merger transaction expenses		—			—		—			—			—			—		1,999			0.029
Gain on life insurance proceeds		—			—		—			—			—			—		(4,894	)		(0.072	)
Net Income adjusted for significant
non-routine transactions (Non-GAAP)	$	36,688		$	0.547	$	32,737		$	0.482		$	149,584		$	2.211	$	130,599		$	1.923
	Reported			Adjusted		Reported			Adjusted			Reported			Adjusted		Reported			Adjusted
	(GAAP)			(Non-GAAP)		(GAAP)			(Non-GAAP)			(GAAP)			(Non-GAAP)		(GAAP)			(Non-GAAP)
Return on equity		9.12	%	n/a			3.96	%		8.22	%		9.43	%	n/a			6.77	%		8.37	%
Return on average tangible equity		12.41	%	n/a			5.60	%		11.30	%		12.86	%	n/a			9.39	%		11.53	%
Return on assets		1.09	%	n/a			0.45	%		0.94	%		1.11	%	n/a			0.77	%		0.95	%
n/a - not applicable