Trustmark (TRMK) 8-K Trustmark Corporation Announces First Quarter 2020 Financial Results

Exhibit 99.1

News Release

Trustmark Corporation Announces First Quarter 2020 Financial Results

Position of strength and stability allows for proactive response

to COVID-19 pandemic

JACKSON, Miss. – April 28, 2020 – Trustmark Corporation (Nasdaq:TRMK) reported net income of $22.2 million in the first quarter of 2020, representing diluted earnings per share of $0.35.  During the first quarter, the provision and expense for credit losses totaled $27.4 million, primarily due to the impact of the COVID-19 pandemic on expected credit losses.  This increased provision and expense for credit losses reduced after-tax net income by approximately $0.32 per diluted share.  First quarter results also include a one-time, pre-tax charge of $4.4 million related to a voluntary early retirement program which reduced earnings by $0.05 per diluted share.  In addition, Trustmark reported positive net mortgage servicing hedge ineffectiveness of $9.9 million in the first quarter which increased earnings by $0.12 per diluted share.  

COVID-19 Response

Gerard R. Host, President and CEO, stated, “Trustmark has been proactive in responding to the COVID-19 pandemic, and we are taking comprehensive action to support customers, associates and the communities we serve.  We remain committed to serving customers as our branches continue to offer drive-thru service, our ATM and ITM network remains accessible and our robust digital and mobile banking options provide additional convenience for our customers.  Approximately 45% of Trustmark associates are working remotely, and essential employees in our offices are taking additional precautions to stay safe and healthy.  We are working with customers to provide flexibility in these uncertain circumstances, and we are serving our local economies by participating in the SBA’s Paycheck Protection Program.  SBA commitments were secured for approximately 6,000 requests totaling over $800 million with an average loan size of $137 thousand, and we continue to assist customers in completing applications for the Paycheck Protection Program.  We are committed to doing everything in our power to ensure the safety of our customers and associates and support our local economies through these challenging times.”

First Quarter Highlights

• Maintained strong capital position with CET1 ratio of 11.35% and total risk-based capital ratio of 12.78%

• Reported solid growth in fee businesses with linked quarter increases of 61.2% in mortgage banking revenue (before hedge ineffectiveness), 23.3% in insurance commissions and 10.0% in wealth management revenue

• Pre-tax, pre-provision income totaled $56.6 million, a linked-quarter increase of 31.1% and year-over-year increase of 40.4%

Mr. Host stated, “For over 130 years, we have been committed to meeting the banking and financial needs of our customers and communities.  During the COVID-19 pandemic, we remain focused on providing support, advice and solutions to meet our customers’ unique needs.  Trustmark entered this crisis from a position of strength and stability with a solid capital base and ample liquidity.  During the first quarter, we experienced strong growth in our fee businesses and posted increases in both loan and deposit balances.  I would like to thank our dedicated associates for working diligently in these unprecedented circumstances to serve our customers.  Trustmark has weathered many storms over the years, and we remain well-positioned to continue serving customers and creating long-term value for shareholders.”

Balance Sheet Management

• Loans held for investment (excluding loans reclassified from acquired loans) increased 1.7% linked-quarter and total deposits increased 2.9% from the prior quarter

• Maintained strong capital position significantly above regulatory levels necessary to be considered “well-capitalized”

• Suspended share repurchase program on March 9, 2020, to maintain flexibility through the COVID-19 pandemic

Loans held for investment totaled $9.6 billion at March 31, 2020, reflecting an increase of 2.5% linked-quarter and 6.4% year-over-year.  During the first quarter of 2020, Trustmark reclassified $72.6 million of acquired loans to loans held for investment with the adoption of FASB ASC Topic 326, “Financial Instruments – Credit Losses.”  Excluding this reclassification, loans held for investment increased $159.7 million, or 1.7%, from the prior quarter and $500.3 million, or 5.6%, from the comparable period one year earlier.  

The linked-quarter growth reflects increases in other real estate secured loans and loans secured by nonfarm, nonresidential properties, which were principally the result of the migration of construction loans as projects were completed.  Trustmark’s loan portfolio is diversified by loan type and geography.

Deposits totaled $11.6 billion at March 31, 2020, up $330.2 million, or 2.9%, from the prior quarter.  Trustmark maintains a strong liquidity position as loans held for investment represented 82.7% of total deposits at March 31, 2020.  Interest-bearing deposit costs totaled 0.71% for the first quarter, a decrease of 14 basis points linked-quarter.  Trustmark continues to maintain an attractive, low-cost deposit base with approximately 59% of deposit balances in checking accounts.  The total cost of interest-bearing liabilities was 0.75% for the first quarter of 2020, a decrease of 13 basis points from the prior quarter.  

During the first quarter, Trustmark repurchased $27.5 million, or approximately 887 thousand of its common shares in open market transactions.  On March 9, 2020, Trustmark suspended its share repurchase program to ensure ample capital to support customers during the COVID-19 pandemic.  Trustmark’s capital position remained solid, reflecting the strength and diversity of its financial services businesses.  At March 31, 2020, Trustmark’s tangible equity to tangible assets ratio was 9.27%, while the total risk-based capital ratio was 12.78%.  Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable June 15, 2020, to shareholders of record on June 1, 2020.  

Credit Quality

• Adopted current expected credit loss (CECL) methodology for estimating credit losses effective January 1, 2020

• Allowance for credit losses (ACL) represented 468.8% of nonperforming loans, excluding individually evaluated loans

• Nonperforming assets declined 5.6% from the prior quarter and 12.1% year-over-year, reflecting decreases in both nonperforming loans and other real estate

Effective January 1, 2020, Trustmark adopted the CECL methodology for estimating credit losses, which resulted in a net $26.6 million increase for credit losses primarily due to the creation of reserves for unfunded commitments.  This one-time cumulative adjustment resulted in an after-tax decrease of $19.9 million in retained earnings.  Primarily due to economic uncertainties related to the COVID-19 pandemic, Trustmark increased its provision for credit losses by $20.6 million and its credit loss expense related to off-balance sheet credit exposures by $6.8 million, resulting in total credit loss expenses of $27.4 million in the quarter.

Allocation of Trustmark's $100.6 million allowance for credit losses on loans held for investment represented 0.97% of commercial loans and 1.35% of consumer and home mortgage loans, resulting in an allowance to total loans held for investment of 1.05% at March 31, 2020, representing a level management considers commensurate with the present risk in the loan portfolio.  

Nonperforming loans totaled $53.0 million at March 31, 2020, down $234 thousand from the prior quarter and $3.4 million year-over-year.  Other real estate totaled $24.8 million, reflecting a $4.4 million decrease from the prior quarter and down $7.3 million from the prior year.  Collectively, nonperforming assets totaled $77.8 million, reflecting a linked-quarter decrease of $4.6 million and a year-over-year decrease of $10.7 million.

Revenue Generation

• Revenue in the first quarter totaled $169.2 million, up 10.5% from the prior quarter

• Mortgage banking revenue before hedge ineffectiveness was $17.6 million in the first quarter, a linked-quarter increase of 61.2%

• Insurance commissions increased 23.3% from the prior quarter, and wealth management revenue rose 10.0% over the same period

Revenue in the first quarter totaled $169.2 million, up 10.5% from the prior quarter and up 15.7% from the same quarter in the prior year.  The linked-quarter and year-over-year increases primarily reflect higher mortgage banking revenue as well as higher insurance commissions and wealth management revenue.  Net interest income (FTE) in the first quarter totaled $107.1 million, resulting in a net interest margin of 3.52%, down 4 basis points from the prior quarter.  Relative to the prior quarter, net interest income (FTE) decreased $1.7 million as a $4.3 million reduction in interest income more than offset a $2.6 million reduction in interest expense.  

Noninterest income in the first quarter totaled $65.3 million, an increase of $17.7 million from the prior quarter and an increase of $23.8 million year-over-year.  The linked-quarter change primarily reflects a $19.6 million increase in mortgage banking revenue.  Mortgage banking revenue in the first quarter included $9.9 million in positive net hedge ineffectiveness.  Mortgage loan production in the first quarter totaled $457.2 million, down 8.3% linked-quarter and up 61.3% year-over-year.  Gain on sale of loans, net totaled $14.3 million in the first quarter, up $6.4 million from the prior quarter. Mortgage banking revenue totaled $27.5 million in the first quarter.

Insurance revenue totaled $11.6 million in the first quarter, up 23.3%, or $2.2 million, from the fourth quarter of 2019 and 6.2%, or $679 thousand, year-over-year.  The linked-quarter and year-over-year increases primarily reflect growth in property and casualty commissions.  Wealth management revenue in the first quarter totaled $8.5 million, an increase of $774 thousand, or 10.0%, from the prior quarter.  The growth reflects both higher trust management fees and brokerage and investment services revenue.  

Bank card and other fees decreased $2.8 million, or 34.6%, from the prior quarter and $1.8 million, or 25.5%, year-over-year, reflecting lower customer derivative revenue.  Service charges on deposit accounts experienced a seasonal decrease of $862 thousand, or 7.9%, from the prior quarter and $233 thousand, or 2.3%, year-over-year.  

Noninterest Expense

• Core noninterest expense totaled $110.2 million in the first quarter of 2020, an increase of 2.5% from the prior quarter

• Completed voluntary early retirement program

• Continued to realign delivery channels to reflect changing customer preferences

During the first quarter, Trustmark completed a voluntary early retirement program.  Of those eligible for the program, 107 associates, or 3.8% of the workforce, retired by March 31, 2020.  A one-time, pre-tax charge of $4.4 million related to this program was incurred during the first quarter, reflecting $4.3 million in salaries and employee benefits and $102 thousand in other expense.  The result of this program is expected to produce pre-tax savings of approximately $2.9 million for the remainder of 2020 and $4.0 million for 2021.

Salaries and employee benefits – excluding $4.3 million of the voluntary early retirement charge – totaled $64.9 million, an increase of 4.1% from the prior quarter.  The increase primarily reflects higher insurance commissions and a seasonal increase in payroll taxes.  Services and fees rose $430 thousand linked-quarter, and other real estate expense, net decreased $197 thousand linked-quarter.  

Trustmark remains focused on optimizing its delivery channels and reallocating resources to reflect changing customer preferences.  In the first quarter of 2020, Trustmark closed five branches as customers continued to migrate to mobile and digital banking channels and embraced the convenience of remote options.  Trustmark remains committed to investments that promote profitable revenue growth, reengineering processes to enhance operational efficiency, realigning delivery channels to support changing customer preferences and managing the franchise for the long-term.

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, April 29, 2020 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 Wednesday, May 13, 2020, in archived format at the same web address or by calling (877) 344-7529, passcode 10142197.

Trustmark is a financial services company providing banking and financial solutions through 188 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,” “project,” “potential,” “seek,” “continue,” “could,” “would,” “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 any or all of our business, results of operations financial condition and liquidity. 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. Furthermore, many of these risks and uncertainties are currently amplified by and may continue to be amplified by or may, in the future, be amplified by, the novel coronavirus (COVID-19) pandemic, and also by the effectiveness of varying governmental responses in ameliorating the impact of the pandemic on our customers and the economies where they operate.

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, an increase in unemployment levels and slowdowns in economic growth, the effects of the COVID-19 pandemic on the domestic and global economy, as well as the effectiveness of actions of federal, state and local governments and agencies (including the Board of Governors of the Federal Reserve Board (FRB) to mitigate its spread and economic impact, local, state and national economic and market conditions, 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, levels of and volatility in 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 related 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, particularly with respect to the COVID-19 pandemic, 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,  pandemics or other health crises, acts of war or terrorism, and other risks described in our filings with the Securities and Exchange Commission (SEC).

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
	March 31, 2020
	($ in thousands)
	(unaudited)

										Linked Quarter						Year over Year
QUARTERLY AVERAGE BALANCES	3/31/2020			12/31/2019			3/31/2019			$ Change			% Change			$ Change			% Change
Securities AFS-taxable	$	1,620,422		$	1,551,358		$	1,753,268		$	69,064			4.5	%	$	(132,846	)		-7.6	%
Securities AFS-nontaxable		22,056			23,300			40,159			(1,244	)		-5.3	%		(18,103	)		-45.1	%
Securities HTM-taxable		694,740			734,474			866,665			(39,734	)		-5.4	%		(171,925	)		-19.8	%
Securities HTM-nontaxable		25,673			25,703			28,710			(30	)		-0.1	%		(3,037	)		-10.6	%
Total securities		2,362,891			2,334,835			2,688,802			28,056			1.2	%		(325,911	)		-12.1	%
Loans (including loans held for sale) (1)		9,678,174			9,467,437			9,038,204			210,737			2.2	%		639,970			7.1	%
Acquired loans (1)		—			77,797			104,316			(77,797	)		-100.0	%		(104,316	)		-100.0	%
Fed funds sold and rev repos		164			184			277			(20	)		-10.9	%		(113	)		-40.8	%
Other earning assets		187,327			227,116			243,493			(39,789	)		-17.5	%		(56,166	)		-23.1	%
Total earning assets		12,228,556			12,107,369			12,075,092			121,187			1.0	%		153,464			1.3	%
Allowance for credit losses (ACL), loans held    for investment (LHFI) (1)		(85,015	)		(86,211	)		(82,227	)		1,196			1.4	%		(2,788	)		-3.4	%
Other assets		1,498,725			1,445,075			1,447,611			53,650			3.7	%		51,114			3.5	%
Total assets	$	13,642,266		$	13,466,233		$	13,440,476		$	176,033			1.3	%	$	201,790			1.5	%
Interest-bearing demand deposits	$	3,184,134		$	3,167,256		$	2,899,467		$	16,878			0.5	%	$	284,667			9.8	%
Savings deposits		3,646,936			3,448,899			3,786,835			198,037			5.7	%		(139,899	)		-3.7	%
Time deposits		1,617,307			1,663,741			1,881,556			(46,434	)		-2.8	%		(264,249	)		-14.0	%
Total interest-bearing deposits		8,448,377			8,279,896			8,567,858			168,481			2.0	%		(119,481	)		-1.4	%
Fed funds purchased and repos		247,513			164,754			84,352			82,759			50.2	%		163,161		n/m
Other borrowings		85,279			79,512			90,804			5,767			7.3	%		(5,525	)		-6.1	%
Junior subordinated debt securities		61,856			61,856			61,856			—			0.0	%		—			0.0	%
Total interest-bearing liabilities		8,843,025			8,586,018			8,804,870			257,007			3.0	%		38,155			0.4	%
Noninterest-bearing deposits		2,910,951			3,017,824			2,824,220			(106,873	)		-3.5	%		86,731			3.1	%
Other liabilities		248,220			205,786			221,199			42,434			20.6	%		27,021			12.2	%
Total liabilities		12,002,196			11,809,628			11,850,289			192,568			1.6	%		151,907			1.3	%
Shareholders' equity		1,640,070			1,656,605			1,590,187			(16,535	)		-1.0	%		49,883			3.1	%
Total liabilities and equity	$	13,642,266		$	13,466,233		$	13,440,476		$	176,033			1.3	%	$	201,790			1.5	%
(1) See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.
n/m - percentage changes greater than +/- 100% are considered not meaningful

See Notes to Consolidated Financials

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	CONSOLIDATED FINANCIAL INFORMATION
	March 31, 2020
	($ in thousands)
	(unaudited)

										Linked Quarter						Year over Year
PERIOD END BALANCES	3/31/2020			12/31/2019			3/31/2019			$ Change			% Change			$ Change			% Change
Cash and due from banks	$	404,341		$	358,916		$	454,047		$	45,425			12.7	%	$	(49,706	)		-10.9	%
Fed funds sold and rev repos		2,000			—			—			2,000		n/m				2,000		n/m
Securities available for sale		1,833,779			1,602,404			1,723,445			231,375			14.4	%		110,334			6.4	%
Securities held to maturity		704,276			738,099			884,319			(33,823	)		-4.6	%		(180,043	)		-20.4	%
Loans held for sale (LHFS)		325,389			226,347			172,683			99,042			43.8	%		152,706			88.4	%
Loans held for investment (LHFI) (1)		9,567,920			9,335,628			8,995,014			232,292			2.5	%		572,906			6.4	%
ACL LHFI (1)		(100,564	)		(84,277	)		(79,005	)		(16,287	)		-19.3	%		(21,559	)		-27.3	%
Net LHFI		9,467,356			9,251,351			8,916,009			216,005			2.3	%		551,347			6.2	%
Acquired loans (1)		—			72,601			93,201			(72,601	)		-100.0	%		(93,201	)		-100.0	%
Allowance for loan losses, acquired loans (1)		—			(815	)		(1,297	)		815			100.0	%		1,297			100.0	%
Net acquired loans		—			71,786			91,904			(71,786	)		-100.0	%		(91,904	)		-100.0	%
Net LHFI and acquired loans		9,467,356			9,323,137			9,007,913			144,219			1.5	%		459,443			5.1	%
Premises and equipment, net		190,179			189,791			189,743			388			0.2	%		436			0.2	%
Mortgage servicing rights		56,437			79,394			86,842			(22,957	)		-28.9	%		(30,405	)		-35.0	%
Goodwill		381,717			379,627			379,627			2,090			0.6	%		2,090			0.6	%
Identifiable intangible assets		7,537			7,343			10,092			194			2.6	%		(2,555	)		-25.3	%
Other real estate		24,847			29,248			32,139			(4,401	)		-15.0	%		(7,292	)		-22.7	%
Operating lease right-of-use assets		30,839			31,182			33,861			(343	)		-1.1	%		(3,022	)		-8.9	%
Other assets		591,132			532,389			503,306			58,743			11.0	%		87,826			17.4	%
Total assets	$	14,019,829		$	13,497,877		$	13,478,017		$	521,952			3.9	%	$	541,812			4.0	%
Deposits:
Noninterest-bearing	$	2,977,058		$	2,891,215		$	2,867,778		$	85,843			3.0	%	$	109,280			3.8	%
Interest-bearing		8,598,706			8,354,342			8,667,037			244,364			2.9	%		(68,331	)		-0.8	%
Total deposits		11,575,764			11,245,557			11,534,815			330,207			2.9	%		40,949			0.4	%
Fed funds purchased and repos		421,821			256,020			46,867			165,801			64.8	%		374,954		n/m
Other borrowings		84,230			85,396			83,265			(1,166	)		-1.4	%		965			1.2	%
Junior subordinated debt securities		61,856			61,856			61,856			—			0.0	%		—			0.0	%
ACL on off-balance sheet credit exposures (1)		36,421			—			—			36,421		n/m				36,421		n/m
Operating lease liabilities		32,055			32,354			34,921			(299	)		-0.9	%		(2,866	)		-8.2	%
Other liabilities		155,283			155,992			129,265			(709	)		-0.5	%		26,018			20.1	%
Total liabilities		12,367,430			11,837,175			11,890,989			530,255			4.5	%		476,441			4.0	%
Common stock		13,209			13,376			13,499			(167	)		-1.2	%		(290	)		-2.1	%
Capital surplus		229,403			256,400			272,268			(26,997	)		-10.5	%		(42,865	)		-15.7	%
Retained earnings		1,402,089			1,414,526			1,342,176			(12,437	)		-0.9	%		59,913			4.5	%
Accum other comprehensive income (loss), net of    tax		7,698			(23,600	)		(40,915	)		31,298		n/m				48,613		n/m
Total shareholders' equity		1,652,399			1,660,702			1,587,028			(8,303	)		-0.5	%		65,371			4.1	%
Total liabilities and equity	$	14,019,829		$	13,497,877		$	13,478,017		$	521,952			3.9	%	$	541,812			4.0	%
(1) See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.
n/m - percentage changes greater than +/- 100% are considered not meaningful

See Notes to Consolidated Financials

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	CONSOLIDATED FINANCIAL INFORMATION
	March 31, 2020
	($ in thousands except per share data)
	(unaudited)

	Quarter Ended								Linked Quarter						Year over Year
INCOME STATEMENTS	3/31/2020			12/31/2019			3/31/2019		$ Change			% Change			$ Change			% Change
Interest and fees on LHFS & LHFI-FTE	$	109,357		$	111,383		$	109,890	$	(2,026	)		-1.8	%	$	(533	)		-0.5	%
Interest and fees on acquired loans (1)		—			2,138			1,916		(2,138	)		-100.0	%		(1,916	)		-100.0	%
Interest on securities-taxable		12,948			12,884			14,665		64			0.5	%		(1,717	)		-11.7	%
Interest on securities-tax exempt-FTE		457			484			646		(27	)		-5.6	%		(189	)		-29.3	%
Interest on fed funds sold and rev repos		—			1			2		(1	)		-100.0	%		(2	)		-100.0	%
Other interest income		740			896			1,603		(156	)		-17.4	%		(863	)		-53.8	%
Total interest income-FTE		123,502			127,786			128,722		(4,284	)		-3.4	%		(5,220	)		-4.1	%
Interest on deposits		14,957			17,716			19,570		(2,759	)		-15.6	%		(4,613	)		-23.6	%
Interest on fed funds pch and repos		625			504			288		121			24.0	%		337		n/m
Other interest expense		860			826			825		34			4.1	%		35			4.2	%
Total interest expense		16,442			19,046			20,683		(2,604	)		-13.7	%		(4,241	)		-20.5	%
Net interest income-FTE		107,060			108,740			108,039		(1,680	)		-1.5	%		(979	)		-0.9	%
Provision for credit losses, LHFI (1)		20,581			3,661			1,611		16,920		n/m				18,970		n/m
Provision for loan losses, acquired loans (1)		—			(2	)		78		2			100.0	%		(78	)		-100.0	%
Net interest income after provision-FTE		86,479	��		105,081			106,350		(18,602	)		-17.7	%		(19,871	)		-18.7	%
Service charges on deposit accounts		10,032			10,894			10,265		(862	)		-7.9	%		(233	)		-2.3	%
Bank card and other fees		5,355			8,192			7,191		(2,837	)		-34.6	%		(1,836	)		-25.5	%
Mortgage banking, net		27,483			7,914			3,442		19,569		n/m				24,041		n/m
Insurance commissions		11,550			9,364			10,871		2,186			23.3	%		679			6.2	%
Wealth management		8,537			7,763			7,483		774			10.0	%		1,054			14.1	%
Other, net		2,307			3,451			2,239		(1,144	)		-33.1	%		68			3.0	%
Nonint inc-excl sec gains (losses), net		65,264			47,578			41,491		17,686			37.2	%		23,773			57.3	%
Security gains (losses), net		—			—			—		—		n/m				—		n/m
Total noninterest income		65,264			47,578			41,491		17,686			37.2	%		23,773			57.3	%
Salaries and employee benefits		69,148			62,319			60,954		6,829			11.0	%		8,194			13.4	%
Services and fees		19,930			19,500			16,968		430			2.2	%		2,962			17.5	%
Net occupancy-premises		6,286			6,461			6,454		(175	)		-2.7	%		(168	)		-2.6	%
Equipment expense		5,616			5,880			5,924		(264	)		-4.5	%		(308	)		-5.2	%
Other real estate expense, net		1,294			1,491			1,752		(197	)		-13.2	%		(458	)		-26.1	%
Credit loss expense related to off-balance sheet    credit exposures (1)		6,783			—			—		6,783		n/m				6,783		n/m
Other expense		14,753			14,376			13,969		377			2.6	%		784			5.6	%
Total noninterest expense		123,810			110,027			106,021		13,783			12.5	%		17,789			16.8	%
Income before income taxes and tax eq adj		27,933			42,632			41,820		(14,699	)		-34.5	%		(13,887	)		-33.2	%
Tax equivalent adjustment		3,108			3,149			3,231		(41	)		-1.3	%		(123	)		-3.8	%
Income before income taxes		24,825			39,483			38,589		(14,658	)		-37.1	%		(13,764	)		-35.7	%
Income taxes		2,607			5,537			5,250		(2,930	)		-52.9	%		(2,643	)		-50.3	%
Net income	$	22,218		$	33,946		$	33,339	$	(11,728	)		-34.5	%	$	(11,121	)		-33.4	%
Per share data
Earnings per share - basic	$	0.35		$	0.53		$	0.51	$	(0.18	)		-34.0	%	$	(0.16	)		-31.4	%
Earnings per share - diluted	$	0.35		$	0.53		$	0.51	$	(0.18	)		-34.0	%	$	(0.16	)		-31.4	%
Dividends per share	$	0.23		$	0.23		$	0.23		—			0.0	%		—			0.0	%
Weighted average shares outstanding
Basic		63,756,629			64,255,716			65,239,470
Diluted		63,913,603			64,435,276			65,378,500
Period end shares outstanding		63,396,912			64,200,111			64,789,943
(1) See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.
n/m - percentage changes greater than +/- 100% are considered not meaningful

See Notes to Consolidated Financials

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	CONSOLIDATED FINANCIAL INFORMATION
	March 31, 2020
	($ in thousands)
	(unaudited)

	Quarter Ended									Linked Quarter						Year over Year
NONPERFORMING ASSETS (1)	3/31/2020			12/31/2019			3/31/2019			$ Change			% Change			$ Change			% Change
Nonaccrual loans
Alabama	$	4,769		$	1,870		$	2,971		$	2,899		n/m			$	1,798			60.5	%
Florida		254			267			408			(13	)		-4.9	%		(154	)		-37.7	%
Mississippi (2)		40,815			41,493			41,145			(678	)		-1.6	%		(330	)		-0.8	%
Tennessee (3)		6,153			8,980			8,806			(2,827	)		-31.5	%		(2,653	)		-30.1	%
Texas		1,001			616			3,093			385			62.5	%		(2,092	)		-67.6	%
Total nonaccrual loans		52,992			53,226			56,423			(234	)		-0.4	%		(3,431	)		-6.1	%
Other real estate
Alabama		6,229			8,133			6,878			(1,904	)		-23.4	%		(649	)		-9.4	%
Florida		4,835			5,877			8,120			(1,042	)		-17.7	%		(3,285	)		-40.5	%
Mississippi (2)		13,296			14,919			15,421			(1,623	)		-10.9	%		(2,125	)		-13.8	%
Tennessee (3)		487			319			994			168			52.7	%		(507	)		-51.0	%
Texas		—			—			726			—		n/m				(726	)		-100.0	%
Total other real estate		24,847			29,248			32,139			(4,401	)		-15.0	%		(7,292	)		-22.7	%
Total nonperforming assets	$	77,839		$	82,474		$	88,562		$	(4,635	)		-5.6	%	$	(10,723	)		-12.1	%
LOANS PAST DUE OVER 90 DAYS (1)
LHFI	$	708		$	642		$	670		$	66			10.3	%	$	38			5.7	%
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)	$	43,564		$	41,648		$	40,793		$	1,916			4.6	%	$	2,771			6.8	%
	Quarter Ended									Linked Quarter						Year over Year
ACL LHFI(1)(4)	3/31/2020			12/31/2019			3/31/2019			$ Change			% Change			$ Change			% Change
Beginning Balance	$	84,277		$	83,226		$	79,290		$	1,051			1.3	%	$	4,987			6.3	%
CECL adoption adjustments:
LHFI		(3,039	)		—			—			(3,039	)	n/m				(3,039	)	n/m
Acquired loan transfers		1,822			—			—			1,822		n/m				1,822		n/m
Provision for credit losses		20,581			3,661			1,611			16,920		n/m				18,970		n/m
Charge-offs		(5,545	)		(4,619	)		(4,033	)		(926	)		-20.0	%		(1,512	)		-37.5	%
Recoveries		2,468			2,009			2,137			459			22.8	%		331			15.5	%
Net (charge-offs) recoveries		(3,077	)		(2,610	)		(1,896	)		(467	)		-17.9	%		(1,181	)		-62.3	%
Ending Balance	$	100,564		$	84,277		$	79,005		$	16,287			19.3	%	$	21,559			27.3	%
NET (CHARGE-OFFS) RECOVERIES(1)
Alabama	$	(1,080	)	$	(132	)	$	(15	)	$	(948	)	n/m			$	(1,065	)	n/m
Florida		64			357			227			(293	)		-82.1	%		(163	)		-71.8	%
Mississippi (2)		126			(1,792	)		(2,130	)		1,918		n/m				2,256		n/m
Tennessee (3)		(2,186	)		(131	)		(50	)		(2,055	)	n/m				(2,136	)	n/m
Texas		(1	)		(912	)		72			911			99.9	%		(73	)	n/m
Total net (charge-offs) recoveries	$	(3,077	)	$	(2,610	)	$	(1,896	)	$	(467	)		-17.9	%	$	(1,181	)		-62.3	%
(1)  Excludes acquired loans.
(2)  Mississippi includes Central and Southern Mississippi Regions.
(3)  Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.
(4)  See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.
n/m - percentage changes greater than +/- 100% are considered not meaningful

See Notes to Consolidated Financials

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	CONSOLIDATED FINANCIAL INFORMATION
	March 31, 2020
	($ in thousands)
	(unaudited)

	Quarter Ended
AVERAGE BALANCES	3/31/2020			12/31/2019			9/30/2019			6/30/2019			3/31/2019
Securities AFS-taxable	$	1,620,422		$	1,551,358		$	1,570,803		$	1,661,464		$	1,753,268
Securities AFS-nontaxable		22,056			23,300			25,096			31,474			40,159
Securities HTM-taxable		694,740			734,474			778,098			821,357			866,665
Securities HTM-nontaxable		25,673			25,703			26,088			27,035			28,710
Total securities		2,362,891			2,334,835			2,400,085			2,541,330			2,688,802
Loans (including loans held for sale) (1)		9,678,174			9,467,437			9,436,287			9,260,028			9,038,204
Acquired loans (1)		—			77,797			82,641			91,217			104,316
Fed funds sold and rev repos		164			184			3,662			34,057			277
Other earning assets		187,327			227,116			176,163			316,604			243,493
Total earning assets		12,228,556			12,107,369			12,098,838			12,243,236			12,075,092
ACL LHFI (1)		(85,015	)		(86,211	)		(83,756	)		(81,996	)		(82,227	)
Other assets		1,498,725			1,445,075			1,447,977			1,467,462			1,447,611
Total assets	$	13,642,266		$	13,466,233		$	13,463,059		$	13,628,702		$	13,440,476
Interest-bearing demand deposits	$	3,184,134		$	3,167,256		$	3,085,758		$	3,048,876		$	2,899,467
Savings deposits		3,646,936			3,448,899			3,568,403			3,801,187			3,786,835
Time deposits		1,617,307			1,663,741			1,753,083			1,840,065			1,881,556
Total interest-bearing deposits		8,448,377			8,279,896			8,407,244			8,690,128			8,567,858
Fed funds purchased and repos		247,513			164,754			142,064			51,264			84,352
Other borrowings		85,279			79,512			78,404			81,352			90,804
Junior subordinated debt securities		61,856			61,856			61,856			61,856			61,856
Total interest-bearing liabilities		8,843,025			8,586,018			8,689,568			8,884,600			8,804,870
Noninterest-bearing deposits		2,910,951			3,017,824			2,932,754			2,898,266			2,824,220
Other liabilities		248,220			205,786			206,091			240,091			221,199
Total liabilities		12,002,196			11,809,628			11,828,413			12,022,957			11,850,289
Shareholders' equity		1,640,070			1,656,605			1,634,646			1,605,745			1,590,187
Total liabilities and equity	$	13,642,266		$	13,466,233		$	13,463,059		$	13,628,702		$	13,440,476
(1)  See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.

See Notes to Consolidated Financials

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	CONSOLIDATED FINANCIAL INFORMATION
	March 31, 2020
	($ in thousands)
	(unaudited)

PERIOD END BALANCES	3/31/2020			12/31/2019			9/30/2019			6/30/2019			3/31/2019
Cash and due from banks	$	404,341		$	358,916		$	486,263		$	404,413		$	454,047
Fed funds sold and rev repos		2,000			—			—			75,499			—
Securities available for sale		1,833,779			1,602,404			1,553,705			1,643,725			1,723,445
Securities held to maturity		704,276			738,099			785,422			825,536			884,319
Loans held for sale (LHFS)		325,389			226,347			292,800			240,380			172,683
Loans held for investment (LHFI) (1)		9,567,920			9,335,628			9,223,668			9,116,759			8,995,014
ACL LHFI (1)		(100,564	)		(84,277	)		(83,226	)		(80,399	)		(79,005	)
Net LHFI		9,467,356			9,251,351			9,140,442			9,036,360			8,916,009
Acquired loans (1)		—			72,601			81,004			87,884			93,201
Allowance for loan losses, acquired loans (1)		—			(815	)		(1,249	)		(1,398	)		(1,297	)
Net acquired loans		—			71,786			79,755			86,486			91,904
Net LHFI and acquired loans		9,467,356			9,323,137			9,220,197			9,122,846			9,007,913
Premises and equipment, net		190,179			189,791			188,423			189,820			189,743
Mortgage servicing rights		56,437			79,394			73,016			79,283			86,842
Goodwill		381,717			379,627			379,627			379,627			379,627
Identifiable intangible assets		7,537			7,343			8,345			9,101			10,092
Other real estate		24,847			29,248			31,974			31,243			32,139
Operating lease right-of-use assets		30,839			31,182			33,180			32,762			33,861
Other assets		591,132			532,389			531,834			514,723			503,306
Total assets	$	14,019,829		$	13,497,877		$	13,584,786		$	13,548,958		$	13,478,017
Deposits:
Noninterest-bearing	$	2,977,058		$	2,891,215		$	3,064,127		$	2,909,141		$	2,867,778
Interest-bearing		8,598,706			8,354,342			8,190,056			8,657,488			8,667,037
Total deposits		11,575,764			11,245,557			11,254,183			11,566,629			11,534,815
Fed funds purchased and repos		421,821			256,020			376,712			51,800			46,867
Other borrowings		84,230			85,396			76,685			79,012			83,265
Junior subordinated debt securities		61,856			61,856			61,856			61,856			61,856
ACL on off-balance sheet credit exposures (1)		36,421			—			—			—			—
Operating lease liabilities		32,055			32,354			34,319			33,878			34,921
Other liabilities		155,283			155,992			135,669			137,233			129,265
Total liabilities		12,367,430			11,837,175			11,939,424			11,930,408			11,890,989
Common stock		13,209			13,376			13,390			13,418			13,499
Capital surplus		229,403			256,400			257,370			260,619			272,268
Retained earnings		1,402,089			1,414,526			1,395,460			1,369,329			1,342,176
Accum other comprehensive income (loss), net of tax		7,698			(23,600	)		(20,858	)		(24,816	)		(40,915	)
Total shareholders' equity		1,652,399			1,660,702			1,645,362			1,618,550			1,587,028
Total liabilities and equity	$	14,019,829		$	13,497,877		$	13,584,786		$	13,548,958		$	13,478,017
(1)  See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.

See Notes to Consolidated Financials

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	CONSOLIDATED FINANCIAL INFORMATION
	March 31, 2020
	($ in thousands except per share data)
	(unaudited)

	Quarter Ended
INCOME STATEMENTS	3/31/2020		12/31/2019			9/30/2019			6/30/2019		3/31/2019
Interest and fees on LHFS & LHFI-FTE	$	109,357	$	111,383		$	116,432		$	114,873	$	109,890
Interest and fees on acquired loans (1)		—		2,138			2,309			2,010		1,916
Interest on securities-taxable		12,948		12,884			13,184			13,916		14,665
Interest on securities-tax exempt-FTE		457		484			485			551		646
Interest on fed funds sold and rev repos		—		1			23			214		2
Other interest income		740		896			1,044			1,820		1,603
Total interest income-FTE		123,502		127,786			133,477			133,384		128,722
Interest on deposits		14,957		17,716			20,385			21,500		19,570
Interest on fed funds pch and repos		625		504			547			81		288
Other interest expense		860		826			830			831		825
Total interest expense		16,442		19,046			21,762			22,412		20,683
Net interest income-FTE		107,060		108,740			111,715			110,972		108,039
Provision for credit losses, LHFI (1)		20,581		3,661			3,039			2,486		1,611
Provision for loan losses, acquired loans (1)		—		(2	)		(140	)		106		78
Net interest income after provision-FTE		86,479		105,081			108,816			108,380		106,350
Service charges on deposit accounts		10,032		10,894			11,065			10,379		10,265
Bank card and other fees		5,355		8,192			8,349			8,004		7,191
Mortgage banking, net		27,483		7,914			8,171			10,295		3,442
Insurance commissions		11,550		9,364			11,072			11,089		10,871
Wealth management		8,537		7,763			7,691			7,742		7,483
Other, net		2,307		3,451			1,989			2,130		2,239
Nonint inc-excl sec gains (losses), net		65,264		47,578			48,337			49,639		41,491
Security gains (losses), net		—		—			—			—		—
Total noninterest income		65,264		47,578			48,337			49,639		41,491
Salaries and employee benefits		69,148		62,319			62,495			61,949		60,954
Services and fees		19,930		19,500			18,838			18,009		16,968
Net occupancy-premises		6,286		6,461			6,831			6,403		6,454
Equipment expense		5,616		5,880			5,971			5,958		5,924
Other real estate expense, net		1,294		1,491			531			132		1,752
Credit loss expense related to off-balance sheet credit exposures (1)		6,783		—			—			—		—
Other expense		14,753		14,376			12,187			13,650		13,969
Total noninterest expense		123,810		110,027			106,853			106,101		106,021
Income before income taxes and tax eq adj		27,933		42,632			50,300			51,918		41,820
Tax equivalent adjustment		3,108		3,149			3,249			3,248		3,231
Income before income taxes		24,825		39,483			47,051			48,670		38,589
Income taxes		2,607		5,537			6,016			6,530		5,250
Net income	$	22,218	$	33,946		$	41,035		$	42,140	$	33,339
Per share data
Earnings per share - basic	$	0.35	$	0.53		$	0.64		$	0.65	$	0.51
Earnings per share - diluted	$	0.35	$	0.53		$	0.64		$	0.65	$	0.51
Dividends per share	$	0.23	$	0.23		$	0.23		$	0.23	$	0.23
Weighted average shares outstanding
Basic		63,756,629		64,255,716			64,358,540			64,677,889		65,239,470
Diluted		63,913,603		64,435,276			64,514,605			64,815,029		65,378,500
Period end shares outstanding		63,396,912		64,200,111			64,262,779			64,398,846		64,789,943
(1)  See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.

See Notes to Consolidated Financials

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	CONSOLIDATED FINANCIAL  INFORMATION
	March 31, 2020
	($ in thousands)
	(unaudited)

	Quarter Ended
NONPERFORMING ASSETS (1)	3/31/2020			12/31/2019			9/30/2019			6/30/2019			3/31/2019
Nonaccrual loans
Alabama	$	4,769		$	1,870		$	2,936		$	2,327		$	2,971
Florida		254			267			311			330			408
Mississippi (2)		40,815			41,493			43,895			39,373			41,145
Tennessee (3)		6,153			8,980			10,193			8,455			8,806
Texas		1,001			616			1,695			2,403			3,093
Total nonaccrual loans		52,992			53,226			59,030			52,888			56,423
Other real estate
Alabama		6,229			8,133			6,501			6,451			6,878
Florida		4,835			5,877			6,983			7,826			8,120
Mississippi (2)		13,296			14,919			17,646			15,511			15,421
Tennessee (3)		487			319			844			815			994
Texas		—			—			—			640			726
Total other real estate		24,847			29,248			31,974			31,243			32,139
Total nonperforming assets	$	77,839		$	82,474		$	91,004		$	84,131		$	88,562
LOANS PAST DUE OVER 90 DAYS (1)
LHFI	$	708		$	642		$	878		$	1,245		$	670
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)	$	43,564		$	41,648		$	36,445		$	38,355		$	40,793
	Quarter Ended
ACL LHFI(1)(4)	3/31/2020			12/31/2019			9/30/2019			6/30/2019			3/31/2019
Beginning Balance	$	84,277		$	83,226		$	80,399		$	79,005		$	79,290
CECL adoption adjustments:
LHFI		(3,039	)		—			—			—			—
Acquired loan transfers		1,822			—			—			—			—
Provision for credit losses		20,581			3,661			3,039			2,486			1,611
Charge-offs		(5,545	)		(4,619	)		(2,892	)		(2,937	)		(4,033	)
Recoveries		2,468			2,009			2,680			1,845			2,137
Net (charge-offs) recoveries		(3,077	)		(2,610	)		(212	)		(1,092	)		(1,896	)
Ending Balance	$	100,564		$	84,277		$	83,226		$	80,399		$	79,005
NET (CHARGE-OFFS) RECOVERIES (1)
Alabama	$	(1,080	)	$	(132	)	$	(329	)	$	(278	)	$	(15	)
Florida		64			357			136			130			227
Mississippi (2)		126			(1,792	)		391			(907	)		(2,130	)
Tennessee (3)		(2,186	)		(131	)		(483	)		(44	)		(50	)
Texas		(1	)		(912	)		73			7			72
Total net (charge-offs) recoveries	$	(3,077	)	$	(2,610	)	$	(212	)	$	(1,092	)	$	(1,896	)
(1)  Excludes acquired loans.
(2)  Mississippi includes Central and Southern Mississippi Regions.
(3)  Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.
(4)  See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.

See Notes to Consolidated Financials

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	CONSOLIDATED FINANCIAL  INFORMATION
	March 31, 2020
	(unaudited)

	Quarter Ended
FINANCIAL RATIOS AND OTHER DATA	3/31/2020			12/31/2019			9/30/2019			6/30/2019			3/31/2019
Return on equity		5.45	%		8.13	%		9.96	%		10.53	%		8.50	%
Return on average tangible equity		7.34	%		10.85	%		13.31	%		14.14	%		11.55	%
Return on assets		0.66	%		1.00	%		1.21	%		1.24	%		1.01	%
Interest margin - Yield - FTE		4.06	%		4.19	%		4.38	%		4.37	%		4.32	%
Interest margin - Cost		0.54	%		0.62	%		0.71	%		0.73	%		0.69	%
Net interest margin - FTE		3.52	%		3.56	%		3.66	%		3.64	%		3.63	%
Efficiency ratio (1)		63.50	%		68.08	%		64.98	%		64.55	%		68.08	%
Full-time equivalent employees		2,761			2,844			2,835			2,819			2,839
CREDIT QUALITY RATIOS (2)
Net charge-offs/average loans		0.13	%		0.11	%		0.01	%		0.05	%		0.09	%
Provision for credit losses/average loans (3)		0.86	%		0.15	%		0.13	%		0.11	%		0.07	%
Nonperforming loans/total loans (incl LHFS)		0.54	%		0.56	%		0.62	%		0.57	%		0.62	%
Nonperforming assets/total loans (incl LHFS)		0.79	%		0.86	%		0.96	%		0.90	%		0.97	%
Nonperforming assets/total loans (incl LHFS) +ORE		0.78	%		0.86	%		0.95	%		0.90	%		0.96	%
ACL LHFI/total loans (excl LHFS) (3)		1.05	%		0.90	%		0.90	%		0.88	%		0.88	%
ACL LHFI-commercial/total commercial loans (3)		0.97	%		0.98	%		0.98	%		0.96	%		0.96	%
ACL LHFI-consumer/total consumer and home mortgage loans (3)		1.35	%		0.61	%		0.61	%		0.60	%		0.57	%
ACL LHFI/nonperforming loans (3)		189.77	%		158.34	%		140.99	%		152.02	%		140.02	%
ACL LHFI/nonperforming loans (excl individually evaluated loans) (3)		468.84	%		410.52	%		357.15	%		383.19	%		342.97	%
CAPITAL RATIOS (3)
Total equity/total assets		11.79	%		12.30	%		12.11	%		11.95	%		11.77	%
Tangible equity/tangible assets		9.27	%		9.72	%		9.53	%		9.34	%		9.15	%
Tangible equity/risk-weighted assets		11.05	%		11.58	%		11.50	%		11.39	%		11.35	%
Tier 1 leverage ratio		10.21	%		10.48	%		10.34	%		10.03	%		10.05	%
Common equity tier 1 capital ratio		11.35	%		11.93	%		11.83	%		11.76	%		11.88	%
Tier 1 risk-based capital ratio		11.88	%		12.48	%		12.38	%		12.31	%		12.45	%
Total risk-based capital ratio		12.78	%		13.25	%		13.15	%		13.07	%		13.21	%
STOCK PERFORMANCE
Market value-Close	$	23.30		$	34.51		$	34.11		$	33.25		$	33.63
Book value	$	26.06		$	25.87		$	25.60		$	25.13		$	24.49
Tangible book value	$	19.92		$	19.84		$	19.57		$	19.10		$	18.48
(1)  See Note 8 – Non-GAAP Financial Measures in the Notes to Consolidated Financials for Trustmark’s efficiency ratio calculation.
(2)  Excludes acquired loans.
(3)  See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.

See Notes to Consolidated Financials

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIALS
	March 31, 2020
	($ in thousands)
	(unaudited)

Note 1 – Recently Effective Accounting Pronouncements

ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” was adopted by Trustmark on January 1, 2020.  At the date of adoption, Trustmark recorded a decrease to its ACL, LHFI of $3.0 million and an increase to its ACL on off-balance sheet credit exposures of $29.6 million resulting in a one-time cumulative effect adjustment of $26.6 million ($19.9 million, net of tax) through retained earnings.

In accordance with the amendments of ASU 2016-13, Trustmark estimates the ACL using relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts including the COVID-19 pandemic effects.  Trustmark uses a third-party software application to calculate the quantitative portion of the ACL using a methodology and assumptions specific to each loan pool.  The qualitative portion of the ACL is based on general economic conditions and other internal and external factors affecting Trustmark as a whole as well as specific LHFI.  The total quantitative and qualitative portions of the ACL reflect Management’s expectations of future conditions based on reasonable and supportable forecasts.

During the first quarter of 2020, based upon the factors discussed above, Trustmark recorded a provision for credit losses of $20.6 million and a credit loss expense related to off-balance sheet credit exposures of $6.8 million.

Upon adoption of FASB ASC Topic 326, Trustmark elected to account for its existing acquired loans as purchased credit deteriorated loans included within the LHFI portfolio.  As a result, acquired loans of $72.6 million, as well as the necessary calculated allowance of $1.8 million, were transferred during the first quarter of 2020.  The acquired loans and related allowance transferred were acquired in the BancTrust Financial Group, Inc. merger on February 13, 2013.  LHFI presented in prior periods exclude acquired loans and thus may not be comparable to the current period presentation. 

In accordance with FASB ASC Subtopic 326-20, “Financial Instruments – Credit Losses – Measured at Amortized Cost,” Trustmark has developed an allowance for credit losses methodology effective January 1, 2020, which replaces its previous allowance for loan losses methodology.  The ACL for LHFI is adjusted through the provision for credit losses and reduced by the charge off of loan amounts, net of recoveries.  Prior periods present the allowance for loan losses and provision for loan losses methodology under the incurred loss model and thus may not be comparable to the current period presentation. 

Trustmark’s estimated allowance for credit losses on securities available for sale and held to maturity under ASU 2016-13 was deemed immaterial due to the composition of these portfolios.  Both portfolios consist primarily of U.S. government agency guaranteed mortgage-backed securities for which the risk of loss is minimal.  Therefore, Trustmark did not recognize a cumulative effect adjustment through retained earnings related to the available for sale or held to maturity securities.

Trustmark has elected the five-year phase-in transition period related to adopting the CECL methodology for its regulatory capital.

Note 2 - 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:

	3/31/2020		12/31/2019		9/30/2019		6/30/2019		3/31/2019
SECURITIES AVAILABLE FOR SALE
U.S. Government agency obligations	$	21,190	$	22,327	$	24,697	$	26,646	$	28,008
Obligations of states and political subdivisions		23,572		25,465		35,001		38,698		50,954
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA		71,971		69,252		63,391		65,716		66,176
Issued by FNMA and FHLMC		967,329		713,356		589,962		624,364		645,958
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		634,075		658,226		705,601		751,371		784,566
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		115,642		113,778		135,053		136,930		147,783
Total securities available for sale	$	1,833,779	$	1,602,404	$	1,553,705	$	1,643,725	$	1,723,445
SECURITIES HELD TO MATURITY
U.S. Government agency obligations	$	—	$	3,781	$	3,770	$	3,758	$	3,747
Obligations of states and political subdivisions		31,758		31,781		31,806		32,860		35,352
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA		10,492		10,820		10,994		11,184		11,710
Issued by FNMA and FHLMC		91,971		96,631		102,048		106,755		111,962
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		463,175		485,324		510,770		536,166		559,690
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		106,880		109,762		126,034		134,813		161,858
Total securities held to maturity	$	704,276	$	738,099	$	785,422	$	825,536	$	884,319

At March 31, 2020, the net unamortized, unrealized loss included in accumulated other comprehensive income (loss) in the accompanying balance sheet for securities held to maturity previously transferred from securities available for sale totaled approximately $11.2 million ($8.4 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 97.7% 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
	March 31, 2020
	($ in thousands)
	(unaudited)

Note 3 – Loan Composition

LHFI consisted of the following during the periods presented:

LHFI BY TYPE(1)	3/31/2020			12/31/2019			9/30/2019			6/30/2019			3/31/2019
Loans secured by real estate:
Construction, land development and other land loans	$	1,136,389		$	1,162,791		$	1,135,999		$	1,111,297		$	1,209,761
Secured by 1-4 family residential properties		1,852,065			1,855,913			1,820,455			1,818,126			1,810,872
Secured by nonfarm, nonresidential properties		2,575,422			2,475,245			2,442,308			2,326,312			2,241,072
Other real estate secured		838,573			724,480			668,667			635,839			528,032
Commercial and industrial loans		1,476,777			1,477,896			1,491,367			1,533,318			1,558,057
Consumer loans		170,678			175,738			176,894			176,133			176,619
State and other political subdivision loans		938,637			967,944			978,456			982,187			982,626
Other loans		579,379			495,621			509,522			533,547			487,975
LHFI		9,567,920			9,335,628			9,223,668			9,116,759			8,995,014
ACL LHFI		(100,564	)		(84,277	)		(83,226	)		(80,399	)		(79,005	)
Net LHFI	$	9,467,356		$	9,251,351		$	9,140,442		$	9,036,360		$	8,916,009

(1) See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.

The following table presents the LHFI composition by region at March 31, 2020 and reflects each region’s diversified mix of loans:

	March 31, 2020
LHFI - COMPOSITION BY REGION	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	$	1,136,389	$	358,297	$	89,884	$	308,049	$	23,554	$	356,605
Secured by 1-4 family residential properties		1,852,065		131,161		40,346		1,584,995		82,329		13,234
Secured by nonfarm, nonresidential properties		2,575,422		658,690		280,670		961,998		167,424		506,640
Other real estate secured		838,573		251,741		25,144		341,864		9,276		210,548
Commercial and industrial loans		1,476,777		214,041		20,612		699,930		315,542		226,652
Consumer loans		170,678		23,787		6,393		118,257		19,954		2,287
State and other political subdivision loans		938,637		109,422		38,763		582,098		26,717		181,637
Other loans		579,379		81,214		15,561		368,269		84,000		30,335
Loans	$	9,567,920	$	1,828,353	$	517,373	$	4,965,460	$	728,796	$	1,527,938
CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION
Lots	$	74,865	$	18,309	$	23,768	$	25,757	$	1,647	$	5,384
Development		63,640		14,326		7,505		29,130		4,938		7,741
Unimproved land		106,812		28,543		16,678		29,752		11,323		20,516
1-4 family construction		240,948		98,982		20,878		85,674		4,335		31,079
Other construction		650,124		198,137		21,055		137,736		1,311		291,885
Construction, land development and other land loans	$	1,136,389	$	358,297	$	89,884	$	308,049	$	23,554	$	356,605

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIALS
	March 31, 2020
	($ in thousands)
	(unaudited)

Note 3 – Loan Composition (continued)

	March 31, 2020
	Total		Alabama		Florida		Mississippi (Central and Southern Regions)		Tennessee (Memphis, TN and NorthernMS Regions)		Texas
LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION
Non-owner occupied:
Retail	$	443,057	$	162,375	$	41,536	$	137,615	$	27,531	$	74,000
Office		210,317		45,026		34,397		59,339		12,686		58,869
Hotel/motel		353,666		136,120		100,735		65,604		40,207		11,000
Mini-storage		109,009		12,112		3,520		49,479		420		43,478
Industrial		188,403		63,245		13,418		38,613		2,243		70,884
Health care		42,520		15,414		4,535		18,815		—		3,756
Convenience stores		27,116		3,496		—		11,243		410		11,967
Nursing homes/senior living		57,123		18,696		—		19,856		—		18,571
Other		66,085		5,238		6,892		11,120		5,959		36,876
Total non-owner occupied loans		1,497,296		461,722		205,033		411,684		89,456		329,401
Owner-occupied:
Office		166,804		38,751		38,062		53,284		10,763		25,944
Churches		103,009		24,506		6,250		46,790		11,201		14,262
Industrial warehouses		152,128		12,425		3,517		49,776		16,829		69,581
Health care		129,995		15,391		6,006		93,260		2,515		12,823
Convenience stores		104,925		13,026		8,071		62,871		640		20,317
Retail		68,057		17,945		6,636		24,610		2,707		16,159
Restaurants		59,617		4,200		1,833		36,612		15,497		1,475
Auto dealerships		31,366		7,947		295		12,883		10,241		—
Nursing homes/senior living		179,065		58,271		—		115,015		5,779		—
Other		83,160		4,506		4,967		55,213		1,796		16,678
Total owner-occupied loans		1,078,126		196,968		75,637		550,314		77,968		177,239
Loans secured by nonfarm, nonresidential properties	$	2,575,422	$	658,690	$	280,670	$	961,998	$	167,424	$	506,640

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIALS
	March 31, 2020
	($ in thousands)
	(unaudited)

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
	3/31/2020			12/31/2019			9/30/2019			6/30/2019			3/31/2019
Securities – taxable		2.25	%		2.24	%		2.23	%		2.25	%		2.27	%
Securities – nontaxable		3.85	%		3.92	%		3.76	%		3.78	%		3.80	%
Securities – total		2.28	%		2.27	%		2.26	%		2.28	%		2.31	%
Loans - LHFI & LHFS		4.54	%		4.67	%		4.90	%		4.98	%		4.93	%
Acquired loans		—			10.90	%		11.08	%		8.84	%		7.45	%
Loans - total		4.54	%		4.72	%		4.95	%		5.01	%		4.96	%
FF sold & rev repo		—			2.16	%		2.49	%		2.52	%		2.93	%
Other earning assets		1.59	%		1.57	%		2.35	%		2.31	%		2.67	%
Total earning assets		4.06	%		4.19	%		4.38	%		4.37	%		4.32	%
Interest-bearing deposits		0.71	%		0.85	%		0.96	%		0.99	%		0.93	%
FF pch & repo		1.02	%		1.21	%		1.53	%		0.63	%		1.38	%
Other borrowings		2.35	%		2.32	%		2.35	%		2.33	%		2.19	%
Total interest-bearing liabilities		0.75	%		0.88	%		0.99	%		1.01	%		0.95	%
Net interest margin		3.52	%		3.56	%		3.66	%		3.64	%		3.63	%
Net interest margin excluding acquired loans		3.52	%		3.52	%		3.61	%		3.60	%		3.60	%

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.  

The net interest margin excluding acquired loans remained flat at 3.52% for the first quarter of 2020 when compared to the fourth quarter of 2019, as the decline in the yield on the loans held for investment and held for sale portfolio was offset by lower costs of interest-bearing deposits.

Note 5 – 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 impact of this strategy resulted in a net positive ineffectiveness of $9.9 million primarily due to widening spreads between mortgage and ten-year Treasury rates during the first quarter of 2020.  

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

	Quarter Ended
	3/31/2020			12/31/2019			9/30/2019			6/30/2019			3/31/2019
Mortgage servicing income, net	$	5,819		$	5,854		$	5,688		$	5,734		$	5,607
Change in fair value-MSR from runoff		(2,607	)		(2,950	)		(3,569	)		(2,918	)		(2,398	)
Gain on sales of loans, net		14,339			7,984			9,799			7,532			4,981
Mortgage banking income before hedge ineffectiveness		17,551			10,888			11,918			10,348			8,190
Change in fair value-MSR from market changes		(23,999	)		4,048			(8,054	)		(8,209	)		(8,863	)
Change in fair value of derivatives		33,931			(7,022	)		4,307			8,156			4,115
Net positive (negative) hedge ineffectiveness		9,932			(2,974	)		(3,747	)		(53	)		(4,748	)
Mortgage banking, net	$	27,483		$	7,914		$	8,171		$	10,295		$	3,442

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIALS
	March 31, 2020
	($ in thousands)
	(unaudited)

Note 6 – Salaries and Employee Benefit Plans

Early Retirement Program

In January 2020, Trustmark announced a voluntary early retirement program for associates age 60 and above with five or more years of continuous service. The cost of this program is reflected in a one-time, pre-tax charge of approximately $4.4 million (salaries and benefits of $4.3 million and other miscellaneous expense of $102 thousand; or $0.05 per basic share net of tax) in Trustmark’s first quarter 2020 earnings. The pre-tax salary and employee benefits expense savings resulting from the implementation of the early retirement program are expected to total approximately $2.9 million ($0.03 per basic share net of tax) and $4.0 million ($0.05 per basic share net of tax) for the remainder of 2020 and for the year ended 2021, respectively.

Note 7 – Other Noninterest Income and Expense

Other noninterest income consisted of the following for the periods presented:

	Quarter Ended
	3/31/2020			12/31/2019			9/30/2019			6/30/2019			3/31/2019
Partnership amortization for tax credit purposes	$	(1,161	)	$	(1,630	)	$	(1,994	)	$	(2,010	)	$	(2,010	)
Increase in life insurance cash surrender value		1,722			1,802			1,814			1,803			1,783
Other miscellaneous income		1,746			3,279			2,169			2,337			2,466
Total other, net	$	2,307		$	3,451		$	1,989		$	2,130		$	2,239

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.

Other noninterest expense consisted of the following for the periods presented:

	Quarter Ended
	3/31/2020		12/31/2019		9/30/2019		6/30/2019		3/31/2019
Loan expense	$	2,799	$	2,968	$	2,886	$	3,003	$	2,697
Amortization of intangibles		812		1,002		1,021		992		1,101
FDIC assessment expense		1,590		1,450		1,400		1,836		1,758
Other miscellaneous expense		9,552		8,956		6,880		7,819		8,413
Total other expense	$	14,753	$	14,376	$	12,187	$	13,650	$	13,969

Note 8 – 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
	March 31, 2020
	($ in thousands except per share data)
	(unaudited)

Note 8 – Non-GAAP Financial Measures (continued)

		Quarter Ended
		3/31/2020			12/31/2019			9/30/2019			6/30/2019			3/31/2019
TANGIBLE EQUITY
AVERAGE BALANCES
Total shareholders' equity		$	1,640,070		$	1,656,605		$	1,634,646		$	1,605,745		$	1,590,187
Less:  Goodwill			(380,671	)		(379,627	)		(379,627	)		(379,627	)		(379,627	)
Identifiable intangible assets			(8,049	)		(7,882	)		(8,706	)		(9,631	)		(10,666	)
Total average tangible equity		$	1,251,350		$	1,269,096		$	1,246,313		$	1,216,487		$	1,199,894
PERIOD END BALANCES
Total shareholders' equity		$	1,652,399		$	1,660,702		$	1,645,362		$	1,618,550		$	1,587,028
Less:  Goodwill			(381,717	)		(379,627	)		(379,627	)		(379,627	)		(379,627	)
Identifiable intangible assets			(7,537	)		(7,343	)		(8,345	)		(9,101	)		(10,092	)
Total tangible equity	(a)	$	1,263,145		$	1,273,732		$	1,257,390		$	1,229,822		$	1,197,309
TANGIBLE ASSETS
Total assets		$	14,019,829		$	13,497,877		$	13,584,786		$	13,548,958		$	13,478,017
Less:  Goodwill			(381,717	)		(379,627	)		(379,627	)		(379,627	)		(379,627	)
Identifiable intangible assets			(7,537	)		(7,343	)		(8,345	)		(9,101	)		(10,092	)
Total tangible assets	(b)	$	13,630,575		$	13,110,907		$	13,196,814		$	13,160,230		$	13,088,298
Risk-weighted assets	(c)	$	11,427,297		$	11,002,877		$	10,935,018		$	10,796,903		$	10,548,472
NET INCOME ADJUSTED FOR INTANGIBLE AMORTIZATION
Net income		$	22,218		$	33,946		$	41,035		$	42,140		$	33,339
Plus: Intangible amortization net of tax			609			752			766			744			826
Net income adjusted for intangible amortization		$	22,827		$	34,698		$	41,801		$	42,884		$	34,165
Period end common shares outstanding	(d)		63,396,912			64,200,111			64,262,779			64,398,846			64,789,943
TANGIBLE COMMON EQUITY MEASUREMENTS
Return on average tangible equity (1)			7.34	%		10.85	%		13.31	%		14.14	%		11.55	%
Tangible equity/tangible assets	(a)/(b)		9.27	%		9.72	%		9.53	%		9.34	%		9.15	%
Tangible equity/risk-weighted assets	(a)/(c)		11.05	%		11.58	%		11.50	%		11.39	%		11.35	%
Tangible book value	(a)/(d)*1,000	$	19.92		$	19.84		$	19.57		$	19.10		$	18.48
COMMON EQUITY TIER 1 CAPITAL (CET1)
Total shareholders' equity		$	1,652,399		$	1,660,702		$	1,645,362		$	1,618,550		$	1,587,028
CECL transition adjustment (3)			26,476			—			—			—			—
AOCI-related adjustments			(7,698	)		23,600			20,858			24,816			40,915
CET1 adjustments and deductions:
Goodwill net of associated deferred tax liabilities (DTLs)			(367,825	)		(365,738	)		(365,741	)		(365,745	)		(365,748	)
Other adjustments and deductions for CET1 (2)			(6,269	)		(5,896	)		(6,671	)		(8,268	)		(9,099	)
CET1 capital	(e)		1,297,083			1,312,668			1,293,808			1,269,353			1,253,096
Additional tier 1 capital instruments plus related surplus			60,000			60,000			60,000			60,000			60,000
Tier 1 capital		$	1,357,083		$	1,372,668		$	1,353,808		$	1,329,353		$	1,313,096
Common equity tier 1 capital ratio	(e)/(c)		11.35	%		11.93	%		11.83	%		11.76	%		11.88	%

(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) See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIALS
	March 31, 2020
	($ in thousands except per share data)
	(unaudited)

Note 8 – Non-GAAP Financial Measures (continued)

Trustmark discloses certain non-GAAP financial measures 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 these as measures of our core operating business, which exclude the impact of the items detailed below, as these items are generally not operational in nature. These non-GAAP financial measures also provide 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 pre-tax pre-provision income during the periods presented:

			Quarter Ended
			3/31/2020			12/31/2019		9/30/2019		6/30/2019		3/31/2019
Net interest income (GAAP)			$	103,952		$	105,591	$	108,466	$	107,724	$	104,808
Noninterest income (GAAP)				65,264			47,578		48,337		49,639		41,491
Pre-tax pre-provision revenue		(a)	$	169,216		$	153,169	$	156,803	$	157,363	$	146,299
Noninterest expense (GAAP)			$	123,810		$	110,027	$	106,853	$	106,101	$	106,021
Less:	Voluntary early retirement program			(4,375	)		—		—		—		—
	Credit loss expense related to off-balance sheet credit exposures			(6,783	)		—		—		—		—
Adjusted noninterest expense (Non-GAAP)		(b)	$	112,652		$	110,027	$	106,853	$	106,101	$	106,021
Pre-tax pre-provision income (Non-GAAP)		(a)-(b)	$	56,564		$	43,142	$	49,950	$	51,262	$	40,278

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:

	Quarter Ended
	3/31/2020						3/31/2019
	Amount			Diluted EPS			Amount			Diluted EPS
Net Income (GAAP)	$	22,218		$	0.35		$	33,339		$	0.51
Significant non-routine transactions (net of taxes):
Voluntary early retirement program		3,281			0.05			—			—
Net Income adjusted for significant
non-routine transactions (Non-GAAP)	$	25,499		$	0.40		$	33,339		$	0.51
	Reported			Adjusted			Reported			Adjusted
	(GAAP)			(Non-GAAP)			(GAAP)			(Non-GAAP)
Return on equity		5.45	%		6.25	%		8.50	%	n/a
Return on average tangible equity		7.34	%		8.39	%		11.55	%	n/a
Return on assets		0.66	%		0.75	%		1.01	%	n/a
n/a - not applicable

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIALS
	March 31, 2020
	($ in thousands)
	(unaudited)

Note 8 – Non-GAAP Financial Measures (continued)

The following table presents Trustmark’s calculation of its efficiency ratio for the periods presented:

			Quarter Ended
			3/31/2020			12/31/2019			9/30/2019			6/30/2019			3/31/2019
Total noninterest expense (GAAP)			$	123,810		$	110,027		$	106,853		$	106,101		$	106,021
Less:	Other real estate expense, net			(1,294	)		(1,491	)		(531	)		(132	)		(1,752	)
	Amortization of intangibles			(812	)		(1,002	)		(1,021	)		(992	)		(1,101	)
	Voluntary early retirement program			(4,375	)		—			—			—			—
	Credit loss expense related to off-balance sheet exposures			(6,783	)		—			—			—			—
	Charitable contributions resulting in state tax credits			(375	)		—			—			—			—
Adjusted noninterest expense (Non-GAAP)		(c)	$	110,171		$	107,534		$	105,301		$	104,977		$	103,168
Net interest income (GAAP)			$	103,952		$	105,591		$	108,466		$	107,724		$	104,808
Add:	Tax equivalent adjustment			3,108			3,149			3,249			3,248			3,231
Net interest income-FTE (Non-GAAP)		(a)	$	107,060		$	108,740		$	111,715		$	110,972		$	108,039
Noninterest income (GAAP)			$	65,264		$	47,578		$	48,337		$	49,639		$	41,491
Add:	Partnership amortization for tax credit purposes			1,161			1,630			1,994			2,010			2,010
Adjusted noninterest income (Non-GAAP)		(b)	$	66,425		$	49,208		$	50,331		$	51,649		$	43,501
Adjusted revenue (Non-GAAP)		(a)+(b)	$	173,485		$	157,948		$	162,046		$	162,621		$	151,540
Efficiency ratio (Non-GAAP)		(c)/((a)+(b))		63.50	%		68.08	%		64.98	%		64.55	%		68.08	%