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

Exhibit 99.1

News Release

Trustmark Corporation Announces Third Quarter 2020 Financial Results

Performance reflects value of diversified financial services businesses

JACKSON, Miss. – October 27, 2020 – Trustmark Corporation (Nasdaq:TRMK) reported net income of $54.4 million in the third quarter of 2020, representing diluted earnings per share of $0.86.  This level of earnings resulted in a return on average tangible equity of 16.82% and a return on average assets of 1.37%.  Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable December 15, 2020, to shareholders of record on December 1, 2020.  

Third Quarter Highlights

• Pre-tax, pre-provision income totaled $62.9 million, a linked-quarter increase of 1.4% and year-over-year increase of 26.0%.  Please refer to the Consolidated Financial Information, Footnote 9 – Non-GAAP Financial Measures.

• Noninterest income represented 41.0% of revenue in the third quarter and increased 6.0% from the prior quarter

• Maintained strong capital position with CET1 ratio of 11.36% and total risk-based capital ratio of 12.88%

Gerard R. Host, Chairman and CEO, stated, “Our third quarter results demonstrate the value of our diversified financial services businesses with strong performance in both our banking and noninterest lines of business.  Loans held for investment increased 6.8% year-over-year, and mortgage loan production was up over 56% year-over-year.  We experienced significant year-over-year growth in pre-tax, pre-provision income, and we maintained our solid capital base and liquidity position.  Trustmark remains committed to ensuring the safety of customers and associates and supporting local economies in this challenging environment.  We continue to focus on serving customers and creating long-term value for shareholders.”

Balance Sheet Management

• Loans held for investment increased $187.9 million from the prior quarter and $624.1 million year-over-year

• Gross PPP loans totaled $970.0 million at September 30, 2020

• Noninterest bearing deposits increased $83.5 million linked-quarter and represented 30.0% of total deposits at September 30, 2020

Loans held for investment totaled $9.8 billion at September 30, 2020, reflecting an increase of 1.9% linked-quarter and 6.8% year-over-year.  The linked-quarter growth was driven primarily by construction and development loans and commercial real estate loans.  At September 30, 2020, Trustmark’s gross Paycheck Protection Program (PPP) loans totaled $970.0 million.  Net of deferred fees and costs of $25.7 million, PPP loans totaled $944.3 million.  Collectively, loans held for investment and PPP loans totaled $10.8 billion at the end of the third quarter of 2020.  

Deposits totaled $13.2 billion at September 30, 2020, down $283.1 million, or 2.1%, from the prior quarter.  However, deposits are up $2.0 billion, or 17.5%, year-over-year primarily reflecting the impact of additional customer liquidity associated with PPP loans and government stimulus payments.  Interest-bearing deposit costs totaled 0.31% for the third quarter, a decrease of 6 basis points linked-quarter.  Trustmark continues to maintain an attractive, low-cost deposit base with approximately 62% of deposit balances in checking accounts.  The total cost of interest-bearing liabilities was 0.33% for the third quarter of 2020, a decrease of 6 basis points from the prior quarter.  

Trustmark’s capital position remained solid, reflecting the strength and diversity of its financial services businesses.  At September 30, 2020, Trustmark’s tangible equity to tangible assets ratio was 8.68%, while the total risk-based capital ratio was 12.88%.  

Credit Quality

• Allowance for credit losses represented 1.24% of loans held for investment and 593.72% of nonperforming loans, excluding individually evaluated loans

• Net recoveries totaled $1.1 million in the third quarter

• Other real estate declined 11.1% from the prior quarter and 49.2% year-over-year

• Approximately 2% of the loans held for investment portfolio remained under a concession at September 30, 2020

Allocation of Trustmark's $122.0 million allowance for credit losses on loans held for investment represented 1.20% of commercial loans and 1.41% of consumer and home mortgage loans, resulting in an allowance for credit losses to total loans held for investment of 1.24% at September 30, 2020, representing a level management considers commensurate with the present risk in the loan portfolio.  Trustmark recorded a provision for credit losses of $1.8 million in the third quarter.  

Nonperforming loans totaled $53.9 million at September 30, 2020, up $3.9 million from the prior quarter and down $5.2 million year-over-year.  Other real estate totaled $16.2 million, reflecting a $2.0 million decrease from the prior quarter and down $15.7 million from the prior year.  Collectively, nonperforming assets totaled $70.1 million, reflecting a linked-quarter increase of $1.8 million and a year-over-year decrease of $20.9 million.

Revenue Generation

• Revenue in the third quarter, excluding interest and fees on PPP loans, totaled $173.2 million, up 2.2% from the prior quarter and 12.1% year-over-year

• Noninterest income totaled $73.7 million in the third quarter, up 6.0% from the prior quarter and 52.5% year-over-year

• Mortgage loan production in the third quarter totaled $885.8 million, an increase of 3.8% from the prior quarter and a 56.5% increase year-over-year

Revenue in the third quarter totaled $179.9 million, up 3.1% from the prior quarter and up 14.7% from the same quarter in the prior year.  Excluding $6.7 million of interest and fees on PPP loans, revenue totaled $173.2 million in the third quarter, up 2.2% from the prior quarter and up 12.1% year-over-year.  The linked-quarter and year-over-year changes primarily reflect higher noninterest income.  Net interest income (FTE) in the third quarter totaled $109.2 million, resulting in a net interest margin of 3.03%.  Excluding PPP loans, the net interest margin totaled 3.05%, a linked-quarter decline of 9 basis points.  Continued low interest rates decreased the yield on the loans held for investment and held for sale portfolio as well as the securities portfolio and were partially offset by lower costs of interest-bearing deposits.  Relative to the prior quarter, net interest income (FTE) increased $1.2 million as a $327 thousand reduction in interest income was more than offset by a $1.5 million reduction in interest expense.  

Noninterest income in the third quarter totaled $73.7 million, an increase of $4.2 million from the prior quarter and an increase of $25.4 million year-over-year.  The linked-quarter change reflects increases in mortgage banking revenue, service charges on deposit accounts and bank card and other fees.  Mortgage banking revenue before hedge ineffectiveness totaled $35.6 million in the third quarter, in line with the prior quarter.  Third quarter results include $815 thousand in positive net hedge ineffectiveness.  Mortgage loan production in the third quarter totaled $885.8 million, up $32.5 million from the prior quarter and $319.6 million from the same period in the prior year.  Gain on sale of loans, net totaled $34.5 million in the third quarter, up $394 thousand from the prior quarter.  Mortgage banking revenue totaled $36.4 million in the third quarter, up $2.7 million from the prior quarter and $28.3 million from the same period in the prior year.

Insurance revenue totaled $11.6 million in the third quarter, a seasonal decline of 2.6% from the prior quarter and an increase of 4.4% year-over-year due to higher property and casualty commissions.  Wealth management revenue in the third quarter totaled $7.7 million, in line with the prior quarter and the same period in the prior year as increases in brokerage and investment services were offset by a decline in trust management fees.  

Bank card and other fees increased $1.1 million, or 14.6%, from the prior quarter, reflecting higher customer derivative revenue and interchange income.  Service charges on deposit accounts increased $1.2 million, or 18.4%, from the prior quarter as customers gradually returned to more normal pre-pandemic activities.  

Noninterest Expense

• Total expenses were $114.0 million in the third quarter, down $4.7 million, or 4.0%, from the prior quarter

• Adjusted expenses, which excludes amortization of intangibles, ORE expense and credit losses for off-balance sheet credit exposures, increased $3.6 million, or 3.2%, from the prior quarter.  Please refer to the Consolidated Financial Information, Footnote 9 – Non-GAAP Financial Measures.

Adjusted noninterest expenses totaled $114.6 million for the third quarter, representing an increase of 3.2% from the prior quarter.  Salaries and employee benefits increased $1.2 million due to increases in salaries, commissions, and performance-based incentives.  Services and fees increased due to continued investment in technology.  Net occupancy-premises experienced a normal seasonal increase.  Other adjusted noninterest expenses rose $1.5 million principally due to loan expense related to loan volumes and a non-cash charge for the realignment of branch offices.  

In the third quarter, the credit loss expense related to off-balance sheet exposures was a negative $3.0 million, a decline of $9.2 million from the prior quarter.  The decline primarily reflects improvement of the macroeconomic factors used to determine the necessary reserves for off-balance sheet exposures.  Other real estate expense, net increased $932 thousand primarily due to write-downs.  Total expenses for the third quarter declined $4.7 million, or 4.0%, from the prior quarter, as the decline in credit loss expense was partially offset by an increase in adjusted noninterest expense.  

Trustmark continues to focus on identifying efficiency opportunities in operations and delivery channels as well as utilizing technology solutions to streamline processes and improve the customer experience.  Year-to-date, Trustmark has consolidated six offices across the franchise.  In addition, Trustmark is in the process of converting select drive-thru only branches to interactive teller machines which will provide extended hours for additional customer convenience while reducing servicing costs.  Trustmark remains committed to investments to promote profitable revenue growth and reallocating resources to reflect changing customer preferences.

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, October 28, 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, November 11, 2020, in archived format at the same web address or by calling (877) 344-7529, passcode 10148374.

Trustmark is a financial services company providing banking and financial solutions through 187 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 (SEC) 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. 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 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
	September 30, 2020
	($ in thousands)
	(unaudited)

										Linked Quarter						Year over Year
QUARTERLY AVERAGE BALANCES	9/30/2020			6/30/2020			9/30/2019			$ Change			% Change			$ Change			% Change
Securities AFS-taxable	$	1,857,050		$	1,724,320		$	1,570,803		$	132,730			7.7	%	$	286,247			18.2	%
Securities AFS-nontaxable		5,973			9,827			25,096			(3,854	)		-39.2	%		(19,123	)		-76.2	%
Securities HTM-taxable		608,585			655,085			778,098			(46,500	)		-7.1	%		(169,513	)		-21.8	%
Securities HTM-nontaxable		25,508			25,538			26,088			(30	)		-0.1	%		(580	)		-2.2	%
Total securities		2,497,116			2,414,770			2,400,085			82,346			3.4	%		97,031			4.0	%
Paycheck protection program loans (PPP)		941,456			764,416			—			177,040			23.2	%		941,456		n/m
Loans (includes loans held for sale) (1)		10,162,379			9,908,132			9,436,287			254,247			2.6	%		726,092			7.7	%
Acquired loans (1)		—			—			82,641			—		n/m				(82,641	)		-100.0	%
Fed funds sold and reverse repurchases		301			113			3,662			188		n/m				(3,361	)		-91.8	%
Other earning assets		722,917			854,642			176,163			(131,725	)		-15.4	%		546,754		n/m
Total earning assets		14,324,169			13,942,073			12,098,838			382,096			2.7	%		2,225,331			18.4	%
Allowance for credit losses (ACL), loans held    for investment (LHFI) (1)		(121,842	)		(103,006	)		(83,756	)		(18,836	)		-18.3	%		(38,086	)		-45.5	%
Other assets		1,564,825			1,685,317			1,447,977			(120,492	)		-7.1	%		116,848			8.1	%
Total assets	$	15,767,152		$	15,524,384		$	13,463,059		$	242,768			1.6	%	$	2,304,093			17.1	%
Interest-bearing demand deposits	$	3,669,249		$	3,832,372		$	3,085,758		$	(163,123	)		-4.3	%	$	583,491			18.9	%
Savings deposits		4,416,046			4,180,540			3,568,403			235,506			5.6	%		847,643			23.8	%
Time deposits		1,507,348			1,578,737			1,753,083			(71,389	)		-4.5	%		(245,735	)		-14.0	%
Total interest-bearing deposits		9,592,643			9,591,649			8,407,244			994			0.0	%		1,185,399			14.1	%
Fed funds purchased and repurchases		84,077			105,696			142,064			(21,619	)		-20.5	%		(57,987	)		-40.8	%
Other borrowings		167,262			107,533			78,404			59,729			55.5	%		88,858		n/m
Junior subordinated debt securities		61,856			61,856			61,856			—			0.0	%		—			0.0	%
Total interest-bearing liabilities		9,905,838			9,866,734			8,689,568			39,104			0.4	%		1,216,270			14.0	%
Noninterest-bearing deposits		3,921,867			3,645,761			2,932,754			276,106			7.6	%		989,113			33.7	%
Other liabilities		244,544			346,173			206,091			(101,629	)		-29.4	%		38,453			18.7	%
Total liabilities		14,072,249			13,858,668			11,828,413			213,581			1.5	%		2,243,836			19.0	%
Shareholders' equity		1,694,903			1,665,716			1,634,646			29,187			1.8	%		60,257			3.7	%
Total liabilities and equity	$	15,767,152		$	15,524,384		$	13,463,059		$	242,768			1.6	%	$	2,304,093			17.1	%
(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
	September 30, 2020
	($ in thousands)
	(unaudited)

										Linked Quarter						Year over Year
PERIOD END BALANCES	9/30/2020			6/30/2020			9/30/2019			$ Change			% Change			$ Change			% Change
Cash and due from banks	$	564,588		$	1,026,640		$	486,263		$	(462,052	)		-45.0	%	$	78,325			16.1	%
Fed funds sold and reverse repurchases		50			—			—			50		n/m				50		n/m
Securities available for sale		1,922,728			1,884,153			1,553,705			38,575			2.0	%		369,023			23.8	%
Securities held to maturity		611,280			660,048			785,422			(48,768	)		-7.4	%		(174,142	)		-22.2	%
PPP loans		944,270			939,783			—			4,487			0.5	%		944,270		n/m
Loans held for sale (LHFS)		485,103			355,089			292,800			130,014			36.6	%		192,303			65.7	%
Loans held for investment (LHFI) (1)		9,847,728			9,659,806			9,223,668			187,922			1.9	%		624,060			6.8	%
ACL LHFI (1)		(122,010	)		(119,188	)		(83,226	)		(2,822	)		-2.4	%		(38,784	)		-46.6	%
Net LHFI		9,725,718			9,540,618			9,140,442			185,100			1.9	%		585,276			6.4	%
Acquired loans (1)		—			—			81,004			—		n/m				(81,004	)		-100.0	%
Allowance for loan losses, acquired loans (1)		—			—			(1,249	)		—		n/m				1,249			-100.0	%
Net acquired loans		—			—			79,755			—		n/m				(79,755	)		-100.0	%
Net LHFI and acquired loans		9,725,718			9,540,618			9,220,197			185,100			1.9	%		505,521			5.5	%
Premises and equipment, net		192,722			190,567			188,423			2,155			1.1	%		4,299			2.3	%
Mortgage servicing rights		61,613			57,811			73,016			3,802			6.6	%		(11,403	)		-15.6	%
Goodwill		385,270			385,270			379,627			—			0.0	%		5,643			1.5	%
Identifiable intangible assets		8,142			8,895			8,345			(753	)		-8.5	%		(203	)		-2.4	%
Other real estate		16,248			18,276			31,974			(2,028	)		-11.1	%		(15,726	)		-49.2	%
Operating lease right-of-use assets		30,508			29,819			33,180			689			2.3	%		(2,672	)		-8.1	%
Other assets		609,922			595,110			531,834			14,812			2.5	%		78,088			14.7	%
Total assets	$	15,558,162		$	15,692,079		$	13,584,786		$	(133,917	)		-0.9	%	$	1,973,376			14.5	%
Deposits:
Noninterest-bearing	$	3,964,023		$	3,880,540		$	3,064,127		$	83,483			2.2	%	$	899,896			29.4	%
Interest-bearing		9,258,390			9,624,933			8,190,056			(366,543	)		-3.8	%		1,068,334			13.0	%
Total deposits		13,222,413			13,505,473			11,254,183			(283,060	)		-2.1	%		1,968,230			17.5	%
Fed funds purchased and repurchases		153,834			70,255			376,712			83,579		n/m				(222,878	)		-59.2	%
Other borrowings		178,599			152,860			76,685			25,739			16.8	%		101,914		n/m
Junior subordinated debt securities		61,856			61,856			61,856			—			0.0	%		—			0.0	%
ACL on off-balance sheet credit exposures (1)		39,659			42,663			—			(3,004	)		-7.0	%		39,659		n/m
Operating lease liabilities		31,838			31,076			34,319			762			2.5	%		(2,481	)		-7.2	%
Other liabilities		159,922			153,952			135,669			5,970			3.9	%		24,253			17.9	%
Total liabilities		13,848,121			14,018,135			11,939,424			(170,014	)		-1.2	%		1,908,697			16.0	%
Common stock		13,215			13,214			13,390			1			0.0	%		(175	)		-1.3	%
Capital surplus		231,836			230,613			257,370			1,223			0.5	%		(25,534	)		-9.9	%
Retained earnings		1,459,306			1,419,552			1,395,460			39,754			2.8	%		63,846			4.6	%
Accumulated other comprehensive income (loss),    net of tax		5,684			10,565			(20,858	)		(4,881	)		-46.2	%		26,542		n/m
Total shareholders' equity		1,710,041			1,673,944			1,645,362			36,097			2.2	%		64,679			3.9	%
Total liabilities and equity	$	15,558,162		$	15,692,079		$	13,584,786		$	(133,917	)		-0.9	%	$	1,973,376			14.5	%
(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
	September 30, 2020
	($ in thousands except per share data)
	(unaudited)

	Quarter Ended								Linked Quarter						Year over Year
INCOME STATEMENTS	9/30/2020			6/30/2020		9/30/2019			$ Change			% Change			$ Change			% Change
Interest and fees on LHFS & LHFI-FTE	$	97,429		$	99,300	$	116,432		$	(1,871	)		-1.9	%	$	(19,003	)		-16.3	%
Interest and fees on PPP loans		6,729			5,044		—			1,685			33.4	%		6,729		n/m
Interest and fees on acquired loans (1)		—			—		2,309			—		n/m				(2,309	)		-100.0	%
Interest on securities-taxable		12,542			12,762		13,184			(220	)		-1.7	%		(642	)		-4.9	%
Interest on securities-tax exempt-FTE		301			315		485			(14	)		-4.4	%		(184	)		-37.9	%
Interest on fed funds sold and reverse repurchases		1			—		23			1		n/m				(22	)		-95.7	%
Other interest income		331			239		1,044			92			38.5	%		(713	)		-68.3	%
Total interest income-FTE		117,333			117,660		133,477			(327	)		-0.3	%		(16,144	)		-12.1	%
Interest on deposits		7,437			8,730		20,385			(1,293	)		-14.8	%		(12,948	)		-63.5	%
Interest on fed funds purchased and repurchases		32			42		547			(10	)		-23.8	%		(515	)		-94.1	%
Other interest expense		688			881		830			(193	)		-21.9	%		(142	)		-17.1	%
Total interest expense		8,157			9,653		21,762			(1,496	)		-15.5	%		(13,605	)		-62.5	%
Net interest income-FTE		109,176			108,007		111,715			1,169			1.1	%		(2,539	)		-2.3	%
Provision for credit losses, LHFI (1)		1,760			18,185		3,039			(16,425	)		-90.3	%		(1,279	)		-42.1	%
Provision for loan losses, acquired loans (1)		—			—		(140	)		—		n/m				140			100.0	%
Net interest income after provision-FTE		107,416			89,822		108,816			17,594			19.6	%		(1,400	)		-1.3	%
Service charges on deposit accounts		7,577			6,397		11,065			1,180			18.4	%		(3,488	)		-31.5	%
Bank card and other fees		8,843			7,717		8,349			1,126			14.6	%		494			5.9	%
Mortgage banking, net		36,439			33,745		8,171			2,694			8.0	%		28,268		n/m
Insurance commissions		11,562			11,868		11,072			(306	)		-2.6	%		490			4.4	%
Wealth management		7,679			7,571		7,691			108			1.4	%		(12	)		-0.2	%
Other, net		1,601			2,213		1,989			(612	)		-27.7	%		(388	)		-19.5	%
Total noninterest income		73,701			69,511		48,337			4,190			6.0	%		25,364			52.5	%
Salaries and employee benefits		67,342			66,107		62,495			1,235			1.9	%		4,847			7.8	%
Services and fees		20,992			20,567		18,838			425			2.1	%		2,154			11.4	%
Net occupancy-premises		7,000			6,587		6,831			413			6.3	%		169			2.5	%
Equipment expense		5,828			5,620		5,971			208			3.7	%		(143	)		-2.4	%
Other real estate expense, net		1,203			271		531			932		n/m				672		n/m
Credit loss expense related to off-balance sheet    credit exposures (1)		(3,004	)		6,242		—			(9,246	)	n/m				(3,004	)	n/m
Other expense		14,598			13,265		12,187			1,333			10.0	%		2,411			19.8	%
Total noninterest expense		113,959			118,659		106,853			(4,700	)		-4.0	%		7,106			6.7	%
Income before income taxes and tax eq adj		67,158			40,674		50,300			26,484			65.1	%		16,858			33.5	%
Tax equivalent adjustment		2,969			3,007		3,249			(38	)		-1.3	%		(280	)		-8.6	%
Income before income taxes		64,189			37,667		47,051			26,522			70.4	%		17,138			36.4	%
Income taxes		9,749			5,517		6,016			4,232			76.7	%		3,733			62.1	%
Net income	$	54,440		$	32,150	$	41,035		$	22,290			69.3	%	$	13,405			32.7	%
Per share data
Earnings per share - basic	$	0.86		$	0.51	$	0.64		$	0.35			68.6	%	$	0.22			34.4	%
Earnings per share - diluted	$	0.86		$	0.51	$	0.64		$	0.35			68.6	%	$	0.22			34.4	%
Dividends per share	$	0.23		$	0.23	$	0.23			—			0.0	%		—			0.0	%
Weighted average shares outstanding
Basic		63,422,692			63,416,307		64,358,540
Diluted		63,581,964			63,555,065		64,514,605
Period end shares outstanding		63,423,820			63,422,439		64,262,779
(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
	September 30, 2020
	($ in thousands)
	(unaudited)

	Quarter Ended									Linked Quarter						Year over Year
NONPERFORMING ASSETS (1)	9/30/2020			6/30/2020			9/30/2019			$ Change			% Change			$ Change			% Change
Nonaccrual LHFI
Alabama	$	3,860		$	4,392		$	2,936		$	(532	)		-12.1	%	$	924			31.5	%
Florida		617			687			311			(70	)		-10.2	%		306			98.4	%
Mississippi (2)		35,617			37,884			43,895			(2,267	)		-6.0	%		(8,278	)		-18.9	%
Tennessee (3)		13,041			6,125			10,193			6,916		n/m				2,848			27.9	%
Texas		721			906			1,695			(185	)		-20.4	%		(974	)		-57.5	%
Total nonaccrual LHFI		53,856			49,994			59,030			3,862			7.7	%		(5,174	)		-8.8	%
Other real estate
Alabama		3,725			4,766			6,501			(1,041	)		-21.8	%		(2,776	)		-42.7	%
Florida		3,665			3,665			6,983			—			0.0	%		(3,318	)		-47.5	%
Mississippi (2)		8,718			9,408			17,646			(690	)		-7.3	%		(8,928	)		-50.6	%
Tennessee (3)		140			437			844			(297	)		-68.0	%		(704	)		-83.4	%
Texas		—			—			—			—		n/m				—		n/m
Total other real estate		16,248			18,276			31,974			(2,028	)		-11.1	%		(15,726	)		-49.2	%
Total nonperforming assets	$	70,104		$	68,270		$	91,004		$	1,834			2.7	%	$	(20,900	)		-23.0	%
LOANS PAST DUE OVER 90 DAYS (1)
LHFI	$	782		$	807		$	878		$	(25	)		-3.1	%	$	(96	)		-10.9	%
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)	$	121,281		$	56,269		$	36,445		$	65,012		n/m			$	84,836		n/m
	Quarter Ended									Linked Quarter						Year over Year
ACL LHFI(1)(4)	9/30/2020			6/30/2020			9/30/2019			$ Change			% Change			$ Change			% Change
Beginning Balance	$	119,188		$	100,564		$	80,399		$	18,624			18.5	%	$	38,789			48.2	%
CECL adoption adjustments:
LHFI		—			—			—			—		n/m				—		n/m
Acquired loan transfers		—			—			—			—		n/m				—		n/m
Provision for credit losses		1,760			18,185			3,039			(16,425	)		-90.3	%		(1,279	)		-42.1	%
Charge-offs		(1,263	)		(1,870	)		(2,892	)		607			32.5	%		1,629			56.3	%
Recoveries		2,325			2,309			2,680			16			0.7	%		(355	)		-13.2	%
Net (charge-offs) recoveries		1,062			439			(212	)		623		n/m				1,274		n/m
Ending Balance	$	122,010		$	119,188		$	83,226		$	2,822			2.4	%	$	38,784			46.6	%
NET (CHARGE-OFFS) RECOVERIES(1)
Alabama	$	117		$	526		$	(329	)	$	(409	)		-77.8	%	$	446		n/m
Florida		387			(127	)		136			514		n/m				251		n/m
Mississippi (2)		442			(86	)		391			528		n/m				51			13.0	%
Tennessee (3)		42			66			(483	)		(24	)		-36.4	%		525		n/m
Texas		74			60			73			14			23.3	%		1			1.4	%
Total net (charge-offs) recoveries	$	1,062		$	439		$	(212	)	$	623		n/m			$	1,274		n/m
(1)  Excludes PPP and 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
	September 30, 2020
	($ in thousands)
	(unaudited)

	Quarter Ended															Nine Months Ended
AVERAGE BALANCES	9/30/2020			6/30/2020			3/31/2020			12/31/2019			9/30/2019			9/30/2020			9/30/2019
Securities AFS-taxable	$	1,857,050		$	1,724,320		$	1,620,422		$	1,551,358		$	1,570,803		$	1,734,380		$	1,661,177
Securities AFS-nontaxable		5,973			9,827			22,056			23,300			25,096			12,594			32,188
Securities HTM-taxable		608,585			655,085			694,740			734,474			778,098			652,642			821,716
Securities HTM-nontaxable		25,508			25,538			25,673			25,703			26,088			25,573			27,268
Total securities		2,497,116			2,414,770			2,362,891			2,334,835			2,400,085			2,425,189			2,542,349
PPP loans		941,456			764,416			—			—			—			569,985			—
Loans (includes loans held for sale) (1)		10,162,379			9,908,132			9,678,174			9,467,437			9,436,287			9,917,127			9,246,298
Acquired loans (1)		—			—			—			77,797			82,641			—			92,645
Fed funds sold and reverse repurchases		301			113			164			184			3,662			193			12,678
Other earning assets		722,917			854,642			187,327			227,116			176,163			588,787			245,173
Total earning assets		14,324,169			13,942,073			12,228,556			12,107,369			12,098,838			13,501,281			12,139,143
ACL LHFI (1)		(121,842	)		(103,006	)		(85,015	)		(86,211	)		(83,756	)		(103,355	)		(82,665	)
Other assets		1,564,825			1,685,317			1,498,725			1,445,075			1,447,977			1,582,888			1,454,350
Total assets	$	15,767,152		$	15,524,384		$	13,642,266		$	13,466,233		$	13,463,059		$	14,980,814		$	13,510,828
Interest-bearing demand deposits	$	3,669,249		$	3,832,372		$	3,184,134		$	3,167,256		$	3,085,758		$	3,562,310		$	3,012,049
Savings deposits		4,416,046			4,180,540			3,646,936			3,448,899			3,568,403			4,082,396			3,718,008
Time deposits		1,507,348			1,578,737			1,617,307			1,663,741			1,753,083			1,567,577			1,824,431
Total interest-bearing deposits		9,592,643			9,591,649			8,448,377			8,279,896			8,407,244			9,212,283			8,554,488
Fed funds purchased and repurchases		84,077			105,696			247,513			164,754			142,064			145,537			92,771
Other borrowings		167,262			107,533			85,279			79,512			78,404			120,197			83,475
Junior subordinated debt securities		61,856			61,856			61,856			61,856			61,856			61,856			61,856
Total interest-bearing liabilities		9,905,838			9,866,734			8,843,025			8,586,018			8,689,568			9,539,873			8,792,590
Noninterest-bearing deposits		3,921,867			3,645,761			2,910,951			3,017,824			2,932,754			3,494,425			2,885,478
Other liabilities		244,544			346,173			248,220			205,786			206,091			279,517			222,404
Total liabilities		14,072,249			13,858,668			12,002,196			11,809,628			11,828,413			13,313,815			11,900,472
Shareholders' equity		1,694,903			1,665,716			1,640,070			1,656,605			1,634,646			1,666,999			1,610,356
Total liabilities and equity	$	15,767,152		$	15,524,384		$	13,642,266		$	13,466,233		$	13,463,059		$	14,980,814		$	13,510,828
(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
	September 30, 2020
	($ in thousands)
	(unaudited)

PERIOD END BALANCES	9/30/2020			6/30/2020			3/31/2020			12/31/2019			9/30/2019
Cash and due from banks	$	564,588		$	1,026,640		$	404,341		$	358,916		$	486,263
Fed funds sold and reverse repurchases		50			—			2,000			—			—
Securities available for sale		1,922,728			1,884,153			1,833,779			1,602,404			1,553,705
Securities held to maturity		611,280			660,048			704,276			738,099			785,422
PPP loans		944,270			939,783			—			—			—
Loans held for sale (LHFS)		485,103			355,089			325,389			226,347			292,800
Loans held for investment (LHFI) (1)		9,847,728			9,659,806			9,567,920			9,335,628			9,223,668
ACL LHFI (1)		(122,010	)		(119,188	)		(100,564	)		(84,277	)		(83,226	)
Net LHFI		9,725,718			9,540,618			9,467,356			9,251,351			9,140,442
Acquired loans (1)		—			—			—			72,601			81,004
Allowance for loan losses, acquired loans (1)		—			—			—			(815	)		(1,249	)
Net acquired loans		—			—			—			71,786			79,755
Net LHFI and acquired loans		9,725,718			9,540,618			9,467,356			9,323,137			9,220,197
Premises and equipment, net		192,722			190,567			190,179			189,791			188,423
Mortgage servicing rights		61,613			57,811			56,437			79,394			73,016
Goodwill		385,270			385,270			381,717			379,627			379,627
Identifiable intangible assets		8,142			8,895			7,537			7,343			8,345
Other real estate		16,248			18,276			24,847			29,248			31,974
Operating lease right-of-use assets		30,508			29,819			30,839			31,182			33,180
Other assets		609,922			595,110			591,132			532,389			531,834
Total assets	$	15,558,162		$	15,692,079		$	14,019,829		$	13,497,877		$	13,584,786
Deposits:
Noninterest-bearing	$	3,964,023		$	3,880,540		$	2,977,058		$	2,891,215		$	3,064,127
Interest-bearing		9,258,390			9,624,933			8,598,706			8,354,342			8,190,056
Total deposits		13,222,413			13,505,473			11,575,764			11,245,557			11,254,183
Fed funds purchased and repurchases		153,834			70,255			421,821			256,020			376,712
Other borrowings		178,599			152,860			84,230			85,396			76,685
Junior subordinated debt securities		61,856			61,856			61,856			61,856			61,856
ACL on off-balance sheet credit exposures (1)		39,659			42,663			36,421			—			—
Operating lease liabilities		31,838			31,076			32,055			32,354			34,319
Other liabilities		159,922			153,952			155,283			155,992			135,669
Total liabilities		13,848,121			14,018,135			12,367,430			11,837,175			11,939,424
Common stock		13,215			13,214			13,209			13,376			13,390
Capital surplus		231,836			230,613			229,403			256,400			257,370
Retained earnings		1,459,306			1,419,552			1,402,089			1,414,526			1,395,460
Accumulated other comprehensive income (loss),    net of tax		5,684			10,565			7,698			(23,600	)		(20,858	)
Total shareholders' equity		1,710,041			1,673,944			1,652,399			1,660,702			1,645,362
Total liabilities and equity	$	15,558,162		$	15,692,079		$	14,019,829		$	13,497,877		$	13,584,786
(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
	September 30, 2020
	($ in thousands except per share data)
	(unaudited)

	Quarter Ended													Nine Months Ended
INCOME STATEMENTS	9/30/2020			6/30/2020		3/31/2020		12/31/2019			9/30/2019			9/30/2020		9/30/2019
Interest and fees on LHFS & LHFI-FTE	$	97,429		$	99,300	$	109,357	$	111,383		$	116,432		$	306,086	$	341,195
Interest and fees on PPP loans		6,729			5,044		—		—			—			11,773		—
Interest and fees on acquired loans (1)		—			—		—		2,138			2,309			—		6,235
Interest on securities-taxable		12,542			12,762		12,948		12,884			13,184			38,252		41,765
Interest on securities-tax exempt-FTE		301			315		457		484			485			1,073		1,682
Interest on fed funds sold and reverse repurchases		1			—		—		1			23			1		239
Other interest income		331			239		740		896			1,044			1,310		4,467
Total interest income-FTE		117,333			117,660		123,502		127,786			133,477			358,495		395,583
Interest on deposits		7,437			8,730		14,957		17,716			20,385			31,124		61,455
Interest on fed funds purchased and repurchases		32			42		625		504			547			699		916
Other interest expense		688			881		860		826			830			2,429		2,486
Total interest expense		8,157			9,653		16,442		19,046			21,762			34,252		64,857
Net interest income-FTE		109,176			108,007		107,060		108,740			111,715			324,243		330,726
Provision for credit losses, LHFI (1)		1,760			18,185		20,581		3,661			3,039			40,526		7,136
Provision for loan losses, acquired loans (1)		—			—		—		(2	)		(140	)		—		44
Net interest income after provision-FTE		107,416			89,822		86,479		105,081			108,816			283,717		323,546
Service charges on deposit accounts		7,577			6,397		10,032		10,894			11,065			24,006		31,709
Bank card and other fees		8,843			7,717		5,355		8,192			8,349			21,915		23,544
Mortgage banking, net		36,439			33,745		27,483		7,914			8,171			97,667		21,908
Insurance commissions		11,562			11,868		11,550		9,364			11,072			34,980		33,032
Wealth management		7,679			7,571		8,537		7,763			7,691			23,787		22,916
Other, net		1,601			2,213		2,307		3,451			1,989			6,121		6,358
Total noninterest income		73,701			69,511		65,264		47,578			48,337			208,476		139,467
Salaries and employee benefits		67,342			66,107		69,148		62,319			62,495			202,597		185,398
Services and fees		20,992			20,567		19,930		19,500			18,838			61,489		53,815
Net occupancy-premises		7,000			6,587		6,286		6,461			6,831			19,873		19,688
Equipment expense		5,828			5,620		5,616		5,880			5,971			17,064		17,853
Other real estate expense, net		1,203			271		1,294		1,491			531			2,768		2,415
Credit loss expense related to off-balance sheet credit    exposures (1)		(3,004	)		6,242		6,783		—			—			10,021		—
Other expense		14,598			13,265		14,753		14,376			12,187			42,616		39,806
Total noninterest expense		113,959			118,659		123,810		110,027			106,853			356,428		318,975
Income before income taxes and tax eq adj		67,158			40,674		27,933		42,632			50,300			135,765		144,038
Tax equivalent adjustment		2,969			3,007		3,108		3,149			3,249			9,084		9,728
Income before income taxes		64,189			37,667		24,825		39,483			47,051			126,681		134,310
Income taxes		9,749			5,517		2,607		5,537			6,016			17,873		17,796
Net income	$	54,440		$	32,150	$	22,218	$	33,946		$	41,035		$	108,808	$	116,514
Per share data
Earnings per share - basic	$	0.86		$	0.51	$	0.35	$	0.53		$	0.64		$	1.71	$	1.80
Earnings per share - diluted	$	0.86		$	0.51	$	0.35	$	0.53		$	0.64		$	1.71	$	1.80
Dividends per share	$	0.23		$	0.23	$	0.23	$	0.23		$	0.23		$	0.69	$	0.69
Weighted average shares outstanding
Basic		63,422,692			63,416,307		63,756,629		64,255,716			64,358,540			63,531,478		64,755,406
Diluted		63,581,964			63,555,065		63,913,603		64,435,276			64,514,605			63,665,127		64,889,916
Period end shares outstanding		63,423,820			63,422,439		63,396,912		64,200,111			64,262,779			63,423,820		64,262,779
(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
	September 30, 2020
	($ in thousands)
	(unaudited)

	Quarter Ended
NONPERFORMING ASSETS (1)	9/30/2020			6/30/2020			3/31/2020			12/31/2019			9/30/2019
Nonaccrual LHFI
Alabama	$	3,860		$	4,392		$	4,769		$	1,870		$	2,936
Florida		617			687			254			267			311
Mississippi (2)		35,617			37,884			40,815			41,493			43,895
Tennessee (3)		13,041			6,125			6,153			8,980			10,193
Texas		721			906			1,001			616			1,695
Total nonaccrual LHFI		53,856			49,994			52,992			53,226			59,030
Other real estate
Alabama		3,725			4,766			6,229			8,133			6,501
Florida		3,665			3,665			4,835			5,877			6,983
Mississippi (2)		8,718			9,408			13,296			14,919			17,646
Tennessee (3)		140			437			487			319			844
Texas		—			—			—			—			—
Total other real estate		16,248			18,276			24,847			29,248			31,974
Total nonperforming assets	$	70,104		$	68,270		$	77,839		$	82,474		$	91,004
LOANS PAST DUE OVER 90 DAYS (1)
LHFI	$	782		$	807		$	708		$	642		$	878
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)	$	121,281		$	56,269		$	43,564		$	41,648		$	36,445
	Quarter Ended															Nine Months Ended
ACL LHFI(1)(4)	9/30/2020			6/30/2020			3/31/2020			12/31/2019			9/30/2019			9/30/2020			9/30/2019
Beginning Balance	$	119,188		$	100,564		$	84,277		$	83,226		$	80,399		$	84,277		$	79,290
CECL adoption adjustments:
LHFI		—			—			(3,039	)		—			—			(3,039	)		—
Acquired loan transfers		—			—			1,822			—			—			1,822			—
Provision for credit losses		1,760			18,185			20,581			3,661			3,039			40,526			7,136
Charge-offs		(1,263	)		(1,870	)		(5,545	)		(4,619	)		(2,892	)		(8,678	)		(9,862	)
Recoveries		2,325			2,309			2,468			2,009			2,680			7,102			6,662
Net (charge-offs) recoveries		1,062			439			(3,077	)		(2,610	)		(212	)		(1,576	)		(3,200	)
Ending Balance	$	122,010		$	119,188		$	100,564		$	84,277		$	83,226		$	122,010		$	83,226
NET (CHARGE-OFFS) RECOVERIES (1)
Alabama	$	117		$	526		$	(1,080	)	$	(132	)	$	(329	)	$	(437	)	$	(622	)
Florida		387			(127	)		64			357			136			324			493
Mississippi (2)		442			(86	)		126			(1,792	)		391			482			(2,646	)
Tennessee (3)		42			66			(2,186	)		(131	)		(483	)		(2,078	)		(577	)
Texas		74			60			(1	)		(912	)		73			133			152
Total net (charge-offs) recoveries	$	1,062		$	439		$	(3,077	)	$	(2,610	)	$	(212	)	$	(1,576	)	$	(3,200	)
(1)  Excludes PPP and 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
	September 30, 2020
	(unaudited)

	Quarter Ended															Nine Months Ended
FINANCIAL RATIOS AND OTHER DATA	9/30/2020			6/30/2020			3/31/2020			12/31/2019			9/30/2019			9/30/2020			9/30/2019
Return on average equity		12.78	%		7.76	%		5.45	%		8.13	%		9.96	%		8.72	%		9.67	%
Return on average tangible equity		16.82	%		10.32	%		7.34	%		10.85	%		13.31	%		11.57	%		13.01	%
Return on average assets		1.37	%		0.83	%		0.66	%		1.00	%		1.21	%		0.97	%		1.15	%
Interest margin - Yield - FTE		3.26	%		3.39	%		4.06	%		4.19	%		4.38	%		3.55	%		4.36	%
Interest margin - Cost		0.23	%		0.28	%		0.54	%		0.62	%		0.71	%		0.34	%		0.71	%
Net interest margin - FTE		3.03	%		3.12	%		3.52	%		3.56	%		3.66	%		3.21	%		3.64	%
Efficiency ratio (1)		62.19	%		62.13	%		63.50	%		68.08	%		64.98	%		62.59	%		65.82	%
Full-time equivalent employees		2,807			2,798			2,761			2,844			2,835
CREDIT QUALITY RATIOS (2)
Net (recoveries) charge-offs / average loans		-0.04	%		-0.02	%		0.13	%		0.11	%		0.01	%		0.02	%		0.05	%
Provision for credit losses / average loans (3)		0.07	%		0.74	%		0.86	%		0.15	%		0.13	%		0.55	%		0.10	%
Nonaccrual LHFI / (LHFI + LHFS)		0.52	%		0.50	%		0.54	%		0.56	%		0.62	%
Nonperforming assets / (LHFI + LHFS)		0.68	%		0.68	%		0.79	%		0.86	%		0.96	%
Nonperforming assets / (LHFI + LHFS + other real estate)		0.68	%		0.68	%		0.78	%		0.86	%		0.95	%
ACL LHFI / LHFI (3)		1.24	%		1.23	%		1.05	%		0.90	%		0.90	%
ACL LHFI-commercial / commercial LHFI (3)		1.20	%		1.15	%		0.97	%		0.98	%		0.98	%
ACL LHFI-consumer / consumer and home mortgage LHFI (3)		1.41	%		1.56	%		1.35	%		0.61	%		0.61	%
ACL LHFI / nonaccrual LHFI (3)		226.55	%		238.40	%		189.77	%		158.34	%		140.99	%
ACL LHFI / nonaccrual LHFI (excl individually evaluated loans) (3)		593.72	%		561.04	%		468.84	%		410.52	%		357.15	%
CAPITAL RATIOS (3)
Total equity / total assets		10.99	%		10.67	%		11.79	%		12.30	%		12.11	%
Tangible equity / tangible assets		8.68	%		8.37	%		9.27	%		9.72	%		9.53	%
Tangible equity / risk-weighted assets		11.01	%		11.09	%		11.05	%		11.58	%		11.50	%
Tier 1 leverage ratio		9.20	%		9.08	%		10.21	%		10.48	%		10.34	%
Common equity tier 1 capital ratio		11.36	%		11.42	%		11.35	%		11.93	%		11.83	%
Tier 1 risk-based capital ratio		11.86	%		11.94	%		11.88	%		12.48	%		12.38	%
Total risk-based capital ratio		12.88	%		13.00	%		12.78	%		13.25	%		13.15	%
STOCK PERFORMANCE
Market value-Close	$	21.41		$	24.52		$	23.30		$	34.51		$	34.11
Book value	$	26.96		$	26.39		$	26.06		$	25.87		$	25.60
Tangible book value	$	20.76		$	20.18		$	19.92		$	19.84		$	19.57
(1)  See Note 9 – Non-GAAP Financial Measures in the Notes to Consolidated Financials for Trustmark’s efficiency ratio calculation.
(2)  Excludes PPP and 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
	September 30, 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.

Based upon the factors discussed above, during the third quarter of 2020, Trustmark recorded a provision for credit losses of $1.8 million and a negative credit loss expense related to off-balance sheet credit exposures of $3.0 million compared to a provision for credit losses of $18.2 million and a credit loss expense related to off-balance sheet credit exposures of $6.2 million recorded during the second quarter of 2020.

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 - Paycheck Protection Program

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), a stimulus package intended to provide relief to businesses and consumers in the United States struggling as a result of the pandemic, was signed into law. A provision in the CARES Act included a $349 billion fund for the creation of the Paycheck Protection Program (PPP) through the Small Business Administration (SBA) and Treasury Department. The PPP is intended to provide loans to small businesses to pay their employees, rent, mortgage interest and utilities. PPP loans are forgivable, in whole or in part, if the proceeds are used for payroll and other permitted purposes in accordance with the requirements of the PPP. If not forgiven, in whole or in part, these loans carry a fixed rate of 1.00% per annum with payments deferred for the first six months of the loan. Originally, the loans carried a term of two years under SBA rules implemented by the CARES Act, but a June 5, 2020 amendment to the CARES Act provided for a five-year minimum loan term for loans made beginning as of such date, and permitted lenders and borrowers to mutually agree to amend existing two-year loans to have terms of five to ten years. The loans are 100% guaranteed by the SBA. The SBA pays the originating bank a processing fee ranging from 1.0% to 5.0%, based on the size of the loan.

At September 30, 2020, Trustmark had outstanding 9,691 PPP loans totaling $944.3 million (net of $25.7 million of deferred fees and costs) with an average loan size of $100 thousand.  Due to amount and nature of the PPP loans, these loans were not included in the LHFI portfolio and are presented separately in the accompanying consolidated balance sheets. The PPP loans are fully guaranteed by the SBA; therefore, no ACL was estimated for these loans.

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIALS
	September 30, 2020
	($ in thousands)
	(unaudited)

Note 3 - 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:

	9/30/2020		6/30/2020		3/31/2020		12/31/2019		9/30/2019
SECURITIES AVAILABLE FOR SALE
U.S. Government agency obligations	$	19,011	$	19,898	$	21,190	$	22,327	$	24,697
Obligations of states and political subdivisions		8,315		11,176		23,572		25,465		35,001
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA		62,156		69,637		71,971		69,252		63,391
Issued by FNMA and FHLMC		1,279,919		1,121,604		967,329		713,356		589,962
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		500,858		574,940		634,075		658,226		705,601
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		52,469		86,898		115,642		113,778		135,053
Total securities available for sale	$	1,922,728	$	1,884,153	$	1,833,779	$	1,602,404	$	1,553,705
SECURITIES HELD TO MATURITY
U.S. Government agency obligations	$	—	$	—	$	—	$	3,781	$	3,770
Obligations of states and political subdivisions		31,605		31,629		31,758		31,781		31,806
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA		8,244		10,306		10,492		10,820		10,994
Issued by FNMA and FHLMC		78,213		86,346		91,971		96,631		102,048
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		399,400		435,333		463,175		485,324		510,770
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		93,818		96,434		106,880		109,762		126,034
Total securities held to maturity	$	611,280	$	660,048	$	704,276	$	738,099	$	785,422

At September 30, 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 $9.7 million ($7.3 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 98.4% 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.

Note 4 – Loan Composition

LHFI consisted of the following during the periods presented:

LHFI BY TYPE(1)	9/30/2020			6/30/2020			3/31/2020			12/31/2019			9/30/2019
Loans secured by real estate:
Construction, land development and other land loans	$	1,385,947		$	1,277,277		$	1,136,389		$	1,162,791		$	1,135,999
Secured by 1-4 family residential properties		1,775,400			1,813,525			1,852,065			1,855,913			1,820,455
Secured by nonfarm, nonresidential properties		2,707,627			2,610,392			2,575,422			2,475,245			2,442,308
Other real estate secured		887,792			884,815			838,573			724,480			668,667
Commercial and industrial loans		1,398,468			1,413,255			1,476,777			1,477,896			1,491,367
Consumer loans		160,960			161,620			170,678			175,738			176,894
State and other political subdivision loans		935,349			931,536			938,637			967,944			978,456
Other loans		596,185			567,386			579,379			495,621			509,522
LHFI		9,847,728			9,659,806			9,567,920			9,335,628			9,223,668
ACL LHFI		(122,010	)		(119,188	)		(100,564	)		(84,277	)		(83,226	)
Net LHFI	$	9,725,718		$	9,540,618		$	9,467,356		$	9,251,351		$	9,140,442

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

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIALS
	September 30, 2020
	($ in thousands)
	(unaudited)

Note 4 – Loan Composition (continued)

The following table presents the LHFI composition by region at September 30, 2020 and reflects each region’s diversified mix of loans:

	September 30, 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	$	1,385,947	$	417,037		$	106,909	$	323,508	$	25,941	$	512,552
Secured by 1-4 family residential properties		1,775,400		124,666			38,269		1,524,234		77,201		11,030
Secured by nonfarm, nonresidential properties		2,707,627		679,817			283,629		998,294		183,620		562,267
Other real estate secured		887,792		253,180			6,133		409,377		6,095		213,007
Commercial and industrial loans		1,398,468		183,024			23,617		717,164		302,111		172,552
Consumer loans		160,960		24,262			6,481		108,193		18,789		3,235
State and other political subdivision loans		935,349		86,610			37,106		623,607		37,366		150,660
Other loans		596,185		83,526			14,878		389,907		80,180		27,694
Loans	$	9,847,728	$	1,852,122		$	517,022	$	5,094,284	$	731,303	$	1,652,997
CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION
Lots	$	77,787	$	17,880	��	$	23,659	$	29,991	$	1,246	$	5,011
Development		72,903		24,010			6,155		30,424		5,264		7,050
Unimproved land		102,092		25,890			20,007		25,866		11,084		19,245
1-4 family construction		241,737		111,104			21,856		70,073		7,560		31,144
Other construction		891,428		238,153			35,232		167,154		787		450,102
Construction, land development and other land loans	$	1,385,947	$	417,037		$	106,909	$	323,508	$	25,941	$	512,552
LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION
Non-owner occupied:
Retail	$	415,168	$	142,452		$	38,484	$	133,673	$	26,868	$	73,691
Office		257,143		66,829			27,215		83,379		12,230		67,490
Hotel/motel		343,854		137,960			101,206		53,507		40,181		11,000
Mini-storage		120,173		20,676			3,572		56,772		405		38,748
Industrial		216,231		57,102			12,327		41,895		1,124		103,783
Health care		45,835		12,865			11,729		18,634		395		2,212
Convenience stores		16,214		3,366			—		3,223		392		9,233
Nursing homes/senior living		65,903		28,197			—		12,051		7,084		18,571
Other		61,932		4,608			7,167		17,054		6,120		26,983
Total non-owner occupied loans		1,542,453		474,055			201,700		420,188		94,799		351,711
Owner-occupied:
Office		180,968		43,521			41,440		52,219		9,359		34,429
Churches		106,979		22,981			7,213		52,590		10,501		13,694
Industrial warehouses		165,356		13,234			2,869		50,088		16,784		82,381
Health care		127,692		17,162			4,975		101,319		2,462		1,774
Convenience stores		120,909		15,874			7,899		70,654		580		25,902
Retail		69,764		15,119			6,655		26,636		6,275		15,079
Restaurants		59,955		4,088			4,492		34,295		15,658		1,422
Auto dealerships		46,629		7,664			284		12,278		26,403		—
Nursing homes/senior living		181,803		61,368			—		120,435		—		—
Other		105,119		4,751			6,102		57,592		799		35,875
Total owner-occupied loans		1,165,174		205,762			81,929		578,106		88,821		210,556
Loans secured by nonfarm, nonresidential properties	$	2,707,627	$	679,817		$	283,629	$	998,294	$	183,620	$	562,267

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIALS
	September 30, 2020
	($ in thousands)
	(unaudited)

Note 5 – Yields on Earning Assets and Interest-Bearing Liabilities

The following table illustrates the yields on earning assets by category as well as the rates paid on interest-bearing liabilities on a tax equivalent basis:

	Quarter Ended															Nine Months Ended
	9/30/2020			6/30/2020			3/31/2020			12/31/2019			9/30/2019			9/30/2020			9/30/2019
Securities – taxable		2.02	%		2.16	%		2.25	%		2.24	%		2.23	%		2.14	%		2.25	%
Securities – nontaxable		3.80	%		3.58	%		3.85	%		3.92	%		3.76	%		3.76	%		3.78	%
Securities – total		2.05	%		2.18	%		2.28	%		2.27	%		2.26	%		2.17	%		2.28	%
PPP loans		2.84	%		2.65	%		—			—			—			2.76	%		—
Loans - LHFI & LHFS		3.81	%		4.03	%		4.54	%		4.67	%		4.90	%		4.12	%		4.93	%
Acquired loans		—			—			—			10.90	%		11.08	%		—			9.00	%
Loans - total		3.73	%		3.93	%		4.54	%		4.72	%		4.95	%		4.05	%		4.97	%
Fed funds sold & reverse repurchases		1.32	%		—			—			2.16	%		2.49	%		0.69	%		2.52	%
Other earning assets		0.18	%		0.11	%		1.59	%		1.57	%		2.35	%		0.30	%		2.44	%
Total earning assets		3.26	%		3.39	%		4.06	%		4.19	%		4.38	%		3.55	%		4.36	%
Interest-bearing deposits		0.31	%		0.37	%		0.71	%		0.85	%		0.96	%		0.45	%		0.96	%
Fed funds purchased & repurchases		0.15	%		0.16	%		1.02	%		1.21	%		1.53	%		0.64	%		1.32	%
Other borrowings		1.19	%		2.09	%		2.35	%		2.32	%		2.35	%		1.78	%		2.29	%
Total interest-bearing liabilities		0.33	%		0.39	%		0.75	%		0.88	%		0.99	%		0.48	%		0.99	%
Net interest margin		3.03	%		3.12	%		3.52	%		3.56	%		3.66	%		3.21	%		3.64	%
Net interest margin excluding PPP and acquired loans		3.05	%		3.14	%		3.52	%		3.52	%		3.61	%		3.23	%		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 PPP and acquired loans, which equals reported net interest income-FTE excluding interest income on PPP and acquired loans, annualized, as a percent of average earning assets excluding average PPP and acquired loans.  

The net interest margin excluding PPP and acquired loans totaled 3.05% for the third quarter of 2020, a decrease of 9 basis points when compared to the second quarter of 2020.  Continued low interest rates decreased the yield on the loans held for investment and held for sale portfolio as well as the securities portfolio and were partially offset by lower costs of interest-bearing deposits.  

Note 6 – 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 $815 thousand during the third quarter of 2020.  

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

	Quarter Ended															Nine Months Ended
	9/30/2020			6/30/2020			3/31/2020			12/31/2019			9/30/2019			9/30/2020			9/30/2019
Mortgage servicing income, net	$	5,742		$	5,893		$	5,819		$	5,854		$	5,688		$	17,454		$	17,029
Change in fair value-MSR from runoff		(4,590	)		(4,214	)		(2,607	)		(2,950	)		(3,569	)		(11,411	)		(8,885	)
Gain on sales of loans, net		34,472			34,078			14,339			7,984			9,799			82,889			22,312
Mortgage banking income before hedge ineffectiveness		35,624			35,757			17,551			10,888			11,918			88,932			30,456
Change in fair value-MSR from market changes		60			(3,159	)		(23,999	)		4,048			(8,054	)		(27,098	)		(25,126	)
Change in fair value of derivatives		755			1,147			33,931			(7,022	)		4,307			35,833			16,578
Net positive (negative) hedge ineffectiveness		815			(2,012	)		9,932			(2,974	)		(3,747	)		8,735			(8,548	)
Mortgage banking, net	$	36,439		$	33,745		$	27,483		$	7,914		$	8,171		$	97,667		$	21,908

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIALS
	September 30, 2020
	($ in thousands)
	(unaudited)

Note 7 – 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 8 – Other Noninterest Income and Expense

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

	Quarter Ended															Nine Months Ended
	9/30/2020			6/30/2020			3/31/2020			12/31/2019			9/30/2019			9/30/2020			9/30/2019
Partnership amortization for tax credit purposes	$	(1,457	)	$	(1,205	)	$	(1,161	)	$	(1,630	)	$	(1,994	)	$	(3,823	)	$	(6,014	)
Increase in life insurance cash surrender value		1,755			1,696			1,722			1,802			1,814			5,173			5,400
Other miscellaneous income		1,303			1,722			1,746			3,279			2,169			4,771			6,972
Total other, net	$	1,601		$	2,213		$	2,307		$	3,451		$	1,989		$	6,121		$	6,358

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										Nine Months Ended
	9/30/2020		6/30/2020		3/31/2020		12/31/2019		9/30/2019		9/30/2020		9/30/2019
Loan expense	$	3,485	$	2,954	$	2,799	$	2,968	$	2,886	$	9,238	$	8,586
Amortization of intangibles		752		736		812		1,002		1,021		2,300		3,114
FDIC assessment expense		1,410		1,590		1,590		1,450		1,400		4,590		4,994
Other miscellaneous expense		8,951		7,985		9,552		8,956		6,880		26,488		23,112
Total other expense	$	14,598	$	13,265	$	14,753	$	14,376	$	12,187	$	42,616	$	39,806

Note 9 – 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
	September 30, 2020
	($ in thousands except per share data)
	(unaudited)

Note 9 – Non-GAAP Financial Measures (continued)

		Quarter Ended															Nine Months Ended
		9/30/2020			6/30/2020			3/31/2020			12/31/2019			9/30/2019			9/30/2020			9/30/2019
TANGIBLE EQUITY
AVERAGE BALANCES
Total shareholders' equity		$	1,694,903		$	1,665,716		$	1,640,070		$	1,656,605		$	1,634,646		$	1,666,999		$	1,610,356
Less:  Goodwill			(385,270	)		(383,081	)		(380,671	)		(379,627	)		(379,627	)		(383,016	)		(379,627	)
Identifiable intangible assets			(8,550	)		(7,834	)		(8,049	)		(7,882	)		(8,706	)		(8,146	)		(9,660	)
Total average tangible equity		$	1,301,083		$	1,274,801		$	1,251,350		$	1,269,096		$	1,246,313		$	1,275,837		$	1,221,069
PERIOD END BALANCES
Total shareholders' equity		$	1,710,041		$	1,673,944		$	1,652,399		$	1,660,702		$	1,645,362
Less:  Goodwill			(385,270	)		(385,270	)		(381,717	)		(379,627	)		(379,627	)
Identifiable intangible assets			(8,142	)		(8,895	)		(7,537	)		(7,343	)		(8,345	)
Total tangible equity	(a)	$	1,316,629		$	1,279,779		$	1,263,145		$	1,273,732		$	1,257,390
TANGIBLE ASSETS
Total assets		$	15,558,162		$	15,692,079		$	14,019,829		$	13,497,877		$	13,584,786
Less:  Goodwill			(385,270	)		(385,270	)		(381,717	)		(379,627	)		(379,627	)
Identifiable intangible assets			(8,142	)		(8,895	)		(7,537	)		(7,343	)		(8,345	)
Total tangible assets	(b)	$	15,164,750		$	15,297,914		$	13,630,575		$	13,110,907		$	13,196,814
Risk-weighted assets	(c)	$	11,963,269		$	11,539,157		$	11,427,297		$	11,002,877		$	10,935,018
NET INCOME ADJUSTED FOR INTANGIBLE AMORTIZATION
Net income		$	54,440		$	32,150		$	22,218		$	33,946		$	41,035		$	108,808		$	116,514
Plus: Intangible amortization net of tax			564			552			609			752			766			1,725			2,336
Net income adjusted for intangible amortization		$	55,004		$	32,702		$	22,827		$	34,698		$	41,801		$	110,533		$	118,850
Period end common shares outstanding	(d)		63,423,820			63,422,439			63,396,912			64,200,111			64,262,779
TANGIBLE COMMON EQUITY MEASUREMENTS
Return on average tangible equity (1)			16.82	%		10.32	%		7.34	%		10.85	%		13.31	%		11.57	%		13.01	%
Tangible equity/tangible assets	(a)/(b)		8.68	%		8.37	%		9.27	%		9.72	%		9.53	%
Tangible equity/risk-weighted assets	(a)/(c)		11.01	%		11.09	%		11.05	%		11.58	%		11.50	%
Tangible book value	(a)/(d)*1,000	$	20.76		$	20.18		$	19.92		$	19.84		$	19.57
COMMON EQUITY TIER 1 CAPITAL (CET1)
Total shareholders' equity		$	1,710,041		$	1,673,944		$	1,652,399		$	1,660,702		$	1,645,362
CECL transition adjustment (3)			32,647			32,693			26,476			—			—
AOCI-related adjustments			(5,684	)		(10,565	)		(7,698	)		23,600			20,858
CET1 adjustments and deductions:
Goodwill net of associated deferred tax liabilities (DTLs)			(371,345	)		(371,342	)		(367,825	)		(365,738	)		(365,741	)
Other adjustments and deductions for CET1 (2)			(6,770	)		(7,352	)		(6,269	)		(5,896	)		(6,671	)
CET1 capital	(e)		1,358,889			1,317,378			1,297,083			1,312,668			1,293,808
Additional tier 1 capital instruments plus related surplus			60,000			60,000			60,000			60,000			60,000
Tier 1 capital		$	1,418,889		$	1,377,378		$	1,357,083		$	1,372,668		$	1,353,808
Common equity tier 1 capital ratio	(e)/(c)		11.36	%		11.42	%		11.35	%		11.93	%		11.83	%

(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
	September 30, 2020
	($ in thousands except per share data)
	(unaudited)

Note 9 – 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												Nine Months Ended
			9/30/2020		6/30/2020			3/31/2020			12/31/2019		9/30/2019		9/30/2020			9/30/2019
Net interest income (GAAP)			$	106,207	$	105,000		$	103,952		$	105,591	$	108,466	$	315,159		$	320,998
Noninterest income (GAAP)				73,701		69,511			65,264			47,578		48,337		208,476			139,467
Pre-tax pre-provision revenue		(a)	$	179,908	$	174,511		$	169,216		$	153,169	$	156,803	$	523,635		$	460,465
Noninterest expense (GAAP)			$	113,959	$	118,659		$	123,810		$	110,027	$	106,853	$	356,428		$	318,975
Less:	Voluntary early retirement program			—		—			(4,375	)		—		—		(4,375	)		—
	Credit loss expense related to off-balance sheet credit    exposures			3,004		(6,242	)		(6,783	)		—		—		(10,021	)		—
Adjusted noninterest expense (Non-GAAP)		(b)	$	116,963	$	112,417		$	112,652		$	110,027	$	106,853	$	342,032		$	318,975
Pre-tax pre-provision income (Non-GAAP)		(a)-(b)	$	62,945	$	62,094		$	56,564		$	43,142	$	49,950	$	181,603		$	141,490

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										Nine Months Ended
	9/30/2020					9/30/2019					9/30/2020						9/30/2019
	Amount			Diluted EPS		Amount			Diluted EPS		Amount			Diluted EPS			Amount			Diluted EPS
Net Income (GAAP)	$	54,440		$	0.86	$	41,035		$	0.64	$	108,808		$	1.71		$	116,514		$	1.80
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)	$	54,440		$	0.86	$	41,035		$	0.64	$	112,089		$	1.76		$	116,514		$	1.80
	Reported (GAAP)			Adjusted		Reported (GAAP)			Adjusted		Reported (GAAP)			Adjusted			Reported (GAAP)			Adjusted
				(Non-GAAP)					(Non-GAAP)					(Non-GAAP)						(Non-GAAP)
Return on average equity		12.78	%	n/a			9.96	%	n/a			8.72	%		8.97	%		9.67	%	n/a
Return on average tangible equity		16.82	%	n/a			13.31	%	n/a			11.57	%		11.89	%		13.01	%	n/a
Return on average assets		1.37	%	n/a			1.21	%	n/a			0.97	%		1.00	%		1.15	%	n/a
n/a - not applicable

	TRUSTMARK CORPORATION AND SUBSIDIARIES
	NOTES TO CONSOLIDATED FINANCIALS
	September 30, 2020
	($ in thousands)
	(unaudited)

Note 9 – Non-GAAP Financial Measures (continued)

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

			Quarter Ended															Nine Months Ended
			9/30/2020			6/30/2020			3/31/2020			12/31/2019			9/30/2019			9/30/2020				9/30/2019
Total noninterest expense (GAAP)			$	113,959		$	118,659		$	123,810		$	110,027		$	106,853		$	356,428			$	318,975
Less:	Other real estate expense, net			(1,203	)		(271	)		(1,294	)		(1,491	)		(531	)		(2,768	)			(2,415	)
	Amortization of intangibles			(752	)		(736	)		(812	)		(1,002	)		(1,021	)		(2,300	)			(3,114	)
	Voluntary early retirement program			—			—			(4,375	)		—			—			(4,375	)			—
	Credit loss expense related to off-balance sheet exposures			3,004			(6,242	)		(6,783	)		—			—			(10,021	)			—
	Charitable contributions resulting in state tax credits			(375	)		(375	)		(375	)		—			—			(1,125	)			—
Adjusted noninterest expense (Non-GAAP)		(c)	$	114,633		$	111,035		$	110,171		$	107,534		$	105,301		$	335,839			$	313,446
Net interest income (GAAP)			$	106,207		$	105,000		$	103,952		$	105,591		$	108,466		$	315,159			$	320,998
Add:	Tax equivalent adjustment			2,969			3,007			3,108			3,149			3,249			9,084				9,728
Net interest income-FTE (Non-GAAP)		(a)	$	109,176		$	108,007		$	107,060		$	108,740		$	111,715		$	324,243		��	$	330,726
Noninterest income (GAAP)			$	73,701		$	69,511		$	65,264		$	47,578		$	48,337		$	208,476			$	139,467
Add:	Partnership amortization for tax credit purposes			1,457			1,205			1,161			1,630			1,994			3,823				6,014
Adjusted noninterest income (Non-GAAP)		(b)	$	75,158		$	70,716		$	66,425		$	49,208		$	50,331		$	212,299			$	145,481
Adjusted revenue (Non-GAAP)		(a)+(b)	$	184,334		$	178,723		$	173,485		$	157,948		$	162,046		$	536,542			$	476,207
Efficiency ratio (Non-GAAP)		(c)/((a)+(b))		62.19	%		62.13	%		63.50	%		68.08	%		64.98	%		62.59	%			65.82	%