Trustmark Corporation Announces First Quarter 2009 Financial Results and Declares $0.23 Quarterly Cash Dividend

Trustmark Corporation (NASDAQ:TRMK) announced net income available to common shareholders of $23.4 million in the first quarter of 2009, which represented basic earnings per common share of $0.41. Trustmark’s first quarter 2009 net income produced a return on average tangible common equity of 14.46% and a return on average assets of 1.10%. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per common share. The dividend is payable June 15, 2009, to shareholders of record on June 1, 2009.

Richard G. Hickson, Chairman and CEO, stated, "Trustmark continued to achieve solid financial results during the first quarter as reflected by expanded net interest income, growth in noninterest income, prudent expense management and enhanced capital strength. While the financial services industry continues to address the challenges of the current economic environment and the resulting slowdown in residential real estate, Trustmark remains well-positioned to meet the needs of customers across our four-state franchise. Our strong balance sheet and capital base continue to provide the financial flexibility necessary to succeed in an ever-changing marketplace.”

Credit Quality

• Net charge-offs during the first quarter totaled $11.4 million, or 0.66% of average loans
• Provision for loan losses totaled $16.9 million, exceeding net charge-offs by $5.5 million

Total nonaccrual loans increased $20.5 million during the first quarter of 2009 to $134.5 million, or 1.94% of total loans, due primarily to Florida residential real estate loans which were reserved for or written-down to net realizable value. Other real estate increased $3.6 million during the quarter. Collectively, total nonperforming assets increased $24.0 million during the first quarter to represent 2.53% of total loans and other real estate. Managing credit risks resulting from current real estate market conditions continues to be a primary focus of the Corporation.

Net charge-offs totaled $11.4 million during the first quarter principally resulting from Florida residential real estate net charge-offs of $6.9 million and $2.4 million in net charge-offs from the Corporation’s indirect auto portfolio. Losses were minimal in other geographic areas and lines of business. During the first quarter, the provision for loan losses totaled $16.9 million, exceeding net charge-offs by $5.5 million, including $3.8 million above net charge-offs in Florida. Allocation of Trustmark’s $100.4 million allowance for loan losses represented 1.95% of commercial loans and 0.73% of consumer and home mortgage loans, resulting in an allowance to total loans of 1.51%.

Enhanced Capital Strength

• Internally generated tangible common equity increased $61.8 million from prior year
• Tangible common equity to tangible assets expanded to 7.20%
• Total risk-based capital increased to 15.28%

A solid capital base has never been more important. Trustmark’s consistent profitability and sound capital management philosophy are reflected in expansion of tangible common equity to $680.9 million at March 31, 2009. During the first quarter, the Corporation’s common dividend payout ratio represented approximately 56% of earnings. Based upon the existing capital base and continued profitability going forward, Trustmark remains confident at this time in the sustainability of its cash dividend to common shareholders. Trustmark’s total risk-based capital of 15.28% significantly exceeds "well-capitalized” standards and supports the expansion of financing opportunities across the markets served by the Corporation. Excluding the $215 million in Senior Preferred stock issued under the Capital Purchase Program, Trustmark’s total risk-based capital ratio is an estimated 12.14%, exceeding guidelines to be classified as "well-capitalized” at March 31, 2009.

Balance Sheet Management

• Reduced exposure to indirect auto lending
• Mortgage banking production totaled $653.3 million, up 114% from prior quarter
• Total deposits increased $333.1 million, or 4.9%, from prior quarter

Loans held for investment declined $81.8 million during the first quarter due in large measure to a $71 million reduction in the Corporation’s indirect auto portfolio. During 2008, Trustmark exited indirect auto lending through dealerships as a result of limited profitability over the last five years due to lower loan pricing and financial industry consolidation to a few participants. While current economic conditions are reflected in decreased demand for commercial and industrial lending, the low interest rate environment favorably impacted mortgage banking production, which more than doubled from the prior quarter to $653.3 million. Trustmark’s deposit base expanded to $7.2 billion during the first quarter, reflecting a $333.1 million increase relative to the prior quarter due in part to increased CDs as well as growth in public funds. Noninterest bearing deposits represented 21.0% of the Corporation’s total deposits at March 31, 2009.

Net Interest Income

• Net interest income expanded to $90.9 million (FTE)
• Stable net interest margin of 4.18%

Average earning assets increased $343.2 million during the first quarter, principally due to growth in investment securities. Decreased funding costs offset by declining asset yields resulted in a stable net interest margin of 4.18% and an expansion in net interest income to $90.9 million (FTE) during the first quarter.

Noninterest Income

• Mortgage Banking income increased to $10.9 million
• Insurance revenue expanded to $7.4 million

Noninterest income totaled $43.0 million during the first quarter of 2009, an increase of $4.7 million from the prior quarter. Mortgage Banking income during the quarter totaled $10.9 million, reflecting consistent mortgage servicing income as well as gains from loan sales. Trustmark also successfully managed interest rate volatility through hedging programs for the Corporation’s mortgage servicing asset. Insurance revenue during the first quarter totaled $7.4 million, an increase of $639 thousand from the prior quarter resulting from seasonal increases in commercial insurance commissions. Wealth management revenue totaled $5.6 million during the first quarter, a decrease of $1.0 million from the prior quarter, reflecting a reduction in assets under management resulting from declining stock market valuations.

Disciplined Expense Management

• Core noninterest expense remained well-controlled
• Efficiency ratio improved to 55.56%

In the first quarter of 2009, noninterest expense totaled $74.4 million, an increase of $2.9 million relative to the prior quarter. The increase was attributable to higher FDIC deposit insurance premiums, loan expenses and seasonal factors related to employee benefits. Ongoing human capital management initiatives and continued awareness of expense management across the organization are reflected in the Corporation’s efficiency ratio of 55.56% during the first quarter.

ADDITIONAL INFORMATION

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, April 29 at 10:00 a.m. Central Time to discuss the Corporation’s financial results. Interested parties may listen to the conference call by dialing (877) 627-6580, passcode 5354118 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 6, 2009 in archived format at the same web address or by calling (888) 203-1112, passcode 5354118.

Trustmark is a financial services company providing banking and financial solutions through over 150 offices and 2,600 associates in Florida, Mississippi, Tennessee and Texas.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by words such as "may,” "hope,” "will,” "should,” "expect,” "plan,” "anticipate,” "intend,” "believe,” "estimate,” "predict,” "potential,” "continue,” "could,” "future” or the negative of those terms or other words of similar meaning. You should read statements that contain these words carefully because they discuss our future expectations or state other "forward-looking” information. These forward-looking statements include, but are not limited to, statements relating to anticipated future operating and financial performance measures, including net interest margin, credit quality, business initiatives, growth opportunities and growth rates, among other things and encompass any estimate, prediction, expectation, projection, opinion, anticipation, outlook or statement of belief included therein as well as the management assumptions underlying these forward-looking statements. You should be aware that the occurrence of the events described under the caption "Risk Factors” in Trustmark’s filings with the Securities and Exchange Commission could have an adverse effect on our business, results of operations and financial condition. Should one or more of these risks materialize, or should any such underlying assumptions prove to be significantly different, actual results may vary significantly from those anticipated, estimated, projected or expected.

Risks that could cause actual results to differ materially from current expectations of Management include, but are not limited to, changes in the level of nonperforming assets and charge-offs, local, state and national economic and market conditions, including the extent and duration of the current volatility in the credit and financial markets, changes in our ability to measure the fair value of assets in our portfolio, material changes in the level and/or volatility of market interest rates, the performance and demand for the products and services we offer, including the level and timing of withdrawals from our deposit accounts, the costs and effects of litigation and of unexpected or adverse outcomes in such litigation, our ability to attract non-interest bearing deposits and other low-cost funds, competition in loan and deposit pricing, as well as the entry of new competitors into our markets through de novo expansion and acquisitions, economic conditions and monetary and other governmental actions designed to address the level and volatility of interest rates and the volatility of securities, currency and other markets, the enactment of legislation and changes in existing regulations, or enforcement practices, or the adoption of new regulations, changes in accounting standards and practices, including changes in the interpretation of existing standards, that effect our consolidated financial statements, changes in consumer spending, borrowings and savings habits, technological changes, changes in the financial performance or condition of Trustmark’s borrowers, changes in Trustmark’s ability to control expenses, changes in Trustmark’s compensation and benefit plans, greater than expected costs or difficulties related to the integration of new products and lines of business, natural disasters, acts of war or terrorism and other risks described in Trustmark’s filings with the Securities and Exchange Commission.

Although Management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Trustmark undertakes no obligation to update or revise any of this information, whether as the result of new information, future events or developments or otherwise.

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2009
($ in thousands)
(unaudited)
														Linked Quarter							Year over Year
QUARTERLY AVERAGE BALANCES			3/31/2009				12/31/2008				3/31/2008			$	Change			% Change			$	Change			% Change
Securities AFS-taxable		$	1,505,328			$	1,226,843			$	353,079			$	278,485			22.7	%		$	1,152,249			n/m
Securities AFS-nontaxable			43,429				40,708				36,241				2,721			6.7	%			7,188			19.8	%
Securities HTM-taxable			178,417				169,958				189,604				8,459			5.0	%			(11,187	)		-5.9	%
Securities HTM-nontaxable			67,308				71,843				81,559				(4,535	)		-6.3	%			(14,251	)		-17.5	%
Total securities			1,794,482				1,509,352				660,483				285,130			18.9	%			1,133,999			n/m
Loans (including loans held for sale)			6,981,921				6,908,296				7,177,233				73,625			1.1	%			(195,312	)		-2.7	%
Fed funds sold and rev repos			15,988				22,871				22,921				(6,883	)		-30.1	%			(6,933	)		-30.2	%
Other earning assets			40,485				49,197				36,958				(8,712	)		-17.7	%			3,527			9.5	%
Total earning assets			8,832,876				8,489,716				7,897,595				343,160			4.0	%			935,281			11.8	%
Allowance for loan losses			(97,986	)			(91,802	)			(80,998	)			(6,184	)		6.7	%			(16,988	)		21.0	%
Cash and due from banks			239,508				223,774				259,392				15,734			7.0	%			(19,884	)		-7.7	%
Other assets			803,416				801,890				775,722				1,526			0.2	%			27,694			3.6	%
Total assets		$	9,777,814			$	9,423,578			$	8,851,711			$	354,236			3.8	%		$	926,103			10.5	%
Interest-bearing demand deposits		$	1,118,347			$	1,149,071			$	1,233,892			$	(30,724	)		-2.7	%		$	(115,545	)		-9.4	%
Savings deposits			1,815,672				1,709,670				1,755,048				106,002			6.2	%			60,624			3.5	%
Time deposits less than $100,000			1,485,680				1,478,753				1,577,753				6,927			0.5	%			(92,073	)		-5.8	%
Time deposits of $100,000 or more			1,074,873				1,045,377				1,030,527				29,496			2.8	%			44,346			4.3	%
Total interest-bearing deposits			5,494,572				5,382,871				5,597,220				111,701			2.1	%			(102,648	)		-1.8	%
Fed funds purchased and repos			674,175				809,822				417,338				(135,647	)		-16.8	%			256,837			61.5	%
Short-term borrowings			647,604				494,928				252,234				152,676			30.8	%			395,370			n/m
Long-term FHLB advances			58,333				-				-				58,333			n/m				58,333			n/m
Subordinated notes			49,744				49,736				49,712				8			0.0	%			32			0.1	%
Junior subordinated debt securities			70,104				70,104				70,104				-			0.0	%			-			0.0	%
Total interest-bearing liabilities			6,994,532				6,807,461				6,386,608				187,071			2.7	%			607,924			9.5	%
Noninterest-bearing deposits			1,470,822				1,433,361				1,390,843				37,461			2.6	%			79,979			5.8	%
Other liabilities			120,062				126,704				141,741				(6,642	)		-5.2	%			(21,679	)		-15.3	%
Total liabilities			8,585,416				8,367,526				7,919,192				217,890			2.6	%			666,224			8.4	%
Preferred equity			205,417				91,385				-				114,032			n/m				205,417			n/m
Common equity			986,981				964,667				932,519				22,314			2.3	%			54,462			5.8	%
Total shareholders' equity			1,192,398				1,056,052				932,519				136,346			12.9	%			259,879			27.9	%
Total liabilities and equity		$	9,777,814			$	9,423,578			$	8,851,711			$	354,236			3.8	%		$	926,103			10.5	%
														Linked Quarter							Year over Year
PERIOD END BALANCES			3/31/2009				12/31/2008				3/31/2008			$	Change			% Change			$	Change			% Change
Cash and due from banks		$	231,211			$	257,930			$	290,200			$	(26,719	)		-10.4	%		$	(58,989	)		-20.3	%
Fed funds sold and rev repos			8,014				23,401				16,022				(15,387	)		-65.8	%			(8,008	)		-50.0	%
Securities available for sale			1,613,047				1,542,841				585,746				70,206			4.6	%			1,027,301			n/m
Securities held to maturity			256,677				259,629				267,315				(2,952	)		-1.1	%			(10,638	)		-4.0	%
Loans held for sale			301,691				238,265				198,245				63,426			26.6	%			103,446			52.2	%
Loans			6,640,597				6,722,403				7,012,034				(81,806	)		-1.2	%			(371,437	)		-5.3	%
Allowance for loan losses			(100,358	)			(94,922	)			(81,818	)			(5,436	)		5.7	%			(18,540	)		22.7	%
Net Loans			6,540,239				6,627,481				6,930,216				(87,242	)		-1.3	%			(389,977	)		-5.6	%
Premises and equipment, net			157,068				156,811				151,469				257			0.2	%			5,599			3.7	%
Mortgage servicing rights			45,256				42,882				59,047				2,374			5.5	%			(13,791	)		-23.4	%
Goodwill			291,104				291,104				291,210				-			0.0	%			(106	)		0.0	%
Identifiable intangible assets			22,820				23,821				27,030				(1,001	)		-4.2	%			(4,210	)		-15.6	%
Other assets			308,587				326,744				280,653				(18,157	)		-5.6	%			27,934			10.0	%
Total assets		$	9,775,714			$	9,790,909			$	9,097,153			$	(15,195	)		-0.2	%		$	678,561			7.5	%
Deposits:
Noninterest-bearing		$	1,504,032			$	1,496,166			$	1,475,976			$	7,866			0.5	%		$	28,056			1.9	%
Interest-bearing			5,652,908				5,327,704				5,868,359				325,204			6.1	%			(215,451	)		-3.7	%
Total deposits			7,156,940				6,823,870				7,344,335				333,070			4.9	%			(187,395	)		-2.6	%
Fed funds purchased and repos			607,083				811,129				433,431				(204,046	)		-25.2	%			173,652			40.1	%
Short-term borrowings			448,380				730,958				93,453				(282,578	)		-38.7	%			354,927			n/m
Long-term FHLB advances			75,000				-				-				75,000			n/m				75,000			n/m
Subordinated notes			49,750				49,741				49,717				9			0.0	%			33			0.1	%
Junior subordinated debt securities			70,104				70,104				70,104				-			0.0	%			-			0.0	%
Other liabilities			168,089				126,641				168,772				41,448			32.7	%			(683	)		-0.4	%
Total liabilities			8,575,346				8,612,443				8,159,812				(37,097	)		-0.4	%			415,534			5.1	%
Preferred Stock			205,564				205,126				-				438			0.2	%			205,564			n/m
Common stock			11,955				11,944				11,938				11			0.1	%			17			0.1	%
Capital surplus			142,167				139,471				126,003				2,696			1.9	%			16,164			12.8	%
Retained earnings			845,779				836,642				810,369				9,137			1.1	%			35,410			4.4	%
Accum other comprehensive loss, net of tax			(5,097	)			(14,717	)			(10,969	)			9,620			-65.4	%			5,872			-53.5	%
Total shareholders' equity			1,200,368				1,178,466				937,341				21,902			1.9	%			263,027			28.1	%
Total liabilities and equity		$	9,775,714			$	9,790,909			$	9,097,153			$	(15,195	)		-0.2	%		$	678,561			7.5	%
n/m - percentage changes greater than +/- 100% are considered not meaningful
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2009
($ in thousands except per share data)
(unaudited)
		Quarter Ended												Linked Quarter							Year over Year
INCOME STATEMENTS			3/31/2009				12/31/2008				3/31/2008			$	Change			% Change			$	Change			% Change
Interest and fees on loans-FTE		$	92,382			$	101,694			$	119,641			$	(9,312	)		-9.2	%		$	(27,259	)		-22.8	%
Interest on securities-taxable			21,654				17,108				5,857				4,546			26.6	%			15,797			n/m
Interest on securities-tax exempt-FTE			1,834				1,891				2,086				(57	)		-3.0	%			(252	)		-12.1	%
Interest on fed funds sold and rev repos			19				57				179				(38	)		-66.7	%			(160	)		-89.4	%
Other interest income			313				368				572				(55	)		-14.9	%			(259	)		-45.3	%
Total interest income-FTE			116,202				121,118				128,335				(4,916	)		-4.1	%			(12,133	)		-9.5	%
Interest on deposits			22,540				26,818				43,363				(4,278	)		-16.0	%			(20,823	)		-48.0	%
Interest on fed funds pch and repos			364				1,178				3,073				(814	)		-69.1	%			(2,709	)		-88.2	%
Other interest expense			2,352				3,399				4,829				(1,047	)		-30.8	%			(2,477	)		-51.3	%
Total interest expense			25,256				31,395				51,265				(6,139	)		-19.6	%			(26,009	)		-50.7	%
Net interest income-FTE			90,946				89,723				77,070				1,223			1.4	%			13,876			18.0	%
Provision for loan losses			16,866				16,684				14,243				182			1.1	%			2,623			18.4	%
Net interest income after provision-FTE			74,080				73,039				62,827				1,041			1.4	%			11,253			17.9	%
Service charges on deposit accounts			12,568				14,044				12,564				(1,476	)		-10.5	%			4			0.0	%
Insurance commissions			7,422				6,783				8,256				639			9.4	%			(834	)		-10.1	%
Wealth management			5,555				6,583				7,198				(1,028	)		-15.6	%			(1,643	)		-22.8	%
General banking - other			5,407				5,576				5,788				(169	)		-3.0	%			(381	)		-6.6	%
Mortgage banking, net			10,907				4,393				11,056				6,514			n/m				(149	)		-1.3	%
Other, net			1,115				935				3,221				180			19.3	%			(2,106	)		-65.4	%
Nonint inc-excl sec gains, net			42,974				38,314				48,083				4,660			12.2	%			(5,109	)		-10.6	%
Security gains, net			30				12				433				18			n/m				(403	)		-93.1	%
Total noninterest income			43,004				38,326				48,516				4,678			12.2	%			(5,512	)		-11.4	%
Salaries and employee benefits			43,425				41,923				43,584				1,502			3.6	%			(159	)		-0.4	%
Services and fees			10,000				9,638				9,430				362			3.8	%			570			6.0	%
Net occupancy-premises			5,178				4,704				4,801				474			10.1	%			377			7.9	%
Equipment expense			4,166				4,183				4,074				(17	)		-0.4	%			92			2.3	%
Other expense			11,638				11,097				7,937				541			4.9	%			3,701			46.6	%
Total noninterest expense			74,407				71,545				69,826				2,862			4.0	%			4,581			6.6	%
Income before income taxes and tax eq adj			42,677				39,820				41,517				2,857			7.2	%			1,160			2.8	%
Tax equivalent adjustment			2,397				2,326				2,321				71			3.1	%			76			3.3	%
Income before income taxes			40,280				37,494				39,196				2,786			7.4	%			1,084			2.8	%
Income taxes			13,795				12,162				13,017				1,633			13.4	%			778			6.0	%
Net income			26,485				25,332				26,179				1,153			4.6	%			306			1.2	%
Preferred stock dividends			2,688				1,165				-				1,523			n/m				2,688			n/m
Accretion of preferred stock discount			438				188				-				250			n/m				438			n/m
Net income available to common shareholders		$	23,359			$	23,979			$	26,179			$	(620	)		-2.6	%		$	(2,820	)		-10.8	%
Per common share data
Earnings per share - basic		$	0.41			$	0.42			$	0.46			$	(0.01	)		-2.4	%		$	(0.05	)		-10.9	%
Earnings per share - diluted		$	0.41			$	0.42			$	0.46			$	(0.01	)		-2.4	%		$	(0.05	)		-10.9	%
Dividends per share		$	0.23			$	0.23			$	0.23			$	-			0.0	%		$	-			0.0	%
Weighted average common shares outstanding
Basic			57,350,874				57,324,710				57,283,240
Diluted			57,398,375				57,375,590				57,312,428
Period end common shares outstanding			57,378,318				57,324,737				57,296,449
OTHER FINANCIAL DATA
Return on common equity			9.60	%			9.89	%			11.29	%
Return on average tangible common equity			14.46	%			15.10	%			17.59	%
Return on equity			9.01	%			9.54	%			11.29	%
Return on assets			1.10	%			1.07	%			1.19	%
Interest margin - Yield - FTE			5.34	%			5.68	%			6.54	%
Interest margin - Cost			1.16	%			1.47	%			2.61	%
Net interest margin - FTE			4.18	%			4.20	%			3.92	%
Efficiency ratio			55.56	%			55.86	%			56.64	%
Full-time equivalent employees			2,589				2,607				2,627
COMMON STOCK PERFORMANCE
Market value-Close		$	18.38			$	21.59			$	22.28
Common book value		$	17.34			$	16.98			$	16.36
Tangible common book value		$	11.87			$	11.49			$	10.81
n/m - percentage changes greater than +/- 100% are considered not meaningful
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2009
($ in thousands)
(unaudited)
		Quarter Ended												Linked Quarter							Year over Year
NONPERFORMING ASSETS			3/31/2009				12/31/2008				3/31/2008			$	Change			% Change			$	Change			% Change
Nonaccrual loans
Florida		$	83,789			$	75,092			$	49,654			$	8,697			11.6	%		$	34,135			68.7	%
Mississippi (1)			21,829				18,703				14,583				3,126			16.7	%			7,246			49.7	%
Tennessee (2)			5,763				3,638				6,550				2,125			58.4	%			(787	)		-12.0	%
Texas			23,122				16,605				7,207				6,517			39.2	%			15,915			n/m
Total nonaccrual loans			134,503				114,038				77,994				20,465			17.9	%			56,509			72.5	%
Other real estate
Florida			19,830				21,265				1,067				(1,435	)		-6.7	%			18,763			n/m
Mississippi (1)			9,932				6,113				1,741				3,819			62.5	%			8,191			n/m
Tennessee (2)			9,051				8,862				6,634				189			2.1	%			2,417			36.4	%
Texas			3,322				2,326				146				996			42.8	%			3,176			n/m
Total other real estate			42,135				38,566				9,588				3,569			9.3	%			32,547			n/m
Total nonperforming assets		$	176,638			$	152,604			$	87,582			$	24,034			15.7	%		$	89,056			n/m
LOANS PAST DUE OVER 90 DAYS
Loans held for investment		$	10,004			$	5,139			$	4,986			$	4,865			94.7	%		$	5,018			n/m
Loans HFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)		$	21,128			$	18,095			$	15,868			$	3,033			16.8	%		$	5,260			33.1	%
		Quarter Ended												Linked Quarter							Year over Year
ALLOWANCE FOR LOAN LOSSES			3/31/2009				12/31/2008				3/31/2008			$	Change			% Change			$	Change			% Change
Beginning Balance		$	94,922			$	90,888			$	79,851			$	4,034			4.4	%		$	15,071			18.9	%
Provision for loan losses			16,866				16,684				14,243				182			1.1	%			2,623			18.4	%
Charge-offs			(14,015	)			(15,039	)			(15,176	)			1,024			-6.8	%			1,161			-7.7	%
Recoveries			2,585				2,389				2,900				196			8.2	%			(315	)		-10.9	%
Net charge-offs			(11,430	)			(12,650	)			(12,276	)			1,220			-9.6	%			846			-6.9	%
Ending Balance		$	100,358			$	94,922			$	81,818			$	5,436			5.7	%		$	18,540			22.7	%
PROVISION FOR LOAN LOSSES																								`
Florida		$	10,733			$	6,491			$	9,557			$	4,242			65.4	%		$	1,176			12.3	%
Mississippi (1)			4,386				5,756				2,807				(1,370	)		-23.8	%			1,579			56.3	%
Tennessee (2)			1,621				1,461				779				160			11.0	%			842			n/m
Texas			126				2,976				1,100				(2,850	)		-95.8	%			(974	)		-88.5	%
Total provision for loan losses		$	16,866			$	16,684			$	14,243			$	182			1.1	%		$	2,623			18.4	%
NET CHARGE-OFFS
Florida		$	6,933			$	7,160			$	9,688			$	(227	)		-3.2	%		$	(2,755	)		-28.4	%
Mississippi (1)			3,455				4,387				1,574				(932	)		-21.2	%			1,881			n/m
Tennessee (2)			785				816				186				(31	)		-3.8	%			599			n/m
Texas			257				287				828				(30	)		-10.5	%			(571	)		-69.0	%
Total net charge-offs		$	11,430			$	12,650			$	12,276			$	(1,220	)		-9.6	%		$	(846	)		-6.9	%
CREDIT QUALITY RATIOS
Net charge offs/average loans			0.66	%			0.73	%			0.69	%
Provision for loan losses/average loans			0.98	%			0.96	%			0.80	%
Nonperforming loans/total loans (incl LHFS)			1.94	%			1.64	%			1.08	%
Nonperforming assets/total loans (incl LHFS)			2.54	%			2.19	%			1.21	%
Nonperforming assets/total loans (incl LHFS) +ORE			2.53	%			2.18	%			1.21	%
ALL/total loans (excl LHFS)			1.51	%			1.41	%			1.17	%
ALL-commercial/total commercial loans			1.95	%			1.79	%			1.52	%
ALL-consumer/total consumer and home mortgage loans			0.73	%			0.72	%			0.60	%
ALL/nonperforming loans			74.61	%			83.24	%			104.90	%
ALL/nonperforming loans (excl impaired loans)			137.47	%			166.07	%			142.72	%
CAPITAL RATIOS
Total equity/total assets			12.28	%			12.04	%			10.30	%
Common equity/total assets			10.18	%			9.94	%			10.30	%
Tangible equity/tangible assets			9.37	%			9.11	%			7.05	%
Tangible common equity/tangible assets			7.20	%			6.95	%			7.05	%
Tier 1 leverage ratio			10.17	%			10.42	%			8.12	%
Tier 1 risk-based capital ratio			13.34	%			13.01	%			9.42	%
Total risk-based capital ratio			15.28	%			14.95	%			11.21	%
(1) - Mississippi includes Central and Southern Mississippi Regions
(2) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions
n/m - percentage changes greater than +/- 100% are considered not meaningful

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2009
($ in thousands)
(unaudited)
		Quarter Ended
QUARTERLY AVERAGE BALANCES			3/31/2009				12/31/2008				9/30/2008				6/30/2008				3/31/2008
Securities AFS-taxable		$	1,505,328			$	1,226,843			$	822,995			$	769,790			$	353,079
Securities AFS-nontaxable			43,429				40,708				39,886				35,869				36,241
Securities HTM-taxable			178,417				169,958				184,001				186,047				189,604
Securities HTM-nontaxable			67,308				71,843				74,937				76,940				81,559
Total securities			1,794,482				1,509,352				1,121,819				1,068,646				660,483
Loans (including loans held for sale)			6,981,921				6,908,296				6,927,270				7,080,495				7,177,233
Fed funds sold and rev repos			15,988				22,871				17,401				30,567				22,921
Other earning assets			40,485				49,197				37,323				41,481				36,958
Total earning assets			8,832,876				8,489,716				8,103,813				8,221,189				7,897,595
Allowance for loan losses			(97,986	)			(91,802	)			(88,643	)			(82,962	)			(80,998	)
Cash and due from banks			239,508				223,774				246,515				253,545				259,392
Other assets			803,416				801,890				810,449				782,986				775,722
Total assets		$	9,777,814			$	9,423,578			$	9,072,134			$	9,174,758			$	8,851,711
Interest-bearing demand deposits		$	1,118,347			$	1,149,071			$	1,222,087			$	1,258,281			$	1,233,892
Savings deposits			1,815,672				1,709,670				1,774,188				1,867,438				1,755,048
Time deposits less than $100,000			1,485,680				1,478,753				1,532,630				1,568,802				1,577,753
Time deposits of $100,000 or more			1,074,873				1,045,377				1,108,677				1,051,716				1,030,527
Total interest-bearing deposits			5,494,572				5,382,871				5,637,582				5,746,237				5,597,220
Fed funds purchased and repos			674,175				809,822				659,312				618,227				417,338
Short-term borrowings			647,604				494,928				156,880				202,778				252,234
Long-term FHLB advances			58,333				-				-				-				-
Subordinated notes			49,744				49,736				49,728				49,720				49,712
Junior subordinated debt securities			70,104				70,104				70,104				70,104				70,104
Total interest-bearing liabilities			6,994,532				6,807,461				6,573,606				6,687,066				6,386,608
Noninterest-bearing deposits			1,470,822				1,433,361				1,415,402				1,409,371				1,390,843
Other liabilities			120,062				126,704				136,229				134,237				141,741
Total liabilities			8,585,416				8,367,526				8,125,237				8,230,674				7,919,192
Preferred equity			205,417				91,385				-				-				-
Common equity			986,981				964,667				946,897				944,084				932,519
Total shareholders' equity			1,192,398				1,056,052				946,897				944,084				932,519
Total liabilities and equity		$	9,777,814			$	9,423,578			$	9,072,134			$	9,174,758			$	8,851,711
PERIOD END BALANCES			3/31/2009				12/31/2008				9/30/2008				6/30/2008				3/31/2008
Cash and due from banks		$	231,211			$	257,930			$	235,016			$	296,628			$	290,200
Fed funds sold and rev repos			8,014				23,401				14,782				23,901				16,022
Securities available for sale			1,613,047				1,542,841				907,629				908,949				585,746
Securities held to maturity			256,677				259,629				256,323				260,741				267,315
Loans held for sale			301,691				238,265				154,162				184,858				198,245
Loans			6,640,597				6,722,403				6,740,730				6,859,375				7,012,034
Allowance for loan losses			(100,358	)			(94,922	)			(90,888	)			(86,576	)			(81,818	)
Net Loans			6,540,239				6,627,481				6,649,842				6,772,799				6,930,216
Premises and equipment, net			157,068				156,811				156,298				154,026				151,469
Mortgage servicing rights			45,256				42,882				78,550				76,209				59,047
Goodwill			291,104				291,104				291,145				291,145				291,210
Identifiable intangible assets			22,820				23,821				24,887				25,958				27,030
Other assets			308,587				326,744				317,639				319,835				280,653
Total assets		$	9,775,714			$	9,790,909			$	9,086,273			$	9,315,049			$	9,097,153
Deposits:
Noninterest-bearing		$	1,504,032			$	1,496,166			$	1,526,374			$	1,443,553			$	1,475,976
Interest-bearing			5,652,908				5,327,704				5,411,304				5,680,130				5,868,359
Total deposits			7,156,940				6,823,870				6,937,678				7,123,683				7,344,335
Fed funds purchased and repos			607,083				811,129				592,818				748,137				433,431
Short-term borrowings			448,380				730,958				369,037				260,812				93,453
Long-term FHLB advances			75,000				-				-				-				-
Subordinated notes			49,750				49,741				49,733				49,725				49,717
Junior subordinated debt securities			70,104				70,104				70,104				70,104				70,104
Other liabilities			168,089				126,641				117,905				126,703				168,772
Total liabilities			8,575,346				8,612,443				8,137,275				8,379,164				8,159,812
Preferred Stock			205,564				205,126				-				-				-
Common stock			11,955				11,944				11,944				11,938				11,938
Capital surplus			142,167				139,471				128,617				126,881				126,003
Retained earnings			845,779				836,642				824,768				814,674				810,369
Accum other comprehensive loss, net of tax			(5,097	)			(14,717	)			(16,331	)			(17,608	)			(10,969	)
Total shareholders' equity			1,200,368				1,178,466				948,998				935,885				937,341
Total liabilities and equity		$	9,775,714			$	9,790,909			$	9,086,273			$	9,315,049			$	9,097,153
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2009
($ in thousands except per share data)
(unaudited)
		Quarter Ended
INCOME STATEMENTS			3/31/2009				12/31/2008				9/30/2008				6/30/2008				3/31/2008
Interest and fees on loans-FTE		$	92,382			$	101,694			$	105,706			$	109,023			$	119,641
Interest on securities-taxable			21,654				17,108				12,117				11,079				5,857
Interest on securities-tax exempt-FTE			1,834				1,891				1,946				1,943				2,086
Interest on fed funds sold and rev repos			19				57				98				168				179
Other interest income			313				368				407				475				572
Total interest income-FTE			116,202				121,118				120,274				122,688				128,335
Interest on deposits			22,540				26,818				32,860				36,881				43,363
Interest on fed funds pch and repos			364				1,178				3,123				3,019				3,073
Other interest expense			2,352				3,399				2,653				2,923				4,829
Total interest expense			25,256				31,395				38,636				42,823				51,265
Net interest income-FTE			90,946				89,723				81,638				79,865				77,070
Provision for loan losses			16,866				16,684				14,473				31,012				14,243
Net interest income after provision-FTE			74,080				73,039				67,165				48,853				62,827
Service charges on deposit accounts			12,568				14,044				13,886				13,223				12,564
Insurance commissions			7,422				6,783				9,007				8,394				8,256
Wealth management			5,555				6,583				6,788				7,031				7,198
General banking - other			5,407				5,576				5,813				6,053				5,788
Mortgage banking, net			10,907				4,393				4,323				6,708				11,056
Other, net			1,115				935				2,131				6,999				3,221
Nonint inc-excl sec gains, net			42,974				38,314				41,948				48,408				48,083
Security gains, net			30				12				2				58				433
Total noninterest income			43,004				38,326				41,950				48,466				48,516
Salaries and employee benefits			43,425				41,923				42,859				42,771				43,584
Services and fees			10,000				9,638				9,785				9,526				9,430
Net occupancy-premises			5,178				4,704				5,153				4,850				4,801
Equipment expense			4,166				4,183				4,231				4,144				4,074
Other expense			11,638				11,097				10,706				8,323				7,937
Total noninterest expense			74,407				71,545				72,734				69,614				69,826
Income before income taxes and tax eq adj			42,677				39,820				36,381				27,705				41,517
Tax equivalent adjustment			2,397				2,326				2,242				2,247				2,321
Income before income taxes			40,280				37,494				34,139				25,458				39,196
Income taxes			13,795				12,162				10,785				7,906				13,017
Net income			26,485				25,332				23,354				17,552				26,179
Preferred stock dividends			2,688				1,165				-				-				-
Accretion of preferred stock discount			438				188				-				-				-
Net income available to common shareholders		$	23,359			$	23,979			$	23,354			$	17,552			$	26,179
Per common share data
Earnings per share - basic		$	0.41			$	0.42			$	0.41			$	0.31			$	0.46
Earnings per share - diluted		$	0.41			$	0.42			$	0.41			$	0.31			$	0.46
Dividends per share		$	0.23			$	0.23			$	0.23			$	0.23			$	0.23
Weighted average common shares outstanding
Basic			57,350,874				57,324,710				57,298,710				57,296,449				57,283,240
Diluted			57,398,375				57,375,590				57,337,342				57,335,393				57,312,428
Period end common shares outstanding			57,378,318				57,324,737				57,324,627				57,296,449				57,296,449
OTHER FINANCIAL DATA
Return on common equity			9.60	%			9.89	%			9.81	%			7.48	%			11.29	%
Return on average tangible common equity			14.46	%			15.10	%			15.16	%			11.70	%			17.59	%
Return on equity			9.01	%			9.54	%			9.81	%			7.48	%			11.29	%
Return on assets			1.10	%			1.07	%			1.02	%			0.77	%			1.19	%
Interest margin - Yield - FTE			5.34	%			5.68	%			5.90	%			6.00	%			6.54	%
Interest margin - Cost			1.16	%			1.47	%			1.90	%			2.10	%			2.61	%
Net interest margin - FTE			4.18	%			4.20	%			4.01	%			3.91	%			3.92	%
Efficiency ratio			55.56	%			55.86	%			58.85	%			56.64	%			56.64	%
Full-time equivalent employees			2,589				2,607				2,623				2,637				2,627
COMMON STOCK PERFORMANCE
Market value-Close		$	18.38			$	21.59			$	20.74			$	17.65			$	22.28
Common book value		$	17.34			$	16.98			$	16.55			$	16.33			$	16.36
Tangible common book value		$	11.87			$	11.49			$	11.04			$	10.80			$	10.81
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2009
($ in thousands)
(unaudited)
		Quarter Ended
NONPERFORMING ASSETS			3/31/2009				12/31/2008				9/30/2008				6/30/2008				3/31/2008
Nonaccrual loans
Florida		$	83,789			$	75,092			$	71,125			$	70,484			$	49,654
Mississippi (1)			21,829				18,703				12,727				12,572				14,583
Tennessee (2)			5,763				3,638				4,012				5,216				6,550
Texas			23,122				16,605				17,418				7,039				7,207
Total nonaccrual loans			134,503				114,038				105,282				95,311				77,994
Other real estate
Florida			19,830				21,265				18,265				10,398				1,067
Mississippi (1)			9,932				6,113				6,062				5,258				1,741
Tennessee (2)			9,051				8,862				7,924				6,778				6,634
Texas			3,322				2,326				214				438				146
Total other real estate			42,135				38,566				32,465				22,872				9,588
Total nonperforming assets		$	176,638			$	152,604			$	137,747			$	118,183			$	87,582
LOANS PAST DUE OVER 90 DAYS
Loans held for investment		$	10,004			$	5,139			$	3,622			$	3,056			$	4,986
Loans HFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)		$	21,128			$	18,095			$	20,332			$	15,809			$	15,868
		Quarter Ended
ALLOWANCE FOR LOAN LOSSES			3/31/2009				12/31/2008				9/30/2008				6/30/2008				3/31/2008
Beginning Balance		$	94,922			$	90,888			$	86,576			$	81,818			$	79,851
Provision for loan losses			16,866				16,684				14,473				31,012				14,243
Charge-offs			(14,015	)			(15,039	)			(12,732	)			(28,820	)			(15,176	)
Recoveries			2,585				2,389				2,571				2,566				2,900
Net charge-offs			(11,430	)			(12,650	)			(10,161	)			(26,254	)			(12,276	)
Ending Balance		$	100,358			$	94,922			$	90,888			$	86,576			$	81,818
PROVISION FOR LOAN LOSSES
Florida		$	10,733			$	6,491			$	3,167			$	24,145			$	9,557
Mississippi (1)			4,386				5,756				8,476				3,667				2,807
Tennessee (2)			1,621				1,461				27				2,440				779
Texas			126				2,976				2,803				760				1,100
Total provision for loan losses		$	16,866			$	16,684			$	14,473			$	31,012			$	14,243
NET CHARGE-OFFS
Florida		$	6,933			$	7,160			$	3,779			$	22,064			$	9,688
Mississippi (1)			3,455				4,387				4,515				4,214				1,574
Tennessee (2)			785				816				1,291				48				186
Texas			257				287				576				(72	)			828
Total net charge-offs		$	11,430			$	12,650			$	10,161			$	26,254			$	12,276
CREDIT QUALITY RATIOS
Net charge offs/average loans			0.66	%			0.73	%			0.58	%			1.49	%			0.69	%
Provision for loan losses/average loans			0.98	%			0.96	%			0.83	%			1.76	%			0.80	%
Nonperforming loans/total loans (incl LHFS)			1.94	%			1.64	%			1.53	%			1.35	%			1.08	%
Nonperforming assets/total loans (incl LHFS)			2.54	%			2.19	%			2.00	%			1.68	%			1.21	%
Nonperforming assets/total loans (incl LHFS) +ORE			2.53	%			2.18	%			1.99	%			1.67	%			1.21	%
ALL/total loans (excl LHFS)			1.51	%			1.41	%			1.35	%			1.26	%			1.17	%
ALL-commercial/total commercial loans			1.95	%			1.79	%			1.76	%			1.67	%			1.52	%
ALL-consumer/total consumer and home mortgage loans			0.73	%			0.72	%			0.64	%			0.60	%			0.60	%
ALL/nonperforming loans			74.61	%			83.24	%			86.33	%			90.84	%			104.90	%
ALL/nonperforming loans (excl impaired loans)			137.47	%			166.07	%			145.21	%			173.64	%			142.72	%
CAPITAL RATIOS
Total equity/total assets			12.28	%			12.04	%			10.44	%			10.05	%			10.30	%
Common equity/total assets			10.18	%			9.94	%			10.44	%			10.05	%			10.30	%
Tangible equity/tangible assets			9.37	%			9.11	%			7.22	%			6.88	%			7.05	%
Tangible common equity/tangible assets			7.20	%			6.95	%			7.22	%			6.88	%			7.05	%
Tier 1 leverage ratio			10.17	%			10.42	%			8.11	%			7.87	%			8.12	%
Tier 1 risk-based capital ratio			13.34	%			13.01	%			9.86	%			9.58	%			9.42	%
Total risk-based capital ratio			15.28	%			14.95	%			11.80	%			11.46	%			11.21	%
(1) - Mississippi includes Central and Southern Mississippi Regions
(2) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

March 31, 2009

($ in thousands except per share data)

(unaudited)

Note 1 – Issuance of Preferred Stock

On November 21, 2008, Trustmark issued 215,000 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A, (no par) liquidation preference $1,000 per share, (Senior Preferred) to the United States Department of the Treasury (Treasury) in a private placement transaction as part of the Troubled Assets Relief Program Capital Purchase Program, a voluntary initiative for U.S. financial institutions designed to support the economy by increasing financing to businesses and consumers. In the same transaction, Trustmark also issued to the Treasury a warrant to purchase 1,647,931 shares of Trustmark’s common stock at an exercise price of $19.57 per share.

The Senior Preferred pays cumulative dividends at the rate of 5.00% of the liquidation preference per year, payable on February 15, May 15, August 15 and November 15 of each year, in arrears, until, but excluding, February 15, 2014, and from that date thereafter at the rate of 9.00% of the liquidation preference per year. The term of the Senior Preferred is perpetual. Trustmark may redeem the Senior Preferred subject to the consent of Treasury and Trustmark’s primary federal banking regulator, the Board of Governors of the Federal Reserve System. Any redemption of the Senior Preferred will be at $1,000 per share plus any accrued and unpaid dividends.

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

Note 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 ($ in thousands):
		3/31/2009			12/31/2008			9/30/2008			6/30/2008			3/31/2008
SECURITIES AVAILABLE FOR SALE
U.S. Treasury and other U.S. Government agencies		$	26,019		$	31,892		$	7,547		$	6,042		$	7,075
Obligations of states and political subdivisions			125,366			98,653			39,132			40,678			32,659
Mortgage-backed securities
Pass-through securities:
Guaranteed by GNMA			10,658			8,726			6,754			7,049			4,135
Issued by FNMA and FHLMC			79,007			19,186			15,821			10,894			11,225
Other mortgage-backed securities:
Issued or guaranteed by FNMA, FHLMC, or GNMA			1,363,928			1,376,514			827,246			833,039			513,347
Corporate debt securities			8,069			7,870			11,129			11,247			17,305
Total securities available for sale		$	1,613,047		$	1,542,841		$	907,629		$	908,949		$	585,746
SECURITIES HELD TO MATURITY
Obligations of states and political subdivisions		$	95,799		$	102,901		$	98,799		$	102,212		$	107,628
Mortgage-backed securities
Pass-through securities:
Guaranteed by GNMA			5,325			-			-			-			-
Other mortgage-backed securities:
Issued or guaranteed by FNMA, FHLMC, or GNMA			155,553			156,728			157,524			158,529			159,559
Other securities			-			-			-			-			128
Total securities held to maturity		$	256,677		$	259,629		$	256,323		$	260,741		$	267,315
Management continues to focus on asset quality as one of the strategic goals of the securities portfolio, which is evidenced by the investment of approximately 89% of the portfolio in U.S. Treasury, U.S. Government agency-backed obligations and other AAA rated securities. None of the securities in the portfolio are considered to be sub-prime. Furthermore, outside of membership in the Federal Home Loan Bank of Dallas, Federal Reserve Bank and Depository Trust and Clearing Corporation, Trustmark does not hold any equity investment in government sponsored entities.

Note 3 – Loan Composition
LOANS BY TYPE		3/31/2009		12/31/2008		9/30/2008		6/30/2008		3/31/2008
Loans secured by real estate:
Construction, land development and other land loans		$ 1,000,020		$ 1,028,788		$ 1,062,319		$ 1,158,549		$ 1,212,052
Secured by 1-4 family residential properties		1,601,600		1,524,061		1,561,024		1,633,021		1,660,148
Secured by nonfarm, nonresidential properties		1,425,937		1,422,658		1,345,624		1,300,753		1,315,449
Other real estate secured		184,204		186,915		175,877		148,588		160,373
Commercial and industrial loans		1,258,887		1,305,938		1,328,035		1,313,620		1,286,578
Consumer loans		804,958		895,046		947,113		994,475		1,056,346
Other loans		364,991		358,997		320,738		310,369		321,088
Loans		6,640,597		6,722,403		6,740,730		6,859,375		7,012,034
Allowance for loan losses		(100,358)		(94,922)		(90,888)		(86,576)		(81,818)
Net Loans		$ 6,540,239		$ 6,627,481		$ 6,649,842		$ 6,772,799		$ 6,930,216
		March 31 ,2009
						Mississippi		Tennessee
						(Central and		(Memphis, TN
						Southern		and Northern
LOAN COMPOSITION BY REGION		Total		Florida		Regions)		MS Regions)		Texas
Loans secured by real estate:
Construction, land development and other land loans		$ 1,000,020		$ 276,315		$ 382,245		$ 81,293		$ 260,167
Secured by 1-4 family residential properties		1,601,600		93,911		1,305,295		170,656		31,738
Secured by nonfarm, nonresidential properties		1,425,937		180,649		797,064		211,010		237,214
Other real estate secured		184,204		12,747		142,104		10,877		18,476
Commercial and industrial loans		1,258,887		18,049		897,604		59,932		283,302
Consumer loans		804,958		2,531		761,984		29,928		10,515
Other loans		364,991		21,823		313,991		16,041		13,136
Loans		$ 6,640,597		$ 606,025		$ 4,600,287		$ 579,737		$ 854,548
CONSTRUCTION AND LAND DEVELOPMENT LOANS BY REGION
Lots		$ 118,776		$ 74,002		$ 27,832		$ 5,454		$ 11,488
Development		215,508		41,769		84,068		11,525		78,146
Unimproved land		286,171		99,063		106,399		33,785		46,924
1-4 family construction		169,421		25,878		78,388		10,694		54,461
Other construction		210,144		35,603		85,558		19,835		69,148
Construction and land development loans		$ 1,000,020		$ 276,315		$ 382,245		$ 81,293		$ 260,167

									Classified (3)
					Criticized		Special				Nonimpaired		Impaired
	FLORIDA CREDIT QUALITY		Total Loans		Loans (1)		Mention (2)		Accruing		Nonaccrual		Nonaccrual (4)
	Construction and land development loans:
	Lots		$ 74,002		$ 24,971		$ 4,635		$ 7,278		$ 10,453		$ 2,605
	Development		41,769		16,910		-		-		5,566		11,344
	Unimproved land		99,063		59,461		24,716		11,909		3,455		19,381
	1-4 family construction		25,878		11,777		-		1,651		539		9,587
	Other construction		35,603		21,992		2,749		9,320		3,314		6,609
	Construction and land development loans		276,315		135,111		32,100		30,158		23,327		49,526
	Commercial, commercial real estate and consumer		329,710		46,441		17,891		17,614		8,335		2,601
	Total Florida loans		$ 606,025		$ 181,552		$ 49,991		$ 47,772		$ 31,662		$ 52,127
							Loan Loss
			Total Loans				Reserve % of
			Less Impaired		Loan Loss		Non-Impaired
	FLORIDA CREDIT QUALITY		Loans		Reserves		Loans
	Construction and land development loans:
	Lots		$ 71,397		$ 3,899		5.46%
	Development		30,425		4,050		13.31%
	Unimproved land		79,682		5,046		6.33%
	1-4 family construction		16,291		487		2.99%
	Other construction		28,994		3,505		12.09%
	Construction and land development loans		226,789		16,987		7.49%
	Commercial, commercial real estate and consumer		327,109		7,878		2.41%
	Total Florida loans		$ 553,898		$ 24,865		4.49%
(1)	Criticized loans equal all special mention and classified loans.
(2)	Special mention loans exhibit potential credit weaknesses that, if not resolved, may ultimately result in a more severe classification.
(3)	Classified loans include those loans identified by management as exhibiting well-defined credit weaknesses that may jeopardize repayment in full of the debt.
(4)	All nonaccrual loans over $1 million are individually assessed for impairment in accordance with SFAS No. 114. Impaired loans have been determined to be collateral dependent and assessed using a fair value approach. Fair value estimates begin with appraised values, normally from recently received and reviewed appraisals. Appraised values are adjusted down for costs associated with asset disposal. When a loan is deemed to be impaired, the full difference between book value and the most likely estimate of the asset’s net realizable value is charged off.

LOAN COMPOSITION -FLORIDA			3/31/2009			12/31/2008			9/30/2008			6/30/2008			3/31/2008
Loans secured by real estate:
Construction, land development and other land loans			$	276,315		$	294,473		$	301,509		$	321,864		$	371,187
Secured by 1-4 family residential properties				93,911			91,559			90,790			93,946			95,664
Secured by nonfarm, nonresidential properties				180,649			179,123			176,512			178,869			179,658
Other real estate secured				12,747			12,632			12,518			12,648			12,388
Commercial and industrial loans				18,049			18,814			18,305			22,739			22,850
Consumer loans				2,531			3,206			3,008			2,905			2,604
Other loans				21,823			18,505			14,833			12,704			8,201
Loans			$	606,025		$	618,312		$	617,475		$	645,675		$	692,552
CONSTRUCTION AND LAND DEVELOPMENT LOANS - FLORIDA
Lots			$	74,002		$	76,849		$	82,472		$	84,936		$	91,163
Development				41,769			35,927			37,578			41,098			52,009
Unimproved land				99,063			114,232			111,548			120,422			134,428
1-4 family construction				25,878			29,246			29,265			33,151			46,170
Other construction				35,603			38,219			40,646			42,257			47,417
Construction and land development loans			$	276,315		$	294,473		$	301,509		$	321,864		$	371,187

Note 4 – Mortgage Banking
Trustmark utilizes derivative instruments to offset changes in the fair value of mortgage servicing rights (MSR) attributable to changes in interest rates. Changes in the fair value of the derivative instrument are recorded in mortgage banking income, net and are offset by the changes in the fair value of MSR, as shown in the accompanying table. MSR fair values represent the effect of present value decay and the effect of changes in interest rates. Ineffectiveness of hedging MSR fair value is measured by comparing total hedge cost to the fair value of the MSR asset attributable to market changes. The impact of this strategy resulted in a net positive ineffectiveness of $2.1 million and $7.4 million for the quarters ended March 31, 2009 and 2008, respectively. The accompanying table shows that the MSR value declined $352 thousand for the quarter ended March 31, 2009. This change is due to a slight decline in mortgage rates. More than offsetting the MSR change is a $2.4 million increase in the value of derivative instruments. Although 10-year Treasury yields increased during the quarter, income produced by the steep yield curve and option premium more than offset the market value decrease of the derivative instruments.
The following table illustrates the components of mortgage banking income included in noninterest income in the accompanying income statements:
		Quarter Ended
			3/31/2009				12/31/2008				9/30/2008				6/30/2008				3/31/2008
Mortgage servicing income, net		$	4,001			$	4,188			$	4,002			$	3,804			$	3,747
Change in fair value-MSR from market changes			(352	)			(36,846	)			(903	)			13,104				(10,193	)
Change in fair value of derivatives			2,407				37,160				1,680				(10,453	)			17,599
Change in fair value-MSR from runoff			(2,643	)			(2,101	)			(2,152	)			(2,303	)			(2,430	)
Gain on sales of loans			4,004				473				1,875				2,542				1,078
Other, net			3,490				1,519				(179	)			14				1,255
Mortgage banking, net		$	10,907			$	4,393			$	4,323			$	6,708			$	11,056

Note 5 – Earning Assets and Interest-Bearing Liabilities
The following table illustrates the yields on earning assets by category as well as the rates paid on interest-bearing liabilities on a tax equivalent basis:
		Quarter Ended
		3/31/2009			12/31/2008			9/30/2008			6/30/2008			3/31/2008
Securities – Taxable		5.22	%		4.87	%		4.79	%		4.66	%		4.34	%
Securities – Nontaxable		6.72	%		6.68	%		6.74	%		6.93	%		7.12	%
Securities – Total		5.31	%		5.01	%		4.99	%		4.90	%		4.84	%
Loans		5.37	%		5.86	%		6.07	%		6.19	%		6.70	%
FF Sold & Rev Repo		0.48	%		0.99	%		2.24	%		2.21	%		3.14	%
Other Earning Assets		3.14	%		2.98	%		4.34	%		4.61	%		6.22	%
Total Earning Assets		5.34	%		5.68	%		5.90	%		6.00	%		6.54	%
Interest-bearing Deposits		1.66	%		1.98	%		2.32	%		2.58	%		3.12	%
FF Pch & Repo		0.22	%		0.58	%		1.88	%		1.96	%		2.96	%
Borrowings		1.16	%		2.20	%		3.81	%		3.64	%		5.22	%
Total Interest-bearing Liabilities		1.46	%		1.83	%		2.34	%		2.58	%		3.23	%
Net interest margin		4.18	%		4.20	%		4.01	%		3.91	%		3.92	%
During the first quarter 2009, the net interest margin fell 2 basis points to 4.18% due to the normalization of the spread between LIBOR and overnight Federal Funds as well as continued repricing of fixed rate assets, mostly offset by a decline in liability costs.
During the fourth quarter of 2008, Trustmark’s net interest margin expanded to 4.20%, up 19 basis points from the prior quarter. This increase is primarily attributable to the abnormal spread between one month LIBOR and the overnight Fed Funds rate during the quarter that has since dissipated, as well as an increased level of fixed rate securities primarily funded by shorter, floating rate liabilities.

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