Trustmark Corporation Announces 2017 Financial Results

Trustmark Corporation (NASDAQ: TRMK) reported net income of $15.8
million in the fourth quarter of 2017, which represented diluted
earnings per share of $0.23. Included in the fourth quarter financial
results were one-time charges resulting from the re-measurement of
Trustmark’s net deferred tax assets due to the enactment of the Tax Cuts
and Jobs Act of 2017 (Tax Reform Act) and the elimination of a deferred
tax valuation allowance related to a prior merger, which collectively
reduced net income by $17.0 million, or $0.25 per diluted share.
Adjusting for these items, net income in the fourth quarter totaled
$32.7 million, representing diluted earnings per share of $0.48, an
increase of 11.6% when compared to the same period in the prior year.

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For the full year, Trustmark’s net income totaled $105.6 million, which
represented diluted earnings per share of $1.56. Excluding the one-time
charges referenced above as well as the non-routine items related to the
termination of Trustmark’s defined benefit pension plan ($10.9 million),
the RB Bancorporation merger ($2.0 million) and the non-taxable proceeds
related to life insurance ($4.9 million), diluted earnings per share
were $1.92 in 2017. Excluding non-routine items, diluted earnings per
share were $1.70 in 2016.

Trustmark’s Board of Directors declared a quarterly cash dividend of
$0.23 per share payable March 15, 2018, to shareholders of record on
March 1, 2018.

2017 Highlights

• Loans held for investment increased $718.8 million, or 9.2%, during
  the year
• Credit quality remained solid as net charge-offs represented 11 basis
  points of average loans
• Deposits increased $521.5 million, or 5.2%
• Expanded presence in attractive Huntsville, Alabama MSA with the
  merger of RB Bancorporation
• Revenue totaled $592.2 million, an increase of $30.7 million, or 5.5%

Gerard R. Host, President and CEO, stated, “Trustmark made significant
accomplishments in 2017. We continued to provide customers with the
products and services they desired as evidenced by our fourth
consecutive year of robust loan growth and solid performance across our
financial services businesses. Our Mortgage Banking, Insurance Services
and Wealth Management businesses posted another year of solid results.
We expanded our digital banking platform with the introduction of myTrustmark^®
Business, which was well received by our customers. We also made
investments to enhance our customer contact center as well as to replace
legacy-banking systems. In addition, we continued to realign delivery
channels in response to changing customer preferences and embraced
opportunities to enhance efficiency and profitability. Trustmark is
well-positioned to meet the needs of our customers and create long-term
value for our shareholders.”

Balance Sheet Management

• Continued balance sheet optimization as maturing investment securities
  were replaced with organic loan growth
• Deposit costs remained well controlled

Loans held for investment totaled $8.6 billion at December 31, 2017, an
increase of 1.9% from the prior quarter and 9.2% from the same period
one year earlier. Compared to the prior quarter, construction, land
development and other land loans expanded $37.5 million, driven by
growth in construction loans in Alabama. Other real estate secured loans
increased by $35.8 million over the prior quarter, as growth in
Mississippi and Alabama offset a minimal decrease in Tennessee. Loans
secured by 1-4 family residential properties grew $26.6 million quarter
over quarter, principally due to growth in Mississippi and Alabama.
Other loans, which include loans to nonprofits and financial
intermediaries, increased $25.4 million as growth in Mississippi, Texas
and Tennessee more than offset declines in Alabama and Florida.

Acquired loans totaled $261.5 million at December 31, 2017, down $22.2
million from the prior quarter. Collectively, loans held for investment
and acquired loans totaled $8.8 billion at December 31, 2017, up 1.6%
from the prior quarter and 8.7% from the prior year.

Deposits totaled $10.6 billion at December 31, 2017, an increase of
$345.8 million, or 3.4%, from the previous quarter and $521.5 million,
or 5.2%, year-over-year. Trustmark continues to maintain an attractive,
low-cost deposit base with approximately 59% of deposits in checking
accounts and a total cost of deposits of 0.28%. The total cost of
interest-bearing liabilities was 0.56% for the fourth quarter of 2017.

Trustmark’s capital position remained solid, reflecting the consistent
profitability of its diversified financial services businesses. At
December 31, 2017, Trustmark’s tangible equity to tangible assets ratio
was 8.77%, while its total risk-based capital ratio was 13.10%. Tangible
book value per share was $17.35 at December 31, 2017, up 3.5%
year-over-year.

Credit Quality

• Allowance for loan losses represented 320.8% of nonperforming loans,
  excluding specifically reviewed impaired loans
• Other real estate declined $5.1 million in the fourth quarter and
  $18.8 million year-over-year

Nonperforming loans totaled $67.6 million at December 31, 2017, down
2.5% from the prior quarter and up 37.3% year-over-year. Other real
estate totaled $43.2 million, reflecting a 10.6% linked-quarter decrease
and a 30.3% year-over-year reduction. Collectively, nonperforming assets
totaled $110.8 million, reflecting a linked-quarter and year-over-year
decrease of 5.8% and 0.4%, respectively.

Allocation of Trustmark's $76.7 million allowance for loan losses
represented 0.95% of commercial loans and 0.68% of consumer and home
mortgage loans, resulting in an allowance to total loans held for
investment of 0.90% at December 31, 2017. This represents a level
management considers commensurate with the inherent risk in the loan
portfolio. In aggregate, the allowance for both held for investment and
acquired loan losses represented 0.92% of total loans held for
investment and acquired loans.

Net charge-offs totaled $9.3 million in the fourth quarter resulting
from two impaired loans being written-down to collateral value. One of
the credits was impaired and reserved earlier in the year, while the
other was an existing substandard credit that was impaired, provisioned
and written-down during the fourth quarter.

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

Revenue Generation

• Net interest income (FTE) excluding acquired loans in 2017 totaled
  $402.9 million, up 7.2% from the prior year
• Noninterest income in 2017 totaled $184.7 million, up 6.2% from the
  prior year

Revenue in the fourth quarter totaled $148.0 million, down 0.3% from the
prior quarter, reflecting in part a seasonal reduction in noninterest
income. Net interest income (FTE) in the fourth quarter totaled $109.1
million, resulting in a net interest margin of 3.48%. Compared to the
prior quarter, net interest income (FTE) increased $214 thousand
primarily due to growth in interest income (FTE) from the held for sale
and held for investment loan portfolios, which was offset in part by
decreased yields on the securities portfolio. During the fourth quarter
of 2017, the yield on acquired loans totaled 9.27% and included $1.1
million in recoveries from the settlement of debt, which represented
approximately 1.63% of the annualized total acquired loan yield.
Excluding acquired loans, the net interest margin for the fourth quarter
of 2017 remained stable compared to the third quarter of 2017, as
increased yields on the loans held for investment and held for sale
portfolio were offset by decreased yields on the securities portfolio
and higher costs of interest-bearing deposits and other borrowings. Net
interest income (FTE) in 2017 totaled $427.3 million, resulting in a net
interest margin (FTE) of 3.48%; excluding acquired loans, the net
interest margin (FTE) was 3.36%.

Noninterest income totaled $44.0 million in the fourth quarter, down
from the prior quarter primarily because of seasonally lower insurance
commissions. In the fourth quarter, bank card and other fees totaled
$7.3 million, an increase of 1.6% from the prior quarter, while service
charges on deposit accounts totaled $11.2 million, down 0.3% from the
prior quarter. Other income, net decreased $1.1 million linked quarter,
primarily due to a decline in other miscellaneous income.

Insurance revenue in the fourth quarter totaled $8.8 million, reflecting
a seasonal decrease of 15.2% from the prior quarter and an increase of
4.2% compared to one year earlier. Insurance revenue in 2017 totaled
$38.2 million, up $1.4 million relative to the prior year. The solid
performance in 2017 reflects increased business development efforts and
initiatives that supported enhanced productivity.

Wealth management revenue totaled $7.7 million in the fourth quarter, an
increase of 2.6% when compared to the prior quarter and 2.9% from levels
one year earlier. The year-over-year increase is primarily attributable
to higher retail brokerage income. Wealth management revenue in 2017
totaled $30.3 million, in-line with the prior year. Trustmark remained
focused on servicing clients and realigned processes to enhance
productivity.

Mortgage banking revenue in the fourth quarter totaled $6.3 million, up
$1.9 million from the prior quarter. The linked-quarter increase is
primarily attributable to reduced net negative hedge ineffectiveness.
Mortgage loan production in the fourth quarter totaled $337.5 million, a
seasonal decrease of 1.2% from the prior quarter and a 17.0% decrease
year-over-year, primarily due to lower refinancing activity and rising
interest rates.

In 2017, mortgage banking revenue totaled $29.9 million, up 6.0% from
the prior year as a net positive mortgage servicing hedge
ineffectiveness and increased mortgage servicing income were offset in
part by lower secondary marketing gains. Mortgage loan production
totaled $1.4 billion in 2017, down 15.6% from the prior year primarily
due to an extremely competitive third party origination environment.

Noninterest Expense and Taxes

• Core noninterest expense in 2017 totaled $399.5 million
• Continued realignment of retail delivery channel
• Trustmark estimates its annual effective income tax rate will decrease
  to approximately 12% to 14% beginning in 2018 primarily as a result of
  the Tax Cuts and Jobs Act of 2017

Core noninterest expense, which excludes other real estate expense ($666
thousand), intangible amortization ($1.5 million) and non-recurring
items, totaled $100.8 million in the fourth quarter, an increase of $80
thousand on a comparable basis from the prior quarter and $3.6 million
from the prior year.

Salaries and benefits totaled $59.8 million in the fourth quarter, up
1.6% linked quarter primarily due to increased expense related to
incentive compensation programs. Services and fees increased 1.9% from
the prior quarter, reflecting higher spending on outside services and
fees and advertising. Other real estate expense totaled $666 thousand
during the fourth quarter, representing a 22.9% decrease compared to the
prior quarter.

Trustmark’s fourth quarter and year ended effective income tax rate
equaled 61.4% and 31.6%, respectively. Excluding the impact of the
re-measurement of net deferred tax assets of $25.6 million related to
the Tax Reform Act and the elimination of the deferred tax valuation
allowance of $8.7 million during the fourth quarter, Trustmark’s fourth
quarter and year ended effective tax rate would have been 19.9% and
20.6%, respectively. Beginning in 2018, Trustmark estimates its annual
effective income tax rate will be approximately 12% to 14% primarily as
a result of the Tax Reform Act. Trustmark’s effective income tax rate
continues to be less than the statutory rate primarily due to various
tax-exempt income items and its utilization of income tax credit
programs.

Trustmark is committed to developing and maintaining relationships,
supporting investments that promote profitable revenue growth and
realigning retail delivery channels to support changing customer
preferences. During 2017, Trustmark consolidated three branch offices
and reallocated a portion of those resources to opening a new banking
center. Over the last five years, Trustmark has consolidated 38 branch
offices with limited growth potential and established 10 banking centers
in attractive growth markets. In addition, Trustmark is piloting myTeller℠,
an interactive video teller service provided through a centralized
teller center which delivers most functions provided by traditional
tellers. The potential applications for this technology include
deployment beyond the traditional branch network and expanded service
hours, further enhancing customer convenience and improving operational
efficiency. Trustmark also introduced myTrustmark^®
Business, an enhanced and robust digital banking service for
commercial customers to meet growing mobile and online demand. Trustmark
remains committed to investments that promote profitable revenue growth
as well as reengineering and efficiency opportunities that enhance
long-term shareholder value.

Additional Information

As previously announced, Trustmark will conduct a conference call with
analysts on Wednesday, January 24, 2018, 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, February 7, 2018, in archived format at the same web address
or by calling (877) 344-7529, passcode 10115328.

Trustmark Corporation is a financial services company providing banking
and financial solutions through 198 offices in Alabama, Florida,
Mississippi, Tennessee and Texas.

Forward-Looking Statements

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

Risks that could cause actual results to differ materially from current
expectations of Management include, but are not limited to, changes in
the level of nonperforming assets and charge-offs, local, state and
national economic and market conditions, including potential market
impacts of efforts by the Federal Reserve Board to reduce the size of
its balance sheet and conditions in the housing and real estate markets
in the regions in which Trustmark operates and the extent and duration
of the current volatility in the credit and financial markets as well as
crude oil prices, changes in our ability to measure the fair value of
assets in our portfolio, material changes in the level and/or volatility
of market interest rates, the performance and demand for the products
and services we offer, including the level and timing of withdrawals
from our deposit accounts, the costs and effects of litigation and of
unexpected or adverse outcomes in such litigation, our ability to
attract noninterest-bearing deposits and other low-cost funds,
competition in loan and deposit pricing, as well as the entry of new
competitors into our markets through de novo expansion and acquisitions,
economic conditions, including the potential impact of 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 affect our consolidated
financial statements, changes in consumer spending, borrowings and
savings habits, technological changes, changes in the financial
performance or condition of our borrowers, changes in our ability to
control expenses, changes in our compensation and benefit plans, greater
than expected costs or difficulties related to the integration of
acquisitions or new products and lines of business, cyber-attacks and
other breaches which could affect our information system security,
natural disasters, environmental disasters, acts of war or terrorism,
and other risks described in our filings with the Securities and
Exchange Commission.

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

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2017
($ in thousands)
(unaudited)
																			Linked Quarter									Year over Year
QUARTERLY AVERAGE BALANCES					12/31/2017					9/30/2017					12/31/2016				$ Change					% Change				$ Change					% Change
Securities AFS-taxable				$	2,247,247				$	2,349,736				$	2,271,503				$	(102,489	)			-4.4	%			$	(24,256	)			-1.1	%
Securities AFS-nontaxable					61,691					67,994					91,495					(6,303	)			-9.3	%				(29,804	)			-32.6	%
Securities HTM-taxable					1,045,723					1,086,773					1,101,382					(41,050	)			-3.8	%				(55,659	)			-5.1	%
Securities HTM-nontaxable					32,781					32,829					33,675					(48	)			-0.1	%				(894	)			-2.7	%
Total securities					3,387,442					3,537,332					3,498,055					(149,890	)			-4.2	%				(110,613	)			-3.2	%
Loans (including loans held for sale)					8,686,916					8,532,523					7,855,444					154,393				1.8	%				831,472				10.6	%
Acquired loans					273,918					299,221					282,197					(25,303	)			-8.5	%				(8,279	)			-2.9	%
Fed funds sold and rev repos					1,724					3,582					1,418					(1,858	)			-51.9	%				306				21.6	%
Other earning assets					80,218					84,320					80,608					(4,102	)			-4.9	%				(390	)			-0.5	%
Total earning assets					12,430,218					12,456,978					11,717,722					(26,760	)			-0.2	%				712,496				6.1	%
Allowance for loan losses					(86,704	)				(85,363	)				(82,604	)				(1,341	)			-1.6	%				(4,100	)			-5.0	%
Cash and due from banks					315,586					312,409					314,420					3,177				1.0	%				1,166				0.4	%
Other assets					1,192,464					1,202,766					1,238,029					(10,302	)			-0.9	%				(45,565	)			-3.7	%
Total assets				$	13,851,564				$	13,886,790				$	13,187,567				$	(35,226	)			-0.3	%			$	663,997				5.0	%
Interest-bearing demand deposits				$	2,244,625				$	2,192,064				$	1,920,273				$	52,561				2.4	%			$	324,352				16.9	%
Savings deposits					3,291,407					3,284,323					3,049,733					7,084				0.2	%				241,674				7.9	%
Time deposits					1,756,576					1,736,683					1,638,853					19,893				1.1	%				117,723				7.2	%
Total interest-bearing deposits					7,292,608					7,213,070					6,608,859					79,538				1.1	%				683,749				10.3	%
Fed funds purchased and repos					475,850					547,863					494,193					(72,013	)			-13.1	%				(18,343	)			-3.7	%
Short-term borrowings					1,276,543					1,335,476					435,576					(58,933	)			-4.4	%				840,967				n/m
Long-term FHLB advances					954					970					685,844					(16	)			-1.6	%				(684,890	)			-99.9	%
Subordinated notes					—					—					40,757					—				n/m					(40,757	)			-100.0	%
Junior subordinated debt securities					61,856					61,856					61,856					—				0.0	%				—				0.0	%
Total interest-bearing liabilities					9,107,811					9,159,235					8,327,085					(51,424	)			-0.6	%				780,726				9.4	%
Noninterest-bearing deposits					2,994,292					3,003,763					3,160,959					(9,471	)			-0.3	%				(166,667	)			-5.3	%
Other liabilities					169,828					145,925					166,379					23,903				16.4	%				3,449				2.1	%
Total liabilities					12,271,931					12,308,923					11,654,423					(36,992	)			-0.3	%				617,508				5.3	%
Shareholders' equity					1,579,633					1,577,867					1,533,144					1,766				0.1	%				46,489				3.0	%
Total liabilities and equity				$	13,851,564				$	13,886,790				$	13,187,567				$	(35,226	)			-0.3	%			$	663,997				5.0	%
n/m - percentage changes greater than +/- 100% are considered not meaningful
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2017
($ in thousands)
(unaudited)
																			Linked Quarter									Year over Year
PERIOD END BALANCES					12/31/2017					9/30/2017					12/31/2016				$ Change					% Change				$ Change					% Change
Cash and due from banks				$	335,768				$	350,123				$	327,706				$	(14,355	)			-4.1	%			$	8,062				2.5	%
Fed funds sold and rev repos					615					3,215					500					(2,600	)			-80.9	%				115				23.0	%
Securities available for sale					2,238,635					2,369,089					2,356,682					(130,454	)			-5.5	%				(118,047	)			-5.0	%
Securities held to maturity					1,056,486					1,102,283					1,158,643					(45,797	)			-4.2	%				(102,157	)			-8.8	%
Loans held for sale (LHFS)					180,512					204,157					175,927					(23,645	)			-11.6	%				4,585				2.6	%
Loans held for investment (LHFI)					8,569,967					8,407,341					7,851,213					162,626				1.9	%				718,754				9.2	%
Allowance for loan losses					(76,733	)				(80,332	)				(71,265	)				3,599				4.5	%				(5,468	)			-7.7	%
Net LHFI					8,493,234					8,327,009					7,779,948					166,225				2.0	%				713,286				9.2	%
Acquired loans					261,517					283,757					272,247					(22,240	)			-7.8	%				(10,730	)			-3.9	%
Allowance for loan losses, acquired loans					(4,079	)				(5,768	)				(11,397	)				1,689				29.3	%				7,318				64.2	%
Net acquired loans					257,438					277,989					260,850					(20,551	)			-7.4	%				(3,412	)			-1.3	%
Net LHFI and acquired loans					8,750,672					8,604,998					8,040,798					145,674				1.7	%				709,874				8.8	%
Premises and equipment, net					179,339					181,312					184,987					(1,973	)			-1.1	%				(5,648	)			-3.1	%
Mortgage servicing rights					84,269					81,477					80,239					2,792				3.4	%				4,030				5.0	%
Goodwill					379,627					379,627					366,156					—				0.0	%				13,471				3.7	%
Identifiable intangible assets					16,360					17,883					20,680					(1,523	)			-8.5	%				(4,320	)			-20.9	%
Other real estate					43,228					48,356					62,051					(5,128	)			-10.6	%				(18,823	)			-30.3	%
Other assets					532,442					542,135					577,964					(9,693	)			-1.8	%				(45,522	)			-7.9	%
Total assets				$	13,797,953				$	13,884,655				$	13,352,333				$	(86,702	)			-0.6	%			$	445,620				3.3	%
Deposits:
Noninterest-bearing				$	2,978,074				$	2,998,013				$	2,973,238				$	(19,939	)			-0.7	%			$	4,836				0.2	%
Interest-bearing					7,599,438					7,233,729					7,082,774					365,709				5.1	%				516,664				7.3	%
Total deposits					10,577,512					10,231,742					10,056,012					345,770				3.4	%				521,500				5.2	%
Fed funds purchased and repos					469,827					545,603					539,817					(75,776	)			-13.9	%				(69,990	)			-13.0	%
Short-term borrowings					971,049					1,322,159					769,778					(351,110	)			-26.6	%				201,271				26.1	%
Long-term FHLB advances					946					962					251,049					(16	)			-1.7	%				(250,103	)			-99.6	%
Subordinated notes					—					—					—					—				n/m					—				n/m
Junior subordinated debt securities					61,856					61,856					61,856					—				0.0	%				—				0.0	%
Other liabilities					145,062					139,798					153,613					5,264				3.8	%				(8,551	)			-5.6	%
Total liabilities					12,226,252					12,302,120					11,832,125					(75,868	)			-0.6	%				394,127				3.3	%
Common stock					14,115					14,114					14,091					1				0.0	%				24				0.2	%
Capital surplus					369,124					368,131					366,563					993				0.3	%				2,561				0.7	%
Retained earnings					1,228,187					1,228,115					1,185,352					72				0.0	%				42,835				3.6	%
Accum other comprehensive loss, net of tax					(39,725	)				(27,825	)				(45,798	)				(11,900	)			-42.8	%				6,073				13.3	%
Total shareholders' equity					1,571,701					1,582,535					1,520,208					(10,834	)			-0.7	%				51,493				3.4	%
Total liabilities and equity				$	13,797,953				$	13,884,655				$	13,352,333				$	(86,702	)			-0.6	%			$	445,620				3.3	%
n/m - percentage changes greater than +/- 100% are considered not meaningful
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2017
($ in thousands except per share data)
(unaudited)
				Quarter Ended															Linked Quarter									Year over Year
INCOME STATEMENTS					12/31/2017					9/30/2017					12/31/2016				$ Change					% Change				$ Change					% Change
Interest and fees on LHFS & LHFI-FTE				$	95,816				$	93,703				$	81,346				$	2,113				2.3	%			$	14,470				17.8	%
Interest and fees on acquired loans					6,401					6,625					8,290					(224	)			-3.4	%				(1,889	)			-22.8	%
Interest on securities-taxable					18,327					19,291					18,775					(964	)			-5.0	%				(448	)			-2.4	%
Interest on securities-tax exempt-FTE					1,035					1,104					1,340					(69	)			-6.3	%				(305	)			-22.8	%
Interest on fed funds sold and rev repos					7					14					4					(7	)			-50.0	%				3				75.0	%
Other interest income					473					355					335					118				33.2	%				138				41.2	%
Total interest income-FTE					122,059					121,092					110,090					967				0.8	%				11,969				10.9	%
Interest on deposits					7,284					6,381					3,380					903				14.2	%				3,904				n/m
Interest on fed funds pch and repos					1,116					1,301					471					(185	)			-14.2	%				645				n/m
Other interest expense					4,555					4,520					2,662					35				0.8	%				1,893				71.1	%
Total interest expense					12,955					12,202					6,513					753				6.2	%				6,442				98.9	%
Net interest income-FTE					109,104					108,890					103,577					214				0.2	%				5,527				5.3	%
Provision for loan losses, LHFI					5,739					3,672					1,834					2,067				56.3	%				3,905				n/m
Provision for loan losses, acquired loans					(1,573	)				(1,653	)				1,150					80				4.8	%				(2,723	)			n/m
Net interest income after provision-FTE					104,938					106,871					100,593					(1,933	)			-1.8	%				4,345				4.3	%
Service charges on deposit accounts					11,193					11,223					11,444					(30	)			-0.3	%				(251	)			-2.2	%
Bank card and other fees					7,266					7,150					6,796					116				1.6	%				470				6.9	%
Mortgage banking, net					6,284					4,425					5,428					1,859				42.0	%				856				15.8	%
Insurance commissions					8,813					10,398					8,459					(1,585	)			-15.2	%				354				4.2	%
Wealth management					7,723					7,530					7,505					193				2.6	%				218				2.9	%
Other, net					2,681					3,740					2,092					(1,059	)			-28.3	%				589				28.2	%
Nonint inc-excl sec gains (losses), net					43,960					44,466					41,724					(506	)			-1.1	%				2,236				5.4	%
Security gains (losses), net					—					14					—					(14	)			-100.0	%				—				n/m
Total noninterest income					43,960					44,480					41,724					(520	)			-1.2	%				2,236				5.4	%
Salaries and employee benefits					59,788					58,837					58,168					951				1.6	%				1,620				2.8	%
Defined benefit plan termination					—					—					—					—				n/m					—				n/m
Services and fees					15,419					15,133					14,751					286				1.9	%				668				4.5	%
Net occupancy-premises					6,617					6,702					6,426					(85	)			-1.3	%				191				3.0	%
Equipment expense					5,996					6,297					6,172					(301	)			-4.8	%				(176	)			-2.9	%
Other real estate expense					666					864					525					(198	)			-22.9	%				141				26.9	%
FDIC assessment expense					2,868					2,816					2,562					52				1.8	%				306				11.9	%
Other expense					11,597					12,437					11,663					(840	)			-6.8	%				(66	)			-0.6	%
Total noninterest expense					102,951					103,086					100,267					(135	)			-0.1	%				2,684				2.7	%
Income before income taxes and tax eq adj					45,947					48,265					42,050					(2,318	)			-4.8	%				3,897				9.3	%
Tax equivalent adjustment					5,060					4,978					4,725					82				1.6	%				335				7.1	%
Income before income taxes					40,887					43,287					37,325					(2,400	)			-5.5	%				3,562				9.5	%
Income taxes					25,119					8,708					8,402					16,411				n/m					16,717				n/m
Net income				$	15,768				$	34,579				$	28,923				$	(18,811	)			-54.4	%			$	(13,155	)			-45.5	%
Per share data
Earnings per share - basic				$	0.23				$	0.51				$	0.43				$	(0.28	)			-54.9	%			$	(0.20	)			-46.5	%
Earnings per share - diluted				$	0.23				$	0.51				$	0.43				$	(0.28	)			-54.9	%			$	(0.20	)			-46.5	%
Dividends per share				$	0.23				$	0.23				$	0.23					—				0.0	%				—				0.0	%
Weighted average shares outstanding
Basic					67,742,792					67,741,655					67,627,496
Diluted					67,938,986					67,916,418					67,817,770
Period end shares outstanding					67,746,094					67,742,135					67,628,618
n/m - percentage changes greater than +/- 100% are considered not meaningful
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2017
($ in thousands)
(unaudited)
				Quarter Ended															Linked Quarter									Year over Year
NONPERFORMING ASSETS (1)					12/31/2017					9/30/2017					12/31/2016				$ Change					% Change				$ Change					% Change
Nonaccrual loans
Alabama				$	3,083				$	1,629				$	665				$	1,454				89.3	%			$	2,418				n/m
Florida					3,034					3,242					3,644					(208	)			-6.4	%				(610	)			-16.7	%
Mississippi (2)					49,129					59,483					37,771					(10,354	)			-17.4	%				11,358				30.1	%
Tennessee (3)					4,436					4,589					6,213					(153	)			-3.3	%				(1,777	)			-28.6	%
Texas					7,893					346					941					7,547				n/m					6,952				n/m
Total nonaccrual loans					67,575					69,289					49,234					(1,714	)			-2.5	%				18,341				37.3	%
Other real estate
Alabama					11,714					12,726					15,989					(1,012	)			-8.0	%				(4,275	)			-26.7	%
Florida					13,937					16,100					22,582					(2,163	)			-13.4	%				(8,645	)			-38.3	%
Mississippi (2)					14,260					15,319					15,646					(1,059	)			-6.9	%				(1,386	)			-8.9	%
Tennessee (3)					2,535					2,671					6,183					(136	)			-5.1	%				(3,648	)			-59.0	%
Texas					782					1,540					1,651					(758	)			-49.2	%				(869	)			-52.6	%
Total other real estate					43,228					48,356					62,051					(5,128	)			-10.6	%				(18,823	)			-30.3	%
Total nonperforming assets				$	110,803				$	117,645				$	111,285				$	(6,842	)			-5.8	%			$	(482	)			-0.4	%
LOANS PAST DUE OVER 90 DAYS (1)
LHFI				$	2,171				$	2,244				$	1,832				$	(73	)			-3.3	%			$	339				18.5	%
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)				$	35,544				$	32,332				$	28,345				$	3,212				9.9	%			$	7,199				25.4	%
				Quarter Ended															Linked Quarter									Year over Year
ALLOWANCE FOR LOAN LOSSES (1)					12/31/2017					9/30/2017					12/31/2016				$ Change					% Change				$ Change					% Change
Beginning Balance				$	80,332				$	76,184				$	70,871				$	4,148				5.4	%			$	9,461				13.3	%
Provision for loan losses					5,739					3,672					1,834					2,067				56.3	%				3,905				n/m
Charge-offs					(12,075	)				(2,752	)				(4,037	)				(9,323	)			n/m					(8,038	)			n/m
Recoveries					2,737					3,228					2,597					(491	)			-15.2	%				140				5.4	%
Net (charge-offs) recoveries					(9,338	)				476					(1,440	)				(9,814	)			n/m					(7,898	)			n/m
Ending Balance				$	76,733				$	80,332				$	71,265				$	(3,599	)			-4.5	%			$	5,468				7.7	%
PROVISION FOR LOAN LOSSES (1)
Alabama				$	559				$	1,218				$	763				$	(659	)			-54.1	%			$	(204	)			-26.7	%
Florida					(1,235	)				(744	)				(655	)				(491	)			-66.0	%				(580	)			-88.5	%
Mississippi (2)					2,779					1,860					1,873					919				49.4	%				906				48.4	%
Tennessee (3)					(439	)				(72	)				(118	)				(367	)			n/m					(321	)			n/m
Texas					4,075					1,410					(29	)				2,665				n/m					4,104				n/m
Total provision for loan losses				$	5,739				$	3,672				$	1,834				$	2,067				56.3	%			$	3,905				n/m
NET CHARGE-OFFS (RECOVERIES) (1)
Alabama				$	196				$	314				$	368				$	(118	)			-37.6	%			$	(172	)			-46.7	%
Florida					(946	)				(796	)				(502	)				(150	)			-18.8	%				(444	)			-88.4	%
Mississippi (2)					5,574					(11	)				1,591					5,585				n/m					3,983				n/m
Tennessee (3)					79					85					(8	)				(6	)			-7.1	%				87				n/m
Texas					4,435					(68	)				(9	)				4,503				n/m					4,444				n/m
Total net charge-offs (recoveries)				$	9,338				$	(476	)			$	1,440				$	9,814				n/m				$	7,898				n/m
(1) - Excludes acquired loans.
(2) - Mississippi includes Central and Southern Mississippi Regions.
(3) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.
n/m - percentage changes greater than +/- 100% are considered not meaningful
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2017
($ in thousands)
(unaudited)
				Quarter Ended																									Year Ended
AVERAGE BALANCES					12/31/2017					9/30/2017					6/30/2017					3/31/2017					12/31/2016					12/31/2017					12/31/2016
Securities AFS-taxable				$	2,247,247				$	2,349,736				$	2,334,600				$	2,252,162				$	2,271,503				$	2,296,070				$	2,236,663
Securities AFS-nontaxable					61,691					67,994					75,640					88,522					91,495					73,373					97,942
Securities HTM-taxable					1,045,723					1,086,773					1,108,158					1,124,692					1,101,382					1,091,108					1,120,267
Securities HTM-nontaxable					32,781					32,829					32,878					33,009					33,675					32,874					34,616
Total securities					3,387,442					3,537,332					3,551,276					3,498,385					3,498,055					3,493,425					3,489,488
Loans (including loans held for sale)					8,686,916					8,532,523					8,348,758					8,074,449					7,855,444					8,412,673					7,592,223
Acquired loans					273,918					299,221					315,558					250,482					282,197					284,898					331,736
Fed funds sold and rev repos					1,724					3,582					3,184					397					1,418					2,229					1,105
Other earning assets					80,218					84,320					77,770					79,515					80,608					80,468					70,029
Total earning assets					12,430,218					12,456,978					12,296,546					11,903,228					11,717,722					12,273,693					11,484,581
Allowance for loan losses					(86,704	)				(85,363	)				(83,328	)				(83,394	)				(82,604	)				(84,708	)				(82,414	)
Cash and due from banks					315,586					312,409					307,966					310,542					314,420					311,642					291,868
Other assets					1,192,464					1,202,766					1,229,981					1,235,469					1,238,029					1,215,019					1,243,985
Total assets				$	13,851,564				$	13,886,790				$	13,751,165				$	13,365,845				$	13,187,567				$	13,715,646				$	12,938,020
Interest-bearing demand deposits				$	2,244,625				$	2,192,064				$	2,035,491				$	1,981,982				$	1,920,273				$	2,114,475				$	1,866,225
Savings deposits					3,291,407					3,284,323					3,337,374					3,319,572					3,049,733					3,308,027					3,140,060
Time deposits					1,756,576					1,736,683					1,777,529					1,650,251					1,638,853					1,730,569					1,665,516
Total interest-bearing deposits					7,292,608					7,213,070					7,150,394					6,951,805					6,608,859					7,153,071					6,671,801
Fed funds purchased and repos					475,850					547,863					525,523					498,963					494,193					512,085					495,197
Short-term borrowings					1,276,543					1,335,476					1,047,107					887,848					435,576					1,138,353					370,008
Long-term FHLB advances					954					970					141,097					251,033					685,844					97,561					634,300
Subordinated notes					—					—					—					—					40,757					—					47,662
Junior subordinated debt securities					61,856					61,856					61,856					61,856					61,856					61,856					61,856
Total interest-bearing liabilities					9,107,811					9,159,235					8,925,977					8,651,505					8,327,085					8,962,926					8,280,824
Noninterest-bearing deposits					2,994,292					3,003,763					3,110,125					3,008,176					3,160,959					3,028,982					2,996,886
Other liabilities					169,828					145,925					162,823					173,066					166,379					162,854					142,355
Total liabilities					12,271,931					12,308,923					12,198,925					11,832,747					11,654,423					12,154,762					11,420,065
Shareholders' equity					1,579,633					1,577,867					1,552,240					1,533,098					1,533,144					1,560,884					1,517,955
Total liabilities and equity				$	13,851,564				$	13,886,790				$	13,751,165				$	13,365,845				$	13,187,567				$	13,715,646				$	12,938,020
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2017
($ in thousands)
(unaudited)
PERIOD END BALANCES					12/31/2017					9/30/2017					6/30/2017					3/31/2017					12/31/2016
Cash and due from banks				$	335,768				$	350,123				$	318,329				$	379,590				$	327,706
Fed funds sold and rev repos					615					3,215					6,900					500					500
Securities available for sale					2,238,635					2,369,089					2,447,688					2,365,554					2,356,682
Securities held to maturity					1,056,486					1,102,283					1,139,754					1,156,067					1,158,643
Loans held for sale (LHFS)					180,512					204,157					203,652					174,090					175,927
Loans held for investment (LHFI)					8,569,967					8,407,341					8,296,045					8,004,657					7,851,213
Allowance for loan losses					(76,733	)				(80,332	)				(76,184	)				(72,445	)				(71,265	)
Net LHFI					8,493,234					8,327,009					8,219,861					7,932,212					7,779,948
Acquired loans					261,517					283,757					314,910					218,242					272,247
Allowance for loan losses, acquired loans					(4,079	)				(5,768	)				(7,423	)				(10,006	)				(11,397	)
Net acquired loans					257,438					277,989					307,487					208,236					260,850
Net LHFI and acquired loans					8,750,672					8,604,998					8,527,348					8,140,448					8,040,798
Premises and equipment, net					179,339					181,312					182,315					183,311					184,987
Mortgage servicing rights					84,269					81,477					82,628					82,758					80,239
Goodwill					379,627					379,627					379,627					366,156					366,156
Identifiable intangible assets					16,360					17,883					19,422					19,117					20,680
Other real estate					43,228					48,356					49,958					55,968					62,051
Other assets					532,442					542,135					551,517					566,802					577,964
Total assets				$	13,797,953				$	13,884,655				$	13,909,138				$	13,490,361				$	13,352,333
Deposits:
Noninterest-bearing				$	2,978,074				$	2,998,013				$	3,092,915				$	3,209,727				$	2,973,238
Interest-bearing					7,599,438					7,233,729					7,330,476					6,894,745					7,082,774
Total deposits					10,577,512					10,231,742					10,423,391					10,104,472					10,056,012
Fed funds purchased and repos					469,827					545,603					508,068					524,335					539,817
Short-term borrowings					971,049					1,322,159					1,222,592					864,690					769,778
Long-term FHLB advances					946					962					978					250,994					251,049
Subordinated notes					—					—					—					—					—
Junior subordinated debt securities					61,856					61,856					61,856					61,856					61,856
Other liabilities					145,062					139,798					130,335					146,053					153,613
Total liabilities					12,226,252					12,302,120					12,347,220					11,952,400					11,832,125
Common stock					14,115					14,114					14,114					14,112					14,091
Capital surplus					369,124					368,131					367,075					365,951					366,563
Retained earnings					1,228,187					1,228,115					1,209,238					1,200,903					1,185,352
Accum other comprehensive loss, net of tax					(39,725	)				(27,825	)				(28,509	)				(43,005	)				(45,798	)
Total shareholders' equity					1,571,701					1,582,535					1,561,918					1,537,961					1,520,208
Total liabilities and equity				$	13,797,953				$	13,884,655				$	13,909,138				$	13,490,361				$	13,352,333
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2017
($ in thousands except per share data)
(unaudited)
				Quarter Ended																									Year Ended
INCOME STATEMENTS					12/31/2017					9/30/2017					6/30/2017					3/31/2017					12/31/2016					12/31/2017					12/31/2016
Interest and fees on LHFS & LHFI-FTE				$	95,816				$	93,703				$	89,486				$	83,790				$	81,346				$	362,795				$	316,007
Interest and fees on acquired loans					6,401					6,625					6,263					5,189					8,290					24,478					30,144
Interest on securities-taxable					18,327					19,291					19,377					19,197					18,775					76,192					77,614
Interest on securities-tax exempt-FTE					1,035					1,104					1,178					1,300					1,340					4,617					5,654
Interest on fed funds sold and rev repos					7					14					11					1					4					33					14
Other interest income					473					355					371					267					335					1,466					988
Total interest income-FTE					122,059					121,092					116,686					109,744					110,090					469,581					430,421
Interest on deposits					7,284					6,381					5,107					3,945					3,380					22,717					12,748
Interest on fed funds pch and repos					1,116					1,301					1,037					698					471					4,152					1,717
Other interest expense					4,555					4,520					3,628					2,673					2,662					15,376					10,082
Total interest expense					12,955					12,202					9,772					7,316					6,513					42,245					24,547
Net interest income-FTE					109,104					108,890					106,914					102,428					103,577					427,336					405,874
Provision for loan losses, LHFI					5,739					3,672					2,921					2,762					1,834					15,094					10,957
Provision for loan losses, acquired loans					(1,573	)				(1,653	)				(2,564	)				(1,605	)				1,150					(7,395	)				3,757
Net interest income after provision-FTE					104,938					106,871					106,557					101,271					100,593					419,637					391,160
Service charges on deposit accounts					11,193					11,223					10,755					10,832					11,444					44,003					45,253
Bank card and other fees					7,266					7,150					7,370					6,500					6,796					28,286					27,906
Mortgage banking, net					6,284					4,425					9,008					10,185					5,428					29,902					28,212
Insurance commissions					8,813					10,398					9,745					9,212					8,459					38,168					36,764
Wealth management					7,723					7,530					7,674					7,413					7,505					30,340					30,492
Other, net					2,681					3,740					5,637					1,891					2,092					13,949					5,626
Nonint inc-excl sec gains (losses), net					43,960					44,466					50,189					46,033					41,724					184,648					174,253
Security gains (losses), net					—					14					1					—					—					15					(310	)
Total noninterest income					43,960					44,480					50,190					46,033					41,724					184,663					173,943
Salaries and employee benefits					59,788					58,837					59,060					57,302					58,168					234,987					239,637
Defined benefit plan termination					—					—					17,644					—					—					17,644					—
Services and fees					15,419					15,133					15,009					15,332					14,751					60,893					58,695
Net occupancy-premises					6,617					6,702					6,210					6,238					6,426					25,767					24,982
Equipment expense					5,996					6,297					6,162					5,998					6,172					24,453					24,225
Other real estate expense					666					864					383					1,759					525					3,672					586
FDIC assessment expense					2,868					2,816					2,686					2,640					2,562					11,010					11,243
Other expense					11,597					12,437					14,921					12,788					11,663					51,743					47,930
Total noninterest expense					102,951					103,086					122,075					102,057					100,267					430,169					407,298
Income before income taxes and tax eq adj					45,947					48,265					34,672					45,247					42,050					174,131					157,805
Tax equivalent adjustment					5,060					4,978					4,910					4,838					4,725					19,786					18,341
Income before income taxes					40,887					43,287					29,762					40,409					37,325					154,345					139,464
Income taxes					25,119					8,708					5,727					9,161					8,402					48,715					31,053
Net income				$	15,768				$	34,579				$	24,035				$	31,248				$	28,923				$	105,630				$	108,411
Per share data
Earnings per share - basic				$	0.23				$	0.51				$	0.35				$	0.46				$	0.43				$	1.56				$	1.60
Earnings per share - diluted				$	0.23				$	0.51				$	0.35				$	0.46				$	0.43				$	1.56				$	1.60
Dividends per share				$	0.23				$	0.23				$	0.23				$	0.23				$	0.23				$	0.92				$	0.92
Weighted average shares outstanding
Basic					67,742,792					67,741,655					67,736,298					67,687,365					67,627,496					67,727,219					67,620,485
Diluted					67,938,986					67,916,418					67,892,532					67,845,785					67,817,770					67,886,805					67,784,464
Period end shares outstanding					67,746,094					67,742,135					67,740,901					67,729,434					67,628,618					67,746,094					67,628,618
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2017
($ in thousands)
(unaudited)
		Quarter Ended
NONPERFORMING ASSETS (1)			12/31/2017				9/30/2017				6/30/2017				3/31/2017				12/31/2016
Nonaccrual loans
Alabama		$	3,083			$	1,629			$	1,723			$	1,649			$	665
Florida			3,034				3,242				3,174				3,559				3,644
Mississippi (2)			49,129				59,483				63,889				49,349				37,771
Tennessee (3)			4,436				4,589				4,975				5,185				6,213
Texas			7,893				346				383				1,565				941
Total nonaccrual loans			67,575				69,289				74,144				61,307				49,234
Other real estate
Alabama			11,714				12,726				13,301				13,953				15,989
Florida			13,937				16,100				17,377				21,577				22,582
Mississippi (2)			14,260				15,319				14,377				14,974				15,646
Tennessee (3)			2,535				2,671				3,363				4,706				6,183
Texas			782				1,540				1,540				758				1,651
Total other real estate			43,228				48,356				49,958				55,968				62,051
Total nonperforming assets		$	110,803			$	117,645			$	124,102			$	117,275			$	111,285
LOANS PAST DUE OVER 90 DAYS (1)
LHFI		$	2,171			$	2,244			$	1,216			$	1,307			$	1,832
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)		$	35,544			$	32,332			$	29,906			$	31,147			$	28,345
		Quarter Ended																				Year Ended
ALLOWANCE FOR LOAN LOSSES (1)			12/31/2017				9/30/2017				6/30/2017				3/31/2017				12/31/2016				12/31/2017				12/31/2016
Beginning Balance		$	80,332			$	76,184			$	72,445			$	71,265			$	70,871			$	71,265			$	67,619
Provision for loan losses			5,739				3,672				2,921				2,762				1,834				15,094				10,957
Charge-offs			(12,075	)			(2,752	)			(2,118	)			(4,202	)			(4,037	)			(21,147	)			(18,930	)
Recoveries			2,737				3,228				2,936				2,620				2,597				11,521				11,619
Net (charge-offs) recoveries			(9,338	)			476				818				(1,582	)			(1,440	)			(9,626	)			(7,311	)
Ending Balance		$	76,733			$	80,332			$	76,184			$	72,445			$	71,265			$	76,733			$	71,265
PROVISION FOR LOAN LOSSES (1)
Alabama		$	559			$	1,218			$	866			$	1,189			$	763			$	3,832			$	2,624
Florida			(1,235	)			(744	)			(975	)			3				(655	)			(2,951	)			(1,806	)
Mississippi (2)			2,779				1,860				2,268				1,826				1,873				8,733				3,591
Tennessee (3)			(439	)			(72	)			322				208				(118	)			19				897
Texas			4,075				1,410				440				(464	)			(29	)			5,461				5,651
Total provision for loan losses		$	5,739			$	3,672			$	2,921			$	2,762			$	1,834			$	15,094			$	10,957
NET CHARGE-OFFS (RECOVERIES) (1)
Alabama		$	196			$	314			$	(29	)		$	66			$	368			$	547			$	905
Florida			(946	)			(796	)			(973	)			(155	)			(502	)			(2,870	)			(1,940	)
Mississippi (2)			5,574				(11	)			33				1,759				1,591				7,355				3,764
Tennessee (3)			79				85				146				83				(8	)			393				326
Texas			4,435				(68	)			5				(171	)			(9	)			4,201				4,256
Total net charge-offs (recoveries)		$	9,338			$	(476	)		$	(818	)		$	1,582			$	1,440			$	9,626			$	7,311
(1) - Excludes acquired loans.
(2) - Mississippi includes Central and Southern Mississippi Regions.
(3) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2017
(unaudited)
		Quarter Ended																				Year Ended
FINANCIAL RATIOS AND OTHER DATA			12/31/2017				9/30/2017				6/30/2017				3/31/2017				12/31/2016				12/31/2017				12/31/2016
Return on equity			3.96	%			8.69	%			6.21	%			8.27	%			7.51	%			6.77	%			7.14	%
Return on average tangible equity			5.60	%			11.95	%			8.68	%			11.39	%			10.41	%			9.39	%			9.99	%
Return on assets			0.45	%			0.99	%			0.70	%			0.95	%			0.87	%			0.77	%			0.84	%
Interest margin - Yield - FTE			3.90	%			3.86	%			3.81	%			3.74	%			3.74	%			3.83	%			3.75	%
Interest margin - Cost			0.41	%			0.39	%			0.32	%			0.25	%			0.22	%			0.34	%			0.21	%
Net interest margin - FTE			3.48	%			3.47	%			3.49	%			3.49	%			3.52	%			3.48	%			3.53	%
Efficiency ratio (1)			65.21	%			65.14	%			64.50	%			66.67	%			66.08	%			65.37	%			65.98	%
Full-time equivalent employees			2,893				2,878				2,858				2,799				2,788
CREDIT QUALITY RATIOS (2)
Net charge-offs/average loans			0.43	%			-0.02	%			-0.04	%			0.08	%			0.07	%			0.11	%			0.10	%
Provision for loan losses/average loans			0.26	%			0.17	%			0.14	%			0.14	%			0.09	%			0.18	%			0.14	%
Nonperforming loans/total loans (incl LHFS)			0.77	%			0.80	%			0.87	%			0.75	%			0.61	%
Nonperforming assets/total loans (incl LHFS)			1.27	%			1.37	%			1.46	%			1.43	%			1.39	%
Nonperforming assets/total loans (incl LHFS) +ORE			1.26	%			1.36	%			1.45	%			1.42	%			1.38	%
ALL/total loans (excl LHFS)			0.90	%			0.96	%			0.92	%			0.91	%			0.91	%
ALL-commercial/total commercial loans			0.95	%			1.02	%			0.99	%			0.97	%			0.97	%
ALL-consumer/total consumer and home mortgage loans			0.68	%			0.73	%			0.67	%			0.67	%			0.68	%
ALL/nonperforming loans			113.55	%			115.94	%			102.75	%			118.17	%			144.75	%
ALL/nonperforming loans (excl specifically reviewed impaired loans)			320.84	%			301.50	%			277.42	%			263.73	%			267.40	%
CAPITAL RATIOS
Total equity/total assets			11.39	%			11.40	%			11.23	%			11.40	%			11.39	%
Tangible equity/tangible assets			8.77	%			8.79	%			8.61	%			8.80	%			8.74	%
Tangible equity/risk-weighted assets			11.13	%			11.29	%			11.19	%			11.49	%			11.39	%
Tier 1 leverage ratio (3)			9.67	%			9.61	%			9.56	%			9.86	%			9.90	%
Common equity tier 1 capital ratio (3)			11.77	%			11.80	%			11.73	%			12.19	%			12.16	%
Tier 1 risk-based capital ratio (3)			12.33	%			12.37	%			12.30	%			12.79	%			12.76	%
Total risk-based capital ratio (3)			13.10	%			13.19	%			13.11	%			13.61	%			13.59	%
STOCK PERFORMANCE
Market value-Close		$	31.86			$	33.12			$	32.16			$	31.79			$	35.65
Book value		$	23.20			$	23.36			$	23.06			$	22.71			$	22.48
Tangible book value		$	17.35			$	17.49			$	17.17			$	17.02			$	16.76
(1) - The efficiency ratio is noninterest expense to total net interest income (FTE) and noninterest income, excluding security gains (losses), amortization of partnership tax credits, amortization of purchased intangibles, and significant non-routine income and expense items as disclosed in Note 9.
(2) - Excludes acquired loans.
(3) - The regulatory capital ratios for December 31, 2017 contain a reclassification adjustment of $8.5 million from AOCI to retained earnings as allowed by regulatory agencies in an interagency statement released January 18, 2018 to address disproportionate tax effect in AOCI resulting from the recent enactment of the Tax Cuts and Jobs Act of 2017 and the application of Financial Accounting Standards Board Accounting Standards Codification Topic 740, Income Taxes.
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

December 31, 2017

($ in thousands)

(unaudited)

Note 1 – Business Combinations

On April 7, 2017, Trustmark Corporation completed its merger with RB
Bancorporation (Reliance), the holding company for Reliance Bank, which
had seven offices serving the Huntsville, Alabama metropolitan service
area (MSA). Reliance Bank was merged into Trustmark National Bank
simultaneously with the merger of Trustmark and RB Bancorporation. Under
the terms of the Merger Agreement dated November 14, 2016, Trustmark
paid $22.00 in cash for each share of Reliance common stock outstanding,
which represented total consideration for Reliance common shareholders
of approximately $23.7 million.

The merger with Reliance was consistent with Trustmark’s strategic plan
to selectively expand the Trustmark franchise and enhance the Trustmark
franchise in north Alabama.

This merger was accounted for in accordance with Financial Accounting
Standards Board (FASB) Accounting Standards Codification (ASC) Topic
805, “Business Combinations.” Accordingly, the assets and liabilities,
both tangible and intangible, were recorded at their estimated fair
values as of the merger date. The fair values of the assets acquired and
liabilities assumed are subject to adjustment if additional information
relative to the closing date fair values becomes available through the
measurement period, which is not to exceed one year from the merger date
of April 7, 2017.

The statement of assets purchased and liabilities assumed in the
Reliance merger is presented below at their estimated fair values as of
the merger date of April 7, 2017 ($ in thousands):

Assets:
Cash and due from banks							$	5,013
Federal funds sold and securities purchased under reverse repurchase agreements								6,900
Securities								54,843
Acquired loans								117,447
Premises and equipment, net								3,700
Identifiable intangible assets								1,850
Other real estate								475
Other assets								6,037
Total assets								196,265
Liabilities:
Deposits								166,158
Other borrowings								17,469
Other liabilities								1,322
Total liabilities								184,949
Net identifiable assets acquired at fair value								11,316
Goodwill								13,472
Net assets acquired at fair value							$	24,788

The excess of the consideration paid over the estimated fair value of
the net assets acquired was $13.5 million, which was recorded as
goodwill under FASB ASC Topic 805. The identifiable intangible assets
acquired represent the core deposit intangible at fair value at the
merger date. The core deposit intangible is being amortized on an
accelerated basis over the estimated useful life, currently expected to
be approximately ten years.

Loans acquired from Reliance were evaluated under a fair value process.
Loans with evidence of deterioration in credit quality and for which it
was probable at acquisition that Trustmark would not be able to collect
all contractually required payments are referred to as acquired impaired
loans and accounted for in accordance with FASB ASC Topic 310-30, “Loans
and Debt Securities Acquired with Deteriorated Credit Quality.”

The operations of Reliance are included in Trustmark’s operating results
from April 7, 2017 and did not have a material impact on Trustmark’s
results of operations. During the second quarter of 2017, Trustmark
included non-routine merger transaction expenses in other noninterest
expense totaling $3.2 million (change in control expense of $1.3
million; professional fees, contract termination and other expenses of
$1.9 million).

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

December 31, 2017

($ in thousands)

(unaudited)

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):

				12/31/2017				9/30/2017				6/30/2017				3/31/2017				12/31/2016
SECURITIES AVAILABLE FOR SALE
U.S. Government agency obligations
Issued by U.S. Government agencies				$	45,018			$	49,723			$	51,277			$	53,247			$	55,763
Issued by U.S. Government sponsored agencies					267				271				272				274				276
Obligations of states and political subdivisions					79,229				89,144				96,514				109,895				115,373
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA					65,746				60,902				58,422				42,667				42,786
Issued by FNMA and FHLMC					814,450				860,131				860,571				733,214				631,084
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA					1,016,790				1,087,169				1,157,241				1,202,719				1,267,951
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA					217,135				221,749				223,391				223,538				243,449
Total securities available for sale				$	2,238,635			$	2,369,089			$	2,447,688			$	2,365,554			$	2,356,682
SECURITIES HELD TO MATURITY
U.S. Government agency obligations
Issued by U.S. Government sponsored agencies				$	3,692			$	3,680			$	3,669			$	3,658			$	3,647
Obligations of states and political subdivisions					46,039				46,069				46,098				46,273				46,303
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA					13,539				14,191				14,399				14,977				15,478
Issued by FNMA and FHLMC					133,975				139,172				144,282				118,733				81,299
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA					678,926				708,715				740,042				771,296				803,474
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA					180,315				190,456				191,264				201,130				208,442
Total securities held to maturity				$	1,056,486			$	1,102,283			$	1,139,754			$	1,156,067			$	1,158,643

At December 31, 2017, the net unamortized, unrealized loss included in
accumulated other comprehensive loss in the accompanying balance sheet
for securities held to maturity previously transferred from securities
available for sale totaled approximately $19.5 million ($12.0 million,
net of tax).

Management continues to focus on asset quality as one of the strategic
goals of the securities portfolio, which is evidenced by the investment
of approximately 96% of the portfolio in GSE-backed obligations and
other Aaa rated securities as determined by Moody’s. None of the
securities owned by Trustmark are collateralized by assets which are
considered sub-prime. Furthermore, outside of stock ownership in the
Federal Home Loan Bank of Dallas, Federal Home Loan Bank of Atlanta and
Federal Reserve Bank, Trustmark does not hold any other equity
investment in a GSE.

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

December 31, 2017

($ in thousands)

(unaudited)

Note 3 – Loan Composition

LHFI BY TYPE (excluding acquired loans)				12/31/2017				9/30/2017				6/30/2017				3/31/2017				12/31/2016
Loans secured by real estate:
Construction, land development and other land loans				$	987,624			$	950,144			$	922,029			$	859,927			$	831,437
Secured by 1-4 family residential properties					1,675,311				1,648,733				1,655,968				1,656,837				1,660,043
Secured by nonfarm, nonresidential properties					2,193,823				2,172,885				2,109,367				2,064,352				2,034,176
Other real estate secured					517,956				482,163				432,208				399,636				318,148
Commercial and industrial loans					1,570,345				1,568,588				1,635,000				1,540,783				1,528,434
Consumer loans					171,918				173,061				170,858				166,314				170,562
State and other political subdivision loans					952,483				936,614				936,860				910,493				917,515
Other loans					500,507				475,153				433,755				406,315				390,898
LHFI					8,569,967				8,407,341				8,296,045				8,004,657				7,851,213
Allowance for loan losses					(76,733)				(80,332)				(76,184)				(72,445)				(71,265)
Net LHFI				$	8,493,234			$	8,327,009			$	8,219,861			$	7,932,212			$	7,779,948
During the third quarter of 2017, Trustmark increased its allowance for loan losses by $1.1 million due to the potential loss exposure caused by Hurricane Harvey.
ACQUIRED LOANS BY TYPE (1)				12/31/2017				9/30/2017				6/30/2017				3/31/2017				12/31/2016
Loans secured by real estate:
Construction, land development and other land loans				$	23,586			$	29,384			$	35,054			$	17,651			$	20,850
Secured by 1-4 family residential properties					61,751				65,746				74,313				54,721				69,540
Secured by nonfarm, nonresidential properties					114,694				122,200				132,663				92,075				103,820
Other real estate secured					16,746				18,431				19,553				16,275				19,010
Commercial and industrial loans					31,506				34,124				34,375				20,691				36,896
Consumer loans					2,600				2,749				2,833				2,664				3,365
Other loans					10,634				11,123				16,119				14,165				18,766
Acquired loans					261,517				283,757				314,910				218,242				272,247
Allowance for loan losses, acquired loans					(4,079)				(5,768)				(7,423)				(10,006)				(11,397)
Net acquired loans				$	257,438			$	277,989			$	307,487			$	208,236			$	260,850
(1) Trustmark revised the presentation of acquired loans by eliminating the segmentation of acquired noncovered loans and acquired covered loans due to the significantly reduced size of the acquired covered loan portfolio.

During the first quarter of 2017, Trustmark transferred the remaining
balance of the acquired loans not accounted for under FASB ASC Topic
310-30, “Loans and Debt Securities Acquired with Deteriorated Credit
Quality” to LHFI due to the discount on these loans being fully
amortized. The balance of these transferred loans totaled $36.7 million.

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

December 31, 2017

($ in thousands)

(unaudited)

Note 3 – Loan Composition (continued)

				December 31, 2017
LHFI - COMPOSITION BY REGION (1)				Total				Alabama				Florida				Mississippi (Central and Southern Regions)				Tennessee (Memphis, TN and Northern MS Regions)				Texas
Loans secured by real estate:
Construction, land development and other land loans				$	987,624			$	373,107			$	47,592			$	274,415			$	21,741			$	270,769
Secured by 1-4 family residential properties					1,675,311				105,281				47,500				1,411,503				93,625				17,402
Secured by nonfarm, nonresidential properties					2,193,823				368,337				213,404				947,708				151,526				512,848
Other real estate secured					517,956				84,973				2,801				231,750				46,414				152,018
Commercial and industrial loans					1,570,345				206,677				20,897				800,297				331,536				210,938
Consumer loans					171,918				22,274				4,231				125,980				17,229				2,204
State and other political subdivision loans					952,483				83,300				28,185				626,119				28,410				186,469
Other loans					500,507				55,740				17,431				324,295				50,272				52,769
Loans				$	8,569,967			$	1,299,689			$	382,041			$	4,742,067			$	740,753			$	1,405,417
CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION (1)
Lots				$	57,616			$	13,100			$	14,795			$	23,193			$	2,249			$	4,279
Development					47,050				5,382				4,711				21,484				255				15,218
Unimproved land					95,856				12,336				14,682				35,395				14,860				18,583
1-4 family construction					188,561				61,709				10,352				80,511				2,406				33,583
Other construction					598,541				280,580				3,052				113,832				1,971				199,106
Construction, land development and other land loans				$	987,624			$	373,107			$	47,592			$	274,415			$	21,741			$	270,769
LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION (1)
Income producing:
Retail				$	308,452			$	89,530			$	44,797			$	101,584			$	16,900			$	55,641
Office					213,049				36,678				20,741				72,605				5,909				77,116
Nursing homes/senior living					191,845				18,507				—				166,932				6,406				—
Hotel/motel					263,768				54,658				60,968				58,575				35,014				54,553
Mini-storage					126,117				14,539				6,403				43,632				560				60,983
Industrial					93,481				11,467				9,613				19,903				4,553				47,945
Health care					32,442				11,303				782				19,138				—				1,219
Convenience stores					25,101				1,353				—				13,207				865				9,676
Other					87,729				10,773				14,823				14,772				7,750				39,611
Total income producing loans					1,341,984				248,808				158,127				510,348				77,957				346,744
Owner-occupied:
Office					145,072				24,329				19,805				74,663				6,136				20,139
Churches					92,059				17,082				658				46,753				19,883				7,683
Industrial warehouses					138,536				8,932				3,557				56,904				13,785				55,358
Health care					113,702				23,372				4,019				67,488				4,373				14,450
Convenience stores					104,740				10,200				12,623				54,222				1,298				26,397
Retail					43,132				5,877				6,756				22,040				1,830				6,629
Restaurants					33,908				2,848				702				26,484				1,922				1,952
Auto dealerships					31,486				8,949				34				12,828				9,675				—
Other					149,204				17,940				7,123				75,978				14,667				33,496
Total owner-occupied loans					851,839				119,529				55,277				437,360				73,569				166,104
Loans secured by nonfarm, nonresidential properties				$	2,193,823			$	368,337			$	213,404			$	947,708			$	151,526			$	512,848
(1) Excludes acquired loans.

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

December 31, 2017

($ in thousands)

(unaudited)

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

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

				Quarter Ended																									Year Ended
				12/31/2017					9/30/2017					6/30/2017					3/31/2017					12/31/2016					12/31/2017					12/31/2016
Securities – taxable					2.21	%				2.23	%				2.26	%				2.31	%				2.21	%				2.25	%				2.31	%
Securities – nontaxable					4.35	%				4.34	%				4.35	%				4.34	%				4.26	%				4.35	%				4.27	%
Securities – total					2.27	%				2.29	%				2.32	%				2.38	%				2.29	%				2.31	%				2.39	%
Loans - LHFI & LHFS					4.38	%				4.36	%				4.30	%				4.21	%				4.12	%				4.31	%				4.16	%
Acquired loans					9.27	%				8.78	%				7.96	%				8.40	%				11.69	%				8.59	%				9.09	%
Loans - total					4.53	%				4.51	%				4.43	%				4.33	%				4.38	%				4.45	%				4.37	%
FF sold & rev repo					1.61	%				1.55	%				1.39	%				1.02	%				1.12	%				1.48	%				1.27	%
Other earning assets					2.34	%				1.67	%				1.91	%				1.36	%				1.65	%				1.82	%				1.41	%
Total earning assets					3.90	%				3.86	%				3.81	%				3.74	%				3.74	%				3.83	%				3.75	%
Interest-bearing deposits					0.40	%				0.35	%				0.29	%				0.23	%				0.20	%				0.32	%				0.19	%
FF pch & repo					0.93	%				0.94	%				0.79	%				0.57	%				0.38	%				0.81	%				0.35	%
Other borrowings					1.35	%				1.28	%				1.16	%				0.90	%				0.87	%				1.18	%				0.91	%
Total interest-bearing liabilities					0.56	%				0.53	%				0.44	%				0.34	%				0.31	%				0.47	%				0.30	%
Net interest margin					3.48	%				3.47	%				3.49	%				3.49	%				3.52	%				3.48	%				3.53	%
Net interest margin excluding acquired loans					3.35	%				3.34	%				3.37	%				3.38	%				3.31	%				3.36	%				3.37	%

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

During the fourth quarter of 2017, the yield on acquired loans totaled
9.27% and included $1.1 million in recoveries from the settlement of
debt, which represented approximately 1.63% of the annualized total
acquired loan yield. Excluding acquired loans, the net interest margin
for the fourth quarter of 2017 remained relatively flat compared to the
third quarter of 2017, as increased yields on the loans held for
investment and held for sale portfolio were offset by decreased yields
on the securities portfolio and higher costs of interest-bearing
deposits and other borrowings.

Note 5 – Mortgage Banking

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

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

				Quarter Ended																									Year Ended
				12/31/2017					9/30/2017					6/30/2017					3/31/2017					12/31/2016					12/31/2017					12/31/2016
Mortgage servicing income, net				$	5,471				$	5,295				$	5,439				$	5,458				$	5,218				$	21,663				$	20,724
Change in fair value-MSR from runoff					(2,605	)				(2,892	)				(2,896	)				(2,387	)				(2,739	)				(10,780	)				(10,106	)
Gain on sales of loans, net					5,300					5,083					5,001					3,550					6,054					18,934					20,535
Other, net					(1,120	)				(450	)				629					772					(2,925	)				(169	)				(84	)
Mortgage banking income before hedge ineffectiveness					7,046					7,036					8,173					7,393					5,608					29,648					31,069
Change in fair value-MSR from market changes					1,168					(2,393	)				(1,291	)				1,466					13,112					(1,050	)				(406	)
Change in fair value of derivatives					(1,930	)				(218	)				2,126					1,326					(13,292	)				1,304					(2,451	)
Net (negative) positive hedge ineffectiveness					(762	)				(2,611	)				835					2,792					(180	)				254					(2,857	)
Mortgage banking, net				$	6,284				$	4,425				$	9,008				$	10,185				$	5,428				$	29,902				$	28,212

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

December 31, 2017

($ in thousands)

(unaudited)

Note 6 – Salaries and Employee Benefit Plans

Early Retirement Program

During the second quarter of 2016, Trustmark announced a voluntary early
retirement program (ERP) for associates age 60 and above with five or
more years of service. The cost of this program is reflected in a
one-time, pre-tax charge of approximately $9.3 million (salaries and
employee benefits expense of $9.1 million and other miscellaneous
expense of $230 thousand), or $0.085 per basic share net of tax, in
Trustmark’s second quarter 2016 earnings. As a result of the ERP, during
the third and fourth quarters of 2016, Trustmark incurred additional
expense of $236 thousand and $268 thousand, respectively, which
primarily resulted from additional settlements from pension lump sum
elections.

Defined Benefit Pension Plan

Trustmark maintained a noncontributory tax-qualified defined benefit
pension plan (Trustmark Capital Accumulation Plan, the “Plan”), in which
substantially all associates who began employment prior to 2007
participated. The Plan provided for retirement benefits based on the
length of credited service and final average compensation, as defined in
the Plan, which vested upon three years of service. Benefit accruals
under the plan were frozen in 2009, with the exception of certain
associates covered through plans obtained in acquisitions that were
subsequently merged into the Plan. As previously reported, on July 26,
2016, the Board of Directors of Trustmark authorized the termination of
the Plan, effective as of December 31, 2016. To satisfy commitments made
by Trustmark to associates (collectively, the “Continuing Associates”)
covered through acquired plans that were merged into the Plan, the Board
also approved the spin-off of the portion of the Plan associated with
the accrued benefits of the Continuing Associates into a new plan titled
the Trustmark Corporation Pension Plan for Certain Employees of Acquired
Financial Institutions (the “Spin-Off Plan”), effective as of December
31, 2016, immediately prior to the termination of the Plan. In order to
terminate the Plan, in accordance with Internal Revenue Service and
Pension Benefit Guaranty Corporation requirements, Trustmark was
required to fully fund the Plan on a termination basis and contributed
the additional assets necessary to do so. The final distributions were
made from current plan assets and a one-time pension settlement expense
of $17.6 million was recognized when paid by Trustmark during the second
quarter of 2017. After the distribution of Plan assets during the second
quarter of 2017, Trustmark estimates that the annual pension expense
will be reduced by $3.0 million to $4.0 million.

Note 7 – Other Noninterest Income and Expense

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

				Quarter Ended																									Year Ended
				12/31/2017					9/30/2017					6/30/2017					3/31/2017					12/31/2016					12/31/2017					12/31/2016
Partnership amortization for tax credit purposes				$	(2,478	)			$	(2,521	)			$	(2,287	)			$	(2,274	)			$	(2,479	)			$	(9,560	)			$	(9,916	)
Increase in life insurance cash surrender value					1,816					1,813					1,782					1,714					1,751					7,125					6,891
Other miscellaneous income					3,343					4,448					6,142					2,451					2,820					16,384					8,651
Total other, net				$	2,681				$	3,740				$	5,637				$	1,891				$	2,092				$	13,949				$	5,626

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

Trustmark received nontaxable proceeds of $1.7 million and $2.7 million
related to bank-owned life insurance during the fourth and third
quarters of 2017, respectively, and $4.9 million related to life
insurance acquired as part of a previous acquisition during the second
quarter of 2017, which were recorded in other miscellaneous income in
the table above.

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

				Quarter Ended																				Year Ended
				12/31/2017				9/30/2017				6/30/2017				3/31/2017				12/31/2016				12/31/2017				12/31/2016
Loan expense				$	2,276			$	3,013			$	2,827			$	2,792			$	2,823			$	10,908			$	12,226
Amortization of intangibles					1,522				1,539				1,544				1,564				1,686				6,169				6,866
Other miscellaneous expense					7,799				7,885				10,550				8,432				7,154				34,666				28,838
Total other expense				$	11,597			$	12,437			$	14,921			$	12,788			$	11,663			$	51,743			$	47,930

As previously discussed in Note 1 – Business Combinations, non-routine
Reliance merger transaction expenses totaled $3.2 million and were
included in other miscellaneous expense during the second quarter of
2017.

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

December 31, 2017

($ in thousands)

(unaudited)

Note 8 – Income Taxes

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

				Quarter Ended																					Year Ended
				12/31/2017					9/30/2017				6/30/2017				3/31/2017				12/31/2016				12/31/2017					12/31/2016
Current				$	3,850				$	8,108			$	5,427			$	5,261			$	3,302			$	22,646				$	13,053
Deferred					4,300					600				300				3,900				5,100				9,100					18,000
Elimination of deferred tax valuation allowance					(8,650	)				—				—				—				—				(8,650	)				—
Income tax provision before re-measurement					(500	)				8,708				5,727				9,161				8,402				23,096					31,053
Re-measurement of net deferred tax assets					25,619					—				—				—				—				25,619					—
Income tax provision				$	25,119				$	8,708			$	5,727			$	9,161			$	8,402			$	48,715				$	31,053

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

Following the recent enactment of the Tax Cuts and Jobs Act of 2017 (Tax
Reform Act) which resulted in the reduction of the corporate federal
income tax rate, Trustmark re-measured its net deferred tax assets and
recorded an increase in deferred income tax expense of $25.6 million
during the fourth quarter of 2017. In addition, Trustmark estimates its
effective income tax rate to decrease from approximately 21% (excluding
the elimination of the deferred tax valuation allowance and the
re-measurement of net deferred tax assets) in 2017 to approximately 12%
to 14% beginning in 2018, primarily as a result of the Tax Reform Act.
Trustmark’s effective tax rate continues to be less than the statutory
rate primarily due to various tax-exempt income items and its
utilization of income tax credit programs.

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

December 31, 2017

($ in thousands)

(unaudited)

Note 9 – Non-GAAP Financial Measures (continued)

						Quarter Ended																									Year Ended
						12/31/2017					9/30/2017					6/30/2017					3/31/2017					12/31/2016					12/31/2017					12/31/2016
TANGIBLE EQUITY
AVERAGE BALANCES
Total shareholders' equity						$	1,579,633				$	1,577,867				$	1,552,240				$	1,533,098				$	1,533,144				$	1,560,884				$	1,517,955
Less: Goodwill							(379,627	)				(379,627	)				(378,191	)				(366,156	)				(366,156	)				(375,947	)				(366,156	)
Identifiable intangible assets							(17,196	)				(18,714	)				(19,713	)				(19,950	)				(21,585	)				(18,885	)				(24,132	)
Total average tangible equity						$	1,182,810				$	1,179,526				$	1,154,336				$	1,146,992				$	1,145,403				$	1,166,052				$	1,127,667
PERIOD END BALANCES
Total shareholders' equity						$	1,571,701				$	1,582,535				$	1,561,918				$	1,537,961				$	1,520,208
Less: Goodwill							(379,627	)				(379,627	)				(379,627	)				(366,156	)				(366,156	)
Identifiable intangible assets							(16,360	)				(17,883	)				(19,422	)				(19,117	)				(20,680	)
Total tangible equity			(a)			$	1,175,714				$	1,185,025				$	1,162,869				$	1,152,688				$	1,133,372
TANGIBLE ASSETS
Total assets						$	13,797,953				$	13,884,655				$	13,909,138				$	13,490,361				$	13,352,333
Less: Goodwill							(379,627	)				(379,627	)				(379,627	)				(366,156	)				(366,156	)
Identifiable intangible assets							(16,360	)				(17,883	)				(19,422	)				(19,117	)				(20,680	)
Total tangible assets			(b)			$	13,401,966				$	13,487,145				$	13,510,089				$	13,105,088				$	12,965,497
Risk-weighted assets			(c)			$	10,566,818				$	10,498,582				$	10,391,912				$	10,031,410				$	9,952,123
NET INCOME ADJUSTED FOR INTANGIBLE AMORTIZATION
Net income						$	15,768				$	34,579				$	24,035				$	31,248				$	28,923				$	105,630				$	108,411
Plus: Intangible amortization net of tax							940					950					954					966					1,041					3,810					4,240
Net income adjusted for intangible amortization						$	16,708				$	35,529				$	24,989				$	32,214				$	29,964				$	109,440				$	112,651
Period end common shares outstanding			(d)				67,746,094					67,742,135					67,740,901					67,729,434					67,628,618
TANGIBLE COMMON EQUITY MEASUREMENTS
Return on average tangible equity (1)							5.60	%				11.95	%				8.68	%				11.39	%				10.41	%				9.39	%				9.99	%
Tangible equity/tangible assets			(a)/(b)				8.77	%				8.79	%				8.61	%				8.80	%				8.74	%
Tangible equity/risk-weighted assets			(a)/(c)				11.13	%				11.29	%				11.19	%				11.49	%				11.39	%
Tangible book value			(a)/(d)*1,000			$	17.35				$	17.49				$	17.17				$	17.02				$	16.76
COMMON EQUITY TIER 1 CAPITAL (CET1)
Total shareholders' equity						$	1,571,701				$	1,582,535				$	1,561,918				$	1,537,961				$	1,520,208
AOCI-related adjustments (3)							48,248					27,825					28,509					43,005					45,798
CET1 adjustments and deductions:
Goodwill net of associated deferred tax liabilities (DTLs)							(366,461	)				(359,841	)				(360,198	)				(347,085	)				(347,442	)
Other adjustments and deductions for CET1 (2)							(10,248	)				(11,359	)				(11,267	)				(10,803	)				(8,637	)
CET1 capital			(e)				1,243,240					1,239,160					1,218,962					1,223,078					1,209,927
Additional tier 1 capital instruments plus related surplus							60,000					60,000					60,000					60,000					60,000
Less: additional tier 1 capital deductions							(2	)				(471	)				(247	)				(159	)				(267	)
Additional tier 1 capital							59,998					59,529					59,753					59,841					59,733
Tier 1 capital						$	1,303,238				$	1,298,689				$	1,278,715				$	1,282,919				$	1,269,660
Common equity tier 1 capital ratio			(e)/(c)				11.77	%				11.80	%				11.73	%				12.19	%				12.16	%
(1) Calculation = ((net income adjusted for intangible amortization/number of days in period)*number of days in year)/total average tangible equity.
(2) Includes other intangible assets, net of DTLs, disallowed deferred tax assets (DTAS), threshold deductions and transition adjustments, as applicable.
(3) The December 31, 2017 amount contains a reclassification adjustment of $8.5 million from AOCI to retained earnings as allowed by regulatory agencies in an interagency statement released January 18, 2018 to address disproportionate tax effect in AOCI resulting from the recent enactment of the Tax Cuts and Jobs Act of 2017 and the application of Financial Accounting Standards Board Accounting Standards Codification Topic 740, Income Taxes.

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

December 31, 2017

($ in thousands except per share data)

(unaudited)

Note 9 – Non-GAAP Financial Measures (continued)

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

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

				Quarter Ended																		Year Ended
				12/31/2017									12/31/2016									12/31/2017									12/31/2016
				Amount				Diluted EPS					Amount				Diluted EPS					Amount				Diluted EPS					Amount				Diluted EPS
Net Income (GAAP)				$	15,768			$	0.232				$	28,923			$	0.426				$	105,630			$	1.556				$	108,411			$	1.599
Significant non-routine transactions (net of taxes):
Re-measurement of net deferred taxes					25,619				0.377					—				—					25,619				0.377
Elimination of deferred tax valuation allowance					(8,650	)			(0.127	)				—				—					(8,650	)			(0.127	)
Defined benefit plan termination					—				—					—				—					10,895				0.160					—				—
Reliance merger transaction expenses					—				—					—				—					1,999				0.029					—				—
Gain on life insurance proceeds					—				—					—				—					(4,894	)			(0.072	)				—				—
Early retirement program expense					—				—					165				0.002					—				—					6,049				0.089
Pension expense due to de-risking strategy in Plan Assets Portfolio					—				—					410				0.006					—				—					820				0.012
Net Income adjusted for significant non- routine transactions (Non-GAAP)				$	32,737			$	0.482				$	29,498			$	0.434				$	130,599			$	1.923				$	115,280			$	1.700
				Reported				Adjusted					Reported				Adjusted					Reported				Adjusted					Reported				Adjusted
				(GAAP)				(Non-GAAP)					(GAAP)				(Non-GAAP)					(GAAP)				(Non-GAAP)					(GAAP)				(Non-GAAP)
Return on equity					3.96	%			8.22	%				7.51	%			7.65	%				6.77	%			8.37	%				7.14	%			7.59	%
Return on average tangible equity					5.60	%			11.30	%				10.41	%			10.61	%				9.39	%			11.53	%				9.99	%			10.60	%
Return on assets					0.45	%			0.94	%				0.87	%			0.89	%				0.77	%			0.95	%				0.84	%			0.89	%

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