Trustmark Corp : Trustmark Corporation Announces 2013 Financial Results

Trustmark Corporation (NASDAQ:TRMK) reported net income available to common shareholders of $28.0 million in the fourth quarter of 2013, which represented diluted earnings per common share of $0.42. For the full year 2013, net income available to common shareholders totaled $117.1 million, resulting in diluted earnings per share of $1.75. Excluding non-routine merger costs and litigation expense that reduced after-tax net income by $8.3 million, or approximately $0.12 per diluted share, Trustmark's net income available to common shareholders in 2013 totaled $125.3 million, or $1.87 per diluted share. Trustmark's performance during 2013 produced a return on average tangible common equity of 13.09% and a return on average assets of 1.02%. Trustmark's Board of Directors declared a quarterly cash dividend of $0.23 per common share payable March 15, 2014, to shareholders of record on March 1, 2014. Since inception, Trustmark has consistently paid quarterly cash dividends to its shareholders. These dividends have grown over time - and have never decreased - due to the quality and sustainability of earnings.

Printer friendly version of earnings release with consolidated financial statements and notes: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50791299&lang=en

Gerard R. Host, President and CEO, stated, "Trustmark's achievements in 2013 were significant. We continued to build upon and expand customer relationships, as reflected by growth in our banking, wealth management and insurance businesses. Over the course of the year, revenue increased 8.9% to a record level of $562.3 million. Credit quality continued to improve and was an important contributor to our financial success. During the year, we successfully completed the largest acquisition in our history, entering a number of new markets throughout Alabama as well as enhancing our position in the Florida panhandle. We also continued investing in technology to increase revenue and improve efficiency. Thanks to our associates, solid profitability and strong capital base, Trustmark remains well-positioned to continue meeting the needs of our customers and creating value for our shareholders as we enter our 125^th year."

Balance Sheet Management

• Loans held for investment increased $102.2 million in fourth quarter, $206.1 million in 2013
• Net interest income (FTE) totaled $105.6 million in fourth quarter, resulting in 4.10% net interest margin

Loans held for investment totaled $5.8 billion at December 31, 2013, an increase of $102.2 million, or 1.8% (7.2% annualized), from the prior quarter and $206.1 million, or 3.7%, from one year earlier. From a geographic perspective, loans in Trustmark's Alabama, Mississippi, Texas and Tennessee markets expanded $44.2 million, $42.2 million, $12.8 million, and $7.4 million, from the prior quarter respectively, while loans in the Florida market declined $4.5 million.

Growth was also diversified by loan type. During the fourth quarter, increased lending to medical facilities and public entities in Mississippi, Alabama, and Tennessee was reflected in Other loan growth of $49.5 million. Construction lending expanded $24.8 million due to growth in Trustmark's Texas, Alabama, Tennessee and Mississippi markets. Commercial and industrial loans increased $24.8 million principally due to growth in Trustmark's Texas and Alabama markets. Commercial real estate loans increased $6.8 million as growth in Mississippi and Alabama was offset in part by declines in Texas and Tennessee. Trustmark's single-family mortgage portfolio increased $2.6 million as growth in Alabama and Tennessee was offset in part by declines in Mississippi and Florida. Trustmark's consumer lending portfolio was relatively flat while other real estate secured loans decreased $7.0 million.

Acquired loans totaled $804.2 million at December 31, 2013, down $70.9 million from the prior quarter but up $670.6 million from one year earlier. Collectively, loans held for investment and acquired loans totaled $6.6 billion at year-end 2013, up $31.3 million from the prior quarter and $876.8 million from the prior year.

During the fourth quarter of 2013, average earning assets totaled $10.2 billion; while average deposits were stable at $9.7 billion, average noninterest bearing deposits increased to 27.0% of average total deposits.

Net interest income (FTE) in the fourth quarter totaled $105.6 million, an increase of $3.5 million from the prior quarter, and resulted in a 16 basis point expansion of the net interest margin to 4.10%, principally attributable to increased recoveries on acquired loans. The yield on acquired loans totaled 10.95% and included recoveries on loan pay-offs of $9.3 million, which represented approximately 4.35% of the total acquired annualized loan yield in the fourth quarter. Excluding acquired loans, the net interest margin in the fourth quarter totaled 3.48% compared to 3.52% in the prior quarter.

Trustmark's solid capital position reflects the consistent profitability of its diversified financial services businesses as well as prudent balance sheet management. At December 31, 2013, Trustmark's tangible common equity to tangible assets ratio was 8.26% while the total risk-based capital ratio was 14.18%, significantly exceeding the 10.00% benchmark to be classified as "well-capitalized." Trustmark's solid capital base provides the opportunity to support organic loan growth in an improving economy and enhance long-term shareholder value.

Credit Quality

• Significant reduction in classified and criticized loan balances
• Nonperforming loans declined 20.8% during the year
• Improved credit quality reflected in net recoveries and negative provisioning in 2013

Nonperforming loans totaled $65.2 million at December 31, 2013, a decline of 11.1% from the prior quarter and 20.8% from the prior year. Foreclosed other real estate totaled $106.5 million, a decline of $9.8 million, or 8.4%, from the prior quarter. Relative to levels one-year earlier, other real estate increased $28.4 million; excluding the acquisition-related increase of $44.3 million attributable to BancTrust, other real estate declined $16.0 million, or 20.4%.

Net charge-offs during the fourth quarter of 2013 totaled $201 thousand and represented 0.01% of average loans. During 2013, recoveries exceeded charge-offs, resulting in a net recovery of $1.1 million, which represented a negative 0.02% of average loans. This compares favorably to net charge-offs in 2012 of $17.5 million, or 0.30% of average loans. The provision for loan losses for loans held for investment was a negative $2.0 million in the fourth quarter of 2013, reflecting the net recovery position and improved credit quality. For the year ended December 31, 2013, the provision for loan losses for loans held for investment was a negative $13.4 million; during 2012, the provision for loan losses for loans held for investment was a positive $6.8 million.

During the fourth quarter, Trustmark experienced a decline of $22.6 million, or 9.28%, in classified loans and a decline of $23.9 million, or 8.49%, in criticized loans relative to the prior quarter. Relative to the prior year, classified loan balances decreased $32.9 million, or 12.95%, while criticized loan balances decreased $71.1 million, or 21.63%.

Allocation of Trustmark's $66.4 million allowance for loan losses represented 1.30% of commercial loans and 0.75% of consumer and home mortgage loans, resulting in an allowance to total loans held for investment of 1.15% at December 31, 2013, which represents a level management considers commensurate with the inherent risk in the loan portfolio. The allowance for loan losses represented 190.70% of nonperforming loans, excluding impaired loans.

All of the above credit metrics exclude acquired loans and other real estate covered by FDIC loss-share agreement.

Noninterest Income

• Noninterest income totaled $173.9 million in 2013
• Wealth management revenue achieved record level in 2013
• Tax credit investments reduced effective tax rate to 23.99% in 2013

Noninterest income totaled $38.7 million in the fourth quarter, a decrease of $8.5 million from the prior quarter. This decline resulted in part from an increase in partnership amortization of $3.3 million related to additional tax credit investments that reduced the Corporation's effective tax rate during the fourth quarter as well as a $2.6 million reduction in the FDIC indemnification asset resulting from the re-estimation of cash flows and loan pay-offs. Each of these items was included in other noninterest income.

Mortgage banking revenue in the fourth quarter totaled $5.2 million, a decline of $3.3 million from the prior quarter due principally to lower secondary marketing gains resulting from tightening mortgage spreads and reduced volume during the quarter and lower positive mortgage servicing hedge ineffectiveness. Mortgage loan production in the fourth quarter totaled $276.0 million, down 22.9% from the prior quarter and 44.2% from levels one year earlier, reflecting the decline in refinance activity following an extended low interest rate environment. Mortgage loan production in 2013 totaled $1.45 billion, a decline of 23.3% from levels in 2012, while mortgage banking revenue declined 18.2% to $33.5 million.

Insurance revenue in the fourth quarter totaled $7.3 million, reflecting a seasonal decrease of 10.7% relative to the prior quarter and an increase of 6.6% from levels one year earlier. Improved performance year-over-year resulted from increased business development efforts as well as increasing insurance premium levels. During the fourth quarter, new insurance offices opened in Oxford, MS and Nashville, TN. Insurance revenue in 2013 totaled $30.8 million, an increase of 9.3% relative to the prior year.

Wealth management revenue totaled $8.1 million during the fourth quarter, an increase of 8.3% from the prior quarter and 31.8% from the comparable period one year earlier. This growth is attributable to increased sales within investment services resulting from improved market conditions as well as improved profitability within the trust management business and reflects the merger with BancTrust. Wealth management revenue in 2013 totaled $29.5 million, an increase of 27.9% relative to the prior year.

Bank card and other fees totaled $9.6 million in the fourth quarter, an increase of 7.3% from the prior quarter and 20.1% from the comparable period one year earlier. This growth was due in part to increased interchange income from debit cards. Service charges on deposit accounts totaled $13.1 million, a decrease of 5.3% from the prior quarter primarily resulting from a reduction in NSF and overdraft fees; relative to the fourth quarter of 2012, service charges increased 5.8%.

Noninterest Expense

• Routine noninterest expense remained well-controlled
• Continued realignment of branch network to enhance efficiency and revenue growth

Noninterest expense totaled $104.9 million in the fourth quarter. Excluding ORE and intangible amortization of $5.5 million, noninterest expense during the fourth quarter totaled $99.4 million, an increase of $3.4 million from comparable expenses in the prior quarter. The increase during the quarter was primarily reflected in salaries and benefits, services and fees and other expenses. Salaries and benefits reflected an increase of $644 thousand, which included an additional year-end incentive accrual of $1.2 million and additional medical expenses of $200 thousand offset by reductions in salaries and commissions of $802 thousand. Services and fees increased by $896 thousand principally due to additional advertising during the fourth quarter of approximately $384 thousand and increased professional service fees of approximately $450 thousand. Other expense increased by $1.9 million, which was primarily attributed to additional reserves for potential mortgage loan repurchases of $615 thousand and increased mortgage foreclosure expenses of $454 thousand.

Trustmark continued realignment of its branch network to enhance productivity and efficiency as well as promote additional revenue growth. As previously announced, Trustmark consolidated six banking centers during the fourth quarter - two each in Alabama, Mississippi, and Houston, Texas. Over the course of 2013, Trustmark consolidated 14 banking centers and opened three new offices - one each in Houston, Jackson and Memphis. Trustmark is committed to investments to support profitable revenue growth as well as reengineering and efficiency opportunities to enhance shareholder value.

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, January 29, 2014, at 10:00 a.m. Central Time to discuss the Corporation's financial results. Interested parties may listen to the conference call by dialing [phone], passcode 10008303, 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 12, 2014, in archived format at the same web address or by calling [phone], passcode 10008303.

Trustmark Corporation is a financial services company providing banking and financial solutions through 208 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 the extent and duration of the current volatility in the credit and financial markets, a material decline in, or changes in our ability to measure the fair value of assets in our portfolio (including loans and investment securities), 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, acceleration of significantly extended deterioration in loan performance and default levels, a significant increase in foreclosure activity, 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 the European financial crisis on the U.S. economy and the markets we serve, 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 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, 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, 2013
($ in thousands)
(unaudited)
														Linked Quarter							Year over Year
QUARTERLY AVERAGE BALANCES			12/31/2013				9/30/2013				12/31/2012			$	Change			% Change			$	Change			% Change
Securities AFS-taxable		$	3,026,186			$	3,279,606			$	2,466,738			$	(253,420	)		-7.7	%		$	559,448			22.7	%
Securities AFS-nontaxable			160,989				172,055				169,906				(11,066	)		-6.4	%			(8,917	)		-5.2	%
Securities HTM-taxable			265,792				59,168				26,510				206,624			n/m				239,282			n/m
Securities HTM-nontaxable			21,172				11,024				17,443				10,148			92.1	%			3,729			21.4	%
Total securities			3,474,139				3,521,853				2,680,597				(47,714	)		-1.4	%			793,542			29.6	%
Loans (including loans held for sale)			5,847,557				5,784,170				5,834,525				63,387			1.1	%			13,032			0.2	%
Acquired loans:
Noncovered loans			812,426				888,883				82,317				(76,457	)		-8.6	%			730,109			n/m
Covered loans			34,640				39,561				58,272				(4,921	)		-12.4	%			(23,632	)		-40.6	%
Fed funds sold and rev repos			11,094				8,978				8,747				2,116			23.6	%			2,347			26.8	%
Other earning assets			32,118				38,226				31,168				(6,108	)		-16.0	%			950			3.0	%
Total earning assets			10,211,974				10,281,671				8,695,626				(69,697	)		-0.7	%			1,516,348			17.4	%
Allowance for loan losses			(78,742	)			(79,696	)			(88,715	)			954			-1.2	%			9,973			-11.2	%
Cash and due from banks			275,051				272,320				238,976				2,731			1.0	%			36,075			15.1	%
Other assets			1,360,712				1,284,813				972,748				75,899			5.9	%			387,964			39.9	%
Total assets		$	11,768,995			$	11,759,108			$	9,818,635			$	9,887			0.1	%		$	1,950,360			19.9	%
Interest-bearing demand deposits		$	1,803,956			$	1,842,379			$	1,545,967			$	(38,423	)		-2.1	%		$	257,989			16.7	%
Savings deposits			2,952,472				2,995,110				2,275,569				(42,638	)		-1.4	%			676,903			29.7	%
Time deposits less than $100,000			1,344,488				1,380,954				1,120,735				(36,466	)		-2.6	%			223,753			20.0	%
Time deposits of $100,000 or more			961,075				993,948				760,363				(32,873	)		-3.3	%			200,712			26.4	%
Total interest-bearing deposits			7,061,991				7,212,391				5,702,634				(150,400	)		-2.1	%			1,359,357			23.8	%
Fed funds purchased and repos			361,758				364,446				388,007				(2,688	)		-0.7	%			(26,249	)		-6.8	%
Short-term borrowings			63,531				59,324				85,313				4,207			7.1	%			(21,782	)		-25.5	%
Long-term FHLB advances			8,507				8,620				-				(113	)		-1.3	%			8,507			n/m
Subordinated notes			49,898				49,890				49,866				8			0.0	%			32			0.1	%
Junior subordinated debt securities			61,856				61,856				61,856				-			0.0	%			-			0.0	%
Total interest-bearing liabilities			7,607,541				7,756,527				6,287,676				(148,986	)		-1.9	%			1,319,865			21.0	%
Noninterest-bearing deposits			2,611,209				2,479,082				2,115,784				132,127			5.3	%			495,425			23.4	%
Other liabilities			203,270				190,143				126,953				13,127			6.9	%			76,317			60.1	%
Total liabilities			10,422,020				10,425,752				8,530,413				(3,732	)		0.0	%			1,891,607			22.2	%
Shareholders' equity			1,346,975				1,333,356				1,288,222				13,619			1.0	%			58,753			4.6	%
Total liabilities and equity		$	11,768,995			$	11,759,108			$	9,818,635			$	9,887			0.1	%		$	1,950,360			19.9	%
														Linked Quarter							Year over Year
PERIOD END BALANCES			12/31/2013				9/30/2013				12/31/2012			$	Change			% Change			$	Change			% Change
Cash and due from banks		$	345,761			$	335,695			$	231,489			$	10,066			3.0	%		$	114,272			49.4	%
Fed funds sold and rev repos			7,253				7,867				7,046				(614	)		-7.8	%			207			2.9	%
Securities available for sale			2,194,154				3,372,101				2,657,745				(1,177,947	)		-34.9	%			(463,591	)		-17.4	%
Securities held to maturity			1,168,728				69,980				42,188				1,098,748			n/m				1,126,540			n/m
Loans held for sale (LHFS)			149,169				119,986				257,986				29,183			24.3	%			(108,817	)		-42.2	%
Loans held for investment (LHFI)			5,798,881				5,696,641				5,592,754				102,240			1.8	%			206,127			3.7	%
Allowance for loan losses			(66,448	)			(68,632	)			(78,738	)			2,184			-3.2	%			12,290			-15.6	%
Net LHFI			5,732,433				5,628,009				5,514,016				104,424			1.9	%			218,417			4.0	%
Acquired loans:
Noncovered loans			769,990				837,875				81,523				(67,885	)		-8.1	%			688,467			n/m
Covered loans			34,216				37,250				52,041				(3,034	)		-8.1	%			(17,825	)		-34.3	%
Allowance for loan losses, acquired loans			(9,636	)			(5,333	)			(6,075	)			(4,303	)		80.7	%			(3,561	)		58.6	%
Net acquired loans			794,570				869,792				127,489				(75,222	)		-8.6	%			667,081			n/m
Net LHFI and acquired loans			6,527,003				6,497,801				5,641,505				29,202			0.4	%			885,498			15.7	%
Premises and equipment, net			207,283				208,837				154,841				(1,554	)		-0.7	%			52,442			33.9	%
Mortgage servicing rights			67,834				63,150				47,341				4,684			7.4	%			20,493			43.3	%
Goodwill			372,851				372,463				291,104				388			0.1	%			81,747			28.1	%
Identifiable intangible assets			41,990				44,424				17,306				(2,434	)		-5.5	%			24,684			n/m
Other real estate, excluding covered other real estate			106,539				116,329				78,189				(9,790	)		-8.4	%			28,350			36.3	%
Covered other real estate			5,108				5,092				5,741				16			0.3	%			(633	)		-11.0	%
FDIC indemnification asset			14,347				17,085				21,774				(2,738	)		-16.0	%			(7,427	)		-34.1	%
Other assets			582,363				574,387				374,412				7,976			1.4	%			207,951			55.5	%
Total assets		$	11,790,383			$	11,805,197			$	9,828,667			$	(14,814	)		-0.1	%		$	1,961,716			20.0	%
Deposits:
Noninterest-bearing		$	2,663,503			$	2,643,612			$	2,254,211			$	19,891			0.8	%		$	409,292			18.2	%
Interest-bearing			7,196,399				7,143,622				5,642,306				52,777			0.7	%			1,554,093			27.5	%
Total deposits			9,859,902				9,787,234				7,896,517				72,668			0.7	%			1,963,385			24.9	%
Fed funds purchased and repos			251,587				342,465				288,829				(90,878	)		-26.5	%			(37,242	)		-12.9	%
Short-term borrowings			66,385				60,698				86,920				5,687			9.4	%			(20,535	)		-23.6	%
Long-term FHLB advances			8,458				8,562				-				(104	)		-1.2	%			8,458			n/m
Subordinated notes			49,904				49,896				49,871				8			0.0	%			33			0.1	%
Junior subordinated debt securities			61,856				61,856				61,856				-			0.0	%			-			0.0	%
Other liabilities			137,338				164,972				157,305				(27,634	)		-16.8	%			(19,967	)		-12.7	%
Total liabilities			10,435,430				10,475,683				8,541,298				(40,253	)		-0.4	%			1,894,132			22.2	%
Common stock			14,038				13,998				13,506				40			0.3	%			532			3.9	%
Capital surplus			349,680				343,759				285,905				5,921			1.7	%			63,775			22.3	%
Retained earnings			1,034,966				1,023,983				984,563				10,983			1.1	%			50,403			5.1	%
Accum other comprehensive
(loss) income, net of tax			(43,731	)			(52,226	)			3,395				8,495			-16.3	%			(47,126	)		n/m
Total shareholders' equity			1,354,953				1,329,514				1,287,369				25,439			1.9	%			67,584			5.2	%
Total liabilities and equity		$	11,790,383			$	11,805,197			$	9,828,667			$	(14,814	)		-0.1	%		$	1,961,716			20.0	%
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, 2013
($ in thousands except per share data)
(unaudited)
			Quarter Ended												Linked Quarter							Year over Year
INCOME STATEMENTS				12/31/2013				9/30/2013				12/31/2012			$	Change			% Change			$	Change			% Change
Interest and fees on LHFS & LHFI-FTE			$	67,038			$	68,417			$	69,989			$	(1,379	)		-2.0	%		$	(2,951	)		-4.2	%
Interest and fees on acquired loans				23,384				19,183				4,859				4,201			21.9	%			18,525			n/m
Interest on securities-taxable				19,078				18,654				15,305				424			2.3	%			3,773			24.7	%
Interest on securities-tax exempt-FTE				1,963				1,960				2,066				3			0.2	%			(103	)		-5.0	%
Interest on fed funds sold and rev repos				14				8				9				6			75.0	%			5			55.6	%
Other interest income				367				372				337				(5	)		-1.3	%			30			8.9	%
Total interest income-FTE				111,844				108,594				92,565				3,250			3.0	%			19,279			20.8	%
Interest on deposits				4,768				4,970				5,061				(202	)		-4.1	%			(293	)		-5.8	%
Interest on fed funds pch and repos				104				106				140				(2	)		-1.9	%			(36	)		-25.7	%
Other interest expense				1,370				1,389				1,346				(19	)		-1.4	%			24			1.8	%
Total interest expense				6,242				6,465				6,547				(223	)		-3.4	%			(305	)		-4.7	%
Net interest income-FTE				105,602				102,129				86,018				3,473			3.4	%			19,584			22.8	%
Provision for loan losses, LHFI				(1,983	)			(3,624	)			(535	)			1,641			-45.3	%			(1,448	)		n/m
Provision for loan losses, acquired loans				4,169				3,292				1,945				877			26.6	%			2,224			n/m
Net interest income after provision-FTE				103,416				102,461				84,608				955			0.9	%			18,808			22.2	%
Service charges on deposit accounts				13,114				13,852				12,391				(738	)		-5.3	%			723			5.8	%
Insurance commissions				7,343				8,227				6,887				(884	)		-10.7	%			456			6.6	%
Wealth management				8,145				7,520				6,181				625			8.3	%			1,964			31.8	%
Bank card and other fees				9,580				8,929				7,978				651			7.3	%			1,602			20.1	%
Mortgage banking, net				5,186				8,440				11,331				(3,254	)		-38.6	%			(6,145	)		-54.2	%
Other, net				(4,802	)			165				(2,007	)			(4,967	)		n/m				(2,795	)		n/m
Nonint inc-excl sec gains (losses), net				38,566				47,133				42,761				(8,567	)		-18.2	%			(4,195	)		-9.8	%
Security gains (losses), net				107				-				18				107			n/m				89			n/m
Total noninterest income				38,673				47,133				42,779				(8,460	)		-17.9	%			(4,106	)		-9.6	%
Salaries and employee benefits				56,687				56,043				49,724				644			1.1	%			6,963			14.0	%
Services and fees				14,476				13,580				12,572				896			6.6	%			1,904			15.1	%
Net occupancy-premises				6,659				6,644				5,023				15			0.2	%			1,636			32.6	%
Equipment expense				6,400				6,271				5,288				129			2.1	%			1,112			21.0	%
FDIC assessment expense				2,228				2,376				1,075				(148	)		-6.2	%			1,153			n/m
ORE/Foreclosure expense				3,009				3,079				3,173				(70	)		-2.3	%			(164	)		-5.2	%
Other expense				15,408				13,531				10,454				1,877			13.9	%			4,954			47.4	%
Total noninterest expense				104,867				101,524				87,309				3,343			3.3	%			17,558			20.1	%
Income before income taxes and tax eq adj				37,222				48,070				40,078				(10,848	)		-22.6	%			(2,856	)		-7.1	%
Tax equivalent adjustment				3,747				3,700				3,699				47			1.3	%			48			1.3	%
Income before income taxes				33,475				44,370				36,379				(10,895	)		-24.6	%			(2,904	)		-8.0	%
Income taxes				5,436				11,336				8,669				(5,900	)		-52.0	%			(3,233	)		-37.3	%
Net income available to common shareholders			$	28,039			$	33,034			$	27,710			$	(4,995	)		-15.1	%		$	329			1.2	%
Per common share data
Earnings per share - basic			$	0.42			$	0.49			$	0.43			$	(0.07	)		-14.3	%		$	(0.01	)		-2.3	%
Earnings per share - diluted			$	0.42			$	0.49			$	0.43			$	(0.07	)		-14.3	%		$	(0.01	)		-2.3	%
Dividends per share			$	0.23			$	0.23			$	0.23			$	-			0.0	%		$	-			0.0	%
Weighted average common shares outstanding
Basic				67,249,877				67,177,013				64,785,457
Diluted				67,449,778				67,382,478				65,007,281
Period end common shares outstanding				67,372,980				67,181,694				64,820,414
OTHER FINANCIAL DATA
Return on common equity				8.26	%			9.83	%			8.56	%
Return on average tangible common equity				12.59	%			14.92	%			11.51	%
Return on assets				0.95	%			1.11	%			1.12	%
Interest margin - Yield - FTE				4.35	%			4.19	%			4.23	%
Interest margin - Cost				0.24	%			0.25	%			0.30	%
Net interest margin - FTE				4.10	%			3.94	%			3.94	%
Efficiency ratio (1)				72.74	%			68.02	%			67.80	%
Full-time equivalent employees				3,110				3,110				2,666
COMMON STOCK PERFORMANCE
Market value-Close			$	26.84			$	25.60			$	22.46
Common book value			$	20.11			$	19.79			$	19.86
Tangible common book value			$	13.95			$	13.58			$	15.10
(1) - Excludes nonrecurring income and expense items such as securities gains or losses, bargain purchase gains and non-routine acquisition related transaction expenses.
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, 2013
($ in thousands)
(unaudited)
		Quarter Ended												Linked Quarter							Year over Year
NONPERFORMING ASSETS (1)			12/31/2013				9/30/2013				12/31/2012			$	Change			% Change			$	Change			% Change
Nonaccrual loans
Alabama		$	14			$	81			$	-			$	(67	)		-82.7	%		$	14			n/m
Florida			12,278				14,619				19,314				(2,341	)		-16.0	%			(7,036	)		-36.4	%
Mississippi (2)			42,307				43,132				38,960				(825	)		-1.9	%			3,347			8.6	%
Tennessee (3)			4,390				5,596				8,401				(1,206	)		-21.6	%			(4,011	)		-47.7	%
Texas			6,249				9,953				15,688				(3,704	)		-37.2	%			(9,439	)		-60.2	%
Total nonaccrual loans			65,238				73,381				82,363				(8,143	)		-11.1	%			(17,125	)		-20.8	%
Other real estate
Alabama			25,912				25,308				-				604			2.4	%			25,912			n/m
Florida			34,480				39,198				18,569				(4,718	)		-12.0	%			15,911			85.7	%
Mississippi (2)			22,766				25,439				27,771				(2,673	)		-10.5	%			(5,005	)		-18.0	%
Tennessee (3)			12,892				14,615				17,589				(1,723	)		-11.8	%			(4,697	)		-26.7	%
Texas			10,489				11,769				14,260				(1,280	)		-10.9	%			(3,771	)		-26.4	%
Total other real estate			106,539				116,329				78,189				(9,790	)		-8.4	%			28,350			36.3	%
Total nonperforming assets		$	171,777			$	189,710			$	160,552			$	(17,933	)		-9.5	%		$	11,225			7.0	%
LOANS PAST DUE OVER 90 DAYS (4)
LHFI		$	3,298			$	2,344			$	6,378			$	954			40.7	%		$	(3,080	)		-48.3	%
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)		$	21,540			$	18,432			$	43,073			$	3,108			16.9	%		$	(21,533	)		-50.0	%
		Quarter Ended												Linked Quarter							Year over Year
ALLOWANCE FOR LOAN LOSSES (4)			12/31/2013				9/30/2013				12/31/2012			$	Change			% Change			$	Change			% Change
Beginning Balance		$	68,632			$	72,825			$	83,526			$	(4,193	)		-5.8	%		$	(14,894	)		-17.8	%
Provision for loan losses			(1,983	)			(3,624	)			(535	)			1,641			-45.3	%			(1,448	)		n/m
Charge-offs			(3,305	)			(3,817	)			(8,829	)			512			-13.4	%			5,524			-62.6	%
Recoveries			3,104				3,248				4,576				(144	)		-4.4	%			(1,472	)		-32.2	%
Net (charge-offs) recoveries			(201	)			(569	)			(4,253	)			368			-64.7	%			4,052			-95.3	%
Ending Balance		$	66,448			$	68,632			$	78,738			$	(2,184	)		-3.2	%		$	(12,290	)		-15.6	%
PROVISION FOR LOAN LOSSES (4)
Alabama		$	332			$	550			$	-			$	(218	)		-39.6	%		$	332			n/m
Florida			(2,350	)			(2,642	)			(706	)			292			-11.1	%			(1,644	)		n/m
Mississippi (2)			3,336				(1,051	)			2,031				4,387			n/m				1,305			64.3	%
Tennessee (3)			(117	)			(150	)			(1,037	)			33			-22.0	%			920			-88.7	%
Texas			(3,184	)			(331	)			(823	)			(2,853	)		n/m				(2,361	)		n/m
Total provision for loan losses		$	(1,983	)		$	(3,624	)		$	(535	)		$	1,641			-45.3	%		$	(1,448	)		n/m
NET CHARGE-OFFS (4)
Alabama		$	74			$	132			$	-			$	(58	)		-43.9	%		$	74			n/m
Florida			(634	)			(138	)			(237	)			(496	)		n/m				(397	)		n/m
Mississippi (2)			393				375				874				18			4.8	%			(481	)		-55.0	%
Tennessee (3)			506				(153	)			(43	)			659			n/m				549			n/m
Texas			(138	)			353				3,659				(491	)		n/m				(3,797	)		n/m
Total net charge-offs (recoveries)		$	201			$	569			$	4,253			$	(368	)		-64.7	%		$	(4,052	)		-95.3	%
CREDIT QUALITY RATIOS (1)
Net charge offs/average loans			0.01	%			0.04	%			0.29	%
Provision for loan losses/average loans			-0.13	%			-0.25	%			-0.04	%
Nonperforming loans/total loans (incl LHFS)			1.10	%			1.26	%			1.41	%
Nonperforming assets/total loans (incl LHFS)			2.89	%			3.26	%			2.74	%
Nonperforming assets/total loans (incl LHFS) +ORE			2.84	%			3.20	%			2.71	%
ALL/total loans (excl LHFS)			1.15	%			1.20	%			1.41	%
ALL-commercial/total commercial loans			1.30	%			1.39	%			1.59	%
ALL-consumer/total consumer and home mortgage loans			0.75	%			0.73	%			0.97	%
ALL/nonperforming loans			101.86	%			93.53	%			95.60	%
ALL/nonperforming loans -
(excl impaired loans)			190.70	%			161.96	%			174.46	%
CAPITAL RATIOS
Common equity/total assets			11.49	%			11.26	%			13.10	%
Tangible common equity/tangible assets			8.26	%			8.01	%			10.28	%
Tangible common equity/risk-weighted assets			11.88	%			11.66	%			14.56	%
Tier 1 leverage ratio			9.06	%			8.78	%			10.97	%
Tier 1 common risk-based capital ratio			12.21	%			11.92	%			14.63	%
Tier 1 risk-based capital ratio			12.97	%			12.69	%			15.53	%
Total risk-based capital ratio			14.18	%			14.02	%			17.22	%
(1) - Excludes Acquired Loans and Covered Other Real Estate
(2) - Mississippi includes Central and Southern Mississippi Regions
(3) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions
(4) - Excludes Acquired Loans
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, 2013
($ in thousands)
(unaudited)
			Quarter Ended																				Year Ended
AVERAGE BALANCES				12/31/2013				9/30/2013				6/30/2013				3/31/2013				12/31/2012				12/31/2013				12/31/2012
Securities AFS-taxable			$	3,026,186			$	3,279,606			$	3,259,086			$	2,836,051			$	2,466,738			$	3,101,245			$	2,386,552
Securities AFS-nontaxable				160,989				172,055				171,974				167,773				169,906				168,190				166,790
Securities HTM-taxable				265,792				59,168				59,678				48,632				26,510				108,778				29,551
Securities HTM-nontaxable				21,172				11,024				11,520				16,648				17,443				15,092				19,188
Total securities				3,474,139				3,521,853				3,502,258				3,069,104				2,680,597				3,393,305				2,602,081
Loans (including loans held for sale)				5,847,557				5,784,170				5,735,296				5,741,340				5,834,525				5,777,401				5,918,002
Acquired loans:
Noncovered loans				812,426				888,883				949,367				530,643				82,317				796,358				72,111
Covered loans				34,640				39,561				43,425				49,815				58,272				41,812				67,310
Fed funds sold and rev repos				11,094				8,978				6,808				6,618				8,747				8,388				7,552
Other earning assets				32,118				38,226				34,752				34,661				31,168				34,941				31,669
Total earning assets				10,211,974				10,281,671				10,271,906				9,432,181				8,695,626				10,052,205				8,698,725
Allowance for loan losses				(78,742	)			(79,696	)			(84,574	)			(86,447	)			(88,715	)			(82,336	)			(89,954	)
Cash and due from banks				275,051				272,320				284,056				270,740				238,976				275,545				244,952
Other assets				1,360,712				1,284,813				1,311,262				1,183,493				972,748				1,285,555				949,328
Total assets			$	11,768,995			$	11,759,108			$	11,782,650			$	10,799,967			$	9,818,635			$	11,530,969			$	9,803,051
Interest-bearing demand deposits			$	1,803,956			$	1,842,379			$	1,811,402			$	1,703,336			$	1,545,967			$	1,790,687			$	1,542,601
Savings deposits				2,952,472				2,995,110				3,060,437				2,767,747				2,275,569				2,944,588				2,357,424
Time deposits less than $100,000				1,344,488				1,380,954				1,419,381				1,268,619				1,120,735				1,353,643				1,157,822
Time deposits of $100,000 or more				961,075				993,948				1,029,498				893,104				760,363				969,660				795,126
Total interest-bearing deposits				7,061,991				7,212,391				7,320,718				6,632,806				5,702,634				7,058,578				5,852,973
Fed funds purchased and repos				361,758				364,446				312,865				266,958				388,007				326,870				370,283
Short-term borrowings				63,531				59,324				51,718				66,999				85,313				60,381				83,042
Long-term FHLB advances				8,507				8,620				9,575				4,580				-				7,833				-
Subordinated notes				49,898				49,890				49,882				49,874				49,866				49,886				49,854
Junior subordinated debt securities				61,856				61,856				82,460				77,989				61,856				70,971				61,856
Total interest-bearing liabilities				7,607,541				7,756,527				7,827,218				7,099,206				6,287,676				7,574,519				6,418,008
Noninterest-bearing deposits				2,611,209				2,479,082				2,451,547				2,199,043				2,115,784				2,436,470				2,006,230
Other liabilities				203,270				190,143				159,525				176,210				126,953				182,383				117,196
Total liabilities				10,422,020				10,425,752				10,438,290				9,474,459				8,530,413				10,193,372				8,541,434
Shareholders' equity				1,346,975				1,333,356				1,344,360				1,325,508				1,288,222				1,337,597				1,261,617
Total liabilities and equity			$	11,768,995			$	11,759,108			$	11,782,650			$	10,799,967			$	9,818,635			$	11,530,969			$	9,803,051
PERIOD END BALANCES				12/31/2013				9/30/2013				6/30/2013				3/31/2013				12/31/2012
Cash and due from banks			$	345,761			$	335,695			$	301,532			$	242,896			$	231,489
Fed funds sold and rev repos				7,253				7,867				7,869				5,926				7,046
Securities available for sale				2,194,154				3,372,101				3,511,683				3,546,083				2,657,745
Securities held to maturity				1,168,728				69,980				70,338				73,666				42,188
Loans held for sale (LHFS)				149,169				119,986				202,699				207,758				257,986
Loans held for investment (LHFI)				5,798,881				5,696,641				5,577,382				5,531,788				5,592,754
Allowance for loan losses				(66,448	)			(68,632	)			(72,825	)			(76,900	)			(78,738	)
Net LHFI				5,732,433				5,628,009				5,504,557				5,454,888				5,514,016
Acquired loans:
Noncovered loans				769,990				837,875				922,453				1,003,127				81,523
Covered loans				34,216				37,250				40,820				47,589				52,041
Allowance for loan losses, acquired loans				(9,636	)			(5,333	)			(2,690	)			(6,458	)			(6,075	)
Net acquired loans				794,570				869,792				960,583				1,044,258				127,489
Net LHFI and acquired loans				6,527,003				6,497,801				6,465,140				6,499,146				5,641,505
Premises and equipment, net				207,283				208,837				210,845				210,789				154,841
Mortgage servicing rights				67,834				63,150				60,380				51,529				47,341
Goodwill				372,851				372,463				368,315				366,366				291,104
Identifiable intangible assets				41,990				44,424				46,889				49,361				17,306
Other real estate, excluding covered other real estate				106,539				116,329				117,712				118,406				78,189
Covered other real estate				5,108				5,092				5,147				5,879				5,741
FDIC indemnification asset				14,347				17,085				17,342				20,198				21,774
Other assets				582,363				574,387				477,421				452,512				374,412
Total assets			$	11,790,383			$	11,805,197			$	11,863,312			$	11,850,515			$	9,828,667
Deposits:
Noninterest-bearing			$	2,663,503			$	2,643,612			$	2,520,895			$	2,534,287			$	2,254,211
Interest-bearing				7,196,399				7,143,622				7,296,697				7,375,144				5,642,306
Total deposits				9,859,902				9,787,234				9,817,592				9,909,431				7,896,517
Fed funds purchased and repos				251,587				342,465				374,021				219,769				288,829
Short-term borrowings				66,385				60,698				56,645				46,325				86,920
Long-term FHLB advances				8,458				8,562				8,679				10,969				-
Subordinated notes				49,904				49,896				49,888				49,879				49,871
Junior subordinated debt securities				61,856				61,856				61,856				94,856				61,856
Other liabilities				137,338				164,972				167,812				166,340				157,305
Total liabilities				10,435,430				10,475,683				10,536,493				10,497,569				8,541,298
Common stock				14,038				13,998				13,994				13,992				13,506
Capital surplus				349,680				343,759				342,359				342,233				285,905
Retained earnings				1,034,966				1,023,983				1,006,554				991,012				984,563
Accum other comprehensive
(loss) income, net of tax				(43,731	)			(52,226	)			(36,088	)			5,709				3,395
Total shareholders' equity				1,354,953				1,329,514				1,326,819				1,352,946				1,287,369
Total liabilities and equity			$	11,790,383			$	11,805,197			$	11,863,312			$	11,850,515			$	9,828,667
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2013
($ in thousands except per share data)
(unaudited)
			Quarter Ended																				Year Ended
INCOME STATEMENTS				12/31/2013				9/30/2013				6/30/2013				3/31/2013				12/31/2012				12/31/2013				12/31/2012
Interest and fees on LHFS & LHFI-FTE			$	67,038			$	68,417			$	67,750			$	67,412			$	69,989			$	270,617			$	291,273
Interest and fees on acquired loans				23,384				19,183				20,987				12,782				4,859				76,336				18,122
Interest on securities-taxable				19,078				18,654				18,547				16,539				15,305				72,818				66,950
Interest on securities-tax exempt-FTE				1,963				1,960				1,974				2,018				2,066				7,915				8,343
Interest on fed funds sold and rev repos				14				8				5				4				9				31				26
Other interest income				367				372				372				355				337				1,466				1,342
Total interest income-FTE				111,844				108,594				109,635				99,110				92,565				429,183				386,056
Interest on deposits				4,768				4,970				5,071				4,909				5,061				19,718				24,604
Interest on fed funds pch and repos				104				106				88				81				140				379				588
Other interest expense				1,370				1,389				1,513				1,490				1,346				5,762				5,477
Total interest expense				6,242				6,465				6,672				6,480				6,547				25,859				30,669
Net interest income-FTE				105,602				102,129				102,963				92,630				86,018				403,324				355,387
Provision for loan losses, LHFI				(1,983	)			(3,624	)			(4,846	)			(2,968	)			(535	)			(13,421	)			6,766
Provision for loan losses, acquired loans				4,169				3,292				(1,552	)			130				1,945				6,039				5,528
Net interest income after provision-FTE				103,416				102,461				109,361				95,468				84,608				410,706				343,093
Service charges on deposit accounts				13,114				13,852				12,929				11,681				12,391				51,576				50,351
Insurance commissions				7,343				8,227				8,014				7,242				6,887				30,826				28,205
Wealth management				8,145				7,520				6,940				6,875				6,181				29,480				23,056
Bank card and other fees				9,580				8,929				9,507				7,945				7,978				35,961				30,445
Mortgage banking, net				5,186				8,440				8,295				11,583				11,331				33,504				40,960
Other, net				(4,802	)			165				(2,145	)			(1,191	)			(2,007	)			(7,973	)			1,113
Nonint inc-excl sec gains (losses), net				38,566				47,133				43,540				44,135				42,761				173,374				174,130
Security gains (losses), net				107				-				174				204				18				485				1,059
Total noninterest income				38,673				47,133				43,714				44,339				42,779				173,859				175,189
Salaries and employee benefits				56,687				56,043				55,405				53,592				49,724				221,727				190,519
Services and fees				14,476				13,580				12,816				13,032				12,572				53,904				46,751
Net occupancy-premises				6,659				6,644				6,703				5,955				5,023				25,961				20,267
Equipment expense				6,400				6,271				6,193				5,674				5,288				24,538				20,478
FDIC assessment expense				2,228				2,376				2,376				2,021				1,075				9,001				6,502
ORE/Foreclosure expense				3,009				3,079				5,131				3,820				3,173				15,039				11,165
Other expense				15,408				13,531				18,571				18,051				10,454				65,561				48,820
Total noninterest expense				104,867				101,524				107,195				102,145				87,309				415,731				344,502
Income before income taxes and tax eq adj				37,222				48,070				45,880				37,662				40,078				168,834				173,780
Tax equivalent adjustment				3,747				3,700				3,735				3,655				3,699				14,837				14,397
Income before income taxes				33,475				44,370				42,145				34,007				36,379				153,997				159,383
Income taxes				5,436				11,336				11,024				9,141				8,669				36,937				42,100
Net income available to common shareholders			$	28,039			$	33,034			$	31,121			$	24,866			$	27,710			$	117,060			$	117,283
Per common share data
Earnings per share - basic			$	0.42			$	0.49			$	0.46			$	0.38			$	0.43			$	1.75			$	1.81
Earnings per share - diluted			$	0.42			$	0.49			$	0.46			$	0.38			$	0.43			$	1.75			$	1.81
Dividends per share			$	0.23			$	0.23			$	0.23			$	0.23			$	0.23			$	0.92			$	0.92
Weighted average common shares outstanding
Basic				67,249,877				67,177,013				67,162,530				65,983,204				64,785,457				66,897,404				64,658,765
Diluted				67,449,778				67,382,478				67,344,117				66,149,656				65,007,281				67,073,072				64,850,550
Period end common shares outstanding				67,372,980				67,181,694				67,163,195				67,151,087				64,820,414				67,372,980				64,820,414
OTHER FINANCIAL DATA
Return on common equity				8.26	%			9.83	%			9.29	%			7.61	%			8.56	%			8.75	%			9.30	%
Return on average tangible common equity				12.59	%			14.92	%			14.09	%			10.82	%			11.51	%			13.09	%			12.55	%
Return on assets				0.95	%			1.11	%			1.06	%			0.93	%			1.12	%			1.02	%			1.20	%
Interest margin - Yield - FTE				4.35	%			4.19	%			4.28	%			4.26	%			4.23	%			4.27	%			4.44	%
Interest margin - Cost				0.24	%			0.25	%			0.26	%			0.28	%			0.30	%			0.26	%			0.35	%
Net interest margin - FTE				4.10	%			3.94	%			4.02	%			3.98	%			3.94	%			4.01	%			4.09	%
Efficiency ratio (1)				72.74	%			68.02	%			70.44	%			67.84	%			67.80	%			69.77	%			65.02	%
Full-time equivalent employees				3,110				3,110				3,119				3,164				2,666
COMMON STOCK PERFORMANCE
Market value-Close			$	26.84			$	25.60			$	24.58			$	25.01			$	22.46
Common book value			$	20.11			$	19.79			$	19.76			$	20.15			$	19.86
Tangible common book value			$	13.95			$	13.58			$	13.57			$	13.96			$	15.10
(1) - Excludes nonrecurring income and expense items such as securities gains or losses, bargain purchase gains and non-routine acquisition related transaction expenses.
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2013
($ in thousands)
(unaudited)
			Quarter Ended
NONPERFORMING ASSETS (1)				12/31/2013				9/30/2013				6/30/2013				3/31/2013				12/31/2012
Nonaccrual loans
Alabama			$	14			$	81			$	73			$	-			$	-
Florida				12,278				14,619				15,916				14,046				19,314
Mississippi (2)				42,307				43,132				41,761				46,697				38,960
Tennessee (3)				4,390				5,596				4,482				4,877				8,401
Texas				6,249				9,953				12,086				17,702				15,688
Total nonaccrual loans				65,238				73,381				74,318				83,322				82,363
Other real estate
Alabama				25,912				25,308				27,245				28,870				-
Florida				34,480				39,198				35,025				30,662				18,569
Mississippi (2)				22,766				25,439				26,843				26,457				27,771
Tennessee (3)				12,892				14,615				15,811				18,339				17,589
Texas				10,489				11,769				12,788				14,078				14,260
Total other real estate				106,539				116,329				117,712				118,406				78,189
Total nonperforming assets			$	171,777			$	189,710			$	192,030			$	201,728			$	160,552
LOANS PAST DUE OVER 90 DAYS (4)
LHFI			$	3,298			$	2,344			$	4,194			$	2,772			$	6,378
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)			$	21,540			$	18,432			$	14,003			$	4,469			$	43,073
			Quarter Ended																				Year Ended
ALLOWANCE FOR LOAN LOSSES (4)				12/31/2013				9/30/2013				6/30/2013				3/31/2013				12/31/2012				12/31/2013				12/31/2012
Beginning Balance			$	68,632			$	72,825			$	76,900			$	78,738			$	83,526			$	78,738			$	89,518
Provision for loan losses				(1,983	)			(3,624	)			(4,846	)			(2,968	)			(535	)			(13,421	)			6,766
Charge-offs				(3,305	)			(3,817	)			(3,031	)			(3,325	)			(8,829	)			(13,478	)			(31,376	)
Recoveries				3,104				3,248				3,802				4,455				4,576				14,609				13,830
Net (charge-offs) recoveries				(201	)			(569	)			771				1,130				(4,253	)			1,131				(17,546	)
Ending Balance			$	66,448			$	68,632			$	72,825			$	76,900			$	78,738			$	66,448			$	78,738
PROVISION FOR LOAN LOSSES (4)
Alabama			$	332			$	550			$	232			$	676			$	-			$	1,790			$	-
Florida				(2,350	)			(2,642	)			(3,425	)			(3,675	)			(706	)			(12,092	)			(730	)
Mississippi (2)				3,336				(1,051	)			(520	)			(1,920	)			2,031				(155	)			7,790
Tennessee (3)				(117	)			(150	)			(335	)			(378	)			(1,037	)			(980	)			460
Texas				(3,184	)			(331	)			(798	)			2,329				(823	)			(1,984	)			(754	)
Total provision for loan losses			$	(1,983	)		$	(3,624	)		$	(4,846	)		$	(2,968	)		$	(535	)		$	(13,421	)		$	6,766
NET CHARGE-OFFS (4)
Alabama			$	74			$	132			$	67			$	11			$	-			$	284			$	-
Florida				(634	)			(138	)			(1,426	)			(849	)			(237	)			(3,047	)			5,261
Mississippi (2)				393				375				291				(290	)			874				769				7,602
Tennessee (3)				506				(153	)			103				249				(43	)			705				1,154
Texas				(138	)			353				194				(251	)			3,659				158				3,529
Total net charge-offs (recoveries)			$	201			$	569			$	(771	)		$	(1,130	)		$	4,253			$	(1,131	)		$	17,546
CREDIT QUALITY RATIOS (1)
Net charge offs/average loans				0.01	%			0.04	%			-0.05	%			-0.08	%			0.29	%			-0.02	%			0.30	%
Provision for loan losses/average loans				-0.13	%			-0.25	%			-0.34	%			-0.21	%			-0.04	%			-0.23	%			0.11	%
Nonperforming loans/total loans (incl LHFS)				1.10	%			1.26	%			1.29	%			1.45	%			1.41	%
Nonperforming assets/total loans (incl LHFS)				2.89	%			3.26	%			3.32	%			3.51	%			2.74	%
Nonperforming assets/total loans (incl LHFS) +ORE				2.84	%			3.20	%			3.26	%			3.44	%			2.71	%
ALL/total loans (excl LHFS)				1.15	%			1.20	%			1.31	%			1.39	%			1.41	%
ALL-commercial/total commercial loans				1.30	%			1.39	%			1.48	%			1.56	%			1.59	%
ALL-consumer/total consumer and home mortgage loans				0.75	%			0.73	%			0.84	%			0.94	%			0.97	%
ALL/nonperforming loans				101.86	%			93.53	%			97.99	%			92.29	%			95.60	%
ALL/nonperforming loans -
(excl impaired loans)				190.70	%			161.96	%			158.75	%			145.83	%			174.46	%
CAPITAL RATIOS
Common equity/total assets				11.49	%			11.26	%			11.18	%			11.42	%			13.10	%
Tangible common equity/tangible assets				8.26	%			8.01	%			7.96	%			8.20	%			10.28	%
Tangible common equity/risk-weighted assets				11.88	%			11.66	%			11.57	%			11.92	%			14.56	%
Tier 1 leverage ratio				9.06	%			8.78	%			8.71	%			9.83	%			10.97	%
Tier 1 common risk-based capital ratio				12.21	%			11.92	%			11.79	%			11.79	%			14.63	%
Tier 1 risk-based capital ratio				12.97	%			12.69	%			12.55	%			12.97	%			15.53	%
Total risk-based capital ratio				14.18	%			14.02	%			13.89	%			14.42	%			17.22	%
(1) - Excludes Acquired Loans and Covered Other Real Estate
(2) - Mississippi includes Central and Southern Mississippi Regions
(3) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions
(4) - Excludes Acquired Loans
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
December 31, 2013
($ in thousands)
(unaudited)

Note 1 - Business Combinations

Oxford, Mississippi Branches

On July 26, 2013, Trustmark National Bank (TNB), a subsidiary of Trustmark Corporation (Trustmark), completed its acquisition of two branches of SOUTHBank, F.S.B. (SOUTHBank), located in Oxford, Mississippi. As a result of this acquisition, TNB assumed deposit accounts of approximately $11.7 million in addition to purchasing the two physical branch offices. The transaction was not material to Trustmark's consolidated financial statements and was not considered a business combination in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 805, "Business Combinations."

BancTrust Financial Group, Inc.

On February 15, 2013, Trustmark completed its merger with BancTrust Financial Group, Inc. (BancTrust), a 26-year-old bank holding company headquartered in Mobile, Alabama. In accordance with the terms of the definitive agreement, the holders of BancTrust common stock received 0.125 of a share of Trustmark common stock for each share of BancTrust common stock in a tax-free exchange. Trustmark issued approximately 2.24 million shares of its common stock for all issued and outstanding shares of BancTrust common stock. The total value of the 2.24 million shares of Trustmark common stock issued to the BancTrust shareholders on the acquisition date was approximately $53.5 million, based on a closing stock price of $23.83 per share of Trustmark common stock on February 15, 2013. At closing, Trustmark repurchased the $50.0 million of BancTrust preferred stock and associated warrant issued to the U.S. Department of Treasury under the Capital Purchase Program for approximately $52.6 million.

The acquisition of BancTrust is consistent with Trustmark's strategic plan to selectively expand the Trustmark franchise. The acquisition of BancTrust provided Trustmark entry into more than 15 markets in Alabama and enhanced the Trustmark franchise in the Florida Panhandle.

This acquisition was accounted for under the acquisition method in accordance with FASB ASC Topic 805. Accordingly, the assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the acquisition date. The fair values of assets acquired and liabilities assumed are subject to adjustment if additional information becomes available to indicate a more accurate or appropriate value for an asset or liability during the measurement period, which is not to exceed one year from the acquisition date of February 15, 2013. Assets that are particularly susceptible to adjustment include certain loans, other real estate and certain premises and equipment.

Since the end of the first quarter of 2013, Trustmark has recorded an additional $6.3 million in goodwill based on changes to the estimated fair value of certain acquired loans, other real estate and premises and equipment, net. These measurement period adjustments have been presented on a retrospective basis, consistent with applicable accounting guidance. The estimated fair values were considered preliminary as of December 31, 2013 and are subject to refinement as additional information relative to the closing date fair values becomes available through the measurement period. The statement of assets purchased and liabilities assumed in the BancTrust acquisition is presented below at their adjusted estimated fair values as of the acquisition date of February 15, 2013 ($ in thousands):

	Assets
	Cash and due from banks			$	141,616
	Securities				528,016
	Loans held for sale				1,050
	Acquired noncovered loans				944,235
	Premises and equipment, net				54,952
	Identifiable intangible assets				33,498
	Other real estate				40,103
	Other assets				102,073
	Total Assets				1,845,543
	Liabilities
	Deposits				1,740,254
	Other borrowings				64,051
	Other liabilities				16,761
	Total Liabilities				1,821,066
	Net identified assets acquired at fair value				24,477
	Goodwill				81,597
	Net assets acquired at fair value			$	106,074

The excess of the consideration paid over the estimated fair value of the net assets acquired was $81.6 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 acquisition date. The core deposit intangible is being amortized on an accelerated basis over the estimated useful life, currently expected to be approximately 10 years.

Loans, excluding loans held for sale (LHFS), acquired from BancTrust were evaluated under a fair value process involving various degrees of deterioration in credit quality since origination, and also for those loans for which it was probable at acquisition that Trustmark would not be able to collect all contractually required payments. These loans, with the exception of revolving credit agreements and leases, are referred to as acquired impaired loans and are accounted for in accordance with FASB ASC Topic 310-30, "Loans and Debt Securities Acquired with Deteriorated Credit Quality."

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
December 31, 2013
($ in thousands)
(unaudited)

Note 1 - Business Combinations (continued)

The operations of BancTrust are included in Trustmark's operating results from February 15, 2013, and added revenue of $21.4 million and net income available to common shareholders of $3.7 million for the fourth quarter of 2013. Included in Trustmark's noninterest expense during the first quarter of 2013 are non-routine BancTrust transaction expenses totaling approximately $9.4 million (change in control and severance expense of $1.4 million included in salaries and benefits; professional fees, contract termination and other expenses of $7.9 million included in other expense).

Bay Bank & Trust Company

On March 16, 2012, Trustmark completed its merger with Bay Bank & Trust Co. (Bay Bank), a 76-year old financial institution headquartered in Panama City, Florida. Trustmark acquired all outstanding common stock of Bay Bank for approximately $22 million in cash and stock, comprised of $10 million in cash and the issuance of approximately 510 thousand shares of Trustmark common stock valued at $12 million. This acquisition was accounted for under the acquisition method in accordance with FASB ASC Topic 805. Accordingly, the assets and liabilities, both tangible and intangible, are recorded at their estimated fair values as of the acquisition date. The purchase price allocation was deemed preliminary as of March 31, 2012 and was finalized in the second quarter of 2012.

The statement of assets purchased and liabilities assumed in the Bay Bank acquisition is presented below at their estimated fair values as of the acquisition date of March 16, 2012 ($ in thousands):

	Assets
	Cash and due from banks			$	88,154
	Securities available for sale				26,369
	Acquired noncovered loans				97,914
	Premises and equipment, net				9,466
	Identifiable intangible assets				7,017
	Other real estate				2,569
	Other assets				3,471
	Total Assets				234,960
	Liabilities
	Deposits				208,796
	Other liabilities				526
	Total Liabilities				209,322
	Net assets acquired at fair value				25,638
	Consideration paid to Bay Bank				22,003
	Bargain purchase gain				3,635
	Income taxes				-
	Bargain purchase gain, net of taxes			$	3,635

The bargain purchase gain represents the excess of the net of the estimated fair value of the assets acquired and liabilities assumed over the consideration paid to Bay Bank. Initially, Trustmark recognized a bargain purchase gain of $2.8 million during the first quarter of 2012 and subsequently increased the bargain purchase gain by $881 thousand during the second quarter of 2012 as the fair values associated with the Bay Bank acquisition were finalized. The gain of $3.6 million recognized by Trustmark is considered a gain from a bargain purchase under FASB ASC Topic 805 and is included in other noninterest income. Included in noninterest expense during the first quarter of 2012 are non-routine Bay Bank transaction expenses totaling approximately $2.6 million (change in control and severance expense of $672 thousand included in salaries and benefits; contract termination and other expenses of $1.9 million included in other expense).

Loans acquired from Bay Bank were evaluated under a fair value process involving various degrees of deterioration in credit quality since origination, and also for those loans for which it was probable at acquisition that Trustmark would not be able to collect all contractually required payments. These loans, with the exception of revolving credit agreements, are referred to as acquired impaired loans and are accounted for in accordance with FASB ASC Topic 310-30.

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
December 31, 2013
($ 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):

				12/31/2013			9/30/2013			6/30/2013			3/31/2013			12/31/2012
SECURITIES AVAILABLE FOR SALE
U.S. Treasury securities			$	502		$	503		$	505		$	506		$	-
U.S. Government agency obligations
Issued by U.S. Government agencies				129,293			133,013			139,066			141,226			10
Issued by U.S. Government sponsored agencies				40,179			132,425			133,791			186,293			105,735
Obligations of states and political subdivisions				171,738			212,991			212,204			218,467			215,761
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA				14,474			48,240			46,330			51,138			19,902
Issued by FNMA and FHLMC				241,118			214,795			227,927			241,365			208,564
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA				1,290,741			2,048,275			2,156,320			2,090,516			1,466,366
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA				242,172			354,131			361,575			377,070			399,780
Asset-backed securities and structured financial products				63,937			227,728			233,965			239,502			241,627
Total securities available for sale			$	2,194,154		$	3,372,101		$	3,511,683		$	3,546,083		$	2,657,745
SECURITIES HELD TO MATURITY
U.S. Government agency obligations
Issued by U.S. Government sponsored agencies			$	100,159		$	-		$	-		$	-		$	-
Obligations of states and political subdivisions				65,987			30,229			30,295			33,071			36,206
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA				9,433			2,420			2,547			2,932			3,245
Issued by FNMA and FHLMC				12,724			564			567			569			572
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA				837,393			-			-			-			-
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA				143,032			36,767			36,929			37,094			2,165
Total securities held to maturity			$	1,168,728		$	69,980		$	70,338		$	73,666		$	42,188

During the fourth quarter of 2013, Trustmark reclassified approximately $1.099 billion of securities available for sale to securities held to maturity. The securities were transferred at fair value, which became the cost basis for the securities held to maturity. At the date of transfer, the net unrealized holding loss on the available for sale securities totaled approximately $46.6 million ($28.8 million, net of tax). These unrealized holding losses are amortized over the remaining life of the security as a yield adjustment in a manner consistent with the amortization or accretion of the original purchase premium or discount on the associated security. There were no gains or losses recognized as a result of the transfer. At December 31, 2013, the net unamortized, unrealized loss on the transferred securities included in accumulated other comprehensive (loss) income in the accompanying balance sheet totaled approximately $46.4 million ($28.6 million, net of tax).

During the 4th quarter of 2013, Trustmark sold $135.6 million of Collateralized Loan Obligations (CLO) generating a net gain of $1.3 million. These securities were identified as available for sale and had been carried in the asset-backed securities and structured financial products line item in the table shown above. This sale leaves Trustmark with a CLO balance of $25.8 million at December 31, 2013, which was subsequently sold in January 2014.

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 93% 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 membership in the Federal Home Loan Bank of Dallas, Federal Home Loan Bank of Atlanta and Federal Reserve Bank, Trustmark does not hold any equity investment in any GSE.

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
December 31, 2013
($ in thousands)
(unaudited)

Note 3 - Loan Composition

LHFI BY TYPE (excluding acquired loans)			12/31/2013				9/30/2013				6/30/2013				3/31/2013				12/31/2012
Loans secured by real estate:
Construction, land development and other land loans			$	596,889			$	572,057			$	519,263			$	485,419			$	468,975
Secured by 1-4 family residential properties (1)				1,485,564				1,482,963				1,414,871				1,430,293				1,497,480
Secured by nonfarm, nonresidential properties				1,415,139				1,408,342				1,406,930				1,385,669				1,410,264
Other real estate secured				189,362				196,328				192,568				174,680				189,949
Commercial and industrial loans				1,157,614				1,132,863				1,169,327				1,206,851				1,169,513
Consumer loans				165,308				164,612				160,318				160,253				171,660
Other loans				789,005				739,476				714,105				688,623				684,913
LHFI				5,798,881				5,696,641				5,577,382				5,531,788				5,592,754
Allowance for loan losses				(66,448	)			(68,632	)			(72,825	)			(76,900	)			(78,738	)
Net LHFI			$	5,732,433			$	5,628,009			$	5,504,557			$	5,454,888			$	5,514,016
(1) Previously reported 3/31/2013 balance was increased by $57.4 million due to the misclassification of the proceeds received from the GNMA delinquent loan sale, which should have decreased Other Assets.

ACQUIRED NONCOVERED LOANS BY TYPE		12/31/2013		9/30/2013		6/30/2013		3/31/2013		12/31/2012
Loans secured by real estate:
Construction, land development and other land loans		$ 98,928		$ 106,655		$ 132,116		$ 138,442		$ 10,056
Secured by 1-4 family residential properties		157,914		168,573		184,928		209,658		19,404
Secured by nonfarm, nonresidential properties		287,136		301,686		318,603		339,953		45,649
Other real estate secured		33,948		35,051		34,869		32,208		669
Commercial and industrial loans		149,495		186,649		206,338		235,286		3,035
Consumer loans		18,428		22,251		27,420		32,694		2,610
Other loans		24,141		17,010		18,179		14,886		100
Noncovered loans		769,990		837,875		922,453		1,003,127		81,523
Allowance for loan losses		(7,249)		(3,007)		(112)		(1,961)		(1,885)
Net noncovered loans		$ 762,741		$ 834,868		$ 922,341		$ 1,001,166		$ 79,638

ACQUIRED COVERED LOANS BY TYPE		12/31/2013		9/30/2013		6/30/2013		3/31/2013		12/31/2012
Loans secured by real estate:
Construction, land development and other land loans		$ 2,363		$ 2,585		$ 3,662		$ 3,875		$ 3,924
Secured by 1-4 family residential properties		16,416		17,785		18,899		20,980		23,990
Secured by nonfarm, nonresidential properties		10,945		12,120		13,341		17,355		18,407
Other real estate secured		2,644		2,817		2,929		3,365		3,567
Commercial and industrial loans		394		478		543		648		747
Consumer loans		119		151		173		179		177
Other loans		1,335		1,314		1,273		1,187		1,229
Covered loans		34,216		37,250		40,820		47,589		52,041
Allowance for loan losses		(2,387)		(2,326)		(2,578)		(4,497)		(4,190)
Net covered loans		$ 31,829		$ 34,924		$ 38,242		$ 43,092		$ 47,851

TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIALS December 31, 2013 ($ in thousands) (unaudited)
Note 3 - Loan Composition (continued)
		December 31, 2013
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		$	596,889		$	19,996		$	76,240		$	289,112			$	44,066			$	167,475
Secured by 1-4 family residential properties			1,485,564			15,041			47,462			1,263,409				137,133				22,519
Secured by nonfarm, nonresidential properties			1,415,139			24,628			148,350			756,457				148,372				337,332
Other real estate secured			189,362			3,441			4,873			132,925				22,092				26,031
Commercial and industrial loans			1,157,614			26,147			12,182			760,366				85,615				273,304
Consumer loans			165,308			12,934			2,617			128,922				18,443				2,392
Other loans			789,005			20,496			24,458			630,116				51,302				62,633
Loans		$	5,798,881		$	122,683		$	316,182		$	3,961,307			$	507,023			$	891,686
CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION (1)
Lots		$	47,605		$	885		$	29,155		$	13,461			$	1,539			$	2,565
Development			95,672			766			25,252			41,399				3,601				24,654
Unimproved land			112,758			1,467			18,997			61,926				14,338				16,030
1-4 family construction			96,518			9,419			2,214			58,020				3,060				23,805
Other construction			244,336			7,459			622			114,306				21,528				100,421
Construction, land development and other land loans		$	596,889		$	19,996		$	76,240		$	289,112			$	44,066			$	167,475
LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION (1)
Income producing:
Retail		$	160,086		$	2,930		$	40,720		$	63,776			$	17,000			$	35,660
Office			168,741			3,868			34,578			85,385				6,801				38,109
Nursing homes/assisted living			101,771			-			-			93,542				4,280				3,949
Hotel/motel			68,339			-			367			34,307				24,500				9,165
Industrial			68,173			693			6,018			26,458				152				34,852
Health care			13,908			3,100			-			10,711				97				-
Convenience stores			10,806			256			-			6,652				706				3,192
Other			154,761			5,264			19,950			75,792				3,818				49,937
Total income producing loans			746,585			16,111			101,633			396,623				57,354				174,864
Owner-occupied:
Office			104,576			1,550			14,910			60,003				4,458				23,655
Churches			81,312			2,008			2,983			40,363				25,342				10,616
Industrial warehouses			97,403			928			3,142			42,143				7,358				43,832
Health care			101,187			-			14,169			56,948				14,917				15,153
Convenience stores			56,026			-			1,649			31,496				3,277				19,604
Retail			28,374			464			3,665			17,003				3,258				3,984
Restaurants			34,714			-			1,830			28,400				3,330				1,154
Auto dealerships			12,056			-			246			10,077				1,692				41
Other			152,906			3,567			4,123			73,401				27,386				44,429
Total owner-occupied loans			668,554			8,517			46,717			359,834				91,018				162,468
Loans secured by nonfarm, nonresidential properties		$	1,415,139		$	24,628		$	148,350		$	756,457			$	148,372			$	337,332
(1) Excludes acquired loans.

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
December 31, 2013
($ 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
		12/31/2013		9/30/2013		6/30/2013		3/31/2013		12/31/2012		12/31/2013		12/31/2012
Securities - taxable		2.30%		2.22%		2.24%		2.33%		2.44%		2.27%		2.77%
Securities - nontaxable		4.28%		4.25%		4.31%		4.44%		4.39%		4.32%		4.49%
Securities - total		2.40%		2.32%		2.35%		2.45%		2.58%		2.38%		2.89%
Loans - LHFI & LHFS		4.55%		4.69%		4.74%		4.76%		4.77%		4.68%		4.92%
Acquired loans		10.95%		8.20%		8.48%		8.93%		13.75%		9.11%		13.00%
Loans - total		5.36%		5.18%		5.29%		5.14%		4.98%		5.24%		5.11%
FF sold & rev repo		0.50%		0.35%		0.29%		0.25%		0.41%		0.37%		0.34%
Other earning assets		4.53%		3.86%		4.29%		4.15%		4.30%		4.20%		4.24%
Total earning assets		4.35%		4.19%		4.28%		4.26%		4.23%		4.27%		4.44%
Interest-bearing deposits		0.27%		0.27%		0.28%		0.30%		0.35%		0.28%		0.42%
FF pch & repo		0.11%		0.12%		0.11%		0.12%		0.14%		0.12%		0.16%
Other borrowings		2.96%		3.07%		3.13%		3.03%		2.72%		3.05%		2.81%
Total interest-bearing liabilities		0.33%		0.33%		0.34%		0.37%		0.41%		0.34%		0.48%
Net interest margin		4.10%		3.94%		4.02%		3.98%		3.94%		4.01%		4.09%
Net interest margin excluding acquired loans		3.48%		3.52%		3.55%		3.66%		3.77%		3.55%		3.94%

Reflected in the table above are yields on earning assets and liabilities, along with the net interest margin which equals reported net interest income-FTE, annualized, as a percent of average earning assets. In addition, the table includes net interest margin excluding acquired loans, which equals reported net interest income-FTE excluding interest income on acquired loans, annualized, as a percent of average earning assets excluding average acquired loans. The net interest margin improved 16 basis points during the fourth quarter of 2013 primarily due to an increase in interest and fees on acquired loans, which was the result of increased acquired loan recoveries during the quarter.

During the fourth quarter of 2013, the yield on average acquired loans includes approximately $9.3 million in recoveries, or an annualized 4.35% of the average acquired loan balance. Excluding the recoveries on acquired loans, the yield on average acquired loans totaled 6.60%.

Note 5 - Mortgage Banking

Trustmark utilizes a portfolio of exchange-traded derivative instruments, such as Treasury note futures contracts and option contracts, to achieve a fair value return that offsets the changes in fair value of mortgage servicing rights (MSR) attributable to interest rates. These transactions are considered freestanding derivatives that do not otherwise qualify for hedge accounting under generally accepted accounting principles (GAAP). Changes in the fair value of these exchange-traded derivative instruments, including administrative costs, are recorded in noninterest income in mortgage banking, net and are offset by the changes in the fair value of the MSR. The MSR fair value represents the present value of future cash flows, which among other things includes decay and the effect of changes in interest rates. Ineffectiveness of hedging the MSR fair value is measured by comparing the change in value of hedge instruments to the change in the fair value of the MSR asset attributable to changes in interest rates and other market driven changes in valuation inputs and assumptions. The impact of this strategy resulted in a net positive ineffectiveness of $1.0 million for the quarter ended December 31, 2013 compared to a net negative ineffectiveness of $724 thousand for the quarter ended December 31, 2012.

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

		Quarter Ended																				Year Ended
			12/31/2013				9/30/2013				6/30/2013				3/31/2013				12/31/2012				12/31/2013				12/31/2012
Mortgage servicing income, net		$	4,688			$	4,552			$	4,385			$	4,267			$	4,441			$	17,892			$	16,202
Change in fair value-MSR from runoff			(2,182	)			(2,407	)			(2,756	)			(2,460	)			(2,631	)			(9,805	)			(9,808	)
Gain on sales of loans, net			2,202				6,465				7,597				10,165				12,034				26,429				33,919
Other, net			(533	)			(1,485	)			(1,052	)			(1,649	)			(1,789	)			(4,719	)			4,022
Mortgage banking income before hedge ineffectiveness			4,175				7,125				8,174				10,323				12,055				29,797				44,335
Change in fair value-MSR from market changes			3,937				287				6,467				1,127				(418	)			11,818				(9,378	)
Change in fair value of derivatives			(2,926	)			1,028				(6,346	)			133				(306	)			(8,111	)			6,003
Net positive (negative) hedge ineffectiveness			1,011				1,315				121				1,260				(724	)			3,707				(3,375	)
Mortgage banking, net		$	5,186			$	8,440			$	8,295			$	11,583			$	11,331			$	33,504			$	40,960

During the first quarter of 2013, Trustmark exercised its option to repurchase delinquent loans serviced for GNMA. These loans were subsequently sold to a third party under different repurchase provisions. Trustmark retained the servicing for these loans, which are fully guaranteed by FHA/VA. As a result of this repurchase and sale, the loans are no longer carried as "LHFS-Guaranteed GNMA serviced loans" (see pages 3 and 6). The transaction resulted in a gain of $534 thousand, which was recorded during the first quarter of 2013 and is included in the table above as "Gain on sales of loans, net."

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
December 31, 2013
($ in thousands)
(unaudited)

Note 6 - Other Noninterest Income and Expense

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

		Quarter Ended																				Year Ended
			12/31/2013				9/30/2013				6/30/2013				3/31/2013				12/31/2012				12/31/2013				12/31/2012
Partnership amortization for tax credit purposes		$	(5,642	)		$	(2,388	)		$	(2,221	)		$	(2,117	)		$	(3,202	)		$	(12,368	)		$	(8,417	)
Bargain purchase gain on Bay Bank acquisition			-				-				-				-				-				-				3,635
(Decrease) increase in FDIC indemnification asset			(2,429	)			211				(2,317	)			(1,365	)			(743	)			(5,900	)			(3,722	)
Other miscellaneous income			3,269				2,342				2,393				2,291				1,938				10,295				9,617
Total other, net		$	(4,802	)		$	165			$	(2,145	)		$	(1,191	)		$	(2,007	)		$	(7,973	)		$	1,113

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 or historical tax credits). These investments are recorded based on the equity method of accounting, which requires the equity in partnership losses to be recognized when incurred and are recorded as a reduction in other income. 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.

During the fourth quarter of 2013, other noninterest income included a write-down of the FDIC indemnification asset of $2.4 million on acquired covered loans obtained from Heritage as a result of loan pay-offs, improved cash flow projections and lower loss expectations for loan pools.

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

		Quarter Ended															Year Ended
			12/31/2013			9/30/2013			6/30/2013			3/31/2013			12/31/2012			12/31/2013			12/31/2012
Loan expense		$	4,419		$	3,390		$	4,267		$	2,995		$	3,274		$	15,071		$	20,248
Non-routine transaction expenses on acquisitions			-			-			-			7,920			-			7,920			1,917
Amortization of intangibles			2,434			2,466			2,472			1,442			1,022			8,814			3,788
Other miscellaneous expense			8,555			7,675			11,832			5,694			6,158			33,756			22,867
Total other expense		$	15,408		$	13,531		$	18,571		$	18,051		$	10,454		$	65,561		$	48,820

Other miscellaneous expense increased during the second quarter of 2013 due to a non-routine litigation expense of $4.0 million related to a proposed settlement on Trustmark's overdraft fees for insufficient funds on debit card purchases and ATM withdrawals as previously disclosed in the Form 8-K filed on June 26, 2013. During the third quarter of 2013, the United States District Court for the Southern District of Mississippi preliminarily approved the settlement. The court will hold a hearing on March 25, 2014 to determine whether to issue final approval of the settlement.

As previously mentioned in Note 1 - Business Combinations, during the first quarter of 2013, Trustmark incurred $7.9 million of non-routine BancTrust transaction expenses in other noninterest expense. These non-routine transaction expenses include $2.2 million of professional fees and $5.7 million of contract termination and other expenses.

Note 7 - Non-GAAP Financial Measures

In addition to capital ratios defined by 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.

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, 2013
($ in thousands)
(unaudited)

Note 7 - Non-GAAP Financial Measures (continued)
						Quarter Ended																				Year Ended
							12/31/2013				9/30/2013				6/30/2013				3/31/2013				12/31/2012				12/31/2013				12/31/2012
TANGIBLE COMMON EQUITY
AVERAGE BALANCES
Total shareholders' common equity						$	1,346,975			$	1,333,356			$	1,344,360			$	1,325,508			$	1,288,222			$	1,337,597			$	1,261,617
Less:Goodwill							(372,468	)			(368,482	)			(366,592	)			(324,902	)			(291,104	)			(358,270	)			(291,104	)
Identifiable intangible assets							(43,532	)			(45,988	)			(48,402	)			(35,187	)			(17,933	)			(43,308	)			(17,348	)
Total average tangible common equity						$	930,975			$	918,886			$	929,366			$	965,419			$	979,185			$	936,020			$	953,165
PERIOD END BALANCES
Total shareholders' common equity						$	1,354,953			$	1,329,514			$	1,326,819			$	1,352,946			$	1,287,369
Less: Goodwill							(372,851	)			(372,463	)			(368,315	)			(366,366	)			(291,104	)
Identifiable intangible assets							(41,990	)			(44,424	)			(46,889	)			(49,361	)			(17,306	)
Total tangible common equity				(a)		$	940,112			$	912,627			$	911,615			$	937,219			$	978,959
TANGIBLE ASSETS
Total assets						$	11,790,383			$	11,805,197			$	11,863,312			$	11,850,515			$	9,828,667
Less: Goodwill							(372,851	)			(372,463	)			(368,315	)			(366,366	)			(291,104	)
Identifiable intangible assets							(41,990	)			(44,424	)			(46,889	)			(49,361	)			(17,306	)
Total tangible assets				(b)		$	11,375,542			$	11,388,310			$	11,448,108			$	11,434,788			$	9,520,257
Risk-weighted assets				(c)		$	7,916,378			$	7,825,839			$	7,878,281			$	7,862,884			$	6,723,259
NET INCOME ADJUSTED FOR INTANGIBLE AMORTIZATION
Net income available to common shareholders						$	28,039			$	33,034			$	31,121			$	24,866			$	27,710			$	117,060			$	117,283
Plus: Intangible amortization net of tax							1,503				1,523				1,526				890				631				5,442				2,339
Net income adjusted for intangible amortization						$	29,542			$	34,557			$	32,647			$	25,756			$	28,341			$	122,502			$	119,622
Period end common shares outstanding				(d)			67,372,980				67,181,694				67,163,195				67,151,087				64,820,414
TANGIBLE COMMON EQUITY MEASUREMENTS
Return on average tangible common equity 1							12.59	%			14.92	%			14.09	%			10.82	%			11.51	%			13.09	%			12.55	%
Tangible common equity/tangible assets				(a)/(b)			8.26	%			8.01	%			7.96	%			8.20	%			10.28	%
Tangible common equity/risk-weighted assets				(a)/(c)			11.88	%			11.66	%			11.57	%			11.92	%			14.56	%
Tangible common book value				(a)/(d)*1,000		$	13.95			$	13.58			$	13.57			$	13.96			$	15.10
TIER 1 COMMON RISK-BASED CAPITAL
Total shareholders' equity						$	1,354,953			$	1,329,514			$	1,326,819			$	1,352,946			$	1,287,369
Eliminate qualifying AOCI							43,731				52,226				36,088				(5,709	)			(3,395	)
Qualifying tier 1 capital							60,000				60,000				60,000				93,000				60,000
Disallowed goodwill							(372,851	)			(372,463	)			(368,315	)			(366,366	)			(291,104	)
Adj to goodwill allowed for deferred taxes							14,445				14,093				13,740				13,388				13,035
Other disallowed intangibles							(41,990	)			(44,424	)			(46,889	)			(49,361	)			(17,306	)
Disallowed servicing intangible							(6,783	)			(6,315	)			(6,038	)			(5,153	)			(4,734	)
Disallowed deferred taxes							(24,647	)			(39,476	)			(26,411	)			(12,575	)			-
Total tier 1 capital							1,026,858				993,155				988,994				1,020,170				1,043,865
Less: Qualifying tier 1 capital							(60,000	)			(60,000	)			(60,000	)			(93,000	)			(60,000	)
Total tier 1 common capital				(e)		$	966,858			$	933,155			$	928,994			$	927,170			$	983,865
Tier 1 common risk-based capital ratio				(e)/(c)			12.21	%			11.92	%			11.79	%			11.79	%			14.63	%
1 Calculation = ((net income adjusted for intangible amortization/number of days in period)*number of days in year)/total average tangible common equity

Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20140128006571/en/

Trustmark Investor Contacts:
Louis E. Greer, 601-208-2310
Treasurer and
Principal Financial Officer
or
F. Joseph Rein, Jr., 601-208-6898
Senior Vice President
or
Trustmark Media Contact:
Melanie A. Morgan, 601-208-2979
Senior Vice President