JACKSON, Miss.--(BUSINESS WIRE)-- Trustmark Corporation (NASDAQ: TRMK) reported net income of $27.0 million in the first quarter of 2016, representing diluted earnings per share of $0.40. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable June 15, 2016, to shareholders of record on June 1, 2016.

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First Quarter Highlights

• Loans held for investment increased $176.6 million, or 10.0% annualized, from the prior quarter and $854.1 million, or 13.3%, year-over-year
• Continued solid credit performance; remain adequately reserved as the allowance for both held for investment and acquired loans represented 1.09% of total held for investment and acquired loans
• Revenue excluding acquired loans increased 3.0% linked quarter and 5.1% year-over-year to total $131.0 million in the first quarter
• Routine noninterest expense, which excludes ORE and intangible amortization, totaled $97.0 million, remaining stable from both the prior quarter and year-over-year
• Another tool for capital deployment: authorized a discretionary $100.0 million common share repurchase program through March 31, 2019

Gerard R. Host, President and CEO, stated, “Trustmark continued to achieve solid financial results. We maintained and expanded customer relationships by growing loans across our five-state franchise, while continuing to maintain solid credit quality. Routine noninterest expense remained well controlled. This past December, we introduced mobile deposit capabilities to myTrustmark℠, our consumer digital banking service, and adoption of this feature has been strong. We will continue to utilize technology to realign processes and enhance the Trustmark customer experience. During the first quarter, we authorized a discretionary $100.0 million common share repurchase program. We view this program as another capital management alternative, in addition to loan growth, acquisitions and a consistent dividend. Thanks to our associates, solid profitability and strong capital base, Trustmark remains well positioned to continue meeting the needs of our customers and creating long-term value for our shareholders.”

Balance Sheet Management

• Solid, diversified legacy loan growth demonstrates value of Trustmark’s five-state footprint
• Held-for-investment loan growth in the Texas market primarily reflects existing construction loans migrating to permanent financing within the portfolio as well as growth in loans to state and other political subdivisions
• Total deposits remained stable from the prior quarter with noninterest-bearing deposits representing approximately 29.8% of total deposits
• Solid capital base continues to provide flexibility in pursuing growth opportunities

Loans held for investment totaled $7.3 billion at March 31, 2016, an increase of 2.5% from the prior quarter and 13.3% from the comparable period one year earlier. Relative to the prior quarter, nonfarm, nonresidential real estate increased $156.8 million, reflecting growth in Alabama as well as migration of existing construction loans to permanent financing in the Mississippi and Texas markets. Similarly, other real estate secured loans, which include multifamily projects, expanded $62.5 million, also reflecting the migration of existing construction loans in the Texas market. Loans to state and other political subdivisions increased $52.4 million, driven primarily by growth in Texas and Alabama. Commercial and industrial loans increased $25.3 million, as growth in Tennessee, Mississippi, Florida and Texas, more than offset a marginal reduction in Alabama. Other loans, which include loans to nonprofits and real estate investment trusts, increased $21.0 million, driven principally by growth in Alabama and Tennessee.

Acquired loans totaled $364.8 million at March 31, 2016, down $25.7 million from the prior quarter. Collectively, loans held for investment and acquired loans totaled $7.6 billion at March 31, 2016, up $151.0 million, or 2.0%, from the prior quarter.

Deposits totaled $9.6 billion at March 31, 2016, remaining stable from the prior quarter. Trustmark continues to maintain an attractive, low-cost deposit base with approximately 60% of deposit balances in checking accounts and a total cost of deposits of 0.13%. The favorable mix of interest-bearing liabilities yielded a total cost of funds of 0.28% for the first quarter of 2016.

Trustmark’s capital position remained solid, reflecting the consistent profitability of its diversified financial services businesses. At March 31, 2016, Trustmark’s tangible equity to tangible assets ratio was 9.01%, while its total risk-based capital ratio was 13.92%. Tangible book value per share was $16.50 at March 31, 2016, up 6.2% year-over-year.

Credit Quality

• Other real estate decreased 7.0% and 20.4% from the prior quarter and year-over-year, respectively
• Net charge-offs were negligible and represented approximately 0.01% of average loans
• Allowance for loan losses represented 203.24% of nonperforming loans, excluding specifically reviewed impaired loans

Levels of both criticized and classified loan balances continued to reflect solid credit quality. Compared to balances one year earlier, criticized and classified loan balances decreased 5.1% and 4.0%, respectively. Relative to the prior quarter, criticized and classified loan balances increased 2.6% and 12.3%, respectively.

Nonperforming loans totaled $70.7 million at March 31, 2016, up 27.8% from the prior quarter and down 8.2% year-over-year; the linked-quarter increase was primarily a result of three substandard credits moving to nonaccrual status. Nonperforming assets, which include nonperforming loans and other real estate, totaled $142.5 million, reflecting a linked-quarter increase of 7.6% and year-over-year decrease of 14.8%.

Allocation of Trustmark's $69.7 million allowance for loan losses represented 1.06% of commercial loans and 0.65% of consumer and home mortgage loans, resulting in an allowance to total loans held for investment of 0.96% at March 31, 2016, representing a level management considers commensurate with the inherent risk in the loan portfolio. Collectively, the allowance for both held for investment and acquired loan losses represented 1.09% of total loans, which include held for investment and acquired loans.

Unless noted otherwise, all of the above credit quality metrics exclude acquired loans and other real estate covered by FDIC loss-share agreement.

Revenue Generation

• Net interest income (FTE) excluding acquired loans totaled $92.2 million in the first quarter, remaining stable from the prior quarter and up 6.7% year-over-year
• Noninterest income totaled $43.3 million, up 10.2% linked quarter and 2.2% year-over-year

Net interest income (FTE) in the first quarter totaled $99.2 million, resulting in a net interest margin of 3.54%. Relative to the prior quarter, net interest income (FTE) decreased $4.9 million as growth in interest income from both the held for sale and held for investment loan portfolios was more than offset by decreased interest income from the acquired loan portfolio. The yield on acquired loans in the first quarter totaled 7.46% and included recoveries from settlement of debt of $1.2 million; this compares to $5.4 million in recoveries from settlement of debt in the prior quarter. Excluding acquired loans, the net interest margin in the first quarter totaled 3.40%. Comparatively, the net interest margin (FTE) excluding both acquired loans and yield maintenance payments totaled 3.38% in the first quarter of 2016, remaining relatively stable from 3.40% in the prior quarter.

Noninterest income in the first quarter increased 10.2% from the prior quarter to total $43.3 million, as higher mortgage banking and other, net more than offset seasonal reductions in various fee-income categories. Service charges on deposit accounts declined $880 thousand from the prior quarter because of a seasonal reduction in NSF and overdraft fees. Bank card and other fees declined $238 thousand from the prior quarter because of a seasonal reduction in interchange income and lower revenue on interest rate swaps for commercial loan customers. Other, net increased $1.4 million from the prior quarter, resulting from decreased expense related to the FDIC indemnification asset as well as decreased partnership amortization of tax credit investments.

Insurance revenue totaled $8.6 million in the first quarter, up 1.1% from the prior quarter and down 0.3% year-over-year; this performance primarily reflects growth in the group health insurance business. Trustmark will continue to focus on business development as well as leveraging recent investments and restructuring initiatives to enhance growth and profitability.

Wealth management revenue in the first quarter totaled $7.4 million, down 5.4% and 7.3% from the prior quarter and year-over-year, respectively. The linked-quarter and year-over-year declines are primarily attributable to decreased revenue within investment services, somewhat reflecting volatile market conditions.

Mortgage banking revenue totaled $8.7 million in the first quarter, up $4.4 million from the prior quarter and down $266 thousand year-over-year. The linked-quarter change reflects an increased fair value on mortgage loans held for sale and positive mortgage servicing hedge ineffectiveness that more than offset decreased secondary marketing gains. Mortgage loan production totaled $307.5 million, down 9.6% from the prior quarter and up 1.0% year-over-year.

Noninterest Expense

• Noninterest expense remained stable at $98.9 million relative to the prior quarter and comparable period one year earlier
• Continued retail delivery channel optimization: will close six branches in the second quarter of 2016 across Alabama, Mississippi and Florida

Excluding ORE expense and intangible amortization of $2.0 million, routine noninterest expense in the first quarter totaled $97.0 million. Salaries and benefits totaled $57.2 million and remained stable from the prior quarter. Service and fees increased 5.5%, or $758 thousand, linked quarter primarily because of additional advertising and software expense. ORE and foreclosure expense totaled $181 thousand, up from the prior quarter, while net occupancy-premises expense totaled $6.2 million, down from the prior quarter. Other expense totaled $12.0 million, down $1.0 million on a linked-quarter basis.

Trustmark remains excited about the evolving role of technology in providing opportunities to expand product offerings that enhance the customer experience while reducing variable-servicing costs. Since the release of myTrustmark℠, our consumer digital banking service, adoption of online banking has notably increased with approximately two-thirds of these customers accessing myTrustmark℠ via mobile devices. Through Trustmark’s mobile-banking platform, customers are able to monitor accounts, pay bills, transfer funds, deposit checks and, more recently, track spending habits across multiple accounts, including those from other financial institutions. Trustmark will continue to expand product features and functionality to provide customers with the products and services they desire. The successful adoption of myTrustmark℠ not only enhances the customer experience, but also provides Trustmark with opportunities to realign resources, whether in the form of additional technology investments, branch office consolidations or branch office openings.

To that end, in the first quarter Trustmark opened one branch office in Tuscaloosa, Alabama, and closed one branch office in Meridian, Mississippi. During the second quarter of 2016, Trustmark plans to continue its measured approach to the optimization of its retail delivery channels by closing six branch offices with limited growth opportunities across Alabama, Mississippi and Florida. Overall, Trustmark is committed to developing and maintaining relationships, while supporting investments that promote 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, April 27, 2016, at 10:00 a.m. Central Time to discuss the Corporation’s financial results. Interested parties may listen to the conference call by dialing (877) 317-3051 or by clicking on the link provided under the Investor Relations section of our website at www.trustmark.com, which will also include a slide presentation Management will review during the conference call. A replay of the conference call will also be available through Wednesday, May 11, 2016, in archived format at the same web address or by calling (877) 344-7529, passcode 10083348.

Trustmark Corporation is a financial services company providing banking and financial solutions through 200 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 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 issues relating to the European financial system, 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, 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
March 31, 2016
($ in thousands)
(unaudited)
																			Linked Quarter											Year over Year
QUARTERLY AVERAGE BALANCES					3/31/2016					12/31/2015					3/31/2015				$ Change						% Change					$ Change						% Change
Securities AFS-taxable				$	2,211,479				$	2,209,801				$	2,190,344				$	1,678					0.1	%				$	21,135					1.0	%
Securities AFS-nontaxable					105,844					110,290					127,623					(4,446	)				-4.0	%					(21,779	)				-17.1	%
Securities HTM-taxable					1,142,434					1,145,397					1,119,979					(2,963	)				-0.3	%					22,455					2.0	%
Securities HTM-nontaxable					35,841					35,755					41,405					86					0.2	%					(5,564	)				-13.4	%
Total securities					3,495,598					3,501,243					3,479,351					(5,645	)				-0.2	%					16,247					0.5	%
Loans (including loans held for sale)					7,346,333					7,089,672					6,561,430					256,661					3.6	%					784,903					12.0	%
Acquired loans:
Noncovered loans					361,772					384,306					502,534					(22,534	)				-5.9	%					(140,762	)				-28.0	%
Covered loans					16,663					18,341					23,593					(1,678	)				-9.1	%					(6,930	)				-29.4	%
Fed funds sold and rev repos					382					1,384					217					(1,002	)				-72.4	%					165					76.0	%
Other earning assets					66,702					68,016					46,368					(1,314	)				-1.9	%					20,334					43.9	%
Total earning assets					11,287,450					11,062,962					10,613,493					224,488					2.0	%					673,957					6.4	%
Allowance for loan losses					(81,138	)				(78,652	)				(81,993	)				(2,486	)				3.2	%					855					-1.0	%
Cash and due from banks					281,912					272,562					290,251					9,350					3.4	%					(8,339	)				-2.9	%
Other assets					1,253,282					1,266,712					1,303,552					(13,430	)				-1.1	%					(50,270	)				-3.9	%
Total assets				$	12,741,506				$	12,523,584				$	12,125,303				$	217,922					1.7	%				$	616,203					5.1	%
Interest-bearing demand deposits				$	1,866,043				$	1,917,598				$	1,847,374				$	(51,555	)				-2.7	%				$	18,669					1.0	%
Savings deposits					3,188,916					2,963,318					3,252,586					225,598					7.6	%					(63,670	)				-2.0	%
Time deposits less than $100,000					994,406					1,033,233					1,139,912					(38,827	)				-3.8	%					(145,506	)				-12.8	%
Time deposits of $100,000 or more					683,170					687,635					785,715					(4,465	)				-0.6	%					(102,545	)				-13.1	%
Total interest-bearing deposits					6,732,535					6,601,784					7,025,587					130,751					2.0	%					(293,052	)				-4.2	%
Fed funds purchased and repos					517,180					563,424					421,206					(46,244	)				-8.2	%					95,974					22.8	%
Short-term borrowings					413,616					733,365					256,714					(319,749	)				-43.6	%					156,902					61.1	%
Long-term FHLB advances					501,144					50,078					1,243					451,066					n/m						499,901					n/m
Subordinated notes					49,972					49,964					49,939					8					0.0	%					33					0.1	%
Junior subordinated debt securities					61,856					61,856					61,856					—					0.0	%					—					0.0	%
Total interest-bearing liabilities					8,276,303					8,060,471					7,816,545					215,832					2.7	%					459,758					5.9	%
Noninterest-bearing deposits					2,836,283					2,839,894					2,741,945					(3,611	)				-0.1	%					94,338					3.4	%
Other liabilities					134,236					141,925					129,844					(7,689	)				-5.4	%					4,392					3.4	%
Total liabilities					11,246,822					11,042,290					10,688,334					204,532					1.9	%					558,488					5.2	%
Shareholders' equity					1,494,684					1,481,294					1,436,969					13,390					0.9	%					57,715					4.0	%
Total liabilities and equity				$	12,741,506				$	12,523,584				$	12,125,303				$	217,922					1.7	%				$	616,203					5.1	%
n/m - percentage changes greater than +/- 100% are considered not meaningful
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2016
($ in thousands)
(unaudited)
																					Linked Quarter											Year over Year
PERIOD END BALANCES				3/31/2016						12/31/2015						3/31/2015					$ Change						% Change					$ Change						% Change
Cash and due from banks			$	228,498					$	277,751					$	335,244					$	(49,253	)				-17.7	%				$	(106,746	)				-31.8	%
Fed funds sold and rev repos				—						250						—						(250	)				-100.0	%					—					n/m
Securities available for sale				2,368,120						2,345,422						2,381,459						22,698					1.0	%					(13,339	)				-0.6	%
Securities held to maturity				1,168,203						1,187,818						1,184,554						(19,615	)				-1.7	%					(16,351	)				-1.4	%
Loans held for sale (LHFS)				191,028						160,189						150,365						30,839					19.3	%					40,663					27.0	%
Loans held for investment (LHFI)				7,268,022						7,091,385						6,413,876						176,637					2.5	%					854,146					13.3	%
Allowance for loan losses				(69,668	)					(67,619	)					(71,321	)					(2,049	)				3.0	%					1,653					-2.3	%
Net LHFI				7,198,354						7,023,766						6,342,555						174,588					2.5	%					855,799					13.5	%
Acquired loans:
Noncovered loans				349,781						372,711						478,172						(22,930	)				-6.2	%					(128,391	)				-26.9	%
Covered loans				14,974						17,700						20,271						(2,726	)				-15.4	%					(5,297	)				-26.1	%
Allowance for loan losses, acquired loans				(13,535	)					(11,992	)					(11,837	)					(1,543	)				12.9	%					(1,698	)				14.3	%
Net acquired loans				351,220						378,419						486,606						(27,199	)				-7.2	%					(135,386	)				-27.8	%
Net LHFI and acquired loans				7,549,574						7,402,185						6,829,161						147,389					2.0	%					720,413					10.5	%
Premises and equipment, net				194,453						195,656						198,039						(1,203	)				-0.6	%					(3,586	)				-1.8	%
Mortgage servicing rights				68,208						74,007						62,903						(5,799	)				-7.8	%					5,305					8.4	%
Goodwill				366,156						366,156						365,500						—					0.0	%					656					0.2	%
Identifiable intangible assets				25,751						27,546						31,250						(1,795	)				-6.5	%					(5,499	)				-17.6	%
Other real estate, excluding covered other real estate				71,806						77,177						90,175						(5,371	)				-7.0	%					(18,369	)				-20.4	%
Covered other real estate				496						1,651						4,794						(1,155	)				-70.0	%					(4,298	)				-89.7	%
FDIC indemnification asset				506						738						4,743						(232	)				-31.4	%					(4,237	)				-89.3	%
Other assets				542,397						562,350						540,977						(19,953	)				-3.5	%					1,420					0.3	%
Total assets			$	12,775,196					$	12,678,896					$	12,179,164					$	96,300					0.8	%				$	596,032					4.9	%
Deposits:
Noninterest-bearing			$	2,874,306					$	2,998,694					$	2,936,875					$	(124,388	)				-4.1	%				$	(62,569	)				-2.1	%
Interest-bearing				6,759,337						6,589,536						6,970,115						169,801					2.6	%					(210,778	)				-3.0	%
Total deposits				9,633,643						9,588,230						9,906,990						45,413					0.5	%					(273,347	)				-2.8	%
Fed funds purchased and repos				466,436						441,042						523,187						25,394					5.8	%					(56,751	)				-10.8	%
Short-term borrowings				411,385						412,617						50,570						(1,232	)				-0.3	%					360,815					n/m
Long-term FHLB advances				501,124						501,155						1,222						(31	)				0.0	%					499,902					n/m
Subordinated notes				49,977						49,969						49,944						8					0.0	%					33					0.1	%
Junior subordinated debt securities				61,856						61,856						61,856						—					0.0	%					—					0.0	%
Other liabilities				142,519						150,970						139,311						(8,451	)				-5.6	%					3,208					2.3	%
Total liabilities				11,266,940						11,205,839						10,733,080						61,101					0.5	%					533,860					5.0	%
Common stock				14,093						14,076						14,076						17					0.1	%					17					0.1	%
Capital surplus				363,979						361,467						358,583						2,512					0.7	%					5,396					1.5	%
Retained earnings				1,151,757						1,142,908						1,103,077						8,849					0.8	%					48,680					4.4	%
Accum other comprehensive loss, net of tax				(21,573	)					(45,394	)					(29,652	)					23,821					-52.5	%					8,079					-27.2	%
Total shareholders' equity				1,508,256						1,473,057						1,446,084						35,199					2.4	%					62,172					4.3	%
Total liabilities and equity			$	12,775,196					$	12,678,896					$	12,179,164					$	96,300					0.8	%				$	596,032					4.9	%
n/m - percentage changes greater than +/- 100% are considered not meaningful
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2016
($ in thousands except per share data)
(unaudited)
				Quarter Ended																		Linked Quarter													Year over Year
INCOME STATEMENTS					3/31/2016						12/31/2015						3/31/2015					$ Change							% Change						$ Change							% Change
Interest and fees on LHFS & LHFI-FTE				$	76,235					$	74,383					$	69,658					$	1,852						2.5	%					$	6,577						9.4	%
Interest and fees on acquired loans					7,022						11,910						15,078						(4,888	)					-41.0	%						(8,056	)					-53.4	%
Interest on securities-taxable					20,086						21,149						19,586						(1,063	)					-5.0	%						500						2.6	%
Interest on securities-tax exempt-FTE					1,497						1,565						1,789						(68	)					-4.3	%						(292	)					-16.3	%
Interest on fed funds sold and rev repos					1						4						—						(3	)					-75.0	%						1						n/m
Other interest income					230						402						393						(172	)					-42.8	%						(163	)					-41.5	%
Total interest income-FTE					105,071						109,413						106,504						(4,342	)					-4.0	%						(1,433	)					-1.3	%
Interest on deposits					3,038						3,000						3,247						38						1.3	%						(209	)					-6.4	%
Interest on fed funds pch and repos					431						274						143						157						57.3	%						288						n/m
Other interest expense					2,389						1,987						1,649						402						20.2	%						740						44.9	%
Total interest expense					5,858						5,261						5,039						597						11.3	%						819						16.3	%
Net interest income-FTE					99,213						104,152						101,465						(4,939	)					-4.7	%						(2,252	)					-2.2	%
Provision for loan losses, LHFI					2,243						3,043						1,785						(800	)					-26.3	%						458						25.7	%
Provision for loan losses, acquired loans					1,309						997						347						312						31.3	%						962						n/m
Net interest income after provision-FTE					95,661						100,112						99,333						(4,451	)					-4.4	%						(3,672	)					-3.7	%
Service charges on deposit accounts					11,081						11,961						11,085						(880	)					-7.4	%						(4	)					0.0	%
Insurance commissions					8,593						8,501						8,616						92						1.1	%						(23	)					-0.3	%
Wealth management					7,407						7,831						7,990						(424	)					-5.4	%						(583	)					-7.3	%
Bank card and other fees					6,918						7,156						6,762						(238	)					-3.3	%						156						2.3	%
Mortgage banking, net					8,699						4,287						8,965						4,412						n/m							(266	)					-3.0	%
Other, net					888						(466	)					(1,055	)					1,354						n/m							1,943						n/m
Nonint inc-excl sec gains (losses), net					43,586						39,270						42,363						4,316						11.0	%						1,223						2.9	%
Security gains (losses), net					(310	)					—						—						(310	)					n/m							(310	)					n/m
Total noninterest income					43,276						39,270						42,363						4,006						10.2	%						913						2.2	%
Salaries and employee benefits					57,201						57,366						57,169						(165	)					-0.3	%						32						0.1	%
Services and fees					14,475						13,717						14,121						758						5.5	%						354						2.5	%
Net occupancy-premises					6,188						6,304						6,191						(116	)					-1.8	%						(3	)					0.0	%
Equipment expense					6,094						6,105						5,974						(11	)					-0.2	%						120						2.0	%
FDIC assessment expense					2,811						2,614						2,940						197						7.5	%						(129	)					-4.4	%
ORE/Foreclosure expense					181						(518	)					1,115						699						n/m							(934	)					-83.8	%
Other expense					11,994						13,032						11,706						(1,038	)					-8.0	%						288						2.5	%
Total noninterest expense					98,944						98,620						99,216						324						0.3	%						(272	)					-0.3	%
Income before income taxes and tax eq adj					39,993						40,762						42,480						(769	)					-1.9	%						(2,487	)					-5.9	%
Tax equivalent adjustment					4,473						4,334						4,073						139						3.2	%						400						9.8	%
Income before income taxes					35,520						36,428						38,407						(908	)					-2.5	%						(2,887	)					-7.5	%
Income taxes					8,517						8,570						9,259						(53	)					-0.6	%						(742	)					-8.0	%
Net income				$	27,003					$	27,858					$	29,148					$	(855	)					-3.1	%					$	(2,145	)					-7.4	%
Per share data
Earnings per share - basic				$	0.40					$	0.41					$	0.43					$	(0.01	)					-2.4	%					$	(0.03	)					-7.0	%
Earnings per share - diluted				$	0.40					$	0.41					$	0.43					$	(0.01	)					-2.4	%					$	(0.03	)					-7.0	%
Dividends per share				$	0.23					$	0.23					$	0.23						—						0.0	%						—						0.0	%
Weighted average shares outstanding
Basic					67,609,662						67,557,991						67,525,791
Diluted					67,746,592						67,734,109						67,639,326
Period end shares outstanding					67,639,832						67,559,128						67,556,591
n/m - percentage changes greater than +/- 100% are considered not meaningful
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2016
($ in thousands)
(unaudited)
			Quarter Ended																		Linked Quarter													Year over Year
NONPERFORMING ASSETS (1)				3/31/2016						12/31/2015						3/31/2015					$ Change							% Change						$ Change							% Change
Nonaccrual loans
Alabama			$	1,788					$	1,776					$	902					$	12						0.7	%					$	886						98.2	%
Florida				4,952						5,180						8,179						(228	)					-4.4	%						(3,227	)					-39.5	%
Mississippi (2)				56,590						40,754						52,145						15,836						38.9	%						4,445						8.5	%
Tennessee (3)				5,849						5,106						4,197						743						14.6	%						1,652						39.4	%
Texas				1,515						2,496						11,585						(981	)					-39.3	%						(10,070	)					-86.9	%
Total nonaccrual loans				70,694						55,312						77,008						15,382						27.8	%						(6,314	)					-8.2	%
Other real estate
Alabama				19,137						21,578						21,795						(2,441	)					-11.3	%						(2,658	)					-12.2	%
Florida				27,907						29,579						34,746						(1,672	)					-5.7	%						(6,839	)					-19.7	%
Mississippi (2)				14,511						14,312						15,143						199						1.4	%						(632	)					-4.2	%
Tennessee (3)				8,699						9,974						10,072						(1,275	)					-12.8	%						(1,373	)					-13.6	%
Texas				1,552						1,734						8,419						(182	)					-10.5	%						(6,867	)					-81.6	%
Total other real estate				71,806						77,177						90,175						(5,371	)					-7.0	%						(18,369	)					-20.4	%
Total nonperforming assets			$	142,500					$	132,489					$	167,183					$	10,011						7.6	%					$	(24,683	)					-14.8	%
LOANS PAST DUE OVER 90 DAYS (4)
LHFI			$	611					$	2,300					$	1,413					$	(1,689	)					-73.4	%					$	(802	)					-56.8	%
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)			$	24,110					$	21,812					$	7,584					$	2,298						10.5	%					$	16,526						n/m
			Quarter Ended																		Linked Quarter													Year over Year
ALLOWANCE FOR LOAN LOSSES (4)				3/31/2016						12/31/2015						3/31/2015					$ Change							% Change						$ Change							% Change
Beginning Balance			$	67,619					$	65,607					$	69,616					$	2,012						3.1	%					$	(1,997	)					-2.9	%
Provision for loan losses				2,243						3,043						1,785						(800	)					-26.3	%						458						25.7	%
Charge-offs				(3,363	)					(3,781	)					(3,004	)					418						-11.1	%						(359	)					12.0	%
Recoveries				3,169						2,750						2,924						419						15.2	%						245						8.4	%
Net (charge-offs) recoveries				(194	)					(1,031	)					(80	)					837						-81.2	%						(114	)					n/m
Ending Balance			$	69,668					$	67,619					$	71,321					$	2,049						3.0	%					$	(1,653	)					-2.3	%
PROVISION FOR LOAN LOSSES (4)
Alabama			$	540					$	1,453					$	761					$	(913	)					-62.8	%					$	(221	)					-29.0	%
Florida				(818	)					(1,357	)					1,833						539						-39.7	%						(2,651	)					n/m
Mississippi (2)				1,848						1,842						(2,729	)					6						0.3	%						4,577						n/m
Tennessee (3)				138						182						1,432						(44	)					-24.2	%						(1,294	)					-90.4	%
Texas				535						923						488						(388	)					-42.0	%						47						9.6	%
Total provision for loan losses			$	2,243					$	3,043					$	1,785					$	(800	)					-26.3	%					$	458						25.7	%
NET CHARGE-OFFS (4)
Alabama			$	63					$	422					$	144					$	(359	)					-85.1	%					$	(81	)					-56.3	%
Florida				(674	)					(389	)					(28	)					(285	)					73.3	%						(646	)					n/m
Mississippi (2)				(74	)					925						143						(999	)					n/m							(217	)					n/m
Tennessee (3)				8						188						(216	)					(180	)					-95.7	%						224						n/m
Texas				871						(115	)					37						986						n/m							834						n/m
Total net charge-offs (recoveries)			$	194					$	1,031					$	80					$	(837	)					-81.2	%					$	114						n/m
(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
March 31, 2016
($ in thousands)
(unaudited)
				Quarter Ended
AVERAGE BALANCES					3/31/2016						12/31/2015						9/30/2015						6/30/2015						3/31/2015
Securities AFS-taxable				$	2,211,479					$	2,209,801					$	2,269,763					$	2,255,485					$	2,190,344
Securities AFS-nontaxable					105,844						110,290						116,290						120,330						127,623
Securities HTM-taxable					1,142,434						1,145,397						1,151,673						1,143,273						1,119,979
Securities HTM-nontaxable					35,841						35,755						36,278						38,173						41,405
Total securities					3,495,598						3,501,243						3,574,004						3,557,261						3,479,351
Loans (including loans held for sale)					7,346,333						7,089,672						6,771,947						6,554,739						6,561,430
Acquired loans:
Noncovered loans					361,772						384,306						421,262						462,418						502,534
Covered loans					16,663						18,341						18,982						20,574						23,593
Fed funds sold and rev repos					382						1,384						1,167						557						217
Other earning assets					66,702						68,016						58,534						41,242						46,368
Total earning assets					11,287,450						11,062,962						10,845,896						10,636,791						10,613,493
Allowance for loan losses					(81,138	)					(78,652	)					(84,482	)					(84,331	)					(81,993	)
Cash and due from banks					281,912						272,562						266,174						272,292						290,251
Other assets					1,253,282						1,266,712						1,286,189						1,288,507						1,303,552
Total assets				$	12,741,506					$	12,523,584					$	12,313,777					$	12,113,259					$	12,125,303
Interest-bearing demand deposits				$	1,866,043					$	1,917,598					$	1,915,567					$	1,924,447					$	1,847,374
Savings deposits					3,188,916						2,963,318						3,059,183						3,226,380						3,252,586
Time deposits less than $100,000					994,406						1,033,233						1,072,373						1,101,477						1,139,912
Time deposits of $100,000 or more					683,170						687,635						712,910						751,129						785,715
Total interest-bearing deposits					6,732,535						6,601,784						6,760,033						7,003,433						7,025,587
Fed funds purchased and repos					517,180						563,424						528,232						497,606						421,206
Short-term borrowings					413,616						733,365						534,931						128,761						256,714
Long-term FHLB advances					501,144						50,078						1,195						1,213						1,243
Subordinated notes					49,972						49,964						49,955						49,947						49,939
Junior subordinated debt securities					61,856						61,856						61,856						61,856						61,856
Total interest-bearing liabilities					8,276,303						8,060,471						7,936,202						7,742,816						7,816,545
Noninterest-bearing deposits					2,836,283						2,839,894						2,771,186						2,772,741						2,741,945
Other liabilities					134,236						141,925						137,134						143,201						129,844
Total liabilities					11,246,822						11,042,290						10,844,522						10,658,758						10,688,334
Shareholders' equity					1,494,684						1,481,294						1,469,255						1,454,501						1,436,969
Total liabilities and equity				$	12,741,506					$	12,523,584					$	12,313,777					$	12,113,259					$	12,125,303
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2016
($ in thousands)
(unaudited)
PERIOD END BALANCES					3/31/2016						12/31/2015						9/30/2015						6/30/2015						3/31/2015
Cash and due from banks				$	228,498					$	277,751					$	220,052					$	255,050					$	335,244
Fed funds sold and rev repos					—						250						—						—						—
Securities available for sale					2,368,120						2,345,422						2,382,822						2,446,383						2,381,459
Securities held to maturity					1,168,203						1,187,818						1,178,440						1,190,161						1,184,554
Loans held for sale (LHFS)					191,028						160,189						173,679						147,539						150,365
Loans held for investment (LHFI)					7,268,022						7,091,385						6,791,643						6,447,073						6,413,876
Allowance for loan losses					(69,668	)					(67,619	)					(65,607	)					(71,166	)					(71,321	)
Net LHFI					7,198,354						7,023,766						6,726,036						6,375,907						6,342,555
Acquired loans:
Noncovered loans					349,781						372,711						400,528						447,160						478,172
Covered loans					14,974						17,700						18,645						19,239						20,271
Allowance for loan losses, acquired loans					(13,535	)					(11,992	)					(12,185	)					(12,629	)					(11,837	)
Net acquired loans					351,220						378,419						406,988						453,770						486,606
Net LHFI and acquired loans					7,549,574						7,402,185						7,133,024						6,829,677						6,829,161
Premises and equipment, net					194,453						195,656						196,558						196,220						198,039
Mortgage servicing rights					68,208						74,007						69,809						71,422						62,903
Goodwill					366,156						366,156						365,500						365,500						365,500
Identifiable intangible assets					25,751						27,546						30,129						32,042						31,250
Other real estate, excluding covered other real estate					71,806						77,177						83,955						90,748						90,175
Covered other real estate					496						1,651						2,865						3,755						4,794
FDIC indemnification asset					506						738						1,749						2,632						4,743
Other assets					542,397						562,350						551,694						551,319						540,977
Total assets				$	12,775,196					$	12,678,896					$	12,390,276					$	12,182,448					$	12,179,164
Deposits:
Noninterest-bearing				$	2,874,306					$	2,998,694					$	2,787,454					$	2,819,171					$	2,936,875
Interest-bearing					6,759,337						6,589,536						6,624,950						6,973,003						6,970,115
Total deposits					9,633,643						9,588,230						9,412,404						9,792,174						9,906,990
Fed funds purchased and repos					466,436						441,042						534,204						477,462						523,187
Short-term borrowings					411,385						412,617						709,845						201,744						50,570
Long-term FHLB advances					501,124						501,155						1,173						1,204						1,222
Subordinated notes					49,977						49,969						49,961						49,953						49,944
Junior subordinated debt securities					61,856						61,856						61,856						61,856						61,856
Other liabilities					142,519						150,970						144,077						147,646						139,311
Total liabilities					11,266,940						11,205,839						10,913,520						10,732,039						10,733,080
Common stock					14,093						14,076						14,076						14,076						14,076
Capital surplus					363,979						361,467						360,494						359,533						358,583
Retained earnings					1,151,757						1,142,908						1,130,766						1,117,993						1,103,077
Accum other comprehensive loss, net of tax					(21,573	)					(45,394	)					(28,580	)					(41,193	)					(29,652	)
Total shareholders' equity					1,508,256						1,473,057						1,476,756						1,450,409						1,446,084
Total liabilities and equity				$	12,775,196					$	12,678,896					$	12,390,276					$	12,182,448					$	12,179,164
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2016
($ in thousands except per share data)
(unaudited)
				Quarter Ended
INCOME STATEMENTS					3/31/2016						12/31/2015						9/30/2015					6/30/2015						3/31/2015
Interest and fees on LHFS & LHFI-FTE				$	76,235					$	74,383					$	72,951				$	71,546					$	69,658
Interest and fees on acquired loans					7,022						11,910						11,607					12,557						15,078
Interest on securities-taxable					20,086						21,149						20,264					19,731						19,586
Interest on securities-tax exempt-FTE					1,497						1,565						1,609					1,688						1,789
Interest on fed funds sold and rev repos					1						4						2					2						—
Other interest income					230						402						392					392						393
Total interest income-FTE					105,071						109,413						106,825					105,916						106,504
Interest on deposits					3,038						3,000						3,147					3,204						3,247
Interest on fed funds pch and repos					431						274						205					179						143
Other interest expense					2,389						1,987						1,811					1,614						1,649
Total interest expense					5,858						5,261						5,163					4,997						5,039
Net interest income-FTE					99,213						104,152						101,662					100,919						101,465
Provision for loan losses, LHFI					2,243						3,043						2,514					1,033						1,785
Provision for loan losses, acquired loans					1,309						997						1,256					825						347
Net interest income after provision-FTE					95,661						100,112						97,892					99,061						99,333
Service charges on deposit accounts					11,081						11,961						12,400					11,920						11,085
Insurance commissions					8,593						8,501						9,906					9,401						8,616
Wealth management					7,407						7,831						7,790					7,758						7,990
Bank card and other fees					6,918						7,156						6,964					7,416						6,762
Mortgage banking, net					8,699						4,287						7,443					9,481						8,965
Other, net					888						(466	)					1,470					(433	)					(1,055	)
Nonint inc-excl sec gains (losses), net					43,586						39,270						45,973					45,543						42,363
Security gains (losses), net					(310	)					—						—					—						—
Total noninterest income					43,276						39,270						45,973					45,543						42,363
Salaries and employee benefits					57,201						57,366						58,270					57,393						57,169
Services and fees					14,475						13,717						14,691					15,005						14,121
Net occupancy-premises					6,188						6,304						6,580					6,243						6,191
Equipment expense					6,094						6,105						5,877					5,903						5,974
FDIC assessment expense					2,811						2,614						2,559					2,615						2,940
ORE/Foreclosure expense					181						(518	)					3,385					921						1,115
Other expense					11,994						13,032						12,198					12,186						11,706
Total noninterest expense					98,944						98,620						103,560					100,266						99,216
Income before income taxes and tax eq adj					39,993						40,762						40,305					44,338						42,480
Tax equivalent adjustment					4,473						4,334						4,056					3,970						4,073
Income before income taxes					35,520						36,428						36,249					40,368						38,407
Income taxes					8,517						8,570						7,819					9,766						9,259
Net income				$	27,003					$	27,858					$	28,430				$	30,602					$	29,148
Per share data
Earnings per share - basic				$	0.40					$	0.41					$	0.42				$	0.45					$	0.43
Earnings per share - diluted				$	0.40					$	0.41					$	0.42				$	0.45					$	0.43
Dividends per share				$	0.23					$	0.23					$	0.23				$	0.23					$	0.23
Weighted average shares outstanding
Basic					67,609,662						67,557,991						67,557,395					67,556,825						67,525,791
Diluted					67,746,592						67,734,109						67,707,456					67,685,449						67,639,326
Period end shares outstanding					67,639,832						67,559,128						67,557,395					67,557,395						67,556,591
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2016
($ in thousands)
(unaudited)
				Quarter Ended
NONPERFORMING ASSETS (1)					3/31/2016						12/31/2015						9/30/2015						6/30/2015						3/31/2015
Nonaccrual loans
Alabama				$	1,788					$	1,776					$	1,306					$	713					$	902
Florida					4,952						5,180						7,444						7,892						8,179
Mississippi (2)					56,590						40,754						44,955						52,051						52,145
Tennessee (3)					5,849						5,106						4,911						5,468						4,197
Texas					1,515						2,496						2,515						2,314						11,585
Total nonaccrual loans					70,694						55,312						61,131						68,438						77,008
Other real estate
Alabama					19,137						21,578						23,822						21,849						21,795
Florida					27,907						29,579						30,374						31,059						34,746
Mississippi (2)					14,511						14,312						13,180						14,094						15,143
Tennessee (3)					8,699						9,974						9,840						9,707						10,072
Texas					1,552						1,734						6,739						14,039						8,419
Total other real estate					71,806						77,177						83,955						90,748						90,175
Total nonperforming assets				$	142,500					$	132,489					$	145,086					$	159,186					$	167,183
LOANS PAST DUE OVER 90 DAYS (4)
LHFI				$	611					$	2,300					$	9,224					$	1,771					$	1,413
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)				$	24,110					$	21,812					$	15,165					$	11,987					$	7,584
				Quarter Ended
ALLOWANCE FOR LOAN LOSSES (4)					3/31/2016						12/31/2015						9/30/2015						6/30/2015						3/31/2015
Beginning Balance				$	67,619					$	65,607					$	71,166					$	71,321					$	69,616
Provision for loan losses					2,243						3,043						2,514						1,033						1,785
Charge-offs					(3,363	)					(3,781	)					(11,406	)					(4,278	)					(3,004	)
Recoveries					3,169						2,750						3,333						3,090						2,924
Net (charge-offs) recoveries					(194	)					(1,031	)					(8,073	)					(1,188	)					(80	)
Ending Balance				$	69,668					$	67,619					$	65,607					$	71,166					$	71,321
PROVISION FOR LOAN LOSSES (4)
Alabama				$	540					$	1,453					$	(70	)				$	623					$	761
Florida					(818	)					(1,357	)					(1,430	)					(1,168	)					1,833
Mississippi (2)					1,848						1,842						4,221						2,046						(2,729	)
Tennessee (3)					138						182						(1,050	)					(483	)					1,432
Texas					535						923						843						15						488
Total provision for loan losses				$	2,243					$	3,043					$	2,514					$	1,033					$	1,785
NET CHARGE-OFFS (4)
Alabama				$	63					$	422					$	163					$	216					$	144
Florida					(674	)					(389	)					(1,090	)					539						(28	)
Mississippi (2)					(74	)					925						7,391						1,028						143
Tennessee (3)					8						188						448						105						(216	)
Texas					871						(115	)					1,161						(700	)					37
Total net charge-offs (recoveries)				$	194					$	1,031					$	8,073					$	1,188					$	80
(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
		CONSOLIDATED FINANCIAL INFORMATION
		March 31, 2016
		(unaudited)
						Quarter Ended
		FINANCIAL RATIOS AND OTHER DATA				3/31/2016				12/31/2015				9/30/2015				6/30/2015				3/31/2015
		Return on equity				7.27%				7.46%				7.68%				8.44%				8.23%
		Return on average tangible equity				10.26%				10.61%				10.96%				12.05%				11.86%
		Return on assets				0.85%				0.88%				0.92%				1.01%				0.97%
		Interest margin - Yield - FTE				3.74%				3.92%				3.91%				3.99%				4.07%
		Interest margin - Cost				0.21%				0.19%				0.19%				0.19%				0.19%
		Net interest margin - FTE				3.54%				3.74%				3.72%				3.81%				3.88%
		Efficiency ratio (1)				66.87%				66.03%				67.87%				66.00%				66.46%
		Full-time equivalent employees				2,946				2,941				2,963				2,989				3,038
		CREDIT QUALITY RATIOS (2)
		Net charge-offs/average loans				0.01%				0.06%				0.47%				0.07%				0.00%
		Provision for loan losses/average loans				0.12%				0.17%				0.15%				0.06%				0.11%
		Nonperforming loans/total loans (incl LHFS)				0.95%				0.76%				0.88%				1.04%				1.17%
		Nonperforming assets/total loans (incl LHFS)				1.91%				1.83%				2.08%				2.41%				2.55%
		Nonperforming assets/total loans (incl LHFS) +ORE				1.89%				1.81%				2.06%				2.38%				2.51%
		ALL/total loans (excl LHFS)				0.96%				0.95%				0.97%				1.10%				1.11%
		ALL-commercial/total commercial loans				1.06%				1.05%				1.07%				1.30%				1.30%
		ALL-consumer/total consumer and home mortgage loans				0.65%				0.66%				0.67%				0.59%				0.61%
		ALL/nonperforming loans				98.55%				122.25%				107.32%				103.99%				92.62%
		ALL/nonperforming loans (excl specifically reviewed impaired loans)				203.24%				210.32%				206.72%				192.60%				205.52%
		CAPITAL RATIOS
		Total equity/total assets				11.81%				11.62%				11.92%				11.91%				11.87%
		Tangible equity/tangible assets				9.01%				8.79%				9.01%				8.93%				8.91%
		Tangible equity/risk-weighted assets				11.84%				11.68%				12.24%				12.34%				12.34%
		Tier 1 leverage ratio				9.93%				10.03%				10.09%				10.14%				9.99%
		Common equity tier 1 capital ratio				12.41%				12.57%				13.00%				13.28%				13.14%
		Tier 1 risk-based capital ratio				13.04%				13.21%				13.66%				13.97%				13.83%
		Total risk-based capital ratio				13.92%				14.07%				14.66%				15.07%				14.92%
		STOCK PERFORMANCE
		Market value-Close				$ 23.03				$ 23.04				$ 23.17				$ 24.98				$ 24.28
		Book value				$ 22.30				$ 21.80				$ 21.86				$ 21.47				$ 21.41
		Tangible book value				$ 16.50				$ 15.98				$ 16.00				$ 15.58				$ 15.53
		(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 nonroutine income and expense items.
		(2) - Excludes acquired loans and covered other real estate
		See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIALSMarch 31, 2016($ in thousands)(unaudited)
Note 1 - Securities Available for Sale and Held to Maturity
The following table is a summary of the estimated fair value of securities available for sale and the amortized cost of securities held to maturity ($ in thousands):
					3/31/2016					12/31/2015					9/30/2015					6/30/2015					3/31/2015
SECURITIES AVAILABLE FOR SALE
U.S. Government agency obligations
Issued by U.S. Government agencies				$	63,814				$	68,135				$	71,282				$	74,409				$	78,115
Issued by U.S. Government sponsored agencies					286					281					23,016					33,009					33,076
Obligations of states and political subdivisions					135,655					138,609					147,794					151,322					160,154
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA					25,081					25,812					26,651					20,651					12,010
Issued by FNMA and FHLMC					330,558					225,542					177,411					185,651					195,470
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA					1,540,541					1,582,860					1,630,402					1,662,476					1,646,710
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA					272,185					279,226					279,609					290,398					225,826
Asset-backed securities and structured financial products					—					24,957					26,657					28,467					30,098
Total securities available for sale				$	2,368,120				$	2,345,422				$	2,382,822				$	2,446,383				$	2,381,459
SECURITIES HELD TO MATURITY
U.S. Government agency obligations
Issued by U.S. Government sponsored agencies				$	63,085				$	101,782				$	101,578				$	101,374				$	101,171
Obligations of states and political subdivisions					54,278					55,892					56,661					56,978					62,928
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA					16,590					17,363					17,783					18,265					18,861
Issued by FNMA and FHLMC					9,871					10,368					10,669					10,965					11,341
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA					818,201					820,012					808,763					838,989					842,827
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA					206,178					182,401					182,986					163,590					147,426
Total securities held to maturity				$	1,168,203				$	1,187,818				$	1,178,440				$	1,190,161				$	1,184,554
During 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). The net unrealized holding loss is amortized over the remaining life of the securities 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 March 31, 2016, the net unamortized, unrealized loss on the transferred securities included in accumulated other comprehensive (loss) income in the accompanying balance sheet totaled approximately $31.3 million ($19.3 million, net of tax).
Management continues to focus on asset quality as one of the strategic goals of the securities portfolio, which is evidenced by the investment of approximately 95% of the portfolio in GSE-backed obligations and other Aaa rated securities as determined by Moody’s. None of the securities owned by Trustmark are collateralized by assets which are considered sub-prime. Furthermore, outside of stock ownership in the Federal Home Loan Bank of Dallas, Federal Home Loan Bank of Atlanta and Federal Reserve Bank, Trustmark does not hold any other equity investment in a GSE.

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
March 31, 2016
($ in thousands)
(unaudited)
Note 2 – Loan Composition
LHFI BY TYPE (excluding acquired loans)				3/31/2016					12/31/2015					9/30/2015					6/30/2015					3/31/2015
Loans secured by real estate:
Construction, land development and other land loans			$	697,500				$	824,723				$	785,472				$	682,444				$	691,657
Secured by 1-4 family residential properties				1,640,015					1,649,501					1,638,639					1,637,933					1,613,993
Secured by nonfarm, nonresidential properties				1,893,240					1,736,476					1,604,453					1,567,035					1,516,895
Other real estate secured				273,752					211,228					225,523					240,056					233,322
Commercial and industrial loans				1,368,464					1,343,211					1,270,277					1,219,684					1,228,788
Consumer loans				164,544					169,135					169,509					165,215					161,535
State and other political subdivision loans				787,049					734,615					677,539					574,265					614,330
Other loans				443,458					422,496					420,231					360,441					353,356
LHFI				7,268,022					7,091,385					6,791,643					6,447,073					6,413,876
Allowance for loan losses				(69,668	)				(67,619	)				(65,607	)				(71,166	)				(71,321	)
Net LHFI			$	7,198,354				$	7,023,766				$	6,726,036				$	6,375,907				$	6,342,555

ACQUIRED NONCOVERED LOANS BY TYPE				3/31/2016					12/31/2015					9/30/2015					6/30/2015					3/31/2015
Loans secured by real estate:
Construction, land development and other land loans			$	41,097				$	41,623				$	45,299				$	50,867				$	51,363
Secured by 1-4 family residential properties				81,314					86,950					96,870					101,027					111,830
Secured by nonfarm, nonresidential properties				126,177					135,626					146,614					168,698					177,210
Other real estate secured				24,374					23,860					23,816					25,666					26,819
Commercial and industrial loans				51,663					55,075					57,748					73,732					81,261
Consumer loans				5,027					5,641					6,295					7,273					8,494
Other loans				20,129					23,936					23,886					19,897					21,195
Noncovered loans				349,781					372,711					400,528					447,160					478,172
Allowance for loan losses				(13,212	)				(11,259	)				(11,417	)				(11,927	)				(11,106	)
Net noncovered loans			$	336,569				$	361,452				$	389,111				$	435,233				$	467,066

ACQUIRED COVERED LOANS BY TYPE					3/31/2016					12/31/2015					9/30/2015					6/30/2015					3/31/2015
Loans secured by real estate:
Construction, land development and other land loans				$	387				$	1,021				$	966				$	904				$	1,447
Secured by 1-4 family residential properties					8,564					10,058					10,546					11,080					11,200
Secured by nonfarm, nonresidential properties					3,679					4,638					5,363					5,206					5,844
Other real estate secured					1,132					1,286					1,511					1,622					1,469
Commercial and industrial loans					1,143					624					205					371					255
Consumer loans					—					—					—					—					—
Other loans					69					73					54					56					56
Covered loans					14,974					17,700					18,645					19,239					20,271
Allowance for loan losses					(323	)				(733	)				(768	)				(702	)				(731	)
Net covered loans				$	14,651				$	16,967				$	17,877				$	18,537				$	19,540

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
March 31, 2016
($ in thousands)
(unaudited)
Note 2 – Loan Composition (continued)
			March 31, 2016
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			$	697,500			$	129,438			$	54,964			$	261,624				$	46,911				$	204,563
Secured by 1-4 family residential properties				1,640,015				63,369				47,203				1,402,893					107,172					19,378
Secured by nonfarm, nonresidential properties				1,893,240				244,495				165,995				894,692					140,428					447,630
Other real estate secured				273,752				18,950				4,747				118,279					18,020					113,756
Commercial and industrial loans				1,368,464				105,124				15,728				711,295					234,252					302,065
Consumer loans				164,544				18,091				3,022				122,986					18,037					2,408
State and other political subdivision loans				787,049				63,359				30,536				514,537					31,518					147,099
Other loans				443,458				41,199				19,472				289,902					50,854					42,031
Loans			$	7,268,022			$	684,025			$	341,667			$	4,316,208				$	647,192				$	1,278,930
CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION (1)
Lots			$	50,492			$	7,175			$	19,716			$	16,846				$	3,560				$	3,195
Development				57,654				7,426				4,219				27,354					710					17,945
Unimproved land				113,169				13,992				17,981				43,638					18,168					19,390
1-4 family construction				165,572				35,012				10,110				76,428					1,675					42,347
Other construction				310,613				65,833				2,938				97,358					22,798					121,686
Construction, land development and other land loans			$	697,500			$	129,438			$	54,964			$	261,624				$	46,911				$	204,563
LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION (1)
Income producing:
Retail			$	257,281			$	62,525			$	37,083			$	92,383				$	20,393				$	44,897
Office				221,311				31,304				31,521				80,383					5,731					72,372
Nursing homes/assisted living				118,023				—				—				112,650					5,373					—
Hotel/motel				184,898				38,031				21,924				45,023					32,265					47,655
Industrial				85,605				17,467				9,487				16,493					1,455					40,703
Health care				26,830				2,241				862				23,727					—					—
Convenience stores				16,585				230				—				10,268					1,091					4,996
Other				199,259				12,030				16,920				89,495					3,737					77,077
Total income producing loans				1,109,792				163,828				117,797				470,422					70,045					287,700
Owner-occupied:
Office				123,870				9,295				20,577				64,859					8,631					20,508
Churches				90,616				9,043				2,194				45,480					25,045					8,854
Industrial warehouses				135,811				5,723				4,050				67,766					10,756					47,516
Health care				121,515				19,478				8,602				61,609					11,693					20,133
Convenience stores				81,707				7,778				1,752				46,559					2,647					22,971
Retail				42,068				8,415				5,698				20,071					2,098					5,786
Restaurants				32,753				2,645				1,722				22,542					3,636					2,208
Auto dealerships				14,042				8,068				93				4,682					1,199					—
Other				141,066				10,222				3,510				90,702					4,678					31,954
Total owner-occupied loans				783,448				80,667				48,198				424,270					70,383					159,930
Loans secured by nonfarm, nonresidential properties			$	1,893,240			$	244,495			$	165,995			$	894,692				$	140,428				$	447,630
(1) Excludes acquired loans.

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
March 31, 2016
($ in thousands)
(unaudited)
Note 3 – Yields on Earning Assets and Interest-Bearing Liabilities
The following table illustrates the yields on earning assets by category as well as the rates paid on interest-bearing liabilities on a tax equivalent basis:
			Quarter Ended
			3/31/2016			12/31/2015			9/30/2015			6/30/2015			3/31/2015
Securities – taxable			2.41%			2.50%			2.35%			2.33%			2.40%
Securities – nontaxable			4.25%			4.25%			4.18%			4.27%			4.29%
Securities – total			2.48%			2.57%			2.43%			2.42%			2.49%
Loans - LHFI & LHFS			4.17%			4.16%			4.27%			4.38%			4.31%
Acquired loans			7.46%			11.74%			10.46%			10.43%			11.62%
Loans - total			4.33%			4.57%			4.65%			4.79%			4.85%
FF sold & rev repo			1.05%			1.15%			0.68%			1.44%			0.00%
Other earning assets			1.39%			2.34%			2.66%			3.81%			3.44%
Total earning assets			3.74%			3.92%			3.91%			3.99%			4.07%
Interest-bearing deposits			0.18%			0.18%			0.18%			0.18%			0.19%
FF pch & repo			0.34%			0.19%			0.15%			0.14%			0.14%
Other borrowings			0.94%			0.88%			1.11%			2.68%			1.81%
Total interest-bearing liabilities			0.28%			0.26%			0.26%			0.26%			0.26%
Net interest margin			3.54%			3.74%			3.72%			3.81%			3.88%
Net interest margin excluding acquired loans			3.40%			3.43%			3.43%			3.49%			3.47%

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 decreased 20 basis points during the first quarter of 2016. This decrease was primarily due to a decline in recoveries on acquired loans from $5.4 million during the fourth quarter of 2015 to $1.2 million during the first quarter of 2016.

The net interest margin included $389 thousand of yield maintenance payments on prepaid securities during the first quarter of 2016 compared to $902 thousand during the fourth quarter of 2015. Excluding these yield maintenance payments on prepaid securities and acquired loans, the net interest margin totaled 3.38% during the first quarter of 2016 compared to 3.40% during the fourth quarter of 2015.

Note 4 – 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 $413 thousand and $1.3 million for the quarters ended March 31, 2016 and 2015, respectively.

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

			Quarter Ended
				3/31/2016					12/31/2015					9/30/2015					6/30/2015					3/31/2015
Mortgage servicing income, net			$	5,058				$	5,126				$	4,906				$	4,696				$	4,897
Change in fair value-MSR from runoff				(2,005	)				(2,091	)				(2,636	)				(2,587	)				(2,213	)
Gain on sales of loans, net				2,591					4,656					4,479					5,114					3,716
Other, net				2,642					(1,433	)				215					206					1,245
Mortgage banking income before hedge ineffectiveness				8,286					6,258					6,964					7,429					7,645
Change in fair value-MSR from market changes				(6,866	)				2,010					(4,141	)				6,076					(2,368	)
Change in fair value of derivatives				7,279					(3,981	)				4,620					(4,024	)				3,688
Net positive (negative) hedge ineffectiveness				413					(1,971	)				479					2,052					1,320
Mortgage banking, net			$	8,699				$	4,287				$	7,443				$	9,481				$	8,965

During the first quarter of 2015, Trustmark exercised its option to repurchase approximately $28.5 million of 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 subject to guarantees by FHA/VA. As a result of this repurchase and sale, the loans are no longer carried as LHFS. The transaction resulted in a gain of $304 thousand, which was recorded during the first quarter of 2015 and is included in the table above as "Gain on sales of loans, net.”

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
March 31, 2016
($ in thousands)
(unaudited)
Note 5 – Other Noninterest Income and Expense
Other noninterest income consisted of the following for the periods presented ($ in thousands):
			Quarter Ended
				3/31/2016					12/31/2015					9/30/2015					6/30/2015					3/31/2015
Partnership amortization for tax credit purposes			$	(2,479	)			$	(3,015	)			$	(2,083	)			$	(2,480	)			$	(2,472	)
(Decrease) increase in FDIC indemnification asset				(99	)				(827	)				82					(1,798	)				(970	)
Increase in life insurance cash surrender value				1,692					1,667					1,687					1,673					1,675
Other miscellaneous income				1,774					1,709					1,784					2,172					712
Total other, net			$	888				$	(466	)			$	1,470				$	(433	)			$	(1,055	)

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

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

				Quarter Ended
					3/31/2016					12/31/2015					9/30/2015					6/30/2015					3/31/2015
Loan expense				$	3,043				$	3,356				$	3,416				$	3,342				$	2,721
Amortization of intangibles					1,796					1,927					1,942					1,959					1,991
Other miscellaneous expense					7,155					7,749					6,840					6,885					6,994
Total other expense				$	11,994				$	13,032				$	12,198				$	12,186				$	11,706

Note 6 – 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
March 31, 2016
($ in thousands)
(unaudited)
Note 6 – Non-GAAP Financial Measures (continued)
					Quarter Ended
						3/31/2016						12/31/2015						9/30/2015						6/30/2015						3/31/2015
TANGIBLE EQUITY
AVERAGE BALANCES
Total shareholders' equity					$	1,494,684					$	1,481,294					$	1,469,255					$	1,454,501					$	1,436,969
Less: Goodwill						(366,156	)					(365,945	)					(365,500	)					(365,500	)					(365,500	)
Identifiable intangible assets						(26,709	)					(28,851	)					(31,144	)					(30,385	)					(32,398	)
Total average tangible equity					$	1,101,819					$	1,086,498					$	1,072,611					$	1,058,616					$	1,039,071
PERIOD END BALANCES
Total shareholders' equity					$	1,508,256					$	1,473,057					$	1,476,756					$	1,450,409					$	1,446,084
Less: Goodwill						(366,156	)					(366,156	)					(365,500	)					(365,500	)					(365,500	)
Identifiable intangible assets						(25,751	)					(27,546	)					(30,129	)					(32,042	)					(31,250	)
Total tangible equity		(a)			$	1,116,349					$	1,079,355					$	1,081,127					$	1,052,867					$	1,049,334
TANGIBLE ASSETS
Total assets					$	12,775,196					$	12,678,896					$	12,390,276					$	12,182,448					$	12,179,164
Less: Goodwill						(366,156	)					(366,156	)					(365,500	)					(365,500	)					(365,500	)
Identifiable intangible assets						(25,751	)					(27,546	)					(30,129	)					(32,042	)					(31,250	)
Total tangible assets		(b)			$	12,383,289					$	12,285,194					$	11,994,647					$	11,784,906					$	11,782,414
Risk-weighted assets		(c)			$	9,431,021					$	9,242,902					$	8,831,355					$	8,530,144					$	8,503,102
NET INCOME ADJUSTED FOR INTANGIBLE AMORTIZATION
Net income					$	27,003					$	27,858					$	28,430					$	30,602					$	29,148
Plus: Intangible amortization net of tax						1,109						1,191						1,199						1,210						1,229
Net income adjusted for intangible amortization					$	28,112					$	29,049					$	29,629					$	31,812					$	30,377
Period end common shares outstanding		(d)				67,639,832						67,559,128						67,557,395						67,557,395						67,556,591
TANGIBLE COMMON EQUITY MEASUREMENTS
Return on average tangible equity (1)						10.26	%					10.61	%					10.96	%					12.05	%					11.86	%
Tangible equity/tangible assets		(a)/(b)				9.01	%					8.79	%					9.01	%					8.93	%					8.91	%
Tangible equity/risk-weighted assets		(a)/(c)				11.84	%					11.68	%					12.24	%					12.34	%					12.34	%
Tangible book value		(a)/(d)*1,000			$	16.50					$	15.98					$	16.00					$	15.58					$	15.53
COMMON EQUITY TIER 1 CAPITAL (CET1)
Total shareholders' equity					$	1,508,256					$	1,473,057					$	1,476,756					$	1,450,409					$	1,446,084
AOCI-related adjustments						21,573						45,394						28,580						41,193						29,652
CET1 adjustments and deductions:
Goodwill net of associated deferred tax liabilities (DTLs)						(348,515	)					(348,873	)					(348,587	)					(348,940	)					(349,292	)
Other adjustments and deductions for CET1 (2)						(10,861	)					(7,980	)					(8,888	)					(9,568	)					(9,104	)
CET1 capital		(e)				1,170,453						1,161,598						1,147,861						1,133,094						1,117,340
Additional tier 1 capital instruments plus related surplus						60,000						60,000						60,000						60,000						60,000
Less: additional tier 1 capital deductions						(434	)					(1,063	)					(1,287	)					(1,571	)					(1,762	)
Additional tier 1 capital						59,566						58,937						58,713						58,429						58,238
Tier 1 capital					$	1,230,019					$	1,220,535					$	1,206,574					$	1,191,523					$	1,175,578
Common equity tier 1 capital ratio		(e)/(c)				12.41	%					12.57	%					13.00	%					13.28	%					13.14	%
(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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160426006631/en/

Trustmark Corporation

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

Media Contact:

Melanie A. Morgan, 601-208-2979

Senior Vice President

Source: Trustmark Corporation