Trustmark Corporation Announces First Quarter 2018 Financial Results

JACKSON, Miss.–(BUSINESS WIRE)–Trustmark Corporation (NASDAQ:TRMK) reported net income of $36.8 million in the first quarter of 2018, representing diluted earnings per share of $0.54. Diluted earnings per share in the first quarter of 2018 increased 12.5% when compared to core earnings in the previous quarter and 17.4% when compared to the same period in the prior year. This level of earnings resulted in a return on average tangible equity of 13.05% and a return on average assets of 1.10%. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable June 15, 2018, to shareholders of record on June 1, 2018.

Printer friendly version of earnings release with consolidated financial statements and notes: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=51793894&lang=en

First Quarter Highlights

Revenue, excluding interest and fees on acquired loans, increased 1.7% linked quarter and 4.0% year-over-year to total $144.0 million The net interest margin (FTE), excluding acquired loans, was 3.37% in the first quarter, up 2 basis points from the prior quarter and down 1 basis point year-over-year Core noninterest expense, which excludes other real estate and intangible amortization, totaled $100.2 million in the first quarter, down 0.6% from the prior quarter and up 1.5% year-over-year Sustained strong credit performance reflected in reduced nonperforming assets and net recoveries

Gerard R. Host, President and CEO, stated, “The first quarter marked a positive start to 2018, as we placed continued emphasis on balance sheet optimization, capital deployment and disciplined expense management. The strong performance of our mortgage and insurance businesses shows the value of our diverse business model. Thanks to our talented 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

Continued balance sheet optimization through maturing investment securities run-off and opportunistic share repurchases Capital base continues to provide flexibility in pursuing growth opportunities Noninterest-bearing deposits represent 27.4% of total deposits

Loans held for investment totaled $8.5 billion at March 31, 2018, a decrease of 0.7% from the prior quarter and an increase of 6.4% from the comparable period one year earlier. Acquired loans totaled $215.5 million at March 31, 2018, down $46.0 million from the prior quarter. Collectively, loans held for investment and acquired loans totaled $8.7 billion at March 31, 2018, down $102.0 million, or 1.2%, from the prior quarter.

Deposits totaled $11.0 billion at March 31, 2018, up $398.3 million, or 3.8%, from the prior quarter. Trustmark continues to maintain an attractive, low-cost deposit base with approximately 60% of deposit balances in checking accounts. Deposit costs remain well controlled with the 9 basis point linked-quarter increase in interest bearing deposit cost driven in part by public fund deposits.

Trustmark’s capital position remained solid, reflecting the consistent profitability of its diversified financial services businesses. During the first quarter, Trustmark repurchased $2.5 million of its common shares in open market transactions and has $96.7 million in remaining authority under its existing stock repurchase program, which expires March 31, 2019. At March 31, 2018, Trustmark’s tangible equity to tangible assets ratio was 9.00%, while the total risk-based capital ratio was 13.44%.

Credit Quality

Other real estate decreased 8.5% and 29.3% from the prior quarter and year-over-year, respectively Recoveries exceeded charge-offs; net recoveries represented -0.03% of average loans Allowance for loan losses represented 314.28% of nonperforming loans, excluding specifically reviewed impaired loans

Nonperforming loans totaled $68.7 million at March 31, 2018, up 1.7% from the prior quarter and 12.1% year-over-year. Other real estate totaled $39.6 million, reflecting a decline of 8.5% from the previous quarter and 29.3% from the same period one year earlier. Collectively, nonperforming assets totaled $108.3 million, reflecting a linked-quarter decrease of 2.3% and year-over-year decrease of 7.7%.

Allocation of Trustmark’s $81.2 million allowance for loan losses represented 1.04% of commercial loans and 0.64% of consumer and home mortgage loans, resulting in an allowance to total loans held for investment of 0.95% at March 31, 2018, 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 0.98% of total loans, which includes held for investment and acquired loans.

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

Revenue Generation

Net interest margin, excluding acquired loans, was 3.37%, an increase of 2 basis points from the prior quarter Maturing investment securities run-off is accretive to the net interest margin Deposit costs remain well controlled Noninterest income totaled $46.8 million, up 6.4% linked quarter and 1.7% year-over-year

Net interest income (FTE) in the first quarter totaled $105.3 million, resulting in a net interest margin of 3.46%, down 2 basis points from the prior quarter. Relative to the prior quarter, net interest income (FTE) decreased $3.8 million, reflecting a $3.2 million decrease in interest income and a $592 thousand increase in interest expense. During the first quarter of 2018, the yield on acquired loans totaled 8.13% and included $594 thousand in recoveries from the settlement of debt, which represented approximately 0.99% of the annualized total acquired loan yield. The net interest margin was negatively impacted by approximately 6 basis points linked-quarter and year-over-year due to the enactment of the 2017 Tax Cuts and Jobs Act which reduced the fully tax equivalent adjustment as a result of the lower corporate tax rate. This compression year-over-year is principally offset by the runoff of maturing investment securities, while linked quarter is offset by the runoff of maturing investment securities and quarterly day count.

Noninterest income in the first quarter increased 6.4% from the prior quarter to total $46.8 million, as higher mortgage banking revenues and insurance commissions more than offset seasonal reductions in various fee-income categories. Mortgage banking revenue totaled $11.3 million in the first quarter, up $5.0 million from the prior quarter and $1.1 million year-over-year. The linked-quarter change reflects a net positive mortgage valuation adjustment and a net positive mortgage servicing hedge ineffectiveness that more than offset decreased secondary marketing gains. Mortgage loan production totaled $289.1 million, down 14.3% from the prior quarter and 4.7% year-over-year. Insurance revenue totaled $9.4 million in the first quarter, up 6.9% from the prior quarter and 2.2% year-over-year; this performance primarily reflects growth in the group health insurance and property and casualty businesses.

Wealth management revenue in the first quarter totaled $7.6 million, down 2.0% and up 2.1% from the prior quarter and year-over-year, respectively. The linked-quarter decline is primarily attributable to decreased commission-based transactions within investment services. Bank card and other fees declined $640 thousand from the prior quarter due to seasonal reductions in interchange income and other miscellaneous bank fees. Service charges on deposit accounts declined $336 thousand from the prior quarter, reflecting seasonal reductions in NSF and overdraft fees.

Noninterest Expense

Total noninterest expense declined 0.5% linked quarter and increased 0.4% year-over-year to $102.5 million Core noninterest expense, which excludes other real estate expense and intangible amortization, totaled $100.2 million, down 0.6% from the prior quarter and up 1.5% year-over-year

Salaries and employee benefits decreased $345 thousand from the prior quarter to total $58.5 million. Services and fees increased 2.1%, or $327 thousand, linked-quarter. Other real estate expense totaled $866 thousand, up $200 thousand from the prior quarter, while net occupancy-premises expense totaled $6.5 million, down 1.7% from the prior quarter. Other expense totaled $11.8 million, a decline of $783 thousand, or 6.2%, on a linked-quarter basis.

Trustmark remains committed to optimization of its retail delivery channels to promote additional growth. In the first quarter, Trustmark opened a location in Pensacola, Florida, that not only serves as a branch, but also as headquarters for the Fisher Brown Bottrell Insurance agency.

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, April 25, 2018 at 8:30 a.m. Central Time to discuss the Corporation’s financial results. Interested parties may listen to the conference call by dialing (877) 317-3051 or by clicking on the link provided under the Investor Relations section of our website at www.trustmark.com. A replay of the conference call will also be available through Wednesday, May 9, 2018, in archived format at the same web address or by calling (877) 344-7529, passcode 10118412.

Trustmark Corporation is a financial services company providing banking and financial solutions through 199 offices in Alabama, Florida, Mississippi, Tennessee and Texas.

Forward-Looking Statements

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

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

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

TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION March 31, 2018 ($ in thousands) (unaudited) Linked Quarter Year over Year

QUARTERLY AVERAGE BALANCES

3/31/2018 12/31/2017 3/31/2017 $ Change % Change $ Change % Change Securities AFS-taxable $ 2,141,144 $ 2,247,247 $ 2,252,162 $ (106,103) -4.7% $ (111,018) -4.9% Securities AFS-nontaxable 57,972 61,691 88,522 (3,719) -6.0% (30,550) -34.5% Securities HTM-taxable 1,005,721 1,045,723 1,124,692 (40,002) -3.8% (118,971) -10.6% Securities HTM-nontaxable 32,734 32,781 33,009 (47) -0.1% (275) -0.8% Total securities 3,237,571 3,387,442 3,498,385 (149,871) -4.4% (260,814) -7.5% Loans (including loans held for sale) 8,636,967 8,686,916 8,074,449 (49,949) -0.6% 562,518 7.0% Acquired loans 243,152 273,918 250,482 (30,766) -11.2% (7,330) -2.9% Fed funds sold and rev repos 478 1,724 397 (1,246) -72.3% 81 20.4% Other earning assets 213,985 80,218 79,515 133,767 n/m 134,470 n/m Total earning assets 12,332,153 12,430,218 11,903,228 (98,065) -0.8% 428,925 3.6% Allowance for loan losses (82,304) (86,704) (83,394) 4,400 5.1% 1,090 1.3% Cash and due from banks 336,642 315,586 310,542 21,056 6.7% 26,100 8.4% Other assets 1,030,738 1,192,464 1,235,469 (161,726) -13.6% (204,731) -16.6% Total assets $ 13,617,229 $ 13,851,564 $ 13,365,845 $ (234,335) -1.7% $ 251,384 1.9% Interest-bearing demand deposits $ 2,404,428 $ 2,244,625 $ 1,981,982 $ 159,803 7.1% $ 422,446 21.3% Savings deposits 3,737,507 3,291,407 3,319,572 446,100 13.6% 417,935 12.6% Time deposits 1,748,645 1,756,576 1,650,251 (7,931) -0.5% 98,394 6.0% Total interest-bearing deposits 7,890,580 7,292,608 6,951,805 597,972 8.2% 938,775 13.5% Fed funds purchased and repos 277,877 475,850 498,963 (197,973) -41.6% (221,086) -44.3% Short-term borrowings 751,219 1,276,543 887,848 (525,324) -41.2% (136,629) -15.4% Long-term FHLB advances 938 954 251,033 (16) -1.7% (250,095) -99.6% Junior subordinated debt securities 61,856 61,856 61,856 — 0.0% — 0.0% Total interest-bearing liabilities 8,982,470 9,107,811 8,651,505 (125,341) -1.4% 330,965 3.8% Noninterest-bearing deposits 2,881,374 2,994,292 3,008,176 (112,918) -3.8% (126,802) -4.2% Other liabilities 180,871 169,828 173,066 11,043 6.5% 7,805 4.5% Total liabilities 12,044,715 12,271,931 11,832,747 (227,216) -1.9% 211,968 1.8% Shareholders’ equity 1,572,514 1,579,633 1,533,098 (7,119) -0.5% 39,416 2.6% Total liabilities and equity $ 13,617,229 $ 13,851,564 $ 13,365,845 $ (234,335) -1.7% $ 251,384 1.9%

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, 2018 ($ in thousands) (unaudited) Linked Quarter Year over Year

PERIOD END BALANCES

3/31/2018 12/31/2017 3/31/2017

$ Change

% Change

$ Change

% Change Cash and due from banks $ 315,276 $ 335,768 $ 379,590 $ (20,492) -6.1% $ (64,314) -16.9% Fed funds sold and rev repos 112 615 500 (503) -81.8% (388) -77.6% Securities available for sale 2,097,497 2,238,635 2,365,554 (141,138) -6.3% (268,057) -11.3% Securities held to maturity 1,023,975 1,056,486 1,156,067 (32,511) -3.1% (132,092) -11.4% Loans held for sale (LHFS) 163,882 180,512 174,090 (16,630) -9.2% (10,208) -5.9% Loans held for investment (LHFI) 8,513,985 8,569,967 8,004,657 (55,982) -0.7% 509,328 6.4% Allowance for loan losses (81,235) (76,733) (72,445) (4,502) -5.9% (8,790) -12.1% Net LHFI 8,432,750 8,493,234 7,932,212 (60,484) -0.7% 500,538 6.3% Acquired loans 215,476 261,517 218,242 (46,041) -17.6% (2,766) -1.3% Allowance for loan losses, acquired loans (4,294) (4,079) (10,006) (215) -5.3% 5,712 57.1% Net acquired loans 211,182 257,438 208,236 (46,256) -18.0% 2,946 1.4% Net LHFI and acquired loans 8,643,932 8,750,672 8,140,448 (106,740) -1.2% 503,484 6.2% Premises and equipment, net 178,584 179,339 183,311 (755) -0.4% (4,727) -2.6% Mortgage servicing rights 94,850 84,269 82,758 10,581 12.6% 12,092 14.6% Goodwill 379,627 379,627 366,156 — 0.0% 13,471 3.7% Identifiable intangible assets 14,963 16,360 19,117 (1,397) -8.5% (4,154) -21.7% Other real estate 39,554 43,228 55,968 (3,674) -8.5% (16,414) -29.3% Other assets 511,187 532,442 566,802 (21,255) -4.0% (55,615) -9.8% Total assets $ 13,463,439 $ 13,797,953 $ 13,490,361 $ (334,514) -2.4% $ (26,922) -0.2% Deposits: Noninterest-bearing $ 3,004,442 $ 2,978,074 $ 3,209,727 $ 26,368 0.9% $ (205,285) -6.4% Interest-bearing 7,971,359 7,599,438 6,894,745 371,921 4.9% 1,076,614 15.6% Total deposits 10,975,801 10,577,512 10,104,472 398,289 3.8% 871,329 8.6% Fed funds purchased and repos 274,833 469,827 524,335 (194,994) -41.5% (249,502) -47.6% Short-term borrowings 442,689 971,049 864,690 (528,360) -54.4% (422,001) -48.8% Long-term FHLB advances 929 946 250,994 (17) -1.8% (250,065) -99.6% Junior subordinated debt securities 61,856 61,856 61,856 — 0.0% — 0.0% Other liabilities 137,194 145,062 146,053 (7,868) -5.4% (8,859) -6.1% Total liabilities 11,893,302 12,226,252 11,952,400 (332,950) -2.7% (59,098) -0.5% Common stock 14,121 14,115 14,112 6 0.0% 9 0.1% Capital surplus 366,021 369,124 365,951 (3,103) -0.8% 70 0.0% Retained earnings 1,257,881 1,228,187 1,200,903 29,694 2.4% 56,978 4.7% Accum other comprehensive loss, net of tax (67,886) (39,725) (43,005) (28,161) -70.9% (24,881) -57.9% Total shareholders’ equity 1,570,137 1,571,701 1,537,961 (1,564) -0.1% 32,176 2.1% Total liabilities and equity $ 13,463,439 $ 13,797,953 $ 13,490,361 $ (334,514) -2.4% $ (26,922) -0.2% 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, 2018 ($ in thousands except per share data) (unaudited) Quarter Ended Linked Quarter Year over Year

INCOME STATEMENTS

3/31/2018 12/31/2017 3/31/2017

$ Change

% Change

$ Change

% Change Interest and fees on LHFS & LHFI-FTE $ 94,712 $ 95,816 $ 83,790 $ (1,104) -1.2% $ 10,922 13.0% Interest and fees on acquired loans 4,877 6,401 5,189 (1,524) -23.8% (312) -6.0% Interest on securities-taxable 17,506 18,327 19,197 (821) -4.5% (1,691) -8.8% Interest on securities-tax exempt-FTE 824 1,035 1,300 (211) -20.4% (476) -36.6% Interest on fed funds sold and rev repos 2 7 1 (5) -71.4% 1 100.0% Other interest income 934 473 267 461 97.5% 667 n/m Total interest income-FTE 118,855 122,059 109,744 (3,204) -2.6% 9,111 8.3% Interest on deposits 9,491 7,284 3,945 2,207 30.3% 5,546 n/m Interest on fed funds pch and repos 662 1,116 698 (454) -40.7% (36) -5.2% Other interest expense 3,394 4,555 2,673 (1,161) -25.5% 721 27.0% Total interest expense 13,547 12,955 7,316 592 4.6% 6,231 85.2% Net interest income-FTE 105,308 109,104 102,428 (3,796) -3.5% 2,880 2.8% Provision for loan losses, LHFI 3,961 5,739 2,762 (1,778) -31.0% 1,199 43.4% Provision for loan losses, acquired loans 150 (1,573) (1,605) 1,723 n/m 1,755 n/m Net interest income after provision-FTE 101,197 104,938 101,271 (3,741) -3.6% (74) -0.1% Service charges on deposit accounts 10,857 11,193 10,832 (336) -3.0% 25 0.2% Bank card and other fees 6,626 7,266 6,500 (640) -8.8% 126 1.9% Mortgage banking, net 11,265 6,284 10,185 4,981 79.3% 1,080 10.6% Insurance commissions 9,419 8,813 9,212 606 6.9% 207 2.2% Wealth management 7,567 7,723 7,413 (156) -2.0% 154 2.1% Other, net 1,059 2,681 1,891 (1,622) -60.5% (832) -44.0% Nonint inc-excl sec gains (losses), net 46,793 43,960 46,033 2,833 6.4% 760 1.7% Security gains (losses), net — — — — n/m — n/m Total noninterest income 46,793 43,960 46,033 2,833 6.4% 760 1.7% Salaries and employee benefits 58,475 58,820 55,389 (345) -0.6% 3,086 5.6% Defined benefit plan termination — — — — n/m — n/m Services and fees 15,746 15,419 15,332 327 2.1% 414 2.7% Net occupancy-premises 6,502 6,617 6,238 (115) -1.7% 264 4.2% Equipment expense 6,099 5,996 5,998 103 1.7% 101 1.7% Other real estate expense 866 666 1,759 200 30.0% (893) -50.8% FDIC assessment expense 2,995 2,868 2,640 127 4.4% 355 13.4% Other expense 11,782 12,565 14,701 (783) -6.2% (2,919) -19.9% Total noninterest expense 102,465 102,951 102,057 (486) -0.5% 408 0.4% Income before income taxes and tax eq adj 45,525 45,947 45,247 (422) -0.9% 278 0.6% Tax equivalent adjustment 3,215 5,060 4,838 (1,845) -36.5% (1,623) -33.5% Income before income taxes 42,310 40,887 40,409 1,423 3.5% 1,901 4.7% Income taxes 5,480 25,119 9,161 (19,639) -78.2% (3,681) -40.2% Net income $ 36,830 $ 15,768 $ 31,248 $ 21,062 n/m $ 5,582 17.9% Per share data Earnings per share – basic $ 0.54 $ 0.23 $ 0.46 $ 0.31 n/m $ 0.08 17.4% Earnings per share – diluted $ 0.54 $ 0.23 $ 0.46 $ 0.31 n/m $ 0.08 17.4% Dividends per share $ 0.23 $ 0.23 $ 0.23 — 0.0% — 0.0% Weighted average shares outstanding Basic 67,809,234 67,742,792 67,687,365 Diluted 67,960,583 67,938,986 67,845,785 Period end shares outstanding 67,775,068 67,746,094 67,729,434 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, 2018 ($ in thousands) (unaudited) Quarter Ended Linked Quarter Year over Year

NONPERFORMING ASSETS (1)

3/31/2018 12/31/2017 3/31/2017

$ Change

% Change

$ Change

% Change Nonaccrual loans Alabama $ 3,121 $ 3,083 $ 1,649 $ 38 1.2% $ 1,472 89.3% Florida 2,116 3,034 3,559 (918) -30.3% (1,443) -40.5% Mississippi (2) 48,600 49,129 49,349 (529) -1.1% (749) -1.5% Tennessee (3) 5,530 4,436 5,185 1,094 24.7% 345 6.7% Texas 9,329 7,893 1,565 1,436 18.2% 7,764 n/m Total nonaccrual loans 68,696 67,575 61,307 1,121 1.7% 7,389 12.1% Other real estate Alabama 8,962 11,714 13,953 (2,752) -23.5% (4,991) -35.8% Florida 12,550 13,937 21,577 (1,387) -10.0% (9,027) -41.8% Mississippi (2) 15,737 14,260 14,974 1,477 10.4% 763 5.1% Tennessee (3) 1,523 2,535 4,706 (1,012) -39.9% (3,183) -67.6% Texas 782 782 758 — 0.0% 24 3.2% Total other real estate 39,554 43,228 55,968 (3,674) -8.5% (16,414) -29.3% Total nonperforming assets $ 108,250 $ 110,803 $ 117,275 $ (2,553) -2.3% $ (9,025) -7.7%

LOANS PAST DUE OVER 90 DAYS (1)

LHFI $ 1,419 $ 2,171 $ 1,307 $ (752) -34.6% $ 112 8.6% LHFS-Guaranteed GNMA serviced loans (no obligation to repurchase) $ 34,826 $ 35,544 $ 31,147 $ (718) -2.0% $ 3,679 11.8% Quarter Ended Linked Quarter Year over Year

ALLOWANCE FOR LOAN LOSSES (1)

3/31/2018 12/31/2017 3/31/2017

$ Change

% Change

$ Change

% Change

Beginning Balance $ 76,733 $ 80,332 $ 71,265 $ (3,599) -4.5% $ 5,468 7.7% Provision for loan losses 3,961 5,739 2,762 (1,778) -31.0% 1,199 43.4% Charge-offs (2,542) (12,075) (4,202) 9,533 78.9% 1,660 39.5% Recoveries 3,083 2,737 2,620 346 12.6% 463 17.7% Net (charge-offs) recoveries 541 (9,338) (1,582) 9,879 n/m 2,123 n/m Ending Balance $ 81,235 $ 76,733 $ 72,445 $ 4,502 5.9% $ 8,790 12.1%

PROVISION FOR LOAN LOSSES (1)

Alabama $ 618 $ 559 $ 1,189 $ 59 10.6% $ (571) -48.0% Florida (863) (1,235) 3 372 30.1% (866) n/m Mississippi (2) 2,664 2,779 1,826 (115) -4.1% 838 45.9% Tennessee (3) (268) (439) 208 171 39.0% (476) n/m Texas 1,810 4,075 (464) (2,265) -55.6% 2,274 n/m Total provision for loan losses $ 3,961 $ 5,739 $ 2,762 $ (1,778) -31.0% $ 1,199 43.4%

NET CHARGE-OFFS (RECOVERIES) (1)

Alabama $ 84 $ 196 $ 66 $ (112) -57.1% $ 18 27.3% Florida (960) (946) (155) (14) -1.5% (805) n/m Mississippi (2) 267 5,574 1,759 (5,307) -95.2% (1,492) -84.8% Tennessee (3) 109 79 83 30 38.0% 26 31.3% Texas (41) 4,435 (171) (4,476) n/m 130 76.0% Total net charge-offs (recoveries) $ (541) $ 9,338 $ 1,582 $ (9,879) n/m $ (2,123) n/m (1) – Excludes acquired loans. (2) – Mississippi includes Central and Southern Mississippi Regions. (3) – Tennessee includes Memphis, Tennessee and Northern Mississippi Regions. n/m – percentage changes greater than +/- 100% are considered not meaningful

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION March 31, 2018 ($ in thousands) (unaudited) Quarter Ended

AVERAGE BALANCES

3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Securities AFS-taxable $ 2,141,144 $ 2,247,247 $ 2,349,736 $ 2,334,600 $ 2,252,162 Securities AFS-nontaxable 57,972 61,691 67,994 75,640 88,522 Securities HTM-taxable 1,005,721 1,045,723 1,086,773 1,108,158 1,124,692 Securities HTM-nontaxable 32,734 32,781 32,829 32,878 33,009 Total securities 3,237,571 3,387,442 3,537,332 3,551,276 3,498,385 Loans (including loans held for sale) 8,636,967 8,686,916 8,532,523 8,348,758 8,074,449 Acquired loans 243,152 273,918 299,221 315,558 250,482 Fed funds sold and rev repos 478 1,724 3,582 3,184 397 Other earning assets 213,985 80,218 84,320 77,770 79,515 Total earning assets 12,332,153 12,430,218 12,456,978 12,296,546 11,903,228 Allowance for loan losses (82,304) (86,704) (85,363) (83,328) (83,394) Cash and due from banks 336,642 315,586 312,409 307,966 310,542 Other assets 1,030,738 1,192,464 1,202,766 1,229,981 1,235,469 Total assets $ 13,617,229 $ 13,851,564 $ 13,886,790 $ 13,751,165 $ 13,365,845 Interest-bearing demand deposits $ 2,404,428 $ 2,244,625 $ 2,192,064 $ 2,035,491 $ 1,981,982 Savings deposits 3,737,507 3,291,407 3,284,323 3,337,374 3,319,572 Time deposits 1,748,645 1,756,576 1,736,683 1,777,529 1,650,251 Total interest-bearing deposits 7,890,580 7,292,608 7,213,070 7,150,394 6,951,805 Fed funds purchased and repos 277,877 475,850 547,863 525,523 498,963 Short-term borrowings 751,219 1,276,543 1,335,476 1,047,107 887,848 Long-term FHLB advances 938 954 970 141,097 251,033 Junior subordinated debt securities 61,856 61,856 61,856 61,856 61,856 Total interest-bearing liabilities 8,982,470 9,107,811 9,159,235 8,925,977 8,651,505 Noninterest-bearing deposits 2,881,374 2,994,292 3,003,763 3,110,125 3,008,176 Other liabilities 180,871 169,828 145,925 162,823 173,066 Total liabilities 12,044,715 12,271,931 12,308,923 12,198,925 11,832,747 Shareholders’ equity 1,572,514 1,579,633 1,577,867 1,552,240 1,533,098 Total liabilities and equity $ 13,617,229 $ 13,851,564 $ 13,886,790 $ 13,751,165 $ 13,365,845

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION March 31, 2018 ($ in thousands) (unaudited)

PERIOD END BALANCES

3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Cash and due from banks $ 315,276 $ 335,768 $ 350,123 $ 318,329 $ 379,590 Fed funds sold and rev repos 112 615 3,215 6,900 500 Securities available for sale 2,097,497 2,238,635 2,369,089 2,447,688 2,365,554 Securities held to maturity 1,023,975 1,056,486 1,102,283 1,139,754 1,156,067 Loans held for sale (LHFS) 163,882 180,512 204,157 203,652 174,090 Loans held for investment (LHFI) 8,513,985 8,569,967 8,407,341 8,296,045 8,004,657 Allowance for loan losses (81,235) (76,733) (80,332) (76,184) (72,445) Net LHFI 8,432,750 8,493,234 8,327,009 8,219,861 7,932,212 Acquired loans 215,476 261,517 283,757 314,910 218,242 Allowance for loan losses, acquired loans (4,294) (4,079) (5,768) (7,423) (10,006) Net acquired loans 211,182 257,438 277,989 307,487 208,236 Net LHFI and acquired loans 8,643,932 8,750,672 8,604,998 8,527,348 8,140,448 Premises and equipment, net 178,584 179,339 181,312 182,315 183,311 Mortgage servicing rights 94,850 84,269 81,477 82,628 82,758 Goodwill 379,627 379,627 379,627 379,627 366,156 Identifiable intangible assets 14,963 16,360 17,883 19,422 19,117 Other real estate 39,554 43,228 48,356 49,958 55,968 Other assets 511,187 532,442 542,135 551,517 566,802 Total assets $ 13,463,439 $ 13,797,953 $ 13,884,655 $ 13,909,138 $ 13,490,361 Deposits: Noninterest-bearing $ 3,004,442 $ 2,978,074 $ 2,998,013 $ 3,092,915 $ 3,209,727 Interest-bearing 7,971,359 7,599,438 7,233,729 7,330,476 6,894,745 Total deposits 10,975,801 10,577,512 10,231,742 10,423,391 10,104,472 Fed funds purchased and repos 274,833 469,827 545,603 508,068 524,335 Short-term borrowings 442,689 971,049 1,322,159 1,222,592 864,690 Long-term FHLB advances 929 946 962 978 250,994 Junior subordinated debt securities 61,856 61,856 61,856 61,856 61,856 Other liabilities 137,194 145,062 139,798 130,335 146,053 Total liabilities 11,893,302 12,226,252 12,302,120 12,347,220 11,952,400 Common stock 14,121 14,115 14,114 14,114 14,112 Capital surplus 366,021 369,124 368,131 367,075 365,951 Retained earnings 1,257,881 1,228,187 1,228,115 1,209,238 1,200,903 Accum other comprehensive loss, net of tax (67,886) (39,725) (27,825) (28,509) (43,005) Total shareholders’ equity 1,570,137 1,571,701 1,582,535 1,561,918 1,537,961 Total liabilities and equity $ 13,463,439 $ 13,797,953 $ 13,884,655 $ 13,909,138 $ 13,490,361

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION March 31, 2018 ($ in thousands except per share data) (unaudited) Quarter Ended

INCOME STATEMENTS

3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Interest and fees on LHFS & LHFI-FTE $ 94,712 $ 95,816 $ 93,703 $ 89,486 $ 83,790 Interest and fees on acquired loans 4,877 6,401 6,625 6,263 5,189 Interest on securities-taxable 17,506 18,327 19,291 19,377 19,197 Interest on securities-tax exempt-FTE 824 1,035 1,104 1,178 1,300 Interest on fed funds sold and rev repos 2 7 14 11 1 Other interest income 934 473 355 371 267 Total interest income-FTE 118,855 122,059 121,092 116,686 109,744 Interest on deposits 9,491 7,284 6,381 5,107 3,945 Interest on fed funds pch and repos 662 1,116 1,301 1,037 698 Other interest expense 3,394 4,555 4,520 3,628 2,673 Total interest expense 13,547 12,955 12,202 9,772 7,316 Net interest income-FTE 105,308 109,104 108,890 106,914 102,428 Provision for loan losses, LHFI 3,961 5,739 3,672 2,921 2,762 Provision for loan losses, acquired loans 150 (1,573) (1,653) (2,564) (1,605) Net interest income after provision-FTE 101,197 104,938 106,871 106,557 101,271 Service charges on deposit accounts 10,857 11,193 11,223 10,755 10,832 Bank card and other fees 6,626 7,266 7,150 7,370 6,500 Mortgage banking, net 11,265 6,284 4,425 9,008 10,185 Insurance commissions 9,419 8,813 10,398 9,745 9,212 Wealth management 7,567 7,723 7,530 7,674 7,413 Other, net 1,059 2,681 3,740 5,637 1,891 Nonint inc-excl sec gains (losses), net 46,793 43,960 44,466 50,189 46,033 Security gains (losses), net — — 14 1 — Total noninterest income 46,793 43,960 44,480 50,190 46,033 Salaries and employee benefits 58,475 58,820 57,871 57,185 55,389 Defined benefit plan termination — — — 17,644 — Services and fees 15,746 15,419 15,133 15,009 15,332 Net occupancy-premises 6,502 6,617 6,702 6,210 6,238 Equipment expense 6,099 5,996 6,297 6,162 5,998 Other real estate expense 866 666 864 383 1,759 FDIC assessment expense 2,995 2,868 2,816 2,686 2,640 Other expense 11,782 12,565 13,403 16,796 14,701 Total noninterest expense 102,465 102,951 103,086 122,075 102,057 Income before income taxes and tax eq adj 45,525 45,947 48,265 34,672 45,247 Tax equivalent adjustment 3,215 5,060 4,978 4,910 4,838 Income before income taxes 42,310 40,887 43,287 29,762 40,409 Income taxes 5,480 25,119 8,708 5,727 9,161 Net income $ 36,830 $ 15,768 $ 34,579 $ 24,035 $ 31,248 Per share data Earnings per share – basic $ 0.54 $ 0.23 $ 0.51 $ 0.35 $ 0.46 Earnings per share – diluted $ 0.54 $ 0.23 $ 0.51 $ 0.35 $ 0.46 Dividends per share $ 0.23 $ 0.23 $ 0.23 $ 0.23 $ 0.23 Weighted average shares outstanding Basic 67,809,234 67,742,792 67,741,655 67,736,298 67,687,365 Diluted 67,960,583 67,938,986 67,916,418 67,892,532 67,845,785 Period end shares outstanding 67,775,068 67,746,094 67,742,135 67,740,901 67,729,434

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION March 31, 2018 ($ in thousands) (unaudited) Quarter Ended

NONPERFORMING ASSETS (1)

3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Nonaccrual loans Alabama $ 3,121 $ 3,083 $ 1,629 $ 1,723 $ 1,649 Florida 2,116 3,034 3,242 3,174 3,559 Mississippi (2) 48,600 49,129 59,483 63,889 49,349 Tennessee (3) 5,530 4,436 4,589 4,975 5,185 Texas 9,329 7,893 346 383 1,565 Total nonaccrual loans 68,696 67,575 69,289 74,144 61,307 Other real estate Alabama 8,962 11,714 12,726 13,301 13,953 Florida 12,550 13,937 16,100 17,377 21,577 Mississippi (2) 15,737 14,260 15,319 14,377 14,974 Tennessee (3) 1,523 2,535 2,671 3,363 4,706 Texas 782 782 1,540 1,540 758 Total other real estate 39,554 43,228 48,356 49,958 55,968 Total nonperforming assets $ 108,250 $ 110,803 $ 117,645 $ 124,102 $ 117,275

LOANS PAST DUE OVER 90 DAYS (1)

LHFI $ 1,419 $ 2,171 $ 2,244 $ 1,216 $ 1,307 LHFS-Guaranteed GNMA serviced loans (no obligation to repurchase) $ 34,826 $ 35,544 $ 32,332 $ 29,906 $ 31,147 Quarter Ended

ALLOWANCE FOR LOAN LOSSES (1)

3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Beginning Balance $ 76,733 $ 80,332 $ 76,184 $ 72,445 $ 71,265 Provision for loan losses 3,961 5,739 3,672 2,921 2,762 Charge-offs (2,542) (12,075) (2,752) (2,118) (4,202) Recoveries 3,083 2,737 3,228 2,936 2,620 Net (charge-offs) recoveries 541 (9,338) 476 818 (1,582) Ending Balance $ 81,235 $ 76,733 $ 80,332 $ 76,184 $ 72,445 PROVISION FOR LOAN LOSSES (1) Alabama $ 618 $ 559 $ 1,218 $ 866 $ 1,189 Florida (863) (1,235) (744) (975) 3 Mississippi (2) 2,664 2,779 1,860 2,268 1,826 Tennessee (3) (268) (439) (72) 322 208 Texas 1,810 4,075 1,410 440 (464) Total provision for loan losses $ 3,961 $ 5,739 $ 3,672 $ 2,921 $ 2,762 NET CHARGE-OFFS (RECOVERIES) (1) Alabama $ 84 $ 196 $ 314 $ (29) $ 66 Florida (960) (946) (796) (973) (155) Mississippi (2) 267 5,574 (11) 33 1,759 Tennessee (3) 109 79 85 146 83 Texas (41) 4,435 (68) 5 (171) Total net charge-offs (recoveries) $ (541) $ 9,338 $ (476) $ (818) $ 1,582 (1) – Excludes acquired loans. (2) – Mississippi includes Central and Southern Mississippi Regions. (3) – Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION March 31, 2018 (unaudited) Quarter Ended

FINANCIAL RATIOS AND OTHER DATA

3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Return on equity 9.50% 3.96% 8.69% 6.21% 8.27% Return on average tangible equity 13.05% 5.60% 11.95% 8.68% 11.39% Return on assets 1.10% 0.45% 0.99% 0.70% 0.95% Interest margin – Yield – FTE 3.91% 3.90% 3.86% 3.81% 3.74% Interest margin – Cost 0.45% 0.41% 0.39% 0.32% 0.25% Net interest margin – FTE 3.46% 3.48% 3.47% 3.49% 3.49% Efficiency ratio (1) 65.50% 65.21% 65.14% 64.50% 66.67% Full-time equivalent employees 2,905 2,893 2,878 2,858 2,799

CREDIT QUALITY RATIOS (2)

Net charge-offs/average loans -0.03% 0.43% -0.02% -0.04% 0.08% Provision for loan losses/average loans 0.19% 0.26% 0.17% 0.14% 0.14% Nonperforming loans/total loans (incl LHFS) 0.79% 0.77% 0.80% 0.87% 0.75% Nonperforming assets/total loans (incl LHFS) 1.25% 1.27% 1.37% 1.46% 1.43% Nonperforming assets/total loans (incl LHFS) +ORE 1.24% 1.26% 1.36% 1.45% 1.42% ALL/total loans (excl LHFS) 0.95% 0.90% 0.96% 0.92% 0.91% ALL-commercial/total commercial loans 1.04% 0.95% 1.02% 0.99% 0.97% ALL-consumer/total consumer and home mortgage loans 0.64% 0.68% 0.73% 0.67% 0.67% ALL/nonperforming loans 118.25% 113.55% 115.94% 102.75% 118.17% ALL/nonperforming loans (excl specifically reviewed impaired loans) 314.28% 320.84% 301.50% 277.42% 263.73%

CAPITAL RATIOS

Total equity/total assets 11.66% 11.39% 11.40% 11.23% 11.40% Tangible equity/tangible assets 9.00% 8.77% 8.79% 8.61% 8.80% Tangible equity/risk-weighted assets 11.25% 11.13% 11.29% 11.19% 11.49% Tier 1 leverage ratio (3) 9.96% 9.67% 9.61% 9.56% 9.86% Common equity tier 1 capital ratio (3) 12.05% 11.77% 11.80% 11.73% 12.19% Tier 1 risk-based capital ratio (3) 12.62% 12.33% 12.37% 12.30% 12.79% Total risk-based capital ratio (3) 13.44% 13.10% 13.19% 13.11% 13.61%

STOCK PERFORMANCE

Market value-Close $ 31.16 $ 31.86 $ 33.12 $ 32.16 $ 31.79 Book value $ 23.17 $ 23.20 $ 23.36 $ 23.06 $ 22.71 Tangible book value $ 17.34 $ 17.35 $ 17.49 $ 17.17 $ 17.02

(1) –

The efficiency ratio is noninterest expense to total net interest income (FTE) and noninterest income, excluding security gains (losses), amortization of partnership tax credits, amortization of purchased intangibles, and significant non-routine income and expense items.

(2) –

Excludes acquired loans.

(3) –

The regulatory capital ratios for December 31, 2017 contain a reclassification adjustment of $8.5 million from AOCI to retained earnings as allowed by regulatory agencies in an interagency statement released January 18, 2018 to address disproportionate tax effect in AOCI resulting from the recent enactment of the Tax Cuts and Jobs Act of 2017 and the application of Financial Accounting Standards Board Accounting Standards Codification Topic 740, Income Taxes.

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIALS March 31, 2018 ($ in thousands) (unaudited)

Note 1 – Business Combinations

On April 7, 2017, Trustmark Corporation completed its merger with RB Bancorporation (Reliance), the holding company for Reliance Bank, which had seven offices serving the Huntsville, Alabama metropolitan service area (MSA). Reliance Bank was merged into Trustmark National Bank simultaneously with the merger of Trustmark and RB Bancorporation. Under the terms of the Merger Agreement dated November 14, 2016, Trustmark paid $22.00 in cash for each share of Reliance common stock outstanding, which represented total consideration for Reliance common shareholders of approximately $23.7 million. In addition, Trustmark paid off Reliance Preferred Stock of $1.1 million bringing the total consideration paid to $24.8 million.

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

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

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

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

Note 2 – Securities Available for Sale and Held to Maturity

The following table is a summary of the estimated fair value of securities available for sale and the amortized cost of securities held to maturity ($ in thousands):

3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017

SECURITIES AVAILABLE FOR SALE

U.S. Government agency obligations Issued by U.S. Government agencies $ 40,118 $ 45,018 $ 49,723 $ 51,277 $ 53,247 Issued by U.S. Government sponsored agencies 263 267 271 272 274 Obligations of states and political subdivisions 75,013 79,229 89,144 96,514 109,895 Mortgage-backed securities Residential mortgage pass-through securities Guaranteed by GNMA 62,457 65,746 60,902 58,422 42,667 Issued by FNMA and FHLMC 767,676 814,450 860,131 860,571 733,214 Other residential mortgage-backed securities Issued or guaranteed by FNMA, FHLMC, or GNMA 954,537 1,016,790 1,087,169 1,157,241 1,202,719 Commercial mortgage-backed securities Issued or guaranteed by FNMA, FHLMC, or GNMA 197,433 217,135 221,749 223,391 223,538 Total securities available for sale $ 2,097,497 $ 2,238,635 $ 2,369,089 $ 2,447,688 $ 2,365,554

SECURITIES HELD TO MATURITY

U.S. Government agency obligations Issued by U.S. Government sponsored agencies $ 3,703 $ 3,692 $ 3,680 $ 3,669 $ 3,658 Obligations of states and political subdivisions 46,011 46,039 46,069 46,098 46,273 Mortgage-backed securities Residential mortgage pass-through securities Guaranteed by GNMA 12,974 13,539 14,191 14,399 14,977 Issued by FNMA and FHLMC 128,517 133,975 139,172 144,282 118,733 Other residential mortgage-backed securities Issued or guaranteed by FNMA, FHLMC, or GNMA 653,325 678,926 708,715 740,042 771,296 Commercial mortgage-backed securities Issued or guaranteed by FNMA, FHLMC, or GNMA 179,445 180,315 190,456 191,264 201,130 Total securities held to maturity $ 1,023,975 $ 1,056,486 $ 1,102,283 $ 1,139,754 $ 1,156,067
TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIALS March 31, 2018 ($ in thousands) (unaudited)

Note 2 – Securities Available for Sale and Held to Maturity (continued)

At March 31, 2018, the net unamortized, unrealized loss included in accumulated other comprehensive loss in the accompanying balance sheet for securities held to maturity previously transferred from securities available for sale totaled approximately $18.5 million ($13.9 million, net of tax).

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

Note 3 – Loan Composition

LHFI BY TYPE (excluding acquired loans)

3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Loans secured by real estate: Construction, land development and other land loans $ 986,188 $ 987,624 $ 950,144 $ 922,029 $ 859,927 Secured by 1-4 family residential properties 1,698,885 1,675,311 1,648,733 1,655,968 1,656,837 Secured by nonfarm, nonresidential properties 2,257,899 2,193,823 2,172,885 2,109,367 2,064,352 Other real estate secured 425,664 517,956 482,163 432,208 399,636 Commercial and industrial loans 1,561,967 1,570,345 1,568,588 1,635,000 1,540,783 Consumer loans 168,469 171,918 173,061 170,858 166,314 State and other political subdivision loans 936,014 952,483 936,614 936,860 910,493 Other loans 478,899 500,507 475,153 433,755 406,315 LHFI 8,513,985 8,569,967 8,407,341 8,296,045 8,004,657 Allowance for loan losses (81,235 ) (76,733 ) (80,332 ) (76,184 ) (72,445 ) Net LHFI $ 8,432,750 $ 8,493,234 $ 8,327,009 $ 8,219,861 $ 7,932,212

ACQUIRED LOANS BY TYPE

3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Loans secured by real estate: Construction, land development and other land loans $ 17,575 $ 23,586 $ 29,384 $ 35,054 $ 17,651 Secured by 1-4 family residential properties 49,289 61,751 65,746 74,313 54,721 Secured by nonfarm, nonresidential properties 100,285 114,694 122,200 132,663 92,075 Other real estate secured 14,581 16,746 18,431 19,553 16,275 Commercial and industrial loans 21,808 31,506 34,124 34,375 20,691 Consumer loans 1,920 2,600 2,749 2,833 2,664 Other loans 10,018 10,634 11,123 16,119 14,165 Acquired loans 215,476 261,517 283,757 314,910 218,242 Allowance for loan losses, acquired loans (4,294 ) (4,079 ) (5,768 ) (7,423 ) (10,006 ) Net acquired loans $ 211,182 $ 257,438 $ 277,989 $ 307,487 $ 208,236
TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIALS March 31, 2018 ($ in thousands) (unaudited)

Note 3 – Loan Composition (continued)

March 31, 2018

LHFI – COMPOSITION BY REGION (1)

Total Alabama Florida

Mississippi(Central andSouthernRegions)

Tennessee(Memphis,TN andNorthern MSRegions)

Texas Loans secured by real estate: Construction, land development and other land loans $ 986,188 $ 350,661 $ 60,705 $ 281,582 $ 20,428 $ 272,812 Secured by 1-4 family residential properties 1,698,885 111,756 49,456 1,430,525 90,317 16,831 Secured by nonfarm, nonresidential properties 2,257,899 417,309 228,019 935,116 142,576 534,879 Other real estate secured 425,664 76,262 2,471 211,356 11,930 123,645 Commercial and industrial loans 1,561,967 221,467 22,148 788,547 346,888 182,917 Consumer loans 168,469 21,845 4,676 122,027 17,638 2,283 State and other political subdivision loans 936,014 82,261 28,185 602,043 24,613 198,912 Other loans 478,899 67,408 17,013 307,852 47,868 38,758 Loans $ 8,513,985 $ 1,348,969 $ 412,673 $ 4,679,048 $ 702,258 $ 1,371,037

CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION (1)

Lots $ 56,150 $ 14,303 $ 14,456 $ 22,368 $ 1,586 $ 3,437 Development 51,113 5,277 7,298 23,352 406 14,780 Unimproved land 91,838 13,048 14,505 31,874 13,891 18,520 1-4 family construction 198,651 65,877 11,816 85,337 1,806 33,815 Other construction 588,436 252,156 12,630 118,651 2,739 202,260 Construction, land development and other land loans $ 986,188 $ 350,661 $ 60,705 $ 281,582 $ 20,428 $ 272,812

LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION (1)

Income producing: Retail $ 321,962 $ 90,321 $ 52,846 $ 105,837 $ 17,914 $ 55,044 Office 217,886 60,820 20,915 70,956 5,626 59,569 Nursing homes/senior living 185,545 20,643 — 158,572 6,330 — Hotel/motel 279,788 56,295 60,164 55,766 34,698 72,865 Mini-storage 133,013 14,249 6,238 43,575 552 68,399 Industrial 87,509 11,396 9,295 15,795 3,476 47,547 Health care 34,264 10,471 771 20,154 — 2,868 Convenience stores 30,576 2,847 — 17,367 831 9,531 Other 91,338 13,520 14,572 16,620 7,627 38,999 Total income producing loans 1,381,881 280,562 164,801 504,642 77,054 354,822 Owner-occupied: Office 160,852 27,109 20,512 70,398 5,124 37,709 Churches 95,883 17,277 6,508 49,319 17,592 5,187 Industrial warehouses 141,520 10,264 2,974 56,096 14,734 57,452 Health care 114,396 24,202 5,838 67,202 2,999 14,155 Convenience stores 101,933 12,762 12,431 51,667 1,275 23,798 Retail 50,748 15,248 6,596 20,258 1,836 6,810 Restaurants 32,272 2,817 666 24,977 1,897 1,915 Auto dealerships 31,372 8,754 155 12,964 9,499 — Other 147,042 18,314 7,538 77,593 10,566 33,031 Total owner-occupied loans 876,018 136,747 63,218 430,474 65,522 180,057 Loans secured by nonfarm, nonresidential properties $ 2,257,899 $ 417,309 $ 228,019 $ 935,116 $ 142,576 $ 534,879

(1) Excludes acquired loans.

TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIALS March 31, 2018 ($ 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 3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Securities – taxable 2.26 % 2.21 % 2.23 % 2.26 % 2.31 % Securities – nontaxable 3.68 % 4.35 % 4.34 % 4.35 % 4.34 % Securities – total 2.30 % 2.27 % 2.29 % 2.32 % 2.38 % Loans – LHFI & LHFS 4.45 % 4.38 % 4.36 % 4.30 % 4.21 % Acquired loans 8.13 % 9.27 % 8.78 % 7.96 % 8.40 % Loans – total 4.55 % 4.53 % 4.51 % 4.43 % 4.33 % FF sold & rev repo 1.70 % 1.61 % 1.55 % 1.39 % 1.02 % Other earning assets 1.77 % 2.34 % 1.67 % 1.91 % 1.36 % Total earning assets 3.91 % 3.90 % 3.86 % 3.81 % 3.74 % Interest-bearing deposits 0.49 % 0.40 % 0.35 % 0.29 % 0.23 % FF pch & repo 0.97 % 0.93 % 0.94 % 0.79 % 0.57 % Other borrowings 1.69 % 1.35 % 1.28 % 1.16 % 0.90 % Total interest-bearing liabilities 0.61 % 0.56 % 0.53 % 0.44 % 0.34 % Net interest margin 3.46 % 3.48 % 3.47 % 3.49 % 3.49 % Net interest margin excluding acquired loans 3.37 % 3.35 % 3.34 % 3.37 % 3.38 %

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

During the first quarter of 2018, the yield on acquired loans totaled 8.13% and included $594 thousand in recoveries from the settlement of debt, which represented approximately 0.99% of the annualized total acquired loan yield. The net interest margin was negatively impacted by approximately 6 basis points linked quarter and year-over-year due to the enactment of the 2017 Tax Cuts and Jobs Act (Tax Reform Act) which reduced the fully tax equivalent adjustment as a result of the lower corporate tax rate. This compression year-over-year is principally offset by the runoff of maturing investment securities, while linked quarter is offset by the runoff of maturing investment securities and quarterly day count.

Note 5 – Mortgage Banking

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

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

Quarter Ended 3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Mortgage servicing income, net $ 5,588 $ 5,471 $ 5,295 $ 5,439 $ 5,458 Change in fair value-MSR from runoff (2,507 ) (2,605 ) (2,892 ) (2,896 ) (2,387 ) Gain on sales of loans, net 4,585 5,300 5,083 5,001 3,550 Other, net 295 (1,120 ) (450 ) 629 772 Mortgage banking income before hedge ineffectiveness 7,961 7,046 7,036 8,173 7,393 Change in fair value-MSR from market changes 9,521 1,168 (2,393 ) (1,291 ) 1,466 Change in fair value of derivatives (6,217 ) (1,930 ) (218 ) 2,126 1,326 Net positive (negative) hedge ineffectiveness 3,304 (762 ) (2,611 ) 835 2,792 Mortgage banking, net $ 11,265 $ 6,284 $ 4,425 $ 9,008 $ 10,185
TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIALS March 31, 2018 ($ in thousands) (unaudited)

Note 6 – Salaries and Employee Benefit Plans

Defined Benefit Pension Plan

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

Note 7 – Other Noninterest Income and Expense

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

Quarter Ended 3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Partnership amortization for tax credit purposes $ (2,202 ) $ (2,478 ) $ (2,521 ) $ (2,287 ) $ (2,274 ) Increase in life insurance cash surrender value 1,738 1,816 1,813 1,782 1,714 Other miscellaneous income 1,523 3,343 4,448 6,142 2,451 Total other, net $ 1,059 $ 2,681 $ 3,740 $ 5,637 $ 1,891

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

Trustmark received no nontaxable proceeds related to bank-owned life insurance during the first quarter of 2018 compared to nontaxable proceeds of $1.7 million and $2.7 million during the fourth and third quarters of 2017, respectively, and $4.9 million related to life insurance acquired as part of a previous acquisition during the second quarter of 2017, which were recorded in other miscellaneous income in the table above.

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

Quarter Ended 3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Loan expense $ 2,791 $ 2,276 $ 3,013 $ 2,827 $ 2,792 Amortization of intangibles 1,397 1,522 1,539 1,544 1,564

Defined benefit plans non-service cost reclass from salaries and employee benefits

885 968 966 1,875 1,913 Other miscellaneous expense 6,709 7,799 7,885 10,550 8,432 Total other expense $ 11,782 $ 12,565 $ 13,403 $ 16,796 $ 14,701

Trustmark adopted ASU 2017-07, “Compensation-Retirement Benefits (Topic 715)-Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” effective January 1, 2018 and was required to reclassify the defined benefit plans non-service cost from salaries and employee benefits to other expense on the consolidated statements of income for each period presented.

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

TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIALS March 31, 2018 ($ in thousands) (unaudited)

Note 8 – Income Taxes

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

Quarter Ended 3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 Current $ 2,180 $ 3,850 $ 8,108 $ 5,427 $ 5,261 Deferred 3,300 4,300 600 300 3,900 Elimination of deferred tax valuation allowance — (8,650 ) — — — Income tax provision before re-measurement 5,480 (500 ) 8,708 5,727 9,161 Re-measurement of net deferred tax assets — 25,619 — — — Income tax provision $ 5,480 $ 25,119 $ 8,708 $ 5,727 $ 9,161

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

Following the recent enactment of the Tax Reform Act which resulted in the reduction of the corporate federal income tax rate, Trustmark re-measured its net deferred tax assets and recorded an increase in deferred income tax expense of $25.6 million during the fourth quarter of 2017.

Note 9 – Non-GAAP Financial Measures

In addition to capital ratios defined by U.S. generally accepted accounting principles (GAAP) and banking regulators, Trustmark utilizes various tangible common equity measures when evaluating capital utilization and adequacy. Tangible common equity, as defined by Trustmark, represents common equity less goodwill and identifiable intangible assets.

Trustmark believes these measures are important because they reflect the level of capital available to withstand unexpected market conditions. Additionally, presentation of these measures allows readers to compare certain aspects of Trustmark’s capitalization to other organizations. These ratios differ from capital measures defined by banking regulators principally in that the numerator excludes shareholders’ equity associated with preferred securities, the nature and extent of which varies across organizations. In Management’s experience, many stock analysts use tangible common equity measures in conjunction with more traditional bank capital ratios to compare capital adequacy of banking organizations with significant amounts of goodwill or other tangible assets, typically stemming from the use of the purchase accounting method in accounting for mergers and acquisitions.

These calculations are intended to complement the capital ratios defined by GAAP and banking regulators. Because GAAP does not include these capital ratio measures, Trustmark believes there are no comparable GAAP financial measures to these tangible common equity ratios. Despite the importance of these measures to Trustmark, there are no standardized definitions for them and, as a result, Trustmark’s calculations may not be comparable with other organizations. Also there may be limits in the usefulness of these measures to investors. As a result, Trustmark encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure. The following table reconciles Trustmark’s calculation of these measures to amounts reported under GAAP.

TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIALS March 31, 2018 ($ in thousands except per share data) (unaudited)

Note 9 – Non-GAAP Financial Measures (continued)

(1)

Calculation = ((net income adjusted for intangible amortization/number of days in period)*number of days in year)/total average tangible equity

(2)

Includes other intangible assets, net of DTLs, disallowed deferred tax assets (DTAS), threshold deductions and transition adjustments, as applicable.

(3)

The December 31, 2017 amount contains a reclassification adjustment of $8.5 million from AOCI to retained earnings as allowed by regulatory agencies in an interagency statement released January 18, 2018 to address disproportionate tax effect in AOCI resulting from the recent enactment of the Tax Cuts and Jobs Act of 2017 and the application of Financial Accounting Standards Board Accounting Standards Codification Topic 740, Income Taxes.

TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIALS March 31, 2018

($ in thousands except per share data)

(unaudited)

Note 9 – Non-GAAP Financial Measures (continued)

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

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

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