Trustmark Corporation Announces Third Quarter 2008 Financial Results and Declares $0.23 Quarterly Cash Dividend

Trustmark Corporation (NASDAQ:TRMK) announced net income of $23.4 million in the third quarter of 2008, which represented basic earnings per share of $0.41. Trustmark’s third quarter 2008 net income produced returns on average tangible equity and average assets of 15.16% and 1.02%, respectively. During the first nine months of 2008, Trustmark’s net income totaled $67.1 million, which represented basic earnings per share of $1.17. Trustmark’s performance during this period resulted in returns on average tangible equity and average assets of 14.80% and 0.99%, respectively. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per common share. The dividend is payable December 15, 2008, to shareholders of record on December 1, 2008.

Richard G. Hickson, Chairman and CEO, stated, "Earnings during the quarter reflect the core operating strength of Trustmark. Results include enhanced capital strength, an expanded net interest margin, a lower provision for loan losses and disciplined expense management. These are very significant accomplishments in light of volatile financial markets and continuing economic uncertainty. While the magnitude and duration of the economic slowdown remains unknown, Trustmark’s strong capital position, solid balance sheet and over a century of experience have well positioned us to successfully address the challenges confronting the banking industry.”

Credit Quality

• Nonperforming assets increased $19.6 million, representing 1.99% of total loans and other real estate
• Net charge-offs declined to $10.2 million, or 0.58% of average loans
• Provision for loan losses totaled $14.5 million

During the third quarter, Trustmark’s nonaccrual loans increased $10.0 million primarily due to a single energy-related credit in the Corporation’s Houston, Texas market. This exposure is well secured, appropriately reserved, and no additional write-downs are anticipated. We continued to devote significant resources to managing credit risks resulting from the slowdown in residential real estate. Nonaccrual loans in Trustmark’s Florida and Mississippi markets were relatively unchanged when compared to the prior quarter while nonaccrual loans declined 23.1% in the Corporation’s Tennessee market. Total other real estate increased $9.6 million during the quarter, principally due to foreclosures in Florida.

Collectively, Trustmark’s nonperforming assets increased $19.6 million during the quarter to total $137.7 million, or 1.99% of total loans and other real estate, as of September 30, 2008. Net charge-offs were $10.2 million in the third quarter of 2008 compared to $26.3 million in the prior quarter. The provision for loan losses in the third quarter totaled $14.5 million compared to $31.0 million in the prior quarter. Allocation of Trustmark’s $90.9 million allowance for loan losses represented 1.76% of commercial loans and 0.64% of consumer and home mortgage loans, resulting in an allowance to total loans of 1.35%.

Enhanced Capital Strength

• Internally generated tangible equity increased $45.9 million from prior year to $633.0 million
• Total risk-based capital expanded to 11.80%, exceeding "well-capitalized” standards
• Pursuing cost-effective capital investment from U.S. Treasury

The current economic and financial environments are significantly changing the landscape of the banking industry. In an effort to position Trustmark for continued success in this challenging environment, we have evaluated the U.S. Treasury’s preferred stock investment initiative. Trustmark intends to apply for this cost-effective capital in an effort to take advantage of growth and expansion opportunities that may arise as well as to reinforce our strong capital position.

Net Interest Margin Expanded to 4.01%

• Security yields increased
• Lower funding costs effectively offset lower loan yields

Average loans declined $153.2 million during the third quarter relative to the prior period as a result of Trustmark’s continuing strategy to reduce real estate construction, residential mortgage and auto loan exposure. Average investment securities increased $53.2 million during the quarter as a positively sloped yield curve created an opportunity to enhance future net interest income. Declining funding costs more than offset lower yields on earning assets, resulting in a 10 basis point increase in the net interest margin to 4.01%.

Disciplined Expense Management

• Salary and benefit expense remained well controlled
• Increased deposit insurance expense
• Efficiency ratio of 58.85%

In the third quarter of 2008, noninterest expense totaled $72.7 million, an increase of $3.1 million relative to the prior quarter. Deposit insurance expense increased $1.0 million as credits granted in connection with a new deposit assessment system were fully utilized during the quarter. Loan and foreclosure expenses increased $1.2 million. Excluding these increased insurance and loan expenses, noninterest expense during the third quarter increased $900 thousand. Ongoing human capital management initiatives and continued awareness of expense management across the organization are reflected in the Corporation’s efficiency ratio of 58.85% during the third quarter. Trustmark remains committed to identifying additional reengineering and efficiency opportunities to enhance shareholder value.

ADDITIONAL INFORMATION

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, October 29 at 10:00 a.m. Central Time to discuss the Corporation’s financial results. Interested parties may listen to the conference call by dialing (877) 397-0300, passcode 4275653 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, November 5, 2008 in archived format at the same web address or by calling (888) 203-1112, passcode 4275653.

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

FORWARD-LOOKING STATEMENTS

Certain statements contained in this document are not statements of historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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. 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.

These risks could cause actual results to differ materially from current expectations of Management and include, but are not limited to, changes in the level of nonperforming assets and charge-offs, local, state and national economic and market conditions, including the extent and duration of current volatility in the credit and financial markets, material changes in market interest rates, the costs and effects of litigation and of unexpected or adverse outcomes in such litigation, competition in loan and deposit pricing, as well as the entry of new competitors into our markets through de novo expansion and acquisitions, changes in existing regulations or the adoption of new regulations, natural disasters, acts of war or terrorism, changes in consumer spending, borrowings and savings habits, technological changes, changes in the financial performance or condition of Trustmark’s borrowers, the ability to control expenses, changes in Trustmark’s compensation and benefit plans, greater than expected costs or difficulties related to the integration of new products and lines of business and other risks described in Trustmark’s filings with the Securities and Exchange Commission.

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

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2008
($ in thousands except per share data)
(unaudited)
									Linked Quarter
QUARTERLY AVERAGE BALANCES			9/30/2008			6/30/2008			$ Change			% Change
Securities AFS-taxable			$ 822,995			$ 769,790			$ 53,205			6.9	%
Securities AFS-nontaxable			39,886			35,869			4,017			11.2	%
Securities HTM-taxable			184,001			186,047			(2,046	)		-1.1	%
Securities HTM-nontaxable			74,937			76,940			(2,003	)		-2.6	%
Total securities			1,121,819			1,068,646			53,173			5.0	%
Loans (including loans held for sale)			6,927,270			7,080,495			(153,225	)		-2.2	%
Fed funds sold and rev repos			17,401			30,567			(13,166	)		-43.1	%
Other earning assets			37,323			41,481			(4,158	)		-10.0	%
Total earning assets			8,103,813			8,221,189			(117,376	)		-1.4	%
Allowance for loan losses			(88,643	)		(82,962	)		(5,681	)		6.8	%
Cash and due from banks			246,515			253,545			(7,030	)		-2.8	%
Other assets			810,449			782,986			27,463			3.5	%
Total assets			$ 9,072,134			$ 9,174,758			$ (102,624	)		-1.1	%
Interest-bearing demand deposits			$ 1,222,087			$ 1,258,281			$ (36,194	)		-2.9	%
Savings deposits			1,774,188			1,867,438			(93,250	)		-5.0	%
Time deposits less than $100,000			1,532,630			1,568,802			(36,172	)		-2.3	%
Time deposits of $100,000 or more			1,108,677			1,051,716			56,961			5.4	%
Total interest-bearing deposits			5,637,582			5,746,237			(108,655	)		-1.9	%
Fed funds purchased and repos			659,312			618,227			41,085			6.6	%
Short-term borrowings			156,880			202,778			(45,898	)		-22.6	%
Subordinated notes			49,728			49,720			8			0.0	%
Junior subordinated debt securities			70,104			70,104			-			0.0	%
Total interest-bearing liabilities			6,573,606			6,687,066			(113,460	)		-1.7	%
Noninterest-bearing deposits			1,415,402			1,409,371			6,031			0.4	%
Other liabilities			136,229			134,237			1,992			1.5	%
Shareholders' equity			946,897			944,084			2,813			0.3	%
Total liabilities and equity			$ 9,072,134			$ 9,174,758			$ (102,624	)		-1.1	%
n/m - percentage changes greater than +/- 100% are considered not meaningful
									Year over Year
QUARTERLY AVERAGE BALANCES			9/30/2008			9/30/2007			$ Change			% Change
Securities AFS-taxable			$ 822,995			$ 525,858			$ 297,137			56.5	%
Securities AFS-nontaxable			39,886			48,818			(8,932	)		-18.3	%
Securities HTM-taxable			184,001			194,356			(10,355	)		-5.3	%
Securities HTM-nontaxable			74,937			84,767			(9,830	)		-11.6	%
Total securities			1,121,819			853,799			268,020			31.4	%
Loans (including loans held for sale)			6,927,270			6,970,434			(43,164	)		-0.6	%
Fed funds sold and rev repos			17,401			30,201			(12,800	)		-42.4	%
Other earning assets			37,323			33,341			3,982			11.9	%
Total earning assets			8,103,813			7,887,775			216,038			2.7	%
Allowance for loan losses			(88,643	)		(70,950	)		(17,693	)		24.9	%
Cash and due from banks			246,515			260,997			(14,482	)		-5.5	%
Other assets			810,449			759,626			50,823			6.7	%
Total assets			$ 9,072,134			$ 8,837,448			$ 234,686			2.7	%
Interest-bearing demand deposits			$ 1,222,087			$ 1,166,548			$ 55,539			4.8	%
Savings deposits			1,774,188			1,671,993			102,195			6.1	%
Time deposits less than $100,000			1,532,630			1,575,320			(42,690	)		-2.7	%
Time deposits of $100,000 or more			1,108,677			1,037,785			70,892			6.8	%
Total interest-bearing deposits			5,637,582			5,451,646			185,936			3.4	%
Fed funds purchased and repos			659,312			491,488			167,824			34.1	%
Short-term borrowings			156,880			314,264			(157,384	)		-50.1	%
Subordinated notes			49,728			49,696			32			0.1	%
Junior subordinated debt securities			70,104			70,104			-			0.0	%
Total interest-bearing liabilities			6,573,606			6,377,198			196,408			3.1	%
Noninterest-bearing deposits			1,415,402			1,423,745			(8,343	)		-0.6	%
Other liabilities			136,229			135,469			760			0.6	%
Shareholders' equity			946,897			901,036			45,861			5.1	%
Total liabilities and equity			$ 9,072,134			$ 8,837,448			$ 234,686			2.7	%
									Linked Quarter
PERIOD END BALANCES			9/30/2008			6/30/2008			$ Change			% Change
Cash and due from banks			$ 235,016			$ 296,628			$ (61,612	)		-20.8	%
Fed funds sold and rev repos			14,782			23,901			(9,119	)		-38.2	%
Securities available for sale			907,629			908,949			(1,320	)		-0.1	%
Securities held to maturity			256,323			260,741			(4,418	)		-1.7	%
Loans held for sale			154,162			184,858			(30,696	)		-16.6	%
Loans			6,740,730			6,859,375			(118,645	)		-1.7	%
Allowance for loan losses			(90,888	)		(86,576	)		(4,312	)		5.0	%
Net Loans			6,649,842			6,772,799			(122,957	)		-1.8	%
Premises and equipment, net			156,298			154,026			2,272			1.5	%
Mortgage servicing rights			78,550			76,209			2,341			3.1	%
Goodwill			291,145			291,145			-			0.0	%
Identifiable intangible assets			24,887			25,958			(1,071	)		-4.1	%
Other assets			317,639			319,835			(2,196	)		-0.7	%
Total assets			$ 9,086,273			$ 9,315,049			$ (228,776	)		-2.5	%
Deposits:
Noninterest-bearing			$ 1,526,374			$ 1,443,553			$ 82,821			5.7	%
Interest-bearing			5,411,304			5,680,130			(268,826	)		-4.7	%
Total deposits			6,937,678			7,123,683			(186,005	)		-2.6	%
Fed funds purchased and repos			592,818			748,137			(155,319	)		-20.8	%
Short-term borrowings			369,037			260,812			108,225			41.5	%
Subordinated notes			49,733			49,725			8			0.0	%
Junior subordinated debt securities			70,104			70,104			-			0.0	%
Other liabilities			117,905			126,703			(8,798	)		-6.9	%
Total liabilities			8,137,275			8,379,164			(241,889	)		-2.9	%
Common stock			11,944			11,938			6			0.1	%
Capital surplus			128,617			126,881			1,736			1.4	%
Retained earnings			824,768			814,674			10,094			1.2	%
Accum other comprehensive loss, net of tax
			(16,331	)		(17,608	)		1,277			-7.3	%
Total shareholders' equity			948,998			935,885			13,113			1.4	%
Total liabilities and equity			$ 9,086,273			$ 9,315,049			$ (228,776	)		-2.5	%
									Year over Year
PERIOD END BALANCES			9/30/2008			9/30/2007			$ Change			% Change
Cash and due from banks			$ 235,016			$ 306,107			$ (71,091	)		-23.2	%
Fed funds sold and rev repos			14,782			28,625			(13,843	)		-48.4	%
Securities available for sale			907,629			519,920			387,709			74.6	%
Securities held to maturity			256,323			278,385			(22,062	)		-7.9	%
Loans held for sale			154,162			133,693			20,469			15.3	%
Loans			6,740,730			6,917,541			(176,811	)		-2.6	%
Allowance for loan losses			(90,888	)		(72,368	)		(18,520	)		25.6	%
Net Loans			6,649,842			6,845,173			(195,331	)		-2.9	%
Premises and equipment, net			156,298			146,630			9,668			6.6	%
Mortgage servicing rights			78,550			73,253			5,297			7.2	%
Goodwill			291,145			291,177			(32	)		0.0	%
Identifiable intangible assets			24,887			29,313			(4,426	)		-15.1	%
Other assets			317,639			258,711			58,928			22.8	%
Total assets			$ 9,086,273			$ 8,910,987			$ 175,286			2.0	%
Deposits:
Noninterest-bearing			$ 1,526,374			$ 1,435,231			$ 91,143			6.4	%
Interest-bearing			5,411,304			5,467,221			(55,917	)		-1.0	%
Total deposits			6,937,678			6,902,452			35,226			0.5	%
Fed funds purchased and repos			592,818			525,142			67,676			12.9	%
Short-term borrowings			369,037			340,598			28,439			8.3	%
Subordinated notes			49,733			49,701			32			0.1	%
Junior subordinated debt securities			70,104			70,104			-			0.0	%
Other liabilities			117,905			115,453			2,452			2.1	%
Total liabilities			8,137,275			8,003,450			133,825			1.7	%
Common stock			11,944			11,933			11			0.1	%
Capital surplus			128,617			123,227			5,390			4.4	%
Retained earnings			824,768			787,356			37,412			4.8	%
Accum other comprehensive loss, net of tax						-
			(16,331	)		(14,979	)		(1,352	)		9.0	%
Total shareholders' equity			948,998			907,537			41,461			4.6	%
Total liabilities and equity			$ 9,086,273			$ 8,910,987			$ 175,286			2.0	%
			Quarter Ended						Linked Quarter
INCOME STATEMENTS			9/30/2008			6/30/2008			$ Change			% Change
Interest and fees on loans-FTE			$ 105,706			$ 109,023			$ (3,317	)		-3.0	%
Interest on securities-taxable			12,117			11,079			1,038			9.4	%
Interest on securities-tax exempt-FTE			1,946			1,943			3			0.2	%
Interest on fed funds sold and rev repos			98			168			(70	)		-41.7	%
Other interest income			407			475			(68	)		-14.3	%
Total interest income-FTE			120,274			122,688			(2,414	)		-2.0	%
Interest on deposits			32,860			36,881			(4,021	)		-10.9	%
Interest on fed funds pch and repos			3,123			3,019			104			3.4	%
Other interest expense			2,653			2,923			(270	)		-9.2	%
Total interest expense			38,636			42,823			(4,187	)		-9.8	%
Net interest income-FTE			81,638			79,865			1,773			2.2	%
Provision for loan losses			14,473			31,012			(16,539	)		-53.3	%
Net interest income after provision-FTE			67,165			48,853			18,312			37.5	%
Service charges on deposit accounts			13,886			13,223			663			5.0	%
Insurance commissions			9,007			8,394			613			7.3	%
Wealth management			6,788			7,031			(243	)		-3.5	%
General banking - other			5,813			6,053			(240	)		-4.0	%
Mortgage banking, net			4,323			6,708			(2,385	)		-35.6	%
Other, net			2,131			6,999			(4,868	)		-69.6	%
Nonint inc-excl sec gains, net			41,948			48,408			(6,460	)		-13.3	%
Security gains, net			2			58			(56	)		-96.6	%
Total noninterest income			41,950			48,466			(6,516	)		-13.4	%
Salaries and employee benefits			42,859			42,771			88			0.2	%
Services and fees			9,785			9,526			259			2.7	%
Net occupancy-premises			5,153			4,850			303			6.2	%
Equipment expense			4,231			4,144			87			2.1	%
Other expense			10,706			8,323			2,383			28.6	%
Total noninterest expense			72,734			69,614			3,120			4.5	%
Income before income taxes and tax eq adj			36,381			27,705			8,676			31.3	%
Tax equivalent adjustment			2,242			2,247			(5	)		-0.2	%
Income before income taxes			34,139			25,458			8,681			34.1	%
Income taxes			10,785			7,906			2,879			36.4	%
Net income			$ 23,354			$ 17,552			$ 5,802			33.1	%
			Quarter Ended						Linked Quarter
			9/30/2008			6/30/2008			$ Change			% Change
Per Share Data
Earnings per share - basic			$ 0.41			$ 0.31			$ 0.10			32.3	%
Earnings per share - diluted			$ 0.41			$ 0.31			$ 0.10			32.3	%
Dividends per share			$ 0.23			$ 0.23			$ -			0.0	%
Weighted average shares outstanding
Basic			57,298,710			57,296,449
Diluted			57,337,342			57,335,393
Period end shares outstanding			57,324,627			57,296,449
			Quarter Ended						Year over Year
INCOME STATEMENTS			9/30/2008			9/30/2007			$ Change			% Change
Interest and fees on loans-FTE			$ 105,706			$ 129,394			$ (23,688	)		-18.3	%
Interest on securities-taxable			12,117			7,181			4,936			68.7	%
Interest on securities-tax exempt-FTE			1,946			2,422			(476	)		-19.7	%
Interest on fed funds sold and rev repos			98			397			(299	)		-75.3	%
Other interest income			407			482			(75	)		-15.6	%
Total interest income-FTE			120,274			139,876			(19,602	)		-14.0	%
Interest on deposits			32,860		`	50,423			(17,563	)		-34.8	%
Interest on fed funds pch and repos			3,123			5,898			(2,775	)		-47.0	%
Other interest expense			2,653			6,186			(3,533	)		-57.1	%
Total interest expense			38,636			62,507			(23,871	)		-38.2	%
Net interest income-FTE			81,638			77,369			4,269			5.5	%
Provision for loan losses			14,473			4,999			9,474			n/m
Net interest income after provision-FTE			67,165			72,370			(5,205	)		-7.2	%
Service charges on deposit accounts			13,886			13,849			37			0.3	%
Insurance commissions			9,007			8,983			24			0.3	%
Wealth management			6,788			6,507			281			4.3	%
General banking - other			5,813			6,111			(298	)		-4.9	%
Mortgage banking, net			4,323			2,503			1,820			72.7	%
Other, net			2,131			3,593			(1,462	)		-40.7	%
Nonint inc-excl sec gains, net			41,948			41,546			402			1.0	%
Security gains, net			2			23			(21	)		-91.3	%
Total noninterest income			41,950			41,569			381			0.9	%
Salaries and employee benefits			42,859			42,257			602			1.4	%
Services and fees			9,785			9,285			500			5.4	%
Net occupancy-premises			5,153			4,753			400			8.4	%
Equipment expense			4,231			3,922			309			7.9	%
Other expense			10,706			8,271			2,435			29.4	%
Total noninterest expense			72,734			68,488			4,246			6.2	%
Income before income taxes and tax eq adj			36,381			45,451			(9,070	)		-20.0	%
Tax equivalent adjustment			2,242			2,283			(41	)		-1.8	%
Income before income taxes			34,139			43,168			(9,029	)		-20.9	%
Income taxes			10,785			14,087			(3,302	)		-23.4	%
Net income			$ 23,354			$ 29,081			$ (5,727	)		-19.7	%
			Quarter Ended						Year over Year
			9/30/2008			9/30/2007			$ Change			% Change
Per Share Data
Earnings per share - basic			$ 0.41			$ 0.51			$ (0.10	)		-19.6	%
Earnings per share - diluted			$ 0.41			$ 0.51			$ (0.10	)		-19.6	%
Dividends per share			$ 0.23			$ 0.22			$ 0.01			4.5	%
Weighted average shares outstanding
Basic			57,298,710			57,267,119
Diluted			57,337,342			57,526,573
Period end shares outstanding			57,324,627			57,272,408

			Quarter Ended
OTHER FINANCIAL DATA			9/30/2008			6/30/2008			9/30/2007
ROA			1.02	%		0.77	%		1.31	%
ROE			9.81	%		7.48	%		12.80	%
Return on average tangible equity			15.16	%		11.70	%		20.41	%
Interest margin - Yield - FTE			5.90	%		6.00	%		7.04	%
Interest margin - Cost - FTE			1.90	%		2.10	%		3.14	%
Net interest margin - FTE			4.01	%		3.91	%		3.89	%
Rate on interest-bearing liabilities			2.34	%		2.58	%		3.89	%
Efficiency ratio			58.85	%		56.64	%		57.98	%
EOP Employees - FTE			2,623			2,637			2,635
COMMON STOCK PERFORMANCE			9/30/2008			6/30/2008			9/30/2007
Market value-Close			$ 20.74			$ 17.65			$ 28.04
Book value			$ 16.55			$ 16.33			$ 15.85
Tangible book value			$ 11.04			$ 10.80			$ 10.25
Market/Book value			125.32	%		108.08	%		176.91	%
Market/Tangible book value			187.83	%		163.43	%		273.56	%
			Quarter Ended						Linked Quarter
NONPERFORMING ASSETS			9/30/2008			6/30/2008			$ Change			% Change
Nonaccrual loans
Florida			$ 71,125			$ 70,484			$ 641			0.9	%
Mississippi(1)			12,727			12,572			155			1.2	%
Tennessee(2)			4,012			5,216			(1,204	)		-23.1	%
Texas			17,418			7,039			10,379			n/m
Total nonaccrual loans			105,282			95,311			9,971			10.5	%
Other real estate
Florida			18,265			10,398			7,867			75.7	%
Mississippi(1)			6,062			5,258			804			15.3	%
Tennessee(2)			7,924			6,778			1,146			16.9	%
Texas			214			438			(224	)		-51.1	%
Total other real estate			32,465			22,872			9,593			41.9	%
Total nonperforming assets			$ 137,747			$ 118,183			$ 19,564			16.6	%
(1) - Mississippi includes Central and Southern Mississippi Regions
(2) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions
			Quarter Ended						Linked Quarter
LOANS PAST DUE OVER 90 DAYS			9/30/2008			6/30/2008			$ Change			% Change
Loans			$ 3,622			$ 3,056			$ 566			18.5	%
Loans HFS-Guaranteed GNMA serviced loans			20,332			15,809			4,523			28.6	%
Total loans past due over 90 days			$ 23,954			$ 18,865			$ 5,089			27.0	%
NONPERFORMING ASSETS			Quarter Ended						Year over Year
Nonaccrual loans			9/30/2008			9/30/2007			$ Change			% Change
Florida			$ 71,125			$ 19,536			$ 51,589			n/m
Mississippi(1)			12,727			16,641			(3,914	)		-23.5	%
Tennessee(2)			4,012			4,956			(944	)		-19.0	%
Texas			17,418			4,316			13,102			n/m
Total nonaccrual loans			105,282			45,449			59,833			n/m
Other real estate
Florida			18,265			1,175			17,090			n/m
Mississippi(1)			6,062			917			5,145			n/m
Tennessee(2)			7,924			3,726			4,198			n/m
Texas			214			52			162			n/m
Total other real estate			32,465			5,870			26,595			n/m
Total nonperforming assets			$ 137,747			$ 51,319			$ 86,428			n/m
			Quarter Ended						Year over Year
LOANS PAST DUE OVER 90 DAYS			9/30/2008			9/30/2007			$ Change			% Change
Loans			$ 3,622			$ 9,521			$ (5,899	)		-62.0	%
Loans HFS-Guaranteed GNMA serviced loans			20,332			9,539			10,793			n/m
Total loans past due over 90 days			$ 23,954			$ 19,060			$ 4,894			25.7	%
			Quarter Ended						Linked Quarter
ALLOWANCE FOR LOAN LOSSES			9/30/2008			6/30/2008			$ Change			% Change
Beginning Balance			$ 86,576			$ 81,818			$ 4,758			5.8	%
Provision for loan losses			14,473			31,012			(16,539	)		-53.3	%
Charge-offs			(12,732	)		(28,820	)		16,088			-55.8	%
Recoveries			2,571			2,566			5			0.2	%
Net charge-offs			(10,161	)		(26,254	)		16,093			-61.3	%
Ending Balance			$ 90,888			$ 86,576			$ 4,312			5.0	%
			Quarter Ended						Year over Year
ALLOWANCE FOR LOAN LOSSES			9/30/2008			9/30/2007			$ Change			% Change
Beginning Balance			$ 86,576			$ 70,948			$ 15,628			22.0	%
Provision for loan losses			14,473			4,999			9,474			n/m
Charge-offs			(12,732	)		(6,417	)		(6,315	)		98.4	%
Recoveries			2,571			2,838			(267	)		-9.4	%
Net charge-offs			(10,161	)		(3,579	)		(6,582	)		n/m
Ending Balance			$ 90,888			$ 72,368			$ 18,520			25.6	%
			Quarter Ended						Linked Quarter
PROVISION FOR LOAN LOSSES			9/30/2008			6/30/2008			$ Change			% Change
Florida			$ 3,167			$ 24,145			$ (20,978	)		-86.9	%
Mississippi(1)			8,476			3,667			4,809			n/m
Tennessee(2)			27			2,440			(2,413	)		-98.9	%
Texas			2,803			760			2,043			n/m
Total provision for loan losses			$ 14,473			$ 31,012			$ (16,539	)		-53.3	%
			Quarter Ended						Year over Year
PROVISION FOR LOAN LOSSES			9/30/2008			9/30/2007			$ Change			% Change
Florida			$ 3,167			$ 3,364			$ (197	)		-5.9	%
Mississippi(1)			8,476			(798	)		9,274			n/m
Tennessee(2)			27			1,153			(1,126	)		-97.7	%
Texas			2,803			1,280			1,523			n/m
Total provision for loan losses			$ 14,473			$ 4,999			$ 9,474			n/m
			Quarter Ended						Linked Quarter
NET CHARGE-OFFS			9/30/2008			6/30/2008			$ Change			% Change
Florida			$ 3,779			$ 22,064			$ (18,285	)		-82.9	%
Mississippi(1)			4,515			4,214			301			7.1	%
Tennessee(2)			1,291			48			1,243			n/m
Texas			576			(72	)		648			n/m
Total net charge-offs			$ 10,161			$ 26,254			$ (16,093	)		-61.3	%
			Quarter Ended						Year over Year
NET CHARGE-OFFS			9/30/2008			9/30/2007			$ Change			% Change
Florida			$ 3,779			$ 799			$ 2,980			n/m
Mississippi(1)			4,515			2,312			2,203			95.3	%
Tennessee(2)			1,291			166			1,125			n/m
Texas			576			302			274			90.7	%
Total net charge-offs			$ 10,161			$ 3,579			$ 6,582			n/m
			Quarter Ended
CREDIT QUALITY RATIOS			9/30/2008			6/30/2008			9/30/2007
Net charge offs/average loans			0.58	%		1.49	%		0.20	%
Provision for loan losses/average loans			0.83	%		1.76	%		0.28	%
Nonperforming loans/total loans (incl LHFS)			1.53	%		1.35	%		0.64	%
Nonperforming assets/total loans (incl LHFS)			2.00	%		1.68	%		0.73	%
Nonperforming assets/total loans (incl LHFS) +ORE			1.99	%		1.67	%		0.73	%
ALL/total loans (excl LHFS)			1.35	%		1.26	%		1.05	%
ALL-commercial/total commercial loans			1.76	%		1.67	%		1.36	%
ALL-consumer/total consumer and home mortgage loans			0.64	%		0.60	%		0.58	%
ALL/nonperforming loans			86.33	%		90.84	%		159.23	%
			Quarter Ended
CAPITAL RATIOS			9/30/2008			6/30/2008			9/30/2007
EOP equity/ EOP assets			10.44	%		10.05	%		10.18	%
Average equity/average assets			10.44	%		10.29	%		10.20	%
EOP tangible equity/EOP tangible assets			7.22	%		6.88	%		6.83	%
Tier 1 leverage ratio			8.11	%		7.87	%		7.79	%
Tier 1 risk-based capital ratio			9.86	%		9.58	%		9.20	%
Total risk-based capital ratio			11.80	%		11.46	%		10.89	%
			Quarter Ended
QUARTERLY AVERAGE BALANCES			9/30/2008			6/30/2008			3/31/2008
Securities AFS-taxable			$ 822,995			$ 769,790			$ 353,079
Securities AFS-nontaxable			39,886			35,869			36,241
Securities HTM-taxable			184,001			186,047			189,604
Securities HTM-nontaxable			74,937			76,940			81,559
Total securities			1,121,819			1,068,646			660,483
Loans (including loans held for sale)			6,927,270			7,080,495			7,177,233
Fed funds sold and rev repos			17,401			30,567			22,921
Other earning assets			37,323			41,481			36,958
Total earning assets			8,103,813			8,221,189			7,897,595
Allowance for loan losses			(88,643	)		(82,962	)		(80,998	)
Cash and due from banks			246,515			253,545			259,392
Other assets			810,449			782,986			775,722
Total assets			$ 9,072,134			$ 9,174,758			$ 8,851,711
Interest-bearing demand deposits			$ 1,222,087			$ 1,258,281			$ 1,233,892
Savings deposits			1,774,188			1,867,438			1,755,048
Time deposits less than $100,000			1,532,630			1,568,802			1,577,753
Time deposits of $100,000 or more			1,108,677			1,051,716			1,030,527
Total interest-bearing deposits			5,637,582			5,746,237			5,597,220
Fed funds purchased and repos			659,312			618,227			417,338
Short-term borrowings			156,880			202,778			252,234
Subordinated notes			49,728			49,720			49,712
Junior subordinated debt securities			70,104			70,104			70,104
Total interest-bearing liabilities			6,573,606			6,687,066			6,386,608
Noninterest-bearing deposits			1,415,402			1,409,371			1,390,843
Other liabilities			136,229			134,237			141,741
Shareholders' equity			946,897			944,084			932,519
Total liabilities and equity			$ 9,072,134			$ 9,174,758			$ 8,851,711
						Quarter Ended
QUARTERLY AVERAGE BALANCES						12/31/2007			9/30/2007
Securities AFS-taxable						$ 435,438			$ 525,858
Securities AFS-nontaxable						46,898			48,818
Securities HTM-taxable						192,878			194,356
Securities HTM-nontaxable						82,963			84,767
Total securities						758,177			853,799
Loans (including loans held for sale)						7,149,243			6,970,434
Fed funds sold and rev repos						25,960			30,201
Other earning assets						41,368			33,341
Total earning assets						7,974,748			7,887,775
Allowance for loan losses						(73,659	)		(70,950	)
Cash and due from banks						257,319			260,997
Other assets						765,939			759,626
Total assets						$ 8,924,347			$ 8,837,448
Interest-bearing demand deposits						$ 1,160,823			$ 1,166,548
Savings deposits						1,608,125			1,671,993
Time deposits less than $100,000						1,570,687			1,575,320
Time deposits of $100,000 or more						1,058,165			1,037,785
Total interest-bearing deposits						5,397,800			5,451,646
Fed funds purchased and repos						517,424			491,488
Short-term borrowings						413,676			314,264
Subordinated notes						49,703			49,696
Junior subordinated debt securities						70,104			70,104
Total interest-bearing liabilities						6,448,707			6,377,198
Noninterest-bearing deposits						1,419,364			1,423,745
Other liabilities						137,197			135,469
Shareholders' equity						919,079			901,036
Total liabilities and equity						$ 8,924,347			$ 8,837,448
						Nine Months Ended
QUARTERLY AVERAGE BALANCES						9/30/2008			9/30/2007
Securities AFS-taxable						$ 649,258			$ 620,614
Securities AFS-nontaxable						37,341			52,065
Securities HTM-taxable						186,542			196,341
Securities HTM-nontaxable						77,802			87,063
Total securities						950,943			956,083
Loans (including loans held for sale)						7,061,176			6,807,184
Fed funds sold and rev repos						23,607			45,868
Other earning assets						38,583			35,706
Total earning assets						8,074,309			7,844,841
Allowance for loan losses						(84,217	)		(71,929	)
Cash and due from banks						253,127			297,154
Other assets						789,792			749,314
Total assets						$ 9,033,011			$ 8,819,380
Interest-bearing demand deposits						$ 1,238,029			$ 1,195,398
Savings deposits						1,798,801			1,742,163
Time deposits less than $100,000						1,559,629			1,601,783
Time deposits of $100,000 or more						1,063,805			1,022,356
Total interest-bearing deposits						5,660,264			5,561,700
Fed funds purchased and repos						565,304			423,853
Short-term borrowings						203,792			220,381
Subordinated notes						49,720			49,688
Junior subordinated debt securities						70,104			70,104
Total interest-bearing liabilities						6,549,184			6,325,726
Noninterest-bearing deposits						1,405,244			1,467,671
Other liabilities						137,395			127,900
Shareholders' equity						941,188			898,083
Total liabilities and equity						$ 9,033,011			$ 8,819,380
PERIOD END BALANCES			9/30/2008			6/30/2008			3/31/2008
Cash and due from banks			$ 235,016			$ 296,628			$ 290,200
Fed funds sold and rev repos			14,782			23,901			16,022
Securities available for sale			907,629			908,949			585,746
Securities held to maturity			256,323			260,741			267,315
Loans held for sale			154,162			184,858			198,245
Loans			6,740,730			6,859,375			7,012,034
Allowance for loan losses			(90,888	)		(86,576	)		(81,818	)
Net Loans			6,649,842			6,772,799			6,930,216
Premises and equipment, net			156,298			154,026			151,469
Mortgage servicing rights			78,550			76,209			59,047
Goodwill			291,145			291,145			291,210
Identifiable intangible assets			24,887			25,958			27,030
Other assets			317,639			319,835			280,653
Total assets			$ 9,086,273			$ 9,315,049			$ 9,097,153
Deposits:
Noninterest-bearing			$ 1,526,374			$ 1,443,553			$ 1,475,976
Interest-bearing			5,411,304			5,680,130			5,868,359
Total deposits			6,937,678			7,123,683			7,344,335
Fed funds purchased and repos			592,818			748,137			433,431
Short-term borrowings			369,037			260,812			93,453
Subordinated notes			49,733			49,725			49,717
Junior subordinated debt securities			70,104			70,104			70,104
Other liabilities			117,905			126,703			168,772
Total liabilities			8,137,275			8,379,164			8,159,812
Common stock			11,944			11,938			11,938
Capital surplus			128,617			126,881			126,003
Retained earnings			824,768			814,674			810,369
Accum other comprehensive
loss, net of tax			(16,331	)		(17,608	)		(10,969	)
Total shareholders' equity			948,998			935,885			937,341
Total liabilities and equity			$ 9,086,273			$ 9,315,049			$ 9,097,153
PERIOD END BALANCES						12/31/2007			9/30/2007
Cash and due from banks						$ 292,983			$ 306,107
Fed funds sold and rev repos						17,997			28,625
Securities available for sale						442,345			519,920
Securities held to maturity						275,096			278,385
Loans held for sale						147,508			133,693
Loans						7,040,792			6,917,541
Allowance for loan losses						(79,851	)		(72,368	)
Net Loans						6,960,941			6,845,173
Premises and equipment, net						151,680			146,630
Mortgage servicing rights						67,192			73,253
Goodwill						291,177			291,177
Identifiable intangible assets						28,102			29,313
Other assets						291,781			258,711
Total assets						$ 8,966,802			$ 8,910,987
Deposits:
Noninterest-bearing						$ 1,477,171			$ 1,435,231
Interest-bearing						5,392,101			5,467,221
Total deposits						6,869,272			6,902,452
Fed funds purchased and repos						460,763			525,142
Short-term borrowings						474,354			340,598
Subordinated notes						49,709			49,701
Junior subordinated debt securities						70,104			70,104
Other liabilities						122,964			115,453
Total liabilities						8,047,166			8,003,450
Common stock						11,933			11,933
Capital surplus						124,161			123,227
Retained earnings						797,993			787,356
Accum other comprehensive
loss, net of tax						(14,451	)		(14,979	)
Total shareholders' equity						919,636			907,537
Total liabilities and equity						$ 8,966,802			$ 8,910,987
			Quarter Ended
INCOME STATEMENTS			9/30/2008			6/30/2008			3/31/2008
Interest and fees on loans-FTE			$ 105,706			$ 109,023			$ 119,641
Interest on securities-taxable			12,117			11,079			5,857
Interest on securities-tax exempt-FTE			1,946			1,943			2,086
Interest on fed funds sold and rev repos			98			168			179
Other interest income			407			475			572
Total interest income-FTE			120,274			122,688			128,335
Interest on deposits			32,860			36,881			43,363
Interest on fed funds pch and repos			3,123			3,019			3,073
Other interest expense			2,653			2,923			4,829
Total interest expense			38,636			42,823			51,265
Net interest income-FTE			81,638			79,865			77,070
Provision for loan losses			14,473			31,012			14,243
Net interest income after provision-FTE			67,165			48,853			62,827
Service charges on deposit accounts			13,886			13,223			12,564
Insurance commissions			9,007			8,394			8,256
Wealth management			6,788			7,031			7,198
General banking - other			5,813			6,053			5,788
Mortgage banking, net			4,323			6,708			11,056
Other, net			2,131			6,999			3,221
Nonint inc-excl sec gains, net			41,948			48,408			48,083
Security gains, net			2			58			433
Total noninterest income			41,950			48,466			48,516
Salaries and employee benefits			42,859			42,771			43,584
Services and fees			9,785			9,526			9,430
Net occupancy-premises			5,153			4,850			4,801
Equipment expense			4,231			4,144			4,074
Other expense			10,706			8,323			7,937
Total noninterest expense			72,734			69,614			69,826
Income before income taxes and tax eq adj			36,381			27,705			41,517
Tax equivalent adjustment			2,242			2,247			2,321
Income before income taxes			34,139			25,458			39,196
Income taxes			10,785			7,906			13,017
Net income			$ 23,354			$ 17,552			$ 26,179
			Quarter Ended
Per Share Data			9/30/2008			6/30/2008			3/31/2008
Earnings per share - basic			$ 0.41			$ 0.31			$ 0.46
Earnings per share - diluted			$ 0.41			$ 0.31			$ 0.46
Dividends per share			$ 0.23			$ 0.23			$ 0.23
Weighted average shares outstanding
Basic			57,298,710			57,296,449			57,283,240
Diluted			57,337,342			57,335,393			57,312,428
Period end shares outstanding			57,324,627			57,296,449			57,296,449
			Quarter Ended
OTHER FINANCIAL DATA			9/30/2008			6/30/2008			3/31/2008
ROA			1.02	%		0.77	%		1.19	%
ROE			9.81	%		7.48	%		11.29	%
Return on average tangible equity			15.16	%		11.70	%		17.59	%
Interest margin - Yield - FTE			5.90	%		6.00	%		6.54	%
Interest margin - Cost - FTE			1.90	%		2.10	%		2.61	%
Net interest margin - FTE			4.01	%		3.91	%		3.92	%
Rate on interest-bearing liabilities			2.34	%		2.58	%		3.23	%
Efficiency ratio			58.85	%		56.64	%		56.64	%
EOP Employees - FTE			2,623			2,637			2,627
COMMON STOCK PERFORMANCE			9/30/2008			6/30/2008			3/31/2008
Market value-Close			$ 20.74			$ 17.65			$ 22.28
Book value			$ 16.55			$ 16.33			$ 16.36
Tangible book value			$ 11.04			$ 10.80			$ 10.81
Market/Book value			125.32	%		108.08	%		136.19	%
Market/Tangible book value			187.83	%		163.43	%		206.20	%
						Quarter Ended
INCOME STATEMENTS						12/31/2007			9/30/2007
Interest and fees on loans-FTE						$ 133,088			$ 129,394
Interest on securities-taxable						6,505			7,181
Interest on securities-tax exempt-FTE						2,352			2,422
Interest on fed funds sold and rev repos						317			397
Other interest income						501			482
Total interest income-FTE						142,763			139,876
Interest on deposits						47,911			50,423
Interest on fed funds pch and repos						5,499			5,898
Other interest expense						7,055			6,186
Total interest expense						60,465			62,507
Net interest income-FTE						82,298			77,369
Provision for loan losses						17,001			4,999
Net interest income after provision-FTE						65,297			72,370
Service charges on deposit accounts						13,908			13,849
Insurance commissions						7,630			8,983
Wealth management						6,969			6,507
General banking - other						6,177			6,111
Mortgage banking, net						4,967			2,503
Other, net						2,604			3,593
Nonint inc-excl sec gains, net						42,255			41,546
Security gains, net						2			23
Total noninterest income						42,257			41,569
Salaries and employee benefits						42,446			42,257
Services and fees						9,375			9,285
Net occupancy-premises						4,716			4,753
Equipment expense						4,165			3,922
Other expense						9,020			8,271
Total noninterest expense						69,722			68,488
Income before income taxes and tax eq adj						37,832			45,451
Tax equivalent adjustment						2,375			2,283
Income before income taxes						35,457			43,168
Income taxes						11,628			14,087
Net income						$ 23,829			$ 29,081
						Quarter Ended
Per Share Data						12/31/2007			9/30/2007
Earnings per share - basic						$ 0.42			$ 0.51
Earnings per share - diluted						$ 0.42			$ 0.51
Dividends per share						$ 0.23			$ 0.22
Weighted average shares outstanding
Basic						57,272,408			57,267,119
Diluted						57,341,472			57,526,573
Period end shares outstanding						57,272,408			57,272,408
						Quarter Ended
OTHER FINANCIAL DATA						12/31/2007			9/30/2007
ROA						1.06	%		1.31	%
ROE						10.29	%		12.80	%
Return on average tangible equity						16.28	%		20.41	%
Interest margin - Yield - FTE						6.94	%		7.04	%
Interest margin - Cost - FTE						3.01	%		3.14	%
Net interest margin - FTE						3.93	%		3.89	%
Rate on interest-bearing liabilities						3.72	%		3.89	%
Efficiency ratio						56.80	%		57.98	%
EOP Employees - FTE						2,612			2,635
COMMON STOCK PERFORMANCE						12/31/2007			9/30/2007
Market value-Close						$ 25.36			$ 28.04
Book value						$ 16.06			$ 15.85
Tangible book value						$ 10.48			$ 10.25
Market/Book value						157.91	%		176.91	%
Market/Tangible book value						241.98	%		273.56	%
						Nine Months Ended
INCOME STATEMENTS						9/30/2008			9/30/2007
Interest and fees on loans-FTE						$ 334,370			$ 373,583
Interest on securities-taxable						29,053			25,279
Interest on securities-tax exempt-FTE						5,975			7,591
Interest on fed funds sold and rev repos						445			1,830
Other interest income						1,454			1,615
Total interest income-FTE						371,297			409,898
Interest on deposits						113,104			152,464
Interest on fed funds pch and repos						9,215			14,725
Other interest expense						10,405			14,706
Total interest expense						132,724			181,895
Net interest income-FTE						238,573			228,003
Provision for loan losses						59,728			6,783
Net interest income after provision-FTE						178,845			221,220
Service charges on deposit accounts						39,673			40,271
Insurance commissions						25,657			27,656
Wealth management						21,017			18,786
General banking - other						17,654			18,699
Mortgage banking, net						22,087			7,057
Other, net						12,351			7,611
Nonint inc-excl sec gains, net						138,439			120,080
Security gains, net						493			110
Total noninterest income						138,932			120,190
Salaries and employee benefits						129,214			128,276
Services and fees						28,741			27,884
Net occupancy-premises						14,804			13,801
Equipment expense						12,449			11,874
Other expense						26,966			24,892
Total noninterest expense						212,174			206,727
Income before income taxes and tax eq adj						105,603			134,683
Tax equivalent adjustment						6,810			7,143
Income before income taxes						98,793			127,540
Income taxes						31,708			42,774
Net income						$ 67,085			$ 84,766
						Nine Months Ended
Per Share Data						9/30/2008			9/30/2007
Earnings per share - basic						$ 1.17			$ 1.47
Earnings per share - diluted						$ 1.17			$ 1.46
Dividends per share						$ 0.69			$ 0.66
Weighted average shares outstanding
Basic						57,292,821			57,856,420
Diluted						57,326,007			58,142,830
Period end shares outstanding						57,324,627			57,272,408
						Nine Months Ended
OTHER FINANCIAL DATA						9/30/2008			9/30/2007
ROA						0.99	%		1.29	%
ROE						9.52	%		12.62	%
Return on average tangible equity						14.80	%		20.19	%
Interest margin - Yield - FTE						6.14	%		6.99	%
Interest margin - Cost - FTE						2.20	%		3.10	%
Net interest margin - FTE						3.95	%		3.89	%
Rate on interest-bearing liabilities						2.71	%		3.84	%
Efficiency ratio						57.38	%		59.60	%
			Quarter Ended
NONPERFORMING ASSETS			9/30/2008			6/30/2008			3/31/2008
Nonaccrual loans
Florida			$ 71,125			$ 70,484			$ 49,654
Mississippi(1)			12,727			12,572			14,583
Tennessee(2)			4,012			5,216			6,550
Texas			17,418			7,039			7,207
Total nonaccrual loans			105,282			95,311			77,994
Other real estate
Florida			18,265			10,398			1,067
Mississippi(1)			6,062			5,258			1,741
Tennessee(2)			7,924			6,778			6,634
Texas			214			438			146
Total other real estate			32,465			22,872			9,588
Total nonperforming assets			$ 137,747			$ 118,183			$ 87,582
			Quarter Ended
LOANS PAST DUE OVER 90 DAYS			9/30/2008			6/30/2008			3/31/2008
Loans			$ 3,622			$ 3,056			$ 4,986
Loans HFS-Guaranteed GNMA serviced loans			20,332			15,809			15,868
Total loans past due over 90 days			$ 23,954			$ 18,865			$ 20,854
						Quarter Ended
NONPERFORMING ASSETS						12/31/2007			9/30/2007
Nonaccrual loans
Florida						$ 43,787			$ 19,536
Mississippi(1)						13,723			16,641
Tennessee(2)						4,431			4,956
Texas						3,232			4,316
Total nonaccrual loans						65,173			45,449
Other real estate
Florida						995			1,175
Mississippi(1)						1,123			917
Tennessee(2)						6,084			3,726
Texas						146			52
Total other real estate						8,348			5,870
Total nonperforming assets						$ 73,521			$ 51,319
						Quarter Ended
LOANS PAST DUE OVER 90 DAYS						12/31/2007			9/30/2007
Loans						$ 4,853			$ 9,521
Loans HFS-Guaranteed GNMA serviced loans						11,847			9,539
Total loans past due over 90 days						$ 16,700			$ 19,060
			Quarter Ended
ALLOWANCE FOR LOAN LOSSES			9/30/2008			6/30/2008			3/31/2008
Beginning Balance			$ 86,576			$ 81,818			$ 79,851
Provision for loan losses			14,473			31,012			14,243
Charge-offs			(12,732	)		(28,820	)		(15,176	)
Recoveries			2,571			2,566			2,900
Net charge-offs			(10,161	)		(26,254	)		(12,276	)
Ending Balance			$ 90,888			$ 86,576			$ 81,818
						Quarter Ended
ALLOWANCE FOR LOAN LOSSES						12/31/2007			9/30/2007
Beginning Balance						$ 72,368			$ 70,948
Provision for loan losses						17,001			4,999
Charge-offs						(11,904	)		(6,417	)
Recoveries						2,386			2,838
Net charge-offs						(9,518	)		(3,579	)
Ending Balance						$ 79,851			$ 72,368
						Nine Months Ended
ALLOWANCE FOR LOAN LOSSES						9/30/2008			9/30/2007
Beginning Balance						$ 79,851			$ 72,098
Provision for loan losses						59,728			6,783
Charge-offs						(56,728	)		(14,886	)
Recoveries						8,037			8,373
Net charge-offs						(48,691	)		(6,513	)
Ending Balance						$ 90,888			$ 72,368
			Quarter Ended
PROVISION FOR LOAN LOSSES			9/30/2008			6/30/2008			3/31/2008
Florida			$ 3,167			$ 24,145			$ 9,557
Mississippi(1)			8,476			3,667			2,807
Tennessee(2)			27			2,440			779
Texas			2,803			760			1,100
Total provision for loan losses			$ 14,473			$ 31,012			$ 14,243
						Quarter Ended
PROVISION FOR LOAN LOSSES						12/31/2007			9/30/2007
Florida						$ 12,523			$ 3,364
Mississippi(1)						2,724			(798	)
Tennessee(2)						1,056			1,153
Texas						698			1,280
Total provision for loan losses						$ 17,001			$ 4,999
						Nine Months Ended
PROVISION FOR LOAN LOSSES						9/30/2008			9/30/2007
Florida						$ 36,869			$ 3,940
Mississippi(1)						14,950			764
Tennessee(2)						3,246			781
Texas						4,663			1,298
Total provision for loan losses						$ 59,728			$ 6,783
			Quarter Ended
NET CHARGE-OFFS			9/30/2008			6/30/2008			3/31/2008
Florida			$ 3,779			$ 22,064			$ 9,688
Mississippi(1)			4,515			4,214			1,574
Tennessee(2)			1,291			48			186
Texas			576			(72	)		828
Total net charge-offs			$ 10,161			$ 26,254			$ 12,276
						Quarter Ended
NET CHARGE-OFFS						12/31/2007			9/30/2007
Florida						$ 3,665			$ 799
Mississippi(1)						3,999			2,312
Tennessee(2)						1,284			166
Texas						570			302
Total net charge-offs						$ 9,518			$ 3,579
						Nine Months Ended
NET CHARGE-OFFS						9/30/2008			9/30/2007
Florida						$ 35,531			$ 880
Mississippi(1)						10,303			4,738
Tennessee(2)						1,525			216
Texas						1,332			679
Total net charge-offs						$ 48,691			$ 6,513
			Quarter Ended
CREDIT QUALITY RATIOS			9/30/2008			6/30/2008			3/31/2008
Net charge offs/average loans			0.58	%		1.49	%		0.69	%
Provision for loan losses/average loans			0.83	%		1.76	%		0.80	%
Nonperforming loans/total loans (incl LHFS)			1.53	%		1.35	%		1.08	%
Nonperforming assets/total loans (incl LHFS)			2.00	%		1.68	%		1.21	%
Nonperforming assets/total loans (incl LHFS) +ORE			1.99	%		1.67	%		1.21	%
ALL/total loans (excl LHFS)			1.35	%		1.26	%		1.17	%
ALL-commercial/total commercial loans			1.76	%		1.67	%		1.52	%
ALL-consumer/total consumer and home mortgage loans			0.64	%		0.60	%		0.60	%
ALL/nonperforming loans			86.33	%		90.84	%		104.90	%
						Quarter Ended
CREDIT QUALITY RATIOS						12/31/2007			9/30/2007
Net charge offs/average loans						0.53	%		0.20	%
Provision for loan losses/average loans						0.94	%		0.28	%
Nonperforming loans/total loans (incl LHFS)						0.91	%		0.64	%
Nonperforming assets/total loans (incl LHFS)						1.02	%		0.73	%
Nonperforming assets/total loans (incl LHFS) +ORE						1.02	%		0.73	%
ALL/total loans (excl LHFS)						1.13	%		1.05	%
ALL-commercial/total commercial loans						1.48	%		1.36	%
ALL-consumer/total consumer and home mortgage loans						0.59	%		0.58	%
ALL/nonperforming loans						122.52	%		159.23	%
						Nine Months Ended
CREDIT QUALITY RATIOS						9/30/2008			9/30/2007
Net charge offs/average loans						0.92	%		0.13	%
Provision for loan losses/average loans						1.13	%		0.13	%
			Quarter Ended
CAPITAL RATIOS			9/30/2008			6/30/2008			3/31/2008
EOP equity/ EOP assets			10.44	%		10.05	%		10.30	%
Average equity/average assets			10.44	%		10.29	%		10.53	%
EOP tangible equity/EOP tangible assets			7.22	%		6.88	%		7.05	%
Tier 1 leverage ratio			8.11	%		7.87	%		8.12	%
Tier 1 risk-based capital ratio			9.86	%		9.58	%		9.42	%
Total risk-based capital ratio			11.80	%		11.46	%		11.21	%
						Quarter Ended
CAPITAL RATIOS						12/31/2007			9/30/2007
EOP equity/ EOP assets						10.26	%		10.18	%
Average equity/average assets						10.30	%		10.20	%
EOP tangible equity/EOP tangible assets						6.94	%		6.83	%
Tier 1 leverage ratio						7.86	%		7.79	%
Tier 1 risk-based capital ratio						9.17	%		9.20	%
Total risk-based capital ratio						10.93	%		10.89	%

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
September 30, 2008
($ in thousands except per share data)
(unaudited)
Note 1 – Financial Performance Non-GAAP Disclosures
Management is presenting, in the accompanying table, adjustments to net income as reported in accordance with generally accepted accounting principles resulting from significant items occurring during the periods presented.  Management believes this information will help users compare Trustmark’s current results to those of prior periods as presented in the table below.
	Quarter Ended
	9/30/2008		6/30/2008			3/31/2008
Net Income as reported-GAAP	$ 23,554		$ 17,552			$ 26,179
Adjustments (net of taxes):
Mastercard Class A Common	-		(3,308	)		-
Visa Litigation Contingency	-		-			(936	)
Correction of Accounting Error	-		-			-
Hurricane Katrina	-		-			-
	-		(3,308	)		(936	)
Net Income adjusted for specific items (Non-GAAP)
	$ 23,354		$ 14,244			$ 25,243

	Quarter Ended
	12/31/2007			9/30/2007
Net Income as reported-GAAP	$ 23,829			$ 29,081
Adjustments (net of taxes):
Mastercard Class A Common	-			-
Visa Litigation Contingency	494			-
Correction of Accounting Error	(1,989	)		-
Hurricane Katrina	-			-
	(1,495	)		-
Net Income adjusted for specific items (Non-GAAP)
	$ 22,334			$ 29,081

	Nine Months Ended
	9/30/2008			9/30/2007
Net Income as reported-GAAP	$ 67,085			$ 84,766
Adjustments (net of taxes):
Mastercard Class A Common	(3,308	)		-
Visa Litigation Contingency	(936	)		-
Correction of Accounting Error	-			-
Hurricane Katrina	-			(665	)
	(4,244	)		(665	)
Net Income adjusted for specific items (Non-GAAP)
	$ 62,841			$ 84,101

MasterCard Class A Common

During the second quarter of 2008, MasterCard offered Class B shareholders the right to convert their stock into marketable Class A shares. Trustmark exercised its right to convert its shares and sold them through a liquidation program. The conversion and sale resulted in an after-tax gain of $3.3 million.

Visa Litigation Contingency

In the first quarter of 2008, Trustmark recognized a gain of $1.5 million resulting from the Visa initial public offering. This gain more than offsets an accrual of $800 thousand that Trustmark recorded in the fourth quarter of 2007 for the Visa litigation contingency relating to the Visa USA Inc. antitrust lawsuit settlement with American Express and other pending Visa litigation (reflecting Trustmark’s share as a Visa member).

Correction of Accounting Error

Trustmark’s consolidated financial statements for the fourth quarter of 2007 included a pre-tax benefit of $3.2 million for the correction of an error relating to the amortization of deferred loan fees, which was included in interest income on loans. Trustmark’s Management as well as the Audit and Finance Committee of the Board of Directors reviewed this accounting error utilizing Securities and Exchange Commission Staff Accounting Bulletins (SAB) Nos. 99 and 108 and believe the impact of this error was not material to the 2007 or prior period consolidated financial statements.

Hurricane Katrina

In the third quarter of 2005, immediately following in the aftermath of Hurricane Katrina, Trustmark estimated possible pre-tax losses resulting from this storm of $11.7 million. Trustmark revised these estimates quarterly and any subsequent adjustments are reflected in the table above, net of taxes. At September 30, 2008, the allowance for loan losses included $364 thousand related to possible Hurricane Katrina losses.

Note 2 – Loan Composition
LOANS BY TYPE		9/30/2008			6/30/2008			3/31/2008
Loans secured by real estate:
Construction, land development and other land loans		$ 1,062,319			$ 1,158,549			$ 1,212,052
Secured by 1-4 family residential properties		1,561,024			1,633,021			1,660,148
Secured by nonfarm, nonresidential properties		1,345,624			1,300,753			1,315,449
Other real estate secured		175,877			148,588			160,373
Commercial and industrial loans		1,328,035			1,313,620			1,286,578
Consumer loans		947,113			994,475			1,056,346
Other loans		320,738			310,369			321,088
Loans		6,740,730			6,859,375			7,012,034
Allowance for loan losses		(90,888	)		(86,576	)		(81,818	)
Net Loans		$ 6,649,842			$ 6,772,799			$ 6,930,216

LOANS BY TYPE		12/31/2007			9/30/2007
Loans secured by real estate:
Construction, land development and other land loans		$ 1,194,940			$ 1,155,737
Secured by 1-4 family residential properties		1,694,757			1,756,427
Secured by nonfarm, nonresidential properties		1,325,379			1,269,625
Other real estate secured		167,610			142,505
Commercial and industrial loans		1,283,014			1,241,772
Consumer loans		1,087,337			1,068,610
Other loans		287,755			282,865
Loans		7,040,792			6,917,541
Allowance for loan losses		(79,851	)		(72,368	)
Net Loans		$ 6,960,941			$ 6,845,173

		September 30, 2008
LOAN COMPOSITION BY REGION		Total		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		$ 1,062,319		$ 301,509		$ 431,005		$ 83,454		$ 246,351
Secured by 1-4 family residential properties		1,561,024		90,790		1,262,966		175,296		31,972
Secured by nonfarm, nonresidential properties		1,345,624		176,512		740,749		211,522		216,841
Other real estate secured		175,877		12,518		131,863		13,601		17,895
Commercial and industrial loans		1,328,035		18,305		947,576		65,748		296,406
Consumer loans		947,113		3,008		900,113		31,450		12,542
Other loans		320,738		14,833		280,201		17,244		8,460
Loans		$ 6,740,730		$ 617,475		$ 4,694,473		$ 598,315		$ 830,467
CONSTRUCTION AND LAND DEVELOPMENT LOANS BY REGION
Lots		$ 130,368		$ 82,472		$ 28,021		$ 6,099		$ 13,776
Development		226,237		37,578		101,075		12,903		74,681
Unimproved land		323,041		111,548		131,937		34,337		45,219
1-4 family construction		190,603		29,265		84,537		12,832		63,969
Other construction		192,070		40,646		85,435		17,283		48,706
Construction and land development loans		$ 1,062,319		$ 301,509		$ 431,005		$ 83,454		$ 246,351

FLORIDA CREDIT QUALITY				Total Loans		Criticized Loans(1)		Classified Loans(2)		Nonaccrual Loans		Impaired Loans(3)
Construction and land development loans:
Lots				$ 82,472		$ 20,834		$ 16,222		$ 11,082		$ 5,396
Development				37,578		18,979		18,979		15,980		6,766
Unimproved land				111,548		63,831		35,213		18,314		16,637
1-4 family construction				29,265		8,818		8,818		6,590		4,368
Other construction				40,646		28,133		17,259		12,627		6,498
Construction and land development loans				301,509		140,595		96,491		64,593		39,665
Commercial, commercial real estate and consumer				315,966		31,723		20,791		6,532		289
Total Florida loans				$ 617,475		$ 172,318		$ 117,282		$ 71,125		$ 39,954

FLORIDA CREDIT QUALITY				Total Loans Less Impaired Loans		Loan Loss Reserves		Loan Loss Reserve % of Non-Impaired Loans
Construction and land development loans:
Lots				$ 77,076		$ 4,647		6.03%
Development				30,812		2,035		6.60%
Unimproved land				94,911		4,935		5.20%
1-4 family construction				24,897		906		3.64%
Other construction				34,148		2,319		6.79%
Construction and land development loans				261,844		14,842		5.67%
Commercial, commercial real estate and consumer				315,677		6,892		2.18%
Total Florida loans				$ 577,521		$ 21,734		3.76%
(1)  Criticized loans include all classified loans as defined in (2) below as well as other loans that exhibit potential credit weaknesses that, if not resolved, may ultimately result in a more severe classification.
(2)  Classified loans include those loans identified by management as exhibiting well defined credit weaknesses that may jeopardize repayment in full of the debt.
(3)  All nonaccrual loans over $1 million are individually assessed for impairment in accordance with SFAS No. 114.  Impaired loans have been determined to be collateral dependent and assessed using a fair value approach.  Fair value estimates begin with appraised values, normally from recently received and reviewed appraisals.  Appraised values are adjusted down for costs associated with asset disposal.  When a loan is deemed to be impaired, the full difference between book value and the most likely estimate of the asset’s net realizable value is charged off.

Note 3 – Mortgage Banking
Trustmark utilizes derivative instruments to offset changes in the fair value of mortgage servicing rights (MSR) attributable to changes in interest rates. Changes in the fair value of the derivative instrument are recorded in mortgage banking income, net and are offset by the changes in the fair value of MSR, as shown in the accompanying table. MSR fair values represent the effect of present value decay and the effect of changes in interest rates. Ineffectiveness of hedging MSR fair value is measured by comparing total hedge cost to the fair value of the MSR asset attributable to market changes. The impact of this strategy resulted in a net positive ineffectiveness of $0.8 million, $30 thousand, and $10.8 million for the quarters ended September 30, 2008 and 2007 and the nine months ended September 30, 2008, respectively, and net negative ineffectiveness of $0.8 million for the nine months ended September 30, 2007.
The following table illustrates the components of mortgage banking income included in noninterest income in the accompanying income statements:
		Quarter Ended
		9/30/2008			6/30/2008			3/31/2008			12/31/2007			9/30/2007
Mortgage servicing income, net		$ 4,002			$ 3,804			$ 3,747			$ 3,725			$ 3,503
Change in fair value-MSR from market changes		(903	)		13,104			(10,193	)		(8,143	)		(5,268	)
Change in fair value of derivatives		1,680			(10,453	)		17,599			10,123			5,298
Change in fair value-MSR from runoff		(2,152	)		(2,303	)		(2,430	)		(2,064	)		(2,681	)
Gain on sales of loans		1,875			2,542			1,078			1,594			1,224
Other, net		(179	)		14			1,255			(268	)		427
Mortgage banking, net		$ 4,323			$ 6,708			$ 11,056			$ 4,967			$ 2,503

			Nine Months Ended
			9/30/2008			9/30/2007
Mortgage servicing income, net			$ 11,553			$ 10,459
Change in fair value-MSR from market changes			2,008			(1,323	)
Change in fair value of derivatives			8,826			521
Change in fair value-MSR from runoff			(6,885	)		(7,279	)
Gain on sales of loans			5,495			4,065
Other, net			1,090			614
Mortgage banking, net			$ 22,087			$ 7,057

Note 4 – 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
		9/30/2008			6/30/2008			3/31/2008
Securities – Taxable		4.79	%		4.66	%		4.34	%
Securities – Nontaxable		6.74	%		6.93	%		7.12	%
Securities – Total		4.99	%		4.90	%		4.84	%
Loans		6.07	%		6.19	%		6.70	%
FF Sold & Rev Repo		2.24	%		2.21	%		3.14	%
Other Earning Assets		4.34	%		4.61	%		6.22	%
Total Earning Assets		5.90	%		6.00	%		6.54	%
Interest-bearing Deposits		2.32	%		2.58	%		3.12	%
FF Pch & Repo		1.88	%		1.96	%		2.96	%
Borrowings		3.81	%		3.64	%		5.22	%
Total Interest-bearing Liabilities		2.34	%		2.58	%		3.23	%
Net interest margin		4.01	%		3.91	%		3.92	%

		Quarter Ended
		12/31/2007			9/30/2007
Securities – Taxable		4.11	%		3.96	%
Securities – Nontaxable		7.19	%		7.19	%
Securities – Total		4.63	%		4.46	%
Loans		7.21	%		7.36	%
FF Sold & Rev Repo		4.84	%		5.22	%
Other Earning Assets		4.80	%		5.74	%
Total Earning Assets		6.94	%		7.04	%
Interest-bearing Deposits		3.52	%		3.67	%
FF Pch & Repo		4.22	%		4.76	%
Borrowings		5.25	%		5.65	%
Total Interest-bearing Liabilities		3.72	%		3.89	%
Net interest margin		3.93	%		3.89	%

			Nine Months Ended
			9/30/2008			9/30/2007
Securities – Taxable			4.64	%		4.14	%
Securities – Nontaxable			6.93	%		7.29	%
Securities – Total			4.92	%		4.60	%
Loans			6.33	%		7.34	%
FF Sold & Rev Repo			2.52	%		5.33	%
Other Earning Assets			5.03	%		6.05	%
Total Earning Assets			6.14	%		6.99	%
Interest-bearing Deposits			2.67	%		3.67	%
FF Pch & Repo			2.18	%		4.64	%
Borrowings			4.29	%		5.78	%
Total Interest-bearing Liabilities			2.71	%		3.84	%
Net interest margin			3.95	%		3.89	%

All periods prior to September 30, 2008 have been restated to include the addition of other earning assets, made up primarily of Federal Home Loan Bank and Federal Reserve Bank stock.

As discussed in Note 1, Trustmark corrected an accounting error in its consolidated financial statements resulting in a pre-tax benefit of $3.2 million for the quarter ended December 31, 2007. This error correction has been excluded in the table above. Including this error correction, Trustmark’s loan yield for the quarter ended December 31, 2007 was 7.39%, while the net interest margin for the same time period was 4.09%.