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 [phone], 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 [phone], 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)
		ÂÂ						ÂÂ			ÂÂ
									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	ÂÂ		76,940	ÂÂ		(2,003	)		-2.6	%
Total securities			1,121,819	ÂÂ		1,068,646	ÂÂ		53,173	ÂÂ		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	ÂÂ		41,481	ÂÂ		(4,158	)		-10.0	%
Total earning assets			8,103,813	ÂÂ		8,221,189	ÂÂ		(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	ÂÂ		782,986	ÂÂ		27,463	ÂÂ		3.5	%
Total assets			$ 9,072,134	ÂÂ		$ 9,174,758	ÂÂ		$ (102,624	)		-1.1	%
												ÂÂ
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	ÂÂ		1,051,716	ÂÂ		56,961	ÂÂ		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	ÂÂ		70,104	ÂÂ		-	ÂÂ		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	ÂÂ		944,084	ÂÂ		2,813	ÂÂ		0.3	%
Total liabilities and equity			$ 9,072,134	ÂÂ		$ 9,174,758	ÂÂ		$ (102,624	)		-1.1	%
												ÂÂ
n/m - percentage changes greater than +/- 100% are considered not meaningful
												ÂÂ
												ÂÂ
												ÂÂ
									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	ÂÂ		84,767	ÂÂ		(9,830	)		-11.6	%
Total securities			1,121,819	ÂÂ		853,799	ÂÂ		268,020	ÂÂ		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	ÂÂ		33,341	ÂÂ		3,982	ÂÂ		11.9	%
Total earning assets			8,103,813	ÂÂ		7,887,775	ÂÂ		216,038	ÂÂ		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	ÂÂ		759,626	ÂÂ		50,823	ÂÂ		6.7	%
Total assets			$ 9,072,134	ÂÂ		$ 8,837,448	ÂÂ		$ 234,686	ÂÂ		2.7	%
												ÂÂ
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	ÂÂ		1,037,785	ÂÂ		70,892	ÂÂ		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	ÂÂ		70,104	ÂÂ		-	ÂÂ		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	ÂÂ		901,036	ÂÂ		45,861	ÂÂ		5.1	%
Total liabilities and equity			$ 9,072,134	ÂÂ		$ 8,837,448	ÂÂ		$ 234,686	ÂÂ		2.7	%
												ÂÂ
												ÂÂ
												ÂÂ
									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	ÂÂ		319,835	ÂÂ		(2,196	)		-0.7	%
Total assets			$ 9,086,273	ÂÂ		$ 9,315,049	ÂÂ		$ (228,776	)		-2.5	%
												ÂÂ
Deposits:
Noninterest-bearing			$ 1,526,374			$ 1,443,553			$ 82,821			5.7	%
Interest-bearing			5,411,304	ÂÂ		5,680,130	ÂÂ		(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	ÂÂ		126,703	ÂÂ		(8,798	)		-6.9	%
Total liabilities			8,137,275	ÂÂ		8,379,164	ÂÂ		(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	ÂÂ		-7.3	%
Total shareholders' equity			948,998	ÂÂ		935,885	ÂÂ		13,113	ÂÂ		1.4	%
Total liabilities and equity			$ 9,086,273	ÂÂ		$ 9,315,049	ÂÂ		$ (228,776	)		-2.5	%
												ÂÂ
												ÂÂ
												ÂÂ
									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	ÂÂ		258,711	ÂÂ		58,928	ÂÂ		22.8	%
Total assets			$ 9,086,273	ÂÂ		$ 8,910,987	ÂÂ		$ 175,286	ÂÂ		2.0	%
												ÂÂ
Deposits:
Noninterest-bearing			$ 1,526,374			$ 1,435,231			$ 91,143			6.4	%
Interest-bearing			5,411,304	ÂÂ		5,467,221	ÂÂ		(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	ÂÂ		115,453	ÂÂ		2,452	ÂÂ		2.1	%
Total liabilities			8,137,275	ÂÂ		8,003,450	ÂÂ		133,825	ÂÂ		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	ÂÂ		907,537	ÂÂ		41,461	ÂÂ		4.6	%
Total liabilities and equity			$ 9,086,273	ÂÂ		$ 8,910,987	ÂÂ		$ 175,286	ÂÂ		2.0	%
												ÂÂ
												ÂÂ
			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	ÂÂ		475	ÂÂ		(68	)		-14.3	%
Total interest income-FTE			120,274	ÂÂ		122,688	ÂÂ		(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	ÂÂ		2,923	ÂÂ		(270	)		-9.2	%
Total interest expense			38,636	ÂÂ		42,823	ÂÂ		(4,187	)		-9.8	%
Net interest income-FTE			81,638			79,865			1,773			2.2	%
Provision for loan losses			14,473	ÂÂ		31,012	ÂÂ		(16,539	)		-53.3	%
Net interest income after provision-FTE			67,165	ÂÂ		48,853	ÂÂ		18,312	ÂÂ		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	ÂÂ		6,999	ÂÂ		(4,868	)		-69.6	%
Nonint inc-excl sec gains, net			41,948			48,408			(6,460	)		-13.3	%
Security gains, net			2	ÂÂ		58	ÂÂ		(56	)		-96.6	%
Total noninterest income			41,950	ÂÂ		48,466	ÂÂ		(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	ÂÂ		8,323	ÂÂ		2,383	ÂÂ		28.6	%
Total noninterest expense			72,734	ÂÂ		69,614	ÂÂ		3,120	ÂÂ		4.5	%
Income before income taxes and tax eq adj			36,381			27,705			8,676			31.3	%
Tax equivalent adjustment			2,242	ÂÂ		2,247	ÂÂ		(5	)		-0.2	%
Income before income taxes			34,139			25,458			8,681			34.1	%
Income taxes			10,785	ÂÂ		7,906	ÂÂ		2,879	ÂÂ		36.4	%
Net income			$ 23,354	ÂÂ		$ 17,552	ÂÂ		$ 5,802	ÂÂ		33.1	%
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												ÂÂ
			Quarter Ended						Linked Quarter
			9/30/2008			6/30/2008			$ Change			% Change
Per Share Data
Earnings per share - basic			$ 0.41	ÂÂ		$ 0.31	ÂÂ		$ 0.10	ÂÂ		32.3	%
												ÂÂ
Earnings per share - diluted			$ 0.41	ÂÂ		$ 0.31	ÂÂ		$ 0.10	ÂÂ		32.3	%
												ÂÂ
Dividends per share			$ 0.23	ÂÂ		$ 0.23	ÂÂ		$ -	ÂÂ		0.0	%
												ÂÂ
Weighted average shares outstanding
Basic			57,298,710	ÂÂ		57,296,449	ÂÂ
												ÂÂ
Diluted			57,337,342	ÂÂ		57,335,393	ÂÂ
												ÂÂ
Period end shares outstanding			57,324,627	ÂÂ		57,296,449	ÂÂ
												ÂÂ
												ÂÂ
												ÂÂ
			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	ÂÂ		482	ÂÂ		(75	)		-15.6	%
Total interest income-FTE			120,274	ÂÂ		139,876	ÂÂ		(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	ÂÂ		6,186	ÂÂ		(3,533	)		-57.1	%
Total interest expense			38,636	ÂÂ		62,507	ÂÂ		(23,871	)		-38.2	%
Net interest income-FTE			81,638			77,369			4,269			5.5	%
Provision for loan losses			14,473	ÂÂ		4,999	ÂÂ		9,474	ÂÂ		n/m
Net interest income after provision-FTE			67,165	ÂÂ		72,370	ÂÂ		(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	ÂÂ		3,593	ÂÂ		(1,462	)		-40.7	%
Nonint inc-excl sec gains, net			41,948			41,546			402			1.0	%
Security gains, net			2	ÂÂ		23	ÂÂ		(21	)		-91.3	%
Total noninterest income			41,950	ÂÂ		41,569	ÂÂ		381	ÂÂ		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	ÂÂ		8,271	ÂÂ		2,435	ÂÂ		29.4	%
Total noninterest expense			72,734	ÂÂ		68,488	ÂÂ		4,246	ÂÂ		6.2	%
Income before income taxes and tax eq adj			36,381			45,451			(9,070	)		-20.0	%
Tax equivalent adjustment			2,242	ÂÂ		2,283	ÂÂ		(41	)		-1.8	%
Income before income taxes			34,139			43,168			(9,029	)		-20.9	%
Income taxes			10,785	ÂÂ		14,087	ÂÂ		(3,302	)		-23.4	%
Net income			$ 23,354	ÂÂ		$ 29,081	ÂÂ		$ (5,727	)		-19.7	%
												ÂÂ
												ÂÂ
												ÂÂ
			Quarter Ended						Year over Year
			9/30/2008			9/30/2007			$ Change			% Change
Per Share Data
Earnings per share - basic			$ 0.41	ÂÂ		$ 0.51	ÂÂ		$ (0.10	)		-19.6	%
												ÂÂ
Earnings per share - diluted			$ 0.41	ÂÂ		$ 0.51	ÂÂ		$ (0.10	)		-19.6	%
												ÂÂ
Dividends per share			$ 0.23	ÂÂ		$ 0.22	ÂÂ		$ 0.01	ÂÂ		4.5	%
												ÂÂ
Weighted average shares outstanding
Basic			57,298,710	ÂÂ		57,267,119	ÂÂ
												ÂÂ
Diluted			57,337,342	ÂÂ		57,526,573	ÂÂ
												ÂÂ
Period end shares outstanding			57,324,627	ÂÂ		57,272,408	ÂÂ

ÂÂ		ÂÂ	Quarter Ended								ÂÂ
OTHER FINANCIAL DATA			9/30/2008		ÂÂ	6/30/2008		ÂÂ	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
												ÂÂ
												ÂÂ
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	%
												ÂÂ
												ÂÂ
			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	ÂÂ		7,039	ÂÂ		10,379	ÂÂ		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	ÂÂ		438	ÂÂ		(224	)		-51.1	%
Total other real estate			32,465	ÂÂ		22,872	ÂÂ		9,593	ÂÂ		41.9	%
Total nonperforming assets			$ 137,747	ÂÂ		$ 118,183	ÂÂ		$ 19,564	ÂÂ		16.6	%
												ÂÂ
(1) - Mississippi includes Central and Southern Mississippi Regions
(2) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions
												ÂÂ
												ÂÂ
												ÂÂ
			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	ÂÂ		15,809	ÂÂ		4,523	ÂÂ		28.6	%
Total loans past due over 90 days			$ 23,954	ÂÂ		$ 18,865	ÂÂ		$ 5,089	ÂÂ		27.0	%
												ÂÂ
												ÂÂ
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	ÂÂ		4,316	ÂÂ		13,102	ÂÂ		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	ÂÂ		52	ÂÂ		162	ÂÂ		n/m
Total other real estate			32,465	ÂÂ		5,870	ÂÂ		26,595	ÂÂ		n/m
Total nonperforming assets			$ 137,747	ÂÂ		$ 51,319	ÂÂ		$ 86,428	ÂÂ		n/m
												ÂÂ
												ÂÂ
			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	ÂÂ		9,539	ÂÂ		10,793	ÂÂ		n/m
Total loans past due over 90 days			$ 23,954	ÂÂ		$ 19,060	ÂÂ		$ 4,894	ÂÂ		25.7	%
												ÂÂ
												ÂÂ
			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	ÂÂ		2,566	ÂÂ		5	ÂÂ		0.2	%
Net charge-offs			(10,161	)		(26,254	)		16,093	ÂÂ		-61.3	%
Ending Balance			$ 90,888	ÂÂ		$ 86,576	ÂÂ		$ 4,312	ÂÂ		5.0	%
												ÂÂ
												ÂÂ
			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	ÂÂ		2,838	ÂÂ		(267	)		-9.4	%
Net charge-offs			(10,161	)		(3,579	)		(6,582	)		n/m
Ending Balance			$ 90,888	ÂÂ		$ 72,368	ÂÂ		$ 18,520	ÂÂ		25.6	%
												ÂÂ
												ÂÂ
			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	ÂÂ		760	ÂÂ		2,043	ÂÂ		n/m
Total provision for loan losses			$ 14,473	ÂÂ		$ 31,012	ÂÂ		$ (16,539	)		-53.3	%
												ÂÂ
												ÂÂ
			Quarter Ended						Year over Year
PROVISION FOR LOAN LOSSES			9/30/2008			9/30/2007			$ Change	ÂÂ		% 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	ÂÂ		1,280	ÂÂ		1,523	ÂÂ		n/m
Total provision for loan losses			$ 14,473	ÂÂ		$ 4,999	ÂÂ		$ 9,474	ÂÂ		n/m
												ÂÂ
												ÂÂ
			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	ÂÂ		(72	)		648	ÂÂ		n/m
Total net charge-offs			$ 10,161	ÂÂ		$ 26,254	ÂÂ		$ (16,093	)		-61.3	%
												ÂÂ
												ÂÂ
			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	ÂÂ		302	ÂÂ		274	ÂÂ		90.7	%
Total net charge-offs			$ 10,161	ÂÂ		$ 3,579	ÂÂ		$ 6,582	ÂÂ		n/m
												ÂÂ
												ÂÂ
			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	%
												ÂÂ
												ÂÂ
			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	%
												ÂÂ
												ÂÂ
			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	ÂÂ		76,940	ÂÂ		81,559	ÂÂ
Total securities			1,121,819	ÂÂ		1,068,646	ÂÂ		660,483	ÂÂ
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	ÂÂ		41,481	ÂÂ		36,958	ÂÂ
Total earning assets			8,103,813	ÂÂ		8,221,189	ÂÂ		7,897,595	ÂÂ
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	ÂÂ		782,986	ÂÂ		775,722	ÂÂ
Total assets			$ 9,072,134	ÂÂ		$ 9,174,758	ÂÂ		$ 8,851,711	ÂÂ
												ÂÂ
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	ÂÂ		1,051,716	ÂÂ		1,030,527	ÂÂ
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	ÂÂ		70,104	ÂÂ		70,104	ÂÂ
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	ÂÂ		944,084	ÂÂ		932,519	ÂÂ
Total liabilities and equity			$ 9,072,134	ÂÂ		$ 9,174,758	ÂÂ		$ 8,851,711	ÂÂ
												ÂÂ
												ÂÂ
						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	ÂÂ		84,767	ÂÂ
Total securities						758,177	ÂÂ		853,799	ÂÂ
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	ÂÂ		33,341	ÂÂ
Total earning assets						7,974,748	ÂÂ		7,887,775	ÂÂ
Allowance for loan losses						(73,659	)		(70,950	)
Cash and due from banks						257,319			260,997
Other assets						765,939	ÂÂ		759,626	ÂÂ
Total assets						$ 8,924,347	ÂÂ		$ 8,837,448	ÂÂ
												ÂÂ
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	ÂÂ		1,037,785	ÂÂ
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	ÂÂ		70,104	ÂÂ
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	ÂÂ		901,036	ÂÂ
Total liabilities and equity						$ 8,924,347	ÂÂ		$ 8,837,448	ÂÂ
												ÂÂ
												ÂÂ
						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	ÂÂ		87,063	ÂÂ
Total securities						950,943	ÂÂ		956,083	ÂÂ
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	ÂÂ		35,706	ÂÂ
Total earning assets						8,074,309	ÂÂ		7,844,841	ÂÂ
Allowance for loan losses						(84,217	)		(71,929	)
Cash and due from banks						253,127			297,154
Other assets						789,792	ÂÂ		749,314	ÂÂ
Total assets						$ 9,033,011	ÂÂ		$ 8,819,380	ÂÂ
												ÂÂ
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	ÂÂ		1,022,356	ÂÂ
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	ÂÂ		70,104	ÂÂ
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	ÂÂ		898,083	ÂÂ
Total liabilities and equity						$ 9,033,011	ÂÂ		$ 8,819,380	ÂÂ
												ÂÂ
												ÂÂ
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	ÂÂ		319,835	ÂÂ		280,653	ÂÂ
Total assets			$ 9,086,273	ÂÂ		$ 9,315,049	ÂÂ		$ 9,097,153	ÂÂ
												ÂÂ
Deposits:
Noninterest-bearing			$ 1,526,374			$ 1,443,553			$ 1,475,976
Interest-bearing			5,411,304	ÂÂ		5,680,130	ÂÂ		5,868,359	ÂÂ
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	ÂÂ		126,703	ÂÂ		168,772	ÂÂ
Total liabilities			8,137,275	ÂÂ		8,379,164	ÂÂ		8,159,812	ÂÂ
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	ÂÂ		935,885	ÂÂ		937,341	ÂÂ
Total liabilities and equity			$ 9,086,273	ÂÂ		$ 9,315,049	ÂÂ		$ 9,097,153	ÂÂ
												ÂÂ
												ÂÂ
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	ÂÂ		258,711	ÂÂ
Total assets						$ 8,966,802	ÂÂ		$ 8,910,987	ÂÂ
												ÂÂ
Deposits:
Noninterest-bearing						$ 1,477,171			$ 1,435,231
Interest-bearing						5,392,101	ÂÂ		5,467,221	ÂÂ
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	ÂÂ		115,453	ÂÂ
Total liabilities						8,047,166	ÂÂ		8,003,450	ÂÂ
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	ÂÂ		907,537	ÂÂ
Total liabilities and equity						$ 8,966,802	ÂÂ		$ 8,910,987	ÂÂ
												ÂÂ
												ÂÂ
			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	ÂÂ		475	ÂÂ		572	ÂÂ
Total interest income-FTE			120,274	ÂÂ		122,688	ÂÂ		128,335	ÂÂ
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	ÂÂ		2,923	ÂÂ		4,829	ÂÂ
Total interest expense			38,636	ÂÂ		42,823	ÂÂ		51,265	ÂÂ
Net interest income-FTE			81,638			79,865			77,070
Provision for loan losses			14,473	ÂÂ		31,012	ÂÂ		14,243	ÂÂ
Net interest income after provision-FTE			67,165	ÂÂ		48,853	ÂÂ		62,827	ÂÂ
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	ÂÂ		6,999	ÂÂ		3,221	ÂÂ
Nonint inc-excl sec gains, net			41,948			48,408			48,083
Security gains, net			2	ÂÂ		58	ÂÂ		433	ÂÂ
Total noninterest income			41,950	ÂÂ		48,466	ÂÂ		48,516	ÂÂ
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	ÂÂ		8,323	ÂÂ		7,937	ÂÂ
Total noninterest expense			72,734	ÂÂ		69,614	ÂÂ		69,826	ÂÂ
Income before income taxes and tax eq adj			36,381			27,705			41,517
Tax equivalent adjustment			2,242	ÂÂ		2,247	ÂÂ		2,321	ÂÂ
Income before income taxes			34,139			25,458			39,196
Income taxes			10,785	ÂÂ		7,906	ÂÂ		13,017	ÂÂ
Net income			$ 23,354	ÂÂ		$ 17,552	ÂÂ		$ 26,179	ÂÂ
												ÂÂ
												ÂÂ
			Quarter Ended
Per Share Data			9/30/2008			6/30/2008			3/31/2008
Earnings per share - basic			$ 0.41	ÂÂ		$ 0.31	ÂÂ		$ 0.46	ÂÂ
												ÂÂ
Earnings per share - diluted			$ 0.41	ÂÂ		$ 0.31	ÂÂ		$ 0.46	ÂÂ
												ÂÂ
Dividends per share			$ 0.23	ÂÂ		$ 0.23	ÂÂ		$ 0.23	ÂÂ
												ÂÂ
Weighted average shares outstanding
Basic			57,298,710	ÂÂ		57,296,449	ÂÂ		57,283,240	ÂÂ
												ÂÂ
Diluted			57,337,342	ÂÂ		57,335,393	ÂÂ		57,312,428	ÂÂ
												ÂÂ
Period end shares outstanding			57,324,627	ÂÂ		57,296,449	ÂÂ		57,296,449	ÂÂ
												ÂÂ
												ÂÂ
			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
												ÂÂ
												ÂÂ
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	%
												ÂÂ
												ÂÂ
						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	ÂÂ		482	ÂÂ
Total interest income-FTE						142,763	ÂÂ		139,876	ÂÂ
Interest on deposits						47,911			50,423
Interest on fed funds pch and repos						5,499			5,898
Other interest expense						7,055	ÂÂ		6,186	ÂÂ
Total interest expense						60,465	ÂÂ		62,507	ÂÂ
Net interest income-FTE						82,298			77,369
Provision for loan losses						17,001	ÂÂ		4,999	ÂÂ
Net interest income after provision-FTE						65,297	ÂÂ		72,370	ÂÂ
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	ÂÂ		3,593	ÂÂ
Nonint inc-excl sec gains, net						42,255			41,546
Security gains, net						2	ÂÂ		23	ÂÂ
Total noninterest income						42,257	ÂÂ		41,569	ÂÂ
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	ÂÂ		8,271	ÂÂ
Total noninterest expense						69,722	ÂÂ		68,488	ÂÂ
Income before income taxes and tax eq adj						37,832			45,451
Tax equivalent adjustment						2,375	ÂÂ		2,283	ÂÂ
Income before income taxes						35,457			43,168
Income taxes						11,628	ÂÂ		14,087	ÂÂ
Net income						$ 23,829	ÂÂ		$ 29,081	ÂÂ
												ÂÂ
												ÂÂ
						Quarter Ended
Per Share Data						12/31/2007			9/30/2007
Earnings per share - basic						$ 0.42	ÂÂ		$ 0.51	ÂÂ
												ÂÂ
Earnings per share - diluted						$ 0.42	ÂÂ		$ 0.51	ÂÂ
												ÂÂ
Dividends per share						$ 0.23	ÂÂ		$ 0.22	ÂÂ
												ÂÂ
Weighted average shares outstanding
Basic						57,272,408	ÂÂ		57,267,119	ÂÂ
												ÂÂ
Diluted						57,341,472	ÂÂ		57,526,573	ÂÂ
												ÂÂ
Period end shares outstanding						57,272,408	ÂÂ		57,272,408	ÂÂ
												ÂÂ
												ÂÂ
						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
												ÂÂ
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	%
												ÂÂ
												ÂÂ
						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	ÂÂ		1,615	ÂÂ
Total interest income-FTE						371,297	ÂÂ		409,898	ÂÂ
Interest on deposits						113,104			152,464
Interest on fed funds pch and repos						9,215			14,725
Other interest expense						10,405	ÂÂ		14,706	ÂÂ
Total interest expense						132,724	ÂÂ		181,895	ÂÂ
Net interest income-FTE						238,573			228,003
Provision for loan losses						59,728	ÂÂ		6,783	ÂÂ
Net interest income after provision-FTE						178,845	ÂÂ		221,220	ÂÂ
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	ÂÂ		7,611	ÂÂ
Nonint inc-excl sec gains, net						138,439			120,080
Security gains, net						493	ÂÂ		110	ÂÂ
Total noninterest income						138,932	ÂÂ		120,190	ÂÂ
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	ÂÂ		24,892	ÂÂ
Total noninterest expense						212,174	ÂÂ		206,727	ÂÂ
Income before income taxes and tax eq adj						105,603			134,683
Tax equivalent adjustment						6,810	ÂÂ		7,143	ÂÂ
Income before income taxes						98,793			127,540
Income taxes						31,708	ÂÂ		42,774	ÂÂ
Net income						$ 67,085	ÂÂ		$ 84,766	ÂÂ
												ÂÂ
												ÂÂ
						Nine Months Ended
Per Share Data						9/30/2008			9/30/2007
Earnings per share - basic						$ 1.17	ÂÂ		$ 1.47	ÂÂ
												ÂÂ
Earnings per share - diluted						$ 1.17	ÂÂ		$ 1.46	ÂÂ
												ÂÂ
Dividends per share						$ 0.69	ÂÂ		$ 0.66	ÂÂ
												ÂÂ
Weighted average shares outstanding
Basic						57,292,821	ÂÂ		57,856,420	ÂÂ
												ÂÂ
Diluted						57,326,007	ÂÂ		58,142,830	ÂÂ
												ÂÂ
Period end shares outstanding						57,324,627	ÂÂ		57,272,408	ÂÂ
												ÂÂ
												ÂÂ
						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	%
												ÂÂ
												ÂÂ
			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	ÂÂ		7,039	ÂÂ		7,207	ÂÂ
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	ÂÂ		438	ÂÂ		146	ÂÂ
Total other real estate			32,465	ÂÂ		22,872	ÂÂ		9,588	ÂÂ
Total nonperforming assets			$ 137,747	ÂÂ		$ 118,183	ÂÂ		$ 87,582	ÂÂ
												ÂÂ
												ÂÂ
			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	ÂÂ		15,809	ÂÂ		15,868	ÂÂ
Total loans past due over 90 days			$ 23,954	ÂÂ		$ 18,865	ÂÂ		$ 20,854	ÂÂ
												ÂÂ
												ÂÂ
						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	ÂÂ		4,316	ÂÂ
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	ÂÂ		52	ÂÂ
Total other real estate						8,348	ÂÂ		5,870	ÂÂ
Total nonperforming assets						$ 73,521	ÂÂ		$ 51,319	ÂÂ
												ÂÂ
												ÂÂ
						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	ÂÂ		9,539	ÂÂ
Total loans past due over 90 days						$ 16,700	ÂÂ		$ 19,060	ÂÂ
												ÂÂ
												ÂÂ
			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	ÂÂ		2,566	ÂÂ		2,900	ÂÂ
Net charge-offs			(10,161	)		(26,254	)		(12,276	)
Ending Balance			$ 90,888	ÂÂ		$ 86,576	ÂÂ		$ 81,818	ÂÂ
												ÂÂ
												ÂÂ
						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	ÂÂ		2,838	ÂÂ
Net charge-offs						(9,518	)		(3,579	)
Ending Balance						$ 79,851	ÂÂ		$ 72,368	ÂÂ
												ÂÂ
												ÂÂ
						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	ÂÂ		8,373	ÂÂ
Net charge-offs						(48,691	)		(6,513	)
Ending Balance						$ 90,888	ÂÂ		$ 72,368	ÂÂ
												ÂÂ
												ÂÂ
			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	ÂÂ		760	ÂÂ		1,100	ÂÂ
Total provision for loan losses			$ 14,473	ÂÂ		$ 31,012	ÂÂ		$ 14,243	ÂÂ
	ÂÂ
												ÂÂ
						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	ÂÂ		1,280	ÂÂ
Total provision for loan losses						$ 17,001	ÂÂ		$ 4,999	ÂÂ
												ÂÂ
												ÂÂ
						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	ÂÂ		1,298	ÂÂ
Total provision for loan losses						$ 59,728	ÂÂ		$ 6,783	ÂÂ
												ÂÂ
												ÂÂ
			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	ÂÂ		(72	)		828	ÂÂ
Total net charge-offs			$ 10,161	ÂÂ		$ 26,254	ÂÂ		$ 12,276	ÂÂ
												ÂÂ
												ÂÂ
						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	ÂÂ		302	ÂÂ
Total net charge-offs						$ 9,518	ÂÂ		$ 3,579	ÂÂ
												ÂÂ
												ÂÂ
						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	ÂÂ		679	ÂÂ
Total net charge-offs						$ 48,691	ÂÂ		$ 6,513	ÂÂ
												ÂÂ
												ÂÂ
			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	%
												ÂÂ
												ÂÂ
						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	%
												ÂÂ
												ÂÂ
						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	%
												ÂÂ
												ÂÂ
			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	%
												ÂÂ
												ÂÂ
						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)
	ÂÂ
Note 1 - Financial Performance Non-GAAP Disclosures
	ÂÂ
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.
	ÂÂ
	Quarter Ended
	9/30/2008	ÂÂ	6/30/2008		ÂÂ	3/31/2008
						ÂÂ
Net Income as reported-GAAP	$ 23,554		$ 17,552			$ 26,179
						ÂÂ
Adjustments (net of taxes):
Mastercard Class A Common	-		(3,308	)		-
Visa Litigation Contingency	-		-			(936	)
Correction of Accounting Error	-		-			-
Hurricane Katrina	-		-	ÂÂ		-	ÂÂ
	-		(3,308	)		(936	)
Net Income adjusted for specific items (Non-GAAP)
	$ 23,354		$ 14,244	ÂÂ		$ 25,243	ÂÂ

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

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

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
ÂÂ
LOANS BY TYPE	ÂÂ	9/30/2008		ÂÂ	6/30/2008		ÂÂ	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	ÂÂ		310,369	ÂÂ		321,088	ÂÂ
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	ÂÂ		$ 6,772,799	ÂÂ		$ 6,930,216	ÂÂ

LOANS BY TYPE	ÂÂ	12/31/2007		ÂÂ	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	ÂÂ		282,865	ÂÂ
Loans		7,040,792			6,917,541
Allowance for loan losses		(79,851	)		(72,368	)
Net Loans		$ 6,960,941	ÂÂ		$ 6,845,173	ÂÂ

	ÂÂ	September 30, 2008
LOAN COMPOSITION BY REGION		Total	ÂÂ	Florida	ÂÂ	Mississippi (Central and Southern Regions)	ÂÂ	Tennessee (Memphis, TN and Northern MS Regions)	ÂÂ	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
										ÂÂ
										ÂÂ
CONSTRUCTION AND LAND DEVELOPMENT LOANS BY REGION	ÂÂ
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			ÂÂ	Total Loans	ÂÂ	Criticized Loans(1)	ÂÂ	Classified Loans(2)	ÂÂ	Nonaccrual Loans	ÂÂ	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
ÂÂ	ÂÂ
Total Florida loans				$ 617,475		$ 172,318		$ 117,282		$ 71,125		$ 39,954

FLORIDA CREDIT QUALITY			ÂÂ	Total Loans Less Impaired Loans	ÂÂ	Loan Loss Reserves	ÂÂ	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%
ÂÂ	ÂÂ
Total Florida loans				$ 577,521		$ 21,734		3.76%
ÂÂ
(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.
ÂÂ
(2)  Classified loans include those loans identified by management as exhibiting well defined credit weaknesses that may jeopardize repayment in full of the debt.
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(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
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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.
ÂÂ
The following table illustrates the components of mortgage banking income included in noninterest income in the accompanying income statements:
ÂÂ
	ÂÂ	Quarter Ended
		9/30/2008		ÂÂ	6/30/2008		ÂÂ	3/31/2008		ÂÂ	12/31/2007		ÂÂ	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	ÂÂ		1,255	ÂÂ		(268	)		427	ÂÂ
Mortgage banking, net		$ 4,323	ÂÂ		$ 6,708	ÂÂ		$ 11,056	ÂÂ		$ 4,967	ÂÂ		$ 2,503	ÂÂ

ÂÂ	ÂÂ		Nine Months Ended
			9/30/2008		ÂÂ	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	ÂÂ		614	ÂÂ
Mortgage banking, net			$ 22,087	ÂÂ		$ 7,057	ÂÂ

Note 4 - Earning Assets and Interest-Bearing Liabilities
ÂÂ
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:
ÂÂ
	ÂÂ	Quarter Ended
		9/30/2008		ÂÂ	6/30/2008		ÂÂ	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	%
								ÂÂ
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	%
								ÂÂ
Net interest margin		4.01	%		3.91	%		3.92	%

ÂÂ		Quarter Ended
		12/31/2007		ÂÂ	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	%
					ÂÂ
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	%
					ÂÂ
Net interest margin		3.93	%		3.89	%

ÂÂ		ÂÂ	Nine Months Ended
			9/30/2008		ÂÂ	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	%
						ÂÂ
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	%
						ÂÂ
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%.