The following provides a narrative discussion and analysis of Trustmark
Corporation's (Trustmark) financial condition and results of operations. This
discussion should be read in conjunction with the unaudited consolidated
financial statements and the supplemental financial data included in Part I.
Item 1. - Financial Statements of this report.

Description of Business



Trustmark, a Mississippi business corporation incorporated in 1968, is a bank
holding company headquartered in Jackson, Mississippi. Trustmark's principal
subsidiary is Trustmark National Bank (TNB), initially chartered by the State of
Mississippi in 1889. At June 30, 2022, TNB had total assets of $16.949 billion,
which represented approximately 99.99% of the consolidated assets of Trustmark.

Through TNB and its other subsidiaries, Trustmark operates as a financial
services organization providing banking and other financial solutions through
177 offices and 2,727 full-time equivalent associates (measured at June 30,
2022) located in the states of Alabama (includes the Georgia Loan Production
Office (LPO), which are collectively referred to herein as Trustmark's Alabama
market region), Florida (primarily in the northwest or "Panhandle" region of
that state, which is referred to herein as Trustmark's Florida market),
Mississippi, Tennessee (in the Memphis and Northern Mississippi regions, which
are collectively referred to herein as Trustmark's Tennessee market), and Texas
(primarily in Houston, which is referred to herein as Trustmark's Texas market).
Trustmark's operations are managed along three operating segments: General
Banking Segment, Wealth Management Segment and Insurance Segment. For a complete
overview of Trustmark's business, see the section captioned "The Corporation"
included in Part I. Item 1. - Business of Trustmark's Annual Report on Form 10-K
for its fiscal year ended December 31, 2021 (2021 Annual Report).

Executive Overview



Trustmark has been committed to meeting the banking and financial needs of its
customers and communities for over 130 years, and remains focused on providing
support, advice and solutions to meet its customers' unique needs. Trustmark
produced strong financial results for the three and six months ended June 30,
2022 reflected by significant loan growth in loans held for investment (LHFI) of
$547.7 million, or 5.3%, and $697.0 million, or 6.8%, respectively, expansion of
the net interest margin, consistent performance from its fee businesses and
solid credit quality and disciplined expense management. Trustmark remains
focused on expanding customer relationships, which was reflected in the solid
performance of its banking, insurance and wealth management businesses in the
first six months of 2022.

Trustmark is committed to managing the franchise for the long term, supporting
investments to promote profitable revenue growth, realigning delivery channels
to support changing customer preferences as well as reengineering and efficiency
opportunities to enhance long-term shareholder value. Trustmark's capital
position remained solid, reflecting the consistent profitability of its
diversified financial services businesses. Trustmark's Board of Directors
declared a quarterly cash dividend of $0.23 per share. The dividend is payable
September 15, 2022, to shareholders of record on September 1, 2022.

Recent Economic and Industry Developments



Economic activity continued to improve during the first six months of 2022 as
COVID-19 cases declined across the United States and restrictions were lifted;
however, economic concerns remain as a result of the cumulative weight of
uncertainty regarding the long-term effectiveness of the COVID-19 vaccine and
the potential economic impact of recent geopolitical developments, such as
Russia's invasion of Ukraine and COVID-19 lockdowns in China. Inflation has
become elevated, reflecting supply and demand imbalances related to the
pandemic, supply chain issues, higher energy prices and broader price pressures.
Doubts surrounding the near-term direction of global markets and the potential
impact on the United States economy are expected to persist for the near term.
While Trustmark's customer base is wholly domestic, international economic
conditions affect domestic economic conditions, and thus may have an impact upon
Trustmark's financial condition or results of operations.

Market interest rates have begun to rise during 2022 after an extended period at
historical lows. In March 2022, the FRB raised the target federal funds rate for
the first time in three years to a range of 0.25% to 0.50%. The FRB raised the
target federal funds rate again

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in May 2022 to a range of 0.75% to 1.00% and in June 2022 to a range of 1.50% to
1.75% and signaled the possibility of additional rate increases throughout 2022.
In addition, the FRB increased the interest that it pays on reserves from 0.10%
to 0.40% in March 2022, to 0.90% in May 2022 and to 1.65% in June 2022. The
prolonged period of reduced interest rates has had and may continue to have an
adverse effect on net interest income and margins and profitability for
financial institutions, including Trustmark. Additionally, as interest rates
increase, so will competitive pressures on the deposit cost of funds. It is not
possible to predict the pace and magnitude of changes in interest rates, or the
impact rate changes will have on Trustmark's results of operations.

In the July 2022 "Summary of Commentary on Current Economic Conditions by
Federal Reserve District," the twelve Federal Reserve Districts' reports
suggested that economic activity during the reporting period (covering the
period from May 23, 2022 through July 6, 2022) expanded at a modest pace;
however, several Districts noted growing signs of a slowdown in demand, and some
Districts noted concerns over an increased risk of a recession. Reports by the
twelve Federal Reserve Districts (Districts) noted the following during the
reporting period:

•


Consumer spending moderated as higher food and gas prices diminished households'
discretionary income. New auto sales remained sluggish across most Districts due
to continued low inventory levels. Hospitality and tourism contacts cited
healthy leisure travel activity with some noting an increase in business and
group travel.

•

Housing demand weakened noticeably as growing concerns about affordability contributed to non-seasonal declines in sales, resulting in a slight increase in inventory and more moderate price appreciation. Commercial real estate conditions slowed.

•

Loan demand was mixed across most Districts; some financial institutions reported increased customer usage of revolving credit lines, while others reported weakening residential loan demand amid higher mortgage interest rates.

•

While demand for energy products was robust and oil and gas drilling activity picked up, production remained constrained by labor availability and supply chain bottlenecks for critical components.

•


Employment continued to rise at a modest to moderate pace and conditions
remained tight overall. Nearly all Districts noted modest improvements in labor
availability amid weaker demand for workers, particularly among manufacturing
and construction contacts. Most Districts continue to report wage growth.

•


Substantial price increases were reported across all Districts, at all stages of
consumption, though some noted moderation in prices for construction inputs such
as lumber and steel. Increases in food, commodities and energy (particularly
fuel) costs remained significant. While several Districts noted concerns about
slowing future demand, on balance, pricing power was steady, and some sectors,
such as travel and hospitality, were successful in passing through sizable price
increases to customers with little to no pushback. Most contacts expect pricing
pressures to persist at least through the end of the year.

•


The outlook for future economic growth was mostly negative among Districts, with
contacts noting expectations for further weakening of demand over the next six
to twelve months.

Reports by the Federal Reserve's Sixth District, Atlanta (which includes
Trustmark's Alabama, Florida and Mississippi market regions), Eighth District,
St. Louis (which includes Trustmark's Tennessee market region), and Eleventh
District, Dallas (which includes Trustmark's Texas market region), noted similar
findings for the reporting period as those discussed above. The Federal
Reserve's Sixth District also reported that deposit growth slowed at financial
institutions, but demand for loans increased. The Federal Reserve's Sixth
District also noted that conditions at financial institutions were steady as
loan growth improved, with consumer lending experiencing the strongest growth
among loan portfolios, and deposit balances were flat. The Federal Reserve's
Eighth District noted that supply chain bottlenecks remain a key issue across
industries, with shortages and delays affecting availability of key inputs. The
Federal Reserve's Eleventh District also reported that outlooks were mostly
negative, and uncertainty surged, with contacts voicing concern about slowing
future demand and increased risk of a recession stemming from high prices,
supply-side constraints, weakening consumer sentiment and rising interest rates.

Financial Highlights



Trustmark reported net income of $34.3 million, or basic and diluted earnings
per share (EPS) of $0.56, in the second quarter of 2022, compared to $48.0
million, or basic and diluted EPS of $0.76, in the second quarter of 2021.
Trustmark's reported performance during the quarter ended June 30, 2022 produced
a return on average tangible equity of 11.36%, a return on average assets of
0.79%, an average equity to average assets ratio of 9.24% and a dividend payout
ratio of 41.07%, compared to a return on average tangible equity of 13.96%, a
return on average assets of 1.13%, an average equity to average assets ratio of
10.46% and a dividend payout ratio of 30.26% during the quarter ended June 30,
2021.

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Trustmark report net income of $63.5 million, or basic and diluted EPS of $1.03,
for the first six months of 2022, compared to $99.9 million, or basic and
diluted EPS of $1.58 and $1.57, respectively, for the same time period in 2021.
Trustmark's reported performance for the six months ended June 30, 2022 produced
a return on average tangible equity of 10.16%, a return on average assets of
0.73%, an average equity to average assets ratio of 9.51% and a dividend payout
ratio of 44.66%, compared to a return on average tangible equity of 14.75%, a
return on average assets of 1.20%, an average equity to average assets ratio of
10.50% and a dividend payout ratio of 29.11% for the six months ended June 30,
2021.

Total revenue, which is defined as net interest income plus noninterest income,
for the three and six months ended June 30, 2022 was $165.9 million and $319.4
million, respectively, a decrease of $9.9 million, or 5.6%, and $19.4 million,
or 5.7%, respectively, when compared to the same time periods in 2021. The
decrease in total revenue for the three and six months ended June 30, 2022 when
compared to the same time periods in 2021, resulted from declines in both net
interest income, primarily due to the decline in interest and fees on Paycheck
Protection Plan (PPP) loans, and noninterest income, primarily due to a decline
in mortgage banking, net. These factors are discussed in further detail below.

Net interest income for the three and six months ended June 30, 2022 totaled
$112.7 million and $212.0 million, respectively, a decrease of $6.7 million, or
5.6%, and $9.7 million, or 4.4%, respectively, when compared to the same time
periods in 2021. Interest income totaled $117.2 million and $220.9 million for
the three and six months ended June 20, 2022, respectively, a decrease of $8.7
million, or 6.9%, and $14.5 million, or 6.2%, respectively, when compared to the
same time periods in 2021, principally due to a decline in interest and fees on
PPP loans, primarily due to PPP loans forgiven by the U.S. Small Business
Administration (SBA) as well as the PPP loans sold during the second quarter of
2021, partially offset by increases in interest and fees on loans held for sale
(LHFS) and LHFI primarily due to loan growth and rising interest rates, interest
on securities primarily due to securities purchased and other interest income
primarily due to an increase in the rate paid by the Federal Reserve Bank of
Atlanta (FRBA) on reserves. Interest expense totaled $4.5 million and $8.9
million for the three and six months ended June 30, 2022, respectively, a
decrease of $2.0 million, or 30.7%, and $4.8 million, or 34.9%, respectively,
when compared to the same time periods in 2021, principally due to the decline
in interest on deposits as a result of lower interest rates and a decrease in
the average balances of time deposits.

Noninterest income for the three months ended June 30, 2022 totaled $53.3
million, a decrease of $3.2 million, or 5.6%, when compared to the same time
period in 2021, primarily due to a decline in mortgage banking, net, partially
offset by increases in service charges on deposit accounts, bank card and other
fees and insurance commissions. Mortgage banking, net totaled $8.1 million for
the three months ended June 30, 2022, a decrease of $9.2 million, or 53.0%, when
compared to the same time period in 2021, principally due to a decline in the
gain on sales of loans, net. Service charges on deposit accounts totaled $10.2
million for the second quarter of 2022, an increase of $2.6 million, or 34.3%,
when compared to the same time period in 2021 principally due to increases in
the amount of non-sufficient funds (NSF) and overdraft occurrences on consumer
interest checking accounts and service charges on consumer interest checking
accounts and demand deposit accounts (DDAs), primarily as a result of an
increase in customer transactions with the further abatement of pandemic-related
concerns. Bank card and other fees totaled $10.2 million for the second quarter
of 2022, an increase of $1.9 million, or 22.5%, when compared to the same time
period in 2021 principally due to an increase in customer derivative revenue.
Insurance commissions totaled $13.7 million for the three months ended June 30,
2022, an increase of $1.5 million, or 12.2%, when compared to the same time
period in 2021, principally due to growth in commissions from commercial
property and casualty business.

Noninterest income for the six months ended June 30, 2022 totaled $107.4
million, a decrease of $9.6 million, or 8.2%, when compared to the same time
period in 2021, principally due to a decline in mortgage banking, net, partially
offset by increases in service charges on deposit accounts, insurance
commissions and other income, net. Mortgage banking, net totaled $18.0 million
for the six months ended June 30, 2022, a decrease of $20.1 million, or 52.7%,
when compared to the same time period in 2021, principally due to a decline in
the gain on sales of loans, net. Service charges on deposit accounts totaled
$19.7 million for the first six months of 2022, an increase of $4.7 million, or
31.5%, when compared to the same time period in 2021 principally due to
increases in the amount of NSF and overdraft occurrences on consumer interest
checking accounts and DDAs and service charges on consumer interest checking
accounts. Insurance commissions totaled $27.8 million for the six months ended
June 30, 2022, an increase of $3.1 million, or 12.7%, when compared to the same
time period in 2021, principally due to growth in commissions from commercial
property and casualty business and other commission income. Other income, net
totaled $5.1 million for the first six months of 2022, an increase of $1.0
million, or 25.0%, when compared to the same time period in 2021, principally
due to gains on the sale of two closed bank branch locations and a decrease in
the amortization of investments in tax credit partnerships.

Noninterest expense for the three and six months ended June 30, 2022 totaled
$123.8 million and $245.3 million, respectively, an increase of $5.1 million, or
4.3%, and $5.1 million, or 2.1%, respectively, when compared to the same time
periods in 2021. The increase in noninterest expense for the second quarter of
2022 was principally due to increases in services and fees and salaries and
employee benefits. The increase in noninterest expense for the first six months
of 2022 was principally due to an increase in services and fees. Services and
fees totaled $24.5 million and $49.0 million for the three and six months ended
June 30, 2022, respectively, an increase of $2.8 million, or 12.7%, and $4.7
million, or 10.7%, respectively, when compared to the same time periods in 2021.
The increase in services and fees for the second quarter of 2022 was primarily
due to increases in other services and fees, software licenses

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and business processing outsourcing fees related to transaction processing. The
increase in services and fees for the first six months of 2022 was principally
due to increases in other services and fees, software licenses and business
processing outsourcing fees related to transaction processing, partially offset
by a decline in legal expenses. Salaries and employee benefits totaled $71.7
million for the three months ended June 30, 2022, an increase of $1.6 million,
or 2.2%, when compared to the same time period in 2021, principally due to
increases in commission expense related to improved insurance production and
salaries expense as a result of general merit increases.

Trustmark's provision for credit losses (PCL) on LHFI for the three and six
months ended June 30, 2022 totaled $2.7 million and $1.9 million, respectively,
an increase of $6.7 million and $16.3 million, respectively, when compared to
the same time periods in 2021. The PCL on LHFI for the second quarter of 2022
was primarily driven by reserves related to loan growth and the nature and
volume of the portfolio, partially offset by improvements in macroeconomic
forecasts. The PCL on LHFI for the first six months of 2022 primarily reflected
an increase in required reserves as a result of loan growth and specific
reserves on individually analyzed LHFI, partially offset by improvements in the
macroeconomic forecasts and credit quality. The PCL on off-balance sheet credit
exposures totaled a negative $1.6 million and a negative $2.7 million for the
three and six months ended June 30, 2022, respectively, a decrease of $6.1
million and an increase of $2.2 million, respectively, when compared to the same
time periods in 2021. The negative PCL on off-balance sheet credit exposures for
the second quarter of 2022 was primarily driven by improvements in macroeconomic
forecasts. The negative PCL on off-balance sheet credit exposures for the first
six months of 2022 primarily reflected a decline in required reserves as a
result of decreases in the unfunded balances and changes in the total reserve
rate used in the calculation of the allowance for credit losses (ACL) on
off-balance sheet credit exposures. Please see the section captioned "Provision
for Credit Losses" for additional information regarding the PCL on LHFI and
off-balance sheet credit exposures.

At June 30, 2022, nonperforming assets totaled $65.1 million, a decrease of $2.2
million, or 3.2%, compared to December 31, 2021, as a result of declines in
other real estate and nonaccrual loans. Nonaccrual LHFI totaled $62.1 million at
June 30, 2022, a decrease of $646 thousand, or 1.0%, relative to December 31,
2021, primarily due to reductions and pay-offs of nonaccrual loans in the
Alabama, Mississippi and Texas market regions, which were largely offset by
commercial credits placed on nonaccrual status in the Texas and Mississippi
market regions. Other real estate totaled $3.0 million at June 30, 2022, a
decline of $1.5 million, or 33.4%, compared to December 31, 2021, principally
due to properties sold in the Mississippi market region.

LHFI totaled $10.945 billion at June 30, 2022, an increase of $697.0 million, or
6.8%, compared to December 31, 2021. The increase in LHFI during the first six
months of 2022 was primarily due to net growth in LHFI secured by real estate
primarily in the Mississippi and Alabama market regions as well as growth in
commercial and industrial LHFI in the Mississippi and Alabama market regions
partially offset by a decline in commercial and industrial LHFI in the Tennessee
market region. For additional information regarding changes in LHFI and
comparative balances by loan category, see the section captioned "LHFI."

Management has continued its practice of maintaining excess funding capacity to
provide Trustmark with adequate liquidity for its ongoing operations. In this
regard, Trustmark benefits from its strong deposit base, its highly liquid
investment portfolio and its access to funding from a variety of external
funding sources such as upstream federal funds lines, FHLB advances and, on a
limited basis, brokered deposits. See the section captioned "Capital Resources
and Liquidity" for further discussion of the components of Trustmark's excess
funding capacity.

Total deposits were $14.770 billion at June 30, 2022, a decrease of $317.0
million, or 2.1%, compared to December 31, 2021. During the first six months of
2022, noninterest-bearing deposits decreased $261.6 million, or 5.5%, reflecting
declines in consumer and public DDAs partially offset by an increase in
commercial DDAs. Interest-bearing deposits decreased $55.4 million, or 0.5%,
during the first six months of 2022, primarily due to a decline in public
interest checking accounts partially offset by growth in consumer interest
checking accounts.

Recent Legislative and Regulatory Developments



On June 21, 2022, the Federal Deposit Insurance Corporation (FDIC) issued a
proposed rule to increase initial base deposit insurance assessment rates for
insured depository institutions by 2 basis points, beginning with the first
quarterly assessment period of 2023. The proposed assessment rate schedules
would remain in effect unless and until the reserve ratio of the Deposit
Insurance Fund meets or exceeds 2 percent. If the proposed rule is finalized as
proposed, the FDIC insurance costs of insured depository institutions, including
TNB, would generally increase.

For additional information regarding legislation and regulation applicable to
Trustmark, see the section captioned "Supervision and Regulation" included in
Part I. Item 1. - Business of Trustmark's 2021 Annual Report.

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Selected Financial Data

The following tables present financial data derived from Trustmark's consolidated financial statements as of and for the periods presented ($ in thousands, except per share data):


                                              Three Months Ended June 30,

Six Months Ended June 30,


                                               2022                 2021              2022               2021
Consolidated Statements of Income
Total interest income                     $      117,184       $      125,925     $     220,897       $  235,397
Total interest expense                             4,508                6,502             8,877           13,638
Net interest income                              112,676              119,423           212,020          221,759
Provision for credit losses (PCL), LHFI            2,716               (3,991 )           1,856          (14,492 )
PCL, off-balance sheet credit exposures           (1,568 )              4,528            (2,674 )         (4,839 )
Noninterest income                                53,253               56,411           107,368          116,994
Noninterest expense                              123,767              118,679           245,286          240,227
Income before income taxes                        41,014               56,618            74,920          117,857
Income taxes                                       6,730                8,637            11,425           17,914
Net Income                                $       34,284       $       47,981     $      63,495       $   99,943

Total Revenue (1)                         $      165,929       $      175,834     $     319,388       $  338,753

Per Share Data
Basic EPS                                 $         0.56       $         0.76     $        1.03       $     1.58
Diluted EPS                                         0.56                 0.76              1.03             1.57
Cash dividends per share                            0.23                 0.23              0.46             0.46

Performance Ratios
Return on average equity                            8.55 %              10.81 %            7.71 %          11.39 %
Return on average tangible equity                  11.36 %              13.96 %           10.16 %          14.75 %
Return on average assets                            0.79 %               1.13 %            0.73 %           1.20 %
Average equity / average assets                     9.24 %              10.46 %            9.51 %          10.50 %
Net interest margin (fully taxable
equivalent)                                         2.90 %               3.16 %            2.74 %           2.99 %
Dividend payout ratio                              41.07 %              30.26 %           44.66 %          29.11 %

Credit Quality Ratios (2)
Net charge-offs (recoveries) / average
loans                                              -0.06 %               0.05 %           -0.03 %          -0.02 %
PCL, LHFI / average loans                           0.10 %              -0.16 %            0.03 %          -0.28 %
Nonaccrual LHFI / (LHFI + LHFS)                     0.56 %               0.49 %
Nonperforming assets / (LHFI + LHFS)
  plus other real estate                            0.58 %               0.58 %
ACL LHFI / LHFI                                     0.94 %               1.02 %


(1)
Consistent with Trustmark's audited annual financial statements, total revenue
is defined as net interest income plus noninterest income.
(2)
Excludes PPP loans.

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