TRUSTMARK : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-K)

The following provides a narrative discussion and analysis of Trustmark's
financial condition and results of operations. This discussion should be read in
conjunction with the consolidated financial statements and the supplemental
financial data included in Part II. Item 8. - Financial Statements and
Supplementary Data of this report. Discussion and analysis of Trustmark's
financial condition and results of operations for the years ended December 31,
2019 and 2018 are included in the respective sections within Part II. Item 7 -
Management's Discussion and Analysis of Financial Condition and Results of
Operations of Trustmark's Annual Report filed on Form 10-K for the year ended
December 31, 2019.

COVID-19 Update

Trustmark has been proactive in responding to the COVID-19 pandemic, taking
comprehensive action to support customers, associates and the communities it
serves. Trustmark activated its Pandemic Preparedness Plan in March 2020 to
protect the health and safety of its employees and customers, and continues to
take additional precautions as recommended by the Centers for Disease Control
and Prevention and mandated by government ordinances. Trustmark remains
committed to serving its customers through its branches, actively promoting
digital touchpoints including its ATM and ITM network and robust digital and
mobile banking options. Trustmark has been proactive in reaching out to
customers to discuss challenges and solutions, provided waivers of certain fees
and charges, granted extensions, deferrals and forbearance as appropriate,
paused all foreclosures and repossessions and refrained from negative credit
bureau reporting for previously up-to-date customers. To date, Trustmark has not
incurred any significant disruptions to its business activities.

Exposure to Stressed Industries

The full impact of COVID-19 is unknown and rapidly evolving. It has caused
substantial disruption in international and the United States economies, markets
and employment. The outbreak has had and may continue to have a significant
adverse impact on certain industries Trustmark serves. The following provides a
summary of Trustmark's exposure to COVID-19 impacted industries within the LHFI
portfolio as of December 31, 2020:

• Restaurants: Aggregate outstanding balance of $116.0 million, credit

exposure of $129.0 million, 330 total loans, represents 1.2% of Trustmark's

outstanding LHFI portfolio, 85.0% of the loans are real estate secured,

37.0% are full-service restaurants, 61.0% are limited-service restaurants

and 2% are other.

• Hotels: Aggregate outstanding balance of $395.0 million, credit exposure of

$437.0 million, 100 total loans, represents 4.0% of Trustmark's outstanding

LHFI portfolio, 99.0% of the loans are real estate secured, consists of

experienced operators and carry secondary guarantor support, 91.0% operate

under a major hotel chain.

• Retail (Commercial Real Estate): Aggregate outstanding balance of $452.0

million, credit exposure of $527.0 million, 302 total loans, represents 4.6%

of Trustmark's outstanding LHFI portfolio, 18.0% are stand-alone buildings

with strong essential services tenants, 2.0% are national grocery

store-anchored, 20.0% are investment grade anchored centers, mall exposure

in only one borrower with $5 million outstanding.

• Energy: Aggregate outstanding balance of $102.3 million, credit exposure of

$329.1 million, 118 total loans, represents 1.0% of Trustmark's outstanding

      LHFI portfolio, no loans where repayment or underlying security ties to
      realization of value from energy reserves.

• Higher Risk Commercial and Industrial: Aggregate outstanding balance of

$11.0 million, credit exposure of $14.0 million, one borrower.

During the year ended December 31, 2020, Trustmark incurred total credit loss
expenses of $45.0 million, primarily due to net changes in the economic forecast
due to the negative effects of the COVID-19 pandemic on the overall economy and
macroeconomic factors. During the fourth quarter of 2020, Trustmark conducted an
updated analysis of previously reviewed borrowers receiving payment concessions
and other borrowers in industries significantly impacted by the COVID-19
pandemic, which included certain pass rated credits of $500 thousand or more and
watch or criticized rated credits of $100 thousand or more. Collectively, an
aggregate outstanding balance of $969.7 million was reviewed, which included
approximately 47.0% of borrowers receiving payment concessions, 93.0% of
outstanding hotel loans, 46.0% of outstanding restaurant loans and 41.0% of
outstanding retail commercial real estate loans. As a result of this review,
approximately $32.0 million of the outstanding balances reviewed were downgraded
to a criticized risk rating category, including $18.0 million in hotel loans,
$2.0 million in restaurant loans and $2.0 million in retail commercial real
estate loans. Because of the significant uncertainties related to the ultimate
duration of the COVID-19 pandemic and its potential effects on clients and
prospects, and on the national and local economy as a whole, there can be no
assurances as to how the crisis may ultimately affect Trustmark's loan
portfolio.

                                       33

--------------------------------------------------------------------------------

Loan Concessions

On March 22, 2020, the federal banking agencies issued an "Interagency Statement
on Loan Modifications and Reporting for Financial Institutions Working with
Customers Affected by the Coronavirus". This guidance encourages financial
institutions to work prudently with borrowers that may be unable to meet their
contractual obligations because of the effects of COVID-19. The guidance goes on
to explain that in consultation with the FASB staff that the federal banking
agencies conclude that short-term modifications (e.g., six months) made on a
good faith basis to borrowers that were current as of the implementation date of
a relief program are not TDRs. On March 27, 2020, the CARES Act, a $2 trillion
stimulus package intended to provide relief to businesses and consumers in the
United States struggling as a result of the pandemic, was signed into
law. Section 4013 of the CARES Act also addressed COVID-19 related modifications
and specified that COVID-19 related modifications on loans that were current as
of December 31, 2019 are not TDRs. On April 7, 2020, the federal banking
agencies revised its earlier guidance to clarify the interaction between the
March 22, 2020 interagency statement and section 4013 of the CARES Act, as well
as the agencies' views on consumer protection considerations. During 2020,
Trustmark modified 2,362 individual loans with aggregate principal balances
totaling $1.266 billion at December 31, 2020 under this guidance, as well as 61
individual loans with aggregate principal balances totaling $4.7 million at
December 31, 2020 which were not eligible under this guidance, but were not
classified as a TDR under Trustmark's existing policies. More of these types of
modifications are likely to be executed in the first quarter of 2021. Commercial
concessions were primarily either interest only for 90 days or full payment
deferrals for 90 days. Consumer concessions were 90-day full payment deferrals.

Paycheck Protection Program

A provision in the CARES Act included a $349 billion fund for the creation of
the PPP through the SBA and Treasury Department. The PPP is intended to provide
loans to small businesses to pay their employees, rent, mortgage interest and
utilities. PPP loans are forgivable, in whole or in part, if the proceeds are
used for payroll and other permitted purposes in accordance with the
requirements of the PPP. If not forgiven, in whole or in part, these loans carry
a fixed rate of 1.00% per annum with payments deferred until the date the SBA
remits the borrower's loan forgiveness amount to the lender (or, if the borrower
does not apply for loan forgiveness, ten months after the end of the borrower's
loan forgiveness covered period). Originally, the loans carried a term of two
years under SBA rules implemented by the CARES Act, but a June 5, 2020 amendment
to the CARES Act provided for a five-year minimum loan term for loans made
beginning as of such date, and permitted lenders and borrowers to mutually agree
to amend existing two-year loans to have terms of five years. The loans are 100%
guaranteed by the SBA. The SBA pays the originating bank a processing fee
ranging from 1.0% to 5.0%, based on the size of the loan. The SBA began
accepting submissions for these PPP loans on April 3, 2020 and reached the limit
of funds originally available to disburse under this program on April 16,
2020. Legislation providing an additional $320 billion in funding for the PPP
was signed into law on April 24, 2020. The SBA began accepting applications for
the new funding on April 27, 2020 and stopped accepting applications on August
8, 2020. The SBA and Treasury Department have released a series of rules,
guidance documents and processes governing all aspects of the PPP, including a
streamlined process for loan forgiveness of PPP loans of $50 thousand or
less. Under the CARES Act and interim and final rules released by the federal
banking agencies, PPP loans receive a zero percent risk weight for regulatory
capital purposes, and if pledged as part of the Paycheck Protection Program
Liquidity Facility (PPPLF), are subtracted from the lender's Tier 1 leverage
ratio. The PPPLF was established by the FRB to provide a liquidity source to PPP
lenders, through non-recourse credit secured by PPP loans. The Consolidated
Appropriations Act, 2021, enacted on December 27, 2020, extended some of the
relief provisions in certain respects of the CARES Act, and appropriated an
additional $284.0 billion to the PPP and permitted certain PPP borrowers to make
"second draw" loans.

TNB began submitting applications to the SBA on behalf of its customers on April
4, 2020 and began funding those loans on April 13, 2020. Through the PPP, TNB
had 7,398 loans totaling $623.0 million outstanding as of December 31, 2020. Net
of deferred fees and costs of $12.9 million, PPP loans totaled $610.1 million at
December 31, 2020. Trustmark began submitting applications to the SBA on behalf
of qualified small businesses under the third appropriation of PPP funds in
January 2021. Due to the amount and nature of the PPP loans, these loans are not
included in Trustmark's LHFI portfolio and are presented separately in the
accompanying consolidated balance sheet. At December 31, 2020, TNB had no
outstanding PPP loans pledged as collateral at the PPPLF. Trustmark cannot
predict the amount of PPP loans that will be forgiven in whole or in part by the
SBA, nor can it predict the magnitude and timing of the impact the PPP loans and
related fees will have on Trustmark's net interest margin. However, TNB's
participation in the PPP will likely have a significant impact on Trustmark's
asset mix and net interest margin in 2021 as a result of the addition of these
low interest rate loans and the related processing fees earned on these loans.

Executive Overview

Trustmark has been committed to meeting the banking and financial needs of its
customers and communities for over 130 years. During the COVID-19 pandemic,
Trustmark remains focused on providing support, advice and solutions to meet its
customers' unique needs. During 2020, Trustmark experienced strong growth in its
mortgage banking business, which increased noninterest income by $20.2 million
and $96.0 million, respectively, when the three months and year ended December
31, 2020 are compared to the same time period in 2019. Trustmark continued to
maintain and expand customer relationships as reflected by growth in the LHFI
portfolio of $488.9 million, or 5.2%, and growth in deposits of $2.803 billion,
or 24.9%, during 2020. Trustmark is committed to managing the

                                       34

--------------------------------------------------------------------------------
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 continued to invest in its insurance
business with the completion of the acquisition of a Mississippi-based agency
during the second quarter of 2020. Trustmark's capital position remained solid,
reflecting the consistent profitability of its diversified financial services
businesses. The Board of Directors of Trustmark declared a quarterly cash
dividend of $0.23 per share. The dividend is payable March 15, 2021, to
shareholders of record on March 1, 2021.

Financial Highlights

Trustmark reported net income of $51.2 million, or basic and diluted earnings
per share (EPS) of $0.81, for the fourth quarter of 2020, compared to $33.9
million, or basic and diluted EPS of $0.53, in the fourth quarter of
2019. Trustmark's reported performance during the quarter ended December 31,
2020, produced a return on average tangible equity of 15.47%, a return on
average assets of 1.28%, an average equity to average assets ratio of 10.82% and
a dividend payout ratio of 28.40%, compared to a return on average tangible
equity of 10.85%, a return on average assets of 1.00%, an average equity to
average assets ratio of 12.30% and a dividend payout ratio of 43.40% during the
quarter ended December 31, 2019.

Revenue, which is defined as net interest income plus noninterest income,
totaled $177.5 million for the quarter ended December 31, 2020 compared to
$153.2 million for the quarter ended December 31, 2019, an increase of $24.3
million, or 15.9%. The increase in total revenue for the fourth quarter of 2020
was principally due to an increase in total noninterest income primarily as a
result of the increase in mortgage banking, net.

Net interest income for the fourth quarter of 2020 totaled $111.4 million, an
increase of $5.8 million, or 5.5%, when compared to the fourth quarter of 2019,
principally due to interest and fees on PPP loans of $14.9 million and a decline
in interest on deposits of $11.4 million, or 64.1%, partially offset by a
decline in interest and fees on LHFS and LHFI of $14.8 million, or 13.6%. The
declines in interest on deposits and interest and fees on LHFS and LHFI for the
fourth quarter of 2020 were principally due to lower interest rates. Noninterest
income for the fourth quarter of 2020 totaled $66.1 million, an increase of
$18.5 million, or 39.0%, when compared to the fourth quarter of 2019,
principally due to an increase in mortgage banking, net of $20.2 million. The
increase in mortgage banking, net for the fourth quarter of 2020 was principally
due to an increase in gain on sales of loans, net. Noninterest expense for the
fourth quarter of 2020 totaled $118.8 million, an increase of $8.8 million, or
8.0%, when compared to the fourth quarter of 2019, principally due to increases
in salaries and employee benefits of $7.3 million, or 11.8%, and services and
fees of $2.8 million, or 14.5%. The increase in salaries and employee benefits
when the fourth quarter of 2020 is compared to the fourth quarter of 2019 was
principally due to increases in performance based incentives, mortgage
origination commissions, general merit increases and additional salaries expense
related to the COVID-19 pandemic. The increase in services and fees when the
fourth quarter of 2020 is compared to the fourth quarter of 2019 was principally
due to increases in legal fees related to ongoing litigation matters and data
processing charges related to software.

Trustmark adopted FASB ASC Topic 326, in accordance with the amendments of FASB
ASU 2016-13, effective January 1, 2020. The guidance in FASB ASC Topic 326
replaced Trustmark's previous incurred loss methodology with a methodology that
reflects the current expected credit losses (often referred to as CECL) and
requires consideration of a broader range of reasonable and supportable
information to determine credit losses. Trustmark's allowance for credit losses
(ACL) for LHFI is an estimate of expected credit losses inherent within
Trustmark's existing LHFI portfolio. The ACL, LHFI is adjusted through the
provision for credit losses and reduced by the charge off of loan amounts, net
of recoveries. FASB ASC Topic 326 also requires Trustmark to estimate expected
credit losses for off-balance sheet credit exposures which are not
unconditionally cancellable by Trustmark. Trustmark maintains a separate
allowance for credit losses for off-balance sheet credit exposures, including
unfunded commitments and letters of credit. Adjustments to the allowance for
credit losses on off-balance sheet credit exposures are recorded as noninterest
expense in credit loss expense related to off-balance sheet credit exposures.
Trustmark adopted FASB ASC Topic 326 using the modified retrospective approach
prescribed by the amendments of FASB ASU 2016-13; therefore, prior period loan
loss provision balances are presented under legacy GAAP and may not be
comparable to current period credit loss presentation.

Trustmark's provision for credit losses for the three months ended December 31,
2020 totaled a negative $4.4 million compared to a provision for loan losses,
LHFI of $3.7 million for the three months ended December 31, 2019. Credit loss
expense related to off-balance sheet credit exposures totaled a negative $1.1
million for the three months ended December 31, 2020. The decrease in the
provision for credit losses and the credit loss expense related to off-balance
sheet credit exposures for the fourth quarter of 2020 was primarily due to
improvements in the economic forecast and macroeconomic factors. Please see the
section captioned "Allowance for Credit Losses," for additional information
regarding the provision for credit losses and credit loss expense related to
off-balance sheet credit exposures.

For the year ended December 31, 2020, Trustmark reported net income of $160.0
million, or basic and diluted EPS of $2.52 and $2.51, respectively, compared to
$150.5 million, or basic and diluted EPS of $2.33 and $2.32, respectively, for
the year ended December 31, 2019 and $149.6 million, or basic and diluted EPS of
$2.22 and $2.21, respectively, for the year ended December 31,

                                       35

--------------------------------------------------------------------------------
2018. Trustmark's reported performance for the year ended December 31, 2020,
produced a return on average tangible equity of 12.58%, a return on average
assets of 1.05% and a dividend payout ratio of 36.51%, compared to a return on
average tangible equity of 12.45%, a return on average assets of 1.11% and a
dividend payout ratio of 39.48% for the year ended December 31, 2019 and a
return on average tangible equity of 12.86%, a return on average assets of 1.11%
and a dividend payout ratio of 41.44% for the year ended December 31,
2018. Trustmark's average equity to average assets ratio was 11.05%, 12.02% and
11.78% for the years ended December 31, 2020, 2019 and 2018, respectively.

Revenue totaled $701.1 million for the year ended December 31, 2020, compared to
$613.6 million and $604.3 million for the years ended December 31, 2019 and
2018, respectively. The increase in total revenue for 2020 compared to 2019 was
principally due to an increase in total noninterest income primarily as a result
of the increase in mortgage banking, net.

Net interest income for the year ended December 31, 2020 totaled $426.5 million,
relatively unchanged when compared to the year ended December 31, 2019,
principally due to declines in interest and fees on LHFS and LHFI of $49.4
million, or 11.2%, interest and fees on acquired loans of $8.4 million, interest
on securities of $7.0 million, or 12.5%, and other interest income of $3.8
million, or 70.9%, offset by a decline in interest on deposits of $41.7 million,
or 52.7%, and the addition of interest and fees on PPP loans of $26.6
million. Declines in interest and fees on LHFS and LHFI, interest on securities
and interest on deposits for 2020 were principally due to the decline in
interest rates. The decline in interest and fees on acquired loans for 2020 was
due to the reclassification of the remaining balance of acquired loans to LHFI
upon the adoption of FASB ASC Topic 326. See the section captioned "Acquired
Loans," for additional information regarding the acquired loans reclassified to
LHFI. The decline in other interest income for 2020 was principally due to a
decline in interest earned on deposits held at the Federal Reserve as a result
of the FRB's decision to reduce the interest it pays on excess reserves from
1.60% to 0.10% in March of 2020.

Noninterest income totaled $274.6 million for 2020, an increase of $87.5
million, or 46.8%, when compared to 2019, principally due to an increase in
mortgage banking, net partially offset by a decline in service charges on
deposit accounts. Mortgage banking, net increased $96.0 million when 2020 is
compared to 2019, principally due to increases in gain on sales of loans, net
and a positive net hedge ineffectiveness. Service charges on deposit accounts
declined $10.3 million, or 24.2%, when 2020 is compared to 2019, principally due
to declines in non-sufficient funds (NSF) and overdraft fees on consumer demand
deposit and interest checking accounts and commercial demand deposit accounts,
primarily due to declines in overdraft occurrences as a result of COVID-19
related business closures, stay-at-home orders and government stimulus programs.

Noninterest expense totaled $475.2 million for 2020, an increase of $46.2
million, or 10.8%, when compared to 2019, principally due to increases in
salaries and employee benefits and services and fees, as well as the addition of
the credit loss expense related to off-balance sheet credit exposures. Salaries
and employee benefits expense increased $24.5 million, or 9.9%, when 2020 is
compared to 2019. During the first quarter of 2020, Trustmark completed a
voluntary early retirement program and incurred $4.3 million of non-routine
salaries and employee benefits expense related to this program. Excluding these
non-routine expenses, salaries and employee benefits increased $20.3 million, or
8.2%, when 2020 is compared to 2019. The increase in salaries and employee
benefits expense, excluding the non-routine expenses, for the year ended
December 31, 2020 was principally due to higher commissions expense resulting
from improvements in mortgage production as well as an increase in salary
expenses as a result of an increase in performance incentives, general merit
increases, an increase in overtime pay and temporary compensation adjustments
and one-time payments to front-line associates as a result of the COVID-19
pandemic. Services and fees increased $10.5 million, or 14.3%, when 2020 is
compared to 2019, primarily due to increases in legal fees related to ongoing
litigation matters and data processing charges related to software.

Trustmark's provision for credit losses for 2020 totaled $36.1 million compared
to a provision for loan losses, LHFI of $10.8 million for 2019. Credit loss
expense related to off-balance sheet credit exposures totaled $8.9 million for
2020. The increase in the provision for credit losses and the credit loss
expense related to off-balance sheet credit exposures for the year ended
December 31, 2020 was primarily due to net changes in the economic forecast due
to the anticipated negative effects of the COVID-19 pandemic on the overall
economy and macroeconomic factors. Please see the section captioned "Allowance
for Credit Losses" for additional information regarding the provision for credit
losses and credit loss expense related to off-balance sheet credit exposures.

At December 31, 2020, nonperforming assets totaled $74.8 million, a decrease of
$7.7 million, or 9.3%, compared to December 31, 2019 due to a decline other real
estate partially offset by an increase in nonaccrual LHFI. Total nonaccrual LHFI
were $63.1 million at December 31, 2020, representing an increase of $9.9
million, or 18.6%, relative to December 31, 2019, primarily due to LHFI placed
on nonaccrual status in Trustmark's Alabama, Tennessee, Texas and Mississippi
market regions, partially offset by reductions, pay-offs and charge-offs of
nonaccrual LHFI in Trustmark's Mississippi and Tennessee market regions. The
percentage of loans, excluding PPP and acquired loans, that are 30 days or more
past due and nonaccrual LHFI increased in 2020 to 2.08% compared to 1.28% in
2019 and 1.56% in 2018. Other real estate totaled $11.7 million at December 31,
2020, a decline of $17.6 million, or 60.2%, when compared to December 31, 2019,
principally due to properties sold in Trustmark's Mississippi, Florida, Alabama,
and Tennessee market regions.

                                       36

--------------------------------------------------------------------------------
LHFI totaled $9.825 billion at December 31, 2020, an increase of $488.9 million,
or 5.2%, compared to December 31, 2019. On January 1, 2020, Trustmark
transferred $72.6 million, the remaining balance of the loans acquired in the
BancTrust merger, from acquired impaired loans to LHFI as purchased credit
deteriorated (PCD) loans as part of its adoption of FASB ASC Topic 326. For
additional information regarding the acquired loans transferred to LHFI, see the
section captioned "Acquired Loans." Excluding the transferred acquired loans,
LHFI increased $416.3 million, or 4.4%, compared to December 31, 2019. The
increase in LHFI during 2020, excluding the transferred acquired loans, was
primarily due to net growth in LHFI secured by real estate in Trustmark's Texas,
Alabama, Mississippi and Tennessee market regions, partially offset by declines
in commercial and industrial LHFI in the Mississippi, Tennessee and Alabama
market regions. 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 "Liquidity" for
further discussion of the components of Trustmark's excess funding capacity.

Total deposits were $14.049 billion at December 31, 2020, an increase of $2.803
billion, or 24.9%, compared to December 31, 2019, reflecting increases in both
noninterest-bearing and interest-bearing deposit accounts as customers deposited
proceeds from line draws, PPP loans and other COVID-19 related stimulus
programs. During 2020, noninterest-bearing deposits increased $1.458 billion, or
50.4%, primarily due to growth in all categories of noninterest-bearing deposit
accounts. Interest-bearing deposits increased $1.345 billion, or 16.1%, during
2020, primarily due to growth in public and consumer interest checking accounts,
commercial and consumer money market deposit accounts and consumer savings
accounts, partially offset by declines in consumer time deposits.

During the fourth quarter of 2020, Trustmark issued $125.0 million of 3.625% fixed-to-floating rate subordinated notes due in 2030 for general corporate purposes, further strengthening its regulatory capital position.

Critical Accounting Policies

Trustmark's consolidated financial statements are prepared in accordance with
GAAP and follow general practices within the financial services
industry. Application of these accounting principles requires Management to make
estimates, assumptions and judgments that affect the amounts reported in the
consolidated financial statements and accompanying notes. These estimates,
assumptions and judgments are based on information available as of the date of
the consolidated financial statements; accordingly, as this information changes,
actual financial results could differ from those estimates.

Certain policies inherently have a greater reliance on the use of estimates,
assumptions and judgments and, as such, have a greater possibility of producing
results that could be materially different than originally reported. These
critical accounting policies are described below.

For additional information regarding the accounting policies discussed below,
please see Note 1 - Significant Accounting Policies set forth in Part II. Item
8. - Financial Statements and Supplementary Data of this report.

Allowance for Credit Losses (ACL)

LHFI

The ACL for LHFI is a valuation account that is deducted from the loans'
amortized cost basis to present the net amount expected to be collected on the
loans. Credit quality within the LHFI portfolio is continuously monitored by
Management and is reflected within the ACL for loans. The ACL for LHFI is an
estimate of expected losses inherent within Trustmark's existing LHFI
portfolio. The ACL for LHFI is adjusted through the provision for credit losses
and reduced by the charge off of loan amounts, net of recoveries.

                                       37

--------------------------------------------------------------------------------
The credit loss estimation process involves procedures to appropriately consider
the unique characteristics of Trustmark's LHFI portfolio segments. These
segments are further disaggregated into loan classes, the level at which credit
risk is estimated. When computing allowance levels, credit loss assumptions are
estimated using a model that categorizes loan pools based on loss history,
delinquency status and other credit trends and risk characteristics, including
current conditions and reasonable and supportable forecasts about the
future. Evaluations of the portfolio and individual credits are inherently
subjective, as they require estimates, assumptions and judgments as to the facts
and circumstances of particular situations. Determining the appropriateness of
the ACL is complex and requires judgement by Management about the effect of
matters that are inherently uncertain. In future periods, evaluations of the
overall LHFI portfolio, in light of the factors and forecasts then prevailing,
may result in significant changes in the allowance and credit loss expense in
those future periods. Given the nature of many of the factors, forecasts and
assumptions in the ACL methodology, it is not possible to provide meaningful
estimates of the impact of any such potential change.

For a complete description of Trustmark's ACL methodology for the LHFI portfolio, please see Note 4 - LHFI and Allowance for Credit Losses, LHFI included in Part II. Item 8. - Financial Statements and Supplementary Data of this report.

Off-Balance Sheet Credit Exposures

Trustmark maintains a separate ACL on off-balance sheet credit exposures, including unfunded loan commitments and letters of credit, which are not unconditionally cancellable. Adjustments to the ACL on off-balance sheet credit exposures are recorded to credit loss expense related to off-balance sheet credit exposures in noninterest expense.

Expected credit losses for off-balance sheet credit exposures are estimated by
calculating a commitment usage factor over the contractual period for exposures
that are not unconditionally cancellable by Trustmark. Trustmark calculates a
loan pool level unfunded amount for the period. In addition to the unfunded
balances, Trustmark uses a funding rate for loan pools that are considered
open-ended. In order to mitigate volatility and incorporate historical
experience in the funding rate, Trustmark uses a twelve-quarter moving
average. For the closed-ended loan pools, Trustmark takes a conservative
approach and uses a 100% funding rate. The expected funding rate is applied to
each pool's unfunded commitment balances to ensure that reserves will be applied
to each pool based upon balances expected to be funded based upon historical
levels. In addition to the funding rate being applied to the unfunded commitment
balance, a reserve rate is applied that is loan pool specific and is applied to
the unfunded amount to ensure loss factors, both quantitative and qualitative,
are being considered on the unfunded portion of the loan pool, consistent with
the methodology applied to the funded loan pools.

Evaluations of the unfunded commitments are inherently subjective, as they
require estimates, assumptions and judgments as to the facts and circumstances
of particular situations. Determining the appropriateness of the ACL is complex
and requires judgement by Management about the effect of matters that are
inherently uncertain. In future periods, evaluations of off-balance sheet credit
exposures, in light of the factors and forecasts then prevailing, may result in
significant changes in the allowance and credit loss expense in those future
periods. Given the nature of many of the factors, forecasts and assumptions in
the ACL methodology, it is not possible to provide meaningful estimates of the
impact of any such potential change.

For a complete description of Trustmark's ACL methodology for the off-balance
sheet credit exposures, please see the section captioned "Lending Related" in
Note 17 - Commitments and Contingencies included in Part II. Item 8. - Financial
Statements and Supplementary Data of this report.

Mortgage Servicing Rights (MSR)

Trustmark recognizes as assets the rights to service mortgage loans based on the
estimated fair value of the MSR when loans are sold and the associated servicing
rights are retained. Trustmark has elected to account for the MSR at fair value.

The fair value of the MSR is determined using a valuation model administered by
a third party that calculates the present value of estimated future net
servicing income. The model incorporates assumptions that market participants
use in estimating future net servicing income, including estimates of prepayment
speeds, discount rate, default rates, cost to service (including delinquency and
foreclosure costs), escrow account earnings, contractual servicing fee income
and other ancillary income such as late fees. Management reviews all significant
assumptions quarterly. Mortgage loan prepayment speeds, a key assumption in the
model, is the annual rate at which borrowers are forecasted to repay their
mortgage loan principal. The discount rate used to determine the present value
of estimated future net servicing income, another key assumption in the model,
is an estimate of the required rate of return investors in the market would
require for an asset with similar risk. Both assumptions can, and generally
will, change as market conditions and interest rates change.

By way of example, an increase in either the prepayment speed or discount rate
assumption will result in a decrease in the fair value of the MSR, while a
decrease in either assumption will result in an increase in the fair value of
the MSR. In recent years, there have been significant market-driven fluctuations
in loan prepayment speeds and discount rates. These fluctuations can be rapid
and may

                                       38

--------------------------------------------------------------------------------

continue to be significant. Therefore, estimating prepayment speed and/or discount rates within ranges that market participants would use in determining the fair value of the MSR requires significant management judgment.

At December 31, 2020, the MSR fair value was $66.5 million. The impact on the
MSR fair value of either a 10% adverse change in prepayment speeds or a 100
basis point increase in discount rates at December 31, 2020, would be a decline
in fair value of approximately $4.3 million and $2.4 million,
respectively. Changes of equal magnitude in the opposite direction would produce
similar increases in fair value in the respective amounts.

Goodwill and Identifiable Intangible Assets

Trustmark records all assets and liabilities acquired in purchase acquisitions,
including goodwill and other intangible assets, at fair value as required by
FASB ASC Topic 805. The carrying amount of goodwill at December 31, 2020 totaled
$334.6 million for the General Banking Segment and $50.7 million for the
Insurance Segment, a consolidated total of $385.3 million. Trustmark's goodwill
is not amortized but is subject to annual tests for impairment or more often if
events or circumstances indicate it may be impaired. Trustmark's identifiable
intangible assets, which totaled $7.4 million at December 31, 2020, are
amortized over their estimated useful lives and are subject to impairment tests
if events or circumstances indicate a possible inability to realize the carrying
amount.

The initial recording and subsequent impairment testing of goodwill requires
subjective judgments concerning estimates of the fair value of the acquired
assets. The goodwill impairment test is performed by comparing the fair value of
the reporting unit with its carrying amount, including goodwill. If the fair
value of the reporting unit exceeds its carrying amount, goodwill of the
reporting unit is considered not impaired. An impairment loss would be recorded
for the amount by which the carrying amount exceeds the reporting unit's fair
value, limited to the total amount of goodwill allocated to that reporting
unit. Trustmark performed an annual impairment test of goodwill for reporting
units contained in both the General Banking and Insurance Segments as of October
1, 2020, 2019, and 2018, respectively, which indicated that no impairment charge
was required. The impairment test for the General Banking Segment utilized
valuations based on comparable deal values for financial institutions while the
test for the Insurance Segment utilizes varying valuation scenarios for the
multiple of earnings before interest, income taxes, depreciation and
amortization method based on recent acquisition activity. Based on this
analysis, Trustmark concluded that the fair value of the reporting units
exceeded the carrying value for both the General Banking Segment and the
Insurance Segment; therefore, no impairment charge was required. Significant
changes in future profitability and value of its reporting units could affect
Trustmark's impairment evaluation.

The carrying amount of Trustmark's identifiable intangible assets subject to
amortization is not recoverable if it exceeds the sum of the undiscounted cash
flows expected to result from the use and eventual disposition. That assessment
is based on the carrying amount of the intangible assets subject to amortization
at the date it is tested for recoverability. Intangible assets subject to
amortization shall be tested for recoverability whenever events or changes in
circumstances indicate that its carrying amount may not be recoverable.

Fair values may be determined using market prices, comparison to similar assets,
market multiples and other determinants. Factors that may significantly affect
the estimates include, among others, competitive forces, customer behavior and
attrition, changes in revenue growth trends and specific industry or market
sector conditions. Other key judgments in accounting for intangibles include
determining the useful life of the particular asset and classifying assets as
either goodwill (which does not require amortization) or identifiable intangible
assets (which does require amortization).

Contingent Liabilities

Trustmark estimates contingent liabilities based on Management's evaluation of
the probability of outcomes and their ability to estimate the range of
exposure. As stated in FASB ASC Topic 450, "Contingencies," a liability is
contingent if the amount is not presently known but may become known in the
future as a result of the occurrence of some uncertain future event. Accounting
standards require that a liability be recorded if Management determines that it
is probable that a loss has occurred, and the loss can be reasonably
estimated. It is implicit in this standard that it must be probable that the
loss will be confirmed by some future event. As part of the estimation process,
Management is required to make assumptions about matters that are, by their
nature, highly uncertain. The assessment of contingent liabilities, including
legal contingencies and income tax liabilities, involves the use of critical
estimates, assumptions and judgments. Management's estimates are based on their
belief that future events will validate the current assumptions regarding the
ultimate outcome of these exposures. However, there can be no assurance that
future events, such as court decisions or Internal Revenue Service (IRS)
positions, will not differ from Management's assessments. Whenever practicable,
Management consults with outside experts (attorneys, consultants, claims
administrators, etc.) to assist with the gathering and evaluation of information
related to contingent liabilities.

                                       39

--------------------------------------------------------------------------------

Recent Legislative and Regulatory Developments

For information regarding legislation and regulation applicable to Trustmark,
see the section captioned "Supervision and Regulation" included in Part I. Item
1. - Business of this report.

Non-GAAP Financial Measures

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

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

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

                                       40

--------------------------------------------------------------------------------

The following table reconciles Trustmark's calculation of these measures to
amounts reported under GAAP for the periods presented ($ in thousands, except
per share data):

                                                                    Years Ended December 31,
TANGIBLE EQUITY                                              2020             2019             2018
AVERAGE BALANCES
Total shareholders' equity                               $  1,681,587     $  1,622,013     $  1,586,877
Less:  Goodwill                                              (383,582 )       (379,627 )       (379,627 )
 Identifiable intangible assets                                (8,060 )         (9,212 )        (13,751 )
Total average tangible equity                            $  1,289,945     $  1,233,174     $  1,193,499
PERIOD END BALANCES
Total shareholders' equity                               $  1,741,117     $  1,660,702     $  1,591,453
Less:  Goodwill                                              (385,270 )       (379,627 )       (379,627 )
 Identifiable intangible assets                                (7,390 )         (7,343 )        (11,112 )
Total tangible equity                    (a)             $  1,348,457     $  1,273,732     $  1,200,714

TANGIBLE ASSETS
Total assets                                             $ 16,551,840     $ 13,497,877     $ 13,286,460
Less:  Goodwill                                              (385,270 )       (379,627 )       (379,627 )
 Identifiable intangible assets                                (7,390 )         (7,343 )        (11,112 )
Total tangible assets                    (b)             $ 16,159,180     $ 13,110,907     $ 12,895,721
Risk-weighted assets                     (c)             $ 12,017,378     $ 11,002,877     $ 10,803,313

NET INCOME ADJUSTED FOR INTANGIBLE
AMORTIZATION
Net income                                               $    160,025     $    150,460     $    149,584
Plus:  Intangible amortization net of
tax                                                             2,289            3,088            3,938
Net income adjusted for intangible
amortization                                             $    162,314     $    153,548     $    153,522
Period end common shares outstanding     (d)               63,424,526       64,200,111       65,834,395
TANGIBLE EQUITY MEASUREMENTS
Return on average tangible equity (1)                           12.58 %          12.45 %          12.86 %
Tangible equity/tangible assets          (a)/(b)                 8.34 %           9.72 %           9.31 %
Tangible equity/risk-weighted assets     (a)/(c)                11.22 %          11.58 %          11.11 %
Tangible book value                      (a)/(d)*1,000   $      21.26     $      19.84     $      18.24
COMMON EQUITY TIER 1 CAPITAL (CET1) -
BASEL III
Total shareholders' equity                               $  1,741,117     $  1,660,702     $  1,591,453
CECL transition adjustment (2)                                 31,199                -                -
AOCI-related adjustments                                        1,051           23,600           55,679
CET1 adjustments and deductions:
Goodwill net of associated deferred tax
liabilities (DTLs)                                           (371,333 )       (365,738 )       (365,779 )
Other adjustments and deductions for
CET1 (3)                                                       (6,190 )         (5,896 )         (9,815 )
CET1 capital                             (e)                1,395,844        1,312,668        1,271,538
Additional tier 1 capital instruments
plus related surplus                                           60,000           60,000           60,000
Tier 1 capital                                           $  1,455,844     $  1,372,668     $  1,331,538
Common equity tier 1 risk-based capital
ratio                                    (e)/(c)                11.62 %          11.93 %          11.77 %

(1) Calculated using net income adjusted for intangible amortization divided by

     total average tangible equity.


(2)  Trustmark elected the five-year phase-in transition period related to
     adopting FASB ASU 2016-13 for regulatory capital purposes.


(3)  Includes other intangible assets, net of DTLs, disallowed deferred tax

assets, threshold deductions and transition adjustments, as applicable.

Significant Non-routine Transactions

Trustmark discloses certain non-GAAP financial measures, including net income
adjusted for significant non-routine transactions, because Management uses these
measures for business planning purposes, including to manage Trustmark's
business against internal projected results of operations and to measure
Trustmark's performance. Trustmark views net income adjusted for significant
non-routine transactions as a measure of its core operating business, which
excludes the impact of the items detailed below, as these items are generally
not operational in nature. This non-GAAP measure also provides another basis for
comparing period-to-period results as presented in the accompanying selected
financial data table and the audited consolidated financial statements by
excluding potential differences caused by non-operational and unusual or
non-recurring items. Readers are cautioned that these adjustments are not
permitted under GAAP. Trustmark encourages readers to consider its audited
consolidated financial statements and the notes related thereto, included in
Part II. Item 8. - Financial Statements and Supplementary Data of this report,
in their entirety, and not to rely on any single financial measure.

                                       41

--------------------------------------------------------------------------------

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



                                                                          Years Ended December 31,
                                                    2020                            2019                            2018
                                         Amount        Diluted EPS        Amount        Diluted EPS       Amount        Diluted EPS
Net Income (GAAP)                       $ 160,025     $         2.51     $ 150,460     $        2.32     $ 149,584     $        2.21

Significant non-routine transactions:
Voluntary early retirement program          3,281               0.05             -                 -             -                 -

Net Income adjusted for significant

  non-routine transactions (Non-GAAP)   $ 163,306     $         2.56     $ 150,460     $        2.32     $ 149,584     $        2.21

                                        Reported         Adjusted        Reported        Adjusted        Reported        Adjusted
                                         (GAAP)         (Non-GAAP)        (GAAP)        (Non-GAAP)        (GAAP)        (Non-GAAP)
Return on average equity                     9.52 %             9.69 %        9.28 %             n/a          9.43 %             n/a
Return on average tangible equity           12.58 %            12.81 %       12.45 %             n/a         12.86 %             n/a
Return on average assets                     1.05 %             1.07 %        1.11 %             n/a          1.11 %             n/a

Voluntary Early Retirement Program

During the first quarter of 2020, Trustmark completed a voluntary early
retirement program and incurred one-time charge of $4.4 million ($4.3 million of
non-routine salaries and employee benefits expense and $102 thousand of other
miscellaneous expense) related to this program.

Results of Operations

Net Interest Income

Net interest income is the principal component of Trustmark's income stream and
represents the difference, or spread, between interest and fee income generated
from earning assets and the interest expense paid on deposits and borrowed
funds. Fluctuations in interest rates, as well as volume and mix changes in
earning assets and interest-bearing liabilities, can materially impact net
interest income. The net interest margin is computed by dividing fully taxable
equivalent (FTE) net interest income by average interest-earning assets and
measures how effectively Trustmark utilizes its interest-earning assets in
relationship to the interest cost of funding them. The accompanying Yield/Rate
Analysis Table shows the average balances for all assets and liabilities of
Trustmark and the interest income or expense associated with earning assets and
interest-bearing liabilities. The yields and rates have been computed based upon
interest income and expense adjusted to a FTE basis using the federal statutory
corporate tax rate in effect for each of the periods shown. Loans on nonaccrual
have been included in the average loan balances, and interest collected prior to
these loans having been placed on nonaccrual has been included in interest
income. Loan fees included in interest associated with the average LHFS and LHFI
balances are immaterial.

Net interest income-FTE for the year ended December 31, 2020 decreased $906
thousand, or 0.2%, when compared with the year ended December 31, 2019. The net
interest margin for 2020 decreased 43 basis points to 3.19% when compared to
2019. The net interest margin excluding PPP and acquired loans, which equals the
reported net interest income-FTE excluding interest and fees on PPP and acquired
loans, as a percentage of average earning assets excluding average PPP and
acquired loans, was 3.15% for 2020, a decrease of 43 basis points when compared
to 2019. The decrease in the net interest margin for 2020 was principally due to
declines in the yield on the LHFI and LHFS and securities portfolios and the
acquired loans that were transferred to LHFI as a result of the adoption of FASB
ASC Topic 326, partially offset by lower costs of interest-bearing deposits and
the addition of the PPP loans.

As of December 31, 2020, TNB had 7,398 PPP loans outstanding totaling $623.0
million. Net of deferred fees and costs of $12.9 million, PPP loans totaled
$610.1 million at December 31, 2020. Processing fees earned by TNB as the
originating lender are being amortized over the life of the loans. Payments on
PPP loans are deferred until the date the SBA remits the borrower's loan
forgiveness amount to the lender (or, if the borrower does not apply for loan
forgiveness, ten months after the end of the borrower's loan forgiveness covered
period). Trustmark cannot predict the amount of PPP loans that will be forgiven
in whole or in part by the SBA, nor can it predict the magnitude and timing of
the impact the PPP loans and related fees will have on Trustmark's net interest
margin. However, TNB's participation in the PPP will likely have a significant
impact on Trustmark's asset mix and net interest margin in 2021 as a result of
the addition of these low interest rate loans and the related processing fees
earned on these loans.

                                       42

--------------------------------------------------------------------------------
Average interest-earning assets for 2020 were $13.740 billion compared to
$12.131 billion for 2019, an increase of $1.609 billion, or 13.3%. The increase
in average earning assets during 2020 was primarily due to increases in average
loans (LHFS and LHFI) of $694.2 million, or 7.5%, average PPP loans of $646.7
million and average other earning assets of $416.5 million, which were partially
offset by decreases in average securities of $50.4 million, or 2.0%, and average
acquired loans of $88.9 million. The increase in average loans (LHFS and LHFI)
was primarily attributable to the $488.9 million, or 5.2%, increase in the LHFI
portfolio and a $220.6 million, or 97.5%, increase in LHFS when balances at
December 31, 2020 are compared to balances at December 31, 2019. The increase in
LHFI was principally due to net growth in LHFI secured by real estate in
Trustmark's Texas, Alabama, Mississippi and Tennessee market regions, partially
offset by declines in commercial and industrial LHFI in the Mississippi,
Tennessee and Alabama market regions. The increase in LHFS was principally due
to the increase in mortgage loan originations, primarily due to lower interest
rates on mortgage loans. The increase in average other earning assets when 2020
is compared to 2019 was primarily due to an increase in interest-bearing
deposits due from banks, principally related to excess reserves held at the FRB
as a result of the increase in customer deposit account balances. The decrease
in average securities when 2020 is compared to 2019 was primarily due to calls,
maturities and pay-downs of the underlying loans of government-sponsored
enterprise (GSE) guaranteed securities, partially offset by purchase of
securities available for sale. The decline in average acquired loans was due to
the acquired loans that were transferred to LHFI as PCD loans on January 1, 2020
as part of Trustmark's adoption of FASB ASC Topic 326.

During 2020, interest income-FTE totaled $480.4 million, a decrease of $43.0
million, or 8.2%, while the yield on total earning assets declined 81 basis
points to 3.50% when compared to 2019. The decrease in interest income-FTE in
2020 reflects declines in all categories of interest income partially offset by
the addition of interest and fees on PPP loans. Interest and fees on PPP loans
totaled $26.6 million for the year ended December 31, 2020, while the yield on
these loans was 4.12%. During 2020, interest and fees on LHFS and LHFI-FTE
declined $50.0 million, or 11.1%, when compared to 2019, while the yield on
loans (LHFS and LHFI) decreased 84 basis points to 4.03% as a result of lower
interest rates. Interest and fees on acquired loans declined $8.4 million when
2020 is compared to 2019 due to the acquired loans that were transferred to LHFI
as PCD loans on January 1, 2020 as part of Trustmark's adoption of FASB ASC
Topic 326. During 2020, interest on securities-taxable decreased $6.4 million,
or 11.7%, while the yield on securities-taxable declined 24 basis points to
2.01% when compared to 2019, primarily due to the run off of maturing investment
securities and lower interest rates on securities available for sale purchased
during 2020. Other interest income declined $3.8 million, or 70.9%, when 2020 is
compared to 2019, while the yield on other earning assets declined to 0.24% for
2020 compared to 2.23% for 2019. The decline in other interest income and the
yield on other earning assets was principally due to the decline in the interest
rate paid on excess reserves held at the FRB.

Average interest-bearing liabilities for 2020 totaled $9.627 billion compared to
$8.741 billion for 2019, an increase of $886.3 million, or 10.1%. The increase
in average interest-bearing liabilities was primarily the result of the increase
in average interest-bearing deposits. Average interest-bearing deposits for 2020
increased $783.5 million, or 9.2%, when compared to 2019, primarily due to
growth in average interest-bearing demand deposits and savings deposits as
customers deposited proceeds from line draws, PPP loans and other COVID-19
related stimulus programs, partially offset by a decline in average time
deposits.

Interest expense for 2020 totaled $41.8 million, a decrease of $42.1 million, or
50.2%, when compared with 2019, while the rate on total interest-bearing
liabilities decreased 53 basis points to 0.43%. The decrease in total interest
expense for 2020 when compared to 2019 was primarily due to a decline in
interest on deposits. Interest on deposits decreased $41.7 million, or 52.7%,
while the rate on interest-bearing deposits decreased 53 basis points to 0.40%
when 2020 is compared to 2019, primarily due to lower interest rates.

                                       43

--------------------------------------------------------------------------------
The following table provides the tax equivalent basis yield or rate for each
component of the tax equivalent net interest margin for the periods presented ($
in thousands):



                                                                                         Years Ended December 31,
                                                       2020                                        2019                                        2018
                                        Average                       Yield/        Average                       Yield/        Average                       Yield/
                                        Balance        Interest        Rate         Balance        Interest        Rate         Balance        Interest        Rate

Assets

Interest-earning assets:
Federal funds sold and securities
purchased
  under reverse repurchase
agreements                            $        221     $       1         0.45 %   $      9,529     $     240         2.52 %   $        716     $      14         1.96 %
Securities available for sale:
Taxable                                  1,776,555        35,375         1.99 %      1,633,496        37,717         2.31 %      1,990,332        45,380         2.28 %
Nontaxable                                  10,737           384         3.58 %         29,948         1,116         3.73 %         47,112         1,636         3.47 %
Securities held to maturity:
Taxable                                    626,983        12,875         2.05 %        799,726        16,932         2.12 %        950,836        20,702         2.18 %
Nontaxable                                  25,366           982         3.87 %         26,874         1,050         3.91 %         30,336         1,194         3.94 %
PPP loans                                  646,680        26,643         4.12 %              -             -            -                -             -            -
Loans (LHFS and LHFI)                    9,996,192       402,539         4.03 %      9,302,037       452,578         4.87 %      8,797,498       408,175         4.64 %
Acquired loans                                   -             -            -           88,903         8,373         9.42 %        179,808        17,115         9.52 %
Other earning assets                       657,096         1,559        

0.24 % 240,622 5,363 2.23 % 197,431 4,196 2.13 % Total interest-earning assets

           13,739,830       480,358         3.50 %     12,131,135       523,369         4.31 %     12,194,069       498,412         4.09 %
Other assets                             1,592,393                                   1,452,012                                   1,364,420
Allowance for loan losses                 (108,567 )                                   (83,559 )                                   (85,252 )
Total Assets                          $ 15,223,656                                $ 13,499,588                                $ 13,473,237

Liabilities and Shareholders'
Equity
Interest-bearing liabilities:
Interest-bearing demand deposits      $  3,584,249         9,985         0.28 %   $  3,051,170        35,428         1.16 %   $  2,543,463        18,479         0.73 %
Savings deposits                         4,149,860        13,481         0.32 %      3,650,178        19,462         0.53 %      3,720,987        17,980         0.48 %
Time deposits                            1,534,673        14,021         0.91 %      1,783,928        24,281         1.36 %      1,823,562        17,477         0.96 %
Federal funds purchased and
securities sold
  under repurchase agreements              151,805           755         0.50 %        110,915         1,420         1.28 %        329,649         4,788         1.45 %
Other borrowings                           133,602         1,389         1.04 %         82,476           697         0.85 %        317,687         5,016         1.58 %
Subordinated notes                          10,766           474         4.40 %              -             -            -                -             -            -
Junior subordinated debt securities         61,856         1,693         2.74 %         61,856         2,615         4.23 %         61,856         2,452         3.96 %
Total interest-bearing liabilities       9,626,811        41,798         0.43 %      8,740,523        83,903         0.96 %      8,797,204        66,192         0.75 %
Noninterest-bearing demand deposits      3,646,860                                   2,918,836                                   2,892,033
Other liabilities                          268,398                                     218,216                                     197,123
Shareholders' equity                     1,681,587                                   1,622,013                                   1,586,877
Total Liabilities and Shareholders'
Equity                                $ 15,223,656                                $ 13,499,588                                $ 13,473,237

Net Interest Margin                                      438,560         3.19 %                      439,466         3.62 %                      432,220         3.54 %

Less tax equivalent adjustments:
Investments                                                  287                                         455                                         594
Loans                                                     11,736                                      12,422                                      12,206
Net Interest Margin per
Consolidated
  Statements of Income                                 $ 426,537                                   $ 426,589                                   $ 419,420




                                       44

--------------------------------------------------------------------------------


The table below shows the change from year to year for each component of the tax
equivalent net interest margin in the amount generated by volume changes and the
amount generated by changes in the yield or rate (tax equivalent basis) for the
periods presented ($ in thousands):

                                           2020 Compared to 2019                    2019 Compared to 2018
                                        Increase (Decrease) Due To:              Increase (Decrease) Due To:
                                                  Yield/                                     Yield/
                                    Volume         Rate           Net          Volume         Rate         Net
Interest earned on:
Federal funds sold and
securities purchased under

reverse repurchase agreements $ (130 ) $ (109 ) $ (239 )

  $      221     $      5     $    226
Securities available for sale:
Taxable                               3,142         (5,484 )      (2,342 )       (8,252 )        589       (7,663 )
Nontaxable                             (689 )          (43 )        (732 )         (634 )        114         (520 )
Securities held to maturity:
Taxable                              (3,519 )         (538 )      (4,057 )       (3,213 )       (557 )     (3,770 )
Nontaxable                              (57 )          (11 )         (68 )         (135 )         (9 )       (144 )
PPP loans                            26,643              -        26,643              -            -            -
Loans, net of unearned income
(LHFS and LHFI)                      32,082        (82,121 )     (50,039 )       23,818       20,585       44,403
Acquired loans                       (4,187 )       (4,186 )      (8,373 )       (8,564 )       (178 )     (8,742 )
Other earning assets                  3,808         (7,612 )      (3,804 )          961          206        1,167
Total interest-earning assets        57,093       (100,104 )     (43,011 )  

4,202 20,755 24,957

Interest paid on:
Interest-bearing demand deposits      5,290        (30,733 )     (25,443 )        4,290       12,659       16,949
Savings deposits                      2,400         (8,381 )      (5,981 )         (346 )      1,828        1,482
Time deposits                        (3,046 )       (7,214 )     (10,260 )         (385 )      7,189        6,804
Federal funds purchased and
securities sold under
  repurchase agreements                 401         (1,066 )        (665 )       (2,863 )       (505 )     (3,368 )
Other borrowings                        508            184           692         (2,659 )     (1,660 )     (4,319 )
Subordinated notes                      474              -           474              -            -            -
Junior subordinated debt
securities                                -           (922 )        (922 )            -          163          163
Total interest-bearing
liabilities                           6,027        (48,132 )     (42,105 )       (1,963 )     19,674       17,711
Change in net interest income on
a tax
  equivalent basis                 $ 51,066     $  (51,972 )   $    (906 )   $    6,165     $  1,081     $  7,246




The change in interest due to both volume and yield or rate has been allocated
to change due to volume and change due to yield or rate in proportion to the
absolute value of the change in each. Tax-exempt income has been adjusted to a
tax equivalent basis using the federal statutory corporate tax rate in effect
for each of the three years presented. The balances of nonaccrual loans and
related income recognized have been included for purposes of these computations.

Provision for Credit Losses

Trustmark adopted FASB ASC Topic 326, in accordance with the amendments of FASB
ASU 2016-13, effective January 1, 2020. The guidance in FASB ASC 326 replaces
Trustmark's previous incurred loss methodology with a methodology that reflects
the current expected credit losses and requires consideration of a broader range
of reasonable and supportable information to determine credit losses. The
provision for credit losses is the amount necessary to maintain the allowance
for credit losses, LHFI at the amount of expected credit losses inherent within
the LHFI portfolio. The amount of provision for credit losses and the related
ACL for LHFI are based on Trustmark's ACL methodology.

The provision for credit losses totaled $36.1 million for 2020, compared to a
provision for loan losses, LHFI of $10.8 million for 2019 and $18.0 million for
2018. The provision for credit losses for the year ended December 31, 2020
primarily reflected net changes in the economic forecast due to the current and
anticipated negative effects of the COVID-19 pandemic on the overall economy and
macroeconomic factors. See the section captioned "Allowance for Credit Losses,
LHFI" for information regarding Trustmark's ACL methodology as well as further
analysis of the provision for credit losses.

                                       45

--------------------------------------------------------------------------------

Noninterest Income

Noninterest income represented 39.2%, 30.5% and 30.6% of total revenue, before
securities gains (losses), net in 2020, 2019 and 2018, respectively. The
following table provides the comparative components of noninterest income for
the periods presented ($ in thousands):

                                                                   Years Ended December 31,
                                                2020                         2019                         2018
                                       Amount        % Change       Amount 

% Change Amount % Change Service charges on deposit accounts $ 32,289 -24.2 % $ 42,603

           -2.5 %   $  43,702           -0.7 %
Bank card and other fees                 31,022           -2.2 %      31,736            9.8 %      28,905            2.2 %
Mortgage banking, net                   125,822            n/m        29,822          -14.0 %      34,674           16.0 %
Insurance commissions                    45,176            6.6 %      42,396            4.7 %      40,481            6.1 %
Wealth management                        31,625            3.1 %      30,679            1.1 %      30,338              -
Other, net                                8,659          -11.7 %       9,809           45.6 %       6,736          -51.7 %
Total Noninterest Income              $ 274,593           46.8 %   $ 187,045            1.2 %   $ 184,836            0.1 %

n/m - percentage changes greater than +/- 100% are not considered meaningful

Changes in various components of noninterest income for the year ended December 31, 2020 are discussed in further detail below. For analysis of Trustmark's insurance commissions and wealth management income, please see the section captioned "Results of Segment Operations."

Service Charges on Deposit Accounts

The decline in service charges on deposit accounts when 2020 is compared to 2019 was principally due to declines in NSF and overdraft fees on consumer and commercial demand deposit accounts and consumer interest checking accounts, primarily due to declines in overdraft occurrences as a result of COVID-19 related business closures, stay-at-home orders and government stimulus programs.

Mortgage Banking, Net

The following table illustrates the components of mortgage banking, net included in noninterest income for the periods presented ($ in thousands):

                                                                Years Ended December 31,
                                             2020                         2019                         2018
                                    Amount        % Change       Amount        % Change       Amount        % Change
Mortgage servicing income, net     $  23,681            3.5 %   $  22,883            2.9 %   $  22,248            2.7 %
Change in fair value-MSR from
runoff                               (16,588 )         40.2 %     (11,835 )          0.5 %     (11,774 )          9.2 %
Gain on sales of loans, net          110,903            n/m        30,296           39.0 %      21,800           16.2 %
Mortgage banking income before
net hedge
  ineffectiveness                    117,996            n/m        41,344           28.1 %      32,274            8.9 %
Change in fair value-MSR from
market changes                       (26,147 )         24.0 %     (21,078 )          n/m         7,342            n/m
Change in fair value of
derivatives                           33,973            n/m         9,556            n/m        (4,942 )          n/m
Net hedge ineffectiveness              7,826            n/m       (11,522 )          n/m         2,400            n/m
Mortgage banking, net              $ 125,822            n/m     $  29,822          -14.0 %   $  34,674           16.0 %

n/m - percentage changes greater than +/- 100% are not considered meaningful

The increase in mortgage banking, net when 2020 is compared to 2019 was
principally due to increases in gain on sales of loans, net and a positive net
hedge ineffectiveness. The positive net hedge ineffectiveness for the year ended
December 31, 2020 was primarily due to widening spreads between mortgage and
ten-year Treasury rates. Mortgage loan production totaled $2.985 billion for
2020 an increase of $1.222 billion, or 69.4%, when compared to 2019. Mortgage
loan production totaled $1.762 billion for 2019 an increase of $361.1 million,
or 25.8%, when compared to 2018. The increase in mortgage loan production during
2020 was primarily due to the increase in refinance activity driven by the low
interest rate environment. Loans serviced for others totaled $7.657 billion at
December 31, 2020, compared with $7.157 billion at December 31, 2019, and $6.835
billion at December 31, 2018.

Representing a significant component of mortgage banking income is gain on sales
of loans, net. The increase in the gain on sales of loans, net when 2020 is
compared to 2019 was primarily the result of higher profit margins in secondary
marketing activities and increases in the volume of loans sold and the mortgage
valuation adjustment. Loan sales increased $1.128 billion, or 80.4%, during

                                       46

--------------------------------------------------------------------------------
2020 to total $2.532 billion compared to an increase of $311.3 million, or
28.5%, during 2019 to total $1.404 billion. The increases in loan sales during
2020 and 2019 were principally due to increases in mortgage lending activity as
a result of lower interest rates.

Other Income, Net

The following table illustrates the components of other income, net included in noninterest income for the periods presented ($ in thousands):

                                                              Years Ended December 31,
                                            2020                        2019                        2018
                                    Amount       % Change       Amount       % Change       Amount       % Change
Partnership amortization for tax
credit purposes                    $ (5,700 )        -25.4 %   $ (7,644 )        -12.2 %   $ (8,707 )         -8.9 %
Increase in life insurance cash
surrender value                       6,881           -4.5 %      7,202            1.1 %      7,121           -0.1 %
Other miscellaneous income            7,478          -27.1 %     10,251           23.2 %      8,322          -49.2 %
Total other, net                   $  8,659          -11.7 %   $  9,809           45.6 %   $  6,736          -51.7 %




The decrease in other income, net when 2020 is compared to 2019 was primarily
due to a decline in other miscellaneous income, principally due to settlement
proceeds received during the fourth quarter of 2019 as well as declines in other
partnership investments and net gains on sales of premises and equipment in
2020, partially offset by a decrease in the amortization of tax credit
partnerships.

Noninterest Expense

The following table illustrates the comparative components of noninterest expense for the periods presented ($ in thousands):

                                                                Years Ended December 31,
                                             2020                         2019                         2018
                                    Amount        % Change       Amount        % Change       Amount        % Change
Salaries and employee benefits     $ 272,257            9.9 %   $ 247,717            4.1 %   $ 238,033            3.8 %
Services and fees                     83,816           14.3 %      73,315           10.4 %      66,382            9.0 %
Net occupancy-premises                26,489            1.3 %      26,149           -2.1 %      26,703            3.6 %
Equipment expense                     23,277           -1.9 %      23,733           -4.4 %      24,830            1.5 %
Other real estate expense:
Write-downs                            1,786          -29.8 %       2,544            n/m           873          -73.5 %
Net (gain)/loss on sale                 (897 )          n/m           291            n/m          (700 )        -66.5 %
Carrying costs                         1,067           -0.4 %       1,071          -41.4 %       1,829          -25.9 %
Total other real estate expense,
net                                    1,956          -49.9 %       3,906           95.1 %       2,002          -45.5 %
Credit loss expense for
off-balance sheet credit
exposures                              8,934          100.0 %           -              -             -              -
Other expense                         58,506            8.0 %      54,182           -5.7 %      57,465          -16.1 %
Total noninterest expense          $ 475,235           10.8 %   $ 429,002            3.3 %   $ 415,415           -3.4 %

n/m - percentage changes greater than +/- 100% are not considered meaningful

Changes in the various component of noninterest expense for the year ended
December 31, 2020 are discussed in further detail below. Management considers
disciplined expense management a key area of focus in the support of improving
shareholder value.

Salaries and Employee Benefits

During the first quarter of 2020, Trustmark completed a voluntary early
retirement program and incurred $4.3 million of non-routine salaries and
employee benefits expense related to this program. Excluding these non-routine
expenses, salaries and employee benefits increased $20.3 million, or 8.2%, when
2020 is compared to 2019. The increase in salaries and employee benefits
expense, excluding the non-routine expenses, for the year ended December 31,
2020 was principally due to higher commissions expense resulting from
improvements in mortgage production as well as an increase in salary expenses as
a result of an increase in performance incentives, general merit increases, an
increase in overtime pay and temporary compensation adjustments and one-time
payments to front-line associates as a result of the COVID-19 pandemic.

                                       47

--------------------------------------------------------------------------------

Services and Fees

The increase in services and fees when 2020 is compared to 2019 was primarily
due to increases in legal fees related to ongoing litigation matters and data
processing charges related to software due to continued investments in
technology to enhance growth and efficiency opportunities.

Other Real Estate Expense, Net

The decrease in other real estate expense, net for 2020 compared to 2019 was
principally due to an increase in net gains on sales of other real estate
properties as well as a decline in write-downs of other real estate. For
additional analysis of other real estate and foreclosure expenses, please see
the section captioned "Nonperforming Assets, Excluding PPP and Acquired Loans."

Credit Loss Expense Related to Off-Balance Sheet Credit Exposures

Trustmark adopted FASB ASC Topic 326, in accordance with the amendments of FASB
ASU 2016-13, effective January 1, 2020. The guidance in FASB ASC 326 replaces
Trustmark's previous incurred loss methodology with a methodology that reflects
the current expected credit losses and requires consideration of a broader range
of reasonable and supportable information to determine credit losses. FASB ASC
Topic 326 also requires Trustmark to estimate expected credit losses for
off-balance sheet credit exposures which are not unconditionally cancellable by
Trustmark. Trustmark maintains a separate ACL for off-balance sheet credit
exposures, including unfunded commitments and letters of credit. Adjustments to
the ACL on off-balance sheet credit exposures are recorded as noninterest
expense in credit loss expense related to off-balance sheet credit
exposures. The increase in the credit loss expense related to off-balance sheet
exposures for the year ended December 31, 2020 was primarily due to net changes
in the economic forecast due to the current and anticipated negative effects of
the COVID-19 pandemic on the overall economy and macroeconomic factors.

Other Expense

The following table illustrates the comparative components of other noninterest expense for the periods presented ($ in thousands):

                                                              Years Ended December 31,
                                            2020                        2019                        2018
                                    Amount       % Change       Amount       % Change       Amount       % Change
Loan expense                       $ 12,934           11.9 %   $ 11,554            4.2 %   $ 11,086            1.6 %
Amortization of intangibles           3,052          -25.9 %      4,116          -21.6 %      5,248          -14.9 %
FDIC assessment expense               6,090           -5.5 %      6,444          -31.7 %      9,429          -14.4 %
Other miscellaneous expense          36,430           13.6 %     32,068            1.2 %     31,702          -21.5 %
Total other expense                $ 58,506            8.0 %   $ 54,182           -5.7 %   $ 57,465          -16.1 %


The increase in other miscellaneous expense when 2020 is compared to 2019 was
principally due to the settlement proceeds received during the third quarter of
2019 related to the Trust Department and increases in other miscellaneous
charges, charitable contributions and sponsorships and property valuation
adjustments related to properties transferred to assets held for sale, partially
offset by a decline in travel and entertainment expenses as a result of travel
restrictions during the COVID-19 pandemic. The increase in loan expense for 2020
when compared to 2019 was primarily due to increases in appraisal fees.

Results of Segment Operations

Trustmark's operations are managed along three operating segments: General
Banking, Wealth Management and Insurance. A description of each segment and the
methodologies used to measure financial performance and financial information by
reportable segment are included in Note 21 - Segment Information located in Part
II. Item 8. - Financial Statements and Supplementary Data of this report. During
the first quarter of 2020, Trustmark revised the composition of its operating
segments by moving the Retail Private Banking Group from the General Banking
Segment to the Wealth Management Segment as a result of a change in supervision
of this group for segment reporting purposes. Prior periods include
reclassifications to conform to current period presentation.

The following table provides the net income by reportable segment for the periods presented ($ in thousands):

                                Years Ended December 31,
                            2020          2019          2018
General Banking           $ 145,939     $ 136,117     $ 137,800
Wealth Management             5,556         6,388         4,412
Insurance                     8,530         7,955         7,372
Consolidated Net Income   $ 160,025     $ 150,460     $ 149,584


                                       48

--------------------------------------------------------------------------------

General Banking

Net interest income for the General Banking Segment for 2020 increased $628
thousand, or 0.1%, when compared with 2019. The slight increase in net interest
income was principally due to a decline in interest on deposits and the addition
of interest and fees on PPP loans, largely offset by declines in all other
sources of interest income. Net interest income for the General Banking Segment
for 2019 increased $7.1 million, or 1.7%, when compared with 2018. The increase
in net interest income was principally due to increases in interest and fees on
LHFS and LHFI and decreases in other interest expense and interest expense on
federal funds purchased and repurchase agreements, which were largely offset by
an increase in interest on deposits and declines in interest on securities and
interest and fees on acquired loans. The provision for credit losses for 2020
totaled $36.1 million compared to a provision for loan losses, net of $10.6
million during 2019 and $17.1 million during 2018. For more information on these
net interest income items, please see the sections captioned "Financial
Highlights" and "Results of Operations."

Noninterest income for the General Banking Segment increased $83.9 million, or
73.8%, during 2020 compared to a decrease of $174 thousand, or 0.2%, during
2019. The increase in noninterest income for the General Banking Segment during
2020 was primarily due to increase in mortgage banking, net, partially offset by
a decline in service charges on deposit accounts. The slight decrease in
noninterest income for the General Banking Segment during 2019 was primarily due
to the declines in mortgage banking, net and service charges on deposit
accounts, which were largely offset by increases in bank card and other fees and
other noninterest income, net. Noninterest income for the General Banking
Segment represented 32.0% of total revenue for 2020, 21.3% for 2019 and 21.6%
for 2018. Noninterest income for the General Banking Segment includes service
charges on deposit accounts; bank card and other fees; mortgage banking, net;
other income, net and securities gains (losses), net. For more information on
these noninterest income items, please see the analysis included in the section
captioned "Noninterest Income."

Noninterest expense for the General Banking Segment increased $42.8 million, or
11.6%, during 2020 compared to an increase of $14.8 million, or 4.2%, during
2019. The increase in noninterest expense for the General Banking Segment for
2020 was principally due to increases in salaries and employee benefits,
services and fees and the addition of the credit loss expense related to
off-balance sheet credit exposures as a result of the adoption of FASB ASC Topic
326. During the first quarter of 2020, Trustmark completed a voluntary early
retirement program which resulted in non-routine transaction expenses of $4.4
million ($4.3 million of salaries and employee benefits expense and $102
thousand of other expense). The increase in noninterest expense for 2019 was
principally due to increases in salaries and employee benefits, services and
fees, other real estate expense, net and charitable contributions related to the
Mississippi Children's Promise Act. For more information on these noninterest
expense items, please see the analysis included in the section captioned
"Noninterest Expense."

Wealth Management

During 2020, net income for the Wealth Management Segment decreased $832
thousand, or 13.0%, compared to an increase of $2.0 million, or 44.8%, during
2019. The decrease in net income for the Wealth Management Segment during 2020
was principally due to an increase in noninterest expense as well as a decline
in net interest income, partially offset by an increase in noninterest
income. Net interest income for the Wealth Management Segment decreased $668
thousand, or 9.9%, during 2020 compared to an increase of $11 thousand, or 0.2%,
during 2019. Noninterest income for the Wealth Management Segment, which
includes income related to investment management, trust and brokerage services,
increased $774 thousand, or 2.5%, during 2020, principally due to an increase in
fees from brokerage services. Noninterest income for the Wealth Management
Segment increased $440 thousand, or 1.5%, during 2019. The slight increase in
noninterest income for the Wealth Management Segment during 2019 was primarily
attributable to an increase in trust management fees. Noninterest expense
increased $1.4 million, or 5.0%, during 2019 compared to a decrease of $2.5
million, or 8.0%, during 2019. The increase in noninterest expense for the
Wealth Management Segment for 2020 was principally due to the comparison impact
of insurance settlement proceeds received during 2019 related to a legal case
settled in 2018, which was partially offset by declines in outside services and
fees and salary and employee benefit expense. The decrease in noninterest
expense for the Wealth Management Segment during 2019 was principally due to a
decrease in professional service fees, as well as insurance settlement proceeds
received during 2019 related to a legal case settled in 2018.

At December 31, 2020 and 2019, Trustmark held assets under management and administration of $11.463 billion and $11.782 billion and brokerage assets of $2.148 billion and $1.993 billion, respectively.

Insurance

Net income for the Insurance Segment during 2020 increased $575 thousand, or
7.2%, compared to an increase of $583 thousand, or 7.9%, during
2019. Noninterest income for the Insurance Segment, which predominately consists
of insurance commissions, increased $2.8 million, or 6.7%, during 2020, compared
to an increase of $1.9 million, or 4.8%, during 2019. The increase in
noninterest income for the Insurance Segment during 2020 was primarily due to
new business commission volume in the property and casualty business and
increases in other commission income. The increase in noninterest income for the
Insurance Segment during 2019 was primarily due to new insurance commission
volume across all lines of business.

                                       49

--------------------------------------------------------------------------------
Noninterest expense for the Insurance Segment increased $2.0 million, or 6.3%,
during 2020 and $1.3 million, or 4.2%, during 2019. The increase in noninterest
expense for the Insurance Segment for 2020 was principally due to higher
salaries expense resulting from modest general merit increases and higher
commission expense due to improvements in business volumes and associates added
as a result of an insurance agency acquired during the period, as well as
increases in outside services and fees and other miscellaneous expense. The
increases in noninterest expense for the Insurance Segment during 2019 was
primarily due to higher commission expense due to improvements in business
volumes and higher salaries expense resulting from modest general merit
increases.

Trustmark performed an annual impairment test of the book value of goodwill held
in the Insurance Segment as of October 1, 2020, 2019, and 2018. Based on this
analysis, Trustmark concluded that no impairment charge was required. A renewed
period of falling prices and suppressed demand for the products of the Insurance
Segment could result in impairment of goodwill in the future. FBBI's ability to
maintain the current income trend is dependent on the success of the
subsidiary's continued initiatives to attract new business through cross
referrals between practice units and bank relationships and seeking new business
in other markets.

FBBI acquired Boyles Moak Insurance Services (Boyles), a Mississippi based
insurance agency, for $5.0 million on May 1, 2020. The acquisition was accounted
for in accordance with FASB ASC Topic 805, "Business Combinations." Accordingly,
the assets and liabilities, both tangible and intangible, were recorded at their
estimated fair values as of the acquisition date. The excess of the
consideration paid over the estimated fair value of the net assets acquired was
$3.6 million, which was recorded as goodwill under FASB ASC Topic 805. The
identifiable intangible assets acquired represented insurance customer
relationships and trade name and totaled $2.1 million, the estimated fair value
at the acquisition date.

Income Taxes

For the year ended December 31, 2020, Trustmark's combined effective tax rate
was 15.7% compared to 13.4% in 2019 and 13.0% in 2018. Trustmark's effective tax
rate continues to be less than the statutory rate primarily due to various
tax-exempt income items and its utilization of income tax credit programs.
Trustmark invests in partnerships that provide income tax credits on a Federal
and/or State basis (i.e., new market tax credits, low income housing tax credits
or historical tax credits).  The income tax credits related to these
partnerships are utilized as specifically allowed by income tax law and are
recorded as a reduction in income tax expense.

Financial Condition

Earning assets serve as the primary revenue streams for Trustmark and are
comprised of securities, loans, federal funds sold, securities purchased under
reverse repurchase agreements and other earning assets. Average earning assets
totaled $13.740 billion, or 90.3% of total average assets, at December 31, 2020,
compared with $12.131 billion, or 89.9% of total average assets, at December 31,
2019, an increase of $1.609 billion, or 13.3%.

Securities

The securities portfolio is utilized by Management to manage interest rate risk,
generate interest income, provide liquidity and use as collateral for public and
wholesale funding. Risk and return can be adjusted by altering duration,
composition and/or balance of the portfolio. The weighted-average life of the
portfolio at December 31, 2020 and 2019 was 2.9 and 3.5 years, respectively.

When compared with December 31, 2019, total investment securities increased by
$189.4 million, or 8.1%, during 2020. This increase resulted primarily from
purchases of available for sale securities partially offset by calls, maturities
and pay-downs of the underlying loans of GSE guaranteed securities. Trustmark
sold no securities during 2020 or 2019.

During 2013, Trustmark reclassified approximately $1.099 billion of securities
available for sale as securities held to maturity to mitigate the potential
adverse impact of a rising interest rate environment on the fair value of the
available for sale securities and the related impact on tangible common
equity. The resulting net unrealized holding loss is being amortized over the
remaining life of the securities as a yield adjustment in a manner consistent
with the amortization or accretion of the original purchase premium or discount
on the associated security. At December 31, 2020, the net unamortized,
unrealized loss on the transferred securities included in accumulated other
comprehensive income (loss), net of tax, (AOCI) in the accompanying consolidated
balance sheets totaled $8.9 million ($6.7 million net of tax) compared to $12.1
million ($9.1 million net of tax) at December 31, 2019.

Available for sale securities are carried at their estimated fair value with
unrealized gains or losses recognized, net of taxes, in AOCI, a separate
component of shareholders' equity. At December 31, 2020, available for sale
securities totaled $1.992 billion, which represented 78.7% of the securities
portfolio, compared to $1.602 billion, or 68.5%, at December 31, 2019. At
December 31, 2020, unrealized gains, net on available for sale securities
totaled $32.0 million compared to unrealized gains, net of $1.4 million at
December 31, 2019. At December 31, 2020, available for sale securities consisted
of obligations of states and political subdivisions, GSE guaranteed
mortgage-related securities and direct obligations of government agencies and
GSEs.

                                       50

--------------------------------------------------------------------------------
Held to maturity securities are carried at amortized cost and represent those
securities that Trustmark both intends and has the ability to hold to
maturity. At December 31, 2020, held to maturity securities totaled $538.1
million and represented 21.3% of the total securities portfolio, compared with
$738.1 million, or 31.5%, at December 31, 2019.

The table below indicates the amortized cost of securities available for sale
and held to maturity by type at December 31, 2020, 2019 and 2018 ($ in
thousands):

                                                                  December 31,
                                                      2020            2019            2018
Securities available for sale
U.S. Government agency obligations                 $    18,378     $    22,965     $    31,235
Obligations of states and political subdivisions         5,198          24,952          50,503
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA                                      55,193          69,196          69,648
Issued by FNMA and FHLMC                             1,421,861         714,350         685,520
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC or GNMA            409,883         656,162         830,129
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC or GNMA             49,260         113,359         187,494
Total securities available for sale                $ 1,959,773     $ 

1,600,984 $ 1,854,529

Securities held to maturity
U.S. Government agency obligations                 $         -     $     3,781     $     3,736
Obligations of states and political subdivisions        26,584          31,781          35,783
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA                                       7,598          10,820          12,090
Issued by FNMA and FHLMC                                67,944          96,631         115,133
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC or GNMA            360,361         485,324         578,827
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC or GNMA             75,585         109,762         164,074
Total securities held to maturity                  $   538,072     $   738,099     $   909,643




                                       51

--------------------------------------------------------------------------------


The following table details the maturities of securities available for sale and
held to maturity using the amortized cost at December 31, 2020, and the
weighted-average yield for each range of maturities (tax equivalent basis) ($ in
thousands):



                                                                                              Maturing
                                                                After One,                  After Five,
                                       Within                   But Within                  But Within                     After
                                      One Year      Yield       Five Years      Yield        Ten Years       Yield       Ten Years      Yield         Total
Securities available for sale
U.S. Government agency obligations    $   1,570       4.10 %   $        210

3.05 % $ 2,031 1.97 % $ 14,567 2.32 % $ 18,378 Obligations of states and political

  subdivisions                                -          -            1,317       2.63 %               -          -           3,881       4.52 %       

5,198

Mortgage-backed securities
Residential mortgage pass-through
  securities
Guaranteed by GNMA                            -          -            2,033       1.76 %           2,193       2.48 %        50,967       2.03 %        55,193
Issued by FNMA and FHLMC                      -          -           16,662

2.60 % 275,628 1.82 % 1,129,571 1.28 % 1,421,861 Other residential mortgage-backed

securities

Issued or guaranteed by FNMA,

  FHLMC, or GNMA                            120       2.00 %            663 

1.19 % 17,800 2.25 % 391,300 2.13 % 409,883 Commercial mortgage-backed

securities

Issued or guaranteed by FNMA,

  FHLMC, or GNMA                              -          -           43,772       2.31 %           1,374       3.41 %         4,114       2.97 %       

49,260

Total securities available for sale $ 1,690 3.95 % $ 64,657

2.36 % $ 299,026 1.85 % $ 1,594,400 1.53 % $ 1,959,773

Securities held to maturity
Obligations of states and political
  subdivisions                        $  19,237       4.05 %   $      7,347       4.16 %   $           -          -     $         -          -     $   

26,584

Mortgage-backed securities
Residential mortgage pass-through
  securities
Guaranteed by GNMA                            -          -                -          -                 -          -           7,598       2.02 %         7,598
Issued by FNMA and FHLMC                      -          -                -          -            25,782       1.72 %        42,162       1.86 %        67,944

Other residential mortgage-backed

  securities
Issued or guaranteed by FNMA,
  FHLMC, or GNMA                              -          -                -          -                 -          -         360,361       1.88 %       360,361
Commercial mortgage-backed
  securities
Issued or guaranteed by FNMA,
  FHLMC, or GNMA                              -          -           62,375       2.29 %               -          -          13,210       2.47 %        75,585

Total securities held to maturity $ 19,237 4.05 % $ 69,722

      2.48 %   $      25,782       1.72 %   $   423,331       1.90 %   $   538,072




Mortgage-backed securities and collateralized mortgage obligations are included
in maturity categories based on their stated maturity date. Expected maturities
may differ from contractual maturities because issuers may have the right to
call or prepay obligations.

Management continues to focus on asset quality as one of the strategic goals of
the securities portfolio, which is evidenced by the investment of approximately
98.7% of the portfolio in GSE-backed obligations and other Aaa-rated securities
as determined by Moody's Investors Services (Moody's). None of the securities
owned by Trustmark are collateralized by assets which are considered
sub-prime. Furthermore, outside of stock ownership in the FHLB of Dallas, FHLB
of Atlanta and Federal Reserve Bank of Atlanta, Trustmark does not hold any
other equity investment in a GSE.

As of December 31, 2020, Trustmark did not hold securities of any one issuer
with a carrying value exceeding ten percent of total shareholders' equity, other
than certain GSEs which are exempt from inclusion. Management continues to
closely monitor the credit quality as well as the ratings of the debt and
mortgage-backed securities issued by the GSEs and held in Trustmark's securities
portfolio.

                                       52

--------------------------------------------------------------------------------

The following table presents Trustmark's securities portfolio by amortized cost and estimated fair value and by credit rating, as determined by Moody's, at December 31, 2020 ($ in thousands):

                                          Amortized Cost            

Estimated Fair Value

                                        Amount           %           Amount            %
Securities Available for Sale
Aaa                                   $ 1,954,575        99.7 %   $   1,985,980        99.7 %
Baa1 to Baa3                                1,064         0.1 %           1,105         0.1 %
Not Rated (1)                               4,134         0.2 %           4,730         0.2 %
Total securities available for sale   $ 1,959,773       100.0 %   $   1,991,815       100.0 %

Securities Held to Maturity
Aaa                                   $   511,488        95.1 %   $     536,276        95.2 %
Aa1 to Aa3                                 22,528         4.1 %          22,650         4.0 %
Not Rated (1)                               4,056         0.8 %          

4,189 0.8 % Total securities held to maturity $ 538,072 100.0 % $ 563,115 100.0 %

(1) Not rated issues primarily consist of Mississippi municipal general

obligations.

The table above presenting the credit rating of Trustmark's securities is
formatted to show the securities according to the credit rating category, and
not by category of the underlying security. At December 31, 2020, approximately
99.7% of the available for sale securities, measured at the estimated fair
value, and 95.1% of the held to maturity securities, measured at amortized cost,
were rated Aaa.

LHFS

At December 31, 2020, LHFS totaled $447.0 million, consisting of $305.8 million
of residential real estate mortgage loans in the process of being sold to third
parties and $141.2 million of Government National Mortgage Association (GNMA)
optional repurchase loans. At December 31, 2019, LHFS totaled $226.3 million,
consisting of $169.3 million of residential real estate mortgage loans in the
process of being sold to third parties and $57.1 million of GNMA optional
repurchase loans. Please refer to the nonperforming assets table that follows
for information on GNMA loans eligible for repurchase which are past due 90 days
or more.

Trustmark did not exercise its buy-back option on any delinquent loans serviced for GNMA during 2020 or 2019.

For additional information regarding the GNMA optional repurchase loans, please
see the section captioned "Past Due LHFS" included in Note 4 - LHFI and
Allowance for Credit Losses, LHFI of Part II. Item 8. - Financial Statements and
Supplementary Data of this report.

LHFI

The full impact of the COVID-19 pandemic is unknown and rapidly evolving. It has
caused substantial disruption in international and the United States economies,
markets and employment. The outbreak may have a significant adverse impact on
certain industries Trustmark serves, including the restaurant and food services,
hotel, retail and energy industries. See the section captioned "COVID-19 Update"
for further information and discussion regarding the current and anticipated
impact of the COVID-19 pandemic.

                                       53

--------------------------------------------------------------------------------
The table below provides the carrying value of the LHFI portfolio by loan class
for each year of the five-year period ended
December 31, 2020 ($ in thousands):

                                                                                              December 31,
                                        2020 (1)                      2019                        2018                        2017                        2016
                                   Amount           %          Amount           %          Amount           %          Amount           %          Amount           %
Loans secured by real estate:
Construction, land development
  and other land (2)             $   514,056         5.2 %   $ 1,162,791        12.4 %   $ 1,056,601        12.0 %   $   987,624        11.5 %   $   831,437        10.6 %
Other secured by 1-4 family
  residential properties (2)         524,732         5.3 %     1,855,913        19.9 %     1,825,492        20.7 %     1,675,311        19.6 %     1,660,043        21.1 %
Secured by nonfarm,
  nonresidential properties        2,709,026        27.6 %     2,475,245        26.5 %     2,220,914        25.1 %     2,193,823        25.6 %     2,034,176        25.9 %
Other real estate secured          1,065,964        10.9 %       724,480         7.8 %       543,820         6.1 %       517,956         6.1 %       318,148         4.0 %
Other loans secured by real
estate: (2)
Other construction                   794,983         8.1 %             -           -               -           -               -           -               -           -
Secured by 1-4 family
  residential properties           1,216,400        12.4 %             -           -               -           -               -           -               -           -
Commercial and industrial
loans                              1,309,078        13.3 %     1,477,896        15.8 %     1,538,715        17.4 %     1,570,345        18.3 %     1,528,434        19.5 %
Consumer loans                       164,386         1.7 %       175,738         1.9 %       182,448         2.1 %       171,918         2.0 %       170,562         2.2 %
State and other political
subdivision loans                  1,000,776        10.2 %       967,944        10.4 %       973,818        11.0 %       952,483        11.1 %       917,515        11.7 %
Other commercial loans (2)           525,123         5.3 %       495,621         5.3 %       494,060         5.6 %       500,507         5.8 %       390,898         5.0 %
LHFI                             $ 9,824,524       100.0 %   $ 9,335,628       100.0 %   $ 8,835,868       100.0 %   $ 8,569,967       100.0 %   $ 7,851,213       100.0 %


(1)  Effective January 1, 2020, Trustmark adopted FASB ASU 2016-13 using the
     modified retrospective approach; therefore, prior period balances are

presented under legacy GAAP and may not be comparable to current period

presentation.

(2) In accordance with the guidance in FASB ASC Topic 326, Trustmark redefined

its LHFI portfolio segments and related loan classes based on the level at

which risk is monitored within the ACL methodology. The other loans secured

by real estate portfolio segment and related loan classes were separated

from the loans secured by real estate portfolio segment. The other

construction loans were segregated from the construction, land development

and other land loans. The other loans secured by 1-4 family residential

properties were segregated from the loans secured by 1-4 family residential

properties and the loans secured by 1-4 family residential properties were

redefined in the other loans secured by real estate portfolio segment. Other

loans were redefined as other commercial loans.

LHFI at December 31, 2020 increased $488.9 million, or 5.2%, compared to
December 31, 2019. On January 1, 2020, Trustmark transferred $72.6 million, the
remaining balance of the loans acquired in the BancTrust merger, from acquired
impaired loans to LHFI as PCD loans as part of its adoption of FASB ASC Topic
326. For additional information regarding the acquired loans transferred to
LHFI, see the section captioned "Acquired Loans." Excluding the transferred
acquired loans, LHFI increased $416.3 million, or 4.4%, compared to December 31,
2019. The increase in LHFI during 2020, excluding the transferred acquired
loans, was primarily due to net growth in LHFI secured by real estate in the
Texas, Alabama, Mississippi and Tennessee market regions, partially offset by
declines in commercial and industrial LHFI in the Mississippi, Tennessee and
Alabama market regions. The following discussion of changes in LHFI excludes the
acquired loans transferred on January 1, 2020.

LHFI secured by real estate increased $542.3 million, or 8.6%, during 2020
primarily due to net growth in other real estate secured loans, NFNR LHFI and
other construction loans partially offset by loans secured by 1-4 family
residential properties. LHFI secured by other real estate increased $337.5
million, or 46.3%, during 2020, primarily due to other construction loans that
moved to LHFI secured by multi-family residential properties in the Texas,
Alabama, Mississippi and Florida market regions. NFNR LHFI increased $195.6
million, or 7.8%, during 2020, principally due to movement from the other
construction loans category. Excluding other construction loan
reclassifications, the NFNR LHFI portfolio decreased $48.0 million, or 1.9%,
during 2020 primarily due to declines in nonowner-occupied loans in the Texas,
Mississippi, Florida and Alabama market regions, which were partially offset by
growth in owner-occupied loans in the Texas, Tennessee, Florida and Alabama
market regions. Other construction loans increased $116.8 million, or 17.2%,
during 2020 primarily due to new construction loans across all five market
regions, partially offset by other construction loans moved to other loan
categories upon the completion of the related construction project. During 2020,
$873.7 million loans were moved from other construction to other loan
categories, including $629.5 million to multi-family residential loans, $169.6
million to nonowner-occupied loans and $74.3 million to owner-occupied
loans. Excluding all reclassifications between loan categories, growth in other
construction loans across all five market regions totaled $963.3 million during
2020. LHFI secured by 1-4 family residential properties declined $132.3 million,
or 7.1%, during 2020 across all five market regions, primarily due to increases
in mortgage loan refinance and secondary marketing activities due to lower
interest rates.

Commercial and industrial LHFI declined $173.9 million, or 11.7%, during 2020,
primarily due to declines in Trustmark's Mississippi, Tennessee and Alabama
market regions. Trustmark's exposure to the energy sector is primarily included
in the commercial and industrial loan portfolio in Trustmark's Mississippi and
Texas market regions. At December 31, 2020 and 2019, energy-related LHFI had
outstanding balances of $102.3 million and $122.9 million, respectively, which
represented 1.0% and 1.3% of Trustmark's total LHFI portfolio at December 31,
2020 and 2019, respectively. Trustmark has no loan exposure where the source

                                       54

--------------------------------------------------------------------------------

of repayment, or the underlying security of such exposure, is tied to the realization of value from energy reserves. Should oil prices fall below current levels for a prolonged period of time, there is potential for downgrades to occur. Management will continue to monitor this exposure.

The following table provides information regarding Trustmark's home equity loans
and home equity lines of credit which are included in the LHFI secured by 1-4
family residential properties as of December 31, 2020 and 2019 ($ in thousands):



                                                                December 31,
                                                            2020             2019
Home equity loans                                       $     40,730     $     52,348
Home equity lines of credit                                  352,309          388,217
Percentage of loans and lines for which Trustmark
holds first lien                                                59.5 %           59.4 %
Percentage of loans and lines for which Trustmark
does not hold first lien                                        40.5 %           40.6 %




Due to the increased risk associated with second liens, loan terms and
underwriting guidelines differ from those used for products secured by first
liens. Loan amounts and loan-to-value ratios are limited and are lower for
second liens than first liens. Also, interest rates and maximum amortization
periods are adjusted accordingly. In addition, regardless of lien position, the
passing credit score for approval of all home equity lines of credit is higher
than that of term loans. The allowance for loan losses, LHFI is also reflective
of the increased risk related to second liens through application of a greater
loss factor to this portion of the portfolio.

In the following tables, LHFI reported by region (along with related nonperforming assets and net charge-offs) are associated with location of origination except for loans secured by 1-4 family residential properties (representing traditional mortgages) and credit cards. These loans are included in the Mississippi market region because they are centrally analyzed and approved as part of a specific line of business located at Trustmark's headquarters in Jackson, Mississippi.

                                       55

--------------------------------------------------------------------------------

The following table presents the LHFI composition by region at December 31, 2020 and reflects a diversified mix of loans by region ($ in thousands):

                                                                   December 31, 2020
                                  Total          Alabama        Florida      Mississippi      Tennessee         Texas
LHFI Composition by Region
Loans secured by real
estate:
Construction, land
development and
  other land                   $   514,056     $   205,348     $  52,764     $    158,162     $   29,543     $    68,239
Other secured by 1-4 family
residential
  properties                       524,732         118,205        37,062          294,012         64,132          11,321
Secured by nonfarm,
nonresidential
  properties                     2,709,026         710,266       262,697          984,508        186,405         565,150
Other real estate secured        1,065,964         312,295         6,332          392,986          6,621         347,730
Other loans secured by real
estate:
Other construction                 794,983         289,138        10,199          157,393          1,075         337,178
Secured by 1-4 family
residential
  properties                     1,216,400               -             -        1,207,493          8,907               -
Commercial and industrial
loans                            1,309,078         199,301        22,774          611,743        271,940         203,320
Consumer loans                     164,386          23,263         6,615          110,605         19,961           3,942
State and other political
subdivision loans                1,000,776          87,468        35,179          670,883         41,698         165,548
Other commercial loans             525,123          81,770        14,273          345,745         61,810          21,525
LHFI                           $ 9,824,524     $ 2,027,054     $ 447,895     $  4,933,530     $  692,092     $ 1,723,953

Construction, Land Development and Other Land Loans by Region
Lots                           $    74,177     $    24,842     $  12,945     $     28,546     $    1,231     $     6,613
Development                         94,443          37,537           315           33,059         12,505          11,027
Unimproved land                     99,857          30,260        15,863           24,742         10,746          18,246
1-4 family construction            245,579         112,709        23,641           71,815          5,061          32,353
Construction, land
development and
  other land loans             $   514,056     $   205,348     $  52,764     $    158,162     $   29,543     $    68,239

Loans Secured by Nonfarm, Nonresidential (NFNR) Properties by Region
Nonowner-occupied:
Retail                         $   389,905     $   149,401     $  31,965     $    108,724     $   26,257     $    73,558
Office                             228,094          64,625        26,697           68,056         12,122          56,594
Hotel/motel                        341,972         146,542        91,819           52,883         39,728          11,000
Mini-storage                       130,995          23,499         2,344           61,359            397          43,396
Industrial                         183,795          47,135        15,805           40,308          1,087          79,460
Health care                         46,597          23,088         2,462           18,462            389           2,196
Convenience stores                  16,148           3,304             -            3,351            383           9,110
Nursing homes/senior living        112,256          35,941             -           31,456          6,923          37,936
Other                               71,670           4,505         6,715           24,133          8,450          27,867
Total nonowner-occupied
loans                            1,521,432         498,040       177,807          408,732         95,736         341,117

Owner-occupied:
Office                             188,960          42,679        45,651           49,120          8,814          42,696
Churches                           105,832          22,604         6,768           51,499         10,231          14,730
Industrial warehouses              161,050          13,732         3,097           50,969         16,362          76,890
Health care                        136,246          24,485         4,466           94,695          2,341          10,259
Convenience stores                 122,155          18,744         9,516           65,919            556          27,420
Retail                              73,832          15,308         6,574           26,447         10,653          14,850
Restaurants                         59,856           4,255         4,446           34,681         15,097           1,377
Auto dealerships                    54,805           7,542           279           21,009         25,975               -
Nursing homes/senior living        175,442          57,846             -          117,596              -               -
Other                              109,416           5,031         4,093           63,841            640          35,811
Total owner-occupied loans       1,187,594         212,226        84,890          575,776         90,669         224,033
Loans secured by NFNR
properties                     $ 2,709,026     $   710,266     $ 262,697     $    984,508     $  186,405     $   565,150


                                       56

--------------------------------------------------------------------------------


Due to the short-term nature of most commercial real estate lending and the
practice of annual renewal of commercial lines of credit, approximately 46.8% of
Trustmark's portfolio matures in less than one year. Such a short-term maturity
profile is not unusual for a commercial bank and provides Trustmark the
opportunity to obtain updated financial information from its borrowers and to
actively monitor its borrowers' creditworthiness. This maturity profile is well
matched with many of Trustmark's sources of funding, which are also short-term
in nature.

The following table provides information regarding Trustmark's LHFI maturities by loan class at December 31, 2020 ($ in thousands):

                                                                    Maturing
                                                            One Year
                                             Within          Through          After
                                            One Year          Five            Five
                                             or Less          Years           Years           Total
Loans secured by real estate:
Construction, land development and other
land                                       $   369,640     $    96,210     $    48,206     $   514,056
Other secured by 1-4 family residential
properties                                     402,555          87,811          34,366         524,732
Secured by nonfarm, nonresidential
properties                                   1,316,607       1,042,693         349,726       2,709,026
Other real estate secured                      776,957         270,921          18,086       1,065,964
Other loans secured by real estate:
Other construction                             620,189         139,477          35,317         794,983
Secured by 1-4 family residential
properties                                      66,923         150,275         999,202       1,216,400
Commercial and industrial loans                548,011         661,743          99,324       1,309,078
Consumer loans                                  48,366         112,279           3,741         164,386
State and other political subdivision
loans                                          149,104         321,234         530,438       1,000,776
Other loans                                    296,268         154,078          74,777         525,123
LHFI                                       $ 4,594,620     $ 3,036,721     $ 2,193,183     $ 9,824,524

The following table provides information regarding Trustmark's LHFI maturities by interest rate sensitivity at December 31, 2020 ($ in thousands):

                                                                    Maturing
                                                            One Year
                                             Within          Through          After
                                            One Year          Five            Five
                                             or Less          Years           Years           Total
Loan Type
Predetermined interest rates               $   931,635     $ 2,380,264     $ 1,629,451     $ 4,941,350
Floating interest rates:
Loans which are at contractual floor           373,041         235,650         161,327         770,018
Loans which are free to float                3,289,944         420,807         402,405       4,113,156
Total floating interest rates                3,662,985         656,457         563,732       4,883,174
LHFI                                       $ 4,594,620     $ 3,036,721     $ 2,193,183     $ 9,824,524




                                       57

--------------------------------------------------------------------------------


Trustmark's variable rate LHFI are based primarily on various prime and LIBOR
interest rate bases. The following tables provide information regarding the
interest rate terms of Trustmark's LHFI as of December 31, 2020 and 2019 ($ in
thousands):



                                                                   December 31, 2020
                                                         Fixed         Variable          Total
Loans secured by real estate:
Construction, land development and other land         $   147,640     $   366,416     $   514,056
Other secured by 1- 4 family residential properties        17,751         506,981         524,732
Secured by nonfarm, nonresidential properties           1,506,066       1,202,960       2,709,026
Other real estate secured                                 292,878         773,086       1,065,964
Other loans secured by real estate:
Other construction                                        134,114         660,869         794,983
Secured by 1- 4 family residential properties             732,050         484,350       1,216,400
Commercial and industrial loans                           752,502         556,576       1,309,078
Consumer loans                                            138,989          25,397         164,386
State and other political subdivision loans               970,500          30,276       1,000,776
Other commercial loans                                    248,860         276,263         525,123
LHFI                                                  $ 4,941,350     $ 4,883,174     $ 9,824,524




                                                             December 31, 2019
                                                   Fixed         Variable          Total
Loans secured by real estate:
Construction, land development and other land   $   201,055     $   961,736     $ 1,162,791
Secured by 1- 4 family residential properties     1,004,079         851,834 

1,855,913

Secured by nonfarm, nonresidential properties 1,430,132 1,045,113

2,475,245

Other real estate secured                           189,023         535,457 

724,480

Commercial and industrial loans                     636,518         841,378 

1,477,896

Consumer loans                                      152,970          22,768 

175,738

State and other political subdivision loans 925,990 41,954

        967,944
Other loans                                         310,475         185,146         495,621
LHFI                                            $ 4,850,242     $ 4,485,386     $ 9,335,628




Allowance for Credit Losses

LHFI

Trustmark adopted FASB ASC Topic 326, in accordance with the amendments of FASB
ASU 2016-13, effective January 1, 2020. The guidance in FASB ASC 326 replaces
Trustmark's previous incurred loss methodology with a methodology that reflects
the current expected credit losses and requires consideration of a broader range
of reasonable and supportable information to determine credit
losses. Trustmark's ACL methodology for LHFI is based upon guidance within FASB
ASC Subtopic 326-20, "Financial Instruments - Credit Losses - Measured at
Amortized Cost," as well as regulatory guidance from its primary regulator. The
ACL is a valuation account that is deducted from the loans' amortized cost basis
to present the net amount expected to be collected on the loans. Credit quality
within the LHFI portfolio is continuously monitored by Management and is
reflected within the ACL for loans. The ACL is an estimate of expected losses
inherent within Trustmark's existing LHFI portfolio. The ACL on LHFI is adjusted
through the provision for credit losses and reduced by the charge off of loan
amounts, net of recoveries.

The loan loss estimation process involves procedures to appropriately consider
the unique characteristics of Trustmark's LHFI portfolio segments. These
segments are further disaggregated into loan classes, the level at which credit
risk is estimated. When computing allowance levels, credit loss assumptions are
estimated using a model that categorizes loan pools based on loss history,
delinquency status and other credit trends and risk characteristics, including
current conditions and reasonable and supportable forecasts about the
future. Evaluations of the portfolio and individual credits are inherently
subjective, as they require estimates, assumptions and judgments as to the facts
and circumstances of particular situations.

The econometric models in production today reflect segment or pool level
sensitivities of probability of default (PD) to changes in macroeconomic
variables. By measuring the relationship between defaults and changes in the
economy, the quantitative reserve incorporates reasonable and supportable
forecasts of future conditions that will affect the value of its assets, as
required by FASB ASC Topic 326. Under stable forecasts, these linear regressions
will reasonably predict a pool's PD. However, due to the COVID-19

                                       58

--------------------------------------------------------------------------------
pandemic, the macroeconomic variables used for reasonable and supportable
forecasting have changed rapidly. At the current levels, it is not clear that
the models currently in production will produce reasonably representative
results since the models were originally estimated using data beginning in 2004
through 2017. During this period, a traditional, albeit severe, economic
recession occurred. Thus, econometric models are sensitive to similar future
levels of PD.

In order to prevent the econometric models from extrapolating beyond reasonable
boundaries of their input variables, Trustmark chose to establish an upper and
lower limit process when applying the periodic forecasts. In this way,
Management will not rely upon unobserved and untested relationships in the
setting of the quantitative reserve. This approach applies to all input
variables, including: Southern Unemployment, National Unemployment, National
GDP, Southern Vacancy Rate and the Prime Rate. The upper and lower limits are
based on the distribution of the macroeconomic variable by selecting extreme
percentiles at the upper and lower limits of the distribution, the 1st and 99th,
respectively. These upper and lower limits are then used to calculate the PD for
the forecast time period in which the forecasted values are outside of the upper
and lower limit range. For the fourth quarter of 2020, the forecast related to
the macroeconomic variables used in the quantitative modeling process were
positively impacted due to the updated forecast effects related to the COVID-19
pandemic, causing an overall decrease in quantitative reserve levels.

The external factors qualitative factor is Management's best judgement on the
loan or pool level impact of all factors that affect the portfolio that are not
accounted for using any other part of the ACL methodology, e.g., natural
disasters, changes in legislation, impacts due to technology and
pandemics. During the third quarter of 2020, Trustmark activated the External
Factor - Pandemic to ensure reserve adequacy for collectively evaluated loans
most likely to be impacted by the unique economic and behavioral conditions
created by the COVID-19 pandemic. Additional qualitative reserves are derived
based on two principles. The first is the disconnect of economic factors to
Trustmark's modeled PD (the econometric models underpinning the quantitative
pooled reserves). During the pandemic, extraordinary measures by the federal
government were made available to consumers and businesses, including COVID-19
loan payment concessions, direct transfer payments to households, tax deferrals
and reduced interest rates, among others. These government interventions may
have extended the lag between economic conditions and default, relative to what
was captured in the model development data. Because Trustmark's econometric PD
models rely on the observed relationship from the economic downturn from 2007 to
2009 in both timing and severity, Management does not expect the models to
reflect these current conditions. For example, while the models would predict
contemporaneous unemployment peaks and loan defaults, this may not occur when
borrowers can request payment deferrals. Thus, for the affected population,
economic conditions are not fully considered as a part of Trustmark's
quantitative reserve. The second principle is the change in risk that is
identified by rating changes. As a part of Trustmark's credit review process,
loans in the affected population have been given more frequent screening to
ensure accurate ratings are maintained through this dynamic period. Trustmark's
quantitative reserve does not directly address changes in ratings; thus, a
migration qualitative factor was designed to work in concert with the
quantitative reserve. In a downturn, the qualitative factor is inactive for most
pools because changes in ratings are congruent with changes in macroeconomic
conditions, which directly influence the PD models in the quantitative reserve.

As discussed above, the disconnect of economic factors means that changes in
rating caused by deteriorating and weak economic conditions as a result of the
pandemic are not being captured in the quantitative reserve. During the fourth
quarter of 2020, due to unforeseen pandemic conditions that varied from
Management's expectations during the third quarter of 2020, additional reserves
were further dimensioned in order to appropriately reflect the risk within the
portfolio related to the COVID-19 pandemic. In an effort to ensure the External
Factor - Pandemic qualitative factor is reasonable and supportable, historical
Trustmark loss data was leveraged to construct a framework that is quantitative
in nature. To dimension the additional reserve, Management uses the sensitivity
of the quantitative commercial loan reserve to changes in macroeconomic
conditions to apply to loans rated acceptable or better (risk rates 1-4). In
addition, to account for the known changes in risk, a weighted average of the
commercial loan portfolio loss rate, derived from the performance trends
qualitative factor, is used to dimension additional reserves for downgraded
credits. Loans rated acceptable with risk (risk rate 5) or watch (risk rate 6)
received the additional reserves based on the average of the macroeconomic
conditions and weighted average of the commercial loan portfolio loss rate while
the loans rated special mention (risk rate 7) and substandard (risk rate 8)
received additional reserves based on the weighted-average described above.

Determining the appropriateness of the allowance is complex and requires judgement by Management about the effect of matters that are inherently uncertain. In future periods, evaluations of the overall LHFI portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and credit loss expense.

For a complete description of Trustmark's ACL methodology and the quantitative
and qualitative factors included in the calculation, please see Note 4 - LHFI
and Allowance for Credit Losses, LHFI included in Part II. Item 8. - Financial
Statements and Supplementary Data of this report.

Upon adoption of FASB ASC Topic 326 on January 1, 2020, Trustmark recorded a
decrease to the ACL on LHFI of $3.0 million and an increase of $1.8 million for
the ACL calculated on the acquired loans transferred to LHFI as PCD loans. At
December 31, 2020, the ACL on LHFI was $117.3 million, an increase of $34.2
million, or 41.2%, when compared with January 1, 2020. The increase in the ACL
during 2020 was principally due to net changes in the economic forecast due to
the current and anticipated negative effects of

                                       59

--------------------------------------------------------------------------------
the COVID-19 pandemic on the overall economy and macroeconomic factors.
Allocation of Trustmark's ACL represented 1.20% of commercial LHFI and 1.16% of
consumer and home mortgage LHFI, resulting in an ACL to total LHFI of 1.19% as
of December 31, 2020. This compares with an allowance to total LHFI of 0.90% at
December 31, 2019, which was allocated to commercial LHFI at 0.98% and to
consumer and home mortgage LHFI at 0.61%.

The table below illustrates the changes in Trustmark's ACL as well as
Trustmark's loan loss experience for the periods presented ($ in thousands):

                                                          Years Ended December 31,
                                        2020          2019          2018          2017          2016
Balance at beginning of period        $  84,277     $  79,290     $  76,733     $  71,265     $  67,619
Transfers (1)                                 -             -         1,554             -             -
FASB ASU 2016-03 Adoption
Adjustment                               (1,217 )           -             -             -             -
LHFI charged off:
Construction, land development and
other land loans                            (12 )         (40 )        (123 )         (79 )        (311 )
Other loans secured by 1-4 family
residential properties                     (117 )        (531 )      (1,629 )        (950 )      (1,319 )
Loans secured by nonfarm,
nonresidential properties                (3,777 )        (322 )      (1,184 )      (4,231 )      (3,067 )
Other loans secured by real estate           (8 )           -             -            (5 )         (27 )
Other construction loans                      -             -             -             -             -
Loans secured by 1-4 family
residential properties                      (43 )           -             -             -             -

Commercial and industrial loans (1,557 ) (5,344 ) (18,823 ) (8,286 ) (6,602 ) Consumer loans

                           (2,039 )      (2,278 )      (2,089 )      (2,546 )      (1,864 )
State and other political
subdivision loans                             -             -             -             -             -
Other commercial loans                   (3,922 )      (5,966 )      (5,641 )      (5,050 )      (5,740 )
Total charge-offs                       (11,475 )     (14,481 )     (29,489 )     (21,147 )     (18,930 )
Recoveries on LHFI previously
charged off:
Construction, land development and
other land loans                            716           894         1,124         1,428         1,380
Other loans secured by 1-4 family
residential properties                      378           666           646         1,833         1,122
Loans secured by nonfarm,
nonresidential properties                   546           472           133           396           976
Other loans secured by real estate           68            29            23            69             7
Other construction loans                    208             -             -             -             -
Loans secured by 1-4 family
residential properties                      203             -             -             -             -
Commercial and industrial loans           1,736         1,257         5,410         2,578           732
Consumer loans                            1,824         1,829         2,019         1,938         4,007
State and other political
subdivision loans                             -             -             -             -             -
Other commercial loans                    3,929         3,524         3,144         3,279         3,395
Total recoveries                          9,608         8,671        12,499        11,521        11,619
Net (charge-offs) recoveries             (1,867 )      (5,810 )     (16,990 )      (9,626 )      (7,311 )
Provision for credit losses              36,113        10,797        17,993        15,094        10,957
Balance at end of period              $ 117,306     $  84,277     $  79,290     $  76,733     $  71,265

Percentage of net charge-offs
(recoveries) during
  period to average loans (LHFS and
LHFI)
  outstanding during the period            0.02 %        0.06 %        0.19 %        0.11 %        0.10 %

(1) The allowance for loan losses balance related to the remaining loans

acquired in the Bay Bank, Heritage and Reliance acquisitions, which were

reclassified from acquired impaired loans to LHFI during 2018.

Charge-offs exceeded recoveries for 2020 resulting in a net charge-off of $1.9
million, or 0.02% of average loans (LHFS and LHFI), compared to a net charge-off
of $5.8 million, or 0.06% of average loans (LHFS and LHFI), in 2019, and a net
charge-off of $17.0 million, or 0.19% of average loans (LHFS and LHFI), in
2018. The decrease in net charge-offs during 2020 was principally due to
declines in charge-offs in the Mississippi and Texas market regions as well as
an increase in recoveries in the Alabama market region, partially offset by an
increase in charge-offs in the Alabama and Tennessee market regions. The
increases in charge-offs in the Alabama and Tennessee market regions were
principally due to the charge off of one substandard commercial credit in each
of these market regions.

                                       60

--------------------------------------------------------------------------------

The following table presents the net (charge-offs) recoveries by geographic market region for the periods presented ($ in thousands):

                                          Years Ended December 31,
                                       2020         2019         2018
Alabama                              $ (1,448 )   $   (754 )   $    (597 )
Florida                                   390          850         1,906
Mississippi                               814       (4,438 )      (4,776 )
Tennessee                              (1,775 )       (708 )      (7,958 )
Texas                                     152         (760 )      (5,565 )

Total net (charge-offs) recoveries $ (1,867 ) $ (5,810 ) $ (16,990 )

The provision for credit losses for 2020 totaled 0.36% of average loans (LHFS
and LHFI), compared to 0.12% of average loans (LHFS and LHFI) in 2019 and 0.20%
of average loans (LHFS and LHFI) in 2018. The provision for credit losses for
2020 primarily reflected net changes in the economic forecast due to the current
and anticipated negative effects of the COVID-19 pandemic on the overall economy
and macroeconomic factors.

The provision for credit losses for LHFI secured by NFNR properties, LHFI
secured by other real estate, other construction loans and consumer LHFI totaled
$33.8 million, $4.1 million, $2.9 million and $615 thousand, respectively, for
the year ended December 31, 2020, primarily due to the negative impact of
COVID-19 pandemic on the overall economy and macroeconomic factors.

The provision for credit losses for commercial and industrial LHFI totaled a
negative $2.4 million for the year ended December 31, 2020, primarily due to
loans that had been specifically reserved for being charged down, upgrades on
loans from substandard to pass, paydowns as well as a slight decrease in the
calculated PD and LGD, which uses Trustmark's historical data. The provision for
credit losses for state and other political subdivision loans totaled a negative
$1.5 million for 2020, primarily due to a decrease in reserves based on routine
updates to the qualitative portion of the ACL calculation.

Off-Balance Sheet Credit Exposures

FASB ASC Topic 326 requires Trustmark to estimate expected credit losses for
off-balance sheet credit exposures which are not unconditionally
cancellable. Trustmark maintains a separate ACL on off-balance sheet credit
exposures, including unfunded loan commitments and letters of credit, which is
included on the accompanying consolidated balance sheet as of December 31,
2020. Upon adoption of FASB ASC Topic 326 on January 1, 2020, Trustmark recorded
an ACL on off-balance sheet credit exposures of $29.6 million.

Expected credit losses for off-balance sheet credit exposures are estimated by
calculating a commitment usage factor over the contractual period for exposures
that are not unconditionally cancellable by Trustmark. Trustmark calculates a
loan pool level unfunded amount for the period. Trustmark calculates an expected
funding rate each period which is applied to each pool's unfunded commitment
balances to ensure that reserves will be applied to each pool based upon
balances expected to be funded based upon historical levels. Additionally, a
reserve rate is applied to the unfunded commitment balance, which incorporates
both quantitative and qualitative aspects of the current period's expected
credit loss rate. The reserve rate is loan pool specific and is applied to the
unfunded amount to ensure loss factors, both quantitative and qualitative, are
being considered on the unfunded portion of the loan pool, consistent with the
methodology applied to the funded loan pools. See the section captioned "Lending
Related" in Note 17 - Commitments and Contingencies included in Part II. Item 8.
- Financial Statements and Supplementary Data of this report for complete
description of Trustmark's ACL methodology on off-balance sheet credit
exposures.

Adjustments to the ACL on off-balance sheet credit exposures are recorded to
credit loss expense related to off-balance sheet credit exposures in noninterest
expense. Trustmark recorded a credit loss expense related to off-balance sheet
credit exposures of $8.9 million for 2020, resulting in an ACL on off-balance
sheet credit exposures of $38.6 million as of December 31, 2020. The increase in
the ACL on off-balance sheet credit exposures for 2020 was primarily due to net
changes in the economic forecast due to the current and anticipated negative
effects of the COVID-19 pandemic on the overall economy and macroeconomic
factors.

                                       61

--------------------------------------------------------------------------------

Nonperforming Assets, Excluding PPP and Acquired Loans

The table below provides the components of the nonperforming assets, excluding PPP and acquired loans, by geographic market region for each year in the five-year period ended December 31, 2020 ($ in thousands):

                                                               December 31,
                                        2020          2019         2018         2017          2016
Nonaccrual LHFI
Alabama                               $   9,221     $  1,870     $  3,361     $   3,083     $     665
Florida                                     572          267        1,175         3,034         3,644
Mississippi                              35,015       41,493       44,331        49,129        37,771
Tennessee                                12,572        8,980        8,696         4,436         6,213
Texas                                     5,748          616        4,061         7,893           941
Total nonaccrual LHFI                    63,128       53,226       61,624        67,575        49,234
Other real estate
Alabama                                   3,271        8,133        6,873        11,714        15,989
Florida                                       -        5,877        8,771        13,937        22,582
Mississippi                               8,330       14,919       17,255        14,260        15,646
Tennessee                                    50          319        1,025         2,535         6,183
Texas                                         -            -          744           782         1,651
Total other real estate                  11,651       29,248       34,668        43,228        62,051
Total nonperforming assets            $  74,779     $ 82,474     $ 96,292     $ 110,803     $ 111,285

Nonperforming assets/total loans
(LHFS and LHFI)
  and other real estate                    0.73 %       0.86 %       1.07 % 

1.26 % 1.38 %

Loans Past Due 90 days or more
LHFI                                  $   1,576     $    642     $    856     $   2,171     $   1,832
LHFS - Guaranteed GNMA services
loans (1)                             $ 119,409     $ 41,648     $ 37,384     $  35,544     $  28,345

(1) No obligation to repurchase.

See the previous discussion of LHFS for more information on Trustmark's serviced
GNMA loans eligible for repurchase and the impact of Trustmark's repurchases of
delinquent mortgage loans under the GNMA optional repurchase program.

Nonaccrual LHFI

At December 31, 2020, nonaccrual LHFI totaled $63.1 million, or 0.61% of total
LHFS and LHFI, reflecting an increase of $9.9 million, or 0.10% of total LHFS
and LHFI, relative to December 31, 2019. The increase in nonaccrual LHFI was
primarily due to LHFI placed on nonaccrual status in Trustmark's Alabama,
Tennessee, Texas and Mississippi market regions, partially offset by reductions,
pay-offs and charge-offs of nonaccrual LHFI in Trustmark's Mississippi and
Tennessee market regions.

As of December 31, 2020, nonaccrual energy-related LHFI totaled $10.4 million
and represented 10.2% of Trustmark's total energy-related portfolio, compared to
$10.6 million, or 8.6% of Trustmark's total energy-related portfolio at December
31, 2019. For additional information regarding nonaccrual LHFI, see the section
captioned "Nonaccrual and Past Due LHFI" in Note 4 - LHFI and Allowance for
Credit Losses, LHFI included in Part II. Item 8. - Financial Statements and
Supplementary Data of this report.

                                       62

--------------------------------------------------------------------------------

The following table illustrates nonaccrual LHFI by loan class for each year in the five-year period ended December 31, 2020 ($ in thousands):

                                                              December 31,
                                        2020         2019         2018         2017         2016
Loans secured by real estate:
Construction, land development and
other land                            $  5,985     $    897     $  2,218     $  2,105     $  3,323
Other secured by 1- 4 family
residential properties                   4,487       16,810       14,718       19,022       20,329
Secured by nonfarm, nonresidential
properties                              15,197        7,700        9,621       12,608        8,482
Other real estate secured                  185        1,032          927          212          402
Other loans secured by real estate:
Other construction                           -            -            -            -            -
Secured by 1- 4 family residential
properties                              11,807            -            -            -            -

Commercial and industrial loans 15,618 21,775 23,938

   33,338       15,824
Consumer loans                              86          108          205          135          300
State and other political
subdivision loans                        3,970        4,079        8,595            -            -
Other commercial loans                   5,793          825        1,402          155          574
Total nonaccrual LHFI                 $ 63,128     $ 53,226     $ 61,624     $ 67,575     $ 49,234




Other Real Estate

Other real estate at December 31, 2020 decreased $17.6 million, or 60.2%, when compared with December 31, 2019, principally due to properties sold in Trustmark's Mississippi, Florida, Alabama, and Tennessee market regions.

The following tables illustrate changes in other real estate by geographic market region for the periods presented ($ in thousands):

                                                              Year Ended December 31, 2020
                                     Total       Alabama      Florida       Mississippi       Tennessee        Texas
Balance at beginning of period     $  29,248     $  8,133     $  5,877     $      14,919     $       319     $       -
Additions                                635           77            -               339             219             -
Disposals                            (16,446 )     (3,887 )     (5,861 )          (6,230 )          (468 )           -
Write-downs                           (1,786 )     (1,052 )        (16 )            (698 )           (20 )           -

Balance at end of period           $  11,651     $  3,271     $      -     $       8,330     $        50     $       -




                                                             Year Ended December 31, 2019
                                     Total       Alabama      Florida       Mississippi       Tennessee       Texas
Balance at beginning of period     $  34,668     $  6,873     $  8,771     $      17,255     $     1,025     $   744
Additions                              8,598        2,908            -             5,575             115           -
Disposals                            (11,474 )     (1,198 )     (2,783 )          (5,967 )          (800 )      (726 )
Write-downs                           (2,544 )       (450 )       (111 )          (1,944 )           (21 )       (18 )
Balance at end of period           $  29,248     $  8,133     $  5,877     $      14,919     $       319     $     -




                                                              Year Ended December 31, 2018
                                     Total       Alabama      Florida       Mississippi       Tennessee       Texas
Balance at beginning of period     $  43,228     $ 11,714     $ 13,937     $      14,260     $     2,535     $    782
Additions                             12,115        1,563        2,637             7,533             382            -
Disposals                            (19,802 )     (5,217 )     (7,747 )          (5,035 )        (1,803 )          -
Write-downs                             (873 )       (133 )        (56 )            (557 )           (89 )        (38 )
Adjustments                                -       (1,054 )          -             1,054               -            -
Balance at end of period           $  34,668     $  6,873     $  8,771     $      17,255     $     1,025     $    744




Write-downs of other real estate decreased $758 thousand, or 29.8%, during 2020
compared to an increase of $1.7 million during 2019. The decrease in write-downs
of other real estate during 2020 compared to 2019 was primarily due to a
decrease in write-downs of other real estate properties in the Mississippi
market region and properties sold for which a reserve for write-down was
previously recorded, partially offset by write-downs of other real estate
properties in the Alabama market region.

                                       63

--------------------------------------------------------------------------------

The following table illustrates other real estate by type of property for each year in the five-year period ended December 31, 2020 ($ in thousands):

                                                              December 31,
                                        2020         2019         2018         2017         2016
Construction, land development and
other land properties                 $  3,857     $ 11,482     $ 16,206     $ 27,491     $ 36,871
1-4 family residential properties        1,349        3,453        4,983        5,081        7,926
Nonfarm, nonresidential properties       6,445       14,313       13,296       10,468       16,817
Other real estate properties                 -            -          183          188          437
Total other real estate               $ 11,651     $ 29,248     $ 34,668     $ 43,228     $ 62,051


Acquired Loans

Trustmark's loss share agreement with the FDIC covering the acquired covered loans secured by 1-4 family residential properties will expire in 2021.

Upon adoption of FASB ASC Topic 326, which was effective for Trustmark on
January 1, 2020 in accordance with the amendments in FASB ASU 2016-13, Trustmark
elected to account for its existing acquired loans as PCD loans included within
the LHFI portfolio. Trustmark elected to maintain pools of loans that were
previously accounted for under FASB ASC Subtopic 310-30, "Receivables - Loans
and Debt Securities Acquired with Deteriorated Credit Quality," and will
continue to account for these pools as a unit of account. Loans are only removed
from the existing loan pools if they are written off, paid off or sold. Upon
adoption of FASB ASC Topic 326, the ACL was determined for each pool and added
to the pool's carrying value to establish a new amortized cost basis. The
difference between the unpaid principal balance of the pool and the new
amortized cost basis is the noncredit premium or discount which will be
amortized into interest income over the remaining life of the pool. Changes to
the ACL after adoption of FASB ASC Topic 326 are recorded through the provision
for credit losses.

As a result of adopting FASB ASC Topic 326, Trustmark transferred $72.6 million
of acquired loans, $815 thousand of related allowance for loan losses, acquired
loans as well as $1.0 million of ACL calculated for these loans to LHFI on
January 1, 2020. The acquired loans and related allowance transferred were
acquired in the BancTrust merger.

The table below provides the carrying value of the acquired loan portfolio by
loan class for each year of the five-year period ended December 31, 2020 ($ in
thousands):

                                                                December 31,
                                        2020          2019         2018          2017          2016
Loans secured by real estate:
Construction, land development and
other land                            $       -     $  4,771     $   5,878     $  23,586     $  20,850
Secured by 1-4 family residential
properties                                    -       17,525        22,556        61,751        69,540
Secured by nonfarm, nonresidential
properties                                    -       38,206        47,979       114,694       103,820
Other real estate secured                     -        3,946         8,253        16,746        19,010
Commercial and industrial loans               -        5,035        15,267        31,506        36,896
Consumer loans                                -          520         1,356         2,600         3,365
Other loans                                   -        2,598         5,643        10,634        18,766
Acquired loans                                -       72,601       106,932       261,517       272,247
Less allowance for loan losses,
acquired loans                                -          815         1,231         4,079        11,397
Net acquired loans                    $       -     $ 71,786     $ 105,701     $ 257,438     $ 260,850


For additional information regarding acquired loans, including changes in the
net carrying value, see Note 5 - Acquired Loans included in Part II. Item 8. -
Financial Statements and Supplementary Data of this report.

Deposits

Trustmark's deposits are its primary source of funding and consist primarily of
core deposits from the communities Trustmark serves. Deposits include
interest-bearing and noninterest-bearing demand accounts, savings, money market,
certificates of deposit and individual retirement accounts. Total deposits were
$14.049 billion at December 31, 2020 compared to $11.246 billion at December 31,
2019, an increase of $2.803 billion, or 24.9%, reflecting increases in both
noninterest-bearing and interest-bearing deposit accounts as customers deposited
proceeds from line draws, PPP loans and other COVID-19 related stimulus
programs. During 2020, noninterest-bearing deposits increased $1.458 billion, or
50.4%, primarily due to growth in all categories of noninterest-bearing deposit
accounts. Interest-bearing deposits increased $1.345 billion, or 16.1%, during
2020, primarily due to growth in public and

                                       64

--------------------------------------------------------------------------------

consumer interest checking accounts, commercial and consumer money market deposit accounts and consumer savings accounts, partially offset by declines in consumer time deposits.

Borrowings

Trustmark uses short-term borrowings, such as federal funds purchased,
securities sold under repurchase agreements and short-term FHLB advances, to
fund growth of earning assets in excess of deposit growth. See the section
captioned "Liquidity" for further discussion of the components of Trustmark's
excess funding capacity.

Federal funds purchased and repurchase agreements totaled $164.5 million at
December 31, 2020 compared to $256.0 million at December 31, 2019, a decrease of
$91.5 million, or 35.7%. Of these amounts $164.5 million and $62.5 million,
respectively, represented customer related transactions, such as commercial
sweep repurchase balances. Excluding customer related transactions, Trustmark
had no upstream federal funds purchased at December 31, 2020 compared to $193.5
million at December 31, 2019. The decrease in the upstream federal funds
purchased during 2020 was due primarily to reduced funding needs caused by the
increases in deposit balances as customers deposited proceeds from line draws,
PPP loans and other COVID-19 related stimulus programs, as well as the FRB's
decision to reduce reserve requirement ratios to zero.

Other borrowings totaled $168.3 million at December 31, 2020, an increase of
$82.9 million, or 97.0%, when compared with $85.4 million at December 31, 2019,
primarily due to an increase in GNMA optional repurchase loans.

The table below presents information concerning qualifying components of Trustmark's borrowings for each of the last three years ($ in thousands):

                                                   2020           2019      

2018

Federal funds purchased and securities sold
under
  repurchase agreements:
Amount outstanding at end of period             $  164,519     $  256,020     $   50,471
Weighted average interest rate at end of
period                                                0.13 %         1.31 %         0.37 %
Maximum amount outstanding at any month end
during each period                              $  454,238     $  376,712     $  524,208
Average amount outstanding during each period      151,805        110,915   

329,649

Weighted average interest rate during each
period                                                0.50 %         1.28 % 

1.45 %

Other borrowings:
Amount outstanding at end of period             $  168,252     $   85,396     $   79,885
Weighted average interest rate at end of
period                                                0.68 %         1.48 %         1.05 %
Maximum amount outstanding at any month end
during each period                              $  178,599     $   85,396     $  977,011
Average amount outstanding during each period      133,602         82,476   

317,687

Weighted average interest rate during each
period                                                1.04 %         0.85 %         1.58 %


Benefit Plans

Defined Benefit Plans

As disclosed in Note 15 - Defined Benefit and Other Postretirement Benefits
included in Part II. Item 8. - Financial Statements and Supplementary Data of
this report, Trustmark maintains a noncontributory tax-qualified defined benefit
pension plan titled the Trustmark Corporation Pension Plan for Certain Employees
of Acquired Financial Institutions (the Continuing Plan) to satisfy commitments
made by Trustmark to associates covered through plans obtained in acquisitions.

At December 31, 2020, the fair value of the Continuing Plan's assets totaled $2.9 million and was exceeded by the projected benefit obligation of $9.5 million by $6.7 million. Net periodic benefit cost equaled $786 thousand in 2020, compared to $1.1 million in both 2019 and 2018.

The fair value of plan assets is determined utilizing current market quotes,
while the benefit obligation and periodic benefit costs are determined utilizing
actuarial methodology with certain weighted-average assumptions. For 2020, 2019
and 2018, the process used to select the discount rate assumption under FASB ASC
Topic 715 takes into account the benefit cash flow and the segmented yields on
high-quality corporate bonds that would be available to provide for the payment
of the benefit cash flow. Assumptions, which have been chosen to represent the
estimate of a particular event as required by GAAP, have been reviewed and
approved by Management based on recommendations from its actuaries.

                                       65

--------------------------------------------------------------------------------
The range of potential contributions to the Continuing Plan is determined
annually by the Continuing Plan's actuary in accordance with applicable IRS
rules and regulations. Trustmark's policy is to fund amounts that are sufficient
to satisfy the annual minimum funding requirements and do not exceed the maximum
that is deductible for federal income tax purposes. The actual amount of the
contribution is determined annually based on the Continuing Plan's funded status
and return on plan assets as of the measurement date, which is December 31. For
the plan year ending December 31, 2020, Trustmark's minimum required
contribution to the Continuing Plan was $306 thousand; however, Trustmark
contributed $563 thousand, $257 thousand in excess of the minimum required. For
the plan year ending December 31, 2021, Trustmark's minimum required
contribution to the Continuing Plan is expected to be $327 thousand; however,
Management and the Board of Directors of Trustmark will monitor the Continuing
Plan throughout 2021 to determine any additional funding requirements by the
plan's measurement date.

Supplemental Retirement Plans

As disclosed in Note 15 - Defined Benefit and Other Postretirement Benefits
included in Part II. Item 8. - Financial Statements and Supplementary Data of
this report, Trustmark maintains a nonqualified supplemental retirement plan
covering key executive officers and senior officers as well as directors who
have elected to defer fees. The plan provides for retirement and/or death
benefits based on a participant's covered salary or deferred fees. Although plan
benefits may be paid from Trustmark's general assets, Trustmark has purchased
life insurance contracts on the participants covered under the plan, which may
be used to fund future benefit payments under the plan. The measurement date for
the plan is December 31. As a result of mergers prior to 2014, Trustmark became
the administrator of small nonqualified supplemental retirement plans, for which
the plan benefits were frozen prior to the merger dates.

At December 31, 2020, the accrued benefit obligation for the supplemental
retirement plans equaled $59.6 million, while the net periodic benefit cost
equaled $2.8 million in 2020, $3.0 million in 2019 and $3.1 million in 2018. The
net periodic benefit cost and projected benefit obligation are determined using
actuarial assumptions as of the plans' measurement date. The process used to
select the discount rate assumption under FASB ASC Topic 715 takes into account
the benefit cash flow and the segmented yields on high-quality corporate bonds
that would be available to provide for the payment of the benefit cash flow. At
December 31, 2020, unrecognized actuarial losses and unrecognized prior service
costs continue to be amortized over future service periods.

Legal Environment

Information required in this section is set forth under the heading "Legal Proceedings" of Note 17 - Commitments and Contingencies in Part II. Item 8. - Financial Statements and Supplementary Data of this report.

Off-Balance Sheet Arrangements

Information required in this section is set forth under the heading "Lending Related" of Note 17 - Commitments and Contingencies in Part II. Item 8. - Financial Statements and Supplementary Data of this report.

Contractual Obligations

Trustmark is obligated to make payments under specific long-term and certain
other binding contractual arrangements. The following table provides a schedule
of the amount of the payments due under those obligations as of December 31,
2020 ($ in thousands):



                                                                         Three to
                                       Less than       One to Three        Five           After
                                       One Year           Years            Years        Five Years         Total
Time deposits                         $ 1,152,489     $      223,171     $  27,068     $      3,170     $ 1,405,898
Securities sold under repurchase
agreements                                128,053                  -             -                -         128,053
FHLB advances                                 625                  -             -              116             741
Subordinated notes                              -                  -             -          122,921         122,921
Junior subordinated debt securities             -                  -             -           61,856          61,856
Finance lease obligations                   1,396              2,075           876            3,458           7,805
Operating lease obligations                 3,683              7,095         7,712           13,800          32,290
Total                                 $ 1,286,246     $      232,341     $  35,656     $    205,321     $ 1,759,564


Capital Resources

At December 31, 2020, Trustmark's total shareholders' equity was $1.741 billion,
an increase of $80.4 million, or 4.8%, when compared to December 31,
2019. During 2020, shareholders' equity increased primarily as a result of net
income of $160.0 million as well as an increase in the fair market value of
available for sale securities, net of tax, of $23.0 million, partially offset by
common stock dividends of $58.8 million, common stock repurchases of $27.5
million and a $19.9 million, net of tax, adjustment to the

                                       66

--------------------------------------------------------------------------------
beginning balance of retained earnings as a result of the adoption of FASB ASU
2016-13. Trustmark utilizes a capital model in order to provide Management with
a monthly tool for analyzing changes in its strategic capital ratios. This
allows Management to hold sufficient capital to provide for growth opportunities
and protect the balance sheet against sudden adverse market conditions, while
maintaining an attractive return on equity to shareholders.

Regulatory Capital

Trustmark and TNB are subject to minimum risk-based capital and leverage capital
requirements, as described in the section captioned "Capital Adequacy" included
in Part I. Item 1. - Business of this report, which are administered by the
federal bank regulatory agencies. These capital requirements, as defined by
federal regulations, involve quantitative and qualitative measures of assets,
liabilities and certain off-balance sheet instruments.  Trustmark's and TNB's
minimum risk-based capital requirements include the phased in capital
conservation buffer of 2.500% at December 31, 2020 and 2019. AOCI is not
included in computing regulatory capital.  Trustmark has elected the five-year
phase-in transition period related to adopting FASB ASU 2016-13 for regulatory
capital purposes.  Failure to meet minimum capital requirements can result in
certain mandatory and possibly additional discretionary actions by regulators
that, if undertaken, could have a direct material effect on the financial
statements of Trustmark and TNB and limit Trustmark's and TNB's ability to pay
dividends.  As of December 31, 2020, Trustmark and TNB exceeded all applicable
minimum capital standards.  In addition, Trustmark and TNB met applicable
regulatory guidelines to be considered well-capitalized at December 31, 2020.
To be categorized in this manner, Trustmark and TNB maintained minimum common
equity Tier 1 risk-based capital, Tier 1 risk-based capital, total risk-based
capital and Tier 1 leverage ratios, and were not subject to any written
agreement, order or capital directive, or prompt corrective action directive
issued by their primary federal regulators to meet and maintain a specific
capital level for any capital measures.  There are no significant conditions or
events that have occurred since December 31, 2020, which Management believes
have affected Trustmark's or TNB's present classification.

During the fourth quarter of 2020, Trustmark enhanced its capital structure with
the issuance of $125.0 million of subordinated notes. The subordinated notes
were sold at an underwriting discount of 1.2%, resulting in net proceeds to
Trustmark of $123.5 million before deducting offering expenses of $600 thousand.
At December 31, 2020, the carrying amount of the subordinated notes was $122.9
million. The subordinated notes mature December 1, 2030 and are redeemable at
Trustmark's option under certain circumstances. For regulatory capital purposes,
the subordinated notes qualify as Tier 2 capital for Trustmark at December 31,
2020. Trustmark may utilize the full carrying value of the subordinated notes as
Tier 2 capital until December 1, 2025 (five years prior to maturity). Beginning
December 1, 2025, the subordinated notes will phase out of Tier 2 capital 20.0%
each year until maturity.

In 2006, Trustmark enhanced its capital structure with the issuance of trust
preferred securities. For regulatory capital purposes, the trust preferred
securities qualified as Tier 1 capital at December 31, 2020 and 2019. Trustmark
intends to continue to utilize $60.0 million in trust preferred securities
issued by the Trust as Tier 1 capital up to the regulatory limit, as permitted
by the grandfather provision in the Dodd-Frank Act and the Basel III Final Rule.

Refer to the section captioned "Regulatory Capital" included in Note 18 -
Shareholders' Equity in Part II. Item 8. - Financial Statements and
Supplementary Data of this report for an illustration of Trustmark's and TNB's
actual regulatory capital amounts and ratios under regulatory capital standards
in effect at December 31, 2020 and 2019.

Dividends on Common Stock

Dividends per common share for each of the years ended December 31, 2020, 2019
and 2018 were $0.92. Trustmark's dividend payout ratio for 2020, 2019 and 2018
was 36.51%, 39.48%, and 41.44%, respectively. Approval by TNB's regulators is
required if the total of all dividends declared in any calendar year exceeds the
total of its net income for that year combined with its retained net income of
the preceding two years. In 2021, TNB will have available approximately $86.7
million plus its net income for that year to pay as dividends to Trustmark. The
actual amount of any dividends declared in 2021 by Trustmark will be determined
by Trustmark's Board of Directors.

Liquidity

Liquidity is the ability to ensure that sufficient cash flow and liquid assets
are available to satisfy current and future financial obligations, including
demand for loans and deposit withdrawals, funding operating costs and other
corporate purposes. Consistent cash flows from operations and adequate capital
provide internally generated liquidity. Furthermore, Management maintains
funding capacity from a variety of external sources to meet daily funding needs,
such as those required to meet deposit withdrawals, loan disbursements and
security settlements. Liquidity strategy also includes the use of wholesale
funding sources to provide for the seasonal fluctuations of deposit and loan
demand and the cyclical fluctuations of the economy that impact the availability
of funds. Management keeps excess funding capacity available to meet potential
demands associated with adverse circumstances.

                                       67

--------------------------------------------------------------------------------
The asset side of the balance sheet provides liquidity primarily through
maturities and cash flows from loans and securities as well as the ability to
sell certain loans and securities while the liability portion of the balance
sheet provides liquidity primarily through noninterest and interest-bearing
deposits. Trustmark utilizes federal funds purchased, FHLB advances, repurchase
agreements as well as the Discount Window and, on a limited basis as discussed
below, brokered deposits to provide additional liquidity. Access to these
additional sources represents Trustmark's incremental borrowing capacity.

Deposit accounts represent Trustmark's largest funding source. Average deposits
totaled to $12.916 billion for 2020 and represented approximately 84.8% of
average liabilities and shareholders' equity, compared to average deposits of
$11.404 billion, which represented 84.5% of average liabilities and
shareholders' equity for 2019.

Trustmark utilizes a limited amount of brokered deposits to supplement other
wholesale funding sources. At December 31, 2020, brokered sweep Money Market
Deposit Account (MMDA) deposits totaled $28.1 million compared to $26.2 million
at December 31, 2019.

At December 31, 2020, Trustmark had no upstream federal funds purchased,
compared to $193.5 million at December 31, 2019. The decrease in the upstream
federal funds purchased during 2020 was due primarily to the increases in
deposit balances as customers deposited proceeds from line draws, PPP loans and
other stimulus programs, as well as the FRB's decision to reduce reserve
requirement ratios to zero. Trustmark maintains adequate federal funds lines to
provide sufficient short-term liquidity.

Trustmark maintains a relationship with the FHLB of Dallas, which provided no
outstanding short-term or long-term advances at December 31, 2020 and
2019. Trustmark had $600.0 million in letters of credit outstanding with the
FHLB of Dallas at December 31, 2020, compared to no outstanding letters of
credit at December 31, 2019. Under the existing borrowing agreement, Trustmark
had sufficient qualifying collateral to increase FHLB advances with the FHLB of
Dallas by $2.725 billion at December 31, 2020.

In addition, at December 31, 2020, Trustmark had $625 thousand in short-term and
$116 thousand in long-term FHLB advances outstanding with the FHLB of Atlanta,
which were acquired in the BancTrust merger, compared to no short-term and $811
thousand in long-term FHLB advances outstanding at December 31, 2019. Trustmark
has non-member status and thus no additional borrowing capacity with the FHLB of
Atlanta.

Additionally, Trustmark has the ability to leverage its unencumbered investment
securities as collateral. At December 31, 2020, Trustmark had approximately
$560.0 million available in unencumbered agency securities compared to $546.0
million at December 31, 2019.

Another borrowing source is the Discount Window. At December 31, 2020, Trustmark had approximately $893.5 million available in collateral capacity at the Discount Window primarily from pledges of commercial and industrial LHFI, compared with $982.7 million at December 31, 2019.

Additionally, on March 15, 2020, in response to the COVID-19 pandemic, the FRB reduced reserve requirements for insured depository institutions to zero percent, which increased TNB's available liquidity.

During the fourth quarter of 2020, Trustmark agreed to issue and sell $125.0
million aggregate principal amount of its 3.625% fixed-to-floating rate
subordinated notes. The subordinated notes were sold at an underwriting discount
of 1.2%, resulting in net proceeds to Trustmark of $123.5 million before
deducting offering expenses of $600 thousand. At December 31, 2020, the carrying
amount of the subordinated notes was $122.9 million. The subordinated notes
mature December 1, 2030 and are redeemable at Trustmark's option under certain
circumstances. The subordinated notes are unsecured obligations and are
subordinated in right of payment to all of Trustmark's existing and future
senior indebtedness, whether secured or unsecured. The subordinated notes are
obligations of Trustmark only and are not obligations of, and are not guaranteed
by, any of its subsidiaries, including TNB. Trustmark intends to use the net
proceeds for general corporate purposes.

During 2006, Trustmark completed a private placement of $60.0 million of trust preferred securities through a newly formed Delaware trust affiliate, the Trust. The trust preferred securities mature September 30, 2036 and are redeemable at Trustmark's option. The proceeds from the sale of the trust preferred securities were used by the Trust to purchase $61.9 million in aggregate principal amount of Trustmark's junior subordinated debentures.

The Board of Directors of Trustmark currently has the authority to issue up to
20.0 million preferred shares with no par value. The ability to issue preferred
shares in the future will provide Trustmark with additional financial and
management flexibility for general corporate and acquisition purposes. At
December 31, 2020, Trustmark had no shares of preferred stock issued and
outstanding.

Liquidity position and strategy are reviewed regularly by Management and continuously adjusted in relationship to Trustmark's overall strategy. Management believes that Trustmark has sufficient liquidity and capital resources to meet presently known cash flow requirements arising from ongoing business transactions.

                                       68

--------------------------------------------------------------------------------

Asset/Liability Management

Overview

Market risk reflects the potential risk of loss arising from adverse changes in
interest rates and market prices. Trustmark has risk management policies to
monitor and limit exposure to market risk. Trustmark's primary market risk is
interest rate risk created by core banking activities. Interest rate risk is the
potential variability of the income generated by Trustmark's financial products
or services, which results from changes in various market interest rates. Market
rate changes may take the form of absolute shifts, variances in the
relationships between different rates and changes in the shape or slope of the
interest rate term structure.

In 2017, the United Kingdom's Financial Conduct Authority announced that after
2021 it would no longer compel banks to submit the rates required to calculate
LIBOR, indicating that the continuation of LIBOR on the current basis cannot and
will not be guaranteed after 2021. Trustmark has a significant number of loans,
derivative contracts, borrowings and other financial instruments with attributes
that are either directly or indirectly dependent on LIBOR. The transition from
LIBOR could create considerable costs and additional risk. Trustmark cannot
predict what the ultimate impact of the transition from LIBOR will be; however,
failure to adequately manage the transition could have a material adverse effect
on Trustmark's business, financial condition and results of
operations. Trustmark has organized an internal LIBOR Transition Working Group
to identify operational and contractual best practices, assess its risk, manage
the transition, facilitate communication with its customers and monitor the
impacts. For additional information regarding the transition from LIBOR and
Trustmark's management of this transition, please see the respective risk factor
included in Part I. Item 1A. - Risk Factors of this report.

Management continually develops and applies cost-effective strategies to manage
these risks. Management's Asset/Liability Committee sets the day-to-day
operating guidelines, approves strategies affecting net interest income and
coordinates activities within policy limits established by the Board of
Directors of Trustmark. A key objective of the asset/liability management
program is to quantify, monitor and manage interest rate risk and to assist
Management in maintaining stability in the net interest margin under varying
interest rate environments.

Derivatives

Trustmark uses financial derivatives for management of interest rate
risk. Management's Asset/Liability Committee, in its oversight role for the
management of interest rate risk, approves the use of derivatives in balance
sheet hedging strategies. The most common derivatives employed by Trustmark are
interest rate lock commitments, forward contracts (both futures contracts and
options on futures contracts), interest rate swaps, interest rate caps and
interest rate floors. As a general matter, the values of these instruments are
designed to be inversely related to the values of the assets that they hedge
(i.e., if the value of the hedged asset falls, the value of the related hedge
rises). In addition, Trustmark has entered into derivatives contracts as
counterparty to one or more customers in connection with loans extended to those
customers. These transactions are designed to hedge interest rate, currency or
other exposures of the customers and are not entered into by Trustmark for
speculative purposes. Increased federal regulation of the derivatives markets
may increase the cost to Trustmark to administer derivatives programs.

Derivatives Not Designated as Hedging Instruments

As part of Trustmark's risk management strategy in the mortgage banking
business, various derivative instruments such as interest rate lock commitments
and forward sales contracts are utilized. Rate lock commitments are residential
mortgage loan commitments with customers, which guarantee a specified interest
rate for a specified period of time. Trustmark's obligations under forward
contracts consist of commitments to deliver mortgage loans, originated and/or
purchased, in the secondary market at a future date. The gross notional amount
of Trustmark's off-balance sheet obligations under these derivative instruments
totaled $706.8 million at December 31, 2020, with a positive valuation
adjustment of $6.4 million, compared to $301.1 million, with a positive
valuation adjustment of $953 thousand at December 31, 2019.

Trustmark utilizes a portfolio of exchange-traded derivative instruments, such
as Treasury note futures contracts and option contracts, to achieve a fair value
return that economically hedges changes in fair value of the MSR attributable to
interest rates. These transactions are considered freestanding derivatives that
do not otherwise qualify for hedge accounting under GAAP. The total notional
amount of these derivative instruments was $326.5 million at December 31, 2020
compared to $564.0 million at December 31, 2019. These exchange-traded
derivative instruments are accounted for at fair value with changes in the fair
value recorded as noninterest income in mortgage banking, net and are offset by
the changes in the fair value of the MSR. The MSR fair value represents the
present value of future cash flows, which among other things includes decay and
the effect of changes in interest rates. Ineffectiveness of hedging the MSR fair
value is measured by comparing the change in value of hedge instruments to the
change in the fair value of the MSR asset attributable to changes in interest
rates and other market driven changes in valuation inputs and assumptions. The
impact of this strategy resulted in a net positive ineffectiveness of $7.8
million for the year ended December 31, 2020, compared to a net negative
ineffectiveness of $11.5 million for the year ended December 31, 2019 and a net
positive ineffectiveness of $2.4 million for the year ended December 31, 2018.

                                       69

--------------------------------------------------------------------------------
Trustmark offers certain interest rate derivatives products directly to
qualified commercial lending clients seeking to manage their interest rate risk
under loans they have entered into with TNB. Trustmark economically hedges
interest rate swap transactions executed with commercial lending clients by
entering into offsetting interest rate swap transactions with institutional
derivatives market participants. Derivatives transactions executed as part of
this program are not designated as qualifying hedging relationships under GAAP
and are, therefore, carried on Trustmark's financial statements at fair value
with the change in fair value recorded as noninterest income in bank card and
other fees. Because these derivatives have mirror-image contractual terms, in
addition to collateral provisions which mitigate the impact of non-performance
risk, the changes in fair value are expected to substantially offset. The
Chicago Mercantile Exchange rules legally characterize variation margin
collateral payments made or received for centrally cleared interest rate swaps
as settlements rather than collateral. As a result, centrally cleared interest
rate swaps included in other assets and other liabilities are presented on a net
basis in the accompanying consolidated balance sheets. As of December 31, 2020,
Trustmark had interest rate swaps with an aggregate notional amount of $1.125
billion related to this program, compared to $893.1 million as of December 31,
2019.

Credit-Risk-Related Contingent Features

Trustmark has agreements with its financial institution counterparties that contain provisions where if Trustmark defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then Trustmark could also be deemed to be in default on its derivatives obligations.

As of December 31, 2020 and 2019, the termination value of interest rate swaps
in a liability position, which includes accrued interest but excludes any
adjustment for nonperformance risk, related to these agreements was $1.3 million
and $1.0 million, respectively. As of December 31, 2020, Trustmark had posted
collateral of $1.6 million against its obligations because of negotiated
thresholds and minimum transfer amounts under these agreements. If Trustmark had
breached any of these triggering provisions at December 31, 2020, it could have
been required to settle its obligations under the agreements at the termination
value (which is expected to approximate fair market value).

Credit risk participation agreements arise when Trustmark contracts with other
financial institutions, as a guarantor or beneficiary, to share credit risk
associated with certain interest rate swaps. These agreements provide for
reimbursement of losses resulting from a third-party default on the underlying
swap. At both December 31, 2020 and 2019, Trustmark had entered into three risk
participation agreements as a beneficiary with aggregate notional amounts of
$41.1 million and $37.6 million, respectively.  As of December 31, 2020,
Trustmark had entered into twenty-four risk participation agreements as a
guarantor with an aggregate notional amount of $172.0 million compared to ten
risk participation agreements as a guarantor with an aggregate notional amount
of $79.3 million at December 31, 2019. The aggregate fair values of these risk
participation agreements were immaterial at December 31, 2020 and 2019.

Trustmark's participation in the derivatives markets is subject to increased
federal regulation of these markets. Trustmark believes that it may continue to
use financial derivatives to manage interest rate risk and also to offer
derivatives products to certain qualified commercial lending clients in
compliance with the Volcker Rule. However, the increased federal regulation of
the derivatives markets has increased the cost to Trustmark of administering its
derivatives programs. Some of these costs (particularly compliance costs related
to the Volcker Rule and other federal regulations) are expected to recur in the
future.

© Edgar Online, source Glimpses