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

Description of Business



Trustmark, a Mississippi business corporation incorporated in 1968, is a bank
holding company headquartered in Jackson, Mississippi.  Trustmark's principal
subsidiary is Trustmark National Bank (TNB), initially chartered by the State of
Mississippi in 1889.  At June 30, 2021, TNB had total assets of $17.096 billion,
which represented approximately 99.99% of the consolidated assets of Trustmark.

Through TNB and its other subsidiaries, Trustmark operates as a financial
services organization providing banking and other financial solutions through
180 offices and 2,772 full-time equivalent associates (measured at June 30,
2021) located in the states of Alabama, Florida (primarily in the northwest or
"Panhandle" region of that state, which is referred to herein as Trustmark's
Florida market), Mississippi, Tennessee (in the Memphis and Northern Mississippi
regions, which are collectively referred to herein as Trustmark's Tennessee
market), and Texas (primarily in Houston, which is referred to herein as
Trustmark's Texas market).  Trustmark's operations are managed along three
operating segments: General Banking Segment, Wealth Management Segment and
Insurance Segment.  For a complete overview of Trustmark's business, see the
section captioned "The Corporation" included in Part I. Item 1. - Business of
Trustmark's Annual Report on Form 10-K for its fiscal year ended December 31,
2020 (2020 Annual Report).

Executive Overview

Trustmark has been committed to meeting the banking and financial needs of its
customers and communities for over 130 years, and remains focused on providing
support, advice and solutions to meet its customers' unique needs. Trustmark's
financial performance during the three and six months ended June 30, 2021
reflect solid growth in loans held for investment (LHFI) of $169.2 million, or
1.7%, and $328.3 million, or 3.3%, respectively, and deposits of $248.6 million,
or 1.7%, and $583.3 million, or 4.2%, respectively. Mortgage banking revenue
remained strong during the first six months of 2021 following record setting
levels in the prior year. During the second quarter of 2021, Trustmark sold
$354.2 million of its outstanding Paycheck Protection Program (PPP) loans,
resulting in accelerated recognition of $18.6 million of unamortized PPP loan
origination fees, net of cost, which is included in net interest income for the
quarter ended June 30, 2021. See the section captioned "Paycheck Protection
Program" for additional information regarding the PPP loan sale. Trustmark is
committed to managing the franchise for the long term, supporting investments to
promote profitable revenue growth, realigning delivery channels to support
changing customer preferences as well as reengineering and efficiency
opportunities to enhance long-term shareholder value. Trustmark's capital
position remained solid, reflecting the consistent profitability of its
diversified financial services businesses. Trustmark's Board of Directors
declared a quarterly cash dividend of $0.23 per share. The dividend is payable
September 15, 2021, to shareholders of record on September 1, 2021.

Recent Economic and Industry Developments



The COVID-19 pandemic and actions taken to mitigate the spread of it have had
and may continue to have an adverse impact on economic activity globally,
nationally and locally, including the geographical area in which Trustmark
operates and industries in which Trustmark regularly extends credit. For
additional information regarding Trustmark's exposure to industries impacted by
the COVID-19 pandemic, please see the section captioned "Exposure to COVID-19
Stressed Industries." Economic activity during the first six months of 2021
increased as certain restrictions were lifted following increased COVID-19
vaccination rates; however, restrictions remain in place for many areas and the
long-term effectiveness of the vaccine and the full impact of the COVID-19
pandemic on economies and financial markets remains unknown.

Additionally, the COVID-19 pandemic has significantly affected the financial
markets and resulted in a number of actions by the FRB during 2020 and
continuing in 2021. Market interest rates declined to and remain at historical
lows. During 2020, the ten-year Treasury yield fell below 1.00% for the first
time, and the FRB reduced the target federal funds rate to a range of 0.00% to
0.25% and announced a $700 billion quantitative easing program in response to
the expected economic downturn caused by the COVID-19 pandemic. The FRB reduced
the interest that it pays on excess reserves from 1.60% to 0.10% during the
first quarter of 2020. These rates have continued into the second quarter of
2021. The prolonged reduction in interest rates has had and is expected to
continue to have an adverse effect on net interest income and margins and
profitability for financial institutions, including Trustmark.

In the July 2021 "Summary of Commentary on Current Economic Conditions by Federal Reserve District," the twelve Federal Reserve Districts' reports suggested that economic activity during the reporting period (covering the period from May 25, 2021


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through July 2, 2021) strengthened further, displaying moderate to robust growth; however, changes in economic activities remained varied by sector. Reports by the twelve Federal Reserve Districts (Districts) noted the following during the reporting period:

• Sectors reporting above-average growth included transportation, travel and

tourism, manufacturing and nonfinancial services. Energy markets improved

slightly, while agriculture had mixed results. Supply chain disruptions,

including shortages of materials, labor, delivery delays and low inventories

of many consumer goods, became more widespread. Strained car inventories

resulted in somewhat lower car sales despite steady demand, and home sales


      rose slightly despite limited supply. Non-auto retail sales grew at a
      moderate pace, and tourism was buoyed by the further abatement of
      pandemic-related concerns.

• Residential construction softened in several Districts in response to rising


      costs, while commercial construction was mixed but slightly up.


   •  Prices increased at an above-average pace. Pricing pressures were

broad-based and grew more acute in the hospitality sector, as the reopening

of hotels and restaurants confronted limited supplies of materials and

workers. Construction costs remained high, but lumber prices eased a

bit. Pricing power was mixed across the Districts, as some contacts reported

that high end-user demand enabled them to increase their prices and others

said that input price pressures had reduced profit margins. While some

contacts felt that pricing pressures were transitory, the majority expected

further increases in input costs and selling prices in the coming months.

• The majority of Districts reported slight or modest job gains, while the

remainder reported moderate to strong increases in employment. Healthy labor

demand was broad-based but was seen as strongest for low-skilled

positions. Wages increased at a moderate pace on average and low-wage

workers enjoyed above-average pay increases. Labor shortages were often

cited as a reason firms could not staff at desired levels. All Districts

noted an increased use of non-wage cash incentives to attract and retain

workers. Firms in several Districts expected the difficulty finding workers

to extend into the fall.

• Banking contacts in most Districts reported lending activity increased


      slightly or modestly.


   •  Outlooks for demand improved further, but many contacts expressed
      uncertainty or pessimism over the easing of supply constraints.


Reports by the Federal Reserve's Sixth District, Atlanta (which includes
Trustmark's Alabama, Florida and Mississippi market regions), Eighth District,
St. Louis (which includes Trustmark's Tennessee market region), and Eleventh
District, Dallas (which includes Trustmark's Texas market region), noted similar
findings for the reporting period as those discussed above. The Federal
Reserve's Sixth District noted that banking conditions were steady, deposit
balances grew and demand for consumer loans picked up. The Federal Reserve's
Eleventh District also reported that drilling and completion activity expanded
moderately, oil field services firms noted difficulty hiring to support
increased oil field activity, exploration and production firms slightly revised
up their production outlook for this and next year due to strong year-to-date
results and a higher oil price forecast for 2022, and sentiment in the oil and
gas industry continued to improve; however, contacts remain cautious about tax
policy changes and rising materials and labor costs.

It is unknown what the complete financial effect of the COVID-19 pandemic will
be on Trustmark. It is reasonably possible that estimates made in the financial
statements, including the expected credit losses on loans and off-balance sheet
credit exposures, could be materially and adversely impacted in the near term as
a result of the adverse conditions associated with the COVID-19 pandemic.

Exposure to COVID-19 Stressed Industries



The full impact of COVID-19 is unknown and continues to evolve rapidly. It has
caused substantial disruption in international and the United States economies,
markets and employment. The pandemic 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 June 30, 2021:

• Restaurants: Aggregate outstanding balance of $104.0 million, credit

exposure of $118.0 million, 297 total loans, represents 1.0% of Trustmark's

outstanding LHFI portfolio, 87% of the loans are real estate secured, 39%

are full-service restaurants, 59% are limited-service restaurants and 2% are

other.

• Hotels: Aggregate outstanding balance of $365.0 million, credit exposure of

$388.0 million, 90 total loans, represents 3.6% of Trustmark's outstanding

LHFI portfolio, 99% of the loans are real estate secured, consists of

experienced operators and carry secondary guarantor support, 92% operate

under a major hotel chain.

• Retail (Commercial Real Estate): Aggregate outstanding balance of $437.0

million, credit exposure of $507.0 million, 295 total loans, represents 4.3%

of Trustmark's outstanding LHFI portfolio, 22% are stand-alone buildings

with strong essential services tenants, 1% are national grocery

store-anchored, 18% are investment grade anchored centers, mall exposure in


      only one borrower with $5 million outstanding.


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• Energy: Aggregate outstanding balance of $93.0 million, credit exposure of

$301.0 million, 101 total loans, represents 0.9% 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 $9.6

million, credit exposure of $13.7 million, one borrower.




During the second quarter of 2021, Trustmark conducted an analysis of borrowers
rated watch or worse that received a concession as well as other borrowers in
industries significantly impacted by COVID-19 (e.g., restaurants and hotels)
with $1.0 million or more in outstanding balances. Collectively, the review
included borrowers with $482.0 million in outstanding balances at June 30,
2021. As a result of this review, $4.5 million was downgraded to a criticized
category, none of which was in the COVID-19 impacted industries. A total of
$14.5 million was removed from a criticized category, which included borrowers
in COVID-19 impacted industries.

COVID-19 Related 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 encouraged 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 went on
to explain that, in consultation with the FASB staff, the federal banking
agencies concluded 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 were not TDRs. On March 27, 2020, the Coronavirus Aid, Relief,
and Economic Security Act (the CARES Act), a 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 were 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. The Consolidated Appropriations Act, 2021,
enacted on December 27, 2020, amended section 4013 of the CARES Act to provide
an extension of the period in which TDR relief is available to financial
institutions. At June 30, 2021, the balance of loans remaining under some type
of COVID-19 related concession totaled $19.0 million compared to $34.2 million
at December 31, 2020. 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 initial funds for the creation of the PPP
through the Small Business Administration (SBA) and Treasury Department. The PPP
is intended to provide loans to small businesses, sole proprietorships,
independent contractors and self-employed individuals 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. The loans are 100% guaranteed by
the SBA. The SBA and Treasury Department released a series of rules, guidance
documents and processes governing the PPP, including a streamlined process for
loan forgiveness of PPP loans of $150 thousand or less. The Consolidated
Appropriations Act, 2021 extended some of the relief provisions in certain
respects of the CARES Act, and appropriated additional funds to the PPP and
permitted certain PPP borrowers to make "second draw" loans. Subsequently, the
American Rescue Plan Act of 2021, enacted on March 11, 2021, expanded the
eligibility criteria for both first and second draw PPP loans and revised the
exclusions from payroll costs for purposes of loan forgiveness. The PPP
Extension Act of 2021, enacted on March 30, 2021, extended the PPP through May
31, 2021.

From April to August 2020, Trustmark originated PPP loans for qualified small
businesses and other borrowers. Trustmark resumed submitting PPP applications to
the SBA on behalf of qualified small businesses and other borrowers under the
CARES Act, as amended by the Consolidated Appropriations Act, 2021, in January
2021. During the first six months of 2021, Trustmark originated 5,727 PPP loans
totaling $376.2 million ($354.5 million net of $21.7 million of deferred fees
and costs).

On June 30, 2021, Trustmark announced the sale of approximately $354.2 million
of its outstanding PPP loans, substantially all PPP loans originated in 2021, to
The Loan Source, Inc. (Loan Source), a firm with significant expertise in PPP
loans. As a result of this transaction, Loan Source will assume responsibility
for the servicing and forgiveness process for the loans it has acquired from
Trustmark. This transaction will allow Trustmark to focus on more traditional
lending efforts and increase its ability to provide customers with financial
services in an improving economic environment. Trustmark accelerated the
recognition of unamortized PPP loan origination fees, net of cost, of
approximately $18.6 million, in the second quarter of 2021 due to the sale. This
revenue is substantially the same as Trustmark would expect to recognize upon
the maturity or forgiveness of the PPP loans being sold in this transaction, and
thus this transaction serves to accelerate revenue anticipated in future periods
and recognize it during the second quarter of 2021.

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At June 30, 2021, Trustmark had 843 PPP loans outstanding totaling $168.2
million ($166.1 million net of $2.1 million of deferred fees and costs),
compared to 7,398 PPP loans outstanding totaling $623.0 million ($610.1 million
net of 12.9 million of deferred fees and costs) at December 31, 2020. In
addition to the loans sold, PPP loans totaling $476.9 million were forgiven by
SBA during the first six months of 2021, compared to PPP loans totaling $346.9
million forgiven by the SBA during the fourth quarter of 2020.

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. 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, 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.

Financial Highlights



Trustmark reported net income of $48.0 million, or basic and diluted earnings
per share (EPS) of $0.76, in the second quarter of 2021, compared to $32.2
million, or basic and diluted EPS of $0.51, in the second quarter of 2020.
Trustmark's reported performance during the quarter ended June 30, 2021 produced
a return on average tangible equity of 13.96%, a return on average assets of
1.13%, an average equity to average assets ratio of 10.46% and a dividend payout
ratio of 30.26%, compared to a return on average tangible equity of 10.32%, a
return on average assets of 0.83%, an average equity to average assets ratio of
10.73% and a dividend payout ratio of 45.10% during the quarter ended June 30,
2020.

Trustmark reported net income of $99.9 million, or basic and diluted EPS of
$1.58 and $1.57, respectively, for the six months ended June 30, 2021, compared
to $54.4 million, or basic and diluted EPS of $0.86 and $0.85, respectively, for
the six months ended June 30, 2020. Trustmark's reported performance during the
first six months of 2021 produced a return on average tangible equity of 14.75%,
a return on average assets of 1.20%, an average equity to average assets ratio
of 10.50% and a dividend payout ratio of 29.11%, compared to a return on average
tangible equity of 8.84%, a return on average assets of 0.75%, an average equity
to average assets ratio of 11.33% and a dividend payout ratio of 53.49% for the
first six months of 2020.

Total revenue, which is defined as net interest income plus noninterest income,
for the three and six months ended June 30, 2021 was $175.8 million and $338.8
million, respectively, an increase of $1.3 million, or 0.8%, and a decrease of
$5.0 million, or 1.4%, respectively, when compared to the same time periods in
2020. The increase in total revenue for the second quarter of 2021 when compared
to the same time period in 2020, resulted from an increase in net interest
income, primarily due to the accelerated recognition of the unamortized loan
fees on the PPP loans sold during the quarter ended June 30, 2021, largely
offset by a decline in noninterest income, primarily due to a decline in
mortgage banking, net. The decrease in total revenue for the six months ended
June 30, 2021 when compared to the same time period in 2020, resulted from a
decline in noninterest income, primarily due to a decrease in mortgage banking,
net, partially offset by an increase in net interest income, primarily due to an
increase in interest and fees on PPP loans and a decline in interest on
deposits, partially offset by declines in interest and fees on LHFI and LHFS and
interest on securities. These factors are discussed in further detail below.

Net interest income for the three and six months ended June 30, 2021 totaled
$119.4 million and $221.8 million, respectively, an increase of $14.4 million,
or 13.7%, and $12.8 million, or 6.1%, respectively, when compared to the same
time periods in 2020. Interest income totaled $125.9 million and $235.4 million
for the three and six months ended June 30, 2021, respectively, an increase of
$11.3 million, or 9.8%, and $350 thousand, or 0.1%, respectively, when compared
to the same time periods in 2020, principally due to the increase in interest
and fees from PPP loans, partially offset by declines in interest and fees from
LHFI and LHFS and interest on securities as a result of lower interest
rates. Interest expense totaled $6.5 million and $13.6 million for the three and
six months ended June 30, 2021, respectively, a decrease of $3.2 million, or
32.6%, and $12.5 million, or 47.7%, respectively, when compared to the same time
periods in 2020, principally due to the decline in interest on deposits as a
result of lower interest rates.

Noninterest income for the three months ended June 30, 2021 totaled $56.4
million, a decrease of $13.1 million, or 18.8%, when compared to the same time
period in 2020, primarily due to a decline in mortgage banking, net, partially
offset by increases in wealth management and service charges on deposit
accounts. Mortgage banking, net totaled $17.3 million for the three months ended
June 30, 2021, a decrease of $16.4 million, or 48.6%, when compared to the same
time period in 2020, principally due to a decline in the gain on sales of loans,
net partially offset by an increase in the net hedge ineffectiveness. Wealth
management income totaled $8.9 million for the second quarter of 2021, an
increase of $1.4 million, or 18.2%, when compared to the second quarter of 2020,
primarily due to increases in income from both investment services and trust
management services. Service charges on deposit accounts totaled $7.6 million
for the three months ended June 30, 2021, an increase of $1.2 million, or 19.0%,
when compared to the same time period in 2020 principally due to an increase in
the amount of non-sufficient funds (NSF) and overdraft occurrences on consumer
demand deposit accounts (DDAs) and interest checking accounts and commercial
DDAs, primarily as a result of an increase in customer transactions with the
further abatement of pandemic-related concerns.

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Noninterest income for the first six months of 2021 totaled $117.0 million, a
decrease of $17.8 million, or 13.2%, when compared to the same time period in
2020. The decrease in noninterest income when the first six months of 2021 is
compared to the same time period in 2020 was principally due to a decline in
mortgage banking, net, partially offset by an increase in bank card and other
fees. Mortgage banking, net totaled $38.1 million for the six months ended June
30, 2021, a decrease of $23.1 million, or 37.7%, when compared to the same time
period in 2020, principally due to declines in the gain on sales of loans, net
and the net hedge ineffectiveness and an increase in the run-off of the
MSR. Bank card and other fees totaled $17.8 million for the first six months of
2021, an increase of $4.7 million, or 36.0%, when compared to the same time
period in 2020, principally due to increases in the credit valuation adjustment
on customer derivatives and interchange income from point-of-sale transactions
partially offset by a decline in interchange income from signature
transactions.

Noninterest expense for the three months ended June 30, 2021 totaled $118.7
million, an increase of $6.3 million, or 5.6%, when compared to the same time
period in 2020, principally due to increases in salaries and employee benefits,
other real estate expense, net and services and fees. Salaries and employee
benefits totaled $70.1 million for the three months ended June 30, 2021, an
increase of $4.0 million, or 6.1%, when compared to the same time period in
2020. The increase in salaries and employee benefits when the second quarter of
2021 is compared to the same time period in 2020 was principally due to
increases in salaries expense, primarily resulting from general merit increases,
accruals for annual general incentives and commission expense, primarily due to
the increase in mortgage originations and production. Other real estate expense,
net totaled $1.5 million for the three months ended June 30, 2021, an increase
of $1.2 million when compared to the same time period in 2020, principally due
to an increase in reserves for other real estate write-downs. Services and fees
totaled $21.8 million for the three months ended June 30, 2021, an increase of
$1.2 million, or 5.8%, when compared to the same time period in 2020, primarily
due to increases in data processing charges related to software.

Noninterest expense for the six months ended June 30, 2021 totaled $240.2
million, an increase of $10.8 million, or 4.7%, when compared to the same time
period in 2020, principally due to increases in salaries and employee benefits
and services and fees. Salaries and employee benefits totaled $141.3 million for
the six months ended June 30, 2021, an increase of $6.0 million, or 4.5%, when
compared to the same time period in 2020. The increase in salaries and employee
benefits when the first six months of 2021 is compared to the same time period
in 2020 was principally due to increases in commissions expense resulting from
improvements in mortgage originations and production, salary expense as a result
of general merit increases, accruals for annual incentive compensation and
incentive stock compensation, partially offset by non-routine expenses related
to the voluntary early retirement program completed by Trustmark during the
first quarter of 2020. Trustmark incurred $4.3 million of non-routine salaries
and employee benefits expense during the first quarter of 2020 related to this
program. Excluding these non-routine expenses, salaries and employee benefits
increased $10.3 million, or 7.9%, when the first six months of 2021 is compared
to the same time period in 2020. Services and fees totaled $44.3 million for the
six months ended June 30, 2021, an increase of $3.8 million, or 9.3%, when
compared to the same time period in 2020, primarily due to increases in data
processing charges related to software and outside services and fees related to
independent contractors expenses.

Trustmark's provision for credit losses on LHFI for the three and six months
ended June 30, 2021 totaled a negative $4.0 million and a negative $14.5
million, respectively, a decrease of $22.2 million and $53.3 million,
respectively, when compared to the same time periods in 2020. The provision for
credit losses on off-balance sheet credit exposures totaled $4.5 million and a
negative $4.8 million for the three and six months ended June 30, 2021,
respectively, a decrease of $1.7 million and $17.9 million, respectively, when
compared to the same time periods in 2020. The negative provision for credit
losses on LHFI for the second quarter of 2021 primarily reflected a decline in
required reserves as a result of risk rate upgrades due to improvements in
credit quality, charge-down of an individually evaluated credit for which
reserves were previously established and improvements in macroeconomic
forecasts, partially offset by an increase in reserves as a result of the
implementation of probability of default (PD) and loss-given default (LGD)
floors at a portfolio level to ensure appropriate risk is reflected as
macroeconomic conditions continue to improve. The provision for credit losses on
off-balance sheet credit exposures for the second quarter of 2021 primarily
reflected an increase in required reserves as a result of an increase in
off-balance sheet credit exposures and the implementation of the PD and LGD
floors at a portfolio level. The negative provision for credit losses on both
LHFI and off-balance sheet credit exposures for the first six months of 2021
primarily reflected declines in required reserves as a result of improvements in
the overall economy and macroeconomic factors used in the calculation of the
allowance for credit losses (ACL). Please see the section captioned "Provision
for Credit Losses" for additional information regarding the provision for credit
losses on LHFI and off-balance sheet credit exposures.

At June 30, 2021, nonperforming assets totaled $60.9 million, a decrease of
$13.9 million, or 18.6%, compared to December 31, 2020, primarily due to a
decline in nonaccrual LHFI. Nonaccrual LHFI totaled $51.4 million at June 30,
2021, a decrease of $11.7 million, or 18.5%, relative to December 31, 2020,
primarily due to the pay down and charge off of one large energy-related
commercial credit as well as one large commercial credit which was returned to
accrual status in Trustmark's Mississippi market region. Other real estate
totaled $9.4 million at June 30, 2021, a decline of $2.2 million, or 19.0%,
compared to December 31, 2020, principally due to an increase in reserves for
other real estate write-downs in Trustmark's Mississippi and Alabama market
regions as well as properties sold in the Mississippi, Alabama and Tennessee
market regions.

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LHFI totaled $10.153 billion at June 30, 2021, an increase of $328.3 million, or
3.3%, compared to December 31, 2020. The increase in LHFI during the first six
months of 2021 was primarily due to net growth in LHFI secured by real estate in
Trustmark's Mississippi, Texas, Alabama and Tennessee market regions and state
and other political subdivision loans in the Mississippi, Texas, Alabama and
Florida market regions, partially offset by declines in other commercial LHFI in
the Mississippi, Alabama, Florida and Texas 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 $14.632 billion at June 30, 2021, an increase of $583.3
million, or 4.2%, compared to December 31, 2020, primarily reflecting deposits
of proceeds from line draws, PPP loans and other COVID-19 related stimulus
programs. During the first six months of 2021, noninterest-bearing deposits
increased $98.0 million, or 2.3%, principally due to growth in consumer and
commercial noninterest-bearing DDAs. Interest-bearing deposits increased $485.3
million, or 5.0%, during the first six months of 2021, primarily due to growth
in all categories of interest checking and money market deposit accounts as well
as consumer savings accounts, partially offset by declines in all categories of
certificates of deposits.

Recent Legislative and Regulatory Developments



On March 5, 2021, the United Kingdom Financial Conduct Authority (FCA), which
regulates London Interbank Offered Rate (LIBOR), confirmed that the publication
of most LIBOR term rates will end on June 30, 2023 (excluding one-week U.S.
LIBOR and two-month U.S. LIBOR, the publication of which will end on December
31, 2021). Additionally, on April 6, 2021, New York Governor Cuomo signed into
law legislation that provides for the substitution of an alternative reference
rate, the Secured Overnight Funding Rate (SOFR), in any LIBOR-based contract
governed by New York state law that does not include clear fallback language,
once LIBOR is discontinued. The FRB and other federal banking agencies have
continued to encourage banks to transition away from LIBOR as soon as
practicable. Given LIBOR's extensive use across financial markets, the
transition away from LIBOR presents various risks and challenges to financial
markets and institutions, including Trustmark. 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 Trustmark's 2020 Annual Report.

For additional information regarding legislation and regulation applicable to
Trustmark, see the section captioned "Supervision and Regulation" included in
Part I. Item 1. - Business of Trustmark's 2020 Annual Report.

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Selected Financial Data

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



                                               Three Months Ended June 30,

Six Months Ended June 30,


                                                2021                 2020              2021               2020
Consolidated Statements of Income
Total interest income                      $      125,925       $      114,653     $     235,397       $  235,047
Total interest expense                              6,502                9,653            13,638           26,095
Net interest income                               119,423              105,000           221,759          208,952
Provision for credit losses, LHFI                  (3,991 )             18,185           (14,492 )         38,766
Provision for credit losses, off-balance
sheet
  credit exposures (1)                              4,528                6,242            (4,839 )         13,025
Noninterest income                                 56,411               69,511           116,994          134,775
Noninterest expense (1)                           118,679              112,417           240,227          229,444
Income before income taxes                         56,618               37,667           117,857           62,492
Income taxes                                        8,637                5,517            17,914            8,124
Net Income                                 $       47,981       $       32,150     $      99,943       $   54,368

Total Revenue (2)                          $      175,834       $      174,511     $     338,753       $  343,727

Per Share Data
Basic EPS                                  $         0.76       $         0.51     $        1.58       $     0.86
Diluted EPS                                          0.76                 0.51              1.57             0.85
Cash dividends per share                             0.23                 0.23              0.46             0.46

Performance Ratios
Return on average equity                            10.81 %               7.76 %           11.39 %           6.61 %
Return on average tangible equity                   13.96 %              10.32 %           14.75 %           8.84 %
Return on average assets                             1.13 %               0.83 %            1.20 %           0.75 %
Average equity / average assets                     10.46 %              10.73 %           10.50 %          11.33 %
Net interest margin (fully taxable
equivalent)                                          3.16 %               3.12 %            2.99 %           3.31 %
Dividend payout ratio                               30.26 %              45.10 %           29.11 %          53.49 %

Credit Quality Ratios (3)
Net charge-offs (recoveries) / average
loans                                                0.05 %              -0.02 %           -0.02 %           0.05 %
Provision for credit losses / average
loans                                               -0.16 %               0.74 %           -0.28 %           0.80 %
Nonaccrual LHFI / (LHFI + LHFS)                      0.49 %               0.50 %
Nonperforming assets / (LHFI + LHFS)
  plus other real estate                             0.58 %               0.68 %
ACL LHFI / LHFI                                      1.02 %               1.23 %

(1) During the second quarter of 2021, Trustmark reclassified its credit loss

expense related to off-balance sheet credit exposures from noninterest

expense to provision for credit losses, off-balance sheet credit exposures.

Prior periods have been reclassified accordingly.

(2) Consistent with Trustmark's audited annual financial statements, total

revenue is defined as net interest income plus noninterest income.




(3) Excludes PPP loans.


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