Trustmark
Annual Report 2014

Plain-text annual report

2014 Annual Report Vision Our vision is to be a premier financial services company in our marketplace. Mission Our mission is to achieve outstanding customer satisfaction by providing banking, wealth management and insurance solutions through superior sales and service, utilizing excellent people, teamwork and diversity, while meeting our corporate financial goals. Table of Contents Letter to shareholders Trustmark’s core values Corporate board Corporate information Bank board and executives Regional and market executives Community bank advisory directors Financial highlights 1 5 15 16 17 18 19 23 To our shareholders: 2014 was a year of significant achievement for Trustmark. earnings provided by our diverse financial services businesses. We continued to build upon and expand customer During the year, loans held for investment increased relationships as reflected by growth in our diversified banking, $650.6 million, or 11.2%, to total $6.4 billion. This growth wealth management and insurance businesses. Over the course was diversified by loan type as well as by geographic market of the year, total revenue exceeded $578 million, the highest and reflected continued efforts to provide customers with level in Trustmark’s history. We experienced excellent growth in products that met their specific objectives. Collectively, loans our legacy loan portfolio, and the performance of our acquired held for investment and acquired loans totaled $7.0 billion at loan portfolio continued to exceed expectations. Credit quality December 31, 2014. continued to improve and remained an important contributor Our deposit base, which totaled $9.7 billion at year-end to our success. Our wealth management business achieved 2014, remains diversified and provides an excellent low-cost the highest revenue in its history, while our insurance services source of funds. Approximately 58% of our customers’ deposits business had its best year since 2007. We also made investments are in checking accounts, including 28% in noninterest-bearing to enhance service, revenue generation and productivity as well accounts. Experience and attention to customer relationships as built compliance and risk management systems to position have afforded Trustmark a position of leadership in the majority Trustmark for continued success in the years ahead. of communities we serve. We are particularly pleased to have Our performance is driven by values that have sustained the #1 deposit market share in Mississippi as well as the Jackson this organization for more than 125 years: integrity, service, MSA. Among all markets served, Trustmark has a top-three accountability, relationships and solutions. These values deposit market share in 65% of markets and a top-four position build strong, long-term relationships, the outcome of which in 75% of markets. is reflected in Trustmark’s solid financial results. Our core values unite Trustmark associates and distinguish us from the Credit Quality competition. Trustmark is a community-focused, values-guided Credit quality continues to be a defining strength of organization whose 3,000+ associates make a sustainable Trustmark. During 2014, recoveries exceeded charge-offs, difference in the lives of customers and communities we resulting in a net recovery of $2.0 million while the provision serve. We would like to take this opportunity to review our for loan losses for loans held for investment was $1.2 million. notable financial accomplishments, share our direction for the Classified and criticized loan balances declined 12.3% and future and highlight a few of the ways Trustmark is serving its 15.9%, respectively, over the course of the year. The allowance customers and communities. Financial Highlights for loan losses totaled $69.6 million at December 31, 2014, representing 180.95% of nonperforming loans, excluding impaired loans. The aforementioned credit metrics exclude Trustmark continued to produce solid profitability metrics acquired loans and other real estate covered by FDIC loss- despite continued low interest rates that compressed net share agreement. interest margins and additional regulatory mandates that reduced revenue and increased compliance and operating Risk Management and Capital Strength costs. Net income in 2014 totaled $123.6 million, resulting in Trustmark has embraced an enterprise-wide approach diluted earnings per share of $1.83, an increase of 4.6% from to risk management, which includes comprehensive the prior year. This performance produced a return on average identification, monitoring and proactive mitigation of potential tangible equity of 12.97% and a return on average assets of risks facing the organization. Risk management is also a central 1.03%. Trustmark paid quarterly cash dividends of $0.23, or component of our strategic planning process as well as the $0.92 annually, in 2014. During the year, over half of Trustmark’s process to introduce new products and services. As a financial net income was returned to shareholders through dividends. institution with assets in excess of $10 billion, Trustmark These dividends have grown over time — and have never is subject to capital stress testing requirements. Our Board decreased — as the result of the quality and sustainability of remains actively engaged in reviewing our risk management 1 Photo courtesy of Ken Murphy efforts to ensure liquidity, funding and capital levels are they choose. While we believe banking center offices will remain appropriate under varying stressed conditions. an extremely important delivery channel, banking will continue At year-end 2014, total shareholders’ equity exceeded $1.4 billion, while tangible equity totaled $1.0 billion, or 8.62% of tangible assets. Trustmark’s regulatory capital ratios continue to significantly exceed levels to be classified as well-capitalized. We strive to deploy capital in manners that enhance shareholder value; these capital management options include reinvesting in the franchise to support organic growth, acquisitions to to evolve as something customers will do, not necessarily some place they will go. As such, we are making investments in mobile banking products to ensure our customers’ electronic banking experience is secure, dependable and provides state- of-the-art access and functionality. As customer preferences transition toward conducting create additional growth and diversification opportunities, more banking transactions electronically, we have the consistent dividends and utilizing share repurchase programs opportunity to optimize our branch network. Over the last as appropriate. Positioning for Success in the Changing Financial Services Environment Profitability in the banking industry has diminished as a result of prolonged low interest rates, which reduced net interest income, as well as regulatory mandates that reduced three years, we consolidated 22 offices with limited growth opportunities. We reallocated a portion of these resources to expand our banking center presence with the addition of five offices in attractive markets including Birmingham and Montgomery, Alabama; Memphis, Tennessee; and Houston, Texas. These actions better align our branch network to serve interchange income for financial institutions with assets greater our customers, improve efficiency and profitability, and than $10 billion. In addition to these revenue headwinds, position the corporation for additional growth. heightened regulatory oversight and related compliance requirements have significantly increased the cost of doing business. Trustmark has been impacted by these challenges as well. Rather than focus upon what is beyond our control, we choose to diligently take action in areas within our control. We have adapted to this changing environment by repositioning product offerings, reducing the square footage During the year, Trustmark National Bank created a new position of Chief Administrative Officer with responsibility for coordinating resources within the organization that support revenue-generating activities of various business lines. Jim Outlaw, an established banker and former chief information officer with tenure of 18 years at Trustmark, was selected of our new banking centers and investing in technology that to support our efforts to streamline processes to improve enables customers to conduct business where, when and how efficiency and profitability across the organization. 2 TRMK Corporate Office Revenue Generation complementary nature of its diverse businesses. While Trustmark’s total revenue reached a record level of $578.5 contributions from our mortgage banking business declined, million in 2014. Our banking business continued to post our wealth management and insurance services each posted solid growth as revenue increased to $464.1 million, or 80% significant growth. of our total revenue. Net interest income (FTE) increased to Our wealth management division, which provides $421.2 million, resulting in a net interest margin of 4.03% in comprehensive and integrated services to accumulate, 2014 compared to 4.01% in 2013. Excluding acquired loans, preserve and transfer wealth, achieved the highest the net interest margin in 2014 was 3.52%, down only three revenue in its history. For the year, revenue totaled $33.1 basis points from the prior year. million, an increase of 10.1% from the prior year. This Our mortgage banking, wealth management and growth was attributable to improved profitability within insurance businesses continued to make significant the trust management business as well as increased sales contributions to our financial success. Collectively, these within investment services resulting from improved complementary businesses represented 20% of Trustmark’s market conditions. Wealth management assets, which total revenue in 2014. Mortgage loan production in 2014 include trust and brokerage assets, totaled $11.7 billion at totaled $1.2 billion, a decline of 17.8% from levels in 2013; December 31, 2014. this decline was attributable to lower refinancing activity Trustmark’s insurance services division, which following an extended low interest rate environment. provides a full range of commercial and personal risk Mortgage banking revenue totaled $47.6 million, a decline of management products, had its best year since 2007. With 18.7% from the prior year, principally due to lower secondary a continued focus on business development, revenue marketing gains resulting from tightening mortgage spreads for the year totaled $33.7 million, an increase of 8.3% and reduced volume. One of Trustmark’s strengths is the compared to 2013. 33 Expense Management Trustmark remains committed to continuous targeted small business lending within low-to-moderate income areas as well as almost $123 million in community improvement and has a proven process for investing in our development loans primarily benefiting low- and moderate- businesses to promote growth and efficiency. As we have said income individuals. Our collaborative work with community on numerous occasions, expense management at Trustmark is not a one-time program, but is rather a long-standing culture to ensure value is maximized from each dollar spent. In 2014, noninterest expense totaled $409.0 million, down 1.6% from the prior year. Although total noninterest expense declined, we reallocated resources and made significant investments in mobile and digital banking platforms and will introduce new features in 2015 including remote deposit and enhanced bill pay functionality. These investments are designed to provide additional convenience and service for our customers. Community Involvement Trustmark has a strong legacy of being actively engaged in its communities and believes that a solid understanding of basic financial concepts is essential to creating a stronger future. Each year, our associates spend thousands of hours in their communities in ways that are sustainable and meaningful. In 2014, Trustmark associates taught over 250 financial education classes, covering such topics as service providers, developers, realtors, housing advocates and others resulted in nearly $11 million of investments that provided affordable housing, employment and community services for those with low-to-moderate incomes. This is a direct reflection of our commitment to strengthen the communities in which we operate. Focus on the Future We understand and respect the sources of our continuing success and remain steadfast in our commitment to the customers, associates, shareholders and communities we have the privilege of serving. Our core values have sustained this organization for more than 125 years, and we look to the future with confidence and optimism. Trustmark is well positioned to pursue opportunities for growth, navigate the changing regulatory landscape and, most importantly, help our customers achieve financial success. In 2015, we will continue to broaden customer relationships, refine the delivery of our products and services, improve operational homebuyer education, credit counseling, budgeting, savings efficiency and effectively manage risk. and other basic financial concepts. In addition, during the We appreciate your support and look forward to year, we implemented the Trustmark Financial Scholars providing banking and financial solutions to meet your needs. Program to enhance financial literacy of students at 125 high Trustmark is “People you trust. Advice that works.” schools across Mississippi. Through this initiative, Trustmark helped to pioneer a statewide public, private and non-profit partnership to bring personal finance education to every high school in the state. We are using the tools teens love — digital learning and gaming — to bring complex financial concepts to life for today’s millennial generation. We are proud to support programs that make a positive difference in the community. Trustmark continues to operate under an “Outstanding” rating by the Office of the Comptroller of the Currency for its Community Reinvestment Act (CRA) program. Our CRA program provided nearly $100 million in home mortgages within low-to-moderate income areas and $82 million in home mortgages to low-to-moderate income borrowers. Trustmark also provided approximately $170 million in 4 Sincerely,Daniel A. GraftonChairmanTrustmark CorporationGerard R. HostPresident and Chief Executive OfficerTrustmark CorporationBuilt on trust. Guided by values. Trustmark ranks as one of the South’s oldest and strongest financial institutions, comprised of more than 3,000 professionals serving customers through over 200 banking centers. Trustmark now has a five-state franchise, something that the company’s founders would have never envisioned. Growth has been achieved by offering sound products and providing exceptional service, while also living the core values that have defined the company throughout its history — integrity, service, accountability, relationships and solutions. These values have earned the trust of customers and community partners, united Trustmark associates and provided the foundation that has helped Trustmark continue to be a solid investment for shareholders. An organization rooted in integrity Trustmark’s leadership has always believed that earning trust begins with an unwavering commitment to absolute integrity. Every day, in every interaction and in every Trustmark associate, you can see integrity in action. Integrity has served as Trustmark’s guiding philosophy, shaping policies, framing relationships and directing how we present ourselves and conduct business. As we expand into new markets and forge relationships with new customers and communities, the Trustmark name is preceded by a reputation of integrity built through 125 years of conducting business ethically and honestly. 5 Financial strength in action: Hix Snedeker The next time you drive by a Tractor Over the past several years, Trustmark Supply Company store or a Dollar has financed 37 Hix Snedeker projects General, there’s a strong possibility that totaling more than $85 million. The it was built by Hix Snedeker Companies projects financed by Trustmark have with financing from Trustmark. Founded by principals Ray Hix and Haymes Snedeker, the firm is a commercial real estate development company specializing in build-to-suit net lease developments. The company is one of the leading developers in the country for Tractor Supply Company, the largest operator of rural lifestyle stores in the United States. In addition to their work with Tractor Supply, Hix Snedeker has developed a significant number of stores for Dollar General, been located in eleven states: Alabama, California, Colorado, Florida, Georgia, Louisiana, Mississippi, North Dakota, Texas, Utah and Wyoming. Hix stated, “We have a great deal of confidence in our relationship with Trustmark. They have integrity, and that’s important to us. Also, we know that when we enter into a development, our bank will be right there with us. Trustmark has been a critical part of our success.” as well as a number of other clients. By working with companies like Hix Snedeker turned to Trustmark Hix Snedeker, Trustmark is helping because of its financial strength, fuel economic growth throughout the responsiveness and reputation. Trustmark market area. Tractor Supply Company store developed by Hix Snedeker Haymes Snedeker and Ray Hix, co-founders of Hix Snedeker 6 Creating a culture of service Service is the cornerstone of Trustmark’s culture. In today’s highly competitive financial services industry, it is not acceptable to provide service that simply meets expectations. A company must consistently exceed expectations in order to gain customer loyalty. Trustmark associates are committed to providing outstanding service and strive daily to exceed expectations, never taking customer loyalty for granted. Our growth over the years can be attributed to a successful combination of repeat business from customers who have relied upon us as their trusted financial partner, along with new customers seeking to experience the level of service our associates are accustomed to providing. 7 Changing lives through lending: Waterfront Rescue Mission Since 1949, Waterfront Rescue Mission that resulted in significant savings for the has been serving the community by Mission during the construction phase of providing meals, overnight housing, job the building project. training, healthcare and addiction services Mission director Bill Bru explained that for homeless people in Mobile, Alabama. the new facility has made a profound For years, the Mission was housed difference in their ability to meet the needs in three adjacent Victorian houses, of the homeless population in Mobile. which limited their ability to meet the “The new facility has allowed the Mission demand for their services. In order to to serve more people than ever. It has expand, they needed a new purpose- almost doubled bed capacity and greatly built facility. Trustmark recognized this increased access to the Mission’s services,” need and worked with the Mission to said Bru. Currently, the Mission serves make it happen. approximately 400 meals per day and The Mission received a $7.5 provides overnight housing for an average million investment through Southern of 90 people per night. Community Capital, a subsidiary of Trustmark is proud to work with Trustmark National Bank that provides organizations like Waterfront Rescue below-market cost capital to projects in Mission because their goal reflects underserved low-income communities. one of Trustmark’s goals — to serve the Utilizing New Market Tax Credits, community in a way that will make life Trustmark was able to structure a package better for all who live there. Bill Bru, director of Waterfront Rescue Mission 8 Acting with accountability Actions are oftentimes meaningless without accountability. Throughout the Trustmark organization, every associate understands that they are accountable to customers, communities, shareholders and to each other. Accountability goes far beyond responsibility. It involves taking total ownership of an issue, task or project and seeing it through to a successful completion. Accountability means making sure that a customer’s need is addressed to the fullest extent. It means ensuring that we support our communities to help make them better places to live, work and conduct business. It means doing everything in our power to manage the organization in a manner that creates long-term value for our shareholders. And, for every Trustmark associate, accountability means ensuring that we each carry out our responsibilities thoroughly and professionally every day. 9 An investment in the future: The Trustmark Financial Scholars Program Trustmark recognizes that the One of the schools chosen to most impactful way to invest in the participate in this innovative program future is to invest in children. One was Columbia High School. Sheila example of this philosophy in action Burbridge, the school’s principal, is the Trustmark Financial Scholars explained that the program is making Program. a tremendous difference in the lives of In honor of its 125th anniversary, Columbia students. “This program is Trustmark partnered with EverFi, preparing our students for success in the a leading education technology real world after graduation,” Burbridge company, to bring an interactive said. “It is giving them a solid foundation financial management program to 125 for their financial future.” Mississippi public and private high The Financial Scholars Program is schools. Focused on financial literacy, one more example of how Trustmark the Trustmark Financial Scholars is demonstrating accountability by Program educates young people promoting financial literacy programs in a number of key areas including which position students for success. The taxes, investing, insurance, saving program has been so well received that money, debt, building credit and the school has made it a required course more. For many students, it is their for high school juniors and seniors. Even first exposure to financial basics like members of the school’s staff are taking balancing a checkbook or establishing part in the program as part of their a savings account. continuing education. Olivia Jarman, Columbia High School teacher, advises Trustmark Financial Scholars Program student Sheila Burbridge, principal of Columbia High School 10 Earning business by cultivating relationships Trustmark has grown to serve communities across five states — Alabama, Florida, Mississippi, Tennessee and Texas. These towns and cities are more to us than just locations on a map. They are our communities, filled with families, individuals and businesses that we seek to serve. We see every member of these communities as part of a network of integral relationships that are important. Trustmark has built its customer base by building relationships: from the customers in the lobby or online to the parents at the local baseball field; from mom- and-pop proprietors to CEOs of the largest corporations; from the teenager opening a first checking account to the wealth management client establishing a trust fund to preserve their legacy for generations. Just as the success we enjoy today is a result of relationships forged years ago, the future of Trustmark is tied to maintaining these relationships as well as those we will continue to develop. Relationships are our future, which is why we work diligently to nurture them at every opportunity. 11 A business relationship built on trust: Emerald Coast Culligan When businesses grow, so do According to owner Jay Trumbull, communities. Throughout the much of the company’s growth can South, Trustmark is building strong be attributed to strategic acquisitions. relationships with businesses like As the company’s primary bank, Emerald Coast Culligan, helping them Trustmark has provided Emerald Coast achieve their growth potential through Culligan financing to help achieve a full spectrum of business banking their acquisition goals. Trumbull’s and risk management services. relationship with Trustmark extends From locations in Alabama, Florida beyond business banking. The and Georgia, Emerald Coast Culligan company also utilizes the insurance offers a broad range of water treatment and risk management services of solutions for residential, commercial Trustmark subsidiary Fisher Brown and industrial applications. The Bottrell, Inc. company also provides bottled water “We very much value our for homes and businesses. With annual relationships with Trustmark and Fisher sales of $10 million, Emerald Coast Brown Bottrell,” Trumbull stated. “They Culligan employs more than 75 people have always been responsive, efficient and operates a fleet of 60 vehicles. and easy to work with.” Jay Trumbull, owner of Emerald Coast Culligan 12 Financial solutions for a changing world The pace of today’s world is much different from that of our founding in 1889, and can often be overwhelming. The business world is more complex than ever. Technology brings new possibilities almost every day, and with these possibilities come new challenges. Clearly, consumers and businesses need more than just products and services from their financial institution. They need advice that works. Trustmark has responded by providing solutions that make life easier for customers, both business and personal. In recent years, Trustmark has introduced impressive timesaving services like the Deposit Express ATM and a full range of online banking options that provide customers the convenience of safe and secure banking when and where it suits them best. We are helping businesses better manage their bottom line through cash management and risk management solutions that are tailored for their unique needs. Most importantly, we provide solutions in the form of sound, solid advice that we offer customers every day. It all begins with trust Many things have changed in the world, and indeed, in the financial services industry, but one thing has not changed — Trustmark remains a company built on trust, guided by values that lie at the heart of every action. Trustmark’s core values — integrity, service, accountability, relationships and solutions — have directed Trustmark since its inception and continue to define who we are and what we stand for, both as a company and as individuals. These values have provided direction and perspective. Above all, they have helped us achieve our goal of building and maintaining the trust of our associates, customers, shareholders and the many communities we serve. 13 A community success story: Sal & Mookie’s When Jeff Good and Dan Blumenthal a financing solution for Sal & Mookie’s, opened Sal & Mookie’s New York their third restaurant. Trustmark Pizza & Ice Cream Joint, they brought provided an SBA 7(a) guaranteed loan, more to their community than just helping the restaurateurs obtain more an exciting new restaurant. They also favorable financing terms. helped bring new economic life to their Today, Sal & Mookie’s employs neighborhood and city. approximately 75 people and was Rather than locate in a thriving retail named Best New Restaurant by center, the pair chose to open their Mississippi Magazine. Also, Good and restaurant in the Fondren Historic Blumenthal were recently named Small District of Jackson, Mississippi, Business Persons of the Year by the a distressed area on the border Mississippi District Office of the U.S. of a growing shopping, arts and Small Business Administration. entertainment district. Good explained, After seeing the success of Sal & “We thought it would be a gift to the city Mookie’s, other restaurant owners to invest in the area.” followed suit and located nearby, Good and Blumenthal, owners of generating even more jobs and further the restaurant group Mangia Bene, strengthening the local economy. had been Trustmark customers for By providing lending solutions years. Because of their satisfaction to entrepreneurs like Good and with previous experiences, they again Blumenthal, Trustmark is helping build turned to Trustmark when they needed stronger, more vibrant communities. Jeff Good and Dan Blumenthal, co-owners of Sal & Mookie’s New York Pizza & Ice Cream Joint 14 Trustmark Corporation Directors Adolphus B. Baker Chairman, President and Chief Executive Officer Cal-Maine Foods, Inc. Toni D. Cooley President Systems Electro Coating Daniel A. Grafton Chairman Trustmark Corporation Chairman Trustmark National Bank President L-3 Communications Vertex Aerospace (Retired) Trustmark Corporation Officers Daniel A. Grafton Chairman Gerard R. Host President and Chief Executive Officer Annual Meeting of Shareholders Gerard R. Host President and Chief Executive Officer Trustmark Corporation President and Chief Executive Officer Trustmark National Bank David H. Hoster II President, Chief Executive Officer and Director EastGroup Properties, Inc. LeRoy G. Walker, Jr. President LTM Enterprises, Inc. DBA McDonald’s Restaurant William G. Yates III President and Chief Executive Officer W.G. Yates & Sons Construction Company John M. McCullouch Associate Dean Metro Jackson University of Mississippi School of Law Richard H. Puckett Chairman and Chief Executive Officer Puckett Machinery Company R. Michael Summerford President and Chief Operating Officer ChemFirst, Inc. (Former) T. Harris Collier III Secretary Melanie A. Morgan Assistant Secretary Louis E. Greer Treasurer and Principal Financial Officer Trustmark Corporation’s Annual Meeting of Shareholders will be held on Tuesday, April 28, 2015, at 2:00 p.m. in the Trustmark Conference Center at the Mississippi Sports Hall of Fame, 1152 Lakeland Drive, Jackson, Mississippi. Trustmark Corporation 248 East Capitol Street | Jackson, MS 39201 | www.trustmark.com 15 Corporate Information Trustmark Corporation Annual Report 2014 Common Stock Trustmark common stock is listed on the NASDAQ Global Select Market and is traded under the symbol TRMK. Shareholder Services Trustmark’s shareholder services are provided by American Stock Transfer & Trust Company, LLC (AST). AST will assist with: Dividend Reinvestment and Stock Purchase and Sale Trustmark is pleased to offer the Investors Choice Dividend Reinvestment & Direct Stock Purchase and Sale Plan (Plan), a voluntary plan administered by AST. Under the Plan, shareholders may reinvest dividends, purchase additional shares, sell all or part of shares owned or deposit their Trustmark stock certificates for safekeeping or sale. For more information, call (877) 476-4393 or visit AST’s website at www.amstock.com. Registration status Dividend payments Change of address Lost certificates Transfer of ownership Other inquiries or requests Shareholder Requests and Account Access Shareholders may contact AST through one of the following methods: Online: Registered shareholders can view their account information through AST’s website, www.amstock.com, by clicking on Shareholder Account Access. This website provides instructions on how to gain access to shareholder account information, perform certain transactions, request forms or participate in the Investors Choice Dividend Reinvestment & Direct Stock Purchase and Sale Plan. Shareholders may also e-mail our transfer agent at info@amstock.com. Telephone: Shareholders may call our toll-free number (877) 476-4393 for assistance. Written Correspondence: Shareholders should mail written account inquiries or other requests for assistance regarding stock ownership to: Trustmark Corporation c/o American Stock Transfer & Trust Co., LLC Operations Center 6201 15th Avenue Brooklyn, NY 11219 Financial Publications Available at No Charge Additional copies of Trustmark’s Annual Report on Form 10-K, quarterly reports and other corporate publications are available, without charge, at www.trustmark.com or upon request by calling our Investor Relations Department at (601) 208-6898 or by writing to: Trustmark Corporation Attn: Investor Relations 248 East Capitol Street Jackson, MS 39201 Investor Inquiries Analyst and investor inquiries may be directed to: F. Joseph Rein, Jr. Senior Vice President (601) 208-6898 jrein@trustmark.com Louis E. Greer Treasurer and Principal Financial Officer (601) 208-2310 lgreer@trustmark.com Media Inquiries Media representatives seeking general information should contact: Melanie A. Morgan Senior Vice President (601) 208-2979 mmorgan@trustmark.com 16 Trustmark National Bank Directors Adolphus B. Baker Chairman, President and Chief Executive Officer Cal-Maine Foods, Inc. William A. Brown President and Chief Executive Officer Brown Bottling Group, Inc. James N. Compton General Manager and Chief Executive Officer South Mississippi Electric Power Association Tracy T. Conerly Partner Emeritus Carr, Riggs & Ingram, LLC Toni D. Cooley President Systems Electro Coating Trustmark National Bank Board Officers Harry M. Walker President Mississippi Business and Community Relations Trustmark National Bank LeRoy G. Walker, Jr. President LTM Enterprises, Inc. DBA McDonald’s Restaurant William G. Yates III President and Chief Executive Officer W.G. Yates & Sons Construction Company Daniel A. Grafton Chairman Trustmark Corporation Chairman Trustmark National Bank President L-3 Communications Vertex Aerospace (Retired) J. Clay Hays, Jr., MD President Jackson Heart Clinic, PA Gerard R. Host President and Chief Executive Officer Trustmark Corporation President and Chief Executive Officer Trustmark National Bank David H. Hoster II President, Chief Executive Officer and Director EastGroup Properties, Inc. John M. McCullouch Associate Dean Metro Jackson University of Mississippi School of Law Harris V. Morrissette President China Doll Rice & Beans, Inc. Dixie Lily Foods Richard H. Puckett Chairman and Chief Executive Officer Puckett Machinery Company R. Michael Summerford President and Chief Operating Officer ChemFirst, Inc. (Former) Daniel A. Grafton Chairman Gerard R. Host President and Chief Executive Officer T. Harris Collier III Senior Vice President, General Counsel and Secretary Melanie A. Morgan Senior Vice President and Assistant Secretary Trustmark National Bank Executive Management Gerard R. Host President and Chief Executive Officer Duane A. Dewey President Corporate Banking Louis E. Greer Executive Vice President and Chief Financial Officer George C. Gunn Executive Vice President and Real Estate Banking Manager Robert B. Harvey Executive Vice President and Chief Credit Officer Glynn Ingram Executive Vice President and Chief Information Officer James M. Outlaw, Jr. Executive Vice President and Chief Administrative Officer Thomas C. Owens Executive Vice President and Bank Treasurer Douglas H. Ralston President Wealth Management W. Arthur Stevens President Retail Banking Breck W. Tyler President Mortgage Services Chester A. Wood, Jr. Executive Vice President and Chief Risk Officer C. Scott Woods President Insurance Services 17 Trustmark National Bank Regional and Market Executives Regional Market Trustmark Corporation Annual Report 2014 John B. Barnett III Brewton Kevin S. Carey Mobile Paul J. England Monroeville David E. Sutley Baldwin County John C. Kirby Montevallo William V. Lewis Greenville Charles E. Singleton Demopolis James A. Stewart Selma James B. Hurst Opelika Charles R. Schaeffer Eufaula R. Wade Seamon Prattville John G. Hindsman Bay County Jonathan E. Ochs Okaloosa and Walton Counties William C. Callaway, Jr. Greenville Michael E. Crandall Canton Joe B. Madden Hazlehurst Eric C. Brown MS Gulf Coast Danny M. Trusty Tylertown Victor L. Marlar Corinth Thomas Kendall Vicksburg J. Gregory Bennett Laurel Darrell W. Temple Taylorsville David G. Anderson Meridian Bart C. Wise Columbus John David Douglas Fayette County Jason A. Douglas McComb James A. Smith Magee Charles H. Lewis IV Hattiesburg Stanley L. Foster Brookhaven Clifton Thach Greenwood Charles T. Magee Columbia H. Frank Rhea Carthage Charles R. Russell Tupelo Alabama Michael D. Fitzhugh Regional President South Alabama Edward T. Livingston Regional President West Central Alabama Linwood McClain Regional President East Central Alabama Florida John D. Sumrall Regional President Florida Mississippi Jerry M. Hall Regional President West Mississippi W. Holt McMullan Regional President South Mississippi John S. Stringer Regional President Northeast Mississippi Tennessee Aubrey E. Henson, Jr. Regional President Memphis Region Texas William S. Bridges Regional President Houston 18 Trustmark National Bank Community Bank Advisory Directors Alabama Brewton John B. Barnett III President Trustmark National Bank Broox G. Garrett Attorney Thompson, Garrett & Hines Mark Manning Administrator West Gate Village Nursing Home Cosby Martin Owner Marco Land & Petroleum Thomas E. McMillan, Jr. Managing Member Longleaf Energy McGowin Miller President Miller Relocation Services Steve Nelson Retired Banker Phillip L. Parker Director of Pharmacy D. W. McMillan Memorial Hospital Stephanie Walker Pre-school Director St. Stephen’s Episcopal Church Centreville John Downs Business Office Manager Alabama Power Company Debbie Martin Funeral Director/Office Administrator Rocko Funeral Home J. W. Oakley Recruiting Coordinator School of Communications University of Alabama Demopolis Gary B. Butler President Butler & Company, Inc. Johnnie Anderson Shows II Owner Jaber, Inc. Charles E. Singleton President Trustmark National Bank Mem Stewart Webb Owner Webb Realty, Inc. Thomas Alvin Williams Partner Morgan’s Ice Dan E. Wilson Owner Colony Office Products Eufaula Robert M. Dixon, Jr. CEO M C Dixon Lumber Company, Inc. Mo Erkins Retired Military Steve Edmonds President Windwood Management Group Mary Foy Kirkland President Young Johnston and Associates, Inc. Mike Hobson Attorney Hobson Law Firm Bobby Leach Business Manager Cahaba Companies Charles R. Schaeffer President Trustmark National Bank Joel Smith, Jr. Attorney Williams, Potthoff, Williams & Smith Robert L. Taylor Owner Bobby Taylor Enterprises Deltonya Warren Director of Curriculum Eufaula City Schools Doug Winkleblack Southern Regional Manager Alabama Interforest Corp Greenville Barry E. Boan President Boan Contracting Ken Chesser Owner KC Land & Cattle Company P. Richard Hartley Partner Hartley & Hickman Attorney At Law William V. Lewis President Trustmark National Bank Dexter McLendon Mayor City of Greenville Allin Whittle Butler County Commissioner Retired/Assistant Superintendent Butler County Board of Education Warren J. Williamson Retired/Attorney Williamson & Williamson Attorney At Law Mobile Sumner G. Adams Vice President Cash Management/Finance Norton Lilly International Frank McKinley Bell III President Marine Rigging, Inc. Kevin S. Carey President Trustmark National Bank David C. DeLaney President First Small Business Investment Co. of Alabama Clifton C. Inge, Jr. CEO IPC Industries, Inc. Frank J. Lott III President Heritage Homes Harris V. Morrissette President China Doll Rice & Beans, Inc. Dixie Lily Foods Alfred M. Newmann, Jr., MD Premier Medical ENT West Henry F. O’Connor III Attorney Jones Walker E. Luckett Robinson II Vice President Finance Overseas Hardwood Corp (OHC) Monroeville Pete Black Alabama Business Development Mgr. Parsons & Whittemore Haniel Croft Retired – President BankTrust Paul J. England President Trustmark National Bank John E. Estes, Jr. Vice President J E Estes Wood Company, Inc. Sloan Fountain Retired – Vice President/Mgr. Vanity Fair Mills, Inc. 19 Trustmark Corporation Annual Report 2014 Florida Angus G. Andrews Real Estate Investor/Developer Tracy T. Conerly Partner Emeritus Carr, Riggs & Ingram, LLC Gerald R. Dunkle President Sundial Developers, Inc. Robert C. McLendon Commercial Insurance Fisher Brown Bottrell Insurance, Inc. James R. Moody IV Accountant Jinks & Moody, P.A. Floyd Skinner President Skinner Tax Consulting, Inc. David Spencer President Glass Center, Inc. John D. Sumrall Regional President Florida Trustmark National Bank Jay N. Trumbull Owner Culligan Water Services, Inc. Dennis A. Wallace Member Walton County School Board (Retired) Ed Lee, DMD Dentist John T. Lee Retired – Auto Dealer Lee Motor Company Alex Roberts Retired – Photographer Alex Roberts Photography Sandy Smith Director Monroeville Area Chamber of Commerce Dr. Reginald L. Sykes President Alabama Southern Community College Montevallo Philip C. Hubbard Veterinarian Countryside Animal Hospital Karen Kelly Director of Compensation and Benefits US Pipe and Foundry John C. Kirby President Trustmark National Bank Leroy Lucas, Jr. Owner Lelco, Inc. John W. Stewart III President University of Montevallo Thomas Walker Executive Director American Village Montgomery Jim W. Benefield, DVM Veterinarian Carmichael Road Animal Clinic Thomas H. Cawthon, MD Otolaryngologist-Head and Neck Surgeon Montgomery Otolaryngology Loui P. Cone III President The Cone Company, Inc. John Chisolm Retired Trustmark National Bank John E. Hall, Jr. Owner/Broker John Hall and Company/Real Estate Denson Henry Vice President Henry Brick Co. Phyllis Ingram Partner/Shareholder Carr, Riggs & Ingram, LLC Leonard N. Math Partner/Shareholder Chambless, Math & Carr, PC Attorneys at Law William E. Wallace CEO Goodwyn, Mills and Cawood Prattville John Boutwell Owner Boutwell Farms J. N. Buckner Partner Buckner and Cook, LLC Keith Gamble Owner FirstGuard, LLC Larry Liveoak Owner The Liveoak Agency, Inc. David McDowell Partner McDowell, Faulk and McDowell, LLC R. Wade Seamon President Trustmark National Bank Richard Williams Owner/Partner Williams Hotels Selma Tommy Atchison Attorney Pitts, Pitts and Williams S. Kirk Johnson Owner Oxford Manufacturing James A. Stewart President Trustmark National Bank William P. Swift III Owner Swift Drug Co. Abigail Tucker, DMD Owner/Dentist Tucker Family Dentistry Ira M. Wagoner Accountant Edwards and Wilkinson, PC Tallassee Ben Atkinson Owner Ben Atkinson Motors, Inc. Cecil Mack Daugherty Chief of Security Russell Lands Gary Fuller Owner Fuller Warehouse & Gin, Inc. Charles Frank Keith Owner Johnson Furniture David Lawrence Vice President / Owner Tallassee Super Foods, Inc. Hollis Mann Store Manager Tallassee Super Foods, Inc. Jennie Rhinehart CEO Community Hospital, Inc. 20 Trustmark National Bank Community Bank Advisory Directors Mississippi Brookhaven Robert O. Allen Partner Allen, Allen, Breeland & Allen Attorneys Cecil Estess Corporate Officer Dickerson & Bowen Robin Tyler Faust, CFSP Funeral Director Tyler Funeral Home, Inc. Stanley L. Foster President Trustmark National Bank Kenneth W. Goza Program Manager Mississippi Economic Council Arlustra Henderson, Jr. Chief of Police City of Brookhaven (Retired) J. Spencer Mooney, MD Physician/Owner Quail Ridge Enterprise, Inc. J. Kim Sessums, MD Physician Brookhaven OB-GYN Associates Charlie Lee Smith Chief Executive Officer Southern Diversified Technologies, Inc. A. Lavelle Sullivan Co-Owner Sullivan Ford-Lincoln Canton Michael E. Crandall President Trustmark National Bank I. Hugh Edwards Owner Margaret’s Estate Silver Carthage Carl Blocker Sales Greco Electrical Contractor Lee Carson President N.L. Carson Construction, Inc. H. Frank Rhea President Trustmark National Bank Susan Triplett Administrator Northeast Region Sta-Home Health Jason Wilcox President/Owner Wilcox Funeral Home Steve Wilkerson Owner Steve’s on the Square Columbus Mark Alexander Chairman Dynahealth, Inc. William Key Blair, Jr. Vice President Columbus Marble Works Delynn W. Burkhalter President Burkhalter Rigging, Inc. W. R. Phillips IV Vice President Phillips Contracting Company, Inc. Bart C. Wise President Trustmark National Bank Corinth Victor L. Marlar President Trustmark National Bank William J. Napier III Vice President Corinth Mill Supply Ricky R. Stockton Hotel Manager S.S.S.S. & P., Inc. Kenneth W. Williams President Corinth Coca-Cola Bottling Works Refreshments, Inc. Greenville William C. Callaway, Jr. President Trustmark National Bank Paul D. Dees Partner Greenland Planting Company Gregg Alan Gober, MD Surgeon Mid South Sports Medicine & Orthopedics Stephen R. Jernigan Owner River City Rehabilitation Harley Metcalfe III Retired - Investor Greenwood H. Don Brock, Jr. Partner Whittington Brock & Swayze Alexander John Malouf III Co-Owner The John Richard Collection, Inc. Clyde V. Manning Business Consultant R. A. Norris President S&N Airflow, Inc. Clifton Thach President Trustmark National Bank Robert L. Upchurch President Upchurch Plumbing, Inc. Hattiesburg Thomas M. Duff Managing Partner Southern Tire Mart, LLC John M. Fitzpatrick III, MD President and Physician Hattiesburg Clinic William H. Gullung III, MD Dermatologist Hattiesburg Clinic, PA Linda Kuykendall Vice President Commercial Business Interiors, Inc. Charles H. Lewis IV President Trustmark National Bank W. A. Payne III President Camellia Home Health Robert O. Tatum, Jr. Principal/Owner CR Properties, LLC Robert R. Vardaman Owner and President Vardaman Buick-Honda, Inc. Hazlehurst Olen C. Bryant, Jr. Attorney Bryant & Rutland, PLLC Joe B. Madden President Trustmark National Bank Fred J. McDonnell, MD Physician Copiah Medical Associates John C. Pyron Co-Owner Copiah Forest Products, Inc. Copiah Lumber Company, Inc. A. Wendell Stringer President Stringer Family Funeral Services Laurel J. Gregory Bennett President Trustmark National Bank Louis S. Crumbley President Crumbley Paper & Food Service Co., Inc. Linda R. Gavin Associate Executive Director of Marketing South Central Regional Medical Center 21 Jerome Harless President Flarestack, Inc. Victor Jones, Jr. President Jones Sales and Service, Inc. Rhes V. Low, Sr. Investor Low Company, LLC Richard L. Yoder, Jr. Attorney Gilchrist Sumrall Yoder & Boone, PLLC Magee Jacqueline P. Gordy Secretary-Treasurer Pace Oil Company Charles Pruitt III, MD Physician Magee Medical and Surgical Clinic, PLLC James A. Smith President Trustmark National Bank James H. Stuard, DMD James Stuard Family Dentistry McComb Pat H. Brumfield, Jr. President Brumfield Oil Company, Inc. Brad Clark Vice President Clark Construction Co., Inc. of Mississippi David B. Craddock President Craddock Oil Company Jason A. Douglas President Trustmark National Bank John Dale Dumas, DMD John Dale Dumas PA Michael Faust CPA Faust & Associates Craig Haskins Vice President Commercial Developers, Inc. Eric S. Lewis, MD Surgeon SW MS Oral and Maxillofacial Surgery, Inc. Meridian David G. Anderson President Trustmark National Bank Jay L. Davidson President and Director Southern Pipe & Supply, Inc. Mark L. Denney Owner Meridian Order Buyers, Inc. (Former) Tommy E. Dulaney President and Chief Executive Officer Structural Steel Services, Inc. Billy W. Estes President Trustmark National Bank (Retired) Larkin Kennedy Executive Vice President/Administrator Rush Foundation Hospital John M. Mitchell, Jr. Owner Mitchell Distributing Company, M-Prints and Mitchell Signs C. D. Smith, Jr. Regional Manager AT&T Mississippi Tupelo V. M. Cleveland President Tupelo Furniture Market Johnny L. Crane II President F. L. Crane & Sons, Inc. Carlyle S. Harris, Jr. General Partner Harris Holdings LP D. Colin Maloney President Century Construction and Realty, Inc. Adam Mitchell Vice President Mitchell Distributing Company Trustmark Corporation Annual Report 2014 Elizabeth J. Randall President Randall Commercial Group, LLC W. Briggs Hopson III Partner Teller, Hassell & Hopson, LLP Donald Jarratt Managing Partner Jarratt Properties, LLC Thomas Kendall President Trustmark National Bank Larry L. Lambiotte, Sr. President and Chief Executive Officer PolyVulc USA, Inc. Vice President Falco Chemical, Inc. Managing Member Power Transport Service, LLC Tennessee Charles E. Dacus, Jr. Farmer Dacus Farms John David Douglas President Trustmark National Bank Paul S. Harris General Manager Chickasaw Electric (Retired) Aubrey E. Henson, Jr. Regional President Memphis Region Trustmark National Bank John S. Wilder, Jr. Treasurer and General Manager Long Town Gin & Supply Charles R. Russell President Trustmark National Bank David S. Talton, MD President Cardiothoracic Surgery Clinic of North Mississippi Tylertown Timothy O. Jones Assistant District Attorney Office of the D.A., 14th Circuit Court District Steven L. Kennedy Owner Tylertown Sports Center Rob Loper, DVM Veterinarian Tylertown Animal Hospital I. Conrad Mord II Attorney Mord Law Firm J. Keith Speed, DO Doctor of Osteopathy William Carey University Danny M. Trusty President Trustmark National Bank Vicksburg Ronald L. Andrews, Sr. President Vicksburg Insurance Agency, Inc. Robert R. Bailess Partner Wheeless, Shappley, Bailess & Rector, Attorneys John Fredric Farrell President Falco Chemical, Inc. Vice President and Treasurer PolyVulc USA, Inc. Member Power Transport Service, LLC Jimmy G. Gouras President Jimmy G. Gouras Urban Planning Consultant, Inc. (Retired) 22 Trustmark Corporation Annual Report 2014 2014 2013 $ 123,562 $ 117,060 $ 1. 83 1.83 0. 92 21.04 15.13 $ 1. 75 1.75 0. 92 20.11 13.95 12.97 % 8.83 1.03 11. 59 % 8.62 9.63 13.47 14.56 13. 09 % 8.75 1.02 11. 49 % 8.26 9. 06 12.97 14. 18 $ 3,545,252 7,131,074 12,250,633 9,698,358 981,665 1,419,940 $ 3,362,882 6,752,256 11,790,383 9,859,902 438,190 1,354,953 Trustmark Corporation 2014 Financial Highlights ($ in thousands except per share data) Net Income Per Share Data Basic earnings per share Diluted earnings per share Dividends Book value Tangible book value Performance Ratios Return on average tangible equity Return on average equity Return on average assets Capital Ratios Total equity/total assets Tangible equity/tangible assets Tier 1 leverage ratio Tier 1 risk-based capital ratio Total risk-based capital ratio Year-end Balance Sheet Data Securities Loans Total assets Total deposits Total borrowings Total shareholders’ equity 23 

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