Trustmark
Annual Report 2016

Plain-text annual report

2016 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 Board Leadership Directors Corporate Information Executive Management Regional and Market Executives Community Market Advisory Directors Financial Highlights 10 2 9 12 14 15 16 21 TO OUR SHAREHOLDERS Trustmark made significant achievements in 2016 as we continued to provide the service and solutions our customers expect while positioning Trustmark for continued success in the evolving financial services industry. We achieved our third consecutive year of substantial loan growth, expanding the held for investment loan portfolio by $759.8 million, or 10.7%. Our acquired loan portfolio continued to exceed expectations and made meaningful contributions to our earnings. Credit quality – a defining characteristic of the Trustmark franchise – remained solid with substantial reductions in nonperforming assets. Our Insurance business had another record year in terms of revenue, while Mortgage Banking continued to expand in new markets and experienced growth in loan production volume of 8.4% during the year. Our focus on providing financial solutions with integrity and accountability has garnered numerous customer satisfaction awards, including recognition from the J.D. Power 2016 U.S. Retail Banking Satisfaction Study, in which Trustmark was recognized as having the “Highest Customer Satisfaction with Retail Banking in the South Central Region.”* All of this was achieved in light of the complexities our industry continues to face – changes in customer preferences, evolving protracted low interest rates. frameworks regulatory and Rather than focus upon what is beyond our control, we choose to diligently take action in areas within our control. We continued to realign our delivery channels, cognizant of the fact that banking has evolved into something customers do, not necessarily some place they will go. We have adapted to this changing environment by repositioning product offerings, reducing the square footage of our new banking centers and investing in technology that enables customers to conduct business anywhere, when and how they choose. What has not changed, however, is the need for trustworthy service and solutions. To that end, banking continues to remain a people business. We would like to take this opportunity to review our notable accomplishments, share our direction for the future and highlight a few of the ways Trustmark is well positioned for success in the years to come. Financial Highlights Trustmark’s net income in 2016 totaled $108.4 million, which represented diluted earnings per share of $1.60. This performance produced a return on average tangible equity of 9.99% and a return on average assets of 0.84%. Trustmark paid quarterly cash dividends of $0.23 per share, or $0.92 annually, in 2016. During the year, over half of Trustmark’s net income was returned to shareholders through dividends, which have grown – and never decreased – throughout Trustmark’s 127-year history. This consistent, reliable source of shareholder income reflects the steady earnings and profitability of services businesses. our diversified financial The success of our continuing investments in expanding the number of commercial relationship managers and realigning to areas with lending additional growth opportunities is reflected in our held for investment loan portfolio, which at year end 2016 totaled $7.9 billion, up $759.8 million, or 10.7%, for the year. Growth was diversified by loan type as well as by geographic market, both of which reflect the continued effort of providing customers with the solutions they need, when they need them. resources * Trustmark National Bank received the highest numerical score among 15 retail banks in the South Central region in the J.D. Power 2016 Retail Banking Satisfaction Study, based on 76,233 total responses, measuring opinions of consumers with their primary banking provider, surveyed April 2015-February 2016. Your experiences may vary. Visit jdpower.com. 2 Our customer-focused, values-driven culture has enabled us to maintain share in markets we traditionally served, while also expanding in markets with additional growth opportunities. Collectively, held for investment and acquired loans totaled $8.1 billion at December 31, 2016, an increase of 8.6% from the prior year. Although not fully apparent in this protracted low interest rate environment, our diversified and low- cost deposit base remains a source of strength for the Trustmark franchise. At year end 2016, deposits totaled $10.1 billion, an increase of $467.8 million, or 4.9%, from the prior year. Approximately 60% of deposits are in transaction accounts, including 30% in noninterest-bearing accounts. Experience and attention to customer relationships have afforded Trustmark a position of in the majority of the communities served. We are privileged to maintain the #1 deposit market share in the Jackson, MS metropolitan area and, across the franchise, a top-three deposit share in 57% and a top-four deposit share in 70% of markets served. leadership Credit Quality Disciplined underwriting, competitive pricing and prudent credit management continue to be hallmarks of Trustmark. Levels of nonperforming assets improved significantly throughout the year as nonperforming loans declined 11.0%, while other real estate declined 19.6%. At December 31, 2016, Trustmark’s $71.3 million allowance for loan losses represented 267.4% specifically of nonperforming reviewed impaired loans. These credit metrics exclude acquired loans and other real estate covered by an FDIC loss-share agreement. loans, excluding Risk Management and Capital Strength Trustmark is committed to a comprehensive, enterprise-wide risk management approach to not only ensure regulatory compliance, but also 3 to manage the Corporation and its businesses more effectively. We have committed significant resources to the enhancement of our infrastructure and remain well positioned to support the regulatory requirements commensurate of a larger financial institution. In achieving our plans for continued growth, risk management is integral to both the strategic planning process as well as the process for new product and service introductions. Our Board remains actively engaged in reviewing our risk management efforts, ensuring that liquidity, funding and capital levels are reflective of a strong financial institution. At December 31, 2016, total shareholders’ equity was $1.5 billion, while tangible equity totaled $1.1 billion, which represented 8.74% of tangible assets. Trustmark’s regulatory capital ratios continue to significantly exceed levels to be classified as well capitalized. We continue to review opportunities to deploy capital in a manner that enhances long-term shareholder value, including investments that support organic or acquisitive growth, as well as delivering consistent dividends and utilizing share repurchase programs as appropriate. Revenue Generation low Despite the protracted interest rate environment, our businesses continued to perform well as Trustmark’s total revenue, excluding interest income on acquired loans, increased $17.6 million from the prior year to total $531.3 million in 2016. Fundamentally, our banking business proved to be resilient, growing net interest income (FTE) excluding acquired loans by $18.7 million, or 5.2%, and resulted in a net interest margin, excluding acquired loans, of 3.37%. Our diverse, complementary fee income businesses continued to achieve solid results and contributed significantly to our financial success, representing approximately 18% of total revenue excluding acquired loans in 2016. Trustmark’s Insurance business – which provides a full range of commercial and personal risk management products – had another record year and produced revenue of $36.8 million. This performance reflects our steadfast focus on business development as well as continuing investments in relationship managers and geographic market expansion. Our 4 Investing for the Future is to Trustmark continuous committed improvement and has a clear and deliberate process for investing in businesses, increasing revenue where possible and reallocating resources where revenue growth is challenged or returns are unacceptable. We are excited about and attentive to evolving technology which provides opportunities to expand product offerings and delivery channels that enhance the customer experience while reducing servicing costs. As you may recall, we upgraded our ATM fleet several years ago to enhance same-day deposit credit capabilities and strengthen our competitive advantage. Customers embraced the technology, insurance subsidiary, Fisher Brown Bottrell Insurance, Inc., was recognized as a 2016 Best Practices Agency by Independent Insurance Agents and Brokers of America. Mortgage Banking posted another year of solid results, partially reflecting expansion into new markets. In 2016, revenue totaled $28.2 million while loan production volume increased 8.4% to total $1.6 billion. Our Wealth Management business – which provides comprehensive and integrated services to accumulate, preserve and transfer wealth – was impacted by volatile market conditions, which pressured both asset values and brokerage activity throughout the year. In 2016, revenue totaled $30.5 million while assets under management and administration totaled $11.9 billion. 5 and deposits made via ATMs increased significantly. Since the release of myTrustmark℠, our consumer digital banking service, adoption of online banking has notably increased with approximately two- thirds of customers accessing myTrustmark℠ via mobile devices. Through Trustmark’s mobile banking platform, customers are able to monitor accounts, pay bills, transfer funds, deposit checks and track spending habits across multiple accounts, including those of other financial institutions. In 2017, we will introduce myTrustmark℠ for business, a robust digital banking service for commercial customers. We remain excited about the opportunities this platform, in addition to others, may present for our franchise. Also, we are piloting myTeller℠, an interactive video teller service provided through a centralized teller center which delivers most functions provided by traditional tellers. The potential applications for this technology include deployment beyond the traditional branch network and expanded service hours, further enhancing customer convenience and improving operational efficiency. We continued to realign our retail delivery channels as consumer preferences have changed, ensuring minimal disruption to established relationships and striving to provide a consistent Trustmark experience, regardless of the delivery channel. During 2016, Trustmark consolidated nine branch offices across Alabama, Mississippi and Florida and reallocated a portion of those resources into a new banking center 6 in Tuscaloosa, Alabama, and a new loan production office in Pensacola, Florida. Over the last four years, we have consolidated 36 branch offices with limited growth potential and established 9 banking centers in attractive growth markets. or 1.4%, on a comparable basis from the prior year. Trustmark is committed to investments that promote profitable revenue growth as well as reengineering and efficiency opportunities that enhance long-term shareholder value. In addition to expanding product lines and delivery channels, Trustmark announced plans to expand in the Huntsville, Alabama MSA, one of the most attractive metropolitan areas in the Southeast. During the fourth quarter, Trustmark announced the signing of a definitive agreement to acquire RB Bancorporation and its subsidiary, Reliance Bank, in Athens, Alabama. With assets of $217 million, Reliance Bank has seven offices serving the Huntsville MSA. This transaction, which has received regulatory approval and remains subject to the approval of RB Bancorporation shareholders and customary closing conditions, is expected to be completed in the second quarter of 2017. Our affiliation with Reliance Bank represents a natural avenue for the expansion of our Alabama franchise. At Trustmark, expense management is not a one- time program, but rather part of a long-standing culture that has led to solid profitability levels year after year. During the second quarter, we offered a voluntary early retirement program that was accepted by 188 associates, or 6.4% of our workforce. The cost of this program totaled $9.8 million in 2016, which was offset in part by expense savings of $4.4 million in the second half of the year. We expect to generate savings of approximately $8.5 million as a result of this program in 2017. This voluntary early retirement program provides organizational efficiencies resulting from investments in technology and realignment of work processes, as well as advancement opportunities for associates. Noninterest expense totaled $407.3 million in 2016. Excluding the cost of the aforementioned early retirement program, as well as expense related to reducing the risk profile of the assets in the Corporation’s defined benefit pension plan prior to termination, noninterest expense totaled $396.2 million, a decrease of $5.4 million, Leadership We are most appreciative of the leadership, counsel and guidance provided by the Board of Directors of Trustmark. Our directors are engaged in the governance of the organization, embrace the Corporation’s strategic direction and support our efforts to realize the full potential of the franchise. During the year, David H. Hoster II retired from the Trustmark Corporation Board of Directors after nine years of dedicated service. We have greatly appreciated David’s contributions to Trustmark and will miss his advice and counsel. Community Reinvestment Trustmark is dedicated to investing in the future of building stronger communities in its marketplace, and we realize the significance of practicing good corporate citizenship and the added value it brings to all stakeholders involved. Strengthening the communities we serve is instrumental to our approach of responsible growth. Through the means of community partnerships, lending and investing, Trustmark is working to advance long-term sustainability. We are actively engaged in corporate social responsibility initiatives, and in 2016, we contributed over $3 million in financial resources and thousands of volunteer hours from associates to community organizations across our footprint. We continued our focus on financial literacy education through the implementation of the Trustmark Financial Scholars Program in 125 high schools throughout Mississippi, as well as provided financial resources to 32 schools included in our Adopt-A-School program throughout our markets. Through Trustmark’s A Gift of Time campaign, 7 our associates volunteered more than 4,100 hours at one of 40 participating community organizations, assisting these non-profits in accomplishing their missions as well as inspiring our associates to find additional ways to support our communities. In addition to community engagement through monetary gifts and volunteer service, Trustmark made significant contributions through its lending efforts in 2016. Trustmark originated nearly $94 million in home mortgages and more than $127 million in small business loans within low-to-moderate income areas, as well as approximately $115 million in home mortgages to low- to-moderate income borrowers and over $79 million in community development loans. These collective efforts, in collaboration with local community leaders, have provided opportunities for affordable housing, employment and community services. Strategic Focus We look to the future with confidence and optimism. In 2017, we will continue efforts to broaden customer relationships, enhance the delivery of our products and services, streamline processes to drive greater efficiency, manage risks effectively and proactively manage our balance sheet to produce consistently strong profitability. We appreciate the dedication and commitment of our associates, our shareholders who have invested in Trustmark and its future, and our customers who look to us as their financial partner. Trustmark is “People you trust. Advice that works.” Sincerely, Daniel A. Grafton Chairman Trustmark Corporation Gerard R. Host President and Chief Executive Officer Trustmark Corporation 8 BOARD LEADERSHIP R. Michael Summerford was elected to succeed Daniel A. Grafton as Chairman of the Board of Trustmark Corporation effective January 1, 2017. Mr. Grafton plans to retire from Trustmark’s Board of Directors at the 2017 Annual Shareholders’ meeting after eleven years of service, including six years as Chairman. Regarding his tenure on the Board, Grafton commented, “My time with Trustmark has been both professionally satisfying and stimulating. The Board and management are highly engaged and among the best in the business, which gives me great confidence in the future success of Trustmark. By electing Mike Summerford as Chairman, Trustmark has selected the right person for the right time. I have served with Mike for the last ten years and found him to be an extremely bright, hardworking professional with excellent leadership acumen. The Host/Summerford team ensures continuity of leadership that benefits our communities, associates, customers and shareholders.” “Under Dan’s guidance and leadership as Chairman,” said Gerard R. Host, President and Chief Executive Officer, “Trustmark has experienced significant growth and expanded into new markets, well positioning us for continued success. We greatly appreciate Dan’s many contributions to our organization.” “We are fortunate to have Mike serve in this leadership position on our Board,” continued Host. “He is well known and respected in the community and has a firm commitment to upholding the interests of Trustmark and our shareholders. Mike will do an exemplary job in guiding our Board as we continue to build our diverse financial services business.” Michael Summerford commented, “Trustmark is well positioned for continued success, thanks in part to Dan Grafton’s solid leadership and wise counsel. I look forward to the opportunity to serve as Chairman of Trustmark and continuing to work with our Board and management to lead a strong regional banking organization committed to providing value for its customers, shareholders, communities and associates.” Gerard R. Host Daniel A. Grafton R. Michael Summerford 9 DIRECTORS Adolphus B. Baker (1) (2) Chairman, President and Chief Executive Officer Cal-Maine Foods, Inc. Toni D. Cooley (1) (2) Chief Executive Officer Systems Electro Coating William A. Brown (2) President and Chief Executive Officer Brown Bottling Group, Inc. James N. Compton (2) President and Chief Executive Officer Cooperative Energy Tracy T. Conerly (1) (2) Partner Emeritus Carr, Riggs & Ingram, LLC 10 Daniel A. Grafton (1) (2) Chairman Trustmark Corporation and Trustmark National Bank (Through 12-31-16) President L-3 Communications Vertex Aerospace (Retired) J. Clay Hays, Jr., M.D. (2) Cardiologist, Partner and President Jackson Heart Clinic, PA Gerard R. Host (1) (2) President and Chief Executive Officer Trustmark Corporation President and Chief Executive Officer Trustmark National Bank John M. McCullouch (1) (2) Associate Dean - Metro Jackson University of Mississippi School of Law (Retired) President, AT&T Mississippi (Retired) Harry M. Walker (2) President Mississippi Business and Community Relations Trustmark National Bank (Retired) Harris V. Morrissette (1) (2) President China Doll Rice & Beans, Inc. / Dixie Lily Foods LeRoy G. Walker, Jr. (1) (2) President LTM Enterprises, Inc. Richard H. Puckett (1) (2) Chairman and Chief Executive Officer Puckett Machinery Company William G. Yates III (1) (2) President and Chief Executive Officer W.G. Yates & Sons Construction Company R. Michael Summerford (1) (2) Chairman Trustmark Corporation and Trustmark National Bank (Effective 1-1-17) Chief Operating Officer ChemFirst, Inc. (Former) (1) Director, Trustmark Corporation (2) Director, Trustmark National Bank 11 CORPORATE INFORMATION Common Stock Trustmark common stock is listed on the NASDAQ Global Select Market and is traded under the symbol TRMK. 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 (877) 476-4393 for assistance. toll-free number 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 Company, LLC Operations Center 6201 15th Avenue Brooklyn, NY 11219 Shareholder Services Trustmark’s shareholder services are provided by American Stock Transfer & Trust Company, LLC (AST). AST will assist with: Registration status Dividend payments Change of address Lost certificates Transfer of ownership Other inquiries or requests 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. 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 12 Investor Inquiries Analyst and investor inquiries may be directed to: Media Inquiries Media representatives seeking general information should contact: Louis E. Greer Treasurer and Principal Financial Officer (601) 208-2310 lgreer@trustmark.com F. Joseph Rein, Jr. Senior Vice President (601) 208-6898 jrein@trustmark.com Melanie A. Morgan Senior Vice President (601) 208-2979 mmorgan@trustmark.com ANNUAL MEETING OF SHAREHOLDERS Trustmark Corporation’s Annual Meeting of Shareholders will be held on Tuesday, April 25, 2017, at 2:00 p.m. Central Time in the Trustmark Conference Center at the Mississippi Sports Hall of Fame, 1152 Lakeland Drive, Jackson, Mississippi. TRUSTMARK CORPORATION OFFICERS Daniel A. Grafton Chairman (Through 12-31-16) R. Michael Summerford Chairman (Effective 1-1-17) Gerard R. Host President and Chief Executive Officer Louis E. Greer Treasurer and Principal Financial Officer Granville Tate, Jr. Secretary F. Joseph Rein, Jr. Assistant Secretary 13 TRUSTMARK NATIONAL BANK EXECUTIVE MANAGEMENT EXECUTIVE 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 Granville Tate, Jr. Executive Vice President, Chief Risk Officer and General Counsel Breck W. Tyler President - Mortgage Services C. Scott Woods President - Insurance Services MARKETS 14 TRUSTMARK NATIONAL BANK REGIONAL AND MARKET EXECUTIVES REGIONAL PRESIDENT REGION MARKET PRESIDENT William S. Bridges Houston Michael D. Fitzhugh Alabama/Mississippi Gulf Coast Aubrey E. Henson, Jr. Memphis/North Mississippi Charles H. Lewis IV South Mississippi W. Mark Lewis Central Mississippi Linwood O. McClain Central Alabama W. Holt McMullan East Mississippi Leonard P. Hein, Southeast Houston Christine Petrilla, North Houston Travis H. Van Horn, Southwest Houston Eric C. Brown, Mississippi Gulf Coast Kevin S. Carey, Mobile, AL Paul J. England, Monroeville, AL Tommy B. Faust, Jr., Baldwin County, AL Deborah C. Hardee, Brewton, AL William C. Hart, Pensacola, FL John David Douglas, Fayette County, TN Victor L. Marlar, Corinth, MS R. Andrew McGahey, Greenville, MS J. Clifton Thach, Greenwood, MS Jason A. Douglas, McComb, MS Stanley L. Foster, Brookhaven, MS Charlie Scott King, Tylertown, MS Charles T. Magee, Columbia, MS Michael E. Crandall, Canton, MS Brandon S. Hubbard, Magee, MS Thomas Kendall, Vicksburg, MS Joe B. Madden, Hazlehurst, MS Dave Crenshaw, Greenville, AL David C. Darby, Montevallo, AL James B. Hurst, Opelika, AL William V. Lewis, Tuscaloosa, AL Charles R. Schaeffer, Eufaula, AL R. Wade Seamon, Prattville, AL Charles E. Singleton, Demopolis, AL James A. Stewart, Centreville/Selma, AL David G. (“Archie”) Anderson, Meridian, MS J. Gregory Bennett, Laurel, MS Charles R. Russell, Tupelo, MS Darrell W. Temple, Taylorsville, MS Larry A. Waggoner , Carthage, MS Bart C. Wise, Columbus, MS John D. Sumrall Florida John G. Hindsman, Bay County Jonathan E. Ochs, Okaloosa and Walton Counties 15 TRUSTMARK NATIONAL BANK COMMUNITY MARKET ADVISORY DIRECTORS ALABAMA Brewton Broox G. Garrett Attorney Thompson, Garrett & Hines Chris B. Griffin Administrator D.W. McMillan Memorial Hospital Deborah C. Hardee President Trustmark National Bank 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 Banker (Retired) Stephanie Walker Preschool Director St. Stephen’s Episcopal Church Centreville John Downs Business Office Manager Alabama Power Company Steve Edmonds President Windwood Management Group Stephanie Kemmer Probate Judge Bibb County 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. Eufaula Robert M. Dixon, Jr. Chief Executive Officer M.C. Dixon Lumber Company, Inc. Mo Erkins Military (Retired) Mary Foy Kirkland President Young Johnston and Associates, Inc. Charles R. Schaeffer President Trustmark National Bank Joel Smith, Jr. Attorney Williams, Potthoff, Williams & Smith Johnnie Anderson Shows II Owner Jaber, Inc. Robert L. Taylor Owner Bobby Taylor Enterprises Charles E. Singleton President Trustmark National Bank Deltonya Warren Director of Curriculum Eufaula City Schools Mem Stewart Webb Owner Webb Reality, Inc. Thomas Alvin Williams Partner Morgan’s Ice Dan E. Wilson Owner Colony Office Products Doug Winkleblack Southern Regional Manager Alabama Interforest Corp Greenville Barry E. Boan President Boan Contracting Ken Chesser Owner KC Land & Cattle Company Dave Crenshaw President Trustmark National Bank P. Richard Hartley Partner Hartley & Hickman Attorneys At Law Dexter McLendon Mayor City of Greenville Allin Whittle Butler County Commissioner Warren J. Williamson Attorney Williamson & Williamson (Retired) Mobile/Baldwin County Sumner G. Adams Vice President Cash Management/Finance Norton Lilly International Tommy B. Faust, Jr. President Trustmark National Bank – Baldwin County Frank McKinley Bell III President Marine Rigging, Inc. Kevin S. Carey President - Mobile Trustmark National Bank Jacob L. Cunningham Manager Summit Industries, LLC 16 Philip C. Hubbard Veterinarian Countryside Animal Hospital J.N. Buckner Partner Buckner and Cook, LLC David A. Dye Chairman and Chief Growth Officer Computer Programs and Systems, Inc. (CPSI) Thomas Gross Chief Financial Officer Battle Plan Capital, LLC Truland Homes, LLC H. Ray Hix, Jr. Partner/Manager Hix Snedeker Companies, LLC Clifton C. Inge, Jr. Chief Executive Officer 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 LLP E. Luckett Robinson II Vice President - Finance Overseas Hardwoods Company, Inc. (OHC) David Sutley President – Baldwin County Trustmark National Bank (Retired) Monroeville Pete Black Alabama Business Development Mgr. Parsons & Whittemore Haniel Croft President BankTrust (Retired) Karen Kelly Human Resources McWane, Inc. Leroy Lucas, Jr. Owner Lelco, Inc. Paul J. England President Trustmark National Bank John W. Stewart III President University of Montevallo Montgomery Jim W. Benefield, DVM Veterinarian Carmichael Road Animal Clinic Thomas H. Cawthon, MD Otolaryngologist Montgomery Otolaryngology John E. Hall, Jr. Owner/Broker John Hall & Company Phyllis Ingram Partner/Shareholder Carr, Riggs & Ingram, LLC Leonard N. Math Partner/Shareholder Chambless, Math & Carr, PC Attorneys at Law Prattville John Boutwell Owner Boutwell Farms John E. Estes, Jr. Vice President J. E. Estes Wood Company, Inc. Sloan Fountain Vice President/Mgr. Vanity Fair Mills, Inc. (Retired) Ed Lee, DMD Dentist John T. Lee Auto Dealer Lee Motor Company (Retired) Alex Roberts Photographer Alex Roberts Photography (Retired) Sandy Smith Director Monroeville Area Chamber of Commerce Montevallo David C. Darby President Trustmark National Bank 17 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 Selma Tommy Atchison Attorney Pitts, Pitts and Williams Denson Henry Vice President Henry Brick Co. 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 TRUSTMARK NATIONAL BANK COMMUNITY MARKET ADVISORY DIRECTORS Ira M. Wagoner Accountant Edwards and Wilkinson, PC James R. Moody IV Accountant Jinks & Moody, P.A. Tallassee 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 Chief Executive Officer Community Hospital, Inc. FLORIDA Angus G. Andrews Real Estate Investor/ Developer 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 Solutions Dennis A. Wallace Walton County School Board (Retired) Real Estate Investor Lumber Distributor MISSISSIPPI Brookhaven Robert O. Allen Partner Allen, Allen, Breeland & Allen, PLLC Tracy T. Conerly Partner Emeritus Carr, Riggs & Ingram, LLC Cecil Estess Corporate Officer Dickerson & Bowen Gerald R. Dunkle President Sundial Developers, Inc. Robin Tyler Faust, CFSP Funeral Director Tyler Funeral Home, Inc. Kenneth W. Goza Program Coordinator Copiah Lincoln Community College 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 Carthage Carl Blocker Sales Greco Electrical Contractor Lee Carson President N.L. Carson Construction, Inc. H. Frank Rhea President Trustmark National Bank (Retired) Robert C. McLendon Commercial Insurance Fisher Brown Bottrell Insurance, Inc. Stanley L. Foster President Trustmark National Bank Susan Triplett Administrator Northeast Region Sta-Home Health 18 Larry A. Waggoner President Trustmark National Bank Jason Wilcox President/Owner Wilcox Funeral Home Steve Wilkerson Owner Steve’s on the Square Columbus Mark G. Alexander Chairman Dynahealth, Inc. William Key Blair, Jr. Vice President Columbus Marble Works 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 Paul D. Dees Partner Greenland Planting Company Stephen R. Jernigan Owner River City Rehabilitation R. Andrew McGahey President Trustmark National Bank Harley Metcalfe III Investor (Retired) Steven R. Millwood President Mississippi Marine Corporation Greenwood H. Don Brock, Jr. Partner Whittington Brock & Swayze Robert L. Upchurch President Upchurch Plumbing, Inc. Fred J. McDonnell, MD Physician Copiah Medical Associates Hattiesburg Hugh Bolton Executive Vice President Trustmark National Bank (Retired) Thomas M. Duff Managing Partner Southern Tire Mart, LLC John M. Fitzpatrick III, MD President and Physician Hattiesburg Clinic, PA Linda Kuykendall Vice President Commercial Business Interiors, Inc. Charles H. Lewis IV Regional President South Mississippi Trustmark National Bank W. A. Payne III President Camellia Home Health Robert O. Tatum, Jr. Principal/Owner CR Properties, LLC 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 Jerome Harless President Flarestack, Inc. Alexander John Malouf III Co-Owner The John Richard Collection, Inc. Robert R. Vardaman Owner and President Vardaman Buick-Honda, Inc. Victor Jones, Jr. President Jones Sales and Service, Inc. R.A. Norris President S&N Airflow, Inc. Clifton Thach President Trustmark National Bank Hazlehurst Olen C. Bryant, Jr. Attorney Bryant & Rutland, PLLC Joe B. Madden President Trustmark National Bank Rhes V. Low, Sr. Investor Low Company, LLC Richard L. Yoder, Jr. Attorney Gilchrist Sumrall Yoder & Boone, PLLC 19 Magee Julie Polk Breazeale Chief Executive Officer Polk’s Meat Products, Inc. Jacqueline P. Gordy Secretary-Treasurer Pace Oil Company Brandon S. Hubbard President Trustmark National Bank Charles Pruitt III, MD Physician Magee Medical and Surgical Clinic, PLLC James H. Stuard, DMD James Stuard Family Dentistry James Price Wallace Owner and Manager River Birch Farm McComb Pat H. Brumfield, Jr. President Brumfield Oil Company, Inc. Brad Clark 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 TRUSTMARK NATIONAL BANK COMMUNITY MARKET ADVISORY DIRECTORS Thomas Kendall President Trustmark National Bank TENNESSEE Fayette County 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/North Mississippi Trustmark National Bank John S. Wilder, Jr. Treasurer and General Manager Long Town Gin & Supply Michael Faust CPA Faust & Associates John M. Mitchell, Jr. Owner The Mitchell Companies Craig Haskins Vice President Commercial Developers, Inc. C.D. Smith, Jr. Regional Manager AT&T Mississippi Tylertown Timothy O. Jones Assistant District Attorney 14th Judicial District Steven L. Kennedy Owner Tylertown Sports Center Eric S. Lewis, MD Surgeon Southwest Mississippi Oral & Maxillofacial Surgery, Inc. John Andrew Watson, DO Southwest Mississippi Regional Medical Center Meridian David G. “Archie” Anderson President Trustmark National Bank Jay L. Davidson President and Director Southern Pipe & Supply, Inc. Tupelo V.M. Cleveland President Tupelo Furniture Market Charlie Scott King President Trustmark National Bank Johnny L. Crane II President F.L. Crane & Sons, Inc. Rob Loper, DVM Veterinarian Tylertown Animal Hospital Carlyle S. Harris, Jr. General Partner Harris Holdings LP I. Conrad Mord II Attorney Mord Law Firm D. Colin Maloney President Century Construction and Realty, Inc. J. Keith Speed, DO Doctor of Osteopathy William Carey University Mark L. Denney Owner Meridian Order Buyers, Inc. (Former) Adam Mitchell Vice President Mitchell Distributing Company Tommy E. Dulaney President and Chief Executive Officer Structural Steel Services, Inc. Elizabeth J. Randall President Randall Commercial Group, LLC Billy W. Estes President Trustmark National Bank (Retired) Larkin Kennedy Executive Vice President/ Administrator Rush Foundation Hospital Charles R. Russell President Trustmark National Bank David S. Talton, MD President Cardiothoracic Surgery Clinic of North Mississippi Vicksburg Ronald L. Andrews, Sr. President Vicksburg Insurance Agency, Inc. Robert R. Bailess Partner Wheeless, Shappley, Bailess & Rector, LLP W. Briggs Hopson III Partner Teller, Hassell & Hopson, LLP Donald Jarratt Managing Partner Jarratt Properties, LLC 20 TRUSTMARK CORPORATION 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 2016 2015 $ $ $ 108,411 1.60 1.60 0. 92 22.48 16.76 9.99 % 7.14 % 0.84 % 11.39 % 8.74 % 9.90 % 12.76 % 13.59 % 3,515,325 8,299,387 13,352,333 10,056,012 1,622,500 1,520,208 $ $ $ 116,038 1.72 1.71 0. 92 21.80 15.98 11.36 % 7.94 % 0.95 % 11.62 % 8.79 % 10.03 % 13.21 % 14.07 % 3,533,240 7,641,985 12,678,896 9,588,230 1,466,639 1,473,057 21 22 23 

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