Good morning ladies and gentlemen and welcome to the Trustmark Corporation second quarter earnings conference call. At this time all participants are in a listen-only mode. Following the presentation this morning there will be a question-and-answer session. (Operator Instructions) It is now my pleasure to introduce Joey Rein, Director of Investor Relations at Trustmark.

[Audio Gap] Our earnings release as well as supporting financial information is available on the Investor Relations section of our website at trustmark.com. During the course of our call this morning, we may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We would like to caution you that these forward-looking statements may differ materially from actual results due to a number of risk and uncertainties which are outlined in our earnings release and our other filings with the Securities and Exchange Commission. At this time, I would like to introduce Richard Hickson, Chairman and CEO of Trustmark.

Good morning. Thank you for joining us this morning. I have with me Jerry Host, our Chief Operating Officer; Louis Greer, our Chief Financial Officer and other Executives representing our investment department and credit administration to answer any questions that you might have this morning. Let me begin by saying I feel it was a good quarter, from some perspectives a very good quarter. There were no really significant surprises. We remain cautious about the further; however, I would say that Trustmark has turned its ship and moved to the [authentic]. Someone said at our Board meeting yesterday as we were looking where we are and where others are, we are fully cognizant that we are seeing a number of institutions still incurring problems in our market. We are aware of that, we are very cautions of that and we are concerned of that. Someone told me yesterday that today’s peacock is always tomorrow’s feather duster. So we know we had a very good quarter, but we surely don’t think we are at the end of anything, maybe it dropped down to a new level, but we’ll talk about that and you can form your own opinions. Net income available to common shareholders was approximately $26 million, $0.41 a share. Our return on tangible common equity which we key towards was approximately 13% up from about 12% on the length quarter. Our Board did declare its usual cash dividend of $0.43, which we had a good converge ration on. Pretax, pre-prevision earnings were all steady at approximately $49 million. We saw some revenue growth compared to a year ago, some improved credit quality and we continue with a very disciplined expense management, which will be more granular later in our call. We have two items which you might consider non-core;…

Thank you, Richard. As Richard mentioned, there is a lot ahead of us for all of us in the financial services industry relative to the new financial reform regulation and we are studying it very carefully and we are in the early stages of putting together projections in terms of the impact, on our balance sheet and income statement. More specifically though is it relates to the Reg E change, opt-in and opt-out. I will tell you that today we have approximately 90% response rate from all of the accounts that we have contacted. Of that response, approximately 88% have opted in and even a higher percentage, approximately 92% have opted in on those users that are more frequent users of the overdraft projection product. So based on some indications we had given you a quarter earlier, we feel better about where we will actually end up. You all recall that for existing customers, the change takes place on Augustus 15, though it will be approximately 4.5 to 5 month advantage for us for the remainder of this year. Richard.

Thanks Jerry. That will end our comment. We appreciate you going through it with us. We try to go through it a very granular way to answer as many as your questions as we can in advance. We’ll open it for questions.

Thank you. (Operator Instructions) Our first question will come from Steven Alexopoulos from JPMorgan, please go ahead. Steven Alexopoulos – JPMorgan: Hey, good morning Richard.

Good morning Steven, how are you? Steven Alexopoulos – JPMorgan: Okay, great. Maybe we can start given the review of the coastal risk that you did in the quarter, can you break out the total dollars of loans that you have in coastal MSAs and maybe a little bit more direct risk in those MSAs?

Yes, it is not significant in Mississippi, what we have there is not likely to be impacted based on what we are seeing today. I think you can look in our stat sheet and you can see Florida, show me what page in our stat sheet -- look at see if the [Inaudible] page 8 of the financial supplements. So, at the bottom, you can see in Florida we have in hotel, motel $13 million, that’s two adjoining properties, they are same distance, they are cash flowing and have strong owners. I was there a week before last, stayed there, I couldn’t park. Our Chief of Credit Administration was there last weekend and had trouble parking, it’s just a busy place. We are not expecting - its some big blobs cover the beach, things are going to happen, but it does in the determinable pass that hopefully at this point in time. We don’t really have any restaurants to mount anything anywhere relative to our size and we just don’t think it at this time. When we looked and when we saw it Steven, we said okay if we have these loans, we don’t really know what’s going to happen to them. If they migrate one grade or two grades or three grades, the cost of that migration which did well into our budget. So remember we came in immediately after Katrina which was very impacted to Mississippi and set up a $10 million reserve. After two or three years we didn’t use any of it, I think we used a couple of hundred thousand dollars and brought it back and released it. We are not a coast bank, our bank is off the coast, if this is a positive right now, because a lot of jobs are created a lot of money. Now we have owner board some big construction companies, big heavy equipment dealers and others who have operations along the coast. We have quite length discussions about the cash flow that both owners are receiving, other people and right now if anything is a positive and we just don’t see it at this time, that doesn’t mean something didn’t going to change, but we look at very close. We’ve also discussed it with our regulators and accountant. Steven Alexopoulos – JPMorgan: Could you be [Inaudible] just follow up, even though you are not necessarily a coast bank give the impact just for that region from what’s going on. Does this force you to keep reserve levels generally higher that you would be keeping them at the stage?

No. our loan loss reserving, we did not lower our qualitative in anyway. If conditions were to worsen we would increase our qualitative, but we haven’t seen it and with our total exposure dropping significantly in Florida once it down in the last 12 months 30% or so. We haven’t seen the need to increase our qualitative, but remainder is of our reserve it just absolute loan after loan after loan which are independently graded looked at on the loan review and looked at by the control of the currency on a very regular basis. I guess that’s the best way to answer it. We have reserves are very significant loan we have particularly you looked at the point they were rolling off all of this, all loan paper and all of these construction loans, and if you good this plus tangible equity at 9.3% of stronger margin and never have we fallen below this $50 million pretax point provision we have held it. Steven Alexopoulos – JPMorgan: Thanks. Thanks for answering my questions.

Our next question will come from Kevin Fitzsimmons from Sandler O'Neill; please go ahead. Kevin Fitzsimmons – Sandler O'Neill: Good morning everyone.

Hi Kevin. Kevin Fitzsimmons – Sandler O'Neill: Richard, just two quick questions. Number one, if you can just address the margin. I know it expanded again this quarter. Just wondering what you have on top for further ability to reduce your funding costs. Can the margin really keep going up or I know we alluded to it going down for several quarters and keeps going up. Just wanting your feeling there. And then secondly, you did address it briefly at the outset, that some of your peers have had credit issues and I think the comment threat on some of these has been kind of late stage credit deterioration, credits that banks thought were solid a few quarters ago and are just getting -- losing liquidity due to the duration of the downturn, you know so not so much focus on Florida, because you guys have been very focused there. But Mississippi, Texas, Memphis, just wondering is this something that you are seeing, but it’s just being overshadowed by the improvement in Florida or have you seen it, but you have taken care of it already because you had pretty extensive credit reviews because of the situation in Florida? Thanks.

Sure. Let me answer your last question first. Our significant in size loan portfolios are concentrated in two places, the Jackson MSA and the Houston MSA. I am not aware that our peers are having any problem of any significance in the Jackson MSA. It had just not suffered as much, and because we are headquartered in Jackson and have the good fortune of having been here since the beginning, I would say that if there are any good credits, we have been banking on them for a long time and they are holding together and houses are selling, plots are being developed, not in any real rapid rate, but it’s just not come to a standstill here, because properties just never really appreciated here. I would say Memphis has been a real negative surprise for us all the way through. I don’t know why Memphis has been different than Jackson. When you look at it, maybe there was just over aggressive builders and more banks in that market from out of market like us, although in the market a lot of branches just got there. We have had our officers, our loan review teams and our regulators, almost in every nook and cranny of this company since December. We have received compliments from our loan review and our regulators on the consistency of loan grading by our officers. As a precaution, a year ago we sent every person who had the possibility of lending commercial money in this company back through loan grade school one by one, and had to pass exams and we understand the OCCs rates on what the sub standard is or especially mentioned and I will knock on wood, we just don’t miss very often, because we are very cognizant of it. We had some…

Our next question will come from Andy Stapp from B. Riley & Company; please go ahead. Andy Stapp – B. Riley & Co.: Good morning and nice quarter.

Thank you Andy. Andy Stapp – B. Riley & Co.: Do you have 30 to 80 day delinquencies at quarter end?

Yeah, not that there is any real change from the last quarter. I’ll let Barry Harvey touch on this.

Okay, the 30 days or more past dues as of quarter end from the corporation was 3.5%, and I think it’s worth mentioning that your back to Florida portfolio out of that equation, we are down to about 2.2%. So we are comfortable with that. Was there another question there Andy? Andy Stapp – B. Riley & Co.: Talk about your auto?

Okay. On the auto portfolio we reserve at about 1.3% and as the run off is occurring the second quarter we noticed a very positive trend as it relates to charge-offs. Charge-offs were probably down $1 million this quarter versus the first quarter of the year. First quarter being about $1.4 million and this quarter being a little less than $400,000. That trend is a little bit seasonal due to the tax refund, and people being able to catch up on the past due payments, we see that routinely, but we do feel like that we have gone to turn down and while it may not be less than $400,000, the next quarter we do feel like we are in gradually continue to move down in terms of the net charge-off we are experiencing in our portfolio.

We are a small business lender, average loan I mean under $100,000. The past dues are always been higher in our small business portfolio and you don’t seem to have many losses there. Well I don’t know, I guess this number is not essentially high for us [Inaudible].

No its been fairly stable throughout the last about six quarters. Andy Stapp – B. Riley: Okay, and I believe you said that mortgage banking volume was up on a linked quarter. Just help me to reconcile why were the gains on loan sales down? If you could also talk about your mortgage banking issues?

Yeah, I’m going to let somebody. We have a lot of volatility in how the two or three largest players in the company price their business and we are a very pooled service mortgage company and have the strength to take advantage of their moods as the different spreads change and of course we probably hadn’t even sold a lot that’s in the pipeline than we did this quarter, actually move out next quarter. Jerry, you want to comment on that anymore?

It’s more of a timing issue, although you are absolutely right. We’ve almost doubled the volume in the second quarter in mortgage company in terms of our production. Those loans are still forward and the gain on those will not be recognized until next quarter. Andy Stapp – B. Riley: Okay. Also help me out on your average earning assets. With the run off in your construction and development and auto loans and interest rates coming down so far, how can you protect the earning assets?

One loan, one deposit at a time. Pricing, discipline, whatever happens to the industry, has to happen to Trustmark. We today have just been very fortunate, but look we may enjoy a very granular way and we are barely centralized and that there are constant discussions going on between Mr. Host and those Presidents all across our system and they are very focused in incentive to maintain their margin.

I’d only add on comment to that Richard, and they are very much on target in terms of the incentives and the measurements we put in place of our bank Presidents relative to their margins. As Richard’s mentioned, most of the decrease or essentially all the decrease in the loan volume is a function run off and indirect and real estate related projects. On the commercial side, we have maintained the base of customers we’ve always had. So many businesses have de-leveraged themselves, that we have worked to build new relationships just to keep ourselves flat. The pricing on existing relationships as well as new has been enhanced, because as we have renewed those loans, we have been able to negotiate flows on a very large number of those loans and that has helped to maintain our margin. As the economy recovers and as businesses feel more comfortable about expanding, we would anticipate that that customer base we have, we utilize those lines and that in itself should help our loan growth going forward. So it’s a matter of the economic environment and when businesses feel more comfortable borrowing.

Thank you Jerry. I am going to ask Buddy Wood if he would comment on the margin from his perspective as it might relate to investments and other issues. Then Buddy, since it was there, you may want to comment on hedge.

Protecting the margin is probably the second most discussed subject in this company next to the credit work, that’s staying down. It’s not just because what we look at internally is, but we also have extensive discussions about what other peer banks are doing, whether opportunities are in the marketplace and we look at them very carefully at various levels, but it goes all the way to the top of the organization on a very proactive basis. We recognize that with the amount of capital, the amount of liquidity and a very stable interest rate risk position that we got the company set up for at this point, that while we are going through what appears to be an extended recession period, we are going to have to use the investment portfolio at times which is very custom and ordinary in the low end of all of the recession like we are going through. We’ve looked at a lot of alternatives. We are a conservative investment company. We will continue to be, at the same time we believe that there are some incremental opportunities for us, and it was strictly be around the edges, in order for us to maintain as less the margin as we want both in percentage and also in dollars. There is a lot of our peers who are using very short-term instruments for example, to add some incremental dollars. We look at that on a regular basis. It’s not out of the question for us to pay attention to that and take advantage of the fact that we don’t use very much in the least cost part of our company’s liabilities, which is in our borrowings. We’ve had much higher levels of borrowings that you look in the past than we have today and there’s opportunities for us to do something there, as well as to look at a very small amount of some incremental alternative investments as well. We model extensively what the margin looks like. We’ve got a lot of confidence in it, although we know the level that it’s at today is very difficult to view that as sustainable, but we also have a lot of confidence that it’s going to be very competitive. Our investment portfolio is only in a 20% range, so you know that there are banks who are using the much more extensive and they are very high quality organizations and so there is plenty of rooms for us to do that, both from liquidity investments as a percentage, the borrowing capacity, the interest rate risk profile and of course the capital profile that we have. So both from a dollar and a percentage point of view, we know that there is a lot of challenges. We meet very actively on it and we think there is some more alternatives that will how gets through the bottom of the session, till we see that loan growth come back.

Talk about the hedge.

The hedge is a very interesting hedging program that we use. As you know we are using a U.S. Treasury, which is a fixed income, non-convex hedging program, and at the same time if you look at the reason that we do that, is our MSR is not a single MSR product. It is a portfolio, therefore convexity is not the issue. We’ve managed it through these various periods of time. If you look at the 130 basis point move that we’ve had in compression over past 17 months, we’ve got a positive set of results through that. So we have confidence in it, we still have a positive yield curve and we have a moderate level of volatility, since volatility is a positive because we are using options. We have a high degree of confidence that our hedge will continue to perform very well in a positively slow yield curve, even though we will have some periods like we’ve had recently, where we’ll have a small narrowing versus the widening that we had due to the large move in treasuries during this past quarter. Andy Stapp – B. Riley: Okay, thank you.

Thank you.

One more bit of data is I am going to let Barry Harvey and Bob Morrison give you a little more flavor on loan activity that we see.

Sure Richard. I guess before I turn it over to Bob on some of the types and the quality of the credits that we are seeing come to the committee. They are various single owned communities, where we are seeing our larger credits for decision. During the quarter we had new request dollar of about $245 million, but 213 specific new requests that flow through, most of which as you can imagine is CNR related, but Bob you want to talk a little bit about some of the specific on some of the industries and some of the types of credits, in which markets they tend to be flowing from?

Yeah, we’ve generally seen as a little up tick in activity, especially in second quarter on the CNI side and really it runs pretty much across the Board. All types of industries really [Indiscernible] and it continues to be slow, but we’ve had a couple of nice credits come in through our corporate area. Companies in the mid-south, we’ve done a couple of club deals with banks in our area on larger credit, but we take a piece and then the other bank share, but overall we are seeing somewhat of a positive improvement. Of course, when we approve the loans it takes sometime to release the fund out. Some of them for comparative reasons we may not get, so it takes a while for the funding to occur with some lag effect, but we are encouraged and I know our guys are out really aggressively calling and they’re doing follow-up calling the program. So as Richard earlier, if the business is there, I think for the most part we are going to look at it especially in the Mississippi and Houston markets. Andy Stapp – B. Riley: Great. Appreciate it.

Do we have any questions?

Yes, we do. We have a question from Caron Jacobson from KBW; please go ahead.

Good morning gentlemen. I was just wondering if – can you hear me?

Sure. Yes.

Okay. Great. I was just wondering if you could give the size of the gross additions to non-performing loans. You had mentioned on the release that it was down, that’s when I guess I could get a level.

Could you repeat that question?

The gross additions for the new and NPL loans.

Sure. Why don’t I give you anything over $1 million.

Okay.

There was one finance related company in Mississippi, it was a couple of million. There was about $6 million in the credit that I mentioned that was a cash flowing shopping center and that we’ve seen the improvement in with the judge refusing to let it go into bankruptcy, and about a $3.5 million piece of developing land in Texas, and one house for $1.2 million in Florida. Below that, it was from 100,000 to 500, so two, eight, nine, 10, 11, 12. 14 of 35 million would hit your radar screen. Very low, half a mark ratio. No land in Florida whatever.

Okay, great. Thank you, and then you had another quarter with a little reserve release. I was wondering if you could talk about your expectations there.

Depends on what happens this quarter. Just loan by loan by loan. Obviously, right now you can tell, most of what we charged off was reserved for previously, and I would say generally I expect charge offs as we move on through, could be equal to or a little more than the reserve. We are not a company based on how the loan loss methodology works for us. If we are going to turn around and release a bunch of reserves, unless something happens in a very granular way in the loan portfolio, and on the other side, if nothing happens in the loan portfolio and we don’t see any significant qualitative issues in our qualitative committees, the executive management, that’s loan administration and they are long and very granular maybe and they just hadn’t seen it, where the other changes yet. I am expecting it to maybe come to a new level and stay there a little while. We go back into a double dip, maybe a little perk up, but you know the pockets don’t have anywhere near as much as in them in Memphis and in Florida. Hope that helps you somewhat.

That does help. Thank you very much.

(Operator Instructions) Our next question comes from Al Savastano from Macquarie; please go ahead.

Good morning guys. How are you?

Hi Al. How are you? Thanks for calling.

Actually answering my question, I was just wondering if you can give us an update on the CEO transition and the plans there please.

Sure. I recall our CEO at January 1 and is Chairman in our next shareholder meeting in the middle of May. We have been undergoing succession planning at the Board level all the way through and we’ll probably make an announcement and have a CEO designated in the fall.

Great. Thank you.

If there are no other questions, I want to thank you very much for joining us. We have significantly entered the third quarter. So we will see you again sooner than we all might think. Thank you very much. Have a nice day.