Edgar Filing: TRUSTMARK CORP

Form 11-k December 31, 2005

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 11-K

(Mark One)

x	ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
	For the fiscal year ended December 31, 2005

o	TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
	For the transition periond from _____ to _____

Commission File Number 0-3683

Full title of the plan and the address of the plan, if different from that of the issuer named below:

Trustmark 401(k) Plan

Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

Trustmark Corporation

248 E. Capitol Street

Jackson, Mississippi 39201

TRUSTMARK 401(k) PLAN

Financial Statements and Schedule

December 31, 2005 and 2004

(Report of Independent Registered Public Accounting Firm Thereon)

TRUSTMARK 401(k) PLAN

Index to Financial Statements and Schedule

	Page
Report of Independent Registered Public Accounting Firm	1
Statements of Net Assets Available for Benefits as of December 31, 2005 and 2004	2
Statement of Changes in net Assets Available for Benefits for the year ended December 31, 2005 and 2004	3
Notes to Financial Statements	4
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) as of December 31, 2005	9

All other schedules are omitted because there is no information to report.

Report of Independent Registered Public Accounting Firm

The Plan Administrator

Trustmark 401(k) Plan:

We have audited the accompanying statements of net assets available for benefits of Trustmark 401(k) Plan (the Plan) as of December 31, 2005 and 2004, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2005 and 2004, and the changes in net assets available for benefits for the years then ended in conformity with U.S. generally accepted accounting principles.

Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic 2005 financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic 2005 financial statements taken as a whole.

/s/ KPMG LLP

Jackson, Mississippi

June 23, 2006

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TRUSTMARK 401(k) PLAN
Statements of Net Assets Available for Benefits
December 31, 2005 and 2004

	2005		2004
Investments, at fair value:
Money market accounts	$	18,510,592	$	16,972,820
Fixed income mutual funds		5,646,051		4,818,765
Common stock of Trustmark Corporation		47,344,435		56,205,226
Equity mutual funds		61,573,347		45,796,548
Total investments		133,074,425		123,793,359
Receivables:
Employer contributions		204,431		172,635
Participant contributions		211,604		196,834
Rollover contributions		41,603		—
Total receivables		457,638		369,469
Net assets available for benefits	$	133,532,063	$	124,162,828

See accompanying notes to financial statements.

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TRUSTMARK 401(k) PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 2005 and 2004

	2005			2004
Contributions:
Employer	$	3,484,912		$	2,966,908
Participant		6,386,364			6,192,908
Other		437,301			264,914
Total contributions		10,308,577			9,424,730
Net investment income:
Net appreciation (depreciation) in fair value of investments		(2,902,306	)		6,230,651
Interest and dividends		4,102,343			4,748,325
Net investment income		1,200,037			10,978,976
Benefits paid to participants		(7,765,634	)		(6,378,715	)
Net assets received from merged plans		5,890,821			—
Administrative fees		(264,566	)		(125,545	)
Net increase in net assets available for benefits		9,369,235			13,899,446
Net assets available for benefits:
Beginning of year		124,162,828			110,263,382
End of year	$	133,532,063		$	124,162,828

See accompanying notes to financial statements.

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TRUSTMARK 401(k) PLAN

Notes to Financial Statements

December 31, 2005 and 2004

(1)

Plan Description

The following description of Trustmark 401(k) Plan (the Plan) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.

(a)

General

The Plan is a defined contribution plan established for the associates of Trustmark Corporation (the Company) and certain other associated companies. The plan is subject to the provisions of the Employee Retirement Income Security Act (ERISA) of 1974.

(b)

Eligibility

Effective January 1, 2004, the Plan was amended to provide eligibility for participation in elective deferrals by employees on the first day of the month after thirty days of employment. Prior to 2004, the Plan provided eligibility for participation on the first day of the month following the completion of at least 1,000 hours of service during the twelve-month period ending on the anniversary of a person’s employment commencement date.

(c)

Plan Administration

Nationwide Life Insurance Company and Nationwide Trust Company serve as custodian of the Plan’s assets. The plan administrator and sponsor is Trustmark Corporation, parent company of Trustmark National Bank. The plan’s trustee functions are handled by Trustmark National Bank.

(d)

Participant Contributions

The Plan allows participants to make voluntary before-tax salary deferral contributions, through payroll deductions, to separately invested funds in accordance with Section 401(k) of the Internal Revenue Code. If certain requirements of Internal Revenue Code Section 401(k) are not met in Plan operation, the salary deferral agreements of participants may, on a nondiscriminatory and uniform basis, be amended or revoked to preserve the qualified status of the Plan. Voluntary after-tax contributions by participants are not allowed.

Participants may elect to contribute up to 25% of eligible compensation each period, subject to regulatory limitations. Any excess contributions must be returned to the applicable participant by April 15 of the calendar year following the year of excess contributions. The Plan allows for rollover contributions from individual retirement accounts, IRC Section 457(b) plans or other qualified plans.

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TRUSTMARK 401(k) PLAN

Notes to Financial Statements

December 31, 2005 and 2004

Provisions of the Plan allow participants who were age 50 years or older by the end of the calendar year to make catch-up contributions to the Plan. Catch-up contributions represent associate compensation deferrals in excess of certain plan limits and statutory limits, including IRS annual deferral limits. The IRS annual deferral limits and annual catch-up contribution limits are indicated in the following schedule:

			Catch-up
Calendar year	Deferral limit		contribution limit
2004	$	13,000	$	3,000
2005		14,000		4,000
2006		15,000		5,000
Thereafter		Indexed in $500		Indexed in $500
		increments		increments

(e)

Employer Contributions

Eligible participant contributions are matched by the employer at a rate of 100% of the first 3% and 50% of the next 3% of covered compensation. The employer may also make discretionary contributions.

(f)

Investment Options

Participants may direct investment of their account balance among several investment options.

(g)

Vesting

Participants are immediately vested in their voluntary contributions, employer contributions made on their behalf, and the investment earnings and losses thereon.

(h)

Payment of Benefits

On retirement, death, disability, or termination of service, a participant may elect to receive a lump-sum distribution equal to his or her account balance or in installments. In addition, hardship distributions are permitted if certain criteria are met.

(i)

Plan Termination

Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. However, no such action may deprive any participant or beneficiary under the Plan of any vested benefit.

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TRUSTMARK 401(k) PLAN

Notes to Financial Statements

December 31, 2005 and 2004

(2)

Significant Accounting Policies

(a)

Basis of Presentation

The Plan’s financial statements are prepared using the accrual basis of accounting, with the exception of the payment of benefits, which are recognized as a reduction in the net assets available for benefits of the Plan as they are disbursed to participants. Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date.

(b)

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of net assets and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

(c)

Valuation of Investments

Investments are stated at fair value. The fair value of mutual funds and other securities traded on a national securities exchange are valued at the closing quoted market price on the last business day of the year.

(d)

Net Appreciation (Depreciation) in Fair Value of Investments

Net appreciation (depreciation) in fair value of investments, as recorded in the accompanying statement of changes in net assets available for benefits, includes changes in the fair value of investments acquired, sold, or held during the year.

(e)

Administrative Fees

Administrative fees are paid by the Plan. All other fees, including professional fees, are paid by the Company.

(f)

Risks and Uncertainties

The Plan’s investments include funds which invest in various types of investment securities and in various companies within various markets. Investment securities are exposed to several risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participant’s account balances and the amounts reported in the statement of net assets available for benefits.

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TRUSTMARK 401(k) PLAN

Notes to Financial Statements

December 31, 2005 and 2004

(3)

Investments

The fair value of individual investments that represent 5% or more of the Plan’s net assets as of December 31, 2005, and 2004, are as follows:

	December 31,
	2005		2004
Investments at fair value as determined by quoted
market price:
Common stock of Trustmark Corporation	$	47,344,435	$	56,205,226
Performance Funds Trust Mutual Funds:
Large-Cap Equity Fund		9,934,188		7,872,865
Mid-Cap Equity Fund		11,503,796		8,500,519

Investments at cost, which approximates fair value:
Federated Capital Preservation Fund		15,817,992		14,296,460

During 2005 and 2004, the Plan’s investments (including investments bought and sold, as well as held during the year) appreciated (depreciated) in value as follows:

	December 31,
	2005			2004
Investments at fair value as determined by quoted
market price:
Common stock of Trustmark Corporation	$	(7,770,850	)	$	3,331,570
Mutual funds		4,868,544			2,899,081
Net appreciation (depreciation)
in fair value of investments	$	(2,902,306	)	$	6,230,651

The Plan provides participants the opportunity to annually elect whether cash dividends paid on employer stock will be invested in shares of employer stock within the individual participant’s account or be paid to the participant in cash.

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(4)

Tax Status

The Internal Revenue Service has determined and informed the Company by a letter dated November 19, 2001, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the plan administrator and the Plan’s tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC.

(5)

Related Parties

Trustmark National Bank serves as the investment advisor for the Performance Funds Trust Mutual Funds. For the years ended December 31, 2005 and 2004, dividends of $1,448,315 and $1,418,868 were received by the Plan from the Company.

(6)

Contingencies

The Company and its subsidiaries are parties to lawsuits and other claims that arise in the ordinary course of business. Some of the lawsuits assert claims related to various business activities; and some of the lawsuits allege substantial claims for damages. The cases are being vigorously contested. In the regular course of business, management evaluates estimated losses or costs related to litigation, and provision is made for anticipated losses whenever management believes that such losses are probable and can be reasonably estimated. At the present time, management believes, based on the advice of legal counsel, that the final resolution of pending legal proceedings will not have a material impact on the Company or the Plan’s consolidated financial statements.

(7)

Mergers With Other Plans

On March 1, 2005, assets totaling $5,403,429 from the Dan Bottrell Agency, Inc. Profit Sharing 401(k) Plan and Trust, the sponsor of which is a subsidiary of Trustmark National Bank, were merged into the Plan.

On December 19, 2005, assets totaling $134,748 and $352,644 from the Barret Bancorp 401(k) Plan and Somerville Bank & Trust Company 401(k) Plan, respectively, were merged into the Plan. The sponsors of these plans are subsidiaries of Trustmark National Bank.

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TRUSTMARK 401(k) PLAN

Plan Sponsor: Trustmark Corporation

Plan Sponsor: EIN 64-0471500

Plan Number: 002

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

December 31, 2005

				Current
	Identity of issuer	Description		value
	Money market account:
	Federated		Capital Preservation Fund	$	15,817,992
	Alliance Bernstein		Institutional Money Market Fund		1,358,315
	Gartmore		Money Market Institutional Fund		1,333,706
	Gartmore		Money Market Security Fund		579

	Fixed income mutual funds:
*	Performance Funds Trust		Short Term Government Income Fund		1,784,929
*	Performance Funds Trust		Intermediate Term Government Income Fund		2,110,053
	Dreyfus		GNMA Fund		445,982
	PIMCO		Total Return Fund		1,305,087

	Common stock fund:
*	Trustmark Corporation		Common Stock Fund		47,344,435

	Equity mutual funds:
*	Performance Funds Trust		Leader’s Equity Fund		1,258,987
*	Performance Funds Trust		Large-Cap Equity Fund		9,934,188
*	Performance Funds Trust		Mid-Cap Equity Fund		11,503,796
	AIM		Dynamics Fund		183,153
	Dreyfus		Mid-Cap Value Fund		4,215,512
	Franklin		Balance Sheet Investment Fund		3,923,351
	Franklin		Mutual Discovery Fund		3,213,156
	Gartmore		Investor Destinations Aggressive Services Fund		1,277,161
	Gartmore		Investor Destinations Conservative Services Fund		275,370
	Gartmore		Investor Destinations Moderate Services Fund		824,560
	Gartmore		Investor Destinations Moderately Aggressive Services Fund		1,584,088
	Gartmore		Investor Destinations Moderately Conservative Services Fund		312,205
	Goldman Sachs		CORE Small Cap Equity Fund		4,127,049
	Goldman Sachs		Growth Opportunity Fund		164,294
	JP Morgan		Mid-Cap Value A Fund		1,206,107
	Neuberger		High Income Bond Fund		191,735
	Neuberger		Neuberger Berman Genesis Trust		5,284,564
	Oppenheimer		Global Fund		2,012,879
	Van Kampen		Equity & Income Fund		5,653,857
	Van Kampen		Emerging Growth Fund		1,099,657
	T. Rowe Price		Preferred Growth Stock Fund		561,280
	Templeton		Foreign Fund		2,766,398
				$	133,074,425

* Denotes party-in-interest based on the following relationship:

Trustmark National Bank serves as investment advisor for Performance Funds Trust; Trustmark Corporation is the parent company of Trusmark National Bank.

See accompanying Report of Independent Registered Public Accounting Firm.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has duly caused this Annual Report to be signed on its behalf by the unersigned thereunto duly authorized.

Trustmark 401(k) Plan

Trustmark Corporation, Plan Administrator

/s/ Louis E. Greer

__________________________________________

Louis E. Greer

Chief Accounting Officer

June 28, 2006