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
- 1 -


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.

- 2 -


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.


- 3 -


 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.
- 4 -

 
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.
- 5 -

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.
- 6 -

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.
- 7 -


(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.
- 8 -

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.
- 9 -

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