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Company Overview - Trustmark (TRMK) is headquartered in Jackson and operates in the Finance sector, with a stock price change of 8.88% since the beginning of the year [3] - The company currently pays a dividend of $0.24 per share, resulting in a dividend yield of 2.49%, which is higher than the Banks - Southeast industry's yield of 2.34% and the S&P 500's yield of 1.5% [3] Dividend Performance - Trustmark's annualized dividend of $0.96 has increased by 4.3% from the previous year [4] - Over the past 5 years, the company has raised its dividend once on a year-over-year basis, with an average annual increase of 0.46% [4] - The current payout ratio is 27%, indicating that the company paid out 27% of its trailing 12-month earnings per share as dividends [4] Earnings Outlook - The Zacks Consensus Estimate for Trustmark's earnings in 2025 is $3.70 per share, with an expected increase of 21.71% from the previous year [5] - The company is positioned as an attractive dividend investment, supported by a strong Zacks Rank of 1 (Strong Buy) [6]

[Form 10-Q Cover Page](index=1&type=section&id=Form%2010-Q%20Cover%20Page) This section provides the official filing details for Trustmark Corporation's Quarterly Report on Form 10-Q for the period ended June 30, 2025 - Trustmark Corporation filed its Quarterly Report on Form 10-Q for the period ended June 30, 2025[2](index=2&type=chunk) Registrant Information | Field | Value | | :--- | :--- | | Registrant Name | Trustmark Corporation | | State of Incorporation | Mississippi | | Address | 248 East Capitol Street, Jackson, Mississippi 39201 | | Telephone Number | (601) 208-5111 | | Common Stock Trading Symbol | TRMK | | Exchange | Nasdaq Global Select Market | | Filer Status | Large accelerated filer | | Common Stock Outstanding (July 31, 2025) | 60,366,573 shares | [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section cautions readers about forward-looking statements, highlighting inherent risks that could cause actual financial and operational results to differ materially - The report contains forward-looking statements regarding future operating and financial performance, including net interest margin, credit quality, and business initiatives. These statements are subject to risks outlined in SEC filings, and actual results may differ materially[6](index=6&type=chunk)[7](index=7&type=chunk)[8](index=8&type=chunk) - Key risks include actions by the Federal Reserve impacting interest rates, local and national economic conditions, changes in nonperforming assets, unemployment levels, market volatility, demand for products, litigation, deposit retention, competition, accounting standard changes, technological changes, natural disasters, and policy effects[7](index=7&type=chunk) [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents Trustmark's unaudited consolidated financial statements and management's discussion and analysis of financial condition and results of operations [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents Trustmark Corporation's unaudited consolidated financial statements, including balance sheets, income statements, and cash flow statements, with detailed notes on accounting policies [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets show Trustmark's financial position at June 30, 2025, compared to December 31, 2024, indicating an increase in total assets and shareholders' equity, driven primarily by growth in loans held for investment and an increase in cash and due from banks Consolidated Balance Sheet Highlights (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Assets | $18,615,659 | $18,152,422 | $463,237 | 2.55% | | Total Liabilities | $16,544,870 | $16,190,095 | $354,775 | 2.19% | | Total Shareholders' Equity | $2,070,789 | $1,962,327 | $108,462 | 5.53% | | Cash and due from banks | $634,402 | $567,251 | $67,151 | 11.84% | | Loans held for investment (LHFI) | $13,464,780 | $13,089,942 | $374,838 | 2.86% | | Total deposits | $15,115,861 | $15,108,175 | $7,686 | 0.05% | | Noninterest-bearing deposits | $3,135,435 | $3,073,565 | $61,870 | 2.01% | | Interest-bearing deposits | $11,980,426 | $12,034,610 | $(54,184) | -0.45% | | Accumulated other comprehensive income (loss), net of tax | $(30,489) | $(83,659) | $53,170 | -63.56% | [Consolidated Statements of Income (Loss)](index=5&type=section&id=Consolidated%20Statements%20of%20Income%20%28Loss%29) The consolidated statements of income (loss) for the three and six months ended June 30, 2025, show a significant improvement in income from continuing operations compared to the prior year, primarily due to increased net interest income and a substantial recovery in noninterest income, which was negatively impacted by securities losses in 2024 Consolidated Statements of Income (Loss) Highlights (in thousands, except per share data) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Interest Income | $237,428 | $239,151 | $466,575 | $468,991 | | Total Interest Expense | $78,672 | $98,122 | $155,764 | $195,132 | | Net Interest Income | $158,756 | $141,029 | $310,811 | $273,859 | | Provision for credit losses (PCL), LHFI | $5,346 | $14,696 | $13,471 | $22,404 | | Total Noninterest Income (Loss) | $39,890 | $(141,286) | $82,474 | $(101,931) | | Total Noninterest Expense | $125,114 | $118,326 | $249,125 | $237,990 | | Income (Loss) From Continuing Operations | $55,841 | $(100,605) | $109,474 | $(62,432) | | Income From Discontinued Operations | $0 | $174,437 | $0 | $177,799 | | Net Income | $55,841 | $73,832 | $109,474 | $115,367 | | Basic EPS from continuing operations | $0.92 | $(1.64) | $1.81 | $(1.02) | | Basic EPS (Total) | $0.92 | $1.21 | $1.81 | $1.89 | | Diluted EPS (Total) | $0.92 | $1.20 | $1.80 | $1.88 | [Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) The consolidated statements of comprehensive income (loss) show a positive shift in other comprehensive income (loss) for the three and six months ended June 30, 2025, primarily driven by net unrealized gains on available-for-sale securities, contrasting with significant reclassification adjustments in the prior year due to securities sales Consolidated Statements of Comprehensive Income (Loss) Highlights (in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $55,841 | $73,832 | $109,474 | $115,367 | | Other comprehensive income (loss), net of tax | $18,213 | $135,597 | $53,170 | $128,166 | | Net unrealized holding gains (losses) arising during the period | $10,493 | $(4,321) | $34,943 | $(6,235) | | Reclassification adjustment for net (gains) losses realized in net income | $0 | $137,094 | $0 | $137,094 | | Comprehensive income (loss) | $74,054 | $209,429 | $162,644 | $243,533 | [Consolidated Statements of Changes in Shareholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) The consolidated statements of changes in shareholders' equity reflect an increase in total shareholders' equity for the six months ended June 30, 2025, primarily due to net income and positive other comprehensive income, partially offset by common stock dividends and repurchases Changes in Shareholders' Equity (in thousands) | Item | Balance, January 1, 2025 | Balance, June 30, 2025 | | :--- | :--- | :--- | | Total Shareholders' Equity | $1,962,327 | $2,070,789 | | Net income | $53,633 (Q1) + $55,841 (Q2) = $109,474 | | | Other comprehensive income (loss), net of tax | $34,957 (Q1) + $18,213 (Q2) = $53,170 | | | Common stock dividends paid | $(14,732) (Q1) + $(14,620) (Q2) = $(29,352) | | | Repurchase and retirement of common stock | $(15,014) (Q1) + $(11,010) (Q2) = $(26,024) | | | Shares Outstanding (June 30, 2025) | 60,401,684 | | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows show a significant shift from net cash used in operating activities in 2024 to net cash provided by operating activities in 2025, alongside a change from net cash provided by investing activities to net cash used, and a reversal in financing activities, reflecting strategic adjustments in investments and borrowings Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $120,026 | $(41,834) | | Net cash from investing activities | $(384,814) | $267,252 | | Net cash from financing activities | $331,939 | $(378,620) | | Net change in cash and cash equivalents | $67,151 | $(153,202) | | Cash and cash equivalents at end of period | $634,402 | $822,141 | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on Trustmark's business, accounting policies, discontinued operations, securities, loans, credit losses, and other key financial areas [Note 1 – Business, Basis of Financial Statement Presentation and Principles of Consolidation](index=12&type=section&id=Note%201%20%E2%80%93%20Business%2C%20Basis%20of%20Financial%20Statement%20Presentation%20and%20Principles%20of%20Consolidation) Trustmark Corporation, a bank holding company, provides financial services across multiple states. Its principal subsidiary, Trustmark National Bank, converted to Trustmark Bank (TB) and became a Mississippi-chartered banking corporation. The consolidated financial statements are prepared in conformity with GAAP for interim financial information, with all significant intercompany transactions eliminated - Trustmark Corporation operates as a financial services organization through its subsidiaries in Alabama, Florida, Georgia, Mississippi, Tennessee, and Texas[25](index=25&type=chunk) - On August 4, 2025, Trustmark National Bank converted to a Mississippi-chartered banking corporation and changed its name to Trustmark Bank (TB)[25](index=25&type=chunk) - The unaudited condensed consolidated financial statements are prepared in conformity with U.S. GAAP for interim financial information and should be read in conjunction with the 2024 Annual Report on Form 10-K[27](index=27&type=chunk) [Note 2 - Discontinued Operations](index=12&type=section&id=Note%202%20-%20Discontinued%20Operations) On May 31, 2024, Trustmark completed the sale of its insurance subsidiary, Fisher Brown Bottrell Insurance, Inc. (FBBI), for approximately $336.9 million in cash, resulting in a pre-tax net gain of $228.3 million. The financial results of FBBI prior to the sale are presented as discontinued operations in the consolidated financial statements - Trustmark completed the sale of Fisher Brown Bottrell Insurance, Inc. (FBBI) on May 31, 2024, for approximately **$336.9 million** in cash[29](index=29&type=chunk) - The sale resulted in a pre-tax net gain of **$228.3 million**[29](index=29&type=chunk) Financial Information from Discontinued Operations (in thousands) | Item | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total noninterest income | $240,533 | $256,527 | | Total noninterest expense | $7,893 | $19,375 | | Income from discontinued operations before income taxes | $232,640 | $237,152 | | Income from discontinued operations | $174,437 | $177,799 | [Note 3 – Securities Available for Sale and Held to Maturity](index=13&type=section&id=Note%203%20%E2%80%93%20Securities%20Available%20for%20Sale%20and%20Held%20to%20Maturity) This note details Trustmark's securities portfolio, distinguishing between available-for-sale and held-to-maturity securities. As of June 30, 2025, the portfolio showed net unrealized gains for available-for-sale securities, a significant improvement from net unrealized losses at December 31, 2024, with no credit losses recognized on either category. The report also highlights a portfolio restructuring in Q2 2024 and a credit rating downgrade for U.S. Treasury securities in Q2 2025 Securities Available for Sale and Held to Maturity (in thousands) | Category | June 30, 2025 (Amortized Cost) | June 30, 2025 (Fair Value) | Dec 31, 2024 (Amortized Cost) | Dec 31, 2024 (Fair Value) | | :--- | :--- | :--- | :--- | :--- | | Securities Available for Sale | $1,762,504 | $1,782,092 | $1,719,537 | $1,692,534 | | Securities Held to Maturity | $1,290,572 | $1,247,682 | $1,335,385 | $1,259,107 | | Total | $3,053,076 | $3,029,774 | $3,054,922 | $2,951,641 | - At June 30, 2025, securities available for sale had gross unrealized gains of **$40.8 million** and gross unrealized losses of **$21.2 million**, resulting in a net unrealized gain[32](index=32&type=chunk) - At December 31, 2024, securities available for sale had gross unrealized gains of **$3.0 million** and gross unrealized losses of **$30.0 million**, resulting in a net unrealized loss[33](index=33&type=chunk) - The net unamortized, unrealized loss on transferred securities (from AFS to HTM in 2022) included in AOCI was **$41.5 million** at June 30, 2025, down from **$46.6 million** at December 31, 2024[33](index=33&type=chunk) - Moody's downgraded the U.S. credit rating from Aaa to Aa1 during Q2 2025, impacting the credit rating of a significant portion of Trustmark's investment portfolio[288](index=288&type=chunk) [ACL on Securities](index=14&type=section&id=ACL%20on%20Securities) Trustmark evaluates securities for credit losses quarterly, performing a discounted cash flow (DCF) analysis if fair value is less than amortized cost. As of June 30, 2025, and December 31, 2024, no credit losses were identified or recognized for either available-for-sale or held-to-maturity securities - Trustmark evaluates securities for credit losses quarterly using a DCF analysis if fair value is below amortized cost[34](index=34&type=chunk) - No credit loss was recognized on any securities available for sale at June 30, 2025, or December 31, 2024[35](index=35&type=chunk) - No securities held to maturity were identified with potential for credit loss exposure at June 30, 2025, or December 31, 2024[37](index=37&type=chunk) [Securities Gains and Losses](index=17&type=section&id=Securities%20Gains%20and%20Losses) Realized gains and losses on securities are determined using the specific identification method. For the three and six months ended June 30, 2025, there were no gross realized gains or losses. In contrast, Q2 2024 saw a significant portfolio restructuring, with $1.561 billion of available-for-sale securities sold, generating a loss of $182.8 million, and proceeds used to purchase higher-yielding securities - No gross realized gains or losses on available-for-sale securities for the three and six months ended June 30, 2025[41](index=41&type=chunk)[42](index=42&type=chunk) - During Q2 2024, Trustmark restructured its investment securities portfolio by selling **$1.561 billion** of available-for-sale securities, resulting in a **$182.8 million** loss (**$137.1 million**, net of taxes)[42](index=42&type=chunk) - Proceeds from the Q2 2024 sale were used to purchase **$1.378 billion** of available-for-sale securities with an average yield of **4.85%**[42](index=42&type=chunk) [Securities Pledged](index=17&type=section&id=Securities%20Pledged) Securities with a carrying value of $1.783 billion were pledged at June 30, 2025, to collateralize public deposits and securities sold under repurchase agreements, a decrease from $1.910 billion at December 31, 2024. None of these securities were pledged under the Federal Reserve Discount Window program Securities Pledged (in billions) | Date | Carrying Value of Pledged Securities | | :--- | :--- | | June 30, 2025 | $1.783 | | December 31, 2024 | $1.910 | - Pledged securities collateralize public deposits and securities sold under repurchase agreements[43](index=43&type=chunk) - No securities were pledged under the Federal Reserve Discount Window program at either date[43](index=43&type=chunk) [Contractual Maturities](index=17&type=section&id=Contractual%20Maturities) The contractual maturities of securities available for sale and held to maturity at June 30, 2025, show a significant portion of the portfolio, particularly mortgage-backed securities, extending beyond one year. Expected maturities may differ from contractual maturities due to prepayment rights Securities by Contractual Maturity (June 30, 2025, in thousands) | Maturity Period | Securities Available for Sale (Amortized Cost) | Securities Available for Sale (Estimated Fair Value) | Securities Held to Maturity (Amortized Cost) | Securities Held to Maturity (Estimated Fair Value) | | :--- | :--- | :--- | :--- | :--- | | Due in one year or less | $33,868 | $34,004 | $0 | $0 | | Due after one year through five years | $49,590 | $50,196 | $30,226 | $30,291 | | Due after five years through ten years | $195,861 | $197,279 | $0 | $0 | | Mortgage-backed securities | $1,483,185 | $1,500,613 | $1,260,346 | $1,217,391 | | Total | $1,762,504 | $1,782,092 | $1,290,572 | $1,247,682 | - Expected maturities may differ from contractual maturities due to borrowers' rights to call or prepay obligations[44](index=44&type=chunk) [Note 4 – LHFI and ACL, LHFI](index=18&type=section&id=Note%204%20%E2%80%93%20LHFI%20and%20ACL%2C%20LHFI) This note provides a comprehensive overview of Trustmark's Loans Held for Investment (LHFI) and the Allowance for Credit Losses (ACL) on LHFI. It details loan compositions, credit quality indicators, modification activities, and the methodology for estimating credit losses, highlighting an increase in LHFI and ACL, primarily due to loan growth and macroeconomic forecast changes, alongside a decrease in nonaccrual LHFI in some categories Loans Held for Investment (LHFI) Composition (in thousands) | Loan Category | June 30, 2025 | % of Total | December 31, 2024 | % of Total | | :--- | :--- | :--- | :--- | :--- | | Loans secured by real estate | $6,647,275 | 49.37% | $6,870,006 | 52.49% | | Other loans secured by real estate | $3,162,583 | 23.49% | $3,128,897 | 23.90% | | Commercial and industrial loans | $1,832,295 | 13.61% | $1,840,722 | 14.06% | | Consumer loans | $152,921 | 1.13% | $156,569 | 1.19% | | State and other political subdivision loans | $961,251 | 7.14% | $969,836 | 7.41% | | Other commercial loans and leases | $708,455 | 5.26% | $589,012 | 4.50% | | **Total LHFI** | **$13,464,780** | **100.00%** | **$13,089,942** | **100.00%** | | Less ACL, LHFI | $168,237 | | $160,270 | | | **Net LHFI** | **$13,296,543** | | **$12,929,672** | | - LHFI increased by **$374.8 million (2.9%)** from December 31, 2024, to June 30, 2025, primarily due to net growth in real estate-secured loans and other commercial loans and leases[46](index=46&type=chunk)[291](index=291&type=chunk) - The ACL on LHFI increased by **$8.0 million (5.0%)** to **$168.2 million** at June 30, 2025, compared to December 31, 2024, primarily due to loan growth and changes in macroeconomic forecasts[111](index=111&type=chunk)[311](index=311&type=chunk) - The ACL to total LHFI ratio was **1.25%** at June 30, 2025, up from **1.22%** at December 31, 2024[311](index=311&type=chunk) [Loan Concentrations](index=18&type=section&id=Loan%20Concentrations) Trustmark's loan portfolio is primarily concentrated in its six key market regions: Alabama, Florida, Georgia, Mississippi, Tennessee, and Texas. The collectability of these loans is susceptible to changes in market conditions within these geographic areas - Trustmark's geographic loan distribution is concentrated primarily in Alabama, Florida, Georgia, Mississippi, Tennessee, and Texas[47](index=47&type=chunk) - The collectability of a substantial portion of these loans is susceptible to changes in market conditions in these regions[47](index=47&type=chunk) [Nonaccrual and Past Due LHFI](index=18&type=section&id=Nonaccrual%20and%20Past%20Due%20LHFI) Nonaccrual LHFI remained relatively stable at $81.0 million at June 30, 2025, compared to $80.1 million at December 31, 2024. Loans past due 90 days or more still accruing interest decreased slightly to $3.9 million from $4.1 million over the same period. No material interest income was recognized on nonaccrual LHFI Nonaccrual and Past Due LHFI (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Nonaccrual LHFI | $81,000 | $80,109 | | Loans Past Due 90 Days or More Still Accruing | $3,854 | $4,092 | - No material interest income was recognized on nonaccrual LHFI for the periods ended June 30, 2025 and 2024[48](index=48&type=chunk) [Modified LHFI](index=20&type=section&id=Modified%20LHFI) Trustmark modifies loans for borrowers experiencing financial difficulties through payment delays, term extensions, or interest rate reductions. For the six months ended June 30, 2025, total modified LHFI increased to $35.0 million, primarily through term extensions, compared to $1.9 million in the prior year. Payment defaults on modified loans in the commercial and industrial portfolio were $18.4 million for the six months ended June 30, 2025 Modified LHFI to Borrowers in Financial Difficulty (in thousands) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Modified LHFI | $19,830 | $493 | $34,958 | $1,891 | | % of Total Class of Loan (6 Months Ended June 30, 2025) | 0.26% | | | | | Payment Delay (6 Months Ended June 30, 2025) | $12,847 | | | | | Term Extension (6 Months Ended June 30, 2025) | $22,111 | | | | - Payment defaults during the six months ended June 30, 2025, on loans modified in the previous twelve months, totaled **$18.4 million** in the commercial and industrial portfolio (payment delay modifications) and **$38 thousand** in other secured by 1-4 family residential properties (term extension modifications)[55](index=55&type=chunk) - Trustmark had **$256 thousand** of unused commitments on modified loans to borrowers experiencing financial difficulty at June 30, 2025, compared to none at June 30, 2024[54](index=54&type=chunk) [Collateral-Dependent Loans](index=23&type=section&id=Collateral-Dependent%20Loans) Collateral-dependent loans, where repayment relies substantially on collateral sale due to borrower financial difficulty, totaled $39.5 million at June 30, 2025, an increase from $37.1 million at December 31, 2024. These loans are secured by various collateral types, including real estate, vehicles, and miscellaneous assets Collateral-Dependent Loans by Collateral Type (in thousands) | Collateral Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Real Estate | $17,388 | $13,741 | | Vehicles | $1,971 | $1,818 | | Miscellaneous | $20,141 | $21,581 | | Total | $39,500 | $37,140 | - A loan is collateral dependent when the borrower is experiencing financial difficulty and repayment is expected substantially through collateral sale[59](index=59&type=chunk) - During Q2 2025, one commercial and industrial relationship experienced a decrease in collateral value[59](index=59&type=chunk) [Credit Quality Indicators](index=24&type=section&id=Credit%20Quality%20Indicators) Trustmark monitors LHFI credit quality using six key ratios and a ten-grade internal risk rating system for commercial loans, ranging from negligible loss expectation (RR 1-6) to uncollectible (RR 10). Criticized loans include Special Mention (RR 7), Substandard (RR 8), Doubtful (RR 9), and Loss (RR 10). Regular reviews are conducted by various committees and departments to assess credit quality and adherence to policy - Trustmark's LHFI credit quality indicators focus on total classified outstanding, total criticized outstanding, nonperforming loans, nonperforming assets, delinquencies, and net loan losses[60](index=60&type=chunk) - Commercial loans are graded using a ten-tier credit risk rating system (RR 1-10), where RR 7-10 are considered criticized loans and RR 8-10 are classified loans[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) - The Credit Quality Review Committee meets monthly to review loans of **$100 thousand** or more that are delinquent or on nonaccrual, making recommendations on risk ratings, accrual status, and charge-offs[65](index=65&type=chunk) Commercial LHFI by Credit Quality Indicator (June 30, 2025, in thousands) | Loan Class | Pass - RR 1-6 | Special Mention - RR 7 | Substandard - RR 8 | Doubtful - RR 9 | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Construction, land development and other land | $494,773 | $3,115 | $3,365 | $0 | $501,253 | | Other secured by 1-4 family residential properties | $133,499 | $49 | $2,933 | $0 | $136,481 | | Secured by nonfarm, nonresidential properties | $3,261,559 | $92,214 | $125,152 | $7 | $3,478,932 | | Other real estate secured | $1,724,147 | $32,107 | $161,442 | $0 | $1,917,696 | | Other construction | $771,369 | $5,121 | $17,820 | $0 | $794,310 | | Commercial and industrial loans | $1,767,301 | $27,490 | $37,347 | $157 | $1,832,295 | | State and other political subdivision loans | $961,251 | $0 | $0 | $0 |

Group 1 - Trustmark Corporation (NASDAQ: TRMK) has shown continued growth in deposits and improving financial performance as of September 2023 [1] - The company is part of a sector focused on cash flow generation, particularly in oil and natural gas, which presents value and growth prospects [1] Group 2 - Subscribers to the service have access to a stock model account with over 50 stocks and in-depth cash flow analyses of exploration and production firms [2] - The service includes live chat discussions about the oil and gas sector, enhancing community engagement and information sharing [2]

Core Viewpoint - Trustmark Corporation held its Q2 2025 earnings call, indicating a focus on financial performance and strategic direction for the upcoming period [1][2]. Group 1: Company Overview - Trustmark Corporation is represented by key executives including Duane Arthur Dewey (President and CEO), F. Joseph Rein (Executive VP & Director of Corporate Strategy), and other senior officers [1][5]. - The earnings call is part of the company's regular communication with investors, providing insights into its financial results and future outlook [2][3]. Group 2: Financial Communication - The company has made available its second quarter earnings release and a slide presentation on its Investor Relations website, emphasizing transparency and accessibility of information for stakeholders [3]. - Management may discuss forward-looking statements during the call, which are subject to risks and uncertainties that could affect actual results [3].

Trustmark (TRMK) Q2 2025 Earnings Call July 23, 2025 09:30 AM ET Company ParticipantsF. Joseph Rein - EVP, Assistant Secretary and Director - Corporate Strategy & Board GovernanceDuane Dewey - President & CEOCatherine Mealor - Managing DirectorRobert Harvey - Executive VP and Chief Credit & Operations OfficerThomas Owens - EVP & CFOTim Mitchell - Senior Equity Research AssociateChristopher Marinac - Director - ResearchGeorge Chambers - EVP & Chief Accounting OfficerFeddie Strickland - DirectorOperatorGood m ...

Financial Data and Key Metrics Changes - Loans held for investment increased by $223 million or 1.7% linked quarter and $374.8 million or 2.9% year to date [4] - Deposit base grew by $35 million during the quarter, with personal and commercial deposits totaling $13 billion at June 30, an increase of $103.8 million or 0.8% from the prior quarter [5] - Net income for the second quarter was $55.8 million, representing fully diluted EPS of $0.92, up 4.5% from the prior quarter [5] - Return on average assets was 1.21% and return on average tangible equity was 13.13% in the second quarter [5] - Net interest income expanded by 4.3% to $161.4 million, producing a net interest margin of 3.81%, an increase of six basis points from the prior quarter [5] - Non-interest income totaled $39.9 million, unchanged linked quarter [6] - Non-interest expense increased by $1.1 million or 0.9% linked quarter [6] - Non-performing assets declined by $5 million or 5.3% linked quarter [7] - CET1 ratio increased by seven basis points to 11.7% [8] Business Line Data and Key Metrics Changes - Growth in loans was diversified across one to four family mortgage loans, other loans and leases, and commercial and industrial loans [4] - Non-interest income was positively impacted by wealth management and brokerage business due to improved financial markets [55] Market Data and Key Metrics Changes - The company is monitoring the impact of tariffs and other administrative policies on its customer base, but has not seen a significant impact at this point [11] Company Strategy and Development Direction - The company is focusing on organic loan growth, potential market expansion, and M&A opportunities [13] - The company is actively recruiting talent in key growth markets such as Houston, Birmingham, Atlanta, and South Alabama [34] - The company is interested in participating in M&A activity but will approach it conservatively [35] Management's Comments on Operating Environment and Future Outlook - The company expects loans held for investment to increase in mid-single digits for the full year, revised upward from low single-digit growth [11] - The net interest margin guidance has been tightened to a range of 3.77% to 3.83% for the full year [12] - The provision for credit losses is expected to trend lower compared to the full year 2024 [12] Other Important Information - The company repurchased $11 million of common stock during the quarter, with a remaining repurchase authority of $74 million for the year [9] - The quarterly cash dividend declared was $0.24 per share [10] Q&A Session Summary Question: What is driving the increase in growth guidance to mid-single digits? - Management indicated it is a combination of good production in non-CRE categories and delays in scheduled maturities for the CRE book [17][18] Question: Is there potential for further profitability improvement? - Management believes there is upside in profitability due to operating leverage and potential net interest margin expansion [20][22] Question: Are there any rate cut assumptions in the NIM guidance? - Management has a baseline forecast that includes a Fed rate cut in September and December, which may impact net interest margin [30] Question: What are the company's thoughts on M&A versus organic growth? - Management is focusing on both organic growth and M&A opportunities, with a conservative approach to M&A [34][35] Question: How does the recent guidance revision impact reserves? - Management noted a slight decrease in the reserve percentage and a reduction in criticized and classified loans, which positively impacts provisioning [42][46]

Financial Performance - Net income totaled $55.8 million, representing fully diluted EPS of $0.92[5] - Revenue in the second quarter totaled $198.6 million, a $4.0 million, or 2.1%, increase from the prior quarter[5] - Net interest income (FTE) totaled $161.4 million, an increase of $6.7 million, or 4.3%, linked-quarter and resulted in a net interest margin of 3.81%[5] Balance Sheet - Loans held for investment (HFI) increased $223.3 million, or 1.7%, linked-quarter to reach $13.5 billion[5,6] - Total deposits increased $35.2 million, or 0.2%, linked-quarter to reach $15.1 billion[5,6] Credit Quality - Nonperforming assets declined $5.0 million, or 5.3%, from the prior quarter[5] - Net charge-offs totaled $4.1 million, representing 0.12% of average loans[5] - Allowance for credit losses (ACL) represented 1.25% of loans HFI, down 1 basis point linked-quarter[5] Capital Management - The company maintained a strong capital position with a CET1 ratio of 11.70% and a total risk-based capital ratio of 14.15%[5] - The company repurchased $11.0 million, or approximately 341 thousand common shares during the second quarter[5]

[Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Trustmark Corporation reported strong Q2 2025 financial results, driven by diversified growth, stable credit, and robust fee income Q2 2025 Key Financial Results | Metric | Value | | :--- | :--- | | Net Income | $55.8 million | | Diluted EPS | $0.92 | | Return on Average Tangible Equity | 13.13% | | Return on Average Assets | 1.21% | | Quarterly Cash Dividend | $0.24 per share | - The President and CEO highlighted building momentum, successful expansion of cost-effective core deposit relationships, and strong performance in mortgage banking and wealth management as key drivers of the solid financial results[3](index=3&type=chunk) Q2 2025 Performance Summary (Linked-Quarter) | Metric | Value | Change | | :--- | :--- | :--- | | Loans HFI | $13.5 billion | +1.7% | | Deposits | $15.1 billion | +0.2% | | Cost of Total Deposits | 1.80% | -3 bps | | Total Revenue | $198.6 million | +2.1% | | Net Interest Income (FTE) | $161.4 million | +4.3% | | Net Interest Margin | 3.81% | +6 bps | | Noninterest Expense | $125.1 million | +0.9% | [Financial Condition Analysis](index=1&type=section&id=Financial%20Condition%20Analysis) The company's financial condition reflects robust balance sheet management, stable credit quality, and strong capital adequacy [Balance Sheet Management](index=1&type=section&id=Balance%20Sheet%20Management) Balance sheet management as of June 30, 2025, shows growth in loans and deposits, improved deposit costs, and strong capital position Loan Growth (as of June 30, 2025) | Metric | Value | Linked-Quarter Change | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Loans HFI | $13.5 billion | +$223.3 million (+1.7%) | +$309.4 million (+2.4%) | Deposit Composition (as of June 30, 2025) | Metric | Value | Linked-Quarter Change | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Total Deposits | $15.1 billion | +$35.2 million (+0.2%) | -$347.0 million (-2.2%) | | Noninterest-bearing Deposits | 20.7% of total | - | - | | Cost of Total Deposits | 1.80% | -3 bps | - | - The company maintained a strong capital position with a Common Equity Tier 1 (CET1) ratio of **11.70%** and a total risk-based capital ratio of **14.15%**[7](index=7&type=chunk) - Trustmark repurchased **$11.0 million** (approx. **341 thousand shares**) of its common stock in Q2 2025, bringing the total for the first six months to **$26.0 million** (approx. **764 thousand shares**) under its **$100.0 million** repurchase program[8](index=8&type=chunk) [Credit Quality](index=2&type=section&id=Credit%20Quality) Credit quality remained stable in Q2 2025, marked by declining nonperforming assets and a prudent allowance for credit losses Nonperforming Assets (as of June 30, 2025) | Metric | Value | Linked-Quarter Change | | :--- | :--- | :--- | | Nonaccrual Loans | $81.0 million | -$5.6 million | | Other Real Estate | $9.0 million | +$0.6 million | | Total Nonperforming Assets | $90.0 million | -$5.0 million (-5.3%) | - The provision for credit losses for loans HFI was **$5.3 million**, primarily due to loan growth and macroeconomic forecast changes, while the provision for off-balance sheet exposures was a negative **$670 thousand**, resulting in a total provision of **$4.7 million**[10](index=10&type=chunk) Allowance for Credit Losses (ACL) (as of June 30, 2025) | Metric | Value | | :--- | :--- | | Total ACL on Loans HFI | $168.2 million | | ACL as % of Total Loans HFI | 1.25% | | ACL as % of Nonaccrual Loans (excl. individually analyzed) | 272.20% | - Net charge-offs for the quarter totaled **$4.1 million**, representing **0.12%** of average loans. This included **$2.7 million** from three individually analyzed credits that were reserved for in prior periods[17](index=17&type=chunk) [Results of Operations Analysis](index=2&type=section&id=Results%20of%20Operations%20Analysis) Operational results for Q2 2025 show revenue growth driven by net interest income, despite a slight increase in noninterest expense [Revenue Generation](index=2&type=section&id=Revenue%20Generation) Revenue generation in Q2 2025 was strong, driven by increased net interest income and improved net interest margin Q2 2025 Revenue Components (Linked-Quarter Change) | Metric | Value | Change | | :--- | :--- | :--- | | Total Revenue | $198.6 million | +2.1% | | Net Interest Income (FTE) | $161.4 million | +4.3% | | Noninterest Income | $39.9 million | -6.3% | - The net interest margin expanded to **3.81%**, up **6 basis points** from the prior quarter, primarily due to higher yields on the loan portfolio and a decrease in the cost of interest-bearing liabilities[13](index=13&type=chunk) - Excluding a **$2.4 million** gain on a bank facility sale in Q1 and a small net loss in Q2, noninterest income was unchanged linked-quarter. Increases in bank card fees and wealth management were offset by declines in other income and mortgage banking[14](index=14&type=chunk) Q2 2025 Mortgage and Wealth Management | Metric | Value | Linked-Quarter Change | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Mortgage Loan Production | $426.3 million | +33.7% | +12.3% | | Mortgage Banking Revenue | $8.6 million | -1.9% | +$4.4 million | | Wealth Management Revenue | $9.6 million | +1.0% | -0.6% | [Noninterest Expense](index=4&type=section&id=Noninterest%20Expense) Noninterest expense for Q2 2025 increased slightly, primarily driven by higher services and fees, partially offset by seasonal salary adjustments Q2 2025 Noninterest Expense Components (Linked-Quarter Change) | Expense Category | Value | Change | | :--- | :--- | :--- | | **Total Noninterest Expense** | **$125.1 million** | **+0.9%** | | Salaries and Employee Benefits | $68.3 million | -0.3% | | Services and Fees | $27.0 million | +2.9% | | Other Expense | $16.1 million | +3.4% | - The linked-quarter decline in salaries and benefits was due to a seasonal decrease in payroll taxes and stock compensation, partially offset by higher commissions. The increase in other expense was driven by higher loan and miscellaneous expenses[20](index=20&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements provide a detailed overview of the company's balance sheet, income, credit quality, and key financial ratios [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheet as of June 30, 2025, shows growth in total assets, loans, deposits, and shareholders' equity Selected Period End Balance Sheet Data ($ in thousands) | Account | 6/30/2025 | 3/31/2025 | 6/30/2024 | | :--- | :--- | :--- | :--- | | Total Assets | $18,615,659 | $18,296,203 | $18,452,487 | | Net LHFI | $13,296,543 | $13,074,459 | $13,000,733 | | Total Deposits | $15,115,861 | $15,080,704 | $15,462,888 | | Total Shareholders' Equity | $2,070,789 | $2,021,227 | $1,879,141 | [Consolidated Income Statements](index=9&type=section&id=Consolidated%20Income%20Statements) The consolidated income statement for Q2 2025 shows increased net income and diluted EPS, driven by higher net interest income Selected Quarterly Income Statement Data ($ in thousands) | Account | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income-FTE | $161,408 | $154,739 | $144,333 | | Provision for Credit Losses (Total) | $4,676 | $5,294 | $19,629 | | Total Noninterest Income | $39,890 | $42,584 | $(141,286) | | Total Noninterest Expense | $125,114 | $124,011 | $118,326 | | Net Income | $55,841 | $53,633 | $73,832 | | Diluted EPS | $0.92 | $0.88 | $1.20 | [Credit Quality Data](index=10&type=section&id=Credit%20Quality%20Data) Credit quality data as of June 30, 2025, indicates a decrease in nonperforming assets and a stable allowance for credit losses Nonperforming Assets ($ in thousands) | Category | 6/30/2025 | 3/31/2025 | 6/30/2024 | | :--- | :--- | :--- | :--- | | Total Nonaccrual LHFI | $81,000 | $86,620 | $44,292 | | Total Other Real Estate | $8,972 | $8,348 | $6,586 | | **Total Nonperforming Assets** | **$89,972** | **$94,968** | **$50,878** | ACL LHFI Rollforward for Q2 2025 ($ in thousands) | Item | Amount | | :--- | :--- | | Beginning Balance (3/31/2025) | $167,010 | | PCL, LHFI | $5,346 | | Net Charge-offs | $(4,119) | | **Ending Balance (6/30/2025)** | **$168,237** | [Key Financial Ratios](index=15&type=section&id=Key%20Financial%20Ratios) Key financial ratios for Q2 2025 reflect strong profitability, an expanded net interest margin, and robust capital adequacy Selected Financial Ratios | Ratio | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Return on Average Tangible Equity | 13.13% | 13.13% | 21.91% | | Return on Average Assets | 1.21% | 1.19% | 1.58% | | Net Interest Margin - FTE | 3.81% | 3.75% | 3.38% | | Efficiency Ratio | 61.24% | 61.77% | 63.81% | | Common Equity Tier 1 Capital Ratio | 11.70% | 11.63% | 10.92% | | Tangible Book Value per Share | $28.74 | $27.78 | $25.23 | [Notes to Consolidated Financials](index=16&type=section&id=Notes%20to%20Consolidated%20Financials) Notes to the consolidated financials provide additional details on significant transactions, portfolio composition, yields, and non-GAAP measures [Note 1: Significant Non-Routine Transactions](index=16&type=section&id=Note%201%20-%20Significant%20Non-Routine%20Transactions) Q2 2024 included significant non-routine transactions such as the sale of an insurance subsidiary, securities portfolio restructuring, and mortgage loan sales - Key non-routine transactions in Q2 2024 included: - Sale of FBBI subsidiary, resulting in a gain of **$228.3 million** (**$171.2 million** net of tax) - Restructuring of the investment portfolio by selling **$1.561 billion** of securities, generating a loss of **$182.8 million** - Sale of a **$56.2 million** portfolio of delinquent 1-4 family mortgage loans, resulting in a loss of **$13.4 million** - A gain of **$8.1 million** from tendering Visa B-1 shares in an exchange offer[52](index=52&type=chunk) [Note 2: Securities Portfolio](index=16&type=section&id=Note%202%20-%20Securities%20Portfolio) As of June 30, 2025, the securities portfolio totaled $3.07 billion, focused on high-quality U.S. Treasury and GSE-backed obligations Securities Portfolio Summary (June 30, 2025) | Category | Fair Value / Amortized Cost | | :--- | :--- | | Total Securities Available for Sale | $1,782,092 thousand | | Total Securities Held to Maturity | $1,290,572 thousand | - Management emphasizes a focus on asset quality, with **100%** of the securities portfolio invested in U.S. Treasury securities and GSE-backed obligations. The company holds no securities collateralized by sub-prime assets[51](index=51&type=chunk) [Note 3: Loan Portfolio Composition](index=17&type=section&id=Note%203%20-%20Loan%20Portfolio%20Composition) As of June 30, 2025, the $13.46 billion LHFI portfolio is diversified by loan type and geography LHFI by Type (June 30, 2025, $ in thousands) | Loan Type | Amount | | :--- | :--- | | Secured by nonfarm, nonresidential properties | $3,478,932 | | Secured by 1-4 family residential properties | $3,057,362 | | Other real estate secured | $1,918,341 | | Commercial and industrial loans | $1,832,295 | | Construction, land development and other land loans | $1,355,223 | | **Total LHFI** | **$13,464,780** | - The loan portfolio is geographically diversified, with the largest concentration in the Mississippi region (**$6.80 billion**), followed by Alabama (**$3.08 billion**) and Texas (**$1.75 billion**)[53](index=53&type=chunk) [Note 4: Yields on Earning Assets and Interest-Bearing Liabilities](index=18&type=section&id=Note%204%20-%20Yields%20on%20Earning%20Assets%20and%20Interest-Bearing%20Liabilities) Net interest margin expanded in Q2 2025 due to higher loan yields and lower costs of interest-bearing deposits Key Yields and Costs (Quarter Ended) | Metric | 6/30/2025 | 3/31/2025 | | :--- | :--- | :--- | | Yield on LHFI & LHFS | 6.19% | 6.15% | | Cost of Interest-bearing Deposits | 2.28% | 2.30% | | Cost of Total Deposits | 1.80% | 1.83% | | **Net Interest Margin** | **3.81%** | **3.75%** | - The **six basis point** increase in net interest margin from Q1 2025 was primarily driven by the increased yield on the loan portfolio and a decrease in the cost of interest-bearing liabilities[57](index=57&type=chunk) [Note 5: Mortgage Banking](index=20&type=section&id=Note%205%20-%20Mortgage%20Banking) Q2 2025 mortgage banking revenue was $8.6 million, with hedging strategies for MSRs resulting in a net negative ineffectiveness Components of Mortgage Banking Revenues for Q2 2025 ($ in thousands) | Component | Amount | | :--- | :--- | | Mortgage servicing income, net | $7,142 | | Gain on sales of loans, net | $5,597 | | Change in fair value-MSR from runoff | $(3,596) | | Net negative hedge ineffectiveness | $(541) | | **Mortgage banking, net** | **$8,602** | - Trustmark uses a portfolio of exchange-traded derivatives to offset changes in the fair value of MSRs. The ineffectiveness of this hedge is measured by comparing the change in value of hedge instruments to the change in the fair value of the MSR asset[58](index=58&type=chunk) [Note 6: Other Noninterest Income and Expense](index=21&type=section&id=Note%206%20-%20Other%20Noninterest%20Income%20and%20Expense) Q2 2025 other noninterest income totaled $2.3 million, while other noninterest expense was $16.1 million, including FDIC assessments Other Noninterest Income for Q2 2025 ($ in thousands) | Component | Amount | | :--- | :--- | | Partnership amortization for tax credit purposes | $(2,137) | | Increase in life insurance cash surrender value | $1,911 | | Other miscellaneous income | $2,537 | | **Total other, net** | **$2,311** | Other Noninterest Expense for Q2 2025 ($ in thousands) | Component | Amount | | :--- | :--- | | Loan expense | $3,377 | | FDIC assessment expense | $4,064 | | Other miscellaneous expense | $8,473 | | **Total other expense** | **$16,105** | [Note 7: Non-GAAP Financial Measures](index=21&type=section&id=Note%207%20-%20Non-GAAP%20Financial%20Measures) Trustmark uses non-GAAP measures like tangible common equity and PPNR to assess core performance and capital adequacy, excluding non-routine items - The company uses tangible common equity measures because they reflect capital available to withstand unexpected market conditions and allow for comparison with other banking organizations, particularly those with significant goodwill from acquisitions[62](index=62&type=chunk)[63](index=63&type=chunk) Key Non-GAAP Metrics (as of or for Q2 2025) | Metric | Value | | :--- | :--- | | Tangible Book Value per Share | $28.74 | | Pre-Provision Net Revenue (PPNR) | $73.5 million | | Efficiency Ratio | 61.24% | - The company provides adjusted net income and related ratios to exclude significant non-routine items, such as the securities portfolio restructuring and asset sales that occurred in Q2 2024, to present a clearer view of core performance[69](index=69&type=chunk)

Summary of Trustmark's Upcoming Earnings Report Core Viewpoint - Trustmark (TRMK) is expected to report quarterly earnings of $0.86 per share, reflecting a year-over-year increase of 30.3%, with revenues projected at $201.33 million, an 8.3% increase from the previous year [1]. Earnings Projections - There have been no revisions in the consensus EPS estimate over the last 30 days, indicating stability in analysts' forecasts [1][2]. Key Metrics Forecast - Analysts predict the 'Efficiency Ratio' to reach 62.7%, down from 63.8% in the same quarter last year [4]. - The estimated 'Total nonaccrual LHFI' is projected at $87.77 million, significantly higher than the $44.29 million reported in the same quarter last year [4]. - 'Total nonperforming assets' are expected to be $98.06 million, compared to $50.88 million a year ago [5]. - 'Average Balances - Total earning assets' are forecasted to be $16.88 billion, slightly lower than the $17.19 billion from the previous year [5]. - 'Net Interest Income' is anticipated to reach $156.91 million, up from $141.03 million in the same quarter last year [6]. - 'Net Interest Income (FTE)' is projected at $159.15 million, compared to $144.33 million a year ago [6]. Stock Performance - Trustmark shares have returned +13.1% over the past month, outperforming the Zacks S&P 500 composite's +5.4% change, indicating a positive market outlook [6].