TRMK Q2 Deep Dive: Loan Growth and Expense Controls Drive Profitability Gains

July 25, 2025 at 09:23 AM EDT

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Regional banking company Trustmark (NASDAQ: TRMK) met Wall Street’s revenue expectations in Q2 CY2025, with sales up 77,394% year on year to $198.6 million. Its non-GAAP profit of $0.92 per share was 6% above analysts’ consensus estimates.

Is now the time to buy TRMK? Find out in our full research report (it’s free).

Trustmark (TRMK) Q2 CY2025 Highlights:

Revenue: $198.6 million vs analyst estimates of $197.8 million (77,394% year-on-year growth, in line)
Adjusted EPS: $0.92 vs analyst estimates of $0.87 (6% beat)
Market Capitalization: $2.33 billion

StockStory’s Take

Trustmark’s second quarter results were received positively by the market, reflecting management’s focus on loan and deposit growth, expense management, and credit quality. CEO Duane Dewey attributed the quarter’s profitability expansion to broad-based loan growth—particularly in non-commercial real estate categories—alongside a stable deposit base and disciplined expense controls. Executives emphasized that noninterest income benefited from incremental improvements across wealth management, brokerage, and mortgage activity. CFO Tom Owens also highlighted that continued operating leverage and prudent capital deployment have contributed to solid returns on assets and tangible equity.

Looking forward, Trustmark’s guidance is shaped by expectations for continued loan growth, stable credit quality, and a disciplined approach to both organic expansion and potential mergers and acquisitions. Management raised its outlook for annual loan growth and anticipates high-single digit increases in net interest income, supported by net interest margin expansion and ongoing repricing of fixed-rate assets. Dewey noted, “We are very actively recruiting and looking for talent across the board,” and added that the company is monitoring economic factors like tariffs and interest rates but hasn’t seen significant adverse impacts to date. The company will continue to evaluate M&A opportunities while focusing on organic growth in its core markets.

Key Insights from Management’s Remarks

Trustmark’s management pointed to loan portfolio diversification, improved asset quality, and successful expense control as central to its quarterly performance and forward momentum.

Loan growth broadens: Loan growth was led by non-commercial real estate (non-CRE) categories, with management noting stronger production in 1-4 family mortgage, other loans and leases, and commercial and industrial segments. This diversification reduces reliance on CRE and reflects active origination efforts in multiple business lines.
Deposit base remains stable: Deposit growth was attributed to strength in noninterest-bearing accounts, even as interest-bearing deposits declined. Management indicated that the deposit mix and cost discipline contributed to a modest quarterly reduction in total deposit costs, supporting net interest margin.
Disciplined expense management: Noninterest expense growth was minimal, following declines in both 2024 and the prior quarter. Dewey highlighted the impact of the company’s FIT2GROW restructuring initiatives and continued focus on controlling salary and equipment expenses, which helped offset increases in professional fees.
Improved asset quality: The quarter saw meaningful reductions in criticized and classified loans, with $75 million of non-pass credits upgraded to pass status. Chief Credit and Operations Officer Barry Harvey emphasized that these upgrades helped maintain earning assets and supported lower provisioning for credit losses.
Capital deployment and share repurchases: Trustmark continued to build capital ratios while repurchasing $11 million in stock during the quarter. Owens stated that the company’s strong capital position provides strategic flexibility for future organic growth, market expansion, or acquisition opportunities.

Drivers of Future Performance

Trustmark expects further profit growth driven by loan expansion, net interest margin stability, and ongoing expense control, with additional upside from strategic M&A and market expansion efforts.

Loan and deposit growth focus: Management upgraded its full-year outlook for loan growth to mid-single digits, with continued emphasis on expanding in non-CRE categories and core markets such as Texas, Alabama, and Florida. Deposit growth is expected to remain in the low single-digit range, excluding brokered deposits.
Net interest margin resilience: CFO Owens indicated that the company’s net interest margin guidance reflects market expectations for potential Federal Reserve rate cuts, while ongoing repricing of fixed-rate loans and securities should provide a modest tailwind. The company remains slightly asset-sensitive, positioning it to benefit if rates remain stable.
Strategic talent acquisition and M&A: Dewey noted active recruitment efforts in growth markets and a willingness to consider acquisitions in contiguous states. While M&A activity has increased across the regional banking sector, Trustmark intends to be selective and conservative, focusing on deals that add shareholder value and strengthen its footprint.

Catalysts in Upcoming Quarters

The StockStory team will be monitoring (1) whether Trustmark sustains its momentum in loan growth, particularly in non-CRE segments, (2) the company’s ability to defend and expand net interest margin amid potential rate changes, and (3) execution on ongoing expense controls and talent recruitment. Developments in the M&A environment and progress in market expansion will also be important indicators.

Trustmark currently trades at $38.59, in line with $38.71 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).

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