Strong Performance reflects Continued Loan Growth, Stable Credit Quality, Expanded Fee Income, and Lower Noninterest Expense

Trustmark Corporation (NASDAQGS:TRMK) reported net income of $53.6 million in the first quarter of 2025, representing diluted earnings per share of $0.88. Trustmark’s performance during the first quarter produced a return on average tangible equity of 13.13% and a return on average assets of 1.19%. The Board of Directors declared a quarterly cash dividend of $0.24 per share payable June 15, 2025, to shareholders of record on June 1, 2025.

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First Quarter Highlights

• Loans held for investment (HFI) increased 1.2% linked-quarter and represented 87.8% of total deposits at March 31, 2025
• Credit quality remained stable, ACL coverage ratios expanded, net charge-offs represented 0.04% of average loans
• Deposits remained stable at $15.1 billion while cost of total deposits declined 15 basis points
• Noninterest income increased 4.0% linked-quarter, reflecting the strength of diversified business lines
• Noninterest expense decreased 0.3% linked-quarter, reflecting on-going expense management priorities

Duane A. Dewey, President and CEO, stated, “We continued to build upon the strong momentum from 2024 and are pleased with our solid performance in the first quarter of 2025. Our results reflect continued loan growth, stable credit quality, and an attractive core deposit base. In addition, we experienced continued growth in noninterest income while noninterest expense decreased. These accomplishments are the results of our continued efforts to expand customer relationships and diligently manage expenses. We are particularly pleased to have received a Community Reinvestment Act (CRA) rating of Outstanding, the highest rating possible. Our associates have done a tremendous job of serving customers, building relationships, and demonstrating the value Trustmark can provide as a trusted financial partner.”

“We are operating in a dynamic and challenging economic environment that is ever-changing. With robust capital, liquidity, and profitability, Trustmark is well-positioned to help customers navigate this evolving landscape,” said Dewey.

Balance Sheet Management

• Loans HFI increased $151.5 million, or 1.2%, during the quarter and $183.5 million, or 1.4%, year-over-year
• Personal and commercial deposits totaled $12.9 billion at March 31, 2025, up $7.1 million, or 0.1%, from the prior quarter and $394.4 million, or 3.2%, year-over-year
• Maintained strong capital position with CET1 ratio of 11.63% and total risk-based capital ratio of 14.10%

Loans HFI totaled $13.2 billion at March 31, 2025, reflecting an increase of $151.5 million, or 1.2%, linked-quarter and $183.5 million, or 1.4%, year-over-year. The linked-quarter growth reflected increases in commercial real estate (CRE), other commercial loans and leases, and 1-4 family mortgage loans offset in part by a decrease in commercial and industrial loans. Trustmark’s loan portfolio remains well-diversified by loan type and geography.

Deposits totaled $15.1 billion at March 31, 2025, down $27.5 million, or 0.2%, from the prior quarter, driven by the decline in public deposits of $61.8 million. Year-over-year, deposits declined $257.9 million, or 1.7%, driven by targeted declines in public funds and brokered deposits of $343.2 million and $309.5 million, respectively. Trustmark continues to maintain a strong liquidity position as loans HFI represented 87.8% of total deposits at the end of the first quarter. Noninterest-bearing deposits represented 20.4% of total deposits at March 31, 2025. Interest-bearing deposit costs totaled 2.30% for the first quarter, a decrease of 21 basis points linked-quarter. The total cost of interest-bearing liabilities was 2.43% in the first quarter of 2025, a decrease of 18 basis points from the prior quarter.

During the first quarter, Trustmark repurchased $15.0 million, or approximately 423 thousand of its common shares. As previously announced, Trustmark’s Board of Directors authorized a stock repurchase program effective January 1, 2025, under which $100.0 million of Trustmark’s outstanding shares may be acquired through December 31, 2025. The repurchase program, which is subject to market conditions and management discretion, will continue to be implemented through open market repurchases or privately negotiated transactions. At March 31, 2025, Trustmark’s tangible equity to tangible assets ratio was 9.39%, while the total risk-based capital ratio was 14.10%. Tangible book value per share was $27.78 at March 31, 2025, an increase of 4.1% from the prior quarter and 26.1% from the prior year.

Credit Quality

• Net charge-offs totaled $1.4 million, representing 0.04% of average loans in the first quarter
• Net provision for credit losses was $5.3 million in the first quarter
• Allowance for credit losses (ACL) represented 1.26% of loans HFI, up 4 basis points linked-quarter, and 296.41% of nonaccrual loans, excluding individually analyzed loans at March 31, 2025

Nonaccrual loans totaled $86.6 million at March 31, 2025, up $6.5 million from the prior quarter and a decrease of $11.7 million year-over-year. Other real estate totaled $8.3 million, reflecting increases of $2.4 million and $728 thousand from the prior quarter and prior year, respectively. Collectively, nonperforming assets totaled $95.0 million, representing 0.71% of loans HFI and held for sale (HFS) at March 31, 2025.

The provision for credit losses for loans HFI was $8.1 million in the first quarter and was primarily attributable to loan growth, changes in the macroeconomic forecast, and net adjustments to the qualitative factors. The provision for credit losses for off-balance sheet credit exposures was a negative $2.8 million in the first quarter, primarily driven by a reduction in unfunded CRE commitments and changes in the macroeconomic forecast. Collectively, the provision for credit losses totaled $5.3 million in the first quarter compared to $7.5 million in the prior quarter and $7.5 million in the first quarter of 2024.

Allocation of Trustmark’s $167.0 million ACL on loans HFI represented 1.11% of commercial loans and 1.76% of consumer and home mortgage loans, resulting in an ACL to total loans HFI of 1.26% at March 31, 2025, up 4 basis points from the prior quarter. Management believes the level of the ACL is commensurate with the credit losses currently expected in the loan portfolio.

Revenue Generation

• Net interest income (FTE) totaled $154.7 million in the first quarter, down 2.3% linked-quarter
• Net interest margin totaled 3.75% in the first quarter, down 1 basis point from the prior quarter
• Noninterest income totaled $42.6 million, up 4.0% from the prior quarter, representing 21.9% of total revenue in the first quarter

Revenue in the first quarter totaled $194.6 million, a decrease of 1.1% from the prior quarter and an increase of 13.0% from the same quarter in the prior year. The linked-quarter decrease primarily reflects lower net interest income offset in part by higher noninterest income while the year-over-year increase is attributed to higher net interest income and noninterest income.

Net interest income (FTE) in the first quarter totaled $154.7 million, resulting in a net interest margin of 3.75%, down 1 basis point from the prior quarter. The net interest margin was relatively flat as the decrease in the cost of interest-bearing liabilities was offset by the decrease in yield for the loans HFI and held for sale portfolio.

Noninterest income in the first quarter totaled $42.6 million, an increase of $1.6 million, or 4.0%, from the prior quarter and $3.2 million, or 8.2%, year-over-year. The linked-quarter increases in other income net, mortgage banking, net, and wealth management revenue were offset in part by seasonal declines in bank card and other fees and service charges on deposit accounts. The growth in noninterest income year-over-year reflects increases in other income, net, wealth management revenue, and bank card and other fees, which were offset in part by declines in service charges on deposit accounts and mortgage banking, net.

Mortgage loan production in the first quarter totaled $318.8 million, down 14.4% from the prior quarter and up 16.4% year-over-year. Mortgage banking revenue totaled $8.8 million in the first quarter, an increase of $1.4 million, or 18.7%, linked-quarter and a decline of $144 thousand, or 1.6%, year-over-year. The linked-quarter increase was principally attributable to reduced servicing asset amortization and improvement in net hedge ineffectiveness. The year-over-year decrease was principally due to lower gain on sale of mortgage loans offset in part by improvement in net hedge ineffectiveness.

Wealth management revenue in the first quarter totaled $9.5 million, an increase of $224 thousand, or 2.4%, from the prior quarter and $591 thousand, or 6.6%, year-over-year. The linked-quarter growth reflected higher trust management revenue while the year-over-year growth reflected increased trust management revenue and brokerage revenue.

Other income, net totaled $6.0 million in the first quarter, up $1.7 million from the prior quarter and $2.9 million year-over-year. The linked-quarter increase includes a $2.4 million gain on the sale of a bank office facility. Service charges on deposit accounts totaled $10.6 million in the first quarter, reflecting a seasonal decrease of $592 thousand, or 5.3%, from the prior quarter and a decrease of $322 thousand, or 2.9%, year-over-year. Bank card and other fees totaled $7.7 million in the first quarter, down $1.1 million from the prior quarter due principally to lower customer derivative revenue and a seasonal decline in interchange income. Year-over-year, bank card and other fees increased $236 thousand.

Noninterest Expense

• Total noninterest expense declined $419 thousand, or 0.3%, linked-quarter
• Salaries and employee benefits expense declined $731 thousand, or 1.1%, linked-quarter
• Total services and fees declined $445 thousand, or 1.7%, linked-quarter

Noninterest expense in the first quarter totaled $124.0 million, a decrease of $419 thousand, or 0.3%, from the prior quarter and an increase of $4.3 million, or 3.6%, year-over-year. Salaries and employee benefits expense totaled $68.5 million in the first quarter, a decline of $731 thousand, or 1.1%, linked-quarter and an increase of $3.0 million, or 4.6%, year-over-year. The linked-quarter decline reflected reductions in incentives, commissions and employee benefits which were offset in part by a seasonal increase in payroll taxes. Services and fees in the first quarter totaled $26.2 million, a decrease of $445 thousand, or 1.7%, from the prior quarter and an increase of $1.8 million, or 7.4%, year-over-year. The linked-quarter decline is attributable principally to lower professional fees and data processing expense. Total other expense was $15.6 million, an increase of $467 thousand, or 3.1%, linked-quarter and a decrease of $572 thousand, or 3.5%, year-over-year. The linked-quarter increase is attributable to other real estate expense, a valuation adjustment on branch property held for sale, and other miscellaneous expense offset in part by a decrease in FDIC assessment expense.

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, April 23, 2025, at 8:30 a.m. Central Time to discuss the Corporation’s financial results. Interested parties may listen to the conference call by dialing (877) 317-3051 or by clicking on the link provided under the Investor Relations section of our website at www.trustmark.com. A replay of the conference call will also be available through Wednesday, May 7, 2025, in archived format at the same web address or by calling (877)344-7529, passcode 6656565.

Trustmark is a financial services company providing banking and financial solutions through offices in Alabama, Florida, Georgia, Mississippi, Tennessee and Texas.

Forward-Looking Statements

Certain statements contained in this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by words such as “may,” “hope,” “will,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “project,” “potential,” “seek,” “continue,” “could,” “would,” “future” or the negative of those terms or other words of similar meaning. You should read statements that contain these words carefully because they discuss our future expectations or state other “forward-looking” information. These forward-looking statements include, but are not limited to, statements relating to anticipated future operating and financial performance measures, including net interest margin, credit quality, business initiatives, growth opportunities and growth rates, among other things, and encompass any estimate, prediction, expectation, projection, opinion, anticipation, outlook or statement of belief included therein as well as the management assumptions underlying these forward-looking statements. You should be aware that the occurrence of the events described under the caption “Risk Factors” in Trustmark’s filings with the Securities and Exchange Commission (SEC) could have an adverse effect on our business, results of operations or financial condition. Should one or more of these risks materialize, or should any such underlying assumptions prove to be significantly different, actual results may vary significantly from those anticipated, estimated, projected or expected.

Risks that could cause actual results to differ materially from current expectations of Management include, but are not limited to, actions by the Board of Governors of the Federal Reserve System (FRB) that impact the level of market interest rates, local, state, national and international economic and market conditions, conditions in the housing and real estate markets in the regions in which Trustmark operates and the extent and duration of the current volatility in the credit and financial markets, changes in the level of nonperforming assets and charge-offs, an increase in unemployment levels and slowdowns in economic growth, changes in our ability to measure the fair value of assets in our portfolio, changes in the level and/or volatility of market interest rates, the impacts related to or resulting from bank failures and other economic and industry volatility, including potential increased regulatory requirements, the demand for the products and services we offer, potential unexpected adverse outcomes in pending litigation matters, our ability to attract and retain noninterest-bearing deposits and other low-cost funds, competition in loan and deposit pricing, as well as the entry of new competitors into our markets through de novo expansion and acquisitions, economic conditions, changes in accounting standards and practices, including changes in the interpretation of existing standards, that affect our consolidated financial statements, changes in consumer spending, borrowings and savings habits, technological changes, changes in the financial performance or condition of our borrowers, greater than expected costs or difficulties related to the integration of acquisitions or new products and lines of business, cyber-attacks and other breaches which could affect our information system security, natural disasters, environmental disasters, pandemics or other health crises, acts of war or terrorism, potential market or regulatory effects of the new presidential administration’s policies and other risks described in our filings with the SEC.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Except as required by law, we undertake no obligation to update or revise any of this information, whether as the result of new information, future events or developments or otherwise.