Trustmark Corporation — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net income was $58.1 million, or $1.00 per diluted share, compared to $63.5 million ($1.08 per share) in the prior quarter and $56.8 million ($0.94 per share) in the prior year quarter.
• Return on average tangible equity (ROATE) was 12.72% and return on average assets (ROAA) was 1.21%.
• Total revenue was $207.1 million, down 0.5% from the prior quarter and up 2.4% year-over-year.
• Net interest income (FTE) totaled $170.6 million, an increase of 1.2% linked-quarter and 3.2% year-over-year, with a net interest margin of 3.84% unchanged from the prior quarter.
• Noninterest income was $39.5 million, a decrease of 7.2% linked-quarter and 1.1% year-over-year.
• Noninterest expense was $134.4 million, up 0.6% linked-quarter and 2.7% year-over-year.
• Net provision for credit losses was $2.3 million in the third quarter.
• Net charge-offs totaled $1.0 million, representing 0.03% of average loans.
• Loans held for investment (HFI) totaled $13.9 billion, down 0.3% linked-quarter and up 2.4% year-over-year.
• Total deposits were $16.1 billion, down 0.1% linked-quarter and up 2.7% year-over-year; excluding brokered deposits, deposits increased 1.2% linked-quarter.
• Nonperforming assets totaled $57.0 million, representing 0.40% of loans HFI and HFS.
• Allowance for credit losses (ACL) was $148.3 million, representing 1.07% of loans HFI.
• Common equity tier 1 (CET1) ratio was 11.98% and total risk-based capital ratio was 14.57%.

Guidance and Future Outlook:

• Management stated the company is well-positioned to deliver sustainable long-term value creation.
• Strategic actions completed during the quarter are intended to improve the flexibility and future earnings capacity of the balance sheet.
• The company does not anticipate using the held-to-maturity classification for its securities portfolio for the foreseeable future.

Business Segments and Product Lines:

• Wealth management revenue expanded 2.2% linked-quarter to $11.2 million and grew 13.9% year-over-year.
• Mortgage loan production totaled $421.4 million, down 11.7% linked-quarter but up 8.2% year-over-year.
• Mortgage banking revenue was $7.9 million, down 11.6% linked-quarter and 3.7% year-over-year.
• Service charges on deposit accounts were $10.6 million, up 2.4% linked-quarter but down 5.6% year-over-year.
• Bank card and other fees were $8.1 million, down 6.8% linked-quarter and 2.0% year-over-year.
• Loan growth was supported by commercial and industrial, 1-4 family mortgage, construction, land development, consumer, and other loans and leases.

Market and Competitive Landscape:

• The lending environment remains highly competitive with elevated commercial loan payoff activity.
• Trustmark operates in Alabama, Florida, Georgia, Mississippi, Tennessee, and Texas.
• The company maintains a strong liquidity position with loans HFI representing 86.4% of total deposits.

Risks and Challenges:

• Risks include actions by the Federal Reserve impacting market interest rates, economic conditions, housing and real estate market conditions, and credit market volatility.
• Potential risks involve changes in nonperforming assets, unemployment levels, and regulatory requirements.
• Operational risks include cyber-attacks, natural disasters, pandemics, and technological changes.
• The company faces competition in loan and deposit pricing and the potential entry of new competitors.

Management Commentary and Tone:

• Duane A. Dewey, President and CEO, stated that third-quarter results demonstrated the strength of the core franchise, with growing net interest income, excellent credit quality, and solid deposit growth excluding non-core runoff.
• Management highlighted the completion of strategic actions to enhance balance sheet flexibility and the continued return of capital to shareholders.

Other Key Points:

• Trustmark sold 34 bank branch properties in a sale-leaseback transaction, generating a pre-tax gain of $61.5 million.
• To offset the sale-leaseback gain, Trustmark restructured its investment securities portfolio, selling $629.5 million of lower-yielding securities and purchasing $628.0 million of higher-yielding securities, resulting in a pre-tax loss of $61.5 million.
• The Board declared a quarterly cash dividend of $0.25 per share, payable December 15, 2026.
• Trustmark repurchased $20.1 million (approximately 428,000 shares) of common stock in the third quarter and $60.9 million (approximately 1.4 million shares) in the first nine months of 2026.
• The stock repurchase program authorized $100.0 million for acquisition through December 31, 2026.
• Tangible book value per share was $30.42 at September 30, 2026, a decrease of 2.1% from the prior quarter.
• The company recorded additional lease right-of-use assets of $72.5 million and operating lease liabilities of $72.6 million due to the sale-leaseback transaction.
• During the second quarter, Trustmark sold a portfolio of 1-4 family mortgage loans, resulting in a credit-related loss of $6.3 million and a noncredit-related loss of $5.0 million, with a corresponding release of $15.5 million in the allowance for credit losses.