Trustmark Corporation Announces Fourth Quarter and Fiscal Year 2023 Financial Results

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Insights

The reported net income and earnings per share (EPS) of Trustmark Corporation indicate a solid financial performance, with a notable increase in loans held for investment (HFI) and deposits. The return on average tangible equity (ROATE) and return on average assets (ROAA) are key metrics that highlight the company's profitability and asset efficiency. The ROATE of 14.04% is particularly impressive, as it suggests that the company is effectively leveraging its tangible equity to generate profits.

The declaration of a quarterly cash dividend is a positive signal to shareholders, reflecting the company's confidence in its ongoing financial health and commitment to returning value. The authorized stock repurchase program, while subject to market conditions, indicates a proactive approach to capital management and could potentially be accretive to EPS by reducing the number of outstanding shares.

Overall, these financial results and strategic decisions are likely to be viewed favorably by investors and could have a positive impact on Trustmark's stock performance in the short to medium term.

The growth in net interest income and the expansion of noninterest income underscore Trustmark's diversified revenue base, which is a positive indicator of the company's resilience in various market conditions. The increase in insurance revenue by 7.2% and the stability of wealth management revenue suggest that Trustmark's efforts to grow its fee-based businesses are yielding results.

However, the decline in mortgage loan production and associated revenue, as well as the seasonal decline in insurance revenue, reflect the challenges faced by financial institutions in a fluctuating economic environment. It is also worth noting the increase in noninterest expenses, particularly the FDIC assessment expense, which could be a concern if such trends continue.

The emphasis on technology investments to enhance efficiency and productivity is a strategic move that could strengthen Trustmark's competitive position in the long run, particularly by improving the customer experience and potentially reducing operational costs.

The reported credit quality metrics, such as low net charge-offs at 0.06% of average loans and a robust allowance for credit losses (ACL) at 1.08% of loans HFI, reflect Trustmark's solid credit risk management practices. The ACL coverage ratio of 249.31% of nonperforming loans, excluding individually analyzed loans, suggests a conservative stance towards potential credit losses, which is reassuring for stakeholders concerned about credit risk.

Nonetheless, the increase in nonaccrual loans year-over-year warrants monitoring, as it may indicate emerging credit issues that could affect future earnings. The provision for credit losses aligning with loan growth and changes in the macroeconomic forecast demonstrates proactive management of credit reserves in response to the economic outlook and loan portfolio composition.

01/23/2024 - 04:30 PM

Performance Reflects Continued Loan and Deposit Growth, Solid Credit Quality, and Diversified Revenue Base

JACKSON, Miss.--(BUSINESS WIRE)-- Trustmark Corporation (NASDAQGS:TRMK) reported net income of $36.1 million in the fourth quarter of 2023, representing diluted earnings per share of $0.59. For the full year, Trustmark’s net income totaled $165.5 million, representing diluted earnings per share of $2.70. Trustmark’s net income in 2023 produced a return on average tangible equity of 14.04% and a return on average assets of 0.89%. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable March 15, 2024, to shareholders of record on March 1, 2024.

Printer friendly version of earnings release with consolidated financial statements and notes: https://www.businesswire.com/news/home/53886436/en

2023 Highlights

Loans held for investment (HFI) increased $746.5 million, or 6.1%, in 2023
Net charge-offs represented 0.06% of average loans in 2023
Deposits increased $1.1 billion, or 7.8%, in 2023
Net interest income (FTE) totaled $566.3 million, up 11.7% in 2023 to produce a net interest margin of 3.32%, up 15 basis points from 2022
Insurance revenue increased 7.2% while wealth management remained stable
Noninterest income totaled $207.0 million and represented 27.2% of total revenue
Total revenue increased $60.0 million, or 8.6%, to $759.8 million in 2023
Continued technology investments to enhance efficiency and productivity
Noninterest expense totaled $537.9 million in 2023; adjusted noninterest expense totaled $527.9 million, up 5.9% from the prior year; please refer to the Consolidated Financial Information Note 7 – Non-GAAP Financial Measures

Duane A. Dewey, President and CEO, commented, “We continued to make significant progress across the organization. Our performance reflected solid loan production and credit quality, and continued deposit growth in an increasingly competitive marketplace. We achieved double-digit growth in net interest income in 2023 while noninterest income continued to expand thanks in part to another record year in our insurance business and commendable results in our banking, mortgage banking and wealth management businesses. We have a tremendous team of associates focused on expanding customer relationships and demonstrating the value Trustmark can provide as their trusted financial partner. Looking forward, we will continue to pursue opportunities to redesign workflows and restructure the organization to further leverage investments in technology that will broaden our reach, enhance the customer experience, and improve efficiency. We remain focused on providing the financial services and advice our customers have come to expect while building long-term value for our shareholders.”

Balance Sheet Management

Loans HFI increased $140.3 million, or 1.1%, during the quarter
Total deposits increased $467.8 million, or 3.1%, linked-quarter
Maintained strong capital position with CET1 ratio of 10.04% and total risk-based capital ratio of 12.29%

Loans HFI totaled $13.0 billion at December 31, 2023, reflecting an increase of $140.3 million, or 1.1%, linked-quarter and $746.5 million, or 6.1%, year-over-year. The linked-quarter growth reflected increases in commercial and industrial loans, other real estate secured loans, other loans and leases, and state and other political subdivision loans offset in part by declines in construction, land development and other land loans, and loans secured by nonfarm, nonresidential properties. Trustmark’s loan portfolio remains well-diversified by loan type and geography.

Deposits totaled $15.6 billion at December 31, 2023, up $467.8 million, or 3.1%, from the prior quarter and up $1.1 billion, or 7.8%, year-over-year. Trustmark continues to maintain a strong liquidity position as loans HFI represented 83.2% of total deposits at year-end 2023. Noninterest-bearing deposits represented 20.5% of total deposits at December 31, 2023. Interest-bearing deposit costs totaled 2.67% for the fourth quarter, an increase of 28 basis points linked-quarter. The total cost of interest-bearing liabilities was 2.89% for the fourth quarter of 2023, an increase of 17 basis points from the prior quarter.

Trustmark did not repurchase any of its common shares in 2023. As previously announced, Trustmark’s Board of Directors authorized a stock repurchase program effective January 1, 2024, under which $50.0 million of Trustmark’s outstanding shares may be acquired through December 31, 2024. 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 December 31, 2023, Trustmark’s tangible equity to tangible assets ratio was 6.95%, while the total risk-based capital ratio was 12.29%. Tangible book value per share was $20.87 at December 31, 2023, up 7.7% from the prior quarter and 15.2% from the prior year.

Credit Quality

Net charge-offs totaled $2.2 million, representing 0.07% of average loans in the fourth quarter
Provision for credit losses for loans HFI was $7.6 million in the fourth quarter
Allowance for credit losses (ACL) represented 1.08% of loans HFI and 249.31% of nonperforming loans, excluding individually analyzed loans at year-end

Nonaccrual loans totaled $100.0 million at December 31, 2023, an increase of $9.1 million from the prior quarter and $34.0 million year-over-year. Other real estate totaled $6.9 million, reflecting increases of $1.4 million and $4.9 million from the prior quarter and prior year, respectively. Collectively, nonperforming assets totaled $106.9 million, representing 0.81% of loans HFI and held for sale (HFS) at December 31, 2023.

The provision for credit losses for loans HFI was $7.6 million in the fourth quarter and was primarily attributable to loan growth, net adjustments to the qualitative factors, and changes in the macroeconomic forecast. The provision for credit losses for off-balance sheet credit exposures was a negative $888 thousand in the fourth quarter. Collectively, the provision for credit losses totaled $6.7 million in the fourth quarter compared to $8.4 million in the prior quarter and $12.1 million in the fourth quarter of 2022.

Allocation of Trustmark’s $139.4 million ACL on loans HFI represented 0.85% of commercial loans and 1.81% of consumer and home mortgage loans, resulting in an ACL to total loans HFI of 1.08% at December 31, 2023. 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 $140.0 million in the fourth quarter, down 1.3% linked-quarter
Net interest margin totaled 3.25% in the fourth quarter, down 4 basis points from the prior quarter
Noninterest income totaled $49.8 million, representing 26.7% of total revenue in the fourth quarter

Revenue in the fourth quarter totaled $186.5 million, a decrease of 2.3% from the prior quarter and 2.7% from the same quarter in the prior year. The linked-quarter decrease reflects lower noninterest income and net interest income while the year-over-year decline reflects growth in noninterest income being more than offset by lower net interest income. In 2023, revenue totaled $759.8 million, an increase of 8.6% from the prior year.

Net interest income (FTE) in the fourth quarter totaled $140.0 million, resulting in a net interest margin of 3.25%, down 4 basis points from the prior quarter. The decrease in the net interest margin was primarily due to increased costs of interest-bearing liabilities, which was offset in part by higher yields on the loans HFI and HFS portfolio.

Noninterest income in the fourth quarter totaled $49.8 million, a decrease of $2.4 million from the prior quarter and an increase of $4.6 million from the prior year. The linked-quarter change reflects a seasonal decline in insurance revenue, as well as lower mortgage banking and wealth management revenue. The increase in noninterest income year-over-year was well diversified across all fee-based categories.

Mortgage loan production in the fourth quarter totaled $271.9 million, a decline of 30.3% linked-quarter and 30.4% year-over-year. Mortgage banking revenue totaled $5.5 million in the fourth quarter, a decrease of $939 thousand from the prior quarter and an increase of $2.1 million year-over-year. The linked-quarter decline is attributable to an increase in net negative hedge ineffectiveness. In 2023, mortgage loan production totaled $1.5 billion, down 31.6% from the prior year. Mortgage banking revenue totaled $26.2 million in 2023, down $2.1 million from the prior year.

Insurance revenue in the fourth quarter totaled $13.2 million, a seasonal decline of $2.1 million from the prior quarter and an increase of $1.2 million from the prior year. Insurance revenue in 2023 totaled $57.6 million, up $3.8 million, or 7.2%, from the prior year. The solid performance during the year reflects an expanded producer workforce, a hardening of the insurance market, and the realization of operational efficiencies from investments in technology and improved processes.

Wealth management revenue totaled $8.7 million in the fourth quarter, down 1.3% from the prior quarter and up 7.2% from the prior year. The linked-quarter decline is principally due to reduced trust management revenue offset in part by increased brokerage revenue while the year-over-year change is attributable to increased investment services revenue. In 2023, wealth management revenue totaled $35.1 million, in line with the prior year. During 2023, Trustmark selectively expanded its salesforce in the Houston, Mobile, Jackson, and Florida Panhandle markets.

Noninterest Expense

Total noninterest expense in the fourth quarter was $136.4 million; adjusted noninterest expense, which excludes ORE expense, amortization of intangibles, charitable contributions resulting in state tax credits, reduction in force expense, and litigation settlement expense, totaled $134.8 million, up $723 thousand from the prior quarter. Please refer to the Consolidated Financial Information Note 7 – Non-GAAP Financial Measures
FDIC assessment expense totaled $4.8 million in the fourth quarter, up $1.1 million, or 28.7%, from the prior quarter

Salaries and employee benefits expense in the fourth quarter totaled $78.0 million, an increase of $1.3 million, or 1.7% from the prior quarter. Excluding reduction in force expense related to restructuring initiatives of $1.4 million, salaries and benefits expense totaled $76.6 million, a decline of $69 thousand from the prior quarter. Total services and fees in the fourth quarter totaled $27.9 million, unchanged from the prior quarter. Net occupancy – premises expense during the fourth quarter totaled $7.4 million, unchanged from the prior quarter. Equipment expense declined 4.4% linked-quarter to total $6.5 million. Other expense increased $943 thousand, or 6.0%, linked-quarter principally due to increased FDIC assessment expense.

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, January 24, 2024, 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, February 7, 2024, in archived format at the same web address or by calling (877) 344-7529, passcode 6776577.

Trustmark is a financial services company providing banking and financial solutions through offices in Alabama, Florida, Georgia, Mississippi, Tennessee and Texas. Visit trustmark.com for more information.

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 and 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, changes in the level of nonperforming assets and charge-offs, an increase in unemployment levels and slowdowns in economic growth, actions by the Board of Governors of the Federal Reserve System (FRB) that impact the level of market interest rates, local, state and national 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, levels of and volatility in crude oil prices, changes in our ability to measure the fair value of assets in our portfolio, material changes in the level and/or volatility of market interest rates, the impacts related to or resulting from recent bank failures and other economic and industry volatility, including potential increased regulatory requirements and costs and potential impacts to macroeconomic conditions, the performance and demand for the products and services we offer, including the level and timing of withdrawals from our deposit accounts, the costs and effects of litigation and of unexpected or adverse outcomes in such litigation, our ability to attract 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, including the potential impact of issues related to the European financial system and monetary and other governmental actions designed to address credit, securities, and/or commodity markets, the enactment of legislation and changes in existing regulations or enforcement practices or the adoption of new regulations, 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, changes in our ability to control expenses, 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, 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.

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2023
($ in thousands)
(unaudited)
										Linked Quarter					Year over Year
QUARTERLY AVERAGE BALANCES	12/31/2023			9/30/2023			12/31/2022			$ Change			% Change		$ Change			% Change
Securities AFS-taxable	$	1,986,825		$	2,049,006		$	2,572,675		$	(62,181	)	-3.0	%	$	(585,850	)	-22.8	%
Securities AFS-nontaxable		4,246			4,779			4,828			(533	)	-11.2	%		(582	)	-12.1	%
Securities HTM-taxable		1,430,169			1,445,895			1,268,952			(15,726	)	-1.1	%		161,217		12.7	%
Securities HTM-nontaxable		340			907			4,514			(567	)	-62.5	%		(4,174	)	-92.5	%
Total securities		3,421,580			3,500,587			3,850,969			(79,007	)	-2.3	%		(429,389	)	-11.2	%
Paycheck protection program loans (PPP)		—			—			3,235			—		n/m			(3,235	)	-100.0	%
Loans (includes loans held for sale)		13,010,028			12,926,942			12,006,661			83,086		0.6	%		1,003,367		8.4	%
Fed funds sold and reverse repurchases		121			230			6,566			(109	)	-47.4	%		(6,445	)	-98.2	%
Other earning assets		670,477			682,644			375,190			(12,167	)	-1.8	%		295,287		78.7	%
Total earning assets		17,102,206			17,110,403			16,242,621			(8,197	)	0.0	%		859,585		5.3	%
Allowance for credit losses (ACL), loans held
for investment (LHFI)		(133,742	)		(127,915	)		(114,948	)		(5,827	)	-4.6	%		(18,794	)	-16.4	%
Other assets		1,749,069			1,721,310			1,630,085			27,759		1.6	%		118,984		7.3	%
Total assets	$	18,717,533		$	18,703,798		$	17,757,758		$	13,735		0.1	%	$	959,775		5.4	%

Interest-bearing demand deposits	$	5,053,935		$	4,875,714		$	4,719,303		$	178,221		3.7	%	$	334,632		7.1	%
Savings deposits		3,526,600			3,642,158			4,379,673			(115,558	)	-3.2	%		(853,073	)	-19.5	%
Time deposits		3,427,384			3,075,224			1,152,905			352,160		11.5	%		2,274,479		n/m
Total interest-bearing deposits		12,007,919			11,593,096			10,251,881			414,823		3.6	%		1,756,038		17.1	%
Fed funds purchased and repurchases		403,041			414,696			549,406			(11,655	)	-2.8	%		(146,365	)	-26.6	%
Other borrowings		590,765			912,151			530,993			(321,386	)	-35.2	%		59,772		11.3	%
Subordinated notes		123,446			123,391			123,226			55		0.0	%		220		0.2	%
Junior subordinated debt securities		61,856			61,856			61,856			—		0.0	%		—		0.0	%
Total interest-bearing liabilities		13,187,027			13,105,190			11,517,362			81,837		0.6	%		1,669,665		14.5	%
Noninterest-bearing deposits		3,296,351			3,429,815			4,177,113			(133,464	)	-3.9	%		(880,762	)	-21.1	%
Other liabilities		641,662			585,908			569,992			55,754		9.5	%		71,670		12.6	%
Total liabilities		17,125,040			17,120,913			16,264,467			4,127		0.0	%		860,573		5.3	%
Shareholders' equity		1,592,493			1,582,885			1,493,291			9,608		0.6	%		99,202		6.6	%
Total liabilities and equity	$	18,717,533		$	18,703,798		$	17,757,758		$	13,735		0.1	%	$	959,775		5.4	%

n/m - percentage changes greater than +/- 100% are considered not meaningful

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2023
($ in thousands)
(unaudited)

										Linked Quarter					Year over Year
PERIOD END BALANCES	12/31/2023			9/30/2023			12/31/2022			$ Change			% Change		$ Change			% Change
Cash and due from banks	$	975,543		$	750,492		$	734,787		$	225,051		30.0	%	$	240,756		32.8	%
Fed funds sold and reverse repurchases		—			—			4,000			—		n/m			(4,000	)	-100.0	%
Securities available for sale		1,762,878			1,766,174			2,024,082			(3,296	)	-0.2	%		(261,204	)	-12.9	%
Securities held to maturity		1,426,279			1,438,287			1,494,514			(12,008	)	-0.8	%		(68,235	)	-4.6	%
PPP loans		—			—			—			—		n/m			—		n/m
Loans held for sale (LHFS)		184,812			169,244			135,226			15,568		9.2	%		49,586		36.7	%
Loans held for investment (LHFI)		12,950,524			12,810,259			12,204,039			140,265		1.1	%		746,485		6.1	%
ACL LHFI		(139,367	)		(134,031	)		(120,214	)		(5,336	)	-4.0	%		(19,153	)	-15.9	%
Net LHFI		12,811,157			12,676,228			12,083,825			134,929		1.1	%		727,332		6.0	%
Premises and equipment, net		232,537			230,718			212,365			1,819		0.8	%		20,172		9.5	%
Mortgage servicing rights		131,870			142,379			129,677			(10,509	)	-7.4	%		2,193		1.7	%
Goodwill		384,237			384,237			384,237			—		0.0	%		—		0.0	%
Identifiable intangible assets		2,965			3,093			3,640			(128	)	-4.1	%		(675	)	-18.5	%
Other real estate		6,867			5,485			1,986			1,382		25.2	%		4,881		n/m
Operating lease right-of-use assets		38,142			39,639			36,301			(1,497	)	-3.8	%		1,841		5.1	%
Other assets		764,902			784,863			770,838			(19,961	)	-2.5	%		(5,936	)	-0.8	%
Total assets	$	18,722,189		$	18,390,839		$	18,015,478		$	331,350		1.8	%	$	706,711		3.9	%

Deposits:
Noninterest-bearing	$	3,197,620		$	3,320,124		$	4,093,771		$	(122,504	)	-3.7	%	$	(896,151	)	-21.9	%
Interest-bearing		12,372,143			11,781,799			10,343,877			590,344		5.0	%		2,028,266		19.6	%
Total deposits		15,569,763			15,101,923			14,437,648			467,840		3.1	%		1,132,115		7.8	%
Fed funds purchased and repurchases		405,745			321,799			449,331			83,946		26.1	%		(43,586	)	-9.7	%
Other borrowings		483,230			793,193			1,050,938			(309,963	)	-39.1	%		(567,708	)	-54.0	%
Subordinated notes		123,482			123,427			123,262			55		0.0	%		220		0.2	%
Junior subordinated debt securities		61,856			61,856			61,856			—		0.0	%		—		0.0	%
ACL on off-balance sheet credit exposures		34,057			34,945			36,838			(888	)	-2.5	%		(2,781	)	-7.5	%
Operating lease liabilities		41,584			42,730			38,932			(1,146	)	-2.7	%		2,652		6.8	%
Other liabilities		340,625			340,615			324,405			10		0.0	%		16,220		5.0	%
Total liabilities		17,060,342			16,820,488			16,523,210			239,854		1.4	%		537,132		3.3	%
Common stock		12,725			12,724			12,705			1		0.0	%		20		0.2	%
Capital surplus		159,688			158,316			154,645			1,372		0.9	%		5,043		3.3	%
Retained earnings		1,709,157			1,687,199			1,600,321			21,958		1.3	%		108,836		6.8	%
Accumulated other comprehensive
income (loss), net of tax		(219,723	)		(287,888	)		(275,403	)		68,165		23.7	%		55,680		20.2	%
Total shareholders' equity		1,661,847			1,570,351			1,492,268			91,496		5.8	%		169,579		11.4	%
Total liabilities and equity	$	18,722,189		$	18,390,839		$	18,015,478		$	331,350		1.8	%	$	706,711		3.9	%

n/m - percentage changes greater than +/- 100% are considered not meaningful

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2023
($ in thousands except per share data)
(unaudited)

	Quarter Ended								Linked Quarter					Year over Year
INCOME STATEMENTS	12/31/2023			9/30/2023		12/31/2022			$ Change			% Change		$ Change			% Change
Interest and fees on LHFS & LHFI-FTE	$	210,288		$	206,523	$	159,566		$	3,765		1.8	%	$	50,722		31.8	%
Interest and fees on PPP loans		—			—		101			—		n/m			(101	)	-100.0	%
Interest on securities-taxable		15,936			16,624		16,577			(688	)	-4.1	%		(641	)	-3.9	%
Interest on securities-tax exempt-FTE		44			58		93			(14	)	-24.1	%		(49	)	-52.7	%
Interest on fed funds sold and reverse
repurchases		2			3		71			(1	)	-33.3	%		(69	)	-97.2	%
Other interest income		9,918			8,613		3,556			1,305		15.2	%		6,362		n/m
Total interest income-FTE		236,188			231,821		179,964			4,367		1.9	%		56,224		31.2	%
Interest on deposits		80,847			69,797		18,438			11,050		15.8	%		62,409		n/m
Interest on fed funds purchased and repurchases		5,347			5,375		4,762			(28	)	-0.5	%		585		12.3	%
Other interest expense		9,946			14,713		6,730			(4,767	)	-32.4	%		3,216		47.8	%
Total interest expense		96,140			89,885		29,930			6,255		7.0	%		66,210		n/m
Net interest income-FTE		140,048			141,936		150,034			(1,888	)	-1.3	%		(9,986	)	-6.7	%
Provision for credit losses, LHFI		7,585			8,322		6,902			(737	)	-8.9	%		683		9.9	%
Provision for credit losses, off-balance sheet
credit exposures		(888	)		104		5,215			(992	)	n/m			(6,103	)	n/m
Net interest income after provision-FTE		133,351			133,510		137,917			(159	)	-0.1	%		(4,566	)	-3.3	%
Service charges on deposit accounts		11,311			11,074		11,162			237		2.1	%		149		1.3	%
Bank card and other fees		8,502			8,217		8,191			285		3.5	%		311		3.8	%
Mortgage banking, net		5,519			6,458		3,408			(939	)	-14.5	%		2,111		61.9	%
Insurance commissions		13,197			15,303		12,019			(2,106	)	-13.8	%		1,178		9.8	%
Wealth management		8,657			8,773		8,079			(116	)	-1.3	%		578		7.2	%
Other, net		2,579			2,399		2,311			180		7.5	%		268		11.6	%
Securities gains (losses), net		39			—		—			39		n/m			39		n/m
Total noninterest income		49,804			52,224		45,170			(2,420	)	-4.6	%		4,634		10.3	%
Salaries and employee benefits		78,003			76,666		73,469			1,337		1.7	%		4,534		6.2	%
Services and fees (2)		27,906			27,882		27,709			24		0.1	%		197		0.7	%
Net occupancy-premises		7,362			7,383		7,898			(21	)	-0.3	%		(536	)	-6.8	%
Equipment expense		6,517			6,816		6,268			(299	)	-4.4	%		249		4.0	%
Litigation settlement expense (1)		—			6,500		100,750			(6,500	)	-100.0	%		(100,750	)	-100.0	%
Other expense (2)		16,641			15,698		15,135			943		6.0	%		1,506		10.0	%
Total noninterest expense		136,429			140,945		231,229			(4,516	)	-3.2	%		(94,800	)	-41.0	%
Income (loss) before income taxes and tax eq adj		46,726			44,789		(48,142	)		1,937		4.3	%		94,868		n/m
Tax equivalent adjustment		3,306			3,299		3,451			7		0.2	%		(145	)	-4.2	%
Income (loss) before income taxes		43,420			41,490		(51,593	)		1,930		4.7	%		95,013		n/m
Income taxes		7,297			7,461		(17,530	)		(164	)	-2.2	%		24,827		n/m
Net income (loss)	$	36,123		$	34,029	$	(34,063	)	$	2,094		6.2	%	$	70,186		n/m

Per share data
Earnings (loss) per share - basic	$	0.59		$	0.56	$	(0.56	)	$	0.03		5.4	%	$	1.15		n/m

Earnings (loss) per share - diluted	$	0.59		$	0.56	$	(0.56	)	$	0.03		5.4	%	$	1.15		n/m

Dividends per share	$	0.23		$	0.23	$	0.23			—		0.0	%		—		0.0	%

Weighted average shares outstanding
Basic		61,070,481			61,069,750		60,969,400

Diluted		61,296,840			61,263,032		61,173,249

Period end shares outstanding		61,071,173			61,070,095		60,977,686

(1) See Note 1 - Litigation Settlement in the Notes to Consolidated Financials for additional information.
(2) During the first quarter of 2023, Trustmark reclassified its debit card transaction fees from other expense to services and fees. Prior periods have been reclassified accordingly.

n/m - percentage changes greater than +/- 100% are considered not meaningful

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2023
($ in thousands)
(unaudited)
	Quarter Ended									Linked Quarter					Year over Year
NONPERFORMING ASSETS (1)	12/31/2023			9/30/2023			12/31/2022			$ Change			% Change		$ Change			% Change
Nonaccrual LHFI
Alabama (2)	$	23,271		$	23,530		$	12,300		$	(259	)	-1.1	%	$	10,971		89.2	%
Florida		170			151			227			19		12.6	%		(57	)	-25.1	%
Mississippi (3)		54,615			45,050			24,683			9,565		21.2	%		29,932		n/m
Tennessee (4)		1,802			1,841			5,566			(39	)	-2.1	%		(3,764	)	-67.6	%
Texas		20,150			20,327			23,196			(177	)	-0.9	%		(3,046	)	-13.1	%
Total nonaccrual LHFI		100,008			90,899			65,972			9,109		10.0	%		34,036		51.6	%
Other real estate
Alabama (2)		1,397			315			194			1,082		n/m			1,203		n/m
Mississippi (3)		1,242			942			1,769			300		31.8	%		(527	)	-29.8	%
Tennessee (4)		—			—			23			—		n/m			(23	)	-100.0	%
Texas		4,228			4,228			—			—		0.0	%		4,228		n/m
Total other real estate		6,867			5,485			1,986			1,382		25.2	%		4,881		n/m
Total nonperforming assets	$	106,875		$	96,384		$	67,958		$	10,491		10.9	%	$	38,917		57.3	%

LOANS PAST DUE OVER 90 DAYS (1)
LHFI	$	5,790		$	3,804		$	3,929		$	1,986		52.2	%	$	1,861		47.4	%

LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)	$	51,243		$	42,532		$	49,320		$	8,711		20.5	%	$	1,923		3.9	%

	Quarter Ended									Linked Quarter					Year over Year
**ACL LHFI (1)**	12/31/2023			9/30/2023			12/31/2022			$ Change			% Change		$ Change			% Change
Beginning Balance	$	134,031		$	129,298		$	115,050		$	4,733		3.7	%	$	18,981		16.5	%
Provision for credit losses, LHFI		7,585			8,322			6,902			(737	)	-8.9	%		683		9.9	%
Charge-offs		(4,250	)		(7,496	)		(3,893	)		3,246		43.3	%		(357	)	-9.2	%
Recoveries		2,001			3,907			2,155			(1,906	)	-48.8	%		(154	)	-7.1	%
Net (charge-offs) recoveries		(2,249	)		(3,589	)		(1,738	)		1,340		37.3	%		(511	)	-29.4	%
Ending Balance	$	139,367		$	134,031		$	120,214		$	5,336		4.0	%	$	19,153		15.9	%

**NET (CHARGE-OFFS) RECOVERIES (1)**
Alabama (2)	$	(299	)	$	(165	)	$	98		$	(134	)	-81.2	%	$	(397	)	n/m
Florida		180			21			(60	)		159		n/m			240		n/m
Mississippi (3)		(1,943	)		(1,867	)		(1,657	)		(76	)	-4.1	%		(286	)	-17.3	%
Tennessee (4)		(193	)		2,127			(195	)		(2,320	)	n/m			2		-1.0	%
Texas		6			(3,705	)		76			3,711		n/m			(70	)	-92.1	%
Total net (charge-offs) recoveries	$	(2,249	)	$	(3,589	)	$	(1,738	)	$	1,340		37.3	%	$	(511	)	-29.4	%

(1) Excludes PPP loans.
(2) Alabama includes the Georgia Loan Production Office.
(3) Mississippi includes Central and Southern Mississippi Regions.
(4) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.


n/m - percentage changes greater than +/- 100% are considered not meaningful

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2023
($ in thousands)
(unaudited)
	Quarter Ended															Year Ended
AVERAGE BALANCES	12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022			12/31/2023			12/31/2022
Securities AFS-taxable	$	1,986,825		$	2,049,006		$	2,140,505		$	2,187,121		$	2,572,675		$	2,090,201		$	2,932,054
Securities AFS-nontaxable		4,246			4,779			4,796			4,812			4,828			4,657			4,997
Securities HTM-taxable		1,430,169			1,445,895			1,463,086			1,479,283			1,268,952			1,454,450			911,010
Securities HTM-nontaxable		340			907			1,718			4,509			4,514			1,854			5,623
Total securities		3,421,580			3,500,587			3,610,105			3,675,725			3,850,969			3,551,162			3,853,684
PPP loans		—			—			—			—			3,235			—			14,868
Loans (includes loans held for sale)		13,010,028			12,926,942			12,732,057			12,530,449			12,006,661			12,801,531			11,236,388
Fed funds sold and reverse repurchases		121			230			3,275			2,379			6,566			1,492			1,753
Other earning assets		670,477			682,644			903,027			647,760			375,190			728,181			907,414
Total earning assets		17,102,206			17,110,403			17,248,464			16,856,313			16,242,621			17,082,366			16,014,107
ACL LHFI		(133,742	)		(127,915	)		(121,960	)		(119,978	)		(114,948	)		(125,942	)		(104,138	)
Other assets		1,749,069			1,721,310			1,648,583			1,762,449			1,630,085			1,718,058			1,567,921
Total assets	$	18,717,533		$	18,703,798		$	18,775,087		$	18,498,784		$	17,757,758		$	18,674,482		$	17,477,890

Interest-bearing demand deposits	$	5,053,935		$	4,875,714		$	4,803,737		$	4,751,154		$	4,719,303		$	4,871,977		$	4,585,955
Savings deposits		3,526,600			3,642,158			4,002,134			4,193,764			4,379,673			3,838,791			4,579,742
Time deposits		3,427,384			3,075,224			2,335,752			1,907,449			1,152,905			2,691,682			1,153,983
Total interest-bearing deposits		12,007,919			11,593,096			11,141,623			10,852,367			10,251,881			11,402,450			10,319,680
Fed funds purchased and repurchases		403,041			414,696			389,834			436,535			549,406			410,945			283,328
Other borrowings		590,765			912,151			1,330,010			1,110,843			530,993			984,315			198,672
Subordinated notes		123,446			123,391			123,337			123,281			123,226			123,364			123,144
Junior subordinated debt securities		61,856			61,856			61,856			61,856			61,856			61,856			61,856
Total interest-bearing liabilities		13,187,027			13,105,190			13,046,660			12,584,882			11,517,362			12,982,930			10,986,680
Noninterest-bearing deposits		3,296,351			3,429,815			3,595,927			3,813,248			4,177,113			3,532,134			4,452,046
Other liabilities		641,662			585,908			552,209			576,826			569,992			589,320			434,310
Total liabilities		17,125,040			17,120,913			17,194,796			16,974,956			16,264,467			17,104,384			15,873,036
Shareholders' equity		1,592,493			1,582,885			1,580,291			1,523,828			1,493,291			1,570,098			1,604,854
Total liabilities and equity	$	18,717,533		$	18,703,798		$	18,775,087		$	18,498,784		$	17,757,758		$	18,674,482		$	17,477,890

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2023
($ in thousands)
(unaudited)

PERIOD END BALANCES	12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022
Cash and due from banks	$	975,543		$	750,492		$	832,052		$	1,297,144		$	734,787
Fed funds sold and reverse repurchases		—			—			—			—			4,000
Securities available for sale		1,762,878			1,766,174			1,871,883			1,984,162			2,024,082
Securities held to maturity		1,426,279			1,438,287			1,458,665			1,474,338			1,494,514
PPP loans		—			—			—			—			—
LHFS		184,812			169,244			181,094			175,926			135,226
LHFI		12,950,524			12,810,259			12,613,967			12,497,195			12,204,039
ACL LHFI		(139,367	)		(134,031	)		(129,298	)		(122,239	)		(120,214	)
Net LHFI		12,811,157			12,676,228			12,484,669			12,374,956			12,083,825
Premises and equipment, net		232,537			230,718			227,630			223,975			212,365
Mortgage servicing rights		131,870			142,379			134,350			127,206			129,677
Goodwill		384,237			384,237			384,237			384,237			384,237
Identifiable intangible assets		2,965			3,093			3,222			3,352			3,640
Other real estate		6,867			5,485			1,137			1,684			1,986
Operating lease right-of-use assets		38,142			39,639			38,179			35,315			36,301
Other assets		764,902			784,863			805,508			794,883			770,838
Total assets	$	18,722,189		$	18,390,839		$	18,422,626		$	18,877,178		$	18,015,478

Deposits:
Noninterest-bearing	$	3,197,620		$	3,320,124		$	3,461,073		$	3,797,055		$	4,093,771
Interest-bearing		12,372,143			11,781,799			11,452,827			10,986,606			10,343,877
Total deposits		15,569,763			15,101,923			14,913,900			14,783,661			14,437,648
Fed funds purchased and repurchases		405,745			321,799			311,179			477,980			449,331
Other borrowings		483,230			793,193			1,056,714			1,485,181			1,050,938
Subordinated notes		123,482			123,427			123,372			123,317			123,262
Junior subordinated debt securities		61,856			61,856			61,856			61,856			61,856
ACL on off-balance sheet credit exposures		34,057			34,945			34,841			34,596			36,838
Operating lease liabilities		41,584			42,730			40,845			37,988			38,932
Other liabilities		340,625			340,615			308,726			310,500			324,405
Total liabilities		17,060,342			16,820,488			16,851,433			17,315,079			16,523,210
Common stock		12,725			12,724			12,724			12,720			12,705
Capital surplus		159,688			158,316			156,834			155,297			154,645
Retained earnings		1,709,157			1,687,199			1,667,339			1,636,463			1,600,321
Accumulated other comprehensive income (loss),
net of tax		(219,723	)		(287,888	)		(265,704	)		(242,381	)		(275,403	)
Total shareholders' equity		1,661,847			1,570,351			1,571,193			1,562,099			1,492,268
Total liabilities and equity	$	18,722,189		$	18,390,839		$	18,422,626		$	18,877,178		$	18,015,478

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2023
($ in thousands except per share data)
(unaudited)

	Quarter Ended													Year Ended
INCOME STATEMENTS	12/31/2023			9/30/2023		6/30/2023		3/31/2023			12/31/2022			12/31/2023			12/31/2022
Interest and fees on LHFS & LHFI-FTE	$	210,288		$	206,523	$	192,941	$	178,967		$	159,566		$	788,719		$	485,246
Interest and fees on PPP loans		—			—		—		—			101			—			639
Interest on securities-taxable		15,936			16,624		16,779		16,761			16,577			66,100			59,717
Interest on securities-tax exempt-FTE		44			58		69		92			93			263			422
Interest on fed funds sold and reverse repurchases		2			3		45		30			71			80			74
Other interest income		9,918			8,613		12,077		6,527			3,556			37,135			8,080
Total interest income-FTE		236,188			231,821		221,911		202,377			179,964			892,297			554,178
Interest on deposits		80,847			69,797		54,409		40,898			18,438			245,951			29,069
Interest on fed funds purchased and repurchases		5,347			5,375		4,865		4,832			4,762			20,419			6,127
Other interest expense		9,946			14,713		19,350		15,575			6,730			59,584			11,929
Total interest expense		96,140			89,885		78,624		61,305			29,930			325,954			47,125
Net interest income-FTE		140,048			141,936		143,287		141,072			150,034			566,343			507,053
Provision for credit losses, LHFI		7,585			8,322		8,211		3,244			6,902			27,362			21,677
Provision for credit losses, off-balance sheet
credit exposures		(888	)		104		245		(2,242	)		5,215			(2,781	)		1,215
Net interest income after provision-FTE		133,351			133,510		134,831		140,070			137,917			541,762			484,161
Service charges on deposit accounts		11,311			11,074		10,695		10,336			11,162			43,416			42,157
Bank card and other fees		8,502			8,217		8,917		7,803			8,191			33,439			36,105
Mortgage banking, net		5,519			6,458		6,600		7,639			3,408			26,216			28,306
Insurance commissions		13,197			15,303		14,764		14,305			12,019			57,569			53,721
Wealth management		8,657			8,773		8,882		8,780			8,079			35,092			35,013
Other, net		2,579			2,399		3,695		2,514			2,311			11,187			9,842
Securities gains (losses), net		39			—		—		—			—			39			—
Total noninterest income		49,804			52,224		53,553		51,377			45,170			206,958			205,144
Salaries and employee benefits		78,003			76,666		75,940		74,056			73,469			304,665			287,440
Services and fees (2)		27,906			27,882		28,264		25,426			27,709			109,478			105,469
Net occupancy-premises		7,362			7,383		7,108		7,629			7,898			29,482			29,264
Equipment expense		6,517			6,816		6,404		6,405			6,268			26,142			24,448
Litigation settlement expense (1)		—			6,500		—		—			100,750			6,500			100,750
Other expense (2)		16,641			15,698		14,502		14,811			15,135			61,652			55,842
Total noninterest expense		136,429			140,945		132,218		128,327			231,229			537,919			603,213
Income (loss) before income taxes and tax eq adj		46,726			44,789		56,166		63,120			(48,142	)		210,801			86,092
Tax equivalent adjustment		3,306			3,299		3,383		3,477			3,451			13,465			12,345
Income (loss) before income taxes		43,420			41,490		52,783		59,643			(51,593	)		197,336			73,747
Income taxes		7,297			7,461		7,746		9,343			(17,530	)		31,847			1,860
Net income (loss)	$	36,123		$	34,029	$	45,037	$	50,300		$	(34,063	)	$	165,489		$	71,887

Per share data
Earnings (loss) per share - basic	$	0.59		$	0.56	$	0.74	$	0.82		$	(0.56	)	$	2.71		$	1.17

Earnings (loss) per share - diluted	$	0.59		$	0.56	$	0.74	$	0.82		$	(0.56	)	$	2.70		$	1.17

Dividends per share	$	0.23		$	0.23	$	0.23	$	0.23		$	0.23		$	0.92		$	0.92

Weighted average shares outstanding
Basic		61,070,481			61,069,750		61,063,277		61,011,059			60,969,400			61,053,849			61,242,358

Diluted		61,296,840			61,263,032		61,230,031		61,193,275			61,173,249			61,230,621			61,431,726

Period end shares outstanding		61,071,173			61,070,095		61,069,036		61,048,516			60,977,686			61,071,173			60,977,686

(1) See Note 1 - Litigation Settlement in the Notes to Consolidated Financials for additional information.
(2) During the first quarter of 2023, Trustmark reclassified its debit card transaction fees from other expense to services and fees. Prior periods have been reclassified accordingly.

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2023
($ in thousands)
(unaudited)


	Quarter Ended
NONPERFORMING ASSETS (1)	12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022
Nonaccrual LHFI
Alabama (2)	$	23,271		$	23,530		$	11,058		$	10,919		$	12,300
Florida		170			151			334			256			227
Mississippi (3)		54,615			45,050			36,288			32,560			24,683
Tennessee (4)		1,802			1,841			5,088			5,416			5,566
Texas		20,150			20,327			22,259			23,224			23,196
Total nonaccrual LHFI		100,008			90,899			75,027			72,375			65,972
Other real estate
Alabama (2)		1,397			315			—			—			194
Mississippi (3)		1,242			942			1,137			1,495			1,769
Tennessee (4)		—			—			—			189			23
Texas		4,228			4,228			—			—			—
Total other real estate		6,867			5,485			1,137			1,684			1,986
Total nonperforming assets	$	106,875		$	96,384		$	76,164		$	74,059		$	67,958

LOANS PAST DUE OVER 90 DAYS (1)
LHFI	$	5,790		$	3,804		$	3,911		$	2,255		$	3,929

LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)	$	51,243		$	42,532		$	35,766		$	41,468		$	49,320


	Quarter Ended															Year Ended
**ACL LHFI (1)**	12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022			12/31/2023			12/31/2022
Beginning Balance	$	134,031		$	129,298		$	122,239		$	120,214		$	115,050		$	120,214		$	99,457
Provision for credit losses, LHFI		7,585			8,322			8,211			3,244			6,902			27,362			21,677
Charge-offs		(4,250	)		(7,496	)		(2,773	)		(2,996	)		(3,893	)		(17,515	)		(11,332	)
Recoveries		2,001			3,907			1,621			1,777			2,155			9,306			10,412
Net (charge-offs) recoveries		(2,249	)		(3,589	)		(1,152	)		(1,219	)		(1,738	)		(8,209	)		(920	)
Ending Balance	$	139,367		$	134,031		$	129,298		$	122,239		$	120,214		$	139,367		$	120,214

**NET (CHARGE-OFFS) RECOVERIES (1)**
Alabama (2)	$	(299	)	$	(165	)	$	(141	)	$	(268	)	$	98		$	(873	)	$	2,019
Florida		180			21			(35	)		(36	)		(60	)		130			652
Mississippi (3)		(1,943	)		(1,867	)		(762	)		(775	)		(1,657	)		(5,347	)		(2,713	)
Tennessee (4)		(193	)		2,127			(166	)		(124	)		(195	)		1,644			(790	)
Texas		6			(3,705	)		(48	)		(16	)		76			(3,763	)		(88	)
Total net (charge-offs) recoveries	$	(2,249	)	$	(3,589	)	$	(1,152	)	$	(1,219	)	$	(1,738	)	$	(8,209	)	$	(920	)

(1) Excludes PPP loans.
(2) Alabama includes the Georgia Loan Production Office.
(3) Mississippi includes Central and Southern Mississippi Regions.
(4) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2023
($ in thousands)
(unaudited)

	Quarter Ended															Year Ended
FINANCIAL RATIOS AND OTHER DATA	12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022			12/31/2023		12/31/2022
Return on average equity		9.00	%		8.53	%		11.43	%		13.39	%		-9.05	%	10.54	%	4.48	%
Return on average tangible equity		11.92	%		11.32	%		15.18	%		18.03	%		-12.14	%	14.04	%	6.00	%
Return on average assets		0.77	%		0.72	%		0.96	%		1.10	%		-0.76	%	0.89	%	0.41	%
Interest margin - Yield - FTE		5.48	%		5.38	%		5.16	%		4.87	%		4.40	%	5.22	%	3.46	%
Interest margin - Cost		2.23	%		2.08	%		1.83	%		1.47	%		0.73	%	1.91	%	0.29	%
Net interest margin - FTE		3.25	%		3.29	%		3.33	%		3.39	%		3.66	%	3.32	%	3.17	%
Efficiency ratio (1)		70.25	%		68.33	%		66.17	%		65.60	%		65.85	%	67.57	%	69.37	%
Full-time equivalent employees		2,757			2,756			2,761			2,758			2,738

CREDIT QUALITY RATIOS (2)
Net (recoveries) charge-offs / average loans		0.07	%		0.11	%		0.04	%		0.04	%		0.06	%	0.06	%	0.01	%
Provision for credit losses, LHFI / average loans		0.23	%		0.26	%		0.26	%		0.10	%		0.23	%	0.21	%	0.19	%
Nonaccrual LHFI / (LHFI + LHFS)		0.76	%		0.70	%		0.59	%		0.57	%		0.53	%
Nonperforming assets / (LHFI + LHFS)		0.81	%		0.74	%		0.60	%		0.58	%		0.55	%
Nonperforming assets / (LHFI + LHFS
+ other real estate)		0.81	%		0.74	%		0.60	%		0.58	%		0.55	%
ACL LHFI / LHFI		1.08	%		1.05	%		1.03	%		0.98	%		0.99	%
ACL LHFI-commercial / commercial LHFI		0.85	%		0.86	%		0.84	%		0.80	%		0.85	%
ACL LHFI-consumer / consumer and
home mortgage LHFI		1.81	%		1.66	%		1.60	%		1.54	%		1.41	%
ACL LHFI / nonaccrual LHFI		139.36	%		147.45	%		172.34	%		168.90	%		182.22	%
ACL LHFI / nonaccrual LHFI
(excl individually analyzed loans)		249.31	%		273.60	%		301.44	%		320.80	%		399.19	%

CAPITAL RATIOS
Total equity / total assets		8.88	%		8.54	%		8.53	%		8.28	%		8.28	%
Tangible equity / tangible assets		6.95	%		6.57	%		6.56	%		6.35	%		6.27	%
Tangible equity / risk-weighted assets		8.41	%		7.81	%		7.91	%		7.94	%		7.61	%
Tier 1 leverage ratio		8.62	%		8.49	%		8.35	%		8.29	%		8.47	%
Common equity tier 1 capital ratio		10.04	%		9.89	%		9.87	%		9.76	%		9.74	%
Tier 1 risk-based capital ratio		10.44	%		10.29	%		10.27	%		10.17	%		10.15	%
Total risk-based capital ratio		12.29	%		12.11	%		12.08	%		11.95	%		11.91	%

STOCK PERFORMANCE
Market value-Close	$	27.88		$	21.73		$	21.12		$	24.70		$	34.91
Book value	$	27.21		$	25.71		$	25.73		$	25.59		$	24.47
Tangible book value	$	20.87		$	19.37		$	19.38		$	19.24		$	18.11

(1) See Note 7 – Non-GAAP Financial Measures in the Notes to Consolidated Financials for Trustmark’s efficiency ratio calculation.
(2) Excludes PPP loans.

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
December 31, 2023
($ in thousands)
(unaudited)

Note 1 - Litigation Settlement

As previously announced, on December 31, 2022, Trustmark National Bank (TNB) agreed to a settlement in principle (the Stanford Settlement) relating to litigation involving the Stanford Financial Group. On January 13, 2023, TNB entered into a Settlement Agreement (the Stanford Settlement Agreement) reflecting the terms of the Stanford Settlement. The parties to the Stanford Settlement Agreement are, on the one hand, (i) Ralph S. Janvey, solely in his capacity as the court-appointed receiver (the Stanford Receiver) for the Stanford Receivership Estate; (ii) the Official Stanford Investors Committee; (iii) each of the plaintiffs in the Rotstain and Smith Actions; and, on the other hand, (iv) TNB. Under the terms of the Stanford Settlement Agreement, the parties agreed to settle and dismiss the Rotstain Action, the Smith Action, and all current or future claims by plaintiffs in either such Action arising from or related to Stanford. In addition, the Stanford Settlement Agreement provided that the parties would request dismissal of the Jackson Action pursuant to the terms of the bar orders described below. The Court’s approval of the Stanford Settlement Agreement, including the bar orders described below, has occurred and has been upheld on appeal, as described below. As a result, pursuant to the Stanford Settlement, TNB will make a one-time cash payment of $100.0 million to the Stanford Receiver on February 2, 2024.

The Stanford Settlement Agreement included the parties’ agreement to seek the Northern District of Texas District Court’s entry of bar orders prohibiting any continued or future claims by the plaintiffs in the Actions or by any other person or entity against TNB and its related parties relating to Stanford, whether asserted to date or not. The bar orders prohibit all litigation relating to Stanford described herein, including not only the Actions and any pending matters but also any actions that may be brought in the future. Final Court approval of these bar orders was a condition of the Stanford Settlement.

The Stanford Settlement Agreement was also subject to notice to Stanford’s investor claimants (which has been provided) and final, non-appealable approval by the U.S. District Court for the Northern District of Texas (which has occurred).

The Stanford Settlement Agreement also provides that TNB denies and makes no admission of liability or wrongdoing in connection with any Stanford matter. As has been the case throughout the pendency of the Actions, TNB expressly denies any liability or wrongdoing with respect to any matter alleged in regard to the multi-billion dollar Ponzi scheme operated by Stanford for almost 20 years. TNB’s relationship with Stanford began as a result of TNB’s acquisition of a Houston-based bank in August 2006, and consisted of ordinary banking services provided to business deposit customers.

The foregoing description of the terms of the Stanford Settlement Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Stanford Settlement Agreement, a copy of which is filed as Exhibit 10.ai to the 2022 Annual Report and is incorporated herein by reference.

On January 20, 2023, the U.S. District Court for the Northern District of Texas entered an order preliminarily finding that the Stanford Settlement is fair, reasonable, and equitable; has no obvious deficiencies; and is the product of serious, informed, good faith, and arm’s-length negotiations. Following the provision of notice as required by the Stanford Settlement Agreement and by the Court’s preliminary order, the Court (Judge David C. Godbey, presiding) held a Final Approval Hearing on May 3, 2023, at which the Court approved the Stanford Settlement from the bench. On May 4, 2023, Judge Godbey signed the written orders confirming his oral ruling, including the bar order contemplated by the Stanford Settlement Agreement and the judgment and bar order with respect to the Jackson Action.

On May 10, 2023, Robert Allen Stanford, writing from prison, appealed the District Court’s approval of the Stanford Settlement to the Fifth Circuit Court of Appeals. On June 12, 2023, the Stanford Receiver moved to dismiss the appeal as frivolous. On July 25, 2023, a three-judge panel of the Fifth Circuit issued a per curiam order dismissing Stanford’s appeal as frivolous. In July and August 2023, Mr. Stanford filed, then subsequently withdrew, a motion seeking panel rehearing of the Fifth Circuit’s July 25, 2023, decision.

When Stanford’s deadline to appeal the Fifth Circuit’s ruling to the Supreme Court of the United States passed without his filing a petition for certiorari, the trial court’s ruling approving the Stanford Settlement and entering the bar orders became final and non-appealable, as defined in the Stanford Settlement Agreement (the Stanford Settlement Effective Date). On November 14, the parties to the Rotstain and Smith Actions filed agreed dismissals of those cases, which were granted on November 27, 2023 (Smith Action) and December 18, 2023 (Rotstain Action). Those dismissals were final and non-appealable as of December 27, 2023 (Smith Action) and January 17, 2024 (Rotstain Action). Accordingly, pursuant to the Stanford Settlement Agreement, TNB will make the settlement payment on February 2, 2024, concluding the Stanford Settlement.

TNB and Trustmark Corporation determined that it was in the best interest of TNB, Trustmark Corporation and the shareholders of Trustmark Corporation to enter into the Stanford Settlement and the Stanford Settlement Agreement to eliminate the risk, ongoing expense, uncertainty as to ultimate outcome, and imposition on management and the business of TNB of further litigation of the Actions and related Stanford claims.

As previously announced, on August 30, 2023, TNB agreed to a settlement in principle (the Adams/Madison Timber Settlement) relating to litigation and claims involving Arthur Lamar Adams and Madison Timber Properties, LLC (collectively, Adams/Madison Timber). On October 9, 2023, TNB entered into a Settlement Agreement (the Adams/Madison Timber Settlement Agreement) reflecting the terms of the Adams/Madison Timber Settlement. The parties to the Adams/Madison Timber Settlement are, on the one hand, Alysson Mills in her capacity as Court-appointed Receiver (the Adams/Madison Timber Receiver); and, on the other hand, TNB. Under the terms of the Adams/Madison Timber Settlement Agreement, the parties agreed to settle and dismiss the Adams/Madison Timber Action, and the Adams/Madison Timber Receiver agreed to fully release all claims against TNB and any of its employees, agents and representatives. The Adams/Madison Timber Settlement included the parties’ agreement to seek the Court’s entry of bar orders prohibiting any continued or future claims by anyone against TNB and its related parties relating to Adams/Madison Timber, whether asserted to date or not. Final Court approval of a bar order was a condition of the Adams/Madison Timber Settlement. On November 14, 2023, the Court entered a Partial Final Judgment and Final Bar Order approving the settlement. The bar order therefore is expected to prohibit all litigation relating to Adams/Madison Timber described herein.

The Adams/Madison Timber Settlement was subject to notice to Adams/Madison Timber investors, and final, non-appealable approval by the Court and entry of a judgment dismissing the Lawsuit against TNB. No investor or other interested parties appealed the bar order before the appeal deadline passed. Accordingly, TNB made the settlement payment to the Adams/Madison Timber Receiver on January 22, 2024, concluding the Adams/Madison Timber Settlement.

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
December 31, 2023
($ in thousands)
(unaudited)

Note 1 - Litigation Settlement (continued)

At the time of the entry into the Stanford Settlement as described above, Trustmark Corporation recognized $100.0 million of litigation settlement expense, as well as an additional $750 thousand in legal fees, which were included in noninterest expense related to the Stanford litigation during the fourth quarter of 2022. As a result of the entry into the Adams/Madison Timber Settlement as described above, Trustmark Corporation recognized $6.5 million of litigation settlement expense which was included in noninterest expense related to the Adams/Madison Timber litigation during the third quarter of 2023. Trustmark Corporation expects that both the Stanford Settlement and Adams/Madison Timber Settlement will be tax deductible. Trustmark Corporation and TNB remain substantially above levels considered to be well-capitalized under all relevant standards.

Note 2 - Securities Available for Sale and Held to Maturity

The following table is a summary of the estimated fair value of securities available for sale and the amortized cost of securities held to maturity:

	*12/31/2023*		*9/30/2023*		*6/30/2023*		*3/31/2023*		*12/31/2022*
*SECURITIES AVAILABLE FOR SALE*
U.S. Treasury securities	$	372,368	$	363,476	$	362,966	$	386,903	$	391,513
U.S. Government agency obligations		5,792		6,780		6,999		7,254		7,766
Obligations of states and political subdivisions		—		4,642		4,813		4,907		4,862
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA		23,135		22,881		25,336		26,851		27,097
Issued by FNMA and FHLMC		1,176,798		1,171,521		1,250,435		1,317,848		1,345,463
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		86,074		90,402		98,388		108,192		115,140
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		98,711		106,472		122,946		132,207		132,241
Total securities available for sale	$	1,762,878	$	1,766,174	$	1,871,883	$	1,984,162	$	2,024,082

*SECURITIES HELD TO MATURITY*
U.S. Treasury securities	$	29,068	$	28,872	$	28,679	$	28,486	$	28,295
Obligations of states and political subdivisions		340		341		1,180		4,507		4,510
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA		13,005		13,090		13,235		4,336		4,442
Issued by FNMA and FHLMC		469,593		474,003		484,679		497,854		509,311
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		154,466		162,031		171,002		179,334		188,201
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		759,807		759,950		759,890		759,821		759,755
Total securities held to maturity	$	1,426,279	$	1,438,287	$	1,458,665	$	1,474,338	$	1,494,514

At December 31, 2023, the net unamortized, unrealized loss included in accumulated other comprehensive income (loss) in the accompanying balance sheet for securities held to maturity transferred from securities available for sale totaled $57.6 million.

Management continues to focus on asset quality as one of the strategic goals of the securities portfolio, which is evidenced by the investment of 99.99% of the portfolio in GSE-backed obligations and other Aaa rated securities as determined by Moody’s. None of the securities owned by Trustmark are collateralized by assets which are considered sub-prime. Furthermore, outside of stock ownership in the Federal Home Loan Bank of Dallas, Federal Home Loan Bank of Atlanta and Federal Reserve Bank, Trustmark does not hold any other equity investment in a GSE.

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
December 31, 2023
($ in thousands)
(unaudited)

Note 3 – Loan Composition

LHFI consisted of the following during the periods presented:

*LHFI BY TYPE*	*12/31/2023*			*9/30/2023*			*6/30/2023*			*3/31/2023*			*12/31/2022*
Loans secured by real estate:
Construction, land development and other land loans	$	1,510,679		$	1,609,326		$	1,722,657		$	1,723,772		$	1,719,542
Secured by 1-4 family residential properties		2,904,715			2,893,606			2,854,182			2,822,048			2,775,847
Secured by nonfarm, nonresidential properties		3,489,434			3,569,671			3,471,728			3,375,579			3,278,830
Other real estate secured		1,312,551			1,218,499			954,410			847,527			742,538
Commercial and industrial loans		1,922,910			1,828,924			1,883,480			1,882,360			1,821,259
Consumer loans		161,725			161,940			163,788			162,911			166,425
State and other political subdivision loans		1,088,466			1,056,569			1,111,710			1,193,727			1,223,863
Other loans and leases		560,044			471,724			452,012			489,271			475,735
LHFI		12,950,524			12,810,259			12,613,967			12,497,195			12,204,039
ACL LHFI		(139,367	)		(134,031	)		(129,298	)		(122,239	)		(120,214	)
Net LHFI	$	12,811,157		$	12,676,228		$	12,484,669		$	12,374,956		$	12,083,825

The following table presents the LHFI composition based upon the region where the loan was originated and reflects each region’s diversified mix of loans:

	*December 31, 2023*
*LHFI - COMPOSITION BY REGION*	*Total*		*Alabama* (1)		*Florida*		Mississippi (Central and Southern Regions)		Tennessee (Memphis, TN and Northern MS Regions)		*Texas*
Loans secured by real estate:
Construction, land development and other land loans	$	1,510,679	$	688,438	$	37,626	$	435,406	$	37,194	$	312,015
Secured by 1-4 family residential properties		2,904,715		151,446		54,998		2,582,329		84,031		31,911
Secured by nonfarm, nonresidential properties		3,489,434		960,656		233,908		1,431,968		153,226		709,676
Other real estate secured		1,312,551		583,165		1,761		396,715		7,587		323,323
Commercial and industrial loans		1,922,910		658,573		25,406		780,949		217,729		240,253
Consumer loans		161,725		22,609		7,509		101,389		20,433		9,785
State and other political subdivision loans		1,088,466		71,882		52,759		813,291		25,999		124,535
Other loans and leases		560,044		209,874		8,476		223,583		46,519		71,592
Loans	$	12,950,524	$	3,346,643	$	422,443	$	6,765,630	$	592,718	$	1,823,090

*CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION*
Lots	$	71,875	$	30,186	$	8,353	$	17,257	$	4,714	$	11,365
Development		146,655		74,015		1,262		36,690		12,649		22,039
Unimproved land		101,941		17,432		12,853		36,573		8,094		26,989
1-4 family construction		322,415		164,712		13,099		95,297		11,737		37,570
Other construction		867,793		402,093		2,059		249,589		—		214,052
Construction, land development and other land loans	$	1,510,679	$	688,438	$	37,626	$	435,406	$	37,194	$	312,015

(1) Includes Georgia Loan Production Office.

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
December 31, 2023
($ in thousands)
(unaudited)

Note 3 – Loan Composition (continued)

	*December 31, 2023*
	*Total*		*Alabama* (1)		*Florida*		Mississippi (Central and Southern Regions)		Tennessee (Memphis, TN and Northern MS Regions)		*Texas*

*LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION*
Non-owner occupied:
Retail	$	346,844	$	128,743	$	25,732	$	91,057	$	17,721	$	83,591
Office		286,511		104,114		19,857		94,294		1,649		66,597
Hotel/motel		270,740		144,403		47,111		53,227		25,999		—
Mini-storage		157,938		32,452		1,917		103,500		756		19,313
Industrial		382,737		57,386		19,762		123,306		9,730		172,553
Health care		97,783		69,352		688		25,021		333		2,389
Convenience stores		26,254		3,315		425		13,777		249		8,488
Nursing homes/senior living		508,665		229,352		—		160,359		4,901		114,053
Other		110,828		31,370		9,232		52,521		8,321		9,384
Total non-owner occupied loans		2,188,300		800,487		124,724		717,062		69,659		476,368

Owner-occupied:
Office		152,053		44,028		38,401		39,790		11,459		18,375
Churches		62,217		17,098		4,178		34,899		3,541		2,501
Industrial warehouses		159,227		11,619		4,618		40,837		16,330		85,823
Health care		125,304		11,031		6,274		87,507		2,269		18,223
Convenience stores		142,537		12,593		29,299		65,031		14		35,600
Retail		89,174		9,606		15,644		37,340		17,694		8,890
Restaurants		48,172		4,010		3,503		22,316		15,095		3,248
Auto dealerships		43,556		5,533		201		21,383		16,439		—
Nursing homes/senior living		345,108		31,644		—		287,264		—		26,200
Other		133,786		13,007		7,066		78,539		726		34,448
Total owner-occupied loans		1,301,134		160,169		109,184		714,906		83,567		233,308
Loans secured by nonfarm, nonresidential properties	$	3,489,434	$	960,656	$	233,908	$	1,431,968	$	153,226	$	709,676

(1) Includes Georgia Loan Production Office.

Note 4 – Yields on Earning Assets and Interest-Bearing Liabilities

The following table illustrates the yields on earning assets by category as well as the rates paid on interest-bearing liabilities on a tax equivalent basis:

	*Quarter Ended*															*Year Ended*
	*12/31/2023*			*9/30/2023*			*6/30/2023*			*3/31/2023*			*12/31/2022*			*12/31/2023*			*12/31/2022*
Securities – taxable		1.85	%		1.89	%		1.87	%		1.85	%		1.71	%		1.86	%		1.55	%
Securities – nontaxable		3.81	%		4.05	%		4.25	%		4.00	%		3.95	%		4.04	%		3.97	%
Securities – total		1.85	%		1.89	%		1.87	%		1.86	%		1.72	%		1.87	%		1.56	%
PPP loans		—			—			—			—			12.39	%		—			4.30	%
Loans - LHFI & LHFS		6.41	%		6.34	%		6.08	%		5.79	%		5.27	%		6.16	%		4.32	%
Loans - total		6.41	%		6.34	%		6.08	%		5.79	%		5.27	%		6.16	%		4.32	%
Fed funds sold & reverse repurchases		6.56	%		5.17	%		5.51	%		5.11	%		4.29	%		5.36	%		4.22	%
Other earning assets		5.87	%		5.01	%		5.36	%		4.09	%		3.76	%		5.10	%		0.89	%
Total earning assets		5.48	%		5.38	%		5.16	%		4.87	%		4.40	%		5.22	%		3.46	%

Interest-bearing deposits		2.67	%		2.39	%		1.96	%		1.53	%		0.71	%		2.16	%		0.28	%
Fed funds purchased & repurchases		5.26	%		5.14	%		5.01	%		4.49	%		3.44	%		4.97	%		2.16	%
Other borrowings		5.08	%		5.32	%		5.12	%		4.87	%		3.73	%		5.09	%		3.11	%
Total interest-bearing liabilities		2.89	%		2.72	%		2.42	%		1.98	%		1.03	%		2.51	%		0.43	%

Total Deposits		2.10	%		1.84	%		1.48	%		1.13	%		0.51	%		1.65	%		0.20	%

Net interest margin		3.25	%		3.29	%		3.33	%		3.39	%		3.66	%		3.32	%		3.17	%
Net interest margin excluding PPP loans
and the FRB balance		3.16	%		3.24	%		3.23	%		3.36	%		3.66	%		3.25	%		3.30	%

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
December 31, 2023
($ in thousands)
(unaudited)

Note 4 – Yields on Earning Assets and Interest-Bearing Liabilities (continued)

Reflected in the table above are yields on earning assets and liabilities, along with the net interest margin which equals reported net interest income-FTE, annualized, as a percent of average earning assets. In addition, the table includes net interest margin excluding PPP loans and the balance held at the Federal Reserve Bank of Atlanta (FRB), which equals reported net interest income-FTE excluding interest income on PPP loans and the FRB balance, annualized, as a percent of average earning assets excluding average PPP loans and the FRB balance.

For the fourth quarter of 2023, the average FRB balance totaled $572.0 million compared to $566.3 million for the third quarter of 2023 and is included in other earning assets in the accompanying average consolidated balance sheets.

The net interest margin excluding PPP loans and the FRB balance decreased 8 basis points when compared to the third quarter of 2023, totaling 3.16% for the fourth quarter of 2023, primarily due to increased costs of interest-bearing liabilities which resulted from the higher interest-rate environment and was partially offset by an increase in the yield on the loans held for investment and held for sale portfolio.

Note 5 – Mortgage Banking

Trustmark utilizes a portfolio of exchange-traded derivative instruments, such as Treasury note futures contracts and option contracts, to achieve a fair value return that offsets the changes in fair value of mortgage servicing rights (MSR) attributable to interest rates. These transactions are considered freestanding derivatives that do not otherwise qualify for hedge accounting under generally accepted accounting principles (GAAP). Changes in the fair value of these exchange-traded derivative instruments, including administrative costs, are recorded in noninterest income in mortgage banking, net and are offset by the changes in the fair value of the MSR. The MSR fair value represents the present value of future cash flows, which among other things includes decay and the effect of changes in interest rates. Ineffectiveness of hedging the MSR fair value is measured by comparing the change in value of hedge instruments to the change in the fair value of the MSR asset attributable to changes in interest rates and other market driven changes in valuation inputs and assumptions. The impact of this strategy resulted in a net negative hedge ineffectiveness of $2.2 million during the fourth quarter of 2023.

The following table illustrates the components of mortgage banking revenues included in noninterest income in the accompanying income statements:

	*Quarter Ended*															*Year Ended*
	*12/31/2023*			*9/30/2023*			*6/30/2023*			*3/31/2023*			*12/31/2022*			*12/31/2023*			*12/31/2022*
Mortgage servicing income, net	$	6,731		$	6,916		$	6,764		$	6,785		$	6,636		$	27,196		$	26,291
Change in fair value-MSR from runoff		(2,972	)		(3,203	)		(2,710	)		(1,145	)		(2,981	)		(10,030	)		(14,034	)
Gain on sales of loans, net		3,913			3,748			3,887			3,797			3,328			15,345			20,178
Mortgage banking income before hedge
ineffectiveness		7,672			7,461			7,941			9,437			6,983			32,511			32,435
Change in fair value-MSR from market changes		(10,224	)		6,809			5,898			(3,972	)		(3,348	)		(1,489	)		38,181
Change in fair value of derivatives		8,071			(7,812	)		(7,239	)		2,174			(227	)		(4,806	)		(42,310	)
Net positive (negative) hedge ineffectiveness		(2,153	)		(1,003	)		(1,341	)		(1,798	)		(3,575	)		(6,295	)		(4,129	)
Mortgage banking, net	$	5,519		$	6,458		$	6,600		$	7,639		$	3,408		$	26,216		$	28,306

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
December 31, 2023
($ in thousands)
(unaudited)

Note 6 – Other Noninterest Income and Expense

Other noninterest income consisted of the following for the periods presented:

	*Quarter Ended*															*Year Ended*
	*12/31/2023*			*9/30/2023*			*6/30/2023*			*3/31/2023*			*12/31/2022*			*12/31/2023*			*12/31/2022*
Partnership amortization for tax credit purposes	$	(2,013	)	$	(1,995	)	$	(2,019	)	$	(1,961	)	$	(1,869	)	$	(7,988	)	$	(6,211	)
Increase in life insurance cash surrender value		1,825			1,784			1,716			1,693			1,687			7,018			6,673
Other miscellaneous income		2,767			2,610			3,998			2,782			2,493			12,157			9,380
Total other, net	$	2,579		$	2,399		$	3,695		$	2,514		$	2,311		$	11,187		$	9,842

Trustmark invests in partnerships that provide income tax credits on a Federal and/or State basis (i.e., new market tax credits, low-income housing tax credits and historical tax credits). The income tax credits related to these partnerships are utilized as specifically allowed by income tax law and are recorded as a reduction in income tax expense.

Other noninterest expense consisted of the following for the periods presented:

	*Quarter Ended*												*Year Ended*
	*12/31/2023*			*9/30/2023*			*6/30/2023*		*3/31/2023*		*12/31/2022*		*12/31/2023*		*12/31/2022*
Loan expense (1)	$	2,380		$	3,130		$	3,066	$	2,538	$	2,908	$	11,114	$	12,249
Amortization of intangibles		128			129			130		288		312		675		1,434
FDIC assessment expense		4,844			3,765			2,550		2,370		2,130		13,529		7,385
Other real estate expense, net		(184	)		(40	)		171		172		18		119		1,173
Other miscellaneous expense		9,473			8,714			8,585		9,443		9,767		36,215		33,601
Total other expense (1)	$	16,641		$	15,698		$	14,502	$	14,811	$	15,135	$	61,652	$	55,842

(1) During the first quarter of 2023, Trustmark reclassified its debit card transaction fees from other expense to services and fees. Prior periods have been reclassified accordingly.

Note 7 – Non-GAAP Financial Measures

In addition to capital ratios defined by GAAP and banking regulators, Trustmark utilizes various tangible common equity measures when evaluating capital utilization and adequacy. Tangible common equity, as defined by Trustmark, represents common equity less goodwill and identifiable intangible assets. Trustmark’s Common Equity Tier 1 capital includes common stock, capital surplus and retained earnings, and is reduced by goodwill and other intangible assets, net of associated net deferred tax liabilities as well as disallowed deferred tax assets and threshold deductions as applicable.

Trustmark believes these measures are important because they reflect the level of capital available to withstand unexpected market conditions. Additionally, presentation of these measures allows readers to compare certain aspects of Trustmark’s capitalization to other organizations. These ratios differ from capital measures defined by banking regulators principally in that the numerator excludes shareholders’ equity associated with preferred securities, the nature and extent of which varies across organizations. In Management’s experience, many stock analysts use tangible common equity measures in conjunction with more traditional bank capital ratios to compare capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase accounting method in accounting for mergers and acquisitions.

These calculations are intended to complement the capital ratios defined by GAAP and banking regulators. Because GAAP does not include these capital ratio measures, Trustmark believes there are no comparable GAAP financial measures to these tangible common equity ratios. Despite the importance of these measures to Trustmark, there are no standardized definitions for them and, as a result, Trustmark’s calculations may not be comparable with other organizations. Also, there may be limits in the usefulness of these measures to investors. As a result, Trustmark encourages readers to consider its audited consolidated financial statements and the notes related thereto in their entirety and not to rely on any single financial measure.

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
December 31, 2023
($ in thousands)
(unaudited)

Note 7 – Non-GAAP Financial Measures (continued)

		*Quarter Ended*															*Year Ended*
		*12/31/2023*			*9/30/2023*			*6/30/2023*			*3/31/2023*			*12/31/2022*			*12/31/2023*			*12/31/2022*
*TANGIBLE EQUITY*
AVERAGE BALANCES
Total shareholders' equity		$	1,592,493		$	1,582,885		$	1,580,291		$	1,523,828		$	1,493,291		$	1,570,098		$	1,604,854
Less: Goodwill			(384,237	)		(384,237	)		(384,237	)		(384,237	)		(384,237	)		(384,237	)		(384,237	)
Identifiable intangible assets			(3,044	)		(3,174	)		(3,301	)		(3,523	)		(3,816	)		(3,259	)		(4,312	)
Total average tangible equity		$	1,205,212		$	1,195,474		$	1,192,753		$	1,136,068		$	1,105,238		$	1,182,602		$	1,216,305

PERIOD END BALANCES
Total shareholders' equity		$	1,661,847		$	1,570,351		$	1,571,193		$	1,562,099		$	1,492,268
Less: Goodwill			(384,237	)		(384,237	)		(384,237	)		(384,237	)		(384,237	)
Identifiable intangible assets			(2,965	)		(3,093	)		(3,222	)		(3,352	)		(3,640	)
Total tangible equity	(a)	$	1,274,645		$	1,183,021		$	1,183,734		$	1,174,510		$	1,104,391

*TANGIBLE ASSETS*
Total assets		$	18,722,189		$	18,390,839		$	18,422,626		$	18,877,178		$	18,015,478
Less: Goodwill			(384,237	)		(384,237	)		(384,237	)		(384,237	)		(384,237	)
Identifiable intangible assets			(2,965	)		(3,093	)		(3,222	)		(3,352	)		(3,640	)
Total tangible assets	(b)	$	18,334,987		$	18,003,509		$	18,035,167		$	18,489,589		$	17,627,601
Risk-weighted assets	(c)	$	15,153,263		$	15,143,531		$	14,966,614		$	14,793,893		$	14,521,078

*NET INCOME (LOSS) ADJUSTED FOR INTANGIBLE AMORTIZATION*
Net income (loss)		$	36,123		$	34,029		$	45,037		$	50,300		$	(34,063	)	$	165,489		$	71,887
Plus: Intangible amortization net of tax			96			96			97			216			234			505			1,076
Net income (loss) adjusted for intangible amortization		$	36,219		$	34,125		$	45,134		$	50,516		$	(33,829	)	$	165,994		$	72,963
Period end common shares outstanding	(d)		61,071,173			61,070,095			61,069,036			61,048,516			60,977,686

*TANGIBLE COMMON EQUITY MEASUREMENTS*
Return on average tangible equity (1)			11.92	%		11.32	%		15.18	%		18.03	%		-12.14	%		14.04	%		6.00	%
Tangible equity/tangible assets	(a)/(b)		6.95	%		6.57	%		6.56	%		6.35	%		6.27	%
Tangible equity/risk-weighted assets	(a)/(c)		8.41	%		7.81	%		7.91	%		7.94	%		7.61	%
Tangible book value	(a)/(d)*1,000	$	20.87		$	19.37		$	19.38		$	19.24		$	18.11

*COMMON EQUITY TIER 1 CAPITAL (CET1)*
Total shareholders' equity		$	1,661,847		$	1,570,351		$	1,571,193		$	1,562,099		$	1,492,268
CECL transition adjustment			13,000			13,000			13,000			13,000			19,500
AOCI-related adjustments			219,723			287,888			265,704			242,381			275,403
CET1 adjustments and deductions:
Goodwill net of associated deferred
tax liabilities (DTLs)			(370,212	)		(370,219	)		(370,227	)		(370,234	)		(370,241	)
Other adjustments and deductions
for CET1 (2)			(2,693	)		(2,803	)		(2,915	)		(3,275	)		(3,258	)
CET1 capital	(e)		1,521,665			1,498,217			1,476,755			1,443,971			1,413,672
Additional tier 1 capital instruments
plus related surplus			60,000			60,000			60,000			60,000			60,000
Tier 1 capital		$	1,581,665		$	1,558,217		$	1,536,755		$	1,503,971		$	1,473,672

Common equity tier 1 capital ratio	(e)/(c)		10.04	%		9.89	%		9.87	%		9.76	%		9.74	%

(1) Calculation = ((net income (loss) adjusted for intangible amortization/number of days in period)number of days in year)/total average tangible equity.* (2) Includes other intangible assets, net of DTLs, disallowed deferred tax assets (DTAs), threshold deductions and transition adjustments, as applicable.

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
December 31, 2023
($ in thousands)
(unaudited)

Note 7 – Non-GAAP Financial Measures (continued)

Trustmark discloses certain non-GAAP financial measures because Management uses these measures for business planning purposes, including to manage Trustmark’s business against internal projected results of operations and to measure Trustmark’s performance. Trustmark views these as measures of our core operating business, which exclude the impact of the items detailed below, as these items are generally not operational in nature. These non-GAAP financial measures also provide another basis for comparing period-to-period results as presented in the accompanying selected financial data table and the audited consolidated financial statements by excluding potential differences caused by non-operational and unusual or non-recurring items. Readers are cautioned that these adjustments are not permitted under GAAP. Trustmark encourages readers to consider its consolidated financial statements and the notes related thereto in their entirety, and not to rely on any single financial measure.

The following table presents pre-provision net revenue (PPNR) during the periods presented:

			*Quarter Ended*													*Year Ended*
			*12/31/2023*			*9/30/2023*			*6/30/2023*		*3/31/2023*		*12/31/2022*			*12/31/2023*			*12/31/2022*

Net interest income (GAAP)			$	136,742		$	138,637		$	139,904	$	137,595	$	146,583		$	552,878		$	494,708
Noninterest income (GAAP)				49,804			52,224			53,553		51,377		45,170			206,958			205,144
Pre-provision revenue		(a)	$	186,546		$	190,861		$	193,457	$	188,972	$	191,753		$	759,836		$	699,852

Noninterest expense (GAAP)			$	136,429		$	140,945		$	132,218	$	128,327	$	231,229		$	537,919		$	603,213
Less:	Reduction in force expense			(1,406	)		—			—		—		—			(1,406	)		—
	Litigation settlement expense			—			(6,500	)		—		—		(100,750	)		(6,500	)		(100,750	)
Adjusted noninterest expense - PPNR (Non-GAAP)		(b)	$	135,023		$	134,445		$	132,218	$	128,327	$	130,479		$	530,013		$	502,463

PPNR (Non-GAAP)		(a)-(b)	$	51,523		$	56,416		$	61,239	$	60,645	$	61,274		$	229,823		$	197,389

The following table presents adjustments to net income (loss) and select financial ratios as reported in accordance with GAAP resulting from significant non-routine items occurring during the periods presented:

	*Quarter Ended*												*Year Ended*
	*12/31/2023*						*12/31/2022*						*12/31/2023*						*12/31/2022*
	*Amount*			Diluted EPS			*Amount*			Diluted EPS			*Amount*			Diluted EPS			*Amount*			Diluted EPS

Net income (loss) (GAAP)	$	36,123		$	0.59		$	(34,063	)	$	(0.56	)	$	165,489		$	2.70		$	71,887		$	1.17

Significant non-routine transactions (net of taxes):
Reduction in force expense		1,055			0.02			—			—			1,055			0.02			—			—
Litigation settlement expense		—			—			75,563			1.24			4,875			0.08			75,563			1.23
Net income adjusted for significant non-routine
transactions (Non-GAAP)	$	37,178		$	0.61		$	41,500		$	0.68		$	171,419		$	2.80		$	147,450		$	2.40


	Reported (GAAP)			Adjusted (Non- GAAP)			Reported (GAAP)			Adjusted (Non- GAAP)			Reported (GAAP)			Adjusted (Non- GAAP)			Reported (GAAP)			Adjusted (Non- GAAP)
Return on average equity		9.00	%		9.23	%		-9.05	%		10.75	%		10.54	%		10.90	%		4.48	%		9.13	%
Return on average tangible equity		11.92	%		12.22	%		-12.14	%		14.49	%		14.04	%		14.51	%		6.00	%		12.12	%
Return on average assets		0.77	%		0.79	%		-0.76	%		0.93	%		0.89	%		0.92	%		0.41	%		0.84	%

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
December 31, 2023
($ in thousands)
(unaudited)

Note 7 – Non-GAAP Financial Measures (continued)

The following table presents Trustmark’s calculation of its efficiency ratio for the periods presented:

			*Quarter Ended*															*Year Ended*
			*12/31/2023*			*9/30/2023*			*6/30/2023*			*3/31/2023*			*12/31/2022*			*12/31/2023*			*12/31/2022*

Total noninterest expense (GAAP)			$	136,429		$	140,945		$	132,218		$	128,327		$	231,229		$	537,919		$	603,213
Less:	Other real estate expense, net			184			40			(171	)		(172	)		(18	)		(119	)		(1,173	)
	Amortization of intangibles			(128	)		(129	)		(130	)		(288	)		(312	)		(675	)		(1,434	)
	Charitable contributions resulting in
	state tax credits			(325	)		(325	)		(325	)		(325	)		(375	)		(1,300	)		(1,500	)
	Reduction in force expense			(1,406	)		—			—			—			—			(1,406	)		—
	Litigation settlement expense			—			(6,500	)		—			—			(100,750	)		(6,500	)		(100,750	)
Adjusted noninterest expense (Non-GAAP)		(c)	$	134,754		$	134,031		$	131,592		$	127,542		$	129,774		$	527,919		$	498,356

Net interest income (GAAP)			$	136,742		$	138,637		$	139,904		$	137,595		$	146,583		$	552,878		$	494,708
Add:	Tax equivalent adjustment			3,306			3,299			3,383			3,477			3,451			13,465			12,345
Net interest income-FTE (Non-GAAP)		(a)	$	140,048		$	141,936		$	143,287		$	141,072		$	150,034		$	566,343		$	507,053

Noninterest income (GAAP)			$	49,804		$	52,224		$	53,553		$	51,377		$	45,170		$	206,958		$	205,144
Add:	Partnership amortization for tax credit purposes			2,013			1,995			2,019			1,961			1,869			7,988			6,211
Less:	Securities (gains) losses, net			(39	)		—			—			—			—			(39	)		—
Adjusted noninterest income (Non-GAAP)		(b)	$	51,778		$	54,219		$	55,572		$	53,338		$	47,039		$	214,907		$	211,355

Adjusted revenue (Non-GAAP)		(a)+(b)	$	191,826		$	196,155		$	198,859		$	194,410		$	197,073		$	781,250		$	718,408

Efficiency ratio (Non-GAAP)		(c)/((a)+(b))		70.25	%		68.33	%		66.17	%		65.60	%		65.85	%		67.57	%		69.37	%

View source version on businesswire.com: https://www.businesswire.com/news/home/20240123799186/en/

Trustmark Investor Contacts:

Thomas C. Owens

Treasurer and Principal Financial Officer

601-208-7853

F. Joseph Rein, Jr.

Senior Vice President

601-208-6898

Trustmark Media Contact:

Melanie A. Morgan

Senior Vice President

601-208-2979

Source: Trustmark Corporation

FAQ

What is Trustmark Corporation's ticker symbol?

Trustmark Corporation's ticker symbol is TRMK.

What was Trustmark Corporation's net income in Q4 2023?

Trustmark Corporation reported a net income of $36.1 million in Q4 2023.

What was Trustmark Corporation's full-year net income in 2023?

Trustmark Corporation's full-year net income in 2023 totaled $165.5 million.

What is the quarterly cash dividend declared by Trustmark Corporation?

Trustmark Corporation declared a quarterly cash dividend of $0.23 per share.

How much did loans held for investment increase in 2023?

Loans held for investment (HFI) increased by 6.1% in 2023.

By how much did deposits increase in 2023?

Deposits increased by 7.8% in 2023.

What percentage of total revenue did noninterest income represent?

Noninterest income represented 27.2% of total revenue.

What was Trustmark Corporation's net interest margin in the fourth quarter?

The net interest margin totaled 3.25% in the fourth quarter.

What was Trustmark Corporation's tangible book value per share at December 31, 2023?

Tangible book value per share was $20.87 at December 31, 2023.

What was the total cost of interest-bearing liabilities in the fourth quarter of 2023?

The total cost of interest-bearing liabilities was 2.89% for the fourth quarter of 2023.

Trustmark Corporation Announces Fourth Quarter and Fiscal Year 2023 Financial Results

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FAQ

What is Trustmark Corporation's ticker symbol?

What was Trustmark Corporation's net income in Q4 2023?

What was Trustmark Corporation's full-year net income in 2023?

What is the quarterly cash dividend declared by Trustmark Corporation?

How much did loans held for investment increase in 2023?

By how much did deposits increase in 2023?

What percentage of total revenue did noninterest income represent?

What was Trustmark Corporation's net interest margin in the fourth quarter?

What was Trustmark Corporation's tangible book value per share at December 31, 2023?

What was the total cost of interest-bearing liabilities in the fourth quarter of 2023?

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Trustmark Corporation Announces Fourth Quarter and Fiscal Year 2023 Financial Results

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FAQ

What is Trustmark Corporation's ticker symbol?

What was Trustmark Corporation's net income in Q4 2023?

What was Trustmark Corporation's full-year net income in 2023?

What is the quarterly cash dividend declared by Trustmark Corporation?

How much did loans held for investment increase in 2023?

By how much did deposits increase in 2023?

What percentage of total revenue did noninterest income represent?

What was Trustmark Corporation's net interest margin in the fourth quarter?

What was Trustmark Corporation's tangible book value per share at December 31, 2023?

What was the total cost of interest-bearing liabilities in the fourth quarter of 2023?

NASDAQ:TRMK

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