Trustmark Corporation Announces Third Quarter 2024 Financial Results

Rhea-AI Summary

Trustmark (NASDAQGS:TRMK) reported net income of $51.3 million in the third quarter of 2024, with diluted earnings per share of $0.84. This represents a 26.7% increase in net income from adjusted continuing operations compared to the previous quarter. Key highlights include:

- Net interest income (FTE) increased 9.5% to $158.0 million
- Net interest margin improved to 3.69%, up 31 basis points
- Loans held for investment totaled $13.1 billion, up 2.3% year-over-year
- Deposits totaled $15.2 billion, up 0.9% year-over-year
- Efficiency ratio improved 282 basis points to 60.99%
- Return on average tangible equity of 12.86%

The Board of Directors declared a quarterly cash dividend of $0.23 per share payable December 15, 2024.

Positive

• Net income from adjusted continuing operations increased 26.7% to $51.3 million
• Net interest income (FTE) grew 9.5% to $158.0 million
• Net interest margin improved by 31 basis points to 3.69%
• Efficiency ratio improved by 282 basis points to 60.99%
• Return on average tangible equity of 12.86%
• Tangible book value per share increased 32.9% year-over-year to $26.88

Negative

• Loans held for investment decreased 0.4% from the prior quarter
• Deposits decreased 1.4% from the previous quarter
• Nonaccrual loans increased by $29.5 million from the prior quarter
• Net charge-offs totaled $4.7 million in the third quarter

Insights

Financial Analyst

Trustmark 's Q3 2024 results show significant improvement in profitability and efficiency. Net income from adjusted continuing operations increased by 26.7% quarter-over-quarter to $51.3 million, with diluted EPS of $0.84. The efficiency ratio improved by 282 basis points to 60.99%, indicating better cost management.

Key highlights include:

• Net interest income (FTE) increased by 9.5% to $158 million, with net interest margin expanding 31 basis points to 3.69%
• Loans held for investment slightly decreased by 0.4% quarter-over-quarter but increased 2.3% year-over-year
• Deposits decreased 1.4% quarter-over-quarter but increased 0.9% year-over-year
• Return on average tangible equity of 12.86% and return on average assets of 1.10%

The bank's capital position remains strong with a CET1 ratio of 11.30% and total risk-based capital ratio of 13.71%. The 6.5% increase in tangible book value per share to $26.88 is particularly noteworthy, reflecting improved shareholder value.

Overall, Trustmark's Q3 performance demonstrates resilience and strategic execution in a challenging economic environment, positioning the bank well for future growth.

Credit Risk Analyst

Trustmark's credit quality metrics present a mixed picture in Q3 2024. While the allowance for credit losses (ACL) remains robust at 1.21% of loans held for investment, there are some concerning trends:

• Nonaccrual loans increased by $29.5 million quarter-over-quarter to $73.8 million, though still down year-over-year
• Net charge-offs rose to $4.7 million, or 0.14% of average loans (annualized)
• The net provision for credit losses was $6.5 million, down from $19.7 million in Q2 but still significant

The increase in nonperforming assets to 0.58% of loans HFI and loans held for sale warrants attention. However, the ACL coverage of nonaccrual loans remains strong at 497.27%, excluding individually evaluated loans.

The bank's proactive approach to credit risk management, including the recent sale of delinquent mortgages, is prudent given economic uncertainties. Continued vigilance in monitoring credit quality will be important in the coming quarters.

Performance Reflects Increased Earnings, Enhanced Profitability, and Strengthened Capital Flexibility

JACKSON, Miss.--(BUSINESS WIRE)-- Trustmark Corporation (NASDAQGS:TRMK) reported net income of $51.3 million in the third quarter of 2024, representing diluted earnings per share of $0.84. In the second quarter of 2024, Trustmark reported net income of $73.8 million, representing diluted earnings per share of $1.20 and net income from adjusted continuing operations⁽¹⁾ of $40.5 million, or $0.66 per diluted share. Net income from adjusted continuing operations⁽¹⁾ increased $10.8 million, or 26.7%, linked-quarter.

Printer friendly version of earnings release with consolidated financial statements and notes: https://www.businesswire.com/news/home/54139686/en

Financial results in the second quarter of 2024, which included the sale of Fisher Brown Bottrell Insurance, Inc. (FBBI), consisted of both continuing operations and discontinued operations. The discontinued operations included the financial results of FBBI prior to the sale as well as the gain on sale in the second quarter. The discontinued operations results are presented as a single line item below income from continuing operations and as separate lines in the balance sheet in the accompanying tables for all periods presented. Financial results from adjusted continuing operations⁽¹⁾ exclude significant non-routine transactions.

The Board of Directors declared a quarterly cash dividend of $0.23 per share payable December 15, 2024, to shareholders of record on December 1, 2024.

Third Quarter Highlights

• Net income from adjusted continuing operations⁽¹⁾ increased $10.8 million, or 26.7%, linked-quarter to $51.3 million
• Net interest income (FTE) increased $13.7 million, or 9.5%, linked-quarter to $158.0 million, resulting in a net interest margin of 3.69%, up 31 basis points from the prior quarter
• Loans held for investment (HFI) totaled $13.1 billion, a decrease of $55.3 million, or 0.4%, from the prior quarter and an increase of $289.9 million, or 2.3%, year-over-year
• Deposits totaled $15.2 billion, down $222.0 million, or 1.4%, linked-quarter, and up $139.0 million, or 0.9%, year-over-year; excluding targeted reductions in public and brokered deposits totaling $529.7 million, deposits increased $307.7 million, or 2.1%, linked-quarter
• Achieved return on average tangible equity of 12.86% and return on average assets of 1.10%
• Efficiency ratio improved 282 basis points to 60.99% in the third quarter

Duane A. Dewey, President and CEO, stated, “Trustmark’s third quarter results reflect significant achievement across the organization. Profitability meaningfully increased as evidenced by the 26.7% growth in net income from adjusted continuing operations⁽¹⁾ and a 282 basis point improvement in the efficiency ratio. The restructuring of the investment securities portfolio in the second quarter was a major contributor to the 9.5% increase in net interest income in the third quarter. These accomplishments are the result of focused efforts to enhance Trustmark’s long-term performance and competitiveness. We continue to implement technology and streamline processes to enhance our ability to grow and serve customers. Trustmark is well-positioned to compete in changing economic conditions and create long-term value for our shareholders.”

Balance Sheet Management

• Loans HFI totaled $13.1 billion, down 0.4% from the prior quarter and up 2.3% year-over-year
• Deposits totaled $15.2 billion, down 1.4% from the previous quarter and up 0.9% year-over-year
• Enhanced strong capital position with CET1 ratio of 11.30% and total risk-based capital ratio of 13.71%

Loans HFI totaled $13.1 billion at September 30, 2024, reflecting a decrease of $55.3 million, or 0.4%, linked-quarter and an increase of $289.9 million, or 2.3%, year-over-year. The linked-quarter change reflected decreases in commercial and industrial loans, state and other political subdivision loans, and commercial real estate loans offset in part by increases in other real estate secured loans, other loans and leases (equipment finance), and 1-4 family mortgage loans. Trustmark’s loan portfolio continues to be well-diversified by loan type and geography.

Deposits totaled $15.2 billion at September 30, 2024, down $222.0 million, or 1.4%, from the prior quarter and an increase of $139.0 million, or 0.9%, year-over-year. Excluding targeted reductions in public deposits of $330.1 million and brokered deposits of $199.6 million, deposits increased $307.7 million, or 2.1%, linked-quarter. Trustmark continues to maintain a strong liquidity position as loans HFI represented 86.0% of total deposits at September 30, 2024. Noninterest-bearing deposits represented 20.6% of total deposits at September 30, 2024, compared to 20.4% of total deposits at June 30, 2024. The cost of interest-bearing deposits increased 6 basis points to 2.81% for the third quarter, while the cost of total deposits was 2.22%, up 4 basis points from the prior quarter. The total cost of interest-bearing liabilities was 2.94% for the third quarter, down 1 basis point linked-quarter.

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. As of September 30, 2024, Trustmark had not repurchased any of its outstanding common shares under this program. At September 30, 2024, Trustmark’s tangible equity to tangible assets ratio was 9.07%, up 55 basis points from the prior quarter, while the total risk-based capital ratio was 13.71%, up 42 basis points from the prior quarter. Tangible book value per share was $26.88 at September 30, 2024, an increase of 6.5% from the prior quarter and 32.9% from the prior year.

Credit Quality

• Net charge-offs totaled $4.7 million in the third quarter, representing 0.14% of average loans
• Net provision for credit losses totaled $6.5 million for the third quarter
• Allowance for credit losses (ACL) represented 1.21% of loans HFI and 497.27% of nonaccrual loans, excluding individually evaluated loans at September 30, 2024

Nonaccrual loans totaled $73.8 million at September 30, 2024, reflecting an increase of $29.5 million from the prior quarter and a decline of $17.1 million year-over-year. Other real estate totaled $3.9 million, reflecting a decrease of $2.7 million from the prior quarter and $1.6 million from the prior year. Collectively, nonperforming assets totaled $77.7 million at September 30, 2024, up $26.9 million from the prior quarter and down $18.6 million from the prior year. Nonperforming assets represented 0.58% of loans HFI and loans held for sale at September 30, 2024.

The net provision for credit losses totaled $6.5 million in the third quarter compared to $19.7 million in the second quarter (which included a $8.6 million provision related to the Mortgage Loan Sale) and $8.4 million in the third quarter of 2023. The provision for credit losses for loans HFI was $7.9 million in the third quarter and was primarily attributable to specific reserves for individually analyzed credits and net adjustments to the qualitative factors. The provision for credit losses for off-balance sheet credit exposures was a negative $1.4 million, primarily driven by decreases in unfunded commitments.

Allocation of Trustmark’s $157.9 million ACL on loans HFI represented 1.08% of commercial loans and 1.64% of consumer and home mortgage loans, resulting in an ACL to total loans HFI of 1.21% at September 30, 2024. Management believes the level of the ACL is commensurate with the credit losses currently expected in the loan portfolio.

Revenue Generation

• Total revenue expanded to $192.3 million in the third quarter
• Net interest income (FTE) totaled $158.0 million in the third quarter, up 9.5% linked-quarter
• Noninterest income totaled $37.6 million in the third quarter

Total revenue in the third quarter was $192.3 million; in the second quarter total revenue was negative $0.3 million while revenue from adjusted continuing operations⁽¹⁾ was $179.3 million; total revenue from adjusted continuing operations⁽¹⁾ increased $13.0 million, or 7.3%, linked-quarter.

Net interest income (FTE) in the third quarter totaled $158.0 million, resulting in a net interest margin of 3.69%, up 31 basis points from the prior quarter. The increase in the net interest margin was primarily due to increased yields on the securities portfolio, while the loans HFI and held for sale portfolio remained relatively flat, offset by the increase in the cost of interest-bearing deposits.

Noninterest income in the third quarter totaled $37.6 million; in the second quarter noninterest income was a negative $141.3 million while noninterest income from adjusted continuing operations⁽¹⁾ totaled $38.2 million. Noninterest income from adjusted continuing operations⁽¹⁾ decreased $0.7 million, or 1.8%, from the prior quarter and increased $0.6 million, or 1.7% year-over-year. Service charges on deposit accounts totaled $11.3 million in the third quarter, an increase of $0.3 million, or 3.2% from the prior quarter and $0.2 million, or 1.8%, year-over-year. Bank card and other fees totaled $7.9 million in the third quarter, down $1.3 million linked-quarter and $0.3 million year-over-year. The linked-quarter change reflects reduced customer derivative revenue and seasonal declines in miscellaneous other revenue. Other, net totaled $3.0 million in the third quarter. Excluding the Visa C shares positive fair value adjustment of $8.1 million and the non-credit related loss on sale of 1-4 family mortgage loans of $4.8 million in the second quarter, other, net declined $1.3 million linked-quarter.

Mortgage loan production in the third quarter totaled $392.1 million, an increase of 3.3% from the prior quarter and 0.6% year-over-year. Mortgage banking revenue totaled $6.1 million in the third quarter, an increase of $1.9 million linked-quarter and a decrease of $0.3 million year-over-year. The linked-quarter increase was principally attributable to decreased net negative hedge ineffectiveness, which was offset in part by lower gains on sale of mortgage loans.

Wealth management revenue in the third quarter totaled $9.3 million, a decrease of $0.4 million, or 4.2%, from the prior quarter and an increase of $0.5 million, or 5.9%, year-over-year. The linked-quarter change reflected a seasonal decline in trust management and investment services revenue while the year-over-year increase reflected expanded brokerage revenue.

Noninterest Expense

• Noninterest expense increased $4.9 million, or 4.2%, linked-quarter
• Salaries and employee benefits expense increased $1.9 million, or 2.9%, linked quarter, reflecting annual merit increases, annual incentive accruals, and commissions
• Other real estate expense, net increased $2.1 million, all of which relates to the establishment of a reserve for a single property

Noninterest expense in the third quarter totaled $123.3 million, an increase of $4.9 million, or 4.2%, when compared to the prior quarter and a year-over-year decline of $0.5 million, or 0.4%, excluding the litigation settlement expense incurred in the third quarter of 2023. Salaries and employee benefits expense increased $1.9 million, or 2.9%, linked-quarter principally due to annual merit increases effective July 1, mortgage banking commissions and annual incentive-based accruals as a result of strong operating performance. Salaries and employee benefits expense in the third quarter declined $0.7 million, or 1.0%, from levels one year earlier. Other expense totaled $17.3 million in the third quarter, an increase of $2.1 million linked-quarter and $2.3 million year-over-year. The linked-quarter and year-over-year changes are attributable to an increase in other real estate expense, net related to the establishment of a reserve for a single property under contract to sell in the fourth quarter of 2024.

⁽¹⁾ Please refer to Consolidated Financial Information, Note 1 – Significant Non-Routine Transactions and Note 7 – Non-GAAP Financial Measures.

Significant Non-Routine Transactions in the Second Quarter

• Completed sale of FBBI, producing a gain on sale of $228.3 million ($171.2 million, net of taxes)
• Restructured investment securities portfolio; sold available for sale securities of $1.6 billion with an average yield of 1.36%, which generated a loss of $182.8 million ($137.1 million, net of taxes); purchased $1.4 billion of available for sale securities with an average yield of 4.85%
• Sold a portfolio of 1-4 family mortgage loans that were three payments delinquent and/or nonaccrual at time of selection totaling $56.2 million (Mortgage Loan Sale) which generated a loss of $13.4 million ($10.1 million, net of taxes); sale drove a $54.1 million reduction in nonperforming loans
• Exchanged Visa Class B-1 shares for Visa Class B-2 shares and Visa Class C common stock; Visa Class C stock exchange resulted in a gain of $8.1 million ($6.0 million, net of taxes)

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, October 23, 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, November 6, 2024, in archived format at the same web address or by calling (877) 344-7529, passcode 9091375.

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, 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
September 30, 2024
($ in thousands)
(unaudited)
													Linked Quarter							Year over Year
QUARTERLY AVERAGE BALANCES	9/30/2024				6/30/2024				9/30/2023				$ Change				% Change			$ Change				% Change
Securities AFS-taxable	$	1,658,999			$	1,866,227			$	2,049,006			$	(207,228	)		-11.1	%		$	(390,007	)		-19.0	%
Securities AFS-nontaxable		—				—				4,779				—			n/m				(4,779	)		-100.0	%
Securities HTM-taxable		1,368,943				1,421,246				1,445,895				(52,303	)		-3.7	%			(76,952	)		-5.3	%
Securities HTM-nontaxable		—				112				907				(112	)		-100.0	%			(907	)		-100.0	%
Total securities		3,027,942				3,287,585				3,500,587				(259,643	)		-7.9	%			(472,645	)		-13.5	%
Loans (includes loans held for sale)		13,379,658				13,309,127				12,926,942				70,531			0.5	%			452,716			3.5	%
Fed funds sold and reverse repurchases		653				110				230				543			n/m				423			n/m
Other earning assets		607,275				592,625				682,644				14,650			2.5	%			(75,369	)		-11.0	%
Total earning assets		17,015,528				17,189,447				17,110,403				(173,919	)		-1.0	%			(94,875	)		-0.6	%
Allowance for credit losses (ACL), loans held
for investment (LHFI)		(154,476	)			(143,245	)			(127,915	)			(11,231	)		-7.8	%			(26,561	)		-20.8	%
Other assets		1,646,241				1,740,307				1,721,310				(94,066	)		-5.4	%			(75,069	)		-4.4	%
Total assets	$	18,507,293			$	18,786,509			$	18,703,798			$	(279,216	)		-1.5	%		$	(196,505	)		-1.1	%
Interest-bearing demand deposits	$	5,382,346			$	5,222,369			$	4,875,714			$	159,977			3.1	%		$	506,632			10.4	%
Savings deposits		3,411,961				3,653,966				3,642,158				(242,005	)		-6.6	%			(230,197	)		-6.3	%
Time deposits		3,393,216				3,346,046				3,075,224				47,170			1.4	%			317,992			10.3	%
Total interest-bearing deposits		12,187,523				12,222,381				11,593,096				(34,858	)		-0.3	%			594,427			5.1	%
Fed funds purchased and repurchases		375,559				434,760				414,696				(59,201	)		-13.6	%			(39,137	)		-9.4	%
Other borrowings		339,417				534,350				912,151				(194,933	)		-36.5	%			(572,734	)		-62.8	%
Subordinated notes		123,611				123,556				123,391				55			0.0	%			220			0.2	%
Junior subordinated debt securities		61,856				61,856				61,856				—			0.0	%			—			0.0	%
Total interest-bearing liabilities		13,087,966				13,376,903				13,105,190				(288,937	)		-2.2	%			(17,224	)		-0.1	%
Noninterest-bearing deposits		3,221,516				3,183,524				3,429,815				37,992			1.2	%			(208,299	)		-6.1	%
Other liabilities		274,563				498,593				585,908				(224,030	)		-44.9	%			(311,345	)		-53.1	%
Total liabilities		16,584,045				17,059,020				17,120,913				(474,975	)		-2.8	%			(536,868	)		-3.1	%
Shareholders' equity		1,923,248				1,727,489				1,582,885				195,759			11.3	%			340,363			21.5	%
Total liabilities and equity	$	18,507,293			$	18,786,509			$	18,703,798			$	(279,216	)		-1.5	%		$	(196,505	)		-1.1	%
n/m - percentage changes greater than +/- 100% are considered not meaningful
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2024
($ in thousands)
(unaudited)
													Linked Quarter							Year over Year
PERIOD END BALANCES	9/30/2024				6/30/2024				9/30/2023				$ Change				% Change			$ Change				% Change
Cash and due from banks	$	805,436			$	822,141			$	750,292			$	(16,705	)		-2.0	%		$	55,144			7.3	%
Fed funds sold and reverse repurchases		10,000				—				—				10,000			n/m				10,000			n/m
Securities available for sale		1,725,795				1,621,659				1,766,174				104,136			6.4	%			(40,379	)		-2.3	%
Securities held to maturity		1,358,358				1,380,487				1,438,287				(22,129	)		-1.6	%			(79,929	)		-5.6	%
Loans held for sale (LHFS)		216,454				185,698				169,244				30,756			16.6	%			47,210			27.9	%
Loans held for investment (LHFI)		13,100,111				13,155,418				12,810,259				(55,307	)		-0.4	%			289,852			2.3	%
ACL LHFI		(157,929	)			(154,685	)			(134,031	)			(3,244	)		-2.1	%			(23,898	)		-17.8	%
Net LHFI		12,942,182				13,000,733				12,676,228				(58,551	)		-0.5	%			265,954			2.1	%
Premises and equipment, net		236,151				232,681				230,402				3,470			1.5	%			5,749			2.5	%
Mortgage servicing rights		125,853				136,658				142,379				(10,805	)		-7.9	%			(16,526	)		-11.6	%
Goodwill		334,605				334,605				334,605				—			0.0	%			—			0.0	%
Identifiable intangible assets		153				181				269				(28	)		-15.5	%			(116	)		-43.1	%
Other real estate		3,920				6,586				5,485				(2,666	)		-40.5	%			(1,565	)		-28.5	%
Operating lease right-of-use assets		36,034				36,925				37,115				(891	)		-2.4	%			(1,081	)		-2.9	%
Other assets		685,431				694,133				770,684				(8,702	)		-1.3	%			(85,253	)		-11.1	%
Assets of discontinued operations		—				—				69,675				—			n/m				(69,675	)		-100.0	%
Total assets	$	18,480,372			$	18,452,487			$	18,390,839			$	27,885			0.2	%		$	89,533			0.5	%
Deposits:
Noninterest-bearing	$	3,142,792			$	3,153,506			$	3,320,124			$	(10,714	)		-0.3	%		$	(177,332	)		-5.3	%
Interest-bearing		12,098,143				12,309,382				11,781,799				(211,239	)		-1.7	%			316,344			2.7	%
Total deposits		15,240,935				15,462,888				15,101,923				(221,953	)		-1.4	%			139,012			0.9	%
Fed funds purchased and repurchases		365,643				314,121				321,799				51,522			16.4	%			43,844			13.6	%
Other borrowings		443,458				336,687				793,193				106,771			31.7	%			(349,735	)		-44.1	%
Subordinated notes		123,647				123,592				123,427				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		28,890				30,265				34,945				(1,375	)		-4.5	%			(6,055	)		-17.3	%
Operating lease liabilities		39,689				40,517				40,150				(828	)		-2.0	%			(461	)		-1.1	%
Other liabilities		196,158				203,420				331,066				(7,262	)		-3.6	%			(134,908	)		-40.7	%
Liabilities of discontinued operations		—				—				12,129				—			n/m				(12,129	)		-100.0	%
Total liabilities		16,500,276				16,573,346				16,820,488				(73,070	)		-0.4	%			(320,212	)		-1.9	%
Common stock		12,753				12,753				12,724				—			0.0	%			29			0.2	%
Capital surplus		163,156				161,834				158,316				1,322			0.8	%			4,840			3.1	%
Retained earnings		1,833,232				1,796,111				1,687,199				37,121			2.1	%			146,033			8.7	%
Accumulated other comprehensive
income (loss), net of tax		(29,045	)			(91,557	)			(287,888	)			62,512			68.3	%			258,843			89.9	%
Total shareholders' equity		1,980,096				1,879,141				1,570,351				100,955			5.4	%			409,745			26.1	%
Total liabilities and equity	$	18,480,372			$	18,452,487			$	18,390,839			$	27,885			0.2	%		$	89,533			0.5	%
n/m - percentage changes greater than +/- 100% are considered not meaningful
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2024
($ in thousands except per share data)
(unaudited)
	Quarter Ended											Linked Quarter							Year over Year
INCOME STATEMENTS	9/30/2024				6/30/2024				9/30/2023			$ Change				% Change			$ Change				% Change
Interest and fees on LHFS & LHFI-FTE	$	220,433			$	216,399			$	206,523		$	4,034			1.9	%		$	13,910			6.7	%
Interest on securities-taxable		26,162				17,929				16,624			8,233			45.9	%			9,538			57.4	%
Interest on securities-tax exempt-FTE		—				1				58			(1	)		-100.0	%			(58	)		-100.0	%
Interest on fed funds sold and reverse repurchases		9				2				3			7			n/m				6			n/m
Other interest income		8,293				8,124				8,613			169			2.1	%			(320	)		-3.7	%
Total interest income-FTE		254,897				242,455				231,821			12,442			5.1	%			23,076			10.0	%
Interest on deposits		86,043				83,681				69,797			2,362			2.8	%			16,246			23.3	%
Interest on fed funds purchased and repurchases		4,864				5,663				5,375			(799	)		-14.1	%			(511	)		-9.5	%
Other interest expense		5,971				8,778				14,713			(2,807	)		-32.0	%			(8,742	)		-59.4	%
Total interest expense		96,878				98,122				89,885			(1,244	)		-1.3	%			6,993			7.8	%
Net interest income-FTE		158,019				144,333				141,936			13,686			9.5	%			16,083			11.3	%
Provision for credit losses (PCL), LHFI		7,923				14,696				8,322			(6,773	)		-46.1	%			(399	)		-4.8	%
PCL, off-balance sheet credit exposures		(1,375	)			(3,600	)			104			2,225			61.8	%			(1,479	)		n/m
PCL, LHFI sale of 1-4 family mortgage loans		—				8,633				—			(8,633	)		-100.0	%			—			n/m
Net interest income after provision-FTE		151,471				124,604				133,510			26,867			21.6	%			17,961			13.5	%
Service charges on deposit accounts		11,272				10,924				11,074			348			3.2	%			198			1.8	%
Bank card and other fees		7,931				9,225				8,217			(1,294	)		-14.0	%			(286	)		-3.5	%
Mortgage banking, net		6,119				4,204				6,458			1,915			45.6	%			(339	)		-5.2	%
Wealth management		9,288				9,692				8,773			(404	)		-4.2	%			515			5.9	%
Other, net		2,952				7,461				2,399			(4,509	)		-60.4	%			553			23.1	%
Securities gains (losses), net		—				(182,792	)			—			182,792			-100.0	%			—			n/m
Total noninterest income (loss)		37,562				(141,286	)			36,921			178,848			n/m				641			1.7	%
Salaries and employee benefits		66,691				64,838				67,374			1,853			2.9	%			(683	)		-1.0	%
Services and fees		25,724				24,743				27,472			981			4.0	%			(1,748	)		-6.4	%
Net occupancy-premises		7,398				7,265				7,151			133			1.8	%			247			3.5	%
Equipment expense		6,141				6,241				6,755			(100	)		-1.6	%			(614	)		-9.1	%
Litigation settlement expense (1)		—				—				6,500			—			n/m				(6,500	)		-100.0	%
Other expense		17,316				15,239				15,039			2,077			13.6	%			2,277			15.1	%
Total noninterest expense		123,270				118,326				130,291			4,944			4.2	%			(7,021	)		-5.4	%
Income (loss) from continuing operations before
income taxes and tax eq adj		65,763				(135,008	)			40,140			200,771			n/m				25,623			63.8	%
Tax equivalent adjustment		3,305				3,304				3,299			1			0.0	%			6			0.2	%
Income (loss) from continuing operations before
income taxes		62,458				(138,312	)			36,841			200,770			n/m				25,617			69.5	%
Income taxes from continuing operations		11,128				(37,707	)			6,288			48,835			n/m				4,840			77.0	%
Income (loss) from continuing operations		51,330				(100,605	)			30,553			151,935			n/m				20,777			68.0	%
Income from discontinued operations
(discont. ops) before income taxes		—				232,640				4,649			(232,640	)		-100.0	%			(4,649	)		-100.0	%
Income taxes from discont. ops		—				58,203				1,173			(58,203	)		-100.0	%			(1,173	)		-100.0	%
Income from discont. ops		—				174,437				3,476			(174,437	)		-100.0	%			(3,476	)		-100.0	%
Net income	$	51,330			$	73,832			$	34,029		$	(22,502	)		-30.5	%		$	17,301			50.8	%
Per share data (1)
Basic earnings (loss) per share from
continuing operations	$	0.84			$	(1.64	)		$	0.50		$	2.48			n/m			$	0.34			68.0	%
Basic earnings per share from discont. ops	$	—			$	2.85			$	0.06		$	(2.85	)		-100.0	%		$	(0.06	)		-100.0	%
Basic earnings per share - total	$	0.84			$	1.21			$	0.56		$	(0.37	)		-30.6	%		$	0.28			50.0	%
Diluted earnings (loss) per share from
continuing operations	$	0.84			$	(1.64	)		$	0.50		$	2.48			n/m			$	0.34			68.0	%
Diluted earnings per share from discont. ops	$	—			$	2.84			$	0.06		$	(2.84	)		-100.0	%		$	(0.06	)		-100.0	%
Diluted earnings per share - total	$	0.84			$	1.20			$	0.56		$	(0.36	)		-30.0	%		$	0.28			50.0	%
Dividends per share	$	0.23			$	0.23			$	0.23		$	—			0.0	%		$	—			0.0	%
Weighted average shares outstanding
Basic		61,206,599				61,196,820				61,069,750
Diluted		61,448,410				61,415,957				61,263,032
Period end shares outstanding		61,206,606				61,205,969				61,070,095
(1) Due to rounding, earnings (loss) per share from continuing operations and discontinued operations may not sum to earnings per share from net income.
n/m - percentage changes greater than +/- 100% are considered not meaningful
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2024
($ in thousands)
(unaudited)
	Quarter Ended												Linked Quarter							Year over Year
NONPERFORMING ASSETS	9/30/2024				6/30/2024				9/30/2023				$ Change				% Change			$ Change				% Change
Nonaccrual LHFI
Alabama	$	25,835			$	26,222			$	23,530			$	(387	)		-1.5	%		$	2,305			9.8	%
Florida		111				614				151				(503	)		-81.9	%			(40	)		-26.5	%
Mississippi (1)		31,536				14,773				45,050				16,763			n/m				(13,514	)		-30.0	%
Tennessee (2)		3,180				2,084				1,841				1,096			52.6	%			1,339			72.7	%
Texas		13,163				599				20,327				12,564			n/m				(7,164	)		-35.2	%
Total nonaccrual LHFI		73,825				44,292				90,899				29,533			66.7	%			(17,074	)		-18.8	%
Other real estate
Alabama		170				485				315				(315	)		-64.9	%			(145	)		n/m
Florida		—				—				—				—			n/m				—			n/m
Mississippi (1)		1,772				1,787				942				(15	)		-0.8	%			830			88.1	%
Tennessee (2)		—				86				—				(86	)		-100.0	%			—			n/m
Texas		1,978				4,228				4,228				(2,250	)		-53.2	%			(2,250	)		-53.2	%
Total other real estate		3,920				6,586				5,485				(2,666	)		-40.5	%			(1,565	)		-28.5	%
Total nonperforming assets	$	77,745			$	50,878			$	96,384			$	26,867			52.8	%		$	(18,639	)		-19.3	%
LOANS PAST DUE OVER 90 DAYS
LHFI	$	5,352			$	5,413			$	3,804			$	(61	)		-1.1	%		$	1,548			40.7	%
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)	$	63,703			$	58,079			$	42,532			$	5,624			9.7	%		$	21,171			49.8	%
	Quarter Ended												Linked Quarter							Year over Year
ACL LHFI	9/30/2024				6/30/2024				9/30/2023				$ Change				% Change			$ Change				% Change
Beginning Balance	$	154,685			$	142,998			$	129,298			$	11,687			8.2	%		$	25,387			19.6	%
PCL, LHFI		7,923				14,696				8,322				(6,773	)		-46.1	%			(399	)		-4.8	%
PCL, LHFI sale of 1-4 family mortgage loans		—				8,633				—				(8,633	)		-100.0	%			—			n/m
Charge-offs, sale of 1-4 family mortgage loans		—				(8,633	)			—				8,633			-100.0	%			—			n/m
Charge-offs		(7,142	)			(5,120	)			(7,496	)			(2,022	)		-39.5	%			354			4.7	%
Recoveries		2,463				2,111				3,907				352			16.7	%			(1,444	)		-37.0	%
Net (charge-offs) recoveries		(4,679	)			(11,642	)			(3,589	)			6,963			59.8	%			(1,090	)		-30.4	%
Ending Balance	$	157,929			$	154,685			$	134,031			$	3,244			2.1	%		$	23,898			17.8	%
NET (CHARGE-OFFS) RECOVERIES
Alabama	$	(3,098	)		$	59			$	(165	)		$	(3,157	)		n/m			$	(2,933	)		n/m
Florida		595				4				21				591			n/m				574			n/m
Mississippi (1)		(1,881	)			(9,112	)			(1,867	)			7,231			79.4	%			(14	)		-0.7	%
Tennessee (2)		(296	)			(122	)			2,127				(174	)		n/m				(2,423	)		n/m
Texas		1				(2,471	)			(3,705	)			2,472			n/m				3,706			n/m
Total net (charge-offs) recoveries	$	(4,679	)		$	(11,642	)		$	(3,589	)		$	6,963			n/m			$	(1,090	)		-30.4	%
(1) Mississippi includes Central and Southern Mississippi Regions.
(2) 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
September 30, 2024
($ in thousands)
(unaudited)
		Quarter Ended																				Nine Months Ended
AVERAGE BALANCES		9/30/2024				6/30/2024				3/31/2024				12/31/2023				9/30/2023				9/30/2024				9/30/2023
Securities AFS-taxable		$	1,658,999			$	1,866,227			$	1,927,619			$	1,986,825			$	2,049,006			$	1,817,036			$	2,125,038
Securities AFS-nontaxable			—				—				—				4,246				4,779				—				4,796
Securities HTM-taxable			1,368,943				1,421,246				1,418,476				1,430,169				1,445,895				1,402,764				1,462,632
Securities HTM-nontaxable			—				112				340				340				907				150				2,365
Total securities			3,027,942				3,287,585				3,346,435				3,421,580				3,500,587				3,219,950				3,594,831
Loans (includes loans held for sale)			13,379,658				13,309,127				13,169,805				13,010,028				12,926,942				13,286,538				12,731,268
Fed funds sold and reverse repurchases			653				110				114				121				230				294				1,953
Other earning assets			607,275				592,625				571,215				670,477				682,644				590,433				747,627
Total earning assets			17,015,528				17,189,447				17,087,569				17,102,206				17,110,403				17,097,215				17,075,679
ACL LHFI			(154,476	)			(143,245	)			(138,711	)			(133,742	)			(127,915	)			(145,510	)			(123,313	)
Other assets			1,646,241				1,740,307				1,730,521				1,749,069				1,721,310				1,705,473				1,707,608
Total assets		$	18,507,293			$	18,786,509			$	18,679,379			$	18,717,533			$	18,703,798			$	18,657,178			$	18,659,974
Interest-bearing demand deposits		$	5,382,346			$	5,222,369			$	5,291,779			$	5,053,935			$	4,875,714			$	5,299,136			$	4,810,658
Savings deposits			3,411,961				3,653,966				3,686,027				3,526,600				3,642,158				3,583,357				3,943,998
Time deposits			3,393,216				3,346,046				3,321,601				3,427,384				3,075,224				3,353,766				2,443,753
Total interest-bearing deposits			12,187,523				12,222,381				12,299,407				12,007,919				11,593,096				12,236,259				11,198,409
Fed funds purchased and repurchases			375,559				434,760				428,127				403,041				414,696				412,679				413,608
Other borrowings			339,417				534,350				463,459				590,765				912,151				445,354				1,116,940
Subordinated notes			123,611				123,556				123,501				123,446				123,391				123,556				123,337
Junior subordinated debt securities			61,856				61,856				61,856				61,856				61,856				61,856				61,856
Total interest-bearing liabilities			13,087,966				13,376,903				13,376,350				13,187,027				13,105,190				13,279,704				12,914,150
Noninterest-bearing deposits			3,221,516				3,183,524				3,120,566				3,296,351				3,429,815				3,175,371				3,611,592
Other liabilities			274,563				498,593				505,942				641,662				585,908				425,812				571,681
Total liabilities			16,584,045				17,059,020				17,002,858				17,125,040				17,120,913				16,880,887				17,097,423
Shareholders' equity			1,923,248				1,727,489				1,676,521				1,592,493				1,582,885				1,776,291				1,562,551
Total liabilities and equity		$	18,507,293			$	18,786,509			$	18,679,379			$	18,717,533			$	18,703,798			$	18,657,178			$	18,659,974
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2024
($ in thousands)
(unaudited)
PERIOD END BALANCES		9/30/2024				6/30/2024				3/31/2024				12/31/2023				9/30/2023
Cash and due from banks		$	805,436			$	822,141			$	606,061			$	975,343			$	750,292
Fed funds sold and reverse repurchases			10,000				—				—				—				—
Securities available for sale			1,725,795				1,621,659				1,702,299				1,762,878				1,766,174
Securities held to maturity			1,358,358				1,380,487				1,415,025				1,426,279				1,438,287
LHFS			216,454				185,698				172,937				184,812				169,244
LHFI			13,100,111				13,155,418				13,057,943				12,950,524				12,810,259
ACL LHFI			(157,929	)			(154,685	)			(142,998	)			(139,367	)			(134,031	)
Net LHFI			12,942,182				13,000,733				12,914,945				12,811,157				12,676,228
Premises and equipment, net			236,151				232,681				232,630				232,229				230,402
Mortgage servicing rights			125,853				136,658				138,044				131,870				142,379
Goodwill			334,605				334,605				334,605				334,605				334,605
Identifiable intangible assets			153				181				208				236				269
Other real estate			3,920				6,586				7,620				6,867				5,485
Operating lease right-of-use assets			36,034				36,925				34,324				35,711				37,115
Other assets			685,431				694,133				744,821				752,568				770,684
Assets of discontinued operations			—				—				73,093				67,634				69,675
Total assets		$	18,480,372			$	18,452,487			$	18,376,612			$	18,722,189			$	18,390,839
Deposits:
Noninterest-bearing		$	3,142,792			$	3,153,506			$	3,039,652			$	3,197,620			$	3,320,124
Interest-bearing			12,098,143				12,309,382				12,298,905				12,372,143				11,781,799
Total deposits			15,240,935				15,462,888				15,338,557				15,569,763				15,101,923
Fed funds purchased and repurchases			365,643				314,121				393,215				405,745				321,799
Other borrowings			443,458				336,687				482,027				483,230				793,193
Subordinated notes			123,647				123,592				123,537				123,482				123,427
Junior subordinated debt securities			61,856				61,856				61,856				61,856				61,856
ACL on off-balance sheet credit exposures			28,890				30,265				33,865				34,057				34,945
Operating lease liabilities			39,689				40,517				37,792				39,097				40,150
Other liabilities			196,158				203,420				207,583				331,085				331,066
Liabilities of discontinued operations			—				—				15,581				12,027				12,129
Total liabilities			16,500,276				16,573,346				16,694,013				17,060,342				16,820,488
Common stock			12,753				12,753				12,747				12,725				12,724
Capital surplus			163,156				161,834				160,521				159,688				158,316
Retained earnings			1,833,232				1,796,111				1,736,485				1,709,157				1,687,199
Accumulated other comprehensive income (loss),
net of tax			(29,045	)			(91,557	)			(227,154	)			(219,723	)			(287,888	)
Total shareholders' equity			1,980,096				1,879,141				1,682,599				1,661,847				1,570,351
Total liabilities and equity		$	18,480,372			$	18,452,487			$	18,376,612			$	18,722,189			$	18,390,839
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2024
($ in thousands except per share data)
(unaudited)
		Quarter Ended																			Nine Months Ended
INCOME STATEMENTS		9/30/2024				6/30/2024				3/31/2024				12/31/2023				9/30/2023			9/30/2024				9/30/2023
Interest and fees on LHFS & LHFI-FTE		$	220,433			$	216,399			$	209,456			$	210,288			$	206,523		$	646,288			$	578,431
Interest on securities-taxable			26,162				17,929				15,634				15,936				16,624			59,725				50,164
Interest on securities-tax exempt-FTE			—				1				4				44				58			5				219
Interest on fed funds sold and reverse repurchases			9				2				1				2				3			12				78
Other interest income			8,293				8,124				8,110				9,918				8,613			24,527				27,217
Total interest income-FTE			254,897				242,455				233,205				236,188				231,821			730,557				656,109
Interest on deposits			86,043				83,681				83,716				80,847				69,797			253,440				165,104
Interest on fed funds purchased and repurchases			4,864				5,663				5,591				5,347				5,375			16,118				15,072
Other interest expense			5,971				8,778				7,703				9,946				14,713			22,452				49,638
Total interest expense			96,878				98,122				97,010				96,140				89,885			292,010				229,814
Net interest income-FTE			158,019				144,333				136,195				140,048				141,936			438,547				426,295
PCL, LHFI			7,923				14,696				7,708				7,585				8,322			30,327				19,777
PCL, off-balance sheet credit exposures			(1,375	)			(3,600	)			(192	)			(888	)			104			(5,167	)			(1,893	)
PCL, LHFI sale of 1-4 family mortgage loans			—				8,633				—				—				—			8,633				—
Net interest income after provision-FTE			151,471				124,604				128,679				133,351				133,510			404,754				408,411
Service charges on deposit accounts			11,272				10,924				10,958				11,311				11,074			33,154				32,105
Bank card and other fees			7,931				9,225				7,428				8,502				8,217			24,584				24,937
Mortgage banking, net			6,119				4,204				8,915				5,519				6,458			19,238				20,697
Wealth management			9,288				9,692				8,952				8,657				8,773			27,932				26,435
Other, net			2,952				7,461				3,102				2,577				2,399			13,515				7,654
Securities gains (losses), net			—				(182,792	)			—				39				—			(182,792	)			—
Total noninterest income (loss)			37,562				(141,286	)			39,355				36,605				36,921			(64,369	)			111,828
Salaries and employee benefits			66,691				64,838				65,487				69,326				67,374			197,016				198,944
Services and fees			25,724				24,743				24,431				27,478				27,472			74,898				80,327
Net occupancy-premises			7,398				7,265				7,270				7,144				7,151			21,933				21,363
Equipment expense			6,141				6,241				6,325				6,457				6,755			18,707				19,387
Litigation settlement expense			—				—				—				—				6,500			—				6,500
Other expense			17,316				15,239				16,151				15,790				15,039			48,706				42,980
Total noninterest expense			123,270				118,326				119,664				126,195				130,291			361,260				369,501
Income (loss) from continuing operations before
income taxes and tax eq adj			65,763				(135,008	)			48,370				43,761				40,140			(20,875	)			150,738
Tax equivalent adjustment			3,305				3,304				3,365				3,306				3,299			9,974				10,159
Income (loss) from continuing operations before
income taxes			62,458				(138,312	)			45,005				40,455				36,841			(30,849	)			140,579
Income taxes from continuing operations			11,128				(37,707	)			6,832				6,567				6,288			(19,747	)			21,177
Income (loss) from continuing operations			51,330				(100,605	)			38,173				33,888				30,553			(11,102	)			119,402
Income from discontinued operations
(discont. ops) before income taxes			—				232,640				4,512				2,965				4,649			237,152				13,337
Income taxes from discontinued operations			—				58,203				1,150				730				1,173			59,353				3,373
Income from discont. ops			—				174,437				3,362				2,235				3,476			177,799				9,964
Net income		$	51,330			$	73,832			$	41,535			$	36,123			$	34,029		$	166,697			$	129,366
Per share data (1)
Basic earnings (loss) per share from continuing
operations		$	0.84			$	(1.64	)		$	0.62			$	0.55			$	0.50		$	(0.18	)		$	1.96
Basic earnings per share from discont. ops		$	—			$	2.85			$	0.05			$	0.04			$	0.06		$	2.91			$	0.16
Basic earnings per share - total		$	0.84			$	1.21			$	0.68			$	0.59			$	0.56		$	2.72			$	2.12
Diluted earnings (loss) per share from continuing
operations		$	0.84			$	(1.64	)		$	0.62			$	0.55			$	0.50		$	(0.18	)		$	1.95
Diluted earnings per share from discont. ops		$	—			$	2.84			$	0.05			$	0.04			$	0.06		$	2.90			$	0.16
Diluted earnings per share - total		$	0.84			$	1.20			$	0.68			$	0.59			$	0.56		$	2.72			$	2.11
Dividends per share		$	0.23			$	0.23			$	0.23			$	0.23			$	0.23		$	0.69			$	0.69
Weighted average shares outstanding
Basic			61,206,599				61,196,820				61,128,425				61,070,481				61,069,750			61,177,388				61,048,244
Diluted			61,448,410				61,415,957				61,348,364				61,296,840				61,263,032			61,393,179				61,219,022
Period end shares outstanding			61,206,606				61,205,969				61,178,366				61,071,173				61,070,095			61,206,606				61,070,095
(1) Due to rounding, earnings (loss) per share from continuing operations and discontinued operations may not sum to earnings per share from net income.
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2024
($ in thousands)
(unaudited)
		Quarter Ended
NONPERFORMING ASSETS		9/30/2024				6/30/2024				3/31/2024				12/31/2023				9/30/2023
Nonaccrual LHFI
Alabama		$	25,835			$	26,222			$	23,261			$	23,271			$	23,530
Florida			111				614				585				170				151
Mississippi (1)			31,536				14,773				59,059				54,615				45,050
Tennessee (2)			3,180				2,084				1,800				1,802				1,841
Texas			13,163				599				13,646				20,150				20,327
Total nonaccrual LHFI			73,825				44,292				98,351				100,008				90,899
Other real estate
Alabama			170				485				1,050				1,397				315
Florida			—				—				71				—				—
Mississippi (1)			1,772				1,787				2,870				1,242				942
Tennessee (2)			—				86				86				—				—
Texas			1,978				4,228				3,543				4,228				4,228
Total other real estate			3,920				6,586				7,620				6,867				5,485
Total nonperforming assets		$	77,745			$	50,878			$	105,971			$	106,875			$	96,384
LOANS PAST DUE OVER 90 DAYS
LHFI		$	5,352			$	5,413			$	5,243			$	5,790			$	3,804
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)		$	63,703			$	58,079			$	56,530			$	51,243			$	42,532
		Quarter Ended																				Nine Months Ended
ACL LHFI		9/30/2024				6/30/2024				3/31/2024				12/31/2023				9/30/2023				9/30/2024				9/30/2023
Beginning Balance		$	154,685			$	142,998			$	139,367			$	134,031			$	129,298			$	139,367			$	120,214
PCL, LHFI			7,923				14,696				7,708				7,585				8,322				30,327				19,777
PCL, LHFI sale of 1-4 family mortgage loans			—				8,633				—				—				—				8,633				—
Charge-offs, sale of 1-4 family mortgage loans			—				(8,633	)			—				—				—				(8,633	)			—
Charge-offs			(7,142	)			(5,120	)			(6,324	)			(4,250	)			(7,496	)			(18,586	)			(13,265	)
Recoveries			2,463				2,111				2,247				2,001				3,907				6,821				7,305
Net (charge-offs) recoveries			(4,679	)			(11,642	)			(4,077	)			(2,249	)			(3,589	)			(20,398	)			(5,960	)
Ending Balance		$	157,929			$	154,685			$	142,998			$	139,367			$	134,031			$	157,929			$	134,031
NET (CHARGE-OFFS) RECOVERIES
Alabama		$	(3,098	)		$	59			$	(341	)		$	(299	)		$	(165	)		$	(3,380	)		$	(574	)
Florida			595				4				277				180				21				876				(50	)
Mississippi (1)			(1,881	)			(9,112	)			(1,489	)			(1,943	)			(1,867	)			(12,482	)			(3,404	)
Tennessee (2)			(296	)			(122	)			(179	)			(193	)			2,127				(597	)			1,837
Texas			1				(2,471	)			(2,345	)			6				(3,705	)			(4,815	)			(3,769	)
Total net (charge-offs) recoveries		$	(4,679	)		$	(11,642	)		$	(4,077	)		$	(2,249	)		$	(3,589	)		$	(20,398	)		$	(5,960	)
(1) Mississippi includes Central and Southern Mississippi Regions.
(2) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2024
(unaudited)
		Quarter Ended																				Nine Months Ended
FINANCIAL RATIOS AND OTHER DATA		9/30/2024				6/30/2024				3/31/2024				12/31/2023				9/30/2023				9/30/2024			9/30/2023
Return on average equity from continuing operations			10.62	%			-23.42	%			9.16	%			8.44	%			7.66	%		-0.83	%		10.22	%
Return on average equity from adjusted
continuing operations (1)			10.62	%			9.06	%			9.16	%			8.68	%			8.87	%		9.40	%		10.63	%
Return on average equity - total			10.62	%			17.19	%			9.96	%			9.00	%			8.53	%		12.54	%		11.07	%
Return on average tangible equity from
continuing operations			12.86	%			-29.05	%			11.45	%			10.70	%			9.72	%		-1.02	%		13.03	%
Return on average tangible equity from adjusted
continuing operations (1)			12.86	%			11.14	%			11.45	%			10.98	%			11.25	%		11.49	%		13.55	%
Return on average tangible equity - total			12.86	%			21.91	%			12.98	%			11.92	%			11.32	%		15.79	%		14.77	%
Return on average assets from continuing operations			1.10	%			-2.16	%			0.83	%			0.72	%			0.65	%		-0.08	%		0.86	%
Return on average assets from adjusted
continuing operations (1)			1.10	%			0.87	%			0.83	%			0.74	%			0.75	%		0.93	%		0.89	%
Return on average assets - total			1.10	%			1.58	%			0.89	%			0.77	%			0.72	%		1.19	%		0.93	%
Interest margin - Yield - FTE			5.96	%			5.67	%			5.49	%			5.48	%			5.38	%		5.71	%		5.14	%
Interest margin - Cost			2.27	%			2.30	%			2.28	%			2.23	%			2.08	%		2.28	%		1.80	%
Net interest margin - FTE			3.69	%			3.38	%			3.21	%			3.25	%			3.29	%		3.43	%		3.34	%
Efficiency ratio (2)			60.99	%			63.81	%			66.90	%			69.76	%			68.27	%		63.79	%		66.43	%
Full-time equivalent employees			2,500				2,515				2,712				2,757				2,756
CREDIT QUALITY RATIOS
Net (recoveries) charge-offs (excl sale of
1-4 family mortgage loans) / average loans			0.14	%			0.09	%			0.12	%			0.07	%			0.11	%		0.12	%		0.06	%
PCL, LHFI (excl PCL, LHFI sale of
1-4 family mortgage loans) / average loans			0.24	%			0.44	%			0.24	%			0.23	%			0.26	%		0.30	%		0.21	%
Nonaccrual LHFI / (LHFI + LHFS)			0.55	%			0.33	%			0.74	%			0.76	%			0.70	%
Nonperforming assets / (LHFI + LHFS)			0.58	%			0.38	%			0.80	%			0.81	%			0.74	%
Nonperforming assets / (LHFI + LHFS
+ other real estate)			0.58	%			0.38	%			0.80	%			0.81	%			0.74	%
ACL LHFI / LHFI			1.21	%			1.18	%			1.10	%			1.08	%			1.05	%
ACL LHFI-commercial / commercial LHFI			1.08	%			1.05	%			0.93	%			0.85	%			0.86	%
ACL LHFI-consumer / consumer and
home mortgage LHFI			1.64	%			1.59	%			1.63	%			1.81	%			1.66	%
ACL LHFI / nonaccrual LHFI			213.92	%			349.24	%			145.39	%			139.36	%			147.45	%
ACL LHFI / nonaccrual LHFI
(excl individually analyzed loans)			497.27	%			840.20	%			235.29	%			249.31	%			273.60	%
CAPITAL RATIOS
Total equity / total assets			10.71	%			10.18	%			9.16	%			8.88	%			8.54	%
Tangible equity / tangible assets			9.07	%			8.52	%			7.47	%			7.22	%			6.84	%
Tangible equity / risk-weighted assets			10.97	%			10.18	%			8.83	%			8.76	%			8.16	%
Tier 1 leverage ratio			9.65	%			9.29	%			8.76	%			8.62	%			8.49	%
Common equity tier 1 capital ratio			11.30	%			10.92	%			10.12	%			10.04	%			9.89	%
Tier 1 risk-based capital ratio			11.70	%			11.31	%			10.51	%			10.44	%			10.29	%
Total risk-based capital ratio			13.71	%			13.29	%			12.42	%			12.29	%			12.11	%
STOCK PERFORMANCE
Market value-Close		$	31.82			$	30.04			$	28.11			$	27.88			$	21.73
Book value		$	32.35			$	30.70			$	27.50			$	27.21			$	25.71
Tangible book value		$	26.88			$	25.23			$	22.03			$	21.73			$	20.23
(1) Adjusted continuing operations excludes significant non-routine transactions. See Note 7 - Non-GAAP Financials Measures in the Notes to the Consolidated Financials.
(2) See Note 7 – Non-GAAP Financial Measures in the Notes to Consolidated Financials for Trustmark’s efficiency ratio calculation.
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

September 30, 2024

($ in thousands)

(unaudited)

Note 1 - Significant Non-Routine Transactions

Trustmark completed the following significant non-routine transactions during the second quarter of 2024:

• On May 31, 2024, Trustmark National Bank closed the sale of its wholly owned subsidiary, Fisher Brown Bottrell Insurance, Inc., (FBBI) to Marsh & McLennan Agency LLC, consistent with the terms as previously announced on April 23, 2024. Trustmark National Bank is a wholly owned subsidiary of Trustmark Corporation. Trustmark recognized a gain on the sale of $228.3 million ($171.2 million, net of taxes) in income from discontinued operations. The operations of FBBI are also included in discontinued operations for the current and prior periods.
• Trustmark restructured its investment securities portfolio by selling $1.561 billion of available for sale securities with an average yield of 1.36%, which generated a loss of $182.8 million ($137.1 million, net of taxes) and was recorded to noninterest income in securities gains (losses), net. Trustmark purchased $1.378 billion of available for sale securities with an average yield of 4.85%.
• Trustmark sold a portfolio of 1-4 family mortgage loans that were three payments delinquent and/or nonaccrual at the time of selection totaling $56.2 million, which resulted in a loss of $13.4 million ($10.1 million, net of taxes). The portion of the loss related to credit totaled $8.6 million and was recorded as adjustments to charge-offs and the provision for credit losses. The noncredit-related portion of the loss totaled $4.8 million and was recorded to noninterest income in other, net.
• On April 8, 2024, Visa commenced an initial exchange offer expiring on May 3, 2024, for any and all outstanding shares of Visa Class B-1 common stock (Visa B-1 shares). Holders participating in the exchange offer would receive a combination of Visa Class B-2 common stock (Visa B-2 shares) and Visa Class C common stock (Visa C shares) in exchange for Visa B-1 shares that are validly tendered and accepted for exchange by Visa. TNB tendered its 38.7 thousand Visa B-1 shares, which was accepted by Visa. In exchange for each Visa B-1 share that was validly tendered and accepted for exchange by Visa, TNB received 50.0% of a newly issued Visa B-2 share and newly issued Visa C shares equivalent in value to 50.0% of a Visa B-1 share. The Visa C shares that were received by TNB were recognized at fair value, which resulted in a gain of $8.1 million ($6.0 million, net of taxes) and recorded to noninterest income in other, net during the second quarter of 2024. During the third quarter of 2024, TNB sold all of the Visa C shares for approximately the same carrying value at June 30, 2024. The Visa B-2 shares were recorded at their nominal carrying value.

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:

		9/30/2024				6/30/2024				3/31/2024				12/31/2023				9/30/2023
SECURITIES AVAILABLE FOR SALE
U.S. Treasury securities		$	202,638			$	172,955			$	372,424			$	372,368			$	363,476
U.S. Government agency obligations			19,335				—				5,594				5,792				6,780
Obligations of states and political subdivisions			—				—				—				—				4,642
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA			25,798				23,489				22,232				23,135				22,881
Issued by FNMA and FHLMC			1,105,310				1,060,869				1,129,521				1,176,798				1,171,521
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA			—				—				79,099				86,074				90,402
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA			372,714				364,346				93,429				98,711				106,472
Total securities available for sale		$	1,725,795			$	1,621,659			$	1,702,299			$	1,762,878			$	1,766,174
SECURITIES HELD TO MATURITY
U.S. Treasury securities		$	29,648			$	29,455			$	29,261			$	29,068			$	28,872
Obligations of states and political subdivisions			—				—				340				340				341
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA			17,773				17,998				18,387				13,005				13,090
Issued by FNMA and FHLMC			436,177				449,781				461,457				469,593				474,003
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA			131,348				138,951				146,447				154,466				162,031
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA			743,412				744,302				759,133				759,807				759,950
Total securities held to maturity		$	1,358,358			$	1,380,487			$	1,415,025			$	1,426,279			$	1,438,287

At September 30, 2024, 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 $49.3 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 100.0% of the portfolio in U.S. Treasury securities, 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 and Federal Reserve Bank, Trustmark does not hold any other equity investment in a GSE.

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

September 30, 2024

($ in thousands)

(unaudited)

Note 3 – Loan Composition

LHFI consisted of the following during the periods presented:

LHFI BY TYPE		9/30/2024				6/30/2024				3/31/2024				12/31/2023				9/30/2023
Loans secured by real estate:
Construction, land development and other land loans		$	1,588,256			$	1,638,972			$	1,539,461			$	1,510,679			$	1,609,326
Secured by 1-4 family residential properties			2,895,006				2,878,295				2,891,481				2,904,715				2,893,606
Secured by nonfarm, nonresidential properties			3,582,552				3,598,647				3,543,235				3,489,434				3,569,671
Other real estate secured			1,475,798				1,344,968				1,384,610				1,312,551				1,218,499
Commercial and industrial loans			1,767,079				1,880,607				1,922,711				1,922,910				1,828,924
Consumer loans			149,436				153,316				156,430				161,725				161,940
State and other political subdivision loans			996,002				1,053,015				1,052,844				1,088,466				1,056,569
Other loans and leases			645,982				607,598				567,171				560,044				471,724
LHFI			13,100,111				13,155,418				13,057,943				12,950,524				12,810,259
ACL LHFI			(157,929	)			(154,685	)			(142,998	)			(139,367	)			(134,031	)
Net LHFI		$	12,942,182			$	13,000,733			$	12,914,945			$	12,811,157			$	12,676,228

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:

	September 30, 2024
LHFI - COMPOSITION BY REGION	Total				Alabama				Florida				Georgia				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	$	1,588,256			$	710,651			$	37,344			$	91,475			$	319,740			$	46,631			$	382,415
Secured by 1-4 family residential properties		2,895,006				153,482				61,195				—				2,560,518				83,812				35,999
Secured by nonfarm, nonresidential properties		3,582,552				1,036,006				217,973				31,530				1,539,462				130,662				626,919
Other real estate secured		1,475,798				663,949				1,676				—				392,700				6,734				410,739
Commercial and industrial loans		1,767,079				480,202				21,296				227,285				715,590				126,659				196,047
Consumer loans		149,436				21,365				7,013				—				93,469				15,858				11,731
State and other political subdivision loans		996,002				68,625				51,084				—				754,461				21,546				100,286
Other loans and leases		645,982				58,497				7,545				246,819				187,642				75,343				70,136
Loans	$	13,100,111			$	3,192,777			$	405,126			$	597,109			$	6,563,582			$	507,245			$	1,834,272
CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION
Lots	$	63,307			$	27,502			$	6,389			$	94			$	17,031			$	5,075			$	7,216
Development		110,649				56,110				814				—				22,290				11,624				19,811
Unimproved land		104,664				19,611				11,073				—				24,471				10,334				39,175
1-4 family construction		336,167				166,524				9,446				10,849				93,326				19,375				36,647
Other construction		973,469				440,904				9,622				80,532				162,622				223				279,566
Construction, land development and other land loans	$	1,588,256			$	710,651			$	37,344			$	91,475			$	319,740			$	46,631			$	382,415

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

September 30, 2024

($ in thousands)

(unaudited)

Note 3 – Loan Composition (continued)

		September 30, 2024
		Total				Alabama				Florida				Georgia				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		$	315,491			$	107,378			$	22,723			$	—			$	90,634			$	16,686			$	78,070
Office			261,461				93,106				19,243				—				94,694				1,356				53,062
Hotel/motel			293,191				146,399				44,719				—				77,521				24,552				—
Mini-storage			142,671				37,227				1,513				—				91,490				627				11,814
Industrial			501,354				111,559				18,191				31,530				197,056				2,863				140,155
Health care			132,564				104,276				676				—				25,053				326				2,233
Convenience stores			23,905				2,733				406				—				12,806				218				7,742
Nursing homes/senior living			518,548				225,893				—				—				192,350				4,367				95,938
Other			107,798				28,608				8,472				—				54,468				7,725				8,525
Total non-owner occupied loans			2,296,983				857,179				115,943				31,530				836,072				58,720				397,539
Owner-occupied:
Office			151,558				48,134				34,417				—				39,883				10,964				18,160
Churches			52,167				12,018				3,930				—				30,456				3,353				2,410
Industrial warehouses			165,033				11,393				4,685				—				48,050				14,534				86,371
Health care			121,272				10,444				8,337				—				83,182				2,215				17,094
Convenience stores			129,000				11,273				27,122				—				54,959				—				35,646
Retail			71,290				8,662				13,158				—				32,947				8,230				8,293
Restaurants			52,968				3,634				2,809				—				25,841				16,402				4,282
Auto dealerships			41,606				4,514				180				—				21,571				15,341				—
Nursing homes/senior living			380,774				57,076				—				—				297,634				—				26,064
Other			119,901				11,679				7,392				—				68,867				903				31,060
Total owner-occupied loans			1,285,569				178,827				102,030				—				703,390				71,942				229,380
Loans secured by nonfarm, nonresidential properties		$	3,582,552			$	1,036,006			$	217,973			$	31,530			$	1,539,462			$	130,662			$	626,919

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																				Nine Months Ended
		9/30/2024				6/30/2024				3/31/2024				12/31/2023				9/30/2023				9/30/2024				9/30/2023
Securities – taxable			3.44	%			2.19	%			1.88	%			1.85	%			1.89	%			2.48	%			1.87	%
Securities – nontaxable			—				3.59	%			4.73	%			3.81	%			4.05	%			4.45	%			4.09	%
Securities – total			3.44	%			2.19	%			1.88	%			1.85	%			1.89	%			2.48	%			1.87	%
LHFI & LHFS			6.55	%			6.54	%			6.40	%			6.41	%			6.34	%			6.50	%			6.07	%
Fed funds sold & reverse repurchases			5.48	%			7.31	%			3.53	%			6.56	%			5.17	%			5.45	%			5.34	%
Other earning assets			5.43	%			5.51	%			5.71	%			5.87	%			5.01	%			5.55	%			4.87	%
Total earning assets			5.96	%			5.67	%			5.49	%			5.48	%			5.38	%			5.71	%			5.14	%
Interest-bearing deposits			2.81	%			2.75	%			2.74	%			2.67	%			2.39	%			2.77	%			1.97	%
Fed funds purchased & repurchases			5.15	%			5.24	%			5.25	%			5.26	%			5.14	%			5.22	%			4.87	%
Other borrowings			4.53	%			4.91	%			4.78	%			5.08	%			5.32	%			4.75	%			5.10	%
Total interest-bearing liabilities			2.94	%			2.95	%			2.92	%			2.89	%			2.72	%			2.94	%			2.38	%
Total Deposits			2.22	%			2.18	%			2.18	%			2.10	%			1.84	%			2.20	%			1.49	%
Net interest margin			3.69	%			3.38	%			3.21	%			3.25	%			3.29	%			3.43	%			3.34	%

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

September 30, 2024

($ 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.

The net interest margin increased 31 basis points when compared to the second quarter of 2024, totaling 3.69% for the third quarter of 2024, primarily due to increased yields on the securities portfolio, while the loans held for investment and held for sale portfolio remained relatively flat, offset by the increase in the cost of interest-bearing deposits.

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 $2.5 million during the third quarter of 2024.

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

		Quarter Ended																				Nine Months Ended
		9/30/2024				6/30/2024				3/31/2024				12/31/2023				9/30/2023				9/30/2024				9/30/2023
Mortgage servicing income, net		$	7,127			$	6,993			$	6,934			$	6,731			$	6,916			$	21,054			$	20,465
Change in fair value-MSR from runoff			(3,154	)			(3,447	)			(1,926	)			(2,972	)			(3,203	)			(8,527	)			(7,058	)
Gain on sales of loans, net			4,648				5,151				5,009				3,913				3,748				14,808				11,432
Mortgage banking income before hedge
ineffectiveness			8,621				8,697				10,017				7,672				7,461				27,335				24,839
Change in fair value-MSR from market changes			(10,406	)			(1,626	)			5,123				(10,224	)			6,809				(6,909	)			8,735
Change in fair value of derivatives			7,904				(2,867	)			(6,225	)			8,071				(7,812	)			(1,188	)			(12,877	)
Net positive (negative) hedge ineffectiveness			(2,502	)			(4,493	)			(1,102	)			(2,153	)			(1,003	)			(8,097	)			(4,142	)
Mortgage banking, net		$	6,119			$	4,204			$	8,915			$	5,519			$	6,458			$	19,238			$	20,697

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

September 30, 2024

($ in thousands)

(unaudited)

Note 6 – Other Noninterest Income and Expense

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

		Quarter Ended																				Nine Months Ended
		9/30/2024				6/30/2024				3/31/2024				12/31/2023				9/30/2023				9/30/2024				9/30/2023
Partnership amortization for tax credit purposes		$	(1,977	)		$	(1,824	)		$	(1,834	)		$	(2,013	)		$	(1,995	)		$	(5,635	)		$	(5,975	)
Increase in life insurance cash surrender value			1,883				1,860				1,844				1,825				1,784				5,587				5,193
Loss on sale of 1-4 family mortgage loans			—				(4,798	)			—				—				—				(4,798	)			—
Visa C shares fair value adjustment			—				8,056				—				—				—				8,056				—
Other miscellaneous income			3,046				4,167				3,092				2,765				2,610				10,305				8,436
Total other, net		$	2,952			$	7,461			$	3,102			$	2,577			$	2,399			$	13,515			$	7,654

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																				Nine Months Ended
		9/30/2024				6/30/2024				3/31/2024				12/31/2023				9/30/2023				9/30/2024				9/30/2023
Loan expense		$	2,824			$	2,880			$	2,955			$	2,380			$	3,130			$	8,659			$	8,734
Amortization of intangibles			28				27				28				33				34				83				257
FDIC assessment expense			5,071				4,816				4,509				4,844				3,765				14,396				8,685
Other real estate expense, net			2,452				327				671				(184	)			(40	)			3,450				303
Other miscellaneous expense			6,941				7,189				7,988				8,717				8,150				22,118				25,001
Total other expense		$	17,316			$	15,239			$	16,151			$	15,790			$	15,039			$	48,706			$	42,980

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

September 30, 2024

($ in thousands except per share data)

(unaudited)

Note 7 – Non-GAAP Financial Measures (continued)

				Quarter Ended																				Nine Months Ended
				9/30/2024				6/30/2024				3/31/2024				12/31/2023				9/30/2023				9/30/2024				9/30/2023
TANGIBLE EQUITY
AVERAGE BALANCES
Total shareholders' equity				$	1,923,248			$	1,727,489			$	1,676,521			$	1,592,493			$	1,582,885			$	1,776,291			$	1,562,551
Less: Goodwill					(334,605	)			(334,605	)			(334,605	)			(334,605	)			(334,605	)			(334,605	)			(334,605	)
Identifiable intangible assets					(168	)			(195	)			(224	)			(253	)			(287	)			(196	)			(349	)
Total average tangible equity				$	1,588,475			$	1,392,689			$	1,341,692			$	1,257,635			$	1,247,993			$	1,441,490			$	1,227,597
PERIOD END BALANCES
Total shareholders' equity				$	1,980,096			$	1,879,141			$	1,682,599			$	1,661,847			$	1,570,351
Less: Goodwill					(334,605	)			(334,605	)			(334,605	)			(334,605	)			(334,605	)
Identifiable intangible assets					(153	)			(181	)			(208	)			(236	)			(269	)
Total tangible equity		(a)		$	1,645,338			$	1,544,355			$	1,347,786			$	1,327,006			$	1,235,477
TANGIBLE ASSETS
Total assets				$	18,480,372			$	18,452,487			$	18,376,612			$	18,722,189			$	18,390,839
Less: Goodwill					(334,605	)			(334,605	)			(334,605	)			(334,605	)			(334,605	)
Identifiable intangible assets					(153	)			(181	)			(208	)			(236	)			(269	)
Total tangible assets		(b)		$	18,145,614			$	18,117,701			$	18,041,799			$	18,387,348			$	18,055,965
Risk-weighted assets		(c)		$	15,004,024			$	15,165,038			$	15,257,385			$	15,153,263			$	15,143,531
NET INCOME (LOSS) ADJUSTED FOR INTANGIBLE AMORTIZATION
Net income (loss) from continuing operations				$	51,330			$	(100,605	)		$	38,173			$	33,888			$	30,553			$	(11,102	)		$	119,402
Plus: Intangible amortization net of tax from
continuing operations					21				20				20				25				25				61				192
Net income (loss) adjusted for intangible amortization				$	51,351			$	(100,585	)		$	38,193			$	33,913			$	30,578			$	(11,041	)		$	119,594
Period end common shares outstanding		(d)			61,206,606				61,205,969				61,178,366				61,071,173				61,070,095
TANGIBLE COMMON EQUITY MEASUREMENTS
Return on average tangible equity from
continuing operations (1)					12.86	%			-29.05	%			11.45	%			10.70	%			9.72	%			-1.02	%			13.03	%
Tangible equity/tangible assets		(a)/(b)			9.07	%			8.52	%			7.47	%			7.22	%			6.84	%
Tangible equity/risk-weighted assets		(a)/(c)			10.97	%			10.18	%			8.83	%			8.76	%			8.16	%
Tangible book value		(a)/(d)*1,000		$	26.88			$	25.23			$	22.03			$	21.73			$	20.23
COMMON EQUITY TIER 1 CAPITAL (CET1)
Total shareholders' equity				$	1,980,096			$	1,879,141			$	1,682,599			$	1,661,847			$	1,570,351
CECL transition adjustment					6,500				6,500				6,500				13,000				13,000
AOCI-related adjustments					29,045				91,557				227,154				219,723				287,888
CET1 adjustments and deductions:
Goodwill net of associated deferred
tax liabilities (DTLs)					(320,757	)			(320,758	)			(370,205	)			(370,212	)			(370,219	)
Other adjustments and deductions
for CET1 (2)					(115	)			(847	)			(2,588	)			(2,693	)			(2,803	)
CET1 capital		(e)			1,694,769				1,655,593				1,543,460				1,521,665				1,498,217
Additional tier 1 capital instruments
plus related surplus					60,000				60,000				60,000				60,000				60,000
Tier 1 capital				$	1,754,769			$	1,715,593			$	1,603,460			$	1,581,665			$	1,558,217
Common equity tier 1 capital ratio		(e)/(c)			11.30	%			10.92	%			10.12	%			10.04	%			9.89	%
(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

September 30, 2024

($ in thousands except per share data)

(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																				Nine Months Ended
		9/30/2024				6/30/2024				3/31/2024				12/31/2023				9/30/2023				9/30/2024				9/30/2023
Net interest income (GAAP)	(a)	$	154,714			$	141,029			$	132,830			$	136,742			$	138,637			$	428,573			$	416,136
Noninterest income (loss) (GAAP)			37,562				(141,286	)			39,355				36,605				36,921				(64,369	)			111,828
Add: Loss on sale of 1-4 family mortgage loans (incl in Other, net)			—				4,798				—				—				—				4,798				—
Visa C shares fair value adjustment (incl in Other, net)			—				(8,056	)			—				—				—				(8,056	)			—
Securities (gains) losses, net			—				182,792				—				—				—				182,792				—
Noninterest income from adjusted continuing
operations (Non-GAAP)	(b)	$	37,562			$	38,248			$	39,355			$	36,605			$	36,921			$	115,165			$	111,828
Adjusted pre-provision revenue	(a)+(b)=(c)	$	192,276			$	179,277			$	172,185			$	173,347			$	175,558			$	543,738			$	527,964
Noninterest expense (GAAP)		$	123,270			$	118,326			$	119,664			$	126,195			$	130,291			$	361,260			$	369,501
Less: Reduction in force expense (incl in Salaries and employee benefits)			—				—				—				(1,406	)			—				—				—
Litigation settlement expense			—				—				—				—				(6,500	)			—				(6,500	)
Noninterest expense from adjusted continuing
operations (Non-GAAP)	(d)	$	123,270			$	118,326			$	119,664			$	124,789			$	123,791			$	361,260			$	363,001
PPNR (Non-GAAP)	(c)-(d)	$	69,006			$	60,951			$	52,521			$	48,558			$	51,767			$	182,478			$	164,963

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

September 30, 2024

($ in thousands)

(unaudited)

Note 7 – Non-GAAP Financial Measures (continued)

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

	Quarter Ended																				Nine Months Ended
	9/30/2024				6/30/2024				3/31/2024				12/31/2023				9/30/2023				9/30/2024				9/30/2023
Net income (loss) (GAAP) from continuing operations	$	51,330			$	(100,605	)		$	38,173			$	33,888			$	30,553			$	(11,102	)		$	119,402
Significant non-routine transactions (net of taxes):
PCL, LHFI sale of nonperforming 1-4 family		—				6,475				—				—				—				6,475				—
Loss on sale of 1-4 family mortgage loans		—				3,598				—				—				—				3,598				—
Visa C shares fair value adjustment		—				(6,042	)			—				—				—				(6,042	)			—
Securities gains (losses), net		—				137,094				—				—				—				137,094				—
Reduction in force expense		—				—				—				1,055				—				—				—
Litigation settlement expense		—				—				—				—				4,875				—				4,875
Net income adjusted for significant non-routine
transactions (Non-GAAP)	$	51,330			$	40,520			$	38,173			$	34,943			$	35,428			$	130,023			$	124,277
Diluted EPS from adjusted continuing operations	$	0.84			$	0.66			$	0.62			$	0.57			$	0.58			$	2.12			$	2.03
FINANCIAL RATIOS - REPORTED (GAAP)
Return on average equity from continuing operations		10.62	%			-23.42	%			9.16	%			8.44	%			7.66	%			-0.83	%			10.22	%
Return on average tangible equity from continuing operations		12.86	%			-29.05	%			11.45	%			10.70	%			9.72	%			-1.02	%			13.03	%
Return on average assets from continuing operations		1.10	%			-2.16	%			0.83	%			0.72	%			0.65	%			-0.08	%			0.86	%
FINANCIAL RATIOS - ADJUSTED (NON-GAAP)
Return on average equity from adjusted continuing operations		10.62	%			9.06	%			9.16	%			8.68	%			8.87	%			9.40	%			10.63	%
Return on average tangible equity from adjusted
continuing operations		12.86	%			11.14	%			11.45	%			10.98	%			11.25	%			11.49	%			13.55	%
Return on average assets from adjusted continuing operations		1.10	%			0.87	%			0.83	%			0.74	%			0.75	%			0.93	%			0.89	%

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

September 30, 2024

($ 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																				Nine Months Ended
		9/30/2024				6/30/2024				3/31/2024				12/31/2023				9/30/2023				9/30/2024				9/30/2023
Total noninterest expense (GAAP)		$	123,270			$	118,326			$	119,664			$	126,195			$	130,291			$	361,260			$	369,501
Less: Other real estate expense, net			(2,452	)			(327	)			(671	)			184				40				(3,450	)			(303	)
Amortization of intangibles			(28	)			(27	)			(28	)			(33	)			(34	)			(83	)			(257	)
Charitable contributions resulting in
state tax credits			(300	)			(300	)			(300	)			(325	)			(325	)			(900	)			(975	)
Reduction in force expense			—				—				—				(1,406	)			—				—				—
Litigation settlement expense			—				—				—				—				(6,500	)			—				(6,500	)
Adjusted noninterest expense (Non-GAAP)	(c)	$	120,490			$	117,672			$	118,665			$	124,615			$	123,472			$	356,827			$	361,466
Net interest income (GAAP)		$	154,714			$	141,029			$	132,830			$	136,742			$	138,637			$	428,573			$	416,136
Add: Tax equivalent adjustment			3,305				3,304				3,365				3,306				3,299				9,974				10,159
Net interest income-FTE (Non-GAAP)	(a)	$	158,019			$	144,333			$	136,195			$	140,048			$	141,936			$	438,547			$	426,295
Noninterest income (loss) (GAAP)		$	37,562			$	(141,286	)		$	39,355			$	36,605			$	36,921			$	(64,369	)		$	111,828
Add: Partnership amortization for tax credit purposes			1,977				1,824				1,834				2,013				1,995				5,635				5,975
Loss on sale of 1-4 family mortgage loans			—				4,798				—				—				—				4,798				—
Securities (gains) losses, net			—				182,792				—				(39	)			—				182,792				—
Less: Visa C shares fair value adjustment			—				(8,056	)			—				—				—				(8,056	)			—
Adjusted noninterest income (Non-GAAP)	(b)	$	39,539			$	40,072			$	41,189			$	38,579			$	38,916			$	120,800			$	117,803
Adjusted revenue (Non-GAAP)	(a)+(b)	$	197,558			$	184,405			$	177,384			$	178,627			$	180,852			$	559,347			$	544,098
Efficiency ratio (Non-GAAP)	(c)/((a)+(b))		60.99	%			63.81	%			66.90	%			69.76	%			68.27	%			63.79	%			66.43	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241022375452/en/

Trustmark Investor Contacts:

Thomas C. Owens

Treasurer and Principal Financial Officer

601-208-7853



F. Joseph Rein, Jr.

Executive Vice President

601-208-6898



Trustmark Media Contact:

Melanie A. Morgan

Executive Vice President

601-208-2979

Source: Trustmark Corporation

FAQ

What was Trustmark 's (TRMK) net income for Q3 2024?

Trustmark (TRMK) reported net income of $51.3 million in the third quarter of 2024.

How much did Trustmark's (TRMK) net interest income increase in Q3 2024?

Trustmark's net interest income (FTE) increased by $13.7 million, or 9.5%, to $158.0 million in the third quarter of 2024.

What was Trustmark's (TRMK) efficiency ratio in Q3 2024?

Trustmark's efficiency ratio improved 282 basis points to 60.99% in the third quarter of 2024.

How much did Trustmark's (TRMK) deposits change in Q3 2024?

Trustmark's deposits totaled $15.2 billion, down $222.0 million, or 1.4%, from the previous quarter, but up 0.9% year-over-year.

What dividend did Trustmark (TRMK) declare for Q3 2024?

Trustmark's Board of Directors declared a quarterly cash dividend of $0.23 per share payable December 15, 2024, to shareholders of record on December 1, 2024.