Companies: 11,396     total market cap: $150.818 T
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Trustmark
TRMK
#4414
Rank
$2.60 B
Marketcap
๐Ÿ‡บ๐Ÿ‡ธ United States
Country
$45.16
Share price
-0.53%
Change (1 day)
17.85%
Change (1 year)
๐Ÿฆ Banks๐Ÿ’ณ Financial services
Categories
  1. Trustmark
  2. Quarterly Reports (10-Q)
  3. Financial Year FY2026 Q3

Trustmark - 10-Q quarterly report FY2026 Q3


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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2026

or

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 000-03683

img179177900_0.jpg

Trustmark Corporation

(Exact name of registrant as specified in its charter)

 

Mississippi

64-0471500

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

 

248 East Capitol Street, Jackson, Mississippi

39201

(Address of principal executive offices)

(Zip Code)

 

(601) 208-5111

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, no par value

TRMK

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

☒

 

 

Accelerated filer

☐

Non-accelerated filer

☐

 

 

Smaller reporting company

☐

Emerging growth company

☐

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 30, 2026, there were 57,735,042 shares outstanding of the registrant’s common stock (no par value).

 

 

 

Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q 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, conditions and changes, including volatility, in the credit and financial markets, changes in the level of nonperforming assets and charge-offs, an increase in unemployment levels, a slowdown 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, changes in accounting standards and practices, including changes in the interpretation of existing standards, that affect our consolidated financial statements, changes in consumer spending, borrowings and savings habits, technological changes, changes in the financial performance or condition of our borrowers, greater than expected costs or difficulties related to the integration of acquisitions or new products and lines of business, cyber-attacks and other breaches which could affect our information system security, natural disasters, environmental disasters, pandemics or other health crises, acts of war or terrorism, potential market or regulatory effects of the current United States presidential administration’s policies, changes to the credit rating of U.S. Government securities 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.

 

2

 

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Trustmark Corporation and Subsidiaries

Consolidated Balance Sheets

($ in thousands)

 

 

(Unaudited)

 

 

 

 

 

 

September 30, 2026

 

 

December 31, 2025

 

Assets

 

 

 

 

 

 

Cash and due from banks

 

$

710,165

 

 

$

668,007

 

Securities available for sale, at fair value (amortized cost: $3,080,313-2026;
   $1,842,444-2025; allowance for credit losses (ACL): $0-2026; $0-2025)

 

 

2,968,327

 

 

 

1,876,830

 

Securities held to maturity, net of ACL of $0
   (fair value: $0-2026; $1,180,569-2025)

 

 

—

 

 

 

1,207,454

 

Loans held for sale (LHFS)

 

 

245,564

 

 

 

278,789

 

Loans held for investment (LHFI)

 

 

13,869,171

 

 

 

13,674,233

 

Less ACL, LHFI

 

 

148,338

 

 

 

157,071

 

Net LHFI

 

 

13,720,833

 

 

 

13,517,162

 

Premises and equipment, net

 

 

199,475

 

 

 

225,658

 

Mortgage servicing rights (MSR)

 

 

158,081

 

 

 

131,289

 

Goodwill

 

 

334,605

 

 

 

334,605

 

Other real estate, net

 

 

2,697

 

 

 

6,957

 

Operating lease right-of-use assets

 

 

104,769

 

 

 

32,152

 

Other assets

 

 

663,835

 

 

 

646,308

 

Total Assets

 

$

19,108,351

 

 

$

18,925,211

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

Noninterest-bearing

 

$

3,262,885

 

 

$

3,036,504

 

Interest-bearing

 

 

12,795,175

 

 

 

12,463,280

 

Total deposits

 

 

16,058,060

 

 

 

15,499,784

 

Federal funds purchased

 

 

205,000

 

 

 

445,000

 

Other borrowings

 

 

136,301

 

 

 

364,762

 

Subordinated notes

 

 

172,195

 

 

 

171,966

 

Junior subordinated debt securities

 

 

61,856

 

 

 

61,856

 

ACL on off-balance sheet credit exposures

 

 

28,619

 

 

 

27,951

 

Operating lease liabilities

 

 

109,137

 

 

 

36,250

 

Other liabilities

 

 

243,924

 

 

 

195,965

 

Total Liabilities

 

 

17,015,092

 

 

 

16,803,534

 

 

 

 

 

 

 

 

Shareholders' Equity

 

 

 

 

 

 

Common stock, no par value:

 

 

 

 

 

 

Authorized: 250,000,000 shares
Issued and outstanding: 57,804,451 shares - 2026; 59,012,423 shares - 2025

 

 

12,044

 

 

 

12,296

 

Capital surplus

 

 

24,378

 

 

 

81,951

 

Retained earnings

 

 

2,174,556

 

 

 

2,041,055

 

Accumulated other comprehensive income (loss), net of tax

 

 

(117,719

)

 

 

(13,625

)

Total Shareholders' Equity

 

 

2,093,259

 

 

 

2,121,677

 

Total Liabilities and Shareholders' Equity

 

$

19,108,351

 

 

$

18,925,211

 

 

See notes to consolidated financial statements.

3

 

Trustmark Corporation and Subsidiaries

Consolidated Statements of Income

($ in thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Interest Income

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on LHFS & LHFI

 

$

209,069

 

 

$

211,859

 

 

$

617,838

 

 

$

617,529

 

Interest on securities:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

27,914

 

 

 

26,625

 

 

 

81,647

 

 

 

78,950

 

Other interest income

 

 

3,932

 

 

 

4,233

 

 

 

10,933

 

 

 

12,813

 

Total Interest Income

 

 

240,915

 

 

 

242,717

 

 

 

710,418

 

 

 

709,292

 

Interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

67,582

 

 

 

71,065

 

 

 

192,930

 

 

 

206,960

 

Interest on federal funds purchased and securities sold under
   repurchase agreements

 

 

1,843

 

 

 

4,626

 

 

 

9,566

 

 

 

13,437

 

Other interest expense

 

 

3,843

 

 

 

4,585

 

 

 

14,086

 

 

 

15,643

 

Total Interest Expense

 

 

73,268

 

 

 

80,276

 

 

 

216,582

 

 

 

236,040

 

Net Interest Income

 

 

167,647

 

 

 

162,441

 

 

 

493,836

 

 

 

473,252

 

Provision for credit losses (PCL), LHFI

 

 

1,179

 

 

 

1,390

 

 

 

10,319

 

 

 

14,861

 

PCL, off-balance sheet credit exposures

 

 

1,085

 

 

 

295

 

 

 

668

 

 

 

(3,206

)

PCL, LHFI sale of 1-4 family mortgage loans

 

 

—

 

 

 

—

 

 

 

(9,227

)

 

 

—

 

Net Interest Income After PCL

 

 

165,383

 

 

 

160,756

 

 

 

492,076

 

 

 

461,597

 

Noninterest Income

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

10,626

 

 

 

11,251

 

 

 

31,655

 

 

 

32,472

 

Bank card and other fees

 

 

8,149

 

 

 

8,318

 

 

 

24,880

 

 

 

24,736

 

Mortgage banking, net

 

 

7,880

 

 

 

8,182

 

 

 

25,728

 

 

 

25,555

 

Wealth management

 

 

11,161

 

 

 

9,798

 

 

 

32,476

 

 

 

28,979

 

Other, net

 

 

1,677

 

 

 

2,382

 

 

 

9,670

 

 

 

10,663

 

Gain on sale-leaseback, net

 

 

61,518

 

 

 

—

 

 

 

61,518

 

 

 

—

 

Securities gains (losses), net

 

 

(61,511

)

 

 

—

 

 

 

(61,511

)

 

 

—

 

Total Noninterest Income

 

 

39,500

 

 

 

39,931

 

 

 

124,416

 

 

 

122,405

 

Noninterest Expense

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

74,684

 

 

 

71,508

 

 

 

221,916

 

 

 

208,298

 

Services and fees

 

 

29,945

 

 

 

28,777

 

 

 

87,637

 

 

 

82,022

 

Net occupancy - premises

 

 

8,555

 

 

 

7,774

 

 

 

24,109

 

 

 

22,666

 

Equipment expense

 

 

6,958

 

 

 

6,410

 

 

 

21,223

 

 

 

18,924

 

Other expense

 

 

14,294

 

 

 

16,464

 

 

 

45,393

 

 

 

48,148

 

Total Noninterest Expense

 

 

134,436

 

 

 

130,933

 

 

 

400,278

 

 

 

380,058

 

Income Before Income Taxes

 

 

70,447

 

 

 

69,754

 

 

 

216,214

 

 

 

203,944

 

Income taxes

 

 

12,373

 

 

 

12,967

 

 

 

38,503

 

 

 

37,683

 

Net Income

 

$

58,074

 

 

$

56,787

 

 

$

177,711

 

 

$

166,261

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share (EPS)

 

 

 

 

 

 

 

 

 

 

 

 

Basic EPS

 

$

1.00

 

 

$

0.94

 

 

$

3.04

 

 

$

2.75

 

Diluted EPS

 

$

1.00

 

 

$

0.94

 

 

$

3.03

 

 

$

2.74

 

 

See notes to consolidated financial statements.

4

 

Trustmark Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

($ in thousands)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Net income per consolidated statements of income

 

$

58,074

 

 

$

56,787

 

 

$

177,711

 

 

$

166,261

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gains (losses) on available for sale securities and
   transferred securities:

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized holding gains (losses) arising during the
   period

 

 

(132,122

)

 

 

7,286

 

 

 

(155,912

)

 

 

42,229

 

Reclassification adjustment for net (gains) losses realized
   in net income

 

 

46,133

 

 

 

—

 

 

 

46,133

 

 

 

—

 

Change in net unrealized holding loss on securities
   previously transferred to held to maturity

 

 

24,940

 

 

 

2,567

 

 

 

29,109

 

 

 

7,723

 

Pension and other postretirement benefit plans:

 

 

 

 

 

 

 

 

 

 

 

 

Reclassification adjustments for changes realized in net
   income:

 

 

 

 

 

 

 

 

 

 

 

 

Net change in prior service costs

 

 

—

 

 

 

2

 

 

 

—

 

 

 

8

 

Recognized net (gain) loss due to lump sum settlement

 

 

—

 

 

 

(21

)

 

 

(23

)

 

 

(59

)

Change in net actuarial loss

 

 

55

 

 

 

46

 

 

 

173

 

 

 

145

 

Derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

Change in the accumulated gain (loss) on effective cash
   flow hedge derivatives

 

 

(14,949

)

 

 

(617

)

 

 

(25,385

)

 

 

8,366

 

Reclassification adjustment for (gain) loss realized in
   net income

 

 

506

 

 

 

1,846

 

 

 

1,811

 

 

 

5,867

 

Other comprehensive income (loss), net of tax

 

 

(75,437

)

 

 

11,109

 

 

 

(104,094

)

 

 

64,279

 

Comprehensive income (loss)

 

$

(17,363

)

 

$

67,896

 

 

$

73,617

 

 

$

230,540

 

 

See notes to consolidated financial statements.

 

5

 

Trustmark Corporation and Subsidiaries

Consolidated Statements of Changes in Shareholders' Equity

($ in thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

 

Comprehensive

 

 

 

 

 

 

Shares

 

 

 

 

 

Capital

 

 

Retained

 

 

Income

 

 

 

 

 

 

Outstanding

 

 

Amount

 

 

Surplus

 

 

Earnings

 

 

(Loss)

 

 

Total

 

Balance, January 1, 2026

 

 

59,012,423

 

 

$

12,296

 

 

$

81,951

 

 

$

2,041,055

 

 

$

(13,625

)

 

$

2,121,677

 

Net income per consolidated statements
   of income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

56,115

 

 

 

—

 

 

 

56,115

 

Other comprehensive income (loss),
   net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(13,811

)

 

 

(13,811

)

Common stock dividends paid
   ($0.25 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(14,866

)

 

 

—

 

 

 

(14,866

)

Common stock issued-net, long-term
   incentive plan

 

 

144,364

 

 

 

30

 

 

 

(3,114

)

 

 

—

 

 

 

—

 

 

 

(3,084

)

Repurchase and retirement of common stock

 

 

(477,057

)

 

 

(100

)

 

 

(19,704

)

 

 

—

 

 

 

—

 

 

 

(19,804

)

Compensation expense, long-term
   incentive plan

 

 

—

 

 

 

—

 

 

 

2,918

 

 

 

—

 

 

 

—

 

 

 

2,918

 

Balance, March 31, 2026

 

 

58,679,730

 

 

 

12,226

 

 

 

62,051

 

 

 

2,082,304

 

 

 

(27,436

)

 

 

2,129,145

 

Net income per consolidated statements
   of income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

63,522

 

 

 

—

 

 

 

63,522

 

Other comprehensive income (loss),
   net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(14,846

)

 

 

(14,846

)

Common stock dividends paid
   ($0.25 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(14,740

)

 

 

—

 

 

 

(14,740

)

Common stock issued-net, long-term
   incentive plan

 

 

21,171

 

 

 

5

 

 

 

(37

)

 

 

—

 

 

 

—

 

 

 

(32

)

Repurchase and retirement of common stock

 

 

(475,214

)

 

 

(99

)

 

 

(20,980

)

 

 

—

 

 

 

—

 

 

 

(21,079

)

Compensation expense, long-term
   incentive plan

 

 

—

 

 

 

—

 

 

 

1,661

 

 

 

—

 

 

 

—

 

 

 

1,661

 

Balance, June 30, 2026

 

 

58,225,687

 

 

 

12,132

 

 

 

42,695

 

 

 

2,131,086

 

 

 

(42,282

)

 

 

2,143,631

 

Net income per consolidated statements
   of income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

58,074

 

 

 

—

 

 

 

58,074

 

Other comprehensive income (loss),
   net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(75,437

)

 

 

(75,437

)

Common stock dividends paid
   ($0.25 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(14,604

)

 

 

—

 

 

 

(14,604

)

Common stock issued-net, long-term
   incentive plan

 

 

6,848

 

 

 

1

 

 

 

(241

)

 

 

—

 

 

 

—

 

 

 

(240

)

Repurchase and retirement of common stock

 

 

(428,084

)

 

 

(89

)

 

 

(19,987

)

 

 

—

 

 

 

—

 

 

 

(20,076

)

Compensation expense, long-term
   incentive plan

 

 

—

 

 

 

—

 

 

 

1,911

 

 

 

—

 

 

 

—

 

 

 

1,911

 

Balance, September 30, 2026

 

 

57,804,451

 

 

$

12,044

 

 

$

24,378

 

 

$

2,174,556

 

 

$

(117,719

)

 

$

2,093,259

 

 

See notes to consolidated financial statements.

6

 

Trustmark Corporation and Subsidiaries

Consolidated Statements of Changes in Shareholders' Equity (continued)

($ in thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

 

Comprehensive

 

 

 

 

 

 

Shares

 

 

 

 

 

Capital

 

 

Retained

 

 

Income

 

 

 

 

 

 

Outstanding

 

 

Amount

 

 

Surplus

 

 

Earnings

 

 

(Loss)

 

 

Total

 

Balance, January 1, 2025

 

 

61,008,023

 

 

$

12,711

 

 

$

157,899

 

 

$

1,875,376

 

 

$

(83,659

)

 

$

1,962,327

 

Net income per consolidated statements
   of income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

53,633

 

 

 

—

 

 

 

53,633

 

Other comprehensive income (loss),
   net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

34,957

 

 

 

34,957

 

Common stock dividends paid
   ($0.24 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(14,732

)

 

 

—

 

 

 

(14,732

)

Common stock issued-net, long-term
   incentive plan

 

 

133,628

 

 

 

28

 

 

 

(2,443

)

 

 

—

 

 

 

—

 

 

 

(2,415

)

Repurchase and retirement of common stock

 

 

(423,240

)

 

 

(88

)

 

 

(14,926

)

 

 

—

 

 

 

—

 

 

 

(15,014

)

Compensation expense, long-term
   incentive plan

 

 

—

 

 

 

—

 

 

 

2,471

 

 

 

—

 

 

 

—

 

 

 

2,471

 

Balance, March 31, 2025

 

 

60,718,411

 

 

 

12,651

 

 

 

143,001

 

 

 

1,914,277

 

 

 

(48,702

)

 

 

2,021,227

 

Net income per consolidated statements
   of income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

55,841

 

 

 

—

 

 

 

55,841

 

Other comprehensive income (loss),
   net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

18,213

 

 

 

18,213

 

Common stock dividends paid
   ($0.24 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(14,620

)

 

 

—

 

 

 

(14,620

)

Common stock issued-net, long-term
   incentive plan

 

 

24,173

 

 

 

5

 

 

 

(54

)

 

 

—

 

 

 

—

 

 

 

(49

)

Repurchase and retirement of common stock

 

 

(340,900

)

 

 

(71

)

 

 

(10,939

)

 

 

—

 

 

 

—

 

 

 

(11,010

)

Compensation expense, long-term
   incentive plan

 

 

—

 

 

 

—

 

 

 

1,187

 

 

 

—

 

 

 

—

 

 

 

1,187

 

Balance, June 30, 2025

 

 

60,401,684

 

 

$

12,585

 

 

$

133,195

 

 

$

1,955,498

 

 

$

(30,489

)

 

$

2,070,789

 

Net income per consolidated statements
   of income

 

 

—

 

 

 

—

 

 

 

—

 

 

 

56,787

 

 

 

—

 

 

 

56,787

 

Other comprehensive income (loss), net of tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

11,109

 

 

 

11,109

 

Common stock dividends paid
   ($0.24 per share)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(14,600

)

 

 

—

 

 

 

(14,600

)

Common stock issued-net, long-term
   incentive plan

 

 

4,944

 

 

 

2

 

 

 

(78

)

 

 

—

 

 

 

—

 

 

 

(76

)

Repurchase and retirement of common stock

 

 

(280,252

)

 

 

(59

)

 

 

(10,975

)

 

 

—

 

 

 

—

 

 

 

(11,034

)

Compensation expense, long-term
   incentive plan

 

 

—

 

 

 

—

 

 

 

1,293

 

 

 

—

 

 

 

—

 

 

 

1,293

 

Balance, September 30, 2025

 

 

60,126,376

 

 

$

12,528

 

 

$

123,435

 

 

$

1,997,685

 

 

$

(19,380

)

 

$

2,114,268

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See notes to consolidated financial statements.

7

 

Trustmark Corporation and Subsidiaries

Consolidated Statements of Cash Flows

($ in thousands)

(Unaudited)

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

Operating Activities

 

 

 

 

 

 

Net income per consolidated statements of income

 

$

177,711

 

 

$

166,261

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

PCL

 

 

1,760

 

 

 

11,655

 

Depreciation and amortization

 

 

30,972

 

 

 

28,232

 

Net (accretion) amortization of securities

 

 

(20,549

)

 

 

(18,233

)

Securities (gains) losses, net

 

 

61,511

 

 

 

—

 

Gains on sales of loans, net

 

 

(13,542

)

 

 

(15,080

)

Gain on sale-leaseback, net

 

 

(61,518

)

 

 

—

 

Compensation expense, long-term incentive plan

 

 

6,490

 

 

 

4,951

 

Deferred income tax provision (benefit)

 

 

19,000

 

 

 

(582

)

Proceeds from sales of loans held for sale

 

 

952,512

 

 

 

872,013

 

Purchases and originations of loans held for sale

 

 

(907,203

)

 

 

(878,989

)

Originations of mortgage servicing rights

 

 

(15,845

)

 

 

(10,853

)

Earnings on bank-owned life insurance

 

 

(5,766

)

 

 

(5,722

)

Net change in other assets

 

 

(9,003

)

 

 

28,093

 

Net change in other liabilities

 

 

23,062

 

 

 

(4,014

)

Other operating activities, net

 

 

(16,400

)

 

 

8,535

 

Net cash from operating activities

 

 

223,192

 

 

 

186,267

 

 

 

 

 

 

 

 

Investing Activities

 

 

 

 

 

 

Proceeds from maturities, prepayments and calls of securities held to maturity

 

 

96,512

 

 

 

77,479

 

Proceeds from maturities, prepayments and calls of securities available for sale

 

 

178,780

 

 

 

161,953

 

Proceeds from sales of securities available for sale

 

 

568,036

 

 

 

—

 

Purchases of securities available for sale

 

 

(875,893

)

 

 

(209,382

)

Net proceeds from bank-owned life insurance

 

 

2,524

 

 

 

566

 

Net change in member bank stock

 

 

8,174

 

 

 

8,048

 

Net change in LHFI

 

 

(278,761

)

 

 

(473,472

)

Proceeds from sale of 1-4 family mortgage loans

 

 

63,108

 

 

 

—

 

Purchases of premises and equipment

 

 

(18,024

)

 

 

(8,440

)

Proceeds from sales of premises and equipment

 

 

940

 

 

 

3,592

 

Net proceeds from sale-leaseback

 

 

89,380

 

 

 

—

 

Proceeds from sales of other real estate

 

 

7,633

 

 

 

2,240

 

Purchases of software

 

 

(9,591

)

 

 

(6,326

)

Net investments in tax credit and other partnerships

 

 

1,751

 

 

 

(11,853

)

Net cash from investing activities

 

 

(165,431

)

 

 

(455,595

)

 

 

 

 

 

 

 

Financing Activities

 

 

 

 

 

 

Net change in deposits

 

 

558,276

 

 

 

522,799

 

Net change in federal funds purchased and securities sold under repurchase agreements

 

 

(240,000

)

 

 

95,992

 

Net change in short-term borrowings

 

 

(225,000

)

 

 

(100,000

)

Payments under finance lease obligations

 

 

(354

)

 

 

(338

)

Common stock dividends

 

 

(44,210

)

 

 

(43,952

)

Repurchase and retirement of common stock

 

 

(60,959

)

 

 

(37,058

)

Shares withheld to pay taxes, long-term incentive plan

 

 

(3,356

)

 

 

(2,540

)

Net cash from financing activities

 

 

(15,603

)

 

 

434,903

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

42,158

 

 

 

165,575

 

Cash and cash equivalents at beginning of period

 

 

668,007

 

 

 

567,251

 

Cash and cash equivalents at end of period

 

$

710,165

 

 

$

732,826

 

 

See notes to consolidated financial statements.

 

8

 

Trustmark Corporation and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

 

Note 1 – Business, Basis of Financial Statement Presentation and Principles of Consolidation

Trustmark Corporation (Trustmark) is a bank holding company headquartered in Jackson, Mississippi. Through its subsidiaries, Trustmark operates as a financial services organization providing banking and financial solutions to corporate institutions and individual customers through offices in Alabama, Florida, Georgia, Mississippi, Tennessee and Texas.

 

The consolidated financial statements include the accounts of Trustmark and all other entities in which Trustmark has a controlling financial interest. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current period presentation.

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements, and notes thereto, included in Trustmark’s Annual Report on Form 10-K for its fiscal year ended December 31, 2025 (2025 Annual Report).

Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year or any future period. In the opinion of Management, all adjustments (consisting of normal recurring accruals) considered necessary for the fair presentation of these consolidated financial statements have been included. The preparation of financial statements in conformity with these accounting principles requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and income and expense during the reporting periods and the related disclosures. Although Management’s estimates contemplate current conditions and how they are expected to change in the future, it is reasonably possible that in 2026 actual conditions could vary from those anticipated, which could affect Trustmark’s financial condition and results of operations. Actual results could differ from those estimates.

 

Note 2 – Securities Available for Sale and Held to Maturity

The following tables are a summary of the amortized cost and estimated fair value of securities available for sale and held to maturity at September 30, 2026 and December 31, 2025 ($ in thousands):

 

 

 

Securities Available for Sale

 

 

Securities Held to Maturity

 

September 30, 2026

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Estimated
Fair
Value

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Estimated
Fair
Value

 

U.S. Treasury securities

 

$

209,727

 

 

$

20

 

 

$

(7,058

)

 

$

202,689

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

U.S. Government agency
   obligations

 

 

71,440

 

 

 

—

 

 

 

(4,343

)

 

 

67,097

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage pass-
   through securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Guaranteed by GNMA

 

 

356,401

 

 

 

—

 

 

 

(17,028

)

 

 

339,373

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Issued by FNMA and
   FHLMC

 

 

1,582,207

 

 

 

246

 

 

 

(49,852

)

 

 

1,532,601

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Other residential mortgage-
   backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by
   FNMA, FHLMC or
   GNMA

 

 

58,168

 

 

 

—

 

 

 

(3,227

)

 

 

54,941

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Commercial mortgage-
   backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by
   FNMA, FHLMC or
   GNMA

 

 

802,370

 

 

 

—

 

 

 

(30,744

)

 

 

771,626

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

3,080,313

 

 

$

266

 

 

$

(112,252

)

 

$

2,968,327

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

9

 

 

 

Securities Available for Sale

 

 

Securities Held to Maturity

 

December 31, 2025

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Estimated
Fair
Value

 

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

Estimated
Fair
Value

 

U.S. Treasury Securities

 

$

205,282

 

 

$

3,666

 

 

$

—

 

 

$

208,948

 

 

$

30,615

 

 

$

185

 

 

$

—

 

 

$

30,800

 

U.S. Government agency
   obligations

 

 

70,924

 

 

 

609

 

 

 

(684

)

 

 

70,849

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage pass-
   through securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Guaranteed by GNMA

 

 

40,425

 

 

 

106

 

 

 

(1,996

)

 

 

38,535

 

 

 

13,154

 

 

 

22

 

 

 

(393

)

 

 

12,783

 

Issued by FNMA and
   FHLMC

 

 

1,165,292

 

 

 

33,836

 

 

 

(11,369

)

 

 

1,187,759

 

 

 

372,311

 

 

 

2,070

 

 

 

(7,812

)

 

 

366,569

 

Other residential mortgage-
   backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by
   FNMA, FHLMC or
   GNMA

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

96,667

 

 

 

—

 

 

 

(4,233

)

 

 

92,434

 

Commercial mortgage-
   backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by
   FNMA, FHLMC or
   GNMA

 

 

360,521

 

 

 

10,698

 

 

 

(480

)

 

 

370,739

 

 

 

694,707

 

 

 

73

 

 

 

(16,797

)

 

 

677,983

 

Total

 

$

1,842,444

 

 

$

48,915

 

 

$

(14,529

)

 

$

1,876,830

 

 

$

1,207,454

 

 

$

2,350

 

 

$

(29,235

)

 

$

1,180,569

 

 

Securities Transferred

During the third quarter of 2026, Trustmark executed a restructuring of its investment securities portfolio to reposition lower-yielding investment securities into higher-yielding investment securities. In connection with the restructuring, Trustmark changed its intent to hold its securities held to maturity until maturity and transferred all of its securities held to maturity, with an amortized cost of $1.118 billion, to securities available for sale. At the transfer date, the transferred securities had an unrealized loss of $43.5 million. Trustmark also evaluated the securities for credit losses and determined that no allowance for credit losses was required. As a result of the transfer, Trustmark intends to classify any new securities purchased as securities available for sale and does not anticipate using the held to maturity classification for the foreseeable future.

 

The amortized cost basis of the securities transferred back to securities available for sale included the remaining net unrealized loss created by the prior transfers of securities available for sale to held to maturity. For the securities that were not subsequently sold, that net unrealized loss remaining in accumulated other comprehensive income (loss), continues to be amortized over the remaining lives of the securities as a yield adjustment. At September 30, 2026, the net unamortized, unrealized loss included in accumulated other comprehensive income (loss) related to securities previously transferred from available for sale to held to maturity totaled $7.2 million compared to $36.3 million at December 31, 2025, with the decrease primarily due to the sale of securities.

ACL on Securities

Securities Available for Sale

Quarterly, Trustmark evaluates if any security has a fair value less than its amortized cost. Once these securities are identified, in order to determine whether a decline in fair value resulted from a credit loss or other factors, Trustmark performs further analysis. If Trustmark determines that a credit loss exists, the credit portion of the allowance is measured by a discounted cash flow (DCF) analysis using the effective interest rate as of the security’s purchase date. The amount of credit loss recorded by Trustmark is limited to the amount by which the amortized cost exceeds the fair value. The DCF analysis utilizes contractual maturities, as well as third-party credit ratings and cumulative default rates published annually by Moody’s Investors Service (Moody’s).

At both September 30, 2026 and December 31, 2025, the results of the analysis did not identify any securities that warranted DCF analysis, and no credit loss was recognized on any of the securities available for sale.

Accrued interest receivable is excluded from the estimate of credit losses for securities available for sale. At September 30, 2026, accrued interest receivable totaled $8.7 million for securities available for sale compared to $5.9 million at December 31, 2025 and was reported in other assets on the accompanying consolidated balance sheets.

10

 

Securities Held to Maturity

As a result of the transfer of securities held to maturity to securities available for sale during the third quarter of 2026, Trustmark had no securities held to maturity at September 30, 2026. At December 31, 2025, Trustmark identified no securities held to maturity with the potential for credit loss exposure. After applying appropriate analysis, the total amount of current expected credit losses was zero at December 31, 2025. No reserve was recorded at December 31, 2025.

Accrued interest receivable is excluded from the estimate of credit losses for securities held to maturity. At December 31, 2025, accrued interest receivable totaled $2.1 million for securities held to maturity and was reported in other assets on the accompanying consolidated balance sheets.

At December 31, 2025, Trustmark had no securities held to maturity that were past due 30 days or more as to principal or interest payments or classified as nonaccrual.

Trustmark monitored the credit quality of securities held to maturity on a monthly basis through credit ratings. The following table presents the amortized cost of Trustmark’s securities held to maturity by credit rating, as determined by Moody’s, at December 31, 2025 ($ in thousands):

 

 

 

December 31, 2025

 

Aaa

 

 

$

52,405

 

Aa1 to Aa3

 

 

 

1,155,049

 

Total

 

 

$

1,207,454

 

 

11

 

The tables below include securities with gross unrealized losses for which an allowance for credit losses has not been recorded segregated by length of impairment at September 30, 2026 and December 31, 2025 ($ in thousands):

 

 

 

Less than 12 Months

 

 

12 Months or More

 

 

Total

 

September 30, 2026

 

Estimated
Fair Value

 

 

Gross
Unrealized
Losses

 

 

Estimated
Fair Value

 

 

Gross
Unrealized
Losses

 

 

Estimated
Fair Value

 

 

Gross
Unrealized
Losses

 

U.S. Treasury securities

 

$

184,683

 

 

$

(7,058

)

 

$

—

 

 

$

—

 

 

$

184,683

 

 

$

(7,058

)

U.S. Government agency obligations

 

 

52,054

 

 

 

(2,910

)

 

 

15,043

 

 

 

(1,433

)

 

 

67,097

 

 

 

(4,343

)

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage pass-through
   securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Guaranteed by GNMA

 

 

318,530

 

 

 

(13,091

)

 

 

20,817

 

 

 

(3,937

)

 

 

339,347

 

 

 

(17,028

)

Issued by FNMA and FHLMC

 

 

1,459,006

 

 

 

(41,686

)

 

 

59,547

 

 

 

(8,166

)

 

 

1,518,553

 

 

 

(49,852

)

Other residential mortgage-backed
   securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by FNMA,
   FHLMC or GNMA

 

 

—

 

 

 

—

 

 

 

54,941

 

 

 

(3,227

)

 

 

54,941

 

 

 

(3,227

)

Commercial mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by FNMA,
   FHLMC or GNMA

 

 

347,860

 

 

 

(10,312

)

 

 

423,766

 

 

 

(20,432

)

 

 

771,626

 

 

 

(30,744

)

Total

 

$

2,362,133

 

 

$

(75,057

)

 

$

574,114

 

 

$

(37,195

)

 

$

2,936,247

 

 

$

(112,252

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government agency obligations

 

$

3,905

 

 

$

(14

)

 

$

40,952

 

 

$

(670

)

 

$

44,857

 

 

$

(684

)

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage pass-through
   securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Guaranteed by GNMA

 

 

5,925

 

 

 

(18

)

 

 

26,946

 

 

 

(2,371

)

 

 

32,871

 

 

 

(2,389

)

Issued by FNMA and FHLMC

 

 

91,230

 

 

 

(234

)

 

 

205,163

 

 

 

(18,947

)

 

 

296,393

 

 

 

(19,181

)

Other residential mortgage-backed
   securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by FNMA,
   FHLMC or GNMA

 

 

—

 

 

 

—

 

 

 

92,434

 

 

 

(4,233

)

 

 

92,434

 

 

 

(4,233

)

Commercial mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by FNMA,
   FHLMC or GNMA

 

 

—

 

 

 

—

 

 

 

739,436

 

 

 

(17,277

)

 

 

739,436

 

 

 

(17,277

)

Total

 

$

101,060

 

 

$

(266

)

 

$

1,104,931

 

 

$

(43,498

)

 

$

1,205,991

 

 

$

(43,764

)

The unrealized losses shown above are due to increases in market rates over the yields available at the time of purchase of the underlying securities and not credit quality. Trustmark does not intend to sell these securities and it is more likely than not that Trustmark will not be required to sell the investments before recovery of their amortized cost bases, which may be at maturity.

Securities Gains and Losses

Realized gains and losses are determined using the specific identification method and are included in noninterest income as securities gains (losses), net. For the periods presented, gross realized losses as a result of calls and dispositions of securities, as well as any associated proceeds, are shown below ($ in thousands).

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

Available for Sale

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Proceeds from calls and sales of securities

 

$

568,036

 

 

$

—

 

 

$

568,036

 

 

$

—

 

Gross realized (losses)

 

 

(61,511

)

 

 

—

 

 

 

(61,511

)

 

 

—

 

During the third quarter of 2026, Trustmark restructured its investment securities portfolio by selling securities available for sale with an amortized cost of $629.5 million that had a weighted-average yield of approximately 1.4%, which generated a loss of $61.5 million ($46.1 million, net of taxes) and was recorded to noninterest income in securities gains (losses), net. Proceeds from the sale were used to purchase $628.0 million of available for sale securities with a weighted-average yield of approximately 5.0%.

 

12

 

Securities Pledged

Securities with a carrying value of $1.666 billion and $1.709 billion at September 30, 2026 and December 31, 2025, respectively, were pledged to collateralize public deposits and for other purposes as permitted by law. At both September 30, 2026 and December 31, 2025, none of these securities were pledged under the Federal Reserve Discount Window program to provide additional contingency funding capacity.

Contractual Maturities

The amortized cost and estimated fair value of securities available for sale at September 30, 2026, by contractual maturity, are shown below ($ in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

 

 

 

Securities
Available for Sale

 

 

 

Amortized
Cost

 

 

Estimated
Fair Value

 

Due in one year or less

 

$

39,848

 

 

$

39,851

 

Due after one year through five years

 

 

96,260

 

 

 

92,797

 

Due after five years through ten years

 

 

145,059

 

 

 

137,138

 

 

 

 

281,167

 

 

 

269,786

 

Mortgage-backed securities

 

 

2,799,146

 

 

 

2,698,541

 

Total

 

$

3,080,313

 

 

$

2,968,327

 

 

Note 3 – LHFI and ACL, LHFI

At September 30, 2026 and December 31, 2025, LHFI consisted of the following ($ in thousands):

 

 

 

September 30, 2026

 

 

December 31, 2025

 

Loans secured by real estate:

 

 

 

 

 

 

Construction, land development and other land

 

$

597,759

 

 

$

549,353

 

Other secured by 1-4 family residential properties

 

 

729,020

 

 

 

704,514

 

Secured by nonfarm, nonresidential properties

 

 

3,192,249

 

 

 

3,304,523

 

Other real estate secured

 

 

1,935,208

 

 

 

2,124,272

 

Other loans secured by real estate:

 

 

 

 

 

 

Other construction

 

 

678,225

 

 

 

595,238

 

Secured by 1-4 family residential properties

 

 

2,409,616

 

 

 

2,351,675

 

Commercial and industrial loans

 

 

2,212,869

 

 

 

1,999,464

 

Consumer loans

 

 

167,535

 

 

 

163,754

 

State and other political subdivision loans

 

 

1,003,890

 

 

 

1,061,584

 

Other commercial loans and leases

 

 

942,800

 

 

 

819,856

 

LHFI

 

 

13,869,171

 

 

 

13,674,233

 

Less ACL

 

 

148,338

 

 

 

157,071

 

Net LHFI

 

$

13,720,833

 

 

$

13,517,162

 

 

Accrued interest receivable is not included in the amortized cost basis of Trustmark’s LHFI. At September 30, 2026 and December 31, 2025, accrued interest receivable for LHFI totaled $61.6 million and $64.1 million, respectively, with no related ACL and was reported in other assets on the accompanying consolidated balance sheets.

Loan Concentrations

Trustmark does not have any loan concentrations other than those reflected in the preceding table, which exceed 10% of total LHFI. At September 30, 2026, Trustmark’s geographic loan distribution was concentrated primarily in its six key market regions: Alabama, Florida, Georgia, Mississippi, Tennessee and Texas. Accordingly, the ultimate collectability of a substantial portion of these loans is susceptible to changes in market conditions in these areas.

13

 

Nonaccrual and Past Due LHFI

No material interest income was recognized in the income statement on nonaccrual LHFI for each of the periods ended September 30, 2026 and 2025.

The following tables provide the amortized cost basis of loans on nonaccrual status and loans past due 90 days or more still accruing interest at September 30, 2026 and December 31, 2025 ($ in thousands):

 

 

 

September 30, 2026

 

 

 

Nonaccrual With No ACL

 

 

Total Nonaccrual

 

 

Loans Past Due 90 Days or More Still Accruing

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

Construction, land development and other land

 

$

147

 

 

$

577

 

 

$

—

 

Other secured by 1-4 family residential properties

 

 

884

 

 

 

9,563

 

 

 

975

 

Secured by nonfarm, nonresidential properties

 

 

788

 

 

 

9,479

 

 

 

—

 

Other loans secured by real estate:

 

 

 

 

 

 

 

 

 

Secured by 1-4 family residential properties

 

 

—

 

 

 

13,020

 

 

 

2,711

 

Commercial and industrial loans

 

 

—

 

 

 

20,686

 

 

 

5

 

Consumer loans

 

 

—

 

 

 

253

 

 

 

436

 

Other commercial loans and leases

 

 

707

 

 

 

769

 

 

 

—

 

Total

 

$

2,526

 

 

$

54,347

 

 

$

4,127

 

 

 

 

December 31, 2025

 

 

 

Nonaccrual With No ACL

 

 

Total Nonaccrual

 

 

Loans Past Due 90 Days or More Still Accruing

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

Construction, land development and other land

 

$

156

 

 

$

355

 

 

$

—

 

Other secured by 1-4 family residential properties

 

 

715

 

 

 

8,991

 

 

 

520

 

Secured by nonfarm, nonresidential properties

 

 

2,105

 

 

 

5,579

 

 

 

—

 

Other real estate secured

 

 

234

 

 

 

399

 

 

 

—

 

Other loans secured by real estate:

 

 

 

 

 

 

 

 

 

Secured by 1-4 family residential properties

 

 

3,414

 

 

 

64,293

 

 

 

3,133

 

Commercial and industrial loans

 

 

145

 

 

 

3,615

 

 

 

—

 

Consumer loans

 

 

—

 

 

 

385

 

 

 

449

 

State and other political subdivision loans

 

 

—

 

 

 

—

 

 

 

995

 

Other commercial loans and leases

 

 

764

 

 

 

774

 

 

 

—

 

Total

 

$

7,533

 

 

$

84,391

 

 

$

5,097

 

 

14

 

The following tables provide an aging analysis of the amortized cost basis of past due LHFI (including nonaccrual LHFI) at September 30, 2026 and December 31, 2025 ($ in thousands):

 

 

 

September 30, 2026

 

 

 

Past Due

 

 

 

 

 

 

 

 

 

30-59 Days

 

 

60-89 Days

 

 

90 Days
or More

 

 

Total Past Due

 

 

Current
Loans

 

 

Total LHFI

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development and
   other land

 

$

140

 

 

$

73

 

 

$

504

 

 

$

717

 

 

$

597,042

 

 

$

597,759

 

Other secured by 1-4 family residential
   properties

 

 

6,972

 

 

 

1,351

 

 

 

3,556

 

 

 

11,879

 

 

 

717,141

 

 

 

729,020

 

Secured by nonfarm, nonresidential
   properties

 

 

353

 

 

 

—

 

 

 

8,389

 

 

 

8,742

 

 

 

3,183,507

 

 

 

3,192,249

 

Other real estate secured

 

 

142

 

 

 

—

 

 

 

—

 

 

 

142

 

 

 

1,935,066

 

 

 

1,935,208

 

Other loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other construction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

678,225

 

 

 

678,225

 

Secured by 1-4 family residential properties

 

 

12,981

 

 

 

6,126

 

 

 

9,299

 

 

 

28,406

 

 

 

2,381,210

 

 

 

2,409,616

 

Commercial and industrial loans

 

 

948

 

 

 

200

 

 

 

17,981

 

 

 

19,129

 

 

 

2,193,740

 

 

 

2,212,869

 

Consumer loans

 

 

1,336

 

 

 

372

 

 

 

515

 

 

 

2,223

 

 

 

165,312

 

 

 

167,535

 

State and other political subdivision loans

 

 

44

 

 

 

—

 

 

 

—

 

 

 

44

 

 

 

1,003,846

 

 

 

1,003,890

 

Other commercial loans and leases

 

 

2,599

 

 

 

2

 

 

 

707

 

 

 

3,308

 

 

 

939,492

 

 

 

942,800

 

Total

 

$

25,515

 

 

$

8,124

 

 

$

40,951

 

 

$

74,590

 

 

$

13,794,581

 

 

$

13,869,171

 

 

 

 

December 31, 2025

 

 

 

Past Due

 

 

 

 

 

 

 

 

 

30-59 Days

 

 

60-89 Days

 

 

90 Days
or More

 

 

Total Past Due

 

 

Current
Loans

 

 

Total LHFI

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development and
   other land

 

$

786

 

 

$

139

 

 

$

—

 

 

$

925

 

 

$

548,428

 

 

$

549,353

 

Other secured by 1-4 family residential
   properties

 

 

6,118

 

 

 

1,238

 

 

 

3,868

 

 

 

11,224

 

 

 

693,290

 

 

 

704,514

 

Secured by nonfarm, nonresidential
   properties

 

 

1,798

 

 

 

185

 

 

 

3,829

 

 

 

5,812

 

 

 

3,298,711

 

 

 

3,304,523

 

Other real estate secured

 

 

1

 

 

 

—

 

 

 

316

 

 

 

317

 

 

 

2,123,955

 

 

 

2,124,272

 

Other loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other construction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

595,238

 

 

 

595,238

 

Secured by 1-4 family residential properties

 

 

19,838

 

 

 

8,340

 

 

 

34,838

 

 

 

63,016

 

 

 

2,288,659

 

 

 

2,351,675

 

Commercial and industrial loans

 

 

2,828

 

 

 

352

 

 

 

1,014

 

 

 

4,194

 

 

 

1,995,270

 

 

 

1,999,464

 

Consumer loans

 

 

2,109

 

 

 

402

 

 

 

453

 

 

 

2,964

 

 

 

160,790

 

 

 

163,754

 

State and other political subdivision loans

 

 

8

 

 

 

—

 

 

 

995

 

 

 

1,003

 

 

 

1,060,581

 

 

 

1,061,584

 

Other commercial loans and leases

 

 

4

 

 

 

15

 

 

 

—

 

 

 

19

 

 

 

819,837

 

 

 

819,856

 

Total

 

$

33,490

 

 

$

10,671

 

 

$

45,313

 

 

$

89,474

 

 

$

13,584,759

 

 

$

13,674,233

 

 

Modified LHFI

Occasionally, Trustmark modifies loans for borrowers experiencing financial difficulty by providing payment delays, interest-only payments for an extended period of time, maturity extensions or interest rate reductions. Other concessions may arise from court proceedings or may be imposed by law. In some cases, Trustmark provides multiple types of concessions on one loan.

15

 

The following tables present the amortized cost of LHFI of loans modified to borrowers experiencing financial difficulty disaggregated by class of loan and type of modification at the end of each of the periods presented ($ in thousands). The percentage of the amortized cost basis of LHFI that were modified to borrowers experiencing financial difficulty as compared to the amortized cost basis of each class of LHFI is also presented below:

 

 

 

Three Months Ended September 30, 2026

 

 

 

Term Extension

 

 

% of Total Class of Loan

 

Loans secured by real estate:

 

 

 

 

 

 

Other secured by 1-4 family residential properties

 

$

707

 

 

 

0.10

%

Other loans secured by real estate:

 

 

 

 

 

 

Secured by 1-4 family residential properties

 

 

23

 

 

 

0.00

%

Total

 

$

730

 

 

 

0.01

%

 

 

 

Three Months Ended September 30, 2025

 

 

 

Term Extension

 

 

% of Total Class of Loan

 

Loans secured by real estate:

 

 

 

 

 

 

Other secured by 1-4 family residential
   properties

 

$

619

 

 

 

0.09

%

Other loans secured by real estate:

 

 

 

 

 

 

Secured by 1-4 family residential properties

 

 

4,632

 

 

 

0.20

%

Total

 

$

5,251

 

 

 

0.04

%

 

 

 

Nine Months Ended September 30, 2026

 

 

 

Term Extension

 

 

% of Total Class of Loan

 

Loans secured by real estate:

 

 

 

 

 

 

Other secured by 1-4 family residential
   properties

 

$

2,910

 

 

 

0.40

%

Other loans secured by real estate:

 

 

 

 

 

 

Secured by 1-4 family residential properties

 

 

574

 

 

 

0.02

%

Total

 

$

3,484

 

 

 

0.03

%

 

 

 

Nine Months Ended September 30, 2025

 

 

 

Payment Delay

 

 

Term Extension

 

 

Total

 

 

% of Total Class of Loan

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

Other secured by 1-4 family residential
   properties

 

$

—

 

 

$

2,009

 

 

$

2,009

 

 

 

0.29

%

Other real estate secured

 

 

—

 

 

 

15,000

 

 

 

15,000

 

 

 

0.73

%

Other loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

Secured by 1-4 family residential properties

 

 

—

 

 

 

10,308

 

 

 

10,308

 

 

 

0.44

%

Commercial and industrial loans

 

 

12,824

 

 

 

—

 

 

 

12,824

 

 

 

0.67

%

Total

 

$

12,824

 

 

$

27,317

 

 

$

40,141

 

 

 

0.30

%

 

The following tables detail the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the periods presented:

 

 

Three Months Ended September 30, 2026

 

 

Financial Effect

 

 

Term Extension

Loans secured by real estate:

 

 

Other secured by 1-4 family residential properties

 

Modified four loans and nine lines of credit to amortize over twenty-four month terms

Other loans secured by real estate:

 

 

Secured by 1-4 family residential properties

 

Modified one loan to amortize over a twenty-four month term

 

16

 

 

 

 

Three Months Ended September 30, 2025

 

 

Financial Effect

 

 

Term Extension

Loans secured by real estate:

 

 

Other secured by 1-4 family residential properties

 

Modified two loans and nine lines of credit to amortize over twenty-four month terms

Other loans secured by real estate:

 

 

Secured by 1-4 family residential properties

 

Reamortized twenty-seven loans with term adjusted by weighted average of thirty-two months

 

 

 

Nine Months Ended September 30, 2026

 

 

Financial Effect

 

 

Term Extension

Loans secured by real estate:

 

 

Other secured by 1-4 family residential properties

 

Modified eleven loans and thirty-three lines of credit to amortize over twenty-four month terms and modified one loan to amortize over a fourteen month term

Other loans secured by real estate:

 

 

Secured by 1-4 family residential properties

 

Reamortized twenty-six loans with terms adjusted by weighted average of thirty-eight months

 

 

 

Nine Months Ended September 30, 2025

 

 

Financial Effect

 

 

Payment Delay

 

Term Extension

Loans secured by real estate:

 

 

 

 

Other secured by 1-4 family residential properties

 

 

 

Modified three loans and thirty-three lines of credit to amortize over a twenty-four month term

Other real estate secured

 

 

 

Extended maturity of one loan by twelve months

Other loans secured by real estate:

 

 

 

 

Secured by 1-4 family residential properties

 

 

 

Reamortized sixty-one loans with term adjusted by weighted-average of forty-one months

Commercial and industrial loans

 

One loan with eight monthly interest payments deferred and four loans with three interest-only monthly payments

 

 

At both September 30, 2026 and September 30, 2025, Trustmark had no unused commitments on modified loans to borrowers experiencing financial difficulty.

 

For all loans modified in the previous twelve months to borrowers experiencing financial difficulty, Trustmark had payment defaults during the three months ended September 30, 2026 on $54 thousand and $40 thousand of loans in the other secured by 1-4 family residential properties and secured by 1-4 family residential properties, respectively, that had received term extension modifications. During the nine months ended September 30, 2026, Trustmark had payment defaults on $122 thousand and $40 thousand of loans in the other secured by 1-4 family residential properties and secured by 1-4 family residential properties, respectively, that had received term extension modifications.

 

For all loans modified in the previous twelve months to borrowers experiencing financial difficulty, Trustmark had payment defaults during the three and nine months ended September 30, 2025 on $12.3 million of loans in the commercial and industrial loans portfolio that had received payment delay modifications and $439 thousand of loans in the other secured by 1-4 family residential properties that had received a term extension modification.

Trustmark has utilized loans 90 days or more past due to define payment default in determining modified loans that have subsequently defaulted. If Trustmark determines that a modified loan (or a portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is charged off against the ACL, LHFI.

17

 

Trustmark closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following tables provide details of the performance of such LHFI that have been modified in the preceding twelve months as of September 30, 2026 and 2025 ($ in thousands):

 

 

 

September 30, 2026

 

 

 

Past Due

 

 

 

 

 

 

 

 

 

30-59 Days

 

 

60-89 Days

 

 

90 Days
or More

 

 

Total Past Due

 

 

Current
Loans

 

 

Total

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other secured by 1-4 family residential
   properties

 

$

377

 

 

$

—

 

 

$

54

 

 

$

431

 

 

$

3,176

 

 

$

3,607

 

Other loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured by 1-4 family residential properties

 

 

178

 

 

 

—

 

 

 

40

 

 

 

218

 

 

 

396

 

 

 

614

 

Total

 

$

555

 

 

$

—

 

 

$

94

 

 

$

649

 

 

$

3,572

 

 

$

4,221

 

 

 

 

September 30, 2025

 

 

 

Past Due

 

 

 

 

 

 

 

 

 

30-59 Days

 

 

60-89 Days

 

 

90 Days
or More

 

 

Total Past Due

 

 

Current
Loans

 

 

Total

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other secured by 1-4 family residential
   properties

 

$

113

 

 

$

52

 

 

$

518

 

 

$

683

 

 

$

2,179

 

 

$

2,862

 

Other real estate secured

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

15,000

 

 

 

15,000

 

Other loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured by 1-4 family residential properties

 

 

765

 

 

 

958

 

 

 

326

 

 

 

2,049

 

 

 

8,354

 

 

 

10,403

 

Commercial and industrial loans

 

 

112

 

 

 

452

 

 

 

12,261

 

 

 

12,825

 

 

 

—

 

 

 

12,825

 

Total

 

$

990

 

 

$

1,462

 

 

$

13,105

 

 

$

15,557

 

 

$

25,533

 

 

$

41,090

 

Collateral-Dependent Loans

The following tables present the amortized cost basis of collateral-dependent loans by class of loans and collateral type as of September 30, 2026 and December 31, 2025 ($ in thousands):

 

 

 

September 30, 2026

 

 

 

Real Estate

 

 

Equipment and
 Machinery

 

 

Vehicles

 

 

Miscellaneous

 

 

Total

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development and
   other land

 

$

147

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

147

 

Other secured by 1-4 family residential
   properties

 

 

884

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

884

 

Secured by nonfarm, nonresidential
  properties

 

 

8,490

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

8,490

 

Commercial and industrial loans

 

 

—

 

 

 

17,115

 

 

 

535

 

 

 

2,005

 

 

 

19,655

 

Other commercial loans and leases

 

 

—

 

 

 

—

 

 

 

—

 

 

 

707

 

 

 

707

 

Total

 

$

9,521

 

 

$

17,115

 

 

$

535

 

 

$

2,712

 

 

$

29,883

 

 

18

 

 

 

 

December 31, 2025

 

 

 

Real Estate

 

 

Vehicles

 

 

Miscellaneous

 

 

Total

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development and other land

 

$

156

 

 

$

—

 

 

$

—

 

 

$

156

 

Other secured by 1-4 family residential properties

 

 

848

 

 

 

—

 

 

 

—

 

 

 

848

 

Secured by nonfarm, nonresidential properties

 

 

2,531

 

 

 

—

 

 

 

—

 

 

 

2,531

 

Other real estate secured

 

 

15,234

 

 

 

—

 

 

 

—

 

 

 

15,234

 

Other loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

Secured by 1-4 family residential properties

 

 

3,414

 

 

 

—

 

 

 

—

 

 

 

3,414

 

Commercial and industrial loans

 

 

—

 

 

 

1,554

 

 

 

250

 

 

 

1,804

 

Consumer loans

 

 

—

 

 

 

—

 

 

 

103

 

 

 

103

 

Other commercial loans and leases

 

 

—

 

 

 

—

 

 

 

764

 

 

 

764

 

Total

 

$

22,183

 

 

$

1,554

 

 

$

1,117

 

 

$

24,854

 

 

A loan is collateral dependent when the borrower is experiencing financial difficulty and repayment of the loan is expected to be provided substantially through the sale of the collateral. The following provides a qualitative description by class of loan of the collateral that secures Trustmark’s collateral-dependent LHFI:

 

•
Construction, land development and other land – Loans within this loan class are secured by liens on real estate properties. There have been no significant changes to the collateral that secures these financial assets during the period.
•
Other secured by 1-4 family residential properties – Loans within this loan class are secured by liens on real estate properties. There have been no significant changes to the collateral that secures these financial assets during the period.
•
Secured by nonfarm, nonresidential properties – Loans within this loan class are secured by liens on real estate properties. There have been no significant changes to the collateral that secures these financial assets during the period.
•
Other real estate secured – Loans within this loan class are secured by liens on real estate properties. There have been no significant changes to the collateral that secures these financial assets during the period.
•
Commercial and industrial loans – Loans within this loan class are primarily secured by inventory, accounts receivables, equipment and other non-real estate collateral. During the third quarter of 2026, one relationship had a decrease in collateral value that secures the credit. There have been no other significant changes to the collateral that secures these financial assets during the period.
•
Consumer loans – Loans within this loan class are secured by non-real estate collateral. There have been no significant changes to the collateral that secures these financial assets during the period.
•
Other commercial loans and leases – Loans and leases within this loan class are secured by non-real estate collateral. There have been no significant changes to the collateral that secures these financial assets during the period.

Credit Quality Indicators

Trustmark’s LHFI portfolio credit quality indicators focus on six key quality ratios that are compared against bank tolerances. The loan indicators are total classified outstanding, total criticized outstanding, nonperforming loans, nonperforming assets, delinquencies and net loan losses. Due to the homogeneous nature of consumer loans, Trustmark does not assign a formal internal risk rating to each credit and therefore the criticized and classified measures are primarily composed of commercial loans.

19

 

In addition to monitoring portfolio credit quality indicators, Trustmark also measures how effectively the lending process is being managed and risks are being identified. As part of an ongoing monitoring process, Trustmark grades the commercial portfolio segment as it relates to credit file completion and financial statement exceptions, underwriting, collateral documentation and compliance with law as shown below:

•
Credit File Completeness and Financial Statement Exceptions – evaluates the quality and condition of credit files in terms of content and completeness and focuses on efforts to obtain and document sufficient information to determine the quality and status of credits. Also included is an evaluation of the systems/procedures used to ensure compliance with policy.
•
Underwriting – evaluates whether credits are adequately analyzed, appropriately structured and properly approved within loan policy requirements. A properly approved credit is approved by an adequate authority in a timely manner with all conditions of approval fulfilled. Total policy exceptions measure the level of underwriting and other policy exceptions within a portfolio segment.
•
Collateral Documentation – focuses on the adequacy of documentation to perfect Trustmark’s collateral position and substantiate collateral value. Collateral exceptions measure the level of documentation exceptions within a portfolio segment. Collateral exceptions occur when certain collateral documentation is either not present or not current.
•
Compliance with Law – focuses on underwriting, documentation, approval and reporting in compliance with banking laws and regulations. Primary emphasis is directed to the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), Regulation O requirements and regulations governing appraisals.

Commercial Credits

Trustmark has established a loan grading system that consists of ten individual credit risk grades (risk ratings) that encompass a range from loans where the expectation of loss is negligible to loans where loss has been established. The model is based on the risk of default for an individual credit and establishes certain criteria to delineate the level of risk across the ten unique credit risk grades. Credit risk grade definitions are as follows:

•
Risk Rate (RR) 1 through RR 6 – Grades one through six represent groups of loans that are not subject to criticism as defined in regulatory guidance. Loans in these groups exhibit characteristics that represent low to moderate risk measured by using a variety of credit risk criteria such as cash flow coverage, debt service coverage, balance sheet leverage, liquidity, management experience, industry position, prevailing economic conditions, support from secondary sources of repayment and other credit factors that may be relevant to a specific loan. In general, these loans are supported by properly margined collateral and guarantees of principal parties.
•
Other Assets Especially Mentioned (Special Mention) (RR 7) – a loan that has a potential weakness that if not corrected will lead to a more severe rating. This rating is for credits that are currently protected but potentially weak because of an adverse feature or condition that if not corrected will lead to a further downgrade.
•
Substandard (RR 8) – a loan that has at least one identified weakness that is well defined. This rating is for credits where the primary sources of repayment are not viable at the time of evaluation or where either the capital or collateral is not adequate to support the loan and the secondary means of repayment do not provide a sufficient level of support to offset the identified weakness. Loss potential exists in the aggregate amount of substandard loans but does not necessarily exist in individual loans.
•
Doubtful (RR 9) – a loan with an identified weakness that does not have a valid secondary source of repayment. Generally, these credits have an impaired primary source of repayment and secondary sources are not sufficient to prevent a loss in the credit. The exact amount of the loss has not been determined at this time.
•
Loss (RR 10) – a loan or a portion of a loan that is deemed to be uncollectible.

By definition, credit risk grades special mention (RR 7), substandard (RR 8), doubtful (RR 9) and loss (RR 10) are criticized loans while substandard (RR 8), doubtful (RR 9) and loss (RR 10) are classified loans. These definitions are standardized by all bank regulatory agencies and are generally equally applied to each individual lending institution. The remaining credit risk grades are considered pass credits and are solely defined by Trustmark.

To enhance this process, Trustmark has determined that certain loans will be individually assessed, and a formal analysis will be performed and based upon the analysis the loan will be written down to the net realizable value. Trustmark will individually assess and remove loans from the pool in the following circumstances:

•
Commercial nonaccrual loans with total exposure of $500 thousand (excluding those portions of the debt that are government guaranteed or are secured by Trustmark deposits or marketable securities) or more.

20

 

•
Any loan that is believed to not share similar risk characteristics with the rest of the pool will be individually assessed. Otherwise, the loan will be left within the pool based on the results of the assessment.
•
Commercial accruing loans deemed to be a modified loan to a borrower experiencing financial difficulty with total exposure of $500 thousand (excluding those portions of the debt that are government guaranteed or are secured by Trustmark deposits or marketable securities) or more. If the loan is believed to not share similar risk characteristics with the rest of the loan pool, the loan will be individually assessed. Otherwise, the loan will be left within the pool and monitored on an ongoing basis.

Each loan officer assesses the appropriateness of the internal risk rating assigned to their credits on an ongoing basis. Trustmark’s Asset Review area conducts independent credit quality reviews of the majority of Trustmark’s commercial loan portfolio both on the underlying credit quality of each individual loan class as well as the adherence to Trustmark’s loan policy and the loan administration process.

In addition to the ongoing internal risk rate monitoring described above, Trustmark’s Credit Quality Review Committee meets monthly and performs a review of all loans of $100 thousand or more that are either delinquent 30 days or more or on nonaccrual. This review includes recommendations regarding risk ratings, accrual status, charge-offs and appropriate servicing officer as well as evaluation of problem credits for determination of modified status. Quarterly, the Credit Quality Review Committee reviews and modifies continuous action plans for all credits risk rated seven or worse for relationships of $250 thousand or more.

 

In addition, periodic reviews of significant development, construction, multi-family, nonowner-occupied and other commercial credits are performed. These reviews assess each particular project with respect to location, project valuations, progress of completion, leasing status, current financial information, rents, operating expenses, cash flow, adherence to budget and projections and other information that is pertinent to the particular type of credit as applicable. Summary results are reviewed by Senior and Regional Credit Officers in addition to the Chief Credit and Operations Officer with a determination made as to the appropriateness of existing risk ratings and accrual status.

Consumer Credits

The Retail Credit Review Committee, Management Credit Policy Committee and the Enterprise Risk Committee review the volume and percentage of consumer loan delinquencies and losses to monitor the overall quality of the consumer portfolio.

Trustmark monitors the levels and severity of past due consumer LHFI on a daily basis through its collection activities. A detailed assessment of consumer LHFI delinquencies is performed monthly at both a product and market level.

21

 

The tables below present the amortized cost basis of loans by credit quality indicator, class of loans and year of origination, renewal or major modification based on analyses performed at September 30, 2026 and December 31, 2025 ($ in thousands):

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

 

 

2026

 

 

2025

 

 

2024

 

 

2023

 

 

2022

 

 

Prior

 

 

Revolving Loans

 

 

Total

 

As of September 30, 2026

 

Commercial LHFI

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development
   and other land:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass - RR 1 through RR 6

 

$

299,974

 

 

$

133,235

 

 

$

13,959

 

 

$

11,971

 

 

$

10,992

 

 

$

2,712

 

 

$

48,409

 

 

$

521,252

 

Special Mention - RR 7

 

 

5,898

 

 

 

3,935

 

 

 

382

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

10,215

 

Substandard - RR 8

 

 

388

 

 

 

3,416

 

 

 

—

 

 

 

—

 

 

 

197

 

 

 

—

 

 

 

—

 

 

 

4,001

 

Doubtful - RR 9

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

306,260

 

 

 

140,586

 

 

 

14,341

 

 

 

11,971

 

 

 

11,189

 

 

 

2,712

 

 

 

48,409

 

 

 

535,468

 

Current period gross
   charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other secured by 1-4 family
   residential properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass - RR 1 through RR 6

 

$

32,552

 

 

$

37,037

 

 

$

18,664

 

 

$

14,054

 

 

$

13,755

 

 

$

9,109

 

 

$

9,451

 

 

$

134,622

 

Special Mention - RR 7

 

 

—

 

 

 

—

 

 

 

89

 

 

 

179

 

 

 

208

 

 

 

246

 

 

 

1

 

 

 

723

 

Substandard - RR 8

 

 

10

 

 

 

427

 

 

 

—

 

 

 

105

 

 

 

1,169

 

 

 

506

 

 

 

—

 

 

 

2,217

 

Doubtful - RR 9

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

32,562

 

 

 

37,464

 

 

 

18,753

 

 

 

14,338

 

 

 

15,132

 

 

 

9,861

 

 

 

9,452

 

 

 

137,562

 

Current period gross
   charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured by nonfarm,
   nonresidential properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass - RR 1 through RR 6

 

$

532,196

 

 

$

757,613

 

 

$

354,959

 

 

$

244,918

 

 

$

469,071

 

 

$

538,081

 

 

$

170,617

 

 

$

3,067,455

 

Special Mention - RR 7

 

 

13,517

 

 

 

—

 

 

 

3,860

 

 

 

21

 

 

 

611

 

 

 

10

 

 

 

—

 

 

 

18,019

 

Substandard - RR 8

 

 

13,528

 

 

 

17,705

 

 

 

1,426

 

 

 

7,768

 

 

 

18,179

 

 

 

48,169

 

 

 

—

 

 

 

106,775

 

Doubtful - RR 9

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

559,241

 

 

 

775,318

 

 

 

360,245

 

 

 

252,707

 

 

 

487,861

 

 

 

586,260

 

 

 

170,617

 

 

 

3,192,249

 

Current period gross
   charge-offs

 

 

—

 

 

 

—

 

 

 

(98

)

 

 

—

 

 

 

—

 

 

 

(52

)

 

 

—

 

 

 

(150

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other real estate secured:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass - RR 1 through RR 6

 

$

230,003

 

 

$

202,661

 

 

$

384,467

 

 

$

479,000

 

 

$

382,937

 

 

$

136,129

 

 

$

9,417

 

 

$

1,824,614

 

Special Mention - RR 7

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

64,754

 

 

 

—

 

 

 

—

 

 

 

64,754

 

Substandard - RR 8

 

 

58

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

44,577

 

 

 

194

 

 

 

350

 

 

 

45,179

 

Doubtful - RR 9

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

230,061

 

 

 

202,661

 

 

 

384,467

 

 

 

479,000

 

 

 

492,268

 

 

 

136,323

 

 

 

9,767

 

 

 

1,934,547

 

Current period gross
   charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

22

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

 

 

2026

 

 

2025

 

 

2024

 

 

2023

 

 

2022

 

 

Prior

 

 

Revolving Loans

 

 

Total

 

As of September 30, 2026

 

Commercial LHFI

 

Other loans secured by real
   estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other construction:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass - RR 1 through RR 6

 

$

96,494

 

 

$

326,562

 

 

$

191,418

 

 

$

31,549

 

 

$

—

 

 

$

—

 

 

$

32,202

 

 

$

678,225

 

Special Mention - RR 7

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard - RR 8

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Doubtful - RR 9

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

96,494

 

 

 

326,562

 

 

 

191,418

 

 

 

31,549

 

 

 

—

 

 

 

—

 

 

 

32,202

 

 

 

678,225

 

Current period gross
   charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial
   loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass - RR 1 through RR 6

 

$

491,825

 

 

$

657,862

 

 

$

208,327

 

 

$

109,997

 

 

$

50,652

 

 

$

31,025

 

 

$

589,262

 

 

$

2,138,950

 

Special Mention - RR 7

 

 

8

 

 

 

167

 

 

 

12,698

 

 

 

2,845

 

 

 

224

 

 

 

4

 

 

 

1,799

 

 

 

17,745

 

Substandard - RR 8

 

 

9,607

 

 

 

13,666

 

 

 

854

 

 

 

18,206

 

 

 

1,111

 

 

 

384

 

 

 

12,235

 

 

 

56,063

 

Doubtful - RR 9

 

 

—

 

 

 

54

 

 

 

27

 

 

 

7

 

 

 

1

 

 

 

—

 

 

 

22

 

 

 

111

 

Total

 

 

501,440

 

 

 

671,749

 

 

 

221,906

 

 

 

131,055

 

 

 

51,988

 

 

 

31,413

 

 

 

603,318

 

 

 

2,212,869

 

Current period gross
   charge-offs

 

 

—

 

 

 

(234

)

 

 

(472

)

 

 

(123

)

 

 

(257

)

 

 

(212

)

 

 

(815

)

 

 

(2,113

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and other political
   subdivision loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass - RR 1 through RR 6

 

$

164,452

 

 

$

198,028

 

 

$

97,421

 

 

$

57,126

 

 

$

153,790

 

 

$

314,925

 

 

$

18,148

 

 

$

1,003,890

 

Special Mention - RR 7

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard - RR 8

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Doubtful - RR 9

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

164,452

 

 

 

198,028

 

 

 

97,421

 

 

 

57,126

 

 

 

153,790

 

 

 

314,925

 

 

 

18,148

 

 

 

1,003,890

 

Current period gross
   charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other commercial loans and
   leases:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass - RR 1 through RR 6

 

$

222,991

 

 

$

246,626

 

 

$

99,172

 

 

$

82,288

 

 

$

2,752

 

 

$

48,340

 

 

$

228,079

 

 

$

930,248

 

Special Mention - RR 7

 

 

—

 

 

 

6,142

 

 

 

5,290

 

 

 

—

 

 

 

11

 

 

 

—

 

 

 

—

 

 

 

11,443

 

Substandard - RR 8

 

 

137

 

 

 

4

 

 

 

—

 

 

 

796

 

 

 

1

 

 

 

—

 

 

 

169

 

 

 

1,107

 

Doubtful - RR 9

 

 

—

 

 

 

—

 

 

 

2

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2

 

Total

 

 

223,128

 

 

 

252,772

 

 

 

104,464

 

 

 

83,084

 

 

 

2,764

 

 

 

48,340

 

 

 

228,248

 

 

 

942,800

 

Current period gross
   charge-offs

 

 

—

 

 

 

—

 

 

 

(15

)

 

 

(181

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(196

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total commercial LHFI

 

$

2,113,638

 

 

$

2,605,140

 

 

$

1,393,015

 

 

$

1,060,830

 

 

$

1,214,992

 

 

$

1,129,834

 

 

$

1,120,161

 

 

$

10,637,610

 

Total commercial LHFI
   gross charge-offs

 

$

—

 

 

$

(234

)

 

$

(585

)

 

$

(304

)

 

$

(257

)

 

$

(264

)

 

$

(815

)

 

$

(2,459

)

 

23

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

 

 

2026

 

 

2025

 

 

2024

 

 

2023

 

 

2022

 

 

Prior

 

 

Revolving Loans

 

 

Total

 

As of September 30, 2026

 

Consumer LHFI

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development
   and other land:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

20,466

 

 

$

27,005

 

 

$

7,778

 

 

$

3,371

 

 

$

1,731

 

 

$

1,745

 

 

$

—

 

 

$

62,096

 

Past due 30-89 days

 

 

—

 

 

 

—

 

 

 

—

 

 

 

145

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

145

 

Past due 90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonaccrual

 

 

—

 

 

 

—

 

 

 

4

 

 

 

46

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

50

 

Total

 

 

20,466

 

 

 

27,005

 

 

 

7,782

 

 

 

3,562

 

 

 

1,731

 

 

 

1,745

 

 

 

—

 

 

 

62,291

 

Current period gross
   charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other secured by 1-4 family
   residential properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

15,893

 

 

$

11,262

 

 

$

12,714

 

 

$

11,859

 

 

$

4,521

 

 

$

11,978

 

 

$

507,372

 

 

$

575,599

 

Past due 30-89 days

 

 

62

 

 

 

120

 

 

 

54

 

 

 

33

 

 

 

14

 

 

 

639

 

 

 

5,158

 

 

 

6,080

 

Past due 90 days or more

 

 

190

 

 

 

494

 

 

 

—

 

 

 

36

 

 

 

—

 

 

 

—

 

 

 

255

 

 

 

975

 

Nonaccrual

 

 

168

 

 

 

10

 

 

 

156

 

 

 

688

 

 

 

33

 

 

 

658

 

 

 

7,091

 

 

 

8,804

 

Total

 

 

16,313

 

 

 

11,886

 

 

 

12,924

 

 

 

12,616

 

 

 

4,568

 

 

 

13,275

 

 

 

519,876

 

 

 

591,458

 

Current period gross
   charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(7

)

 

 

(64

)

 

 

(1,079

)

 

 

(1,150

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other real estate secured:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

65

 

 

$

437

 

 

$

131

 

 

$

—

 

 

$

—

 

 

$

28

 

 

$

—

 

 

$

661

 

Past due 30-89 days

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Past due 90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonaccrual

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

65

 

 

 

437

 

 

 

131

 

 

 

—

 

 

 

—

 

 

 

28

 

 

 

—

 

 

 

661

 

Current period gross
   charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other loans secured by real
   estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured by 1-4 family
   residential properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

339,876

 

 

$

306,667

 

 

$

198,775

 

 

$

171,204

 

 

$

651,237

 

 

$

708,255

 

 

$

—

 

 

$

2,376,014

 

Past due 30-89 days

 

 

309

 

 

 

—

 

 

 

88

 

 

 

3,120

 

 

 

9,811

 

 

 

4,543

 

 

 

—

 

 

 

17,871

 

Past due 90 days or more

 

 

—

 

 

 

—

 

 

 

191

 

 

 

502

 

 

 

1,256

 

 

 

762

 

 

 

—

 

 

 

2,711

 

Nonaccrual

 

 

—

 

 

 

246

 

 

 

117

 

 

 

3,122

 

 

 

5,288

 

 

 

4,247

 

 

 

—

 

 

 

13,020

 

Total

 

 

340,185

 

 

 

306,913

 

 

 

199,171

 

 

 

177,948

 

 

 

667,592

 

 

 

717,807

 

 

 

—

 

 

 

2,409,616

 

Current period gross
   charge-offs

 

 

(18

)

 

 

(278

)

 

 

(39

)

 

 

(1,453

)

 

 

(3,309

)

 

 

(1,737

)

 

 

—

 

 

 

(6,834

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

49,448

 

 

$

24,868

 

 

$

18,818

 

 

$

3,943

 

 

$

5,993

 

 

$

4,687

 

 

$

57,427

 

 

$

165,184

 

Past due 30-89 days

 

 

509

 

 

 

243

 

 

 

96

 

 

 

19

 

 

 

—

 

 

 

—

 

 

 

795

 

 

 

1,662

 

Past due 90 days or more

 

 

30

 

 

 

58

 

 

 

10

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

338

 

 

 

436

 

Nonaccrual

 

 

18

 

 

 

53

 

 

 

51

 

 

 

99

 

 

 

10

 

 

 

12

 

 

 

10

 

 

 

253

 

Total

 

 

50,005

 

 

 

25,222

 

 

 

18,975

 

 

 

4,061

 

 

 

6,003

 

 

 

4,699

 

 

 

58,570

 

 

 

167,535

 

Current period gross
   charge-offs

 

 

(4,010

)

 

 

(444

)

 

 

(267

)

 

 

(63

)

 

 

(8

)

 

 

(1

)

 

 

(1,613

)

 

 

(6,406

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total consumer LHFI

 

$

427,034

 

 

$

371,463

 

 

$

238,983

 

 

$

198,187

 

 

$

679,894

 

 

$

737,554

 

 

$

578,446

 

 

$

3,231,561

 

Total consumer LHFI
   gross charge-offs

 

$

(4,028

)

 

$

(722

)

 

$

(306

)

 

$

(1,516

)

 

$

(3,324

)

 

$

(1,802

)

 

$

(2,692

)

 

$

(14,390

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total LHFI

 

$

2,540,672

 

 

$

2,976,603

 

 

$

1,631,998

 

 

$

1,259,017

 

 

$

1,894,886

 

 

$

1,867,388

 

 

$

1,698,607

 

 

$

13,869,171

 

Total current period
   gross charge-offs

 

$

(4,028

)

 

$

(956

)

 

$

(891

)

 

$

(1,820

)

 

$

(3,581

)

 

$

(2,066

)

 

$

(3,507

)

 

$

(16,849

)

 

24

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

 

 

2025

 

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

Prior

 

 

Revolving Loans

 

 

Total

 

As of December 31, 2025

 

Commercial LHFI

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development
   and other land:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass - RR 1 through RR 6

 

$

326,423

 

 

$

70,948

 

 

$

16,432

 

 

$

17,197

 

 

$

7,610

 

 

$

1,664

 

 

$

47,981

 

 

$

488,255

 

Special Mention - RR 7

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard - RR 8

 

 

3,308

 

 

 

1,409

 

 

 

—

 

 

 

602

 

 

 

85

 

 

 

—

 

 

 

—

 

 

 

5,404

 

Doubtful - RR 9

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

329,731

 

 

 

72,357

 

 

 

16,432

 

 

 

17,799

 

 

 

7,695

 

 

 

1,664

 

 

 

47,981

 

 

 

493,659

 

Current period gross
   charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other secured by 1-4 family
   residential properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass - RR 1 through RR 6

 

$

42,929

 

 

$

22,620

 

 

$

18,353

 

 

$

18,748

 

 

$

19,248

 

 

$

3,294

 

 

$

7,497

 

 

$

132,689

 

Special Mention - RR 7

 

 

—

 

 

 

25

 

 

 

—

 

 

 

349

 

 

 

85

 

 

 

—

 

 

 

—

 

 

 

459

 

Substandard - RR 8

 

 

299

 

 

 

272

 

 

 

319

 

 

 

747

 

 

 

546

 

 

 

296

 

 

 

16

 

 

 

2,495

 

Doubtful - RR 9

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

43,228

 

 

 

22,917

 

 

 

18,672

 

 

 

19,844

 

 

 

19,879

 

 

 

3,590

 

 

 

7,513

 

 

 

135,643

 

Current period gross
   charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(3

)

 

 

(122

)

 

 

—

 

 

 

—

 

 

 

(125

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured by nonfarm,
   nonresidential properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass - RR 1 through RR 6

 

$

817,790

 

 

$

434,506

 

 

$

348,386

 

 

$

614,738

 

 

$

334,813

 

 

$

427,591

 

 

$

145,497

 

 

$

3,123,321

 

Special Mention - RR 7

 

 

—

 

 

 

1,298

 

 

 

23,975

 

 

 

284

 

 

 

—

 

 

 

1,124

 

 

 

—

 

 

 

26,681

 

Substandard - RR 8

 

 

38,224

 

 

 

9,304

 

 

 

2,537

 

 

 

39,015

 

 

 

29,540

 

 

 

33,821

 

 

 

1,979

 

 

 

154,420

 

Doubtful - RR 9

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1

 

 

 

—

 

 

 

1

 

Total

 

 

856,014

 

 

 

445,108

 

 

 

374,898

 

 

 

654,037

 

 

 

364,353

 

 

 

462,537

 

 

 

147,476

 

 

 

3,304,423

 

Current period gross
   charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2,026

)

 

 

—

 

 

 

(2,026

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other real estate secured:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass - RR 1 through RR 6

 

$

290,854

 

 

$

139,454

 

 

$

613,122

 

 

$

678,691

 

 

$

115,394

 

 

$

80,235

 

 

$

61,191

 

 

$

1,978,941

 

Special Mention - RR 7

 

 

—

 

 

 

—

 

 

 

—

 

 

 

25,376

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

25,376

 

Substandard - RR 8

 

 

—

 

 

 

—

 

 

 

22,392

 

 

 

69,577

 

 

 

332

 

 

 

26,843

 

 

 

163

 

 

 

119,307

 

Doubtful - RR 9

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

290,854

 

 

 

139,454

 

 

 

635,514

 

 

 

773,644

 

 

 

115,726

 

 

 

107,078

 

 

 

61,354

 

 

 

2,123,624

 

Current period gross
   charge-offs

 

 

—

 

 

 

(4

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(4

)

 

25

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

 

 

2025

 

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

Prior

 

 

Revolving Loans

 

 

Total

 

As of December 31, 2025

 

Commercial LHFI

 

Other loans secured by real
   estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other construction:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass - RR 1 through RR 6

 

$

122,237

 

 

$

275,146

 

 

$

173,752

 

 

$

23,284

 

 

$

—

 

 

$

—

 

 

$

819

 

 

$

595,238

 

Special Mention - RR 7

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard - RR 8

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Doubtful - RR 9

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

122,237

 

 

 

275,146

 

 

 

173,752

 

 

 

23,284

 

 

 

—

 

 

 

—

 

 

 

819

 

 

 

595,238

 

Current period gross
   charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial
   loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass - RR 1 through RR 6

 

$

803,487

 

 

$

303,777

 

 

$

172,506

 

 

$

88,388

 

 

$

39,304

 

 

$

20,251

 

 

$

523,797

 

 

$

1,951,510

 

Special Mention - RR 7

 

 

4,522

 

 

 

602

 

 

 

14,230

 

 

 

119

 

 

 

49

 

 

 

77

 

 

 

15,816

 

 

 

35,415

 

Substandard - RR 8

 

 

2,059

 

 

 

377

 

 

 

470

 

 

 

3,245

 

 

 

683

 

 

 

434

 

 

 

5,173

 

 

 

12,441

 

Doubtful - RR 9

 

 

7

 

 

 

42

 

 

 

16

 

 

 

6

 

 

 

—

 

 

 

1

 

 

 

26

 

 

 

98

 

Total

 

 

810,075

 

 

 

304,798

 

 

 

187,222

 

 

 

91,758

 

 

 

40,036

 

 

 

20,763

 

 

 

544,812

 

 

 

1,999,464

 

Current period gross
   charge-offs

 

 

—

 

 

 

(708

)

 

 

(982

)

 

 

(4,016

)

 

 

(432

)

 

 

(6,389

)

 

 

(486

)

 

 

(13,013

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and other political
   subdivision loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass - RR 1 through RR 6

 

$

300,564

 

 

$

109,516

 

 

$

64,228

 

 

$

180,530

 

 

$

97,517

 

 

$

286,979

 

 

$

22,250

 

 

$

1,061,584

 

Special Mention - RR 7

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Substandard - RR 8

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Doubtful - RR 9

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

300,564

 

 

 

109,516

 

 

 

64,228

 

 

 

180,530

 

 

 

97,517

 

 

 

286,979

 

 

 

22,250

 

 

 

1,061,584

 

Current period gross
   charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other commercial loans and
   leases:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass - RR 1 through RR 6

 

$

311,342

 

 

$

125,090

 

 

$

113,861

 

 

$

4,356

 

 

$

4,352

 

 

$

55,946

 

 

$

198,576

 

 

$

813,523

 

Special Mention - RR 7

 

 

—

 

 

 

414

 

 

 

362

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

776

 

Substandard - RR 8

 

 

14

 

 

 

1,725

 

 

 

1,917

 

 

 

369

 

 

 

462

 

 

 

29

 

 

 

1,038

 

 

 

5,554

 

Doubtful - RR 9

 

 

—

 

 

 

3

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3

 

Total

 

 

311,356

 

 

 

127,232

 

 

 

116,140

 

 

 

4,725

 

 

 

4,814

 

 

 

55,975

 

 

 

199,614

 

 

 

819,856

 

Current period gross
   charge-offs

 

 

—

 

 

 

(54

)

 

 

—

 

 

 

(116

)

 

 

—

 

 

 

(50

)

 

 

—

 

 

 

(220

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total commercial LHFI

 

$

3,064,059

 

 

$

1,496,528

 

 

$

1,586,858

 

 

$

1,765,621

 

 

$

650,020

 

 

$

938,586

 

 

$

1,031,819

 

 

$

10,533,491

 

Total commercial LHFI
   gross charge-offs

 

$

—

 

 

$

(766

)

 

$

(982

)

 

$

(4,135

)

 

$

(554

)

 

$

(8,465

)

 

$

(486

)

 

$

(15,388

)

 

26

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

 

 

2025

 

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

Prior

 

 

Revolving Loans

 

 

Total

 

As of December 31, 2025

 

Consumer LHFI

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development
   and other land:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

30,069

 

 

$

9,491

 

 

$

10,191

 

 

$

2,500

 

 

$

1,198

 

 

$

1,638

 

 

$

—

 

 

$

55,087

 

Past due 30-89 days

 

 

—

 

 

 

222

 

 

 

321

 

 

 

—

 

 

 

—

 

 

 

1

 

 

 

—

 

 

 

544

 

Past due 90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonaccrual

 

 

—

 

 

 

—

 

 

 

9

 

 

 

—

 

 

 

54

 

 

 

—

 

 

 

—

 

 

 

63

 

Total

 

 

30,069

 

 

 

9,713

 

 

 

10,521

 

 

 

2,500

 

 

 

1,252

 

 

 

1,639

 

 

 

—

 

 

 

55,694

 

Current period gross
   charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other secured by 1-4 family
   residential properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

22,785

 

 

$

18,105

 

 

$

13,944

 

 

$

5,352

 

 

$

4,352

 

 

$

8,656

 

 

$

481,812

 

 

$

555,006

 

Past due 30-89 days

 

 

321

 

 

 

189

 

 

 

643

 

 

 

36

 

 

 

1

 

 

 

509

 

 

 

3,632

 

 

 

5,331

 

Past due 90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2

 

 

 

—

 

 

 

518

 

 

 

520

 

Nonaccrual

 

 

26

 

 

 

39

 

 

 

124

 

 

 

49

 

 

 

145

 

 

 

192

 

 

 

7,439

 

 

 

8,014

 

Total

 

 

23,132

 

 

 

18,333

 

 

 

14,711

 

 

 

5,437

 

 

 

4,500

 

 

 

9,357

 

 

 

493,401

 

 

 

568,871

 

Current period gross
   charge-offs

 

 

—

 

 

 

(10

)

 

 

—

 

 

 

(56

)

 

 

—

 

 

 

(31

)

 

 

(714

)

 

 

(811

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured by nonfarm,
   nonresidential properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

100

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

100

 

Past due 30-89 days

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Past due 90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonaccrual

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

100

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

100

 

Current period gross
   charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other real estate secured:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

466

 

 

$

141

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

41

 

 

$

—

 

 

$

648

 

Past due 30-89 days

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Past due 90 days or more

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Nonaccrual

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

466

 

 

 

141

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

41

 

 

 

—

 

 

 

648

 

Current period gross
   charge-offs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

27

 

 

 

Term Loans by Origination Year

 

 

 

 

 

 

 

 

 

2025

 

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

Prior

 

 

Revolving Loans

 

 

Total

 

As of December 31, 2025

 

Consumer LHFI

 

Other loans secured by real
   estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured by 1-4 family
   residential properties:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

325,999

 

 

$

227,009

 

 

$

193,722

 

 

$

712,091

 

 

$

408,534

 

 

$

395,901

 

 

$

—

 

 

$

2,263,256

 

Past due 30-89 days

 

 

—

 

 

 

167

 

 

 

3,670

 

 

 

9,108

 

 

 

4,949

 

 

 

3,100

 

 

 

—

 

 

 

20,994

 

Past due 90 days or more

 

 

—

 

 

 

—

 

 

 

866

 

 

 

1,598

 

 

 

134

 

 

 

534

 

 

 

—

 

 

 

3,132

 

Nonaccrual

 

 

505

 

 

 

901

 

 

 

13,238

 

 

 

31,622

 

 

 

10,713

 

 

 

7,314

 

 

 

—

 

 

 

64,293

 

Total

 

 

326,504

 

 

 

228,077

 

 

 

211,496

 

 

 

754,419

 

 

 

424,330

 

 

 

406,849

 

 

 

—

 

 

 

2,351,675

 

Current period gross
   charge-offs

 

 

—

 

 

 

—

 

 

 

(619

)

 

 

(1,276

)

 

 

(142

)

 

 

(74

)

 

 

—

 

 

 

(2,111

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

$

54,959

 

 

$

27,573

 

 

$

7,898

 

 

$

7,587

 

 

$

6,892

 

 

$

239

 

 

$

55,321

 

 

$

160,469

 

Past due 30-89 days

 

 

597

 

 

 

228

 

 

 

143

 

 

 

31

 

 

 

13

 

 

 

—

 

 

 

1,440

 

 

 

2,452

 

Past due 90 days or more

 

 

28

 

 

 

32

 

 

 

17

 

 

 

1

 

 

 

—

 

 

 

—

 

 

 

370

 

 

 

448

 

Nonaccrual

 

 

117

 

 

 

43

 

 

 

155

 

 

 

36

 

 

 

23

 

 

 

2

 

 

 

9

 

 

 

385

 

Total

 

 

55,701

 

 

 

27,876

 

 

 

8,213

 

 

 

7,655

 

 

 

6,928

 

 

 

241

 

 

 

57,140

 

 

 

163,754

 

Current period gross
   charge-offs

 

 

(4,847

)

 

 

(494

)

 

 

(474

)

 

 

(114

)

 

 

(24

)

 

 

(26

)

 

 

(2,459

)

 

 

(8,438

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total consumer LHFI

 

$

435,972

 

 

$

284,140

 

 

$

244,941

 

 

$

770,011

 

 

$

437,010

 

 

$

418,127

 

 

$

550,541

 

 

$

3,140,742

 

Total consumer LHFI
   gross charge-offs

 

$

(4,847

)

 

$

(504

)

 

$

(1,093

)

 

$

(1,446

)

 

$

(166

)

 

$

(131

)

 

$

(3,173

)

 

$

(11,360

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total LHFI

 

$

3,500,031

 

 

$

1,780,668

 

 

$

1,831,799

 

 

$

2,535,632

 

 

$

1,087,030

 

 

$

1,356,713

 

 

$

1,582,360

 

 

$

13,674,233

 

Total current period
   gross charge-offs

 

$

(4,847

)

 

$

(1,270

)

 

$

(2,075

)

 

$

(5,581

)

 

$

(720

)

 

$

(8,596

)

 

$

(3,659

)

 

$

(26,748

)

Past Due LHFS

LHFS past due 90 days or more totaled $103.9 million and $98.9 million at September 30, 2026 and December 31, 2025, respectively. LHFS past due 90 days or more are serviced loans eligible for repurchase, which are fully guaranteed by the Government National Mortgage Association (GNMA). GNMA optional repurchase programs allow financial institutions to buy back individual delinquent mortgage loans that meet certain criteria from the securitized loan pool for which the institution provides servicing. At the servicer’s option and without GNMA’s prior authorization, the servicer may repurchase such a delinquent loan for an amount equal to 100% of the remaining principal balance of the loan. This buy-back option is considered a conditional option until the delinquency criteria are met, at which time the option becomes unconditional. When Trustmark is deemed to have regained effective control over these loans under the unconditional buy-back option, the loans can no longer be reported as sold and must be brought back onto the balance sheet as loans held for sale, regardless of whether Trustmark intends to exercise the buy-back option. These loans are reported as held for sale with the offsetting liability being reported as short-term borrowings.

Trustmark did not exercise its buy-back option on any delinquent loans serviced for GNMA during the first nine months of 2026 or 2025.

ACL on LHFI

Trustmark’s ACL methodology for LHFI is based upon guidance within the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Subtopic 326-20, “Financial Instruments-Credit Losses-Measured at Amortized Cost,” as well as applicable regulatory guidance. The ACL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Credit quality within the LHFI portfolio is continuously monitored by Management and is reflected within the ACL for LHFI. The ACL is an estimate of expected losses inherent within Trustmark’s existing LHFI portfolio. The ACL for LHFI is adjusted through the PCL, LHFI and reduced by the charge off of loan amounts, net of recoveries.

The methodology for estimating the amount of expected credit losses reported in the ACL has two basic components: a collective, or pooled, component for estimated expected credit losses for pools of loans that share similar risk characteristics, and an asset-specific component involving individual loans that do not share risk characteristics with other loans and the measurement of expected credit

28

 

losses for such individual loans. In estimating the ACL for the collective component, loans are segregated into loan pools based on loan product types and similar risk characteristics.

The loans secured by real estate and other loans secured by real estate portfolio segments include loans for both commercial and residential properties. The underwriting process for these loans includes analysis of the financial position and strength of both the borrower and guarantor, experience with similar projects in the past, market demand and prospects for successful completion of the proposed project within the established budget and schedule, values of underlying collateral, availability of permanent financing, maximum loan-to-value ratios, minimum equity requirements, acceptable amortization periods and minimum debt service coverage requirements, based on property type. The borrower’s financial strength and capacity to repay their obligations remain the primary focus of underwriting. Financial strength is evaluated based upon analytical tools that consider historical and projected cash flows and performance in addition to analysis of the proposed project for income-producing properties. Additional support offered by guarantors is also considered. Ultimate repayment of these loans is sensitive to interest rate changes, general economic conditions, liquidity and availability of long-term financing.

 

The commercial and industrial loans portfolio segment includes loans made to many types of businesses for various purposes, such as short-term working capital loans that are usually secured by accounts receivable and inventory and term financing for equipment and fixed asset purchases that are secured by those assets. Trustmark’s credit underwriting process for commercial and industrial loans includes analysis of historical and projected cash flows and performance, evaluation of financial strength of both borrowers and guarantors as reflected in current and detailed financial information and evaluation of underlying collateral to support the credit.

 

The consumer loans portfolio segment is comprised of loans that are centrally underwritten based on the borrower's credit bureau score as well as an evaluation of the borrower’s repayment capacity, credit, and collateral. Property appraisals are obtained to assist in evaluating collateral. Loan-to-value and debt-to-income ratios, loan amount, and lien position are also considered in assessing whether to originate a loan. These borrowers are particularly susceptible to downturns in economic trends such as conditions that negatively affect housing prices and demand and levels of unemployment.

 

The state and other political subdivision loans and the other commercial loans and leases portfolio segments primarily consist of loans to non-depository financial institutions, such as mortgage companies, finance companies and other financial intermediaries, loans to state and political subdivisions, and loans to non-profit and charitable organizations. These loans are underwritten based on the specific nature or purpose of the loan and underlying collateral with special consideration given to the specific source of repayment for the loan. The lease segment primarily consists of commercial equipment finance leases. Trustmark’s credit underwriting process for equipment finance leases includes analysis of historical and projected cash flows and performance, evaluation of financial strength of both lessees and guarantors as reflected in current and detailed financial information and evaluation of underlying collateral to support the credit.

During the first quarter of 2026, as part of Trustmark's ongoing model monitoring procedures, the annual loss driver analysis was performed. The analysis resulted in changes in the loss drivers for eight discounted cash-flow models and two WARM models. These changes were a result of incorporating data through 2025 coupled with updating the peer group as a result of acquisitions that occurred during 2025. Collectively, these changes enhanced the statistical relationship between the selected loss drivers and historical loss experience, resulting in improved model alignment with observed credit performance. All models were validated by a third party before implementation.

During the first quarter of 2025, as part of Trustmark's ongoing model monitoring procedures, the annual loss driver analysis was performed. The analysis resulted in changes in the loss drivers for four discounted cash-flow models. These changes were a result of incorporating data through 2024 which led to more intuitive loss drivers. All models were validated by a third party before implementation.

29

 

The following table provides a description of each of Trustmark’s portfolio segments, loan classes, loan pools and the ACL methodology and loss drivers at September 30, 2026 and December 31, 2025:

 

Portfolio Segment

 

Loan Class

 

Loan Pool

 

Methodology

 

Loss Drivers

Loans secured by real estate

 

Construction, land
   development and other land

 

1-4 family residential
   construction

 

DCF

 

BBB 7-10 US CBI, National HPI (1)

 

 

 

 

Lots and development

 

DCF

 

National HPI, Southern Unemployment (1)

 

 

 

 

Unimproved land

 

DCF

 

National HPI, Southern Unemployment (1)

 

 

 

 

All other consumer

 

DCF

 

BBB 7-10 US CBI (2), Southern Unemployment (1)

 

 

Other secured by 1-4
   family residential properties

 

Consumer 1-4 family - 1st liens

 

DCF

 

National HPI, Southern Unemployment

 

 

 

 

All other consumer

 

DCF

 

BBB 7-10 US CBI (2), Southern Unemployment (1)

 

 

 

 

Nonresidential owner-occupied

 

DCF

 

Southern Unemployment, BBB 7-10 US CBI (4)

 

 

Secured by nonfarm,
   nonresidential properties

 

Nonowner-occupied -
   hotel/motel

 

DCF

 

BBB 7-10 US CBI (4), National Unemployment (5)

 

 

 

 

Nonowner-occupied - office

 

DCF

 

BBB 7-10 US CBI (4), National Unemployment (5)

 

 

 

 

Nonowner-occupied- Retail

 

DCF

 

BBB 7-10 US CBI (4), National Unemployment (5)

 

 

 

 

Nonowner-occupied - senior
   living/nursing homes

 

DCF

 

BBB 7-10 US CBI (4), National Unemployment (5)

 

 

 

 

Nonowner-occupied -
   all other

 

DCF

 

BBB 7-10 US CBI (4), National Unemployment (5)

 

 

 

 

Nonresidential owner-occupied

 

DCF

 

BBB 7-10 US CBI (4), Southern Unemployment

 

 

Other real estate secured

 

Nonresidential nonowner
   -occupied - apartments

 

DCF

 

BBB 7-10 US CBI (4), National Unemployment (5)

 

 

 

 

Nonresidential owner-occupied

 

DCF

 

BBB 7-10 US CBI (4), Southern Unemployment

 

 

 

 

Nonowner-occupied -
   all other

 

DCF

 

BBB 7-10 US CBI (4), National Unemployment (5)

Other loans secured by
   real estate

 

Other construction

 

Other construction

 

DCF

 

National Unemployment, BBB 7-10 US CBI, (4)

 

 

Secured by 1-4 family
   residential properties

 

Trustmark mortgage

 

WARM

 

Southern Unemployment, National HPI (5)

Commercial and
   industrial loans

 

Commercial and
   industrial loans

 

Commercial and industrial -
   non-working capital

 

DCF

 

Trustmark historical data

 

 

 

 

Commercial and industrial -
   working capital

 

DCF

 

Trustmark historical data

 

 

 

 

Equipment finance loans

 

WARM

 

Southern Unemployment, BBB 7-10 US CBI (3)

 

 

 

 

Credit cards

 

WARM

 

Trustmark call report data

Consumer loans

 

Consumer loans

 

Credit cards

 

WARM

 

Trustmark call report data

 

 

 

 

Overdrafts

 

Loss Rate

 

Trustmark historical data

 

 

 

 

All other consumer

 

DCF

 

BBB 7-10 US CBI (2), Southern Unemployment (1)

State and other political
   subdivision loans

 

State and other political
   subdivision loans

 

Obligations of state and
   political subdivisions

 

DCF

 

Moody's Bond Default Study

Other commercial loans and leases

 

Other commercial loans and leases

 

Other loans

 

DCF

 

BBB 7-10 US CBI, Southern Unemployment

 

 

 

 

Commercial and industrial -
   non-working capital

 

DCF

 

Trustmark historical data

 

 

 

 

Commercial and industrial -
   working capital

 

DCF

 

Trustmark historical data

 

 

 

 

Equipment finance leases

 

WARM

 

Southern Unemployment, BBB 7-10 US CBI (3)

 

(1) Loss driver was National Unemployment at December 31, 2025.

(2) Loss driver was National HPI at December 31, 2025.

(3) Loss driver was National GDP at December 31, 2025.

(4) Loss driver was National CRE Price Index at December 31, 2025.

(5) Loss driver was Southern Unemployment at December 31, 2025.

30

 

In general, Trustmark utilizes a DCF method to estimate the quantitative portion of the ACL for loan pools. The DCF model consists of two key components, a loss driver analysis (LDA) and a cash flow analysis. For loan pools utilizing the DCF methodology, multiple assumptions are in place, depending on the loan pool. A reasonable and supportable forecast is utilized for each loan pool by developing a LDA for each loan class. The LDA uses charge off data from Federal Financial Institutions Examination Council (FFIEC) reports to construct a periodic default rate (PDR). The PDR is decomposed into a PD. Regressions are run using the data for various macroeconomic variables in order to determine which ones correlate to Trustmark’s losses. These variables are then incorporated into the application to calculate a quarterly PD using a third-party baseline forecast. In addition to the PD, a LGD is derived using a method referred to as Frye-Jacobs. The Frye-Jacobs method is a mathematical formula that traces the relationship between LGD and PD over time and projects the LGD based on the levels of PD forecasts. This model approach is applicable to all pools within the construction, land development and other land, other secured by 1-4 family residential properties, secured by nonfarm, nonresidential properties and other real estate secured loan classes as well as consumer loans and other commercial loans.

An alternative LDA is utilized to support the PD and LGD assumptions necessary to apply a DCF methodology to the other construction pool. Fundamentally, this approach utilizes publicly reported default balances and leverages a generalized linear model (GLM) framework to estimate PD. Taken together, these differences allow for results to be scaled to be specific and directly applicable to the other construction segment. LGD is assumed to be a through-the-cycle constant based on the actual performance of Trustmark’s other construction segment. These assumptions are then input into the DCF model and used in conjunction with prepayment data to calculate the cash flows at the individual loan level. Management believes this methodology is commensurate with the level of risk in the pool.

For the commercial and industrial loans related pools, Trustmark uses its own PD and LGD data, instead of the macroeconomic variables and the Frye-Jacobs method described above, to calculate the PD and LGD as there were no defensible macroeconomic variables that correlated to Trustmark’s losses. Trustmark utilizes a third-party Bond Default Study to derive the PD and LGD for the obligations of state and political subdivisions pool. Due to the lack of losses within this pool, no defensible macroeconomic factors were identified to correlate.

The PD and LGD measures are used in conjunction with prepayment data as inputs into the DCF model to calculate the cash flows at the individual loan level. Contractual cash flows based on loan terms are adjusted for PD, LGD and prepayments to derive loss cash flows. These loss cash flows are discounted by the loan’s coupon rate to arrive at the discounted cash flow based quantitative loss. The prepayment studies are updated quarterly by a third-party for each applicable pool.

An alternate method of estimating the ACL is used for certain loan pools due to specific characteristics of these loans. For the non-DCF pools, specifically, those using the weighted average remaining maturity (WARM) method, the remaining life is incorporated into the ACL quantitative calculation.

 

Trustmark determined that reasonable and supportable forecasts could be made for a twelve-month period for all of its loan pools.  To the extent the lives of the loans in the LHFI portfolio extend beyond this forecast period, Trustmark uses a reversion period of four quarters and reverts to the historical mean on a straight-line basis over the remaining life of the loans.  The econometric models currently in production reflect segment or pool level sensitivities of PD to changes in macroeconomic variables.  By measuring the relationship between defaults and changes in the economy, the quantitative reserve incorporates reasonable and supportable forecasts of future conditions that will affect the value of Trustmark’s assets, as required by FASB ASC Topic 326.  Under stable forecasts, these linear regressions will reasonably predict a pool’s PD.  However, upon the occurrence of events that generate significant economic instability (such as the COVID-19 pandemic), the macroeconomic variables used for reasonable and supportable forecasting can change rapidly and the econometric models, which are sensitive to similar future levels of PD, may not produce reasonably representative results.

 

In order to prevent the econometric models from extrapolating beyond reasonable boundaries of their input variables, Trustmark chose to establish an upper and lower limit process when applying the periodic forecasts. In this way, Management will not rely upon unobserved and untested relationships in the setting of the quantitative reserve. This approach applies to all current input variables, including: Southern Unemployment, National Unemployment, National Home Price Index (HPI) and the BBB 7-10 Year US Corporate Bond Index (CBI). The upper and lower limits are based on the distribution of the macroeconomic variable by selecting extreme percentiles at the upper and lower limits of the distribution, the 1st and 99th percentiles, respectively. These upper and lower limits are then used to calculate the PD for the forecast time period in which the forecasted values are outside of the upper and lower limit range. Additionally, when periods have a PD or LGD at or near zero as a result of the improving macroeconomic forecasts, Management implemented PD and LGD floors to account for the risk associated with each portfolio. The PD and LGD floors are based on Trustmark’s historical loss experience and applied at a portfolio level.

Qualitative factors used in the ACL methodology include the following:

•
Lending policies and procedures
•
Economic conditions and concentrations of credit

31

 

•
Nature and volume of the portfolio
•
Performance trends
•
External factors

 

While all these factors are incorporated into the overall methodology, only three are currently considered active at September 30, 2026: (i) economic conditions and concentrations of credit, (ii) nature and volume of the portfolio, and (iii) performance trends.

Two of Trustmark’s largest loan classes are the loans secured by nonfarm, nonresidential properties and the loans secured by other real estate. Trustmark elected to create a qualitative factor specifically for these loan classes which addresses changes in the economic conditions of metropolitan areas and applies additional pool level reserves. This qualitative factor is based on third-party market data and forecast trends and is updated quarterly as information is available, by market and by loan pool.

 

Trustmark's current quantitative methodologies do not completely incorporate changes in credit quality. As a result, Trustmark utilizes the performance trends qualitative factor. This factor is based on migration analyses, that allocates additional ACL to non-pass/delinquent loans within each pool. In this way, Management believes the ACL will directly reflect changes in risk, based on the performance of the loans within a pool, whether declining or improving.

 

The performance trends qualitative factor is estimated by properly segmenting loan pools into risk levels by risk rating for commercial credits and delinquency status for consumer credits. A migration analysis is then performed quarterly using a third-party software and the results for each risk level are compiled to calculate the historical PD average for each loan portfolio based on risk levels. This average historical PD rate is updated annually. For the mortgage portfolio, Trustmark uses an internal report to incorporate a roll rate method for the calculation of the PD rate. In addition to the PD rate for each portfolio, Management incorporates the quantitative rate and the k value derived from the Frye-Jacobs method to calculate a loss estimate that includes both PD and LGD. The quantitative rate is used to eliminate any additional reserve that the quantitative reserve already includes. Finally, the loss estimate rate is then applied to the total balances for each risk level for each portfolio to calculate a qualitative reserve.

 

The nature and volume of the portfolio qualitative factor is utilized for a sub-pool of the secured by 1-4 family residential properties due to its significant size as well as the underlying nature being different. The nature and volume of the portfolio qualitative factor utilizes a WARM methodology that uses Trustmark’s historical data for the assumptions to support the qualitative adjustment. Trustmark’s historical data is used to develop a PD based on credit score ranges initially set up as well as using the same LGD value from the mortgage sale that occurred in 2024 along with the same weighted average life assumption utilized to determine the credit mark on this portfolio. During the second quarter of 2026, Trustmark updated the weighted average life assumption and LGD value as a result of the mortgage sale that occurred during the quarter. The sub-pool of credits is then aggregated into the appropriate credit score bands in which a weighted average loss rate is calculated based on the PD and LGD for each credit score range. This weighted average loss rate is then applied to the expected balance for the sub-segment of credits. This total is then used as the qualitative reserve adjustment.

 

The external factors qualitative factor is Management’s best judgment on the loan or pool level impact of all factors that affect the portfolio that are not accounted for using any other part of the ACL methodology (e.g., natural disasters, changes in legislation, impacts due to technology and pandemics). During 2024, Trustmark activated the External Factor – Credit Quality Review qualitative factor. This qualitative factor ensures reserve adequacy for collectively evaluated commercial loans that may not have been identified and downgraded timely for various reasons. This qualitative factor population is all commercial loans risk rated 1-5. These loans are then applied to the historical average of the Watch/Special Mention rated percentage. Then the balance of these loans are applied additional reserves based on the same reserve rates utilized in the performance trends qualitative factor for Watch/Special Mention rated loans. Then the Watch/Special Mention population is applied the historical Substandard rated percentage and then subsequently applied the Substandard reserve rate utilized in the performance trends qualitative factor as well. The historical Watch/Special Mention and Substandard rated percentage averages captures the weighted average life of the commercial loan portfolio. Thus, Trustmark will allocate additional reserves to capture the proportion of potential Watch/Special Mention and Substandard rated credits that may not have been categorized as such at any given point in time through the life of the commercial loan portfolio.

 

During the third quarter of 2025, Management determined that the risk related to delayed identification and downgrading of commercial loans had sufficiently diminished and, as a result, resolved the External Factor – Credit Quality Review qualitative factor and released the associated reserves.

32

 

The following tables disaggregate the ACL and the amortized cost basis of the loans by the measurement methodology used at September 30, 2026 and December 31, 2025 ($ in thousands):

 

 

 

September 30, 2026

 

 

 

ACL

 

 

LHFI

 

 

 

Individually Evaluated for Credit Loss

 

 

Collectively Evaluated for Credit Loss

 

 

Total

 

 

Individually Evaluated for Credit Loss

 

 

Collectively Evaluated for Credit Loss

 

 

Total

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development and
   other land

 

$

—

 

 

$

8,900

 

 

$

8,900

 

 

$

147

 

 

$

597,612

 

 

$

597,759

 

Other secured by 1-4 family residential
   properties

 

 

—

 

 

 

14,950

 

 

 

14,950

 

 

 

884

 

 

 

728,136

 

 

 

729,020

 

Secured by nonfarm, nonresidential
   properties

 

 

902

 

 

 

26,901

 

 

 

27,803

 

 

 

8,490

 

 

 

3,183,759

 

 

 

3,192,249

 

Other real estate secured

 

 

—

 

 

 

11,964

 

 

 

11,964

 

 

 

—

 

 

 

1,935,208

 

 

 

1,935,208

 

Other loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other construction

 

 

—

 

 

 

5,614

 

 

 

5,614

 

 

 

—

 

 

 

678,225

 

 

 

678,225

 

Secured by 1-4 family residential
   properties

 

 

—

 

 

 

28,896

 

 

 

28,896

 

 

 

—

 

 

 

2,409,616

 

 

 

2,409,616

 

Commercial and industrial loans

 

 

10,413

 

 

 

23,720

 

 

 

34,133

 

 

 

19,655

 

 

 

2,193,214

 

 

 

2,212,869

 

Consumer loans

 

 

—

 

 

 

6,870

 

 

 

6,870

 

 

 

—

 

 

 

167,535

 

 

 

167,535

 

State and other political subdivision loans

 

 

—

 

 

 

731

 

 

 

731

 

 

 

—

 

 

 

1,003,890

 

 

 

1,003,890

 

Other commercial loans and leases

 

 

—

 

 

 

8,477

 

 

 

8,477

 

 

 

707

 

 

 

942,093

 

 

 

942,800

 

Total

 

$

11,315

 

 

$

137,023

 

 

$

148,338

 

 

$

29,883

 

 

$

13,839,288

 

 

$

13,869,171

 

 

 

 

December 31, 2025

 

 

 

ACL

 

 

LHFI

 

 

 

Individually Evaluated for Credit Loss

 

 

Collectively Evaluated for Credit Loss

 

 

Total

 

 

Individually Evaluated for Credit Loss

 

 

Collectively Evaluated for Credit Loss

 

 

Total

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development and
   other land

 

$

—

 

 

$

6,632

 

 

$

6,632

 

 

$

156

 

 

$

549,197

 

 

$

549,353

 

Other secured by 1-4 family residential
   properties

 

 

99

 

 

 

13,485

 

 

 

13,584

 

 

 

848

 

 

 

703,666

 

 

 

704,514

 

Secured by nonfarm, nonresidential
   properties

 

 

141

 

 

 

35,042

 

 

 

35,183

 

 

 

2,531

 

 

 

3,301,992

 

 

 

3,304,523

 

Other real estate secured

 

 

—

 

 

 

20,410

 

 

 

20,410

 

 

 

15,234

 

 

 

2,109,038

 

 

 

2,124,272

 

Other loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other construction

 

 

—

 

 

 

4,889

 

 

 

4,889

 

 

 

—

 

 

 

595,238

 

 

 

595,238

 

Secured by 1-4 family residential
   properties

 

 

—

 

 

 

41,087

 

 

 

41,087

 

 

 

3,414

 

 

 

2,348,261

 

 

 

2,351,675

 

Commercial and industrial loans

 

 

811

 

 

 

19,758

 

 

 

20,569

 

 

 

1,804

 

 

 

1,997,660

 

 

 

1,999,464

 

Consumer loans

 

 

103

 

 

 

5,740

 

 

 

5,843

 

 

 

103

 

 

 

163,651

 

 

 

163,754

 

State and other political subdivision loans

 

 

—

 

 

 

865

 

 

 

865

 

 

 

—

 

 

 

1,061,584

 

 

 

1,061,584

 

Other commercial loans and leases

 

 

—

 

 

 

8,009

 

 

 

8,009

 

 

 

764

 

 

 

819,092

 

 

 

819,856

 

Total

 

$

1,154

 

 

$

155,917

 

 

$

157,071

 

 

$

24,854

 

 

$

13,649,379

 

 

$

13,674,233

 

Changes in the ACL, LHFI were as follows for the periods presented ($ in thousands):

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Balance at beginning of period

 

$

148,189

 

 

$

168,237

 

 

$

157,071

 

 

$

160,270

 

Loans charged-off, sale of 1-4 family mortgage loans

 

 

—

 

 

 

—

 

 

 

(6,316

)

 

 

—

 

Loans charged-off

 

 

(3,354

)

 

 

(6,775

)

 

 

(10,533

)

 

 

(16,856

)

Recoveries

 

 

2,324

 

 

 

2,390

 

 

 

7,024

 

 

 

6,967

 

Net (charge-offs) recoveries

 

 

(1,030

)

 

 

(4,385

)

 

 

(9,825

)

 

 

(9,889

)

PCL, LHFI

 

 

1,179

 

 

 

1,390

 

 

 

10,319

 

 

 

14,861

 

PCL, LHFI sale of 1-4 family mortgage loans

 

 

—

 

 

 

—

 

 

 

(9,227

)

 

 

—

 

Balance at end of period

 

$

148,338

 

 

$

165,242

 

 

$

148,338

 

 

$

165,242

 

 

33

 

The following tables detail changes in the ACL, LHFI by loan class for the periods presented ($ in thousands):

 

 

 

Three Months Ended September 30, 2026

 

 

 

Balance at Beginning of Period

 

 

Charge-offs

 

 

Recoveries

 

 

PCL

 

 

Balance at
End of
Period

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development and other land

 

$

8,048

 

 

$

—

 

 

$

29

 

 

$

823

 

 

$

8,900

 

Other secured by 1-4 family residential properties

 

 

14,762

 

 

 

(404

)

 

 

267

 

 

 

325

 

 

 

14,950

 

Secured by nonfarm, nonresidential properties

 

 

30,449

 

 

 

(150

)

 

 

111

 

 

 

(2,607

)

 

 

27,803

 

Other real estate secured

 

 

12,539

 

 

 

—

 

 

 

90

 

 

 

(665

)

 

 

11,964

 

Other loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other construction

 

 

5,151

 

 

 

—

 

 

 

92

 

 

 

371

 

 

 

5,614

 

Secured by 1-4 family residential properties

 

 

29,238

 

 

 

(44

)

 

 

34

 

 

 

(332

)

 

 

28,896

 

Commercial and industrial loans

 

 

31,100

 

 

 

(499

)

 

 

167

 

 

 

3,365

 

 

 

34,133

 

Consumer loans

 

 

6,350

 

 

 

(2,076

)

 

 

1,515

 

 

 

1,081

 

 

 

6,870

 

State and other political subdivision loans

 

 

711

 

 

 

—

 

 

 

—

 

 

 

20

 

 

 

731

 

Other commercial loans and leases

 

 

9,841

 

 

 

(181

)

 

 

19

 

 

 

(1,202

)

 

 

8,477

 

Total

 

$

148,189

 

 

$

(3,354

)

 

$

2,324

 

 

$

1,179

 

 

$

148,338

 

The PCL, LHFI for the loan portfolios disclosed in the above table for the three months ended September 30, 2026 was primarily due to an increase in required reserves on individually analyzed loans and changes in the macroeconomic forecasts. The negative PCL, LHFI for the loan portfolios disclosed in the above table for the three months ended September 30, 2026 was primarily due to positive credit migration, adjustments to the qualitative factors and adjustments to the weighted-average life assumptions.

 

 

 

Three Months Ended September 30, 2025

 

 

 

Balance at Beginning of Period

 

 

Charge-offs

 

 

Recoveries

 

 

PCL

 

 

Balance at
End of
Period

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development and other land

 

$

7,349

 

 

$

—

 

 

$

9

 

 

$

(231

)

 

$

7,127

 

Other secured by 1-4 family residential properties

 

 

12,665

 

 

 

(371

)

 

 

37

 

 

 

812

 

 

 

13,143

 

Secured by nonfarm, nonresidential properties

 

 

35,017

 

 

 

(21

)

 

 

124

 

 

 

(982

)

 

 

34,138

 

Other real estate secured

 

 

23,505

 

 

 

—

 

 

 

1

 

 

 

403

 

 

 

23,909

 

Other loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other construction

 

 

8,142

 

 

 

—

 

 

 

2

 

 

 

(3,163

)

 

 

4,981

 

Secured by 1-4 family residential properties

 

 

38,985

 

 

 

(577

)

 

 

29

 

 

 

3,861

 

 

 

42,298

 

Commercial and industrial loans

 

 

28,465

 

 

 

(3,819

)

 

 

746

 

 

 

(293

)

 

 

25,099

 

Consumer loans

 

 

5,111

 

 

 

(1,968

)

 

 

1,436

 

 

 

749

 

 

 

5,328

 

State and other political subdivision loans

 

 

1,547

 

 

 

—

 

 

 

—

 

 

 

(688

)

 

 

859

 

Other commercial loans and leases

 

 

7,451

 

 

 

(19

)

 

 

6

 

 

 

922

 

 

 

8,360

 

Total

 

$

168,237

 

 

$

(6,775

)

 

$

2,390

 

 

$

1,390

 

 

$

165,242

 

The PCL, LHFI for the three months ended September 30, 2025 was primarily due to loan growth and changes in the macroeconomic forecast.

The negative PCL, LHFI for the other construction, secured by nonfarm, nonresidential properties and state and other political subdivisions portfolios for the three months ended September 30, 2025 was primarily due to positive credit migration and the release in reserves associated with the resolution of the External Factor - Credit Quality Review qualitative factor.

34

 

 

 

 

Nine Months Ended September 30, 2026

 

 

 

Balance at Beginning of Period

 

 

Charge-offs

 

 

Recoveries

 

 

PCL

 

 

Balance at
End of
Period

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development and other land

 

$

6,632

 

 

$

—

 

 

$

89

 

 

$

2,179

 

 

$

8,900

 

Other secured by 1-4 family residential properties

 

 

13,584

 

 

 

(1,150

)

 

 

436

 

 

 

2,080

 

 

 

14,950

 

Secured by nonfarm, nonresidential properties

 

 

35,183

 

 

 

(150

)

 

 

428

 

 

 

(7,658

)

 

 

27,803

 

Other real estate secured

 

 

20,410

 

 

 

—

 

 

 

91

 

 

 

(8,537

)

 

 

11,964

 

Other loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other construction

 

 

4,889

 

 

 

—

 

 

 

96

 

 

 

629

 

 

 

5,614

 

Secured by 1-4 family residential properties

 

 

41,087

 

 

 

(6,834

)

 

 

147

 

 

 

(5,504

)

 

 

28,896

 

Commercial and industrial loans

 

 

20,569

 

 

 

(2,113

)

 

 

757

 

 

 

14,920

 

 

 

34,133

 

Consumer loans

 

 

5,843

 

 

 

(6,406

)

 

 

4,846

 

 

 

2,587

 

 

 

6,870

 

State and other political subdivision loans

 

 

865

 

 

 

—

 

 

 

—

 

 

 

(134

)

 

 

731

 

Other commercial loans and leases

 

 

8,009

 

 

 

(196

)

 

 

134

 

 

 

530

 

 

 

8,477

 

Total

 

$

157,071

 

 

$

(16,849

)

 

$

7,024

 

 

$

1,092

 

 

$

148,338

 

The PCL, LHFI for the loan portfolios disclosed in the above table for the nine months ended September 30, 2026 was primarily due to an increase in required reserves for individually analyzed loans and loan growth. The negative PCL, LHFI for the loan portfolios disclosed in the above table for the nine months ended September 30, 2026 was primarily due to the sale of the 1-4 family mortgage loans that resulted in a $9.2 million release of reserves coupled with positive credit migration.

 

 

 

Nine Months Ended September 30, 2025

 

 

 

Balance at Beginning of Period

 

 

Charge-offs

 

 

Recoveries

 

 

PCL

 

 

Balance at
End of
Period

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development and other land

 

$

6,452

 

 

$

—

 

 

$

205

 

 

$

470

 

 

$

7,127

 

Other secured by 1-4 family residential properties

 

 

11,347

 

 

 

(678

)

 

 

259

 

 

 

2,215

 

 

 

13,143

 

Secured by nonfarm, nonresidential properties

 

 

37,896

 

 

 

(2,026

)

 

 

124

 

 

 

(1,856

)

 

 

34,138

 

Other real estate secured

 

 

19,491

 

 

 

—

 

 

 

78

 

 

 

4,340

 

 

 

23,909

 

Other loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other construction

 

 

13,297

 

 

 

—

 

 

 

5

 

 

 

(8,321

)

 

 

4,981

 

Secured by 1-4 family residential properties

 

 

32,129

 

 

 

(1,507

)

 

 

470

 

 

 

11,206

 

 

 

42,298

 

Commercial and industrial loans

 

 

27,020

 

 

 

(6,249

)

 

 

1,245

 

 

 

3,083

 

 

 

25,099

 

Consumer loans

 

 

5,141

 

 

 

(6,293

)

 

 

4,482

 

 

 

1,998

 

 

 

5,328

 

State and other political subdivision loans

 

 

1,250

 

 

 

—

 

 

 

—

 

 

 

(391

)

 

 

859

 

Other commercial loans and leases

 

 

6,247

 

 

 

(103

)

 

 

99

 

 

 

2,117

 

 

 

8,360

 

Total

 

$

160,270

 

 

$

(16,856

)

 

$

6,967

 

 

$

14,861

 

 

$

165,242

 

The PCL, LHFI for the nine months ended September 30, 2025 was primarily due to loan growth, changes in the macroeconomic forecast, coupled with net adjustments to the qualitative factors due to credit migration and modeling assumption updates to utilize bank historical data.

The negative PCL, LHFI for the other construction and secured by nonfarm, nonresidential properties portfolios for the nine months ended September 30, 2025 was primarily due to segmentation migration, positive credit migration and a decline in loan balances.

 

35

 

 

Note 4 – Mortgage Banking

MSR

The activity in the MSR is detailed in the table below for the periods presented ($ in thousands):

 

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

Balance at beginning of period

 

$

131,289

 

 

$

139,317

 

Origination of servicing assets

 

 

15,845

 

 

 

10,853

 

Change in fair value:

 

 

 

 

 

 

Due to market changes

 

 

21,457

 

 

 

(9,395

)

Due to run-off

 

 

(10,510

)

 

 

(9,099

)

Balance at end of period

 

$

158,081

 

 

$

131,676

 

 

Trustmark determines the fair value of the MSR using a valuation model administered by a third party that calculates the present value of estimated future net servicing income. Trustmark considers the conditional prepayment rate (CPR), which is an estimated loan prepayment rate that uses historical prepayment rates for previous loans similar to the loans being evaluated, the float rate, which is the interest rate earned on escrow balances, and the discount rate as some of the primary assumptions used in determining the fair value of the MSR. An increase in either the CPR or discount rate assumption will result in a decrease in the fair value of the MSR, while a decrease in either assumption will result in an increase in the fair value of the MSR. An increase in the float rate will result in an increase in the fair value of the MSR, while a decrease in the float rate will result in a decrease in the fair value of the MSR. At September 30, 2026, the fair value of the MSR included an assumed average prepayment speed of 8 CPR and an average discount rate of 10.70% compared to an assumed average prepayment speed of 9 CPR and an average discount rate of 10.66% at September 30, 2025.

Mortgage Loans Serviced/Sold

During the first nine months of 2026 and 2025, Trustmark sold $937.3 million and $858.3 million, respectively, of residential mortgage loans. Gains on these sales were recorded as noninterest income in mortgage banking, net and totaled $13.5 million for the first nine months of 2026 compared to $15.1 million for the first nine months of 2025.

The table below details the mortgage loans sold and serviced for others at September 30, 2026 and December 31, 2025 ($ in thousands):

 

 

 

September 30, 2026

 

 

December 31, 2025

 

Federal National Mortgage Association

 

$

4,693,117

 

 

$

4,745,556

 

Government National Mortgage Association

 

 

4,032,571

 

 

 

3,872,151

 

Federal Home Loan Mortgage Corporation

 

 

375,245

 

 

 

314,383

 

Other

 

 

27,783

 

 

 

23,872

 

Total mortgage loans sold and serviced for others

 

$

9,128,716

 

 

$

8,955,962

 

 

Trustmark is subject to losses in its loan servicing portfolio due to loan foreclosures. Trustmark has obligations to either repurchase the outstanding principal balance of a loan or make the purchaser whole for the economic benefits of a loan if it is determined that the loan sold was in violation of representations or warranties made by Trustmark at the time of the sale, herein referred to as mortgage loan servicing putback expenses. Such representations and warranties typically include those made regarding loans that had missing or insufficient file documentation, loans that do not meet investor guidelines, loans in which the appraisal does not support the value and/or loans obtained through fraud by the borrowers or other third parties. Generally, putback requests may be made until the loan is paid in full. However, mortgage loans delivered to Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporation (FHLMC) on or after January 1, 2013 are subject to the Representations and Warranties Framework, which provides certain instances in which FNMA and FHLMC will not exercise their remedies, including a putback request, for breaches of certain selling representations and warranties, such as payment history and quality control review.

 

When a putback request is received, Trustmark evaluates the request and takes appropriate actions based on the nature of the request. Trustmark is required by FNMA and FHLMC to provide a response to putback requests within 60 days of the date of receipt. The total mortgage loan servicing putback expense is included in other expense. Trustmark had no mortgage loan servicing putback expense for the three and nine months ended September 30, 2026 and 2025. At both September 30, 2026 and 2025, Trustmark had a reserve for mortgage loan servicing putback expenses of $500 thousand.

36

 

There is inherent uncertainty in reasonably estimating the requirement for reserves against potential future mortgage loan servicing putback expenses. Future putback expenses are dependent on many subjective factors, including the review procedures of the purchasers and the potential refinance activity on loans sold with servicing released and the subsequent consequences under the representations and warranties. Trustmark believes that it has appropriately reserved for potential mortgage loan servicing putback requests.

 

Note 5 – Other Real Estate

At September 30, 2026, Trustmark’s geographic other real estate distribution was concentrated in its Alabama, Florida, Mississippi, Tennessee and Texas market regions. The ultimate recovery of a substantial portion of the carrying amount of other real estate is susceptible to changes in market conditions in these regions.

For the periods presented, changes and gains (losses), net on other real estate were as follows ($ in thousands):

 

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

Balance at beginning of period

 

$

6,957

 

 

$

5,917

 

Additions

 

 

5,026

 

 

 

6,754

 

Disposals

 

 

(9,085

)

 

 

(2,563

)

(Write-downs) recoveries

 

 

(201

)

 

 

(1,783

)

Balance at end of period

 

$

2,697

 

 

$

8,325

 

 

 

 

 

 

 

 

Gains (losses), net on the sale of other real estate included in
   other real estate expense

 

$

(661

)

 

$

(323

)

 

At September 30, 2026 and December 31, 2025, other real estate by type of property consisted of the following ($ in thousands):

 

 

 

September 30, 2026

 

 

December 31, 2025

 

Construction, land development and other land properties

 

$

63

 

 

$

63

 

1-4 family residential properties

 

 

2,082

 

 

 

3,871

 

Nonfarm, nonresidential properties

 

 

552

 

 

 

1,273

 

Other real estate properties

 

 

—

 

 

 

1,750

 

Total other real estate

 

$

2,697

 

 

$

6,957

 

 

At September 30, 2026 and December 31, 2025, other real estate by geographic location consisted of the following ($ in thousands):

 

 

 

September 30, 2026

 

 

December 31, 2025

 

Alabama

 

$

367

 

 

$

409

 

Florida

 

 

222

 

 

 

—

 

Mississippi (1)

 

 

1,763

 

 

 

5,621

 

Tennessee (2)

 

 

147

 

 

 

927

 

Texas

 

 

198

 

 

 

—

 

Total other real estate

 

$

2,697

 

 

$

6,957

 

(1)
Mississippi includes Central and Southern Mississippi Regions.
(2)
Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.

At September 30, 2026, the balance of other real estate included $2.1 million of foreclosed residential real estate properties recorded as a result of obtaining physical possession of the property compared to $3.9 million at December 31, 2025. At September 30, 2026 and December 31, 2025, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process was $4.1 million and $8.1 million, respectively.

Note 6 – Leases

Lessor Arrangements

Trustmark leases certain types of machinery and equipment to its customers through sales-type and direct financing leases as part of its equipment financing portfolio. At September 30, 2026, these leases have remaining lease terms of one to eight years, some of which include renewal options and/or options for the lessee to purchase the leased property near or at the end of the lease term. Trustmark

37

 

recognized interest income from its sales-type and direct financing leases of $6.7 million and $18.6 million for the three and nine months ended September 30, 2026, respectively, compared to $5.0 million and $12.8 million for the three and nine months ended September 30, 2025, respectively. Trustmark does not have any significant operating leases in which it is the lessor.

The table below summarizes the components of Trustmark's net investment in its sales-type and direct financing leases for the periods presented ($ in thousands):

 

 

September 30, 2026

 

 

December 31, 2025

 

Leases receivable

 

$

550,002

 

 

$

442,096

 

Unearned income

 

 

(77,747

)

 

 

(68,283

)

Initial direct costs

 

 

4,073

 

 

 

3,236

 

Unguaranteed lease residual

 

 

38,312

 

 

 

24,360

 

Total net investment

 

$

514,640

 

 

$

401,409

 

The table below details the minimum future lease payments for Trustmark's leases receivable at September 30, 2026 ($ in thousands):

 

 

 

September 30, 2026

 

2026 (excluding the nine months ended September 30, 2026)

 

$

29,203

 

2027

 

 

130,948

 

2028

 

 

119,612

 

2029

 

 

101,389

 

2030

 

 

74,859

 

Thereafter

 

 

93,991

 

Lease receivable

 

$

550,002

 

Lessee Arrangements

On September 3, 2026, Trustmark Bank (TB) entered into and simultaneously closed a sale-leaseback transaction for the purchase and sale of real property (the Sale Agreement) with entities affiliated with Blue Owl Real Estate Capital LLC (collectively, Blue Owl), providing for the sale to Blue Owl of 34 bank branch properties owned and operated by TB (collectively, the Branches) for an aggregate cash net purchase price of $91.7 million. The Branches are located in Alabama, Florida, Mississippi, Tennessee and Texas.

Under the Sale Agreement, TB entered into, concurrently with the closing of the sale of the Branches, triple net lease agreements (the Lease Agreements) with Blue Owl, pursuant to which TB leased each of the Branches (the sale of the Branches pursuant to the Sale Agreement, and the lease of the Branches pursuant to the Lease Agreements, are collectively referred to as the Sale-leaseback Transaction). Each of the Lease Agreements has an initial term of 15 years and provides TB with three consecutive renewal options of five years each. The initial aggregate annual rent payable by TB under the Lease Agreements is $6.4 million, subject to a 1.5% annual rent escalation during the initial term and the renewal terms, if exercised. No Branches were closed as a result of the Sale-leaseback Transaction. The sale of the Branches resulted in a pre-tax gain of $61.5 million, after transaction-related expenses. As a result of the Sale-leaseback Transaction, Trustmark had additional lease right-of-use assets of $72.5 million and operating lease liabilities of $72.6 million at September 30, 2026. The renewal terms were excluded from the measurement of the right-of-use assets and lease liabilities since Management determined that the exercise of the renewal terms was not reasonably certain.

The following table details the components of net lease cost for the periods presented ($ in thousands):

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Finance leases:

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of right-of-use assets

 

$

113

 

 

$

113

 

 

$

339

 

 

$

339

 

Interest on lease liabilities

 

 

29

 

 

 

32

 

 

 

88

 

 

 

100

 

Operating lease cost

 

 

2,033

 

 

 

1,343

 

 

 

4,783

 

 

 

4,025

 

Short-term lease cost

 

 

68

 

 

 

162

 

 

 

358

 

 

 

481

 

Variable lease cost

 

 

256

 

 

 

232

 

 

 

726

 

 

 

674

 

Sublease income

 

 

(80

)

 

 

(70

)

 

 

(215

)

 

 

(205

)

Net lease cost

 

$

2,419

 

 

$

1,812

 

 

$

6,079

 

 

$

5,414

 

 

38

 

The following table details the cash payments included in the measurement of lease liabilities during the periods presented ($ in thousands):

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

Finance leases:

 

 

 

 

 

 

Operating cash flows included in operating activities

 

$

88

 

 

$

100

 

Financing cash flows included in payments under finance lease obligations

 

 

354

 

 

 

338

 

 

 

 

 

 

 

 

Operating leases:

 

 

 

 

 

 

Operating cash flows (fixed payments) included in other operating activities, net

 

 

4,520

 

 

 

3,967

 

Operating cash flows (liability reduction) included in other operating activities, net

 

 

3,266

 

 

 

2,925

 

 

The following table details balance sheet information, as well as weighted-average lease terms and discount rates, related to leases at September 30, 2026 and December 31, 2025 ($ in thousands):

 

 

September 30, 2026

 

 

December 31, 2025

 

Finance lease right-of-use assets, net of accumulated depreciation

 

$

2,507

 

 

$

2,847

 

Finance lease liabilities

 

 

3,104

 

 

 

3,458

 

Operating lease right-of-use assets

 

 

104,769

 

 

 

32,152

 

Operating lease liabilities

 

 

109,137

 

 

 

36,250

 

 

 

 

 

 

 

 

Weighted-average lease term:

 

 

 

 

 

 

Finance leases

 

5.62 years

 

 

6.36 years

 

Operating leases

 

12.73 years

 

 

8.69 years

 

 

 

 

 

 

 

 

Weighted-average discount rate:

 

 

 

 

 

 

Finance leases

 

 

3.61

%

 

 

3.61

%

Operating leases

 

 

5.04

%

 

 

4.04

%

 

At September 30, 2026, future minimum rental commitments under finance and operating leases were as follows ($ in thousands):

 

 

 

Finance Leases

 

 

Operating Leases

 

2026 (excluding the nine months ended September 30, 2026)

 

$

147

 

 

$

3,067

 

2027

 

 

594

 

 

 

12,393

 

2028

 

 

599

 

 

 

11,664

 

2029

 

 

633

 

 

 

11,771

 

2030

 

 

644

 

 

 

11,864

 

Thereafter

 

 

810

 

 

 

100,231

 

Total minimum lease payments

 

 

3,427

 

 

 

150,990

 

Less imputed interest

 

 

(323

)

 

 

(41,853

)

Lease liabilities

 

$

3,104

 

 

$

109,137

 

 

Note 7 – Deposits

At September 30, 2026 and December 31, 2025, deposits consisted of the following ($ in thousands):

 

 

 

September 30, 2026

 

 

December 31, 2025

 

Noninterest-bearing demand

 

$

3,262,885

 

 

$

3,036,504

 

Interest-bearing demand

 

 

8,365,247

 

 

 

8,020,354

 

Savings

 

 

960,524

 

 

 

970,161

 

Time

 

 

3,469,404

 

 

 

3,472,765

 

Total

 

$

16,058,060

 

 

$

15,499,784

 

 

Note 8 – Revenue from Contracts with Customers

Trustmark accounts for revenue from contracts with customers in accordance with FASB ASC Topic 606, “Revenue from Contracts with Customers,” which provides that revenue be recognized in a manner that depicts the transfer of goods or services to a customer in

39

 

an amount that reflects the consideration Trustmark expects to be entitled to in exchange for those goods or services. Revenue from contracts with customers is recognized either over time in a manner that depicts Trustmark’s performance, or at a point in time when control of the goods or services are transferred to the customer. Trustmark’s noninterest income, excluding all of mortgage banking, net and securities gains (losses), net and portions of bank card and other fees and other, net, are considered within the scope of FASB ASC Topic 606. Gains or losses on the sale of other real estate, which are included in Trustmark’s noninterest expense as other expense, are also within the scope of FASB ASC Topic 606.

Trustmark records a gain or loss from the sale of other real estate when control of the property transfers to the buyer. Trustmark records the gain or loss from the sale of other real estate in noninterest expense as other expense. Other real estate sales for the three and nine months ended September 30, 2026 resulted in a net loss of $92 thousand and $661 thousand, respectively, compared to a net loss of $179 thousand and $323 thousand for the three and nine months ended September 30, 2025, respectively.

The following tables present noninterest income disaggregated by reportable operating segment and revenue stream for the periods presented ($ in thousands):

 

 

Three Months Ended September 30, 2026

 

 

Three Months Ended September 30, 2025

 

 

 

Topic 606

 

 

Not Topic
606 (1)

 

 

Total

 

 

Topic 606

 

 

Not Topic
606 (1)

 

 

Total

 

General Banking Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

$

10,556

 

 

$

—

 

 

$

10,556

 

 

$

11,188

 

 

$

—

 

 

$

11,188

 

Bank card and other fees

 

 

7,561

 

 

 

571

 

 

 

8,132

 

 

 

7,625

 

 

 

635

 

 

 

8,260

 

Mortgage banking, net

 

 

—

 

 

 

7,880

 

 

 

7,880

 

 

 

—

 

 

 

8,182

 

 

 

8,182

 

Wealth management

 

 

55

 

 

 

—

 

 

 

55

 

 

 

185

 

 

 

—

 

 

 

185

 

Other, net

 

 

1,267

 

 

 

192

 

 

 

1,459

 

 

 

2,753

 

 

 

(553

)

 

 

2,200

 

Gain on sale-leaseback, net

 

 

—

 

 

 

61,518

 

 

 

61,518

 

 

 

—

 

 

 

—

 

 

 

—

 

Securities gains (losses), net

 

 

—

 

 

 

(61,511

)

 

 

(61,511

)

 

 

—

 

 

 

—

 

 

 

—

 

Total noninterest income

 

$

19,439

 

 

$

8,650

 

 

$

28,089

 

 

$

21,751

 

 

$

8,264

 

 

$

30,015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wealth Management Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

$

70

 

 

$

—

 

 

$

70

 

 

$

63

 

 

$

—

 

 

$

63

 

Bank card and other fees

 

 

17

 

 

 

—

 

 

 

17

 

 

 

58

 

 

 

—

 

 

 

58

 

Wealth management

 

 

11,106

 

 

 

—

 

 

 

11,106

 

 

 

9,613

 

 

 

—

 

 

 

9,613

 

Other, net

 

 

82

 

 

 

136

 

 

 

218

 

 

 

83

 

 

 

99

 

 

 

182

 

Total noninterest income

 

$

11,275

 

 

$

136

 

 

$

11,411

 

 

$

9,817

 

 

$

99

 

 

$

9,916

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

$

10,626

 

 

$

—

 

 

$

10,626

 

 

$

11,251

 

 

$

—

 

 

$

11,251

 

Bank card and other fees

 

 

7,578

 

 

 

571

 

 

 

8,149

 

 

 

7,683

 

 

 

635

 

 

 

8,318

 

Mortgage banking, net

 

 

—

 

 

 

7,880

 

 

 

7,880

 

 

 

—

 

 

 

8,182

 

 

 

8,182

 

Wealth management

 

 

11,161

 

 

 

—

 

 

 

11,161

 

 

 

9,798

 

 

 

—

 

 

 

9,798

 

Other, net

 

 

1,349

 

 

 

328

 

 

 

1,677

 

 

 

2,836

 

 

 

(454

)

 

 

2,382

 

Gain on sale-leaseback, net

 

 

—

 

 

 

61,518

 

 

 

61,518

 

 

 

—

 

 

 

—

 

 

 

—

 

Securities gains (losses), net

 

 

—

 

 

 

(61,511

)

 

 

(61,511

)

 

 

—

 

 

 

—

 

 

 

—

 

Total noninterest income

 

$

30,714

 

 

$

8,786

 

 

$

39,500

 

 

$

31,568

 

 

$

8,363

 

 

$

39,931

 

(1)
Noninterest income not in scope for FASB ASC Topic 606 includes customer derivatives revenue and miscellaneous credit card fee income within bank card and other fees; mortgage banking, net; amortization of tax credits, cash surrender value on various life insurance policies, earnings on Trustmark’s non-qualified deferred compensation plans, other partnership investments and rental income within other, net; gain on sale-leaseback, net and securities gains (losses), net.

 

40

 

 

 

 

Nine Months Ended September 30, 2026

 

 

Nine Months Ended September 30, 2025

 

 

 

Topic 606

 

 

Not Topic
606 (1)

 

 

Total

 

 

Topic 606

 

 

Not Topic
606 (1)

 

 

Total

 

General Banking Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

$

31,440

 

 

$

—

 

 

$

31,440

 

 

$

32,365

 

 

$

—

 

 

$

32,365

 

Bank card and other fees

 

 

22,508

 

 

 

2,323

 

 

 

24,831

 

 

 

22,973

 

 

 

1,628

 

 

 

24,601

 

Mortgage banking, net

 

 

—

 

 

 

25,728

 

 

 

25,728

 

 

 

—

 

 

 

25,555

 

 

 

25,555

 

Wealth management

 

 

369

 

 

 

—

 

 

 

369

 

 

 

562

 

 

 

—

 

 

 

562

 

Other, net

 

 

6,159

 

 

 

2,880

 

 

 

9,039

 

 

 

10,554

 

 

 

(368

)

 

 

10,186

 

Gain on sale-leaseback, net

 

 

—

 

 

 

61,518

 

 

 

61,518

 

 

 

—

 

 

 

—

 

 

 

—

 

Securities gains (losses), net

 

 

—

 

 

 

(61,511

)

 

 

(61,511

)

 

 

—

 

 

 

—

 

 

 

—

 

Total noninterest income

 

$

60,476

 

 

$

30,938

 

 

$

91,414

 

 

$

66,454

 

 

$

26,815

 

 

$

93,269

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wealth Management Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

$

215

 

 

$

—

 

 

$

215

 

 

$

107

 

 

$

—

 

 

$

107

 

Bank card and other fees

 

 

49

 

 

 

—

 

 

 

49

 

 

 

135

 

 

 

—

 

 

 

135

 

Wealth management

 

 

32,107

 

 

 

—

 

 

 

32,107

 

 

 

28,417

 

 

 

—

 

 

 

28,417

 

Other, net

 

 

268

 

 

 

363

 

 

 

631

 

 

 

189

 

 

 

288

 

 

 

477

 

Total noninterest income

 

$

32,639

 

 

$

363

 

 

$

33,002

 

 

$

28,848

 

 

$

288

 

 

$

29,136

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

$

31,655

 

 

$

—

 

 

$

31,655

 

 

$

32,472

 

 

$

—

 

 

$

32,472

 

Bank card and other fees

 

 

22,557

 

 

 

2,323

 

 

 

24,880

 

 

 

23,108

 

 

 

1,628

 

 

 

24,736

 

Mortgage banking, net

 

 

—

 

 

 

25,728

 

 

 

25,728

 

 

 

—

 

 

 

25,555

 

 

 

25,555

 

Wealth management

 

 

32,476

 

 

 

—

 

 

 

32,476

 

 

 

28,979

 

 

 

—

 

 

 

28,979

 

Other, net

 

 

6,427

 

 

 

3,243

 

 

 

9,670

 

 

 

10,743

 

 

 

(80

)

 

 

10,663

 

Gain on sale-leaseback, net

 

 

—

 

 

 

61,518

 

 

 

61,518

 

 

 

—

 

 

 

—

 

 

 

—

 

Securities gains (losses), net

 

 

—

 

 

 

(61,511

)

 

 

(61,511

)

 

 

—

 

 

 

—

 

 

 

—

 

Total noninterest income

 

$

93,115

 

 

$

31,301

 

 

$

124,416

 

 

$

95,302

 

 

$

27,103

 

 

$

122,405

 

(1)
Noninterest income not in scope for FASB ASC Topic 606 includes customer derivatives revenue and miscellaneous credit card fee income within bank card and other fees; mortgage banking, net; amortization of tax credits, cash surrender value on various life insurance policies, earnings on Trustmark’s non-qualified deferred compensation plans, other partnership investments and rental income within other, net; gain on sale-leaseback, net and securities gains (losses), net.

Note 9 – Defined Benefit and Other Postretirement Benefits

Qualified Pension Plan

Trustmark maintains a noncontributory tax-qualified defined benefit pension plan titled the Trustmark Corporation Pension Plan for Certain Employees of Acquired Financial Institutions (the Continuing Plan) to satisfy commitments made by Trustmark to associates covered through plans obtained in acquisitions.

The following table presents information regarding the net periodic benefit cost for the Continuing Plan for the periods presented ($ in thousands):

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Service cost

 

$

7

 

 

$

9

 

 

$

21

 

 

$

27

 

Interest cost

 

 

50

 

 

 

68

 

 

 

150

 

 

 

206

 

Expected return on plan assets

 

 

(18

)

 

 

(31

)

 

 

(56

)

 

 

(94

)

Recognized net (gain) loss due to lump sum settlements

 

 

—

 

 

 

(29

)

 

 

(31

)

 

 

(79

)

Recognized net actuarial (gain) loss

 

 

(4

)

 

 

(1

)

 

 

(10

)

 

 

(5

)

Net periodic benefit cost

 

$

35

 

 

$

16

 

 

$

74

 

 

$

55

 

 

41

 

For the plan year ending December 31, 2026, Trustmark’s minimum required contribution to the Continuing Plan is $91 thousand; however, Management and the Board of Directors of Trustmark will monitor the Continuing Plan throughout 2026 to determine any additional funding requirements by the plan’s measurement date, which is December 31.

Supplemental Retirement Plans

Trustmark maintains a nonqualified supplemental retirement plan covering key executive officers and senior officers as well as directors who have elected to defer fees. The plan provides for retirement and/or death benefits based on a participant’s covered salary or deferred fees. Although plan benefits may be paid from Trustmark’s general assets, Trustmark has purchased life insurance contracts on the participants covered under the plan, which may be used to fund future benefit payments under the plan. The annual measurement date for the plan is December 31. As a result of mergers prior to 2014, Trustmark became the administrator of nonqualified supplemental retirement plans, for which the plan benefits were frozen prior to the merger date.

The following table presents information regarding the net periodic benefit cost for Trustmark’s nonqualified supplemental retirement plans for the periods presented ($ in thousands):

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Service cost

 

$

3

 

 

$

3

 

 

$

7

 

 

$

11

 

Interest cost

 

 

434

 

 

 

476

 

 

 

1,320

 

 

 

1,446

 

Amortization of prior service cost

 

 

—

 

 

 

4

 

 

 

—

 

 

 

11

 

Recognized net actuarial loss

 

 

77

 

 

 

62

 

 

 

241

 

 

 

198

 

Net periodic benefit cost

 

$

514

 

 

$

545

 

 

$

1,568

 

 

$

1,666

 

 

Note 10 – Stock and Incentive Compensation

Trustmark has granted restricted stock units subject to the provisions of the Stock and Incentive Compensation Plan (the Stock Plan). Current outstanding and future grants of restricted stock units are subject to the provisions of the Stock Plan, which is designed to provide flexibility to Trustmark regarding its ability to motivate, attract and retain the services of key associates and directors. The Stock Plan also allows Trustmark to grant nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units and performance units to key associates and directors.

Restricted Stock Grants

Performance Units

Trustmark’s performance units vest over three years and are granted to Trustmark’s executive and senior management teams. Performance units granted vest based on performance goals of return on average tangible equity and total shareholder return. Performance units are valued utilizing a Monte Carlo simulation model to estimate fair value of the units at the grant date. The Monte Carlo simulation was performed by an independent valuation consultant and requires the use of subjective modeling assumptions. These units are recognized using the straight-line method over the requisite service period. These units are granted at 100% of target, yet provide for achievement units if performance measures exceed 100%. The restricted stock agreement for these units provides for dividend privileges, but no voting rights.

Time-Based Units

Trustmark’s time-based units granted to Trustmark’s executive and senior management teams vest over three years. Trustmark’s time-based units granted to members of Trustmark’s Board of Directors vest over one year. Time-based units are valued utilizing the fair value of Trustmark’s stock at the grant date. These units are amortized on the straight-line method over the earlier of the requisite service period or at age 65. The restricted stock agreement for these units provides for dividend privileges, but no voting rights.

42

 

The following tables summarize the Stock Plan activity for the periods presented:

 

 

 

Three Months Ended September 30, 2026

 

 

 

Performance
Units

 

 

Time-Vested
Units

 

Nonvested units, beginning of period

 

 

201,825

 

 

 

391,297

 

Granted

 

 

—

 

 

 

6,324

 

Released from restriction

 

 

—

 

 

 

(12,000

)

Forfeited

 

 

(5,580

)

 

 

(4,277

)

Nonvested units, end of period

 

 

196,245

 

 

 

381,344

 

 

 

 

Nine Months Ended September 30, 2026

 

 

 

Performance
Units

 

 

Time-Vested
Units

 

Nonvested units, beginning of period

 

 

205,227

 

 

 

362,253

 

Granted

 

 

63,691

 

 

 

164,034

 

Adjustment for performance factor

 

 

43,619

 

 

 

—

 

Released from restriction

 

 

(110,712

)

 

 

(136,448

)

Forfeited

 

 

(5,580

)

 

 

(8,495

)

Nonvested units, end of period

 

 

196,245

 

 

 

381,344

 

 

The following table presents information regarding compensation expense for units under the Stock Plan for the periods presented ($ in thousands):

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Performance units

 

$

568

 

 

$

514

 

 

$

1,578

 

 

$

1,538

 

Time-vested units

 

 

1,343

 

 

 

779

 

 

 

4,912

 

 

 

3,413

 

Total compensation expense

 

$

1,911

 

 

$

1,293

 

 

$

6,490

 

 

$

4,951

 

 

Note 11 – Contingencies

Lending Related

Trustmark makes commitments to extend credit and issues standby and commercial letters of credit (letters of credit) in the normal course of business in order to fulfill the financing needs of its customers. The carrying amount of commitments to extend credit and letters of credit approximates the fair value of such financial instruments.

Commitments to extend credit are agreements to lend money to customers pursuant to certain specified conditions. Commitments generally have fixed expiration dates or other termination clauses. Because many of these commitments are expected to expire without being fully drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The exposure to credit loss in the event of nonperformance by the other party to the commitments to extend credit is represented by the contract amount of those instruments. Trustmark applies the same credit policies and standards as it does in the lending process when making these commitments. The collateral obtained is based upon the nature of the transaction and the assessed creditworthiness of the borrower. At September 30, 2026 and 2025, Trustmark had unused commitments to extend credit of $4.659 billion and $4.410 billion, respectively.

Letters of credit are conditional commitments issued by Trustmark to insure the performance of a customer to a third-party. A financial standby letter of credit irrevocably obligates Trustmark to pay a third-party beneficiary when a customer fails to repay an outstanding loan or debt instrument. A performance standby letter of credit irrevocably obligates Trustmark to pay a third-party beneficiary when a customer fails to perform some contractual, nonfinancial obligation. When issuing letters of credit, Trustmark uses the same policies regarding credit risk and collateral, which are followed in the lending process. At September 30, 2026 and 2025, Trustmark’s maximum exposure to credit loss in the event of nonperformance by the customer for letters of credit was $181.0 million and $142.5 million, respectively. These amounts consist primarily of commitments with maturities of less than three years, which have an immaterial carrying value. Trustmark holds collateral to support standby letters of credit when deemed necessary.

ACL on Off-Balance Sheet Credit Exposures

Trustmark maintains a separate ACL on off-balance sheet credit exposures, including unfunded loan commitments and letters of credit, which is included on the accompanying consolidated balance sheets as of September 30, 2026 and December 31, 2025.

43

 

 

Management utilizes a performance trends qualitative factor for unfunded commitments. The same assumptions are applied in this calculation that the funded balances utilize with the addition of using the funding rates on the unfunded commitments. The performance trends qualitative factor reserve is then added to the other calculated reserve to get a total reserve for off-balance sheet credit exposures.

 

During 2024, Management implemented the External Factor – Credit Quality Review qualitative factor for unfunded commitments. The same assumptions were applied in this calculation that the funded balances utilized with the addition of using the funding rates on the unfunded commitments. The External Factor – Credit Quality Review qualitative factor reserve was then added to the other calculated reserve to get a total reserve for off-balance sheet credit exposures. During the third quarter of 2025, Management determined that the risk related to delayed identification and downgrading of commercial loans had sufficiently diminished and, as a result, resolved the External Factor – Credit Quality Review qualitative factor and released the associated reserves.

Changes in the ACL on off-balance sheet credit exposures were as follows for the periods presented ($ in thousands):

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Balance at beginning of period

 

$

27,534

 

 

$

25,891

 

 

$

27,951

 

 

$

29,392

 

PCL, off-balance sheet credit exposures

 

 

1,085

 

 

 

295

 

 

 

668

 

 

 

(3,206

)

Balance at end of period

 

$

28,619

 

 

$

26,186

 

 

$

28,619

 

 

$

26,186

 

Adjustments to the ACL on off-balance sheet credit exposures are recorded to PCL, off-balance sheet credit exposures. The increase in the ACL on off-balance sheet credit exposures for the three months ended September 30, 2026 was primarily due to an increase in unfunded commitments coupled with an increase in the quantitative reserve rates related to changes in the macroeconomic forecasts. The increase in the ACL on off-balance sheet credit exposures for the nine months ended September 30, 2026 was primarily due to an increase in the quantitative reserve rates related to changes to the macroeconomic forecasts and the utilization rates for unfunded commitments partially offset by positive credit migration.

The increase in the ACL on off-balance sheet credit exposures for the three months ended September 30, 2025 was primarily due to an increase in unfunded commitments and changes to the macroeconomic forecast and was partially offset by adjustments to the qualitative factors. The decrease in the ACL on off-balance sheet credit exposures for the nine months ended September 30, 2025 was primarily due to the decrease in required reserves as a result of a decrease in unfunded commitments coupled with positive credit migration.

No credit loss estimate is reported for off-balance sheet credit exposures that are unconditionally cancellable by Trustmark or for undrawn amounts under such arrangements that may be drawn prior to the cancellation of the arrangement.

Legal Proceedings

Trustmark and its subsidiaries are parties to lawsuits and other claims that arise in the ordinary course of business. Some of the lawsuits assert claims related to the lending, collection, servicing, investment, trust and other business activities, and some of the lawsuits allege substantial claims for damages.

 

In accordance with FASB ASC Subtopic 450-20, “Loss Contingencies,” Trustmark will establish an accrued liability for any litigation matter if and when such matter presents loss contingencies that are both probable and reasonably estimable. At the present time, Trustmark believes, based on its evaluation and the advice of legal counsel, that a loss in any currently pending legal proceeding is not probable and a reasonable estimate cannot be made.

Note 12 – EPS

The following table reflects weighted-average shares used to calculate basic and diluted EPS for the periods presented (in thousands):

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Basic shares

 

 

57,982

 

 

 

60,299

 

 

 

58,425

 

 

 

60,519

 

Dilutive shares

 

 

242

 

 

 

241

 

 

 

222

 

 

 

229

 

Diluted shares

 

 

58,224

 

 

 

60,540

 

 

 

58,647

 

 

 

60,748

 

 

44

 

 

Weighted-average antidilutive stock awards are excluded in determining diluted EPS. Weighted-average antidilutive stock awards were immaterial for the three and nine months ended September 30, 2026 compared to none for the three and nine months ended September 30, 2025.

Note 13 – Statements of Cash Flows

The following table reflects specific transaction amounts for the periods presented ($ in thousands):

 

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

Income taxes paid

 

$

9,450

 

 

$

40,639

 

Interest expense paid on deposits and borrowings

 

 

206,170

 

 

 

237,425

 

Noncash transfers from loans to other real estate

 

 

5,026

 

 

 

6,754

 

Securities transferred from held to maturity to available for sale

 

 

1,117,981

 

 

 

—

 

Operating right-of-use assets resulting from lease liabilities

 

 

76,182

 

 

 

1,623

 

 

Note 14 – Shareholders’ Equity

Regulatory Capital

Trustmark and TB are subject to minimum risk-based capital and leverage capital requirements, as described in the section captioned “Capital Adequacy” included in Part I. Item 1. – Business of Trustmark’s 2025 Annual Report, which are administered by the federal bank regulatory agencies. These capital requirements, as defined by federal regulations, involve quantitative and qualitative measures of assets, liabilities and certain off-balance sheet instruments. Trustmark’s and TB’s minimum risk-based capital requirements include a capital conservation buffer of 2.50%. Accumulated other comprehensive income (loss), net of tax, is not included in computing regulatory capital. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the financial statements of Trustmark and TB and limit Trustmark’s and TB’s ability to pay dividends. As of September 30, 2026, Trustmark and TB exceeded all applicable minimum capital standards. In addition, Trustmark and TB met applicable regulatory guidelines to be considered well-capitalized at September 30, 2026. To be categorized in this manner, Trustmark and TB maintained, as applicable, minimum common equity Tier 1 risk-based capital, Tier 1 risk-based capital, total risk-based capital and Tier 1 leverage ratios as set forth in the accompanying table, and were not subject to any written agreement, order or capital directive, or prompt corrective action directive issued by their primary federal regulators to meet and maintain a specific capital level for any capital measures. There are no significant conditions or events that have occurred since September 30, 2026, which Management believes have affected Trustmark’s or TB’s present classification.

45

 

The following table provides Trustmark’s and TB’s actual regulatory capital amounts and ratios under regulatory capital standards in effect at September 30, 2026 and December 31, 2025 ($ in thousands):

 

 

Actual

 

 

 

 

 

 

 

 

 

Regulatory Capital

 

 

Minimum

 

 

To Be Well

 

 

 

Amount

 

 

Ratio

 

 

Requirement

 

 

Capitalized

 

At September 30, 2026:

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 Capital (to Risk Weighted Assets)

 

 

 

 

 

 

 

 

 

 

 

 

Trustmark Corporation

 

$

1,890,212

 

 

 

11.98

%

 

 

7.00

%

 

n/a

 

Trustmark Bank

 

 

1,977,423

 

 

 

12.53

%

 

 

7.00

%

 

 

6.50

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Capital (to Risk Weighted Assets)

 

 

 

 

 

 

 

 

 

 

 

 

Trustmark Corporation

 

$

1,950,212

 

 

 

12.36

%

 

 

8.50

%

 

n/a

 

Trustmark Bank

 

 

1,977,423

 

 

 

12.53

%

 

 

8.50

%

 

 

8.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Capital (to Risk Weighted Assets)

 

 

 

 

 

 

 

 

 

 

 

 

Trustmark Corporation

 

$

2,299,364

 

 

 

14.57

%

 

 

10.50

%

 

n/a

 

Trustmark Bank

 

 

2,154,380

 

 

 

13.66

%

 

 

10.50

%

 

 

10.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Leverage (to Average Assets)

 

 

 

 

 

 

 

 

 

 

 

 

Trustmark Corporation

 

$

1,950,212

 

 

 

10.39

%

 

 

4.00

%

 

n/a

 

Trustmark Bank

 

 

1,977,423

 

 

 

10.53

%

 

 

4.00

%

 

 

5.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2025:

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 Capital (to Risk Weighted Assets)

 

 

 

 

 

 

 

 

 

 

 

 

Trustmark Corporation

 

$

1,814,295

 

 

 

11.72

%

 

 

7.00

%

 

n/a

 

Trustmark Bank

 

 

1,908,101

 

 

 

12.33

%

 

 

7.00

%

 

 

6.50

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Capital (to Risk Weighted Assets)

 

 

 

 

 

 

 

 

 

 

 

 

Trustmark Corporation

 

$

1,874,295

 

 

 

12.11

%

 

 

8.50

%

 

n/a

 

Trustmark Bank

 

 

1,908,101

 

 

 

12.33

%

 

 

8.50

%

 

 

8.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Capital (to Risk Weighted Assets)

 

 

 

 

 

 

 

 

 

 

 

 

Trustmark Corporation

 

$

2,231,283

 

 

 

14.41

%

 

 

10.50

%

 

n/a

 

Trustmark Bank

 

 

2,093,123

 

 

 

13.52

%

 

 

10.50

%

 

 

10.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Leverage (to Average Assets)

 

 

 

 

 

 

 

 

 

 

 

 

Trustmark Corporation

 

$

1,874,295

 

 

 

10.18

%

 

 

4.00

%

 

n/a

 

Trustmark Bank

 

 

1,908,101

 

 

 

10.37

%

 

 

4.00

%

 

 

5.00

%

 

Stock Repurchase Program

On December 3, 2024, Trustmark’s Board of Directors authorized a stock repurchase program effective January 1, 2025, under which $100.0 million of Trustmark’s outstanding shares could be acquired through December 31, 2025. Under this authority, Trustmark repurchased 2.2 million shares of its common stock valued at $80.0 million during the twelve months ended December 31, 2025.

On December 2, 2025, Trustmark’s Board of Directors authorized a stock repurchase program effective January 1, 2026, under which $100.0 million of Trustmark’s outstanding shares could be acquired through December 31, 2026. The repurchase program, which is subject to market conditions and management discretion, will be implemented through open market repurchases or privately negotiated transactions. Under this authority, Trustmark repurchased 1.4 million shares of its common stock valued at $60.9 million during the nine months ended September 30, 2026.

46

 

Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss)

The following tables present the net change in the components of accumulated other comprehensive income (loss) and the related tax effects allocated to each component for the periods presented ($ in thousands). The amortization of prior service cost, recognized net loss due to lump sum settlements and change in net actuarial loss are included in the computation of net periodic benefit cost (see Note 9 – Defined Benefit and Other Postretirement Benefits for additional details). Reclassification adjustments related to pension and other postretirement benefit plans are included in salaries and employee benefits and other expense in the accompanying consolidated statements of income. Reclassification adjustments related to the cash flow hedge derivatives are included in interest and fees on LHFS and LHFI in the accompanying consolidated statements of income.

 

 

 

Three Months Ended September 30, 2026

 

 

Three Months Ended September 30, 2025

 

 

 

Before Tax
Amount

 

 

Tax (Expense)
Benefit

 

 

Net of Tax
Amount

 

 

Before Tax
Amount

 

 

Tax (Expense)
Benefit

 

 

Net of Tax
Amount

 

Securities available for sale and transferred
   securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized holding gains (losses) arising
   during the period

 

$

(176,162

)

 

$

44,040

 

 

$

(132,122

)

 

$

9,714

 

 

$

(2,428

)

 

$

7,286

 

Reclassification adjustment for net (gains) losses
   realized in net income

 

 

61,511

 

 

 

(15,378

)

 

 

46,133

 

 

 

—

 

 

 

—

 

 

 

—

 

Change in net unrealized holding loss on
   securities transferred to held to maturity

 

 

33,253

 

 

 

(8,313

)

 

 

24,940

 

 

 

3,422

 

 

 

(855

)

 

 

2,567

 

Total securities available for sale
   and transferred securities

 

 

(81,398

)

 

 

20,349

 

 

 

(61,049

)

 

 

13,136

 

 

 

(3,283

)

 

 

9,853

 

Pension and other postretirement benefit plans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reclassification adjustments for changes
   realized in net income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in prior service costs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4

 

 

 

(2

)

 

 

2

 

Recognized net loss due to lump sum
   settlements

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(29

)

 

 

8

 

 

 

(21

)

Change in net actuarial loss

 

 

73

 

 

 

(18

)

 

 

55

 

 

 

61

 

 

 

(15

)

 

 

46

 

Total pension and other postretirement
   benefit plans

 

 

73

 

 

 

(18

)

 

 

55

 

 

 

36

 

 

 

(9

)

 

 

27

 

Cash flow hedge derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in accumulated gain (loss) on effective
   cash flow hedge derivatives

 

 

(19,932

)

 

 

4,983

 

 

 

(14,949

)

 

 

(822

)

 

 

205

 

 

 

(617

)

Reclassification adjustment for (gain) loss
   realized in net income

 

 

675

 

 

 

(169

)

 

 

506

 

 

 

2,462

 

 

 

(616

)

 

 

1,846

 

Total cash flow hedge derivatives

 

 

(19,257

)

 

 

4,814

 

 

 

(14,443

)

 

 

1,640

 

 

 

(411

)

 

 

1,229

 

Total other comprehensive income (loss)

 

$

(100,582

)

 

$

25,145

 

 

$

(75,437

)

 

$

14,812

 

 

$

(3,703

)

 

$

11,109

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

47

 

 

 

 

Nine Months Ended September 30, 2026

 

 

Nine Months Ended September 30, 2025

 

 

 

Before Tax
Amount

 

 

Tax (Expense)
Benefit

 

 

Net of Tax
Amount

 

 

Before Tax
Amount

 

 

Tax (Expense)
Benefit

 

 

Net of Tax
Amount

 

Securities available for sale and transferred
   securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized holding gains (losses) arising
   during the period

 

$

(207,883

)

 

$

51,971

 

 

$

(155,912

)

 

$

56,305

 

 

$

(14,076

)

 

$

42,229

 

Reclassification adjustment for net (gains) losses
   realized in net income

 

 

61,511

 

 

 

(15,378

)

 

 

46,133

 

 

 

—

 

 

 

—

 

 

 

—

 

Change in net unrealized holding loss on
   securities transferred to held to maturity

 

 

38,812

 

 

 

(9,703

)

 

 

29,109

 

 

 

10,297

 

 

 

(2,574

)

 

 

7,723

 

Total securities available for sale
   and transferred securities

 

 

(107,560

)

 

 

26,890

 

 

 

(80,670

)

 

 

66,602

 

 

 

(16,650

)

 

 

49,952

 

Pension and other postretirement benefit plans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reclassification adjustments for changes
   realized in net income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in prior service costs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

11

 

 

 

(3

)

 

 

8

 

Recognized net loss due to lump sum
   settlements

 

 

(31

)

 

 

8

 

 

 

(23

)

 

 

(79

)

 

 

20

 

 

 

(59

)

Change in net actuarial loss

 

 

231

 

 

 

(58

)

 

 

173

 

 

 

193

 

 

 

(48

)

 

 

145

 

Total pension and other postretirement
   benefit plans

 

 

200

 

 

 

(50

)

 

 

150

 

 

 

125

 

 

 

(31

)

 

 

94

 

Cash flow hedge derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in accumulated gain (loss) on effective
   cash flow hedge derivatives

 

 

(33,847

)

 

 

8,462

 

 

 

(25,385

)

 

 

11,155

 

 

 

(2,789

)

 

 

8,366

 

Reclassification adjustment for (gain) loss
   realized in net income

 

 

2,415

 

 

 

(604

)

 

 

1,811

 

 

 

7,823

 

 

 

(1,956

)

 

 

5,867

 

Total cash flow hedge derivatives

 

 

(31,432

)

 

 

7,858

 

 

 

(23,574

)

 

 

18,978

 

 

 

(4,745

)

 

 

14,233

 

Total other comprehensive income (loss)

 

$

(138,792

)

 

$

34,698

 

 

$

(104,094

)

 

$

85,705

 

 

$

(21,426

)

 

$

64,279

 

The following table presents the changes in the balances of each component of accumulated other comprehensive income (loss) for the periods presented ($ in thousands). All amounts are presented net of tax.

 

Securities
Available for Sale
and Transferred
Securities

 

 

Defined
Benefit
Pension Items

 

 

Cash Flow
Hedge
Derivatives

 

 

Total

 

Balance at January 1, 2026

$

(10,518

)

 

$

(5,169

)

 

$

2,062

 

 

$

(13,625

)

Other comprehensive income (loss) before
   reclassification

 

(126,803

)

 

 

—

 

 

 

(25,385

)

 

 

(152,188

)

Amounts reclassified from accumulated other
   comprehensive income (loss)

 

46,133

 

 

 

150

 

 

 

1,811

 

 

 

48,094

 

Net other comprehensive income (loss)

 

(80,670

)

 

 

150

 

 

 

(23,574

)

 

 

(104,094

)

Balance at September 30, 2026

$

(91,188

)

 

$

(5,019

)

 

$

(21,512

)

 

$

(117,719

)

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2025

$

(66,885

)

 

$

(4,721

)

 

$

(12,053

)

 

$

(83,659

)

Other comprehensive income (loss) before
   reclassification

 

49,952

 

 

 

—

 

 

 

8,366

 

 

 

58,318

 

Amounts reclassified from accumulated other
   comprehensive income (loss)

 

—

 

 

 

94

 

 

 

5,867

 

 

 

5,961

 

Net other comprehensive income (loss)

 

49,952

 

 

 

94

 

 

 

14,233

 

 

 

64,279

 

Balance at September 30, 2025

$

(16,933

)

 

$

(4,627

)

 

$

2,180

 

 

$

(19,380

)

 

48

 

Note 15 – Fair Value

Financial Instruments Measured at Fair Value

The methodologies Trustmark uses in determining the fair values are based primarily on the use of independent, market-based data to reflect a value that would be reasonably expected upon exchange of the position in an orderly transaction between market participants at the measurement date. The predominant portion of assets that are stated at fair value are of a nature that can be valued using prices or inputs that are readily observable through a variety of independent data providers. The providers selected by Trustmark for fair valuation data are widely recognized and accepted vendors whose evaluations support the pricing functions of financial institutions, investment and mutual funds, and portfolio managers. Trustmark has documented and evaluated the pricing methodologies used by the vendors and maintains internal processes that regularly test valuations for anomalies.

Trustmark utilizes an independent pricing service to advise it on the carrying value of the securities available for sale portfolio. As part of Trustmark’s procedures, the price provided from the service is evaluated for reasonableness given market changes. When a questionable price exists, Trustmark investigates further to determine if the price is valid. If needed, other market participants may be utilized to determine the correct fair value. Trustmark has also reviewed and confirmed its determinations in thorough discussions with the pricing source regarding their methods of price discovery.

Mortgage loan commitments are valued based on the securities prices of similar collateral, term, rate and delivery for which the loan is eligible to deliver in place of the particular security. Trustmark acquires a broad array of mortgage security prices that are supplied by a market data vendor, which in turn accumulates prices from a broad list of securities dealers. Prices are processed through a mortgage pipeline management system that accumulates and segregates all loan commitment and forward-sale transactions according to the similarity of various characteristics (maturity, term, rate, and collateral). Prices are matched to those positions that are deemed to be an eligible substitute or offset (i.e., “deliverable”) for a corresponding security observed in the marketplace.

Trustmark estimates the fair value of the MSR through the use of prevailing market participant assumptions and market participant valuation processes. This valuation is periodically tested and validated against other third-party firm valuations.

Trustmark obtains the fair value of interest rate swaps from a third-party pricing service that uses an industry standard discounted cash flow methodology. In addition, credit valuation adjustments are incorporated in the fair values to account for potential nonperformance risk. In adjusting the fair value of its interest rate swap contracts for the effect of nonperformance risk, Trustmark has considered any applicable credit enhancements such as collateral postings, thresholds, mutual puts, and guarantees. In conjunction with the FASB’s fair value measurement guidance, Trustmark made an accounting policy election to measure the credit risk of these derivative financial instruments, which are subject to master netting agreements, on a net basis by counterparty portfolio.

Trustmark has determined that the majority of the inputs used to value its interest rate swaps offered to qualified commercial borrowers fall within Level 2 of the fair value hierarchy, while the credit valuation adjustments associated with these derivatives utilize Level 3 inputs, such as estimates of current credit spreads. Trustmark has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its interest rate swaps and has determined that the credit valuation adjustment is not significant to the overall valuation of these derivatives. As a result, Trustmark classifies its interest rate swap valuations in Level 2 of the fair value hierarchy.

Trustmark also utilizes 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 the MSR attributable to interest rates. Fair values of these derivative instruments are determined from quoted prices in active markets for identical assets therefore allowing them to be classified within Level 1 of the fair value hierarchy. In addition, Trustmark utilizes derivative instruments such as interest rate lock commitments in its mortgage banking area which lack observable inputs for valuation purposes resulting in their inclusion in Level 3 of the fair value hierarchy.

At this time, Trustmark presents no fair values that are derived through internal modeling. Should positions requiring fair valuation arise that are not relevant to existing methodologies, Trustmark will make every reasonable effort to obtain market participant assumptions, or independent evaluation.

49

 

Financial Assets and Liabilities

The following tables summarize financial assets and financial liabilities measured at fair value on a recurring basis at September 30, 2026 and December 31, 2025, segregated by the level of valuation inputs within the fair value hierarchy utilized to measure fair value ($ in thousands). There were no transfers between fair value levels for the nine months ended September 30, 2026 and the year ended December 31, 2025.

 

 

September 30, 2026

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

U.S. Treasury securities

 

$

202,689

 

 

$

202,689

 

 

$

—

 

 

$

—

 

U.S. Government agency obligations

 

 

67,097

 

 

 

—

 

 

 

67,097

 

 

 

—

 

Mortgage-backed securities

 

 

2,698,541

 

 

 

—

 

 

 

2,698,541

 

 

 

—

 

Securities available for sale

 

 

2,968,327

 

 

 

202,689

 

 

 

2,765,638

 

 

 

—

 

LHFS

 

 

245,564

 

 

 

—

 

 

 

245,564

 

 

 

—

 

MSR

 

 

158,081

 

 

 

—

 

 

 

—

 

 

 

158,081

 

Other assets

 

 

24,441

 

 

 

11

 

 

 

24,430

 

 

 

—

 

Other liabilities

 

 

69,032

 

 

 

8,848

 

 

 

59,742

 

 

 

442

 

 

 

 

December 31, 2025

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

U.S. Treasury securities

 

$

208,948

 

 

$

208,948

 

 

$

—

 

 

$

—

 

U.S. Government agency obligations

 

 

70,849

 

 

 

—

 

 

 

70,849

 

 

 

—

 

Mortgage-backed securities

 

 

1,597,033

 

 

 

—

 

 

 

1,597,033

 

 

 

—

 

Securities available for sale

 

 

1,876,830

 

 

 

208,948

 

 

 

1,667,882

 

 

 

—

 

LHFS

 

 

278,789

 

 

 

—

 

 

 

278,789

 

 

 

—

 

MSR

 

 

131,289

 

 

 

—

 

 

 

—

 

 

 

131,289

 

Other assets

 

 

16,235

 

 

 

11

 

 

 

15,226

 

 

 

998

 

Other liabilities

 

 

22,832

 

 

 

1,708

 

 

 

21,124

 

 

 

—

 

 

The changes in Level 3 assets measured at fair value on a recurring basis for the nine months ended September 30, 2026 and 2025 are summarized as follows ($ in thousands):

 

 

MSR

 

 

Other Assets -
Derivatives

 

Balance, January 1, 2026

 

$

131,289

 

 

$

998

 

Total net (loss) gain included in Mortgage banking, net (1)

 

 

10,947

 

 

 

1,006

 

Additions

 

 

15,845

 

 

 

—

 

Sales

 

 

—

 

 

 

(2,446

)

Balance, September 30, 2026

 

$

158,081

 

 

$

(442

)

 

 

 

 

 

 

 

The amount of total gains (losses) for the period included in earnings
   that are attributable to the change in unrealized gains or
   losses still held at September 30, 2026

 

$

21,457

 

 

$

2,669

 

 

 

 

 

 

 

 

Balance, January 1, 2025

 

$

139,317

 

 

$

229

 

Total net (loss) gain included in Mortgage banking, net (1)

 

 

(18,494

)

 

 

3,498

 

Additions

 

 

10,853

 

 

 

—

 

Sales

 

 

—

 

 

 

(2,387

)

Balance, September 30, 2025

 

$

131,676

 

 

$

1,340

 

 

 

 

 

 

 

 

The amount of total gains (losses) for the period included in
   earnings that are attributable to the change in unrealized
   gains or losses still held at September 30, 2025

 

$

(9,395

)

 

$

4,021

 

 

(1)
Total net (loss) gain included in Mortgage banking, net relating to the MSR includes changes in fair value due to market changes and due to run-off.

50

 

Trustmark may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. Assets at September 30, 2026, which have been measured at fair value on a nonrecurring basis, include collateral-dependent LHFI. A loan is collateral dependent when the borrower is experiencing financial difficulty and repayment of the loan is expected to be provided substantially through the sale of the collateral. The expected credit loss for collateral-dependent loans is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral, adjusted for the estimated cost to sell. Fair value estimates for collateral-dependent loans are derived from appraised values based on the current market value or as is value of the collateral, normally from recently received and reviewed appraisals. Current appraisals are ordered on an annual basis based on the inspection date or more often if market conditions necessitate. Appraisals are obtained from state-certified appraisers and are based on certain assumptions, which may include construction or development status and the highest and best use of the property. These appraisals are reviewed by Trustmark’s Appraisal Review Department to ensure they are acceptable, and values are adjusted down for costs associated with asset disposal. At September 30, 2026, Trustmark had outstanding balances of $29.9 million with a related ACL of $11.3 million in collateral-dependent LHFI, compared to outstanding balances of $24.9 million with a related ACL of $1.2 million in collateral-dependent LHFI at December 31, 2025. The collateral-dependent LHFI are classified as Level 3 in the fair value hierarchy.

Nonfinancial Assets and Liabilities

Certain nonfinancial assets measured at fair value on a nonrecurring basis include foreclosed assets (upon initial recognition or subsequent impairment), nonfinancial assets and nonfinancial liabilities measured at fair value in the second step of a goodwill impairment test, and intangible assets and other nonfinancial long-lived assets measured at fair value for impairment assessment.

Other real estate includes assets that have been acquired in satisfaction of debt through foreclosure and is recorded at the fair value less cost to sell (estimated fair value) at the time of foreclosure. Fair value is based on independent appraisals and other relevant factors. In the determination of fair value subsequent to foreclosure, Management also considers other factors or recent developments, such as changes in market conditions from the time of valuation and anticipated sales values considering plans for disposition, which could result in an adjustment to lower the collateral value estimates indicated in the appraisals. Periodic revaluations are classified as Level 3 in the fair value hierarchy since assumptions are used that may not be observable in the market.

Foreclosed assets of $1.2 million were remeasured during the first nine months of 2026, requiring write-downs of $285 thousand to reach their current fair values compared to $2.7 million of foreclosed assets that were remeasured during the first nine months of 2025, requiring write-downs of $502 thousand.

Fair Value of Financial Instruments

FASB ASC Topic 825, “Financial Instruments,” requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis.

The carrying amounts and estimated fair values of financial instruments at September 30, 2026 and December 31, 2025, are as follows ($ in thousands):

 

 

September 30, 2026

 

 

December 31, 2025

 

 

 

Carrying
Value

 

 

Estimated
Fair Value

 

 

Carrying
Value

 

 

Estimated
Fair Value

 

Financial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Level 2 Inputs:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and short-term investments

 

$

710,165

 

 

$

710,165

 

 

$

668,007

 

 

$

668,007

 

Securities held to maturity

 

 

—

 

 

 

—

 

 

 

1,207,454

 

 

 

1,180,569

 

Level 3 Inputs:

 

 

 

 

 

 

 

 

 

 

 

 

Net LHFI

 

 

13,720,833

 

 

 

13,599,536

 

 

 

13,517,162

 

 

 

13,544,873

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Level 2 Inputs:

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

16,058,060

 

 

 

16,042,529

 

 

 

15,499,784

 

 

 

15,494,681

 

Federal funds purchased and securities sold under
   repurchase agreements

 

 

205,000

 

 

 

205,000

 

 

 

445,000

 

 

 

445,000

 

Other borrowings

 

 

136,301

 

 

 

136,301

 

 

 

364,762

 

 

 

364,762

 

Subordinated notes

 

 

172,195

 

 

 

168,875

 

 

 

171,966

 

 

 

176,750

 

Junior subordinated debt securities

 

 

61,856

 

 

 

52,887

 

 

 

61,856

 

 

 

52,964

 

 

51

 

 

Fair Value Option

Trustmark has elected to account for its LHFS under the fair value option, with interest income on these LHFS reported in interest and fees on LHFS and LHFI. The fair value of the LHFS is determined using quoted prices for a similar asset, adjusted for specific attributes of that loan. The LHFS are actively managed and monitored and certain market risks of the loans may be mitigated through the use of derivatives. These derivative instruments are carried at fair value with changes in fair value recorded as noninterest income in mortgage banking, net. The changes in the fair value of LHFS are largely offset by changes in the fair value of the derivative instruments. For the three and nine months ended September 30, 2026, net losses of $4.5 million and $4.8 million, respectively, were recorded as noninterest income in mortgage banking, net for changes in the fair value of LHFS accounted for under the fair value option, compared to a net loss of $207 thousand and a net gain of $1.2 million for the three and nine months ended September 30, 2025, respectively. Interest and fees on LHFS and LHFI for the three and nine months ended September 30, 2026 included $2.9 million and $8.3 million, respectively, of interest earned on LHFS accounted for under the fair value option, compared to $2.4 million and $6.8 million for the three and nine months ended September 30, 2025, respectively. Election of the fair value option allows Trustmark to reduce the accounting volatility that would otherwise result from the asymmetry created by accounting for the financial instruments at the lower of cost or fair value and the derivatives at fair value. The fair value option election does not apply to GNMA optional repurchase loans which do not meet the requirements under FASB ASC Topic 825 to be accounted for under the fair value option. GNMA optional repurchase loans totaled $133.2 million and $136.3 million at September 30, 2026 and December 31, 2025, respectively, and are included in LHFS on the accompanying consolidated balance sheets. For additional information regarding GNMA optional repurchase loans, please see the section captioned “Past Due LHFS” included in Note 3 – LHFI and ACL, LHFI.

The following table provides information about the fair value and the contractual principal outstanding of the LHFS accounted for under the fair value option at September 30, 2026 and December 31, 2025 ($ in thousands):

 

 

 

September 30, 2026

 

 

December 31, 2025

 

Fair value of LHFS

 

$

112,367

 

 

$

142,485

 

LHFS contractual principal outstanding

 

 

115,159

 

 

 

143,832

 

Fair value less unpaid principal

 

$

(2,792

)

 

$

(1,347

)

 

Note 16 – Derivative Financial Instruments

Derivatives Designated as Hedging Instruments

Trustmark engages in a cash flow hedging program to add stability to interest income and to manage its exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for Trustmark making variable-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate floor spreads designated as cash flow hedges involve the receipt of variable-rate amounts if interest rates fall below the purchased floor strike rate on the contract and payments of variable-rate amounts if interest rates fall below the sold floor strike rate on the contract. Trustmark uses such derivatives to hedge the variable cash flows associated with existing and anticipated variable-rate loan assets. At both September 30, 2026 and December 31, 2025, the aggregate notional value of Trustmark's interest rate swaps and floor spreads designated as cash flow hedges totaled $1.630 billion.

Trustmark records any gains or losses on these cash flow hedges in accumulated other comprehensive income (loss). Gains and losses on derivatives representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with Trustmark’s accounting policy election. The earnings recognition of excluded components included in interest and fees on LHFS and LHFI totaled $119 thousand and $360 thousand of amortization expense for the three and nine months ended September 30, 2026, respectively, compared to $132 thousand and $393 thousand of amortization expense for the three and nine months ended September 30, 2025, respectively. As interest payments are received on Trustmark's variable-rate assets, amounts reported in accumulated other comprehensive income (loss) are reclassified into interest and fees on LHFS and LHFI in the accompanying consolidated statements of income during the same period. During the next twelve months, Trustmark estimates that $7.9 million will be reclassified as a reduction to interest and fees on LHFS and LHFI. This amount could differ due to changes in interest rates, hedge de-designations or the addition of other hedges.

52

 

Derivatives not Designated as Hedging Instruments

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 economically hedges changes in the fair value of the MSR attributable to interest rates. These transactions are considered freestanding derivatives that do not otherwise qualify for hedge accounting. The total notional amount of these derivative instruments was $301.0 million at September 30, 2026 compared to $345.5 million at December 31, 2025. Changes in the fair value of these exchange-traded derivative instruments are recorded as noninterest income in mortgage banking, net and are offset by changes in the fair value of the MSR. The impact of this strategy resulted in a net positive ineffectiveness of $283 thousand and a net negative ineffectiveness of $858 thousand for the three months ended September 30, 2026 and 2025, respectively. For the nine months ended September 30, 2026 and 2025, the impact was a net positive ineffectiveness of $386 thousand and a net negative ineffectiveness of $2.0 million, respectively.

As part of Trustmark’s risk management strategy in the mortgage banking area, derivative instruments such as forward sales contracts are utilized. Trustmark’s obligations under forward sales contracts consist of commitments to deliver mortgage loans, originated and/or purchased, in the secondary market at a future date. Changes in the fair value of these derivative instruments are recorded as noninterest income in mortgage banking, net and are offset by changes in the fair value of LHFS. Trustmark’s off-balance sheet obligations under these derivative instruments totaled $157.0 million at September 30, 2026, with a positive valuation adjustment of $4.3 million, compared to $152.0 million, with a negative valuation adjustment of $287 thousand, at December 31, 2025.

Trustmark also utilizes derivative instruments such as interest rate lock commitments in its mortgage banking area. Interest rate lock commitments are residential mortgage loan commitments with customers, which guarantee a specified interest rate for a specified time period. Changes in the fair value of these derivative instruments are recorded as noninterest income in mortgage banking, net and are offset by the changes in the fair value of forward sales contracts. Trustmark’s off-balance sheet obligations under these derivative instruments totaled $70.6 million at September 30, 2026, with a negative valuation adjustment of $442 thousand, compared to $74.5 million, with a positive valuation adjustment of $998 thousand, at December 31, 2025.

Trustmark offers certain derivatives products directly to qualified commercial lending clients seeking to manage their interest rate risk. Trustmark economically hedges interest rate swap transactions executed with commercial lending clients by entering into offsetting interest rate swap transactions with institutional derivatives market participants. Derivatives transactions executed as part of this program are not designated as qualifying hedging relationships and are, therefore, carried at fair value with the change in fair value recorded as noninterest income in bank card and other fees. Because these derivatives have mirror-image contractual terms, in addition to collateral provisions which mitigate the impact of non-performance risk, the changes in fair value are expected to substantially offset. The offsetting interest rate swap transactions are either cleared through the Chicago Mercantile Exchange for clearable transactions or booked directly with institutional derivatives market participants for non-clearable transactions. The Chicago Mercantile Exchange rules legally characterize variation margin collateral payments made or received for centrally cleared interest rate swaps as settlements rather than collateral. As a result, centrally cleared interest rate swaps included in other assets and other liabilities are presented on a net basis in the accompanying consolidated balance sheets. At September 30, 2026, Trustmark had interest rate swaps with an aggregate notional amount of $1.940 billion related to this program, compared to $1.991 billion at December 31, 2025.

Credit-risk-related Contingent Features

Trustmark has agreements with its financial institution counterparties that contain provisions where if Trustmark defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then Trustmark could also be declared in default on its derivatives obligations.

At September 30, 2026, the termination value of interest rate swaps in a liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements totaled $13.0 million compared to $117 thousand at December 31, 2025. At September 30, 2026 and December 31, 2025, Trustmark had posted collateral of $13.5 million and $2.2 million, respectively, against its obligations because of negotiated thresholds and minimum transfer amounts under these agreements. If Trustmark had breached any of these triggering provisions at September 30, 2026, it could have been required to settle its obligations under the agreements at the termination value.

53

 

Credit risk participation agreements arise when Trustmark contracts with other financial institutions, as a guarantor or beneficiary, to share credit risk associated with certain interest rate swaps. These agreements provide for reimbursement of losses resulting from a third-party default on the underlying swap. At September 30, 2026, Trustmark had entered into nine risk participation agreements as a beneficiary with an aggregate notional amount of $88.3 million compared to ten risk participation agreements as a beneficiary with an aggregate notional amount of $113.7 million at December 31, 2025. At September 30, 2026, Trustmark had entered into twenty-five risk participation agreements as a guarantor with an aggregate notional amount of $325.4 million compared to twenty-seven risk participation agreements as a guarantor with an aggregate notional amount of $267.9 million at December 31, 2025. The aggregate fair values of these risk participation agreements were immaterial at both September 30, 2026 and December 31, 2025.

Tabular Disclosures

The following tables disclose the fair value of derivative instruments in Trustmark’s consolidated balance sheets at September 30, 2026 and December 31, 2025 as well as the effect of these derivative instruments on Trustmark’s results of operations for the periods presented ($ in thousands):

 

 

September 30, 2026

 

 

December 31, 2025

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

Interest rate contracts:

 

 

 

 

 

 

Interest rate swaps included in other assets (1)

 

$

2

 

 

$

3,890

 

Interest rate floors included in other assets

 

 

279

 

 

 

1,673

 

Interest rate swaps included in other liabilities (1)

 

 

26,594

 

 

 

611

 

 

 

 

 

 

 

 

Derivatives not designated as hedging instruments:

 

 

 

 

 

 

Interest rate contracts:

 

 

 

 

 

 

Exchange traded purchased options included in other assets

 

$

11

 

 

$

11

 

Over-the-counter written options (rate locks) included in other assets

 

 

—

 

 

 

998

 

Forward contracts included in other assets

 

 

4,348

 

 

 

—

 

Interest rate swaps included in other assets (1)

 

 

19,795

 

 

 

9,654

 

Credit risk participation agreements included in other assets

 

 

6

 

 

 

9

 

Over-the-counter written options (rate locks) included in other liabilities

 

 

442

 

 

 

—

 

Futures contracts included in other liabilities

 

 

8,371

 

 

 

1,661

 

Forward contracts included in other liabilities

 

 

—

 

 

 

287

 

Exchange traded written options included in other liabilities

 

 

477

 

 

 

47

 

Interest rate swaps included in other liabilities (1)

 

 

33,123

 

 

 

20,098

 

Credit risk participation agreements included in other liabilities

 

 

25

 

 

 

128

 

 

(1)
In accordance with GAAP, the variation margin collateral payments made or received for interest rate swaps that are centrally cleared are legally characterized as settled. As a result, the centrally cleared interest rate swaps included in other assets and other liabilities are presented on a net basis in the accompanying consolidated balance sheets.

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

Amount of gain (loss) reclassified from accumulated other
   comprehensive income (loss) and recognized in
   interest and fees on LHFS and LHFI

 

$

(675

)

 

$

(2,462

)

 

$

(2,415

)

 

$

(7,823

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives not designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

Amount of gain (loss) recognized in mortgage banking, net

 

$

(11,017

)

 

$

1,076

 

 

$

(17,876

)

 

$

7,633

 

Amount of gain (loss) recognized in bank card and other fees

 

 

(11

)

 

 

196

 

 

 

554

 

 

 

560

 

 

The following table discloses the amount included in other comprehensive income (loss), net of tax, for derivative instruments designated as cash flow hedges for the periods presented ($ in thousands):

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

Amount of gain (loss) recognized in other comprehensive
   income (loss), net of tax

 

$

(14,949

)

 

$

(617

)

 

$

(25,385

)

 

$

8,366

 

 

54

 

 

Trustmark’s interest rate swap derivative instruments are subject to master netting agreements, and therefore, eligible for offsetting in the consolidated balance sheets. Trustmark has elected to not offset any derivative instruments in its consolidated balance sheets. Information about financial instruments that are eligible for offset in the consolidated balance sheets as of September 30, 2026 and December 31, 2025 is presented in the following tables ($ in thousands):

 

Offsetting of Derivative Assets

 

 

As of September 30, 2026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Amounts Not Offset in the
Statement of Financial Position

 

 

 

 

 

 

Gross
Amounts of
Recognized
Assets

 

 

Gross Amounts
Offset in the
Statement of
Financial Position

 

 

Net Amounts of
Assets presented in
the Statement of
Financial Position

 

 

Financial
Instruments

 

 

Cash Collateral
Received

 

 

Net Amount

 

Derivatives

 

$

20,076

 

 

$

—

 

 

$

20,076

 

 

$

(13,591

)

 

$

(2,000

)

 

$

4,485

 

 

Offsetting of Derivative Liabilities

 

 

As of September 30, 2026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Amounts Not Offset in the
Statement of Financial Position

 

 

 

 

 

 

Gross
Amounts of
Recognized
Liabilities

 

 

Gross Amounts
Offset in the
Statement of
Financial Position

 

 

Net Amounts of
Liabilities presented
in the Statement of
Financial Position

 

 

Financial
Instruments

 

 

Cash Collateral
Posted

 

 

Net Amount

 

Derivatives

 

$

59,717

 

 

$

—

 

 

$

59,717

 

 

$

(13,591

)

 

$

(13,540

)

 

$

32,586

 

 

Offsetting of Derivative Assets

 

 

As of December 31, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Amounts Not Offset in the
Statement of Financial Position

 

 

 

 

 

 

Gross
Amounts of
Recognized
Assets

 

 

Gross Amounts
Offset in the
Statement of
Financial Position

 

 

Net Amounts of
Assets presented in
the Statement of
Financial Position

 

 

Financial
Instruments

 

 

Cash Collateral
Received

 

 

Net Amount

 

Derivatives

 

$

15,217

 

 

$

—

 

 

$

15,217

 

 

$

(6,271

)

 

$

(1,380

)

 

$

7,566

 

 

Offsetting of Derivative Liabilities

 

 

As of December 31, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Amounts Not Offset in the
Statement of Financial Position

 

 

 

 

 

 

Gross
Amounts of
Recognized
Liabilities

 

 

Gross Amounts
Offset in the
Statement of
Financial Position

 

 

Net Amounts of
Liabilities presented
in the Statement of
Financial Position

 

 

Financial
Instruments

 

 

Cash Collateral
Posted

 

 

Net Amount

 

Derivatives

 

$

20,709

 

 

$

—

 

 

$

20,709

 

 

$

(6,271

)

 

$

(2,200

)

 

$

12,238

 

 

Note 17 – Segment Information

Trustmark’s management reporting structure includes two segments: General Banking and Wealth Management. For a complete overview of Trustmark’s operating segments, see Note 20 – Segment Information included in Part II. Item 8. – Financial Statements and Supplementary Data, of Trustmark’s 2025 Annual Report.

Trustmark's reportable segments are determined by the Chief Executive Officer (CEO), who is the designated chief operating decision maker (CODM), based upon information provided about Trustmark's products and services offered. The reportable segments are also distinguished by the level of information provided to the CEO, who uses such information to review performance of various lines of business, which are then aggregated if operating performance, products and services and customers are similar. The CEO evaluates the financial performance of Trustmark's lines of business, such as evaluating revenue streams, significant expenses and budget to actual results, in assessing the performance of Trustmark's reportable segments and in the determination of allocating resources.

The accounting policies of each reportable segment are the same as those of Trustmark except for its internal allocations. Noninterest expenses for back-office operations support are allocated to segments based on estimated uses of those services. Trustmark measures the net interest income of its business segments with a process that assigns cost of funds or earnings credit on a matched-term basis. This process, called “funds transfer pricing”, charges an appropriate cost of funds to assets held by a business unit, or credits the business

55

 

unit for potential earnings for carrying liabilities. The net of these charges and credits flows through to the General Banking Segment, which contains the management team responsible for determining TB’s funding and interest rate risk strategies.

The following tables disclose financial information by reportable segment for the periods presented ($ in thousands):

 

Three Months Ended September 30, 2026

 

General Banking

 

 

Wealth Management

 

 

Consolidated

 

Interest income

 

$

237,648

 

 

$

3,267

 

 

$

240,915

 

Interest expense

 

 

71,832

 

 

 

1,436

 

 

 

73,268

 

Funds transfer pricing, net

 

 

(1,068

)

 

 

1,068

 

 

 

—

 

Net interest income

 

 

164,748

 

 

 

2,899

 

 

 

167,647

 

PCL

 

 

2,262

 

 

 

2

 

 

 

2,264

 

Net interest income after PCL

 

 

162,486

 

 

 

2,897

 

 

 

165,383

 

Service charges on deposit accounts

 

 

10,556

 

 

 

70

 

 

 

10,626

 

Bank card and other fees

 

 

8,132

 

 

 

17

 

 

 

8,149

 

Mortgage banking, net

 

 

7,880

 

 

 

—

 

 

 

7,880

 

Wealth management

 

 

55

 

 

 

11,106

 

 

 

11,161

 

Other, net

 

 

1,595

 

 

 

82

 

 

 

1,677

 

Gain on sale-leaseback, net

 

 

61,518

 

 

 

—

 

 

 

61,518

 

Securities gains (losses), net

 

 

(61,511

)

 

 

—

 

 

 

(61,511

)

Internal allocations

 

 

(136

)

 

 

136

 

 

 

—

 

Noninterest income

 

 

28,089

 

 

 

11,411

 

 

 

39,500

 

Salaries and employee benefits

 

 

68,682

 

 

 

6,002

 

 

 

74,684

 

Services and fees

 

 

29,170

 

 

 

775

 

 

 

29,945

 

Other segment expenses (1)

 

 

29,475

 

 

 

332

 

 

 

29,807

 

Internal allocations

 

 

(1,908

)

 

 

1,908

 

 

 

—

 

Noninterest expense

 

 

125,419

 

 

 

9,017

 

 

 

134,436

 

Income before income taxes

 

 

65,156

 

 

 

5,291

 

 

 

70,447

 

Income taxes

 

 

11,048

 

 

 

1,325

 

 

 

12,373

 

Consolidated net income

 

$

54,108

 

 

$

3,966

 

 

$

58,074

 

 

 

 

 

 

 

 

 

 

 

Selected Financial Information

 

 

 

 

 

 

 

 

 

Total assets

 

$

18,876,285

 

 

$

232,066

 

 

$

19,108,351

 

Depreciation and amortization

 

$

10,790

 

 

$

64

 

 

$

10,854

 

(1)
Other segment expenses for the General Banking Segment include net occupancy-premises, equipment expense, FDIC assessment expense, other real estate expense, net, loan expense and other miscellaneous expense. Other segment expenses for the Wealth Management Segment include net occupancy-premises, equipment expense, FDIC assessment expense, loan expense and other miscellaneous expense.

 

56

 

Three Months Ended September 30, 2025

 

General Banking

 

 

Wealth Management

 

 

Consolidated

 

Interest income

 

$

239,614

 

 

$

3,103

 

 

$

242,717

 

Interest expense

 

 

78,528

 

 

 

1,748

 

 

 

80,276

 

Funds transfer pricing, net

 

 

(1,488

)

 

 

1,488

 

 

 

—

 

Net interest income

 

 

159,598

 

 

 

2,843

 

 

 

162,441

 

PCL

 

 

1,687

 

 

 

(2

)

 

 

1,685

 

Net interest income after PCL

 

 

157,911

 

 

 

2,845

 

 

 

160,756

 

Service charges on deposit accounts

 

 

11,188

 

 

 

63

 

 

 

11,251

 

Bank card and other fees

 

 

8,260

 

 

 

58

 

 

 

8,318

 

Mortgage banking, net

 

 

8,182

 

 

 

—

 

 

 

8,182

 

Wealth management

 

 

185

 

 

 

9,613

 

 

 

9,798

 

Other, net

 

 

2,299

 

 

 

83

 

 

 

2,382

 

Internal allocations

 

 

(99

)

 

 

99

 

 

 

—

 

Noninterest income

 

 

30,015

 

 

 

9,916

 

 

 

39,931

 

Salaries and employee benefits

 

 

65,678

 

 

 

5,830

 

 

 

71,508

 

Services and fees

 

 

28,083

 

 

 

694

 

 

 

28,777

 

Other segment expenses (1)

 

 

30,253

 

 

 

395

 

 

 

30,648

 

Internal allocations

 

 

(1,699

)

 

 

1,699

 

 

 

—

 

Noninterest expense

 

 

122,315

 

 

 

8,618

 

 

 

130,933

 

Income before income taxes

 

 

65,611

 

 

 

4,143

 

 

 

69,754

 

Income taxes

 

 

11,939

 

 

 

1,028

 

 

 

12,967

 

Consolidated net income

 

$

53,672

 

 

$

3,115

 

 

$

56,787

 

 

 

 

 

 

 

 

 

 

 

Selected Financial Information

 

 

 

 

 

 

 

 

 

Total assets

 

$

18,600,667

 

 

$

200,843

 

 

$

18,801,510

 

Depreciation and amortization

 

$

9,682

 

 

$

65

 

 

$

9,747

 

(1)
Other segment expenses for the General Banking Segment include net occupancy-premises, equipment expense, FDIC assessment expense, other real estate expense, net, loan expense and other miscellaneous expense. Other segment expenses for the Wealth Management Segment include net occupancy-premises, equipment expense, FDIC assessment expense, loan expense and other miscellaneous expense.

57

 

 

Nine Months Ended September 30, 2026

 

General Banking

 

 

Wealth Management

 

 

Consolidated

 

Interest income

 

$

700,804

 

 

$

9,614

 

 

$

710,418

 

Interest expense

 

 

212,299

 

 

 

4,283

 

 

 

216,582

 

Funds transfer pricing, net

 

 

(3,521

)

 

 

3,521

 

 

 

—

 

Net interest income

 

 

484,984

 

 

 

8,852

 

 

 

493,836

 

PCL

 

 

1,535

 

 

 

225

 

 

 

1,760

 

Net interest income after PCL

 

 

483,449

 

 

 

8,627

 

 

 

492,076

 

Service charges on deposit accounts

 

 

31,440

 

 

 

215

 

 

 

31,655

 

Bank card and other fees

 

 

24,831

 

 

 

49

 

 

 

24,880

 

Mortgage banking, net

 

 

25,728

 

 

 

—

 

 

 

25,728

 

Wealth management

 

 

369

 

 

 

32,107

 

 

 

32,476

 

Other, net

 

 

9,402

 

 

 

268

 

 

 

9,670

 

Gain on sale-leaseback, net

 

 

61,518

 

 

 

—

 

 

 

61,518

 

Securities gains (losses), net

 

 

(61,511

)

 

 

—

 

 

 

(61,511

)

Internal allocations

 

 

(363

)

 

 

363

 

 

 

—

 

Noninterest income

 

 

91,414

 

 

 

33,002

 

 

 

124,416

 

Salaries and employee benefits

 

 

204,082

 

 

 

17,834

 

 

 

221,916

 

Services and fees

 

 

85,441

 

 

 

2,196

 

 

 

87,637

 

Other segment expenses (1)

 

 

89,310

 

 

 

1,415

 

 

 

90,725

 

Internal allocations

 

 

(5,662

)

 

 

5,662

 

 

 

—

 

Noninterest expense

 

 

373,171

 

 

 

27,107

 

 

 

400,278

 

Income before income taxes

 

 

201,692

 

 

 

14,522

 

 

 

216,214

 

Income taxes

 

 

34,890

 

 

 

3,613

 

 

 

38,503

 

Consolidated net income

 

$

166,802

 

 

$

10,909

 

 

$

177,711

 

 

 

 

 

 

 

 

 

 

 

Selected Financial Information

 

 

 

 

 

 

 

 

 

Total assets

 

$

18,876,285

 

 

$

232,066

 

 

$

19,108,351

 

Depreciation and amortization

 

$

30,779

 

 

$

193

 

 

$

30,972

 

 

(1)
Other segment expenses for the General Banking Segment include net occupancy-premises, equipment expense, FDIC assessment expense, other real estate expense, net, loan expense and other miscellaneous expense. Other segment expenses for the Wealth Management Segment include net occupancy-premises, equipment expense, FDIC assessment expense, loan expense and other miscellaneous expense.

 

58

 

Nine Months Ended September 30, 2025

 

General Banking

 

 

Wealth Management

 

 

Consolidated

 

Interest income

 

$

700,073

 

 

$

9,219

 

 

$

709,292

 

Interest expense

 

 

232,624

 

 

 

3,416

 

 

 

236,040

 

Funds transfer pricing, net

 

 

(775

)

 

 

775

 

 

 

—

 

Net interest income

 

 

466,674

 

 

 

6,578

 

 

 

473,252

 

PCL

 

 

11,677

 

 

 

(22

)

 

 

11,655

 

Net interest income after PCL

 

 

454,997

 

 

 

6,600

 

 

 

461,597

 

Service charges on deposit accounts

 

 

32,365

 

 

 

107

 

 

 

32,472

 

Bank card and other fees

 

 

24,601

 

 

 

135

 

 

 

24,736

 

Mortgage banking, net

 

 

25,555

 

 

 

—

 

 

 

25,555

 

Wealth management

 

 

562

 

 

 

28,417

 

 

 

28,979

 

Other, net

 

 

10,474

 

 

 

189

 

 

 

10,663

 

Internal allocations

 

 

(288

)

 

 

288

 

 

 

—

 

Noninterest income

 

 

93,269

 

 

 

29,136

 

 

 

122,405

 

Salaries and employee benefits

 

 

191,380

 

 

 

16,918

 

 

 

208,298

 

Services and fees

 

 

80,039

 

 

 

1,983

 

 

 

82,022

 

Other segment expenses (1)

 

 

88,525

 

 

 

1,213

 

 

 

89,738

 

Internal allocations

 

 

(4,667

)

 

 

4,667

 

 

 

—

 

Noninterest expense

 

 

355,277

 

 

 

24,781

 

 

 

380,058

 

Income before income taxes

 

 

192,989

 

 

 

10,955

 

 

 

203,944

 

Income taxes

 

 

34,961

 

 

 

2,722

 

 

 

37,683

 

Consolidated net income

 

$

158,028

 

 

$

8,233

 

 

$

166,261

 

 

 

 

 

 

 

 

 

 

 

Selected Financial Information

 

 

 

 

 

 

 

 

 

Total assets

 

$

18,600,667

 

 

$

200,843

 

 

$

18,801,510

 

Depreciation and amortization

 

$

28,042

 

 

$

190

 

 

$

28,232

 

 

(1)
Other segment expenses for the General Banking Segment include net occupancy-premises, equipment expense, FDIC assessment expense, other real estate expense, net, loan expense and other miscellaneous expense. Other segment expenses for the Wealth Management Segment include net occupancy-premises, equipment expense, FDIC assessment expense, loan expense and other miscellaneous expense.

 

Note 18 – Accounting Policies Recently Adopted and Pending Accounting Pronouncements

Accounting Policies Recently Adopted

Trustmark has consistently applied its accounting policies to all periods presented in the accompanying consolidated financial statements.

Pending Accounting Pronouncements

ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” FASB issued ASU 2024-03 in November 2024, with the objective of providing investors with more decision-useful information regarding a public business entity's expenses by enhancing disclosures on income statement expenses. Investor feedback indicated a strong preference for the disclosure of disaggregated financial reporting information as a top priority for the FASB. Detailed knowledge of an entity's expenses is crucial for understanding its prospects for future cash flows and for making performance comparisons over time and with other entities. Investors emphasized that information regarding cost of sales, selling, general, and administrative expenses, employee compensation costs, depreciation and amortization, and research and development expenditure would enhance their comprehension of an entity's cost structure and ability to forecast future cash flows. The ASU applies exclusively to public business entities and mandates additional disclosures about specific expense categories on both annual and interim bases in the notes to financial statements that are not currently required. The amendments do not alter or eliminate existing expense disclosure requirements nor change requirements for presenting expenses on the face of the income statement. However, they do specify that certain existing disclosures must now appear in the same tabular format as the new disaggregation requirements. The FASB issued ASU 2025-01 in January 2025, clarifying that the amendments in ASU 2024-03 are effective for public business entities for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. Trustmark intends to adopt the amendments of ASU 2024-03 effective

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January 1, 2027, and will include the required annual disclosures in its Annual Report on Form 10-K for the year ending December 31, 2027, and required interim disclosures in its Quarterly Report on Form 10-Q for the period ending March 31, 2028. Trustmark is currently evaluating the changes to disclosures required by ASU 2024-03; however, adoption of ASU 2024-03 is not expected to have a material impact to Trustmark’s consolidated financial statements or results of operations.

ASU 2025-06, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” Issued in September 2025, ASU 2025-06 seeks to update the guidance on accounting for software due to changes in how software is generally developed. When software accounting guidance was first issued, companies developing software generally followed a prescriptive and sequential development method (e.g., waterfall). Since then, many companies have adopted a more incremental and iterative development method (i.e., agile). As a result, many stakeholders noted the challenges of applying current internal-use software accounting requirements that do not specifically address software developed using an incremental and iterative method, which has led to diversity in practice in determining when to begin capitalizing software costs. The amendments of ASU 2025-06 remove all references to a prescriptive and sequential software development method (referred to as "project stages") throughout FASB ASC Subtopic 350-40, and require an entity to start capitalizing software costs when both of the following occur: (1) Management has authorized and committed to funding the software project; and (2) it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the "probable-to-complete recognition threshold"). In evaluating the probable-to-complete recognition threshold, a company is required to consider whether there is significant uncertainty associated with the development activities of the software. ASU 2025-06 is effective for all entities for annual reporting periods beginning after December 15, 2027, and for interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. Trustmark intends to adopt the amendments of ASU 2025-06 effective January 1, 2028. Trustmark is currently evaluating the impact the amendments of ASU 2025-06 will have with regard to its internal-use software; however, adoption of ASU 2025-06 is not expected to have a material impact to Trustmark’s consolidated financial statements or results of operations.

ASU 2025-08, “Financial Instruments—Credit Losses (Topic 326): Purchased Loans.” Issued in November 2025, ASU 2025-08 expands the gross-up approach for accounting for credit losses on acquired financial assets, addressing complexity and comparability issues caused by previous distinctions between purchased financial assets with credit deterioration (PCD assets) and non-PCD assets. ASU 2025-08 requires loans (excluding credit cards) acquired without significant credit deterioration and deemed "seasoned" to be accounted for using the gross-up approach. For these purchased seasoned loans (loans, excluding credit cards, debt securities and trade receivables, acquired through a business combination accounted for using the acquisition method or other loans acquired through transfers not accounted for as business combinations purchased at least 90 days after origination and not originated by the acquirer), the initial ACL is added to the purchase price to determine the amortized cost basis. Entities can elect to measure this ACL using the amortized cost basis if not employing a discounted cash flow method, with elections being irrevocable. ASU 2025-08 clarifies that purchased seasoned loans are subject to the same accrual policies as originated assets and are not subject to the guidance that permits interest income accrual on PCD assets when there is a reasonable expectation for amounts to be collected or recovery limitations. ASU 2025-08 also amends disclosure requirements for the rollforward of the ACL to present the initial allowance recognized on such loans separately. ASU 2025-08 is effective for annual periods beginning after December 15, 2026, and for interim reporting periods within those annual reporting periods, with early adoption allowed and prospective application required. Trustmark intends to adopt the amendments of ASU 2025-08 on January 1, 2027; however, as the amendments of this ASU must be applied on a prospective basis, adoption of this ASU will have no impact to Trustmark's consolidated financial statements or results of operations until an acquisition occurs.

ASU 2025-09, “Derivatives and Hedging (Topic 815): Hedge Accounting Improvements.” Issued in November 2025, ASU 2025-09 updates hedge accounting guidance to address global reference rate reform and better align hedge accounting with entities' risk management practices. Key changes include broadening eligible hedged risks for cash flow hedges via a "similar risk exposure" test, introducing an optional operable model for hedge accounting on choose-your-rate debt instruments, permitting hedge accounting for forecasted spot and forward transactions in nonfinancial assets if price components are clearly related and removing the net written option test for certain derivatives. The amendments of ASU 2025-09 also resolve recognition mismatches in dual hedge strategies involving foreign-currency-denominated debt. The amendments of ASU 2025-09 are effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within those annual reporting periods, and should be applied on a prospective basis for all hedging relationships. Early adoption is permitted. Entities may also modify certain critical terms of existing hedging relationships without de-designating the hedge upon adoption. Trustmark intends to adopt the amendments of ASU 2025-09 effective January 1, 2027. Trustmark is currently evaluating the impact the amendments of ASU 2025-09 will have in regard to its derivative and hedging instruments; however, adoption of ASU 2025-09 is not expected to have a material impact to Trustmark’s consolidated financial statements or results of operations.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following provides a narrative discussion and analysis of Trustmark Corporation’s (Trustmark) financial condition and results of operations. This discussion should be read in conjunction with the unaudited consolidated financial statements and the supplemental financial data included in Part I. Item 1. – Financial Statements of this report.

Description of Business

Trustmark, a Mississippi business corporation incorporated in 1968, is a bank holding company headquartered in Jackson, Mississippi. Trustmark’s principal subsidiary is Trustmark Bank (TB), a Mississippi-chartered banking corporation. TB is a member bank of the Federal Reserve System and is supervised by the Federal Reserve Bank of Atlanta (FRBA) and the Mississippi Department of Banking and Consumer Finance (MDBCF). In addition, as a large provider of consumer financial services, TB remains subject to regulation, supervision, enforcement and examination by the Consumer Financial Protection Bureau (CFPB). Dividends from TB are Trustmark’s principal source of cash. Effective July 1, 2026, TB was no longer required to obtain approval from the MDBCF, except under certain enumerated supervisory circumstances, prior to the declaration and payment of its quarterly dividend as a result of the enactment of Mississippi Senate Bill 2383, which amended the Mississippi banking code. At September 30, 2026, TB had total assets of $19.106 billion, which represented 99.99% of the consolidated assets of Trustmark.

Through TB and its other subsidiaries, Trustmark operates as a financial services organization providing banking and other financial solutions through offices and 2,574 full-time equivalent associates (measured at September 30, 2026) located in the states of Alabama, Florida (primarily in the northwest or “Panhandle” region of that state, which is referred to herein as Trustmark’s Florida market), Georgia (primarily in Atlanta, which is referred to herein as Trustmark's Georgia market), Mississippi, Tennessee (in the Memphis and Northern Mississippi regions, which are collectively referred to herein as Trustmark’s Tennessee market), and Texas (primarily in Houston, which is referred to herein as Trustmark’s Texas market). Trustmark’s operations are managed along two operating segments: General Banking Segment and Wealth Management Segment. For a complete overview of Trustmark’s business, see the section captioned “The Corporation” included in Part I. Item 1. – Business of Trustmark’s Annual Report on Form 10-K for its fiscal year ended December 31, 2025 (2025 Annual Report).

Executive Overview

During the first nine months of 2026, Trustmark completed strategic actions to improve the flexibility and future earnings capacity of its balance sheet. Trustmark completed the following non-routine transactions during the third quarter of 2026:

•
On September 3, 2026, TB entered into and simultaneously closed a sale agreement in which 34 bank branch properties owned and operated by TB (collectively, the branches) were sold to entities affiliated with Blue Owl Real Estate Capital LLC (collectively, Blue Owl), for an aggregate cash net purchase price of $91.7 million. The branches are located in Alabama, Florida, Mississippi, Tennessee and Texas. Concurrently with the closing of the sale of the branches, TB entered into triple net lease agreements (the lease agreements) with Blue Owl, pursuant to which TB leased each of the branches (the sale of the branches pursuant to the sale agreement, and the lease of the branches pursuant to the lease agreements, are collectively referred to as the sale-leaseback transaction). Each of the lease agreements has an initial term of 15 years and provides TB with three consecutive renewal options of five years each. The initial aggregate annual rent payable by TB under the lease agreements is $6.4 million, subject to a 1.5% annual rent escalation during the initial term and the renewal terms, if exercised. No branches were closed as a result of the sale-leaseback transaction. The sale of the branches resulted in a gain of $61.5 million ($46.1 million, net of taxes), after transaction-related expenses, included in noninterest income on the accompanying consolidated statements of income. As a result of the sale-leaseback transaction, Trustmark had additional operating lease right-of-use assets of $72.5 million and operating lease liabilities of $72.6 million at September 30, 2026. The renewal terms were excluded from the measurement of the right-of-use assets and lease liabilities since Management determined that the exercise of the renewal terms was not reasonably certain.
•
Following the completion of the sale-leaseback transaction, Trustmark executed a restructuring of its investment securities portfolio by reclassifying its securities held to maturity to securities available for sale. Trustmark then sold $629.5 million of its lower-yielding investment securities with a weighted-average yield of approximately 1.4% and purchased $628.0 million of investment securities with a weighted-average yield of approximately 5.0%, which resulted in a loss of $61.5 million ($46.1 million, net of taxes).

Trustmark completed the following non-routine transactions during the second quarter of 2026:

•
Trustmark sold a portfolio of 1-4 family mortgage loans that were primarily three payments delinquent and/or nonaccrual totaling $73.8 million, which resulted in a loss of $11.3 million. Total reserves released or used due to the sale of 1-4 family mortgage loans were $15.5 million, of which $9.2 million ($6.9 million, net of taxes) were released and recorded to PCL,

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LHFI sale of 1-4 family mortgage loans and $6.3 million (the credit related portion of the loss) were recorded as charge-offs against the ACL, LHFI. The noncredit-related portion of the loss totaled $5.0 million ($3.8 million, net of taxes) and was recorded to noninterest income in other, net. In total, the sale of the 1-4 family mortgage loans resulted in an increase in pre-tax net income of $4.2 million ($3.2 million, net of taxes).
•
TB and Visa completed an exchange, offered by Visa to institutional holders of certain classes of its common stock, in which TB received shares of Visa Class B-3 common stock (Visa B-3 shares) and Visa Class C common stock (Visa C shares) for its outstanding shares of Visa Class B-2 common stock (Visa B-2 shares). Two-thirds of the Visa C shares received by TB were converted to Visa Class A common stock (Visa A shares) pursuant to the terms thereof and subsequently sold, resulting in a gain of $3.3 million ($2.5 million, net of taxes). The remaining one-third of the Visa C shares received by TB were recognized at fair value, which resulted in a gain of $1.7 million ($1.2 million, net of taxes). During the third quarter of 2026, TB converted the remaining one-third of Visa C shares to Visa A shares and subsequently sold them for approximately the same carrying value as of June 30, 2026. The total gain on the Visa shares was recorded to noninterest income in other, net. The Visa B-3 shares were recorded at their nominal carrying value.

For further information regarding these non-routine transactions and the impact to Trustmark's financial results, see the section captioned "Non-GAAP Financial Measures."

In addition to these non-routine transactions, Trustmark's financial results for the three and nine months ended September 30, 2026 reflected continued growth in net interest income, diversified growth in loans held for investment (LHFI), stable credit quality and cost-effective core deposit growth. Trustmark's capital position remained solid, reflecting the consistent profitability of its diversified financial services businesses. Trustmark continued to implement organic growth initiatives and make investments to capitalize on opportunities in its marketplace. With robust capital, liquidity and profitability, Trustmark is well-positioned to continue to compete in changing economic conditions and create long-term value for its shareholders. On October 27, 2026, Trustmark’s Board of Directors declared a quarterly cash dividend of $0.25 per share. The dividend is payable December 15, 2026, to shareholders of record on December 1, 2026.

Recent Economic and Industry Developments

Economic activity during the first nine months of 2026 expanded at a moderate pace, supported by continued consumer spending and business investment, including investment in artificial intelligence (AI) infrastructure. Labor market conditions remained generally stable despite uneven monthly job gains, while high mortgage rates and soft sales continued to constrain housing activity. Inflation remained elevated as higher energy and housing costs offset signs of easing in certain core measures, and historically low savings rates increased consumer vulnerability. Economic concerns remain as a result of the cumulative weight of uncertainty regarding the potential economic impact of geopolitical developments, including the conflicts in Ukraine and the Middle East, the current United States presidential administration's policies, tariffs, inflationary and broader pricing pressures, volatility in energy prices and other economic and industry volatility. Concerns surrounding the direction of global markets and the potential impact on the United States economy are expected to persist for the near term. While Trustmark's customer base is wholly domestic, international economic conditions affect domestic economic conditions and thus may have an impact upon Trustmark's financial condition or results of operations.

The FRB decreased the target federal funds rate to a range of 3.50% to 3.75% and the rate it pays on reserves to 3.65% as of December 2025. The FRB left the target federal funds rate and the rate it pays on reserves unchanged for most of 2026. In September 2026, the FRB increased the target federal funds rate to a range of 3.75% to 4.00%, and increased the rate it pays on reserves to 3.90%. The FRB stated that economic activity was expanding at a solid pace, supported by resilient domestic spending, strong productivity growth and robust capital investment; job gains had kept pace with the workforce and unemployment had changed little, while inflation remained elevated. The FRB indicated that the rate increase was intended to support a timelier return of inflation to its 2% objective and continued its policy of maintaining ample reserves in the banking system. Rate increases generally increase the competitive pressures on Trustmark's deposit cost of funds. While rate cuts potentially reduce those competitive pressures, they increase pressure on Trustmark's net interest margin, a key component to its financial results. It is not possible to predict the direction, pace or magnitude of further changes, if any, in interest rates, or the impact any such rate changes will have on Trustmark's results of operations.

In the August and October 2026 “Summary of Commentary on Current Economic Conditions by Federal Reserve District,” the twelve Federal Reserve Districts’ (Districts) reports suggested that during the reporting periods (covering the periods from July 7, 2026 through August 24, 2026 and August 25, 2026 through October 5, 2026) overall economic activity increased at a slight to moderate pace in most Districts. The August report indicated that economic activity increased at a slight to moderate pace in ten of the twelve Districts, while two Districts reported no change. The October report indicated moderate growth in economic activity in two Districts, modest growth in three Districts, slight growth in four Districts and no significant change in three Districts. Manufacturing was a principal source of

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strength, particularly activity related to defense, energy, semiconductors and data centers, while activity in many other sectors showed little growth. Reports by the twelve Districts noted the following during the reporting periods:

•
Consumer spending increased slightly on balance as higher-income households continued to support discretionary and premium spending, while lower- and middle-income consumers exhibited greater price sensitivity and financial strain from higher fuel, food, housing and borrowing costs. Auto sales were generally subdued or flat to modestly lower because of affordability concerns, elevated financing costs and weaker consumer confidence.
•
Manufacturing activity strengthened across many Districts, with notable demand from defense and data center-related projects. Firms continued to report elevated costs for energy, transportation, metals, petrochemicals and other raw materials, together with tariff-related pressures and supply chain constraints. Agricultural conditions remained strained in many areas despite some improvement in livestock markets.
•
Financial conditions improved slightly as loan volumes remained solid or increased across most Districts. Residential construction declined while nonresidential construction increased on balance, with some Districts noting a high concentration of activity related to data center projects.
•
Business outlooks remained generally positive but cautious. Most Districts expected slight growth in the coming months, weighted toward manufacturing, with heightened uncertainty surrounding the effects of higher energy prices, policy and international conflict.
•
Labor market conditions changed little overall. Healthy labor demand was seen most frequently in manufacturing, construction and some service sectors, while retail and hospitality sectors saw falling labor demand. District contacts continued to report shortages of specialized, technical and skilled trade workers. Districts also reported both positive and negative effects of AI on labor demand. Wage growth was generally modest to moderate, with several Districts noting that inflation had spawned additional wage pressure in the form of higher cost-of-living demands from individuals as well as challenges from rising benefit costs.
•
Prices continued to increase, with moderate or stronger price growth in most Districts and accelerating pressures in several areas. Higher oil and diesel prices affected all Districts and contributed to increased freight and supply chain costs. Tariffs, metals, construction materials, insurance and health care also remained important cost pressures. Consumer price sensitivity constrained firms’ ability to pass through higher costs and pressured margins.

Reports by the Federal Reserve’s Sixth District, Atlanta (which includes Trustmark’s Alabama, Florida, Georgia and Mississippi market regions), Eighth District, St. Louis (which includes Trustmark’s Tennessee market region), and Eleventh District, Dallas (which includes Trustmark’s Texas market region), generally reflected the national pattern of continued growth accompanied by persistent price and policy uncertainty. The Federal Reserve’s Sixth District reported modest loan growth overall, with niche lending continuing to show the strongest growth, driven by specialized consumer and business loans and loans to non-depository institutions. The Federal Reserve’s Sixth District also reported tighter underwriting standards affecting small businesses most acutely, with several institutions exiting the Small Business Administration lending market due to increased risk and unclear compliance requirements. The Federal Reserve’s Eighth District reported strong loan demand, with several banks reporting solid commercial and industrial lending activity. The Federal Reserve’s Eighth District noted that credit standards were generally steady and asset quality remained positive, though bankers across the region noted rising delinquencies and slow payments among households and small businesses. The Federal Reserve’s Eleventh District reported loan volume and demand continued to grow, driven by consumer and industrial and commercial real estate loans, credit standards and terms tightened and overall loan performance improved. The Federal Reserve’s Eleventh District also noted changing outlooks by bankers, as bankers reported optimistic outlooks with expectations of strong growth in loan demand and business activity and slight deterioration in loan performance in the August report; however, in the October report, bankers’ outlooks turned pessimistic with expectations of a slight decline in loan demand and worsening loan performance, citing the ongoing Middle East conflict, elevated inflation and the increase in the federal funds rate as the reason for the change in outlooks.

Trustmark is continuing to monitor the effects of modest and uneven economic growth, elevated energy and transportation costs, tariffs, inflationary pressures, geopolitical developments, changing consumer behavior and other administrative policies on its customer base, interest rates, loan demand and credit-related conditions. Recent Federal Reserve District reports indicate that consumer activity remains sensitive to affordability and financing costs, labor markets are broadly stable but hiring is cautious, and businesses continue to face elevated input costs and uncertainty. Economic uncertainty or market disruptions arising from these factors could reduce loan demand, increase funding costs, pressure net interest margin or increase loan nonperformance. It is not possible to predict the timing or magnitude of changes in government policy, interest rates, geopolitical conditions or broader economic trends, or the effects such developments could have on Trustmark’s customer base, credit quality, financial condition or results of operations.

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Financial Highlights

Trustmark reported net income of $58.1 million, or basic and diluted earnings per share (EPS) of $1.00, in the third quarter of 2026, compared to $56.8 million, or basic and diluted EPS of $0.94, in the third quarter of 2025. Trustmark’s reported performance during the quarter ended September 30, 2026 produced a return on average tangible equity of 12.72%, a return on average assets of 1.21%, an average equity to average assets ratio of 11.24% and a dividend payout ratio of 25.00%, compared to a return on average tangible equity of 12.84%, a return on average assets of 1.21%, an average equity to average assets ratio of 11.26% and a dividend payout ratio of 25.53% during the quarter ended September 30, 2025.

Trustmark reported net income of $177.7 million, or basic and diluted EPS of $3.04 and $3.03, respectively, for the nine months ended September 30, 2026, compared to $166.3 million, or basic and diluted EPS of $2.75 and $2.74, respectively, for the same time period in 2025. Trustmark's reported performance during the first nine months of 2026 produced a return on average tangible equity of 13.13%, a return on average assets of 1.25%, an average equity to average assets ratio of 11.26% and a dividend payout ratio of 24.67%, compared to a return on average tangible equity of 13.03%, a return on average assets of 1.21%, an average equity to average assets ratio of 11.09% and a dividend payout ratio of 26.18% for the first nine months of 2025.

For further information regarding the calculation of return on average tangible equity, which is not a measure prepared in accordance with U.S. generally accepted accounting principles (GAAP), see the section captioned "Non-GAAP Financial Measures."

Total revenue, which is defined as net interest income plus noninterest income, for the three months ended September 30, 2026 was $207.1 million, an increase of $4.8 million, or 2.4%, when compared to the same time period in 2025. Total revenue for the nine months ended September 30, 2026 was $618.3 million, an increase of $22.6 million, or 3.8%, when compared to the same time period in 2025. The increase in total revenue when the three and nine months ended September 30, 2026 are compared to the same time periods in 2025, was principally due to an increase in net interest income.

Net interest income for the three and nine months ended September 30, 2026 totaled $167.6 million and $493.8 million, respectively, an increase of $5.2 million, or 3.2%, and $20.6 million, or 4.3%, respectively, when compared to the same time periods in 2025. Interest income totaled $240.9 million for the three months ended September 30, 2026, a decrease of $1.8 million, or 0.7%, when compared to the same time period in 2025, principally due to a decrease in interest and fees on LHFS and LHFI, partially offset by an increase in interest on securities. Interest income totaled $710.4 million for the nine months ended September 30, 2026, an increase of $1.1 million, or 0.2%, when compared to the same time period in 2025, principally due to an increase in interest on securities, partially offset by a decline in other interest income. Interest expense totaled $73.3 million and $216.6 million, respectively, for the three and nine months ended September 30, 2026, a decrease of $7.0 million, or 8.7%, and $19.5 million, or 8.2%, respectively, when compared to the same time periods in 2025, reflecting declines in all categories of interest expense.

Noninterest income for the three months ended September 30, 2026 totaled $39.5 million, a decrease of $431 thousand, or 1.1%, when compared to the same time period in 2025, principally due to declines in other, net, service charges on deposit accounts and mortgage banking, net, partially offset by an increase in wealth management. Noninterest income for the nine months ended September 30, 2026 totaled $124.4 million, an increase of $2.0 million, or 1.6%, when compared to the same time period in 2025, principally due to an increase in wealth management partially offset by a decline in other, net. Wealth management totaled $11.2 million and $32.5 million, respectively, for the three and nine months ended September 30, 2026, an increase of $1.4 million, or 13.9%, and $3.5 million, or 12.1%, respectively, when compared to the same time periods in 2025, principally due to increases in income from brokerage and trust management services. Other, net totaled $1.7 million for the three months ended September 30, 2026, a decrease of $705 thousand, or 29.6%, when compared to the same time period in 2025, principally due to a decrease in other miscellaneous income, primarily due to a decline cash management fees partially offset by an increase in gains on non-qualified benefit plans. Other, net totaled $9.7 million for the nine months ended September 30, 2026, a decrease of $993 thousand, or 9.3%, when compared to the same time period in 2025, principally due to the loss on the sale of the 1-4 family mortgage loans and a decline in other miscellaneous income, partially offset by the total gain on the sale of the Visa A shares and the fair value adjustment of the Visa C shares. The decrease in other miscellaneous income when the first nine months of 2026 is compared to the same time period in 2025 was principally due to declines in cash management fees and gains on sales of premises and equipment, partially offset by an increase in income from other partnership investments. Service charges on deposit accounts totaled $10.6 million for the three months ended September 30, 2026, a decrease of $625 thousand, or 5.6%, when compared to the same time period in 2025, principally due to declines in non-sufficient funds and overdraft fees on commercial demand deposit accounts and consumer interest checking accounts. Mortgage banking, net totaled $7.9 million for the three months ended September 30, 2026, a decrease of $302 thousand, or 3.7%, when compared to the same time period in 2025, principally due to a decline in the gain on sales of loans, net and an increase in the run-off of the MSR, partially offset by an increase in the net hedge ineffectiveness.

Noninterest expense for the three and nine months ended September 30, 2026 totaled $134.4 million and $400.3 million, respectively, an increase of $3.5 million, or 2.7%, and $20.2 million, or 5.3%, respectively, when compared to the same time periods in 2025. The

64

 

increase in noninterest expense when the three months ended September 30, 2026 is compared to the same time period in 2025 was principally due to increases in salaries and employee benefits and services and fees, partially offset by a decline in other expense. The increase in noninterest expense when the first nine months of 2026 is compared to the same time period in 2025, was principally due to increases in salaries and employee benefits, services and fees and equipment expense, partially offset by a decline in other expense. Salaries and employee benefits totaled $74.7 million for the three months ended September 30, 2026, an increase of $3.2 million, or 4.4%, when compared to the same time period in 2025, principally due to increases in salaries expense primarily due to general merit increases, commission expense related to mortgage origination production and brokerage activity and incentive stock compensation expense, partially offset by a decline in annual management performance incentives. Salaries and employee benefits totaled $221.9 million for the nine months ended September 30, 2026, an increase of $13.6 million, or 6.5%, when compared to the same time period in 2025, principally due to increases in salaries expense primarily due to general merit increases, commission expense related to mortgage origination production and brokerage activity, incentive stock compensation expense, payroll taxes, contributions to employee retirement funds and medical insurance expense. Services and fees totaled $29.9 million for the three months ended September 30, 2026, an increase of $1.2 million, or 4.1%, when compared to the same time period in 2025, principally due to increases in data processing expenses related to software, partially offset by declines in business process outsourcing expenses and outside services and fees. Services and fees totaled $87.6 million for the nine months ended September 30, 2026, an increase of $5.6 million, or 6.8%, when compared to the same time period in 2025, principally due to increases in data processing expenses related to software and advertising expense, partially offset by a decline in outside services and fees. Equipment expense totaled $7.0 million and $21.2 million, respectively, for the three and nine months ended September 30, 2026, an increase of $548 thousand, or 8.5%, and $2.3 million, or 12.1%, respectively, when compared to the same time periods in 2025, principally due to an increase in data processing equipment expense. Other expense totaled $14.3 million for the three months ended September 30, 2026, a decrease of $2.2 million, or 13.2%, when compared to the same time period in 2025, principally due to declines in other real estate expense and FDIC assessment expense. Other expense totaled $45.4 million for the nine months ended September 30, 2026, a decrease of $2.8 million, or 5.7%, when compared to the same time period in 2025, principally due to declines in FDIC assessment expense and other real estate expense, partially offset by an increase in loan expense.

Trustmark’s total PCL, LHFI for the three and nine months ended September 30, 2026 totaled $1.2 million and $1.1 million, respectively. The PCL, LHFI for the nine months ended September 30, 2026 included a provision release of $9.2 million as a result of the sale of 1-4 family mortgage loans during the second quarter of 2026. The PCL, LHFI excluding the sale of 1-4 family mortgage loans totaled $1.2 million and $10.3 million, respectively, for the three and nine months ended September 30, 2026, compared to a PCL, LHFI of $1.4 million and $14.9 million, respectively, for the same time periods in 2025, a decrease of $211 thousand, or 15.2%, and $4.5 million, or 30.6%, respectively. The decrease in the PCL, LHFI excluding the sale of 1-4 family mortgage loans when the three months ended September 30, 2026 is compared to the same time period in 2025 was principally due to a decline in required reserves as a result of updates to various factors, positive credit migration, a decline in loan growth and changes in the macroeconomic forecast, partially offset by an increase in required reserves on individually analyzed credits and reserves released as a result of the resolution of the Credit Quality Review Qualitative Factor during the third quarter of 2025. The decrease in the PCL, LHFI excluding the sale of 1-4 family mortgage loans when the nine months ended September 30, 2026 is compared to the same time period in 2025 was principally due to a decline in required reserves as a result of positive credit migration, a decline in loan growth and changes in the macroeconomic forecast, partially offset by an increase in required reserves on individually analyzed credits and reserves released as a result of the resolution of the Credit Quality Review Qualitative Factor during the third quarter of 2025.

The PCL, LHFI excluding the sale of 1-4 family mortgage loans for the three months ended September 30, 2026 was principally attributable to specific reserves on individually analyzed loans and changes in the macroeconomic forecast, partially offset by positive credit migration, adjustments to the qualitative factors and adjustments to the weighted-average life assumptions. The PCL, LHFI excluding the sale of 1-4 family mortgage loans for the nine months ended September 30, 2026 was principally attributable to specific reserves on individually analyzed loans and loan growth, partially offset by positive credit migration and changes in the macroeconomic forecast.

The PCL, off-balance sheet credit exposures totaled $1.1 million and $668 thousand, respectively, for the three and nine months ended September 30, 2026, compared to $295 thousand and a negative $3.2 million, respectively, for the same time periods in 2025, an increase in provision expense of $790 thousand and $3.9 million, respectively. The increase in the PCL, off-balance sheet credit exposures when the three months ended September 30, 2026 is compared to the same time period in 2025, was primarily due to an increase in unfunded commitment balances and reserves released as a result of the resolution of the Credit Quality Review Qualitative Factor during the third quarter of 2025, partially offset by positive credit migration and a decrease in reserves resulting from changes in the quantitative reserve rates due to changes in the macroeconomic forecast. The increase in the PCL, off-balance sheet credit exposures when the first nine months of 2026 is compared to the same time period in 2025, was primarily due to increases in the quantitative reserve rates due to changes in the macroeconomic forecast and the historical utilization rates, reserves released as a result of the resolution of the Credit Quality Review Qualitative Factor during the third quarter of 2025 and increases in unfunded commitment balances.

65

 

For the three months ended September 30, 2026, the PCL, off-balance sheet credit exposures was primarily attributable to an increase in unfunded commitment balances and an increase in the quantitative reserve rates due to changes in the macroeconomic forecast. For the nine months ended September 30, 2026, the PCL, off-balance sheet credit exposures was primarily attributable to an increase in the quantitative reserve rates due to changes in the macroeconomic forecast and an increase in the utilization rates for unfunded commitments, partially offset by a decrease in commercial construction unfunded commitment balances and positive credit migration. Please see the section captioned “Provision for Credit Losses” for additional information regarding the PCL on LHFI and off-balance sheet credit exposures.

LHFI totaled $13.869 billion at September 30, 2026, an increase of $194.9 million, or 1.4%, compared to December 31, 2025. The increase in LHFI during the first nine months of 2026 was primarily due to net growth in commercial and industrial loans and other commercial loans and leases, partially offset by net declines in loans secured by real estate and state and other political subdivision loans. For additional information regarding changes in LHFI and comparative balances by loan category, see the section captioned “LHFI.”

At September 30, 2026, nonperforming assets totaled $57.0 million, a decrease of $34.3 million, or 37.6%, compared to December 31, 2025, primarily due to the sale of 1-4 family mortgage loans during the second quarter of 2026. Nonaccrual LHFI totaled $54.3 million at September 30, 2026, a decrease of $30.0 million, or 35.6%, relative to December 31, 2025, primarily due to the sale of nonaccrual 1-4 family mortgage loans in the Mississippi market region during the second quarter of 2026, pay-offs of nonaccrual loans in the Mississippi and Texas market regions as well as nonaccrual loans foreclosed in the Mississippi and Alabama market regions, partially offset by 1-4 family mortgage loans placed on nonaccrual status in the Mississippi market region as well as one large commercial credit in the Mississippi market region and one large commercial credit in the Alabama market region placed on nonaccrual status. Other real estate totaled $2.7 million at September 30, 2026, a decrease of $4.3 million, or 61.2%, when compared to December 31, 2025, principally due to properties sold in the Mississippi, Alabama and Tennessee market regions, partially offset by properties foreclosed in the Mississippi and Alabama market regions.

Management has continued its practice of maintaining excess funding capacity to provide Trustmark with adequate liquidity for its ongoing operations. In this regard, Trustmark benefits from its strong deposit base, its investment portfolio and its access to funding from a variety of external funding sources such as upstream federal funds lines, FHLB advances and brokered deposits. See the section captioned “Capital Resources and Liquidity” for further discussion of the components of Trustmark’s excess funding capacity.

Total deposits were $16.058 billion at September 30, 2026, an increase of $558.3 million, or 3.6%, compared to December 31, 2025. During the first nine months of 2026, noninterest-bearing deposits increased $226.4 million, or 7.5%, principally due to growth in commercial and consumer noninterest-bearing demand deposit accounts. Interest-bearing deposits increased $331.9 million, or 2.7%, during the first nine months of 2026, primarily due to growth in commercial and public interest checking accounts, commercial money market deposit accounts (MMDA) and consumer, commercial and public certificates of deposit (CDs), partially offset by declines in brokered CDs and consumer interest checking and MMDA accounts.

Federal funds purchased totaled $205.0 million at September 30, 2026, a decrease of $240.0 million, or 53.9%, compared to December 31, 2025. Other borrowings totaled $136.3 million at September 30, 2026, a decrease of $228.5 million, or 62.6%, compared to December 31, 2025, principally due to a decrease in outstanding short-term FHLB advances with the FHLB of Dallas. The decrease in federal funds purchased and short-term FHLB advances during the first nine months of 2026 reflected changes in funding needs principally due to deposit growth exceeding loan growth.

Recent Legislative and Regulatory Developments

On July 31, 2026, the FRB issued a proposal to revise Regulation O, which governs loans by member banks, including TB, to their executive officers, directors, principal shareholders, and related interests thereof. Among other changes, the proposal would increase the regulation’s dollar-based thresholds, with the result that fewer loans to insiders would be subject to the regulation’s prohibitions, board approval requirements, and disclosure requirements. The proposal would also exclude portfolio companies of qualifying fund complexes from treatment as insiders of the bank.

On June 25, 2026, the FDIC issued a proposal to revise deposit insurance assessment thresholds, rate schedules, and adjustments. Among other changes, the proposal would increase the asset threshold used to distinguish between small and large institutions for deposit insurance assessment purposes from $10 billion to $30 billion, with future adjustments based on a prescribed indexing methodology. As a result, TB would be classified as a small institution under the proposal. The FDIC proposed rules would impose fewer reporting requirements and different deposit insurance pricing methodologies on small institutions compared to large institutions. In addition, the proposal would reduce initial base assessment rate schedules applicable to small institutions, including TB, by two basis points. Trustmark is continuing to evaluate the proposal and its potential impact on TB.

66

 

On March 19, 2026, the federal banking agencies issued several proposals to revise the U.S. regulatory capital framework. The proposals would, among other things, eliminate the requirement for all banking organizations to deduct mortgage servicing assets from common equity Tier 1 capital, and, for banking organizations subject to risk-based capital requirements, subject such assets to a uniform risk-weighting treatment instead. The proposals would also modify aspects of the standardized approach to risk‑based capital that applies to Trustmark, including by making the risk weights for certain residential mortgage exposures more risk‑sensitive and decreasing the risk weights of corporate exposures, which could affect certain aspects of Trustmark’s regulatory capital calculations. Trustmark is continuing to evaluate these proposals and their impact on its regulatory capital position.

In March 2026, Mississippi enacted Senate Bill 2383, which amended the Mississippi banking code to, among other things, require prior approval from the MDBCF for the declaration and payment of dividends by a Mississippi-chartered bank only under the following conditions: (i) the bank is subject to a corrective plan or enforcement action; (ii) after making the dividend, the bank would be undercapitalized; or (iii) the Commissioner of MDBCF has determined that conditions exist at the bank that pose a risk to its safety and soundness. Senate Bill 2383 became effective on July 1, 2026.

On October 22, 2024, the CFPB released a final rule to implement Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under the final rule, financial institutions are required, upon request, to make available to a consumer or third party authorized by the consumer certain information TB has concerning a consumer financial product or service covered by the rule, such as a credit card or a deposit account. Industry organizations challenged the final rule in court. On July 29, 2025, the district court granted a motion by the CFPB to stay the proceedings while the CFPB conducts a rulemaking to revise the final rule substantially. On August 22, 2025, the CFPB issued an advance notice of proposed rulemaking to solicit comments and data on several issues relating to the final rule. On October 29, 2025, the district court issued a preliminary injunction preventing the CFPB from enforcing the final rule until the CFPB has completed its reconsideration of the rule. Management is monitoring the status of the litigation and evaluating the impact of this rule.

On July 18, 2025, President Trump signed the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) into law, establishing a federal licensing and supervisory framework for payment stablecoins and their issuers. The GENIUS Act may accelerate and increase the competition that non-traditional financial institutions pose to banks’ payment services but may also create opportunities for banks to hold stablecoin reserve assets, custody stablecoins or issue stablecoins. The GENIUS Act will take effect on January 18, 2027, and requires federal and state regulatory agencies to adopt regulations implementing several of the Act’s key provisions.

For additional information regarding legislation and regulation applicable to Trustmark, see the section captioned “Supervision and Regulation” included in Part I. Item 1. – Business of Trustmark’s 2025 Annual Report.

67

 

Selected Financial Data

The following tables present financial data derived from Trustmark’s consolidated financial statements as of and for the periods presented ($ in thousands, except per share data):

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Consolidated Statements of Income

 

 

 

 

 

 

 

 

 

 

 

 

Total interest income

 

$

240,915

 

 

$

242,717

 

 

$

710,418

 

 

$

709,292

 

Total interest expense

 

 

73,268

 

 

 

80,276

 

 

 

216,582

 

 

 

236,040

 

Net interest income

 

 

167,647

 

 

 

162,441

 

 

 

493,836

 

 

 

473,252

 

PCL, LHFI

 

 

1,179

 

 

 

1,390

 

 

 

10,319

 

 

 

14,861

 

PCL, LHFI sale of 1-4 family mortgage loans

 

 

—

 

 

 

—

 

 

 

(9,227

)

 

 

—

 

PCL, off-balance sheet credit exposures

 

 

1,085

 

 

 

295

 

 

 

668

 

 

 

(3,206

)

Noninterest income

 

 

39,500

 

 

 

39,931

 

 

 

124,416

 

 

 

122,405

 

Noninterest expense

 

 

134,436

 

 

 

130,933

 

 

 

400,278

 

 

 

380,058

 

Income before income taxes

 

 

70,447

 

 

 

69,754

 

 

 

216,214

 

 

 

203,944

 

Income taxes

 

 

12,373

 

 

 

12,967

 

 

 

38,503

 

 

 

37,683

 

Net income

 

$

58,074

 

 

$

56,787

 

 

$

177,711

 

 

$

166,261

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue (1)

 

$

207,147

 

 

$

202,372

 

 

$

618,252

 

 

$

595,657

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share Data

 

 

 

 

 

 

 

 

 

 

 

 

Basic EPS

 

$

1.00

 

 

$

0.94

 

 

$

3.04

 

 

$

2.75

 

Diluted EPS

 

$

1.00

 

 

$

0.94

 

 

$

3.03

 

 

$

2.74

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends per share

 

$

0.25

 

 

$

0.24

 

 

$

0.75

 

 

$

0.72

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

 

Return on average equity

 

 

10.74

%

 

 

10.78

%

 

 

11.08

%

 

 

10.89

%

Return on average tangible equity

 

 

12.72

%

 

 

12.84

%

 

 

13.13

%

 

 

13.03

%

Return on average assets

 

 

1.21

%

 

 

1.21

%

 

 

1.25

%

 

 

1.21

%

Average equity / average assets

 

 

11.24

%

 

 

11.26

%

 

 

11.26

%

 

 

11.09

%

Net interest margin (fully taxable equivalent)

 

 

3.84

%

 

 

3.83

%

 

 

3.83

%

 

 

3.80

%

Dividend payout ratio

 

 

25.00

%

 

 

25.53

%

 

 

24.67

%

 

 

26.18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Quality Ratios

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs (recoveries) (excl sale of 1-4 family
   mortgage loans) / average loans (LHFS + LHFI)

 

 

0.03

%

 

 

0.13

%

 

 

0.03

%

 

 

0.10

%

PCL, LHFI / average loans (LHFS + LHFI)

 

 

0.03

%

 

 

0.04

%

 

 

0.10

%

 

 

0.15

%

Nonaccrual LHFI / (LHFS + LHFI)

 

 

0.39

%

 

 

0.61

%

 

 

 

 

 

 

Nonperforming assets / (LHFS + LHFI) plus other real estate

 

 

0.40

%

 

 

0.67

%

 

 

 

 

 

 

ACL, LHFI / LHFI

 

 

1.07

%

 

 

1.22

%

 

 

 

 

 

 

(1)
Consistent with Trustmark’s annual financial statements, total revenue is defined as net interest income plus noninterest income.

68

 

 

 

 

September 30,

 

 

 

2026

 

 

2025

 

Consolidated Balance Sheets

 

 

 

 

 

 

Total assets

 

$

19,108,351

 

 

$

18,801,510

 

Securities

 

 

2,968,327

 

 

 

3,082,704

 

Total loans (LHFS + LHFI)

 

 

14,114,735

 

 

 

13,776,297

 

Deposits

 

 

16,058,060

 

 

 

15,630,974

 

Total shareholders' equity

 

 

2,093,259

 

 

 

2,114,268

 

 

 

 

 

 

 

 

Stock Performance

 

 

 

 

 

 

Market value - close

 

$

44.83

 

 

$

39.60

 

Book value

 

 

36.21

 

 

 

35.16

 

Tangible book value

 

 

30.42

 

 

 

29.60

 

 

 

 

 

 

 

 

Capital Ratios

 

 

 

 

 

 

Total equity / total assets

 

 

10.95

%

 

 

11.25

%

Tangible equity / tangible assets

 

 

9.37

%

 

 

9.64

%

Tangible equity / risk-weighted assets

 

 

11.15

%

 

 

11.66

%

Tier 1 leverage ratio

 

 

10.39

%

 

 

10.26

%

Common equity Tier 1 risk-based capital ratio

 

 

11.98

%

 

 

11.88

%

Tier 1 risk-based capital ratio

 

 

12.36

%

 

 

12.27

%

Total risk-based capital ratio

 

 

14.57

%

 

 

14.33

%

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 calculation methods may not be comparable with those of other organizations. Also, there may be limits in the usefulness of these measures to investors. As a result, 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.

69

 

The following table reconciles Trustmark’s calculation of these measures to amounts reported under GAAP for the periods presented ($ in thousands, except per share data):

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

TANGIBLE EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE BALANCES

 

 

 

 

 

 

 

 

 

 

 

 

 

Average shareholders' equity

 

 

$

2,145,993

 

 

$

2,090,373

 

 

$

2,144,433

 

 

$

2,041,407

 

Less: Goodwill

 

 

 

(334,605

)

 

 

(334,605

)

 

 

(334,605

)

 

 

(334,605

)

   Identifiable intangible assets

 

 

 

—

 

 

 

(49

)

 

 

—

 

 

 

(80

)

Average tangible shareholders' equity

 

 

$

1,811,388

 

 

$

1,755,719

 

 

$

1,809,828

 

 

$

1,706,722

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERIOD END BALANCES

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

$

2,093,259

 

 

$

2,114,268

 

 

 

 

 

 

 

Less: Goodwill

 

 

 

(334,605

)

 

 

(334,605

)

 

 

 

 

 

 

   Identifiable intangible assets

 

 

 

—

 

 

 

(32

)

 

 

 

 

 

 

Tangible shareholders' equity

(a)

 

$

1,758,654

 

 

$

1,779,631

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TANGIBLE ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

$

19,108,351

 

 

$

18,801,510

 

 

 

 

 

 

 

Less: Goodwill

 

 

 

(334,605

)

 

 

(334,605

)

 

 

 

 

 

 

   Identifiable intangible assets

 

 

 

—

 

 

 

(32

)

 

 

 

 

 

 

Tangible assets

(b)

 

$

18,773,746

 

 

$

18,466,873

 

 

 

 

 

 

 

Risk-weighted assets

(c)

 

$

15,777,643

 

 

$

15,262,807

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME ADJUSTED FOR INTANGIBLE AMORTIZATION

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

$

58,074

 

 

$

56,787

 

 

$

177,711

 

 

$

166,261

 

Plus: Intangible amortization net of tax

 

 

 

—

 

 

 

24

 

 

 

—

 

 

 

72

 

Net income adjusted for intangible amortization

 

 

$

58,074

 

 

$

56,811

 

 

$

177,711

 

 

$

166,333

 

Period end common shares outstanding

(d)

 

 

57,804,451

 

 

 

60,126,376

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TANGIBLE EQUITY MEASUREMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average tangible equity (1)

 

 

 

12.72

%

 

 

12.84

%

 

 

13.13

%

 

 

13.03

%

Tangible equity/tangible assets

(a)/(b)

 

 

9.37

%

 

 

9.64

%

 

 

 

 

 

 

Tangible equity/risk-weighted assets

(a)/(c)

 

 

11.15

%

 

 

11.66

%

 

 

 

 

 

 

Tangible book value

(a)/(d)*1,000

 

$

30.42

 

 

$

29.60

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMMON EQUITY TIER 1 CAPITAL (CET1)

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

$

2,093,259

 

 

$

2,114,268

 

 

 

 

 

 

 

AOCI-related adjustments

 

 

 

117,719

 

 

 

19,380

 

 

 

 

 

 

 

CET1 adjustments and deductions:

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill net of associated deferred tax liabilities (DTLs)

 

 

 

(320,752

)

 

 

(320,754

)

 

 

 

 

 

 

Other adjustments and deductions for CET1 (2)

 

 

 

(14

)

 

 

(111

)

 

 

 

 

 

 

CET1 capital

(e)

 

 

1,890,212

 

 

 

1,812,783

 

 

 

 

 

 

 

Additional Tier 1 capital instruments plus related surplus

 

 

 

60,000

 

 

 

60,000

 

 

 

 

 

 

 

Tier 1 capital

 

 

$

1,950,212

 

 

$

1,872,783

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity tier 1 risk-based capital ratio

(e)/(c)

 

 

11.98

%

 

 

11.88

%

 

 

 

 

 

 

 

(1)
Calculated using annualized net income adjusted for intangible amortization divided by total average tangible equity.
(2)
Includes other intangible assets, net of DTLs, disallowed deferred tax assets and threshold deductions, as applicable.

Trustmark discloses certain non-GAAP financial measures, including operating net income, 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 its 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 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.

70

 

The following table presents a reconciliation of net income (GAAP) to operating net income (Non-GAAP) along with selected financial ratios for the periods presented ($ in thousands, except per share data):

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Net income (GAAP)

 

$

58,074

 

 

$

56,787

 

 

$

177,711

 

 

$

166,261

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-routine transactions (net of taxes):

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale-leaseback, net

 

 

(46,139

)

 

 

—

 

 

 

(46,139

)

 

 

—

 

Securities (gains) losses, net

 

 

46,133

 

 

 

—

 

 

 

46,133

 

 

 

—

 

PCL, LHFI sale of 1-4 family mortgage loans

 

 

—

 

 

 

—

 

 

 

(6,920

)

 

 

—

 

Loss on sale of 1-4 family mortgage loans (incl in Other, net)

 

 

—

 

 

 

—

 

 

 

3,754

 

 

 

—

 

Gain on sale of Visa A shares (incl in Other, net)

 

 

—

 

 

 

—

 

 

 

(2,452

)

 

 

—

 

Visa C shares fair value adjustment (incl in Other, net)

 

 

—

 

 

 

—

 

 

 

(1,244

)

 

 

—

 

Operating net income (Non-GAAP)

 

$

58,068

 

 

$

56,787

 

 

$

170,843

 

 

$

166,261

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS - operating (Non-GAAP)

 

$

1.00

 

 

$

0.94

 

 

$

2.91

 

 

$

2.74

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average shareholders' equity

 

$

2,145,993

 

 

$

2,090,373

 

 

$

2,144,433

 

 

$

2,041,407

 

Impact of non-routine transactions (1)

 

 

(3

)

 

 

—

 

 

 

(3,457

)

 

 

—

 

Average shareholders' equity - operating (Non-GAAP)

 

$

2,145,990

 

 

$

2,090,373

 

 

$

2,140,976

 

 

$

2,041,407

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average tangible shareholders' equity

 

$

1,811,388

 

 

$

1,755,719

 

 

$

1,809,828

 

 

$

1,706,722

 

Impact of non-routine transactions (1)

 

 

(3

)

 

 

—

 

 

 

(3,457

)

 

 

—

 

Average tangible shareholders' equity - operating (Non-GAAP)

 

$

1,811,385

 

 

$

1,755,719

 

 

$

1,806,371

 

 

$

1,706,722

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Ratios - Reported (GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

Return on average equity

 

 

10.74

%

 

 

10.78

%

 

 

11.08

%

 

 

10.89

%

Return on average tangible equity

 

 

12.72

%

 

 

12.84

%

 

 

13.13

%

 

 

13.03

%

Return on average assets

 

 

1.21

%

 

 

1.21

%

 

 

1.25

%

 

 

1.21

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Ratios - Operating (Non-GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

Return on average equity

 

 

10.74

%

 

n/a

 

 

 

10.67

%

 

n/a

 

Return on average tangible equity

 

 

12.72

%

 

n/a

 

 

 

12.65

%

 

n/a

 

Return on average assets

 

 

1.21

%

 

n/a

 

 

 

1.20

%

 

n/a

 

n/a - not applicable. Operating financial ratios (Non-GAAP) are presented only for periods that include non-routine transactions.

(1)
The quarterly average equity impact of non-routine transactions equals one-half of the net after-tax effect for the quarter. The year-to-date impact is calculated by multiplying each quarter's average equity impact, including the carry forward effects from the prior quarters, by the number of days in each quarter divided by the number of days year-to-date.

Results of Operations

Net Interest Income

Net interest income is the principal component of Trustmark’s income stream and represents the difference, or spread, between interest and fee income generated from earning assets and the interest expense paid on deposits and borrowed funds. Fluctuations in interest rates, as well as volume and mix changes in earning assets and interest-bearing liabilities, can materially impact net interest income. The net interest margin is computed by dividing annualized fully taxable equivalent (FTE) net interest income by average interest-earning assets and measures how effectively Trustmark utilizes its interest-earning assets in relationship to the interest cost of funding them. The accompanying yield/rate analysis tables show the average balances for all assets and liabilities of Trustmark and the interest income or expense associated with earning assets and interest-bearing liabilities. The yields and rates have been computed based upon interest income and expense adjusted to an FTE basis using the federal statutory corporate tax rate in effect for each of the periods shown. Loans on nonaccrual have been included in the average loan balances, and interest collected prior to these loans having been placed on nonaccrual has been included in interest income. Loan fees included in interest associated with the average LHFS and LHFI balances were immaterial.

Net interest income-FTE for the three and nine months ended September 30, 2026 increased $5.4 million, or 3.2%, and $21.3 million, or 4.4%, respectively, when compared with the same time periods in 2025. The increase in net interest income-FTE when the three months ended September 30, 2026 is compared to the same time period in 2025 was principally due to declines in all categories of

71

 

interest expense and an increase in interest on securities, partially offset by a decline in interest and fees on LHFS and LHFI-FTE. The increase in net interest income-FTE when the nine months ended September 30, 2026 is compared to the same time period in 2025 was principally due to a decline in all categories of interest expense and increases in interest on securities and interest and fees on LHFS and LHFI-FTE, partially offset by a decline in other interest income. The net interest margin-FTE for the three and nine months ended September 30, 2026 increased 1 basis point to 3.84% and 3 basis points to 3.83%, respectively, when compared to the same time periods in 2025, principally due to a decrease in the cost of interest-bearing liabilities and an increase in the yield on securities, partially offset by a decline in the yield on loans (LHFS and LHFI).

Average interest-earning assets for the three and nine months ended September 30, 2026 totaled $17.615 billion and $17.556 billion, respectively, compared to $17.111 billion and $16.953 billion, respectively, for the same time periods in 2025, an increase of $504.0 million, or 2.9%, and $603.1 million, or 3.6%, respectively, reflecting increases in all categories of average earning assets. Average LHFI increased $332.7 million, or 2.5%, and $495.2 million, or 3.7%, respectively, when the three and nine months ended September 30, 2026 are compared to the same time periods in 2025, principally due to net growth in average balances of commercial and industrial loans, other commercial loans and leases and state and other political subdivision loans, partially offset by net declines in average LHFI secured by real estate. Average LHFS increased $62.5 million, or 28.9%, and $82.3 million, or 40.8%, respectively, when the three and nine months ended September 30, 2026 are compared to the same time periods in 2025, reflecting increases in average balances of loans in the process of being sold and GNMA loans eligible for repurchase. Average securities increased $58.6 million, or 1.9%, and $22.4 million, or 0.7%, respectively, when the three and nine months ended September 30, 2026 are compared to the same time periods in 2025, principally due to securities purchased net of sales, calls, prepayments and maturities of securities. Average other earning assets increased $50.2 million, or 12.9%, and $3.2 million, or 0.8%, respectively, when the three and nine months ended September 30, 2026 are compared to the same time periods in 2025, principally due to increases in the average balances held at the FRBA and the FHLB and average margin futures-options, partially offset by a decline in the average balance of FHLB equity stock held by Trustmark.

Interest income-FTE for the three and nine months ended September 30, 2026 totaled $243.8 million and $719.2 million, respectively, a decrease of $1.7 million, or 0.7%, and an increase of $1.8 million, or 0.3%, respectively, when the three and nine months ended September 30, 2026 are compared to the same time periods in 2025. The yield on total interest-earning assets for the three and nine months ended September 30, 2026 decreased 20 basis points to 5.49% and 18 basis points to 5.48%, respectively, when compared to the same time periods in 2025. The decrease in interest income-FTE when the three months ended September 30, 2026 is compared to the same time period in 2025, was primarily due to a decrease in interest and fees on LHFS and LHFI-FTE, partially offset by an increase in interest on securities. The increase in interest income-FTE when the nine months ended September 30, 2026 is compared to the same time period in 2025, was primarily due to increases in interest on securities and interest and fees on LHFS and LHFI-FTE, partially offset by a decline in other interest income. Interest and fees on LHFS and LHFI-FTE declined $2.6 million, or 1.2%, when the three months ended September 30, 2026 is compared to the same time period in 2025, while the yield on LHFS and LHFI decreased 24 basis points to 5.97%, primarily reflecting a decline in interest rates. During the nine months ended September 30, 2026, interest and fees on LHFS and LHFI-FTE increased $1.0 million, or 0.2%, while the yield on LHFS and LHFI decreased 25 basis points to 5.94%, when compared to the same time period in 2025, primarily due to loan growth, partially offset by a decline in interest rates. Interest on securities increased $1.3 million, or 4.8%, and $2.7 million, or 3.4%, when the three and nine months ended September 30, 2026 are compared to the same time periods in 2025, while the yield on securities increased 10 basis points to 3.60% and 9 basis points to 3.56%, respectively, principally due to the restructuring of the investment securities portfolio during the third quarter of 2026. In September 2026, Trustmark restructured its investment securities portfolio by selling securities available for sale with an amortized cost of $629.5 million that had a weighted-average yield of approximately 1.4% and reinvesting the proceeds with the purchase of $628.0 million of available for sale securities with a weighted-average yield of approximately 5.0%. Other interest income declined $1.9 million, or 14.7%, when the nine months ended September 30, 2026 is compared to the same time period in 2025, while the yield on other earning assets declined 67 basis points to 3.72%, principally due to a decline in the interest earned on balances held at the FRBA which was primarily attributable to the FRB’s decision to reduce the rate paid on balances held at the FRBA during the fourth quarter of 2025.

Average interest-bearing liabilities for the three and nine months ended September 30, 2026 totaled $13.392 billion and $13.467 billion, respectively, compared to $13.052 billion and $12.984 billion, respectively, for the same time periods in 2025, an increase of $339.4 million, or 2.6%, and $482.8 million, or 3.7%, respectively, primarily due to an increase in average interest-bearing deposits, partially offset by declines in average federal funds purchased and securities sold under repurchase agreements and average other borrowings. Average interest-bearing deposits for the three and nine months ended September 30, 2026 increased $664.1 million, or 5.5%, and $618.0 million, or 5.1%, respectively, when compared to the same time periods in 2025, primarily reflecting increases in average interest-bearing demand deposits and average time deposits. Average federal funds purchased and securities sold under repurchase agreements for the three and nine months ended September 30, 2026 decreased $225.7 million, or 53.8%, and $73.2 million, or 17.7%, respectively, when compared to the same time periods in 2025, principally due to a decline in upstream federal funds purchased and the elimination of the customer sweep product during the third quarter of 2025. Average other borrowings for the three and nine months ended September 30, 2026 decreased $99.0 million, or 21.1%, and $62.1 million, or 11.5%, respectively, when compared to the same time periods in 2025, principally due to the decrease in average short-term FHLB advances outstanding with the FHLB of Dallas, partially offset by increases in average balances of GNMA loans eligible for repurchase and average subordinated notes. The increase in the

72

 

average subordinated notes for the three and nine months ended September 30, 2026 when compared to the same time periods in 2025 was due to the $175.0 million aggregate principal amount of subordinated notes (the 2025 Notes) that were issued and sold by Trustmark during the fourth quarter of 2025, partially offset by the pay-off of the $125.0 million aggregate principal amount of the notes issued and sold in 2020.

Interest expense for the three and nine months ended September 30, 2026 totaled $73.3 million and $216.6 million, respectively, a decrease of $7.0 million, or 8.7%, and $19.5 million, or 8.2%, respectively, when compared with the same time periods in 2025, while the rate on total interest-bearing liabilities decreased 27 basis points to 2.17% and 28 basis points to 2.15%, respectively, primarily reflecting declines in all categories of interest expense. Interest on deposits for the three and nine months ended September 30, 2026 decreased $3.5 million, or 4.9%, and $14.0 million, or 6.8%, while the rate on interest-bearing deposits decreased 23 basis points to 2.09% and 26 basis points to 2.04%, respectively, when compared to the same time periods in 2025, primarily due to declines in interest rates paid on interest-bearing deposit accounts. Interest on federal funds purchased and securities sold under repurchase agreements for the three and nine months ended September 30, 2026 declined $2.8 million, or 60.2%, and $3.9 million, or 28.8%, respectively, while the rate on federal funds purchased and securities sold under repurchase agreements decreased 60 basis points to 3.77% and 58 basis points to 3.76%, respectively, when compared to the same time periods in 2025, primarily reflecting declines in the target federal funds rate by the FRB during the fourth quarter of 2025. Other interest expense for the three and nine months ended September 30, 2026 declined $742 thousand, or 16.2%, and $1.6 million, or 10.0%, respectively, when compared to the same time periods in 2025, while the rate on other borrowings increased 24 basis points to 4.12% and 7 basis points to 3.95%, respectively, primarily due to the declines in the average balance of outstanding FHLB advances with the FHLB of Dallas, partially offset by an increase in interest expense on the 2025 Notes.

73

 

The following tables provide the tax equivalent basis yield or rate for each component of the tax equivalent net interest margin for the periods presented ($ in thousands):

 

 

 

Three Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average
Balance

 

 

Interest

 

 

Yield/
Rate

 

 

Average
Balance

 

 

Interest

 

 

Yield/
Rate

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities

 

$

3,078,234

 

 

$

27,914

 

 

 

3.60

%

 

$

3,019,667

 

 

$

26,625

 

 

 

3.50

%

Loans (LHFS and LHFI)

 

 

14,097,321

 

 

 

211,990

 

 

 

5.97

%

 

 

13,702,038

 

 

 

214,636

 

 

 

6.21

%

Other earning assets

 

 

439,189

 

 

 

3,932

 

 

 

3.55

%

 

 

389,021

 

 

 

4,233

 

 

 

4.32

%

Total interest-earning assets

 

 

17,614,744

 

 

 

243,836

 

 

 

5.49

%

 

 

17,110,726

 

 

 

245,494

 

 

 

5.69

%

Other assets

 

 

1,627,559

 

 

 

 

 

 

 

 

 

1,627,362

 

 

 

 

 

 

 

ACL, LHFI

 

 

(147,729

)

 

 

 

 

 

 

 

 

(167,775

)

 

 

 

 

 

 

Total assets

 

$

19,094,574

 

 

 

 

 

 

 

 

$

18,570,313

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

12,827,431

 

 

 

67,582

 

 

 

2.09

%

 

$

12,163,324

 

 

 

71,065

 

 

 

2.32

%

Federal funds purchased and
   securities sold under repurchase
   agreements

 

 

194,076

 

 

 

1,843

 

 

 

3.77

%

 

 

419,802

 

 

 

4,626

 

 

 

4.37

%

Other borrowings

 

 

370,320

 

 

 

3,843

 

 

 

4.12

%

 

 

469,316

 

 

 

4,585

 

 

 

3.88

%

Total interest-bearing liabilities

 

 

13,391,827

 

 

 

73,268

 

 

 

2.17

%

 

 

13,052,442

 

 

 

80,276

 

 

 

2.44

%

Noninterest-bearing demand deposits

 

 

3,246,664

 

 

 

 

 

 

 

 

 

3,194,587

 

 

 

 

 

 

 

Other liabilities

 

 

310,090

 

 

 

 

 

 

 

 

 

232,911

 

 

 

 

 

 

 

Shareholders' equity

 

 

2,145,993

 

 

 

 

 

 

 

 

 

2,090,373

 

 

 

 

 

 

 

Total liabilities and
   shareholders' equity

 

$

19,094,574

 

 

 

 

 

 

 

 

$

18,570,313

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

 

 

 

 

170,568

 

 

 

3.84

%

 

 

 

 

 

165,218

 

 

 

3.83

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less tax equivalent adjustment

 

 

 

 

 

2,921

 

 

 

 

 

 

 

 

 

2,777

 

 

 

 

Net interest margin per
   consolidated statements
   of income

 

 

 

 

$

167,647

 

 

 

 

 

 

 

 

$

162,441

 

 

 

 

 

74

 

 

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

 

Average
Balance

 

 

Interest

 

 

Yield/
Rate

 

 

Average
Balance

 

 

Interest

 

 

Yield/
Rate

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities

 

$

3,062,370

 

 

$

81,647

 

 

 

3.56

%

 

$

3,039,971

 

 

$

78,950

 

 

 

3.47

%

Loans (LHFS and LHFI)

 

 

14,100,851

 

 

 

626,664

 

 

 

5.94

%

 

 

13,523,338

 

 

 

625,642

 

 

 

6.19

%

Other earning assets

 

 

393,014

 

 

 

10,933

 

 

 

3.72

%

 

 

389,839

 

 

 

12,813

 

 

 

4.39

%

Total interest-earning assets

 

 

17,556,235

 

 

 

719,244

 

 

 

5.48

%

 

 

16,953,148

 

 

 

717,405

 

 

 

5.66

%

Other assets

 

 

1,634,723

 

 

 

 

 

 

 

 

 

1,619,253

 

 

 

 

 

 

 

ACL, LHFI

 

 

(154,709

)

 

 

 

 

 

 

 

 

(164,728

)

 

 

 

 

 

 

Total assets

 

$

19,036,249

 

 

 

 

 

 

 

 

$

18,407,673

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

12,649,403

 

 

 

192,930

 

 

 

2.04

%

 

$

12,031,383

 

 

 

206,960

 

 

 

2.30

%

Federal funds purchased and
   securities sold under repurchase
   agreements

 

 

340,586

 

 

 

9,566

 

 

 

3.76

%

 

 

413,752

 

 

 

13,437

 

 

 

4.34

%

Other borrowings

 

 

476,515

 

 

 

14,086

 

 

 

3.95

%

 

 

538,588

 

 

 

15,643

 

 

 

3.88

%

Total interest-bearing liabilities

 

 

13,466,504

 

 

 

216,582

 

 

 

2.15

%

 

 

12,983,723

 

 

 

236,040

 

 

 

2.43

%

Noninterest-bearing demand deposits

 

 

3,164,040

 

 

 

 

 

 

 

 

 

3,141,082

 

 

 

 

 

 

 

Other liabilities

 

 

261,272

 

 

 

 

 

 

 

 

 

241,461

 

 

 

 

 

 

 

Shareholders' equity

 

 

2,144,433

 

 

 

 

 

 

 

 

 

2,041,407

 

 

 

 

 

 

 

Total liabilities and
   shareholders' equity

 

$

19,036,249

 

 

 

 

 

 

 

 

$

18,407,673

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

 

 

 

 

502,662

 

 

 

3.83

%

 

 

 

 

 

481,365

 

 

 

3.80

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less tax equivalent adjustment

 

 

 

 

 

8,826

 

 

 

 

 

 

 

 

 

8,113

 

 

 

 

Net interest margin per
   consolidated statements
   of income

 

 

 

 

$

493,836

 

 

 

 

 

 

 

 

$

473,252

 

 

 

 

Provision for Credit Losses

LHFI

The PCL, LHFI is the amount necessary to maintain the ACL for LHFI at the amount of expected credit losses inherent within the LHFI portfolio. The amount of PCL and the related ACL for LHFI are based on Trustmark’s ACL methodology. The total PCL, LHFI for the three and nine months ended September 30, 2026 totaled $1.2 million and $1.1 million, respectively. The total PCL, LHFI for the nine months ended September 30, 2026 included a provision release of $9.2 million as a result of the sale of 1-4 family mortgage loans during the second quarter of 2026. The PCL, LHFI excluding the sale of 1-4 family mortgage loans totaled $1.2 million and $10.3 million, respectively, for the three and nine months ended September 30, 2026, compared to a PCL, LHFI of $1.4 million and $14.9 million, respectively, for the same time periods in 2025, a decrease of $211 thousand, or 15.2%, and $4.5 million, or 30.6%, respectively. The decrease in the PCL, LHFI excluding the sale of 1-4 family mortgage loans when the three months ended September 30, 2026 is compared to the same time period in 2025 was principally due to a decline in required reserves as a result of updates to various factors, positive credit migration, a decline in loan growth and changes in the macroeconomic forecast, partially offset by an increase in required reserves on individually analyzed credits and reserves released as a result of the resolution of the Credit Quality Review Qualitative Factor during the third quarter of 2025. The decrease in the PCL, LHFI excluding the sale of 1-4 family mortgage loans when the nine months ended September 30, 2026 is compared to the same time period in 2025 was principally due to a decline in required reserves as a result of positive credit migration, a decline in loan growth and changes in the macroeconomic forecast, partially offset by an increase in required reserves on individually analyzed credits and reserves released as a result of the resolution of the Credit Quality Review Qualitative Factor during the third quarter of 2025.

75

 

Off-Balance Sheet Credit Exposures

FASB ASC Topic 326 requires Trustmark to estimate expected credit losses for off-balance sheet credit exposures which are not unconditionally cancellable by Trustmark. Trustmark maintains a separate ACL for off-balance sheet credit exposures, including unfunded commitments and letters of credit. Adjustments to the ACL on off-balance sheet credit exposures are recorded to the PCL, off-balance sheet credit exposures. The PCL, off-balance sheet credit exposures totaled $1.1 million and $668 thousand, respectively, for the three and nine months ended September 30, 2026, compared to $295 thousand and a negative $3.2 million, respectively, for the same time periods in 2025, an increase in provision expense of $790 thousand and $3.9 million, respectively. The increase in the PCL, off-balance sheet credit exposures when the three months ended September 30, 2026 is compared to the same time period in 2025, was primarily due to an increase in unfunded commitment balances and reserves released as a result of the resolution of the Credit Quality Review Qualitative Factor during the third quarter of 2025, partially offset by positive credit migration and a decrease in reserves resulting from changes in the quantitative reserve rates due to changes in the macroeconomic forecast. The increase in the PCL, off-balance sheet credit exposures when the nine months ended September 30, 2026 is compared to the same time period in 2025, was primarily due to increases in the quantitative reserve rates due to changes in the macroeconomic forecast and the historical utilization rates, reserves released as a result of the resolution of the Credit Quality Review Qualitative Factor during the third quarter of 2025 and increases in unfunded commitment balances.

 

See the section captioned “ACL on LHFI and Off-Balance Sheet Credit Exposures” for information regarding Trustmark’s ACL methodology as well as further analysis of the PCL.

Noninterest Income

The following table provides the comparative components of noninterest income for the periods presented ($ in thousands):

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

$ Change

 

 

% Change

 

 

2026

 

 

2025

 

 

$ Change

 

 

% Change

 

Service charges on deposit
   accounts

 

$

10,626

 

 

$

11,251

 

 

$

(625

)

 

 

-5.6

%

 

$

31,655

 

 

$

32,472

 

 

$

(817

)

 

 

-2.5

%

Bank card and other fees

 

 

8,149

 

 

 

8,318

 

 

 

(169

)

 

 

-2.0

%

 

 

24,880

 

 

 

24,736

 

 

 

144

 

 

 

0.6

%

Mortgage banking, net

 

 

7,880

 

 

 

8,182

 

 

 

(302

)

 

 

-3.7

%

 

 

25,728

 

 

 

25,555

 

 

 

173

 

 

 

0.7

%

Wealth management

 

 

11,161

 

 

 

9,798

 

 

 

1,363

 

 

 

13.9

%

 

 

32,476

 

 

 

28,979

 

 

 

3,497

 

 

 

12.1

%

Other, net

 

 

1,677

 

 

 

2,382

 

 

 

(705

)

 

 

-29.6

%

 

 

9,670

 

 

 

10,663

 

 

 

(993

)

 

 

-9.3

%

Gain on sale-leaseback, net

 

 

61,518

 

 

 

—

 

 

 

61,518

 

 

n/m

 

 

 

61,518

 

 

 

—

 

 

 

61,518

 

 

n/m

 

Securities gains (losses), net

 

 

(61,511

)

 

 

—

 

 

 

(61,511

)

 

n/m

 

 

 

(61,511

)

 

 

—

 

 

 

(61,511

)

 

n/m

 

Total noninterest income

 

$

39,500

 

 

$

39,931

 

 

$

(431

)

 

 

-1.1

%

 

$

124,416

 

 

$

122,405

 

 

$

2,011

 

 

 

1.6

%

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

Changes in various components of noninterest income are discussed in further detail below. For analysis of Trustmark’s wealth management income, please see the section captioned “Results of Segment Operations.”

Service Charges on Deposit Accounts

The decrease in service charges on deposit accounts when the three months ended September 30, 2026 is compared to the same time period in 2025, was principally due to declines in non-sufficient funds and overdraft fees on commercial demand deposit accounts and consumer interest checking accounts.

76

 

Mortgage Banking, Net

The following table illustrates the components of mortgage banking, net included in noninterest income for the periods presented ($ in thousands):

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

$ Change

 

 

% Change

 

 

2026

 

 

2025

 

 

$ Change

 

 

% Change

 

Mortgage servicing income, net

 

$

7,520

 

 

$

7,251

 

 

$

269

 

 

 

3.7

%

 

$

22,310

 

 

$

21,554

 

 

$

756

 

 

 

3.5

%

Change in fair value-MSR from
   runoff

 

 

(3,874

)

 

 

(3,441

)

 

 

(433

)

 

 

-12.6

%

 

 

(10,510

)

 

 

(9,099

)

 

 

(1,411

)

 

 

-15.5

%

Gain on sales of loans, net

 

 

3,951

 

 

 

5,230

 

 

 

(1,279

)

 

 

-24.5

%

 

 

13,542

 

 

 

15,080

 

 

 

(1,538

)

 

 

-10.2

%

Mortgage banking income
   before net hedge
   ineffectiveness

 

 

7,597

 

 

 

9,040

 

 

 

(1,443

)

 

 

-16.0

%

 

 

25,342

 

 

 

27,535

 

 

 

(2,193

)

 

 

-8.0

%

Change in fair value-MSR from
   market changes

 

 

14,175

 

 

 

(1,521

)

 

 

15,696

 

 

n/m

 

 

 

21,457

 

 

 

(9,395

)

 

 

30,852

 

 

n/m

 

Change in fair value of
   derivatives

 

 

(13,892

)

 

 

663

 

 

 

(14,555

)

 

n/m

 

 

 

(21,071

)

 

 

7,415

 

 

 

(28,486

)

 

n/m

 

Net hedge ineffectiveness

 

 

283

 

 

 

(858

)

 

 

1,141

 

 

n/m

 

 

 

386

 

 

 

(1,980

)

 

 

2,366

 

 

n/m

 

Mortgage banking, net

 

$

7,880

 

 

$

8,182

 

 

$

(302

)

 

 

-3.7

%

 

$

25,728

 

 

$

25,555

 

 

$

173

 

 

 

0.7

%

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

The decrease in mortgage banking, net when the three months ended September 30, 2026 is compared to the same time period in 2025, was principally due to a decline in the gain on sales of loans, net and an increase in the run-off of the MSR, partially offset by an increase in the net hedge ineffectiveness. Mortgage loan production for the three and nine months ended September 30, 2026 was $421.4 million and $1.273 billion, respectively, an increase of $32.0 million, or 8.2%, and $139.0 million, or 12.3%, respectively, when compared to the same time periods in 2025. Loans serviced for others totaled $9.129 billion at September 30, 2026, compared with $8.912 billion at September 30, 2025, an increase of $216.3 million, or 2.4%.

Representing a significant component of mortgage banking income is the gain on sales of loans, net. The decrease in the gain on sales of loans, net when the three and nine months ended September 30, 2026 are compared to the same time periods in 2025, was primarily the result of a decrease in the market valuation adjustment, partially offset by an increase in the volume of loans sold. Loan sales totaled $340.5 million and $937.3 million, respectively, for the three and nine months ended September 30, 2026, an increase of $12.9 million, or 3.9%, and $79.0 million, or 9.2%, respectively, when compared with the same time periods in 2025.

Other, Net

The following table illustrates the components of other, net included in noninterest income for the periods presented ($ in thousands):

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

$ Change

 

 

% Change

 

 

2026

 

 

2025

 

 

$ Change

 

 

% Change

 

Partnership amortization for tax
   credit purposes

 

$

(2,196

)

 

$

(2,385

)

 

$

189

 

 

 

7.9

%

 

$

(6,560

)

 

$

(6,646

)

 

$

86

 

 

 

1.3

%

Increase in life insurance cash
   surrender value

 

 

1,970

 

 

 

1,945

 

 

 

25

 

 

 

1.3

%

 

 

5,767

 

 

 

5,723

 

 

 

44

 

 

 

0.8

%

Loss on sale of 1-4 family
   mortgage loans

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(5,005

)

 

 

—

 

 

 

(5,005

)

 

n/m

 

Gain on sale of Visa A shares

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,269

 

 

 

—

 

 

 

3,269

 

 

n/m

 

Visa C shares fair value
   adjustment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,659

 

 

 

—

 

 

 

1,659

 

 

n/m

 

Other miscellaneous income

 

 

1,903

 

 

 

2,822

 

 

 

(919

)

 

 

-32.6

%

 

 

10,540

 

 

 

11,586

 

 

 

(1,046

)

 

 

-9.0

%

Total other, net

 

$

1,677

 

 

$

2,382

 

 

$

(705

)

 

 

-29.6

%

 

$

9,670

 

 

$

10,663

 

 

$

(993

)

 

 

-9.3

%

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

The decrease in other, net when the three months ended September 30, 2026 is compared to the same time period in 2025 was principally due to a decline in other miscellaneous income, primarily due to a decline in cash management fees partially offset by an increase in gains on non-qualified benefit plans. The decrease in other, net when the nine months ended September 30, 2026 is compared to the same time period in 2025 was principally due to the loss on the sale of the 1-4 family mortgage loans and a decline in other miscellaneous income, partially offset by the total gain on the sale of the Visa A shares and fair value adjustment of the Visa C shares. The decrease in other miscellaneous income when the first nine months of 2026 is compared to the same time period in 2025, was principally due to

77

 

declines in cash management fees and gains on sales of premises and equipment, partially offset by an increase in income from other partnership investments.

Noninterest Expense

The following table illustrates the comparative components of noninterest expense for the periods presented ($ in thousands):

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

$ Change

 

 

% Change

 

 

2026

 

 

2025

 

 

$ Change

 

 

% Change

 

Salaries and employee benefits

 

$

74,684

 

 

$

71,508

 

 

$

3,176

 

 

 

4.4

%

 

$

221,916

 

 

$

208,298

 

 

$

13,618

 

 

 

6.5

%

Services and fees

 

 

29,945

 

 

 

28,777

 

 

 

1,168

 

 

 

4.1

%

 

 

87,637

 

 

 

82,022

 

 

 

5,615

 

 

 

6.8

%

Net occupancy-premises

 

 

8,555

 

 

 

7,774

 

 

 

781

 

 

 

10.0

%

 

 

24,109

 

 

 

22,666

 

 

 

1,443

 

 

 

6.4

%

Equipment expense

 

 

6,958

 

 

 

6,410

 

 

 

548

 

 

 

8.5

%

 

 

21,223

 

 

 

18,924

 

 

 

2,299

 

 

 

12.1

%

Other expense

 

 

14,294

 

 

 

16,464

 

 

 

(2,170

)

 

 

-13.2

%

 

 

45,393

 

 

 

48,148

 

 

 

(2,755

)

 

 

-5.7

%

Total noninterest expense

 

$

134,436

 

 

$

130,933

 

 

$

3,503

 

 

 

2.7

%

 

$

400,278

 

 

$

380,058

 

 

$

20,220

 

 

 

5.3

%

Changes in the various components of noninterest expense are discussed in further detail below. Management considers disciplined expense management a key area of focus in the support of improving shareholder value.

Salaries and Employee Benefits

The increase in salaries and employee benefits when the three months ended September 30, 2026 is compared to the same time period in 2025 was principally due to increases in salaries expense primarily due to general merit increases, commission expense related to mortgage origination production and brokerage activity and incentive stock compensation expense, partially offset by a decline in annual management performance incentives. The increase in salaries and employee benefits when the nine months ended September 30, 2026 is compared to the same time period in 2025 was principally due to increases in salaries expense primarily due to general merit increases, commission expense related to mortgage origination production and brokerage activity, incentive stock compensation expense, payroll taxes, contributions to employee retirement funds and medical insurance expense.

Services and Fees

The increase in services and fees when the three months ended September 30, 2026 is compared to the same time period in 2025 was principally due to increases in data processing expenses related to software, partially offset by declines in business process outsourcing expenses and outside services and fees. The increase in services and fees when the nine months ended September 30, 2026 is compared to the same time period in 2025 was principally due to increases in data processing expenses related to software and advertising expense, partially offset by a decline in outside services and fees.

Net Occupancy-Premises

In September 2026, Trustmark completed a sale-leaseback transaction in which 34 bank branch properties owned and operated by TB were sold and concurrently leased back. Each of the lease agreements has an initial term of 15 years and three consecutive renewal options of five years each. The initial aggregate annual rent payable by TB under the lease agreements is $6.4 million, subject to a 1.5% annual rent escalation during the initial term and the renewal terms, if exercised. Rent expense is recognized on a straight-line basis over the 15-year term. Trustmark will recognize annual rent expense of $7.1 million related to these lease agreements, which will be partially offset by the depreciation expense savings as a result of the properties sold. During the three months ended September 30, 2026, Trustmark recognized rent expense of $556 thousand and depreciation savings of $109 thousand as a result of the sale-leaseback transaction.

Equipment Expense

The increase in equipment expense when the three and nine months ended September 30, 2026 are compared to the same time periods in 2025 was principally due to an increase in data processing equipment expense.

78

 

Other Expense

The following table illustrates the comparative components of other noninterest expense for the periods presented ($ in thousands):

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

$ Change

 

 

% Change

 

 

2026

 

 

2025

 

 

$ Change

 

 

% Change

 

Loan expense

 

$

3,371

 

 

$

3,287

 

 

$

84

 

 

 

2.6

%

 

$

10,170

 

 

$

9,456

 

 

$

714

 

 

 

7.6

%

Amortization of intangibles

 

 

—

 

 

 

31

 

 

 

(31

)

 

 

-100.0

%

 

 

—

 

 

 

94

 

 

 

(94

)

 

 

-100.0

%

FDIC assessment expense

 

 

3,287

 

 

 

3,935

 

 

 

(648

)

 

 

-16.5

%

 

 

10,283

 

 

 

12,159

 

 

 

(1,876

)

 

 

-15.4

%

Other real estate expense, net

 

 

(110

)

 

 

1,932

 

 

 

(2,042

)

 

n/m

 

 

 

762

 

 

 

2,543

 

 

 

(1,781

)

 

 

-70.0

%

Other miscellaneous expense

 

 

7,746

 

 

 

7,279

 

 

 

467

 

 

 

6.4

%

 

 

24,178

 

 

 

23,896

 

 

 

282

 

 

 

1.2

%

Total other expense

 

$

14,294

 

 

$

16,464

 

 

$

(2,170

)

 

 

-13.2

%

 

$

45,393

 

 

$

48,148

 

 

$

(2,755

)

 

 

-5.7

%

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

The decrease in other expense when the three months ended September 30, 2026 is compared to the same time period in 2025 was principally due to declines in other real estate expense and FDIC assessment expense. The decrease in other expense when the nine months ended September 30, 2026 is compared to the same time period in 2025 was principally due to declines in FDIC assessment expense and other real estate expense, partially offset by an increase in loan expense.

Results of Segment Operations

For a description of the methodologies used to measure financial performance and financial information by reportable segment, please see Note 17 – Segment Information included in Part I. Item 1. – Financial Statements of this report. The following discusses changes in the results of operations of each reportable segment for the nine months ended September 30, 2026 and 2025.

General Banking

Net interest income for the General Banking Segment increased $18.3 million, or 3.9%, when the nine months ended September 30, 2026 is compared with the same time period in 2025. The increase in net interest income was primarily due to declines in all categories of interest expense as well as an increase in interest on securities, partially offset by a decline in other interest income. The net PCL (LHFI and off-balance sheet credit exposures) for the General Banking Segment for the nine months ended September 30, 2026 totaled $1.5 million compared to a net PCL of $11.7 million for the same time period in 2025, a decrease of $10.1 million, or 86.9%, principally due to reserves released as a result of the sale of 1-4 family mortgage loans during the second quarter of 2026. For more information on these net interest income and PCL items, please see the sections captioned “Financial Highlights” and “Results of Operations.”

Noninterest income for the General Banking Segment decreased $1.9 million, or 2.0%, when the first nine months of 2026 is compared to the same time period in 2025, principally due to declines in other, net and service charges on deposit accounts. The decrease in other, net when the first nine months of 2026 is compared to the same time period in 2025 was primarily due to declines in cash management fees and gains on sales of premises and equipment, partially offset by an increase in income from other partnership investments. The decline in service charges on deposit accounts when the first nine months of 2026 is compared to the same time period in 2025 was primarily due to declines in service charges on consumer interest checking accounts, consumer demand deposit accounts and public interest checking accounts. Noninterest income for the General Banking Segment includes service charges on deposit accounts; bank card and other fees; mortgage banking, net; wealth management; other, net; gain on sale-leaseback, net and securities gains (losses), net. For more information on these noninterest income items, please see the analysis included in the section captioned “Noninterest Income.”

Noninterest expense for the General Banking Segment increased $17.9 million, or 5.0%, when the first nine months of 2026 is compared with the same time period in 2025, principally due to increases in salaries and employee benefits, data processing expense related to software, data processing equipment expense and office occupancy expense, partially offset by declines in FDIC assessment expense, other real estate expense, net and outside services and fees. For more information on these noninterest expense items, please see the analysis included in the section captioned “Noninterest Expense.”

Wealth Management

Net income for the Wealth Management Segment for the first nine months of 2026 increased $2.7 million, or 32.5%, when compared to the same time period in 2025, reflecting increases in net interest income and noninterest income, partially offset by an increase in noninterest expense. Net interest income for the Wealth Management Segment for the nine months ended September 30, 2026 increased $2.3 million, or 34.6%, when compared to the same time period in 2025, principally due to an increase in the earnings credits assigned to the Wealth Management Segment related to deposits generated by the Private Banking group. The net PCL for the nine months ended

79

 

September 30, 2026 totaled $225 thousand compared to a negative net PCL of $22 thousand for the same period in 2025, an increase of $247 thousand. Noninterest income for the Wealth Management Segment, which primarily includes income related to investment management, trust and brokerage services, increased $3.9 million, or 13.3%, when the first nine months of 2026 is compared to the same time period in 2025, primarily due to an increase in income from brokerage and trust management services. Noninterest expense for the Wealth Management Segment increased $2.3 million, or 9.4%, when the first nine months of 2026 is compared to the same time period in 2025, principally due to an increase in salaries and employee benefits, primarily related to broker commissions and general merit increases, and indirect expenses allocated to the Wealth Management Segment.

At September 30, 2026 and 2025, Trustmark held assets under management and administration of $11.408 billion and $10.120 billion, respectively, and brokerage assets of $2.976 billion and $2.154 billion, respectively.

Income Taxes

For the three and nine months ended September 30, 2026, Trustmark’s combined effective tax rate was 17.6% and 17.8%, respectively, compared to 18.6% and 18.5%, respectively, for the same time periods in 2025. Trustmark’s effective tax rate continues to be less than the statutory rate primarily due to various tax-exempt income items and its utilization of income tax credit programs. 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 or 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.

Financial Condition

Trustmark's earning assets consist of securities, loans and other earning assets and serve as its primary revenue streams. Average earning assets totaled $17.556 billion, or 92.2% of total average assets, for the nine months ended September 30, 2026, compared to $16.953 billion, or 92.1% of total average assets, for the nine months ended September 30, 2025, an increase of $603.1 million, or 3.6%.

Securities

Management utilizes the securities portfolio to manage interest rate risk, generate interest income, provide liquidity and serve as collateral for public deposits and wholesale funding. Risk and return can be adjusted by altering duration, composition and/or balance of the portfolio. The weighted-average life of the portfolio was 5.1 years at September 30, 2026 compared to 4.3 years at December 31, 2025. The increase in the weighted-average life of the portfolio was primarily due to the restructuring of the securities portfolio during the third quarter of 2026.

When compared to December 31, 2025, total investment securities decreased by $116.0 million, or 3.8%, during the first nine months of 2026. This decrease resulted primarily from sales, calls, maturities and pay-downs of the loans underlying GSE guaranteed securities and a decrease in the fair market value of the available for sale securities, partially offset by purchases of available for sale securities. Trustmark sold securities available for sale with an amortized cost of $629.5 million during the first nine months of 2026 generating a loss of $61.5 million. Trustmark sold no securities during the first nine months of 2025.

During the third quarter of 2026, Trustmark executed a restructuring of its investment securities portfolio to reposition lower-yielding investment securities into higher-yielding investment securities. In connection with the restructuring, Trustmark changed its intent to hold its securities held to maturity until maturity and transferred all of its securities held to maturity, with an amortized cost of $1.118 billion, to securities available for sale. At the transfer date, the transferred securities had an unrealized loss of $43.5 million.

The amortized cost basis of the securities transferred back to securities available for sale included the remaining net unrealized loss created by the prior transfers of securities available for sale to held to maturity. For securities that were not subsequently sold, that net unrealized loss remaining in accumulated other comprehensive income (loss) (AOCI), continues to be amortized over the remaining lives of the securities as a yield adjustment. At September 30, 2026, the net unamortized, unrealized loss included in AOCI in the accompanying consolidated balance sheets related to securities previously transferred from available for sale to held to maturity totaled $7.2 million compared to $36.3 million at December 31, 2025, with the decrease primarily due to the sale of securities.

Available for sale securities are carried at their estimated fair value with unrealized gains or losses recognized, net of taxes, in AOCI, a separate component of shareholders’ equity. At September 30, 2026, available for sale securities totaled $2.968 billion, which represented 100.0% of the securities portfolio, compared to $1.877 billion, or 60.9% of total securities, at December 31, 2025. At September 30, 2026, unrealized losses, net on available for sale securities totaled $112.0 million compared to unrealized gains, net of $34.4 million at December 31, 2025. At September 30, 2026, available for sale securities consisted of U.S. Treasury securities, direct obligations of government agencies and GSE guaranteed mortgage-related securities.

80

 

Held to maturity securities are carried at amortized cost and represent those securities that Trustmark both intends and has the ability to hold to maturity. As a result of the transfer of securities held to maturity to securities available for sale during the third quarter of 2026, Trustmark had no securities held to maturity at September 30, 2026, compared to $1.207 billion, or 39.1% of total securities, at December 31, 2025. As a result of the transfer, Trustmark intends to classify any new securities purchased as securities available for sale and does not anticipate using the held to maturity classification for the foreseeable future.

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, direct obligations of government agencies and GSE-backed obligations. None of the securities owned by Trustmark are collateralized by assets which are considered sub-prime. Furthermore, outside of stock ownership in the FHLB of Dallas and FRBA, Trustmark does not hold any other equity investment in a GSE or other governmental entity.

As of September 30, 2026, Trustmark did not hold securities of any one issuer with a carrying value exceeding 10% of total shareholders’ equity, other than certain GSEs which are exempt from inclusion. Management continues to closely monitor the credit quality as well as the ratings of the debt and mortgage-backed securities issued by the GSEs and held in Trustmark’s securities portfolio.

The following tables present Trustmark’s securities portfolio by amortized cost and estimated fair value and by credit rating, as determined by Moody’s, at September 30, 2026 and December 31, 2025 ($ in thousands):

 

 

 

September 30, 2026

 

 

 

Amortized Cost

 

 

Estimated Fair Value

 

 

 

Amount

 

 

%

 

 

Amount

 

 

%

 

Securities Available for Sale

 

 

 

 

 

 

 

 

 

 

 

 

Aaa

 

$

70,613

 

 

 

2.3

%

 

$

66,794

 

 

 

2.3

%

Aa1 to Aa3

 

 

3,009,700

 

 

 

97.7

%

 

 

2,901,533

 

 

 

97.7

%

Total securities available for sale

 

$

3,080,313

 

 

 

100.0

%

 

$

2,968,327

 

 

 

100.0

%

 

 

 

December 31, 2025

 

 

 

Amortized Cost

 

 

Estimated Fair Value

 

 

 

Amount

 

 

%

 

 

Amount

 

 

%

 

Securities Available for Sale

 

 

 

 

 

 

 

 

 

 

 

 

Aaa

 

$

39,647

 

 

 

2.2

%

 

$

41,029

 

 

 

2.2

%

Aa1 to Aa3

 

 

1,802,797

 

 

 

97.8

%

 

 

1,835,801

 

 

 

97.8

%

Total securities available for sale

 

$

1,842,444

 

 

 

100.0

%

 

$

1,876,830

 

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities Held to Maturity

 

 

 

 

 

 

 

 

 

 

 

 

Aaa

 

$

52,405

 

 

 

4.3

%

 

$

50,363

 

 

 

4.3

%

Aa1 to Aa3

 

 

1,155,049

 

 

 

95.7

%

 

 

1,130,206

 

 

 

95.7

%

Total securities held to maturity

 

$

1,207,454

 

 

 

100.0

%

 

$

1,180,569

 

 

 

100.0

%

The tables above presenting the credit rating of Trustmark’s securities are formatted to show the securities according to the credit rating category, and not by category of the underlying security.

LHFS

At September 30, 2026, LHFS totaled $245.6 million, consisting of $112.4 million of residential real estate mortgage loans in the process of being sold to third parties and $133.2 million of GNMA optional repurchase loans. At December 31, 2025, LHFS totaled $278.8 million, consisting of $142.5 million of residential real estate mortgage loans in the process of being sold to third parties and $136.3 million of GNMA optional repurchase loans. Please refer to the nonperforming assets table that follows for information on GNMA loans eligible for repurchase which are past due 90 days or more.

Trustmark did not exercise its buy-back option on any delinquent loans serviced for GNMA during the first nine months of 2026 or 2025.

For additional information regarding the GNMA optional repurchase loans, please see the section captioned “Past Due LHFS” included in Note 3 – LHFI and Allowance for Credit Losses, LHFI of Part I. Item 1. – Financial Statements of this report.

81

 

LHFI

At September 30, 2026 and December 31, 2025, LHFI consisted of the following ($ in thousands):

 

 

 

September 30, 2026

 

 

December 31, 2025

 

 

 

Amount

 

 

%

 

 

Amount

 

 

%

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development and other land

 

$

597,759

 

 

 

4.3

%

 

$

549,353

 

 

 

4.0

%

Other secured by 1-4 family residential properties

 

 

729,020

 

 

 

5.3

%

 

 

704,514

 

 

 

5.1

%

Secured by nonfarm, nonresidential properties

 

 

3,192,249

 

 

 

23.0

%

 

 

3,304,523

 

 

 

24.2

%

Other real estate secured

 

 

1,935,208

 

 

 

13.9

%

 

 

2,124,272

 

 

 

15.5

%

Other loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

Other construction

 

 

678,225

 

 

 

4.9

%

 

 

595,238

 

 

 

4.4

%

Secured by 1-4 family residential properties

 

 

2,409,616

 

 

 

17.4

%

 

 

2,351,675

 

 

 

17.2

%

Commercial and industrial loans

 

 

2,212,869

 

 

 

16.0

%

 

 

1,999,464

 

 

 

14.6

%

Consumer loans

 

 

167,535

 

 

 

1.2

%

 

 

163,754

 

 

 

1.2

%

State and other political subdivision loans

 

 

1,003,890

 

 

 

7.2

%

 

 

1,061,584

 

 

 

7.8

%

Other commercial loans and leases

 

 

942,800

 

 

 

6.8

%

 

 

819,856

 

 

 

6.0

%

LHFI

 

$

13,869,171

 

 

 

100.0

%

 

$

13,674,233

 

 

 

100.0

%

 

LHFI increased $194.9 million, or 1.4%, compared to December 31, 2025. The increase in LHFI during the first nine months of 2026 was primarily due to net growth in commercial and industrial loans and other commercial loans and leases, partially offset by net declines in loans secured by real estate and state and other political subdivision loans.

Commercial and industrial loans increased $213.4 million, or 10.7%, during the first nine months of 2026, reflecting growth in the Alabama, Georgia, Mississippi, Texas and Florida market regions, partially offset by a decline in the Tennessee market region. Other commercial loans and leases increased $122.9 million, or 15.0%, during the first nine months of 2026, principally due to increases in equipment finance leases in the Georgia and Alabama market regions and other commercial loans in the Tennessee and Georgia market regions, partially offset by a decline in other commercial loans in the Mississippi and Texas market regions. The equipment finance leases are primarily reported in the Georgia market region because they are centrally analyzed and approved as part of the Equipment Finance line of business which is located in Atlanta, Georgia. State and other political subdivision loans decreased $57.7 million, or 5.4%, during the first nine months of 2026, principally due to declines in the Mississippi, Texas and Florida market regions, partially offset by growth in the Tennessee market region.

Loans secured by real estate decreased $87.5 million, or 0.9%, during the first nine months of 2026, principally due to net declines in other real estate secured loans and loans secured by nonfarm, nonresidential properties (NFNR loans), partially offset by net growth in all other categories of loans secured by real estate. Other real estate secured loans decreased $189.1 million, or 8.9%, during the first nine months of 2026, primarily due to declines in loans secured by multi-family residential properties in the Alabama, Texas, Mississippi and Georgia market regions, partially offset by other construction loans that moved to loans secured by multi-family residential properties in these market regions. Excluding other construction loan reclassifications, other real estate secured loans decreased $641.5 million, or 30.2%, during the first nine months of 2026. NFNR loans declined $112.3 million, or 3.4%, during the first nine months of 2026, principally due to declines in nonowner-occupied and owner-occupied loans in the Texas, Mississippi, Florida, Tennessee and Alabama market regions, partially offset by other construction loans that moved to NFNR loans in the Mississippi, Georgia, Texas and Alabama market regions and growth in nonowner-occupied loans in the Georgia market region. Excluding the other construction loan reclassifications, NFNR loans declined $258.9 million, or 7.8%, during the first nine months of 2026. Other construction loans increased $83.0 million, or 13.9%, during the first nine months of 2026 primarily due to new construction loans in the Mississippi, Alabama, Texas and Georgia market regions, partially offset by other construction loans moved to other loan categories upon the completion of the related construction project in the Alabama, Georgia, Mississippi and Texas market regions. During the first nine months of 2026, $599.0 million of loans were moved from other construction to other loan categories, including $452.4 million to multi-family residential loans, $113.5 million to nonowner-occupied loans and $33.1 million to owner-occupied loans. Excluding all reclassifications between loan categories, growth in other construction loans totaled $680.8 million during the first nine months of 2026. Loans secured by 1-4 family residential properties, which represent traditional mortgage loans, increased $57.9 million, or 2.5%, during the first nine months of 2026 principally due to an increase in mortgage loan originations in the Mississippi market region. Loans secured by 1-4 family residential properties are primarily reported in the Mississippi market region because they are centrally analyzed and approved as part of a specific line of business located at Trustmark's headquarters in Jackson, Mississippi. Construction, land development and other land loans increased $48.4 million, or 8.8%, during the first nine months of 2026, primarily due to growth in 1-4 family construction loans in the Alabama, Texas, Tennessee and Mississippi market regions and growth in other land loans in the Mississippi, Alabama and Florida market regions, partially offset by declines in other land loans in the Texas market region, land development loans in the Mississippi market region and 1-4 family construction loans in the Georgia market region. Other loans secured by 1-4 family residential

82

 

properties increased $24.5 million, or 3.5%, during the first nine months of 2026, reflecting growth in the Mississippi, Alabama, Tennessee and Texas market regions, partially offset by a decline in the Florida market region.

The following table provides information regarding Trustmark’s home equity loans and home equity lines of credit which are included in the other LHFI secured by 1-4 family residential properties for the periods presented ($ in thousands):

 

 

 

September 30, 2026

 

 

December 31, 2025

 

Home equity loans

 

$

64,570

 

 

$

72,895

 

Home equity lines of credit

 

 

525,195

 

 

 

497,937

 

Percentage of loans and lines for which Trustmark holds first lien

 

 

42.9

%

 

 

44.5

%

Percentage of loans and lines for which Trustmark does not hold first lien

 

 

57.1

%

 

 

55.5

%

 

Due to the increased risk associated with second liens, loan terms and underwriting guidelines differ from those used for products secured by first liens. Loan amounts and loan-to-value ratios are limited and are lower for second liens than first liens. Also, interest rates and maximum amortization periods are adjusted accordingly. In addition, regardless of lien position, the passing credit score for approval of all home equity lines of credit is generally higher than that of term loans. The ACL on LHFI is also reflective of the increased risk related to second liens through application of a greater loss factor to this portion of the portfolio.

Trustmark’s variable rate LHFI are based primarily on various prime and SOFR interest rate bases. The following tables provide information regarding the interest rate terms of Trustmark’s LHFI as of September 30, 2026 and December 31, 2025 ($ in thousands):

 

 

 

September 30, 2026

 

 

 

Fixed

 

 

Variable

 

 

Total

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

Construction, land development and other land

 

$

112,872

 

 

$

484,887

 

 

$

597,759

 

Other secured by 1- 4 family residential properties

 

 

198,832

 

 

 

530,188

 

 

 

729,020

 

Secured by nonfarm, nonresidential properties

 

 

1,070,966

 

 

 

2,121,283

 

 

 

3,192,249

 

Other real estate secured

 

 

210,291

 

 

 

1,724,917

 

 

 

1,935,208

 

Other loans secured by real estate:

 

 

 

 

 

 

 

 

 

Other construction

 

 

13,177

 

 

 

665,048

 

 

 

678,225

 

Secured by 1- 4 family residential properties

 

 

981,581

 

 

 

1,428,035

 

 

 

2,409,616

 

Commercial and industrial loans

 

 

755,321

 

 

 

1,457,548

 

 

 

2,212,869

 

Consumer loans

 

 

137,522

 

 

 

30,013

 

 

 

167,535

 

State and other political subdivision loans

 

 

944,356

 

 

 

59,534

 

 

 

1,003,890

 

Other commercial loans and leases

 

 

629,593

 

 

 

313,207

 

 

 

942,800

 

LHFI

 

$

5,054,511

 

 

$

8,814,660

 

 

$

13,869,171

 

 

 

 

December 31, 2025

 

 

 

Fixed

 

 

Variable

 

 

Total

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

Construction, land development and other land

 

$

105,004

 

 

$

444,349

 

 

$

549,353

 

Other secured by 1- 4 family residential properties

 

 

205,341

 

 

 

499,173

 

 

 

704,514

 

Secured by nonfarm, nonresidential properties

 

 

1,226,244

 

 

 

2,078,279

 

 

 

3,304,523

 

Other real estate secured

 

 

201,897

 

 

 

1,922,375

 

 

 

2,124,272

 

Other loans secured by real estate:

 

 

 

 

 

 

 

 

 

Other construction

 

 

23,419

 

 

 

571,819

 

 

 

595,238

 

Secured by 1- 4 family residential properties

 

 

1,107,156

 

 

 

1,244,519

 

 

 

2,351,675

 

Commercial and industrial loans

 

 

804,490

 

 

 

1,194,974

 

 

 

1,999,464

 

Consumer loans

 

 

138,104

 

 

 

25,650

 

 

 

163,754

 

State and other political subdivision loans

 

 

1,010,960

 

 

 

50,624

 

 

 

1,061,584

 

Other commercial loans and leases

 

 

521,855

 

 

 

298,001

 

 

 

819,856

 

LHFI

 

$

5,344,470

 

 

$

8,329,763

 

 

$

13,674,233

 

 

83

 

In the following tables, LHFI reported by region (along with related nonperforming assets and net charge-offs) are associated with location of origination except for loans secured by 1-4 family residential properties (representing traditional mortgages), credit cards and equipment finance loans and leases. Loans secured by 1-4 family residential properties and credit cards are primarily included in the Mississippi market region because they are centrally analyzed and approved as part of a specific line of business located at Trustmark’s headquarters in Jackson, Mississippi. The equipment finance loans and leases are primarily reported in the Georgia market region because they are centrally analyzed and approved as part of the Equipment Finance line of business which is located in Atlanta, Georgia.

The following table presents the LHFI composition by region at September 30, 2026 and reflects each region’s diversified mix of loans ($ in thousands):

 

 

September 30, 2026

 

LHFI Composition by Region

 

Total

 

 

Alabama

 

 

Florida

 

 

Georgia

 

 

Mississippi

 

 

Tennessee

 

 

Texas

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development and
   other land

 

$

597,759

 

 

$

283,974

 

 

$

25,806

 

 

$

12,018

 

 

$

126,368

 

 

$

39,266

 

 

$

110,327

 

Other secured by 1-4 family residential
   properties

 

 

729,020

 

 

 

174,649

 

 

 

65,284

 

 

 

—

 

 

 

353,442

 

 

 

91,673

 

 

 

43,972

 

Secured by nonfarm, nonresidential
   properties

 

 

3,192,249

 

 

 

793,884

 

 

 

151,963

 

 

 

183,497

 

 

 

1,481,129

 

 

 

103,637

 

 

 

478,139

 

Other real estate secured

 

 

1,935,208

 

 

 

703,305

 

 

 

1,534

 

 

 

313,684

 

 

 

596,341

 

 

 

7,037

 

 

 

313,307

 

Other loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other construction

 

 

678,225

 

 

 

171,935

 

 

 

—

 

 

 

93,135

 

 

 

219,274

 

 

 

287

 

 

 

193,594

 

Secured by 1-4 family residential
   properties

 

 

2,409,616

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,408,164

 

 

 

1,452

 

 

 

—

 

Commercial and industrial loans

 

 

2,212,869

 

 

 

648,747

 

 

 

25,164

 

 

 

403,069

 

 

 

747,545

 

 

 

135,609

 

 

 

252,735

 

Consumer loans

 

 

167,535

 

 

 

19,943

 

 

 

8,735

 

 

 

—

 

 

 

95,270

 

 

 

10,512

 

 

 

33,075

 

State and other political subdivision loans

 

 

1,003,890

 

 

 

48,978

 

 

 

55,003

 

 

 

4,690

 

 

 

775,352

 

 

 

31,566

 

 

 

88,301

 

Other commercial loans and leases

 

 

942,800

 

 

 

24,377

 

 

 

4,785

 

 

 

554,618

 

 

 

243,567

 

 

 

58,632

 

 

 

56,821

 

LHFI

 

$

13,869,171

 

 

$

2,869,792

 

 

$

338,274

 

 

$

1,564,711

 

 

$

7,046,452

 

 

$

479,671

 

 

$

1,570,271

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, Land Development and Other Land Loans by Region

 

Lots

 

$

85,078

 

 

$

34,618

 

 

$

11,198

 

 

$

—

 

 

$

20,550

 

 

$

3,896

 

 

$

14,816

 

Development

 

 

77,456

 

 

 

38,722

 

 

 

—

 

 

 

—

 

 

 

12,729

 

 

 

10,776

 

 

 

15,229

 

Unimproved land

 

 

79,546

 

 

 

24,818

 

 

 

5,958

 

 

 

—

 

 

 

22,186

 

 

 

4,557

 

 

 

22,027

 

1-4 family construction

 

 

355,679

 

 

 

185,816

 

 

 

8,650

 

 

 

12,018

 

 

 

70,903

 

 

 

20,037

 

 

 

58,255

 

Construction, land development and
   other land loans

 

$

597,759

 

 

$

283,974

 

 

$

25,806

 

 

$

12,018

 

 

$

126,368

 

 

$

39,266

 

 

$

110,327

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans Secured by NFNR Properties by Region

 

Nonowner-occupied:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

$

246,032

 

 

$

83,270

 

 

$

9,756

 

 

$

19,175

 

 

$

67,548

 

 

$

16,669

 

 

$

49,614

 

Office

 

 

187,460

 

 

 

44,820

 

 

 

16,782

 

 

 

—

 

 

 

85,057

 

 

 

2,468

 

 

 

38,333

 

Hotel/motel

 

 

207,752

 

 

 

122,119

 

 

 

22,760

 

 

 

—

 

 

 

51,501

 

 

 

11,372

 

 

 

—

 

Mini-storage

 

 

199,398

 

 

 

48,355

 

 

 

738

 

 

 

54,854

 

 

 

95,109

 

 

 

342

 

 

 

—

 

Industrial and warehouses

 

 

540,778

 

 

 

97,429

 

 

 

18,617

 

 

 

59,468

 

 

 

281,408

 

 

 

2,904

 

 

 

80,952

 

Health care

 

 

124,921

 

 

 

106,469

 

 

 

641

 

 

 

—

 

 

 

15,589

 

 

 

293

 

 

 

1,929

 

Convenience stores

 

 

16,216

 

 

 

1,254

 

 

 

356

 

 

 

—

 

 

 

8,789

 

 

 

122

 

 

 

5,695

 

Nursing homes/senior living

 

 

162,414

 

 

 

13,948

 

 

 

—

 

 

 

—

 

 

 

124,452

 

 

 

2,885

 

 

 

21,129

 

Other

 

 

194,143

 

 

 

34,736

 

 

 

7,614

 

 

 

50,000

 

 

 

60,991

 

 

 

5,494

 

 

 

35,308

 

Total nonowner-occupied loans

 

 

1,879,114

 

 

 

552,400

 

 

 

77,264

 

 

 

183,497

 

 

 

790,444

 

 

 

42,549

 

 

 

232,960

 

Owner-occupied:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

 

150,402

 

 

 

44,360

 

 

 

27,303

 

 

 

—

 

 

 

42,442

 

 

 

9,895

 

 

 

26,402

 

Churches

 

 

54,565

 

 

 

9,243

 

 

 

3,351

 

 

 

—

 

 

 

37,042

 

 

 

1,745

 

 

 

3,184

 

Industrial and warehouses

 

 

217,650

 

 

 

16,702

 

 

 

6,661

 

 

 

—

 

 

 

68,956

 

 

 

8,771

 

 

 

116,560

 

Health care

 

 

81,578

 

 

 

4,630

 

 

 

13,553

 

 

 

—

 

 

 

57,953

 

 

 

2,049

 

 

 

3,393

 

Convenience stores

 

 

94,334

 

 

 

5,133

 

 

 

2,417

 

 

 

—

 

 

 

54,023

 

 

 

—

 

 

 

32,761

 

Retail

 

 

81,669

 

 

 

16,574

 

 

 

12,614

 

 

 

—

 

 

 

39,287

 

 

 

6,613

 

 

 

6,581

 

Restaurants

 

 

69,171

 

 

 

2,217

 

 

 

1,531

 

 

 

—

 

 

 

36,738

 

 

 

23,745

 

 

 

4,940

 

Auto dealerships

 

 

16,173

 

 

 

1,046

 

 

 

121

 

 

 

—

 

 

 

13,975

 

 

 

1,031

 

 

 

—

 

Nursing homes/senior living

 

 

398,127

 

 

 

124,523

 

 

 

—

 

 

 

—

 

 

 

273,604

 

 

 

—

 

 

 

—

 

Other

 

 

149,466

 

 

 

17,056

 

 

 

7,148

 

 

 

—

 

 

 

66,665

 

 

 

7,239

 

 

 

51,358

 

Total owner-occupied loans

 

 

1,313,135

 

 

 

241,484

 

 

 

74,699

 

 

 

—

 

 

 

690,685

 

 

 

61,088

 

 

 

245,179

 

Loans secured by NFNR properties

 

$

3,192,249

 

 

$

793,884

 

 

$

151,963

 

 

$

183,497

 

 

$

1,481,129

 

 

$

103,637

 

 

$

478,139

 

 

84

 

ACL on LHFI and Off-Balance Sheet Credit Exposures

LHFI

Trustmark’s ACL methodology for LHFI is based upon guidance within FASB ASC Subtopic 326-20, “Financial Instruments – Credit Losses – Measured at Amortized Cost,” as well as applicable regulatory guidance from its primary regulator. The ACL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Credit quality within the LHFI portfolio is continuously monitored by Management and is reflected within the ACL for loans. The ACL is an estimate of expected losses inherent within Trustmark’s existing LHFI portfolio. The ACL on LHFI is adjusted through the PCL, LHFI and reduced by the charge off of loan amounts, net of recoveries.

The loan loss estimation process involves procedures to appropriately consider the unique characteristics of Trustmark’s LHFI portfolio segments. These segments are further disaggregated into loan classes, the level at which credit risk is estimated. When computing allowance levels, credit loss assumptions are estimated using a model that categorizes loan pools based on loss history, delinquency status and other credit trends and risk characteristics, including current conditions and reasonable and supportable forecasts about the future. Evaluations of the portfolio and individual credits are inherently subjective, as they require estimates, assumptions and judgments as to the facts and circumstances of particular situations.

During 2024, Trustmark executed a sale of a portfolio of 1-4 family mortgage loans that were at least three payments delinquent and/or nonaccrual at the time of selection. As a result of this sale, a credit mark was established for a sub-pool of the loans in the sale. Due to the lack of historical experience and the use of industry data for this sub-pool, Management elected to use the credit mark for reserving purposes on a go-forward basis for loans in this sub-pool that meet the same credit criteria of being three payments delinquent and/or nonaccrual. All loans of the sub-pool that meet the above credit criteria will be removed from the 1-4 family residential properties pool and placed into a separate pool with the credit mark reserve applied to the total balance. During the second quarter of 2026, Trustmark executed another sale of 1-4 family mortgage loans that were primarily three payments delinquent and/or nonaccrual at the time of selection. Trustmark elected to update the loss rate for this sub-pool of loans as a result of this sale.

The econometric models currently in production reflect segment or pool level sensitivities of probability of default (PD) to changes in macroeconomic variables. By measuring the relationship between defaults and changes in the economy, the quantitative reserve incorporates reasonable and supportable forecasts of future conditions that will affect the value of Trustmark's assets, as required by FASB ASC Topic 326. Under stable forecasts, these linear regressions will reasonably predict a pool’s PD. However, upon the occurrence of events that generate significant economic instability (such as the COVID-19 pandemic), the macroeconomic variables used for reasonable and supportable forecasting can change rapidly and the econometric models, which are sensitive to similar future levels of PD, may not produce reasonably representative results.

In order to prevent the econometric models from extrapolating beyond reasonable boundaries of their input variables, Trustmark chose to establish an upper and lower limit process when applying the periodic forecasts. In this way, Management will not rely upon unobserved and untested relationships in the setting of the quantitative reserve. This approach applies to all current input variables, including: Southern Unemployment, National Unemployment, National Home Price Index (HPI) and the BBB 7-10 Year US Corporate Bond Index. The upper and lower limits are based on the distribution of the macroeconomic variable by selecting extreme percentiles at the upper and lower limits of the distribution, the 1st and 99th percentiles, respectively. These upper and lower limits are then used to calculate the PD for the forecast time period in which the forecasted values are outside of the upper and lower limit range. Additionally, for periods having a PD or loss given default (LGD) at or near zero as a result of the improving macroeconomic forecasts, Management implemented PD and LGD floors to account for the risk associated with each portfolio. The PD and LGD floors are based on Trustmark's historical loss experience and applied at a portfolio level.

The external factors qualitative factor is Management’s best judgment on the loan or pool level impact of all factors that affect the portfolio that are not accounted for using any other part of the ACL methodology (e.g., natural disasters, changes in legislation, impacts due to technology and pandemics). During 2024, Trustmark activated the External Factor – Credit Quality Review qualitative factor. This qualitative factor ensures reserve adequacy for collectively evaluated commercial loans that may not have been identified and downgraded timely for various reasons. This qualitative factor population is all commercial loans risk rated 1-5. These loans are then applied to the historical average of the Watch/Special Mention rated percentage. Then the balance of these loans are applied additional reserves based on the same reserve rates utilized in the performance trends qualitative factor for Watch/Special Mention rated loans. Then the Watch/Special Mention population is applied the historical Substandard rated percentage and then subsequently applied the Substandard reserve rate utilized in the performance trends qualitative factor as well. The historical Watch/Special Mention and Substandard rated percentage averages capture the weighted-average life of the commercial loan portfolio. Thus, Trustmark will allocate additional reserves to capture the proportion of potential Watch/Special Mention and Substandard rated credits that may not have been categorized as such at any given point in time through the life of the commercial loan portfolio. During the third quarter of 2025, Management determined that the risk related to delayed identification and downgrading of commercial loans had sufficiently diminished and, as a result, resolved the External Factor – Credit Quality Review qualitative factor and released the associated reserves.

85

 

The nature and volume of the portfolio qualitative factor is utilized for a sub-pool of loans secured by 1-4 family residential properties due to the sub-pool's significant size as well as the underlying nature being different. The nature and volume of the portfolio qualitative factor utilizes a WARM methodology that uses Trustmark's historical data for the assumptions to support the qualitative adjustment. Trustmark’s historical data is used to develop a PD based on the credit score ranges initially established as well as using the same LGD value from the mortgage sale that occurred in 2024 along with the same weighted-average life assumption utilized to determine the credit mark on this portfolio. During the second quarter of 2026, Trustmark updated the weighted-average life assumption and LGD value as a result of the sale of 1-4 family mortgage loans that occurred during the quarter. The sub-pools of credits are then aggregated into the appropriate credit score bands in which a weighted-average loss rate is calculated based on the PD and LGD for each credit score range. This weighted-average loss rate is then applied to the expected balance for the sub-segment of credits. This total is then used as the qualitative reserve adjustment.

Trustmark's current quantitative methodologies do not completely incorporate changes in credit quality. As a result, Trustmark utilizes the performance trends qualitative factor. This factor is based on migration analyses, that allocates additional ACL to non-pass/delinquent loans within each pool. In this way, Management believes the ACL will directly reflect changes in risk, based on the performance of the loans within a pool, whether declining or improving.

The performance trends qualitative factor is estimated by properly segmenting loan pools into risk levels by risk rating for commercial credits and delinquency status for consumer credits. A migration analysis is then performed quarterly using a third-party software and the results for each risk level are compiled to calculate the historical PD average for each loan portfolio based on risk levels. This average historical PD rate is updated annually. For the mortgage portfolio, Trustmark uses an internal report to incorporate a roll rate method for the calculation of the PD rate. In addition to the PD rate for each portfolio, Management incorporates the quantitative rate and the k value derived from the Frye-Jacobs method to calculate a loss estimate that includes both PD and LGD. The quantitative rate is used to eliminate any additional reserve that the quantitative reserve already includes. Finally, the loss estimate rate is then applied to the total balances for each risk level for each portfolio to calculate a qualitative reserve.

Determining the appropriateness of the allowance is complex and requires judgment by Management about the effect of matters that are inherently uncertain. In future periods, evaluations of the overall LHFI portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and credit loss expense.

For a complete description of Trustmark’s ACL methodology and the quantitative and qualitative factors included in the calculation, please see Note 3 – LHFI and Allowance for Credit Losses, LHFI included in Part I. Item 1. – Financial Statements of this report.

At September 30, 2026, the ACL, LHFI was $148.3 million, a decrease of $8.7 million, or 5.6%, when compared with December 31, 2025. The decrease in the ACL during the first nine months of 2026 was principally due to reserves released due to the sale of 1-4 family mortgage loans, positive credit migration and changes in the macroeconomic forecast, partially offset by specific reserves on individually analyzed loans and loan growth. Total reserves released or used due to the sale of 1-4 family mortgage loans during the second quarter of 2026 were $15.5 million, of which $9.2 million were released and $6.3 million (the credit-related portion of the loss) were used for charge-offs. Allocation of Trustmark’s $148.3 million ACL, LHFI represented 0.90% of commercial LHFI and 1.61% of consumer and home mortgage LHFI, resulting in an ACL to total LHFI of 1.07% at September 30, 2026. This compares with an ACL to total LHFI of 1.15% at December 31, 2025, which was allocated to commercial LHFI at 0.91% and to consumer and home mortgage LHFI at 1.94%.

The following table presents changes in the ACL, LHFI for the periods presented ($ in thousands):

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Balance at beginning of period

 

$

148,189

 

 

$

168,237

 

 

$

157,071

 

 

$

160,270

 

PCL, LHFI

 

 

1,179

 

 

 

1,390

 

 

 

10,319

 

 

 

14,861

 

PCL, LHFI sale of 1-4 family mortgage loans

 

 

—

 

 

 

—

 

 

 

(9,227

)

 

 

—

 

Charge-offs, sale of 1-4 family mortgage loans

 

 

—

 

 

 

—

 

 

 

(6,316

)

 

 

—

 

Charge-offs

 

 

(3,354

)

 

 

(6,775

)

 

 

(10,533

)

 

 

(16,856

)

Recoveries

 

 

2,324

 

 

 

2,390

 

 

 

7,024

 

 

 

6,967

 

Net (charge-offs) recoveries

 

 

(1,030

)

 

 

(4,385

)

 

 

(9,825

)

 

 

(9,889

)

Balance at end of period

 

$

148,338

 

 

$

165,242

 

 

$

148,338

 

 

$

165,242

 

The PCL, LHFI excluding the sale of 1-4 family mortgage loans for the three and nine months ended September 30, 2026 totaled 0.03% and 0.10% of average loans (LHFS and LHFI), respectively, compared to 0.04% and 0.15% of average loans (LHFS and LHFI), respectively, for the same time periods in 2025. The PCL, LHFI excluding the sale of 1-4 family mortgage loans for the three months

86

 

ended September 30, 2026 was principally attributable to specific reserves on individually analyzed loans and changes in the macroeconomic forecast, partially offset by positive credit migration, adjustments to the qualitative factors and adjustments to the weighted-average life assumptions. The PCL, LHFI excluding the sale of 1-4 family mortgage loans for the nine months ended September 30, 2026 was principally attributable to specific reserves on individually analyzed loans and loan growth, partially offset by positive credit migration and changes in the macroeconomic forecast.

The following table presents the net (charge-offs) recoveries by geographic market region for the periods presented ($ in thousands):

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Alabama

 

$

(74

)

 

$

(3,069

)

 

$

(318

)

 

$

(5,607

)

Florida

 

 

(37

)

 

 

2

 

 

 

1

 

 

 

136

 

Mississippi

 

 

(836

)

 

 

(1,520

)

 

 

(2,433

)

 

 

(3,922

)

Tennessee

 

 

(41

)

 

 

(182

)

 

 

(219

)

 

 

(741

)

Texas

 

 

(42

)

 

 

384

 

 

 

(540

)

 

 

245

 

Net (charge-offs) recoveries, excluding sale of
   1-4 mortgage loans

 

 

(1,030

)

 

 

(4,385

)

 

 

(3,509

)

 

 

(9,889

)

Mississippi - sale of 1-4 family mortgage loans

 

 

—

 

 

 

—

 

 

 

(6,316

)

 

 

—

 

Total net (charge-offs) recoveries

 

$

(1,030

)

 

$

(4,385

)

 

$

(9,825

)

 

$

(9,889

)

The decrease in net charge-offs when the three months ended September 30, 2026 is compared to the same time period in 2025 was principally due to decreases in charge-offs in the Alabama and Mississippi market regions. The slight decrease in net charge-offs when the nine months ended September 30, 2026 is compared to the same time period in 2025 was principally due to decreases in charge-offs in the Alabama and Mississippi market regions, partially offset by the $6.3 million of charge-offs in the Mississippi market region related to the sale of 1-4 family mortgage loans during the second quarter of 2026.

Off-Balance Sheet Credit Exposures

Trustmark maintains a separate ACL on off-balance sheet credit exposures, including unfunded loan commitments and letters of credit, which is included on the accompanying consolidated balance sheets. Expected credit losses for off-balance sheet credit exposures are estimated by calculating a commitment usage factor over the contractual period for exposures that are not unconditionally cancellable by Trustmark. Trustmark calculates a loan pool level unfunded amount for the period. Trustmark calculates an expected funding rate each period which is applied to each pool’s unfunded commitment balances to ensure that reserves will be applied to each pool based upon balances expected to be funded based upon historical levels. Additionally, a reserve rate is applied to the unfunded commitment balance, which includes both quantitative and a majority of the qualitative aspects of the current period’s expected credit loss rate. During 2024, Management implemented a performance trends qualitative factor and an External Factor – Credit Quality Review qualitative factor for unfunded commitments. For both qualitative factors, the same assumptions are applied in the unfunded commitment calculation that are used in the funded balance calculation with the only difference being the unfunded commitment calculation includes the funding rates for the unfunded commitments. The reserves for these two qualitative factors are added to the other calculated reserve to get a total reserve for off-balance sheet credit exposures. During the third quarter of 2025, Management determined that the risk related to delayed identification and downgrading of commercial loans had sufficiently diminished and, as a result, resolved the External Factor – Credit Quality Review qualitative factor and released the associated reserves. See the section captioned “ACL on Off-Balance Sheet Credit Exposures” in Note 11 – Contingencies included in Part I. Item 1. – Financial Statements of this report for complete description of Trustmark’s ACL methodology on off-balance sheet credit exposures.

At September 30, 2026, the ACL on off-balance sheet credit exposures totaled $28.6 million compared to $28.0 million at December 31, 2025, an increase of $668 thousand, or 2.4%. Adjustments to the ACL on off-balance sheet credit exposures are recorded to the PCL, off-balance sheet credit exposures. The PCL, off-balance sheet credit exposures totaled $1.1 million and $668 thousand, respectively, for the three and nine months ended September 30, 2026, compared to $295 thousand and a negative $3.2 million, respectively, for the same time periods in 2025, an increase in provision expense of $790 thousand and $3.9 million, respectively. The PCL, off-balance sheet credit exposures for the three months ended September 30, 2026, was primarily attributable to an increase in unfunded commitment balances and an increase in the quantitative reserve rates due to changes in the macroeconomic forecast. The PCL, off-balance sheet credit exposures for the nine months ended September 30, 2026, was primarily attributable to an increase in the quantitative reserve rates due to changes in the macroeconomic forecast and an increase in the utilization rates for unfunded commitments, partially offset by a decrease in commercial construction unfunded commitment balances and positive credit migration.

87

 

Nonperforming Assets

The table below provides the components of nonperforming assets by geographic market region at September 30, 2026 and December 31, 2025 ($ in thousands):

 

 

September 30, 2026

 

 

December 31, 2025

 

Nonaccrual LHFI

 

 

 

 

 

 

Alabama

 

$

11,792

 

 

$

4,638

 

Florida

 

 

488

 

 

 

442

 

Mississippi

 

 

36,954

 

 

 

73,045

 

Tennessee

 

 

2,936

 

 

 

2,396

 

Texas

 

 

2,177

 

 

 

3,870

 

Total nonaccrual LHFI

 

 

54,347

 

 

 

84,391

 

Other real estate

 

 

 

 

 

 

Alabama

 

 

367

 

 

 

409

 

Florida

 

 

222

 

 

 

—

 

Mississippi

 

 

1,763

 

 

 

5,621

 

Tennessee

 

 

147

 

 

 

927

 

Texas

 

 

198

 

 

 

—

 

Total other real estate

 

 

2,697

 

 

 

6,957

 

Total nonperforming assets

 

$

57,044

 

 

$

91,348

 

 

 

 

 

 

 

 

Nonperforming assets/total loans (LHFS and LHFI) and ORE

 

 

0.40

%

 

 

0.65

%

 

 

 

 

 

 

 

Loans past due 90 days or more

 

 

 

 

 

 

LHFI

 

$

4,127

 

 

$

5,097

 

 

 

 

 

 

 

 

LHFS - Guaranteed GNMA serviced loans (1)

 

$

103,895

 

 

$

98,939

 

 

(1)
No obligation to repurchase.

See the previous discussion of LHFS for more information on Trustmark’s serviced GNMA loans eligible for repurchase and the impact of Trustmark’s repurchases of delinquent mortgage loans under the GNMA optional repurchase program.

Nonaccrual LHFI

At September 30, 2026, nonaccrual LHFI totaled $54.3 million, or 0.39% of total LHFS and LHFI, reflecting a decrease of $30.0 million, or 35.6%, relative to December 31, 2025. The decrease in nonaccrual LHFI during the first nine months of 2026 was primarily due to the sale of nonaccrual 1-4 family mortgage loans in the Mississippi market region during the second quarter of 2026, pay-offs of nonaccrual loans in the Mississippi and Texas market regions as well as nonaccrual loans foreclosed in the Mississippi and Alabama market regions, partially offset by 1-4 family mortgage loans placed on nonaccrual status in the Mississippi market region as well as one large commercial credit in the Mississippi market region and one large commercial credit in the Alabama market region placed on nonaccrual status. Trustmark's mortgage loans are primarily included in the Mississippi market region because these loans are centrally analyzed and approved as part of the mortgage line of business which is located in Jackson, Mississippi.

For additional information regarding nonaccrual LHFI, see the section captioned “Nonaccrual and Past Due LHFI” included in Note 3 – LHFI and Allowance for Credit Losses, LHFI in Part I. Item 1. – Financial Statements of this report.

Other Real Estate

Other real estate at September 30, 2026 decreased $4.3 million, or 61.2%, when compared with December 31, 2025. The decrease in other real estate during the first nine months of 2026 was principally due to properties sold in the Mississippi, Alabama and Tennessee market regions, partially offset by properties foreclosed in the Mississippi and Alabama market regions.

88

 

The following tables illustrate changes in other real estate by geographic market region for the periods presented ($ in thousands):

 

 

 

Three Months Ended September 30, 2026

 

 

 

Total

 

 

Alabama

 

 

Florida

 

 

Mississippi

 

 

Tennessee

 

 

Texas

 

Balance at beginning of period

 

$

5,208

 

 

$

1,356

 

 

$

—

 

 

$

2,870

 

 

$

982

 

 

$

—

 

Additions

 

 

749

 

 

 

—

 

 

 

222

 

 

 

182

 

 

 

147

 

 

 

198

 

Disposals

 

 

(3,239

)

 

 

(989

)

 

 

—

 

 

 

(1,268

)

 

 

(982

)

 

 

—

 

Net (write-downs) recoveries

 

 

(21

)

 

 

—

 

 

 

—

 

 

 

(21

)

 

 

—

 

 

 

—

 

Balance at end of period

 

$

2,697

 

 

$

367

 

 

$

222

 

 

$

1,763

 

 

$

147

 

 

$

198

 

 

 

 

Three Months Ended September 30, 2025

 

 

 

Total

 

 

Alabama

 

 

Mississippi

 

 

Tennessee

 

 

Texas

 

Balance at beginning of period

 

$

8,972

 

 

$

772

 

 

$

4,860

 

 

$

1,079

 

 

$

2,261

 

Additions

 

 

1,622

 

 

 

—

 

 

 

1,622

 

 

 

—

 

 

 

—

 

Disposals

 

 

(605

)

 

 

(116

)

 

 

(489

)

 

 

—

 

 

 

—

 

Net (write-downs) recoveries

 

 

(1,664

)

 

 

—

 

 

 

(150

)

 

 

(152

)

 

 

(1,362

)

Balance at end of period

 

$

8,325

 

 

$

656

 

 

$

5,843

 

 

$

927

 

 

$

899

 

 

 

 

Nine Months Ended September 30, 2026

 

 

 

Total

 

 

Alabama

 

 

Florida

 

 

Mississippi

 

 

Tennessee

 

 

Texas

 

Balance at beginning of period

 

$

6,957

 

 

$

409

 

 

$

—

 

 

$

5,621

 

 

$

927

 

 

$

—

 

Additions

 

 

5,026

 

 

 

1,042

 

 

 

222

 

 

 

3,362

 

 

 

202

 

 

 

198

 

Disposals

 

 

(9,085

)

 

 

(989

)

 

 

—

 

 

 

(7,114

)

 

 

(982

)

 

 

—

 

Net (write-downs) recoveries

 

 

(201

)

 

 

(95

)

 

 

—

 

 

 

(106

)

 

 

—

 

 

 

—

 

Balance at end of period

 

$

2,697

 

 

$

367

 

 

$

222

 

 

$

1,763

 

 

$

147

 

 

$

198

 

 

 

 

Nine Months Ended September 30, 2025

 

 

 

Total

 

 

Alabama

 

 

Mississippi

 

 

Tennessee

 

 

Texas

 

Balance at beginning of period

 

$

5,917

 

 

$

170

 

 

$

2,407

 

 

$

1,079

 

 

$

2,261

 

Additions

 

 

6,754

 

 

 

699

 

 

 

5,996

 

 

 

59

 

 

 

—

 

Disposals

 

 

(2,563

)

 

 

(271

)

 

 

(2,233

)

 

 

(59

)

 

 

—

 

Net (write-downs) recoveries

 

 

(1,783

)

 

 

58

 

 

 

(327

)

 

 

(152

)

 

 

(1,362

)

Balance at end of period

 

$

8,325

 

 

$

656

 

 

$

5,843

 

 

$

927

 

 

$

899

 

Other real estate is revalued on an annual basis or more often if market conditions necessitate. Subsequent to foreclosure, losses on the periodic revaluation of the property are charged against the reserve for other real estate write-downs or net income in other real estate expense, if a reserve does not exist. Write-downs of other real estate decreased $1.6 million, or 88.7%, when the first nine months of 2026 is compared to the same time period in 2025, reflecting a decrease in the reserve for other real estate write-downs in the Texas and Mississippi market regions and declines in write-downs of other real estate in the Tennessee and Mississippi market regions, partially offset by an increase in write-downs of other real estate in the Alabama market region.

For additional information regarding other real estate, please see Note 5 – Other Real Estate included in Part I. Item 1. – Financial Statements of this report.

Deposits

Trustmark’s deposits are its primary source of funding and primarily consist of core deposits from the communities Trustmark serves. Deposits include interest-bearing and noninterest-bearing demand accounts, savings, MMDA, CDs and individual retirement accounts. Total deposits were $16.058 billion at September 30, 2026 compared to $15.500 billion at December 31, 2025, an increase of $558.3 million, or 3.6%. During the first nine months of 2026, noninterest-bearing deposits increased $226.4 million, or 7.5%, principally due to growth in commercial and consumer noninterest-bearing demand deposit accounts. Interest-bearing deposits increased $331.9 million, or 2.7%, during the first nine months of 2026, primarily due to growth in commercial and public interest checking accounts, commercial MMDA and consumer, commercial and public CDs, partially offset by declines in brokered CDs and consumer interest checking and MMDA accounts.

At September 30, 2026, Trustmark's total uninsured deposits were $5.952 billion, or 37.1% of total deposits, compared to $5.478 billion, or 35.3% of total deposits, at December 31, 2025.

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Borrowings

Trustmark uses short-term borrowings, such as federal funds purchased and short-term FHLB advances, to fund growth of earning assets in excess of deposit growth. See the section captioned “Liquidity” for further discussion of the components of Trustmark’s excess funding capacity.

Federal funds purchased totaled $205.0 million at September 30, 2026 compared to $445.0 million at December 31, 2025, a decrease of $240.0 million, or 53.9%. Trustmark's federal funds purchased are overnight upstream federal funds purchased as needed for liquidity. Other borrowings totaled $136.3 million at September 30, 2026, a decrease of $228.5 million, or 62.6%, when compared with $364.8 million at December 31, 2025, principally due to a decrease in outstanding short-term FHLB advances with the FHLB of Dallas. The decrease in federal funds purchased and short-term FHLB advances during the first nine months of 2026 reflected changes in funding needs principally due to deposit growth exceeding loan growth.

Legal Environment

Information required in this section is set forth under the heading “Legal Proceedings” of Note 11 – Contingencies included in Part I. Item 1. – Financial Statements of this report.

Off-Balance Sheet Arrangements

Information required in this section is set forth under the heading “Lending Related” of Note 11 – Contingencies included in Part I. Item 1. – Financial Statements of this report.

Capital Resources and Liquidity

Trustmark places a significant emphasis on the maintenance of a strong capital position, which promotes investor confidence, provides access to funding sources under favorable terms and enhances Trustmark’s ability to capitalize on business growth and acquisition opportunities. Higher levels of liquidity, however, bear corresponding costs, measured in terms of lower yields on short-term, more liquid earning assets and higher expenses for extended liability maturities. Trustmark manages capital based upon risks and growth opportunities as well as regulatory requirements. Trustmark utilizes a capital model in order to provide Management with a tool for analyzing changes in its strategic capital ratios. This allows Management to hold sufficient capital to provide for growth opportunities and protect the balance sheet against sudden adverse market conditions, while maintaining an attractive return on equity to shareholders.

At September 30, 2026, Trustmark’s total shareholders’ equity was $2.093 billion, a decrease of $28.4 million, or 1.3%, when compared to December 31, 2025. During the first nine months of 2026, shareholders’ equity decreased primarily as a result of an $80.7 million negative net change in the fair market value of securities, common stock repurchases of $61.0 million, common stock dividends of $44.2 million and a $23.6 million negative net change in the fair market value of cash flow hedges, partially offset by net income of $177.7 million.

Regulatory Capital

Trustmark and TB are subject to minimum risk-based capital and leverage capital requirements, as described in the section captioned “Capital Adequacy” included in Part I. Item 1. – Business of Trustmark’s 2025 Annual Report, which are administered by the federal bank regulatory agencies. These capital requirements, as defined by federal regulations, involve quantitative and qualitative measures of assets, liabilities and certain off-balance sheet instruments. Trustmark’s and TB’s minimum risk-based capital requirements include a capital conservation buffer of 2.50%. AOCI is not included in computing regulatory capital. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the financial statements of Trustmark and TB and limit Trustmark’s and TB’s ability to pay dividends. At September 30, 2026, Trustmark and TB exceeded all applicable minimum capital standards. In addition, Trustmark and TB met applicable regulatory guidelines to be considered well-capitalized at September 30, 2026. To be categorized in this manner, Trustmark and TB maintained minimum common equity Tier 1 risk-based capital, Tier 1 risk-based capital, total risk-based capital and Tier 1 leverage ratios, and were not subject to any written agreement, order or capital directive, or prompt corrective action directive issued by their primary federal regulators to meet and maintain a specific capital level for any capital measures. There are no significant conditions or events that have occurred since September 30, 2026 which Management believes have affected Trustmark’s or TB’s present classification.

During the fourth quarter of 2025, Trustmark enhanced its capital structure with the issuance of $175.0 million of the 2025 Notes. The 2025 Notes mature on December 1, 2035 and are redeemable at Trustmark's option under certain circumstances. Trustmark used the net proceeds from the offering, after the payment of offering expenses, to repay the $125.0 million of aggregate principal amount of the

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2020 Notes plus accrued interest and for general corporate purposes. At September 30, 2026 and December 31, 2025, the carrying amount of the 2025 Notes was $172.2 million and $172.0 million, respectively. The 2025 Notes qualified as Tier 2 capital for Trustmark at September 30, 2026 and December 31, 2025. Trustmark may utilize the full carrying value of the 2025 Notes as Tier 2 capital until December 1, 2030 (five years prior to maturity). Beginning December 1, 2030, the 2025 Notes will phase out of Tier 2 capital 20.0% each year until maturity.

In 2006, Trustmark enhanced its capital structure with the issuance of trust preferred securities. For regulatory capital purposes, the trust preferred securities qualified as Tier 1 capital at September 30, 2026 and December 31, 2025. Trustmark intends to continue to utilize $60.0 million in trust preferred securities issued by Trustmark Preferred Capital Trust I (the Trust) as Tier 1 capital up to the regulatory limit, as permitted by the grandfather provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Basel III Final Rule.

Refer to the section captioned “Regulatory Capital” included in Note 14 – Shareholders’ Equity in Part I. Item 1. – Financial Statements of this report for an illustration of Trustmark’s and TB’s actual regulatory capital amounts and ratios under regulatory capital standards in effect at September 30, 2026 and December 31, 2025.

Dividends on Common Stock

Dividends per common share for the nine months ended September 30, 2026 and 2025 were $0.75 and $0.72, respectively. Trustmark’s indicated dividend for 2026 is $1.00 per common share, an increase of $0.04 per common share when compared to $0.96 per common share in 2025.

Stock Repurchase Program

From time to time, Trustmark's Board of Directors has authorized stock repurchase plans. In general, stock repurchase plans allow Trustmark to proactively manage its capital position and return excess capital to shareholders. Shares purchased also provide Trustmark with shares of common stock necessary to satisfy obligations related to stock compensation awards.

On December 3, 2024, Trustmark’s Board of Directors authorized a stock repurchase program effective January 1, 2025, under which $100.0 million of Trustmark’s outstanding shares could be acquired through December 31, 2025. Under this authority, Trustmark repurchased 2.2 million shares of its common stock valued at $80.0 million during the twelve months ended December 31, 2025.

On December 2, 2025, Trustmark’s Board of Directors authorized a stock repurchase program effective January 1, 2026, under which $100.0 million of Trustmark’s outstanding shares may be acquired through December 31, 2026. The repurchase program, which is subject to market conditions and management discretion, will be implemented through open market repurchases or privately negotiated transactions. Under this authority, Trustmark repurchased 1.4 million shares of its common stock valued at $60.9 million during the first nine months of 2026.

Liquidity

Liquidity is the ability to ensure that sufficient cash flow and liquid assets are available to satisfy current and future financial obligations, including demand for loans and deposit withdrawals, funding operating costs and other corporate purposes. Consistent cash flows from operations and adequate capital provide internally generated liquidity. Furthermore, Management maintains funding capacity from a variety of external sources to meet daily funding needs, such as those required to meet deposit withdrawals, loan disbursements and security settlements. Liquidity strategy also includes the use of wholesale funding sources to provide for the seasonal fluctuations of deposit and loan demand and the cyclical fluctuations of the economy that impact the availability of funds. Management keeps excess funding capacity available to meet potential demands associated with adverse circumstances.

The asset side of the balance sheet provides liquidity primarily through maturities and cash flows from loans and securities as well as the ability to pledge or sell certain loans and securities. The liability portion of the balance sheet provides liquidity primarily through noninterest and interest-bearing deposits. Trustmark utilizes federal funds purchased, FHLB advances, the Federal Reserve Discount Window (Discount Window) and brokered deposits to provide additional liquidity. Access to these additional sources represents Trustmark’s incremental borrowing capacity.

Trustmark's liquidity position is continuously monitored and adjustments are made to manage the balance as deemed appropriate. Liquidity risk management is an important element to Trustmark's asset/liability management process. Trustmark regularly models liquidity stress scenarios to assess potential liquidity outflows or funding problems resulting from economic disruptions or other significant occurrences as deemed appropriate by Management. These scenarios are incorporated into Trustmark's contingency funding plan, which provides the basis for the identification of its liquidity needs.

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Deposit accounts represent Trustmark’s largest funding source. Average deposits totaled $15.813 billion for the first nine months of 2026 and represented 83.1% of average liabilities and shareholders’ equity, compared to average deposits of $15.172 billion, which represented 82.4% of average liabilities and shareholders’ equity for the first nine months of 2025. For more information on average interest-bearing deposits, please see the analysis included in the section captioned “Net Interest Income.”

Trustmark had $384.1 million held in an interest-bearing account at the FRBA at September 30, 2026, compared to $408.4 million held at December 31, 2025.

Trustmark utilizes brokered deposits to supplement other wholesale funding sources. At September 30, 2026 and December 31, 2025, brokered sweep MMDA deposits totaled $11.2 million and $9.6 million, respectively. In addition, Trustmark had $200.0 million of brokered CDs at September 30, 2026 compared to $299.9 million at December 31, 2025.

At September 30, 2026, Trustmark had $205.0 million of upstream federal funds purchased compared to $445.0 million of upstream federal funds purchased at December 31, 2025. Trustmark maintains adequate federal funds lines to provide sufficient short-term liquidity.

Trustmark maintains a relationship with the FHLB of Dallas, which provided no outstanding short-term advances at September 30, 2026, compared to $225.0 million of outstanding short-term advances at December 31, 2025. Under the existing borrowing agreement, Trustmark had sufficient qualifying collateral to increase FHLB advances or letters of credit with the FHLB of Dallas by $2.162 billion at September 30, 2026.

Additionally, Trustmark has the ability to leverage its unencumbered investment securities as collateral. At September 30, 2026, Trustmark had $1.302 billion available in unencumbered Treasury and agency securities compared to $1.371 billion in unencumbered Treasury and agency securities at December 31, 2025.

Another borrowing source is the Discount Window. At September 30, 2026, Trustmark had $8.199 billion available in collateral capacity at the Discount Window primarily from pledges of commercial and consumer LHFI, compared with $7.771 billion at December 31, 2025.

During the fourth quarter of 2025, Trustmark issued and sold $175.0 million aggregate principal amount of the 2025 Notes. Trustmark used the net proceeds from the offering, after the payment of offering expenses, to repay the existing $125.0 million of aggregate principal amount of the 2020 Notes plus accrued interest and for general corporate purposes. At September 30, 2026 and December 31, 2025, the carrying amount of the subordinated notes was $172.2 million and $172.0 million, respectively. The 2025 Notes mature December 1, 2035 and are redeemable at Trustmark’s option under certain circumstances. The 2025 Notes are unsecured obligations and are subordinated in right of payment to all of Trustmark’s existing and future senior indebtedness, whether secured or unsecured. The 2025 Notes are obligations of Trustmark only and are not obligations of, and are not guaranteed by, any of its subsidiaries, including TB.

During 2006, Trustmark completed a private placement of $60.0 million of trust preferred securities through a newly formed Delaware trust affiliate, the Trust. The trust preferred securities mature September 30, 2036 and are redeemable at Trustmark’s option. The proceeds from the sale of the trust preferred securities were used by the Trust to purchase $61.9 million in aggregate principal amount of Trustmark’s junior subordinated debentures.

The Board of Directors of Trustmark currently has the authority to issue up to 20.0 million preferred shares with no par value. The ability to issue preferred shares in the future will provide Trustmark with additional financial and management flexibility for general corporate and acquisition purposes. At September 30, 2026, Trustmark had no shares of preferred stock issued and outstanding.

Management believes that Trustmark has sufficient liquidity and capital resources to meet presently known cash flow requirements arising from ongoing business transactions. As of September 30, 2026, Management is not aware of any events that are reasonably likely to have a material adverse effect on Trustmark's liquidity, capital resources or operations. In addition, Management is not aware of any regulatory recommendations regarding liquidity that would have a material adverse effect on Trustmark.

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In the ordinary course of business, Trustmark has entered into contractual obligations and has made other commitments to make future payments. Please refer to the accompanying notes to the consolidated financial statements included in Part I. Item 1. – Financial Statements of this report and Trustmark's 2025 Annual Report for the expected timing of such payments as of September 30, 2026 and December 31, 2025. In September 2026, Trustmark completed a sale-leaseback transaction in which 34 bank branch properties owned and operated by TB were sold and concurrently leased back. Each of the lease agreements has an initial term of 15 years and three consecutive renewal options of five years each. For additional information regarding the sale-leaseback transaction and expected timing of lease payments under Trustmark’s lessee arrangements, see Note 6 – Leases included in Part I. Item 1. – Financial Statements of this report.

Asset/Liability Management

Overview

Market risk reflects the potential risk of loss arising from adverse changes in interest rates and market prices. Trustmark has risk management policies to monitor and limit exposure to market risk. Trustmark’s primary market risk is interest rate risk created by core banking activities. Interest rate risk is the potential variability of the income generated by Trustmark’s financial products or services, which results from changes in various market interest rates. Market rate changes may take the form of absolute shifts, variances in the relationships between different rates and changes in the shape or slope of the interest rate term structure.

Management continually develops and applies cost-effective strategies to manage these risks. Management’s Asset/Liability Committee sets the day-to-day operating guidelines, approves strategies affecting net interest income and coordinates activities within policy limits established by the Board of Directors of Trustmark. A key objective of the asset/liability management program is to quantify, monitor and manage interest rate risk and to assist Management in maintaining stability in the net interest margin under varying interest rate environments.

Derivatives

Trustmark uses financial derivatives for management of interest rate risk. Management’s Asset/Liability Committee, in its oversight role for the management of interest rate risk, approves the use of derivatives in balance sheet hedging strategies. The most common derivatives employed by Trustmark are interest rate lock commitments, forward contracts (both futures contracts and options on futures contracts), interest rate swaps, interest rate caps and interest rate floors. As a general matter, the values of these instruments are designed to be inversely related to the values of the assets that they hedge (i.e., if the value of the hedged asset falls, the value of the related hedge rises). In addition, Trustmark has entered into derivatives contracts as counterparty to one or more customers in connection with loans extended to those customers. These transactions are designed to hedge interest rate exposure of the customers and are not entered into by Trustmark for speculative purposes. Increased federal regulation of the derivatives markets may increase the cost to Trustmark to administer derivatives programs.

Derivatives Designated as Hedging Instruments

Trustmark engages in a cash flow hedging program to add stability to interest income and to manage its exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for Trustmark making variable-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate floor spreads designated as cash flow hedges involve the receipt of variable-rate amounts if interest rates fall below the purchased floor strike rate on the contract and payments of variable rate amounts if interest rates fall below the sold floor strike rate on the contract. Trustmark uses such derivatives to hedge the variable cash flows associated with existing and anticipated variable-rate loan assets. At both September 30, 2026 and December 31, 2025, the aggregate notional value of Trustmark's interest rate swaps and floor spreads designated as cash flow hedges totaled $1.630 billion.

Trustmark records any gains or losses on these cash flow hedges in AOCI. Gains and losses on derivatives representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with Trustmark’s accounting policy election. The earnings recognition of excluded components included in interest and fees on LHFS and LHFI totaled $119 thousand and $360 thousand of amortization expense for the three and nine months ended September 30, 2026, respectively, compared to $132 thousand and $393 thousand of amortization expense for the three and nine months ended September 30, 2025, respectively. As interest payments are received on Trustmark's variable-rate assets, amounts reported in AOCI are reclassified into interest and fees on LHFS and LHFI in the accompanying consolidated statements of income during the same period. For the three and nine months ended September 30, 2026, Trustmark reclassified a loss, net of tax, of $506 thousand and $1.8 million into interest and fees on LHFS and LHFI, compared to a loss, net of tax, of $1.8 million and $5.9 million, respectively, for the same time periods in 2025. During the next twelve months, Trustmark estimates that $7.9 million will be

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reclassified as a reduction to interest and fees on LHFS and LHFI. This amount could differ due to changes in interest rates, hedge de-designations or the addition of other hedges.

Derivatives Not Designated as Hedging Instruments

As part of Trustmark’s risk management strategy in the mortgage banking business, various derivative instruments such as interest rate lock commitments and forward sales contracts are utilized. Rate lock commitments are residential mortgage loan commitments with customers, which guarantee a specified interest rate for a specified period of time. Changes in the fair value of these derivative instruments are recorded as noninterest income in mortgage banking, net and are offset by the changes in the fair value of forward sales contracts. The gross notional amount of Trustmark’s off-balance sheet obligations under these derivative instruments totaled $70.6 million at September 30, 2026, with a negative valuation adjustment of $442 thousand, compared to $74.5 million, with a positive valuation adjustment of $998 thousand at December 31, 2025. Trustmark’s obligations under forward contracts consist of commitments to deliver mortgage loans, originated and/or purchased, in the secondary market at a future date. Changes in the fair value of these derivative instruments are recorded as noninterest income in mortgage banking, net and are offset by changes in the fair value of LHFS. The gross notional amount of Trustmark’s off-balance sheet obligations under these derivative instruments totaled $157.0 million at September 30, 2026, with a positive valuation adjustment of $4.3 million, compared to $152.0 million, with a negative valuation adjustment of $287 thousand at December 31, 2025.

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 economically hedges changes in fair value of the MSR attributable to interest rates. These transactions are considered freestanding derivatives that do not otherwise qualify for hedge accounting under GAAP. The total notional amount of these derivative instruments was $301.0 million at September 30, 2026 compared to $345.5 million at December 31, 2025. These exchange-traded derivative instruments are accounted for at fair value with changes in the fair value recorded as 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 positive ineffectiveness of $283 thousand and a net negative ineffectiveness of $858 thousand for the three months ended September 30, 2026 and 2025, respectively. For the nine months ended September 30, 2026 and 2025, the impact was a net positive ineffectiveness of $386 thousand and a net negative ineffectiveness of $2.0 million, respectively.

Trustmark offers certain interest rate derivatives products directly to qualified commercial lending clients seeking to manage their interest rate risk under loans they have entered into with TB. Trustmark economically hedges interest rate swap transactions executed with commercial lending clients by entering into offsetting interest rate swap transactions with institutional derivatives market participants. Derivatives transactions executed as part of this program are not designated as qualifying hedging relationships under GAAP and are, therefore, carried on Trustmark’s financial statements at fair value with the change in fair value recorded as noninterest income in bank card and other fees. Because these derivatives have mirror-image contractual terms, in addition to collateral provisions which mitigate the impact of non-performance risk, the changes in fair value are expected to substantially offset. The offsetting interest rate swap transactions are either cleared through the Chicago Mercantile Exchange for clearable transactions or booked directly with institutional derivatives market participants for non-clearable transactions. The Chicago Mercantile Exchange rules legally characterize variation margin collateral payments made or received for centrally cleared interest rate swaps as settlements rather than collateral. As a result, centrally cleared interest rate swaps included in other assets and other liabilities are presented on a net basis in the accompanying consolidated balance sheets. At September 30, 2026, Trustmark had interest rate swaps with an aggregate notional amount of $1.940 billion related to this program, compared to $1.991 billion at December 31, 2025.

Credit-Risk-Related Contingent Features

Trustmark has agreements with its financial institution counterparties that contain provisions where if Trustmark defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then Trustmark could also be deemed to be in default on its derivatives obligations.

At September 30, 2026, the termination value of interest rate swaps in a liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements totaled $13.0 million compared to $117 thousand at December 31, 2025. At September 30, 2026 and December 31, 2025, Trustmark had posted collateral of $13.5 million and $2.2 million, respectively, against its obligations because of negotiated thresholds and minimum transfer amounts under these agreements. If Trustmark had breached any of these triggering provisions at September 30, 2026, it could have been required to settle its obligations under the agreements at the termination value (which is expected to approximate fair market value).

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Credit risk participation agreements arise when Trustmark contracts with other financial institutions, as a guarantor or beneficiary, to share credit risk associated with certain interest rate swaps. These agreements provide for reimbursement of losses resulting from a third-party default on the underlying swap. At September 30, 2026, Trustmark had entered into nine risk participation agreements as a beneficiary with an aggregate notional amount of $88.3 million compared to ten risk participation agreements as a beneficiary with an aggregate notional amount of $113.7 million at December 31, 2025. At September 30, 2026, Trustmark had entered into twenty-five risk participation agreements as a guarantor with an aggregate notional amount of $325.4 million compared to twenty-seven risk participation agreements as a guarantor with an aggregate notional amount of $267.9 million at December 31, 2025. The aggregate fair values of these risk participation agreements were immaterial at both September 30, 2026 and December 31, 2025.

Trustmark’s participation in the derivatives markets is subject to increased federal regulation of these markets. Trustmark believes that it may continue to use financial derivatives to manage interest rate risk and also to offer derivatives products to certain qualified commercial lending clients in compliance with the Volcker Rule.

Market/Interest Rate Risk Management

The primary purpose in managing interest rate risk is to invest capital effectively and preserve the value created by the core banking business. This is accomplished through the development and implementation of lending, funding, pricing and hedging strategies designed to maximize net interest income performance under varying interest rate environments subject to specific liquidity and interest rate risk guidelines.

Financial simulation models are the primary tools used by Management’s Asset/Liability Committee to measure interest rate exposure. The simulation incorporates assumptions regarding the effects of such changes based on a combination of historical analysis and expected behavior. Using a wide range of scenarios, Management is provided with extensive information on the potential impact on net interest income caused by changes in interest rates. Models are structured to simulate cash flows and accrual characteristics of Trustmark’s balance sheet. Assumptions are made about the direction and volatility of interest rates, the slope of the yield curve and the changing composition of Trustmark’s balance sheet, resulting from both strategic plans and customer behavior. In addition, the model incorporates Management’s assumptions and expectations regarding such factors as loan and deposit growth, pricing, prepayment speeds and spreads between interest rates.

Based on the results of the simulation models using static balances, the table below summarizes the effect various one-year interest rate shift scenarios would have on net interest income compared to a base case, flat scenario at September 30, 2026 and 2025.

 

 

 

Estimated % Change
in Net Interest Income

 

 

 

September 30,

 

Change in Interest Rates

 

2026

 

 

2025

 

+200 basis points

 

 

3.2

%

 

 

2.8

%

+100 basis points

 

 

1.6

%

 

 

1.3

%

-100 basis points

 

 

-1.9

%

 

 

-2.1

%

-200 basis points

 

 

-4.2

%

 

 

-4.7

%

 

Management cannot provide any assurance about the actual effect of changes in interest rates on net interest income. The estimates provided do not include the effects of possible strategic changes in the balances of various assets and liabilities throughout 2026 or additional actions Trustmark could undertake in response to changes in interest rates. Management will continue to prudently manage the balance sheet in an effort to control interest rate risk and maintain profitability over the long term.

Another component of interest rate risk management is measuring the economic value-at-risk for a given change in market interest rates. The economic value-at-risk may indicate risks associated with longer-term balance sheet items that may not affect net interest income at risk over shorter time periods. Trustmark uses computer-modeling techniques to determine the present value of all asset and liability cash flows (both on- and off-balance sheet), adjusted for prepayment expectations, using a market discount rate. The economic value of equity (EVE), also known as net portfolio value, is defined as the difference between the present value of asset cash flows and the

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present value of liability cash flows. The resulting change in EVE in different market rate environments, from the base case scenario, is the amount of EVE at risk from those rate environments.

The following table summarizes the effect that various interest rate shifts would have on net portfolio value at September 30, 2026 and 2025.

 

 

 

Estimated % Change
in Net Portfolio Value

 

 

 

September 30,

 

Change in Interest Rates

 

2026

 

 

2025

 

+200 basis points

 

 

-0.8

%

 

 

-0.7

%

+100 basis points

 

 

-0.3

%

 

 

-0.2

%

 

Trustmark determines the fair value of the MSR using a valuation model administered by a third party that calculates the present value of estimated future net servicing income. The model incorporates assumptions that market participants use in estimating future net servicing income, including estimates of prepayment speeds, discount rate, default rates, cost to service (including delinquency and foreclosure costs), escrow account earnings, contractual servicing fee income and other ancillary income such as late fees. Management reviews all significant assumptions quarterly. Mortgage loan prepayment speed, a key assumption in the model, is the annual rate at which borrowers are forecasted to repay their mortgage loan principal. The discount rate used to determine the present value of estimated future net servicing income, another key assumption in the model, is an estimate of the required rate of return investors in the market would require for an asset with similar risk. Both assumptions can, and generally will, change as market conditions and interest rates change.

By way of example, an increase in either the prepayment speed or discount rate assumption will result in a decrease in the fair value of the MSR, while a decrease in either assumption will result in an increase in the fair value of the MSR. In recent years, there have been significant market-driven fluctuations in loan prepayment speeds and discount rates. These fluctuations can be rapid and may continue to be significant. Therefore, estimating prepayment speed and/or discount rates within ranges that market participants would use in determining the fair value of the MSR requires significant management judgment.

At September 30, 2026, the MSR fair value was $158.1 million, compared to $131.7 million at September 30, 2025. The impact on the MSR fair value of a 10% adverse change in prepayment speed or a 100 basis point increase in discount rate at September 30, 2026, would be a decline in fair value of $5.4 million and $6.6 million, respectively, compared to a decline in fair value of $5.0 million and $5.2 million, respectively, at September 30, 2025. Changes of equal magnitude in the opposite direction would produce similar increases in fair value in the respective amounts.

Critical Accounting Policies

For an overview of Trustmark’s critical accounting policies, see the section captioned “Critical Accounting Policies” included in Part II. Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations, of Trustmark’s 2025 Annual Report. There have been no significant changes in Trustmark’s critical accounting policies during the first nine months of 2026.

For additional information regarding Trustmark’s basis of presentation and accounting policies, see Note 1 – Business, Basis of Financial Statement Presentation and Principles of Consolidation included in Part I. Item 1. – Financial Statements of this report.

Accounting Policies Recently Adopted and Pending Accounting Pronouncements

For a complete list of recently adopted and pending accounting policies and the impact on Trustmark, see Note 18 – Accounting Policies Recently Adopted and Pending Accounting Pronouncements included in Part I. Item 1. – Financial Statements of this report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information required by this item is included in the discussion of Market/Interest Rate Risk Management found in Management’s Discussion and Analysis.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out by Trustmark’s Management, with the participation of its Chief Executive Officer and Treasurer and Principal Financial Officer (Principal Financial Officer), of the effectiveness of Trustmark’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based on that evaluation, the Chief Executive Officer and the Principal Financial Officer concluded that Trustmark’s disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There has been no change in Trustmark’s internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, Trustmark’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Information required in this section is set forth under the heading “Legal Proceedings” of Note 11 – Contingencies in Part I. Item 1. – Financial Statements of this report.

In accordance with FASB Accounting Standards Codification (ASC) Subtopic 450-20, “Loss Contingencies,” Trustmark will establish an accrued liability for litigation matters when those matters present loss contingencies that are both probable and reasonably estimable. At the present time, Trustmark believes, based on its evaluation and the advice of legal counsel, that a loss in any such proceeding is not probable and reasonably estimable. All matters will continue to be monitored for further developments that would make such loss contingency both probable and a reasonable estimate cannot be made. In view of the inherent difficulty of predicting the outcome of legal proceedings, Trustmark cannot predict the eventual outcomes of the currently pending matters or the timing of their ultimate resolution. Trustmark currently believes, however, based upon the advice of legal counsel and Management’s evaluation and after taking into account its current insurance coverage, that the legal proceedings currently pending should not have a material adverse effect on Trustmark’s consolidated financial condition.

ITEM 1A. RISK FACTORS

There has been no material change in the risk factors previously disclosed in Trustmark’s 2025 Annual Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On December 2, 2025, Trustmark’s Board of Directors authorized a stock repurchase program effective January 1, 2026, under which $100.0 million of Trustmark’s outstanding shares may be acquired through December 31, 2026. The repurchase program, which is subject to market conditions and management discretion, will be implemented through open market repurchases or privately negotiated transactions.

The following table provides information with respect to purchases by Trustmark or made on behalf of Trustmark of its common stock during the three months ended September 30, 2026 ($ in thousands, except per share amounts):

 

Period

 

Total Number of Shares Purchased

 

 

Average Price Paid Per Share

 

 

Total Number of Shares Purchased as Part of Publicly Announced Plan

 

 

Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan at the End of the Period

 

July 1, 2026 to July 31, 2026

 

 

161,958

 

 

$

46.31

 

 

 

161,958

 

 

$

51,637

 

August 1, 2026 to August 31, 2026

 

 

189,342

 

 

 

47.54

 

 

 

189,342

 

 

 

42,636

 

September 1, 2026 to September 30, 2026

 

 

76,784

 

 

 

46.44

 

 

 

76,784

 

 

 

39,070

 

Total

 

 

428,084

 

 

 

 

 

 

428,084

 

 

 

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

97

 

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Securities Trading Plans of Directors and Executive Officers

During the three months ended September 30, 2026, none of Trustmark’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Trustmark’s securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c) of Regulation S-K).

ITEM 6. EXHIBITS

The exhibits listed in the Exhibit Index are filed herewith or are incorporated herein by reference.

 

EXHIBIT INDEX

 

 

 

31-a

 

Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

31-b

 

Certification by Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

32-a

 

Certification by Chief Executive Officer pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

32-b

 

Certification by Principal Financial Officer pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

101

 

Inline XBRL Interactive Data.

 

 

 

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

All other exhibits are omitted, as they are inapplicable or not required by the related instructions.

98

 

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TRUSTMARK CORPORATION

 

BY:

 

/s/ Duane A. Dewey

 

BY:

 

/s/ Joseph E. Bond

 

Duane A. Dewey

 

 

Joseph E. Bond

 

President and Chief Executive Officer

 

 

Treasurer and Principal Financial Officer

 

 

 

 

 

 

 

 

DATE:

 

November 5, 2026

 

DATE:

 

November 5, 2026

 

99

What is the market capitalization of a company?

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