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What changed in TRUSTMARK CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of TRUSTMARK CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+526 added−527 removedSource: 10-K (2025-02-19) vs 10-K (2024-02-15)

Top changes in TRUSTMARK CORP's 2024 10-K

526 paragraphs added · 527 removed · 404 edited across 10 sections

Item 1. Business

Business — how the company describes what it does

69 edited+39 added−28 removed104 unchanged
Biggest changeIn the January 2024 “Summary of Commentary on Current Economic Conditions by Federal Reserve District,” the twelve Federal Reserve Districts’ reports suggested that economic activity during the reporting period (covering the period from November 18, 2023 through January 8, 2024) was mixed across Districts, with three Districts reporting modest increases in overall activity, eight Districts reporting little or no change and one District reporting a moderate decline.
Biggest changeIt 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. 7 In the January 2025 “Summary of Commentary on Current Economic Conditions by Federal Reserve District,” the twelve Federal Reserve Districts’ reports suggested that during the reporting period (covering the period from November 22, 2024 through January 6, 2025) economic activity increased slightly to moderately.
Federal Oversight Over Mergers and Acquisitions, Investments and Branching The BHC Act requires every bank holding company to obtain the prior approval of the FRB before: (i) it may acquire direct or indirect ownership or control of any voting shares of any bank if, after such acquisition, the bank holding company will directly or indirectly own or control 5.0% or more of the voting shares of the bank; (ii) it or any of its subsidiaries, other than a bank, may acquire all or substantially all of the assets of any bank; or (iii) it may merge or consolidate with any other bank holding company.
Federal Oversight Over Mergers and Acquisitions, Investments and Branching The BHC Act requires every bank holding company to obtain the prior approval of the FRB before: (i) it may acquire direct or indirect ownership or control of any voting shares of any bank if, after such acquisition, the bank holding company will directly or indirectly own or control 5.0% or more of the voting shares of the bank; (ii) it or any of its subsidiaries, other than a bank, may acquire all or 9 substantially all of the assets of any bank; or (iii) it may merge or consolidate with any other bank holding company.
In addition, as a result of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) enacted on March 27, 2020 in response to the COVID-19 pandemic, the federal bank regulatory agencies issued rules that allow banking organizations that implemented CECL in 2020 to elect to mitigate the effects of the CECL accounting standard on their regulatory capital for two years.
In addition, as a result of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) enacted on March 27, 2020 in response to the COVID-19 pandemic, the 11 federal bank regulatory agencies issued rules that allow banking organizations that implemented CECL in 2020 to elect to mitigate the effects of the CECL accounting standard on their regulatory capital for two years.
Community Reinvestment Act The Community Reinvestment Act (CRA) requires an insured depository institution’s appropriate federal banking regulator to evaluate the institution's record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, and to 12 consider this record in its evaluation of certain applications to banking regulators, such as an application for approval of a merger or the establishment of a branch.
Community Reinvestment Act The CRA requires an insured depository institution’s appropriate federal banking regulator to evaluate the institution's record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, and to consider this record in its evaluation of certain applications to banking regulators, such as an application for approval of a merger or the establishment of a branch.
The BHC Act, as amended by the interstate banking provisions of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (Riegle-Neal Act), permits a bank holding company, such as Trustmark, to acquire a bank located in any other state, regardless of state law to the contrary, subject to certain deposit-percentage, aging requirements, and other restrictions, if the company is 9 well-capitalized.
The BHC Act, as amended by the interstate banking provisions of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (Riegle-Neal Act), permits a bank holding company, such as Trustmark, to acquire a bank located in any other state, regardless of state law to the contrary, subject to certain deposit-percentage, aging requirements, and other restrictions, if the company is well-capitalized.
Newly issued trust preferred securities and cumulative perpetual preferred stock generally 10 may be included in Tier 2 capital, provided they do not include features that are disallowed by the capital rules, such as the acceleration of principal other than in the event of a bankruptcy, insolvency, or receivership of the issuer.
Newly issued trust preferred securities and cumulative perpetual preferred stock generally may be included in Tier 2 capital, provided they do not include features that are disallowed by the capital rules, such as the acceleration of principal other than in the event of a bankruptcy, insolvency, or receivership of the issuer.
These laws include the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, the Fair Debt Collection Practices Act and their state law counterparts. At the federal level, most consumer financial protection laws are administered by the CFPB, which supervises TNB.
These laws include the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, the Fair Debt Collection Practices Act and their state law counterparts. At 13 the federal level, most consumer financial protection laws are administered by the CFPB, which supervises TNB.
The credit risk inherent in these loans depends on, to a significant degree, the general economic 6 conditions of these areas. Further, credit risk can increase if Trustmark’s loans are concentrated to borrowers engaged in the same or similar activities, or to groups of borrowers who may be uniquely or disproportionately affected by market or economic conditions.
The credit risk inherent in these loans depends on, to a significant degree, the general economic conditions of these areas. Further, credit risk can increase if Trustmark’s loans are concentrated to borrowers engaged in the same or similar activities, or to groups of borrowers who may be uniquely or disproportionately affected by market or economic conditions.
Finally, the Dodd-Frank Act potentially expanded state regulation over banks by eliminating National Bank Act preemption for national bank operating subsidiaries, including operating subsidiaries of TNB. 13 Financial Privacy Laws and Cybersecurity The Gramm-Leach-Bliley Financial Services Modernization Act of 1999 (GLB Act) imposed requirements related to the privacy of customer financial information.
Finally, the Dodd-Frank Act potentially expanded state regulation over banks by eliminating National Bank Act preemption for national bank operating subsidiaries, including operating subsidiaries of TNB. Financial Privacy Laws and Cybersecurity The Gramm-Leach-Bliley Financial Services Modernization Act of 1999 (GLB Act) imposed requirements related to the privacy of customer financial information.
As a general matter, extending credit to businesses and consumers exposes Trustmark to credit risk, which is the risk that the principal balance and any related interest may not be collected according to the original terms due to the inability or unwillingness of the borrower to repay the loan.
As a general matter, extending credit to businesses and consumers exposes Trustmark to credit risk, which is the risk that the principal balance and any related interest may not be collected according to the original terms due to the inability or unwillingness of the borrower 5 to repay the loan.
The FDIC deposit market share data presented below does not align with Trustmark’s reported geographic market regions, which in some instances cross state lines, and Trustmark’s 8 geographic coverage within certain states presented below is not statewide (see the section captioned “Description of Business” above).
The FDIC deposit market share data presented below does not align with Trustmark’s reported geographic market regions, which in some instances cross state lines, and Trustmark’s geographic coverage within certain states presented below is not statewide (see the section captioned “Description of Business” above).
Accordingly, the accounts of the Trust are not included in Trustmark’s consolidated financial statements. Strategy Trustmark seeks to be a premier diversified financial services company in its markets, providing a broad range of banking, wealth management and insurance solutions to its customers.
Accordingly, the accounts of the Trust are not included in Trustmark’s consolidated financial statements. Strategy Trustmark seeks to be a premier diversified financial services company in its markets, providing a broad range of banking and wealth management solutions to its customers.
Under the final rule, the FDIC will collect special assessments at a quarterly rate of 3.36 basis points, or approximately 13.4 basis points annually, over eight quarterly assessment periods beginning with the first quarterly assessment period of 2024.
Under the final rule, the FDIC will collect special assessments at a quarterly rate of 3.36 basis points, or approximately 13.4 basis points annually, over eight initial quarterly assessment periods beginning with the first quarterly assessment period of 2024.
Trustmark has numerous local, regional and national nonbank competitors, including savings and loan associations, credit unions, mortgage companies, insurance companies, finance companies, financial service operations of major retailers, investment brokerage and financial advisory firms and mutual fund companies.
Trustmark has numerous local, regional and national nonbank competitors, including savings and loan associations, credit unions, mortgage companies, finance companies, financial service operations of major retailers, investment brokerage and financial advisory firms and mutual fund companies.
The assessment base for the special assessment is equal to an insured depository 14 institution's estimated uninsured deposits, reported as of December 31, 2022, adjusted to exclude the first $5 billion in estimated uninsured deposits.
The assessment base for the special assessment is equal to an insured depository institution's estimated uninsured deposits, reported as of December 31, 2022, adjusted to exclude the first $5 billion in estimated uninsured deposits.
At December 31, 2023, TNB was well-capitalized based on the ratios and guidelines described above. In December 2018, the federal banking agencies issued a final rule that allows institutions to elect to phase in the regulatory capital effects of the Current Expected Credit Losses (CECL) accounting standard over three years.
At December 31, 2024, TNB was well-capitalized based on the ratios and guidelines described above. In December 2018, the federal banking agencies issued a final rule that allows institutions to elect to phase in the regulatory capital effects of the Current Expected Credit Losses (CECL) accounting standard over three years.
The effects are being phased-in over a three-year period from January 1, 2022 through December 31, 2024. Payment of Dividends and Stock Repurchases Trustmark is limited in its ability to pay dividends or repurchase its stock by the FRB, including if doing so would be an unsafe or unsound banking practice.
The effects were phased-in over a three-year period from January 1, 2022 through December 31, 2024. Payment of Dividends and Stock Repurchases Trustmark is limited in its ability to pay dividends or repurchase its stock by the FRB, including if doing so would be an unsafe or unsound banking practice.
In addition, the Office of the Comptroller of the Currency (OCC) has the authority to approve applications by national banks to establish de novo branches, including, under the Riegle-Neal Act, in states other than the bank’s home state if the law of the state in which the branch is located, or is to be located, would permit establishment of the branch if the bank were a state bank chartered by such state.
In addition, the OCC has the authority to approve applications by national banks to establish de novo branches, including, under the Riegle-Neal Act, in states other than the bank’s home state if the law of the state in which the branch is located, or is to be located, would permit establishment of the branch if the bank were a state bank chartered by such state.
Chambers, Jr., 64 Trustmark Corporation Principal Accounting Officer since March 2021 Trustmark National Bank Executive Vice President and Chief Accounting Officer since March 2021 Senior Vice President and Controller from March 2009 to February 2021 Monica A.
Chambers, Jr., 65 Trustmark Corporation Principal Accounting Officer since March 2021 Trustmark National Bank Executive Vice President and Chief Accounting Officer since March 2021 Senior Vice President and Controller from March 2009 to February 2021 Monica A.
Dewey, 65 Trustmark Corporation President and Chief Executive Officer since January 2021 Trustmark National Bank Chief Executive Officer since January 2021 President since January 2020 Chief Operating Officer from January 2019 to December 2020 George T.
Dewey, 66 Trustmark Corporation President and Chief Executive Officer since January 2021 Trustmark National Bank Chief Executive Officer since January 2021 President since January 2020 Chief Operating Officer from January 2019 to December 2020 George T.
At June 30, 2023, Trustmark’s deposit market share ranked within the top three positions in 56.0% of the 55 counties served and within the top five positions in 69.0% of the counties served. The following table presents Federal Deposit Insurance Corporation (FDIC) deposit data regarding TNB’s deposit market share by state as of June 30, 2023.
At June 30, 2024, Trustmark’s deposit market share ranked within the top three positions in 55.0% of the 56 counties served and within the top five positions in 68.0% of the counties served. The following table presents Federal Deposit Insurance Corporation (FDIC) deposit data regarding TNB’s deposit market share by state as of June 30, 2024.
Arthur Stevens, 59 Trustmark National Bank President – Retail Banking since September 2011 Maria Luisa "Ria" Sugay, 42 Trustmark National Bank Bank Treasurer since March 2021 Bank Co-Treasurer from July 2020 to February 2021 Executive Vice President since July 2020 USAA Director, Asset Liability Management from June 2016 to June 2020 Granville Tate, Jr., 67 Trustmark Corporation Secretary since December 2015 Trustmark National Bank Chief Administrative Officer since January 2021 Chief Risk Officer from June 2016 to November 2021 General Counsel from December 2015 to November 2021 Executive Vice President and Secretary since December 2015
Arthur Stevens, 60 Trustmark National Bank President – Retail Banking since September 2011 Maria Luisa "Ria" Sugay, 43 Trustmark National Bank Bank Treasurer since March 2021 Bank Co-Treasurer from July 2020 to February 2021 Executive Vice President since July 2020 USAA Director, Asset Liability Management from June 2016 to June 2020 Granville Tate, Jr., 68 Trustmark Corporation Secretary since December 2015 Trustmark National Bank Chief Administrative Officer since January 2021 Chief Risk Officer from June 2016 to November 2021 General Counsel from December 2015 to November 2021 Executive Vice President and Secretary since December 2015
Similar to commercial and industrial loans, inherent risk in other loans can arise due to fluctuations in borrowers’ financial condition, deterioration in collateral values and changes in market and economic conditions.
Similar to commercial and industrial loans, inherent risk in other commercial loans and leases can arise due to fluctuations in borrowers’ or lessee's financial condition, deterioration in collateral values and changes in market and economic conditions.
Owens, 59 Trustmark Corporation Treasurer and Principal Financial Officer since March 2021 Trustmark National Bank Chief Financial Officer since March 2021 Bank Treasurer from September 2013 to February 2021 Executive Vice President since 2013 W.
Owens, 60 Trustmark Corporation Treasurer and Principal Financial Officer since March 2021 Trustmark National Bank Chief Financial Officer since March 2021 16 Bank Treasurer from September 2013 to February 2021 Executive Vice President since 2013 W.
Commercial and Industrial LHFI – Commercial loans (other than commercial loans related to real estate assets, which are summarized above) are 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, equipment and fixed asset purchases that are secured by those assets and term financing for those within Trustmark’s geographic markets.
Commercial and Industrial LHFI – Commercial loans (other than commercial loans related to real estate assets, which are summarized above) are 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, equipment and fixed asset purchases that are secured by those assets and term financing for those 6 within Trustmark’s defined trade area.
Employees At December 31, 2023, Trustmark employed 2,757 full-time equivalent associates, none of which are represented by a collective bargaining agreement. Trustmark believes its employee relations to be satisfactory.
Employees At December 31, 2024, Trustmark employed 2,500 full-time equivalent associates, none of which are represented by a collective bargaining agreement. Trustmark believes its employee relations to be satisfactory.
Host, 69 Trustmark Corporation Chairman since May 2022 Executive Chairman from January 2021 to April 2022 Chairman from April 2020 to December 2020 President and Chief Executive Officer from January 2011 to December 2020 Trustmark National Bank Chairman since May 2022 Executive Chairman from January 2021 to April 2022 Chairman from April 2020 to December 2020 Chief Executive Officer from January 2011 to December 2020 President from January 2011 to December 2019 15 Duane A.
Host, 70 Trustmark Corporation Chairman since May 2022 Executive Chairman from January 2021 to April 2022 Chairman from April 2020 to December 2020 President and Chief Executive Officer from January 2011 to December 2020 Trustmark National Bank Chairman since May 2022 Executive Chairman from January 2021 to April 2022 Chairman from April 2020 to December 2020 Chief Executive Officer from January 2011 to December 2020 Duane A.
LHFI and LHFS Secured by Residential Properties – Residential real estate loans consist of first and junior liens on residential properties that are extended in the geographic markets in which Trustmark operates as well as mortgage products, originated and purchased, that are underwritten to secondary market standards.
LHFI and LHFS Secured by Residential Properties – Residential real estate loans consist of first and junior liens on residential properties that are primarily extended in the defined trade area in which Trustmark operates as well as mortgage products, originated and purchased, that are underwritten to secondary market standards.
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.
These leases are underwritten based on the specific nature or purpose of the lease and underlying collateral with special consideration given to the specific source of repayment for the lease.
Depending on a large bank’s geographic concentrations of lending, the evaluation of retail lending may include assessment areas in which the bank extends loans but does not operate any deposit-taking facilities, in addition to assessment areas in which the bank has deposit-taking facilities. The rule becomes effective April 1, 2024.
Depending on a large bank’s geographic concentrations of lending, the evaluation of retail lending may include assessment areas in which the bank extends loans but does not operate any deposit-taking facilities, in addition to assessment areas in which the bank has deposit-taking facilities.
Through TNB and its subsidiaries, Trustmark operates as a financial services organization providing banking and other financial solutions through offices and 2,757 full-time equivalent associates (measured at December 31, 2023) located in the states of Alabama (includes the Georgia Loan Production Office (LPO), which are collectively referred to herein as Trustmark's Alabama market region), Florida (primarily in the northwest or “Panhandle” region of that state, which is referred to herein as Trustmark’s Florida market), Mississippi, Tennessee (in the Memphis and Northern Mississippi regions, which are collectively referred to herein as Trustmark’s 3 Tennessee market), and Texas (primarily in Houston, which is referred to herein as Trustmark’s Texas market).
Through TNB and its subsidiaries, Trustmark operates as a financial services organization providing banking and other financial solutions through offices and 2,500 full-time equivalent associates (measured at December 31, 2024) 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).
Day, 63 Trustmark National Bank President – Institutional Banking since April 2019 Executive Vice President and Real Estate Banking Manager from May 2017 to April 2019 Robert Barry Harvey, 64 Trustmark National Bank Chief Credit and Operations Officer since June 2021 Chief Credit Officer from March 2010 to May 2021 Executive Vice President since March 2010 Thomas C.
Day, 64 Trustmark National Bank President – Institutional Banking since April 2019 Robert Barry Harvey, 65 Trustmark National Bank Chief Credit and Operations Officer since June 2021 Chief Credit Officer from March 2010 to May 2021 Executive Vice President since March 2010 Thomas C.
At December 31, 2023, TNB had total assets of $18.720 billion, which represented approximately 99.99% of the consolidated assets of Trustmark.
At December 31, 2024, TNB had total assets of $18.150 billion, which represented approximately 99.99% of the consolidated assets of Trustmark.
Other LHFI – Other loans 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.
Other Commercial LHFI – Other loans include 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.
As a result of this rule, the FDIC insurance costs of insured depository institutions, including TNB, have generally increased. TNB incurred an additional $2.6 million of FDIC assessment expense during 2023 as a result of this rule.
As a result of this rule, the FDIC insurance costs of insured depository institutions, including TNB, have generally increased. TNB incurred an additional $3.4 million of FDIC assessment expense during 2024 as a result of this rule.
Since the outbreak of the COVID-19 pandemic, the amount of total estimated insured deposits has grown rapidly while the funds in the DIF have grown at a normal rate, causing the DIF reserve ratio to fall below the statutory minimum of 1.35%.
During the COVID-19 pandemic, the amount of total estimated insured deposits grew rapidly while the funds in the DIF grew at a normal rate, causing the DIF reserve ratio to fall below the statutory minimum of 1.35%.
Repayment is normally derived from the sale of the underlying property or from permanent financing, which refinances Trustmark’s 5 initial loan. Trustmark’s engagement in this type of lending is generally extended to those builders and developers exhibiting the highest credit quality with significant equity invested in the project and is primarily restricted to projects within Trustmark’s geographic markets.
Repayment is normally derived from the sale of the underlying property or from permanent financing, which refinances Trustmark’s initial loan. Trustmark’s engagement in this type of lending is generally extended to those builders and developers exhibiting the highest credit quality with significant equity invested in the projects which are primarily located within Trustmark’s defined trade area.
These services include the administration of personal trusts and estates as well as the management of investment accounts for individuals, employee benefit plans and charitable foundations. TNB also provides corporate trust and institutional custody, securities brokerage, financial and estate planning and retirement plan services.
These services include the administration of personal trusts and estates as well as the management of investment and individual retirement accounts for individuals, employee benefit plans and charitable foundations. TNB also provides institutional custody for large governmental entities and foundations, financial and estate planning and retirement plan services.
State Deposit Market Share Alabama 1.80 % Florida 0.17 % Mississippi 12.87 % Tennessee 0.33 % Texas 0.04 % Services provided by the Wealth Management Segment face competition from many national, regional and local financial institutions.
State Deposit Market Share Alabama 1.91 % Florida 0.17 % Mississippi 13.05 % Tennessee 0.32 % Texas 0.04 % Services provided by the Wealth Management Segment face competition from many national, regional and local financial institutions.
Capital Adequacy Bank holding companies and banks are subject to various regulatory capital requirements administered by state and federal bank regulatory agencies. Capital adequacy regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting and other factors.
Capital adequacy regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting and other factors.
The federal Financial Crimes Enforcement Network of the Department of the Treasury, in addition to federal bank regulatory agencies, is authorized to impose significant civil money penalties for violations of these requirements, and has recently engaged in coordinated enforcement efforts with state and federal banking regulators, the U.S.
The federal Financial Crimes Enforcement Network of the Department of the Treasury, in addition to federal bank regulatory agencies, is authorized to impose significant civil money penalties for violations of these requirements, and has recently engaged in coordinated enforcement efforts with state and federal banking regulators, the DOJ, the Consumer Financial Protection Bureau (CFPB), the Drug Enforcement Administration and the Internal Revenue Service.
TNB is subject to supervision, examination, enforcement and reporting requirements under the National Bank Act, the Federal Reserve Act, the FDI Act, regulations of the OCC and certain of the requirements imposed by the Dodd-Frank Act. Trustmark and TNB are also subject to a wide range of consumer protection laws and regulations.
TNB is subject to supervision, examination, enforcement and reporting requirements under the National Bank Act, the Federal Reserve Act, the FDI Act, regulations of the OCC and certain of the requirements imposed by the Dodd-Frank Act.
Department of Justice, the Consumer Financial Protection Bureau (CFPB), the Drug Enforcement Administration and the Internal Revenue Service. Violations of AML requirements can also lead to criminal penalties. In addition, the federal banking agencies are required to consider the effectiveness of a financial institution’s AML activities when reviewing proposed bank mergers and bank holding company acquisitions. 11 The U.S.
Violations of AML requirements can also lead to criminal penalties. In addition, the federal banking agencies are required to consider the effectiveness of a financial institution’s AML activities when reviewing proposed bank mergers and bank holding company acquisitions. The U.S.
The principal products produced and services rendered by TNB and Trustmark’s other subsidiaries are as follows: Trustmark National Bank Commercial Banking – TNB provides a full range of commercial banking services to corporations and other business customers.
Trustmark’s operations are managed along two operating segments: General Banking Segment and Wealth Management Segment. The principal products produced and services rendered by TNB and Trustmark’s other subsidiaries are as follows: 3 Trustmark National Bank Commercial Banking – TNB provides a full range of commercial banking services to corporations and other business customers.
Recent Economic and Industry Developments Economic activity improved slightly during 2023; however, economic concerns remain as a result of the cumulative weight of uncertainty regarding the potential economic impact of geopolitical developments, such as the conflicts in Ukraine and the Middle East, inflation, the consequences of bank failures in the first half of 2023 and other economic and industry volatility, the 2024 political cycle in the United States, supply chain issues, higher energy prices and broader price pressures.
Recent Economic and Industry Developments Economic activity improved moderately during 2024; however, economic concerns remain as a result of the cumulative weight of uncertainty regarding the potential economic impact of geopolitical developments, such as the conflicts in Ukraine and the Middle East, inflation, other economic and industry volatility, the current United States presidential administration's policies, higher energy prices and broader price pressures.
At December 31, 2023, TNB also exceeded these requirements with common equity Tier 1 capital, Tier 1 capital and total capital equal to 10.58%, 10.58% and 11.61% of its total risk-weighted assets, respectively. At December 31, 2023, the leverage ratios for Trustmark and TNB were 8.62% and 8.75%, respectively.
At December 31, 2024, TNB also exceeded these requirements with common equity Tier 1 capital, Tier 1 capital and total capital equal to 12.20%, 12.20% and 13.41% of its total risk-weighted assets, respectively. At December 31, 2024, the leverage ratios for Trustmark and TNB were 9.99% and 10.21%, respectively.
There is heightened awareness around liquidity, uninsured deposits, deposit composition, unrecognized investment losses and capital. For additional discussion of the impact of the current economic environment on the financial condition and results of operations of Trustmark and its subsidiaries, see Part II. Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations of this report.
For additional discussion of the impact of the current economic environment on the financial condition and results of operations of Trustmark and its subsidiaries, see Part II. Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations of this report.
Trustmark’s products and services are designed to strengthen and expand customer relationships and enhance the organization’s competitive advantages in its markets as well as to provide cross-selling opportunities that will enable Trustmark to continue to diversify its revenue and earnings streams. 4 The following table sets forth summary data regarding Trustmark’s securities, loans, assets, deposits, equity and revenue over the past three years ($ in thousands): December 31, 2023 2022 2021 Securities $ 3,189,157 $ 3,518,596 $ 3,581,414 Total securities growth (decline) $ (329,439 ) $ (62,818 ) $ 1,051,527 Total securities growth (decline) -9.4 % -1.8 % 41.6 % Loans held for investment (LHFI) $ 12,950,524 $ 12,204,039 $ 10,247,829 Total loans growth (decline) $ 746,485 $ 1,956,210 $ 423,305 Total loans growth (decline) 6.1 % 19.1 % 4.3 % Assets $ 18,722,189 $ 18,015,478 $ 17,595,636 Total assets growth (decline) $ 706,711 $ 419,842 $ 1,043,796 Total assets growth (decline) 3.9 % 2.4 % 6.3 % Deposits $ 15,569,763 $ 14,437,648 $ 15,087,160 Total deposits growth (decline) $ 1,132,115 $ (649,512 ) $ 1,038,396 Total deposits growth (decline) 7.8 % -4.3 % 7.4 % Equity $ 1,661,847 $ 1,492,268 $ 1,741,311 Total equity growth (decline) $ 169,579 $ (249,043 ) $ 194 Total equity growth (decline) 11.4 % -14.3 % — Years Ended December 31, Revenue * $ 759,836 $ 699,852 $ 640,261 Total revenue growth (decline) $ 59,984 $ 59,591 $ (60,869 ) Total revenue growth (decline) 8.6 % 9.3 % -8.7 % * Consistent with Trustmark’s audited financial statements, revenue is defined as net interest income plus noninterest income.
Trustmark’s products and services are designed to strengthen and expand customer relationships and enhance the organization’s competitive advantages in its markets as well as to provide cross-selling opportunities that will enable Trustmark to continue to diversify its revenue and earnings streams. 4 The following table sets forth summary data regarding Trustmark’s securities, loans, assets, deposits, equity and revenue over the past three years ($ in thousands): December 31, 2024 2023 2022 Securities $ 3,027,919 $ 3,189,157 $ 3,518,596 Total securities growth (decline) $ (161,238 ) $ (329,439 ) $ (62,818 ) Total securities growth (decline) -5.1 % -9.4 % -1.8 % Loans held for investment (LHFI) $ 13,089,942 $ 12,950,524 $ 12,204,039 Total loans growth (decline) $ 139,418 $ 746,485 $ 1,956,210 Total loans growth (decline) 1.1 % 6.1 % 19.1 % Assets $ 18,152,422 $ 18,722,189 $ 18,015,478 Total assets growth (decline) $ (569,767 ) $ 706,711 $ 419,842 Total assets growth (decline) -3.0 % 3.9 % 2.4 % Deposits $ 15,108,175 $ 15,569,763 $ 14,437,648 Total deposits growth (decline) $ (461,588 ) $ 1,132,115 $ (649,512 ) Total deposits growth (decline) -3.0 % 7.8 % -4.3 % Equity $ 1,962,327 $ 1,661,847 $ 1,492,268 Total equity growth (decline) $ 300,480 $ 169,579 $ (249,043 ) Total equity growth (decline) 18.1 % 11.4 % -14.3 % Years Ended December 31, Revenue * $ 561,002 $ 701,311 $ 646,130 Total revenue growth (decline) $ (140,309 ) $ 55,181 $ 54,485 Total revenue growth (decline) -20.0 % 8.5 % 9.2 % * Consistent with Trustmark’s audited financial statements, revenue is defined as net interest income plus noninterest income (loss).
At December 31, 2023, Trustmark exceeded its minimum capital requirements with common equity Tier 1 capital, Tier 1 capital and total capital equal to 10.04%, 10.44% and 12.29% of its total risk-weighted assets, respectively.
At December 31, 2024, Trustmark exceeded its minimum capital requirements with common equity Tier 1 capital, Tier 1 capital and total capital equal to 11.54%, 11.94% and 13.97% of its total risk-weighted assets, respectively.
In October 2023, the FRB proposed changes to its EFTA rules that would decrease the maximum interchange fees that an issuer may receive for an electronic debit transaction to the sum of 14.4 cents and four basis points multiplied by the value of the transaction and increase the fraud prevention adjustment to 1.3 cents.
In addition, the FRB’s rules allow for an upward adjustment of no more than one cent to an issuer’s debit card interchange fee if the issuer develops and implements policies and procedures reasonably designed to achieve the fraud-prevention standards set out in the rule. 14 In October 2023, the FRB proposed changes to its EFTA rules that would decrease the maximum interchange fees that an issuer may receive for an electronic debit transaction to the sum of 14.4 cents and four basis points multiplied by the value of the transaction and increase the fraud prevention adjustment to 1.3 cents.
Louis (which includes Trustmark’s Tennessee market region), and Eleventh District, Dallas (which includes Trustmark’s Texas market region), noted similar findings for the reporting period as those discussed above.
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), noted similar findings for the reporting period as those discussed above.
Competition There is significant competition within the banking and financial services industry in the markets in which Trustmark operates. Changes in regulation, technology and product delivery systems have resulted in an increasingly competitive environment. Trustmark expects to continue to face increasing competition from online and traditional financial institutions seeking to attract customers by providing access to similar services and products.
Competition There is significant competition within the banking and financial services industry in the markets in which Trustmark operates. Changes in regulation, technology and product delivery systems have resulted in an increasingly competitive environment.
Additionally, banking organizations are required to notify their primary federal regulator of significant computer security incidents within 36 hours of determining that such an incident has occurred.
Additionally, banking organizations are required to notify their primary federal regulator of significant computer security incidents within 36 hours of determining that such an incident has occurred. On October 22, 2024, the CFPB released a final rule to implement Section 1033 of the Dodd-Frank Act.
The Federal Reserve’s Eighth District also reported that loan growth slowed at a modest pace during the reporting period, but banking conditions and lending activity remained healthy.
The Federal Reserve’s Eighth District also reported that loan growth slowed at a modest pace during the reporting period, but banking conditions and lending activity remained healthy. The Federal Reserve’s Eighth District also noted that contacts continued to express inflationary concerns related to potential import tariffs or supply chain disruptions from a dockworker strike.
As of its last examination from the OCC, TNB received a CRA rating of “Needs to Improve.” The evaluation covered activities in the period from January 1, 2019 through December 31, 2021. TNB received performance ratings of “High Satisfactory” on each of the three individual components of the CRA examination.
As of its last examination from the OCC, TNB received a CRA rating of “Outstanding.” The evaluation covered activities in the period from January 1, 2022 through December 31, 2023.
Source of Strength Under the FDI Act, Trustmark is expected to act as a source of financial and managerial strength to TNB. Under this policy, a bank holding company is expected to commit resources to support its bank subsidiary, including at times when the holding company may not be inclined or in a financial position to provide it.
Under this policy, a bank holding company is expected to commit resources to support its bank subsidiary, including at times when the holding company may not be inclined or in a financial position to provide it. 10 Capital Adequacy Bank holding companies and banks are subject to various regulatory capital requirements administered by state and federal bank regulatory agencies.
Trustmark is evaluating the impact of this proposal. The FRB also has established rules governing routing and exclusivity that require debt card issuers to offer two unaffiliated networks for routing transactions on each debit or prepaid product.
If finalized as proposed, the proposal could reduce interchange revenue for banks with $10 billion or more in assets, such as TNB. The FRB also has established rules governing routing and exclusivity that require debt card issuers to offer two unaffiliated networks for routing transactions on each debit or prepaid product.
Trustmark and its subsidiaries compete with national and state-chartered banking institutions of comparable or larger size and resources and with smaller community banking organizations.
Trustmark expects to 8 continue to face increasing competition from online and traditional financial institutions seeking to attract customers by providing access to similar services and products. Trustmark and its subsidiaries compete with national and state-chartered banking institutions of comparable or larger size and resources and with smaller community banking organizations.
Restrictions on Lending, Insider Transactions and Affiliate Transactions National banks are limited in the amounts they may lend to one borrower and the amount they may lend to insiders. These single counterparty and insider lending limits extend to loans, derivative transactions, repurchase agreements, reverse repurchase agreements and securities lending or borrowing transactions.
These single counterparty and insider lending limits extend to loans, derivative transactions, repurchase agreements, reverse repurchase agreements and securities lending or borrowing transactions. In addition, the FDI Act imposes restrictions on insured depository institutions’ purchases of assets from insiders.
A change in statutes, regulations or policies could have a material impact on the business of Trustmark and its subsidiaries. Regulation of Trustmark Trustmark is a registered bank holding company under the Bank Holding Company Act of 1956 (BHC Act).
Regulation of Trustmark Trustmark is a registered bank holding company under the Bank Holding Company Act of 1956 (BHC Act).
Customers for commercial, consumer and mortgage banking as well as wealth management and insurance services are influenced by convenience, quality of service, personal contacts, availability of products and services and competitive pricing. Trustmark continually reviews its products, locations, alternative delivery channels, and pricing strategies to maintain and enhance its competitive position.
Trustmark’s ability to compete effectively is a result of providing customers with desired products and services in a convenient and cost-effective manner. Customers for commercial, consumer and mortgage banking as well as wealth management services are influenced by convenience, quality of service, personal contacts, availability of products and services and competitive pricing.
The discussion is a summary of detailed statutes, regulations and policies. The descriptions are not intended to be complete summaries of the statutes, regulations and policies referenced therein. Such statutes, regulations and policies are continually under the review of the United States Congress and state legislatures as well as federal and state regulatory agencies.
Such statutes, regulations and policies are continually under the review of the United States Congress and state legislatures as well as federal and state regulatory agencies. A change in statutes, regulations or policies could have a material impact on the business of Trustmark and its subsidiaries.
While Trustmark’s position varies by market, Management believes it can compete effectively as a result of the quality of Trustmark’s products and services, local market knowledge and awareness of customer needs. Supervision and Regulation The following discussion sets forth material elements of the regulatory framework applicable to bank holding companies and their subsidiaries and provides specific information relevant to Trustmark.
Trustmark continually reviews its products, locations, alternative delivery channels, and pricing strategies to maintain and enhance its competitive position. While Trustmark’s position varies by market, Management believes it can compete effectively as a result of the quality of Trustmark’s products and services, local market knowledge and awareness of customer needs.
Mortgage Banking – TNB provides mortgage banking services, including construction financing, production of conventional and government insured mortgages, secondary marketing and mortgage servicing. Insurance – TNB provides a competitive array of insurance solutions for business and individual risk management needs.
Mortgage Banking – TNB provides mortgage banking services, including construction financing, production of conventional and government insured mortgages, secondary marketing and mortgage servicing. Wealth Management – TNB offers specialized fiduciary services and expertise in the areas of wealth management, trust, investment, brokerage, qualified and non-qualified retirement plan services and custodial services for corporate and individual customers.
In addition, the FRB increased the interest that it pays on reserves multiple times during 2022 and 2023 from 0.10% to 5.40% as of December 2023. As interest rates have increased, so have competitive pressures on the deposit cost of funds.
In September 2024, the FRB made the first of multiple declines in the rate it pays on reserves, lowering the rate to 4.40% as of December 2024. Prior period rate increases increased the competitive pressures on the deposit cost of funds.
The FDIC also may suspend deposit insurance temporarily during the hearing process for the permanent termination of insurance if the institution has no tangible capital. In 2023, TNB’s expenses related to deposit insurance premiums totaled $13.5 million. TNB Subsidiaries TNB’s nonbanking subsidiaries are subject to a variety of state and federal laws and regulations.
The FDIC also may suspend deposit insurance temporarily during the hearing process for the permanent termination of insurance if the institution has no tangible capital. On July 30, 2024, the FDIC issued a proposed rule that would revise the FDIC’s regulations governing the classification and treatment of brokered deposits.
This enables FBBI to engage in insurance agency activities at any location. Available Information Trustmark’s internet address is www.trustmark.com. Information contained on this website is not a part of this report.
Information contained on this website is not a part of this report.
The special assessment is not expected to be material to Trustmark's financial condition or results of operations.
During 2024, the FDIC updated its estimate of the DIF’s losses and projected that the special assessment would be collected for an additional two quarters beyond the initial eight-quarter collection periods, at a lower rate. The special assessment is not expected to be material to Trustmark's financial condition or results of operations.
FBBI is subject to the insurance laws and regulations of the states in which it is active. SCC is subject to the supervision and regulation of the CDFI Fund and the State of Mississippi.
In 2024, TNB’s expenses related to deposit insurance premiums totaled $19.2 million. TNB Subsidiaries TNB’s nonbanking subsidiaries are subject to a variety of state and federal laws and regulations. SCC is subject to the supervision and regulation of the CDFI Fund and the State of Mississippi. 15 Available Information Trustmark’s internet address is www.trustmark.com.
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Business insurance offerings include services and specialized products for medical professionals, construction, manufacturing, hospitality, real estate and group life and health plans. Individual customers are also provided life and health insurance, and personal line policies. TNB provides these services through Fisher Brown Bottrell Insurance, Inc.
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Trustmark reports LHFI by its six geographic market regions based on the location of the loan origination with the exception of loans secured by 1-4 family residential properties (representing traditional mortgages) and credit cards.
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(FBBI), a Mississippi corporation and a wholly-owned subsidiary of TNB, which is based in Jackson, Mississippi. Wealth Management and Trust Services – TNB offers specialized services and expertise in the areas of wealth management, trust, investment and custodial services for corporate and individual customers.
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Loans secured by 1-4 family residential properties and credit cards are 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.
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Market interest rates began to rise during 2022 after an extended period at historical lows. Starting in March 2022, the FRB began raising the target federal funds rate for the first time in three years and continued with multiple increases throughout 2022 and 2023, up to a range of 5.25% to 5.50% as of December 2023.
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The related construction project, property or collateral may be located outside of Trustmark's six geographic market regions but are primarily within its defined trade area.
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This has been exacerbated by bank failures and the resulting heightened competition for deposits, which has also affected the interest that Trustmark pays on deposits. It is not possible to predict the pace and magnitude of changes in interest rates, or the impact rate changes will have on Trustmark's results of operations.
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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 a nationwide line of business located in Atlanta, Georgia.
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Reports by the twelve Federal Reserve Districts noted the following during the reporting period: • Consumer spending provided some seasonal relief over the holidays by meeting expectations in most Districts and exceeding expectations in three Districts. Several Districts noted increased leisure travel. Contacts in nearly all Districts reported decreases in manufacturing activity.
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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. Other commercial LHFI also include leases of machinery and equipment to commercial customers.
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Districts continued to note that high interest rates were limiting auto sales and real estate deals; however, the prospect of falling interest rates was cited by numerous contacts in various sectors as a source of optimism. • Concerns about the office market, weakening overall demand and the 2024 political cycle were often cited as sources of economic uncertainty.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSince alternative reference rates are calculated differently than LIBOR, payments under contracts referencing new alternative reference rates will differ from those referencing LIBOR. Trustmark cannot predict what the ultimate impact of the transition from LIBOR will be; however, Trustmark has implemented various measures to manage the transition and mitigate risks.
Biggest changeThe transition from LIBOR has resulted in and could continue to result in added costs and employee efforts and could present additional risk. Since alternative reference rates are calculated differently than LIBOR, payments under contracts referencing new alternative reference rates will differ from those referencing LIBOR.
In particular, Trustmark may face the following risks in connection with these events: • Market developments and the resulting economic pressure on consumers may affect consumer confidence levels and may cause increases in delinquencies and default rates, which, among other effects, could further affect Trustmark’s charge-offs and provision for credit losses. • Loan performance could experience a significantly extended deterioration or loan default levels could accelerate, foreclosure activity could significantly increase, or Trustmark’s assets (including loans and investment securities) could materially decline in value, any one of which, or any combination of more than one of which, could have a material adverse effect on Trustmark’s financial condition or results of operations. • Management’s ability to measure the fair value of Trustmark’s assets could be adversely affected by market disruptions that could make valuation of assets more difficult and subjective.
In particular, Trustmark may face the following risks in connection with these events: • Market developments and the resulting economic pressure on consumers may affect consumer confidence levels and may cause increases in delinquencies and default rates, which, among other effects, could further affect Trustmark’s charge-offs and provision for credit losses. • Loan performance could experience a significantly extended deterioration or loan default levels could accelerate, foreclosure activity could significantly increase, or Trustmark’s assets (including loans and investment securities) could materially decline in value, any one of which, or any combination of more than one of which, could have a material adverse effect on Trustmark’s financial condition or results of operations. 20 • Management’s ability to measure the fair value of Trustmark’s assets could be adversely affected by market disruptions that could make valuation of assets more difficult and subjective.
A security breach or other significant disruption of Trustmark's information systems or those related to its customers, merchants or third-party vendors, including as a result of cyber-attacks, could (i) disrupt the proper functioning of its networks and systems and therefore its operations and/or those of its customers; (ii) result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of confidential, sensitive or otherwise valuable information of Trustmark or its customers; (iii) result in a violation of applicable privacy, data breach and other laws, subjecting Trustmark to additional regulatory scrutiny and exposing it to civil litigation, enforcement actions, governmental fines and possible financial liability; (iv) require significant management attention and resources to remedy the damages that result; or (v) harm Trustmark's reputation or cause a decrease in the number of customers that choose to do business with Trustmark.
A security breach or other significant disruption of Trustmark's information systems or those related to its customers, merchants or third-party vendors, including as a result of cyber-attacks, could (i) disrupt the proper functioning of its networks and systems and therefore its operations and/or those of its customers; (ii) result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of confidential, sensitive or otherwise valuable information of Trustmark or its customers; (iii) result in a violation of applicable privacy, data breach and other laws, subjecting Trustmark to additional regulatory scrutiny and exposing it to civil litigation, enforcement actions, governmental fines and possible financial liability; (iv) require significant management attention and resources to remedy the damages that result; or (v) harm Trustmark's reputation or cause a decrease in the number of customers that choose to do business with 25 Trustmark.
The factors affecting financial stocks generally and Trustmark’s stock price in particular include: • actual or anticipated variations in earnings; • changes in analysts’ recommendations or projections; • operating and stock performance of other companies deemed to be peers; 26 • perception in the marketplace regarding Trustmark, its competitors and/or the industry as a whole; • significant acquisitions or business combinations involving Trustmark or its competitors; • provisions in Trustmark’s by-laws and articles of incorporation that may discourage takeover attempts, which may make Trustmark less attractive to a potential purchaser; • changes in government regulation; • failure to integrate acquisitions or realize anticipated benefits from acquisitions; and • volatility affecting the financial markets in general.
The factors affecting financial stocks generally and Trustmark’s stock price in particular include: • actual or anticipated variations in earnings; • changes in analysts’ recommendations or projections; • operating and stock performance of other companies deemed to be peers; • perception in the marketplace regarding Trustmark, its competitors and/or the industry as a whole; • significant acquisitions or business combinations involving Trustmark or its competitors; • provisions in Trustmark’s by-laws and articles of incorporation that may discourage takeover attempts, which may make Trustmark less attractive to a potential purchaser; • changes in government regulation; • failure to integrate acquisitions or realize anticipated benefits from acquisitions; and • volatility affecting the financial markets in general.
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.
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 17 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.
Trustmark also faces competition from many other types of financial institutions, including savings and loans, credit unions, finance companies, brokerage firms, insurance companies, factoring companies and other financial intermediaries. Additionally, fintech developments, such as blockchain and other distributed ledger technologies, have the potential to disrupt the financial industry and change the way banks do business.
Trustmark also faces competition from many other types of financial institutions, including savings and loans, credit unions, finance companies, brokerage firms, factoring companies and other financial intermediaries. Additionally, fintech developments, such as blockchain and other distributed ledger technologies, have the potential to disrupt the financial industry and change the way banks do business.
The expenses associated with holding a significant amount of other real estate could have a material adverse effect on Trustmark’s financial condition or results of operations. 23 If Trustmark is required to repurchase a significant number of mortgage loans that it had previously sold, such repurchases could negatively affect earnings.
The expenses associated with holding a significant amount of other real estate could have a material adverse effect on Trustmark’s financial condition or results of operations. If Trustmark is required to repurchase a significant number of mortgage loans that it had previously sold, such repurchases could negatively affect earnings.
Although Management has established disaster recovery policies and procedures, the occurrence of a natural disaster, especially if any applicable insurance coverage is not adequate to enable Trustmark’s borrowers to recover from the effects of the event, could have a material adverse effect on Trustmark’s financial condition or results of operations.
Although Management has established disaster recovery policies and procedures, the occurrence of a natural disaster, especially if any applicable insurance coverage is not adequate to 27 enable Trustmark’s borrowers to recover from the effects of the event, could have a material adverse effect on Trustmark’s financial condition or results of operations.
Any failure or circumvention of Trustmark’s controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on Trustmark’s business, financial condition and results of operations. 25 Trustmark may be subject to increased claims and litigation, which could result in legal liability and reputational damage.
Any failure or circumvention of Trustmark’s controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on Trustmark’s business, financial condition and results of operations. Trustmark may be subject to increased claims and litigation, which could result in legal liability and reputational damage.
Trustmark relies on standard internet security systems to provide the 24 security and authentication necessary to effect secure transmission of data. However, these precautions may not protect Trustmark’s systems from compromise or breaches of security, which could result in significant legal liability and significant damage to Trustmark’s reputation and business.
Trustmark relies on standard internet security systems to provide the security and authentication necessary to effect secure transmission of data. However, these precautions may not protect Trustmark’s systems from compromise or breaches of security, which could result in significant legal liability and significant damage to Trustmark’s reputation and business.
Following the LIBOR cessation date of June 30, 2023, the nationwide process for replacing LIBOR in financial contracts that mature thereafter and that do not provide for an effective means to replace LIBOR upon its cessation took effect pursuant to the Adjustable Interest Rate (LIBOR) Act.
Following the LIBOR 18 cessation date of June 30, 2023, the nationwide process for replacing LIBOR in financial contracts that mature thereafter and that do not provide for an effective means to replace LIBOR upon its cessation took effect pursuant to the Adjustable Interest Rate (LIBOR) Act.
This 16 section includes a description of the risks, uncertainties and assumptions identified by Management that could, individually or in combination, materially affect Trustmark’s financial condition and results of operations, as well as the value of Trustmark’s financial instruments in general, and Trustmark common stock, in particular.
This section includes a description of the risks, uncertainties and assumptions identified by Management that could, individually or in combination, materially affect Trustmark’s financial condition and results of operations, as well as the value of Trustmark’s financial instruments in general, and Trustmark common stock, in particular.
In addition, financial institutions face scrutiny on actions and policies that are deemed to adversely impact consumers under the Dodd-Frank Act’s prohibition against unfair, deceptive or abusive acts and practices and Section 5 of the Federal Trade Commission Act’s 21 prohibition against unfair or deceptive acts and practices.
In addition, financial institutions face scrutiny on actions and policies that are deemed to adversely impact consumers under the Dodd-Frank Act’s prohibition against unfair, deceptive or abusive acts and practices and Section 5 of the Federal Trade Commission Act’s prohibition against unfair or deceptive acts and practices.
This information could include financial statements, credit reports, business plans, and 18 other information. Trustmark may also rely on representations of those customers, counterparties or other third parties, such as independent auditors, as to the accuracy and completeness of that information.
This information could include financial statements, credit reports, business plans, and other information. Trustmark may also rely on representations of those customers, counterparties or other third parties, such as independent auditors, as to the accuracy and completeness of that information.
Acquisitions may involve the payment of a premium over book and market values, and, therefore, some dilution of Trustmark’s tangible book value and net income per share of common stock may occur in connection with any future transaction.
Acquisitions 26 may involve the payment of a premium over book and market values, and, therefore, some dilution of Trustmark’s tangible book value and net income per share of common stock may occur in connection with any future transaction.
These regulatory expectations may change, and potentially become more rigorous in certain ways, due to an interagency effort to replace existing guidance on the risk management of third-party 22 relationships with new guidance.
These regulatory expectations may change, and potentially become more rigorous in certain ways, due to an interagency effort to replace existing guidance on the risk management of third-party relationships with new guidance.
The financial services industry could become even more competitive as a result of legislative, regulatory and technological changes and continued consolidation. 20 Some of Trustmark’s competitors have fewer regulatory constraints and may have lower cost structures.
The financial services industry could become even more competitive as a result of legislative, regulatory and technological changes and continued consolidation. Some of Trustmark’s competitors have fewer regulatory constraints and may have lower cost structures.
If Trustmark determines that a credit loss exists, the credit portion of the allowance would be measured using a discounted cash flow (DCF) analysis using the effective interest rate as of the security’s purchase date.
If Trustmark 19 determines that a credit loss exists, the credit portion of the allowance would be measured using a discounted cash flow (DCF) analysis using the effective interest rate as of the security’s purchase date.
Such changes could subject Trustmark to additional costs, limit the types of financial services and products Trustmark may offer and/or increase the ability of nonbanks to offer competing financial services and products, among other things.
Such changes 21 could subject Trustmark to additional costs, limit the types of financial services and products Trustmark may offer and/or increase the ability of nonbanks to offer competing financial services and products, among other things.
The United States Congress, state legislatures and 27 federal and state regulatory agencies have continued to propose and advance numerous legislative and regulatory initiatives seeking to mitigate the effects of climate change.
The United States Congress, state legislatures and federal and state regulatory agencies have continued to propose and advance numerous legislative and regulatory initiatives seeking to mitigate the effects of climate change.
The rising interest rate environment during 2022 and 2023, the resulting industry-wide reduction in the fair value of securities portfolios and the bank runs that led to the failures of some financial institutions in March 2023, among other events, have resulted in a current state of volatility and uncertainty with respect to the health of the United States banking system.
The rising interest rate environment during 2022 and 2023, the resulting industry-wide reduction in the fair value of securities portfolios and the bank runs that led to the failures of some financial institutions in March 2023, among other events, resulted in a state of volatility and uncertainty with respect to the health of the United States banking system.
At December 31, 2023, gross unrealized losses on securities for which an allowance for credit losses has not been recorded totaled $196.1 million. Trustmark may be required to record credit loss expense if these investments suffer a decline in value that is the result of a credit loss.
At December 31, 2024, gross unrealized losses on securities for which an allowance for credit losses has not been recorded totaled $30.0 million. Trustmark may be required to record credit loss expense if these investments suffer a decline in value that is the result of a credit loss.
FASB ASC Topic 326 generally is expected to result in earlier recognition of credit losses, which would increase reserves and decrease capital. Additionally, the allowance for credit losses model could be materially impacted by changes in current and forecasted macroeconomic conditions.
FASB ASC Topic 326 generally results in earlier recognition of credit losses, which would increase reserves and decrease capital. Additionally, the allowance for credit losses model could be materially impacted by changes in current and forecasted macroeconomic conditions.
In the event of a hypothetical 100 basis point decrease in interest rates using static balances at December 31, 2023, it is estimated net interest income may decrease by 0.4%, while a hypothetical 200 basis point decrease in interest rates, may decrease net interest income 1.0%.
In the event of a hypothetical 100 basis point decrease in interest rates using static balances at December 31, 2024, it is estimated net interest income may decrease by 1.2%, while a hypothetical 200 basis point decrease in interest rates, may decrease net interest income 3.0%.
Trustmark’s simulation model using static balances at December 31, 2023, estimated that in the event of a hypothetical 200 basis point increase in interest rates, net interest income may increase 0.5%, while a hypothetical 100 basis point increase in interest rates, may increase net interest income 0.3%.
Trustmark’s simulation model using static balances at December 31, 2024, estimated that in the event of a hypothetical 200 basis point increase in interest rates, net interest income may increase 0.8%, while a hypothetical 100 basis point increase in interest rates, may increase net interest income 0.4%.
Trustmark transitioned to SOFR for new variable rate loans, derivative contracts, borrowings and other financial instruments as of January 1, 2022. Trustmark had a significant number of loans, derivative contracts, borrowings and other financial instruments with attributes that were either directly or indirectly dependent on LIBOR.
Trustmark transitioned to SOFR for new variable rate loans, derivative contracts, borrowings and other financial instruments as of January 1, 2022. Trustmark had a significant number of loans, derivative contracts, borrowings and other financial instruments with attributes that were either directly or indirectly dependent on LIBOR. As of December 31, 2024, all of Trustmark’s LIBOR exposure was remediated.
In 2021, TNB settled a fair lending enforcement action with the Department of Justice, the OCC and the CFPB and incurred a one-time settlement expense of $5.0 million and made other commitments to enhance credit opportunities to residents of majority-Black and Hispanic neighborhoods in the Memphis metropolitan statistical area.
In 2021, TNB settled a fair lending enforcement action with the DOJ, the OCC and the CFPB and incurred a one-time settlement expense of $5.0 million and made other commitments to enhance credit opportunities to residents of majority-Black and Hispanic neighborhoods in the Memphis metropolitan statistical area. Trustmark and TNB could be subject to other enforcement actions in the future.
Strategic risk, including threats to business models from rising rates and modest economic growth, remains high. Management’s ability to plan, prioritize and allocate resources in this environment will be critical to Trustmark’s ability to sustain earnings that will attract capital.
Strategic risk, including threats to business models from increasing pressures on net interest margins and modest economic growth, remains high. Management’s ability to plan, prioritize and allocate resources in this environment will be critical to Trustmark’s ability to sustain earnings that will attract capital.
The Department of Justice and other federal agencies are responsible for enforcing these laws and regulations.
The DOJ and other federal agencies are responsible for enforcing these laws and regulations.
If trends in the housing and real estate markets were to revert to or decline below recession levels, Trustmark may experience higher than normal delinquencies and credit losses.
There are inherent risks associated with Trustmark’s lending activities. If trends in the housing and real estate markets were to revert to or decline below recession levels, Trustmark may experience higher than normal delinquencies and credit losses.
Economic activity improved slightly during 2023; however, economic concerns remain as a result of the cumulative weight of uncertainty regarding the potential economic impact of geopolitical developments, such as the conflicts in Ukraine and the Middle East, inflation, the consequences of bank failures and other economic and industry volatility, the 2024 political cycle in the United States, supply chain issues, higher energy prices and broader price pressures.
Economic activity improved moderately during 2024; however, economic concerns remain as a result of the cumulative weight of uncertainty regarding the potential economic impact of geopolitical developments, such as the conflicts in Ukraine and the Middle East, inflation, other economic and industry volatility, the current United States presidential administration's policies, higher energy prices and broader price pressures.
In addition, the enforcement priorities of the agencies enforcing consumer protection laws have evolved over time and may continue to do so. TNB's CRA rating of "Needs to Improve" could make it more difficult for Trustmark’s business to grow.
In addition, the enforcement priorities of the agencies enforcing consumer protection laws have evolved over time and may continue to do so. Failure by Trustmark to perform satisfactorily on its CRA evaluations could make it more difficult for Trustmark’s business to grow.
Trustmark is unable to predict changes in market interest rates, which are affected by many factors beyond Trustmark’s control, including inflation, recession, unemployment, money supply, domestic and international events and changes in the United States and other financial markets. Market interest rates began to rise during 2022 after an extended period at historical lows.
Trustmark is unable to predict changes in market interest rates, which are affected by many factors beyond Trustmark’s control, including inflation, recession, unemployment, money supply, domestic and international events and changes in the United States and other financial markets. Market interest rates remained elevated during most of 2024.
To mitigate such risk, Trustmark maintains available lines of credit with the Federal Reserve Bank of Atlanta and the FHLB of Dallas that are secured by loans and investment securities.
To mitigate such risk, Trustmark maintains available lines of credit with the Federal Reserve Bank of Atlanta (FRBA) and the FHLB of Dallas that are secured by loans and investment securities. Management continuously monitors Trustmark’s liquidity position for compliance with internal policies.
Further, Trustmark’s operational and security systems and infrastructure may be vulnerable to breaches and cybersecurity-related incidents including, but not limited to, attempts to access information, including customer and company information, malicious code, computer viruses and denial of service attacks that could result in unauthorized access, theft, misuse, loss, release or destruction of data (including confidential customer information), account takeovers, unavailability of service or other events.
There could be sudden increases in customer transaction volume; electrical, telecommunications or other major physical infrastructure outages; natural disasters; and events arising from local or larger scale political or social matters, including terrorist acts. 24 Further, Trustmark’s operational and security systems and infrastructure may be vulnerable to breaches and cybersecurity-related incidents including, but not limited to, attempts to access information, including customer and company information, malicious code, computer viruses and denial of service attacks that could result in unauthorized access, theft, misuse, loss, release or destruction of data (including confidential customer information), account takeovers, unavailability of service or other events.
Because of the complexities presented by current economic conditions, Management will continue to be challenged in identifying alternative sources of revenue, prudently diversifying assets, liabilities and revenue and effectively managing the costs of compliance. Market interest rates began to rise during 2022 after an extended period at historical lows and continued to rise in 2023.
Because of the complexities presented by current economic conditions, Management will continue to be challenged in identifying alternative sources of revenue, prudently diversifying assets, liabilities and revenue and effectively managing the costs of compliance. Market interest rates remained elevated until September 2024, at which time interest rates began to decline.
Management continuously monitors Trustmark’s liquidity position for compliance with internal policies. 19 External and Market-Related Risks Trustmark’s business may be adversely affected by conditions in the financial markets and economic conditions in general.
External and Market-Related Risks Trustmark’s business may be adversely affected by conditions in the financial markets and economic conditions in general.
Trustmark will continue to count $60.0 million in outstanding trust preferred securities issued by the Trust as Tier 1 capital up to the regulatory limit, as permitted by a grandfather provision in the capital rules, but this grandfather provision may cease to apply if Trustmark consummates an acquisition of a depository institution holding company and the resulting organization has $15 billion of more in total assets.
Trustmark will continue to count $60.0 million in outstanding trust preferred securities issued by the Trust as Tier 1 capital up to the regulatory limit, as permitted by a grandfather provision in the capital rules, but this grandfather provision may cease to apply if Trustmark consummates an acquisition of a depository institution holding company and the resulting organization has $15 billion of more in total assets. 22 Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC) Topic 326, “ Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments ,” requires Trustmark to recognize all expected credit losses over the life of a loan based on historical experience, current conditions and reasonable and supportable forecasts.
At December 31, 2023, goodwill and other identifiable intangible assets were $387.2 million. Under current accounting standards, if Trustmark determines goodwill or intangible assets are impaired, Trustmark would be required to write down the carrying value of these assets. Trustmark’s annual goodwill impairment evaluation performed during the fourth quarter of 2023 indicated no impairment of goodwill for any reporting segment.
At December 31, 2024, goodwill and other identifiable intangible assets, 23 net were $334.7 million. Under current accounting standards, if Trustmark determines goodwill or intangible assets are impaired, Trustmark would be required to write down the carrying value of these assets.
This causes asymmetry in the magnitude of changes in net interest income, net economic value and investment income resulting from the hypothetical increases and decreases in interest rates.
This causes asymmetry in the magnitude of changes in net interest income, net economic value and investment income resulting from the hypothetical increases and decreases in interest rates. Therefore, Management monitors interest rate risk and adjusts Trustmark’s investment, funding and hedging strategies to mitigate adverse effects of interest rate shifts on Trustmark’s balance sheet.
Therefore, Management monitors interest rate risk and adjusts Trustmark’s investment, funding and hedging strategies to mitigate adverse effects of interest rate shifts on Trustmark’s balance sheet. 17 Trustmark utilizes derivative contracts to hedge the mortgage servicing rights (MSR) in order to offset changes in fair value resulting from changes in interest rate environments.
Trustmark utilizes derivative contracts to hedge the mortgage servicing rights (MSR) in order to offset changes in fair value resulting from changes in interest rate environments.
Trustmark holds other real estate and may acquire and hold significant additional amounts, which could lead to increased operating expenses and vulnerability to additional declines in real property values. As business necessitates, Trustmark forecloses on and takes title to real estate serving as collateral for loans. At December 31, 2023, Trustmark held $6.9 million of other real estate.
As business necessitates, Trustmark forecloses on and takes title to real estate serving as collateral for loans. At December 31, 2024, Trustmark held $5.9 million of other real estate.
Credit and Lending Risks Trustmark is subject to lending risk, which could impact the adequacy of the allowance for credit losses and results of operations. There are inherent risks associated with Trustmark’s lending activities.
Trustmark cannot predict what the ultimate impact of the transition from LIBOR will be; however, Trustmark has implemented various measures to manage the transition and mitigate risks. Credit and Lending Risks Trustmark is subject to lending risk, which could impact the adequacy of the allowance for credit losses and results of operations.
In addition, the FRB increased the interest that it pays on reserves multiple times during 2022 and 2023 from 0.10% to 5.40% as of December 2023. As interest rates have increased, so have competitive pressures on the deposit cost of funds.
In addition, the FRB maintained the rate it paid on reserves at 5.40% from July 2023 through September 2024. In September 2024, the FRB made the first of multiple declines in the rate it pays on reserves, lowering the rate to 4.40% as of December 2024. Prior period rate increases increased the competitive pressures on the deposit cost of funds.
Substantial legal liability against Trustmark, including its subsidiaries, could materially adversely affect Trustmark’s business, financial condition or results of operations, or cause significant harm to its reputation. TNB recently agreed to settlements relating to litigation involving the Stanford Financial Group and Adams/Madison Timber.
Substantial legal liability against Trustmark, including its subsidiaries, could materially adversely affect Trustmark’s business, financial condition or results of operations, or cause significant harm to its reputation. Damage to Trustmark’s reputation could have a significant negative impact on Trustmark’s business. Trustmark’s ability to attract and retain customers, clients, investors, and highly-skilled management and employees is affected by its reputation.
Management cannot provide assurance, however, that Trustmark will not be required to take an impairment charge in the future. Any impairment charge would have an adverse effect on Trustmark’s shareholders’ equity and financial condition and could cause a decline in Trustmark’s stock price.
Any impairment charge would have an adverse effect on Trustmark’s shareholders’ equity and financial condition and could cause a decline in Trustmark’s stock price. Trustmark holds other real estate and may acquire and hold significant additional amounts, which could lead to increased operating expenses and vulnerability to additional declines in real property values.
This has been exacerbated by the bank failures in the first half of 2023 and the resulting heightened competition for deposits, which has also affected the interest that Trustmark pays on deposits. It is not possible to predict the pace and magnitude of changes in interest rates, or the impact rate changes will have on Trustmark's results of operations.
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 pace and magnitude of changes in interest rates, or the impact rate changes will have on Trustmark's results of operations.
Removed
Starting in March 2022, the FRB began raising the target federal funds rate for the first time in three years and continued with multiple increases throughout 2022 and 2023, up to a range of 5.25% to 5.50% as of December 2023.
Added
The FRB maintained the target federal funds rate at a range of 5.25% to 5.50% from July 2023 through September 2024.
Removed
As of December 31, 2023, all of Trustmark’s LIBOR exposure was remediated or in the process of being remediated. The transition from LIBOR has resulted in and could continue to result in added costs and employee efforts and could present additional risk.
Added
In September 2024, the FRB began lowering the target federal funds rate making multiple decreases during the fourth quarter of 2024 to a range of 4.25% to 4.50% as of December 2024, based on its confidence that inflation was moving substantially toward 2.00% and that the risks to achieving the FRB's employment and inflation goals were roughly balanced.
Removed
As interest rates have increased, so have competitive pressures on the deposit cost of funds. This has been exacerbated by bank failures and the resulting heightened competition for deposits, which has also affected the interest that Trustmark pays on deposits.
Added
Prior period rate increases increased the competitive pressures on the 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.
Removed
Trustmark and TNB could be subject to other enforcement actions in the future.
Added
As of its last examination, TNB received a CRA rating of “Outstanding,” which represented an improvement from its previous CRA rating of “Needs to Improve.” TNB’s failure to maintain at least a “Satisfactory” CRA rating in the future could adversely affect its ability to complete the acquisition of another financial institution or open a new branch.
Removed
As of its last examination, TNB received a CRA rating of “Needs to Improve,” which is downgraded from its prior rating of “Satisfactory.” The rating of “Needs to Improve” adversely affects TNB’s ability to obtain regulatory approvals to engage in certain expansionary activities, including certain mergers and acquisitions and the establishment of bank branches.
Added
If TNB receives an overall CRA rating of less than “Satisfactory” in the future, the OCC would not re-evaluate its rating until TNB’s next CRA examination, which may not occur for several more years, and it is possible that a low CRA rating would not improve in the future. Trustmark is subject to stringent capital requirements.
Removed
These limitations will remain in place until TNB receives a CRA rating of at least “Satisfactory” following a subsequent CRA examination. The precise timing of the completion of that examination and any results therefrom will not be known until later, and it is possible that TNB’s current CRA rating would not improve in the next examination.
Added
Trustmark’s annual goodwill impairment evaluation performed during the fourth quarter of 2024 indicated no impairment of goodwill for any reporting segment. Management cannot provide assurance, however, that Trustmark will not be required to take an impairment charge in the future.
Removed
Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC) Topic 326, “ Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments ,” requires Trustmark to recognize all expected credit losses over the life of a loan based on historical experience, current conditions and reasonable and supportable forecasts.
Removed
There could be sudden increases in customer transaction volume; electrical, telecommunications or other major physical infrastructure outages; natural disasters; and events arising from local or larger scale political or social matters, including terrorist acts.
Removed
For additional information regarding these settlements, see the section captioned “Legal Proceedings” in Note 16 - Commitments and Contingencies included in Part II. Item 8. - Financial Statements and Supplementary Data of this report. Damage to Trustmark’s reputation could have a significant negative impact on Trustmark’s business.
Removed
Trustmark’s ability to attract and retain customers, clients, investors, and highly-skilled management and employees is affected by its reputation.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTrustmark’s information security program is primarily administered at the management level by the Information Security Department, which is led by Trustmark’s Chief Information Security Officer (CISO), and is supported by the Information Technology Department, which is led by Trustmark’s Chief Information Officer (CIO). The CISO reports to the CIO, who in turn reports to Trustmark’s Chief Credit and Operations Officer.
Biggest changeThese reports to the Board and its Committees address the threat environment, vulnerability assessments, specific cyber incidents and management’s efforts to monitor, detect and prevent cyber threats. 28 Trustmark’s information security program is primarily administered at the management level by the Information Security Department, which is led by Trustmark’s Chief Information Security Officer (CISO), and is supported by the Information Technology Department, which is led by Trustmark’s Chief Information Officer (CIO).
Trustmark also utilizes third party service providers in 28 the ordinary course of business. The Information Security Department performs information security assessments for third party service providers that store or process Trustmark confidential data.
Trustmark also utilizes third party service providers in the ordinary course of business. The Information Security Department performs information security assessments for third party service providers that store or process Trustmark confidential data.
Trustmark’s Information Security Department is responsible for day-to-day management of Trustmark’s information security program, including data loss prevention, access control, threat monitoring, incident response and employee education and training. The Information Security Department also maintains policies related to cybersecurity and data security that provide the required governance for the information security program.
The CISO reports to the CIO, who in turn reports to Trustmark’s Chief Credit and Operations Officer. Trustmark’s Information Security Department is responsible for day-to-day management of Trustmark’s information security program, including data loss prevention, access control, threat monitoring, incident response, insider threat monitoring and employee education and training.
Additionally, Trustmark’s Information Technology Department maintains policies that govern technical aspects of Trustmark’s information security program. Each policy is reviewed and approved by the Enterprise Risk Committee at least every three years and is mapped to applicable regulatory guidance.
Each policy is reviewed and approved by the Enterprise Risk Committee at least every three years and is mapped to applicable regulatory guidance. The Cybersecurity Operations team within the Information Technology Department maintains and runs Trustmark’s security operations center and is responsible for cybersecurity event management and maintaining security tooling.
Management provides periodic reports to the Enterprise Risk Committee and the Audit Committee, both of which provide reports of their meetings to the full Board. These reports to the Board and its Committees address the threat environment, vulnerability assessments, specific cyber incidents and management’s efforts to monitor, detect and prevent cyber threats.
Management provides periodic reports to the Enterprise Risk Committee and the Audit Committee, both of which provide reports of their meetings to the full Board.
Removed
The Cybersecurity Operations team within the Information Technology Department maintains and runs Trustmark’s security operations center and is responsible for cybersecurity event management and maintaining security tooling.
Added
The Information Security Department also maintains policies related to cybersecurity and data security that provide the required governance for the information security program. Additionally, Trustmark’s Information Technology Department maintains policies that govern technical aspects of Trustmark’s information security program.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAt December 31, 2023, Trustmark, through TNB, operated 163 full-service branches, 7 limited-service branches and an automated teller machine (ATM) network, which included 131 ATMs and 128 ITMs at its branches and other locations. In addition, Trustmark operated 13 offices in various locations providing mortgage banking, wealth management and insurance services.
Biggest changeAt December 31, 2024, Trustmark, through TNB, operated 163 full-service branches, 7 limited-service branches and an automated teller machine (ATM) network, which included 122 ATMs and 136 ITMs at its branches and other locations. In addition, Trustmark operated 8 offices in various locations providing mortgage banking, wealth management and/or corporate lending services.
Trustmark leases 32 of its branch and other office locations with the remainder being owned. Trustmark believes its properties are suitable and adequate to operate its financial services business.
Trustmark leases 28 of its branch and other office locations with the remainder being owned. Trustmark believes its properties are suitable and adequate to operate its financial services business.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeManagement 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 4. MINE SAF ETY DISCLOSURES Not applicable. PART II
Biggest changeManagement currently believes, 29 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 4. MINE SAF ETY DISCLOSURES Not applicable. PART II
ITEM 3. LEGAL PROCEEDINGS Information required in this section is set forth under the heading “Legal Proceedings” of Note 16 – Commitments and Contingencies in Part II. Item 8. – Financial Statements and Supplementary Data of this report.
ITEM 3. LEGAL PROCEEDINGS Information required in this section is set forth under the heading “Legal Proceedings” of Note 17 – Commitments and Contingencies in Part II. Item 8. – Financial Statements and Supplementary Data of this report.
Removed
As a result of the entry into the Stanford Settlement relating to the litigation involving the Stanford Financial Group, Trustmark recognized a $100.0 million litigation settlement expense included in noninterest expense during 2022, plus an additional $750 thousand in related legal fees.
Removed
As a result of the entry into the Adams/Madison Timber Settlement relating to the litigation involving Adams/Madison Timber, Trustmark recognized a $6.5 million litigation settlement expense included in noninterest expense during 2023.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 29 PART II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 29 Item 6. Selected Financial Data 32 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 33 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 66 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 30 PART II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 30 Item 6. Selected Financial Data 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 33 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 68 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOn December 5, 2023, the Board of Directors of Trustmark authorized a new stock repurchase program, effective January 1, 2024, under which $50.0 million of Trustmark's outstanding common stock may be acquired through December 31, 2024. The repurchase program, which is subject to market conditions and management discretion, will be implemented through open market repurchases or privately negotiated transactions.
Biggest changeThe repurchase program, which is subject to market conditions and management discretion, will be implemented through open market repurchases or privately negotiated transactions.
On December 7, 2021, the Board of Directors of Trustmark authorized a stock repurchase program, effective January 1, 2022, under which $100.0 million of Trustmark’s outstanding common stock could be acquired through December 31, 2022. Under this authority, Trustmark repurchased approximately 789 thousand shares of its common stock value at $24.6 million during 2022.
Stock Repurchase Program On December 7, 2021, the Board of Directors of Trustmark authorized a stock repurchase program, effective January 1, 2022, under which $100.0 million of Trustmark’s outstanding common stock could be acquired through December 31, 2022. Under this authority, Trustmark repurchased approximately 789 thousand shares of its common stock value at $24.6 million during 2022.
This presentation assumes that $100 was invested in shares of the relevant issuers on December 31, 2018, and that dividends received were immediately invested in additional shares. The graph plots the value of the initial $100 investment at one-year intervals for the fiscal years shown.
This presentation assumes that $100 was invested in shares of the relevant issuers on December 31, 2019, and that dividends received were immediately invested in additional shares. The graph plots the value of the initial $100 investment at one-year intervals for the fiscal years shown.
ITEM 5. MARKET FOR THE REGISTRANT’S COMM ON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Prices and Dividends Trustmark’s common stock is listed on the Nasdaq Stock Market and is traded under the symbol “TRMK.” 29 Trustmark paid quarterly cash dividends to shareholders of $0.23 per share, or $0.92 per share annually, in 2023.
ITEM 5. MARKET FOR THE REGISTRANT’S COMM ON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Prices and Dividends Trustmark’s common stock is listed on the Nasdaq Stock Market and is traded under the symbol “TRMK.” Trustmark paid quarterly cash dividends to shareholders of $0.23 per share, or $0.92 per share annually, in 2024.
Used with permission. All rights reserved. Index Data: Copyright Standard and Poor’s, Inc. Used with permission. All rights reserved. 31
Used with permission. All rights reserved. Index Data: Copyright Standard and Poor’s, Inc. Used with permission. All rights reserved.
At January 31, 2024, there were approximately 2,936 registered shareholders of record and approximately 15,952 beneficial account holders of shares in nominee name of Trustmark’s common stock. Other information required by this item can be found in Note 17 - Shareholders’ Equity included in Part II. Item 8. - Financial Statements and Supplementary Data of this report.
At January 31, 2025, there were approximately 2,784 registered shareholders of record and approximately 22,642 beneficial account holders of shares in nominee name of Trustmark’s common stock. Other information required by this item can be found in Note 18 - Shareholders’ Equity included in Part II. Item 8. - Financial Statements and Supplementary Data of this report.
No shares have been repurchased under this authority. 30 Performance Graph The following graph compares Trustmark’s annual percentage change in cumulative total return on common shares over the past five years with the cumulative total return of companies comprising the Nasdaq market value index and the S&P 500 – Regional Banks index.
Under this authority, Trustmark repurchased approximately 243 thousand shares of its common stock valued at $8.5 million during January 2025. 30 Performance Graph The following graph compares Trustmark’s annual percentage change in cumulative total return on common shares over the past five years with the cumulative total return of companies comprising the Nasdaq market value index and the S&P 500 – Regional Banks index.
Stock Repurchase Program On January 28, 2020, the Board of Directors of Trustmark authorized a stock repurchase program, effective April 1, 2020, under which $100.0 million of Trustmark’s outstanding common stock could be acquired through December 31, 2021. Under this authority, Trustmark repurchased approximately 1.9 million shares of its outstanding common stock valued at $61.8 million during 2021.
On December 5, 2023, the Board of Directors of Trustmark authorized a stock repurchase program, effective January 1, 2024, under which $50.0 million of Trustmark's outstanding common stock could be acquired through December 31, 2024. Under this authority, Trustmark repurchased approximately 203 thousand shares of its common stock valued at $7.5 million during the twelve months ended December 31, 2024.
Company 2018 2019 2020 2021 2022 2023 Trustmark $ 100.00 $ 124.73 $ 102.39 $ 125.30 $ 138.67 $ 115.09 NASDAQ Composite-Total Return 100.00 136.69 198.10 242.03 163.28 236.17 S&P 500 - Regional Banks 100.00 135.42 129.28 181.68 135.32 106.07 Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-2024. Index Data: Copyright NASDAQ OMX, Inc.
Company 2019 2020 2021 2022 2023 2024 Trustmark $ 100.00 $ 82.09 $ 100.46 $ 111.18 $ 92.28 $ 120.51 NASDAQ Composite-Total Return 100.00 144.92 177.06 119.45 172.77 223.87 S&P 500 - Regional Banks 100.00 95.47 134.16 99.93 78.33 102.05 Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-2025. Index Data: Copyright NASDAQ OMX, Inc.
Added
The following table sets forth information regarding purchases of shares of Trustmark common stock by Trustmark or on Trustmark’s behalf during the three months ended December 31, 2024 (amounts in thousands, except share and per share data): 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 October 1, 2024 to October 31, 2024 50,831 $ 34.98 50,831 $ 48,222 November 1, 2024 to November 30, 2024 124,207 37.35 124,207 43,583 December 1, 2024 to December 31, 2024 28,115 38.46 28,115 — Total 203,153 203,153 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 may be acquired through December 31, 2025.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeYears Ended December 31, 2023 2022 2021 Consolidated Statements of Income Total interest income $ 878,832 $ 541,833 $ 442,511 Total interest expense 325,954 47,125 24,160 Net interest income 552,878 494,708 418,351 Provision for credit losses (PCL), LHFI 27,362 21,677 (21,499 ) PCL, off-balance sheet credit exposures (2,781 ) 1,215 (2,949 ) Noninterest income 206,958 205,144 221,910 Noninterest expense 537,919 603,213 489,296 Income before income taxes 197,336 73,747 175,413 Income taxes 31,847 1,860 28,048 Net Income $ 165,489 $ 71,887 $ 147,365 Total Revenue (1) $ 759,836 $ 699,852 $ 640,261 Per Share Data Basic earnings per share $ 2.71 $ 1.17 $ 2.35 Diluted earnings per share 2.70 1.17 2.34 Cash dividends per share 0.92 0.92 0.92 Performance Ratios Return on average equity 10.54 % 4.48 % 8.32 % Return on average tangible equity 14.04 % 6.00 % 10.81 % Return on average assets 0.89 % 0.41 % 0.86 % Average equity / average assets 8.41 % 9.18 % 10.38 % Net interest margin (fully taxable equivalent) 3.32 % 3.17 % 2.76 % Dividend payout ratio 33.95 % 78.63 % 39.15 % Credit Quality Ratios (2) Net charge-offs (recoveries)/average loans 0.06 % 0.01 % -0.04 % PCL, LHFI / average loans 0.21 % 0.19 % -0.21 % Nonaccrual LHFI / (LHFI + LHFS) 0.76 % 0.53 % 0.60 % Nonperforming assets / (LHFI + LHFS) plus other real estate 0.81 % 0.55 % 0.64 % Allowance for credit losses (ACL), LHFI / LHFI 1.08 % 0.99 % 0.97 % (1) Consistent with Trustmark’s audited financial statements, total revenue is defined as net interest income plus noninterest income.
Biggest changeItem 8. – Financial Statements and Supplementary Data of this report. 31 Years Ended December 31, 2024 2023 2022 Consolidated Statements of Income (Loss) Total interest income $ 960,330 $ 878,832 $ 541,833 Total interest expense 375,909 325,954 47,125 Net interest income 584,421 552,878 494,708 Provision for credit losses (PCL), LHFI 37,287 27,362 21,677 PCL, LHFI sale of 1-4 family mortgage loans 8,633 — — PCL, off-balance sheet credit exposures (4,665 ) (2,781 ) 1,215 Noninterest income (loss) (23,419 ) 148,433 151,422 Noninterest expense 485,690 495,696 564,133 Income (loss) from continuing operations before income taxes 34,057 181,034 59,105 Income taxes from continuing operations (11,153 ) 27,744 (1,813 ) Income (loss) from continuing operations 45,210 153,290 60,918 Income from discontinued operations before income taxes 237,152 16,302 14,642 Income taxes from discontinued operations 59,353 4,103 3,673 Income from discontinued operations 177,799 12,199 10,969 Net Income $ 223,009 $ 165,489 $ 71,887 Total Revenue (1) $ 561,002 $ 701,311 $ 646,130 Per Share Data (2) Basic earnings (loss) per share (EPS) from continuing operations $ 0.74 $ 2.51 $ 0.99 Basic EPS from discontinued operations $ 2.91 $ 0.20 $ 0.18 Basic EPS - total $ 3.65 $ 2.71 $ 1.17 Diluted EPS from continuing operations $ 0.74 $ 2.50 $ 0.99 Diluted EPS from discontinued operations $ 2.90 $ 0.20 $ 0.18 Diluted EPS - total $ 3.63 $ 2.70 $ 1.17 Cash dividends per share $ 0.92 $ 0.92 $ 0.92 Performance Ratios Return on average equity 12.22 % 10.54 % 4.48 % Return on average equity from continuing operations 2.48 % 9.76 % 3.80 % Return on average tangible equity 15.20 % 14.04 % 6.00 % Return on average tangible equity from continuing operations 3.04 % 12.43 % 4.86 % Return on average assets 1.20 % 0.89 % 0.41 % Return on average assets from continuing operations 0.24 % 0.82 % 0.35 % Average equity / average assets 9.84 % 8.41 % 9.18 % Net interest margin (fully taxable equivalent) 3.51 % 3.32 % 3.17 % Dividend payout ratio 25.21 % 33.95 % 78.63 % Dividend payout ratio from continuing operations 124.32 % 36.65 % 92.93 % Credit Quality Ratios Net charge-offs (recoveries) (excl sale of 1-4 family mortgage loans) / average loans 0.12 % 0.06 % 0.01 % PCL, LHFI (excl PCL, LHFI sale of 1-4 family mortgage loans) / average loans 0.28 % 0.21 % 0.19 % Nonaccrual LHFI / (LHFI + LHFS) 0.60 % 0.76 % 0.53 % Nonperforming assets / (LHFI + LHFS) plus other real estate 0.65 % 0.81 % 0.55 % Allowance for credit losses (ACL), LHFI / LHFI 1.22 % 1.08 % 0.99 % (1) Consistent with Trustmark’s audited financial statements, total revenue is defined as net interest income plus noninterest income (loss).
ITEM 6. SELECTED FINANCIAL DATA The following unaudited consolidated financial data is derived from Trustmark’s audited financial statements as of and for the three years ended December 31, 2023 ($ in thousands, except per share data). The data should be read in conjunction with Part II.
ITEM 6. SELECTED FINANCIAL DATA The following unaudited consolidated financial data is derived from Trustmark’s audited financial statements as of and for the three years ended December 31, 2024 ($ in thousands, except per share data). The data should be read in conjunction with Part II.
Item 7. - Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8. – Financial Statements and Supplementary Data.
Item 7. - Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8. – Financial Statements and Supplementary Data. Trustmark completed the sale of Fisher Brown Bottrell Insurance, Inc., (FBBI), a wholly owned subsidiary of TNB, during the second quarter of 2024.
PPP, LHFS and LHFI) 13,135,336 12,339,265 10,556,871 Deposits 15,569,763 14,437,648 15,087,160 Total shareholders' equity 1,661,847 1,492,268 1,741,311 Stock Performance Market value - close $ 27.88 $ 34.91 $ 32.46 Book value 27.21 24.47 28.25 Tangible book value 20.87 18.11 21.93 Capital Ratios Total equity / total assets 8.88 % 8.28 % 9.90 % Tangible equity / tangible assets 6.95 % 6.27 % 7.86 % Tangible equity / risk-weighted assets 8.41 % 7.61 % 10.71 % Tier 1 leverage ratio (1) 8.62 % 8.47 % 8.73 % Common equity tier 1 risk-based capital ratio (1) 10.04 % 9.74 % 11.29 % Tier 1 risk-based capital ratio (1) 10.44 % 10.15 % 11.77 % Total risk-based capital ratio (1) 12.29 % 11.91 % 13.55 % (1) Effective 2020, Trustmark elected the five-year phase-in transition period related to adopting FASB ASU 2016-13 for regulatory capital purposes.
(2) Due to rounding, EPS from continuing operations and discontinued operations may not sum to EPS from net income. 32 December 31, 2024 2023 2022 Consolidated Balance Sheets Total assets $ 18,152,422 $ 18,722,189 $ 18,015,478 Securities 3,027,919 3,189,157 3,518,596 Total loans (LHFI + LHFS) 13,290,249 13,135,336 12,339,265 Deposits 15,108,175 15,569,763 14,437,648 Total shareholders' equity 1,962,327 1,661,847 1,492,268 Stock Performance Market value - close $ 35.37 $ 27.88 $ 34.91 Book value 32.17 27.21 24.47 Tangible book value 26.68 20.87 18.11 Capital Ratios Total equity / total assets 10.81 % 8.88 % 8.28 % Tangible equity / tangible assets 9.13 % 7.22 % 6.54 % Tangible equity / risk-weighted assets 10.86 % 8.76 % 7.97 % Tier 1 leverage ratio 9.99 % 8.62 % 8.47 % Common equity tier 1 risk-based capital ratio 11.54 % 10.04 % 9.74 % Tier 1 risk-based capital ratio 11.94 % 10.44 % 10.15 % Total risk-based capital ratio 13.97 % 12.29 % 11.91 %
Removed
(2) Excludes Paycheck Protection Program (PPP) loans. 32 December 31, 2023 2022 2021 Consolidated Balance Sheets Total assets $ 18,722,189 $ 18,015,478 $ 17,595,636 Securities 3,189,157 3,518,596 3,581,414 Total loans (incl.
Added
As such, financial results presented in the table below for the years ended December 31, 2024, 2023 and 2022, consist of both continuing and discontinued operations. The discontinued operations include the financial results of FBBI prior to the sale as well as the net gain on the sale.
Added
For additional information regarding discontinued operations, please see Note 2 – Discontinued Operations set forth in Part II.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following table provides the tax equivalent basis yield or rate for each component of the tax equivalent net interest margin for the periods presented ($ in thousands): Years Ended December 31, 2023 2022 2021 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets Interest-earning assets: Federal funds sold and securities purchased under reverse repurchase agreements $ 1,492 $ 80 5.36 % $ 1,753 $ 74 4.22 % $ 79 $ — — Securities available for sale: Taxable 2,090,201 35,359 1.69 % 2,932,054 38,799 1.32 % 2,573,533 30,453 1.18 % Nontaxable 4,657 182 3.91 % 4,997 195 3.90 % 5,166 199 3.85 % Securities held to maturity: Taxable 1,454,450 30,741 2.11 % 911,010 20,918 2.30 % 423,763 8,245 1.95 % Nontaxable 1,854 81 4.37 % 5,623 227 4.04 % 12,765 495 3.88 % PPP loans — — — 14,868 639 4.30 % 350,668 36,726 10.47 % Loans (LHFS and LHFI) 12,801,531 788,719 6.16 % 11,236,388 485,246 4.32 % 10,377,941 375,330 3.62 % Other earning assets 728,181 37,135 5.10 % 907,414 8,080 0.89 % 1,825,134 2,767 0.15 % Total interest-earning assets 17,082,366 892,297 5.22 % 16,014,107 554,178 3.46 % 15,569,049 454,215 2.92 % Other assets 1,718,058 1,567,921 1,599,114 Allowance for credit losses (125,942 ) (104,138 ) (110,170 ) Total Assets $ 18,674,482 $ 17,477,890 $ 17,057,993 Liabilities and Shareholders' Equity Interest-bearing liabilities: Interest-bearing demand deposits $ 4,871,977 121,138 2.49 % $ 4,585,955 16,409 0.36 % $ 4,096,746 4,906 0.12 % Savings deposits 3,838,791 28,605 0.75 % 4,579,742 9,654 0.21 % 4,622,167 7,912 0.17 % Time deposits 2,691,682 96,208 3.57 % 1,153,983 3,006 0.26 % 1,287,663 4,127 0.32 % Federal funds purchased and securities sold under repurchase agreements 410,945 20,419 4.97 % 283,328 6,127 2.16 % 172,782 232 0.13 % Other borrowings 984,315 50,441 5.12 % 198,672 4,963 2.50 % 125,554 1,037 0.83 % Subordinated notes 123,364 4,751 3.85 % 123,144 4,751 3.86 % 122,933 4,752 3.87 % Junior subordinated debt securities 61,856 4,392 7.10 % 61,856 2,215 3.58 % 61,856 1,194 1.93 % Total interest-bearing liabilities 12,982,930 325,954 2.51 % 10,986,680 47,125 0.43 % 10,489,701 24,160 0.23 % Noninterest-bearing demand deposits 3,532,134 4,452,046 4,531,642 Other liabilities 589,320 434,310 266,499 Shareholders' equity 1,570,098 1,604,854 1,770,151 Total Liabilities and Shareholders' Equity $ 18,674,482 $ 17,477,890 $ 17,057,993 Net Interest Margin 566,343 3.32 % 507,053 3.17 % 430,055 2.76 % Less tax equivalent adjustments: Investments 55 89 146 Loans 13,410 12,256 11,558 Net Interest Margin per Consolidated Statements of Income $ 552,878 $ 494,708 $ 418,351 42 The table below shows the change from year to year for each component of the tax equivalent net interest margin in the amount generated by volume changes and the amount generated by changes in the yield or rate (tax equivalent basis) for the periods presented ($ in thousands): 2023 Compared to 2022 2022 Compared to 2021 Increase (Decrease) Due To: Increase (Decrease) Due To: Yield/ Yield/ Volume Rate Net Volume Rate Net Interest earned on: Federal funds sold and securities purchased under reverse repurchase agreements $ (12 ) $ 18 $ 6 $ — $ 74 $ 74 Securities available for sale: Taxable (12,720 ) 9,280 (3,440 ) 4,508 3,838 8,346 Nontaxable (13 ) — (13 ) (7 ) 3 (4 ) Securities held to maturity: Taxable 11,669 (1,846 ) 9,823 10,962 1,711 12,673 Nontaxable (164 ) 18 (146 ) (287 ) 19 (268 ) PPP loans (319 ) (320 ) (639 ) (22,339 ) (13,748 ) (36,087 ) Loans, net of unearned income (LHFS and LHFI) 74,788 228,685 303,473 32,932 76,984 109,916 Other earning assets (1,898 ) 30,953 29,055 (2,008 ) 7,321 5,313 Total interest-earning assets 71,331 266,788 338,119 23,761 76,202 99,963 Interest paid on: Interest-bearing demand deposits 1,093 103,636 104,729 648 10,855 11,503 Savings deposits (1,806 ) 20,757 18,951 (73 ) 1,815 1,742 Time deposits 8,831 84,371 93,202 (399 ) (722 ) (1,121 ) Federal funds purchased and securities sold under repurchase agreements 3,676 10,616 14,292 233 5,662 5,895 Other borrowings 35,951 9,527 45,478 881 3,045 3,926 Subordinated notes 10 (10 ) — 9 (10 ) (1 ) Junior subordinated debt securities — 2,177 2,177 — 1,021 1,021 Total interest-bearing liabilities 47,755 231,074 278,829 1,299 21,666 22,965 Change in net interest income on a tax equivalent basis $ 23,576 $ 35,714 $ 59,290 $ 22,462 $ 54,536 $ 76,998 The change in interest due to both volume and yield or rate has been allocated to change due to volume and change due to yield or rate in proportion to the absolute value of the change in each.
Biggest changeOther interest expense decreased $33.2 million, or 55.7%, while the rate on other borrowings decreased to 4.60% compared to 5.09%, when 2024 is compared to 2023, principally due to a decrease in the amount of short-term FHLB advances obtained from the FHLB of Dallas during the year. 43 The following table provides the tax equivalent basis yield or rate for each component of the tax equivalent net interest margin for the periods presented ($ in thousands): Years Ended December 31, 2024 2023 2022 Average Yield/ Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Assets Interest-earning assets: Securities available for sale: Taxable $ 1,789,685 $ 55,932 3.13 % $ 2,090,201 $ 35,359 1.69 % $ 2,932,054 $ 38,799 1.32 % Nontaxable — — — 4,657 182 3.91 % 4,997 195 3.90 % Securities held to maturity: Taxable 1,388,531 29,989 2.16 % 1,454,450 30,741 2.11 % 911,010 20,918 2.30 % Nontaxable 112 5 4.46 % 1,854 81 4.37 % 5,623 227 4.04 % PPP loans — — — — — — 14,868 639 4.30 % Loans (LHFS and LHFI) 13,283,829 857,307 6.45 % 12,801,531 788,719 6.16 % 11,236,388 485,246 4.32 % Other earning assets 548,336 29,667 5.41 % 729,673 37,215 5.10 % 909,167 8,154 0.90 % Total interest-earning assets 17,010,493 972,900 5.72 % 17,082,366 892,297 5.22 % 16,014,107 554,178 3.46 % Other assets 1,685,971 1,718,058 1,567,921 Allowance for credit losses (148,564 ) (125,942 ) (104,138 ) Total Assets $ 18,547,900 $ 18,674,482 $ 17,477,890 Liabilities and Shareholders' Equity Interest-bearing liabilities: Interest-bearing demand deposits $ 5,348,043 148,888 2.78 % $ 4,871,977 121,138 2.49 % $ 4,585,955 16,409 0.36 % Savings deposits 3,506,829 30,121 0.86 % 3,838,791 28,605 0.75 % 4,579,742 9,654 0.21 % Time deposits 3,331,543 150,372 4.51 % 2,691,682 96,208 3.57 % 1,153,983 3,006 0.26 % Federal funds purchased and securities sold under repurchase agreements 398,884 20,154 5.05 % 410,945 20,419 4.97 % 283,328 6,127 2.16 % Other borrowings 388,266 17,146 4.42 % 984,315 50,441 5.12 % 198,672 4,963 2.50 % Subordinated notes 123,584 4,751 3.84 % 123,364 4,751 3.85 % 123,144 4,751 3.86 % Junior subordinated debt securities 61,856 4,477 7.24 % 61,856 4,392 7.10 % 61,856 2,215 3.58 % Total interest-bearing liabilities 13,159,005 375,909 2.86 % 12,982,930 325,954 2.51 % 10,986,680 47,125 0.43 % Noninterest-bearing demand deposits 3,179,641 3,532,134 4,452,046 Other liabilities 383,627 589,320 434,310 Shareholders' equity 1,825,627 1,570,098 1,604,854 Total Liabilities and Shareholders' Equity $ 18,547,900 $ 18,674,482 $ 17,477,890 Net Interest Margin 596,991 3.51 % 566,343 3.32 % 507,053 3.17 % Less tax equivalent adjustments: Investments 1 55 89 Loans 12,569 13,410 12,256 Net Interest Margin per Consolidated Statements of Income $ 584,421 $ 552,878 $ 494,708 44 The table below shows the change from year to year for each component of the tax equivalent net interest margin in the amount generated by volume changes and the amount generated by changes in the yield or rate (tax equivalent basis) for the periods presented ($ in thousands): 2024 Compared to 2023 2023 Compared to 2022 Increase (Decrease) Due To: Increase (Decrease) Due To: Yield/ Yield/ Volume Rate Net Volume Rate Net Interest earned on: Securities available for sale: Taxable $ (5,721 ) $ 26,294 $ 20,573 $ (12,720 ) $ 9,280 $ (3,440 ) Nontaxable (91 ) (91 ) (182 ) (13 ) — (13 ) Securities held to maturity: Taxable (1,449 ) 697 (752 ) 11,669 (1,846 ) 9,823 Nontaxable (78 ) 2 (76 ) (164 ) 18 (146 ) PPP loans — — — (319 ) (320 ) (639 ) Loans, net of unearned income (LHFS and LHFI) 30,490 38,098 68,588 74,788 228,685 303,473 Other earning assets (9,700 ) 2,152 (7,548 ) (1,910 ) 30,971 29,061 Total interest-earning assets 13,451 67,152 80,603 71,331 266,788 338,119 Interest paid on: Interest-bearing demand deposits 12,660 15,090 27,750 1,093 103,636 104,729 Savings deposits (2,570 ) 4,086 1,516 (1,806 ) 20,757 18,951 Time deposits 25,699 28,465 54,164 8,831 84,371 93,202 Federal funds purchased and securities sold under repurchase agreements (596 ) 331 (265 ) 3,676 10,616 14,292 Other borrowings (27,163 ) (6,132 ) (33,295 ) 35,951 9,527 45,478 Subordinated notes 10 (10 ) — 10 (10 ) — Junior subordinated debt securities — 85 85 — 2,177 2,177 Total interest-bearing liabilities 8,040 41,915 49,955 47,755 231,074 278,829 Change in net interest income on a tax equivalent basis $ 5,411 $ 25,237 $ 30,648 $ 23,576 $ 35,714 $ 59,290 The change in interest due to both volume and yield or rate has been allocated to change due to volume and change due to yield or rate in proportion to the absolute value of the change in each.
Allowance for Credit Losses (ACL) LHFI The ACL, LHFI is a valuation account, calculated in accordance with FASB ASC Topic 326, that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans.
Allowance for Credit Losses LHFI The ACL, LHFI is a valuation account, calculated in accordance with FASB ASC Topic 326, that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans.
Mortgage Servicing Rights (MSR) Trustmark recognizes as assets the rights to service mortgage loans based on the estimated fair value of the MSR when loans are sold and the associated servicing rights are retained. Trustmark has elected to account for the MSR at fair value.
Mortgage Servicing Rights Trustmark recognizes as assets the rights to service mortgage loans based on the estimated fair value of the MSR when loans are sold and the associated servicing rights are retained. Trustmark has elected to account for the MSR at fair value.
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 on 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.
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.
During 2023, Trustmark recognized litigation settlement expense of $6.5 million as a result of the settlement relating to the litigation involving the Adams/Madison timber compared to litigation settlement expense of $100.0 million and legal fees of $750 thousand recognized in 2022 as a result of the settlement relating to the litigation involving the Stanford Financial Group.
During 2023, Trustmark recognized litigation settlement expense of $6.5 million as a result of the settlement relating to the litigation involving Adams/Madison timber compared to litigation settlement expense of $100.0 million and legal fees of $750 thousand recognized in 2022 as a result of the settlement relating to the litigation involving the Stanford Financial Group.
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.
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.
Assumptions, which have been chosen to represent the estimate of a particular event as required by GAAP, have been reviewed and approved by Management based on recommendations from its actuaries. 60 The range of potential contributions to the Continuing Plan is determined annually by the Continuing Plan’s actuary in accordance with applicable IRS rules and regulations.
Assumptions, which have been chosen to represent the estimate of a particular event as required by GAAP, have been reviewed and approved by Management based on recommendations from its actuaries. The range of potential contributions to the Continuing Plan is determined annually by the Continuing Plan’s actuary in accordance with applicable IRS rules and regulations.
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).
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 49 tax credits).
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 64 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.
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.
Trustmark's current quantitative methodologies do not completely incorporate changes in credit quality. As a result, Trustmark utilizes the performance trends factor. This factor is based on migration analyses, that allocates additional ACL to non-pass/delinquent loans within each 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.
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 65 income in bank card and other fees.
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.
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 TNB. 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.
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 TNB. Trustmark economically hedges interest rate swap transactions executed 67 with commercial lending clients by entering into offsetting interest rate swap transactions with institutional derivatives market participants.
The decrease in noninterest income for the General Banking Segment during 2023 was primarily due to the decreases in bank card and other fees and mortgage banking, net, partially offset by increases in service charges on deposit accounts and other income, net.
The decrease in noninterest income (loss) for the General Banking Segment during 2023 was primarily due to the decreases in bank card and other fees and mortgage banking, net, partially offset by increases in service charges on deposit accounts and other, net.
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.
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. 66 Derivatives Trustmark uses financial derivatives for management of interest rate risk.
The increase in net interest income for the Wealth Management Segment during 2023 and 2022 was principally due to an increase in interest and fees on loans partially offset by an increase in interest on deposits generated by the Private Banking Group.
The increase in net interest income for the Wealth Management Segment during 2023 was principally due to an increase in interest and fees on loans partially offset by an increase in interest on deposits generated by the Private Banking Group.
Trustmark has elected the five-year phase-in transition period (through December 31, 2024) related to adopting FASB ASU 2016-13 for regulatory capital purposes.
Trustmark elected the five-year phase-in transition period (through December 31, 2024) related to adopting FASB ASU 2016-13 for regulatory capital purposes.
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 TNB and limit Trustmark’s and TNB’s ability to pay dividends. At December 31, 2023, Trustmark and TNB exceeded all applicable minimum capital standards.
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 TNB and limit Trustmark’s and TNB’s ability to pay dividends. At December 31, 2024, Trustmark and TNB exceeded all applicable minimum capital standards.
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 ACL and PCL for LHFI.
In future periods, evaluations of the overall LHFI portfolio, in light of the factors and forecasts then prevailing, 37 may result in significant changes in the ACL and PCL for LHFI.
Trustmark intends to continue to utilize $60.0 million in trust preferred securities issued by the Trust as Tier 1 capital up to the regulatory limit, as permitted by the grandfather provision in the Dodd-Frank Act and the Basel III Final Rule. Refer to the section captioned “Regulatory Capital” included in Note 17 – Shareholders’ Equity in Part II.
Trustmark intends to continue to utilize $60.0 million in trust preferred securities issued by the Trust as Tier 1 capital up to the regulatory limit, as permitted by the grandfather provision in the Dodd-Frank Act and the Basel III Final Rule. Refer to the section captioned “Regulatory Capital” included in Note 18 – Shareholders’ Equity in Part II.
Supplemental Retirement Plans As disclosed in Note 14 – Defined Benefit and Other Postretirement Benefits included in Part II. Item 8. – Financial Statements and Supplementary Data of this report, Trustmark maintains a nonqualified supplemental retirement plan covering key executive officers and senior officers as well as directors who have elected to defer fees.
Supplemental Retirement Plans As disclosed in Note 15 – Defined Benefit and Other Postretirement Benefits included in Part II. Item 8. – Financial Statements and Supplementary Data of this report, Trustmark maintains a nonqualified supplemental retirement plan covering key executive officers and senior officers as well as directors who have elected to defer fees.
Item 8. – Financial Statements and Supplementary Data of this report for an illustration of Trustmark’s and TNB’s actual regulatory capital amounts and ratios under regulatory capital standards in effect at December 31, 2023 and 2022. Dividends on Common Stock Dividends per common share for each of the years ended December 31, 2023, 2022 and 2021 were $0.92.
Item 8. – Financial Statements and Supplementary Data of this report for an illustration of Trustmark’s and TNB’s actual regulatory capital amounts and ratios under regulatory capital standards in effect at December 31, 2024 and 2023. Dividends on Common Stock Dividends per common share for each of the years ended December 31, 2024, 2023 and 2022 were $0.92.
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 37 to be significant. Therefore, estimating prepayment speeds and/or discount rates within ranges that market participants would use in determining the fair value of the MSR requires significant management judgment.
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 38 to be significant. Therefore, estimating prepayment speeds and/or discount rates within ranges that market participants would use in determining the fair value of the MSR requires significant management judgment.
Changes of equal magnitude in the opposite direction would produce similar increases in fair value in the respective amounts. See the section captioned “MSR” in Note 6 – Mortgage Banking included in Part II. Item 8. – Financial Statements and Supplementary Data of this report for additional information regarding the valuation of the MSR.
Changes of equal magnitude in the opposite direction would produce similar increases in fair value in the respective amounts. See the section captioned “MSR” in Note 7 – Mortgage Banking included in Part II. Item 8. – Financial Statements and Supplementary Data of this report for additional information regarding the valuation of the MSR.
For 2023, 2022 and 2021, the process used to select the discount rate assumption under FASB ASC Topic 715, "Compensation-Retirement Benefits," takes into account the benefit cash flow and the segmented yields on high-quality corporate bonds that would be available to provide for the payment of the benefit cash flow.
For 2024, 2023 and 2022, the process used to select the discount rate assumption under FASB ASC Topic 715, "Compensation-Retirement Benefits," takes into account the benefit cash flow and the segmented yields on high-quality corporate bonds that would be available to provide for the payment of the benefit cash flow.
The subordinated notes mature December 1, 2030 and are redeemable at Trustmark’s option under certain circumstances. For regulatory capital purposes, the subordinated notes qualified as Tier 2 capital for Trustmark at December 31, 2023 and 2022. Trustmark may utilize the full carrying value of the subordinated notes as Tier 2 capital until December 1, 2025 (five years prior to maturity).
The subordinated notes mature December 1, 2030 and are redeemable at Trustmark’s option under certain circumstances. For regulatory capital purposes, the subordinated notes qualified as Tier 2 capital for Trustmark at December 31, 2024 and 2023. Trustmark may utilize the full carrying value of the subordinated notes as Tier 2 capital until December 1, 2025 (five years prior to maturity).
Beginning December 1, 2025, the subordinated 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 December 31, 2023 and 2022.
Beginning December 1, 2025, the subordinated 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 December 31, 2024 and 2023.
For a complete description of Trustmark’s ACL methodology for off-balance sheet credit exposures, please see the section captioned “Lending Related” in Note 16 – Commitments and Contingencies included in Part II. Item 8. – Financial Statements and Supplementary Data of this report.
For a complete description of Trustmark’s ACL methodology for off-balance sheet credit exposures, please see the section captioned “Lending Related” in Note 17 – Commitments and Contingencies included in Part II. Item 8. – Financial Statements and Supplementary Data of this report.
If Trustmark had breached any of these triggering provisions at December 31, 2023, it could have been required to settle its obligations under the agreements at the termination value (which is expected to approximate fair market value).
If Trustmark had breached any of these triggering provisions at December 31, 2024, it could have been required to settle its obligations under the agreements at the termination value (which is expected to approximate fair market value).
Item 8. – Financial Statements and Supplementary Data of this report. Discussion and analysis of Trustmark’s financial condition and results of operations for the years ended December 31, 2022 and 2021 are included in the respective sections within Part II.
Item 8. – Financial Statements and Supplementary Data of this report. Discussion and analysis of Trustmark’s financial condition and results of operations for the years ended December 31, 2023 and 2022 are included in the respective sections within Part II.
Off-Balance Sheet Arrangements Information required in this section is set forth under the heading “Lending Related” of Note 16 – Commitments and Contingencies in Part II. Item 8. – Financial Statements and Supplementary Data of this report.
Off-Balance Sheet Arrangements Information required in this section is set forth under the heading “Lending Related” of Note 17 – Commitments and Contingencies in Part II. Item 8. – Financial Statements and Supplementary Data of this report.
A description of each segment and the methodologies used to measure financial performance and financial information by reportable segment are included in Note 20 – Segment Information located in Part II. Item 8. – Financial Statements and Supplementary Data of this report.
A description of each segment and the methodologies used to measure financial performance and financial information by reportable segment are included in Note 21 – Segment Information located in Part II. Item 8. – Financial Statements and Supplementary Data of this report.
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 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.
Due to multiple 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.
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 aggregate fair values of these risk participation agreements were immaterial at December 31, 2023 and 2022. Trustmark’s participation in the derivatives markets is subject to increased federal regulation of these markets.
The aggregate fair values of these risk participation agreements were immaterial at December 31, 2024 and 2023. Trustmark’s participation in the derivatives markets is subject to increased federal regulation of these markets.
Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations of Trustmark’s Annual Report filed on Form 10-K for the year ended December 31, 2022.
Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations of Trustmark’s Annual Report filed on Form 10-K for the year ended December 31, 2023.
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) and credit cards.
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.
Securities The securities portfolio is utilized by Management to manage interest rate risk, generate interest income, provide liquidity and use as collateral for public 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 at December 31, 2023 and 2022 was 4.5 and 4.9 years, respectively.
Securities The securities portfolio is utilized by Management to manage interest rate risk, generate interest income, provide liquidity and use as collateral for public 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 at December 31, 2024 and 2023 was 4.8 and 4.5 years, respectively.
There are no significant conditions or events that have occurred since December 31, 2023, which Management believes have affected Trustmark’s or TNB’s present classification. In 2020, Trustmark enhanced its capital structure with the issuance of $125.0 million of subordinated notes. At December 31, 2023 and 2022, the carrying amount of the subordinated notes was $123.5 million and $123.3 million, respectively.
There are no significant conditions or events that have occurred since December 31, 2024, which Management believes have affected Trustmark’s or TNB’s present classification. In 2020, Trustmark enhanced its capital structure with the issuance of $125.0 million of subordinated notes. At December 31, 2024 and 2023, the carrying amount of the subordinated notes was $123.7 million and $123.5 million, respectively.
At December 31, 2023, unrecognized actuarial losses and unrecognized prior service costs continue to be amortized over future service periods. Legal Environment Information required in this section is set forth under the heading “Legal Proceedings” of Note 16 – Commitments and Contingencies in Part II. Item 8. – Financial Statements and Supplementary Data of this report.
At December 31, 2024, unrecognized actuarial losses and unrecognized prior service costs continue to be amortized over future service periods. Legal Environment Information required in this section is set forth under the heading “Legal Proceedings” of Note 17 – Commitments and Contingencies in Part II. Item 8. – Financial Statements and Supplementary Data of this report.
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 December 31, 2023, Trustmark had interest rate swaps with an aggregate notional amount of $1.500 billion related to this program, compared to $1.391 billion at December 31, 2022.
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 December 31, 2024, Trustmark had interest rate swaps with an aggregate notional amount of $1.819 billion related to this program, compared to $1.500 billion at December 31, 2023.
For additional analysis of other real estate and foreclosure expenses, please see the section captioned “Nonperforming Assets.” Results of Segment Operations Trustmark’s operations are managed along three operating segments: General Banking, Wealth Management and Insurance.
For additional analysis of other real estate and foreclosure expenses, please see the section captioned “Nonperforming Assets.” Results of Segment Operations Trustmark’s operations are managed along two operating segments: General Banking and Wealth Management.
For the plan year ending December 31, 2024, Trustmark’s minimum required contribution to the Continuing Plan is expected to be $128 thousand; however, Management and the Board of Directors of Trustmark will monitor the Continuing Plan throughout 2024 to determine any additional funding requirements by the plan’s measurement date.
For the plan year ending December 31, 2025, Trustmark’s minimum required contribution to the Continuing Plan is expected to be $109 thousand; however, Management and the Board of Directors of Trustmark will monitor the Continuing Plan throughout 2025 to determine any additional funding requirements by the plan’s measurement date.
The PCL, LHFI for the fourth quarter of 2023 primarily reflected an increase in required reserves as a result of net adjustments to the qualitative reserve factors, loan growth and changes in the macroeconomic forecasts, partially offset by a decline in specific reserves for individually analyzed LHFI.
The PCL, LHFI for the fourth quarter of 2024 primarily reflected an increase in required reserves as a result of net adjustments to the qualitative reserve factors and changes to the macroeconomic forecasts, partially offset by a decline in specific reserves for individually analyzed LHFI.
Noninterest income for the Wealth Management Segment, which includes income related to investment management, trust and brokerage services, decreased $136 thousand, or 0.4%, during 2023, principally due to declines in income from brokerage services and other miscellaneous income partially offset by increases in income from trust management and annuity services and indirect income allocated to the Wealth Management Segment.
Noninterest income for the Wealth Management Segment decreased $136 thousand, or 0.4%, during 2023, principally due to declines in income from brokerage services and other miscellaneous income partially offset by increases in income from trust management and annuity services and indirect income allocated to the Wealth Management Segment.
These include payments related to (i) short-term and long-term borrowings (Note 11 – Borrowings), (ii) operating and finance leases (Note 9 – Leases), (iii) time deposits with stated maturity dates (Note 10 – Deposits) and (iv) commitments to extend credit and standby letters of credit (Note 16 – Commitments and Contingencies).
These include payments related to (i) short-term and long-term borrowings (Note 12 – Borrowings), (ii) operating and finance leases (Note 10 – Leases), (iii) time deposits with stated maturity dates (Note 11 – Deposits) and (iv) commitments to extend credit and standby letters of credit (Note 17 – Commitments and Contingencies).
Trustmark had a significant number of loans, derivative contracts, borrowings and other financial instruments with attributes that were either directly or indirectly dependent on LIBOR. As December 31, 2023, all of Trustmark’s LIBOR exposure was remediated or in the process of being remediated. The transition from LIBOR could create costs and additional risk.
Trustmark had a significant number of loans, derivative contracts, borrowings and other financial instruments with attributes that were either directly or indirectly dependent on LIBOR. As December 31, 2024, all of Trustmark’s LIBOR exposure was remediated. The transition from LIBOR could create costs and additional risk.
The total notional amount of these derivative instruments was $285.0 million at December 31, 2023 compared to $277.0 million at December 31, 2022. 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 total notional amount of these derivative instruments was $311.5 million at December 31, 2024 compared to $285.0 million at December 31, 2023. 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 actual amount of any dividends declared in 2024 by Trustmark will be determined by Trustmark’s Board of Directors. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable of March 15, 2024, to shareholders of record on March 1, 2024.
The actual amount of any dividends declared in 2025 by Trustmark will be determined by Trustmark’s Board of Directors. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.24 per share payable of March 15, 2025, to shareholders of record on March 1, 2025.
In addition, at December 31, 2023, Trustmark had no short-term and $58 thousand in long-term FHLB advances outstanding with the FHLB of Atlanta, which were acquired in the BancTrust merger, compared to no short-term and $78 thousand in long-term FHLB advances outstanding at December 31, 2022.
In addition, at December 31, 2024, Trustmark had no short-term and no long-term FHLB advances outstanding with the FHLB of Atlanta, compared to no short-term and $58 thousand in long-term FHLB advances outstanding at December 31, 2023, which were acquired in the BancTrust merger in 2013.
Benefit Plans Defined Benefit Plans As disclosed in Note 14 – Defined Benefit and Other Postretirement Benefits included in Part II.
Benefit Plans Defined Benefit Plans As disclosed in Note 15 – Defined Benefit and Other Postretirement Benefits included in Part II.
At December 31, 2023, the accrued benefit obligation for the supplemental retirement plans equaled $41.6 million, while the net periodic benefit cost equaled $2.5 million in 2023, $2.4 million in 2022 and $2.5 million in 2021. The net periodic benefit cost and projected benefit obligation are determined using actuarial assumptions as of the plans’ measurement date.
At December 31, 2024, the accrued benefit obligation for the supplemental retirement plans equaled $38.2 million, while the net periodic benefit cost equaled $2.4 million in 2024, $2.5 million in 2023 and $2.4 million in 2022. The net periodic benefit cost and projected benefit obligation are determined using actuarial assumptions as of the plans’ measurement date.
At December 31, 2023, 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 was $1.4 million compared to none at December 31, 2022.
At December 31, 2024, 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 was $568 thousand compared to $1.4 million at December 31, 2023.
Approval by TNB’s regulators is required if the total of all dividends declared in any calendar year exceeds the total of its net income for that year combined with its retained net income of the preceding two years. In 2024, TNB will have available approximately $95.1 million plus its net income for that year to pay as dividends to Trustmark.
Approval by TNB’s regulators is required if the total of all dividends declared in any calendar year exceeds the total of its net income for that year combined with its retained net income of the preceding two years. In 2025, TNB will have available approximately $255.3 million plus its net income for that year to pay as dividends to Trustmark.
Trustmark uses such derivatives to hedge the variable cash flows associated with existing and anticipated variable-rate loan assets. At December 31, 2023, the aggregate notional value of Trustmark's interest rate swaps and floor spreads designated as cash flow hedges totaled $1.125 billion compared to $825.0 million at December 31, 2022.
Trustmark uses such derivatives to hedge the variable cash flows associated with existing and anticipated variable-rate loan assets. At December 31, 2024, the aggregate notional value of Trustmark's interest rate swaps and floor spreads designated as cash flow hedges totaled $1.500 billion compared to $1.125 billion at December 31, 2023.
The earnings recognition of excluded components totaled $57 thousand of amortization expense for the year ended December 31, 2023, and is included in interest and fees on LHFS and LHFI.
The earnings recognition of excluded components totaled $474 thousand of amortization expense for the year ended December 31, 2024, compared to $57 thousand of amortization expense for the year ended December 31, 2023, and is included in interest and fees on LHFS and LHFI.
Trustmark has non-member status and thus no additional borrowing capacity with the FHLB of Atlanta. Additionally, Trustmark has the ability to leverage its unencumbered investment securities as collateral. At December 31, 2023, Trustmark had approximately $842.0 million available in unencumbered Treasury and agency securities compared to $797.0 million at December 31, 2022. Another borrowing source is the Discount Window.
Trustmark had non-member status and thus no additional borrowing capacity with the FHLB of Atlanta. Additionally, Trustmark has the ability to leverage its unencumbered investment securities as collateral. At December 31, 2024, Trustmark had approximately $1.107 billion available in unencumbered Treasury and agency securities compared to $842.0 million at December 31, 2023. 65 Another borrowing source is the Discount Window.
For additional information regarding the EF leases, please see the sections captioned “Lessor Arrangements” included in Note 1 - Significant Accounting Policies and Note 9 – Leases of Part II. Item 8. – Financial Statements and Supplementary Data of this report.
For additional information regarding the equipment finance leases, please see the sections captioned “Lessor Arrangements” included in Note 1 - Significant Accounting Policies and Note 10 – Leases of Part II. Item 8. – Financial Statements and Supplementary Data of this report.
At December 31, 2023, the net unamortized, unrealized loss on all transferred securities included in accumulated other comprehensive income (loss) (AOCI) in the accompanying consolidated balance sheets totaled $57.6 million compared to $69.2 million at December 31, 2022.
At December 31, 2024, the net unamortized, unrealized loss on all transferred securities included in accumulated other comprehensive income (loss) (AOCI) in the accompanying consolidated balance sheets totaled $46.6 million compared to $57.6 million at December 31, 2023.
For a complete description of Trustmark’s ACL methodology and the quantitative and qualitative factors included in the calculation, please see Note 4 – LHFI and Allowance for Credit Losses, LHFI included in Part II. Item 8. – Financial Statements and Supplementary Data of this report.
For a complete description of Trustmark’s ACL methodology and the quantitative and qualitative factors included in the calculation, please see Note 5 – LHFI and ACL, LHFI included in Part II. Item 8. – Financial Statements and Supplementary Data of this report.
At December 31, 2023, Trustmark had $370.0 million of upstream federal funds purchased compared to $383.0 million of upstream federal funds purchased at December 31, 2022. Trustmark maintains adequate federal funds lines to provide sufficient short-term liquidity.
At December 31, 2024, Trustmark had $285.0 million of upstream federal funds purchased compared to $370.0 million of upstream federal funds purchased at December 31, 2023. Trustmark maintains adequate federal funds lines to provide sufficient short-term liquidity.
Under the existing borrowing agreement, Trustmark had sufficient qualifying collateral to increase FHLB advances with the FHLB of Dallas by $4.003 billion at December 31, 2023.
Under the existing borrowing agreement, Trustmark had sufficient qualifying collateral to increase FHLB advances with the FHLB of Dallas by $4.292 billion at December 31, 2024.
In addition, Trustmark and TNB met 61 applicable regulatory guidelines to be considered well-capitalized at December 31, 2023.
In addition, Trustmark and TNB met applicable regulatory guidelines to be considered well-capitalized at December 31, 2024.
The impact of this strategy resulted in a net negative ineffectiveness of $6.3 million for the year ended December 31, 2023, compared to a net negative ineffectiveness of $4.1 million for the year ended December 31, 2022 and a net positive ineffectiveness of $2.5 million for the year ended December 31, 2021.
The impact of this strategy resulted in a net negative ineffectiveness of $9.2 million for the year ended December 31, 2024, compared to a net negative ineffectiveness of $6.3 million for the year ended December 31, 2023 and a net negative ineffectiveness of $4.1 million for the year ended December 31, 2022.
The PCL for the Wealth Management Segment for 2023 totaled a negative $2.1 million compared to a negative PCL of $21 thousand during 2022 and a negative PCL of $9 thousand during 2021.
The PCL for the Wealth Management Segment for 2024 totaled $154 thousand compared to a negative PCL of $2.1 million during 2023 and a negative PCL of $21 thousand during 2022.
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 December 31, 2023, available for sale securities totaled $1.763 billion, which represented 55.3% of the securities portfolio, compared to $2.024 billion, or 57.5%, at December 31, 2022.
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 December 31, 2024, available for sale securities totaled $1.693 billion, which represented 55.9% of the securities portfolio, compared to $1.763 billion, or 55.3%, at December 31, 2023.
Trustmark’s dividend payout ratio for 2023, 2022 and 2021 was 33.95%, 78.63%, and 39.15%, respectively. The increase in the dividend payout ratio for 2022 was principally due to the $100.8 million of litigation settlement expense recorded during the fourth quarter of 2022.
Trustmark’s dividend payout ratio for 2024, 2023 and 2022 was 25.21%, 33.95%, and 78.63%, respectively. The increase in the dividend payout ratio for 2022 was principally due to the $100.8 million of litigation settlement expense recorded during the fourth quarter of 2022.
At December 31, 2023, the MSR fair value was $131.9 million. The impact on the MSR fair value of either a 10% adverse change in prepayment speeds or a 100 basis point increase in discount rates at December 31, 2023, would be a decline in fair value of approximately $4.8 million and $5.4 million, respectively.
At December 31, 2024, the MSR fair value was $139.3 million. The impact on the MSR fair value of either a 10% adverse change in prepayment speeds or a 100 basis point increase in discount rates at December 31, 2024, would be a decline in fair value of approximately $4.9 million and $5.6 million, respectively.
The following table provides information regarding Trustmark’s home equity loans and home equity lines of credit which are included in the LHFI secured by 1-4 family residential properties at December 31, 2023 and 2022 ($ in thousands): December 31, 2023 2022 Home equity loans $ 58,176 $ 45,532 Home equity lines of credit 430,933 412,013 Percentage of loans and lines for which Trustmark holds first lien 47.8 % 51.7 % Percentage of loans and lines for which Trustmark does not hold first lien 52.2 % 48.3 % Due to the increased risk associated with second liens, loan terms and underwriting guidelines differ from those used for products secured by first liens.
The following table provides information regarding Trustmark’s home equity loans and home equity lines of credit which are included in the LHFI secured by 1-4 family residential properties at December 31, 2024 and 2023 ($ in thousands): December 31, 2024 2023 Home equity loans $ 72,183 $ 58,176 Home equity lines of credit 458,327 430,933 Percentage of loans and lines for which Trustmark holds first lien 46.7 % 47.8 % Percentage of loans and lines for which Trustmark does not hold first lien 53.3 % 52.2 % Due to the increased risk associated with second liens, loan terms and underwriting guidelines differ from those used for products secured by first liens.
For more information on these net interest income items, please see the sections captioned “Financial Highlights” and “Results of Operations.” 46 Noninterest income for the General Banking Segment decreased $2.9 million, or 2.5%, during 2023 compared to a decrease of $21.5 million, or 15.6%, during 2022.
For more information on these net interest income items, please see the sections captioned “Financial Highlights” and “Results of Operations.” Noninterest income (loss) for the General Banking Segment decreased $174.2 million during 2024 compared to a decrease of $2.9 million, or 2.5%, during 2023.
For the years ended December 31, 2023 and 2022, Trustmark reclassified a loss, net of tax, of $12.3 million and $345 thousand, respectively, into interest and fees on LHFS and LHFI. During the next twelve months, Trustmark estimates that $13.2 million will be reclassified as a reduction to interest and fees on LHFS and LHFI.
For the years ended December 31, 2024 and 2023, Trustmark reclassified a loss, net of tax, of $13.6 million and $12.3 million, respectively, into interest and fees on LHFS and LHFI. During the next twelve months, Trustmark estimates that $8.1 million will be reclassified as a reduction to interest and fees on LHFS and LHFI.
The gross notional amount of Trustmark’s off-balance sheet obligations under these derivative instruments totaled $171.4 million at December 31, 2023, with a negative valuation adjustment of $150 thousand, compared to $165.4 million, with a positive valuation adjustment of $325 thousand at December 31, 2022.
The gross notional amount of Trustmark’s off-balance sheet obligations under these derivative instruments totaled $162.1 million at December 31, 2024, with a positive valuation adjustment of $908 thousand, compared to $171.4 million, with a negative valuation adjustment of $150 thousand at December 31, 2023.
Mortgage banking, net totaled $5.5 million for the fourth quarter of 2023, an increase of $2.1 million, or 61.9%, when compared to the same time period in 2022, principally due to a decline in the net negative hedge ineffectiveness and an increase in the gain on sales of loans, net.
Mortgage banking, net totaled $7.4 million for the fourth quarter of 2024, an increase of $1.9 million, or 33.9%, when compared to the same time period in 2023, principally due to a decline in the net negative hedge ineffectiveness and an increase in the gain on sales of loans, net.
Excluding other construction loan reclassifications, the NFNR LHFI portfolio decreased $286.0 million, or 8.7%, during 2023 primarily due to declines in nonowner-occupied loans in the Mississippi, Alabama, Florida and Tennessee market regions as well as declines in owner-occupied loans in the Texas and Alabama market regions, which were partially offset by growth in owner-occupied loans in the Mississippi market region and nonowner-occupied loans in the Texas market region.
Excluding other construction loan reclassifications, the NFNR LHFI portfolio decreased $433.4 million, or 12.4%, during 2024 primarily due to declines in nonowner-occupied loans in the Mississippi, Alabama, Texas and Florida market regions as well as declines in owner-occupied loans in the Florida, Tennessee and Texas market regions, which were partially offset by growth in owner-occupied loans in the Alabama market region.
At December 31, 2023 and 2022, Trustmark had posted collateral of $2.0 million and $740 thousand, respectively, against its obligations because of negotiated thresholds and minimum transfer amounts under these agreements.
At December 31, 2024 and 2023, Trustmark had posted collateral of $1.5 million and $2.0 million, respectively, against its obligations because of negotiated thresholds and minimum transfer amounts under these agreements.
At December 31, 2023 and 2022, $35.7 million and $66.3 million, respectively, represented customer related transactions, such as commercial sweep repurchase balances. Trustmark had $370.0 million of upstream federal funds purchased at December 31, 2023, compared to $383.0 million at December 31, 2022.
At December 31, 2024 and 2023, $39.0 million and $35.7 million, respectively, represented customer related transactions, such as commercial sweep repurchase balances. Trustmark had $285.0 million of upstream federal funds purchased at December 31, 2024, compared to $370.0 million at December 31, 2023.
The PCL, off-balance sheet credit exposures totaled a negative $2.8 million for 2023 compared to $1.2 million for 2022, a decrease of $4.0 million.
The PCL, off-balance sheet credit exposures totaled a negative $4.7 million for 2024, compared to a negative PCL, off-balance sheet credit exposures of $2.8 million for 2023 and a PCL, off-balance sheet credit exposures of $1.2 million for 2022.
The increase in LHFI during 2023 was primarily due to net growth in LHFI secured by real estate, commercial and industrial LHFI and other commercial LHFI and leases partially offset by a decline in state and other political subdivision LHFI.
The increase in LHFI during 2024 was primarily due to net growth in LHFI secured by real estate and other commercial loans and leases partially offset by net declines in commercial and industrial LHFI and state and other political subdivision LHFI.
At December 31, 2022, LHFS totaled $135.2 million, consisting of $64.4 million of residential real estate mortgage loans in the process of being sold to third parties and $70.8 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.
At December 31, 2023, LHFS totaled $184.8 million, consisting of $106.0 million of residential real estate mortgage loans in the process of being sold to third parties and $78.8 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.
In addition to the unfunded balances, Trustmark uses a funding rate for loan pools that are considered open-ended. In order to mitigate volatility and incorporate historical experience in the funding rate, Trustmark uses a twelve-quarter moving average. For the closed-ended loan pools, Trustmark takes a conservative approach and uses a 100% funding rate.
In order to mitigate volatility and incorporate historical experience in the funding rate, Trustmark uses a twelve-quarter moving average. For the closed-ended loan pools, Trustmark takes a conservative approach and uses a 100% funding rate.
The PCL, off-balance sheet credit exposures totaled a negative $2.8 million for 2023 compared to $1.2 million for 2022, and a negative $2.9 million for 2021.
The PCL, off-balance sheet credit exposures totaled a negative $4.7 million for 2024 compared to a negative $2.8 million for 2023, and $1.2 million for 2022.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+0 added−1 removed12 unchanged
Biggest changeBased 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 December 31, 2023 and 2022.
Biggest changeIn 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. 68 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 December 31, 2024 and 2023.
The estimates provided do not include the effects of possible strategic changes in the balances of various assets and liabilities throughout 2024 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.
The estimates provided do not include the effects of possible strategic changes in the balances of various assets and liabilities throughout 2025 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.
The following table summarizes the effect that various interest rate shifts would have on net portfolio value at December 31, 2023 and 2022.
The following table summarizes the effect that various interest rate shifts would have on net portfolio value at December 31, 2024 and 2023.
Estimated % Change in Net Portfolio Value Change in Interest Rates 2023 2022 +200 basis points -2.3 % -1.6 % +100 basis points -0.9 % -0.6 % 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.
Estimated % Change in Net Portfolio Value Change in Interest Rates 2024 2023 +200 basis points -1.3 % -2.3 % +100 basis points -0.4 % -0.9 % 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 impact on the MSR fair value of a 10% adverse change in prepayment speeds or a 100-basis point increase in discount rates at December 31, 2023 would be a decline in fair value of approximately $4.8 million and $5.4 million, respectively, compared to a decline in fair value of approximately $4.5 million and $5.4 million, respectively, at December 31, 2022.
The impact on the MSR fair value of a 10% adverse change in prepayment speeds or a 100-basis point increase in discount rates at December 31, 2024 would be a decline in fair value of approximately $4.9 million and $5.6 million, respectively, compared to a decline in fair value of approximately $4.8 million and $5.4 million, respectively, at December 31, 2023.
Changes of equal magnitude in the opposite direction would produce similar increases in fair value in the respective amounts. 67
Changes of equal magnitude in the opposite direction would produce similar increases in fair value in the respective amounts. 69
Estimated % Change in Net Interest Income Change in Interest Rates 2023 2022 +200 basis points 0.5 % 3.3 % +100 basis points 0.3 % 1.7 % -100 basis points -0.4 % -1.8 % -200 basis points -1.0 % — Management cannot provide any assurance about the actual effect of changes in interest rates on net interest income.
Estimated % Change in Net Interest Income Change in Interest Rates 2024 2023 +200 basis points 0.8 % 0.5 % +100 basis points 0.4 % 0.3 % -100 basis points -1.2 % -0.4 % -200 basis points -3.0 % -1.0 % Management cannot provide any assurance about the actual effect of changes in interest rates on net interest income.
At December 31, 2023, the MSR fair value was $131.9 million, compared to $129.7 million at December 31, 2022.
At December 31, 2024, the MSR fair value was $139.3 million, compared to $131.9 million at December 31, 2023.
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.
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.
Removed
Given the 66 substantial increase in market rates, the down 200 basis points scenario has been added to the table below for the year ended December 31, 2023.

Other TRMK 10-K year-over-year comparisons