TRUSTMARK CORP

Previous wording

The following provides a narrative discussion and analysis of Trustmark’s financial condition and results of operations. This discussion should be read in conjunction with the consolidated financial statements and the supplemental financial data included in 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. 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.

Current wording

The following provides a narrative discussion and analysis of Trustmark’s financial condition and results of operations. This discussion should be read in conjunction with the consolidated financial statements and the supplemental financial data included in Part II. Item 8. – Financial Statements and Supplementary Data of this report. Further discussion and analysis of Trustmark’s financial condition and results of operations for the years ended December 31, 2024 and 2023 are included in the respective sections within Part II. 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, 2024.

Previous wording

Trustmark has been committed to meeting the banking and financial needs of its customers and communities for over 130 years and remains focused on providing support, advice and solutions to its customers' unique needs. Trustmark completed the following significant non-routine transactions during the second quarter of 2024:

Current wording

Trustmark has been committed to meeting the banking and financial needs of its customers and communities for over 130 years and remains focused on providing support, advice and solutions to its customers' unique needs. Trustmark achieved record earnings in 2025, reflecting significant achievement across its diverse financial services businesses. During 2025, Trustmark's traditional banking business drove continued loan and deposit growth, a strong net interest margin and solid credit quality. Trustmark's mortgage banking business increased production and achieved significant improvement in profitability during 2025, while revenue from its wealth management business reached an all-time high.

Previous wording

These accomplishments are the result of focused efforts to enhance Trustmark's long-term performance and competitiveness. Trustmark continues to implement technology and streamline processes to enhance its ability to grow and serve customers. Trustmark is well-positioned to compete in changing economic conditions and create long-term value for its shareholders. The Board of Directors of Trustmark announced a 4.3% increase in its regular quarterly cash dividend to $0.24 per share from $0.23 per share. The dividend is payable March 15, 2025, to shareholders of record on March 1, 2025.

Current wording

These accomplishments are the result of focused efforts to enhance Trustmark's long-term performance and competitiveness. Trustmark continues to implement technology and streamline processes to enhance its ability to grow and serve customers. Trustmark is well-positioned to compete in changing economic conditions and create long-term value for its shareholders. The Board of Directors of Trustmark announced a 4.2% increase in its regular quarterly cash dividend to $0.25 per share from $0.24 per share, reflecting Trustmark's profitability and financial strength. The dividend is payable March 15, 2026, to shareholders of record on March 1, 2026. Trustmark’s payment of the dividend will be funded fully by a dividend from TB to Trustmark, which the MDBCF approved on January 28, 2026.

Previous wording

Trustmark reported net income of $56.3 million, or basic and diluted EPS of $0.92, for the fourth quarter of 2024, compared to a net income of $36.1 million, or basic and diluted EPS of $0.59, in the fourth quarter of 2023. Trustmark’s reported performance during the quarter ended December 31, 2024, produced a return on average tangible equity of 13.68%, a return on average assets of 1.23%, an average equity to average assets ratio of 10.82% and a dividend payout ratio of 25.00%, compared to a return on average tangible equity of 11.92%, a return on average assets of 0.77%, an average equity to average assets ratio of 8.51% and a dividend payout ratio of 38.98% during the quarter ended December 31, 2023.

Current wording

Trustmark reported net income of $57.9 million, or basic and diluted EPS of $0.97, for the fourth quarter of 2025, compared to net income of $56.3 million, or basic and diluted EPS of $0.92, for the fourth quarter of 2024. Trustmark’s reported performance during the quarter ended December 31, 2025, produced a return on average tangible equity of 12.82%, a return on average assets of 1.23%, an average equity to average assets ratio of 11.35% and a dividend payout ratio of 24.74%, compared to a return on average tangible equity of 13.68%, a return on average assets of 1.23%, an average equity to average assets ratio of 10.82% and a dividend payout ratio of 25.00% during the quarter ended December 31, 2024.

Previous wording

The increase in net income when the fourth quarter of 2024 is compared to the fourth quarter of 2023 was principally due to an increase in revenue. Revenue, which is defined as net interest income plus noninterest income (loss), totaled $196.8 million for the quarter ended December 31, 2024 compared to $173.3 million for the quarter ended December 31, 2023, an increase of $23.5 million, or 13.5%. The increase in total revenue for the fourth quarter of 2024 compared to the same time period in 2023 resulted from an increase in net interest income, principally due to declines in total interest expense as well as an increase in interest on securities-taxable partially offset by a decline in other interest income, and an increase in noninterest income (loss), principally due to increases in mortgage banking, net and other, net.

Current wording

The increase in net income when the fourth quarter of 2025 is compared to the fourth quarter of 2024 was principally due to an increase in revenue and a decrease in the PCL, LHFI, partially offset by increases in noninterest expense and income taxes. Revenue totaled $204.1 million for the quarter ended December 31, 2025 compared to $196.8 million for the quarter ended December 31, 2024, an increase of $7.3 million, or 3.7%. The increase in revenue for the fourth quarter of 2025 compared to the same time period in 2024 primarily resulted from an increase in net interest income, principally due to a decline in interest expense on deposits.

Previous wording

Net interest income for the fourth quarter of 2024 totaled $155.8 million, an increase of $19.1 million, or 14.0%, when compared to the fourth quarter of 2023. Interest income totaled $239.7 million for the fourth quarter of 2024, an increase of $6.9 million, or 2.9%, when compared to the same time period in 2023, principally due to an increase in interest on securities-taxable primarily due to the restructuring of the available for sale securities portfolio during the second quarter of 2024, partially offset by a decline in other interest income primarily due to declines in both the balance held at the FRBA and the rate paid by the FRBA on reserves. Interest expense totaled $83.9 million for the fourth quarter of 2024, a decrease of $12.2 million, or 12.7%, when compared to the same time period in 2023, reflecting declines in interest on deposits, interest on federal funds purchased and securities sold under repurchase agreements (repurchase agreements) and other interest expense. Interest expense on deposits totaled $75.9 million for the fourth quarter of 2024, a decline of $4.9 million, or 6.1%, when compared to the fourth quarter of 2023 primarily due to declines in interest expense on all categories of interest checking accounts and money market demand deposit accounts (MMDA) as well as a decline in interest expense on brokered certificates of deposits (CDs), partially offset by an increase in interest expense on personal CDs. Interest expense on federal funds purchased and repurchase agreements totaled $4.0 million for the fourth quarter of 2024, a decrease of $1.3 million, or 24.5%, when compared to the fourth quarter of 2023 primarily due to a decline in interest expense on federal funds purchased, reflecting a decline in the amount of upstream federal funds purchased and declines by the FRB in the target federal funds rate. Other interest expense totaled $3.9 million for the fourth quarter of 2024, a decrease of $6.0 million, or 60.6%, when compared to the same time period in 2023 primarily due to a decline in interest expense on FHLB advances as a result of a decline in the amount of outstanding short-term FHLB advances with the FHLB of Dallas.

Current wording

Net interest income for the fourth quarter of 2025 totaled $162.9 million, an increase of $7.0 million, or 4.5%, when compared to the fourth quarter of 2024. Interest income totaled $239.3 million for the fourth quarter of 2025, a decrease of $417 thousand, or 0.2%, when compared to the same time period in 2024, principally due to a decline in other interest income primarily due to a decline in the average balance held at the FRBA and the FRB's decision to lower the rate it pays on reserves, partially offset by a slight increase in interest and fees on LHFS and LHFI. Interest expense totaled $76.4 million for the fourth quarter of 2025, a decrease of $7.5 million, or 8.9%, when compared to the same time period in 2024, primarily due to a decline in interest on deposits. Interest expense on deposits totaled $67.7 million for the fourth quarter of 2025, a decline of $8.2 million, or 10.9%, when compared to the fourth quarter of 2024 primarily due to declines in interest expense on brokered and personal certificates of deposit (CDs), all categories of money market demand deposit accounts (MMDA) and commercial interest checking accounts, primarily reflecting a decline in interest rates.

Previous wording

Trustmark’s PCL, LHFI for the three months ended December 31, 2024 totaled $7.0 million compared to $7.6 million for the three months ended December 31, 2023, a decrease of $625 thousand, or 8.2%. 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. The PCL, off-balance sheet credit exposures totaled $502 thousand for the three months ended December 31, 2024 compared to a negative $888 thousand for the three months ended December 31, 2023, an increase of $1.4 million. The PCL, off-balance sheet credit exposures for the fourth quarter of 2024 primarily reflected increases in required reserves as a result of credit migration and implementation of the External Factor - Credit Quality Review qualitative factor as well as an increase in unfunded commitments, partially offset by a decline in required reserves as a result of changes in the total reserve rate. Please see the section captioned “Provision for Credit Losses,” for additional information regarding the PCL on LHFI and off-balance sheet credit exposures.

Current wording

Trustmark’s PCL, LHFI for the three months ended December 31, 2025 totaled a negative $550 thousand compared to $7.0 million for the three months ended December 31, 2024, a decrease of $7.5 million, primarily due to positive credit migration partially offset by loan growth and changes in the macroeconomic forecast. The PCL, off-balance sheet credit exposures totaled $1.8 million for the three months ended December 31, 2025 compared to $502 thousand for the three months ended December 31, 2024, an increase of $1.3 million, primarily due to increases in the total reserve rate and unfunded commitments partially offset by positive credit migration. Please see the section captioned “Provision for Credit Losses,” for additional information regarding the PCL on LHFI and off-balance sheet credit exposures.

Previous wording

For the year ended December 31, 2024, Trustmark reported net income of $223.0 million, or basic and diluted EPS of $3.65 and $3.63, respectively, compared to $165.5 million, or basic and diluted EPS of $2.71 and $2.70, respectively, for the year ended December 31, 2023 and $71.9 million, or basic and diluted EPS of $1.17, for the year ended December 31, 2022. Trustmark’s reported performance for the year ended December 31, 2024, produced a return on average tangible equity of 15.20%, a return on average assets of 1.20% and a dividend payout ratio of 25.21%, compared to a return on average tangible equity of 14.04%, a return on average assets of 0.89% and a dividend payout ratio of 33.95% for the year ended December 31, 2023 and a return on average tangible equity of 6.00%, a return on average assets of 0.41% and a dividend payout ratio of 78.63% for the year ended December 31, 2022. Trustmark’s average equity to average assets ratio was 9.84%, 8.41% and 9.18% for the years ended December 31, 2024, 2023 and 2022, respectively.

Current wording

For the year ended December 31, 2025, Trustmark reported net income of $224.1 million, or basic and diluted EPS of $3.72 and $3.70, respectively, compared to $223.0 million, or basic and diluted EPS of $3.65 and $3.63, respectively, for the year ended December 31, 2024 and $165.5 million, or basic and diluted EPS of $2.71 and $2.70, respectively, for the year ended December 31, 2023. Trustmark’s reported performance for the year ended December 31, 2025, produced a return on average tangible equity of 12.97%, a return on average assets of 1.21% and a dividend payout ratio of 25.81%, compared to a return on average tangible equity of 15.20%, a return on average assets of 1.20% and a dividend payout ratio of 25.21% for the year ended December 31, 2024 and a return on average tangible equity of 14.04%, a return on average assets of 0.89% and a dividend payout ratio of 33.95% for the year ended December 31, 2023. Trustmark’s average equity to average assets ratio was 11.16%, 9.84% and 8.41% for the years ended December 31, 2025, 2024 and 2023, respectively.

Previous wording

Trustmark completed the sale of FBBI during the second quarter of 2024. As such, financial results 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. Trustmark reported net income from continuing operations of $45.2 million, $153.3 million and $60.9 million for the years ended December 31, 2024, 2023 and 2022, respectively. Trustmark's reported performance from continuing operations for the year ended December 31, 2024 produced a return on average tangible equity of 3.04%, a return on average assets of 0.24% and a dividend payout ratio of 124.32%, compared to a return on average tangible equity of 12.43%, a return on average assets of 0.82% and a dividend payout ratio of 36.65% for the year ended December 31, 2023, and a return on average tangible equity of 4.86%, a return on average assets of 0.35% and a dividend payout ratio of 92.93%, for the year ended December 31, 2022. The decrease in net income from continuing operations when 2024 is compared to 2023 was principally due to a decline in total revenue partially offset by a decrease in income taxes from continuing operations. The increase in net income from continuing operations when 2023 is compared to 2022 was principally due to an increase in total revenue and a decline in noninterest expense.

Current wording

Trustmark completed the sale of FBBI during the second quarter of 2024. As such, financial results for the years ended December 31, 2024 and 2023, 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. Trustmark reported net income from continuing operations of $45.2 million and $153.3 million for the years ended December 31, 2024 and 2023, respectively. Trustmark's reported performance from continuing operations for the year ended December 31, 2024 produced a return on average tangible equity of 3.04%, a return on average assets of 0.24% and a dividend payout ratio of 124.32%, compared to a return on average tangible equity of 12.43%, a return on average assets of 0.82% and a dividend payout ratio of 36.65% for the year ended December 31, 2023. The increase in net income from continuing operations when 2025 is compared to 2024 was principally due to an increase in revenue and a decline in PCL, LHFI, partially offset by increases in income taxes and noninterest expense.

Previous wording

Revenue totaled $561.0 million for the year ended December 31, 2024, compared to $701.3 million and $646.1 million for the years ended December 31, 2023 and 2022, respectively, a decrease of $140.3 million, or 20.0%, and an increase of $55.2 million, or 8.5%, respectively. The decrease in total revenue for 2024 compared to 2023 was principally due to decline in noninterest income (loss), primarily as a result of the loss on the sale of available for sale securities partially offset by increases in other, net and wealth management, and an increase in net interest income, primarily resulting from increases in interest and fees from LHFS and LHFI and interest on securities as well as a decline in other interest expense, partially offset by an increase in interest expense on deposits and a decrease in other interest income.

Current wording

Revenue totaled $799.8 million for the year ended December 31, 2025, compared to $561.0 million and $701.3 million for the years ended December 31, 2024 and 2023, respectively, an increase of $238.8 million, or 42.6%, and a decrease of $140.3 million, or 20.0%, respectively. The increase in revenue for 2025 compared to 2024 was principally due to (i) an increase in noninterest income (loss), primarily as a result of the loss on the sale of available for sale securities during the second quarter of 2024 and increases in mortgage banking, net and wealth management, partially offset by a decrease in other, net, and (ii) an increase in net interest income, primarily resulting from a decline in total interest expense and an increase in interest on securities, partially offset by declines in interest and fees from LHFS and LHFI and other interest income.

Previous wording

Noninterest income (loss) for 2024 totaled a negative $23.4 million, a decrease of $171.9 million when compared to 2023, principally due to the $182.8 million loss on the sale of the available for sale securities during the second quarter of 2024, partially offset by increases in other, net and wealth management. Other, net totaled $17.8 million for 2024, an increase of $7.6 million, or 74.1%, when compared to 2023, principally due to the $8.1 million Visa C shares fair value adjustment during the second quarter of 2024 as well as an increase in cash management service fees and other miscellaneous income, partially offset by the $4.8 million noncredit-related loss on the sale of 1-4 family mortgage loans recorded during the second quarter of 2024. Wealth management totaled $37.3 million for 2024, an increase of $2.2 million, or 6.2%, when compared to 2023, principally due to increases in brokerage asset management fees and commissions as well as income from annuity services.

Current wording

Noninterest income (loss) for 2025 totaled $163.6 million, an increase of $187.1 million when compared to 2024, principally due to the $182.8 million loss on the sale of available for sale securities during the second quarter of 2024, and increases in mortgage banking, net and wealth management, partially offset by a decrease in other, net. Mortgage banking, net totaled $33.1 million for 2025, an increase of $6.5 million, or 24.2%, when compared to 2024, primarily reflecting a decrease in the net negative hedge ineffectiveness and increases in the gain on sales of loans, net and mortgage servicing income, net, partially offset by an increase in the run-off of the MSR. Wealth management totaled $40.1 million for 2025, an increase of $2.9 million, or 7.7%, when compared to 2024, primarily due to increases in income from brokerage and trust management services. Other, net totaled $13.4 million for 2025, a decrease of $4.4 million, or 24.7%, when compared to 2024, principally due to the $8.1 million Visa C shares fair value adjustment during the second quarter of 2024 as well as an increase in amortization of tax credit partnerships, partially offset by the $4.8 million noncredit-related loss on the sale of 1-4 family mortgage loans recorded during the second quarter of 2024.

Previous wording

Noninterest expense totaled $485.7 million for 2024, a decrease of $10.0 million, or 2.0%, when compared to 2023, principally due to the $6.5 million of litigation settlement expense recorded during 2023 as well as declines in services and fees and salaries and employee benefits, partially offset by an increase in other expense. Services and fees totaled $101.6 million for 2024, a decrease of $6.2 million, or 5.8%, when compared to 2023, principally due to declines in outside services and fees, telephone expense and advertising expense, partially offset by increases in data processing charges related to software and business process outsourcing fees. Salaries and employee benefits totaled $266.2 million for the year ended December 31, 2024, a decrease of $2.0 million, or 0.8%, when compared to the year ended December 31, 2023, principally due to decreases in commission expense due to the decline in mortgage originations, severance expense and medical insurance expense, partially offset by increases in salaries expense, primarily due to general merit increases, accrued management performance incentives and stock compensation expense related to performance awards. Other expense totaled $63.8 million for 2024, an increase of $5.0 million, or 8.6%, when compared to 2023, principally due to increases in FDIC assessment expense, primarily due to an increase in the assessment rate, and other real estate write-downs, partially offset by declines in stationary and supplies and other miscellaneous expenses.

Current wording

Noninterest expense totaled $512.2 million for 2025, an increase of $26.5 million, or 5.5%, when compared to 2024, principally due to increases in salaries and employee benefits and services and fees. Salaries and employee benefits totaled $283.4 million for the year ended December 31, 2025, an increase of $17.1 million, or 6.4%, when compared to the year ended December 31, 2024, principally due to increases in salaries expense, primarily due to general merit increases and new associates added during 2025, annual management performance incentives, medical insurance expense, commission expense due to the increase in mortgage originations and other salaries expense. Services and fees totaled $109.4 million for 2025, an increase of $7.8 million, or 7.7%, when compared to 2024, principally due to increases in data processing charges related to software, business process outsourcing fees, advertising expense and legal expense.

Previous wording

The PCL, LHFI for 2024 totaled $45.9 million and included an $8.6 million PCL, LHFI sale of 1-4 family mortgage loans for the credit-related portion of the loss on the sale of the 1-4 family mortgage loans. The PCL, LHFI, excluding the PCL, LHFI sale of 1-4 family mortgage loans, for 2024 totaled $37.3 million compared to $27.4 million for 2023, an increase of $9.9 million, or 36.3%. The PCL, LHFI, excluding the PCL, LHFI sale of 1-4 family mortgage loans, for 2024 primarily reflected an increase in required reserves as a result of credit migrations and other net changes in the qualitative reserve factors, loan growth, changes in the macroeconomic forecast and an increase in specific reserves for individually analyzed credits. The PCL, off-balance sheet credit exposures totaled a negative $4.7 million for 2024 compared to a negative $2.8 million for 2023, a decrease of $1.9 million, or 67.7%. The release in PCL, off-balance sheet credit exposures for 2024 primarily reflected a decrease in required reserves as a result of changes in the total reserve rate coupled with a decrease in unfunded commitments which was partially offset by an increase in required reserves as a result of implementing the Performance Trend and the External Factor-Credit Quality Review qualitative reserve factors. Please see the section captioned “Provision for Credit Losses” for additional information regarding the PCL on LHFI and off-balance sheet credit exposures.

Current wording

The PCL, LHFI for 2025 totaled $14.3 million compared to a total PCL, LHFI of $45.9 million for 2024. The PCL, LHFI for 2024 included an $8.6 million PCL, LHFI sale of 1-4 family mortgage loans for the credit-related portion of the loss on the sale of the 1-4 family mortgage loans. The PCL, LHFI, excluding the PCL, LHFI sale of 1-4 family mortgage loans, for 2024 totaled $37.3 million. The PCL, LHFI, excluding the PCL, LHFI sale of 1-4 family mortgage loans, decreased $23.0 million, or 61.6%, when 2025 is compared to 2024, primarily due to positive credit migration, the resolution of the External Factor – Credit Quality Review qualitative reserve factor and changes to specific reserves associated with individually analyzed credits, partially offset by increases in required reserves related to loan growth, changes in macroeconomic forecasts and updates to other qualitative reserve factors. The PCL, off-balance sheet credit exposures totaled a negative $1.4 million for 2025 compared to a negative $4.7 million for 2024, a decrease in the negative provision of $3.2 million, or 69.1%, primarily due to increases in the total reserve rate and unfunded commitments, partially offset by positive credit migration and the resolution of the External Factor – Credit Quality Review qualitative reserve factor. Please see the section captioned “Provision for Credit Losses” for additional information regarding the PCL on LHFI and off-balance sheet credit exposures.

Previous wording

LHFI totaled $13.090 billion at December 31, 2024, an increase of $139.4 million, or 1.1%, compared to December 31, 2023. 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. For additional information regarding changes in LHFI and comparative balances by loan category, see the section captioned “LHFI.”

Current wording

LHFI totaled $13.674 billion at December 31, 2025, an increase of $584.3 million, or 4.5%, compared to December 31, 2024. The increase in LHFI during 2025 was primarily due to net growth in other commercial loans and leases, commercial and industrial LHFI, LHFI secured by real estate and state and other political subdivision LHFI. For additional information regarding changes in LHFI and comparative balances by loan category, see the section captioned “LHFI.”

Previous wording

At December 31, 2024, nonperforming assets totaled $86.0 million, a decrease of $20.8 million, or 19.5%, compared to December 31, 2023 principally due to a decrease in nonaccrual LHFI. Total nonaccrual LHFI were $80.1 million at December 31, 2024, a decrease of $19.9 million, or 19.9%, relative to December 31, 2023, primarily as a result of the sale of 1-4 family mortgage loans during the second quarter of 2024 as well as the resolution of three large nonaccrual commercial credits in the Texas and Alabama market regions, partially offset by mortgage loans placed on nonaccrual in the Mississippi market region and three large commercial credits placed on nonaccrual in the Alabama and Texas market regions. Trustmark's mortgage loans are primarily included in the Mississippi market region because these loans are centrally analyzed and approved as part of the mortgage line of business, which is located in Jackson, Mississippi. The percentage of total loans (LHFS and LHFI) that are 30 days or more past due and nonaccrual LHFI decreased in 2024 to 1.62% compared to 1.69% in 2023.

Current wording

At December 31, 2025, nonperforming assets totaled $91.3 million, an increase of $5.3 million, or 6.2%, compared to December 31, 2024, reflecting increases in both nonaccrual LHFI and other real estate. Total nonaccrual LHFI were $84.4 million at December 31, 2025, an increase of $4.3 million, or 5.3%, relative to December 31, 2024, primarily as a result of mortgage loans placed on nonaccrual in the Mississippi market region, largely offset by the resolution of three large nonaccrual commercial credits in the Alabama and Texas market regions which were reserved for in a prior period. Trustmark's mortgage loans are primarily included in the Mississippi market region because these loans are centrally analyzed and approved as part of the mortgage line of business, which is located in Jackson, Mississippi. The percentage of total loans (LHFS and LHFI) that are 30 days or more past due or classified as nonaccrual increased in 2025 to 1.85% compared to 1.62% in 2024. Other real estate totaled $7.0 million at December 31, 2025, an increase of $1.0 million, or 17.6%, when compared to December 31, 2024, primarily reflecting property foreclosed in the Mississippi and Alabama market regions, largely offset by foreclosed properties sold in the Mississippi, Texas and Alabama market regions.

Previous wording

Total deposits were $15.108 billion at December 31, 2024, a decrease of $461.6 million, or 3.0%, compared to December 31, 2023. During 2024, noninterest-bearing deposits decreased $124.1 million, or 3.9%, primarily due to a decline in commercial demand deposit accounts. Interest-bearing deposits decreased $337.5 million, or 2.7%, during 2024, primarily due to intentional declines in public interest checking accounts and brokered deposits as well as a decline in consumer interest checking accounts, partially offset by growth in consumer MMDAs and commercial interest checking accounts and consumer CDs.

Current wording

Total deposits were $15.500 billion at December 31, 2025, an increase of $391.6 million, or 2.6%, compared to December 31, 2024. During 2025, noninterest-bearing deposits decreased $37.1 million, or 1.2%, primarily due to a decline in public demand deposit accounts partially offset by increases in commercial and personal demand deposit accounts. Interest-bearing deposits increased $428.7 million, or 3.6%, during 2025, primarily due to growth in all categories of CDs and MMDA as well as commercial interest checking accounts, partially offset by declines in public and consumer interest checking accounts.

Previous wording

Federal funds purchased and repurchase agreements totaled $324.0 million at December 31, 2024 compared to $405.7 million at December 31, 2023, a decrease of $81.7 million, or 20.1%, principally due to a decrease in upstream federal funds purchased. Trustmark had $285.0 million of upstream federal funds purchased at December 31, 2024, compared to $370.0 million at December 31, 2023. Other borrowings totaled $301.5 million at December 31, 2024, a decrease of $181.7 million, or 37.6%, when compared with $483.2 million at December 31, 2023, principally due to a decline in outstanding short-term FHLB advances obtained from the FHLB of Dallas.

Current wording

Federal funds purchased and securities sold under repurchase agreements totaled $445.0 million at December 31, 2025 compared to $324.0 million at December 31, 2024, an increase of $121.0 million, or 37.3%, principally due to an increase in upstream federal funds purchased. Trustmark had $445.0 million of upstream federal funds purchased at December 31, 2025, compared to $285.0 million at December 31, 2024. Other borrowings totaled $364.8 million at December 31, 2025, an increase of $63.2 million, or 21.0%, when compared with $301.5 million at December 31, 2024, principally due to increases in Government National Mortgage Association (GNMA) loans eligible for repurchase and outstanding short-term FHLB advances obtained from the FHLB of Dallas.

Previous wording

The credit loss estimation process involves procedures to appropriately consider the unique characteristics of Trustmark’s LHFI portfolio segments. These segments are further disaggregated into loan classes, the level at which credit risk is estimated. When computing allowance levels, credit loss assumptions are estimated using a model that categorizes loan pools based on loss history, delinquency status and other credit trends and risk characteristics, including current conditions and reasonable and supportable forecasts about the future. Trustmark’s overall ACL methodology incorporates various qualitative factors, including economic conditions and concentrations of credit, nature and volume of the portfolio, performance trends and external factors. The economic conditions and concentrations of credit qualitative factor was created for the loans secured by NFNR properties and the loans secured by other real estate loan class, two of Trustmark’s largest loan classes, to address changes in the economic conditions of metropolitan areas and apply additional pool level reserves based on third-party market data and forecast trends. The performance trend qualitative reserve factor is utilized to incorporate changes in credit quality and is based on migration analyses that allocate additional ACL to non-pass/delinquent loans within each loan pool. The nature and volume of the portfolio qualitative factor applies to a sub-pool of the LHFI secured by 1-4 family residential properties and utilizes a weighted average remaining maturity (WARM) methodology that uses industry data for the assumptions to support the qualitative adjustment. The external factors qualitative factor is Management’s best judgment on the loan or pool level impact of all factors that affect the portfolio that are not accounted for using any other part of the ACL methodology. During the third quarter of 2024, Trustmark activated the External Factor – Credit Quality Review qualitative factor. This qualitative factor ensures reserve adequacy for collectively evaluated commercial loans that may not have been identified and downgraded timely for various reasons. This qualitative factor population is all commercial loans risk rated 1-5. These loans are then applied to the historical average of the Watch/Special Mention rated percentage. Then the balance of these loans are applied additional reserves based on the same reserve rates utilized in the performance trends qualitative factor for Watch/Special Mention rated loans.

Current wording

The credit loss estimation process involves procedures to appropriately consider the unique characteristics of Trustmark’s LHFI portfolio segments. These segments are further disaggregated into loan classes, the level at which credit risk is estimated. When computing allowance levels, credit loss assumptions are estimated using a model that categorizes loan pools based on loss history, delinquency status and other credit trends and risk characteristics, including current conditions and reasonable and supportable forecasts about the future. Trustmark’s overall ACL methodology incorporates various qualitative factors, including economic conditions and concentrations of credit, nature and volume of the portfolio, performance trends and external factors. The economic conditions and concentrations of credit qualitative factor was created for the loans secured by NFNR properties and the loans secured by other real estate loan class, two of Trustmark’s largest loan classes, to address changes in the economic conditions of metropolitan areas and apply additional pool level reserves based on third-party market data and forecast trends. The performance trend qualitative reserve factor is utilized to incorporate changes in credit quality and is based on migration analyses that allocate additional ACL to non-pass/delinquent loans within each loan pool. The nature and volume of the portfolio qualitative factor applies to a sub-pool of the LHFI secured by 1-4 family residential properties and utilizes a weighted average remaining maturity (WARM) methodology that uses industry data for the PD and LGD assumptions to support the qualitative adjustment. During the first quarter of 2025, Management elected to utilize Trustmark's historical data to develop a PD based on the credit score ranges initially established as well as the same LGD value from the mortgage sale that occurred in the second quarter of 2024 along with the same weighted average life assumption utilized to determine the credit mark on this portfolio. The external factors qualitative factor is Management’s best judgment on the loan or pool level impact of all factors that affect the portfolio that are not accounted for using any other part of the ACL methodology. During the third quarter of 2024, Trustmark activated the External Factor – Credit Quality Review qualitative factor. This qualitative factor ensures reserve adequacy for collectively evaluated commercial loans that may not have been identified and downgraded timely for various reasons. This qualitative factor population is all commercial loans risk rated 1-5. These loans are then applied to the historical average of the Watch/Special Mention rated percentage. Then the balance of these loans are applied additional reserves based on the same reserve rates utilized in the performance trends qualitative factor for Watch/Special Mention rated loans. During the third quarter of 2025, Management determined that the risk related to delayed identif…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Expected credit losses for off-balance sheet credit exposures are estimated by calculating a commitment usage factor over the contractual period for exposures that are not unconditionally cancellable by Trustmark. Trustmark calculates a loan pool level unfunded amount for the period. 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. The expected funding rate is applied to each pool’s unfunded commitment balances to ensure that reserves will be applied to each pool based upon balances expected to be funded based upon historical levels. In addition to the funding rate being applied to the unfunded commitment balance, a reserve rate is applied that is loan pool specific and is applied to the unfunded amount, which includes both quantitative and a majority of the qualitative aspects of the current period's expected credit loss rate. During 2024, Management implemented a performance trends qualitative factor for unfunded commitments and an External Factor - Credit Quality Review qualitative factor for unfunded commitments. For both qualitative factors, the same assumptions are applied in the unfunded commitment calculation that are used in the funded balance calculation with the only difference being the unfunded commitment calculation includes the funding rates for the unfunded commitments. The reserves for these two qualitative factors are added to the other calculated reserve to get a total reserve for off-balance sheet credit exposures.

Current wording

Expected credit losses for off-balance sheet credit exposures are estimated by calculating a commitment usage factor over the contractual period for exposures that are not unconditionally cancellable by Trustmark. Trustmark calculates a loan pool level unfunded amount for the period. 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. The expected funding rate is applied to each pool’s unfunded commitment balances to ensure that reserves will be applied to each pool based upon balances expected to be funded based upon historical levels. In addition to the funding rate being applied to the unfunded commitment balance, a reserve rate is applied that is loan pool specific and is applied to the unfunded amount, which includes both quantitative and a majority of the qualitative aspects of the current period's expected credit loss rate. During 2024, Management implemented a performance trends qualitative factor for unfunded commitments and an External Factor – Credit Quality Review qualitative factor for unfunded commitments. For both qualitative factors, the same assumptions are applied in the unfunded commitment calculation that are used in the funded balance calculation with the only difference being the unfunded commitment calculation includes the funding rates for the unfunded commitments. The reserves for these two qualitative factors are added to the other calculated reserve to get a total reserve for off-balance sheet credit exposures. During the third quarter of 2025, Management determined that the risk related to delayed identification and downgrading of commercial loans had sufficiently diminished and, as a result, resolved the External Factor – Credit Quality Review qualitative factor and released the associated reserves.

Previous wording

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.

Current wording

For a complete description of Trustmark’s ACL methodology for off-balance sheet credit exposures, please see the section captioned “ACL on Off-Balance Sheet Credit Exposures” in Note 16 – Commitments and Contingencies included in Part II. Item 8. – Financial Statements and Supplementary Data of this report.

Previous wording

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. 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.

Current wording

At December 31, 2025, the MSR fair value was $131.3 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, 2025, would be a decline in fair value of approximately $5.1 million and $5.2 million, respectively. 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.

Previous wording

Trustmark sold a portfolio of 1-4 family mortgage loans that were at least three payments delinquent and/or nonaccrual at the time of selection totaling $56.2 million, which resulted in a loss of $13.4 million ($10.1 million, net of taxes). The portion of the loss related to credit totaled $8.6 million ($6.5 million, net of taxes) and was recorded as adjustments to charge-offs and the PCL, LHFI. The noncredit-related portion of the loss totaled $4.8 million ($3.6 million, net of taxes) and was recorded to noninterest income (loss) in other, net.

Current wording

During the second quarter of 2024, Trustmark sold a portfolio of 1-4 family mortgage loans that were at least three payments delinquent and/or nonaccrual at the time of selection totaling $56.2 million, which resulted in a loss of $13.4 million ($10.1 million, net of taxes). The portion of the loss related to credit totaled $8.6 million ($6.5 million, net of taxes) and was recorded as adjustments to charge-offs and the PCL, LHFI. The noncredit-related portion of the loss totaled $4.8 million ($3.6 million, net of taxes) and was recorded to noninterest income (loss) in other, net.

Previous wording

On April 8, 2024, Visa commenced an initial exchange offer expiring on May 3, 2024, for any and all outstanding shares of Visa Class B-1 common stock (Visa B-1 shares). Holders participating in the exchange offer would receive a combination of Visa Class B-2 common stock (Visa B-2 shares) and Visa Class C common stock (Visa C shares) in exchange for Visa B-1 shares that were validly tendered and accepted for exchange by Visa. TNB tendered its 38.7 thousand Visa B-1 shares, which were accepted by Visa. In exchange for each Visa B-1 share that was validly tendered and accepted for exchange by Visa, TNB received 50.0% of a newly issued Visa B-2 share and newly issued Visa C shares equivalent in value to 50.0% of a Visa B-1 share. The Visa C shares that were received by TNB were recognized at fair value, which resulted in a gain of $8.1 million ($6.0 million, net of taxes) and was recorded to noninterest income (loss) in other, net during the second quarter of 2024. During the third quarter of 2024, TNB sold all of the Visa C shares for approximately the same carrying value as of June 30, 2024. The Visa B-2 shares were recorded at their nominal carrying value.

Current wording

On April 8, 2024, Visa commenced an initial exchange offer expiring on May 3, 2024, for any and all outstanding shares of Visa Class B-1 common stock (Visa B-1 shares). Holders participating in the exchange offer would receive a combination of Visa Class B-2 common stock (Visa B-2 shares) and Visa Class C common stock (Visa C shares) in exchange for Visa B-1 shares that were validly tendered and accepted for exchange by Visa. TB tendered its 38.7 thousand Visa B-1 shares, which were accepted by Visa. In exchange for each Visa B-1 share that was validly tendered and accepted for exchange by Visa, TB received 50.0% of a newly issued Visa B-2 share and newly issued Visa C shares equivalent in value to 50.0% of a Visa B-1 share. The Visa C shares that were received by TB were recognized at fair value, which resulted in a gain of $8.1 million ($6.0 million, net of taxes) and was recorded to noninterest income (loss) in other, net during the second quarter of 2024. During the third quarter of 2024, TB sold all of the Visa C shares for approximately the same carrying value as of June 30, 2024. The Visa B-2 shares were recorded at their nominal carrying value.

Previous wording

Trustmark restructured its investment securities portfolio by selling $1.561 billion of available for sale securities with an average yield of 1.36%, which generated a loss of $182.8 million ($137.1 million, net of taxes) and was recorded to noninterest income (loss) in securities gains (losses), net. Trustmark also purchased $1.378 billion of available for sale securities with an average yield of 4.85%.

Current wording

During the second quarter of 2024, Trustmark restructured its investment securities portfolio by selling $1.561 billion of available for sale securities with an average yield of 1.36%, which generated a loss of $182.8 million ($137.1 million, net of taxes) and was recorded to noninterest income (loss) in securities gains (losses), net. Trustmark also purchased $1.378 billion of available for sale securities with an average yield of 4.85%.

Previous wording

On January 13, 2023, TNB entered into a settlement agreement relating to the litigation involving the Stanford Financial Group. As a result of this settlement, Trustmark recognized a one-time charge of $100.0 million of litigation settlement expense as well as an additional $750 thousand of legal fees during the fourth quarter of 2022.

Current wording

On January 13, 2023, TB entered into a settlement agreement relating to the litigation involving the Stanford Financial Group. As a result of this settlement, Trustmark recognized a one-time charge of $100.0 million of litigation settlement expense as well as an additional $750 thousand of legal fees during the fourth quarter of 2022.

Previous wording

Net interest income-FTE for the year ended December 31, 2024 increased $30.6 million, or 5.4%, when compared with the year ended December 31, 2023. The increase in net interest income-FTE when 2024 is compared to 2023 was principally due to increases in interest and fees on LHFS and LHFI-FTE and interest on securities-taxable as well as a decline in other interest expense, partially offset by an increase in total interest on deposits and a decline in other interest income. The net interest margin-FTE for 2024 increased 19 basis points to 3.51% when compared to 2023. The increase in the net interest margin-FTE for 2024 was principally due to increases in the yields on the LHFS and LHFI and securities portfolios reflecting the higher interest rate environment and the restructuring of the securities portfolio during 2024, partially offset by higher costs of interest-bearing liabilities.

Current wording

Net interest income-FTE for the year ended December 31, 2025 increased $50.2 million, or 8.4%, when compared with the year ended December 31, 2024. The increase in net interest income-FTE when 2025 is compared to 2024 was attributable to declines in all categories of interest expense, with the exception of interest on subordinated notes, and an increase in interest on securities available for sale-taxable partially offset by declines in interest and fees on LHFS and LHFI-FTE and other interest income. The net interest margin-FTE for 2025 increased 29 basis points to 3.80% when compared to 2024. The increase in the net interest margin-FTE for 2025 was principally due to declines in the costs of interest-bearing deposits and other short-term borrowings as well as an increase in the yield on securities available for sale, partially offset by declines in yields on LHFS and LHFI and other earning assets.

Previous wording

Average interest-earning assets for 2024 were $17.010 billion compared to $17.082 billion for 2023, a decrease of $71.9 million, or 0.4%, reflecting declines in average securities and average other earning assets partially offset by growth in average loans (LHFS and LHFI). Average total securities declined $372.8 million, or 10.5%, when 2024 is compared to 2023, principally due to available for sale securities sold net of available for sale securities purchased as part of the restructuring of the available for sale securities portfolio during the second quarter of 2024 as well as calls, maturities and pay-downs of the loans underlying GSE guaranteed securities. Average other earning assets decreased $181.3 million, or 24.9%, when 2024 is compared to 2023, primarily due to decreases in reserves held at the FRBA and investments in FHLB stock. Average loans (LHFS and LHFI) increased $482.3 million, or 3.8%, when 2024 is compared to 2023, primarily attributable to an increase in the average balance of the LHFI portfolio of $458.5 million, or 3.6%. The increase in the average LHFI portfolio when the balances at December 31, 2024 are compared to December 31, 2023 was principally due to net growth in average LHFI secured by real estate and average other commercial loans and leases partially offset by declines in average state and other political subdivision loans. See the sections captioned "LHFS" and "LHFI" for additional information regarding changes in the LHFS and LHFI portfolios.

Current wording

Average interest-earning assets for 2025 were $17.037 billion compared to $17.010 billion for 2024, an increase of $26.2 million, or 0.2%, reflecting growth in average loans (LHFS and LHFI) partially offset by declines in average securities and average other earning assets. Average loans (LHFS and LHFI) increased $324.9 million, or 2.4%, when 2025 is compared to 2024, primarily attributable to an increase in the average balance of the LHFI portfolio of $302.9 million, or 2.3%. The increase in the average LHFI portfolio when the balances at December 31, 2025 are compared to December 31, 2024 was principally due to net growth in average LHFI secured by real estate and average other commercial loans and leases. See the sections captioned "LHFS" and "LHFI" for additional information regarding changes in the LHFS and LHFI portfolios. Average total securities declined $135.1 million, or 4.3%, when 2025 is compared to 2024, principally due to calls, maturities and pay-downs of the loans underlying GSE guaranteed securities partially offset by purchases of available for sale securities. Average other earning assets decreased $163.6 million, or 29.8%, when 2025 is compared to 2024, primarily due to a decrease in the average balance held at the FRBA.

Previous wording

Interest income-FTE totaled $972.9 million for 2024, an increase of $80.6 million, or 9.0%, while the yield on total earning assets increased 50 basis points to 5.72% when compared to 2023. The increase in interest income-FTE in 2024 primarily reflects increases in interest and fees on LHFS and LHFI-FTE and interest on securities-taxable partially offset by a decline in other interest income. During 2024, interest and fees on LHFS and LHFI-FTE increased $68.6 million, or 8.7%, when compared to 2023, while the yield on loans (LHFS and LHFI) increased to 6.45% compared to 6.16% reflecting the higher interest rate environment and the increase in the average balance of the LHFI portfolio. During 2024, interest on securities-taxable increased $19.8 million, or 30.0%, when compared to 2023, while the yield on taxable securities increased to 2.70% compared to 1.86% principally due to the restructuring of the securities portfolio. During 2024, other interest income decreased $7.5 million, or 20.3%, when compared to 2023, while the yield on other earning assets increased to 5.41% compared to 5.10%, primarily due to declines in the balance held at the FRBA and dividend income from FHLB stock.

Current wording

Interest income-FTE totaled $959.7 million for 2025, a decrease of $13.2 million, or 1.4%, while the yield on total earning assets decreased 9 basis points to 5.63% when compared to 2024. The decrease in interest income-FTE in 2025 primarily reflected declines in interest and fees on LHFS and LHFI-FTE and other interest income, partially offset by an increase in interest on securities available for sale-taxable. During 2025, interest and fees on LHFS and LHFI-FTE decreased $19.9 million, or 2.3%, when compared to 2024, while the yield on loans (LHFS and LHFI) decreased to 6.15% compared to 6.45% reflecting lower interest rates partially offset by the increase in the average balance of the LHFI portfolio. During 2025, other interest income decreased $12.9 million, or 43.4%, when compared to 2024, while the yield on other earning assets decreased to 4.36% compared to 5.41%, primarily due to a decline in the average balance held at the FRBA as well as the FRB's decision to lower the rate it pays on reserves. During 2025, interest on securities available for sale-taxable increased $22.1 million, or 39.5%, when compared to 2024, while the yield on taxable securities available for sale increased to 4.44% compared to 3.13% principally due to higher yielding securities purchased in 2025 as well as the restructuring of the available for sale securities portfolio during the second quarter of 2024.

Previous wording

Average interest-bearing liabilities for 2024 totaled $13.159 billion compared to $12.983 billion for 2023, an increase of $176.1 million, or 1.4%. The increase in average interest-bearing liabilities was primarily the result of increases in average interest-bearing deposits partially offset by a decline in average other borrowings. Average interest-bearing deposits for 2024 increased $784.0 million, or 6.9%, when compared to 2023, reflecting growth in average time deposits and average interest-bearing demand deposits partially offset by declines in average savings deposits. Average other borrowings for 2024 decreased $596.0 million, or 60.6%, when compared to 2023, principally due to the decrease in short-term FHLB advances outstanding during the year.

Current wording

Average interest-bearing liabilities for 2025 totaled $13.042 billion compared to $13.159 billion for 2024, a decrease of $116.9 million, or 0.9%. The decrease in average interest-bearing liabilities was primarily the result of declines in average interest-bearing deposits and average other borrowings. Average interest-bearing deposits for 2025 decreased $59.2 million, or 0.5%, when compared to 2024, reflecting declines in average interest-bearing demand deposits and average savings deposits partially offset by growth in average time deposits. Average other borrowings for 2025 decreased $79.3 million, or 20.4%, when compared to 2024, principally due to a decrease in average short-term FHLB advances outstanding during the year partially offset by an increase in average GNMA loans eligible for repurchase.

Previous wording

The PCL, LHFI is the amount necessary to maintain the ACL, LHFI at the amount of expected credit losses inherent within the LHFI portfolio. The amount of PCL and the related ACL for LHFI are based on Trustmark’s ACL methodology. The PCL, LHFI, excluding the PCL, LHFI sale of 1-4 family mortgage loans, totaled $37.3 million for 2024, compared to a PCL, LHFI of $27.4 million for 2023 and $21.7 million for 2022. The PCL, LHFI, excluding the PCL, LHFI sale of 1-4 family mortgage loans, for 2024 primarily reflected an increase in required reserves as a result of credit migrations and other net changes in the qualitative reserve factors, loan growth, changes in the macroeconomic forecast and an increase in specific reserves for individually analyzed credits.

Current wording

The PCL, LHFI is the amount necessary to maintain the ACL, LHFI at the amount of expected credit losses inherent within the LHFI portfolio. The amount of PCL and the related ACL for LHFI are based on Trustmark’s ACL methodology. The PCL, LHFI totaled $14.3 million for 2025, compared to a PCL, LHFI, excluding the PCL, LHFI sale of 1-4 family mortgage loans, of $37.3 million for 2024 and a PCL, LHFI of $27.4 million for 2023. The PCL, LHFI for 2025 primarily reflected an increase in required reserves as a result of loan growth, changes in the macroeconomic forecast and updates to various qualitative reserve factors, partially offset by a decrease in specific reserves for individually analyzed credits, positive credit migration and reserves released associated with the resolution of the External Factor – Credit Quality Review qualitative factor.

Previous wording

FASB ASC Topic 326 requires Trustmark to estimate expected credit losses for off-balance sheet credit exposures which are not unconditionally cancellable by Trustmark. Trustmark maintains a separate ACL for off-balance sheet credit exposures, including unfunded commitments and letters of credit. Adjustments to the ACL on off-balance sheet credit exposures are recorded to the PCL, off-balance sheet credit exposures. The PCL, off-balance sheet credit exposures totaled a negative $4.7 million for 2024 compared to a negative $2.8 million for 2023, and $1.2 million for 2022. The release in PCL on off-balance sheet credit exposures for 2024 primarily reflected a decrease in required reserves as a result of changes in the total reserve rate coupled with a decrease in unfunded commitments which was partially offset by an increase in required reserves as a result of implementing the Performance Trend and the External Factor-Credit Quality Review qualitative reserve factors.

Current wording

FASB ASC Topic 326 requires Trustmark to estimate expected credit losses for off-balance sheet credit exposures which are not unconditionally cancellable by Trustmark. Trustmark maintains a separate ACL for off-balance sheet credit exposures, including unfunded commitments and letters of credit. Adjustments to the ACL on off-balance sheet credit exposures are recorded to the PCL, off-balance sheet credit exposures. The PCL, off-balance sheet credit exposures totaled a negative $1.4 million for 2025 compared to a negative $4.7 million for 2024, and a negative $2.8 million for 2023. The release in PCL on off-balance sheet credit exposures for 2025 primarily reflected a decrease in required reserves as a result of positive credit migration and reserves released associated with the resolution of the External Factor – Credit Quality Review qualitative factor, partially offset by an increase in required reserves as a result of changes in the total reserve rate.

Previous wording

The increase in mortgage banking, net when 2024 is compared to 2023 was principally due to an increase in the gain on sales of loans, net partially offset by an increase in the net negative hedge ineffectiveness. Mortgage loan production totaled $1.418 billion for 2024, a decrease of $36.4 million, or 2.5%, when compared to 2023. Loans serviced for others totaled $8.763 billion at December 31, 2024, compared with $8.477 billion at December 31, 2023, and $8.116 billion at December 31, 2022.

Current wording

The increase in mortgage banking, net when 2025 is compared to 2024 was principally due to a decrease in the net negative hedge ineffectiveness and increases in the gain on sales of loans, net and mortgage servicing income, net, partially offset by an increase in the run-off of the MSR. Mortgage loan production totaled $1.528 billion for 2025, an increase of $109.9 million, or 7.8%, when compared to 2024. Loans serviced for others totaled $8.956 billion at December 31, 2025, compared with $8.763 billion at December 31, 2024, and $8.477 billion at December 31, 2023.

Previous wording

Representing a significant component of mortgage banking income is gain on sales of loans, net. The increase in the gain on sales of loans, net when 2024 is compared to 2023 was primarily the result of higher profit margins in secondary marketing activities partially offset by a decrease in the mortgage valuation adjustment. Loan sales increased $5.3 million, or 0.5%, during 2024 to total $1.141 billion compared to a decrease of $107.0 million, or 8.6%, during 2023 to total $1.136 billion.

Current wording

Representing a significant component of mortgage banking income is gain on sales of loans, net. The increase in the gain on sales of loans, net when 2025 is compared to 2024 was primarily the result of an increase in the mortgage valuation adjustment. Loan sales increased $16.2 million, or 1.4%, during 2025 to total $1.158 billion compared to an increase of $5.3 million, or 0.5%, during 2024 to total $1.141 billion.

Previous wording

The increase in other, net when 2024 is compared to 2023 was principally due to the $8.1 million Visa C shares fair value adjustment during the second quarter of 2024 as well as an increase in other miscellaneous income, partially offset by the $4.8 million noncredit-related loss on the sale of 1-4 family mortgage loans recorded during the second quarter of 2024. The increase in other miscellaneous income when 2024 is compared with 2023 was principally due to increases in cash management service charges and other partnership investments.

Current wording

The decrease in other, net when 2025 is compared to 2024 was principally due to the $8.1 million Visa C shares fair value adjustment during the second quarter of 2024 as well as an increase in amortization of tax credit partnerships, partially offset by the $4.8 million noncredit-related loss on the sale of 1-4 family mortgage loans recorded during the second quarter of 2024.

Previous wording

The decrease in salaries and employee benefits expense when 2024 is compared to 2023 was principally due to decreases in commission expense due to the decline in mortgage originations, severance expense and medical insurance expense, partially offset by increases in salaries expense, primarily due to general merit increases, accrued management performance incentives and stock compensation expense related to performance awards.

Current wording

The increase in salaries and employee benefits when 2025 is compared to 2024 was principally due to increases in salaries expense, primarily due to general merit increases and new associates added during 2025, annual management performance incentives, medical insurance expense, commission expense due to the increase in mortgage originations and other salaries expense.

Previous wording

The decrease in services and fees when 2024 is compared to 2023 was principally due to declines in outside services and fees, telephone expense and advertising expense, partially offset by increases in data processing charges related to software and business process outsourcing fees.

Current wording

The increase in services and fees when 2025 is compared to 2024 was principally due to increases in data processing charges related to software, business process outsourcing fees, advertising expense and legal expense.

Previous wording

The increase in other expense when 2024 is compared to 2023 was principally due to increases in FDIC assessment expense, primarily due to an increase in the assessment rate, and other real estate write-downs, partially offset by declines in stationary and supplies and other miscellaneous expenses.

Current wording

The decrease in other expense when 2025 is compared to 2024 was principally due to a decrease in FDIC assessment expense, primarily due to a decrease in the assessment rate, which was largely offset by increases in loan expense and other miscellaneous expenses.

Previous wording

Net interest income for the General Banking Segment for 2024 increased $31.5 million, or 5.8%, when compared with 2023, primarily resulting from increases in interest and fees from LHFS and LHFI and interest on securities as well as a decline in other interest expense, partially offset by an increase in interest expense on deposits and a decrease in other interest income. Net interest income for the General Banking Segment for 2023 increased $57.6 million, or 11.8%, when compared with 2022, principally due to increases in interest and fees on LHFS and LHFI, other interest income and interest on securities, partially offset by an increase in total interest expense. The PCL (LHFI and off-balance sheet credit exposures) for the General Banking Segment for 2024 totaled $41.1 million compared to a PCL of $26.7 million during 2023 and a PCL of $22.9 million during 2022. For more information on these net interest income items, please see the sections captioned “Financial Highlights” and “Results of Operations.”

Current wording

Net interest income for the General Banking Segment for 2025 increased $47.9 million, or 8.3%, when compared with 2024, primarily resulting from declines in all categories of interest expense as well as an increase in interest on securities, partially offset by decreases in interest and fees from LHFS and LHFI and other interest income. The PCL (LHFI and off-balance sheet credit exposures) for the General Banking Segment for 2025 totaled $12.9 million compared to a PCL of $41.1 million during 2024 and a PCL of $26.7 million during 2023. For more information on these net interest income items, please see the sections captioned “Financial Highlights” and “Results of Operations.”

Previous wording

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. The decrease in noninterest income (loss) for the General Banking Segment during 2024 was primarily due to the net loss on the sale of available for sale securities, the noncredit-related loss on the sale of 1-4 family mortgage loans and a decrease in mortgage banking, net, partially offset by the gain on the conversion of Visa Class B-1 shares to Visa Class C shares and increases in cash management service fees and other miscellaneous income. 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. Noninterest income (loss) for the General Banking Segment represented a negative 11.7% of total revenue for 2024, 17.2% for 2023 and 19.2% for 2022. Noninterest income (loss) for the General Banking Segment includes service charges on deposit accounts; wealth management; bank card and other fees; mortgage banking, net; other, net and securities gains (losses), net. For more information on these noninterest income (loss) items, please see the analysis included in the section captioned “Noninterest Income (Loss).”

Current wording

Noninterest income (loss) for the General Banking Segment increased $183.9 million during 2025, primarily due to the net loss on the sale of available for sale securities and the noncredit-related loss on the sale of 1-4 family mortgage loans during the second quarter of 2024, as well as increases in mortgage banking, net and gain on sale on premises and equipment, partially offset by the gain on the conversion of Visa Class B-1 shares to Visa Class C shares during the second quarter of 2024 and a decrease in cash management service fees and an increase in the amortization of tax credit partnerships. Noninterest income (loss) for the General Banking Segment represented 16.4% of total revenue for 2025, a negative 11.7% for 2024 and 17.2% for 2023. Noninterest income (loss) for the General Banking Segment includes service charges on deposit accounts; wealth management; bank card and other fees; mortgage banking, net; other, net and securities gains (losses), net. For more information on these noninterest income (loss) items, please see the analysis included in the section captioned “Noninterest Income (Loss).”

Previous wording

Net interest income for the Wealth Management Segment increased $80 thousand, or 1.4%, during 2024 compared to an increase of $558 thousand, or 10.5%, during 2023. The slight increase in net interest income for the Wealth Management Segment during 2024 was principally due to an increase in interest and fees on LHFS and LHFI largely offset by an increase in interest expense on deposits. 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. 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.

Current wording

During 2025, net income for the Wealth Management Segment increased $4.1 million, or 52.9%, principally due to increases in net interest income and noninterest income partially offset by an increase in noninterest expense. Net interest income for the Wealth Management Segment increased $3.8 million, or 63.4%, when 2025 is compared to 2024. The increase in net interest income for the Wealth Management Segment when 2025 is compared to 2024 was principally due to an increase in earnings credit on liabilities net of cost of funds on assets as well as an increase in interest on loans partially offset by an increase in interest on deposits generated by the Private Banking Group. The PCL for the Wealth Management Segment for 2025 totaled a negative $26 thousand compared to a PCL of $154 thousand during 2024 and a negative PCL of $2.1 million during 2023. Noninterest income for the Wealth Management Segment, which includes income related to investment management, trust and brokerage services, increased $3.1 million, or 8.4%, during 2025, principally due to increases in income from brokerage and trust management services. Noninterest expense increased $1.6 million, or 4.8%, when 2025 is compared to 2024, principally due to an increase in salaries and employee benefits, primarily related to broker commissions, other salaries expense, general merit increases and annual portfolio manager incentives partially offset by a decline in trust commissions.