Trustmark Corporation (TRMK) Q4 2025 Earnings Call Summary

1Key Financial Results and Metrics

Net Income: $57.9 million, with diluted EPS of $0.97, up 3.2% quarter-over-quarter and 5.4% year-over-year.

Full Year Net Income: $224.1 million, diluted EPS of $3.70, marking a record for the company.

Return on Average Assets: 1.21%.

Return on Average Tangible Equity: 12.97%.

Loan Growth: Loans held for investment increased by $126 million (0.9% linked-quarter, 4.5% year-over-year).

Deposit Base: Decreased by $131 million (0.8% linked-quarter) but increased by $392 million (2.6% year-over-year).

Net Interest Income: $166 million for Q4; $647 million for the full year, up 8.4% from the previous year.

Net Interest Margin: 3.81% for Q4.

Noninterest Income: $41 million in Q4, totaling $164 million for the year (20.5% of total revenue).

Noninterest Expense: Increased by 0.9% linked-quarter, totaling $512 million for the year.

Net Charge-offs: $7.6 million in Q4, representing 0.22% of average loans.

CET1 Ratio: 11.72% at year-end.

2Strategic Updates and Business Highlights

Business Performance: Continued growth in traditional banking, mortgage banking, and wealth management, with record revenue in wealth management.

Share Repurchase Program: $43 million in Q4 and $80 million for the year, representing 3.5% of outstanding shares. Authorization for an additional $100 million in 2026.

Dividend Increase: Regular quarterly dividend raised by 4.2% to $0.25 per share.

Talent Acquisition: Focus on organic growth with 13 new production hires in Q4, contributing to improved loan growth.

3Forward Guidance and Outlook

2026 Expectations:

Loan and deposit growth projected in the mid-single digits.

Net interest margin anticipated between 3.80% and 3.85%.

Noninterest income and expense expected to increase mid-single digits.

Credit costs are expected to normalize, with net charge-offs projected at 13 to 15 basis points of average loans.

4Bad News, Challenges, or Points of Concern

Deposit Decline: Notable decrease in public fund deposits contributing to the linked-quarter decline in the deposit base.

Expense Management: Noninterest expenses increased by 5.5% year-over-year, indicating ongoing cost pressures.

Market Competition: Increased M&A activity in core markets may create competitive pressures, potentially impacting organic growth opportunities.

5Notable Q&A Insights

M&A Strategy: Management remains cautious about pursuing M&A, focusing on organic growth while monitoring market opportunities. They acknowledged the potential disruption from competitors' mergers.

Credit Quality: Improvement in credit quality noted, with expectations for charge-offs to stabilize. Provisioning for credit losses is anticipated to normalize.

Deposit Strategy: Increased internal incentives for deposit growth, with a focus on cost-effective balance acquisition.

Buyback Strategy: Management indicated a preference for a buyback range of $60 million to $70 million, balancing capital needs for growth and potential M&A opportunities. Overall, Trustmark Corporation reported strong financial performance in 2025, with a focus on sustainable growth and strategic capital management, while navigating challenges in the competitive banking landscape.