Trustmark Corporation Q1 FY2026 earnings call

• Built on strong momentum from 2025 earnings, with strong first quarter 2026 performance featuring loan growth, stable credit quality, and an attractive core deposit base. - Non-interest income continued to grow while non-interest expense remained unchanged, showing focus on expense management. - Maintained a strong capital position and declared a regular quarterly dividend.

Net income was $56.1 million with diluted EPS of 95 cents per share. Return on average assets was 1.2% and return on average tangible equity was 12.58%. Loans held for investment increased by $203.7 million (1.5% quarter-over-quarter) and $636.5 million (4.8% year-over-year). The deposit base expanded by $212.7 million (1.4% quarter-over-quarter) and $631.8 million (4.2% year-over-year). Net interest income was $163.5 million with a net interest margin of 3.81%. Non-interest income was $42.3 million (20.9% of total revenue). Non-interest expense was $132.2 million (unchanged quarter-over-quarter and up $8.1 million year-over-year). Net charge-offs were $1.3 million (four basis points of average loans). Net provision for credit losses was $2.7 million. The allowance for credit losses was 1.16% of loans held for investment. The CET-1 ratio was 11.7% and the total risk-based capital ratio was 14.37% at March 31, 2026. 19.8 million shares were repurchased.

Affirmed previous full-year 2026 guidance. Expected loans held for investment to increase in the single digits, deposits (excluding broker deposits) to increase in the mid-single digits. Security balances expected to remain stable. Net interest margin expected to be in the range of 380 to 385 for the full year, net interest income to increase in the mid-single digits. Total provision for credit losses to normalize. Non-interest income and non-interest expense expected to increase in the mid-single digits. Disciplined approach to capital deployment with preference for organic loan growth, potential market expansion, M&A or other corporate purposes depending on market conditions.

• Q: About margin with rate cuts removed, asked about new loan yields and deposit costs.

A: Tom Owens stated based on market implied forwards, expected a few basis points decline in deposit costs and loan yields in the second quarter, with securities yields grinding higher, netting out to basis point accretion each quarter, with fractions of basis points in deposit cost, loan yield, and net interest margin. - Q: Bigger picture on profitability, ROA and ROE.

A: Tom Owens said pre-provision net revenue with mid-single digit balance sheet growth and stable to slightly expanding net interest margin should lead to solid mid-single-digit PPNR growth, adjusting for lumpy items showed PPNR growth, expense side better than numbers with strategic investments in revenue producers, and mortgage business as a wild card. - Q: On non-interest income, wealth side.

A: Barry Harvey said dependent on market appreciation, new business development was solid, platform change from LPL to Raymond James was stabilized, expecting continued progress. - Q: On share repurchase cadence.

A: Tom Owens said pleased with first quarter repurchase, leaning into it due to bank stock price downdraft, expected $70 to $80 million deployment for the full year. - Q: On loan growth, competition and paydowns.

A: Barry said there were CRE maturity migrations, expecting payouts to be spread out, C&I production pipelines were strong, and focused on adding new production talent. - Q: On credit, MPLs.

A: Barry said non-accruals were related to a CRE project, with the borrower not seeing value and an LOI in place. - Q: On NIM, loan yields driver.

A: Barry said CRE loans rolling off had lower spreads, refinancing existing debt was priced less, and Gary Tenner added it was mix-dependent with dust settling after Fed rate cut. - Q: On deposit flows from commercial channel.

A: Tom Owens said anticipated accelerated growth in commercial deposit accounts and balances, with seen steady acceleration in commercial deposit balances. - Q: On expense operating leverage.

A: Tom Owens said mindset was break-even year considering investments in revenue producers and technology, with investments to generate returns and drive positive operating leverage going forward.