Quarterly Financial Results Discussion for Trustmark (TRMK) in Q2 2025

Trustmark Corporation's Q2 2025 Financial Results and Outlook

Quarterly Financial Results Discussion for Trustmark (TRMK) in Q2 2025

Trustmark Corporation has reported its financial results for the second quarter of 2025, showcasing growth and strategic moves that position the company for a strong future.

The company's net interest income rose 4.3% to $161.4 million in Q2 2025, pushing the net interest margin to 3.81%, with a six basis point increase from Q1 2025. This growth is attributed to efficient capital use and a disciplined approach to managing deposit costs and loan pricing.

Trustmark has been expanding its presence through strategic markets like Houston, Atlanta, and Jackson, Mississippi. The company is actively pursuing mergers and acquisitions (M&A) in the Southeast, targeting banks with assets between $1 billion and $5 billion. This approach is expected to drive organic and inorganic growth, with management revising loan growth projections upward for the year.

The company's non-interest expense increased $1.1 million (0.9%) from Q1 2025 to Q2 2025. Duane Dewey, CEO, mentioned the ongoing focus on expense management and expense control, with a 2024 actual decline in expenses.

Trustmark has demonstrated exceptional credit quality management, with a substantial reduction in criticized and classified loans. The company successfully upgraded $75 million worth of problem credits back to pass status, reflecting strong credit management practices. Forward guidance indicates an expectation for lower credit loss provisions in 2025, suggesting that the bank is confident in its ability to maintain high credit standards and manage risks effectively.

In terms of capital ratios, the CET1 ratio improved seven basis points to 11.7%, and total risk-based capital rose five basis points to 14.15%.

The company repurchased $11 million in common stock in Q2 2025, with $26 million repurchased in the first six months of 2025, and $74 million remaining authorized for 2025. Tom Owens, CFO, expects continued share repurchase of $10 million to $15 million per quarter in 2025.

Total deposits grew by $35 million during Q2 2025. The cost of total deposits declined three basis points sequentially to 1.8% in Q2 2025. Deposit guidance remains in the low-single-digit range for the full year, excluding brokered deposits.

Loans Held for Investment increased by $223 million (1.7%) from Q1 2025 to Q2 2025, with year-to-date growth of $374.8 million (2.9%).

Net income reported at $55.8 million in Q2 2025, with fully diluted EPS of $0.92, up 4.5% from Q1 2025. A quarterly cash dividend of $0.24 per share was declared, payable September 15 to shareholders of record as of September 1.

Looking ahead, Trustmark anticipates an increase in the high-single-digit percentage range for 2025 net interest income. The net interest margin guidance was tightened to a range of 3.77%-3.83% for 2025 (previously 3.75%-3.85% for the full year). There is a Fed rate cut assumption in the NIM guidance, with a cut in September and December of 2025.

In conclusion, Trustmark Corporation's Q2 2025 results demonstrate the company's commitment to growth and profitability. With a focus on strategic expansion, credit management, and expense control, Trustmark is well-positioned for continued success in the second half of 2025 and beyond.

[1] Information sourced from the company's Q2 2025 earnings conference call, which took place on Wednesday, July 23, 2025 at 9:30 a.m. ET. The conference call was attended by Duane Dewey (CEO), Tom Owens (CFO), Barry Harvey (Chief Credit and Operations Officer), and Tom Chambers (Chief Accounting Officer).

1. Trustmark Corporation's net interest income growth, along with the increase in loans held for investment and the subsequent rise in net earnings, showcase the company's strong financial position and strategic investments in business expansion.
2. A disciplined approach to managing deposit costs and loan pricing, combined with a focus on personal-finance management and expense control, will continue to improve Trustmark Corporation's financial outlook.
3. By actively pursuing mergers and acquisitions and investing in strategic markets, Trustmark aims to grow not only organically but also through inorganic means, targeting banks with a specific asset range for potential acquisitions.

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