TRMK Trustmark Corporation

Integrity. Service. Solutions.

These three words are a few of the core values we live by, and the foundation of the trust that our customers and communities have placed in Trustmark for over 133 years. While change is constant, these values are enduring and define who we are as a company and how we serve our customers, communities, shareholders, and one another. We made significant progress across the organization during the year. Loan growth in 2022 was the highest in Trustmark’s history. Credit quality remained strong. Net interest income and the net interest margin increased significantly. Our insurance business posted another record year. We continued to invest in technology, including completing a conversion to a state-of-the-art loan system designed to enhance efficiency and productivity.

Based upon independent customer satisfaction surveys, we are pleased to have been recognized by Forbes as the Best-in-State Bank in Mississippi again in 2022. Additionally, Trustmark was listed among America’s Most Trusted Companies by Newsweek in 2022. We appreciate these accolades, which are a direct reflection of our associates and their desire to provide tailored financial solutions that fit our customers to a T.

With all these positive advancements, our financial results were overshadowed by a settlement that, pending court approval, will resolve all current and potential future claims relating to litigation involving the Stanford Financial Group that began in 2009. While we expressly deny any liability or wrongdoing with respect to this matter, we believe the settlement is in the best interest of Trustmark and our shareholders as it eliminates risk, ongoing expense, and uncertainty. With this matter now behind us, we will focus more intently on the future and the opportunities that are ahead. Trustmark is well-positioned to serve and expand its customer base and create long-term value for shareholders.

Financial Highlights

Trustmark’s net income in 2022 totaled $71.9 million, representing diluted earnings per share of $1.17. Excluding the litigation settlement expense, which reduced net income by $75.6 million,

Trustmark’s net income in 2022 totaled $147.5 million, representing diluted earnings per share of $2.40.

Loan growth in 2022 established a new company record, as loans held for investment (HFI) increased $2.0 billion, or 19.1%, to total $12.2 billion at December 31, 2022. Growth was well-diversified by loan type and geography. Deposits totaled $14.4 billion at year-end 2022, with 28.4% of balances in noninterest-bearing accounts. Trustmark maintained a strong liquidity position as loans HFI represented 84.5% of total deposits at year end 2022.

Trustmark successfully navigated the challenging interest rate and economic environment and continued to achieve significant contributions from our fee-income businesses. Total revenue was $699.9 million in 2022, an increase of 9.31% from 2021. Net interest income (FTE) totaled $507.1 million, resulting in a net interest margin of 3.17%, up 41 basis points from the prior year. Noninterest income totaled $205.1 million in 2022.

Our mortgage banking business posted solid performance given the rising interest rate

environment, producing revenue of $28.3 million during the year while loan production totaled $2.1 billion. We bolstered our commitment to providing opportunities for affordable housing by utilizing our team of Community Lending Specialists and expanding product offerings, including our Advantage suite of products to meet the needs of low-to-moderate income borrowers and communities.

Our insurance business posted another record year, with revenue totaling $53.7 million in 2022, up 10.7% from the prior year. This performance reflects an expanded producer workforce as well as the realization of operational efficiencies from investments in technology and improved processes. Trustmark’s wealth management business produced revenue of $35.0 million. Assets held under management and administration, including brokerage assets, totaled $19.2 billion at year-end 2022, an increase of 6.2% from the prior year. In 2022, Trustmark selectively expanded its salesforce in Birmingham, AL, Jackson, MS, and the Florida Panhandle, as well as its business development efforts in new markets.

Credit Quality

Trustmark experienced record loan growth during the year and credit quality remained strong, reflecting our disciplined underwriting process. Nonperforming assets increased 1% to $68.0 million at December 31, 2022, and net charge-offs represented 0.01% of average loans during the year. Allocation of Trustmark’s $120.2 million allowance for credit losses (ACL) on loans held for investment represented 0.85% of commercial loans and 1.41% of consumer and home mortgage loans, resulting in an allowance for credit losses to total loans held for investment of 0.99% and 399.19% of nonperforming loans, excluding individually evaluated loans at year-end 2022. We believe the ACL is appropriate based upon the inherent risk in the loan portfolio.

Capital Strength

Trustmark’s capital position remained solid, reflecting the strength and diversity of our financial services business. We maintained quarterly cash dividends to shareholders of $0.23 per share, or $0.92 annually. At December 31, 2022, total shareholders’ equity was $1.5 billion, while tangible equity was $1.1 billion, representing 6.27% of tangible assets. All capital ratios continued to significantly exceed levels to be considered “well-capitalized.” During the year, Trustmark repurchased $24.6 million, or approximately 789 thousand shares of its common stock. Our Board of Directors also authorized a stock repurchase program through which $50.0 million of Trustmark’s outstanding shares may be acquired through December 31, 2023.