Trustmark Corp (TRMK) SEC Filing 10-K Annual Report for the fiscal year ending Saturday, December 31, 2022

Exhibit 99.1

Trustmark Corporation Announces Fourth Quarter and Fiscal Year 2022 Financial Results

Record Loan Growth, Solid Credit Quality, Expanded Net Interest Margin

JACKSON, Miss. – January 24, 2023 – Trustmark Corporation (NASDAQGS:TRMK) reported a loss of $34.1 million, or $0.56 per diluted share, in the fourth quarter of 2022. As previously disclosed, Trustmark agreed to 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. In the fourth quarter, Trustmark recognized litigation settlement expense of $100.0 million as well as an additional $750 thousand in legal fees, which are included in noninterest expense. The litigation settlement expense reduced fourth quarter net income by $75.6 million, or $1.24 per diluted share. Excluding this expense, Trustmark’s fourth quarter net income totaled $41.5 million, or $0.68 per diluted share. For the full year, Trustmark’s net income totaled $71.9 million, representing diluted earnings per share of $1.17. Excluding the litigation settlement expense, Trustmark’s net income in 2022 totaled $147.5 million, representing diluted earnings per share of $2.40. Please refer to the Consolidated Financial Information, Note 1 – Litigation Settlement and Note 7 – Non-GAAP Financial Measures. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable March 15, 2023, to shareholders of record on March 1, 2023.

2022 Highlights

Duane A. Dewey, President and CEO, commented, “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 were up significantly. Our insurance business posted another record year. We made significant investments in technology, including conversion to a state-of-the-art loan system designed to enhance efficiency and productivity. With all of these positive advancements, our financial results were overshadowed by the litigation settlement. 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 very well-positioned to serve and expand its customer base and create long-term value for shareholders.”

Balance Sheet Management

Loans HFI totaled $12.2 billion at December 31, 2022, reflecting an increase of $618.0 million, or 5.3%, linked-quarter and $2.0 billion, or 19.1%, year-over-year. The linked-quarter growth was broad-based and reflected increases in virtually every category. Trustmark’s loan portfolio remains well-diversified by loan type and geography.

As previously disclosed in the third quarter of 2022, Trustmark initiated a cash flow hedging program under which interest rate swaps convert floating rate loans to fixed rate. The intent of the program is to manage the natural asset sensitivity of Trustmark’s balance sheet. As of December 31, 2022, notional balances totaled $825.0 million with a weighted average receive fixed rate of 3.10%.

Deposits totaled $14.4 billion at December 31, 2022, up $12.5 million, or 0.1%, from the prior quarter and down $649.5 million, or 4.3%, year-over-year. Trustmark continues to maintain a strong liquidity position as loans HFI represented 84.5% of total deposits at year end 2022. Noninterest-bearing deposits represented 28.4% of total deposits at December 31, 2022. Interest-bearing deposit costs totaled 0.71% for the fourth quarter, an increase of 51 basis points linked-quarter. The total cost of interest-bearing liabilities was 1.03% for the fourth quarter of 2022, an increase of 72 basis points from the prior quarter.

During the fourth quarter, Trustmark did not repurchase any of its common shares. During the twelve months ended December 31, 2022, Trustmark repurchased $24.6 million, or approximately 789 thousand of its common shares. As previously announced, Trustmark’s Board of Directors authorized a stock repurchase program effective January 1, 2023, under which $50.0 million of Trustmark’s outstanding shares may be acquired through December 31, 2023. The repurchase program, which is subject to market conditions and management discretion, will continue to be implemented through open market repurchases or privately negotiated transactions. At December 31, 2022, Trustmark’s tangible equity to tangible assets ratio was 6.27%, while the total risk-based capital ratio was 11.91%. Tangible book value per share was $18.11 at December 31, 2022, down 1.5% from the prior quarter.

Credit Quality

Nonaccrual loans totaled $66.0 million at December 31, 2022, a decrease of $2.0 million from the prior quarter and an increase of $3.3 million year-over-year. Other real estate totaled $2.0 million, reflecting a $985 thousand decrease from the prior quarter and a $2.6 million decline from the prior year. Collectively, nonperforming assets totaled $68.0 million, reflecting a linked-quarter decrease of 4.1% and year-over-year increase of 1.0%.