Trustmark Corporation

Trustmark reported second-quarter net income of $63.5 million and diluted EPS of $1.08. Excluding two non-routine transactions that added $6.9 million, operating net income was $56.7 million and operating diluted EPS was $0.97. Total revenue was $208.2 million, up $5.3 million or 2.6% linked-quarter, and fully tax-equivalent net interest income increased $5 million or 3.1% linked-quarter. Net interest margin was 3.84%, up 3 basis points from the prior quarter. Loans held for investment increased $35.1 million, or 0.3% sequentially, and $448 million, or 3.3%, year-over-year; excluding the mortgage sale, loans increased $109 million, or 0.8%, linked-quarter and $555 million, or 3.9%, year-over-year. Deposits increased $359 million, or 2.3% linked-quarter, and $955 million, or 6.3% year-over-year. Non-interest expense was $134 million, up $1.5 million or 1.2% linked-quarter. Nonperforming assets declined 47.3% to 0.39% of loans held for investment. Net charge-offs were $7.5 million, but excluding the mortgage sale they were $1.2 million, or 0.03% of average loans. The net provision for credit losses was $6 million excluding a $9.2 million release tied to the mortgage sale. For full-year 2026, management reaffirmed expectations for loans and deposits to grow in the mid-single digits, securities to remain stable, NIM to be 3.80% to 3.85%, net interest income to increase in the mid-single digits, provision to normalize more in line with Q1 than Q2, and non-interest income and non-interest expense also to increase in the mid-single digits.

Duane Dewey emphasized that Trustmark made meaningful progress on strategic initiatives and described the quarter as strong despite the operational lift of converting the company’s core deposit and related systems. He said the conversion was a major, 45-year-old core replacement that required “all-hands-on-deck” effort, but should improve customer experience, efficiency, and future flexibility. His tone was upbeat and confident, especially on the benefits of the new platform, AI work, and the company’s ability to consider M&A more actively now that the conversion is behind it.

Joe Bond framed the quarter as a continuation of solid performance, but said the company expects some near-term margin pressure from higher deposit funding costs and promotional campaigns. He reaffirmed the 3.80% to 3.85% NIM guide, noting a forward-curve rate increase expected in September and saying margin pressure in the third quarter should partly reverse later in the year. He also pointed to disciplined capital deployment through buybacks, with $40.9 million repurchased in the first six months of 2026, including $21.1 million in the second quarter, and reaffirmed a $0.25 quarterly dividend.

Analysts focused on whether loan growth can ramp in the second half, and management said pipelines are strong while payoffs, especially in CRE, are the main variable; Barry Harvey said the bank should still hit mid-single-digit loan growth for the year and highlighted $71 million of substandard credits pushed out in the quarter as non-recurring. Questions also centered on NIM and deposit pricing, with management saying deposit costs are likely to rise in the near term but that repricing of fixed-rate loans and securities, plus a September rate move in the forward curve, should help margins later. On expenses and strategy, management said the core conversion should eventually create efficiency gains and that M&A is now more actively in view, though they remain disciplined and selective.