Trustmark : Fourth Quarter 2022 Financial Results Presentation

Fourth Quarter &

Fiscal Year 2022

Financial Results

January 24, 2023

Forward-Looking Statements

Certain statements contained in this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by words such as "may," "hope," "will," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "project," "potential," "seek," "continue," "could," "would," "future" or the negative of those terms or other words of similar meaning. You should read statements that contain these words carefully because they discuss our future expectations or state other "forward-looking" information. These forward-looking statements include, but are not limited to, statements relating to anticipated future operating and financial performance measures, including net interest margin, credit quality, business initiatives, growth opportunities and growth rates, among other things, and encompass any estimate, prediction, expectation, projection, opinion, anticipation, outlook or statement of belief included therein as well as the management assumptions underlying these forward-looking statements. You should be aware that the occurrence of the events described under the caption "Risk Factors" in Trustmark's filings with the Securities and Exchange Commission (SEC) could have an adverse effect on our business, results of operations and financial condition. Should one or more of these risks materialize, or should any such underlying assumptions prove to be significantly different, actual results may vary significantly from those anticipated, estimated, projected or expected. Furthermore, many of these risks and uncertainties are currently amplified by and may continue to be amplified by or may, in the future, be amplified by, the novel coronavirus (COVID-19) pandemic, and also by the effectiveness of varying governmental responses in ameliorating the impact of the pandemic on our customers and the economies where they operate.

Risks that could cause actual results to differ materially from current expectations of Management include, but are not limited to, changes in the level of nonperforming assets and charge-offs, an increase in unemployment levels and slowdowns in economic growth, our ability to manage the impact of the COVID-19 pandemic on our markets, as well as the effectiveness of actions of federal, state and local governments and agencies (including the Board of Governors of the Federal Reserve System (FRB)) to mitigate its spread and economic impact, local, state and national economic and market conditions, conditions in the housing and real estate markets in the regions in which Trustmark operates and the extent and duration of the current volatility in the credit and financial markets, levels of and volatility in crude oil prices, changes in our ability to measure the fair value of assets in our portfolio, material changes in the level and/or volatility of market interest rates, the performance and demand for the products and services we offer, including the level and timing of withdrawals from our deposit accounts, the costs and effects of litigation and of unexpected or adverse outcomes in such litigation, our ability to attract noninterest-bearing deposits and other low-cost funds, competition in loan and deposit pricing, as well as the entry of new competitors into our markets through de novo expansion and acquisitions, economic conditions, including the potential impact of recent heightened levels of inflation and the reactions of the FRB and other governmental departments and agencies in response thereto, the potential impact of issues related to the European financial system and monetary and other governmental actions designed to address credit, securities, and/or commodity markets, the enactment of legislation and changes in existing regulations or enforcement practices or the adoption of new regulations, changes in accounting standards and practices, including changes in the interpretation of existing standards, that affect our consolidated financial statements, changes in consumer spending, borrowings and savings habits, technological changes, changes in the financial performance or condition of our borrowers, changes in our ability to control expenses, greater than expected costs or difficulties related to the integration of acquisitions or new products and lines of business, cyber-attacks and other breaches which could affect our information system security, natural disasters, environmental disasters, pandemics or other health crises, acts of war or terrorism, and other risks described in our filings with the SEC.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Except as required by law, we undertake no obligation to update or revise any of this information, whether as the result of new information, future events or developments or otherwise.

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Financial Highlights

Record loan growth, solid credit quality, and expanding net interest margin reflected in performance

Earnings	•	Loans Held for Investment (HFI) increased $618.0 million, or 5.3%, linked-quarter and
Drivers		$2.0 billion, or 19.1%, year-over-year
•	Deposits totaled $14.4 billion, up 0.1% from the prior quarter and down 4.3% year-
			over-year
		•	Investment securities totaled $3.5 billion, down $82.9 million, or 2.3%, linked-quarter
			as liquidity from maturing securities balances was deployed to fund loan growth
Profitable	•	Revenue totaled $191.8 million in the fourth quarter, up 1.6% linked-quarter; revenue
Revenue		totaled $699.9 million in 2022, an increase of $60.0 million, or 9.3%, from the prior year
	Net interest income (FTE) totaled $150.0 million in the fourth quarter, an increase of
Generation •
			$11.0 million, or 7.9%, linked-quarter and $48.8 million, or 48.2%, year-over-year. In

2022, net interest income (FTE) totaled $507.1 million, up 17.9% from the prior year.

At December 31, 2022

Total Assets	$18.0 billion
Loans (HFI)	$12.2 billion
Total Deposits	$14.4 billion
Banking Centers	169

• Noninterest income totaled $45.2 million in the fourth quarter, representing 23.6% of total revenue. In 2022, noninterest income totaled $205.1 million and represented 29.3% of revenue.

	Expense	•	Total noninterest expense in the fourth quarter was $231.2 million; excluding the
	Manage-		litigation settlement of $100.8 million, noninterest expense was $130.5 million, up
	ment		$3.8 million, or 3.0%, from the prior quarter(1).
	•	Noninterest expense, excluding litigation settlement expense, totaled $502.5 million
			in 2022, an increase of 2.7% from the prior year(1).
	Credit	•	Allowance for credit losses (ACL) represented 399.19% of nonaccrual loans, excluding
	Quality		individually evaluated loans at December 31, 2022
	•	Nonaccrual loans declined 2.9% in the fourth quarter and represented 0.53% of loans
			HFI and loans HFS
		• Nonperforming assets declined 4.1% in the fourth quarter and increased 1.0% from the
			prior year
Capital	•	Maintained strong capital levels with CET1 ratio of 9.74% and total risk-based capital
Manage-		ratio of 11.91%
ment	•	Trustmark did not repurchase any of its common shares in the fourth quarter. In 2022,
			Trustmark repurchased $24.6 million, or approximately 789 thousand shares of

common stock. The Board previously authorized a new stock repurchase program in which up to $50.0 million of outstanding common shares may be acquired through December 31, 2023

• The Board of Directors declared quarterly cash dividend of $0.23 per share

	As		As
	Reported	Adjusted	Reported	Adjusted	Adjusted
	Q4-22	Q4-22(1)	2022	2022(1)	2021(2)
Net Income					$156.6
($ in	($34.1)	$41.5	$71.9	$147.5
millions)
EPS -	($0.56)	$0.68	$1.17	$2.40	$2.49
Diluted
ROAA	(0.76%)	0.93%	0.41%	0.84%	0.92%
ROATE	(12.14%)	14.49%	6.00%	12.12%	11.45%
Dividends /	$0.23	$0.23	$0.92	$0.92	$0.92
Share
TE/TA	6.27%	6.27%	6.27%	6.27%	7.86%

Source: Company reports

1. Please refer to the Earnings Release dated January 24, 2023 and the Consolidated Financial Information, Note 1 - Litigation Settlement and Note 7 - Non-GAAP Financial Measures
2. Please refer to the Earnings Release dated January 24, 2023 and Note 7 - Non-GAAP Financial Measures

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Loans Held for Investment (LHFI) Portfolio

Focus on profitable, credit-disciplined loan growth continued

LHFI				Change
($ in millions)(1)
	12/31/2022		LQ		Y-o-Y
Loans secured by real estate:
Const., land dev. and other land loans	$	1,720	$	72	$	411
Secured by 1-4 family residential prop.		2,776		179		798
Secured by nonfarm, nonresidential prop.		3,279		72		302
Other real estate secured		743		149		16
Commercial and industrial loans		1,821		132		407
Consumer loans		166		3		7
State and other political subdivision loans		1,224		35		78

Loan Portfolio Composition 12/31/22(1)

Other RE, 6%

C&I, 15%	Nonfarm-Nonres,
27%
Consumer, 1%
State & Other
Political Sub. , 10%
Other, 4%

1-4 Residential,

Other loans

476

(24)

(62)

Construction,

23%

Total LHFI

$

12,204

$

618

$ 1,956

Land Dev, 14%

LHFI by Quarter

$12,204

$11,586

$10,945

$10,248 $10,397

Dollar Change:	$149	$548		$641	$618
	Q4-21	Q1-22	Q2-22	Q3-22	Q4-22

Source: Company reports

(1) Numbers and/or percentages may not sum due to rounding.

• Portfolio exhibits diversity by product type, geography, and industry
• Strong growth in the quarter while maintaining excellent credit quality
• Virtually no exposure to regulatory defined higher risk commercial and industrial outstandings and REITs

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Real Estate Secured Loan Portfolio Detail

CRE Portfolio		% of CRE
($ in millions)		Portfolio
	12/31/22
Lots, Development and Unimproved Land	$ 321	7%
1-4 Family Construction	370	8%
Other Construction	1,029	23%
Total Construction, Land Development and	$ 1,720	39%
Other Land Loans
Retail	343	8%
Offices	271	6%
Hotels/Motels	298	7%
Industrial	334	8%
Senior Living	391	9%
Other	374	8%
Total Non-owner Occupied & REITs	$ 2,011	46%
Multi-Family(1)	670	15%
Total CRE	$ 4,401	100%

Source: Company reports

(1) Multi-Family is included in Other Real Estate Secured Loans in Financials

Owner-Occupied NonFarm,		% of Owner-
NonResidential		Occupied
($ in millions)		Portfolio
	12/31/22
Offices	$ 165	13%
Retail	101	8%
Industrial Warehouses	175	14%
Health Care	131	10%
Convenience Stores	137	11%
Nursing Homes/Senior Living	237	19%
Other	322	25%
Total Owner-Occupied	$ 1,268	100%

• Focused on vertical construction with limited exposure to unimproved land and development
• Well-diversifiedproduct and geographical mix
• Relatively balanced between non-owner and owner- occupied portfolios
• Virtually no REIT outstanding ($4.0 million)
• 1-4Residential portfolio is primarily comprised of 15 year or less mortgages and Hybrid ARMs

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