EX-99.1 2 trmk-ex99_1.htm EX-99.1

Exhibit 99.1

| News Release

Trustmark Corporation Announces Fourth Quarter and Fiscal Year 2023 Financial Results

Performance Reflects Continued Loan and Deposit Growth,

Solid Credit Quality, and Diversified Revenue Base

JACKSON, Miss. – January 23, 2024 – Trustmark Corporation (NASDAQGS:TRMK) reported net income of $36.1 million in the fourth quarter of 2023, representing diluted earnings per share of $0.59. For the full year, Trustmark’s net income totaled $165.5 million, representing diluted earnings per share of $2.70. Trustmark’s net income in 2023 produced a return on average tangible equity of 14.04% and a return on average assets of 0.89%. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable March 15, 2024, to shareholders of record on March 1, 2024.

2023 Highlights

•
Loans held for investment (HFI) increased $746.5 million, or 6.1%, in 2023
•
Net charge-offs represented 0.06% of average loans in 2023
•
Deposits increased $1.1 billion, or 7.8%, in 2023
•
Net interest income (FTE) totaled $566.3 million, up 11.7% in 2023 to produce a net interest margin of 3.32%, up 15 basis points from 2022
•
Insurance revenue increased 7.2% while wealth management remained stable
•
Noninterest income totaled $207.0 million and represented 27.2% of total revenue
•
Total revenue increased $60.0 million, or 8.6%, to $759.8 million in 2023
•
Continued technology investments to enhance efficiency and productivity
•
Noninterest expense totaled $537.9 million in 2023; adjusted noninterest expense totaled $527.9 million, up 5.9% from the prior year; please refer to the Consolidated Financial Information Note 7 – Non-GAAP Financial Measures

Duane A. Dewey, President and CEO, commented, “We continued to make significant progress across the organization. Our performance reflected solid loan production and credit quality, and continued deposit growth in an increasingly competitive marketplace. We achieved double-digit growth in net interest income in 2023 while noninterest income continued to expand thanks in part to another record year in our insurance business and commendable results in our banking, mortgage banking and wealth management businesses. We have a tremendous team of associates focused on expanding customer relationships and demonstrating the value Trustmark can provide as their trusted financial partner. Looking forward, we will continue to pursue opportunities to redesign workflows and restructure the organization to further leverage investments in technology that will broaden our reach, enhance the customer experience, and improve efficiency. We remain focused on providing the financial services and advice our customers have come to expect while building long-term value for our shareholders.”

Balance Sheet Management

•
Loans HFI increased $140.3 million, or 1.1%, during the quarter
•
Total deposits increased $467.8 million, or 3.1%, linked-quarter
•
Maintained strong capital position with CET1 ratio of 10.04% and total risk-based capital ratio of 12.29%

Loans HFI totaled $13.0 billion at December 31, 2023, reflecting an increase of $140.3 million, or 1.1%, linked-quarter and $746.5 million, or 6.1%, year-over-year. The linked-quarter growth reflected increases in commercial and industrial loans, other real estate secured loans, other loans and leases, and state and other political subdivision loans offset in part by declines in construction, land development and other land loans, and loans secured by nonfarm, nonresidential properties. Trustmark’s loan portfolio remains well-diversified by loan type and geography.

Deposits totaled $15.6 billion at December 31, 2023, up $467.8 million, or 3.1%, from the prior quarter and up $1.1 billion, or 7.8%, year-over-year. Trustmark continues to maintain a strong liquidity position as loans HFI represented 83.2% of total deposits at year-end 2023. Noninterest-bearing deposits represented 20.5% of total deposits at December 31, 2023. Interest-bearing deposit costs totaled 2.67% for the fourth quarter, an increase of 28 basis points linked-quarter. The total cost of interest-bearing liabilities was 2.89% for the fourth quarter of 2023, an increase of 17 basis points from the prior quarter.

Trustmark did not repurchase any of its common shares in 2023. As previously announced, Trustmark’s Board of Directors authorized a stock repurchase program effective January 1, 2024, under which $50.0 million of Trustmark’s outstanding shares may be acquired through December 31, 2024. 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, 2023, Trustmark’s tangible equity to tangible assets ratio was 6.95%, while the total risk-based capital ratio was 12.29%. Tangible book value per share was $20.87 at December 31, 2023, up 7.7% from the prior quarter and 15.2% from the prior year.

Credit Quality

•
Net charge-offs totaled $2.2 million, representing 0.07% of average loans in the fourth quarter
•
Provision for credit losses for loans HFI was $7.6 million in the fourth quarter
•
Allowance for credit losses (ACL) represented 1.08% of loans HFI and 249.31% of nonperforming loans, excluding individually analyzed loans at year-end

Nonaccrual loans totaled $100.0 million at December 31, 2023, an increase of $9.1 million from the prior quarter and $34.0 million year-over-year. Other real estate totaled $6.9 million, reflecting increases of $1.4 million and $4.9 million from the prior quarter and prior year, respectively. Collectively, nonperforming assets totaled $106.9 million, representing 0.81% of loans HFI and held for sale (HFS) at December 31, 2023.

The provision for credit losses for loans HFI was $7.6 million in the fourth quarter and was primarily attributable to loan growth, net adjustments to the qualitative factors, and changes in the macroeconomic forecast. The provision for credit losses for off-balance sheet credit exposures was a negative $888 thousand in the fourth quarter. Collectively, the provision for credit losses totaled $6.7 million in the fourth quarter compared to $8.4 million in the prior quarter and $12.1 million in the fourth quarter of 2022.

Allocation of Trustmark’s $139.4 million ACL on loans HFI represented 0.85% of commercial loans and 1.81% of consumer and home mortgage loans, resulting in an ACL to total loans HFI of 1.08% at December 31, 2023. Management believes the level of the ACL is commensurate with the credit losses currently expected in the loan portfolio.

Revenue Generation

•
Net interest income (FTE) totaled $140.0 million in the fourth quarter, down 1.3% linked-quarter
•
Net interest margin totaled 3.25% in the fourth quarter, down 4 basis points from the prior quarter
•
Noninterest income totaled $49.8 million, representing 26.7% of total revenue in the fourth quarter

Revenue in the fourth quarter totaled $186.5 million, a decrease of 2.3% from the prior quarter and 2.7% from the same quarter in the prior year. The linked-quarter decrease reflects lower noninterest income and net interest income while the year-over-year decline reflects growth in noninterest income being more than offset by lower net interest income. In 2023, revenue totaled $759.8 million, an increase of 8.6% from the prior year.

Net interest income (FTE) in the fourth quarter totaled $140.0 million, resulting in a net interest margin of 3.25%, down 4 basis points from the prior quarter. The decrease in the net interest margin was primarily due to increased costs of interest-bearing liabilities, which was offset in part by higher yields on the loans HFI and HFS portfolio.

Noninterest income in the fourth quarter totaled $49.8 million, a decrease of $2.4 million from the prior quarter and an increase of $4.6 million from the prior year. The linked-quarter change reflects a seasonal decline in insurance revenue, as well as lower mortgage banking and wealth management revenue. The increase in noninterest income year-over-year was well diversified across all fee-based categories.

Mortgage loan production in the fourth quarter totaled $271.9 million, a decline of 30.3% linked-quarter and 30.4% year-over-year. Mortgage banking revenue totaled $5.5 million in the fourth quarter, a decrease of $939 thousand from the prior quarter and an increase of $2.1 million year-over-year. The linked-quarter decline is attributable to an increase in net negative hedge ineffectiveness. In 2023, mortgage loan production totaled $1.5 billion, down 31.6% from the prior year. Mortgage banking revenue totaled $26.2 million in 2023, down $2.1 million from the prior year.

Insurance revenue in the fourth quarter totaled $13.2 million, a seasonal decline of $2.1 million from the prior quarter and an increase of $1.2 million from the prior year. Insurance revenue in 2023 totaled $57.6 million, up $3.8 million, or 7.2%, from the prior year. The solid performance during the year reflects an expanded producer workforce, a hardening of the insurance market, and the realization of operational efficiencies from investments in technology and improved processes.

Wealth management revenue totaled $8.7 million in the fourth quarter, down 1.3% from the prior quarter and up 7.2% from the prior year. The linked-quarter decline is principally due to reduced trust management revenue offset in part by increased brokerage revenue while the year-over-year change is attributable to increased investment services revenue. In 2023, wealth management revenue totaled $35.1 million, in line with the prior year. During 2023, Trustmark selectively expanded its salesforce in the Houston, Mobile, Jackson, and Florida Panhandle markets.

Noninterest Expense

•
Total noninterest expense in the fourth quarter was $136.4 million; adjusted noninterest expense, which excludes ORE expense, amortization of intangibles, charitable contributions resulting in state tax credits, reduction in force expense, and litigation settlement expense, totaled $134.8 million, up $723 thousand from the prior quarter. Please refer to the Consolidated Financial Information Note 7 – Non-GAAP Financial Measures
•
FDIC assessment expense totaled $4.8 million in the fourth quarter, up $1.1 million, or 28.7%, from the prior quarter

Salaries and employee benefits expense in the fourth quarter totaled $78.0 million, an increase of $1.3 million, or 1.7% from the prior quarter. Excluding reduction in force expense related to restructuring initiatives of $1.4 million, salaries and benefits expense totaled $76.6 million, a decline of $69 thousand from the prior quarter. Total services and fees in the fourth quarter totaled $27.9 million, unchanged from the prior quarter. Net occupancy – premises expense during the fourth quarter totaled $7.4 million, unchanged from the prior quarter. Equipment expense declined 4.4% linked-quarter to total $6.5 million. Other expense increased $943 thousand, or 6.0%, linked-quarter principally due to increased FDIC assessment expense.

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, January 24, 2024, at 8:30 a.m. Central Time to discuss the Corporation’s financial results. Interested parties may listen to the conference call by dialing (877) 317-3051 or by clicking on the link provided under the Investor Relations section of our website at www.trustmark.com. A replay of the conference call will also be available through Wednesday, February 7, 2024, in archived format at the same web address or by calling (877) 344-7529, passcode 6776577.

Trustmark is a financial services company providing banking and financial solutions through offices in Alabama, Florida, Georgia, Mississippi, Tennessee and Texas. Visit trustmark.com for more information.

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.

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, actions by the Board of Governors of the Federal Reserve System (FRB) that impact the level of market interest rates, 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 impacts related to or resulting from recent bank failures and other economic and industry volatility, including potential increased regulatory requirements and costs and potential impacts to macroeconomic conditions, 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 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.

Trustmark Investor Contacts: | Trustmark Media Contact:
Thomas C. Owens | Melanie A. Morgan
Treasurer and | Senior Vice President
Principal Financial Officer | 601-208-2979
601-208-7853 |

F. Joseph Rein, Jr.

Senior Vice President

601-208-6898

|  | TRUSTMARK CORPORATION AND SUBSIDIARIES
| CONSOLIDATED FINANCIAL INFORMATION
| December 31, 2023
| ($ in thousands)
| (unaudited)

|  |  |  |  |  |  |  |  |  | Linked Quarter |  |  | Year over Year |
QUARTERLY AVERAGE BALANCES | 12/31/2023 |  |  | 9/30/2023 |  |  | 12/31/2022 |  |  | $ Change |  |  | % Change |  |  | $ Change |  |  | % Change |
Securities AFS-taxable | $ | 1,986,825 |  |  | $ | 2,049,006 |  |  | $ | 2,572,675 |  |  | $ | (62,181 | ) |  |  | -3.0 | % |  | $ | (585,850 | ) |  |  | -22.8 | %
Securities AFS-nontaxable |  | 4,246 |  |  |  | 4,779 |  |  |  | 4,828 |  |  |  | (533 | ) |  |  | -11.2 | % |  |  | (582 | ) |  |  | -12.1 | %
Securities HTM-taxable |  | 1,430,169 |  |  |  | 1,445,895 |  |  |  | 1,268,952 |  |  |  | (15,726 | ) |  |  | -1.1 | % |  |  | 161,217 |  |  |  | 12.7 | %
Securities HTM-nontaxable |  | 340 |  |  |  | 907 |  |  |  | 4,514 |  |  |  | (567 | ) |  |  | -62.5 | % |  |  | (4,174 | ) |  |  | -92.5 | %
Total securities |  | 3,421,580 |  |  |  | 3,500,587 |  |  |  | 3,850,969 |  |  |  | (79,007 | ) |  |  | -2.3 | % |  |  | (429,389 | ) |  |  | -11.2 | %
Paycheck protection program loans (PPP) |  | — |  |  |  | — |  |  |  | 3,235 |  |  |  | — |  |  | n/m |  |  |  | (3,235 | ) |  |  | -100.0 | %
Loans (includes loans held for sale) |  | 13,010,028 |  |  |  | 12,926,942 |  |  |  | 12,006,661 |  |  |  | 83,086 |  |  |  | 0.6 | % |  |  | 1,003,367 |  |  |  | 8.4 | %
Fed funds sold and reverse repurchases |  | 121 |  |  |  | 230 |  |  |  | 6,566 |  |  |  | (109 | ) |  |  | -47.4 | % |  |  | (6,445 | ) |  |  | -98.2 | %
Other earning assets |  | 670,477 |  |  |  | 682,644 |  |  |  | 375,190 |  |  |  | (12,167 | ) |  |  | -1.8 | % |  |  | 295,287 |  |  |  | 78.7 | %
Total earning assets |  | 17,102,206 |  |  |  | 17,110,403 |  |  |  | 16,242,621 |  |  |  | (8,197 | ) |  |  | 0.0 | % |  |  | 859,585 |  |  |  | 5.3 | %
Allowance for credit losses (ACL), loans held for investment (LHFI) |  | (133,742 | ) |  |  | (127,915 | ) |  |  | (114,948 | ) |  |  | (5,827 | ) |  |  | -4.6 | % |  |  | (18,794 | ) |  |  | -16.4 | %
Other assets |  | 1,749,069 |  |  |  | 1,721,310 |  |  |  | 1,630,085 |  |  |  | 27,759 |  |  |  | 1.6 | % |  |  | 118,984 |  |  |  | 7.3 | %
Total assets | $ | 18,717,533 |  |  | $ | 18,703,798 |  |  | $ | 17,757,758 |  |  | $ | 13,735 |  |  |  | 0.1 | % |  | $ | 959,775 |  |  |  | 5.4 | %
Interest-bearing demand deposits | $ | 5,053,935 |  |  | $ | 4,875,714 |  |  | $ | 4,719,303 |  |  | $ | 178,221 |  |  |  | 3.7 | % |  | $ | 334,632 |  |  |  | 7.1 | %
Savings deposits |  | 3,526,600 |  |  |  | 3,642,158 |  |  |  | 4,379,673 |  |  |  | (115,558 | ) |  |  | -3.2 | % |  |  | (853,073 | ) |  |  | -19.5 | %
Time deposits |  | 3,427,384 |  |  |  | 3,075,224 |  |  |  | 1,152,905 |  |  |  | 352,160 |  |  |  | 11.5 | % |  |  | 2,274,479 |  |  | n/m |
Total interest-bearing deposits |  | 12,007,919 |  |  |  | 11,593,096 |  |  |  | 10,251,881 |  |  |  | 414,823 |  |  |  | 3.6 | % |  |  | 1,756,038 |  |  |  | 17.1 | %
Fed funds purchased and repurchases |  | 403,041 |  |  |  | 414,696 |  |  |  | 549,406 |  |  |  | (11,655 | ) |  |  | -2.8 | % |  |  | (146,365 | ) |  |  | -26.6 | %
Other borrowings |  | 590,765 |  |  |  | 912,151 |  |  |  | 530,993 |  |  |  | (321,386 | ) |  |  | -35.2 | % |  |  | 59,772 |  |  |  | 11.3 | %
Subordinated notes |  | 123,446 |  |  |  | 123,391 |  |  |  | 123,226 |  |  |  | 55 |  |  |  | 0.0 | % |  |  | 220 |  |  |  | 0.2 | %
Junior subordinated debt securities |  | 61,856 |  |  |  | 61,856 |  |  |  | 61,856 |  |  |  | — |  |  |  | 0.0 | % |  |  | — |  |  |  | 0.0 | %
Total interest-bearing liabilities |  | 13,187,027 |  |  |  | 13,105,190 |  |  |  | 11,517,362 |  |  |  | 81,837 |  |  |  | 0.6 | % |  |  | 1,669,665 |  |  |  | 14.5 | %
Noninterest-bearing deposits |  | 3,296,351 |  |  |  | 3,429,815 |  |  |  | 4,177,113 |  |  |  | (133,464 | ) |  |  | -3.9 | % |  |  | (880,762 | ) |  |  | -21.1 | %
Other liabilities |  | 641,662 |  |  |  | 585,908 |  |  |  | 569,992 |  |  |  | 55,754 |  |  |  | 9.5 | % |  |  | 71,670 |  |  |  | 12.6 | %
Total liabilities |  | 17,125,040 |  |  |  | 17,120,913 |  |  |  | 16,264,467 |  |  |  | 4,127 |  |  |  | 0.0 | % |  |  | 860,573 |  |  |  | 5.3 | %
Shareholders' equity |  | 1,592,493 |  |  |  | 1,582,885 |  |  |  | 1,493,291 |  |  |  | 9,608 |  |  |  | 0.6 | % |  |  | 99,202 |  |  |  | 6.6 | %
Total liabilities and equity | $ | 18,717,533 |  |  | $ | 18,703,798 |  |  | $ | 17,757,758 |  |  | $ | 13,735 |  |  |  | 0.1 | % |  | $ | 959,775 |  |  |  | 5.4 | %
n/m - percentage changes greater than +/- 100% are considered not meaningful |  |

See Notes to Consolidated Financials

|  | TRUSTMARK CORPORATION AND SUBSIDIARIES
| CONSOLIDATED FINANCIAL INFORMATION
| December 31, 2023
| ($ in thousands)
| (unaudited)

|  |  |  |  |  |  |  |  |  | Linked Quarter |  |  | Year over Year |
PERIOD END BALANCES | 12/31/2023 |  |  | 9/30/2023 |  |  | 12/31/2022 |  |  | $ Change |  |  | % Change |  |  | $ Change |  |  | % Change |
Cash and due from banks | $ | 975,543 |  |  | $ | 750,492 |  |  | $ | 734,787 |  |  | $ | 225,051 |  |  |  | 30.0 | % |  | $ | 240,756 |  |  |  | 32.8 | %
Fed funds sold and reverse repurchases |  | — |  |  |  | — |  |  |  | 4,000 |  |  |  | — |  |  | n/m |  |  |  | (4,000 | ) |  |  | -100.0 | %
Securities available for sale |  | 1,762,878 |  |  |  | 1,766,174 |  |  |  | 2,024,082 |  |  |  | (3,296 | ) |  |  | -0.2 | % |  |  | (261,204 | ) |  |  | -12.9 | %
Securities held to maturity |  | 1,426,279 |  |  |  | 1,438,287 |  |  |  | 1,494,514 |  |  |  | (12,008 | ) |  |  | -0.8 | % |  |  | (68,235 | ) |  |  | -4.6 | %
PPP loans |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  | n/m |  |  |  | — |  |  | n/m |
Loans held for sale (LHFS) |  | 184,812 |  |  |  | 169,244 |  |  |  | 135,226 |  |  |  | 15,568 |  |  |  | 9.2 | % |  |  | 49,586 |  |  |  | 36.7 | %
Loans held for investment (LHFI) |  | 12,950,524 |  |  |  | 12,810,259 |  |  |  | 12,204,039 |  |  |  | 140,265 |  |  |  | 1.1 | % |  |  | 746,485 |  |  |  | 6.1 | %
ACL LHFI |  | (139,367 | ) |  |  | (134,031 | ) |  |  | (120,214 | ) |  |  | (5,336 | ) |  |  | -4.0 | % |  |  | (19,153 | ) |  |  | -15.9 | %
Net LHFI |  | 12,811,157 |  |  |  | 12,676,228 |  |  |  | 12,083,825 |  |  |  | 134,929 |  |  |  | 1.1 | % |  |  | 727,332 |  |  |  | 6.0 | %
Premises and equipment, net |  | 232,537 |  |  |  | 230,718 |  |  |  | 212,365 |  |  |  | 1,819 |  |  |  | 0.8 | % |  |  | 20,172 |  |  |  | 9.5 | %
Mortgage servicing rights |  | 131,870 |  |  |  | 142,379 |  |  |  | 129,677 |  |  |  | (10,509 | ) |  |  | -7.4 | % |  |  | 2,193 |  |  |  | 1.7 | %
Goodwill |  | 384,237 |  |  |  | 384,237 |  |  |  | 384,237 |  |  |  | — |  |  |  | 0.0 | % |  |  | — |  |  |  | 0.0 | %
Identifiable intangible assets |  | 2,965 |  |  |  | 3,093 |  |  |  | 3,640 |  |  |  | (128 | ) |  |  | -4.1 | % |  |  | (675 | ) |  |  | -18.5 | %
Other real estate |  | 6,867 |  |  |  | 5,485 |  |  |  | 1,986 |  |  |  | 1,382 |  |  |  | 25.2 | % |  |  | 4,881 |  |  | n/m |
Operating lease right-of-use assets |  | 38,142 |  |  |  | 39,639 |  |  |  | 36,301 |  |  |  | (1,497 | ) |  |  | -3.8 | % |  |  | 1,841 |  |  |  | 5.1 | %
Other assets |  | 764,902 |  |  |  | 784,863 |  |  |  | 770,838 |  |  |  | (19,961 | ) |  |  | -2.5 | % |  |  | (5,936 | ) |  |  | -0.8 | %
Total assets | $ | 18,722,189 |  |  | $ | 18,390,839 |  |  | $ | 18,015,478 |  |  | $ | 331,350 |  |  |  | 1.8 | % |  | $ | 706,711 |  |  |  | 3.9 | %
Deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noninterest-bearing | $ | 3,197,620 |  |  | $ | 3,320,124 |  |  | $ | 4,093,771 |  |  | $ | (122,504 | ) |  |  | -3.7 | % |  | $ | (896,151 | ) |  |  | -21.9 | %
Interest-bearing |  | 12,372,143 |  |  |  | 11,781,799 |  |  |  | 10,343,877 |  |  |  | 590,344 |  |  |  | 5.0 | % |  |  | 2,028,266 |  |  |  | 19.6 | %
Total deposits |  | 15,569,763 |  |  |  | 15,101,923 |  |  |  | 14,437,648 |  |  |  | 467,840 |  |  |  | 3.1 | % |  |  | 1,132,115 |  |  |  | 7.8 | %
Fed funds purchased and repurchases |  | 405,745 |  |  |  | 321,799 |  |  |  | 449,331 |  |  |  | 83,946 |  |  |  | 26.1 | % |  |  | (43,586 | ) |  |  | -9.7 | %
Other borrowings |  | 483,230 |  |  |  | 793,193 |  |  |  | 1,050,938 |  |  |  | (309,963 | ) |  |  | -39.1 | % |  |  | (567,708 | ) |  |  | -54.0 | %
Subordinated notes |  | 123,482 |  |  |  | 123,427 |  |  |  | 123,262 |  |  |  | 55 |  |  |  | 0.0 | % |  |  | 220 |  |  |  | 0.2 | %
Junior subordinated debt securities |  | 61,856 |  |  |  | 61,856 |  |  |  | 61,856 |  |  |  | — |  |  |  | 0.0 | % |  |  | — |  |  |  | 0.0 | %
ACL on off-balance sheet credit exposures |  | 34,057 |  |  |  | 34,945 |  |  |  | 36,838 |  |  |  | (888 | ) |  |  | -2.5 | % |  |  | (2,781 | ) |  |  | -7.5 | %
Operating lease liabilities |  | 41,584 |  |  |  | 42,730 |  |  |  | 38,932 |  |  |  | (1,146 | ) |  |  | -2.7 | % |  |  | 2,652 |  |  |  | 6.8 | %
Other liabilities |  | 340,625 |  |  |  | 340,615 |  |  |  | 324,405 |  |  |  | 10 |  |  |  | 0.0 | % |  |  | 16,220 |  |  |  | 5.0 | %
Total liabilities |  | 17,060,342 |  |  |  | 16,820,488 |  |  |  | 16,523,210 |  |  |  | 239,854 |  |  |  | 1.4 | % |  |  | 537,132 |  |  |  | 3.3 | %
Common stock |  | 12,725 |  |  |  | 12,724 |  |  |  | 12,705 |  |  |  | 1 |  |  |  | 0.0 | % |  |  | 20 |  |  |  | 0.2 | %
Capital surplus |  | 159,688 |  |  |  | 158,316 |  |  |  | 154,645 |  |  |  | 1,372 |  |  |  | 0.9 | % |  |  | 5,043 |  |  |  | 3.3 | %
Retained earnings |  | 1,709,157 |  |  |  | 1,687,199 |  |  |  | 1,600,321 |  |  |  | 21,958 |  |  |  | 1.3 | % |  |  | 108,836 |  |  |  | 6.8 | %
Accumulated other comprehensive income (loss), net of tax |  | (219,723 | ) |  |  | (287,888 | ) |  |  | (275,403 | ) |  |  | 68,165 |  |  |  | 23.7 | % |  |  | 55,680 |  |  |  | 20.2 | %
Total shareholders' equity |  | 1,661,847 |  |  |  | 1,570,351 |  |  |  | 1,492,268 |  |  |  | 91,496 |  |  |  | 5.8 | % |  |  | 169,579 |  |  |  | 11.4 | %
Total liabilities and equity | $ | 18,722,189 |  |  | $ | 18,390,839 |  |  | $ | 18,015,478 |  |  | $ | 331,350 |  |  |  | 1.8 | % |  | $ | 706,711 |  |  |  | 3.9 | %
n/m - percentage changes greater than +/- 100% are considered not meaningful |  |

See Notes to Consolidated Financials

|  | TRUSTMARK CORPORATION AND SUBSIDIARIES
| CONSOLIDATED FINANCIAL INFORMATION
| December 31, 2023
| ($ in thousands except per share data)
| (unaudited)

| Quarter Ended |  |  | Linked Quarter |  |  | Year over Year |
INCOME STATEMENTS | 12/31/2023 |  |  | 9/30/2023 |  |  | 12/31/2022 |  |  | $ Change |  |  | % Change |  |  | $ Change |  |  | % Change |
Interest and fees on LHFS & LHFI-FTE | $ | 210,288 |  |  | $ | 206,523 |  |  | $ | 159,566 |  |  | $ | 3,765 |  |  |  | 1.8 | % |  | $ | 50,722 |  |  |  | 31.8 | %
Interest and fees on PPP loans |  | — |  |  |  | — |  |  |  | 101 |  |  |  | — |  |  | n/m |  |  |  | (101 | ) |  |  | -100.0 | %
Interest on securities-taxable |  | 15,936 |  |  |  | 16,624 |  |  |  | 16,577 |  |  |  | (688 | ) |  |  | -4.1 | % |  |  | (641 | ) |  |  | -3.9 | %
Interest on securities-tax exempt-FTE |  | 44 |  |  |  | 58 |  |  |  | 93 |  |  |  | (14 | ) |  |  | -24.1 | % |  |  | (49 | ) |  |  | -52.7 | %
Interest on fed funds sold and reverse repurchases |  | 2 |  |  |  | 3 |  |  |  | 71 |  |  |  | (1 | ) |  |  | -33.3 | % |  |  | (69 | ) |  |  | -97.2 | %
Other interest income |  | 9,918 |  |  |  | 8,613 |  |  |  | 3,556 |  |  |  | 1,305 |  |  |  | 15.2 | % |  |  | 6,362 |  |  | n/m |
Total interest income-FTE |  | 236,188 |  |  |  | 231,821 |  |  |  | 179,964 |  |  |  | 4,367 |  |  |  | 1.9 | % |  |  | 56,224 |  |  |  | 31.2 | %
Interest on deposits |  | 80,847 |  |  |  | 69,797 |  |  |  | 18,438 |  |  |  | 11,050 |  |  |  | 15.8 | % |  |  | 62,409 |  |  | n/m |
Interest on fed funds purchased and repurchases |  | 5,347 |  |  |  | 5,375 |  |  |  | 4,762 |  |  |  | (28 | ) |  |  | -0.5 | % |  |  | 585 |  |  |  | 12.3 | %
Other interest expense |  | 9,946 |  |  |  | 14,713 |  |  |  | 6,730 |  |  |  | (4,767 | ) |  |  | -32.4 | % |  |  | 3,216 |  |  |  | 47.8 | %
Total interest expense |  | 96,140 |  |  |  | 89,885 |  |  |  | 29,930 |  |  |  | 6,255 |  |  |  | 7.0 | % |  |  | 66,210 |  |  | n/m |
Net interest income-FTE |  | 140,048 |  |  |  | 141,936 |  |  |  | 150,034 |  |  |  | (1,888 | ) |  |  | -1.3 | % |  |  | (9,986 | ) |  |  | -6.7 | %
Provision for credit losses, LHFI |  | 7,585 |  |  |  | 8,322 |  |  |  | 6,902 |  |  |  | (737 | ) |  |  | -8.9 | % |  |  | 683 |  |  |  | 9.9 | %
Provision for credit losses, off-balance sheet credit exposures |  | (888 | ) |  |  | 104 |  |  |  | 5,215 |  |  |  | (992 | ) |  | n/m |  |  |  | (6,103 | ) |  | n/m |
Net interest income after provision-FTE |  | 133,351 |  |  |  | 133,510 |  |  |  | 137,917 |  |  |  | (159 | ) |  |  | -0.1 | % |  |  | (4,566 | ) |  |  | -3.3 | %
Service charges on deposit accounts |  | 11,311 |  |  |  | 11,074 |  |  |  | 11,162 |  |  |  | 237 |  |  |  | 2.1 | % |  |  | 149 |  |  |  | 1.3 | %
Bank card and other fees |  | 8,502 |  |  |  | 8,217 |  |  |  | 8,191 |  |  |  | 285 |  |  |  | 3.5 | % |  |  | 311 |  |  |  | 3.8 | %
Mortgage banking, net |  | 5,519 |  |  |  | 6,458 |  |  |  | 3,408 |  |  |  | (939 | ) |  |  | -14.5 | % |  |  | 2,111 |  |  |  | 61.9 | %
Insurance commissions |  | 13,197 |  |  |  | 15,303 |  |  |  | 12,019 |  |  |  | (2,106 | ) |  |  | -13.8 | % |  |  | 1,178 |  |  |  | 9.8 | %
Wealth management |  | 8,657 |  |  |  | 8,773 |  |  |  | 8,079 |  |  |  | (116 | ) |  |  | -1.3 | % |  |  | 578 |  |  |  | 7.2 | %
Other, net |  | 2,579 |  |  |  | 2,399 |  |  |  | 2,311 |  |  |  | 180 |  |  |  | 7.5 | % |  |  | 268 |  |  |  | 11.6 | %
Securities gains (losses), net |  | 39 |  |  |  | — |  |  |  | — |  |  |  | 39 |  |  | n/m |  |  |  | 39 |  |  | n/m |
Total noninterest income |  | 49,804 |  |  |  | 52,224 |  |  |  | 45,170 |  |  |  | (2,420 | ) |  |  | -4.6 | % |  |  | 4,634 |  |  |  | 10.3 | %
Salaries and employee benefits |  | 78,003 |  |  |  | 76,666 |  |  |  | 73,469 |  |  |  | 1,337 |  |  |  | 1.7 | % |  |  | 4,534 |  |  |  | 6.2 | %
Services and fees (2) |  | 27,906 |  |  |  | 27,882 |  |  |  | 27,709 |  |  |  | 24 |  |  |  | 0.1 | % |  |  | 197 |  |  |  | 0.7 | %
Net occupancy-premises |  | 7,362 |  |  |  | 7,383 |  |  |  | 7,898 |  |  |  | (21 | ) |  |  | -0.3 | % |  |  | (536 | ) |  |  | -6.8 | %
Equipment expense |  | 6,517 |  |  |  | 6,816 |  |  |  | 6,268 |  |  |  | (299 | ) |  |  | -4.4 | % |  |  | 249 |  |  |  | 4.0 | %
Litigation settlement expense (1) |  | — |  |  |  | 6,500 |  |  |  | 100,750 |  |  |  | (6,500 | ) |  |  | -100.0 | % |  |  | (100,750 | ) |  |  | -100.0 | %
Other expense (2) |  | 16,641 |  |  |  | 15,698 |  |  |  | 15,135 |  |  |  | 943 |  |  |  | 6.0 | % |  |  | 1,506 |  |  |  | 10.0 | %
Total noninterest expense |  | 136,429 |  |  |  | 140,945 |  |  |  | 231,229 |  |  |  | (4,516 | ) |  |  | -3.2 | % |  |  | (94,800 | ) |  |  | -41.0 | %
Income (loss) before income taxes and tax eq adj |  | 46,726 |  |  |  | 44,789 |  |  |  | (48,142 | ) |  |  | 1,937 |  |  |  | 4.3 | % |  |  | 94,868 |  |  | n/m |
Tax equivalent adjustment |  | 3,306 |  |  |  | 3,299 |  |  |  | 3,451 |  |  |  | 7 |  |  |  | 0.2 | % |  |  | (145 | ) |  |  | -4.2 | %
Income (loss) before income taxes |  | 43,420 |  |  |  | 41,490 |  |  |  | (51,593 | ) |  |  | 1,930 |  |  |  | 4.7 | % |  |  | 95,013 |  |  | n/m |
Income taxes |  | 7,297 |  |  |  | 7,461 |  |  |  | (17,530 | ) |  |  | (164 | ) |  |  | -2.2 | % |  |  | 24,827 |  |  | n/m |
Net income (loss) | $ | 36,123 |  |  | $ | 34,029 |  |  | $ | (34,063 | ) |  | $ | 2,094 |  |  |  | 6.2 | % |  | $ | 70,186 |  |  | n/m |
Per share data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Earnings (loss) per share - basic | $ | 0.59 |  |  | $ | 0.56 |  |  | $ | (0.56 | ) |  | $ | 0.03 |  |  |  | 5.4 | % |  | $ | 1.15 |  |  | n/m |
Earnings (loss) per share - diluted | $ | 0.59 |  |  | $ | 0.56 |  |  | $ | (0.56 | ) |  | $ | 0.03 |  |  |  | 5.4 | % |  | $ | 1.15 |  |  | n/m |
Dividends per share | $ | 0.23 |  |  | $ | 0.23 |  |  | $ | 0.23 |  |  |  | — |  |  |  | 0.0 | % |  |  | — |  |  |  | 0.0 | %
Weighted average shares outstanding |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | 61,070,481 |  |  |  | 61,069,750 |  |  |  | 60,969,400 |  |  |  |  |  |  |  |  |  |  |  |  |
Diluted |  | 61,296,840 |  |  |  | 61,263,032 |  |  |  | 61,173,249 |  |  |  |  |  |  |  |  |  |  |  |  |
Period end shares outstanding |  | 61,071,173 |  |  |  | 61,070,095 |  |  |  | 60,977,686 |  |  |  |  |  |  |  |  |  |  |  |  |
(1) See Note 1 - Litigation Settlement in the Notes to Consolidated Financials for additional information. |  |  |  |  |
(2) During the first quarter of 2023, Trustmark reclassified its debit card transaction fees from other expense to services and fees. Prior periods have been reclassified accordingly. |  |  |  |  |  |  |
n/m - percentage changes greater than +/- 100% are considered not meaningful |

See Notes to Consolidated Financials

|  | TRUSTMARK CORPORATION AND SUBSIDIARIES
| CONSOLIDATED FINANCIAL INFORMATION
| December 31, 2023
| ($ in thousands)
| (unaudited)

| Quarter Ended |  |  | Linked Quarter |  |  | Year over Year |
NONPERFORMING ASSETS (1) | 12/31/2023 |  |  | 9/30/2023 |  |  | 12/31/2022 |  |  | $ Change |  |  | % Change |  |  | $ Change |  |  | % Change |
Nonaccrual LHFI |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Alabama (2) | $ | 23,271 |  |  | $ | 23,530 |  |  | $ | 12,300 |  |  | $ | (259 | ) |  |  | -1.1 | % |  | $ | 10,971 |  |  |  | 89.2 | %
Florida |  | 170 |  |  |  | 151 |  |  |  | 227 |  |  |  | 19 |  |  |  | 12.6 | % |  |  | (57 | ) |  |  | -25.1 | %
Mississippi (3) |  | 54,615 |  |  |  | 45,050 |  |  |  | 24,683 |  |  |  | 9,565 |  |  |  | 21.2 | % |  |  | 29,932 |  |  | n/m |
Tennessee (4) |  | 1,802 |  |  |  | 1,841 |  |  |  | 5,566 |  |  |  | (39 | ) |  |  | -2.1 | % |  |  | (3,764 | ) |  |  | -67.6 | %
Texas |  | 20,150 |  |  |  | 20,327 |  |  |  | 23,196 |  |  |  | (177 | ) |  |  | -0.9 | % |  |  | (3,046 | ) |  |  | -13.1 | %
Total nonaccrual LHFI |  | 100,008 |  |  |  | 90,899 |  |  |  | 65,972 |  |  |  | 9,109 |  |  |  | 10.0 | % |  |  | 34,036 |  |  |  | 51.6 | %
Other real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Alabama (2) |  | 1,397 |  |  |  | 315 |  |  |  | 194 |  |  |  | 1,082 |  |  | n/m |  |  |  | 1,203 |  |  | n/m |
Mississippi (3) |  | 1,242 |  |  |  | 942 |  |  |  | 1,769 |  |  |  | 300 |  |  |  | 31.8 | % |  |  | (527 | ) |  |  | -29.8 | %
Tennessee (4) |  | — |  |  |  | — |  |  |  | 23 |  |  |  | — |  |  | n/m |  |  |  | (23 | ) |  |  | -100.0 | %
Texas |  | 4,228 |  |  |  | 4,228 |  |  |  | — |  |  |  | — |  |  |  | 0.0 | % |  |  | 4,228 |  |  | n/m |
Total other real estate |  | 6,867 |  |  |  | 5,485 |  |  |  | 1,986 |  |  |  | 1,382 |  |  |  | 25.2 | % |  |  | 4,881 |  |  | n/m |
Total nonperforming assets | $ | 106,875 |  |  | $ | 96,384 |  |  | $ | 67,958 |  |  | $ | 10,491 |  |  |  | 10.9 | % |  | $ | 38,917 |  |  |  | 57.3 | %
LOANS PAST DUE OVER 90 DAYS (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
LHFI | $ | 5,790 |  |  | $ | 3,804 |  |  | $ | 3,929 |  |  | $ | 1,986 |  |  |  | 52.2 | % |  | $ | 1,861 |  |  |  | 47.4 | %
LHFS-Guaranteed GNMA serviced loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(no obligation to repurchase) | $ | 51,243 |  |  | $ | 42,532 |  |  | $ | 49,320 |  |  | $ | 8,711 |  |  |  | 20.5 | % |  | $ | 1,923 |  |  |  | 3.9 | %
| Quarter Ended |  |  | Linked Quarter |  |  | Year over Year |
ACL LHFI (1) | 12/31/2023 |  |  | 9/30/2023 |  |  | 12/31/2022 |  |  | $ Change |  |  | % Change |  |  | $ Change |  |  | % Change |
Beginning Balance | $ | 134,031 |  |  | $ | 129,298 |  |  | $ | 115,050 |  |  | $ | 4,733 |  |  |  | 3.7 | % |  | $ | 18,981 |  |  |  | 16.5 | %
Provision for credit losses, LHFI |  | 7,585 |  |  |  | 8,322 |  |  |  | 6,902 |  |  |  | (737 | ) |  |  | -8.9 | % |  |  | 683 |  |  |  | 9.9 | %
Charge-offs |  | (4,250 | ) |  |  | (7,496 | ) |  |  | (3,893 | ) |  |  | 3,246 |  |  |  | 43.3 | % |  |  | (357 | ) |  |  | -9.2 | %
Recoveries |  | 2,001 |  |  |  | 3,907 |  |  |  | 2,155 |  |  |  | (1,906 | ) |  |  | -48.8 | % |  |  | (154 | ) |  |  | -7.1 | %
Net (charge-offs) recoveries |  | (2,249 | ) |  |  | (3,589 | ) |  |  | (1,738 | ) |  |  | 1,340 |  |  |  | 37.3 | % |  |  | (511 | ) |  |  | -29.4 | %
Ending Balance | $ | 139,367 |  |  | $ | 134,031 |  |  | $ | 120,214 |  |  | $ | 5,336 |  |  |  | 4.0 | % |  | $ | 19,153 |  |  |  | 15.9 | %
NET (CHARGE-OFFS) RECOVERIES (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Alabama (2) | $ | (299 | ) |  | $ | (165 | ) |  | $ | 98 |  |  | $ | (134 | ) |  |  | -81.2 | % |  | $ | (397 | ) |  | n/m |
Florida |  | 180 |  |  |  | 21 |  |  |  | (60 | ) |  |  | 159 |  |  | n/m |  |  |  | 240 |  |  | n/m |
Mississippi (3) |  | (1,943 | ) |  |  | (1,867 | ) |  |  | (1,657 | ) |  |  | (76 | ) |  |  | -4.1 | % |  |  | (286 | ) |  |  | -17.3 | %
Tennessee (4) |  | (193 | ) |  |  | 2,127 |  |  |  | (195 | ) |  |  | (2,320 | ) |  | n/m |  |  |  | 2 |  |  |  | -1.0 | %
Texas |  | 6 |  |  |  | (3,705 | ) |  |  | 76 |  |  |  | 3,711 |  |  | n/m |  |  |  | (70 | ) |  |  | -92.1 | %
Total net (charge-offs) recoveries | $ | (2,249 | ) |  | $ | (3,589 | ) |  | $ | (1,738 | ) |  | $ | 1,340 |  |  |  | 37.3 | % |  | $ | (511 | ) |  |  | -29.4 | %
(1) Excludes PPP loans. |  |  |  |
(2) Alabama includes the Georgia Loan Production Office. |  |  |  |
(3) Mississippi includes Central and Southern Mississippi Regions. |  |  |  |
(4) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions. |  |  |  |
n/m - percentage changes greater than +/- 100% are considered not meaningful |  |  |  |

See Notes to Consolidated Financials

|  | TRUSTMARK CORPORATION AND SUBSIDIARIES
| CONSOLIDATED FINANCIAL INFORMATION
| December 31, 2023
| ($ in thousands)
| (unaudited)

|  | Quarter Ended |  |  | Year Ended |
AVERAGE BALANCES |  | 12/31/2023 |  |  | 9/30/2023 |  |  | 6/30/2023 |  |  | 3/31/2023 |  |  | 12/31/2022 |  |  | 12/31/2023 |  |  | 12/31/2022 |
Securities AFS-taxable |  | $ | 1,986,825 |  |  | $ | 2,049,006 |  |  | $ | 2,140,505 |  |  | $ | 2,187,121 |  |  | $ | 2,572,675 |  |  | $ | 2,090,201 |  |  | $ | 2,932,054 |
Securities AFS-nontaxable |  |  | 4,246 |  |  |  | 4,779 |  |  |  | 4,796 |  |  |  | 4,812 |  |  |  | 4,828 |  |  |  | 4,657 |  |  |  | 4,997 |
Securities HTM-taxable |  |  | 1,430,169 |  |  |  | 1,445,895 |  |  |  | 1,463,086 |  |  |  | 1,479,283 |  |  |  | 1,268,952 |  |  |  | 1,454,450 |  |  |  | 911,010 |
Securities HTM-nontaxable |  |  | 340 |  |  |  | 907 |  |  |  | 1,718 |  |  |  | 4,509 |  |  |  | 4,514 |  |  |  | 1,854 |  |  |  | 5,623 |
Total securities |  |  | 3,421,580 |  |  |  | 3,500,587 |  |  |  | 3,610,105 |  |  |  | 3,675,725 |  |  |  | 3,850,969 |  |  |  | 3,551,162 |  |  |  | 3,853,684 |
PPP loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,235 |  |  |  | — |  |  |  | 14,868 |
Loans (includes loans held for sale) |  |  | 13,010,028 |  |  |  | 12,926,942 |  |  |  | 12,732,057 |  |  |  | 12,530,449 |  |  |  | 12,006,661 |  |  |  | 12,801,531 |  |  |  | 11,236,388 |
Fed funds sold and reverse repurchases |  |  | 121 |  |  |  | 230 |  |  |  | 3,275 |  |  |  | 2,379 |  |  |  | 6,566 |  |  |  | 1,492 |  |  |  | 1,753 |
Other earning assets |  |  | 670,477 |  |  |  | 682,644 |  |  |  | 903,027 |  |  |  | 647,760 |  |  |  | 375,190 |  |  |  | 728,181 |  |  |  | 907,414 |
Total earning assets |  |  | 17,102,206 |  |  |  | 17,110,403 |  |  |  | 17,248,464 |  |  |  | 16,856,313 |  |  |  | 16,242,621 |  |  |  | 17,082,366 |  |  |  | 16,014,107 |
ACL LHFI |  |  | (133,742 | ) |  |  | (127,915 | ) |  |  | (121,960 | ) |  |  | (119,978 | ) |  |  | (114,948 | ) |  |  | (125,942 | ) |  |  | (104,138 | )
Other assets |  |  | 1,749,069 |  |  |  | 1,721,310 |  |  |  | 1,648,583 |  |  |  | 1,762,449 |  |  |  | 1,630,085 |  |  |  | 1,718,058 |  |  |  | 1,567,921 |
Total assets |  | $ | 18,717,533 |  |  | $ | 18,703,798 |  |  | $ | 18,775,087 |  |  | $ | 18,498,784 |  |  | $ | 17,757,758 |  |  | $ | 18,674,482 |  |  | $ | 17,477,890 |
Interest-bearing demand deposits |  | $ | 5,053,935 |  |  | $ | 4,875,714 |  |  | $ | 4,803,737 |  |  | $ | 4,751,154 |  |  | $ | 4,719,303 |  |  | $ | 4,871,977 |  |  | $ | 4,585,955 |
Savings deposits |  |  | 3,526,600 |  |  |  | 3,642,158 |  |  |  | 4,002,134 |  |  |  | 4,193,764 |  |  |  | 4,379,673 |  |  |  | 3,838,791 |  |  |  | 4,579,742 |
Time deposits |  |  | 3,427,384 |  |  |  | 3,075,224 |  |  |  | 2,335,752 |  |  |  | 1,907,449 |  |  |  | 1,152,905 |  |  |  | 2,691,682 |  |  |  | 1,153,983 |
Total interest-bearing deposits |  |  | 12,007,919 |  |  |  | 11,593,096 |  |  |  | 11,141,623 |  |  |  | 10,852,367 |  |  |  | 10,251,881 |  |  |  | 11,402,450 |  |  |  | 10,319,680 |
Fed funds purchased and repurchases |  |  | 403,041 |  |  |  | 414,696 |  |  |  | 389,834 |  |  |  | 436,535 |  |  |  | 549,406 |  |  |  | 410,945 |  |  |  | 283,328 |
Other borrowings |  |  | 590,765 |  |  |  | 912,151 |  |  |  | 1,330,010 |  |  |  | 1,110,843 |  |  |  | 530,993 |  |  |  | 984,315 |  |  |  | 198,672 |
Subordinated notes |  |  | 123,446 |  |  |  | 123,391 |  |  |  | 123,337 |  |  |  | 123,281 |  |  |  | 123,226 |  |  |  | 123,364 |  |  |  | 123,144 |
Junior subordinated debt securities |  |  | 61,856 |  |  |  | 61,856 |  |  |  | 61,856 |  |  |  | 61,856 |  |  |  | 61,856 |  |  |  | 61,856 |  |  |  | 61,856 |
Total interest-bearing liabilities |  |  | 13,187,027 |  |  |  | 13,105,190 |  |  |  | 13,046,660 |  |  |  | 12,584,882 |  |  |  | 11,517,362 |  |  |  | 12,982,930 |  |  |  | 10,986,680 |
Noninterest-bearing deposits |  |  | 3,296,351 |  |  |  | 3,429,815 |  |  |  | 3,595,927 |  |  |  | 3,813,248 |  |  |  | 4,177,113 |  |  |  | 3,532,134 |  |  |  | 4,452,046 |
Other liabilities |  |  | 641,662 |  |  |  | 585,908 |  |  |  | 552,209 |  |  |  | 576,826 |  |  |  | 569,992 |  |  |  | 589,320 |  |  |  | 434,310 |
Total liabilities |  |  | 17,125,040 |  |  |  | 17,120,913 |  |  |  | 17,194,796 |  |  |  | 16,974,956 |  |  |  | 16,264,467 |  |  |  | 17,104,384 |  |  |  | 15,873,036 |
Shareholders' equity |  |  | 1,592,493 |  |  |  | 1,582,885 |  |  |  | 1,580,291 |  |  |  | 1,523,828 |  |  |  | 1,493,291 |  |  |  | 1,570,098 |  |  |  | 1,604,854 |
Total liabilities and equity |  | $ | 18,717,533 |  |  | $ | 18,703,798 |  |  | $ | 18,775,087 |  |  | $ | 18,498,784 |  |  | $ | 17,757,758 |  |  | $ | 18,674,482 |  |  | $ | 17,477,890 |

See Notes to Consolidated Financials

|  | TRUSTMARK CORPORATION AND SUBSIDIARIES
| CONSOLIDATED FINANCIAL INFORMATION
| December 31, 2023
| ($ in thousands)
| (unaudited)

PERIOD END BALANCES |  | 12/31/2023 |  |  | 9/30/2023 |  |  | 6/30/2023 |  |  | 3/31/2023 |  |  | 12/31/2022 |  |  |  |  |
Cash and due from banks |  | $ | 975,543 |  |  | $ | 750,492 |  |  | $ | 832,052 |  |  | $ | 1,297,144 |  |  | $ | 734,787 |  |  |  |  |
Fed funds sold and reverse repurchases |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,000 |  |  |  |  |
Securities available for sale |  |  | 1,762,878 |  |  |  | 1,766,174 |  |  |  | 1,871,883 |  |  |  | 1,984,162 |  |  |  | 2,024,082 |  |  |  |  |
Securities held to maturity |  |  | 1,426,279 |  |  |  | 1,438,287 |  |  |  | 1,458,665 |  |  |  | 1,474,338 |  |  |  | 1,494,514 |  |  |  |  |
PPP loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  |  |
LHFS |  |  | 184,812 |  |  |  | 169,244 |  |  |  | 181,094 |  |  |  | 175,926 |  |  |  | 135,226 |  |  |  |  |
LHFI |  |  | 12,950,524 |  |  |  | 12,810,259 |  |  |  | 12,613,967 |  |  |  | 12,497,195 |  |  |  | 12,204,039 |  |  |  |  |
ACL LHFI |  |  | (139,367 | ) |  |  | (134,031 | ) |  |  | (129,298 | ) |  |  | (122,239 | ) |  |  | (120,214 | ) |  |  |  |
Net LHFI |  |  | 12,811,157 |  |  |  | 12,676,228 |  |  |  | 12,484,669 |  |  |  | 12,374,956 |  |  |  | 12,083,825 |  |  |  |  |
Premises and equipment, net |  |  | 232,537 |  |  |  | 230,718 |  |  |  | 227,630 |  |  |  | 223,975 |  |  |  | 212,365 |  |  |  |  |
Mortgage servicing rights |  |  | 131,870 |  |  |  | 142,379 |  |  |  | 134,350 |  |  |  | 127,206 |  |  |  | 129,677 |  |  |  |  |
Goodwill |  |  | 384,237 |  |  |  | 384,237 |  |  |  | 384,237 |  |  |  | 384,237 |  |  |  | 384,237 |  |  |  |  |
Identifiable intangible assets |  |  | 2,965 |  |  |  | 3,093 |  |  |  | 3,222 |  |  |  | 3,352 |  |  |  | 3,640 |  |  |  |  |
Other real estate |  |  | 6,867 |  |  |  | 5,485 |  |  |  | 1,137 |  |  |  | 1,684 |  |  |  | 1,986 |  |  |  |  |
Operating lease right-of-use assets |  |  | 38,142 |  |  |  | 39,639 |  |  |  | 38,179 |  |  |  | 35,315 |  |  |  | 36,301 |  |  |  |  |
Other assets |  |  | 764,902 |  |  |  | 784,863 |  |  |  | 805,508 |  |  |  | 794,883 |  |  |  | 770,838 |  |  |  |  |
Total assets |  | $ | 18,722,189 |  |  | $ | 18,390,839 |  |  | $ | 18,422,626 |  |  | $ | 18,877,178 |  |  | $ | 18,015,478 |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noninterest-bearing |  | $ | 3,197,620 |  |  | $ | 3,320,124 |  |  | $ | 3,461,073 |  |  | $ | 3,797,055 |  |  | $ | 4,093,771 |  |  |  |  |
Interest-bearing |  |  | 12,372,143 |  |  |  | 11,781,799 |  |  |  | 11,452,827 |  |  |  | 10,986,606 |  |  |  | 10,343,877 |  |  |  |  |
Total deposits |  |  | 15,569,763 |  |  |  | 15,101,923 |  |  |  | 14,913,900 |  |  |  | 14,783,661 |  |  |  | 14,437,648 |  |  |  |  |
Fed funds purchased and repurchases |  |  | 405,745 |  |  |  | 321,799 |  |  |  | 311,179 |  |  |  | 477,980 |  |  |  | 449,331 |  |  |  |  |
Other borrowings |  |  | 483,230 |  |  |  | 793,193 |  |  |  | 1,056,714 |  |  |  | 1,485,181 |  |  |  | 1,050,938 |  |  |  |  |
Subordinated notes |  |  | 123,482 |  |  |  | 123,427 |  |  |  | 123,372 |  |  |  | 123,317 |  |  |  | 123,262 |  |  |  |  |
Junior subordinated debt securities |  |  | 61,856 |  |  |  | 61,856 |  |  |  | 61,856 |  |  |  | 61,856 |  |  |  | 61,856 |  |  |  |  |
ACL on off-balance sheet credit exposures |  |  | 34,057 |  |  |  | 34,945 |  |  |  | 34,841 |  |  |  | 34,596 |  |  |  | 36,838 |  |  |  |  |
Operating lease liabilities |  |  | 41,584 |  |  |  | 42,730 |  |  |  | 40,845 |  |  |  | 37,988 |  |  |  | 38,932 |  |  |  |  |
Other liabilities |  |  | 340,625 |  |  |  | 340,615 |  |  |  | 308,726 |  |  |  | 310,500 |  |  |  | 324,405 |  |  |  |  |
Total liabilities |  |  | 17,060,342 |  |  |  | 16,820,488 |  |  |  | 16,851,433 |  |  |  | 17,315,079 |  |  |  | 16,523,210 |  |  |  |  |
Common stock |  |  | 12,725 |  |  |  | 12,724 |  |  |  | 12,724 |  |  |  | 12,720 |  |  |  | 12,705 |  |  |  |  |
Capital surplus |  |  | 159,688 |  |  |  | 158,316 |  |  |  | 156,834 |  |  |  | 155,297 |  |  |  | 154,645 |  |  |  |  |
Retained earnings |  |  | 1,709,157 |  |  |  | 1,687,199 |  |  |  | 1,667,339 |  |  |  | 1,636,463 |  |  |  | 1,600,321 |  |  |  |  |
Accumulated other comprehensive income (loss), net of tax |  |  | (219,723 | ) |  |  | (287,888 | ) |  |  | (265,704 | ) |  |  | (242,381 | ) |  |  | (275,403 | ) |  |  |  |
Total shareholders' equity |  |  | 1,661,847 |  |  |  | 1,570,351 |  |  |  | 1,571,193 |  |  |  | 1,562,099 |  |  |  | 1,492,268 |  |  |  |  |
Total liabilities and equity |  | $ | 18,722,189 |  |  | $ | 18,390,839 |  |  | $ | 18,422,626 |  |  | $ | 18,877,178 |  |  | $ | 18,015,478 |  |  |  |  |

See Notes to Consolidated Financials

|  | TRUSTMARK CORPORATION AND SUBSIDIARIES
| CONSOLIDATED FINANCIAL INFORMATION
| December 31, 2023
| ($ in thousands except per share data)
| (unaudited)

|  | Quarter Ended |  |  | Year Ended |
INCOME STATEMENTS |  | 12/31/2023 |  |  | 9/30/2023 |  |  | 6/30/2023 |  |  | 3/31/2023 |  |  | 12/31/2022 |  |  | 12/31/2023 |  |  | 12/31/2022 |
Interest and fees on LHFS & LHFI-FTE |  | $ | 210,288 |  |  | $ | 206,523 |  |  | $ | 192,941 |  |  | $ | 178,967 |  |  | $ | 159,566 |  |  | $ | 788,719 |  |  | $ | 485,246 |
Interest and fees on PPP loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 101 |  |  |  | — |  |  |  | 639 |
Interest on securities-taxable |  |  | 15,936 |  |  |  | 16,624 |  |  |  | 16,779 |  |  |  | 16,761 |  |  |  | 16,577 |  |  |  | 66,100 |  |  |  | 59,717 |
Interest on securities-tax exempt-FTE |  |  | 44 |  |  |  | 58 |  |  |  | 69 |  |  |  | 92 |  |  |  | 93 |  |  |  | 263 |  |  |  | 422 |
Interest on fed funds sold and reverse repurchases |  |  | 2 |  |  |  | 3 |  |  |  | 45 |  |  |  | 30 |  |  |  | 71 |  |  |  | 80 |  |  |  | 74 |
Other interest income |  |  | 9,918 |  |  |  | 8,613 |  |  |  | 12,077 |  |  |  | 6,527 |  |  |  | 3,556 |  |  |  | 37,135 |  |  |  | 8,080 |
Total interest income-FTE |  |  | 236,188 |  |  |  | 231,821 |  |  |  | 221,911 |  |  |  | 202,377 |  |  |  | 179,964 |  |  |  | 892,297 |  |  |  | 554,178 |
Interest on deposits |  |  | 80,847 |  |  |  | 69,797 |  |  |  | 54,409 |  |  |  | 40,898 |  |  |  | 18,438 |  |  |  | 245,951 |  |  |  | 29,069 |
Interest on fed funds purchased and repurchases |  |  | 5,347 |  |  |  | 5,375 |  |  |  | 4,865 |  |  |  | 4,832 |  |  |  | 4,762 |  |  |  | 20,419 |  |  |  | 6,127 |
Other interest expense |  |  | 9,946 |  |  |  | 14,713 |  |  |  | 19,350 |  |  |  | 15,575 |  |  |  | 6,730 |  |  |  | 59,584 |  |  |  | 11,929 |
Total interest expense |  |  | 96,140 |  |  |  | 89,885 |  |  |  | 78,624 |  |  |  | 61,305 |  |  |  | 29,930 |  |  |  | 325,954 |  |  |  | 47,125 |
Net interest income-FTE |  |  | 140,048 |  |  |  | 141,936 |  |  |  | 143,287 |  |  |  | 141,072 |  |  |  | 150,034 |  |  |  | 566,343 |  |  |  | 507,053 |
Provision for credit losses, LHFI |  |  | 7,585 |  |  |  | 8,322 |  |  |  | 8,211 |  |  |  | 3,244 |  |  |  | 6,902 |  |  |  | 27,362 |  |  |  | 21,677 |
Provision for credit losses, off-balance sheet credit exposures |  |  | (888 | ) |  |  | 104 |  |  |  | 245 |  |  |  | (2,242 | ) |  |  | 5,215 |  |  |  | (2,781 | ) |  |  | 1,215 |
Net interest income after provision-FTE |  |  | 133,351 |  |  |  | 133,510 |  |  |  | 134,831 |  |  |  | 140,070 |  |  |  | 137,917 |  |  |  | 541,762 |  |  |  | 484,161 |
Service charges on deposit accounts |  |  | 11,311 |  |  |  | 11,074 |  |  |  | 10,695 |  |  |  | 10,336 |  |  |  | 11,162 |  |  |  | 43,416 |  |  |  | 42,157 |
Bank card and other fees |  |  | 8,502 |  |  |  | 8,217 |  |  |  | 8,917 |  |  |  | 7,803 |  |  |  | 8,191 |  |  |  | 33,439 |  |  |  | 36,105 |
Mortgage banking, net |  |  | 5,519 |  |  |  | 6,458 |  |  |  | 6,600 |  |  |  | 7,639 |  |  |  | 3,408 |  |  |  | 26,216 |  |  |  | 28,306 |
Insurance commissions |  |  | 13,197 |  |  |  | 15,303 |  |  |  | 14,764 |  |  |  | 14,305 |  |  |  | 12,019 |  |  |  | 57,569 |  |  |  | 53,721 |
Wealth management |  |  | 8,657 |  |  |  | 8,773 |  |  |  | 8,882 |  |  |  | 8,780 |  |  |  | 8,079 |  |  |  | 35,092 |  |  |  | 35,013 |
Other, net |  |  | 2,579 |  |  |  | 2,399 |  |  |  | 3,695 |  |  |  | 2,514 |  |  |  | 2,311 |  |  |  | 11,187 |  |  |  | 9,842 |
Securities gains (losses), net |  |  | 39 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 39 |  |  |  | — |
Total noninterest income |  |  | 49,804 |  |  |  | 52,224 |  |  |  | 53,553 |  |  |  | 51,377 |  |  |  | 45,170 |  |  |  | 206,958 |  |  |  | 205,144 |
Salaries and employee benefits |  |  | 78,003 |  |  |  | 76,666 |  |  |  | 75,940 |  |  |  | 74,056 |  |  |  | 73,469 |  |  |  | 304,665 |  |  |  | 287,440 |
Services and fees (2) |  |  | 27,906 |  |  |  | 27,882 |  |  |  | 28,264 |  |  |  | 25,426 |  |  |  | 27,709 |  |  |  | 109,478 |  |  |  | 105,469 |
Net occupancy-premises |  |  | 7,362 |  |  |  | 7,383 |  |  |  | 7,108 |  |  |  | 7,629 |  |  |  | 7,898 |  |  |  | 29,482 |  |  |  | 29,264 |
Equipment expense |  |  | 6,517 |  |  |  | 6,816 |  |  |  | 6,404 |  |  |  | 6,405 |  |  |  | 6,268 |  |  |  | 26,142 |  |  |  | 24,448 |
Litigation settlement expense (1) |  |  | — |  |  |  | 6,500 |  |  |  | — |  |  |  | — |  |  |  | 100,750 |  |  |  | 6,500 |  |  |  | 100,750 |
Other expense (2) |  |  | 16,641 |  |  |  | 15,698 |  |  |  | 14,502 |  |  |  | 14,811 |  |  |  | 15,135 |  |  |  | 61,652 |  |  |  | 55,842 |
Total noninterest expense |  |  | 136,429 |  |  |  | 140,945 |  |  |  | 132,218 |  |  |  | 128,327 |  |  |  | 231,229 |  |  |  | 537,919 |  |  |  | 603,213 |
Income (loss) before income taxes and tax eq adj |  |  | 46,726 |  |  |  | 44,789 |  |  |  | 56,166 |  |  |  | 63,120 |  |  |  | (48,142 | ) |  |  | 210,801 |  |  |  | 86,092 |
Tax equivalent adjustment |  |  | 3,306 |  |  |  | 3,299 |  |  |  | 3,383 |  |  |  | 3,477 |  |  |  | 3,451 |  |  |  | 13,465 |  |  |  | 12,345 |
Income (loss) before income taxes |  |  | 43,420 |  |  |  | 41,490 |  |  |  | 52,783 |  |  |  | 59,643 |  |  |  | (51,593 | ) |  |  | 197,336 |  |  |  | 73,747 |
Income taxes |  |  | 7,297 |  |  |  | 7,461 |  |  |  | 7,746 |  |  |  | 9,343 |  |  |  | (17,530 | ) |  |  | 31,847 |  |  |  | 1,860 |
Net income (loss) |  | $ | 36,123 |  |  | $ | 34,029 |  |  | $ | 45,037 |  |  | $ | 50,300 |  |  | $ | (34,063 | ) |  | $ | 165,489 |  |  | $ | 71,887 |
Per share data |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Earnings (loss) per share - basic |  | $ | 0.59 |  |  | $ | 0.56 |  |  | $ | 0.74 |  |  | $ | 0.82 |  |  | $ | (0.56 | ) |  | $ | 2.71 |  |  | $ | 1.17 |
Earnings (loss) per share - diluted |  | $ | 0.59 |  |  | $ | 0.56 |  |  | $ | 0.74 |  |  | $ | 0.82 |  |  | $ | (0.56 | ) |  | $ | 2.70 |  |  | $ | 1.17 |
Dividends per share |  | $ | 0.23 |  |  | $ | 0.23 |  |  | $ | 0.23 |  |  | $ | 0.23 |  |  | $ | 0.23 |  |  | $ | 0.92 |  |  | $ | 0.92 |
Weighted average shares outstanding |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 61,070,481 |  |  |  | 61,069,750 |  |  |  | 61,063,277 |  |  |  | 61,011,059 |  |  |  | 60,969,400 |  |  |  | 61,053,849 |  |  |  | 61,242,358 |
Diluted |  |  | 61,296,840 |  |  |  | 61,263,032 |  |  |  | 61,230,031 |  |  |  | 61,193,275 |  |  |  | 61,173,249 |  |  |  | 61,230,621 |  |  |  | 61,431,726 |
Period end shares outstanding |  |  | 61,071,173 |  |  |  | 61,070,095 |  |  |  | 61,069,036 |  |  |  | 61,048,516 |  |  |  | 60,977,686 |  |  |  | 61,071,173 |  |  |  | 60,977,686 |
(1) See Note 1 - Litigation Settlement in the Notes to Consolidated Financials for additional information. |  |  |  |  |
(2) During the first quarter of 2023, Trustmark reclassified its debit card transaction fees from other expense to services and fees. Prior periods have been reclassified accordingly. |

See Notes to Consolidated Financials

|  | TRUSTMARK CORPORATION AND SUBSIDIARIES
| CONSOLIDATED FINANCIAL INFORMATION
| December 31, 2023
| ($ in thousands)
| (unaudited)

|  | Quarter Ended |  |  |  |  |  |  |
NONPERFORMING ASSETS (1) |  | 12/31/2023 |  |  | 9/30/2023 |  |  | 6/30/2023 |  |  | 3/31/2023 |  |  | 12/31/2022 |  |  |  |  |  |  |
Nonaccrual LHFI |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Alabama (2) |  | $ | 23,271 |  |  | $ | 23,530 |  |  | $ | 11,058 |  |  | $ | 10,919 |  |  | $ | 12,300 |  |  |  |  |  |  |
Florida |  |  | 170 |  |  |  | 151 |  |  |  | 334 |  |  |  | 256 |  |  |  | 227 |  |  |  |  |  |  |
Mississippi (3) |  |  | 54,615 |  |  |  | 45,050 |  |  |  | 36,288 |  |  |  | 32,560 |  |  |  | 24,683 |  |  |  |  |  |  |
Tennessee (4) |  |  | 1,802 |  |  |  | 1,841 |  |  |  | 5,088 |  |  |  | 5,416 |  |  |  | 5,566 |  |  |  |  |  |  |
Texas |  |  | 20,150 |  |  |  | 20,327 |  |  |  | 22,259 |  |  |  | 23,224 |  |  |  | 23,196 |  |  |  |  |  |  |
Total nonaccrual LHFI |  |  | 100,008 |  |  |  | 90,899 |  |  |  | 75,027 |  |  |  | 72,375 |  |  |  | 65,972 |  |  |  |  |  |  |
Other real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Alabama (2) |  |  | 1,397 |  |  |  | 315 |  |  |  | — |  |  |  | — |  |  |  | 194 |  |  |  |  |  |  |
Mississippi (3) |  |  | 1,242 |  |  |  | 942 |  |  |  | 1,137 |  |  |  | 1,495 |  |  |  | 1,769 |  |  |  |  |  |  |
Tennessee (4) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 189 |  |  |  | 23 |  |  |  |  |  |  |
Texas |  |  | 4,228 |  |  |  | 4,228 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  |  |  |  |
Total other real estate |  |  | 6,867 |  |  |  | 5,485 |  |  |  | 1,137 |  |  |  | 1,684 |  |  |  | 1,986 |  |  |  |  |  |  |
Total nonperforming assets |  | $ | 106,875 |  |  | $ | 96,384 |  |  | $ | 76,164 |  |  | $ | 74,059 |  |  | $ | 67,958 |  |  |  |  |  |  |
LOANS PAST DUE OVER 90 DAYS (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
LHFI |  | $ | 5,790 |  |  | $ | 3,804 |  |  | $ | 3,911 |  |  | $ | 2,255 |  |  | $ | 3,929 |  |  |  |  |  |  |
LHFS-Guaranteed GNMA serviced loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(no obligation to repurchase) |  | $ | 51,243 |  |  | $ | 42,532 |  |  | $ | 35,766 |  |  | $ | 41,468 |  |  | $ | 49,320 |  |  |  |  |  |  |
|  | Quarter Ended |  |  | Year Ended |
ACL LHFI (1) |  | 12/31/2023 |  |  | 9/30/2023 |  |  | 6/30/2023 |  |  | 3/31/2023 |  |  | 12/31/2022 |  |  | 12/31/2023 |  |  | 12/31/2022 |
Beginning Balance |  | $ | 134,031 |  |  | $ | 129,298 |  |  | $ | 122,239 |  |  | $ | 120,214 |  |  | $ | 115,050 |  |  | $ | 120,214 |  |  | $ | 99,457 |
Provision for credit losses, LHFI |  |  | 7,585 |  |  |  | 8,322 |  |  |  | 8,211 |  |  |  | 3,244 |  |  |  | 6,902 |  |  |  | 27,362 |  |  |  | 21,677 |
Charge-offs |  |  | (4,250 | ) |  |  | (7,496 | ) |  |  | (2,773 | ) |  |  | (2,996 | ) |  |  | (3,893 | ) |  |  | (17,515 | ) |  |  | (11,332 | )
Recoveries |  |  | 2,001 |  |  |  | 3,907 |  |  |  | 1,621 |  |  |  | 1,777 |  |  |  | 2,155 |  |  |  | 9,306 |  |  |  | 10,412 |
Net (charge-offs) recoveries |  |  | (2,249 | ) |  |  | (3,589 | ) |  |  | (1,152 | ) |  |  | (1,219 | ) |  |  | (1,738 | ) |  |  | (8,209 | ) |  |  | (920 | )
Ending Balance |  | $ | 139,367 |  |  | $ | 134,031 |  |  | $ | 129,298 |  |  | $ | 122,239 |  |  | $ | 120,214 |  |  | $ | 139,367 |  |  | $ | 120,214 |
NET (CHARGE-OFFS) RECOVERIES (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Alabama (2) |  | $ | (299 | ) |  | $ | (165 | ) |  | $ | (141 | ) |  | $ | (268 | ) |  | $ | 98 |  |  | $ | (873 | ) |  | $ | 2,019 |
Florida |  |  | 180 |  |  |  | 21 |  |  |  | (35 | ) |  |  | (36 | ) |  |  | (60 | ) |  |  | 130 |  |  |  | 652 |
Mississippi (3) |  |  | (1,943 | ) |  |  | (1,867 | ) |  |  | (762 | ) |  |  | (775 | ) |  |  | (1,657 | ) |  |  | (5,347 | ) |  |  | (2,713 | )
Tennessee (4) |  |  | (193 | ) |  |  | 2,127 |  |  |  | (166 | ) |  |  | (124 | ) |  |  | (195 | ) |  |  | 1,644 |  |  |  | (790 | )
Texas |  |  | 6 |  |  |  | (3,705 | ) |  |  | (48 | ) |  |  | (16 | ) |  |  | 76 |  |  |  | (3,763 | ) |  |  | (88 | )
Total net (charge-offs) recoveries |  | $ | (2,249 | ) |  | $ | (3,589 | ) |  | $ | (1,152 | ) |  | $ | (1,219 | ) |  | $ | (1,738 | ) |  | $ | (8,209 | ) |  | $ | (920 | )
(1) Excludes PPP loans. |  |  |  |  |  |  |  |  |  |
(2) Alabama includes the Georgia Loan Production Office. |  |  |  |  |  |  |  |  |  |
(3) Mississippi includes Central and Southern Mississippi Regions. |  |  |  |  |  |  |  |  |  |
(4) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions. |  |  |  |  |  |  |  |  |  |

See Notes to Consolidated Financials

|  | TRUSTMARK CORPORATION AND SUBSIDIARIES
| CONSOLIDATED FINANCIAL INFORMATION
| December 31, 2023
| (unaudited)

|  | Quarter Ended |  |  | Year Ended |
FINANCIAL RATIOS AND OTHER DATA |  | 12/31/2023 |  |  | 9/30/2023 |  |  | 6/30/2023 |  |  | 3/31/2023 |  |  | 12/31/2022 |  |  | 12/31/2023 |  |  | 12/31/2022 |
Return on average equity |  |  | 9.00 | % |  |  | 8.53 | % |  |  | 11.43 | % |  |  | 13.39 | % |  |  | -9.05 | % |  |  | 10.54 | % |  |  | 4.48 | %
Return on average tangible equity |  |  | 11.92 | % |  |  | 11.32 | % |  |  | 15.18 | % |  |  | 18.03 | % |  |  | -12.14 | % |  |  | 14.04 | % |  |  | 6.00 | %
Return on average assets |  |  | 0.77 | % |  |  | 0.72 | % |  |  | 0.96 | % |  |  | 1.10 | % |  |  | -0.76 | % |  |  | 0.89 | % |  |  | 0.41 | %
Interest margin - Yield - FTE |  |  | 5.48 | % |  |  | 5.38 | % |  |  | 5.16 | % |  |  | 4.87 | % |  |  | 4.40 | % |  |  | 5.22 | % |  |  | 3.46 | %
Interest margin - Cost |  |  | 2.23 | % |  |  | 2.08 | % |  |  | 1.83 | % |  |  | 1.47 | % |  |  | 0.73 | % |  |  | 1.91 | % |  |  | 0.29 | %
Net interest margin - FTE |  |  | 3.25 | % |  |  | 3.29 | % |  |  | 3.33 | % |  |  | 3.39 | % |  |  | 3.66 | % |  |  | 3.32 | % |  |  | 3.17 | %
Efficiency ratio (1) |  |  | 70.25 | % |  |  | 68.33 | % |  |  | 66.17 | % |  |  | 65.60 | % |  |  | 65.85 | % |  |  | 67.57 | % |  |  | 69.37 | %
Full-time equivalent employees |  |  | 2,757 |  |  |  | 2,756 |  |  |  | 2,761 |  |  |  | 2,758 |  |  |  | 2,738 |  |  |  |  |  |  |
CREDIT QUALITY RATIOS (2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net (recoveries) charge-offs / average loans |  |  | 0.07 | % |  |  | 0.11 | % |  |  | 0.04 | % |  |  | 0.04 | % |  |  | 0.06 | % |  |  | 0.06 | % |  |  | 0.01 | %
Provision for credit losses, LHFI / average loans |  |  | 0.23 | % |  |  | 0.26 | % |  |  | 0.26 | % |  |  | 0.10 | % |  |  | 0.23 | % |  |  | 0.21 | % |  |  | 0.19 | %
Nonaccrual LHFI / (LHFI + LHFS) |  |  | 0.76 | % |  |  | 0.70 | % |  |  | 0.59 | % |  |  | 0.57 | % |  |  | 0.53 | % |  |  |  |  |  |
Nonperforming assets / (LHFI + LHFS) |  |  | 0.81 | % |  |  | 0.74 | % |  |  | 0.60 | % |  |  | 0.58 | % |  |  | 0.55 | % |  |  |  |  |  |
Nonperforming assets / (LHFI + LHFS + other real estate) |  |  | 0.81 | % |  |  | 0.74 | % |  |  | 0.60 | % |  |  | 0.58 | % |  |  | 0.55 | % |  |  |  |  |  |
ACL LHFI / LHFI |  |  | 1.08 | % |  |  | 1.05 | % |  |  | 1.03 | % |  |  | 0.98 | % |  |  | 0.99 | % |  |  |  |  |  |
ACL LHFI-commercial / commercial LHFI |  |  | 0.85 | % |  |  | 0.86 | % |  |  | 0.84 | % |  |  | 0.80 | % |  |  | 0.85 | % |  |  |  |  |  |
ACL LHFI-consumer / consumer and home mortgage LHFI |  |  | 1.81 | % |  |  | 1.66 | % |  |  | 1.60 | % |  |  | 1.54 | % |  |  | 1.41 | % |  |  |  |  |  |
ACL LHFI / nonaccrual LHFI |  |  | 139.36 | % |  |  | 147.45 | % |  |  | 172.34 | % |  |  | 168.90 | % |  |  | 182.22 | % |  |  |  |  |  |
ACL LHFI / nonaccrual LHFI (excl individually analyzed loans) |  |  | 249.31 | % |  |  | 273.60 | % |  |  | 301.44 | % |  |  | 320.80 | % |  |  | 399.19 | % |  |  |  |  |  |
CAPITAL RATIOS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total equity / total assets |  |  | 8.88 | % |  |  | 8.54 | % |  |  | 8.53 | % |  |  | 8.28 | % |  |  | 8.28 | % |  |  |  |  |  |
Tangible equity / tangible assets |  |  | 6.95 | % |  |  | 6.57 | % |  |  | 6.56 | % |  |  | 6.35 | % |  |  | 6.27 | % |  |  |  |  |  |
Tangible equity / risk-weighted assets |  |  | 8.41 | % |  |  | 7.81 | % |  |  | 7.91 | % |  |  | 7.94 | % |  |  | 7.61 | % |  |  |  |  |  |
Tier 1 leverage ratio |  |  | 8.62 | % |  |  | 8.49 | % |  |  | 8.35 | % |  |  | 8.29 | % |  |  | 8.47 | % |  |  |  |  |  |
Common equity tier 1 capital ratio |  |  | 10.04 | % |  |  | 9.89 | % |  |  | 9.87 | % |  |  | 9.76 | % |  |  | 9.74 | % |  |  |  |  |  |
Tier 1 risk-based capital ratio |  |  | 10.44 | % |  |  | 10.29 | % |  |  | 10.27 | % |  |  | 10.17 | % |  |  | 10.15 | % |  |  |  |  |  |
Total risk-based capital ratio |  |  | 12.29 | % |  |  | 12.11 | % |  |  | 12.08 | % |  |  | 11.95 | % |  |  | 11.91 | % |  |  |  |  |  |
STOCK PERFORMANCE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Market value-Close |  | $ | 27.88 |  |  | $ | 21.73 |  |  | $ | 21.12 |  |  | $ | 24.70 |  |  | $ | 34.91 |  |  |  |  |  |  |
Book value |  | $ | 27.21 |  |  | $ | 25.71 |  |  | $ | 25.73 |  |  | $ | 25.59 |  |  | $ | 24.47 |  |  |  |  |  |  |
Tangible book value |  | $ | 20.87 |  |  | $ | 19.37 |  |  | $ | 19.38 |  |  | $ | 19.24 |  |  | $ | 18.11 |  |  |  |  |  |  |
(1) See Note 7 – Non-GAAP Financial Measures in the Notes to Consolidated Financials for Trustmark’s efficiency ratio calculation. |  |
(2) Excludes PPP loans. |  |  |  |  |  |  |  |  |  |

See Notes to Consolidated Financials

|  | TRUSTMARK CORPORATION AND SUBSIDIARIES
| NOTES TO CONSOLIDATED FINANCIALS
| December 31, 2023
| ($ in thousands)
| (unaudited)

Note 1 - Litigation Settlement

As previously announced, on December 31, 2022, Trustmark National Bank (TNB) agreed to a settlement in principle (the Stanford Settlement) relating to litigation involving the Stanford Financial Group. On January 13, 2023, TNB entered into a Settlement Agreement (the Stanford Settlement Agreement) reflecting the terms of the Stanford Settlement. The parties to the Stanford Settlement Agreement are, on the one hand, (i) Ralph S. Janvey, solely in his capacity as the court-appointed receiver (the Stanford Receiver) for the Stanford Receivership Estate; (ii) the Official Stanford Investors Committee; (iii) each of the plaintiffs in the Rotstain and Smith Actions; and, on the other hand, (iv) TNB. Under the terms of the Stanford Settlement Agreement, the parties agreed to settle and dismiss the Rotstain Action, the Smith Action, and all current or future claims by plaintiffs in either such Action arising from or related to Stanford. In addition, the Stanford Settlement Agreement provided that the parties would request dismissal of the Jackson Action pursuant to the terms of the bar orders described below. The Court’s approval of the Stanford Settlement Agreement, including the bar orders described below, has occurred and has been upheld on appeal, as described below. As a result, pursuant to the Stanford Settlement, TNB will make a one-time cash payment of $100.0 million to the Stanford Receiver on February 2, 2024.

The Stanford Settlement Agreement included the parties’ agreement to seek the Northern District of Texas District Court’s entry of bar orders prohibiting any continued or future claims by the plaintiffs in the Actions or by any other person or entity against TNB and its related parties relating to Stanford, whether asserted to date or not. The bar orders prohibit all litigation relating to Stanford described herein, including not only the Actions and any pending matters but also any actions that may be brought in the future. Final Court approval of these bar orders was a condition of the Stanford Settlement.

The Stanford Settlement Agreement was also subject to notice to Stanford’s investor claimants (which has been provided) and final, non-appealable approval by the U.S. District Court for the Northern District of Texas (which has occurred).

The Stanford Settlement Agreement also provides that TNB denies and makes no admission of liability or wrongdoing in connection with any Stanford matter. As has been the case throughout the pendency of the Actions, TNB expressly denies any liability or wrongdoing with respect to any matter alleged in regard to the multi-billion dollar Ponzi scheme operated by Stanford for almost 20 years. TNB’s relationship with Stanford began as a result of TNB’s acquisition of a Houston-based bank in August 2006, and consisted of ordinary banking services provided to business deposit customers.

The foregoing description of the terms of the Stanford Settlement Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Stanford Settlement Agreement, a copy of which is filed as Exhibit 10.ai to the 2022 Annual Report and is incorporated herein by reference.

On January 20, 2023, the U.S. District Court for the Northern District of Texas entered an order preliminarily finding that the Stanford Settlement is fair, reasonable, and equitable; has no obvious deficiencies; and is the product of serious, informed, good faith, and arm’s-length negotiations. Following the provision of notice as required by the Stanford Settlement Agreement and by the Court’s preliminary order, the Court (Judge David C. Godbey, presiding) held a Final Approval Hearing on May 3, 2023, at which the Court approved the Stanford Settlement from the bench. On May 4, 2023, Judge Godbey signed the written orders confirming his oral ruling, including the bar order contemplated by the Stanford Settlement Agreement and the judgment and bar order with respect to the Jackson Action.

On May 10, 2023, Robert Allen Stanford, writing from prison, appealed the District Court’s approval of the Stanford Settlement to the Fifth Circuit Court of Appeals. On June 12, 2023, the Stanford Receiver moved to dismiss the appeal as frivolous. On July 25, 2023, a three-judge panel of the Fifth Circuit issued a per curiam order dismissing Stanford’s appeal as frivolous. In July and August 2023, Mr. Stanford filed, then subsequently withdrew, a motion seeking panel rehearing of the Fifth Circuit’s July 25, 2023, decision.

When Stanford’s deadline to appeal the Fifth Circuit’s ruling to the Supreme Court of the United States passed without his filing a petition for certiorari, the trial court’s ruling approving the Stanford Settlement and entering the bar orders became final and non-appealable, as defined in the Stanford Settlement Agreement (the Stanford Settlement Effective Date). On November 14, the parties to the Rotstain and Smith Actions filed agreed dismissals of those cases, which were granted on November 27, 2023 (Smith Action) and December 18, 2023 (Rotstain Action). Those dismissals were final and non-appealable as of December 27, 2023 (Smith Action) and January 17, 2024 (Rotstain Action). Accordingly, pursuant to the Stanford Settlement Agreement, TNB will make the settlement payment on February 2, 2024, concluding the Stanford Settlement.

TNB and Trustmark Corporation determined that it was in the best interest of TNB, Trustmark Corporation and the shareholders of Trustmark Corporation to enter into the Stanford Settlement and the Stanford Settlement Agreement to eliminate the risk, ongoing expense, uncertainty as to ultimate outcome, and imposition on management and the business of TNB of further litigation of the Actions and related Stanford claims.

As previously announced, on August 30, 2023, TNB agreed to a settlement in principle (the Adams/Madison Timber Settlement) relating to litigation and claims involving Arthur Lamar Adams and Madison Timber Properties, LLC (collectively, Adams/Madison Timber). On October 9, 2023, TNB entered into a Settlement Agreement (the Adams/Madison Timber Settlement Agreement) reflecting the terms of the Adams/Madison Timber Settlement. The parties to the Adams/Madison Timber Settlement are, on the one hand, Alysson Mills in her capacity as Court-appointed Receiver (the Adams/Madison Timber Receiver); and, on the other hand, TNB. Under the terms of the Adams/Madison Timber Settlement Agreement, the parties agreed to settle and dismiss the Adams/Madison Timber Action, and the Adams/Madison Timber Receiver agreed to fully release all claims against TNB and any of its employees, agents and representatives. The Adams/Madison Timber Settlement included the parties’ agreement to seek the Court’s entry of bar orders prohibiting any continued or future claims by anyone against TNB and its related parties relating to Adams/Madison Timber, whether asserted to date or not. Final Court approval of a bar order was a condition of the Adams/Madison Timber Settlement. On November 14, 2023, the Court entered a Partial Final Judgment and Final Bar Order approving the settlement. The bar order therefore is expected to prohibit all litigation relating to Adams/Madison Timber described herein.

The Adams/Madison Timber Settlement was subject to notice to Adams/Madison Timber investors, and final, non-appealable approval by the Court and entry of a judgment dismissing the Lawsuit against TNB. No investor or other interested parties appealed the bar order before the appeal deadline passed. Accordingly, TNB made the settlement payment to the Adams/Madison Timber Receiver on January 22, 2024, concluding the Adams/Madison Timber Settlement.

|  | TRUSTMARK CORPORATION AND SUBSIDIARIES
| NOTES TO CONSOLIDATED FINANCIALS
| December 31, 2023
| ($ in thousands)
| (unaudited)

Note 1 - Litigation Settlement (continued)

At the time of the entry into the Stanford Settlement as described above, Trustmark Corporation recognized $100.0 million of litigation settlement expense, as well as an additional $750 thousand in legal fees, which were included in noninterest expense related to the Stanford litigation during the fourth quarter of 2022. As a result of the entry into the Adams/Madison Timber Settlement as described above, Trustmark Corporation recognized $6.5 million of litigation settlement expense which was included in noninterest expense related to the Adams/Madison Timber litigation during the third quarter of 2023. Trustmark Corporation expects that both the Stanford Settlement and Adams/Madison Timber Settlement will be tax deductible. Trustmark Corporation and TNB remain substantially above levels considered to be well-capitalized under all relevant standards.

Note 2 - Securities Available for Sale and Held to Maturity

The following table is a summary of the estimated fair value of securities available for sale and the amortized cost of securities held to maturity:

|  | 12/31/2023 |  |  | 9/30/2023 |  |  | 6/30/2023 |  |  | 3/31/2023 |  |  | 12/31/2022 |
SECURITIES AVAILABLE FOR SALE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 372,368 |  |  | $ | 363,476 |  |  | $ | 362,966 |  |  | $ | 386,903 |  |  | $ | 391,513 |
U.S. Government agency obligations |  |  | 5,792 |  |  |  | 6,780 |  |  |  | 6,999 |  |  |  | 7,254 |  |  |  | 7,766 |
Obligations of states and political subdivisions |  |  | — |  |  |  | 4,642 |  |  |  | 4,813 |  |  |  | 4,907 |  |  |  | 4,862 |
Mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage pass-through securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Guaranteed by GNMA |  |  | 23,135 |  |  |  | 22,881 |  |  |  | 25,336 |  |  |  | 26,851 |  |  |  | 27,097 |
Issued by FNMA and FHLMC |  |  | 1,176,798 |  |  |  | 1,171,521 |  |  |  | 1,250,435 |  |  |  | 1,317,848 |  |  |  | 1,345,463 |
Other residential mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Issued or guaranteed by FNMA, FHLMC, or GNMA |  |  | 86,074 |  |  |  | 90,402 |  |  |  | 98,388 |  |  |  | 108,192 |  |  |  | 115,140 |
Commercial mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Issued or guaranteed by FNMA, FHLMC, or GNMA |  |  | 98,711 |  |  |  | 106,472 |  |  |  | 122,946 |  |  |  | 132,207 |  |  |  | 132,241 |
Total securities available for sale |  | $ | 1,762,878 |  |  | $ | 1,766,174 |  |  | $ | 1,871,883 |  |  | $ | 1,984,162 |  |  | $ | 2,024,082 |
SECURITIES HELD TO MATURITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 29,068 |  |  | $ | 28,872 |  |  | $ | 28,679 |  |  | $ | 28,486 |  |  | $ | 28,295 |
Obligations of states and political subdivisions |  |  | 340 |  |  |  | 341 |  |  |  | 1,180 |  |  |  | 4,507 |  |  |  | 4,510 |
Mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage pass-through securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Guaranteed by GNMA |  |  | 13,005 |  |  |  | 13,090 |  |  |  | 13,235 |  |  |  | 4,336 |  |  |  | 4,442 |
Issued by FNMA and FHLMC |  |  | 469,593 |  |  |  | 474,003 |  |  |  | 484,679 |  |  |  | 497,854 |  |  |  | 509,311 |
Other residential mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Issued or guaranteed by FNMA, FHLMC, or GNMA |  |  | 154,466 |  |  |  | 162,031 |  |  |  | 171,002 |  |  |  | 179,334 |  |  |  | 188,201 |
Commercial mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Issued or guaranteed by FNMA, FHLMC, or GNMA |  |  | 759,807 |  |  |  | 759,950 |  |  |  | 759,890 |  |  |  | 759,821 |  |  |  | 759,755 |
Total securities held to maturity |  | $ | 1,426,279 |  |  | $ | 1,438,287 |  |  | $ | 1,458,665 |  |  | $ | 1,474,338 |  |  | $ | 1,494,514 |

At December 31, 2023, the net unamortized, unrealized loss included in accumulated other comprehensive income (loss) in the accompanying balance sheet for securities held to maturity transferred from securities available for sale totaled $57.6 million.

Management continues to focus on asset quality as one of the strategic goals of the securities portfolio, which is evidenced by the investment of 99.99% of the portfolio in GSE-backed obligations and other Aaa rated securities as determined by Moody’s. None of the securities owned by Trustmark are collateralized by assets which are considered sub-prime. Furthermore, outside of stock ownership in the Federal Home Loan Bank of Dallas, Federal Home Loan Bank of Atlanta and Federal Reserve Bank, Trustmark does not hold any other equity investment in a GSE.

|  | TRUSTMARK CORPORATION AND SUBSIDIARIES
| NOTES TO CONSOLIDATED FINANCIALS
| December 31, 2023
| ($ in thousands)
| (unaudited)

Note 3 – Loan Composition

LHFI consisted of the following during the periods presented:

LHFI BY TYPE |  | 12/31/2023 |  |  | 9/30/2023 |  |  | 6/30/2023 |  |  | 3/31/2023 |  |  | 12/31/2022 |
Loans secured by real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction, land development and other land loans |  | $ | 1,510,679 |  |  | $ | 1,609,326 |  |  | $ | 1,722,657 |  |  | $ | 1,723,772 |  |  | $ | 1,719,542 |
Secured by 1-4 family residential properties |  |  | 2,904,715 |  |  |  | 2,893,606 |  |  |  | 2,854,182 |  |  |  | 2,822,048 |  |  |  | 2,775,847 |
Secured by nonfarm, nonresidential properties |  |  | 3,489,434 |  |  |  | 3,569,671 |  |  |  | 3,471,728 |  |  |  | 3,375,579 |  |  |  | 3,278,830 |
Other real estate secured |  |  | 1,312,551 |  |  |  | 1,218,499 |  |  |  | 954,410 |  |  |  | 847,527 |  |  |  | 742,538 |
Commercial and industrial loans |  |  | 1,922,910 |  |  |  | 1,828,924 |  |  |  | 1,883,480 |  |  |  | 1,882,360 |  |  |  | 1,821,259 |
Consumer loans |  |  | 161,725 |  |  |  | 161,940 |  |  |  | 163,788 |  |  |  | 162,911 |  |  |  | 166,425 |
State and other political subdivision loans |  |  | 1,088,466 |  |  |  | 1,056,569 |  |  |  | 1,111,710 |  |  |  | 1,193,727 |  |  |  | 1,223,863 |
Other loans and leases |  |  | 560,044 |  |  |  | 471,724 |  |  |  | 452,012 |  |  |  | 489,271 |  |  |  | 475,735 |
LHFI |  |  | 12,950,524 |  |  |  | 12,810,259 |  |  |  | 12,613,967 |  |  |  | 12,497,195 |  |  |  | 12,204,039 |
ACL LHFI |  |  | (139,367 | ) |  |  | (134,031 | ) |  |  | (129,298 | ) |  |  | (122,239 | ) |  |  | (120,214 | )
Net LHFI |  | $ | 12,811,157 |  |  | $ | 12,676,228 |  |  | $ | 12,484,669 |  |  | $ | 12,374,956 |  |  | $ | 12,083,825 |

The following table presents the LHFI composition based upon the region where the loan was originated and reflects each region’s diversified mix of loans:

| December 31, 2023 |
LHFI - COMPOSITION BY REGION | Total |  |  | Alabama (1) |  |  | Florida |  |  | Mississippi (Central and Southern Regions) |  |  | Tennessee (Memphis, TN and Northern MS Regions) |  |  | Texas |
Loans secured by real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction, land development and other land loans | $ | 1,510,679 |  |  | $ | 688,438 |  |  | $ | 37,626 |  |  | $ | 435,406 |  |  | $ | 37,194 |  |  | $ | 312,015 |
Secured by 1-4 family residential properties |  | 2,904,715 |  |  |  | 151,446 |  |  |  | 54,998 |  |  |  | 2,582,329 |  |  |  | 84,031 |  |  |  | 31,911 |
Secured by nonfarm, nonresidential properties |  | 3,489,434 |  |  |  | 960,656 |  |  |  | 233,908 |  |  |  | 1,431,968 |  |  |  | 153,226 |  |  |  | 709,676 |
Other real estate secured |  | 1,312,551 |  |  |  | 583,165 |  |  |  | 1,761 |  |  |  | 396,715 |  |  |  | 7,587 |  |  |  | 323,323 |
Commercial and industrial loans |  | 1,922,910 |  |  |  | 658,573 |  |  |  | 25,406 |  |  |  | 780,949 |  |  |  | 217,729 |  |  |  | 240,253 |
Consumer loans |  | 161,725 |  |  |  | 22,609 |  |  |  | 7,509 |  |  |  | 101,389 |  |  |  | 20,433 |  |  |  | 9,785 |
State and other political subdivision loans |  | 1,088,466 |  |  |  | 71,882 |  |  |  | 52,759 |  |  |  | 813,291 |  |  |  | 25,999 |  |  |  | 124,535 |
Other loans and leases |  | 560,044 |  |  |  | 209,874 |  |  |  | 8,476 |  |  |  | 223,583 |  |  |  | 46,519 |  |  |  | 71,592 |
Loans | $ | 12,950,524 |  |  | $ | 3,346,643 |  |  | $ | 422,443 |  |  | $ | 6,765,630 |  |  | $ | 592,718 |  |  | $ | 1,823,090 |
CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION |  |  |  |  |  |  |
Lots | $ | 71,875 |  |  | $ | 30,186 |  |  | $ | 8,353 |  |  | $ | 17,257 |  |  | $ | 4,714 |  |  | $ | 11,365 |
Development |  | 146,655 |  |  |  | 74,015 |  |  |  | 1,262 |  |  |  | 36,690 |  |  |  | 12,649 |  |  |  | 22,039 |
Unimproved land |  | 101,941 |  |  |  | 17,432 |  |  |  | 12,853 |  |  |  | 36,573 |  |  |  | 8,094 |  |  |  | 26,989 |
1-4 family construction |  | 322,415 |  |  |  | 164,712 |  |  |  | 13,099 |  |  |  | 95,297 |  |  |  | 11,737 |  |  |  | 37,570 |
Other construction |  | 867,793 |  |  |  | 402,093 |  |  |  | 2,059 |  |  |  | 249,589 |  |  |  | — |  |  |  | 214,052 |
Construction, land development and other land loans | $ | 1,510,679 |  |  | $ | 688,438 |  |  | $ | 37,626 |  |  | $ | 435,406 |  |  | $ | 37,194 |  |  | $ | 312,015 |
(1) Includes Georgia Loan Production Office. |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

|  | TRUSTMARK CORPORATION AND SUBSIDIARIES
| NOTES TO CONSOLIDATED FINANCIALS
| December 31, 2023
| ($ in thousands)
| (unaudited)

Note 3 – Loan Composition (continued)

|  | December 31, 2023 |
|  | Total |  |  | Alabama (1) |  |  | Florida |  |  | Mississippi (Central and Southern Regions) |  |  | Tennessee (Memphis, TN and Northern MS Regions) |  |  | Texas |
LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION |  |  |  |  |  |  |
Non-owner occupied: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail |  | $ | 346,844 |  |  | $ | 128,743 |  |  | $ | 25,732 |  |  | $ | 91,057 |  |  | $ | 17,721 |  |  | $ | 83,591 |
Office |  |  | 286,511 |  |  |  | 104,114 |  |  |  | 19,857 |  |  |  | 94,294 |  |  |  | 1,649 |  |  |  | 66,597 |
Hotel/motel |  |  | 270,740 |  |  |  | 144,403 |  |  |  | 47,111 |  |  |  | 53,227 |  |  |  | 25,999 |  |  |  | — |
Mini-storage |  |  | 157,938 |  |  |  | 32,452 |  |  |  | 1,917 |  |  |  | 103,500 |  |  |  | 756 |  |  |  | 19,313 |
Industrial |  |  | 382,737 |  |  |  | 57,386 |  |  |  | 19,762 |  |  |  | 123,306 |  |  |  | 9,730 |  |  |  | 172,553 |
Health care |  |  | 97,783 |  |  |  | 69,352 |  |  |  | 688 |  |  |  | 25,021 |  |  |  | 333 |  |  |  | 2,389 |
Convenience stores |  |  | 26,254 |  |  |  | 3,315 |  |  |  | 425 |  |  |  | 13,777 |  |  |  | 249 |  |  |  | 8,488 |
Nursing homes/senior living |  |  | 508,665 |  |  |  | 229,352 |  |  |  | — |  |  |  | 160,359 |  |  |  | 4,901 |  |  |  | 114,053 |
Other |  |  | 110,828 |  |  |  | 31,370 |  |  |  | 9,232 |  |  |  | 52,521 |  |  |  | 8,321 |  |  |  | 9,384 |
Total non-owner occupied loans |  |  | 2,188,300 |  |  |  | 800,487 |  |  |  | 124,724 |  |  |  | 717,062 |  |  |  | 69,659 |  |  |  | 476,368 |
Owner-occupied: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Office |  |  | 152,053 |  |  |  | 44,028 |  |  |  | 38,401 |  |  |  | 39,790 |  |  |  | 11,459 |  |  |  | 18,375 |
Churches |  |  | 62,217 |  |  |  | 17,098 |  |  |  | 4,178 |  |  |  | 34,899 |  |  |  | 3,541 |  |  |  | 2,501 |
Industrial warehouses |  |  | 159,227 |  |  |  | 11,619 |  |  |  | 4,618 |  |  |  | 40,837 |  |  |  | 16,330 |  |  |  | 85,823 |
Health care |  |  | 125,304 |  |  |  | 11,031 |  |  |  | 6,274 |  |  |  | 87,507 |  |  |  | 2,269 |  |  |  | 18,223 |
Convenience stores |  |  | 142,537 |  |  |  | 12,593 |  |  |  | 29,299 |  |  |  | 65,031 |  |  |  | 14 |  |  |  | 35,600 |
Retail |  |  | 89,174 |  |  |  | 9,606 |  |  |  | 15,644 |  |  |  | 37,340 |  |  |  | 17,694 |  |  |  | 8,890 |
Restaurants |  |  | 48,172 |  |  |  | 4,010 |  |  |  | 3,503 |  |  |  | 22,316 |  |  |  | 15,095 |  |  |  | 3,248 |
Auto dealerships |  |  | 43,556 |  |  |  | 5,533 |  |  |  | 201 |  |  |  | 21,383 |  |  |  | 16,439 |  |  |  | — |
Nursing homes/senior living |  |  | 345,108 |  |  |  | 31,644 |  |  |  | — |  |  |  | 287,264 |  |  |  | — |  |  |  | 26,200 |
Other |  |  | 133,786 |  |  |  | 13,007 |  |  |  | 7,066 |  |  |  | 78,539 |  |  |  | 726 |  |  |  | 34,448 |
Total owner-occupied loans |  |  | 1,301,134 |  |  |  | 160,169 |  |  |  | 109,184 |  |  |  | 714,906 |  |  |  | 83,567 |  |  |  | 233,308 |
Loans secured by nonfarm, nonresidential properties |  | $ | 3,489,434 |  |  | $ | 960,656 |  |  | $ | 233,908 |  |  | $ | 1,431,968 |  |  | $ | 153,226 |  |  | $ | 709,676 |
(1) Includes Georgia Loan Production Office. |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

Note 4 – Yields on Earning Assets and Interest-Bearing Liabilities

The following table illustrates the yields on earning assets by category as well as the rates paid on interest-bearing liabilities on a tax equivalent basis:

|  | Quarter Ended |  |  | Year Ended |
|  | 12/31/2023 |  |  | 9/30/2023 |  |  | 6/30/2023 |  |  | 3/31/2023 |  |  | 12/31/2022 |  |  | 12/31/2023 |  |  | 12/31/2022 |
Securities – taxable |  |  | 1.85 | % |  |  | 1.89 | % |  |  | 1.87 | % |  |  | 1.85 | % |  |  | 1.71 | % |  |  | 1.86 | % |  |  | 1.55 | %
Securities – nontaxable |  |  | 3.81 | % |  |  | 4.05 | % |  |  | 4.25 | % |  |  | 4.00 | % |  |  | 3.95 | % |  |  | 4.04 | % |  |  | 3.97 | %
Securities – total |  |  | 1.85 | % |  |  | 1.89 | % |  |  | 1.87 | % |  |  | 1.86 | % |  |  | 1.72 | % |  |  | 1.87 | % |  |  | 1.56 | %
PPP loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 12.39 | % |  |  | — |  |  |  | 4.30 | %
Loans - LHFI & LHFS |  |  | 6.41 | % |  |  | 6.34 | % |  |  | 6.08 | % |  |  | 5.79 | % |  |  | 5.27 | % |  |  | 6.16 | % |  |  | 4.32 | %
Loans - total |  |  | 6.41 | % |  |  | 6.34 | % |  |  | 6.08 | % |  |  | 5.79 | % |  |  | 5.27 | % |  |  | 6.16 | % |  |  | 4.32 | %
Fed funds sold & reverse repurchases |  |  | 6.56 | % |  |  | 5.17 | % |  |  | 5.51 | % |  |  | 5.11 | % |  |  | 4.29 | % |  |  | 5.36 | % |  |  | 4.22 | %
Other earning assets |  |  | 5.87 | % |  |  | 5.01 | % |  |  | 5.36 | % |  |  | 4.09 | % |  |  | 3.76 | % |  |  | 5.10 | % |  |  | 0.89 | %
Total earning assets |  |  | 5.48 | % |  |  | 5.38 | % |  |  | 5.16 | % |  |  | 4.87 | % |  |  | 4.40 | % |  |  | 5.22 | % |  |  | 3.46 | %
Interest-bearing deposits |  |  | 2.67 | % |  |  | 2.39 | % |  |  | 1.96 | % |  |  | 1.53 | % |  |  | 0.71 | % |  |  | 2.16 | % |  |  | 0.28 | %
Fed funds purchased & repurchases |  |  | 5.26 | % |  |  | 5.14 | % |  |  | 5.01 | % |  |  | 4.49 | % |  |  | 3.44 | % |  |  | 4.97 | % |  |  | 2.16 | %
Other borrowings |  |  | 5.08 | % |  |  | 5.32 | % |  |  | 5.12 | % |  |  | 4.87 | % |  |  | 3.73 | % |  |  | 5.09 | % |  |  | 3.11 | %
Total interest-bearing liabilities |  |  | 2.89 | % |  |  | 2.72 | % |  |  | 2.42 | % |  |  | 1.98 | % |  |  | 1.03 | % |  |  | 2.51 | % |  |  | 0.43 | %
Total Deposits |  |  | 2.10 | % |  |  | 1.84 | % |  |  | 1.48 | % |  |  | 1.13 | % |  |  | 0.51 | % |  |  | 1.65 | % |  |  | 0.20 | %
Net interest margin |  |  | 3.25 | % |  |  | 3.29 | % |  |  | 3.33 | % |  |  | 3.39 | % |  |  | 3.66 | % |  |  | 3.32 | % |  |  | 3.17 | %
Net interest margin excluding PPP loans and the FRB balance |  |  | 3.16 | % |  |  | 3.24 | % |  |  | 3.23 | % |  |  | 3.36 | % |  |  | 3.66 | % |  |  | 3.25 | % |  |  | 3.30 | %

|  | TRUSTMARK CORPORATION AND SUBSIDIARIES
| NOTES TO CONSOLIDATED FINANCIALS
| December 31, 2023
| ($ in thousands)
| (unaudited)

Note 4 – Yields on Earning Assets and Interest-Bearing Liabilities (continued)

Reflected in the table above are yields on earning assets and liabilities, along with the net interest margin which equals reported net interest income-FTE, annualized, as a percent of average earning assets. In addition, the table includes net interest margin excluding PPP loans and the balance held at the Federal Reserve Bank of Atlanta (FRB), which equals reported net interest income-FTE excluding interest income on PPP loans and the FRB balance, annualized, as a percent of average earning assets excluding average PPP loans and the FRB balance.

For the fourth quarter of 2023, the average FRB balance totaled $572.0 million compared to $566.3 million for the third quarter of 2023 and is included in other earning assets in the accompanying average consolidated balance sheets.

The net interest margin excluding PPP loans and the FRB balance decreased 8 basis points when compared to the third quarter of 2023, totaling 3.16% for the fourth quarter of 2023, primarily due to increased costs of interest-bearing liabilities which resulted from the higher interest-rate environment and was partially offset by an increase in the yield on the loans held for investment and held for sale portfolio.

Note 5 – Mortgage Banking

Trustmark utilizes a portfolio of exchange-traded derivative instruments, such as Treasury note futures contracts and option contracts, to achieve a fair value return that offsets the changes in fair value of mortgage servicing rights (MSR) attributable to interest rates. These transactions are considered freestanding derivatives that do not otherwise qualify for hedge accounting under generally accepted accounting principles (GAAP). Changes in the fair value of these exchange-traded derivative instruments, including administrative costs, are recorded in noninterest income in mortgage banking, net and are offset by the changes in the fair value of the MSR. The MSR fair value represents the present value of future cash flows, which among other things includes decay and the effect of changes in interest rates. Ineffectiveness of hedging the MSR fair value is measured by comparing the change in value of hedge instruments to the change in the fair value of the MSR asset attributable to changes in interest rates and other market driven changes in valuation inputs and assumptions. The impact of this strategy resulted in a net negative hedge ineffectiveness of $2.2 million during the fourth quarter of 2023.

The following table illustrates the components of mortgage banking revenues included in noninterest income in the accompanying income statements:

|  | Quarter Ended |  |  | Year Ended |
|  | 12/31/2023 |  |  | 9/30/2023 |  |  | 6/30/2023 |  |  | 3/31/2023 |  |  | 12/31/2022 |  |  | 12/31/2023 |  |  | 12/31/2022 |
Mortgage servicing income, net |  | $ | 6,731 |  |  | $ | 6,916 |  |  | $ | 6,764 |  |  | $ | 6,785 |  |  | $ | 6,636 |  |  | $ | 27,196 |  |  | $ | 26,291 |
Change in fair value-MSR from runoff |  |  | (2,972 | ) |  |  | (3,203 | ) |  |  | (2,710 | ) |  |  | (1,145 | ) |  |  | (2,981 | ) |  |  | (10,030 | ) |  |  | (14,034 | )
Gain on sales of loans, net |  |  | 3,913 |  |  |  | 3,748 |  |  |  | 3,887 |  |  |  | 3,797 |  |  |  | 3,328 |  |  |  | 15,345 |  |  |  | 20,178 |
Mortgage banking income before hedge ineffectiveness |  |  | 7,672 |  |  |  | 7,461 |  |  |  | 7,941 |  |  |  | 9,437 |  |  |  | 6,983 |  |  |  | 32,511 |  |  |  | 32,435 |
Change in fair value-MSR from market changes |  |  | (10,224 | ) |  |  | 6,809 |  |  |  | 5,898 |  |  |  | (3,972 | ) |  |  | (3,348 | ) |  |  | (1,489 | ) |  |  | 38,181 |
Change in fair value of derivatives |  |  | 8,071 |  |  |  | (7,812 | ) |  |  | (7,239 | ) |  |  | 2,174 |  |  |  | (227 | ) |  |  | (4,806 | ) |  |  | (42,310 | )
Net positive (negative) hedge ineffectiveness |  |  | (2,153 | ) |  |  | (1,003 | ) |  |  | (1,341 | ) |  |  | (1,798 | ) |  |  | (3,575 | ) |  |  | (6,295 | ) |  |  | (4,129 | )
Mortgage banking, net |  | $ | 5,519 |  |  | $ | 6,458 |  |  | $ | 6,600 |  |  | $ | 7,639 |  |  | $ | 3,408 |  |  | $ | 26,216 |  |  | $ | 28,306 |

|  | TRUSTMARK CORPORATION AND SUBSIDIARIES
| NOTES TO CONSOLIDATED FINANCIALS
| December 31, 2023
| ($ in thousands)
| (unaudited)

Note 6 – Other Noninterest Income and Expense

Other noninterest income consisted of the following for the periods presented:

|  | Quarter Ended |  |  | Year Ended |
|  | 12/31/2023 |  |  | 9/30/2023 |  |  | 6/30/2023 |  |  | 3/31/2023 |  |  | 12/31/2022 |  |  | 12/31/2023 |  |  | 12/31/2022 |
Partnership amortization for tax credit purposes |  | $ | (2,013 | ) |  | $ | (1,995 | ) |  | $ | (2,019 | ) |  | $ | (1,961 | ) |  | $ | (1,869 | ) |  | $ | (7,988 | ) |  | $ | (6,211 | )
Increase in life insurance cash surrender value |  |  | 1,825 |  |  |  | 1,784 |  |  |  | 1,716 |  |  |  | 1,693 |  |  |  | 1,687 |  |  |  | 7,018 |  |  |  | 6,673 |
Other miscellaneous income |  |  | 2,767 |  |  |  | 2,610 |  |  |  | 3,998 |  |  |  | 2,782 |  |  |  | 2,493 |  |  |  | 12,157 |  |  |  | 9,380 |
Total other, net |  | $ | 2,579 |  |  | $ | 2,399 |  |  | $ | 3,695 |  |  | $ | 2,514 |  |  | $ | 2,311 |  |  | $ | 11,187 |  |  | $ | 9,842 |

Trustmark invests in partnerships that provide income tax credits on a Federal and/or State basis (i.e., new market tax credits, low-income housing tax credits and historical tax credits). The income tax credits related to these partnerships are utilized as specifically allowed by income tax law and are recorded as a reduction in income tax expense.

Other noninterest expense consisted of the following for the periods presented:

|  | Quarter Ended |  |  | Year Ended |
|  | 12/31/2023 |  |  | 9/30/2023 |  |  | 6/30/2023 |  |  | 3/31/2023 |  |  | 12/31/2022 |  |  | 12/31/2023 |  |  | 12/31/2022 |
Loan expense (1) |  | $ | 2,380 |  |  | $ | 3,130 |  |  | $ | 3,066 |  |  | $ | 2,538 |  |  | $ | 2,908 |  |  | $ | 11,114 |  |  | $ | 12,249 |
Amortization of intangibles |  |  | 128 |  |  |  | 129 |  |  |  | 130 |  |  |  | 288 |  |  |  | 312 |  |  |  | 675 |  |  |  | 1,434 |
FDIC assessment expense |  |  | 4,844 |  |  |  | 3,765 |  |  |  | 2,550 |  |  |  | 2,370 |  |  |  | 2,130 |  |  |  | 13,529 |  |  |  | 7,385 |
Other real estate expense, net |  |  | (184 | ) |  |  | (40 | ) |  |  | 171 |  |  |  | 172 |  |  |  | 18 |  |  |  | 119 |  |  |  | 1,173 |
Other miscellaneous expense |  |  | 9,473 |  |  |  | 8,714 |  |  |  | 8,585 |  |  |  | 9,443 |  |  |  | 9,767 |  |  |  | 36,215 |  |  |  | 33,601 |
Total other expense (1) |  | $ | 16,641 |  |  | $ | 15,698 |  |  | $ | 14,502 |  |  | $ | 14,811 |  |  | $ | 15,135 |  |  | $ | 61,652 |  |  | $ | 55,842 |

(1) During the first quarter of 2023, Trustmark reclassified its debit card transaction fees from other expense to services and fees. Prior periods have been reclassified accordingly.

Note 7 – Non-GAAP Financial Measures

In addition to capital ratios defined by GAAP and banking regulators, Trustmark utilizes various tangible common equity measures when evaluating capital utilization and adequacy. Tangible common equity, as defined by Trustmark, represents common equity less goodwill and identifiable intangible assets. Trustmark’s Common Equity Tier 1 capital includes common stock, capital surplus and retained earnings, and is reduced by goodwill and other intangible assets, net of associated net deferred tax liabilities as well as disallowed deferred tax assets and threshold deductions as applicable.

Trustmark believes these measures are important because they reflect the level of capital available to withstand unexpected market conditions. Additionally, presentation of these measures allows readers to compare certain aspects of Trustmark’s capitalization to other organizations. These ratios differ from capital measures defined by banking regulators principally in that the numerator excludes shareholders’ equity associated with preferred securities, the nature and extent of which varies across organizations. In Management’s experience, many stock analysts use tangible common equity measures in conjunction with more traditional bank capital ratios to compare capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase accounting method in accounting for mergers and acquisitions.

These calculations are intended to complement the capital ratios defined by GAAP and banking regulators. Because GAAP does not include these capital ratio measures, Trustmark believes there are no comparable GAAP financial measures to these tangible common equity ratios. Despite the importance of these measures to Trustmark, there are no standardized definitions for them and, as a result, Trustmark’s calculations may not be comparable with other organizations. Also, there may be limits in the usefulness of these measures to investors. As a result, Trustmark encourages readers to consider its audited consolidated financial statements and the notes related thereto in their entirety and not to rely on any single financial measure.

|  | TRUSTMARK CORPORATION AND SUBSIDIARIES
| NOTES TO CONSOLIDATED FINANCIALS
| December 31, 2023
| ($ in thousands except per share data)
| (unaudited)

Note 7 – Non-GAAP Financial Measures (continued)

|  |  |  | Quarter Ended |  |  | Year Ended |
|  |  |  | 12/31/2023 |  |  | 9/30/2023 |  |  | 6/30/2023 |  |  | 3/31/2023 |  |  | 12/31/2022 |  |  | 12/31/2023 |  |  | 12/31/2022 |
TANGIBLE EQUITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
AVERAGE BALANCES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total shareholders' equity |  |  |  | $ | 1,592,493 |  |  | $ | 1,582,885 |  |  | $ | 1,580,291 |  |  | $ | 1,523,828 |  |  | $ | 1,493,291 |  |  | $ | 1,570,098 |  |  | $ | 1,604,854 |
Less: Goodwill |  |  |  |  | (384,237 | ) |  |  | (384,237 | ) |  |  | (384,237 | ) |  |  | (384,237 | ) |  |  | (384,237 | ) |  |  | (384,237 | ) |  |  | (384,237 | )
Identifiable intangible assets |  |  |  |  | (3,044 | ) |  |  | (3,174 | ) |  |  | (3,301 | ) |  |  | (3,523 | ) |  |  | (3,816 | ) |  |  | (3,259 | ) |  |  | (4,312 | )
Total average tangible equity |  |  |  | $ | 1,205,212 |  |  | $ | 1,195,474 |  |  | $ | 1,192,753 |  |  | $ | 1,136,068 |  |  | $ | 1,105,238 |  |  | $ | 1,182,602 |  |  | $ | 1,216,305 |
PERIOD END BALANCES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total shareholders' equity |  |  |  | $ | 1,661,847 |  |  | $ | 1,570,351 |  |  | $ | 1,571,193 |  |  | $ | 1,562,099 |  |  | $ | 1,492,268 |  |  |  |  |  |  |
Less: Goodwill |  |  |  |  | (384,237 | ) |  |  | (384,237 | ) |  |  | (384,237 | ) |  |  | (384,237 | ) |  |  | (384,237 | ) |  |  |  |  |  |
Identifiable intangible assets |  |  |  |  | (2,965 | ) |  |  | (3,093 | ) |  |  | (3,222 | ) |  |  | (3,352 | ) |  |  | (3,640 | ) |  |  |  |  |  |
Total tangible equity |  | (a) |  | $ | 1,274,645 |  |  | $ | 1,183,021 |  |  | $ | 1,183,734 |  |  | $ | 1,174,510 |  |  | $ | 1,104,391 |  |  |  |  |  |  |
TANGIBLE ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total assets |  |  |  | $ | 18,722,189 |  |  | $ | 18,390,839 |  |  | $ | 18,422,626 |  |  | $ | 18,877,178 |  |  | $ | 18,015,478 |  |  |  |  |  |  |
Less: Goodwill |  |  |  |  | (384,237 | ) |  |  | (384,237 | ) |  |  | (384,237 | ) |  |  | (384,237 | ) |  |  | (384,237 | ) |  |  |  |  |  |
Identifiable intangible assets |  |  |  |  | (2,965 | ) |  |  | (3,093 | ) |  |  | (3,222 | ) |  |  | (3,352 | ) |  |  | (3,640 | ) |  |  |  |  |  |
Total tangible assets |  | (b) |  | $ | 18,334,987 |  |  | $ | 18,003,509 |  |  | $ | 18,035,167 |  |  | $ | 18,489,589 |  |  | $ | 17,627,601 |  |  |  |  |  |  |
Risk-weighted assets |  | (c) |  | $ | 15,153,263 |  |  | $ | 15,143,531 |  |  | $ | 14,966,614 |  |  | $ | 14,793,893 |  |  | $ | 14,521,078 |  |  |  |  |  |  |
NET INCOME (LOSS) ADJUSTED FOR INTANGIBLE AMORTIZATION |  |  |  |  |  |  |
Net income (loss) |  |  |  | $ | 36,123 |  |  | $ | 34,029 |  |  | $ | 45,037 |  |  | $ | 50,300 |  |  | $ | (34,063 | ) |  | $ | 165,489 |  |  | $ | 71,887 |
Plus: Intangible amortization net of tax |  |  |  |  | 96 |  |  |  | 96 |  |  |  | 97 |  |  |  | 216 |  |  |  | 234 |  |  |  | 505 |  |  |  | 1,076 |
Net income (loss) adjusted for intangible amortization |  | $ | 36,219 |  |  | $ | 34,125 |  |  | $ | 45,134 |  |  | $ | 50,516 |  |  | $ | (33,829 | ) |  | $ | 165,994 |  |  | $ | 72,963 |
Period end common shares outstanding |  | (d) |  |  | 61,071,173 |  |  |  | 61,070,095 |  |  |  | 61,069,036 |  |  |  | 61,048,516 |  |  |  | 60,977,686 |  |  |  |  |  |  |
TANGIBLE COMMON EQUITY MEASUREMENTS |  |  |  |  |  |  |
Return on average tangible equity (1) |  |  |  |  | 11.92 | % |  |  | 11.32 | % |  |  | 15.18 | % |  |  | 18.03 | % |  |  | -12.14 | % |  |  | 14.04 | % |  |  | 6.00 | %
Tangible equity/tangible assets |  | (a)/(b) |  |  | 6.95 | % |  |  | 6.57 | % |  |  | 6.56 | % |  |  | 6.35 | % |  |  | 6.27 | % |  |  |  |  |  |
Tangible equity/risk-weighted assets |  | (a)/(c) |  |  | 8.41 | % |  |  | 7.81 | % |  |  | 7.91 | % |  |  | 7.94 | % |  |  | 7.61 | % |  |  |  |  |  |
Tangible book value |  | (a)/(d)*1,000 |  | $ | 20.87 |  |  | $ | 19.37 |  |  | $ | 19.38 |  |  | $ | 19.24 |  |  | $ | 18.11 |  |  |  |  |  |  |
COMMON EQUITY TIER 1 CAPITAL (CET1) |  |  |  |  |  |  |
Total shareholders' equity |  |  |  | $ | 1,661,847 |  |  | $ | 1,570,351 |  |  | $ | 1,571,193 |  |  | $ | 1,562,099 |  |  | $ | 1,492,268 |  |  |  |  |  |  |
CECL transition adjustment |  |  |  |  | 13,000 |  |  |  | 13,000 |  |  |  | 13,000 |  |  |  | 13,000 |  |  |  | 19,500 |  |  |  |  |  |  |
AOCI-related adjustments |  |  |  |  | 219,723 |  |  |  | 287,888 |  |  |  | 265,704 |  |  |  | 242,381 |  |  |  | 275,403 |  |  |  |  |  |  |
CET1 adjustments and deductions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill net of associated deferred tax liabilities (DTLs) |  |  | (370,212 | ) |  |  | (370,219 | ) |  |  | (370,227 | ) |  |  | (370,234 | ) |  |  | (370,241 | ) |  |  |  |  |  |
Other adjustments and deductions for CET1 (2) |  |  | (2,693 | ) |  |  | (2,803 | ) |  |  | (2,915 | ) |  |  | (3,275 | ) |  |  | (3,258 | ) |  |  |  |  |  |
CET1 capital |  | (e) |  |  | 1,521,665 |  |  |  | 1,498,217 |  |  |  | 1,476,755 |  |  |  | 1,443,971 |  |  |  | 1,413,672 |  |  |  |  |  |  |
Additional tier 1 capital instruments plus related surplus |  |  | 60,000 |  |  |  | 60,000 |  |  |  | 60,000 |  |  |  | 60,000 |  |  |  | 60,000 |  |  |  |  |  |  |
Tier 1 capital |  |  |  | $ | 1,581,665 |  |  | $ | 1,558,217 |  |  | $ | 1,536,755 |  |  | $ | 1,503,971 |  |  | $ | 1,473,672 |  |  |  |  |  |  |
Common equity tier 1 capital ratio |  | (e)/(c) |  |  | 10.04 | % |  |  | 9.89 | % |  |  | 9.87 | % |  |  | 9.76 | % |  |  | 9.74 | % |  |  |  |  |  |

(1)
Calculation = ((net income (loss) adjusted for intangible amortization/number of days in period)*number of days in year)/total average tangible equity.
(2)
Includes other intangible assets, net of DTLs, disallowed deferred tax assets (DTAs), threshold deductions and transition adjustments, as applicable.

|  | TRUSTMARK CORPORATION AND SUBSIDIARIES
| NOTES TO CONSOLIDATED FINANCIALS
| December 31, 2023
| ($ in thousands except per share data)
| (unaudited)

Note 7 – Non-GAAP Financial Measures (continued)

Trustmark discloses certain non-GAAP financial measures because Management uses these measures for business planning purposes, including to manage Trustmark’s business against internal projected results of operations and to measure Trustmark’s performance. Trustmark views these as measures of our core operating business, which exclude the impact of the items detailed below, as these items are generally not operational in nature. These non-GAAP financial measures also provide another basis for comparing period-to-period results as presented in the accompanying selected financial data table and the audited consolidated financial statements by excluding potential differences caused by non-operational and unusual or non-recurring items. Readers are cautioned that these adjustments are not permitted under GAAP. Trustmark encourages readers to consider its consolidated financial statements and the notes related thereto in their entirety, and not to rely on any single financial measure.

The following table presents pre-provision net revenue (PPNR) during the periods presented:

|  |  |  | Quarter Ended |  |  | Year Ended |
|  |  |  | 12/31/2023 |  |  | 9/30/2023 |  |  | 6/30/2023 |  |  | 3/31/2023 |  |  | 12/31/2022 |  |  | 12/31/2023 |  |  | 12/31/2022 |
Net interest income (GAAP) |  | $ | 136,742 |  |  | $ | 138,637 |  |  | $ | 139,904 |  |  | $ | 137,595 |  |  | $ | 146,583 |  |  | $ | 552,878 |  |  | $ | 494,708 |
Noninterest income (GAAP) |  |  | 49,804 |  |  |  | 52,224 |  |  |  | 53,553 |  |  |  | 51,377 |  |  |  | 45,170 |  |  |  | 206,958 |  |  |  | 205,144 |
Pre-provision revenue | (a) | $ | 186,546 |  |  | $ | 190,861 |  |  | $ | 193,457 |  |  | $ | 188,972 |  |  | $ | 191,753 |  |  | $ | 759,836 |  |  | $ | 699,852 |
Noninterest expense (GAAP) |  | $ | 136,429 |  |  | $ | 140,945 |  |  | $ | 132,218 |  |  | $ | 128,327 |  |  | $ | 231,229 |  |  | $ | 537,919 |  |  | $ | 603,213 |
Less: | Reduction in force expense |  |  | (1,406 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1,406 | ) |  |  | — |
| Litigation settlement expense |  |  | — |  |  |  | (6,500 | ) |  |  | — |  |  |  | — |  |  |  | (100,750 | ) |  |  | (6,500 | ) |  |  | (100,750 | )
Adjusted noninterest expense - PPNR (Non-GAAP) | (b) | $ | 135,023 |  |  | $ | 134,445 |  |  | $ | 132,218 |  |  | $ | 128,327 |  |  | $ | 130,479 |  |  | $ | 530,013 |  |  | $ | 502,463 |
PPNR (Non-GAAP) | (a)-(b) | $ | 51,523 |  |  | $ | 56,416 |  |  | $ | 61,239 |  |  | $ | 60,645 |  |  | $ | 61,274 |  |  | $ | 229,823 |  |  | $ | 197,389 |

The following table presents adjustments to net income (loss) and select financial ratios as reported in accordance with GAAP resulting from significant non-routine items

occurring during the periods presented:

| Quarter Ended |  |  |  | Year Ended |
| 12/31/2023 |  |  |  | 12/31/2022 |  |  |  | 12/31/2023 |  |  |  | 12/31/2022 |
| Amount |  |  | Diluted EPS |  |  |  | Amount |  |  | Diluted EPS |  |  |  | Amount |  |  | Diluted EPS |  |  |  | Amount |  |  | Diluted EPS |
Net income (loss) (GAAP) | $ | 36,123 |  |  | $ | 0.59 |  |  |  | $ | (34,063 | ) |  | $ | (0.56 | ) |  |  | $ | 165,489 |  |  | $ | 2.70 |  |  |  | $ | 71,887 |  |  | $ | 1.17 |
Significant non-routine transactions (net of taxes): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Reduction in force expense |  | 1,055 |  |  |  | 0.02 |  |  |  |  | — |  |  |  | — |  |  |  |  | 1,055 |  |  |  | 0.02 |  |  |  |  | — |  |  |  | — |
Litigation settlement expense |  | — |  |  |  | — |  |  |  |  | 75,563 |  |  |  | 1.24 |  |  |  |  | 4,875 |  |  |  | 0.08 |  |  |  |  | 75,563 |  |  |  | 1.23 |
Net income adjusted for significant non-routine transactions (Non-GAAP) | $ | 37,178 |  |  | $ | 0.61 |  |  |  | $ | 41,500 |  |  | $ | 0.68 |  |  |  | $ | 171,419 |  |  | $ | 2.80 |  |  |  | $ | 147,450 |  |  | $ | 2.40 |
| Reported (GAAP) |  |  | Adjusted (Non-GAAP) |  |  |  | Reported (GAAP) |  |  | Adjusted (Non-GAAP) |  |  |  | Reported (GAAP) |  |  | Adjusted (Non-GAAP) |  |  |  | Reported (GAAP) |  |  | Adjusted (Non-GAAP) |
Return on average equity |  | 9.00 | % |  |  | 9.23 | % |  |  |  | -9.05 | % |  |  | 10.75 | % |  |  |  | 10.54 | % |  |  | 10.90 | % |  |  |  | 4.48 | % |  |  | 9.13 | %
Return on average tangible equity |  | 11.92 | % |  |  | 12.22 | % |  |  |  | -12.14 | % |  |  | 14.49 | % |  |  |  | 14.04 | % |  |  | 14.51 | % |  |  |  | 6.00 | % |  |  | 12.12 | %
Return on average assets |  | 0.77 | % |  |  | 0.79 | % |  |  |  | -0.76 | % |  |  | 0.93 | % |  |  |  | 0.89 | % |  |  | 0.92 | % |  |  |  | 0.41 | % |  |  | 0.84 | %

|  | TRUSTMARK CORPORATION AND SUBSIDIARIES
| NOTES TO CONSOLIDATED FINANCIALS
| December 31, 2023
| ($ in thousands)
| (unaudited)

Note 7 – Non-GAAP Financial Measures (continued)

The following table presents Trustmark’s calculation of its efficiency ratio for the periods presented:

|  |  |  | Quarter Ended |  |  | Year Ended |
|  |  |  | 12/31/2023 |  |  | 9/30/2023 |  |  | 6/30/2023 |  |  | 3/31/2023 |  |  | 12/31/2022 |  |  | 12/31/2023 |  |  | 12/31/2022 |
Total noninterest expense (GAAP) |  | $ | 136,429 |  |  | $ | 140,945 |  |  | $ | 132,218 |  |  | $ | 128,327 |  |  | $ | 231,229 |  |  | $ | 537,919 |  |  | $ | 603,213 |
Less: | Other real estate expense, net |  | 184 |  |  |  | 40 |  |  |  | (171 | ) |  |  | (172 | ) |  |  | (18 | ) |  |  | (119 | ) |  |  | (1,173 | )
| Amortization of intangibles |  | (128 | ) |  |  | (129 | ) |  |  | (130 | ) |  |  | (288 | ) |  |  | (312 | ) |  |  | (675 | ) |  |  | (1,434 | )
| Charitable contributions resulting in state tax credits |  | (325 | ) |  |  | (325 | ) |  |  | (325 | ) |  |  | (325 | ) |  |  | (375 | ) |  |  | (1,300 | ) |  |  | (1,500 | )
| Reduction in force expense |  |  | (1,406 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1,406 | ) |  |  | — |
| Litigation settlement expense |  | — |  |  |  | (6,500 | ) |  |  | — |  |  |  | — |  |  |  | (100,750 | ) |  |  | (6,500 | ) |  |  | (100,750 | )
Adjusted noninterest expense (Non-GAAP) | (c) | $ | 134,754 |  |  | $ | 134,031 |  |  | $ | 131,592 |  |  | $ | 127,542 |  |  | $ | 129,774 |  |  | $ | 527,919 |  |  | $ | 498,356 |
Net interest income (GAAP) |  | $ | 136,742 |  |  | $ | 138,637 |  |  | $ | 139,904 |  |  | $ | 137,595 |  |  | $ | 146,583 |  |  | $ | 552,878 |  |  | $ | 494,708 |
Add: | Tax equivalent adjustment |  |  | 3,306 |  |  |  | 3,299 |  |  |  | 3,383 |  |  |  | 3,477 |  |  |  | 3,451 |  |  |  | 13,465 |  |  |  | 12,345 |
Net interest income-FTE (Non-GAAP) | (a) | $ | 140,048 |  |  | $ | 141,936 |  |  | $ | 143,287 |  |  | $ | 141,072 |  |  | $ | 150,034 |  |  | $ | 566,343 |  |  | $ | 507,053 |
Noninterest income (GAAP) |  | $ | 49,804 |  |  | $ | 52,224 |  |  | $ | 53,553 |  |  | $ | 51,377 |  |  | $ | 45,170 |  |  | $ | 206,958 |  |  | $ | 205,144 |
Add: | Partnership amortization for tax credit purposes |  | 2,013 |  |  |  | 1,995 |  |  |  | 2,019 |  |  |  | 1,961 |  |  |  | 1,869 |  |  |  | 7,988 |  |  |  | 6,211 |
Less: | Securities (gains) losses, net |  | (39 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (39 | ) |  |  | — |
Adjusted noninterest income (Non-GAAP) | (b) | $ | 51,778 |  |  | $ | 54,219 |  |  | $ | 55,572 |  |  | $ | 53,338 |  |  | $ | 47,039 |  |  | $ | 214,907 |  |  | $ | 211,355 |
Adjusted revenue (Non-GAAP) | (a)+(b) | $ | 191,826 |  |  | $ | 196,155 |  |  | $ | 198,859 |  |  | $ | 194,410 |  |  | $ | 197,073 |  |  | $ | 781,250 |  |  | $ | 718,408 |
Efficiency ratio (Non-GAAP) | (c)/((a)+(b)) |  | 70.25 | % |  |  | 68.33 | % |  |  | 66.17 | % |  |  | 65.60 | % |  |  | 65.85 | % |  |  | 67.57 | % |  |  | 69.37 | %