Leases

9 Months Ended

Sep. 30, 2025

Note 7 – Leases

Lessor Arrangements

Trustmark leases certain types of machinery and equipment to its customers through sales-type and direct financing leases as part of its equipment financing portfolio. These leases generally have remaining lease terms of one to nine years, some of which include renewal options and/or options for the lessee to purchase the leased property near or at the end of the lease term. Trustmark recognized interest income from its sales-type and direct financing leases of $5.0 million and $12.8 million for the three and nine months ended September 30, 2025, respectively, compared to $3.6 million and $9.1 million for the three and nine months ended September 30, 2024, respectively. Trustmark does not have any significant operating leases in which it is the lessor.

The table below summarizes the components of Trustmark's net investment in its sales-type and direct financing leases for the periods presented ($ in thousands):


	September 30, 2025			December 31, 2024
Leases receivable	$	409,347		$	282,771
Unearned income		(64,921	)		(45,585	)
Initial direct costs		3,093			2,252
Unguaranteed lease residual		16,806			7,084
Total net investment	$	364,325		$	246,522

The table below details the minimum future lease payments for Trustmark's leases receivable at September 30, 2025 ($ in thousands):


	September 30, 2025
2025 (excluding the nine months ended September 30, 2025)	$	20,523
2026		74,607
2027		87,105
2028		76,710
2029		61,050
Thereafter		89,352
Lease receivable	$	409,347

Lessee Arrangements

For Trustmark's lessee arrangements, the leases of FBBI are included in discontinued operations and as a result, have been excluded from the amounts below. The following table details the components of net lease cost for the periods presented ($ in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Finance leases:
Amortization of right-of-use assets	$	113		$	113		$	339		$	339
Interest on lease liabilities		32			37			100			113
Operating lease cost		1,343			1,344			4,025			3,756
Short-term lease cost		162			61			481			173
Variable lease cost		232			218			674			623
Sublease income		(70	)		(58	)		(205	)		(63	)
Net lease cost	$	1,812		$	1,715		$	5,414		$	4,941

The following table details the cash payments included in the measurement of lease liabilities during the periods presented ($ in thousands):


	Nine Months Ended September 30,
	2025		2024
Finance leases:
Operating cash flows included in operating activities	$	100	$	113
Financing cash flows included in payments under finance lease obligations		338		315
Operating leases:
Operating cash flows (fixed payments) included in other operating activities, net		3,967		3,535
Operating cash flows (liability reduction) included in other operating activities, net		2,925		2,515

The following table details balance sheet information, as well as weighted-average lease terms and discount rates, related to leases at September 30, 2025 and December 31, 2024 ($ in thousands):


	September 30, 2025			December 31, 2024
Finance lease right-of-use assets, net of accumulated depreciation	$	2,960		$	3,299
Finance lease liabilities		3,572			3,910
Operating lease right-of-use assets		33,012			34,668
Operating lease liabilities		37,100			38,698

Weighted-average lease term:
Finance leases	6.61 years			7.35 years
Operating leases	8.90 years			9.31 years

Weighted-average discount rate:
Finance leases		3.61	%		3.61	%
Operating leases		4.03	%		3.72	%

At September 30, 2025, future minimum rental commitments under finance and operating leases were as follows ($ in thousands):


	Finance Leases			Operating Leases
2025 (excluding the nine months ended September 30, 2025)	$	145		$	1,335
2026		589			5,259
2027		594			5,207
2028		599			4,966
2029		633			4,802
Thereafter		1,454			23,299
Total minimum lease payments		4,014			44,868
Less imputed interest		(442	)		(7,768	)
Lease liabilities	$	3,572		$	37,100