TRUSTMARK CORP (TRMK)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following provides a narrative discussion and analysis of Trustmark Corporation’s (Trustmark) financial condition and results of operations. This discussion should be read in conjunction with the unaudited consolidated financial statements and the supplemental financial data included in Part I. Item 1. – Financial Statements of this report.

Description of Business

Trustmark, a Mississippi business corporation incorporated in 1968, is a bank holding company headquartered in Jackson, Mississippi. Trustmark’s principal subsidiary is Trustmark Bank (TB), a Mississippi-chartered banking corporation. TB is a member bank of the Federal Reserve System and is supervised by the Federal Reserve Bank of Atlanta (FRBA) and the Mississippi Department of Banking and Consumer Finance (MDBCF). In addition, as a large provider of consumer financial services, TB remains subject to regulation, supervision, enforcement and examination by the Consumer Financial Protection Bureau (CFPB). Dividends from TB are Trustmark’s principal source of cash. Effective July 1, 2026, TB was no longer required to obtain approval from the MDBCF, except under certain enumerated supervisory circumstances, prior to the declaration and payment of its quarterly dividend as a result of the enactment of Mississippi Senate Bill 2383, which amended the Mississippi banking code. At June 30, 2026, TB had total assets of $19.190 billion, which represented 99.99% of the consolidated assets of Trustmark.

Through TB and its other subsidiaries, Trustmark operates as a financial services organization providing banking and other financial solutions through offices and 2,583 full-time equivalent associates (measured at June 30, 2026) located in the states of Alabama, Florida (primarily in the northwest or “Panhandle” region of that state, which is referred to herein as Trustmark’s Florida market), Georgia (primarily in Atlanta, which is referred to herein as Trustmark's Georgia market), Mississippi, Tennessee (in the Memphis and Northern Mississippi regions, which are collectively referred to herein as Trustmark’s Tennessee market), and Texas (primarily in Houston, which is referred to herein as Trustmark’s Texas market). Trustmark’s operations are managed along two operating segments: General Banking Segment and Wealth Management Segment. For a complete overview of Trustmark’s business, see the section captioned “The Corporation” included in Part I. Item 1. – Business of Trustmark’s Annual Report on Form 10-K for its fiscal year ended December 31, 2025 (2025 Annual Report).

Executive Overview

Trustmark completed the following non-routine transactions during the second quarter of 2026:

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Trustmark sold a portfolio of 1-4 family mortgage loans that were primarily three payments delinquent and/or nonaccrual totaling $73.8 million, which resulted in a loss of $11.3 million. Total reserves released or used due to the sale of 1-4 family mortgage loans were $15.5 million, of which $9.2 million ($6.9 million, net of taxes) were released and recorded to PCL, LHFI sale of 1-4 family mortgage loans and $6.3 million (the credit related portion of the loss) were recorded as charge-offs against the ACL, LHFI. The noncredit-related portion of the loss totaled $5.0 million ($3.8 million, net of taxes) and was recorded to noninterest income in other, net. In total, the sale of the 1-4 family mortgage loans resulted in an increase in pre-tax net income of $4.2 million ($3.2 million net of taxes).

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TB and Visa completed an exchange, offered by Visa to institutional holders of certain classes of its common stock, in which TB received shares of Visa Class B-3 common stock (Visa B-3 shares) and Visa Class C common stock (Visa C shares) for its outstanding shares of Visa Class B-2 common stock (Visa B-2 shares). Two-thirds of the Visa C shares received by TB were converted to Visa Class A common stock (Visa A shares) pursuant to the terms thereof and subsequently sold, resulting in a gain of $3.3 million ($2.5 million, net of taxes). The remaining one-third of the Visa C shares received by TB were recognized at fair value, which resulted in a gain of $1.7 million ($1.2 million, net of taxes). The total gain on the Visa shares was recorded to noninterest income in other, net. The Visa B-3 shares were recorded at their nominal carrying value.

For further information regarding these non-routine transactions and the impact to Trustmark's financial results, see the section captioned "Non-GAAP Financial Measures."

In addition to these non-routine transactions, Trustmark's financial results for the three and six months ended June 30, 2026 reflected diversified growth in loans held for investment (LHFI), stable credit quality and cost-effective core deposit growth. Trustmark's capital position remained solid, reflecting the consistent profitability of its diversified financial services businesses. Trustmark continued to implement organic growth initiatives and make investments to capitalize on opportunities in its marketplace. With robust capital, liquidity and profitability, Trustmark is well-positioned to continue to compete in changing economic conditions and create long-term value for its shareholders. On July 28, 2026, Trustmark’s Board of Directors declared a quarterly cash dividend of $0.25 per share. The dividend is payable September 15, 2026, to shareholders of record on September 1, 2026.

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Recent Economic and Industry Developments

Economic activity during the first six months of 2026 expanded at a moderate pace, supported by continued consumer spending and business investment, including investment in artificial intelligence (AI) infrastructure, while inflationary pressures, elevated energy prices, tariffs and geopolitical uncertainty weighed on the outlook. Labor market conditions remained relatively stable, with unemployment little changed, but inflation remained above the FRB’s longer-run objective and contributed to a more cautious monetary policy posture. Economic concerns remain as a result of the cumulative weight of uncertainty regarding the potential economic impact of geopolitical developments, such as the conflicts in Ukraine and the Middle East, the current United States presidential administration's policies, inflationary and broader pricing pressures, volatility in energy prices and other economic and industry volatility. Concerns surrounding the direction of global markets and the potential impact on the United States economy are expected to persist for the near term. While Trustmark's customer base is wholly domestic, international economic conditions affect domestic economic conditions, and thus may have an impact upon Trustmark's financial condition or results of operations.

The FRB decreased the target federal funds rate to a range of 3.50% to 3.75% and the rate it pays on reserves to 3.65% as of December 2025. The FRB left the target federal funds rate and the rate it pays on reserves unchanged during the first six months of 2026 as policymakers assessed the competing risks of persistent inflation, slowing growth and heightened global uncertainty. Prior period rate increases increased the competitive pressures on Trustmark's deposit cost of funds. While rate cuts potentially reduced those competitive pressures, they increased pressure on Trustmark's net interest margin, a key component to its financial results. It is not possible to predict the direction, pace or magnitude of further changes, if any, in interest rates, or the impact any such rate changes will have on Trustmark's results of operations.

In the May and July 2026 “Summary of Commentary on Current Economic Conditions by Federal Reserve District,” the twelve Federal Reserve Districts’ (Districts) reports suggested that during the reporting periods (covering the periods from April 6, 2026 through May 27, 2026 and May 28, 2026 through July 6, 2026) overall economic activity increased at a slight to moderate pace in most Districts. The May report indicated that economic activity increased at a slight to moderate pace in ten of the twelve Districts, while one District reported a slight decline and one reported no change. The July report indicated that economic activity increased at a slight to moderate pace in eleven of the twelve Districts, while one District reported no change. Reports by the twelve Districts noted the following during the reporting periods:

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On balance, consumer spending was mixed to slightly higher, with affordability pressures, higher prices and elevated fuel costs contributing to greater price sensitivity and substitution toward lower-cost goods and services. Higher-income consumers generally remained more resilient, while middle- and lower-income consumers continued to show signs of financial strain. Auto dealers reported softer or little-changed new vehicle sales, with affordability and fuel costs weighing on demand and some consumers shifting toward used or hybrid vehicles or delaying purchases and increasing spending on repairs.

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Manufacturing activity increased at a modest to moderate pace in most Districts, supported by demand from the data center, machinery and defense sectors. Manufacturers in several Districts noted supply chain constraints related to trade policy and the conflict in the Middle East, which prompted price increases in raw materials and transportation costs. Energy activity increased in certain markets, including increased oil and gas drilling in the later reporting period, although producers remained cautious amid uncertainty regarding fuel prices. Agricultural conditions were generally unchanged or deteriorated, reflecting lower commodity prices, higher input costs and tighter credit conditions. Transportation activity increased modestly amid ongoing supply chain changes related to higher tariffs and the conflict in the Middle East.

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Banking and financial conditions were generally stable on net. Commercial and consumer loan volumes were stable to modestly higher, with commercial lending and commercial real estate opportunities cited as areas of relative strength in some Districts. Commercial loan quality was generally stable, while consumer loan quality weakened modestly and several Districts noted rising delinquencies in residential mortgage, consumer and agricultural loan portfolios. Construction and real estate activity increased slightly overall in the later reporting period, supported in part by data center construction, while residential real estate activity remained constrained by affordability pressures, mortgage rates and limited inventory in some markets. Commercial real estate conditions were mixed, with relatively stronger demand for industrial and data center-related properties and continued softness in portions of the office market.

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Business outlooks were mixed but generally anticipated continued modest expansion in the coming months. Elevated uncertainty remained a common theme, with contacts citing the potential effects of higher fuel costs, tariffs, supply chain adjustments, geopolitical developments and changing consumer behavior. Many firms continued to take a cautious approach to hiring, pricing and capital investment decisions, although sentiment improved in some Districts during the later reporting period.

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Employment was little changed to modestly higher overall. The May report indicated little to no change in employment across most Districts, with hiring generally selective and focused on critical roles or replacement hiring. The July report indicated somewhat broader employment gains, with five Districts reporting modest, moderate or solid employment growth and the remaining Districts reporting little to no change. Labor availability improved in many areas, but employers continued to report

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difficulty finding skilled workers, particularly technicians, trades people and

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following provides a narrative discussion and analysis of Trustmark’s financial condition and results of operations. This discussion should be read in conjunction with the consolidated financial statements and the supplemental financial data included in Part II. Item 8. – Financial Statements and Supplementary Data of this report. Further discussion and analysis of Trustmark’s financial condition and results of operations for the years ended December 31, 2024 and 2023 are included in the respective sections within Part II. Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations of Trustmark’s Annual Report filed on Form 10-K for the year ended December 31, 2024.

Executive Overview

Trustmark has been committed to meeting the banking and financial needs of its customers and communities for over 130 years and remains focused on providing support, advice and solutions to its customers' unique needs. Trustmark achieved record earnings in 2025, reflecting significant achievement across its diverse financial services businesses. During 2025, Trustmark's traditional banking business drove continued loan and deposit growth, a strong net interest margin and solid credit quality. Trustmark's mortgage banking business increased production and achieved significant improvement in profitability during 2025, while revenue from its wealth management business reached an all-time high.

These accomplishments are the result of focused efforts to enhance Trustmark's long-term performance and competitiveness. Trustmark continues to implement technology and streamline processes to enhance its ability to grow and serve customers. Trustmark is well-positioned to compete in changing economic conditions and create long-term value for its shareholders. The Board of Directors of Trustmark announced a 4.2% increase in its regular quarterly cash dividend to $0.25 per share from $0.24 per share, reflecting Trustmark's profitability and financial strength. The dividend is payable March 15, 2026, to shareholders of record on March 1, 2026. Trustmark’s payment of the dividend will be funded fully by a dividend from TB to Trustmark, which the MDBCF approved on January 28, 2026.

Financial Highlights

Quarter Ended December 31, 2025

Trustmark reported net income of $57.9 million, or basic and diluted EPS of $0.97, for the fourth quarter of 2025, compared to net income of $56.3 million, or basic and diluted EPS of $0.92, for the fourth quarter of 2024. Trustmark’s reported performance during the quarter ended December 31, 2025, produced a return on average tangible equity of 12.82%, a return on average assets of 1.23%, an average equity to average assets ratio of 11.35% and a dividend payout ratio of 24.74%, compared to a return on average tangible equity

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of 13.68%, a return on average assets of 1.23%, an average equity to average assets ratio of 10.82% and a dividend payout ratio of 25.00% during the quarter ended December 31, 2024.

The increase in net income when the fourth quarter of 2025 is compared to the fourth quarter of 2024 was principally due to an increase in revenue and a decrease in the PCL, LHFI, partially offset by increases in noninterest expense and income taxes. Revenue totaled $204.1 million for the quarter ended December 31, 2025 compared to $196.8 million for the quarter ended December 31, 2024, an increase of $7.3 million, or 3.7%. The increase in revenue for the fourth quarter of 2025 compared to the same time period in 2024 primarily resulted from an increase in net interest income, principally due to a decline in interest expense on deposits.

Net interest income for the fourth quarter of 2025 totaled $162.9 million, an increase of $7.0 million, or 4.5%, when compared to the fourth quarter of 2024. Interest income totaled $239.3 million for the fourth quarter of 2025, a decrease of $417 thousand, or 0.2%, when compared to the same time period in 2024, principally due to a decline in other interest income primarily due to a decline in the average balance held at the FRBA and the FRB's decision to lower the rate it pays on reserves, partially offset by a slight increase in interest and fees on LHFS and LHFI. Interest expense totaled $76.4 million for the fourth quarter of 2025, a decrease of $7.5 million, or 8.9%, when compared to the same time period in 2024, primarily due to a decline in interest on deposits. Interest expense on deposits totaled $67.7 million for the fourth quarter of 2025, a decline of $8.2 million, or 10.9%, when compared to the fourth quarter of 2024 primarily due to declines in interest expense on brokered and personal certificates of deposit (CDs), all categories of money market demand deposit accounts (MMDA) and commercial interest checking accounts, primarily reflecting a decline in interest rates.

Noninterest income (loss) for the fourth quarter of 2025 totaled $41.2 million, an increase of $285 thousand, or 0.7%, when compared to the fourth quarter of 2024, principally due to an increase in wealth management largely offset by a decline in other, net. Wealth management totaled $11.1 million for the fourth quarter of 2025, an increase of $1.8 million, or 19.5%, when compared to the same time period in 2024, principally due to an increase in income from brokerage and trust management services. Other, net totaled $2.7 million for the fourth quarter of 2025, a decrease of $1.6 million, or 36.1%, when compared to the same time period in 2024, principally due to a decrease in income from other partnership investments and an increase in amortization of tax credit partnerships.

Noninterest expense for the fourth quarter of 2025 totaled $132.2 million, an increase of $7.7 million, or 6.2%, when compared to the fourth quarter of 2024, principally due to an increase in salaries and employee benefits. Salaries and employee benefits totaled $75.1 million for the fourth quarter of 2025, an increase of $5.9 million, or 8.5%, when compared to the fourth quarter of 2024 primarily due to increases in salaries expense, principally due to general merit increases and new associates added during 2025, annual management performance incentive compensation expense and broker commissions expense.

Trustmark’s PCL, LHFI for the three months ended December 31, 2025 totaled a negative $550 thousand compared to $7.0 million for the three months ended December 31, 2024, a decrease of $7.5 million, primarily due to positive credit migration partially offset by loan growth and changes in the macroeconomic forecast. The PCL, off-balance sheet credit exposures totaled $1.8 million for the three months ended December 31, 2025 compared to $502 thousand for the three months ended December 31, 2024, an increase of $1.3 million, primarily due to increases in the total reserve rate and unfunded commitments partially offset by positive credit migration. Please see the section captioned “Provision for Credit Losses,” for additional information regarding the PCL on LHFI and off-balance sheet credit exposures.

Year Ended December 31, 2025

For the year ended December 31, 2025, Trustmark reported net income of $224.1 million, or basic and diluted EPS of $3.72 and $3.70, respectively, compared to $223.0 million, or basic and diluted EPS of $3.65 and $3.63, respectively, for the year ended December 31, 2024 and $165.5 million, or basic and diluted EPS of $2.71 and $2.70, respectively, for the year ended December 31, 2023. Trustmark’s reported performance for the year ended December 31, 2025, produced a return on average tangible equity of 12.97%, a return on average assets of 1.21% and a dividend payout ratio of 25.81%, compared to a return on average tangible equity of 15.20%, a return on average assets of 1.20% and a dividend payout ratio of 25.21% for the year ended December 31, 2024 and a return on average tangible equity of 14.04%, a return on average assets of 0.89% and a dividend payout ratio of 33.95% for the year ended December 31, 2023. Trustmark’s average equity to average assets ratio was 11.16%, 9.84% and 8.41% for the years ended December 31, 2025, 2024 and 2023, respectively.

Trustmark completed the sale of FBBI during the second quarter of 2024. As such, financial results for the years ended December 31, 2024 and 2023, consist of both continuing and discontinued operations. The discontinued operations include the financial results of FBBI prior to the sale as well as the net gain on the sale. Trustmark reported net income from continuing operations of $45.2 million and $153.3 million for the years ended December 31, 2024 and 2023, respectively. Trustmark's reported performance from continuing operations for the year ended December 31, 2024 produced a return on average tangible equity of 3.04%, a return on average assets of 0.24% and a dividend payout ratio of 124.32%, compared to a return on average tangible equity of 12.43%, a return on average assets of 0.82% and a dividend payout ratio of 36.65% for the year ended December 31, 2023. The increase in net income from continuing

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operations when 2025 is compared to 2024 was principally due to an increase in revenue and a decline in PCL, LHFI, partially offset by increases in income taxes and noninterest expense.

Revenue totaled $799.8 million for the year ended December 31, 2025, compared to $561.0 million and $701.3 million for the years ended December 31, 2024 and 2023, respectively, an increase of $238.8 million, or 42.6%, and a decrease of $140.3 million, or 20.0%, respectively. The increase in revenue for 2025 compared to 2024 was principally due to (i) an increase in noninterest income (loss), primarily as a result of the loss on the sale of available for sale securities during the second quarter of 2024 and increases in mortgage banking, net and wealth management, partially offset by a decrease in other, net, and (ii) an increase in net interest income, primarily resulting from a decline in total interest expense and an increase in interest on securities, partially offset by declines in interest and fees from LHFS and LHFI and other interest income.

Net interest income for the year ended December 31, 2025 totaled $636.1 million, an increase of $51.7 million, or 8.8%, when compared to the year ended December 31, 2024. Interest income totaled $948.6 million for the year ended December 31, 2025, a decrease of $11.7 million, or 1.2%, when compared to the year ended December 31, 2024, reflecting declines in interest and fees on LHFS and LHFI, primarily due to a decrease in interest rates, and other interest income, primarily due to a decline in the average balance held at the FRBA and the FRB's decision to lower the rate it pays on reserves, partially offset by an increase in interest on securities, primarily as a result of higher yielding securities purchased during 2025 and the restructuring of the available for sale securities portfolio during the second quarter of 2024. Interest expense totaled $312.5 million for the year ended December 31, 2025, a decrease of $63.4 million, or 16.9%, when compared to the year ended December 31, 2024, reflecting declines in all categories of interest expense. Interest on deposits totaled $274.7 million for 2025, a decrease of $54.7 million, or 16.6%, when compared to 2024, primarily reflecting declines in interest on brokered and personal CDs, personal and commercial MMDA and public and commercial interest checking accounts, principally due to declines in interest rates. Other interest expense for 2025 totaled $20.3 million, a decrease of $6.1 million, or 23.0%, when compared to 2024, primarily due to a decline in interest expense on FHLB advances, principally due to a decline in rates on short-term FHLB advances, partially offset by an increase in subordinated debt issuance cost as a result of the $175.0 million of subordinated notes issued durin

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