Trustmark NASDAQ: TRMK reported what management described as a strong start to 2026, pointing to loan and deposit growth, stable credit quality and rising non-interest income alongside flat quarterly expenses.
First-quarter results and balance sheet trends
President and CEO Duane Dewey said the company “continue[s] to build upon a strong momentum from our earnings in 2025,” and highlighted continued loan growth, a “cost-effective core deposit base,” and “diligent expense management.”
For the first quarter, Trustmark posted net income of $56.1 million, or $0.95 per diluted share. Dewey said the quarter produced a return on average assets of 1.2% and a return on average tangible equity of 12.58%.
On the balance sheet, loans held for investment increased $203.7 million, or 1.5% linked-quarter, and rose $636.5 million, or 4.8% year-over-year, with Dewey calling the portfolio “well-diversified by loan type and geography.” Deposits grew $212.7 million, or 1.4% from the prior quarter, driven by seasonal increases in public deposits, and were up $631.8 million, or 4.2% year-over-year, supported by personal and commercial growth.
The cost of total deposits was 1.63%, down 9 basis points from the prior quarter, which Dewey described as a continuing strength for the franchise.
Revenue mix, margin and expenses
Trustmark reported first-quarter revenue of $203 million, down 0.6% sequentially on a seasonal basis and up 4.2% from the year-ago quarter. Net interest income on a fully tax-equivalent basis totaled $163.5 million, producing a net interest margin of 3.81%, unchanged from the prior quarter.
Non-interest income totaled $42.3 million, up 2.7% from the prior quarter and representing 20.9% of total revenue. Non-interest expense totaled $132.2 million, unchanged from the prior quarter and up $8.1 million year-over-year.
During Q&A, CFO Tom Owens discussed the company’s net interest margin outlook in the context of changing expectations for Federal Reserve rate cuts. Owens said Trustmark bases its guidance on market-implied forwards, which “have removed any further Fed rate cuts this year.” He said management anticipates “a few basis points of decline” in both deposit costs and loan yields in the second quarter, while securities yields should “continue to grind a little bit higher” due to repricing of held-to-maturity securities.
Owens said the company is modeling “a basis point or so of accretion on a linked-quarter basis each quarter this year,” adding that deposit competition remains elevated as “loan growth continues to outpace deposit growth.” He also noted CD repricing as a tailwind to lower deposit costs, offset in part by “migration for exception pricing on money market accounts.”
On expenses, Owens said management’s mindset for 2026 was to target break-even operating leverage given “the investments we’re making in revenue producers and the investments we’re making in technology,” calling both items headwinds to achieving positive leverage this year.
Credit quality and allowance commentary
Trustmark reported net charge-offs of $1.3 million, representing 4 basis points of average loans, and a net provision for credit losses of $2.7 million. The allowance for credit losses ended the quarter at 1.16% of loans held for investment, and Dewey characterized credit performance as “very solid.”
In response to analyst questions about a rise in nonperforming loans, Chief Credit and Operations Officer Barry Harvey said the increase was largely tied to “one credit,” a commercial real estate project that moved into non-accrual status after previously being rated substandard. Harvey said the borrower “does not see a value from their perspective to continue to make payments based on the appraisal,” while adding, “There’s a lot of equity in the project.” He said the loan was impaired and “reserved appropriately,” and that the borrower had a letter of intent in place that had not yet been converted to a purchase and sale agreement.
Harvey added that, within the CRE portfolio, the company was “very encouraged” that certain anticipated paydowns—particularly on some substandard credits—did not occur in the first quarter and could materialize later in the year. He said management sees “more positive news from the standpoint of more either upgrades or payoffs coming out of the CRE book than we do deterioration.”
Guidance affirmed, capital actions, and strategic priorities
Dewey said Trustmark is affirming its previously issued full-year 2026 guidance. Management expects loans held for investment to increase at a single-digit rate and deposits (excluding brokered deposits) to rise at a mid-single-digit pace. The company expects securities balances to remain stable as it reinvests cash flows, net interest margin to range between 3.80% and 3.85%, and net interest income to increase at a mid-single-digit rate. Non-interest income and non-interest expense are also expected to increase mid-single digits, while credit costs are expected to “normalize,” including off-balance sheet exposure.
On capital deployment, Dewey said the company maintains a preference for “organic loan growth, potential market expansion, M&A, or other general corporate purposes depending on market conditions.” Trustmark repurchased $19.8 million of stock in the quarter (about 477,000 shares), part of a previously announced authorization to repurchase up to $100 million of common shares during 2026. The board also declared a quarterly dividend of $0.25 per share, payable June 15, 2026, to shareholders of record June 1.
Asked about the pace of buybacks, Owens said the company “leaned into it” in the first quarter amid a “downdraft in bank stock prices,” and suggested $20 million per quarter—or $80 million for the year—could be “the high end” if loan growth remains robust. Dewey added that management was “probably thinking $70 million-$80 million deployment for the full year.”
Management also discussed ongoing investments in hiring revenue producers, particularly in growth markets. Dewey said the company added roughly seven new production hires in the first quarter, following approximately 13 in the fourth quarter of 2025 and 21 in the third quarter. Owens noted the intention is to invest in 2026 with the expectation that returns ramp in future years.
In wealth management, Dewey said revenue is influenced by market appreciation, but added the company is seeing solid new-business development and improved production. He also highlighted a brokerage platform change completed last year from LPL to Raymond James, saying the business is now “fully stabilized” and management has expectations for improved performance.
Regarding M&A, Dewey said Trustmark remains interested in expansion in key markets, but noted that discussions have tempered amid broader uncertainty, citing “the war and related economic issues” and high gas prices. He said there was “no real change” in the company’s strategic view, while emphasizing that organic execution remains the current focus.
About Trustmark NASDAQ: TRMK
Trustmark Corporation is a financial services holding company headquartered in Jackson, Mississippi. Through its principal subsidiary, Trustmark National Bank, the company provides a broad spectrum of commercial and consumer banking services. Trustmark's offerings include deposit accounts, lending solutions, cash management services, residential and commercial mortgage financing, and credit card processing.
In addition to traditional banking, Trustmark offers trust and wealth management services designed to meet the needs of high-net-worth individuals, families and institutional clients.
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