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TRUSTMARK CORP earnings calls

TRMK · every analyst question and management's answer

Oct 28, 2026 earnings call — Branch sale and investment portfolio restructuring

Branch sale generated a pretax gain of $61.5 million after transaction related expenses.

Revenue $0.2B (est $0.2B) · EPS $1.00 (est $1.00)

Key quotes

"We also repositioned our investment securities portfolio, reclassifying held to maturity securities to available-for-sale. We sold $629.5 million of securities yielding a weighted average of 1.4% and purchased $628 million of securities yielding a weighted average of approximately 5%."

— Duane Arthur Dewey (CEO) · Balance sheet actions

"And the pipeline as it sits today of approved commitments is around $1 billion."

— Barry Harvey · Loan pipeline and growth

"Brokered deposits now represent just 1.3% of total deposits."

— Joseph E. Bond (CFO) · Deposits and funding

Analyst Q&A 5

deposit betas and Q4 loan pipeline

Q (Michael Rose · Raymond James): He asked for assumptions on deposit betas and how deposits and loan pricing will behave beyond Q4. He also asked what will drive the big loan growth pickup expected in Q4.

A: They assume a full year of rate movement and expect total deposit beta of around 40 basis points, with CDs following after about 6 months and interest-bearing transaction deposits lagging. The approved loan pipeline is just a little less than $1 billion and management said close rates are strong, with momentum and many vetted deals likely to fund in Q4. They also noted an additional $110 million of public finance funding now available.

"The beta that we are assuming assumes a full year of rate movement So typically, that will work out into total deposit of around 40 basis points." — Joseph E. Bond (CFO)

pipeline size, payoffs, and deposit beta

Q (Stephen Scouten · Piper Sandler): He asked how the current approved pipeline compares quarter-over-quarter and what to expect for payoffs versus last quarter. He also asked about the deposit beta assumptions and whether the 40%/55% figures are the right way to think about it.

A: They said it is hard to compare quarter-over-quarter because they changed how they evaluate the pipeline, but they believe the pipeline is stronger than historically. Unexpected payoffs happen each quarter and third-quarter unexpected payoffs were about $214 million; scheduled payoffs are in line with the prior three quarters. Management said they do not have a mix shift in their forecast today, though they acknowledged mix risk could occur.

"We do feel like that it is a is stronger pipeline than we have had historically." — Barry Harvey

higher rates and loan demand

Q (Feddie Strickland · Hovde Group): He asked if higher rates would slow loan activity near term and whether recent levels are a pause or a longer slowdown. He also asked whether M&A conversations have changed with higher rates.

A: They are already seeing a bit of a pause as market participants take more time to evaluate rate direction, and construction or stabilization delays on CRE add typical slowdowns. Some completed or stabilizing projects are staying on the bank’s books and are variable rate, so higher indexes give the bank benefit while helping runoff cover; management said they are encouraged by that. On M&A, conversations are about the same overall, and they still view scale as critically important.

"So we are encouraged that this, that the little bit higher rates are or the belief that there is going to be higher rates will allow these projects to stay a little longer than we anticipated." — Barry Harvey

operating leverage and profit upside

Q (KBW): He asked whether higher margin next quarter plus steady expense guidance implies operating leverage into 2027. He also asked what the ultimate upside to profitability could be after recent insurance, bond, and HTM moves.

A: They said yes, they see upside opportunity across the business from net interest margin, deposit and funding dynamics, and net interest and noninterest revenue items. Management reiterated focus on intense organic growth and selective M&A, noting they hired 18 to 19 new production professionals in Q3 2026 to drive growth. They view operating leverage as achievable if growth and margin trends continue.

"I do see there is upside opportunity really across all avenues in terms of what is driving the net interest margin, the dynamics of our deposit base and funding there." — Joseph E. Bond (CFO)

stress testing and underwriting for CRE loans

Q (Christopher Marinac · Brean): He asked how their stress testing on debt service coverage works and whether the recent rate moves change that process. He also asked if the larger pipeline deals were vetted on that basis and if deal sizes have changed.

A: They run bottom-up stress testing annually and top-down twice a year, and they stress interest rates and feed results to treasury for enterprise stress testing. On a credit-only basis they review approximately 50% of credits annually and get another 30% coverage for about 75-80% of the book; covenants use the higher of actual rate, underwriting rate, or a 10-year Treasury plus 200 to 250 basis points. They vet pipeline deals daily against today’s rate view, will require more equity if a deal is too tight, and said deal sizes have not changed though they may add a couple million on the edges to keep preferred multi-bank structures.

"On a credit only basis, we have an annual review process to where we look at approximately 50% of our credits through the annual review process." — Barry Harvey

AI-generated notes on the earnings call transcript. Quotes are taken from the transcript. This is not a FolioObs investment view.

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