Trustmark : Fourth Quarter & Fiscal Year 2021 Financial Results Presentation

Fourth Quarter &

Fiscal Year 2021

Financial Results

January 25, 2022

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. Furthermore, many of these risks and uncertainties are currently amplified by and may continue to be amplified by or may, in the future, be amplified by, the novel coronavirus (COVID-19) pandemic, and also by the effectiveness of varying governmental responses in ameliorating the impact of the pandemic on our customers and the economies where they operate.

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, our ability to manage the impact of the COVID- 19 pandemic on our markets and our customers, as well as the effectiveness of actions of federal, state and local governments and agencies (including the Board of Governors of the Federal Reserve System (FRB)) to mitigate its spread and economic impact, 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 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.

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Financial Highlights

Performance reflects continued balance sheet growth, strong credit quality and disciplined expense management

	• Loans Held for Investment (HFI) increased $72.9 million, or 0.7%, linked-quarter
Earnings	and $423.3 million, or 4.3%, year-over-year
• Deposits increased $164.3 million, or 1.1%, linked-quarter and $1.0 billion, or 7.4%,
Drivers	year-over-year
	• Investment securities increased $128.9 million, or 3.7%, linked-quarter and $1.1
	billion, or 41.6%, year-over-year
	• Mortgage loan production totaled $590.7 million for the fourth quarter , down
	16.7% linked-quarter; in 2021 mortgage loan production totaled $2.8 billion, down
	6.1% year-over-year
Profitable	• Net interest income (FTE) excluding interest and fees on PPP loans totaled $100.8
Revenue	million in the fourth quarter, an increase of $1.2 million, or 1.2%, linked-quarter
• Noninterest income totaled $50.8 million , representing 34.1% of total revenue in
Generation
the fourth quarter

• Insurance and Wealth Management businesses had record year with revenue up 7.4% and 11.3%, respectively

	Expense	• Adjusted noninterest expense(1) totaled $471.3 million in 2021, a 3.5 % year-over-
	Management	year increase; in fourth quarter, adjusted noninterest expense totaled $118.2
	million, up 1.3% linked-quarter
	Credit	• Credit quality remained solid, nonperforming assets declined 10.1% from the prior
	year
	Quality	• Recoveries exceeded charge-offs by $3.7 million in 2021
		• Provision for credit losses on loans HFI totaled a negative $4.5 million in fourth
		quarter and a negative $21.5 million in 2021
	Capital	• Maintained strong capital levels with CET1 ratio of 11.29% and total risk-based
	Management	capital ratio of 13.55%
	• Repurchased $27.1 million, or approximately 816 thousand shares of common
		stock in the fourth quarter; for the full year, Trustmark repurchased $61.8
		million, or approximately 1.9 million shares of common stock

At December 31, 2021

Total Assets	$17.6 billion
Loans (HFI)	$10.2 billion
Total Deposits	$15.1 billion
Banking Centers	180

		Years-Ended
	Q4-21	2021	2020
Net Income	$26.2	$147.4	$160.0
($ in millions)
EPS -	$0.42	$2.34	$2.51
Diluted
ROAA	0.60%	0.86%	1.05%
ROATCE	7.72%	10.81%	12.58%
Dividends /	$0.23	$0.92	$0.92
Share
TE/TA	7.86%	7.86%	8.34%

Source: Company reports • Board of Directors declared quarterly cash dividend of $0.23 per share

(1) For Non-GAAP measures, please refer to the Earnings Release dated January 25, 2022 and the Consolidated Financial Information, Note 10 - Non-GAAP Financial Measures

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Loans Held for Investment (LHFI) Portfolio

Focus on profitable, credit-disciplined loan growth continued

LHFI				Change
($ in millions)
	12/31/2021		LQ		Y-o-Y
Loans secured by real estate:
Const., land dev. and other land loans	$	1,309	$	22	$	(0)
Secured by 1-4 family residential prop.		1,978		87		237
Secured by nonfarm, nonresidential prop.		2,977		52		268
Other real estate secured		726		(260)		(340)
Commercial and industrial loans		1,414		87		105
Consumer loans		159		2		(2)
State and other political subdivision loans		1,146		21		145
Other loans		538		62		10
Total LHFI	$	10,248	$	73	$	423

LHFI by Quarter

$10,248

				$10,153	$10,175
			$9,984
$9,825
Dollar Change:	$159	$169	$22		$73
	Q4-20		Q1-21	Q2-21	Q3-21	Q4-21

Source: Company reports

(1) Percentages may not sum to 100% due to rounding.

Loan Portfolio Composition 12/31/21(1)

	Other RE, 7%
C&I, 14%	Nonfarm-Nonres,
	29%
Consumer, 2%

State & Other

Political Sub., 11%

Other, 5%

1-4 Residential,

Construction,19%

Land Dev, 13%

• Trustmark has no loan exposure in which the source of repayment or the underlying security of such exposure is tied to the realization of value from energy reserves
• • Total energy-related sector exposure of $322 million with outstanding balances of $112 million - representing 1% of total LHFI - at December 31, 2021
  • At December 31, 2021, nonaccrual energy- related loans represented less than 1 basis point of both energy-related loans and outstanding
    LHFI

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Real Estate Secured Loan Portfolio Detail

CRE Portfolio		% of CRE
($ in millions)		Portfolio
	12/31/21
Lots, Development and Unimproved Land	$ 304	8%
1-4 Family Construction	293	8%
Other Construction	712	19%
Total Construction, Land Development and	$ 1,309	35%
Other Land Loans
Retail	352	9%
Offices	209	6%
Hotels/Motels	348	9%
Industrial	346	9%
Other (including REITs)	521	14%
Total Non-owner Occupied & REITs	$ 1,776	48%
Multi-Family(1)	649	17%
Total CRE	$ 3,734	100%

Source: Company reports

(1) Multi-Family is included in Other Real Estate Secured Loans in Financials

Owner-Occupied NonFarm,		% of Owner-
NonResidential		Occupied
($ in millions)		Portfolio
	12/31/21
Offices	$ 170	14%
Churches	83	7%
Industrial Warehouses	182	15%
Health Care	141	12%
Convenience Stores	131	11%
Nursing Homes/Senior Living	197	16%
Other	301	25%
Total Owner-Occupied	$ 1,205	100%

• Focus on vertical construction with limited exposure to unimproved land and development
• Well-diversifiedproduct and geographical mix
• Balanced between non-owner and owner-occupied portfolios
• Virtually no REIT outstandings ($4.4 million)

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