Shareholders' Equity

12 Months Ended

Dec. 31, 2022

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Note 17 – Shareholders’ Equity

Regulatory Capital

Trustmark and TNB are subject to minimum risk-based capital and leverage capital requirements, as described in the section captioned “Capital Adequacy” included in Part I. Item 1. – Business of this report, which are administered by the federal bank regulatory agencies. These capital requirements, as defined by federal regulations, involve quantitative and qualitative measures of assets, liabilities and certain off-balance sheet instruments. Trustmark’s and TNB’s minimum risk-based capital requirements include a capital conservation buffer of 2.500% at both December 31, 2022 and 2021. Accumulated other comprehensive income (loss), net of tax, is not included in computing regulatory capital. Trustmark elected the five-year phase-in transition period (through December 31, 2024) related to adopting FASB ASU 2016-13 for regulatory capital purposes. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the financial statements of Trustmark and TNB and limit Trustmark’s and TNB’s ability to pay dividends. At December 31, 2022, Trustmark and TNB exceeded all applicable minimum capital standards. In addition, Trustmark and TNB met applicable regulatory guidelines to be considered well-capitalized at December 31, 2022. To be categorized in this manner, Trustmark and TNB maintained minimum common equity Tier 1 risk-based capital, Tier 1 risk-based capital, total risk-based capital and Tier 1 leverage ratios as set forth in the accompanying table, and were not subject to any written agreement, order or capital directive, or prompt corrective action directive issued by their primary federal regulators to meet and maintain a specific capital level for any capital measures. There are no significant conditions or events that have occurred since December 31, 2022, which Management believes have affected Trustmark’s or TNB’s present classification.

The following table provides Trustmark’s and TNB’s actual regulatory capital amounts and ratios under regulatory capital standards in effect at December 31, 2022 and 2021 ($ in thousands):

	Actual
	Regulatory Capital					Minimum			To Be Well
	Amount		Ratio			Requirement			Capitalized
At December 31, 2022:
Common Equity Tier 1 Capital (to Risk Weighted Assets)
Trustmark Corporation	$	1,413,672		9.74	%		7.000	%	n/a
Trustmark National Bank		1,501,889		10.34	%		7.000	%		6.50	%
Tier 1 Capital (to Risk Weighted Assets)
Trustmark Corporation	$	1,473,672		10.15	%		8.500	%	n/a
Trustmark National Bank		1,501,889		10.34	%		8.500	%		8.00	%
Total Capital (to Risk Weighted Assets)
Trustmark Corporation	$	1,729,499		11.91	%		10.500	%	n/a
Trustmark National Bank		1,634,454		11.26	%		10.500	%		10.00	%
Tier 1 Leverage (to Average Assets)
Trustmark Corporation	$	1,473,672		8.47	%		4.00	%	n/a
Trustmark National Bank		1,501,889		8.65	%		4.00	%		5.00	%
At December 31, 2021:
Common Equity Tier 1 Capital (to Risk Weighted Assets)
Trustmark Corporation	$	1,425,227		11.29	%		7.000	%	n/a
Trustmark National Bank		1,518,599		12.03	%		7.000	%		6.50	%
Tier 1 Capital (to Risk Weighted Assets)
Trustmark Corporation	$	1,485,227		11.77	%		8.500	%	n/a
Trustmark National Bank		1,518,599		12.03	%		8.500	%		8.00	%
Total Capital (to Risk Weighted Assets)
Trustmark Corporation	$	1,710,700		13.55	%		10.500	%	n/a
Trustmark National Bank		1,621,030		12.84	%		10.500	%		10.00	%
Tier 1 Leverage (to Average Assets)
Trustmark Corporation	$	1,485,227		8.73	%		4.00	%	n/a
Trustmark National Bank		1,518,599		8.94	%		4.00	%		5.00	%

Dividends on Common Stock

Dividends paid by Trustmark are substantially funded from dividends received from TNB. Approval by TNB’s regulators is required if the total of all dividends declared in any calendar year exceeds the total of its net income for that year combined with its retained net income of the preceding two years. In 2023, TNB will have available approximately $96.9 million plus its net income for that year to pay as dividends.

Stock Repurchase Program

The Board of Directors of Trustmark authorized a stock repurchase program effective April 1, 2019 under which $100.0 million of Trustmark’s outstanding common stock could be acquired through March 31, 2020. The adoption of this stock repurchase program followed the receipt of non-objection from the FRB. Trustmark repurchased approximately 887 thousand shares of its common stock valued at $27.5 million during the year ended December 31, 2020, compared to approximately 601 thousand shares of its common stock valued at $19.7 million during the year ended December 31, 2019. Under the 2019 program, Trustmark repurchased approximately 1.5 million shares of its common stock valued at $47.2 million.

On January 28, 2020, the Board of Directors of Trustmark authorized a stock repurchase program effective April 1, 2020 under which $100.0 million of Trustmark’s outstanding common stock could be acquired through December 31, 2021. On March 9, 2020, Trustmark suspended its share repurchase programs to preserve capital to support customers during the COVID-19 pandemic. Trustmark resumed the repurchase of its shares in January 2021. Under this authority, Trustmark repurchased approximately 1.9 million shares of its outstanding common stock valued at $61.8 million during the year ended December 31, 2021.

On December 7, 2021, Trustmark’s Board of Directors authorized a stock repurchase program effective January 1, 2022, under which $100.0 million of Trustmark’s outstanding shares could be acquired through December 31, 2022. Under this authority, Trustmark repurchased approximately 789 thousand shares of its common stock valued at $24.6 million during the twelve months ended December 31, 2022.

On December 6, 2022, Trustmark’s Board of Directors authorized a stock repurchase program effective January 1, 2023, under which $50.0 million of Trustmark’s outstanding shares may be acquired through December 31, 2023. The repurchase program, which is subject to market conditions and management discretion, will be implemented through open market repurchases or privately negotiated transactions. No shares have been repurchased under this stock repurchase program.

Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss)

The following tables present the net change in the components of accumulated other comprehensive income (loss) and the related tax effects allocated to each component for the years ended December 31, 2022, 2021 and 2020 ($ in thousands). The amortization of prior service cost, recognized net loss due to lump sum settlements and change in net actuarial loss are included in the computation of net periodic benefit cost (see Note 14 – Defined Benefit and Other Postretirement Benefits for additional details). Reclassification adjustments related to pension and other postretirement benefit plans are included in salaries and employee benefits and other expense in the accompanying consolidated statements of income. Reclassification adjustments related to the cash flow hedge derivatives are included in interest and fees on LHFS and LHFI in the accompanying consolidated statements of income.

	Before Tax			Tax (Expense)			Net of Tax
	Amount			Benefit			Amount
Year Ended December 31, 2022
Securities available for sale and transferred securities:
Net unrealized holding gains (losses) arising during the period	$	(229,524	)	$	57,381		$	(172,143	)
Change in net unrealized holding loss on securities transferred to held to maturity		(86,033	)		21,508			(64,525	)
Total securities available for sale and transferred securities		(315,557	)		78,889			(236,668	)
Pension and other postretirement benefit plans:
Change in the actuarial loss of pension and other postretirement    benefit plans		10,792			(2,698	)		8,094
Reclassification adjustments for changes realized in net income:
Net change in prior service costs		111			(28	)		83
Recognized net loss due to lump sum settlements		—			—			—
Change in net actuarial loss		1,089			(272	)		817
Total pension and other postretirement benefit plans		11,992			(2,998	)		8,994
Cash flow hedge derivatives:
Change in accumulated gain (loss) on effective cash flow hedge derivatives		(20,685	)		5,171			(15,514	)
Reclassification adjustment for (gain) loss realized in net income		460			(115	)		345
Total cash flow hedge derivatives		(20,225	)		5,056			(15,169	)
Total other comprehensive income (loss)	$	(323,790	)	$	80,947		$	(242,843	)
Year Ended December 31, 2021
Securities available for sale and transferred securities:
Net unrealized holding gains (losses) arising during the period	$	(49,454	)	$	12,364		$	(37,090	)
Change in net unrealized holding loss on securities transferred to held to maturity		2,647			(662	)		1,985
Total securities available for sale and transferred securities		(46,807	)		11,702			(35,105	)
Pension and other postretirement benefit plans:
Change in the actuarial loss of pension and other postretirement    benefit plans		2,845			(711	)		2,134
Reclassification adjustments for changes realized in net income:
Net change in prior service costs		111			(27	)		84
Recognized net loss due to lump sum settlements		183			(46	)		137
Change in net actuarial loss		1,655			(414	)		1,241
Total pension and other postretirement benefit plans		4,794			(1,198	)		3,596
Total other comprehensive income (loss)	$	(42,013	)	$	10,504		$	(31,509	)
Year Ended December 31, 2020
Securities available for sale and transferred securities:
Net unrealized holding gains (losses) arising during the period	$	30,622		$	(7,657	)	$	22,965
Change in net unrealized holding loss on securities transferred to held to maturity		3,177			(794	)		2,383
Total securities available for sale and transferred securities		33,799			(8,451	)		25,348
Pension and other postretirement benefit plans:
Change in the actuarial loss of pension and other postretirement    benefit plans		(5,128	)		1,282			(3,846	)
Reclassification adjustments for changes realized in net income:
Net change in prior service costs		150			(38	)		112
Recognized net loss due to lump sum settlements		119			(30	)		89
Change in net actuarial loss		1,128			(282	)		846
Total pension and other postretirement benefit plans		(3,731	)		932			(2,799	)
Total other comprehensive income (loss)	$	30,068		$	(7,519	)	$	22,549

The following table presents the changes in the balances of each component of accumulated other comprehensive income (loss) for the periods presented ($ in thousands). All amounts are presented net of tax.

	Securities Available for Sale and Transferred Securities			Defined Benefit Pension Items			Cash Flow Hedge Derivative			Total
Balance, January 1, 2020	$	(8,017	)	$	(15,583	)	$	—		$	(23,600	)
Other comprehensive income (loss) before    reclassification		25,348			(3,846	)		—			21,502
Amounts reclassified from accumulated other    comprehensive income (loss)		—			1,047			—			1,047
Net other comprehensive income (loss)		25,348			(2,799	)		—			22,549
Balance, December 31, 2020		17,331			(18,382	)		—			(1,051	)
Other comprehensive income (loss) before    reclassification		(35,105	)		2,134			—			(32,971	)
Amounts reclassified from accumulated other    comprehensive income (loss)		—			1,462			—			1,462
Net other comprehensive income (loss)		(35,105	)		3,596			—			(31,509	)
Balance, December 31, 2021		(17,774	)		(14,786	)		—			(32,560	)
Other comprehensive income (loss) before reclassification		(236,668	)		8,094			(15,514	)		(244,088	)
Amounts reclassified from accumulated other    comprehensive income (loss)		—			900			345			1,245
Net other comprehensive income (loss)		(236,668	)		8,994			(15,169	)		(242,843	)
Balance, December 31, 2022	$	(254,442	)	$	(5,792	)	$	(15,169	)	$	(275,403	)