Shareholders' Equity

6 Months Ended

Jun. 30, 2023

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Note 15 – 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 Trustmark’s 2022 Annual 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 2.50%. 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. As of June 30, 2023, Trustmark and TNB exceeded all applicable minimum capital standards. In addition, Trustmark and TNB met applicable regulatory guidelines to be considered well-capitalized at June 30, 2023. To be categorized in this manner, Trustmark and TNB maintained, as applicable, 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 June 30, 2023, 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 June 30, 2023 and December 31, 2022 ($ in thousands):

	Actual
	Regulatory Capital					Minimum			To Be Well
	Amount		Ratio			Requirement			Capitalized
At June 30, 2023:
Common Equity Tier 1 Capital (to Risk Weighted Assets)
Trustmark Corporation	$	1,476,755		9.87	%		7.00	%	n/a
Trustmark National Bank		1,561,498		10.43	%		7.00	%		6.50	%
Tier 1 Capital (to Risk Weighted Assets)
Trustmark Corporation	$	1,536,755		10.27	%		8.50	%	n/a
Trustmark National Bank		1,561,498		10.43	%		8.50	%		8.00	%
Total Capital (to Risk Weighted Assets)
Trustmark Corporation	$	1,807,941		12.08	%		10.50	%	n/a
Trustmark National Bank		1,709,312		11.42	%		10.50	%		10.00	%
Tier 1 Leverage (to Average Assets)
Trustmark Corporation	$	1,536,755		8.35	%		4.00	%	n/a
Trustmark National Bank		1,561,498		8.50	%		4.00	%		5.00	%
At December 31, 2022:
Common Equity Tier 1 Capital (to Risk Weighted Assets)
Trustmark Corporation	$	1,413,672		9.74	%		7.00	%	n/a
Trustmark National Bank		1,501,889		10.34	%		7.00	%		6.50	%
Tier 1 Capital (to Risk Weighted Assets)
Trustmark Corporation	$	1,473,672		10.15	%		8.50	%	n/a
Trustmark National Bank		1,501,889		10.34	%		8.50	%		8.00	%
Total Capital (to Risk Weighted Assets)
Trustmark Corporation	$	1,729,499		11.91	%		10.50	%	n/a
Trustmark National Bank		1,634,454		11.26	%		10.50	%		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	%

Stock Repurchase Program

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 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 periods presented ($ 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 10 – 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.

	Three Months Ended June 30, 2023									Three Months Ended June 30, 2022
	Before Tax Amount			Tax (Expense) Benefit			Net of Tax Amount			Before Tax Amount			Tax (Expense) Benefit			Net of Tax Amount
Securities available for sale and transferred securities:
Net unrealized holding gains (losses) arising    during the period	$	(19,633	)	$	4,910		$	(14,723	)	$	(44,529	)	$	11,132		$	(33,397	)
Change in net unrealized holding loss on    securities transferred to held to maturity		3,940			(985	)		2,955			(33,784	)		8,446			(25,338	)
Total securities available for sale    and transferred securities		(15,693	)		3,925			(11,768	)		(78,313	)		19,578			(58,735	)
Pension and other postretirement benefit plans:
Reclassification adjustments for changes    realized in net income:
Net change in prior service costs		27			(7	)		20			27			(6	)		21
Recognized net loss due to lump sum    settlements		—			—			—			—			—			—
Change in net actuarial loss		69			(17	)		52			304			(76	)		228
Total pension and other postretirement    benefit plans		96			(24	)		72			331			(82	)		249
Cash flow hedge derivatives:
Change in accumulated gain (loss) on effective    cash flow hedge derivatives		(19,500	)		4,875			(14,625	)		—			—			—
Reclassification adjustment for (gain) loss realized    in net income		3,997			(999	)		2,998			—			—			—
Total cash flow hedge derivatives		(15,503	)		3,876			(11,627	)		—			—			—
Total other comprehensive income (loss)	$	(31,100	)	$	7,777		$	(23,323	)	$	(77,982	)	$	19,496		$	(58,486	)

	Six Months Ended June 30, 2023									Six Months Ended June 30, 2022
	Before Tax Amount			Tax (Expense) Benefit			Net of Tax Amount			Before Tax Amount			Tax (Expense) Benefit			Net of Tax Amount
Securities available for sale and transferred securities:
Net unrealized holding gains (losses) arising    during the period	$	10,901		$	(2,494	)	$	8,407		$	(200,200	)	$	50,050		$	(150,150	)
Change in net unrealized holding loss on    securities transferred to held to maturity		7,799			(1,950	)		5,849			(33,251	)		8,313			(24,938	)
Total securities available for sale    and transferred securities		18,700			(4,444	)		14,256			(233,451	)		58,363			(175,088	)
Pension and other postretirement benefit plans:
Reclassification adjustments for changes    realized in net income:
Net change in prior service costs		55			(14	)		41			55			(14	)		41
Recognized net loss due to lump sum    settlements		25			(6	)		19			—			—			—
Change in net actuarial loss		146			(36	)		110			619			(154	)		465
Total pension and other postretirement    benefit plans		226			(56	)		170			674			(168	)		506
Cash flow hedge derivatives:
Change in accumulated gain (loss) on effective    cash flow hedge derivatives		(13,231	)		3,308			(9,923	)		—			—			—
Reclassification adjustment for (gain) loss realized    in net income		6,928			(1,732	)		5,196			—			—			—
Total cash flow hedge derivatives		(6,303	)		1,576			(4,727	)		—			—			—
Total other comprehensive income (loss)	$	12,623		$	(2,924	)	$	9,699		$	(232,777	)	$	58,195		$	(174,582	)

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 Derivatives			Total
Balance at January 1, 2023	$	(254,442	)	$	(5,792	)	$	(15,169	)	$	(275,403	)
Other comprehensive income (loss) before reclassification		14,256			—			(9,923	)		4,333
Amounts reclassified from accumulated other    comprehensive income (loss)		—			170			5,196			5,366
Net other comprehensive income (loss)		14,256			170			(4,727	)		9,699
Balance at June 30, 2023	$	(240,186	)	$	(5,622	)	$	(19,896	)	$	(265,704	)
Balance at January 1, 2022	$	(17,774	)	$	(14,786	)	$	—		$	(32,560	)
Other comprehensive income (loss) before reclassification		(175,088	)		—			—			(175,088	)
Amounts reclassified from accumulated other    comprehensive income (loss)		—			506			—			506
Net other comprehensive income (loss)		(175,088	)		506			—			(174,582	)
Balance at June 30, 2022	$	(192,862	)	$	(14,280	)	$	—		$	(207,142	)