Slide 1: Fixed Income Investor Presentation
Issuer Free Writing Prospectus Filed pursuant to Rule 433 Dated November 18, 2020 Registration No. 333-250158 Fixed Income Investor Presentation November 18, 2020Issuer Free Writing Prospectus Filed pursuant to Rule 433 Dated November 18, 2020 Registration No. 333-250158 Fixed Income Investor Presen
Slide 2: Forward-Looking Statements
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,” “
Slide 3: Offering Summary
Offering Summary Issuer: Trustmark Corporation (NASDAQ: TRMK) Security: 10NC‐5 Fixed‐to‐Floating Rate Subordinated Holding Company Notes Format: SEC Registered Size: $100MM Expected Ratings: BBB‐ (S&P) / BBB (Fitch) Optional Redemption: Par Call Option After 5 Years and Thereafter Interest Rate: Fix
Slide 4: Pro Forma Impact of Offering
Pro Forma Impact of Offering § Current and pro forma capital well in excess of minimum regulatory requirements § Tier 2 qualifying subordinated debt being issued will further strengthen regulatory capital ratios Minimum Illustrative Pro Well Capitalized Requirement Q3‐20 Ratio Increase / Decrease Fo
Slide 5: Today's Presenters
Today’s Presenters Tom Owens Gerard Jerry Host EVP, Treasurer Chairman, President & CEO 7 Years at Trustmark, 36 Years at Trustmark, 33 Years of industry experience 48 Years of industry experience Duane Dewey Barry Harvey Director, COO EVP, Chief Credit Officer 17 Years at Trustmark 21 Years at Trus
Slide 6: Trustmark Corporation Investment Highlights
Trustmark Corporation Investment Highlights Who We Are • Attractive diversified business across products • Diversified financial services company headquartered in Jackson, MS, offering banking, wealth management, and and sectors risk management solutions in 187 locations throughout the Southeast U.S
Slide 7: Leading Market Share Across Attractive Markets
Leading Market Share Across Attractive Markets #1 Bank in Mississippi • Leading bank in Mississippi Deposits Mkt Share Bank Dep. Rank Branches • Top 4 market share in 50% of MSAs ($MM) (%) • Top 3 market share in 55% of counties, top 4 in 66% 9,187 1 14.2 114 Trustmark 8,141 2 12.6 118 Regions Finan
Slide 8: Q3-20 Financial Highlights
Q3‐20 Financial Highlights Performance reflects value of diversified financial services businesses • Diversified business model provided stability in challenging economic At September 30, 2020 Earnings environment; noninterest income increased 6.0% LQ Drivers Total Assets $15.6 billion • Results ref
Slide 9: Loans Held for Investment (LHFI) Portfolio
Loans Held for Investment (LHFI) Portfolio Focused on profitable, credit‐disciplined loan growth LHFI Change (1) ($ in millions) Loan Portfolio Composition 9/30/20 9/30/20 LQ Y‐o‐Y Other RE, 9% Loans secured by real estate: Nonfarm‐Nonres, 27% C&I, 14% Const., land dev. and other land loans $ 1,386
Slide 10: Real Estate Secured Loan Portfolio Detail
Real Estate Secured Loan Portfolio Detail CRE Portfolio As Reported % of CRE Owner‐Occupied NonFarm, % of Owner‐ ($ in millions) Portfolio NonResidential Occupied ($ in millions) As Reported Portfolio 9/30/20 9/30/20 Lots, Development and Unimproved Land $ 253 7% Offices $ 181 16% 1‐4 Family Constru
Slide 11: Commercial Loan Portfolio Detail
Commercial Loan Portfolio Detail Commercial Portfolio % of Commercial • Portfolio includes commercial, financial intermediaries, ($ in millions) As Reported Portfolio agriculture production and non‐profits 9/30/20 • Well‐diversified portfolio with no single category exceeding 13% Finance & Insurance
Slide 12: COVID-19 Impacted Industries
COVID‐19 Impacted Industries At September 30, 2020 Restaurants Hotels Retail (CRE) Energy Higher Risk C&I •$473 million Outstanding •$110 million Outstanding •$11 million Outstanding •$119 million •$380 million Outstanding Outstanding •$560 million Exposure •$347 million Exposure •$14 million Exposu
Slide 13: Strong Consistent History of Credit Risk Management
Strong Consistent History of Credit Risk Management (Loans HFI) (1) Allowance for Credit Losses / Loans Nonperforming Assets (excl. Acquired Loans) (%) ($ in millions) 1.24% $132 1.23% 1.05% $111 $111 0.95% 0.91% 0.90% 0.90% 0.90% $96 $82 $77 $78 $43 $70 $68 $62 $35 $29 $25 $16 $18 $68 $62 $55 $53 $
Slide 14: Disciplined CECL Process
Disciplined CECL Process Allowance for Credit Losses ($ in millions) $2 $(6) $16 $122 • Net charge‐ • Other $21 offs changes including • Qualitative individually changes including analyzed $8 changes due to reserves, $(2) COVID‐19 prepayment $84 • Quantitative portfolio review studies, etc. changes
Slide 15: Securities Portfolio
Securities Portfolio High quality, short duration portfolio provides strong liquidity Available‐for‐Sale & Held‐To‐Maturity Securities Net Unrealized Gains (losses) on Available for Sale Securities September 30, 2020 ($ in millions) ($ in millions) $45 US Government $42 Agency Obligations $59 RMBS P
Slide 16: Attractive, Low-Cost Deposit Base
Attractive, Low‐Cost Deposit Base Deposit Trends ($ in billions) $13.5 $13.2 $1.5 $1.5 11% $11.6 $11.4 $11.2 $10.6 $10.1 $1.6 $9.9 $9.7 $1.9 $1.6 $9.6 $4.1 $1.8 33% $4.3 $1.6 $2.3 $1.9 $1.7 $7.9 $7.6 $3.6 $7.0 $3.6 $3.9 $3.4 $1.8 $3.6 $2.0 $3.0 $3.3 $3.0 $2.1 $4.0 26% $3.5 $2.3 $3.4 $2.1 $3.1 $2.6 $
Slide 17: Strong Capital Position
Strong Capital Position Solid capital position reflects consistent profitability, resulting in strong capital return Common Equity Tier 1 Risk‐Based Capital Ratio Tier 1 Risk‐Based Capital Ratio 12.57% 12.16% 13.21% 11.93% 11.77% 11.77% 12.76% 12.48% 11.42% 11.35% 11.36% 12.33% 12.33% 11.94% 11.88%
Slide 18: Net Interest Income
Net Interest Income (2) Yields and Costs (1) Net Interest Income – FTE 4.90% 4.67% 4.54% ($ in millions) 4.03% 3.81% $112 3.61% 3.52% 3.52% $109 $109 $108 3.14% $107 3.05% $2 $2 $7 $5 2.27% 2.28% 2.26% 2.18% 2.05% $109 $107 $107 0.99% 0.88% 0.75% $103 $102 0.39% 0.33% Q3‐19 Q4‐19 Q1‐20 Q2‐20 Q3‐20 Q
Slide 19: Attractive Diversified Fee Income Business
Attractive Diversified Fee Income Business Noninterest Income – Q3‐20 Noninterest Income Change ($ in millions) Other, net Service Charges on Q3‐20 Q2‐20 Y‐o‐Y 2% Wealth Management Deposit Accounts Service Charge on Deposit Accounts $ 7.6 $ 1.2 $ (3.5) 10% 10% Bank Card and Other Fees 8.8 1.1 0.5 In
Slide 20: Appendix
w Trustmark Appendix
Slide 21: Current Ratings Profile
Current Ratings Profile Trustmark Corporation Long‐Term Debt BBB BBB+ Short‐Term Debt A‐2 F2 Outlook Negative Stable Trustmark National Bank Long‐Term Debt BBB+ BBB+ Short‐Term Debt A‐2 F2 Outlook Negative Stable • S&P – July 24, 2020 o “Our ratings on Trustmark reflect the company's long history of
Slide 22: Trustmark Announces Succession Plans
Trustmark Announces Succession Plans The Boards of Directors of Trustmark Corporation and Trustmark National Bank have overseen a thoughtful and deliberate succession planning process to ensure a seamless transition of executive leadership. On October 27, 2020, the Boards announced that: Effective J
Slide 23: COVID-19 Loan Portfolio Review
COVID‐19 Loan Portfolio Review • During the third quarter, Trustmark conducted a review of significantly impacted borrowers who received one or more payment concessions and other borrowers in industries significantly impacted by COVID‐19. Collectively, the review included borrowers with $1.8 billion
Slide 24: Paycheck Protection Program (PPP)
Paycheck Protection Program (PPP) 1 At September 30, 2020 ($ in millions) Amount SBA Fee # of Loans Balance $50,000 and less 5% 6,576 $ 117.5 $50,000 ‐ $150,000 5% 1,892 162.7 $150,000 and greater 1‐5% 1,223 689.9 Gross PPP Loans 9,691 $ 970.0 Unamortized Net Loan Fees (25.7) Carrying Amount of PPP
Slide 25: Income Statement Highlights – Mortgage Banking
Income Statement Highlights – Mortgage Banking Mortgage Banking Income Change • Mortgage loan production in the third quarter totaled ($ in millions) $885.8 million, an increase of 3.8% from the prior Q3‐20 LQ Y‐o‐Y quarter and a 56.5% increase year‐over‐year Mortgage servicing income, net $ 5.7 $ (
Slide 26: Income Statement Highlights – Noninterest Expense
Income Statement Highlights – Noninterest Expense Noninterest Expense Change 1 ($ in millions) Noninterest Expense Q3‐20 % of Total LQ Y‐o‐Y ($ in millions) Salaries & Benefits $ 67.3 59% $ 1.2 $ 4.8 $124 $119 Service & Fees 21.0 18% 0.4 2.2 $114 $14 $110 Net Occupancy – premises 7.0 6% 0.4 0.2 $8 $
Slide 27: Non-GAAP Financial Measures
Non‐GAAP Financial Measures Pre‐Tax Pre‐Provision (PTPP) Income ($ in thousands) Q3‐19 Q4‐19 Q1‐20 Q2‐20 Q3‐20 Net Interest Income (GAAP) $ 108,466 $ 105,591 $ 103,952 $ 105,000 $ 106,207 Noninterest Income (GAAP) 48,337 47,578 65,264 69,511 73,701 Pre‐tax pre‐provision revenue a $ 156,803 $ 153,169
Slide 28: Non-GAAP Financial Measures (Continued)
Non‐GAAP Financial Measures (Continued) Adjusted Noninterest Expense ($ in thousands) Q3‐19 Q4‐19 Q1‐20 Q2‐20 Q3‐20 Total noninterest expense (GAAP) $ 106,853 $ 110,027 $ 123,810 $ 118,659 $ 113,959 Less: Other real estate expense, net (531) (1,491) (1,294) (271) (1,203) Amortization of intangibles