TRMK Q4 Deep Dive: Banking Momentum, Credit Quality, and Organic Growth Shape Outlook

Regional banking company Trustmark will be reporting earnings this Tuesday afternoon. Here’s what to expect.

Trustmark missed analysts’ revenue expectations by 0.6% last quarter, reporting revenues of $202.4 million, up 5.3% year on year. It was a slower quarter for the company, with EPS in line with analysts’ estimates and a slight miss of analysts’ revenue estimates.

Is Trustmark a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, analysts are expecting Trustmark’s revenue to grow 3.9% year on year to $204.4 million, slowing from the 5.5% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.91 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Trustmark has missed Wall Street’s revenue estimates four times over the last two years.

Looking at Trustmark’s peers in the regional banks segment, some have already reported their Q4 results, giving us a hint as to what we can expect. ServisFirst Bancshares delivered year-on-year revenue growth of 20.7%, beating analysts’ expectations by 5%, and Dime Community Bancshares reported revenues up 24.5%, topping estimates by 5.2%. ServisFirst Bancshares traded up 14.6% following the results while Dime Community Bancshares was also up 12.5%.

Read our full analysis of ServisFirst Bancshares’s results here and Dime Community Bancshares’s results here.

There has been positive sentiment among investors in the regional banks segment, with share prices up 2.6% on average over the last month. Trustmark is up 2.5% during the same time and is heading into earnings with an average analyst price target of $44 (compared to the current share price of $40.81).

What Happened?

A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official boosted hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Regional Banks company Trustmark jumped 3.1%. Is now the time to buy Trustmark? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company Fifth Third Bancorp jumped 3.1%. Is now the time to buy Fifth Third Bancorp? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company Frost Bank jumped 3.2%. Is now the time to buy Frost Bank? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company Comerica jumped 3%. Is now the time to buy Comerica? Access our full analysis report here, it’s free for active Edge members.
• Regional Banks company Banner Bank jumped 3%. Is now the time to buy Banner Bank? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Frost Bank (CFR)

Frost Bank’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was about 1 month ago when the stock dropped 3.9% on the news that disclosures from two lenders raised concerns about deteriorating loan quality across the industry. 

The drop was triggered by specific incidents that have spooked investors. Zions Bancorp announced a $50 million charge-off—a debt the bank doesn't expect to collect—on a single loan. Separately, Western Alliance Bancorp revealed it was dealing with a borrower who had failed to provide proper collateral. These events are compounding existing anxieties about the regional banking sector, which is already under pressure from elevated interest rates and declining commercial real estate values. The news heightened investor concerns that more cracks could appear in borrowers' creditworthiness, potentially leading to increased loan losses and reduced profitability for other banks in the sector.

Frost Bank is down 6.9% since the beginning of the year, and at $123.62 per share, it is trading 14.8% below its 52-week high of $145.05 from February 2025. Investors who bought $1,000 worth of Frost Bank’s shares 5 years ago would now be looking at an investment worth $1,454.

Let’s dig into the relative performance of Trustmark and its peers as we unravel the now-completed Q3 regional banks earnings season.

Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges.

The 94 regional banks stocks we track reported a satisfactory Q3. As a group, revenues missed analysts’ consensus estimates by 1.1%.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

Trustmark

Tracing its roots back to 1889 in Mississippi, Trustmark is a financial services organization providing banking, wealth management, insurance, and mortgage services across five southeastern states.

Trustmark reported revenues of $202.4 million, up 5.3% year on year. This print exceeded analysts’ expectations by 0.7%. Despite the top-line beat, it was still a mixed quarter for the company with a narrow beat of analysts’ revenue estimates but EPS in line with analysts’ estimates.

Duane A. Dewey, President and CEO, stated, “Our momentum continues to build as reflected in Trustmark’s solid financial performance in the third quarter. Diversified loan growth and stable credit quality continued along with cost-effective core deposit growth. Our wealth management business performed well while our mortgage business continued to execute well in a challenging operating environment. We continued to implement organic growth initiatives and make investments to capitalize on opportunities in our marketplace. During the quarter, we added established relationship managers and production talent to accelerate profitable growth in key markets across our franchise. We will continue to add seasoned professionals with proven performance records to supplement our teams and expand and deepen customer relationships. These investments are designed to further enhance our financial performance and create long-term value for our shareholders.”

Unsurprisingly, the stock is down 2.6% since reporting and currently trades at $37.62.

Is now the time to buy Trustmark? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Customers Bancorp

Originally founded with a "high-tech, high-touch" branch-light banking strategy, Customers Bancorp is a bank holding company that provides commercial and consumer banking services through its Customers Bank subsidiary, with a focus on business lending and digital banking.

Customers Bancorp reported revenues of $232.1 million, up 38.5% year on year, outperforming analysts’ expectations by 7%. The business had a stunning quarter with an impressive beat of analysts’ net interest income estimates and a solid beat of analysts’ revenue estimates.

The market seems content with the results as the stock is up 4.4% since reporting. It currently trades at $68.45.

Is now the time to buy Customers Bancorp? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: The Bancorp

Operating behind the scenes of many popular fintech apps and prepaid cards you might use daily, The Bancorp is a bank holding company that specializes in providing banking services to fintech companies and offering specialty lending products.

The Bancorp reported revenues of $174.6 million, up 38.8% year on year, falling short of analysts’ expectations by 10%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue estimates and a significant miss of analysts’ net interest income estimates.

As expected, the stock is down 19.3% since the results and currently trades at $62.15.

Read our full analysis of The Bancorp’s results here.

F.N.B. Corporation

Tracing its roots back to 1864 during the Civil War era, F.N.B. Corporation is a diversified financial services holding company that provides banking, wealth management, and insurance services to consumers and businesses across seven states and Washington, D.C.

F.N.B. Corporation reported revenues of $457.4 million, up 10.8% year on year. This result surpassed analysts’ expectations by 2.7%. It was a strong quarter as it also produced a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

The stock is up 10% since reporting and currently trades at $16.12.

Read our full, actionable report on F.N.B. Corporation here, it’s free for active Edge members.

Axos Financial

Originally founded as Bank of Internet USA in 1999 before rebranding in 2018, Axos Financial is a diversified financial services company that provides digital banking, securities clearing, and investment advisory solutions to retail and business customers nationwide.

Axos Financial reported revenues of $323.4 million, flat year on year. This number beat analysts’ expectations by 1.4%. Zooming out, it was a satisfactory quarter as it also produced a beat of analysts’ EPS estimates but a slight miss of analysts’ tangible book value per share estimates.

The stock is up 3.6% since reporting and currently trades at $81.94.

Read our full, actionable report on Axos Financial here, it’s free for active Edge members.

Market Update

In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

Trustmark’s third quarter results drew a negative market reaction, as higher-than-expected expenses and competitive deposit dynamics weighed on sentiment. Management attributed performance to steady loan growth across commercial and real estate segments, as well as successful deposit gathering in key markets. CEO Duane Dewey emphasized, “Our performance reflected diversified loan growth and stable credit quality, along with cost-effective core deposit growth.” Trustmark also faced increased noninterest expenses, partly due to strategic hiring and nonroutine items like professional fees and reserves. The quarter’s focus centered on expanding production talent to support organic growth strategies, especially in competitive metropolitan areas.

Is now the time to buy TRMK? Find out in our full research report (it’s free for active Edge members).

Trustmark (TRMK) Q3 CY2025 Highlights:

• Revenue: $202.4 million vs analyst estimates of $201 million (5.3% year-on-year growth, 0.7% beat)
• Adjusted EPS: $0.94 vs analyst estimates of $0.93 (in line)
• Adjusted Operating Income: $69.75 million vs analyst estimates of $75.23 million (34.5% margin, 7.3% miss)
• Market Capitalization: $2.26 billion

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Trustmark’s Q3 Earnings Call

• Stephen Scouten (Piper Sandler) asked about ongoing hiring plans and related expense impacts. CEO Duane Dewey confirmed hiring will focus on growth markets, with expenses expected to rise modestly due to new talent onboarding.
• Michael Rose (Raymond James) pressed for clarity on M&A opportunities following recent deals in Trustmark’s markets. Dewey acknowledged overlap with competitors and said new M&A activity could provide both hiring and customer acquisition benefits.
• Feddie Strickland (Hovde Group) sought details on expense guidance and margin trends. CFO Tom Owens said nonroutine expenses would fade, but underlying expenses would still trend higher as new hires become fully loaded.
• Catherine Mealor (KBW) inquired about deposit cost trends amid potential rate cuts. Owens described a proactive approach to deposit pricing, emphasizing the need to balance customer retention with margin preservation in a competitive environment.
• Gary Tenner (D.A. Davidson) asked about the focus of new hires by business segment and geography. Dewey noted a diversified approach, with emphasis on equipment finance and commercial banking in high-growth metro areas.

Catalysts in Upcoming Quarters

Going forward, our analysts will track (1) Trustmark’s ability to translate new hires into sustainable loan and deposit growth in core markets, (2) the bank’s effectiveness in maintaining net interest margin stability as the Federal Reserve adjusts rates, and (3) progress in expense containment relative to revenue expansion. We will also monitor any strategic shifts in capital deployment, particularly as M&A opportunities emerge in Trustmark’s footprint.

Trustmark currently trades at $37.52, down from $38.64 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members).

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