Trustmark (TRMK) risk factors, 2025 10-K

Risks Related to Trustmark’s Business

1. 01Trustmark’s largest source of revenue (net interest income) is subject to interest rate risk
2. 02In general, for a given change in interest rates, the amount of the change in value (positive or negative) is larger for assets and liabilities with longer remaining maturities. The shape of the yield curve may affect new loan yields, funding costs and investment income differently
3. 03Trustmark may be adversely affected by the transition from the London Interbank Offered Rate (LIBOR) as a reference rate
4. 04Trustmark is subject to lending risk, which could impact the adequacy of the allowance for credit losses and results of operations
5. 05Trustmark is subject to environmental liability risk associated with lending activities
6. 06Declines in asset values may result in credit losses and adversely affect the value of Trustmark’s investments
7. 07Trustmark is subject to liquidity risk, which could disrupt its ability to meet its financial obligations
8. 08In addition to the risk that one or more of the funding sources may become constrained due to market conditions unrelated to Trustmark, there is the risk that Trustmark’s credit profile may decline such that one or more of these funding sources becomes partially or wholly unavailable to Trustmark
9. 09Trustmark’s business may be adversely affected by conditions in the financial markets and economic conditions in general
10. 10Market developments and the resulting economic pressure on consumers may affect consumer confidence levels and may cause increases in delinquencies and default rates, which, among other effects, could further affect Trustmark’s charge-offs and provision for credit losses
11. 11Trustmark operates in a highly competitive financial services industry
12. 12The soundness of other financial institutions could adversely affect Trustmark
13. 13Trustmark is subject to extensive government regulation and supervision and possible enforcement and other legal actions
14. 14Trustmark is subject to numerous laws designed to protect consumers, including fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions
15. 15Failure by Trustmark to perform satisfactorily on its CRA evaluations could make it more difficult for Trustmark’s business to grow
16. 16Trustmark is subject to stringent capital requirements
17. 17Trustmark’s use of third-party service providers and Trustmark’s other ongoing third-party business relationships are subject to increasing regulatory requirements and attention

Operational Risks

1. 18There may be risks resulting from the extensive use of models in Trustmark’s business
2. 19Trustmark could be required to write down goodwill and other intangible assets
3. 20Trustmark holds other real estate and may acquire and hold significant additional amounts, which could lead to increased operating expenses and vulnerability to additional declines in real property values
4. 21If Trustmark is required to repurchase a significant number of mortgage loans that it had previously sold, such repurchases could negatively affect earnings
5. 22Changes in retail distribution strategies and consumer behavior may adversely impact Trustmark’s investments in premises, equipment, technology and other assets and may lead to increased expenditures to change its retail distribution channel
6. 23Trustmark may experience disruptions of its operating systems or breaches in its information system security
7. 24Trustmark must utilize new technologies to deliver its products and services, which could require significant resources and expose Trustmark to additional risks, including cyber-security risks
8. 25Trustmark’s controls and procedures may fail or be circumvented
9. 26Trustmark has been named from time to time as a defendant in litigation relating to its businesses and activities. Litigation may include claims for substantial compensatory or punitive damages or claims for indeterminate amounts of damages
10. 27Damage to Trustmark’s reputation could have a significant negative impact on Trustmark’s business

Risk Related to Acquisition Activity

1. 28Potential acquisitions by Trustmark may disrupt Trustmark’s business and dilute shareholder value
2. 29The stock price of financial institutions, like Trustmark, can be volatile
3. 30volatility affecting the financial markets in general
4. 31Changes in accounting standards may affect how Trustmark reports its financial condition and results of operations
5. 32Trustmark may not be able to attract or retain key employees
6. 33Natural disasters, such as hurricanes, could have a significant negative impact on Trustmark’s business
7. 34Expectations around Environmental, Social and Governance (ESG) practices as well as climate change and related legislative and regulatory initiatives could adversely affect Trustmark’s business and results of operations, including indirectly through impact to its customers