Trustmark Corporation (TRMK): what the price assumes

In the published model solve dated 2026-Q2, anchored at $46.27, Trustmark Corporation (TRMK) is priced for 10.8% return on equity. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-11.

Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/TRMK

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Solve inputs: computed at a 9.4% cost of equity with 4% terminal growth over a 10-year stage, on common book equity (FY2026).

How unusual the bet is: within-range

Valuation X-Ray

The price is supported by asset-based and earnings-power value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.2%); the inversion above states its own rate.

Per-Model Detail (n=4)

Economic-Unit Decomposition (Sum Of The Parts)

The issuer is a funded financial business. Debt, interest, and cash flows are operating inputs, so industrial EV, net-debt, WACC, and free-cash-flow lenses do not apply; value the common-equity claim with book, earnings, capital, and payout economics.

No unit-level total common-equity value is stated. Each financial unit requires supported standalone common equity, normalized earnings, capital adequacy, and payout capacity. Consolidated debt, interest, and cash are operating balances, not an enterprise-to-equity bridge; company-level book, earnings, capital, and payout lenses remain the coherent cross-checks.

Solvency

Deposit/float-funded balance sheet: debt is funding, not corporate leverage, and GAAP operating cash flow follows loan flows. Net-debt, interest-coverage, and cash-burn lenses do not apply. The solvency frame for a financial is regulatory capital and payout capacity (CET1, stress buffer, dividends plus buybacks against earnings).

Bullet Takeaways

• Trustmark is a Southeast regional bank doing the quiet things well: a 10.6% return on equity, a net interest margin holding at 3.81% on falling deposit costs, and net charge-offs of just 0.04% of average loans.
• The price asks for slightly more than the bank delivers: at about 1.3x book the market assumes a sustained return on equity near 11.2% against the roughly 10.6% recently earned, and 2025 earnings got help from provisions falling to $12.9 million from $41.1 million a year earlier per the 10-K.
• Watch the next quarterly print against affirmed full-year guidance of mid-single-digit loan and deposit growth with net interest margin between 3.80% and 3.85%.

Bull Case

Trustmark is a mature bank, and that changes what the numbers are supposed to do. Nobody should read a 148-year-old Mississippi lender for growth surprises; the test is whether it earns a durable return on its capital, funds itself cheaply, keeps credit clean, and hands the surplus back. On all four counts the recent record is strong. Return on equity runs at 10.6%, the net interest margin held at 3.81% in the March quarter as total deposit costs fell 9 basis points to 1.63%, net charge-offs were 0.04% of average loans, and nonperforming assets sat at 0.73%. Earnings per share of $0.95 beat the $0.89 consensus, and each of the last four quarters has landed between $0.92 and $0.96, the kind of monotony a bank investor pays for.

The capital return machinery is running at full deployment. About 61.8% of earnings went back to shareholders as dividends plus buybacks in the latest fiscal year: a dividend now at $1.00 per share annualized, up from $0.96 declared last year and consuming only 26.1% of net income, alongside $84.8 million of trailing buybacks that have the share count falling. The credit backdrop is helping rather than hurting, with the 10-K showing the provision for credit losses at "$12.9 million compared to a PCL of $41.1 million during 2024", and the filing states the underlying philosophy directly: "Trustmark places a significant emphasis on the maintenance of a strong capital position, which promotes investor confidence, provides access to funding sources under favorable terms". Beyond the lending book, the Wealth Management segment adds a fee stream the filing breaks out as its own reportable business, diversifying revenue away from pure spread income.

The franchise itself is the durable part. The loan book grew 4.8% year over year to $13.9 billion against $15.7 billion of deposits, and the 10-K shows the footprint compounding across "the Mississippi, Alabama, Florida, Tennessee and Texas market regions", a corridor with in-migration and business formation working in the bank's favor. A deposit base priced at 1.63% and still getting cheaper is the moat in its simplest form: it means Trustmark does not have to reach for yield or credit risk to earn its margin, and management's affirmed guidance of mid-single-digit growth with a stable margin asks the bank only to keep being itself.

Bear Case

The variable with the most leverage over this stock is the rate path, and the current price does not leave much room for it to misbehave. The margin story rests on a specific asymmetry: deposit costs drifting down 9 basis points a quarter while loan yields hold. Guidance of a 3.80% to 3.85% net interest margin for 2026 assumes that asymmetry persists. Faster rate cuts compress asset yields quicker than a 1.63% deposit base can fall; a higher-for-longer turn reignites the deposit competition the 10-K already concedes, noting that "Trustmark expects to continue to face increasing competition from online and traditional financial institutions seeking to attract customers by providing access to similar services and products". Either branch of the rate tree squeezes the same margin the guidance depends on, and a spread lender with $15.7 billion of deposits cannot hedge its way out of its own business model.

The price already assumes improvement that has not arrived. At roughly 1.3x book, the market is paying for a sustained return on equity of about 11.2%; the bank has recently earned about 10.6%, and the assumed return runs well above its own longer record. If the required return never materializes, the price-to-book the stock supports compresses toward what a 10%-and-fading return justifies, and the 12x earnings multiple, already above the 10x sector median, follows it down. This is the quiet risk in a stock that looks cheap on absolute numbers: the premium is small, but so is the earning power backing it.

Credit is the third pressure point, mostly because it has been implausibly good. Charge-offs of 0.04% of average loans are near the theoretical floor, and 2025 earnings were flattered by provisions dropping to $12.9 million from $41.1 million the year before. Normalization alone, no recession required, reverses that tailwind. The 10-K adds a process wrinkle: during the third quarter of 2025, management determined there was risk related to "delayed identification and downgrading of commercial" credits in the loan portfolio, which is the filing's way of saying the early-warning system needed tightening. And the book is geographically concentrated, with the filing noting mortgage loans are "primarily included in the Mississippi market region" where the line of business is centrally run. A regional bank priced above its demonstrated return, with credit costs at cyclical lows and one state carrying disproportionate weight, is a stock where several small mean-reversions add up.

Valuation

A bank is worth the return it earns on its capital, so start there. At $46.22 (July 10, 2026), Trustmark trades at about 1.3x book value, which embeds a sustained return on equity of roughly 11.2%. The bank has recently been earning about 10.6%, so the price asks for modestly more than the demonstrated run rate, and the assumed return sits well above the bank's own longer history. The base rate is kinder than most: about 72% of banks earning at this level sustained it for a decade, and the multiple itself sits in the lower half of the peer group's price-to-book range. The bet is small but real: a fraction of a point of ROE, held indefinitely.

The valuation methods cluster unusually tightly. Asset-based reads put the price at 1.2x what they support, earnings power at 1.3x, peer multiples at 1.1x, and growth-based methods at 1.2x, so every family lands within 10% to 30% of the price rather than splitting into cheap and expensive camps. This is a value-supported name where the market pays a thin premium for quality, not a growth bet. On the earnings lens the stock trades at 12.1x against a 10x regional-bank median, a premium consistent with the clean credit book: the allowance covers 1.17% of loans against nonperforming loans of 0.71%, and tangible book stands at $30.38 per share.

For a deposit-funded balance sheet, the solvency frame is capital and payout rather than leverage ratios, and both read comfortably. The filing emphasizes "the maintenance of a strong capital position" as a stated priority, and the payout math shows the headroom in practice: about 61.8% of latest-fiscal-year earnings went back to shareholders through the $1.00 annualized dividend, a 26.1% payout ratio on dividends alone, plus $84.8 million of buybacks that are shrinking the share count. The decisive question is narrow: whether a 10.6% ROE bank with falling deposit costs and near-zero charge-offs can hold that arithmetic through a rate cycle. The price says yes by a small margin, and the tight clustering of the methods says the market is not paying much for the possibility of anything better.

Catalysts

The April print gave the year its template: net income of $56.1 million, earnings per share of $0.95 against an $0.89 estimate, and a net interest margin holding at 3.81% as total deposit costs fell 9 basis points to 1.63%. Loans held for investment grew 1.5% linked-quarter and 4.8% year over year to $13.9 billion, with deposits at $15.7 billion, though revenue of $202.9 million came in slightly below the $205.2 million consensus. The next quarterly report tests the same variables: whether deposit costs keep falling faster than asset yields, and whether loan growth holds its mid-single-digit pace through the summer.

Management affirmed full-year 2026 guidance across the board: mid-single-digit growth in loans and deposits excluding brokered balances, net interest margin of 3.80% to 3.85%, and net interest income, noninterest income, and noninterest expense each rising mid-single digits year over year. Credit metrics are the numbers to watch beneath the guidance, since net charge-offs at 0.04% of average loans and nonperforming assets at 0.73% sit near cyclical bests and any drift upward would pressure the provision line that helped 2025 earnings. The capital-return cadence continues in the background, with the dividend at $1.00 annualized and buybacks running at $84.8 million over the trailing year; with roughly 62% of earnings currently being returned, any acceleration or pause in repurchases is itself a signal of how management reads the credit cycle ahead.

Peer Cohorts (Per Segment, With Filing Citations)

General Banking (reported)

• UCB (UNITED COMMUNITY BANKS INC)
• FY2025 10-K: …and ongoing oversight of its board of directors or an appropriate committee thereof, to create, implement and maintain a comprehensive written information security program designed to ensure the security and confidentiality of customer information, protect against any anticipated threats or hazards to the security or…
• FY2025 10-K: …economy, the banking sector, housing prices, the real estate market, the job market, consumer confidence, the financial condition of our borrowers and consumer spending habits, which may affect, among other things, the levels of NPAs, charge-offs and provision expense; • changes in loan underwriting, credit review or…
• RNST (RENASANT CORP)
• FY2025 10-K: …and general economic trends. Failure to perform in any of these areas could significantly weaken our competitive position, which could adversely affect our growth and profitability, which, in turn, could have a material adverse effect on our financial condition and results of operations. We may be adversely affected…
• FY2025 10-K: …commercial clients, we offer competitive checking and savings services and a suite of treasury management products, including remote deposit capture, account reconciliation, electronic statements, fraud protection via positive pay, ACH origination and wire transfer, lockbox services, overnight investment sweep…
• HWC (HANCOCK WHITNEY CORPORATION)
• FY2025 10-K: …between the Bank and the Company and all of its nonbank affiliates combined are limited to 20% of the Bank's capital and surplus. Loans and other extensions of credit from the Bank to the Company or any affiliate generally are required to be secured by eligible collateral in specified amounts. In addition, any…
• FY2025 10-K: …and deposits of $29.3 billion. NATURE OF BUSINESS AND MARKETS The Bank offers a broad range of traditional and online banking services to commercial, small business and retail customers, providing a variety of transaction and savings deposit products, treasury management services, secured and unsecured loan products…
• SFNC (SFNC)
• FY2025 10-K: …banking firms. Certain nonbank competitors of the Company are increasingly offering products and services that traditionally were banking products due to technological advances, and many of these nonbank competitors are not subject to the same extensive federal regulations that govern bank holding companies and…
• FY2025 10-K: …behaviors and preferences, including consumer spending, borrowing, and saving habits; the soundness of other financial institutions and indirect exposure related to the closings of other financial institutions and their impact on the broader market through other customers, suppliers and partners (or that the…
• ABCB (Ameris Bancorp)
• FY2025 10-K: …obtains two or more traditional bank products. Under Georgia law, a state bank is generally prohibited from making loans, having obligations or having credit exposure as a counterparty in a derivative transaction to any one borrower in an amount exceeding 15% of the bank's statutory capital base, or 25% of the bank's…
• FY2025 10-K: …may also enter into repurchase agreements. These repurchase agreements are treated as short-term borrowings and are reflected on the Company's balance sheet as such. MARKET AREAS AND COMPETITION The banking industry in general, and in the southeastern United States specifically, is highly competitive and dramatic…
• FBK (FB FINANCIAL CORPORATION)
• FY2025 10-K: …laws. In addition, the Bank's deposit accounts are insured by the FDIC to the maximum extent permitted by law, and the FDIC has certain enforcement powers over the Bank with respect to insured depository institutions. Various Federal and State consumer laws and regulations apply to the Bank, including state consumer…
• FY2025 10-K: …customer characteristics, processes and service delivery of the segments and the regular financial performance review and allocation of resources by the Chief Executive Officer, the Company's chief operating decision maker. The Company has identified two distinct reportable segments-Banking and Mortgage. The…
• CBSH (COMMERCE BANCSHARES, INC.)
• FY2025 10-K: …of credit policies of monetary and fiscal authorities, the Company makes no prediction as to possible future changes in interest rates, deposit levels or loan demand, or their effect on the financial statements of the Company. The financial industry operates under laws and regulations that are under regular review by…
• FY2025 10-K: …are other financial institutions from whom the Company has accepted collateral of $871.4 million in marketable investment securities at December 31, 2025. The average rate earned on these agreements during 2025 was 4.0%, compared to 3.2% in 2024. Deposits and Borrowings Deposits, including both individual and…
• BOKF (BOK FINANCIAL CORP)
• FY2025 10-K: Personnel expense increased $12.8 million, or 7%, largely driven by increased incentive compensation costs, annual merit increases, and salary adjustments. Non-personnel expense increased $3.3 million, or 3%, as the prior year included a recovery of operational losses. The average outstanding balance of loans…
• FY2025 10-K: …$46.3 million, including a $33.3 million increase in personnel expense and a $13.0 million increase in non-personnel expense. The increase in net income before taxes attributed to Funds Management and Other reflects the ongoing application of the Company's transfer pricing methodology. Table 14 - Net Income Before…

Wealth Management (reported)

• NTRS (NORTHERN TRUST CORP)
• FY2025 10-K: …subsidiaries, including support from locations in North America, Europe, the Middle East, and the Asia-Pacific region. At December 31, 2025, total Asset Servicing assets under custody/administration (AUC/A), assets under custody, and assets under management (AUM) were $17.4 trillion, $13.6 trillion, and $1.3…
• FY2025 10-K: …by investment firms as collateral for securities borrowed from custody clients are managed by Northern Trust and are included in assets under custody and assets under management Wealth Management Wealth Management fee income is calculated primarily based on market values of client AUC/A and AUM and is impacted by…
• SEIC (SEI INVESTMENTS COMPANY)
• FY2025 10-K: 25. In the preceding tables, assets under management are total assets of our clients or their customers invested in our equity and fixed-income investment programs, collective trust fund programs, and liquidity funds for which we provide asset management services through our subsidiaries and partnerships in which we…
• FY2025 10-K: …upmarket focus and cross‑selling SEI's investment capabilities alongside technology and trust‑based custody, with increasing attention to alternatives access. Competitors for our asset management services may include in-house investment teams and global asset management firms, such as LPL Financial and BlackRock.…
• TROW (PRICE T ROWE GROUP INC)
• FY2025 10-K: The investment management industry continues to evolve and face challenging trends, including the shift in market share from traditional active strategies to passive products, persistent downward fee pressure, demand for lower cost investment vehicles, and an ever-changing regulatory landscape. Despite these trends,…
• FY2025 10-K: …management impact our revenues and results of operations. At December 31, 2025, we had $1,775.6 billion in assets under management, an increase of $169.0 billion from the end of 2024. This increase in assets under management was driven by market appreciation, net of distributions not reinvested, of $216.7 billion,…
• RJF (RAYMOND JAMES FINANCIAL INC)
• FY2025 10-K: …between fee-based accounts and transaction-based accounts within our PCG segment. 56 RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES Management's Discussion and Analysis Index Revenues earned by Raymond James Investment Management for retail accounts managed on behalf of third-party institutions, institutional…
• FY2025 10-K: …and, as a result, is included in both AMS and Raymond James Investment Management in the preceding table. This amount is removed in the calculation of "Total financial assets under management." Activity (including activity in assets managed for affiliated entities) Year ended September 30, $ in billions 2025 2024…
• SF (STIFEL FINANCIAL CORP)
• FY2025 10-K: …by management in assessing performance and deciding how to allocate resources. The Institutional Group segment includes institutional sales and trading. It provides securities brokerage, trading, and research services to institutions with an emphasis on the sale of equity and fixed income products. This segment also…
• FY2025 10-K: …the quality of our personnel, the quality and selection of our investment products and services, pricing (such as execution pricing and fee levels), and reputation. Segment revenue growth and operating income are used to evaluate and measure segment performance by our CODM in assessing performance and deciding how to…
• AMP (AMERIPRISE FINANCIAL INC)
• FY2025 10-K: …we provide investment management, advice and products to retail, high net worth and institutional clients on a global scale. Revenues in the Asset Management segment are primarily earned based on managed asset balances, which are impacted by market movements, net asset flows, asset allocation and product mix. We may…
• FY2025 10-K: …amp:AdviceAndWealthManagementMember 2023-01-01 2023-12-31 0000820027 us-gaap:OperatingSegmentsMember us-gaap:InvestmentAdviceMember amp:AssetManagementSegmentMember 2023-01-01 2023-12-31 0000820027 us-gaap:OperatingSegmentsMember us-gaap:InvestmentAdviceMember amp:RetirementAndProtectionSolutionsMember 2023-01-01…
• BEN (FRANKLIN RESOURCES, INC.)
• FY2025 10-K: …the Company. We have one operating segment, investment management and related services. We offer our services and products under our various distinct brand names, including, but not limited to, Alcentra ® , Apera ® , Benefit Street Partners ® , Brandywine Global Investment Management ® , Canvas ® , Clarion Partners ®…
• FY2025 10-K: …compared to the Euro. Long-term inflows increased 8% to $343.9 billion, as compared to the prior year, driven by higher inflows across equity, fixed income, and alternative strategies, particularly in open-end funds, retail separately managed accounts, private funds, and sub-advised mutual funds. This growth was…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.