TRUSTMARK CORP Income Taxes Disclosure
Note 13 – Income Taxes
The income tax expense (benefit) attributable to continuing operations included in the consolidated statements of income was as follows for the periods presented ($ in thousands):
|
|
Years Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Current Tax Expense (Benefit) |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
$ |
22,221 |
|
|
$ |
(28,470 |
) |
|
$ |
26,100 |
|
State |
|
|
5,322 |
|
|
|
(6,563 |
) |
|
|
6,392 |
|
Total current tax expense (benefit) |
|
|
27,543 |
|
|
|
(35,033 |
) |
|
|
32,492 |
|
|
|
|
|
|
|
|
|
|
|
|||
Deferred Tax Expense (Benefit) |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
|
18,400 |
|
|
|
19,104 |
|
|
|
(3,798 |
) |
State |
|
|
4,600 |
|
|
|
4,776 |
|
|
|
(950 |
) |
Total deferred tax expense (benefit) |
|
|
23,000 |
|
|
|
23,880 |
|
|
|
(4,748 |
) |
|
|
|
|
|
|
|
|
|
|
|||
Total Income Tax Expense (Benefit) |
|
|
|
|
|
|
|
|
|
|||
Federal |
|
|
40,621 |
|
|
|
(9,366 |
) |
|
|
22,302 |
|
State |
|
|
9,922 |
|
|
|
(1,787 |
) |
|
|
5,442 |
|
Total income tax expense (benefit) |
|
$ |
50,543 |
|
|
$ |
(11,153 |
) |
|
$ |
27,744 |
|
For the periods presented, the income tax provision attributable to continuing operations differs from the amount computed by applying the statutory federal income tax rate in effect for each respective period to income before income taxes as a result of the following ($ in thousands):
|
|
Year Ended December 31, 2025 |
|
|||||
|
|
Amount |
|
|
% |
|
||
Income tax computed at statutory tax rate |
|
$ |
57,682 |
|
|
|
21.0 |
% |
Nontaxable or nondeductible items: |
|
|
|
|
|
|
||
Tax exempt interest |
|
|
(5,787 |
) |
|
|
-2.1 |
% |
Nontaxable increase in cash surrender value of bank-owned life insurance |
|
|
(1,609 |
) |
|
|
-0.6 |
% |
Nondeductible interest expense |
|
|
1,687 |
|
|
|
0.6 |
% |
Nondeductible executive compensation |
|
|
903 |
|
|
|
0.3 |
% |
Nondeductible FDIC premiums |
|
|
693 |
|
|
|
0.2 |
% |
Income tax credits, net: |
|
|
|
|
|
|
||
Low income housing tax credits |
|
|
(5,440 |
) |
|
|
-2.0 |
% |
New markets tax credits |
|
|
(3,352 |
) |
|
|
-1.2 |
% |
Other tax credits |
|
|
(2,842 |
) |
|
|
-1.0 |
% |
Other |
|
|
770 |
|
|
|
0.3 |
% |
State income taxes, net |
|
|
7,838 |
|
|
|
2.9 |
% |
Income tax provision |
|
$ |
50,543 |
|
|
|
18.4 |
% |
During the year ended December 31, 2025, state taxes in Alabama, Georgia and Mississippi made up the majority of the tax effect in the state income taxes, net category. Trustmark has no foreign operations and does not file income tax returns in foreign jurisdictions.
|
|
Years Ended December 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Income tax computed at statutory tax rate |
|
$ |
7,152 |
|
|
$ |
38,018 |
|
Tax exempt interest |
|
|
(5,605 |
) |
|
|
(5,521 |
) |
Nondeductible interest expense |
|
|
2,153 |
|
|
|
2,104 |
|
State income taxes, net |
|
|
(5,185 |
) |
|
|
5,050 |
|
Income tax credits, net |
|
|
(11,483 |
) |
|
|
(11,904 |
) |
Death benefit gains |
|
|
(92 |
) |
|
|
(80 |
) |
Other |
|
|
1,907 |
|
|
|
77 |
|
Income tax provision |
|
$ |
(11,153 |
) |
|
$ |
27,744 |
|
Income taxes paid were as follows for the period presented ($ in thousands):
|
|
Year Ended December 31, 2025 |
|
|
Federal tax payments |
|
$ |
45,000 |
|
|
|
|
|
|
State tax payments |
|
|
|
|
Alabama |
|
|
3,000 |
|
Other |
|
|
4,165 |
|
Total state tax payments |
|
|
7,165 |
|
Total tax payments |
|
$ |
52,165 |
|
Temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities gave rise to the following net deferred tax assets at December 31, 2025 and 2024, which are included in other assets on the accompanying consolidated balance sheets ($ in thousands):
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Deferred tax assets: |
|
|
|
|
|
|
||
Other real estate |
|
$ |
510 |
|
|
$ |
2,293 |
|
Accumulated credit losses |
|
|
46,256 |
|
|
|
47,416 |
|
Deferred compensation |
|
|
20,124 |
|
|
|
19,299 |
|
Finance and operating lease liabilities |
|
|
9,927 |
|
|
|
10,652 |
|
Realized built-in losses |
|
|
6,928 |
|
|
|
7,679 |
|
Securities |
|
|
3,506 |
|
|
|
22,294 |
|
Pension and other postretirement benefit plans |
|
|
1,722 |
|
|
|
1,574 |
|
Interest on nonaccrual loans |
|
|
1,012 |
|
|
|
1,173 |
|
LHFS |
|
|
150 |
|
|
|
236 |
|
Stock-based compensation |
|
|
3,446 |
|
|
|
3,544 |
|
Derivatives |
|
|
— |
|
|
|
4,018 |
|
Tax credit carryforward |
|
|
1,393 |
|
|
|
3,489 |
|
State basis differences |
|
|
3,068 |
|
|
|
— |
|
Other |
|
|
9,519 |
|
|
|
8,745 |
|
Gross deferred tax asset |
|
|
107,561 |
|
|
|
132,412 |
|
|
|
|
|
|
|
|
||
Deferred tax liabilities: |
|
|
|
|
|
|
||
Goodwill and other identifiable intangibles |
|
|
13,851 |
|
|
|
13,880 |
|
Premises and equipment |
|
|
12,553 |
|
|
|
14,218 |
|
Finance and operating lease right-of-use assets |
|
|
8,750 |
|
|
|
9,492 |
|
MSR |
|
|
28,054 |
|
|
|
29,206 |
|
Securities |
|
|
5,501 |
|
|
|
3,789 |
|
Equipment financing |
|
|
30,794 |
|
|
|
8,803 |
|
Derivatives |
|
|
687 |
|
|
|
— |
|
Other |
|
|
2,542 |
|
|
|
2,874 |
|
Gross deferred tax liability |
|
|
102,732 |
|
|
|
82,262 |
|
Net deferred tax asset |
|
$ |
4,829 |
|
|
$ |
50,150 |
|
The following table provides a summary of the changes during the calendar years presented in the amount of unrecognized tax benefits that are included in other liabilities in the consolidated balance sheets ($ in thousands):
|
|
December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Balance at beginning of period |
|
$ |
2,878 |
|
|
$ |
2,864 |
|
|
$ |
2,316 |
|
Change due to tax positions taken during the current year |
|
|
1,858 |
|
|
|
1,497 |
|
|
|
1,333 |
|
Change due to tax positions taken during a prior year |
|
|
(1,302 |
) |
|
|
(1,076 |
) |
|
|
(426 |
) |
Change due to the lapse of applicable statute of limitations during the |
|
|
(352 |
) |
|
|
(407 |
) |
|
|
(359 |
) |
Balance at end of period |
|
$ |
3,082 |
|
|
$ |
2,878 |
|
|
$ |
2,864 |
|
|
|
|
|
|
|
|
|
|
|
|||
Accrued interest, net of federal benefit |
|
$ |
373 |
|
|
$ |
415 |
|
|
$ |
470 |
|
|
|
|
|
|
|
|
|
|
|
|||
Unrecognized tax benefits that would impact the effective |
|
$ |
2,816 |
|
|
$ |
2,579 |
|
|
$ |
2,518 |
|
Interest and penalties related to unrecognized tax benefits, if any, are recorded in income tax expense. With limited exception, Trustmark is no longer subject to U.S. federal, state and local audits by tax authorities for 2019 and earlier tax years. Trustmark does not anticipate a significant change to the total amount of unrecognized tax benefits within the next twelve months.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 23, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 16, 2023 | |
| 2021 | Feb 17, 2022 | |
| 2020 | Feb 18, 2021 | |
| 2019 | Feb 20, 2020 | |
| 2018 | Feb 19, 2019 | |
| 2017 | Feb 20, 2018 | |
| 2016 | Feb 21, 2017 | |
| 2015 | Feb 23, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.