Trustmark(TRMK)2024-11-05 21:30Financial Performance - Trustmark reported net income of 0.84, for Q3 2024, compared to 0.56, in Q3 2023, reflecting a 50.9% increase in net income [264]. - For the nine months ended September 30, 2024, Trustmark's net income was 2.72, compared to 2.12, for the same period in 2023, representing a 28.9% increase in net income [265]. - Trustmark's return on average tangible equity for Q3 2024 was 12.86%, up from 11.32% in Q3 2023, indicating improved profitability [264]. - The return on average equity for the three months ended September 30, 2024, was 10.62%, an increase from 8.53% in the same period of 2023 [285]. - Net income from continuing operations for the three months ended September 30, 2024, was 30,553 for the same period in 2023, reflecting a 67.9% increase [295]. Revenue and Income Sources - Total revenue for Q3 2024 was 16.7 million, or 9.5%, compared to Q3 2023, primarily due to increased net interest income [267]. - Net interest income for Q3 2024 totaled 16.1 million, or 11.6%, compared to Q3 2023, driven by higher interest and fees from loans [270]. - Noninterest income for Q3 2024 was 641 thousand, or 1.7%, compared to Q3 2023, while for the nine months ended September 30, 2024, it decreased by 251,592, an increase of 10.1% compared to (1,375), a decline from a positive 7.0 million, or 5.4%, totaling 74.9 million, a decrease of 123.270 million for the three months ended September 30, 2024, primarily due to a reduction in salaries and employee benefits [315]. Asset and Loan Management - Total assets increased to 18,390,839 a year earlier, reflecting a growth of 0.5% [286]. - Loans Held for Investment (LHFI) increased by 13.100 billion compared to December 31, 2023 [277]. - Total loans (LHFI + LHFS) rose to 12,979,503 in the previous year [286]. - Nonperforming assets decreased by 77.7 million compared to December 31, 2023 [276]. - The allowance for credit losses (ACL) on loans held for investment (LHFI) increased to 134.0 million at the end of September 2023, reflecting a year-over-year increase of 17.8% [364]. Capital and Dividends - The company declared a quarterly cash dividend of 1,980,096, up from 0.92 per common share, the same as dividends per common share declared in 2023 [390]. Regulatory and Economic Environment - The Federal Reserve maintained the target federal funds rate at 5.25% to 5.50% from July 2023 through September 2024, impacting Trustmark's net interest margin [260]. - The FDIC finalized changes to its Statement of Policy on Bank Merger Transactions, which may complicate regulatory approval for bank mergers [280]. - Trustmark is evaluating the potential impact of a proposed FDIC rule that could classify more deposits as brokered deposits, potentially increasing deposit insurance assessment costs [282]. Liquidity and Funding - Trustmark's liquidity strategy includes the use of wholesale funding sources to address seasonal fluctuations in deposit and loan demand [394]. - Trustmark's total uninsured deposits were 5.601 billion, or 36.0%, at December 31, 2023 [378]. - Trustmark had 712.0 million at December 31, 2023 [398]. Interest Rate Risk Management - Trustmark uses financial simulation models to measure interest rate exposure and assess the impact on net interest income under various scenarios [426]. - Management's Asset/Liability Committee utilizes simulation models to provide extensive information on potential impacts of interest rate changes on net interest income [426]. - The significant increase in short-term market interest rates is expected to affect the balance sheet composition and rates [426].