Trustmark(US:TRMK)2024-10-22 20:40Financial Performance - Trustmark Corporation reported net income of $51.3 million in Q3 2024, with diluted earnings per share of $0.84, compared to $73.8 million and $1.20 in Q2 2024[1]. - Noninterest income totaled $37.6 million in Q3 2024, compared to a negative $141.3 million in Q2 2024, reflecting a significant recovery[9]. - Net income for Q3 2024 was $51,330, a decrease of 30.5% from Q2 2024 but an increase of 50.8% compared to Q3 2023[19]. - Basic earnings per share from continuing operations was $0.84, compared to a loss of $1.64 in Q2 2024, marking a substantial turnaround[19]. - The company reported a significant reduction in charge-offs related to the sale of 1-4 family mortgage loans, totaling $(7,142) for the quarter[22]. - The company reported a total of $646,288,000 in interest and fees on loans held for sale and loans held for investment for the nine months ended September 30, 2024, up from $578,431,000 for the same period in 2023[25]. - The adjusted net income for the nine months ended September 30, 2024, was $130,023,000, down from $124,277,000 for the same period in 2023[49]. Interest Income and Expenses - Total interest income-FTE for Q3 2024 was $254,897, an increase of 5.1% from Q2 2024 and 10.0% from Q3 2023[19]. - Total interest expense decreased to $96,878, down 1.3% from Q2 2024, while year-over-year it increased by 7.8%[19]. - Net interest income (FTE) reached $158,019, reflecting a 9.5% increase quarter-over-quarter and an 11.3% increase year-over-year[19]. - Net interest income for Q3 2024 was $154,714, up from $141,029 in Q2 2024[48]. - The yield on loans held for investment (LHFI) is 6.55% as of September 30, 2024, compared to 6.34% a year earlier[37]. - The cost of interest-bearing deposits increased, impacting the overall net interest margin despite higher yields on securities[39]. Asset and Liability Management - Total assets decreased by $279,216 thousand, or 1.5%, from the previous quarter, and by $196,505 thousand, or 1.1%, year-over-year[17]. - Total liabilities decreased to $16,584,045 from $17,059,020 in the previous quarter[23]. - Total deposits decreased to $15,240,930,000 from $15,462,880,000 in the previous quarter[24]. - The allowance for credit losses (ACL) on loans held for investment (LHFI) increased to $(157,929), reflecting a $3,244 increase from the previous quarter and a $23,898 increase year-over-year, which is a 17.8% change[18]. - Total interest-bearing liabilities decreased to $13,087,966 from $13,376,903, a decline of approximately 2.2%[23]. - The total shareholders' equity rose to $1,980,096, showing a $100,955 increase from the previous quarter and a $409,745 increase year-over-year, representing a 5.4% and 26.1% change respectively[18]. Credit Quality and Provisions - The net provision for credit losses was $6.5 million in Q3 2024, down from $19.7 million in Q2 2024, indicating improved credit quality[7]. - Provision for credit losses (PCL) decreased to $7,923, down 46.1% from Q2 2024, indicating improved credit quality[19]. - Nonaccrual loans in Alabama decreased by 1.5% to $25,835, while year-over-year, they increased by 9.8%[21]. - Total nonaccrual LHFI increased by 66.7% quarter-over-quarter to $73,825, but decreased by 18.8% year-over-year[21]. - The company’s loans past due over 90 days decreased by 1.1% to $5,352, with a year-over-year increase of 40.7%[20]. - The allowance for credit losses (ACL) on LHFI reached $157,929,000, up from $154,685,000 in the previous quarter, reflecting a 1.5% increase[27]. Operational Efficiency - The efficiency ratio improved by 282 basis points to 60.99% in Q3 2024, indicating enhanced operational efficiency[3]. - Trustmark's efficiency ratio improved to 60.99%, down from 66.90% in the previous quarter, reflecting better cost management[29]. - Total noninterest expense increased to $123,270,000 from $118,326,000 in Q2 2024, reflecting a rise of 1.6%[25]. - The company reported a full-time equivalent employee count of 2,500, a decrease from 2,712 in the previous quarter, suggesting potential operational adjustments[29]. Market and Stock Performance - The market value of Trustmark's stock closed at $31.82, up from $30.04 in the previous quarter, reflecting positive market sentiment[29]. - Trustmark completed the sale of its subsidiary, Fisher Brown Bottrell Insurance, Inc., for a gain of $228.3 million, contributing to income from discontinued operations[31]. - The total risk-based capital ratio stood at 13.71%, compared to 12.42% in the previous quarter, indicating a stronger capital position[29]. - Nonperforming assets as a percentage of loans held for investment and loans held for sale increased to 0.58% from 0.38% in the previous quarter, suggesting a slight deterioration in credit quality[29]. Securities and Investments - Securities available for sale increased to $1,725,795, reflecting a $104,136 increase from the previous quarter, but a decrease of $40,379 or 2.3% year-over-year[18]. - The total securities held to maturity was reported at $1,358,358,000, a decrease from $1,380,487,000 as of June 30, 2024, indicating a decline of about 1.6%[33]. - The company maintains a focus on asset quality, with 100% of the securities portfolio invested in U.S. Treasury securities, GSE-backed obligations, and other Aaa rated securities[32]. - The net unamortized, unrealized loss for securities held to maturity transferred from securities available for sale totaled $49.3 million as of September 30, 2024[32].