Trustmark(TRMK)2025-04-22 20:40Financial Performance - Trustmark Corporation reported net income of $53.6 million for Q1 2025, with diluted earnings per share of $0.88, reflecting a return on average tangible equity of 13.13% and a return on average assets of 1.19%[2] - Net income for Q1 2025 was $53,633, a decrease of $2,679 or 4.8% from the previous quarter, but an increase of $12,098 or 29.1% year-over-year[33] - Basic earnings per share from continuing operations was $0.88, down $0.04 or 4.3% from the previous quarter, but up $0.26 or 41.9% year-over-year[33] - The company reported a net income adjusted for intangible amortization of $51.35 million for the quarter ended March 31, 2025[65] - The net income from continuing operations (GAAP) for the quarter was $53,633 thousand, compared to a loss of $100,605 thousand in the same quarter last year, showing a substantial turnaround[69] Loan and Deposit Activity - Loans held for investment (HFI) increased by $151.5 million, or 1.2%, linked-quarter, totaling $13.2 billion, and increased by $183.5 million, or 1.4%, year-over-year[4] - Total deposits amounted to $15.1 billion, down $27.5 million, or 0.2%, from the prior quarter, and down $257.9 million, or 1.7%, year-over-year[5] - Total loans, including loans held for sale, amounted to $13,320,276,000, a slight increase from $13,275,762,000 in the previous quarter[38] - The total loans held for investment (LHFI) amounted to $13.241 billion as of March 31, 2025, an increase from $13.090 billion at the end of 2024[52] - Total interest-bearing deposits decreased by $356,802, or 2.9%, year over year, totaling $11,942,605[29] Noninterest Income and Expense - Noninterest income rose to $42.6 million, an increase of $1.6 million, or 4.0%, linked-quarter, and $3.2 million, or 8.2%, year-over-year[14] - Noninterest expense totaled $124.0 million, a decrease of $419 thousand, or 0.3%, linked-quarter, and an increase of $4.3 million, or 3.6%, year-over-year[20] - Total noninterest income increased to $42,584 thousand from $40,950 thousand, an increase of 4%[41] - Total noninterest expense was $124,011 thousand, a slight increase from $119,664 thousand in the same quarter last year[70] Credit Quality and Loss Provisions - The provision for credit losses was $5.3 million in Q1 2025, down from $7.5 million in both the prior quarter and the same quarter in 2024[10] - Provision for credit losses (PCL) for loans held for investment was $8,125, an increase of $1,165 or 16.7% from the previous quarter[33] - The allowance for credit losses on loans held for investment increased by $24,012, or 16.8%, year over year, totaling $(167,010)[31] - Total nonperforming assets increased to $94,968,000, a 10.4% increase from the previous quarter and a 10.4% decrease year over year[35] - Nonaccrual loans held for investment (LHFI) totaled $86,620,000, reflecting an 8.1% increase from the linked quarter and an 11.9% decrease year over year[35] Capital and Asset Management - Trustmark's tangible book value per share increased by 4.1% from the prior quarter and 26.1% from the prior year, reaching $27.78[6] - Trustmark's total risk-based capital ratio stood at 14.10%, maintaining a strong capital position[8] - Shareholders' equity increased by $315,033, or 18.8%, year over year, reaching $1,991,554[29] - Common equity tier 1 capital (CET1) as of March 31, 2025, was $1,746.99 million, with a CET1 capital ratio of 11.63%[65] - Tangible equity to risk-weighted assets ratio was 11.23% as of March 31, 2025, compared to 10.97% in the previous quarter[65] Market and Investment Activity - Trustmark recognized a gain of $228.3 million ($171.2 million net of taxes) from the sale of its subsidiary, Fisher Brown Bottrell Insurance, Inc.[51] - Trustmark sold $1.561 billion of available for sale securities with an average yield of 1.36%, resulting in a loss of $182.8 million ($137.1 million net of taxes)[51] - Trustmark purchased $1.378 billion of available for sale securities with an average yield of 4.85% following the restructuring of its investment securities portfolio[51] - Trustmark's investment portfolio is 100% in U.S. Treasury securities, GSE-backed obligations, and other Aaa rated securities, ensuring asset quality[50] Operational Efficiency - The efficiency ratio remained stable at 61.77%, unchanged from the previous quarter, indicating consistent operational efficiency[46] - Adjusted pre-provision net revenue (Non-GAAP) for the quarter was $70,628 thousand, up from $52,521 thousand year-over-year, reflecting a growth of 34.5%[68] - Trustmark's adjusted revenue (Non-GAAP) for the quarter was $199,447 thousand, compared to $177,384 thousand in the same quarter last year, reflecting a growth of 12.4%[70] Employee and Operational Metrics - Full-time equivalent employees increased to 2,506, up from 2,500 in the previous quarter, suggesting growth in operational capacity[46] - Weighted average diluted shares outstanding decreased to 61,049,120 from 61,367,825 in the previous quarter[33]