Trustmark(TRMK)2025-04-23 14:30Financial Data and Key Metrics Changes - Trustmark reported net income of $53.6 million, representing fully diluted EPS of $0.88 per share, with a return on average assets of 1.19% and a return on average tangible equity of 13.13% [7][9] - Loans held for investment increased by $151 million or 1.2% linked quarter, with a stable deposit base and a cost of total deposits rising by 15 basis points to 1.83% [6][10] - Non-interest income totaled approximately $43 million, up 4% linked quarter, while non-interest expense declined by $419,000 linked quarter [7][8] Business Line Data and Key Metrics Changes - The growth in loans was diversified, reflecting increases in commercial real estate (CRE), other commercial loans, and one to four family mortgage loans [6][10] - Non-interest expense management efforts were highlighted, with declines in salaries, employee benefits, and service fees contributing to the overall reduction [8][41] Market Data and Key Metrics Changes - The company anticipates low single-digit growth in loans held for investments and deposits for the full year 2025, while securities balances are expected to remain stable [10][11] - The net interest margin is projected to be in the range of 3.75% to 3.85% for the full year, with net interest income expected to increase mid to high single digits [11] Company Strategy and Development Direction - Trustmark is focused on organic loan growth, potential market expansion, and M&A opportunities depending on market conditions [11][45] - The company is monitoring the impact of tariffs and administrative policies on its customer base, indicating a cautious but optimistic outlook for growth [10][11] Management's Comments on Operating Environment and Future Outlook - Management noted stable credit quality with net charge-offs totaling $1.4 million, representing four basis points of average loans [8] - The company is experiencing a solid pipeline across various business units, although some uncertainty in the market may lead to a slowdown in new origination volume [25][26] Other Important Information - The tangible book value per share increased to $27.78, up 4.1% during the quarter and 26.1% year over year [10] - The Board declared a quarterly cash dividend of $0.24 per share payable on June 15 to shareholders of record on June 1 [10] Q&A Session Summary Question: Loan growth trends and client behavior regarding tariffs - Management discussed expectations for meaningful maturing CRE loans in 2025 and noted that many clients are considering extension options due to uncertainty in interest rates [19][20] Question: Impact of net interest margin and potential rate cuts - Management explained that a linked quarter decline in net interest margin was primarily due to seasonal declines in loan fees, and they expect low single-digit increases moving forward [27][30] Question: Credit quality and reserve build - Management confirmed that the increase in the allowance for credit losses was expected, driven by loan growth and qualitative adjustments [38][39] Question: Expense management and future investments - Management highlighted a focus on controlling expenses, with plans for a core system conversion in 2026 and a disciplined approach to managing costs [41][42] Question: Share repurchase program and capital deployment - Management indicated that the pace of share repurchases will be dictated by market conditions and loan growth, with a focus on strategic growth initiatives in key markets [44][45]