Trustmark(US:TRMK)2025-07-23 14:32Financial Data and Key Metrics Changes - Loans held for investment increased by $223 million or 1.7% linked quarter and $374.8 million or 2.9% year to date [4][5] - Deposit base grew by $35 million during the quarter, with personal and commercial deposits totaling $13 billion at June 30, an increase of $103.8 million or 0.8% from the prior quarter [5] - Net income for the second quarter was $55.8 million, representing fully diluted EPS of $0.92, up 4.5% from the prior quarter [5] - Return on average assets was 1.21% and return on average tangible equity was 13.13% in the second quarter [5] - Net interest income expanded by 4.3% to $161.4 million, producing a net interest margin of 3.81%, an increase of six basis points from the prior quarter [5][6] - Non-interest income totaled $39.9 million, unchanged linked quarter [6] Business Line Data and Key Metrics Changes - Growth in loans was diversified across one to four family mortgage loans, other loans and leases, and commercial and industrial loans [4] - Non-interest expense increased by $1.1 million or 0.9% linked quarter, following a decline in the previous year [6] - Credit quality remained solid, with non-performing assets declining by $5 million or 5.3% linked quarter [8] Market Data and Key Metrics Changes - The cost of total deposits in the second quarter was 1.8%, a decline of three basis points linked quarter [5] - The CET1 ratio increased by seven basis points to 11.7%, while the total risk-based capital ratio increased by five basis points to 14.15% [9] Company Strategy and Development Direction - The company is focusing on organic loan growth, potential market expansion, and M&A opportunities depending on market conditions [13] - The company is actively recruiting talent in key growth markets such as Houston, Birmingham, Atlanta, and South Alabama [35] - The company is monitoring the impact of tariffs and other administrative policies on its customer base [11] Management's Comments on Operating Environment and Future Outlook - Management expects loans held for investment to increase in mid-single digits for the full year, revised upward from low single-digit growth [11] - The net interest margin guidance has been tightened to a range of 3.77% to 3.83% for the full year [12] - The provision for credit losses is expected to trend lower compared to the previous year [12] Other Important Information - The company repurchased $11 million of common stock during the quarter, with a remaining repurchase authority of $74 million for the year [9] - The Board declared a quarterly cash dividend of $0.24 per share payable on September 15 [10] Q&A Session Summary Question: What is driving the increase in growth guidance to mid-single digits? - Management indicated it is a combination of strong production in non-CRE categories and delays in scheduled maturities for the CRE book [18][19] Question: Are there further profitability improvements expected? - Management believes there is potential for continued profitability improvement driven by operating leverage and net interest margin expansion [22][25] Question: What are the assumptions regarding NIM guidance? - The baseline forecast includes a Fed rate cut in September and December, with ongoing repricing of fixed-rate loans and securities expected to support NIM [31][32] Question: What is the company's approach to M&A? - The company is interested in both organic growth and M&A opportunities, focusing on contiguous markets and being conservative in its approach [35][36] Question: How does the recent M&A activity affect the company's partner program? - Management stated that while Texas is an attractive market, they remain open to opportunities in other high-growth markets [40][41] Question: What are the expectations for the reserve and provisioning? - The reserve level was slightly reduced, and provisioning is expected to remain similar to the first half of the year, with a positive trend in criticized and classified loans [43][46]