Trustmark’s Earnings Call Highlights Strong 2024 Performance

Trustmark ((TRMK)) has held its Q4 earnings call. Read on for the main highlights of the call.

Trustmark Corporation’s latest earnings call revealed a robust financial performance for the fourth quarter and the full year of 2024. The sentiment during the call was largely positive, driven by notable earnings growth, increased dividends, and improved capital ratios. Despite facing challenges in loan and deposit volumes and slight increases in nonperforming assets, the overall financial position of Trustmark remains solid.

Earnings Growth

Net income for the fourth quarter totaled $56.3 million, with a diluted EPS of $0.92, signifying an increase of $5 million or 9.7% from the previous quarter. This growth underscores Trustmark’s ability to enhance shareholder value and reflects their strong financial performance.

Full Year Financial Performance

For the full year 2024, Trustmark’s net income from adjusted continuing operations reached $186.3 million, marking an increase of $27.1 million or 17% compared to the previous year. This substantial growth highlights the company’s successful financial strategies and resilience.

Dividend Increase

The Board of Trustmark announced a 4.3% increase in the regular quarterly dividend, raising it to $0.24 per share from $0.23 per share. This decision demonstrates the company’s commitment to returning value to its shareholders.

Share Repurchase Program

Trustmark resumed its share repurchase activities, buying back $7.1 million or approximately 203,000 shares of common stock. This move indicates confidence in the company’s financial health and future prospects.

Noninterest Income Growth

Noninterest income for the fourth quarter was $41 million, up 9% from the previous quarter. For the full year, this income reached $156.1 million, an increase of 5.2% from the prior year, showcasing Trustmark’s ability to diversify its revenue streams.

Expense Management

Noninterest expense for the full year was $485.7 million, a decline of $2.1 million from the prior year. This decrease reflects Trustmark’s diligent expense management, contributing to its overall financial stability.

Capital Ratio Improvement

Trustmark’s capital ratios saw improvement, with the Common Equity Tier 1 (CET1) ratio increasing by 24 basis points to 11.54% and the total risk-based capital ratio expanding by 26 basis points to 13.97%. These enhancements indicate a strengthened capital position.

Loan and Deposit Declines

Loans held for investment totaled $13.1 billion at year-end, experiencing a slight linked-quarter decline of $10 million. Deposits also saw a decline of $132.8 million in the same period, reflecting market conditions and strategic decisions.

Public and Brokered Deposit Reduction

For the full year, Trustmark’s deposits declined by $461.6 million, including a planned reduction in high-cost public and brokered deposits totaling $726.8 million. This reduction aligns with the company’s strategy to optimize its deposit base.

Credit Quality Concerns

There was a slight increase in non-accruals and nonperforming assets during the quarter, although these have declined year-over-year. Trustmark continues to monitor credit quality closely as part of its risk management practices.

Forward-Looking Guidance

Trustmark provided comprehensive guidance for 2025, anticipating low single-digit growth in loans and deposits. The company projects net interest income to rise in the mid to high single digits. Trustmark has authorized a $100 million share repurchase program for 2025 and announced a 4.3% increase in its quarterly dividend to $0.24 per share, demonstrating confidence in its future growth and financial health.

In summary, Trustmark Corporation’s earnings call highlighted a strong financial performance with significant earnings growth and improved capital ratios. Despite some challenges, the positive outlook and strategic initiatives position Trustmark well for future growth, reflecting a largely optimistic sentiment during the call.