Trustmark Corp (TRMK) SEC Filing 10-Q Quarterly Report for the period ending Thursday, March 31, 2022

Exhibit 99.1

Trustmark Corporation Announces First Quarter 2022 Financial Results

Loan and Deposit Growth Continues, Credit Quality Remains Strong,

Insurance and Wealth Management Revenue Expands

JACKSON, Miss. – April 26, 2022 – Trustmark Corporation (NASDAQGS:TRMK) reported net income of $29.2 million in the first quarter of 2022, representing diluted earnings per share of $0.47.  Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable June 15, 2022, to shareholders of record on June 1, 2022.

First Quarter Highlights

Duane A. Dewey, President and CEO, stated, “Our first quarter financial performance reflects solid loan growth and expansion in both net interest income and noninterest income. Our balance sheet is well-positioned for additional increases in interest rates and credit quality remains a hallmark of the organization.  We continue to focus on efficiency enhancements throughout the organization, including rationalization of the branch network as well as investments in technology to better serve customers.  Trustmark remains well-positioned to serve and expand our customer base and create long-term value for our shareholders.”

Balance Sheet Management

Loans HFI totaled $10.4 billion at March 31, 2022, reflecting an increase of $149.3 million, or 1.5%, linked-quarter and $413.4 million, or 4.1%, year-over-year.  The linked-quarter growth reflects increases in 1-4 family mortgage loans, commercial and industrial loans, and loans to municipalities. Growth in these areas was partially offset by reductions in other loans, construction, land development and other land loans, and other real estate secured loans.  Trustmark’s loan portfolio remains well-diversified by loan type and geography.

Deposits totaled $15.1 billion at March 31, 2022, up $26.1 million, or 0.2%, from the prior quarter and $729.9 million, or 5.1%, year-over-year.  Trustmark continues to maintain a strong liquidity position as loans HFI represented 68.8% of total deposits at March 31, 2022.  Noninterest-bearing deposits represented 31.4% of total deposits at the end of the first quarter, compared to 31.6% in the prior quarter.  Interest-bearing deposit costs totaled 0.11% for the first quarter, a decrease of 2 basis points from the prior quarter.  The total cost of interest-bearing liabilities was 0.16% for the first quarter of 2022, a decrease of 3 basis points from the prior quarter.  

During the first quarter, Trustmark repurchased $9.1 million, or approximately 279 thousand of its common shares, in open market transactions.  At March 31, 2022, Trustmark had $90.9 million in remaining authority under its existing stock repurchase program, which expires December 31, 2022.  The repurchase program, which is subject to market conditions and management discretion, will continue to be implemented through open market repurchases or privately negotiated transactions.  At March 31, 2022, Trustmark’s tangible equity to tangible assets ratio was 7.29%, while its total risk-based capital ratio was 13.53%.  Tangible book value per share was $20.22 at March 31, 2022, down 7.8% from the prior quarter reflecting a decline in other comprehensive income due to valuation adjustments on securities available for sale resulting from the increase in market interest rates during the first quarter.  

Credit Quality

Nonaccrual loans totaled $64.4 million at March 31, 2022, up $1.7 million from the prior quarter and $885 thousand year-over-year.  Other real estate totaled $3.2 million, reflecting a $1.4 million decrease from the prior quarter and a decline of $7.5 million year-over-year. Collectively, nonperforming assets totaled $67.6 million at March 31, 2022, reflecting a linked-quarter increase of $331 thousand and a year-over-year decrease of $6.6 million.

The provision for credit losses for loans HFI was a negative $860 thousand in the first quarter while the provision for credit losses for off-balance sheet credit exposures was a negative $1.1 million.  Collectively, the provision for credit losses totaled a negative $2.0 million in the first quarter and was attributable to an increase in reserves due to individually analyzed loans and loan growth which were more than offset by improvements in the macroeconomic forecast and credit quality. 

Allocation of Trustmark’s $98.7 million allowance for credit losses on loans HFI represented 0.95% of commercial loans and 0.96% of consumer and home mortgage loans, resulting in an allowance to total loans HFI of 0.95% at March 31, 2022.  Management believes the level of the ACL is commensurate with the credit losses currently expected in the loan portfolio. 

Revenue Generation

Revenue in the first quarter totaled $153.5 million, up 2.9% from the prior quarter and down 5.8% from the same quarter in the prior year.  The linked-quarter increase reflected higher net interest income as well as increased noninterest income. The decline in revenue year-over-year was attributable principally to a reduction in interest and fees on PPP loans as well as the decline in mortgage banking revenues from historically high levels.