Trustmark Corp (TRMK) SEC Filing 10-K Annual report for the fiscal year ending Monday, December 31, 2018

Exhibit 99.1

Trustmark Corporation Announces Fourth Quarter and Fiscal Year 2018 Financial Results

JACKSON, Miss. – January 23, 2019 – Trustmark Corporation (NASDAQ:TRMK) reported net income of $36.7 million in the fourth quarter of 2018, which represented diluted earnings per share of $0.55. Diluted earnings per share in the fourth quarter of 2018 increased 1.9% from the prior quarter and 14.6% when compared to the fourth quarter of 2017 excluding non-routine items.

For the full year, Trustmark’s net income totaled $149.6 million, which represented diluted earnings per share of $2.21.  This compares to reported diluted earnings per share in 2017 of $1.56, or $1.92 excluding non-routine items.  Diluted earnings per share in 2018 increased 41.7% from reported EPS in 2017 and 15.1% when compared to earnings per share excluding non-routine items. Trustmark’s net income in 2018 produced a return on average tangible equity of 12.86% and a return on average assets of 1.11%.

Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable March 15, 2019, to shareholders of record on March 1, 2019.  

2018 Highlights

Gerard R. Host, President and CEO, stated, “During 2018, we continued to focus on strategic initiatives of profitably growing each of our financial services businesses, optimizing our balance sheet, deploying capital through share repurchases and maintaining disciplined expense management. As we look forward in 2019, we will continue to provide the financial services and advice our customers have come to expect.  We remain committed to managing the franchise for the long term, supporting investments to promote profitable revenue growth, realigning delivery channels to support changing customer preferences, as well as reengineering and efficiency opportunities that enhance long-term shareholder value.”

Balance Sheet Management

Loans held for investment totaled $8.8 billion at December 31, 2018, an increase of 1.0% from the prior quarter and 3.1% from the same period one year earlier. During the quarter, growth in other real estate secured loans ($90.1 million), state and political subdivision loans ($44.6 million), construction, land development and other land loans ($25.1 million) and residential mortgage loans ($24.5 million) was offset in part by declines in commercial and industrial loans ($27.2 million) and loans secured by nonfarm, nonresidential properties ($73.4 million).

Acquired loans totaled $106.9 million at December 31, 2018, down $25.7 million from the prior quarter.  Collectively, loans held for investment and acquired loans totaled $8.9 billion at December 31, 2018, up 0.7% from the prior quarter and 1.3% from the prior year.

Deposits totaled $11.4 billion at December 31, 2018, an increase of $407.5 million, or 3.7%, from the previous quarter and $786.9 million, or 7.4%, year-over-year.  Both the linked quarter and year-over-year increase reflects growth in personal and public fund balances.

Trustmark’s capital position remained solid, reflecting the consistent profitability of its diversified financial services businesses.  During the fourth quarter, Trustmark repurchased approximately $54.5 million, or 1.8 million shares of its common stock.  At December 31, 2018, Trustmark had $36.9 million in remaining authority under its existing stock repurchase program, which expires March 31, 2019.  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 December 31, 2018, Trustmark’s tangible equity to tangible assets ratio was 9.31%, while its total risk-based capital ratio was 13.07%.  Tangible book value per share was $18.24 at December 31, 2018, up 5.1% year-over-year.

Credit Quality

Nonperforming loans totaled $61.6 million at December 31, 2018, down 9.2% from the prior quarter and 8.8% year-over-year.  Other real estate totaled $34.7 million, reflecting a 5.0% linked-quarter decrease and a 19.8% year-over-year reduction.  Collectively, nonperforming assets totaled $96.3 million, reflecting linked-quarter and year-over-year decreases of 7.7% and 13.1%, respectively.  

Allocation of Trustmark's $79.3 million allowance for loan losses represented 0.99% of commercial loans and 0.57% of consumer and home mortgage loans, resulting in an allowance to total loans held for investment of 0.90% at December 31, 2018.  This represents a level management considers commensurate with the inherent risk in the loan portfolio.  In aggregate, the allowance for both held for investment and acquired loan losses represented 0.90% of total loans held for investment and acquired loans.  

Net charge-offs totaled $11.8 million in the fourth quarter resulting from resolution of two specific problem credits which were fully provisioned in prior periods.

Unless noted otherwise, all of the above credit quality metrics exclude acquired loans.

Revenue Generation