Trustmark Corp (TRMK) SEC Filing 10-K Annual report for the fiscal year ending Tuesday, December 31, 2019

Exhibit 99.1

Trustmark Corporation Announces Fourth Quarter and Fiscal Year 2019 Financial Results

Performance reflects improved earning asset mix,

continued loan growth and solid credit quality

JACKSON, Miss. – January 28, 2020 – Trustmark Corporation (NASDAQ:TRMK) reported net income of $33.9 million in the fourth quarter of 2019, representing diluted earnings per share of $0.53.  Results in the fourth quarter reflect negative hedge ineffectiveness which reduced net income by $2.2 million, or $0.03 per share.  

For the full year, Trustmark’s net income totaled $150.5 million, representing diluted earnings per share of $2.32.  Diluted earnings per share in 2019 increased 5.0% when compared to the prior year.  Results for 2019 reflect negative hedge ineffectiveness which reduced net income by $8.6 million, or $0.13 per share.  Trustmark’s net income in 2019 produced a return on average tangible equity of 12.45% 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, 2020, to shareholders of record on March 1, 2020.  

2019 Highlights

Gerard R. Host, President and CEO, stated, “We remained focused on our strategic initiatives this year, profitably increasing revenue across our financial services businesses, optimizing our balance sheet, deploying capital through share repurchases, and maintaining disciplined expense management.  Looking ahead to 2020, Trustmark will continue to provide the financial services and advice our customers have come to expect.  We remain committed to supporting investments to promote profitable revenue growth, reengineering processes to enhance operational efficiency, realigning delivery channels to support changing customer preferences and managing the franchise for the long-term.”  

Balance Sheet Management

Loans held for investment totaled $9.3 billion at December 31, 2019, reflecting an increase of 1.2% linked-quarter and 5.7% from the prior year.  The linked-quarter growth reflects increases in construction and land development, residential mortgage, nonfarm, nonresidential and other real estate secured loans.  Acquired loans totaled $72.6 million at December 31, 2019, down $8.4 million from the prior quarter and $34.3 million from the prior year.  Collectively, loans held for investment and acquired loans totaled $9.4 billion at the end of the fourth quarter of 2019, up $103.6 million, or 1.1%, from the prior quarter and $465.4 million, or 5.2%, year-over-year.  

Deposits totaled $11.2 billion at December 31, 2019, unchanged from the prior quarter and down $118.9 million, or 1.0%, year-over-year.  Excluding public fund balances, deposits at December 31, 2019, were unchanged from the prior quarter and up $303.6 million, or 3.3% year-over-year.  Interest-bearing deposit costs totaled 0.85% for the fourth quarter, a decrease of 11 basis points linked-quarter.  Trustmark continues to maintain an attractive, low-cost deposit base with approximately 58% of deposit balances in checking accounts.  The total cost of interest-bearing liabilities was 0.88% for the fourth quarter of 2019.

Trustmark’s capital position remained solid, reflecting the consistent profitability of its diversified financial services businesses.  At December 31, 2019, Trustmark’s tangible equity to tangible assets ratio was 9.72%, while the total risk-based capital ratio was 13.25%.  During the fourth quarter, Trustmark repurchased $2.2 million, or approximately 64 thousand of its common shares in open market transactions.  Trustmark repurchased $56.6 million, or approximately 1.8 million of its common shares in 2019.  At December 31, 2019, Trustmark had $80.3 million in remaining authority under its existing stock repurchase program, which expires March 31, 2020.  

Today, the Board of Directors authorized a new stock repurchase program, effective April 1, 2020, under which $100 million of Trustmark’s outstanding shares may be acquired through December 31, 2021.  The shares may be purchased from time to time at prevailing market prices, through open market or private transactions, depending on market conditions.  There is no guarantee as to the number of shares that may be repurchased by Trustmark, and Trustmark may discontinue purchases at any time at management’s discretion.

Credit Quality

Nonperforming loans totaled $53.2 million at December 31, 2019, down $5.8 million from the prior quarter and $8.4 million year-over-year.  Other real estate totaled $29.2 million, reflecting a $2.7 million decrease from the prior quarter and down $5.4 million from the prior year.  Collectively, nonperforming assets totaled $82.5 million, reflecting a linked-quarter decrease of 9.4% and a year-over-year decrease of 14.4%.

Allocation of Trustmark's $84.3 million allowance for loan losses represented 0.98% of commercial loans and 0.61% of consumer and home mortgage loans, resulting in an allowance to total loans held for investment of 0.90% at December 31, 2019, representing a level management considers commensurate with the present risk in the loan portfolio.  

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