Trustmark Corporation (NASDAQ:TRMK) Q4 2017 Earnings Conference Call Transcript

Jan 24, 2018 • 09:30 am ET


Trustmark Corporation (NASDAQ:TRMK) Q4 2017 Earnings Conference Call Transcript


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Barry Harvey

million. So we're very pleased with the loan growth we were able to achieve in both Q4, as well as for the year 2017. About two-thirds of that growth year-to-date was from CRE and one-third was from C&I and public finance, those being our main three areas of growth and within the portfolio.

The growth was diversified as it relates to markets. The energy book we're glad to say we saw some decrease in the energy book throughout the year. Year-to-date exposure decreased $60 million, whereas balances year-to-date decreased $45 million. We were pleased to see the reduction in that particular portfolio.

As it relates to credit quality, the various categories you would normally think of past dues, criticized, classified continue to be at historical low levels. Non-accruals we had three non-accruals during the quarter which were about $38 million that we were able to work down other non-accrual credits during the year and that led us to about $18 million increase in non-accruals for year-to-date. We felt pretty good about that given the three large ones that occurred in the first quarter, second quarter and then one this quarter as well.

And so overall I think we feel positive about the progress we've made given the three increase. ORE was a positive story as well down $19 million year-to-date. MPAs given the increase in the three large non-accruals ended up being flat for the year which we felt like was a positive. Net charge-offs, year-to-date were $9.6 million, $9.4 million that came two credits that we charged down this quarter. So outside of those two charge downs basically net charge-offs for the year were about $200,000. So we're pleased with the overall charge-offs for the year.

Looking at the acquired book, the book is down to $262 million as of 12/31. Their Q4 yield was $9.27 million. Going forward we always talk about the yield that's controllable which we expect that to being about 6% to 7% going forward and starting in the Q1 of 2018. Never can quite account for what we may come up with as far as a recovery here and there which reduced the yield as it did in Q4. The runoff we would anticipate that being and at $15 million to $25 million range starting in Q1 of 2018.

Gerard Host

Great. Thank you, Barry, appreciate your comments. We believe that one of our greatest strength is our low cost core deposit franchise. Tom, if you would please give us a little color on deposits and the net interest margin.

Thomas Owens

Happy to Gerry. So turning to Page 7, total deposits increased $346 million or 3.4% during the quarter. This was primarily driven by our seasonal upswing, normal seasonal upswing in public fund deposits. Total deposits were up $521 million or 5.2% from the prior year. Continue to maintain a favorable mix of deposits at about 28% -- excuse me in non-interest bearing and 59% of deposits in checking accounts.

So our cost of deposits rose three