Trustmark Corporation (NASDAQ:TRMK) Q4 2019 Earnings Conference Call - Final Transcript

Jan 29, 2020 • 09:30 am ET


Trustmark Corporation (NASDAQ:TRMK) Q4 2019 Earnings Conference Call - Final Transcript


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Good morning, ladies and gentlemen, and welcome to Trustmark Corporation's Fourth Quarter Earnings Conference Call. [Operator Instructions] As a remainder, this call is being recorded. It is now my pleasure to introduce Mr Joey Rein, Director of Investor Relations at Trustmark.

Joey Rein

Good morning. I'd like to remind everyone that a copy of our fourth quarter earnings release as well as the slide presentation that will be discussed on our call this morning is available only Investor Relations section of our website at During the course of our call, management may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 we would like to caution you that these forward-looking statements may differ materially from actual results due to a number of risks and uncertainties, which are outlined in our earnings release and our other filings with the Securities and Exchange Commission.

At this time, I'll turn the call over to Jerry Host, President and CEO of Trustmark.

Jerry Host

Thank you, Joe, and Good morning everyone and thank you for joining us. Also joining us this morning here in the room are Duane Dewey, Chief Operating Officer; Louis Greer, Chief Financial Officer; Barry Harvey, Chief Credit Officer and Tom Owens, bank Treasurer.

We had a solid finish to the year as we remain focused on profitable revenue generation across our financial services business while maintaining disciplined expense management. We deployed capital through share repurchases and continued optimizing our balance sheet. Let's take a minute and review the results in a little bit more detail. Trustmark reported net income of $33.9 million or $0.53 per diluted share in the fourth quarter. Result in the fourth quarter reflects negative hedge ineffectiveness which resulted which, excuse me, which reduced net income by $2.2 million or $0.03 a share. For the full year Trustmark's net income totaled $150.5 million which represented and diluted earnings per share of $2.32.

Results for 2019 reflect negative hedge effectiveness which reduced net income by $8.6 million or $0.13 per share. I'd like to briefly provide you with an update on our financial results, which are on page 3 of the presentation. Loans held for investments increased $500 million or 5.7% year-over-year. Net interest income, excluding acquired loans totaled $431.1 million in 2019, up 3.9% increase from the prior year.

The net interest margin excluding acquired loans, expanded to 3.58% in 2019 from 3.46% in 2018. Revenue, excluding interest and fees on acquired loans and negative hedge ineffectiveness, totaled $616.8 million in 2019, up 5.5% increase from the prior year. For non-interest expense for 2019 excluding ORE and intangible amortization totaled $421 million, an increase of 3.1% year-over-year.

Credit quality continued to remain solid in 2019. Non-performing assets declined 14.4% year-over-year and net charge-offs represented 0.06% of average loans. In 2019 Trustmark repurchased $56.6 million or approximately $1.8 million of its common shares. At 12/31/2019, Trustmark had $80.3 million in remaining authority under its existing stock repurchase program, which will expire on March 31, 2020. At