Trustmark Corporation (NASDAQ:TRMK) Q2 2020 Earnings Conference Call - Final Transcript

Jul 29, 2020 • 09:30 am ET

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Trustmark Corporation (NASDAQ:TRMK) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning, ladies and gentlemen, and welcome to Trustmark Corporation's Second Quarter Earnings Conference Call. [Operator Instructions].

It is now my pleasure to introduce Mr. Joey Rein, Director of Investor Relations at Trustmark.

Executive
Joseph Rein

Morning. I'd like to remind everyone that a copy of our second quarter earnings release, as well as the slide presentation that we'll discuss on our call this morning, is available on the Investor Relations section of our website at trustmark.com.

During the course of our call, we may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and we'd like to caution you that these forward-looking statements may differ materially from our 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'd like to introduce Jerry Host, Chairman and CEO of Trustmark Corporation.

Executive
Gerard Host

Thank you, Joey, and good morning, everyone, and thanks for being with us. Joining me this morning are Duane Dewey, President and Chief Operating Officer; Louis Greer, our CFO; Barry Harvey, our Chief Credit Officer; and Tom Owens, our Bank Treasurer.

During the second quarter, we remained focused on ensuring the safety of our customers and associates and supporting our local communities. We continued serving customers both remotely and through our branches, actively promoting digital touch points, including our ATM and ITM networks, as well as digital and mobile banking applications.

We continue to offer customers flexibility by providing waivers of certain fees and charges, granting extensions, deferrals and forbearance as appropriate, and pausing all foreclosures and repossessions. Through the SBA's Paycheck Protection Program, we provided over 9,700 loans totaling $970 million to local businesses. I'm especially proud of our associates and the incredible dedication they showed working tirelessly to implement this program and help small businesses secure much-needed funding.

We are following better practices for the health and safety of our associates, including social distancing, required temperature checks, and face masks in common areas. Approximately 45% of our associates continue to work remotely, while some larger departments are working on rotating schedules. We limited vendor and public access to our corporate buildings and extended our employee travel policy. Additional actions are detailed on Page 3 of our investor presentation.

Moving to Page 4, let's review some highlights from the quarter. Our results reflect the value of our diversified financial services business, as the strong performance in our fee income businesses more than offset interest rate headwinds. Noninterest income increased 6.5% linked quarter, driven by strong mortgage performance.

Our provision and expense for credit losses totaled $24.4 million in the second quarter due to macroeconomic uncertainties related to the COVID-19 pandemic. PPP loans totaled $970 million at June 30, 2020, before deferred fees and costs of almost $30 million.

Loans held for investments excluding PPP loans increased $92 million, or 1%, from the prior quarter and $450 million, or 6%, year-over-year. Our pre-tax, pre-provision income totaled $62.1