KBW Regional Bank Conference
March 2, 2006
1
Keefe, Bruyette & Woods
Regional Bank Conference
Boston, MA
March 2, 2006
KBW Regional Bank Conference
March 2, 2006
2
Forward Looking Statements
Certain statements contained in this presentation are not statements of historical fact and constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements
include, but are not limited to, statements relating to anticipated future operating and financial performance measures,
including net interest margin, credit quality, business initiatives, growth opportunities and growth rates, among other things
and encompass any estimate, prediction, expectation, projection, opinion, anticipation, outlook or statement of belief
included therein as well as the management assumptions underlying these forward-looking statements. Should one or
more of these risks materialize, or should any such underlying assumptions prove to be significantly different, actual
results may vary significantly from those anticipated, estimated, projected or expected.
These risks could cause actual results to differ materially from current expectations of Management and include, but
are not limited to, changes in the level of nonperforming assets and charge-offs, local, state and national economic and
market conditions, material changes in market interest rates, the costs and effects of litigation and of unexpected or
adverse outcomes in such litigation, competition in loan and deposit pricing, as well as the entry of new competitors into
our markets through de novo expansion and acquisitions, changes in existing regulations or the adoption of new
regulations, natural disasters, acts of war or terrorism, changes in consumer spending, borrowings and savings habits,
technological changes, changes in the financial performance or condition of Trustmark's borrowers, the ability to control
expenses, changes in Trustmark's compensation and benefit plans, greater than expected costs or difficulties related to the integration of new products and lines of business and other risks described in Trustmark's filings with the Securities and Exchange Commission.
Although Management believes that the expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to be correct. Trustmark undertakes no obligation to update or
revise any of this information, whether as the result of new information, future events or developments or otherwise.
KBW Regional Bank Conference
March 2, 2006
3
Ø
Corporate Infrastructure
•
Over 145 offices and 180 ATMs
•
Over 2,600 associates
•
Serving Florida, Mississippi,
Tennessee and Texas
Tennessee and Texas
2005 As Reported | 2005 w/out Katrina* | |
| Net Income | $103 million | $113 million |
| ROE | 13.68% | 15.02% |
| ROA | 1.25% | 1.38% |
| Basic EPS | $1.82 | $2.00 |
*See slide #26 for Non-GAAP Financial Disclosure
Corporate Profile
as of December 31, 2005
as of December 31, 2005
Ø
Trustmark is an integrated
provider of banking and
financial solutions
provider of banking and
financial solutions
•
$8.4 billion in total assets
•
$420 million in revenue
•
Investment Ratings
-
Moody’s: A3
-
S&P: BBB+
KBW Regional Bank Conference
March 2, 2006
4
Reasons to Invest in Trustmark
Ø
Above Peer performance on mid cap banking metrics
Ø
Major balance sheet restructuring
Ø
Diversified business mix expanding into attractive
growth markets
growth markets
Ø
Discounted P/E valuation relative to Peers
KBW Regional Bank Conference
March 2, 2006
5
*Total Assets as of December 31, 2005
*Market Value and P/E multiples as of February 22, 2006
Peer Group
Discounted P/E Valuation Relative to Peers
Discounted P/E Valuation Relative to Peers
KBW Regional Bank Conference
March 2, 2006
6
Source: SNL Financial
Key Ratios
Above Peer performance on mid cap banking metrics
Above Peer performance on mid cap banking metrics
KBW Regional Bank Conference
March 2, 2006
7
Major balance sheet restructuring, correct anticipation of flat yield curve
Balance Sheet
4th Qtr Average
($ in thousands)
KBW Regional Bank Conference
March 2, 2006
8
Average Deposits and Borrowings
Average Loans and Securities
KBW Regional Bank Conference
March 2, 2006
9
Year-End Historic Market Yields
KBW Regional Bank Conference
March 2, 2006
10
Loan Spread
Security Spread
KBW Regional Bank Conference
March 2, 2006
11
Principal Roll-off | Roll-off Yield | |
| 2006 | $284.1 | 3.46% |
| 2007 | $272.9 | 3.51% |
| 2008 | $201.0 | 3.88% |
Total Taxable Securities at December 31, 2005 $1,144
Average duration of taxable securities portfolio 2.2 years
Projected Taxable Securities Roll-off
($ in millions)
($ in millions)
KBW Regional Bank Conference
March 2, 2006
12
Loan Composition
as of December 30, 2005
Total Loans
4th Qtr Average
1-4 Family
34%
$2.1
34%
$2.1
Construction
9%
$0.5
9%
$0.5
Real Estate
18%
$1.1
18%
$1.1
Commercial
14%
$0.9
14%
$0.9
Consumer
15%
$0.9
15%
$0.9
Other
10%
$0.6
10%
$0.6
$ Billions
Loans
KBW Regional Bank Conference
March 2, 2006
13
Katrina
$9.8M
Financial Performance
Credit Quality ($ in millions)
Credit Quality ($ in millions)
KBW Regional Bank Conference
March 2, 2006
14
Total Deposits
4th Qtr Average
Deposits Composition
As of December 30, 2005
$ Billions
Deposits
KBW Regional Bank Conference
March 2, 2006
15
Dividends Per Share
Capital Management
KBW Regional Bank Conference
March 2, 2006
16
2005 Trustmark As Reported | 2005 Trustmark w/out Katrina* | 2005 Peer Median | |
| ROE | 13.68% | 15.02% | 12.33% |
| ROA | 1.25% | 1.38% | 1.20% |
| Efficiency | 56.24% | 56.24% | 58.09% |
| Tangible Equity/ Tangible Assets | 7.00% | 7.00% | 6.94% |
| Price/2005 Earnings | 16.5x (12/24) | 15.0x (21/24) | 16.5x |
| Price/2006 Estimate | 14.5x (19/24) | 15.7x |
*See slide #26 for Non-GAAP Financial Disclosure
Source: SNL Financial and Company information
P/E Multiples based upon February 22, 2006 market data
Trustmark’s Market Valuation
KBW Regional Bank Conference
March 2, 2006
17
Ø
MSA Demographics
•
Population – 465 thousand with 6.0% growth
from 2005-10
from 2005-10
•
Median HHI – $44,803 with 15.5% growth
from 2005-10
from 2005-10
•
Deposits – $7 billion
Ø
Maintaining market dominance with 40
Commercial Relationship Managers
Commercial Relationship Managers
Ø
2 new banking centers to open in Spring
2006, 1 to open in Spring 2007
2006, 1 to open in Spring 2007
County | 2005 Population | 2004-09 Pop Growth | 2005-10 Pop Growth | 6/05 Market Deposits ($Thousands) | 6/05 TRMK Deposits ($Thousands) | Deposit Market Share | TRMK Banking Centers |
| Hinds | 250,483 | -0.7% | 0.2% | 4,395,739 | 1,847,093 | 42.0% | 22 |
| Madison | 84,794 | 8.5% | 14.2% | 1,227,150 | 329,519 | 26.9% | 8 |
| Rankin | 129,402 | 8.6% | 11.9% | 1,374,506 | 438,349 | 31.9% | 10 |
Total | 464,679 | 3.5% | 6.0% | 6,997,395 | 2,614,961 | 37.4% | 40 |
Source: SNL Financial, ESRI
Strategic Focus
Jackson, MS
Jackson, MS
KBW Regional Bank Conference
March 2, 2006
18
Ø
MSA Demographics
•
Population – 1.3 million with 7% growth from 2005-10
•
Median HHI – $45,866 with 16% growth from 2005-10
•
Deposits – $27 billion
Ø
Trustmark has 22 banking centers, $475 million in loans, $685 million in
deposits and 2.3% deposit market share
deposits and 2.3% deposit market share
Ø
Strategic Focus
•
Enhancing commercial banking utilizing 24 Relationship Managers
•
Integrating Wealth Management
•
3 new banking centers to open in 2006
Strategic Focus
Memphis, TN
Memphis, TN
KBW Regional Bank Conference
March 2, 2006
19
Ø
Demographics
•
Population– 401 thousand
12.4% growth from 2005-10
12.4% growth from 2005-10
•
Median HHI – $44,267
14.3% growth from 2005-10
14.3% growth from 2005-10
•
Deposits – $7.0 billion
Ø
Trustmark has 8 banking centers,
$601 million in loans, $379 million in
deposits and 4.3% deposit market
share
$601 million in loans, $379 million in
deposits and 4.3% deposit market
share
Ø
Strategic Focus
•
Continuing commercial loan growth through 16 Commercial Relationship Managers
•
Cross-selling Fisher-Brown’s 4,000 commercial insurance customers
•
Expanding Wealth Management
•
Building Florida Headquarters in Destin to open in 2008; 3 prime sites for future expansion
Strategic Focus
Florida’s Panhandle
Florida’s Panhandle
KBW Regional Bank Conference
March 2, 2006
20
Ø
Strategic Focus
•
Growing middle market commercial lending with 15 Relationship Managers
•
Branding
•
Implementing Mortgage Banking
•
Expanding Wealth Management
•
6 new banking centers in high growth areas (West & Northwest Houston) to open in 2006 and
2007
2007
Ø
MSA Demographics
•
Population – 5.4 million
15% growth from 2005-10
15% growth from 2005-10
•
Median HHI – $54,000
19% growth from 2005-10
19% growth from 2005-10
•
Deposits – $99.4 billion
Ø
Trustmark has 6 banking
centers, $166 million in loans,
$150 million in deposits
centers, $166 million in loans,
$150 million in deposits
Strategic Focus
Houston, TX
Houston, TX
KBW Regional Bank Conference
March 2, 2006
21
Wealth
Mgmt 6%
$26
Mgmt 6%
$26
Commercial
10%
$43
10%
$43
Insurance
8%
$33
8%
$33
Mortgage
6%
$26
6%
$26
Consumer
Non-Branch
9%
$38
Non-Branch
9%
$38
Consumer Branch
56%
$234
56%
$234
Treasury & Other
5%
$20
5%
$20
Total 2005 Revenue = $420
2005 Revenue Composition
($ in Millions)
($ in Millions)
KBW Regional Bank Conference
March 2, 2006
22
Ø
Outstanding Investment Results
•
All equity funds of the Performance Funds family
outperformed nationally recognized style benchmarks for one
year period ending December 31, 2005
outperformed nationally recognized style benchmarks for one
year period ending December 31, 2005
Ø
Assets under management and administration of $6.6 billion
with additional $1.4 billion in brokerage assets
with additional $1.4 billion in brokerage assets
Ø
Enhanced capabilities through Financial Planning and Risk
Management services
Management services
Ø
Expansion in Florida’s Emerald Coast, Houston, and Memphis
Wealth Management
KBW Regional Bank Conference
March 2, 2006
23
Ø
Ranked 33rd largest bank-owned insurance agency
based on revenue
based on revenue
Ø
39 producers
Ø
The Bottrell Agency
Ø
Fisher-Brown, Inc.
Insurance Services
KBW Regional Bank Conference
March 2, 2006
24
Mortgage Services
Ø
Mortgage loan production totaled $1.3 billion in 2005
Ø
Provided home financing for 9,250 customers in 2005
Ø
Managing mortgage servicing assets through sales and hedging
Ø
Excellent opportunity to cross-serve customers with additional
banking, insurance and wealth management services
banking, insurance and wealth management services
Ø
Aided over 4,500 mortgage customers affected by Hurricane
Katrina with their insurance and claims processing with 2
temporary offices
Katrina with their insurance and claims processing with 2
temporary offices
KBW Regional Bank Conference
March 2, 2006
25
KBW Regional Bank Conference
March 2, 2006
26
YTD 12/31/2005 ($ thousands) | YTD 12/31/2005 Basic EPS | ||||||
| Net Income as reported – GAAP | $ | 102,951 | $ | 1.819 | |||
Adjustments (net of tax): | |||||||
Add charges related to Hurricane Katrina | |||||||
| Provision for loan losses | 6,054 | 0.107 | |||||
| Mortgage related charges | 2,047 | 0.036 | |||||
| Non-interest income – lost revenues | 1,649 | 0.029 | |||||
Non-interest expenses – additional expenses | 333 | 0.006 | |||||
10,083 | 0.178 | ||||||
Net Income adjusted for specific items (Non-GAAP) | $ | 113,034 | $ | 1.997 | |||
Management is presenting in the following table adjustments to net income as reported in accordance with
generally accepted accounting principles for significant items resulting from Hurricane Katrina. Management
believes this information will assist users in comparing Trustmark’s current results to prior periods.
generally accepted accounting principles for significant items resulting from Hurricane Katrina. Management
believes this information will assist users in comparing Trustmark’s current results to prior periods.
Non-GAAP Financial Information
KBW Regional Bank Conference
March 2, 2006
27
Trustmark Corporation’s common stock is listed on the
NASDAQ National Market System and is traded under the
symbol TRMK.
NASDAQ National Market System and is traded under the
symbol TRMK.
Additional information is available at www.trustmark.com.
Investor Inquiries:
Zach L. Wasson Joseph Rein
Executive Vice President and First Vice President
Chief Financial Officer 601-208-6898
601-208-6816 jrein@trustmark.com
zwasson@trustmark.com
Contact information