Earnings call transcript Q4 2022

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Operator

Good morning, ladies and gentlemen, and welcome to Trustmark Corporation's Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode.

Following the presentation this morning, there will be a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded

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

Joey Rein

this Good copy release, of like section to of will as Investor at on that a remind everyone discuss we our that as our slide morning. is Relations the available the I'd well presentation morning, Trustmark.com. fourth website quarter earnings

may forward-looking meaning XXXX. actual course Securities which these Litigation Private number of may outlined We and statements from During you of risks the the in like release, a materially call, the due to caution make forward-looking Act Commission. of with of management our differ results statements would to within the Reform earnings and filings and are our Exchange Securities uncertainties, other our that

introduce Trustmark. CEO President to Duane At Dewey, this of I'd and time, like

Duane Dewey

Joey, had quarter, and insurance our Tom and Chief the Chief strong solid Owens, With everyone. our in for officer. growth, Thank Thank as performance good net management Harvey, Officer, interest solid businesses, of loan our Credit Chambers, Operations record Trustmark credit morning, wealth and are and you expansion our accounting me morning you, by margin, reflected a quality. fourth joining and Chief this Barry Financial Officer, us. Tom

recognized by million. or With reduced that As diluted Group approval, of began we that, per settlement of $XX.X charge, share. the in $XXX.XX relating loss per income $XX.X claims share. Trustmark fourth $X.XX quarter settlement In litigation current a and $X.XX net net future million fourth Financial diluted reported or expense pending this Trustmark to XXXX. will fourth a million quarter The settlement previously disclosed, agreed court potential all involving Trustmark quarter, resolve to Stanford the litigation

as the focused us, With Trustmark’s opportunities expense, net shareholders and is on representing totaled Trustmark settlement eliminates $X.XX. issue the the in believe We diluted behind risk, we're earnings this full ahead. future and and million, best our the uncertainty. per it of ongoing share of interest For $XX.X the year, income

quarter Excluding expense, $XXX.X million, the XXXX, settlement or $X.XX litigation Trustmark's million fourth of diluted representing full diluted and share income per for the year in totaled $XX.X the per earnings $X.XX. net share,

look let's for $XXX detail Deposits totaled of year. prior turning the little Revenue $XX.X an totaled quarter, X. billion, increase $XX.X prior in year-over-year. At by X.X% loans linked-quarter. Slide to in highlights X.X% $XXX.X the increase up XX, more our a December Now, billion investment linked-quarter, $X quarter the fourth from million of financial of XX.X% or at held billion, million and million, an million $XX.X and a from or decrease totaled $XXX

year X.X% or in For million, from $XX.X excluding totaled revenue of quarter, $XXX $XXX million total totaled income year. an settlement, Non-interest million Net in represented linked-quarter. increase increase fourth X.X% income XX.X% quarter, of litigation or the million quarter. or million, million in increase $XX the $XX interest and an linked-quarter. the Non-Interest X% totaled expense fourth $XXX.X of fourth the prior the XXXX, totaled the revenue

X.X% cash to increase X.XX%, capital represented March ratio a share, impact declined individually March credit for non-performing dividend expense, a maintain per Including risk-based of on board declined excluding The the as quality assets for solid quarter total million, the loans. quarter, to from evaluated shareholders remains the with total of a we $X.XX common a of record the Xst. tier held losses X.X%. of six fourth capital and in declared points The this continue loans for loans XXth represented litigation one payable XXX% loans, settlement, capital loans. total and allowance charge-offs ratio excluding non-interest levels, year. the totaled For prior year, strong basis settlement, the X.X% quarterly of non-accrual of of investment XX.XX%. average $XXX.X Credit net nearly Non-accrual

I'd to on and quality. Barry growth loan time, credit like provide this color to ask At

Barry Harvey

and be I'll you. Duane, to, glad thank

increase, Turning mentioned, Duane prior occurred $XXX XX.X% do X, as to X.X%, of $X We're XXXX. loan linked-quarter, category. million year. growth every the Slide loans continue solid or or and held excited an of totaled billion $XX.X to investment through almost as growth QX about for expect for billion the in extremely that XX/XX, We loan

product Our as loan diversified upon based be geography. well to as type, both portfolio continues well

XX% and is development. existing XX% at land X, vertical, with construction Trustmark’s Slide Looking CRE portfolio XX%

as estate XX% Our construction bank's The is has mix as owner well industries. land development portfolio types, real construction. portfolio nice between occupied a

Slide well segments, industry to category you can exceeding bank's is see X, commercial portfolio with no single numerous as diversified, Turning the across XX%.

for Slide by for Moving sheet provision for commitments increases in million. loans the allowance credit loans losses XX/XX/XXXX, off million unfunded the quarter, credit driven the $XXX.X attributed exposure At for provision in held forecast. both in macroeconomic and in loan our growth The to $X.X macroeconomic was for $X.X for losses X, quarter, balance and on fourth credit fourth to credit the for held primarily the forecast. totaled the weakening was primarily investments million investment now losses

remain X, for of individually excluding for the those Duane. loans, X.XX $X.X Looking In the assets at Net charge-offs The fourth post or low Both metrics. continue only we and non-performing X.XX%. that levels. solid loans million and Slide allowance analyzed. charge-offs for of credit quarter, year totaled XXX% investment, losses quality X.XX% loans. are held near or represents entire to historically average of non-accruals totaled net non-accrual credit nearly $XXX,XXX,

Duane Dewey

Barry. you, Thank

Tom interest like net Now Owens turning and to margin. the to our liability discuss balance I'd side ask of the sheet, base deposit to

Tom Owens

good and everyone. morning, Duane, Thanks

only million by more driven totaled December deposit fund suits. The XX% non-personal balances, balances than decrease and year-over-year. personal billion and public deposits personal with about increase linked-quarter, by in the million essentially non-personal at were $XXX The balances, driven year-over-year decrease primarily fund by in was decline $XX.X decrease deposit at deposits in a balance XX, flat. a X, while balances, offset increase driven Slide increase a linked-quarter of was on Looking decreases $XX.X an public by

remains granularity our the strong. So, of deposit base

prior increased XX points basis XX quarter deposits the from points. cost of basis by interest-bearing Our to

to maintain mix, XX% balances continue a checking and in XX% We deposit accounts. with in of deposits, non-interest-bearing our favorable

our net increased attention of totaling a lift representing on loan and basis $XX million revenue respectively, Turning net resulted linked-quarter. income partially XXX, continuing deposit margin lags borrowing in the quarter a XX, of shift betas, continued Fed and expense. a rate million, That margin in yields in interest in deposit $X.X by increases, increase million, net linked-quarter, XX million million continued a of interest increase to ongoing $XX balances increase interest included of was asset mix. contributed realized and FTE which Drivers million $XXX points. Higher during the offset Slide in net about linked-quarter in $X.X $XX.X a earning costs, and expansion

higher asset Turning remains the with well positioned loan for driven to variable interest substantial rates, XX% balance sheet portfolio by sensitivity with coupon. mix, XX, Slide rate

the a During at X.XX%, of implementation maturity maturity weighted hedging our which $XXX average the manage X.X adding portfolio brought of fourth cash to notional rate year-end continued and average of asset X.X years, receive average interest with up of a shock, by with as the we remains one weighted quarter, average years in X% fixed increase a million sensitivity and basis-point program rate $XXX years, of weighted million, flow asset-sensitive to a interest the swaps, notional and about rate a X% beyond the X% shocks, reprice. for for about weighted The NII two fixed in basis-point to increasing XXX. XXX basis-point shock, XXX a at received year balance with rate shock, continues immediate to about for and of XXX sheet benefit

the full lower year. $X.X full insurance to or full $XX quarter. XX, changes year. $X.X Turning or The in decrease, quarter, million, linked-quarter fourth and million $XX.X Service and quarter totaled other which year are items non-interest Slide by million banking normal $X.X quarter, principally totaled substantially full linked-quarter of was of fourth while mortgage seasonal full card other million million million XX.X% linked-quarter to decline revenue And linked-quarter the million, fourth million $X.X accounts Bank income the increases million decrease totaled That's offset $X.X a $XX.X charges million due decrease a in year. XX.X% year. on while increasing a line and for full $XX.X a revenue, $X.X in of decrease increasing a increasing fourth while fees or $X.X year. X.X% in $XXX,XXX, totaled the deposit million,

XX.X% revenue For a the represented quarter, income demonstrate to of fourth total non-Interest stream. revenue, continuing well-diversified

million. negative million for $X.X million million ineffectiveness, That’s $X.X Now, increase looking which decrease driven by a the mortgage fourth $X.X quarter. million hedge and in sale, decrease a in to a banking banking. in totaled quarter gain brought Mortgage XX, on the $X hedge ineffectiveness at linked-quarter, revenue negative Slide $X.X

$XXX totaled year by volume billion, full XXX loan going XX% mortgage Reduction fourth of in totaled the year, conforming portfolio third originations. year-over-year. XX-year million, million. linked-quarter the production, market while sale. rather quarter. continued Gain gain for retain on to the secondary X% points consist the represented represented increased fourth strong XX% linked-quarter. For Retail from in about XXX about XX% into banking fourth production decrease XX%. by sold sale and $X.X margin arms, balance XX% million by in declined driven a of of our majority of of in on points quarter, or hybrid sell, the The we've sheet Loans $XX.X Mortgage the than in representing quarter, while the the loans reduced loans decrease remained of XX-year $XXX loan held production to on basis quarter, basis a

Chambers and Tom expense ask to cover non-interest capital I’ll now, And management.

Tom Chambers

Thank Tom. you,

a million adjusted, total. expense a fees. XX, expenses or Slide linked-quarter severance in quarter, lease organizational FITXGROW non-interest early quarter had and out non-recurring initiative, and $X expense totaling fourth Adjusted to during expense to broken the Turning increase branch million offices, $XXX.X from termination between We restructuring closed of of to was related non-interest detail fourth you'll legal see the the million X.X%. our $X.X other, related

X% $X.X these expense linked-quarter. Excluding or expenses, increased non-recurring non-interest million

remain well perspective. common fourth X.XX%, As the one Trustmark shares of ratio capital equity XX, from XX.XX%. positioned not of Trustmark during December tier noted with a quarter. capital capital a its a common Slide ratio At our total and XX, any on remains risk-based of ratios repurchase solid, did

a which The This previous its of program, Trustmark XXXX. December outstanding new authorized XXX,XXX or XXXX, shares, through shares of of to XX, Board stock the stock. be program, million XXXX. Directors previously repurchase million XX, repurchase up on may $XX $XX.X authorization its replaces expired common under stock December acquired During prior repurchased common approximately which

ratios capital ample is position loan by to growth driven substantially initiatives. the and capital our priorities While Stanford remain our our the declined implement linked-quarter, of ratios and capital litigation and above our combination settlement, robust well-capitalized, corporate

repurchase stock meaningful board-authorized maintain we to we our repurchase program, Although million XXXX of in authority during stock way. a in are $XX unlikely under engage

For Back our the capital time for lending. being, to you, priority organic is through deployment Duane.

Duane Dewey

Tom. Great. Thank you,

review Turning to Slide let's our XX, outlook.

investment with at grow We're team, organization, balances mid-single are production expected will high for balances now Note, the a expected loans decline start including non-reinvestment quarters. look the to expecting driven activity. campaign balance first based Let's digits held to cash year, single on finance are to solid Security single our sheet. mid coming grow digits in our full Atlanta to Deposit is of high digits office portfolio for by contribute promotional by year. very to staffed equipment flows.

of by fees, be based to accounts consumer expect the a based rates. income we're a on be losses, on reflecting forward expected flat to reduced reserving, growth expected and implementation minimis incomes to checking elimination portfolio. we above previously we Moving unfunded as is income require future reflecting stable, service to is activity. to charges mid-single bank levels. NSF net charge-offs additional full to Net that margin digits, statement, loan current are for and remain card of macroeconomic the upon nominal, grow well customer interest credit including outlook XXXX perspective, and as commitments, low transactional From de and dependent provision net derivative year as current and on current on The market-implied non-interest expecting interest levels fees consumer forecasts, the announced,

initiatives, management expected revenue is increase banking wealth at expected expense with level. year to to the single Non-interest is expected full expected to is Mortgage increase increase digits. Insurance to stabilize mortgage prior mid-single high revenue general subject digits year, on and management. year. as We the commissions reflects to FITXGROW remain for pressures, digits in the wealth intently throughout inflationary XXXX. of mid-single is impact insurance and focused discussed our This

to new of contribute noted, of XXXX. business, in in a staff, begin expanded As our we've talented team production added growth line significant will of which markets, expanded all

to ITM franchise closing to and with We the provide and to invested the retail of serve ATM and efficient. Additionally, technology our offices of XX in profitable we've continued new more Trustmark better investment this future. believe We've the customers into across focus the deployment and franchise, become positions technology. optimize growth

will to with deployment, approach we disciplined organic repurchases. opportunistic a preference loan Finally, share potential M&A, growth, capital continue for and

fourth our of commentary, we'd like the questions. overview that financial quarter floor and With results to for open outlook

Operator

question the from Please will We now session. Mealor KBW. question-and-answer [Operator will the first Catherine from go Instructions] begin And be ahead.

Catherine Mealor

if morning. Good Thanks. dive we guide. lower into wanted I first NII see could the just

you little If deposit course trajection could Thanks. betas get to bit the provide maybe of lower of thinking the guide. on cumulative margin year NII the how just over to a commentary of and about you're the that

Tom Owens

Sure.

is Catherine. morning, and Owens, This good thank So, for question. you Tom the

say this quarter's - indicated deposit We're here for growth building With team on we built ’XX, way. well, that we're for me it that we've plan from up our let think plan the as approaching based bottom So, internally. last - the it. on I to respect call

of said we of we on out a here As end staying forecast about for the by XX%. fourth is the first at we Rate full the into model our continuing market-implied last forwards, quarter early of time based continued Funds X% basically third, We're XXXX, which quarter's late Fed topping continue the and remainder there - the about on by year. of quarter, call, get cycle to the beta

And rises said, for time And built it as company, when the we've from a about And make that bottom up, our modeling from year, for that so, the as with Rate the results that Fed historical sense. the the since I long at down, broader I costs been in X.X%. well But X%. consistent look experience interest-bearing the plan. to top means look our historical deposit our we're is I Funds at later I it the actual at it's experience. mean, when as now industry, was the

other had XXXX. our XX%. ratio very to of per follow-through it is, in And rose the in We momentum gave. quarter The aspect loan the loan we that guide growth continued robust anticipate deposit to Duane

really go focused to deposit that We ‘XX. on growth on beginning of maintaining come really not We really loan to deposit strong the rather as would And flat for focused We like growth XX%. we're deposit relative deposit trajectory to loan here accelerate essentially growth. liquidity. to would we're above So, quarter. with ratio accelerate we growth, were the into

which thing the base of really The environment terms other reduce a I'll you is the say, I'll HX challenging of Fed see the as state the the aggregate environment it's obvious, industry is, look at at liquidity you United look headwinds the in Fed withdraw the declines an and report terms if month-over-month to deposit continues in States, it you in facing unprecedented in accommodation continuing the and system. from

So, of the uncertainty lot in obviously there's forecast. a

really to the first that being here promotional contributor, quarter, say I'll personal deposit able that do is, promotional we're during maintain started quarter December, beginning essentially flat bit in earnest. deposits is campaigns launch and in a in the to was The activity We us other to by. to encouraged thing very the which a when we're

competitive the top And so, at deposits, in liquidity industry. the landscape mind when look obviously for of right is you now

time those net the this in thereby margin. our so, deposit best increases interest costs, and interest-bearing is at in on estimate And this terms of pressure

to forecast here And linked-quarter so, guide in implies in what about in interest is, pattern interest increases in we're implies, the net implies ‘XX. it XXXX, margin linked-quarter is, declines think obviously what the going experience net you margin our of

Catherine Mealor

coming think higher? biggest where just feel perception, anything changed our trajection I the NIM it at margin biggest sensitivity? you you you the as margin, And like stable begs last looking were quarter? you change versus kind for and question, perception as - there there a to think at is trajectory the least What a the are. funding asset is think or Is your besides the but had not you've there And which asset-sensitive still do then, anything costs about of more here, just were to still or from to in else surprise estimates seems the is you consensus, assuming else this lot expansion back fairly - of of maybe like

Tom Owens

it's Well, I don't changed question, we a good have our asset and know perception of that sensitivity.

So, our risk, be baseline when here the call look to of about look for the neighborhood we the at example, you as our report and NII file XX%, yield continues talking of reflect beta, betas that which scenario. loan and those if we're kind of we the at numbers in you terms in at publish that that numbers in our

really the the again, I been there to a and in part go And you Catherine, mean, there the the robust see hasn't is change broader in would fundamentally, industry. back change we I rate perception very the HX, say double-digit for in internally. in the if that I what experiencing loans industry, growth. growth So, loan of you are run at look industry, is,

You a industry. and base seen the an in deposit have in flatlining the now decline outright

a perception difference there's to me, difference if make about keep come with as Trustmark, trajectory here loan So, that we growth the is and sure to liquidity. strong wanting us to into the that ‘XX in can difference, proactive be a really on pace maintain we externally deposits have

Duane Dewey

expectations last we earlier, that still noted which a or think line, with that emphasizes a on we we then and Yes, latter I the competitive in the solid side. pace have tightening is. need I move it's to would into environment but extremely Catherine, of in look a some the half, is - and know into we would of out an tight that's and for we're the XXXX, growth loan as growth in in the surprise, what on do have talent business XXXX. and half we investments that the expecting what new I liquidity it's Tom's like side, and just monitoring, latter expectations, certainly made in deposit new add keep think deposits. I think would still XXXX, what accelerated And that comment that Duane. term continued really add don't I I necessarily we're - this loan And

Tom Owens

I challenging - again, that that just Catherine, make, how of the circumstances right? I'd uncertainty, unprecedented really. point and it's mean, last The would environment it's set I reemphasize just is Yes. confluence the of

our like we're of kind deposit the tactically, go. a industry, as side strategically as on a lot So, figuring peers we of in the broader well out as

Catherine Mealor

could you your the last you argue cycle, have cycle. at And level last you of last looked beta if didn't this of cycle proxy, growth

And makes beta growth just given outlook intuitively so, is that sense that your as higher higher, well. your is

Tom Owens

point and this again. and Yes, said think I'll I've I this make before,

it's can right? X%, talked in a really last X% Rate look think important. I was X%. much longer it mean, longer at Funds to took the was I Funds the back argue the I If you then was sides get about both Fed of Rate it, ‘XX. when and time it Fed I to cycle,

you cycle. when much way, this so, And it think is a this about shorter

cost beta the hey, when X%, quickly, and changes higher your time I less? years the is do essentially in beta. that your all the do don't higher You effectively, we think certainly to around the think have it was for in argues and realized you a our you now moving what could that, that Funds search that funds to passed flip XX argue and about Rate a could I ability of since the and is, argument. side effective yield, hold technology going at The be it frictionlessly Fed of the last And palm in you legitimate could that's that, well, hands, think

estimates estimates in So, to those together, our at emphasize, again, things think point two put those me, time. you But best this that our reasonable. and I I'd are are

Catherine Mealor

NSF on stable all of year is over a service other That's really fee service that question Any of more I guidance changes. expecting kind XXXX just And I charges. was it. to service be charges. want year-over-year. the - Got that your then so I just surprised decline with to just maybe charges helpful. was full level clarify one for the stable of

Duane Dewey

reflected reflects we're a note increased seeing, change, little the outlook, I stable I think that. in and and quarter, what accurately NSF we’re on No, a fourth but think, million, positive slightly, seeing you'd minimis fairly about still what Catherine. than stable to changes if more with the we're do And down you economically, we X-ish were activities feel maybe

Catherine Mealor

Thank All you. Okay, great. helpful. Very right.

Operator

the with question Fitzsimmons will from next And Davidson. D.A. go Kevin ahead. be Please

Kevin Fitzsimmons

out into there then guide is. core, would like don't Hey, hoping, settlement, what - that to maybe morning, to for for about when not lumpiness on the like And was good just it digging digit $XXX it rate going going expense ‘XX growth, seems for we're at a I run million? other sounds expense mid-single was little quarter, it I million be full bit, pull one, $XXX about hoping is non-interest adjusted clarify Is forward. everyone. to but which look we flag this year maybe the this the talking I number base was than and - because of some

Thanks. those at to look trying So, I'm expenses angles. from of both just

Tom Chambers

So, Kevin, is this Tom Chambers.

a had If yes, right, going forward, you little lumpiness quarter. you're expecting the in what fourth look had at we're we

quarter core pull and and non-recurring, expense, typically or intangibles. significant non-interest our was Our which ORE out this litigation we adjusted of some the non-routine settlement obviously amortization items,

environment what digits continued So, benefits, competitive with and we and items a type and line of salary those going that is year technology with, forward. we next feel in mid-single have investment

Duane Dewey

- quarter. we noted significant, some as a are that there our legal little the did are sort individually some thing, Kevin, and quarter, level, the but And, in closure add not impact some cumulatively severance branch I'd individually, costs but that were on to probably fourth fourth and costs, like that cumulative as a things bit comments, material, and of expenses

in higher that look the be we start and is non-recurring commented seems flip minds then everybody and things. on, of employee And on costs we've kinds feel that general into are commenting of items. we those as things XXXX, general the other inflationary inflationary of our that so, And to

it single of the mid-ish us that to full kind XXXX. increases digit So, of to mid-ish, for takes kind year lowish

Kevin Fitzsimmons

Thanks, that for Duane. roughly is base XXX.X for handy, that, the - have that Okay. million full And If is clarify, fine. to you year? don't that's just it

Duane Dewey

one sec. on Hold

I think that's though. accurate

Tom Owens

I think well. as that's right

Duane Dewey

Yes, I believe that's accurate.

Tom Owens

Yes. XXX.X. Correct.

Duane Dewey

correct. XX.X. Yes,

Kevin Fitzsimmons

Good.

Okay. of of not that a a And being you've don't deposits a growth then - that. we an but uncertain to you're unprecedented you up want still had just you're Can It's maybe to and n keep I follow that like ago and - at? as on lengthy so alternative back the XX%. looked pretty all where aggressively now, you I acknowledged about bit ratio lot for have one minutes like, take loan the - And conversation seeing it's dialing deposit few a at the economy to to the have and you for that you're deposit stress credit I recognize NII environment. don't recognize and proactive over loan environment, deposit chase how all dialing ratio totally and right loan a

sectors. some we've And for issue, areas from next look so, obviously just we hey, we’re certain but at banks growth away when there's - demand outcomes or saying, also heard there's like stepping commercial real loan a estate year,

one and did yourselves want marginal that's in but we amongst - it go way throw conversation a just our to hey, about, that I'm do lot grow at to you, grow stable less of just the is loans know aggressively? I NII, So, how but

Tom Owens

bit. to ask This I'll start question, then Thanks. I'll Tom. Yes, great so is little in weigh a and Barry Kevin.

We internally. have absolutely had that discussion

that. looked it's where bit. our let peers, you Barry opportunity, environment our some absolutely some back competitors, have of as but of an you that the have pulling I'll at to said, just side, speak lending We creates a

and potential lean evaluating we're thinking growth. of of each deposit of course, and marginal the to base return by basis. a we're cost those of here our about loan, repricing we to of funds extent the really course, accelerate so, a loans, And try loan certain on And as in deposit

discussed So, that. yes, we have

about have thought We that.

that. about think to continue We

be creates One in of always at what the to the going the not that look think with right? But the environment you we're that where for too I happen, absolutely or marginal In have pulling at that have talk us, things that means truly is kind us. of this them, they relationships And on thing that work going is, is loans relationship marginal, where there's being growth banks their Barry continuity. creates right? of margin. environment, for to some prospective it they will they opportunity. other disciplined. bank we're is current And return existing probably When this relationships are or doing And about we are back, opportunity

So, kind I'll just there. let Barry of pick up from

Barry Harvey

when only from are from perspective. echo we're deals, that referenced. from Tom deals, we scrutinizing of looking not on and ever from just credit ROE an but a standpoint, thoughts probably some and return a than at I'll the closely Kevin, Every standpoint day, the Yes, of more those investment

on the there's XXXX, of Pricing that the saw - Those there itself lessening They're advantage to categories of positive. for competition growth that, a We fast in of business grow improved, for in of the want we're what XXXX office, of maybe to loan it acceptable new And today. way and knowing competition. a the great been, CRE of those wise environment XXXX of loan credit and don't the in XX lower Atlanta on few similar expect to uncertainty mind, sure today some a foremost. selective to we of we first growth, for And the up to little is with by have flip months that take as it's We as around that. and in that there's been is of our reasons. there bit along view alluded terms out customers, do we those. line a and going lending. additional profitability a make transaction passing gotten be get the somewhat quickly there very opportunity Also, Obviously, additional staff that And we've the pricing we Those can of are we bit quite structure grow need to of do are that what are because aspect job. we've be deals all we've and equipment those. manage. this just that to on trying avoiding years, Structure keep prices the been has spectrum greatly some always situations, getting with and going finance because with take some of of that some right as things the, that don't of better. And we’re better. been that to is what Duane for same growth our standpoint. from we see deposit how with to, C&I definitely as on have lessening where were did to in Being that ago, improved expect and side in definitely indicated, was coming little avoiding. challenged deposits we lending to selective our in a raise - added pricing we deal we on of the categories categories variety uncertainty, more We doing going we've are of trying has want one we'll full the middle are

do to do return to a be more One, there's existing manage, a growth, from to do a some deal look expect new do less have on things. And be of selective investment as trying we're at. We combination of every we less but standpoint, business both with and ROE additional little competition. resources or there we little relationships CRE and to, line Tom a and have we C&I. have alluded a we lines, and So,

there's, convoluence at those So, a Tom all said, one as time. things of

with. be those - as in what expect the guided, making with then is pricing selective we're solid do that have line to to growth sure as we to we're paying we've can but deposits it good be, and loan for So, as we fund trying

Tom Owens

would at how other cost, and and of this it versus and that and doing the such deposit unprecedented at team point, I to in our meet environment, have activity, repricing terms terms add funds In book. yesterday's in o'clock, environment, every point. is of one back both activity I'm going we're a we we in volume just morning of just extent try and reemphasize looking attracting we're I an new terms internally eight to Kevin, deposits this reports promotional again, which the And - on we're and

quarter. the in January today We're XXth. so, early obviously And year. the early in is We're

of emphasize to considering estimates going to a What the mean, returns today. is reflects the and at will just accordingly. marginal guidance We’re evaluating need pace. that we're we're to we and you team want evaluate the versus recalibrate obviously real nimble today, made, best to we're I'll bring I and book continue morning that to robust as And cost I go. the it just base that recalibrate the I of our the adjust, be the right? grow and And continuing reemphasize, in every to just Barry to point time back deposit to that giving growing loan

So, that want just point again. to I make

Kevin Fitzsimmons

appreciated. much, that's Thanks great very and very guys. All

Operator

instructions]. [Operator Please ahead. Dave Bishop is from next from Hovde Group. The go question

Dave Bishop

good Hey, morning, gentlemen.

to it of in as how terms what in for should guidance, terms terms of commitments? it for about investment, macroeconomic terms some - we there, when lot of clarification in credit is of provision to held data-dependent or Just think the of the unfunded the in for that guidance curious, loan Turning incorporates. I forecast, about talk that just losses, trends a we about but inclusive you that loans of the talk or just know relates

Barry Harvey

example. Yes, And because definitely had Dave, a of good We is this quarter's our good both, on this Barry. CRE side. lot production a

based there's the put bucket, And so, commercial bucket, within variety do fully eventual - there. that we a commercial construction those we types But obviously projects upon have them we within nonetheless, that on based construction of exposure. opportunities, reserve of new upon for as

portfolio on to the for with able continue we projects a of need of unfunding the on So, in we'll of production, level as I there as mix solid the it. the the maturities. well books, environment, as aspect types terms the the mind, level reserving, those earlier books. macroeconomic is loan And have obviously, unfunded are funded, mentioned continue a in immediately growth, both commitments, an that we're length going funded the credits putting and of on to to nice of impact with of

As up, pick an the on well. the that speeds has as diminish or impact pick up - as the provisioning speeds obviously

the for will, different impact unfunded those all not the provisioning book, only for book in the aspects funded well. as but fact, So,

Dave Bishop

then to that are Appreciate like in And bit. securities, outlook the of it going a clarification. for great. those down terms be sounds Okay,

percent curious quarterly terms of Just asset in how and a that of flows, becomes you're as base. small what of overall maybe thinking Thanks. cash

Tom Owens

Tom. is this So,

off about per million So, to million $XX throwing $XX the month. portfolio is

So, let's to call XX XX. it

between million value. book would in to $XXX or decline I so. million you're million So, a $XXX $XXX say the

the carrying Of for course, continue twinges borrowings. our get generate AOCI liquidity the portfolio to run with we've again, And off ‘XX the we've had, and of But obviously, this intention to down value with had, some loan changes the very wholesale we'll is point FS in year-end you loan because off given substantially to portfolio. run through being. had securities robust in growth the at growth now, portfolios abundant the that to excess grown our pay for during the liquidity. time We ’XX that

Dave Bishop

you. Thank Perfect.

Operator

go from Carl next Raymond James. [Operator question Please from ahead. instructions]. The Doirin be will

Carl Doirin

of asked, couple you Thank been have morning. follow-ups. good ask but them questions. my Most Hi, of taking I'll for already a

basis of down hundred non-interest-bearing could almost low it concentration, was in that guidance for embedded points. either assumption margin, I terms get? a how Just this or do noticed the maybe or couple quarter, have probably of you an

Tom Owens

- It modest Tom there. Yes, we’re quarter, this was down it was down continued decline Owens. is this projecting and

that in the big being range up but Trustmark, change deposits. Trustmark, mix you historically the deposit from of not by which one of is to for to Rate in Fed time XX% X% time the at somewhere said, get Historically, I Funds year, for a deposits. As up you into and of time the extent the the with industry, industry, your again, and mix wild think we end I cards here just non-interest-bearing experienced this

high we of of not if into I digits. year it to think how the be comes year. the double remains course it would single will that, much so, the came easily that more, non-interest-bearing. And seen And over out of

I just of The as tremendous we And or my holding business increase other thing function of the a is, Carl, most saw comments, it, said was in liquidity. deposits accounts. about decline businesses in non-personal in XXXX in prepared

the And its like amount in it of run now in certainly that was a so, and seems fair you part terms has saw that course quarter. fourth what reversal, of of

be to seen stabilizing out be remains well. plays it that seems It a as So, to bit. how

Carl Doirin

I for and large XQ. quarter you All you noted right. unanticipated second both expect And Thank that typically one, you that. last in think anticipated payoffs,

robust what With was how talk the growth payoff now? looking in loan is quarter, and you paydown this it about activity could XQ, and the

Barry Harvey

to worth that most $XXX extended we the resurveyed of are long leave round of leaving matter thought it going a were manifest fact, the middle but glad baked is kind correct. be in little December, of farther. a not, part. XXXX, we for our would or into QX anticipated projects the would we lot growth, And to going project what they or us that when the when just how and this going us guidance. lenders at to obviously terms is that did is and because one point of give two are having in had during not in they XXXX And to, for XXXX. may be had QX numbers, slide those million quarter projects loan that of about, credit assumptions into December, bit We hadn't little And we so XXXX, and itself indicated CRE. Carl, and in the actual growth - Barry. I'll to we be they specifically exactly first experiencing. of got of there That degree - part had work we but delay, have a and in about of they treasury but of it was did out was conversations been you're we've been into a about There

in much than that but from XXXX they're going upon - themselves stronger really they and leave change outlook it resolve ballroom. based XXXX anticipated, So, resulted our for last the like to do during didn't because fourth a the we information quarter us

Carl Doirin

settlement. I in me, activity obviously share assuming last repurchase maybe the for paused to it's XQ, I'm then All and right, one perfect. And thing the Thank you. just, due think, you

being how plan Just going to you active forward? do

Tom Owens

Owens. is So, Carl, Tom this

experiencing said The comments, Chambers foresee, we really can be deployment. as capital circumstances preferred Tom really prepared best present our loan growth we're activity. meaningful engaging it's robust we'll unlikely in As share in that his given the that form is repurchase of

Carl Doirin

All right.

you. Thank all Okay. for That's me.

Operator

for closing concludes this session. back our turn the Dewey to I gentlemen, question-and-answer remarks. over and Duane Ladies would any like conference

Duane Dewey

the challenges this has move to excited again end again and helpful, been us ahead. the hope for at are joining the Well, this XXXX thank tackle forward connecting to morning. look very we and We information into you quarter, of first and

quarter. of first to talk we'll again you at end the So, the

Operator

The you for conference has Thank concluded. presentation. now attending today's

disconnect. now may You

Trustmark (TRMK) 25 Jan 232022 Q4 Earnings call transcript