TRMK - Earnings call transcript Q4 2024

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Operator

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

F. Joseph Rein

morning. Good on remind presentation fourth on trustmark.com. that this are to and earnings our that section morning slide Relations the will available everyone like website quarter our release call of I'd our Investor at the be discussed

and our like forward-looking within a to may that forward-looking of may caution the and number Act of differ outlined make Litigation I'll our statements actual to At Private risks Trustmark. you Securities Reform to are management results of materially XXXX. call, meaning During statements the uncertainties, filings We of due in CEO over time, earnings which other Duane from would our with these this and Dewey, turn call release Exchange and the the President Securities Commission.

Duane Dewey

everyone. sale Credit and Financial and our Operations Owens, along prior enhanced the reflecting Thank performance for of our customers. the and actions, Joey, earnings are With sheet for year and Chief joining Chief the Tom morning. was initiatives our you, Accounting good Trustmark, our us other and me Harvey, you service Officer. restructuring sales this significantly Thank to our our XXXX Chief agency, a Tom and the balance expanded needs initiatives profile. These of years, designed insurance have in transformational with Chambers, Officer; of Officer; meet Barry morning, Trustmark's financial

share the program. led decision with quarterly which capital increase to activity dividend, Board's renewed levels repurchase meaningfully, rose the Our along cash to in the

increase $X in $X.XX of represents $XX.X with along significant income $X.XX million million, EPS or progress diluted increase quarter across of continued X.X%, linked-quarter the totaled Our This EPS. fourth per a share. diluted Net results representing reflect an organization.

a quarter the assets on average and X.XX%. return produced tangible in XX.XX% performance a equity of on of common return Our

XX% from operations of $XXX.X share. the For full or year an $XX.X This $X.XX increase represented continuing year. million net adjusted diluted from or million 'XX, totaled the income per prior

a to of let's turn financial for Slide highlights. X Now summary

totaled the linked-quarter $XXX.X $XX.X deposits with billion start Investment million reduction XX/XX, includes Held broker million million at of linked-quarter, for at totaled year-end, up during $XXX million billion Let's year-over-year. the intentional Deposits in an $XX.X down balance $XX sheet. $XXX.X down which quarter. Loans and

this basically million. Excluding deposits runoff, linked-quarter up were $XX planned flat,

For totaled million, includes X.X% brokered the planned and manage million. linked-quarter. in of public deposits 'XX, up Said we diligently year, full Revenue differently, totaling in deposits $XXX.X $XXX.X declined million, deposits other which $XXX.X deposit the all $XXX.X costs. fourth quarter high-cost million while the increased reduction

on cetera, little adjusted totaled quarter broad-based million, totaled year the the 'XX, provide $XXX.X million reflecting X fee-based color Tom revenue year. net For a interest across in Net prior minutes. virtually linked-quarter. up total from $XXX.X income interest Noninterest from full million, X.XX%, Owens quarter, in $XX and growth fourth income up all linked-quarter, producing basis a the continuing businesses. will X.X% et margin of NII, points in operations few a margin up was the fourth the X%

the income million, Noninterest fourth noninterest from operations continuing From X.X% $XXX.X expense or noticeable we've totaled continuing from year, the full an adjusted totaled of improvement. increase linked-quarter. X.X prior shown the For from operations quarter in expense $XXX.X X.X% million perspective, million, an year. up

allowance the a totaled net focus million million, XX.XX%. loans. tangible of credit nonaccrual Diligent a for points be charge-offs XX from capital for management continues during prior from analyzed to noninterest average expanded total quality expanded year, to expense expense X.XX%, full assets adjusted the representing the operations ratios organization. the decline million of quarter XX the the year. fourth tangible Held expanded $X.X the XXX% meaningfully quarter, $X.X in XX.XX% points perspective, continuing and and Investment risk-based From while loans, X.XX% basis For loans as individually to of of equity basis ratio totaled $XXX.X capital excluding loans. ratio credit CETX increased of The a to X.XX% represented to losses Trustmark's

program. resumed As we I activity in mentioned the earlier, share repurchase

During the shares approximately we as million shares XXXX. repurchased And $X.X up authorized previously common of fourth stock. we or of announced, Trustmark quarter, during million repurchase $XXX are to XXX,XXX to

XX, X.X% Additionally, regular the record action, quarterly shareholders March of per the share. per $X.XX repurchase the The per time, and performance is action $X.XX to quality. and share payable rate Board share annual in from this Each earnings At the and Barry profile. announced the Harvey financial improved raises share program the on to reflective This $X.XX increase to X. March quarterly going dividend from 'XX dividend a indicated forward of dividend share. $X.XX portfolio renewed credit loan Trustmark's activity the review is in per to are dividend enhanced

Robert Harvey

I'll morning. glad Duane, good be to, and

flat investments relatively were is the CRE Increases $XX.X other and loans. and of the other as commercial for and mortgages loans quarter totaled multifamily, Slide family XX/XX, to X-X by loans state declines Loans in in loans, Turning billion political held for from fourth C&I offset quarter. X. which and

We expect single loan XXXX. digits growth low of for

product standpoint see, loan as a well diversified, geography can you from portfolio As as remains our standpoint. both well from a

X. with in Slide land existing category and XX% Trustmark's construction is XX% CRE development. vertical at in XX% portfolio Looking the

and outstanding, is occupancy is XX% Our only X% overall see, land our modest credits book. construction. comprised loan portfolio low million The $XXX portfolio of very Trustmark's development of low leverage. office turnover, tenants, portfolio, as which can with represents high-quality is strong at construction levels you lease

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

X. to Slide Looking

for loans credit commitments. was The investment $XXX At increases was in credit XX/XX, was macroeconomic for our Held by loans unfunded qualitative which as $XXX,XXX, for $X net Our by the held driven by in the provision off-balance for well factors. losses held during quarter, as losses sheet for Investment credit forecast million the credit exposure losses for provision the driven to qualitative allowance for adjustments for million. was for -- net factors, adjustments

X. Slide to Turning

increased The was X.XX%, quality the for totaled metrics. by of continue credit excluding net quarter losses post solid nonaccruals, those $X.X fourth allowance In million. analyzed. prior credit quarter, We individually representing XXX% charge-offs XXX%, are that to

slightly assets and While during quarter, have they effectively assets nonperforming both manage Duane? manner. year-over-year a continuing nonaccruals to increased the efforts problem timely our declined to and meaningfully resolve due in

Duane Dewey

Thank Great. you, Barry.

deposits, interest cover and will Owens net Tom noninterest income. Now margin

Thomas Owens

everyone. Thanks, Duane, morning, and good

on The totaled run CDs, in linked-quarter at rather allowed at decline brokered $XXX.X million decrease we was deposits Deposits which X. million. decrease off XX, a decrease million $XXX to $XXX.X $XX.X December to of Turning a a replace. driven year-over-year of billion linked-quarter Slide maturity and by than

$XXX fund chose in by balances. posture reflects maturity. solid deposits of a intentional The decline in $XXX about of year-over-year and declines the That at on driven brokered about commercial Beyond not million less of offset balances. about $XX increases decline $XXX rate in million deposits, million our million CDs, and $XXX competitive in to were of quarter personal with runoff Those was significantly by million public million which we by during the balances million renew brokered public balances. of $XXX in $XX growth fund increased

managed $XXX or increased those declines year-over-year million beyond X.X%. in by personal Looking commercial and balances, deposits

and balances million focus, of base. Noninterest-bearing $XX increased decline has declining while million linked-quarter, remained our brokered CDs. deposit linked-quarter at million While by as Time our by remaining of said, Duane been cost resilient, managing $X excluding maintaining primary $XXX XX% DDA the deposits strong liquidity. in

X average book weighted $X.X rate paid As time and price billion with months. X.XX% XX, our a of average deposit December about of totaled promotional a weighted and term exception of remaining

of brokered primary XX. that time time totaled The average repricing significant of Our of million downward relatively portfolios in $XXX opportunity book X.XX% for average at X these providing term we're months about of a term short first weighted weighted decline further repricing December rate guidance continued an deposit quarter. driver all-in deposit costs weighted paid remaining for as the a of and represents average is during deposit remaining and the

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

-- maintains stable, base. maintain continues exposure and low to Turning a XX. to granular Slide Trustmark deposit

deposit per an During the an we about $XX,XXX. and fund average quarter, excluding accounts fourth balance about nonpersonal accounts, personal of XXX,XXX public with average account had of collateralized

December and were XX% collateralized, unchanged billion that our capacity, XX%. at linked-quarter of maintained of at mix borrowing and are which $X.X insured XX, our coverage that uncollateralized deposits deposits uninsured We XX% was representing December secured XXX% relatively of of uninsured deposits. substantial were meaning As uncollateralized at XX, stood and

projecting The basis points the anticipation that XX the decreased at reflects X.XX%. Fed's variance guidance cost linked-quarter pricing actions deposit proactive to total of currently in quarter in for strategic during we prior quarter well favorable took cuts quarter rate as XX fourth Our to of Based deposit portfolio, and basis repricing as a in we're deposit about the December. actions the the ongoing linked-quarter November time X.XX%. costs on of first points decline those

for a on As January. month-to-date reference approximately in frame guidance, X.XX% track for deposit of cost that we're of

rate from our revenue the X XX linked-quarter, on by $XXX.X the of decline Turning of us pricing for by liability proactive in actions deposit margin during continued the by quarter, basis points reflect interest we position and FTE driven costs income volume. interest which took rate net -- interest dilution quarter. which offset these Net pricing X.XX%. during from asset points margin results XX. basis of Slide that and XX a million, to totaled resulted increased attention accretion Net deposit first basis volume, points well Again, in

Slide Turning XX. to

forward rate XX which rate swaps in unchanged X.X sensitivity, notional as X.XX% SOFR $XXX portfolio, and a average portfolio coupon. $XX active XX% notional of The and settled and of risk Our balance floors notional mix X%. effect an interest loan million a rate average rate on structured $XXX of active profile to of essentially remained million is with maturity received weighted weighted million the on flow $XXX interest rate $XXX mitigate variable forward December asset including average floors. cash weighted fixed the swaps hedge is notional years, notional million settled The had million active is of of

increase $XX X.X%. XX. $X in $X.X the Slide that full million a million million and fourth point million of year, totaled I'll continuing increase increase a to net or of increase approximately ineffectiveness. effect negative the year-over-year out a operations from for quarter, hedge the adjusted Turning the Noninterest totaled $XXX.X in income $X.X includes linked-quarter about million of million $X.X year-over-year

So effectively, management $X management. to or million Tom million or and or deposit ask charges noninterest I'll wealth banking by And on up cover treasury of corporate expense Chambers service or of capital of accounts $X.X $XX.X now services net $X.X and X.X%, increases income million in driven X%, of mortgage XX%, million. XX%, that, million $X.X was of noninterest

George Chambers

Tom. Thanks

an accruals by increase Slide or XX, salary from of X.X%. expense of to resulting during see by other related valuation increase expense detail in a in a property. estate other and mainly incentive we'll to result third a benefits driven Turning in dollars the million, increase a expense $X.X an noninterest annual as The driven net quarter. $X.X million, of decreased performance quarter total living was established our Total reserve the assisted during by decrease real

For was disciplined a result noninterest of a operations adjusted from the decrease the million or during expense ended $X.X of continuing $XXX.X focused control for which year-over-year year million expense year. XXXX, totaled X.X%,

Turning Trustmark remains a positioned to Slide from capital management. XX, capital well perspective.

of XX.XX%, previously Duane XX.XX%, X basis equity a total end the Tier points our basis solid. and increase risk-based of remained At common mentioned, was XX increase linked-quarter a quarter, linked-quarter of ratios the points. As capital was ratio XX ratio capital

During resumed common activity shares. repurchase or the $X.X share XXX,XXX million approximately quarter, repurchased we and fourth our

organic we deployment our capital for to have a lending. XXXX, $XXX be continues share million repurchase for Although place year-end in on priority currently focused program

continue share. to share, evaluate per indicated dividend regular the indicated, of will announced from Back Duane the an resulting dictate. annual $X.XX of $X.XX per dividend per Trustmark's as capital Duane. and increase to an quarterly repurchase increase in action in $X.XX to As market Board from X.X%. This we you, program to levels the Directors share raises its $X.XX share

Duane Dewey

you, Thank Great. Tom.

Slide Now to XX. turning

year upon which You'll for We notice benchmarks 'XX 'XX. full include new guidance guidance our format is now based. in a our XXXX

the remain for operations expected increase increase for noninterest the expected operations net digits full-year income balances mid-single high to year continue single expected stable range We year. from is adjusted to income during in brokered held to in losses, Securities mid as to mid-single deposits, and to is we Noninterest while credit from will in stable to the flows. the well. provision X.XX% a commitments reinvest investment is full deposits, expect to during increase net interest be 'XX XXXX for also for the expected low while margin remain excluding single X.XX% increase low the expect are in digits for continuing loans digits, including the XXXX. anticipate unfunded We XXXX. to adjusted to we digits relative From cash digits year, of credit interest full to as to continuing increase perspective, single expense

disciplined expansion. activities other As loan already M&A as to We'll our preference deployment repurchase, such as market cetera. approach for noted, with described, we'll 'XX purposes then in continue organic already potential we've and general growth and considering a corporate be capital et

open prepared So that, the our comments, to with floor for that we'd questions. concludes and like

Operator

the [Operator Catherine from And first question come Mealor Instructions] KBW. will with

Catherine Mealor

hear guide. Tom, you wanted a start a all, great just and quarter to the costs It some loan full-year year. the loan of gave, how bit on loan margin betas you and commentary you're about to quarters? going. on First to thinking of where deposit couple end piggyback over are the talk a and And incremental think congrats great pricing to on little Can helpful I the of was next you about pricing

Thomas Owens

Well, and to we'll weigh see if Catherine, I'll Barry in. start, wants

rely sort the the basis half per roughly dynamic, Barry do fixed-rate is other between in the market factors XX on the off floating loans mean that speak, the tailwind, new spread. so going from floating on a as of fixed-rate have differential X March, the know, respect I've rate fixed been commented lift in pricing spread I'll the address are X loans points books in and books. when book Fed well to points loan cuts that let the of implied basis month. the one I of forwards to I've on We books on coming coming June. With based the dynamics, X forecast one can to rate think obviously maturing you getting you I apiece, rate. As said as loans on on then quarters, loans on and the prior we've In of

longer have for the I remained higher is the of interest think some effect here, with rates that diminished. higher

say previously basis maybe points. So said, points, X to X X X basis I've to now whereas I'd

book X, from say, Really book a just by the the And represent you on very will tailwind, Catherine, driver XX, continues point-to-point down end primary of fourth that it through that quarter not The about costs. here it XX a amount. So statistics prepared is We're to by quarter, commentary that idea to the I much. X the modeling the the price third quarter time the reason the is but go end basis, quite basis as of the priced about first an deposit is currently the give deposit on short. points. time in about double down deposit for to

a beyond thoughts really But the any pricing. for in then I'll in on it's repricing that let Barry quarter So of that key NIM because at obviously, guidance weigh continues loan for a quarters with NIM rate, diminishing and the full driver the linked obviously. year

Robert Harvey

a comments, Well, couple of make I'll Tom. just

weighted book standpoint, I average of a book QX rate think about we average were X.XX% versus from interest the X.XX%.

to continue tailwind have, do in on at higher we as rate what's said, than obviously of you So going portfolio. a what's is the currently the

in XXX, lived involved that where settling the down seeing not that a a competitive world the from seems and half it. X-month It needing maybe settled quarter part, got got market XX space, first see that in in XX, little what is the banks plus the understanding still everybody plus get kind a like in X-month the to risk where benefited for levels LIBOR and paid more third some of we've fee have with LIBOR kind rationally most behaving previously from. of be CRE but are at 'XX been point basis And spread, we're We'll the 'XX. back we've XXX is the more little We the to it there. bit and That's for active had looks It is in. of XXX. during

kind that during the see occur we're quarter. fourth of pleased So to transition very

Catherine Mealor

volume, in Okay. is And feels industry of single expected? maybe seeing growth, impact the just may volume digit that that, at low paydowns? about curious than not include single-digit pace better your the are on year. little still we but faster outlook low a Great. And guidance, the you pick everyone feeling better still loan have growth does for about origination like it bit of this up origination Or kind a loan

Robert Harvey

Catherine, going it's go but to kind because hopefully, I cover I'm of we sure succinctly, And important. it make Sure. through this want to

As guiding growth. single-digit you said, loan low we are for XXXX, to

CRE actually, going years. the and the strong in of like -- clearly are CRE all and extension of QX with did activity strong But options experienced X that 'XX That which 'XX, very, and 'XX. 'XX, fully is a nice going this we can't that. year. everybody were to during that's some with remember, than forward. very from of do. looks in is in pleased very for in underwritten are X-year QX in first therefore, pickup not production is going there production project that We what 'XX, mini less And seeing our we During and see or origination. be We're construction firm half CRE the at products, 'XX, of time 'XX the was Remember, maturities the to trend customer 'XX

choose. so known the if extra performance hurdles, then to year that avail and that can they're they extra terms, assuming certain the themselves pricing, meeting year of is all second they everything So And customer.

maturities. significant number that see extension going we of in did were XXXX in being options exercised Catherine, QX the in to quarter, be So the a increase fourth

very it those X to settling our move they they're not with do going All they're find they'll rates. any won't. X-year much We're on like have fourth certainty strong. the assumption in we've maturities continue an to to allow mean about continue think we optimistic interest 'XX, want they it That you they're the Now $XX commercial, case, books, peers, corporate, extension it our up don't to heavier And that, we going don't but and 'XX, decide know decide CRE to as terms doesn't extensions. be we're about to And the obviously, customers from or may. The when with our additional of average maturities whether XXXX, pipelines for it we or needle making and the strong may will how in production that fact that there. to mentioned, going And that's to see duration, take more follow-through to in and to it going year quickly. to you're or projects of throughout guidance X see X-year that our options, stay I moves know if our look very 'XX happy they're they going underwritten $XX us. production production CRE the I very like on permanent is quarter million in when very the be can rate are 'XX of but will that or say cap you million We'd down have sell market not they're well but the talking where because extremely know already beginning we those then in front could in of XXXX, periods. us strong environment leave us that 'XX. XXXX, whether around, the

see follow-through we starting what the we're that, know will be. so but And to don't

Duane Dewey

too. to I'd add Catherine, just quickly like real

that, in 'XX have side. which we're respective and on quarter, solid in will increasing. categories. hadn't XXXX optimism to funded hear continue production C&I, begin fund out market very some positive yet, to market, banking, We which very teams opportunity are commercial pipelines finance production is fourth which our as had that the other hearing from their there the middle corporate middle of basic equipment corporate, with some as new well We there, the a we

in that we're see then come can in where the the it be comes range. as CRE still that XXXX category. play overall, the to of little It to single-digit positive. at a can end a low that's happen So we the payoff we -- bit want on bit, of But the headwind but front, still optimistic. day, And into Barry the a a guide described from

Operator

next will question Janney. Marinac Christopher with come The from

Christopher Marinac

And I to is rate near through kind wanted do And you to tolerance ask think have there run? not growth? but loss little to of the a about that, your how thoughts over get about charge-offs. any term, more higher bit just net intermediate

Robert Harvey

much risk-taking of that line this banks is in and say Barry. larger in with the number that from regional peers of And from a I banks. we know standpoint even Christopher, just our of we're would we're with lot some deals other a very credit the

from little sure do to all I so possibly is be we're criticized credit resulting from forward it's a credits, careful, deals in think could opportunities might perspective. and very classified, up coming more that And charge-offs that it function maintaining and the at the additional passing of than rating quality of standpoint aggressive we're think want or and they on high in make terms end we more that times. risk-taking, might we we're do necessarily of whether a the very our I

previously. somewhat I will it's think that that today and C&I with drop the are basis look although we've they than of more more the say a front, higher lot opportunities a the down function the on points market slowing to the improving I rates experienced, deals did And providing both CRE of more think CRE I deals. pencil XXX and at

next see the as needing a can forward in projects the That's But and the into we're a funds it's for not one you got being returns, equity, in risk-free of see perspective the about the go then on order of a were risk-free there's move I when you are you kind into coming money talk and they've option many beginning developers project. to until the of that when had is in available the no they put to availability X% they to on So terms interested that's so equity in move improve. deals, of function CRE funds today books return. think plowing the from what and the as

that's seeming all think have allows as and an now, decisioning out projects, settle forward. I into any which think to that of move the credits coming fund deals. we're Now more there's at, our back the we money I competitors. aggressive to in standpoint of from the developments for these But opportunity to They're these look as

jointly we're the underwriting. determining So

I So we're that feel sync very confident in are others what with doing.

Christopher Marinac

any of realize the deposit organization. are just And just the sort how Great. customers thinking new Do we just of changes the new right. mean quarter-to-quarter, from Trustmark balance flow on on out net to customers new sort but I color accounts expenses. the or side? just added have and follow-up then and accounts of about loud All you deposit observations just one

Thomas Owens

I'll Tom is start. the confused this connecting question, A Chris, little between expenses. So Owens. dots by the

and very time it 'XX, I'll of I talk we look think to then activity, a you operating we've at a very been start in look increases right, accounts. new always function and much when as in accounts. at -- there's to that deposits. would churn, 'XX with about relates respect And attrition in you I account and accounts of the accounts, number when regard. deposit asking natural especially say openings. with accounts, were there's the addressing versus the deposit steady been -- you promotional headline When about

talked push managing about terms decline on at to commentary between position cost the say and outstanding accounts. or and Because to consistent do growth. loan deposit our have I off of in in yes. forward growth of would and been much XXXX, answer in in a the accounts just accounts balancing those of put prepared focused we the is sort the competitive side growing rate, you you're So But relationship in number to we growth continue and as very talking when we've about

Duane Dewey

another And Chris, question? question? part first the part we that did of there miss the Was of

Christopher Marinac

actually that account opening it's No, Dewey, Tom really described.

that. on good I'm So

was Sorry expense, point. mentioned it if I not my

Operator

The with Gary Davidson. Tenner D.A. next come from will question

Gary Tenner

appreciate curious traction and quarter. I was growth. the on C&I in the the XXXX takes fourth about color loan I the for puts

I have follow-through there terms there? think kind had maybe maybe there of year-end was end reverses seasonality increased balances strengthened quarter? the in you purely Is in Or indicated optimism, period pipelines is the that of post-election, the in and lines on up. that past maybe the that any drawdown first

Robert Harvey

Barry. Hey Gary, this is

in think QX. a quarter, saw during a of XXXX, I that funded in new In some XXXX. and That to of we quarter in little we had range. what fourth utilization. going And shrinkage have been line We moved typically an QX, the definitely there follow-through move to increase fourth We In then XX% occur that's bookings had we during our -- up down we to the that XX%. XX%. you was is was did some combination. had bit of new opportunities, also part

are actually quarter. fourth to utilization. and -- XX% continue So the of we production have and we good obviously I think there's some was approved during that opportunities back to And in line terms did beyond move funded to

experience that I expect individuals trend with that newer We in very, continue mean long our active We've lending. to some of a have bank calls. type producers. to got the C&I they're who out very making

see them from We production expect long-term some to well as associates. coming our as additional

Duane Dewey

a just I'll in chime And bit.

see And and now to franchise, feel of we're think churn let's institutional more team and some XXXX, banking the was and structure some made into we've retail years, we've process, a, place. will you and 'XX in about going in there the I our about good to produce. businesses. the change franchise, of was And that the adjustment. through recall, couple and throughout grow form commercial starting fit we our last talked particularly in As adjustments over but also

are As C&I very in And focused the into restructuring through Barry probably banking, from days, we've they noted, last as banking that complementary new stuff commercial corporate personnel equipment production. XX production we noted, spans added that all finance on the did. to XX-plus

we're C&I our improved performance expecting categories see to of all continue our of of in out So many to markets.

So mixed that's in also. kind of there

Gary Tenner

the quick repurchase. on question know your stock I just prepared And a bit appreciate there. remarks. the you in then color I about a it talked

loan loan there? and seem a pretty sheet But to the I of price, or the Given outlook moderate depending the growth good balance anything restrictions course. don't growth and be any am buyback return to profile, missing continuing for there overall on looming growth

Duane Dewey

there. the Board, might than you $XXX that that's have. the considerations have side we a I lot then year. One, you operating of know, that will, we growth move happening equation from happening on Other as any as million in the as considerations But or might mean, what's authorization the M&A described we well a into of you the as that's the other as function different if of restriction, what's

there's So into a use so. play is meet analyze capital, regularly and to and alternatives, different way that. consider of that factors those lot We that best the of and one

Thomas Owens

would just add. is Owens. Yes. would just And I This add. I Tom

is ratio risk-based Our accreted nicely. pretty capital

to even repurchase. to from there's, it there's opportunity an robust the as up likelihood, about And just so. continue perspective. quarter, at share imagine we return to fourth the about without capital do view And look to loan opportunity you growth, can't basis going with in via or again, a or all program, XX.X%. attractive you more -- the be be I up deploy XX% get XX so and During repurchase just about -- points CETX at

activity. diligent by a which framework, have share repurchase diligent pretty we process We evaluate

So will activity. I that of continuation a imagine would the see you

Operator

Raymond The will next Eric come with question James. Spector from

Eric Spector

your I'm investments but you're on? guide. Obviously, Maybe just normal growth curious you've touching of from embedded on what kind expense expense investments guide. curious the some in expense there's got just just some natural that of your focused inflation,

Duane Dewey

Well, it's a technology be core board here XXXX. across number conversion terms in one the throughout includes which focus initiatives the the organization, of of the investment, company that will of across for different a

very true there's and board. so technology front, true in the to look When all customers to significant continued the continue increase expense serve invest out think, you step personnel a different salaries guide, on at We digital the care on there. and industry in to the are health and XXXX and to significant I that pressure, benefits, categories back costs across

a they'll are know, Tom Those the ones be just I Tom, to to XXXX. to that have pressures for that So number add anything are or mind. impacting there of that? would if different don't expenses come

Thomas Owens

invest organically probably infrastructure continue ensure add risk through place acquisition. to as and right grow we both in have in to potentially as infrastructure, to well us I'd to the continuing our allow framework risk that

Duane Dewey

across growth, of I commented then for to the And on our did in a equation. of of production as those production. and new of well, all categories leave staff, different prior focused and We're potential the I different our course, lot out, as add already on markets adding categories all to comments, gently those

Eric Spector

just on maybe then deposits. touching And

job great a reducing done You've costs.

that curious has the Just any if DDD, curious XXXX? deposit migration noninterest-bearing and was how reception the been? quarter touch on and the brokered how of into versus most some this accounts of is could of runoff. just outlook dynamics from the seasonal client DDA pushback attrition going broadly seen know Whether just growth that? runoff or and But for you've much you I intentional from trends

Thomas Owens

declines the in very base managed just of you where brokered of those the that public actions. prepared So is fund that third balances deposit not public I in noticeable as CDs of the get a a There's there's date Owens. in very bid deposit with mean, basis. I And to we the on really been remarks, fourth again, accounts attrition reaction been portion pleased actions increase the Thomas say certain to this and competitive pricing that a we took if in said pricing result would we've past and as the actions, a is quarter. fund the

we're again, liquidity And maintain so in to in terms trying our strong of loan-to-deposit ratio. mid-XXs the

year And in so so some X% off XXXX. backed really situations. you and over of But -- the full personal more bid grew we're that for competitive leaves with we're that deposits, -- the core just the on non-personal,

and and interesting deck Slide what competitive about our posture given continue really growth at good on effectively. cost about we balance managed and spread sheet we ability here slowly XX feel feel we've to cost. cost based the rationalizing when of deposit to really It's look look the look our you good seen that spread quarter. widen between you the during KRX at we've deposit to that our and costs, on so would like during the widen our but what And earnings speculate fund we surely fourth I median way season the probably And again focus that, really,

the this base, our to value for expect that environment continue terms in think to right here ourselves XXXX. I So us opportunity been deposit of and of has distinguish an we in now

Eric Spector

step And then me, then question back. I'll for last maybe one and

a like in question was of modestly ticked still looked It credit. MPAs benign. higher, Mississippi. relatively kind Just on that particularly

more you Just And than curious broadly and any if about anywhere whether how watching there's credit closely seeing others? migration? you're think you're

Robert Harvey

from is ways is weakness. But of sure all increase the weighed how with the the and of other. would annual were more CRE got. any than they focused us and through they're weighed obviously see process. on encourage not a what point on But projects process along signs basis lease-up XXX that our Eric, the credits Obviously, very very, And obviously given it that Barry. credit really showing maturing there's one credits of We're Fed, XXX like very with might all say we're our focused robust CRE is forma that -- increase day the that. with back the it they've a and how and of to banks, day review this that and category on a for go pro did making different we're on -- some we've I in triggers it in number size which of the maybe on monitoring dig all to into out

us we that into credits done and adjusting job grades we move do I I reflective based upon criticized XXXX than we've that in downgrading think very Now we've front everything going aggressive good upgrading therefore, to classified being be as got going more feel do of we and of as in we're in a point. like know and needed at levels. in this our timely as

So basis points as comfortable at. pass where in originally look a an these that. the and pro months well non-pass a X additional I helps way getting think a that that to need struggling And from going time cycle of have to these are to of level category. are do this months helps to projects should XXX they just because that the forma feel But cycle is that most back behind, to rents terms and very X I it or to getting occupancy at X they get been X were or underwritten they're another credits

and like every we encouraged So we monitoring am to we everything turn see downgrades day, that begin cycle the as while and are said, see, and should up, we more upgrades carefully I very watching will move we'll it as I forward. back

Operator

will question Sandler. Gorczyca Piper with come from next The Andrew

Andrew Gorczyca

follow-up potential A expansion. growth at lot to maybe been what and prepared of regions And questions In the to top just being just hop point, in market by capital most you then a lending my but opportunities organic of have just present priority the attractive answered wondering priorities. XXXX. wanted touched kind back followed to this the remarks, that, on

Duane Dewey

use is way capital. growth loan the cost-effective organic certainly foremost, most to and first So

team some some And we fact staff. another that a had through I've very now several equipment and the of to then so with at years we franchise already a which restructuring success into finance that footprint, that limited the and We've the fairly on of further, South look commented in adding commented team, we're is core to we Atlanta, a production staff process, on. the Atlanta focus, attractive we production been and into Birmingham, through so of So specifically, the for our existing significant all and step us. and finance Equipment be have up markets now continues Texas, on you Baldwin a that in had area. of Mobile, is I production loan in area lot over continued solid in very opportunity expand of had our in add Then plenty our Alabama, if opened area. production the have opportunity Birmingham to County markets, office market. to Houston, ago. In And production back on. a offerings around Tennessee, where we've

all would already the for are and where XXXX, things to however, be board. we on those drawing production that So existing markets most expanding The would adding serve. staff be likely

Operator

will come from Bishop with question next David The Hovde Group.

Unknown Analyst

for on Dave. John is This

if margin share X hedging your if another to X to the start on how I year, quantify. wanted was So should that moving event particularly the cuts thoughts get, just that's the quickly hedge on the we say, in just forward, front. wondering possible impact strategy to this you could

Thomas Owens

Well, net in hedge of designed it's mitigate to cash with absolutely flow possible some income to portfolio to Owens. interest Again, quantify. rates. that This the Tom is is changes interest the volatility comes

As is we rate. prepared in our XX% portfolio said comments, the of floating

So we've a taken portion.

think via swaps, rate it in swapped round of off taken $XXX billion, $XX John, $X.X floors. rate we something to have the and loans. floating numbers, $X.X roughly interest is the So million notional way that's loans, million we've them floating of effectively $XXX billion like rate of that, million Essentially, notional,

about way correct think it. to the that's So

of benefit itself, in would by $X.X cuts, flow $XXX equal relative X point of for March, terms current we I half second million cash impact do things simple get math mean, had rate the let's rate we June, so our one would hedge income. say, is In the shock, of And by one $X.XX all fixed net XXXX, portfolio loans right? portfolio interest in other having in XXX the million, benefit from in to then million basis place run you of the

Unknown Analyst

event all the time deposits in and guess June. to cut thus the could in forecasted XQ a how January. And deposit I trended front. not beta cut I in we far a lower deposit or have how and the beat much the curious in a here that costs see color just appreciate pivoting reprice we see don't guess just as on I'm dead Very on XQ horse in I March and to helpful.

Thomas Owens

in forwards first we in non-maturity very reduction based our in our margin, very a guide much it's you, cuts prepared the interest point Well, of have would associated for repricing do XX commentary, my the point, of is little and question. deposit quarter guide as time a little said with have good of for forecast function tell the earlier market-implied terms I said, as for I And deposit And year I very this the for those. we interest-bearing of deposit priced. book. in cost the And ongoing terms net At June. in March have costs on basis our we

costs on target, the let's in just the And so a cost a in X.XX% okay, Fed fourth so of in I the take of then we're market you funds And at that fourth to it's guiding mean deposit of we the of And would is if a peak beta. for year. an think denominator, round where that the this first implied about in cost today, this about deposit XXX said, our probably numerator. represent printed you of deposit or beta, so fourth year, by quarter -- XX%, at take X.X% on to represent full quarter get you modeling XX%. the from and took the speak, I terms that give you in you in so way what X.XX% for quarter. of decline numbers. to XXX. down this point 'XX, in X% quarter thinking, based went in would Fed about right? are numerator, if quarter beta point then say should took to, the We're call XXX And my that idea funds the of say, if a forwards guide to conservative would for I'll drop it, So

and full driving terms the guidance our what's for this we margin of net modeled, point in have that's year. interest at what So currently that's

Operator

remarks. like go concludes Please turn the question-and-answer to session. Mr. Dewey would closing Duane ahead. conference for to This over our any I back

Duane Dewey

great positive feel of look we'll to and morning, forward quarter at rest of forward you we look Have back the here call end fourth reconvening the we forward. the we and this like the mentioned, XXXX a to Trustmark joining and for --moving were As appreciate And XXXX very years April. coming week.

Operator

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

may You disconnect. now

Trustmark (TRMK) 29 Jan 252024 Q4 Earnings call transcript