Trustmark (TRMK) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $51.3 million ($0.84 EPS), up from $34.0 million ($0.56 EPS) in Q3 2023 and $40.5 million in Q2 2024, reflecting a 26.7% linked-quarter increase and 51% year-over-year growth.

• Tangible book value per share rose to $26.88, up 6.5% sequentially and 32.9% year-over-year.

• Profitability improved with a 282 bps efficiency ratio improvement and a 9.5% increase in net interest income, driven by securities portfolio restructuring.

• Return on average tangible equity was 12.86% and return on average assets was 1.10%.

• Board declared a $0.23 per share dividend, payable December 15, 2024.

Financial highlights

• Net interest income (FTE) for Q3 2024 was $158.0 million, up $13.7 million (9.5%) linked-quarter and 11.6% year-over-year; net interest margin increased 31 bps to 3.69%.

• Noninterest income from adjusted continuing operations was $37.6 million, down $0.7 million sequentially but up $0.6 million year-over-year.

• Noninterest expense for Q3 2024 was $123.3 million, up $4.9 million sequentially due to salary increases and OREO reserve, but down 5.4% year-over-year.

• Loans held for investment were $13.1 billion, relatively flat sequentially, up 1.2% from year-end and 2.3% year-over-year.

• Deposits totaled $15.2 billion, down $222 million sequentially due to targeted runoff, but up $139 million year-over-year.

Outlook and guidance

• Loans held for investment expected to grow low single digits for full-year 2024; deposits (excluding brokered) to remain stable.

• Net interest income projected to increase mid-single digits in 2024, with full-year net interest margin around 3.50% and H2 2024 margin of 3.65%-3.70%.

• Noninterest income from adjusted continuing operations expected to rise low to mid-single digits; noninterest expense to remain approximately unchanged for 2024.

• Management expects continued focus on organic loan growth, market expansion, disciplined capital deployment, and technology investments.

• Economic uncertainty, interest rate volatility, and regulatory changes are expected to impact near-term results.