Trustmark Corporation (TRMK)

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Trustmark Corporation (TRMK)

Q4 2009 Earnings Call

January 27, 2009 11:00 a.m. ET


Richard Hickson – Chairman & Chief Executive Officer

Buddy Wood – Chief Risk Officer

Barry Harvey – Senior Vice President, Chief Credit Administrator

Bob Hardison – Chief Commercial Credit Officer

Louis Greer – Chief Financial Officer

Joey Rein – Director of Investor Relations


Kevin Fitzsimmons – Sandler O'Neill & Partners

Steven Alexopoulos – JP Morgan

Jennifer Demba – Suntrust Robinson Humphrey

Adam Barkstrom – Sterne, Agee & Leach

Michael Rose – Raymond James

Andy Stapp – B. Riley & Company

Jeff Davis – FTN Equity Capital Markets

Brian Klock – Keefe, Bruyette & Woods

Albert Savastano – Fox-Pitt Kelton



Good morning ladies and gentlemen and welcome to the Trustmark Corporation's Fourth Quarter Earnings conference call. At this time, all participants are in listen-only mode. Following the presentation this morning there will be a question-and-answer session. (Operator Instructions) It is now my pleasure to introduce Joey Rein, Director of Investor Relations at Trustmark.

Joey Rein

Good morning. I would like to remind everyone that a copy of our fourth quarter earnings release as well as supporting financial information is available on the Investor Relations section of our website at

During the course of our call this morning, we may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We would like to caution you that these forward-looking statements may differ materially from actual results due to a number of risks and uncertainties, which are outlined in our earnings release and our other filings with the Securities and Exchange Commission.

At this time, I'd like to introduce Richard Hickson, Chairman and CEO of Trustmark.

Richard Hickson

Good morning. Thank you joining us this morning. We look forward to chatting you this morning on what we consider a very good quarter for Trustmark. Net income available to common shareholders totaled $13.9 million for the quarter and $73 million for the year. As we discussed this out joined by Gary Host, our Chief Operating Officer, Louis Greer, our Chief Financial Officer and other executives involved with credit and other risk in the company.

Earnings per share of $0.23 for the quarter, there was an earning in the fourth quarter included a one time non-cash charge of $8.2 million or $0.14 a share for the accelerated accretion of discount associated with the full redemption of the $215 million preferred stock from the U.S. Treasury. Performance reflects solid net interest income with an expanded net interest margin. Reduced operating expenses and increased tangible common equity, pretax pre provision earnings were approximately $53 million. Very consistent, very profitable and predictable, there were know core extraordinary items for the quarter.

Before we go into credit quality today, I’d like to take a moment and reflect on 2009 as we completed our assessment of what we accomplished during the year. When you look at the year overall net income to common shareholders of $73 was down from the $91 million of 2008. Our net income for preferred dividend was actually up a million dollars at 93 versus 92 in the pretax pre provision net income was $214 million versus $212 million.

When you look at the pretax pre provision income I think I just point out to you that 2009 was a very core year for Trustmark, where 2008 had a due extraordinary items when we compare to year-over-year we earned the 214 even when our FDIC premium was $16 million this year compare to $3.5 million a year before, our real estate foreclosure expense was pertain this year compare to 2.5 a year before, the year and half before we had approximately $6.5 million pre tax from selling our visa and master cards stock and in 2008 the year before we had an $11millon pre tax gain in our invest or hedging. That really reinforces how good 2009 was, when you take a little that our margin result well over $30 million and we do an exceptional job and gain our mortgage loan sales this year.

Looking at some of our operating land the major for management across truss more was a reduced exposure to contraction and land development lending eliminated the related concentration but prove actively managing our portfolio and enhancing under writing.

Total CRE is no longer any type of concentration compare to total risk capital – total risk by capital is a low over $970 million. Total construction being at $827 million, non-owner occupied commercial real estate is around $820 million to the two together allow over a 1.6 compared to our $970 and total risk base push us in a very strong position. Real estate lending kicks off again with the quality margins and good income producing properties and good loans Trustmark will be in a very strong position to do that.

We also implemented the ARGO system across all of our branches with our new sales and service and teller system. It is a big positive for us, the (inaudible) we have gone from 20 minutes of opening an account down to five minutes and 20 minutes was (inaudible) it should make a significant difference over the next few years with our cross sale. We conducted very targeted and very significant business development programs from key customers and prospects we have grown our markets throughout the year and we maintain a very dominant deposit market share in our legacy markets.

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