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Trustmark profits rise with help from better credit quality, more loans, merger gains

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JACKSON, Mississippi — Regional bank Trustmark Corp. says profit in 2013's fourth quarter rose 17 percent from the same three months of 2013, aided by gains from an earlier merger.

Trustmark posted quarterly profit Tuesday of $29 million, or 43 cents per share. That compares to $24.9 million, or 38 cents per share, in 2013's first quarter.

Analysts polled by FactSet had estimated 42 cents per share, on average.

The bank released about $800,000 from bad loan reserves, aiding profit, and it recovered more from bad loans than it charged off.

Trustmark says loans increased by $125 million over the last three months. Mississippi, Alabama and Florida saw growth, while loans fell in Texas and Tennessee.

BancTrust Financial Group, of Mobile, Alabama, merged into Trustmark on Feb. 15, 2013.

Return on average assets, a key measure of bank profitability, was 0.99 percent in the first quarter, above 0.93 percent in the same three months of 2013. That's above the national average of 0.96 percent that all banks nationwide achieved in the three months ended Dec. 31, according to Federal Deposit Insurance Corp. statistics, but below levels Trustmark recorded in some previous quarters.

The amount that the company collected in interest from borrowers, net of what it paid out to savers, fell to $99 million, as the company recovered less from bad loans. The net interest margin, a measure of that spread divided by all loans, fell to 3.92 percent in 2014's first quarter, down from 3.98 percent in 2013's first quarter. That spread is traditionally a basic ingredient of bank profits. The company said that its net interest margin on loans it originated, versus those it acquired in the merger, widened.

Noninterest income was stable year-over-year, as gains from bank card fees, wealth management and insurance commissions offset a sharp drop in mortgage fees.

Jackson-based Trustmark has $12.1 billion in assets with offices in Mississippi, Alabama, Florida, Tennessee and Texas.

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