Trustmark Corp (TRMK, Financial) announced its third-quarter 2023 financial results on October 24, 2023. The company reported a net income of $34.0 million, representing diluted earnings per share of $0.56. This figure includes a litigation settlement expense of $6.5 million, which reduced net income by $4.9 million, or $0.08 per diluted share. Excluding this expense, Trustmark's third quarter net income totaled $38.9 million, or $0.64 per diluted share.
Financial Performance
Trustmark's financial performance during the third quarter reflected continued loan and deposit growth, stable net interest income, strong performance in the insurance business, and solid credit quality. During the first nine months of 2023, Trustmark's net income totaled $129.4 million, which represented diluted earnings per share of $2.11, an increase of 22.7% from the same period in 2022.
Balance Sheet Management
Loans HFI totaled $12.8 billion, up 1.6% from the prior quarter and 10.6% year-over-year. Deposits totaled $15.1 billion, up 1.3% from the prior quarter and 4.7% year-over-year. Trustmark maintained a strong capital position with a CET1 ratio of 9.89% and a total risk-based capital ratio of 12.11%.
Credit Quality
Net charge-offs totaled $3.6 million in the third quarter, representing 0.11% of average loans. Provision for credit losses for loans HFI was $8.3 million for the third quarter. Allowance for credit losses (ACL) represented 1.05% of loans HFI and 273.60% of nonaccrual loans, excluding individually evaluated loans at September 30, 2023.
Revenue Generation
Revenue totaled $190.9 million, down 1.3% linked-quarter. Net interest income (FTE) totaled $141.9 million in the third quarter, down 0.9% from the prior quarter. Noninterest income totaled $52.2 million, representing 27.4% of total revenue in the third quarter.
Noninterest Expense
Total noninterest expense in the third quarter was $140.9 million; excluding litigation settlement expense of $6.5 million, noninterest expense was $134.4 million, up $2.2 million, or 1.7%, from the prior quarter.
Future Outlook
Trustmark's CEO, Duane A. Dewey, stated that the company is well-positioned to respond to changing economic conditions and create long-term value for its shareholders. The company continues to implement significant cost savings initiatives to improve efficiency as well as technology to enhance its ability to grow and serve customers.
