TC
TRUSTMARK CORP (TRMK)·Q4 2024 Earnings Summary
Executive Summary
- Q4 2024 delivered solid linked-quarter improvement: diluted EPS $0.92 (+9.5% q/q), total revenue $196.8M (+2.4% q/q), and net interest margin 3.76% (+7 bps q/q) as deposit costs fell and fee income rose .
- Credit remained well-behaved: net charge-offs were $4.6M (0.14% of avg loans) and ACL was 1.22% of LHFI; NPAs rose modestly q/q but declined y/y; CET1 rose to 11.54% .
- Board raised the quarterly dividend to $0.24 (+4.3%) and resumed buybacks ($7.5M in Q4; $100M authorization for 2025), supported by enhanced profitability and capital accretion .
- 2025 guidance: NIM 3.75–3.85%, NII mid-to-high single-digit growth, loans and core deposits (ex-brokered) low-single-digit growth, PCL stable; mid-single-digit growth in both adjusted noninterest income and adjusted noninterest expense .
- Stock catalysts: continued deposit cost repricing, NIM trajectory, capital deployment (buybacks/dividend), and disciplined CRE credit management; management emphasized a “transformational year” positioning the bank for 2025 and beyond .
What Went Well and What Went Wrong
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What Went Well
- “2024 was a transformational year… actions… significantly enhanced financial performance and Trustmark’s forward earnings profile” (CEO) .
- Margin and profitability improved: NIM 3.76% (+7 bps q/q), efficiency ratio 61.77% (better than Q4’23), and ROA/ROTCE rose to 1.23%/13.68% .
- Fee momentum: noninterest income rose to $41.0M (+9% q/q), with mortgage banking up on lower negative hedge ineffectiveness and steady wealth management .
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What Went Wrong
- NPAs ticked up q/q to $86.0M, driven largely by Mississippi; though still down y/y; nonaccruals +$6.3M q/q .
- Noninterest expense increased $1.2M (+0.9% q/q) on higher year-end incentives, offset by lower other real estate expense .
- Deposits declined 0.9% q/q and 3.0% y/y due to intentional public and brokered runoff; noninterest-bearing deposits slipped q/q (still ~20%) .
Financial Results
- Core P&L and margin trajectory
Note: Q2 2024 GAAP noninterest income included the securities portfolio restructuring loss; adjusted revenue better reflects underlying trends .
- Noninterest income components
- Balance sheet and credit KPIs
Guidance Changes
Earnings Call Themes & Trends
Management Commentary
- CEO: “2024 was a transformational year… These actions… have significantly enhanced financial performance and Trustmark’s forward earnings profile… capital levels rose meaningfully, which led to the Board’s decision to increase the quarterly cash dividend along with our renewed activity in the share repurchase program” .
- CFO on deposits: “Our cost of interest-bearing deposits decreased by 30 basis points… promotional and exception price time deposits… short weighted average remaining term… significant opportunity for continued downward repricing… projecting linked-quarter decline in deposit costs… to about 1.84%” .
- CFO on hedges: “$850M of fixed-rate swaps… a 100 bps shock would benefit NII by ~$8.5M; with two 25 bp cuts, ~$4.25M in 2H 2025” .
- Credit: “While both nonaccruals and nonperforming assets increased slightly during the quarter, they have declined meaningfully year-over-year… we expect more upgrades than downgrades as we move into 2025” .
Q&A Highlights
- Deposit costs and NIM: Deposit repricing is the “primary driver” of NIM guidance, with short-duration CDs enabling faster cost declines; limited sensitivity assumed on non-maturity deposits .
- Loan growth: Guiding to low single-digit 2025 growth; pipelines improving across CRE, C&I, and equipment finance; increased utilization and extension options are supportive .
- Buybacks: Capital ratios accreted; with CET1 ~11.54%, management sees continued opportunity to deploy capital via repurchases under the $100M authorization, subject to growth/M&A .
- Expenses: 2025 expense guide includes core conversion, digital spend, risk infrastructure, and new production staff; acknowledges healthcare cost pressures .
- Credit tone: CRE stress is moderating with rate cuts; proactive grading/reserving maintained; Mississippi drove a portion of q/q nonaccrual increase .
Estimates Context
- S&P Global consensus estimates for Q4 2024 EPS and revenue were unavailable via our data pull at time of writing; consequently, a beat/miss assessment versus Street consensus cannot be determined. The company reported diluted EPS of $0.92 and total GAAP revenue of $196.8M for Q4 2024 .
- Where estimates may adjust: Management’s FY 2025 NIM (3.75–3.85%) and NII growth (mid-to-high single digits) combined with deposit cost tailwinds suggest potential upward revisions to net interest income and margin forecasts if deposit cost declines materialize faster than modeled .
Key Takeaways for Investors
- Margin tailwinds are credible: short-tenor time deposits are repricing down, pressuring deposit costs lower and supporting NIM within a higher guided range for FY 2025 .
- Fee income breadth: mortgage banking and wealth management momentum alongside stable service charges underpin revenue diversification beyond NII .
- Credit normalization continues: modest q/q uptick in NPAs, but y/y improvement and robust ACL coverage; management expects more upgrades than downgrades in 2025 .
- Capital optionality: rising CET1 and tangible equity support an active $100M buyback program and higher dividend, with organic lending the primary capital use .
- 2025 playbook: low single-digit loan and core deposit growth, mid-to-high single-digit NII growth, and disciplined expense investments (core conversion, digital, risk) set the stage for sustainable ROA/ROTCE .
- Trading lens: Watch quarterly deposit cost prints and NIM progression, buyback cadence, and CRE credit metrics—each a potential narrative driver for the shares .
Additional Data References
- Q4 2024 press release with full tables and notes .
- Q4 2024 Form 8-K with exhibits, financials, and detailed notes .
- Q4 2024 earnings call transcript (prepared remarks and Q&A) .
- Prior quarter transcripts for trend triangulation: Q3 2024 and Q2 2024 .