Trustmark Corporation (NASDAQ:TRMK) has announced its financial results for the fourth quarter, revealing a net income of $36.1 million and diluted earnings per share of $0.59. The company's performance for the full year of 2023 was also robust, with a net income of $165.5 million, translating to $2.70 per diluted share.
Despite a seasonal dip in non-interest income during the fourth quarter, Trustmark experienced overall growth in loans and deposits, as well as a solid credit quality and strong capital levels.
Key Takeaways
- Trustmark Corporation reported a net income of $36.1 million for the fourth quarter, with diluted earnings per share of $0.59.
- Full-year net income reached $165.5 million, or $2.70 per diluted share.
- Loans and deposits both showed growth, with loans increasing by 6.1% year-over-year and deposits by 7.8%.
- Net interest income for the fourth quarter was $140 million, and the net interest margin stood at 3.25%.
- Non-interest income for the fourth quarter rose by 10.3% year-over-year, even though it faced a seasonal decline.
- The company maintains strong capital ratios, with a common equity Tier 1 ratio of 10.04%.
- A quarterly cash dividend of $0.23 per share will be paid on March 15.
- Trustmark expects loan growth in the mid-single digits and deposit growth in the low to mid-single digits for 2024.
Company Outlook
- Trustmark anticipates mid-single digit loan growth and low to mid-single digit deposit growth in 2024.
- Securities balances are expected to decrease by high-single digits.
- The company plans to focus on organic lending for capital deployment.
- Net interest income is expected to decline, but non-interest income should see moderate growth.
- Trustmark is prepared to adjust to potential Federal Reserve rate cuts and changes in the deposit market.
Bearish Highlights
- Mortgage banking revenue declined due to negative net hedge effectiveness and a decrease in gain on sale of loans.
- Mortgage loan production also decreased.
- The company expects a decline in net interest income in the first quarter but anticipates stabilization later in the year.
Bullish Highlights
- The provision for credit losses was $7.6 million for the fourth quarter, reflecting solid credit quality.
- Trustmark has authorized a stock repurchase program, indicating confidence in its financial position.
- The company expects to be able to react and reprice its deposit book to mitigate any impact from easing rates.
Misses
- Non-interest income decreased in the fourth quarter due to a seasonal decline in insurance commissions.
Q&A Highlights
- Trustmark's guidance for net interest income and margin aligns with analyst estimates from 90 days ago.
- The company expects a 20% beta in deposit repricing and a 30 basis point decline in deposit costs from Q1 to Q4.
- Around $600 million of fixed-rate loans are set to reprice in the next 12 months at an average rate of 5.14%.
- Public deposits are estimated to be between $500 million and $1 billion, and more details on corporate deposits will be provided later.
- Trustmark is evaluating potential bond and securities portfolio restructures but has no immediate plans for an insurance sale.
Trustmark Corporation's earnings call highlighted a stable fourth quarter with positive growth in loans and deposits, despite challenges in non-interest income and mortgage banking. The company remains confident in its financial strategy and capital ratios, as well as its ability to adapt to market changes. Trustmark's outlook for 2024 suggests a cautious but steady approach to growth, with a focus on organic lending and capital management. Investors can expect a dividend payout in mid-March and can look forward to more detailed updates in the next earnings call at the end of the first quarter.
InvestingPro Insights
Trustmark Corporation (TRMK) has shown resilience and adaptability in its financial strategy, as evidenced by the latest earnings report. Here are some key InvestingPro Insights that may interest investors:
InvestingPro Data shows a solid Market Cap of $1,680M USD and a P/E Ratio of 17.53, which adjusts to a more enticing 8.87 when considering the last twelve months as of Q3 2023. This demonstrates that the company is trading at a lower multiple of its recent earnings, potentially indicating a value opportunity. Additionally, Trustmark's Revenue Growth over the same period was a robust 13.43%, showing the company's ability to increase its income in a challenging environment.
From an investor's perspective, Trustmark's consistent dividend payments for 51 consecutive years, as highlighted in one of the InvestingPro Tips, is a testament to the company's commitment to returning value to shareholders. This, coupled with a 3.29% Dividend Yield as of the last recorded date, makes Trustmark an attractive option for income-focused investors.
Moreover, Trustmark's strong performance over the last three months, with a 38.71% Price Total Return, reflects the market's positive reception to the company's strategic moves and financial health.
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Full transcript - Trustmark Corp (TRMK) Q4 2024:
Operator: Good morning, ladies and gentlemen, and welcome to Trustmark Corporation's Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the presentation this morning, there will be a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded. It is now my pleasure to introduce Mr. Joey Rein, Director of Corporate Strategy at Trustmark.
Joey Rein: Good morning. I'd like to remind everyone that a copy of our fourth quarter earnings release, as well as the slide presentation that will be discussed on our call this morning, are available on the Investor Relations section of our website at trustmark.com. During the course of our call, management may make forward-looking statements within the meaning of Private Securities Litigation Reform Act of 1995, and we would like to caution you that these forward-looking statements may differ materially from the actual results due to a number of risks and uncertainties, which are outlined in our earnings release, as well as our filings with the Securities and Exchange Commission. At this time, I'd like to introduce Duane Dewey, President and CEO of Trustmark.
Duane Dewey: Thank you, Joey and good morning, everyone. Thank you for joining us this morning. With me are Tom Owens, our Chief Financial Officer; Barry Harvey, our Chief Credit and Operations Officer; and Tom Chambers, our Chief Accounting Officer. We at Trustmark are very pleased with our full year and fourth quarter performance in a tumultuous and challenging operating environment. Trustmark's performance reflected a very strong year in net income after tax in fact a record year in that regard. We showed solid loan production and credit quality as well as continued deposit growth. Trustmark reported a fourth quarter net income of $36.1 million, representing diluted earnings per share of $0.59. For the full-year 2023, Trustmark’s net income totaled $165.5 million, which represented diluted earnings per share of $2.70. Let's review our financial highlights in a little more detail by turning to Slide three. Loans held-for-investment increased $140.3 million or 1.1% linked quarter, and $746.5 million or 6.1% year-over-year. During the fourth quarter, deposits grew $467.8 million or 3.1% linked quarter and $1.1 billion or 7.8% year-over-year. Net interest income totaled $140 million in the fourth quarter, which resulted in a net interest margin of 3.25%. For the year, net interest income totaled $566.3 million, up 11.7% from the prior year and resulted in a net interest margin of 3.32%, up 15 basis points from the prior year. Non-interest income in the fourth quarter totaled $49.8 million, an increase of 10.3% year-over-year. For the year ended 2023, non-interest income totaled $207 million and represented 27.2% of total revenue. Revenue for the year totaled $759.8 million, an increase of 8.6% from the prior year. Adjusted non-interest expense in the fourth quarter totaled $134.8 million. For the year, adjusted non-interest expense totaled $527.9 million, an increase of 5.9% from the prior year. Our credit quality remains solid, net charge-offs during the fourth quarter totaled $2.2 million, representing 7 basis points of average loans. For 2023, net charge-offs totaled $8.2 million and represented 6 basis points of average loans. The provision for credit losses for loans held-for-investment was $7.6 million in the fourth quarter and for the full-year 2023 was $27.3 million. We continue to maintain strong capital levels with common equity Tier 1 ratio of 10.04%, and a total risk-based capital ratio of 12.29%. The board declared a quarterly cash dividend of $0.23 per share, payable on March 15 to shareholders for record as of March 1. At this time, I'd like to ask Barry Harvey to provide some color on our loan growth and credit quality.
Barry Harvey: Thank you, Duane, and I'll be glad too. Turning to Slide 4. Loans held-for-investments totaled $13 billion as of 12/31. That's an increase, as Duane mentioned, of $140 million for the quarter. Loan growth during Q4 came from commercial lending and the equipment finance, our equipment finance line of business, as well as our real estate secured loans. We expect loan growth of mid-single digits during 2024. As you can see, our loan portfolio remains well diversified, both by product type as well as by geography. Looking onto Slide 5, Trustmark’s CRE portfolio is 94% vertical with 70% being in the existing category and 30% in the construction land and development category. Our construction land development portfolio is 79% construction. Trustmark's office portfolio, as you can see, it's very modest at $298 million outstanding, which represents only 2% of the overall loan book. The portfolio is comprised of credits with high quality tenants, low lease turnover, strong occupancy levels, and low leverage. The credit metrics on this portfolio remain extremely strong. Looking onto Slide 6, the bank’s commercial loan portfolio is well diversified, as you can see, across numerous industries with no single category exceeding 13%. On Slide 7, our provision for credit losses for loans-held-for-investment was $7.6 million during the fourth quarter, which was attributable to loan growth, net adjustments to the qualitative factors and changes in the macroeconomic forecast. The provision for credit losses for off balance sheet credit exposure was a negative 888,000 during the quarter. At 12/31, the allowance for loan losses for loans-held-for-investment was $139 million. Looking to Slide 8, we continue to post solid credit quality metrics, the allowance for credit losses represents 1.08% of the loans-held-for-investment and 249% of non-accruals, excluding those loans that are individually analyzed. In the fourth quarter, net charge-offs totaled $2.2 million or 0.07% of average loans. Both non-accrual and non-performing assets remain at reasonable levels. Duane?
Duane Dewey: Thank you, Barry. I'd like to ask Tom Owens to now focus on deposits and the income statement.
Tom Owens: Thanks, Duane. Good morning, everyone. Turning to deposits on Slide 9. We finished up the year with another good quarter, which continued to show the strength of our deposit base, emitted an environment that remains exceptionally competitive. Deposits totaled $15.6 billion at year end, a linked quarter increase of $468 million or 3.1% and a year-over-year increase of $1.1 billion or 7.8%. Deposit growth excluding brokered deposits was also strong, up $616 million or 4.3% linked quarter and $556 million or 3.8% year-over-year. With a pretty strong reversal of public fund balances, which grew by $463 million during the fourth quarter after having declined by $373 million during the third quarter. We also had good growth in personal balances linked quarter, which were up $276 million, offsetting decreases in non-personal balances of $121 million and brokered balances of $151 million. Regarding mix, time deposits declined by $22 million linked quarter with non-brokered CDs up $128 million and brokerage CDs down $149 million. As of year-end, our promotional time deposit book declined by $44 million linked quarter, totaling $1.2 billion with a weighted average rate paid of 4.75% and the weighted average remaining term continued to shorten to about three months. Our broker deposit book declined by $149 million linked quarter, totaling $579 million with an all-in weighted average rate paid of about 5.46%, and the weighted average remaining term also shortened to about three months as of December 31. Also, regarding mix, noninterest-bearing DDA balances declined $123 million linked quarter or 3.7% and noninterest-bearing DDA represented about 21% of the deposit base as of December 31. Our cost of interest-bearing deposits increased by 28 basis points from the prior quarter to 2.67%. That linked quarter increase was down from the prior quarter increase of 43 basis points during the third quarter. Turning to Slide 10, Trustmark continues to maintain a stable, granular and low exposure deposit base. During the fourth quarter, we had an average of about 465,000 personal and non-personal deposit accounts, excluding collateralized public fund accounts with an average balance of about $27,000. As of December 31, 64% of our deposits were insured and 14% were collateralized, meaning that our mix of deposits that are uninsured and uncollateralized was essentially unchanged linked quarter at 22%. We maintained substantial secured borrowing capacity, which stood at $6.2 billion at December 31, representing 181% coverage of uninsured and uncollateralized deposit. Our fourth quarter total deposit cost of 2.1% represented a linked quarter increase of 26 basis points and a cumulative beta cycle-to-date of 38%. Our forecast for the first quarter is for an increase in deposit cost to 2.19%, which would represent a cycle-to-date beta of 42%. Turning to revenue on Slide 11. Net interest income, FTE, decreased $1.9 million linked quarter, totaling $140 million, which resulted in a net interest margin of 3.25%. Net interest margin decreased by 4 basis points linked quarter as the 10 basis points of accretion due to asset rate and volume was more than offset by the 14 basis points of dilution due to liability rate and volume. On Slide 12. Our interest rate risk profile remained essentially unchanged as of December 31 with substantial asset sensitivity driven by loan portfolio mix with 50% variable rate coupon. During the fourth quarter, we entered into $75 million notional of forward-starting swaps, which brought the swap portfolio notional at quarter end to $1.05 billion, with a weighted average maturity of 2.8 years and a weighted average received fixed rate of 3.18%. We also entered into $50 million notional of forward-starting floors, which brought the floor portfolio notional at quarter end to $75 million, with a weighted average maturity of four years and a weighted average SOFR rate of 3.58%. The cashflow hedging program substantially reduces our adverse asset sensitivity to a potential downward shock in interest rates. Turning to Slide 13. Non-interest income for the fourth quarter totaled $49.8 million, a $2.4 million linked quarter decrease, and for the full year totaled $206.9 million, a $1.8 million increase from the prior year. The linked quarter decrease was driven primarily by a normal seasonal decline of $2.1 million in insurance commissions. The full-year increase was driven by increases of $3.8 million or 7.2% in insurance commissions, and $1.3 million or 3% increase in service charges on deposit accounts. Those increases were offset somewhat by decreases of $2.7 million in bank card and other fees, which was primarily a decline in customer derivative revenue, and $2.1 million decline in mortgage banking as both businesses face significant headwinds from the interest rate environment. For the quarter, non-interest income represented 26.7% of total revenue, continuing to demonstrate a well-diversified revenue strand. Turning to mortgage banking on Slide 14, revenue totaled $5.5 million in the fourth quarter, bringing full-year revenue to $26.2 million, which is a decline of $2.1 million. The full-year decline was driven by increased negative net hedge effectiveness of $2.2 million, resulting from the difficult hedging environment, which prevailed during 2023. While full-year increases in mortgage servicing income and change in fair value of servicing assets from runoff, offset the decline in gain on sale of loans. Mortgage loan production totaled of $1.5 billion in 2023, a decrease of 31.6% from the prior year. Retail production mix remains strong in the fourth quarter, representing 75% of volume or about $204 million. Loans sold in the secondary market represented 85% of production, while loans held on balance sheet represented 15%. Gain on sale margin remained under pressure in the fourth quarter decreasing by 11 basis points forward to 110 basis points. And now I'll ask Tom Chambers to cover non-interest expense and capital management.
Tom Chambers: Thank you, Tom. Turning to Slide 15, you'll see a detail of our total non-interest expense. During the fourth quarter, adjusted non-interest expense totaled a $134.7 million, a linked quarter increase of $700,000 or 0.5%, mainly driven by an increase in FDIC assessment expense of $1.1 million, which is included in other expense. All other non-interest expense line items remain relatively unchanged on a linked quarter basis. As noted on Slide 16, Trustmark remains well positioned from a capital perspective. As Duane previously mentioned, our capital ratios remain solid with a common equity Tier 1 ratio of 10.04%, a linked quarter increase of 15 basis points, and a total risk-based capital ratio of 12.29%, a linked quarter increase of 18 basis points. Trustmark did not repurchase any of its common shares during 2023. As previously announced, Trustmark's Board of Directors authorized a stock repurchase program effective January 1, 2024 through December 31, 2024, under which $50 million of Trustmark’s outstanding shares may be acquired. Although we continue to have a share repurchase program in place, our priority for capital deployment continues to be through organic lending. Back to you, Duane.
Duane Dewey: Thank you, Tom. Let's take a look now at our commentary outward -- outlook for commentary slide on Slide 17. First, let's look at the balance sheet. We're expecting loans to grow mid-single digits in 2024, while deposits are expected to grow low to mid-single digits. Securities balances are expected to decline by high-single digits based on non-reinvestment of portfolio cash flows, which of course are subject to changes in market interest rates. Moving on to the income statement, we're expecting net interest income to decline low-single digits in ‘24, reflecting continued earning asset growth and stabilizing deposit costs, resulting in full-year net interest margin of approximately 3.2% based on market implied forward interest rates. For credit, the total provision for credit losses, including unfunded commitments is dependent upon future loan growth, the current macroeconomic forecast and credit quality trends. Net charge-offs requiring additional reserving are expected to be nominal based on the current economic outlook. From a non-interest income perspective, non-interest income is expected to grow mid-single digits, which reflects some modest improvement in mortgage, continued growth in insurance, and some improvement in the wealth management business. For the last couple years, we've talked about our fit-to-grow initiatives across the company in which we've invested in both growth initiatives, mostly in additional production talent, as well as in technology and other key areas of the company. To that end, in 2024, we will begin to see efficiencies from those efforts, along with other heightened cost containment initiatives, so that adjusted non-interest expense is expected to increase low-single digits full year 2024. This is always subject to the impact of commissions in our commission-based businesses. Finally, we'll continue a disciplined approach to capital deployment with a preference for organic loan growth and potential M&A. We will continue to maintain a strong capital base to implement corporate priorities and initiatives. I'd like to now, at this time, open the floor up to questions.
Operator: [Operator Instructions] The first question today comes from Graham Dick from Piper Sandler.
Graham Dick: So, I just wanted to start on NII in the NIM. I guess your guidance is implying the NIM to decline kind of throughout 2024, which is a bit different than what most other of your peers are saying right now. Can you just walk through your thoughts on this? I know you guys have a fair amount of floating rate loans, but just interested to hear how your outlook might differ from other banks out there who say that fixed asset repricing will be enough to overcome any pressures from lower fed rates?
Tom Owens: This is Tom Owens and I'd start by saying that, to a great extent, I'm in agreement with the commentary that you just cited, and I disagree somewhat with your interpretation so far of continuing compression and net interest margin. We've come off here back-to-back linked quarter declines of 4 basis points in net interest margin. I think the quarter before those two was 6 basis points. And so I think with the continued increase that we anticipate in deposit cost, the guidance that we've given you for the first quarter, it's reasonable to assume that you're going to see another linked quarter decline in terms of, you know, a similar order of magnitude to what the run rate has been. But we are anticipating, you know, I think on last quarter's call, when asked about the inflection point in terms of net interest margin and net interest income, I think the guidance we gave then was second to third quarter. And I think at this point, you know, it might come in a quarter to the second quarter. So we think that and obviously as I said my prepared comments, it remains a competitive environment for deposits. Who knows what the Fed's going to actually do? Our guidance is based on market implied forwards. But all that being said, we are modeling a similar linked quarter decline in the first quarter to what you've seen the last several quarters. And then we are getting to an inflection point, in terms of some modest decretion to net interest income and net interest margin. And I do agree with the commentary that repricing of the fixed rate assets on the balance sheet over time is enough to generally stabilize, if not accrete net interest margin modestly. So that's a long-winded answer. The short answer is, you know, we think the trough is probably it's in the first quarter here in terms of net interest margin and then we do get some stabilization there and some modest decretion.
Graham Dick: Okay, that's very helpful. So, then I guess as you look out past 1Q then you're thinking, you know, stabilization maybe a few basis points of accretion, but all in, you know, about 320 at the end of the day for the full year. What sort of rate, I know you said you have the forward curve, I guess baked into the guidance right now, but what did that say, I guess when you guys built out this guidance? Because, you know, obviously it changes a lot.
Tom Owens: Yeah, I like the way you asked the question, Graham, because there's been some volatility to market implied forwards. So yes, when we were putting our plan together and our forecast, it did have the six cuts in it, which it still largely does, although the probability of the March cut has come out quite a bit. So six cuts on the year, ending the year with the top of the target range at 4%. But I will say again, you know, whether that comes to pass or not, the ongoing repricing of the fixed rate assets, let's say the Fed was just on hold, let's say the market implied forwards are completely wrong and the Fed's just on hold for the remainder of the year. I still think that because of what we've talked about here, the dynamic of the fixed rate assets continuing to reprice that you get into the back half of the year and you start to see some lift to net interest margin and net interest income. So I really think that, you know, the wild card is obviously what the Fed ends up doing and then what the competitive landscape looks like in terms of deposits. I mean, it stands to reason that that's really going to bring some of the pressure for deposit competition down if the competition for deposits available yield declines. And so at that point you need to be pretty reactive in terms of how you're repricing your deposit book. One of the reasons in my prepared commentary, I give you the details on our broker timed deposit book and our promotional timed deposit book is, just to reiterate the point, at this point the weighted average remaining term on those books, which together are something like $1.8 billion, is about three months. So we think we're well positioned to react to whatever the Fed does. And I think that if the market implied forwards turn out to be right, I mean, clearly there's a fair amount of skepticism in the industry as to whether the Fed begins to cut in March or not. But if they do turn out to be right, I really think that's going to take pressure off the cost deposits and provide the opportunity to reprice down the promotional and broker time deposit books.
Graham Dick: Okay. The way I'm hearing it is -- it sounds like Fed cuts would be better for the margin, I guess, this year than the Fed staying on hold. Is that correct? Just want to make sure I understand that correctly.
Tom Owens: I pretty -- I'll say it in a different way. When I look at where analysts were in terms of expectations for ‘24, right? When I look at the range of analyst estimates, when I look at the median analyst estimate in terms of net interest income and net interest margin for full-year ’24, that's essentially where we were 90 days ago before the idea that the Fed's done here, and they're going to start to cut, and maybe they're going to cut 6x in 2024. We were already, our internal modeling was already very similar to analyst estimates, both on NII and net interest margin. And so, the guidance that we're giving you today just essentially re reiterates that. I mean, we're slightly asset sensitive, right? And so, there's no question when you look at about half the book is floating rate, right? So there's no question that the Fed beginning to ease creates a headwind to net interest income. The question is how quickly you can react and reprice down your deposit book, starting with promotional and broker deposits. But we've been increasing rack rates that we pay on various products along the way as well. We think we have the opportunity however it turns out, in terms of the ultimate path of monetary policy this year to be in the range we're giving you in terms of net interest margin and net interest income.
Graham Dick: Okay. Got it. That's really helpful. And I guess just one quick question on credit. Non-accruals are up just a little bit again this quarter. I'm just wondering if you're comfortable with where the reserve is today relative to what you see on the non-performing side, like that's at about one and a quarter coverage for the ratio of reserve to non-performers. So just wondering, if there's potential for maybe some reserve building in the future if you feel good where it's right now?
Barry Harvey: Hey Graham, this is Barry. I do feel good where the reserve is today. Maybe looking at it another way, I would say of the a $100 million of non-accruals, we have $18.2 million worth of reserve when you include those that are individually analyzed or 18.2%. I do feel like that the reserve we have on the non-accruals or non-performing assets is solid. Even though if you calculate it from the standpoint of 1.2x, that feels a little different. But if you think about it in terms of 18.2% reserve on the accruals, then that makes me feel good about where we are in that respect. A decent number of those are going to larger credit supports are going to be individually analyzed and they're very precise in terms of what we know today in terms of the actual calculation.
Operator: The next question comes from Gary Tenner with D.A. Davidson.
Gary Tenner: I wanted to ask a bit of a follow-up just on the monetary deposit outlook. I'm curious in terms of the deposit data you kind of get the guide into the first quarter. What are you assuming on the way down? Do you think it's a pretty similar beta? And what kind of lag do you think there is until you're able, I mean, you talked about the promotional deposits and brokered. But beyond that, what type of lag do you think you see on the repricing side?
Tom Owens: So, the way I would answer, I gave you the simple answer first, which is about 20% beta. Assuming -- you got to start with the reference point, right? Let's assume that our guidance on first quarter deposit cost of about 219 comes to pass. And let's say that's the starting point and that the starting point is the Fed, where they are currently at the top of the range is 5.5%. And so then if you said, well by year end, by the time we get to the fourth quarter -- how much of 150 basis points do you think, what's the relationship between the decline in deposit cost and 150 basis points, and what does that data turn out to be? In round numbers, I would say about 20%, which means 20% of 150 is about 30 basis points. So I think it would be reasonable to model from the 219 in the first quarter, you take 30 basis points off of that, and that's probably where you're going to wind up, which is what, 189 or so about, call it 190 keep. If you want to keep it super round, go from 220 in the first quarter to 190 in the fourth quarter, and relative to 150 basis points of Fed cuts, that's be of about 20%. And we're modeling that it’s pretty linear or -- well, it's pretty constant is the word I'll use. In other words, the first 75 and then the next 50, and then the next 25, we think it's pretty constant that we'll be able to get something like a 20% beta relative to those moves each quarter if those market implied forwards come to pass.
Gary Tenner: I wonder if you could just kind of square this with me then. If you're looking at a 20% deposit repricing beta but your 50% variable rate loans and less than that if you factor in the hedges, of course, but still, that's a pretty decent repricing gap between the deposit beta and the variable rate, well, the overall loan book.
Tom Owens: I'd have to do that all in my head, which is a little difficult on the fly, but the deposit base is a multiple, it's 2.5x to 3x as much as the floating rate loan book. Hard to do in my head on the fly, but mathematically that's the answer.
Gary Tenner: If I can ask you a quick follow-up, just in terms of the mid-single digit deposit growth were low to mid for the year. Does that assume any additional pay down in brokered over the course of time, or do you think you just kind of renew those as they come up?
Tom Owens: I think that'll be flat down slightly. As I said in my prepared comments, we have really good growth in personal deposits in the fourth quarter. We had solid growth. When you think about it, X the brokered having growth of -- for the full year of 3.8% full year in an environment where bank deposits have been declining, we feel really good about that and especially having been able to raise those deposits at a competitive cost. And so, yeah, I think flat to down is the answer on that. Certainly, we do not view broker deposits as a permanent feature of our balance sheet. It was more the utilization broker deposits in 2023 was more to manage the repricing of the deposit book, you know, with 500 basis points of Fed rate hikes. So certainly, we're going to try and be opportunistic over time to continue to have the broker deposit book tried.
Operator: [Operator Instructions] The next question comes from Catherine Mealor with KBW. Please go ahead.
Catherine Mealor: Thanks. Good morning. Just one more follow-up on the margin, is, do you have what percentage or the amount of loan, of fixed rate loans that you expect to reprice this year? And then similarly, do you have an amount of deposits that are indexed that will outside of kind the promotional maybe, and broker just that it will immediately reprice lower. Just kind of thinking about the immediate repricing lower once rates start moving lower on the deposit side. Thanks.
Barry Harvey: Hey Catherine, this is Barry. I'll start with the first part and Tom will take the second part, but we do expect around $600 million of fixed rate loans to be repriced in the next 12 months. And then a little bit less than that, maybe $550 million of fixed rate loans to be repriced over the next 12 to 24 months.
Catherine Mealor: Okay. And what's the rate on average that's coming up and repricing too?
Barry Harvey: Sure. The ones that are going to be repricing in the next 12 months, the average rate is 5.14%, and then those that were repriced 12 to 24 months out, the average rate is 4.07%.
Catherine Mealor: Okay, great. Thank you, Barry.
Tom Owens: So Catherine, first of all, I appreciate Barry taking some of the load here this morning. Like y'all are wearing me out, here out of the gate. But we do not have a large portion. We have some public fund balances and I'm a little reluctant to throw out a number because I don't have the numbers in front of me right now, but it's not a huge portion that reprices down immediately. I can think of some public fund balances that probably add up between, somewhere between $500 million and $1 billion. And then we also have some corporate what we call, CTS (NYSE:CTS), Corporate Treasury Services balances that reprice down that are indexed. And while we're on the call, I'm going to try and get my hands on that number so I can give you a little more color on that piece. But those are really the two categories I feel good about that range I just gave you on the public. And I'll see if I can get my hands on a more solid answer on the corporate deposits that are indexed.
Catherine Mealor: Okay, that's great. And then any thoughts on, we've seen some other companies do bond restructures. How do y'all think about that? I know you're talking about just the bond books running off at a high-single digit pace throughout the year. But any thoughts around doing something more immediate on the bond book?
Tom Owens: You know, Catherine, we've gotten that question every quarter and understandably so. I mean, every time we've looked at it. The opportunity -- I always struggle a little bit with whether you're truly adding, and there's two parts of that to me. One is the extent to which you are borrowing on a spread basis to fund securities in your portfolio that are not on a spread basis. And we have a pretty small percentage of the portfolio in the securities portfolio that fits that profile. But we certainly have continued to look at it. And I'll tell you, I mean, the other thing is, obviously, in my prepared comments, I talk about the cashflow hedge portfolio, and the steps that we've done there to reign in our asset sensitivity. We are very naturally asset sensitive and as best we can tell from call report data, we feel like we're middle of the pack in terms of our asset sensitivity. But there is a decision to be made there as well, right? I mean, with the uncertainty that we're facing with respect to the path of the Fed and monetary policy. And so potential restructuring of the securities portfolio is part of that calculus, as well as what we do with the cashflow hedge portfolio. I'd say, we continue to look at it.
Catherine Mealor: Great. And any updated thoughts on the potential insurance sale? I know you get that question every quarter too, but just curious if any kind of changes in how you're thinking about that.
Tom Owens: No. I would say same thing I've said in the prior quarters, Catherine. That's been a good business for Trustmark. I think, this year was the thirteenth consecutive year of record revenue and profitability in that business. It's been a good business for us. That said, we're well aware of what is going on around us. We're well aware of valuations and the opportunities there. But at this point, where's really no change from what we've got into in prior calls.
Operator: [Operator Instructions] This concludes our question-and-answer-session. I would like to turn the conference back over to Duane Dewey for any closing remarks.
Duane Dewey: I just want to say thank you again for joining us this morning for our full-year and fourth quarter earnings call. We look forward to getting back together with all of you again at the end of the first quarter and toward the end of April. You all have a great rest of the week. Thank you.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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