Trustmark gets earnings boost from BancTrust takeover
Published: July 24,2013
JACKSON — Regional bank Trustmark Corp. says profit in 2013’s second quarter rose 6 percent from the same three months of 2012, fueled by gains from its takeover of the former BancTrust Financial Group.
Trustmark posted quarterly profit of $31.1 million or 46 cents per share yesterday. That’s up from $29.3 million or 45 cents per share in 2012’s second quarter.
Analysts polled by FactSet had estimated 44 cents per share, on average.
Trustmark said money recovered from bad loans exceeded new money charged off by $771,000. The company not only didn’t set aside any new money for anticipated loan losses, but released $4.8 million from reserves. Spokeswoman Melanie Morgan said that boosted after-tax profit by $3 million.
“Credit quality continued to experience significant improvements,” CEO Gerard Host said in a statement.
BancTrust, of Mobile, Ala., merged into Trustmark Feb. 15. The new parent says those operations added $6.1 million in profit during the quarter.
The company said loans increased by $45 million, as increases in construction, real estate and government lending outweighed declines in mortgages held and general business loans.
Trustmark’s return on assets was 1.06 percent. That key measure of profitability is down from 1.2 percent a year ago, but still exceeds other Mississippi-based banks. In 2013’s first quarter, Trustmark had return on assets of 0.93 percent, compared to 0.84 percent for all banks based in Mississippi and 1.12 percent for all banks nationwide.
The amount that the company collected in interest from borrowers, net of what it paid out to savers, rose to $110 million. The net interest margin, a measure of that spread divided by all loans, was 4.02 percent, up from 3.98 percent in the first quarter, but down from 4.15 percent in 2012’s second quarter. Low interest rates have generally caused that spread, which is a basic ingredient of bank profits, to narrow. Trustmark said that higher interest rates on acquired BancTrust loans boosted its margin, but said it would have fallen without the takeover.
Jackson-based Trustmark has $11.9 billion in assets with offices in Mississippi, Alabama, Florida, Tennessee and Texas.
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