Trustmark Corporation

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. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. As a reminder, this call is being recorded. It is now my pleasure to introduce Mr. Joey Rain, Director of Corporate Strategy at Trustmark.

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 the call this morning, is available on the Investor Relations section of our website at Trustmark.com. During the course of our call this morning, management may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We would like to caution you that these forward-looking statements may differ materially from actual results due to a number of risks and uncertainties which are outlined in our earnings release and our other filings with the Securities and Exchange Commission. At this time, I'd like to introduce Duane Dewey, President and CEO of Trustmark Corporation.

Thank you, Joey, and good morning to everyone. Thank you for joining us. With me this morning are Tom Owens, our Chief Financial Officer, Barry Harvey, our Chief Credit and Operations Officer, and Tom Chambers, our Chief Accounting Officer. Trustmark had a solid fourth quarter and strong performance overall in 2021, reflecting balance sheet growth Excellent credit quality and record results in our insurance and wealth management businesses Our mortgage banking business continues to perform well with total production of 2.8 billion in mortgage loans during the year Although the gain on sale margins continue to be under pressure We will continue to navigate the challenging low interest rate environment we remain committed to positioning the company for continued long-term success and With that said, our balance sheet is well positioned for rising interest rates. Turning to slide three, let's review our financial highlights. Trustmark reported net income of $26.2 million, or $0.42 per diluted share for the fourth quarter. For the year, Trustmark's net income totaled $147.4 million, representing diluted earnings per share of $2.34. At December 31st, loans held for investment totaled $10.2 billion, an increase of $72.9 million linked quarter, and $423.3 million, or 4.3% from the prior year. Deposits totaled $15.1 billion, an increase of $164.3 million from the prior quarter, and $1 billion, or 7.4% year over year. Investment securities totaled $3.6 billion, a linked quarter increase of $128.9 million, and a year-over-year increase of $1.1 billion, or 41.6%. Net interest income, excluding interest and fees on PPP loans, totaled $100.8 million in the fourth quarter, an increase of $1.2 million, or 1.2% linked quarter. Non-interest income totaled 50.8 million and represented 34.1% of total revenue in the fourth quarter. Insurance revenue in 2021 totaled 48.5 million, reflecting a 7.4% increase from the prior year, while wealth management revenue totaled 35.2 million, up 11.5% year-over-year. Mortgage loan production totaled $590.7 million in the fourth quarter, down seasonally 16.7% length quarter. Adjusted non-interest expense in 2021 totaled $471.3 million, a 3.5% increase from the prior year. In the fourth quarter, adjusted non-interest expense totaled $118.2 million, a 1.5% 3% increased linked quarter. Credit quality continued to remain solid for 2021 as non-performing assets declined 10.1% from the prior year and recoveries exceeded charge-offs by 3.7 million. We also maintained strong capital levels with Tier 1 capital of 11.29% and a total risk-based capital of 13.55%. The board declared a quarterly cash dividend of 23 cents per share payable March 15th to shareholders of record on March 1st. In the fourth quarter, Trustmark repurchased 27.1 million or approximately 816,000 shares of common stock. And for the full year, we repurchased 61.8 million or approximately 1.9 million shares of common stock. At this time, Barry Harvey will provide color on loan growth and credit quality.