Trustmark Corporation

Good morning, ladies and gentlemen, and welcome to Trustmark Corporation's third 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 1 on a touch-tone phone. To withdraw your question, please press star, then 2. As a reminder, this call is being recorded. It is now my pleasure to introduce Mr. Joe Urein, Director of Corporate Strategy at Trustmark. Please go ahead.

Good morning. I'd like to remind everyone that a copy of our third quarter earnings release, as well as the slide presentation that will be discussed on our call this morning, is 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 the Private Securities Litigation Reform Act of 1995. 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 other filings with the Securities and Exchange Commission. At this time, I'd like to introduce Duane Dewey, President and CEO of Trustmark.

Thank you, Joey, and good morning, everyone. Thank you for joining us today. 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 third quarter with continued loan and deposit growth, stable net interest income, strong performance in our insurance business, and solid credit quality. As previously disclosed, Trustmark recognized a litigation settlement expense of 6.5 million in the third quarter. With this charge, Trustmark reported a third quarter net income of $34 million, representing diluted earnings per share of 56 cents. Including this litigation, excluding this litigation settlement expense, Trustmark's third quarter net income totaled 38.9 million or $0.64 per diluted share. During the first nine months of 2023, Trustmark's net income totaled $129.4 million, which represented diluted earnings of $2.11 per share, an increase of 22.7% from the same period in 2022. We continue to focus on cost-saving initiatives to improve efficiency as well as technology to enhance our ability to grow and serve customers. We believe Trustmark is well-positioned to respond to changing economic conditions and create long-term value for our shareholders. Let's take a look at our financial highlights in a little more detail by turning to slide three. Loans held for investment increased $196.3 million, or 1.6% linked quarter, and $1.2 billion, or 10.6% year-over-year. Deposits during the quarter grew $188 million, or 1.3% linked quarter, and $676.7 million, or 4.7% year-over-year. Net interest income totaled $141.9 million, resulting in a net interest margin of 3.29% down four basis points linked quarter. Non-interest income decreased 2.5% linked quarter to $52.2 million, representing 27.4% of total revenue in the third quarter. Non-interest expense in the third quarter totaled $140.9 million, Excluding the litigation settlement expense of $6.5 million, non-interest expense was $134.4 million, up $2.2 million or 1.7% in the quarter. Net charge-offs during the quarter totaled $3.6 million and represented 11 basis points of average loans. The provision for credit losses for loans held for investment was $8.3 million in the third quarter. Credit quality remained solid during the quarter as the allowance for credit losses represented 1.05% of total loans held for investment and 273.6% of non-accrual loans, excluding individually evaluated loans at September 30th. We continue to maintain strong capital levels with common equity Tier 1 of 9.89% and a total risk-based capital ratio of 12.11%. The board declared a quarterly cash dividend of 23 cents per share payable on December 15th to shareholders of record as of December 1. At this time, I'd like to ask Barry Harvey to provide some color on loan growth and credit quality.