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 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. 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 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 with 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 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 this morning. With me are Tom Owens, our Chief Financial Officer. Gary 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 four-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 59 cents. 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. Bonds held for investment increased 140.3 million or 1.1% one 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 seven basis points of average loans. For 2023, net charge-offs totaled $8.2 million and represented six 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 23 cents per share payable on March 15th to shareholders who record as of March 1st. At this time, I'd like to ask Barry Harvey to provide some color on our loan growth and credit quality.