Trustmark (TRMK) AI Stock Analysis

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Trustmark

(NASDAQ:TRMK)

61Neutral

Trustmark's overall stock score reflects its strong financial foundation and positive earnings call highlights. However, operational challenges, weak technical indicators, and stretched valuation with negative P/E weigh down the score. Improvement in operational efficiency and cash flow management will be critical for future stock performance.

Trustmark (TRMK) vs. S&P 500 (SPY)

Market Cap

$1.89B

Dividend Yield2.98%

Average Volume (3M)383.89K

Price to Earnings (P/E)10.0

Beta (1Y)1.15

Revenue Growth-11.99%

EPS Growth-103.10%

CountryUS

Employees2,500

SectorFinancial

Sector Strength86

IndustryBanks - Regional

Share Statistics

EPS (TTM)-0.09

Shares Outstanding60,799,110

10 Day Avg. Volume452,864

30 Day Avg. Volume383,895

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)3.74

Price to Cash Flow (P/CF)5.20

P/FCF Ratio2.90

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$42.25

Price Target Upside35.33% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering4

Trustmark Business Overview & Revenue Model

Company DescriptionTrustmark Corporation (TRMK) is a diversified financial services company headquartered in Jackson, Mississippi. The company operates through several business segments, including banking, wealth management, and insurance. Trustmark offers a wide range of banking products and services such as personal and business banking, mortgage services, and loans. Additionally, it provides wealth management services, including investment management, financial planning, and trust services. The insurance segment offers a variety of insurance products, catering to the needs of individuals and businesses.

How the Company Makes MoneyTrustmark Corporation generates revenue primarily through its banking operations, which include interest income from loans and advances, and fees from various financial services. Interest income is a vital revenue stream, driven by the spread between the interest rates on loans and the interest paid on deposits. The company also earns significant non-interest income from service charges, mortgage banking services, and fees associated with wealth management and insurance products. Additionally, Trustmark's insurance segment contributes to its earnings through premiums collected from various insurance policies. Strategic partnerships and a diversified portfolio of services further enhance the company’s revenue-generating capabilities.

Trustmark Financial Statement Overview

Summary

Trustmark's financial statements present a mixed picture. Strong revenue growth and low leverage reflect a solid financial foundation. However, operational challenges such as negative EBIT and cash flow management need attention. Improving operational margins and cash conversion is crucial for sustaining growth and enhancing shareholder value.

Income Statement

Positive

Trustmark's income statement shows strong revenue growth over the years, with the most recent period seeing a 32.27% increase from the previous year. However, the company reported a negative EBIT in the latest annual data, indicating operational challenges. The gross profit margin is healthy at 100%, typical for the banking industry where gross profit equals total revenue. Net profit margin has improved to 22.92%, suggesting efficient cost management, but the negative EBIT is a concern.

Balance Sheet

Positive

The balance sheet reflects a stable financial structure with a debt-to-equity ratio of 0.22, indicating low leverage and financial stability. The company's equity ratio of 10.81% signifies a moderate reliance on equity financing. Return on Equity (ROE) is strong at 11.36%, though slightly lower than the previous year, showing effective use of equity to generate profits. Overall, the balance sheet suggests a well-managed capital structure with room for growth.

Cash Flow

Positive

Cash flow analysis reveals a decrease in free cash flow from the previous year, with a negative growth rate of -40.41%. The operating cash flow to net income ratio is 0.52, indicating moderate cash conversion efficiency. The free cash flow to net income ratio is 0.40, which is adequate but shows room for improvement in generating cash from operations. The company needs to focus on improving cash flow generation to support ongoing operations and investments.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
455.46M	735.25M	46.51M	555.37M	622.10M
	Gross Profit
972.90M	735.25M	46.51M	555.37M	622.10M
	EBIT
-98.50M	374.97M	84.24M	175.41M	189.78M
	EBITDA
0.00	0.00	69.86M	205.79M	231.11M
	Net Income Common Stockholders
223.01M	165.49M	71.89M	147.37M	160.03M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.26B	2.74B	619.84M	5.51B	3.94B
	Total Assets
18.15B	18.72B	18.02B	17.60B	16.55B
	Total Debt
428.17M	628.83M	1.27B	312.39M	385.32M
	Net Debt
-139.09M	-346.52M	540.20M	-1.95B	-1.57B
	Total Liabilities
16.19B	17.06B	16.52B	312.39M	385.32M
	Stockholders Equity
1.96B	1.66B	1.49B	1.74B	1.74B
Cash Flow		Free Cash Flow
88.34M	148.23M	262.50M	317.57M	34.52M
	Operating Cash Flow
116.93M	196.89M	296.52M	348.77M	65.35M
	Investing Cash Flow
284.59M	-411.17M	-2.28B	-1.01B	-1.22B
	Financing Cash Flow
-809.62M	455.04M	451.84M	970.57M	2.75B

Trustmark Technical Analysis

Technical Analysis Sentiment

Negative

Last Price31.22

Price Trends

50DMA

35.12

Negative

100DMA

35.76

Negative

200DMA

34.09

Negative

Market Momentum

MACD

-0.27

Negative

RSI

45.96

Neutral

STOCH

54.18

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TRMK, the sentiment is Negative. The current price of 31.22 is below the 20-day moving average (MA) of 33.46, below the 50-day MA of 35.12, and below the 200-day MA of 34.09, indicating a bearish trend. The MACD of -0.27 indicates Negative momentum. The RSI at 45.96 is Neutral, neither overbought nor oversold. The STOCH value of 54.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TRMK.

Trustmark Risk Analysis

Trustmark disclosed 30 risk factors in its most recent earnings report. Trustmark reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Trustmark Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NBTB	73 Outperform	$1.83B	13.04	9.53%	3.46%	18.58%	11.39%
HTH	68 Neutral	$1.82B	16.11	5.25%	2.46%	1.39%	3.30%
PPBI	66 Neutral	$1.82B	11.36	5.34%	7.05%	26.76%	455.85%
FBK	66 Neutral	$1.90B	16.48	7.68%	1.72%	1.71%	-3.44%
Sector *	64 Neutral	$13.21B	9.26	9.39%	4.87%	16.14%	-8.87%
TRMK	61 Neutral	$1.89B	10.05	2.68%	2.98%	-11.99%	-103.10%
SYBT	60 Neutral	$1.88B	16.42	12.74%	1.92%	15.78%	6.02%

* Financial Sector Average

Performance Comparison

TRMK

Trustmark

31.22

5.88

23.20%

HTH

Hilltop Holdings

27.95

-0.62

-2.17%

NBTB

NBT Bancorp

38.62

6.09

18.72%

PPBI

Pacific Premier Bancorp

18.35

-2.21

-10.75%

SYBT

Stock Yards Bancorp

63.92

20.92

48.65%

FBK

FB Financial

40.56

6.46

18.94%

Trustmark Earnings Call Summary

Earnings Call Date: Jan 28, 2025 | % Change Since: -13.95% | Next Earnings Date: Apr 22, 2025

Earnings Call Sentiment Positive

Trustmark Corporation reported a strong financial performance in the fourth quarter and full year 2024, with notable earnings growth, increased dividends, and enhanced capital ratios. The company also managed its expenses effectively and resumed share repurchase activities. However, there were challenges in loan and deposit volumes, as well as slight increases in nonperforming assets. Overall, the positive aspects of the earnings call outweigh the lowlights, indicating a solid financial position.

Highlights

Earnings Growth

Net income for Q4 totaled $56.3 million, with a diluted EPS of $0.92, marking an increase of $5 million or 9.7% from the previous quarter.

Full Year Financial Performance

For the full year 2024, net income from adjusted continuing operations was $186.3 million, an increase of $27.1 million or 17% from the prior year.

Dividend Increase

The Board announced a 4.3% increase in the regular quarterly dividend to $0.24 per share from $0.23 per share.

Share Repurchase Program

The company resumed share repurchase activities, repurchasing $7.1 million or approximately 203,000 shares of common stock.

Noninterest Income Growth

Noninterest income in Q4 was $41 million, up 9% from the previous quarter. For the full year, noninterest income totaled $156.1 million, an increase of 5.2% from the prior year.

Expense Management

Noninterest expense for the full year was $485.7 million, a decline of $2.1 million from the prior year, reflecting diligent expense management.

Capital Ratio Improvement

Trustmark's capital ratios expanded, with the CET1 ratio increasing 24 basis points to 11.54% and the total risk-based capital ratio expanding 26 basis points to 13.97%.

Lowlights

Loan and Deposit Declines

Loans held for investment totaled $13.1 billion at year-end, down $10 million linked-quarter. Deposits also declined by $132.8 million linked-quarter.

Public and Brokered Deposit Reduction

For the full year, deposits declined by $461.6 million, including a planned reduction of high-cost public and brokered deposits totaling $726.8 million.

Credit Quality Concerns

Non-accruals and nonperforming assets increased slightly during the quarter, although they have declined year-over-year.

Company Guidance

During Trustmark Corporation's fourth-quarter earnings call for fiscal year 2024, the company provided comprehensive financial guidance for 2025. Trustmark reported a net income of $56.3 million, with diluted EPS of $0.92, reflecting a 9.7% increase from the previous quarter. The return on tangible common equity was 13.68%, and the return on average assets stood at 1.23%. Loans held for investment totaled $13.1 billion, while deposits were at $15.1 billion by year-end. Revenue for the fourth quarter was $196.8 million, with net interest income at $158.4 million, resulting in a net interest margin of 3.76%. Noninterest income rose to $41 million, a 9% increase from the prior quarter. Trustmark's capital ratios improved, with tangible equity to tangible assets increasing to 9.13% and the CET1 ratio expanding to 11.54%. The company authorized a $100 million share repurchase program for 2025 and announced a 4.3% increase in its quarterly dividend to $0.24 per share. For 2025, Trustmark anticipates low single-digit growth in loans and deposits, with net interest income projected to rise in the mid to high single digits.

Trustmark Corporate Events

Executive/Board Changes

Trustmark Appoints Lea B. Turnipseed to Board

Positive

Oct 24, 2024

Lea B. Turnipseed has been appointed to the Board of Directors of Trustmark Corporation and its subsidiary, Trustmark National Bank, effective January 1, 2025. With extensive experience in financial and customer service roles at Entergy Corporation, her independent status aligns with Nasdaq’s standards. As a non-employee director, Turnipseed will receive a $45,000 annual retainer and a restricted stock award worth approximately $55,000, marking a strategic addition to Trustmark’s leadership.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.