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Trustmark execs talk branch strategy, energy exposure

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Trustmark execs talk branch strategy, energy exposure

Jackson, Miss.-based TrustmarkCorp. closed one branch and opened another during the first quarter,and executives expect to shutter six more locations during the second quarter.

The bank opened a branch in Tuscaloosa, Ala. and closed a branchin Meridian, Miss. The closures in the second quarter will be at branches with "limitedgrowth opportunities" in Alabama, Mississippi and Florida, executives saidduring an earnings call April 27. The branch strategy is part of efforts to realignTrustmark's retail delivery channels, and the bank expects to recognize cost savingsin the third and fourth quarter.

Executives againaddressed Trustmark's energy exposure, stating that total exposure to the sectorof $482.1 million with outstanding balances of $252.6 million only represents 3.5%of the held-for-investment loan portfolio. They added that the bank has no loanexposure where the source of repayment or the underlying security of the exposureis tied to the realization of value from energy reserves. In addition, managementsaid that no risk rating or accrual status changes were made as a result of therecent Shared National Credit Review.

"At this juncture, we view the activity of the energy portfolioas more isolated events as opposed to something that is representative of the portfolioas a whole," President and CEO Gerard Host said during the call. "As areminder should oil prices remain at current levels or below for a prolonged periodof time, there is a potential for downgrades to occur. We will continue to monitorthe situation as appropriate."

Trustmark reported first-quarter net income of $27.0 millionor 40 cents per diluted share, compared to $29.1 million or 43 cents per dilutedshare for the same period a year ago.