Trustmark in Jackson, Miss., said higher loan-loss provisions were largely to blame for a 7.4% year-over-year decline in its first-quarter profit.
The $13 billion-asset company had net income of $27 million in the three months, versus $29.1 million in the first quarter of 2015. Earnings per share fell 7% to 40 cents. Revenue rose 5% to $131 million.
Net interest income after the loan-loss provision fell 4% to $96 million. Trustmark's provision on loans held for investment rose 26% to $2.2 million and its provision on acquired loans rose almost fourfold to $1.3 million. Trustmark, which announced its first-quarter results Tuesday, did not say why the provisions were higher.
The net interest margin narrowed by 34 basis points to 3.54% and total loans rose 12% to $7.3 billion.
Noninterest income rose 2% to $43 million on higher bank card fees and lower expenses from the FDIC indemnification asset and decreased partnership amortization of tax credit investments.
Noninterest expense fell 0.3% to $99 million, mainly because foreclosure-related expenses fell to $181,000 from $1.1 million. The efficiency ratio worsened by 41 basis points to 66.87%.
Trustmark also announced that in the second quarter it plans to close six branches "with limited growth opportunities" in Alabama, Mississippi and Florida. It was not more specific about the branch locations and did not provide an estimate on cost savings from the closings.