Trustmark National Bank in Jackson, Miss., has set up a mortgage lending shop in Birmingham, Ala., to serve its growing retail and wholesale customer base in the state.

The $9.6 billion-asset bank said last week it has hired Steve Shaw, a longtime Birmingham-area mortgage professional, to lead the business as its regional production manager.

The office is Trustmark's first in Alabama to go along with its mortgage loan production offices in Memphis, Houston, the Florida Panhandle and throughout Mississippi. The company said that mortgage production exceeded $1.7 billion for 2010 and that it currently maintains a servicing volume of more than $5.5 billion.

The bank's parent company, Trustmark Corp., reported on Tuesday that its income from mortgage banking totaled $9.8 million, up more 55% from the prior quarter. Overall, the company reported third-quarter earnings of $27 million, up 4% from a year ago but down almost 15% from the second quarter. Earnings per share totaled 42 cents per share, a penny shy of analysts’ expectations. 

Loans were down about 3.5% from the prior quarter, to $5.9 billion, largely as a result of its efforts to reduce exposure to construction lending and its decision to discontinue indirect auto financing.

A research note from Sandler O’Neill & Partners L.P. said that Trustmark missed estimates due in part to higher expenses. Noninterest expense climbed 5% to $85.5 million from the prior quarter, which Sandler O'Neill attributed to costs associated with the resolution of long-standing litigation; expenses related to the realignment of certain business units; and compensatory mortgage foreclosure fees that totaled $2.5 million.

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