Trustmark profit rises as bad loans fall

JACKSON, Miss. -- Trustmark Corp. says profit in the third quarter of 2012 rose 10.9 percent from the same three months of 2011, as it paid less interest on deposits and set aside less money to cover future bad loans.

The regional bank said Tuesday it posted quarterly profit of $29.9 million, or 46 cents per share, up from $27 million, or 42 cents per share, in 2011's third quarter.

Analysts polled by FactSet had forecast 46 cents per share, on average.

Trustmark's return on assets, one measure of profitability, rose to 1.21 percent. That remains well above the 0.85 percent return posted by all federally insured banks in the second quarter.

The bank made $1.4 million more from originating mortgages, as mortgage production rose 50 percent over 2011's third quarter. Trustmark spent $4 million less to take care of foreclosed real estate than in the year-ago period.

The set-aside for future loan losses was $3.4 million in the quarter. That's above the $650,000 the bank set aside in 2012's second quarter, but less than half the $8 million that Trustmark set aside in 2011's third quarter.

"We continued to experience meaningful improvement in credit quality," CEO Gerard Host said in a statement.

Total loans fell slightly, and the company's net interest margin _ the profit it makes on loans after it pays interest to depositors _ shrank a bit.

The company said it wrote off $400,000 in improvements it made to leased property in connection with a "pending branch office consolidation." The company completed its $1.2 million sale of its proprietary mutual fund business.

Based in Jackson, Miss., the $9.9 billion bank has offices in Mississippi, Texas, Tennessee and Florida. Trustmark plans to buy BancTrust Financial Group, based in Mobile, Ala., in early 2013.