Trustmark Corporation (NASDAQ:TRMK) has received preliminary approval
from the U.S. Treasury Department to participate in its Capital Purchase
Program, a voluntary initiative for U.S. financial institutions designed
to support the economy by increasing financing to businesses and
consumers. Under this program, Trustmark intends to issue $215 million
in nonvoting senior preferred stock to the U.S. Treasury. Trustmark’s
senior preferred shares will pay a cumulative annual dividend rate of 5%
for the first five years and will reset to an annual rate of 9% after
year five. These senior preferred shares are callable by Trustmark at
par after three years. Trustmark may call them during the first three
years, but only with the proceeds of newly-issued Tier 1 equity capital
in an amount of at least 25% of the $215 million.
Richard G. Hickson, Chairman and CEO stated, "We
believe the U.S. Treasury Capital Purchase Program provides an
outstanding opportunity for strong, healthy banks like Trustmark to
support the recovery of the U.S. economy. This cost-effective capital
will support Trustmark’s growth and expansion
opportunities. We chose to voluntarily apply for the program in order to
support the Treasury’s efforts to facilitate
additional lending in our markets.”
In conjunction with the purchase of Trustmark’s
senior preferred shares, the Treasury will receive warrants to purchase
Trustmark common shares with an aggregate market value equal to $32.3
million, or 15% of the senior preferred stock investment. The Trustmark
common stock underlying these warrants will represent less than 3% of
Trustmark’s outstanding common shares at
September 30, 2008, at current market prices. The exercise price will be
the market price of Trustmark’s common stock
at the time of issuance, calculated on a 20 trading day trailing
average. This approval is subject to the completion of standard closing
conditions and the execution of the closing documents. The U.S. Treasury
intends that the purchase will occur within 30 days.
Trustmark is a financial services company providing banking and
financial solutions through over 150 offices and 2,600 associates in
Florida, Mississippi, Tennessee and Texas.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this document are not statements of
historical fact and constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements include, but are not limited to, statements
relating to anticipated future operating and financial performance
measures, including net interest margin, credit quality, business
initiatives, growth opportunities and growth rates, and relating to the
anticipated investment by the U.S. Treasury in Trustmark as part of its
Capital Purchase Program, among other things and encompass any estimate,
prediction, expectation, projection, opinion, anticipation, outlook or
statement of belief included therein as well as the management
assumptions underlying these forward-looking statements. Should one or
more of these risks materialize, or should any such underlying
assumptions prove to be significantly different, actual results may vary
significantly from those anticipated, estimated, projected or expected.
These risks could cause actual results to differ materially from current
expectations of Management and include, but are not limited to, changes
in the level of nonperforming assets and charge-offs, local, state and
national economic and market conditions, including the extent and
duration of current volatility in the credit and financial markets,
material changes in market interest rates, the costs and effects of
litigation and of unexpected or adverse outcomes in such litigation,
competition in loan and deposit pricing, as well as the entry of new
competitors into our markets through de novo expansion and acquisitions,
changes in existing regulations or the adoption of new regulations,
natural disasters, acts of war or terrorism, changes in consumer
spending, borrowings and savings habits, technological changes, changes
in the financial performance or condition of Trustmark’s
borrowers, the ability to control expenses, changes in Trustmark’s
compensation and benefit plans, greater than expected costs or
difficulties related to the integration of new products and lines of
business and other risks described in Trustmark’s
filings with the Securities and Exchange Commission. Although Management
believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such
expectations will prove to be correct. Trustmark undertakes no
obligation to update or revise any of this information, whether as the
result of new information, future events or developments or otherwise.
