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Trustmark to Incur $9M Q2 Charge for Early Retirement Plan
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In a regulatory filing, Trustmark Corporation (TRMK - Free Report) announced the launch of a voluntary early retirement program for its associates of age 60 and above with five or more years of service. The retirement offer was accepted by 188 associates (6.38% of the eligible workforce), who will retire no later than Jun 30, 2016.
Related One-Time Costs
The early retirement program will result in a one-time, pre-tax charge of around $9.0 million or 8.3 cents per share (net of tax), in Trustmark's second-quarter 2016 earnings.
Subsequent Cost Savings
The implementation of the early retirement program will lead to cost savings for Trustmark during the second half of 2016. Pretax salary and employee benefits expense savings of $4.2 million or 3.9 cents per share (net of tax) are expected to be realized in the said period.
Also, pretax salary and employee benefits expense savings are expected to total around $8.5 million or 7.7 cents per share (net of tax) in 2017.
Expense Trend
Trustmark's noninterest expense remains well controlled. Operating expenses have declined at a three-year CAGR of 1.7% (2013–2015). The trend continued in the first quarter of 2016 as well. Management considers disciplined expense management a key area of focus in the support of improving shareholder value.
During the second quarter of 2016, Trustmark plans to continue its measured approach to the optimization of its retail delivery channels by closing six branches with limited growth opportunities in the Alabama, Florida and Mississippi market regions. The move is anticipated to result in cost savings for the company in the second half of the year.
The early retirement program will also help the company to continue with its cost saving efforts. The filing stated, “This voluntary early retirement program represents another proactive measure in the management of Trustmark’s expense base. This initiative provides organizational efficiencies resulting from investments in technology and realignment of work processes as well as advancement opportunities for associates.”
Currently, Trustmark carries a Zacks Rank #3 (Hold). Some better-ranked finance stocks include Amerisafe, Inc. (AMSF - Free Report) , Brookfield Asset Management Inc. (BAM - Free Report) and LPL Financial Holdings Inc. (LPLA - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy).
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Trustmark to Incur $9M Q2 Charge for Early Retirement Plan
In a regulatory filing, Trustmark Corporation (TRMK - Free Report) announced the launch of a voluntary early retirement program for its associates of age 60 and above with five or more years of service. The retirement offer was accepted by 188 associates (6.38% of the eligible workforce), who will retire no later than Jun 30, 2016.
Related One-Time Costs
The early retirement program will result in a one-time, pre-tax charge of around $9.0 million or 8.3 cents per share (net of tax), in Trustmark's second-quarter 2016 earnings.
Subsequent Cost Savings
The implementation of the early retirement program will lead to cost savings for Trustmark during the second half of 2016. Pretax salary and employee benefits expense savings of $4.2 million or 3.9 cents per share (net of tax) are expected to be realized in the said period.
Also, pretax salary and employee benefits expense savings are expected to total around $8.5 million or 7.7 cents per share (net of tax) in 2017.
Expense Trend
Trustmark's noninterest expense remains well controlled. Operating expenses have declined at a three-year CAGR of 1.7% (2013–2015). The trend continued in the first quarter of 2016 as well. Management considers disciplined expense management a key area of focus in the support of improving shareholder value.
During the second quarter of 2016, Trustmark plans to continue its measured approach to the optimization of its retail delivery channels by closing six branches with limited growth opportunities in the Alabama, Florida and Mississippi market regions. The move is anticipated to result in cost savings for the company in the second half of the year.
The early retirement program will also help the company to continue with its cost saving efforts. The filing stated, “This voluntary early retirement program represents another proactive measure in the management of Trustmark’s expense base. This initiative provides organizational efficiencies resulting from investments in technology and realignment of work processes as well as advancement opportunities for associates.”
Currently, Trustmark carries a Zacks Rank #3 (Hold). Some better-ranked finance stocks include Amerisafe, Inc. (AMSF - Free Report) , Brookfield Asset Management Inc. (BAM - Free Report) and LPL Financial Holdings Inc. (LPLA - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>