Trustmark Corp. to sell $100 million shares, use proceeds to pay back government’s investment

Trustmark selling stock to pay back US investment

JACKSON, Miss. — Regional bank Trustmark Corp. said Monday it is selling $100 million common shares in a public offering to raise money to help pay back the government’s $215 million investment under the financial bailout plan.

The parent of Trustmark Bank, which operates more than 150 offices in Florida, Mississippi, Tennessee and Texas, issued 215,000 nonvoting senior preferred shares to the Treasury Department last fall in exchange for its investment under the agency’s Capital Purchase Program.

Treasury also received warrants to purchase Trustmark common shares with a market value of $32.3 million.

Trustmark said Monday that underwriters of the stock offering will have a 30-day option to buy up to an additional $15 million worth of stock if demand exceeds initial supply. UBS Securities LLC and J.P. Morgan Securities Inc. are serving as the joint-bookrunning managers of this offering and Keefe, Bruyette & Woods Inc. and Sandler O’Neill & Partners LP are serving as co-managers of this offering.

After the offering is completed, Trustmark will ask its banking regulators and the Treasury Department for permission to repurchase all of the preferred stock and to buy back the warrant as well.

Trustmark last month recorded a 9 percent increase in third-quarter earnings as the company continue to reduce its portfolio of construction and land development in real estate-troubled Florida, Trustmark reported Tuesday. CEO Richard Hickson has said the bank has capital ratios that significantly exceed those considered for a banking company to be well-capitalized.

Of the $250 billion that the government initially set aside to spend in direct assistance to banks, it has spent about $205 billion and the Treasury is already taking steps to bring that program to an end. Banks have so far paid back about $71 billion of the infusions and paid the Treasury nearly $7 billion in dividends.