JACKSON, Miss.--(BUSINESS WIRE)--Trustmark Corporation (NASDAQGS:TRMK) reported net income of $41.5 million in the first quarter of 2024, representing diluted earnings per share of $0.68. Trustmark's performance during the first quarter produced a return on average tangible equity of 12.98% and a return on average assets of 0.89%. The Board of Directors declared a quarterly cash dividend of $0.23 per share payable June 15, 2024, to shareholders of record on June 1, 2024.
Printer friendly version of earnings release with consolidated financial statements and notes: https://www.businesswire.com/news/home/53946039/en
First Quarter Highlights
- Loans held for investment increased 0.8% linked-quarter and represented 85.1% of total deposits at March 31, 2024
- Credit quality remained solid
- Revenue totaled $188.2 million, up 0.9% linked-quarter
- Noninterest income increased 11.1% linked-quarter, reflecting seasonal increases and the strength of diversified business lines
- Noninterest expense decreased 3.9% linked-quarter, reflecting on-going expense management priorities
Duane A. Dewey, President and CEO, stated, "We are off to a great start in 2024. Our first quarter results reflect continued loan growth, solid credit quality, and double-digit increases in noninterest income. In addition, we experienced a meaningful decrease in noninterest expense. These accomplishments are the results of our focused efforts to expand customer relationships and diligently manage expenses. Our associates have done a tremendous job of serving customers, building relationships, and demonstrating the value Trustmark can provide as our customers' financial partner. We are well positioned to serve and expand our customer base and create long-term value for shareholders."
Balance Sheet Management
- Loans held for investment (HFI) increased $107.4 million, or 0.8%, during the quarter
- Total deposits decreased $231.2 million, or 1.5%, during the quarter
- Maintained strong capital position with CET1 ratio of 10.12% and total risk-based capital ratio of 12.42%
Loans HFI totaled $13.1 billion at March 31, 2024, reflecting an increase of $107.4 million, or 0.8%, linked-quarter and $560.7 million, or 4.5%, year-over-year. The linked-quarter growth reflected increases in commercial real estate and equipment finance loans offset in part by reductions in state and other political subdivision loans and consumer loans. Trustmark's loan portfolio remains well-diversified by loan type and geography.
Deposits totaled $15.3 billion at March 31, 2024, down $231.2 million, or 1.5%, from the prior quarter and up $554.9 million, or 3.8%, year-over-year. Trustmark continues to maintain a strong liquidity position as loans HFI represented 85.1% of total deposits at March 31, 2024. Migration into higher-yielding products continued to drive a change in deposit mix from noninterest-bearing deposits, which represented 19.8% of total deposits at March 31, 2024. Interest-bearing deposit costs totaled 2.74% for the first quarter, an increase of 7 basis points linked-quarter, while the total cost of deposits was 2.18%, an increase of 8 basis points linked-quarter. The total cost of interest-bearing liabilities in the first quarter was 2.92%, up 3 basis points from the prior quarter.
During the first quarter, Trustmark did not repurchase any of its outstanding common shares. As previously announced, Trustmark's Board of Directors authorized a stock repurchase program effective January 1, 2024, under which $50.0 million of Trustmark's outstanding shares may be acquired through December 31, 2024. At March 31, 2024, Trustmark's tangible equity to tangible assets ratio was 7.20%, while the total risk-based capital ratio was 12.42%. Tangible book value per share was $21.18 at March 31, 2024, an increase of 1.5% from the prior quarter and 10.1% from the prior year.
Credit Quality
- Net charge-offs totaled $4.1 million, representing 0.12% of average loans in the first quarter
- Provision for credit losses for loans HFI was $7.7 million in the first quarter
- Allowance for credit losses (ACL) represented 1.10% of loans HFI and 235.29% of nonaccrual loans, excluding individually analyzed loans at March 31, 2024
Nonaccrual loans totaled $98.4 million at March 31, 2024, down $1.7 million from the prior quarter and an increase of $26.0 million year-over-year. Other real estate totaled $7.6 million, reflecting increases of $753 thousand and $5.9 million from the prior quarter and prior year, respectively. Collectively, nonperforming assets totaled $106.0 million, representing 0.80% of loans HFI and held for sale (HFS) at March 31, 2024.
The provision for credit losses for loans HFI was $7.7 million in the first quarter and was primarily attributable to loan growth, changes in the macroeconomic forecast, and net adjustments to the qualitative factors. The provision for credit losses for off-balance sheet credit exposures was a negative $192 thousand in the first quarter. Collectively, the provision for credit losses totaled $7.5 million in the first quarter compared to $6.7 million in the prior quarter and $1.0 million in the first quarter of 2023.
Allocation of Trustmark's $143.0 million ACL on loans HFI represented 0.93% of commercial loans and 1.63% of consumer and home mortgage loans, resulting in an ACL to total loans HFI of 1.10% at March 31, 2024. Management believes the level of the ACL is commensurate with the credit losses currently expected in the loan portfolio.
Revenue Generation
- Net interest income (FTE) totaled $136.2 million in the first quarter, down 2.8% linked-quarter
- Net interest margin totaled 3.21% in the first quarter, down 4 basis points from the prior quarter
- Noninterest income increased 11.1% linked-quarter to total $55.3 million, reflecting growth in mortgage banking, insurance, other income, and wealth management revenue
Revenue in the first quarter totaled $188.2 million, an increase of 0.9% from the prior quarter and a decrease of 0.4% from the same quarter in the prior year. The linked-quarter increase primarily reflects higher noninterest income offset in part by lower net interest income while the year-over-year decrease is attributed to lower net interest income offset in part by growth in noninterest income.
Net interest income (FTE) in the first quarter totaled $136.2 million, resulting in a net interest margin of 3.21%, down 4 basis points from the prior quarter. The decrease in the net interest margin was primarily due to increased costs of interest-bearing liabilities.
Noninterest income in the first quarter totaled $55.3 million, an increase of $5.5 million, or 11.1%, from the prior quarter and $4.0 million, or 7.7%, year-over-year. The linked-quarter increases in mortgage banking, insurance, other income, and wealth management revenue were offset in part by declines in bank card and other fees and service charges on deposit accounts. The increase in noninterest income year-over-year is broad-based, reflecting increases in mortgage banking, insurance, other income, service charges of deposit accounts and wealth management revenue which were offset in part by declines in bank card and other fees.
Mortgage loan production in the first quarter totaled $274.0 million, up 0.8% from the prior quarter and down 24.1% year-over-year. Mortgage banking revenue totaled $8.9 million in the first quarter, an increase of $3.4 million linked-quarter and $1.3 million year-over-year. The linked-quarter increase was principally attributable to increased gain on sales of mortgage loans, improvement in net negative hedge ineffectiveness, and reduced servicing asset amortization. The year-over-year increase was principally due to increased gain on sales of mortgage loans.
Insurance revenue totaled $15.5 million in the first quarter, up $2.3 million, or 17.2%, from the prior quarter and $1.2 million, or 8.1%, year-over-year. The linked-quarter and year-over-year increases primarily reflected growth in commercial property and casualty commissions. Wealth management revenue in the first quarter totaled $9.0 million, an increase of $295 thousand, or 3.4%, from the prior quarter and $172 thousand, or 2.0%, year-over-year. The linked-quarter growth reflected higher trust management revenue while the year-over-year growth reflected increased brokerage revenue.
Other income, net totaled $3.6 million in the first quarter, up $1.1 million from both the prior quarter and year-over-year. Service charges on deposit accounts totaled $11.0 million in the first quarter, reflecting a seasonal decrease of $353 thousand, or 3.1%, from the prior quarter and an increase of $622 thousand, or 6.0%, year-over-year. Bank card and other fees totaled $7.4 million in the first quarter, down $1.1 million from the prior quarter due principally to lower customer derivative revenue. Year-over-year, bank card and other fees declined $375 thousand.
Noninterest Expense
- Total noninterest expense declined $5.3 million, or 3.9%, linked-quarter
- Salary and employee benefit expense declined $2.5 million, or 3.3%, linked-quarter
- Total services and fees declined $3.1 million, or 11.0%, linked-quarter
Noninterest expense in the first quarter totaled $131.1 million, a decrease of $5.3 million, or 3.9%, from the prior quarter and an increase of $2.8 million, or 2.2%, year-over-year. Salary and employee benefit expense totaled $75.5 million in the first quarter, a decline of $2.5 million, or 3.3%, linked-quarter and an increase of $1.4 million, or 1.9%, year-over-year. The linked-quarter decline reflected reductions in incentives, severance, medical insurance, and salary expense, which were offset in part by a seasonal increase in payroll taxes and restricted stock compensation expense. Services and fees in the first quarter totaled $24.8 million, a decrease of $3.1 million, or 11.0%, from the prior quarter and $587 thousand, or 2.3%, year-over-year. The linked-quarter decline is attributable principally to lower professional fees and data processing software expense.
Additional Information
As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, April 24, 2024, at 8:30 a.m. Central Time to discuss the Corporation's financial results. Interested parties may listen to the conference call by dialing (877) 317-3051 or by clicking on the link provided under the Investor Relations section of our website at www.trustmark.com. A replay of the conference call will also be available through Wednesday, May 8, 2024, in archived format at the same web address or by calling (877) 344-7529, passcode 4820621.
Trustmark is a financial services company providing banking and financial solutions through offices in Alabama, Florida, Georgia, Mississippi, Tennessee and Texas.
Forward-Looking Statements
Certain statements contained in this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by words such as "may," "hope," "will," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "project," "potential," "seek," "continue," "could," "would," "future" or the negative of those terms or other words of similar meaning. You should read statements that contain these words carefully because they discuss our future expectations or state other "forward-looking" information. 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, 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. You should be aware that the occurrence of the events described under the caption "Risk Factors" in Trustmark's filings with the Securities and Exchange Commission (SEC) could have an adverse effect on our business, results of operations and financial condition. 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.
Risks that could cause actual results to differ materially from current expectations of Management include, but are not limited to, actions by the Board of Governors of the Federal Reserve System (FRB) that impact the level of market interest rates, local, state, national and international economic and market conditions, conditions in the housing and real estate markets in the regions in which Trustmark operates and the extent and duration of the current volatility in the credit and financial markets, changes in the level of nonperforming assets and charge-offs, an increase in unemployment levels and slowdowns in economic growth, changes in our ability to measure the fair value of assets in our portfolio, material changes in the level and/or volatility of market interest rates, the impacts related to or resulting from bank failures and other economic and industry volatility, including potential increased regulatory requirements, the demand for the products and services we offer, potential unexpected adverse outcomes in pending litigation matters, our ability to attract and retain noninterest-bearing deposits and other low-cost funds, competition in loan and deposit pricing, as well as the entry of new competitors into our markets through de novo expansion and acquisitions, economic conditions, changes in accounting standards and practices, including changes in the interpretation of existing standards, that affect our consolidated financial statements, changes in consumer spending, borrowings and savings habits, technological changes, changes in the financial performance or condition of our borrowers, greater than expected costs or difficulties related to the integration of acquisitions or new products and lines of business, cyber-attacks and other breaches which could affect our information system security, natural disasters, environmental disasters, pandemics or other health crises, acts of war or terrorism, and other risks described in our filings with the SEC.
Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Except as required by law, we undertake no obligation to update or revise any of this information, whether as the result of new information, future events or developments or otherwise.
| TRUSTMARK CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||||||||
| March 31, 2024 | |||||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||
| Linked Quarter | Year over Year | ||||||||||||||||||||||||
| QUARTERLY AVERAGE BALANCES | 3/31/2024 | 12/31/2023 | 3/31/2023 | $ Change | % Change | $ Change | % Change | ||||||||||||||||||
| Securities AFS-taxable | $ | 1,927,619 | $ | 1,986,825 | $ | 2,187,121 | $ | (59,206 | ) | -3.0 | % | $ | (259,502 | ) | -11.9 | % | |||||||||
| Securities AFS-nontaxable | - | 4,246 | 4,812 | (4,246 | ) | -100.0 | % | (4,812 | ) | -100.0 | % | ||||||||||||||
| Securities HTM-taxable | 1,418,476 | 1,430,169 | 1,479,283 | (11,693 | ) | -0.8 | % | (60,807 | ) | -4.1 | % | ||||||||||||||
| Securities HTM-nontaxable | 340 | 340 | 4,509 | - | 0.0 | % | (4,169 | ) | -92.5 | % | |||||||||||||||
| Total securities | 3,346,435 | 3,421,580 | 3,675,725 | (75,145 | ) | -2.2 | % | (329,290 | ) | -9.0 | % | ||||||||||||||
| Loans (includes loans held for sale) | 13,169,805 | 13,010,028 | 12,530,449 | 159,777 | 1.2 | % | 639,356 | 5.1 | % | ||||||||||||||||
| Fed funds sold and reverse repurchases | 114 | 121 | 2,379 | (7 | ) | -5.8 | % | (2,265 | ) | -95.2 | % | ||||||||||||||
| Other earning assets | 571,215 | 670,477 | 647,760 | (99,262 | ) | -14.8 | % | (76,545 | ) | -11.8 | % | ||||||||||||||
| Total earning assets | 17,087,569 | 17,102,206 | 16,856,313 | (14,637 | ) | -0.1 | % | 231,256 | 1.4 | % | |||||||||||||||
| Allowance for credit losses (ACL), loans held for investment (LHFI) | (138,711 | ) | (133,742 | ) | (119,978 | ) | (4,969 | ) | -3.7 | % | (18,733 | ) | -15.6 | % | |||||||||||
| Other assets | 1,730,521 | 1,749,069 | 1,762,449 | (18,548 | ) | -1.1 | % | (31,928 | ) | -1.8 | % | ||||||||||||||
| Total assets | $ | 18,679,379 | $ | 18,717,533 | $ | 18,498,784 | $ | (38,154 | ) | -0.2 | % | $ | 180,595 | 1.0 | % | ||||||||||
| Interest-bearing demand deposits | $ | 5,291,779 | $ | 5,053,935 | $ | 4,751,154 | $ | 237,844 | 4.7 | % | $ | 540,625 | 11.4 | % | |||||||||||
| Savings deposits | 3,686,027 | 3,526,600 | 4,193,764 | 159,427 | 4.5 | % | (507,737 | ) | -12.1 | % | |||||||||||||||
| Time deposits | 3,321,601 | 3,427,384 | 1,907,449 | (105,783 | ) | -3.1 | % | 1,414,152 | 74.1 | % | |||||||||||||||
| Total interest-bearing deposits | 12,299,407 | 12,007,919 | 10,852,367 | 291,488 | 2.4 | % | 1,447,040 | 13.3 | % | ||||||||||||||||
| Fed funds purchased and repurchases | 428,127 | 403,041 | 436,535 | 25,086 | 6.2 | % | (8,408 | ) | -1.9 | % | |||||||||||||||
| Other borrowings | 463,459 | 590,765 | 1,110,843 | (127,306 | ) | -21.5 | % | (647,384 | ) | -58.3 | % | ||||||||||||||
| Subordinated notes | 123,501 | 123,446 | 123,281 | 55 | 0.0 | % | 220 | 0.2 | % | ||||||||||||||||
| Junior subordinated debt securities | 61,856 | 61,856 | 61,856 | - | 0.0 | % | - | 0.0 | % | ||||||||||||||||
| Total interest-bearing liabilities | 13,376,350 | 13,187,027 | 12,584,882 | 189,323 | 1.4 | % | 791,468 | 6.3 | % | ||||||||||||||||
| Noninterest-bearing deposits | 3,120,566 | 3,296,351 | 3,813,248 | (175,785 | ) | -5.3 | % | (692,682 | ) | -18.2 | % | ||||||||||||||
| Other liabilities | 505,942 | 641,662 | 576,826 | (135,720 | ) | -21.2 | % | (70,884 | ) | -12.3 | % | ||||||||||||||
| Total liabilities | 17,002,858 | 17,125,040 | 16,974,956 | (122,182 | ) | -0.7 | % | 27,902 | 0.2 | % | |||||||||||||||
| Shareholders' equity | 1,676,521 | 1,592,493 | 1,523,828 | 84,028 | 5.3 | % | 152,693 | 10.0 | % | ||||||||||||||||
| Total liabilities and equity | $ | 18,679,379 | $ | 18,717,533 | $ | 18,498,784 | $ | (38,154 | ) | -0.2 | % | $ | 180,595 | 1.0 | % | ||||||||||
| n/m - percentage changes greater than +/- 100% are considered not meaningful |
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||||||||
| March 31, 2024 | |||||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||
| Linked Quarter | Year over Year | ||||||||||||||||||||||||
| PERIOD END BALANCES | 3/31/2024 | 12/31/2023 | 3/31/2023 | $ Change | % Change | $ Change | % Change | ||||||||||||||||||
| Cash and due from banks | $ | 606,261 | $ | 975,543 | $ | 1,297,144 | $ | (369,282 | ) | -37.9 | % | $ | (690,883 | ) | -53.3 | % | |||||||||
| Securities available for sale | 1,702,299 | 1,762,878 | 1,984,162 | (60,579 | ) | -3.4 | % | (281,863 | ) | -14.2 | % | ||||||||||||||
| Securities held to maturity | 1,415,025 | 1,426,279 | 1,474,338 | (11,254 | ) | -0.8 | % | (59,313 | ) | -4.0 | % | ||||||||||||||
| Loans held for sale (LHFS) | 172,937 | 184,812 | 175,926 | (11,875 | ) | -6.4 | % | (2,989 | ) | -1.7 | % | ||||||||||||||
| Loans held for investment (LHFI) | 13,057,943 | 12,950,524 | 12,497,195 | 107,419 | 0.8 | % | 560,748 | 4.5 | % | ||||||||||||||||
| ACL LHFI | (142,998 | ) | (139,367 | ) | (122,239 | ) | (3,631 | ) | -2.6 | % | (20,759 | ) | -17.0 | % | |||||||||||
| Net LHFI | 12,914,945 | 12,811,157 | 12,374,956 | 103,788 | 0.8 | % | 539,989 | 4.4 | % | ||||||||||||||||
| Premises and equipment, net | 232,924 | 232,537 | 223,975 | 387 | 0.2 | % | 8,949 | 4.0 | % | ||||||||||||||||
| Mortgage servicing rights | 138,044 | 131,870 | 127,206 | 6,174 | 4.7 | % | 10,838 | 8.5 | % | ||||||||||||||||
| Goodwill | 384,237 | 384,237 | 384,237 | - | 0.0 | % | - | 0.0 | % | ||||||||||||||||
| Identifiable intangible assets | 2,845 | 2,965 | 3,352 | (120 | ) | -4.0 | % | (507 | ) | -15.1 | % | ||||||||||||||
| Other real estate | 7,620 | 6,867 | 1,684 | 753 | 11.0 | % | 5,936 | n/m | |||||||||||||||||
| Operating lease right-of-use assets | 36,659 | 38,142 | 35,315 | (1,483 | ) | -3.9 | % | 1,344 | 3.8 | % | |||||||||||||||
| Other assets | 762,816 | 764,902 | 794,883 | (2,086 | ) | -0.3 | % | (32,067 | ) | -4.0 | % | ||||||||||||||
| Total assets | $ | 18,376,612 | $ | 18,722,189 | $ | 18,877,178 | $ | (345,577 | ) | -1.8 | % | $ | (500,566 | ) | -2.7 | % | |||||||||
| Deposits: | |||||||||||||||||||||||||
| Noninterest-bearing | $ | 3,039,652 | $ | 3,197,620 | $ | 3,797,055 | $ | (157,968 | ) | -4.9 | % | $ | (757,403 | ) | -19.9 | % | |||||||||
| Interest-bearing | 12,298,905 | 12,372,143 | 10,986,606 | (73,238 | ) | -0.6 | % | 1,312,299 | 11.9 | % | |||||||||||||||
| Total deposits | 15,338,557 | 15,569,763 | 14,783,661 | (231,206 | ) | -1.5 | % | 554,896 | 3.8 | % | |||||||||||||||
| Fed funds purchased and repurchases | 393,215 | 405,745 | 477,980 | (12,530 | ) | -3.1 | % | (84,765 | ) | -17.7 | % | ||||||||||||||
| Other borrowings | 482,027 | 483,230 | 1,485,181 | (1,203 | ) | -0.2 | % | (1,003,154 | ) | -67.5 | % | ||||||||||||||
| Subordinated notes | 123,537 | 123,482 | 123,317 | 55 | 0.0 | % | 220 | 0.2 | % | ||||||||||||||||
| Junior subordinated debt securities | 61,856 | 61,856 | 61,856 | - | 0.0 | % | - | 0.0 | % | ||||||||||||||||
| ACL on off-balance sheet credit exposures | 33,865 | 34,057 | 34,596 | (192 | ) | -0.6 | % | (731 | ) | -2.1 | % | ||||||||||||||
| Operating lease liabilities | 40,185 | 41,584 | 37,988 | (1,399 | ) | -3.4 | % | 2,197 | 5.8 | % | |||||||||||||||
| Other liabilities | 220,771 | 340,625 | 310,500 | (119,854 | ) | -35.2 | % | (89,729 | ) | -28.9 | % | ||||||||||||||
| Total liabilities | 16,694,013 | 17,060,342 | 17,315,079 | (366,329 | ) | -2.1 | % | (621,066 | ) | -3.6 | % | ||||||||||||||
| Common stock | 12,747 | 12,725 | 12,720 | 22 | 0.2 | % | 27 | 0.2 | % | ||||||||||||||||
| Capital surplus | 160,521 | 159,688 | 155,297 | 833 | 0.5 | % | 5,224 | 3.4 | % | ||||||||||||||||
| Retained earnings | 1,736,485 | 1,709,157 | 1,636,463 | 27,328 | 1.6 | % | 100,022 | 6.1 | % | ||||||||||||||||
| Accumulated other comprehensive | |||||||||||||||||||||||||
| income (loss), net of tax | (227,154 | ) | (219,723 | ) | (242,381 | ) | (7,431 | ) | -3.4 | % | 15,227 | 6.3 | % | ||||||||||||
| Total shareholders' equity | 1,682,599 | 1,661,847 | 1,562,099 | 20,752 | 1.2 | % | 120,500 | 7.7 | % | ||||||||||||||||
| Total liabilities and equity | $ | 18,376,612 | $ | 18,722,189 | $ | 18,877,178 | $ | (345,577 | ) | -1.8 | % | $ | (500,566 | ) | -2.7 | % | |||||||||
| n/m - percentage changes greater than +/- 100% are considered not meaningful |
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||||||||
| March 31, 2024 | |||||||||||||||||||||||||
| ($ in thousands except per share data) | |||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||
| Quarter Ended | Linked Quarter | Year over Year | |||||||||||||||||||||||
| INCOME STATEMENTS | 3/31/2024 | 12/31/2023 | 3/31/2023 | $ Change | % Change | $ Change | % Change | ||||||||||||||||||
| Interest and fees on LHFS & LHFI-FTE | $ | 209,456 | $ | 210,288 | $ | 178,967 | $ | (832 | ) | -0.4 | % | $ | 30,489 | 17.0 | % | ||||||||||
| Interest on securities-taxable | 15,634 | 15,936 | 16,761 | (302 | ) | -1.9 | % | (1,127 | ) | -6.7 | % | ||||||||||||||
| Interest on securities-tax exempt-FTE | 4 | 44 | 92 | (40 | ) | -90.9 | % | (88 | ) | -95.7 | % | ||||||||||||||
| Interest on fed funds sold and reverse repurchases | 1 | 2 | 30 | (1 | ) | -50.0 | % | (29 | ) | -96.7 | % | ||||||||||||||
| Other interest income | 8,110 | 9,918 | 6,527 | (1,808 | ) | -18.2 | % | 1,583 | 24.3 | % | |||||||||||||||
| Total interest income-FTE | 233,205 | 236,188 | 202,377 | (2,983 | ) | -1.3 | % | 30,828 | 15.2 | % | |||||||||||||||
| Interest on deposits | 83,716 | 80,847 | 40,898 | 2,869 | 3.5 | % | 42,818 | n/m | |||||||||||||||||
| Interest on fed funds purchased and repurchases | 5,591 | 5,347 | 4,832 | 244 | 4.6 | % | 759 | 15.7 | % | ||||||||||||||||
| Other interest expense | 7,703 | 9,946 | 15,575 | (2,243 | ) | -22.6 | % | (7,872 | ) | -50.5 | % | ||||||||||||||
| Total interest expense | 97,010 | 96,140 | 61,305 | 870 | 0.9 | % | 35,705 | 58.2 | % | ||||||||||||||||
| Net interest income-FTE | 136,195 | 140,048 | 141,072 | (3,853 | ) | -2.8 | % | (4,877 | ) | -3.5 | % | ||||||||||||||
| Provision for credit losses, LHFI | 7,708 | 7,585 | 3,244 | 123 | 1.6 | % | 4,464 | n/m | |||||||||||||||||
| Provision for credit losses, off-balance sheet credit exposures | (192 | ) | (888 | ) | (2,242 | ) | 696 | 78.4 | % | 2,050 | 91.4 | % | |||||||||||||
| Net interest income after provision-FTE | 128,679 | 133,351 | 140,070 | (4,672 | ) | -3.5 | % | (11,391 | ) | -8.1 | % | ||||||||||||||
| Service charges on deposit accounts | 10,958 | 11,311 | 10,336 | (353 | ) | -3.1 | % | 622 | 6.0 | % | |||||||||||||||
| Bank card and other fees | 7,428 | 8,502 | 7,803 | (1,074 | ) | -12.6 | % | (375 | ) | -4.8 | % | ||||||||||||||
| Mortgage banking, net | 8,915 | 5,519 | 7,639 | 3,396 | 61.5 | % | 1,276 | 16.7 | % | ||||||||||||||||
| Insurance commissions | 15,464 | 13,197 | 14,305 | 2,267 | 17.2 | % | 1,159 | 8.1 | % | ||||||||||||||||
| Wealth management | 8,952 | 8,657 | 8,780 | 295 | 3.4 | % | 172 | 2.0 | % | ||||||||||||||||
| Other, net | 3,632 | 2,579 | 2,514 | 1,053 | 40.8 | % | 1,118 | 44.5 | % | ||||||||||||||||
| Securities gains (losses), net | - | 39 | - | (39 | ) | -100.0 | % | - | n/m | ||||||||||||||||
| Total noninterest income | 55,349 | 49,804 | 51,377 | 5,545 | 11.1 | % | 3,972 | 7.7 | % | ||||||||||||||||
| Salaries and employee benefits | 75,458 | 78,003 | 74,056 | (2,545 | ) | -3.3 | % | 1,402 | 1.9 | % | |||||||||||||||
| Services and fees | 24,839 | 27,906 | 25,426 | (3,067 | ) | -11.0 | % | (587 | ) | -2.3 | % | ||||||||||||||
| Net occupancy-premises | 7,496 | 7,362 | 7,629 | 134 | 1.8 | % | (133 | ) | -1.7 | % | |||||||||||||||
| Equipment expense | 6,385 | 6,517 | 6,405 | (132 | ) | -2.0 | % | (20 | ) | -0.3 | % | ||||||||||||||
| Other expense | 16,968 | 16,641 | 14,811 | 327 | 2.0 | % | 2,157 | 14.6 | % | ||||||||||||||||
| Total noninterest expense | 131,146 | 136,429 | 128,327 | (5,283 | ) | -3.9 | % | 2,819 | 2.2 | % | |||||||||||||||
| Income before income taxes and tax eq adj | 52,882 | 46,726 | 63,120 | 6,156 | 13.2 | % | (10,238 | ) | -16.2 | % | |||||||||||||||
| Tax equivalent adjustment | 3,365 | 3,306 | 3,477 | 59 | 1.8 | % | (112 | ) | -3.2 | % | |||||||||||||||
| Income before income taxes | 49,517 | 43,420 | 59,643 | 6,097 | 14.0 | % | (10,126 | ) | -17.0 | % | |||||||||||||||
| Income taxes | 7,982 | 7,297 | 9,343 | 685 | 9.4 | % | (1,361 | ) | -14.6 | % | |||||||||||||||
| Net income | $ | 41,535 | $ | 36,123 | $ | 50,300 | $ | 5,412 | 15.0 | % | $ | (8,765 | ) | -17.4 | % | ||||||||||
| Per share data | |||||||||||||||||||||||||
| Earnings per share - basic | $ | 0.68 | $ | 0.59 | $ | 0.82 | $ | 0.09 | 15.3 | % | $ | (0.14 | ) | -17.1 | % | ||||||||||
| Earnings per share - diluted | $ | 0.68 | $ | 0.59 | $ | 0.82 | $ | 0.09 | 15.3 | % | $ | (0.14 | ) | -17.1 | % | ||||||||||
| Dividends per share | $ | 0.23 | $ | 0.23 | $ | 0.23 | - | 0.0 | % | - | 0.0 | % | |||||||||||||
| Weighted average shares outstanding | |||||||||||||||||||||||||
| Basic | 61,128,425 | 61,070,481 | 61,011,059 | ||||||||||||||||||||||
| Diluted | 61,348,364 | 61,296,840 | 61,193,275 | ||||||||||||||||||||||
| Period end shares outstanding | 61,178,366 | 61,071,173 | 61,048,516 | ||||||||||||||||||||||
| n/m - percentage changes greater than +/- 100% are considered not meaningful |
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||||||||
| March 31, 2024 | |||||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||
| Quarter Ended | Linked Quarter | Year over Year | |||||||||||||||||||||||
| NONPERFORMING ASSETS | 3/31/2024 | 12/31/2023 | 3/31/2023 | $ Change | % Change | $ Change | % Change | ||||||||||||||||||
| Nonaccrual LHFI | |||||||||||||||||||||||||
| Alabama (1) | $ | 23,261 | $ | 23,271 | $ | 10,919 | $ | (10 | ) | 0.0 | % | $ | 12,342 | n/m | |||||||||||
| Florida | 585 | 170 | 256 | 415 | n/m | 329 | n/m | ||||||||||||||||||
| Mississippi (2) | 59,059 | 54,615 | 32,560 | 4,444 | 8.1 | % | 26,499 | 81.4 | % | ||||||||||||||||
| Tennessee (3) | 1,800 | 1,802 | 5,416 | (2 | ) | -0.1 | % | (3,616 | ) | -66.8 | % | ||||||||||||||
| Texas | 13,646 | 20,150 | 23,224 | (6,504 | ) | -32.3 | % | (9,578 | ) | -41.2 | % | ||||||||||||||
| Total nonaccrual LHFI | 98,351 | 100,008 | 72,375 | (1,657 | ) | -1.7 | % | 25,976 | 35.9 | % | |||||||||||||||
| Other real estate | |||||||||||||||||||||||||
| Alabama (1) | 1,050 | 1,397 | - | (347 | ) | -24.8 | % | 1,050 | n/m | ||||||||||||||||
| Florida | 71 | - | - | 71 | n/m | 71 | n/m | ||||||||||||||||||
| Mississippi (2) | 2,870 | 1,242 | 1,495 | 1,628 | n/m | 1,375 | 92.0 | % | |||||||||||||||||
| Tennessee (3) | 86 | - | 189 | 86 | n/m | (103 | ) | -54.5 | % | ||||||||||||||||
| Texas | 3,543 | 4,228 | - | (685 | ) | -16.2 | % | 3,543 | n/m | ||||||||||||||||
| Total other real estate | 7,620 | 6,867 | 1,684 | 753 | 11.0 | % | 5,936 | n/m | |||||||||||||||||
| Total nonperforming assets | $ | 105,971 | $ | 106,875 | $ | 74,059 | $ | (904 | ) | -0.8 | % | $ | 31,912 | 43.1 | % | ||||||||||
| LOANS PAST DUE OVER 90 DAYS | |||||||||||||||||||||||||
| LHFI | $ | 5,243 | $ | 5,790 | $ | 2,255 | $ | (547 | ) | -9.4 | % | $ | 2,988 | n/m | |||||||||||
| LHFS-Guaranteed GNMA serviced loans | |||||||||||||||||||||||||
| (no obligation to repurchase) | $ | 56,530 | $ | 51,243 | $ | 41,468 | $ | 5,287 | 10.3 | % | $ | 15,062 | 36.3 | % | |||||||||||
| Quarter Ended | Linked Quarter | Year over Year | |||||||||||||||||||||||
| ACL LHFI | 3/31/2024 | 12/31/2023 | 3/31/2023 | $ Change | % Change | $ Change | % Change | ||||||||||||||||||
| Beginning Balance | $ | 139,367 | $ | 134,031 | $ | 120,214 | $ | 5,336 | 4.0 | % | $ | 19,153 | 15.9 | % | |||||||||||
| Provision for credit losses, LHFI | 7,708 | 7,585 | 3,244 | 123 | 1.6 | % | 4,464 | n/m | |||||||||||||||||
| Charge-offs | (6,324 | ) | (4,250 | ) | (2,996 | ) | (2,074 | ) | -48.8 | % | (3,328 | ) | n/m | ||||||||||||
| Recoveries | 2,247 | 2,001 | 1,777 | 246 | 12.3 | % | 470 | 26.4 | % | ||||||||||||||||
| Net (charge-offs) recoveries | (4,077 | ) | (2,249 | ) | (1,219 | ) | (1,828 | ) | -81.3 | % | (2,858 | ) | n/m | ||||||||||||
| Ending Balance | $ | 142,998 | $ | 139,367 | $ | 122,239 | $ | 3,631 | 2.6 | % | $ | 20,759 | 17.0 | % | |||||||||||
| NET (CHARGE-OFFS) RECOVERIES | |||||||||||||||||||||||||
| Alabama (1) | $ | (341 | ) | $ | (299 | ) | $ | (268 | ) | $ | (42 | ) | -14.0 | % | $ | (73 | ) | -27.2 | % | ||||||
| Florida | 277 | 180 | (36 | ) | 97 | 53.9 | % | 313 | n/m | ||||||||||||||||
| Mississippi (2) | (1,489 | ) | (1,943 | ) | (775 | ) | 454 | 23.4 | % | (714 | ) | -92.1 | % | ||||||||||||
| Tennessee (3) | (179 | ) | (193 | ) | (124 | ) | 14 | 7.3 | % | (55 | ) | -44.4 | % | ||||||||||||
| Texas | (2,345 | ) | 6 | (16 | ) | (2,351 | ) | n/m | (2,329 | ) | n/m | ||||||||||||||
| Total net (charge-offs) recoveries | $ | (4,077 | ) | $ | (2,249 | ) | $ | (1,219 | ) | $ | (1,828 | ) | -81.3 | % | $ | (2,858 | ) | n/m | |||||||
| (1) Alabama includes the Georgia Loan Production Office. |
| (2) Mississippi includes Central and Southern Mississippi Regions. |
| (3) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions. |
| n/m - percentage changes greater than +/- 100% are considered not meaningful |
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||||||
| March 31, 2024 | ||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||
| AVERAGE BALANCES | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | |||||||||||||||
| Securities AFS-taxable | $ | 1,927,619 | $ | 1,986,825 | $ | 2,049,006 | $ | 2,140,505 | $ | 2,187,121 | ||||||||||
| Securities AFS-nontaxable | - | 4,246 | 4,779 | 4,796 | 4,812 | |||||||||||||||
| Securities HTM-taxable | 1,418,476 | 1,430,169 | 1,445,895 | 1,463,086 | 1,479,283 | |||||||||||||||
| Securities HTM-nontaxable | 340 | 340 | 907 | 1,718 | 4,509 | |||||||||||||||
| Total securities | 3,346,435 | 3,421,580 | 3,500,587 | 3,610,105 | 3,675,725 | |||||||||||||||
| Loans (includes loans held for sale) | 13,169,805 | 13,010,028 | 12,926,942 | 12,732,057 | 12,530,449 | |||||||||||||||
| Fed funds sold and reverse repurchases | 114 | 121 | 230 | 3,275 | 2,379 | |||||||||||||||
| Other earning assets | 571,215 | 670,477 | 682,644 | 903,027 | 647,760 | |||||||||||||||
| Total earning assets | 17,087,569 | 17,102,206 | 17,110,403 | 17,248,464 | 16,856,313 | |||||||||||||||
| ACL LHFI | (138,711 | ) | (133,742 | ) | (127,915 | ) | (121,960 | ) | (119,978 | ) | ||||||||||
| Other assets | 1,730,521 | 1,749,069 | 1,721,310 | 1,648,583 | 1,762,449 | |||||||||||||||
| Total assets | $ | 18,679,379 | $ | 18,717,533 | $ | 18,703,798 | $ | 18,775,087 | $ | 18,498,784 | ||||||||||
| Interest-bearing demand deposits | $ | 5,291,779 | $ | 5,053,935 | $ | 4,875,714 | $ | 4,803,737 | $ | 4,751,154 | ||||||||||
| Savings deposits | 3,686,027 | 3,526,600 | 3,642,158 | 4,002,134 | 4,193,764 | |||||||||||||||
| Time deposits | 3,321,601 | 3,427,384 | 3,075,224 | 2,335,752 | 1,907,449 | |||||||||||||||
| Total interest-bearing deposits | 12,299,407 | 12,007,919 | 11,593,096 | 11,141,623 | 10,852,367 | |||||||||||||||
| Fed funds purchased and repurchases | 428,127 | 403,041 | 414,696 | 389,834 | 436,535 | |||||||||||||||
| Other borrowings | 463,459 | 590,765 | 912,151 | 1,330,010 | 1,110,843 | |||||||||||||||
| Subordinated notes | 123,501 | 123,446 | 123,391 | 123,337 | 123,281 | |||||||||||||||
| Junior subordinated debt securities | 61,856 | 61,856 | 61,856 | 61,856 | 61,856 | |||||||||||||||
| Total interest-bearing liabilities | 13,376,350 | 13,187,027 | 13,105,190 | 13,046,660 | 12,584,882 | |||||||||||||||
| Noninterest-bearing deposits | 3,120,566 | 3,296,351 | 3,429,815 | 3,595,927 | 3,813,248 | |||||||||||||||
| Other liabilities | 505,942 | 641,662 | 585,908 | 552,209 | 576,826 | |||||||||||||||
| Total liabilities | 17,002,858 | 17,125,040 | 17,120,913 | 17,194,796 | 16,974,956 | |||||||||||||||
| Shareholders' equity | 1,676,521 | 1,592,493 | 1,582,885 | 1,580,291 | 1,523,828 | |||||||||||||||
| Total liabilities and equity | $ | 18,679,379 | $ | 18,717,533 | $ | 18,703,798 | $ | 18,775,087 | $ | 18,498,784 | ||||||||||
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||||||
| March 31, 2024 | ||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| PERIOD END BALANCES | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | |||||||||||||||
| Cash and due from banks | $ | 606,261 | $ | 975,543 | $ | 750,492 | $ | 832,052 | $ | 1,297,144 | ||||||||||
| Securities available for sale | 1,702,299 | 1,762,878 | 1,766,174 | 1,871,883 | 1,984,162 | |||||||||||||||
| Securities held to maturity | 1,415,025 | 1,426,279 | 1,438,287 | 1,458,665 | 1,474,338 | |||||||||||||||
| LHFS | 172,937 | 184,812 | 169,244 | 181,094 | 175,926 | |||||||||||||||
| LHFI | 13,057,943 | 12,950,524 | 12,810,259 | 12,613,967 | 12,497,195 | |||||||||||||||
| ACL LHFI | (142,998 | ) | (139,367 | ) | (134,031 | ) | (129,298 | ) | (122,239 | ) | ||||||||||
| Net LHFI | 12,914,945 | 12,811,157 | 12,676,228 | 12,484,669 | 12,374,956 | |||||||||||||||
| Premises and equipment, net | 232,924 | 232,537 | 230,718 | 227,630 | 223,975 | |||||||||||||||
| Mortgage servicing rights | 138,044 | 131,870 | 142,379 | 134,350 | 127,206 | |||||||||||||||
| Goodwill | 384,237 | 384,237 | 384,237 | 384,237 | 384,237 | |||||||||||||||
| Identifiable intangible assets | 2,845 | 2,965 | 3,093 | 3,222 | 3,352 | |||||||||||||||
| Other real estate | 7,620 | 6,867 | 5,485 | 1,137 | 1,684 | |||||||||||||||
| Operating lease right-of-use assets | 36,659 | 38,142 | 39,639 | 38,179 | 35,315 | |||||||||||||||
| Other assets | 762,816 | 764,902 | 784,863 | 805,508 | 794,883 | |||||||||||||||
| Total assets | $ | 18,376,612 | $ | 18,722,189 | $ | 18,390,839 | $ | 18,422,626 | $ | 18,877,178 | ||||||||||
| Deposits: | ||||||||||||||||||||
| Noninterest-bearing | $ | 3,039,652 | $ | 3,197,620 | $ | 3,320,124 | $ | 3,461,073 | $ | 3,797,055 | ||||||||||
| Interest-bearing | 12,298,905 | 12,372,143 | 11,781,799 | 11,452,827 | 10,986,606 | |||||||||||||||
| Total deposits | 15,338,557 | 15,569,763 | 15,101,923 | 14,913,900 | 14,783,661 | |||||||||||||||
| Fed funds purchased and repurchases | 393,215 | 405,745 | 321,799 | 311,179 | 477,980 | |||||||||||||||
| Other borrowings | 482,027 | 483,230 | 793,193 | 1,056,714 | 1,485,181 | |||||||||||||||
| Subordinated notes | 123,537 | 123,482 | 123,427 | 123,372 | 123,317 | |||||||||||||||
| Junior subordinated debt securities | 61,856 | 61,856 | 61,856 | 61,856 | 61,856 | |||||||||||||||
| ACL on off-balance sheet credit exposures | 33,865 | 34,057 | 34,945 | 34,841 | 34,596 | |||||||||||||||
| Operating lease liabilities | 40,185 | 41,584 | 42,730 | 40,845 | 37,988 | |||||||||||||||
| Other liabilities | 220,771 | 340,625 | 340,615 | 308,726 | 310,500 | |||||||||||||||
| Total liabilities | 16,694,013 | 17,060,342 | 16,820,488 | 16,851,433 | 17,315,079 | |||||||||||||||
| Common stock | 12,747 | 12,725 | 12,724 | 12,724 | 12,720 | |||||||||||||||
| Capital surplus | 160,521 | 159,688 | 158,316 | 156,834 | 155,297 | |||||||||||||||
| Retained earnings | 1,736,485 | 1,709,157 | 1,687,199 | 1,667,339 | 1,636,463 | |||||||||||||||
| Accumulated other comprehensive income (loss), | ||||||||||||||||||||
| net of tax | (227,154 | ) | (219,723 | ) | (287,888 | ) | (265,704 | ) | (242,381 | ) | ||||||||||
| Total shareholders' equity | 1,682,599 | 1,661,847 | 1,570,351 | 1,571,193 | 1,562,099 | |||||||||||||||
| Total liabilities and equity | $ | 18,376,612 | $ | 18,722,189 | $ | 18,390,839 | $ | 18,422,626 | $ | 18,877,178 | ||||||||||
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||||
| March 31, 2024 | ||||||||||||||||||
| ($ in thousands except per share data) | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| Quarter Ended | ||||||||||||||||||
| INCOME STATEMENTS | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | |||||||||||||
| Interest and fees on LHFS & LHFI-FTE | $ | 209,456 | $ | 210,288 | $ | 206,523 | $ | 192,941 | $ | 178,967 | ||||||||
| Interest on securities-taxable | 15,634 | 15,936 | 16,624 | 16,779 | 16,761 | |||||||||||||
| Interest on securities-tax exempt-FTE | 4 | 44 | 58 | 69 | 92 | |||||||||||||
| Interest on fed funds sold and reverse repurchases | 1 | 2 | 3 | 45 | 30 | |||||||||||||
| Other interest income | 8,110 | 9,918 | 8,613 | 12,077 | 6,527 | |||||||||||||
| Total interest income-FTE | 233,205 | 236,188 | 231,821 | 221,911 | 202,377 | |||||||||||||
| Interest on deposits | 83,716 | 80,847 | 69,797 | 54,409 | 40,898 | |||||||||||||
| Interest on fed funds purchased and repurchases | 5,591 | 5,347 | 5,375 | 4,865 | 4,832 | |||||||||||||
| Other interest expense | 7,703 | 9,946 | 14,713 | 19,350 | 15,575 | |||||||||||||
| Total interest expense | 97,010 | 96,140 | 89,885 | 78,624 | 61,305 | |||||||||||||
| Net interest income-FTE | 136,195 | 140,048 | 141,936 | 143,287 | 141,072 | |||||||||||||
| Provision for credit losses, LHFI | 7,708 | 7,585 | 8,322 | 8,211 | 3,244 | |||||||||||||
| Provision for credit losses, off-balance sheet credit exposures | (192 | ) | (888 | ) | 104 | 245 | (2,242 | ) | ||||||||||
| Net interest income after provision-FTE | 128,679 | 133,351 | 133,510 | 134,831 | 140,070 | |||||||||||||
| Service charges on deposit accounts | 10,958 | 11,311 | 11,074 | 10,695 | 10,336 | |||||||||||||
| Bank card and other fees | 7,428 | 8,502 | 8,217 | 8,917 | 7,803 | |||||||||||||
| Mortgage banking, net | 8,915 | 5,519 | 6,458 | 6,600 | 7,639 | |||||||||||||
| Insurance commissions | 15,464 | 13,197 | 15,303 | 14,764 | 14,305 | |||||||||||||
| Wealth management | 8,952 | 8,657 | 8,773 | 8,882 | 8,780 | |||||||||||||
| Other, net | 3,632 | 2,579 | 2,399 | 3,695 | 2,514 | |||||||||||||
| Securities gains (losses), net | - | 39 | - | - | - | |||||||||||||
| Total noninterest income | 55,349 | 49,804 | 52,224 | 53,553 | 51,377 | |||||||||||||
| Salaries and employee benefits | 75,458 | 78,003 | 76,666 | 75,940 | 74,056 | |||||||||||||
| Services and fees | 24,839 | 27,906 | 27,882 | 28,264 | 25,426 | |||||||||||||
| Net occupancy-premises | 7,496 | 7,362 | 7,383 | 7,108 | 7,629 | |||||||||||||
| Equipment expense | 6,385 | 6,517 | 6,816 | 6,404 | 6,405 | |||||||||||||
| Litigation settlement expense | - | - | 6,500 | - | - | |||||||||||||
| Other expense | 16,968 | 16,641 | 15,698 | 14,502 | 14,811 | |||||||||||||
| Total noninterest expense | 131,146 | 136,429 | 140,945 | 132,218 | 128,327 | |||||||||||||
| Income before income taxes and tax eq adj | 52,882 | 46,726 | 44,789 | 56,166 | 63,120 | |||||||||||||
| Tax equivalent adjustment | 3,365 | 3,306 | 3,299 | 3,383 | 3,477 | |||||||||||||
| Income before income taxes | 49,517 | 43,420 | 41,490 | 52,783 | 59,643 | |||||||||||||
| Income taxes | 7,982 | 7,297 | 7,461 | 7,746 | 9,343 | |||||||||||||
| Net income | $ | 41,535 | $ | 36,123 | $ | 34,029 | $ | 45,037 | $ | 50,300 | ||||||||
| Per share data | ||||||||||||||||||
| Earnings per share - basic | $ | 0.68 | $ | 0.59 | $ | 0.56 | $ | 0.74 | $ | 0.82 | ||||||||
| Earnings per share - diluted | $ | 0.68 | $ | 0.59 | $ | 0.56 | $ | 0.74 | $ | 0.82 | ||||||||
| Dividends per share | $ | 0.23 | $ | 0.23 | $ | 0.23 | $ | 0.23 | $ | 0.23 | ||||||||
| Weighted average shares outstanding | ||||||||||||||||||
| Basic | 61,128,425 | 61,070,481 | 61,069,750 | 61,063,277 | 61,011,059 | |||||||||||||
| Diluted | 61,348,364 | 61,296,840 | 61,263,032 | 61,230,031 | 61,193,275 | |||||||||||||
| Period end shares outstanding | 61,178,366 | 61,071,173 | 61,070,095 | 61,069,036 | 61,048,516 | |||||||||||||
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||||||
| March 31, 2024 | ||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||
| NONPERFORMING ASSETS | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | |||||||||||||||
| Nonaccrual LHFI | ||||||||||||||||||||
| Alabama (1) | $ | 23,261 | $ | 23,271 | $ | 23,530 | $ | 11,058 | $ | 10,919 | ||||||||||
| Florida | 585 | 170 | 151 | 334 | 256 | |||||||||||||||
| Mississippi (2) | 59,059 | 54,615 | 45,050 | 36,288 | 32,560 | |||||||||||||||
| Tennessee (3) | 1,800 | 1,802 | 1,841 | 5,088 | 5,416 | |||||||||||||||
| Texas | 13,646 | 20,150 | 20,327 | 22,259 | 23,224 | |||||||||||||||
| Total nonaccrual LHFI | 98,351 | 100,008 | 90,899 | 75,027 | 72,375 | |||||||||||||||
| Other real estate | ||||||||||||||||||||
| Alabama (1) | 1,050 | 1,397 | 315 | - | - | |||||||||||||||
| Florida | 71 | - | - | - | - | |||||||||||||||
| Mississippi (2) | 2,870 | 1,242 | 942 | 1,137 | 1,495 | |||||||||||||||
| Tennessee (3) | 86 | - | - | - | 189 | |||||||||||||||
| Texas | 3,543 | 4,228 | 4,228 | - | - | |||||||||||||||
| Total other real estate | 7,620 | 6,867 | 5,485 | 1,137 | 1,684 | |||||||||||||||
| Total nonperforming assets | $ | 105,971 | $ | 106,875 | $ | 96,384 | $ | 76,164 | $ | 74,059 | ||||||||||
| LOANS PAST DUE OVER 90 DAYS | ||||||||||||||||||||
| LHFI | $ | 5,243 | $ | 5,790 | $ | 3,804 | $ | 3,911 | $ | 2,255 | ||||||||||
| LHFS-Guaranteed GNMA serviced loans | ||||||||||||||||||||
| (no obligation to repurchase) | $ | 56,530 | $ | 51,243 | $ | 42,532 | $ | 35,766 | $ | 41,468 | ||||||||||
| Quarter Ended | ||||||||||||||||||||
| ACL LHFI | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | |||||||||||||||
| Beginning Balance | $ | 139,367 | $ | 134,031 | $ | 129,298 | $ | 122,239 | $ | 120,214 | ||||||||||
| Provision for credit losses, LHFI | 7,708 | 7,585 | 8,322 | 8,211 | 3,244 | |||||||||||||||
| Charge-offs | (6,324 | ) | (4,250 | ) | (7,496 | ) | (2,773 | ) | (2,996 | ) | ||||||||||
| Recoveries | 2,247 | 2,001 | 3,907 | 1,621 | 1,777 | |||||||||||||||
| Net (charge-offs) recoveries | (4,077 | ) | (2,249 | ) | (3,589 | ) | (1,152 | ) | (1,219 | ) | ||||||||||
| Ending Balance | $ | 142,998 | $ | 139,367 | $ | 134,031 | $ | 129,298 | $ | 122,239 | ||||||||||
| NET (CHARGE-OFFS) RECOVERIES | ||||||||||||||||||||
| Alabama (1) | $ | (341 | ) | $ | (299 | ) | $ | (165 | ) | $ | (141 | ) | $ | (268 | ) | |||||
| Florida | 277 | 180 | 21 | (35 | ) | (36 | ) | |||||||||||||
| Mississippi (2) | (1,489 | ) | (1,943 | ) | (1,867 | ) | (762 | ) | (775 | ) | ||||||||||
| Tennessee (3) | (179 | ) | (193 | ) | 2,127 | (166 | ) | (124 | ) | |||||||||||
| Texas | (2,345 | ) | 6 | (3,705 | ) | (48 | ) | (16 | ) | |||||||||||
| Total net (charge-offs) recoveries | $ | (4,077 | ) | $ | (2,249 | ) | $ | (3,589 | ) | $ | (1,152 | ) | $ | (1,219 | ) | |||||
| (1) Alabama includes the Georgia Loan Production Office. |
| (2) Mississippi includes Central and Southern Mississippi Regions. |
| (3) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions. |
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||||||
| March 31, 2024 | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||
| FINANCIAL RATIOS AND OTHER DATA | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | |||||||||||||||
| Return on average equity | 9.96 | % | 9.00 | % | 8.53 | % | 11.43 | % | 13.39 | % | ||||||||||
| Return on average tangible equity | 12.98 | % | 11.92 | % | 11.32 | % | 15.18 | % | 18.03 | % | ||||||||||
| Return on average assets | 0.89 | % | 0.77 | % | 0.72 | % | 0.96 | % | 1.10 | % | ||||||||||
| Interest margin - Yield - FTE | 5.49 | % | 5.48 | % | 5.38 | % | 5.16 | % | 4.87 | % | ||||||||||
| Interest margin - Cost | 2.28 | % | 2.23 | % | 2.08 | % | 1.83 | % | 1.47 | % | ||||||||||
| Net interest margin - FTE | 3.21 | % | 3.25 | % | 3.29 | % | 3.33 | % | 3.39 | % | ||||||||||
| Efficiency ratio (1) | 67.25 | % | 70.25 | % | 68.33 | % | 66.17 | % | 65.60 | % | ||||||||||
| Full-time equivalent employees | 2,712 | 2,757 | 2,756 | 2,761 | 2,758 | |||||||||||||||
| CREDIT QUALITY RATIOS | ||||||||||||||||||||
| Net (recoveries) charge-offs / average loans | 0.12 | % | 0.07 | % | 0.11 | % | 0.04 | % | 0.04 | % | ||||||||||
| Provision for credit losses, LHFI / average loans | 0.24 | % | 0.23 | % | 0.26 | % | 0.26 | % | 0.10 | % | ||||||||||
| Nonaccrual LHFI / (LHFI + LHFS) | 0.74 | % | 0.76 | % | 0.70 | % | 0.59 | % | 0.57 | % | ||||||||||
| Nonperforming assets / (LHFI + LHFS) | 0.80 | % | 0.81 | % | 0.74 | % | 0.60 | % | 0.58 | % | ||||||||||
| Nonperforming assets / (LHFI + LHFS | ||||||||||||||||||||
| + other real estate) | 0.80 | % | 0.81 | % | 0.74 | % | 0.60 | % | 0.58 | % | ||||||||||
| ACL LHFI / LHFI | 1.10 | % | 1.08 | % | 1.05 | % | 1.03 | % | 0.98 | % | ||||||||||
| ACL LHFI-commercial / commercial LHFI | 0.93 | % | 0.85 | % | 0.86 | % | 0.84 | % | 0.80 | % | ||||||||||
| ACL LHFI-consumer / consumer and | ||||||||||||||||||||
| home mortgage LHFI | 1.63 | % | 1.81 | % | 1.66 | % | 1.60 | % | 1.54 | % | ||||||||||
| ACL LHFI / nonaccrual LHFI | 145.39 | % | 139.36 | % | 147.45 | % | 172.34 | % | 168.90 | % | ||||||||||
| ACL LHFI / nonaccrual LHFI | ||||||||||||||||||||
| (excl individually analyzed loans) | 235.29 | % | 249.31 | % | 273.60 | % | 301.44 | % | 320.80 | % | ||||||||||
| CAPITAL RATIOS | ||||||||||||||||||||
| Total equity / total assets | 9.16 | % | 8.88 | % | 8.54 | % | 8.53 | % | 8.28 | % | ||||||||||
| Tangible equity / tangible assets | 7.20 | % | 6.95 | % | 6.57 | % | 6.56 | % | 6.35 | % | ||||||||||
| Tangible equity / risk-weighted assets | 8.49 | % | 8.41 | % | 7.81 | % | 7.91 | % | 7.94 | % | ||||||||||
| Tier 1 leverage ratio | 8.76 | % | 8.62 | % | 8.49 | % | 8.35 | % | 8.29 | % | ||||||||||
| Common equity tier 1 capital ratio | 10.12 | % | 10.04 | % | 9.89 | % | 9.87 | % | 9.76 | % | ||||||||||
| Tier 1 risk-based capital ratio | 10.51 | % | 10.44 | % | 10.29 | % | 10.27 | % | 10.17 | % | ||||||||||
| Total risk-based capital ratio | 12.42 | % | 12.29 | % | 12.11 | % | 12.08 | % | 11.95 | % | ||||||||||
| STOCK PERFORMANCE | ||||||||||||||||||||
| Market value-Close | $ | 28.11 | $ | 27.88 | $ | 21.73 | $ | 21.12 | $ | 24.70 | ||||||||||
| Book value | $ | 27.50 | $ | 27.21 | $ | 25.71 | $ | 25.73 | $ | 25.59 | ||||||||||
| Tangible book value | $ | 21.18 | $ | 20.87 | $ | 19.37 | $ | 19.38 | $ | 19.24 | ||||||||||
| (1) See Note 6 - Non-GAAP Financial Measures in the Notes to Consolidated Financials for Trustmark's efficiency ratio calculation. |
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
March 31, 2024
($ in thousands)
(unaudited)
Note 1 - Securities Available for Sale and Held to Maturity
The following table is a summary of the estimated fair value of securities available for sale and the amortized cost of securities held to maturity:
3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | |||||||||||
SECURITIES AVAILABLE FOR SALE | |||||||||||||||
U.S. Treasury securities | $ | 372,424 | $ | 372,368 | $ | 363,476 | $ | 362,966 | $ | 386,903 | |||||
U.S. Government agency obligations | 5,594 | 5,792 | 6,780 | 6,999 | 7,254 | ||||||||||
Obligations of states and political subdivisions | - | - | 4,642 | 4,813 | 4,907 | ||||||||||
Mortgage-backed securities | |||||||||||||||
Residential mortgage pass-through securities | |||||||||||||||
Guaranteed by GNMA | 22,232 | 23,135 | 22,881 | 25,336 | 26,851 | ||||||||||
Issued by FNMA and FHLMC | 1,129,521 | 1,176,798 | 1,171,521 | 1,250,435 | 1,317,848 | ||||||||||
Other residential mortgage-backed securities | |||||||||||||||
Issued or guaranteed by FNMA, FHLMC, or GNMA | 79,099 | 86,074 | 90,402 | 98,388 | 108,192 | ||||||||||
Commercial mortgage-backed securities | |||||||||||||||
Issued or guaranteed by FNMA, FHLMC, or GNMA | 93,429 | 98,711 | 106,472 | 122,946 | 132,207 | ||||||||||
Total securities available for sale | $ | 1,702,299 | $ | 1,762,878 | $ | 1,766,174 | $ | 1,871,883 | $ | 1,984,162 | |||||
SECURITIES HELD TO MATURITY | |||||||||||||||
U.S. Treasury securities | $ | 29,261 | $ | 29,068 | $ | 28,872 | $ | 28,679 | $ | 28,486 | |||||
Obligations of states and political subdivisions | 340 | 340 | 341 | 1,180 | 4,507 | ||||||||||
Mortgage-backed securities | |||||||||||||||
Residential mortgage pass-through securities | |||||||||||||||
Guaranteed by GNMA | 18,387 | 13,005 | 13,090 | 13,235 | 4,336 | ||||||||||
Issued by FNMA and FHLMC | 461,457 | 469,593 | 474,003 | 484,679 | 497,854 | ||||||||||
Other residential mortgage-backed securities | |||||||||||||||
Issued or guaranteed by FNMA, FHLMC, or GNMA | 146,447 | 154,466 | 162,031 | 171,002 | 179,334 | ||||||||||
Commercial mortgage-backed securities | |||||||||||||||
Issued or guaranteed by FNMA, FHLMC, or GNMA | 759,133 | 759,807 | 759,950 | 759,890 | 759,821 | ||||||||||
Total securities held to maturity | $ | 1,415,025 | $ | 1,426,279 | $ | 1,438,287 | $ | 1,458,665 | $ | 1,474,338 | |||||
At March 31, 2024, the net unamortized, unrealized loss included in accumulated other comprehensive income (loss) in the accompanying balance sheet for securities held to maturity transferred from securities available for sale totaled $54.8 million.
Management continues to focus on asset quality as one of the strategic goals of the securities portfolio, which is evidenced by the investment of 99.99% of the portfolio in GSE-backed obligations and other Aaa rated securities as determined by Moody's. None of the securities owned by Trustmark are collateralized by assets which are considered sub-prime. Furthermore, outside of stock ownership in the Federal Home Loan Bank of Dallas, Federal Home Loan Bank of Atlanta and Federal Reserve Bank, Trustmark does not hold any other equity investment in a GSE.
TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
March 31, 2024
($ in thousands)
(unaudited)
Note 2 - Loan Composition
LHFI consisted of the following during the periods presented:
LHFI BY TYPE | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | |||||||||||||||
Loans secured by real estate: | ||||||||||||||||||||
Construction, land development and other land loans | $ | 1,539,461 | $ | 1,510,679 | $ | 1,609,326 | $ | 1,722,657 | $ | 1,723,772 | ||||||||||
Secured by 1-4 family residential properties | 2,891,481 | 2,904,715 | 2,893,606 | 2,854,182 | 2,822,048 | |||||||||||||||
Secured by nonfarm, nonresidential properties | 3,543,235 | 3,489,434 | 3,569,671 | 3,471,728 | 3,375,579 | |||||||||||||||
Other real estate secured | 1,384,610 | 1,312,551 | 1,218,499 | 954,410 | 847,527 | |||||||||||||||
Commercial and industrial loans | 1,922,711 | 1,922,910 | 1,828,924 | 1,883,480 | 1,882,360 | |||||||||||||||
Consumer loans | 156,430 | 161,725 | 161,940 | 163,788 | 162,911 | |||||||||||||||
State and other political subdivision loans | 1,052,844 | 1,088,466 | 1,056,569 | 1,111,710 | 1,193,727 | |||||||||||||||
Other loans and leases | 567,171 | 560,044 | 471,724 | 452,012 | 489,271 | |||||||||||||||
LHFI | 13,057,943 | 12,950,524 | 12,810,259 | 12,613,967 | 12,497,195 | |||||||||||||||
ACL LHFI | (142,998 | ) | (139,367 | ) | (134,031 | ) | (129,298 | ) | (122,239 | ) | ||||||||||
Net LHFI | $ | 12,914,945 | $ | 12,811,157 | $ | 12,676,228 | $ | 12,484,669 | $ | 12,374,956 | ||||||||||
The following table presents the LHFI composition based upon the region where the loan was originated and reflects each region's diversified mix of loans:
March 31, 2024 | |||||||||||||||||
LHFI - COMPOSITION BY REGION | Total | Alabama (1) | Florida | Mississippi
| Tennessee
| Texas | |||||||||||
Loans secured by real estate: | |||||||||||||||||
Construction, land development and other land loans | $ | 1,539,461 | $ | 753,918 | $ | 38,790 | $ | 391,843 | $ | 40,988 | $ | 313,922 | |||||
Secured by 1-4 family residential properties | 2,891,481 | 154,303 | 54,099 | 2,565,424 | 83,292 | 34,363 | |||||||||||
Secured by nonfarm, nonresidential properties | 3,543,235 | 981,921 | 233,109 | 1,485,304 | 150,017 | 692,884 | |||||||||||
Other real estate secured | 1,384,610 | 561,115 | 1,728 | 417,757 | 6,965 | 397,045 | |||||||||||
Commercial and industrial loans | 1,922,711 | 657,294 | 23,941 | 841,797 | 150,313 | 249,366 | |||||||||||
Consumer loans | 156,430 | 21,302 | 7,399 | 95,951 | 18,178 | 13,600 | |||||||||||
State and other political subdivision loans | 1,052,844 | 70,161 | 52,069 | 782,985 | 23,700 | 123,929 | |||||||||||
Other loans and leases | 567,171 | 236,775 | 8,202 | 200,957 | 57,098 | 64,139 | |||||||||||
Loans | $ | 13,057,943 | $ | 3,436,789 | $ | 419,337 | $ | 6,782,018 | $ | 530,551 | $ | 1,889,248 | |||||
CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION | |||||||||||||||||
Lots | $ | 70,445 | $ | 28,830 | $ | 8,196 | $ | 17,829 | $ | 4,587 | $ | 11,003 | |||||
Development | 122,788 | 56,825 | 1,260 | 28,668 | 12,576 | 23,459 | |||||||||||
Unimproved land | 110,272 | 20,907 | 13,404 | 29,759 | 8,006 | 38,196 | |||||||||||
1-4 family construction | 313,503 | 162,760 | 13,501 | 91,453 | 15,693 | 30,096 | |||||||||||
Other construction | 922,453 | 484,596 | 2,429 | 224,134 | 126 | 211,168 | |||||||||||
Construction, land development and other land loans | $ | 1,539,461 | $ | 753,918 | $ | 38,790 | $ | 391,843 | $ | 40,988 | $ | 313,922 | |||||
(1) | Includes Georgia Loan Production Office. |
TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
March 31, 2024
($ in thousands)
(unaudited)
Note 2 - Loan Composition (continued)
March 31, 2024 | ||||||||||||||||||
Total | Alabama (1) | Florida | Mississippi
| Tennessee
| Texas | |||||||||||||
LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION | ||||||||||||||||||
Non-owner occupied: | ||||||||||||||||||
Retail | $ | 367,575 | $ | 139,444 | $ | 24,147 | $ | 106,123 | $ | 17,381 | $ | 80,480 | ||||||
Office | 261,984 | 101,364 | 19,605 | 73,689 | 1,617 | 65,709 | ||||||||||||
Hotel/motel | 255,925 | 128,356 | 48,992 | 53,054 | 25,523 | - | ||||||||||||
Mini-storage | 165,962 | 40,724 | 1,864 | 103,323 | 745 | 19,306 | ||||||||||||
Industrial | 438,626 | 83,304 | 19,377 | 147,199 | 8,143 | 180,603 | ||||||||||||
Health care | 97,837 | 69,786 | 684 | 24,707 | 331 | 2,329 | ||||||||||||
Convenience stores | 25,572 | 3,214 | 419 | 13,599 | 239 | 8,101 | ||||||||||||
Nursing homes/senior living | 513,854 | 227,254 | - | 186,507 | 4,724 | 95,369 | ||||||||||||
Other | 109,838 | 31,790 | 9,067 | 51,626 | 8,211 | 9,144 | ||||||||||||
Total non-owner occupied loans | 2,237,173 | 825,236 | 124,155 | 759,827 | 66,914 | 461,041 | ||||||||||||
Owner-occupied: | ||||||||||||||||||
Office | 150,283 | 41,047 | 37,629 | 41,658 | 11,555 | 18,394 | ||||||||||||
Churches | 56,697 | 14,208 | 4,094 | 32,706 | 3,215 | 2,474 | ||||||||||||
Industrial warehouses | 156,148 | 11,553 | 4,537 | 39,874 | 15,766 | 84,418 | ||||||||||||
Health care | 124,330 | 11,337 | 8,163 | 85,172 | 2,251 | 17,407 | ||||||||||||
Convenience stores | 148,158 | 12,172 | 29,156 | 72,715 | - | 34,115 | ||||||||||||
Retail | 88,445 | 9,457 | 15,287 | 35,730 | 17,087 | 10,884 | ||||||||||||
Restaurants | 48,491 | 4,008 | 2,930 | 21,360 | 16,367 | 3,826 | ||||||||||||
Auto dealerships | 42,394 | 5,138 | 194 | 21,007 | 16,055 | - | ||||||||||||
Nursing homes/senior living | 353,641 | 35,216 | - | 292,264 | - | 26,161 | ||||||||||||
Other | 137,475 | 12,549 | 6,964 | 82,991 | 807 | 34,164 | ||||||||||||
Total owner-occupied loans | 1,306,062 | 156,685 | 108,954 | 725,477 | 83,103 | 231,843 | ||||||||||||
Loans secured by nonfarm, nonresidential properties | $ | 3,543,235 | $ | 981,921 | $ | 233,109 | $ | 1,485,304 | $ | 150,017 | $ | 692,884 | ||||||
(1) | Includes Georgia Loan Production Office. |
Note 3 - Yields on Earning Assets and Interest-Bearing Liabilities
The following table illustrates the yields on earning assets by category as well as the rates paid on interest-bearing liabilities on a tax equivalent basis:
Quarter Ended | ||||||||||||||||||||
3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | ||||||||||||||||
Securities - taxable | 1.88 | % | 1.85 | % | 1.89 | % | 1.87 | % | 1.85 | % | ||||||||||
Securities - nontaxable | 4.73 | % | 3.81 | % | 4.05 | % | 4.25 | % | 4.00 | % | ||||||||||
Securities - total | 1.88 | % | 1.85 | % | 1.89 | % | 1.87 | % | 1.86 | % | ||||||||||
LHFI & LHFS | 6.40 | % | 6.41 | % | 6.34 | % | 6.08 | % | 5.79 | % | ||||||||||
Fed funds sold & reverse repurchases | 3.53 | % | 6.56 | % | 5.17 | % | 5.51 | % | 5.11 | % | ||||||||||
Other earning assets | 5.71 | % | 5.87 | % | 5.01 | % | 5.36 | % | 4.09 | % | ||||||||||
Total earning assets | 5.49 | % | 5.48 | % | 5.38 | % | 5.16 | % | 4.87 | % | ||||||||||
Interest-bearing deposits | 2.74 | % | 2.67 | % | 2.39 | % | 1.96 | % | 1.53 | % | ||||||||||
Fed funds purchased & repurchases | 5.25 | % | 5.26 | % | 5.14 | % | 5.01 | % | 4.49 | % | ||||||||||
Other borrowings | 4.78 | % | 5.08 | % | 5.32 | % | 5.12 | % | 4.87 | % | ||||||||||
Total interest-bearing liabilities | 2.92 | % | 2.89 | % | 2.72 | % | 2.42 | % | 1.98 | % | ||||||||||
Total Deposits | 2.18 | % | 2.10 | % | 1.84 | % | 1.48 | % | 1.13 | % | ||||||||||
Net interest margin | 3.21 | % | 3.25 | % | 3.29 | % | 3.33 | % | 3.39 | % | ||||||||||
TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
March 31, 2024
($ in thousands)
(unaudited)
Note 3 - Yields on Earning Assets and Interest-Bearing Liabilities (continued)
Reflected in the table above are yields on earning assets and liabilities, along with the net interest margin which equals reported net interest income-FTE, annualized, as a percent of average earning assets.
The net interest margin decreased four basis points when compared to the fourth quarter of 2023, totaling 3.21% for the first quarter of 2024, primarily due to increased costs of interest-bearing deposits which resulted from the higher interest rate environment.
Note 4 - Mortgage Banking
Trustmark utilizes a portfolio of exchange-traded derivative instruments, such as Treasury note futures contracts and option contracts, to achieve a fair value return that offsets the changes in fair value of mortgage servicing rights (MSR) attributable to interest rates. These transactions are considered freestanding derivatives that do not otherwise qualify for hedge accounting under generally accepted accounting principles (GAAP). Changes in the fair value of these exchange-traded derivative instruments, including administrative costs, are recorded in noninterest income in mortgage banking, net and are offset by the changes in the fair value of the MSR. The MSR fair value represents the present value of future cash flows, which among other things includes decay and the effect of changes in interest rates. Ineffectiveness of hedging the MSR fair value is measured by comparing the change in value of hedge instruments to the change in the fair value of the MSR asset attributable to changes in interest rates and other market driven changes in valuation inputs and assumptions. The impact of this strategy resulted in a net negative hedge ineffectiveness of $1.1 million during the first quarter of 2024.
The following table illustrates the components of mortgage banking revenues included in noninterest income in the accompanying income statements:
Quarter Ended | ||||||||||||||||||||
3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | ||||||||||||||||
Mortgage servicing income, net | $ | 6,934 | $ | 6,731 | $ | 6,916 | $ | 6,764 | $ | 6,785 | ||||||||||
Change in fair value-MSR from runoff | (1,926 | ) | (2,972 | ) | (3,203 | ) | (2,710 | ) | (1,145 | ) | ||||||||||
Gain on sales of loans, net. | 5,009 | 3,913 | 3,748 | 3,887 | 3,797 | |||||||||||||||
Mortgage banking income before hedge ineffectiveness | 10,017 | 7,672 | 7,461 | 7,941 | 9,437 | |||||||||||||||
Change in fair value-MSR from market changes | 5,123 | (10,224 | ) | 6,809 | 5,898 | (3,972 | ) | |||||||||||||
Change in fair value of derivatives | (6,225 | ) | 8,071 | (7,812 | ) | (7,239 | ) | 2,174 | ||||||||||||
Net positive (negative) hedge ineffectiveness | (1,102 | ) | (2,153 | ) | (1,003 | ) | (1,341 | ) | (1,798 | ) | ||||||||||
Mortgage banking, net | $ | 8,915 | $ | 5,519 | $ | 6,458 | $ | 6,600 | $ | 7,639 | ||||||||||
TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
March 31, 2024
($ in thousands)
(unaudited)
Note 5 - Other Noninterest Income and Expense
Other noninterest income consisted of the following for the periods presented:
Quarter Ended | ||||||||||||||||||||
3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | ||||||||||||||||
Partnership amortization for tax credit purposes | $ | (1,834 | ) | $ | (2,013 | ) | $ | (1,995 | ) | $ | (2,019 | ) | $ | (1,961 | ) | |||||
Increase in life insurance cash surrender value | 1,844 | 1,825 | 1,784 | 1,716 | 1,693 | |||||||||||||||
Other miscellaneous income | 3,622 | 2,767 | 2,610 | 3,998 | 2,782 | |||||||||||||||
Total other, net | $ | 3,632 | $ | 2,579 | $ | 2,399 | $ | 3,695 | $ | 2,514 | ||||||||||
Trustmark invests in partnerships that provide income tax credits on a Federal and/or State basis (i.e., new market tax credits, low-income housing tax credits and historical tax credits). The income tax credits related to these partnerships are utilized as specifically allowed by income tax law and are recorded as a reduction in income tax expense.
Other noninterest expense consisted of the following for the periods presented:
Quarter Ended | |||||||||||||||||
3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | |||||||||||||
Loan expense | $ | 2,955 | $ | 2,380 | $ | 3,130 | $ | 3,066 | $ | 2,538 | |||||||
Amortization of intangibles | 120 | 128 | 129 | 130 | 288 | ||||||||||||
FDIC assessment expense | 4,509 | 4,844 | 3,765 | 2,550 | 2,370 | ||||||||||||
Other real estate expense, net | 671 | (184 | ) | (40 | ) | 171 | 172 | ||||||||||
Other miscellaneous expense | 8,713 | 9,473 | 8,714 | 8,585 | 9,443 | ||||||||||||
Total other expense | $ | 16,968 | $ | 16,641 | $ | 15,698 | $ | 14,502 | $ | 14,811 | |||||||
Note 6 - Non-GAAP Financial Measures
In addition to capital ratios defined by GAAP and banking regulators, Trustmark utilizes various tangible common equity measures when evaluating capital utilization and adequacy. Tangible common equity, as defined by Trustmark, represents common equity less goodwill and identifiable intangible assets. Trustmark's Common Equity Tier 1 capital includes common stock, capital surplus and retained earnings, and is reduced by goodwill and other intangible assets, net of associated net deferred tax liabilities as well as disallowed deferred tax assets and threshold deductions as applicable.
Trustmark believes these measures are important because they reflect the level of capital available to withstand unexpected market conditions. Additionally, presentation of these measures allows readers to compare certain aspects of Trustmark's capitalization to other organizations. These ratios differ from capital measures defined by banking regulators principally in that the numerator excludes shareholders' equity associated with preferred securities, the nature and extent of which varies across organizations. In Management's experience, many stock analysts use tangible common equity measures in conjunction with more traditional bank capital ratios to compare capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase accounting method in accounting for mergers and acquisitions.
These calculations are intended to complement the capital ratios defined by GAAP and banking regulators. Because GAAP does not include these capital ratio measures, Trustmark believes there are no comparable GAAP financial measures to these tangible common equity ratios. Despite the importance of these measures to Trustmark, there are no standardized definitions for them and, as a result, Trustmark's calculations may not be comparable with other organizations. Also, there may be limits in the usefulness of these measures to investors. As a result, Trustmark encourages readers to consider its audited consolidated financial statements and the notes related thereto in their entirety and not to rely on any single financial measure.
TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
March 31, 2024
($ in thousands except per share data)
(unaudited)
Note 6 - Non-GAAP Financial Measures (continued)
Quarter Ended | ||||||||||||||||||||||
3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | ||||||||||||||||||
TANGIBLE EQUITY | ||||||||||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||||
Total shareholders' equity | $ | 1,676,521 | $ | 1,592,493 | $ | 1,582,885 | $ | 1,580,291 | $ | 1,523,828 | ||||||||||||
Less: Goodwill | (384,237 | ) | (384,237 | ) | (384,237 | ) | (384,237 | ) | (384,237 | ) | ||||||||||||
Identifiable intangible assets | (2,920 | ) | (3,044 | ) | (3,174 | ) | (3,301 | ) | (3,523 | ) | ||||||||||||
Total average tangible equity | $ | 1,289,364 | $ | 1,205,212 | $ | 1,195,474 | $ | 1,192,753 | $ | 1,136,068 | ||||||||||||
PERIOD END BALANCES | ||||||||||||||||||||||
Total shareholders' equity | $ | 1,682,599 | $ | 1,661,847 | $ | 1,570,351 | $ | 1,571,193 | $ | 1,562,099 | ||||||||||||
Less: Goodwill | (384,237 | ) | (384,237 | ) | (384,237 | ) | (384,237 | ) | (384,237 | ) | ||||||||||||
Identifiable intangible assets | (2,845 | ) | (2,965 | ) | (3,093 | ) | (3,222 | ) | (3,352 | ) | ||||||||||||
Total tangible equity | (a) | $ | 1,295,517 | $ | 1,274,645 | $ | 1,183,021 | $ | 1,183,734 | $ | 1,174,510 | |||||||||||
TANGIBLE ASSETS | ||||||||||||||||||||||
Total assets | $ | 18,376,612 | $ | 18,722,189 | $ | 18,390,839 | $ | 18,422,626 | $ | 18,877,178 | ||||||||||||
Less: Goodwill | (384,237 | ) | (384,237 | ) | (384,237 | ) | (384,237 | ) | (384,237 | ) | ||||||||||||
Identifiable intangible assets | (2,845 | ) | (2,965 | ) | (3,093 | ) | (3,222 | ) | (3,352 | ) | ||||||||||||
Total tangible assets | (b) | $ | 17,989,530 | $ | 18,334,987 | $ | 18,003,509 | $ | 18,035,167 | $ | 18,489,589 | |||||||||||
Risk-weighted assets | (c) | $ | 15,257,385 | $ | 15,153,263 | $ | 15,143,531 | $ | 14,966,614 | $ | 14,793,893 | |||||||||||
NET INCOME (LOSS) ADJUSTED FOR INTANGIBLE AMORTIZATION | ||||||||||||||||||||||
Net income (loss) | $ | 41,535 | $ | 36,123 | $ | 34,029 | $ | 45,037 | $ | 50,300 | ||||||||||||
Plus: Intangible amortization net of tax | 90 | 96 | 96 | 97 | 216 | |||||||||||||||||
Net income (loss) adjusted for intangible amortization | $ | 41,625 | $ | 36,219 | $ | 34,125 | $ | 45,134 | $ | 50,516 | ||||||||||||
Period end common shares outstanding | (d) | 61,178,366 | 61,071,173 | 61,070,095 | 61,069,036 | 61,048,516 | ||||||||||||||||
TANGIBLE COMMON EQUITY MEASUREMENTS | ||||||||||||||||||||||
Return on average tangible equity (1) | 12.98 | % | 11.92 | % | 11.32 | % | 15.18 | % | 18.03 | % | ||||||||||||
Tangible equity/tangible assets | (a)/(b) | 7.20 | % | 6.95 | % | 6.57 | % | 6.56 | % | 6.35 | % | |||||||||||
Tangible equity/risk-weighted assets | (a)/(c) | 8.49 | % | 8.41 | % | 7.81 | % | 7.91 | % | 7.94 | % | |||||||||||
Tangible book value | (a)/(d)*1,000 | $ | 21.18 | $ | 20.87 | $ | 19.37 | $ | 19.38 | $ | 19.24 | |||||||||||
COMMON EQUITY TIER 1 CAPITAL (CET1) | ||||||||||||||||||||||
Total shareholders' equity | $ | 1,682,599 | $ | 1,661,847 | $ | 1,570,351 | $ | 1,571,193 | $ | 1,562,099 | ||||||||||||
CECL transition adjustment | 6,500 | 13,000 | 13,000 | 13,000 | 13,000 | |||||||||||||||||
AOCI-related adjustments | 227,154 | 219,723 | 287,888 | 265,704 | 242,381 | |||||||||||||||||
CET1 adjustments and deductions: | ||||||||||||||||||||||
Goodwill net of associated deferred tax liabilities (DTLs) | (370,205 | ) | (370,212 | ) | (370,219 | ) | (370,227 | ) | (370,234 | ) | ||||||||||||
Other adjustments and deductions for CET1 (2) | (2,588 | ) | (2,693 | ) | (2,803 | ) | (2,915 | ) | (3,275 | ) | ||||||||||||
CET1 capital | (e) | 1,543,460 | 1,521,665 | 1,498,217 | 1,476,755 | 1,443,971 | ||||||||||||||||
Additional tier 1 capital instruments plus related surplus | 60,000 | 60,000 | 60,000 | 60,000 | 60,000 | |||||||||||||||||
Tier 1 capital | $ | 1,603,460 | $ | 1,581,665 | $ | 1,558,217 | $ | 1,536,755 | $ | 1,503,971 | ||||||||||||
Common equity tier 1 capital ratio | (e)/(c) | 10.12 | % | 10.04 | % | 9.89 | % | 9.87 | % | 9.76 | % | |||||||||||
(1) | Calculation = ((net income (loss) adjusted for intangible amortization/number of days in period)*number of days in year)/total average tangible equity. |
(2) | Includes other intangible assets, net of DTLs, disallowed deferred tax assets (DTAs), threshold deductions and transition adjustments, as applicable. |
TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
March 31, 2024
($ in thousands except per share data)
(unaudited)
Note 6 - Non-GAAP Financial Measures (continued)
Trustmark discloses certain non-GAAP financial measures because Management uses these measures for business planning purposes, including to manage Trustmark's business against internal projected results of operations and to measure Trustmark's performance. Trustmark views these as measures of our core operating business, which exclude the impact of the items detailed below, as these items are generally not operational in nature. These non-GAAP financial measures also provide another basis for comparing period-to-period results as presented in the accompanying selected financial data table and the audited consolidated financial statements by excluding potential differences caused by non-operational and unusual or non-recurring items. Readers are cautioned that these adjustments are not permitted under GAAP. Trustmark encourages readers to consider its consolidated financial statements and the notes related thereto in their entirety, and not to rely on any single financial measure.
The following table presents pre-provision net revenue (PPNR) during the periods presented:
Quarter Ended | ||||||||||||||||||
3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | ||||||||||||||
Net interest income (GAAP) | $ | 132,830 | $ | 136,742 | $ | 138,637 | $ | 139,904 | $ | 137,595 | ||||||||
Noninterest income (GAAP) | 55,349 | 49,804 | 52,224 | 53,553 | 51,377 | |||||||||||||
Pre-provision revenue | (a) | $ | 188,179 | $ | 186,546 | $ | 190,861 | $ | 193,457 | $ | 188,972 | |||||||
Noninterest expense (GAAP) | $ | 131,146 | $ | 136,429 | $ | 140,945 | $ | 132,218 | $ | 128,327 | ||||||||
Less: | Reduction in force expense | - | (1,406 | ) | - | - | - | |||||||||||
Litigation settlement expense | - | - | (6,500 | ) | - | - | ||||||||||||
Adjusted noninterest expense - PPNR (Non-GAAP) | (b) | $ | 131,146 | $ | 135,023 | $ | 134,445 | $ | 132,218 | $ | 128,327 | |||||||
PPNR (Non-GAAP) | (a)-(b) | $ | 57,033 | $ | 51,523 | $ | 56,416 | $ | 61,239 | $ | 60,645 | |||||||
The following table presents Trustmark's calculation of its efficiency ratio for the periods presented:
Quarter Ended | |||||||||||||||||||||
3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | |||||||||||||||||
Total noninterest expense (GAAP) | $ | 131,146 | $ | 136,429 | $ | 140,945 | $ | 132,218 | $ | 128,327 | |||||||||||
Less: | Other real estate expense, net | (671 | ) | 184 | 40 | (171 | ) | (172 | ) | ||||||||||||
Amortization of intangibles | (120 | ) | (128 | ) | (129 | ) | (130 | ) | (288 | ) | |||||||||||
Charitable contributions resulting in state tax credits | (300 | ) | (325 | ) | (325 | ) | (325 | ) | (325 | ) | |||||||||||
Reduction in force expense | - | (1,406 | ) | - | - | - | |||||||||||||||
Litigation settlement expense | - | - | (6,500 | ) | - | - | |||||||||||||||
Adjusted noninterest expense (Non-GAAP) | (c) | $ | 130,055 | $ | 134,754 | $ | 134,031 | $ | 131,592 | $ | 127,542 | ||||||||||
Net interest income (GAAP) | $ | 132,830 | $ | 136,742 | $ | 138,637 | $ | 139,904 | $ | 137,595 | |||||||||||
Add: | Tax equivalent adjustment | 3,365 | 3,306 | 3,299 | 3,383 | 3,477 | |||||||||||||||
Net interest income-FTE (Non-GAAP) | (a) | $ | 136,195 | $ | 140,048 | $ | 141,936 | $ | 143,287 | $ | 141,072 | ||||||||||
Noninterest income (GAAP) | $ | 55,349 | $ | 49,804 | $ | 52,224 | $ | 53,553 | $ | 51,377 | |||||||||||
Add: | Partnership amortization for tax credit purposes | 1,834 | 2,013 | 1,995 | 2,019 | 1,961 | |||||||||||||||
Less: | Securities (gains) losses, net | - | (39 | ) | - | - | - | ||||||||||||||
Adjusted noninterest income (Non-GAAP) | (b) | $ | 57,183 | $ | 51,778 | $ | 54,219 | $ | 55,572 | $ | 53,338 | ||||||||||
Adjusted revenue (Non-GAAP) | (a)+(b) | $ | 193,378 | $ | 191,826 | $ | 196,155 | $ | 198,859 | $ | 194,410 | ||||||||||
Efficiency ratio (Non-GAAP) | (c)/((a)+(b)) | 67.25 | % | 70.25 | % | 68.33 | % | 66.17 | % | 65.60 | % | ||||||||||
Contacts
Trustmark Investor Contacts:
Thomas C. Owens
Treasurer and Principal Financial Officer
601-208-7853
F. Joseph Rein, Jr.
Senior Vice President
601-208-6898
Trustmark Media Contact:
Melanie A. Morgan
Senior Vice President
601-208-2979
