JACKSON, Miss.--(BUSINESS WIRE)--Trustmark Corporation (NASDAQGS:TRMK) announced second quarter financial results which reflect the previously disclosed sale of Fisher Brown Bottrell Insurance, Inc. (FBBI). As such, second quarter financial results consist of both continuing operations and discontinued operations. The discontinued operations include the financial results of FBBI prior to the sale as well as the gain on sale in the second quarter. The discontinued operations results are presented as a single line item below income from continuing operations in the accompanying tables for all periods presented. Financial results from adjusted continuing operations exclude significant non-routine transactions(1). Trustmark reported net income of $73.8 million in the second quarter of 2024, representing diluted earnings per share of $1.20 and net income from adjusted continuing operations(1) of $40.5 million, or $0.66 per diluted share.
Printer friendly version of earnings release with consolidated financial statements and notes: https://www.businesswire.com/news/home/54097962/en.
The Board of Directors declared a quarterly cash dividend of $0.23 per share payable September 15, 2024, to shareholders of record on September 1, 2024.
Significant Non-Routine Transactions in the Second Quarter
- Completed sale of FBBI, producing a gain on sale of $228.3 million ($171.2 million, net of taxes)
- Restructured investment securities portfolio; sold available for sale securities of $1.6 billion with an average yield of 1.36%, which generated a loss of $182.8 million ($137.1 million, net of taxes); purchased $1.4 billion of available for sale securities with an average yield of 4.85%
- Sold a portfolio of 1-4 family mortgage loans that were three payments delinquent and/or nonaccrual at time of selection totaling $56.2 million (Mortgage Loan Sale) which generated a loss of $13.4 million ($10.1 million, net of taxes); sale drove a $54.1 million reduction in nonperforming loans
- Exchanged Visa Class B-1 shares for Visa Class B-2 shares and Visa Class C common stock; Visa Class C stock exchange resulted in a gain of $8.1 million ($6.0 million, net of taxes)
Second Quarter Highlights
- Loans held for investment (HFI) increased $97.5 million, or 0.7%, from the prior quarter to $13.2 billion; excluding the Mortgage Loan Sale, loans HFI increased $152.4 million, or 1.2%, linked-quarter
- Deposits expanded $124.3 million, or 0.8%, linked-quarter to $15.5 billion
- Net interest income (FTE) increased $8.1 million, or 6.0%, linked-quarter to $144.3 million, resulting in a net interest margin of 3.38%, up 17 basis points from the prior quarter
- Noninterest expense totaled $118.3 million, down $1.3 million, or 1.1%, linked-quarter
- Tangible equity to tangible assets ratio increased 105 basis points to 8.52% at June 30, 2024
- Tangible book value per share increased $3.20, or 14.5%, to $25.23 at June 30, 2024
Duane A. Dewey, President and CEO, stated, "The second quarter of 2024 was an extremely productive quarter for Trustmark. We closed the previously announced sale of our insurance agency and completed significant balance sheet restructuring to position the company for improved operating performance into the second half of the year and beyond. While completing these non-recurring events, we also performed well in our core banking franchise with continued loan growth, deposit growth, solid fee income and disciplined expense management. The commitment and dedication of our associates across the organization to successfully meet our clients' financial needs and execute the one-time projects are outstanding, and we believe the company is very well positioned for future opportunities."
Balance Sheet Management
- Loans HFI totaled $13.2 billion, up 0.7% from the prior quarter and 4.3% year-over-year
- Deposits totaled $15.5 billion, up 0.8% from the previous quarter and 3.7% year-over-year
- Enhanced strong capital position with CET1 ratio of 10.92% and total risk-based capital ratio of 13.29%
Loans HFI totaled $13.2 billion at June 30, 2024, reflecting an increase of $97.5 million, or 0.7%, linked-quarter and $541.5 million, or 4.3%, year-over-year. The linked quarter growth reflected increases in construction, development and other land loans, loans secured by nonfarm, nonresidential properties, and other loans and leases offset in part by declines in commercial and industrial loans, other real estate secured loans, and 1-4 family mortgage loans. Trustmark's loan portfolio continues to be well-diversified by loan type and geography.
Deposits totaled $15.5 billion at June 30, 2024, up $124.3 million, or 0.8%, from the prior quarter and $549.0 million, or 3.7%, year-over-year. Trustmark continues to maintain a strong liquidity position as loans HFI represented 85.1% of total deposits at June 30, 2024. Noninterest-bearing deposits represented 20.4% of total deposits at June 30, 2024, compared to 19.8% at March 31, 2024. The cost of interest-bearing deposits increased 1 basis point to 2.75% for the second quarter, while the cost of total deposits was 2.18%, unchanged from the prior quarter. The total cost of interest-bearing liabilities was 2.95% for the second quarter, up 3 basis points linked-quarter.
During the second 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. As of June 30, 2024, Trustmark had not repurchased any of its outstanding common shares under this program. At June 30, 2024, Trustmark's tangible equity to tangible assets ratio was 8.52%, up 105 basis points from the prior quarter, while the total risk-based capital ratio was 13.29%, up 87 basis points from the prior quarter. Tangible book value per share was $25.23 at June 30, 2024, an increase of 14.5% from the prior quarter and 24.7% from the prior year.
Credit Quality
- Nonaccrual loans declined 55.0% linked-quarter to $44.3 million, driven by the Mortgage Loan Sale
- Net charge-offs totaled $11.6 million for the second quarter; excluding the Mortgage Loan Sale, net charge-offs totaled $3.0 million and represented 0.09% of average loans
- Allowance for credit losses (ACL) represented 1.18% of loans HFI and 840.20% of nonaccrual loans HFI, excluding individually analyzed loans, at June 30, 2024
Nonaccrual loans totaled $44.3 million at June 30, 2024, down $54.1 million from the prior quarter and $30.7 million year-over-year. Other real estate totaled $6.6 million, reflecting a decrease of $1.0 million from the prior quarter and an increase of $5.4 million from the prior year. Collectively, nonperforming assets totaled $50.9 million at June 30, 2024, down $55.1 million, or 52.0%, from the prior quarter and $25.3 million, or 33.2%, from the prior year.
The total provision for credit losses for loans HFI was $23.3 million in the second quarter. Excluding the Mortgage Loan Sale, the provision for credit losses for loans HFI was $14.7 million and was primarily attributable to credit migration. The provision for credit losses for off-balance sheet credit exposures was a negative $3.6 million, primarily driven by decreases in unfunded commitments. Collectively, the provision for credit losses, excluding the Mortgage Loan Sale, totaled $11.1 million in the second quarter compared to $7.5 million from the prior quarter and $8.5 million in the second quarter of 2023.
Allocation of Trustmark's $154.7 million ACL on loans HFI represented 1.05% of commercial loans and 1.59% of consumer and home mortgage loans, resulting in an ACL to total loans HFI of 1.18% at June 30, 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 $144.3 million in the second quarter, up 6.0% linked-quarter
- GAAP noninterest income was negative $141.3 million in the second quarter while noninterest income from adjusted continuing operations(1) totaled $38.2 million and represented 21.3% of total revenue from adjusted continuing operations(1)
- GAAP revenue was negative $0.3 million in the second quarter while revenue from adjusted continuing operations(1) totaled $179.3 million, up $7.1 million, or 4.1%, linked-quarter
Revenue from adjusted continuing operations(1) in the second quarter totaled $179.3 million, an increase of $7.1 million, or 4.1%, from the prior quarter and $1.5 million, or 0.9%, from the same quarter in the prior year. The linked-quarter increase primarily reflects higher net interest income and solid growth in bank card and other fees and wealth management revenue.
Net interest income (FTE) in the second quarter totaled $144.3 million, resulting in a net interest margin of 3.38%, up 17 basis points from the prior quarter. The increase in the net interest margin was primarily due to increased yields on the securities portfolio and the loans HFI and held for sale portfolio as well as the costs of interest-bearing deposits remaining relatively flat.
Noninterest income from adjusted continuing operations(1) in the second quarter totaled $38.2 million, a decrease of $1.1 million, or 2.8%, from the prior quarter and an increase of $0.4 million, or 1.1%, year-over-year. Bank card and other fees totaled $9.2 million in the second quarter, up $1.8 million, or 24.2%, linked-quarter and $0.3 million, or 3.5%, year-over-year. The linked-quarter increase reflects expanded customer derivative revenue, interchange revenue, and miscellaneous other revenue. Service charges on deposit accounts totaled $10.9 million in the second quarter, relatively unchanged from the prior quarter and up $0.2 million, or 2.1%, year-over-year. Other, net totaled $7.5 million, up $4.4 million linked-quarter as the $8.1 million gain from Visa C exchange was offset in part by the $4.8 million in noncredit-related loss from the Mortgage Loan Sale. Other, net from adjusted continuing operations(1) totaled $4.2 million, an increase of $1.1 million, or 35.5%, from the prior quarter.
Mortgage loan production in the second quarter totaled $379.5 million, an increase of 38.5% from the prior quarter and a decrease of 12.0% year-over-year. Mortgage banking revenue totaled $4.2 million in the second quarter, a decrease of $4.7 million linked-quarter and $2.4 million year-over-year. The linked-quarter decrease was principally attributable to increased net negative hedge ineffectiveness, which was driven by a higher assumed discount rate on servicing cash flows.
Wealth management revenue in the second quarter totaled $9.7 million, an increase of $0.7 million, or 8.3%, from the prior quarter and $0.8 million, or 9.1%, year-over-year. The linked-quarter growth reflected increased investment services and trust management revenue while the year-over-year increase reflected expanded brokerage revenue.
Noninterest Expense
- Noninterest expense declined $1.3 million, or 1.1%, linked-quarter
- Salary and employee benefit expense declined $0.6 million, or 1.0%, linked-quarter
Noninterest expense in the second quarter totaled $118.3 million, a decrease of $1.3 million, or 1.1%, when compared to the prior quarter. Salaries and employee benefits expense decreased $0.6 million, or 1.0%, linked-quarter principally due to reduced compensation expense and the seasonal decline in payroll taxes, which were partially offset by increased commission expense. Other expense declined $0.9 million, or 5.6%, linked-quarter.
(1) Please refer to Consolidated Financial Information, Note 1 - Significant Non-Routine Transactions and Note 7 - Non-GAAP Financial Measures.
Additional Information
As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, July 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, August 7, 2024, in archived format at the same web address or by calling (877) 344-7529, passcode 4456612.
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 | |||||||||||||||||||||||||
| June 30, 2024 | |||||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||
| Linked Quarter | Year over Year | ||||||||||||||||||||||||
| QUARTERLY AVERAGE BALANCES | 6/30/2024 | 3/31/2024 | 6/30/2023 | $ Change | % Change | $ Change | % Change | ||||||||||||||||||
| Securities AFS-taxable | $ | 1,866,227 | $ | 1,927,619 | $ | 2,140,505 | $ | (61,392 | ) | -3.2 | % | $ | (274,278 | ) | -12.8 | % | |||||||||
| Securities AFS-nontaxable | - | - | 4,796 | - | n/m | (4,796 | ) | -100.0 | % | ||||||||||||||||
| Securities HTM-taxable | 1,421,246 | 1,418,476 | 1,463,086 | 2,770 | 0.2 | % | (41,840 | ) | -2.9 | % | |||||||||||||||
| Securities HTM-nontaxable | 112 | 340 | 1,718 | (228 | ) | -67.1 | % | (1,606 | ) | -93.5 | % | ||||||||||||||
| Total securities | 3,287,585 | 3,346,435 | 3,610,105 | (58,850 | ) | -1.8 | % | (322,520 | ) | -8.9 | % | ||||||||||||||
| Loans (includes loans held for sale) | 13,309,127 | 13,169,805 | 12,732,057 | 139,322 | 1.1 | % | 577,070 | 4.5 | % | ||||||||||||||||
| Fed funds sold and reverse repurchases | 110 | 114 | 3,275 | (4 | ) | -3.5 | % | (3,165 | ) | -96.6 | % | ||||||||||||||
| Other earning assets | 592,625 | 571,215 | 903,027 | 21,410 | 3.7 | % | (310,402 | ) | -34.4 | % | |||||||||||||||
| Total earning assets | 17,189,447 | 17,087,569 | 17,248,464 | 101,878 | 0.6 | % | (59,017 | ) | -0.3 | % | |||||||||||||||
| Allowance for credit losses (ACL), loans held | |||||||||||||||||||||||||
for investment (LHFI) | (143,245 | ) | (138,711 | ) | (121,960 | ) | (4,534 | ) | -3.3 | % | (21,285 | ) | -17.5 | % | |||||||||||
| Other assets | 1,740,307 | 1,730,521 | 1,648,583 | 9,786 | 0.6 | % | 91,724 | 5.6 | % | ||||||||||||||||
| Total assets | $ | 18,786,509 | $ | 18,679,379 | $ | 18,775,087 | $ | 107,130 | 0.6 | % | $ | 11,422 | 0.1 | % | |||||||||||
| Interest-bearing demand deposits | $ | 5,222,369 | $ | 5,291,779 | $ | 4,803,737 | $ | (69,410 | ) | -1.3 | % | $ | 418,632 | 8.7 | % | ||||||||||
| Savings deposits | 3,653,966 | 3,686,027 | 4,002,134 | (32,061 | ) | -0.9 | % | (348,168 | ) | -8.7 | % | ||||||||||||||
| Time deposits | 3,346,046 | 3,321,601 | 2,335,752 | 24,445 | 0.7 | % | 1,010,294 | 43.3 | % | ||||||||||||||||
| Total interest-bearing deposits | 12,222,381 | 12,299,407 | 11,141,623 | (77,026 | ) | -0.6 | % | 1,080,758 | 9.7 | % | |||||||||||||||
| Fed funds purchased and repurchases | 434,760 | 428,127 | 389,834 | 6,633 | 1.5 | % | 44,926 | 11.5 | % | ||||||||||||||||
| Other borrowings | 534,350 | 463,459 | 1,330,010 | 70,891 | 15.3 | % | (795,660 | ) | -59.8 | % | |||||||||||||||
| Subordinated notes | 123,556 | 123,501 | 123,337 | 55 | 0.0 | % | 219 | 0.2 | % | ||||||||||||||||
| Junior subordinated debt securities | 61,856 | 61,856 | 61,856 | - | 0.0 | % | - | 0.0 | % | ||||||||||||||||
| Total interest-bearing liabilities | 13,376,903 | 13,376,350 | 13,046,660 | 553 | 0.0 | % | 330,243 | 2.5 | % | ||||||||||||||||
| Noninterest-bearing deposits | 3,183,524 | 3,120,566 | 3,595,927 | 62,958 | 2.0 | % | (412,403 | ) | -11.5 | % | |||||||||||||||
| Other liabilities | 498,593 | 505,942 | 552,209 | (7,349 | ) | -1.5 | % | (53,616 | ) | -9.7 | % | ||||||||||||||
| Total liabilities | 17,059,020 | 17,002,858 | 17,194,796 | 56,162 | 0.3 | % | (135,776 | ) | -0.8 | % | |||||||||||||||
| Shareholders' equity | 1,727,489 | 1,676,521 | 1,580,291 | 50,968 | 3.0 | % | 147,198 | 9.3 | % | ||||||||||||||||
| Total liabilities and equity | $ | 18,786,509 | $ | 18,679,379 | $ | 18,775,087 | $ | 107,130 | 0.6 | % | $ | 11,422 | 0.1 | % | |||||||||||
| n/m - percentage changes greater than +/- 100% are considered not meaningful | |||||||||||||||||||||||||
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||||||||
| June 30, 2024 | |||||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||
| Linked Quarter | Year over Year | ||||||||||||||||||||||||
| PERIOD END BALANCES | 6/30/2024 | 3/31/2024 | 6/30/2023 | $ Change | % Change | $ Change | % Change | ||||||||||||||||||
| Cash and due from banks | $ | 822,141 | $ | 606,061 | $ | 831,852 | $ | 216,080 | 35.7 | % | $ | (9,711 | ) | -1.2 | % | ||||||||||
| Securities available for sale | 1,621,659 | 1,702,299 | 1,871,883 | (80,640 | ) | -4.7 | % | (250,224 | ) | -13.4 | % | ||||||||||||||
| Securities held to maturity | 1,380,487 | 1,415,025 | 1,458,665 | (34,538 | ) | -2.4 | % | (78,178 | ) | -5.4 | % | ||||||||||||||
| Loans held for sale (LHFS) | 185,698 | 172,937 | 181,094 | 12,761 | 7.4 | % | 4,604 | 2.5 | % | ||||||||||||||||
| Loans held for investment (LHFI) | 13,155,418 | 13,057,943 | 12,613,967 | 97,475 | 0.7 | % | 541,451 | 4.3 | % | ||||||||||||||||
| ACL LHFI | (154,685 | ) | (142,998 | ) | (129,298 | ) | (11,687 | ) | -8.2 | % | (25,387 | ) | -19.6 | % | |||||||||||
| Net LHFI | 13,000,733 | 12,914,945 | 12,484,669 | 85,788 | 0.7 | % | 516,064 | 4.1 | % | ||||||||||||||||
| Premises and equipment, net | 232,681 | 232,630 | 227,293 | 51 | 0.0 | % | 5,388 | 2.4 | % | ||||||||||||||||
| Mortgage servicing rights | 136,658 | 138,044 | 134,350 | (1,386 | ) | -1.0 | % | 2,308 | 1.7 | % | |||||||||||||||
| Goodwill | 334,605 | 334,605 | 334,605 | - | 0.0 | % | - | 0.0 | % | ||||||||||||||||
| Identifiable intangible assets | 181 | 208 | 303 | (27 | ) | -13.0 | % | (122 | ) | -40.3 | % | ||||||||||||||
| Other real estate | 6,586 | 7,620 | 1,137 | (1,034 | ) | -13.6 | % | 5,449 | n/m | ||||||||||||||||
| Operating lease right-of-use assets | 36,925 | 34,324 | 35,561 | 2,601 | 7.6 | % | 1,364 | 3.8 | % | ||||||||||||||||
| Other assets | 694,133 | 744,821 | 783,457 | (50,688 | ) | -6.8 | % | (89,324 | ) | -11.4 | % | ||||||||||||||
| Assets of discontinued operations | - | 73,093 | 77,757 | (73,093 | ) | -100.0 | % | (77,757 | ) | -100.0 | % | ||||||||||||||
| Total assets | $ | 18,452,487 | $ | 18,376,612 | $ | 18,422,626 | $ | 75,875 | 0.4 | % | $ | 29,861 | 0.2 | % | |||||||||||
| Deposits: | |||||||||||||||||||||||||
| Noninterest-bearing | $ | 3,153,506 | $ | 3,039,652 | $ | 3,461,073 | $ | 113,854 | 3.7 | % | $ | (307,567 | ) | -8.9 | % | ||||||||||
| Interest-bearing | 12,309,382 | 12,298,905 | 11,452,827 | 10,477 | 0.1 | % | 856,555 | 7.5 | % | ||||||||||||||||
| Total deposits | 15,462,888 | 15,338,557 | 14,913,900 | 124,331 | 0.8 | % | 548,988 | 3.7 | % | ||||||||||||||||
| Fed funds purchased and repurchases | 314,121 | 393,215 | 311,179 | (79,094 | ) | -20.1 | % | 2,942 | 0.9 | % | |||||||||||||||
| Other borrowings | 336,687 | 482,027 | 1,056,714 | (145,340 | ) | -30.2 | % | (720,027 | ) | -68.1 | % | ||||||||||||||
| Subordinated notes | 123,592 | 123,537 | 123,372 | 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 | 30,265 | 33,865 | 34,841 | (3,600 | ) | -10.6 | % | (4,576 | ) | -13.1 | % | ||||||||||||||
| Operating lease liabilities | 40,517 | 37,792 | 38,172 | 2,725 | 7.2 | % | 2,345 | 6.1 | % | ||||||||||||||||
| Other liabilities | 203,420 | 207,583 | 299,481 | (4,163 | ) | -2.0 | % | (96,061 | ) | -32.1 | % | ||||||||||||||
| Liabilities of discontinued operations | - | 15,581 | 11,918 | (15,581 | ) | -100.0 | % | (11,918 | ) | -100.0 | % | ||||||||||||||
| Total liabilities | 16,573,346 | 16,694,013 | 16,851,433 | (120,667 | ) | -0.7 | % | (278,087 | ) | -1.7 | % | ||||||||||||||
| Common stock | 12,753 | 12,747 | 12,724 | 6 | 0.0 | % | 29 | 0.2 | % | ||||||||||||||||
| Capital surplus | 161,834 | 160,521 | 156,834 | 1,313 | 0.8 | % | 5,000 | 3.2 | % | ||||||||||||||||
| Retained earnings | 1,796,111 | 1,736,485 | 1,667,339 | 59,626 | 3.4 | % | 128,772 | 7.7 | % | ||||||||||||||||
| Accumulated other comprehensive | |||||||||||||||||||||||||
| income (loss), net of tax | (91,557 | ) | (227,154 | ) | (265,704 | ) | 135,597 | 59.7 | % | 174,147 | 65.5 | % | |||||||||||||
| Total shareholders' equity | 1,879,141 | 1,682,599 | 1,571,193 | 196,542 | 11.7 | % | 307,948 | 19.6 | % | ||||||||||||||||
| Total liabilities and equity | $ | 18,452,487 | $ | 18,376,612 | $ | 18,422,626 | $ | 75,875 | 0.4 | % | $ | 29,861 | 0.2 | % | |||||||||||
| n/m - percentage changes greater than +/- 100% are considered not meaningful | |||||||||||||||||||||||||
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||||||||||
| June 30, 2024 | ||||||||||||||||||||||||
| ($ in thousands except per share amounts) | ||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||
| Quarter Ended | Linked Quarter | Year over Year | ||||||||||||||||||||||
| INCOME STATEMENTS | 6/30/2024 | 3/31/2024 | 6/30/2023 | $ Change | % Change | $ Change | % Change | |||||||||||||||||
| Interest and fees on LHFS & LHFI-FTE | $ | 216,399 | $ | 209,456 | $ | 192,941 | $ | 6,943 | 3.3 | % | $ | 23,458 | 12.2 | % | ||||||||||
| Interest on securities-taxable | 17,929 | 15,634 | 16,779 | 2,295 | 14.7 | % | 1,150 | 6.9 | % | |||||||||||||||
| Interest on securities-tax exempt-FTE | 1 | 4 | 69 | (3 | ) | -75.0 | % | (68 | ) | -98.6 | % | |||||||||||||
| Interest on fed funds sold and reverse repurchases | 2 | 1 | 45 | 1 | 100.0 | % | (43 | ) | -95.6 | % | ||||||||||||||
| Other interest income | 8,124 | 8,110 | 12,077 | 14 | 0.2 | % | (3,953 | ) | -32.7 | % | ||||||||||||||
| Total interest income-FTE | 242,455 | 233,205 | 221,911 | 9,250 | 4.0 | % | 20,544 | 9.3 | % | |||||||||||||||
| Interest on deposits | 83,681 | 83,716 | 54,409 | (35 | ) | 0.0 | % | 29,272 | 53.8 | % | ||||||||||||||
| Interest on fed funds purchased and repurchases | 5,663 | 5,591 | 4,865 | 72 | 1.3 | % | 798 | 16.4 | % | |||||||||||||||
| Other interest expense | 8,778 | 7,703 | 19,350 | 1,075 | 14.0 | % | (10,572 | ) | -54.6 | % | ||||||||||||||
| Total interest expense | 98,122 | 97,010 | 78,624 | 1,112 | 1.1 | % | 19,498 | 24.8 | % | |||||||||||||||
| Net interest income-FTE | 144,333 | 136,195 | 143,287 | 8,138 | 6.0 | % | 1,046 | 0.7 | % | |||||||||||||||
| Provision for credit losses (PCL), LHFI | 14,696 | 7,708 | 8,211 | 6,988 | 90.7 | % | 6,485 | 79.0 | % | |||||||||||||||
| PCL, off-balance sheet credit exposures | (3,600 | ) | (192 | ) | 245 | (3,408 | ) | n/m | (3,845 | ) | n/m | |||||||||||||
| PCL, LHFI sale of 1-4 family mortgage loans | 8,633 | - | - | 8,633 | n/m | 8,633 | n/m | |||||||||||||||||
| Net interest income after provision-FTE | 124,604 | 128,679 | 134,831 | (4,075 | ) | 3.2 | % | (10,227 | ) | -7.6 | % | |||||||||||||
| Service charges on deposit accounts | 10,924 | 10,958 | 10,695 | (34 | ) | -0.3 | % | 229 | 2.1 | % | ||||||||||||||
| Bank card and other fees | 9,225 | 7,428 | 8,917 | 1,797 | 24.2 | % | 308 | 3.5 | % | |||||||||||||||
| Mortgage banking, net | 4,204 | 8,915 | 6,600 | (4,711 | ) | -52.8 | % | (2,396 | ) | -36.3 | % | |||||||||||||
| Wealth management | 9,692 | 8,952 | 8,882 | 740 | 8.3 | % | 810 | 9.1 | % | |||||||||||||||
| Other, net | 7,461 | 3,102 | 2,735 | 4,359 | n/m | 4,726 | n/m | |||||||||||||||||
| Securities gains (losses), net | (182,792 | ) | - | - | (182,792 | ) | n/m | (182,792 | ) | n/m | ||||||||||||||
| Total noninterest income (loss) | (141,286 | ) | 39,355 | 37,829 | (180,641 | ) | n/m | (179,115 | ) | n/m | ||||||||||||||
| Salaries and employee benefits | 64,838 | 65,487 | 66,799 | (649 | ) | -1.0 | % | (1,961 | ) | -2.9 | % | |||||||||||||
| Services and fees | 24,743 | 24,431 | 27,821 | 312 | 1.3 | % | (3,078 | ) | -11.1 | % | ||||||||||||||
| Net occupancy-premises | 7,265 | 7,270 | 6,897 | (5 | ) | -0.1 | % | 368 | 5.3 | % | ||||||||||||||
| Equipment expense | 6,241 | 6,325 | 6,337 | (84 | ) | -1.3 | % | (96 | ) | -1.5 | % | |||||||||||||
| Other expense | 15,239 | 16,151 | 13,767 | (912 | ) | -5.6 | % | 1,472 | 10.7 | % | ||||||||||||||
| Total noninterest expense | 118,326 | 119,664 | 121,621 | (1,338 | ) | -1.1 | % | (3,295 | ) | -2.7 | % | |||||||||||||
| Income (loss) from continuing operations before | ||||||||||||||||||||||||
| income taxes and tax eq adj | (135,008 | ) | 48,370 | 51,039 | (183,378 | ) | n/m | (186,047 | ) | n/m | ||||||||||||||
| Tax equivalent adjustment | 3,304 | 3,365 | 3,383 | (61 | ) | -1.8 | % | (79 | ) | -2.3 | % | |||||||||||||
| Income (loss) from continuing operations before | ||||||||||||||||||||||||
| income taxes | (138,312 | ) | 45,005 | 47,656 | (183,317 | ) | n/m | (185,968 | ) | n/m | ||||||||||||||
| Income taxes from continuing operations | (37,707 | ) | 6,832 | 6,452 | (44,539 | ) | n/m | (44,159 | ) | n/m | ||||||||||||||
| Income (loss) from continuing operations | (100,605 | ) | 38,173 | 41,204 | (138,778 | ) | n/m | (141,809 | ) | n/m | ||||||||||||||
| Income from discontinued operations | ||||||||||||||||||||||||
| (discont. ops) before income taxes | 232,640 | 4,512 | 5,127 | 228,128 | n/m | 227,513 | n/m | |||||||||||||||||
| Income taxes from discont. ops | 58,203 | 1,150 | 1,294 | 57,053 | n/m | 56,909 | n/m | |||||||||||||||||
| Income from discont. ops | 174,437 | 3,362 | 3,833 | 171,075 | n/m | 170,604 | n/m | |||||||||||||||||
| Net income | $ | 73,832 | $ | 41,535 | $ | 45,037 | $ | 32,297 | 77.8 | % | $ | 28,795 | 63.9 | % | ||||||||||
| Per share data (1) | ||||||||||||||||||||||||
| Basic earnings (loss) per share from | ||||||||||||||||||||||||
| continuing operations | $ | (1.64 | ) | $ | 0.62 | $ | 0.67 | $ | (2.26 | ) | n/m | $ | (2.31 | ) | n/m | |||||||||
| Basic earnings per share from discont. ops | $ | 2.85 | $ | 0.05 | $ | 0.06 | $ | 2.80 | n/m | $ | 2.79 | n/m | ||||||||||||
| Basic earnings per share - total | $ | 1.21 | $ | 0.68 | $ | 0.74 | $ | 0.53 | 77.9 | % | $ | 0.47 | 63.5 | % | ||||||||||
| Diluted earnings (loss) per share from | ||||||||||||||||||||||||
| continuing operations | $ | (1.64 | ) | $ | 0.62 | $ | 0.67 | $ | (2.26 | ) | n/m | $ | (2.31 | ) | n/m | |||||||||
| Diluted earnings per share from discont. ops | $ | 2.84 | $ | 0.05 | $ | 0.06 | $ | 2.79 | n/m | $ | 2.78 | n/m | ||||||||||||
| Diluted earnings per share - total | $ | 1.20 | $ | 0.68 | $ | 0.74 | $ | 0.52 | 76.5 | % | $ | 0.46 | 62.2 | % | ||||||||||
| Dividends per share | $ | 0.23 | $ | 0.23 | $ | 0.23 | - | 0.0 | % | - | 0.0 | % | ||||||||||||
| Weighted average shares outstanding | ||||||||||||||||||||||||
| Basic | 61,196,820 | 61,128,425 | 61,063,277 | |||||||||||||||||||||
| Diluted | 61,415,957 | 61,348,364 | 61,230,031 | |||||||||||||||||||||
| Period end shares outstanding | 61,205,969 | 61,178,366 | 61,069,036 | |||||||||||||||||||||
| (1) Due to rounding, earnings (loss) per share from continuing operations and discontinued operations may not sum to earnings per share from net income. | ||||||||||||||||||||||||
| n/m - percentage changes greater than +/- 100% are considered not meaningful | ||||||||||||||||||||||||
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||||||||
| June 30, 2024 | |||||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||
| Quarter Ended | Linked Quarter | Year over Year | |||||||||||||||||||||||
| NONPERFORMING ASSETS | 6/30/2024 | 3/31/2024 | 6/30/2023 | $ Change | % Change | $ Change | % Change | ||||||||||||||||||
| Nonaccrual LHFI | |||||||||||||||||||||||||
| Alabama (1) | $ | 26,222 | $ | 23,261 | $ | 11,058 | $ | 2,961 | 12.7 | % | $ | 15,164 | n/m | ||||||||||||
| Florida | 614 | 585 | 334 | 29 | 5.0 | % | 280 | 83.8 | % | ||||||||||||||||
| Mississippi (2) | 14,773 | 59,059 | 36,288 | (44,286 | ) | -75.0 | % | (21,515 | ) | -59.3 | % | ||||||||||||||
| Tennessee (3) | 2,084 | 1,800 | 5,088 | 284 | 15.8 | % | (3,004 | ) | -59.0 | % | |||||||||||||||
| Texas | 599 | 13,646 | 22,259 | (13,047 | ) | -95.6 | % | (21,660 | ) | -97.3 | % | ||||||||||||||
| Total nonaccrual LHFI | 44,292 | 98,351 | 75,027 | (54,059 | ) | -55.0 | % | (30,735 | ) | -41.0 | % | ||||||||||||||
| Other real estate | |||||||||||||||||||||||||
| Alabama (1) | 485 | 1,050 | - | (565 | ) | -53.8 | % | 485 | n/m | ||||||||||||||||
| Florida | - | 71 | - | (71 | ) | -100.0 | % | - | n/m | ||||||||||||||||
| Mississippi (2) | 1,787 | 2,870 | 1,137 | (1,083 | ) | -37.7 | % | 650 | 57.2 | % | |||||||||||||||
| Tennessee (3) | 86 | 86 | - | - | 0.0 | % | 86 | n/m | |||||||||||||||||
| Texas | 4,228 | 3,543 | - | 685 | 19.3 | % | 4,228 | n/m | |||||||||||||||||
| Total other real estate | 6,586 | 7,620 | 1,137 | (1,034 | ) | -13.6 | % | 5,449 | n/m | ||||||||||||||||
| Total nonperforming assets | $ | 50,878 | $ | 105,971 | $ | 76,164 | $ | (55,093 | ) | -52.0 | % | $ | (25,286 | ) | -33.2 | % | |||||||||
| LOANS PAST DUE OVER 90 DAYS | |||||||||||||||||||||||||
| LHFI | $ | 5,413 | $ | 5,243 | $ | 3,911 | $ | 170 | 3.2 | % | $ | 1,502 | 38.4 | % | |||||||||||
| LHFS-Guaranteed GNMA serviced loans | |||||||||||||||||||||||||
| (no obligation to repurchase) | $ | 58,079 | $ | 56,530 | $ | 35,766 | $ | 1,549 | 2.7 | % | $ | 22,313 | 62.4 | % | |||||||||||
| Quarter Ended | Linked Quarter | Year over Year | |||||||||||||||||||||||
| ACL LHFI | 6/30/2024 | 3/31/2024 | 6/30/2023 | $ Change | % Change | $ Change | % Change | ||||||||||||||||||
| Beginning Balance | $ | 142,998 | $ | 139,367 | $ | 122,239 | $ | 3,631 | 2.6 | % | $ | 20,759 | 17.0 | % | |||||||||||
| PCL, LHFI | 14,696 | 7,708 | 8,211 | 6,988 | 90.7 | % | 6,485 | 79.0 | % | ||||||||||||||||
| PCL, LHFI sale of 1-4 family mortgage loans | 8,633 | - | - | 8,633 | n/m | 8,633 | n/m | ||||||||||||||||||
| Charge-offs, sale of 1-4 family mortgage loans | (8,633 | ) | - | - | (8,633 | ) | n/m | (8,633 | ) | n/m | |||||||||||||||
| Charge-offs | (5,120 | ) | (6,324 | ) | (2,773 | ) | 1,204 | 19.0 | % | (2,347 | ) | 84.6 | % | ||||||||||||
| Recoveries | 2,111 | 2,247 | 1,621 | (136 | ) | -6.1 | % | 490 | 30.2 | % | |||||||||||||||
| Net (charge-offs) recoveries | (11,642 | ) | (4,077 | ) | (1,152 | ) | (7,565 | ) | n/m | (10,490 | ) | n/m | |||||||||||||
| Ending Balance | $ | 154,685 | $ | 142,998 | $ | 129,298 | $ | 11,687 | 8.2 | % | $ | 25,387 | 19.6 | % | |||||||||||
| NET (CHARGE-OFFS) RECOVERIES | |||||||||||||||||||||||||
| Alabama (1) | $ | 59 | $ | (341 | ) | $ | (141 | ) | $ | 400 | n/m | $ | 200 | n/m | |||||||||||
| Florida | 4 | 277 | (35 | ) | (273 | ) | -98.6 | % | 39 | n/m | |||||||||||||||
| Mississippi (2) | (9,112 | ) | (1,489 | ) | (762 | ) | (7,623 | ) | n/m | (8,350 | ) | n/m | |||||||||||||
| Tennessee (3) | (122 | ) | (179 | ) | (166 | ) | 57 | 31.8 | % | 44 | 26.5 | % | |||||||||||||
| Texas | (2,471 | ) | (2,345 | ) | (48 | ) | (126 | ) | -5.4 | % | (2,423 | ) | n/m | ||||||||||||
| Total net (charge-offs) recoveries | $ | (11,642 | ) | $ | (4,077 | ) | $ | (1,152 | ) | $ | (7,565 | ) | n/m | $ | (10,490 | ) | 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 | ||||||||||||||||||||||||||||
| June 30, 2024 | ||||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||||||||||
| AVERAGE BALANCES | 6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 6/30/2024 | 6/30/2023 | |||||||||||||||||||||
| Securities AFS-taxable | $ | 1,866,227 | $ | 1,927,619 | $ | 1,986,825 | $ | 2,049,006 | $ | 2,140,505 | $ | 1,896,923 | $ | 2,163,684 | ||||||||||||||
| Securities AFS-nontaxable | - | - | 4,246 | 4,779 | 4,796 | - | 4,804 | |||||||||||||||||||||
| Securities HTM-taxable | 1,421,246 | 1,418,476 | 1,430,169 | 1,445,895 | 1,463,086 | 1,419,861 | 1,471,140 | |||||||||||||||||||||
| Securities HTM-nontaxable | 112 | 340 | 340 | 907 | 1,718 | 226 | 3,106 | |||||||||||||||||||||
| Total securities | 3,287,585 | 3,346,435 | 3,421,580 | 3,500,587 | 3,610,105 | 3,317,010 | 3,642,734 | |||||||||||||||||||||
| Loans (includes loans held for sale) | 13,309,127 | 13,169,805 | 13,010,028 | 12,926,942 | 12,732,057 | 13,239,466 | 12,631,810 | |||||||||||||||||||||
| Fed funds sold and reverse repurchases | 110 | 114 | 121 | 230 | 3,275 | 112 | 2,829 | |||||||||||||||||||||
| Other earning assets | 592,625 | 571,215 | 670,477 | 682,644 | 903,027 | 581,920 | 780,657 | |||||||||||||||||||||
| Total earning assets | 17,189,447 | 17,087,569 | 17,102,206 | 17,110,403 | 17,248,464 | 17,138,508 | 17,058,030 | |||||||||||||||||||||
| ACL LHFI | (143,245 | ) | (138,711 | ) | (133,742 | ) | (127,915 | ) | (121,960 | ) | (140,978 | ) | (120,974 | ) | ||||||||||||||
| Other assets | 1,740,307 | 1,730,521 | 1,749,069 | 1,721,310 | 1,648,583 | 1,735,414 | 1,700,643 | |||||||||||||||||||||
| Total assets | $ | 18,786,509 | $ | 18,679,379 | $ | 18,717,533 | $ | 18,703,798 | $ | 18,775,087 | $ | 18,732,944 | $ | 18,637,699 | ||||||||||||||
| Interest-bearing demand deposits | $ | 5,222,369 | $ | 5,291,779 | $ | 5,053,935 | $ | 4,875,714 | $ | 4,803,737 | $ | 5,257,074 | $ | 4,777,591 | ||||||||||||||
| Savings deposits | 3,653,966 | 3,686,027 | 3,526,600 | 3,642,158 | 4,002,134 | 3,669,997 | 4,097,420 | |||||||||||||||||||||
| Time deposits | 3,346,046 | 3,321,601 | 3,427,384 | 3,075,224 | 2,335,752 | 3,333,824 | 2,122,784 | |||||||||||||||||||||
| Total interest-bearing deposits | 12,222,381 | 12,299,407 | 12,007,919 | 11,593,096 | 11,141,623 | 12,260,895 | 10,997,795 | |||||||||||||||||||||
| Fed funds purchased and repurchases | 434,760 | 428,127 | 403,041 | 414,696 | 389,834 | 431,444 | 413,055 | |||||||||||||||||||||
| Other borrowings | 534,350 | 463,459 | 590,765 | 912,151 | 1,330,010 | 498,905 | 1,221,032 | |||||||||||||||||||||
| Subordinated notes | 123,556 | 123,501 | 123,446 | 123,391 | 123,337 | 123,529 | 123,309 | |||||||||||||||||||||
| Junior subordinated debt securities | 61,856 | 61,856 | 61,856 | 61,856 | 61,856 | 61,856 | 61,856 | |||||||||||||||||||||
| Total interest-bearing liabilities | 13,376,903 | 13,376,350 | 13,187,027 | 13,105,190 | 13,046,660 | 13,376,629 | 12,817,047 | |||||||||||||||||||||
| Noninterest-bearing deposits | 3,183,524 | 3,120,566 | 3,296,351 | 3,429,815 | 3,595,927 | 3,152,045 | 3,703,987 | |||||||||||||||||||||
| Other liabilities | 498,593 | 505,942 | 641,662 | 585,908 | 552,209 | 502,265 | 564,450 | |||||||||||||||||||||
| Total liabilities | 17,059,020 | 17,002,858 | 17,125,040 | 17,120,913 | 17,194,796 | 17,030,939 | 17,085,484 | |||||||||||||||||||||
| Shareholders' equity | 1,727,489 | 1,676,521 | 1,592,493 | 1,582,885 | 1,580,291 | 1,702,005 | 1,552,215 | |||||||||||||||||||||
| Total liabilities and equity | $ | 18,786,509 | $ | 18,679,379 | $ | 18,717,533 | $ | 18,703,798 | $ | 18,775,087 | $ | 18,732,944 | $ | 18,637,699 | ||||||||||||||
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||||||
| June 30, 2024 | ||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| PERIOD END BALANCES | 6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | |||||||||||||||
| Cash and due from banks | $ | 822,141 | $ | 606,061 | $ | 975,343 | $ | 750,292 | $ | 831,852 | ||||||||||
| Securities available for sale | 1,621,659 | 1,702,299 | 1,762,878 | 1,766,174 | 1,871,883 | |||||||||||||||
| Securities held to maturity | 1,380,487 | 1,415,025 | 1,426,279 | 1,438,287 | 1,458,665 | |||||||||||||||
| LHFS | 185,698 | 172,937 | 184,812 | 169,244 | 181,094 | |||||||||||||||
| LHFI | 13,155,418 | 13,057,943 | 12,950,524 | 12,810,259 | 12,613,967 | |||||||||||||||
| ACL LHFI | (154,685 | ) | (142,998 | ) | (139,367 | ) | (134,031 | ) | (129,298 | ) | ||||||||||
| Net LHFI | 13,000,733 | 12,914,945 | 12,811,157 | 12,676,228 | 12,484,669 | |||||||||||||||
| Premises and equipment, net | 232,681 | 232,630 | 232,229 | 230,402 | 227,293 | |||||||||||||||
| Mortgage servicing rights | 136,658 | 138,044 | 131,870 | 142,379 | 134,350 | |||||||||||||||
| Goodwill | 334,605 | 334,605 | 334,605 | 334,605 | 334,605 | |||||||||||||||
| Identifiable intangible assets | 181 | 208 | 236 | 269 | 303 | |||||||||||||||
| Other real estate | 6,586 | 7,620 | 6,867 | 5,485 | 1,137 | |||||||||||||||
| Operating lease right-of-use assets | 36,925 | 34,324 | 35,711 | 37,115 | 35,561 | |||||||||||||||
| Other assets | 694,133 | 744,821 | 752,568 | 770,684 | 783,457 | |||||||||||||||
| Assets of discontinued operations | - | 73,093 | 67,634 | 69,675 | 77,757 | |||||||||||||||
| Total assets | $ | 18,452,487 | $ | 18,376,612 | $ | 18,722,189 | $ | 18,390,839 | $ | 18,422,626 | ||||||||||
| Deposits: | ||||||||||||||||||||
| Noninterest-bearing | $ | 3,153,506 | $ | 3,039,652 | $ | 3,197,620 | $ | 3,320,124 | $ | 3,461,073 | ||||||||||
| Interest-bearing | 12,309,382 | 12,298,905 | 12,372,143 | 11,781,799 | 11,452,827 | |||||||||||||||
| Total deposits | 15,462,888 | 15,338,557 | 15,569,763 | 15,101,923 | 14,913,900 | |||||||||||||||
| Fed funds purchased and repurchases | 314,121 | 393,215 | 405,745 | 321,799 | 311,179 | |||||||||||||||
| Other borrowings | 336,687 | 482,027 | 483,230 | 793,193 | 1,056,714 | |||||||||||||||
| Subordinated notes | 123,592 | 123,537 | 123,482 | 123,427 | 123,372 | |||||||||||||||
| Junior subordinated debt securities | 61,856 | 61,856 | 61,856 | 61,856 | 61,856 | |||||||||||||||
| ACL on off-balance sheet credit exposures | 30,265 | 33,865 | 34,057 | 34,945 | 34,841 | |||||||||||||||
| Operating lease liabilities | 40,517 | 37,792 | 39,097 | 40,150 | 38,172 | |||||||||||||||
| Other liabilities | 203,420 | 207,583 | 331,085 | 331,066 | 299,481 | |||||||||||||||
| Liabilities of discontinued operations | - | 15,581 | 12,027 | 12,129 | 11,918 | |||||||||||||||
| Total liabilities | 16,573,346 | 16,694,013 | 17,060,342 | 16,820,488 | 16,851,433 | |||||||||||||||
| Common stock | 12,753 | 12,747 | 12,725 | 12,724 | 12,724 | |||||||||||||||
| Capital surplus | 161,834 | 160,521 | 159,688 | 158,316 | 156,834 | |||||||||||||||
| Retained earnings | 1,796,111 | 1,736,485 | 1,709,157 | 1,687,199 | 1,667,339 | |||||||||||||||
| Accumulated other comprehensive income (loss), | ||||||||||||||||||||
| net of tax | (91,557 | ) | (227,154 | ) | (219,723 | ) | (287,888 | ) | (265,704 | ) | ||||||||||
| Total shareholders' equity | 1,879,141 | 1,682,599 | 1,661,847 | 1,570,351 | 1,571,193 | |||||||||||||||
| Total liabilities and equity | $ | 18,452,487 | $ | 18,376,612 | $ | 18,722,189 | $ | 18,390,839 | $ | 18,422,626 | ||||||||||
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||||||||||||
| June 30, 2024 | ||||||||||||||||||||||||||
| ($ in thousands except per share data) | ||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||||||||
| INCOME STATEMENTS | 6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 6/30/2024 | 6/30/2023 | |||||||||||||||||||
| Interest and fees on LHFS & LHFI-FTE | $ | 216,399 | $ | 209,456 | $ | 210,288 | $ | 206,523 | $ | 192,941 | $ | 425,855 | $ | 371,908 | ||||||||||||
| Interest on securities-taxable | 17,929 | 15,634 | 15,936 | 16,624 | 16,779 | 33,563 | 33,540 | |||||||||||||||||||
| Interest on securities-tax exempt-FTE | 1 | 4 | 44 | 58 | 69 | 5 | 161 | |||||||||||||||||||
| Interest on fed funds sold and reverse repurchases | 2 | 1 | 2 | 3 | 45 | 3 | 75 | |||||||||||||||||||
| Other interest income | 8,124 | 8,110 | 9,918 | 8,613 | 12,077 | 16,234 | 18,604 | |||||||||||||||||||
| Total interest income-FTE | 242,455 | 233,205 | 236,188 | 231,821 | 221,911 | 475,660 | 424,288 | |||||||||||||||||||
| Interest on deposits | 83,681 | 83,716 | 80,847 | 69,797 | 54,409 | 167,397 | 95,307 | |||||||||||||||||||
| Interest on fed funds purchased and repurchases | 5,663 | 5,591 | 5,347 | 5,375 | 4,865 | 11,254 | 9,697 | |||||||||||||||||||
| Other interest expense | 8,778 | 7,703 | 9,946 | 14,713 | 19,350 | 16,481 | 34,925 | |||||||||||||||||||
| Total interest expense | 98,122 | 97,010 | 96,140 | 89,885 | 78,624 | 195,132 | 139,929 | |||||||||||||||||||
| Net interest income-FTE | 144,333 | 136,195 | 140,048 | 141,936 | 143,287 | 280,528 | 284,359 | |||||||||||||||||||
| PCL, LHFI | 14,696 | 7,708 | 7,585 | 8,322 | 8,211 | 22,404 | 11,455 | |||||||||||||||||||
| PCL, off-balance sheet credit exposures | (3,600 | ) | (192 | ) | (888 | ) | 104 | 245 | (3,792 | ) | (1,997 | ) | ||||||||||||||
| PCL, LHFI sale of 1-4 family mortgage loans | 8,633 | - | - | - | - | 8,633 | - | |||||||||||||||||||
| Net interest income after provision-FTE | 124,604 | 128,679 | 133,351 | 133,510 | 134,831 | 253,283 | 274,901 | |||||||||||||||||||
| Service charges on deposit accounts | 10,924 | 10,958 | 11,311 | 11,074 | 10,695 | 21,882 | 21,031 | |||||||||||||||||||
| Bank card and other fees | 9,225 | 7,428 | 8,502 | 8,217 | 8,917 | 16,653 | 16,720 | |||||||||||||||||||
| Mortgage banking, net | 4,204 | 8,915 | 5,519 | 6,458 | 6,600 | 13,119 | 14,239 | |||||||||||||||||||
| Wealth management | 9,692 | 8,952 | 8,657 | 8,773 | 8,882 | 18,644 | 17,662 | |||||||||||||||||||
| Other, net | 7,461 | 3,102 | 2,577 | 2,399 | 2,735 | 10,563 | 5,255 | |||||||||||||||||||
| Securities gains (losses), net | (182,792 | ) | - | 39 | - | - | (182,792 | ) | - | |||||||||||||||||
| Total noninterest income (loss) | (141,286 | ) | 39,355 | 36,605 | 36,921 | 37,829 | (101,931 | ) | 74,907 | |||||||||||||||||
| Salaries and employee benefits | 64,838 | 65,487 | 69,326 | 67,374 | 66,799 | 130,325 | 131,571 | |||||||||||||||||||
| Services and fees | 24,743 | 24,431 | 27,478 | 27,472 | 27,821 | 49,174 | 52,855 | |||||||||||||||||||
| Net occupancy-premises | 7,265 | 7,270 | 7,144 | 7,151 | 6,897 | 14,535 | 14,212 | |||||||||||||||||||
| Equipment expense | 6,241 | 6,325 | 6,457 | 6,755 | 6,337 | 12,566 | 12,632 | |||||||||||||||||||
| Litigation settlement expense | - | - | - | 6,500 | - | - | - | |||||||||||||||||||
| Other expense | 15,239 | 16,151 | 15,790 | 15,039 | 13,767 | 31,390 | 27,940 | |||||||||||||||||||
| Total noninterest expense | 118,326 | 119,664 | 126,195 | 130,291 | 121,621 | 237,990 | 239,210 | |||||||||||||||||||
| Income (loss) from continuing operations before | ||||||||||||||||||||||||||
| income taxes and tax eq adj | (135,008 | ) | 48,370 | 43,761 | 40,140 | 51,039 | (86,638 | ) | 110,598 | |||||||||||||||||
| Tax equivalent adjustment | 3,304 | 3,365 | 3,306 | 3,299 | 3,383 | 6,669 | 6,860 | |||||||||||||||||||
| Income (loss) from continuing operations before | ||||||||||||||||||||||||||
| income taxes | (138,312 | ) | 45,005 | 40,455 | 36,841 | 47,656 | (93,307 | ) | 103,738 | |||||||||||||||||
| Income taxes from continuing operations | (37,707 | ) | 6,832 | 6,567 | 6,288 | 6,452 | (30,875 | ) | 14,889 | |||||||||||||||||
| Income (loss) from continuing operations | (100,605 | ) | 38,173 | 33,888 | 30,553 | 41,204 | (62,432 | ) | 88,849 | |||||||||||||||||
| Income from discontinued operations | ||||||||||||||||||||||||||
| (discont. ops) before income taxes | 232,640 | 4,512 | 2,965 | 4,649 | 5,127 | 237,152 | 8,688 | |||||||||||||||||||
| Income taxes from discontinued operations | 58,203 | 1,150 | 730 | 1,173 | 1,294 | 59,353 | 2,200 | |||||||||||||||||||
| Income from discont. ops | 174,437 | 3,362 | 2,235 | 3,476 | 3,833 | 177,799 | 6,488 | |||||||||||||||||||
| Net income | $ | 73,832 | $ | 41,535 | $ | 36,123 | $ | 34,029 | $ | 45,037 | $ | 115,367 | $ | 95,337 | ||||||||||||
| Per share data (1) | ||||||||||||||||||||||||||
| Basic earnings (loss) per share from continuing | ||||||||||||||||||||||||||
| operations | $ | (1.64 | ) | $ | 0.62 | $ | 0.55 | $ | 0.50 | $ | 0.67 | $ | (1.02 | ) | $ | 1.46 | ||||||||||
| Basic earnings per share from discont. ops | $ | 2.85 | $ | 0.05 | $ | 0.04 | $ | 0.06 | $ | 0.06 | $ | 2.91 | $ | 0.11 | ||||||||||||
| Basic earnings per share - total | $ | 1.21 | $ | 0.68 | $ | 0.59 | $ | 0.56 | $ | 0.74 | $ | 1.89 | $ | 1.56 | ||||||||||||
| Diluted earnings (loss) per share from continuing | ||||||||||||||||||||||||||
| operations | $ | (1.64 | ) | $ | 0.62 | $ | 0.55 | $ | 0.50 | $ | 0.67 | $ | (1.02 | ) | $ | 1.45 | ||||||||||
| Diluted earnings per share from discont. ops | $ | 2.84 | $ | 0.05 | $ | 0.04 | $ | 0.06 | $ | 0.06 | $ | 2.90 | $ | 0.11 | ||||||||||||
| Diluted earnings per share - total | $ | 1.20 | $ | 0.68 | $ | 0.59 | $ | 0.56 | $ | 0.74 | $ | 1.88 | $ | 1.56 | ||||||||||||
| Dividends per share | $ | 0.23 | $ | 0.23 | $ | 0.23 | $ | 0.23 | $ | 0.23 | $ | 0.46 | $ | 0.46 | ||||||||||||
| Weighted average shares outstanding | ||||||||||||||||||||||||||
| Basic | 61,196,820 | 61,128,425 | 61,070,481 | 61,069,750 | 61,063,277 | 61,162,623 | 61,037,312 | |||||||||||||||||||
| Diluted | 61,415,957 | 61,348,364 | 61,296,840 | 61,263,032 | 61,230,031 | 61,373,850 | 61,206,799 | |||||||||||||||||||
| Period end shares outstanding | 61,205,969 | 61,178,366 | 61,071,173 | 61,070,095 | 61,069,036 | 61,205,969 | 61,069,036 | |||||||||||||||||||
| (1) Due to rounding, earnings (loss) per share from continuing operations and discontinued operations may not sum to earnings per share from net income. | ||||||||||||||||||||||||||
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||||||||||||||
| June 30, 2024 | ||||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||||||||||
| NONPERFORMING ASSETS | 6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | |||||||||||||||||||||||
| Nonaccrual LHFI | ||||||||||||||||||||||||||||
| Alabama (1) | $ | 26,222 | $ | 23,261 | $ | 23,271 | $ | 23,530 | $ | 11,058 | ||||||||||||||||||
| Florida | 614 | 585 | 170 | 151 | 334 | |||||||||||||||||||||||
| Mississippi (2) | 14,773 | 59,059 | 54,615 | 45,050 | 36,288 | |||||||||||||||||||||||
| Tennessee (3) | 2,084 | 1,800 | 1,802 | 1,841 | 5,088 | |||||||||||||||||||||||
| Texas | 599 | 13,646 | 20,150 | 20,327 | 22,259 | |||||||||||||||||||||||
| Total nonaccrual LHFI | 44,292 | 98,351 | 100,008 | 90,899 | 75,027 | |||||||||||||||||||||||
| Other real estate | ||||||||||||||||||||||||||||
| Alabama (1) | 485 | 1,050 | 1,397 | 315 | - | |||||||||||||||||||||||
| Florida | - | 71 | - | - | - | |||||||||||||||||||||||
| Mississippi (2) | 1,787 | 2,870 | 1,242 | 942 | 1,137 | |||||||||||||||||||||||
| Tennessee (3) | 86 | 86 | - | - | - | |||||||||||||||||||||||
| Texas | 4,228 | 3,543 | 4,228 | 4,228 | - | |||||||||||||||||||||||
| Total other real estate | 6,586 | 7,620 | 6,867 | 5,485 | 1,137 | |||||||||||||||||||||||
| Total nonperforming assets | $ | 50,878 | $ | 105,971 | $ | 106,875 | $ | 96,384 | $ | 76,164 | ||||||||||||||||||
| LOANS PAST DUE OVER 90 DAYS | ||||||||||||||||||||||||||||
| LHFI | $ | 5,413 | $ | 5,243 | $ | 5,790 | $ | 3,804 | $ | 3,911 | ||||||||||||||||||
| LHFS-Guaranteed GNMA serviced loans | ||||||||||||||||||||||||||||
| (no obligation to repurchase) | $ | 58,079 | $ | 56,530 | $ | 51,243 | $ | 42,532 | $ | 35,766 | ||||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||||||||||
| ACL LHFI | 6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 6/30/2024 | 6/30/2023 | |||||||||||||||||||||
| Beginning Balance | $ | 142,998 | $ | 139,367 | $ | 134,031 | $ | 129,298 | $ | 122,239 | $ | 139,367 | $ | 120,214 | ||||||||||||||
| PCL, LHFI | 14,696 | 7,708 | 7,585 | 8,322 | 8,211 | 22,404 | 11,455 | |||||||||||||||||||||
| PCL, LHFI sale of 1-4 family mortgage loans | 8,633 | - | - | - | - | 8,633 | - | |||||||||||||||||||||
| Charge-offs, sale of 1-4 family mortgage loans | (8,633 | ) | - | - | - | - | (8,633 | ) | - | |||||||||||||||||||
| Charge-offs | (5,120 | ) | (6,324 | ) | (4,250 | ) | (7,496 | ) | (2,773 | ) | (11,444 | ) | (5,769 | ) | ||||||||||||||
| Recoveries | 2,111 | 2,247 | 2,001 | 3,907 | 1,621 | 4,358 | 3,398 | |||||||||||||||||||||
| Net (charge-offs) recoveries | (11,642 | ) | (4,077 | ) | (2,249 | ) | (3,589 | ) | (1,152 | ) | (15,719 | ) | (2,371 | ) | ||||||||||||||
| Ending Balance | $ | 154,685 | $ | 142,998 | $ | 139,367 | $ | 134,031 | $ | 129,298 | $ | 154,685 | $ | 129,298 | ||||||||||||||
| NET (CHARGE-OFFS) RECOVERIES | ||||||||||||||||||||||||||||
| Alabama (1) | $ | 59 | $ | (341 | ) | $ | (299 | ) | $ | (165 | ) | $ | (141 | ) | $ | (282 | ) | $ | (409 | ) | ||||||||
| Florida | 4 | 277 | 180 | 21 | (35 | ) | 281 | (71 | ) | |||||||||||||||||||
| Mississippi (2) | (9,112 | ) | (1,489 | ) | (1,943 | ) | (1,867 | ) | (762 | ) | (10,601 | ) | (1,537 | ) | ||||||||||||||
| Tennessee (3) | (122 | ) | (179 | ) | (193 | ) | 2,127 | (166 | ) | (301 | ) | (290 | ) | |||||||||||||||
| Texas | (2,471 | ) | (2,345 | ) | 6 | (3,705 | ) | (48 | ) | (4,816 | ) | (64 | ) | |||||||||||||||
| Total net (charge-offs) recoveries | $ | (11,642 | ) | $ | (4,077 | ) | $ | (2,249 | ) | $ | (3,589 | ) | $ | (1,152 | ) | $ | (15,719 | ) | $ | (2,371 | ) | |||||||
| (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 | ||||||||||||||||||||||||||
| June 30, 2024 | ||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||||||||
| FINANCIAL RATIOS AND OTHER DATA | 6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 6/30/2024 | 6/30/2023 | |||||||||||||||||||
| Return on average equity from continuing operations | -23.42 | % | 9.16 | % | 8.44 | % | 7.66 | % | 10.46 | % | -7.38 | % | 11.54 | % | ||||||||||||
| Return on average equity from adjusted | ||||||||||||||||||||||||||
| continuing operations (1) | 9.06 | % | 9.16 | % | 8.68 | % | 8.87 | % | 10.46 | % | 9.11 | % | 11.54 | % | ||||||||||||
| Return on average equity - total | 17.19 | % | 9.96 | % | 9.00 | % | 8.53 | % | 11.43 | % | 13.63 | % | 12.39 | % | ||||||||||||
| Return on average tangible equity from | ||||||||||||||||||||||||||
| continuing operations | -29.05 | % | 11.45 | % | 10.70 | % | 9.72 | % | 13.28 | % | -9.18 | % | 14.75 | % | ||||||||||||
| Return on average tangible equity from adjusted | ||||||||||||||||||||||||||
| continuing operations (1) | 11.14 | % | 11.45 | % | 10.98 | % | 11.25 | % | 13.28 | % | 11.29 | % | 14.75 | % | ||||||||||||
| Return on average tangible equity - total | 21.91 | % | 12.98 | % | 11.92 | % | 11.32 | % | 15.18 | % | 17.56 | % | 16.56 | % | ||||||||||||
| Return on average assets from continuing operations | -2.16 | % | 0.83 | % | 0.72 | % | 0.65 | % | 0.88 | % | -0.67 | % | 0.97 | % | ||||||||||||
| Return on average assets from adjusted | ||||||||||||||||||||||||||
| continuing operations (1) | 0.87 | % | 0.83 | % | 0.74 | % | 0.75 | % | 0.88 | % | 0.85 | % | 0.97 | % | ||||||||||||
| Return on average assets - total | 1.58 | % | 0.89 | % | 0.77 | % | 0.72 | % | 0.96 | % | 1.24 | % | 1.03 | % | ||||||||||||
| Interest margin - Yield - FTE | 5.67 | % | 5.49 | % | 5.48 | % | 5.38 | % | 5.16 | % | 5.58 | % | 5.02 | % | ||||||||||||
| Interest margin - Cost | 2.30 | % | 2.28 | % | 2.23 | % | 2.08 | % | 1.83 | % | 2.29 | % | 1.65 | % | ||||||||||||
| Net interest margin - FTE | 3.38 | % | 3.21 | % | 3.25 | % | 3.29 | % | 3.33 | % | 3.29 | % | 3.36 | % | ||||||||||||
| Efficiency ratio (2) | 63.81 | % | 66.90 | % | 69.76 | % | 68.27 | % | 66.12 | % | 65.32 | % | 65.52 | % | ||||||||||||
| Full-time equivalent employees | 2,515 | 2,712 | 2,757 | 2,756 | 2,761 | |||||||||||||||||||||
| CREDIT QUALITY RATIOS | ||||||||||||||||||||||||||
| Net (recoveries) charge-offs (excl sale of | ||||||||||||||||||||||||||
| 1-4 family mortgage loans) / average loans | 0.09 | % | 0.12 | % | 0.07 | % | 0.11 | % | 0.04 | % | 0.11 | % | 0.04 | % | ||||||||||||
| PCL, LHFI (excl PCL, LHFI sale of | ||||||||||||||||||||||||||
| 1-4 family mortgage loans) / average loans | 0.44 | % | 0.24 | % | 0.23 | % | 0.26 | % | 0.26 | % | 0.34 | % | 0.18 | % | ||||||||||||
| Nonaccrual LHFI / (LHFI + LHFS) | 0.33 | % | 0.74 | % | 0.76 | % | 0.70 | % | 0.59 | % | ||||||||||||||||
| Nonperforming assets / (LHFI + LHFS) | 0.38 | % | 0.80 | % | 0.81 | % | 0.74 | % | 0.60 | % | ||||||||||||||||
| Nonperforming assets / (LHFI + LHFS | ||||||||||||||||||||||||||
| + other real estate) | 0.38 | % | 0.80 | % | 0.81 | % | 0.74 | % | 0.60 | % | ||||||||||||||||
| ACL LHFI / LHFI | 1.18 | % | 1.10 | % | 1.08 | % | 1.05 | % | 1.03 | % | ||||||||||||||||
| ACL LHFI-commercial / commercial LHFI | 1.05 | % | 0.93 | % | 0.85 | % | 0.86 | % | 0.84 | % | ||||||||||||||||
| ACL LHFI-consumer / consumer and | ||||||||||||||||||||||||||
| home mortgage LHFI | 1.59 | % | 1.63 | % | 1.81 | % | 1.66 | % | 1.60 | % | ||||||||||||||||
| ACL LHFI / nonaccrual LHFI | 349.24 | % | 145.39 | % | 139.36 | % | 147.45 | % | 172.34 | % | ||||||||||||||||
| ACL LHFI / nonaccrual LHFI | ||||||||||||||||||||||||||
| (excl individually analyzed loans) | 840.20 | % | 235.29 | % | 249.31 | % | 273.60 | % | 301.44 | % | ||||||||||||||||
| CAPITAL RATIOS | ||||||||||||||||||||||||||
| Total equity / total assets | 10.18 | % | 9.16 | % | 8.88 | % | 8.54 | % | 8.53 | % | ||||||||||||||||
| Tangible equity / tangible assets | 8.52 | % | 7.47 | % | 7.22 | % | 6.84 | % | 6.83 | % | ||||||||||||||||
| Tangible equity / risk-weighted assets | 10.18 | % | 8.83 | % | 8.76 | % | 8.16 | % | 8.26 | % | ||||||||||||||||
| Tier 1 leverage ratio | 9.29 | % | 8.76 | % | 8.62 | % | 8.49 | % | 8.35 | % | ||||||||||||||||
| Common equity tier 1 capital ratio | 10.92 | % | 10.12 | % | 10.04 | % | 9.89 | % | 9.87 | % | ||||||||||||||||
| Tier 1 risk-based capital ratio | 11.31 | % | 10.51 | % | 10.44 | % | 10.29 | % | 10.27 | % | ||||||||||||||||
| Total risk-based capital ratio | 13.29 | % | 12.42 | % | 12.29 | % | 12.11 | % | 12.08 | % | ||||||||||||||||
| STOCK PERFORMANCE | ||||||||||||||||||||||||||
| Market value-Close | $ | 30.04 | $ | 28.11 | $ | 27.88 | $ | 21.73 | $ | 21.12 | ||||||||||||||||
| Book value | $ | 30.70 | $ | 27.50 | $ | 27.21 | $ | 25.71 | $ | 25.73 | ||||||||||||||||
| Tangible book value | $ | 25.23 | $ | 22.03 | $ | 21.73 | $ | 20.23 | $ | 20.24 | ||||||||||||||||
| (1) Adjusted continuing operations excludes significant non-routine transactions. See Note 7 - Non-GAAP Financials Measures in the Notes to the Consolidated Financials. | ||||||||||||||||||||||||||
(2) See Note 7 - 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 |
June 30, 2024 |
($ in thousands) |
(unaudited) |
Note 1 - Significant Non-Routine Transactions
Trustmark completed the following significant non-routine transactions during the second quarter of 2024:
- On May 31, 2024, Trustmark National Bank closed the sale of its wholly owned subsidiary, Fisher Brown Bottrell Insurance, Inc., (FBBI) to Marsh & McLennan Agency LLC, consistent with the terms as previously announced on April 23, 2024. Trustmark National Bank is a wholly owned subsidiary of Trustmark Corporation. Trustmark recognized a gain on the sale of $228.3 million ($171.2 million, net of taxes) in income from discontinued operations. The operations of FBBI are also included in discontinued operations for the current and prior periods.
- Trustmark restructured its investment securities portfolio by selling $1.561 billion of available for sale securities with an average yield of 1.36%, which generated a loss of $182.8 million ($137.1 million, net of taxes) and was recorded to noninterest income in securities gains (losses), net. Trustmark purchased $1.378 billion of available for sale securities with an average yield of 4.85%.
- Trustmark sold a portfolio of 1-4 family mortgage loans that were three payments delinquent and/or nonaccrual at the time of selection totaling $56.2 million, which resulted in a loss of $13.4 million ($10.1 million, net of taxes). The portion of the loss related to credit totaled $8.6 million and was recorded as adjustments to charge-offs and the provision for credit losses. The noncredit-related portion of the loss totaled $4.8 million and was recorded to noninterest income in other, net.
- On April 8, 2024, Visa commenced an initial exchange offer expiring on May 3, 2024, for any and all outstanding shares of Visa Class B-1 common stock (Visa B-1 shares). Holders participating in the exchange offer would receive a combination of Visa Class B-2 common stock (Visa B-2 shares) and Visa Class C common stock (Visa C shares) in exchange for Visa B-1 shares that are validly tendered and accepted for exchange by Visa. TNB tendered its 38.7 thousand Visa B-1 shares, which was accepted by Visa. In exchange for each Visa B-1 share that was validly tendered and accepted for exchange by Visa, TNB received 50.0% of a newly issued Visa B-2 share and newly issued Visa C shares equivalent in value to 50.0% of a Visa B-1 share. The Visa C shares that were received by TNB were recognized at fair value, which resulted in a gain of $8.1 million ($6.0 million, net of taxes) and recorded to noninterest income in other, net during the second quarter of 2024. The Visa B-2 shares were recorded at their nominal carrying value.
Note 2 - 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:
6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | ||||||||||||||||
SECURITIES AVAILABLE FOR SALE | ||||||||||||||||||||
U.S. Treasury securities | $ | 172,955 | $ | 372,424 | $ | 372,368 | $ | 363,476 | $ | 362,966 | ||||||||||
U.S. Government agency obligations | - | 5,594 | 5,792 | 6,780 | 6,999 | |||||||||||||||
Obligations of states and political subdivisions | - | - | - | 4,642 | 4,813 | |||||||||||||||
Mortgage-backed securities | ||||||||||||||||||||
Residential mortgage pass-through securities | ||||||||||||||||||||
Guaranteed by GNMA | 23,489 | 22,232 | 23,135 | 22,881 | 25,336 | |||||||||||||||
Issued by FNMA and FHLMC | 1,060,869 | 1,129,521 | 1,176,798 | 1,171,521 | 1,250,435 | |||||||||||||||
Other residential mortgage-backed securities | ||||||||||||||||||||
Issued or guaranteed by FNMA, FHLMC, or GNMA | - | 79,099 | 86,074 | 90,402 | 98,388 | |||||||||||||||
Commercial mortgage-backed securities | ||||||||||||||||||||
Issued or guaranteed by FNMA, FHLMC, or GNMA | 364,346 | 93,429 | 98,711 | 106,472 | 122,946 | |||||||||||||||
Total securities available for sale | $ | 1,621,659 | $ | 1,702,299 | $ | 1,762,878 | $ | 1,766,174 | $ | 1,871,883 | ||||||||||
SECURITIES HELD TO MATURITY | ||||||||||||||||||||
U.S. Treasury securities | $ | 29,455 | $ | 29,261 | $ | 29,068 | $ | 28,872 | $ | 28,679 | ||||||||||
Obligations of states and political subdivisions | - | 340 | 340 | 341 | 1,180 | |||||||||||||||
Mortgage-backed securities | ||||||||||||||||||||
Residential mortgage pass-through securities | ||||||||||||||||||||
Guaranteed by GNMA | 17,998 | 18,387 | 13,005 | 13,090 | 13,235 | |||||||||||||||
Issued by FNMA and FHLMC | 449,781 | 461,457 | 469,593 | 474,003 | 484,679 | |||||||||||||||
Other residential mortgage-backed securities | ||||||||||||||||||||
Issued or guaranteed by FNMA, FHLMC, or GNMA | 138,951 | 146,447 | 154,466 | 162,031 | 171,002 | |||||||||||||||
Commercial mortgage-backed securities | ||||||||||||||||||||
Issued or guaranteed by FNMA, FHLMC, or GNMA | 744,302 | 759,133 | 759,807 | 759,950 | 759,890 | |||||||||||||||
Total securities held to maturity | $ | 1,380,487 | $ | 1,415,025 | $ | 1,426,279 | $ | 1,438,287 | $ | 1,458,665 | ||||||||||
At June 30, 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 $52.1 million.
Management continues to focus on asset quality as one of the strategic goals of the securities portfolio, which is evidenced by the investment of 100.0% of the portfolio in U.S. Treasury securities, GSE-backed obligations and other Aaa rated securities as determined by Moody's. None of the securities owned by Trustmark are collateralized by assets which are considered sub-prime. Furthermore, outside of stock ownership in the Federal Home Loan Bank of Dallas and Federal Reserve Bank, Trustmark does not hold any other equity investment in a GSE.
TRUSTMARK CORPORATION AND SUBSIDIARIES |
NOTES TO CONSOLIDATED FINANCIALS |
June 30, 2024 |
($ in thousands) |
(unaudited) |
Note 3 - Loan Composition
LHFI consisted of the following during the periods presented:
LHFI BY TYPE | 6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | |||||||||||||||
Loans secured by real estate: | ||||||||||||||||||||
Construction, land development and other land loans | $ | 1,638,972 | $ | 1,539,461 | $ | 1,510,679 | $ | 1,609,326 | $ | 1,722,657 | ||||||||||
Secured by 1-4 family residential properties | 2,878,295 | 2,891,481 | 2,904,715 | 2,893,606 |
| 2,854,182 | ||||||||||||||
Secured by nonfarm, nonresidential properties | 3,598,647 | 3,543,235 | 3,489,434 | 3,569,671 | 3,471,728 | |||||||||||||||
Other real estate secured | 1,344,968 | 1,384,610 | 1,312,551 | 1,218,499 | 954,410 | |||||||||||||||
Commercial and industrial loans | 1,880,607 | 1,922,711 | 1,922,910 | 1,828,924 | 1,883,480 | |||||||||||||||
Consumer loans | 153,316 | 156,430 | 161,725 | 161,940 | 163,788 | |||||||||||||||
State and other political subdivision loans | 1,053,015 | 1,052,844 | 1,088,466 | 1,056,569 | 1,111,710 | |||||||||||||||
Other loans and leases | 607,598 | 567,171 | 560,044 | 471,724 | 452,012 | |||||||||||||||
LHFI | 13,155,418 | 13,057,943 | 12,950,524 | 12,810,259 | 12,613,967 | |||||||||||||||
ACL LHFI | (154,685 | ) | (142,998 | ) | (139,367 | ) | (134,031 | ) | (129,298 | ) | ||||||||||
Net LHFI | $ | 13,000,733 | $ | 12,914,945 | $ | 12,811,157 | $ | 12,676,228 | $ | 12,484,669 | ||||||||||
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:
June 30, 2024 | |||||||||||||||||||||||
LHFI - COMPOSITION BY REGION | Total | Alabama (1) | Florida | Mississippi
| Tennessee
| Texas | |||||||||||||||||
Loans secured by real estate: | |||||||||||||||||||||||
Construction, land development and other land loans | $ | 1,638,972 | $ | 832,891 | $ | 35,147 | $ | 366,893 | $ | 41,046 | $ | 362,995 | |||||||||||
Secured by 1-4 family residential properties | 2,878,295 | 152,184 | 60,268 | 2,546,223 | 83,469 | 36,151 | |||||||||||||||||
Secured by nonfarm, nonresidential properties | 3,598,647 | 1,052,737 | 226,977 | 1,512,307 | 133,835 | 672,791 | |||||||||||||||||
Other real estate secured | 1,344,968 | 560,797 | 1,703 | 370,854 | 6,384 | 405,230 | |||||||||||||||||
Commercial and industrial loans | 1,880,607 | 676,858 | 22,064 | 802,334 | 151,496 | 227,855 | |||||||||||||||||
Consumer loans | 153,316 | 21,806 | 7,084 | 93,505 | 16,814 | 14,107 | |||||||||||||||||
State and other political subdivision loans | 1,053,015 | 72,787 | 51,084 | 796,947 | 23,672 | 108,525 | |||||||||||||||||
Other loans and leases | 607,598 | 285,089 | 8,505 | 202,159 | 43,062 | 68,783 | |||||||||||||||||
Loans | $ | 13,155,418 | $ | 3,655,149 | $ | 412,832 | $ | 6,691,222 | $ | 499,778 | $ | 1,896,437 | |||||||||||
CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION | |||||||||||||||||||||||
Lots | $ | 72,597 | $ | 27,887 | $ | 7,284 | $ | 19,673 | $ | 6,506 | $ | 11,247 | |||||||||||
Development | 122,826 | 56,857 | 878 | 25,218 | 12,502 | 27,371 | |||||||||||||||||
Unimproved land | 104,436 | 19,762 | 12,051 | 27,149 | 7,859 | 37,615 | |||||||||||||||||
1-4 family construction | 316,669 | 171,134 | 10,214 | 91,849 | 14,179 | 29,293 | |||||||||||||||||
Other construction | 1,022,444 | 557,251 | 4,720 | 203,004 | - | 257,469 | |||||||||||||||||
Construction, land development and other land loans | $ | 1,638,972 | $ | 832,891 | $ | 35,147 | $ | 366,893 | $ | 41,046 | $ | 362,995 | |||||||||||
(1) Includes Georgia Loan Production Office. | |||||||||||||||||||||||
TRUSTMARK CORPORATION AND SUBSIDIARIES |
NOTES TO CONSOLIDATED FINANCIALS |
June 30, 2024 |
($ in thousands) |
(unaudited) |
Note 3 - Loan Composition (continued)
June 30, 2024 | ||||||||||||||||||||||||
Total | Alabama (1) | Florida | Mississippi
| Tennessee
| Texas | |||||||||||||||||||
LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION | ||||||||||||||||||||||||
Non-owner occupied: | ||||||||||||||||||||||||
Retail | $ | 331,174 | $ | 115,459 | $ | 22,998 | $ | 95,638 | $ | 16,980 | $ | 80,099 | ||||||||||||
Office | 257,391 | 100,383 | 19,451 | 72,173 | 1,546 | 63,838 | ||||||||||||||||||
Hotel/motel | 278,437 | 128,705 | 47,859 | 76,834 | 25,039 | - | ||||||||||||||||||
Mini-storage | 145,336 | 41,249 | 1,678 | 89,905 | 639 | 11,865 | ||||||||||||||||||
Industrial | 509,631 | 137,814 | 18,914 | 178,304 | 2,985 | 171,614 | ||||||||||||||||||
Health care | 120,089 | 92,200 | 680 | 24,600 | 329 | 2,280 | ||||||||||||||||||
Convenience stores | 25,609 | 2,947 | 413 | 13,989 | 228 | 8,032 | ||||||||||||||||||
Nursing homes/senior living | 527,800 | 227,059 | - | 200,257 | 4,546 | 95,938 | ||||||||||||||||||
Other | 118,763 | 32,470 | 8,757 | 60,783 | 8,042 | 8,711 | ||||||||||||||||||
Total non-owner occupied loans | 2,314,230 | 878,286 | 120,750 | 812,483 | 60,334 | 442,377 | ||||||||||||||||||
Owner-occupied: | ||||||||||||||||||||||||
Office | 146,066 | 43,808 | 35,796 | 36,678 | 11,224 | 18,560 | ||||||||||||||||||
Churches | 55,308 | 13,697 | 4,010 | 31,652 | 3,503 | 2,446 | ||||||||||||||||||
Industrial warehouses | 158,118 | 11,309 | 4,503 | 39,103 | 15,009 | 88,194 | ||||||||||||||||||
Health care | 122,993 | 11,253 | 8,210 | 84,065 | 2,233 | 17,232 | ||||||||||||||||||
Convenience stores | 132,276 | 11,807 | 29,012 | 57,593 | - | 33,864 | ||||||||||||||||||
Retail | 91,918 | 9,190 | 14,488 | 51,438 | 8,407 | 8,395 | ||||||||||||||||||
Restaurants | 36,809 | 4,019 | 2,870 | 9,593 | 16,509 | 3,818 | ||||||||||||||||||
Auto dealerships | 41,127 | 4,765 | 187 | 20,475 | 15,700 | - | ||||||||||||||||||
Nursing homes/senior living | 368,429 | 52,648 | - | 289,669 | - | 26,112 | ||||||||||||||||||
Other | 131,373 | 11,955 | 7,151 | 79,558 | 916 | 31,793 | ||||||||||||||||||
Total owner-occupied loans | 1,284,417 | 174,451 | 106,227 | 699,824 | 73,501 | 230,414 | ||||||||||||||||||
Loans secured by nonfarm, nonresidential properties | $ | 3,598,647 | $ | 1,052,737 | $ | 226,977 | $ | 1,512,307 | $ | 133,835 | $ | 672,791 | ||||||||||||
(1) Includes Georgia Loan Production Office. | ||||||||||||||||||||||||
Note 4 - 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 | Six Months Ended | |||||||||||||||||||||||||||
6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 6/30/2024 | 6/30/2023 | ||||||||||||||||||||||
Securities - taxable | 2.19 | % | 1.88 | % | 1.85 | % | 1.89 | % | 1.87 | % | 2.03 | % | 1.86 | % | ||||||||||||||
Securities - nontaxable | 3.59 | % | 4.73 | % | 3.81 | % | 4.05 | % | 4.25 | % | 4.45 | % | 4.10 | % | ||||||||||||||
Securities - total | 2.19 | % | 1.88 | % | 1.85 | % | 1.89 | % | 1.87 | % | 2.04 | % | 1.87 | % | ||||||||||||||
LHFI & LHFS | 6.54 | % | 6.40 | % | 6.41 | % | 6.34 | % | 6.08 | % | 6.47 | % | 5.94 | % | ||||||||||||||
Fed funds sold & reverse repurchases | 7.31 | % | 3.53 | % | 6.56 | % | 5.17 | % | 5.51 | % | 5.39 | % | 5.35 | % | ||||||||||||||
Other earning assets | 5.51 | % | 5.71 | % | 5.87 | % | 5.01 | % | 5.36 | % | 5.61 | % | 4.81 | % | ||||||||||||||
Total earning assets | 5.67 | % | 5.49 | % | 5.48 | % | 5.38 | % | 5.16 | % | 5.58 | % | 5.02 | % | ||||||||||||||
Interest-bearing deposits | 2.75 | % | 2.74 | % | 2.67 | % | 2.39 | % | 1.96 | % | 2.75 | % | 1.75 | % | ||||||||||||||
Fed funds purchased & repurchases | 5.24 | % | 5.25 | % | 5.26 | % | 5.14 | % | 5.01 | % | 5.25 | % | 4.73 | % | ||||||||||||||
Other borrowings | 4.91 | % | 4.78 | % | 5.08 | % | 5.32 | % | 5.12 | % | 4.84 | % | 5.01 | % | ||||||||||||||
Total interest-bearing liabilities | 2.95 | % | 2.92 | % | 2.89 | % | 2.72 | % | 2.42 | % | 2.93 | % | 2.20 | % | ||||||||||||||
Total Deposits | 2.18 | % | 2.18 | % | 2.10 | % | 1.84 | % | 1.48 | % | 2.18 | % | 1.31 | % | ||||||||||||||
Net interest margin | 3.38 | % | 3.21 | % | 3.25 | % | 3.29 | % | 3.33 | % | 3.29 | % | 3.36 | % | ||||||||||||||
TRUSTMARK CORPORATION AND SUBSIDIARIES |
NOTES TO CONSOLIDATED FINANCIALS |
June 30, 2024 |
($ in thousands) |
(unaudited) |
Note 4 - 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 increased 17 basis points when compared to the first quarter of 2024, totaling 3.38% for the second quarter of 2024, primarily due to increased yields on the securities portfolio and the loans held for investment and held for sale portfolio as well as the costs of interest-bearing deposits remaining relatively flat.
Note 5 - 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 $4.5 million during the second quarter of 2024.
The following table illustrates the components of mortgage banking revenues included in noninterest income in the accompanying income statements:
Quarter Ended | Six Months Ended | |||||||||||||||||||||||||||
6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 6/30/2024 | 6/30/2023 | ||||||||||||||||||||||
Mortgage servicing income, net | $ | 6,993 | $ | 6,934 | $ | 6,731 | $ | 6,916 | $ | 6,764 | $ | 13,927 | $ | 13,549 | ||||||||||||||
Change in fair value-MSR from runoff | (3,447 | ) | (1,926 | ) | (2,972 | ) | (3,203 | ) | (2,710 | ) | (5,373 | ) | (3,855 | ) | ||||||||||||||
Gain on sales of loans, net | 5,151 | 5,009 | 3,913 | 3,748 | 3,887 | 10,160 | 7,684 | |||||||||||||||||||||
Mortgage banking income before hedge | ||||||||||||||||||||||||||||
ineffectiveness | 8,697 | 10,017 | 7,672 | 7,461 | 7,941 | 18,714 | 17,378 | |||||||||||||||||||||
Change in fair value-MSR from market changes | (1,626 | ) | 5,123 | (10,224 | ) | 6,809 | 5,898 | 3,497 | 1,926 | |||||||||||||||||||
Change in fair value of derivatives | (2,867 | ) | (6,225 | ) | 8,071 | (7,812 | ) | (7,239 | ) | (9,092 | ) | (5,065 | ) | |||||||||||||||
Net positive (negative) hedge ineffectiveness | (4,493 | ) | (1,102 | ) | (2,153 | ) | (1,003 | ) | (1,341 | ) | (5,595 | ) | (3,139 | ) | ||||||||||||||
Mortgage banking, net | $ | 4,204 | $ | 8,915 | $ | 5,519 | $ | 6,458 | $ | 6,600 | $ | 13,119 | $ | 14,239 | ||||||||||||||
TRUSTMARK CORPORATION AND SUBSIDIARIES |
NOTES TO CONSOLIDATED FINANCIALS |
June 30, 2024 |
($ in thousands) |
(unaudited) |
Note 6 - Other Noninterest Income and Expense
Other noninterest income consisted of the following for the periods presented:
Quarter Ended | Six Months Ended | |||||||||||||||||||||||||||
6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 6/30/2024 | 6/30/2023 | ||||||||||||||||||||||
Partnership amortization for tax credit purposes | $ | (1,824 | ) | $ | (1,834 | ) | $ | (2,013 | ) | $ | (1,995 | ) | $ | (2,019 | ) | $ | (3,658 | ) | $ | (3,980 | ) | |||||||
Increase in life insurance cash surrender value | 1,860 | 1,844 | 1,825 | 1,784 | 1,716 | 3,704 | 3,409 | |||||||||||||||||||||
Loss on sale of 1-4 family mortgage loans | (4,798 | ) | - | - | - | - | (4,798 | ) | - | |||||||||||||||||||
Visa C shares fair value adjustment | 8,056 | - | - | - | - | 8,056 | - | |||||||||||||||||||||
Other miscellaneous income | 4,167 | 3,092 | 2,765 | 2,610 | 3,038 | 7,259 | 5,826 | |||||||||||||||||||||
Total other, net | $ | 7,461 | $ | 3,102 | $ | 2,577 | $ | 2,399 | $ | 2,735 | $ | 10,563 | $ | 5,255 | ||||||||||||||
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 | Six Months Ended | |||||||||||||||||||||||||||
6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 6/30/2024 | 6/30/2023 | ||||||||||||||||||||||
Loan expense | $ | 2,880 | $ | 2,955 | $ | 2,380 | $ | 3,130 | $ | 3,066 | $ | 5,835 | $ | 5,604 | ||||||||||||||
Amortization of intangibles | 27 | 28 | 33 | 34 | 34 | 55 | 223 | |||||||||||||||||||||
FDIC assessment expense | 4,816 | 4,509 | 4,844 | 3,765 | 2,550 | 9,325 | 4,920 | |||||||||||||||||||||
Other real estate expense, net | 327 | 671 | (184 | ) | (40 | ) | 171 | 998 | 343 | |||||||||||||||||||
Other miscellaneous expense | 7,189 | 7,988 | 8,717 | 8,150 | 7,946 | 15,177 | 16,850 | |||||||||||||||||||||
Total other expense | $ | 15,239 | $ | 16,151 | $ | 15,790 | $ | 15,039 | $ | 13,767 | $ | 31,390 | $ | 27,940 | ||||||||||||||
Note 7 - 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 |
June 30, 2024 |
($ in thousands except per share data) |
(unaudited) |
Note 7 - Non-GAAP Financial Measures (continued)
Quarter Ended | Six Months Ended | |||||||||||||||||||||||||||||
6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 6/30/2024 | 6/30/2023 | ||||||||||||||||||||||||
TANGIBLE EQUITY | ||||||||||||||||||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||||||||||||
Total shareholders' equity | $ | 1,727,489 | $ | 1,676,521 | $ | 1,592,493 | $ | 1,582,885 | $ | 1,580,291 | $ | 1,702,005 | $ | 1,552,215 | ||||||||||||||||
Less: Goodwill | (334,605 | ) | (334,605 | ) | (334,605 | ) | (334,605 | ) | (334,605 | ) | (334,605 | ) | (334,605 | ) | ||||||||||||||||
Identifiable intangible assets | (195 | ) | (224 | ) | (253 | ) | (287 | ) | (320 | ) | (210 | ) | (381 | ) | ||||||||||||||||
Total average tangible equity | $ | 1,392,689 | $ | 1,341,692 | $ | 1,257,635 | $ | 1,247,993 | $ | 1,245,366 | $ | 1,367,190 | $ | 1,217,229 | ||||||||||||||||
PERIOD END BALANCES | ||||||||||||||||||||||||||||||
Total shareholders' equity | $ | 1,879,141 | $ | 1,682,599 | $ | 1,661,847 | $ | 1,570,351 | $ | 1,571,193 | ||||||||||||||||||||
Less: Goodwill | (334,605 | ) | (334,605 | ) | (334,605 | ) | (334,605 | ) | (334,605 | ) | ||||||||||||||||||||
Identifiable intangible assets | (181 | ) | (208 | ) | (236 | ) | (269 | ) | (303 | ) | ||||||||||||||||||||
Total tangible equity | (a) | $ | 1,544,355 | $ | 1,347,786 | $ | 1,327,006 | $ | 1,235,477 | $ | 1,236,285 | |||||||||||||||||||
TANGIBLE ASSETS | ||||||||||||||||||||||||||||||
Total assets | $ | 18,452,487 | $ | 18,376,612 | $ | 18,722,189 | $ | 18,390,839 | $ | 18,422,626 | ||||||||||||||||||||
Less: Goodwill | (334,605 | ) | (334,605 | ) | (334,605 | ) | (334,605 | ) | (334,605 | ) | ||||||||||||||||||||
Identifiable intangible assets | (181 | ) | (208 | ) | (236 | ) | (269 | ) | (303 | ) | ||||||||||||||||||||
Total tangible assets | (b) | $ | 18,117,701 | $ | 18,041,799 | $ | 18,387,348 | $ | 18,055,965 | $ | 18,087,718 | |||||||||||||||||||
Risk-weighted assets | (c) | $ | 15,165,038 | $ | 15,257,385 | $ | 15,153,263 | $ | 15,143,531 | $ | 14,966,614 | |||||||||||||||||||
NET INCOME (LOSS) ADJUSTED FOR INTANGIBLE AMORTIZATION | ||||||||||||||||||||||||||||||
Net income (loss) from continuing operations | $ | (100,605 | ) | $ | 38,173 | $ | 33,888 | $ | 30,553 | $ | 41,204 | $ | (62,432 | ) | $ | 88,849 | ||||||||||||||
Plus: Intangible amortization net of tax from | ||||||||||||||||||||||||||||||
continuing operations | 20 | 20 | 25 | 25 | 25 | 40 | 167 | |||||||||||||||||||||||
Net income (loss) adjusted for intangible amortization | $ | (100,585 | ) | $ | 38,193 | $ | 33,913 | $ | 30,578 | $ | 41,229 | $ | (62,392 | ) | $ | 89,016 | ||||||||||||||
Period end common shares outstanding | (d) | 61,205,969 | 61,178,366 | 61,071,173 | 61,070,095 | 61,069,036 | ||||||||||||||||||||||||
TANGIBLE COMMON EQUITY MEASUREMENTS | ||||||||||||||||||||||||||||||
Return on average tangible equity from | ||||||||||||||||||||||||||||||
continuing operations (1) | -29.05 | % | 11.45 | % | 10.70 | % | 9.72 | % | 13.28 | % | -9.18 | % | 14.75 | % | ||||||||||||||||
Tangible equity/tangible assets | (a)/(b) | 8.52 | % | 7.47 | % | 7.22 | % | 6.84 | % | 6.83 | % | |||||||||||||||||||
Tangible equity/risk-weighted assets | (a)/(c) | 10.18 | % | 8.83 | % | 8.76 | % | 8.16 | % | 8.26 | % | |||||||||||||||||||
Tangible book value | (a)/(d)*1,000 | $ | 25.23 | $ | 22.03 | $ | 21.73 | $ | 20.23 | $ | 20.24 | |||||||||||||||||||
COMMON EQUITY TIER 1 CAPITAL (CET1) | ||||||||||||||||||||||||||||||
Total shareholders' equity | $ | 1,879,141 | $ | 1,682,599 | $ | 1,661,847 | $ | 1,570,351 | $ | 1,571,193 | ||||||||||||||||||||
CECL transition adjustment | 6,500 | 6,500 | 13,000 | 13,000 | 13,000 | |||||||||||||||||||||||||
AOCI-related adjustments | 91,557 | 227,154 | 219,723 | 287,888 | 265,704 | |||||||||||||||||||||||||
CET1 adjustments and deductions: | ||||||||||||||||||||||||||||||
Goodwill net of associated deferred | ||||||||||||||||||||||||||||||
tax liabilities (DTLs) | (320,758 | ) | (370,205 | ) | (370,212 | ) | (370,219 | ) | (370,227 | ) | ||||||||||||||||||||
Other adjustments and deductions | ||||||||||||||||||||||||||||||
for CET1 (2) | (847 | ) | (2,588 | ) | (2,693 | ) | (2,803 | ) | (2,915 | ) | ||||||||||||||||||||
CET1 capital | (e) | 1,655,593 | 1,543,460 | 1,521,665 | 1,498,217 | 1,476,755 | ||||||||||||||||||||||||
Additional tier 1 capital instruments | ||||||||||||||||||||||||||||||
plus related surplus | 60,000 | 60,000 | 60,000 | 60,000 | 60,000 | |||||||||||||||||||||||||
Tier 1 capital | $ | 1,715,593 | $ | 1,603,460 | $ | 1,581,665 | $ | 1,558,217 | $ | 1,536,755 | ||||||||||||||||||||
Common equity tier 1 capital ratio | (e)/(c) | 10.92 | % | 10.12 | % | 10.04 | % | 9.89 | % | 9.87 | % | |||||||||||||||||||
(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 |
June 30, 2024 |
($ in thousands except per share data) |
(unaudited) |
Note 7 - 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 | Six Months Ended | |||||||||||||||||||||||||||||
6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 6/30/2024 | 6/30/2023 | ||||||||||||||||||||||||
Net interest income (GAAP) | (a) | $ | 141,029 | $ | 132,830 | $ | 136,742 | $ | 138,637 | $ | 139,904 | $ | 273,859 | $ | 277,499 | |||||||||||||||
Noninterest income (loss) (GAAP) | (141,286 | ) | 39,355 | 36,605 | 36,921 | 37,829 | (101,931 | ) | 74,907 | |||||||||||||||||||||
Add: | Loss on sale of 1-4 family mortgage loans (incl in Other, net) | 4,798 | - | - | - | - | 4,798 | - | ||||||||||||||||||||||
Visa C shares fair value adjustment (incl in Other, net) | (8,056 | ) | - | - | - | - | (8,056 | ) | - | |||||||||||||||||||||
Securities (gains) losses, net | 182,792 | - | - | - | - | 182,792 | - | |||||||||||||||||||||||
Noninterest income from adjusted continuing | ||||||||||||||||||||||||||||||
operations (Non-GAAP) | (b) | $ | 38,248 | $ | 39,355 | $ | 36,605 | $ | 36,921 | $ | 37,829 | $ | 77,603 | $ | 74,907 | |||||||||||||||
Adjusted pre-provision revenue | (a)+(b)=(c) | $ | 179,277 | $ | 172,185 | $ | 173,347 | $ | 175,558 | $ | 177,733 | $ | 351,462 | $ | 352,406 | |||||||||||||||
Noninterest expense (GAAP) | $ | 118,326 | $ | 119,664 | $ | 126,195 | $ | 130,291 | $ | 121,621 | $ | 237,990 | $ | 239,210 | ||||||||||||||||
Less: | Reduction in force expense (incl in Salaries and employee benefits) | - | - | (1,406 | ) | - | - | - | - | |||||||||||||||||||||
Litigation settlement expense | - | - | - | (6,500 | ) | - | - | - | ||||||||||||||||||||||
Noninterest expense from adjusted continuing | ||||||||||||||||||||||||||||||
operations (Non-GAAP) | (d) | $ | 118,326 | $ | 119,664 | $ | 124,789 | $ | 123,791 | $ | 121,621 | $ | 237,990 | $ | 239,210 | |||||||||||||||
PPNR (Non-GAAP) | (c)-(d) | $ | 60,951 | $ | 52,521 | $ | 48,558 | $ | 51,767 | $ | 56,112 | $ | 113,472 | $ | 113,196 | |||||||||||||||
The following table presents adjustments to net income (loss) from continuing operations and select financial ratios as reported in accordance with GAAP resulting from significant non-routine items occurring during the periods presented:
Quarter Ended | Six Months Ended | ||||||||||||||||||||||||||
6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 6/30/2024 | 6/30/2023 | |||||||||||||||||||||
Net income (loss) (GAAP) from continuing operations | $ | (100,605 | ) | $ | 38,173 | $ | 33,888 | $ | 30,553 | $ | 41,204 | $ | (62,432 | ) | $ | 88,849 | |||||||||||
Significant non-routine transactions (net of taxes): | |||||||||||||||||||||||||||
PCL, LHFI sale of nonperforming 1-4 family | 6,475 | - | - | - | - | 6,475 | - | ||||||||||||||||||||
Loss on sale of 1-4 family mortgage loans | 3,598 | - | - | - | - | 3,598 | - | ||||||||||||||||||||
Visa C shares fair value adjustment | (6,042 | ) | - | - | - | - | (6,042 | ) | - | ||||||||||||||||||
Securities gains (losses), net | 137,094 | - | - | - | - | 137,094 | - | ||||||||||||||||||||
Reduction in force expense | - | - | 1,055 | - | - | - | - | ||||||||||||||||||||
Litigation settlement expense | - | - | - | 4,875 | - | - | - | ||||||||||||||||||||
Net income adjusted for significant non-routine | |||||||||||||||||||||||||||
transactions (Non-GAAP) | $ | 40,520 | $ | 38,173 | $ | 34,943 | $ | 35,428 | $ | 41,204 | $ | 78,693 | $ | 88,849 | |||||||||||||
Diluted EPS from adjusted continuing operations | $ | 0.66 | $ | 0.62 | $ | 0.57 | $ | 0.58 | $ | 0.67 | $ | 1.28 | $ | 1.45 | |||||||||||||
FINANCIAL RATIOS - REPORTED (GAAP) | |||||||||||||||||||||||||||
Return on average equity from continuing operations | -23.42 | % | 9.16 | % | 8.44 | % | 7.66 | % | 10.46 | % | -7.38 | % | 11.54 | % | |||||||||||||
Return on average tangible equity from continuing operations | -29.05 | % | 11.45 | % | 10.70 | % | 9.72 | % | 13.28 | % | -9.18 | % | 14.75 | % | |||||||||||||
Return on average assets from continuing operations | -2.16 | % | 0.83 | % | 0.72 | % | 0.65 | % | 0.88 | % | -0.67 | % | 0.97 | % | |||||||||||||
FINANCIAL RATIOS - ADJUSTED (NON-GAAP) | |||||||||||||||||||||||||||
Return on average equity from adjusted continuing operations | 9.06 | % | 9.16 | % | 8.68 | % | 8.87 | % | 10.46 | % | 9.11 | % | 11.54 | % | |||||||||||||
Return on average tangible equity from adjusted | |||||||||||||||||||||||||||
continuing operations | 11.14 | % | 11.45 | % | 10.98 | % | 11.25 | % | 13.28 | % | 11.29 | % | 14.75 | % | |||||||||||||
Return on average assets from adjusted continuing operations | 0.87 | % | 0.83 | % | 0.74 | % | 0.75 | % | 0.88 | % | 0.85 | % | 0.97 | % | |||||||||||||
TRUSTMARK CORPORATION AND SUBSIDIARIES |
NOTES TO CONSOLIDATED FINANCIALS |
June 30, 2024 |
($ in thousands) |
(unaudited) |
Note 7 - Non-GAAP Financial Measures (continued)
The following table presents Trustmark's calculation of its efficiency ratio for the periods presented:
Quarter Ended | Six Months Ended | |||||||||||||||||||||||||||||
6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 6/30/2024 | 6/30/2023 | ||||||||||||||||||||||||
Total noninterest expense (GAAP) | $ | 118,326 | $ | 119,664 | $ | 126,195 | $ | 130,291 | $ | 121,621 | $ | 237,990 | $ | 239,210 | ||||||||||||||||
Less: | Other real estate expense, net | (327 | ) | (671 | ) | 184 | 40 | (171 | ) | (998 | ) | (343 | ) | |||||||||||||||||
Amortization of intangibles | (27 | ) | (28 | ) | (33 | ) | (34 | ) | (34 | ) | (55 | ) | (223 | ) | ||||||||||||||||
Charitable contributions resulting in | ||||||||||||||||||||||||||||||
state tax credits | (300 | ) | (300 | ) | (325 | ) | (325 | ) | (325 | ) | (600 | ) | (650 | ) | ||||||||||||||||
Reduction in force expense | - | - | (1,406 | ) | - | - | - | - | ||||||||||||||||||||||
Litigation settlement expense | - | - | - | (6,500 | ) | - | - | - | ||||||||||||||||||||||
Adjusted noninterest expense (Non-GAAP) | (c) | $ | 117,672 | $ | 118,665 | $ | 124,615 | $ | 123,472 | $ | 121,091 | $ | 236,337 | $ | 237,994 | |||||||||||||||
Net interest income (GAAP) | $ | 141,029 | $ | 132,830 | $ | 136,742 | $ | 138,637 | $ | 139,904 | $ | 273,859 | $ | 277,499 | ||||||||||||||||
Add: | Tax equivalent adjustment | 3,304 | 3,365 | 3,306 | 3,299 | 3,383 | 6,669 | 6,860 | ||||||||||||||||||||||
Net interest income-FTE (Non-GAAP) | (a) | $ | 144,333 | $ | 136,195 | $ | 140,048 | $ | 141,936 | $ | 143,287 | $ | 280,528 | $ | 284,359 | |||||||||||||||
Noninterest income (loss) (GAAP) | $ | (141,286 | ) | $ | 39,355 | $ | 36,605 | $ | 36,921 | $ | 37,829 | $ | (101,931 | ) | $ | 74,907 | ||||||||||||||
Add: | Partnership amortization for tax credit purposes | 1,824 | 1,834 | 2,013 | 1,995 | 2,019 | 3,658 | 3,980 | ||||||||||||||||||||||
Loss on sale of 1-4 family mortgage loans | 4,798 | - | - | - | - | 4,798 | - | |||||||||||||||||||||||
Securities (gains) losses, net | 182,792 | - | (39 | ) | - | - | 182,792 | - | ||||||||||||||||||||||
Less: | Visa C shares fair value adjustment | (8,056 | ) | - | - | - | - | (8,056 | ) | - | ||||||||||||||||||||
Adjusted noninterest income (Non-GAAP) | (b) | $ | 40,072 | $ | 41,189 | $ | 38,579 | $ | 38,916 | $ | 39,848 | $ | 81,261 | $ | 78,887 | |||||||||||||||
Adjusted revenue (Non-GAAP) | (a)+(b) | $ | 184,405 | $ | 177,384 | $ | 178,627 | $ | 180,852 | $ | 183,135 | $ | 361,789 | $ | 363,246 | |||||||||||||||
Efficiency ratio (Non-GAAP) | (c)/((a)+(b)) | 63.81 | % | 66.90 | % | 69.76 | % | 68.27 | % | 66.12 | % | 65.32 | % | 65.52 | % | |||||||||||||||
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
