Trustmark Corporation Announces First Quarter 2014 Financial Results

JACKSON, Miss.--()--Trustmark Corporation (NASDAQ:TRMK) reported net income of $29.0 million in the first quarter of 2014, which represented diluted earnings per share of $0.43, an increase of 2.4% from the prior quarter and 13.2% compared to one year earlier. Trustmark’s performance during the first three months of 2014 produced a return on average tangible equity of 12.93% and a return on average assets of 0.99%. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable June 15, 2014, to shareholders of record on June 1, 2014.

Printer friendly version of earnings release with consolidated financial statements and notes: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50847698&lang=en.

Gerard R. Host, President and CEO, stated, “Trustmark continued to achieve solid financial results in the first quarter, reflecting the fourth consecutive quarter of growth in our legacy loan portfolio as well as continued improvement in credit quality. Expansion of our net interest margin excluding acquired loans coupled with solid growth in noninterest income and disciplined expense management was a great way to begin the year. Thanks to our associates, solid profitability and strong capital base, Trustmark remains well-positioned to continue meeting the needs of our customers and creating value for our shareholders as we enter our 125th year.”

Balance Sheet Management

  • Loans held for investment increased at an annualized rate of 8.8% in the first quarter
  • Net interest margin (FTE) was 3.92%; excluding acquired loans, net interest margin (FTE) expanded 4 basis points to 3.52% in the first quarter
  • Noninterest-bearing deposits increased $215.8 million to represent 28.4% of total deposits

Loans held for investment totaled $5.9 billion at March 31, 2014, an increase of $124.9 million, or 2.2% (8.8% annualized), from the prior quarter and $392.0 million, or 7.1%, from one year earlier. During the first quarter, commercial and industrial loans increased $49.8 million as growth in Trustmark’s Mississippi, Alabama and Florida markets more than offset declines in Texas and Tennessee. Trustmark’s single-family mortgage portfolio increased $48.2 million, as growth in Mississippi, Alabama and Florida was offset in part by declines in Tennessee and Texas. Commercial real estate loans increased $46.8 million, reflecting growth throughout Trustmark’s five-state franchise. Trustmark’s construction and consumer lending portfolios remained relatively flat. Other loans declined $14.4 million as growth in Alabama was more than offset by reductions in Trustmark’s other geographic markets.

Acquired loans totaled $746.3 million at March 31, 2014, down $57.9 million from the prior quarter. Collectively, loans held for investment and acquired loans totaled $6.7 billion at March 31, 2014, up $67.0 million from the prior quarter.

Net interest income (FTE) in the first quarter totaled $98.7 million, resulting in a net interest margin of 3.92%. Relative to the prior quarter, interest income (FTE) declined $7.4 million due principally to a $5.5 million decline in recoveries on acquired loans. The yield on acquired loans totaled 8.67% and included recoveries on loan pay-offs of $3.8 million, which represented approximately 1.97% of the total acquired annualized loan yield in the first quarter. Excluding acquired loans, the net interest margin in the first quarter totaled 3.52% compared to 3.48% in the prior quarter.

Trustmark’s solid capital position reflects the consistent profitability of its diversified financial services businesses as well as prudent balance sheet management. At March 31, 2014, Trustmark’s tangible equity to tangible assets ratio was 8.31% while the total risk-based capital ratio was 14.34%, significantly exceeding the 10.00% benchmark to be classified as “well-capitalized.” Trustmark’s solid capital base provides the opportunity to support organic loan growth in an improving economy and enhance long-term shareholder value.

Credit Quality

  • Significant reduction in classified and criticized loan balances
  • Nonperforming loans declined 1.9% during the quarter
  • Improved credit quality reflected in net recoveries and negative provisioning in the first quarter

Nonperforming loans totaled $64.0 million at March 31, 2014, a decline of 1.9% from the prior quarter and 23.2% from the prior year. Foreclosed other real estate totaled $111.5 million, an increase of $5.0 million, or 4.7%, from the prior quarter. Relative to levels one year earlier, other real estate decreased $6.9 million.

Net recoveries during the first quarter of 2014 totaled $1.9 million and represented -0.13% of average loans. This compares favorably to net charge-offs in the prior quarter of $201 thousand, or 0.01% of average loans, and to net recoveries in the prior year of $1.1 million, or -0.08% of average loans. The provision for loan losses for loans held for investment was a negative $805 thousand in the first quarter of 2014, reflecting the net recovery position and improved credit quality.

During the first quarter, Trustmark experienced a decline of $7.0 million, or 3.2%, in classified loans and a decline of $7.1 million, or 2.8%, in criticized loans relative to the prior quarter. Relative to the prior year, classified loan balances decreased $20.2 million, or 8.6%, while criticized loan balances decreased $63.2 million, or 20.2%.

Allocation of Trustmark’s $67.5 million allowance for loan losses represented 1.33% of commercial loans and 0.65% of consumer and home mortgage loans, resulting in an allowance to total loans held for investment of 1.14% at March 31, 2014, which represents a level management considers commensurate with the inherent risk in the loan portfolio. The allowance for loan losses represented 180.86% of nonperforming loans, excluding impaired loans.

All of the above credit metrics exclude acquired loans and other real estate covered by FDIC loss-share agreement.

Noninterest Income

  • Noninterest income totaled $44.1 million, up 14.0% from the prior quarter
  • Insurance revenue expanded to $8.1 million, an increase of 10.3% from the prior quarter
  • Mortgage banking revenue increased to $6.8 million

Noninterest income totaled $44.1 million in the first quarter, an increase of $5.4 million from the prior quarter. This improvement resulted in part from a decrease in partnership amortization of $2.6 million related to tax credit investments as well as a decrease of $1.7 million in the net reduction of the FDIC indemnification asset primarily resulting from the re-estimation of cash flows and loan payoffs. Each of these items was included in other noninterest income.

Service charges on deposit accounts totaled $11.6 million in the first quarter, a decrease of $1.5 million, or 11.8%, from the prior quarter primarily resulting from a seasonal reduction in NSF and overdraft fees. Bank card and other fees totaled $9.1 million in the first quarter, down $499 thousand from the prior quarter, reflecting a seasonal decline in interchange income as well as reduced commercial credit-related fee income.

Mortgage loan production in the first quarter totaled $230.3 million, down 16.6% from the prior quarter, reflecting the decline in refinance activity following an extended low interest rate environment. Despite the decline in production, mortgage banking revenue increased $1.6 million in the first quarter to total $6.8 million due principally to increased positive mortgage serving hedge ineffectiveness.

As a result of increased group health and commercial property and casualty business, insurance revenue in the first quarter totaled $8.1 million, an increase of 10.3% from the prior quarter. Wealth management revenue remained stable during the quarter at $8.1 million.

Noninterest Expense

  • Noninterest expense totaled $101.6 million, down 3.1% from the prior quarter
  • Routine noninterest expense remained well-controlled

Noninterest expense totaled $101.6 million in the first quarter; excluding ORE and intangible amortization of $5.6 million, noninterest expense during the first quarter totaled $96.0 million, a decrease of $3.4 million from comparable expenses in the prior quarter. Salaries and benefits expense remained well-controlled and totaled $56.7 million in the first quarter, unchanged from the prior quarter. Services and fees decreased $1.3 million principally due to lower legal and professional service fees. Other expense decreased $2.2 million relative to the prior quarter, reflecting in part lower mortgage loan and miscellaneous expenses.

At the close of business on December 31, 2013, Trustmark consolidated its wholly owned subsidiary, Somerville Bank & Trust Company, into Trustmark National Bank. This consolidation will enhance productivity and efficiency with the elimination of duplicate functions and operating systems as well as support revenue growth with the addition of a broader product line. Trustmark is committed to investments to support profitable revenue growth as well as reengineering and efficiency opportunities to enhance shareholder value.

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, April 23, 2014 at 10:00 a.m. Central Time to discuss the Corporation’s financial results. Interested parties may listen to the conference call by dialing (877) 317-6789, passcode 10008303, or by clicking on the link provided under the Investor Relations section of our website at www.trustmark.com. A replay of the conference call will also be available through Wednesday, May 14, 2014, in archived format at the same web address or by calling (877) 344-7529, passcode 10008303.

Trustmark Corporation is a financial services company providing banking and financial solutions through 209 offices in Alabama, Florida, 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,” “potential,” “continue,” “could,” “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 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, changes in the level of nonperforming assets and charge-offs, local, state and national economic and market conditions, including the extent and duration of the current volatility in the credit and financial markets, 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 performance and demand for the products and services we offer, including the level and timing of withdrawals from our deposit accounts, the costs and effects of litigation and of unexpected or adverse outcomes in such litigation, our ability to attract 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, including the potential impact of the European financial crisis on the U.S. economy and the markets we serve, and monetary and other governmental actions designed to address the level and volatility of interest rates and the volatility of securities, currency and other markets, the enactment of legislation and changes in existing regulations, or enforcement practices, or the adoption of new regulations, 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, changes in our ability to control expenses, changes in our compensation and benefit plans, greater than expected costs or difficulties related to the integration of acquisitions or new products and lines of business, natural disasters, environmental disasters, acts of war or terrorism, and other risks described in our filings with the Securities and Exchange Commission.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Except as required by law, we undertake no obligation to update or revise any of this information, whether as the result of new information, future events or developments or otherwise.

 
 
 
 
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2014
($ in thousands)
(unaudited)
        Linked Quarter   Year over Year

QUARTERLY AVERAGE BALANCES

3/31/2014 12/31/2013 3/31/2013

$ Change

  % Change

$ Change

  % Change
Securities AFS-taxable $ 2,136,392 $ 3,026,186 $ 2,836,051 $ (889,794 ) -29.4 % $ (699,659 ) -24.7 %
Securities AFS-nontaxable 149,744 160,989 167,773 (11,245 ) -7.0 % (18,029 ) -10.7 %
Securities HTM-taxable 1,118,747 265,792 48,632 852,955 n/m 1,070,115 n/m
Securities HTM-nontaxable   31,039     21,172     16,648     9,867   46.6 %   14,391   86.4 %
Total securities   3,435,922     3,474,139     3,069,104     (38,217 ) -1.1 %   366,818   12.0 %
Loans (including loans held for sale) 5,950,720 5,847,557 5,741,340 103,163 1.8 % 209,380 3.6 %
Acquired loans:
Noncovered loans 751,723 812,426 530,643 (60,703 ) -7.5 % 221,080 41.7 %
Covered loans 33,805 34,640 49,815 (835 ) -2.4 % (16,010 ) -32.1 %
Fed funds sold and rev repos 6,460 11,094 6,618 (4,634 ) -41.8 % (158 ) -2.4 %
Other earning assets   36,820     32,118     34,661     4,702   14.6 %   2,159   6.2 %
Total earning assets   10,215,450     10,211,974     9,432,181     3,476   0.0 %   783,269   8.3 %
Allowance for loan losses (79,736 ) (78,742 ) (86,447 ) (994 ) 1.3 % 6,711 -7.8 %
Cash and due from banks 407,078 275,051 270,740 132,027 48.0 % 136,338 50.4 %
Other assets   1,376,024     1,360,712     1,183,493     15,312   1.1 %   192,531   16.3 %
Total assets $ 11,918,816   $ 11,768,995   $ 10,799,967   $ 149,821   1.3 % $ 1,118,849   10.4 %
 
Interest-bearing demand deposits $ 1,900,504 $ 1,803,956 $ 1,703,336 $ 96,548 5.4 % $ 197,168 11.6 %
Savings deposits 3,193,098 2,952,472 2,767,747 240,626 8.1 % 425,351 15.4 %
Time deposits less than $100,000 1,280,513 1,344,488 1,268,619 (63,975 ) -4.8 % 11,894 0.9 %
Time deposits of $100,000 or more   947,509     961,075     893,104     (13,566 ) -1.4 %   54,405   6.1 %
Total interest-bearing deposits 7,321,624 7,061,991 6,632,806 259,633 3.7 % 688,818 10.4 %
Fed funds purchased and repos 282,816 361,758 266,958 (78,942 ) -21.8 % 15,858 5.9 %
Short-term borrowings 65,010 63,531 66,999 1,479 2.3 % (1,989 ) -3.0 %
Long-term FHLB advances 8,406 8,507 4,580 (101 ) -1.2 % 3,826 83.5 %
Subordinated notes 49,907 49,898 49,874 9 0.0 % 33 0.1 %
Junior subordinated debt securities   61,856     61,856     77,989     -   0.0 %   (16,133 ) -20.7 %
Total interest-bearing liabilities 7,789,619 7,607,541 7,099,206 182,078 2.4 % 690,413 9.7 %
Noninterest-bearing deposits 2,630,785 2,611,209 2,199,043 19,576 0.7 % 431,742 19.6 %
Other liabilities   130,749     203,270     176,210     (72,521 ) -35.7 %   (45,461 ) -25.8 %
Total liabilities 10,551,153 10,422,020 9,474,459 129,133 1.2 % 1,076,694 11.4 %
Shareholders' equity   1,367,663     1,346,975     1,325,508     20,688   1.5 %   42,155   3.2 %
Total liabilities and equity $ 11,918,816   $ 11,768,995   $ 10,799,967   $ 149,821   1.3 % $ 1,118,849   10.4 %
 
 
Linked Quarter Year over Year

PERIOD END BALANCES

3/31/2014 12/31/2013 3/31/2013

$ Change

% Change

$ Change

% Change
Cash and due from banks $ 423,819 $ 345,761 $ 242,896 $ 78,058 22.6 % $ 180,923 74.5 %
Fed funds sold and rev repos - 7,253 5,926 (7,253 ) -100.0 % (5,926 ) -100.0 %
Securities available for sale 2,382,441 2,194,154 3,546,083 188,287 8.6 % (1,163,642 ) -32.8 %
Securities held to maturity 1,155,569 1,168,728 73,666 (13,159 ) -1.1 % 1,081,903 n/m
Loans held for sale (LHFS) 120,446 149,169 207,758 (28,723 ) -19.3 % (87,312 ) -42.0 %
Loans held for investment (LHFI) 5,923,766 5,798,881 5,531,788 124,885 2.2 % 391,978 7.1 %
Allowance for loan losses   (67,518 )   (66,448 )   (76,900 )   (1,070 ) 1.6 %   9,382   -12.2 %
Net LHFI 5,856,248 5,732,433 5,454,888 123,815 2.2 % 401,360 7.4 %
Acquired loans:
Noncovered loans 713,647 769,990 1,003,127 (56,343 ) -7.3 % (289,480 ) -28.9 %
Covered loans 32,670 34,216 47,589 (1,546 ) -4.5 % (14,919 ) -31.3 %
Allowance for loan losses, acquired loans   (10,540 )   (9,636 )   (6,458 )   (904 ) 9.4 %   (4,082 ) 63.2 %
Net acquired loans   735,777     794,570     1,044,258     (58,793 ) -7.4 %   (308,481 ) -29.5 %
Net LHFI and acquired loans 6,592,025 6,527,003 6,499,146 65,022 1.0 % 92,879 1.4 %
Premises and equipment, net 203,771 207,283 210,789 (3,512 ) -1.7 % (7,018 ) -3.3 %
Mortgage servicing rights 67,614 67,834 51,529 (220 ) -0.3 % 16,085 31.2 %
Goodwill 365,500 372,851 366,366 (7,351 ) -2.0 % (866 ) -0.2 %
Identifiable intangible assets 39,697 41,990 49,361 (2,293 ) -5.5 % (9,664 ) -19.6 %
Other real estate, excluding covered other real estate 111,536 106,539 118,406 4,997 4.7 % (6,870 ) -5.8 %
Covered other real estate 4,759 5,108 5,879 (349 ) -6.8 % (1,120 ) -19.1 %
FDIC indemnification asset 13,487 14,347 20,198 (860 ) -6.0 % (6,711 ) -33.2 %
Other assets   576,390     582,363     452,512     (5,973 ) -1.0 %   123,878   27.4 %
Total assets $ 12,057,054   $ 11,790,383   $ 11,850,515   $ 266,671   2.3 % $ 206,539   1.7 %
 
Deposits:
Noninterest-bearing $ 2,879,341 $ 2,663,503 $ 2,534,287 $ 215,838 8.1 % $ 345,054 13.6 %
Interest-bearing   7,242,778     7,196,399     7,375,144     46,379   0.6 %   (132,366 ) -1.8 %
Total deposits 10,122,119 9,859,902 9,909,431 262,217 2.7 % 212,688 2.1 %
Fed funds purchased and repos 259,341 251,587 219,769 7,754 3.1 % 39,572 18.0 %
Short-term borrowings 59,671 66,385 46,325 (6,714 ) -10.1 % 13,346 28.8 %
Long-term FHLB advances 8,341 8,458 10,969 (117 ) -1.4 % (2,628 ) -24.0 %
Subordinated notes 49,912 49,904 49,879 8 0.0 % 33 0.1 %
Junior subordinated debt securities 61,856 61,856 94,856 - 0.0 % (33,000 ) -34.8 %
Other liabilities   121,919     137,338     166,340     (15,419 ) -11.2 %   (44,421 ) -26.7 %
Total liabilities   10,683,159     10,435,430     10,497,569     247,729   2.4 %   185,590   1.8 %
Common stock 14,051 14,038 13,992 13 0.1 % 59 0.4 %
Capital surplus 352,402 349,680 342,233 2,722 0.8 % 10,169 3.0 %
Retained earnings 1,045,939 1,034,966 991,012 10,973 1.1 % 54,927 5.5 %
Accum other comprehensive
(loss) income, net of tax   (38,497 )   (43,731 )   5,709     5,234   -12.0 %   (44,206 ) n/m
Total shareholders' equity   1,373,895     1,354,953     1,352,946     18,942   1.4 %   20,949   1.5 %
Total liabilities and equity $ 12,057,054   $ 11,790,383   $ 11,850,515   $ 266,671   2.3 % $ 206,539   1.7 %
 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 

See Notes to Consolidated Financials

 
 
 
 
 
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2014
($ in thousands except per share data)
(unaudited)
             
Quarter Ended Linked Quarter Year over Year

INCOME STATEMENTS

3/31/2014 12/31/2013 3/31/2013

$ Change

% Change

$ Change

% Change
Interest and fees on LHFS & LHFI-FTE $ 66,185 $ 67,038 $ 67,412 $ (853 ) -1.3 % $ (1,227 ) -1.8 %
Interest and fees on acquired loans 16,786 23,384 12,782 (6,598 ) -28.2 % 4,004 31.3 %
Interest on securities-taxable 19,220 19,078 16,539 142 0.7 % 2,681 16.2 %
Interest on securities-tax exempt-FTE 1,920 1,963 2,018 (43 ) -2.2 % (98 ) -4.9 %
Interest on fed funds sold and rev repos 5 14 4 (9 ) -64.3 % 1 25.0 %
Other interest income   375     367     355     8   2.2 %   20   5.6 %
Total interest income-FTE   104,491     111,844     99,110     (7,353 ) -6.6 %   5,381   5.4 %
Interest on deposits 4,365 4,768 4,909 (403 ) -8.5 % (544 ) -11.1 %
Interest on fed funds pch and repos 76 104 81 (28 ) -26.9 % (5 ) -6.2 %
Other interest expense   1,363     1,370     1,490     (7 ) -0.5 %   (127 ) -8.5 %
Total interest expense   5,804     6,242     6,480     (438 ) -7.0 %   (676 ) -10.4 %
Net interest income-FTE 98,687 105,602 92,630 (6,915 ) -6.5 % 6,057 6.5 %
Provision for loan losses, LHFI (805 ) (1,983 ) (2,968 ) 1,178 -59.4 % 2,163 -72.9 %
Provision for loan losses, acquired loans   63     4,169     130     (4,106 ) -98.5 %   (67 ) -51.5 %
Net interest income after provision-FTE   99,429     103,416     95,468     (3,987 ) -3.9 %   3,961   4.1 %
Service charges on deposit accounts 11,568 13,114 11,681 (1,546 ) -11.8 % (113 ) -1.0 %
Insurance commissions 8,097 7,343 7,242 754 10.3 % 855 11.8 %
Wealth management 8,135 8,145 6,875 (10 ) -0.1 % 1,260 18.3 %
Bank card and other fees 9,081 9,580 7,945 (499 ) -5.2 % 1,136 14.3 %
Mortgage banking, net 6,829 5,186 11,583 1,643 31.7 % (4,754 ) -41.0 %
Other, net   (21 )   (4,802 )   (1,191 )   4,781   -99.6 %   1,170   -98.2 %
Nonint inc-excl sec gains (losses), net 43,689 38,566 44,135 5,123 13.3 % (446 ) -1.0 %
Security gains (losses), net   389     107     204     282   n/m   185   90.7 %
Total noninterest income   44,078     38,673     44,339     5,405   14.0 %   (261 ) -0.6 %
Salaries and employee benefits 56,726 56,687 53,592 39 0.1 % 3,134 5.8 %
Services and fees 13,165 14,476 13,032 (1,311 ) -9.1 % 133 1.0 %
Net occupancy-premises 6,606 6,659 5,955 (53 ) -0.8 % 651 10.9 %
Equipment expense 6,138 6,400 5,674 (262 ) -4.1 % 464 8.2 %
FDIC assessment expense 2,416 2,228 2,021 188 8.4 % 395 19.5 %
ORE/Foreclosure expense 3,315 3,009 3,820 306 10.2 % (505 ) -13.2 %
Other expense   13,252     15,408     18,051     (2,156 ) -14.0 %   (4,799 ) -26.6 %
Total noninterest expense   101,618     104,867     102,145     (3,249 ) -3.1 %   (527 ) -0.5 %
Income before income taxes and tax eq adj 41,889 37,222 37,662 4,667 12.5 % 4,227 11.2 %
Tax equivalent adjustment   3,783     3,747     3,655     36   1.0 %   128   3.5 %
Income before income taxes 38,106 33,475 34,007 4,631 13.8 % 4,099 12.1 %
Income taxes   9,103     5,436     9,141     3,667   67.5 %   (38 ) -0.4 %
Net income $ 29,003   $ 28,039   $ 24,866   $ 964   3.4 % $ 4,137   16.6 %
 
Per share data
Earnings per share - basic $ 0.43   $ 0.42   $ 0.38   $ 0.01   2.4 % $ 0.05   13.2 %
 
Earnings per share - diluted $ 0.43   $ 0.42   $ 0.38   $ 0.01   2.4 % $ 0.05   13.2 %
 
Dividends per share $ 0.23   $ 0.23   $ 0.23   $ -   0.0 % $ -   0.0 %
 
Weighted average shares outstanding
Basic   67,410,147     67,249,877     65,983,204  
 
Diluted   67,550,483     67,449,778     66,149,656  
 
Period end shares outstanding   67,439,562     67,372,980     67,151,087  
 

OTHER FINANCIAL DATA

Return on equity 8.60 % 8.26 % 7.61 %
Return on average tangible equity 12.93 % 12.59 % 10.82 %
Return on assets 0.99 % 0.95 % 0.93 %
Interest margin - Yield - FTE 4.15 % 4.35 % 4.26 %
Interest margin - Cost 0.23 % 0.24 % 0.28 %
Net interest margin - FTE 3.92 % 4.10 % 3.98 %
Efficiency ratio (1) 68.32 % 68.38 % 65.77 %
Full-time equivalent employees 3,114 3,110 3,164
 

STOCK PERFORMANCE

Market value-Close $ 25.35 $ 26.84 $ 25.01
Book value $ 20.37 $ 20.11 $ 20.15
Tangible book value $ 14.36 $ 13.95 $ 13.96
 
(1) - The efficiency ratio is noninterest expense to total net interest income (FTE) and noninterest income, excluding security gains (losses), amortization of partnership tax credits, amortization of purchased intangibles, and nonroutine income and expense items.
 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 

See Notes to Consolidated Financials

 
 
 
 
 
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2014
($ in thousands)
(unaudited)
  Quarter Ended   Linked Quarter   Year over Year

NONPERFORMING ASSETS (1)

3/31/2014   12/31/2013   3/31/2013

$ Change

  % Change

$ Change

  % Change
Nonaccrual loans
Alabama $ 96 $ 14 $ - $ 82 n/m $ 96 n/m
Florida 9,956 12,278 14,046 (2,322 ) -18.9 % (4,090 ) -29.1 %
Mississippi (2) 44,168 42,307 46,697 1,861 4.4 % (2,529 ) -5.4 %
Tennessee (3) 5,206 4,390 4,877 816 18.6 % 329 6.7 %
Texas   4,572     6,249     17,702     (1,677 ) -26.8 %   (13,130 ) -74.2 %
Total nonaccrual loans 63,998 65,238 83,322 (1,240 ) -1.9 % (19,324 ) -23.2 %
Other real estate
Alabama 24,103 25,912 28,870 (1,809 ) -7.0 % (4,767 ) -16.5 %
Florida 42,013 34,480 30,662 7,533 21.8 % 11,351 37.0 %
Mississippi (2) 22,287 22,766 26,457 (479 ) -2.1 % (4,170 ) -15.8 %
Tennessee (3) 13,000 12,892 18,339 108 0.8 % (5,339 ) -29.1 %
Texas   10,133     10,489     14,078     (356 ) -3.4 %   (3,945 ) -28.0 %
Total other real estate   111,536     106,539     118,406     4,997   4.7 %   (6,870 ) -5.8 %
Total nonperforming assets $ 175,534   $ 171,777   $ 201,728   $ 3,757   2.2 % $ (26,194 ) -13.0 %
 

LOANS PAST DUE OVER 90 DAYS (4)

LHFI $ 1,870   $ 3,298   $ 2,772   $ (1,428 ) -43.3 % $ (902 ) -32.5 %
 
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase) $ 20,109   $ 21,540   $ 4,469   $ (1,431 ) -6.6 % $ 15,640   n/m
 
 
Quarter Ended Linked Quarter Year over Year

ALLOWANCE FOR LOAN LOSSES (4)

3/31/2014 12/31/2013 3/31/2013

$ Change

% Change

$ Change

% Change
Beginning Balance $ 66,448 $ 68,632 $ 78,738 $ (2,184 ) -3.2 % $ (12,290 ) -15.6 %
Provision for loan losses (805 ) (1,983 ) (2,968 ) 1,178 -59.4 % 2,163 -72.9 %
Charge-offs (3,016 ) (3,305 ) (3,325 ) 289 -8.7 % 309 -9.3 %
Recoveries   4,891     3,104     4,455     1,787   57.6 %   436   9.8 %
Net recoveries (charge-offs)   1,875     (201 )   1,130     2,076   n/m   745   65.9 %
Ending Balance $ 67,518   $ 66,448   $ 76,900   $ 1,070   1.6 % $ (9,382 ) -12.2 %
 

PROVISION FOR LOAN LOSSES (4)

Alabama $ 472 $ 332 $ 676 $ 140 42.2 % $ (204 ) -30.2 %
Florida (3,499 ) (2,350 ) (3,675 ) (1,149 ) 48.9 % 176 -4.8 %
Mississippi (2) 1,983 3,336 (1,920 ) (1,353 ) -40.6 % 3,903 n/m
Tennessee (3) (915 ) (117 ) (378 ) (798 ) n/m (537 ) n/m
Texas   1,154     (3,184 )   2,329     4,338   n/m   (1,175 ) -50.5 %
Total provision for loan losses $ (805 ) $ (1,983 ) $ (2,968 ) $ 1,178   -59.4 % $ 2,163   -72.9 %
 

NET CHARGE-OFFS (4)

Alabama $ 55 $ 74 $ 11 $ (19 ) -25.7 % $ 44 n/m
Florida (2,524 ) (634 ) (849 ) (1,890 ) n/m (1,675 ) n/m
Mississippi (2) 676 393 (290 ) 283 72.0 % 966 n/m
Tennessee (3) (1 ) 506 249 (507 ) n/m (250 ) n/m
Texas   (81 )   (138 )   (251 )   57   -41.3 %   170   -67.7 %
Total net (recoveries) charge-offs $ (1,875 ) $ 201   $ (1,130 ) $ (2,076 ) n/m $ (745 ) 65.9 %
 

CREDIT QUALITY RATIOS (1)

Net charge offs/average loans -0.13 % 0.01 % -0.08 %
Provision for loan losses/average loans -0.05 % -0.13 % -0.21 %
Nonperforming loans/total loans (incl LHFS) 1.06 % 1.10 % 1.45 %
Nonperforming assets/total loans (incl LHFS) 2.90 % 2.89 % 3.51 %
Nonperforming assets/total loans (incl LHFS) +ORE 2.85 % 2.84 % 3.44 %
ALL/total loans (excl LHFS) 1.14 % 1.15 % 1.39 %
ALL-commercial/total commercial loans 1.33 % 1.30 % 1.56 %
ALL-consumer/total consumer and home mortgage loans 0.65 % 0.75 % 0.94 %
ALL/nonperforming loans 105.50 % 101.86 % 92.29 %
ALL/nonperforming loans -
(excl impaired loans) 180.86 % 190.70 % 145.83 %
 

CAPITAL RATIOS

Total equity/total assets 11.39 % 11.49 % 11.42 %
Tangible equity/tangible assets 8.31 % 8.26 % 8.20 %
Tangible equity/risk-weighted assets 12.08 % 11.88 % 11.92 %
Tier 1 leverage ratio 9.14 % 9.06 % 9.83 %
Tier 1 common risk-based capital ratio 12.37 % 12.21 % 11.79 %
Tier 1 risk-based capital ratio 13.11 % 12.97 % 12.97 %
Total risk-based capital ratio 14.34 % 14.18 % 14.42 %
 
(1) - Excludes Acquired Loans and Covered Other Real Estate
(2) - Mississippi includes Central and Southern Mississippi Regions
(3) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions
(4) - Excludes Acquired Loans
 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 

See Notes to Consolidated Financials

 
 
 
 
 
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2014
($ in thousands)
(unaudited)
  Quarter Ended

AVERAGE BALANCES

3/31/2014   12/31/2013   9/30/2013   6/30/2013   3/31/2013
Securities AFS-taxable $ 2,136,392 $ 3,026,186 $ 3,279,606 $ 3,259,086 $ 2,836,051
Securities AFS-nontaxable 149,744 160,989 172,055 171,974 167,773
Securities HTM-taxable 1,118,747 265,792 59,168 59,678 48,632
Securities HTM-nontaxable   31,039     21,172     11,024     11,520     16,648  
Total securities   3,435,922     3,474,139     3,521,853     3,502,258     3,069,104  
Loans (including loans held for sale) 5,950,720 5,847,557 5,784,170 5,735,296 5,741,340
Acquired loans:
Noncovered loans 751,723 812,426 888,883 949,367 530,643
Covered loans 33,805 34,640 39,561 43,425 49,815
Fed funds sold and rev repos 6,460 11,094 8,978 6,808 6,618
Other earning assets   36,820     32,118     38,226     34,752     34,661  
Total earning assets   10,215,450     10,211,974     10,281,671     10,271,906     9,432,181  
Allowance for loan losses (79,736 ) (78,742 ) (79,696 ) (84,574 ) (86,447 )
Cash and due from banks 407,078 275,051 272,320 284,056 270,740
Other assets   1,376,024     1,360,712     1,284,813     1,311,262     1,183,493  
Total assets $ 11,918,816   $ 11,768,995   $ 11,759,108   $ 11,782,650   $ 10,799,967  
 
Interest-bearing demand deposits $ 1,900,504 $ 1,803,956 $ 1,842,379 $ 1,811,402 $ 1,703,336
Savings deposits 3,193,098 2,952,472 2,995,110 3,060,437 2,767,747
Time deposits less than $100,000 1,280,513 1,344,488 1,380,954 1,419,381 1,268,619
Time deposits of $100,000 or more   947,509     961,075     993,948     1,029,498     893,104  
Total interest-bearing deposits 7,321,624 7,061,991 7,212,391 7,320,718 6,632,806
Fed funds purchased and repos 282,816 361,758 364,446 312,865 266,958
Short-term borrowings 65,010 63,531 59,324 51,718 66,999
Long-term FHLB advances 8,406 8,507 8,620 9,575 4,580
Subordinated notes 49,907 49,898 49,890 49,882 49,874
Junior subordinated debt securities   61,856     61,856     61,856     82,460     77,989  
Total interest-bearing liabilities 7,789,619 7,607,541 7,756,527 7,827,218 7,099,206
Noninterest-bearing deposits 2,630,785 2,611,209 2,479,082 2,451,547 2,199,043
Other liabilities   130,749     203,270     190,143     159,525     176,210  
Total liabilities 10,551,153 10,422,020 10,425,752 10,438,290 9,474,459
Shareholders' equity   1,367,663     1,346,975     1,333,356     1,344,360     1,325,508  
Total liabilities and equity $ 11,918,816   $ 11,768,995   $ 11,759,108   $ 11,782,650   $ 10,799,967  
 
 

PERIOD END BALANCES

3/31/2014 12/31/2013 9/30/2013 6/30/2013 3/31/2013
Cash and due from banks $ 423,819 $ 345,761 $ 335,695 $ 301,532 $ 242,896
Fed funds sold and rev repos - 7,253 7,867 7,869 5,926
Securities available for sale 2,382,441 2,194,154 3,372,101 3,511,683 3,546,083
Securities held to maturity 1,155,569 1,168,728 69,980 70,338 73,666
Loans held for sale (LHFS) 120,446 149,169 119,986 202,699 207,758
Loans held for investment (LHFI) 5,923,766 5,798,881 5,696,641 5,577,382 5,531,788
Allowance for loan losses   (67,518 )   (66,448 )   (68,632 )   (72,825 )   (76,900 )
Net LHFI 5,856,248 5,732,433 5,628,009 5,504,557 5,454,888
Acquired loans:
Noncovered loans 713,647 769,990 837,875 922,453 1,003,127
Covered loans 32,670 34,216 37,250 40,820 47,589
Allowance for loan losses, acquired loans   (10,540 )   (9,636 )   (5,333 )   (2,690 )   (6,458 )
Net acquired loans   735,777     794,570     869,792     960,583     1,044,258  
Net LHFI and acquired loans 6,592,025 6,527,003 6,497,801 6,465,140 6,499,146
Premises and equipment, net 203,771 207,283 208,837 210,845 210,789
Mortgage servicing rights 67,614 67,834 63,150 60,380 51,529
Goodwill 365,500 372,851 372,463 368,315 366,366
Identifiable intangible assets 39,697 41,990 44,424 46,889 49,361
Other real estate, excluding covered other real estate 111,536 106,539 116,329 117,712 118,406
Covered other real estate 4,759 5,108 5,092 5,147 5,879
FDIC indemnification asset 13,487 14,347 17,085 17,342 20,198
Other assets   576,390     582,363     574,387     477,421     452,512  
Total assets $ 12,057,054   $ 11,790,383   $ 11,805,197   $ 11,863,312   $ 11,850,515  
 
Deposits:
Noninterest-bearing $ 2,879,341 $ 2,663,503 $ 2,643,612 $ 2,520,895 $ 2,534,287
Interest-bearing   7,242,778     7,196,399     7,143,622     7,296,697     7,375,144  
Total deposits 10,122,119 9,859,902 9,787,234 9,817,592 9,909,431
Fed funds purchased and repos 259,341 251,587 342,465 374,021 219,769
Short-term borrowings 59,671 66,385 60,698 56,645 46,325
Long-term FHLB advances 8,341 8,458 8,562 8,679 10,969
Subordinated notes 49,912 49,904 49,896 49,888 49,879
Junior subordinated debt securities 61,856 61,856 61,856 61,856 94,856
Other liabilities   121,919     137,338     164,972     167,812     166,340  
Total liabilities   10,683,159     10,435,430     10,475,683     10,536,493     10,497,569  
Common stock 14,051 14,038 13,998 13,994 13,992
Capital surplus 352,402 349,680 343,759 342,359 342,233
Retained earnings 1,045,939 1,034,966 1,023,983 1,006,554 991,012
Accum other comprehensive
(loss) income, net of tax   (38,497 )   (43,731 )   (52,226 )   (36,088 )   5,709  
Total shareholders' equity   1,373,895     1,354,953     1,329,514     1,326,819     1,352,946  
Total liabilities and equity $ 12,057,054   $ 11,790,383   $ 11,805,197   $ 11,863,312   $ 11,850,515  
 
 

See Notes to Consolidated Financials

 
 
 
 
 
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2014
($ in thousands except per share data)
(unaudited)
         
Quarter Ended

INCOME STATEMENTS

3/31/2014 12/31/2013 9/30/2013 6/30/2013 3/31/2013
Interest and fees on LHFS & LHFI-FTE $ 66,185 $ 67,038 $ 68,417 $ 67,750 $ 67,412
Interest and fees on acquired loans 16,786 23,384 19,183 20,987 12,782
Interest on securities-taxable 19,220 19,078 18,654 18,547 16,539
Interest on securities-tax exempt-FTE 1,920 1,963 1,960 1,974 2,018
Interest on fed funds sold and rev repos 5 14 8 5 4
Other interest income   375     367     372     372     355  
Total interest income-FTE   104,491     111,844     108,594     109,635     99,110  
Interest on deposits 4,365 4,768 4,970 5,071 4,909
Interest on fed funds pch and repos 76 104 106 88 81
Other interest expense   1,363     1,370     1,389     1,513     1,490  
Total interest expense   5,804     6,242     6,465     6,672     6,480  
Net interest income-FTE 98,687 105,602 102,129 102,963 92,630
Provision for loan losses, LHFI (805 ) (1,983 ) (3,624 ) (4,846 ) (2,968 )
Provision for loan losses, acquired loans   63     4,169     3,292     (1,552 )   130  
Net interest income after provision-FTE   99,429     103,416     102,461     109,361     95,468  
Service charges on deposit accounts 11,568 13,114 13,852 12,929 11,681
Insurance commissions 8,097 7,343 8,227 8,014 7,242
Wealth management 8,135 8,145 7,520 6,940 6,875
Bank card and other fees 9,081 9,580 8,929 9,507 7,945
Mortgage banking, net 6,829 5,186 8,440 8,295 11,583
Other, net   (21 )   (4,802 )   165     (2,145 )   (1,191 )
Nonint inc-excl sec gains (losses), net 43,689 38,566 47,133 43,540 44,135
Security gains (losses), net   389     107     -     174     204  
Total noninterest income   44,078     38,673     47,133     43,714     44,339  
Salaries and employee benefits 56,726 56,687 56,043 55,405 53,592
Services and fees 13,165 14,476 13,580 12,816 13,032
Net occupancy-premises 6,606 6,659 6,644 6,703 5,955
Equipment expense 6,138 6,400 6,271 6,193 5,674
FDIC assessment expense 2,416 2,228 2,376 2,376 2,021
ORE/Foreclosure expense 3,315 3,009 3,079 5,131 3,820
Other expense   13,252     15,408     13,531     18,571     18,051  
Total noninterest expense   101,618     104,867     101,524     107,195     102,145  
Income before income taxes and tax eq adj 41,889 37,222 48,070 45,880 37,662
Tax equivalent adjustment   3,783     3,747     3,700     3,735     3,655  
Income before income taxes 38,106 33,475 44,370 42,145 34,007
Income taxes   9,103     5,436     11,336     11,024     9,141  
Net income $ 29,003   $ 28,039   $ 33,034   $ 31,121   $ 24,866  
 
Per share data
Earnings per share - basic $ 0.43   $ 0.42   $ 0.49   $ 0.46   $ 0.38  
 
Earnings per share - diluted $ 0.43   $ 0.42   $ 0.49   $ 0.46   $ 0.38  
 
Dividends per share $ 0.23   $ 0.23   $ 0.23   $ 0.23   $ 0.23  
 
Weighted average shares outstanding
Basic   67,410,147     67,249,877     67,177,013     67,162,530     65,983,204  
 
Diluted   67,550,483     67,449,778     67,382,478     67,344,117     66,149,656  
 
Period end shares outstanding   67,439,562     67,372,980     67,181,694     67,163,195     67,151,087  
 
 

OTHER FINANCIAL DATA

Return on equity 8.60 % 8.26 % 9.83 % 9.29 % 7.61 %
Return on average tangible equity 12.93 % 12.59 % 14.92 % 14.09 % 10.82 %
Return on assets 0.99 % 0.95 % 1.11 % 1.06 % 0.93 %
Interest margin - Yield - FTE 4.15 % 4.35 % 4.19 % 4.28 % 4.26 %
Interest margin - Cost 0.23 % 0.24 % 0.25 % 0.26 % 0.28 %
Net interest margin - FTE 3.92 % 4.10 % 3.94 % 4.02 % 3.98 %
Efficiency ratio (1) 68.32 % 68.38 % 65.32 % 67.72 % 65.77 %
Full-time equivalent employees 3,114 3,110 3,110 3,119 3,164
 
 

STOCK PERFORMANCE

Market value-Close $ 25.35 $ 26.84 $ 25.60 $ 24.58 $ 25.01
Book value $ 20.37 $ 20.11 $ 19.79 $ 19.76 $ 20.15
Tangible book value $ 14.36 $ 13.95 $ 13.58 $ 13.57 $ 13.96
 
(1) - The efficiency ratio is noninterest expense to total net interest income (FTE) and noninterest income, excluding security gains (losses), amortization of partnership tax credits, amortization of purchased intangibles, and nonroutine income and expense items.
 
 

See Notes to Consolidated Financials

 
 
 
 
 
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2014
($ in thousands)
(unaudited)
         
Quarter Ended

NONPERFORMING ASSETS (1)

3/31/2014 12/31/2013 9/30/2013 6/30/2013 3/31/2013
Nonaccrual loans
Alabama $ 96 $ 14 $ 81 $ 73 $ -
Florida 9,956 12,278 14,619 15,916 14,046
Mississippi (2) 44,168 42,307 43,132 41,761 46,697
Tennessee (3) 5,206 4,390 5,596 4,482 4,877
Texas   4,572     6,249     9,953     12,086     17,702  
Total nonaccrual loans 63,998 65,238 73,381 74,318 83,322
Other real estate
Alabama 24,103 25,912 25,308 27,245 28,870
Florida 42,013 34,480 39,198 35,025 30,662
Mississippi (2) 22,287 22,766 25,439 26,843 26,457
Tennessee (3) 13,000 12,892 14,615 15,811 18,339
Texas   10,133     10,489     11,769     12,788     14,078  
Total other real estate   111,536     106,539     116,329     117,712     118,406  
Total nonperforming assets $ 175,534   $ 171,777   $ 189,710   $ 192,030   $ 201,728  
 

LOANS PAST DUE OVER 90 DAYS (4)

LHFI $ 1,870   $ 3,298   $ 2,344   $ 4,194   $ 2,772  
 
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase) $ 20,109   $ 21,540   $ 18,432   $ 14,003   $ 4,469  
 
 
Quarter Ended

ALLOWANCE FOR LOAN LOSSES (4)

3/31/2014 12/31/2013 9/30/2013 6/30/2013 3/31/2013
Beginning Balance $ 66,448 $ 68,632 $ 72,825 $ 76,900 $ 78,738
Provision for loan losses (805 ) (1,983 ) (3,624 ) (4,846 ) (2,968 )
Charge-offs (3,016 ) (3,305 ) (3,817 ) (3,031 ) (3,325 )
Recoveries   4,891     3,104     3,248     3,802     4,455  
Net recoveries (charge-offs)   1,875     (201 )   (569 )   771     1,130  
Ending Balance $ 67,518   $ 66,448   $ 68,632   $ 72,825   $ 76,900  
 

PROVISION FOR LOAN LOSSES (4)

Alabama $ 472 $ 332 $ 550 $ 232 $ 676
Florida (3,499 ) (2,350 ) (2,642 ) (3,425 ) (3,675 )
Mississippi (2) 1,983 3,336 (1,051 ) (520 ) (1,920 )
Tennessee (3) (915 ) (117 ) (150 ) (335 ) (378 )
Texas   1,154     (3,184 )   (331 )   (798 )   2,329  
Total provision for loan losses $ (805 ) $ (1,983 ) $ (3,624 ) $ (4,846 ) $ (2,968 )
 

NET CHARGE-OFFS (4)

Alabama $ 55 $ 74 $ 132 $ 67 $ 11
Florida (2,524 ) (634 ) (138 ) (1,426 ) (849 )
Mississippi (2) 676 393 375 291 (290 )
Tennessee (3) (1 ) 506 (153 ) 103 249
Texas   (81 )   (138 )   353     194     (251 )
Total net (recoveries) charge-offs $ (1,875 ) $ 201   $ 569   $ (771 ) $ (1,130 )
 

CREDIT QUALITY RATIOS (1)

Net charge offs/average loans -0.13 % 0.01 % 0.04 % -0.05 % -0.08 %
Provision for loan losses/average loans -0.05 % -0.13 % -0.25 % -0.34 % -0.21 %
Nonperforming loans/total loans (incl LHFS) 1.06 % 1.10 % 1.26 % 1.29 % 1.45 %
Nonperforming assets/total loans (incl LHFS) 2.90 % 2.89 % 3.26 % 3.32 % 3.51 %
Nonperforming assets/total loans (incl LHFS) +ORE 2.85 % 2.84 % 3.20 % 3.26 % 3.44 %
ALL/total loans (excl LHFS) 1.14 % 1.15 % 1.20 % 1.31 % 1.39 %
ALL-commercial/total commercial loans 1.33 % 1.30 % 1.39 % 1.48 % 1.56 %
ALL-consumer/total consumer and home mortgage loans 0.65 % 0.75 % 0.73 % 0.84 % 0.94 %
ALL/nonperforming loans 105.50 % 101.86 % 93.53 % 97.99 % 92.29 %
ALL/nonperforming loans -
(excl impaired loans) 180.86 % 190.70 % 161.96 % 158.75 % 145.83 %
 

CAPITAL RATIOS

Total equity/total assets 11.39 % 11.49 % 11.26 % 11.18 % 11.42 %
Tangible equity/tangible assets 8.31 % 8.26 % 8.01 % 7.96 % 8.20 %
Tangible equity/risk-weighted assets 12.08 % 11.88 % 11.66 % 11.57 % 11.92 %
Tier 1 leverage ratio 9.14 % 9.06 % 8.78 % 8.71 % 9.83 %
Tier 1 common risk-based capital ratio 12.37 % 12.21 % 11.92 % 11.79 % 11.79 %
Tier 1 risk-based capital ratio 13.11 % 12.97 % 12.69 % 12.55 % 12.97 %
Total risk-based capital ratio 14.34 % 14.18 % 14.02 % 13.89 % 14.42 %
 
 
(1) - Excludes Acquired Loans and Covered Other Real Estate
(2) - Mississippi includes Central and Southern Mississippi Regions
(3) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions
(4) - Excludes Acquired Loans
 
 

See Notes to Consolidated Financials

 
 
 
 
 
 

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
March 31, 2014
($ in thousands)
(unaudited)

Note 1 – Business Combinations

Oxford, Mississippi Branches

On July 26, 2013, Trustmark National Bank (TNB), a subsidiary of Trustmark Corporation (Trustmark), completed its acquisition of two branches of SOUTHBank, F.S.B. (SOUTHBank), located in Oxford, Mississippi. As a result of this acquisition, TNB assumed deposit accounts of approximately $11.7 million in addition to purchasing the two physical branch offices. The transaction was not material to Trustmark’s consolidated financial statements and was not considered a business combination in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 805, “Business Combinations.”

BancTrust Financial Group, Inc.

On February 15, 2013, Trustmark completed its merger with BancTrust Financial Group, Inc. (BancTrust), a 26-year-old bank holding company headquartered in Mobile, Alabama. In accordance with the terms of the definitive agreement, the holders of BancTrust common stock received 0.125 of a share of Trustmark common stock for each share of BancTrust common stock in a tax-free exchange. Trustmark issued approximately 2.24 million shares of its common stock for all issued and outstanding shares of BancTrust common stock. The total value of the 2.24 million shares of Trustmark common stock issued to the BancTrust shareholders on the acquisition date was approximately $53.5 million, based on a closing stock price of $23.83 per share of Trustmark common stock on February 15, 2013. At closing, Trustmark repurchased the $50.0 million of BancTrust preferred stock and associated warrant issued to the U.S. Department of Treasury under the Capital Purchase Program for approximately $52.6 million.

This acquisition was accounted for under the acquisition method in accordance with FASB ASC Topic 805. Accordingly, the assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the acquisition date. The purchase price allocation was finalized in the first quarter of 2014.

The statement of assets purchased and liabilities assumed in the BancTrust acquisition is presented below at their adjusted estimated fair values as of the acquisition date of February 15, 2013 ($ in thousands):

             
Assets
Cash and due from banks $ 141,616
Securities 528,016
Loans held for sale 1,050
Acquired noncovered loans 944,235
Premises and equipment, net 54,952
Identifiable intangible assets 33,498
Other real estate 40,103
Other assets   109,423
Total Assets   1,852,893
 
Liabilities
Deposits 1,740,254
Other borrowings 64,051
Other liabilities   16,761
Total Liabilities   1,821,066
 
Net identified assets acquired at fair value 31,827
Goodwill   74,247
Net assets acquired at fair value $ 106,074
 

The excess of the consideration paid over the estimated fair value of the net assets acquired was $74.2 million, which was recorded as goodwill under FASB ASC Topic 805. The identifiable intangible assets acquired represent the core deposit intangible at fair value at the acquisition date. The core deposit intangible is being amortized on an accelerated basis over the estimated useful life, currently expected to be approximately 10 years.

Loans, excluding loans held for sale (LHFS), acquired from BancTrust were evaluated under a fair value process involving various degrees of deterioration in credit quality since origination, and also for those loans for which it was probable at acquisition that Trustmark would not be able to collect all contractually required payments. These loans, with the exception of revolving credit agreements and leases, are referred to as acquired impaired loans and are accounted for in accordance with FASB ASC Topic 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality.”

The operations of BancTrust are included in Trustmark’s operating results from February 15, 2013. Trustmark’s noninterest expense during the first quarter of 2013 included non-routine BancTrust transaction expenses totaling approximately $9.4 million (change in control and severance expense of $1.4 million included in salaries and benefits; professional fees, contract termination and other expenses of $7.9 million included in other expense).

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
March 31, 2014
($ in thousands)
(unaudited)

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 ($ in thousands):

             
3/31/2014 12/31/2013 9/30/2013 6/30/2013 3/31/2013

SECURITIES AVAILABLE FOR SALE

U.S. Treasury securities $ 100 $ 502 $ 503 $ 505 $ 506
U.S. Government agency obligations
Issued by U.S. Government agencies 123,368 129,293 133,013 139,066 141,226
Issued by U.S. Government sponsored agencies 40,601 40,179 132,425 133,791 186,293
Obligations of states and political subdivisions 172,437 171,738 212,991 212,204 218,467
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA 14,263 14,474 48,240 46,330 51,138
Issued by FNMA and FHLMC 232,488 241,118 214,795 227,927 241,365
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA 1,530,068 1,290,741 2,048,275 2,156,320 2,090,516
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA 232,072 242,172 354,131 361,575 377,070
Asset-backed securities and structured financial products   37,044   63,937   227,728   233,965   239,502
Total securities available for sale $ 2,382,441 $ 2,194,154 $ 3,372,101 $ 3,511,683 $ 3,546,083
 

SECURITIES HELD TO MATURITY

U.S. Government agency obligations
Issued by U.S. Government sponsored agencies $ 100,361 $ 100,159 $ - $ - $ -
Obligations of states and political subdivisions 65,757 65,987 30,229 30,295 33,071
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA 12,177 9,433 2,420 2,547 2,932
Issued by FNMA and FHLMC 12,395 12,724 564 567 569
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA 822,135 837,393 - - -
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA   142,744   143,032   36,767   36,929   37,094
Total securities held to maturity $ 1,155,569 $ 1,168,728 $ 69,980 $ 70,338 $ 73,666
 

During the fourth quarter of 2013, Trustmark reclassified approximately $1.099 billion of securities available for sale to securities held to maturity. The securities were transferred at fair value, which became the cost basis for the securities held to maturity. At the date of transfer, the net unrealized holding loss on the available for sale securities totaled approximately $46.6 million ($28.8 million, net of tax). The net unrealized holding loss is amortized over the remaining life of the securities as a yield adjustment in a manner consistent with the amortization or accretion of the original purchase premium or discount on the associated security. There were no gains or losses recognized as a result of the transfer. At March 31, 2014, the net unamortized, unrealized loss on the transferred securities included in accumulated other comprehensive (loss) income in the accompanying balance sheet totaled approximately $45.0 million ($27.8 million, net of tax).

During the fourth quarter of 2013, Trustmark sold $135.6 million of Collateralized Loan Obligations (CLO) generating a net gain of $1.3 million. These securities were identified as available for sale and had been carried in the asset-backed securities and structured financial products line item in the table shown above. This sale left Trustmark with a CLO balance of $25.9 million at December 31, 2013, which was subsequently sold in its entirety for a gain of $389 thousand in January 2014.

Management continues to focus on asset quality as one of the strategic goals of the securities portfolio, which is evidenced by the investment of approximately 93% of the portfolio in GSE-backed obligations and other Aaa rated securities as determined by Moody’s. None of the securities owned by Trustmark are collateralized by assets which are considered sub-prime. Furthermore, outside of stock ownership in the Federal Home Loan Bank of Dallas, Federal Home Loan Bank of Atlanta and Federal Reserve Bank, Trustmark does not hold any other equity investment in a GSE.

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
March 31, 2014
($ in thousands)
(unaudited)

Note 3 – Loan Composition

 

LHFI BY TYPE (excluding acquired loans)

  3/31/2014   12/31/2013   9/30/2013   6/30/2013   3/31/2013
Loans secured by real estate:
Construction, land development and other land loans $ 592,658 $ 596,889 $ 572,057 $ 519,263 $ 485,419
Secured by 1-4 family residential properties 1,533,781 1,485,564 1,482,963 1,414,871 1,430,293
Secured by nonfarm, nonresidential properties 1,461,947 1,415,139 1,408,342 1,406,930 1,385,669
Other real estate secured 193,221 189,362 196,328 192,568 174,680
Commercial and industrial loans 1,207,367 1,157,614 1,132,863 1,169,327 1,206,851
Consumer loans 160,153 165,308 164,612 160,318 160,253
Other loans   774,639     789,005     739,476     714,105     688,623  
LHFI 5,923,766 5,798,881 5,696,641 5,577,382 5,531,788
Allowance for loan losses   (67,518 )   (66,448 )   (68,632 )   (72,825 )   (76,900 )
Net LHFI $ 5,856,248   $ 5,732,433   $ 5,628,009   $ 5,504,557   $ 5,454,888  
         

ACQUIRED NONCOVERED LOANS BY TYPE

3/31/2014 12/31/2013 9/30/2013 6/30/2013 3/31/2013
Loans secured by real estate:
Construction, land development and other land loans $ 88,683 $ 98,928 $ 106,655 $ 132,116 $ 138,442
Secured by 1-4 family residential properties 145,213 157,914 168,573 184,928 209,658
Secured by nonfarm, nonresidential properties 271,696 287,136 301,686 318,603 339,953
Other real estate secured 34,787 33,948 35,051 34,869 32,208
Commercial and industrial loans 135,114 149,495 186,649 206,338 235,286
Consumer loans 15,024 18,428 22,251 27,420 32,694
Other loans   23,130     24,141     17,010     18,179     14,886  
Noncovered loans 713,647 769,990 837,875 922,453 1,003,127
Allowance for loan losses   (9,952 )   (7,249 )   (3,007 )   (112 )   (1,961 )
Net noncovered loans $ 703,695   $ 762,741   $ 834,868   $ 922,341   $ 1,001,166  
 

ACQUIRED COVERED LOANS BY TYPE

  3/31/2014   12/31/2013   9/30/2013   6/30/2013   3/31/2013
Loans secured by real estate:
Construction, land development and other land loans $ 2,239 $ 2,363 $ 2,585 $ 3,662 $ 3,875
Secured by 1-4 family residential properties 15,572 16,416 17,785 18,899 20,980
Secured by nonfarm, nonresidential properties 10,629 10,945 12,120 13,341 17,355
Other real estate secured 2,470 2,644 2,817 2,929 3,365
Commercial and industrial loans 361 394 478 543 648
Consumer loans 49 119 151 173 179
Other loans   1,350     1,335     1,314     1,273     1,187  
Covered loans 32,670 34,216 37,250 40,820 47,589
Allowance for loan losses   (588 )   (2,387 )   (2,326 )   (2,578 )   (4,497 )
Net covered loans $ 32,082   $ 31,829   $ 34,924   $ 38,242   $ 43,092  
 

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
March 31, 2014
($ in thousands)
(unaudited)

Note 3 – Loan Composition (continued)

 

  March 31, 2014

LHFI - COMPOSITION BY REGION (1)

Total   Alabama   Florida  

Mississippi

(Central and

Southern

Regions)

 

Tennessee

(Memphis, TN

and Northern

MS Regions)

  Texas
Loans secured by real estate:
Construction, land development and other land loans $ 592,658 $ 29,138 $ 73,701 $ 270,636 $ 45,633 $ 173,550
Secured by 1-4 family residential properties 1,533,781 22,052 50,445 1,313,006 126,892 21,386
Secured by nonfarm, nonresidential properties 1,461,947 33,887 150,099 782,049 150,114 345,798
Other real estate secured 193,221 5,119 4,513 131,007 29,052 23,530
Commercial and industrial loans 1,207,367 35,082 13,153 824,351 70,395 264,386
Consumer loans 160,153 14,546 2,804 123,053 17,202 2,548
Other loans 774,639 35,651 24,245 604,828 50,736 59,179
Loans $ 5,923,766 $ 175,475 $ 318,960 $ 4,048,930 $ 490,024 $ 890,377
 
 
 

CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION (1)

Lots $ 51,240 $ 1,222 $ 28,380 $ 16,325 $ 2,256 $ 3,057
Development 87,357 785 23,955 37,461 1,402 23,754
Unimproved land 115,034 2,099 18,836 55,473 23,658 14,968
1-4 family construction 101,903 16,432 1,875 58,788 2,042 22,766
Other construction 237,124 8,600 655 102,589 16,275 109,005
Construction, land development and other land loans $ 592,658 $ 29,138 $ 73,701 $ 270,636 $ 45,633 $ 173,550
 
 
 
 

LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION (1)

Income producing:
Retail $ 171,499 $ 7,462 $ 39,411 $ 65,221 $ 15,142 $ 44,263
Office 172,999 6,617 33,012 87,306 8,151 37,913
Nursing homes/assisted living 115,009 - - 91,915 6,000 17,094
Hotel/motel 84,857 - 359 60,235 24,263 -
Industrial 70,409 1,003 7,045 26,065 151 36,145
Health care 14,176 3,614 - 10,482 80 -
Convenience stores 11,683 254 - 6,460 2,356 2,613
Other 160,316 5,151 20,010 78,789 4,796 51,570
Total income producing loans 800,948 24,101 99,837 426,473 60,939 189,598
 
Owner-occupied:
Office 119,876 2,220 17,812 62,623 9,482 27,739
Churches 86,612 2,326 2,954 40,219 30,659 10,454
Industrial warehouses 90,362 1,105 3,096 41,402 8,411 36,348
Health care 100,937 260 14,071 57,224 14,478 14,904
Convenience stores 54,797 - 1,623 30,494 3,867 18,813
Retail 29,590 457 3,760 18,924 2,919 3,530
Restaurants 33,566 - 2,673 26,055 3,721 1,117
Auto dealerships 8,823 - 211 6,925 1,651 36
Other 136,436 3,418 4,062 71,710 13,987 43,259
Total owner-occupied loans 660,999 9,786 50,262 355,576 89,175 156,200
           
Loans secured by nonfarm, nonresidential properties $ 1,461,947 $ 33,887 $ 150,099 $ 782,049 $ 150,114 $ 345,798
 
(1) Excludes acquired loans.
 

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
March 31, 2014
($ in thousands)
(unaudited)

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
3/31/2014   12/31/2013   9/30/2013   6/30/2013   3/31/2013
Securities – taxable 2.39 % 2.30 % 2.22 % 2.24 % 2.33 %
Securities – nontaxable 4.31 % 4.28 % 4.25 % 4.31 % 4.44 %
Securities – total 2.50 % 2.40 % 2.32 % 2.35 % 2.45 %
Loans - LHFI & LHFS 4.51 % 4.55 % 4.69 % 4.74 % 4.76 %
Acquired loans 8.67 % 10.95 % 8.20 % 8.48 % 8.93 %
Loans - total 5.00 % 5.36 % 5.18 % 5.29 % 5.14 %
FF sold & rev repo 0.31 % 0.50 % 0.35 % 0.29 % 0.25 %
Other earning assets 4.13 % 4.53 % 3.86 % 4.29 % 4.15 %
Total earning assets 4.15 % 4.35 % 4.19 % 4.28 % 4.26 %
 
Interest-bearing deposits 0.24 % 0.27 % 0.27 % 0.28 % 0.30 %
FF pch & repo 0.11 % 0.11 % 0.12 % 0.11 % 0.12 %
Other borrowings 2.99 % 2.96 % 3.07 % 3.13 % 3.03 %
Total interest-bearing liabilities 0.30 % 0.33 % 0.33 % 0.34 % 0.37 %
 
Net interest margin 3.92 % 4.10 % 3.94 % 4.02 % 3.98 %
Net interest margin excluding acquired loans 3.52 % 3.48 % 3.52 % 3.55 % 3.66 %
 

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. In addition, the table includes net interest margin excluding acquired loans, which equals reported net interest income-FTE excluding interest income on acquired loans, annualized, as a percent of average earning assets excluding average acquired loans. The net interest margin declined 18 basis points during the first quarter of 2014 primarily due to a decrease in interest and fees on acquired loans, which was the result of decreased acquired loan recoveries during the quarter.

During the first quarter of 2014, the yield on average acquired loans includes approximately $3.8 million in recoveries, or an annualized 1.97% of the average acquired loan balance. Excluding the recoveries on acquired loans, the yield on average acquired loans totaled 6.70%.

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 positive ineffectiveness of $1.9 million and $1.3 million for the quarters ended March 31, 2014 and 2013, respectively.

The following table illustrates the components of mortgage banking revenues included in noninterest income in the accompanying income statements:

 
Quarter Ended
3/31/2014   12/31/2013   9/30/2013   6/30/2013   3/31/2013
Mortgage servicing income, net $ 4,539 $ 4,688 $ 4,552 $ 4,385 $ 4,267
Change in fair value-MSR from runoff (1,812 ) (2,182 ) (2,407 ) (2,756 ) (2,460 )
Gain on sales of loans, net 1,839 2,202 6,465 7,597 10,165
Other, net   400     (533 )   (1,485 )   (1,052 )   (1,649 )
Mortgage banking income before hedge ineffectiveness   4,966     4,175     7,125     8,174     10,323  
Change in fair value-MSR from market changes (723 ) 3,937 287 6,467 1,127
Change in fair value of derivatives   2,586     (2,926 )   1,028     (6,346 )   133  
Net positive hedge ineffectiveness   1,863     1,011     1,315     121     1,260  
Mortgage banking, net $ 6,829   $ 5,186   $ 8,440   $ 8,295   $ 11,583  
 

During the first quarter of 2013, Trustmark exercised its option to repurchase delinquent loans serviced for GNMA. These loans were subsequently sold to a third party under different repurchase provisions. Trustmark retained the servicing for these loans, which are fully guaranteed by FHA/VA. As a result of this repurchase and sale, the loans are no longer carried as "LHFS-Guaranteed GNMA serviced loans" (see pages 3 and 6). The transaction resulted in a gain of $534 thousand, which was recorded during the first quarter of 2013 and is included in the table above as "Gain on sales of loans, net.”

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
March 31, 2014
($ in thousands)
(unaudited)

Note 6 – Other Noninterest Income and Expense

Other noninterest income consisted of the following for the periods presented ($ in thousands):

 
Quarter Ended
3/31/2014   12/31/2013   9/30/2013   6/30/2013   3/31/2013
Partnership amortization for tax credit purposes $ (3,006 ) $ (5,642 ) $ (2,388 ) $ (2,221 ) $ (2,117 )
(Decrease) increase in FDIC indemnification asset (688 ) (2,429 ) 211 (2,317 ) (1,365 )
Other miscellaneous income   3,673     3,269     2,342     2,393     2,291  
Total other, net $ (21 ) $ (4,802 ) $ 165   $ (2,145 ) $ (1,191 )
 

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 or historical tax credits). These investments are recorded based on the equity method of accounting, which requires the equity in partnership losses to be recognized when incurred and are recorded as a reduction in other income. 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.

During the first quarter of 2014, other noninterest income included a write-down of the FDIC indemnification asset of $688 thousand on acquired covered loans obtained from Heritage as a result of loan pay-offs, improved cash flow projections and lower loss expectations for loan pools.

Other noninterest expense consisted of the following for the periods presented ($ in thousands):

 
Quarter Ended
3/31/2014   12/31/2013   9/30/2013   6/30/2013   3/31/2013
Loan expense $ 3,464 $ 4,419 $ 3,390 $ 4,267 $ 2,995
Non-routine transaction expenses on acquisitions - - - - 7,920
Amortization of intangibles 2,293 2,434 2,466 2,472 1,442
Other miscellaneous expense   7,495   8,555   7,675   11,832   5,694
Total other expense $ 13,252 $ 15,408 $ 13,531 $ 18,571 $ 18,051
 

Other miscellaneous expense increased during the second quarter of 2013 due to a non-routine litigation expense of $4.0 million related to a proposed settlement on Trustmark’s overdraft fees for insufficient funds on debit card purchases and ATM withdrawals as previously disclosed in the Form 8-K filed on June 26, 2013. During the first quarter of 2014, the United States District Court for the Southern District of Mississippi issued a final judgment approving the settlement.

As previously mentioned in Note 1 – Business Combinations, during the first quarter of 2013, Trustmark incurred $7.9 million of non-routine BancTrust transaction expenses in other noninterest expense. These non-routine transaction expenses include $2.2 million of professional fees and $5.7 million of contract termination and other expenses.

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 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.

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 consolidated financial statements in their entirety and not to rely on any single financial measure. The following table reconciles Trustmark’s calculation of these measures to amounts reported under GAAP.

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
March 31, 2014
($ in thousands)
(unaudited)

Note 7 – Non-GAAP Financial Measures (continued)

 

  Quarter Ended
3/31/2014   12/31/2013   9/30/2013   6/30/2013   3/31/2013

TANGIBLE EQUITY

AVERAGE BALANCES  
Total shareholders' equity $ 1,367,663 $ 1,346,975 $ 1,333,356 $ 1,344,360 $ 1,325,508
Less: Goodwill (372,720 ) (372,468 ) (368,482 ) (366,592 ) (324,902 )
Identifiable intangible assets   (41,015 )   (43,532 )   (45,988 )   (48,402 )   (35,187 )
Total average tangible equity $ 953,928   $ 930,975   $ 918,886   $ 929,366   $ 965,419  
 
PERIOD END BALANCES
Total shareholders' equity $ 1,373,895 $ 1,354,953 $ 1,329,514 $ 1,326,819 $ 1,352,946
Less: Goodwill (365,500 ) (372,851 ) (372,463 ) (368,315 ) (366,366 )
Identifiable intangible assets   (39,697 )   (41,990 )   (44,424 )   (46,889 )   (49,361 )
Total tangible equity (a) $ 968,698   $ 940,112   $ 912,627   $ 911,615   $ 937,219  
 

TANGIBLE ASSETS

Total assets $ 12,057,054 $ 11,790,383 $ 11,805,197 $ 11,863,312 $ 11,850,515
Less: Goodwill (365,500 ) (372,851 ) (372,463 ) (368,315 ) (366,366 )
Identifiable intangible assets   (39,697 )   (41,990 )   (44,424 )   (46,889 )   (49,361 )
Total tangible assets (b) $ 11,651,857   $ 11,375,542   $ 11,388,310   $ 11,448,108   $ 11,434,788  
 
Risk-weighted assets (c) $ 8,016,482   $ 7,916,378   $ 7,825,839   $ 7,878,281   $ 7,862,884  
 

NET INCOME ADJUSTED FOR INTANGIBLE AMORTIZATION

Net income $ 29,003 $ 28,039 $ 33,034 $ 31,121 $ 24,866
Plus: Intangible amortization net of tax   1,417     1,503     1,523     1,526     890  
Net income adjusted for intangible amortization $ 30,420   $ 29,542   $ 34,557   $ 32,647   $ 25,756  
 
Period end common shares outstanding (d)   67,439,562     67,372,980     67,181,694     67,163,195     67,151,087  
 

TANGIBLE COMMON EQUITY MEASUREMENTS

Return on average tangible equity 1 12.93 % 12.59 % 14.92 % 14.09 % 10.82 %
Tangible equity/tangible assets

(a)/(b)

8.31 % 8.26 % 8.01 % 7.96 % 8.20 %
Tangible equity/risk-weighted assets (a)/(c) 12.08 % 11.88 % 11.66 % 11.57 % 11.92 %
Tangible book value (a)/(d)*1,000 $ 14.36 $ 13.95 $ 13.58 $ 13.57 $ 13.96
 

TIER 1 COMMON RISK-BASED CAPITAL

Total shareholders' equity $ 1,373,895 $ 1,354,953 $ 1,329,514 $ 1,326,819 $ 1,352,946
Eliminate qualifying AOCI 38,497 43,731 52,226 36,088 (5,709 )
Qualifying tier 1 capital 60,000 60,000 60,000 60,000 93,000
Disallowed goodwill (365,500 ) (372,851 ) (372,463 ) (368,315 ) (366,366 )
Adj to goodwill allowed for deferred taxes 14,798 14,445 14,093 13,740 13,388
Other disallowed intangibles (39,697 ) (41,990 ) (44,424 ) (46,889 ) (49,361 )
Disallowed servicing intangible (6,761 ) (6,783 ) (6,315 ) (6,038 ) (5,153 )
Disallowed deferred taxes   (23,969 )   (24,647 )   (39,476 )   (26,411 )   (12,575 )
Total tier 1 capital 1,051,263 1,026,858 993,155 988,994 1,020,170
Less: Qualifying tier 1 capital   (60,000 )   (60,000 )   (60,000 )   (60,000 )   (93,000 )
Total tier 1 common capital (e) $ 991,263   $ 966,858   $ 933,155   $ 928,994   $ 927,170  
 
Tier 1 common risk-based capital ratio (e)/(c) 12.37 % 12.21 % 11.92 % 11.79 % 11.79 %
 
1 Calculation = ((net income adjusted for intangible amortization/number of days in period)*number of days in year)/total average tangible equity
 

Contacts

Trustmark Corporation
Investor Contacts:
Louis E. Greer, 601-208-2310
Treasurer and Principal Financial Officer
or
F. Joseph Rein, Jr., 601-208-6898
Senior Vice President
or
Media Contact:
Melanie A. Morgan, 601-208-2979
Senior Vice President

Trustmark Corporation Announces First Quarter 2014 Financial Results

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Trustmark Corporation Announces First Quarter 2014 Financial Results

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Contacts

Trustmark Corporation
Investor Contacts:
Louis E. Greer, 601-208-2310
Treasurer and Principal Financial Officer
or
F. Joseph Rein, Jr., 601-208-6898
Senior Vice President
or
Media Contact:
Melanie A. Morgan, 601-208-2979
Senior Vice President