JACKSON, Miss.--(BUSINESS WIRE)--Trustmark Corporation (NASDAQ:TRMK) reported net income of $27.0 million in the first quarter of 2016, representing diluted earnings per share of $0.40. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable June 15, 2016, to shareholders of record on June 1, 2016.
Printer friendly version of earnings release with consolidated financial statements and notes: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=51328149&lang=en
First Quarter Highlights
- Loans held for investment increased $176.6 million, or 10.0% annualized, from the prior quarter and $854.1 million, or 13.3%, year-over-year
- Continued solid credit performance; remain adequately reserved as the allowance for both held for investment and acquired loans represented 1.09% of total held for investment and acquired loans
- Revenue excluding acquired loans increased 3.0% linked quarter and 5.1% year-over-year to total $131.0 million in the first quarter
- Routine noninterest expense, which excludes ORE and intangible amortization, totaled $97.0 million, remaining stable from both the prior quarter and year-over-year
- Another tool for capital deployment: authorized a discretionary $100.0 million common share repurchase program through March 31, 2019
Gerard R. Host, President and CEO, stated, “Trustmark continued to achieve solid financial results. We maintained and expanded customer relationships by growing loans across our five-state franchise, while continuing to maintain solid credit quality. Routine noninterest expense remained well controlled. This past December, we introduced mobile deposit capabilities to myTrustmark℠, our consumer digital banking service, and adoption of this feature has been strong. We will continue to utilize technology to realign processes and enhance the Trustmark customer experience. During the first quarter, we authorized a discretionary $100.0 million common share repurchase program. We view this program as another capital management alternative, in addition to loan growth, acquisitions and a consistent dividend. Thanks to our associates, solid profitability and strong capital base, Trustmark remains well positioned to continue meeting the needs of our customers and creating long-term value for our shareholders.”
Balance Sheet Management
- Solid, diversified legacy loan growth demonstrates value of Trustmark’s five-state footprint
- Held-for-investment loan growth in the Texas market primarily reflects existing construction loans migrating to permanent financing within the portfolio as well as growth in loans to state and other political subdivisions
- Total deposits remained stable from the prior quarter with noninterest-bearing deposits representing approximately 29.8% of total deposits
- Solid capital base continues to provide flexibility in pursuing growth opportunities
Loans held for investment totaled $7.3 billion at March 31, 2016, an increase of 2.5% from the prior quarter and 13.3% from the comparable period one year earlier. Relative to the prior quarter, nonfarm, nonresidential real estate increased $156.8 million, reflecting growth in Alabama as well as migration of existing construction loans to permanent financing in the Mississippi and Texas markets. Similarly, other real estate secured loans, which include multifamily projects, expanded $62.5 million, also reflecting the migration of existing construction loans in the Texas market. Loans to state and other political subdivisions increased $52.4 million, driven primarily by growth in Texas and Alabama. Commercial and industrial loans increased $25.3 million, as growth in Tennessee, Mississippi, Florida and Texas, more than offset a marginal reduction in Alabama. Other loans, which include loans to nonprofits and real estate investment trusts, increased $21.0 million, driven principally by growth in Alabama and Tennessee.
Acquired loans totaled $364.8 million at March 31, 2016, down $25.7 million from the prior quarter. Collectively, loans held for investment and acquired loans totaled $7.6 billion at March 31, 2016, up $151.0 million, or 2.0%, from the prior quarter.
Deposits totaled $9.6 billion at March 31, 2016, remaining stable from the prior quarter. Trustmark continues to maintain an attractive, low-cost deposit base with approximately 60% of deposit balances in checking accounts and a total cost of deposits of 0.13%. The favorable mix of interest-bearing liabilities yielded a total cost of funds of 0.28% for the first quarter of 2016.
Trustmark’s capital position remained solid, reflecting the consistent profitability of its diversified financial services businesses. At March 31, 2016, Trustmark’s tangible equity to tangible assets ratio was 9.01%, while its total risk-based capital ratio was 13.92%. Tangible book value per share was $16.50 at March 31, 2016, up 6.2% year-over-year.
Credit Quality
- Other real estate decreased 7.0% and 20.4% from the prior quarter and year-over-year, respectively
- Net charge-offs were negligible and represented approximately 0.01% of average loans
- Allowance for loan losses represented 203.24% of nonperforming loans, excluding specifically reviewed impaired loans
Levels of both criticized and classified loan balances continued to reflect solid credit quality. Compared to balances one year earlier, criticized and classified loan balances decreased 5.1% and 4.0%, respectively. Relative to the prior quarter, criticized and classified loan balances increased 2.6% and 12.3%, respectively.
Nonperforming loans totaled $70.7 million at March 31, 2016, up 27.8% from the prior quarter and down 8.2% year-over-year; the linked-quarter increase was primarily a result of three substandard credits moving to nonaccrual status. Nonperforming assets, which include nonperforming loans and other real estate, totaled $142.5 million, reflecting a linked-quarter increase of 7.6% and year-over-year decrease of 14.8%.
Allocation of Trustmark's $69.7 million allowance for loan losses represented 1.06% of commercial loans and 0.65% of consumer and home mortgage loans, resulting in an allowance to total loans held for investment of 0.96% at March 31, 2016, representing a level management considers commensurate with the inherent risk in the loan portfolio. Collectively, the allowance for both held for investment and acquired loan losses represented 1.09% of total loans, which include held for investment and acquired loans.
Unless noted otherwise, all of the above credit quality metrics exclude acquired loans and other real estate covered by FDIC loss-share agreement.
Revenue Generation
- Net interest income (FTE) excluding acquired loans totaled $92.2 million in the first quarter, remaining stable from the prior quarter and up 6.7% year-over-year
- Noninterest income totaled $43.3 million, up 10.2% linked quarter and 2.2% year-over-year
Net interest income (FTE) in the first quarter totaled $99.2 million, resulting in a net interest margin of 3.54%. Relative to the prior quarter, net interest income (FTE) decreased $4.9 million as growth in interest income from both the held for sale and held for investment loan portfolios was more than offset by decreased interest income from the acquired loan portfolio. The yield on acquired loans in the first quarter totaled 7.46% and included recoveries from settlement of debt of $1.2 million; this compares to $5.4 million in recoveries from settlement of debt in the prior quarter. Excluding acquired loans, the net interest margin in the first quarter totaled 3.40%. Comparatively, the net interest margin (FTE) excluding both acquired loans and yield maintenance payments totaled 3.38% in the first quarter of 2016, remaining relatively stable from 3.40% in the prior quarter.
Noninterest income in the first quarter increased 10.2% from the prior quarter to total $43.3 million, as higher mortgage banking and other, net more than offset seasonal reductions in various fee-income categories. Service charges on deposit accounts declined $880 thousand from the prior quarter because of a seasonal reduction in NSF and overdraft fees. Bank card and other fees declined $238 thousand from the prior quarter because of a seasonal reduction in interchange income and lower revenue on interest rate swaps for commercial loan customers. Other, net increased $1.4 million from the prior quarter, resulting from decreased expense related to the FDIC indemnification asset as well as decreased partnership amortization of tax credit investments.
Insurance revenue totaled $8.6 million in the first quarter, up 1.1% from the prior quarter and down 0.3% year-over-year; this performance primarily reflects growth in the group health insurance business. Trustmark will continue to focus on business development as well as leveraging recent investments and restructuring initiatives to enhance growth and profitability.
Wealth management revenue in the first quarter totaled $7.4 million, down 5.4% and 7.3% from the prior quarter and year-over-year, respectively. The linked-quarter and year-over-year declines are primarily attributable to decreased revenue within investment services, somewhat reflecting volatile market conditions.
Mortgage banking revenue totaled $8.7 million in the first quarter, up $4.4 million from the prior quarter and down $266 thousand year-over-year. The linked-quarter change reflects an increased fair value on mortgage loans held for sale and positive mortgage servicing hedge ineffectiveness that more than offset decreased secondary marketing gains. Mortgage loan production totaled $307.5 million, down 9.6% from the prior quarter and up 1.0% year-over-year.
Noninterest Expense
- Noninterest expense remained stable at $98.9 million relative to the prior quarter and comparable period one year earlier
- Continued retail delivery channel optimization: will close six branches in the second quarter of 2016 across Alabama, Mississippi and Florida
Excluding ORE expense and intangible amortization of $2.0 million, routine noninterest expense in the first quarter totaled $97.0 million. Salaries and benefits totaled $57.2 million and remained stable from the prior quarter. Service and fees increased 5.5%, or $758 thousand, linked quarter primarily because of additional advertising and software expense. ORE and foreclosure expense totaled $181 thousand, up from the prior quarter, while net occupancy-premises expense totaled $6.2 million, down from the prior quarter. Other expense totaled $12.0 million, down $1.0 million on a linked-quarter basis.
Trustmark remains excited about the evolving role of technology in providing opportunities to expand product offerings that enhance the customer experience while reducing variable-servicing costs. Since the release of myTrustmark℠, our consumer digital banking service, adoption of online banking has notably increased with approximately two-thirds of these customers accessing myTrustmark℠ via mobile devices. Through Trustmark’s mobile-banking platform, customers are able to monitor accounts, pay bills, transfer funds, deposit checks and, more recently, track spending habits across multiple accounts, including those from other financial institutions. Trustmark will continue to expand product features and functionality to provide customers with the products and services they desire. The successful adoption of myTrustmark℠ not only enhances the customer experience, but also provides Trustmark with opportunities to realign resources, whether in the form of additional technology investments, branch office consolidations or branch office openings.
To that end, in the first quarter Trustmark opened one branch office in Tuscaloosa, Alabama, and closed one branch office in Meridian, Mississippi. During the second quarter of 2016, Trustmark plans to continue its measured approach to the optimization of its retail delivery channels by closing six branch offices with limited growth opportunities across Alabama, Mississippi and Florida. Overall, Trustmark is committed to developing and maintaining relationships, while supporting investments that promote 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 27, 2016, 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) 317-3051 or by clicking on the link provided under the Investor Relations section of our website at www.trustmark.com, which will also include a slide presentation Management will review during the conference call. A replay of the conference call will also be available through Wednesday, May 11, 2016, in archived format at the same web address or by calling (877) 344-7529, passcode 10083348.
Trustmark Corporation is a financial services company providing banking and financial solutions through 200 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 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 as well as crude oil prices, 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 issues relating to the European financial system, 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, cyber-attacks and other breaches which could affect our information system security, 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, 2016 | |||||||||||||||||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||||||||||||||
| Linked Quarter | Year over Year | ||||||||||||||||||||||||||||||||||||
|
QUARTERLY AVERAGE BALANCES |
3/31/2016 | 12/31/2015 | 3/31/2015 |
$ Change |
% Change | $ Change | % Change | ||||||||||||||||||||||||||||||
| Securities AFS-taxable | $ | 2,211,479 | $ | 2,209,801 | $ | 2,190,344 | $ | 1,678 | 0.1 | % | $ | 21,135 | 1.0 | % | |||||||||||||||||||||||
| Securities AFS-nontaxable | 105,844 | 110,290 | 127,623 | (4,446 | ) | -4.0 | % | (21,779 | ) | -17.1 | % | ||||||||||||||||||||||||||
| Securities HTM-taxable | 1,142,434 | 1,145,397 | 1,119,979 | (2,963 | ) | -0.3 | % | 22,455 | 2.0 | % | |||||||||||||||||||||||||||
| Securities HTM-nontaxable | 35,841 | 35,755 | 41,405 | 86 | 0.2 | % | (5,564 | ) | -13.4 | % | |||||||||||||||||||||||||||
| Total securities | 3,495,598 | 3,501,243 | 3,479,351 | (5,645 | ) | -0.2 | % | 16,247 | 0.5 | % | |||||||||||||||||||||||||||
| Loans (including loans held for sale) | 7,346,333 | 7,089,672 | 6,561,430 | 256,661 | 3.6 | % | 784,903 | 12.0 | % | ||||||||||||||||||||||||||||
| Acquired loans: | |||||||||||||||||||||||||||||||||||||
| Noncovered loans | 361,772 | 384,306 | 502,534 | (22,534 | ) | -5.9 | % | (140,762 | ) | -28.0 | % | ||||||||||||||||||||||||||
| Covered loans | 16,663 | 18,341 | 23,593 | (1,678 | ) | -9.1 | % | (6,930 | ) | -29.4 | % | ||||||||||||||||||||||||||
| Fed funds sold and rev repos | 382 | 1,384 | 217 | (1,002 | ) | -72.4 | % | 165 | 76.0 | % | |||||||||||||||||||||||||||
| Other earning assets | 66,702 | 68,016 | 46,368 | (1,314 | ) | -1.9 | % | 20,334 | 43.9 | % | |||||||||||||||||||||||||||
| Total earning assets | 11,287,450 | 11,062,962 | 10,613,493 | 224,488 | 2.0 | % | 673,957 | 6.4 | % | ||||||||||||||||||||||||||||
| Allowance for loan losses | (81,138 | ) | (78,652 | ) | (81,993 | ) | (2,486 | ) | 3.2 | % | 855 | -1.0 | % | ||||||||||||||||||||||||
| Cash and due from banks | 281,912 | 272,562 | 290,251 | 9,350 | 3.4 | % | (8,339 | ) | -2.9 | % | |||||||||||||||||||||||||||
| Other assets | 1,253,282 | 1,266,712 | 1,303,552 | (13,430 | ) | -1.1 | % | (50,270 | ) | -3.9 | % | ||||||||||||||||||||||||||
| Total assets | $ | 12,741,506 | $ | 12,523,584 | $ | 12,125,303 | $ | 217,922 | 1.7 | % | $ | 616,203 | 5.1 | % | |||||||||||||||||||||||
| Interest-bearing demand deposits | $ | 1,866,043 | $ | 1,917,598 | $ | 1,847,374 | $ | (51,555 | ) | -2.7 | % | $ | 18,669 | 1.0 | % | ||||||||||||||||||||||
| Savings deposits | 3,188,916 | 2,963,318 | 3,252,586 | 225,598 | 7.6 | % | (63,670 | ) | -2.0 | % | |||||||||||||||||||||||||||
| Time deposits less than $100,000 | 994,406 | 1,033,233 | 1,139,912 | (38,827 | ) | -3.8 | % | (145,506 | ) | -12.8 | % | ||||||||||||||||||||||||||
| Time deposits of $100,000 or more | 683,170 | 687,635 | 785,715 | (4,465 | ) | -0.6 | % | (102,545 | ) | -13.1 | % | ||||||||||||||||||||||||||
| Total interest-bearing deposits | 6,732,535 | 6,601,784 | 7,025,587 | 130,751 | 2.0 | % | (293,052 | ) | -4.2 | % | |||||||||||||||||||||||||||
| Fed funds purchased and repos | 517,180 | 563,424 | 421,206 | (46,244 | ) | -8.2 | % | 95,974 | 22.8 | % | |||||||||||||||||||||||||||
| Short-term borrowings | 413,616 | 733,365 | 256,714 | (319,749 | ) | -43.6 | % | 156,902 | 61.1 | % | |||||||||||||||||||||||||||
| Long-term FHLB advances | 501,144 | 50,078 | 1,243 | 451,066 | n/m | 499,901 | n/m | ||||||||||||||||||||||||||||||
| Subordinated notes | 49,972 | 49,964 | 49,939 | 8 | 0.0 | % | 33 | 0.1 | % | ||||||||||||||||||||||||||||
| Junior subordinated debt securities | 61,856 | 61,856 | 61,856 | — | 0.0 | % | — | 0.0 | % | ||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 8,276,303 | 8,060,471 | 7,816,545 | 215,832 | 2.7 | % | 459,758 | 5.9 | % | ||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 2,836,283 | 2,839,894 | 2,741,945 | (3,611 | ) | -0.1 | % | 94,338 | 3.4 | % | |||||||||||||||||||||||||||
| Other liabilities | 134,236 | 141,925 | 129,844 | (7,689 | ) | -5.4 | % | 4,392 | 3.4 | % | |||||||||||||||||||||||||||
| Total liabilities | 11,246,822 | 11,042,290 | 10,688,334 | 204,532 | 1.9 | % | 558,488 | 5.2 | % | ||||||||||||||||||||||||||||
| Shareholders' equity | 1,494,684 | 1,481,294 | 1,436,969 | 13,390 | 0.9 | % | 57,715 | 4.0 | % | ||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 12,741,506 | $ | 12,523,584 | $ | 12,125,303 | $ | 217,922 | 1.7 | % | $ | 616,203 | 5.1 | % | |||||||||||||||||||||||
| 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, 2016 | |||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||||||||||||||||
| Linked Quarter | Year over Year | ||||||||||||||||||||||||||||||||||||||
|
PERIOD END BALANCES |
3/31/2016 | 12/31/2015 | 3/31/2015 | $ Change | % Change | $ Change | % Change | ||||||||||||||||||||||||||||||||
| Cash and due from banks | $ | 228,498 | $ | 277,751 | $ | 335,244 | $ | (49,253 | ) | -17.7 | % | $ | (106,746 | ) | -31.8 | % | |||||||||||||||||||||||
| Fed funds sold and rev repos | — | 250 | — | (250 | ) | -100.0 | % | — | n/m | ||||||||||||||||||||||||||||||
| Securities available for sale | 2,368,120 | 2,345,422 | 2,381,459 | 22,698 | 1.0 | % | (13,339 | ) | -0.6 | % | |||||||||||||||||||||||||||||
| Securities held to maturity | 1,168,203 | 1,187,818 | 1,184,554 | (19,615 | ) | -1.7 | % | (16,351 | ) | -1.4 | % | ||||||||||||||||||||||||||||
| Loans held for sale (LHFS) | 191,028 | 160,189 | 150,365 | 30,839 | 19.3 | % | 40,663 | 27.0 | % | ||||||||||||||||||||||||||||||
| Loans held for investment (LHFI) | 7,268,022 | 7,091,385 | 6,413,876 | 176,637 | 2.5 | % | 854,146 | 13.3 | % | ||||||||||||||||||||||||||||||
| Allowance for loan losses | (69,668 | ) | (67,619 | ) | (71,321 | ) | (2,049 | ) | 3.0 | % | 1,653 | -2.3 | % | ||||||||||||||||||||||||||
| Net LHFI | 7,198,354 | 7,023,766 | 6,342,555 | 174,588 | 2.5 | % | 855,799 | 13.5 | % | ||||||||||||||||||||||||||||||
| Acquired loans: | |||||||||||||||||||||||||||||||||||||||
| Noncovered loans | 349,781 | 372,711 | 478,172 | (22,930 | ) | -6.2 | % | (128,391 | ) | -26.9 | % | ||||||||||||||||||||||||||||
| Covered loans | 14,974 | 17,700 | 20,271 | (2,726 | ) | -15.4 | % | (5,297 | ) | -26.1 | % | ||||||||||||||||||||||||||||
| Allowance for loan losses, acquired loans | (13,535 | ) | (11,992 | ) | (11,837 | ) | (1,543 | ) | 12.9 | % | (1,698 | ) | 14.3 | % | |||||||||||||||||||||||||
| Net acquired loans | 351,220 | 378,419 | 486,606 | (27,199 | ) | -7.2 | % | (135,386 | ) | -27.8 | % | ||||||||||||||||||||||||||||
| Net LHFI and acquired loans | 7,549,574 | 7,402,185 | 6,829,161 | 147,389 | 2.0 | % | 720,413 | 10.5 | % | ||||||||||||||||||||||||||||||
| Premises and equipment, net | 194,453 | 195,656 | 198,039 | (1,203 | ) | -0.6 | % | (3,586 | ) | -1.8 | % | ||||||||||||||||||||||||||||
| Mortgage servicing rights | 68,208 | 74,007 | 62,903 | (5,799 | ) | -7.8 | % | 5,305 | 8.4 | % | |||||||||||||||||||||||||||||
| Goodwill | 366,156 | 366,156 | 365,500 | — | 0.0 | % | 656 | 0.2 | % | ||||||||||||||||||||||||||||||
| Identifiable intangible assets | 25,751 | 27,546 | 31,250 | (1,795 | ) | -6.5 | % | (5,499 | ) | -17.6 | % | ||||||||||||||||||||||||||||
| Other real estate, excluding covered other real estate | 71,806 | 77,177 | 90,175 | (5,371 | ) | -7.0 | % | (18,369 | ) | -20.4 | % | ||||||||||||||||||||||||||||
| Covered other real estate | 496 | 1,651 | 4,794 | (1,155 | ) | -70.0 | % | (4,298 | ) | -89.7 | % | ||||||||||||||||||||||||||||
| FDIC indemnification asset | 506 | 738 | 4,743 | (232 | ) | -31.4 | % | (4,237 | ) | -89.3 | % | ||||||||||||||||||||||||||||
| Other assets | 542,397 | 562,350 | 540,977 | (19,953 | ) | -3.5 | % | 1,420 | 0.3 | % | |||||||||||||||||||||||||||||
| Total assets | $ | 12,775,196 | $ | 12,678,896 | $ | 12,179,164 | $ | 96,300 | 0.8 | % | $ | 596,032 | 4.9 | % | |||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||||||||||||||||
| Noninterest-bearing | $ | 2,874,306 | $ | 2,998,694 | $ | 2,936,875 | $ | (124,388 | ) | -4.1 | % | $ | (62,569 | ) | -2.1 | % | |||||||||||||||||||||||
| Interest-bearing | 6,759,337 | 6,589,536 | 6,970,115 | 169,801 | 2.6 | % | (210,778 | ) | -3.0 | % | |||||||||||||||||||||||||||||
| Total deposits | 9,633,643 | 9,588,230 | 9,906,990 | 45,413 | 0.5 | % | (273,347 | ) | -2.8 | % | |||||||||||||||||||||||||||||
| Fed funds purchased and repos | 466,436 | 441,042 | 523,187 | 25,394 | 5.8 | % | (56,751 | ) | -10.8 | % | |||||||||||||||||||||||||||||
| Short-term borrowings | 411,385 | 412,617 | 50,570 | (1,232 | ) | -0.3 | % | 360,815 | n/m | ||||||||||||||||||||||||||||||
| Long-term FHLB advances | 501,124 | 501,155 | 1,222 | (31 | ) | 0.0 | % | 499,902 | n/m | ||||||||||||||||||||||||||||||
| Subordinated notes | 49,977 | 49,969 | 49,944 | 8 | 0.0 | % | 33 | 0.1 | % | ||||||||||||||||||||||||||||||
| Junior subordinated debt securities | 61,856 | 61,856 | 61,856 | — | 0.0 | % | — | 0.0 | % | ||||||||||||||||||||||||||||||
| Other liabilities | 142,519 | 150,970 | 139,311 | (8,451 | ) | -5.6 | % | 3,208 | 2.3 | % | |||||||||||||||||||||||||||||
| Total liabilities | 11,266,940 | 11,205,839 | 10,733,080 | 61,101 | 0.5 | % | 533,860 | 5.0 | % | ||||||||||||||||||||||||||||||
| Common stock | 14,093 | 14,076 | 14,076 | 17 | 0.1 | % | 17 | 0.1 | % | ||||||||||||||||||||||||||||||
| Capital surplus | 363,979 | 361,467 | 358,583 | 2,512 | 0.7 | % | 5,396 | 1.5 | % | ||||||||||||||||||||||||||||||
| Retained earnings | 1,151,757 | 1,142,908 | 1,103,077 | 8,849 | 0.8 | % | 48,680 | 4.4 | % | ||||||||||||||||||||||||||||||
| Accum other comprehensive loss, net of tax | (21,573 | ) | (45,394 | ) | (29,652 | ) | 23,821 | -52.5 | % | 8,079 | -27.2 | % | |||||||||||||||||||||||||||
| Total shareholders' equity | 1,508,256 | 1,473,057 | 1,446,084 | 35,199 | 2.4 | % | 62,172 | 4.3 | % | ||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 12,775,196 | $ | 12,678,896 | $ | 12,179,164 | $ | 96,300 | 0.8 | % | $ | 596,032 | 4.9 | % | |||||||||||||||||||||||||
| 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, 2016 | |||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands except per share data) | |||||||||||||||||||||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||||||||||||||||||||
| Quarter Ended | Linked Quarter | Year over Year | |||||||||||||||||||||||||||||||||||||||||
|
INCOME STATEMENTS |
3/31/2016 | 12/31/2015 | 3/31/2015 | $ Change | % Change | $ Change | % Change | ||||||||||||||||||||||||||||||||||||
| Interest and fees on LHFS & LHFI-FTE | $ | 76,235 | $ | 74,383 | $ | 69,658 | $ | 1,852 | 2.5 | % | $ | 6,577 | 9.4 | % | |||||||||||||||||||||||||||||
| Interest and fees on acquired loans | 7,022 | 11,910 | 15,078 | (4,888 | ) | -41.0 | % | (8,056 | ) | -53.4 | % | ||||||||||||||||||||||||||||||||
| Interest on securities-taxable | 20,086 | 21,149 | 19,586 | (1,063 | ) | -5.0 | % | 500 | 2.6 | % | |||||||||||||||||||||||||||||||||
| Interest on securities-tax exempt-FTE | 1,497 | 1,565 | 1,789 | (68 | ) | -4.3 | % | (292 | ) | -16.3 | % | ||||||||||||||||||||||||||||||||
| Interest on fed funds sold and rev repos | 1 | 4 | — | (3 | ) | -75.0 | % | 1 | n/m | ||||||||||||||||||||||||||||||||||
| Other interest income | 230 | 402 | 393 | (172 | ) | -42.8 | % | (163 | ) | -41.5 | % | ||||||||||||||||||||||||||||||||
| Total interest income-FTE | 105,071 | 109,413 | 106,504 | (4,342 | ) | -4.0 | % | (1,433 | ) | -1.3 | % | ||||||||||||||||||||||||||||||||
| Interest on deposits | 3,038 | 3,000 | 3,247 | 38 | 1.3 | % | (209 | ) | -6.4 | % | |||||||||||||||||||||||||||||||||
| Interest on fed funds pch and repos | 431 | 274 | 143 | 157 | 57.3 | % | 288 | n/m | |||||||||||||||||||||||||||||||||||
| Other interest expense | 2,389 | 1,987 | 1,649 | 402 | 20.2 | % | 740 | 44.9 | % | ||||||||||||||||||||||||||||||||||
| Total interest expense | 5,858 | 5,261 | 5,039 | 597 | 11.3 | % | 819 | 16.3 | % | ||||||||||||||||||||||||||||||||||
| Net interest income-FTE | 99,213 | 104,152 | 101,465 | (4,939 | ) | -4.7 | % | (2,252 | ) | -2.2 | % | ||||||||||||||||||||||||||||||||
| Provision for loan losses, LHFI | 2,243 | 3,043 | 1,785 | (800 | ) | -26.3 | % | 458 | 25.7 | % | |||||||||||||||||||||||||||||||||
| Provision for loan losses, acquired loans | 1,309 | 997 | 347 | 312 | 31.3 | % | 962 | n/m | |||||||||||||||||||||||||||||||||||
| Net interest income after provision-FTE | 95,661 | 100,112 | 99,333 | (4,451 | ) | -4.4 | % | (3,672 | ) | -3.7 | % | ||||||||||||||||||||||||||||||||
| Service charges on deposit accounts | 11,081 | 11,961 | 11,085 | (880 | ) | -7.4 | % | (4 | ) | 0.0 | % | ||||||||||||||||||||||||||||||||
| Insurance commissions | 8,593 | 8,501 | 8,616 | 92 | 1.1 | % | (23 | ) | -0.3 | % | |||||||||||||||||||||||||||||||||
| Wealth management | 7,407 | 7,831 | 7,990 | (424 | ) | -5.4 | % | (583 | ) | -7.3 | % | ||||||||||||||||||||||||||||||||
| Bank card and other fees | 6,918 | 7,156 | 6,762 | (238 | ) | -3.3 | % | 156 | 2.3 | % | |||||||||||||||||||||||||||||||||
| Mortgage banking, net | 8,699 | 4,287 | 8,965 | 4,412 | n/m | (266 | ) | -3.0 | % | ||||||||||||||||||||||||||||||||||
| Other, net | 888 | (466 | ) | (1,055 | ) | 1,354 | n/m | 1,943 | n/m | ||||||||||||||||||||||||||||||||||
| Nonint inc-excl sec gains (losses), net | 43,586 | 39,270 | 42,363 | 4,316 | 11.0 | % | 1,223 | 2.9 | % | ||||||||||||||||||||||||||||||||||
| Security gains (losses), net | (310 | ) | — | — | (310 | ) | n/m | (310 | ) | n/m | |||||||||||||||||||||||||||||||||
| Total noninterest income | 43,276 | 39,270 | 42,363 | 4,006 | 10.2 | % | 913 | 2.2 | % | ||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | 57,201 | 57,366 | 57,169 | (165 | ) | -0.3 | % | 32 | 0.1 | % | |||||||||||||||||||||||||||||||||
| Services and fees | 14,475 | 13,717 | 14,121 | 758 | 5.5 | % | 354 | 2.5 | % | ||||||||||||||||||||||||||||||||||
| Net occupancy-premises | 6,188 | 6,304 | 6,191 | (116 | ) | -1.8 | % | (3 | ) | 0.0 | % | ||||||||||||||||||||||||||||||||
| Equipment expense | 6,094 | 6,105 | 5,974 | (11 | ) | -0.2 | % | 120 | 2.0 | % | |||||||||||||||||||||||||||||||||
| FDIC assessment expense | 2,811 | 2,614 | 2,940 | 197 | 7.5 | % | (129 | ) | -4.4 | % | |||||||||||||||||||||||||||||||||
| ORE/Foreclosure expense | 181 | (518 | ) | 1,115 | 699 | n/m | (934 | ) | -83.8 | % | |||||||||||||||||||||||||||||||||
| Other expense | 11,994 | 13,032 | 11,706 | (1,038 | ) | -8.0 | % | 288 | 2.5 | % | |||||||||||||||||||||||||||||||||
| Total noninterest expense | 98,944 | 98,620 | 99,216 | 324 | 0.3 | % | (272 | ) | -0.3 | % | |||||||||||||||||||||||||||||||||
| Income before income taxes and tax eq adj | 39,993 | 40,762 | 42,480 | (769 | ) | -1.9 | % | (2,487 | ) | -5.9 | % | ||||||||||||||||||||||||||||||||
| Tax equivalent adjustment | 4,473 | 4,334 | 4,073 | 139 | 3.2 | % | 400 | 9.8 | % | ||||||||||||||||||||||||||||||||||
| Income before income taxes | 35,520 | 36,428 | 38,407 | (908 | ) | -2.5 | % | (2,887 | ) | -7.5 | % | ||||||||||||||||||||||||||||||||
| Income taxes | 8,517 | 8,570 | 9,259 | (53 | ) | -0.6 | % | (742 | ) | -8.0 | % | ||||||||||||||||||||||||||||||||
| Net income | $ | 27,003 | $ | 27,858 | $ | 29,148 | $ | (855 | ) | -3.1 | % | $ | (2,145 | ) | -7.4 | % | |||||||||||||||||||||||||||
| Per share data | |||||||||||||||||||||||||||||||||||||||||||
| Earnings per share - basic | $ | 0.40 | $ | 0.41 | $ | 0.43 | $ | (0.01 | ) | -2.4 | % | $ | (0.03 | ) | -7.0 | % | |||||||||||||||||||||||||||
| Earnings per share - diluted | $ | 0.40 | $ | 0.41 | $ | 0.43 | $ | (0.01 | ) | -2.4 | % | $ | (0.03 | ) | -7.0 | % | |||||||||||||||||||||||||||
| Dividends per share | $ | 0.23 | $ | 0.23 | $ | 0.23 | — | 0.0 | % | — | 0.0 | % | |||||||||||||||||||||||||||||||
| Weighted average shares outstanding | |||||||||||||||||||||||||||||||||||||||||||
| Basic | 67,609,662 | 67,557,991 | 67,525,791 | ||||||||||||||||||||||||||||||||||||||||
| Diluted | 67,746,592 | 67,734,109 | 67,639,326 | ||||||||||||||||||||||||||||||||||||||||
| Period end shares outstanding | 67,639,832 | 67,559,128 | 67,556,591 | ||||||||||||||||||||||||||||||||||||||||
| 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, 2016 | ||||||||||||||||||||||||||||||||||||||||||
|
($ in thousands) |
||||||||||||||||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||||||||||||||
| Quarter Ended | Linked Quarter | Year over Year | ||||||||||||||||||||||||||||||||||||||||
|
NONPERFORMING ASSETS (1) |
3/31/2016 | 12/31/2015 | 3/31/2015 | $ Change | % Change | $ Change | % Change | |||||||||||||||||||||||||||||||||||
| Nonaccrual loans | ||||||||||||||||||||||||||||||||||||||||||
| Alabama | $ | 1,788 | $ | 1,776 | $ | 902 | $ | 12 | 0.7 | % | $ | 886 | 98.2 | % | ||||||||||||||||||||||||||||
| Florida | 4,952 | 5,180 | 8,179 | (228 | ) | -4.4 | % | (3,227 | ) | -39.5 | % | |||||||||||||||||||||||||||||||
| Mississippi (2) | 56,590 | 40,754 | 52,145 | 15,836 | 38.9 | % | 4,445 | 8.5 | % | |||||||||||||||||||||||||||||||||
| Tennessee (3) | 5,849 | 5,106 | 4,197 | 743 | 14.6 | % | 1,652 | 39.4 | % | |||||||||||||||||||||||||||||||||
| Texas | 1,515 | 2,496 | 11,585 | (981 | ) | -39.3 | % | (10,070 | ) | -86.9 | % | |||||||||||||||||||||||||||||||
| Total nonaccrual loans | 70,694 | 55,312 | 77,008 | 15,382 | 27.8 | % | (6,314 | ) | -8.2 | % | ||||||||||||||||||||||||||||||||
| Other real estate | ||||||||||||||||||||||||||||||||||||||||||
| Alabama | 19,137 | 21,578 | 21,795 | (2,441 | ) | -11.3 | % | (2,658 | ) | -12.2 | % | |||||||||||||||||||||||||||||||
| Florida | 27,907 | 29,579 | 34,746 | (1,672 | ) | -5.7 | % | (6,839 | ) | -19.7 | % | |||||||||||||||||||||||||||||||
| Mississippi (2) | 14,511 | 14,312 | 15,143 | 199 | 1.4 | % | (632 | ) | -4.2 | % | ||||||||||||||||||||||||||||||||
| Tennessee (3) | 8,699 | 9,974 | 10,072 | (1,275 | ) | -12.8 | % | (1,373 | ) | -13.6 | % | |||||||||||||||||||||||||||||||
| Texas | 1,552 | 1,734 | 8,419 | (182 | ) | -10.5 | % | (6,867 | ) | -81.6 | % | |||||||||||||||||||||||||||||||
| Total other real estate | 71,806 | 77,177 | 90,175 | (5,371 | ) | -7.0 | % | (18,369 | ) | -20.4 | % | |||||||||||||||||||||||||||||||
| Total nonperforming assets | $ | 142,500 | $ | 132,489 | $ | 167,183 | $ | 10,011 | 7.6 | % | $ | (24,683 | ) | -14.8 | % | |||||||||||||||||||||||||||
|
LOANS PAST DUE OVER 90 DAYS (4) |
||||||||||||||||||||||||||||||||||||||||||
| LHFI | $ | 611 | $ | 2,300 | $ | 1,413 | $ | (1,689 | ) | -73.4 | % | $ | (802 | ) | -56.8 | % | ||||||||||||||||||||||||||
| LHFS-Guaranteed GNMA serviced loans | ||||||||||||||||||||||||||||||||||||||||||
| (no obligation to repurchase) | $ | 24,110 | $ | 21,812 | $ | 7,584 | $ | 2,298 | 10.5 | % | $ | 16,526 | n/m | |||||||||||||||||||||||||||||
| Quarter Ended | Linked Quarter | Year over Year | ||||||||||||||||||||||||||||||||||||||||
|
ALLOWANCE FOR LOAN LOSSES (4) |
3/31/2016 | 12/31/2015 | 3/31/2015 | $ Change | % Change | $ Change | % Change | |||||||||||||||||||||||||||||||||||
| Beginning Balance | $ | 67,619 | $ | 65,607 | $ | 69,616 | $ | 2,012 | 3.1 | % | $ | (1,997 | ) | -2.9 | % | |||||||||||||||||||||||||||
| Provision for loan losses | 2,243 | 3,043 | 1,785 | (800 | ) | -26.3 | % | 458 | 25.7 | % | ||||||||||||||||||||||||||||||||
| Charge-offs | (3,363 | ) | (3,781 | ) | (3,004 | ) | 418 | -11.1 | % | (359 | ) | 12.0 | % | |||||||||||||||||||||||||||||
| Recoveries | 3,169 | 2,750 | 2,924 | 419 | 15.2 | % | 245 | 8.4 | % | |||||||||||||||||||||||||||||||||
| Net (charge-offs) recoveries | (194 | ) | (1,031 | ) | (80 | ) | 837 | -81.2 | % | (114 | ) | n/m | ||||||||||||||||||||||||||||||
| Ending Balance | $ | 69,668 | $ | 67,619 | $ | 71,321 | $ | 2,049 | 3.0 | % | $ | (1,653 | ) | -2.3 | % | |||||||||||||||||||||||||||
|
PROVISION FOR LOAN LOSSES (4) |
||||||||||||||||||||||||||||||||||||||||||
| Alabama | $ | 540 | $ | 1,453 | $ | 761 | $ | (913 | ) | -62.8 | % | $ | (221 | ) | -29.0 | % | ||||||||||||||||||||||||||
| Florida | (818 | ) | (1,357 | ) | 1,833 | 539 | -39.7 | % | (2,651 | ) | n/m | |||||||||||||||||||||||||||||||
| Mississippi (2) | 1,848 | 1,842 | (2,729 | ) | 6 | 0.3 | % | 4,577 | n/m | |||||||||||||||||||||||||||||||||
| Tennessee (3) | 138 | 182 | 1,432 | (44 | ) | -24.2 | % | (1,294 | ) | -90.4 | % | |||||||||||||||||||||||||||||||
| Texas | 535 | 923 | 488 | (388 | ) | -42.0 | % | 47 | 9.6 | % | ||||||||||||||||||||||||||||||||
| Total provision for loan losses | $ | 2,243 | $ | 3,043 | $ | 1,785 | $ | (800 | ) | -26.3 | % | $ | 458 | 25.7 | % | |||||||||||||||||||||||||||
|
NET CHARGE-OFFS (4) |
||||||||||||||||||||||||||||||||||||||||||
| Alabama | $ | 63 | $ | 422 | $ | 144 | $ | (359 | ) | -85.1 | % | $ | (81 | ) | -56.3 | % | ||||||||||||||||||||||||||
| Florida | (674 | ) | (389 | ) | (28 | ) | (285 | ) | 73.3 | % | (646 | ) | n/m | |||||||||||||||||||||||||||||
| Mississippi (2) | (74 | ) | 925 | 143 | (999 | ) | n/m | (217 | ) | n/m | ||||||||||||||||||||||||||||||||
| Tennessee (3) | 8 | 188 | (216 | ) | (180 | ) | -95.7 | % | 224 | n/m | ||||||||||||||||||||||||||||||||
| Texas | 871 | (115 | ) | 37 | 986 | n/m | 834 | n/m | ||||||||||||||||||||||||||||||||||
| Total net charge-offs (recoveries) | $ | 194 | $ | 1,031 | $ | 80 | $ | (837 | ) | -81.2 | % | $ | 114 | n/m | ||||||||||||||||||||||||||||
| (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, 2016 | ||||||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||||||||||||
|
AVERAGE BALANCES |
3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | |||||||||||||||||||||||||
| Securities AFS-taxable | $ | 2,211,479 | $ | 2,209,801 | $ | 2,269,763 | $ | 2,255,485 | $ | 2,190,344 | ||||||||||||||||||||
| Securities AFS-nontaxable | 105,844 | 110,290 | 116,290 | 120,330 | 127,623 | |||||||||||||||||||||||||
| Securities HTM-taxable | 1,142,434 | 1,145,397 | 1,151,673 | 1,143,273 | 1,119,979 | |||||||||||||||||||||||||
| Securities HTM-nontaxable | 35,841 | 35,755 | 36,278 | 38,173 | 41,405 | |||||||||||||||||||||||||
| Total securities | 3,495,598 | 3,501,243 | 3,574,004 | 3,557,261 | 3,479,351 | |||||||||||||||||||||||||
| Loans (including loans held for sale) | 7,346,333 | 7,089,672 | 6,771,947 | 6,554,739 | 6,561,430 | |||||||||||||||||||||||||
| Acquired loans: | ||||||||||||||||||||||||||||||
| Noncovered loans | 361,772 | 384,306 | 421,262 | 462,418 | 502,534 | |||||||||||||||||||||||||
| Covered loans | 16,663 | 18,341 | 18,982 | 20,574 | 23,593 | |||||||||||||||||||||||||
| Fed funds sold and rev repos | 382 | 1,384 | 1,167 | 557 | 217 | |||||||||||||||||||||||||
| Other earning assets | 66,702 | 68,016 | 58,534 | 41,242 | 46,368 | |||||||||||||||||||||||||
| Total earning assets | 11,287,450 | 11,062,962 | 10,845,896 | 10,636,791 | 10,613,493 | |||||||||||||||||||||||||
| Allowance for loan losses | (81,138 | ) | (78,652 | ) | (84,482 | ) | (84,331 | ) | (81,993 | ) | ||||||||||||||||||||
| Cash and due from banks | 281,912 | 272,562 | 266,174 | 272,292 | 290,251 | |||||||||||||||||||||||||
| Other assets | 1,253,282 | 1,266,712 | 1,286,189 | 1,288,507 | 1,303,552 | |||||||||||||||||||||||||
| Total assets | $ | 12,741,506 | $ | 12,523,584 | $ | 12,313,777 | $ | 12,113,259 | $ | 12,125,303 | ||||||||||||||||||||
| Interest-bearing demand deposits | $ | 1,866,043 | $ | 1,917,598 | $ | 1,915,567 | $ | 1,924,447 | $ | 1,847,374 | ||||||||||||||||||||
| Savings deposits | 3,188,916 | 2,963,318 | 3,059,183 | 3,226,380 | 3,252,586 | |||||||||||||||||||||||||
| Time deposits less than $100,000 | 994,406 | 1,033,233 | 1,072,373 | 1,101,477 | 1,139,912 | |||||||||||||||||||||||||
| Time deposits of $100,000 or more | 683,170 | 687,635 | 712,910 | 751,129 | 785,715 | |||||||||||||||||||||||||
| Total interest-bearing deposits | 6,732,535 | 6,601,784 | 6,760,033 | 7,003,433 | 7,025,587 | |||||||||||||||||||||||||
| Fed funds purchased and repos | 517,180 | 563,424 | 528,232 | 497,606 | 421,206 | |||||||||||||||||||||||||
| Short-term borrowings | 413,616 | 733,365 | 534,931 | 128,761 | 256,714 | |||||||||||||||||||||||||
| Long-term FHLB advances | 501,144 | 50,078 | 1,195 | 1,213 | 1,243 | |||||||||||||||||||||||||
| Subordinated notes | 49,972 | 49,964 | 49,955 | 49,947 | 49,939 | |||||||||||||||||||||||||
| Junior subordinated debt securities | 61,856 | 61,856 | 61,856 | 61,856 | 61,856 | |||||||||||||||||||||||||
| Total interest-bearing liabilities | 8,276,303 | 8,060,471 | 7,936,202 | 7,742,816 | 7,816,545 | |||||||||||||||||||||||||
| Noninterest-bearing deposits | 2,836,283 | 2,839,894 | 2,771,186 | 2,772,741 | 2,741,945 | |||||||||||||||||||||||||
| Other liabilities | 134,236 | 141,925 | 137,134 | 143,201 | 129,844 | |||||||||||||||||||||||||
| Total liabilities | 11,246,822 | 11,042,290 | 10,844,522 | 10,658,758 | 10,688,334 | |||||||||||||||||||||||||
| Shareholders' equity | 1,494,684 | 1,481,294 | 1,469,255 | 1,454,501 | 1,436,969 | |||||||||||||||||||||||||
| Total liabilities and equity | $ | 12,741,506 | $ | 12,523,584 | $ | 12,313,777 | $ | 12,113,259 | $ | 12,125,303 | ||||||||||||||||||||
|
See Notes to Consolidated Financials |
||||||||||||||||||||||||||||||
| TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||||||||||||||||
| March 31, 2016 | ||||||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||
|
PERIOD END BALANCES |
3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | |||||||||||||||||||||||||
| Cash and due from banks | $ | 228,498 | $ | 277,751 | $ | 220,052 | $ | 255,050 | $ | 335,244 | ||||||||||||||||||||
| Fed funds sold and rev repos | — | 250 | — | — | — | |||||||||||||||||||||||||
| Securities available for sale | 2,368,120 | 2,345,422 | 2,382,822 | 2,446,383 | 2,381,459 | |||||||||||||||||||||||||
| Securities held to maturity | 1,168,203 | 1,187,818 | 1,178,440 | 1,190,161 | 1,184,554 | |||||||||||||||||||||||||
| Loans held for sale (LHFS) | 191,028 | 160,189 | 173,679 | 147,539 | 150,365 | |||||||||||||||||||||||||
| Loans held for investment (LHFI) | 7,268,022 | 7,091,385 | 6,791,643 | 6,447,073 | 6,413,876 | |||||||||||||||||||||||||
| Allowance for loan losses | (69,668 | ) | (67,619 | ) | (65,607 | ) | (71,166 | ) | (71,321 | ) | ||||||||||||||||||||
| Net LHFI | 7,198,354 | 7,023,766 | 6,726,036 | 6,375,907 | 6,342,555 | |||||||||||||||||||||||||
| Acquired loans: | ||||||||||||||||||||||||||||||
| Noncovered loans | 349,781 | 372,711 | 400,528 | 447,160 | 478,172 | |||||||||||||||||||||||||
| Covered loans | 14,974 | 17,700 | 18,645 | 19,239 | 20,271 | |||||||||||||||||||||||||
| Allowance for loan losses, acquired loans | (13,535 | ) | (11,992 | ) | (12,185 | ) | (12,629 | ) | (11,837 | ) | ||||||||||||||||||||
| Net acquired loans | 351,220 | 378,419 | 406,988 | 453,770 | 486,606 | |||||||||||||||||||||||||
| Net LHFI and acquired loans | 7,549,574 | 7,402,185 | 7,133,024 | 6,829,677 | 6,829,161 | |||||||||||||||||||||||||
| Premises and equipment, net | 194,453 | 195,656 | 196,558 | 196,220 | 198,039 | |||||||||||||||||||||||||
| Mortgage servicing rights | 68,208 | 74,007 | 69,809 | 71,422 | 62,903 | |||||||||||||||||||||||||
| Goodwill | 366,156 | 366,156 | 365,500 | 365,500 | 365,500 | |||||||||||||||||||||||||
| Identifiable intangible assets | 25,751 | 27,546 | 30,129 | 32,042 | 31,250 | |||||||||||||||||||||||||
| Other real estate, excluding covered other real estate | 71,806 | 77,177 | 83,955 | 90,748 | 90,175 | |||||||||||||||||||||||||
| Covered other real estate | 496 | 1,651 | 2,865 | 3,755 | 4,794 | |||||||||||||||||||||||||
| FDIC indemnification asset | 506 | 738 | 1,749 | 2,632 | 4,743 | |||||||||||||||||||||||||
| Other assets | 542,397 | 562,350 | 551,694 | 551,319 | 540,977 | |||||||||||||||||||||||||
| Total assets | $ | 12,775,196 | $ | 12,678,896 | $ | 12,390,276 | $ | 12,182,448 | $ | 12,179,164 | ||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||||||||
| Noninterest-bearing | $ | 2,874,306 | $ | 2,998,694 | $ | 2,787,454 | $ | 2,819,171 | $ | 2,936,875 | ||||||||||||||||||||
| Interest-bearing | 6,759,337 | 6,589,536 | 6,624,950 | 6,973,003 | 6,970,115 | |||||||||||||||||||||||||
| Total deposits | 9,633,643 | 9,588,230 | 9,412,404 | 9,792,174 | 9,906,990 | |||||||||||||||||||||||||
| Fed funds purchased and repos | 466,436 | 441,042 | 534,204 | 477,462 | 523,187 | |||||||||||||||||||||||||
| Short-term borrowings | 411,385 | 412,617 | 709,845 | 201,744 | 50,570 | |||||||||||||||||||||||||
| Long-term FHLB advances | 501,124 | 501,155 | 1,173 | 1,204 | 1,222 | |||||||||||||||||||||||||
| Subordinated notes | 49,977 | 49,969 | 49,961 | 49,953 | 49,944 | |||||||||||||||||||||||||
| Junior subordinated debt securities | 61,856 | 61,856 | 61,856 | 61,856 | 61,856 | |||||||||||||||||||||||||
| Other liabilities | 142,519 | 150,970 | 144,077 | 147,646 | 139,311 | |||||||||||||||||||||||||
| Total liabilities | 11,266,940 | 11,205,839 | 10,913,520 | 10,732,039 | 10,733,080 | |||||||||||||||||||||||||
| Common stock | 14,093 | 14,076 | 14,076 | 14,076 | 14,076 | |||||||||||||||||||||||||
| Capital surplus | 363,979 | 361,467 | 360,494 | 359,533 | 358,583 | |||||||||||||||||||||||||
| Retained earnings | 1,151,757 | 1,142,908 | 1,130,766 | 1,117,993 | 1,103,077 | |||||||||||||||||||||||||
| Accum other comprehensive loss, net of tax | (21,573 | ) | (45,394 | ) | (28,580 | ) | (41,193 | ) | (29,652 | ) | ||||||||||||||||||||
| Total shareholders' equity | 1,508,256 | 1,473,057 | 1,476,756 | 1,450,409 | 1,446,084 | |||||||||||||||||||||||||
| Total liabilities and equity | $ | 12,775,196 | $ | 12,678,896 | $ | 12,390,276 | $ | 12,182,448 | $ | 12,179,164 | ||||||||||||||||||||
|
See Notes to Consolidated Financials |
||||||||||||||||||||||||||||||
| TRUSTMARK CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||||||||||||
| March 31, 2016 | |||||||||||||||||||||||||||||
| ($ in thousands except per share data) | |||||||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||||||
| Quarter Ended | |||||||||||||||||||||||||||||
|
INCOME STATEMENTS |
3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | ||||||||||||||||||||||||
| Interest and fees on LHFS & LHFI-FTE | $ | 76,235 | $ | 74,383 | $ | 72,951 | $ | 71,546 | $ | 69,658 | |||||||||||||||||||
| Interest and fees on acquired loans | 7,022 | 11,910 | 11,607 | 12,557 | 15,078 | ||||||||||||||||||||||||
| Interest on securities-taxable | 20,086 | 21,149 | 20,264 | 19,731 | 19,586 | ||||||||||||||||||||||||
| Interest on securities-tax exempt-FTE | 1,497 | 1,565 | 1,609 | 1,688 | 1,789 | ||||||||||||||||||||||||
| Interest on fed funds sold and rev repos | 1 | 4 | 2 | 2 | — | ||||||||||||||||||||||||
| Other interest income | 230 | 402 | 392 | 392 | 393 | ||||||||||||||||||||||||
| Total interest income-FTE | 105,071 | 109,413 | 106,825 | 105,916 | 106,504 | ||||||||||||||||||||||||
| Interest on deposits | 3,038 | 3,000 | 3,147 | 3,204 | 3,247 | ||||||||||||||||||||||||
| Interest on fed funds pch and repos | 431 | 274 | 205 | 179 | 143 | ||||||||||||||||||||||||
| Other interest expense | 2,389 | 1,987 | 1,811 | 1,614 | 1,649 | ||||||||||||||||||||||||
| Total interest expense | 5,858 | 5,261 | 5,163 | 4,997 | 5,039 | ||||||||||||||||||||||||
| Net interest income-FTE | 99,213 | 104,152 | 101,662 | 100,919 | 101,465 | ||||||||||||||||||||||||
| Provision for loan losses, LHFI | 2,243 | 3,043 | 2,514 | 1,033 | 1,785 | ||||||||||||||||||||||||
| Provision for loan losses, acquired loans | 1,309 | 997 | 1,256 | 825 | 347 | ||||||||||||||||||||||||
| Net interest income after provision-FTE | 95,661 | 100,112 | 97,892 | 99,061 | 99,333 | ||||||||||||||||||||||||
| Service charges on deposit accounts | 11,081 | 11,961 | 12,400 | 11,920 | 11,085 | ||||||||||||||||||||||||
| Insurance commissions | 8,593 | 8,501 | 9,906 | 9,401 | 8,616 | ||||||||||||||||||||||||
| Wealth management | 7,407 | 7,831 | 7,790 | 7,758 | 7,990 | ||||||||||||||||||||||||
| Bank card and other fees | 6,918 | 7,156 | 6,964 | 7,416 | 6,762 | ||||||||||||||||||||||||
| Mortgage banking, net | 8,699 | 4,287 | 7,443 | 9,481 | 8,965 | ||||||||||||||||||||||||
| Other, net | 888 | (466 | ) | 1,470 | (433 | ) | (1,055 | ) | |||||||||||||||||||||
| Nonint inc-excl sec gains (losses), net | 43,586 | 39,270 | 45,973 | 45,543 | 42,363 | ||||||||||||||||||||||||
| Security gains (losses), net | (310 | ) | — | — | — | — | |||||||||||||||||||||||
| Total noninterest income | 43,276 | 39,270 | 45,973 | 45,543 | 42,363 | ||||||||||||||||||||||||
| Salaries and employee benefits | 57,201 | 57,366 | 58,270 | 57,393 | 57,169 | ||||||||||||||||||||||||
| Services and fees | 14,475 | 13,717 | 14,691 | 15,005 | 14,121 | ||||||||||||||||||||||||
| Net occupancy-premises | 6,188 | 6,304 | 6,580 | 6,243 | 6,191 | ||||||||||||||||||||||||
| Equipment expense | 6,094 | 6,105 | 5,877 | 5,903 | 5,974 | ||||||||||||||||||||||||
| FDIC assessment expense | 2,811 | 2,614 | 2,559 | 2,615 | 2,940 | ||||||||||||||||||||||||
| ORE/Foreclosure expense | 181 | (518 | ) | 3,385 | 921 | 1,115 | |||||||||||||||||||||||
| Other expense | 11,994 | 13,032 | 12,198 | 12,186 | 11,706 | ||||||||||||||||||||||||
| Total noninterest expense | 98,944 | 98,620 | 103,560 | 100,266 | 99,216 | ||||||||||||||||||||||||
| Income before income taxes and tax eq adj | 39,993 | 40,762 | 40,305 | 44,338 | 42,480 | ||||||||||||||||||||||||
| Tax equivalent adjustment | 4,473 | 4,334 | 4,056 | 3,970 | 4,073 | ||||||||||||||||||||||||
| Income before income taxes | 35,520 | 36,428 | 36,249 | 40,368 | 38,407 | ||||||||||||||||||||||||
| Income taxes | 8,517 | 8,570 | 7,819 | 9,766 | 9,259 | ||||||||||||||||||||||||
| Net income | $ | 27,003 | $ | 27,858 | $ | 28,430 | $ | 30,602 | $ | 29,148 | |||||||||||||||||||
| Per share data | |||||||||||||||||||||||||||||
| Earnings per share - basic | $ | 0.40 | $ | 0.41 | $ | 0.42 | $ | 0.45 | $ | 0.43 | |||||||||||||||||||
| Earnings per share - diluted | $ | 0.40 | $ | 0.41 | $ | 0.42 | $ | 0.45 | $ | 0.43 | |||||||||||||||||||
| Dividends per share | $ | 0.23 | $ | 0.23 | $ | 0.23 | $ | 0.23 | $ | 0.23 | |||||||||||||||||||
| Weighted average shares outstanding | |||||||||||||||||||||||||||||
| Basic | 67,609,662 | 67,557,991 | 67,557,395 | 67,556,825 | 67,525,791 | ||||||||||||||||||||||||
| Diluted | 67,746,592 | 67,734,109 | 67,707,456 | 67,685,449 | 67,639,326 | ||||||||||||||||||||||||
| Period end shares outstanding | 67,639,832 | 67,559,128 | 67,557,395 | 67,557,395 | 67,556,591 | ||||||||||||||||||||||||
|
See Notes to Consolidated Financials |
|||||||||||||||||||||||||||||
| TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||||||||||||||||
| March 31, 2016 | ||||||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||||||||||||
|
NONPERFORMING ASSETS (1) |
3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | |||||||||||||||||||||||||
| Nonaccrual loans | ||||||||||||||||||||||||||||||
| Alabama | $ | 1,788 | $ | 1,776 | $ | 1,306 | $ | 713 | $ | 902 | ||||||||||||||||||||
| Florida | 4,952 | 5,180 | 7,444 | 7,892 | 8,179 | |||||||||||||||||||||||||
| Mississippi (2) | 56,590 | 40,754 | 44,955 | 52,051 | 52,145 | |||||||||||||||||||||||||
| Tennessee (3) | 5,849 | 5,106 | 4,911 | 5,468 | 4,197 | |||||||||||||||||||||||||
| Texas | 1,515 | 2,496 | 2,515 | 2,314 | 11,585 | |||||||||||||||||||||||||
| Total nonaccrual loans | 70,694 | 55,312 | 61,131 | 68,438 | 77,008 | |||||||||||||||||||||||||
| Other real estate | ||||||||||||||||||||||||||||||
| Alabama | 19,137 | 21,578 | 23,822 | 21,849 | 21,795 | |||||||||||||||||||||||||
| Florida | 27,907 | 29,579 | 30,374 | 31,059 | 34,746 | |||||||||||||||||||||||||
| Mississippi (2) | 14,511 | 14,312 | 13,180 | 14,094 | 15,143 | |||||||||||||||||||||||||
| Tennessee (3) | 8,699 | 9,974 | 9,840 | 9,707 | 10,072 | |||||||||||||||||||||||||
| Texas | 1,552 | 1,734 | 6,739 | 14,039 | 8,419 | |||||||||||||||||||||||||
| Total other real estate | 71,806 | 77,177 | 83,955 | 90,748 | 90,175 | |||||||||||||||||||||||||
| Total nonperforming assets | $ | 142,500 | $ | 132,489 | $ | 145,086 | $ | 159,186 | $ | 167,183 | ||||||||||||||||||||
|
LOANS PAST DUE OVER 90 DAYS (4) |
||||||||||||||||||||||||||||||
| LHFI | $ | 611 | $ | 2,300 | $ | 9,224 | $ | 1,771 | $ | 1,413 | ||||||||||||||||||||
| LHFS-Guaranteed GNMA serviced loans | ||||||||||||||||||||||||||||||
| (no obligation to repurchase) | $ | 24,110 | $ | 21,812 | $ | 15,165 | $ | 11,987 | $ | 7,584 | ||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||||||||||||
|
ALLOWANCE FOR LOAN LOSSES (4) |
3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | |||||||||||||||||||||||||
| Beginning Balance | $ | 67,619 | $ | 65,607 | $ | 71,166 | $ | 71,321 | $ | 69,616 | ||||||||||||||||||||
| Provision for loan losses | 2,243 | 3,043 | 2,514 | 1,033 | 1,785 | |||||||||||||||||||||||||
| Charge-offs | (3,363 | ) | (3,781 | ) | (11,406 | ) | (4,278 | ) | (3,004 | ) | ||||||||||||||||||||
| Recoveries | 3,169 | 2,750 | 3,333 | 3,090 | 2,924 | |||||||||||||||||||||||||
| Net (charge-offs) recoveries | (194 | ) | (1,031 | ) | (8,073 | ) | (1,188 | ) | (80 | ) | ||||||||||||||||||||
| Ending Balance | $ | 69,668 | $ | 67,619 | $ | 65,607 | $ | 71,166 | $ | 71,321 | ||||||||||||||||||||
|
PROVISION FOR LOAN LOSSES (4) |
||||||||||||||||||||||||||||||
| Alabama | $ | 540 | $ | 1,453 | $ | (70 | ) | $ | 623 | $ | 761 | |||||||||||||||||||
| Florida | (818 | ) | (1,357 | ) | (1,430 | ) | (1,168 | ) | 1,833 | |||||||||||||||||||||
| Mississippi (2) | 1,848 | 1,842 | 4,221 | 2,046 | (2,729 | ) | ||||||||||||||||||||||||
| Tennessee (3) | 138 | 182 | (1,050 | ) | (483 | ) | 1,432 | |||||||||||||||||||||||
| Texas | 535 | 923 | 843 | 15 | 488 | |||||||||||||||||||||||||
| Total provision for loan losses | $ | 2,243 | $ | 3,043 | $ | 2,514 | $ | 1,033 | $ | 1,785 | ||||||||||||||||||||
|
NET CHARGE-OFFS (4) |
||||||||||||||||||||||||||||||
| Alabama | $ | 63 | $ | 422 | $ | 163 | $ | 216 | $ | 144 | ||||||||||||||||||||
| Florida | (674 | ) | (389 | ) | (1,090 | ) | 539 | (28 | ) | |||||||||||||||||||||
| Mississippi (2) | (74 | ) | 925 | 7,391 | 1,028 | 143 | ||||||||||||||||||||||||
| Tennessee (3) | 8 | 188 | 448 | 105 | (216 | ) | ||||||||||||||||||||||||
| Texas | 871 | (115 | ) | 1,161 | (700 | ) | 37 | |||||||||||||||||||||||
| Total net charge-offs (recoveries) | $ | 194 | $ | 1,031 | $ | 8,073 | $ | 1,188 | $ | 80 | ||||||||||||||||||||
| (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 | ||||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||||||||
| March 31, 2016 | ||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||||
|
FINANCIAL RATIOS AND OTHER DATA |
3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | |||||||||||||||||
| Return on equity | 7.27% | 7.46% | 7.68% | 8.44% | 8.23% | |||||||||||||||||
| Return on average tangible equity | 10.26% | 10.61% | 10.96% | 12.05% | 11.86% | |||||||||||||||||
| Return on assets | 0.85% | 0.88% | 0.92% | 1.01% | 0.97% | |||||||||||||||||
| Interest margin - Yield - FTE | 3.74% | 3.92% | 3.91% | 3.99% | 4.07% | |||||||||||||||||
| Interest margin - Cost | 0.21% | 0.19% | 0.19% | 0.19% | 0.19% | |||||||||||||||||
| Net interest margin - FTE | 3.54% | 3.74% | 3.72% | 3.81% | 3.88% | |||||||||||||||||
| Efficiency ratio (1) | 66.87% | 66.03% | 67.87% | 66.00% | 66.46% | |||||||||||||||||
| Full-time equivalent employees | 2,946 | 2,941 | 2,963 | 2,989 | 3,038 | |||||||||||||||||
|
CREDIT QUALITY RATIOS (2) |
||||||||||||||||||||||
| Net charge-offs/average loans | 0.01% | 0.06% | 0.47% | 0.07% | 0.00% | |||||||||||||||||
| Provision for loan losses/average loans | 0.12% | 0.17% | 0.15% | 0.06% | 0.11% | |||||||||||||||||
| Nonperforming loans/total loans (incl LHFS) | 0.95% | 0.76% | 0.88% | 1.04% | 1.17% | |||||||||||||||||
| Nonperforming assets/total loans (incl LHFS) | 1.91% | 1.83% | 2.08% | 2.41% | 2.55% | |||||||||||||||||
| Nonperforming assets/total loans (incl LHFS) +ORE | 1.89% | 1.81% | 2.06% | 2.38% | 2.51% | |||||||||||||||||
| ALL/total loans (excl LHFS) | 0.96% | 0.95% | 0.97% | 1.10% | 1.11% | |||||||||||||||||
| ALL-commercial/total commercial loans | 1.06% | 1.05% | 1.07% | 1.30% | 1.30% | |||||||||||||||||
| ALL-consumer/total consumer and home mortgage loans | 0.65% | 0.66% | 0.67% | 0.59% | 0.61% | |||||||||||||||||
| ALL/nonperforming loans | 98.55% | 122.25% | 107.32% | 103.99% | 92.62% | |||||||||||||||||
| ALL/nonperforming loans (excl specifically reviewed impaired loans) | 203.24% | 210.32% | 206.72% | 192.60% | 205.52% | |||||||||||||||||
|
CAPITAL RATIOS |
||||||||||||||||||||||
| Total equity/total assets | 11.81% | 11.62% | 11.92% | 11.91% | 11.87% | |||||||||||||||||
| Tangible equity/tangible assets | 9.01% | 8.79% | 9.01% | 8.93% | 8.91% | |||||||||||||||||
| Tangible equity/risk-weighted assets | 11.84% | 11.68% | 12.24% | 12.34% | 12.34% | |||||||||||||||||
| Tier 1 leverage ratio | 9.93% | 10.03% | 10.09% | 10.14% | 9.99% | |||||||||||||||||
| Common equity tier 1 capital ratio | 12.41% | 12.57% | 13.00% | 13.28% | 13.14% | |||||||||||||||||
| Tier 1 risk-based capital ratio | 13.04% | 13.21% | 13.66% | 13.97% | 13.83% | |||||||||||||||||
| Total risk-based capital ratio | 13.92% | 14.07% | 14.66% | 15.07% | 14.92% | |||||||||||||||||
|
STOCK PERFORMANCE |
||||||||||||||||||||||
| Market value-Close | $ 23.03 | $ 23.04 | $ 23.17 | $ 24.98 | $ 24.28 | |||||||||||||||||
| Book value | $ 22.30 | $ 21.80 | $ 21.86 | $ 21.47 | $ 21.41 | |||||||||||||||||
| Tangible book value | $ 16.50 | $ 15.98 | $ 16.00 | $ 15.58 | $ 15.53 | |||||||||||||||||
|
(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. |
||||||||||||||||||||||
|
|
||||||||||||||||||||||
| (2) - Excludes acquired loans and covered other real estate | ||||||||||||||||||||||
|
See Notes to Consolidated Financials |
||||||||||||||||||||||
|
TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS |
|||||||||||||||||||||||||
| Note 1 - Securities Available for Sale and Held to Maturity | |||||||||||||||||||||||||
|
The following table is a summary of the estimated fair value of securities available for sale and the amortized cost of securities held to maturity ($ in thousands): |
|||||||||||||||||||||||||
| 3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | |||||||||||||||||||||
|
SECURITIES AVAILABLE FOR SALE |
|||||||||||||||||||||||||
| U.S. Government agency obligations | |||||||||||||||||||||||||
| Issued by U.S. Government agencies | $ | 63,814 | $ | 68,135 | $ | 71,282 | $ | 74,409 | $ | 78,115 | |||||||||||||||
| Issued by U.S. Government sponsored agencies | 286 | 281 | 23,016 | 33,009 | 33,076 | ||||||||||||||||||||
| Obligations of states and political subdivisions | 135,655 | 138,609 | 147,794 | 151,322 | 160,154 | ||||||||||||||||||||
| Mortgage-backed securities | |||||||||||||||||||||||||
| Residential mortgage pass-through securities | |||||||||||||||||||||||||
| Guaranteed by GNMA | 25,081 | 25,812 | 26,651 | 20,651 | 12,010 | ||||||||||||||||||||
| Issued by FNMA and FHLMC | 330,558 | 225,542 | 177,411 | 185,651 | 195,470 | ||||||||||||||||||||
| Other residential mortgage-backed securities | |||||||||||||||||||||||||
| Issued or guaranteed by FNMA, FHLMC, or GNMA | 1,540,541 | 1,582,860 | 1,630,402 | 1,662,476 | 1,646,710 | ||||||||||||||||||||
| Commercial mortgage-backed securities | |||||||||||||||||||||||||
| Issued or guaranteed by FNMA, FHLMC, or GNMA | 272,185 | 279,226 | 279,609 | 290,398 | 225,826 | ||||||||||||||||||||
| Asset-backed securities and structured financial products | — | 24,957 | 26,657 | 28,467 | 30,098 | ||||||||||||||||||||
| Total securities available for sale | $ | 2,368,120 | $ | 2,345,422 | $ | 2,382,822 | $ | 2,446,383 | $ | 2,381,459 | |||||||||||||||
|
SECURITIES HELD TO MATURITY |
|||||||||||||||||||||||||
| U.S. Government agency obligations | |||||||||||||||||||||||||
| Issued by U.S. Government sponsored agencies | $ | 63,085 | $ | 101,782 | $ | 101,578 | $ | 101,374 | $ | 101,171 | |||||||||||||||
| Obligations of states and political subdivisions | 54,278 | 55,892 | 56,661 | 56,978 | 62,928 | ||||||||||||||||||||
| Mortgage-backed securities | |||||||||||||||||||||||||
| Residential mortgage pass-through securities | |||||||||||||||||||||||||
| Guaranteed by GNMA | 16,590 | 17,363 | 17,783 | 18,265 | 18,861 | ||||||||||||||||||||
| Issued by FNMA and FHLMC | 9,871 | 10,368 | 10,669 | 10,965 | 11,341 | ||||||||||||||||||||
| Other residential mortgage-backed securities | |||||||||||||||||||||||||
| Issued or guaranteed by FNMA, FHLMC, or GNMA | 818,201 | 820,012 | 808,763 | 838,989 | 842,827 | ||||||||||||||||||||
| Commercial mortgage-backed securities | |||||||||||||||||||||||||
| Issued or guaranteed by FNMA, FHLMC, or GNMA | 206,178 | 182,401 | 182,986 | 163,590 | 147,426 | ||||||||||||||||||||
| Total securities held to maturity | $ | 1,168,203 | $ | 1,187,818 | $ | 1,178,440 | $ | 1,190,161 | $ | 1,184,554 | |||||||||||||||
| During 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, 2016, the net unamortized, unrealized loss on the transferred securities included in accumulated other comprehensive (loss) income in the accompanying balance sheet totaled approximately $31.3 million ($19.3 million, net of tax). | |||||||||||||||||||||||||
| Management continues to focus on asset quality as one of the strategic goals of the securities portfolio, which is evidenced by the investment of approximately 95% of the portfolio in GSE-backed obligations and other Aaa rated securities as determined by Moody’s. None of the securities owned by Trustmark are collateralized by assets which are considered sub-prime. Furthermore, outside of stock ownership in the Federal Home Loan Bank of Dallas, Federal Home Loan Bank of Atlanta and Federal Reserve Bank, Trustmark does not hold any other equity investment in a GSE. | |||||||||||||||||||||||||
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
|||||||||||||||||||||||||
|
NOTES TO CONSOLIDATED FINANCIALS |
|||||||||||||||||||||||||
|
March 31, 2016 |
|||||||||||||||||||||||||
|
($ in thousands) |
|||||||||||||||||||||||||
|
(unaudited) |
|||||||||||||||||||||||||
| Note 2 – Loan Composition | |||||||||||||||||||||||||
|
LHFI BY TYPE (excluding acquired loans) |
3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | ||||||||||||||||||||
| Loans secured by real estate: | |||||||||||||||||||||||||
| Construction, land development and other land loans | $ | 697,500 | $ | 824,723 | $ | 785,472 | $ | 682,444 | $ | 691,657 | |||||||||||||||
| Secured by 1-4 family residential properties | 1,640,015 | 1,649,501 | 1,638,639 | 1,637,933 | 1,613,993 | ||||||||||||||||||||
| Secured by nonfarm, nonresidential properties | 1,893,240 | 1,736,476 | 1,604,453 | 1,567,035 | 1,516,895 | ||||||||||||||||||||
| Other real estate secured | 273,752 | 211,228 | 225,523 | 240,056 | 233,322 | ||||||||||||||||||||
| Commercial and industrial loans |
|
1,368,464 | 1,343,211 | 1,270,277 | 1,219,684 | 1,228,788 | |||||||||||||||||||
| Consumer loans | 164,544 | 169,135 | 169,509 | 165,215 | 161,535 | ||||||||||||||||||||
| State and other political subdivision loans | 787,049 | 734,615 | 677,539 | 574,265 | 614,330 | ||||||||||||||||||||
| Other loans | 443,458 | 422,496 | 420,231 | 360,441 | 353,356 | ||||||||||||||||||||
| LHFI | 7,268,022 | 7,091,385 | 6,791,643 | 6,447,073 | 6,413,876 | ||||||||||||||||||||
| Allowance for loan losses | (69,668 | ) | (67,619 | ) | (65,607 | ) | (71,166 | ) | (71,321 | ) | |||||||||||||||
| Net LHFI | $ | 7,198,354 | $ | 7,023,766 | $ | 6,726,036 | $ | 6,375,907 | $ | 6,342,555 | |||||||||||||||
|
ACQUIRED NONCOVERED LOANS BY TYPE |
3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | ||||||||||||||||||||
| Loans secured by real estate: | |||||||||||||||||||||||||
| Construction, land development and other land loans | $ | 41,097 | $ | 41,623 | $ | 45,299 | $ | 50,867 | $ | 51,363 | |||||||||||||||
| Secured by 1-4 family residential properties | 81,314 | 86,950 | 96,870 | 101,027 | 111,830 | ||||||||||||||||||||
| Secured by nonfarm, nonresidential properties | 126,177 | 135,626 | 146,614 | 168,698 | 177,210 | ||||||||||||||||||||
| Other real estate secured | 24,374 | 23,860 | 23,816 | 25,666 | 26,819 | ||||||||||||||||||||
| Commercial and industrial loans | 51,663 | 55,075 | 57,748 | 73,732 | 81,261 | ||||||||||||||||||||
| Consumer loans | 5,027 | 5,641 | 6,295 | 7,273 | 8,494 | ||||||||||||||||||||
| Other loans | 20,129 | 23,936 | 23,886 | 19,897 | 21,195 | ||||||||||||||||||||
| Noncovered loans | 349,781 | 372,711 | 400,528 | 447,160 | 478,172 | ||||||||||||||||||||
| Allowance for loan losses | (13,212 | ) | (11,259 | ) | (11,417 | ) | (11,927 | ) | (11,106 | ) | |||||||||||||||
| Net noncovered loans | $ | 336,569 | $ | 361,452 | $ | 389,111 | $ | 435,233 | $ | 467,066 | |||||||||||||||
|
ACQUIRED COVERED LOANS BY TYPE |
3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | |||||||||||||||||||||
| Loans secured by real estate: | ||||||||||||||||||||||||||
| Construction, land development and other land loans | $ | 387 | $ | 1,021 | $ | 966 | $ | 904 | $ | 1,447 | ||||||||||||||||
| Secured by 1-4 family residential properties | 8,564 | 10,058 | 10,546 | 11,080 | 11,200 | |||||||||||||||||||||
| Secured by nonfarm, nonresidential properties | 3,679 | 4,638 | 5,363 | 5,206 | 5,844 | |||||||||||||||||||||
| Other real estate secured | 1,132 | 1,286 | 1,511 | 1,622 | 1,469 | |||||||||||||||||||||
| Commercial and industrial loans | 1,143 | 624 | 205 | 371 | 255 | |||||||||||||||||||||
| Consumer loans | — | — | — | — | — | |||||||||||||||||||||
| Other loans | 69 | 73 | 54 | 56 | 56 | |||||||||||||||||||||
| Covered loans | 14,974 | 17,700 | 18,645 | 19,239 | 20,271 | |||||||||||||||||||||
| Allowance for loan losses | (323 | ) | (733 | ) | (768 | ) | (702 | ) | (731 | ) | ||||||||||||||||
| Net covered loans | $ | 14,651 | $ | 16,967 | $ | 17,877 | $ | 18,537 | $ | 19,540 | ||||||||||||||||
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
||||||||||||||||||||||||||
|
NOTES TO CONSOLIDATED FINANCIALS |
||||||||||||||||||||||||||
|
March 31, 2016 |
||||||||||||||||||||||||||
|
($ in thousands) |
||||||||||||||||||||||||||
|
(unaudited) |
||||||||||||||||||||||||||
|
Note 2 – Loan Composition (continued) |
||||||||||||||||||||||||||
| March 31, 2016 | ||||||||||||||||||||||||||
|
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 | $ | 697,500 | $ | 129,438 | $ | 54,964 | $ | 261,624 | $ | 46,911 | $ | 204,563 | ||||||||||||||
| Secured by 1-4 family residential properties | 1,640,015 | 63,369 | 47,203 | 1,402,893 | 107,172 | 19,378 | ||||||||||||||||||||
| Secured by nonfarm, nonresidential properties | 1,893,240 | 244,495 | 165,995 | 894,692 | 140,428 | 447,630 | ||||||||||||||||||||
| Other real estate secured | 273,752 | 18,950 | 4,747 | 118,279 | 18,020 | 113,756 | ||||||||||||||||||||
| Commercial and industrial loans | 1,368,464 | 105,124 | 15,728 | 711,295 | 234,252 | 302,065 | ||||||||||||||||||||
| Consumer loans | 164,544 | 18,091 | 3,022 | 122,986 | 18,037 | 2,408 | ||||||||||||||||||||
| State and other political subdivision loans | 787,049 | 63,359 | 30,536 | 514,537 | 31,518 | 147,099 | ||||||||||||||||||||
| Other loans | 443,458 | 41,199 | 19,472 | 289,902 | 50,854 | 42,031 | ||||||||||||||||||||
| Loans | $ | 7,268,022 | $ | 684,025 | $ | 341,667 | $ | 4,316,208 | $ | 647,192 | $ | 1,278,930 | ||||||||||||||
|
CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION (1) |
||||||||||||||||||||||||||
| Lots | $ | 50,492 | $ | 7,175 | $ | 19,716 | $ | 16,846 | $ | 3,560 | $ | 3,195 | ||||||||||||||
| Development | 57,654 | 7,426 | 4,219 | 27,354 | 710 | 17,945 | ||||||||||||||||||||
| Unimproved land | 113,169 | 13,992 | 17,981 | 43,638 | 18,168 | 19,390 | ||||||||||||||||||||
| 1-4 family construction | 165,572 | 35,012 | 10,110 | 76,428 | 1,675 | 42,347 | ||||||||||||||||||||
| Other construction | 310,613 | 65,833 | 2,938 | 97,358 | 22,798 | 121,686 | ||||||||||||||||||||
| Construction, land development and other land loans | $ | 697,500 | $ | 129,438 | $ | 54,964 | $ | 261,624 | $ | 46,911 | $ | 204,563 | ||||||||||||||
|
LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION (1) |
||||||||||||||||||||||||||
| Income producing: | ||||||||||||||||||||||||||
| Retail | $ | 257,281 | $ | 62,525 | $ | 37,083 | $ | 92,383 | $ | 20,393 | $ | 44,897 | ||||||||||||||
| Office | 221,311 | 31,304 | 31,521 | 80,383 | 5,731 | 72,372 | ||||||||||||||||||||
| Nursing homes/assisted living | 118,023 | — | — | 112,650 | 5,373 | — | ||||||||||||||||||||
| Hotel/motel | 184,898 | 38,031 | 21,924 | 45,023 | 32,265 | 47,655 | ||||||||||||||||||||
| Industrial | 85,605 | 17,467 | 9,487 | 16,493 | 1,455 | 40,703 | ||||||||||||||||||||
| Health care | 26,830 | 2,241 | 862 | 23,727 | — | — | ||||||||||||||||||||
| Convenience stores | 16,585 | 230 | — | 10,268 | 1,091 | 4,996 | ||||||||||||||||||||
| Other | 199,259 | 12,030 | 16,920 | 89,495 | 3,737 | 77,077 | ||||||||||||||||||||
| Total income producing loans | 1,109,792 | 163,828 | 117,797 | 470,422 | 70,045 | 287,700 | ||||||||||||||||||||
| Owner-occupied: | ||||||||||||||||||||||||||
| Office | 123,870 | 9,295 | 20,577 | 64,859 | 8,631 | 20,508 | ||||||||||||||||||||
| Churches | 90,616 | 9,043 | 2,194 | 45,480 | 25,045 | 8,854 | ||||||||||||||||||||
| Industrial warehouses | 135,811 | 5,723 | 4,050 | 67,766 | 10,756 | 47,516 | ||||||||||||||||||||
| Health care | 121,515 | 19,478 | 8,602 | 61,609 | 11,693 | 20,133 | ||||||||||||||||||||
| Convenience stores | 81,707 | 7,778 | 1,752 | 46,559 | 2,647 | 22,971 | ||||||||||||||||||||
| Retail | 42,068 | 8,415 | 5,698 | 20,071 | 2,098 | 5,786 | ||||||||||||||||||||
| Restaurants | 32,753 | 2,645 | 1,722 | 22,542 | 3,636 | 2,208 | ||||||||||||||||||||
| Auto dealerships | 14,042 | 8,068 | 93 | 4,682 | 1,199 | — | ||||||||||||||||||||
| Other | 141,066 | 10,222 | 3,510 | 90,702 | 4,678 | 31,954 | ||||||||||||||||||||
| Total owner-occupied loans | 783,448 | 80,667 | 48,198 | 424,270 | 70,383 | 159,930 | ||||||||||||||||||||
| Loans secured by nonfarm, nonresidential properties | $ | 1,893,240 | $ | 244,495 | $ | 165,995 | $ | 894,692 | $ | 140,428 | $ | 447,630 | ||||||||||||||
|
(1) Excludes acquired loans. |
||||||||||||||||||||||||||
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
|||||||||||||||
|
NOTES TO CONSOLIDATED FINANCIALS |
|||||||||||||||
|
March 31, 2016 |
|||||||||||||||
|
($ in thousands) |
|||||||||||||||
|
(unaudited) |
|||||||||||||||
|
Note 3 – Yields on Earning Assets and Interest-Bearing Liabilities |
|||||||||||||||
|
The following table illustrates the yields on earning assets by category as well as the rates paid on interest-bearing liabilities on a tax equivalent basis: |
|||||||||||||||
| Quarter Ended | |||||||||||||||
| 3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | |||||||||||
| Securities – taxable | 2.41% | 2.50% | 2.35% | 2.33% | 2.40% | ||||||||||
| Securities – nontaxable | 4.25% | 4.25% | 4.18% | 4.27% | 4.29% | ||||||||||
| Securities – total | 2.48% | 2.57% | 2.43% | 2.42% | 2.49% | ||||||||||
| Loans - LHFI & LHFS | 4.17% | 4.16% | 4.27% | 4.38% | 4.31% | ||||||||||
| Acquired loans | 7.46% | 11.74% | 10.46% | 10.43% | 11.62% | ||||||||||
| Loans - total | 4.33% | 4.57% | 4.65% | 4.79% | 4.85% | ||||||||||
| FF sold & rev repo | 1.05% | 1.15% | 0.68% | 1.44% | 0.00% | ||||||||||
| Other earning assets | 1.39% | 2.34% | 2.66% | 3.81% | 3.44% | ||||||||||
| Total earning assets | 3.74% | 3.92% | 3.91% | 3.99% | 4.07% | ||||||||||
| Interest-bearing deposits | 0.18% | 0.18% | 0.18% | 0.18% | 0.19% | ||||||||||
| FF pch & repo | 0.34% | 0.19% | 0.15% | 0.14% | 0.14% | ||||||||||
| Other borrowings | 0.94% | 0.88% | 1.11% | 2.68% | 1.81% | ||||||||||
| Total interest-bearing liabilities | 0.28% | 0.26% | 0.26% | 0.26% | 0.26% | ||||||||||
| Net interest margin | 3.54% | 3.74% | 3.72% | 3.81% | 3.88% | ||||||||||
| Net interest margin excluding acquired loans | 3.40% | 3.43% | 3.43% | 3.49% | 3.47% | ||||||||||
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 decreased 20 basis points during the first quarter of 2016. This decrease was primarily due to a decline in recoveries on acquired loans from $5.4 million during the fourth quarter of 2015 to $1.2 million during the first quarter of 2016.
The net interest margin included $389 thousand of yield maintenance payments on prepaid securities during the first quarter of 2016 compared to $902 thousand during the fourth quarter of 2015. Excluding these yield maintenance payments on prepaid securities and acquired loans, the net interest margin totaled 3.38% during the first quarter of 2016 compared to 3.40% during the fourth quarter of 2015.
Note 4 – Mortgage Banking
Trustmark utilizes a portfolio of exchange-traded derivative instruments, such as Treasury note futures contracts and option contracts, to achieve a fair value return that offsets the changes in fair value of mortgage servicing rights (MSR) attributable to interest rates. These transactions are considered freestanding derivatives that do not otherwise qualify for hedge accounting under generally accepted accounting principles (GAAP). Changes in the fair value of these exchange-traded derivative instruments, including administrative costs, are recorded in noninterest income in mortgage banking, net and are offset by the changes in the fair value of the MSR. The MSR fair value represents the present value of future cash flows, which among other things includes decay and the effect of changes in interest rates. Ineffectiveness of hedging the MSR fair value is measured by comparing the change in value of hedge instruments to the change in the fair value of the MSR asset attributable to changes in interest rates and other market driven changes in valuation inputs and assumptions. The impact of this strategy resulted in a net positive ineffectiveness of $413 thousand and $1.3 million for the quarters ended March 31, 2016 and 2015, respectively.
The following table illustrates the components of mortgage banking revenues included in noninterest income in the accompanying income statements:
| Quarter Ended | |||||||||||||||||||||||||
| 3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | |||||||||||||||||||||
| Mortgage servicing income, net | $ | 5,058 | $ | 5,126 | $ | 4,906 | $ | 4,696 | $ | 4,897 | |||||||||||||||
| Change in fair value-MSR from runoff | (2,005 | ) | (2,091 | ) | (2,636 | ) | (2,587 | ) | (2,213 | ) | |||||||||||||||
| Gain on sales of loans, net | 2,591 | 4,656 | 4,479 | 5,114 | 3,716 | ||||||||||||||||||||
| Other, net | 2,642 | (1,433 | ) | 215 | 206 | 1,245 | |||||||||||||||||||
| Mortgage banking income before hedge ineffectiveness | 8,286 | 6,258 | 6,964 | 7,429 | 7,645 | ||||||||||||||||||||
| Change in fair value-MSR from market changes | (6,866 | ) | 2,010 | (4,141 | ) | 6,076 | (2,368 | ) | |||||||||||||||||
| Change in fair value of derivatives | 7,279 | (3,981 | ) | 4,620 | (4,024 | ) | 3,688 | ||||||||||||||||||
| Net positive (negative) hedge ineffectiveness | 413 | (1,971 | ) | 479 | 2,052 | 1,320 | |||||||||||||||||||
| Mortgage banking, net | $ | 8,699 | $ | 4,287 | $ | 7,443 | $ | 9,481 | $ | 8,965 | |||||||||||||||
During the first quarter of 2015, Trustmark exercised its option to repurchase approximately $28.5 million of 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 subject to guarantees by FHA/VA. As a result of this repurchase and sale, the loans are no longer carried as LHFS. The transaction resulted in a gain of $304 thousand, which was recorded during the first quarter of 2015 and is included in the table above as "Gain on sales of loans, net.”
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
|||||||||||||||||||||||||
|
NOTES TO CONSOLIDATED FINANCIALS |
|||||||||||||||||||||||||
|
March 31, 2016 |
|||||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||||
|
(unaudited) |
|||||||||||||||||||||||||
| Note 5 – Other Noninterest Income and Expense | |||||||||||||||||||||||||
|
Other noninterest income consisted of the following for the periods presented ($ in thousands): |
|||||||||||||||||||||||||
| Quarter Ended | |||||||||||||||||||||||||
| 3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | |||||||||||||||||||||
| Partnership amortization for tax credit purposes | $ | (2,479 | ) | $ | (3,015 | ) | $ | (2,083 | ) | $ | (2,480 | ) | $ | (2,472 | ) | ||||||||||
| (Decrease) increase in FDIC indemnification asset | (99 | ) | (827 | ) | 82 | (1,798 | ) | (970 | ) | ||||||||||||||||
| Increase in life insurance cash surrender value | 1,692 | 1,667 | 1,687 | 1,673 | 1,675 | ||||||||||||||||||||
| Other miscellaneous income | 1,774 | 1,709 | 1,784 | 2,172 | 712 | ||||||||||||||||||||
| Total other, net | $ | 888 | $ | (466 | ) | $ | 1,470 | $ | (433 | ) | $ | (1,055 | ) | ||||||||||||
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 ($ in thousands):
| Quarter Ended | ||||||||||||||||||||||||||
| 3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | ||||||||||||||||||||||
| Loan expense | $ | 3,043 | $ | 3,356 | $ | 3,416 | $ | 3,342 | $ | 2,721 | ||||||||||||||||
| Amortization of intangibles | 1,796 | 1,927 | 1,942 | 1,959 | 1,991 | |||||||||||||||||||||
| Other miscellaneous expense | 7,155 | 7,749 | 6,840 | 6,885 | 6,994 | |||||||||||||||||||||
| Total other expense | $ | 11,994 | $ | 13,032 | $ | 12,198 | $ | 12,186 | $ | 11,706 | ||||||||||||||||
Note 6 – Non-GAAP Financial Measures
In addition to capital ratios defined by GAAP and banking regulators, Trustmark utilizes various tangible common equity measures when evaluating capital utilization and adequacy. Tangible common equity, as defined by Trustmark, represents common equity less goodwill and identifiable intangible assets.
Trustmark 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, 2016 |
||||||||||||||||||||||||||||||||
|
($ in thousands) |
||||||||||||||||||||||||||||||||
|
(unaudited) |
||||||||||||||||||||||||||||||||
| Note 6 – Non-GAAP Financial Measures (continued) | ||||||||||||||||||||||||||||||||
| Quarter Ended | ||||||||||||||||||||||||||||||||
| 3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | ||||||||||||||||||||||||||||
|
TANGIBLE EQUITY |
||||||||||||||||||||||||||||||||
| AVERAGE BALANCES | ||||||||||||||||||||||||||||||||
| Total shareholders' equity | $ | 1,494,684 | $ | 1,481,294 | $ | 1,469,255 | $ | 1,454,501 | $ | 1,436,969 | ||||||||||||||||||||||
| Less: Goodwill | (366,156 | ) | (365,945 | ) | (365,500 | ) | (365,500 | ) | (365,500 | ) | ||||||||||||||||||||||
| Identifiable intangible assets | (26,709 | ) | (28,851 | ) | (31,144 | ) | (30,385 | ) | (32,398 | ) | ||||||||||||||||||||||
| Total average tangible equity | $ | 1,101,819 | $ | 1,086,498 | $ | 1,072,611 | $ | 1,058,616 | $ | 1,039,071 | ||||||||||||||||||||||
| PERIOD END BALANCES | ||||||||||||||||||||||||||||||||
| Total shareholders' equity | $ | 1,508,256 | $ | 1,473,057 | $ | 1,476,756 | $ | 1,450,409 | $ | 1,446,084 | ||||||||||||||||||||||
| Less: Goodwill | (366,156 | ) | (366,156 | ) | (365,500 | ) | (365,500 | ) | (365,500 | ) | ||||||||||||||||||||||
| Identifiable intangible assets | (25,751 | ) | (27,546 | ) | (30,129 | ) | (32,042 | ) | (31,250 | ) | ||||||||||||||||||||||
| Total tangible equity | (a) | $ | 1,116,349 | $ | 1,079,355 | $ | 1,081,127 | $ | 1,052,867 | $ | 1,049,334 | |||||||||||||||||||||
|
TANGIBLE ASSETS |
||||||||||||||||||||||||||||||||
| Total assets | $ | 12,775,196 | $ | 12,678,896 | $ | 12,390,276 | $ | 12,182,448 | $ | 12,179,164 | ||||||||||||||||||||||
| Less: Goodwill | (366,156 | ) | (366,156 | ) | (365,500 | ) | (365,500 | ) | (365,500 | ) | ||||||||||||||||||||||
| Identifiable intangible assets | (25,751 | ) | (27,546 | ) | (30,129 | ) | (32,042 | ) | (31,250 | ) | ||||||||||||||||||||||
| Total tangible assets | (b) | $ | 12,383,289 | $ | 12,285,194 | $ | 11,994,647 | $ | 11,784,906 | $ | 11,782,414 | |||||||||||||||||||||
| Risk-weighted assets | (c) | $ | 9,431,021 | $ | 9,242,902 | $ | 8,831,355 | $ | 8,530,144 | $ | 8,503,102 | |||||||||||||||||||||
|
NET INCOME ADJUSTED FOR INTANGIBLE AMORTIZATION |
||||||||||||||||||||||||||||||||
| Net income | $ | 27,003 | $ | 27,858 | $ | 28,430 | $ | 30,602 | $ | 29,148 | ||||||||||||||||||||||
| Plus: Intangible amortization net of tax | 1,109 | 1,191 | 1,199 | 1,210 | 1,229 | |||||||||||||||||||||||||||
| Net income adjusted for intangible amortization | $ | 28,112 | $ | 29,049 | $ | 29,629 | $ | 31,812 | $ | 30,377 | ||||||||||||||||||||||
| Period end common shares outstanding | (d) | 67,639,832 | 67,559,128 | 67,557,395 | 67,557,395 | 67,556,591 | ||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
|
TANGIBLE COMMON EQUITY MEASUREMENTS |
||||||||||||||||||||||||||||||||
| Return on average tangible equity (1) | 10.26 | % | 10.61 | % | 10.96 | % | 12.05 | % | 11.86 | % | ||||||||||||||||||||||
| Tangible equity/tangible assets | (a)/(b) | 9.01 | % | 8.79 | % | 9.01 | % | 8.93 | % | 8.91 | % | |||||||||||||||||||||
| Tangible equity/risk-weighted assets | (a)/(c) | 11.84 | % | 11.68 | % | 12.24 | % | 12.34 | % | 12.34 | % | |||||||||||||||||||||
| Tangible book value | (a)/(d)*1,000 | $ | 16.50 | $ | 15.98 | $ | 16.00 | $ | 15.58 | $ | 15.53 | |||||||||||||||||||||
|
COMMON EQUITY TIER 1 CAPITAL (CET1) |
||||||||||||||||||||||||||||||||
| Total shareholders' equity | $ | 1,508,256 | $ | 1,473,057 | $ | 1,476,756 | $ | 1,450,409 | $ | 1,446,084 | ||||||||||||||||||||||
| AOCI-related adjustments | 21,573 | 45,394 | 28,580 | 41,193 | 29,652 | |||||||||||||||||||||||||||
| CET1 adjustments and deductions: | ||||||||||||||||||||||||||||||||
| Goodwill net of associated deferred tax liabilities (DTLs) | (348,515 | ) | (348,873 | ) | (348,587 | ) | (348,940 | ) | (349,292 | ) | ||||||||||||||||||||||
| Other adjustments and deductions for CET1 (2) | (10,861 | ) | (7,980 | ) | (8,888 | ) | (9,568 | ) | (9,104 | ) | ||||||||||||||||||||||
| CET1 capital | (e) | 1,170,453 | 1,161,598 | 1,147,861 | 1,133,094 | 1,117,340 | ||||||||||||||||||||||||||
| Additional tier 1 capital instruments plus related surplus | 60,000 | 60,000 | 60,000 | 60,000 | 60,000 | |||||||||||||||||||||||||||
| Less: additional tier 1 capital deductions | (434 | ) | (1,063 | ) | (1,287 | ) | (1,571 | ) | (1,762 | ) | ||||||||||||||||||||||
| Additional tier 1 capital | 59,566 | 58,937 | 58,713 | 58,429 | 58,238 | |||||||||||||||||||||||||||
| Tier 1 capital | $ | 1,230,019 | $ | 1,220,535 | $ | 1,206,574 | $ | 1,191,523 | $ | 1,175,578 | ||||||||||||||||||||||
| Common equity tier 1 capital ratio | (e)/(c) | 12.41 | % | 12.57 | % | 13.00 | % | 13.28 | % | 13.14 | % | |||||||||||||||||||||
| (1) Calculation = ((net income 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. | ||||||||||||||||||||||||||||||||
