Trustmark Corporation Announces Third Quarter 2019 Financial Results

Loan growth and disciplined expense management contribute to performance

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Trustmark Corporation Announces Third Quarter 2019 Financial Results

JACKSON, Miss.--()--Trustmark Corporation (NASDAQ:TRMK) reported net income of $41.0 million in the third quarter of 2019, representing diluted earnings per share of $0.64. Diluted earnings per share decreased 1.5% linked-quarter and increased 18.5% compared to the same quarter in the prior year. This level of earnings resulted in a return on average tangible equity of 13.31% and a return on average assets of 1.21%. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable December 15, 2019, to shareholders of record on December 1, 2019.

Printer friendly version of earnings release with consolidated financial statements and notes: https://www.businesswire.com/news/home/52115206/en

Third Quarter Highlights

  • Loans held for investment increased $106.9 million, or 1.2%, linked-quarter and $476.6 million, or 5.4%, from the prior year
  • The net interest margin (FTE), excluding acquired loans, was 3.61% in the third quarter, up 1 basis point from the prior quarter and 11 basis points year-over-year
  • Core noninterest expense, which excludes other real estate expense and intangible amortization, totaled $105.3 million, up 0.3% from the prior quarter and 2.5% year-over-year

Gerard R. Host, President and CEO, stated, “We are pleased to report solid financial results for the third quarter, reflecting Trustmark’s proven ability to successfully perform in the face of a challenging interest rate environment. Our third-quarter results were driven by continued loan growth and disciplined expense management. Trustmark also continued evaluating opportunities to better align delivery channels with customer preferences and deploy resources in higher growth markets. With a team of dedicated associates, a history of consistent performance, and a focus on our strategic initiatives, Trustmark is well positioned to continue meeting the needs of our customers and creating long-term value for shareholders.”

Balance Sheet Management

  • Loans held for investment grew for the sixth consecutive quarter
  • Continued balance sheet and capital optimization through maturing investment securities run-off and share repurchases
  • Noninterest-bearing deposits represented 27.2% of total deposits at September 30, 2019

Loans held for investment totaled $9.2 billion at September 30, 2019, reflecting an increase of 1.2% linked-quarter and 5.4% from the prior year. The growth was driven primarily by commercial real estate and construction and development loans. Acquired loans totaled $81.0 million at September 30, 2019, down $6.9 million from the prior quarter. Collectively, loans held for investment and acquired loans totaled $9.3 billion at the end of the third quarter of 2019, up $100.0 million, or 1.1%, from the prior quarter and $425.0 million, or 4.8%, year-over-year.

Deposits totaled $11.3 billion at September 30, 2019, down $312.4 million from the prior quarter and up $297.3 million year-over-year. The linked-quarter decline is primarily attributable to a seasonal decline in public funds. The deposit mix shifted favorably during the third quarter as noninterest-bearing deposits increased 5.3% linked-quarter and 10.0% year-over-year to total $3.1 billion, representing 27.2% of total deposits. Interest-bearing deposit costs totaled 0.96% in the third quarter, a decrease of 3 basis points linked-quarter. Trustmark continues to maintain an attractive, low-cost deposit base with approximately 57% of deposit balances in checking accounts.

Trustmark’s capital position remained solid, reflecting the consistent profitability of its diversified financial services businesses. During the third quarter, Trustmark repurchased $4.5 million, or approximately 139 thousand of its common shares in open market transactions. At September 30, 2019, Trustmark had $82.5 million in remaining authority under its existing stock repurchase program, which expires March 31, 2020. At September 30, 2019, Trustmark’s tangible equity to tangible assets ratio was 9.53%, while the total risk-based capital ratio was 13.15%.

Credit Quality

  • Allowance for loan losses represented 357.15% of nonperforming loans, excluding specifically reviewed impaired loans
  • Net charge-offs represented 0.01% of average loans in the third quarter

Nonperforming loans totaled $59.0 million at September 30, 2019, up $6.1 million from the prior quarter and down $8.8 million year-over-year. Other real estate totaled $32.0 million, up $731 thousand from the prior quarter and down $4.5 million from the same period one year earlier. Collectively, nonperforming assets totaled $91.0 million, reflecting a linked-quarter increase of 8.2% and year-over-year decrease of 12.8%.

Allocation of Trustmark's $83.2 million allowance for loan losses represented 0.98% of commercial loans and 0.61% of consumer and home mortgage loans, resulting in an allowance to total loans held for investment of 0.90% at September 30, 2019, representing a level management considers commensurate with the inherent risk in the loan portfolio.

Unless otherwise noted, all of the above credit quality metrics exclude acquired loans.

Revenue Generation

  • Net interest margin (FTE), excluding acquired loans, was 3.61%, up 1 basis point from the prior quarter and 11 basis points from the previous year
  • Net interest income (FTE) totaled $111.7 million in the third quarter, up 0.7% linked-quarter and 1.4% year-over-year
  • Noninterest income totaled $48.3 million in the third quarter, representing 31.3% of revenue excluding acquired loans

Net interest income (FTE) in the third quarter totaled $111.7 million, resulting in a net interest margin of 3.66%, up 2 basis points from the prior quarter. Relative to the prior quarter, net interest income (FTE) increased $743 thousand, reflecting a $93 thousand increase in interest income and a $650 thousand decrease in interest expense. During the third quarter of 2019, the yield on acquired loans totaled 11.08% and included $1.1 million in recoveries from the settlement of debt, which represented approximately 5.09% of the annualized total acquired loan yield. Excluding acquired loans, the net interest margin totaled 3.61% for the third quarter of 2019, up 1 basis point from the prior quarter as a decline in the yield on the loans held for investment and held for sale portfolio was offset by runoff of maturing investment securities, decline in other earning assets, favorable funding mix, and lower cost of interest-bearing deposits.

Noninterest income in the third quarter totaled $48.3 million, a decrease of $1.3 million from the prior quarter and an increase of $1.2 million when compared to the same period in the prior year. Mortgage loan production in the third quarter totaled $566.2 million, up 36.7% from the prior quarter and 42.4% year-over-year. Gain on sales of loans, net totaled $8.5 million in the third quarter, up $2.9 million from the second quarter. This increase was more than offset by a $3.7 million increase in negative net mortgage hedge ineffectiveness. Mortgage banking revenue totaled $8.2 million in the third quarter.

Insurance revenue totaled $11.1 million in the third quarter, unchanged from the prior quarter and up 2.9% year-over-year due to broad based growth in commissions. Wealth management revenue in the third quarter totaled $7.7 million, unchanged from the second quarter as increases in brokerage and investment services were offset by a decline in trust management fees. Bank card and other fees increased 4.3% from the prior quarter and 11.9% year-over-year primarily due to higher customer derivative revenue. Service charges on deposit accounts increased 6.6% from the prior quarter and remained flat year-over-year.

Noninterest Expense

  • Total noninterest expense for the third quarter was $106.9 million, up 0.7% from the prior quarter and 1.5% year-over-year
  • Effective tax rate declined to 12.8% in the third quarter
  • Continued to realign delivery channels to reflect changing customer preferences

Salaries and employee benefits increased $546 thousand from the prior quarter to total $62.5 million, primarily due to higher mortgage commissions as a result of increased production. Services and fees rose $829 thousand linked-quarter reflecting continued software investments designed to improve efficiency and customer experience as well as an increase in professional fees. Other real estate expense, net increased $399 thousand linked-quarter while other expense declined $1.0 million linked-quarter to total $10.8 million.

Included in other expense in the third quarter is a recovery of $1.6 million in litigation related expenses incurred in prior periods. Other expense also reflects contributions totaling $1.1 million related to Trustmark’s participation in The Children’s Promise Act, which provides a dollar-for-dollar Mississippi state tax credit to individuals and businesses for donations to eligible charitable organizations. This tax benefit is reflected in Trustmark’s effective tax rate of 12.8% in the third quarter.

Trustmark continues to evaluate delivery channels across its footprint to reflect changing customer preferences and reallocate resources to markets with attractive growth opportunities. Trustmark remains committed to providing the highest quality service in its legacy markets while seeking to further establish a presence in higher growth markets. In the third quarter of 2019, Trustmark closed three offices and opened one office; year-to-date, Trustmark closed five offices and opened two offices.

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, October 23, 2019 at 8:30 a.m. Central Time to discuss the Corporation’s financial results. Interested parties may listen to the conference call by dialing (877) 317-3051 or by clicking on the link provided under the Investor Relations section of our website at www.trustmark.com. A replay of the conference call will also be available through Wednesday, November 6, 2019, in archived format at the same web address or by calling (877) 344-7529, passcode 10135486.

Trustmark is a financial services company providing banking and financial solutions through 193 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 potential market impacts of efforts by the Board of Governors of the Federal Reserve System (FRB) to reduce the size of its balance sheet, 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 credit, securities, and/or commodity 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, 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
September 30, 2019
($ in thousands)
(unaudited)
Linked Quarter Year over Year
QUARTERLY AVERAGE BALANCES 9/30/2019 6/30/2019 9/30/2018 $ Change % Change $ Change % Change
Securities AFS-taxable

$ 1,570,803

$ 1,661,464

$ 1,937,807

$ (90,661)

-5.5%

$ (367,004)

-18.9%

Securities AFS-nontaxable

25,096

31,474

41,889

(6,378)

-20.3%

(16,793)

-40.1%

Securities HTM-taxable

778,098

821,357

933,294

(43,259)

-5.3%

(155,196)

-16.6%

Securities HTM-nontaxable

26,088

27,035

29,183

(947)

-3.5%

(3,095)

-10.6%

Total securities

2,400,085

2,541,330

2,942,173

(141,245)

-5.6%

(542,088)

-18.4%

Loans (including loans held for sale)

9,436,287

9,260,028

8,907,588

176,259

1.9%

528,699

5.9%

Acquired loans

82,641

91,217

147,811

(8,576)

-9.4%

(65,170)

-44.1%

Fed funds sold and rev repos

3,662

34,057

477

(30,395)

-89.2%

3,185

n/m

Other earning assets

176,163

316,604

189,471

(140,441)

-44.4%

(13,308)

-7.0%

Total earning assets

12,098,838

12,243,236

12,187,520

(144,398)

-1.2%

(88,682)

-0.7%

Allowance for loan losses

(83,756)

(81,996)

(86,496)

(1,760)

-2.1%

2,740

3.2%

Other assets

1,447,977

1,467,462

1,366,276

(19,485)

-1.3%

81,701

6.0%

Total assets

$ 13,463,059

$ 13,628,702

$ 13,467,300

$ (165,643)

-1.2%

$ (4,241)

0.0%

 
Interest-bearing demand deposits

$ 3,085,758

$ 3,048,876

$ 2,602,658

$ 36,882

1.2%

$ 483,100

18.6%

Savings deposits

3,568,403

3,801,187

3,722,533

(232,784)

-6.1%

(154,130)

-4.1%

Time deposits

1,753,083

1,840,065

1,851,866

(86,982)

-4.7%

(98,783)

-5.3%

Total interest-bearing deposits

8,407,244

8,690,128

8,177,057

(282,884)

-3.3%

230,187

2.8%

Fed funds purchased and repos

142,064

51,264

347,489

90,800

n/m

(205,425)

-59.1%

Other borrowings

78,404

81,352

187,196

(2,948)

-3.6%

(108,792)

-58.1%

Junior subordinated debt securities

61,856

61,856

61,856

0.0%

0.0%

Total interest-bearing liabilities

8,689,568

8,884,600

8,773,598

(195,032)

-2.2%

(84,030)

-1.0%

Noninterest-bearing deposits

2,932,754

2,898,266

2,894,061

34,488

1.2%

38,693

1.3%

Other liabilities

206,091

240,091

202,053

(34,000)

-14.2%

4,038

2.0%

Total liabilities

11,828,413

12,022,957

11,869,712

(194,544)

-1.6%

(41,299)

-0.3%

Shareholders' equity

1,634,646

1,605,745

1,597,588

28,901

1.8%

37,058

2.3%

Total liabilities and equity

$ 13,463,059

$ 13,628,702

$ 13,467,300

$ (165,643)

-1.2%

$ (4,241)

0.0%

 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2019
($ in thousands)
(unaudited)
 
Linked Quarter Year over Year
PERIOD END BALANCES 9/30/2019 6/30/2019 9/30/2018 $ Change % Change $ Change % Change
Cash and due from banks

$

 

 

486,263

 

$

 

 

404,413

 

$

 

 

432,471

 

$

 

 

81,850

 

20.2

%

$

 

 

53,792

 

12.4

%

Fed funds sold and rev repos

 

75,499

 

 

1,000

 

 

(75,499

)

-100.0

%

 

(1,000

)

-100.0

%

Securities available for sale

 

1,553,705

 

 

1,643,725

 

 

1,864,633

 

 

(90,020

)

-5.5

%

 

(310,928

)

-16.7

%

Securities held to maturity

 

785,422

 

 

825,536

 

 

943,883

 

 

(40,114

)

-4.9

%

 

(158,461

)

-16.8

%

Loans held for sale (LHFS)

 

292,800

 

 

240,380

 

 

182,664

 

 

52,420

 

21.8

%

 

110,136

 

60.3

%

Loans held for investment (LHFI)

 

9,223,668

 

 

9,116,759

 

 

8,747,030

 

 

106,909

 

1.2

%

 

476,638

 

5.4

%

Allowance for loan losses, LHFI

 

(83,226

)

 

(80,399

)

 

(88,874

)

 

(2,827

)

-3.5

%

 

5,648

 

6.4

%

Net LHFI

 

9,140,442

 

 

9,036,360

 

 

8,658,156

 

 

104,082

 

1.2

%

 

482,286

 

5.6

%

Acquired loans

 

81,004

 

 

87,884

 

 

132,615

 

 

(6,880

)

-7.8

%

 

(51,611

)

-38.9

%

Allowance for loan losses, acquired loans

 

(1,249

)

 

(1,398

)

 

(1,714

)

 

149

 

10.7

%

 

465

 

27.1

%

Net acquired loans

 

79,755

 

 

86,486

 

 

130,901

 

 

(6,731

)

-7.8

%

 

(51,146

)

-39.1

%

Net LHFI and acquired loans

 

9,220,197

 

 

9,122,846

 

 

8,789,057

 

 

97,351

 

1.1

%

 

431,140

 

4.9

%

Premises and equipment, net

 

188,423

 

 

189,820

 

 

178,739

 

 

(1,397

)

-0.7

%

 

9,684

 

5.4

%

Mortgage servicing rights

 

73,016

 

 

79,283

 

 

101,374

 

 

(6,267

)

-7.9

%

 

(28,358

)

-28.0

%

Goodwill

 

379,627

 

 

379,627

 

 

379,627

 

0.0

%

0.0

%

Identifiable intangible assets

 

8,345

 

 

9,101

 

 

12,391

 

 

(756

)

-8.3

%

 

(4,046

)

-32.7

%

Other real estate

 

31,974

 

 

31,243

 

 

36,475

 

 

731

 

2.3

%

 

(4,501

)

-12.3

%

Operating lease right-of-use assets

 

33,180

 

 

32,762

 

 

418

 

1.3

%

 

33,180

 

n/m

 

Other assets

 

531,834

 

 

514,723

 

 

517,498

 

 

17,111

 

3.3

%

 

14,336

 

2.8

%

Total assets

$

 

 

13,584,786

 

$

 

 

13,548,958

 

$

 

 

13,439,812

 

$

 

 

35,828

 

0.3

%

$

 

 

144,974

 

1.1

%

 
Deposits:
Noninterest-bearing

$

 

 

3,064,127

 

$

 

 

2,909,141

 

$

 

 

2,786,539

 

$

 

 

154,986

 

5.3

%

$

 

 

277,588

 

10.0

%

Interest-bearing

 

8,190,056

 

 

8,657,488

 

 

8,170,371

 

 

(467,432

)

-5.4

%

 

19,685

 

0.2

%

Total deposits

 

11,254,183

 

 

11,566,629

 

 

10,956,910

 

 

(312,446

)

-2.7

%

 

297,273

 

2.7

%

Fed funds purchased and repos

 

376,712

 

 

51,800

 

 

486,865

 

 

324,912

 

n/m

 

 

(110,153

)

-22.6

%

Other borrowings

 

76,685

 

 

79,012

 

 

190,919

 

 

(2,327

)

-2.9

%

 

(114,234

)

-59.8

%

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

0.0

%

0.0

%

Operating lease liabilities

 

34,319

 

 

33,878

 

 

 

 

441

 

1.3

%

 

34,319

 

n/m

 

Other liabilities

 

135,669

 

 

137,233

 

 

143,658

 

 

(1,564

)

-1.1

%

 

(7,989

)

-5.6

%

Total liabilities

 

11,939,424

 

 

11,930,408

 

 

11,840,208

 

 

9,016

 

0.1

%

 

99,216

 

0.8

%

Common stock

 

13,390

 

 

13,418

 

 

14,089

 

 

(28

)

-0.2

%

 

(699

)

-5.0

%

Capital surplus

 

257,370

 

 

260,619

 

 

362,868

 

 

(3,249

)

-1.2

%

 

(105,498

)

-29.1

%

Retained earnings

 

1,395,460

 

 

1,369,329

 

 

1,302,593

 

 

26,131

 

1.9

%

 

92,867

 

7.1

%

Accum other comprehensive loss, net of tax

 

(20,858

)

 

(24,816

)

 

(79,946

)

 

3,958

 

15.9

%

 

59,088

 

73.9

%

Total shareholders' equity

 

1,645,362

 

 

1,618,550

 

 

1,599,604

 

 

26,812

 

1.7

%

 

45,758

 

2.9

%

Total liabilities and equity

$

 

 

13,584,786

 

$

 

 

13,548,958

 

$

 

 

13,439,812

 

$

 

 

35,828

 

0.3

%

$

 

 

144,974

 

1.1

%

 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2019
($ in thousands except per share data)
(unaudited)
 
Quarter Ended Linked Quarter Year over Year
INCOME STATEMENTS 9/30/2019 6/30/2019 9/30/2018 $ Change % Change $ Change % Change
Interest and fees on LHFS & LHFI-FTE

$

116,432

 

$

114,873

$

105,993

 

$

1,559

 

1.4

%

$

10,439

 

9.8

%

Interest and fees on acquired loans

 

2,309

 

 

2,010

 

4,033

 

 

299

 

14.9

%

 

(1,724

)

-42.7

%

Interest on securities-taxable

 

13,184

 

 

13,916

 

16,186

 

 

(732

)

-5.3

%

 

(3,002

)

-18.5

%

Interest on securities-tax exempt-FTE

 

485

 

 

551

 

656

 

 

(66

)

-12.0

%

 

(171

)

-26.1

%

Interest on fed funds sold and rev repos

 

23

 

 

214

 

3

 

 

(191

)

-89.3

%

 

20

 

n/m

 

Other interest income

 

1,044

 

 

1,820

 

1,050

 

 

(776

)

-42.6

%

 

(6

)

-0.6

%

Total interest income-FTE

 

133,477

 

 

133,384

 

127,921

 

 

93

 

0.1

%

 

5,556

 

4.3

%

Interest on deposits

 

20,385

 

 

21,500

 

14,972

 

 

(1,115

)

-5.2

%

 

5,413

 

36.2

%

Interest on fed funds pch and repos

 

547

 

 

81

 

1,348

 

 

466

 

n/m

 

 

(801

)

-59.4

%

Other interest expense

 

830

 

 

831

 

1,467

 

 

(1

)

-0.1

%

 

(637

)

-43.4

%

Total interest expense

 

21,762

 

 

22,412

 

17,787

 

 

(650

)

-2.9

%

 

3,975

 

22.3

%

Net interest income-FTE

 

111,715

 

 

110,972

 

110,134

 

 

743

 

0.7

%

 

1,581

 

1.4

%

Provision for loan losses, LHFI

 

3,039

 

 

2,486

 

8,673

 

 

553

 

22.2

%

 

(5,634

)

-65.0

%

Provision for loan losses, acquired loans

 

(140

)

 

106

 

(467

)

 

(246

)

n/m

 

 

327

 

70.0

%

Net interest income after provision-FTE

 

108,816

 

 

108,380

 

101,928

 

 

436

 

0.4

%

 

6,888

 

6.8

%

Service charges on deposit accounts

 

11,065

 

 

10,379

 

11,075

 

 

686

 

6.6

%

 

(10

)

-0.1

%

Bank card and other fees

 

8,349

 

 

8,004

 

7,459

 

 

345

 

4.3

%

 

890

 

11.9

%

Mortgage banking, net

 

8,171

 

 

10,295

 

8,647

 

 

(2,124

)

-20.6

%

 

(476

)

-5.5

%

Insurance commissions

 

11,072

 

 

11,089

 

10,765

 

 

(17

)

-0.2

%

 

307

 

2.9

%

Wealth management

 

7,691

 

 

7,742

 

7,789

 

 

(51

)

-0.7

%

 

(98

)

-1.3

%

Other, net

 

1,989

 

 

2,130

 

1,358

 

 

(141

)

-6.6

%

 

631

 

46.5

%

Nonint inc-excl sec gains (losses), net

 

48,337

 

 

49,639

 

47,093

 

 

(1,302

)

-2.6

%

 

1,244

 

2.6

%

Security gains (losses), net

n/m

 

n/m

 

Total noninterest income

 

48,337

 

 

49,639

 

47,093

 

 

(1,302

)

-2.6

%

 

1,244

 

2.6

%

Salaries and employee benefits

 

62,495

 

 

61,949

 

60,847

 

 

546

 

0.9

%

 

1,648

 

2.7

%

Services and fees

 

18,838

 

 

18,009

 

16,404

 

 

829

 

4.6

%

 

2,434

 

14.8

%

Net occupancy-premises

 

6,831

 

 

6,403

 

6,910

 

 

428

 

6.7

%

 

(79

)

-1.1

%

Equipment expense

 

5,971

 

 

5,958

 

6,200

 

 

13

 

0.2

%

 

(229

)

-3.7

%

Other real estate expense, net

 

531

 

 

132

 

1,168

 

 

399

 

n/m

 

 

(637

)

-54.5

%

FDIC assessment expense

 

1,400

 

 

1,836

 

1,999

 

 

(436

)

-23.7

%

 

(599

)

-30.0

%

Other expense

 

10,787

 

 

11,814

 

11,695

 

 

(1,027

)

-8.7

%

 

(908

)

-7.8

%

Total noninterest expense

 

106,853

 

 

106,101

 

105,223

 

 

752

 

0.7

%

 

1,630

 

1.5

%

Income before income taxes and tax eq adj

 

50,300

 

 

51,918

 

43,798

 

 

(1,618

)

-3.1

%

 

6,502

 

14.8

%

Tax equivalent adjustment

 

3,249

 

 

3,248

 

3,151

 

 

1

 

0.0

%

 

98

 

3.1

%

Income before income taxes

 

47,051

 

 

48,670

 

40,647

 

 

(1,619

)

-3.3

%

 

6,404

 

15.8

%

Income taxes

 

6,016

 

 

6,530

 

4,394

 

 

(514

)

-7.9

%

 

1,622

 

36.9

%

Net income

$

41,035

 

$

42,140

$

36,253

 

$

(1,105

)

-2.6

%

$

4,782

 

13.2

%

 
Per share data
Earnings per share - basic

$

0.64

 

$

0.65

$

0.54

 

$

(0.01

)

-1.5

%

$

0.10

 

18.5

%

 
Earnings per share - diluted

$

0.64

 

$

0.65

$

0.54

 

$

(0.01

)

-1.5

%

$

0.10

 

18.5

%

 
Dividends per share

$

0.23

 

$

0.23

$

0.23

 

 

0.0

%

 

0.0

%

 
Weighted average shares outstanding
Basic

 

64,358,540

 

 

64,677,889

 

67,621,345

 

 
Diluted

 

64,514,605

 

 

64,815,029

 

67,796,346

 

 
Period end shares outstanding

 

64,262,779

 

 

64,398,846

 

67,621,369

 

 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION

Net interest income after provision-FTE

($ in thousands)
(unaudited)
Quarter Ended Linked Quarter Year over Year
NONPERFORMING ASSETS (1) 9/30/2019 6/30/2019 9/30/2018 $ Change % Change $ Change % Change
Nonaccrual loans
Alabama

$

2,936

 

$

2,327

 

$

3,953

 

$

609

 

26.2

%

$

(1,017

)

-25.7

%

Florida

 

311

 

 

330

 

 

1,180

 

 

(19

)

-5.8

%

 

(869

)

-73.6

%

Mississippi (2)

 

43,895

 

 

39,373

 

 

41,351

 

 

4,522

 

11.5

%

 

2,544

 

6.2

%

Tennessee (3)

 

10,193

 

 

8,455

 

 

13,195

 

 

1,738

 

20.6

%

 

(3,002

)

-22.8

%

Texas

 

1,695

 

 

2,403

 

 

8,157

 

 

(708

)

-29.5

%

 

(6,462

)

-79.2

%

Total nonaccrual loans

 

59,030

 

 

52,888

 

 

67,836

 

 

6,142

 

11.6

%

 

(8,806

)

-13.0

%

Other real estate
Alabama

 

6,501

 

 

6,451

 

 

7,526

 

 

50

 

0.8

%

 

(1,025

)

-13.6

%

Florida

 

6,983

 

 

7,826

 

 

8,931

 

 

(843

)

-10.8

%

 

(1,948

)

-21.8

%

Mississippi (2)

 

17,646

 

 

15,511

 

 

18,191

 

 

2,135

 

13.8

%

 

(545

)

-3.0

%

Tennessee (3)

 

844

 

 

815

 

 

1,083

 

 

29

 

3.6

%

 

(239

)

-22.1

%

Texas

 

 

640

 

 

744

 

 

(640

)

-100.0

%

 

(744

)

-100.0

%

Total other real estate

 

31,974

 

 

31,243

 

 

36,475

 

 

731

 

2.3

%

 

(4,501

)

-12.3

%

Total nonperforming assets

$

91,004

 

$

84,131

 

$

104,311

 

$

6,873

 

8.2

%

$

(13,307

)

-12.8

%

 
LOANS PAST DUE OVER 90 DAYS (1)
LHFI

$

878

 

$

1,245

 

$

726

 

$

(367

)

-29.5

%

$

152

 

20.9

%

 
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)

$

36,445

 

$

38,355

 

$

34,115

 

$

(1,910

)

-5.0

%

$

2,330

 

6.8

%

 
Quarter Ended Linked Quarter Year over Year
ALLOWANCE FOR LOAN LOSSES (1) 9/30/2019 6/30/2019 9/30/2018 $ Change % Change $ Change % Change
Beginning Balance

$

80,399

 

$

79,005

 

$

83,566

 

$

1,394

 

1.8

%

$

(3,167

)

-3.8

%

Transfers (4)

 

 

 

772

 

 

n/m

 

 

(772

)

-100.0

%

Provision for loan losses

 

3,039

 

 

2,486

 

 

8,673

 

 

553

 

22.2

%

 

(5,634

)

-65.0

%

Charge-offs

 

(2,892

)

 

(2,937

)

 

(7,017

)

 

45

 

1.5

%

 

4,125

 

58.8

%

Recoveries

 

2,680

 

 

1,845

 

 

2,880

 

 

835

 

45.3

%

 

(200

)

-6.9

%

Net (charge-offs) recoveries

 

(212

)

 

(1,092

)

 

(4,137

)

 

880

 

80.6

%

 

3,925

 

-94.9

%

Ending Balance

$

83,226

 

$

80,399

 

$

88,874

 

$

2,827

 

3.5

%

$

(5,648

)

-6.4

%

 
PROVISION FOR LOAN LOSSES (1)
Alabama

$

561

 

$

1,187

 

$

593

 

$

(626

)

-52.7

%

$

(32

)

-5.4

%

Florida

 

(154

)

 

48

 

 

(431

)

 

(202

)

n/m

 

 

277

 

64.3

%

Mississippi (2)

 

1,528

 

 

1,970

 

 

(1,630

)

 

(442

)

-22.4

%

 

3,158

 

n/m

 

Tennessee (3)

 

2,175

 

 

514

 

 

8,100

 

 

1,661

 

n/m

 

 

(5,925

)

-73.1

%

Texas

 

(1,071

)

 

(1,233

)

 

2,041

 

 

162

 

13.1

%

 

(3,112

)

n/m

 

Total provision for loan losses

$

3,039

 

$

2,486

 

$

8,673

 

$

553

 

22.2

%

$

(5,634

)

-65.0

%

 
NET CHARGE-OFFS (RECOVERIES) (1)
Alabama

$

329

 

$

278

 

$

198

 

$

51

 

18.3

%

$

131

 

66.2

%

Florida

 

(136

)

 

(130

)

 

(586

)

 

(6

)

-4.6

%

 

450

 

76.8

%

Mississippi (2)

 

(391

)

 

907

 

 

4,677

 

 

(1,298

)

n/m

 

 

(5,068

)

n/m

 

Tennessee (3)

 

483

 

 

44

 

 

(96

)

 

439

 

n/m

 

 

579

 

n/m

 

Texas

 

(73

)

 

(7

)

 

(56

)

 

(66

)

n/m

 

 

(17

)

-30.4

%

Total net charge-offs (recoveries)

$

212

 

$

1,092

 

$

4,137

 

$

(880

)

-80.6

%

$

(3,925

)

-94.9

%

(1)

Excludes acquired loans.

(2)

Mississippi includes Central and Southern Mississippi Regions.

(3)

Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.

(4)

The allowance for loan losses balance related to the remaining loans acquired in the Heritage acquisition and the Reliance merger, which were transferred from acquired impaired loans to LHFI during the third quarter of 2018.
 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2019
($ in thousands)
(unaudited)
Quarter Ended Nine Months Ended
AVERAGE BALANCES 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018 9/30/2019 9/30/2018
Securities AFS-taxable

$

1,570,803

 

$

1,661,464

 

$

1,753,268

 

$

1,847,421

 

$

1,937,807

 

$

1,661,177

 

$

2,038,492

 

Securities AFS-nontaxable

 

25,096

 

 

31,474

 

 

40,159

 

 

38,821

 

 

41,889

 

 

32,188

 

 

49,906

 

Securities HTM-taxable

 

778,098

 

 

821,357

 

 

866,665

 

 

893,186

 

 

933,294

 

 

821,716

 

 

970,263

 

Securities HTM-nontaxable

 

26,088

 

 

27,035

 

 

28,710

 

 

29,143

 

 

29,183

 

 

27,268

 

 

30,738

 

Total securities

 

2,400,085

 

 

2,541,330

 

 

2,688,802

 

 

2,808,571

 

 

2,942,173

 

 

2,542,349

 

 

3,089,399

 

Loans (including loans held for sale)

 

9,436,287

 

 

9,260,028

 

 

9,038,204

 

 

8,933,501

 

 

8,907,588

 

 

9,246,298

 

 

8,751,665

 

Acquired loans

 

82,641

 

 

91,217

 

 

104,316

 

 

127,747

 

 

147,811

 

 

92,645

 

 

197,352

 

Fed funds sold and rev repos

 

3,662

 

 

34,057

 

 

277

 

 

843

 

 

477

 

 

12,678

 

 

673

 

Other earning assets

 

176,163

 

 

316,604

 

 

243,493

 

 

200,282

 

 

189,471

 

 

245,173

 

 

196,470

 

Total earning assets

 

12,098,838

 

 

12,243,236

 

 

12,075,092

 

 

12,070,944

 

 

12,187,520

 

 

12,139,143

 

 

12,235,559

 

Allowance for loan losses

 

(83,756

)

 

(81,996

)

 

(82,227

)

 

(85,842

)

 

(86,496

)

 

(82,665

)

 

(85,054

)

Other assets

 

1,447,977

 

 

1,467,462

 

 

1,447,611

 

 

1,362,831

 

 

1,366,276

 

 

1,454,350

 

 

1,364,959

 

Total assets

$

13,463,059

 

$

13,628,702

 

$

13,440,476

 

$

13,347,933

 

$

13,467,300

 

$

13,510,828

 

$

13,515,464

 

 
Interest-bearing demand deposits

$

3,085,758

 

$

3,048,876

 

$

2,899,467

 

$

2,722,841

 

$

2,602,658

 

$

3,012,049

 

$

2,483,014

 

Savings deposits

 

3,568,403

 

 

3,801,187

 

 

3,786,835

 

 

3,565,682

 

 

3,722,533

 

 

3,718,008

 

 

3,773,324

 

Time deposits

 

1,753,083

 

 

1,840,065

 

 

1,881,556

 

 

1,892,983

 

 

1,851,866

 

 

1,824,431

 

 

1,800,167

 

Total interest-bearing deposits

 

8,407,244

 

 

8,690,128

 

 

8,567,858

 

 

8,181,506

 

 

8,177,057

 

 

8,554,488

 

 

8,056,505

 

Fed funds purchased and repos

 

142,064

 

 

51,264

 

 

84,352

 

 

340,094

 

 

347,489

 

 

92,771

 

 

326,129

 

Other borrowings

 

78,404

 

 

81,352

 

 

90,804

 

 

90,252

 

 

187,196

 

 

83,475

 

 

394,333

 

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

Total interest-bearing liabilities

 

8,689,568

 

 

8,884,600

 

 

8,804,870

 

 

8,673,708

 

 

8,773,598

 

 

8,792,590

 

 

8,838,823

 

Noninterest-bearing deposits

 

2,932,754

 

 

2,898,266

 

 

2,824,220

 

 

2,862,161

 

 

2,894,061

 

 

2,885,478

 

 

2,902,100

 

Other liabilities

 

206,091

 

 

240,091

 

 

221,199

 

 

216,932

 

 

202,053

 

 

222,404

 

 

190,446

 

Total liabilities

 

11,828,413

 

 

12,022,957

 

 

11,850,289

 

 

11,752,801

 

 

11,869,712

 

 

11,900,472

 

 

11,931,369

 

Shareholders' equity

 

1,634,646

 

 

1,605,745

 

 

1,590,187

 

 

1,595,132

 

 

1,597,588

 

 

1,610,356

 

 

1,584,095

 

Total liabilities and equity

$

13,463,059

 

$

13,628,702

 

$

13,440,476

 

$

13,347,933

 

$

13,467,300

 

$

13,510,828

 

$

13,515,464

 

 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2019
($ in thousands)
(unaudited)
 
PERIOD END BALANCES 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018
Cash and due from banks

$

486,263

 

$

404,413

 

$

454,047

 

$

349,561

 

$

432,471

 

Fed funds sold and rev repos

 

75,499

 

 

830

 

 

1,000

 

Securities available for sale

 

1,553,705

 

 

1,643,725

 

 

1,723,445

 

 

1,811,813

 

 

1,864,633

 

Securities held to maturity

 

785,422

 

 

825,536

 

 

884,319

 

 

909,643

 

 

943,883

 

Loans held for sale (LHFS)

 

292,800

 

 

240,380

 

 

172,683

 

 

153,799

 

 

182,664

 

Loans held for investment (LHFI)

 

9,223,668

 

 

9,116,759

 

 

8,995,014

 

 

8,835,868

 

 

8,747,030

 

Allowance for loan losses, LHFI

 

(83,226

)

 

(80,399

)

 

(79,005

)

 

(79,290

)

 

(88,874

)

Net LHFI

 

9,140,442

 

 

9,036,360

 

 

8,916,009

 

 

8,756,578

 

 

8,658,156

 

Acquired loans

 

81,004

 

 

87,884

 

 

93,201

 

 

106,932

 

 

132,615

 

Allowance for loan losses, acquired loans

 

(1,249

)

 

(1,398

)

 

(1,297

)

 

(1,231

)

 

(1,714

)

Net acquired loans

 

79,755

 

 

86,486

 

 

91,904

 

 

105,701

 

 

130,901

 

Net LHFI and acquired loans

 

9,220,197

 

 

9,122,846

 

 

9,007,913

 

 

8,862,279

 

 

8,789,057

 

Premises and equipment, net

 

188,423

 

 

189,820

 

 

189,743

 

 

178,668

 

 

178,739

 

Mortgage servicing rights

 

73,016

 

 

79,283

 

 

86,842

 

 

95,596

 

 

101,374

 

Goodwill

 

379,627

 

 

379,627

 

 

379,627

 

 

379,627

 

 

379,627

 

Identifiable intangible assets

 

8,345

 

 

9,101

 

 

10,092

 

 

11,112

 

 

12,391

 

Other real estate

 

31,974

 

 

31,243

 

 

32,139

 

 

34,668

 

 

36,475

 

Operating lease right-of-use assets

 

33,180

 

 

32,762

 

 

33,861

 

Other assets

 

531,834

 

 

514,723

 

 

503,306

 

 

498,864

 

 

517,498

 

Total assets

$

13,584,786

 

$

13,548,958

 

$

13,478,017

 

$

13,286,460

 

$

13,439,812

 

 
Deposits:
Noninterest-bearing

$

3,064,127

 

$

2,909,141

 

$

2,867,778

 

$

2,937,594

 

$

2,786,539

 

Interest-bearing

 

8,190,056

 

 

8,657,488

 

 

8,667,037

 

 

8,426,817

 

 

8,170,371

 

Total deposits

 

11,254,183

 

 

11,566,629

 

 

11,534,815

 

 

11,364,411

 

 

10,956,910

 

Fed funds purchased and repos

 

376,712

 

 

51,800

 

 

46,867

 

 

50,471

 

 

486,865

 

Other borrowings

 

76,685

 

 

79,012

 

 

83,265

 

 

79,885

 

 

190,919

 

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

Operating lease liabilities

 

34,319

 

 

33,878

 

 

34,921

 

Other liabilities

 

135,669

 

 

137,233

 

 

129,265

 

 

138,384

 

 

143,658

 

Total liabilities

 

11,939,424

 

 

11,930,408

 

 

11,890,989

 

 

11,695,007

 

 

11,840,208

 

Common stock

 

13,390

 

 

13,418

 

 

13,499

 

 

13,717

 

 

14,089

 

Capital surplus

 

257,370

 

 

260,619

 

 

272,268

 

 

309,545

 

 

362,868

 

Retained earnings

 

1,395,460

 

 

1,369,329

 

 

1,342,176

 

 

1,323,870

 

 

1,302,593

 

Accum other comprehensive loss, net of tax

 

(20,858

)

 

(24,816

)

 

(40,915

)

 

(55,679

)

 

(79,946

)

Total shareholders' equity

 

1,645,362

 

 

1,618,550

 

 

1,587,028

 

 

1,591,453

 

 

1,599,604

 

Total liabilities and equity

$

13,584,786

 

$

13,548,958

 

$

13,478,017

 

$

13,286,460

 

$

13,439,812

 

 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2019
($ in thousands except per share data)
(unaudited)
 
Quarter Ended Nine Months Ended
INCOME STATEMENTS 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018 9/30/2019 9/30/2018
Interest and fees on LHFS & LHFI-FTE

$

116,432

 

$

114,873

$

109,890

$

107,709

 

$

105,993

 

$

341,195

$

300,466

 

Interest and fees on acquired loans

 

2,309

 

 

2,010

 

1,916

 

3,183

 

 

4,033

 

 

6,235

 

13,932

 

Interest on securities-taxable

 

13,184

 

 

13,916

 

14,665

 

15,496

 

 

16,186

 

 

41,765

 

50,586

 

Interest on securities-tax exempt-FTE

 

485

 

 

551

 

646

 

617

 

 

656

 

 

1,682

 

2,213

 

Interest on fed funds sold and rev repos

 

23

 

 

214

 

2

 

4

 

 

3

 

 

239

 

10

 

Other interest income

 

1,044

 

 

1,820

 

1,603

 

1,158

 

 

1,050

 

 

4,467

 

3,038

 

Total interest income-FTE

 

133,477

 

 

133,384

 

128,722

 

128,167

 

 

127,921

 

 

395,583

 

370,245

 

Interest on deposits

 

20,385

 

 

21,500

 

19,570

 

17,334

 

 

14,972

 

 

61,455

 

36,602

 

Interest on fed funds pch and repos

 

547

 

 

81

 

288

 

1,528

 

 

1,348

 

 

916

 

3,260

 

Other interest expense

 

830

 

 

831

 

825

 

894

 

 

1,467

 

 

2,486

 

6,574

 

Total interest expense

 

21,762

 

 

22,412

 

20,683

 

19,756

 

 

17,787

 

 

64,857

 

46,436

 

Net interest income-FTE

 

111,715

 

 

110,972

 

108,039

 

108,411

 

 

110,134

 

 

330,726

 

323,809

 

Provision for loan losses, LHFI

 

3,039

 

 

2,486

 

1,611

 

2,192

 

 

8,673

 

 

7,136

 

15,801

 

Provision for loan losses, acquired loans

 

(140

)

 

106

 

78

 

(247

)

 

(467

)

 

44

 

(758

)

Net interest income after provision-FTE

 

108,816

 

 

108,380

 

106,350

 

106,466

 

 

101,928

 

 

323,546

 

308,766

 

Service charges on deposit accounts

 

11,065

 

 

10,379

 

10,265

 

11,123

 

 

11,075

 

 

31,709

 

32,579

 

Bank card and other fees

 

8,349

 

 

8,004

 

7,191

 

7,750

 

 

7,459

 

 

23,544

 

21,155

 

Mortgage banking, net

 

8,171

 

 

10,295

 

3,442

 

5,716

 

 

8,647

 

 

21,908

 

28,958

 

Insurance commissions

 

11,072

 

 

11,089

 

10,871

 

9,562

 

 

10,765

 

 

33,032

 

30,919

 

Wealth management

 

7,691

 

 

7,742

 

7,483

 

7,504

 

 

7,789

 

 

22,916

 

22,834

 

Other, net

 

1,989

 

 

2,130

 

2,239

 

1,904

 

 

1,358

 

 

6,358

 

4,832

 

Nonint inc-excl sec gains (losses), net

 

48,337

 

 

49,639

 

41,491

 

43,559

 

 

47,093

 

 

139,467

 

141,277

 

Security gains (losses), net

Total noninterest income

 

48,337

 

 

49,639

 

41,491

 

43,559

 

 

47,093

 

 

139,467

 

141,277

 

Salaries and employee benefits

 

62,495

 

 

61,949

 

60,954

 

58,736

 

 

60,847

 

 

185,398

 

179,297

 

Services and fees

 

18,838

 

 

18,009

 

16,968

 

17,910

 

 

16,404

 

 

53,815

 

48,472

 

Net occupancy-premises

 

6,831

 

 

6,403

 

6,454

 

6,741

 

 

6,910

 

 

19,688

 

19,962

 

Equipment expense

 

5,971

 

 

5,958

 

5,924

 

6,329

 

 

6,200

 

 

17,853

 

18,501

 

Other real estate expense, net

 

531

 

 

132

 

1,752

 

61

 

 

1,168

 

 

2,415

 

1,941

 

FDIC assessment expense

 

1,400

 

 

1,836

 

1,758

 

1,897

 

 

1,999

 

 

4,994

 

7,532

 

Other expense

 

10,787

 

 

11,814

 

12,211

 

12,253

 

 

11,695

 

 

34,812

 

35,783

 

Total noninterest expense

 

106,853

 

 

106,101

 

106,021

 

103,927

 

 

105,223

 

 

318,975

 

311,488

 

Income before income taxes and tax eq adj

 

50,300

 

 

51,918

 

41,820

 

46,098

 

 

43,798

 

 

144,038

 

138,555

 

Tax equivalent adjustment

 

3,249

 

 

3,248

 

3,231

 

3,231

 

 

3,151

 

 

9,728

 

9,569

 

Income before income taxes

 

47,051

 

 

48,670

 

38,589

 

42,867

 

 

40,647

 

 

134,310

 

128,986

 

Income taxes

 

6,016

 

 

6,530

 

5,250

 

6,179

 

 

4,394

 

 

17,796

 

16,090

 

Net income

$

41,035

 

$

42,140

$

33,339

$

36,688

 

$

36,253

 

$

116,514

$

112,896

 

 
Per share data
Earnings per share - basic

$

0.64

 

$

0.65

$

0.51

$

0.55

 

$

0.54

 

$

1.80

$

1.67

 

 
Earnings per share - diluted

$

0.64

 

$

0.65

$

0.51

$

0.55

 

$

0.54

 

$

1.80

$

1.67

 

 
Dividends per share

$

0.23

 

$

0.23

$

0.23

$

0.23

 

$

0.23

 

$

0.69

$

0.69

 

 
Weighted average shares outstanding
Basic

 

64,358,540

 

 

64,677,889

 

65,239,470

 

66,839,504

 

 

67,621,345

 

 

64,755,406

 

67,728,871

 

 
Diluted

 

64,514,605

 

 

64,815,029

 

65,378,500

 

67,028,978

 

 

67,796,346

 

 

64,889,916

 

67,875,925

 

 
Period end shares outstanding

 

64,262,779

 

 

64,398,846

 

64,789,943

 

65,834,395

 

 

67,621,369

 

 

64,262,779

 

67,621,369

 

 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2019
($ in thousands)
(unaudited)
 
Quarter Ended
NONPERFORMING ASSETS (1) 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018
Nonaccrual loans
Alabama

$

2,936

 

$

2,327

 

$

2,971

 

$

3,361

 

$

3,953

 

Florida

 

311

 

 

330

 

 

408

 

 

1,175

 

 

1,180

 

Mississippi (2)

 

43,895

 

 

39,373

 

 

41,145

 

 

44,331

 

 

41,351

 

Tennessee (3)

 

10,193

 

 

8,455

 

 

8,806

 

 

8,696

 

 

13,195

 

Texas

 

1,695

 

 

2,403

 

 

3,093

 

 

4,061

 

 

8,157

 

Total nonaccrual loans

 

59,030

 

 

52,888

 

 

56,423

 

 

61,624

 

 

67,836

 

Other real estate
Alabama

 

6,501

 

 

6,451

 

 

6,878

 

 

6,873

 

 

7,526

 

Florida

 

6,983

 

 

7,826

 

 

8,120

 

 

8,771

 

 

8,931

 

Mississippi (2)

 

17,646

 

 

15,511

 

 

15,421

 

 

17,255

 

 

18,191

 

Tennessee (3)

 

844

 

 

815

 

 

994

 

 

1,025

 

 

1,083

 

Texas

 

640

 

 

726

 

 

744

 

 

744

 

Total other real estate

 

31,974

 

 

31,243

 

 

32,139

 

 

34,668

 

 

36,475

 

Total nonperforming assets

$

91,004

 

$

84,131

 

$

88,562

 

$

96,292

 

$

104,311

 

 
LOANS PAST DUE OVER 90 DAYS (1)
LHFI

$

878

 

$

1,245

 

$

670

 

$

856

 

$

726

 

 
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)

$

36,445

 

$

38,355

 

$

40,793

 

$

37,384

 

$

34,115

 

 
 
Quarter Ended Nine Months Ended
ALLOWANCE FOR LOAN LOSSES (1) 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018 9/30/2019 9/30/2018
Beginning Balance

$

80,399

 

$

79,005

 

$

79,290

 

$

88,874

 

$

83,566

 

$

79,290

 

$

76,733

 

Transfers (4)

 

 

 

 

772

 

 

 

1,554

 

Provision for loan losses

 

3,039

 

 

2,486

 

 

1,611

 

 

2,192

 

 

8,673

 

 

7,136

 

 

15,801

 

Charge-offs

 

(2,892

)

 

(2,937

)

 

(4,033

)

 

(16,509

)

 

(7,017

)

 

(9,862

)

 

(12,980

)

Recoveries

 

2,680

 

 

1,845

 

 

2,137

 

 

4,733

 

 

2,880

 

 

6,662

 

 

7,766

 

Net (charge-offs) recoveries

 

(212

)

 

(1,092

)

 

(1,896

)

 

(11,776

)

 

(4,137

)

 

(3,200

)

 

(5,214

)

Ending Balance

$

83,226

 

$

80,399

 

$

79,005

 

$

79,290

 

$

88,874

 

$

83,226

 

$

88,874

 

 
PROVISION FOR LOAN LOSSES (1)
Alabama

$

561

 

$

1,187

 

$

791

 

$

(346

)

$

593

 

$

2,539

 

$

1,645

 

Florida

 

(154

)

 

48

 

 

(595

)

 

(160

)

 

(431

)

 

(701

)

 

(2,105

)

Mississippi (2)

 

1,528

 

 

1,970

 

 

119

 

 

(3,594

)

 

(1,630

)

 

3,617

 

 

3,802

 

Tennessee (3)

 

2,175

 

 

514

 

 

(234

)

 

3,039

 

 

8,100

 

 

2,455

 

 

7,914

 

Texas

 

(1,071

)

 

(1,233

)

 

1,530

 

 

3,253

 

 

2,041

 

 

(774

)

 

4,545

 

Total provision for loan losses

$

3,039

 

$

2,486

 

$

1,611

 

$

2,192

 

$

8,673

 

$

7,136

 

$

15,801

 

 
NET CHARGE-OFFS (RECOVERIES) (1)
Alabama

$

329

 

$

278

 

$

15

 

$

203

 

$

198

 

$

622

 

$

394

 

Florida

 

(136

)

 

(130

)

 

(227

)

 

(238

)

 

(586

)

 

(493

)

 

(1,668

)

Mississippi (2)

 

(391

)

 

907

 

 

2,130

 

 

(1,873

)

 

4,677

 

 

2,646

 

 

6,649

 

Tennessee (3)

 

483

 

 

44

 

 

50

 

 

7,875

 

 

(96

)

 

577

 

 

83

 

Texas

 

(73

)

 

(7

)

 

(72

)

 

5,809

 

 

(56

)

 

(152

)

 

(244

)

Total net charge-offs (recoveries)

$

212

 

$

1,092

 

$

1,896

 

$

11,776

 

$

4,137

 

$

3,200

 

$

5,214

 

(1)

Excludes acquired loans.

(2)

Mississippi includes Central and Southern Mississippi Regions.

(3)

Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.

(4)

The allowance for loan losses balance related to the remaining loans acquired in the Bay Bank merger, which were transferred from acquired impaired loans to LHFI during the second quarter of 2018, and the remaining loans acquired in the Heritage acquisition and the Reliance merger, which were transferred from acquired impaired loans to LHFI during the third quarter of 2018.
 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2019
(unaudited)
 
Quarter Ended Nine Months Ended
FINANCIAL RATIOS AND OTHER DATA 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018 9/30/2019 9/30/2018
Return on equity

 

9.96

%

 

10.53

%

 

8.50

%

 

9.12

%

 

9.00

%

9.67

%

9.53

%

Return on average tangible equity

 

13.31

%

 

14.14

%

 

11.55

%

 

12.41

%

 

12.26

%

13.01

%

13.02

%

Return on assets

 

1.21

%

 

1.24

%

 

1.01

%

 

1.09

%

 

1.07

%

1.15

%

1.12

%

Interest margin - Yield - FTE

 

4.38

%

 

4.37

%

 

4.32

%

 

4.21

%

 

4.16

%

4.36

%

4.05

%

Interest margin - Cost

 

0.71

%

 

0.73

%

 

0.69

%

 

0.65

%

 

0.58

%

0.71

%

0.51

%

Net interest margin - FTE

 

3.66

%

 

3.64

%

 

3.63

%

 

3.56

%

 

3.59

%

3.64

%

3.54

%

Efficiency ratio (1)

 

64.98

%

 

64.55

%

 

68.08

%

 

66.58

%

 

64.46

%

65.82

%

64.78

%

Full-time equivalent employees

 

2,835

 

 

2,819

 

 

2,839

 

 

2,856

 

 

2,889

 

 
CREDIT QUALITY RATIOS (2)
Net charge-offs/average loans

 

0.01

%

 

0.05

%

 

0.09

%

 

0.52

%

 

0.18

%

0.05

%

0.08

%

Provision for loan losses/average loans

 

0.13

%

 

0.11

%

 

0.07

%

 

0.10

%

 

0.39

%

0.10

%

0.24

%

Nonperforming loans/total loans (incl LHFS)

 

0.62

%

 

0.57

%

 

0.62

%

 

0.69

%

 

0.76

%

Nonperforming assets/total loans (incl LHFS)

 

0.96

%

 

0.90

%

 

0.97

%

 

1.07

%

 

1.17

%

Nonperforming assets/total loans (incl LHFS) +ORE

 

0.95

%

 

0.90

%

 

0.96

%

 

1.07

%

 

1.16

%

ALL/total loans (excl LHFS)

 

0.90

%

 

0.88

%

 

0.88

%

 

0.90

%

 

1.02

%

ALL-commercial/total commercial loans

 

0.98

%

 

0.96

%

 

0.96

%

 

0.99

%

 

1.13

%

ALL-consumer/total consumer and home mortgage loans

 

0.61

%

 

0.60

%

 

0.57

%

 

0.57

%

 

0.63

%

ALL/nonperforming loans

 

140.99

%

 

152.02

%

 

140.02

%

 

128.67

%

 

131.01

%

ALL/nonperforming loans (excl specifically reviewed impaired loans)

 

357.15

%

 

383.19

%

 

342.97

%

 

350.77

%

 

339.79

%

 
CAPITAL RATIOS
Total equity/total assets

 

12.11

%

 

11.95

%

 

11.77

%

 

11.98

%

 

11.90

%

Tangible equity/tangible assets

 

9.53

%

 

9.34

%

 

9.15

%

 

9.31

%

 

9.26

%

Tangible equity/risk-weighted assets

 

11.50

%

 

11.39

%

 

11.35

%

 

11.11

%

 

11.31

%

Tier 1 leverage ratio

 

10.34

%

 

10.03

%

 

10.05

%

 

10.26

%

 

10.41

%

Common equity tier 1 capital ratio

 

11.83

%

 

11.76

%

 

11.88

%

 

11.77

%

 

12.20

%

Tier 1 risk-based capital ratio

 

12.38

%

 

12.31

%

 

12.45

%

 

12.33

%

 

12.76

%

Total risk-based capital ratio

 

13.15

%

 

13.07

%

 

13.21

%

 

13.07

%

 

13.61

%

 
STOCK PERFORMANCE
Market value-Close

$

34.11

 

$

33.25

 

$

33.63

 

$

28.43

 

$

33.65

 

Book value

$

25.60

 

$

25.13

 

$

24.49

 

$

24.17

 

$

23.66

 

Tangible book value

$

19.57

 

$

19.10

 

$

18.48

 

$

18.24

 

$

17.86

 

 

(1)

The efficiency ratio is noninterest expense (excluding amortization of purchased intangibles and other real estate expense, net) to total net interest income (FTE) and noninterest income (excluding security gains (losses), net and amortization of partnership tax credits). Any significant non-routine income and expense items are adjusted accordingly.

(2)

Excludes acquired loans.
 
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

September 30, 2019

($ in thousands)

(unaudited)

Note 1 – Leases

ASU 2016-02, “Leases (Topic 842)” became effective for Trustmark on January 1, 2019. As a result, during the first quarter of 2019, Trustmark recorded operating lease right-of-use assets and operating lease liabilities of $33.9 million and $34.9 million, respectively, in its consolidated balance sheet. In addition, Trustmark recorded finance lease right-of-use assets, net of accumulated depreciation of $11.2 million in premises and equipment, net and finance lease liabilities of $11.2 million in other borrowings. The effect on Trustmark’s consolidated income statement is considered immaterial.

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):

 

 

9/30/2019

 

 

6/30/2019

 

 

3/31/2019

 

 

12/31/2018

 

 

9/30/2018

 

SECURITIES AVAILABLE FOR SALE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government agency obligations

 

$

24,697

 

 

$

26,646

 

 

$

28,008

 

 

$

30,335

 

 

$

32,371

 

Obligations of states and political subdivisions

 

 

35,001

 

 

 

38,698

 

 

 

50,954

 

 

 

50,676

 

 

 

57,264

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage pass-through securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Guaranteed by GNMA

 

 

63,391

 

 

 

65,716

 

 

 

66,176

 

 

 

67,494

 

 

 

65,847

 

Issued by FNMA and FHLMC

 

 

589,962

 

 

 

624,364

 

 

 

645,958

 

 

 

666,684

 

 

 

684,474

 

Other residential mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by FNMA, FHLMC, or GNMA

 

 

705,601

 

 

 

751,371

 

 

 

784,566

 

 

 

811,601

 

 

 

840,073

 

Commercial mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by FNMA, FHLMC, or GNMA

 

 

135,053

 

 

 

136,930

 

 

 

147,783

 

 

 

185,023

 

 

 

184,604

 

Total securities available for sale

 

$

1,553,705

 

 

$

1,643,725

 

 

$

1,723,445