Trustmark Corporation Announces Fourth Quarter and Fiscal Year 2019 Financial Results

Performance reflects improved earning asset mix, continued loan growth and solid credit quality

JACKSON, Miss.--(BUSINESS WIRE)--Trustmark Corporation (NASDAQ:TRMK) reported net income of $33.9 million in the fourth quarter of 2019, representing diluted earnings per share of $0.53. Results in the fourth quarter reflect negative hedge ineffectiveness which reduced net income by $2.2 million, or $0.03 per share.

Printer friendly version of earnings release with consolidated financial statements and notes: https://www.businesswire.com/news/home/52164369/en

For the full year, Trustmark’s net income totaled $150.5 million, representing diluted earnings per share of $2.32. Diluted earnings per share in 2019 increased 5.0% when compared to the prior year. Results for 2019 reflect negative hedge ineffectiveness which reduced net income by $8.6 million, or $0.13 per share. Trustmark’s net income in 2019 produced a return on average tangible equity of 12.45% and a return on average assets of 1.11%.

Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable March 15, 2020, to shareholders of record on March 1, 2020.

2019 Highlights

• Loans held for investment increased $499.8 million, or 5.7%, during the year
• Nonperforming assets declined 14.4%, and net charge-offs represented 0.06% of average loans in 2019
• Improved balance sheet positioning as securities and loans (excluding acquired loans) represented 20.5% and 76.7%, respectively, of average earning assets in 2019
• Net interest income (FTE), excluding acquired loans, totaled $431.1 million, an increase of 3.9% from the prior year
• Revenue, excluding acquired loans and negative hedge ineffectiveness, totaled $616.8 million, an increase of 5.5%

Gerard R. Host, President and CEO, stated, “We remained focused on our strategic initiatives this year, profitably increasing revenue across our financial services businesses, optimizing our balance sheet, deploying capital through share repurchases, and maintaining disciplined expense management. Looking ahead to 2020, Trustmark will continue to provide the financial services and advice our customers have come to expect. We remain committed to supporting investments to promote profitable revenue growth, reengineering processes to enhance operational efficiency, realigning delivery channels to support changing customer preferences and managing the franchise for the long-term.”

Balance Sheet Management

• Continued balance sheet and capital optimization through maturing investment securities run-off and share repurchases
• Loans held for investment increased $112.0 million from the prior quarter
• Cost of interest-bearing deposits declined 11 basis points during the quarter to 0.85%

Loans held for investment totaled $9.3 billion at December 31, 2019, reflecting an increase of 1.2% linked-quarter and 5.7% from the prior year. The linked-quarter growth reflects increases in construction and land development, residential mortgage, nonfarm, nonresidential and other real estate secured loans. Acquired loans totaled $72.6 million at December 31, 2019, down $8.4 million from the prior quarter and $34.3 million from the prior year. Collectively, loans held for investment and acquired loans totaled $9.4 billion at the end of the fourth quarter of 2019, up $103.6 million, or 1.1%, from the prior quarter and $465.4 million, or 5.2%, year-over-year.

Deposits totaled $11.2 billion at December 31, 2019, unchanged from the prior quarter and down $118.9 million, or 1.0%, year-over-year. Excluding public fund balances, deposits at December 31, 2019, were unchanged from the prior quarter and up $303.6 million, or 3.3% year-over-year. Interest-bearing deposit costs totaled 0.85% for the fourth quarter, a decrease of 11 basis points linked-quarter. Trustmark continues to maintain an attractive, low-cost deposit base with approximately 58% of deposit balances in checking accounts. The total cost of interest-bearing liabilities was 0.88% for the fourth quarter of 2019.

Trustmark’s capital position remained solid, reflecting the consistent profitability of its diversified financial services businesses. At December 31, 2019, Trustmark’s tangible equity to tangible assets ratio was 9.72%, while the total risk-based capital ratio was 13.25%. During the fourth quarter, Trustmark repurchased $2.2 million, or approximately 64 thousand of its common shares in open market transactions. Trustmark repurchased $56.6 million, or approximately 1.8 million of its common shares in 2019. At December 31, 2019, Trustmark had $80.3 million in remaining authority under its existing stock repurchase program, which expires March 31, 2020.

Today, the Board of Directors authorized a new stock repurchase program, effective April 1, 2020, under which $100 million of Trustmark’s outstanding shares may be acquired through December 31, 2021. The shares may be purchased from time to time at prevailing market prices, through open market or private transactions, depending on market conditions. There is no guarantee as to the number of shares that may be repurchased by Trustmark, and Trustmark may discontinue purchases at any time at management’s discretion.

Credit Quality

• Nonperforming loans decreased 9.8% and 13.6% from the prior quarter and year-over-year, respectively
• Other real estate declined 8.5% from the prior quarter and 15.6% year-over-year
• Allowance for loan losses represented 410.52% of nonperforming loans, excluding specifically reviewed impaired loans

Nonperforming loans totaled $53.2 million at December 31, 2019, down $5.8 million from the prior quarter and $8.4 million year-over-year. Other real estate totaled $29.2 million, reflecting a $2.7 million decrease from the prior quarter and down $5.4 million from the prior year. Collectively, nonperforming assets totaled $82.5 million, reflecting a linked-quarter decrease of 9.4% and a year-over-year decrease of 14.4%.

Allocation of Trustmark's $84.3 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 December 31, 2019, representing a level management considers commensurate with the present risk in the loan portfolio.

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

Revenue Generation

• Noninterest income before negative hedge ineffectiveness totaled $198.6 million in 2019, an increase of $16.1 million, or 8.8%, from the prior year
• Net interest income (FTE), excluding acquired loans, totaled $431.1 million in 2019, an increase of 3.9% from the prior year
• The net interest margin (FTE), excluding acquired loans, was 3.58% in 2019, compared to 3.46% in 2018

Revenue in the fourth quarter totaled $153.2 million, down 2.3% from the prior quarter and up 3.0% from the same quarter in the prior year. The linked-quarter decline reflects lower interest income as well as a seasonal reduction in noninterest income. Net interest income (FTE) in the fourth quarter totaled $108.7 million, resulting in a net interest margin of 3.56%. Relative to the prior quarter, net interest income (FTE) decreased $3.0 million as a reduction in interest expense was more than offset by a decline in total interest income. During the fourth quarter of 2019, the yield on acquired loans totaled 10.90% and included $661 thousand in recoveries from the settlement of debt, which represented approximately 3.37% of the annualized total acquired loan yield. Excluding acquired loans, the net interest margin decreased to 3.52% in the fourth quarter of 2019, compared to 3.61% in the prior quarter. The decrease was primarily due to a decline in the yield on the loans held for investment and held for sale portfolio which was partially offset by runoff of maturing investment securities and lower cost of interest-bearing deposits. Net interest income (FTE) in 2019 totaled $439.5 million, resulting in a net interest margin (FTE) of 3.62%; excluding acquired loans, the net interest margin (FTE) was 3.58%.

Noninterest income in the fourth quarter totaled $47.6 million, a decrease of $759 thousand from the prior quarter and an increase of $4.0 million compared to the same quarter in the prior year. The linked-quarter decrease primarily reflects a seasonal decline in insurance commissions. In the fourth quarter, bank card and other fees decreased 1.9% from the prior quarter, and service charges on deposit accounts decreased 1.5%. Other income, net totaled $3.5 million in the fourth quarter, up $1.5 million linked-quarter due to an increase in other miscellaneous income.

Insurance revenue in the fourth quarter totaled $9.4 million, down $1.7 million from the third quarter and $198 thousand from the same quarter in the prior year. The linked-quarter decrease is due to a seasonal decline in commissions. Insurance revenue in 2019 totaled $42.4 million, up 4.7%, or $1.9 million, from the prior year. The solid performance in 2019 reflects improved sales management practices, producer development, and realization of operational efficiencies resulting from investments in technology and processes.

Wealth management revenue totaled $7.8 million in the fourth quarter, in line with the prior quarter and up 3.5% year-over-year. The increase is primarily attributable to higher trust management fees. For the year, wealth management revenue totaled $30.7 million, up 1.1% from the prior year. Trustmark added capabilities and personnel in its Private Banking Group and completed internal reorganizations in 2019 to enhance the competitive positioning of the wealth management segment and streamline business functions.

Mortgage loan production in the fourth quarter totaled $498.5 million, a seasonal decline of 11.9% from the prior quarter and a 64.2% increase year-over-year, partially due to higher refinancing activity and lower interest rates. Mortgage banking income before negative hedge ineffectiveness totaled $10.9 million in the fourth quarter, a decline of $1.0 million from the prior quarter. In 2019, mortgage loan production totaled $1.76 billion, up 25.8% from the prior year. Mortgage banking income before negative hedge ineffectiveness totaled $41.3 million in 2019, an increase of $9.1 million, or 28.1%, from the prior year.

Noninterest Expense

• Core noninterest expense, which excludes other real estate expense, net and intangible amortization, totaled $107.5 million, up 2.1% from the prior quarter
• Effective corporate tax rate in 2019 was 13.4%
• Continued investments to enhance the customer experience and realign delivery channels to support changing customer preferences

Total noninterest expense for the fourth quarter was $110.0 million, up 3.0%, or $3.2 million, from the prior quarter. The increase is primarily due to a $2.1 million increase in other expense. Other expense in the third quarter included a $1.6 million recovery of litigation related expenses. Excluding the impact of this item, other expense increased 4.4%, or $539 thousand, and total noninterest expense increased 1.5%, or $1.6 million, in the fourth quarter. In 2019, noninterest expense totaled $429.0 million, up 3.3% from the prior year.

Core noninterest expense, which excludes other real estate expense, net ($1.5 million) and intangible amortization ($1.0 million), totaled $107.5 million in the fourth quarter, a 2.1% increase from the prior quarter. In 2019, core noninterest expense totaled $421.0 million, an increase of 3.1% from the prior year.

Salaries and employee benefits totaled $62.3 million in the fourth quarter, down $176 thousand from the prior quarter due to seasonally lower insurance commissions. Services and fees rose $662 thousand linked-quarter reflecting continued software investments designed to improve efficiency and customer experience as well as increased advertising expense and increased spending on outside services and fees. Other real estate expense, net increased $960 thousand linked-quarter.

Trustmark has grown and sustained business by understanding and serving its customer base, and in 2019 Trustmark made significant investments to support changing customer preferences and enhance the customer experience. During the year, Trustmark closed five branches and opened two branches featuring a new design that allows for integration of the myTeller® technology and offers more areas of engagement. Trustmark remains committed to investments that promote profitable revenue growth as well as reengineering and efficiency opportunities that enhance long-term shareholder value.

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, January 29, 2020 at 8:30 a.m. Central Time to discuss the Corporation’s financial results. Interested parties may listen to the conference call by dialing [phone] 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, February 12, 2020, in archived format at the same web address or by calling [phone], passcode 10137727.

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,” “project,” “potential,” “seek,” “continue,” “could,” “would,” “future” or the negative of those terms or other words of similar meaning. You should read statements that contain these words carefully because they discuss our future expectations or state other “forward-looking” information. These forward-looking statements include, but are not limited to, statements relating to anticipated future operating and financial performance measures, including net interest margin, credit quality, business initiatives, growth opportunities and growth rates, among other things, and encompass any estimate, prediction, expectation, projection, opinion, anticipation, outlook or statement of belief included therein as well as the management assumptions underlying these forward-looking statements. You should be aware that the occurrence of the events described under the caption “Risk Factors” in Trustmark’s filings with the Securities and Exchange Commission 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 December 31, 2019 ($ in thousands) (unaudited)
										Linked Quarter					Year over Year
QUARTERLY AVERAGE BALANCES	12/31/2019			9/30/2019			12/31/2018			$ Change			% Change		$ Change			% Change
Securities AFS-taxable	$	1,551,358		$	1,570,803		$	1,847,421		$	(19,445	)	-1.2	%	$	(296,063	)	-16.0	%
Securities AFS-nontaxable		23,300			25,096			38,821			(1,796	)	-7.2	%		(15,521	)	-40.0	%
Securities HTM-taxable		734,474			778,098			893,186			(43,624	)	-5.6	%		(158,712	)	-17.8	%
Securities HTM-nontaxable		25,703			26,088			29,143			(385	)	-1.5	%		(3,440	)	-11.8	%
Total securities		2,334,835			2,400,085			2,808,571			(65,250	)	-2.7	%		(473,736	)	-16.9	%
Loans (including loans held for sale)		9,467,437			9,436,287			8,933,501			31,150		0.3	%		533,936		6.0	%
Acquired loans		77,797			82,641			127,747			(4,844	)	-5.9	%		(49,950	)	-39.1	%
Fed funds sold and rev repos		184			3,662			843			(3,478	)	-95.0	%		(659	)	-78.2	%
Other earning assets		227,116			176,163			200,282			50,953		28.9	%		26,834		13.4	%
Total earning assets		12,107,369			12,098,838			12,070,944			8,531		0.1	%		36,425		0.3	%
Allowance for loan losses		(86,211	)		(83,756	)		(85,842	)		(2,455	)	-2.9	%		(369	)	-0.4	%
Other assets		1,445,075			1,447,977			1,362,831			(2,902	)	-0.2	%		82,244		6.0	%
Total assets	$	13,466,233		$	13,463,059		$	13,347,933		$	3,174		0.0	%	$	118,300		0.9	%
Interest-bearing demand deposits	$	3,167,256		$	3,085,758		$	2,722,841		$	81,498		2.6	%	$	444,415		16.3	%
Savings deposits		3,448,899			3,568,403			3,565,682			(119,504	)	-3.3	%		(116,783	)	-3.3	%
Time deposits		1,663,741			1,753,083			1,892,983			(89,342	)	-5.1	%		(229,242	)	-12.1	%
Total interest-bearing deposits		8,279,896			8,407,244			8,181,506			(127,348	)	-1.5	%		98,390		1.2	%
Fed funds purchased and repos		164,754			142,064			340,094			22,690		16.0	%		(175,340	)	-51.6	%
Other borrowings		79,512			78,404			90,252			1,108		1.4	%		(10,740	)	-11.9	%
Junior subordinated debt securities		61,856			61,856			61,856			—		0.0	%		—		0.0	%
Total interest-bearing liabilities		8,586,018			8,689,568			8,673,708			(103,550	)	-1.2	%		(87,690	)	-1.0	%
Noninterest-bearing deposits		3,017,824			2,932,754			2,862,161			85,070		2.9	%		155,663		5.4	%
Other liabilities		205,786			206,091			216,932			(305	)	-0.1	%		(11,146	)	-5.1	%
Total liabilities		11,809,628			11,828,413			11,752,801			(18,785	)	-0.2	%		56,827		0.5	%
Shareholders' equity		1,656,605			1,634,646			1,595,132			21,959		1.3	%		61,473		3.9	%
Total liabilities and equity	$	13,466,233		$	13,463,059		$	13,347,933		$	3,174		0.0	%	$	118,300		0.9	%
n/m - percentage changes greater than +/- 100% are considered not meaningful
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2019
($ in thousands)
(unaudited)
										Linked Quarter					Year over Year
PERIOD END BALANCES	12/31/2019			9/30/2019			12/31/2018			$ Change			% Change		$ Change			% Change
Cash and due from banks	$	358,916		$	486,263		$	349,561		$	(127,347	)	-26.2	%	$	9,355		2.7	%
Fed funds sold and rev repos		—			—			830			—		n/m			(830	)	-100.0	%
Securities available for sale		1,602,404			1,553,705			1,811,813			48,699		3.1	%		(209,409	)	-11.6	%
Securities held to maturity		738,099			785,422			909,643			(47,323	)	-6.0	%		(171,544	)	-18.9	%
Loans held for sale (LHFS)		226,347			292,800			153,799			(66,453	)	-22.7	%		72,548		47.2	%
Loans held for investment (LHFI)		9,335,628			9,223,668			8,835,868			111,960		1.2	%		499,760		5.7	%
Allowance for loan losses, LHFI		(84,277	)		(83,226	)		(79,290	)		(1,051	)	-1.3	%		(4,987	)	-6.3	%
Net LHFI		9,251,351			9,140,442			8,756,578			110,909		1.2	%		494,773		5.7	%
Acquired loans		72,601			81,004			106,932			(8,403	)	-10.4	%		(34,331	)	-32.1	%
Allowance for loan losses, acquired loans		(815	)		(1,249	)		(1,231	)		434		34.7	%		416		33.8	%
Net acquired loans		71,786			79,755			105,701			(7,969	)	-10.0	%		(33,915	)	-32.1	%
Net LHFI and acquired loans		9,323,137			9,220,197			8,862,279			102,940		1.1	%		460,858		5.2	%
Premises and equipment, net		189,791			188,423			178,668			1,368		0.7	%		11,123		6.2	%
Mortgage servicing rights		79,394			73,016			95,596			6,378		8.7	%		(16,202	)	-16.9	%
Goodwill		379,627			379,627			379,627			—		0.0	%		—		0.0	%
Identifiable intangible assets		7,343			8,345			11,112			(1,002	)	-12.0	%		(3,769	)	-33.9	%
Other real estate		29,248			31,974			34,668			(2,726	)	-8.5	%		(5,420	)	-15.6	%
Operating lease right-of-use assets		31,182			33,180			—			(1,998	)	-6.0	%		31,182		n/m
Other assets		532,389			531,834			498,864			555		0.1	%		33,525		6.7	%
Total assets	$	13,497,877		$	13,584,786		$	13,286,460		$	(86,909	)	-0.6	%	$	211,417		1.6	%
Deposits:
Noninterest-bearing	$	2,891,215		$	3,064,127		$	2,937,594		$	(172,912	)	-5.6	%	$	(46,379	)	-1.6	%
Interest-bearing		8,354,342			8,190,056			8,426,817			164,286		2.0	%		(72,475	)	-0.9	%
Total deposits		11,245,557			11,254,183			11,364,411			(8,626	)	-0.1	%		(118,854	)	-1.0	%
Fed funds purchased and repos		256,020			376,712			50,471			(120,692	)	-32.0	%		205,549		n/m
Other borrowings		85,396			76,685			79,885			8,711		11.4	%		5,511		6.9	%
Junior subordinated debt securities		61,856			61,856			61,856			—		0.0	%		—		0.0	%
Operating lease liabilities		32,354			34,319			—			(1,965	)	-5.7	%		32,354		n/m
Other liabilities		155,992			135,669			138,384			20,323		15.0	%		17,608		12.7	%
Total liabilities		11,837,175			11,939,424			11,695,007			(102,249	)	-0.9	%		142,168		1.2	%
Common stock		13,376			13,390			13,717			(14	)	-0.1	%		(341	)	-2.5	%
Capital surplus		256,400			257,370			309,545			(970	)	-0.4	%		(53,145	)	-17.2	%
Retained earnings		1,414,526			1,395,460			1,323,870			19,066		1.4	%		90,656		6.8	%
Accum other comprehensive loss, net of tax		(23,600	)		(20,858	)		(55,679	)		(2,742	)	-13.1	%		32,079		57.6	%
Total shareholders' equity		1,660,702			1,645,362			1,591,453			15,340		0.9	%		69,249		4.4	%
Total liabilities and equity	$	13,497,877		$	13,584,786		$	13,286,460		$	(86,909	)	-0.6	%	$	211,417		1.6	%
n/m - percentage changes greater than +/- 100% are considered not meaningful
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2019
($ in thousands except per share data)
(unaudited)
	Quarter Ended									Linked Quarter					Year over Year
INCOME STATEMENTS	12/31/2019			9/30/2019			12/31/2018			$ Change			% Change		$ Change			% Change
Interest and fees on LHFS & LHFI-FTE	$	111,383		$	116,432		$	107,709		$	(5,049	)	-4.3	%	$	3,674		3.4	%
Interest and fees on acquired loans		2,138			2,309			3,183			(171	)	-7.4	%		(1,045	)	-32.8	%
Interest on securities-taxable		12,884			13,184			15,496			(300	)	-2.3	%		(2,612	)	-16.9	%
Interest on securities-tax exempt-FTE		484			485			617			(1	)	-0.2	%		(133	)	-21.6	%
Interest on fed funds sold and rev repos		1			23			4			(22	)	-95.7	%		(3	)	-75.0	%
Other interest income		896			1,044			1,158			(148	)	-14.2	%		(262	)	-22.6	%
Total interest income-FTE		127,786			133,477			128,167			(5,691	)	-4.3	%		(381	)	-0.3	%
Interest on deposits		17,716			20,385			17,334			(2,669	)	-13.1	%		382		2.2	%
Interest on fed funds pch and repos		504			547			1,528			(43	)	-7.9	%		(1,024	)	-67.0	%
Other interest expense		826			830			894			(4	)	-0.5	%		(68	)	-7.6	%
Total interest expense		19,046			21,762			19,756			(2,716	)	-12.5	%		(710	)	-3.6	%
Net interest income-FTE		108,740			111,715			108,411			(2,975	)	-2.7	%		329		0.3	%
Provision for loan losses, LHFI		3,661			3,039			2,192			622		20.5	%		1,469		67.0	%
Provision for loan losses, acquired loans		(2	)		(140	)		(247	)		138		98.6	%		245		99.2	%
Net interest income after provision-FTE		105,081			108,816			106,466			(3,735	)	-3.4	%		(1,385	)	-1.3	%
Service charges on deposit accounts		10,894			11,065			11,123			(171	)	-1.5	%		(229	)	-2.1	%
Bank card and other fees		8,192			8,349			7,750			(157	)	-1.9	%		442		5.7	%
Mortgage banking, net		7,914			8,171			5,716			(257	)	-3.1	%		2,198		38.5	%
Insurance commissions		9,364			11,072			9,562			(1,708	)	-15.4	%		(198	)	-2.1	%
Wealth management		7,763			7,691			7,504			72		0.9	%		259		3.5	%
Other, net		3,451			1,989			1,904			1,462		73.5	%		1,547		81.3	%
Nonint inc-excl sec gains (losses), net		47,578			48,337			43,559			(759	)	-1.6	%		4,019		9.2	%
Security gains (losses), net		—			—			—			—		n/m			—		n/m
Total noninterest income		47,578			48,337			43,559			(759	)	-1.6	%		4,019		9.2	%
Salaries and employee benefits		62,319			62,495			58,736			(176	)	-0.3	%		3,583		6.1	%
Services and fees		19,500			18,838			17,910			662		3.5	%		1,590		8.9	%
Net occupancy-premises		6,461			6,831			6,741			(370	)	-5.4	%		(280	)	-4.2	%
Equipment expense		5,880			5,971			6,329			(91	)	-1.5	%		(449	)	-7.1	%
Other real estate expense, net		1,491			531			61			960		n/m			1,430		n/m
FDIC assessment expense		1,450			1,400			1,897			50		3.6	%		(447	)	-23.6	%
Other expense		12,926			10,787			12,253			2,139		19.8	%		673		5.5	%
Total noninterest expense		110,027			106,853			103,927			3,174		3.0	%		6,100		5.9	%
Income before income taxes and tax eq adj		42,632			50,300			46,098			(7,668	)	-15.2	%		(3,466	)	-7.5	%
Tax equivalent adjustment		3,149			3,249			3,231			(100	)	-3.1	%		(82	)	-2.5	%
Income before income taxes		39,483			47,051			42,867			(7,568	)	-16.1	%		(3,384	)	-7.9	%
Income taxes		5,537			6,016			6,179			(479	)	-8.0	%		(642	)	-10.4	%
Net income	$	33,946		$	41,035		$	36,688		$	(7,089	)	-17.3	%	$	(2,742	)	-7.5	%
Per share data
Earnings per share - basic	$	0.53		$	0.64		$	0.55		$	(0.11	)	-17.2	%	$	(0.02	)	-3.6	%
Earnings per share - diluted	$	0.53		$	0.64		$	0.55		$	(0.11	)	-17.2	%	$	(0.02	)	-3.6	%
Dividends per share	$	0.23		$	0.23		$	0.23			—		0.0	%		—		0.0	%
Weighted average shares outstanding
Basic		64,255,716			64,358,540			66,839,504
Diluted		64,435,276			64,514,605			67,028,978
Period end shares outstanding		64,200,111			64,262,779			65,834,395
n/m - percentage changes greater than +/- 100% are considered not meaningful
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2019
($ in thousands)
(unaudited)
	Quarter Ended									Linked Quarter					Year over Year
NONPERFORMING ASSETS (1)	12/31/2019			9/30/2019			12/31/2018			$ Change			% Change		$ Change			% Change
Nonaccrual loans
Alabama	$	1,870		$	2,936		$	3,361		$	(1,066	)	-36.3	%	$	(1,491	)	-44.4	%
Florida		267			311			1,175			(44	)	-14.1	%		(908	)	-77.3	%
Mississippi (2)		41,493			43,895			44,331			(2,402	)	-5.5	%		(2,838	)	-6.4	%
Tennessee (3)		8,980			10,193			8,696			(1,213	)	-11.9	%		284		3.3	%
Texas		616			1,695			4,061			(1,079	)	-63.7	%		(3,445	)	-84.8	%
Total nonaccrual loans		53,226			59,030			61,624			(5,804	)	-9.8	%		(8,398	)	-13.6	%
Other real estate
Alabama		8,133			6,501			6,873			1,632		25.1	%		1,260		18.3	%
Florida		5,877			6,983			8,771			(1,106	)	-15.8	%		(2,894	)	-33.0	%
Mississippi (2)		14,919			17,646			17,255			(2,727	)	-15.5	%		(2,336	)	-13.5	%
Tennessee (3)		319			844			1,025			(525	)	-62.2	%		(706	)	-68.9	%
Texas		—			—			744			—		n/m			(744	)	-100.0	%
Total other real estate		29,248			31,974			34,668			(2,726	)	-8.5	%		(5,420	)	-15.6	%
Total nonperforming assets	$	82,474		$	91,004		$	96,292		$	(8,530	)	-9.4	%	$	(13,818	)	-14.4	%
LOANS PAST DUE OVER 90 DAYS (1)
LHFI	$	642		$	878		$	856		$	(236	)	-26.9	%	$	(214	)	-25.0	%
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)	$	41,648		$	36,445		$	37,384		$	5,203		14.3	%	$	4,264		11.4	%
	Quarter Ended									Linked Quarter					Year over Year
ALLOWANCE FOR LOAN LOSSES (1)	12/31/2019			9/30/2019			12/31/2018			$ Change			% Change		$ Change			% Change
Beginning Balance	$	83,226		$	80,399		$	88,874		$	2,827		3.5	%	$	(5,648	)	-6.4	%
Provision for loan losses		3,661			3,039			2,192			622		20.5	%		1,469		67.0	%
Charge-offs		(4,619	)		(2,892	)		(16,509	)		(1,727	)	-59.7	%		11,890		72.0	%
Recoveries		2,009			2,680			4,733			(671	)	-25.0	%		(2,724	)	-57.6	%
Net (charge-offs) recoveries		(2,610	)		(212	)		(11,776	)		(2,398	)	n/m			9,166		77.8	%
Ending Balance	$	84,277		$	83,226		$	79,290		$	1,051		1.3	%	$	4,987		6.3	%
PROVISION FOR LOAN LOSSES (1)
Alabama	$	(109	)	$	561		$	(346	)	$	(670	)	n/m		$	237		68.5	%
Florida		(108	)		(154	)		(160	)		46		29.9	%		52		32.5	%
Mississippi (2)		1,210			1,528			(3,594	)		(318	)	-20.8	%		4,804		n/m
Tennessee (3)		1,956			2,175			3,039			(219	)	-10.1	%		(1,083	)	-35.6	%
Texas		712			(1,071	)		3,253			1,783		n/m			(2,541	)	-78.1	%
Total provision for loan losses	$	3,661		$	3,039		$	2,192		$	622		20.5	%	$	1,469		67.0	%
NET CHARGE-OFFS (RECOVERIES) (1)
Alabama	$	132		$	329		$	203		$	(197	)	-59.9	%	$	(71	)	-35.0	%
Florida		(357	)		(136	)		(238	)		(221	)	n/m			(119	)	-50.0	%
Mississippi (2)		1,792			(391	)		(1,873	)		2,183		n/m			3,665		n/m
Tennessee (3)		131			483			7,875			(352	)	-72.9	%		(7,744	)	-98.3	%
Texas		912			(73	)		5,809			985		n/m			(4,897	)	-84.3	%
Total net charge-offs (recoveries)	$	2,610		$	212		$	11,776		$	2,398		n/m		$	(9,166	)	-77.8	%
(1) Excludes acquired loans.
(2) Mississippi includes Central and Southern Mississippi Regions.
(3) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.
n/m - percentage changes greater than +/- 100% are considered not meaningful
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2019
($ in thousands)
(unaudited)
	Quarter Ended															Year Ended
AVERAGE BALANCES	12/31/2019			9/30/2019			6/30/2019			3/31/2019			12/31/2018			12/31/2019			12/31/2018
Securities AFS-taxable	$	1,551,358		$	1,570,803		$	1,661,464		$	1,753,268		$	1,847,421		$	1,633,496		$	1,990,332
Securities AFS-nontaxable		23,300			25,096			31,474			40,159			38,821			29,948			47,112
Securities HTM-taxable		734,474			778,098			821,357			866,665			893,186			799,726			950,836
Securities HTM-nontaxable		25,703			26,088			27,035			28,710			29,143			26,874			30,336
Total securities		2,334,835			2,400,085			2,541,330			2,688,802			2,808,571			2,490,044			3,018,616
Loans (including loans held for sale)		9,467,437			9,436,287			9,260,028			9,038,204			8,933,501			9,302,037			8,797,498
Acquired loans		77,797			82,641			91,217			104,316			127,747			88,903			179,808
Fed funds sold and rev repos		184			3,662			34,057			277			843			9,529			716
Other earning assets		227,116			176,163			316,604			243,493			200,282			240,622			197,431
Total earning assets		12,107,369			12,098,838			12,243,236			12,075,092			12,070,944			12,131,135			12,194,069
Allowance for loan losses		(86,211	)		(83,756	)		(81,996	)		(82,227	)		(85,842	)		(83,559	)		(85,252	)
Other assets		1,445,075			1,447,977			1,467,462			1,447,611			1,362,831			1,452,012			1,364,420
Total assets	$	13,466,233		$	13,463,059		$	13,628,702		$	13,440,476		$	13,347,933		$	13,499,588		$	13,473,237
Interest-bearing demand deposits	$	3,167,256		$	3,085,758		$	3,048,876		$	2,899,467		$	2,722,841		$	3,051,170		$	2,543,463
Savings deposits		3,448,899			3,568,403			3,801,187			3,786,835			3,565,682			3,650,178			3,720,987
Time deposits		1,663,741			1,753,083			1,840,065			1,881,556			1,892,983			1,783,928			1,823,562
Total interest-bearing deposits		8,279,896			8,407,244			8,690,128			8,567,858			8,181,506			8,485,276			8,088,012
Fed funds purchased and repos		164,754			142,064			51,264			84,352			340,094			110,915			329,649
Other borrowings		79,512			78,404			81,352			90,804			90,252			82,476			317,687
Junior subordinated debt securities		61,856			61,856			61,856			61,856			61,856			61,856			61,856
Total interest-bearing liabilities		8,586,018			8,689,568			8,884,600			8,804,870			8,673,708			8,740,523			8,797,204
Noninterest-bearing deposits		3,017,824			2,932,754			2,898,266			2,824,220			2,862,161			2,918,836			2,892,033
Other liabilities		205,786			206,091			240,091			221,199			216,932			218,216			197,123
Total liabilities		11,809,628			11,828,413			12,022,957			11,850,289			11,752,801			11,877,575			11,886,360
Shareholders' equity		1,656,605			1,634,646			1,605,745			1,590,187			1,595,132			1,622,013			1,586,877
Total liabilities and equity	$	13,466,233		$	13,463,059		$	13,628,702		$	13,440,476		$	13,347,933		$	13,499,588		$	13,473,237
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2019
($ in thousands)
(unaudited)
PERIOD END BALANCES	12/31/2019			9/30/2019			6/30/2019			3/31/2019			12/31/2018
Cash and due from banks	$	358,916		$	486,263		$	404,413		$	454,047		$	349,561
Fed funds sold and rev repos		—			—			75,499			—			830
Securities available for sale		1,602,404			1,553,705			1,643,725			1,723,445			1,811,813
Securities held to maturity		738,099			785,422			825,536			884,319			909,643
Loans held for sale (LHFS)		226,347			292,800			240,380			172,683			153,799
Loans held for investment (LHFI)		9,335,628			9,223,668			9,116,759			8,995,014			8,835,868
Allowance for loan losses, LHFI		(84,277	)		(83,226	)		(80,399	)		(79,005	)		(79,290	)
Net LHFI		9,251,351			9,140,442			9,036,360			8,916,009			8,756,578
Acquired loans		72,601			81,004			87,884			93,201			106,932
Allowance for loan losses, acquired loans		(815	)		(1,249	)		(1,398	)		(1,297	)		(1,231	)
Net acquired loans		71,786			79,755			86,486			91,904			105,701
Net LHFI and acquired loans		9,323,137			9,220,197			9,122,846			9,007,913			8,862,279
Premises and equipment, net		189,791			188,423			189,820			189,743			178,668
Mortgage servicing rights		79,394			73,016			79,283			86,842			95,596
Goodwill		379,627			379,627			379,627			379,627			379,627
Identifiable intangible assets		7,343			8,345			9,101			10,092			11,112
Other real estate		29,248			31,974			31,243			32,139			34,668
Operating lease right-of-use assets		31,182			33,180			32,762			33,861			—
Other assets		532,389			531,834			514,723			503,306			498,864
Total assets	$	13,497,877		$	13,584,786		$	13,548,958		$	13,478,017		$	13,286,460
Deposits:
Noninterest-bearing	$	2,891,215		$	3,064,127		$	2,909,141		$	2,867,778		$	2,937,594
Interest-bearing		8,354,342			8,190,056			8,657,488			8,667,037			8,426,817
Total deposits		11,245,557			11,254,183			11,566,629			11,534,815			11,364,411
Fed funds purchased and repos		256,020			376,712			51,800			46,867			50,471
Other borrowings		85,396			76,685			79,012			83,265			79,885
Junior subordinated debt securities		61,856			61,856			61,856			61,856			61,856
Operating lease liabilities		32,354			34,319			33,878			34,921			—
Other liabilities		155,992			135,669			137,233			129,265			138,384
Total liabilities		11,837,175			11,939,424			11,930,408			11,890,989			11,695,007
Common stock		13,376			13,390			13,418			13,499			13,717
Capital surplus		256,400			257,370			260,619			272,268			309,545
Retained earnings		1,414,526			1,395,460			1,369,329			1,342,176			1,323,870
Accum other comprehensive loss, net of tax		(23,600	)		(20,858	)		(24,816	)		(40,915	)		(55,679	)
Total shareholders' equity		1,660,702			1,645,362			1,618,550			1,587,028			1,591,453
Total liabilities and equity	$	13,497,877		$	13,584,786		$	13,548,958		$	13,478,017		$	13,286,460
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2019
($ in thousands except per share data)
(unaudited)
	Quarter Ended													Year Ended
INCOME STATEMENTS	12/31/2019			9/30/2019			6/30/2019		3/31/2019		12/31/2018			12/31/2019		12/31/2018
Interest and fees on LHFS & LHFI-FTE	$	111,383		$	116,432		$	114,873	$	109,890	$	107,709		$	452,578	$	408,175
Interest and fees on acquired loans		2,138			2,309			2,010		1,916		3,183			8,373		17,115
Interest on securities-taxable		12,884			13,184			13,916		14,665		15,496			54,649		66,082
Interest on securities-tax exempt-FTE		484			485			551		646		617			2,166		2,830
Interest on fed funds sold and rev repos		1			23			214		2		4			240		14
Other interest income		896			1,044			1,820		1,603		1,158			5,363		4,196
Total interest income-FTE		127,786			133,477			133,384		128,722		128,167			523,369		498,412
Interest on deposits		17,716			20,385			21,500		19,570		17,334			79,171		53,936
Interest on fed funds pch and repos		504			547			81		288		1,528			1,420		4,788
Other interest expense		826			830			831		825		894			3,312		7,468
Total interest expense		19,046			21,762			22,412		20,683		19,756			83,903		66,192
Net interest income-FTE		108,740			111,715			110,972		108,039		108,411			439,466		432,220
Provision for loan losses, LHFI		3,661			3,039			2,486		1,611		2,192			10,797		17,993
Provision for loan losses, acquired loans		(2	)		(140	)		106		78		(247	)		42		(1,005	)
Net interest income after provision-FTE		105,081			108,816			108,380		106,350		106,466			428,627		415,232
Service charges on deposit accounts		10,894			11,065			10,379		10,265		11,123			42,603		43,702
Bank card and other fees		8,192			8,349			8,004		7,191		7,750			31,736		28,905
Mortgage banking, net		7,914			8,171			10,295		3,442		5,716			29,822		34,674
Insurance commissions		9,364			11,072			11,089		10,871		9,562			42,396		40,481
Wealth management		7,763			7,691			7,742		7,483		7,504			30,679		30,338
Other, net		3,451			1,989			2,130		2,239		1,904			9,809		6,736
Nonint inc-excl sec gains (losses), net		47,578			48,337			49,639		41,491		43,559			187,045		184,836
Security gains (losses), net		—			—			—		—		—			—		—
Total noninterest income		47,578			48,337			49,639		41,491		43,559			187,045		184,836
Salaries and employee benefits		62,319			62,495			61,949		60,954		58,736			247,717		238,033
Services and fees		19,500			18,838			18,009		16,968		17,910			73,315		66,382
Net occupancy-premises		6,461			6,831			6,403		6,454		6,741			26,149		26,703
Equipment expense		5,880			5,971			5,958		5,924		6,329			23,733		24,830
Other real estate expense, net		1,491			531			132		1,752		61			3,906		2,002
FDIC assessment expense		1,450			1,400			1,836		1,758		1,897			6,444		9,429
Other expense		12,926			10,787			11,814		12,211		12,253			47,738		48,036
Total noninterest expense		110,027			106,853			106,101		106,021		103,927			429,002		415,415
Income before income taxes and tax eq adj		42,632			50,300			51,918		41,820		46,098			186,670		184,653
Tax equivalent adjustment		3,149			3,249			3,248		3,231		3,231			12,877		12,800
Income before income taxes		39,483			47,051			48,670		38,589		42,867			173,793		171,853
Income taxes		5,537			6,016			6,530		5,250		6,179			23,333		22,269
Net income	$	33,946		$	41,035		$	42,140	$	33,339	$	36,688		$	150,460	$	149,584
Per share data
Earnings per share - basic	$	0.53		$	0.64		$	0.65	$	0.51	$	0.55		$	2.33	$	2.22
Earnings per share - diluted	$	0.53		$	0.64		$	0.65	$	0.51	$	0.55		$	2.32	$	2.21
Dividends per share	$	0.23		$	0.23		$	0.23	$	0.23	$	0.23		$	0.92	$	0.92
Weighted average shares outstanding
Basic		64,255,716			64,358,540			64,677,889		65,239,470		66,839,504			64,629,457		67,504,701
Diluted		64,435,276			64,514,605			64,815,029		65,378,500		67,028,978			64,771,770		67,658,984
Period end shares outstanding		64,200,111			64,262,779			64,398,846		64,789,943		65,834,395			64,200,111		65,834,395
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2019
($ in thousands)
(unaudited)
	Quarter Ended
NONPERFORMING ASSETS (1)	12/31/2019			9/30/2019			6/30/2019			3/31/2019			12/31/2018
Nonaccrual loans
Alabama	$	1,870		$	2,936		$	2,327		$	2,971		$	3,361
Florida		267			311			330			408			1,175
Mississippi (2)		41,493			43,895			39,373			41,145			44,331
Tennessee (3)		8,980			10,193			8,455			8,806			8,696
Texas		616			1,695			2,403			3,093			4,061
Total nonaccrual loans		53,226			59,030			52,888			56,423			61,624
Other real estate
Alabama		8,133			6,501			6,451			6,878			6,873
Florida		5,877			6,983			7,826			8,120			8,771
Mississippi (2)		14,919			17,646			15,511			15,421			17,255
Tennessee (3)		319			844			815			994			1,025
Texas		—			—			640			726			744
Total other real estate		29,248			31,974			31,243			32,139			34,668
Total nonperforming assets	$	82,474		$	91,004		$	84,131		$	88,562		$	96,292
LOANS PAST DUE OVER 90 DAYS (1)
LHFI	$	642		$	878		$	1,245		$	670		$	856
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)	$	41,648		$	36,445		$	38,355		$	40,793		$	37,384
	Quarter Ended															Year Ended
ALLOWANCE FOR LOAN LOSSES (1)	12/31/2019			9/30/2019			6/30/2019			3/31/2019			12/31/2018			12/31/2019			12/31/2018
Beginning Balance	$	83,226		$	80,399		$	79,005		$	79,290		$	88,874		$	79,290		$	76,733
Transfers (4)		—			—			—			—			—			—			1,554
Provision for loan losses		3,661			3,039			2,486			1,611			2,192			10,797			17,993
Charge-offs		(4,619	)		(2,892	)		(2,937	)		(4,033	)		(16,509	)		(14,481	)		(29,489	)
Recoveries		2,009			2,680			1,845			2,137			4,733			8,671			12,499
Net (charge-offs) recoveries		(2,610	)		(212	)		(1,092	)		(1,896	)		(11,776	)		(5,810	)		(16,990	)
Ending Balance	$	84,277		$	83,226		$	80,399		$	79,005		$	79,290		$	84,277		$	79,290
PROVISION FOR LOAN LOSSES (1)
Alabama	$	(109	)	$	561		$	1,187		$	791		$	(346	)	$	2,430		$	1,299
Florida		(108	)		(154	)		48			(595	)		(160	)		(809	)		(2,265	)
Mississippi (2)		1,210			1,528			1,970			119			(3,594	)		4,827			208
Tennessee (3)		1,956			2,175			514			(234	)		3,039			4,411			10,953
Texas		712			(1,071	)		(1,233	)		1,530			3,253			(62	)		7,798
Total provision for loan losses	$	3,661		$	3,039		$	2,486		$	1,611		$	2,192		$	10,797		$	17,993
NET CHARGE-OFFS (RECOVERIES) (1)
Alabama	$	132		$	329		$	278		$	15		$	203		$	754		$	597
Florida		(357	)		(136	)		(130	)		(227	)		(238	)		(850	)		(1,906	)
Mississippi (2)		1,792			(391	)		907			2,130			(1,873	)		4,438			4,776
Tennessee (3)		131			483			44			50			7,875			708			7,958
Texas		912			(73	)		(7	)		(72	)		5,809			760			5,565
Total net charge-offs (recoveries)	$	2,610		$	212		$	1,092		$	1,896		$	11,776		$	5,810		$	16,990

(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
December 31, 2019
(unaudited)
	Quarter Ended															Year Ended
FINANCIAL RATIOS AND OTHER DATA	12/31/2019			9/30/2019			6/30/2019			3/31/2019			12/31/2018			12/31/2019		12/31/2018
Return on equity		8.13	%		9.96	%		10.53	%		8.50	%		9.12	%	9.28	%	9.43	%
Return on average tangible equity		10.85	%		13.31	%		14.14	%		11.55	%		12.41	%	12.45	%	12.86	%
Return on assets		1.00	%		1.21	%		1.24	%		1.01	%		1.09	%	1.11	%	1.11	%
Interest margin - Yield - FTE		4.19	%		4.38	%		4.37	%		4.32	%		4.21	%	4.31	%	4.09	%
Interest margin - Cost		0.62	%		0.71	%		0.73	%		0.69	%		0.65	%	0.69	%	0.54	%
Net interest margin - FTE		3.56	%		3.66	%		3.64	%		3.63	%		3.56	%	3.62	%	3.54	%
Efficiency ratio (1)		68.08	%		64.98	%		64.55	%		68.08	%		66.58	%	66.38	%	65.23	%
Full-time equivalent employees		2,844			2,835			2,819			2,839			2,856
CREDIT QUALITY RATIOS (2)
Net charge-offs/average loans		0.11	%		0.01	%		0.05	%		0.09	%		0.52	%	0.06	%	0.19	%
Provision for loan losses/average loans		0.15	%		0.13	%		0.11	%		0.07	%		0.10	%	0.12	%	0.20	%
Nonperforming loans/total loans (incl LHFS)		0.56	%		0.62	%		0.57	%		0.62	%		0.69	%
Nonperforming assets/total loans (incl LHFS)		0.86	%		0.96	%		0.90	%		0.97	%		1.07	%
Nonperforming assets/total loans (incl LHFS) +ORE		0.86	%		0.95	%		0.90	%		0.96	%		1.07	%
ALL/total loans (excl LHFS)		0.90	%		0.90	%		0.88	%		0.88	%		0.90	%
ALL-commercial/total commercial loans		0.98	%		0.98	%		0.96	%		0.96	%		0.99	%
ALL-consumer/total consumer and home mortgage loans		0.61	%		0.61	%		0.60	%		0.57	%		0.57	%
ALL/nonperforming loans		158.34	%		140.99	%		152.02	%		140.02	%		128.67	%
ALL/nonperforming loans (excl specifically reviewed impaired loans)		410.52	%		357.15	%		383.19	%		342.97	%		350.77	%
CAPITAL RATIOS
Total equity/total assets		12.30	%		12.11	%		11.95	%		11.77	%		11.98	%
Tangible equity/tangible assets		9.72	%		9.53	%		9.34	%		9.15	%		9.31	%
Tangible equity/risk-weighted assets		11.58	%		11.50	%		11.39	%		11.35	%		11.11	%
Tier 1 leverage ratio		10.48	%		10.34	%		10.03	%		10.05	%		10.26	%
Common equity tier 1 capital ratio		11.93	%		11.83	%		11.76	%		11.88	%		11.77	%
Tier 1 risk-based capital ratio		12.48	%		12.38	%		12.31	%		12.45	%		12.33	%
Total risk-based capital ratio		13.25	%		13.15	%		13.07	%		13.21	%		13.07	%
STOCK PERFORMANCE
Market value-Close	$	34.51		$	34.11		$	33.25		$	33.63		$	28.43
Book value	$	25.87		$	25.60		$	25.13		$	24.49		$	24.17
Tangible book value	$	19.84		$	19.57		$	19.10		$	18.48		$	18.24

(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

December 31, 2019

($ in thousands)

(unaudited)

Note 1 – Recently Effective Accounting Pronouncements

ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” became effective for Trustmark on January 1, 2020. Based upon preliminary modeling results, Management estimates the allowance related to loans to be in the range of $95.0 million to $120.0 million. Trustmark expects to recognize a one-time cumulative effect adjustment through retained earnings at the date of adoption.

In addition, Trustmark does not expect a material allowance for credit losses to be recorded on securities available for sale and held to maturity under ASU 2016-13 (Topic 326) due to the composition of these portfolios. Both portfolios consist primarily of U.S. government agency guaranteed mortgage-backed securities for which the risk of loss is minimal.

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):

	12/31/2019		9/30/2019		6/30/2019		3/31/2019		12/31/2018
SECURITIES AVAILABLE FOR SALE
U.S. Government agency obligations	$	22,327	$	24,697	$	26,646	$	28,008	$	30,335
Obligations of states and political subdivisions		25,465		35,001		38,698		50,954		50,676
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA		69,252		63,391		65,716		66,176		67,494
Issued by FNMA and FHLMC		713,356		589,962		624,364		645,958		666,684
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		658,226		705,601		751,371		784,566		811,601
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		113,778		135,053		136,930		147,783		185,023
Total securities available for sale	$	1,602,404	$	1,553,705	$	1,643,725	$	1,723,445	$	1,811,813
SECURITIES HELD TO MATURITY
U.S. Government agency obligations	$	3,781	$	3,770	$	3,758	$	3,747	$	3,736
Obligations of states and political subdivisions		31,781		31,806		32,860		35,352		35,783
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA		10,820		10,994		11,184		11,710		12,090
Issued by FNMA and FHLMC		96,631		102,048		106,755		111,962		115,133
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		485,324		510,770		536,166		559,690		578,827
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA		109,762		126,034		134,813		161,858		164,074
Total securities held to maturity	$	738,099	$	785,422	$	825,536	$	884,319	$	909,643

At December 31, 2019, the net unamortized, unrealized loss included in accumulated other comprehensive loss in the accompanying balance sheet for securities held to maturity previously transferred from securities available for sale totaled approximately $12.1 million ($9.1 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 97.5% 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 December 31, 2019 ($ in thousands) (unaudited)
Note 3 – Loan Composition
LHFI BY TYPE (excluding acquired loans)	12/31/2019			9/30/2019			6/30/2019			3/31/2019			12/31/2018
Loans secured by real estate:
Construction, land development and other land loans	$	1,162,791		$	1,135,999		$	1,111,297		$	1,209,761		$	1,056,601
Secured by 1-4 family residential properties		1,855,913			1,820,455			1,818,126			1,810,872			1,825,492
Secured by nonfarm, nonresidential properties		2,475,245			2,442,308			2,326,312			2,241,072			2,220,914
Other real estate secured		724,480			668,667			635,839			528,032			543,820
Commercial and industrial loans		1,477,896			1,491,367			1,533,318			1,558,057			1,538,715
Consumer loans		175,738			176,894			176,133			176,619			182,448
State and other political subdivision loans		967,944			978,456			982,187			982,626			973,818
Other loans		495,621			509,522			533,547			487,975			494,060
LHFI		9,335,628			9,223,668			9,116,759			8,995,014			8,835,868
Allowance for loan losses		(84,277	)		(83,226	)		(80,399	)		(79,005	)		(79,290	)
Net LHFI	$	9,251,351		$	9,140,442		$	9,036,360		$	8,916,009		$	8,756,578

ACQUIRED LOANS BY TYPE	12/31/2019			9/30/2019			6/30/2019			3/31/2019			12/31/2018
Loans secured by real estate:
Construction, land development and other land loans	$	4,771		$	5,417		$	5,705		$	5,728		$	5,878
Secured by 1-4 family residential properties		17,525			18,437			19,967			21,441			22,556
Secured by nonfarm, nonresidential properties		38,206			40,930			43,444			46,492			47,979
Other real estate secured		3,946			6,887			7,416			8,026			8,253
Commercial and industrial loans		5,035			4,925			6,193			6,359			15,267
Consumer loans		520			593			852			1,033			1,356
Other loans		2,598			3,815			4,307			4,122			5,643
Acquired loans		72,601			81,004			87,884			93,201			106,932
Allowance for loan losses, acquired loans		(815	)		(1,249	)		(1,398	)		(1,297	)		(1,231	)
Net acquired loans	$	71,786		$	79,755		$	86,486		$	91,904		$	105,701

TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIALS December 31, 2019 ($ in thousands) (unaudited)
Note 3 – Loan Composition (continued)
	December 31, 2019
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	$	1,162,791	$	396,640	$	87,073	$	360,458	$	22,998	$	295,622
Secured by 1-4 family residential properties		1,855,913		126,541		39,111		1,594,235		82,644		13,382
Secured by nonfarm, nonresidential properties		2,475,245		622,714		255,996		923,335		165,393		507,807
Other real estate secured		724,480		190,099		26,011		283,201		9,627		215,542
Commercial and industrial loans		1,477,896		227,792		22,479		721,854		315,794		189,977
Consumer loans		175,738		24,124		5,002		124,395		19,777		2,440
State and other political subdivision loans		967,944		106,218		38,763		613,476		27,447		182,040
Other loans		495,621		79,404		16,452		301,144		67,526		31,095
Loans	$	9,335,628	$	1,773,532	$	490,887	$	4,922,098	$	711,206	$	1,437,905
CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION (1)
Lots	$	73,058	$	16,166	$	22,625	$	25,592	$	2,032	$	6,643
Development		60,881		13,327		8,365		28,390		4,714		6,085
Unimproved land		98,550		22,947		17,050		28,202		11,987		18,364
1-4 family construction		252,073		117,405		21,723		84,277		3,437		25,231
Other construction		678,229		226,795		17,310		193,997		828		239,299
Construction, land development and other land loans	$	1,162,791	$	396,640	$	87,073	$	360,458	$	22,998	$	295,622
LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION (1)
Non-owner occupied:
Retail	$	426,995	$	165,213	$	41,542	$	117,382	$	27,709	$	75,149
Office		232,572		46,550		27,788		60,682		11,816		85,736
Hotel/motel		315,270		114,786		96,401		52,375		40,708		11,000
Mini-storage		110,097		12,301		3,832		47,561		579		45,824
Industrial		169,165		57,741		10,833		28,790		2,322		69,479
Health care		37,366		11,065		3,462		19,055		—		3,784
Convenience stores		24,283		3,137		—		11,680		639		8,827
Nursing homes/senior living		38,370		18,792		—		2,366		—		17,212
Other		63,485		4,219		6,875		11,965		5,804		34,622
Total non-owner occupied loans		1,417,603		433,804		190,733		351,856		89,577		351,633
Owner-occupied:
Office		155,787		35,147		27,512		58,023		7,389		27,716
Churches		99,737		22,690		6,350		42,265		13,794		14,638
Industrial warehouses		139,685		11,778		3,372		63,204		16,289		45,042
Health care		132,838		18,305		6,175		92,828		2,542		12,988
Convenience stores		106,175		13,277		7,044		63,969		667		21,218
Retail		69,311		15,610		7,377		27,333		2,788		16,203
Restaurants		56,369		3,730		1,857		32,722		16,542		1,518
Auto dealerships		30,123		8,257		300		13,288		8,278		—
Nursing homes/senior living		179,737		55,174		—		118,707		5,856		—
Other		87,880		4,942		5,276		59,140		1,671		16,851
Total owner-occupied loans		1,057,642		188,910		65,263		571,479		75,816		156,174
Loans secured by nonfarm, nonresidential properties	$	2,475,245	$	622,714	$	255,996	$	923,335	$	165,393	$	507,807
(1) Excludes acquired loans.

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

December 31, 2019

($ in thousands)

(unaudited)

Note 4 – Yields on Earning Assets and Interest-Bearing Liabilities

The following table illustrates the yields on earning assets by category as well as the rates paid on interest-bearing liabilities on a tax equivalent basis:

	Quarter Ended															Year Ended
	12/31/2019			9/30/2019			6/30/2019			3/31/2019			12/31/2018			12/31/2019			12/31/2018
Securities – taxable		2.24	%		2.23	%		2.25	%		2.27	%		2.24	%		2.25	%		2.25	%
Securities – nontaxable		3.92	%		3.76	%		3.78	%		3.80	%		3.60	%		3.81	%		3.65	%
Securities – total		2.27	%		2.26	%		2.28	%		2.31	%		2.28	%		2.28	%		2.28	%
Loans - LHFI & LHFS		4.67	%		4.90	%		4.98	%		4.93	%		4.78	%		4.87	%		4.64	%
Acquired loans		10.90	%		11.08	%		8.84	%		7.45	%		9.89	%		9.42	%		9.52	%
Loans - total		4.72	%		4.95	%		5.01	%		4.96	%		4.86	%		4.91	%		4.74	%
FF sold & rev repo		2.16	%		2.49	%		2.52	%		2.93	%		1.88	%		2.52	%		1.96	%
Other earning assets		1.57	%		2.35	%		2.31	%		2.67	%		2.29	%		2.23	%		2.13	%
Total earning assets		4.19	%		4.38	%		4.37	%		4.32	%		4.21	%		4.31	%		4.09	%
Interest-bearing deposits		0.85	%		0.96	%		0.99	%		0.93	%		0.84	%		0.93	%		0.67	%
FF pch & repo		1.21	%		1.53	%		0.63	%		1.38	%		1.78	%		1.28	%		1.45	%
Other borrowings		2.32	%		2.35	%		2.33	%		2.19	%		2.33	%		2.29	%		1.97	%
Total interest-bearing liabilities		0.88	%		0.99	%		1.01	%		0.95	%		0.90	%		0.96	%		0.75	%
Net interest margin		3.56	%		3.66	%		3.64	%		3.63	%		3.56	%		3.62	%		3.54	%
Net interest margin excluding acquired loans		3.52	%		3.61	%		3.60	%		3.60	%		3.50	%		3.58	%		3.46	%

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.

During the fourth quarter of 2019, the yield on acquired loans totaled 10.90% and included $661 thousand in recoveries from the settlement of debt, which represented approximately 3.37% of the annualized total acquired loan yield. 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 decreased to 3.52% for the fourth quarter of 2019 when compared to the third quarter of 2019, primarily due to a decline in the yield on the loans held for investment and held for sale portfolio and was partially offset by runoff of maturing investment securities and lower costs of interest-bearing deposits.

Note 5 – Mortgage Banking

Trustmark utilizes a portfolio of exchange-traded derivative instruments, such as Treasury note futures contracts and option contracts, to achieve a fair value return that offsets the changes in fair value of mortgage servicing rights (MSR) attributable to interest rates. These transactions are considered freestanding derivatives that do not otherwise qualify for hedge accounting under generally accepted accounting principles (GAAP). Changes in the fair value of these exchange-traded derivative instruments, including administrative costs, are recorded in noninterest income in mortgage banking, net and are offset by the changes in the fair value of the MSR. The MSR fair value represents the present value of future cash flows, which among other things includes decay and the effect of changes in interest rates. Ineffectiveness of hedging the MSR fair value is measured by comparing the change in value of hedge instruments to the change in the fair value of the MSR asset attributable to changes in interest rates and other market driven changes in valuation inputs and assumptions. The impact of this strategy resulted in a net negative ineffectiveness of $3.0 million primarily due to market volatility and adjustments to asset valuation assumptions during the fourth quarter of 2019.

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

	Quarter Ended															Year Ended
	12/31/2019			9/30/2019			6/30/2019			3/31/2019			12/31/2018			12/31/2019			12/31/2018
Mortgage servicing income, net	$	5,854		$	5,688		$	5,734		$	5,607		$	5,730		$	22,883		$	22,248
Change in fair value-MSR from runoff		(2,950	)		(3,569	)		(2,918	)		(2,398	)		(2,752	)		(11,835	)		(11,774	)
Gain on sales of loans, net (1)		7,984			9,799			7,532			4,981			3,813			30,296			21,800
Mortgage banking income before hedge ineffectiveness		10,888			11,918			10,348			8,190			6,791			41,344			32,274
Change in fair value-MSR from market changes		4,048			(8,054	)		(8,209	)		(8,863	)		(6,537	)		(21,078	)		7,342
Change in fair value of derivatives		(7,022	)		4,307			8,156			4,115			5,462			9,556			(4,942	)
Net positive (negative) hedge ineffectiveness		(2,974	)		(3,747	)		(53	)		(4,748	)		(1,075	)		(11,522	)		2,400
Mortgage banking, net	$	7,914		$	8,171		$	10,295		$	3,442		$	5,716		$	29,822		$	34,674

(1)	The mortgage loan valuation adjustment, previously shown as “Other, net”, has been included in “Gain on sales of loans, net” for all periods presented.

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

December 31, 2019

($ in thousands)

(unaudited)

Note 6 – Other Noninterest Income and Expense

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

	Quarter Ended															Year Ended
	12/31/2019			9/30/2019			6/30/2019			3/31/2019			12/31/2018			12/31/2019			12/31/2018
Partnership amortization for tax credit purposes	$	(1,630	)	$	(1,994	)	$	(2,010	)	$	(2,010	)	$	(2,101	)	$	(7,644	)	$	(8,707	)
Increase in life insurance cash surrender value		1,802			1,814			1,803			1,783			1,808			7,202			7,121
Other miscellaneous income		3,279			2,169			2,337			2,466			2,197			10,251			8,322
Total other, net	$	3,451		$	1,989		$	2,130		$	2,239		$	1,904		$	9,809		$	6,736

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										Year Ended
	12/31/2019		9/30/2019		6/30/2019		3/31/2019		12/31/2018		12/31/2019		12/31/2018
Loan expense	$	2,968	$	2,886	$	3,003	$	2,697	$	2,425	$	11,554	$	11,086
Amortization of intangibles		1,002		1,021		992		1,101		1,279		4,116		5,248
Other miscellaneous expense		8,956		6,880		7,819		8,413		8,549		32,068		31,702
Total other expense	$	12,926	$	10,787	$	11,814	$	12,211	$	12,253	$	47,738	$	48,036

Note 7 – Non-GAAP Financial Measures

In addition to capital ratios defined by U.S. generally accepted accounting principles (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. In Management’s experience, many stock analysts use tangible common equity measures in conjunction with more traditional bank capital ratios to compare capital adequacy of banking organizations with significant amounts of goodwill or other tangible assets, typically stemming from the use of the purchase accounting method in accounting for mergers and acquisitions.

These calculations are intended to complement the capital ratios defined by GAAP and banking regulators. Because GAAP does not include these capital ratio measures, Trustmark believes there are no comparable GAAP financial measures to these tangible common equity ratios. Despite the importance of these measures to Trustmark, there are no standardized definitions for them and, as a result, Trustmark’s calculations may not be comparable with other organizations. Also there may be limits in the usefulness of these measures to investors. As a result, Trustmark encourages readers to consider its 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 December 31, 2019 ($ in thousands except per share data) (unaudited)
Note 7 – Non-GAAP Financial Measures (continued)
		Quarter Ended															Year Ended
		12/31/2019			9/30/2019			6/30/2019			3/31/2019			12/31/2018			12/31/2019			12/31/2018
TANGIBLE EQUITY
AVERAGE BALANCES
Total shareholders' equity		$	1,656,605		$	1,634,646		$	1,605,745		$	1,590,187		$	1,595,132		$	1,622,013		$	1,586,877
Less: Goodwill			(379,627	)		(379,627	)		(379,627	)		(379,627	)		(379,627	)		(379,627	)		(379,627	)
Identifiable intangible assets			(7,882	)		(8,706	)		(9,631	)		(10,666	)		(11,811	)		(9,212	)		(13,751	)
Total average tangible equity		$	1,269,096		$	1,246,313		$	1,216,487		$	1,199,894		$	1,203,694		$	1,233,174		$	1,193,499
PERIOD END BALANCES
Total shareholders' equity		$	1,660,702		$	1,645,362		$	1,618,550		$	1,587,028		$	1,591,453
Less: Goodwill			(379,627	)		(379,627	)		(379,627	)		(379,627	)		(379,627	)
Identifiable intangible assets			(7,343	)		(8,345	)		(9,101	)		(10,092	)		(11,112	)
Total tangible equity	(a)	$	1,273,732		$	1,257,390		$	1,229,822		$	1,197,309		$	1,200,714
TANGIBLE ASSETS
Total assets		$	13,497,877		$	13,584,786		$	13,548,958		$	13,478,017		$	13,286,460
Less: Goodwill			(379,627	)		(379,627	)		(379,627	)		(379,627	)		(379,627	)
Identifiable intangible assets			(7,343	)		(8,345	)		(9,101	)		(10,092	)		(11,112	)
Total tangible assets	(b)	$	13,110,907		$	13,196,814		$	13,160,230		$	13,088,298		$	12,895,721
Risk-weighted assets	(c)	$	11,002,877		$	10,935,018		$	10,796,903		$	10,548,472		$	10,803,313
NET INCOME ADJUSTED FOR INTANGIBLE AMORTIZATION
Net income		$	33,946		$	41,035		$	42,140		$	33,339		$	36,688		$	150,460		$	149,584
Plus: Intangible amortization net of tax			752			766			744			826			959			3,088			3,938
Net income adjusted for intangible amortization		$	34,698		$	41,801		$	42,884		$	34,165		$	37,647		$	153,548		$	153,522
Period end common shares outstanding	(d)		64,200,111			64,262,779			64,398,846			64,789,943			65,834,395
TANGIBLE COMMON EQUITY MEASUREMENTS
Return on average tangible equity (1)			10.85	%		13.31	%		14.14	%		11.55	%		12.41	%		12.45	%		12.86	%
Tangible equity/tangible assets	(a)/(b)		9.72	%		9.53	%		9.34	%		9.15	%		9.31	%
Tangible equity/risk-weighted assets	(a)/(c)		11.58	%		11.50	%		11.39	%		11.35	%		11.11	%
Tangible book value	(a)/(d)*1,000	$	19.84		$	19.57		$	19.10		$	18.48		$	18.24
COMMON EQUITY TIER 1 CAPITAL (CET1)
Total shareholders' equity		$	1,660,702		$	1,645,362		$	1,618,550		$	1,587,028		$	1,591,453
AOCI-related adjustments			23,600			20,858			24,816			40,915			55,679
CET1 adjustments and deductions:
Goodwill net of associated deferred tax liabilities (DTLs)			(365,738	)		(365,741	)		(365,745	)		(365,748	)		(365,779	)
Other adjustments and deductions for CET1 (2)			(5,896	)		(6,671	)		(8,268	)		(9,099	)		(9,815	)
CET1 capital	(e)		1,312,668			1,293,808			1,269,353			1,253,096			1,271,538
Additional tier 1 capital instruments plus related surplus			60,000			60,000			60,000			60,000			60,000
Less: additional tier 1 capital deductions			—			—			—			—			—
Additional tier 1 capital			60,000			60,000			60,000			60,000			60,000
Tier 1 capital		$	1,372,668		$	1,353,808		$	1,329,353		$	1,313,096		$	1,331,538
Common equity tier 1 capital ratio	(e)/(c)		11.93	%		11.83	%		11.76	%		11.88	%		11.77	%

(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.