Trustmark Corporation Announces First Quarter 2021 Financial Results

Performance Reflects Continued Balance Sheet Growth and Strong Credit Quality

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Trustmark Corporation Announces First Quarter 2021 Financial Results

JACKSON, Miss.--()--Trustmark Corporation (Nasdaq:TRMK) reported net income of $52.0 million in the first quarter of 2021, representing diluted earnings per share of $0.82. Net income in the first quarter produced a return on average tangible equity of 15.56% and a return on average assets of 1.26%. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable June 15, 2021, to shareholders of record on June 1, 2021.

Printer friendly version of earnings release with consolidated financial statements and notes: https://www.businesswire.com/news/home/52418458/en

First Quarter Highlights

  • Supported local businesses by originating 4,774 loans totaling $301.5 million (net of $16.5 million in deferred fees and costs) from the SBA’s Paycheck Protection Program (PPP) during the quarter
  • Mortgage loan production totaled $766.6 million, down 2.8% from the prior quarter and an increase of 67.7% from levels one year earlier
  • Provision for credit losses totaled a negative $10.5 million due to improved credit loss expectations

Duane A. Dewey, President and CEO, stated, “Our first quarter financial performance reflects solid loan and deposit growth, as well as continued increases in our insurance and wealth management businesses. Our mortgage banking revenue remained strong following record-setting levels in the prior quarter. Improvement in the economic outlook resulted in negative provision and expense for credit losses, which also contributed to earnings. We continue to focus on efficiency enhancements throughout the organization, including investments in technology to better serve customers as well as rationalization of the branch network. Trustmark remains well-positioned to serve and expand our customer base and create long-term value for our shareholders.”

Balance Sheet Management

  • Loans held for investment (HFI) totaled $10.0 billion, up 1.6% from the prior quarter and 4.3% year-over-year
  • Deposits totaled $14.4 billion, an increase of 2.4% linked-quarter and 24.3% year-over-year
  • Maintained strong capital position with CET1 ratio of 11.71% and total risk-based capital ratio of 14.07%

Loans HFI totaled $10.0 billion at March 31, 2021, reflecting an increase of $159.2 million, or 1.6%, linked-quarter and $415.8 million, or 4.3%, year-over-year. The linked-quarter growth reflects increases in other real estate secured loans and loans secured by nonfarm, nonresidential properties, which were principally the result of the migration of construction loans as projects were completed. Trustmark’s loan portfolio is well-diversified by loan type and geography.

Deposits totaled $14.4 billion at March 31, 2021, up $334.7 million, or 2.4%, from the prior quarter and $2.8 billion, or 24.3%, year-over-year. Trustmark maintains a strong liquidity position as loans HFI represented 69.4% of total deposits at March 31, 2021. Noninterest-bearing deposits represented 32.7% of total deposits at the end of the first quarter, compared to 31.0% in the prior quarter. Interest-bearing deposit costs totaled 0.22% for the first quarter, a decrease of 5 basis points from the prior quarter. The total cost of interest-bearing liabilities was 0.28% for the first quarter of 2021, a decrease of 2 basis points from the prior quarter.

During the first quarter, Trustmark repurchased $4.2 million, or approximately 145 thousand of its common shares in open market transactions. At March 31, 2021, Trustmark had $95.8 million in remaining authority under its existing stock repurchase program, which expires December 31, 2021. The repurchase program, which is subject to market conditions and management discretion, will continue to be implemented through open market repurchases or privately negotiated transactions. At March 31, 2021, Trustmark’s tangible equity to tangible assets ratio was 8.30%, while its total risk-based capital ratio was 14.07%. Tangible book value per share was $21.59 at March 31, 2021, up 8.4% year-over-year.

Credit Quality

  • Allowance for credit losses (ACL) represented 437.08% of nonaccrual loans, excluding individually evaluated loans, at March 31, 2021
  • Recoveries exceeded charge-offs by $2.4 million in the first quarter
  • Loans remaining under a COVID-19 related concession represented approximately 28 basis points of loans HFI at March 31, 2021

Nonaccrual loans totaled $63.5 million at March 31, 2021, up $386 thousand from the prior quarter and $10.5 million year-over-year. Other real estate totaled $10.7 million, reflecting a $1.0 million decrease from the prior quarter and a decline of $14.2 million year-over-year. Collectively, nonperforming assets totaled $74.2 million at March 31, 2021, reflecting a linked-quarter decrease of $614 thousand and a year-over-year decrease of $3.7 million.

The provision for credit losses was a negative $10.5 million in the first quarter. Negative provisioning was primarily driven by decreases in quantitative reserves as a result of an improving economic forecast.

Allocation of Trustmark’s $109.2 million allowance for credit losses on loans HFI represented 1.13% of commercial loans and 0.95% of consumer and home mortgage loans, resulting in an allowance to total loans HFI of 1.09% at March 31, 2021. Management believes the level of the ACL is commensurate with the present risk in the loan portfolio.

Revenue Generation

  • Mortgage banking revenue totaled $20.8 million in the first quarter, reflecting tighter spreads and reduced gains on sale of mortgage loans in the secondary market
  • Insurance commissions increased 22.1% from the prior quarter and wealth management revenue rose 7.4% over the same period

Revenue in the first quarter totaled $162.9 million, down 8.2% from the prior quarter and 3.7% from the same quarter in the prior year. The linked-quarter decrease primarily reflects lower interest income and fees from PPP loans and loans HFI and lower net gains on sales of mortgage loans.

Net interest income (FTE) in the first quarter totaled $105.2 million, resulting in a net interest margin of 2.81%, down 34 basis points from the prior quarter. The net interest margin, excluding PPP loans and Federal Reserve Bank balance, totaled 2.99% for the first quarter, a decrease of 10 basis points when compared to the prior quarter. Continued low interest rates decreased the yield on the loans held for investment and held for sale portfolio as well as the securities portfolio and were partially offset by lower costs of interest-bearing deposits.

Noninterest income in the first quarter totaled $60.6 million, a decrease of $5.5 million from the prior quarter and $4.7 million year-over-year. The linked-quarter increases in insurance, wealth management and bank card revenue were more than offset by declines in mortgage banking revenue and service charges on deposit accounts. Mortgage loan production in the first quarter totaled $766.6 million, down 2.8% from the record level in the prior quarter and an increase of 67.7% year-over-year. Mortgage banking revenue totaled $20.8 million in the first quarter, a decrease of $7.4 million from the prior quarter and $6.7 million year-over-year. The linked-quarter decline is principally attributable to reduced spreads which resulted in lower net gains on sales of mortgage loans in the secondary market.

Insurance revenue totaled $12.4 million in the first quarter, up 22.1%, or $2.2 million, from the fourth quarter of 2020 and 7.7%, or $895 thousand, year-over-year. The linked-quarter increase primarily reflects growth in property and casualty commissions. Wealth management revenue in the first quarter totaled $8.4 million, an increase of $578 thousand, or 7.4%, from the prior quarter and relatively unchanged year-over-year. The linked-quarter growth reflects both higher trust management fees and brokerage and investment services revenue.

Bank card and other fees increased $365 thousand, or 4.0%, from the prior quarter and $4.1 million, or 76.9%, year-over-year, reflecting higher customer derivative revenue. Service charges on deposit accounts decreased $927 thousand, or 11.2%, from the prior quarter and $2.7 million, or 26.7%, year-over-year. The decline is due largely to reduced NSF/OD occurrences attributable in part to stimulus programs to address the COVID-19 pandemic.

Noninterest Expense

  • Noninterest expense totaled $112.2 million in first quarter, down 5.6% from the prior quarter
  • Adjusted noninterest expense, which excludes amortization of intangibles, ORE expenses, and credit losses for off-balance sheet credit exposures, increased $629 thousand, or 0.5%, from the prior quarter; please refer to the Consolidated Financial Information, Footnote 8– Non-GAAP Financial Measures
  • Continued to realign delivery channels to reflect changing customer preferences

Adjusted noninterest expense in the first quarter was $120.2 million, up $629 thousand, or 0.5%, from the prior quarter. Salaries and employee benefits increased $1.5 million linked-quarter principally due to payroll taxes and increases for performance-based commissions. Services and fees increased $157 thousand and net occupancy-premises expense grew $179 thousand during the first quarter compared to the prior quarter.

Credit loss expense related to off-balance sheet credit exposures was a negative $9.4 million in the first quarter, reflecting the improvement of the macroeconomic factors used to determine the necessary reserves for off-balance sheet credit exposures. Other real estate expense, net totaled $324 thousand for the first quarter compared to a negative $812 thousand for the fourth quarter of 2020, reflecting lower net gains on sale of other real estate.

Trustmark continued to invest in technology to enhance efficiency. Digital transformation initiatives, including a completely redesigned, state-of-the-art website to promote engagement and enhance the customer experience, position Trustmark for additional growth. During the first quarter, Trustmark continued to realign delivery channels and closed seven offices, reflecting changing customer preferences and the continued migration to mobile and digital banking channels. Additionally, two new offices were opened, one each in the Memphis, TN MSA and the Jackson, MS MSA. Each of these offices features a design that integrates myTeller® interactive teller machine technology as well as provides enhanced areas for customer interaction.

Looking forward, Trustmark will continue to focus upon efficiency, growth and innovation opportunities while building upon our solid risk management processes, corporate culture and core values. We will continue to optimize delivery channels and introduce technology to enhance growth and efficiency opportunities. We will provide the services and advice our customers have come to expect while building long-term value for our shareholders,” said Dewey.

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, April 28, 2021 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, May 12, 2021, in archived format at the same web address or by calling (877) 344-7529, passcode 10153927.

Trustmark is a financial services company providing banking and financial solutions through 181 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, an increase in unemployment levels and slowdowns in economic growth, our ability to manage the impact of the COVID-19 pandemic on our markets and our customers, as well as the effectiveness of actions of federal, state and local governments and agencies (including the Board of Governors of the Federal Reserve System (FRB)) to mitigate its spread and economic impact, local, state and national economic and market conditions, conditions in the housing and real estate markets in the regions in which Trustmark operates and the extent and duration of the current volatility in the credit and financial markets, levels of and volatility in 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 related 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, pandemics or other health crises, acts of war or terrorism, and other risks described in our filings with the Securities and Exchange Commission (SEC).

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

 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2021
($ in thousands)
(unaudited)
 
Linked Quarter Year over Year
QUARTERLY AVERAGE BALANCES 3/31/2021 12/31/2020 3/31/2020 $ Change % Change $ Change % Change
Securities AFS-taxable

$

2,098,089

 

$

1,902,162

 

$

1,620,422

 

$

195,927

 

10.3

%

$

477,667

 

29.5

%

Securities AFS-nontaxable

 

5,190

 

 

5,206

 

 

22,056

 

 

(16

)

-0.3

%

 

(16,866

)

-76.5

%

Securities HTM-taxable

 

489,260

 

 

550,563

 

 

694,740

 

 

(61,303

)

-11.1

%

 

(205,480

)

-29.6

%

Securities HTM-nontaxable

 

24,070

 

 

24,752

 

 

25,673

 

 

(682

)

-2.8

%

 

(1,603

)

-6.2

%

Total securities

 

2,616,609

 

 

2,482,683

 

 

2,362,891

 

 

133,926

 

5.4

%

 

253,718

 

10.7

%

Paycheck protection program loans (PPP)

 

598,139

 

 

875,098

 

 

 

 

(276,959

)

-31.6

%

 

598,139

 

n/m

 

Loans (includes loans held for sale)

 

10,316,319

 

 

10,231,671

 

 

9,678,174

 

 

84,648

 

0.8

%

 

638,145

 

6.6

%

Fed funds sold and reverse repurchases

 

136

 

 

303

 

 

164

 

 

(167

)

-55.1

%

 

(28

)

-17.1

%

Other earning assets

 

1,667,906

 

 

860,540

 

 

187,327

 

 

807,366

 

93.8

%

 

1,480,579

 

n/m

 

Total earning assets

 

15,199,109

 

 

14,450,295

 

 

12,228,556

 

 

748,814

 

5.2

%

 

2,970,553

 

24.3

%

Allowance for credit losses (ACL), loans held
  for investment (LHFI)

 

(119,557

)

 

(124,088

)

 

(85,015

)

 

4,531

 

3.7

%

 

(34,542

)

-40.6

%

Other assets

 

1,601,250

 

 

1,620,694

 

 

1,498,725

 

 

(19,444

)

-1.2

%

 

102,525

 

6.8

%

Total assets

$

16,680,802

 

$

15,946,901

 

$

13,642,266

 

$

733,901

 

4.6

%

$

3,038,536

 

22.3

%

 
Interest-bearing demand deposits

$

3,743,651

 

$

3,649,590

 

$

3,184,134

 

$

94,061

 

2.6

%

$

559,517

 

17.6

%

Savings deposits

 

4,659,037

 

 

4,350,783

 

 

3,646,936

 

 

308,254

 

7.1

%

 

1,012,101

 

27.8

%

Time deposits

 

1,371,830

 

 

1,436,677

 

 

1,617,307

 

 

(64,847

)

-4.5

%

 

(245,477

)

-15.2

%

Total interest-bearing deposits

 

9,774,518

 

 

9,437,050

 

 

8,448,377

 

 

337,468

 

3.6

%

 

1,326,141

 

15.7

%

Fed funds purchased and repurchases

 

166,909

 

 

170,474

 

 

247,513

 

 

(3,565

)

-2.1

%

 

(80,604

)

-32.6

%

Other borrowings

 

166,926

 

 

173,525

 

 

85,279

 

 

(6,599

)

-3.8

%

 

81,647

 

95.7

%

Subordinated notes

 

122,875

 

 

42,828

 

 

 

 

80,047

 

n/m

 

 

122,875

 

n/m

 

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

 

0.0

%

 

 

0.0

%

Total interest-bearing liabilities

 

10,293,084

 

 

9,885,733

 

 

8,843,025

 

 

407,351

 

4.1

%

 

1,450,059

 

16.4

%

Noninterest-bearing deposits

 

4,363,559

 

 

4,100,849

 

 

2,910,951

 

 

262,710

 

6.4

%

 

1,452,608

 

49.9

%

Other liabilities

 

264,808

 

 

235,284

 

 

248,220

 

 

29,524

 

12.5

%

 

16,588

 

6.7

%

Total liabilities

 

14,921,451

 

 

14,221,866

 

 

12,002,196

 

 

699,585

 

4.9

%

 

2,919,255

 

24.3

%

Shareholders' equity

 

1,759,351

 

 

1,725,035

 

 

1,640,070

 

 

34,316

 

2.0

%

 

119,281

 

7.3

%

Total liabilities and equity

$

16,680,802

 

$

15,946,901

 

$

13,642,266

 

$

733,901

 

4.6

%

$

3,038,536

 

22.3

%

 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 
See Notes to Consolidated Financials
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2021
($ in thousands)
(unaudited)
Linked Quarter Year over Year
PERIOD END BALANCES 3/31/2021 12/31/2020 3/31/2020 $ Change % Change $ Change % Change
Cash and due from banks

$

1,774,541

 

$

1,952,504

 

$

404,341

 

$

(177,963

)

-9.1

%

$

1,370,200

 

n/m

 

Fed funds sold and reverse repurchases

 

 

 

50

 

 

2,000

 

 

(50

)

-100.0

%

 

(2,000

)

-100.0

%

Securities available for sale

 

2,337,676

 

 

1,991,815

 

 

1,833,779

 

 

345,861

 

17.4

%

 

503,897

 

27.5

%

Securities held to maturity

 

493,738

 

 

538,072

 

 

704,276

 

 

(44,334

)

-8.2

%

 

(210,538

)

-29.9

%

PPP loans

 

679,725

 

 

610,134

 

 

 

 

69,591

 

11.4

%

 

679,725

 

n/m

 

Loans held for sale (LHFS)

 

412,999

 

 

446,951

 

 

325,389

 

 

(33,952

)

-7.6

%

 

87,610

 

26.9

%

Loans held for investment (LHFI)

 

9,983,704

 

 

9,824,524

 

 

9,567,920

 

 

159,180

 

1.6

%

 

415,784

 

4.3

%

ACL LHFI

 

(109,191

)

 

(117,306

)

 

(100,564

)

 

8,115

 

6.9

%

 

(8,627

)

-8.6

%

Net LHFI

 

9,874,513

 

 

9,707,218

 

 

9,467,356

 

 

167,295

 

1.7

%

 

407,157

 

4.3

%

Premises and equipment, net

 

199,098

 

 

194,278

 

 

190,179

 

 

4,820

 

2.5

%

 

8,919

 

4.7

%

Mortgage servicing rights

 

83,035

 

 

66,464

 

 

56,437

 

 

16,571

 

24.9

%

 

26,598

 

47.1

%

Goodwill

 

384,237

 

 

385,270

 

 

381,717

 

 

(1,033

)

-0.3

%

 

2,520

 

0.7

%

Identifiable intangible assets

 

6,724

 

 

7,390

 

 

7,537

 

 

(666

)

-9.0

%

 

(813

)

-10.8

%

Other real estate

 

10,651

 

 

11,651

 

 

24,847

 

 

(1,000

)

-8.6

%

 

(14,196

)

-57.1

%

Operating lease right-of-use assets

 

33,704

 

 

30,901

 

 

30,839

 

 

2,803

 

9.1

%

 

2,865

 

9.3

%

Other assets

 

587,672

 

 

609,142

 

 

591,132

 

 

(21,470

)

-3.5

%

 

(3,460

)

-0.6

%

Total assets

$

16,878,313

 

$

16,551,840

 

$

14,019,829

 

$

326,473

 

2.0

%

$

2,858,484

 

20.4

%

 
Deposits:
Noninterest-bearing

$

4,705,991

 

$

4,349,010

 

$

2,977,058

 

$

356,981

 

8.2

%

$

1,728,933

 

58.1

%

Interest-bearing

 

9,677,449

 

 

9,699,754

 

 

8,598,706

 

 

(22,305

)

-0.2

%

 

1,078,743

 

12.5

%

Total deposits

 

14,383,440

 

 

14,048,764

 

 

11,575,764

 

 

334,676

 

2.4

%

 

2,807,676

 

24.3

%

Fed funds purchased and repurchases

 

160,991

 

 

164,519

 

 

421,821

 

 

(3,528

)

-2.1

%

 

(260,830

)

-61.8

%

Other borrowings

 

145,994

 

 

168,252

 

 

84,230

 

 

(22,258

)

-13.2

%

 

61,764

 

73.3

%

Subordinated notes

 

122,877

 

 

122,921

 

 

 

 

(44

)

0.0

%

 

122,877

 

n/m

 

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

 

0.0

%

 

 

0.0

%

ACL on off-balance sheet credit exposures

 

29,205

 

 

38,572

 

 

36,421

 

 

(9,367

)

-24.3

%

 

(7,216

)

-19.8

%

Operating lease liabilities

 

35,389

 

 

32,290

 

 

32,055

 

 

3,099

 

9.6

%

 

3,334

 

10.4

%

Other liabilities

 

178,856

 

 

173,549

 

 

155,283

 

 

5,307

 

3.1

%

 

23,573

 

15.2

%

Total liabilities

 

15,118,608

 

 

14,810,723

 

 

12,367,430

 

 

307,885

 

2.1

%

 

2,751,178

 

22.2

%

Common stock

 

13,209

 

 

13,215

 

 

13,209

 

 

(6

)

0.0

%

 

 

0.0

%

Capital surplus

 

229,892

 

 

233,120

 

 

229,403

 

 

(3,228

)

-1.4

%

 

489

 

0.2

%

Retained earnings

 

1,533,110

 

 

1,495,833

 

 

1,402,089

 

 

37,277

 

2.5

%

 

131,021

 

9.3

%

Accum other comprehensive income (loss),
  net of tax

 

(16,506

)

 

(1,051

)

 

7,698

 

 

(15,455

)

n/m

 

 

(24,204

)

n/m

 

Total shareholders' equity

 

1,759,705

 

 

1,741,117

 

 

1,652,399

 

 

18,588

 

1.1

%

 

107,306

 

6.5

%

Total liabilities and equity

$

16,878,313

 

$

16,551,840

 

$

14,019,829

 

$

326,473

 

2.0

%

$

2,858,484

 

20.4

%

 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 
See Notes to Consolidated Financials
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2021
($ in thousands except per share data)
(unaudited)
 
Quarter Ended Linked Quarter Year over Year
INCOME STATEMENTS 3/31/2021 12/31/2020 3/31/2020 $ Change % Change $ Change % Change
Interest and fees on LHFS & LHFI-FTE

$

93,394

 

$

96,453

 

$

109,357

$

(3,059

)

-3.2

%

$

(15,963

)

-14.6

%

Interest and fees on PPP loans

 

9,241

 

 

14,870

 

 

 

(5,629

)

-37.9

%

 

9,241

 

n/m

 

Interest on securities-taxable

 

8,938

 

 

9,998

 

 

12,948

 

(1,060

)

-10.6

%

 

(4,010

)

-31.0

%

Interest on securities-tax exempt-FTE

 

290

 

 

293

 

 

457

 

(3

)

-1.0

%

 

(167

)

-36.5

%

Interest on fed funds sold and reverse repurchases

 

 

 

 

 

 

 

n/m

 

 

 

n/m

 

Other interest income

 

503

 

 

249

 

 

740

 

254

 

n/m

 

 

(237

)

-32.0

%

Total interest income-FTE

 

112,366

 

 

121,863

 

 

123,502

 

(9,497

)

-7.8

%

 

(11,136

)

-9.0

%

Interest on deposits

 

5,223

 

 

6,363

 

 

14,957

 

(1,140

)

-17.9

%

 

(9,734

)

-65.1

%

Interest on fed funds purchased and repurchases

 

56

 

 

56

 

 

625

 

 

0.0

%

 

(569

)

-91.0

%

Other interest expense

 

1,857

 

 

1,127

 

 

860

 

730

 

64.8

%

 

997

 

n/m

 

Total interest expense

 

7,136

 

 

7,546

 

 

16,442

 

(410

)

-5.4

%

 

(9,306

)

-56.6

%

Net interest income-FTE

 

105,230

 

 

114,317

 

 

107,060

 

(9,087

)

-7.9

%

 

(1,830

)

-1.7

%

Provision for credit losses, LHFI

 

(10,501

)

 

(4,413

)

 

20,581

 

(6,088

)

n/m

 

 

(31,082

)

n/m

 

Net interest income after provision-FTE

 

115,731

 

 

118,730

 

 

86,479

 

(2,999

)

-2.5

%

 

29,252

 

33.8

%

Service charges on deposit accounts

 

7,356

 

 

8,283

 

 

10,032

 

(927

)

-11.2

%

 

(2,676

)

-26.7

%

Bank card and other fees

 

9,472

 

 

9,107

 

 

5,355

 

365

 

4.0

%

 

4,117

 

76.9

%

Mortgage banking, net

 

20,804

 

 

28,155

 

 

27,483

 

(7,351

)

-26.1

%

 

(6,679

)

-24.3

%

Insurance commissions

 

12,445

 

 

10,196

 

 

11,550

 

2,249

 

22.1

%

 

895

 

7.7

%

Wealth management

 

8,416

 

 

7,838

 

 

8,537

 

578

 

7.4

%

 

(121

)

-1.4

%

Other, net

 

2,090

 

 

2,538

 

 

2,307

 

(448

)

-17.7

%

 

(217

)

-9.4

%

Total noninterest income

 

60,583

 

 

66,117

 

 

65,264

 

(5,534

)

-8.4

%

 

(4,681

)

-7.2

%

Salaries and employee benefits

 

71,162

 

 

69,660

 

 

69,148

 

1,502

 

2.2

%

 

2,014

 

2.9

%

Services and fees

 

22,484

 

 

22,327

 

 

19,930

 

157

 

0.7

%

 

2,554

 

12.8

%

Net occupancy-premises

 

6,795

 

 

6,616

 

 

6,286

 

179

 

2.7

%

 

509

 

8.1

%

Equipment expense

 

6,244

 

 

6,213

 

 

5,616

 

31

 

0.5

%

 

628

 

11.2

%

Other real estate expense, net

 

324

 

 

(812

)

 

1,294

 

1,136

 

n/m

 

 

(970

)

-75.0

%

Credit loss expense related to off-balance sheet
  credit exposures

 

(9,367

)

 

(1,087

)

 

6,783

 

(8,280

)

n/m

 

 

(16,150

)

n/m

 

Other expense

 

14,539

 

 

15,890

 

 

14,753

 

(1,351

)

-8.5

%

 

(214

)

-1.5

%

Total noninterest expense

 

112,181

 

 

118,807

 

 

123,810

 

(6,626

)

-5.6

%

 

(11,629

)

-9.4

%

Income before income taxes and tax eq adj

 

64,133

 

 

66,040

 

 

27,933

 

(1,907

)

-2.9

%

 

36,200

 

n/m

 

Tax equivalent adjustment

 

2,894

 

 

2,939

 

 

3,108

 

(45

)

-1.5

%

 

(214

)

-6.9

%

Income before income taxes

 

61,239

 

 

63,101

 

 

24,825

 

(1,862

)

-3.0

%

 

36,414

 

n/m

 

Income taxes

 

9,277

 

 

11,884

 

 

2,607

 

(2,607

)

-21.9

%

 

6,670

 

n/m

 

Net income

$

51,962

 

$

51,217

 

$

22,218

$

745

 

1.5

%

$

29,744

 

n/m

 

 
Per share data
Earnings per share - basic

$

0.82

 

$

0.81

 

$

0.35

$

0.01

 

1.2

%

$

0.47

 

n/m

 

 
Earnings per share - diluted

$

0.82

 

$

0.81

 

$

0.35

$

0.01

 

1.2

%

$

0.47

 

n/m

 

 
Dividends per share

$

0.23

 

$

0.23

 

$

0.23

 

 

0.0

%

 

 

0.0

%

 
Weighted average shares outstanding
Basic

 

63,395,911

 

 

63,424,219

 

 

63,756,629

 
Diluted

 

63,562,503

 

 

63,616,767

 

 

63,913,603

 
Period end shares outstanding

 

63,394,522

 

 

63,424,526

 

 

63,396,912

 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 
See Notes to Consolidated Financials
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2021
($ in thousands)
(unaudited)
 
Quarter Ended Linked Quarter Year over Year
NONPERFORMING ASSETS (1) 3/31/2021 12/31/2020 3/31/2020 $ Change % Change $ Change % Change
Nonaccrual LHFI
Alabama

$

9,161

 

$

9,221

 

$

4,769

 

$

(60

)

-0.7

%

$

4,392

 

92.1

%

Florida

 

607

 

 

572

 

 

254

 

 

35

 

6.1

%

 

353

 

n/m

 

Mississippi (2)

 

35,534

 

 

35,015

 

 

40,815

 

 

519

 

1.5

%

 

(5,281

)

-12.9

%

Tennessee (3)

 

12,451

 

 

12,572

 

 

6,153

 

 

(121

)

-1.0

%

 

6,298

 

n/m

 

Texas

 

5,761

 

 

5,748

 

 

1,001

 

 

13

 

0.2

%

 

4,760

 

n/m

 

Total nonaccrual LHFI

 

63,514

 

 

63,128

 

 

52,992

 

 

386

 

0.6

%

 

10,522

 

19.9

%

Other real estate
Alabama

 

3,085

 

 

3,271

 

 

6,229

 

 

(186

)

-5.7

%

 

(3,144

)

-50.5

%

Florida

 

 

 

 

 

4,835

 

 

 

n/m

 

 

(4,835

)

-100.0

%

Mississippi (2)

 

7,566

 

 

8,330

 

 

13,296

 

 

(764

)

-9.2

%

 

(5,730

)

-43.1

%

Tennessee (3)

 

 

 

50

 

 

487

 

 

(50

)

-100.0

%

 

(487

)

-100.0

%

Texas

 

 

 

 

 

 

 

 

n/m

 

 

 

n/m

 

Total other real estate

 

10,651

 

 

11,651

 

 

24,847

 

 

(1,000

)

-8.6

%

 

(14,196

)

-57.1

%

Total nonperforming assets

$

74,165

 

$

74,779

 

$

77,839

 

$

(614

)

-0.8

%

$

(3,674

)

-4.7

%

 
LOANS PAST DUE OVER 90 DAYS (1)
LHFI

$

2,593

 

$

1,576

 

$

708

 

$

1,017

 

64.5

%

$

1,885

 

n/m

 

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

$

109,566

 

$

119,409

 

$

43,564

 

$

(9,843

)

-8.2

%

$

66,002

 

n/m

 

 
Quarter Ended Linked Quarter Year over Year
ACL LHFI (1) 3/31/2021 12/31/2020 3/31/2020 $ Change % Change $ Change % Change
Beginning Balance

$

117,306

 

$

122,010

 

$

84,277

 

$

(4,704

)

-3.9

%

$

33,029

 

39.2

%

CECL adoption adjustments:
LHFI

 

 

 

 

 

(3,039

)

 

 

n/m

 

 

3,039

 

100.0

%

Acquired loan transfers

 

 

 

 

 

1,822

 

 

 

n/m

 

 

(1,822

)

-100.0

%

Provision for credit losses

 

(10,501

)

 

(4,413

)

 

20,581

 

 

(6,088

)

n/m

 

 

(31,082

)

n/m

 

Charge-offs

 

(1,245

)

 

(2,797

)

 

(5,545

)

 

1,552

 

55.5

%

 

4,300

 

77.5

%

Recoveries

 

3,631

 

 

2,506

 

 

2,468

 

 

1,125

 

44.9

%

 

1,163

 

47.1

%

Net (charge-offs) recoveries

 

2,386

 

 

(291

)

 

(3,077

)

 

2,677

 

n/m

 

 

5,463

 

n/m

 

Ending Balance

$

109,191

 

$

117,306

 

$

100,564

 

$

(8,115

)

-6.9

%

$

8,627

 

8.6

%

 
NET (CHARGE-OFFS) RECOVERIES (1)
Alabama

$

102

 

$

(1,011

)

$

(1,080

)

$

1,113

 

n/m

 

$

1,182

 

n/m

 

Florida

 

30

 

 

66

 

 

64

 

 

(36

)

-54.5

%

 

(34

)

-53.1

%

Mississippi (2)

 

2,207

 

 

332

 

 

126

 

 

1,875

 

n/m

 

 

2,081

 

n/m

 

Tennessee (3)

 

47

 

 

303

 

 

(2,186

)

 

(256

)

-84.5

%

 

2,233

 

n/m

 

Texas

 

 

 

19

 

 

(1

)

 

(19

)

-100.0

%

 

1

 

100.0

%

Total net (charge-offs) recoveries

$

2,386

 

$

(291

)

$

(3,077

)

$

2,677

 

n/m

 

$

5,463

 

n/m

 

 
(1) Excludes PPP 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
March 31, 2021
($ in thousands)
(unaudited)
 
Quarter Ended
AVERAGE BALANCES 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020
Securities AFS-taxable

$

2,098,089

 

$

1,902,162

 

$

1,857,050

 

$

1,724,320

 

$

1,620,422

 

Securities AFS-nontaxable

 

5,190

 

 

5,206

 

 

5,973

 

 

9,827

 

 

22,056

 

Securities HTM-taxable

 

489,260

 

 

550,563

 

 

608,585

 

 

655,085

 

 

694,740

 

Securities HTM-nontaxable

 

24,070

 

 

24,752

 

 

25,508

 

 

25,538

 

 

25,673

 

Total securities

 

2,616,609

 

 

2,482,683

 

 

2,497,116

 

 

2,414,770

 

 

2,362,891

 

PPP loans

 

598,139

 

 

875,098

 

 

941,456

 

 

764,416

 

 

 

Loans (includes loans held for sale)

 

10,316,319

 

 

10,231,671

 

 

10,162,379

 

 

9,908,132

 

 

9,678,174

 

Fed funds sold and reverse repurchases

 

136

 

 

303

 

 

301

 

 

113

 

 

164

 

Other earning assets

 

1,667,906

 

 

860,540

 

 

722,917

 

 

854,642

 

 

187,327

 

Total earning assets

 

15,199,109

 

 

14,450,295

 

 

14,324,169

 

 

13,942,073

 

 

12,228,556

 

ACL LHFI

 

(119,557

)

 

(124,088

)

 

(121,842

)

 

(103,006

)

 

(85,015

)

Other assets

 

1,601,250

 

 

1,620,694

 

 

1,564,825

 

 

1,685,317

 

 

1,498,725

 

Total assets

$

16,680,802

 

$

15,946,901

 

$

15,767,152

 

$

15,524,384

 

$

13,642,266

 

 
Interest-bearing demand deposits

$

3,743,651

 

$

3,649,590

 

$

3,669,249

 

$

3,832,372

 

$

3,184,134

 

Savings deposits

 

4,659,037

 

 

4,350,783

 

 

4,416,046

 

 

4,180,540

 

 

3,646,936

 

Time deposits

 

1,371,830

 

 

1,436,677

 

 

1,507,348

 

 

1,578,737

 

 

1,617,307

 

Total interest-bearing deposits

 

9,774,518

 

 

9,437,050

 

 

9,592,643

 

 

9,591,649

 

 

8,448,377

 

Fed funds purchased and repurchases

 

166,909

 

 

170,474

 

 

84,077

 

 

105,696

 

 

247,513

 

Other borrowings

 

166,926

 

 

173,525

 

 

167,262

 

 

107,533

 

 

85,279

 

Subordinated notes

 

122,875

 

 

42,828

 

 

 

 

 

 

 

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

Total interest-bearing liabilities

 

10,293,084

 

 

9,885,733

 

 

9,905,838

 

 

9,866,734

 

 

8,843,025

 

Noninterest-bearing deposits

 

4,363,559

 

 

4,100,849

 

 

3,921,867

 

 

3,645,761

 

 

2,910,951

 

Other liabilities

 

264,808

 

 

235,284

 

 

244,544

 

 

346,173

 

 

248,220

 

Total liabilities

 

14,921,451

 

 

14,221,866

 

 

14,072,249

 

 

13,858,668

 

 

12,002,196

 

Shareholders' equity

 

1,759,351

 

 

1,725,035

 

 

1,694,903

 

 

1,665,716

 

 

1,640,070

 

Total liabilities and equity

$

16,680,802

 

$

15,946,901

 

$

15,767,152

 

$

15,524,384

 

$

13,642,266

 

 
See Notes to Consolidated Financials
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2021
($ in thousands)
(unaudited)
 
PERIOD END BALANCES 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020
Cash and due from banks

$

1,774,541

 

$

1,952,504

 

$

564,588

 

$

1,026,640

 

$

404,341

 

Fed funds sold and reverse repurchases

 

 

 

50

 

 

50

 

 

 

 

2,000

 

Securities available for sale

 

2,337,676

 

 

1,991,815

 

 

1,922,728

 

 

1,884,153

 

 

1,833,779

 

Securities held to maturity

 

493,738

 

 

538,072

 

 

611,280

 

 

660,048

 

 

704,276

 

PPP loans

 

679,725

 

 

610,134

 

 

944,270

 

 

939,783

 

 

 

LHFS

 

412,999

 

 

446,951

 

 

485,103

 

 

355,089

 

 

325,389

 

LHFI

 

9,983,704

 

 

9,824,524

 

 

9,847,728

 

 

9,659,806

 

 

9,567,920

 

ACL LHFI

 

(109,191

)

 

(117,306

)

 

(122,010

)

 

(119,188

)

 

(100,564

)

Net LHFI

 

9,874,513

 

 

9,707,218

 

 

9,725,718

 

 

9,540,618

 

 

9,467,356

 

Premises and equipment, net

 

199,098

 

 

194,278

 

 

192,722

 

 

190,567

 

 

190,179

 

Mortgage servicing rights

 

83,035

 

 

66,464

 

 

61,613

 

 

57,811

 

 

56,437

 

Goodwill

 

384,237

 

 

385,270

 

 

385,270

 

 

385,270

 

 

381,717

 

Identifiable intangible assets

 

6,724

 

 

7,390

 

 

8,142

 

 

8,895

 

 

7,537

 

Other real estate

 

10,651

 

 

11,651

 

 

16,248

 

 

18,276

 

 

24,847

 

Operating lease right-of-use assets

 

33,704

 

 

30,901

 

 

30,508

 

 

29,819

 

 

30,839

 

Other assets

 

587,672

 

 

609,142

 

 

609,922

 

 

595,110

 

 

591,132

 

Total assets

$

16,878,313

 

$

16,551,840

 

$

15,558,162

 

$

15,692,079

 

$

14,019,829

 

 
Deposits:
Noninterest-bearing

$

4,705,991

 

$

4,349,010

 

$

3,964,023

 

$

3,880,540

 

$

2,977,058

 

Interest-bearing

 

9,677,449

 

 

9,699,754

 

 

9,258,390

 

 

9,624,933

 

 

8,598,706

 

Total deposits

 

14,383,440

 

 

14,048,764

 

 

13,222,413

 

 

13,505,473

 

 

11,575,764

 

Fed funds purchased and repurchases

 

160,991

 

 

164,519

 

 

153,834

 

 

70,255

 

 

421,821

 

Other borrowings

 

145,994

 

 

168,252

 

 

178,599

 

 

152,860

 

 

84,230

 

Subordinated notes

 

122,877

 

 

122,921

 

 

 

 

 

 

 

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

ACL on off-balance sheet credit exposures

 

29,205

 

 

38,572

 

 

39,659

 

 

42,663

 

 

36,421

 

Operating lease liabilities

 

35,389

 

 

32,290

 

 

31,838

 

 

31,076

 

 

32,055

 

Other liabilities

 

178,856

 

 

173,549

 

 

159,922

 

 

153,952

 

 

155,283

 

Total liabilities

 

15,118,608

 

 

14,810,723

 

 

13,848,121

 

 

14,018,135

 

 

12,367,430

 

Common stock

 

13,209

 

 

13,215

 

 

13,215

 

 

13,214

 

 

13,209

 

Capital surplus

 

229,892

 

 

233,120

 

 

231,836

 

 

230,613

 

 

229,403

 

Retained earnings

 

1,533,110

 

 

1,495,833

 

 

1,459,306

 

 

1,419,552

 

 

1,402,089

 

Accum other comprehensive income (loss), net of tax

 

(16,506

)

 

(1,051

)

 

5,684

 

 

10,565

 

 

7,698

 

Total shareholders' equity

 

1,759,705

 

 

1,741,117

 

 

1,710,041

 

 

1,673,944

 

 

1,652,399

 

Total liabilities and equity

$

16,878,313

 

$

16,551,840

 

$

15,558,162

 

$

15,692,079

 

$

14,019,829

 

 
See Notes to Consolidated Financials
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2021
($ in thousands except per share data)
(unaudited)
 
Quarter Ended
INCOME STATEMENTS 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020
Interest and fees on LHFS & LHFI-FTE

$

93,394

 

$

96,453

 

$

97,429

 

$

99,300

$

109,357

Interest and fees on PPP loans

 

9,241

 

 

14,870

 

 

6,729

 

 

5,044

 

Interest on securities-taxable

 

8,938

 

 

9,998

 

 

12,542

 

 

12,762

 

12,948

Interest on securities-tax exempt-FTE

 

290

 

 

293

 

 

301

 

 

315

 

457

Interest on fed funds sold and reverse repurchases

 

 

 

 

 

1

 

 

 

Other interest income

 

503

 

 

249

 

 

331

 

 

239

 

740

Total interest income-FTE

 

112,366

 

 

121,863

 

 

117,333

 

 

117,660

 

123,502

Interest on deposits

 

5,223

 

 

6,363

 

 

7,437

 

 

8,730

 

14,957

Interest on fed funds purchased and repurchases

 

56

 

 

56

 

 

32

 

 

42

 

625

Other interest expense

 

1,857

 

 

1,127

 

 

688

 

 

881

 

860

Total interest expense

 

7,136

 

 

7,546

 

 

8,157

 

 

9,653

 

16,442

Net interest income-FTE

 

105,230

 

 

114,317

 

 

109,176

 

 

108,007

 

107,060

Provision for credit losses, LHFI

 

(10,501

)

 

(4,413

)

 

1,760

 

 

18,185

 

20,581

Net interest income after provision-FTE

 

115,731

 

 

118,730

 

 

107,416

 

 

89,822

 

86,479

Service charges on deposit accounts

 

7,356

 

 

8,283

 

 

7,577

 

 

6,397

 

10,032

Bank card and other fees

 

9,472

 

 

9,107

 

 

8,843

 

 

7,717

 

5,355

Mortgage banking, net

 

20,804

 

 

28,155

 

 

36,439

 

 

33,745

 

27,483

Insurance commissions

 

12,445

 

 

10,196

 

 

11,562

 

 

11,868

 

11,550

Wealth management

 

8,416

 

 

7,838

 

 

7,679

 

 

7,571

 

8,537

Other, net

 

2,090

 

 

2,538

 

 

1,601

 

 

2,213

 

2,307

Total noninterest income

 

60,583

 

 

66,117

 

 

73,701

 

 

69,511

 

65,264

Salaries and employee benefits

 

71,162

 

 

69,660

 

 

67,342

 

 

66,107

 

69,148

Services and fees

 

22,484

 

 

22,327

 

 

20,992

 

 

20,567

 

19,930

Net occupancy-premises

 

6,795

 

 

6,616

 

 

7,000

 

 

6,587

 

6,286

Equipment expense

 

6,244

 

 

6,213

 

 

5,828

 

 

5,620

 

5,616

Other real estate expense, net

 

324

 

 

(812

)

 

1,203

 

 

271

 

1,294

Credit loss expense related to off-balance sheet credit exposures

 

(9,367

)

 

(1,087

)

 

(3,004

)

 

6,242

 

6,783

Other expense

 

14,539

 

 

15,890

 

 

14,598

 

 

13,265

 

14,753

Total noninterest expense

 

112,181

 

 

118,807

 

 

113,959

 

 

118,659

 

123,810

Income before income taxes and tax eq adj

 

64,133

 

 

66,040

 

 

67,158

 

 

40,674

 

27,933

Tax equivalent adjustment

 

2,894

 

 

2,939

 

 

2,969

 

 

3,007

 

3,108

Income before income taxes

 

61,239

 

 

63,101

 

 

64,189

 

 

37,667

 

24,825

Income taxes

 

9,277

 

 

11,884

 

 

9,749

 

 

5,517

 

2,607

Net income

$

51,962

 

$

51,217

 

$

54,440

 

$

32,150

$

22,218

 
Per share data
Earnings per share - basic

$

0.82

 

$

0.81

 

$

0.86

 

$

0.51

$

0.35

 
Earnings per share - diluted

$

0.82

 

$

0.81

 

$

0.86

 

$

0.51

$

0.35

 
Dividends per share

$

0.23

 

$

0.23

 

$

0.23

 

$

0.23

$

0.23

 
Weighted average shares outstanding
Basic

 

63,395,911

 

 

63,424,219

 

 

63,422,692

 

 

63,416,307

 

63,756,629

 
Diluted

 

63,562,503

 

 

63,616,767

 

 

63,581,964

 

 

63,555,065

 

63,913,603

 
Period end shares outstanding

 

63,394,522

 

 

63,424,526

 

 

63,423,820

 

 

63,422,439

 

63,396,912

 
See Notes to Consolidated Financials
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2021
($ in thousands)
(unaudited)
 
Quarter Ended
NONPERFORMING ASSETS (1) 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020
Nonaccrual LHFI
Alabama

$

9,161

 

$

9,221

 

$

3,860

 

$

4,392

 

$

4,769

 

Florida

 

607

 

 

572

 

 

617

 

 

687

 

 

254

 

Mississippi (2)

 

35,534

 

 

35,015

 

 

35,617

 

 

37,884

 

 

40,815

 

Tennessee (3)

 

12,451

 

 

12,572

 

 

13,041

 

 

6,125

 

 

6,153

 

Texas

 

5,761

 

 

5,748

 

 

721

 

 

906

 

 

1,001

 

Total nonaccrual LHFI

 

63,514

 

 

63,128

 

 

53,856

 

 

49,994

 

 

52,992

 

Other real estate
Alabama

 

3,085

 

 

3,271

 

 

3,725

 

 

4,766

 

 

6,229

 

Florida

 

 

 

 

 

3,665

 

 

3,665

 

 

4,835

 

Mississippi (2)

 

7,566

 

 

8,330

 

 

8,718

 

 

9,408

 

 

13,296

 

Tennessee (3)

 

 

 

50

 

 

140

 

 

437

 

 

487

 

Texas

 

 

 

 

 

 

 

 

 

 

Total other real estate

 

10,651

 

 

11,651

 

 

16,248

 

 

18,276

 

 

24,847

 

Total nonperforming assets

$

74,165

 

$

74,779

 

$

70,104

 

$

68,270

 

$

77,839

 

 
LOANS PAST DUE OVER 90 DAYS (1)
LHFI

$

2,593

 

$

1,576

 

$

782

 

$

807

 

$

708

 

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

$

109,566

 

$

119,409

 

$

121,281

 

$

56,269

 

$

43,564

 

 
 
Quarter Ended
ACL LHFI (1) 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020
Beginning Balance

$

117,306

 

$

122,010

 

$

119,188

 

$

100,564

 

$

84,277

 

CECL adoption adjustments:
LHFI

 

 

 

 

 

 

 

 

 

(3,039

)

Acquired loan transfers

 

 

 

 

 

 

 

 

 

1,822

 

Provision for credit losses

 

(10,501

)

 

(4,413

)

 

1,760

 

 

18,185

 

 

20,581

 

Charge-offs

 

(1,245

)

 

(2,797

)

 

(1,263

)

 

(1,870

)

 

(5,545

)

Recoveries

 

3,631

 

 

2,506

 

 

2,325

 

 

2,309

 

 

2,468

 

Net (charge-offs) recoveries

 

2,386

 

 

(291

)

 

1,062

 

 

439

 

 

(3,077

)

Ending Balance

$

109,191

 

$

117,306

 

$

122,010

 

$

119,188

 

$

100,564

 

 
NET (CHARGE-OFFS) RECOVERIES (1)
Alabama

$

102

 

$

(1,011

)

$

117

 

$

526

 

$

(1,080

)

Florida

 

30

 

 

66

 

 

387

 

 

(127

)

 

64

 

Mississippi (2)

 

2,207

 

 

332

 

 

442

 

 

(86

)

 

126

 

Tennessee (3)

 

47

 

 

303

 

 

42

 

 

66

 

 

(2,186

)

Texas

 

 

 

19

 

 

74

 

 

60

 

 

(1

)

Total net (charge-offs) recoveries

$

2,386

 

$

(291

)

$

1,062

 

$

439

 

$

(3,077

)

 
(1) Excludes PPP loans.
(2) Mississippi includes Central and Southern Mississippi Regions.
(3) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.
 
See Notes to Consolidated Financials
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2021
(unaudited)
Quarter Ended
FINANCIAL RATIOS AND OTHER DATA 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020
Return on average equity

 

11.98

%

 

11.81

%

 

12.78

%

 

7.76

%

 

5.45

%

Return on average tangible equity

 

15.56

%

 

15.47

%

 

16.82

%

 

10.32

%

 

7.34

%

Return on average assets

 

1.26

%

 

1.28

%

 

1.37

%

 

0.83

%

 

0.66

%

Interest margin - Yield - FTE

 

3.00

%

 

3.35

%

 

3.26

%

 

3.39

%

 

4.06

%

Interest margin - Cost

 

0.19

%

 

0.21

%

 

0.23

%

 

0.28

%

 

0.54

%

Net interest margin - FTE

 

2.81

%

 

3.15

%

 

3.03

%

 

3.12

%

 

3.52

%

Efficiency ratio (1)

 

71.84

%

 

65.59

%

 

62.19

%

 

62.13

%

 

63.50

%

Full-time equivalent employees

 

2,793

 

 

2,797

 

 

2,807

 

 

2,798

 

 

2,761

 

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

 

-0.09

%

 

0.01

%

 

-0.04

%

 

-0.02

%

 

0.13

%

Provision for credit losses / average loans

 

-0.41

%

 

-0.17

%

 

0.07

%

 

0.74

%

 

0.86

%

Nonaccrual LHFI / (LHFI + LHFS)

 

0.61

%

 

0.61

%

 

0.52

%

 

0.50

%

 

0.54

%

Nonperforming assets / (LHFI + LHFS)

 

0.71

%

 

0.73

%

 

0.68

%

 

0.68

%

 

0.79

%

Nonperforming assets / (LHFI + LHFS + other real estate)

 

0.71

%

 

0.73

%

 

0.68

%

 

0.68

%

 

0.78

%

ACL LHFI / LHFI

 

1.09

%

 

1.19

%

 

1.24

%

 

1.23

%

 

1.05

%

ACL LHFI-commercial / commercial LHFI

 

1.13

%

 

1.20

%

 

1.20

%

 

1.15

%

 

0.97

%

ACL LHFI-consumer / consumer and home mortgage LHFI

 

0.95

%

 

1.16

%

 

1.41

%

 

1.56

%

 

1.35

%

ACL LHFI / nonaccrual LHFI

 

171.92

%

 

185.82

%

 

226.55

%

 

238.40

%

 

189.77

%

ACL LHFI / nonaccrual LHFI (excl individually evaluated loans)

 

437.08

%

 

572.69

%

 

593.72

%

 

561.04

%

 

468.84

%

 
CAPITAL RATIOS
Total equity / total assets

 

10.43

%

 

10.52

%

 

10.99

%

 

10.67

%

 

11.79

%

Tangible equity / tangible assets

 

8.30

%

 

8.34

%

 

8.68

%

 

8.37

%

 

9.27

%

Tangible equity / risk-weighted assets

 

11.23

%

 

11.22

%

 

11.01

%

 

11.09

%

 

11.05

%

Tier 1 leverage ratio

 

9.11

%

 

9.33

%

 

9.20

%

 

9.08

%

 

10.21

%

Common equity tier 1 capital ratio

 

11.71

%

 

11.62

%

 

11.36

%

 

11.42

%

 

11.35

%

Tier 1 risk-based capital ratio

 

12.20

%

 

12.11

%

 

11.86

%

 

11.94

%

 

11.88

%

Total risk-based capital ratio

 

14.07

%

 

14.12

%

 

12.88

%

 

13.00

%

 

12.78

%

 
STOCK PERFORMANCE
Market value-Close

$

33.66

 

$

27.31

 

$

21.41

 

$

24.52

 

$

23.30

 

Book value

$

27.76

 

$

27.45

 

$

26.96

 

$

26.39

 

$

26.06

 

Tangible book value

$

21.59

 

$

21.26

 

$

20.76

 

$

20.18

 

$

19.92

 

 
(1) See Note 8 – Non-GAAP Financial Measures in the Notes to Consolidated Financials for Trustmark’s efficiency ratio calculation.
(2) Excludes PPP loans.
 
See Notes to Consolidated Financials
 

TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
March 31, 2021
($ in thousands)
(unaudited)

Note 1 - Paycheck Protection Program

In January 2021, Trustmark began submitting applications to the SBA on behalf of and originating loans to qualified small businesses under the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), as amended by the Consolidated Appropriations Act, 2021. During the first quarter of 2021, Trustmark originated 4,774 PPP loans totaling $301.5 million (net of $16.5 million of deferred fees and costs). At March 31, 2021, Trustmark had 7,456 PPP loans outstanding that totaled $679.7 million (net of $22.1 million of deferred fees and costs) under the CARES Act.

Due to amount and nature of the PPP loans, these loans were not included in the LHFI portfolio and are presented separately in the accompanying consolidated balance sheets. The PPP loans are fully guaranteed by the SBA; therefore, no ACL was estimated for these loans.

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:

 

 

 

3/31/2021

 

 

12/31/2020

 

 

9/30/2020

 

 

6/30/2020

 

 

3/31/2020

 

SECURITIES AVAILABLE FOR SALE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government agency obligations

 

$

17,349

 

 

$

18,041

 

 

$

19,011

 

 

$

19,898

 

 

$

21,190

 

Obligations of states and political subdivisions

 

 

5,798

 

 

 

5,835

 

 

 

8,315

 

 

 

11,176

 

 

 

23,572

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage pass-through securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Guaranteed by GNMA

 

 

52,406

 

 

 

56,862

 

 

 

62,156

 

 

 

69,637

 

 

 

71,971

 

Issued by FNMA and FHLMC

 

 

1,749,144

 

 

 

1,441,321

 

 

 

1,279,919

 

 

 

1,121,604

 

 

 

967,329

 

Other residential mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by FNMA, FHLMC, or GNMA

 

 

345,869

 

 

 

419,437

 

 

 

500,858

 

 

 

574,940

 

 

 

634,075

 

Commercial mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by FNMA, FHLMC, or GNMA

 

 

167,110

 

 

 

50,319

 

 

 

52,469

 

 

 

86,898

 

 

 

115,642

 

Total securities available for sale

 

$

2,337,676

 

 

$

1,991,815

 

 

$

1,922,728

 

 

$

1,884,153

 

 

$

1,833,779

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SECURITIES HELD TO MATURITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of states and political subdivisions

 

$

26,554

 

 

$

26,584

 

 

$

31,605

 

 

$

31,629

 

 

$

31,758

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage pass-through securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Guaranteed by GNMA

 

 

7,268

 

 

 

7,598

 

 

 

8,244

 

 

 

10,306

 

 

 

10,492

 

Issued by FNMA and FHLMC

 

 

61,855

 

 

 

67,944

 

 

 

78,213

 

 

 

86,346

 

 

 

91,971

 

Other residential mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by FNMA, FHLMC, or GNMA

 

 

324,360

 

 

 

360,361

 

 

 

399,400

 

 

 

435,333

 

 

 

463,175

 

Commercial mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by FNMA, FHLMC, or GNMA

 

 

73,701

 

 

 

75,585

 

 

 

93,818

 

 

 

96,434

 

 

 

106,880

 

Total securities held to maturity

 

$

493,738

 

 

$

538,072

 

 

$

611,280

 

 

$

660,048

 

 

$

704,276

 

 

At March 31, 2021, the net unamortized, unrealized loss included in accumulated other comprehensive income (loss) in the accompanying balance sheet for securities held to maturity previously transferred from securities available for sale totaled approximately $8.2 million ($6.2 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 98.0% 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.

Note 3 – Loan Composition

LHFI consisted of the following during the periods presented:

 

LHFI BY TYPE

 

3/31/2021

 

 

12/31/2020

 

 

9/30/2020

 

 

6/30/2020

 

 

3/31/2020

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development and other land loans

 

$

1,342,088

 

 

$

1,309,039

 

 

$

1,385,947

 

 

$

1,277,277

 

 

$

1,136,389

 

Secured by 1-4 family residential properties

 

 

1,742,782

 

 

 

1,741,132

 

 

 

1,775,400

 

 

 

1,813,525

 

 

 

1,852,065

 

Secured by nonfarm, nonresidential properties

 

 

2,799,195

 

 

 

2,709,026

 

 

 

2,707,627

 

 

 

2,610,392

 

 

 

2,575,422

 

Other real estate secured