Completed Significant Actions to Increase
Earnings, Enhance Profitability Profile, Reduce Risk, and
Strengthen Capital Flexibility
Trustmark Corporation (NASDAQGS:TRMK) announced second quarter
financial results which reflect the previously disclosed sale of
Fisher Brown Bottrell Insurance, Inc. (FBBI). As such, second
quarter financial results consist of both continuing operations and
discontinued operations. The discontinued operations include the
financial results of FBBI prior to the sale as well as the gain on
sale in the second quarter. The discontinued operations results are
presented as a single line item below income from continuing
operations in the accompanying tables for all periods presented.
Financial results from adjusted continuing operations exclude
significant non-routine transactions(1). Trustmark reported net
income of $73.8 million in the second quarter of 2024, representing
diluted earnings per share of $1.20 and net income from adjusted
continuing operations(1) of $40.5 million, or $0.66 per diluted
share.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20240723250620/en/
Printer friendly version of earnings release with consolidated
financial statements and notes:
https://www.businesswire.com/news/home/54097962/en.
The Board of Directors declared a quarterly cash dividend of
$0.23 per share payable September 15, 2024, to shareholders of
record on September 1, 2024.
Significant Non-Routine Transactions in the Second
Quarter
- Completed sale of FBBI, producing a gain on sale of $228.3
million ($171.2 million, net of taxes)
- Restructured investment securities portfolio; sold available
for sale securities of $1.6 billion with an average yield of 1.36%,
which generated a loss of $182.8 million ($137.1 million, net of
taxes); purchased $1.4 billion of available for sale securities
with an average yield of 4.85%
- Sold a portfolio of 1-4 family mortgage loans that were three
payments delinquent and/or nonaccrual at time of selection totaling
$56.2 million (Mortgage Loan Sale) which generated a loss of $13.4
million ($10.1 million, net of taxes); sale drove a $54.1 million
reduction in nonperforming loans
- Exchanged Visa Class B-1 shares for Visa Class B-2 shares and
Visa Class C common stock; Visa Class C stock exchange resulted in
a gain of $8.1 million ($6.0 million, net of taxes)
Second Quarter Highlights
- Loans held for investment (HFI) increased $97.5 million, or
0.7%, from the prior quarter to $13.2 billion; excluding the
Mortgage Loan Sale, loans HFI increased $152.4 million, or 1.2%,
linked-quarter
- Deposits expanded $124.3 million, or 0.8%, linked-quarter to
$15.5 billion
- Net interest income (FTE) increased $8.1 million, or 6.0%,
linked-quarter to $144.3 million, resulting in a net interest
margin of 3.38%, up 17 basis points from the prior quarter
- Noninterest expense totaled $118.3 million, down $1.3 million,
or 1.1%, linked-quarter
- Tangible equity to tangible assets ratio increased 105 basis
points to 8.52% at June 30, 2024
- Tangible book value per share increased $3.20, or 14.5%, to
$25.23 at June 30, 2024
Duane A. Dewey, President and CEO, stated, “The second quarter
of 2024 was an extremely productive quarter for Trustmark. We
closed the previously announced sale of our insurance agency and
completed significant balance sheet restructuring to position the
company for improved operating performance into the second half of
the year and beyond. While completing these non-recurring events,
we also performed well in our core banking franchise with continued
loan growth, deposit growth, solid fee income and disciplined
expense management. The commitment and dedication of our associates
across the organization to successfully meet our clients’ financial
needs and execute the one-time projects are outstanding, and we
believe the company is very well positioned for future
opportunities.”
Balance Sheet Management
- Loans HFI totaled $13.2 billion, up 0.7% from the prior quarter
and 4.3% year-over-year
- Deposits totaled $15.5 billion, up 0.8% from the previous
quarter and 3.7% year-over-year
- Enhanced strong capital position with CET1 ratio of 10.92% and
total risk-based capital ratio of 13.29%
Loans HFI totaled $13.2 billion at June 30, 2024, reflecting an
increase of $97.5 million, or 0.7%, linked-quarter and $541.5
million, or 4.3%, year-over-year. The linked quarter growth
reflected increases in construction, development and other land
loans, loans secured by nonfarm, nonresidential properties, and
other loans and leases offset in part by declines in commercial and
industrial loans, other real estate secured loans, and 1-4 family
mortgage loans. Trustmark’s loan portfolio continues to be
well-diversified by loan type and geography.
Deposits totaled $15.5 billion at June 30, 2024, up $124.3
million, or 0.8%, from the prior quarter and $549.0 million, or
3.7%, year-over-year. Trustmark continues to maintain a strong
liquidity position as loans HFI represented 85.1% of total deposits
at June 30, 2024. Noninterest-bearing deposits represented 20.4% of
total deposits at June 30, 2024, compared to 19.8% at March 31,
2024. The cost of interest-bearing deposits increased 1 basis point
to 2.75% for the second quarter, while the cost of total deposits
was 2.18%, unchanged from the prior quarter. The total cost of
interest-bearing liabilities was 2.95% for the second quarter, up 3
basis points linked-quarter.
During the second quarter, Trustmark did not repurchase any of
its outstanding common shares. As previously announced, Trustmark’s
Board of Directors authorized a stock repurchase program effective
January 1, 2024, under which $50.0 million of Trustmark’s
outstanding shares may be acquired through December 31, 2024. As of
June 30, 2024, Trustmark had not repurchased any of its outstanding
common shares under this program. At June 30, 2024, Trustmark’s
tangible equity to tangible assets ratio was 8.52%, up 105 basis
points from the prior quarter, while the total risk-based capital
ratio was 13.29%, up 87 basis points from the prior quarter.
Tangible book value per share was $25.23 at June 30, 2024, an
increase of 14.5% from the prior quarter and 24.7% from the prior
year.
Credit Quality
- Nonaccrual loans declined 55.0% linked-quarter to $44.3
million, driven by the Mortgage Loan Sale
- Net charge-offs totaled $11.6 million for the second quarter;
excluding the Mortgage Loan Sale, net charge-offs totaled $3.0
million and represented 0.09% of average loans
- Allowance for credit losses (ACL) represented 1.18% of loans
HFI and 840.20% of nonaccrual loans HFI, excluding individually
analyzed loans, at June 30, 2024
Nonaccrual loans totaled $44.3 million at June 30, 2024, down
$54.1 million from the prior quarter and $30.7 million
year-over-year. Other real estate totaled $6.6 million, reflecting
a decrease of $1.0 million from the prior quarter and an increase
of $5.4 million from the prior year. Collectively, nonperforming
assets totaled $50.9 million at June 30, 2024, down $55.1 million,
or 52.0%, from the prior quarter and $25.3 million, or 33.2%, from
the prior year.
The total provision for credit losses for loans HFI was $23.3
million in the second quarter. Excluding the Mortgage Loan Sale,
the provision for credit losses for loans HFI was $14.7 million and
was primarily attributable to credit migration. The provision for
credit losses for off-balance sheet credit exposures was a negative
$3.6 million, primarily driven by decreases in unfunded
commitments. Collectively, the provision for credit losses,
excluding the Mortgage Loan Sale, totaled $11.1 million in the
second quarter compared to $7.5 million from the prior quarter and
$8.5 million in the second quarter of 2023.
Allocation of Trustmark’s $154.7 million ACL on loans HFI
represented 1.05% of commercial loans and 1.59% of consumer and
home mortgage loans, resulting in an ACL to total loans HFI of
1.18% at June 30, 2024. Management believes the level of the ACL is
commensurate with the credit losses currently expected in the loan
portfolio.
Revenue Generation
- Net interest income (FTE) totaled $144.3 million in the second
quarter, up 6.0% linked-quarter
- GAAP noninterest income was negative $141.3 million in the
second quarter while noninterest income from adjusted continuing
operations(1) totaled $38.2 million and represented 21.3% of total
revenue from adjusted continuing operations(1)
- GAAP revenue was negative $0.3 million in the second quarter
while revenue from adjusted continuing operations(1) totaled $179.3
million, up $7.1 million, or 4.1%, linked-quarter
Revenue from adjusted continuing operations(1) in the second
quarter totaled $179.3 million, an increase of $7.1 million, or
4.1%, from the prior quarter and $1.5 million, or 0.9%, from the
same quarter in the prior year. The linked-quarter increase
primarily reflects higher net interest income and solid growth in
bank card and other fees and wealth management revenue.
Net interest income (FTE) in the second quarter totaled $144.3
million, resulting in a net interest margin of 3.38%, up 17 basis
points from the prior quarter. The increase in the net interest
margin was primarily due to increased yields on the securities
portfolio and the loans HFI and held for sale portfolio as well as
the costs of interest-bearing deposits remaining relatively
flat.
Noninterest income from adjusted continuing operations(1) in the
second quarter totaled $38.2 million, a decrease of $1.1 million,
or 2.8%, from the prior quarter and an increase of $0.4 million, or
1.1%, year-over-year. Bank card and other fees totaled $9.2 million
in the second quarter, up $1.8 million, or 24.2%, linked-quarter
and $0.3 million, or 3.5%, year-over-year. The linked-quarter
increase reflects expanded customer derivative revenue, interchange
revenue, and miscellaneous other revenue. Service charges on
deposit accounts totaled $10.9 million in the second quarter,
relatively unchanged from the prior quarter and up $0.2 million, or
2.1%, year-over-year. Other, net totaled $7.5 million, up $4.4
million linked-quarter as the $8.1 million gain from Visa C
exchange was offset in part by the $4.8 million in
noncredit-related loss from the Mortgage Loan Sale. Other, net from
adjusted continuing operations(1) totaled $4.2 million, an increase
of $1.1 million, or 35.5%, from the prior quarter.
Mortgage loan production in the second quarter totaled $379.5
million, an increase of 38.5% from the prior quarter and a decrease
of 12.0% year-over-year. Mortgage banking revenue totaled $4.2
million in the second quarter, a decrease of $4.7 million
linked-quarter and $2.4 million year-over-year. The linked-quarter
decrease was principally attributable to increased net negative
hedge ineffectiveness, which was driven by a higher assumed
discount rate on servicing cash flows.
Wealth management revenue in the second quarter totaled $9.7
million, an increase of $0.7 million, or 8.3%, from the prior
quarter and $0.8 million, or 9.1%, year-over-year. The
linked-quarter growth reflected increased investment services and
trust management revenue while the year-over-year increase
reflected expanded brokerage revenue.
Noninterest Expense
- Noninterest expense declined $1.3 million, or 1.1%,
linked-quarter
- Salary and employee benefit expense declined $0.6 million, or
1.0%, linked-quarter
Noninterest expense in the second quarter totaled $118.3
million, a decrease of $1.3 million, or 1.1%, when compared to the
prior quarter. Salaries and employee benefits expense decreased
$0.6 million, or 1.0%, linked-quarter principally due to reduced
compensation expense and the seasonal decline in payroll taxes,
which were partially offset by increased commission expense. Other
expense declined $0.9 million, or 5.6%, linked-quarter.
(1) Please refer to Consolidated Financial Information, Note 1 –
Significant Non-Routine Transactions and Note 7 – Non-GAAP
Financial Measures.
Additional Information
As previously announced, Trustmark will conduct a conference
call with analysts on Wednesday, July 24, 2024, 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, August 7, 2024, in archived format at the same web
address or by calling (877) 344-7529, passcode 4456612.
Trustmark is a financial services company providing banking and
financial solutions through offices in Alabama, Florida, Georgia,
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
(SEC) 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,
actions by the Board of Governors of the Federal Reserve System
(FRB) that impact the level of market interest rates, local, state,
national and international 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, changes in the
level of nonperforming assets and charge-offs, an increase in
unemployment levels and slowdowns in economic growth, 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 impacts related to or resulting from bank failures and
other economic and industry volatility, including potential
increased regulatory requirements, the demand for the products and
services we offer, potential unexpected adverse outcomes in pending
litigation matters, our ability to attract and retain
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, 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, 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 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 June 30, 2024 ($ in
thousands) (unaudited) Linked Quarter Year
over Year QUARTERLY AVERAGE
BALANCES 6/30/2024 3/31/2024
6/30/2023 $ Change % Change $ Change
% Change Securities AFS-taxable
$
1,866,227
$
1,927,619
$
2,140,505
$
(61,392
)
-3.2
%
$
(274,278
)
-12.8
%
Securities AFS-nontaxable
—
—
4,796
—
n/m
(4,796
)
-100.0
%
Securities HTM-taxable
1,421,246
1,418,476
1,463,086
2,770
0.2
%
(41,840
)
-2.9
%
Securities HTM-nontaxable
112
340
1,718
(228
)
-67.1
%
(1,606
)
-93.5
%
Total securities
3,287,585
3,346,435
3,610,105
(58,850
)
-1.8
%
(322,520
)
-8.9
%
Loans (includes loans held for sale)
13,309,127
13,169,805
12,732,057
139,322
1.1
%
577,070
4.5
%
Fed funds sold and reverse repurchases
110
114
3,275
(4
)
-3.5
%
(3,165
)
-96.6
%
Other earning assets
592,625
571,215
903,027
21,410
3.7
%
(310,402
)
-34.4
%
Total earning assets
17,189,447
17,087,569
17,248,464
101,878
0.6
%
(59,017
)
-0.3
%
Allowance for credit losses (ACL), loans held
for investment (LHFI)
(143,245
)
(138,711
)
(121,960
)
(4,534
)
-3.3
%
(21,285
)
-17.5
%
Other assets
1,740,307
1,730,521
1,648,583
9,786
0.6
%
91,724
5.6
%
Total assets
$
18,786,509
$
18,679,379
$
18,775,087
$
107,130
0.6
%
$
11,422
0.1
%
Interest-bearing demand deposits
$
5,222,369
$
5,291,779
$
4,803,737
$
(69,410
)
-1.3
%
$
418,632
8.7
%
Savings deposits
3,653,966
3,686,027
4,002,134
(32,061
)
-0.9
%
(348,168
)
-8.7
%
Time deposits
3,346,046
3,321,601
2,335,752
24,445
0.7
%
1,010,294
43.3
%
Total interest-bearing deposits
12,222,381
12,299,407
11,141,623
(77,026
)
-0.6
%
1,080,758
9.7
%
Fed funds purchased and repurchases
434,760
428,127
389,834
6,633
1.5
%
44,926
11.5
%
Other borrowings
534,350
463,459
1,330,010
70,891
15.3
%
(795,660
)
-59.8
%
Subordinated notes
123,556
123,501
123,337
55
0.0
%
219
0.2
%
Junior subordinated debt securities
61,856
61,856
61,856
—
0.0
%
—
0.0
%
Total interest-bearing liabilities
13,376,903
13,376,350
13,046,660
553
0.0
%
330,243
2.5
%
Noninterest-bearing deposits
3,183,524
3,120,566
3,595,927
62,958
2.0
%
(412,403
)
-11.5
%
Other liabilities
498,593
505,942
552,209
(7,349
)
-1.5
%
(53,616
)
-9.7
%
Total liabilities
17,059,020
17,002,858
17,194,796
56,162
0.3
%
(135,776
)
-0.8
%
Shareholders' equity
1,727,489
1,676,521
1,580,291
50,968
3.0
%
147,198
9.3
%
Total liabilities and equity
$
18,786,509
$
18,679,379
$
18,775,087
$
107,130
0.6
%
$
11,422
0.1
%
n/m - percentage changes greater than +/- 100% are
considered not meaningful
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED
FINANCIAL INFORMATION June 30, 2024 ($ in
thousands) (unaudited) Linked Quarter Year
over Year PERIOD END
BALANCES 6/30/2024 3/31/2024
6/30/2023 $ Change % Change $ Change
% Change Cash and due from banks
$
822,141
$
606,061
$
831,852
$
216,080
35.7
%
$
(9,711
)
-1.2
%
Securities available for sale
1,621,659
1,702,299
1,871,883
(80,640
)
-4.7
%
(250,224
)
-13.4
%
Securities held to maturity
1,380,487
1,415,025
1,458,665
(34,538
)
-2.4
%
(78,178
)
-5.4
%
Loans held for sale (LHFS)
185,698
172,937
181,094
12,761
7.4
%
4,604
2.5
%
Loans held for investment (LHFI)
13,155,418
13,057,943
12,613,967
97,475
0.7
%
541,451
4.3
%
ACL LHFI
(154,685
)
(142,998
)
(129,298
)
(11,687
)
-8.2
%
(25,387
)
-19.6
%
Net LHFI
13,000,733
12,914,945
12,484,669
85,788
0.7
%
516,064
4.1
%
Premises and equipment, net
232,681
232,630
227,293
51
0.0
%
5,388
2.4
%
Mortgage servicing rights
136,658
138,044
134,350
(1,386
)
-1.0
%
2,308
1.7
%
Goodwill
334,605
334,605
334,605
—
0.0
%
—
0.0
%
Identifiable intangible assets
181
208
303
(27
)
-13.0
%
(122
)
-40.3
%
Other real estate
6,586
7,620
1,137
(1,034
)
-13.6
%
5,449
n/m
Operating lease right-of-use assets
36,925
34,324
35,561
2,601
7.6
%
1,364
3.8
%
Other assets
694,133
744,821
783,457
(50,688
)
-6.8
%
(89,324
)
-11.4
%
Assets of discontinued operations
—
73,093
77,757
(73,093
)
-100.0
%
(77,757
)
-100.0
%
Total assets
$
18,452,487
$
18,376,612
$
18,422,626
$
75,875
0.4
%
$
29,861
0.2
%
Deposits: Noninterest-bearing
$
3,153,506
$
3,039,652
$
3,461,073
$
113,854
3.7
%
$
(307,567
)
-8.9
%
Interest-bearing
12,309,382
12,298,905
11,452,827
10,477
0.1
%
856,555
7.5
%
Total deposits
15,462,888
15,338,557
14,913,900
124,331
0.8
%
548,988
3.7
%
Fed funds purchased and repurchases
314,121
393,215
311,179
(79,094
)
-20.1
%
2,942
0.9
%
Other borrowings
336,687
482,027
1,056,714
(145,340
)
-30.2
%
(720,027
)
-68.1
%
Subordinated notes
123,592
123,537
123,372
55
0.0
%
220
0.2
%
Junior subordinated debt securities
61,856
61,856
61,856
—
0.0
%
—
0.0
%
ACL on off-balance sheet credit exposures
30,265
33,865
34,841
(3,600
)
-10.6
%
(4,576
)
-13.1
%
Operating lease liabilities
40,517
37,792
38,172
2,725
7.2
%
2,345
6.1
%
Other liabilities
203,420
207,583
299,481
(4,163
)
-2.0
%
(96,061
)
-32.1
%
Liabilities of discontinued operations
—
15,581
11,918
(15,581
)
-100.0
%
(11,918
)
-100.0
%
Total liabilities
16,573,346
16,694,013
16,851,433
(120,667
)
-0.7
%
(278,087
)
-1.7
%
Common stock
12,753
12,747
12,724
6
0.0
%
29
0.2
%
Capital surplus
161,834
160,521
156,834
1,313
0.8
%
5,000
3.2
%
Retained earnings
1,796,111
1,736,485
1,667,339
59,626
3.4
%
128,772
7.7
%
Accumulated other comprehensive income (loss), net of tax
(91,557
)
(227,154
)
(265,704
)
135,597
59.7
%
174,147
65.5
%
Total shareholders' equity
1,879,141
1,682,599
1,571,193
196,542
11.7
%
307,948
19.6
%
Total liabilities and equity
$
18,452,487
$
18,376,612
$
18,422,626
$
75,875
0.4
%
$
29,861
0.2
%
n/m - percentage changes greater than +/- 100% are
considered not meaningful
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED
FINANCIAL INFORMATION June 30, 2024 ($ in thousands
except per share amounts) (unaudited) Quarter
Ended Linked Quarter Year over Year
INCOME STATEMENTS
6/30/2024 3/31/2024 6/30/2023 $ Change
% Change $ Change % Change Interest and fees
on LHFS & LHFI-FTE
$
216,399
$
209,456
$
192,941
$
6,943
3.3
%
$
23,458
12.2
%
Interest on securities-taxable
17,929
15,634
16,779
2,295
14.7
%
1,150
6.9
%
Interest on securities-tax exempt-FTE
1
4
69
(3
)
-75.0
%
(68
)
-98.6
%
Interest on fed funds sold and reverse repurchases
2
1
45
1
100.0
%
(43
)
-95.6
%
Other interest income
8,124
8,110
12,077
14
0.2
%
(3,953
)
-32.7
%
Total interest income-FTE
242,455
233,205
221,911
9,250
4.0
%
20,544
9.3
%
Interest on deposits
83,681
83,716
54,409
(35
)
0.0
%
29,272
53.8
%
Interest on fed funds purchased and repurchases
5,663
5,591
4,865
72
1.3
%
798
16.4
%
Other interest expense
8,778
7,703
19,350
1,075
14.0
%
(10,572
)
-54.6
%
Total interest expense
98,122
97,010
78,624
1,112
1.1
%
19,498
24.8
%
Net interest income-FTE
144,333
136,195
143,287
8,138
6.0
%
1,046
0.7
%
Provision for credit losses (PCL), LHFI
14,696
7,708
8,211
6,988
90.7
%
6,485
79.0
%
PCL, off-balance sheet credit exposures
(3,600
)
(192
)
245
(3,408
)
n/m
(3,845
)
n/m
PCL, LHFI sale of 1-4 family mortgage loans
8,633
—
—
8,633
n/m
8,633
n/m
Net interest income after provision-FTE
124,604
128,679
134,831
(4,075
)
3.2
%
(10,227
)
-7.6
%
Service charges on deposit accounts
10,924
10,958
10,695
(34
)
-0.3
%
229
2.1
%
Bank card and other fees
9,225
7,428
8,917
1,797
24.2
%
308
3.5
%
Mortgage banking, net
4,204
8,915
6,600
(4,711
)
-52.8
%
(2,396
)
-36.3
%
Wealth management
9,692
8,952
8,882
740
8.3
%
810
9.1
%
Other, net
7,461
3,102
2,735
4,359
n/m
4,726
n/m
Securities gains (losses), net
(182,792
)
—
—
(182,792
)
n/m
(182,792
)
n/m
Total noninterest income (loss)
(141,286
)
39,355
37,829
(180,641
)
n/m
(179,115
)
n/m
Salaries and employee benefits
64,838
65,487
66,799
(649
)
-1.0
%
(1,961
)
-2.9
%
Services and fees
24,743
24,431
27,821
312
1.3
%
(3,078
)
-11.1
%
Net occupancy-premises
7,265
7,270
6,897
(5
)
-0.1
%
368
5.3
%
Equipment expense
6,241
6,325
6,337
(84
)
-1.3
%
(96
)
-1.5
%
Other expense
15,239
16,151
13,767
(912
)
-5.6
%
1,472
10.7
%
Total noninterest expense
118,326
119,664
121,621
(1,338
)
-1.1
%
(3,295
)
-2.7
%
Income (loss) from continuing operations before income
taxes and tax eq adj
(135,008
)
48,370
51,039
(183,378
)
n/m
(186,047
)
n/m
Tax equivalent adjustment
3,304
3,365
3,383
(61
)
-1.8
%
(79
)
-2.3
%
Income (loss) from continuing operations before income
taxes
(138,312
)
45,005
47,656
(183,317
)
n/m
(185,968
)
n/m
Income taxes from continuing operations
(37,707
)
6,832
6,452
(44,539
)
n/m
(44,159
)
n/m
Income (loss) from continuing operations
(100,605
)
38,173
41,204
(138,778
)
n/m
(141,809
)
n/m
Income from discontinued operations (discont. ops) before
income taxes
232,640
4,512
5,127
228,128
n/m
227,513
n/m
Income taxes from discont. ops
58,203
1,150
1,294
57,053
n/m
56,909
n/m
Income from discont. ops
174,437
3,362
3,833
171,075
n/m
170,604
n/m
Net income
$
73,832
$
41,535
$
45,037
$
32,297
77.8
%
$
28,795
63.9
%
Per share data (1) Basic earnings (loss) per share
from continuing operations
$
(1.64
)
$
0.62
$
0.67
$
(2.26
)
n/m
$
(2.31
)
n/m
Basic earnings per share from discont. ops
$
2.85
$
0.05
$
0.06
$
2.80
n/m
$
2.79
n/m
Basic earnings per share - total
$
1.21
$
0.68
$
0.74
$
0.53
77.9
%
$
0.47
63.5
%
Diluted earnings (loss) per share from continuing
operations
$
(1.64
)
$
0.62
$
0.67
$
(2.26
)
n/m
$
(2.31
)
n/m
Diluted earnings per share from discont. ops
$
2.84
$
0.05
$
0.06
$
2.79
n/m
$
2.78
n/m
Diluted earnings per share - total
$
1.20
$
0.68
$
0.74
$
0.52
76.5
%
$
0.46
62.2
%
Dividends per share
$
0.23
$
0.23
$
0.23
—
0.0
%
—
0.0
%
Weighted average shares outstanding Basic
61,196,820
61,128,425
61,063,277
Diluted
61,415,957
61,348,364
61,230,031
Period end shares outstanding
61,205,969
61,178,366
61,069,036
(1) Due to rounding, earnings (loss) per share from
continuing operations and discontinued operations may not sum to
earnings per share from net income. n/m - percentage changes
greater than +/- 100% are considered not meaningful
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED
FINANCIAL INFORMATION June 30, 2024 ($ in
thousands) (unaudited) Quarter Ended
Linked Quarter Year over Year NONPERFORMING ASSETS 6/30/2024
3/31/2024 6/30/2023 $ Change % Change
$ Change % Change Nonaccrual LHFI Alabama (1)
$
26,222
$
23,261
$
11,058
$
2,961
12.7
%
$
15,164
n/m
Florida
614
585
334
29
5.0
%
280
83.8
%
Mississippi (2)
14,773
59,059
36,288
(44,286
)
-75.0
%
(21,515
)
-59.3
%
Tennessee (3)
2,084
1,800
5,088
284
15.8
%
(3,004
)
-59.0
%
Texas
599
13,646
22,259
(13,047
)
-95.6
%
(21,660
)
-97.3
%
Total nonaccrual LHFI
44,292
98,351
75,027
(54,059
)
-55.0
%
(30,735
)
-41.0
%
Other real estate Alabama (1)
485
1,050
—
(565
)
-53.8
%
485
n/m
Florida
—
71
—
(71
)
-100.0
%
—
n/m
Mississippi (2)
1,787
2,870
1,137
(1,083
)
-37.7
%
650
57.2
%
Tennessee (3)
86
86
—
—
0.0
%
86
n/m
Texas
4,228
3,543
—
685
19.3
%
4,228
n/m
Total other real estate
6,586
7,620
1,137
(1,034
)
-13.6
%
5,449
n/m
Total nonperforming assets
$
50,878
$
105,971
$
76,164
$
(55,093
)
-52.0
%
$
(25,286
)
-33.2
%
LOANS PAST DUE OVER 90
DAYS LHFI
$
5,413
$
5,243
$
3,911
$
170
3.2
%
$
1,502
38.4
%
LHFS-Guaranteed GNMA serviced loans (no obligation to
repurchase)
$
58,079
$
56,530
$
35,766
$
1,549
2.7
%
$
22,313
62.4
%
Quarter Ended Linked Quarter Year over
Year ACL LHFI
6/30/2024 3/31/2024 6/30/2023 $ Change
% Change $ Change % Change Beginning Balance
$
142,998
$
139,367
$
122,239
$
3,631
2.6
%
$
20,759
17.0
%
PCL, LHFI
14,696
7,708
8,211
6,988
90.7
%
6,485
79.0
%
PCL, LHFI sale of 1-4 family mortgage loans
8,633
—
—
8,633
n/m
8,633
n/m
Charge-offs, sale of 1-4 family mortgage loans
(8,633
)
—
—
(8,633
)
n/m
(8,633
)
n/m
Charge-offs
(5,120
)
(6,324
)
(2,773
)
1,204
19.0
%
(2,347
)
84.6
%
Recoveries
2,111
2,247
1,621
(136
)
-6.1
%
490
30.2
%
Net (charge-offs) recoveries
(11,642
)
(4,077
)
(1,152
)
(7,565
)
n/m
(10,490
)
n/m
Ending Balance
$
154,685
$
142,998
$
129,298
$
11,687
8.2
%
$
25,387
19.6
%
NET (CHARGE-OFFS)
RECOVERIES Alabama (1)
$
59
$
(341
)
$
(141
)
$
400
n/m
$
200
n/m
Florida
4
277
(35
)
(273
)
-98.6
%
39
n/m
Mississippi (2)
(9,112
)
(1,489
)
(762
)
(7,623
)
n/m
(8,350
)
n/m
Tennessee (3)
(122
)
(179
)
(166
)
57
31.8
%
44
26.5
%
Texas
(2,471
)
(2,345
)
(48
)
(126
)
-5.4
%
(2,423
)
n/m
Total net (charge-offs) recoveries
$
(11,642
)
$
(4,077
)
$
(1,152
)
$
(7,565
)
n/m
$
(10,490
)
n/m
(1) Alabama includes the Georgia Loan Production Office. (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 June 30, 2024 ($ in
thousands) (unaudited) Quarter Ended Six
Months Ended AVERAGE
BALANCES 6/30/2024 3/31/2024
12/31/2023 9/30/2023 6/30/2023
6/30/2024 6/30/2023 Securities AFS-taxable
$
1,866,227
$
1,927,619
$
1,986,825
$
2,049,006
$
2,140,505
$
1,896,923
$
2,163,684
Securities AFS-nontaxable
—
—
4,246
4,779
4,796
—
4,804
Securities HTM-taxable
1,421,246
1,418,476
1,430,169
1,445,895
1,463,086
1,419,861
1,471,140
Securities HTM-nontaxable
112
340
340
907
1,718
226
3,106
Total securities
3,287,585
3,346,435
3,421,580
3,500,587
3,610,105
3,317,010
3,642,734
Loans (includes loans held for sale)
13,309,127
13,169,805
13,010,028
12,926,942
12,732,057
13,239,466
12,631,810
Fed funds sold and reverse repurchases
110
114
121
230
3,275
112
2,829
Other earning assets
592,625
571,215
670,477
682,644
903,027
581,920
780,657
Total earning assets
17,189,447
17,087,569
17,102,206
17,110,403
17,248,464
17,138,508
17,058,030
ACL LHFI
(143,245
)
(138,711
)
(133,742
)
(127,915
)
(121,960
)
(140,978
)
(120,974
)
Other assets
1,740,307
1,730,521
1,749,069
1,721,310
1,648,583
1,735,414
1,700,643
Total assets
$
18,786,509
$
18,679,379
$
18,717,533
$
18,703,798
$
18,775,087
$
18,732,944
$
18,637,699
Interest-bearing demand deposits
$
5,222,369
$
5,291,779
$
5,053,935
$
4,875,714
$
4,803,737
$
5,257,074
$
4,777,591
Savings deposits
3,653,966
3,686,027
3,526,600
3,642,158
4,002,134
3,669,997
4,097,420
Time deposits
3,346,046
3,321,601
3,427,384
3,075,224
2,335,752
3,333,824
2,122,784
Total interest-bearing deposits
12,222,381
12,299,407
12,007,919
11,593,096
11,141,623
12,260,895
10,997,795
Fed funds purchased and repurchases
434,760
428,127
403,041
414,696
389,834
431,444
413,055
Other borrowings
534,350
463,459
590,765
912,151
1,330,010
498,905
1,221,032
Subordinated notes
123,556
123,501
123,446
123,391
123,337
123,529
123,309
Junior subordinated debt securities
61,856
61,856
61,856
61,856
61,856
61,856
61,856
Total interest-bearing liabilities
13,376,903
13,376,350
13,187,027
13,105,190
13,046,660
13,376,629
12,817,047
Noninterest-bearing deposits
3,183,524
3,120,566
3,296,351
3,429,815
3,595,927
3,152,045
3,703,987
Other liabilities
498,593
505,942
641,662
585,908
552,209
502,265
564,450
Total liabilities
17,059,020
17,002,858
17,125,040
17,120,913
17,194,796
17,030,939
17,085,484
Shareholders' equity
1,727,489
1,676,521
1,592,493
1,582,885
1,580,291
1,702,005
1,552,215
Total liabilities and equity
$
18,786,509
$
18,679,379
$
18,717,533
$
18,703,798
$
18,775,087
$
18,732,944
$
18,637,699
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED
FINANCIAL INFORMATION June 30, 2024 ($ in
thousands) (unaudited) PERIOD END BALANCES 6/30/2024
3/31/2024 12/31/2023 9/30/2023
6/30/2023 Cash and due from banks
$
822,141
$
606,061
$
975,343
$
750,292
$
831,852
Securities available for sale
1,621,659
1,702,299
1,762,878
1,766,174
1,871,883
Securities held to maturity
1,380,487
1,415,025
1,426,279
1,438,287
1,458,665
LHFS
185,698
172,937
184,812
169,244
181,094
LHFI
13,155,418
13,057,943
12,950,524
12,810,259
12,613,967
ACL LHFI
(154,685
)
(142,998
)
(139,367
)
(134,031
)
(129,298
)
Net LHFI
13,000,733
12,914,945
12,811,157
12,676,228
12,484,669
Premises and equipment, net
232,681
232,630
232,229
230,402
227,293
Mortgage servicing rights
136,658
138,044
131,870
142,379
134,350
Goodwill
334,605
334,605
334,605
334,605
334,605
Identifiable intangible assets
181
208
236
269
303
Other real estate
6,586
7,620
6,867
5,485
1,137
Operating lease right-of-use assets
36,925
34,324
35,711
37,115
35,561
Other assets
694,133
744,821
752,568
770,684
783,457
Assets of discontinued operations
—
73,093
67,634
69,675
77,757
Total assets
$
18,452,487
$
18,376,612
$
18,722,189
$
18,390,839
$
18,422,626
Deposits: Noninterest-bearing
$
3,153,506
$
3,039,652
$
3,197,620
$
3,320,124
$
3,461,073
Interest-bearing
12,309,382
12,298,905
12,372,143
11,781,799
11,452,827
Total deposits
15,462,888
15,338,557
15,569,763
15,101,923
14,913,900
Fed funds purchased and repurchases
314,121
393,215
405,745
321,799
311,179
Other borrowings
336,687
482,027
483,230
793,193
1,056,714
Subordinated notes
123,592
123,537
123,482
123,427
123,372
Junior subordinated debt securities
61,856
61,856
61,856
61,856
61,856
ACL on off-balance sheet credit exposures
30,265
33,865
34,057
34,945
34,841
Operating lease liabilities
40,517
37,792
39,097
40,150
38,172
Other liabilities
203,420
207,583
331,085
331,066
299,481
Liabilities of discontinued operations
—
15,581
12,027
12,129
11,918
Total liabilities
16,573,346
16,694,013
17,060,342
16,820,488
16,851,433
Common stock
12,753
12,747
12,725
12,724
12,724
Capital surplus
161,834
160,521
159,688
158,316
156,834
Retained earnings
1,796,111
1,736,485
1,709,157
1,687,199
1,667,339
Accumulated other comprehensive income (loss), net of tax
(91,557
)
(227,154
)
(219,723
)
(287,888
)
(265,704
)
Total shareholders' equity
1,879,141
1,682,599
1,661,847
1,570,351
1,571,193
Total liabilities and equity
$
18,452,487
$
18,376,612
$
18,722,189
$
18,390,839
$
18,422,626
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED
FINANCIAL INFORMATION June 30, 2024 ($ in thousands
except per share data) (unaudited) Quarter
Ended Six Months Ended INCOME
STATEMENTS 6/30/2024 3/31/2024
12/31/2023 9/30/2023 6/30/2023
6/30/2024 6/30/2023 Interest and fees on LHFS &
LHFI-FTE
$
216,399
$
209,456
$
210,288
$
206,523
$
192,941
$
425,855
$
371,908
Interest on securities-taxable
17,929
15,634
15,936
16,624
16,779
33,563
33,540
Interest on securities-tax exempt-FTE
1
4
44
58
69
5
161
Interest on fed funds sold and reverse repurchases
2
1
2
3
45
3
75
Other interest income
8,124
8,110
9,918
8,613
12,077
16,234
18,604
Total interest income-FTE
242,455
233,205
236,188
231,821
221,911
475,660
424,288
Interest on deposits
83,681
83,716
80,847
69,797
54,409
167,397
95,307
Interest on fed funds purchased and repurchases
5,663
5,591
5,347
5,375
4,865
11,254
9,697
Other interest expense
8,778
7,703
9,946
14,713
19,350
16,481
34,925
Total interest expense
98,122
97,010
96,140
89,885
78,624
195,132
139,929
Net interest income-FTE
144,333
136,195
140,048
141,936
143,287
280,528
284,359
PCL, LHFI
14,696
7,708
7,585
8,322
8,211
22,404
11,455
PCL, off-balance sheet credit exposures
(3,600
)
(192
)
(888
)
104
245
(3,792
)
(1,997
)
PCL, LHFI sale of 1-4 family mortgage loans
8,633
—
—
—
—
8,633
—
Net interest income after provision-FTE
124,604
128,679
133,351
133,510
134,831
253,283
274,901
Service charges on deposit accounts
10,924
10,958
11,311
11,074
10,695
21,882
21,031
Bank card and other fees
9,225
7,428
8,502
8,217
8,917
16,653
16,720
Mortgage banking, net
4,204
8,915
5,519
6,458
6,600
13,119
14,239
Wealth management
9,692
8,952
8,657
8,773
8,882
18,644
17,662
Other, net
7,461
3,102
2,577
2,399
2,735
10,563
5,255
Securities gains (losses), net
(182,792
)
—
39
—
—
(182,792
)
—
Total noninterest income (loss)
(141,286
)
39,355
36,605
36,921
37,829
(101,931
)
74,907
Salaries and employee benefits
64,838
65,487
69,326
67,374
66,799
130,325
131,571
Services and fees
24,743
24,431
27,478
27,472
27,821
49,174
52,855
Net occupancy-premises
7,265
7,270
7,144
7,151
6,897
14,535
14,212
Equipment expense
6,241
6,325
6,457
6,755
6,337
12,566
12,632
Litigation settlement expense
—
—
—
6,500
—
—
—
Other expense
15,239
16,151
15,790
15,039
13,767
31,390
27,940
Total noninterest expense
118,326
119,664
126,195
130,291
121,621
237,990
239,210
Income (loss) from continuing operations before income
taxes and tax eq adj
(135,008
)
48,370
43,761
40,140
51,039
(86,638
)
110,598
Tax equivalent adjustment
3,304
3,365
3,306
3,299
3,383
6,669
6,860
Income (loss) from continuing operations before income
taxes
(138,312
)
45,005
40,455
36,841
47,656
(93,307
)
103,738
Income taxes from continuing operations
(37,707
)
6,832
6,567
6,288
6,452
(30,875
)
14,889
Income (loss) from continuing operations
(100,605
)
38,173
33,888
30,553
41,204
(62,432
)
88,849
Income from discontinued operations (discont. ops) before
income taxes
232,640
4,512
2,965
4,649
5,127
237,152
8,688
Income taxes from discontinued operations
58,203
1,150
730
1,173
1,294
59,353
2,200
Income from discont. ops
174,437
3,362
2,235
3,476
3,833
177,799
6,488
Net income
$
73,832
$
41,535
$
36,123
$
34,029
$
45,037
$
115,367
$
95,337
Per share data (1) Basic earnings (loss) per share
from continuing operations
$
(1.64
)
$
0.62
$
0.55
$
0.50
$
0.67
$
(1.02
)
$
1.46
Basic earnings per share from discont. ops
$
2.85
$
0.05
$
0.04
$
0.06
$
0.06
$
2.91
$
0.11
Basic earnings per share - total
$
1.21
$
0.68
$
0.59
$
0.56
$
0.74
$
1.89
$
1.56
Diluted earnings (loss) per share from continuing
operations
$
(1.64
)
$
0.62
$
0.55
$
0.50
$
0.67
$
(1.02
)
$
1.45
Diluted earnings per share from discont. ops
$
2.84
$
0.05
$
0.04
$
0.06
$
0.06
$
2.90
$
0.11
Diluted earnings per share - total
$
1.20
$
0.68
$
0.59
$
0.56
$
0.74
$
1.88
$
1.56
Dividends per share
$
0.23
$
0.23
$
0.23
$
0.23
$
0.23
$
0.46
$
0.46
Weighted average shares outstanding Basic
61,196,820
61,128,425
61,070,481
61,069,750
61,063,277
61,162,623
61,037,312
Diluted
61,415,957
61,348,364
61,296,840
61,263,032
61,230,031
61,373,850
61,206,799
Period end shares outstanding
61,205,969
61,178,366
61,071,173
61,070,095
61,069,036
61,205,969
61,069,036
(1) Due to rounding, earnings (loss) per share from
continuing operations and discontinued operations may not sum to
earnings per share from net income.
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED
FINANCIAL INFORMATION June 30, 2024 ($ in
thousands) (unaudited) Quarter
Ended NONPERFORMING ASSETS
6/30/2024 3/31/2024 12/31/2023
9/30/2023 6/30/2023 Nonaccrual LHFI Alabama (1)
$
26,222
$
23,261
$
23,271
$
23,530
$
11,058
Florida
614
585
170
151
334
Mississippi (2)
14,773
59,059
54,615
45,050
36,288
Tennessee (3)
2,084
1,800
1,802
1,841
5,088
Texas
599
13,646
20,150
20,327
22,259
Total nonaccrual LHFI
44,292
98,351
100,008
90,899
75,027
Other real estate Alabama (1)
485
1,050
1,397
315
—
Florida
—
71
—
—
—
Mississippi (2)
1,787
2,870
1,242
942
1,137
Tennessee (3)
86
86
—
—
—
Texas
4,228
3,543
4,228
4,228
—
Total other real estate
6,586
7,620
6,867
5,485
1,137
Total nonperforming assets
$
50,878
$
105,971
$
106,875
$
96,384
$
76,164
LOANS PAST DUE OVER 90
DAYS LHFI
$
5,413
$
5,243
$
5,790
$
3,804
$
3,911
LHFS-Guaranteed GNMA serviced loans (no obligation to
repurchase)
$
58,079
$
56,530
$
51,243
$
42,532
$
35,766
Quarter Ended Six Months Ended
ACL LHFI 6/30/2024
3/31/2024 12/31/2023 9/30/2023
6/30/2023 6/30/2024 6/30/2023 Beginning
Balance
$
142,998
$
139,367
$
134,031
$
129,298
$
122,239
$
139,367
$
120,214
PCL, LHFI
14,696
7,708
7,585
8,322
8,211
22,404
11,455
PCL, LHFI sale of 1-4 family mortgage loans
8,633
—
—
—
—
8,633
—
Charge-offs, sale of 1-4 family mortgage loans
(8,633
)
—
—
—
—
(8,633
)
—
Charge-offs
(5,120
)
(6,324
)
(4,250
)
(7,496
)
(2,773
)
(11,444
)
(5,769
)
Recoveries
2,111
2,247
2,001
3,907
1,621
4,358
3,398
Net (charge-offs) recoveries
(11,642
)
(4,077
)
(2,249
)
(3,589
)
(1,152
)
(15,719
)
(2,371
)
Ending Balance
$
154,685
$
142,998
$
139,367
$
134,031
$
129,298
$
154,685
$
129,298
NET (CHARGE-OFFS)
RECOVERIES Alabama (1)
$
59
$
(341
)
$
(299
)
$
(165
)
$
(141
)
$
(282
)
$
(409
)
Florida
4
277
180
21
(35
)
281
(71
)
Mississippi (2)
(9,112
)
(1,489
)
(1,943
)
(1,867
)
(762
)
(10,601
)
(1,537
)
Tennessee (3)
(122
)
(179
)
(193
)
2,127
(166
)
(301
)
(290
)
Texas
(2,471
)
(2,345
)
6
(3,705
)
(48
)
(4,816
)
(64
)
Total net (charge-offs) recoveries
$
(11,642
)
$
(4,077
)
$
(2,249
)
$
(3,589
)
$
(1,152
)
$
(15,719
)
$
(2,371
)
(1) Alabama includes the Georgia Loan Production
Office. (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 June 30, 2024 (unaudited)
Quarter Ended Six Months Ended
FINANCIAL RATIOS AND OTHER DATA
6/30/2024 3/31/2024 12/31/2023
9/30/2023 6/30/2023 6/30/2024 6/30/2023
Return on average equity from continuing operations
-23.42
%
9.16
%
8.44
%
7.66
%
10.46
%
-7.38
%
11.54
%
Return on average equity from adjusted continuing operations (1)
9.06
%
9.16
%
8.68
%
8.87
%
10.46
%
9.11
%
11.54
%
Return on average equity - total
17.19
%
9.96
%
9.00
%
8.53
%
11.43
%
13.63
%
12.39
%
Return on average tangible equity from continuing operations
-29.05
%
11.45
%
10.70
%
9.72
%
13.28
%
-9.18
%
14.75
%
Return on average tangible equity from adjusted continuing
operations (1)
11.14
%
11.45
%
10.98
%
11.25
%
13.28
%
11.29
%
14.75
%
Return on average tangible equity - total
21.91
%
12.98
%
11.92
%
11.32
%
15.18
%
17.56
%
16.56
%
Return on average assets from continuing operations
-2.16
%
0.83
%
0.72
%
0.65
%
0.88
%
-0.67
%
0.97
%
Return on average assets from adjusted continuing operations (1)
0.87
%
0.83
%
0.74
%
0.75
%
0.88
%
0.85
%
0.97
%
Return on average assets - total
1.58
%
0.89
%
0.77
%
0.72
%
0.96
%
1.24
%
1.03
%
Interest margin - Yield - FTE
5.67
%
5.49
%
5.48
%
5.38
%
5.16
%
5.58
%
5.02
%
Interest margin - Cost
2.30
%
2.28
%
2.23
%
2.08
%
1.83
%
2.29
%
1.65
%
Net interest margin - FTE
3.38
%
3.21
%
3.25
%
3.29
%
3.33
%
3.29
%
3.36
%
Efficiency ratio (2)
63.81
%
66.90
%
69.76
%
68.27
%
66.12
%
65.32
%
65.52
%
Full-time equivalent employees
2,515
2,712
2,757
2,756
2,761
CREDIT QUALITY RATIOS
Net (recoveries) charge-offs (excl sale of 1-4 family mortgage
loans) / average loans
0.09
%
0.12
%
0.07
%
0.11
%
0.04
%
0.11
%
0.04
%
PCL, LHFI (excl PCL, LHFI sale of 1-4 family mortgage loans) /
average loans
0.44
%
0.24
%
0.23
%
0.26
%
0.26
%
0.34
%
0.18
%
Nonaccrual LHFI / (LHFI + LHFS)
0.33
%
0.74
%
0.76
%
0.70
%
0.59
%
Nonperforming assets / (LHFI + LHFS)
0.38
%
0.80
%
0.81
%
0.74
%
0.60
%
Nonperforming assets / (LHFI + LHFS + other real estate)
0.38
%
0.80
%
0.81
%
0.74
%
0.60
%
ACL LHFI / LHFI
1.18
%
1.10
%
1.08
%
1.05
%
1.03
%
ACL LHFI-commercial / commercial LHFI
1.05
%
0.93
%
0.85
%
0.86
%
0.84
%
ACL LHFI-consumer / consumer and home mortgage LHFI
1.59
%
1.63
%
1.81
%
1.66
%
1.60
%
ACL LHFI / nonaccrual LHFI
349.24
%
145.39
%
139.36
%
147.45
%
172.34
%
ACL LHFI / nonaccrual LHFI (excl individually analyzed loans)
840.20
%
235.29
%
249.31
%
273.60
%
301.44
%
CAPITAL RATIOS Total
equity / total assets
10.18
%
9.16
%
8.88
%
8.54
%
8.53
%
Tangible equity / tangible assets
8.52
%
7.47
%
7.22
%
6.84
%
6.83
%
Tangible equity / risk-weighted assets
10.18
%
8.83
%
8.76
%
8.16
%
8.26
%
Tier 1 leverage ratio
9.29
%
8.76
%
8.62
%
8.49
%
8.35
%
Common equity tier 1 capital ratio
10.92
%
10.12
%
10.04
%
9.89
%
9.87
%
Tier 1 risk-based capital ratio
11.31
%
10.51
%
10.44
%
10.29
%
10.27
%
Total risk-based capital ratio
13.29
%
12.42
%
12.29
%
12.11
%
12.08
%
STOCK PERFORMANCE Market
value-Close
$
30.04
$
28.11
$
27.88
$
21.73
$
21.12
Book value
$
30.70
$
27.50
$
27.21
$
25.71
$
25.73
Tangible book value
$
25.23
$
22.03
$
21.73
$
20.23
$
20.24
(1) Adjusted continuing operations excludes significant
non-routine transactions. See Note 7 - Non-GAAP Financials Measures
in the Notes to the Consolidated Financials.
(2) See Note 7 – Non-GAAP Financial
Measures in the Notes to Consolidated Financials for Trustmark’s
efficiency ratio calculation.
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND
SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIALS
June 30, 2024
($ in thousands)
(unaudited)
Note 1 - Significant Non-Routine Transactions
Trustmark completed the following significant non-routine
transactions during the second quarter of 2024:
- On May 31, 2024, Trustmark National Bank closed the sale of its
wholly owned subsidiary, Fisher Brown Bottrell Insurance, Inc.,
(FBBI) to Marsh & McLennan Agency LLC, consistent with the
terms as previously announced on April 23, 2024. Trustmark National
Bank is a wholly owned subsidiary of Trustmark Corporation.
Trustmark recognized a gain on the sale of $228.3 million ($171.2
million, net of taxes) in income from discontinued operations. The
operations of FBBI are also included in discontinued operations for
the current and prior periods.
- Trustmark restructured its investment securities portfolio by
selling $1.561 billion of available for sale securities with an
average yield of 1.36%, which generated a loss of $182.8 million
($137.1 million, net of taxes) and was recorded to noninterest
income in securities gains (losses), net. Trustmark purchased
$1.378 billion of available for sale securities with an average
yield of 4.85%.
- Trustmark sold a portfolio of 1-4 family mortgage loans that
were three payments delinquent and/or nonaccrual at the time of
selection totaling $56.2 million, which resulted in a loss of $13.4
million ($10.1 million, net of taxes). The portion of the loss
related to credit totaled $8.6 million and was recorded as
adjustments to charge-offs and the provision for credit losses. The
noncredit-related portion of the loss totaled $4.8 million and was
recorded to noninterest income in other, net.
- On April 8, 2024, Visa commenced an initial exchange offer
expiring on May 3, 2024, for any and all outstanding shares of Visa
Class B-1 common stock (Visa B-1 shares). Holders participating in
the exchange offer would receive a combination of Visa Class B-2
common stock (Visa B-2 shares) and Visa Class C common stock (Visa
C shares) in exchange for Visa B-1 shares that are validly tendered
and accepted for exchange by Visa. TNB tendered its 38.7 thousand
Visa B-1 shares, which was accepted by Visa. In exchange for each
Visa B-1 share that was validly tendered and accepted for exchange
by Visa, TNB received 50.0% of a newly issued Visa B-2 share and
newly issued Visa C shares equivalent in value to 50.0% of a Visa
B-1 share. The Visa C shares that were received by TNB were
recognized at fair value, which resulted in a gain of $8.1 million
($6.0 million, net of taxes) and recorded to noninterest income in
other, net during the second quarter of 2024. The Visa B-2 shares
were recorded at their nominal carrying value.
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:
6/30/2024
3/31/2024
12/31/2023
9/30/2023
6/30/2023
SECURITIES
AVAILABLE FOR SALE
U.S. Treasury securities
$
172,955
$
372,424
$
372,368
$
363,476
$
362,966
U.S. Government agency obligations
—
5,594
5,792
6,780
6,999
Obligations of states and political
subdivisions
—
—
—
4,642
4,813
Mortgage-backed securities
Residential mortgage pass-through
securities
Guaranteed by GNMA
23,489
22,232
23,135
22,881
25,336
Issued by FNMA and FHLMC
1,060,869
1,129,521
1,176,798
1,171,521
1,250,435
Other residential mortgage-backed
securities
Issued or guaranteed by FNMA, FHLMC, or
GNMA
—
79,099
86,074
90,402
98,388
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or
GNMA
364,346
93,429
98,711
106,472
122,946
Total securities available for sale
$
1,621,659
$
1,702,299
$
1,762,878
$
1,766,174
$
1,871,883
SECURITIES HELD
TO MATURITY
U.S. Treasury securities
$
29,455
$
29,261
$
29,068
$
28,872
$
28,679
Obligations of states and political
subdivisions
—
340
340
341
1,180
Mortgage-backed securities
Residential mortgage pass-through
securities
Guaranteed by GNMA
17,998
18,387
13,005
13,090
13,235
Issued by FNMA and FHLMC
449,781
461,457
469,593
474,003
484,679
Other residential mortgage-backed
securities
Issued or guaranteed by FNMA, FHLMC, or
GNMA
138,951
146,447
154,466
162,031
171,002
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or
GNMA
744,302
759,133
759,807
759,950
759,890
Total securities held to maturity
$
1,380,487
$
1,415,025
$
1,426,279
$
1,438,287
$
1,458,665
At June 30, 2024, the net unamortized, unrealized loss included
in accumulated other comprehensive income (loss) in the
accompanying balance sheet for securities held to maturity
transferred from securities available for sale totaled $52.1
million.
Management continues to focus on asset quality as one of the
strategic goals of the securities portfolio, which is evidenced by
the investment of 100.0% of the portfolio in U.S. Treasury
securities, GSE-backed obligations and other Aaa rated securities
as determined by Moody’s. None of the securities owned by Trustmark
are collateralized by assets which are considered sub-prime.
Furthermore, outside of stock ownership in the Federal Home Loan
Bank of Dallas and Federal Reserve Bank, Trustmark does not hold
any other equity investment in a GSE.
TRUSTMARK CORPORATION AND
SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIALS
June 30, 2024
($ in thousands)
(unaudited)
Note 3 – Loan Composition
LHFI consisted of the following during the periods
presented:
LHFI BY
TYPE
6/30/2024
3/31/2024
12/31/2023
9/30/2023
6/30/2023
Loans secured by real estate:
Construction, land development and other
land loans
$
1,638,972
$
1,539,461
$
1,510,679
$
1,609,326
$
1,722,657
Secured by 1-4 family residential
properties
2,878,295
2,891,481
2,904,715
2,893,606
2,854,182
Secured by nonfarm, nonresidential
properties
3,598,647
3,543,235
3,489,434
3,569,671
3,471,728
Other real estate secured
1,344,968
1,384,610
1,312,551
1,218,499
954,410
Commercial and industrial loans
1,880,607
1,922,711
1,922,910
1,828,924
1,883,480
Consumer loans
153,316
156,430
161,725
161,940
163,788
State and other political subdivision
loans
1,053,015
1,052,844
1,088,466
1,056,569
1,111,710
Other loans and leases
607,598
567,171
560,044
471,724
452,012
LHFI
13,155,418
13,057,943
12,950,524
12,810,259
12,613,967
ACL LHFI
(154,685
)
(142,998
)
(139,367
)
(134,031
)
(129,298
)
Net LHFI
$
13,000,733
$
12,914,945
$
12,811,157
$
12,676,228
$
12,484,669
The following table presents the LHFI composition based upon the
region where the loan was originated and reflects each region’s
diversified mix of loans:
June 30, 2024
LHFI -
COMPOSITION BY REGION
Total
Alabama (1)
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
$
1,638,972
$
832,891
$
35,147
$
366,893
$
41,046
$
362,995
Secured by 1-4 family residential
properties
2,878,295
152,184
60,268
2,546,223
83,469
36,151
Secured by nonfarm, nonresidential
properties
3,598,647
1,052,737
226,977
1,512,307
133,835
672,791
Other real estate secured
1,344,968
560,797
1,703
370,854
6,384
405,230
Commercial and industrial loans
1,880,607
676,858
22,064
802,334
151,496
227,855
Consumer loans
153,316
21,806
7,084
93,505
16,814
14,107
State and other political subdivision
loans
1,053,015
72,787
51,084
796,947
23,672
108,525
Other loans and leases
607,598
285,089
8,505
202,159
43,062
68,783
Loans
$
13,155,418
$
3,655,149
$
412,832
$
6,691,222
$
499,778
$
1,896,437
CONSTRUCTION,
LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION
Lots
$
72,597
$
27,887
$
7,284
$
19,673
$
6,506
$
11,247
Development
122,826
56,857
878
25,218
12,502
27,371
Unimproved land
104,436
19,762
12,051
27,149
7,859
37,615
1-4 family construction
316,669
171,134
10,214
91,849
14,179
29,293
Other construction
1,022,444
557,251
4,720
203,004
—
257,469
Construction, land development and other
land loans
$
1,638,972
$
832,891
$
35,147
$
366,893
$
41,046
$
362,995
(1) Includes Georgia Loan Production
Office.
TRUSTMARK CORPORATION AND
SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIALS
June 30, 2024
($ in thousands)
(unaudited)
Note 3 – Loan Composition (continued)
June 30, 2024
Total
Alabama (1)
Florida
Mississippi (Central and
Southern Regions)
Tennessee (Memphis, TN and
Northern MS Regions)
Texas
LOANS SECURED BY
NONFARM, NONRESIDENTIAL PROPERTIES BY REGION
Non-owner occupied:
Retail
$
331,174
$
115,459
$
22,998
$
95,638
$
16,980
$
80,099
Office
257,391
100,383
19,451
72,173
1,546
63,838
Hotel/motel
278,437
128,705
47,859
76,834
25,039
—
Mini-storage
145,336
41,249
1,678
89,905
639
11,865
Industrial
509,631
137,814
18,914
178,304
2,985
171,614
Health care
120,089
92,200
680
24,600
329
2,280
Convenience stores
25,609
2,947
413
13,989
228
8,032
Nursing homes/senior living
527,800
227,059
—
200,257
4,546
95,938
Other
118,763
32,470
8,757
60,783
8,042
8,711
Total non-owner occupied loans
2,314,230
878,286
120,750
812,483
60,334
442,377
Owner-occupied:
Office
146,066
43,808
35,796
36,678
11,224
18,560
Churches
55,308
13,697
4,010
31,652
3,503
2,446
Industrial warehouses
158,118
11,309
4,503
39,103
15,009
88,194
Health care
122,993
11,253
8,210
84,065
2,233
17,232
Convenience stores
132,276
11,807
29,012
57,593
—
33,864
Retail
91,918
9,190
14,488
51,438
8,407
8,395
Restaurants
36,809
4,019
2,870
9,593
16,509
3,818
Auto dealerships
41,127
4,765
187
20,475
15,700
—
Nursing homes/senior living
368,429
52,648
—
289,669
—
26,112
Other
131,373
11,955
7,151
79,558
916
31,793
Total owner-occupied loans
1,284,417
174,451
106,227
699,824
73,501
230,414
Loans secured by nonfarm, nonresidential
properties
$
3,598,647
$
1,052,737
$
226,977
$
1,512,307
$
133,835
$
672,791
(1) Includes Georgia Loan Production
Office.
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
Six Months Ended
6/30/2024
3/31/2024
12/31/2023
9/30/2023
6/30/2023
6/30/2024
6/30/2023
Securities – taxable
2.19
%
1.88
%
1.85
%
1.89
%
1.87
%
2.03
%
1.86
%
Securities – nontaxable
3.59
%
4.73
%
3.81
%
4.05
%
4.25
%
4.45
%
4.10
%
Securities – total
2.19
%
1.88
%
1.85
%
1.89
%
1.87
%
2.04
%
1.87
%
LHFI & LHFS
6.54
%
6.40
%
6.41
%
6.34
%
6.08
%
6.47
%
5.94
%
Fed funds sold & reverse
repurchases
7.31
%
3.53
%
6.56
%
5.17
%
5.51
%
5.39
%
5.35
%
Other earning assets
5.51
%
5.71
%
5.87
%
5.01
%
5.36
%
5.61
%
4.81
%
Total earning assets
5.67
%
5.49
%
5.48
%
5.38
%
5.16
%
5.58
%
5.02
%
Interest-bearing deposits
2.75
%
2.74
%
2.67
%
2.39
%
1.96
%
2.75
%
1.75
%
Fed funds purchased & repurchases
5.24
%
5.25
%
5.26
%
5.14
%
5.01
%
5.25
%
4.73
%
Other borrowings
4.91
%
4.78
%
5.08
%
5.32
%
5.12
%
4.84
%
5.01
%
Total interest-bearing liabilities
2.95
%
2.92
%
2.89
%
2.72
%
2.42
%
2.93
%
2.20
%
Total Deposits
2.18
%
2.18
%
2.10
%
1.84
%
1.48
%
2.18
%
1.31
%
Net interest margin
3.38
%
3.21
%
3.25
%
3.29
%
3.33
%
3.29
%
3.36
%
TRUSTMARK CORPORATION AND
SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIALS
June 30, 2024
($ in thousands)
(unaudited)
Note 4 – Yields on Earning Assets and Interest-Bearing
Liabilities (continued)
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.
The net interest margin increased 17 basis points when compared
to the first quarter of 2024, totaling 3.38% for the second quarter
of 2024, primarily due to increased yields on the securities
portfolio and the loans held for investment and held for sale
portfolio as well as the costs of interest-bearing deposits
remaining relatively flat.
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 hedge ineffectiveness of $4.5
million during the second quarter of 2024.
The following table illustrates the components of mortgage
banking revenues included in noninterest income in the accompanying
income statements:
Quarter Ended
Six Months Ended
6/30/2024
3/31/2024
12/31/2023
9/30/2023
6/30/2023
6/30/2024
6/30/2023
Mortgage servicing income, net
$
6,993
$
6,934
$
6,731
$
6,916
$
6,764
$
13,927
$
13,549
Change in fair value-MSR from runoff
(3,447
)
(1,926
)
(2,972
)
(3,203
)
(2,710
)
(5,373
)
(3,855
)
Gain on sales of loans, net
5,151
5,009
3,913
3,748
3,887
10,160
7,684
Mortgage banking income before hedge
ineffectiveness
8,697
10,017
7,672
7,461
7,941
18,714
17,378
Change in fair value-MSR from market
changes
(1,626
)
5,123
(10,224
)
6,809
5,898
3,497
1,926
Change in fair value of derivatives
(2,867
)
(6,225
)
8,071
(7,812
)
(7,239
)
(9,092
)
(5,065
)
Net positive (negative) hedge
ineffectiveness
(4,493
)
(1,102
)
(2,153
)
(1,003
)
(1,341
)
(5,595
)
(3,139
)
Mortgage banking, net
$
4,204
$
8,915
$
5,519
$
6,458
$
6,600
$
13,119
$
14,239
TRUSTMARK CORPORATION AND
SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIALS
June 30, 2024
($ in thousands)
(unaudited)
Note 6 – Other Noninterest Income and Expense
Other noninterest income consisted of the following for the
periods presented:
Quarter Ended
Six Months Ended
6/30/2024
3/31/2024
12/31/2023
9/30/2023
6/30/2023
6/30/2024
6/30/2023
Partnership amortization for tax credit
purposes
$
(1,824
)
$
(1,834
)
$
(2,013
)
$
(1,995
)
$
(2,019
)
$
(3,658
)
$
(3,980
)
Increase in life insurance cash surrender
value
1,860
1,844
1,825
1,784
1,716
3,704
3,409
Loss on sale of 1-4 family mortgage
loans
(4,798
)
—
—
—
—
(4,798
)
—
Visa C shares fair value adjustment
8,056
—
—
—
—
8,056
—
Other miscellaneous income
4,167
3,092
2,765
2,610
3,038
7,259
5,826
Total other, net
$
7,461
$
3,102
$
2,577
$
2,399
$
2,735
$
10,563
$
5,255
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:
Quarter Ended
Six Months Ended
6/30/2024
3/31/2024
12/31/2023
9/30/2023
6/30/2023
6/30/2024
6/30/2023
Loan expense
$
2,880
$
2,955
$
2,380
$
3,130
$
3,066
$
5,835
$
5,604
Amortization of intangibles
27
28
33
34
34
55
223
FDIC assessment expense
4,816
4,509
4,844
3,765
2,550
9,325
4,920
Other real estate expense, net
327
671
(184
)
(40
)
171
998
343
Other miscellaneous expense
7,189
7,988
8,717
8,150
7,946
15,177
16,850
Total other expense
$
15,239
$
16,151
$
15,790
$
15,039
$
13,767
$
31,390
$
27,940
Note 7 – Non-GAAP Financial Measures
In addition to capital ratios defined by GAAP and banking
regulators, Trustmark utilizes various tangible common equity
measures when evaluating capital utilization and adequacy. Tangible
common equity, as defined by Trustmark, represents common equity
less goodwill and identifiable intangible assets. Trustmark’s
Common Equity Tier 1 capital includes common stock, capital surplus
and retained earnings, and is reduced by goodwill and other
intangible assets, net of associated net deferred tax liabilities
as well as disallowed deferred tax assets and threshold deductions
as applicable.
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
intangible 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 audited consolidated financial statements and the
notes related thereto in their entirety and not to rely on any
single financial measure.
TRUSTMARK CORPORATION AND
SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIALS
June 30, 2024
($ in thousands except per share
data)
(unaudited)
Note 7 – Non-GAAP Financial Measures (continued)
Quarter Ended
Six Months Ended
6/30/2024
3/31/2024
12/31/2023
9/30/2023
6/30/2023
6/30/2024
6/30/2023
TANGIBLE
EQUITY
AVERAGE BALANCES
Total shareholders' equity
$
1,727,489
$
1,676,521
$
1,592,493
$
1,582,885
$
1,580,291
$
1,702,005
$
1,552,215
Less: Goodwill
(334,605
)
(334,605
)
(334,605
)
(334,605
)
(334,605
)
(334,605
)
(334,605
)
Identifiable intangible assets
(195
)
(224
)
(253
)
(287
)
(320
)
(210
)
(381
)
Total average tangible equity
$
1,392,689
$
1,341,692
$
1,257,635
$
1,247,993
$
1,245,366
$
1,367,190
$
1,217,229
PERIOD END BALANCES
Total shareholders' equity
$
1,879,141
$
1,682,599
$
1,661,847
$
1,570,351
$
1,571,193
Less: Goodwill
(334,605
)
(334,605
)
(334,605
)
(334,605
)
(334,605
)
Identifiable intangible assets
(181
)
(208
)
(236
)
(269
)
(303
)
Total tangible equity
(a)
$
1,544,355
$
1,347,786
$
1,327,006
$
1,235,477
$
1,236,285
TANGIBLE
ASSETS
Total assets
$
18,452,487
$
18,376,612
$
18,722,189
$
18,390,839
$
18,422,626
Less: Goodwill
(334,605
)
(334,605
)
(334,605
)
(334,605
)
(334,605
)
Identifiable intangible assets
(181
)
(208
)
(236
)
(269
)
(303
)
Total tangible assets
(b)
$
18,117,701
$
18,041,799
$
18,387,348
$
18,055,965
$
18,087,718
Risk-weighted assets
(c)
$
15,165,038
$
15,257,385
$
15,153,263
$
15,143,531
$
14,966,614
NET INCOME (LOSS)
ADJUSTED FOR INTANGIBLE AMORTIZATION
Net income (loss) from continuing
operations
$
(100,605
)
$
38,173
$
33,888
$
30,553
$
41,204
$
(62,432
)
$
88,849
Plus: Intangible amortization net of tax
from
continuing operations
20
20
25
25
25
40
167
Net income (loss) adjusted for intangible
amortization
$
(100,585
)
$
38,193
$
33,913
$
30,578
$
41,229
$
(62,392
)
$
89,016
Period end common shares outstanding
(d)
61,205,969
61,178,366
61,071,173
61,070,095
61,069,036
TANGIBLE COMMON
EQUITY MEASUREMENTS
Return on average tangible equity from
continuing operations (1)
-29.05
%
11.45
%
10.70
%
9.72
%
13.28
%
-9.18
%
14.75
%
Tangible equity/tangible assets
(a)/(b)
8.52
%
7.47
%
7.22
%
6.84
%
6.83
%
Tangible equity/risk-weighted assets
(a)/(c)
10.18
%
8.83
%
8.76
%
8.16
%
8.26
%
Tangible book value
(a)/(d)*1,000
$
25.23
$
22.03
$
21.73
$
20.23
$
20.24
COMMON EQUITY
TIER 1 CAPITAL (CET1)
Total shareholders' equity
$
1,879,141
$
1,682,599
$
1,661,847
$
1,570,351
$
1,571,193
CECL transition adjustment
6,500
6,500
13,000
13,000
13,000
AOCI-related adjustments
91,557
227,154
219,723
287,888
265,704
CET1 adjustments and deductions:
Goodwill net of associated deferred
tax liabilities (DTLs)
(320,758
)
(370,205
)
(370,212
)
(370,219
)
(370,227
)
Other adjustments and deductions
for CET1 (2)
(847
)
(2,588
)
(2,693
)
(2,803
)
(2,915
)
CET1 capital
(e)
1,655,593
1,543,460
1,521,665
1,498,217
1,476,755
Additional tier 1 capital instruments
plus related surplus
60,000
60,000
60,000
60,000
60,000
Tier 1 capital
$
1,715,593
$
1,603,460
$
1,581,665
$
1,558,217
$
1,536,755
Common equity tier 1 capital ratio
(e)/(c)
10.92
%
10.12
%
10.04
%
9.89
%
9.87
%
(1) Calculation = ((net income
(loss) 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.
TRUSTMARK CORPORATION AND
SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIALS
June 30, 2024
($ in thousands except per share
data)
(unaudited)
Note 7 – Non-GAAP Financial Measures (continued)
Trustmark discloses certain non-GAAP financial measures because
Management uses these measures for business planning purposes,
including to manage Trustmark’s business against internal projected
results of operations and to measure Trustmark’s performance.
Trustmark views these as measures of our core operating business,
which exclude the impact of the items detailed below, as these
items are generally not operational in nature. These non-GAAP
financial measures also provide another basis for comparing
period-to-period results as presented in the accompanying selected
financial data table and the audited consolidated financial
statements by excluding potential differences caused by
non-operational and unusual or non-recurring items. Readers are
cautioned that these adjustments are not permitted under GAAP.
Trustmark encourages readers to consider its consolidated financial
statements and the notes related thereto in their entirety, and not
to rely on any single financial measure.
The following table presents pre-provision net revenue (PPNR)
during the periods presented:
Quarter Ended
Six Months Ended
6/30/2024
3/31/2024
12/31/2023
9/30/2023
6/30/2023
6/30/2024
6/30/2023
Net interest income (GAAP)
(a)
$
141,029
$
132,830
$
136,742
$
138,637
$
139,904
$
273,859
$
277,499
Noninterest income (loss) (GAAP)
(141,286
)
39,355
36,605
36,921
37,829
(101,931
)
74,907
Add:
Loss on sale of 1-4 family mortgage loans
(incl in Other, net)
4,798
—
—
—
—
4,798
—
Visa C shares fair value adjustment (incl
in Other, net)
(8,056
)
—
—
—
—
(8,056
)
—
Securities (gains) losses, net
182,792
—
—
—
—
182,792
—
Noninterest income from adjusted
continuing
operations (Non-GAAP)
(b)
$
38,248
$
39,355
$
36,605
$
36,921
$
37,829
$
77,603
$
74,907
Adjusted pre-provision revenue
(a)+(b)=(c)
$
179,277
$
172,185
$
173,347
$
175,558
$
177,733
$
351,462
$
352,406
Noninterest expense (GAAP)
$
118,326
$
119,664
$
126,195
$
130,291
$
121,621
$
237,990
$
239,210
Less:
Reduction in force expense (incl in
Salaries and employee benefits)
—
—
(1,406
)
—
—
—
—
Litigation settlement expense
—
—
—
(6,500
)
—
—
—
Noninterest expense from adjusted
continuing
operations (Non-GAAP)
(d)
$
118,326
$
119,664
$
124,789
$
123,791
$
121,621
$
237,990
$
239,210
PPNR (Non-GAAP)
(c)-(d)
$
60,951
$
52,521
$
48,558
$
51,767
$
56,112
$
113,472
$
113,196
The following table presents adjustments to net income (loss)
from continuing operations and select financial ratios as reported
in accordance with GAAP resulting from significant non-routine
items occurring during the periods presented:
Quarter Ended
Six Months Ended
6/30/2024
3/31/2024
12/31/2023
9/30/2023
6/30/2023
6/30/2024
6/30/2023
Net income (loss) (GAAP) from continuing
operations
$
(100,605
)
$
38,173
$
33,888
$
30,553
$
41,204
$
(62,432
)
$
88,849
Significant non-routine transactions (net
of taxes):
PCL, LHFI sale of nonperforming 1-4
family
6,475
—
—
—
—
6,475
—
Loss on sale of 1-4 family mortgage
loans
3,598
—
—
—
—
3,598
—
Visa C shares fair value adjustment
(6,042
)
—
—
—
—
(6,042
)
—
Securities gains (losses), net
137,094
—
—
—
—
137,094
—
Reduction in force expense
—
—
1,055
—
—
—
—
Litigation settlement expense
—
—
—
4,875
—
—
—
Net income adjusted for significant
non-routine
transactions (Non-GAAP)
$
40,520
$
38,173
$
34,943
$
35,428
$
41,204
$
78,693
$
88,849
Diluted EPS from adjusted continuing
operations
$
0.66
$
0.62
$
0.57
$
0.58
$
0.67
$
1.28
$
1.45
FINANCIAL RATIOS
- REPORTED (GAAP)
Return on average equity from continuing
operations
-23.42
%
9.16
%
8.44
%
7.66
%
10.46
%
-7.38
%
11.54
%
Return on average tangible equity from
continuing operations
-29.05
%
11.45
%
10.70
%
9.72
%
13.28
%
-9.18
%
14.75
%
Return on average assets from continuing
operations
-2.16
%
0.83
%
0.72
%
0.65
%
0.88
%
-0.67
%
0.97
%
FINANCIAL RATIOS
- ADJUSTED (NON-GAAP)
Return on average equity from adjusted
continuing operations
9.06
%
9.16
%
8.68
%
8.87
%
10.46
%
9.11
%
11.54
%
Return on average tangible equity from
adjusted
continuing operations
11.14
%
11.45
%
10.98
%
11.25
%
13.28
%
11.29
%
14.75
%
Return on average assets from adjusted
continuing operations
0.87
%
0.83
%
0.74
%
0.75
%
0.88
%
0.85
%
0.97
%
TRUSTMARK CORPORATION AND
SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIALS
June 30, 2024
($ in thousands)
(unaudited)
Note 7 – Non-GAAP Financial Measures (continued)
The following table presents Trustmark’s calculation of its
efficiency ratio for the periods presented:
Quarter Ended
Six Months Ended
6/30/2024
3/31/2024
12/31/2023
9/30/2023
6/30/2023
6/30/2024
6/30/2023
Total noninterest expense (GAAP)
$
118,326
$
119,664
$
126,195
$
130,291
$
121,621
$
237,990
$
239,210
Less:
Other real estate expense, net
(327
)
(671
)
184
40
(171
)
(998
)
(343
)
Amortization of intangibles
(27
)
(28
)
(33
)
(34
)
(34
)
(55
)
(223
)
Charitable contributions resulting in
state tax credits
(300
)
(300
)
(325
)
(325
)
(325
)
(600
)
(650
)
Reduction in force expense
—
—
(1,406
)
—
—
—
—
Litigation settlement expense
—
—
—
(6,500
)
—
—
—
Adjusted noninterest expense
(Non-GAAP)
(c)
$
117,672
$
118,665
$
124,615
$
123,472
$
121,091
$
236,337
$
237,994
Net interest income (GAAP)
$
141,029
$
132,830
$
136,742
$
138,637
$
139,904
$
273,859
$
277,499
Add:
Tax equivalent adjustment
3,304
3,365
3,306
3,299
3,383
6,669
6,860
Net interest income-FTE (Non-GAAP)
(a)
$
144,333
$
136,195
$
140,048
$
141,936
$
143,287
$
280,528
$
284,359
Noninterest income (loss) (GAAP)
$
(141,286
)
$
39,355
$
36,605
$
36,921
$
37,829
$
(101,931
)
$
74,907
Add:
Partnership amortization for tax credit
purposes
1,824
1,834
2,013
1,995
2,019
3,658
3,980
Loss on sale of 1-4 family mortgage
loans
4,798
—
—
—
—
4,798
—
Securities (gains) losses, net
182,792
—
(39
)
—
—
182,792
—
Less:
Visa C shares fair value adjustment
(8,056
)
—
—
—
—
(8,056
)
—
Adjusted noninterest income (Non-GAAP)
(b)
$
40,072
$
41,189
$
38,579
$
38,916
$
39,848
$
81,261
$
78,887
Adjusted revenue (Non-GAAP)
(a)+(b)
$
184,405
$
177,384
$
178,627
$
180,852
$
183,135
$
361,789
$
363,246
Efficiency ratio (Non-GAAP)
(c)/((a)+(b))
63.81
%
66.90
%
69.76
%
68.27
%
66.12
%
65.32
%
65.52
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240723250620/en/
Trustmark Investor Contacts: Thomas C. Owens Treasurer
and Principal Financial Officer 601-208-7853
F. Joseph Rein, Jr. Senior Vice President 601-208-6898
Trustmark Media Contact: Melanie A. Morgan Senior Vice
President 601-208-2979
Trustmark (NASDAQ:TRMK)
Historical Stock Chart
From Oct 2024 to Nov 2024
Trustmark (NASDAQ:TRMK)
Historical Stock Chart
From Nov 2023 to Nov 2024
