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Trustmark Corporation Announces Second Quarter 2024 Financial Results

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

%

 

Contacts

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

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