Loan Growth Moderates, Credit Quality Remains
Stable
Solid Growth in Fee Income and Disciplined
Expense Management Reflected in Financial Results
Trustmark Corporation (NASDAQGS:TRMK) reported net income of
$41.5 million in the first quarter of 2024, representing diluted
earnings per share of $0.68. Trustmark’s performance during the
first quarter produced a return on average tangible equity of
12.98% and a return on average assets of 0.89%. The Board of
Directors declared a quarterly cash dividend of $0.23 per share
payable June 15, 2024, to shareholders of record on June 1,
2024.
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First Quarter Highlights
- Loans held for investment increased 0.8% linked-quarter and
represented 85.1% of total deposits at March 31, 2024
- Credit quality remained solid
- Revenue totaled $188.2 million, up 0.9% linked-quarter
- Noninterest income increased 11.1% linked-quarter, reflecting
seasonal increases and the strength of diversified business
lines
- Noninterest expense decreased 3.9% linked-quarter, reflecting
on-going expense management priorities
Duane A. Dewey, President and CEO, stated, “We are off to a
great start in 2024. Our first quarter results reflect continued
loan growth, solid credit quality, and double-digit increases in
noninterest income. In addition, we experienced a meaningful
decrease in noninterest expense. These accomplishments are the
results of our focused efforts to expand customer relationships and
diligently manage expenses. Our associates have done a tremendous
job of serving customers, building relationships, and demonstrating
the value Trustmark can provide as our customers’ financial
partner. We are well positioned to serve and expand our customer
base and create long-term value for shareholders.”
Balance Sheet Management
- Loans held for investment (HFI) increased $107.4 million, or
0.8%, during the quarter
- Total deposits decreased $231.2 million, or 1.5%, during the
quarter
- Maintained strong capital position with CET1 ratio of 10.12%
and total risk-based capital ratio of 12.42%
Loans HFI totaled $13.1 billion at March 31, 2024, reflecting an
increase of $107.4 million, or 0.8%, linked-quarter and $560.7
million, or 4.5%, year-over-year. The linked-quarter growth
reflected increases in commercial real estate and equipment finance
loans offset in part by reductions in state and other political
subdivision loans and consumer loans. Trustmark’s loan portfolio
remains well-diversified by loan type and geography.
Deposits totaled $15.3 billion at March 31, 2024, down $231.2
million, or 1.5%, from the prior quarter and up $554.9 million, or
3.8%, year-over-year. Trustmark continues to maintain a strong
liquidity position as loans HFI represented 85.1% of total deposits
at March 31, 2024. Migration into higher-yielding products
continued to drive a change in deposit mix from noninterest-bearing
deposits, which represented 19.8% of total deposits at March 31,
2024. Interest-bearing deposit costs totaled 2.74% for the first
quarter, an increase of 7 basis points linked-quarter, while the
total cost of deposits was 2.18%, an increase of 8 basis points
linked-quarter. The total cost of interest-bearing liabilities in
the first quarter was 2.92%, up 3 basis points from the prior
quarter.
During the first 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. At
March 31, 2024, Trustmark’s tangible equity to tangible assets
ratio was 7.20%, while the total risk-based capital ratio was
12.42%. Tangible book value per share was $21.18 at March 31, 2024,
an increase of 1.5% from the prior quarter and 10.1% from the prior
year.
Credit Quality
- Net charge-offs totaled $4.1 million, representing 0.12% of
average loans in the first quarter
- Provision for credit losses for loans HFI was $7.7 million in
the first quarter
- Allowance for credit losses (ACL) represented 1.10% of loans
HFI and 235.29% of nonaccrual loans, excluding individually
analyzed loans at March 31, 2024
Nonaccrual loans totaled $98.4 million at March 31, 2024, down
$1.7 million from the prior quarter and an increase of $26.0
million year-over-year. Other real estate totaled $7.6 million,
reflecting increases of $753 thousand and $5.9 million from the
prior quarter and prior year, respectively. Collectively,
nonperforming assets totaled $106.0 million, representing 0.80% of
loans HFI and held for sale (HFS) at March 31, 2024.
The provision for credit losses for loans HFI was $7.7 million
in the first quarter and was primarily attributable to loan growth,
changes in the macroeconomic forecast, and net adjustments to the
qualitative factors. The provision for credit losses for
off-balance sheet credit exposures was a negative $192 thousand in
the first quarter. Collectively, the provision for credit losses
totaled $7.5 million in the first quarter compared to $6.7 million
in the prior quarter and $1.0 million in the first quarter of
2023.
Allocation of Trustmark’s $143.0 million ACL on loans HFI
represented 0.93% of commercial loans and 1.63% of consumer and
home mortgage loans, resulting in an ACL to total loans HFI of
1.10% at March 31, 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 $136.2 million in the first
quarter, down 2.8% linked-quarter
- Net interest margin totaled 3.21% in the first quarter, down 4
basis points from the prior quarter
- Noninterest income increased 11.1% linked-quarter to total
$55.3 million, reflecting growth in mortgage banking, insurance,
other income, and wealth management revenue
Revenue in the first quarter totaled $188.2 million, an increase
of 0.9% from the prior quarter and a decrease of 0.4% from the same
quarter in the prior year. The linked-quarter increase primarily
reflects higher noninterest income offset in part by lower net
interest income while the year-over-year decrease is attributed to
lower net interest income offset in part by growth in noninterest
income.
Net interest income (FTE) in the first quarter totaled $136.2
million, resulting in a net interest margin of 3.21%, down 4 basis
points from the prior quarter. The decrease in the net interest
margin was primarily due to increased costs of interest-bearing
liabilities.
Noninterest income in the first quarter totaled $55.3 million,
an increase of $5.5 million, or 11.1%, from the prior quarter and
$4.0 million, or 7.7%, year-over-year. The linked-quarter increases
in mortgage banking, insurance, other income, and wealth management
revenue were offset in part by declines in bank card and other fees
and service charges on deposit accounts. The increase in
noninterest income year-over-year is broad-based, reflecting
increases in mortgage banking, insurance, other income, service
charges of deposit accounts and wealth management revenue which
were offset in part by declines in bank card and other fees.
Mortgage loan production in the first quarter totaled $274.0
million, up 0.8% from the prior quarter and down 24.1%
year-over-year. Mortgage banking revenue totaled $8.9 million in
the first quarter, an increase of $3.4 million linked-quarter and
$1.3 million year-over-year. The linked-quarter increase was
principally attributable to increased gain on sales of mortgage
loans, improvement in net negative hedge ineffectiveness, and
reduced servicing asset amortization. The year-over-year increase
was principally due to increased gain on sales of mortgage
loans.
Insurance revenue totaled $15.5 million in the first quarter, up
$2.3 million, or 17.2%, from the prior quarter and $1.2 million, or
8.1%, year-over-year. The linked-quarter and year-over-year
increases primarily reflected growth in commercial property and
casualty commissions. Wealth management revenue in the first
quarter totaled $9.0 million, an increase of $295 thousand, or
3.4%, from the prior quarter and $172 thousand, or 2.0%,
year-over-year. The linked-quarter growth reflected higher trust
management revenue while the year-over-year growth reflected
increased brokerage revenue.
Other income, net totaled $3.6 million in the first quarter, up
$1.1 million from both the prior quarter and year-over-year.
Service charges on deposit accounts totaled $11.0 million in the
first quarter, reflecting a seasonal decrease of $353 thousand, or
3.1%, from the prior quarter and an increase of $622 thousand, or
6.0%, year-over-year. Bank card and other fees totaled $7.4 million
in the first quarter, down $1.1 million from the prior quarter due
principally to lower customer derivative revenue. Year-over-year,
bank card and other fees declined $375 thousand.
Noninterest Expense
- Total noninterest expense declined $5.3 million, or 3.9%,
linked-quarter
- Salary and employee benefit expense declined $2.5 million, or
3.3%, linked-quarter
- Total services and fees declined $3.1 million, or 11.0%,
linked-quarter
Noninterest expense in the first quarter totaled $131.1 million,
a decrease of $5.3 million, or 3.9%, from the prior quarter and an
increase of $2.8 million, or 2.2%, year-over-year. Salary and
employee benefit expense totaled $75.5 million in the first
quarter, a decline of $2.5 million, or 3.3%, linked-quarter and an
increase of $1.4 million, or 1.9%, year-over-year. The
linked-quarter decline reflected reductions in incentives,
severance, medical insurance, and salary expense, which were offset
in part by a seasonal increase in payroll taxes and restricted
stock compensation expense. Services and fees in the first quarter
totaled $24.8 million, a decrease of $3.1 million, or 11.0%, from
the prior quarter and $587 thousand, or 2.3%, year-over-year. The
linked-quarter decline is attributable principally to lower
professional fees and data processing software expense.
Additional Information
As previously announced, Trustmark will conduct a conference
call with analysts on Wednesday, April 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, May 8, 2024, in archived format at the same web address
or by calling (877) 344-7529, passcode 4820621.
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 March 31, 2024 ($ in
thousands) (unaudited) Linked Quarter Year
over Year QUARTERLY AVERAGE
BALANCES 3/31/2024 12/31/2023
3/31/2023 $ Change % Change $ Change
% Change Securities AFS-taxable
$
1,927,619
$
1,986,825
$
2,187,121
$
(59,206
)
-3.0
%
$
(259,502
)
-11.9
%
Securities AFS-nontaxable
—
4,246
4,812
(4,246
)
-100.0
%
(4,812
)
-100.0
%
Securities HTM-taxable
1,418,476
1,430,169
1,479,283
(11,693
)
-0.8
%
(60,807
)
-4.1
%
Securities HTM-nontaxable
340
340
4,509
—
0.0
%
(4,169
)
-92.5
%
Total securities
3,346,435
3,421,580
3,675,725
(75,145
)
-2.2
%
(329,290
)
-9.0
%
Loans (includes loans held for sale)
13,169,805
13,010,028
12,530,449
159,777
1.2
%
639,356
5.1
%
Fed funds sold and reverse repurchases
114
121
2,379
(7
)
-5.8
%
(2,265
)
-95.2
%
Other earning assets
571,215
670,477
647,760
(99,262
)
-14.8
%
(76,545
)
-11.8
%
Total earning assets
17,087,569
17,102,206
16,856,313
(14,637
)
-0.1
%
231,256
1.4
%
Allowance for credit losses (ACL), loans held for investment (LHFI)
(138,711
)
(133,742
)
(119,978
)
(4,969
)
-3.7
%
(18,733
)
-15.6
%
Other assets
1,730,521
1,749,069
1,762,449
(18,548
)
-1.1
%
(31,928
)
-1.8
%
Total assets
$
18,679,379
$
18,717,533
$
18,498,784
$
(38,154
)
-0.2
%
$
180,595
1.0
%
Interest-bearing demand deposits
$
5,291,779
$
5,053,935
$
4,751,154
$
237,844
4.7
%
$
540,625
11.4
%
Savings deposits
3,686,027
3,526,600
4,193,764
159,427
4.5
%
(507,737
)
-12.1
%
Time deposits
3,321,601
3,427,384
1,907,449
(105,783
)
-3.1
%
1,414,152
74.1
%
Total interest-bearing deposits
12,299,407
12,007,919
10,852,367
291,488
2.4
%
1,447,040
13.3
%
Fed funds purchased and repurchases
428,127
403,041
436,535
25,086
6.2
%
(8,408
)
-1.9
%
Other borrowings
463,459
590,765
1,110,843
(127,306
)
-21.5
%
(647,384
)
-58.3
%
Subordinated notes
123,501
123,446
123,281
55
0.0
%
220
0.2
%
Junior subordinated debt securities
61,856
61,856
61,856
—
0.0
%
—
0.0
%
Total interest-bearing liabilities
13,376,350
13,187,027
12,584,882
189,323
1.4
%
791,468
6.3
%
Noninterest-bearing deposits
3,120,566
3,296,351
3,813,248
(175,785
)
-5.3
%
(692,682
)
-18.2
%
Other liabilities
505,942
641,662
576,826
(135,720
)
-21.2
%
(70,884
)
-12.3
%
Total liabilities
17,002,858
17,125,040
16,974,956
(122,182
)
-0.7
%
27,902
0.2
%
Shareholders' equity
1,676,521
1,592,493
1,523,828
84,028
5.3
%
152,693
10.0
%
Total liabilities and equity
$
18,679,379
$
18,717,533
$
18,498,784
$
(38,154
)
-0.2
%
$
180,595
1.0
%
n/m - percentage changes greater than +/- 100% are considered not
meaningful
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED
FINANCIAL INFORMATION March 31, 2024 ($ in
thousands) (unaudited) Linked Quarter
Year over Year PERIOD END
BALANCES 3/31/2024 12/31/2023
3/31/2023 $ Change % Change $ Change
% Change Cash and due from banks
$
606,261
$
975,543
$
1,297,144
$
(369,282
)
-37.9
%
$
(690,883
)
-53.3
%
Securities available for sale
1,702,299
1,762,878
1,984,162
(60,579
)
-3.4
%
(281,863
)
-14.2
%
Securities held to maturity
1,415,025
1,426,279
1,474,338
(11,254
)
-0.8
%
(59,313
)
-4.0
%
Loans held for sale (LHFS)
172,937
184,812
175,926
(11,875
)
-6.4
%
(2,989
)
-1.7
%
Loans held for investment (LHFI)
13,057,943
12,950,524
12,497,195
107,419
0.8
%
560,748
4.5
%
ACL LHFI
(142,998
)
(139,367
)
(122,239
)
(3,631
)
-2.6
%
(20,759
)
-17.0
%
Net LHFI
12,914,945
12,811,157
12,374,956
103,788
0.8
%
539,989
4.4
%
Premises and equipment, net
232,924
232,537
223,975
387
0.2
%
8,949
4.0
%
Mortgage servicing rights
138,044
131,870
127,206
6,174
4.7
%
10,838
8.5
%
Goodwill
384,237
384,237
384,237
—
0.0
%
—
0.0
%
Identifiable intangible assets
2,845
2,965
3,352
(120
)
-4.0
%
(507
)
-15.1
%
Other real estate
7,620
6,867
1,684
753
11.0
%
5,936
n/m
Operating lease right-of-use assets
36,659
38,142
35,315
(1,483
)
-3.9
%
1,344
3.8
%
Other assets
762,816
764,902
794,883
(2,086
)
-0.3
%
(32,067
)
-4.0
%
Total assets
$
18,376,612
$
18,722,189
$
18,877,178
$
(345,577
)
-1.8
%
$
(500,566
)
-2.7
%
Deposits: Noninterest-bearing
$
3,039,652
$
3,197,620
$
3,797,055
$
(157,968
)
-4.9
%
$
(757,403
)
-19.9
%
Interest-bearing
12,298,905
12,372,143
10,986,606
(73,238
)
-0.6
%
1,312,299
11.9
%
Total deposits
15,338,557
15,569,763
14,783,661
(231,206
)
-1.5
%
554,896
3.8
%
Fed funds purchased and repurchases
393,215
405,745
477,980
(12,530
)
-3.1
%
(84,765
)
-17.7
%
Other borrowings
482,027
483,230
1,485,181
(1,203
)
-0.2
%
(1,003,154
)
-67.5
%
Subordinated notes
123,537
123,482
123,317
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
33,865
34,057
34,596
(192
)
-0.6
%
(731
)
-2.1
%
Operating lease liabilities
40,185
41,584
37,988
(1,399
)
-3.4
%
2,197
5.8
%
Other liabilities
220,771
340,625
310,500
(119,854
)
-35.2
%
(89,729
)
-28.9
%
Total liabilities
16,694,013
17,060,342
17,315,079
(366,329
)
-2.1
%
(621,066
)
-3.6
%
Common stock
12,747
12,725
12,720
22
0.2
%
27
0.2
%
Capital surplus
160,521
159,688
155,297
833
0.5
%
5,224
3.4
%
Retained earnings
1,736,485
1,709,157
1,636,463
27,328
1.6
%
100,022
6.1
%
Accumulated other comprehensive income (loss), net of tax
(227,154
)
(219,723
)
(242,381
)
(7,431
)
-3.4
%
15,227
6.3
%
Total shareholders' equity
1,682,599
1,661,847
1,562,099
20,752
1.2
%
120,500
7.7
%
Total liabilities and equity
$
18,376,612
$
18,722,189
$
18,877,178
$
(345,577
)
-1.8
%
$
(500,566
)
-2.7
%
n/m - percentage changes greater than +/- 100% are considered not
meaningful
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED
FINANCIAL INFORMATION March 31, 2024 ($ in thousands
except per share data) (unaudited) Quarter
Ended Linked Quarter Year over Year
INCOME STATEMENTS
3/31/2024 12/31/2023 3/31/2023 $ Change
% Change $ Change % Change Interest and fees
on LHFS & LHFI-FTE
$
209,456
$
210,288
$
178,967
$
(832
)
-0.4
%
$
30,489
17.0
%
Interest on securities-taxable
15,634
15,936
16,761
(302
)
-1.9
%
(1,127
)
-6.7
%
Interest on securities-tax exempt-FTE
4
44
92
(40
)
-90.9
%
(88
)
-95.7
%
Interest on fed funds sold and reverse repurchases
1
2
30
(1
)
-50.0
%
(29
)
-96.7
%
Other interest income
8,110
9,918
6,527
(1,808
)
-18.2
%
1,583
24.3
%
Total interest income-FTE
233,205
236,188
202,377
(2,983
)
-1.3
%
30,828
15.2
%
Interest on deposits
83,716
80,847
40,898
2,869
3.5
%
42,818
n/m
Interest on fed funds purchased and repurchases
5,591
5,347
4,832
244
4.6
%
759
15.7
%
Other interest expense
7,703
9,946
15,575
(2,243
)
-22.6
%
(7,872
)
-50.5
%
Total interest expense
97,010
96,140
61,305
870
0.9
%
35,705
58.2
%
Net interest income-FTE
136,195
140,048
141,072
(3,853
)
-2.8
%
(4,877
)
-3.5
%
Provision for credit losses, LHFI
7,708
7,585
3,244
123
1.6
%
4,464
n/m
Provision for credit losses, off-balance sheet credit exposures
(192
)
(888
)
(2,242
)
696
78.4
%
2,050
91.4
%
Net interest income after provision-FTE
128,679
133,351
140,070
(4,672
)
-3.5
%
(11,391
)
-8.1
%
Service charges on deposit accounts
10,958
11,311
10,336
(353
)
-3.1
%
622
6.0
%
Bank card and other fees
7,428
8,502
7,803
(1,074
)
-12.6
%
(375
)
-4.8
%
Mortgage banking, net
8,915
5,519
7,639
3,396
61.5
%
1,276
16.7
%
Insurance commissions
15,464
13,197
14,305
2,267
17.2
%
1,159
8.1
%
Wealth management
8,952
8,657
8,780
295
3.4
%
172
2.0
%
Other, net
3,632
2,579
2,514
1,053
40.8
%
1,118
44.5
%
Securities gains (losses), net
—
39
—
(39
)
-100.0
%
—
n/m
Total noninterest income
55,349
49,804
51,377
5,545
11.1
%
3,972
7.7
%
Salaries and employee benefits
75,458
78,003
74,056
(2,545
)
-3.3
%
1,402
1.9
%
Services and fees
24,839
27,906
25,426
(3,067
)
-11.0
%
(587
)
-2.3
%
Net occupancy-premises
7,496
7,362
7,629
134
1.8
%
(133
)
-1.7
%
Equipment expense
6,385
6,517
6,405
(132
)
-2.0
%
(20
)
-0.3
%
Other expense
16,968
16,641
14,811
327
2.0
%
2,157
14.6
%
Total noninterest expense
131,146
136,429
128,327
(5,283
)
-3.9
%
2,819
2.2
%
Income before income taxes and tax eq adj
52,882
46,726
63,120
6,156
13.2
%
(10,238
)
-16.2
%
Tax equivalent adjustment
3,365
3,306
3,477
59
1.8
%
(112
)
-3.2
%
Income before income taxes
49,517
43,420
59,643
6,097
14.0
%
(10,126
)
-17.0
%
Income taxes
7,982
7,297
9,343
685
9.4
%
(1,361
)
-14.6
%
Net income
$
41,535
$
36,123
$
50,300
$
5,412
15.0
%
$
(8,765
)
-17.4
%
Per share data Earnings per share - basic
$
0.68
$
0.59
$
0.82
$
0.09
15.3
%
$
(0.14
)
-17.1
%
Earnings per share - diluted
$
0.68
$
0.59
$
0.82
$
0.09
15.3
%
$
(0.14
)
-17.1
%
Dividends per share
$
0.23
$
0.23
$
0.23
—
0.0
%
—
0.0
%
Weighted average shares outstanding Basic
61,128,425
61,070,481
61,011,059
Diluted
61,348,364
61,296,840
61,193,275
Period end shares outstanding
61,178,366
61,071,173
61,048,516
n/m - percentage changes greater than +/- 100% are considered not
meaningful
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED
FINANCIAL INFORMATION March 31, 2024 ($ in
thousands) (unaudited) Quarter Ended
Linked Quarter Year over Year NONPERFORMING ASSETS 3/31/2024
12/31/2023 3/31/2023 $ Change % Change
$ Change % Change Nonaccrual LHFI Alabama (1)
$
23,261
$
23,271
$
10,919
$
(10
)
0.0
%
$
12,342
n/m
Florida
585
170
256
415
n/m
329
n/m
Mississippi (2)
59,059
54,615
32,560
4,444
8.1
%
26,499
81.4
%
Tennessee (3)
1,800
1,802
5,416
(2
)
-0.1
%
(3,616
)
-66.8
%
Texas
13,646
20,150
23,224
(6,504
)
-32.3
%
(9,578
)
-41.2
%
Total nonaccrual LHFI
98,351
100,008
72,375
(1,657
)
-1.7
%
25,976
35.9
%
Other real estate Alabama (1)
1,050
1,397
—
(347
)
-24.8
%
1,050
n/m
Florida
71
—
—
71
n/m
71
n/m
Mississippi (2)
2,870
1,242
1,495
1,628
n/m
1,375
92.0
%
Tennessee (3)
86
—
189
86
n/m
(103
)
-54.5
%
Texas
3,543
4,228
—
(685
)
-16.2
%
3,543
n/m
Total other real estate
7,620
6,867
1,684
753
11.0
%
5,936
n/m
Total nonperforming assets
$
105,971
$
106,875
$
74,059
$
(904
)
-0.8
%
$
31,912
43.1
%
LOANS PAST DUE OVER 90
DAYS LHFI
$
5,243
$
5,790
$
2,255
$
(547
)
-9.4
%
$
2,988
n/m
LHFS-Guaranteed GNMA serviced loans (no obligation to
repurchase)
$
56,530
$
51,243
$
41,468
$
5,287
10.3
%
$
15,062
36.3
%
Quarter Ended Linked Quarter Year over
Year ACL LHFI
3/31/2024 12/31/2023 3/31/2023 $ Change
% Change $ Change % Change Beginning Balance
$
139,367
$
134,031
$
120,214
$
5,336
4.0
%
$
19,153
15.9
%
Provision for credit losses, LHFI
7,708
7,585
3,244
123
1.6
%
4,464
n/m
Charge-offs
(6,324
)
(4,250
)
(2,996
)
(2,074
)
-48.8
%
(3,328
)
n/m
Recoveries
2,247
2,001
1,777
246
12.3
%
470
26.4
%
Net (charge-offs) recoveries
(4,077
)
(2,249
)
(1,219
)
(1,828
)
-81.3
%
(2,858
)
n/m
Ending Balance
$
142,998
$
139,367
$
122,239
$
3,631
2.6
%
$
20,759
17.0
%
NET (CHARGE-OFFS)
RECOVERIES Alabama (1)
$
(341
)
$
(299
)
$
(268
)
$
(42
)
-14.0
%
$
(73
)
-27.2
%
Florida
277
180
(36
)
97
53.9
%
313
n/m
Mississippi (2)
(1,489
)
(1,943
)
(775
)
454
23.4
%
(714
)
-92.1
%
Tennessee (3)
(179
)
(193
)
(124
)
14
7.3
%
(55
)
-44.4
%
Texas
(2,345
)
6
(16
)
(2,351
)
n/m
(2,329
)
n/m
Total net (charge-offs) recoveries
$
(4,077
)
$
(2,249
)
$
(1,219
)
$
(1,828
)
-81.3
%
$
(2,858
)
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 March 31, 2024 ($ in
thousands) (unaudited) Quarter Ended
AVERAGE BALANCES
3/31/2024 12/31/2023 9/30/2023
6/30/2023 3/31/2023 Securities AFS-taxable
$
1,927,619
$
1,986,825
$
2,049,006
$
2,140,505
$
2,187,121
Securities AFS-nontaxable
—
4,246
4,779
4,796
4,812
Securities HTM-taxable
1,418,476
1,430,169
1,445,895
1,463,086
1,479,283
Securities HTM-nontaxable
340
340
907
1,718
4,509
Total securities
3,346,435
3,421,580
3,500,587
3,610,105
3,675,725
Loans (includes loans held for sale)
13,169,805
13,010,028
12,926,942
12,732,057
12,530,449
Fed funds sold and reverse repurchases
114
121
230
3,275
2,379
Other earning assets
571,215
670,477
682,644
903,027
647,760
Total earning assets
17,087,569
17,102,206
17,110,403
17,248,464
16,856,313
ACL LHFI
(138,711
)
(133,742
)
(127,915
)
(121,960
)
(119,978
)
Other assets
1,730,521
1,749,069
1,721,310
1,648,583
1,762,449
Total assets
$
18,679,379
$
18,717,533
$
18,703,798
$
18,775,087
$
18,498,784
Interest-bearing demand deposits
$
5,291,779
$
5,053,935
$
4,875,714
$
4,803,737
$
4,751,154
Savings deposits
3,686,027
3,526,600
3,642,158
4,002,134
4,193,764
Time deposits
3,321,601
3,427,384
3,075,224
2,335,752
1,907,449
Total interest-bearing deposits
12,299,407
12,007,919
11,593,096
11,141,623
10,852,367
Fed funds purchased and repurchases
428,127
403,041
414,696
389,834
436,535
Other borrowings
463,459
590,765
912,151
1,330,010
1,110,843
Subordinated notes
123,501
123,446
123,391
123,337
123,281
Junior subordinated debt securities
61,856
61,856
61,856
61,856
61,856
Total interest-bearing liabilities
13,376,350
13,187,027
13,105,190
13,046,660
12,584,882
Noninterest-bearing deposits
3,120,566
3,296,351
3,429,815
3,595,927
3,813,248
Other liabilities
505,942
641,662
585,908
552,209
576,826
Total liabilities
17,002,858
17,125,040
17,120,913
17,194,796
16,974,956
Shareholders' equity
1,676,521
1,592,493
1,582,885
1,580,291
1,523,828
Total liabilities and equity
$
18,679,379
$
18,717,533
$
18,703,798
$
18,775,087
$
18,498,784
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED
FINANCIAL INFORMATION March 31, 2024 ($ in
thousands) (unaudited) PERIOD END BALANCES 3/31/2024
12/31/2023 9/30/2023 6/30/2023
3/31/2023 Cash and due from banks
$
606,261
$
975,543
$
750,492
$
832,052
$
1,297,144
Securities available for sale
1,702,299
1,762,878
1,766,174
1,871,883
1,984,162
Securities held to maturity
1,415,025
1,426,279
1,438,287
1,458,665
1,474,338
LHFS
172,937
184,812
169,244
181,094
175,926
LHFI
13,057,943
12,950,524
12,810,259
12,613,967
12,497,195
ACL LHFI
(142,998
)
(139,367
)
(134,031
)
(129,298
)
(122,239
)
Net LHFI
12,914,945
12,811,157
12,676,228
12,484,669
12,374,956
Premises and equipment, net
232,924
232,537
230,718
227,630
223,975
Mortgage servicing rights
138,044
131,870
142,379
134,350
127,206
Goodwill
384,237
384,237
384,237
384,237
384,237
Identifiable intangible assets
2,845
2,965
3,093
3,222
3,352
Other real estate
7,620
6,867
5,485
1,137
1,684
Operating lease right-of-use assets
36,659
38,142
39,639
38,179
35,315
Other assets
762,816
764,902
784,863
805,508
794,883
Total assets
$
18,376,612
$
18,722,189
$
18,390,839
$
18,422,626
$
18,877,178
Deposits: Noninterest-bearing
$
3,039,652
$
3,197,620
$
3,320,124
$
3,461,073
$
3,797,055
Interest-bearing
12,298,905
12,372,143
11,781,799
11,452,827
10,986,606
Total deposits
15,338,557
15,569,763
15,101,923
14,913,900
14,783,661
Fed funds purchased and repurchases
393,215
405,745
321,799
311,179
477,980
Other borrowings
482,027
483,230
793,193
1,056,714
1,485,181
Subordinated notes
123,537
123,482
123,427
123,372
123,317
Junior subordinated debt securities
61,856
61,856
61,856
61,856
61,856
ACL on off-balance sheet credit exposures
33,865
34,057
34,945
34,841
34,596
Operating lease liabilities
40,185
41,584
42,730
40,845
37,988
Other liabilities
220,771
340,625
340,615
308,726
310,500
Total liabilities
16,694,013
17,060,342
16,820,488
16,851,433
17,315,079
Common stock
12,747
12,725
12,724
12,724
12,720
Capital surplus
160,521
159,688
158,316
156,834
155,297
Retained earnings
1,736,485
1,709,157
1,687,199
1,667,339
1,636,463
Accumulated other comprehensive income (loss), net of tax
(227,154
)
(219,723
)
(287,888
)
(265,704
)
(242,381
)
Total shareholders' equity
1,682,599
1,661,847
1,570,351
1,571,193
1,562,099
Total liabilities and equity
$
18,376,612
$
18,722,189
$
18,390,839
$
18,422,626
$
18,877,178
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED
FINANCIAL INFORMATION March 31, 2024 ($ in thousands
except per share data) (unaudited) Quarter
Ended INCOME STATEMENTS
3/31/2024 12/31/2023 9/30/2023
6/30/2023 3/31/2023 Interest and fees on LHFS &
LHFI-FTE
$
209,456
$
210,288
$
206,523
$
192,941
$
178,967
Interest on securities-taxable
15,634
15,936
16,624
16,779
16,761
Interest on securities-tax exempt-FTE
4
44
58
69
92
Interest on fed funds sold and reverse repurchases
1
2
3
45
30
Other interest income
8,110
9,918
8,613
12,077
6,527
Total interest income-FTE
233,205
236,188
231,821
221,911
202,377
Interest on deposits
83,716
80,847
69,797
54,409
40,898
Interest on fed funds purchased and repurchases
5,591
5,347
5,375
4,865
4,832
Other interest expense
7,703
9,946
14,713
19,350
15,575
Total interest expense
97,010
96,140
89,885
78,624
61,305
Net interest income-FTE
136,195
140,048
141,936
143,287
141,072
Provision for credit losses, LHFI
7,708
7,585
8,322
8,211
3,244
Provision for credit losses, off-balance sheet credit exposures
(192
)
(888
)
104
245
(2,242
)
Net interest income after provision-FTE
128,679
133,351
133,510
134,831
140,070
Service charges on deposit accounts
10,958
11,311
11,074
10,695
10,336
Bank card and other fees
7,428
8,502
8,217
8,917
7,803
Mortgage banking, net
8,915
5,519
6,458
6,600
7,639
Insurance commissions
15,464
13,197
15,303
14,764
14,305
Wealth management
8,952
8,657
8,773
8,882
8,780
Other, net
3,632
2,579
2,399
3,695
2,514
Securities gains (losses), net
—
39
—
—
—
Total noninterest income
55,349
49,804
52,224
53,553
51,377
Salaries and employee benefits
75,458
78,003
76,666
75,940
74,056
Services and fees
24,839
27,906
27,882
28,264
25,426
Net occupancy-premises
7,496
7,362
7,383
7,108
7,629
Equipment expense
6,385
6,517
6,816
6,404
6,405
Litigation settlement expense
—
—
6,500
—
—
Other expense
16,968
16,641
15,698
14,502
14,811
Total noninterest expense
131,146
136,429
140,945
132,218
128,327
Income before income taxes and tax eq adj
52,882
46,726
44,789
56,166
63,120
Tax equivalent adjustment
3,365
3,306
3,299
3,383
3,477
Income before income taxes
49,517
43,420
41,490
52,783
59,643
Income taxes
7,982
7,297
7,461
7,746
9,343
Net income
$
41,535
$
36,123
$
34,029
$
45,037
$
50,300
Per share data Earnings per share - basic
$
0.68
$
0.59
$
0.56
$
0.74
$
0.82
Earnings per share - diluted
$
0.68
$
0.59
$
0.56
$
0.74
$
0.82
Dividends per share
$
0.23
$
0.23
$
0.23
$
0.23
$
0.23
Weighted average shares outstanding Basic
61,128,425
61,070,481
61,069,750
61,063,277
61,011,059
Diluted
61,348,364
61,296,840
61,263,032
61,230,031
61,193,275
Period end shares outstanding
61,178,366
61,071,173
61,070,095
61,069,036
61,048,516
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED
FINANCIAL INFORMATION March 31, 2024 ($ in
thousands) (unaudited) Quarter Ended
NONPERFORMING ASSETS
3/31/2024 12/31/2023 9/30/2023
6/30/2023 3/31/2023 Nonaccrual LHFI Alabama (1)
$
23,261
$
23,271
$
23,530
$
11,058
$
10,919
Florida
585
170
151
334
256
Mississippi (2)
59,059
54,615
45,050
36,288
32,560
Tennessee (3)
1,800
1,802
1,841
5,088
5,416
Texas
13,646
20,150
20,327
22,259
23,224
Total nonaccrual LHFI
98,351
100,008
90,899
75,027
72,375
Other real estate Alabama (1)
1,050
1,397
315
—
—
Florida
71
—
—
—
—
Mississippi (2)
2,870
1,242
942
1,137
1,495
Tennessee (3)
86
—
—
—
189
Texas
3,543
4,228
4,228
—
—
Total other real estate
7,620
6,867
5,485
1,137
1,684
Total nonperforming assets
$
105,971
$
106,875
$
96,384
$
76,164
$
74,059
LOANS PAST DUE OVER 90
DAYS LHFI
$
5,243
$
5,790
$
3,804
$
3,911
$
2,255
LHFS-Guaranteed GNMA serviced loans (no obligation to
repurchase)
$
56,530
$
51,243
$
42,532
$
35,766
$
41,468
Quarter Ended ACL
LHFI 3/31/2024 12/31/2023 9/30/2023
6/30/2023 3/31/2023 Beginning Balance
$
139,367
$
134,031
$
129,298
$
122,239
$
120,214
Provision for credit losses, LHFI
7,708
7,585
8,322
8,211
3,244
Charge-offs
(6,324
)
(4,250
)
(7,496
)
(2,773
)
(2,996
)
Recoveries
2,247
2,001
3,907
1,621
1,777
Net (charge-offs) recoveries
(4,077
)
(2,249
)
(3,589
)
(1,152
)
(1,219
)
Ending Balance
$
142,998
$
139,367
$
134,031
$
129,298
$
122,239
NET (CHARGE-OFFS)
RECOVERIES Alabama (1)
$
(341
)
$
(299
)
$
(165
)
$
(141
)
$
(268
)
Florida
277
180
21
(35
)
(36
)
Mississippi (2)
(1,489
)
(1,943
)
(1,867
)
(762
)
(775
)
Tennessee (3)
(179
)
(193
)
2,127
(166
)
(124
)
Texas
(2,345
)
6
(3,705
)
(48
)
(16
)
Total net (charge-offs) recoveries
$
(4,077
)
$
(2,249
)
$
(3,589
)
$
(1,152
)
$
(1,219
)
(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 March 31, 2024 (unaudited)
Quarter Ended FINANCIAL RATIOS AND OTHER DATA
3/31/2024 12/31/2023 9/30/2023
6/30/2023 3/31/2023 Return on average equity
9.96
%
9.00
%
8.53
%
11.43
%
13.39
%
Return on average tangible equity
12.98
%
11.92
%
11.32
%
15.18
%
18.03
%
Return on average assets
0.89
%
0.77
%
0.72
%
0.96
%
1.10
%
Interest margin - Yield - FTE
5.49
%
5.48
%
5.38
%
5.16
%
4.87
%
Interest margin - Cost
2.28
%
2.23
%
2.08
%
1.83
%
1.47
%
Net interest margin - FTE
3.21
%
3.25
%
3.29
%
3.33
%
3.39
%
Efficiency ratio (1)
67.25
%
70.25
%
68.33
%
66.17
%
65.60
%
Full-time equivalent employees
2,712
2,757
2,756
2,761
2,758
CREDIT QUALITY RATIOS
Net (recoveries) charge-offs / average loans
0.12
%
0.07
%
0.11
%
0.04
%
0.04
%
Provision for credit losses, LHFI / average loans
0.24
%
0.23
%
0.26
%
0.26
%
0.10
%
Nonaccrual LHFI / (LHFI + LHFS)
0.74
%
0.76
%
0.70
%
0.59
%
0.57
%
Nonperforming assets / (LHFI + LHFS)
0.80
%
0.81
%
0.74
%
0.60
%
0.58
%
Nonperforming assets / (LHFI + LHFS + other real estate)
0.80
%
0.81
%
0.74
%
0.60
%
0.58
%
ACL LHFI / LHFI
1.10
%
1.08
%
1.05
%
1.03
%
0.98
%
ACL LHFI-commercial / commercial LHFI
0.93
%
0.85
%
0.86
%
0.84
%
0.80
%
ACL LHFI-consumer / consumer and home mortgage LHFI
1.63
%
1.81
%
1.66
%
1.60
%
1.54
%
ACL LHFI / nonaccrual LHFI
145.39
%
139.36
%
147.45
%
172.34
%
168.90
%
ACL LHFI / nonaccrual LHFI (excl individually analyzed loans)
235.29
%
249.31
%
273.60
%
301.44
%
320.80
%
CAPITAL RATIOS Total
equity / total assets
9.16
%
8.88
%
8.54
%
8.53
%
8.28
%
Tangible equity / tangible assets
7.20
%
6.95
%
6.57
%
6.56
%
6.35
%
Tangible equity / risk-weighted assets
8.49
%
8.41
%
7.81
%
7.91
%
7.94
%
Tier 1 leverage ratio
8.76
%
8.62
%
8.49
%
8.35
%
8.29
%
Common equity tier 1 capital ratio
10.12
%
10.04
%
9.89
%
9.87
%
9.76
%
Tier 1 risk-based capital ratio
10.51
%
10.44
%
10.29
%
10.27
%
10.17
%
Total risk-based capital ratio
12.42
%
12.29
%
12.11
%
12.08
%
11.95
%
STOCK PERFORMANCE Market
value-Close
$
28.11
$
27.88
$
21.73
$
21.12
$
24.70
Book value
$
27.50
$
27.21
$
25.71
$
25.73
$
25.59
Tangible book value
$
21.18
$
20.87
$
19.37
$
19.38
$
19.24
(1) See Note 6 – 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 March 31, 2024 ($ in
thousands) (unaudited)
Note 1 - Securities Available for Sale and Held to
Maturity
The following table is a summary of the estimated fair value of
securities available for sale and the amortized cost of securities
held to maturity:
3/31/2024
12/31/2023
9/30/2023
6/30/2023
3/31/2023
SECURITIES
AVAILABLE FOR SALE
U.S. Treasury securities
$
372,424
$
372,368
$
363,476
$
362,966
$
386,903
U.S. Government agency obligations
5,594
5,792
6,780
6,999
7,254
Obligations of states and political
subdivisions
—
—
4,642
4,813
4,907
Mortgage-backed securities
Residential mortgage pass-through
securities
Guaranteed by GNMA
22,232
23,135
22,881
25,336
26,851
Issued by FNMA and FHLMC
1,129,521
1,176,798
1,171,521
1,250,435
1,317,848
Other residential mortgage-backed
securities
Issued or guaranteed by FNMA, FHLMC, or
GNMA
79,099
86,074
90,402
98,388
108,192
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or
GNMA
93,429
98,711
106,472
122,946
132,207
Total securities available for sale
$
1,702,299
$
1,762,878
$
1,766,174
$
1,871,883
$
1,984,162
SECURITIES HELD
TO MATURITY
U.S. Treasury securities
$
29,261
$
29,068
$
28,872
$
28,679
$
28,486
Obligations of states and political
subdivisions
340
340
341
1,180
4,507
Mortgage-backed securities
Residential mortgage pass-through
securities
Guaranteed by GNMA
18,387
13,005
13,090
13,235
4,336
Issued by FNMA and FHLMC
461,457
469,593
474,003
484,679
497,854
Other residential mortgage-backed
securities
Issued or guaranteed by FNMA, FHLMC, or
GNMA
146,447
154,466
162,031
171,002
179,334
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or
GNMA
759,133
759,807
759,950
759,890
759,821
Total securities held to maturity
$
1,415,025
$
1,426,279
$
1,438,287
$
1,458,665
$
1,474,338
At March 31, 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 $54.8
million.
Management continues to focus on asset quality as one of the
strategic goals of the securities portfolio, which is evidenced by
the investment of 99.99% of the portfolio in GSE-backed obligations
and other Aaa rated securities as determined by Moody’s. None of
the securities owned by Trustmark are collateralized by assets
which are considered sub-prime. Furthermore, outside of stock
ownership in the Federal Home Loan Bank of Dallas, Federal Home
Loan Bank of Atlanta and Federal Reserve Bank, Trustmark does not
hold any other equity investment in a GSE.
TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO
CONSOLIDATED FINANCIALS March 31, 2024 ($ in
thousands) (unaudited)
Note 2 – Loan Composition
LHFI consisted of the following during the periods
presented:
LHFI BY
TYPE
3/31/2024
12/31/2023
9/30/2023
6/30/2023
3/31/2023
Loans secured by real estate:
Construction, land development and other
land loans
$
1,539,461
$
1,510,679
$
1,609,326
$
1,722,657
$
1,723,772
Secured by 1-4 family residential
properties
2,891,481
2,904,715
2,893,606
2,854,182
2,822,048
Secured by nonfarm, nonresidential
properties
3,543,235
3,489,434
3,569,671
3,471,728
3,375,579
Other real estate secured
1,384,610
1,312,551
1,218,499
954,410
847,527
Commercial and industrial loans
1,922,711
1,922,910
1,828,924
1,883,480
1,882,360
Consumer loans
156,430
161,725
161,940
163,788
162,911
State and other political subdivision
loans
1,052,844
1,088,466
1,056,569
1,111,710
1,193,727
Other loans and leases
567,171
560,044
471,724
452,012
489,271
LHFI
13,057,943
12,950,524
12,810,259
12,613,967
12,497,195
ACL LHFI
(142,998
)
(139,367
)
(134,031
)
(129,298
)
(122,239
)
Net LHFI
$
12,914,945
$
12,811,157
$
12,676,228
$
12,484,669
$
12,374,956
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:
March 31, 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
$
1,539,461
$
753,918
$
38,790
$
391,843
$
40,988
$
313,922
Secured by 1-4 family residential
properties
2,891,481
154,303
54,099
2,565,424
83,292
34,363
Secured by nonfarm, nonresidential
properties
3,543,235
981,921
233,109
1,485,304
150,017
692,884
Other real estate secured
1,384,610
561,115
1,728
417,757
6,965
397,045
Commercial and industrial loans
1,922,711
657,294
23,941
841,797
150,313
249,366
Consumer loans
156,430
21,302
7,399
95,951
18,178
13,600
State and other political subdivision
loans
1,052,844
70,161
52,069
782,985
23,700
123,929
Other loans and leases
567,171
236,775
8,202
200,957
57,098
64,139
Loans
$
13,057,943
$
3,436,789
$
419,337
$
6,782,018
$
530,551
$
1,889,248
CONSTRUCTION,
LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION
Lots
$
70,445
$
28,830
$
8,196
$
17,829
$
4,587
$
11,003
Development
122,788
56,825
1,260
28,668
12,576
23,459
Unimproved land
110,272
20,907
13,404
29,759
8,006
38,196
1-4 family construction
313,503
162,760
13,501
91,453
15,693
30,096
Other construction
922,453
484,596
2,429
224,134
126
211,168
Construction, land development and other
land loans
$
1,539,461
$
753,918
$
38,790
$
391,843
$
40,988
$
313,922
(1)
Includes Georgia Loan Production
Office.
TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO
CONSOLIDATED FINANCIALS March 31, 2024 ($ in
thousands) (unaudited)
Note 2 – Loan Composition (continued)
March 31, 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
$
367,575
$
139,444
$
24,147
$
106,123
$
17,381
$
80,480
Office
261,984
101,364
19,605
73,689
1,617
65,709
Hotel/motel
255,925
128,356
48,992
53,054
25,523
—
Mini-storage
165,962
40,724
1,864
103,323
745
19,306
Industrial
438,626
83,304
19,377
147,199
8,143
180,603
Health care
97,837
69,786
684
24,707
331
2,329
Convenience stores
25,572
3,214
419
13,599
239
8,101
Nursing homes/senior living
513,854
227,254
—
186,507
4,724
95,369
Other
109,838
31,790
9,067
51,626
8,211
9,144
Total non-owner occupied loans
2,237,173
825,236
124,155
759,827
66,914
461,041
Owner-occupied:
Office
150,283
41,047
37,629
41,658
11,555
18,394
Churches
56,697
14,208
4,094
32,706
3,215
2,474
Industrial warehouses
156,148
11,553
4,537
39,874
15,766
84,418
Health care
124,330
11,337
8,163
85,172
2,251
17,407
Convenience stores
148,158
12,172
29,156
72,715
—
34,115
Retail
88,445
9,457
15,287
35,730
17,087
10,884
Restaurants
48,491
4,008
2,930
21,360
16,367
3,826
Auto dealerships
42,394
5,138
194
21,007
16,055
—
Nursing homes/senior living
353,641
35,216
—
292,264
—
26,161
Other
137,475
12,549
6,964
82,991
807
34,164
Total owner-occupied loans
1,306,062
156,685
108,954
725,477
83,103
231,843
Loans secured by nonfarm, nonresidential
properties
$
3,543,235
$
981,921
$
233,109
$
1,485,304
$
150,017
$
692,884
(1)
Includes Georgia Loan Production
Office.
Note 3 – 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
3/31/2024
12/31/2023
9/30/2023
6/30/2023
3/31/2023
Securities – taxable
1.88
%
1.85
%
1.89
%
1.87
%
1.85
%
Securities – nontaxable
4.73
%
3.81
%
4.05
%
4.25
%
4.00
%
Securities – total
1.88
%
1.85
%
1.89
%
1.87
%
1.86
%
LHFI & LHFS
6.40
%
6.41
%
6.34
%
6.08
%
5.79
%
Fed funds sold & reverse
repurchases
3.53
%
6.56
%
5.17
%
5.51
%
5.11
%
Other earning assets
5.71
%
5.87
%
5.01
%
5.36
%
4.09
%
Total earning assets
5.49
%
5.48
%
5.38
%
5.16
%
4.87
%
Interest-bearing deposits
2.74
%
2.67
%
2.39
%
1.96
%
1.53
%
Fed funds purchased & repurchases
5.25
%
5.26
%
5.14
%
5.01
%
4.49
%
Other borrowings
4.78
%
5.08
%
5.32
%
5.12
%
4.87
%
Total interest-bearing liabilities
2.92
%
2.89
%
2.72
%
2.42
%
1.98
%
Total Deposits
2.18
%
2.10
%
1.84
%
1.48
%
1.13
%
Net interest margin
3.21
%
3.25
%
3.29
%
3.33
%
3.39
%
TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO
CONSOLIDATED FINANCIALS March 31, 2024 ($ in
thousands) (unaudited)
Note 3 – 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 decreased four basis points when
compared to the fourth quarter of 2023, totaling 3.21% for the
first quarter of 2024, primarily due to increased costs of
interest-bearing deposits which resulted from the higher interest
rate environment.
Note 4 – 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 $1.1
million during the first quarter of 2024.
The following table illustrates the components of mortgage
banking revenues included in noninterest income in the accompanying
income statements:
Quarter Ended
3/31/2024
12/31/2023
9/30/2023
6/30/2023
3/31/2023
Mortgage servicing income, net
$
6,934
$
6,731
$
6,916
$
6,764
$
6,785
Change in fair value-MSR from runoff
(1,926
)
(2,972
)
(3,203
)
(2,710
)
(1,145
)
Gain on sales of loans, net.
5,009
3,913
3,748
3,887
3,797
Mortgage banking income before hedge
ineffectiveness
10,017
7,672
7,461
7,941
9,437
Change in fair value-MSR from market
changes
5,123
(10,224
)
6,809
5,898
(3,972
)
Change in fair value of derivatives
(6,225
)
8,071
(7,812
)
(7,239
)
2,174
Net positive (negative) hedge
ineffectiveness
(1,102
)
(2,153
)
(1,003
)
(1,341
)
(1,798
)
Mortgage banking, net
$
8,915
$
5,519
$
6,458
$
6,600
$
7,639
TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO
CONSOLIDATED FINANCIALS March 31, 2024 ($ in
thousands) (unaudited)
Note 5 – Other Noninterest Income and Expense
Other noninterest income consisted of the following for the
periods presented:
Quarter Ended
3/31/2024
12/31/2023
9/30/2023
6/30/2023
3/31/2023
Partnership amortization for tax credit
purposes
$
(1,834
)
$
(2,013
)
$
(1,995
)
$
(2,019
)
$
(1,961
)
Increase in life insurance cash surrender
value
1,844
1,825
1,784
1,716
1,693
Other miscellaneous income
3,622
2,767
2,610
3,998
2,782
Total other, net
$
3,632
$
2,579
$
2,399
$
3,695
$
2,514
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
3/31/2024
12/31/2023
9/30/2023
6/30/2023
3/31/2023
Loan expense
$
2,955
$
2,380
$
3,130
$
3,066
$
2,538
Amortization of intangibles
120
128
129
130
288
FDIC assessment expense
4,509
4,844
3,765
2,550
2,370
Other real estate expense, net
671
(184
)
(40
)
171
172
Other miscellaneous expense
8,713
9,473
8,714
8,585
9,443
Total other expense
$
16,968
$
16,641
$
15,698
$
14,502
$
14,811
Note 6 – 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 March 31, 2024 ($ in
thousands except per share data) (unaudited)
Note 6 – Non-GAAP Financial Measures (continued)
Quarter Ended
3/31/2024
12/31/2023
9/30/2023
6/30/2023
3/31/2023
TANGIBLE
EQUITY
AVERAGE BALANCES
Total shareholders' equity
$
1,676,521
$
1,592,493
$
1,582,885
$
1,580,291
$
1,523,828
Less: Goodwill
(384,237
)
(384,237
)
(384,237
)
(384,237
)
(384,237
)
Identifiable intangible assets
(2,920
)
(3,044
)
(3,174
)
(3,301
)
(3,523
)
Total average tangible equity
$
1,289,364
$
1,205,212
$
1,195,474
$
1,192,753
$
1,136,068
PERIOD END BALANCES
Total shareholders' equity
$
1,682,599
$
1,661,847
$
1,570,351
$
1,571,193
$
1,562,099
Less: Goodwill
(384,237
)
(384,237
)
(384,237
)
(384,237
)
(384,237
)
Identifiable intangible assets
(2,845
)
(2,965
)
(3,093
)
(3,222
)
(3,352
)
Total tangible equity
(a)
$
1,295,517
$
1,274,645
$
1,183,021
$
1,183,734
$
1,174,510
TANGIBLE
ASSETS
Total assets
$
18,376,612
$
18,722,189
$
18,390,839
$
18,422,626
$
18,877,178
Less: Goodwill
(384,237
)
(384,237
)
(384,237
)
(384,237
)
(384,237
)
Identifiable intangible assets
(2,845
)
(2,965
)
(3,093
)
(3,222
)
(3,352
)
Total tangible assets
(b)
$
17,989,530
$
18,334,987
$
18,003,509
$
18,035,167
$
18,489,589
Risk-weighted assets
(c)
$
15,257,385
$
15,153,263
$
15,143,531
$
14,966,614
$
14,793,893
NET INCOME (LOSS)
ADJUSTED FOR INTANGIBLE AMORTIZATION
Net income (loss)
$
41,535
$
36,123
$
34,029
$
45,037
$
50,300
Plus: Intangible amortization net of
tax
90
96
96
97
216
Net income (loss) adjusted for intangible
amortization
$
41,625
$
36,219
$
34,125
$
45,134
$
50,516
Period end common shares outstanding
(d)
61,178,366
61,071,173
61,070,095
61,069,036
61,048,516
TANGIBLE COMMON
EQUITY MEASUREMENTS
Return on average tangible equity (1)
12.98
%
11.92
%
11.32
%
15.18
%
18.03
%
Tangible equity/tangible assets
(a)/(b)
7.20
%
6.95
%
6.57
%
6.56
%
6.35
%
Tangible equity/risk-weighted assets
(a)/(c)
8.49
%
8.41
%
7.81
%
7.91
%
7.94
%
Tangible book value
(a)/(d)*1,000
$
21.18
$
20.87
$
19.37
$
19.38
$
19.24
COMMON EQUITY
TIER 1 CAPITAL (CET1)
Total shareholders' equity
$
1,682,599
$
1,661,847
$
1,570,351
$
1,571,193
$
1,562,099
CECL transition adjustment
6,500
13,000
13,000
13,000
13,000
AOCI-related adjustments
227,154
219,723
287,888
265,704
242,381
CET1 adjustments and deductions:
Goodwill net of associated deferred tax
liabilities (DTLs)
(370,205
)
(370,212
)
(370,219
)
(370,227
)
(370,234
)
Other adjustments and deductions for CET1
(2)
(2,588
)
(2,693
)
(2,803
)
(2,915
)
(3,275
)
CET1 capital
(e)
1,543,460
1,521,665
1,498,217
1,476,755
1,443,971
Additional tier 1 capital instruments plus
related surplus
60,000
60,000
60,000
60,000
60,000
Tier 1 capital
$
1,603,460
$
1,581,665
$
1,558,217
$
1,536,755
$
1,503,971
Common equity tier 1 capital ratio
(e)/(c)
10.12
%
10.04
%
9.89
%
9.87
%
9.76
%
(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 March 31, 2024 ($ in
thousands except per share data) (unaudited)
Note 6 – 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
3/31/2024
12/31/2023
9/30/2023
6/30/2023
3/31/2023
Net interest income (GAAP)
$
132,830
$
136,742
$
138,637
$
139,904
$
137,595
Noninterest income (GAAP)
55,349
49,804
52,224
53,553
51,377
Pre-provision revenue
(a)
$
188,179
$
186,546
$
190,861
$
193,457
$
188,972
Noninterest expense (GAAP)
$
131,146
$
136,429
$
140,945
$
132,218
$
128,327
Less:
Reduction in force expense
—
(1,406
)
—
—
—
Litigation settlement expense
—
—
(6,500
)
—
—
Adjusted noninterest expense - PPNR
(Non-GAAP)
(b)
$
131,146
$
135,023
$
134,445
$
132,218
$
128,327
PPNR (Non-GAAP)
(a)-(b)
$
57,033
$
51,523
$
56,416
$
61,239
$
60,645
The following table presents Trustmark’s calculation of its
efficiency ratio for the periods presented:
Quarter Ended
3/31/2024
12/31/2023
9/30/2023
6/30/2023
3/31/2023
Total noninterest expense (GAAP)
$
131,146
$
136,429
$
140,945
$
132,218
$
128,327
Less:
Other real estate expense, net
(671
)
184
40
(171
)
(172
)
Amortization of intangibles
(120
)
(128
)
(129
)
(130
)
(288
)
Charitable contributions resulting in
state tax credits
(300
)
(325
)
(325
)
(325
)
(325
)
Reduction in force expense
—
(1,406
)
—
—
—
Litigation settlement expense
—
—
(6,500
)
—
—
Adjusted noninterest expense
(Non-GAAP)
(c)
$
130,055
$
134,754
$
134,031
$
131,592
$
127,542
Net interest income (GAAP)
$
132,830
$
136,742
$
138,637
$
139,904
$
137,595
Add:
Tax equivalent adjustment
3,365
3,306
3,299
3,383
3,477
Net interest income-FTE (Non-GAAP)
(a)
$
136,195
$
140,048
$
141,936
$
143,287
$
141,072
Noninterest income (GAAP)
$
55,349
$
49,804
$
52,224
$
53,553
$
51,377
Add:
Partnership amortization for tax credit
purposes
1,834
2,013
1,995
2,019
1,961
Less:
Securities (gains) losses, net
—
(39
)
—
—
—
Adjusted noninterest income (Non-GAAP)
(b)
$
57,183
$
51,778
$
54,219
$
55,572
$
53,338
Adjusted revenue (Non-GAAP)
(a)+(b)
$
193,378
$
191,826
$
196,155
$
198,859
$
194,410
Efficiency ratio (Non-GAAP)
(c)/((a)+(b))
67.25
%
70.25
%
68.33
%
66.17
%
65.60
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240423449062/en/
Trustmark Investor Contacts: Thomas C. Owens Treasurer
and Principal Financial Officer 601-208-7853
F. Joseph Rein, Jr. Senior Vice President 601-208-6898
Trustmark Media Contact: Melanie A. Morgan Senior Vice
President 601-208-2979
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