Company Website:
http://www.trustmark.com
JACKSON, Miss. -- (Business Wire)
Trustmark Corporation (NASDAQ:TRMK) reported net income of $36.3 million
in the third quarter of 2018, representing diluted earnings per share of
$0.54, an increase of 5.9% year-over-year. This level of earnings
resulted in a return on average tangible equity of 12.26% and a return
on average assets of 1.07%. Trustmark’s Board of Directors declared a
quarterly cash dividend of $0.23 per share payable December 15, 2018, to
shareholders of record on December 1, 2018.
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Third Quarter Highlights
-
Revenue, excluding interest and fees on acquired loans, increased 1.7%
linked-quarter and 5.8% year-over-year to total $150.0 million
-
The net interest margin (FTE), excluding acquired loans, was 3.50% in
the third quarter, up 4 basis points from the prior quarter and 16
basis points year-over-year
-
Core noninterest expense, which excludes other real estate expense and
intangible amortization, totaled $102.8 million, up 0.2% from the
prior quarter and 2.1% year-over-year
Gerard R. Host, President and CEO, stated, “Our third quarter
performance continues to reflect our strategic priorities of profitable
revenue generation, process improvement and disciplined expense
management. During the quarter, we continued to expand banking
relationships as well as attract new insurance and wealth management
clients. We are privileged to have a #1 deposit share ranking in not
only the Jackson metropolitan area, but also the state of Mississippi
and, across the franchise, a top-four deposit share ranking in 68% of
counties served. Trustmark remains well positioned to continue meeting
the needs of our customers and creating long-term value for our
shareholders.”
Balance Sheet Management
-
Loan growth moderated during the quarter
-
Improved composition of average earnings assets as loans replaced
maturing investment securities
-
Average loans represented 81.8% of average deposits in the third
quarter
Loans held for investment totaled $8.7 billion at September 30, 2018,
reflecting an increase of $68.0 million, or 0.8%, linked-quarter and
$339.7 million, or 4.0%, from the prior year. During the quarter, growth
in residential loans ($58.5 million), other real estate loans ($56.1
million), consumer loans ($7.4 million) and other political subdivision
loans ($3.7 million) was offset in part by declines in loans secured by
nonfarm, nonresidential properties ($27.4 million), other loans ($16.3
million), construction, land development and other land loans ($7.3
million) and commercial and industrial loans ($6.8 million).
Deposits totaled $11.0 billion at September 30, 2018, down $115.5
million, or 1.0%, from the prior quarter and up $725.2 million, or 7.1%,
from one year earlier. The linked-quarter decline is attributable
primarily to a seasonal decline in public funds.
Trustmark’s capital position remained solid, reflecting the consistent
profitability of its diversified financial services businesses. At
September 30, 2018, Trustmark’s tangible equity to tangible assets ratio
was 9.26%, while the total risk-based capital ratio was 13.61%. During
the first nine months of 2018, Trustmark repurchased $7.9 million of its
common shares. At September 30, 2018, Trustmark had $91.4 million in
remaining authority under its existing stock repurchase program, which
expires March 31, 2019.
Credit Quality
-
Nonperforming assets increased 3.2% from the prior quarter and
declined 11.3% year-over-year
-
Other real estate declined 8.0% from the prior quarter and 24.6%
year-over-year
-
Allowance for loan losses represented 339.79% of nonperforming loans,
excluding specifically reviewed impaired loans
Nonperforming loans totaled $67.8 million at September 30, 2018, up $6.5
million from the prior quarter and down $1.5 million year-over-year. The
linked-quarter increase in nonperforming loans is due to two specific
credits, one, a shared national credit in the limited-service restaurant
industry and the other a credit in the healthcare industry. Other real
estate totaled $36.5 million, declining $3.2 million from the prior
quarter and $11.9 million from the same period one year earlier.
Collectively, nonperforming assets totaled $104.3 million, reflecting a
linked-quarter increase of 3.2% and year-over-year decrease of 11.3%.
Net charge-offs increased $2.5 million in the third quarter primarily
due to a write-down on one credit for which reserves had previously been
established.
The provision for loan losses totaled $8.7 million in the third quarter
and was driven entirely by specific reserves on two impaired loans, one
of which is the shared national credit in the limited-service restaurant
industry referenced above. The remainder of the provision was
attributable to a previously impaired loan to an industrial parts
distributor.
Allocation of Trustmark's $88.9 million allowance for loan losses
represented 1.13% of commercial loans and 0.63% of consumer and home
mortgage loans, resulting in an allowance to total loans held for
investment of 1.02% at September 30, 2018, representing a level
management considers commensurate with the inherent risk in the loan
portfolio. Collectively, the allowance for both held for investment and
acquired loan losses represented 1.02% of total loans, which includes
held for investment and acquired loans.
Unless otherwise noted, all of the above credit quality metrics exclude
acquired loans.
Revenue Generation
-
Net interest margin (FTE), excluding acquired loans, was 3.50%,
reflecting its fourth consecutive quarter of expansion
-
Maturing investment securities run-off continues to drive accretion to
the net interest margin
-
Noninterest income totaled $47.1 million, down 0.6% linked-quarter and
up 5.9% year-over-year
Net interest income (FTE) in the third quarter totaled $110.1 million,
resulting in a net interest margin (FTE) of 3.59%, up 2 basis points
from the prior quarter. Relative to the prior quarter, net interest
income (FTE) increased $1.8 million, reflecting a $4.5 million increase
in interest income (FTE) and a $2.7 million increase in interest
expense. During the third quarter of 2018, the yield on acquired loans
totaled 10.82% and included $1.6 million in recoveries from the
settlement of debt, which represented approximately 4.40% of the
annualized total acquired loan yield. Excluding acquired loans, the net
interest margin (FTE) totaled 3.50% for the third quarter of 2018, an
increase of 4 basis points when compared to the second quarter of 2018,
which was principally due to growth in the yield on the loans held for
investment and held for sale portfolio, run-off of maturing investment
securities and favorable funding mix offset by higher costs of
interest-bearing deposits.
Noninterest income in the third quarter totaled $47.1 million. Insurance
revenue totaled $10.8 million in the third quarter, unchanged from the
prior quarter and up 3.5% year-over-year; this performance reflects
growth in the property and casualty lines of business. Mortgage banking
revenue totaled $8.6 million in the third quarter, down 4.4% from the
prior quarter and up 95.4% year-over-year, primarily due to our hedging
strategy. The linked-quarter change reflects a decline in the value of
loans held for sale partially offset by an increase in gains on sales of
loans, net. Mortgage loan production in the third quarter totaled $397.7
million, down 3.1% from the prior quarter and up 16.5% year-over-year.
Wealth management revenue in the third quarter totaled $7.8 million, up
4.2% from the prior quarter and 3.4% year-over-year, respectively. The
linked-quarter performance is primarily attributable to increased
revenue from investment services fee income. Bank card and other fees
increased 5.5% from the prior quarter and 4.3% year-over-year primarily
due to increased customer derivative revenue. Service charges on deposit
accounts increased 4.0% compared to the prior quarter and declined 1.3%
year-over-year.
Noninterest Expense
-
Total noninterest expense increased 1.4% linked-quarter and 2.1%
year-over-year to $105.2 million
-
Core noninterest expense, which excludes other real estate expense and
intangible amortization, totaled $102.8 million, up 0.2% from the
prior quarter and 2.1% year-over-year
Diligent expense management continues to be a priority for Trustmark.
Salaries and employee benefits increased $872 thousand, or 1.5%, from
the prior quarter to total $60.8 million, due in part to higher
brokerage and mortgage commissions as a result of continued growth in
both business lines. Services and fees remained relatively flat as
increases in data processing were offset by reductions in outside
services and fees. Other real estate expense, net was $1.2 million for
the quarter while net occupancy-premises expense totaled $6.9 million,
up 5.5% from the prior quarter due to increases in routine office
occupancy expense. Other expense totaled $11.7 million, a decline of
$611 thousand, or 5.0%, on a linked-quarter basis.
Additional Information
As previously announced, Trustmark will conduct a conference call with
analysts on Wednesday, October 24, 2018 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, November 7, 2018, in archived format at the same web address
or by calling (877) 344-7529, passcode 10124583.
Trustmark is a financial services company providing banking and
financial solutions through 198 offices in Alabama, Florida,
Mississippi, Tennessee and Texas.
Forward-Looking Statements
Certain statements contained in this document constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. You can identify forward-looking statements by words
such as “may,” “hope,” “will,” “should,” “expect,” “plan,” “anticipate,”
“intend,” “believe,” “estimate,” “predict,” “potential,” “continue,”
“could,” “future” or the negative of those terms or other words of
similar meaning. You should read statements that contain these words
carefully because they discuss our future expectations or state other
“forward-looking” information. These forward-looking statements include,
but are not limited to, statements relating to anticipated future
operating and financial performance measures, including net interest
margin, credit quality, business initiatives, growth opportunities and
growth rates, among other things, and encompass any estimate,
prediction, expectation, projection, opinion, anticipation, outlook or
statement of belief included therein as well as the management
assumptions underlying these forward-looking statements. You should be
aware that the occurrence of the events described under the caption
“Risk Factors” in Trustmark’s filings with the Securities and Exchange
Commission could have an adverse effect on our business, results of
operations and financial condition. Should one or more of these risks
materialize, or should any such underlying assumptions prove to be
significantly different, actual results may vary significantly from
those anticipated, estimated, projected or expected.
Risks that could cause actual results to differ materially from current
expectations of Management include, but are not limited to, changes in
the level of nonperforming assets and charge-offs, local, state and
national economic and market conditions, including potential market
impacts of efforts by the Federal Reserve Board to reduce the size of
its balance sheet, conditions in the housing and real estate markets in
the regions in which Trustmark operates and the extent and duration of
the current volatility in the credit and financial markets as well as
crude oil prices, changes in our ability to measure the fair value of
assets in our portfolio, material changes in the level and/or volatility
of market interest rates, the performance and demand for the products
and services we offer, including the level and timing of withdrawals
from our deposit accounts, the costs and effects of litigation and of
unexpected or adverse outcomes in such litigation, our ability to
attract noninterest-bearing deposits and other low-cost funds,
competition in loan and deposit pricing, as well as the entry of new
competitors into our markets through de novo expansion and acquisitions,
economic conditions, including the potential impact of issues relating
to the European financial system and monetary and other governmental
actions designed to address credit, securities, and/or commodity
markets, the enactment of legislation and changes in existing
regulations or enforcement practices or the adoption of new regulations,
changes in accounting standards and practices, including changes in the
interpretation of existing standards, that affect our consolidated
financial statements, changes in consumer spending, borrowings and
savings habits, technological changes, changes in the financial
performance or condition of our borrowers, changes in our ability to
control expenses, greater than expected costs or difficulties related to
the integration of acquisitions or new products and lines of business,
cyber-attacks and other breaches which could affect our information
system security, natural disasters, environmental disasters, acts of war
or terrorism, and other risks described in our filings with the
Securities and Exchange Commission.
Although we believe that the expectations reflected in such
forward-looking statements are reasonable, we can give no assurance that
such expectations will prove to be correct. Except as required by law,
we undertake no obligation to update or revise any of this information,
whether as the result of new information, future events or developments
or otherwise.
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
CONSOLIDATED FINANCIAL INFORMATION |
September 30, 2018 |
($ in thousands) |
(unaudited) |
|
|
|
| |
|
| |
|
| |
|
| Linked Quarter |
|
| Year over Year |
QUARTERLY AVERAGE BALANCES | | | | 9/30/2018 | | | 6/30/2018 | | | 9/30/2017 | | | $ Change |
|
| % Change | | | $ Change |
|
| % Change |
Securities AFS-taxable
| | | |
$
|
1,937,807
| | | |
$
|
2,038,759
| | | |
$
|
2,349,736
| | | |
$
|
(100,952
|
)
| | |
-5.0
|
%
| | |
$
|
(411,929
|
)
| | |
-17.5
|
%
|
Securities AFS-nontaxable
| | | | |
41,889
| | | | |
50,035
| | | | |
67,994
| | | | |
(8,146
|
)
| | |
-16.3
|
%
| | | |
(26,105
|
)
| | |
-38.4
|
%
|
Securities HTM-taxable
| | | | |
933,294
| | | | |
972,571
| | | | |
1,086,773
| | | | |
(39,277
|
)
| | |
-4.0
|
%
| | | |
(153,479
|
)
| | |
-14.1
|
%
|
Securities HTM-nontaxable
| | | |
|
29,183
|
| | |
|
30,337
|
| | |
|
32,829
|
| | |
|
(1,154
|
)
| | |
-3.8
|
%
| | |
|
(3,646
|
)
| | |
-11.1
|
%
|
Total securities | | | |
|
2,942,173
|
| | |
|
3,091,702
|
| | |
|
3,537,332
|
| | |
|
(149,529
|
)
| | |
-4.8
|
%
| | |
|
(595,159
|
)
| | |
-16.8
|
%
|
Loans (including loans held for sale)
| | | | |
8,907,588
| | | | |
8,707,466
| | | | |
8,532,523
| | | | |
200,122
| | | |
2.3
|
%
| | | |
375,065
| | | |
4.4
|
%
|
Acquired loans
| | | | |
147,811
| | | | |
202,140
| | | | |
299,221
| | | | |
(54,329
|
)
| | |
-26.9
|
%
| | | |
(151,410
|
)
| | |
-50.6
|
%
|
Fed funds sold and rev repos
| | | | |
477
| | | | |
1,063
| | | | |
3,582
| | | | |
(586
|
)
| | |
-55.1
|
%
| | | |
(3,105
|
)
| | |
-86.7
|
%
|
Other earning assets
| | | |
|
189,471
|
| | |
|
186,224
|
| | |
|
84,320
|
| | |
|
3,247
|
| | |
1.7
|
%
| | |
|
105,151
|
| | |
n/m
| |
Total earning assets | | | |
|
12,187,520
|
| | |
|
12,188,595
|
| | |
|
12,456,978
|
| | |
|
(1,075
|
)
| | |
0.0
|
%
| | |
|
(269,458
|
)
| | |
-2.2
|
%
|
Allowance for loan losses
| | | | |
(86,496
|
)
| | | |
(86,315
|
)
| | | |
(85,363
|
)
| | | |
(181
|
)
| | |
-0.2
|
%
| | | |
(1,133
|
)
| | |
-1.3
|
%
|
Cash and due from banks
| | | | |
330,949
| | | | |
319,075
| | | | |
312,409
| | | | |
11,874
| | | |
3.7
|
%
| | | |
18,540
| | | |
5.9
|
%
|
Other assets
| | | |
|
1,035,327
|
| | |
|
1,042,156
|
| | |
|
1,202,766
|
| | |
|
(6,829
|
)
| | |
-0.7
|
%
| | |
|
(167,439
|
)
| | |
-13.9
|
%
|
Total assets | | | |
$
|
13,467,300
|
| | |
$
|
13,463,511
|
| | |
$
|
13,886,790
|
| | |
$
|
3,789
|
| | |
0.0
|
%
| | |
$
|
(419,490
|
)
| | |
-3.0
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
Interest-bearing demand deposits
| | | |
$
|
2,602,658
| | | |
$
|
2,439,777
| | | |
$
|
2,192,064
| | | |
$
|
162,881
| | | |
6.7
|
%
| | |
$
|
410,594
| | | |
18.7
|
%
|
Savings deposits
| | | | |
3,722,533
| | | | |
3,860,096
| | | | |
3,284,323
| | | | |
(137,563
|
)
| | |
-3.6
|
%
| | | |
438,210
| | | |
13.3
|
%
|
Time deposits
| | | |
|
1,851,866
|
| | |
|
1,798,855
|
| | |
|
1,736,683
|
| | |
|
53,011
|
| | |
2.9
|
%
| | |
|
115,183
|
| | |
6.6
|
%
|
Total interest-bearing deposits | | | | |
8,177,057
| | | | |
8,098,728
| | | | |
7,213,070
| | | | |
78,329
| | | |
1.0
|
%
| | | |
963,987
| | | |
13.4
|
%
|
Fed funds purchased and repos
| | | | |
347,489
| | | | |
352,256
| | | | |
547,863
| | | | |
(4,767
|
)
| | |
-1.4
|
%
| | | |
(200,374
|
)
| | |
-36.6
|
%
|
Short-term borrowings
| | | | |
186,293
| | | | |
248,932
| | | | |
1,335,476
| | | | |
(62,639
|
)
| | |
-25.2
|
%
| | | |
(1,149,183
|
)
| | |
-86.1
|
%
|
Long-term FHLB advances
| | | | |
903
| | | | |
921
| | | | |
970
| | | | |
(18
|
)
| | |
-2.0
|
%
| | | |
(67
|
)
| | |
-6.9
|
%
|
Junior subordinated debt securities
| | | |
|
61,856
|
| | |
|
61,856
|
| | |
|
61,856
|
| | |
|
—
|
| | |
0.0
|
%
| | |
|
—
|
| | |
0.0
|
%
|
Total interest-bearing liabilities | | | | |
8,773,598
| | | | |
8,762,693
| | | | |
9,159,235
| | | | |
10,905
| | | |
0.1
|
%
| | | |
(385,637
|
)
| | |
-4.2
|
%
|
Noninterest-bearing deposits
| | | | |
2,894,061
| | | | |
2,930,726
| | | | |
3,003,763
| | | | |
(36,665
|
)
| | |
-1.3
|
%
| | | |
(109,702
|
)
| | |
-3.7
|
%
|
Other liabilities
| | | |
|
202,053
|
| | |
|
188,186
|
| | |
|
145,925
|
| | |
|
13,867
|
| | |
7.4
|
%
| | |
|
56,128
|
| | |
38.5
|
%
|
Total liabilities | | | | |
11,869,712
| | | | |
11,881,605
| | | | |
12,308,923
| | | | |
(11,893
|
)
| | |
-0.1
|
%
| | | |
(439,211
|
)
| | |
-3.6
|
%
|
Shareholders' equity
| | | |
|
1,597,588
|
| | |
|
1,581,906
|
| | |
|
1,577,867
|
| | |
|
15,682
|
| | |
1.0
|
%
| | |
|
19,721
|
| | |
1.2
|
%
|
Total liabilities and equity | | | |
$
|
13,467,300
|
| | |
$
|
13,463,511
|
| | |
$
|
13,886,790
|
| | |
$
|
3,789
|
| | |
0.0
|
%
| | |
$
|
(419,490
|
)
| | |
-3.0
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
n/m - percentage changes greater than +/- 100% are considered not
meaningful |
|
See Notes to Consolidated Financials
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
CONSOLIDATED FINANCIAL INFORMATION |
September 30, 2018 |
($ in thousands) |
(unaudited) |
|
|
|
| |
|
| |
|
| |
|
| Linked Quarter |
|
| Year over Year |
PERIOD END BALANCES | | | | 9/30/2018 | | | 6/30/2018 | | | 9/30/2017 | | | $ Change |
|
| % Change | | | $ Change |
|
| % Change |
Cash and due from banks
| | | |
$
|
432,471
| | | |
$
|
387,119
| | | |
$
|
350,123
| | | |
$
|
45,352
| | | |
11.7
|
%
| | |
$
|
82,348
| | | |
23.5
|
%
|
Fed funds sold and rev repos
| | | | |
1,000
| | | | |
—
| | | | |
3,215
| | | | |
1,000
| | | |
n/m
| | | | |
(2,215
|
)
| | |
-68.9
|
%
|
Securities available for sale
| | | | |
1,864,633
| | | | |
1,974,675
| | | | |
2,369,089
| | | | |
(110,042
|
)
| | |
-5.6
|
%
| | | |
(504,456
|
)
| | |
-21.3
|
%
|
Securities held to maturity
| | | | |
943,883
| | | | |
985,845
| | | | |
1,102,283
| | | | |
(41,962
|
)
| | |
-4.3
|
%
| | | |
(158,400
|
)
| | |
-14.4
|
%
|
Loans held for sale (LHFS)
| | | | |
182,664
| | | | |
196,217
| | | | |
204,157
| | | | |
(13,553
|
)
| | |
-6.9
|
%
| | | |
(21,493
|
)
| | |
-10.5
|
%
|
Loans held for investment (LHFI)
| | | | |
8,747,030
| | | | |
8,678,983
| | | | |
8,407,341
| | | | |
68,047
| | | |
0.8
|
%
| | | |
339,689
| | | |
4.0
|
%
|
Allowance for loan losses, LHFI
| | | |
|
(88,874
|
)
| | |
|
(83,566
|
)
| | |
|
(80,332
|
)
| | |
|
(5,308
|
)
| | |
-6.4
|
%
| | |
|
(8,542
|
)
| | |
-10.6
|
%
|
Net LHFI
| | | | |
8,658,156
| | | | |
8,595,417
| | | | |
8,327,009
| | | | |
62,739
| | | |
0.7
|
%
| | | |
331,147
| | | |
4.0
|
%
|
Acquired loans
| | | | |
132,615
| | | | |
173,107
| | | | |
283,757
| | | | |
(40,492
|
)
| | |
-23.4
|
%
| | | |
(151,142
|
)
| | |
-53.3
|
%
|
Allowance for loan losses, acquired loans
| | | |
|
(1,714
|
)
| | |
|
(3,046
|
)
| | |
|
(5,768
|
)
| | |
|
1,332
|
| | |
43.7
|
%
| | |
|
4,054
|
| | |
70.3
|
%
|
Net acquired loans
| | | |
|
130,901
|
| | |
|
170,061
|
| | |
|
277,989
|
| | |
|
(39,160
|
)
| | |
-23.0
|
%
| | |
|
(147,088
|
)
| | |
-52.9
|
%
|
Net LHFI and acquired loans
| | | | |
8,789,057
| | | | |
8,765,478
| | | | |
8,604,998
| | | | |
23,579
| | | |
0.3
|
%
| | | |
184,059
| | | |
2.1
|
%
|
Premises and equipment, net
| | | | |
178,739
| | | | |
177,686
| | | | |
181,312
| | | | |
1,053
| | | |
0.6
|
%
| | | |
(2,573
|
)
| | |
-1.4
|
%
|
Mortgage servicing rights
| | | | |
101,374
| | | | |
97,411
| | | | |
81,477
| | | | |
3,963
| | | |
4.1
|
%
| | | |
19,897
| | | |
24.4
|
%
|
Goodwill
| | | | |
379,627
| | | | |
379,627
| | | | |
379,627
| | | | |
—
| | | |
0.0
|
%
| | | |
—
| | | |
0.0
|
%
|
Identifiable intangible assets
| | | | |
12,391
| | | | |
13,677
| | | | |
17,883
| | | | |
(1,286
|
)
| | |
-9.4
|
%
| | | |
(5,492
|
)
| | |
-30.7
|
%
|
Other real estate
| | | | |
36,475
| | | | |
39,667
| | | | |
48,356
| | | | |
(3,192
|
)
| | |
-8.0
|
%
| | | |
(11,881
|
)
| | |
-24.6
|
%
|
Other assets
| | | |
|
517,498
|
| | |
|
507,863
|
| | |
|
542,135
|
| | |
|
9,635
|
| | |
1.9
|
%
| | |
|
(24,637
|
)
| | |
-4.5
|
%
|
Total assets | | | |
$
|
13,439,812
|
| | |
$
|
13,525,265
|
| | |
$
|
13,884,655
|
| | |
$
|
(85,453
|
)
| | |
-0.6
|
%
| | |
$
|
(444,843
|
)
| | |
-3.2
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
Deposits:
| | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing
| | | |
$
|
2,786,539
| | | |
$
|
2,958,354
| | | |
$
|
2,998,013
| | | |
$
|
(171,815
|
)
| | |
-5.8
|
%
| | |
$
|
(211,474
|
)
| | |
-7.1
|
%
|
Interest-bearing
| | | |
|
8,170,371
|
| | |
|
8,114,081
|
| | |
|
7,233,729
|
| | |
|
56,290
|
| | |
0.7
|
%
| | |
|
936,642
|
| | |
12.9
|
%
|
Total deposits | | | | |
10,956,910
| | | | |
11,072,435
| | | | |
10,231,742
| | | | |
(115,525
|
)
| | |
-1.0
|
%
| | | |
725,168
| | | |
7.1
|
%
|
Fed funds purchased and repos
| | | | |
486,865
| | | | |
477,891
| | | | |
545,603
| | | | |
8,974
| | | |
1.9
|
%
| | | |
(58,738
|
)
| | |
-10.8
|
%
|
Short-term borrowings
| | | | |
190,023
| | | | |
186,647
| | | | |
1,322,159
| | | | |
3,376
| | | |
1.8
|
%
| | | |
(1,132,136
|
)
| | |
-85.6
|
%
|
Long-term FHLB advances
| | | | |
896
| | | | |
913
| | | | |
962
| | | | |
(17
|
)
| | |
-1.9
|
%
| | | |
(66
|
)
| | |
-6.9
|
%
|
Junior subordinated debt securities
| | | | |
61,856
| | | | |
61,856
| | | | |
61,856
| | | | |
—
| | | |
0.0
|
%
| | | |
—
| | | |
0.0
|
%
|
Other liabilities
| | | |
|
143,658
|
| | |
|
141,451
|
| | |
|
139,798
|
| | |
|
2,207
|
| | |
1.6
|
%
| | |
|
3,860
|
| | |
2.8
|
%
|
Total liabilities | | | |
|
11,840,208
|
| | |
|
11,941,193
|
| | |
|
12,302,120
|
| | |
|
(100,985
|
)
| | |
-0.8
|
%
| | |
|
(461,912
|
)
| | |
-3.8
|
%
|
Common stock
| | | | |
14,089
| | | | |
14,089
| | | | |
14,114
| | | | |
—
| | | |
0.0
|
%
| | | |
(25
|
)
| | |
-0.2
|
%
|
Capital surplus
| | | | |
362,868
| | | | |
361,715
| | | | |
368,131
| | | | |
1,153
| | | |
0.3
|
%
| | | |
(5,263
|
)
| | |
-1.4
|
%
|
Retained earnings
| | | | |
1,302,593
| | | | |
1,282,007
| | | | |
1,228,115
| | | | |
20,586
| | | |
1.6
|
%
| | | |
74,478
| | | |
6.1
|
%
|
Accum other comprehensive loss, net of tax
| | | |
|
(79,946
|
)
| | |
|
(73,739
|
)
| | |
|
(27,825
|
)
| | |
|
(6,207
|
)
| | |
-8.4
|
%
| | |
|
(52,121
|
)
| | |
n/m
| |
Total shareholders' equity | | | |
|
1,599,604
|
| | |
|
1,584,072
|
| | |
|
1,582,535
|
| | |
|
15,532
|
| | |
1.0
|
%
| | |
|
17,069
|
| | |
1.1
|
%
|
Total liabilities and equity | | | |
$
|
13,439,812
|
| | |
$
|
13,525,265
|
| | |
$
|
13,884,655
|
| | |
$
|
(85,453
|
)
| | |
-0.6
|
%
| | |
$
|
(444,843
|
)
| | |
-3.2
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
n/m - percentage changes greater than +/- 100% are considered not
meaningful |
|
See Notes to Consolidated Financials
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
CONSOLIDATED FINANCIAL INFORMATION |
September 30, 2018 |
($ in thousands except per share data) |
(unaudited) |
|
|
|
|
| Quarter Ended |
|
| Linked Quarter |
|
| Year over Year |
INCOME STATEMENTS | | | | 9/30/2018 |
|
| 6/30/2018 |
|
| 9/30/2017 | | | $ Change |
|
| % Change | | | $ Change |
|
| % Change |
Interest and fees on LHFS & LHFI-FTE
| | | |
$
|
105,993
| | | |
$
|
99,761
| | | |
$
|
93,703
| | | |
$
|
6,232
| | | |
6.2
|
%
| | |
$
|
12,290
| | | |
13.1
|
%
|
Interest and fees on acquired loans
| | | | |
4,033
| | | | |
5,022
| | | | |
6,625
| | | | |
(989
|
)
| | |
-19.7
|
%
| | | |
(2,592
|
)
| | |
-39.1
|
%
|
Interest on securities-taxable
| | | | |
16,186
| | | | |
16,894
| | | | |
19,291
| | | | |
(708
|
)
| | |
-4.2
|
%
| | | |
(3,105
|
)
| | |
-16.1
|
%
|
Interest on securities-tax exempt-FTE
| | | | |
656
| | | | |
733
| | | | |
1,104
| | | | |
(77
|
)
| | |
-10.5
|
%
| | | |
(448
|
)
| | |
-40.6
|
%
|
Interest on fed funds sold and rev repos
| | | | |
3
| | | | |
5
| | | | |
14
| | | | |
(2
|
)
| | |
-40.0
|
%
| | | |
(11
|
)
| | |
-78.6
|
%
|
Other interest income
| | | |
|
1,050
|
| | |
|
1,054
|
| | |
|
355
|
| | |
|
(4
|
)
| | |
-0.4
|
%
| | |
|
695
|
| | |
n/m
| |
Total interest income-FTE | | | |
|
127,921
|
| | |
|
123,469
|
| | |
|
121,092
|
| | |
|
4,452
|
| | |
3.6
|
%
| | |
|
6,829
|
| | |
5.6
|
%
|
Interest on deposits
| | | | |
14,972
| | | | |
12,139
| | | | |
6,381
| | | | |
2,833
| | | |
23.3
|
%
| | | |
8,591
| | | |
n/m
| |
Interest on fed funds pch and repos
| | | | |
1,348
| | | | |
1,250
| | | | |
1,301
| | | | |
98
| | | |
7.8
|
%
| | | |
47
| | | |
3.6
|
%
|
Other interest expense
| | | |
|
1,467
|
| | |
|
1,713
|
| | |
|
4,520
|
| | |
|
(246
|
)
| | |
-14.4
|
%
| | |
|
(3,053
|
)
| | |
-67.5
|
%
|
Total interest expense | | | |
|
17,787
|
| | |
|
15,102
|
| | |
|
12,202
|
| | |
|
2,685
|
| | |
17.8
|
%
| | |
|
5,585
|
| | |
45.8
|
%
|
Net interest income-FTE | | | | |
110,134
| | | | |
108,367
| | | | |
108,890
| | | | |
1,767
| | | |
1.6
|
%
| | | |
1,244
| | | |
1.1
|
%
|
Provision for loan losses, LHFI
| | | | |
8,673
| | | | |
3,167
| | | | |
3,672
| | | | |
5,506
| | | |
n/m
| | | | |
5,001
| | | |
n/m
| |
Provision for loan losses, acquired loans
| | | |
|
(467
|
)
| | |
|
(441
|
)
| | |
|
(1,653
|
)
| | |
|
(26
|
)
| | |
-5.9
|
%
| | |
|
1,186
|
| | |
71.7
|
%
|
Net interest income after provision-FTE | | | |
|
101,928
|
| | |
|
105,641
|
| | |
|
106,871
|
| | |
|
(3,713
|
)
| | |
-3.5
|
%
| | |
|
(4,943
|
)
| | |
-4.6
|
%
|
Service charges on deposit accounts
| | | | |
11,075
| | | | |
10,647
| | | | |
11,223
| | | | |
428
| | | |
4.0
|
%
| | | |
(148
|
)
| | |
-1.3
|
%
|
Bank card and other fees
| | | | |
7,459
| | | | |
7,070
| | | | |
7,150
| | | | |
389
| | | |
5.5
|
%
| | | |
309
| | | |
4.3
|
%
|
Mortgage banking, net
| | | | |
8,647
| | | | |
9,046
| | | | |
4,425
| | | | |
(399
|
)
| | |
-4.4
|
%
| | | |
4,222
| | | |
95.4
|
%
|
Insurance commissions
| | | | |
10,765
| | | | |
10,735
| | | | |
10,398
| | | | |
30
| | | |
0.3
|
%
| | | |
367
| | | |
3.5
|
%
|
Wealth management
| | | | |
7,789
| | | | |
7,478
| | | | |
7,530
| | | | |
311
| | | |
4.2
|
%
| | | |
259
| | | |
3.4
|
%
|
Other, net
| | | |
|
1,358
|
| | |
|
2,415
|
| | |
|
3,740
|
| | |
|
(1,057
|
)
| | |
-43.8
|
%
| | |
|
(2,382
|
)
| | |
-63.7
|
%
|
Nonint inc-excl sec gains (losses), net
| | | | |
47,093
| | | | |
47,391
| | | | |
44,466
| | | | |
(298
|
)
| | |
-0.6
|
%
| | | |
2,627
| | | |
5.9
|
%
|
Security gains (losses), net
| | | |
|
—
|
| | |
|
—
|
| | |
|
14
|
| | |
|
—
|
| | |
n/m
| | | |
|
(14
|
)
| | |
-100.0
|
%
|
Total noninterest income | | | |
|
47,093
|
| | |
|
47,391
|
| | |
|
44,480
|
| | |
|
(298
|
)
| | |
-0.6
|
%
| | |
|
2,613
|
| | |
5.9
|
%
|
Salaries and employee benefits
| | | | |
60,847
| | | | |
59,975
| | | | |
57,871
| | | | |
872
| | | |
1.5
|
%
| | | |
2,976
| | | |
5.1
|
%
|
Defined benefit plan termination
| | | | |
—
| | | | |
—
| | | | |
—
| | | | |
—
| | | |
n/m
| | | | |
—
| | | |
n/m
| |
Services and fees
| | | | |
16,404
| | | | |
16,322
| | | | |
15,133
| | | | |
82
| | | |
0.5
|
%
| | | |
1,271
| | | |
8.4
|
%
|
Net occupancy-premises
| | | | |
6,910
| | | | |
6,550
| | | | |
6,702
| | | | |
360
| | | |
5.5
|
%
| | | |
208
| | | |
3.1
|
%
|
Equipment expense
| | | | |
6,200
| | | | |
6,202
| | | | |
6,297
| | | | |
(2
|
)
| | |
0.0
|
%
| | | |
(97
|
)
| | |
-1.5
|
%
|
Other real estate expense, net
| | | | |
1,168
| | | | |
(93
|
)
| | | |
864
| | | | |
1,261
| | | |
n/m
| | | | |
304
| | | |
35.2
|
%
|
FDIC assessment expense
| | | | |
1,999
| | | | |
2,538
| | | | |
2,816
| | | | |
(539
|
)
| | |
-21.2
|
%
| | | |
(817
|
)
| | |
-29.0
|
%
|
Other expense
| | | |
|
11,695
|
| | |
|
12,306
|
| | |
|
13,403
|
| | |
|
(611
|
)
| | |
-5.0
|
%
| | |
|
(1,708
|
)
| | |
-12.7
|
%
|
Total noninterest expense | | | |
|
105,223
|
| | |
|
103,800
|
| | |
|
103,086
|
| | |
|
1,423
|
| | |
1.4
|
%
| | |
|
2,137
|
| | |
2.1
|
%
|
Income before income taxes and tax eq adj | | | | |
43,798
| | | | |
49,232
| | | | |
48,265
| | | | |
(5,434
|
)
| | |
-11.0
|
%
| | | |
(4,467
|
)
| | |
-9.3
|
%
|
Tax equivalent adjustment
| | | |
|
3,151
|
| | |
|
3,203
|
| | |
|
4,978
|
| | |
|
(52
|
)
| | |
-1.6
|
%
| | |
|
(1,827
|
)
| | |
-36.7
|
%
|
Income before income taxes | | | | |
40,647
| | | | |
46,029
| | | | |
43,287
| | | | |
(5,382
|
)
| | |
-11.7
|
%
| | | |
(2,640
|
)
| | |
-6.1
|
%
|
Income taxes
| | | |
|
4,394
|
| | |
|
6,216
|
| | |
|
8,708
|
| | |
|
(1,822
|
)
| | |
-29.3
|
%
| | |
|
(4,314
|
)
| | |
-49.5
|
%
|
Net income | | | |
$
|
36,253
|
| | |
$
|
39,813
|
| | |
$
|
34,579
|
| | |
$
|
(3,560
|
)
| | |
-8.9
|
%
| | |
$
|
1,674
|
| | |
4.8
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
Per share data | | | | | | | | | | | | | | | | | | | | | | |
Earnings per share - basic | | | |
$
|
0.54
|
| | |
$
|
0.59
|
| | |
$
|
0.51
|
| | |
$
|
(0.05
|
)
| | |
-8.5
|
%
| | |
$
|
0.03
|
| | |
5.9
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
Earnings per share - diluted | | | |
$
|
0.54
|
| | |
$
|
0.59
|
| | |
$
|
0.51
|
| | |
$
|
(0.05
|
)
| | |
-8.5
|
%
| | |
$
|
0.03
|
| | |
5.9
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
Dividends per share | | | |
$
|
0.23
|
| | |
$
|
0.23
|
| | |
$
|
0.23
|
| | |
|
—
|
| | |
0.0
|
%
| | |
|
—
|
| | |
0.0
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
Weighted average shares outstanding | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | |
|
67,621,345
|
| | |
|
67,758,097
|
| | |
|
67,741,655
|
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
|
Diluted | | | |
|
67,796,346
|
| | |
|
67,907,267
|
| | |
|
67,916,418
|
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
|
Period end shares outstanding | | | |
|
67,621,369
|
| | |
|
67,621,111
|
| | |
|
67,742,135
|
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
|
n/m - percentage changes greater than +/- 100% are considered not
meaningful |
|
See Notes to Consolidated Financials
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
CONSOLIDATED FINANCIAL INFORMATION |
September 30, 2018 |
($ in thousands) |
(unaudited) |
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| | | | Quarter Ended | | | Linked Quarter | | | Year over Year |
NONPERFORMING ASSETS (1) | | | | 9/30/2018 | | | 6/30/2018 | | | 9/30/2017 | | | $ Change | | | % Change | | | $ Change | | | % Change |
Nonaccrual loans
| | | | | | | | | | | | | | | | | | | | | | |
Alabama
| | | |
$
|
3,953
| | | |
$
|
3,685
| | | |
$
|
1,629
| | | |
$
|
268
| | | |
7.3
|
%
| | |
$
|
2,324
| | | |
n/m
| |
Florida
| | | | |
1,180
| | | | |
2,978
| | | | |
3,242
| | | | |
(1,798
|
)
| | |
-60.4
|
%
| | | |
(2,062
|
)
| | |
-63.6
|
%
|
Mississippi (2)
| | | | |
41,351
| | | | |
39,006
| | | | |
59,483
| | | | |
2,345
| | | |
6.0
|
%
| | | |
(18,132
|
)
| | |
-30.5
|
%
|
Tennessee (3)
| | | | |
13,195
| | | | |
5,338
| | | | |
4,589
| | | | |
7,857
| | | |
n/m
| | | | |
8,606
| | | |
n/m
| |
Texas
| | | |
|
8,157
|
| | |
|
10,356
|
| | |
|
346
|
| | |
|
(2,199
|
)
| | |
-21.2
|
%
| | |
|
7,811
|
| | |
n/m
| |
Total nonaccrual loans | | | | |
67,836
| | | | |
61,363
| | | | |
69,289
| | | | |
6,473
| | | |
10.5
|
%
| | | |
(1,453
|
)
| | |
-2.1
|
%
|
Other real estate
| | | | | | | | | | | | | | | | | | | | | | |
Alabama
| | | | |
7,526
| | | | |
8,290
| | | | |
12,726
| | | | |
(764
|
)
| | |
-9.2
|
%
| | | |
(5,200
|
)
| | |
-40.9
|
%
|
Florida
| | | | |
8,931
| | | | |
9,789
| | | | |
16,100
| | | | |
(858
|
)
| | |
-8.8
|
%
| | | |
(7,169
|
)
| | |
-44.5
|
%
|
Mississippi (2)
| | | | |
18,191
| | | | |
19,358
| | | | |
15,319
| | | | |
(1,167
|
)
| | |
-6.0
|
%
| | | |
2,872
| | | |
18.7
|
%
|
Tennessee (3)
| | | | |
1,083
| | | | |
1,486
| | | | |
2,671
| | | | |
(403
|
)
| | |
-27.1
|
%
| | | |
(1,588
|
)
| | |
-59.5
|
%
|
Texas
| | | |
|
744
|
| | |
|
744
|
| | |
|
1,540
|
| | |
|
—
|
| | |
0.0
|
%
| | |
|
(796
|
)
| | |
-51.7
|
%
|
Total other real estate | | | |
|
36,475
|
| | |
|
39,667
|
| | |
|
48,356
|
| | |
|
(3,192
|
)
| | |
-8.0
|
%
| | |
|
(11,881
|
)
| | |
-24.6
|
%
|
Total nonperforming assets | | | |
$
|
104,311
|
| | |
$
|
101,030
|
| | |
$
|
117,645
|
| | |
$
|
3,281
|
| | |
3.2
|
%
| | |
$
|
(13,334
|
)
| | |
-11.3
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
LOANS PAST DUE OVER 90 DAYS (1) | | | | | | | | | | | | | | | | | | | | | | |
LHFI
| | | |
$
|
726
|
| | |
$
|
529
|
| | |
$
|
2,244
|
| | |
$
|
197
|
| | |
37.2
|
%
| | |
$
|
(1,518
|
)
| | |
-67.6
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
LHFS-Guaranteed GNMA serviced loans
| | | | | | | | | | | | | | | | | | | | | | |
(no obligation to repurchase) | | | |
$
|
34,115
|
| | |
$
|
34,693
|
| | |
$
|
32,332
|
| | |
$
|
(578
|
)
| | |
-1.7
|
%
| | |
$
|
1,783
|
| | |
5.5
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
| | | | Quarter Ended | | | Linked Quarter | | | Year over Year |
ALLOWANCE FOR LOAN LOSSES (1) | | | | 9/30/2018 | | | 6/30/2018 | | | 9/30/2017 | | | $ Change | | | % Change | | | $ Change | | | % Change |
Beginning Balance
| | | |
$
|
83,566
| | | |
$
|
81,235
| | | |
$
|
76,184
| | | |
$
|
2,331
| | | |
2.9
|
%
| | |
$
|
7,382
| | | |
9.7
|
%
|
Transfers (4)
| | | | |
772
| | | | |
782
| | | | |
—
| | | | |
(10
|
)
| | |
-1.3
|
%
| | | |
772
| | | |
n/m
| |
Provision for loan losses
| | | | |
8,673
| | | | |
3,167
| | | | |
3,672
| | | | |
5,506
| | | |
n/m
| | | | |
5,001
| | | |
n/m
| |
Charge-offs
| | | | |
(7,017
|
)
| | | |
(3,421
|
)
| | | |
(2,752
|
)
| | | |
(3,596
|
)
| | |
n/m
| | | | |
(4,265
|
)
| | |
n/m
| |
Recoveries
| | | |
|
2,880
|
| | |
|
1,803
|
| | |
|
3,228
|
| | |
|
1,077
|
| | |
59.7
|
%
| | |
|
(348
|
)
| | |
-10.8
|
%
|
Net (charge-offs) recoveries
| | | |
|
(4,137
|
)
| | |
|
(1,618
|
)
| | |
|
476
|
| | |
|
(2,519
|
)
| | |
n/m
| | | |
|
(4,613
|
)
| | |
n/m
| |
Ending Balance
| | | |
$
|
88,874
|
| | |
$
|
83,566
|
| | |
$
|
80,332
|
| | |
$
|
5,308
|
| | |
6.4
|
%
| | |
$
|
8,542
|
| | |
10.6
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
PROVISION FOR LOAN LOSSES (1) | | | | | | | | | | | | | | | | | | | | | | |
Alabama
| | | |
$
|
593
| | | |
$
|
434
| | | |
$
|
1,218
| | | |
$
|
159
| | | |
36.6
|
%
| | |
$
|
(625
|
)
| | |
-51.3
|
%
|
Florida
| | | | |
(431
|
)
| | | |
(811
|
)
| | | |
(744
|
)
| | | |
380
| | | |
46.9
|
%
| | | |
313
| | | |
42.1
|
%
|
Mississippi (2)
| | | | |
(1,630
|
)
| | | |
2,768
| | | | |
1,860
| | | | |
(4,398
|
)
| | |
n/m
| | | | |
(3,490
|
)
| | |
n/m
| |
Tennessee (3)
| | | | |
8,100
| | | | |
82
| | | | |
(72
|
)
| | | |
8,018
| | | |
n/m
| | | | |
8,172
| | | |
n/m
| |
Texas
| | | |
|
2,041
|
| | |
|
694
|
| | |
|
1,410
|
| | |
|
1,347
|
| | |
n/m
| | | |
|
631
|
| | |
44.8
|
%
|
Total provision for loan losses | | | |
$
|
8,673
|
| | |
$
|
3,167
|
| | |
$
|
3,672
|
| | |
$
|
5,506
|
| | |
n/m
| | | |
$
|
5,001
|
| | |
n/m
| |
| | | | | | | | | | | | | | | | | | | | | |
|
NET CHARGE-OFFS (RECOVERIES)
(1) | | | | | | | | | | | | | | | | | | | | | | |
Alabama
| | | |
$
|
198
| | | |
$
|
112
| | | |
$
|
314
| | | |
$
|
86
| | | |
76.8
|
%
| | |
$
|
(116
|
)
| | |
-36.9
|
%
|
Florida
| | | | |
(586
|
)
| | | |
(122
|
)
| | | |
(796
|
)
| | | |
(464
|
)
| | |
n/m
| | | | |
210
| | | |
26.4
|
%
|
Mississippi (2)
| | | | |
4,677
| | | | |
1,705
| | | | |
(11
|
)
| | | |
2,972
| | | |
n/m
| | | | |
4,688
| | | |
n/m
| |
Tennessee (3)
| | | | |
(96
|
)
| | | |
70
| | | | |
85
| | | | |
(166
|
)
| | |
n/m
| | | | |
(181
|
)
| | |
n/m
| |
Texas
| | | |
|
(56
|
)
| | |
|
(147
|
)
| | |
|
(68
|
)
| | |
|
91
|
| | |
61.9
|
%
| | |
|
12
|
| | |
17.6
|
%
|
Total net charge-offs (recoveries) | | | |
$
|
4,137
|
| | |
$
|
1,618
|
| | |
$
|
(476
|
)
| | |
$
|
2,519
|
| | |
n/m
| | | |
$
|
4,613
|
| | |
n/m
| |
(1) |
|
-
|
| Excludes acquired loans. |
(2) | |
-
| | Mississippi includes Central and Southern Mississippi Regions. |
(3) | |
-
| | Tennessee includes Memphis, Tennessee and Northern Mississippi
Regions. |
(4) | |
-
| | The allowance for loan losses balance related to the remaining
loans acquired in the Bay Bank merger, which were transferred from
acquired impaired loans to LHFI during the second quarter of 2018,
and the remaining loans acquired in the Heritage acquisition and
the Reliance merger, which were transferred from acquired impaired
loans to LHFI during the third quarter of 2018. |
| | | |
|
n/m | |
-
| | percentage changes greater than +/- 100% are considered not
meaningful |
| | | |
|
See Notes to Consolidated Financials
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
CONSOLIDATED FINANCIAL INFORMATION |
September 30, 2018 |
($ in thousands) |
(unaudited) |
|
|
|
| Quarter Ended |
|
| Nine Months Ended |
AVERAGE BALANCES | | | | 9/30/2018 |
|
| 6/30/2018 |
|
| 3/31/2018 |
|
| 12/31/2017 |
|
| 9/30/2017 | | | 9/30/2018 |
|
| 9/30/2017 |
Securities AFS-taxable
| | | |
$
|
1,937,807
| | | |
$
|
2,038,759
| | | |
$
|
2,141,144
| | | |
$
|
2,247,247
| | | |
$
|
2,349,736
| | | |
$
|
2,038,492
| | | |
$
|
2,312,523
| |
Securities AFS-nontaxable
| | | | |
41,889
| | | | |
50,035
| | | | |
57,972
| | | | |
61,691
| | | | |
67,994
| | | | |
49,906
| | | | |
77,310
| |
Securities HTM-taxable
| | | | |
933,294
| | | | |
972,571
| | | | |
1,005,721
| | | | |
1,045,723
| | | | |
1,086,773
| | | | |
970,263
| | | | |
1,106,402
| |
Securities HTM-nontaxable
| | | |
|
29,183
|
| | |
|
30,337
|
| | |
|
32,734
|
| | |
|
32,781
|
| | |
|
32,829
|
| | |
|
30,738
|
| | |
|
32,905
|
|
Total securities | | | |
|
2,942,173
|
| | |
|
3,091,702
|
| | |
|
3,237,571
|
| | |
|
3,387,442
|
| | |
|
3,537,332
|
| | |
|
3,089,399
|
| | |
|
3,529,140
|
|
Loans (including loans held for sale)
| | | | |
8,907,588
| | | | |
8,707,466
| | | | |
8,636,967
| | | | |
8,686,916
| | | | |
8,532,523
| | | | |
8,751,665
| | | | |
8,320,255
| |
Acquired loans
| | | | |
147,811
| | | | |
202,140
| | | | |
243,152
| | | | |
273,918
| | | | |
299,221
| | | | |
197,352
| | | | |
288,599
| |
Fed funds sold and rev repos
| | | | |
477
| | | | |
1,063
| | | | |
478
| | | | |
1,724
| | | | |
3,582
| | | | |
673
| | | | |
2,399
| |
Other earning assets
| | | |
|
189,471
|
| | |
|
186,224
|
| | |
|
213,985
|
| | |
|
80,218
|
| | |
|
84,320
|
| | |
|
196,470
|
| | |
|
80,553
|
|
Total earning assets | | | |
|
12,187,520
|
| | |
|
12,188,595
|
| | |
|
12,332,153
|
| | |
|
12,430,218
|
| | |
|
12,456,978
|
| | |
|
12,235,559
|
| | |
|
12,220,946
|
|
Allowance for loan losses
| | | | |
(86,496
|
)
| | | |
(86,315
|
)
| | | |
(82,304
|
)
| | | |
(86,704
|
)
| | | |
(85,363
|
)
| | | |
(85,054
|
)
| | | |
(84,036
|
)
|
Cash and due from banks
| | | | |
330,949
| | | | |
319,075
| | | | |
336,642
| | | | |
315,586
| | | | |
312,409
| | | | |
328,868
| | | | |
310,313
| |
Other assets
| | | |
|
1,035,327
|
| | |
|
1,042,156
|
| | |
|
1,030,738
|
| | |
|
1,192,464
|
| | |
|
1,202,766
|
| | |
|
1,036,091
|
| | |
|
1,222,619
|
|
Total assets | | | |
$
|
13,467,300
|
| | |
$
|
13,463,511
|
| | |
$
|
13,617,229
|
| | |
$
|
13,851,564
|
| | |
$
|
13,886,790
|
| | |
$
|
13,515,464
|
| | |
$
|
13,669,842
|
|
| | | | | | | | | | | | | | | | | | | | | |
|
Interest-bearing demand deposits
| | | |
$
|
2,602,658
| | | |
$
|
2,439,777
| | | |
$
|
2,404,428
| | | |
$
|
2,244,625
| | | |
$
|
2,192,064
| | | |
$
|
2,483,014
| | | |
$
|
2,070,615
| |
Savings deposits
| | | | |
3,722,533
| | | | |
3,860,096
| | | | |
3,737,507
| | | | |
3,291,407
| | | | |
3,284,323
| | | | |
3,773,324
| | | | |
3,313,627
| |
Time deposits
| | | |
|
1,851,866
|
| | |
|
1,798,855
|
| | |
|
1,748,645
|
| | |
|
1,756,576
|
| | |
|
1,736,683
|
| | |
|
1,800,167
|
| | |
|
1,721,804
|
|
Total interest-bearing deposits | | | | |
8,177,057
| | | | |
8,098,728
| | | | |
7,890,580
| | | | |
7,292,608
| | | | |
7,213,070
| | | | |
8,056,505
| | | | |
7,106,046
| |
Fed funds purchased and repos
| | | | |
347,489
| | | | |
352,256
| | | | |
277,877
| | | | |
475,850
| | | | |
547,863
| | | | |
326,129
| | | | |
524,295
| |
Short-term borrowings
| | | | |
186,293
| | | | |
248,932
| | | | |
751,219
| | | | |
1,276,543
| | | | |
1,335,476
| | | | |
393,412
| | | | |
1,091,783
| |
Long-term FHLB advances
| | | | |
903
| | | | |
921
| | | | |
938
| | | | |
954
| | | | |
970
| | | | |
921
| | | | |
130,117
| |
Junior subordinated debt securities
| | | |
|
61,856
|
| | |
|
61,856
|
| | |
|
61,856
|
| | |
|
61,856
|
| | |
|
61,856
|
| | |
|
61,856
|
| | |
|
61,856
|
|
Total interest-bearing liabilities | | | | |
8,773,598
| | | | |
8,762,693
| | | | |
8,982,470
| | | | |
9,107,811
| | | | |
9,159,235
| | | | |
8,838,823
| | | | |
8,914,097
| |
Noninterest-bearing deposits
| | | | |
2,894,061
| | | | |
2,930,726
| | | | |
2,881,374
| | | | |
2,994,292
| | | | |
3,003,763
| | | | |
2,902,100
| | | | |
3,040,672
| |
Other liabilities
| | | |
|
202,053
|
| | |
|
188,186
|
| | |
|
180,871
|
| | |
|
169,828
|
| | |
|
145,925
|
| | |
|
190,446
|
| | |
|
160,507
|
|
Total liabilities | | | | |
11,869,712
| | | | |
11,881,605
| | | | |
12,044,715
| | | | |
12,271,931
| | | | |
12,308,923
| | | | |
11,931,369
| | | | |
12,115,276
| |
Shareholders' equity
| | | |
|
1,597,588
|
| | |
|
1,581,906
|
| | |
|
1,572,514
|
| | |
|
1,579,633
|
| | |
|
1,577,867
|
| | |
|
1,584,095
|
| | |
|
1,554,566
|
|
Total liabilities and equity | | | |
$
|
13,467,300
|
| | |
$
|
13,463,511
|
| | |
$
|
13,617,229
|
| | |
$
|
13,851,564
|
| | |
$
|
13,886,790
|
| | |
$
|
13,515,464
|
| | |
$
|
13,669,842
|
|
| | | | | | | | | | | | | | | | | | | | | |
|
See Notes to Consolidated Financials
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
CONSOLIDATED FINANCIAL INFORMATION |
September 30, 2018 |
($ in thousands) |
(unaudited) |
|
PERIOD END BALANCES |
|
|
| 9/30/2018 |
|
| 6/30/2018 |
|
| 3/31/2018 |
|
| 12/31/2017 |
|
| 9/30/2017 |
Cash and due from banks
| | | |
$
|
432,471
| | | |
$
|
387,119
| | | |
$
|
315,276
| | | |
$
|
335,768
| | | |
$
|
350,123
| |
Fed funds sold and rev repos
| | | | |
1,000
| | | | |
—
| | | | |
112
| | | | |
615
| | | | |
3,215
| |
Securities available for sale
| | | | |
1,864,633
| | | | |
1,974,675
| | | | |
2,097,497
| | | | |
2,238,635
| | | | |
2,369,089
| |
Securities held to maturity
| | | | |
943,883
| | | | |
985,845
| | | | |
1,023,975
| | | | |
1,056,486
| | | | |
1,102,283
| |
Loans held for sale (LHFS)
| | | | |
182,664
| | | | |
196,217
| | | | |
163,882
| | | | |
180,512
| | | | |
204,157
| |
Loans held for investment (LHFI)
| | | | |
8,747,030
| | | | |
8,678,983
| | | | |
8,513,985
| | | | |
8,569,967
| | | | |
8,407,341
| |
Allowance for loan losses, LHFI
| | | |
|
(88,874
|
)
| | |
|
(83,566
|
)
| | |
|
(81,235
|
)
| | |
|
(76,733
|
)
| | |
|
(80,332
|
)
|
Net LHFI
| | | | |
8,658,156
| | | | |
8,595,417
| | | | |
8,432,750
| | | | |
8,493,234
| | | | |
8,327,009
| |
Acquired loans
| | | | |
132,615
| | | | |
173,107
| | | | |
215,476
| | | | |
261,517
| | | | |
283,757
| |
Allowance for loan losses, acquired loans
| | | |
|
(1,714
|
)
| | |
|
(3,046
|
)
| | |
|
(4,294
|
)
| | |
|
(4,079
|
)
| | |
|
(5,768
|
)
|
Net acquired loans
| | | |
|
130,901
|
| | |
|
170,061
|
| | |
|
211,182
|
| | |
|
257,438
|
| | |
|
277,989
|
|
Net LHFI and acquired loans
| | | | |
8,789,057
| | | | |
8,765,478
| | | | |
8,643,932
| | | | |
8,750,672
| | | | |
8,604,998
| |
Premises and equipment, net
| | | | |
178,739
| | | | |
177,686
| | | | |
178,584
| | | | |
179,339
| | | | |
181,312
| |
Mortgage servicing rights
| | | | |
101,374
| | | | |
97,411
| | | | |
94,850
| | | | |
84,269
| | | | |
81,477
| |
Goodwill
| | | | |
379,627
| | | | |
379,627
| | | | |
379,627
| | | | |
379,627
| | | | |
379,627
| |
Identifiable intangible assets
| | | | |
12,391
| | | | |
13,677
| | | | |
14,963
| | | | |
16,360
| | | | |
17,883
| |
Other real estate
| | | | |
36,475
| | | | |
39,667
| | | | |
39,554
| | | | |
43,228
| | | | |
48,356
| |
Other assets
| | | |
|
517,498
|
| | |
|
507,863
|
| | |
|
511,187
|
| | |
|
532,442
|
| | |
|
542,135
|
|
Total assets | | | |
$
|
13,439,812
|
| | |
$
|
13,525,265
|
| | |
$
|
13,463,439
|
| | |
$
|
13,797,953
|
| | |
$
|
13,884,655
|
|
| | | | | | | | | | | | | | | |
|
Deposits:
| | | | | | | | | | | | | | | | |
Noninterest-bearing
| | | |
$
|
2,786,539
| | | |
$
|
2,958,354
| | | |
$
|
3,004,442
| | | |
$
|
2,978,074
| | | |
$
|
2,998,013
| |
Interest-bearing
| | | |
|
8,170,371
|
| | |
|
8,114,081
|
| | |
|
7,971,359
|
| | |
|
7,599,438
|
| | |
|
7,233,729
|
|
Total deposits | | | | |
10,956,910
| | | | |
11,072,435
| | | | |
10,975,801
| | | | |
10,577,512
| | | | |
10,231,742
| |
Fed funds purchased and repos
| | | | |
486,865
| | | | |
477,891
| | | | |
274,833
| | | | |
469,827
| | | | |
545,603
| |
Short-term borrowings
| | | | |
190,023
| | | | |
186,647
| | | | |
442,689
| | | | |
971,049
| | | | |
1,322,159
| |
Long-term FHLB advances
| | | | |
896
| | | | |
913
| | | | |
929
| | | | |
946
| | | | |
962
| |
Junior subordinated debt securities
| | | | |
61,856
| | | | |
61,856
| | | | |
61,856
| | | | |
61,856
| | | | |
61,856
| |
Other liabilities
| | | |
|
143,658
|
| | |
|
141,451
|
| | |
|
137,194
|
| | |
|
145,062
|
| | |
|
139,798
|
|
Total liabilities | | | |
|
11,840,208
|
| | |
|
11,941,193
|
| | |
|
11,893,302
|
| | |
|
12,226,252
|
| | |
|
12,302,120
|
|
Common stock
| | | | |
14,089
| | | | |
14,089
| | | | |
14,121
| | | | |
14,115
| | | | |
14,114
| |
Capital surplus
| | | | |
362,868
| | | | |
361,715
| | | | |
366,021
| | | | |
369,124
| | | | |
368,131
| |
Retained earnings
| | | | |
1,302,593
| | | | |
1,282,007
| | | | |
1,257,881
| | | | |
1,228,187
| | | | |
1,228,115
| |
Accum other comprehensive loss, net of tax
| | | |
|
(79,946
|
)
| | |
|
(73,739
|
)
| | |
|
(67,886
|
)
| | |
|
(39,725
|
)
| | |
|
(27,825
|
)
|
Total shareholders' equity | | | |
|
1,599,604
|
| | |
|
1,584,072
|
| | |
|
1,570,137
|
| | |
|
1,571,701
|
| | |
|
1,582,535
|
|
Total liabilities and equity | | | |
$
|
13,439,812
|
| | |
$
|
13,525,265
|
| | |
$
|
13,463,439
|
| | |
$
|
13,797,953
|
| | |
$
|
13,884,655
|
|
| | | | | | | | | | | | | | | |
|
See Notes to Consolidated Financials
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
CONSOLIDATED FINANCIAL INFORMATION |
September 30, 2018 |
($ in thousands except per share data) |
(unaudited) |
|
|
|
|
| Quarter Ended |
|
| Nine Months Ended |
INCOME STATEMENTS | | | | 9/30/2018 |
|
| 6/30/2018 |
|
| 3/31/2018 |
|
| 12/31/2017 |
|
| 9/30/2017 | | | 9/30/2018 |
|
| 9/30/2017 |
Interest and fees on LHFS & LHFI-FTE
| | | |
$
|
105,993
| | | |
$
|
99,761
| | | |
$
|
94,712
| | |
$
|
95,816
| | | |
$
|
93,703
| | | |
$
|
300,466
| | | |
$
|
266,979
| |
Interest and fees on acquired loans
| | | | |
4,033
| | | | |
5,022
| | | | |
4,877
| | | |
6,401
| | | | |
6,625
| | | | |
13,932
| | | | |
18,077
| |
Interest on securities-taxable
| | | | |
16,186
| | | | |
16,894
| | | | |
17,506
| | | |
18,327
| | | | |
19,291
| | | | |
50,586
| | | | |
57,865
| |
Interest on securities-tax exempt-FTE
| | | | |
656
| | | | |
733
| | | | |
824
| | | |
1,035
| | | | |
1,104
| | | | |
2,213
| | | | |
3,582
| |
Interest on fed funds sold and rev repos
| | | | |
3
| | | | |
5
| | | | |
2
| | | |
7
| | | | |
14
| | | | |
10
| | | | |
26
| |
Other interest income
| | | |
|
1,050
|
| | |
|
1,054
|
| | |
|
934
| | |
|
473
|
| | |
|
355
|
| | |
|
3,038
|
| | |
|
993
|
|
Total interest income-FTE | | | |
|
127,921
|
| | |
|
123,469
|
| | |
|
118,855
| | |
|
122,059
|
| | |
|
121,092
|
| | |
|
370,245
|
| | |
|
347,522
|
|
Interest on deposits
| | | | |
14,972
| | | | |
12,139
| | | | |
9,491
| | | |
7,284
| | | | |
6,381
| | | | |
36,602
| | | | |
15,433
| |
Interest on fed funds pch and repos
| | | | |
1,348
| | | | |
1,250
| | | | |
662
| | | |
1,116
| | | | |
1,301
| | | | |
3,260
| | | | |
3,036
| |
Other interest expense
| | | |
|
1,467
|
| | |
|
1,713
|
| | |
|
3,394
| | |
|
4,555
|
| | |
|
4,520
|
| | |
|
6,574
|
| | |
|
10,821
|
|
Total interest expense | | | |
|
17,787
|
| | |
|
15,102
|
| | |
|
13,547
| | |
|
12,955
|
| | |
|
12,202
|
| | |
|
46,436
|
| | |
|
29,290
|
|
Net interest income-FTE | | | | |
110,134
| | | | |
108,367
| | | | |
105,308
| | | |
109,104
| | | | |
108,890
| | | | |
323,809
| | | | |
318,232
| |
Provision for loan losses, LHFI
| | | | |
8,673
| | | | |
3,167
| | | | |
3,961
| | | |
5,739
| | | | |
3,672
| | | | |
15,801
| | | | |
9,355
| |
Provision for loan losses, acquired loans
| | | |
|
(467
|
)
| | |
|
(441
|
)
| | |
|
150
| | |
|
(1,573
|
)
| | |
|
(1,653
|
)
| | |
|
(758
|
)
| | |
|
(5,822
|
)
|
Net interest income after provision-FTE | | | |
|
101,928
|
| | |
|
105,641
|
| | |
|
101,197
| | |
|
104,938
|
| | |
|
106,871
|
| | |
|
308,766
|
| | |
|
314,699
|
|
Service charges on deposit accounts
| | | | |
11,075
| | | | |
10,647
| | | | |
10,857
| | | |
11,193
| | | | |
11,223
| | | | |
32,579
| | | | |
32,810
| |
Bank card and other fees
| | | | |
7,459
| | | | |
7,070
| | | | |
6,626
| | | |
7,266
| | | | |
7,150
| | | | |
21,155
| | | | |
21,020
| |
Mortgage banking, net
| | | | |
8,647
| | | | |
9,046
| | | | |
11,265
| | | |
6,284
| | | | |
4,425
| | | | |
28,958
| | | | |
23,618
| |
Insurance commissions
| | | | |
10,765
| | | | |
10,735
| | | | |
9,419
| | | |
8,813
| | | | |
10,398
| | | | |
30,919
| | | | |
29,355
| |
Wealth management
| | | | |
7,789
| | | | |
7,478
| | | | |
7,567
| | | |
7,723
| | | | |
7,530
| | | | |
22,834
| | | | |
22,617
| |
Other, net
| | | |
|
1,358
|
| | |
|
2,415
|
| | |
|
1,059
| | |
|
2,681
|
| | |
|
3,740
|
| | |
|
4,832
|
| | |
|
11,268
|
|
Nonint inc-excl sec gains (losses), net
| | | | |
47,093
| | | | |
47,391
| | | | |
46,793
| | | |
43,960
| | | | |
44,466
| | | | |
141,277
| | | | |
140,688
| |
Security gains (losses), net
| | | |
|
—
|
| | |
|
—
|
| | |
|
—
| | |
|
—
|
| | |
|
14
|
| | |
|
—
|
| | |
|
15
|
|
Total noninterest income | | | |
|
47,093
|
| | |
|
47,391
|
| | |
|
46,793
| | |
|
43,960
|
| | |
|
44,480
|
| | |
|
141,277
|
| | |
|
140,703
|
|
Salaries and employee benefits
| | | | |
60,847
| | | | |
59,975
| | | | |
58,475
| | | |
58,820
| | | | |
57,871
| | | | |
179,297
| | | | |
170,445
| |
Defined benefit plan termination
| | | | |
—
| | | | |
—
| | | | |
—
| | | |
—
| | | | |
—
| | | | |
—
| | | | |
17,644
| |
Services and fees
| | | | |
16,404
| | | | |
16,322
| | | | |
15,746
| | | |
15,419
| | | | |
15,133
| | | | |
48,472
| | | | |
45,474
| |
Net occupancy-premises
| | | | |
6,910
| | | | |
6,550
| | | | |
6,502
| | | |
6,617
| | | | |
6,702
| | | | |
19,962
| | | | |
19,150
| |
Equipment expense
| | | | |
6,200
| | | | |
6,202
| | | | |
6,099
| | | |
5,996
| | | | |
6,297
| | | | |
18,501
| | | | |
18,457
| |
Other real estate expense, net
| | | | |
1,168
| | | | |
(93
|
)
| | | |
866
| | | |
666
| | | | |
864
| | | | |
1,941
| | | | |
3,006
| |
FDIC assessment expense
| | | | |
1,999
| | | | |
2,538
| | | | |
2,995
| | | |
2,868
| | | | |
2,816
| | | | |
7,532
| | | | |
8,142
| |
Other expense
| | | |
|
11,695
|
| | |
|
12,306
|
| | |
|
11,782
| | |
|
12,565
|
| | |
|
13,403
|
| | |
|
35,783
|
| | |
|
44,900
|
|
Total noninterest expense | | | |
|
105,223
|
| | |
|
103,800
|
| | |
|
102,465
| | |
|
102,951
|
| | |
|
103,086
|
| | |
|
311,488
|
| | |
|
327,218
|
|
Income before income taxes and tax eq adj | | | | |
43,798
| | | | |
49,232
| | | | |
45,525
| | | |
45,947
| | | | |
48,265
| | | | |
138,555
| | | | |
128,184
| |
Tax equivalent adjustment
| | | |
|
3,151
|
| | |
|
3,203
|
| | |
|
3,215
| | |
|
5,060
|
| | |
|
4,978
|
| | |
|
9,569
|
| | |
|
14,726
|
|
Income before income taxes | | | | |
40,647
| | | | |
46,029
| | | | |
42,310
| | | |
40,887
| | | | |
43,287
| | | | |
128,986
| | | | |
113,458
| |
Income taxes
| | | |
|
4,394
|
| | |
|
6,216
|
| | |
|
5,480
| | |
|
25,119
|
| | |
|
8,708
|
| | |
|
16,090
|
| | |
|
23,596
|
|
Net income | | | |
$
|
36,253
|
| | |
$
|
39,813
|
| | |
$
|
36,830
| | |
$
|
15,768
|
| | |
$
|
34,579
|
| | |
$
|
112,896
|
| | |
$
|
89,862
|
|
| | | | | | | | | | | | | | | | | | | | | |
|
Per share data | | | | | | | | | | | | | | | | | | | | | | |
Earnings per share - basic | | | |
$
|
0.54
|
| | |
$
|
0.59
|
| | |
$
|
0.54
| | |
$
|
0.23
|
| | |
$
|
0.51
|
| | |
$
|
1.67
|
| | |
$
|
1.33
|
|
| | | | | | | | | | | | | | | | | | | | | |
|
Earnings per share - diluted | | | |
$
|
0.54
|
| | |
$
|
0.59
|
| | |
$
|
0.54
| | |
$
|
0.23
|
| | |
$
|
0.51
|
| | |
$
|
1.67
|
| | |
$
|
1.32
|
|
| | | | | | | | | | | | | | | | | | | | | |
|
Dividends per share | | | |
$
|
0.23
|
| | |
$
|
0.23
|
| | |
$
|
0.23
| | |
$
|
0.23
|
| | |
$
|
0.23
|
| | |
$
|
0.69
|
| | |
$
|
0.69
|
|
| | | | | | | | | | | | | | | | | | | | | |
|
Weighted average shares outstanding | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | |
|
67,621,345
|
| | |
|
67,758,097
|
| | |
|
67,809,234
| | |
|
67,742,792
|
| | |
|
67,741,655
|
| | |
|
67,728,871
|
| | |
|
67,721,971
|
|
| | | | | | | | | | | | | | | | | | | | | |
|
Diluted | | | |
|
67,796,346
|
| | |
|
67,907,267
|
| | |
|
67,960,583
| | |
|
67,938,986
|
| | |
|
67,916,418
|
| | |
|
67,875,925
|
| | |
|
67,876,295
|
|
| | | | | | | | | | | | | | | | | | | | | |
|
Period end shares outstanding | | | |
|
67,621,369
|
| | |
|
67,621,111
|
| | |
|
67,775,068
| | |
|
67,746,094
|
| | |
|
67,742,135
|
| | |
|
67,621,369
|
| | |
|
67,742,135
|
|
| | | | | | | | | | | | | | | | | | | | | |
|
See Notes to Consolidated Financials
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
CONSOLIDATED FINANCIAL INFORMATION |
September 30, 2018 |
($ in thousands) |
(unaudited) |
|
|
|
|
|
| Quarter Ended |
|
| |
|
| |
NONPERFORMING ASSETS (1) | | | | 9/30/2018 |
|
| 6/30/2018 |
|
| 3/31/2018 |
|
| 12/31/2017 |
|
| 9/30/2017 | | | | | | |
Nonaccrual loans
| | | | | | | | | | | | | | | | | | | | | | |
Alabama
| | | |
$
|
3,953
| | | |
$
|
3,685
| | | |
$
|
3,121
| | | |
$
|
3,083
| | | |
$
|
1,629
| | | | | | | |
Florida
| | | | |
1,180
| | | | |
2,978
| | | | |
2,116
| | | | |
3,034
| | | | |
3,242
| | | | | | | |
Mississippi (2)
| | | | |
41,351
| | | | |
39,006
| | | | |
48,600
| | | | |
49,129
| | | | |
59,483
| | | | | | | |
Tennessee (3)
| | | | |
13,195
| | | | |
5,338
| | | | |
5,530
| | | | |
4,436
| | | | |
4,589
| | | | | | | |
Texas
| | | |
|
8,157
|
| | |
|
10,356
|
| | |
|
9,329
|
| | |
|
7,893
|
| | |
|
346
|
| | | | | | |
Total nonaccrual loans | | | | |
67,836
| | | | |
61,363
| | | | |
68,696
| | | | |
67,575
| | | | |
69,289
| | | | | | | |
Other real estate
| | | | | | | | | | | | | | | | | | | | | | |
Alabama
| | | | |
7,526
| | | | |
8,290
| | | | |
8,962
| | | | |
11,714
| | | | |
12,726
| | | | | | | |
Florida
| | | | |
8,931
| | | | |
9,789
| | | | |
12,550
| | | | |
13,937
| | | | |
16,100
| | | | | | | |
Mississippi (2)
| | | | |
18,191
| | | | |
19,358
| | | | |
15,737
| | | | |
14,260
| | | | |
15,319
| | | | | | | |
Tennessee (3)
| | | | |
1,083
| | | | |
1,486
| | | | |
1,523
| | | | |
2,535
| | | | |
2,671
| | | | | | | |
Texas
| | | |
|
744
|
| | |
|
744
|
| | |
|
782
|
| | |
|
782
|
| | |
|
1,540
|
| | | | | | |
Total other real estate | | | |
|
36,475
|
| | |
|
39,667
|
| | |
|
39,554
|
| | |
|
43,228
|
| | |
|
48,356
|
| | | | | | |
Total nonperforming assets | | | |
$
|
104,311
|
| | |
$
|
101,030
|
| | |
$
|
108,250
|
| | |
$
|
110,803
|
| | |
$
|
117,645
|
| | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
|
LOANS PAST DUE OVER 90 DAYS (1) | | | | | | | | | | | | | | | | | | | | | | |
LHFI
| | | |
$
|
726
|
| | |
$
|
529
|
| | |
$
|
1,419
|
| | |
$
|
2,171
|
| | |
$
|
2,244
|
| | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
|
LHFS-Guaranteed GNMA serviced loans
| | | | | | | | | | | | | | | | | | | | | | |
(no obligation to repurchase) | | | |
$
|
34,115
|
| | |
$
|
34,693
|
| | |
$
|
34,826
|
| | |
$
|
35,544
|
| | |
$
|
32,332
|
| | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | |
|
| | | | Quarter Ended | | | Nine Months Ended |
ALLOWANCE FOR LOAN LOSSES (1) | | | | 9/30/2018 | | | 6/30/2018 | | | 3/31/2018 | | | 12/31/2017 | | | 9/30/2017 | | | 9/30/2018 | | | 9/30/2017 |
Beginning Balance
| | | |
$
|
83,566
| | | |
$
|
81,235
| | | |
$
|
76,733
| | | |
$
|
80,332
| | | |
$
|
76,184
| | | |
$
|
76,733
| | | |
$
|
71,265
| |
Transfers (4)
| | | | |
772
| | | | |
782
| | | | |
—
| | | | |
—
| | | | |
—
| | | | |
1,554
| | | | |
—
| |
Provision for loan losses
| | | | |
8,673
| | | | |
3,167
| | | | |
3,961
| | | | |
5,739
| | | | |
3,672
| | | | |
15,801
| | | | |
9,355
| |
Charge-offs
| | | | |
(7,017
|
)
| | | |
(3,421
|
)
| | | |
(2,542
|
)
| | | |
(12,075
|
)
| | | |
(2,752
|
)
| | | |
(12,980
|
)
| | | |
(9,072
|
)
|
Recoveries
| | | |
|
2,880
|
| | |
|
1,803
|
| | |
|
3,083
|
| | |
|
2,737
|
| | |
|
3,228
|
| | |
|
7,766
|
| | |
|
8,784
|
|
Net (charge-offs) recoveries
| | | |
|
(4,137
|
)
| | |
|
(1,618
|
)
| | |
|
541
|
| | |
|
(9,338
|
)
| | |
|
476
|
| | |
|
(5,214
|
)
| | |
|
(288
|
)
|
Ending Balance
| | | |
$
|
88,874
|
| | |
$
|
83,566
|
| | |
$
|
81,235
|
| | |
$
|
76,733
|
| | |
$
|
80,332
|
| | |
$
|
88,874
|
| | |
$
|
80,332
|
|
| | | | | | | | | | | | | | | | | | | | | |
|
PROVISION FOR LOAN LOSSES (1) | | | | | | | | | | | | | | | | | | | | | | |
Alabama
| | | |
$
|
593
| | | |
$
|
434
| | | |
$
|
618
| | | |
$
|
559
| | | |
$
|
1,218
| | | |
$
|
1,645
| | | |
$
|
3,273
| |
Florida
| | | | |
(431
|
)
| | | |
(811
|
)
| | | |
(863
|
)
| | | |
(1,235
|
)
| | | |
(744
|
)
| | | |
(2,105
|
)
| | | |
(1,716
|
)
|
Mississippi (2)
| | | | |
(1,630
|
)
| | | |
2,768
| | | | |
2,664
| | | | |
2,779
| | | | |
1,860
| | | | |
3,802
| | | | |
5,954
| |
Tennessee (3)
| | | | |
8,100
| | | | |
82
| | | | |
(268
|
)
| | | |
(439
|
)
| | | |
(72
|
)
| | | |
7,914
| | | | |
458
| |
Texas
| | | |
|
2,041
|
| | |
|
694
|
| | |
|
1,810
|
| | |
|
4,075
|
| | |
|
1,410
|
| | |
|
4,545
|
| | |
|
1,386
|
|
Total provision for loan losses | | | |
$
|
8,673
|
| | |
$
|
3,167
|
| | |
$
|
3,961
|
| | |
$
|
5,739
|
| | |
$
|
3,672
|
| | |
$
|
15,801
|
| | |
$
|
9,355
|
|
| | | | | | | | | | | | | | | | | | | | | |
|
NET CHARGE-OFFS (RECOVERIES) (1) | | | | | | | | | | | | | | | | | | | | | | |
Alabama
| | | |
$
|
198
| | | |
$
|
112
| | | |
$
|
84
| | | |
$
|
196
| | | |
$
|
314
| | | |
$
|
394
| | | |
$
|
351
| |
Florida
| | | | |
(586
|
)
| | | |
(122
|
)
| | | |
(960
|
)
| | | |
(946
|
)
| | | |
(796
|
)
| | | |
(1,668
|
)
| | | |
(1,924
|
)
|
Mississippi (2)
| | | | |
4,677
| | | | |
1,705
| | | | |
267
| | | | |
5,574
| | | | |
(11
|
)
| | | |
6,649
| | | | |
1,781
| |
Tennessee (3)
| | | | |
(96
|
)
| | | |
70
| | | | |
109
| | | | |
79
| | | | |
85
| | | | |
83
| | | | |
314
| |
Texas
| | | |
|
(56
|
)
| | |
|
(147
|
)
| | |
|
(41
|
)
| | |
|
4,435
|
| | |
|
(68
|
)
| | |
|
(244
|
)
| | |
|
(234
|
)
|
Total net charge-offs (recoveries) | | | |
$
|
4,137
|
| | |
$
|
1,618
|
| | |
$
|
(541
|
)
| | |
$
|
9,338
|
| | |
$
|
(476
|
)
| | |
$
|
5,214
|
| | |
$
|
288
|
|
(1) |
|
-
|
| Excludes acquired loans. |
(2) | |
-
| | Mississippi includes Central and Southern Mississippi Regions. |
(3) | |
-
| | Tennessee includes Memphis, Tennessee and Northern Mississippi
Regions. |
(4) | |
-
| | The allowance for loan losses balance related to the remaining
loans acquired in the Bay Bank merger, which were transferred from
acquired impaired loans to LHFI during the second quarter of 2018,
and the remaining loans acquired in the Heritage acquisition and
the Reliance merger, which were transferred from acquired impaired
loans to LHFI during the third quarter of 2018. |
| | | |
|
See Notes to Consolidated Financials
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
CONSOLIDATED FINANCIAL INFORMATION |
September 30, 2018 |
(unaudited) |
|
|
|
|
|
| Quarter Ended |
|
| Nine Months Ended |
FINANCIAL RATIOS AND OTHER DATA | | | | 9/30/2018 |
|
| 6/30/2018 |
|
| 3/31/2018 |
|
| 12/31/2017 |
|
| 9/30/2017 | | | 9/30/2018 |
|
| 9/30/2017 |
Return on equity
| | | | |
9.00
|
%
| | | |
10.09
|
%
| | | |
9.50
|
%
| | | |
3.96
|
%
| | | |
8.69
|
%
| | |
9.53
|
%
| | |
7.73
|
%
|
Return on average tangible equity
| | | | |
12.26
|
%
| | | |
13.77
|
%
| | | |
13.05
|
%
| | | |
5.60
|
%
| | | |
11.95
|
%
| | |
13.02
|
%
| | |
10.68
|
%
|
Return on assets
| | | | |
1.07
|
%
| | | |
1.19
|
%
| | | |
1.10
|
%
| | | |
0.45
|
%
| | | |
0.99
|
%
| | |
1.12
|
%
| | |
0.88
|
%
|
Interest margin - Yield - FTE
| | | | |
4.16
|
%
| | | |
4.06
|
%
| | | |
3.91
|
%
| | | |
3.90
|
%
| | | |
3.86
|
%
| | |
4.05
|
%
| | |
3.80
|
%
|
Interest margin - Cost
| | | | |
0.58
|
%
| | | |
0.50
|
%
| | | |
0.45
|
%
| | | |
0.41
|
%
| | | |
0.39
|
%
| | |
0.51
|
%
| | |
0.32
|
%
|
Net interest margin - FTE
| | | | |
3.59
|
%
| | | |
3.57
|
%
| | | |
3.46
|
%
| | | |
3.48
|
%
| | | |
3.47
|
%
| | |
3.54
|
%
| | |
3.48
|
%
|
Efficiency ratio (1)
| | | | |
65.19
|
%
| | | |
64.90
|
%
| | | |
65.50
|
%
| | | |
65.21
|
%
| | | |
65.14
|
%
| | |
65.20
|
%
| | |
65.43
|
%
|
Full-time equivalent employees
| | | | |
2,889
| | | | |
2,890
| | | | |
2,905
| | | | |
2,893
| | | | |
2,878
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
|
CREDIT QUALITY RATIOS (2) | | | | | | | | | | | | | | | | | | | | | | |
Net charge-offs/average loans
| | | | |
0.18
|
%
| | | |
0.07
|
%
| | | |
-0.03
|
%
| | | |
0.43
|
%
| | | |
-0.02
|
%
| | |
0.08
|
%
| | |
0.00
|
%
|
Provision for loan losses/average loans
| | | | |
0.39
|
%
| | | |
0.15
|
%
| | | |
0.19
|
%
| | | |
0.26
|
%
| | | |
0.17
|
%
| | |
0.24
|
%
| | |
0.15
|
%
|
Nonperforming loans/total loans (incl LHFS)
| | | | |
0.76
|
%
| | | |
0.69
|
%
| | | |
0.79
|
%
| | | |
0.77
|
%
| | | |
0.80
|
%
| | | | | | |
Nonperforming assets/total loans (incl LHFS)
| | | | |
1.17
|
%
| | | |
1.14
|
%
| | | |
1.25
|
%
| | | |
1.27
|
%
| | | |
1.37
|
%
| | | | | | |
Nonperforming assets/total loans (incl LHFS) +ORE
| | | | |
1.16
|
%
| | | |
1.13
|
%
| | | |
1.24
|
%
| | | |
1.26
|
%
| | | |
1.36
|
%
| | | | | | |
ALL/total loans (excl LHFS)
| | | | |
1.02
|
%
| | | |
0.96
|
%
| | | |
0.95
|
%
| | | |
0.90
|
%
| | | |
0.96
|
%
| | | | | | |
ALL-commercial/total commercial loans
| | | | |
1.13
|
%
| | | |
1.05
|
%
| | | |
1.04
|
%
| | | |
0.95
|
%
| | | |
1.02
|
%
| | | | | | |
ALL-consumer/total consumer and home mortgage loans
| | | | |
0.63
|
%
| | | |
0.63
|
%
| | | |
0.64
|
%
| | | |
0.68
|
%
| | | |
0.73
|
%
| | | | | | |
ALL/nonperforming loans
| | | | |
131.01
|
%
| | | |
136.18
|
%
| | | |
118.25
|
%
| | | |
113.55
|
%
| | | |
115.94
|
%
| | | | | | |
ALL/nonperforming loans (excl specifically reviewed impaired loans)
| | | | |
339.79
|
%
| | | |
345.87
|
%
| | | |
314.28
|
%
| | | |
320.84
|
%
| | | |
301.50
|
%
| | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
|
CAPITAL RATIOS | | | | | | | | | | | | | | | | | | | | | | |
Total equity/total assets
| | | | |
11.90
|
%
| | | |
11.71
|
%
| | | |
11.66
|
%
| | | |
11.39
|
%
| | | |
11.40
|
%
| | | | | | |
Tangible equity/tangible assets
| | | | |
9.26
|
%
| | | |
9.07
|
%
| | | |
9.00
|
%
| | | |
8.77
|
%
| | | |
8.79
|
%
| | | | | | |
Tangible equity/risk-weighted assets
| | | | |
11.31
|
%
| | | |
11.20
|
%
| | | |
11.25
|
%
| | | |
11.13
|
%
| | | |
11.29
|
%
| | | | | | |
Tier 1 leverage ratio (3)
| | | | |
10.41
|
%
| | | |
10.22
|
%
| | | |
9.96
|
%
| | | |
9.67
|
%
| | | |
9.61
|
%
| | | | | | |
Common equity tier 1 capital ratio (3)
| | | | |
12.20
|
%
| | | |
12.01
|
%
| | | |
12.05
|
%
| | | |
11.77
|
%
| | | |
11.80
|
%
| | | | | | |
Tier 1 risk-based capital ratio (3)
| | | | |
12.76
|
%
| | | |
12.58
|
%
| | | |
12.62
|
%
| | | |
12.33
|
%
| | | |
12.37
|
%
| | | | | | |
Total risk-based capital ratio (3)
| | | | |
13.61
|
%
| | | |
13.39
|
%
| | | |
13.44
|
%
| | | |
13.10
|
%
| | | |
13.19
|
%
| | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
|
STOCK PERFORMANCE | | | | | | | | | | | | | | | | | | | | | | |
Market value-Close
| | | |
$
|
33.65
| | | |
$
|
32.63
| | | |
$
|
31.16
| | | |
$
|
31.86
| | | |
$
|
33.12
| | | | | | | |
Book value
| | | |
$
|
23.66
| | | |
$
|
23.43
| | | |
$
|
23.17
| | | |
$
|
23.20
| | | |
$
|
23.36
| | | | | | | |
Tangible book value
| | | |
$
|
17.86
| | | |
$
|
17.61
| | | |
$
|
17.34
| | | |
$
|
17.35
| | | |
$
|
17.49
| | | | | | | |
(1) |
|
-
|
| The efficiency ratio is noninterest expense to total net
interest income (FTE) and noninterest income, excluding security
gains (losses), amortization of partnership tax credits,
amortization of purchased intangibles, and significant non-routine
income and expense items. |
(2) | |
-
| | Excludes acquired loans. |
(3) | |
-
| | The regulatory capital ratios for December 31, 2017 contain a
reclassification adjustment of $8.5 million from AOCI to retained
earnings as allowed by regulatory agencies in an interagency
statement released January 18, 2018 to address disproportionate
tax effect in AOCI resulting from the recent enactment of the Tax
Cuts and Jobs Act of 2017 and the application of Financial
Accounting Standards Board Accounting Standards Codification Topic
740, Income Taxes. |
| | | |
|
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
NOTES TO CONSOLIDATED FINANCIALS |
September 30, 2018 |
($ in thousands) |
(unaudited) |
|
Note 1 – Subsequent Events
On October 10, 2018, Hurricane Michael struck the Florida Panhandle
causing significant damages. As of September 30, 2018, Trustmark had
1,786 loans with a balance of $239.5 million and exposure of $281.5
million in the Federal Emergency Management Agency (FEMA) designated
disaster areas which includes 12 counties in Florida and 13 counties in
Georgia. Immediately following the storm, Trustmark initiated a process
to identify all customers in the FEMA disaster areas. Efforts are now
ongoing to contact those borrowers to offer assistance as well as to
establish reasonable estimates of uninsured damage and to adequately
assess potential risk to the bank. As of the date of this earnings
release, Management continues to evaluate the impact of Hurricane
Michael and is unable to provide a reasonable estimate of the financial
impact on Trustmark’s consolidated financial statements.
Note 2 - Securities Available for Sale and Held to Maturity
The following table is a summary of the estimated fair value of
securities available for sale and the amortized cost of securities held
to maturity ($ in thousands):
|
|
|
|
| 9/30/2018 |
|
| 6/30/2018 |
|
| 3/31/2018 |
|
| 12/31/2017 |
|
| 9/30/2017 |
SECURITIES AVAILABLE FOR SALE | | | | | | | | | | | | | | | | | | | | | |
U.S. Government agency obligations
| | | | | | | | | | | | | | | | | | | | | |
Issued by U.S. Government agencies
| | | |
$
|
32,371
| | |
$
|
36,414
| | |
$
|
40,381
| | |
$
|
45,285
| | |
$
|
49,994
|
Obligations of states and political subdivisions
| | | | |
57,264
| | | |
65,348
| | | |
75,013
| | | |
79,229
| | | |
89,144
|
Mortgage-backed securities
| | | | | | | | | | | | | | | | | | | | | |
Residential mortgage pass-through securities
| | | | | | | | | | | | | | | | | | | | | |
Guaranteed by GNMA
| | | | |
65,847
| | | |
60,245
| | | |
62,457
| | | |
65,746
| | | |
60,902
|
Issued by FNMA and FHLMC
| | | | |
684,474
| | | |
727,433
| | | |
767,676
| | | |
814,450
| | | |
860,131
|
Other residential mortgage-backed securities
| | | | | | | | | | | | | | | | | | | | | |
Issued or guaranteed by FNMA, FHLMC, or GNMA
| | | | |
840,073
| | | |
897,652
| | | |
954,537
| | | |
1,016,790
| | | |
1,087,169
|
Commercial mortgage-backed securities
| | | | | | | | | | | | | | | | | | | | | |
Issued or guaranteed by FNMA, FHLMC, or GNMA
| | | |
|
184,604
| | |
|
187,583
| | |
|
197,433
| | |
|
217,135
| | |
|
221,749
|
Total securities available for sale
| | | |
$
|
1,864,633
| | |
$
|
1,974,675
| | |
$
|
2,097,497
| | |
$
|
2,238,635
| | |
$
|
2,369,089
|
| | | | | | | | | | | | | | | | | | | | |
|
SECURITIES HELD TO MATURITY | | | | | | | | | | | | | | | | | | | | | |
U.S. Government agency obligations
| | | | | | | | | | | | | | | | | | | | | |
Issued by U.S. Government sponsored agencies
| | | |
$
|
3,725
| | |
$
|
3,714
| | |
$
|
3,703
| | |
$
|
3,692
| | |
$
|
3,680
|
Obligations of states and political subdivisions
| | | | |
42,623
| | | |
42,458
| | | |
46,011
| | | |
46,039
| | | |
46,069
|
Mortgage-backed securities
| | | | | | | | | | | | | | | | | | | | | |
Residential mortgage pass-through securities
| | | | | | | | | | | | | | | | | | | | | |
Guaranteed by GNMA
| | | | |
12,316
| | | |
12,756
| | | |
12,974
| | | |
13,539
| | | |
14,191
|
Issued by FNMA and FHLMC
| | | | |
119,040
| | | |
123,377
| | | |
128,517
| | | |
133,975
| | | |
139,172
|
Other residential mortgage-backed securities
| | | | | | | | | | | | | | | | | | | | | |
Issued or guaranteed by FNMA, FHLMC, or GNMA
| | | | |
600,635
| | | |
627,470
| | | |
653,325
| | | |
678,926
| | | |
708,715
|
Commercial mortgage-backed securities
| | | | | | | | | | | | | | | | | | | | | |
Issued or guaranteed by FNMA, FHLMC, or GNMA
| | | |
|
165,544
| | |
|
176,070
| | |
|
179,445
| | |
|
180,315
| | |
|
190,456
|
Total securities held to maturity
| | | |
$
|
943,883
| | |
$
|
985,845
| | |
$
|
1,023,975
| | |
$
|
1,056,486
| | |
$
|
1,102,283
|
|
At September 30, 2018, the net unamortized, unrealized loss included in
accumulated other comprehensive loss in the accompanying balance sheet
for securities held to maturity previously transferred from securities
available for sale totaled approximately $16.6 million ($12.4 million,
net of tax).
Management continues to focus on asset quality as one of the strategic
goals of the securities portfolio, which is evidenced by the investment
of approximately 96% of the portfolio in GSE-backed obligations and
other Aaa rated securities as determined by Moody’s. None of the
securities owned by Trustmark are collateralized by assets which are
considered sub-prime. Furthermore, outside of stock ownership in the
Federal Home Loan Bank of Dallas, Federal Home Loan Bank of Atlanta and
Federal Reserve Bank, Trustmark does not hold any other equity
investment in a GSE.
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
NOTES TO CONSOLIDATED FINANCIALS |
September 30, 2018 |
($ in thousands) |
(unaudited) |
|
Note 3 – Loan Composition
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
LHFI BY TYPE (excluding acquired loans) | | | | | 9/30/2018 | | | 6/30/2018 | | | 3/31/2018 | | | 12/31/2017 | | | 9/30/2017 |
Loans secured by real estate:
| | | | | | | | | | | | | | | | | |
Construction, land development and other land loans
| | | | |
$
|
1,031,491
| | | |
$
|
1,038,745
| | | |
$
|
986,188
| | | |
$
|
987,624
| | | |
$
|
950,144
| |
Secured by 1-4 family residential properties
| | | | | |
1,801,029
| | | | |
1,742,496
| | | | |
1,698,885
| | | | |
1,675,311
| | | | |
1,648,733
| |
Secured by nonfarm, nonresidential properties
| | | | | |
2,294,289
| | | | |
2,321,734
| | | | |
2,257,899
| | | | |
2,193,823
| | | | |
2,172,885
| |
Other real estate secured
| | | | | |
453,687
| | | | |
397,538
| | | | |
425,664
| | | | |
517,956
| | | | |
482,163
| |
Commercial and industrial loans
| | | | | |
1,565,922
| | | | |
1,572,764
| | | | |
1,561,967
| | | | |
1,570,345
| | | | |
1,568,588
| |
Consumer loans
| | | | | |
182,709
| | | | |
175,261
| | | | |
168,469
| | | | |
171,918
| | | | |
173,061
| |
State and other political subdivision loans
| | | | | |
929,178
| | | | |
925,452
| | | | |
936,014
| | | | |
952,483
| | | | |
936,614
| |
Other loans
| | | | |
|
488,725
|
| | |
|
504,993
|
| | |
|
478,899
|
| | |
|
500,507
|
| | |
|
475,153
|
|
LHFI
| | | | | |
8,747,030
| | | | |
8,678,983
| | | | |
8,513,985
| | | | |
8,569,967
| | | | |
8,407,341
| |
Allowance for loan losses
| | | | |
|
(88,874
|
)
| | |
|
(83,566
|
)
| | |
|
(81,235
|
)
| | |
|
(76,733
|
)
| | |
|
(80,332
|
)
|
Net LHFI
| | | | |
$
|
8,658,156
|
| | |
$
|
8,595,417
|
| | |
$
|
8,432,750
|
| | |
$
|
8,493,234
|
| | |
$
|
8,327,009
|
|
| | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | |
|
ACQUIRED LOANS BY TYPE | | | | | 9/30/2018 | | | 6/30/2018 | | | 3/31/2018 | | | 12/31/2017 | | | 9/30/2017 |
Loans secured by real estate:
| | | | | | | | | | | | | | | | | |
Construction, land development and other land loans
| | | | |
$
|
6,657
| | | |
$
|
11,900
| | | |
$
|
17,575
| | | |
$
|
23,586
| | | |
$
|
29,384
| |
Secured by 1-4 family residential properties
| | | | | |
25,274
| | | | |
36,419
| | | | |
49,289
| | | | |
61,751
| | | | |
65,746
| |
Secured by nonfarm, nonresidential properties
| | | | | |
66,865
| | | | |
85,117
| | | | |
100,285
| | | | |
114,694
| | | | |
122,200
| |
Other real estate secured
| | | | | |
8,507
| | | | |
9,862
| | | | |
14,581
| | | | |
16,746
| | | | |
18,431
| |
Commercial and industrial loans
| | | | | |
16,610
| | | | |
20,485
| | | | |
21,808
| | | | |
31,506
| | | | |
34,124
| |
Consumer loans
| | | | | |
1,514
| | | | |
1,700
| | | | |
1,920
| | | | |
2,600
| | | | |
2,749
| |
Other loans
| | | | |
|
7,188
|
| | |
|
7,624
|
| | |
|
10,018
|
| | |
|
10,634
|
| | |
|
11,123
|
|
Acquired loans
| | | | | |
132,615
| | | | |
173,107
| | | | |
215,476
| | | | |
261,517
| | | | |
283,757
| |
Allowance for loan losses, acquired loans
| | | | |
|
(1,714
|
)
| | |
|
(3,046
|
)
| | |
|
(4,294
|
)
| | |
|
(4,079
|
)
| | |
|
(5,768
|
)
|
Net acquired loans
| | | | |
$
|
130,901
|
| | |
$
|
170,061
|
| | |
$
|
211,182
|
| | |
$
|
257,438
|
| | |
$
|
277,989
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
NOTES TO CONSOLIDATED FINANCIALS |
September 30, 2018 |
($ in thousands) |
(unaudited) |
|
Note 3 – Loan Composition (continued)
|
|
|
| |
| | | | September 30, 2018 |
LHFI - COMPOSITION BY REGION (1) | | | | Total |
|
| Alabama |
|
| Florida |
|
| Mississippi (Central and Southern Regions) |
|
| Tennessee (Memphis, TN
and NorthernMS Regions) |
|
| Texas |
Loans secured by real estate:
| | | | | | | | | | | | | | | | | | | | | | | | | |
Construction, land development and other land loans
| | | |
$
|
1,031,491
| | |
$
|
335,338
| | |
$
|
79,432
| | |
$
|
333,614
| | |
$
|
19,974
| | |
$
|
263,133
|
Secured by 1-4 family residential properties
| | | | |
1,801,029
| | | |
113,369
| | | |
48,527
| | | |
1,539,417
| | | |
86,379
| | | |
13,337
|
Secured by nonfarm, nonresidential properties
| | | | |
2,294,289
| | | |
517,795
| | | |
222,194
| | | |
913,676
| | | |
157,188
| | | |
483,436
|
Other real estate secured
| | | | |
453,687
| | | |
70,306
| | | |
11,603
| | | |
215,792
| | | |
11,070
| | | |
144,916
|
Commercial and industrial loans
| | | | |
1,565,922
| | | |
197,278
| | | |
17,065
| | | |
783,217
| | | |
378,433
| | | |
189,929
|
Consumer loans
| | | | |
182,709
| | | |
23,823
| | | |
5,473
| | | |
130,527
| | | |
20,095
| | | |
2,791
|
State and other political subdivision loans
| | | | |
929,178
| | | |
87,807
| | | |
42,144
| | | |
586,996
| | | |
28,355
| | | |
183,876
|
Other loans
| | | |
|
488,725
| | |
|
77,492
| | |
|
16,291
| | |
|
318,691
| | |
|
38,273
| | |
|
37,978
|
Loans
| | | |
$
|
8,747,030
| | |
$
|
1,423,208
| | |
$
|
442,729
| | |
$
|
4,821,930
| | |
$
|
739,767
| | |
$
|
1,319,396
|
| | | | | | | | | | | | | | | | | | | | | | | | |
|
CONSTRUCTION, LAND DEVELOPMENT AND
OTHER LAND LOANS BY REGION(1) |
Lots
| | | |
$
|
62,886
| | |
$
|
14,899
| | |
$
|
19,168
| | |
$
|
23,758
| | |
$
|
1,508
| | |
$
|
3,553
|
Development
| | | | |
58,520
| | | |
7,621
| | | |
7,663
| | | |
29,243
| | | |
680
| | | |
13,313
|
Unimproved land
| | | | |
88,965
| | | |
13,869
| | | |
15,305
| | | |
28,918
| | | |
13,297
| | | |
17,576
|
1-4 family construction
| | | | |
211,270
| | | |
81,997
| | | |
12,567
| | | |
82,019
| | | |
2,024
| | | |
32,663
|
Other construction
| | | |
|
609,850
| | |
|
216,952
| | |
|
24,729
| | |
|
169,676
| | |
|
2,465
| | |
|
196,028
|
Construction, land development and other land loans
| | | |
$
|
1,031,491
| | |
$
|
335,338
| | |
$
|
79,432
| | |
$
|
333,614
| | |
$
|
19,974
| | |
$
|
263,133
|
| | | | | | | | | | | | | | | | | | | | | | | | |
|
LOANS SECURED BY NONFARM,
NONRESIDENTIAL PROPERTIES BY REGION(1) |
Non-owner occupied:
| | | | | | | | | | | | | | | | | | | | | | | | | |
Retail
| | | |
$
|
391,342
| | |
$
|
139,168
| | |
$
|
54,539
| | |
$
|
100,954
| | |
$
|
24,585
| | |
$
|
72,096
|
Office
| | | | |
142,098
| | | |
70,872
| | | |
21,027
| | | |
—
| | | |
7,988
| | | |
42,211
|
Nursing homes/senior living
| | | | |
205,700
| | | |
33,075
| | | |
—
| | | |
166,435
| | | |
6,190
| | | |
—
|
Hotel/motel
| | | | |
255,710
| | | |
74,450
| | | |
51,916
| | | |
53,097
| | | |
34,156
| | | |
42,091
|
Mini-storage
| | | | |
121,764
| | | |
12,665
| | | |
6,198
| | | |
36,264
| | | |
615
| | | |
66,022
|
Industrial
| | | | |
102,793
| | | |
20,577
| | | |
7,081
| | | |
17,630
| | | |
2,259
| | | |
55,246
|
Health care
| | | | |
52,464
| | | |
22,594
| | | |
748
| | | |
26,310
| | | |
—
| | | |
2,812
|
Convenience stores
| | | | |
31,322
| | | |
2,766
| | | |
116
| | | |
17,028
| | | |
764
| | | |
10,648
|
Other
| | | |
|
149,606
| | |
|
5,297
| | |
|
8,530
| | |
|
87,415
| | |
|
22,425
| | |
|
25,939
|
Total non-owner occupied loans
| | | | |
1,452,799
| | | |
381,464
| | | |
150,155
| | | |
505,133
| | | |
98,982
| | | |
317,065
|
| | | | | | | | | | | | | | | | | | | | | | | | |
|
Owner-occupied:
| | | | | | | | | | | | | | | | | | | | | | | | | |
Office
| | | | |
164,111
| | | |
29,926
| | | |
28,039
| | | |
60,073
| | | |
6,588
| | | |
39,485
|
Churches
| | | | |
92,797
| | | |
19,036
| | | |
6,656
| | | |
45,949
| | | |
16,262
| | | |
4,894
|
Industrial warehouses
| | | | |
140,636
| | | |
11,390
| | | |
3,337
| | | |
54,987
| | | |
14,559
| | | |
56,363
|
Health care
| | | | |
109,006
| | | |
21,652
| | | |
6,465
| | | |
63,265
| | | |
2,827
| | | |
14,797
|
Convenience stores
| | | | |
115,278
| | | |
14,613
| | | |
12,956
| | | |
63,379
| | | |
1,229
| | | |
23,101
|
Retail
| | | | |
86,833
| | | |
24,035
| | | |
7,746
| | | |
33,231
| | | |
3,686
| | | |
18,135
|
Restaurants
| | | | |
35,360
| | | |
2,712
| | | |
1,529
| | | |
27,224
| | | |
1,832
| | | |
2,063
|
Auto dealerships
| | | | |
31,240
| | | |
8,480
| | | |
149
| | | |
13,600
| | | |
9,011
| | | |
—
|
Other
| | | |
|
66,229
| | |
|
4,487
| | |
|
5,162
| | |
|
46,835
| | |
|
2,212
| | |
|
7,533
|
Total owner-occupied loans
| | | |
|
841,490
| | |
|
136,331
| | |
|
72,039
| | |
|
408,543
| | |
|
58,206
| | |
|
166,371
|
Loans secured by nonfarm, nonresidential properties
| | | |
$
|
2,294,289
| | |
$
|
517,795
| | |
$
|
222,194
| | |
$
|
913,676
| | |
$
|
157,188
| | |
$
|
483,436
|
| | | | | | | | | | | | | | | | | | | | | | | | |
|
(1) Excludes acquired loans. |
|
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
NOTES TO CONSOLIDATED FINANCIALS |
September 30, 2018 |
($ in thousands) |
(unaudited) |
|
Note 4 – Yields on Earning Assets and Interest-Bearing Liabilities
The following table illustrates the yields on earning assets by category
as well as the rates paid on interest-bearing liabilities on a tax
equivalent basis:
|
|
|
| |
|
| |
| | | | Quarter Ended | | | Nine Months Ended |
| | | | 9/30/2018 |
|
| 6/30/2018 |
|
| 3/31/2018 |
|
| 12/31/2017 |
|
| 9/30/2017 | | | 9/30/2018 |
|
| 9/30/2017 |
Securities – taxable
| | | |
2.24
|
%
| | |
2.25
|
%
| | |
2.26
|
%
| | |
2.21
|
%
| | |
2.23
|
%
| | |
2.25
|
%
| | |
2.26
|
%
|
Securities – nontaxable
| | | |
3.66
|
%
| | |
3.66
|
%
| | |
3.68
|
%
| | |
4.35
|
%
| | |
4.34
|
%
| | |
3.67
|
%
| | |
4.35
|
%
|
Securities – total
| | | |
2.27
|
%
| | |
2.29
|
%
| | |
2.30
|
%
| | |
2.27
|
%
| | |
2.29
|
%
| | |
2.28
|
%
| | |
2.33
|
%
|
Loans - LHFI & LHFS
| | | |
4.72
|
%
| | |
4.60
|
%
| | |
4.45
|
%
| | |
4.38
|
%
| | |
4.36
|
%
| | |
4.59
|
%
| | |
4.29
|
%
|
Acquired loans
| | | |
10.82
|
%
| | |
9.96
|
%
| | |
8.13
|
%
| | |
9.27
|
%
| | |
8.78
|
%
| | |
9.44
|
%
| | |
8.37
|
%
|
Loans - total
| | | |
4.82
|
%
| | |
4.72
|
%
| | |
4.55
|
%
| | |
4.53
|
%
| | |
4.51
|
%
| | |
4.70
|
%
| | |
4.43
|
%
|
FF sold & rev repo
| | | |
2.50
|
%
| | |
1.89
|
%
| | |
1.70
|
%
| | |
1.61
|
%
| | |
1.55
|
%
| | |
1.99
|
%
| | |
1.45
|
%
|
Other earning assets
| | | |
2.20
|
%
| | |
2.27
|
%
| | |
1.77
|
%
| | |
2.34
|
%
| | |
1.67
|
%
| | |
2.07
|
%
| | |
1.65
|
%
|
Total earning assets
| | | |
4.16
|
%
| | |
4.06
|
%
| | |
3.91
|
%
| | |
3.90
|
%
| | |
3.86
|
%
| | |
4.05
|
%
| | |
3.80
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
Interest-bearing deposits
| | | |
0.73
|
%
| | |
0.60
|
%
| | |
0.49
|
%
| | |
0.40
|
%
| | |
0.35
|
%
| | |
0.61
|
%
| | |
0.29
|
%
|
FF pch & repo
| | | |
1.54
|
%
| | |
1.42
|
%
| | |
0.97
|
%
| | |
0.93
|
%
| | |
0.94
|
%
| | |
1.34
|
%
| | |
0.77
|
%
|
Other borrowings
| | | |
2.34
|
%
| | |
2.20
|
%
| | |
1.69
|
%
| | |
1.35
|
%
| | |
1.28
|
%
| | |
1.93
|
%
| | |
1.13
|
%
|
Total interest-bearing liabilities
| | | |
0.80
|
%
| | |
0.69
|
%
| | |
0.61
|
%
| | |
0.56
|
%
| | |
0.53
|
%
| | |
0.70
|
%
| | |
0.44
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
Net interest margin
| | | |
3.59
|
%
| | |
3.57
|
%
| | |
3.46
|
%
| | |
3.48
|
%
| | |
3.47
|
%
| | |
3.54
|
%
| | |
3.48
|
%
|
Net interest margin excluding acquired loans
| | | |
3.50
|
%
| | |
3.46
|
%
| | |
3.37
|
%
| | |
3.35
|
%
| | |
3.34
|
%
| | |
3.44
|
%
| | |
3.36
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
Reflected in the table above are yields on earning assets and
liabilities, along with the net interest margin which equals reported
net interest income-FTE, annualized, as a percent of average earning
assets. In addition, the table includes net interest margin excluding
acquired loans, which equals reported net interest income-FTE excluding
interest income on acquired loans, annualized, as a percent of average
earning assets excluding average acquired loans.
During the third quarter of 2018, the yield on acquired loans totaled
10.82% and included $1.6 million in recoveries from the settlement of
debt, which represented approximately 4.40% of the annualized total
acquired loan yield. Excluding acquired loans, the net interest margin
totaled 3.50% for the third quarter of 2018, an increase of 4 basis
points when compared to the second quarter of 2018, which was
principally due to growth in the yield on the loans held for investment
and held for sale portfolio, runoff of maturing investment securities,
and favorable funding mix offset by higher costs of interest-bearing
deposits.
Note 5 – Mortgage Banking
Trustmark utilizes a portfolio of exchange-traded derivative
instruments, such as Treasury note futures contracts and option
contracts, to achieve a fair value return that offsets the changes in
fair value of mortgage servicing rights (MSR) attributable to interest
rates. These transactions are considered freestanding derivatives that
do not otherwise qualify for hedge accounting under generally accepted
accounting principles (GAAP). Changes in the fair value of these
exchange-traded derivative instruments, including administrative costs,
are recorded in noninterest income in mortgage banking, net and are
offset by the changes in the fair value of the MSR. The MSR fair value
represents the present value of future cash flows, which among other
things includes decay and the effect of changes in interest rates.
Ineffectiveness of hedging the MSR fair value is measured by comparing
the change in value of hedge instruments to the change in the fair value
of the MSR asset attributable to changes in interest rates and other
market driven changes in valuation inputs and assumptions.
The following table illustrates the components of mortgage banking
revenues included in noninterest income in the accompanying income
statements:
|
|
|
| |
|
| |
| | | | Quarter Ended | | | Nine Months Ended |
| | | | 9/30/2018 |
|
| 6/30/2018 |
|
| 3/31/2018 |
|
| 12/31/2017 |
|
| 9/30/2017 | | | 9/30/2018 |
|
| 9/30/2017 |
Mortgage servicing income, net
| | | |
$
|
5,428
| | | |
$
|
5,502
| | | |
$
|
5,588
| | | |
$
|
5,471
| | | |
$
|
5,295
| | | |
$
|
16,518
| | | |
$
|
16,192
| |
Change in fair value-MSR from runoff
| | | | |
(3,181
|
)
| | | |
(3,334
|
)
| | | |
(2,507
|
)
| | | |
(2,605
|
)
| | | |
(2,892
|
)
| | | |
(9,022
|
)
| | | |
(8,175
|
)
|
Gain on sales of loans, net
| | | | |
6,411
| | | | |
5,414
| | | | |
4,585
| | | | |
5,300
| | | | |
5,083
| | | | |
16,410
| | | | |
13,634
| |
Other, net
| | | |
|
(83
|
)
| | |
|
1,365
|
| | |
|
295
|
| | |
|
(1,120
|
)
| | |
|
(450
|
)
| | |
|
1,577
|
| | |
|
951
|
|
Mortgage banking income before hedge ineffectiveness
| | | |
|
8,575
|
| | |
|
8,947
|
| | |
|
7,961
|
| | |
|
7,046
|
| | |
|
7,036
|
| | |
|
25,483
|
| | |
|
22,602
|
|
Change in fair value-MSR from market changes
| | | | |
2,615
| | | | |
1,743
| | | | |
9,521
| | | | |
1,168
| | | | |
(2,393
|
)
| | | |
13,879
| | | | |
(2,218
|
)
|
Change in fair value of derivatives
| | | |
|
(2,543
|
)
| | |
|
(1,644
|
)
| | |
|
(6,217
|
)
| | |
|
(1,930
|
)
| | |
|
(218
|
)
| | |
|
(10,404
|
)
| | |
|
3,234
|
|
Net positive (negative) hedge ineffectiveness
| | | |
|
72
|
| | |
|
99
|
| | |
|
3,304
|
| | |
|
(762
|
)
| | |
|
(2,611
|
)
| | |
|
3,475
|
| | |
|
1,016
|
|
Mortgage banking, net
| | | |
$
|
8,647
|
| | |
$
|
9,046
|
| | |
$
|
11,265
|
| | |
$
|
6,284
|
| | |
$
|
4,425
|
| | |
$
|
28,958
|
| | |
$
|
23,618
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
NOTES TO CONSOLIDATED FINANCIALS |
September 30, 2018 |
($ in thousands) |
(unaudited) |
|
Note 6 – Other Noninterest Income and Expense
Other noninterest income consisted of the following for the periods
presented ($ in thousands):
|
|
|
| |
|
| |
| | | | Quarter Ended | | | Nine Months Ended |
| | | | 9/30/2018 |
|
| 6/30/2018 |
|
| 3/31/2018 |
|
| 12/31/2017 |
|
| 9/30/2017 | | | 9/30/2018 |
|
| 9/30/2017 |
Partnership amortization for tax credit purposes
| | | |
$
|
(2,202
|
)
| | |
$
|
(2,202
|
)
| | |
$
|
(2,202
|
)
| | |
$
|
(2,478
|
)
| | |
$
|
(2,521
|
)
| | |
$
|
(6,606
|
)
| | |
$
|
(7,082
|
)
|
Increase in life insurance cash surrender value
| | | | |
1,805
| | | | |
1,770
| | | | |
1,738
| | | | |
1,816
| | | | |
1,813
| | | | |
5,313
| | | | |
5,309
| |
Other miscellaneous income
| | | |
|
1,755
|
| | |
|
2,847
|
| | |
|
1,523
|
| | |
|
3,343
|
| | |
|
4,448
|
| | |
|
6,125
|
| | |
|
13,041
|
|
Total other, net
| | | |
$
|
1,358
|
| | |
$
|
2,415
|
| | |
$
|
1,059
|
| | |
$
|
2,681
|
| | |
$
|
3,740
|
| | |
$
|
4,832
|
| | |
$
|
11,268
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
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.
Trustmark received $13 thousand of nontaxable proceeds related to
bank-owned life insurance during the third quarter of 2018 compared to
$1.2 million received during the second quarter of 2018. Trustmark
received no nontaxable proceeds related to bank-owned life insurance
during the first quarter of 2018 compared to $1.7 million and $2.7
million during the fourth and third quarters of 2017, respectively.
These proceeds were recorded in other miscellaneous income in the table
above.
Other noninterest expense consisted of the following for the periods
presented ($ in thousands):
|
|
|
| |
|
| |
| | | | Quarter Ended | | | Nine Months Ended |
| | | | 9/30/2018 |
|
| 6/30/2018 |
|
| 3/31/2018 |
|
| 12/31/2017 |
|
| 9/30/2017 | | | 9/30/2018 |
|
| 9/30/2017 |
Loan expense
| | | |
$
|
2,824
| | |
$
|
3,046
| | |
$
|
2,791
| | |
$
|
2,276
| | |
$
|
3,013
| | |
$
|
8,661
| | |
$
|
8,632
|
Amortization of intangibles
| | | | |
1,286
| | | |
1,286
| | | |
1,397
| | | |
1,522
| | | |
1,539
| | | |
3,969
| | | |
4,647
|
Defined benefit plans non-service cost reclass from salaries and
employee benefits
| | | | |
885
| | | |
885
| | | |
885
| | | |
968
| | | |
966
| | | |
2,655
| | | |
4,754
|
Other miscellaneous expense
| | | |
|
6,700
| | |
|
7,089
| | |
|
6,709
| | |
|
7,799
| | |
|
7,885
| | |
|
20,498
| | |
|
26,867
|
Total other expense
| | | |
$
|
11,695
| | |
$
|
12,306
| | |
$
|
11,782
| | |
$
|
12,565
| | |
$
|
13,403
| | |
$
|
35,783
| | |
$
|
44,900
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Trustmark adopted ASU 2017-07, “Compensation-Retirement Benefits (Topic
715)-Improving the Presentation of Net Periodic Pension Cost and Net
Periodic Postretirement Benefit Cost” effective January 1, 2018 and was
required to reclassify the defined benefit plans non-service cost from
salaries and employee benefits to other expense on the consolidated
statements of income for each period presented.
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
NOTES TO CONSOLIDATED FINANCIALS |
September 30, 2018 |
($ in thousands) |
(unaudited) |
|
Note 7 – Income Taxes
The income tax provision consisted of the following for the periods
presented ($ in thousands):
|
|
|
| |
|
| |
| | | | Quarter Ended | | | Nine Months Ended |
| | | | 9/30/2018 |
|
| 6/30/2018 |
|
| 3/31/2018 |
|
| 12/31/2017 |
|
| 9/30/2017 | | | 9/30/2018 |
|
| 9/30/2017 |
Current
| | | |
$
|
2,782
| | |
$
|
5,516
| | |
$
|
2,180
| | |
$
|
3,850
| | | |
$
|
8,108
| | |
$
|
10,478
| | |
$
|
18,796
|
Deferred
| | | | |
1,612
| | | |
700
| | | |
3,300
| | | |
4,300
| | | | |
600
| | | |
5,612
| | | |
4,800
|
Elimination of deferred tax valuation allowance
| | | |
|
—
| | |
|
—
| | |
|
—
| | |
|
(8,650
|
)
| | |
|
—
| | |
|
—
| | |
|
—
|
Income tax provision before re-measurement
| | | | |
4,394
| | | |
6,216
| | | |
5,480
| | | |
(500
|
)
| | | |
8,708
| | | |
16,090
| | | |
23,596
|
Re-measurement of net deferred tax assets
| | | |
|
—
| | |
|
—
| | |
|
—
| | |
|
25,619
|
| | |
|
—
| | |
|
—
| | |
|
—
|
Income tax provision
| | | |
$
|
4,394
| | |
$
|
6,216
| | |
$
|
5,480
| | |
$
|
25,119
|
| | |
$
|
8,708
| | |
$
|
16,090
| | |
$
|
23,596
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
During 2013, a deferred tax valuation allowance was created as a result
of Trustmark’s merger with BancTrust Financial Group, Inc. and was
established to reduce deferred tax assets to the amount that was more
likely than not to be realized in future years. Trustmark has
continually evaluated this allowance since inception and, based on the
weight of the available evidence, has determined that the deferred tax
assets will not be subject to the limitations on the deductibility of
built-in losses (Internal Revenue Service Code, Section 382) in future
years. Therefore, during the fourth quarter of 2017, the valuation
allowance was eliminated creating a decrease in deferred income tax
expense of $8.7 million.
Following the recent enactment of the Tax Reform Act which resulted in
the reduction of the corporate federal income tax rate, Trustmark
re-measured its net deferred tax assets and recorded an increase in
deferred income tax expense of $25.6 million during the fourth quarter
of 2017.
Note 8 – Non-GAAP Financial Measures
In addition to capital ratios defined by U.S. generally accepted
accounting principles (GAAP) and banking regulators, Trustmark utilizes
various tangible common equity measures when evaluating capital
utilization and adequacy. Tangible common equity, as defined by
Trustmark, represents common equity less goodwill and identifiable
intangible assets.
Trustmark believes these measures are important because they reflect the
level of capital available to withstand unexpected market conditions.
Additionally, presentation of these measures allows readers to compare
certain aspects of Trustmark’s capitalization to other organizations.
These ratios differ from capital measures defined by banking regulators
principally in that the numerator excludes shareholders’ equity
associated with preferred securities, the nature and extent of which
varies across organizations. In Management’s experience, many stock
analysts use tangible common equity measures in conjunction with more
traditional bank capital ratios to compare capital adequacy of banking
organizations with significant amounts of goodwill or other tangible
assets, typically stemming from the use of the purchase accounting
method in accounting for mergers and acquisitions.
These calculations are intended to complement the capital ratios defined
by GAAP and banking regulators. Because GAAP does not include these
capital ratio measures, Trustmark believes there are no comparable GAAP
financial measures to these tangible common equity ratios. Despite the
importance of these measures to Trustmark, there are no standardized
definitions for them and, as a result, Trustmark’s calculations may not
be comparable with other organizations. Also there may be limits in the
usefulness of these measures to investors. As a result, Trustmark
encourages readers to consider its consolidated financial statements in
their entirety and not to rely on any single financial measure. The
following table reconciles Trustmark’s calculation of these measures to
amounts reported under GAAP.
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
NOTES TO CONSOLIDATED FINANCIALS |
September 30, 2018 |
($ in thousands except per share data) |
(unaudited) |
|
Note 8 – Non-GAAP Financial Measures (continued)
|
|
| |
|
| |
|
| |
| | | | | | Quarter Ended | | | Nine Months Ended |
| | | | | | 9/30/2018 |
|
| 6/30/2018 |
|
| 3/31/2018 |
|
| 12/31/2017 |
|
| 9/30/2017 | | | 9/30/2018 |
|
| 9/30/2017 |
TANGIBLE EQUITY |
AVERAGE BALANCES
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total shareholders' equity
| | | | | |
$
|
1,597,588
| | | |
$
|
1,581,906
| | | |
$
|
1,572,514
| | | |
$
|
1,579,633
| | | |
$
|
1,577,867
| | | |
$
|
1,584,095
| | | |
$
|
1,554,566
| |
Less: Goodwill
| | | | | | |
(379,627
|
)
| | | |
(379,627
|
)
| | | |
(379,627
|
)
| | | |
(379,627
|
)
| | | |
(379,627
|
)
| | | |
(379,627
|
)
| | | |
(374,707
|
)
|
Identifiable intangible assets
| | | | | |
|
(13,083
|
)
| | |
|
(14,380
|
)
| | |
|
(15,782
|
)
| | |
|
(17,196
|
)
| | |
|
(18,714
|
)
| | |
|
(14,405
|
)
| | |
|
(19,454
|
)
|
Total average tangible equity
| | | | | |
$
|
1,204,878
|
| | |
$
|
1,187,899
|
| | |
$
|
1,177,105
|
| | |
$
|
1,182,810
|
| | |
$
|
1,179,526
|
| | |
$
|
1,190,063
|
| | |
$
|
1,160,405
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
PERIOD END BALANCES
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total shareholders' equity
| | | | | |
$
|
1,599,604
| | | |
$
|
1,584,072
| | | |
$
|
1,570,137
| | | |
$
|
1,571,701
| | | |
$
|
1,582,535
| | | | | | | | | |
Less: Goodwill
| | | | | | |
(379,627
|
)
| | | |
(379,627
|
)
| | | |
(379,627
|
)
| | | |
(379,627
|
)
| | | |
(379,627
|
)
| | | | | | | | |
Identifiable intangible assets
| | | | | |
|
(12,391
|
)
| | |
|
(13,677
|
)
| | |
|
(14,963
|
)
| | |
|
(16,360
|
)
| | |
|
(17,883
|
)
| | | | | | | | |
Total tangible equity
| | |
(a)
| | |
$
|
1,207,586
|
| | |
$
|
1,190,768
|
| | |
$
|
1,175,547
|
| | |
$
|
1,175,714
|
| | |
$
|
1,185,025
|
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
TANGIBLE ASSETS |
Total assets
| | | | | |
$
|
13,439,812
| | | |
$
|
13,525,265
| | | |
$
|
13,463,439
| | | |
$
|
13,797,953
| | | |
$
|
13,884,655
| | | | | | | | | |
Less: Goodwill
| | | | | | |
(379,627
|
)
| | | |
(379,627
|
)
| | | |
(379,627
|
)
| | | |
(379,627
|
)
| | | |
(379,627
|
)
| | | | | | | | |
Identifiable intangible assets
| | | | | |
|
(12,391
|
)
| | |
|
(13,677
|
)
| | |
|
(14,963
|
)
| | |
|
(16,360
|
)
| | |
|
(17,883
|
)
| | | | | | | | |
Total tangible assets
| | |
(b)
| | |
$
|
13,047,794
|
| | |
$
|
13,131,961
|
| | |
$
|
13,068,849
|
| | |
$
|
13,401,966
|
| | |
$
|
13,487,145
|
| | | | | | | | |
Risk-weighted assets
| | |
(c)
| | |
$
|
10,681,621
|
| | |
$
|
10,633,646
|
| | |
$
|
10,449,352
|
| | |
$
|
10,566,818
|
| | |
$
|
10,498,582
|
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
NET INCOME ADJUSTED FOR INTANGIBLE
AMORTIZATION |
Net income
| | | | | |
$
|
36,253
| | | |
$
|
39,813
| | | |
$
|
36,830
| | | |
$
|
15,768
| | | |
$
|
34,579
| | | |
$
|
112,896
| | | |
$
|
89,862
| |
Plus: Intangible amortization net of tax
| | | | | |
|
965
|
| | |
|
965
|
| | |
|
1,049
|
| | |
|
940
|
| | |
|
950
|
| | |
|
2,979
|
| | |
|
2,870
|
|
Net income adjusted for intangible amortization
| | | | | |
$
|
37,218
|
| | |
$
|
40,778
|
| | |
$
|
37,879
|
| | |
$
|
16,708
|
| | |
$
|
35,529
|
| | |
$
|
115,875
|
| | |
$
|
92,732
|
|
Period end common shares outstanding
| | |
(d)
| | |
|
67,621,369
|
| | |
|
67,621,111
|
| | |
|
67,775,068
|
| | |
|
67,746,094
|
| | |
|
67,742,135
|
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
TANGIBLE COMMON EQUITY MEASUREMENTS |
Return on average tangible equity (1)
| | | | | | |
12.26
|
%
| | | |
13.77
|
%
| | | |
13.05
|
%
| | | |
5.60
|
%
| | | |
11.95
|
%
| | | |
13.02
|
%
| | | |
10.68
|
%
|
Tangible equity/tangible assets
| | |
(a)/(b)
| | | |
9.26
|
%
| | | |
9.07
|
%
| | | |
9.00
|
%
| | | |
8.77
|
%
| | | |
8.79
|
%
| | | | | | | | |
Tangible equity/risk-weighted assets
| | |
(a)/(c)
| | | |
11.31
|
%
| | | |
11.20
|
%
| | | |
11.25
|
%
| | | |
11.13
|
%
| | | |
11.29
|
%
| | | | | | | | |
Tangible book value
| | |
(a)/(d)*1,000
| | |
$
|
17.86
| | | |
$
|
17.61
| | | |
$
|
17.34
| | | |
$
|
17.35
| | | |
$
|
17.49
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
COMMON EQUITY TIER 1 CAPITAL (CET1) |
Total shareholders' equity
| | | | | |
$
|
1,599,604
| | | |
$
|
1,584,072
| | | |
$
|
1,570,137
| | | |
$
|
1,571,701
| | | |
$
|
1,582,535
| | | | | | | | | |
AOCI-related adjustments (3)
| | | | | | |
79,946
| | | | |
73,739
| | | | |
67,886
| | | | |
48,248
| | | | |
27,825
| | | | | | | | | |
CET1 adjustments and deductions:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Goodwill net of associated deferred tax liabilities (DTLs)
| | | | | | |
(365,823
|
)
| | | |
(366,036
|
)
| | | |
(366,248
|
)
| | | |
(366,461
|
)
| | | |
(359,841
|
)
| | | | | | | | |
Other adjustments and deductions for CET1 (2)
| | | | | |
|
(10,868
|
)
| | |
|
(14,204
|
)
| | |
|
(12,233
|
)
| | |
|
(10,248
|
)
| | |
|
(11,359
|
)
| | | | | | | | |
CET1 capital
| | |
(e)
| | | |
1,302,859
| | | | |
1,277,571
| | | | |
1,259,542
| | | | |
1,243,240
| | | | |
1,239,160
| | | | | | | | | |
Additional tier 1 capital instruments plus related surplus
| | | | | | |
60,000
| | | | |
60,000
| | | | |
60,000
| | | | |
60,000
| | | | |
60,000
| | | | | | | | | |
Less: additional tier 1 capital deductions
| | | | | |
|
—
|
| | |
|
—
|
| | |
|
(714
|
)
| | |
|
(2
|
)
| | |
|
(471
|
)
| | | | | | | | |
Additional tier 1 capital
| | | | | |
|
60,000
|
| | |
|
60,000
|
| | |
|
59,286
|
| | |
|
59,998
|
| | |
|
59,529
|
| | | | | | | | |
Tier 1 capital
| | | | | |
$
|
1,362,859
|
| | |
$
|
1,337,571
|
| | |
$
|
1,318,828
|
| | |
$
|
1,303,238
|
| | |
$
|
1,298,689
|
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Common equity tier 1 capital ratio
| | |
(e)/(c)
| | | |
12.20
|
%
| | | |
12.01
|
%
| | | |
12.05
|
%
| | | |
11.77
|
%
| | | |
11.80
|
%
| | | | | | | | |
(1)
|
|
Calculation = ((net income adjusted for intangible
amortization/number of days in period)*number of days in
year)/total average tangible equity
|
(2)
| |
Includes other intangible assets, net of DTLs, disallowed deferred
tax assets (DTAS), threshold deductions and transition
adjustments, as applicable.
|
(3)
| |
The December 31, 2017 amount contains a reclassification
adjustment of $8.5 million from AOCI to retained earnings as
allowed by regulatory agencies in an interagency statement
released January 18, 2018 to address disproportionate tax effect
in AOCI resulting from the recent enactment of the Tax Cuts and
Jobs Act of 2017 and the application of Financial Accounting
Standards Board Accounting Standards Codification Topic 740,
Income Taxes.
|
| |
|
|
TRUSTMARK CORPORATION AND SUBSIDIARIES |
NOTES TO CONSOLIDATED FINANCIALS |
September 30, 2018 |
($ in thousands except per share data) |
(unaudited) |
|
Note 8 – Non-GAAP Financial Measures (continued)
Trustmark discloses certain non-GAAP financial measures, including net
income adjusted for significant non-routine transactions, 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 net
income adjusted for significant non-routine transactions as a measure of
our core operating business, which excludes the impact of the items
detailed below, as these items are generally not operational in nature.
This non-GAAP measure also provides 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 adjustments to net income and select
financial ratios as reported in accordance with GAAP resulting from
significant non-routine items occurring during the periods presented ($
in thousands, except per share data):
|
|
|
|
| |
| | | | | Nine Months Ended |
| | | | | 9/30/2018 |
|
| 9/30/2017 |
| | | | | Amount |
|
| Diluted EPS | | | Amount |
|
| Diluted EPS |
| | | | | | | | | | | | | |
|
Net Income (GAAP)
| | | | |
$
|
112,896
| | | |
$
|
1.668
| | |
$
|
89,862
| | | |
$
|
1.324
| |
| | | | | | | | | | | | | |
|
Significant non-routine transactions (net of taxes):
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
|
Defined benefit plan termination
| | | | | |
—
| | | | |
—
| | | |
10,895
| | | | |
0.161
| |
Reliance merger transaction expenses
| | | | | |
—
| | | | |
—
| | | |
1,999
| | | | |
0.029
| |
Gain on life insurance proceeds
| | | | |
|
—
|
| | |
|
—
| | |
|
(4,894
|
)
| | |
|
(0.072
|
)
|
Net Income adjusted for significant non-routine transactions
(Non-GAAP)
| | | | |
$
|
112,896
|
| | |
$
|
1.668
| | |
$
|
97,862
|
| | |
$
|
1.442
|
|
| | | | | | | | | | | | | |
|
| | | | | Reported | | | Adjusted | | | Reported | | | Adjusted |
| | | | | (GAAP) | | | (Non-GAAP) | | | (GAAP) | | | (Non-GAAP) |
Return on equity
| | | | | |
9.53
|
%
| | | |
n/a
| | | |
7.73
|
%
| | | |
8.42
|
%
|
Return on average tangible equity
| | | | | |
13.02
|
%
| | | |
n/a
| | | |
10.68
|
%
| | | |
11.61
|
%
|
Return on assets
| | | | | |
1.12
|
%
| | | |
n/a
| | | |
0.88
|
%
| | | |
0.96
|
%
|
| | | | | | | | | | | | | |
|
n/a - not applicable |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20181023005973/en/
Contacts:
Trustmark Corporation
Investor Contacts:
Louis E.
Greer, 601-208-2310
Treasurer and Principal Financial Officer
or
F.
Joseph Rein, Jr., 601-208-6898
Senior Vice President
or
Media
Contact:
Melanie A. Morgan, 601-208-2979
Senior Vice
President
Source: Trustmark Corporation
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