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Trustmark Corporation Announces Third Quarter 2020 Financial Results

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Performance reflects value of diversified financial services businesses

Trustmark Corporation (NASDAQ:TRMK) reported net income of $54.4 million in the third quarter of 2020, representing diluted earnings per share of $0.86. This level of earnings resulted in a return on average tangible equity of 16.82% and a return on average assets of 1.37%. Trustmark's Board of Directors declared a quarterly cash dividend of $0.23 per share payable December 15, 2020, to shareholders of record on December 1, 2020.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20201027006161/en/

Printer friendly version of earnings release with consolidated financial statements and notes: https://www.businesswire.com/news/home/52314239/en

Third Quarter Highlights

  • Pre-tax, pre-provision income totaled $62.9 million, a linked-quarter increase of 1.4% and year-over-year increase of 26.0%. Please refer to the Consolidated Financial Information, Footnote 9 – Non-GAAP Financial Measures.
  • Noninterest income represented 41.0% of revenue in the third quarter and increased 6.0% from the prior quarter
  • Maintained strong capital position with CET1 ratio of 11.36% and total risk-based capital ratio of 12.88%

Gerard R. Host, Chairman and CEO, stated, "Our third quarter results demonstrate the value of our diversified financial services businesses with strong performance in both our banking and noninterest lines of business. Loans held for investment increased 6.8% year-over-year, and mortgage loan production was up over 56% year-over-year. We experienced significant year-over-year growth in pre-tax, pre-provision income, and we maintained our solid capital base and liquidity position. Trustmark remains committed to ensuring the safety of customers and associates and supporting local economies in this challenging environment. We continue to focus on serving customers and creating long-term value for shareholders."

Balance Sheet Management

  • Loans held for investment increased $187.9 million from the prior quarter and $624.1 million year-over-year
  • Gross PPP loans totaled $970.0 million at September 30, 2020
  • Noninterest bearing deposits increased $83.5 million linked-quarter and represented 30.0% of total deposits at September 30, 2020

Loans held for investment totaled $9.8 billion at September 30, 2020, reflecting an increase of 1.9% linked-quarter and 6.8% year-over-year. The linked-quarter growth was driven primarily by construction and development loans and commercial real estate loans. At September 30, 2020, Trustmark's gross Paycheck Protection Program (PPP) loans totaled $970.0 million. Net of deferred fees and costs of $25.7 million, PPP loans totaled $944.3 million. Collectively, loans held for investment and PPP loans totaled $10.8 billion at the end of the third quarter of 2020.

Deposits totaled $13.2 billion at September 30, 2020, down $283.1 million, or 2.1%, from the prior quarter. However, deposits are up $2.0 billion, or 17.5%, year-over-year primarily reflecting the impact of additional customer liquidity associated with PPP loans and government stimulus payments. Interest-bearing deposit costs totaled 0.31% for the third quarter, a decrease of 6 basis points linked-quarter. Trustmark continues to maintain an attractive, low-cost deposit base with approximately 62% of deposit balances in checking accounts. The total cost of interest-bearing liabilities was 0.33% for the third quarter of 2020, a decrease of 6 basis points from the prior quarter.

Trustmark's capital position remained solid, reflecting the strength and diversity of its financial services businesses. At September 30, 2020, Trustmark's tangible equity to tangible assets ratio was 8.68%, while the total risk-based capital ratio was 12.88%.

Credit Quality

  • Allowance for credit losses represented 1.24% of loans held for investment and 593.72% of nonperforming loans, excluding individually evaluated loans
  • Net recoveries totaled $1.1 million in the third quarter
  • Other real estate declined 11.1% from the prior quarter and 49.2% year-over-year
  • Approximately 2% of the loans held for investment portfolio remained under a concession at September 30, 2020

Allocation of Trustmark's $122.0 million allowance for credit losses on loans held for investment represented 1.20% of commercial loans and 1.41% of consumer and home mortgage loans, resulting in an allowance for credit losses to total loans held for investment of 1.24% at September 30, 2020, representing a level management considers commensurate with the present risk in the loan portfolio. Trustmark recorded a provision for credit losses of $1.8 million in the third quarter.

Nonperforming loans totaled $53.9 million at September 30, 2020, up $3.9 million from the prior quarter and down $5.2 million year-over-year. Other real estate totaled $16.2 million, reflecting a $2.0 million decrease from the prior quarter and down $15.7 million from the prior year. Collectively, nonperforming assets totaled $70.1 million, reflecting a linked-quarter increase of $1.8 million and a year-over-year decrease of $20.9 million.

Revenue Generation

  • Revenue in the third quarter, excluding interest and fees on PPP loans, totaled $173.2 million, up 2.2% from the prior quarter and 12.1% year-over-year
  • Noninterest income totaled $73.7 million in the third quarter, up 6.0% from the prior quarter and 52.5% year-over-year
  • Mortgage loan production in the third quarter totaled $885.8 million, an increase of 3.8% from the prior quarter and a 56.5% increase year-over-year

Revenue in the third quarter totaled $179.9 million, up 3.1% from the prior quarter and up 14.7% from the same quarter in the prior year. Excluding $6.7 million of interest and fees on PPP loans, revenue totaled $173.2 million in the third quarter, up 2.2% from the prior quarter and up 12.1% year-over-year. The linked-quarter and year-over-year changes primarily reflect higher noninterest income. Net interest income (FTE) in the third quarter totaled $109.2 million, resulting in a net interest margin of 3.03%. Excluding PPP loans, the net interest margin totaled 3.05%, a linked-quarter decline of 9 basis points. Continued low interest rates decreased the yield on the loans held for investment and held for sale portfolio as well as the securities portfolio and were partially offset by lower costs of interest-bearing deposits. Relative to the prior quarter, net interest income (FTE) increased $1.2 million as a $327 thousand reduction in interest income was more than offset by a $1.5 million reduction in interest expense.

Noninterest income in the third quarter totaled $73.7 million, an increase of $4.2 million from the prior quarter and an increase of $25.4 million year-over-year. The linked-quarter change reflects increases in mortgage banking revenue, service charges on deposit accounts and bank card and other fees. Mortgage banking revenue before hedge ineffectiveness totaled $35.6 million in the third quarter, in line with the prior quarter. Third quarter results include $815 thousand in positive net hedge ineffectiveness. Mortgage loan production in the third quarter totaled $885.8 million, up $32.5 million from the prior quarter and $319.6 million from the same period in the prior year. Gain on sale of loans, net totaled $34.5 million in the third quarter, up $394 thousand from the prior quarter. Mortgage banking revenue totaled $36.4 million in the third quarter, up $2.7 million from the prior quarter and $28.3 million from the same period in the prior year.

Insurance revenue totaled $11.6 million in the third quarter, a seasonal decline of 2.6% from the prior quarter and an increase of 4.4% year-over-year due to higher property and casualty commissions. Wealth management revenue in the third quarter totaled $7.7 million, in line with the prior quarter and the same period in the prior year as increases in brokerage and investment services were offset by a decline in trust management fees.

Bank card and other fees increased $1.1 million, or 14.6%, from the prior quarter, reflecting higher customer derivative revenue and interchange income. Service charges on deposit accounts increased $1.2 million, or 18.4%, from the prior quarter as customers gradually returned to more normal pre-pandemic activities.

Noninterest Expense

  • Total expenses were $114.0 million in the third quarter, down $4.7 million, or 4.0%, from the prior quarter
  • Adjusted expenses, which excludes amortization of intangibles, ORE expense and credit losses for off-balance sheet credit exposures, increased $3.6 million, or 3.2%, from the prior quarter. Please refer to the Consolidated Financial Information, Footnote 9 – Non-GAAP Financial Measures.

Adjusted noninterest expenses totaled $114.6 million for the third quarter, representing an increase of 3.2% from the prior quarter. Salaries and employee benefits increased $1.2 million due to increases in salaries, commissions, and performance-based incentives. Services and fees increased due to continued investment in technology. Net occupancy-premises experienced a normal seasonal increase. Other adjusted noninterest expenses rose $1.5 million principally due to loan expense related to loan volumes and a non-cash charge for the realignment of branch offices.

In the third quarter, the credit loss expense related to off-balance sheet exposures was a negative $3.0 million, a decline of $9.2 million from the prior quarter. The decline primarily reflects improvement of the macroeconomic factors used to determine the necessary reserves for off-balance sheet exposures. Other real estate expense, net increased $932 thousand primarily due to write-downs. Total expenses for the third quarter declined $4.7 million, or 4.0%, from the prior quarter, as the decline in credit loss expense was partially offset by an increase in adjusted noninterest expense.

Trustmark continues to focus on identifying efficiency opportunities in operations and delivery channels as well as utilizing technology solutions to streamline processes and improve the customer experience. Year-to-date, Trustmark has consolidated six offices across the franchise. In addition, Trustmark is in the process of converting select drive-thru only branches to interactive teller machines which will provide extended hours for additional customer convenience while reducing servicing costs. Trustmark remains committed to investments to promote profitable revenue growth and reallocating resources to reflect changing customer preferences.

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, October 28, 2020 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 11, 2020, in archived format at the same web address or by calling (877) 344-7529, passcode 10148374.

Trustmark is a financial services company providing banking and financial solutions through 187 offices in Alabama, Florida, Mississippi, Tennessee and Texas.

Forward-Looking Statements

Certain statements contained in this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by words such as "may," "hope," "will," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "project," "potential," "seek," "continue," "could," "would," "future" or the negative of those terms or other words of similar meaning. You should read statements that contain these words carefully because they discuss our future expectations or state other "forward-looking" information. These forward-looking statements include, but are not limited to, statements relating to anticipated future operating and financial performance measures, including net interest margin, credit quality, business initiatives, growth opportunities and growth rates, among other things, and encompass any estimate, prediction, expectation, projection, opinion, anticipation, outlook or statement of belief included therein as well as the management assumptions underlying these forward-looking statements. You should be aware that the occurrence of the events described under the caption "Risk Factors" in Trustmark's filings with the Securities and Exchange Commission (SEC) could have an adverse effect on our business, results of operations and financial condition. Should one or more of these risks materialize, or should any such underlying assumptions prove to be significantly different, actual results may vary significantly from those anticipated, estimated, projected or expected. Furthermore, many of these risks and uncertainties are currently amplified by and may continue to be amplified by or may, in the future, be amplified by, the novel coronavirus (COVID-19) pandemic, and also by the effectiveness of varying governmental responses in ameliorating the impact of the pandemic on our customers and the economies where they operate.

Risks that could cause actual results to differ materially from current expectations of Management include, but are not limited to, changes in the level of nonperforming assets and charge-offs, an increase in unemployment levels and slowdowns in economic growth, the effects of the COVID-19 pandemic on the domestic and global economy, as well as the effectiveness of actions of federal, state and local governments and agencies (including the Board of Governors of the Federal Reserve Board (FRB)) to mitigate its spread and economic impact, local, state and national economic and market conditions, conditions in the housing and real estate markets in the regions in which Trustmark operates and the extent and duration of the current volatility in the credit and financial markets, levels of and volatility in crude oil prices, changes in our ability to measure the fair value of assets in our portfolio, material changes in the level and/or volatility of market interest rates, the performance and demand for the products and services we offer, including the level and timing of withdrawals from our deposit accounts, the costs and effects of litigation and of unexpected or adverse outcomes in such litigation, our ability to attract noninterest-bearing deposits and other low-cost funds, competition in loan and deposit pricing, as well as the entry of new competitors into our markets through de novo expansion and acquisitions, economic conditions, including the potential impact of issues related to the European financial system and monetary and other governmental actions designed to address credit, securities, and/or commodity markets, the enactment of legislation and changes in existing regulations or enforcement practices or the adoption of new regulations, changes in accounting standards and practices, including changes in the interpretation of existing standards, that affect our consolidated financial statements, changes in consumer spending, borrowings and savings habits, technological changes, changes in the financial performance or condition of our borrowers, particularly with respect to the COVID-19 pandemic, changes in our ability to control expenses, greater than expected costs or difficulties related to the integration of acquisitions or new products and lines of business, cyber-attacks and other breaches which could affect our information system security, natural disasters, environmental disasters, pandemics or other health crises, acts of war or terrorism, and other risks described in our filings with the SEC.

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

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2020
($ in thousands)
(unaudited)
Linked Quarter Year over Year
QUARTERLY AVERAGE BALANCES 9/30/2020 6/30/2020 9/30/2019 $ Change % Change $ Change % Change
Securities AFS-taxable

$

1,857,050

 

$

1,724,320

 

$

1,570,803

 

$

132,730

 

7.7

%

$

286,247

 

18.2

%

Securities AFS-nontaxable

 

5,973

 

 

9,827

 

 

25,096

 

 

(3,854

)

-39.2

%

 

(19,123

)

-76.2

%

Securities HTM-taxable

 

608,585

 

 

655,085

 

 

778,098

 

 

(46,500

)

-7.1

%

 

(169,513

)

-21.8

%

Securities HTM-nontaxable

 

25,508

 

 

25,538

 

 

26,088

 

 

(30

)

-0.1

%

 

(580

)

-2.2

%

Total securities

 

2,497,116

 

 

2,414,770

 

 

2,400,085

 

 

82,346

 

3.4

%

 

97,031

 

4.0

%

Paycheck protection program loans (PPP)

 

941,456

 

 

764,416

 

 

 

 

177,040

 

23.2

%

 

941,456

 

n/m

 

Loans (includes loans held for sale) (1)

 

10,162,379

 

 

9,908,132

 

 

9,436,287

 

 

254,247

 

2.6

%

 

726,092

 

7.7

%

Acquired loans (1)

 

 

 

 

 

82,641

 

 

 

n/m

 

 

(82,641

)

-100.0

%

Fed funds sold and reverse repurchases

 

301

 

 

113

 

 

3,662

 

 

188

 

n/m

 

 

(3,361

)

-91.8

%

Other earning assets

 

722,917

 

 

854,642

 

 

176,163

 

 

(131,725

)

-15.4

%

 

546,754

 

n/m

 

Total earning assets

 

14,324,169

 

 

13,942,073

 

 

12,098,838

 

 

382,096

 

2.7

%

 

2,225,331

 

18.4

%

Allowance for credit losses (ACL), loans held for investment (LHFI) (1)

 

(121,842

)

 

(103,006

)

 

(83,756

)

 

(18,836

)

-18.3

%

 

(38,086

)

-45.5

%

Other assets

 

1,564,825

 

 

1,685,317

 

 

1,447,977

 

 

(120,492

)

-7.1

%

 

116,848

 

8.1

%

Total assets

$

15,767,152

 

$

15,524,384

 

$

13,463,059

 

$

242,768

 

1.6

%

$

2,304,093

 

17.1

%

 
Interest-bearing demand deposits

$

3,669,249

 

$

3,832,372

 

$

3,085,758

 

$

(163,123

)

-4.3

%

$

583,491

 

18.9

%

Savings deposits

 

4,416,046

 

 

4,180,540

 

 

3,568,403

 

 

235,506

 

5.6

%

 

847,643

 

23.8

%

Time deposits

 

1,507,348

 

 

1,578,737

 

 

1,753,083

 

 

(71,389

)

-4.5

%

 

(245,735

)

-14.0

%

Total interest-bearing deposits

 

9,592,643

 

 

9,591,649

 

 

8,407,244

 

 

994

 

0.0

%

 

1,185,399

 

14.1

%

Fed funds purchased and repurchases

 

84,077

 

 

105,696

 

 

142,064

 

 

(21,619

)

-20.5

%

 

(57,987

)

-40.8

%

Other borrowings

 

167,262

 

 

107,533

 

 

78,404

 

 

59,729

 

55.5

%

 

88,858

 

n/m

 

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

 

0.0

%

 

 

0.0

%

Total interest-bearing liabilities

 

9,905,838

 

 

9,866,734

 

 

8,689,568

 

 

39,104

 

0.4

%

 

1,216,270

 

14.0

%

Noninterest-bearing deposits

 

3,921,867

 

 

3,645,761

 

 

2,932,754

 

 

276,106

 

7.6

%

 

989,113

 

33.7

%

Other liabilities

 

244,544

 

 

346,173

 

 

206,091

 

 

(101,629

)

-29.4

%

 

38,453

 

18.7

%

Total liabilities

 

14,072,249

 

 

13,858,668

 

 

11,828,413

 

 

213,581

 

1.5

%

 

2,243,836

 

19.0

%

Shareholders' equity

 

1,694,903

 

 

1,665,716

 

 

1,634,646

 

 

29,187

 

1.8

%

 

60,257

 

3.7

%

Total liabilities and equity

$

15,767,152

 

$

15,524,384

 

$

13,463,059

 

$

242,768

 

1.6

%

$

2,304,093

 

17.1

%

(1)

See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.
 
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, 2020
($ in thousands)
(unaudited)
Linked Quarter Year over Year
PERIOD END BALANCES 9/30/2020 6/30/2020 9/30/2019 $ Change % Change $ Change % Change
Cash and due from banks

$

564,588

 

$

1,026,640

 

$

486,263

 

$

(462,052

)

-45.0

%

$

78,325

 

16.1

%

Fed funds sold and reverse repurchases

 

50

 

 

 

 

 

 

50

 

n/m

 

 

50

 

n/m

 

Securities available for sale

 

1,922,728

 

 

1,884,153

 

 

1,553,705

 

 

38,575

 

2.0

%

 

369,023

 

23.8

%

Securities held to maturity

 

611,280

 

 

660,048

 

 

785,422

 

 

(48,768

)

-7.4

%

 

(174,142

)

-22.2

%

PPP loans

 

944,270

 

 

939,783

 

 

 

 

4,487

 

0.5

%

 

944,270

 

n/m

 

Loans held for sale (LHFS)

 

485,103

 

 

355,089

 

 

292,800

 

 

130,014

 

36.6

%

 

192,303

 

65.7

%

Loans held for investment (LHFI) (1)

 

9,847,728

 

 

9,659,806

 

 

9,223,668

 

 

187,922

 

1.9

%

 

624,060

 

6.8

%

ACL LHFI (1)

 

(122,010

)

 

(119,188

)

 

(83,226

)

 

(2,822

)

-2.4

%

 

(38,784

)

-46.6

%

Net LHFI

 

9,725,718

 

 

9,540,618

 

 

9,140,442

 

 

185,100

 

1.9

%

 

585,276

 

6.4

%

Acquired loans (1)

 

 

 

 

 

81,004

 

 

 

n/m

 

 

(81,004

)

-100.0

%

Allowance for loan losses, acquired loans (1)

 

 

 

 

 

(1,249

)

 

 

n/m

 

 

1,249

 

-100.0

%

Net acquired loans

 

 

 

 

 

79,755

 

 

 

n/m

 

 

(79,755

)

-100.0

%

Net LHFI and acquired loans

 

9,725,718

 

 

9,540,618

 

 

9,220,197

 

 

185,100

 

1.9

%

 

505,521

 

5.5

%

Premises and equipment, net

 

192,722

 

 

190,567

 

 

188,423

 

 

2,155

 

1.1

%

 

4,299

 

2.3

%

Mortgage servicing rights

 

61,613

 

 

57,811

 

 

73,016

 

 

3,802

 

6.6

%

 

(11,403

)

-15.6

%

Goodwill

 

385,270

 

 

385,270

 

 

379,627

 

 

 

0.0

%

 

5,643

 

1.5

%

Identifiable intangible assets

 

8,142

 

 

8,895

 

 

8,345

 

 

(753

)

-8.5

%

 

(203

)

-2.4

%

Other real estate

 

16,248

 

 

18,276

 

 

31,974

 

 

(2,028

)

-11.1

%

 

(15,726

)

-49.2

%

Operating lease right-of-use assets

 

30,508

 

 

29,819

 

 

33,180

 

 

689

 

2.3

%

 

(2,672

)

-8.1

%

Other assets

 

609,922

 

 

595,110

 

 

531,834

 

 

14,812

 

2.5

%

 

78,088

 

14.7

%

Total assets

$

15,558,162

 

$

15,692,079

 

$

13,584,786

 

$

(133,917

)

-0.9

%

$

1,973,376

 

14.5

%

 
Deposits:
Noninterest-bearing

$

3,964,023

 

$

3,880,540

 

$

3,064,127

 

$

83,483

 

2.2

%

$

899,896

 

29.4

%

Interest-bearing

 

9,258,390

 

 

9,624,933

 

 

8,190,056

 

 

(366,543

)

-3.8

%

 

1,068,334

 

13.0

%

Total deposits

 

13,222,413

 

 

13,505,473

 

 

11,254,183

 

 

(283,060

)

-2.1

%

 

1,968,230

 

17.5

%

Fed funds purchased and repurchases

 

153,834

 

 

70,255

 

 

376,712

 

 

83,579

 

n/m

 

 

(222,878

)

-59.2

%

Other borrowings

 

178,599

 

 

152,860

 

 

76,685

 

 

25,739

 

16.8

%

 

101,914

 

n/m

 

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

 

0.0

%

 

 

0.0

%

ACL on off-balance sheet credit exposures (1)

 

39,659

 

 

42,663

 

 

 

 

(3,004

)

-7.0

%

 

39,659

 

n/m

 

Operating lease liabilities

 

31,838

 

 

31,076

 

 

34,319

 

 

762

 

2.5

%

 

(2,481

)

-7.2

%

Other liabilities

 

159,922

 

 

153,952

 

 

135,669

 

 

5,970

 

3.9

%

 

24,253

 

17.9

%

Total liabilities

 

13,848,121

 

 

14,018,135

 

 

11,939,424

 

 

(170,014

)

-1.2

%

 

1,908,697

 

16.0

%

Common stock

 

13,215

 

 

13,214

 

 

13,390

 

 

1

 

0.0

%

 

(175

)

-1.3

%

Capital surplus

 

231,836

 

 

230,613

 

 

257,370

 

 

1,223

 

0.5

%

 

(25,534

)

-9.9

%

Retained earnings

 

1,459,306

 

 

1,419,552

 

 

1,395,460

 

 

39,754

 

2.8

%

 

63,846

 

4.6

%

Accum other comprehensive income (loss), net of tax

 

5,684

 

 

10,565

 

 

(20,858

)

 

(4,881

)

-46.2

%

 

26,542

 

n/m

 

Total shareholders' equity

 

1,710,041

 

 

1,673,944

 

 

1,645,362

 

 

36,097

 

2.2

%

 

64,679

 

3.9

%

Total liabilities and equity

$

15,558,162

 

$

15,692,079

 

$

13,584,786

 

$

(133,917

)

-0.9

%

$

1,973,376

 

14.5

%

(1)

See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.
 
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, 2020
($ in thousands except per share data)
(unaudited)
Quarter Ended Linked Quarter Year over Year
INCOME STATEMENTS 9/30/2020 6/30/2020 9/30/2019 $ Change % Change $ Change % Change
Interest and fees on LHFS & LHFI-FTE

$

97,429

 

$

99,300

$

116,432

 

$

(1,871

)

-1.9

%

$

(19,003

)

-16.3

%

Interest and fees on PPP loans

 

6,729

 

 

5,044

 

 

 

1,685

 

33.4

%

 

6,729

 

n/m

 

Interest and fees on acquired loans (1)

 

 

 

 

2,309

 

 

 

n/m

 

 

(2,309

)

-100.0

%

Interest on securities-taxable

 

12,542

 

 

12,762

 

13,184

 

 

(220

)

-1.7

%

 

(642

)

-4.9

%

Interest on securities-tax exempt-FTE

 

301

 

 

315

 

485

 

 

(14

)

-4.4

%

 

(184

)

-37.9

%

Interest on fed funds sold and reverse repurchases

 

1

 

 

 

23

 

 

1

 

n/m

 

 

(22

)

-95.7

%

Other interest income

 

331

 

 

239

 

1,044

 

 

92

 

38.5

%

 

(713

)

-68.3

%

Total interest income-FTE

 

117,333

 

 

117,660

 

133,477

 

 

(327

)

-0.3

%

 

(16,144

)

-12.1

%

Interest on deposits

 

7,437

 

 

8,730

 

20,385

 

 

(1,293

)

-14.8

%

 

(12,948

)

-63.5

%

Interest on fed funds purchased and repurchases

 

32

 

 

42

 

547

 

 

(10

)

-23.8

%

 

(515

)

-94.1

%

Other interest expense

 

688

 

 

881

 

830

 

 

(193

)

-21.9

%

 

(142

)

-17.1

%

Total interest expense

 

8,157

 

 

9,653

 

21,762

 

 

(1,496

)

-15.5

%

 

(13,605

)

-62.5

%

Net interest income-FTE

 

109,176

 

 

108,007

 

111,715

 

 

1,169

 

1.1

%

 

(2,539

)

-2.3

%

Provision for credit losses, LHFI (1)

 

1,760

 

 

18,185

 

3,039

 

 

(16,425

)

-90.3

%

 

(1,279

)

-42.1

%

Provision for loan losses, acquired loans (1)

 

 

 

 

(140

)

 

 

n/m

 

 

140

 

100.0

%

Net interest income after provision-FTE

 

107,416

 

 

89,822

 

108,816

 

 

17,594

 

19.6

%

 

(1,400

)

-1.3

%

Service charges on deposit accounts

 

7,577

 

 

6,397

 

11,065

 

 

1,180

 

18.4

%

 

(3,488

)

-31.5

%

Bank card and other fees

 

8,843

 

 

7,717

 

8,349

 

 

1,126

 

14.6

%

 

494

 

5.9

%

Mortgage banking, net

 

36,439

 

 

33,745

 

8,171

 

 

2,694

 

8.0

%

 

28,268

 

n/m

 

Insurance commissions

 

11,562

 

 

11,868

 

11,072

 

 

(306

)

-2.6

%

 

490

 

4.4

%

Wealth management

 

7,679

 

 

7,571

 

7,691

 

 

108

 

1.4

%

 

(12

)

-0.2

%

Other, net

 

1,601

 

 

2,213

 

1,989

 

 

(612

)

-27.7

%

 

(388

)

-19.5

%

Total noninterest income

 

73,701

 

 

69,511

 

48,337

 

 

4,190

 

6.0

%

 

25,364

 

52.5

%

Salaries and employee benefits

 

67,342

 

 

66,107

 

62,495

 

 

1,235

 

1.9

%

 

4,847

 

7.8

%

Services and fees

 

20,992

 

 

20,567

 

18,838

 

 

425

 

2.1

%

 

2,154

 

11.4

%

Net occupancy-premises

 

7,000

 

 

6,587

 

6,831

 

 

413

 

6.3

%

 

169

 

2.5

%

Equipment expense

 

5,828

 

 

5,620

 

5,971

 

 

208

 

3.7

%

 

(143

)

-2.4

%

Other real estate expense, net

 

1,203

 

 

271

 

531

 

 

932

 

n/m

 

 

672

 

n/m

 

Credit loss expense related to off-balance sheet credit exposures (1)

 

(3,004

)

 

6,242

 

 

 

(9,246

)

n/m

 

 

(3,004

)

n/m

 

Other expense

 

14,598

 

 

13,265

 

12,187

 

 

1,333

 

10.0

%

 

2,411

 

19.8

%

Total noninterest expense

 

113,959

 

 

118,659

 

106,853

 

 

(4,700

)

-4.0

%

 

7,106

 

6.7

%

Income before income taxes and tax eq adj

 

67,158

 

 

40,674

 

50,300

 

 

26,484

 

65.1

%

 

16,858

 

33.5

%

Tax equivalent adjustment

 

2,969

 

 

3,007

 

3,249

 

 

(38

)

-1.3

%

 

(280

)

-8.6

%

Income before income taxes

 

64,189

 

 

37,667

 

47,051

 

 

26,522

 

70.4

%

 

17,138

 

36.4

%

Income taxes

 

9,749

 

 

5,517

 

6,016

 

 

4,232

 

76.7

%

 

3,733

 

62.1

%

Net income

$

54,440

 

$

32,150

$

41,035

 

$

22,290

 

69.3

%

$

13,405

 

32.7

%

 
Per share data
Earnings per share - basic

$

0.86

 

$

0.51

$

0.64

 

$

0.35

 

68.6

%

$

0.22

 

34.4

%

 
Earnings per share - diluted

$

0.86

 

$

0.51

$

0.64

 

$

0.35

 

68.6

%

$

0.22

 

34.4

%

 
Dividends per share

$

0.23

 

$

0.23

$

0.23

 

 

 

0.0

%

 

 

0.0

%

 
Weighted average shares outstanding
Basic

 

63,422,692

 

 

63,416,307

 

64,358,540

 

 
Diluted

 

63,581,964

 

 

63,555,065

 

64,514,605

 

 
Period end shares outstanding

 

63,423,820

 

 

63,422,439

 

64,262,779

 

(1)

See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.
 
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, 2020
($ in thousands)
(unaudited)
Quarter Ended Linked Quarter Year over Year
NONPERFORMING ASSETS (1) 9/30/2020 6/30/2020 9/30/2019 $ Change % Change $ Change % Change
Nonaccrual LHFI
Alabama

$

3,860

 

$

4,392

 

$

2,936

 

$

(532

)

-12.1

%

$

924

 

31.5

%

Florida

 

617

 

 

687

 

 

311

 

 

(70

)

-10.2

%

 

306

 

98.4

%

Mississippi (2)

 

35,617

 

 

37,884

 

 

43,895

 

 

(2,267

)

-6.0

%

 

(8,278

)

-18.9

%

Tennessee (3)

 

13,041

 

 

6,125

 

 

10,193

 

 

6,916

 

n/m

 

 

2,848

 

27.9

%

Texas

 

721

 

 

906

 

 

1,695

 

 

(185

)

-20.4

%

 

(974

)

-57.5

%

Total nonaccrual LHFI

 

53,856

 

 

49,994

 

 

59,030

 

 

3,862

 

7.7

%

 

(5,174

)

-8.8

%

Other real estate
Alabama

 

3,725

 

 

4,766

 

 

6,501

 

 

(1,041

)

-21.8

%

 

(2,776

)

-42.7

%

Florida

 

3,665

 

 

3,665

 

 

6,983

 

 

 

0.0

%

 

(3,318

)

-47.5

%

Mississippi (2)

 

8,718

 

 

9,408

 

 

17,646

 

 

(690

)

-7.3

%

 

(8,928

)

-50.6

%

Tennessee (3)

 

140

 

 

437

 

 

844

 

 

(297

)

-68.0

%

 

(704

)

-83.4

%

Texas

 

 

 

 

 

 

 

 

n/m

 

 

 

n/m

 

Total other real estate

 

16,248

 

 

18,276

 

 

31,974

 

 

(2,028

)

-11.1

%

 

(15,726

)

-49.2

%

Total nonperforming assets

$

70,104

 

$

68,270

 

$

91,004

 

$

1,834

 

2.7

%

$

(20,900

)

-23.0

%

 
LOANS PAST DUE OVER 90 DAYS (1)
LHFI

$

782

 

$

807

 

$

878

 

$

(25

)

-3.1

%

$

(96

)

-10.9

%

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

$

121,281

 

$

56,269

 

$

36,445

 

$

65,012

 

n/m

 

$

84,836

 

n/m

 

 
Quarter Ended Linked Quarter Year over Year
ACL LHFI (1)(4) 9/30/2020 6/30/2020 9/30/2019 $ Change % Change $ Change % Change
Beginning Balance

$

119,188

 

$

100,564

 

$

80,399

 

$

18,624

 

18.5

%

$

38,789

 

48.2

%

CECL adoption adjustments:
LHFI

 

 

 

 

 

 

 

 

n/m

 

 

 

n/m

 

Acquired loan transfers

 

 

 

 

 

 

 

 

n/m

 

 

 

n/m

 

Provision for credit losses

 

1,760

 

 

18,185

 

 

3,039

 

 

(16,425

)

-90.3

%

 

(1,279

)

-42.1

%

Charge-offs

 

(1,263

)

 

(1,870

)

 

(2,892

)

 

607

 

32.5

%

 

1,629

 

56.3

%

Recoveries

 

2,325

 

 

2,309

 

 

2,680

 

 

16

 

0.7

%

 

(355

)

-13.2

%

Net (charge-offs) recoveries

 

1,062

 

 

439

 

 

(212

)

 

623

 

n/m

 

 

1,274

 

n/m

 

Ending Balance

$

122,010

 

$

119,188

 

$

83,226

 

$

2,822

 

2.4

%

$

38,784

 

46.6

%

 
NET (CHARGE-OFFS) RECOVERIES (1)
Alabama

$

117

 

$

526

 

$

(329

)

$

(409

)

-77.8

%

$

446

 

n/m

 

Florida

 

387

 

 

(127

)

 

136

 

 

514

 

n/m

 

 

251

 

n/m

 

Mississippi (2)

 

442

 

 

(86

)

 

391

 

 

528

 

n/m

 

 

51

 

13.0

%

Tennessee (3)

 

42

 

 

66

 

 

(483

)

 

(24

)

-36.4

%

 

525

 

n/m

 

Texas

 

74

 

 

60

 

 

73

 

 

14

 

23.3

%

 

1

 

1.4

%

Total net (charge-offs) recoveries

$

1,062

 

$

439

 

$

(212

)

$

623

 

n/m

 

$

1,274

 

n/m

 

(1)

Excludes PPP and acquired loans.

(2)

Mississippi includes Central and Southern Mississippi Regions.

(3)

Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.

(4)

See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.
 
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, 2020
($ in thousands)
(unaudited)
Quarter Ended Nine Months Ended
AVERAGE BALANCES 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019 9/30/2020 9/30/2019
Securities AFS-taxable

$

1,857,050

 

$

1,724,320

 

$

1,620,422

 

$

1,551,358

 

$

1,570,803

 

$

1,734,380

 

$

1,661,177

 

Securities AFS-nontaxable

 

5,973

 

 

9,827

 

 

22,056

 

 

23,300

 

 

25,096

 

 

12,594

 

 

32,188

 

Securities HTM-taxable

 

608,585

 

 

655,085

 

 

694,740

 

 

734,474

 

 

778,098

 

 

652,642

 

 

821,716

 

Securities HTM-nontaxable

 

25,508

 

 

25,538

 

 

25,673

 

 

25,703

 

 

26,088

 

 

25,573

 

 

27,268

 

Total securities

 

2,497,116

 

 

2,414,770

 

 

2,362,891

 

 

2,334,835

 

 

2,400,085

 

 

2,425,189

 

 

2,542,349

 

PPP loans

 

941,456

 

 

764,416

 

 

 

 

 

 

 

 

569,985

 

 

 

Loans (includes loans held for sale) (1)

 

10,162,379

 

 

9,908,132

 

 

9,678,174

 

 

9,467,437

 

 

9,436,287

 

 

9,917,127

 

 

9,246,298

 

Acquired loans (1)

 

 

 

 

 

 

 

77,797

 

 

82,641

 

 

 

 

92,645

 

Fed funds sold and reverse repurchases

 

301

 

 

113

 

 

164

 

 

184

 

 

3,662

 

 

193

 

 

12,678

 

Other earning assets

 

722,917

 

 

854,642

 

 

187,327

 

 

227,116

 

 

176,163

 

 

588,787

 

 

245,173

 

Total earning assets

 

14,324,169

 

 

13,942,073

 

 

12,228,556

 

 

12,107,369

 

 

12,098,838

 

 

13,501,281

 

 

12,139,143

 

ACL LHFI (1)

 

(121,842

)

 

(103,006

)

 

(85,015

)

 

(86,211

)

 

(83,756

)

 

(103,355

)

 

(82,665

)

Other assets

 

1,564,825

 

 

1,685,317

 

 

1,498,725

 

 

1,445,075

 

 

1,447,977

 

 

1,582,888

 

 

1,454,350

 

Total assets

$

15,767,152

 

$

15,524,384

 

$

13,642,266

 

$

13,466,233

 

$

13,463,059

 

$

14,980,814

 

$

13,510,828

 

 
Interest-bearing demand deposits

$

3,669,249

 

$

3,832,372

 

$

3,184,134

 

$

3,167,256

 

$

3,085,758

 

$

3,562,310

 

$

3,012,049

 

Savings deposits

 

4,416,046

 

 

4,180,540

 

 

3,646,936

 

 

3,448,899

 

 

3,568,403

 

 

4,082,396

 

 

3,718,008

 

Time deposits

 

1,507,348

 

 

1,578,737

 

 

1,617,307

 

 

1,663,741

 

 

1,753,083

 

 

1,567,577

 

 

1,824,431

 

Total interest-bearing deposits

 

9,592,643

 

 

9,591,649

 

 

8,448,377

 

 

8,279,896

 

 

8,407,244

 

 

9,212,283

 

 

8,554,488

 

Fed funds purchased and repurchases

 

84,077

 

 

105,696

 

 

247,513

 

 

164,754

 

 

142,064

 

 

145,537

 

 

92,771

 

Other borrowings

 

167,262

 

 

107,533

 

 

85,279

 

 

79,512

 

 

78,404

 

 

120,197

 

 

83,475

 

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

Total interest-bearing liabilities

 

9,905,838

 

 

9,866,734

 

 

8,843,025

 

 

8,586,018

 

 

8,689,568

 

 

9,539,873

 

 

8,792,590

 

Noninterest-bearing deposits

 

3,921,867

 

 

3,645,761

 

 

2,910,951

 

 

3,017,824

 

 

2,932,754

 

 

3,494,425

 

 

2,885,478

 

Other liabilities

 

244,544

 

 

346,173

 

 

248,220

 

 

205,786

 

 

206,091

 

 

279,517

 

 

222,404

 

Total liabilities

 

14,072,249

 

 

13,858,668

 

 

12,002,196

 

 

11,809,628

 

 

11,828,413

 

 

13,313,815

 

 

11,900,472

 

Shareholders' equity

 

1,694,903

 

 

1,665,716

 

 

1,640,070

 

 

1,656,605

 

 

1,634,646

 

 

1,666,999

 

 

1,610,356

 

Total liabilities and equity

$

15,767,152

 

$

15,524,384

 

$

13,642,266

 

$

13,466,233

 

$

13,463,059

 

$

14,980,814

 

$

13,510,828

 

(1)

See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.
 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2020
($ in thousands)
(unaudited)
 
PERIOD END BALANCES 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019
Cash and due from banks

$

564,588

 

$

1,026,640

 

$

404,341

 

$

358,916

 

$

486,263

 

Fed funds sold and reverse repurchases

 

50

 

 

 

 

2,000

 

 

 

 

 

Securities available for sale

 

1,922,728

 

 

1,884,153

 

 

1,833,779

 

 

1,602,404

 

 

1,553,705

 

Securities held to maturity

 

611,280

 

 

660,048

 

 

704,276

 

 

738,099

 

 

785,422

 

PPP loans

 

944,270

 

 

939,783

 

 

 

 

 

 

 

Loans held for sale (LHFS)

 

485,103

 

 

355,089

 

 

325,389

 

 

226,347

 

 

292,800

 

Loans held for investment (LHFI) (1)

 

9,847,728

 

 

9,659,806

 

 

9,567,920

 

 

9,335,628

 

 

9,223,668

 

ACL LHFI (1)

 

(122,010

)

 

(119,188

)

 

(100,564

)

 

(84,277

)

 

(83,226

)

Net LHFI

 

9,725,718

 

 

9,540,618

 

 

9,467,356

 

 

9,251,351

 

 

9,140,442

 

Acquired loans (1)

 

 

 

 

 

 

 

72,601

 

 

81,004

 

Allowance for loan losses, acquired loans (1)

 

 

 

 

 

 

 

(815

)

 

(1,249

)

Net acquired loans

 

 

 

 

 

 

 

71,786

 

 

79,755

 

Net LHFI and acquired loans

 

9,725,718

 

 

9,540,618

 

 

9,467,356

 

 

9,323,137

 

 

9,220,197

 

Premises and equipment, net

 

192,722

 

 

190,567

 

 

190,179

 

 

189,791

 

 

188,423

 

Mortgage servicing rights

 

61,613

 

 

57,811

 

 

56,437

 

 

79,394

 

 

73,016

 

Goodwill

 

385,270

 

 

385,270

 

 

381,717

 

 

379,627

 

 

379,627

 

Identifiable intangible assets

 

8,142

 

 

8,895

 

 

7,537

 

 

7,343

 

 

8,345

 

Other real estate

 

16,248

 

 

18,276

 

 

24,847

 

 

29,248

 

 

31,974

 

Operating lease right-of-use assets

 

30,508

 

 

29,819

 

 

30,839

 

 

31,182

 

 

33,180

 

Other assets

 

609,922

 

 

595,110

 

 

591,132

 

 

532,389

 

 

531,834

 

Total assets

$

15,558,162

 

$

15,692,079

 

$

14,019,829

 

$

13,497,877

 

$

13,584,786

 

 
Deposits:
Noninterest-bearing

$

3,964,023

 

$

3,880,540

 

$

2,977,058

 

$

2,891,215

 

$

3,064,127

 

Interest-bearing

 

9,258,390