8-K
TRUSTMARK CORP (TRMK)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
April 25, 2023
Date of Report (Date of earliest event reported)
TRUSTMARK CORPORATION
(Exact name of registrant as specified in its charter)
| Mississippi | 000-03683 | 64-0471500 |
|---|---|---|
| (State or other jurisdiction<br><br>of incorporation) | (Commission<br><br>File Number) | (IRS Employer<br><br>Identification No.) |
| 248 East Capitol Street, Jackson, Mississippi | 39201 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) | |
| Registrant’s telephone number, including area code: | (601) 208-5111 |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered Pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, no par value | TRMK | Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On April 25, 2023, Trustmark Corporation issued a press release announcing its financial results for the period ended March 31, 2023. A copy of this press release and the accompanying financial statements and slide presentation are attached hereto as Exhibits 99.1 and 99.2 to this report and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number | Description of Exhibits |
|---|---|
| 99.1 | Press release announcing financial results for the period ended March 31, 2023 |
| 99.2 | Investor slide presentation for the period ended March 31, 2023 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
TRUSTMARK CORPORATION
| BY: | /s/ Thomas C. Owens |
|---|---|
| Thomas C. Owens | |
| Treasurer and Principal Financial Officer | |
| DATE: | April 25, 2023 |
EX-99
Exhibit 99.1
| News Release |
|---|
Trustmark Corporation Announces First Quarter 2023 Financial Results
Loan and Deposit Growth Continues, Credit Quality Remains Strong,
Mortgage Banking, Insurance and Wealth Management Revenue Expands
JACKSON, Miss. – April 25, 2023 – Trustmark Corporation (NASDAQGS:TRMK) reported net income of $50.3 million in the first quarter of 2023, representing diluted earnings per share of $0.82. Trustmark’s performance during the first quarter produced a return on average tangible equity of 18.03% and a return on average assets of 1.10%. The Board of Directors declared a quarterly cash dividend of $0.23 per share payable June 15, 2023, to shareholders of record on June 1, 2023.
First Quarter Highlights
• Loan and deposit growth continued during the first quarter
• Credit quality remained strong
• Noninterest income increased linked-quarter, reflecting the strength of diversified business lines
• Expense discipline continued, noninterest expense decreased linked-quarter
Duane A. Dewey, President and CEO, stated, “Our first quarter financial performance reflects solid loan and deposit growth, strong performance in our mortgage, insurance and wealth management businesses, and diligent expense management. Our overall strong performance was impacted by increasingly competitive deposit costs during the quarter, which compressed our net interest margin. Trustmark has a strong, diversified and proven business model that has stood the test of time. We remain well-positioned and committed to meeting our customers’ needs despite the challenging financial services environment. Our balance sheet is well-positioned for additional increases in interest rates and credit quality remains solid. We continue to focus on efficiency enhancements throughout the organization as well as investments in technology to better serve customers.”
Balance Sheet Management
• Loans held for investment (HFI) increased $293.2 million, or 2.4%, during the quarter
• Total deposits increased $346.0 million, or 2.4%, during the quarter
• Maintained strong capital position with CET1 ratio of 9.76% and total risk-based capital ratio of 11.95%
Loans HFI totaled $12.5 billion at March 31, 2023, reflecting an increase of $293.2 million, or 2.4%, linked-quarter and $2.1 billion, or 20.2%, year-over-year. The linked-quarter growth was broad-based and reflected increases in all categories with the exception of state and political subdivisions and consumer loans. Trustmark’s loan portfolio remains well-diversified by loan type and geography.
Deposits totaled $14.8 billion at March 31, 2023, up $346.0 million, or 2.4%, from the prior quarter and down $329.6 million, or 2.2%, year-over-year. Trustmark continues to maintain a strong liquidity position as loans HFI represented 84.5% of total deposits at March 31, 2023. Migration into higher-yielding products continued to drive a change in deposit mix from noninterest-bearing deposits, which represented 25.7% of total deposits at March 31, 2023. Interest-bearing deposit costs totaled 1.53% for the first quarter, while the total cost of deposits was 1.13%. The total cost of interest-bearing liabilities was 1.98% for the first quarter of 2023.
During the first quarter, Trustmark did not repurchase any of its outstanding common shares. As previously announced, Trustmark’s Board of Directors authorized a stock repurchase program effective January 1, 2023, under which $50.0 million of Trustmark’s outstanding shares may be acquired through December 31, 2023. At March 31, 2023, Trustmark’s tangible equity to tangible assets ratio was 6.35%, while the total risk-based capital ratio was 11.95%. Tangible book value per share was $19.24 at March 31, 2023, an increase of 6.2% from the prior quarter.
Credit Quality
• Nonperforming assets represented 0.58% of loans HFI and loans held for sale (HFS) at March 31, 2023
• Net charge-offs totaled 0.04% of average loans in the first quarter
• Allowance for credit losses (ACL) represented 0.98% of loans HFI and 320.80% of nonaccrual loans, excluding individually analyzed loans at March 31, 2023
Nonaccrual loans totaled $72.4 million at March 31, 2023, up $6.4 million from the prior quarter and an increase of $8.0 million year-over-year. Other real estate totaled $1.7 million, reflecting a $302 thousand decrease from the prior quarter and a $1.5 million decline from the prior year.
The provision for credit losses for loans HFI was $3.2 million in the first quarter and was primarily attributable to loan growth. The provision for credit losses for off-balance sheet credit exposures was a negative $2.2 million primarily driven by decreases in unfunded commitments. Collectively, the provision for credit losses totaled $1.0 million in the first quarter compared to $12.1 million in the prior quarter and a negative $2.0 million in the first quarter of 2022.
Allocation of Trustmark’s $122.2 million ACL on loans HFI represented 0.80% of commercial loans and 1.54% of consumer and home mortgage loans, resulting in an ACL to total loans HFI of 0.98% at March 31, 2023. Management believes the level of the ACL is commensurate with the credit losses currently expected in the loan portfolio.
Revenue Generation
• Noninterest income increased 13.7% linked-quarter to total $51.4 million, reflecting growth in mortgage banking, insurance and wealth management revenue
• Net interest income (FTE) totaled $141.1 million in the first quarter, down 6.0% linked-quarter
Revenue in the first quarter totaled $189.0 million, a decline of 1.5% from the prior quarter and an increase of 23.1% from the same quarter in the prior year. The linked-quarter decline primarily reflects lower net interest income offset in part by higher mortgage banking, insurance and wealth management revenue while the year-over-year growth is attributed to higher net interest income offset in part by reduced mortgage banking revenue.
Net interest income (FTE) in the first quarter totaled $141.1 million, resulting in a net interest margin of 3.39%, down 27 basis points from the prior quarter. The contraction of the net interest margin was primarily due to the costs of interest-bearing deposits more than offsetting the increased yields on the loans HFI and HFS portfolio and securities portfolio. Additionally, the margin was impacted by costs associated with the approximately $300 million increase in average on-balance sheet liquidity added during the quarter due to the uncertainty in the broader banking industry.
Noninterest income in the first quarter totaled $51.4 million, an increase of $6.2 million, or 13.7%, from the prior quarter and a decrease of $2.7 million, or 5.1%, year-over-year. The linked-quarter increases in mortgage banking, insurance, and wealth management revenue were offset in part by declines in service charges on deposit accounts and bank card and other fees. The decrease in noninterest income year-over-year is principally due to lower mortgage banking revenue.
Mortgage loan production in the first quarter totaled $361.1 million, down 7.6% from the prior quarter and 33.7% year-over-year. Mortgage banking revenue totaled $7.6 million in the first quarter, an increase of $4.2 million linked-quarter and a decrease of $2.2 million year-over-year. The linked-quarter increase was principally attributable to a decrease in net negative hedge ineffectiveness as well as a decline in runoff of mortgage servicing rights while the year-over-year decline was principally due to a decrease in net hedge ineffectiveness.
Insurance revenue totaled $14.3 million in the first quarter, up $2.3 million, or 19.0%, from the prior quarter and $216 thousand, or 1.5%, year-over-year. The linked-quarter and year-over-year increases primarily reflected growth in commercial property and casualty commissions. Wealth management revenue in the first quarter totaled $8.8 million, an increase of $701 thousand, or 8.7%, from the prior quarter and a decline of $274 thousand, or 3.0%, year-over-year. The linked-quarter growth reflected higher trust management revenue while the year-over-year decline reflected reduced brokerage revenue.
Noninterest Expense
• Salaries and employee benefits expense increased $587 thousand, or 0.8%, linked-quarter
• Services and fees declined $2.3 million, or 8.2%, linked-quarter
• Adjusted noninterest expense, which excludes ORE expense, amortization of intangibles, charitable contributions resulting in state tax credits, and litigation settlement expense totaled $127.5 million in the first quarter, down 1.7% from the prior quarter. Please refer to the Consolidated Financial Information, Note 7 – Non-GAAP Financial Measures
Noninterest expense in the first quarter totaled $128.3 million, a decrease of $2.2 million, or 1.6%, when compared to the prior quarter excluding the litigation settlement expense. Salaries and employee benefits increased $587 thousand linked-quarter as declines in salaries and commissions were more than offset by a seasonal increase in payroll taxes. Services and fees declined $2.3 million, or 8.2%, principally due to lower professional fees.
FIT2GROW
“In 2022 we announced FIT2GROW, a comprehensive program of Focus, Innovation and Transformation designed to enhance Trustmark’s ability to grow and serve customers. During the first quarter, we refocused our community bank efforts on commercial, small business, and consumer lines of business to provide additional expertise for our customers and enhance profitable revenue growth. We continue to rollout new technology to enhance the customer experience and improve efficiency and productivity. Additionally, our Atlanta loan production office is now fully functioning and is focused on Commercial Real Estate, Residential Real Estate, Corporate Banking, and Equipment Finance. We look forward to the contributions of these businesses to our financial results going forward,” said Dewey.
Additional Information
As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, April 26, 2023, at 8:30 a.m. Central Time to discuss the Corporation’s financial results. Interested parties may listen to the conference call by dialing (877) 317-3051 or by clicking on the link provided under the Investor Relations section of our website at www.trustmark.com. A replay of the conference call will also be available through Wednesday, May 10, 2023, in archived format at the same web address or by calling (877) 344-7529, passcode 2946740.
Trustmark is a financial services company providing banking and financial solutions through offices in Alabama, Florida, Georgia, Mississippi, Tennessee and Texas.
Forward-Looking Statements
Certain statements contained in this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by words such as “may,” “hope,” “will,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “project,” “potential,” “seek,” “continue,” “could,” “would,” “future” or the negative of those terms or other words of similar meaning. You should read statements that contain these words carefully because they discuss our future expectations or state other “forward-looking” information. These forward-looking statements include, but are not limited to, statements relating to anticipated future operating and financial performance measures, including net interest margin, credit quality, business initiatives, growth opportunities and growth rates, among other things, and encompass any estimate, prediction, expectation, projection, opinion, anticipation, outlook or statement of belief included therein as well as the management assumptions underlying these forward-looking statements. You should be aware that the occurrence of the events described under the caption “Risk Factors” in Trustmark’s filings with the Securities and Exchange Commission (SEC) could have an adverse effect on our business, results of operations and financial condition. Should one or more of these risks materialize, or should any such underlying assumptions prove to be significantly different, actual results may vary significantly from those anticipated, estimated, projected or expected.
Risks that could cause actual results to differ materially from current expectations of Management include, but are not limited to, changes in the level of nonperforming assets and charge-offs, an increase in unemployment levels and slowdowns in economic growth, actions by the Board of Governors of the Federal Reserve System (FRB) that impact the level of market interest rates, 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, 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 Investor Contacts: | Trustmark Media Contact: |
|---|---|
| Thomas C. Owens | Melanie A. Morgan |
| Treasurer and | Senior Vice President |
| Principal Financial Officer | 601-208-2979 |
| 601-208-7853 |
F. Joseph Rein, Jr.
Senior Vice President
601-208-6898
| TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||||
| March 31, 2023 | ||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| Linked Quarter | Year over Year | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| QUARTERLY AVERAGE BALANCES | 12/31/2022 | 3/31/2022 | Change | % Change | Change | % Change | ||||||||||||
| Securities AFS-taxable (1) | 2,187,121 | $ | 2,572,675 | $ | 3,245,502 | ) | -15.0 | % | ) | -32.6 | % | |||||||
| Securities AFS-nontaxable | 4,812 | 4,828 | 5,127 | ) | -0.3 | % | ) | -6.1 | % | |||||||||
| Securities HTM-taxable (1) | 1,479,283 | 1,268,952 | 410,851 | 16.6 | % | n/m | ||||||||||||
| Securities HTM-nontaxable | 4,509 | 4,514 | 7,327 | ) | -0.1 | % | ) | -38.5 | % | |||||||||
| Total securities | 3,675,725 | 3,850,969 | 3,668,807 | ) | -4.6 | % | 0.2 | % | ||||||||||
| Paycheck protection program loans (PPP) | — | 3,235 | 29,009 | ) | -100.0 | % | ) | -100.0 | % | |||||||||
| Loans (includes loans held for sale) | 12,530,449 | 12,006,661 | 10,550,712 | 4.4 | % | 18.8 | % | |||||||||||
| Fed funds sold and reverse repurchases | 2,379 | 6,566 | 56 | ) | -63.8 | % | n/m | |||||||||||
| Other earning assets | 647,760 | 375,190 | 1,811,713 | 72.6 | % | ) | -64.2 | % | ||||||||||
| Total earning assets | 16,856,313 | 16,242,621 | 16,060,297 | 3.8 | % | 5.0 | % | |||||||||||
| Allowance for credit losses (ACL), loans held for investment (LHFI) | (119,978 | ) | (114,948 | ) | (99,390 | ) | ) | -4.4 | % | ) | -20.7 | % | ||||||
| Other assets | 1,762,449 | 1,630,085 | 1,550,848 | 8.1 | % | 13.6 | % | |||||||||||
| Total assets | 18,498,784 | $ | 17,757,758 | $ | 17,511,755 | 4.2 | % | 5.6 | % | |||||||||
| Interest-bearing demand deposits | 4,751,154 | $ | 4,719,303 | $ | 4,429,056 | 0.7 | % | 7.3 | % | |||||||||
| Savings deposits | 4,193,764 | 4,379,673 | 4,791,104 | ) | -4.2 | % | ) | -12.5 | % | |||||||||
| Time deposits | 1,907,449 | 1,152,905 | 1,193,435 | 65.4 | % | 59.8 | % | |||||||||||
| Total interest-bearing deposits | 10,852,367 | 10,251,881 | 10,413,595 | 5.9 | % | 4.2 | % | |||||||||||
| Fed funds purchased and repurchases | 436,535 | 549,406 | 212,006 | ) | -20.5 | % | n/m | |||||||||||
| Other borrowings | 1,110,843 | 530,993 | 91,090 | n/m | n/m | |||||||||||||
| Subordinated notes | 123,281 | 123,226 | 123,061 | 0.0 | % | 0.2 | % | |||||||||||
| Junior subordinated debt securities | 61,856 | 61,856 | 61,856 | 0.0 | % | 0.0 | % | |||||||||||
| Total interest-bearing liabilities | 12,584,882 | 11,517,362 | 10,901,608 | 9.3 | % | 15.4 | % | |||||||||||
| Noninterest-bearing deposits | 3,813,248 | 4,177,113 | 4,601,108 | ) | -8.7 | % | ) | -17.1 | % | |||||||||
| Other liabilities | 576,826 | 569,992 | 295,287 | 1.2 | % | 95.3 | % | |||||||||||
| Total liabilities | 16,974,956 | 16,264,467 | 15,798,003 | 4.4 | % | 7.5 | % | |||||||||||
| Shareholders' equity | 1,523,828 | 1,493,291 | 1,713,752 | 2.0 | % | ) | -11.1 | % | ||||||||||
| Total liabilities and equity | 18,498,784 | $ | 17,757,758 | $ | 17,511,755 | 4.2 | % | 5.6 | % | |||||||||
| (1) During the fourth quarter of 2022, Trustmark transferred 422.9 million of securities available for sale to securities held to maturity. | ||||||||||||||||||
| See Note 2 - Securities Available for Sale and Held to Maturity in the Notes to Consolidated Financials for additional information. | ||||||||||||||||||
| n/m - percentage changes greater than +/- 100% are considered not meaningful |
All values are in US Dollars.
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||||||
| March 31, 2023 | ||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| Linked Quarter | Year over Year | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| PERIOD END BALANCES | 12/31/2022 | 3/31/2022 | Change | % Change | Change | % Change | ||||||||||||
| Cash and due from banks | 1,297,144 | $ | 734,787 | $ | 1,917,564 | 76.5 | % | ) | -32.4 | % | ||||||||
| Fed funds sold and reverse repurchases | — | 4,000 | — | ) | -100.0 | % | n/m | |||||||||||
| Securities available for sale (1) | 1,984,162 | 2,024,082 | 3,018,246 | ) | -2.0 | % | ) | -34.3 | % | |||||||||
| Securities held to maturity (1) | 1,474,338 | 1,494,514 | 607,598 | ) | -1.4 | % | n/m | |||||||||||
| PPP loans | — | — | 18,579 | n/m | ) | -100.0 | % | |||||||||||
| Loans held for sale (LHFS) | 175,926 | 135,226 | 222,538 | 30.1 | % | ) | -20.9 | % | ||||||||||
| Loans held for investment (LHFI) | 12,497,195 | 12,204,039 | 10,397,129 | 2.4 | % | 20.2 | % | |||||||||||
| ACL LHFI | (122,239 | ) | (120,214 | ) | (98,734 | ) | ) | -1.7 | % | ) | -23.8 | % | ||||||
| Net LHFI | 12,374,956 | 12,083,825 | 10,298,395 | 2.4 | % | 20.2 | % | |||||||||||
| Premises and equipment, net | 223,975 | 212,365 | 207,301 | 5.5 | % | 8.0 | % | |||||||||||
| Mortgage servicing rights | 127,206 | 129,677 | 111,050 | ) | -1.9 | % | 14.5 | % | ||||||||||
| Goodwill | 384,237 | 384,237 | 384,237 | 0.0 | % | 0.0 | % | |||||||||||
| Identifiable intangible assets | 3,352 | 3,640 | 4,591 | ) | -7.9 | % | ) | -27.0 | % | |||||||||
| Other real estate | 1,684 | 1,986 | 3,187 | ) | -15.2 | % | ) | -47.2 | % | |||||||||
| Operating lease right-of-use assets | 35,315 | 36,301 | 34,048 | ) | -2.7 | % | 3.7 | % | ||||||||||
| Other assets | 794,883 | 770,838 | 614,217 | 3.1 | % | 29.4 | % | |||||||||||
| Total assets | 18,877,178 | $ | 18,015,478 | $ | 17,441,551 | 4.8 | % | 8.2 | % | |||||||||
| Deposits: | ||||||||||||||||||
| Noninterest-bearing | 3,797,055 | $ | 4,093,771 | $ | 4,739,102 | ) | -7.2 | % | ) | -19.9 | % | |||||||
| Interest-bearing | 10,986,606 | 10,343,877 | 10,374,190 | 6.2 | % | 5.9 | % | |||||||||||
| Total deposits | 14,783,661 | 14,437,648 | 15,113,292 | 2.4 | % | ) | -2.2 | % | ||||||||||
| Fed funds purchased and repurchases | 477,980 | 449,331 | 170,499 | 6.4 | % | n/m | ||||||||||||
| Other borrowings | 1,485,181 | 1,050,938 | 84,644 | 41.3 | % | n/m | ||||||||||||
| Subordinated notes | 123,317 | 123,262 | 123,097 | 0.0 | % | 0.2 | % | |||||||||||
| Junior subordinated debt securities | 61,856 | 61,856 | 61,856 | 0.0 | % | 0.0 | % | |||||||||||
| ACL on off-balance sheet credit exposures | 34,596 | 36,838 | 34,517 | ) | -6.1 | % | 0.2 | % | ||||||||||
| Operating lease liabilities | 37,988 | 38,932 | 35,912 | ) | -2.4 | % | 5.8 | % | ||||||||||
| Other liabilities | 310,500 | 324,405 | 186,352 | ) | -4.3 | % | 66.6 | % | ||||||||||
| Total liabilities | 17,315,079 | 16,523,210 | 15,810,169 | 4.8 | % | 9.5 | % | |||||||||||
| Common stock | 12,720 | 12,705 | 12,806 | 0.1 | % | ) | -0.7 | % | ||||||||||
| Capital surplus | 155,297 | 154,645 | 167,094 | 0.4 | % | ) | -7.1 | % | ||||||||||
| Retained earnings | 1,636,463 | 1,600,321 | 1,600,138 | 2.3 | % | 2.3 | % | |||||||||||
| Accumulated other comprehensive income (loss), net of tax | (242,381 | ) | (275,403 | ) | (148,656 | ) | 12.0 | % | ) | -63.0 | % | |||||||
| Total shareholders' equity | 1,562,099 | 1,492,268 | 1,631,382 | 4.7 | % | ) | -4.2 | % | ||||||||||
| Total liabilities and equity | 18,877,178 | $ | 18,015,478 | $ | 17,441,551 | 4.8 | % | 8.2 | % | |||||||||
| (1) During the fourth quarter of 2022, Trustmark transferred 422.9 million of securities available for sale to securities held to maturity. | ||||||||||||||||||
| See Note 2 - Securities Available for Sale and Held to Maturity in the Notes to Consolidated Financials for additional information. | ||||||||||||||||||
| n/m - percentage changes greater than +/- 100% are considered not meaningful |
All values are in US Dollars.
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||
| March 31, 2023 | |||||||||||||||||||
| ($ in thousands except per share data) | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| Quarter Ended | Linked Quarter | Year over Year | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| INCOME STATEMENTS | 3/31/2023 | 12/31/2022 | 3/31/2022 | Change | % Change | Change | % Change | ||||||||||||
| Interest and fees on LHFS & LHFI-FTE | $ | 178,967 | $ | 159,566 | $ | 93,252 | 12.2 | % | 91.9 | % | |||||||||
| Interest and fees on PPP loans | — | 101 | 168 | ) | -100.0 | % | ) | -100.0 | % | ||||||||||
| Interest on securities-taxable | 16,761 | 16,577 | 12,357 | 1.1 | % | 35.6 | % | ||||||||||||
| Interest on securities-tax exempt-FTE | 92 | 93 | 122 | ) | -1.1 | % | ) | -24.6 | % | ||||||||||
| Interest on fed funds sold and reverse<br> repurchases | 30 | 71 | — | ) | -57.7 | % | n/m | ||||||||||||
| Other interest income | 6,527 | 3,556 | 817 | 83.5 | % | n/m | |||||||||||||
| Total interest income-FTE | 202,377 | 179,964 | 106,716 | 12.5 | % | 89.6 | % | ||||||||||||
| Interest on deposits | 40,898 | 18,438 | 2,760 | n/m | n/m | ||||||||||||||
| Interest on fed funds purchased and repurchases | 4,832 | 4,762 | 70 | 1.5 | % | n/m | |||||||||||||
| Other interest expense | 15,575 | 6,730 | 1,539 | n/m | n/m | ||||||||||||||
| Total interest expense | 61,305 | 29,930 | 4,369 | n/m | n/m | ||||||||||||||
| Net interest income-FTE | 141,072 | 150,034 | 102,347 | ) | -6.0 | % | 37.8 | % | |||||||||||
| Provision for credit losses, LHFI | 3,244 | 6,902 | (860 | ) | ) | -53.0 | % | n/m | |||||||||||
| Provision for credit losses, off-balance sheet <br> credit exposures | (2,242 | ) | 5,215 | (1,106 | ) | ) | n/m | ) | n/m | ||||||||||
| Net interest income after provision-FTE | 140,070 | 137,917 | 104,313 | 1.6 | % | 34.3 | % | ||||||||||||
| Service charges on deposit accounts | 10,336 | 11,162 | 9,451 | ) | -7.4 | % | 9.4 | % | |||||||||||
| Bank card and other fees | 7,803 | 8,191 | 8,442 | ) | -4.7 | % | ) | -7.6 | % | ||||||||||
| Mortgage banking, net | 7,639 | 3,408 | 9,873 | n/m | ) | -22.6 | % | ||||||||||||
| Insurance commissions | 14,305 | 12,019 | 14,089 | 19.0 | % | 1.5 | % | ||||||||||||
| Wealth management | 8,780 | 8,079 | 9,054 | 8.7 | % | ) | -3.0 | % | |||||||||||
| Other, net | 2,514 | 2,311 | 3,206 | 8.8 | % | ) | -21.6 | % | |||||||||||
| Total noninterest income | 51,377 | 45,170 | 54,115 | 13.7 | % | ) | -5.1 | % | |||||||||||
| Salaries and employee benefits | 74,056 | 73,469 | 69,585 | 0.8 | % | 6.4 | % | ||||||||||||
| Services and fees (2) | 25,426 | 27,709 | 25,314 | ) | -8.2 | % | 0.4 | % | |||||||||||
| Net occupancy-premises | 7,629 | 7,898 | 7,079 | ) | -3.4 | % | 7.8 | % | |||||||||||
| Equipment expense | 6,405 | 6,268 | 6,061 | 2.2 | % | 5.7 | % | ||||||||||||
| Litigation settlement expense (1) | — | 100,750 | — | ) | -100.0 | % | n/m | ||||||||||||
| Other expense (2) | 14,811 | 15,135 | 13,480 | ) | -2.1 | % | 9.9 | % | |||||||||||
| Total noninterest expense | 128,327 | 231,229 | 121,519 | ) | -44.5 | % | 5.6 | % | |||||||||||
| Income (loss) before income taxes and tax eq adj | 63,120 | (48,142 | ) | 36,909 | n/m | 71.0 | % | ||||||||||||
| Tax equivalent adjustment | 3,477 | 3,451 | 3,003 | 0.8 | % | 15.8 | % | ||||||||||||
| Income (loss) before income taxes | 59,643 | (51,593 | ) | 33,906 | n/m | 75.9 | % | ||||||||||||
| Income taxes | 9,343 | (17,530 | ) | 4,695 | n/m | 99.0 | % | ||||||||||||
| Net income (loss) | $ | 50,300 | $ | (34,063 | ) | $ | 29,211 | n/m | 72.2 | % | |||||||||
| Per share data | |||||||||||||||||||
| Earnings (loss) per share - basic | $ | 0.82 | $ | (0.56 | ) | $ | 0.47 | n/m | 74.5 | % | |||||||||
| Earnings (loss) per share - diluted | $ | 0.82 | $ | (0.56 | ) | $ | 0.47 | n/m | 74.5 | % | |||||||||
| Dividends per share | $ | 0.23 | $ | 0.23 | $ | 0.23 | 0.0 | % | 0.0 | % | |||||||||
| Weighted average shares outstanding | |||||||||||||||||||
| Basic | 61,011,059 | 60,969,400 | 61,514,395 | ||||||||||||||||
| Diluted | 61,193,275 | 61,173,249 | 61,709,797 | ||||||||||||||||
| Period end shares outstanding | 61,048,516 | 60,977,686 | 61,463,392 | ||||||||||||||||
| (1) See Note 1 - Litigation Settlement in the Notes to Consolidated Financials for additional information. | |||||||||||||||||||
| (2) During the first quarter of 2023, Trustmark reclassified its debit card transaction fees from other expense to services and fees. Prior periods have been reclassified accordingly. | |||||||||||||||||||
| n/m - percentage changes greater than +/- 100% are considered not meaningful |
All values are in US Dollars.
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||
| March 31, 2023 | |||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| Quarter Ended | Linked Quarter | Year over Year | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| NONPERFORMING ASSETS (1) | 3/31/2023 | 12/31/2022 | 3/31/2022 | Change | % Change | Change | % Change | ||||||||||||
| Nonaccrual LHFI | |||||||||||||||||||
| Alabama | $ | 10,919 | $ | 12,300 | $ | 7,506 | ) | -11.2 | % | 45.5 | % | ||||||||
| Florida | 256 | 227 | 310 | 12.8 | % | ) | -17.4 | % | |||||||||||
| Mississippi (2) | 32,560 | 24,683 | 21,318 | 31.9 | % | 52.7 | % | ||||||||||||
| Tennessee (3) | 5,416 | 5,566 | 9,266 | ) | -2.7 | % | ) | -41.5 | % | ||||||||||
| Texas | 23,224 | 23,196 | 25,999 | 0.1 | % | ) | -10.7 | % | |||||||||||
| Total nonaccrual LHFI | 72,375 | 65,972 | 64,399 | 9.7 | % | 12.4 | % | ||||||||||||
| Other real estate | |||||||||||||||||||
| Alabama | — | 194 | — | ) | -100.0 | % | n/m | ||||||||||||
| Mississippi (2) | 1,495 | 1,769 | 3,187 | ) | -15.5 | % | ) | -53.1 | % | ||||||||||
| Tennessee (3) | 189 | 23 | — | n/m | n/m | ||||||||||||||
| Total other real estate | 1,684 | 1,986 | 3,187 | ) | -15.2 | % | ) | -47.2 | % | ||||||||||
| Total nonperforming assets | $ | 74,059 | $ | 67,958 | $ | 67,586 | 9.0 | % | 9.6 | % | |||||||||
| LOANS PAST DUE OVER 90 DAYS (1) | |||||||||||||||||||
| LHFI | $ | 2,255 | $ | 3,929 | $ | 1,503 | ) | -42.6 | % | 50.0 | % | ||||||||
| LHFS-Guaranteed GNMA serviced loans | |||||||||||||||||||
| (no obligation to repurchase) | $ | 41,468 | $ | 49,320 | $ | 62,078 | ) | -15.9 | % | ) | -33.2 | % | |||||||
| Quarter Ended | Linked Quarter | Year over Year | |||||||||||||||||
| ACL LHFI (1) | 3/31/2023 | 12/31/2022 | 3/31/2022 | Change | % Change | Change | % Change | ||||||||||||
| Beginning Balance | $ | 120,214 | $ | 115,050 | $ | 99,457 | 4.5 | % | 20.9 | % | |||||||||
| Provision for credit losses, LHFI | 3,244 | 6,902 | (860 | ) | ) | -53.0 | % | n/m | |||||||||||
| Charge-offs | (2,996 | ) | (3,893 | ) | (2,242 | ) | 23.0 | % | ) | -33.6 | % | ||||||||
| Recoveries | 1,777 | 2,155 | 2,379 | ) | -17.5 | % | ) | -25.3 | % | ||||||||||
| Net (charge-offs) recoveries | (1,219 | ) | (1,738 | ) | 137 | 29.9 | % | ) | n/m | ||||||||||
| Ending Balance | $ | 122,239 | $ | 120,214 | $ | 98,734 | 1.7 | % | 23.8 | % | |||||||||
| NET (CHARGE-OFFS) RECOVERIES (1) | |||||||||||||||||||
| Alabama | $ | (268 | ) | $ | 98 | $ | 699 | ) | n/m | ) | n/m | ||||||||
| Florida | (36 | ) | (60 | ) | (26 | ) | 40.0 | % | ) | -38.5 | % | ||||||||
| Mississippi (2) | (775 | ) | (1,657 | ) | (88 | ) | 53.2 | % | ) | n/m | |||||||||
| Tennessee (3) | (124 | ) | (195 | ) | (424 | ) | 36.4 | % | 70.8 | % | |||||||||
| Texas | (16 | ) | 76 | (24 | ) | ) | n/m | 33.3 | % | ||||||||||
| Total net (charge-offs) recoveries | $ | (1,219 | ) | $ | (1,738 | ) | $ | 137 | 29.9 | % | ) | n/m | |||||||
| (1) Excludes PPP loans. | |||||||||||||||||||
| (2) Mississippi includes Central and Southern Mississippi Regions. | |||||||||||||||||||
| (3) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions. | |||||||||||||||||||
| n/m - percentage changes greater than +/- 100% are considered not meaningful |
All values are in US Dollars.
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||
| March 31, 2023 | ||||||||||||||
| ($ in thousands) | ||||||||||||||
| (unaudited) | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| AVERAGE BALANCES | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | ||||||||||
| Securities AFS-taxable (1) | 2,187,121 | $ | 2,572,675 | $ | 2,824,254 | $ | 3,094,364 | $ | 3,245,502 | |||||
| Securities AFS-nontaxable | 4,812 | 4,828 | 4,928 | 5,110 | 5,127 | |||||||||
| Securities HTM-taxable (1) | 1,479,283 | 1,268,952 | 1,140,685 | 811,599 | 410,851 | |||||||||
| Securities HTM-nontaxable | 4,509 | 4,514 | 5,057 | 5,630 | 7,327 | |||||||||
| Total securities | 3,675,725 | 3,850,969 | 3,974,924 | 3,916,703 | 3,668,807 | |||||||||
| PPP loans | — | 3,235 | 9,821 | 17,746 | 29,009 | |||||||||
| Loans (includes loans held for sale) | 12,530,449 | 12,006,661 | 11,459,551 | 10,910,178 | 10,550,712 | |||||||||
| Fed funds sold and reverse repurchases | 2,379 | 6,566 | 226 | 110 | 56 | |||||||||
| Other earning assets | 647,760 | 375,190 | 325,620 | 1,139,312 | 1,811,713 | |||||||||
| Total earning assets | 16,856,313 | 16,242,621 | 15,770,142 | 15,984,049 | 16,060,297 | |||||||||
| ACL LHFI | (119,978 | ) | (114,948 | ) | (102,951 | ) | (99,106 | ) | (99,390 | ) | ||||
| Other assets | 1,762,449 | 1,630,085 | 1,576,653 | 1,513,127 | 1,550,848 | |||||||||
| Total assets | 18,498,784 | $ | 17,757,758 | $ | 17,243,844 | $ | 17,398,070 | $ | 17,511,755 | |||||
| Interest-bearing demand deposits | 4,751,154 | $ | 4,719,303 | $ | 4,613,733 | $ | 4,578,235 | $ | 4,429,056 | |||||
| Savings deposits | 4,193,764 | 4,379,673 | 4,514,579 | 4,638,849 | 4,791,104 | |||||||||
| Time deposits | 1,907,449 | 1,152,905 | 1,111,440 | 1,159,065 | 1,193,435 | |||||||||
| Total interest-bearing deposits | 10,852,367 | 10,251,881 | 10,239,752 | 10,376,149 | 10,413,595 | |||||||||
| Fed funds purchased and repurchases | 436,535 | 549,406 | 249,809 | 118,753 | 212,006 | |||||||||
| Other borrowings | 1,110,843 | 530,993 | 88,697 | 80,283 | 91,090 | |||||||||
| Subordinated notes | 123,281 | 123,226 | 123,171 | 123,116 | 123,061 | |||||||||
| Junior subordinated debt securities | 61,856 | 61,856 | 61,856 | 61,856 | 61,856 | |||||||||
| Total interest-bearing liabilities | 12,584,882 | 11,517,362 | 10,763,285 | 10,760,157 | 10,901,608 | |||||||||
| Noninterest-bearing deposits | 3,813,248 | 4,177,113 | 4,444,370 | 4,590,338 | 4,601,108 | |||||||||
| Other liabilities | 576,826 | 569,992 | 429,720 | 439,266 | 295,287 | |||||||||
| Total liabilities | 16,974,956 | 16,264,467 | 15,637,375 | 15,789,761 | 15,798,003 | |||||||||
| Shareholders' equity | 1,523,828 | 1,493,291 | 1,606,469 | 1,608,309 | 1,713,752 | |||||||||
| Total liabilities and equity | 18,498,784 | $ | 17,757,758 | $ | 17,243,844 | $ | 17,398,070 | $ | 17,511,755 | |||||
| (1) During the fourth quarter of 2022, Trustmark transferred 422.9 million of securities available for sale to securities held to maturity. | ||||||||||||||
| See Note 2 - Securities Available for Sale and Held to Maturity in the Notes to Consolidated Financials for additional information. |
All values are in US Dollars.
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED FINANCIAL INFORMATION | ||||||||||||||
| March 31, 2023 | ||||||||||||||
| ($ in thousands) | ||||||||||||||
| (unaudited) | ||||||||||||||
| PERIOD END BALANCES | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Cash and due from banks | 1,297,144 | $ | 734,787 | $ | 479,637 | $ | 742,461 | $ | 1,917,564 | |||||
| Fed funds sold and reverse repurchases | — | 4,000 | 10,098 | — | — | |||||||||
| Securities available for sale (1) | 1,984,162 | 2,024,082 | 2,444,486 | 2,644,364 | 3,018,246 | |||||||||
| Securities held to maturity (1) | 1,474,338 | 1,494,514 | 1,156,985 | 1,137,754 | 607,598 | |||||||||
| PPP loans | — | — | 4,798 | 12,549 | 18,579 | |||||||||
| LHFS | 175,926 | 135,226 | 165,213 | 190,186 | 222,538 | |||||||||
| LHFI | 12,497,195 | 12,204,039 | 11,586,064 | 10,944,840 | 10,397,129 | |||||||||
| ACL LHFI | (122,239 | ) | (120,214 | ) | (115,050 | ) | (103,140 | ) | (98,734 | ) | ||||
| Net LHFI | 12,374,956 | 12,083,825 | 11,471,014 | 10,841,700 | 10,298,395 | |||||||||
| Premises and equipment, net | 223,975 | 212,365 | 210,761 | 207,914 | 207,301 | |||||||||
| Mortgage servicing rights | 127,206 | 129,677 | 132,615 | 121,014 | 111,050 | |||||||||
| Goodwill | 384,237 | 384,237 | 384,237 | 384,237 | 384,237 | |||||||||
| Identifiable intangible assets | 3,352 | 3,640 | 3,952 | 4,264 | 4,591 | |||||||||
| Other real estate | 1,684 | 1,986 | 2,971 | 3,034 | 3,187 | |||||||||
| Operating lease right-of-use assets | 35,315 | 36,301 | 37,282 | 34,684 | 34,048 | |||||||||
| Other assets | 794,883 | 770,838 | 686,585 | 627,349 | 614,217 | |||||||||
| Total assets | 18,877,178 | $ | 18,015,478 | $ | 17,190,634 | $ | 16,951,510 | $ | 17,441,551 | |||||
| Deposits: | ||||||||||||||
| Noninterest-bearing | 3,797,055 | $ | 4,093,771 | $ | 4,358,805 | $ | 4,509,472 | $ | 4,739,102 | |||||
| Interest-bearing | 10,986,606 | 10,343,877 | 10,066,375 | 10,260,696 | 10,374,190 | |||||||||
| Total deposits | 14,783,661 | 14,437,648 | 14,425,180 | 14,770,168 | 15,113,292 | |||||||||
| Fed funds purchased and repurchases | 477,980 | 449,331 | 544,068 | 70,157 | 170,499 | |||||||||
| Other borrowings | 1,485,181 | 1,050,938 | 223,172 | 72,553 | 84,644 | |||||||||
| Subordinated notes | 123,317 | 123,262 | 123,207 | 123,152 | 123,097 | |||||||||
| Junior subordinated debt securities | 61,856 | 61,856 | 61,856 | 61,856 | 61,856 | |||||||||
| ACL on off-balance sheet credit exposures | 34,596 | 36,838 | 31,623 | 32,949 | 34,517 | |||||||||
| Operating lease liabilities | 37,988 | 38,932 | 39,797 | 37,108 | 35,912 | |||||||||
| Other liabilities | 310,500 | 324,405 | 232,786 | 196,871 | 186,352 | |||||||||
| Total liabilities | 17,315,079 | 16,523,210 | 15,681,689 | 15,364,814 | 15,810,169 | |||||||||
| Common stock | 12,720 | 12,705 | 12,700 | 12,752 | 12,806 | |||||||||
| Capital surplus | 155,297 | 154,645 | 154,150 | 160,876 | 167,094 | |||||||||
| Retained earnings | 1,636,463 | 1,600,321 | 1,648,507 | 1,620,210 | 1,600,138 | |||||||||
| Accumulated other comprehensive income (loss), net of tax | (242,381 | ) | (275,403 | ) | (306,412 | ) | (207,142 | ) | (148,656 | ) | ||||
| Total shareholders' equity | 1,562,099 | 1,492,268 | 1,508,945 | 1,586,696 | 1,631,382 | |||||||||
| Total liabilities and equity | 18,877,178 | $ | 18,015,478 | $ | 17,190,634 | $ | 16,951,510 | $ | 17,441,551 | |||||
| (1) During the fourth quarter of 2022, Trustmark transferred 422.9 million of securities available for sale to securities held to maturity. | ||||||||||||||
| See Note 2 - Securities Available for Sale and Held to Maturity in the Notes to Consolidated Financials for additional information. |
All values are in US Dollars.
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||
| March 31, 2023 | |||||||||||||||
| ($ in thousands except per share data) | |||||||||||||||
| (unaudited) | |||||||||||||||
| Quarter Ended | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| INCOME STATEMENTS | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | ||||||||||
| Interest and fees on LHFS & LHFI-FTE | $ | 178,967 | $ | 159,566 | $ | 129,395 | $ | 103,033 | $ | 93,252 | |||||
| Interest and fees on PPP loans | — | 101 | 186 | 184 | 168 | ||||||||||
| Interest on securities-taxable | 16,761 | 16,577 | 16,222 | 14,561 | 12,357 | ||||||||||
| Interest on securities-tax exempt-FTE | 92 | 93 | 100 | 107 | 122 | ||||||||||
| Interest on fed funds sold and reverse repurchases | 30 | 71 | 2 | 1 | — | ||||||||||
| Other interest income | 6,527 | 3,556 | 1,493 | 2,214 | 817 | ||||||||||
| Total interest income-FTE | 202,377 | 179,964 | 147,398 | 120,100 | 106,716 | ||||||||||
| Interest on deposits | 40,898 | 18,438 | 5,097 | 2,774 | 2,760 | ||||||||||
| Interest on fed funds purchased and repurchases | 4,832 | 4,762 | 1,225 | 70 | 70 | ||||||||||
| Other interest expense | 15,575 | 6,730 | 1,996 | 1,664 | 1,539 | ||||||||||
| Total interest expense | 61,305 | 29,930 | 8,318 | 4,508 | 4,369 | ||||||||||
| Net interest income-FTE | 141,072 | 150,034 | 139,080 | 115,592 | 102,347 | ||||||||||
| Provision for credit losses, LHFI | 3,244 | 6,902 | 12,919 | 2,716 | (860 | ) | |||||||||
| Provision for credit losses, off-balance sheet <br> credit exposures | (2,242 | ) | 5,215 | (1,326 | ) | (1,568 | ) | (1,106 | ) | ||||||
| Net interest income after provision-FTE | 140,070 | 137,917 | 127,487 | 114,444 | 104,313 | ||||||||||
| Service charges on deposit accounts | 10,336 | 11,162 | 11,318 | 10,226 | 9,451 | ||||||||||
| Bank card and other fees | 7,803 | 8,191 | 9,305 | 10,167 | 8,442 | ||||||||||
| Mortgage banking, net | 7,639 | 3,408 | 6,876 | 8,149 | 9,873 | ||||||||||
| Insurance commissions | 14,305 | 12,019 | 13,911 | 13,702 | 14,089 | ||||||||||
| Wealth management | 8,780 | 8,079 | 8,778 | 9,102 | 9,054 | ||||||||||
| Other, net | 2,514 | 2,311 | 2,418 | 1,907 | 3,206 | ||||||||||
| Total noninterest income | 51,377 | 45,170 | 52,606 | 53,253 | 54,115 | ||||||||||
| Salaries and employee benefits | 74,056 | 73,469 | 72,707 | 71,679 | 69,585 | ||||||||||
| Services and fees (2) | 25,426 | 27,709 | 26,787 | 25,659 | 25,314 | ||||||||||
| Net occupancy-premises | 7,629 | 7,898 | 7,395 | 6,892 | 7,079 | ||||||||||
| Equipment expense | 6,405 | 6,268 | 6,072 | 6,047 | 6,061 | ||||||||||
| Litigation settlement expense (1) | — | 100,750 | — | — | — | ||||||||||
| Other expense (2) | 14,811 | 15,135 | 13,737 | 13,490 | 13,480 | ||||||||||
| Total noninterest expense | 128,327 | 231,229 | 126,698 | 123,767 | 121,519 | ||||||||||
| Income (loss) before income taxes and tax eq adj | 63,120 | (48,142 | ) | 53,395 | 43,930 | 36,909 | |||||||||
| Tax equivalent adjustment | 3,477 | 3,451 | 2,975 | 2,916 | 3,003 | ||||||||||
| Income (loss) before income taxes | 59,643 | (51,593 | ) | 50,420 | 41,014 | 33,906 | |||||||||
| Income taxes | 9,343 | (17,530 | ) | 7,965 | 6,730 | 4,695 | |||||||||
| Net income (loss) | $ | 50,300 | $ | (34,063 | ) | $ | 42,455 | $ | 34,284 | $ | 29,211 | ||||
| Per share data | |||||||||||||||
| Earnings (loss) per share - basic | $ | 0.82 | $ | (0.56 | ) | $ | 0.69 | $ | 0.56 | $ | 0.47 | ||||
| Earnings (loss) per share - diluted | $ | 0.82 | $ | (0.56 | ) | $ | 0.69 | $ | 0.56 | $ | 0.47 | ||||
| Dividends per share | $ | 0.23 | $ | 0.23 | $ | 0.23 | $ | 0.23 | $ | 0.23 | |||||
| Weighted average shares outstanding | |||||||||||||||
| Basic | 61,011,059 | 60,969,400 | 61,114,804 | 61,378,226 | 61,514,395 | ||||||||||
| Diluted | 61,193,275 | 61,173,249 | 61,318,715 | 61,546,285 | 61,709,797 | ||||||||||
| Period end shares outstanding | 61,048,516 | 60,977,686 | 60,953,864 | 61,201,123 | 61,463,392 | ||||||||||
| (1) See Note 1 - Litigation Settlement in the Notes to Consolidated Financials for additional information. | |||||||||||||||
| (2) During the first quarter of 2023, Trustmark reclassified its debit card transaction fees from other expense to services and fees. Prior periods have been reclassified accordingly. |
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||
| March 31, 2023 | |||||||||||||||
| ($ in thousands) | |||||||||||||||
| (unaudited) | |||||||||||||||
| Quarter Ended | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| NONPERFORMING ASSETS (1) | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | ||||||||||
| Nonaccrual LHFI | |||||||||||||||
| Alabama | $ | 10,919 | $ | 12,300 | $ | 12,710 | $ | 2,698 | $ | 7,506 | |||||
| Florida | 256 | 227 | 227 | 233 | 310 | ||||||||||
| Mississippi (2) | 32,560 | 24,683 | 23,517 | 23,039 | 21,318 | ||||||||||
| Tennessee (3) | 5,416 | 5,566 | 5,120 | 9,500 | 9,266 | ||||||||||
| Texas | 23,224 | 23,196 | 26,353 | 26,582 | 25,999 | ||||||||||
| Total nonaccrual LHFI | 72,375 | 65,972 | 67,927 | 62,052 | 64,399 | ||||||||||
| Other real estate | |||||||||||||||
| Alabama | — | 194 | 217 | 84 | — | ||||||||||
| Mississippi (2) | 1,495 | 1,769 | 2,754 | 2,950 | 3,187 | ||||||||||
| Tennessee (3) | 189 | 23 | — | — | — | ||||||||||
| Total other real estate | 1,684 | 1,986 | 2,971 | 3,034 | 3,187 | ||||||||||
| Total nonperforming assets | $ | 74,059 | $ | 67,958 | $ | 70,898 | $ | 65,086 | $ | 67,586 | |||||
| LOANS PAST DUE OVER 90 DAYS (1) | |||||||||||||||
| LHFI | $ | 2,255 | $ | 3,929 | $ | 1,842 | $ | 1,347 | $ | 1,503 | |||||
| LHFS-Guaranteed GNMA serviced loans | |||||||||||||||
| (no obligation to repurchase) | $ | 41,468 | $ | 49,320 | $ | 48,313 | $ | 51,164 | $ | 62,078 | |||||
| Quarter Ended | |||||||||||||||
| ACL LHFI (1) | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | ||||||||||
| Beginning Balance | $ | 120,214 | $ | 115,050 | $ | 103,140 | $ | 98,734 | $ | 99,457 | |||||
| Provision for credit losses, LHFI | 3,244 | 6,902 | 12,919 | 2,716 | (860 | ) | |||||||||
| Charge-offs | (2,996 | ) | (3,893 | ) | (2,920 | ) | (2,277 | ) | (2,242 | ) | |||||
| Recoveries | 1,777 | 2,155 | 1,911 | 3,967 | 2,379 | ||||||||||
| Net (charge-offs) recoveries | (1,219 | ) | (1,738 | ) | (1,009 | ) | 1,690 | 137 | |||||||
| Ending Balance | $ | 122,239 | $ | 120,214 | $ | 115,050 | $ | 103,140 | $ | 98,734 | |||||
| NET (CHARGE-OFFS) RECOVERIES (1) | |||||||||||||||
| Alabama | $ | (268 | ) | $ | 98 | $ | 93 | $ | 1,129 | $ | 699 | ||||
| Florida | (36 | ) | (60 | ) | (23 | ) | 761 | (26 | ) | ||||||
| Mississippi (2) | (775 | ) | (1,657 | ) | (702 | ) | (266 | ) | (88 | ) | |||||
| Tennessee (3) | (124 | ) | (195 | ) | (202 | ) | 31 | (424 | ) | ||||||
| Texas | (16 | ) | 76 | (175 | ) | 35 | (24 | ) | |||||||
| Total net (charge-offs) recoveries | $ | (1,219 | ) | $ | (1,738 | ) | $ | (1,009 | ) | $ | 1,690 | $ | 137 | ||
| (1) Excludes PPP loans. | |||||||||||||||
| (2) Mississippi includes Central and Southern Mississippi Regions. | |||||||||||||||
| (3) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions. |
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||
| March 31, 2023 | |||||||||||||||
| (unaudited) | |||||||||||||||
| Quarter Ended | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| FINANCIAL RATIOS AND OTHER DATA | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | ||||||||||
| Return on average equity | 13.39 | % | -9.05 | % | 10.48 | % | 8.55 | % | 6.91 | % | |||||
| Return on average tangible equity | 18.03 | % | -12.14 | % | 13.90 | % | 11.36 | % | 9.05 | % | |||||
| Return on average assets | 1.10 | % | -0.76 | % | 0.98 | % | 0.79 | % | 0.68 | % | |||||
| Interest margin - Yield - FTE | 4.87 | % | 4.40 | % | 3.71 | % | 3.01 | % | 2.69 | % | |||||
| Interest margin - Cost | 1.47 | % | 0.73 | % | 0.21 | % | 0.11 | % | 0.11 | % | |||||
| Net interest margin - FTE | 3.39 | % | 3.66 | % | 3.50 | % | 2.90 | % | 2.58 | % | |||||
| Efficiency ratio (1) | 65.60 | % | 65.85 | % | 64.96 | % | 71.89 | % | 76.44 | % | |||||
| Full-time equivalent employees | 2,758 | 2,738 | 2,717 | 2,727 | 2,725 | ||||||||||
| CREDIT QUALITY RATIOS (2) | |||||||||||||||
| Net (recoveries) charge-offs / average loans | 0.04 | % | 0.06 | % | 0.03 | % | -0.06 | % | -0.01 | % | |||||
| Provision for credit losses, LHFI / average loans | 0.10 | % | 0.23 | % | 0.45 | % | 0.10 | % | -0.03 | % | |||||
| Nonaccrual LHFI / (LHFI + LHFS) | 0.57 | % | 0.53 | % | 0.58 | % | 0.56 | % | 0.61 | % | |||||
| Nonperforming assets / (LHFI + LHFS) | 0.58 | % | 0.55 | % | 0.60 | % | 0.58 | % | 0.64 | % | |||||
| Nonperforming assets / (LHFI + LHFS <br> + other real estate) | 0.58 | % | 0.55 | % | 0.60 | % | 0.58 | % | 0.64 | % | |||||
| ACL LHFI / LHFI | 0.98 | % | 0.99 | % | 0.99 | % | 0.94 | % | 0.95 | % | |||||
| ACL LHFI-commercial / commercial LHFI | 0.80 | % | 0.85 | % | 0.93 | % | 0.88 | % | 0.95 | % | |||||
| ACL LHFI-consumer / consumer and <br> home mortgage LHFI | 1.54 | % | 1.41 | % | 1.20 | % | 1.14 | % | 0.96 | % | |||||
| ACL LHFI / nonaccrual LHFI | 168.90 | % | 182.22 | % | 169.37 | % | 166.22 | % | 153.32 | % | |||||
| ACL LHFI / nonaccrual LHFI <br> (excl individually analyzed loans) | 320.80 | % | 399.19 | % | 466.03 | % | 475.27 | % | 484.01 | % | |||||
| CAPITAL RATIOS | |||||||||||||||
| Total equity / total assets | 8.28 | % | 8.28 | % | 8.78 | % | 9.36 | % | 9.35 | % | |||||
| Tangible equity / tangible assets | 6.35 | % | 6.27 | % | 6.67 | % | 7.23 | % | 7.29 | % | |||||
| Tangible equity / risk-weighted assets | 7.94 | % | 7.61 | % | 8.15 | % | 9.16 | % | 9.79 | % | |||||
| Tier 1 leverage ratio | 8.29 | % | 8.47 | % | 9.01 | % | 8.80 | % | 8.66 | % | |||||
| Common equity tier 1 capital ratio | 9.76 | % | 9.74 | % | 10.63 | % | 11.01 | % | 11.23 | % | |||||
| Tier 1 risk-based capital ratio | 10.17 | % | 10.15 | % | 11.06 | % | 11.47 | % | 11.70 | % | |||||
| Total risk-based capital ratio | 11.95 | % | 11.91 | % | 12.85 | % | 13.26 | % | 13.53 | % | |||||
| STOCK PERFORMANCE | |||||||||||||||
| Market value-Close | $ | 24.70 | $ | 34.91 | $ | 30.63 | $ | 29.19 | $ | 30.39 | |||||
| Book value | $ | 25.59 | $ | 24.47 | $ | 24.76 | $ | 25.93 | $ | 26.54 | |||||
| Tangible book value | $ | 19.24 | $ | 18.11 | $ | 18.39 | $ | 19.58 | $ | 20.22 | |||||
| (1) See Note 7 – Non-GAAP Financial Measures in the Notes to Consolidated Financials for Trustmark’s efficiency ratio calculation. | |||||||||||||||
| (2) Excludes PPP loans. |
See Notes to Consolidated Financials
| TRUSTMARK CORPORATION AND SUBSIDIARIES |
|---|
| NOTES TO CONSOLIDATED FINANCIALS |
| March 31, 2023 |
| ($ in thousands) |
| (unaudited) |
Note 1 - Litigation Settlement
As previously announced, on December 31, 2022, Trustmark National Bank (“Trustmark”) agreed to a settlement in principle (the “Settlement”) relating to litigation involving the Stanford Financial Group that includes a lawsuit initially filed in the District Court of Harris County, Texas on August 23, 2009 and also includes other subsequently-filed Stanford-related lawsuits. Trustmark Corporation, the parent company of Trustmark, has provided disclosure relating to these matters in its current report on Form 8-K filed on January 3, 2023, and in its periodic reports on Forms 10-K and 10-Q throughout the pendency of these actions.
The parties to the Settlement are, on the one hand, (i) Ralph S. Janvey, solely in his capacity as the court-appointed receiver (the “Receiver”) for the Stanford Receivership Estate; (ii) the Official Stanford Investors Committee; (iii) each of the plaintiffs in the Rotstain and Smith Actions (as defined below); and, on the other hand, (iv) Trustmark.
Under the terms of the Settlement, the parties agreed to settle and dismiss Rotstain, et al. v. Trustmark National Bank, et al., CA No. 4-22-CV-00800 (S.D. Tex.) (the “Rotstain Action”), Smith et al. v. Independent Bank, et al., CA No. 4-20-CV-00675 (S.D. Tex.) (the “Smith Action”), and all current or future claims arising from or related to Stanford. In addition, the Settlement provides that the parties will request dismissal of Jackson, et al., v. Cox, et al., CA No. 3:10-CV-0328 (N.D. Tex.) (the “Jackson Action” and, collectively with the Rotstain Action and the Smith Action, the “Actions”) pursuant to the terms of the bar orders described below. If the Settlement, including the bar orders described below, is approved by the Court and is not subject to further appeal, Trustmark will make a one-time cash payment of $100.0 million to the Receiver. Trustmark was relieved of pre-trial deadlines and the February 27, 2023 trial setting in the Rotstain Action pending final Court approval of a Settlement Agreement reflecting the terms of the Settlement and pending entry of the bar orders. The Smith and Jackson Actions are currently stayed.
The Settlement included the parties’ agreement to seek the Northern District of Texas District Court’s entry of bar orders prohibiting any continued or future claims against Trustmark and its related parties relating to Stanford, whether asserted to date or not. The bar orders therefore would prohibit all litigation relating to Stanford described in Trustmark Corporation’s SEC periodic reports, including the Actions and any pending matters, as well as any actions relating to Stanford that may be brought in the future. Final Court approval of these bar orders is a condition of the Settlement.
The Settlement was also subject to the execution and delivery of a definitive Settlement Agreement reflecting the terms of the Settlement, which was fully executed by the parties on January 13, 2023, and notice to Stanford’s investor claimants, which the Receiver has effectuated. The Settlement is also subject to final, non-appealable approval by the U.S. District Court for the Northern District of Texas. That Court has scheduled a hearing to approve the Settlement for May 3, 2023, but the timing of any final decision by the Court is subject to the discretion of the Court and any appeal. Robert Allen Stanford (founder of the Stanford Financial Group) is the only person or entity who filed an objection to the Settlement. The Court has previously overruled objections filed by Mr. Stanford in connection with prior Stanford-related settlements. While Trustmark believes that the Settlement is consistent with the terms of prior Stanford-related settlements that have been approved by the Court and were not successfully appealed, it is possible that the Court may decide not to approve the Settlement Agreement or that the Fifth Circuit Court of Appeals could decide to accept an appeal thereof.
The Settlement Agreement provides that Trustmark makes no admission of liability or wrongdoing in connection with any Stanford matter. As has been the case throughout the pendency of the Actions, Trustmark expressly denies any liability or wrongdoing with respect to any matter alleged in regard of the multi-billion-dollar Ponzi scheme operated by Stanford for almost 20 years. Trustmark’s relationship with Stanford consisted of ordinary banking services provided to business deposit customers.
Trustmark and Trustmark Corporation determined that it was in the best interest of Trustmark, Trustmark Corporation and the shareholders of Trustmark Corporation to enter into the Settlement and the Settlement Agreement to eliminate the risk, ongoing expense, uncertainty as to ultimate outcome, and imposition on management and the business of Trustmark of further litigation of the Actions and related Stanford claims.
As the time of the entry into the Settlement, Trustmark Corporation recognized $100.0 million of litigation settlement expense, as well as an additional $750 thousand in legal fees, which were included in noninterest expense related to the Stanford litigation during the fourth quarter of 2022. Trustmark Corporation expects that the Settlement will be tax deductible. Trustmark remains substantially above levels considered to be well-capitalized under all relevant standards.
The foregoing description of the Settlement Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Settlement Agreement, a copy of which was filed as an exhibit to Trustmark Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed on February 16, 2023.
| TRUSTMARK CORPORATION AND SUBSIDIARIES |
|---|
| NOTES TO CONSOLIDATED FINANCIALS |
| March 31, 2023 |
| ($ in thousands) |
| (unaudited) |
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:
| 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| SECURITIES AVAILABLE FOR SALE | ||||||||||
| U.S. Treasury securities | $ | 386,903 | $ | 391,513 | $ | 416,278 | $ | 419,696 | $ | 361,822 |
| U.S. Government agency obligations | 7,254 | 7,766 | 9,116 | 11,947 | 12,623 | |||||
| Obligations of states and political subdivisions | 4,907 | 4,862 | 4,763 | 5,179 | 5,359 | |||||
| Mortgage-backed securities | ||||||||||
| Residential mortgage pass-through securities | ||||||||||
| Guaranteed by GNMA | 26,851 | 27,097 | 28,164 | 32,240 | 35,117 | |||||
| Issued by FNMA and FHLMC | 1,317,848 | 1,345,463 | 1,718,057 | 1,888,546 | 2,038,331 | |||||
| Other residential mortgage-backed securities | ||||||||||
| Issued or guaranteed by FNMA, FHLMC, or GNMA | 108,192 | 115,140 | 126,138 | 144,158 | 164,506 | |||||
| Commercial mortgage-backed securities | ||||||||||
| Issued or guaranteed by FNMA, FHLMC, or GNMA | 132,207 | 132,241 | 141,970 | 142,598 | 400,488 | |||||
| Total securities available for sale | $ | 1,984,162 | $ | 2,024,082 | $ | 2,444,486 | $ | 2,644,364 | $ | 3,018,246 |
| SECURITIES HELD TO MATURITY | ||||||||||
| U.S. Treasury securities | $ | 28,486 | $ | 28,295 | $ | — | $ | — | $ | — |
| Obligations of states and political subdivisions | 4,507 | 4,510 | 4,512 | 5,320 | 7,324 | |||||
| Mortgage-backed securities | ||||||||||
| Residential mortgage pass-through securities | ||||||||||
| Guaranteed by GNMA | 4,336 | 4,442 | 4,527 | 4,624 | 4,831 | |||||
| Issued by FNMA and FHLMC | 497,854 | 509,311 | 179,375 | 185,554 | 192,373 | |||||
| Other residential mortgage-backed securities | ||||||||||
| Issued or guaranteed by FNMA, FHLMC, or GNMA | 179,334 | 188,201 | 197,923 | 210,479 | 224,012 | |||||
| Commercial mortgage-backed securities | ||||||||||
| Issued or guaranteed by FNMA, FHLMC, or GNMA | 759,821 | 759,755 | 770,648 | 731,777 | 179,058 | |||||
| Total securities held to maturity | $ | 1,474,338 | $ | 1,494,514 | $ | 1,156,985 | $ | 1,137,754 | $ | 607,598 |
During the fourth quarter of 2022, Trustmark reclassified $422.9 million of securities available for sale to securities held to maturity. The securities were transferred at fair value, which became the cost basis for the securities held to maturity. At the date of transfer, the net unrealized holding loss on the available for sale securities totaled approximately $57.1 million ($42.8 million, net of tax). The net unrealized holding loss will be amortized over the remaining life of the securities as a yield adjustment in a manner consistent with the amortization or accretion of the original purchase premium or discount on the associated security. There were no gains or losses recognized as a result of the transfer.
During the second quarter of 2022, Trustmark reclassified $343.1 million of securities available for sale to securities held to maturity. The securities were transferred at fair value, which became the cost basis for the securities held to maturity. At the date of transfer, the net unrealized holding loss on the available for sale securities totaled approximately $34.8 million ($26.1 million, net of tax). The net unrealized holding loss will be amortized over the remaining life of the securities as a yield adjustment in a manner consistent with the amortization or accretion of the original purchase premium or discount on the associated security. There were no gains or losses recognized as a result of the transfer.
At March 31, 2023, the net unamortized, unrealized loss included in accumulated other comprehensive income (loss) in the accompanying balance sheet for securities held to maturity transferred from securities available for sale totaled approximately $88.5 million ($66.3 million, net of tax).
Management continues to focus on asset quality as one of the strategic goals of the securities portfolio, which is evidenced by the investment of 99.8% of the portfolio in GSE-backed obligations and other Aaa rated securities as determined by Moody’s. None of the securities owned by Trustmark are collateralized by assets which are considered sub-prime. Furthermore, outside of stock ownership in the Federal Home Loan Bank of Dallas, Federal Home Loan Bank of Atlanta and Federal Reserve Bank, Trustmark does not hold any other equity investment in a GSE.
| TRUSTMARK CORPORATION AND SUBSIDIARIES |
|---|
| NOTES TO CONSOLIDATED FINANCIALS |
| March 31, 2023 |
| ($ in thousands) |
| (unaudited) |
Note 3 – Loan Composition
LHFI consisted of the following during the periods presented:
| LHFI BY TYPE | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Loans secured by real estate: | |||||||||||||||
| Construction, land development and other land loans | $ | 1,723,772 | $ | 1,719,542 | $ | 1,647,395 | $ | 1,440,058 | $ | 1,273,959 | |||||
| Secured by 1-4 family residential properties | 2,822,048 | 2,775,847 | 2,597,112 | 2,424,962 | 2,106,998 | ||||||||||
| Secured by nonfarm, nonresidential properties | 3,375,579 | 3,278,830 | 3,206,946 | 3,178,079 | 2,975,039 | ||||||||||
| Other real estate secured | 847,527 | 742,538 | 593,119 | 555,311 | 715,939 | ||||||||||
| Commercial and industrial loans | 1,882,360 | 1,821,259 | 1,689,532 | 1,551,001 | 1,495,060 | ||||||||||
| Consumer loans | 162,911 | 166,425 | 163,412 | 160,716 | 154,215 | ||||||||||
| State and other political subdivision loans | 1,193,727 | 1,223,863 | 1,188,703 | 1,110,795 | 1,215,023 | ||||||||||
| Other loans | 489,271 | 475,735 | 499,845 | 523,918 | 460,896 | ||||||||||
| LHFI | 12,497,195 | 12,204,039 | 11,586,064 | 10,944,840 | 10,397,129 | ||||||||||
| ACL LHFI | (122,239 | ) | (120,214 | ) | (115,050 | ) | (103,140 | ) | (98,734 | ) | |||||
| Net LHFI | $ | 12,374,956 | $ | 12,083,825 | $ | 11,471,014 | $ | 10,841,700 | $ | 10,298,395 |
The following table presents the LHFI composition by region and reflects each region’s diversified mix of loans:
| March 31, 2023 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| LHFI - COMPOSITION BY REGION | Total | Alabama | Florida | Mississippi <br>(Central and <br>Southern <br>Regions) | Tennessee <br>(Memphis, TN and <br>Northern MS<br>Regions) | Texas | ||||||
| Loans secured by real estate: | ||||||||||||
| Construction, land development and other land loans | $ | 1,723,772 | $ | 909,783 | $ | 74,625 | $ | 333,986 | $ | 25,741 | $ | 379,637 |
| Secured by 1-4 family residential properties | 2,822,048 | 135,830 | 52,395 | 2,522,951 | 81,540 | 29,332 | ||||||
| Secured by nonfarm, nonresidential properties | 3,375,579 | 901,613 | 204,533 | 1,462,426 | 161,899 | 645,108 | ||||||
| Other real estate secured | 847,527 | 264,170 | 1,985 | 334,758 | 7,018 | 239,596 | ||||||
| Commercial and industrial loans | 1,882,360 | 557,088 | 28,068 | 768,940 | 272,153 | 256,111 | ||||||
| Consumer loans | 162,911 | 23,109 | 9,401 | 99,817 | 19,172 | 11,412 | ||||||
| State and other political subdivision loans | 1,193,727 | 74,925 | 62,353 | 845,902 | 27,380 | 183,167 | ||||||
| Other loans | 489,271 | 101,083 | 9,165 | 262,889 | 53,156 | 62,978 | ||||||
| Loans | $ | 12,497,195 | $ | 2,967,601 | $ | 442,525 | $ | 6,631,669 | $ | 648,059 | $ | 1,807,341 |
| CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION | ||||||||||||
| Lots | $ | 66,925 | $ | 31,642 | $ | 10,281 | $ | 15,010 | $ | 2,220 | $ | 7,772 |
| Development | 142,477 | 74,820 | 1,379 | 30,507 | 6,773 | 28,998 | ||||||
| Unimproved land | 103,649 | 22,480 | 14,148 | 31,056 | 4,754 | 31,211 | ||||||
| 1-4 family construction | 369,163 | 212,970 | 19,447 | 91,177 | 11,994 | 33,575 | ||||||
| Other construction | 1,041,558 | 567,871 | 29,370 | 166,236 | — | 278,081 | ||||||
| Construction, land development and other land loans | $ | 1,723,772 | $ | 909,783 | $ | 74,625 | $ | 333,986 | $ | 25,741 | $ | 379,637 |
| TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||||
| --- | ||||||||||||
| NOTES TO CONSOLIDATED FINANCIALS | ||||||||||||
| March 31, 2023 | ||||||||||||
| ($ in thousands) | ||||||||||||
| (unaudited) |
Note 3 – Loan Composition (continued)
| March 31, 2023 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total | Alabama | Florida | Mississippi <br>(Central and <br>Southern <br>Regions) | Tennessee <br>(Memphis, TN and <br>Northern MS<br>Regions) | Texas | |||||||
| LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION | ||||||||||||
| Non-owner occupied: | ||||||||||||
| Retail | $ | 347,775 | $ | 124,551 | $ | 26,625 | $ | 113,299 | $ | 21,143 | $ | 62,157 |
| Office | 292,032 | 102,166 | 16,905 | 105,561 | 10,255 | 57,145 | ||||||
| Hotel/motel | 290,681 | 168,832 | 40,506 | 53,942 | 27,401 | — | ||||||
| Mini-storage | 154,053 | 28,261 | 2,058 | 104,063 | 481 | 19,190 | ||||||
| Industrial | 333,132 | 69,107 | 17,524 | 105,769 | 2,774 | 137,958 | ||||||
| Health care | 70,317 | 40,435 | — | 27,002 | 340 | 2,540 | ||||||
| Convenience stores | 33,226 | 7,318 | 592 | 14,709 | 582 | 10,025 | ||||||
| Nursing homes/senior living | 449,014 | 152,155 | — | 202,163 | 5,423 | 89,273 | ||||||
| Other | 125,798 | 40,814 | 9,840 | 53,248 | 8,696 | 13,200 | ||||||
| Total non-owner occupied loans | 2,096,028 | 733,639 | 114,050 | 779,756 | 77,095 | 391,488 | ||||||
| Owner-occupied: | ||||||||||||
| Office | 167,317 | 43,797 | 36,759 | 49,046 | 10,104 | 27,611 | ||||||
| Churches | 68,028 | 15,531 | 4,592 | 38,625 | 6,697 | 2,583 | ||||||
| Industrial warehouses | 168,429 | 17,468 | 4,644 | 43,359 | 16,083 | 86,875 | ||||||
| Health care | 144,201 | 11,397 | 6,272 | 105,568 | 2,323 | 18,641 | ||||||
| Convenience stores | 133,875 | 12,194 | 21,451 | 63,187 | 235 | 36,808 | ||||||
| Retail | 94,435 | 11,194 | 9,588 | 44,745 | 18,987 | 9,921 | ||||||
| Restaurants | 55,190 | 4,247 | 4,105 | 31,642 | 11,931 | 3,265 | ||||||
| Auto dealerships | 47,930 | 6,470 | 222 | 23,688 | 17,550 | — | ||||||
| Nursing homes/senior living | 257,998 | 32,615 | — | 199,183 | — | 26,200 | ||||||
| Other | 142,148 | 13,061 | 2,850 | 83,627 | 894 | 41,716 | ||||||
| Total owner-occupied loans | 1,279,551 | 167,974 | 90,483 | 682,670 | 84,804 | 253,620 | ||||||
| Loans secured by nonfarm, nonresidential properties | $ | 3,375,579 | $ | 901,613 | $ | 204,533 | $ | 1,462,426 | $ | 161,899 | $ | 645,108 |
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 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | |||||||||||
| Securities – taxable | 1.85 | % | 1.71 | % | 1.62 | % | 1.50 | % | 1.37 | % | |||||
| Securities – nontaxable | 4.00 | % | 3.95 | % | 3.97 | % | 4.00 | % | 3.97 | % | |||||
| Securities – total | 1.86 | % | 1.72 | % | 1.63 | % | 1.50 | % | 1.38 | % | |||||
| PPP loans | — | 12.39 | % | 7.51 | % | 4.16 | % | 2.35 | % | ||||||
| Loans - LHFI & LHFS | 5.79 | % | 5.27 | % | 4.48 | % | 3.79 | % | 3.58 | % | |||||
| Loans - total | 5.79 | % | 5.27 | % | 4.48 | % | 3.79 | % | 3.58 | % | |||||
| Fed funds sold & reverse repurchases | 5.11 | % | 4.29 | % | 3.51 | % | 3.65 | % | — | ||||||
| Other earning assets | 4.09 | % | 3.76 | % | 1.82 | % | 0.78 | % | 0.18 | % | |||||
| Total earning assets | 4.87 | % | 4.40 | % | 3.71 | % | 3.01 | % | 2.69 | % | |||||
| Interest-bearing deposits | 1.53 | % | 0.71 | % | 0.20 | % | 0.11 | % | 0.11 | % | |||||
| Fed funds purchased & repurchases | 4.49 | % | 3.44 | % | 1.95 | % | 0.24 | % | 0.13 | % | |||||
| Other borrowings | 4.87 | % | 3.73 | % | 2.89 | % | 2.52 | % | 2.26 | % | |||||
| Total interest-bearing liabilities | 1.98 | % | 1.03 | % | 0.31 | % | 0.17 | % | 0.16 | % | |||||
| Total Deposits | 1.13 | % | 0.51 | % | 0.14 | % | 0.07 | % | 0.07 | % | |||||
| Net interest margin | 3.39 | % | 3.66 | % | 3.50 | % | 2.90 | % | 2.58 | % | |||||
| Net interest margin excluding PPP loans <br> and the FRB balance | 3.36 | % | 3.66 | % | 3.53 | % | 3.06 | % | 2.88 | % | |||||
| TRUSTMARK CORPORATION AND SUBSIDIARIES | |||||||||||||||
| --- | |||||||||||||||
| NOTES TO CONSOLIDATED FINANCIALS | |||||||||||||||
| March 31, 2023 | |||||||||||||||
| ($ in thousands) | |||||||||||||||
| (unaudited) |
Note 4 – Yields on Earning Assets and Interest-Bearing Liabilities (continued)
Reflected in the table above are yields on earning assets and liabilities, along with the net interest margin which equals reported net interest income-FTE, annualized, as a percent of average earning assets. In addition, the table includes net interest margin excluding PPP loans and the balance held at the Federal Reserve Bank of Atlanta (FRB), which equals reported net interest income-FTE excluding interest income on PPP loans and the FRB balance, annualized, as a percent of average earning assets excluding average PPP loans and the FRB balance.
At March 31, 2023 and December 31, 2022, the average FRB balance totaled $555.5 million and $299.2 million, respectively, and is included in other earning assets in the accompanying average consolidated balance sheets.
The net interest margin excluding PPP loans and the FRB balance decreased 30 basis points when compared to the fourth quarter of 2022, totaling 3.36% for the first quarter of 2023. The decrease in the net interest margin excluding PPP loans and the FRB balance was due to increased costs of interest-bearing deposits, which was partially offset by increases in the yields on the loans held for investment and held for sale portfolio and the securities portfolio.
Note 5 – Mortgage Banking
Trustmark utilizes a portfolio of exchange-traded derivative instruments, such as Treasury note futures contracts and option contracts, to achieve a fair value return that offsets the changes in fair value of mortgage servicing rights (MSR) attributable to interest rates. These transactions are considered freestanding derivatives that do not otherwise qualify for hedge accounting under generally accepted accounting principles (GAAP). Changes in the fair value of these exchange-traded derivative instruments, including administrative costs, are recorded in noninterest income in mortgage banking, net and are offset by the changes in the fair value of the MSR. The MSR fair value represents the present value of future cash flows, which among other things includes decay and the effect of changes in interest rates. Ineffectiveness of hedging the MSR fair value is measured by comparing the change in value of hedge instruments to the change in the fair value of the MSR asset attributable to changes in interest rates and other market driven changes in valuation inputs and assumptions. The impact of this strategy resulted in a net negative ineffectiveness of $1.8 million during the first quarter of 2023.
The following table illustrates the components of mortgage banking revenues included in noninterest income in the accompanying income statements:
| Quarter Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | |||||||||||
| Mortgage servicing income, net | $ | 6,785 | $ | 6,636 | $ | 6,669 | $ | 6,557 | $ | 6,429 | |||||
| Change in fair value-MSR from runoff | (1,145 | ) | (2,981 | ) | (3,462 | ) | (3,806 | ) | (3,785 | ) | |||||
| Gain on sales of loans, net | 3,797 | 3,328 | 4,597 | 6,030 | 6,223 | ||||||||||
| Mortgage banking income before hedge <br> ineffectiveness | 9,437 | 6,983 | 7,804 | 8,781 | 8,867 | ||||||||||
| Change in fair value-MSR from market changes | (3,972 | ) | (3,348 | ) | 10,770 | 8,739 | 22,020 | ||||||||
| Change in fair value of derivatives | 2,174 | (227 | ) | (11,698 | ) | (9,371 | ) | (21,014 | ) | ||||||
| Net positive (negative) hedge ineffectiveness | (1,798 | ) | (3,575 | ) | (928 | ) | (632 | ) | 1,006 | ||||||
| Mortgage banking, net | $ | 7,639 | $ | 3,408 | $ | 6,876 | $ | 8,149 | $ | 9,873 | |||||
| TRUSTMARK CORPORATION AND SUBSIDIARIES | |||||||||||||||
| --- | |||||||||||||||
| NOTES TO CONSOLIDATED FINANCIALS | |||||||||||||||
| March 31, 2023 | |||||||||||||||
| ($ in thousands) | |||||||||||||||
| (unaudited) |
Note 6 – Other Noninterest Income and Expense
Other noninterest income consisted of the following for the periods presented:
| Quarter Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | |||||||||||
| Partnership amortization for tax credit purposes | $ | (1,961 | ) | $ | (1,869 | ) | $ | (1,531 | ) | $ | (1,475 | ) | $ | (1,336 | ) |
| Increase in life insurance cash surrender value | 1,693 | 1,687 | 1,676 | 1,683 | 1,627 | ||||||||||
| Other miscellaneous income | 2,782 | 2,493 | 2,273 | 1,699 | 2,915 | ||||||||||
| Total other, net | $ | 2,514 | $ | 2,311 | $ | 2,418 | $ | 1,907 | $ | 3,206 |
Trustmark invests in partnerships that provide income tax credits on a Federal and/or State basis (i.e., new market tax credits, low-income housing tax credits and historical tax credits). The income tax credits related to these partnerships are utilized as specifically allowed by income tax law and are recorded as a reduction in income tax expense.
Other noninterest expense consisted of the following for the periods presented:
| Quarter Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | ||||||
| Loan expense (1) | $ | 2,538 | $ | 2,908 | $ | 2,866 | $ | 2,947 | $ | 3,528 |
| Amortization of intangibles | 288 | 312 | 312 | 328 | 482 | |||||
| FDIC assessment expense | 2,370 | 2,130 | 1,945 | 1,810 | 1,500 | |||||
| Other real estate expense, net | 172 | 18 | 497 | 623 | 35 | |||||
| Other miscellaneous expense | 9,443 | 9,767 | 8,117 | 7,782 | 7,935 | |||||
| Total other expense (1) | $ | 14,811 | $ | 15,135 | $ | 13,737 | $ | 13,490 | $ | 13,480 |
(1) During the first quarter of 2023, Trustmark reclassified its debit card transaction fees from other expense to services and fees. Prior periods have been reclassified accordingly.
Note 7 – Non-GAAP Financial Measures
In addition to capital ratios defined by GAAP and banking regulators, Trustmark utilizes various tangible common equity measures when evaluating capital utilization and adequacy. Tangible common equity, as defined by Trustmark, represents common equity less goodwill and identifiable intangible assets. Trustmark’s Common Equity Tier 1 capital includes common stock, capital surplus and retained earnings, and is reduced by goodwill and other intangible assets, net of associated net deferred tax liabilities as well as disallowed deferred tax assets and threshold deductions as applicable.
Trustmark believes these measures are important because they reflect the level of capital available to withstand unexpected market conditions. Additionally, presentation of these measures allows readers to compare certain aspects of Trustmark’s capitalization to other organizations. These ratios differ from capital measures defined by banking regulators principally in that the numerator excludes shareholders’ equity associated with preferred securities, the nature and extent of which varies across organizations. In Management’s experience, many stock analysts use tangible common equity measures in conjunction with more traditional bank capital ratios to compare capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase accounting method in accounting for mergers and acquisitions.
These calculations are intended to complement the capital ratios defined by GAAP and banking regulators. Because GAAP does not include these capital ratio measures, Trustmark believes there are no comparable GAAP financial measures to these tangible common equity ratios. Despite the importance of these measures to Trustmark, there are no standardized definitions for them and, as a result, Trustmark’s calculations may not be comparable with other organizations. Also, there may be limits in the usefulness of these measures to investors. As a result, Trustmark encourages readers to consider its audited consolidated financial statements and the notes related thereto in their entirety and not to rely on any single financial measure.
| TRUSTMARK CORPORATION AND SUBSIDIARIES |
|---|
| NOTES TO CONSOLIDATED FINANCIALS |
| March 31, 2023 |
| ($ in thousands except per share data) |
| (unaudited) |
Note 7 – Non-GAAP Financial Measures (continued)
| Quarter Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | ||||||||||||
| TANGIBLE EQUITY | ||||||||||||||||
| AVERAGE BALANCES | ||||||||||||||||
| Total shareholders' equity | $ | 1,523,828 | $ | 1,493,291 | $ | 1,606,469 | $ | 1,608,309 | $ | 1,713,752 | ||||||
| Less: Goodwill | (384,237 | ) | (384,237 | ) | (384,237 | ) | (384,237 | ) | (384,237 | ) | ||||||
| Identifiable intangible assets | (3,523 | ) | (3,816 | ) | (4,131 | ) | (4,436 | ) | (4,879 | ) | ||||||
| Total average tangible equity | $ | 1,136,068 | $ | 1,105,238 | $ | 1,218,101 | $ | 1,219,636 | $ | 1,324,636 | ||||||
| PERIOD END BALANCES | ||||||||||||||||
| Total shareholders' equity | $ | 1,562,099 | $ | 1,492,268 | $ | 1,508,945 | $ | 1,586,696 | $ | 1,631,382 | ||||||
| Less: Goodwill | (384,237 | ) | (384,237 | ) | (384,237 | ) | (384,237 | ) | (384,237 | ) | ||||||
| Identifiable intangible assets | (3,352 | ) | (3,640 | ) | (3,952 | ) | (4,264 | ) | (4,591 | ) | ||||||
| Total tangible equity | (a) | $ | 1,174,510 | $ | 1,104,391 | $ | 1,120,756 | $ | 1,198,195 | $ | 1,242,554 | |||||
| TANGIBLE ASSETS | ||||||||||||||||
| Total assets | $ | 18,877,178 | $ | 18,015,478 | $ | 17,190,634 | $ | 16,951,510 | $ | 17,441,551 | ||||||
| Less: Goodwill | (384,237 | ) | (384,237 | ) | (384,237 | ) | (384,237 | ) | (384,237 | ) | ||||||
| Identifiable intangible assets | (3,352 | ) | (3,640 | ) | (3,952 | ) | (4,264 | ) | (4,591 | ) | ||||||
| Total tangible assets | (b) | $ | 18,489,589 | $ | 17,627,601 | $ | 16,802,445 | $ | 16,563,009 | $ | 17,052,723 | |||||
| Risk-weighted assets | (c) | $ | 14,793,893 | $ | 14,521,078 | $ | 13,748,819 | $ | 13,076,981 | $ | 12,691,545 | |||||
| NET INCOME (LOSS) ADJUSTED FOR INTANGIBLE AMORTIZATION | ||||||||||||||||
| Net income (loss) | $ | 50,300 | $ | (34,063 | ) | $ | 42,455 | $ | 34,284 | $ | 29,211 | |||||
| Plus: Intangible amortization net of tax | 216 | 234 | 234 | 246 | 362 | |||||||||||
| Net income (loss) adjusted for intangible amortization | $ | 50,516 | $ | (33,829 | ) | $ | 42,689 | $ | 34,530 | $ | 29,573 | |||||
| Period end common shares outstanding | (d) | 61,048,516 | 60,977,686 | 60,953,864 | 61,201,123 | 61,463,392 | ||||||||||
| TANGIBLE COMMON EQUITY MEASUREMENTS | ||||||||||||||||
| Return on average tangible equity (1) | 18.03 | % | -12.14 | % | 13.90 | % | 11.36 | % | 9.05 | % | ||||||
| Tangible equity/tangible assets | (a)/(b) | 6.35 | % | 6.27 | % | 6.67 | % | 7.23 | % | 7.29 | % | |||||
| Tangible equity/risk-weighted assets | (a)/(c) | 7.94 | % | 7.61 | % | 8.15 | % | 9.16 | % | 9.79 | % | |||||
| Tangible book value | (a)/(d)*1,000 | $ | 19.24 | $ | 18.11 | $ | 18.39 | $ | 19.58 | $ | 20.22 | |||||
| COMMON EQUITY TIER 1 CAPITAL (CET1) | ||||||||||||||||
| Total shareholders' equity | $ | 1,562,099 | $ | 1,492,268 | $ | 1,508,945 | $ | 1,586,696 | $ | 1,631,382 | ||||||
| CECL transition adjustment | 13,000 | 19,500 | 19,500 | 19,500 | 19,500 | |||||||||||
| AOCI-related adjustments | 242,381 | 275,403 | 306,412 | 207,142 | 148,656 | |||||||||||
| CET1 adjustments and deductions: | ||||||||||||||||
| Goodwill net of associated deferred <br> tax liabilities (DTLs) | (370,234 | ) | (370,241 | ) | (370,217 | ) | (370,229 | ) | (370,240 | ) | ||||||
| Other adjustments and deductions <br> for CET1 (2) | (3,275 | ) | (3,258 | ) | (3,506 | ) | (3,757 | ) | (4,015 | ) | ||||||
| CET1 capital | (e) | 1,443,971 | 1,413,672 | 1,461,134 | 1,439,352 | 1,425,283 | ||||||||||
| Additional tier 1 capital instruments <br> plus related surplus | 60,000 | 60,000 | 60,000 | 60,000 | 60,000 | |||||||||||
| Tier 1 capital | $ | 1,503,971 | $ | 1,473,672 | $ | 1,521,134 | $ | 1,499,352 | $ | 1,485,283 | ||||||
| Common equity tier 1 capital ratio | (e)/(c) | 9.76 | % | 9.74 | % | 10.63 | % | 11.01 | % | 11.23 | % |
(1) Calculation = ((net income (loss) adjusted for intangible amortization/number of days in period)*number of days in year)/total average tangible equity.
(2) Includes other intangible assets, net of DTLs, disallowed deferred tax assets (DTAs), threshold deductions and transition adjustments, as applicable.
| TRUSTMARK CORPORATION AND SUBSIDIARIES |
|---|
| NOTES TO CONSOLIDATED FINANCIALS |
| March 31, 2023 |
| ($ in thousands) |
| (unaudited) |
Note 7 – Non-GAAP Financial Measures (continued)
Trustmark discloses certain non-GAAP financial measures because Management uses these measures for business planning purposes, including to manage Trustmark’s business against internal projected results of operations and to measure Trustmark’s performance. Trustmark views these as measures of our core operating business, which exclude the impact of the items detailed below, as these items are generally not operational in nature. These non-GAAP financial measures also provide another basis for comparing period-to-period results as presented in the accompanying selected financial data table and the audited consolidated financial statements by excluding potential differences caused by non-operational and unusual or non-recurring items. Readers are cautioned that these adjustments are not permitted under GAAP. Trustmark encourages readers to consider its consolidated financial statements and the notes related thereto in their entirety, and not to rely on any single financial measure.
The following table presents pre-provision net revenue (PPNR) during the periods presented:
| Quarter Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | |||||||||
| Net interest income (GAAP) | $ | 137,595 | $ | 146,583 | $ | 136,105 | $ | 112,676 | $ | 99,344 | |||
| Noninterest income (GAAP) | 51,377 | 45,170 | 52,606 | 53,253 | 54,115 | ||||||||
| Pre-provision revenue | (a) | $ | 188,972 | $ | 191,753 | $ | 188,711 | $ | 165,929 | $ | 153,459 | ||
| Noninterest expense (GAAP) | $ | 128,327 | $ | 231,229 | $ | 126,698 | $ | 123,767 | $ | 121,519 | |||
| Less: | Litigation settlement expense | — | (100,750 | ) | — | — | — | ||||||
| Adjusted noninterest expense - PPNR (Non-GAAP) | (b) | $ | 128,327 | $ | 130,479 | $ | 126,698 | $ | 123,767 | $ | 121,519 | ||
| PPNR (Non-GAAP) | (a)-(b) | $ | 60,645 | $ | 61,274 | $ | 62,013 | $ | 42,162 | $ | 31,940 |
The following table presents Trustmark’s calculation of its efficiency ratio for the periods presented:
| Quarter Ended | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | |||||||||||||
| Total noninterest expense (GAAP) | $ | 128,327 | $ | 231,229 | $ | 126,698 | $ | 123,767 | $ | 121,519 | |||||||
| Less: | Other real estate expense, net | (172 | ) | (18 | ) | (497 | ) | (623 | ) | (35 | ) | ||||||
| Amortization of intangibles | (288 | ) | (312 | ) | (312 | ) | (328 | ) | (482 | ) | |||||||
| Charitable contributions resulting in <br> state tax credits | (325 | ) | (375 | ) | (375 | ) | (375 | ) | (375 | ) | |||||||
| Litigation settlement expense | — | (100,750 | ) | — | — | — | |||||||||||
| Adjusted noninterest expense (Non-GAAP) | (c) | $ | 127,542 | $ | 129,774 | $ | 125,514 | $ | 122,441 | $ | 120,627 | ||||||
| Net interest income (GAAP) | $ | 137,595 | $ | 146,583 | $ | 136,105 | $ | 112,676 | $ | 99,344 | |||||||
| Add: | Tax equivalent adjustment | 3,477 | 3,451 | 2,975 | 2,916 | 3,003 | |||||||||||
| Net interest income-FTE (Non-GAAP) | (a) | $ | 141,072 | $ | 150,034 | $ | 139,080 | $ | 115,592 | $ | 102,347 | ||||||
| Noninterest income (GAAP) | $ | 51,377 | $ | 45,170 | $ | 52,606 | $ | 53,253 | $ | 54,115 | |||||||
| Add: | Partnership amortization for tax credit purposes | 1,961 | 1,869 | 1,531 | 1,475 | 1,336 | |||||||||||
| Adjusted noninterest income (Non-GAAP) | (b) | $ | 53,338 | $ | 47,039 | $ | 54,137 | $ | 54,728 | $ | 55,451 | ||||||
| Adjusted revenue (Non-GAAP) | (a)+(b) | $ | 194,410 | $ | 197,073 | $ | 193,217 | $ | 170,320 | $ | 157,798 | ||||||
| Efficiency ratio (Non-GAAP) | (c)/((a)+(b)) | 65.60 | % | 65.85 | % | 64.96 | % | 71.89 | % | 76.44 | % |
13 (1)
18