Performance Reflects Increased Earnings, Enhanced Profitability, and Strengthened Capital Flexibility
JACKSON, Miss., October 22, 2024–(BUSINESS WIRE)–Trustmark Corporation (NASDAQGS:TRMK) reported net income of $51.3 million in the third quarter of 2024, representing diluted earnings per share of $0.84. In the second quarter of 2024, Trustmark reported net income of $73.8 million, representing diluted earnings per share of $1.20 and net income from adjusted continuing operations(1) of $40.5 million, or $0.66 per diluted share. Net income from adjusted continuing operations(1) increased $10.8 million, or 26.7%, linked-quarter.
Financial results in the second quarter of 2024, which included the sale of Fisher Brown Bottrell Insurance, Inc. (FBBI), consisted of both continuing operations and discontinued operations. The discontinued operations included the financial results of FBBI prior to the sale as well as the gain on sale in the second quarter. The discontinued operations results are presented as a single line item below income from continuing operations and as separate lines in the balance sheet in the accompanying tables for all periods presented. Financial results from adjusted continuing operations(1) exclude significant non-routine transactions.
The Board of Directors declared a quarterly cash dividend of $0.23 per share payable December 15, 2024, to shareholders of record on December 1, 2024.
Duane A. Dewey, President and CEO, stated, “Trustmark’s third quarter results reflect significant achievement across the organization. Profitability meaningfully increased as evidenced by the 26.7% growth in net income from adjusted continuing operations(1) and a 282 basis point improvement in the efficiency ratio. The restructuring of the investment securities portfolio in the second quarter was a major contributor to the 9.5% increase in net interest income in the third quarter. These accomplishments are the result of focused efforts to enhance Trustmark’s long-term performance and competitiveness. We continue to implement technology and streamline processes to enhance our ability to grow and serve customers. Trustmark is well-positioned to compete in changing economic conditions and create long-term value for our shareholders.”
Balance Sheet Management
Loans HFI totaled $13.1 billion, down 0.4% from the prior quarter and up 2.3% year-over-year
Deposits totaled $15.2 billion, down 1.4% from the previous quarter and up 0.9% year-over-year
Enhanced strong capital position with CET1 ratio of 11.30% and total risk-based capital ratio of 13.71%
Loans HFI totaled $13.1 billion at September 30, 2024, reflecting a decrease of $55.3 million, or 0.4%, linked-quarter and an increase of $289.9 million, or 2.3%, year-over-year. The linked-quarter change reflected decreases in commercial and industrial loans, state and other political subdivision loans, and commercial real estate loans offset in part by increases in other real estate secured loans, other loans and leases (equipment finance), and 1-4 family mortgage loans. Trustmark’s loan portfolio continues to be well-diversified by loan type and geography.
Deposits totaled $15.2 billion at September 30, 2024, down $222.0 million, or 1.4%, from the prior quarter and an increase of $139.0 million, or 0.9%, year-over-year. Excluding targeted reductions in public deposits of $330.1 million and brokered deposits of $199.6 million, deposits increased $307.7 million, or 2.1%, linked-quarter. Trustmark continues to maintain a strong liquidity position as loans HFI represented 86.0% of total deposits at September 30, 2024. Noninterest-bearing deposits represented 20.6% of total deposits at September 30, 2024, compared to 20.4% of total deposits at June 30, 2024. The cost of interest-bearing deposits increased 6 basis points to 2.81% for the third quarter, while the cost of total deposits was 2.22%, up 4 basis points from the prior quarter. The total cost of interest-bearing liabilities was 2.94% for the third quarter, down 1 basis point linked-quarter.
As previously announced, Trustmark’s Board of Directors authorized a stock repurchase program effective January 1, 2024, under which $50.0 million of Trustmark’s outstanding shares may be acquired through December 31, 2024. As of September 30, 2024, Trustmark had not repurchased any of its outstanding common shares under this program. At September 30, 2024, Trustmark’s tangible equity to tangible assets ratio was 9.07%, up 55 basis points from the prior quarter, while the total risk-based capital ratio was 13.71%, up 42 basis points from the prior quarter. Tangible book value per share was $26.88 at September 30, 2024, an increase of 6.5% from the prior quarter and 32.9% from the prior year.
Credit Quality
Net charge-offs totaled $4.7 million in the third quarter, representing 0.14% of average loans
Net provision for credit losses totaled $6.5 million for the third quarter
Allowance for credit losses (ACL) represented 1.21% of loans HFI and 497.27% of nonaccrual loans, excluding individually evaluated loans at September 30, 2024
Nonaccrual loans totaled $73.8 million at September 30, 2024, reflecting an increase of $29.5 million from the prior quarter and a decline of $17.1 million year-over-year. Other real estate totaled $3.9 million, reflecting a decrease of $2.7 million from the prior quarter and $1.6 million from the prior year. Collectively, nonperforming assets totaled $77.7 million at September 30, 2024, up $26.9 million from the prior quarter and down $18.6 million from the prior year. Nonperforming assets represented 0.58% of loans HFI and loans held for sale at September 30, 2024.
The net provision for credit losses totaled $6.5 million in the third quarter compared to $19.7 million in the second quarter (which included a $8.6 million provision related to the Mortgage Loan Sale) and $8.4 million in the third quarter of 2023. The provision for credit losses for loans HFI was $7.9 million in the third quarter and was primarily attributable to specific reserves for individually analyzed credits and net adjustments to the qualitative factors. The provision for credit losses for off-balance sheet credit exposures was a negative $1.4 million, primarily driven by decreases in unfunded commitments.
Allocation of Trustmark’s $157.9 million ACL on loans HFI represented 1.08% of commercial loans and 1.64% of consumer and home mortgage loans, resulting in an ACL to total loans HFI of 1.21% at September 30, 2024. Management believes the level of the ACL is commensurate with the credit losses currently expected in the loan portfolio.
Revenue Generation
Total revenue expanded to $192.3 million in the third quarter
Net interest income (FTE) totaled $158.0 million in the third quarter, up 9.5% linked-quarter
Noninterest income totaled $37.6 million in the third quarter
Total revenue in the third quarter was $192.3 million; in the second quarter total revenue was negative $0.3 million while revenue from adjusted continuing operations(1) was $179.3 million; total revenue from adjusted continuing operations(1) increased $13.0 million, or 7.3%, linked-quarter.
Net interest income (FTE) in the third quarter totaled $158.0 million, resulting in a net interest margin of 3.69%, up 31 basis points from the prior quarter. The increase in the net interest margin was primarily due to increased yields on the securities portfolio, while the loans HFI and held for sale portfolio remained relatively flat, offset by the increase in the cost of interest-bearing deposits.
Noninterest income in the third quarter totaled $37.6 million; in the second quarter noninterest income was a negative $141.3 million while noninterest income from adjusted continuing operations(1) totaled $38.2 million. Noninterest income from adjusted continuing operations(1) decreased $0.7 million, or 1.8%, from the prior quarter and increased $0.6 million, or 1.7% year-over-year. Service charges on deposit accounts totaled $11.3 million in the third quarter, an increase of $0.3 million, or 3.2% from the prior quarter and $0.2 million, or 1.8%, year-over-year. Bank card and other fees totaled $7.9 million in the third quarter, down $1.3 million linked-quarter and $0.3 million year-over-year. The linked-quarter change reflects reduced customer derivative revenue and seasonal declines in miscellaneous other revenue. Other, net totaled $3.0 million in the third quarter. Excluding the Visa C shares positive fair value adjustment of $8.1 million and the non-credit related loss on sale of 1-4 family mortgage loans of $4.8 million in the second quarter, other, net declined $1.3 million linked-quarter.
Mortgage loan production in the third quarter totaled $392.1 million, an increase of 3.3% from the prior quarter and 0.6% year-over-year. Mortgage banking revenue totaled $6.1 million in the third quarter, an increase of $1.9 million linked-quarter and a decrease of $0.3 million year-over-year. The linked-quarter increase was principally attributable to decreased net negative hedge ineffectiveness, which was offset in part by lower gains on sale of mortgage loans.
Wealth management revenue in the third quarter totaled $9.3 million, a decrease of $0.4 million, or 4.2%, from the prior quarter and an increase of $0.5 million, or 5.9%, year-over-year. The linked-quarter change reflected a seasonal decline in trust management and investment services revenue while the year-over-year increase reflected expanded brokerage revenue.
Noninterest Expense
Noninterest expense increased $4.9 million, or 4.2%, linked-quarter
Salaries and employee benefits expense increased $1.9 million, or 2.9%, linked quarter, reflecting annual merit increases, annual incentive accruals, and commissions
Other real estate expense, net increased $2.1 million, all of which relates to the establishment of a reserve for a single property
Noninterest expense in the third quarter totaled $123.3 million, an increase of $4.9 million, or 4.2%, when compared to the prior quarter and a year-over-year decline of $0.5 million, or 0.4%, excluding the litigation settlement expense incurred in the third quarter of 2023. Salaries and employee benefits expense increased $1.9 million, or 2.9%, linked-quarter principally due to annual merit increases effective July 1, mortgage banking commissions and annual incentive-based accruals as a result of strong operating performance. Salaries and employee benefits expense in the third quarter declined $0.7 million, or 1.0%, from levels one year earlier. Other expense totaled $17.3 million in the third quarter, an increase of $2.1 million linked-quarter and $2.3 million year-over-year. The linked-quarter and year-over-year changes are attributable to an increase in other real estate expense, net related to the establishment of a reserve for a single property under contract to sell in the fourth quarter of 2024.
(1) Please refer to Consolidated Financial Information, Note 1 – Significant Non-Routine Transactions and Note 7 – Non-GAAP Financial Measures.
Significant Non-Routine Transactions in the Second Quarter
Completed sale of FBBI, producing a gain on sale of $228.3 million ($171.2 million, net of taxes)
Restructured investment securities portfolio; sold available for sale securities of $1.6 billion with an average yield of 1.36%, which generated a loss of $182.8 million ($137.1 million, net of taxes); purchased $1.4 billion of available for sale securities with an average yield of 4.85%
Sold a portfolio of 1-4 family mortgage loans that were three payments delinquent and/or nonaccrual at time of selection totaling $56.2 million (Mortgage Loan Sale) which generated a loss of $13.4 million ($10.1 million, net of taxes); sale drove a $54.1 million reduction in nonperforming loans
Exchanged Visa Class B-1 shares for Visa Class B-2 shares and Visa Class C common stock; Visa Class C stock exchange resulted in a gain of $8.1 million ($6.0 million, net of taxes)
Additional Information
As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, October 23, 2024, at 8:30 a.m. Central Time to discuss the Corporation’s financial results. Interested parties may listen to the conference call by dialing (877) 317-3051 or by clicking on the link provided under the Investor Relations section of our website at www.trustmark.com. A replay of the conference call will also be available through Wednesday, November 6, 2024, in archived format at the same web address or by calling (877) 344-7529, passcode 9091375.
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 or financial condition. Should one or more of these risks materialize, or should any such underlying assumptions prove to be significantly different, actual results may vary significantly from those anticipated, estimated, projected or expected.
Risks that could cause actual results to differ materially from current expectations of Management include, but are not limited to, actions by the Board of Governors of the Federal Reserve System (FRB) that impact the level of market interest rates, local, state, national and international economic and market conditions, conditions in the housing and real estate markets in the regions in which Trustmark operates and the extent and duration of the current volatility in the credit and financial markets, changes in the level of nonperforming assets and charge-offs, an increase in unemployment levels and slowdowns in economic growth, changes in our ability to measure the fair value of assets in our portfolio, changes in the level and/or volatility of market interest rates, the impacts related to or resulting from bank failures and other economic and industry volatility, including potential increased regulatory requirements, the demand for the products and services we offer, potential unexpected adverse outcomes in pending litigation matters, our ability to attract and retain noninterest-bearing deposits and other low-cost funds, competition in loan and deposit pricing, as well as the entry of new competitors into our markets through de novo expansion and acquisitions, economic conditions, changes in accounting standards and practices, including changes in the interpretation of existing standards, that affect our consolidated financial statements, changes in consumer spending, borrowings and savings habits, technological changes, changes in the financial performance or condition of our borrowers, greater than expected costs or difficulties related to the integration of acquisitions or new products and lines of business, cyber-attacks and other breaches which could affect our information system security, natural disasters, environmental disasters, pandemics or other health crises, acts of war or terrorism, and other risks described in our filings with the SEC.
Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Except as required by law, we undertake no obligation to update or revise any of this information, whether as the result of new information, future events or developments or otherwise.
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2024
($ in thousands)
(unaudited)
Linked Quarter
Year over Year
QUARTERLY AVERAGE BALANCES
9/30/2024
6/30/2024
9/30/2023
$ Change
% Change
$ Change
% Change
Securities AFS-taxable
$
1,658,999
$
1,866,227
$
2,049,006
$
(207,228
)
-11.1
%
$
(390,007
)
-19.0
%
Securities AFS-nontaxable
—
—
4,779
—
n/m
(4,779
)
-100.0
%
Securities HTM-taxable
1,368,943
1,421,246
1,445,895
(52,303
)
-3.7
%
(76,952
)
-5.3
%
Securities HTM-nontaxable
—
112
907
(112
)
-100.0
%
(907
)
-100.0
%
Total securities
3,027,942
3,287,585
3,500,587
(259,643
)
-7.9
%
(472,645
)
-13.5
%
Loans (includes loans held for sale)
13,379,658
13,309,127
12,926,942
70,531
0.5
%
452,716
3.5
%
Fed funds sold and reverse repurchases
653
110
230
543
n/m
423
n/m
Other earning assets
607,275
592,625
682,644
14,650
2.5
%
(75,369
)
-11.0
%
Total earning assets
17,015,528
17,189,447
17,110,403
(173,919
)
-1.0
%
(94,875
)
-0.6
%
Allowance for credit losses (ACL), loans held
for investment (LHFI)
(154,476
)
(143,245
)
(127,915
)
(11,231
)
-7.8
%
(26,561
)
-20.8
%
Other assets
1,646,241
1,740,307
1,721,310
(94,066
)
-5.4
%
(75,069
)
-4.4
%
Total assets
$
18,507,293
$
18,786,509
$
18,703,798
$
(279,216
)
-1.5
%
$
(196,505
)
-1.1
%
Interest-bearing demand deposits
$
5,382,346
$
5,222,369
$
4,875,714
$
159,977
3.1
%
$
506,632
10.4
%
Savings deposits
3,411,961
3,653,966
3,642,158
(242,005
)
-6.6
%
(230,197
)
-6.3
%
Time deposits
3,393,216
3,346,046
3,075,224
47,170
1.4
%
317,992
10.3
%
Total interest-bearing deposits
12,187,523
12,222,381
11,593,096
(34,858
)
-0.3
%
594,427
5.1
%
Fed funds purchased and repurchases
375,559
434,760
414,696
(59,201
)
-13.6
%
(39,137
)
-9.4
%
Other borrowings
339,417
534,350
912,151
(194,933
)
-36.5
%
(572,734
)
-62.8
%
Subordinated notes
123,611
123,556
123,391
55
0.0
%
220
0.2
%
Junior subordinated debt securities
61,856
61,856
61,856
—
0.0
%
—
0.0
%
Total interest-bearing liabilities
13,087,966
13,376,903
13,105,190
(288,937
)
-2.2
%
(17,224
)
-0.1
%
Noninterest-bearing deposits
3,221,516
3,183,524
3,429,815
37,992
1.2
%
(208,299
)
-6.1
%
Other liabilities
274,563
498,593
585,908
(224,030
)
-44.9
%
(311,345
)
-53.1
%
Total liabilities
16,584,045
17,059,020
17,120,913
(474,975
)
-2.8
%
(536,868
)
-3.1
%
Shareholders’ equity
1,923,248
1,727,489
1,582,885
195,759
11.3
%
340,363
21.5
%
Total liabilities and equity
$
18,507,293
$
18,786,509
$
18,703,798
$
(279,216
)
-1.5
%
$
(196,505
)
-1.1
%
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, 2024
($ in thousands)
(unaudited)
Linked Quarter
Year over Year
PERIOD END BALANCES
9/30/2024
6/30/2024
9/30/2023
$ Change
% Change
$ Change
% Change
Cash and due from banks
$
805,436
$
822,141
$
750,292
$
(16,705
)
-2.0
%
…
$
55,144
7.3
%
Fed funds sold and reverse repurchases
10,000
—
—
10,000
n/m
10,000
n/m
Securities available for sale
1,725,795
1,621,659
1,766,174
104,136
6.4
%
(40,379
)
-2.3
%
Securities held to maturity
1,358,358
1,380,487
1,438,287
(22,129
)
-1.6
%
(79,929
)
-5.6
%
Loans held for sale (LHFS)
216,454
185,698
169,244
30,756
16.6
%
47,210
27.9
%
Loans held for investment (LHFI)
13,100,111
13,155,418
12,810,259
(55,307
)
-0.4
%
289,852
2.3
%
ACL LHFI
(157,929
)
(154,685
)
(134,031
)
(3,244
)
-2.1
%
(23,898
)
-17.8
%
Net LHFI
12,942,182
13,000,733
12,676,228
(58,551
)
-0.5
%
265,954
2.1
%
Premises and equipment, net
236,151
232,681
230,402
3,470
1.5
%
5,749
2.5
%
Mortgage servicing rights
125,853
136,658
142,379
(10,805
)
-7.9
%
(16,526
)
-11.6
%
Goodwill
334,605
334,605
334,605
—
0.0
%
—
0.0
%
Identifiable intangible assets
153
181
269
(28
)
-15.5
%
(116
)
-43.1
%
Other real estate
3,920
6,586
5,485
(2,666
)
-40.5
%
(1,565
)
-28.5
%
Operating lease right-of-use assets
36,034
36,925
37,115
(891
)
-2.4
%
(1,081
)
-2.9
%
Other assets
685,431
694,133
770,684
(8,702
)
-1.3
%
(85,253
)
-11.1
%
Assets of discontinued operations
—
—
69,675
—
n/m
(69,675
)
-100.0
%
Total assets
$
18,480,372
$
18,452,487
$
18,390,839
$
27,885
0.2
%
$
89,533
0.5
%
Deposits:
Noninterest-bearing
$
3,142,792
$
3,153,506
$
3,320,124
$
(10,714
)
-0.3
%
$
(177,332
)
-5.3
%
Interest-bearing
12,098,143
12,309,382
11,781,799
(211,239
)
-1.7
%
316,344
2.7
%
Total deposits
15,240,935
15,462,888
15,101,923
(221,953
)
-1.4
%
139,012
0.9
%
Fed funds purchased and repurchases
365,643
314,121
321,799
51,522
16.4
%
43,844
13.6
%
Other borrowings
443,458
336,687
793,193
106,771
31.7
%
(349,735
)
-44.1
%
Subordinated notes
123,647
123,592
123,427
55
0.0
%
220
0.2
%
Junior subordinated debt securities
61,856
61,856
61,856
—
0.0
%
—
0.0
%
ACL on off-balance sheet credit exposures
28,890
30,265
34,945
(1,375
)
-4.5
%
(6,055
)
-17.3
%
Operating lease liabilities
39,689
40,517
40,150
(828
)
-2.0
%
(461
)
-1.1
%
Other liabilities
196,158
203,420
331,066
(7,262
)
-3.6
%
(134,908
)
-40.7
%
Liabilities of discontinued operations
—
—
12,129
—
n/m
(12,129
)
-100.0
%
Total liabilities
16,500,276
16,573,346
16,820,488
(73,070
)
-0.4
%
(320,212
)
-1.9
%
Common stock
12,753
12,753
12,724
—
0.0
%
29
0.2
%
Capital surplus
163,156
161,834
158,316
1,322
0.8
%
4,840
3.1
%
Retained earnings
1,833,232
1,796,111
1,687,199
37,121
2.1
%
146,033
8.7
%
Accumulated other comprehensive
income (loss), net of tax
(29,045
)
(91,557
)
(287,888
)
62,512
68.3
%
258,843
89.9
%
Total shareholders’ equity
1,980,096
1,879,141
1,570,351
100,955
5.4
%
409,745
26.1
%
Total liabilities and equity
$
18,480,372
$
18,452,487
$
18,390,839
$
27,885
0.2
%
$
89,533
0.5
%
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, 2024
($ in thousands except per share data)
(unaudited)
Quarter Ended
Linked Quarter
Year over Year
INCOME STATEMENTS
9/30/2024
6/30/2024
9/30/2023
$ Change
% Change
$ Change
% Change
Interest and fees on LHFS & LHFI-FTE
$
220,433
$
216,399
$
206,523
$
4,034
1.9
%
$
13,910
6.7
%
Interest on securities-taxable
26,162
17,929
16,624
8,233
45.9
%
9,538
57.4
%
Interest on securities-tax exempt-FTE
—
1
58
(1
)
-100.0
%
(58
)
-100.0
%
Interest on fed funds sold and reverse repurchases
9
2
3
7
n/m
6
n/m
Other interest income
8,293
8,124
8,613
169
2.1
%
(320
)
-3.7
%
Total interest income-FTE
254,897
242,455
231,821
12,442
5.1
%
23,076
10.0
%
Interest on deposits
86,043
83,681
69,797
2,362
2.8
%
16,246
23.3
%
Interest on fed funds purchased and repurchases
4,864
5,663
5,375
(799
)
-14.1
%
(511
)
-9.5
%
Other interest expense
5,971
8,778
14,713
(2,807
)
-32.0
%
(8,742
)
-59.4
%
Total interest expense
96,878
98,122
89,885
(1,244
)
-1.3
%
6,993
7.8
%
Net interest income-FTE
158,019
144,333
141,936
13,686
9.5
%
16,083
11.3
%
Provision for credit losses (PCL), LHFI
7,923
14,696
8,322
(6,773
)
-46.1
%
(399
)
-4.8
%
PCL, off-balance sheet credit exposures
(1,375
)
(3,600
)
104
2,225
61.8
%
(1,479
)
n/m
PCL, LHFI sale of 1-4 family mortgage loans
—
8,633
—
(8,633
)
-100.0
%
—
n/m
Net interest income after provision-FTE
151,471
124,604
133,510
26,867
21.6
%
17,961
13.5
%
Service charges on deposit accounts
11,272
10,924
11,074
348
3.2
%
198
1.8
%
Bank card and other fees
7,931
9,225
8,217
(1,294
)
-14.0
%
(286
)
-3.5
%
Mortgage banking, net
6,119
4,204
6,458
1,915
45.6
%
(339
)
-5.2
%
Wealth management
9,288
9,692
8,773
(404
)
-4.2
%
515
5.9
%
Other, net
2,952
7,461
2,399
(4,509
)
-60.4
%
553
23.1
%
Securities gains (losses), net
—
(182,792
)
—
182,792
-100.0
%
—
n/m
Total noninterest income (loss)
37,562
(141,286
)
36,921
178,848
n/m
641
1.7
%
Salaries and employee benefits
66,691
64,838
67,374
1,853
2.9
%
(683
)
-1.0
%
Services and fees
25,724
24,743
27,472
981
4.0
%
(1,748
)
-6.4
%
Net occupancy-premises
7,398
7,265
7,151
133
1.8
%
247
3.5
%
Equipment expense
6,141
6,241
6,755
(100
)
-1.6
%
(614
)
-9.1
%
Litigation settlement expense (1)
—
—
6,500
—
n/m
(6,500
)
-100.0
%
Other expense
17,316
15,239
15,039
2,077
13.6
%
2,277
15.1
%
Total noninterest expense
123,270
118,326
130,291
4,944
4.2
%
(7,021
)
-5.4
%
Income (loss) from continuing operations before
income taxes and tax eq adj
65,763
(135,008
)
40,140
200,771
n/m
25,623
63.8
%
Tax equivalent adjustment
3,305
3,304
3,299
1
0.0
%
6
0.2
%
Income (loss) from continuing operations before
income taxes
62,458
(138,312
)
36,841
200,770
n/m
25,617
69.5
%
Income taxes from continuing operations
11,128
(37,707
)
6,288
48,835
n/m
4,840
77.0
%
Income (loss) from continuing operations
51,330
(100,605
)
30,553
151,935
n/m
20,777
68.0
%
Income from discontinued operations
(discont. ops) before income taxes
—
232,640
4,649
(232,640
)
-100.0
%
(4,649
)
-100.0
%
Income taxes from discont. ops
—
58,203
1,173
(58,203
)
-100.0
%
(1,173
)
-100.0
%
Income from discont. ops
—
174,437
3,476
(174,437
)
-100.0
%
(3,476
)
-100.0
%
Net income
$
51,330
$
73,832
$
34,029
$
(22,502
)
-30.5
%
$
17,301
50.8
%
Per share data (1)
Basic earnings (loss) per share from
continuing operations
$
0.84
$
(1.64
)
$
0.50
$
2.48
n/m
$
0.34
68.0
%
Basic earnings per share from discont. ops
$
—
$
2.85
$
0.06
$
(2.85
)
-100.0
%
$
(0.06
)
-100.0
%
Basic earnings per share – total
$
0.84
$
1.21
$
0.56
$
(0.37
)
-30.6
%
$
0.28
50.0
%
Diluted earnings (loss) per share from
continuing operations
$
0.84
$
(1.64
)
$
0.50
$
2.48
n/m
$
0.34
68.0
%
Diluted earnings per share from discont. ops
$
—
$
2.84
$
0.06
$
(2.84
)
-100.0
%
$
(0.06
)
-100.0
%
Diluted earnings per share – total
$
0.84
$
1.20
$
0.56
$
(0.36
)
-30.0
%
$
0.28
50.0
%
Dividends per share
$
0.23
$
0.23
$
0.23
$
—
0.0
%
$
—
0.0
%
Weighted average shares outstanding
Basic
61,206,599
61,196,820
61,069,750
Diluted
61,448,410
61,415,957
61,263,032
Period end shares outstanding
61,206,606
61,205,969
61,070,095
(1) Due to rounding, earnings (loss) per share from continuing operations and discontinued operations may not sum to earnings per share from net income.
n/m – percentage changes greater than +/- 100% are considered not meaningful
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2024
($ in thousands)
(unaudited)
Quarter Ended
Linked Quarter
Year over Year
NONPERFORMING ASSETS
9/30/2024
6/30/2024
9/30/2023
$ Change
% Change
$ Change
% Change
Nonaccrual LHFI
Alabama
$
25,835
$
26,222
$
23,530
$
(387
)
-1.5
%
$
2,305
9.8
%
Florida
111
614
151
(503
)
-81.9
%
(40
)
-26.5
%
Mississippi (1)
31,536
14,773
45,050
16,763
n/m
(13,514
)
-30.0
%
Tennessee (2)
3,180
2,084
1,841
1,096
52.6
%
1,339
72.7
%
Texas
13,163
599
20,327
12,564
n/m
(7,164
)
-35.2
%
Total nonaccrual LHFI
73,825
44,292
90,899
29,533
66.7
%
(17,074
)
-18.8
%
Other real estate
Alabama
170
485
315
(315
)
-64.9
%
(145
)
n/m
Florida
—
—
—
—
n/m
—
n/m
Mississippi (1)
1,772
1,787
942
(15
)
-0.8
%
830
88.1
%
Tennessee (2)
—
86
—
(86
)
-100.0
%
—
n/m
Texas
1,978
4,228
4,228
(2,250
)
-53.2
%
(2,250
)
-53.2
%
Total other real estate
3,920
6,586
5,485
(2,666
)
-40.5
%
(1,565
)
-28.5
%
Total nonperforming assets
$
77,745
$
50,878
$
96,384
$
26,867
52.8
%
$
(18,639
)
-19.3
%
LOANS PAST DUE OVER 90 DAYS
LHFI
$
5,352
$
5,413
$
3,804
$
(61
)
-1.1
%
$
1,548
40.7
%
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)
$
63,703
$
58,079
$
42,532
$
5,624
9.7
%
$
21,171
49.8
%
Quarter Ended
Linked Quarter
Year over Year
ACL LHFI
9/30/2024
6/30/2024
9/30/2023
$ Change
% Change
$ Change
% Change
Beginning Balance
$
154,685
$
142,998
$
129,298
$
11,687
8.2
%
$
25,387
19.6
%
PCL, LHFI
7,923
14,696
8,322
(6,773
)
-46.1
%
(399
)
-4.8
%
PCL, LHFI sale of 1-4 family mortgage loans
—
8,633
—
(8,633
)
-100.0
%
—
n/m
Charge-offs, sale of 1-4 family mortgage loans
—
(8,633
)
—
8,633
-100.0
%
—
n/m
Charge-offs
(7,142
)
(5,120
)
(7,496
)
(2,022
)
-39.5
%
354
4.7
%
Recoveries
2,463
2,111
3,907
352
16.7
%
(1,444
)
-37.0
%
Net (charge-offs) recoveries
(4,679
)
(11,642
)
(3,589
)
6,963
59.8
%
(1,090
)
-30.4
%
Ending Balance
$
157,929
$
154,685
$
134,031
$
3,244
2.1
%
$
23,898
17.8
%
NET (CHARGE-OFFS) RECOVERIES
Alabama
$
(3,098
)
$
59
$
(165
)
$
(3,157
)
n/m
$
(2,933
)
n/m
Florida
595
4
21
591
n/m
574
n/m
Mississippi (1)
(1,881
)
(9,112
)
(1,867
)
7,231
79.4
%
(14
)
-0.7
%
Tennessee (2)
(296
)
(122
)
2,127
(174
)
n/m
(2,423
)
n/m
Texas
1
(2,471
)
(3,705
)
2,472
n/m
3,706
n/m
Total net (charge-offs) recoveries
$
(4,679
)
$
(11,642
)
$
(3,589
)
$
6,963
n/m
$
(1,090
)
-30.4
%
(1) Mississippi includes Central and Southern Mississippi Regions.
(2) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.
n/m – percentage changes greater than +/- 100% are considered not meaningful
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2024
($ in thousands)
(unaudited)
Quarter Ended
Nine Months Ended
AVERAGE BALANCES
9/30/2024
6/30/2024
3/31/2024
12/31/2023
9/30/2023
9/30/2024
9/30/2023
Securities AFS-taxable
$
1,658,999
$
1,866,227
$
1,927,619
$
1,986,825
$
2,049,006
$
1,817,036
$
2,125,038
Securities AFS-nontaxable
—
—
—
4,246
4,779
—
4,796
Securities HTM-taxable
1,368,943
1,421,246
1,418,476
1,430,169
1,445,895
1,402,764
1,462,632
Securities HTM-nontaxable
—
112
340
340
907
150
2,365
Total securities
3,027,942
3,287,585
3,346,435
3,421,580
3,500,587
3,219,950
3,594,831
Loans (includes loans held for sale)
13,379,658
13,309,127
13,169,805
13,010,028
12,926,942
13,286,538
12,731,268
Fed funds sold and reverse repurchases
653
110
114
121
230
294
1,953
Other earning assets
607,275
592,625
571,215
670,477
682,644
590,433
747,627
Total earning assets
17,015,528
17,189,447
17,087,569
17,102,206
17,110,403
17,097,215
17,075,679
ACL LHFI
(154,476
)
(143,245
)
(138,711
)
(133,742
)
(127,915
)
(145,510
)
(123,313
)
Other assets
1,646,241
1,740,307
1,730,521
1,749,069
1,721,310
1,705,473
1,707,608
Total assets
$
18,507,293
$
18,786,509
$
18,679,379
$
18,717,533
$
18,703,798
$
18,657,178
$
18,659,974
Interest-bearing demand deposits
$
5,382,346
$
5,222,369
$
5,291,779
$
5,053,935
$
4,875,714
$
5,299,136
$
4,810,658
Savings deposits
3,411,961
3,653,966
3,686,027
3,526,600
3,642,158
3,583,357
3,943,998
Time deposits
3,393,216
3,346,046
3,321,601
3,427,384
3,075,224
3,353,766
2,443,753
Total interest-bearing deposits
12,187,523
12,222,381
12,299,407
12,007,919
11,593,096
12,236,259
11,198,409
Fed funds purchased and repurchases
375,559
434,760
428,127
403,041
414,696
412,679
413,608
Other borrowings
339,417
534,350
463,459
590,765
912,151
445,354
1,116,940
Subordinated notes
123,611
123,556
123,501
123,446
123,391
123,556
123,337
Junior subordinated debt securities
61,856
61,856
61,856
61,856
61,856
61,856
61,856
Total interest-bearing liabilities
13,087,966
13,376,903
13,376,350
13,187,027
13,105,190
13,279,704
12,914,150
Noninterest-bearing deposits
3,221,516
3,183,524
3,120,566
3,296,351
3,429,815
3,175,371
3,611,592
Other liabilities
274,563
498,593
505,942
641,662
585,908
425,812
571,681
Total liabilities
16,584,045
17,059,020
17,002,858
17,125,040
17,120,913
16,880,887
17,097,423
Shareholders’ equity
1,923,248
1,727,489
1,676,521
1,592,493
1,582,885
1,776,291
1,562,551
Total liabilities and equity
$
18,507,293
$
18,786,509
$
18,679,379
$
18,717,533
$
18,703,798
$
18,657,178
$
18,659,974
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2024
($ in thousands)
(unaudited)
PERIOD END BALANCES
9/30/2024
6/30/2024
3/31/2024
12/31/2023
9/30/2023
Cash and due from banks
$
805,436
$
822,141
$
606,061
$
975,343
$
750,292
Fed funds sold and reverse repurchases
10,000
—
—
—
—
Securities available for sale
1,725,795
1,621,659
1,702,299
1,762,878
1,766,174
Securities held to maturity
1,358,358
1,380,487
1,415,025
1,426,279
1,438,287
LHFS
216,454
185,698
172,937
184,812
169,244
LHFI
13,100,111
13,155,418
13,057,943
12,950,524
12,810,259
ACL LHFI
(157,929
)
(154,685
)
(142,998
)
(139,367
)
(134,031
)
Net LHFI
12,942,182
13,000,733
12,914,945
12,811,157
12,676,228
Premises and equipment, net
236,151
232,681
232,630
232,229
230,402
Mortgage servicing rights
125,853
136,658
138,044
131,870
142,379
Goodwill
334,605
334,605
334,605
334,605
334,605
Identifiable intangible assets
153
181
208
236
269
Other real estate
3,920
6,586
7,620
6,867
5,485
Operating lease right-of-use assets
36,034
36,925
34,324
35,711
37,115
Other assets
685,431
694,133
744,821
752,568
770,684
Assets of discontinued operations
—
—
73,093
67,634
69,675
Total assets
$
18,480,372
$
18,452,487
$
18,376,612
$
18,722,189
$
18,390,839
Deposits:
Noninterest-bearing
$
3,142,792
$
3,153,506
$
3,039,652
$
3,197,620
$
3,320,124
Interest-bearing
12,098,143
12,309,382
12,298,905
12,372,143
11,781,799
Total deposits
15,240,935
15,462,888
15,338,557
15,569,763
15,101,923
Fed funds purchased and repurchases
365,643
314,121
393,215
405,745
321,799
Other borrowings
443,458
336,687
482,027
483,230
793,193
Subordinated notes
123,647
123,592
123,537
123,482
123,427
Junior subordinated debt securities
61,856
61,856
61,856
61,856
61,856
ACL on off-balance sheet credit exposures
28,890
30,265
33,865
34,057
34,945
Operating lease liabilities
39,689
40,517
37,792
39,097
40,150
Other liabilities
196,158
203,420
207,583
331,085
331,066
Liabilities of discontinued operations
—
—
15,581
12,027
12,129
Total liabilities
16,500,276
16,573,346
16,694,013
17,060,342
16,820,488
Common stock
12,753
12,753
12,747
12,725
12,724
Capital surplus
163,156
161,834
160,521
159,688
158,316
Retained earnings
1,833,232
1,796,111
1,736,485
1,709,157
1,687,199
Accumulated other comprehensive income (loss),
net of tax
(29,045
)
(91,557
)
(227,154
)
(219,723
)
(287,888
)
Total shareholders’ equity
1,980,096
1,879,141
1,682,599
1,661,847
1,570,351
Total liabilities and equity
$
18,480,372
$
18,452,487
$
18,376,612
$
18,722,189
$
18,390,839
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2024
($ in thousands except per share data)
(unaudited)
Quarter Ended
Nine Months Ended
INCOME STATEMENTS
9/30/2024
6/30/2024
3/31/2024
12/31/2023
9/30/2023
9/30/2024
9/30/2023
Interest and fees on LHFS & LHFI-FTE
$
220,433
$
216,399
$
209,456
$
210,288
$
206,523
$
646,288
$
578,431
Interest on securities-taxable
26,162
17,929
15,634
15,936
16,624
59,725
50,164
Interest on securities-tax exempt-FTE
—
1
4
44
58
5
219
Interest on fed funds sold and reverse repurchases
9
2
1
2
3
12
78
Other interest income
8,293
8,124
8,110
9,918
8,613
24,527
27,217
Total interest income-FTE
254,897
242,455
233,205
236,188
231,821
730,557
656,109
Interest on deposits
86,043
83,681
83,716
80,847
69,797
253,440
165,104
Interest on fed funds purchased and repurchases
4,864
5,663
5,591
5,347
5,375
16,118
15,072
Other interest expense
5,971
8,778
7,703
9,946
14,713
22,452
49,638
Total interest expense
96,878
98,122
97,010
96,140
89,885
292,010
229,814
Net interest income-FTE
158,019
144,333
136,195
140,048
141,936
438,547
426,295
PCL, LHFI
7,923
14,696
7,708
7,585
8,322
30,327
19,777
PCL, off-balance sheet credit exposures
(1,375
)
(3,600
)
(192
)
(888
)
104
(5,167
)
(1,893
)
PCL, LHFI sale of 1-4 family mortgage loans
—
8,633
—
—
—
8,633
—
Net interest income after provision-FTE
151,471
124,604
128,679
133,351
133,510
404,754
408,411
Service charges on deposit accounts
11,272
10,924
10,958
11,311
11,074
33,154
32,105
Bank card and other fees
7,931
9,225
7,428
8,502
8,217
24,584
24,937
Mortgage banking, net
6,119
4,204
8,915
5,519
6,458
19,238
20,697
Wealth management
9,288
9,692
8,952
8,657
8,773
27,932
26,435
Other, net
2,952
7,461
3,102
2,577
2,399
13,515
7,654
Securities gains (losses), net
—
(182,792
)
—
39
—
(182,792
)
—
Total noninterest income (loss)
37,562
(141,286
)
39,355
36,605
36,921
(64,369
)
111,828
Salaries and employee benefits
66,691
64,838
65,487
69,326
67,374
197,016
198,944
Services and fees
25,724
24,743
24,431
27,478
27,472
74,898
80,327
Net occupancy-premises
7,398
7,265
7,270
7,144
7,151
21,933
21,363
Equipment expense
6,141
6,241
6,325
6,457
6,755
18,707
19,387
Litigation settlement expense
—
—
—
—
6,500
—
6,500
Other expense
17,316
15,239
16,151
15,790
15,039
48,706
42,980
Total noninterest expense
123,270
118,326
119,664
126,195
130,291
361,260
369,501
Income (loss) from continuing operations before
income taxes and tax eq adj
65,763
(135,008
)
48,370
43,761
40,140
(20,875
)
150,738
Tax equivalent adjustment
3,305
3,304
3,365
3,306
3,299
9,974
10,159
Income (loss) from continuing operations before
income taxes
62,458
(138,312
)
45,005
40,455
36,841
(30,849
)
140,579
Income taxes from continuing operations
11,128
(37,707
)
6,832
6,567
6,288
(19,747
)
21,177
Income (loss) from continuing operations
51,330
(100,605
)
38,173
33,888
30,553
(11,102
)
119,402
Income from discontinued operations
(discont. ops) before income taxes
—
232,640
4,512
2,965
4,649
237,152
13,337
Income taxes from discontinued operations
—
58,203
1,150
730
1,173
59,353
3,373
Income from discont. ops
—
174,437
3,362
2,235
3,476
177,799
9,964
Net income
$
51,330
$
73,832
$
41,535
$
36,123
$
34,029
$
166,697
$
129,366
Per share data (1)
Basic earnings (loss) per share from continuing
operations
$
0.84
$
(1.64
)
$
0.62
$
0.55
$
0.50
$
(0.18
)
$
1.96
Basic earnings per share from discont. ops
$
—
$
2.85
$
0.05
$
0.04
$
0.06
$
2.91
$
0.16
Basic earnings per share – total
$
0.84
$
1.21
$
0.68
$
0.59
$
0.56
$
2.72
$
2.12
Diluted earnings (loss) per share from continuing
operations
$
0.84
$
(1.64
)
$
0.62
$
0.55
$
0.50
$
(0.18
)
$
1.95
Diluted earnings per share from discont. ops
$
—
$
2.84
$
0.05
$
0.04
$
0.06
$
2.90
$
0.16
Diluted earnings per share – total
$
0.84
$
1.20
$
0.68
$
0.59
$
0.56
$
2.72
$
2.11
Dividends per share
$
0.23
$
0.23
$
0.23
$
0.23
$
0.23
$
0.69
$
0.69
Weighted average shares outstanding
Basic
61,206,599
61,196,820
61,128,425
61,070,481
61,069,750
61,177,388
61,048,244
Diluted
61,448,410
61,415,957
61,348,364
61,296,840
61,263,032
61,393,179
61,219,022
Period end shares outstanding
61,206,606
61,205,969
61,178,366
61,071,173
61,070,095
61,206,606
61,070,095
(1) Due to rounding, earnings (loss) per share from continuing operations and discontinued operations may not sum to earnings per share from net income.
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2024
($ in thousands)
(unaudited)
Quarter Ended
NONPERFORMING ASSETS
9/30/2024
6/30/2024
3/31/2024
12/31/2023
9/30/2023
Nonaccrual LHFI
Alabama
$
25,835
$
26,222
$
23,261
$
23,271
$
23,530
Florida
111
614
585
170
151
Mississippi (1)
31,536
14,773
59,059
54,615
45,050
Tennessee (2)
3,180
2,084
1,800
1,802
1,841
Texas
13,163
599
13,646
20,150
20,327
Total nonaccrual LHFI
73,825
44,292
98,351
100,008
90,899
Other real estate
Alabama
170
485
1,050
1,397
315
Florida
—
—
71
—
—
Mississippi (1)
1,772
1,787
2,870
1,242
942
Tennessee (2)
—
86
86
—
—
Texas
1,978
4,228
3,543
4,228
4,228
Total other real estate
3,920
6,586
7,620
6,867
5,485
Total nonperforming assets
$
77,745
$
50,878
$
105,971
$
106,875
$
96,384
LOANS PAST DUE OVER 90 DAYS
LHFI
$
5,352
$
5,413
$
5,243
$
5,790
$
3,804
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)
$
63,703
$
58,079
$
56,530
$
51,243
$
42,532
Quarter Ended
Nine Months Ended
ACL LHFI
9/30/2024
6/30/2024
3/31/2024
12/31/2023
9/30/2023
9/30/2024
9/30/2023
Beginning Balance
$
154,685
$
142,998
$
139,367
$
134,031
$
129,298
$
139,367
$
120,214
PCL, LHFI
7,923
14,696
7,708
7,585
8,322
30,327
19,777
PCL, LHFI sale of 1-4 family mortgage loans
—
8,633
—
—
—
8,633
—
Charge-offs, sale of 1-4 family mortgage loans
—
(8,633
)
—
—
—
(8,633
)
—
Charge-offs
(7,142
)
(5,120
)
(6,324
)
(4,250
)
(7,496
)
(18,586
)
(13,265
)
Recoveries
2,463
2,111
2,247
2,001
3,907
6,821
7,305
Net (charge-offs) recoveries
(4,679
)
(11,642
)
(4,077
)
(2,249
)
(3,589
)
(20,398
)
(5,960
)
Ending Balance
$
157,929
$
154,685
$
142,998
$
139,367
$
134,031
$
157,929
$
134,031
NET (CHARGE-OFFS) RECOVERIES
Alabama
$
(3,098
)
$
59
$
(341
)
$
(299
)
$
(165
)
$
(3,380
)
$
(574
)
Florida
595
4
277
180
21
876
(50
)
Mississippi (1)
(1,881
)
(9,112
)
(1,489
)
(1,943
)
(1,867
)
(12,482
)
(3,404
)
Tennessee (2)
(296
)
(122
)
(179
)
(193
)
2,127
(597
)
1,837
Texas
1
(2,471
)
(2,345
)
6
(3,705
)
(4,815
)
(3,769
)
Total net (charge-offs) recoveries
$
(4,679
)
$
(11,642
)
$
(4,077
)
$
(2,249
)
$
(3,589
)
$
(20,398
)
$
(5,960
)
(1) Mississippi includes Central and Southern Mississippi Regions.
(2) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2024
(unaudited)
Quarter Ended
Nine Months Ended
FINANCIAL RATIOS AND OTHER DATA
9/30/2024
6/30/2024
3/31/2024
12/31/2023
9/30/2023
9/30/2024
9/30/2023
Return on average equity from continuing operations
10.62
%
-23.42
%
9.16
%
8.44
%
7.66
%
-0.83
%
10.22
%
Return on average equity from adjusted
continuing operations (1)
10.62
%
9.06
%
9.16
%
8.68
%
8.87
%
9.40
%
10.63
%
Return on average equity – total
10.62
%
17.19
%
9.96
%
9.00
%
8.53
%
12.54
%
11.07
%
Return on average tangible equity from
continuing operations
12.86
%
-29.05
%
11.45
%
10.70
%
9.72
%
-1.02
%
13.03
%
Return on average tangible equity from adjusted
continuing operations (1)
12.86
%
11.14
%
11.45
%
10.98
%
11.25
%
11.49
%
13.55
%
Return on average tangible equity – total
12.86
%
21.91
%
12.98
%
11.92
%
11.32
%
15.79
%
14.77
%
Return on average assets from continuing operations
1.10
%
-2.16
%
0.83
%
0.72
%
0.65
%
-0.08
%
0.86
%
Return on average assets from adjusted
continuing operations (1)
1.10
%
0.87
%
0.83
%
0.74
%
0.75
%
0.93
%
0.89
%
Return on average assets – total
1.10
%
1.58
%
0.89
%
0.77
%
0.72
%
1.19
%
0.93
%
Interest margin – Yield – FTE
5.96
%
5.67
%
5.49
%
5.48
%
5.38
%
5.71
%
5.14
%
Interest margin – Cost
2.27
%
2.30
%
2.28
%
2.23
%
2.08
%
2.28
%
1.80
%
Net interest margin – FTE
3.69
%
3.38
%
3.21
%
3.25
%
3.29
%
3.43
%
3.34
%
Efficiency ratio (2)
60.99
%
63.81
%
66.90
%
69.76
%
68.27
%
63.79
%
66.43
%
Full-time equivalent employees
2,500
2,515
2,712
2,757
2,756
CREDIT QUALITY RATIOS
Net (recoveries) charge-offs (excl sale of
1-4 family mortgage loans) / average loans
0.14
%
0.09
%
0.12
%
0.07
%
0.11
%
0.12
%
0.06
%
PCL, LHFI (excl PCL, LHFI sale of
1-4 family mortgage loans) / average loans
0.24
%
0.44
%
0.24
%
0.23
%
0.26
%
0.30
%
0.21
%
Nonaccrual LHFI / (LHFI + LHFS)
0.55
%
0.33
%
0.74
%
0.76
%
0.70
%
Nonperforming assets / (LHFI + LHFS)
0.58
%
0.38
%
0.80
%
0.81
%
0.74
%
Nonperforming assets / (LHFI + LHFS
+ other real estate)
0.58
%
0.38
%
0.80
%
0.81
%
0.74
%
ACL LHFI / LHFI
1.21
%
1.18
%
1.10
%
1.08
%
1.05
%
ACL LHFI-commercial / commercial LHFI
1.08
%
1.05
%
0.93
%
0.85
%
0.86
%
ACL LHFI-consumer / consumer and
home mortgage LHFI
1.64
%
1.59
%
1.63
%
1.81
%
1.66
%
ACL LHFI / nonaccrual LHFI
213.92
%
349.24
%
145.39
%
139.36
%
147.45
%
ACL LHFI / nonaccrual LHFI
(excl individually analyzed loans)
497.27
%
840.20
%
235.29
%
249.31
%
273.60
%
CAPITAL RATIOS
Total equity / total assets
10.71
%
10.18
%
9.16
%
8.88
%
8.54
%
Tangible equity / tangible assets
9.07
%
8.52
%
7.47
%
7.22
%
6.84
%
Tangible equity / risk-weighted assets
10.97
%
10.18
%
8.83
%
8.76
%
8.16
%
Tier 1 leverage ratio
9.65
%
9.29
%
8.76
%
8.62
%
8.49
%
Common equity tier 1 capital ratio
11.30
%
10.92
%
10.12
%
10.04
%
9.89
%
Tier 1 risk-based capital ratio
11.70
%
11.31
%
10.51
%
10.44
%
10.29
%
Total risk-based capital ratio
13.71
%
13.29
%
12.42
%
12.29
%
12.11
%
STOCK PERFORMANCE
Market value-Close
$
31.82
$
30.04
$
28.11
$
27.88
$
21.73
Book value
$
32.35
$
30.70
$
27.50
$
27.21
$
25.71
Tangible book value
$
26.88
$
25.23
$
22.03
$
21.73
$
20.23
(1) Adjusted continuing operations excludes significant non-routine transactions. See Note 7 – Non-GAAP Financials Measures in the Notes to the Consolidated Financials.
(2) See Note 7 – Non-GAAP Financial Measures in the Notes to Consolidated Financials for Trustmark’s efficiency ratio calculation.
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
September 30, 2024
($ in thousands)
(unaudited)
Note 1 – Significant Non-Routine Transactions
Trustmark completed the following significant non-routine transactions during the second quarter of 2024:
On May 31, 2024, Trustmark National Bank closed the sale of its wholly owned subsidiary, Fisher Brown Bottrell Insurance, Inc., (FBBI) to Marsh & McLennan Agency LLC, consistent with the terms as previously announced on April 23, 2024. Trustmark National Bank is a wholly owned subsidiary of Trustmark Corporation. Trustmark recognized a gain on the sale of $228.3 million ($171.2 million, net of taxes) in income from discontinued operations. The operations of FBBI are also included in discontinued operations for the current and prior periods.
Trustmark restructured its investment securities portfolio by selling $1.561 billion of available for sale securities with an average yield of 1.36%, which generated a loss of $182.8 million ($137.1 million, net of taxes) and was recorded to noninterest income in securities gains (losses), net. Trustmark purchased $1.378 billion of available for sale securities with an average yield of 4.85%.
Trustmark sold a portfolio of 1-4 family mortgage loans that were three payments delinquent and/or nonaccrual at the time of selection totaling $56.2 million, which resulted in a loss of $13.4 million ($10.1 million, net of taxes). The portion of the loss related to credit totaled $8.6 million and was recorded as adjustments to charge-offs and the provision for credit losses. The noncredit-related portion of the loss totaled $4.8 million and was recorded to noninterest income in other, net.
On April 8, 2024, Visa commenced an initial exchange offer expiring on May 3, 2024, for any and all outstanding shares of Visa Class B-1 common stock (Visa B-1 shares). Holders participating in the exchange offer would receive a combination of Visa Class B-2 common stock (Visa B-2 shares) and Visa Class C common stock (Visa C shares) in exchange for Visa B-1 shares that are validly tendered and accepted for exchange by Visa. TNB tendered its 38.7 thousand Visa B-1 shares, which was accepted by Visa. In exchange for each Visa B-1 share that was validly tendered and accepted for exchange by Visa, TNB received 50.0% of a newly issued Visa B-2 share and newly issued Visa C shares equivalent in value to 50.0% of a Visa B-1 share. The Visa C shares that were received by TNB were recognized at fair value, which resulted in a gain of $8.1 million ($6.0 million, net of taxes) and recorded to noninterest income in other, net during the second quarter of 2024. During the third quarter of 2024, TNB sold all of the Visa C shares for approximately the same carrying value at June 30, 2024. The Visa B-2 shares were recorded at their nominal carrying value.
Note 2 – Securities Available for Sale and Held to Maturity
The following table is a summary of the estimated fair value of securities available for sale and the amortized cost of securities held to maturity:
9/30/2024
6/30/2024
3/31/2024
12/31/2023
9/30/2023
SECURITIES AVAILABLE FOR SALE
U.S. Treasury securities
$
202,638
$
172,955
$
372,424
$
372,368
$
363,476
U.S. Government agency obligations
19,335
—
5,594
5,792
6,780
Obligations of states and political subdivisions
—
—
—
—
4,642
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA
25,798
23,489
22,232
23,135
22,881
Issued by FNMA and FHLMC
1,105,310
1,060,869
1,129,521
1,176,798
1,171,521
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA
—
—
79,099
86,074
90,402
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA
372,714
364,346
93,429
98,711
106,472
Total securities available for sale
$
1,725,795
$
1,621,659
$
1,702,299
$
1,762,878
$
1,766,174
SECURITIES HELD TO MATURITY
U.S. Treasury securities
$
29,648
$
29,455
$
29,261
$
29,068
$
28,872
Obligations of states and political subdivisions
—
—
340
340
341
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA
17,773
17,998
18,387
13,005
13,090
Issued by FNMA and FHLMC
436,177
449,781
461,457
469,593
474,003
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA
131,348
138,951
146,447
154,466
162,031
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA
743,412
744,302
759,133
759,807
759,950
Total securities held to maturity
$
1,358,358
$
1,380,487
$
1,415,025
$
1,426,279
$
1,438,287
At September 30, 2024, the net unamortized, unrealized loss included in accumulated other comprehensive income (loss) in the accompanying balance sheet for securities held to maturity transferred from securities available for sale totaled $49.3 million.
Management continues to focus on asset quality as one of the strategic goals of the securities portfolio, which is evidenced by the investment of 100.0% of the portfolio in U.S. Treasury securities, GSE-backed obligations and other Aaa rated securities as determined by Moody’s. None of the securities owned by Trustmark are collateralized by assets which are considered sub-prime. Furthermore, outside of stock ownership in the Federal Home Loan Bank of Dallas and Federal Reserve Bank, Trustmark does not hold any other equity investment in a GSE.
TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
September 30, 2024
($ in thousands)
(unaudited)
Note 3 – Loan Composition
LHFI consisted of the following during the periods presented:
LHFI BY TYPE
9/30/2024
6/30/2024
3/31/2024
12/31/2023
9/30/2023
Loans secured by real estate:
Construction, land development and other land loans
$
1,588,256
$
1,638,972
$
1,539,461
$
1,510,679
$
1,609,326
Secured by 1-4 family residential properties
2,895,006
2,878,295
2,891,481
2,904,715
2,893,606
Secured by nonfarm, nonresidential properties
3,582,552
3,598,647
3,543,235
3,489,434
3,569,671
Other real estate secured
1,475,798
1,344,968
1,384,610
1,312,551
1,218,499
Commercial and industrial loans
1,767,079
1,880,607
1,922,711
1,922,910
1,828,924
Consumer loans
149,436
153,316
156,430
161,725
161,940
State and other political subdivision loans
996,002
1,053,015
1,052,844
1,088,466
1,056,569
Other loans and leases
645,982
607,598
567,171
560,044
471,724
LHFI
13,100,111
13,155,418
13,057,943
12,950,524
12,810,259
ACL LHFI
(157,929
)
(154,685
)
(142,998
)
(139,367
)
(134,031
)
Net LHFI
$
12,942,182
$
13,000,733
$
12,914,945
$
12,811,157
$
12,676,228
The following table presents the LHFI composition based upon the region where the loan was originated and reflects each region’s diversified mix of loans:
September 30, 2024
LHFI – COMPOSITION BY REGION
Total
Alabama
Florida
Georgia
Mississippi
(Central
and
Southern
Regions)
Tennessee
(Memphis, TN
and
Northern MS
Regions)
Texas
Loans secured by real estate:
Construction, land development and other land loans
$
1,588,256
$
710,651
$
37,344
$
91,475
$
319,740
$
46,631
$
382,415
Secured by 1-4 family residential properties
2,895,006
153,482
61,195
—
2,560,518
83,812
35,999
Secured by nonfarm, nonresidential properties
3,582,552
1,036,006
217,973
31,530
1,539,462
130,662
626,919
Other real estate secured
1,475,798
663,949
1,676
—
392,700
6,734
410,739
Commercial and industrial loans
1,767,079
480,202
21,296
227,285
715,590
126,659
196,047
Consumer loans
149,436
21,365
7,013
—
93,469
15,858
11,731
State and other political subdivision loans
996,002
68,625
51,084
—
754,461
21,546
100,286
Other loans and leases
645,982
58,497
7,545
246,819
187,642
75,343
70,136
Loans
$
13,100,111
$
3,192,777
$
405,126
$
597,109
$
6,563,582
$
507,245
$
1,834,272
CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION
Lots
$
63,307
$
27,502
$
6,389
$
94
$
17,031
$
5,075
$
7,216
Development
110,649
56,110
814
—
22,290
11,624
19,811
Unimproved land
104,664
19,611
11,073
—
24,471
10,334
39,175
1-4 family construction
336,167
166,524
9,446
10,849
93,326
19,375
36,647
Other construction
973,469
440,904
9,622
80,532
162,622
223
279,566
Construction, land development and other land loans
$
1,588,256
$
710,651
$
37,344
$
91,475
$
319,740
$
46,631
$
382,415
TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
September 30, 2024
($ in thousands)
(unaudited)
Note 3 – Loan Composition (continued)
September 30, 2024
Total
Alabama
Florida
Georgia
Mississippi
(Central
and
Southern
Regions)
Tennessee
(Memphis, TN
and
Northern MS
Regions)
Texas
LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION
Non-owner occupied:
Retail
$
315,491
$
107,378
$
22,723
$
—
$
90,634
$
16,686
$
78,070
Office
261,461
93,106
19,243
—
94,694
1,356
53,062
Hotel/motel
293,191
146,399
44,719
—
77,521
24,552
—
Mini-storage
142,671
37,227
1,513
—
91,490
627
11,814
Industrial
501,354
111,559
18,191
31,530
197,056
2,863
140,155
Health care
132,564
104,276
676
—
25,053
326
2,233
Convenience stores
23,905
2,733
406
—
12,806
218
7,742
Nursing homes/senior living
518,548
225,893
—
—
192,350
4,367
95,938
Other
107,798
28,608
8,472
—
54,468
7,725
8,525
Total non-owner occupied loans
2,296,983
857,179
115,943
31,530
836,072
58,720
397,539
Owner-occupied:
Office
151,558
48,134
34,417
—
39,883
10,964
18,160
Churches
52,167
12,018
3,930
—
30,456
3,353
2,410
Industrial warehouses
165,033
11,393
4,685
—
48,050
14,534
86,371
Health care
121,272
10,444
8,337
—
83,182
2,215
17,094
Convenience stores
129,000
11,273
27,122
—
54,959
—
35,646
Retail
71,290
8,662
13,158
—
32,947
8,230
8,293
Restaurants
52,968
3,634
2,809
—
25,841
16,402
4,282
Auto dealerships
41,606
4,514
180
—
21,571
15,341
—
Nursing homes/senior living
380,774
57,076
—
—
297,634
—
26,064
Other
119,901
11,679
7,392
—
68,867
903
31,060
Total owner-occupied loans
1,285,569
178,827
102,030
—
703,390
71,942
229,380
Loans secured by nonfarm, nonresidential properties
$
3,582,552
$
1,036,006
$
217,973
$
31,530
$
1,539,462
$
130,662
$
626,919
Note 4 – Yields on Earning Assets and Interest-Bearing Liabilities
The following table illustrates the yields on earning assets by category as well as the rates paid on interest-bearing liabilities on a tax equivalent basis:
Quarter Ended
Nine Months Ended
9/30/2024
6/30/2024
3/31/2024
12/31/2023
9/30/2023
9/30/2024
9/30/2023
Securities – taxable
3.44
%
2.19
%
1.88
%
1.85
%
1.89
%
2.48
%
1.87
%
Securities – nontaxable
—
3.59
%
4.73
%
3.81
%
4.05
%
4.45
%
4.09
%
Securities – total
3.44
%
2.19
%
1.88
%
1.85
%
1.89
%
2.48
%
1.87
%
LHFI & LHFS
6.55
%
6.54
%
6.40
%
6.41
%
6.34
%
6.50
%
6.07
%
Fed funds sold & reverse repurchases
5.48
%
7.31
%
3.53
%
6.56
%
5.17
%
5.45
%
5.34
%
Other earning assets
5.43
%
5.51
%
5.71
%
5.87
%
5.01
%
5.55
%
4.87
%
Total earning assets
5.96
%
5.67
%
5.49
%
5.48
%
5.38
%
5.71
%
5.14
%
Interest-bearing deposits
2.81
%
2.75
%
2.74
%
2.67
%
2.39
%
2.77
%
1.97
%
Fed funds purchased & repurchases
5.15
%
5.24
%
5.25
%
5.26
%
5.14
%
5.22
%
4.87
%
Other borrowings
4.53
%
4.91
%
4.78
%
5.08
%
5.32
%
4.75
%
5.10
%
Total interest-bearing liabilities
2.94
%
2.95
%
2.92
%
2.89
%
2.72
%
2.94
%
2.38
%
Total Deposits
2.22
%
2.18
%
2.18
%
2.10
%
1.84
%
2.20
%
1.49
%
Net interest margin
3.69
%
3.38
%
3.21
%
3.25
%
3.29
%
3.43
%
3.34
%
TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
September 30, 2024
($ in thousands)
(unaudited)
Note 4 – Yields on Earning Assets and Interest-Bearing Liabilities (continued)
Reflected in the table above are yields on earning assets and liabilities, along with the net interest margin which equals reported net interest income-FTE, annualized, as a percent of average earning assets.
The net interest margin increased 31 basis points when compared to the second quarter of 2024, totaling 3.69% for the third quarter of 2024, primarily due to increased yields on the securities portfolio, while the loans held for investment and held for sale portfolio remained relatively flat, offset by the increase in the cost of interest-bearing deposits.
Note 5 – Mortgage Banking
Trustmark utilizes a portfolio of exchange-traded derivative instruments, such as Treasury note futures contracts and option contracts, to achieve a fair value return that offsets the changes in fair value of mortgage servicing rights (MSR) attributable to interest rates. These transactions are considered freestanding derivatives that do not otherwise qualify for hedge accounting under generally accepted accounting principles (GAAP). Changes in the fair value of these exchange-traded derivative instruments, including administrative costs, are recorded in noninterest income in mortgage banking, net and are offset by the changes in the fair value of the MSR. The MSR fair value represents the present value of future cash flows, which among other things includes decay and the effect of changes in interest rates. Ineffectiveness of hedging the MSR fair value is measured by comparing the change in value of hedge instruments to the change in the fair value of the MSR asset attributable to changes in interest rates and other market driven changes in valuation inputs and assumptions. The impact of this strategy resulted in a net negative hedge ineffectiveness of $2.5 million during the third quarter of 2024.
The following table illustrates the components of mortgage banking revenues included in noninterest income in the accompanying income statements:
Quarter Ended
Nine Months Ended
9/30/2024
6/30/2024
3/31/2024
12/31/2023
9/30/2023
9/30/2024
9/30/2023
Mortgage servicing income, net
$
7,127
$
6,993
$
6,934
$
6,731
$
6,916
$
21,054
$
20,465
Change in fair value-MSR from runoff
(3,154
)
(3,447
)
(1,926
)
(2,972
)
(3,203
)
(8,527
)
(7,058
)
Gain on sales of loans, net
4,648
5,151
5,009
3,913
3,748
14,808
11,432
Mortgage banking income before hedge
ineffectiveness
8,621
8,697
10,017
7,672
7,461
27,335
24,839
Change in fair value-MSR from market changes
(10,406
)
(1,626
)
5,123
(10,224
)
6,809
(6,909
)
8,735
Change in fair value of derivatives
7,904
(2,867
)
(6,225
)
8,071
(7,812
)
(1,188
)
(12,877
)
Net positive (negative) hedge ineffectiveness
(2,502
)
(4,493
)
(1,102
)
(2,153
)
(1,003
)
(8,097
)
(4,142
)
Mortgage banking, net
$
6,119
$
4,204
$
8,915
$
5,519
$
6,458
$
19,238
$
20,697
TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
September 30, 2024
($ in thousands)
(unaudited)
Note 6 – Other Noninterest Income and Expense
Other noninterest income consisted of the following for the periods presented:
Quarter Ended
Nine Months Ended
9/30/2024
6/30/2024
3/31/2024
12/31/2023
9/30/2023
9/30/2024
9/30/2023
Partnership amortization for tax credit purposes
$
(1,977
)
$
(1,824
)
$
(1,834
)
$
(2,013
)
$
(1,995
)
$
(5,635
)
$
(5,975
)
Increase in life insurance cash surrender value
1,883
1,860
1,844
1,825
1,784
5,587
5,193
Loss on sale of 1-4 family mortgage loans
—
(4,798
)
—
—
—
(4,798
)
—
Visa C shares fair value adjustment
—
8,056
—
—
—
8,056
—
Other miscellaneous income
3,046
4,167
3,092
2,765
2,610
10,305
8,436
Total other, net
$
2,952
$
7,461
$
3,102
$
2,577
$
2,399
$
13,515
$
7,654
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
Nine Months Ended
9/30/2024
6/30/2024
3/31/2024
12/31/2023
9/30/2023
9/30/2024
9/30/2023
Loan expense
$
2,824
$
2,880
$
2,955
$
2,380
$
3,130
$
8,659
$
8,734
Amortization of intangibles
28
27
28
33
34
83
257
FDIC assessment expense
5,071
4,816
4,509
4,844
3,765
14,396
8,685
Other real estate expense, net
2,452
327
671
(184
)
(40
)
3,450
303
Other miscellaneous expense
6,941
7,189
7,988
8,717
8,150
22,118
25,001
Total other expense
$
17,316
$
15,239
$
16,151
$
15,790
$
15,039
$
48,706
$
42,980
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
September 30, 2024
($ in thousands except per share data)
(unaudited)
Note 7 – Non-GAAP Financial Measures (continued)
Quarter Ended
Nine Months Ended
9/30/2024
6/30/2024
3/31/2024
12/31/2023
9/30/2023
9/30/2024
9/30/2023
TANGIBLE EQUITY
AVERAGE BALANCES
Total shareholders’ equity
$
1,923,248
$
1,727,489
$
1,676,521
$
1,592,493
$
1,582,885
$
1,776,291
$
1,562,551
Less: Goodwill
(334,605
)
(334,605
)
(334,605
)
(334,605
)
(334,605
)
(334,605
)
(334,605
)
Identifiable intangible assets
(168
)
(195
)
(224
)
(253
)
(287
)
(196
)
(349
)
Total average tangible equity
$
1,588,475
$
1,392,689
$
1,341,692
$
1,257,635
$
1,247,993
$
1,441,490
$
1,227,597
PERIOD END BALANCES
Total shareholders’ equity
$
1,980,096
$
1,879,141
$
1,682,599
$
1,661,847
$
1,570,351
Less: Goodwill
(334,605
)
(334,605
)
(334,605
)
(334,605
)
(334,605
)
Identifiable intangible assets
(153
)
(181
)
(208
)
(236
)
(269
)
Total tangible equity
(a)
$
1,645,338
$
1,544,355
$
1,347,786
$
1,327,006
$
1,235,477
TANGIBLE ASSETS
Total assets
$
18,480,372
$
18,452,487
$
18,376,612
$
18,722,189
$
18,390,839
Less: Goodwill
(334,605
)
(334,605
)
(334,605
)
(334,605
)
(334,605
)
Identifiable intangible assets
(153
)
(181
)
(208
)
(236
)
(269
)
Total tangible assets
(b)
$
18,145,614
$
18,117,701
$
18,041,799
$
18,387,348
$
18,055,965
Risk-weighted assets
(c)
$
15,004,024
$
15,165,038
$
15,257,385
$
15,153,263
$
15,143,531
NET INCOME (LOSS) ADJUSTED FOR INTANGIBLE AMORTIZATION
Net income (loss) from continuing operations
$
51,330
$
(100,605
)
$
38,173
$
33,888
$
30,553
$
(11,102
)
$
119,402
Plus: Intangible amortization net of tax from
continuing operations
21
20
20
25
25
61
192
Net income (loss) adjusted for intangible amortization
$
51,351
$
(100,585
)
$
38,193
$
33,913
$
30,578
$
(11,041
)
$
119,594
Period end common shares outstanding
(d)
61,206,606
61,205,969
61,178,366
61,071,173
61,070,095
TANGIBLE COMMON EQUITY MEASUREMENTS
Return on average tangible equity from
continuing operations (1)
12.86
%
-29.05
%
11.45
%
10.70
%
9.72
%
-1.02
%
13.03
%
Tangible equity/tangible assets
(a)/(b)
9.07
%
8.52
%
7.47
%
7.22
%
6.84
%
Tangible equity/risk-weighted assets
(a)/(c)
10.97
%
10.18
%
8.83
%
8.76
%
8.16
%
Tangible book value
(a)/(d)*1,000
$
26.88
$
25.23
$
22.03
$
21.73
$
20.23
COMMON EQUITY TIER 1 CAPITAL (CET1)
Total shareholders’ equity
$
1,980,096
$
1,879,141
$
1,682,599
$
1,661,847
$
1,570,351
CECL transition adjustment
6,500
6,500
6,500
13,000
13,000
AOCI-related adjustments
29,045
91,557
227,154
219,723
287,888
CET1 adjustments and deductions:
Goodwill net of associated deferred
tax liabilities (DTLs)
(320,757
)
(320,758
)
(370,205
)
(370,212
)
(370,219
)
Other adjustments and deductions
for CET1 (2)
(115
)
(847
)
(2,588
)
(2,693
)
(2,803
)
CET1 capital
(e)
1,694,769
1,655,593
1,543,460
1,521,665
1,498,217
Additional tier 1 capital instruments
plus related surplus
60,000
60,000
60,000
60,000
60,000
Tier 1 capital
$
1,754,769
$
1,715,593
$
1,603,460
$
1,581,665
$
1,558,217
Common equity tier 1 capital ratio
(e)/(c)
11.30
%
10.92
%
10.12
%
10.04
%
9.89
%
(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
September 30, 2024
($ in thousands except per share data)
(unaudited)
Note 7 – Non-GAAP Financial Measures (continued)
Trustmark discloses certain non-GAAP financial measures because Management uses these measures for business planning purposes, including to manage Trustmark’s business against internal projected results of operations and to measure Trustmark’s performance. Trustmark views these as measures of our core operating business, which exclude the impact of the items detailed below, as these items are generally not operational in nature. These non-GAAP financial measures also provide another basis for comparing period-to-period results as presented in the accompanying selected financial data table and the audited consolidated financial statements by excluding potential differences caused by non-operational and unusual or non-recurring items. Readers are cautioned that these adjustments are not permitted under GAAP. Trustmark encourages readers to consider its consolidated financial statements and the notes related thereto in their entirety, and not to rely on any single financial measure.
The following table presents pre-provision net revenue (PPNR) during the periods presented:
Quarter Ended
Nine Months Ended
9/30/2024
6/30/2024
3/31/2024
12/31/2023
9/30/2023
9/30/2024
9/30/2023
Net interest income (GAAP)
(a)
$
154,714
$
141,029
$
132,830
$
136,742
$
138,637
$
428,573
$
416,136
Noninterest income (loss) (GAAP)
37,562
(141,286
)
39,355
36,605
36,921
(64,369
)
111,828
Add: Loss on sale of 1-4 family mortgage loans (incl in Other, net)
—
4,798
—
—
—
4,798
—
Visa C shares fair value adjustment (incl in Other, net)
—
(8,056
)
—
—
—
(8,056
)
—
Securities (gains) losses, net
—
182,792
—
—
—
182,792
—
Noninterest income from adjusted continuing
operations (Non-GAAP)
(b)
$
37,562
$
38,248
$
39,355
$
36,605
$
36,921
$
115,165
$
111,828
Adjusted pre-provision revenue
(a)+(b)=(c)
$
192,276
$
179,277
$
172,185
$
173,347
$
175,558
$
543,738
$
527,964
Noninterest expense (GAAP)
$
123,270
$
118,326
$
119,664
$
126,195
$
130,291
$
361,260
$
369,501
Less: Reduction in force expense (incl in Salaries and employee benefits)
—
—
—
(1,406
)
—
—
—
Litigation settlement expense
—
—
—
—
(6,500
)
—
(6,500
)
Noninterest expense from adjusted continuing
operations (Non-GAAP)
(d)
$
123,270
$
118,326
$
119,664
$
124,789
$
123,791
$
361,260
$
363,001
PPNR (Non-GAAP)
(c)-(d)
$
69,006
$
60,951
$
52,521
$
48,558
$
51,767
$
182,478
$
164,963
TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
September 30, 2024
($ in thousands)
(unaudited)
Note 7 – Non-GAAP Financial Measures (continued)
The following table presents adjustments to net income (loss) from continuing operations and select financial ratios as reported in accordance with GAAP resulting from significant non-routine items occurring during the periods presented:
Quarter Ended
Nine Months Ended
9/30/2024
6/30/2024
3/31/2024
12/31/2023
9/30/2023
9/30/2024
9/30/2023
Net income (loss) (GAAP) from continuing operations
$
51,330
$
(100,605
)
$
38,173
$
33,888
$
30,553
$
(11,102
)
$
119,402
Significant non-routine transactions (net of taxes):
PCL, LHFI sale of nonperforming 1-4 family
—
6,475
—
—
—
6,475
—
Loss on sale of 1-4 family mortgage loans
—
3,598
—
—
—
3,598
—
Visa C shares fair value adjustment
—
(6,042
)
—
—
—
(6,042
)
—
Securities gains (losses), net
—
137,094
—
—
—
137,094
—
Reduction in force expense
—
—
—
1,055
—
—
—
Litigation settlement expense
—
—
—
—
4,875
—
4,875
Net income adjusted for significant non-routine
transactions (Non-GAAP)
$
51,330
$
40,520
$
38,173
$
34,943
$
35,428
$
130,023
$
124,277
Diluted EPS from adjusted continuing operations
$
0.84
$
0.66
$
0.62
$
0.57
$
0.58
$
2.12
$
2.03
FINANCIAL RATIOS – REPORTED (GAAP)
Return on average equity from continuing operations
10.62
%
-23.42
%
9.16
%
8.44
%
7.66
%
-0.83
%
10.22
%
Return on average tangible equity from continuing operations
12.86
%
-29.05
%
11.45
%
10.70
%
9.72
%
-1.02
%
13.03
%
Return on average assets from continuing operations
1.10
%
-2.16
%
0.83
%
0.72
%
0.65
%
-0.08
%
0.86
%
FINANCIAL RATIOS – ADJUSTED (NON-GAAP)
Return on average equity from adjusted continuing operations
10.62
%
9.06
%
9.16
%
8.68
%
8.87
%
9.40
%
10.63
%
Return on average tangible equity from adjusted
continuing operations
12.86
%
11.14
%
11.45
%
10.98
%
11.25
%
11.49
%
13.55
%
Return on average assets from adjusted continuing operations
1.10
%
0.87
%
0.83
%
0.74
%
0.75
%
0.93
%
0.89
%
TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
September 30, 2024
($ in thousands)
(unaudited)
Note 7 – Non-GAAP Financial Measures (continued)
The following table presents Trustmark’s calculation of its efficiency ratio for the periods presented:
Quarter Ended
Nine Months Ended
9/30/2024
6/30/2024
3/31/2024
12/31/2023
9/30/2023
9/30/2024
9/30/2023
Total noninterest expense (GAAP)
$
123,270
$
118,326
$
119,664
$
126,195
$
130,291
$
361,260
$
369,501
Less: Other real estate expense, net
(2,452
)
(327
)
(671
)
184
40
(3,450
)
(303
)
Amortization of intangibles
(28
)
(27
)
(28
)
(33
)
(34
)
(83
)
(257
)
Charitable contributions resulting in
state tax credits
(300
)
(300
)
(300
)
(325
)
(325
)
(900
)
(975
)
Reduction in force expense
—
—
—
(1,406
)
—
—
—
Litigation settlement expense
—
—
—
—
(6,500
)
—
(6,500
)
Adjusted noninterest expense (Non-GAAP)
(c)
$
120,490
$
117,672
$
118,665
$
124,615
$
123,472
$
356,827
$
361,466
Net interest income (GAAP)
$
154,714
$
141,029
$
132,830
$
136,742
$
138,637
$
428,573
$
416,136
Add: Tax equivalent adjustment
3,305
3,304
3,365
3,306
3,299
9,974
10,159
Net interest income-FTE (Non-GAAP)
(a)
$
158,019
$
144,333
$
136,195
$
140,048
$
141,936
$
438,547
$
426,295
Noninterest income (loss) (GAAP)
$
37,562
$
(141,286
)
$
39,355
$
36,605
$
36,921
$
(64,369
)
$
111,828
Add: Partnership amortization for tax credit purposes
1,977
1,824
1,834
2,013
1,995
5,635
5,975
Loss on sale of 1-4 family mortgage loans
—
4,798
—
—
—
4,798
—
Securities (gains) losses, net
—
182,792
—
(39
)
—
182,792
—
Less: Visa C shares fair value adjustment
—
(8,056
)
—
—
—
(8,056
)
—
Adjusted noninterest income (Non-GAAP)
(b)
$
39,539
$
40,072
$
41,189
$
38,579
$
38,916
$
120,800
$
117,803
Adjusted revenue (Non-GAAP)
(a)+(b)
$
197,558
$
184,405
$
177,384
$
178,627
$
180,852
$
559,347
$
544,098
Efficiency ratio (Non-GAAP)
(c)/((a)+(b))
60.99
%
63.81
%
66.90
%
69.76
%
68.27
%
63.79
%
66.43
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20241022375452/en/
Contacts
Trustmark Investor Contacts:
Thomas C. Owens
Treasurer and Principal Financial Officer
601-208-7853
F. Joseph Rein, Jr.
Executive Vice President
601-208-6898
Trustmark Media Contact:
Melanie A. Morgan
Executive Vice President
601-208-2979
