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

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Third Quarter Highlights

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

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

Balance Sheet Management

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

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

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

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

Credit Quality

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

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

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

Revenue Generation

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

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

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

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

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

Noninterest Expense

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

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

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

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

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, October 28, 2020 at 8:30 a.m. Central Time to discuss the Corporation’s financial results. Interested parties may listen to the conference call by dialing (877) 317-3051 or by clicking on the link provided under the Investor Relations section of our website at www.trustmark.com. A replay of the conference call will also be available through Wednesday, November 11, 2020, in archived format at the same web address or by calling (877) 344-7529, passcode 10148374.

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

Forward-Looking Statements

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

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

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

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2020
($ in thousands)
(unaudited)
Linked QuarterYear over Year
QUARTERLY AVERAGE BALANCES9/30/20206/30/20209/30/2019$ Change% Change$ Change% Change
Securities AFS-taxable

$

1,857,050

 

$

1,724,320

 

$

1,570,803

 

$

132,730

 

7.7

%

$

286,247

 

18.2

%

Securities AFS-nontaxable

 

5,973

 

 

9,827

 

 

25,096

 

 

(3,854

)

-39.2

%

 

(19,123

)

-76.2

%

Securities HTM-taxable

 

608,585

 

 

655,085

 

 

778,098

 

 

(46,500

)

-7.1

%

 

(169,513

)

-21.8

%

Securities HTM-nontaxable

 

25,508

 

 

25,538

 

 

26,088

 

 

(30

)

-0.1

%

 

(580

)

-2.2

%

Total securities

 

2,497,116

 

 

2,414,770

 

 

2,400,085

 

 

82,346

 

3.4

%

 

97,031

 

4.0

%

Paycheck protection program loans (PPP)

 

941,456

 

 

764,416

 

 

—

 

 

177,040

 

23.2

%

 

941,456

 

n/m

 

Loans (includes loans held for sale) (1)

 

10,162,379

 

 

9,908,132

 

 

9,436,287

 

 

254,247

 

2.6

%

 

726,092

 

7.7

%

Acquired loans (1)

 

—

 

 

—

 

 

82,641

 

 

—

 

n/m

 

 

(82,641

)

-100.0

%

Fed funds sold and reverse repurchases

 

301

 

 

113

 

 

3,662

 

 

188

 

n/m

 

 

(3,361

)

-91.8

%

Other earning assets

 

722,917

 

 

854,642

 

 

176,163

 

 

(131,725

)

-15.4

%

 

546,754

 

n/m

 

Total earning assets

 

14,324,169

 

 

13,942,073

 

 

12,098,838

 

 

382,096

 

2.7

%

 

2,225,331

 

18.4

%

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

 

(121,842

)

 

(103,006

)

 

(83,756

)

 

(18,836

)

-18.3

%

 

(38,086

)

-45.5

%

Other assets

 

1,564,825

 

 

1,685,317

 

 

1,447,977

 

 

(120,492

)

-7.1

%

 

116,848

 

8.1

%

Total assets

$

15,767,152

 

$

15,524,384

 

$

13,463,059

 

$

242,768

 

1.6

%

$

2,304,093

 

17.1

%

 
Interest-bearing demand deposits

$

3,669,249

 

$

3,832,372

 

$

3,085,758

 

$

(163,123

)

-4.3

%

$

583,491

 

18.9

%

Savings deposits

 

4,416,046

 

 

4,180,540

 

 

3,568,403

 

 

235,506

 

5.6

%

 

847,643

 

23.8

%

Time deposits

 

1,507,348

 

 

1,578,737

 

 

1,753,083

 

 

(71,389

)

-4.5

%

 

(245,735

)

-14.0

%

Total interest-bearing deposits

 

9,592,643

 

 

9,591,649

 

 

8,407,244

 

 

994

 

0.0

%

 

1,185,399

 

14.1

%

Fed funds purchased and repurchases

 

84,077

 

 

105,696

 

 

142,064

 

 

(21,619

)

-20.5

%

 

(57,987

)

-40.8

%

Other borrowings

 

167,262

 

 

107,533

 

 

78,404

 

 

59,729

 

55.5

%

 

88,858

 

n/m

 

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

—

 

0.0

%

 

—

 

0.0

%

Total interest-bearing liabilities

 

9,905,838

 

 

9,866,734

 

 

8,689,568

 

 

39,104

 

0.4

%

 

1,216,270

 

14.0

%

Noninterest-bearing deposits

 

3,921,867

 

 

3,645,761

 

 

2,932,754

 

 

276,106

 

7.6

%

 

989,113

 

33.7

%

Other liabilities

 

244,544

 

 

346,173

 

 

206,091

 

 

(101,629

)

-29.4

%

 

38,453

 

18.7

%

Total liabilities

 

14,072,249

 

 

13,858,668

 

 

11,828,413

 

 

213,581

 

1.5

%

 

2,243,836

 

19.0

%

Shareholders' equity

 

1,694,903

 

 

1,665,716

 

 

1,634,646

 

 

29,187

 

1.8

%

 

60,257

 

3.7

%

Total liabilities and equity

$

15,767,152

 

$

15,524,384

 

$

13,463,059

 

$

242,768

 

1.6

%

$

2,304,093

 

17.1

%

(1)

See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.
 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2020
($ in thousands)
(unaudited)
Linked QuarterYear over Year
PERIOD END BALANCES9/30/20206/30/20209/30/2019$ Change% Change$ Change% Change
Cash and due from banks

$

564,588

 

$

1,026,640

 

$

486,263

 

$

(462,052

)

-45.0

%

$

78,325

 

16.1

%

Fed funds sold and reverse repurchases

 

50

 

 

—

 

 

—

 

 

50

 

n/m

 

 

50

 

n/m

 

Securities available for sale

 

1,922,728

 

 

1,884,153

 

 

1,553,705

 

 

38,575

 

2.0

%

 

369,023

 

23.8

%

Securities held to maturity

 

611,280

 

 

660,048

 

 

785,422

 

 

(48,768

)

-7.4

%

 

(174,142

)

-22.2

%

PPP loans

 

944,270

 

 

939,783

 

 

—

 

 

4,487

 

0.5

%

 

944,270

 

n/m

 

Loans held for sale (LHFS)

 

485,103

 

 

355,089

 

 

292,800

 

 

130,014

 

36.6

%

 

192,303

 

65.7

%

Loans held for investment (LHFI) (1)

 

9,847,728

 

 

9,659,806

 

 

9,223,668

 

 

187,922

 

1.9

%

 

624,060

 

6.8

%

ACL LHFI (1)

 

(122,010

)

 

(119,188

)

 

(83,226

)

 

(2,822

)

-2.4

%

 

(38,784

)

-46.6

%

Net LHFI

 

9,725,718

 

 

9,540,618

 

 

9,140,442

 

 

185,100

 

1.9

%

 

585,276

 

6.4

%

Acquired loans (1)

 

—

 

 

—

 

 

81,004

 

 

—

 

n/m

 

 

(81,004

)

-100.0

%

Allowance for loan losses, acquired loans (1)

 

—

 

 

—

 

 

(1,249

)

 

—

 

n/m

 

 

1,249

 

-100.0

%

Net acquired loans

 

—

 

 

—

 

 

79,755

 

 

—

 

n/m

 

 

(79,755

)

-100.0

%

Net LHFI and acquired loans

 

9,725,718

 

 

9,540,618

 

 

9,220,197

 

 

185,100

 

1.9

%

 

505,521

 

5.5

%

Premises and equipment, net

 

192,722

 

 

190,567

 

 

188,423

 

 

2,155

 

1.1

%

 

4,299

 

2.3

%

Mortgage servicing rights

 

61,613

 

 

57,811

 

 

73,016

 

 

3,802

 

6.6

%

 

(11,403

)

-15.6

%

Goodwill

 

385,270

 

 

385,270

 

 

379,627

 

 

—

 

0.0

%

 

5,643

 

1.5

%

Identifiable intangible assets

 

8,142

 

 

8,895

 

 

8,345

 

 

(753

)

-8.5

%

 

(203

)

-2.4

%

Other real estate

 

16,248

 

 

18,276

 

 

31,974

 

 

(2,028

)

-11.1

%

 

(15,726

)

-49.2

%

Operating lease right-of-use assets

 

30,508

 

 

29,819

 

 

33,180

 

 

689

 

2.3

%

 

(2,672

)

-8.1

%

Other assets

 

609,922

 

 

595,110

 

 

531,834

 

 

14,812

 

2.5

%

 

78,088

 

14.7

%

Total assets

$

15,558,162

 

$

15,692,079

 

$

13,584,786

 

$

(133,917

)

-0.9

%

$

1,973,376

 

14.5

%

 
Deposits:
Noninterest-bearing

$

3,964,023

 

$

3,880,540

 

$

3,064,127

 

$

83,483

 

2.2

%

$

899,896

 

29.4

%

Interest-bearing

 

9,258,390

 

 

9,624,933

 

 

8,190,056

 

 

(366,543

)

-3.8

%

 

1,068,334

 

13.0

%

Total deposits

 

13,222,413

 

 

13,505,473

 

 

11,254,183

 

 

(283,060

)

-2.1

%

 

1,968,230

 

17.5

%

Fed funds purchased and repurchases

 

153,834

 

 

70,255

 

 

376,712

 

 

83,579

 

n/m

 

 

(222,878

)

-59.2

%

Other borrowings

 

178,599

 

 

152,860

 

 

76,685

 

 

25,739

 

16.8

%

 

101,914

 

n/m

 

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

—

 

0.0

%

 

—

 

0.0

%

ACL on off-balance sheet credit exposures (1)

 

39,659

 

 

42,663

 

 

—

 

 

(3,004

)

-7.0

%

 

39,659

 

n/m

 

Operating lease liabilities

 

31,838

 

 

31,076

 

 

34,319

 

 

762

 

2.5

%

 

(2,481

)

-7.2

%

Other liabilities

 

159,922

 

 

153,952

 

 

135,669

 

 

5,970

 

3.9

%

 

24,253

 

17.9

%

Total liabilities

 

13,848,121

 

 

14,018,135

 

 

11,939,424

 

 

(170,014

)

-1.2

%

 

1,908,697

 

16.0

%

Common stock

 

13,215

 

 

13,214

 

 

13,390

 

 

1

 

0.0

%

 

(175

)

-1.3

%

Capital surplus

 

231,836

 

 

230,613

 

 

257,370

 

 

1,223

 

0.5

%

 

(25,534

)

-9.9

%

Retained earnings

 

1,459,306

 

 

1,419,552

 

 

1,395,460

 

 

39,754

 

2.8

%

 

63,846

 

4.6

%

Accum other comprehensive income (loss), net of tax

 

5,684

 

 

10,565

 

 

(20,858

)

 

(4,881

)

-46.2

%

 

26,542

 

n/m

 

Total shareholders' equity

 

1,710,041

 

 

1,673,944

 

 

1,645,362

 

 

36,097

 

2.2

%

 

64,679

 

3.9

%

Total liabilities and equity

$

15,558,162

 

$

15,692,079

 

$

13,584,786

 

$

(133,917

)

-0.9

%

$

1,973,376

 

14.5

%

(1)

See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.
 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2020
($ in thousands except per share data)
(unaudited)
Quarter EndedLinked QuarterYear over Year
INCOME STATEMENTS9/30/20206/30/20209/30/2019$ Change% Change$ Change% Change
Interest and fees on LHFS & LHFI-FTE

$

97,429

 

$

99,300

$

116,432

 

$

(1,871

)

-1.9

%

$

(19,003

)

-16.3

%

Interest and fees on PPP loans

 

6,729

 

 

5,044

 

—

 

 

1,685

 

33.4

%

 

6,729

 

n/m

 

Interest and fees on acquired loans (1)

 

—

 

 

—

 

2,309

 

 

—

 

n/m

 

 

(2,309

)

-100.0

%

Interest on securities-taxable

 

12,542

 

 

12,762

 

13,184

 

 

(220

)

-1.7

%

 

(642

)

-4.9

%

Interest on securities-tax exempt-FTE

 

301

 

 

315

 

485

 

 

(14

)

-4.4

%

 

(184

)

-37.9

%

Interest on fed funds sold and reverse repurchases

 

1

 

 

—

 

23

 

 

1

 

n/m

 

 

(22

)

-95.7

%

Other interest income

 

331

 

 

239

 

1,044

 

 

92

 

38.5

%

 

(713

)

-68.3

%

Total interest income-FTE

 

117,333

 

 

117,660

 

133,477

 

 

(327

)

-0.3

%

 

(16,144

)

-12.1

%

Interest on deposits

 

7,437

 

 

8,730

 

20,385

 

 

(1,293

)

-14.8

%

 

(12,948

)

-63.5

%

Interest on fed funds purchased and repurchases

 

32

 

 

42

 

547

 

 

(10

)

-23.8

%

 

(515

)

-94.1

%

Other interest expense

 

688

 

 

881

 

830

 

 

(193

)

-21.9

%

 

(142

)

-17.1

%

Total interest expense

 

8,157

 

 

9,653

 

21,762

 

 

(1,496

)

-15.5

%

 

(13,605

)

-62.5

%

Net interest income-FTE

 

109,176

 

 

108,007

 

111,715

 

 

1,169

 

1.1

%

 

(2,539

)

-2.3

%

Provision for credit losses, LHFI (1)

 

1,760

 

 

18,185

 

3,039

 

 

(16,425

)

-90.3

%

 

(1,279

)

-42.1

%

Provision for loan losses, acquired loans (1)

 

—

 

 

—

 

(140

)

 

—

 

n/m

 

 

140

 

100.0

%

Net interest income after provision-FTE

 

107,416

 

 

89,822

 

108,816

 

 

17,594

 

19.6

%

 

(1,400

)

-1.3

%

Service charges on deposit accounts

 

7,577

 

 

6,397

 

11,065

 

 

1,180

 

18.4

%

 

(3,488

)

-31.5

%

Bank card and other fees

 

8,843

 

 

7,717

 

8,349

 

 

1,126

 

14.6

%

 

494

 

5.9

%

Mortgage banking, net

 

36,439

 

 

33,745

 

8,171

 

 

2,694

 

8.0

%

 

28,268

 

n/m

 

Insurance commissions

 

11,562

 

 

11,868

 

11,072

 

 

(306

)

-2.6

%

 

490

 

4.4

%

Wealth management

 

7,679

 

 

7,571

 

7,691

 

 

108

 

1.4

%

 

(12

)

-0.2

%

Other, net

 

1,601

 

 

2,213

 

1,989

 

 

(612

)

-27.7

%

 

(388

)

-19.5

%

Total noninterest income

 

73,701

 

 

69,511

 

48,337

 

 

4,190

 

6.0

%

 

25,364

 

52.5

%

Salaries and employee benefits

 

67,342

 

 

66,107

 

62,495

 

 

1,235

 

1.9

%

 

4,847

 

7.8

%

Services and fees

 

20,992

 

 

20,567

 

18,838

 

 

425

 

2.1

%

 

2,154

 

11.4

%

Net occupancy-premises

 

7,000

 

 

6,587

 

6,831

 

 

413

 

6.3

%

 

169

 

2.5

%

Equipment expense

 

5,828

 

 

5,620

 

5,971

 

 

208

 

3.7

%

 

(143

)

-2.4

%

Other real estate expense, net

 

1,203

 

 

271

 

531

 

 

932

 

n/m

 

 

672

 

n/m

 

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

 

(3,004

)

 

6,242

 

—

 

 

(9,246

)

n/m

 

 

(3,004

)

n/m

 

Other expense

 

14,598

 

 

13,265

 

12,187

 

 

1,333

 

10.0

%

 

2,411

 

19.8

%

Total noninterest expense

 

113,959

 

 

118,659

 

106,853

 

 

(4,700

)

-4.0

%

 

7,106

 

6.7

%

Income before income taxes and tax eq adj

 

67,158

 

 

40,674

 

50,300

 

 

26,484

 

65.1

%

 

16,858

 

33.5

%

Tax equivalent adjustment

 

2,969

 

 

3,007

 

3,249

 

 

(38

)

-1.3

%

 

(280

)

-8.6

%

Income before income taxes

 

64,189

 

 

37,667

 

47,051

 

 

26,522

 

70.4

%

 

17,138

 

36.4

%

Income taxes

 

9,749

 

 

5,517

 

6,016

 

 

4,232

 

76.7

%

 

3,733

 

62.1

%

Net income

$

54,440

 

$

32,150

$

41,035

 

$

22,290

 

69.3

%

$

13,405

 

32.7

%

 
Per share data
Earnings per share - basic

$

0.86

 

$

0.51

$

0.64

 

$

0.35

 

68.6

%

$

0.22

 

34.4

%

 
Earnings per share - diluted

$

0.86

 

$

0.51

$

0.64

 

$

0.35

 

68.6

%

$

0.22

 

34.4

%

 
Dividends per share

$

0.23

 

$

0.23

$

0.23

 

 

—

 

0.0

%

 

—

 

0.0

%

 
Weighted average shares outstanding
Basic

 

63,422,692

 

 

63,416,307

 

64,358,540

 

 
Diluted

 

63,581,964

 

 

63,555,065

 

64,514,605

 

 
Period end shares outstanding

 

63,423,820

 

 

63,422,439

 

64,262,779

 

(1)

See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.
 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2020
($ in thousands)
(unaudited)
Quarter EndedLinked QuarterYear over Year
NONPERFORMING ASSETS (1)9/30/20206/30/20209/30/2019$ Change% Change$ Change% Change
Nonaccrual LHFI
Alabama

$

3,860

 

$

4,392

 

$

2,936

 

$

(532

)

-12.1

%

$

924

 

31.5

%

Florida

 

617

 

 

687

 

 

311

 

 

(70

)

-10.2

%

 

306

 

98.4

%

Mississippi (2)

 

35,617

 

 

37,884

 

 

43,895

 

 

(2,267

)

-6.0

%

 

(8,278

)

-18.9

%

Tennessee (3)

 

13,041

 

 

6,125

 

 

10,193

 

 

6,916

 

n/m

 

 

2,848

 

27.9

%

Texas

 

721

 

 

906

 

 

1,695

 

 

(185

)

-20.4

%

 

(974

)

-57.5

%

Total nonaccrual LHFI

 

53,856

 

 

49,994

 

 

59,030

 

 

3,862

 

7.7

%

 

(5,174

)

-8.8

%

Other real estate
Alabama

 

3,725

 

 

4,766

 

 

6,501

 

 

(1,041

)

-21.8

%

 

(2,776

)

-42.7

%

Florida

 

3,665

 

 

3,665

 

 

6,983

 

 

—

 

0.0

%

 

(3,318

)

-47.5

%

Mississippi (2)

 

8,718

 

 

9,408

 

 

17,646

 

 

(690

)

-7.3

%

 

(8,928

)

-50.6

%

Tennessee (3)

 

140

 

 

437

 

 

844

 

 

(297

)

-68.0

%

 

(704

)

-83.4

%

Texas

 

—

 

 

—

 

 

—

 

 

—

 

n/m

 

 

—

 

n/m

 

Total other real estate

 

16,248

 

 

18,276

 

 

31,974

 

 

(2,028

)

-11.1

%

 

(15,726

)

-49.2

%

Total nonperforming assets

$

70,104

 

$

68,270

 

$

91,004

 

$

1,834

 

2.7

%

$

(20,900

)

-23.0

%

 
LOANS PAST DUE OVER 90 DAYS (1)
LHFI

$

782

 

$

807

 

$

878

 

$

(25

)

-3.1

%

$

(96

)

-10.9

%

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

$

121,281

 

$

56,269

 

$

36,445

 

$

65,012

 

n/m

 

$

84,836

 

n/m

 

 
Quarter EndedLinked QuarterYear over Year
ACL LHFI (1)(4)9/30/20206/30/20209/30/2019$ Change% Change$ Change% Change
Beginning Balance

$

119,188

 

$

100,564

 

$

80,399

 

$

18,624

 

18.5

%

$

38,789

 

48.2

%

CECL adoption adjustments:
LHFI

 

—

 

 

—

 

 

—

 

 

—

 

n/m

 

 

—

 

n/m

 

Acquired loan transfers

 

—

 

 

—

 

 

—

 

 

—

 

n/m

 

 

—

 

n/m

 

Provision for credit losses

 

1,760

 

 

18,185

 

 

3,039

 

 

(16,425

)

-90.3

%

 

(1,279

)

-42.1

%

Charge-offs

 

(1,263

)

 

(1,870

)

 

(2,892

)

 

607

 

32.5

%

 

1,629

 

56.3

%

Recoveries

 

2,325

 

 

2,309

 

 

2,680

 

 

16

 

0.7

%

 

(355

)

-13.2

%

Net (charge-offs) recoveries

 

1,062

 

 

439

 

 

(212

)

 

623

 

n/m

 

 

1,274

 

n/m

 

Ending Balance

$

122,010

 

$

119,188

 

$

83,226

 

$

2,822

 

2.4

%

$

38,784

 

46.6

%

 
NET (CHARGE-OFFS) RECOVERIES (1)
Alabama

$

117

 

$

526

 

$

(329

)

$

(409

)

-77.8

%

$

446

 

n/m

 

Florida

 

387

 

 

(127

)

 

136

 

 

514

 

n/m

 

 

251

 

n/m

 

Mississippi (2)

 

442

 

 

(86

)

 

391

 

 

528

 

n/m

 

 

51

 

13.0

%

Tennessee (3)

 

42

 

 

66

 

 

(483

)

 

(24

)

-36.4

%

 

525

 

n/m

 

Texas

 

74

 

 

60

 

 

73

 

 

14

 

23.3

%

 

1

 

1.4

%

Total net (charge-offs) recoveries

$

1,062

 

$

439

 

$

(212

)

$

623

 

n/m

 

$

1,274

 

n/m

 

(1)

Excludes PPP and acquired loans.

(2)

Mississippi includes Central and Southern Mississippi Regions.

(3)

Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.

(4)

See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.
 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2020
($ in thousands)
(unaudited)
Quarter EndedNine Months Ended
AVERAGE BALANCES9/30/20206/30/20203/31/202012/31/20199/30/20199/30/20209/30/2019
Securities AFS-taxable

$

1,857,050

 

$

1,724,320

 

$

1,620,422

 

$

1,551,358

 

$

1,570,803

 

$

1,734,380

 

$

1,661,177

 

Securities AFS-nontaxable

 

5,973

 

 

9,827

 

 

22,056

 

 

23,300

 

 

25,096

 

 

12,594

 

 

32,188

 

Securities HTM-taxable

 

608,585

 

 

655,085

 

 

694,740

 

 

734,474

 

 

778,098

 

 

652,642

 

 

821,716

 

Securities HTM-nontaxable

 

25,508

 

 

25,538

 

 

25,673

 

 

25,703

 

 

26,088

 

 

25,573

 

 

27,268

 

Total securities

 

2,497,116

 

 

2,414,770

 

 

2,362,891

 

 

2,334,835

 

 

2,400,085

 

 

2,425,189

 

 

2,542,349

 

PPP loans

 

941,456

 

 

764,416

 

 

—

 

 

—

 

 

—

 

 

569,985

 

 

—

 

Loans (includes loans held for sale) (1)

 

10,162,379

 

 

9,908,132

 

 

9,678,174

 

 

9,467,437

 

 

9,436,287

 

 

9,917,127

 

 

9,246,298

 

Acquired loans (1)

 

—

 

 

—

 

 

—

 

 

77,797

 

 

82,641

 

 

—

 

 

92,645

 

Fed funds sold and reverse repurchases

 

301

 

 

113

 

 

164

 

 

184

 

 

3,662

 

 

193

 

 

12,678

 

Other earning assets

 

722,917

 

 

854,642

 

 

187,327

 

 

227,116

 

 

176,163

 

 

588,787

 

 

245,173

 

Total earning assets

 

14,324,169

 

 

13,942,073

 

 

12,228,556

 

 

12,107,369

 

 

12,098,838

 

 

13,501,281

 

 

12,139,143

 

ACL LHFI (1)

 

(121,842

)

 

(103,006

)

 

(85,015

)

 

(86,211

)

 

(83,756

)

 

(103,355

)

 

(82,665

)

Other assets

 

1,564,825

 

 

1,685,317

 

 

1,498,725

 

 

1,445,075

 

 

1,447,977

 

 

1,582,888

 

 

1,454,350

 

Total assets

$

15,767,152

 

$

15,524,384

 

$

13,642,266

 

$

13,466,233

 

$

13,463,059

 

$

14,980,814

 

$

13,510,828

 

 
Interest-bearing demand deposits

$

3,669,249

 

$

3,832,372

 

$

3,184,134

 

$

3,167,256

 

$

3,085,758

 

$

3,562,310

 

$

3,012,049

 

Savings deposits

 

4,416,046

 

 

4,180,540

 

 

3,646,936

 

 

3,448,899

 

 

3,568,403

 

 

4,082,396

 

 

3,718,008

 

Time deposits

 

1,507,348

 

 

1,578,737

 

 

1,617,307

 

 

1,663,741

 

 

1,753,083

 

 

1,567,577

 

 

1,824,431

 

Total interest-bearing deposits

 

9,592,643

 

 

9,591,649

 

 

8,448,377

 

 

8,279,896

 

 

8,407,244

 

 

9,212,283

 

 

8,554,488

 

Fed funds purchased and repurchases

 

84,077

 

 

105,696

 

 

247,513

 

 

164,754

 

 

142,064

 

 

145,537

 

 

92,771

 

Other borrowings

 

167,262

 

 

107,533

 

 

85,279

 

 

79,512

 

 

78,404

 

 

120,197

 

 

83,475

 

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

Total interest-bearing liabilities

 

9,905,838

 

 

9,866,734

 

 

8,843,025

 

 

8,586,018

 

 

8,689,568

 

 

9,539,873

 

 

8,792,590

 

Noninterest-bearing deposits

 

3,921,867

 

 

3,645,761

 

 

2,910,951

 

 

3,017,824

 

 

2,932,754

 

 

3,494,425

 

 

2,885,478

 

Other liabilities

 

244,544

 

 

346,173

 

 

248,220

 

 

205,786

 

 

206,091

 

 

279,517

 

 

222,404

 

Total liabilities

 

14,072,249

 

 

13,858,668

 

 

12,002,196

 

 

11,809,628

 

 

11,828,413

 

 

13,313,815

 

 

11,900,472

 

Shareholders' equity

 

1,694,903

 

 

1,665,716

 

 

1,640,070

 

 

1,656,605

 

 

1,634,646

 

 

1,666,999

 

 

1,610,356

 

Total liabilities and equity

$

15,767,152

 

$

15,524,384

 

$

13,642,266

 

$

13,466,233

 

$

13,463,059

 

$

14,980,814

 

$

13,510,828

 

(1)

See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.
 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2020
($ in thousands)
(unaudited)
 
PERIOD END BALANCES9/30/20206/30/20203/31/202012/31/20199/30/2019
Cash and due from banks

$

564,588

 

$

1,026,640

 

$

404,341

 

$

358,916

 

$

486,263

 

Fed funds sold and reverse repurchases

 

50

 

 

—

 

 

2,000

 

 

—

 

 

—

 

Securities available for sale

 

1,922,728

 

 

1,884,153

 

 

1,833,779

 

 

1,602,404

 

 

1,553,705

 

Securities held to maturity

 

611,280

 

 

660,048

 

 

704,276

 

 

738,099

 

 

785,422

 

PPP loans

 

944,270

 

 

939,783

 

 

—

 

 

—

 

 

—

 

Loans held for sale (LHFS)

 

485,103

 

 

355,089

 

 

325,389

 

 

226,347

 

 

292,800

 

Loans held for investment (LHFI) (1)

 

9,847,728

 

 

9,659,806

 

 

9,567,920

 

 

9,335,628

 

 

9,223,668

 

ACL LHFI (1)

 

(122,010

)

 

(119,188

)

 

(100,564

)

 

(84,277

)

 

(83,226

)

Net LHFI

 

9,725,718

 

 

9,540,618

 

 

9,467,356

 

 

9,251,351

 

 

9,140,442

 

Acquired loans (1)

 

—

 

 

—

 

 

—

 

 

72,601

 

 

81,004

 

Allowance for loan losses, acquired loans (1)

 

—

 

 

—

 

 

—

 

 

(815

)

 

(1,249

)

Net acquired loans

 

—

 

 

—

 

 

—

 

 

71,786

 

 

79,755

 

Net LHFI and acquired loans

 

9,725,718

 

 

9,540,618

 

 

9,467,356

 

 

9,323,137

 

 

9,220,197

 

Premises and equipment, net

 

192,722

 

 

190,567

 

 

190,179

 

 

189,791

 

 

188,423

 

Mortgage servicing rights

 

61,613

 

 

57,811

 

 

56,437

 

 

79,394

 

 

73,016

 

Goodwill

 

385,270

 

 

385,270

 

 

381,717

 

 

379,627

 

 

379,627

 

Identifiable intangible assets

 

8,142

 

 

8,895

 

 

7,537

 

 

7,343

 

 

8,345

 

Other real estate

 

16,248

 

 

18,276

 

 

24,847

 

 

29,248

 

 

31,974

 

Operating lease right-of-use assets

 

30,508

 

 

29,819

 

 

30,839

 

 

31,182

 

 

33,180

 

Other assets

 

609,922

 

 

595,110

 

 

591,132

 

 

532,389

 

 

531,834

 

Total assets

$

15,558,162

 

$

15,692,079

 

$

14,019,829

 

$

13,497,877

 

$

13,584,786

 

 
Deposits:
Noninterest-bearing

$

3,964,023

 

$

3,880,540

 

$

2,977,058

 

$

2,891,215

 

$

3,064,127

 

Interest-bearing

 

9,258,390

 

 

9,624,933

 

 

8,598,706

 

 

8,354,342

 

 

8,190,056

 

Total deposits

 

13,222,413

 

 

13,505,473

 

 

11,575,764

 

 

11,245,557

 

 

11,254,183

 

Fed funds purchased and repurchases

 

153,834

 

 

70,255

 

 

421,821

 

 

256,020

 

 

376,712

 

Other borrowings

 

178,599

 

 

152,860

 

 

84,230

 

 

85,396

 

 

76,685

 

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

ACL on off-balance sheet credit exposures (1)

 

39,659

 

 

42,663

 

 

36,421

 

 

—

 

 

—

 

Operating lease liabilities

 

31,838

 

 

31,076

 

 

32,055

 

 

32,354

 

 

34,319

 

Other liabilities

 

159,922

 

 

153,952

 

 

155,283

 

 

155,992

 

 

135,669

 

Total liabilities

 

13,848,121

 

 

14,018,135

 

 

12,367,430

 

 

11,837,175

 

 

11,939,424

 

Common stock

 

13,215

 

 

13,214

 

 

13,209

 

 

13,376

 

 

13,390

 

Capital surplus

 

231,836

 

 

230,613

 

 

229,403

 

 

256,400

 

 

257,370

 

Retained earnings

 

1,459,306

 

 

1,419,552

 

 

1,402,089

 

 

1,414,526

 

 

1,395,460

 

Accum other comprehensive income (loss), net of tax

 

5,684

 

 

10,565

 

 

7,698

 

 

(23,600

)

 

(20,858

)

Total shareholders' equity

 

1,710,041

 

 

1,673,944

 

 

1,652,399

 

 

1,660,702

 

 

1,645,362

 

Total liabilities and equity

$

15,558,162

 

$

15,692,079

 

$

14,019,829

 

$

13,497,877

 

$

13,584,786

 

(1)

See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.
 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2020
($ in thousands except per share data)
(unaudited)
 
 
Quarter EndedNine Months Ended
INCOME STATEMENTS9/30/20206/30/20203/31/202012/31/20199/30/20199/30/20209/30/2019
Interest and fees on LHFS & LHFI-FTE

$

97,429

 

$

99,300

$

109,357

$

111,383

 

$

116,432

 

$

306,086

$

341,195

Interest and fees on PPP loans

 

6,729

 

 

5,044

 

—

 

—

 

 

—

 

 

11,773

 

—

Interest and fees on acquired loans (1)

 

—

 

 

—

 

—

 

2,138

 

 

2,309

 

 

—

 

6,235

Interest on securities-taxable

 

12,542

 

 

12,762

 

12,948

 

12,884

 

 

13,184

 

 

38,252

 

41,765

Interest on securities-tax exempt-FTE

 

301

 

 

315

 

457

 

484

 

 

485

 

 

1,073

 

1,682

Interest on fed funds sold and reverse repurchases

 

1

 

 

—

 

—

 

1

 

 

23

 

 

1

 

239

Other interest income

 

331

 

 

239

 

740

 

896

 

 

1,044

 

 

1,310

 

4,467

Total interest income-FTE

 

117,333

 

 

117,660

 

123,502

 

127,786

 

 

133,477

 

 

358,495

 

395,583

Interest on deposits

 

7,437

 

 

8,730

 

14,957

 

17,716

 

 

20,385

 

 

31,124

 

61,455

Interest on fed funds purchased and repurchases

 

32

 

 

42

 

625

 

504

 

 

547

 

 

699

 

916

Other interest expense

 

688

 

 

881

 

860

 

826

 

 

830

 

 

2,429

 

2,486

Total interest expense

 

8,157

 

 

9,653

 

16,442

 

19,046

 

 

21,762

 

 

34,252

 

64,857

Net interest income-FTE

 

109,176

 

 

108,007

 

107,060

 

108,740

 

 

111,715

 

 

324,243

 

330,726

Provision for credit losses, LHFI (1)

 

1,760

 

 

18,185

 

20,581

 

3,661

 

 

3,039

 

 

40,526

 

7,136

Provision for loan losses, acquired loans (1)

 

—

 

 

—

 

—

 

(2

)

 

(140

)

 

—

 

44

Net interest income after provision-FTE

 

107,416

 

 

89,822

 

86,479

 

105,081

 

 

108,816

 

 

283,717

 

323,546

Service charges on deposit accounts

 

7,577

 

 

6,397

 

10,032

 

10,894

 

 

11,065

 

 

24,006

 

31,709

Bank card and other fees

 

8,843

 

 

7,717

 

5,355

 

8,192

 

 

8,349

 

 

21,915

 

23,544

Mortgage banking, net

 

36,439

 

 

33,745

 

27,483

 

7,914

 

 

8,171

 

 

97,667

 

21,908

Insurance commissions

 

11,562

 

 

11,868

 

11,550

 

9,364

 

 

11,072

 

 

34,980

 

33,032

Wealth management

 

7,679

 

 

7,571

 

8,537

 

7,763

 

 

7,691

 

 

23,787

 

22,916

Other, net

 

1,601

 

 

2,213

 

2,307

 

3,451

 

 

1,989

 

 

6,121

 

6,358

Total noninterest income

 

73,701

 

 

69,511

 

65,264

 

47,578

 

 

48,337

 

 

208,476

 

139,467

Salaries and employee benefits

 

67,342

 

 

66,107

 

69,148

 

62,319

 

 

62,495

 

 

202,597

 

185,398

Services and fees

 

20,992

 

 

20,567

 

19,930

 

19,500

 

 

18,838

 

 

61,489

 

53,815

Net occupancy-premises

 

7,000

 

 

6,587

 

6,286

 

6,461

 

 

6,831

 

 

19,873

 

19,688

Equipment expense

 

5,828

 

 

5,620

 

5,616

 

5,880

 

 

5,971

 

 

17,064

 

17,853

Other real estate expense, net

 

1,203

 

 

271

 

1,294

 

1,491

 

 

531

 

 

2,768

 

2,415

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

 

(3,004

)

 

6,242

 

6,783

 

—

 

 

—

 

 

10,021

 

—

Other expense

 

14,598

 

 

13,265

 

14,753

 

14,376

 

 

12,187

 

 

42,616

 

39,806

Total noninterest expense

 

113,959

 

 

118,659

 

123,810

 

110,027

 

 

106,853

 

 

356,428

 

318,975

Income before income taxes and tax eq adj

 

67,158

 

 

40,674

 

27,933

 

42,632

 

 

50,300

 

 

135,765

 

144,038

Tax equivalent adjustment

 

2,969

 

 

3,007

 

3,108

 

3,149

 

 

3,249

 

 

9,084

 

9,728

Income before income taxes

 

64,189

 

 

37,667

 

24,825

 

39,483

 

 

47,051

 

 

126,681

 

134,310

Income taxes

 

9,749

 

 

5,517

 

2,607

 

5,537

 

 

6,016

 

 

17,873

 

17,796

Net income

$

54,440

 

$

32,150

$

22,218

$

33,946

 

$

41,035

 

$

108,808

$

116,514

 
Per share data
Earnings per share - basic

$

0.86

 

$

0.51

$

0.35

$

0.53

 

$

0.64

 

$

1.71

$

1.80

 
Earnings per share - diluted

$

0.86

 

$

0.51

$

0.35

$

0.53

 

$

0.64

 

$

1.71

$

1.80

 
Dividends per share

$

0.23

 

$

0.23

$

0.23

$

0.23

 

$

0.23

 

$

0.69

$

0.69

 
Weighted average shares outstanding
Basic

 

63,422,692

 

 

63,416,307

 

63,756,629

 

64,255,716

 

 

64,358,540

 

 

63,531,478

 

64,755,406

 
Diluted

 

63,581,964

 

 

63,555,065

 

63,913,603

 

64,435,276

 

 

64,514,605

 

 

63,665,127

 

64,889,916

 
Period end shares outstanding

 

63,423,820

 

 

63,422,439

 

63,396,912

 

64,200,111

 

 

64,262,779

 

 

63,423,820

 

64,262,779

(1)

See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.
 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2020
($ in thousands)
(unaudited)
 
 
Quarter Ended
NONPERFORMING ASSETS (1)9/30/20206/30/20203/31/202012/31/20199/30/2019
Nonaccrual LHFI
Alabama

$

3,860

 

$

4,392

 

$

4,769

 

$

1,870

 

$

2,936

 

Florida

 

617

 

 

687

 

 

254

 

 

267

 

 

311

 

Mississippi (2)

 

35,617

 

 

37,884

 

 

40,815

 

 

41,493

 

 

43,895

 

Tennessee (3)

 

13,041

 

 

6,125

 

 

6,153

 

 

8,980

 

 

10,193

 

Texas

 

721

 

 

906

 

 

1,001

 

 

616

 

 

1,695

 

Total nonaccrual LHFI

 

53,856

 

 

49,994

 

 

52,992

 

 

53,226

 

 

59,030

 

Other real estate
Alabama

 

3,725

 

 

4,766

 

 

6,229

 

 

8,133

 

 

6,501

 

Florida

 

3,665

 

 

3,665

 

 

4,835

 

 

5,877

 

 

6,983

 

Mississippi (2)

 

8,718

 

 

9,408

 

 

13,296

 

 

14,919

 

 

17,646

 

Tennessee (3)

 

140

 

 

437

 

 

487

 

 

319

 

 

844

 

Texas

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Total other real estate

 

16,248

 

 

18,276

 

 

24,847

 

 

29,248

 

 

31,974

 

Total nonperforming assets

$

70,104

 

$

68,270

 

$

77,839

 

$

82,474

 

$

91,004

 

 
LOANS PAST DUE OVER 90 DAYS (1)
LHFI

$

782

 

$

807

 

$

708

 

$

642

 

$

878

 

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

$

121,281

 

$

56,269

 

$

43,564

 

$

41,648

 

$

36,445

 

 
 
Quarter EndedNine Months Ended
ACL LHFI (1)(4)9/30/20206/30/20203/31/202012/31/20199/30/20199/30/20209/30/2019
Beginning Balance

$

119,188

 

$

100,564

 

$

84,277

 

$

83,226

 

$

80,399

 

$

84,277

 

$

79,290

 

CECL adoption adjustments:
LHFI

 

—

 

 

—

 

 

(3,039

)

 

—

 

 

—

 

 

(3,039

)

 

—

 

Acquired loan transfers

 

—

 

 

—

 

 

1,822

 

 

—

 

 

—

 

 

1,822

 

 

—

 

Provision for credit losses

 

1,760

 

 

18,185

 

 

20,581

 

 

3,661

 

 

3,039

 

 

40,526

 

 

7,136

 

Charge-offs

 

(1,263

)

 

(1,870

)

 

(5,545

)

 

(4,619

)

 

(2,892

)

 

(8,678

)

 

(9,862

)

Recoveries

 

2,325

 

 

2,309

 

 

2,468

 

 

2,009

 

 

2,680

 

 

7,102

 

 

6,662

 

Net (charge-offs) recoveries

 

1,062

 

 

439

 

 

(3,077

)

 

(2,610

)

 

(212

)

 

(1,576

)

 

(3,200

)

Ending Balance

$

122,010

 

$

119,188

 

$

100,564

 

$

84,277

 

$

83,226

 

$

122,010

 

$

83,226

 

 
NET (CHARGE-OFFS) RECOVERIES (1)
Alabama

$

117

 

$

526

 

$

(1,080

)

$

(132

)

$

(329

)

$

(437

)

$

(622

)

Florida

 

387

 

 

(127

)

 

64

 

 

357

 

 

136

 

 

324

 

 

493

 

Mississippi (2)

 

442

 

 

(86

)

 

126

 

 

(1,792

)

 

391

 

 

482

 

 

(2,646

)

Tennessee (3)

 

42

 

 

66

 

 

(2,186

)

 

(131

)

 

(483

)

 

(2,078

)

 

(577

)

Texas

 

74

 

 

60

 

 

(1

)

 

(912

)

 

73

 

 

133

 

 

152

 

Total net (charge-offs) recoveries

$

1,062

 

$

439

 

$

(3,077

)

$

(2,610

)

$

(212

)

$

(1,576

)

$

(3,200

)

(1)

Excludes PPP and acquired loans.

(2)

Mississippi includes Central and Southern Mississippi Regions.

(3)

Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.

(4)

See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.
 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2020
(unaudited)
 
Quarter EndedNine Months Ended
FINANCIAL RATIOS AND OTHER DATA9/30/20206/30/20203/31/202012/31/20199/30/20199/30/20209/30/2019
Return on average equity

 

12.78

%

 

7.76

%

 

5.45

%

 

8.13

%

 

9.96

%

8.72

%

9.67

%

Return on average tangible equity

 

16.82

%

 

10.32

%

 

7.34

%

 

10.85

%

 

13.31

%

11.57

%

13.01

%

Return on average assets

 

1.37

%

 

0.83

%

 

0.66

%

 

1.00

%

 

1.21

%

0.97

%

1.15

%

Interest margin - Yield - FTE

 

3.26

%

 

3.39

%

 

4.06

%

 

4.19

%

 

4.38

%

3.55

%

4.36

%

Interest margin - Cost

 

0.23

%

 

0.28

%

 

0.54

%

 

0.62

%

 

0.71

%

0.34

%

0.71

%

Net interest margin - FTE

 

3.03

%

 

3.12

%

 

3.52

%

 

3.56

%

 

3.66

%

3.21

%

3.64

%

Efficiency ratio (1)

 

62.19

%

 

62.13

%

 

63.50

%

 

68.08

%

 

64.98

%

62.59

%

65.82

%

Full-time equivalent employees

 

2,807

 

 

2,798

 

 

2,761

 

 

2,844

 

 

2,835

 

 
CREDIT QUALITY RATIOS (2)
Net (recoveries) charge-offs / average loans

 

-0.04

%

 

-0.02

%

 

0.13

%

 

0.11

%

 

0.01

%

0.02

%

0.05

%

Provision for credit losses / average loans (3)

 

0.07

%

 

0.74

%

 

0.86

%

 

0.15

%

 

0.13

%

0.55

%

0.10

%

Nonaccrual LHFI / (LHFI + LHFS)

 

0.52

%

 

0.50

%

 

0.54

%

 

0.56

%

 

0.62

%

Nonperforming assets / (LHFI + LHFS)

 

0.68

%

 

0.68

%

 

0.79

%

 

0.86

%

 

0.96

%

Nonperforming assets / (LHFI + LHFS + other real estate)

 

0.68

%

 

0.68

%

 

0.78

%

 

0.86

%

 

0.95

%

ACL LHFI / LHFI (3)

 

1.24

%

 

1.23

%

 

1.05

%

 

0.90

%

 

0.90

%

ACL LHFI-commercial / commercial LHFI (3)

 

1.20

%

 

1.15

%

 

0.97

%

 

0.98

%

 

0.98

%

ACL LHFI-consumer / consumer and home mortgage LHFI (3)

 

1.41

%

 

1.56

%

 

1.35

%

 

0.61

%

 

0.61

%

ACL LHFI / nonaccrual LHFI (3)

 

226.55

%

 

238.40

%

 

189.77

%

 

158.34

%

 

140.99

%

ACL LHFI / nonaccrual LHFI (excl individually evaluated loans) (3)

 

593.72

%

 

561.04

%

 

468.84

%

 

410.52

%

 

357.15

%

 
CAPITAL RATIOS (3)
Total equity / total assets

 

10.99

%

 

10.67

%

 

11.79

%

 

12.30

%

 

12.11

%

Tangible equity / tangible assets

 

8.68

%

 

8.37

%

 

9.27

%

 

9.72

%

 

9.53

%

Tangible equity / risk-weighted assets

 

11.01

%

 

11.09

%

 

11.05

%

 

11.58

%

 

11.50

%

Tier 1 leverage ratio

 

9.20

%

 

9.08

%

 

10.21

%

 

10.48

%

 

10.34

%

Common equity tier 1 capital ratio

 

11.36

%

 

11.42

%

 

11.35

%

 

11.93

%

 

11.83

%

Tier 1 risk-based capital ratio

 

11.86

%

 

11.94

%

 

11.88

%

 

12.48

%

 

12.38

%

Total risk-based capital ratio

 

12.88

%

 

13.00

%

 

12.78

%

 

13.25

%

 

13.15

%

 
STOCK PERFORMANCE
Market value-Close

$

21.41

 

$

24.52

 

$

23.30

 

$

34.51

 

$

34.11

 

Book value

$

26.96

 

$

26.39

 

$

26.06

 

$

25.87

 

$

25.60

 

Tangible book value

$

20.76

 

$

20.18

 

$

19.92

 

$

19.84

 

$

19.57

 

(1)

See Note 9 – Non-GAAP Financial Measures in the Notes to Consolidated Financials for Trustmark’s efficiency ratio calculation.

(2)

Excludes PPP and acquired loans.

(3)

See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.
 
See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

September 30, 2020

($ in thousands)

(unaudited)

Note 1 – Recently Effective Accounting Pronouncements

ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” was adopted by Trustmark on January 1, 2020. At the date of adoption, Trustmark recorded a decrease to its ACL, LHFI of $3.0 million and an increase to its ACL on off-balance sheet credit exposures of $29.6 million resulting in a one-time cumulative effect adjustment of $26.6 million ($19.9 million, net of tax) through retained earnings.

In accordance with the amendments of ASU 2016-13, Trustmark estimates the ACL using relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts including the COVID-19 pandemic effects. Trustmark uses a third-party software application to calculate the quantitative portion of the ACL using a methodology and assumptions specific to each loan pool. The qualitative portion of the ACL is based on general economic conditions and other internal and external factors affecting Trustmark as a whole as well as specific LHFI. The total quantitative and qualitative portions of the ACL reflect Management’s expectations of future conditions based on reasonable and supportable forecasts.

Based upon the factors discussed above, during the third quarter of 2020, Trustmark recorded a provision for credit losses of $1.8 million and a negative credit loss expense related to off-balance sheet credit exposures of $3.0 million compared to a provision for credit losses of $18.2 million and a credit loss expense related to off-balance sheet credit exposures of $6.2 million recorded during the second quarter of 2020.

Upon adoption of FASB ASC Topic 326, Trustmark elected to account for its existing acquired loans as purchased credit deteriorated loans included within the LHFI portfolio. As a result, acquired loans of $72.6 million, as well as the necessary calculated allowance of $1.8 million, were transferred during the first quarter of 2020. The acquired loans and related allowance transferred were acquired in the BancTrust Financial Group, Inc. merger on February 13, 2013. LHFI presented in prior periods exclude acquired loans and thus may not be comparable to the current period presentation.

In accordance with FASB ASC Subtopic 326-20, “Financial Instruments – Credit Losses – Measured at Amortized Cost,” Trustmark has developed an allowance for credit losses methodology effective January 1, 2020, which replaces its previous allowance for loan losses methodology. The ACL for LHFI is adjusted through the provision for credit losses and reduced by the charge off of loan amounts, net of recoveries. Prior periods present the allowance for loan losses and provision for loan losses methodology under the incurred loss model and thus may not be comparable to the current period presentation.

Trustmark’s estimated allowance for credit losses on securities available for sale and held to maturity under ASU 2016-13 was deemed immaterial due to the composition of these portfolios. Both portfolios consist primarily of U.S. government agency guaranteed mortgage-backed securities for which the risk of loss is minimal. Therefore, Trustmark did not recognize a cumulative effect adjustment through retained earnings related to the available for sale or held to maturity securities.

Trustmark has elected the five-year phase-in transition period related to adopting the CECL methodology for its regulatory capital.

Note 2 - Paycheck Protection Program

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), a stimulus package intended to provide relief to businesses and consumers in the United States struggling as a result of the pandemic, was signed into law. A provision in the CARES Act included a $349 billion fund for the creation of the Paycheck Protection Program (PPP) through the Small Business Administration (SBA) and Treasury Department. The PPP is intended to provide loans to small businesses to pay their employees, rent, mortgage interest and utilities. PPP loans are forgivable, in whole or in part, if the proceeds are used for payroll and other permitted purposes in accordance with the requirements of the PPP. If not forgiven, in whole or in part, these loans carry a fixed rate of 1.00% per annum with payments deferred for the first six months of the loan. Originally, the loans carried a term of two years under SBA rules implemented by the CARES Act, but a June 5, 2020 amendment to the CARES Act provided for a five-year minimum loan term for loans made beginning as of such date, and permitted lenders and borrowers to mutually agree to amend existing two-year loans to have terms of five to ten years. The loans are 100% guaranteed by the SBA. The SBA pays the originating bank a processing fee ranging from 1.0% to 5.0%, based on the size of the loan.

At September 30, 2020, Trustmark had outstanding 9,691 PPP loans totaling $944.3 million (net of $25.7 million of deferred fees and costs) with an average loan size of $100 thousand. Due to amount and nature of the PPP loans, these loans were not included in the LHFI portfolio and are presented separately in the accompanying consolidated balance sheets. The PPP loans are fully guaranteed by the SBA; therefore, no ACL was estimated for these loans.

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

September 30, 2020

($ in thousands)

(unaudited)

Note 3 - 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:

9/30/20206/30/20203/31/202012/31/20199/30/2019
SECURITIES AVAILABLE FOR SALE
U.S. Government agency obligations

$

19,011

$

19,898

$

21,190

$

22,327

$

24,697

Obligations of states and political subdivisions

 

8,315

 

11,176

 

23,572

 

25,465

 

35,001

Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA

 

62,156

 

69,637

 

71,971

 

69,252

 

63,391

Issued by FNMA and FHLMC

 

1,279,919

 

1,121,604

 

967,329

 

713,356

 

589,962

Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA

 

500,858

 

574,940

 

634,075

 

658,226

 

705,601

Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA

 

52,469

 

86,898

 

115,642

 

113,778

 

135,053

Total securities available for sale

$

1,922,728

$

1,884,153

$

1,833,779

$

1,602,404

$

1,553,705

 
SECURITIES HELD TO MATURITY
U.S. Government agency obligations

$

—

$

—

$

—

$

3,781

$

3,770

Obligations of states and political subdivisions

 

31,605

 

31,629

 

31,758

 

31,781

 

31,806

Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA

 

8,244

 

10,306

 

10,492

 

10,820

 

10,994

Issued by FNMA and FHLMC

 

78,213

 

86,346

 

91,971

 

96,631

 

102,048

Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA

 

399,400

 

435,333

 

463,175

 

485,324

 

510,770

Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA

 

93,818

 

96,434

 

106,880

 

109,762

 

126,034

Total securities held to maturity

$

611,280

$

660,048

$

704,276

$

738,099

$

785,422

At September 30, 2020, the net unamortized, unrealized loss included in accumulated other comprehensive income (loss) in the accompanying balance sheet for securities held to maturity previously transferred from securities available for sale totaled approximately $9.7 million ($7.3 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 98.4% 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.

Note 4 – Loan Composition

LHFI consisted of the following during the periods presented:

LHFI BY TYPE (1)9/30/20206/30/20203/31/202012/31/20199/30/2019
Loans secured by real estate:
Construction, land development and other land loans

$

1,385,947

 

$

1,277,277

 

$

1,136,389

 

$

1,162,791

 

$

1,135,999

 

Secured by 1-4 family residential properties

 

1,775,400

 

 

1,813,525

 

 

1,852,065

 

 

1,855,913

 

 

1,820,455

 

Secured by nonfarm, nonresidential properties

 

2,707,627

 

 

2,610,392

 

 

2,575,422

 

 

2,475,245

 

 

2,442,308

 

Other real estate secured

 

887,792

 

 

884,815

 

 

838,573

 

 

724,480

 

 

668,667

 

Commercial and industrial loans

 

1,398,468

 

 

1,413,255

 

 

1,476,777

 

 

1,477,896

 

 

1,491,367

 

Consumer loans

 

160,960

 

 

161,620

 

 

170,678

 

 

175,738

 

 

176,894

 

State and other political subdivision loans

 

935,349

 

 

931,536

 

 

938,637

 

 

967,944

 

 

978,456

 

Other loans

 

596,185

 

 

567,386

 

 

579,379

 

 

495,621

 

 

509,522

 

LHFI

 

9,847,728

 

 

9,659,806

 

 

9,567,920

 

 

9,335,628

 

 

9,223,668

 

ACL LHFI

 

(122,010

)

 

(119,188

)

 

(100,564

)

 

(84,277

)

 

(83,226

)

Net LHFI

$

9,725,718

 

$

9,540,618

 

$

9,467,356

 

$

9,251,351

 

$

9,140,442

 

 

(1)

See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

September 30, 2020

($ in thousands)

(unaudited)

Note 4 – Loan Composition (continued)

The following table presents the LHFI composition by region at September 30, 2020 and reflects each region’s diversified mix of loans:

 

 

September 30, 2020

 

LHFI - COMPOSITION BY REGION

 

Total

 

 

Alabama

 

 

Florida

 

 

Mississippi
(Central and
Southern
Regions)

 

 

Tennessee
(Memphis,
TN and
Northern MS
Regions)

 

 

Texas

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development and other land loans

 

$

1,385,947

 

 

$

417,037

 

 

$

106,909

 

 

$

323,508

 

 

$

25,941

 

 

$

512,552

 

Secured by 1-4 family residential properties

 

 

1,775,400

 

 

 

124,666

 

 

 

38,269

 

 

 

1,524,234

 

 

 

77,201

 

 

 

11,030

 

Secured by nonfarm, nonresidential properties

 

 

2,707,627

 

 

 

679,817

 

 

 

283,629

 

 

 

998,294

 

 

 

183,620

 

 

 

562,267

 

Other real estate secured

 

 

887,792

 

 

 

253,180

 

 

 

6,133

 

 

 

409,377

 

 

 

6,095

 

 

 

213,007

 

Commercial and industrial loans

 

 

1,398,468

 

 

 

183,024

 

 

 

23,617

 

 

 

717,164

 

 

 

302,111

 

 

 

172,552

 

Consumer loans

 

 

160,960

 

 

 

24,262

 

 

 

6,481

 

 

 

108,193

 

 

 

18,789

 

 

 

3,235

 

State and other political subdivision loans

 

 

935,349

 

 

 

86,610

 

 

 

37,106

 

 

 

623,607

 

 

 

37,366

 

 

 

150,660

 

Other loans

 

 

596,185

 

 

 

83,526

 

 

 

14,878

 

 

 

389,907

 

 

 

80,180

 

 

 

27,694

 

Loans

 

$

9,847,728

 

 

$

1,852,122

 

 

$

517,022

 

 

$

5,094,284

 

 

$

731,303

 

 

$

1,652,997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION

 

 

 

 

 

 

 

 

 

Lots

 

$

77,787

 

 

$

17,880

 

 

$

23,659

 

 

$

29,991

 

 

$

1,246

 

 

$

5,011

 

Development

 

 

72,903

 

 

 

24,010

 

 

 

6,155

 

 

 

30,424

 

 

 

5,264

 

 

 

7,050

 

Unimproved land

 

 

102,092

 

 

 

25,890

 

 

 

20,007

 

 

 

25,866

 

 

 

11,084

 

 

 

19,245

 

1-4 family construction

 

 

241,737

 

 

 

111,104

 

 

 

21,856

 

 

 

70,073

 

 

 

7,560

 

 

 

31,144

 

Other construction

 

 

891,428

 

 

 

238,153

 

 

 

35,232

 

 

 

167,154

 

 

 

787

 

 

 

450,102

 

Construction, land development and other land loans

 

$

1,385,947

 

 

$

417,037

 

 

$

106,909

 

 

$

323,508

 

 

$

25,941

 

 

$

512,552

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION

 

 

 

 

 

 

 

 

 

Non-owner occupied:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

$

415,168

 

 

$

142,452

 

 

$

38,484

 

 

$

133,673

 

 

$

26,868

 

 

$

73,691

 

Office

 

 

257,143

 

 

 

66,829

 

 

 

27,215

 

 

 

83,379

 

 

 

12,230

 

 

 

67,490

 

Hotel/motel

 

 

343,854

 

 

 

137,960

 

 

 

101,206

 

 

 

53,507

 

 

 

40,181

 

 

 

11,000

 

Mini-storage

 

 

120,173

 

 

 

20,676

 

 

 

3,572

 

 

 

56,772

 

 

 

405

 

 

 

38,748

 

Industrial

 

 

216,231

 

 

 

57,102

 

 

 

12,327

 

 

 

41,895

 

 

 

1,124

 

 

 

103,783

 

Health care

 

 

45,835

 

 

 

12,865

 

 

 

11,729

 

 

 

18,634

 

 

 

395

 

 

 

2,212

 

Convenience stores

 

 

16,214

 

 

 

3,366

 

 

 

—

 

 

 

3,223

 

 

 

392

 

 

 

9,233

 

Nursing homes/senior living

 

 

65,903

 

 

 

28,197

 

 

 

—

 

 

 

12,051

 

 

 

7,084

 

 

 

18,571

 

Other

 

 

61,932

 

 

 

4,608

 

 

 

7,167

 

 

 

17,054

 

 

 

6,120

 

 

 

26,983

 

Total non-owner occupied loans

 

 

1,542,453

 

 

 

474,055

 

 

 

201,700

 

 

 

420,188

 

 

 

94,799

 

 

 

351,711

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner-occupied:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

 

180,968

 

 

 

43,521

 

 

 

41,440

 

 

 

52,219

 

 

 

9,359

 

 

 

34,429

 

Churches

 

 

106,979

 

 

 

22,981

 

 

 

7,213

 

 

 

52,590

 

 

 

10,501

 

 

 

13,694

 

Industrial warehouses

 

 

165,356

 

 

 

13,234

 

 

 

2,869

 

 

 

50,088

 

 

 

16,784

 

 

 

82,381

 

Health care

 

 

127,692

 

 

 

17,162

 

 

 

4,975

 

 

 

101,319

 

 

 

2,462

 

 

 

1,774

 

Convenience stores

 

 

120,909

 

 

 

15,874

 

 

 

7,899

 

 

 

70,654

 

 

 

580

 

 

 

25,902

 

Retail

 

 

69,764

 

 

 

15,119

 

 

 

6,655

 

 

 

26,636

 

 

 

6,275

 

 

 

15,079

 

Restaurants

 

 

59,955

 

 

 

4,088

 

 

 

4,492

 

 

 

34,295

 

 

 

15,658

 

 

 

1,422

 

Auto dealerships

 

 

46,629

 

 

 

7,664

 

 

 

284

 

 

 

12,278

 

 

 

26,403

 

 

 

—

 

Nursing homes/senior living

 

 

181,803

 

 

 

61,368

 

 

 

—

 

 

 

120,435

 

 

 

—

 

 

 

—

 

Other

 

 

105,119

 

 

 

4,751

 

 

 

6,102

 

 

 

57,592

 

 

 

799

 

 

 

35,875

 

Total owner-occupied loans

 

 

1,165,174

 

 

 

205,762

 

 

 

81,929

 

 

 

578,106

 

 

 

88,821

 

 

 

210,556

 

Loans secured by nonfarm, nonresidential properties

 

$

2,707,627

 

 

$

679,817

 

 

$

283,629

 

 

$

998,294

 

 

$

183,620

 

 

$

562,267

 

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

September 30, 2020

($ in thousands)

(unaudited)

Note 5 – 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 EndedNine Months Ended
9/30/20206/30/20203/31/202012/31/20199/30/20199/30/20209/30/2019
Securities – taxable

2.02

%

2.16

%

2.25

%

2.24

%

2.23

%

2.14

%

2.25

%

Securities – nontaxable

3.80

%

3.58

%

3.85

%

3.92

%

3.76

%

3.76

%

3.78

%

Securities – total

2.05

%

2.18

%

2.28

%

2.27

%

2.26

%

2.17

%

2.28

%

PPP loans

2.84

%

2.65

%

—

 

—

 

—

 

2.76

%

—

 

Loans - LHFI & LHFS

3.81

%

4.03

%

4.54

%

4.67

%

4.90

%

4.12

%

4.93

%

Acquired loans

—

 

—

 

—

 

10.90

%

11.08

%

—

 

9.00

%

Loans - total

3.73

%

3.93

%

4.54

%

4.72

%

4.95

%

4.05

%

4.97

%

Fed funds sold & reverse repurchases

1.32

%

—

 

—

 

2.16

%

2.49

%

0.69

%

2.52

%

Other earning assets

0.18

%

0.11

%

1.59

%

1.57

%

2.35

%

0.30

%

2.44

%

Total earning assets

3.26

%

3.39

%

4.06

%

4.19

%

4.38

%

3.55

%

4.36

%

 
Interest-bearing deposits

0.31

%

0.37

%

0.71

%

0.85

%

0.96

%

0.45

%

0.96

%

Fed funds purchased & repurchases

0.15

%

0.16

%

1.02

%

1.21

%

1.53

%

0.64

%

1.32

%

Other borrowings

1.19

%

2.09

%

2.35

%

2.32

%

2.35

%

1.78

%

2.29

%

Total interest-bearing liabilities

0.33

%

0.39

%

0.75

%

0.88

%

0.99

%

0.48

%

0.99

%

 
Net interest margin

3.03

%

3.12

%

3.52

%

3.56

%

3.66

%

3.21

%

3.64

%

Net interest margin excluding PPP and acquired loans

3.05

%

3.14

%

3.52

%

3.52

%

3.61

%

3.23

%

3.60

%

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 and acquired loans, which equals reported net interest income-FTE excluding interest income on PPP and acquired loans, annualized, as a percent of average earning assets excluding average PPP and acquired loans.

The net interest margin excluding PPP and acquired loans totaled 3.05% for the third quarter of 2020, a decrease of 9 basis points when compared to the second quarter of 2020. Continued low interest rates decreased the yield on the loans held for investment and held for sale portfolio as well as the securities portfolio and were partially offset by lower costs of interest-bearing deposits.

Note 6 – 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 positive ineffectiveness of $815 thousand during the third quarter of 2020.

The following table illustrates the components of mortgage banking revenues included in noninterest income in the accompanying income statements:

Quarter EndedNine Months Ended
9/30/20206/30/20203/31/202012/31/20199/30/20199/30/20209/30/2019
Mortgage servicing income, net

$

5,742

 

$

5,893

 

$

5,819

 

$

5,854

 

$

5,688

 

$

17,454

 

$

17,029

 

Change in fair value-MSR from runoff

 

(4,590

)

 

(4,214

)

 

(2,607

)

 

(2,950

)

 

(3,569

)

 

(11,411

)

 

(8,885

)

Gain on sales of loans, net

 

34,472

 

 

34,078

 

 

14,339

 

 

7,984

 

 

9,799

 

 

82,889

 

 

22,312

 

Mortgage banking income before hedge ineffectiveness

 

35,624

 

 

35,757

 

 

17,551

 

 

10,888

 

 

11,918

 

 

88,932

 

 

30,456

 

Change in fair value-MSR from market changes

 

60

 

 

(3,159

)

 

(23,999

)

 

4,048

 

 

(8,054

)

 

(27,098

)

 

(25,126

)

Change in fair value of derivatives

 

755

 

 

1,147

 

 

33,931

 

 

(7,022

)

 

4,307

 

 

35,833

 

 

16,578

 

Net positive (negative) hedge ineffectiveness

 

815

 

 

(2,012

)

 

9,932

 

 

(2,974

)

 

(3,747

)

 

8,735

 

 

(8,548

)

Mortgage banking, net

$

36,439

 

$

33,745

 

$

27,483

 

$

7,914

 

$

8,171

 

$

97,667

 

$

21,908

 

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

September 30, 2020

($ in thousands)

(unaudited)

Note 7 – Salaries and Employee Benefit Plans

Early Retirement Program

In January 2020, Trustmark announced a voluntary early retirement program for associates age 60 and above with five or more years of continuous service. The cost of this program is reflected in a one-time, pre-tax charge of approximately $4.4 million (salaries and benefits of $4.3 million and other miscellaneous expense of $102 thousand; or $0.05 per basic share net of tax) in Trustmark’s first quarter 2020 earnings. The pre-tax salary and employee benefits expense savings resulting from the implementation of the early retirement program are expected to total approximately $2.9 million ($0.03 per basic share net of tax) and $4.0 million ($0.05 per basic share net of tax) for the remainder of 2020 and for the year ended 2021, respectively.

Note 8 – Other Noninterest Income and Expense

Other noninterest income consisted of the following for the periods presented:

Quarter EndedNine Months Ended
9/30/20206/30/20203/31/202012/31/20199/30/20199/30/20209/30/2019
Partnership amortization for tax credit purposes

$

(1,457

)

$

(1,205

)

$

(1,161

)

$

(1,630

)

$

(1,994

)

$

(3,823

)

$

(6,014

)

Increase in life insurance cash surrender value

 

1,755

 

 

1,696

 

 

1,722

 

 

1,802

 

 

1,814

 

 

5,173

 

 

5,400

 

Other miscellaneous income

 

1,303

 

 

1,722

 

 

1,746

 

 

3,279

 

 

2,169

 

 

4,771

 

 

6,972

 

Total other, net

$

1,601

 

$

2,213

 

$

2,307

 

$

3,451

 

$

1,989

 

$

6,121

 

$

6,358

 

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 EndedNine Months Ended
9/30/20206/30/20203/31/202012/31/20199/30/20199/30/20209/30/2019
Loan expense

$

3,485

$

2,954

$

2,799

$

2,968

$

2,886

$

9,238

$

8,586

Amortization of intangibles

 

752

 

736

 

812

 

1,002

 

1,021

 

2,300

 

3,114

FDIC assessment expense

 

1,410

 

1,590

 

1,590

 

1,450

 

1,400

 

4,590

 

4,994

Other miscellaneous expense

 

8,951

 

7,985

 

9,552

 

8,956

 

6,880

 

26,488

 

23,112

Total other expense

$

14,598

$

13,265

$

14,753

$

14,376

$

12,187

$

42,616

$

39,806

Note 9 – Non-GAAP Financial Measures

In addition to capital ratios defined by U.S. generally accepted accounting principles (GAAP) and banking regulators, Trustmark utilizes various tangible common equity measures when evaluating capital utilization and adequacy. Tangible common equity, as defined by Trustmark, represents common equity less goodwill and identifiable intangible assets.

Trustmark believes these measures are important because they reflect the level of capital available to withstand unexpected market conditions. Additionally, presentation of these measures allows readers to compare certain aspects of Trustmark’s capitalization to other organizations. These ratios differ from capital measures defined by banking regulators principally in that the numerator excludes shareholders’ equity associated with preferred securities, the nature and extent of which varies across organizations. In Management’s experience, many stock analysts use tangible common equity measures in conjunction with more traditional bank capital ratios to compare capital adequacy of banking organizations with significant amounts of goodwill or other tangible assets, typically stemming from the use of the purchase accounting method in accounting for mergers and acquisitions.

These calculations are intended to complement the capital ratios defined by GAAP and banking regulators. Because GAAP does not include these capital ratio measures, Trustmark believes there are no comparable GAAP financial measures to these tangible common equity ratios. Despite the importance of these measures to Trustmark, there are no standardized definitions for them and, as a result, Trustmark’s calculations may not be comparable with other organizations. Also, there may be limits in the usefulness of these measures to investors. As a result, Trustmark encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure. The following table reconciles Trustmark’s calculation of these measures to amounts reported under GAAP.

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

September 30, 2020

($ in thousands except per share data)

(unaudited)

Note 9 – Non-GAAP Financial Measures (continued)

Quarter EndedNine Months Ended
9/30/20206/30/20203/31/202012/31/20199/30/20199/30/20209/30/2019
TANGIBLE EQUITY
AVERAGE BALANCES
Total shareholders' equity

$

1,694,903

 

$

1,665,716

 

$

1,640,070

 

$

1,656,605

 

$

1,634,646

 

$

1,666,999

 

$

1,610,356

 

Less: Goodwill

 

(385,270

)

 

(383,081

)

 

(380,671

)

 

(379,627

)

 

(379,627

)

 

(383,016

)

 

(379,627

)

Identifiable intangible assets

 

(8,550

)

 

(7,834

)

 

(8,049

)

 

(7,882

)

 

(8,706

)

 

(8,146

)

 

(9,660

)

Total average tangible equity

$

1,301,083

 

$

1,274,801

 

$

1,251,350

 

$

1,269,096

 

$

1,246,313

 

$

1,275,837

 

$

1,221,069

 

 
PERIOD END BALANCES
Total shareholders' equity

$

1,710,041

 

$

1,673,944

 

$

1,652,399

 

$

1,660,702

 

$

1,645,362

 

Less: Goodwill

 

(385,270

)

 

(385,270

)

 

(381,717

)

 

(379,627

)

 

(379,627

)

Identifiable intangible assets

 

(8,142

)

 

(8,895

)

 

(7,537

)

 

(7,343

)

 

(8,345

)

Total tangible equity(a)

$

1,316,629

 

$

1,279,779

 

$

1,263,145

 

$

1,273,732

 

$

1,257,390

 

 
TANGIBLE ASSETS
Total assets

$

15,558,162

 

$

15,692,079

 

$

14,019,829

 

$

13,497,877

 

$

13,584,786

 

Less: Goodwill

 

(385,270

)

 

(385,270

)

 

(381,717

)

 

(379,627

)

 

(379,627

)

Identifiable intangible assets

 

(8,142

)

 

(8,895

)

 

(7,537

)

 

(7,343

)

 

(8,345

)

Total tangible assets(b)

$

15,164,750

 

$

15,297,914

 

$

13,630,575

 

$

13,110,907

 

$

13,196,814

 

Risk-weighted assets(c)

$

11,963,269

 

$

11,539,157

 

$

11,427,297

 

$

11,002,877

 

$

10,935,018

 

 
NET INCOME ADJUSTED FOR INTANGIBLE AMORTIZATION
Net income

$

54,440

 

$

32,150

 

$

22,218

 

$

33,946

 

$

41,035

 

$

108,808

 

$

116,514

 

Plus: Intangible amortization net of tax

 

564

 

 

552

 

 

609

 

 

752

 

 

766

 

 

1,725

 

 

2,336

 

Net income adjusted for intangible amortization

$

55,004

 

$

32,702

 

$

22,827

 

$

34,698

 

$

41,801

 

$

110,533

 

$

118,850

 

Period end common shares outstanding(d)

 

63,423,820

 

 

63,422,439

 

 

63,396,912

 

 

64,200,111

 

 

64,262,779

 

 
TANGIBLE COMMON EQUITY MEASUREMENTS
Return on average tangible equity (1)

 

16.82

%

 

10.32

%

 

7.34

%

 

10.85

%

 

13.31

%

 

11.57

%

 

13.01

%

Tangible equity/tangible assets(a)/(b)

 

8.68

%

 

8.37

%

 

9.27

%

 

9.72

%

 

9.53

%

Tangible equity/risk-weighted assets(a)/(c)

 

11.01

%

 

11.09

%

 

11.05

%

 

11.58

%

 

11.50

%

Tangible book value(a)/(d)*1,000

$

20.76

 

$

20.18

 

$

19.92

 

$

19.84

 

$

19.57

 

 
COMMON EQUITY TIER 1 CAPITAL (CET1)
Total shareholders' equity

$

1,710,041

 

$

1,673,944

 

$

1,652,399

 

$

1,660,702

 

$

1,645,362

 

CECL transition adjustment (3)

 

32,647

 

 

32,693

 

 

26,476

 

 

—

 

 

—

 

AOCI-related adjustments

 

(5,684

)

 

(10,565

)

 

(7,698

)

 

23,600

 

 

20,858

 

CET1 adjustments and deductions:
Goodwill net of associated deferred tax liabilities (DTLs)

 

(371,345

)

 

(371,342

)

 

(367,825

)

 

(365,738

)

 

(365,741

)

Other adjustments and deductions for CET1 (2)

 

(6,770

)

 

(7,352

)

 

(6,269

)

 

(5,896

)

 

(6,671

)

CET1 capital(e)

 

1,358,889

 

 

1,317,378

 

 

1,297,083

 

 

1,312,668

 

 

1,293,808

 

Additional tier 1 capital instruments plus related surplus

 

60,000

 

 

60,000

 

 

60,000

 

 

60,000

 

 

60,000

 

Tier 1 capital

$

1,418,889

 

$

1,377,378

 

$

1,357,083

 

$

1,372,668

 

$

1,353,808

 

 
Common equity tier 1 capital ratio(e)/(c)

 

11.36

%

 

11.42

%

 

11.35

%

 

11.93

%

 

11.83

%

(1)

  Calculation = ((net income adjusted for intangible amortization/number of days in period)*number of days in year)/total average tangible equity.

(2)

 Includes other intangible assets, net of DTLs, disallowed deferred tax assets (DTAs), threshold deductions and transition adjustments, as applicable.

(3)

 See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

September 30, 2020

($ in thousands except per share data)

(unaudited)

Note 9 – 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-tax pre-provision income during the periods presented:

Quarter EndedNine Months Ended
9/30/20206/30/20203/31/202012/31/20199/30/20199/30/20209/30/2019
 
Net interest income (GAAP)

$

106,207

$

105,000

 

$

103,952

 

$

105,591

$

108,466

$

315,159

 

$

320,998

Noninterest income (GAAP)

 

73,701

 

69,511

 

 

65,264

 

 

47,578

 

48,337

 

208,476

 

 

139,467

Pre-tax pre-provision revenue (a)

$

179,908

$

174,511

 

$

169,216

 

$

153,169

$

156,803

$

523,635

 

$

460,465

 
Noninterest expense (GAAP)

$

113,959

$

118,659

 

$

123,810

 

$

110,027

$

106,853

$

356,428

 

$

318,975

Less: Voluntary early retirement program

 

—

 

—

 

 

(4,375

)

 

—

 

—

 

(4,375

)

 

—

Credit loss expense related to off-balance sheet credit exposures

 

3,004

 

(6,242

)

 

(6,783

)

 

—

 

—

 

(10,021

)

 

—

Adjusted noninterest expense (Non-GAAP) (b)

$

116,963

$

112,417

 

$

112,652

 

$

110,027

$

106,853

$

342,032

 

$

318,975

 
Pre-tax pre-provision income (Non-GAAP) (a)-(b)

$

62,945

$

62,094

 

$

56,564

 

$

43,142

$

49,950

$

181,603

 

$

141,490

The following table presents adjustments to net income and select financial ratios as reported in accordance with GAAP resulting from significant non-routine items occurring during the periods presented:

Quarter EndedNine Months Ended
9/30/20209/30/20199/30/20209/30/2019
AmountDiluted
EPS		AmountDiluted
EPS		AmountDiluted
EPS		AmountDiluted
EPS
 
Net Income (GAAP)

$ 54,440

$ 0.86

$ 41,035

$ 0.64

$ 108,808

$ 1.71

$ 116,514

$ 1.80

 
Significant non-routine transactions (net of taxes):
 
Voluntary early retirement program

—

—

—

—

3,281

0.05

—

—

Net Income adjusted for significant
non-routine transactions (Non-GAAP)

$ 54,440

$ 0.86

$ 41,035

$ 0.64

$ 112,089

$ 1.76

$ 116,514

$ 1.80

 
Reported Adjusted Reported Adjusted Reported Adjusted Reported Adjusted
(GAAP)(Non-GAAP)(GAAP)(Non-GAAP)(GAAP)(Non-GAAP)(GAAP)(Non-GAAP)
Return on average equity

12.78%

n/a

9.96%

n/a

8.72%

8.97%

9.67%

n/a

Return on average tangible equity

16.82%

n/a

13.31%

n/a

11.57%

11.89%

13.01%

n/a

Return on average assets

1.37%

n/a

1.21%

n/a

0.97%

1.00%

1.15%

n/a

 
n/a - not applicable

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

September 30, 2020

($ in thousands)

(unaudited)

Note 9 – Non-GAAP Financial Measures (continued)

The following table presents Trustmark’s calculation of its efficiency ratio for the periods presented:

Quarter EndedNine Months Ended
9/30/20206/30/20203/31/202012/31/20199/30/20199/30/20209/30/2019
 
Total noninterest expense (GAAP)

$

113,959

 

$

118,659

 

$

123,810

 

$

110,027

 

$

106,853

 

$

356,428

 

$

318,975

 

Less: Other real estate expense, net

 

(1,203

)

 

(271

)

 

(1,294

)

 

(1,491

)

 

(531

)

 

(2,768

)

 

(2,415

)

Amortization of intangibles

 

(752

)

 

(736

)

 

(812

)

 

(1,002

)

 

(1,021

)

 

(2,300

)

 

(3,114

)

Voluntary early retirement program

 

—

 

 

—

 

 

(4,375

)

 

—

 

 

—

 

 

(4,375

)

 

—

 

Credit loss expense related to off-balance sheet exposures

 

3,004

 

 

(6,242

)

 

(6,783

)

 

—

 

 

—

 

 

(10,021

)

 

—

 

Charitable contributions resulting in state tax credits

 

(375

)

 

(375

)

 

(375

)

 

—

 

 

—

 

 

(1,125

)

 

—

 

Adjusted noninterest expense (Non-GAAP) (c)

$

114,633

 

$

111,035

 

$

110,171

 

$

107,534

 

$

105,301

 

$

335,839

 

$

313,446

 

 
Net interest income (GAAP)

$

106,207

 

$

105,000

 

$

103,952

 

$

105,591

 

$

108,466

 

$

315,159

 

$

320,998

 

Add: Tax equivalent adjustment

 

2,969

 

 

3,007

 

 

3,108

 

 

3,149

 

 

3,249

 

 

9,084

 

 

9,728

 

Net interest income-FTE (Non-GAAP) (a)

$

109,176

 

$

108,007

 

$

107,060

 

$

108,740

 

$

111,715

 

$

324,243

 

$

330,726

 

 
Noninterest income (GAAP)

$

73,701

 

$

69,511

 

$

65,264

 

$

47,578

 

$

48,337

 

$

208,476

 

$

139,467

 

Add: Partnership amortization for tax credit purposes

 

1,457

 

 

1,205

 

 

1,161

 

 

1,630

 

 

1,994

 

 

3,823

 

 

6,014

 

Adjusted noninterest income (Non-GAAP) (b)

$

75,158

 

$

70,716

 

$

66,425

 

$

49,208

 

$

50,331

 

$

212,299

 

$

145,481

 

 
Adjusted revenue (Non-GAAP) (a)+(b)

$

184,334

 

$

178,723

 

$

173,485

 

$

157,948

 

$

162,046

 

$

536,542

 

$

476,207

 

 
Efficiency ratio (Non-GAAP) (c)/((a)+(b))

 

62.19

%

 

62.13

%

 

63.50

%

 

68.08

%

 

64.98

%

 

62.59

%

 

65.82

%