Trustmark Corporation Announces First Quarter 2018 Financial Results
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First Quarter Highlights
- Revenue, excluding interest and fees on acquired loans, increased 1.7% linked quarter and 4.0% year-over-year to total
$144.0 million - The net interest margin (FTE), excluding acquired loans, was 3.37% in the first quarter, up 2 basis points from the prior quarter and down 1 basis point year-over-year
- Core noninterest expense, which excludes other real estate and intangible amortization, totaled
$100.2 million in the first quarter, down 0.6% from the prior quarter and up 1.5% year-over-year - Sustained strong credit performance reflected in reduced nonperforming assets and net recoveries
Balance Sheet Management
- Continued balance sheet optimization through maturing investment securities run-off and opportunistic share repurchases
- Capital base continues to provide flexibility in pursuing growth opportunities
- Noninterest-bearing deposits represent 27.4% of total deposits
Loans held for investment totaled
Deposits totaled
Trustmark’s capital position remained solid, reflecting the consistent profitability of its diversified financial services businesses. During the first quarter, Trustmark repurchased
Credit Quality
- Other real estate decreased 8.5% and 29.3% from the prior quarter and year-over-year, respectively
- Recoveries exceeded charge-offs; net recoveries represented -0.03% of average loans
- Allowance for loan losses represented 314.28% of nonperforming loans, excluding specifically reviewed impaired loans
Nonperforming loans totaled
Allocation of Trustmark's
Unless otherwise noted, all of the above credit quality metrics exclude acquired loans.
Revenue Generation
- Net interest margin, excluding acquired loans, was 3.37%, an increase of 2 basis points from the prior quarter
- Maturing investment securities run-off is accretive to the net interest margin
- Deposit costs remain well controlled
- Noninterest income totaled
$46.8 million , up 6.4% linked quarter and 1.7% year-over-year
Net interest income (FTE) in the first quarter totaled
Noninterest income in the first quarter increased 6.4% from the prior quarter to total
Wealth management revenue in the first quarter totaled
Noninterest Expense
- Total noninterest expense declined 0.5% linked quarter and increased 0.4% year-over-year to
$102.5 million - Core noninterest expense, which excludes other real estate expense and intangible amortization, totaled
$100.2 million , down 0.6% from the prior quarter and up 1.5% year-over-year
Salaries and employee benefits decreased
Trustmark remains committed to optimization of its retail delivery channels to promote additional growth. In the first quarter, Trustmark opened a location in
Additional Information
As previously announced, Trustmark will conduct a conference call with analysts on
Forward-Looking Statements
Certain statements contained in this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by words such as “may,” “hope,” “will,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “continue,” “could,” “future” or the negative of those terms or other words of similar meaning. You should read statements that contain these words carefully because they discuss our future expectations or state other “forward-looking” information. These forward-looking statements include, but are not limited to, statements relating to anticipated future operating and financial performance measures, including net interest margin, credit quality, business initiatives, growth opportunities and growth rates, among other things, and encompass any estimate, prediction, expectation, projection, opinion, anticipation, outlook or statement of belief included therein as well as the management assumptions underlying these forward-looking statements. You should be aware that the occurrence of the events described under the caption “Risk Factors” in Trustmark’s filings with the
Risks that could cause actual results to differ materially from current expectations of Management include, but are not limited to, changes in the level of nonperforming assets and charge-offs, local, state and national economic and market conditions, including potential market impacts of efforts by the
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 | |||||||||||||||||||||
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($ in thousands) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
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Year over Year | ||||||||||||||||||||
QUARTERLY AVERAGE BALANCES |
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$ Change | % Change | $ Change | % Change | ||||||||||||||
Securities AFS-taxable | |
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-4.7% | |
-4.9% | ||||||||||||||
Securities AFS-nontaxable | 57,972 | 61,691 | 88,522 | (3,719) | -6.0% | (30,550) | -34.5% | ||||||||||||||
Securities HTM-taxable | 1,005,721 | 1,045,723 | 1,124,692 | (40,002) | -3.8% | (118,971) | -10.6% | ||||||||||||||
Securities HTM-nontaxable | 32,734 | 32,781 | 33,009 | (47) | -0.1% | (275) | -0.8% | ||||||||||||||
Total securities | 3,237,571 | 3,387,442 | 3,498,385 | (149,871) | -4.4% | (260,814) | -7.5% | ||||||||||||||
Loans (including loans held for sale) | 8,636,967 | 8,686,916 | 8,074,449 | (49,949) | -0.6% | 562,518 | 7.0% | ||||||||||||||
Acquired loans | 243,152 | 273,918 | 250,482 | (30,766) | -11.2% | (7,330) | -2.9% | ||||||||||||||
Fed funds sold and rev repos | 478 | 1,724 | 397 | (1,246) | -72.3% | 81 | 20.4% | ||||||||||||||
Other earning assets | 213,985 | 80,218 | 79,515 | 133,767 | n/m | 134,470 | n/m | ||||||||||||||
Total earning assets | 12,332,153 | 12,430,218 | 11,903,228 | (98,065) | -0.8% | 428,925 | 3.6% | ||||||||||||||
Allowance for loan losses | (82,304) | (86,704) | (83,394) | 4,400 | 5.1% | 1,090 | 1.3% | ||||||||||||||
Cash and due from banks | 336,642 | 315,586 | 310,542 | 21,056 | 6.7% | 26,100 | 8.4% | ||||||||||||||
Other assets | 1,030,738 | 1,192,464 | 1,235,469 | (161,726) | -13.6% | (204,731) | -16.6% | ||||||||||||||
Total assets | |
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-1.7% | |
1.9% | ||||||||||||||
Interest-bearing demand deposits | |
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7.1% | |
21.3% | ||||||||||||||
Savings deposits | 3,737,507 | 3,291,407 | 3,319,572 | 446,100 | 13.6% | 417,935 | 12.6% | ||||||||||||||
Time deposits | 1,748,645 | 1,756,576 | 1,650,251 | (7,931) | -0.5% | 98,394 | 6.0% | ||||||||||||||
Total interest-bearing deposits | 7,890,580 | 7,292,608 | 6,951,805 | 597,972 | 8.2% | 938,775 | 13.5% | ||||||||||||||
Fed funds purchased and repos | 277,877 | 475,850 | 498,963 | (197,973) | -41.6% | (221,086) | -44.3% | ||||||||||||||
Short-term borrowings | 751,219 | 1,276,543 | 887,848 | (525,324) | -41.2% | (136,629) | -15.4% | ||||||||||||||
Long-term FHLB advances | 938 | 954 | 251,033 | (16) | -1.7% | (250,095) | -99.6% | ||||||||||||||
Junior subordinated debt securities | 61,856 | 61,856 | 61,856 | — | 0.0% | — | 0.0% | ||||||||||||||
Total interest-bearing liabilities | 8,982,470 | 9,107,811 | 8,651,505 | (125,341) | -1.4% | 330,965 | 3.8% | ||||||||||||||
Noninterest-bearing deposits | 2,881,374 | 2,994,292 | 3,008,176 | (112,918) | -3.8% | (126,802) | -4.2% | ||||||||||||||
Other liabilities | 180,871 | 169,828 | 173,066 | 11,043 | 6.5% | 7,805 | 4.5% | ||||||||||||||
Total liabilities | 12,044,715 | 12,271,931 | 11,832,747 | (227,216) | -1.9% | 211,968 | 1.8% | ||||||||||||||
Shareholders' equity | 1,572,514 | 1,579,633 | 1,533,098 | (7,119) | -0.5% | 39,416 | 2.6% | ||||||||||||||
Total liabilities and equity | |
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-1.7% | |
1.9% | ||||||||||||||
n/m - percentage changes greater than +/- 100% are considered not meaningful |
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See Notes to Consolidated Financials |
TRUSTMARK CORPORATION AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||
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($ in thousands) | |||||||||||||||
(unaudited) | |||||||||||||||
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Year over Year | ||||||||||||||
PERIOD END BALANCES |
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$ Change |
% Change |
$ Change |
% Change | ||||||||
Cash and due from banks | |
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-6.1% | |
-16.9% | ||||||||
Fed funds sold and rev repos | 112 | 615 | 500 | (503) | -81.8% | (388) | -77.6% | ||||||||
Securities available for sale | 2,097,497 | 2,238,635 | 2,365,554 | (141,138) | -6.3% | (268,057) | -11.3% | ||||||||
Securities held to maturity | 1,023,975 | 1,056,486 | 1,156,067 | (32,511) | -3.1% | (132,092) | -11.4% | ||||||||
Loans held for sale (LHFS) | 163,882 | 180,512 | 174,090 | (16,630) | -9.2% | (10,208) | -5.9% | ||||||||
Loans held for investment (LHFI) | 8,513,985 | 8,569,967 | 8,004,657 | (55,982) | -0.7% | 509,328 | 6.4% | ||||||||
Allowance for loan losses | (81,235) | (76,733) | (72,445) | (4,502) | -5.9% | (8,790) | -12.1% | ||||||||
Net LHFI | 8,432,750 | 8,493,234 | 7,932,212 | (60,484) | -0.7% | 500,538 | 6.3% | ||||||||
Acquired loans | 215,476 | 261,517 | 218,242 | (46,041) | -17.6% | (2,766) | -1.3% | ||||||||
Allowance for loan losses, acquired loans | (4,294) | (4,079) | (10,006) | (215) | -5.3% | 5,712 | 57.1% | ||||||||
Net acquired loans | 211,182 | 257,438 | 208,236 | (46,256) | -18.0% | 2,946 | 1.4% | ||||||||
Net LHFI and acquired loans | 8,643,932 | 8,750,672 | 8,140,448 | (106,740) | -1.2% | 503,484 | 6.2% | ||||||||
Premises and equipment, net | 178,584 | 179,339 | 183,311 | (755) | -0.4% | (4,727) | -2.6% | ||||||||
Mortgage servicing rights | 94,850 | 84,269 | 82,758 | 10,581 | 12.6% | 12,092 | 14.6% | ||||||||
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379,627 | 379,627 | 366,156 | — | 0.0% | 13,471 | 3.7% | ||||||||
Identifiable intangible assets | 14,963 | 16,360 | 19,117 | (1,397) | -8.5% | (4,154) | -21.7% | ||||||||
Other real estate | 39,554 | 43,228 | 55,968 | (3,674) | -8.5% | (16,414) | -29.3% | ||||||||
Other assets | 511,187 | 532,442 | 566,802 | (21,255) | -4.0% | (55,615) | -9.8% | ||||||||
Total assets | |
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-2.4% | |
-0.2% | ||||||||
Deposits: | |||||||||||||||
Noninterest-bearing | |
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0.9% | |
-6.4% | ||||||||
Interest-bearing | 7,971,359 | 7,599,438 | 6,894,745 | 371,921 | 4.9% | 1,076,614 | 15.6% | ||||||||
Total deposits | 10,975,801 | 10,577,512 | 10,104,472 | 398,289 | 3.8% | 871,329 | 8.6% | ||||||||
Fed funds purchased and repos | 274,833 | 469,827 | 524,335 | (194,994) | -41.5% | (249,502) | -47.6% | ||||||||
Short-term borrowings | 442,689 | 971,049 | 864,690 | (528,360) | -54.4% | (422,001) | -48.8% | ||||||||
Long-term FHLB advances | 929 | 946 | 250,994 | (17) | -1.8% | (250,065) | -99.6% | ||||||||
Junior subordinated debt securities | 61,856 | 61,856 | 61,856 | — | 0.0% | — | 0.0% | ||||||||
Other liabilities | 137,194 | 145,062 | 146,053 | (7,868) | -5.4% | (8,859) | -6.1% | ||||||||
Total liabilities | 11,893,302 | 12,226,252 | 11,952,400 | (332,950) | -2.7% | (59,098) | -0.5% | ||||||||
Common stock | 14,121 | 14,115 | 14,112 | 6 | 0.0% | 9 | 0.1% | ||||||||
Capital surplus | 366,021 | 369,124 | 365,951 | (3,103) | -0.8% | 70 | 0.0% | ||||||||
Retained earnings | 1,257,881 | 1,228,187 | 1,200,903 | 29,694 | 2.4% | 56,978 | 4.7% | ||||||||
Accum other comprehensive loss, net of tax | (67,886) | (39,725) | (43,005) | (28,161) | -70.9% | (24,881) | -57.9% | ||||||||
Total shareholders' equity | 1,570,137 | 1,571,701 | 1,537,961 | (1,564) | -0.1% | 32,176 | 2.1% | ||||||||
Total liabilities and equity | |
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-2.4% | |
-0.2% | ||||||||
n/m - percentage changes greater than +/- 100% are considered not meaningful | |||||||||||||||
See Notes to Consolidated Financials |
TRUSTMARK CORPORATION AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||
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($ in thousands except per share data) | |||||||||||||||
(unaudited) | |||||||||||||||
Quarter Ended | |
Year over Year | |||||||||||||
INCOME STATEMENTS |
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$ Change |
% Change |
$ Change |
% Change | ||||||||
Interest and fees on LHFS & LHFI-FTE | |
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-1.2% | |
13.0% | ||||||||
Interest and fees on acquired loans | 4,877 | 6,401 | 5,189 | (1,524) | -23.8% | (312) | -6.0% | ||||||||
Interest on securities-taxable | 17,506 | 18,327 | 19,197 | (821) | -4.5% | (1,691) | -8.8% | ||||||||
Interest on securities-tax exempt-FTE | 824 | 1,035 | 1,300 | (211) | -20.4% | (476) | -36.6% | ||||||||
Interest on fed funds sold and rev repos | 2 | 7 | 1 | (5) | -71.4% | 1 | 100.0% | ||||||||
Other interest income | 934 | 473 | 267 | 461 | 97.5% | 667 | n/m | ||||||||
Total interest income-FTE | 118,855 | 122,059 | 109,744 | (3,204) | -2.6% | 9,111 | 8.3% | ||||||||
Interest on deposits | 9,491 | 7,284 | 3,945 | 2,207 | 30.3% | 5,546 | n/m | ||||||||
Interest on fed funds pch and repos | 662 | 1,116 | 698 | (454) | -40.7% | (36) | -5.2% | ||||||||
Other interest expense | 3,394 | 4,555 | 2,673 | (1,161) | -25.5% | 721 | 27.0% | ||||||||
Total interest expense | 13,547 | 12,955 | 7,316 | 592 | 4.6% | 6,231 | 85.2% | ||||||||
Net interest income-FTE | 105,308 | 109,104 | 102,428 | (3,796) | -3.5% | 2,880 | 2.8% | ||||||||
Provision for loan losses, LHFI | 3,961 | 5,739 | 2,762 | (1,778) | -31.0% | 1,199 | 43.4% | ||||||||
Provision for loan losses, acquired loans | 150 | (1,573) | (1,605) | 1,723 | n/m | 1,755 | n/m | ||||||||
Net interest income after provision-FTE | 101,197 | 104,938 | 101,271 | (3,741) | -3.6% | (74) | -0.1% | ||||||||
Service charges on deposit accounts | 10,857 | 11,193 | 10,832 | (336) | -3.0% | 25 | 0.2% | ||||||||
Bank card and other fees | 6,626 | 7,266 | 6,500 | (640) | -8.8% | 126 | 1.9% | ||||||||
Mortgage banking, net | 11,265 | 6,284 | 10,185 | 4,981 | 79.3% | 1,080 | 10.6% | ||||||||
Insurance commissions | 9,419 | 8,813 | 9,212 | 606 | 6.9% | 207 | 2.2% | ||||||||
Wealth management | 7,567 | 7,723 | 7,413 | (156) | -2.0% | 154 | 2.1% | ||||||||
Other, net | 1,059 | 2,681 | 1,891 | (1,622) | -60.5% | (832) | -44.0% | ||||||||
Nonint inc-excl sec gains (losses), net | 46,793 | 43,960 | 46,033 | 2,833 | 6.4% | 760 | 1.7% | ||||||||
Security gains (losses), net | — | — | — | — | n/m | — | n/m | ||||||||
Total noninterest income | 46,793 | 43,960 | 46,033 | 2,833 | 6.4% | 760 | 1.7% | ||||||||
Salaries and employee benefits | 58,475 | 58,820 | 55,389 | (345) | -0.6% | 3,086 | 5.6% | ||||||||
Defined benefit plan termination | — | — | — | — | n/m | — | n/m | ||||||||
Services and fees | 15,746 | 15,419 | 15,332 | 327 | 2.1% | 414 | 2.7% | ||||||||
Net occupancy-premises | 6,502 | 6,617 | 6,238 | (115) | -1.7% | 264 | 4.2% | ||||||||
Equipment expense | 6,099 | 5,996 | 5,998 | 103 | 1.7% | 101 | 1.7% | ||||||||
Other real estate expense | 866 | 666 | 1,759 | 200 | 30.0% | (893) | -50.8% | ||||||||
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2,995 | 2,868 | 2,640 | 127 | 4.4% | 355 | 13.4% | ||||||||
Other expense | 11,782 | 12,565 | 14,701 | (783) | -6.2% | (2,919) | -19.9% | ||||||||
Total noninterest expense | 102,465 | 102,951 | 102,057 | (486) | -0.5% | 408 | 0.4% | ||||||||
Income before income taxes and tax eq adj | 45,525 | 45,947 | 45,247 | (422) | -0.9% | 278 | 0.6% | ||||||||
Tax equivalent adjustment | 3,215 | 5,060 | 4,838 | (1,845) | -36.5% | (1,623) | -33.5% | ||||||||
Income before income taxes | 42,310 | 40,887 | 40,409 | 1,423 | 3.5% | 1,901 | 4.7% | ||||||||
Income taxes | 5,480 | 25,119 | 9,161 | (19,639) | -78.2% | (3,681) | -40.2% | ||||||||
Net income | |
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n/m | |
17.9% | ||||||||
Per share data | |||||||||||||||
Earnings per share - basic | |
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n/m | |
17.4% | ||||||||
Earnings per share - diluted | |
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n/m | |
17.4% | ||||||||
Dividends per share | |
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— | 0.0% | — | 0.0% | ||||||||
Weighted average shares outstanding | |||||||||||||||
Basic | 67,809,234 | 67,742,792 | 67,687,365 | ||||||||||||
Diluted | 67,960,583 | 67,938,986 | 67,845,785 | ||||||||||||
Period end shares outstanding | 67,775,068 | 67,746,094 | 67,729,434 | ||||||||||||
n/m - percentage changes greater than +/- 100% are considered not meaningful | |||||||||||||||
See Notes to Consolidated Financials |
TRUSTMARK CORPORATION AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||
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($ in thousands) | |||||||||||||||
(unaudited) | |||||||||||||||
Quarter Ended | |
Year over Year | |||||||||||||
NONPERFORMING ASSETS (1) |
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$ Change |
% Change |
$ Change |
% Change | ||||||||
Nonaccrual loans | |||||||||||||||
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1.2% | |
89.3% | ||||||||
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2,116 | 3,034 | 3,559 | (918) | -30.3% | (1,443) | -40.5% | ||||||||
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48,600 | 49,129 | 49,349 | (529) | -1.1% | (749) | -1.5% | ||||||||
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5,530 | 4,436 | 5,185 | 1,094 | 24.7% | 345 | 6.7% | ||||||||
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9,329 | 7,893 | 1,565 | 1,436 | 18.2% | 7,764 | n/m | ||||||||
Total nonaccrual loans | 68,696 | 67,575 | 61,307 | 1,121 | 1.7% | 7,389 | 12.1% | ||||||||
Other real estate | |||||||||||||||
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8,962 | 11,714 | 13,953 | (2,752) | -23.5% | (4,991) | -35.8% | ||||||||
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12,550 | 13,937 | 21,577 | (1,387) | -10.0% | (9,027) | -41.8% | ||||||||
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15,737 | 14,260 | 14,974 | 1,477 | 10.4% | 763 | 5.1% | ||||||||
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1,523 | 2,535 | 4,706 | (1,012) | -39.9% | (3,183) | -67.6% | ||||||||
|
782 | 782 | 758 | — | 0.0% | 24 | 3.2% | ||||||||
Total other real estate | 39,554 | 43,228 | 55,968 | (3,674) | -8.5% | (16,414) | -29.3% | ||||||||
Total nonperforming assets | |
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-2.3% | |
-7.7% | ||||||||
LOANS PAST DUE OVER 90 DAYS (1) |
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LHFI | |
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-34.6% | |
8.6% | ||||||||
LHFS-Guaranteed GNMA serviced loans | |||||||||||||||
(no obligation to repurchase) | |
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-2.0% | |
11.8% | ||||||||
Quarter Ended | |
Year over Year | |||||||||||||
ALLOWANCE FOR LOAN LOSSES (1) |
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$ Change |
% Change |
$ Change |
% Change |
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Beginning Balance | |
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-4.5% | |
7.7% | ||||||||
Provision for loan losses | 3,961 | 5,739 | 2,762 | (1,778) | -31.0% | 1,199 | 43.4% | ||||||||
Charge-offs | (2,542) | (12,075) | (4,202) | 9,533 | 78.9% | 1,660 | 39.5% | ||||||||
Recoveries | 3,083 | 2,737 | 2,620 | 346 | 12.6% | 463 | 17.7% | ||||||||
Net (charge-offs) recoveries | 541 | (9,338) | (1,582) | 9,879 | n/m | 2,123 | n/m | ||||||||
Ending Balance | |
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5.9% | |
12.1% | ||||||||
PROVISION FOR LOAN LOSSES (1) |
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|
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10.6% | |
-48.0% | ||||||||
|
(863) | (1,235) | 3 | 372 | 30.1% | (866) | n/m | ||||||||
|
2,664 | 2,779 | 1,826 | (115) | -4.1% | 838 | 45.9% | ||||||||
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(268) | (439) | 208 | 171 | 39.0% | (476) | n/m | ||||||||
|
1,810 | 4,075 | (464) | (2,265) | -55.6% | 2,274 | n/m | ||||||||
Total provision for loan losses | |
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-31.0% | |
43.4% | ||||||||
NET CHARGE-OFFS (RECOVERIES) (1) |
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-57.1% | |
27.3% | ||||||||
|
(960) | (946) | (155) | (14) | -1.5% | (805) | n/m | ||||||||
|
267 | 5,574 | 1,759 | (5,307) | -95.2% | (1,492) | -84.8% | ||||||||
|
109 | 79 | 83 | 30 | 38.0% | 26 | 31.3% | ||||||||
|
(41) | 4,435 | (171) | (4,476) | n/m | 130 | 76.0% | ||||||||
Total net charge-offs (recoveries) | |
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|
|
n/m | |
n/m | ||||||||
(1) - Excludes acquired loans. | |||||||||||||||
(2) - |
|||||||||||||||
(3) - |
|||||||||||||||
n/m - percentage changes greater than +/- 100% are considered not meaningful | |||||||||||||||
See Notes to Consolidated Financials |
TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||
CONSOLIDATED FINANCIAL INFORMATION | ||||||||||
|
||||||||||
($ in thousands) | ||||||||||
(unaudited) | ||||||||||
Quarter Ended | ||||||||||
AVERAGE BALANCES |
|
|
|
|
|
|||||
Securities AFS-taxable | |
|
|
|
|
|||||
Securities AFS-nontaxable | 57,972 | 61,691 | 67,994 | 75,640 | 88,522 | |||||
Securities HTM-taxable | 1,005,721 | 1,045,723 | 1,086,773 | 1,108,158 | 1,124,692 | |||||
Securities HTM-nontaxable | 32,734 | 32,781 | 32,829 | 32,878 | 33,009 | |||||
Total securities | 3,237,571 | 3,387,442 | 3,537,332 | 3,551,276 | 3,498,385 | |||||
Loans (including loans held for sale) | 8,636,967 | 8,686,916 | 8,532,523 | 8,348,758 | 8,074,449 | |||||
Acquired loans | 243,152 | 273,918 | 299,221 | 315,558 | 250,482 | |||||
Fed funds sold and rev repos | 478 | 1,724 | 3,582 | 3,184 | 397 | |||||
Other earning assets | 213,985 | 80,218 | 84,320 | 77,770 | 79,515 | |||||
Total earning assets | 12,332,153 | 12,430,218 | 12,456,978 | 12,296,546 | 11,903,228 | |||||
Allowance for loan losses | (82,304) | (86,704) | (85,363) | (83,328) | (83,394) | |||||
Cash and due from banks | 336,642 | 315,586 | 312,409 | 307,966 | 310,542 | |||||
Other assets | 1,030,738 | 1,192,464 | 1,202,766 | 1,229,981 | 1,235,469 | |||||
Total assets | |
|
|
|
|
|||||
Interest-bearing demand deposits | |
|
|
|
|
|||||
Savings deposits | 3,737,507 | 3,291,407 | 3,284,323 | 3,337,374 | 3,319,572 | |||||
Time deposits | 1,748,645 | 1,756,576 | 1,736,683 | 1,777,529 | 1,650,251 | |||||
Total interest-bearing deposits | 7,890,580 | 7,292,608 | 7,213,070 | 7,150,394 | 6,951,805 | |||||
Fed funds purchased and repos | 277,877 | 475,850 | 547,863 | 525,523 | 498,963 | |||||
Short-term borrowings | 751,219 | 1,276,543 | 1,335,476 | 1,047,107 | 887,848 | |||||
Long-term FHLB advances | 938 | 954 | 970 | 141,097 | 251,033 | |||||
Junior subordinated debt securities | 61,856 | 61,856 | 61,856 | 61,856 | 61,856 | |||||
Total interest-bearing liabilities | 8,982,470 | 9,107,811 | 9,159,235 | 8,925,977 | 8,651,505 | |||||
Noninterest-bearing deposits | 2,881,374 | 2,994,292 | 3,003,763 | 3,110,125 | 3,008,176 | |||||
Other liabilities | 180,871 | 169,828 | 145,925 | 162,823 | 173,066 | |||||
Total liabilities | 12,044,715 | 12,271,931 | 12,308,923 | 12,198,925 | 11,832,747 | |||||
Shareholders' equity | 1,572,514 | 1,579,633 | 1,577,867 | 1,552,240 | 1,533,098 | |||||
Total liabilities and equity | |
|
|
|
|
|||||
See Notes to Consolidated Financials |
TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||
CONSOLIDATED FINANCIAL INFORMATION | ||||||||||
|
||||||||||
($ in thousands) | ||||||||||
(unaudited) | ||||||||||
PERIOD END BALANCES |
|
|
|
|
|
|||||
Cash and due from banks | |
|
|
|
|
|||||
Fed funds sold and rev repos | 112 | 615 | 3,215 | 6,900 | 500 | |||||
Securities available for sale | 2,097,497 | 2,238,635 | 2,369,089 | 2,447,688 | 2,365,554 | |||||
Securities held to maturity | 1,023,975 | 1,056,486 | 1,102,283 | 1,139,754 | 1,156,067 | |||||
Loans held for sale (LHFS) | 163,882 | 180,512 | 204,157 | 203,652 | 174,090 | |||||
Loans held for investment (LHFI) | 8,513,985 | 8,569,967 | 8,407,341 | 8,296,045 | 8,004,657 | |||||
Allowance for loan losses | (81,235) | (76,733) | (80,332) | (76,184) | (72,445) | |||||
Net LHFI | 8,432,750 | 8,493,234 | 8,327,009 | 8,219,861 | 7,932,212 | |||||
Acquired loans | 215,476 | 261,517 | 283,757 | 314,910 | 218,242 | |||||
Allowance for loan losses, acquired loans | (4,294) | (4,079) | (5,768) | (7,423) | (10,006) | |||||
Net acquired loans | 211,182 | 257,438 | 277,989 | 307,487 | 208,236 | |||||
Net LHFI and acquired loans | 8,643,932 | 8,750,672 | 8,604,998 | 8,527,348 | 8,140,448 | |||||
Premises and equipment, net | 178,584 | 179,339 | 181,312 | 182,315 | 183,311 | |||||
Mortgage servicing rights | 94,850 | 84,269 | 81,477 | 82,628 | 82,758 | |||||
|
379,627 | 379,627 | 379,627 | 379,627 | 366,156 | |||||
Identifiable intangible assets | 14,963 | 16,360 | 17,883 | 19,422 | 19,117 | |||||
Other real estate | 39,554 | 43,228 | 48,356 | 49,958 | 55,968 | |||||
Other assets | 511,187 | 532,442 | 542,135 | 551,517 | 566,802 | |||||
Total assets | |
|
|
|
|
|||||
Deposits: | ||||||||||
Noninterest-bearing | |
|
|
|
|
|||||
Interest-bearing | 7,971,359 | 7,599,438 | 7,233,729 | 7,330,476 | 6,894,745 | |||||
Total deposits | 10,975,801 | 10,577,512 | 10,231,742 | 10,423,391 | 10,104,472 | |||||
Fed funds purchased and repos | 274,833 | 469,827 | 545,603 | 508,068 | 524,335 | |||||
Short-term borrowings | 442,689 | 971,049 | 1,322,159 | 1,222,592 | 864,690 | |||||
Long-term FHLB advances | 929 | 946 | 962 | 978 | 250,994 | |||||
Junior subordinated debt securities | 61,856 | 61,856 | 61,856 | 61,856 | 61,856 | |||||
Other liabilities | 137,194 | 145,062 | 139,798 | 130,335 | 146,053 | |||||
Total liabilities | 11,893,302 | 12,226,252 | 12,302,120 | 12,347,220 | 11,952,400 | |||||
Common stock | 14,121 | 14,115 | 14,114 | 14,114 | 14,112 | |||||
Capital surplus | 366,021 | 369,124 | 368,131 | 367,075 | 365,951 | |||||
Retained earnings | 1,257,881 | 1,228,187 | 1,228,115 | 1,209,238 | 1,200,903 | |||||
Accum other comprehensive loss, net of tax | (67,886) | (39,725) | (27,825) | (28,509) | (43,005) | |||||
Total shareholders' equity | 1,570,137 | 1,571,701 | 1,582,535 | 1,561,918 | 1,537,961 | |||||
Total liabilities and equity | |
|
|
|
|
|||||
See Notes to Consolidated Financials |
TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||
CONSOLIDATED FINANCIAL INFORMATION | ||||||||||
|
||||||||||
($ in thousands except per share data) | ||||||||||
(unaudited) | ||||||||||
Quarter Ended | ||||||||||
INCOME STATEMENTS |
|
|
|
|
|
|||||
Interest and fees on LHFS & LHFI-FTE | |
|
|
|
|
|||||
Interest and fees on acquired loans | 4,877 | 6,401 | 6,625 | 6,263 | 5,189 | |||||
Interest on securities-taxable | 17,506 | 18,327 | 19,291 | 19,377 | 19,197 | |||||
Interest on securities-tax exempt-FTE | 824 | 1,035 | 1,104 | 1,178 | 1,300 | |||||
Interest on fed funds sold and rev repos | 2 | 7 | 14 | 11 | 1 | |||||
Other interest income | 934 | 473 | 355 | 371 | 267 | |||||
Total interest income-FTE | 118,855 | 122,059 | 121,092 | 116,686 | 109,744 | |||||
Interest on deposits | 9,491 | 7,284 | 6,381 | 5,107 | 3,945 | |||||
Interest on fed funds pch and repos | 662 | 1,116 | 1,301 | 1,037 | 698 | |||||
Other interest expense | 3,394 | 4,555 | 4,520 | 3,628 | 2,673 | |||||
Total interest expense | 13,547 | 12,955 | 12,202 | 9,772 | 7,316 | |||||
Net interest income-FTE | 105,308 | 109,104 | 108,890 | 106,914 | 102,428 | |||||
Provision for loan losses, LHFI | 3,961 | 5,739 | 3,672 | 2,921 | 2,762 | |||||
Provision for loan losses, acquired loans | 150 | (1,573) | (1,653) | (2,564) | (1,605) | |||||
Net interest income after provision-FTE | 101,197 | 104,938 | 106,871 | 106,557 | 101,271 | |||||
Service charges on deposit accounts | 10,857 | 11,193 | 11,223 | 10,755 | 10,832 | |||||
Bank card and other fees | 6,626 | 7,266 | 7,150 | 7,370 | 6,500 | |||||
Mortgage banking, net | 11,265 | 6,284 | 4,425 | 9,008 | 10,185 | |||||
Insurance commissions | 9,419 | 8,813 | 10,398 | 9,745 | 9,212 | |||||
Wealth management | 7,567 | 7,723 | 7,530 | 7,674 | 7,413 | |||||
Other, net | 1,059 | 2,681 | 3,740 | 5,637 | 1,891 | |||||
Nonint inc-excl sec gains (losses), net | 46,793 | 43,960 | 44,466 | 50,189 | 46,033 | |||||
Security gains (losses), net | — | — | 14 | 1 | — | |||||
Total noninterest income | 46,793 | 43,960 | 44,480 | 50,190 | 46,033 | |||||
Salaries and employee benefits | 58,475 | 58,820 | 57,871 | 57,185 | 55,389 | |||||
Defined benefit plan termination | — | — | — | 17,644 | — | |||||
Services and fees | 15,746 | 15,419 | 15,133 | 15,009 | 15,332 | |||||
Net occupancy-premises | 6,502 | 6,617 | 6,702 | 6,210 | 6,238 | |||||
Equipment expense | 6,099 | 5,996 | 6,297 | 6,162 | 5,998 | |||||
Other real estate expense | 866 | 666 | 864 | 383 | 1,759 | |||||
|
2,995 | 2,868 | 2,816 | 2,686 | 2,640 | |||||
Other expense | 11,782 | 12,565 | 13,403 | 16,796 | 14,701 | |||||
Total noninterest expense | 102,465 | 102,951 | 103,086 | 122,075 | 102,057 | |||||
Income before income taxes and tax eq adj | 45,525 | 45,947 | 48,265 | 34,672 | 45,247 | |||||
Tax equivalent adjustment | 3,215 | 5,060 | 4,978 | 4,910 | 4,838 | |||||
Income before income taxes | 42,310 | 40,887 | 43,287 | 29,762 | 40,409 | |||||
Income taxes | 5,480 | 25,119 | 8,708 | 5,727 | 9,161 | |||||
Net income | |
|
|
|
|
|||||
Per share data | ||||||||||
Earnings per share - basic | |
|
|
|
|
|||||
Earnings per share - diluted | |
|
|
|
|
|||||
Dividends per share | |
|
|
|
|
|||||
Weighted average shares outstanding | ||||||||||
Basic | 67,809,234 | 67,742,792 | 67,741,655 | 67,736,298 | 67,687,365 | |||||
Diluted | 67,960,583 | 67,938,986 | 67,916,418 | 67,892,532 | 67,845,785 | |||||
Period end shares outstanding | 67,775,068 | 67,746,094 | 67,742,135 | 67,740,901 | 67,729,434 | |||||
See Notes to Consolidated Financials |
TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||
CONSOLIDATED FINANCIAL INFORMATION | ||||||||||
|
||||||||||
($ in thousands) | ||||||||||
(unaudited) | ||||||||||
Quarter Ended | ||||||||||
NONPERFORMING ASSETS (1) |
|
|
|
|
|
|||||
Nonaccrual loans | ||||||||||
|
|
|
|
|
|
|||||
|
2,116 | 3,034 | 3,242 | 3,174 | 3,559 | |||||
|
48,600 | 49,129 | 59,483 | 63,889 | 49,349 | |||||
|
5,530 | 4,436 | 4,589 | 4,975 | 5,185 | |||||
|
9,329 | 7,893 | 346 | 383 | 1,565 | |||||
Total nonaccrual loans | 68,696 | 67,575 | 69,289 | 74,144 | 61,307 | |||||
Other real estate | ||||||||||
|
8,962 | 11,714 | 12,726 | 13,301 | 13,953 | |||||
|
12,550 | 13,937 | 16,100 | 17,377 | 21,577 | |||||
|
15,737 | 14,260 | 15,319 | 14,377 | 14,974 | |||||
|
1,523 | 2,535 | 2,671 | 3,363 | 4,706 | |||||
|
782 | 782 | 1,540 | 1,540 | 758 | |||||
Total other real estate | 39,554 | 43,228 | 48,356 | 49,958 | 55,968 | |||||
Total nonperforming assets | |
|
|
|
|
|||||
LOANS PAST DUE OVER 90 DAYS (1) |
||||||||||
LHFI | |
|
|
|
|
|||||
LHFS-Guaranteed GNMA serviced loans | ||||||||||
(no obligation to repurchase) | |
|
|
|
|
|||||
Quarter Ended | ||||||||||
ALLOWANCE FOR LOAN LOSSES (1) |
|
|
|
|
|
|||||
Beginning Balance | |
|
|
|
|
|||||
Provision for loan losses | 3,961 | 5,739 | 3,672 | 2,921 | 2,762 | |||||
Charge-offs | (2,542) | (12,075) | (2,752) | (2,118) | (4,202) | |||||
Recoveries | 3,083 | 2,737 | 3,228 | 2,936 | 2,620 | |||||
Net (charge-offs) recoveries | 541 | (9,338) | 476 | 818 | (1,582) | |||||
Ending Balance | |
|
|
|
|
|||||
PROVISION FOR LOAN LOSSES (1) | ||||||||||
|
|
|
|
|
|
|||||
|
(863) | (1,235) | (744) | (975) | 3 | |||||
|
2,664 | 2,779 | 1,860 | 2,268 | 1,826 | |||||
|
(268) | (439) | (72) | 322 | 208 | |||||
|
1,810 | 4,075 | 1,410 | 440 | (464) | |||||
Total provision for loan losses | |
|
|
|
|
|||||
NET CHARGE-OFFS (RECOVERIES) (1) | ||||||||||
|
|
|
|
|
|
|||||
|
(960) | (946) | (796) | (973) | (155) | |||||
|
267 | 5,574 | (11) | 33 | 1,759 | |||||
|
109 | 79 | 85 | 146 | 83 | |||||
|
(41) | 4,435 | (68) | 5 | (171) | |||||
Total net charge-offs (recoveries) | |
|
|
|
|
|||||
(1) - Excludes acquired loans. | ||||||||||
(2) - |
||||||||||
(3) - |
||||||||||
See Notes to Consolidated Financials |
TRUSTMARK CORPORATION AND SUBSIDIARIES | ||||||||||
CONSOLIDATED FINANCIAL INFORMATION | ||||||||||
|
||||||||||
(unaudited) | ||||||||||
Quarter Ended | ||||||||||
FINANCIAL RATIOS AND OTHER DATA |
|
|
|
|
|
|||||
Return on equity | 9.50% | 3.96% | 8.69% | 6.21% | 8.27% | |||||
Return on average tangible equity | 13.05% | 5.60% | 11.95% | 8.68% | 11.39% | |||||
Return on assets | 1.10% | 0.45% | 0.99% | 0.70% | 0.95% | |||||
Interest margin - Yield - FTE | 3.91% | 3.90% | 3.86% | 3.81% | 3.74% | |||||
Interest margin - Cost | 0.45% | 0.41% | 0.39% | 0.32% | 0.25% | |||||
Net interest margin - FTE | 3.46% | 3.48% | 3.47% | 3.49% | 3.49% | |||||
Efficiency ratio (1) | 65.50% | 65.21% | 65.14% | 64.50% | 66.67% | |||||
Full-time equivalent employees | 2,905 | 2,893 | 2,878 | 2,858 | 2,799 | |||||
CREDIT QUALITY RATIOS (2) |
||||||||||
Net charge-offs/average loans | -0.03% | 0.43% | -0.02% | -0.04% | 0.08% | |||||
Provision for loan losses/average loans | 0.19% | 0.26% | 0.17% | 0.14% | 0.14% | |||||
Nonperforming loans/total loans (incl LHFS) | 0.79% | 0.77% | 0.80% | 0.87% | 0.75% | |||||
Nonperforming assets/total loans (incl LHFS) | 1.25% | 1.27% | 1.37% | 1.46% | 1.43% | |||||
Nonperforming assets/total loans (incl LHFS) +ORE | 1.24% | 1.26% | 1.36% | 1.45% | 1.42% | |||||
ALL/total loans (excl LHFS) | 0.95% | 0.90% | 0.96% | 0.92% | 0.91% | |||||
ALL-commercial/total commercial loans | 1.04% | 0.95% | 1.02% | 0.99% | 0.97% | |||||
ALL-consumer/total consumer and home mortgage loans | 0.64% | 0.68% | 0.73% | 0.67% | 0.67% | |||||
ALL/nonperforming loans | 118.25% | 113.55% | 115.94% | 102.75% | 118.17% | |||||
ALL/nonperforming loans (excl specifically reviewed impaired loans) | 314.28% | 320.84% | 301.50% | 277.42% | 263.73% | |||||
CAPITAL RATIOS |
||||||||||
Total equity/total assets | 11.66% | 11.39% | 11.40% | 11.23% | 11.40% | |||||
Tangible equity/tangible assets | 9.00% | 8.77% | 8.79% | 8.61% | 8.80% | |||||
Tangible equity/risk-weighted assets | 11.25% | 11.13% | 11.29% | 11.19% | 11.49% | |||||
Tier 1 leverage ratio (3) | 9.96% | 9.67% | 9.61% | 9.56% | 9.86% | |||||
Common equity tier 1 capital ratio (3) | 12.05% | 11.77% | 11.80% | 11.73% | 12.19% | |||||
Tier 1 risk-based capital ratio (3) | 12.62% | 12.33% | 12.37% | 12.30% | 12.79% | |||||
Total risk-based capital ratio (3) | 13.44% | 13.10% | 13.19% | 13.11% | 13.61% | |||||
STOCK PERFORMANCE |
||||||||||
Market value-Close | |
|
|
|
|
|||||
Book value | |
|
|
|
|
|||||
Tangible book value | |
|
|
|
|
|||||
(1) - |
The efficiency ratio is noninterest expense to total net interest income (FTE) and noninterest income, excluding security gains (losses), amortization of partnership tax credits, amortization of purchased intangibles, and significant non-routine income and expense items. |
(2) - |
Excludes acquired loans. |
(3) - |
The regulatory capital ratios for |
See Notes to Consolidated Financials |
TRUSTMARK CORPORATION AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIALS | ||
|
||
($ in thousands) | ||
(unaudited) |
Note 1 – Business Combinations
On
This merger was accounted for in accordance with
The excess of the consideration paid over the estimated fair value of the net assets acquired was
Loans acquired from Reliance were evaluated under a fair value process. Loans with evidence of deterioration in credit quality and for which it was probable at acquisition that Trustmark would not be able to collect all contractually required payments are referred to as acquired impaired loans and accounted for in accordance with FASB ASC Topic 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality.”
The operations of Reliance are included in Trustmark’s operating results from
Note 2 - Securities Available for Sale and Held to Maturity
The following table is a summary of the estimated fair value of securities available for sale and the amortized cost of securities held to maturity ($ in thousands):
|
|
|
|
|
|||||||||||||||
SECURITIES AVAILABLE FOR SALE |
|||||||||||||||||||
|
|||||||||||||||||||
Issued by |
$ | 40,118 | $ | 45,018 | $ | 49,723 | $ | 51,277 | $ | 53,247 | |||||||||
Issued by |
263 | 267 | 271 | 272 | 274 | ||||||||||||||
Obligations of states and political subdivisions | 75,013 | 79,229 | 89,144 | 96,514 | 109,895 | ||||||||||||||
Mortgage-backed securities | |||||||||||||||||||
Residential mortgage pass-through securities | |||||||||||||||||||
Guaranteed by GNMA | 62,457 | 65,746 | 60,902 | 58,422 | 42,667 | ||||||||||||||
Issued by |
767,676 | 814,450 | 860,131 | 860,571 | 733,214 | ||||||||||||||
Other residential mortgage-backed securities | |||||||||||||||||||
Issued or guaranteed by |
954,537 | 1,016,790 | 1,087,169 | 1,157,241 | 1,202,719 | ||||||||||||||
Commercial mortgage-backed securities | |||||||||||||||||||
Issued or guaranteed by |
197,433 | 217,135 | 221,749 | 223,391 | 223,538 | ||||||||||||||
Total securities available for sale | $ | 2,097,497 | $ | 2,238,635 | $ | 2,369,089 | $ | 2,447,688 | $ | 2,365,554 | |||||||||
SECURITIES HELD TO MATURITY |
|||||||||||||||||||
|
|||||||||||||||||||
Issued by |
$ | 3,703 | $ | 3,692 | $ | 3,680 | $ | 3,669 | $ | 3,658 | |||||||||
Obligations of states and political subdivisions | 46,011 | 46,039 | 46,069 | 46,098 | 46,273 | ||||||||||||||
Mortgage-backed securities | |||||||||||||||||||
Residential mortgage pass-through securities | |||||||||||||||||||
Guaranteed by GNMA | 12,974 | 13,539 | 14,191 | 14,399 | 14,977 | ||||||||||||||
Issued by |
128,517 | 133,975 | 139,172 | 144,282 | 118,733 | ||||||||||||||
Other residential mortgage-backed securities | |||||||||||||||||||
Issued or guaranteed by |
653,325 | 678,926 | 708,715 | 740,042 | 771,296 | ||||||||||||||
Commercial mortgage-backed securities | |||||||||||||||||||
Issued or guaranteed by |
179,445 | 180,315 | 190,456 | 191,264 | 201,130 | ||||||||||||||
Total securities held to maturity | $ | 1,023,975 | $ | 1,056,486 | $ | 1,102,283 | $ | 1,139,754 | $ | 1,156,067 |
TRUSTMARK CORPORATION AND SUBSIDIARIES | |
NOTES TO CONSOLIDATED FINANCIALS | |
|
|
($ in thousands) | |
(unaudited) |
Note 2 - Securities Available for Sale and Held to Maturity (continued)
At
Management continues to focus on asset quality as one of the strategic goals of the securities portfolio, which is evidenced by the investment of approximately 96% of the portfolio in GSE-backed obligations and other Aaa rated securities as determined by Moody’s. None of the securities owned by Trustmark are collateralized by assets which are considered sub-prime. Furthermore, outside of stock ownership in the
Note 3 – Loan Composition
LHFI BY TYPE (excluding acquired loans) |
|
|
|
|
|
|||||||||||||||
Loans secured by real estate: | ||||||||||||||||||||
Construction, land development and other land loans | $ | 986,188 | $ | 987,624 | $ | 950,144 | $ | 922,029 | $ | 859,927 | ||||||||||
Secured by 1-4 family residential properties | 1,698,885 | 1,675,311 | 1,648,733 | 1,655,968 | 1,656,837 | |||||||||||||||
Secured by nonfarm, nonresidential properties | 2,257,899 | 2,193,823 | 2,172,885 | 2,109,367 | 2,064,352 | |||||||||||||||
Other real estate secured | 425,664 | 517,956 | 482,163 | 432,208 | 399,636 | |||||||||||||||
Commercial and industrial loans | 1,561,967 | 1,570,345 | 1,568,588 | 1,635,000 | 1,540,783 | |||||||||||||||
Consumer loans | 168,469 | 171,918 | 173,061 | 170,858 | 166,314 | |||||||||||||||
State and other political subdivision loans | 936,014 | 952,483 | 936,614 | 936,860 | 910,493 | |||||||||||||||
Other loans | 478,899 | 500,507 | 475,153 | 433,755 | 406,315 | |||||||||||||||
LHFI | 8,513,985 | 8,569,967 | 8,407,341 | 8,296,045 | 8,004,657 | |||||||||||||||
Allowance for loan losses | (81,235 | ) | (76,733 | ) | (80,332 | ) | (76,184 | ) | (72,445 | ) | ||||||||||
Net LHFI | $ | 8,432,750 | $ | 8,493,234 | $ | 8,327,009 | $ | 8,219,861 | $ | 7,932,212 |
ACQUIRED LOANS BY TYPE |
|
|
|
|
|
|||||||||||||||
Loans secured by real estate: | ||||||||||||||||||||
Construction, land development and other land loans | $ | 17,575 | $ | 23,586 | $ | 29,384 | $ | 35,054 | $ | 17,651 | ||||||||||
Secured by 1-4 family residential properties | 49,289 | 61,751 | 65,746 | 74,313 | 54,721 | |||||||||||||||
Secured by nonfarm, nonresidential properties | 100,285 | 114,694 | 122,200 | 132,663 | 92,075 | |||||||||||||||
Other real estate secured | 14,581 | 16,746 | 18,431 | 19,553 | 16,275 | |||||||||||||||
Commercial and industrial loans | 21,808 | 31,506 | 34,124 | 34,375 | 20,691 | |||||||||||||||
Consumer loans | 1,920 | 2,600 | 2,749 | 2,833 | 2,664 | |||||||||||||||
Other loans | 10,018 | 10,634 | 11,123 | 16,119 | 14,165 | |||||||||||||||
Acquired loans | 215,476 | 261,517 | 283,757 | 314,910 | 218,242 | |||||||||||||||
Allowance for loan losses, acquired loans | (4,294 | ) | (4,079 | ) | (5,768 | ) | (7,423 | ) | (10,006 | ) | ||||||||||
Net acquired loans | $ | 211,182 | $ | 257,438 | $ | 277,989 | $ | 307,487 | $ | 208,236 |
TRUSTMARK CORPORATION AND SUBSIDIARIES | |
NOTES TO CONSOLIDATED FINANCIALS | |
March 31, 2018 | |
($ in thousands) | |
(unaudited) |
Note 3 – Loan Composition (continued)
March 31, 2018 | |||||||||||||||||||||||
LHFI - COMPOSITION BY REGION (1) |
Total | |
|
|
|
|
|||||||||||||||||
Loans secured by real estate: | |||||||||||||||||||||||
Construction, land development and other land loans | $ | 986,188 | $ | 350,661 | $ | 60,705 | $ | 281,582 | $ | 20,428 | $ | 272,812 | |||||||||||
Secured by 1-4 family residential properties | 1,698,885 | 111,756 | 49,456 | 1,430,525 | 90,317 | 16,831 | |||||||||||||||||
Secured by nonfarm, nonresidential properties | 2,257,899 | 417,309 | 228,019 | 935,116 | 142,576 | 534,879 | |||||||||||||||||
Other real estate secured | 425,664 | 76,262 | 2,471 | 211,356 | 11,930 | 123,645 | |||||||||||||||||
Commercial and industrial loans | 1,561,967 | 221,467 | 22,148 | 788,547 | 346,888 | 182,917 | |||||||||||||||||
Consumer loans | 168,469 | 21,845 | 4,676 | 122,027 | 17,638 | 2,283 | |||||||||||||||||
State and other political subdivision loans | 936,014 | 82,261 | 28,185 | 602,043 | 24,613 | 198,912 | |||||||||||||||||
Other loans | 478,899 | 67,408 | 17,013 | 307,852 | 47,868 | 38,758 | |||||||||||||||||
Loans | $ | 8,513,985 | $ | 1,348,969 | $ | 412,673 | $ | 4,679,048 | $ | 702,258 | $ | 1,371,037 | |||||||||||
CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION (1) |
|||||||||||||||||||||||
Lots | $ | 56,150 | $ | 14,303 | $ | 14,456 | $ | 22,368 | $ | 1,586 | $ | 3,437 | |||||||||||
Development | 51,113 | 5,277 | 7,298 | 23,352 | 406 | 14,780 | |||||||||||||||||
Unimproved land | 91,838 | 13,048 | 14,505 | 31,874 | 13,891 | 18,520 | |||||||||||||||||
1-4 family construction | 198,651 | 65,877 | 11,816 | 85,337 | 1,806 | 33,815 | |||||||||||||||||
Other construction | 588,436 | 252,156 | 12,630 | 118,651 | 2,739 | 202,260 | |||||||||||||||||
Construction, land development and other land loans | $ | 986,188 | $ | 350,661 | $ | 60,705 | $ | 281,582 | $ | 20,428 | $ | 272,812 | |||||||||||
LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION (1) |
|||||||||||||||||||||||
Income producing: | |||||||||||||||||||||||
Retail | $ | 321,962 | $ | 90,321 | $ | 52,846 | $ | 105,837 | $ | 17,914 | $ | 55,044 | |||||||||||
Office | 217,886 | 60,820 | 20,915 | 70,956 | 5,626 | 59,569 | |||||||||||||||||
Nursing homes/senior living | 185,545 | 20,643 | — | 158,572 | 6,330 | — | |||||||||||||||||
Hotel/motel | 279,788 | 56,295 | 60,164 | 55,766 | 34,698 | 72,865 | |||||||||||||||||
Mini-storage | 133,013 | 14,249 | 6,238 | 43,575 | 552 | 68,399 | |||||||||||||||||
Industrial | 87,509 | 11,396 | 9,295 | 15,795 | 3,476 | 47,547 | |||||||||||||||||
Health care | 34,264 | 10,471 | 771 | 20,154 | — | 2,868 | |||||||||||||||||
Convenience stores | 30,576 | 2,847 | — | 17,367 | 831 | 9,531 | |||||||||||||||||
Other | 91,338 | 13,520 | 14,572 | 16,620 | 7,627 | 38,999 | |||||||||||||||||
Total income producing loans | 1,381,881 | 280,562 | 164,801 | 504,642 | 77,054 | 354,822 | |||||||||||||||||
Owner-occupied: | |||||||||||||||||||||||
Office | 160,852 | 27,109 | 20,512 | 70,398 | 5,124 | 37,709 | |||||||||||||||||
Churches | 95,883 | 17,277 | 6,508 | 49,319 | 17,592 | 5,187 | |||||||||||||||||
Industrial warehouses | 141,520 | 10,264 | 2,974 | 56,096 | 14,734 | 57,452 | |||||||||||||||||
Health care | 114,396 | 24,202 | 5,838 | 67,202 | 2,999 | 14,155 | |||||||||||||||||
Convenience stores | 101,933 | 12,762 | 12,431 | 51,667 | 1,275 | 23,798 | |||||||||||||||||
Retail | 50,748 | 15,248 | 6,596 | 20,258 | 1,836 | 6,810 | |||||||||||||||||
Restaurants | 32,272 | 2,817 | 666 | 24,977 | 1,897 | 1,915 | |||||||||||||||||
Auto dealerships | 31,372 | 8,754 | 155 | 12,964 | 9,499 | — | |||||||||||||||||
Other | 147,042 | 18,314 | 7,538 | 77,593 | 10,566 | 33,031 | |||||||||||||||||
Total owner-occupied loans | 876,018 | 136,747 | 63,218 | 430,474 | 65,522 | 180,057 | |||||||||||||||||
Loans secured by nonfarm, nonresidential properties | $ | 2,257,899 | $ | 417,309 | $ | 228,019 | $ | 935,116 | $ | 142,576 | $ | 534,879 | |||||||||||
(1) Excludes acquired loans. |
TRUSTMARK CORPORATION AND SUBSIDIARIES | |
NOTES TO CONSOLIDATED FINANCIALS | |
March 31, 2018 | |
($ in thousands) | |
(unaudited) |
Note 4 – Yields on Earning Assets and Interest-Bearing Liabilities
The following table illustrates the yields on earning assets by category as well as the rates paid on interest-bearing liabilities on a tax equivalent basis:
Quarter Ended | ||||||||||||||||||||
3/31/2018 | 12/31/2017 | 9/30/2017 | 6/30/2017 | 3/31/2017 | ||||||||||||||||
Securities – taxable | 2.26 | % | 2.21 | % | 2.23 | % | 2.26 | % | 2.31 | % | ||||||||||
Securities – nontaxable | 3.68 | % | 4.35 | % | 4.34 | % | 4.35 | % | 4.34 | % | ||||||||||
Securities – total | 2.30 | % | 2.27 | % | 2.29 | % | 2.32 | % | 2.38 | % | ||||||||||
Loans - LHFI & LHFS | 4.45 | % | 4.38 | % | 4.36 | % | 4.30 | % | 4.21 | % | ||||||||||
Acquired loans | 8.13 | % | 9.27 | % | 8.78 | % | 7.96 | % | 8.40 | % | ||||||||||
Loans - total | 4.55 | % | 4.53 | % | 4.51 | % | 4.43 | % | 4.33 | % | ||||||||||
FF sold & rev repo | 1.70 | % | 1.61 | % | 1.55 | % | 1.39 | % | 1.02 | % | ||||||||||
Other earning assets | 1.77 | % | 2.34 | % | 1.67 | % | 1.91 | % | 1.36 | % | ||||||||||
Total earning assets | 3.91 | % | 3.90 | % | 3.86 | % | 3.81 | % | 3.74 | % | ||||||||||
Interest-bearing deposits | 0.49 | % | 0.40 | % | 0.35 | % | 0.29 | % | 0.23 | % | ||||||||||
FF pch & repo | 0.97 | % | 0.93 | % | 0.94 | % | 0.79 | % | 0.57 | % | ||||||||||
Other borrowings | 1.69 | % | 1.35 | % | 1.28 | % | 1.16 | % | 0.90 | % | ||||||||||
Total interest-bearing liabilities | 0.61 | % | 0.56 | % | 0.53 | % | 0.44 | % | 0.34 | % | ||||||||||
Net interest margin | 3.46 | % | 3.48 | % | 3.47 | % | 3.49 | % | 3.49 | % | ||||||||||
Net interest margin excluding acquired loans | 3.37 | % | 3.35 | % | 3.34 | % | 3.37 | % | 3.38 | % |
Reflected in the table above are yields on earning assets and liabilities, along with the net interest margin which equals reported net interest income-FTE, annualized, as a percent of average earning assets. In addition, the table includes net interest margin excluding acquired loans, which equals reported net interest income-FTE excluding interest income on acquired loans, annualized, as a percent of average earning assets excluding average acquired loans.
During the first quarter of 2018, the yield on acquired loans totaled 8.13% and included $594 thousand in recoveries from the settlement of debt, which represented approximately 0.99% of the annualized total acquired loan yield. The net interest margin was negatively impacted by approximately 6 basis points linked quarter and year-over-year due to the enactment of the 2017 Tax Cuts and Jobs Act (Tax Reform Act) which reduced the fully tax equivalent adjustment as a result of the lower corporate tax rate. This compression year-over-year is principally offset by the runoff of maturing investment securities, while linked quarter is offset by the runoff of maturing investment securities and quarterly day count.
Note 5 – Mortgage Banking
Trustmark utilizes a portfolio of exchange-traded derivative instruments, such as
The following table illustrates the components of mortgage banking revenues included in noninterest income in the accompanying income statements:
Quarter Ended | ||||||||||||||||||||
3/31/2018 | 12/31/2017 | 9/30/2017 | 6/30/2017 | 3/31/2017 | ||||||||||||||||
Mortgage servicing income, net | $ | 5,588 | $ | 5,471 | $ | 5,295 | $ | 5,439 | $ | 5,458 | ||||||||||
Change in fair value-MSR from runoff | (2,507 | ) | (2,605 | ) | (2,892 | ) | (2,896 | ) | (2,387 | ) | ||||||||||
Gain on sales of loans, net | 4,585 | 5,300 | 5,083 | 5,001 | 3,550 | |||||||||||||||
Other, net | 295 | (1,120 | ) | (450 | ) | 629 | 772 | |||||||||||||
Mortgage banking income before hedge ineffectiveness | 7,961 | 7,046 | 7,036 | 8,173 | 7,393 | |||||||||||||||
Change in fair value-MSR from market changes | 9,521 | 1,168 | (2,393 | ) | (1,291 | ) | 1,466 | |||||||||||||
Change in fair value of derivatives | (6,217 | ) | (1,930 | ) | (218 | ) | 2,126 | 1,326 | ||||||||||||
Net positive (negative) hedge ineffectiveness | 3,304 | (762 | ) | (2,611 | ) | 835 | 2,792 | |||||||||||||
Mortgage banking, net | $ | 11,265 | $ | 6,284 | $ | 4,425 | $ | 9,008 | $ | 10,185 |
TRUSTMARK CORPORATION AND SUBSIDIARIES | |
NOTES TO CONSOLIDATED FINANCIALS | |
March 31, 2018 | |
($ in thousands) | |
(unaudited) |
Note 6 – Salaries and Employee Benefit Plans
Defined Benefit Pension Plan
Prior to 2017, Trustmark maintained a noncontributory tax-qualified defined benefit pension plan (Trustmark Capital Accumulation Plan, the “Plan”), in which substantially all associates who began employment prior to 2007 participated. As previously reported, on July 26, 2016, the Board of Directors of Trustmark authorized the termination of the Plan, effective as of December 31, 2016. To satisfy commitments made by Trustmark to associates (collectively, the “Continuing Associates”) covered through acquired plans that were merged into the Plan, the Board also approved the spin-off of the portion of the Plan associated with the accrued benefits of the Continuing Associates into a new plan titled the Trustmark Corporation Pension Plan for Certain Employees of Acquired Financial Institutions (the “Spin-Off Plan”), effective as of December 31, 2016, immediately prior to the termination of the Plan. In order to terminate the Plan, in accordance with
Note 7 – Other Noninterest Income and Expense
Other noninterest income consisted of the following for the periods presented ($ in thousands):
Quarter Ended | ||||||||||||||||||||
3/31/2018 | 12/31/2017 | 9/30/2017 | 6/30/2017 | 3/31/2017 | ||||||||||||||||
Partnership amortization for tax credit purposes | $ | (2,202 | ) | $ | (2,478 | ) | $ | (2,521 | ) | $ | (2,287 | ) | $ | (2,274 | ) | |||||
Increase in life insurance cash surrender value | 1,738 | 1,816 | 1,813 | 1,782 | 1,714 | |||||||||||||||
Other miscellaneous income | 1,523 | 3,343 | 4,448 | 6,142 | 2,451 | |||||||||||||||
Total other, net | $ | 1,059 | $ | 2,681 | $ | 3,740 | $ | 5,637 | $ | 1,891 |
Trustmark invests in partnerships that provide income tax credits on a Federal and/or State basis (i.e., new market tax credits, low income housing tax credits and historical tax credits). The income tax credits related to these partnerships are utilized as specifically allowed by income tax law and are recorded as a reduction in income tax expense.
Trustmark received no nontaxable proceeds related to bank-owned life insurance during the first quarter of 2018 compared to nontaxable proceeds of $1.7 million and $2.7 million during the fourth and third quarters of 2017, respectively, and $4.9 million related to life insurance acquired as part of a previous acquisition during the second quarter of 2017, which were recorded in other miscellaneous income in the table above.
Other noninterest expense consisted of the following for the periods presented ($ in thousands):
Quarter Ended | |||||||||||||||||||
3/31/2018 | 12/31/2017 | 9/30/2017 | 6/30/2017 | 3/31/2017 | |||||||||||||||
Loan expense | $ | 2,791 | $ | 2,276 | $ | 3,013 | $ | 2,827 | $ | 2,792 | |||||||||
Amortization of intangibles | 1,397 | 1,522 | 1,539 | 1,544 | 1,564 | ||||||||||||||
Defined benefit plans non-service cost reclass |
885 | 968 | 966 | 1,875 | 1,913 | ||||||||||||||
Other miscellaneous expense | 6,709 | 7,799 | 7,885 | 10,550 | 8,432 | ||||||||||||||
Total other expense | $ | 11,782 | $ | 12,565 | $ | 13,403 | $ | 16,796 | $ | 14,701 |
Trustmark adopted ASU 2017-07, “Compensation-Retirement Benefits (Topic 715)-Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” effective January 1, 2018 and was required to reclassify the defined benefit plans non-service cost from salaries and employee benefits to other expense on the consolidated statements of income for each period presented.
As previously discussed in Note 1 – Business Combinations, non-routine Reliance merger transaction expenses totaled $3.2 million and were included in other miscellaneous expense during the second quarter of 2017.
TRUSTMARK CORPORATION AND SUBSIDIARIES | |
NOTES TO CONSOLIDATED FINANCIALS | |
March 31, 2018 | |
($ in thousands) | |
(unaudited) |
Note 8 – Income Taxes
The income tax provision consisted of the following for the periods presented ($ in thousands):
Quarter Ended | |||||||||||||||||||
3/31/2018 | 12/31/2017 | 9/30/2017 | 6/30/2017 | 3/31/2017 | |||||||||||||||
Current | $ | 2,180 | $ | 3,850 | $ | 8,108 | $ | 5,427 | $ | 5,261 | |||||||||
Deferred | 3,300 | 4,300 | 600 | 300 | 3,900 | ||||||||||||||
Elimination of deferred tax valuation allowance | — | (8,650 | ) | — | — | — | |||||||||||||
Income tax provision before re-measurement | 5,480 | (500 | ) | 8,708 | 5,727 | 9,161 | |||||||||||||
Re-measurement of net deferred tax assets | — | 25,619 | — | — | — | ||||||||||||||
Income tax provision | $ | 5,480 | $ | 25,119 | $ | 8,708 | $ | 5,727 | $ | 9,161 |
During 2013, a deferred tax valuation allowance was created as a result of Trustmark’s merger with
Following the recent enactment of the Tax Reform Act which resulted in the reduction of the corporate federal income tax rate, Trustmark re-measured its net deferred tax assets and recorded an increase in deferred income tax expense of $25.6 million during the fourth quarter of 2017.
Note 9 – Non-GAAP Financial Measures
In addition to capital ratios defined by
Trustmark believes these measures are important because they reflect the level of capital available to withstand unexpected market conditions. Additionally, presentation of these measures allows readers to compare certain aspects of Trustmark’s capitalization to other organizations. These ratios differ from capital measures defined by banking regulators principally in that the numerator excludes shareholders’ equity associated with preferred securities, the nature and extent of which varies across organizations. In Management’s experience, many stock analysts use tangible common equity measures in conjunction with more traditional bank capital ratios to compare capital adequacy of banking organizations with significant amounts of goodwill or other tangible assets, typically stemming from the use of the purchase accounting method in accounting for mergers and acquisitions.
These calculations are intended to complement the capital ratios defined by GAAP and banking regulators. Because GAAP does not include these capital ratio measures, Trustmark believes there are no comparable GAAP financial measures to these tangible common equity ratios. Despite the importance of these measures to Trustmark, there are no standardized definitions for them and, as a result, Trustmark’s calculations may not be comparable with other organizations. Also there may be limits in the usefulness of these measures to investors. As a result, Trustmark encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure. The following table reconciles Trustmark’s calculation of these measures to amounts reported under GAAP.
TRUSTMARK CORPORATION AND SUBSIDIARIES | ||
NOTES TO CONSOLIDATED FINANCIALS | ||
March 31, 2018 | ||
($ in thousands except per share data) | ||
(unaudited) |
Note 9 – Non-GAAP Financial Measures (continued)
Quarter Ended | ||||||||||||||||||||||
3/31/2018 | 12/31/2017 | 9/30/2017 | 6/30/2017 | 3/31/2017 | ||||||||||||||||||
TANGIBLE EQUITY |
||||||||||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||||
Total shareholders' equity | $ | 1,572,514 | $ | 1,579,633 | $ | 1,577,867 | $ | 1,552,240 | $ | 1,533,098 | ||||||||||||
Less: |
(379,627 | ) | (379,627 | ) | (379,627 | ) | (378,191 | ) | (366,156 | ) | ||||||||||||
Identifiable intangible assets | (15,782 | ) | (17,196 | ) | (18,714 | ) | (19,713 | ) | (19,950 | ) | ||||||||||||
Total average tangible equity | $ | 1,177,105 | $ | 1,182,810 | $ | 1,179,526 | $ | 1,154,336 | $ | 1,146,992 | ||||||||||||
PERIOD END BALANCES | ||||||||||||||||||||||
Total shareholders' equity | $ | 1,570,137 | $ | 1,571,701 | $ | 1,582,535 | $ | 1,561,918 | $ | 1,537,961 | ||||||||||||
Less: |
(379,627 | ) | (379,627 | ) | (379,627 | ) | (379,627 | ) | (366,156 | ) | ||||||||||||
Identifiable intangible assets | (14,963 | ) | (16,360 | ) | (17,883 | ) | (19,422 | ) | (19,117 | ) | ||||||||||||
Total tangible equity | (a) | $ | 1,175,547 | $ | 1,175,714 | $ | 1,185,025 | $ | 1,162,869 | $ | 1,152,688 | |||||||||||
TANGIBLE ASSETS |
||||||||||||||||||||||
Total assets | $ | 13,463,439 | $ | 13,797,953 | $ | 13,884,655 | $ | 13,909,138 | $ | 13,490,361 | ||||||||||||
Less: |
(379,627 | ) | (379,627 | ) | (379,627 | ) | (379,627 | ) | (366,156 | ) | ||||||||||||
Identifiable intangible assets | (14,963 | ) | (16,360 | ) | (17,883 | ) | (19,422 | ) | (19,117 | ) | ||||||||||||
Total tangible assets | (b) | $ | 13,068,849 | $ | 13,401,966 | $ | 13,487,145 | $ | 13,510,089 | $ | 13,105,088 | |||||||||||
Risk-weighted assets | (c) | $ | 10,449,352 | $ | 10,566,818 | $ | 10,498,582 | $ | 10,391,912 | $ | 10,031,410 | |||||||||||
NET INCOME ADJUSTED FOR INTANGIBLE AMORTIZATION |
||||||||||||||||||||||
Net income | $ | 36,830 | $ | 15,768 | $ | 34,579 | $ | 24,035 | $ | 31,248 | ||||||||||||
Plus: Intangible amortization net of tax | 1,049 | 940 | 950 | 954 | 966 | |||||||||||||||||
Net income adjusted for intangible amortization | $ | 37,879 | $ | 16,708 | $ | 35,529 | $ | 24,989 | $ | 32,214 | ||||||||||||
Period end common shares outstanding | (d) | 67,775,068 | 67,746,094 | 67,742,135 | 67,740,901 | 67,729,434 | ||||||||||||||||
TANGIBLE COMMON EQUITY MEASUREMENTS |
||||||||||||||||||||||
Return on average tangible equity (1) | 13.05 | % | 5.60 | % | 11.95 | % | 8.68 | % | 11.39 | % | ||||||||||||
Tangible equity/tangible assets | (a)/(b) | 9.00 | % | 8.77 | % | 8.79 | % | 8.61 | % | 8.80 | % | |||||||||||
Tangible equity/risk-weighted assets | (a)/(c) | 11.25 | % | 11.13 | % | 11.29 | % | 11.19 | % | 11.49 | % | |||||||||||
Tangible book value | (a)/(d)*1,000 | $ | 17.34 | $ | 17.35 | $ | 17.49 | $ | 17.17 | $ | 17.02 | |||||||||||
COMMON EQUITY TIER 1 CAPITAL (CET1) |
||||||||||||||||||||||
Total shareholders' equity | $ | 1,570,137 | $ | 1,571,701 | $ | 1,582,535 | $ | 1,561,918 | $ | 1,537,961 | ||||||||||||
AOCI-related adjustments (3) | 67,886 | 48,248 | 27,825 | 28,509 | 43,005 | |||||||||||||||||
CET1 adjustments and deductions: | ||||||||||||||||||||||
|
(366,248 | ) | (366,461 | ) | (359,841 | ) | (360,198 | ) | (347,085 | ) | ||||||||||||
Other adjustments and deductions for CET1 (2) | (12,233 | ) | (10,248 | ) | (11,359 | ) | (11,267 | ) | (10,803 | ) | ||||||||||||
CET1 capital | (e) | 1,259,542 | 1,243,240 | 1,239,160 | 1,218,962 | 1,223,078 | ||||||||||||||||
Additional tier 1 capital instruments plus related surplus | 60,000 | 60,000 | 60,000 | 60,000 | 60,000 | |||||||||||||||||
Less: additional tier 1 capital deductions | (714 | ) | (2 | ) | (471 | ) | (247 | ) | (159 | ) | ||||||||||||
Additional tier 1 capital | 59,286 | 59,998 | 59,529 | 59,753 | 59,841 | |||||||||||||||||
Tier 1 capital | $ | 1,318,828 | $ | 1,303,238 | $ | 1,298,689 | $ | 1,278,715 | $ | 1,282,919 | ||||||||||||
Common equity tier 1 capital ratio | (e)/(c) | 12.05 | % | 11.77 | % | 11.80 | % | 11.73 | % | 12.19 | % |
(1) |
Calculation = ((net income adjusted for intangible amortization/number of days in period)*number of days in year)/total average tangible equity |
(2) |
Includes other intangible assets, net of DTLs, disallowed deferred tax assets (DTAS), threshold deductions and transition adjustments, as applicable. |
(3) |
The December 31, 2017 amount contains a reclassification adjustment of $8.5 million from AOCI to retained earnings as allowed by regulatory agencies in an interagency statement released January 18, 2018 to address disproportionate tax effect in AOCI resulting from the recent enactment of the Tax Cuts and Jobs Act of 2017 and the application of Financial Accounting Standards Board Accounting Standards Codification Topic 740, Income Taxes. |
TRUSTMARK CORPORATION AND SUBSIDIARIES | |
NOTES TO CONSOLIDATED FINANCIALS | |
March 31, 2018 | |
($ in thousands except per share data) |
|
(unaudited) |
Note 9 – Non-GAAP Financial Measures (continued)
Trustmark discloses certain non-GAAP financial measures, including net income adjusted for significant non-routine transactions, because Management uses these measures for business planning purposes, including to manage Trustmark’s business against internal projected results of operations and to measure Trustmark’s performance. Trustmark views net income adjusted for significant non-routine transactions as a measure of our core operating business, which excludes the impact of the items detailed below, as these items are generally not operational in nature. This non-GAAP measure also provides another basis for comparing period-to-period results as presented in the accompanying selected financial data table and the audited consolidated financial statements by excluding potential differences caused by non-operational and unusual or non-recurring items. Readers are cautioned that these adjustments are not permitted under GAAP. Trustmark encourages readers to consider its consolidated financial statements and the notes related thereto in their entirety, and not to rely on any single financial measure.
The following table presents adjustments to net income and select financial ratios as reported in accordance with GAAP resulting from significant non-routine items occurring during the periods presented ($ in thousands, except per share data):
Quarter Ended | |||||||||||||||||||||||||
3/31/2018 | 12/31/2017 | 3/31/2017 | |||||||||||||||||||||||
Amount | Diluted EPS | Amount | Diluted EPS | Amount | Diluted EPS | ||||||||||||||||||||
Net Income (GAAP) | $ | 36,830 | $ | 0.542 | $ | 15,768 | $ | 0.232 | $ | 31,248 | $ | 0.461 | |||||||||||||
Significant non-routine transactions (net of taxes): | |||||||||||||||||||||||||
Re-measurement of net deferred taxes | — | — | 25,619 | 0.377 | — | — | |||||||||||||||||||
Elimination of deferred tax valuation allowance | — | — | (8,650 | ) | (0.127 | ) | — | — | |||||||||||||||||
Net Income adjusted for significant non-routine |
$ | 36,830 | $ | 0.542 | $ | 32,737 | $ | 0.482 | $ | 31,248 | $ |
0.461 |
|||||||||||||
Reported | Adjusted | Reported | Adjusted | Reported | Adjusted | ||||||||||||||||||||
(GAAP) | (Non-GAAP) | (GAAP) | (Non-GAAP) | (GAAP) | (Non-GAAP) | ||||||||||||||||||||
Return on equity | 9.50 | % | n/a | 3.96 | % | 8.22 | % | 8.27 | % | n/a | |||||||||||||||
Return on average tangible equity | 13.05 | % | n/a | 5.60 | % | 11.30 | % | 11.39 | % | n/a | |||||||||||||||
Return on assets | 1.10 | % | n/a | 0.45 | % | 0.94 | % | 0.95 | % | n/a | |||||||||||||||
n/a - not applicable |
View source version on businesswire.com: https://www.businesswire.com/news/home/20180424006356/en/
Trustmark Investor Contacts:
Treasurer and
Principal Financial Officer
or
Senior Vice President
or
Trustmark Media Contact:
Senior Vice President
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