Loan growth, fee income expansion, disciplined expense management and strong credit quality reflected in performance
JACKSON, Miss.–(BUSINESS WIRE)–Trustmark Corporation (NASDAQ:TRMK) reported net income of $42.1 million in the second quarter of 2019, representing diluted earnings per share of $0.65. Diluted earnings per share in the second quarter of 2019 increased 27.5% when compared to the previous quarter and 10.2% when compared to the same period in the prior year. This level of earnings resulted in a return on average tangible equity of 14.14% and a return on average assets of 1.24%. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable September 15, 2019, to shareholders of record on September 1, 2019.
Printer friendly version of earnings release with consolidated financial statements and notes: https://www.businesswire.com/news/home/52016691/en
Second Quarter Highlights
- Revenue, excluding interest and fees on acquired loans, increased 7.6% linked quarter and 5.3% year-over-year to total $155.4 million
- The net interest margin (FTE), excluding acquired loans, was 3.60% in the second quarter, unchanged from the prior quarter and up 14 basis points year-over-year
- Sustained strong credit performance reflected in reduced nonperforming assets and net charge-offs
- Efficiency ratio improved to 64.55%
Gerard R. Host, President and CEO, stated, “Our second quarter performance continued to illustrate the value of Trustmark’s diverse franchise. We continued to focus upon strategic initiatives of profitable revenue growth, capital deployment through additional share repurchases and disciplined expense management. We also continued to maintain and expand customer relationships as evidenced by strength in our banking, mortgage, insurance and wealth management businesses. Thanks to our talented associates, solid profitability and strong capital base, Trustmark remains well positioned to continue meeting the needs of our customers and creating long-term value for our shareholders.”
Balance Sheet Management
- Loans held for investment expanded 1.4% from the prior quarter and 5.0% when compared to the same period in the prior year
- Continued balance sheet and capital optimization through maturing investment securities run-off and share repurchases
- Noninterest-bearing deposits represented 25.2% of total deposits at June 30, 2019
Loans held for investment totaled $9.1 billion at June 30, 2019, reflecting an increase of $121.7 million, or 1.4%, linked-quarter and $437.8 million, or 5.0%, from the prior year. Acquired loans totaled $87.9 million at June 30, 2019, down $5.3 million from the prior quarter. Collectively, loans held for investment and acquired loans totaled $9.2 billion at the end of the second quarter of 2019, up $116.4 million, or 1.3% from the prior quarter and $352.6 million, or 4.0%, year-over-year.
Deposits totaled $11.6 billion at June 30, 2019, up $31.8 million from the prior quarter and $494.2 million year-over-year. Interest-bearing deposit costs totaled 0.99% in the second quarter, an increase of 6 basis points linked-quarter. Trustmark continues to maintain an attractive, low-cost deposit base with approximately 57% of deposit balances in checking accounts.
Trustmark’s capital position remained solid, reflecting the consistent profitability of its diversified financial services businesses. During the second quarter, Trustmark repurchased $13.0 million, or approximately 398 thousand of its common shares in open market transactions. At June 30, 2019, Trustmark had $87.0 million in remaining authority under its existing stock repurchase program, which expires March 31, 2020. At June 30, 2019, Trustmark’s tangible equity to tangible assets ratio was 9.34%, while the total risk-based capital ratio was 13.07%.
Credit Quality
- Nonperforming loans decreased 6.3% and 13.8% from the prior quarter and year-over-year, respectively
- Other real estate declined 2.8% from the prior quarter and 21.2% year-over-year
- Net charge-offs represented 0.05% of average loans in the second quarter
Nonperforming loans totaled $52.9 million at June 30, 2019, down $3.5 million from the prior quarter and $8.5 million year-over-year. Other real estate totaled $31.2 million, down $896 thousand from the prior quarter and $8.4 million from the same period one year earlier. Collectively, nonperforming assets totaled $84.1 million, reflecting a linked-quarter decrease of 5.0% and year-over-year decrease of 16.7%.
Allocation of Trustmark’s $80.4 million allowance for loan losses represented 0.96% of commercial loans and 0.60% of consumer and home mortgage loans, resulting in an allowance to total loans held for investment of 0.88% at June 30, 2019, representing a level management considers commensurate with the inherent risk in the loan portfolio. The allowance for loan losses represented 383.19% of nonperforming loans, excluding specifically reviewed impaired loans.
Unless otherwise noted, all of the above credit quality metrics exclude acquired loans.
Revenue Generation
- Total revenue in the second quarter was $157.4 million, up 7.6% linked-quarter and 3.2% year-over-year
- Net interest income (FTE) totaled $111.0 million in the second quarter, up 2.7% linked-quarter and 2.4% year-over-year
- Noninterest income totaled $49.6 million in the second quarter, up 19.6% linked-quarter and 4.7% year-over-year
Net interest income (FTE) in the second quarter totaled $111.0 million, resulting in a net interest margin of 3.64%, up 1 basis point from the prior quarter. Relative to the prior quarter, net interest income (FTE) increased $2.9 million, reflecting a $4.7 million increase in interest income and a $1.7 million increase in interest expense. During the second quarter of 2019, the yield on acquired loans totaled 8.84% and included $583 thousand in recoveries from the settlement of debt, which represented approximately 2.56% of the annualized total acquired loan yield. Excluding acquired loans, the net interest margin totaled 3.60% for the second quarter of 2019, unchanged from the prior quarter as growth in the yield on the loans held for investment and held for sale portfolio, runoff of maturing investment securities, and favorable funding mix were offset by higher costs of interest-bearing deposits.
Noninterest income in the second quarter totaled $49.6 million, an increase of $8.1 million from the prior quarter and $2.2 million when compared to the same period in the prior year. Mortgage banking revenue totaled $10.3 million in the second quarter, up $6.9 million from the prior quarter and $1.2 million year-over-year. The linked-quarter change reflects reduced negative net mortgage hedge ineffectiveness as well as an increase in gains on sales of loans. Mortgage loan production in the second quarter totaled $414.1 million, up 46.1% from the prior quarter and 0.9% year-over-year.
Insurance revenue totaled $11.1 million in the second quarter, up 2.0% from the prior quarter and 3.3% year-over-year due principally to growth in property and casualty commissions. Wealth management revenue in the second quarter totaled $7.7 million, an increase of 3.5% from the prior quarter and year-over-year. This performance is primarily attributable to increased trust and investment management fees. Bank card and other fees increased $813 thousand from the prior quarter primarily due to a seasonal increase in interchange income as well as growth in customer derivative revenue.
Noninterest Expense
- Total noninterest expense totaled $106.1 million in the second quarter, up 0.1% from the prior quarter and 2.2% year-over-year
- Core noninterest expense, which excludes other real estate expense and intangible amortization, totaled $105.0 million, up 1.8% from the prior quarter and 2.3% year-over-year
Salaries and employee benefits increased $995 thousand from the prior quarter to total $61.9 million, primarily due to higher insurance and mortgage commissions as a result of continued growth in both business lines. Services and fees rose 6.1%, or $1.0 million, linked-quarter primarily due to professional fees as well as new software investments designed to improve efficiency and customer experience. Other real estate expense, net declined $1.6 million linked-quarter while other expense declined $397 thousand, or 3.3%, linked-quarter to total $11.8 million.
Additional Information
As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, July 24, 2019 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, August 7, 2019, in archived format at the same web address or by calling (877) 344-7529, passcode 10132843.
Trustmark is a financial services company providing banking and financial solutions through 193 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,” “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 Securities and Exchange Commission could have an adverse effect on our business, results of operations and financial condition. Should one or more of these risks materialize, or should any such underlying assumptions prove to be significantly different, actual results may vary significantly from those anticipated, estimated, projected or expected.
Risks that could cause actual results to differ materially from current expectations of Management include, but are not limited to, changes in the level of nonperforming assets and charge-offs, local, state and national economic and market conditions, including potential market impacts of efforts by the Federal Reserve Board to reduce the size of its balance sheet, 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 as well as 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 relating to the European financial system and monetary and other governmental actions designed to address credit, securities, and/or commodity markets, the enactment of legislation and changes in existing regulations or enforcement practices or the adoption of new regulations, changes in accounting standards and practices, including changes in the interpretation of existing standards, that affect our consolidated financial statements, changes in consumer spending, borrowings and savings habits, technological changes, changes in the financial performance or condition of our borrowers, changes in our ability to control expenses, greater than expected costs or difficulties related to the integration of acquisitions or new products and lines of business, cyber-attacks and other breaches which could affect our information system security, natural disasters, environmental disasters, acts of war or terrorism, and other risks described in our filings with the Securities and Exchange Commission.
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 | |||||||||||||||||||||||||
| June 30, 2019 | |||||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||
| Linked Quarter | Year over Year | ||||||||||||||||||||||||
| QUARTERLY AVERAGE BALANCES | 6/30/2019 | 3/31/2019 | 6/30/2018 | $ Change | % Change | $ Change | % Change | ||||||||||||||||||
| Securities AFS-taxable |
$ |
1,661,464 |
|
$ |
1,753,268 |
|
$ |
2,038,759 |
|
$ |
(91,804 |
) |
-5.2 |
% |
$ |
(377,295 |
) |
-18.5 |
% |
||||||
| Securities AFS-nontaxable |
|
31,474 |
|
|
40,159 |
|
|
50,035 |
|
|
(8,685 |
) |
-21.6 |
% |
|
(18,561 |
) |
-37.1 |
% |
||||||
| Securities HTM-taxable |
|
821,357 |
|
|
866,665 |
|
|
972,571 |
|
|
(45,308 |
) |
-5.2 |
% |
|
(151,214 |
) |
-15.5 |
% |
||||||
| Securities HTM-nontaxable |
|
27,035 |
|
|
28,710 |
|
|
30,337 |
|
|
(1,675 |
) |
-5.8 |
% |
|
(3,302 |
) |
-10.9 |
% |
||||||
| Total securities |
|
2,541,330 |
|
|
2,688,802 |
|
|
3,091,702 |
|
|
(147,472 |
) |
-5.5 |
% |
|
(550,372 |
) |
-17.8 |
% |
||||||
| Loans (including loans held for sale) |
|
9,260,028 |
|
|
9,038,204 |
|
|
8,707,466 |
|
|
221,824 |
|
2.5 |
% |
|
552,562 |
|
6.3 |
% |
||||||
| Acquired loans |
|
91,217 |
|
|
104,316 |
|
|
202,140 |
|
|
(13,099 |
) |
-12.6 |
% |
|
(110,923 |
) |
-54.9 |
% |
||||||
| Fed funds sold and rev repos |
|
34,057 |
|
|
277 |
|
|
1,063 |
|
|
33,780 |
|
n/m |
|
|
32,994 |
|
n/m |
|
||||||
| Other earning assets |
|
316,604 |
|
|
243,493 |
|
|
186,224 |
|
|
73,111 |
|
30.0 |
% |
|
130,380 |
|
70.0 |
% |
||||||
| Total earning assets |
|
12,243,236 |
|
|
12,075,092 |
|
|
12,188,595 |
|
|
168,144 |
|
1.4 |
% |
|
54,641 |
|
0.4 |
% |
||||||
| Allowance for loan losses |
|
(81,996 |
) |
|
(82,227 |
) |
|
(86,315 |
) |
|
231 |
|
0.3 |
% |
|
4,319 |
|
5.0 |
% |
||||||
| Cash and due from banks |
|
478,384 |
|
|
423,749 |
|
|
319,075 |
|
|
54,635 |
|
12.9 |
% |
|
159,309 |
|
49.9 |
% |
||||||
| Other assets |
|
989,078 |
|
|
1,023,862 |
|
|
1,042,156 |
|
|
(34,784 |
) |
-3.4 |
% |
|
(53,078 |
) |
-5.1 |
% |
||||||
| Total assets |
$ |
13,628,702 |
|
$ |
13,440,476 |
|
$ |
13,463,511 |
|
$ |
188,226 |
|
1.4 |
% |
$ |
165,191 |
|
1.2 |
% |
||||||
| Interest-bearing demand deposits |
$ |
3,048,876 |
|
$ |
2,899,467 |
|
$ |
2,439,777 |
|
$ |
149,409 |
|
5.2 |
% |
$ |
609,099 |
|
25.0 |
% |
||||||
| Savings deposits |
|
3,801,187 |
|
|
3,786,835 |
|
|
3,860,096 |
|
|
14,352 |
|
0.4 |
% |
|
(58,909 |
) |
-1.5 |
% |
||||||
| Time deposits |
|
1,840,065 |
|
|
1,881,556 |
|
|
1,798,855 |
|
|
(41,491 |
) |
-2.2 |
% |
|
41,210 |
|
2.3 |
% |
||||||
| Total interest-bearing deposits |
|
8,690,128 |
|
|
8,567,858 |
|
|
8,098,728 |
|
|
122,270 |
|
1.4 |
% |
|
591,400 |
|
7.3 |
% |
||||||
| Fed funds purchased and repos |
|
51,264 |
|
|
84,352 |
|
|
352,256 |
|
|
(33,088 |
) |
-39.2 |
% |
|
(300,992 |
) |
-85.4 |
% |
||||||
| Other borrowings |
|
81,352 |
|
|
90,804 |
|
|
249,853 |
|
|
(9,452 |
) |
-10.4 |
% |
|
(168,501 |
) |
-67.4 |
% |
||||||
| Junior subordinated debt securities |
|
61,856 |
|
|
61,856 |
|
|
61,856 |
|
— |
0.0 |
% |
— |
0.0 |
% |
||||||||||
| Total interest-bearing liabilities |
|
8,884,600 |
|
|
8,804,870 |
|
|
8,762,693 |
|
|
79,730 |
|
0.9 |
% |
|
121,907 |
|
1.4 |
% |
||||||
| Noninterest-bearing deposits |
|
2,898,266 |
|
|
2,824,220 |
|
|
2,930,726 |
|
|
74,046 |
|
2.6 |
% |
|
(32,460 |
) |
-1.1 |
% |
||||||
| Other liabilities |
|
240,091 |
|
|
221,199 |
|
|
188,186 |
|
|
18,892 |
|
8.5 |
% |
|
51,905 |
|
27.6 |
% |
||||||
| Total liabilities |
|
12,022,957 |
|
|
11,850,289 |
|
|
11,881,605 |
|
|
172,668 |
|
1.5 |
% |
|
141,352 |
|
1.2 |
% |
||||||
| Shareholders’ equity |
|
1,605,745 |
|
|
1,590,187 |
|
|
1,581,906 |
|
|
15,558 |
|
1.0 |
% |
|
23,839 |
|
1.5 |
% |
||||||
| Total liabilities and equity |
$ |
13,628,702 |
|
$ |
13,440,476 |
|
$ |
13,463,511 |
|
$ |
188,226 |
|
1.4 |
% |
$ |
165,191 |
|
1.2 |
% |
||||||
|
n/m – percentage changes greater than +/- 100% are considered not meaningful
See Notes to Consolidated Financials |
|||||||||||||||||||||||||
| TRUSTMARK CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||||||||
| June 30, 2019 | |||||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||||
| (unaudited) | Linked Quarter | Year over Year | |||||||||||||||||||||||
| PERIOD END BALANCES | 6/30/2019 | 3/31/2019 | 6/30/2018 | $ Change | % Change | $ Change | % Change | ||||||||||||||||||
| Cash and due from banks |
$ |
404,413 |
|
$ |
454,047 |
|
$ |
387,119 |
|
$ |
(49,634 |
) |
-10.9 |
% |
$ |
17,294 |
|
4.5 |
% |
||||||
| Fed funds sold and rev repos |
|
75,499 |
|
— |
— |
|
75,499 |
|
n/m |
|
|
75,499 |
|
n/m |
|
||||||||||
| Securities available for sale |
|
1,643,725 |
|
|
1,723,445 |
|
|
1,974,675 |
|
|
(79,720 |
) |
-4.6 |
% |
|
(330,950 |
) |
-16.8 |
% |
||||||
| Securities held to maturity |
|
825,536 |
|
|
884,319 |
|
|
985,845 |
|
|
(58,783 |
) |
-6.6 |
% |
|
(160,309 |
) |
-16.3 |
% |
||||||
| Loans held for sale (LHFS) |
|
240,380 |
|
|
172,683 |
|
|
196,217 |
|
|
67,697 |
|
39.2 |
% |
|
44,163 |
|
22.5 |
% |
||||||
| Loans held for investment (LHFI) |
|
9,116,759 |
|
|
8,995,014 |
|
|
8,678,983 |
|
|
121,745 |
|
1.4 |
% |
|
437,776 |
|
5.0 |
% |
||||||
| Allowance for loan losses, LHFI |
|
(80,399 |
) |
|
(79,005 |
) |
|
(83,566 |
) |
|
(1,394 |
) |
-1.8 |
% |
|
3,167 |
|
3.8 |
% |
||||||
| Net LHFI |
|
9,036,360 |
|
|
8,916,009 |
|
|
8,595,417 |
|
|
120,351 |
|
1.3 |
% |
|
440,943 |
|
5.1 |
% |
||||||
| Acquired loans |
|
87,884 |
|
|
93,201 |
|
|
173,107 |
|
|
(5,317 |
) |
-5.7 |
% |
|
(85,223 |
) |
-49.2 |
% |
||||||
| Allowance for loan losses, acquired loans |
|
(1,398 |
) |
|
(1,297 |
) |
|
(3,046 |
) |
|
(101 |
) |
-7.8 |
% |
|
1,648 |
|
54.1 |
% |
||||||
| Net acquired loans |
|
86,486 |
|
|
91,904 |
|
|
170,061 |
|
|
(5,418 |
) |
-5.9 |
% |
|
(83,575 |
) |
-49.1 |
% |
||||||
| Net LHFI and acquired loans |
|
9,122,846 |
|
|
9,007,913 |
|
|
8,765,478 |
|
|
114,933 |
|
1.3 |
% |
|
357,368 |
|
4.1 |
% |
||||||
| Premises and equipment, net |
|
189,820 |
|
|
189,743 |
|
|
177,686 |
|
|
77 |
|
0.0 |
% |
|
12,134 |
|
6.8 |
% |
||||||
| Mortgage servicing rights |
|
79,283 |
|
|
86,842 |
|
|
97,411 |
|
|
(7,559 |
) |
-8.7 |
% |
|
(18,128 |
) |
-18.6 |
% |
||||||
| Goodwill |
|
379,627 |
|
|
379,627 |
|
|
379,627 |
|
|
— |
0.0 |
% |
|
— |
0.0 |
% |
||||||||
| Identifiable intangible assets |
|
9,101 |
|
|
10,092 |
|
|
13,677 |
|
|
(991 |
) |
-9.8 |
% |
|
(4,576 |
) |
-33.5 |
% |
||||||
| Other real estate |
|
31,243 |
|
|
32,139 |
|
|
39,667 |
|
|
(896 |
) |
-2.8 |
% |
|
(8,424 |
) |
-21.2 |
% |
||||||
| Operating lease right-of-use assets |
|
32,762 |
|
|
33,861 |
|
|
— |
|
(1,099 |
) |
-3.2 |
% |
|
32,762 |
|
n/m |
|
|||||||
| Other assets |
|
514,723 |
|
|
503,306 |
|
|
507,863 |
|
|
11,417 |
|
2.3 |
% |
|
6,860 |
|
1.4 |
% |
||||||
| Total assets |
$ |
13,548,958 |
|
$ |
13,478,017 |
|
$ |
13,525,265 |
|
$ |
70,941 |
|
0.5 |
% |
$ |
23,693 |
|
0.2 |
% |
||||||
| Deposits: | |||||||||||||||||||||||||
| Noninterest-bearing |
$ |
2,909,141 |
|
$ |
2,867,778 |
|
$ |
2,958,354 |
|
$ |
41,363 |
|
1.4 |
% |
$ |
(49,213 |
) |
-1.7 |
% |
||||||
| Interest-bearing |
|
8,657,488 |
|
|
8,667,037 |
|
|
8,114,081 |
|
|
(9,549 |
) |
-0.1 |
% |
|
543,407 |
|
6.7 |
% |
||||||
| Total deposits |
|
11,566,629 |
|
|
11,534,815 |
|
|
11,072,435 |
|
|
31,814 |
|
0.3 |
% |
|
494,194 |
|
4.5 |
% |
||||||
| Fed funds purchased and repos |
|
51,800 |
|
|
46,867 |
|
|
477,891 |
|
|
4,933 |
|
10.5 |
% |
|
(426,091 |
) |
-89.2 |
% |
||||||
| Other borrowings |
|
79,012 |
|
|
83,265 |
|
|
187,560 |
|
|
(4,253 |
) |
-5.1 |
% |
|
(108,548 |
) |
-57.9 |
% |
||||||
| Junior subordinated debt securities |
|
61,856 |
|
|
61,856 |
|
|
61,856 |
|
|
— |
0.0 |
% |
|
— |
0.0 |
% |
||||||||
| Operating lease liabilities |
|
33,878 |
|
|
34,921 |
|
|
— |
|
(1,043 |
) |
-3.0 |
% |
|
33,878 |
|
n/m |
|
|||||||
| Other liabilities |
|
137,233 |
|
|
129,265 |
|
|
141,451 |
|
|
7,968 |
|
6.2 |
% |
|
(4,218 |
) |
-3.0 |
% |
||||||
| Total liabilities |
|
11,930,408 |
|
|
11,890,989 |
|
|
11,941,193 |
|
|
39,419 |
|
0.3 |
% |
|
(10,785 |
) |
-0.1 |
% |
||||||
| Common stock |
|
13,418 |
|
|
13,499 |
|
|
14,089 |
|
|
(81 |
) |
-0.6 |
% |
|
(671 |
) |
-4.8 |
% |
||||||
| Capital surplus |
|
260,619 |
|
|
272,268 |
|
|
361,715 |
|
|
(11,649 |
) |
-4.3 |
% |
|
(101,096 |
) |
-27.9 |
% |
||||||
| Retained earnings |
|
1,369,329 |
|
|
1,342,176 |
|
|
1,282,007 |
|
|
27,153 |
|
2.0 |
% |
|
87,322 |
|
6.8 |
% |
||||||
| Accum other comprehensive loss, net of tax |
|
(24,816 |
) |
|
(40,915 |
) |
|
(73,739 |
) |
|
16,099 |
|
39.3 |
% |
|
48,923 |
|
66.3 |
% |
||||||
| Total shareholders’ equity |
|
1,618,550 |
|
|
1,587,028 |
|
|
1,584,072 |
|
|
31,522 |
|
2.0 |
% |
|
34,478 |
|
2.2 |
% |
||||||
| Total liabilities and equity |
$ |
13,548,958 |
|
$ |
13,478,017 |
|
$ |
13,525,265 |
|
$ |
70,941 |
|
0.5 |
% |
$ |
23,693 |
|
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 | |||||||||||||||||||||||
| June 30, 2019 | |||||||||||||||||||||||
| ($ in thousands except per share data) | |||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||
| Quarter Ended | Linked Quarter | Year over Year | |||||||||||||||||||||
| INCOME STATEMENTS | 6/30/2019 | 3/31/2019 | 6/30/2018 | $ Change | % Change | $ Change | % Change | ||||||||||||||||
| Interest and fees on LHFS & LHFI-FTE |
$ |
114,873 |
$ |
109,890 |
$ |
99,761 |
|
$ |
4,983 |
|
4.5 |
% |
$ |
15,112 |
|
15.1 |
% |
||||||
| Interest and fees on acquired loans |
|
2,010 |
|
1,916 |
|
5,022 |
|
|
94 |
|
4.9 |
% |
|
(3,012 |
) |
-60.0 |
% |
||||||
| Interest on securities-taxable |
|
13,916 |
|
14,665 |
|
16,894 |
|
|
(749 |
) |
-5.1 |
% |
|
(2,978 |
) |
-17.6 |
% |
||||||
| Interest on securities-tax exempt-FTE |
|
551 |
|
646 |
|
733 |
|
|
(95 |
) |
-14.7 |
% |
|
(182 |
) |
-24.8 |
% |
||||||
| Interest on fed funds sold and rev repos |
|
214 |
|
2 |
|
5 |
|
|
212 |
|
n/m |
|
|
209 |
|
n/m |
|
||||||
| Other interest income |
|
1,820 |
|
1,603 |
|
1,054 |
|
|
217 |
|
13.5 |
% |
|
766 |
|
72.7 |
% |
||||||
| Total interest income-FTE |
|
133,384 |
|
128,722 |
|
123,469 |
|
|
4,662 |
|
3.6 |
% |
|
9,915 |
|
8.0 |
% |
||||||
| Interest on deposits |
|
21,500 |
|
19,570 |
|
12,139 |
|
|
1,930 |
|
9.9 |
% |
|
9,361 |
|
77.1 |
% |
||||||
| Interest on fed funds pch and repos |
|
81 |
|
288 |
|
1,250 |
|
|
(207 |
) |
-71.9 |
% |
|
(1,169 |
) |
-93.5 |
% |
||||||
| Other interest expense |
|
831 |
|
825 |
|
1,713 |
|
|
6 |
|
0.7 |
% |
|
(882 |
) |
-51.5 |
% |
||||||
| Total interest expense |
|
22,412 |
|
20,683 |
|
15,102 |
|
|
1,729 |
|
8.4 |
% |
|
7,310 |
|
48.4 |
% |
||||||
| Net interest income-FTE |
|
110,972 |
|
108,039 |
|
108,367 |
|
|
2,933 |
|
2.7 |
% |
|
2,605 |
|
2.4 |
% |
||||||
| Provision for loan losses, LHFI |
|
2,486 |
|
1,611 |
|
3,167 |
|
|
875 |
|
54.3 |
% |
|
(681 |
) |
-21.5 |
% |
||||||
| Provision for loan losses, acquired loans |
|
106 |
|
78 |
|
(441 |
) |
|
28 |
|
35.9 |
% |
|
547 |
|
n/m |
|
||||||
| Net interest income after provision-FTE |
|
108,380 |
|
106,350 |
|
105,641 |
|
|
2,030 |
|
1.9 |
% |
|
2,739 |
|
2.6 |
% |
||||||
| Service charges on deposit accounts |
|
10,379 |
|
10,265 |
|
10,647 |
|
|
114 |
|
1.1 |
% |
|
(268 |
) |
-2.5 |
% |
||||||
| Bank card and other fees |
|
8,004 |
|
7,191 |
|
7,070 |
|
|
813 |
|
11.3 |
% |
|
934 |
|
13.2 |
% |
||||||
| Mortgage banking, net |
|
10,295 |
|
3,442 |
|
9,046 |
|
|
6,853 |
|
n/m |
|
|
1,249 |
|
13.8 |
% |
||||||
| Insurance commissions |
|
11,089 |
|
10,871 |
|
10,735 |
|
|
218 |
|
2.0 |
% |
|
354 |
|
3.3 |
% |
||||||
| Wealth management |
|
7,742 |
|
7,483 |
|
7,478 |
|
|
259 |
|
3.5 |
% |
|
264 |
|
3.5 |
% |
||||||
| Other, net |
|
2,130 |
|
2,239 |
|
2,415 |
|
|
(109 |
) |
-4.9 |
% |
|
(285 |
) |
-11.8 |
% |
||||||
| Nonint inc-excl sec gains (losses), net |
|
49,639 |
|
41,491 |
|
47,391 |
|
|
8,148 |
|
19.6 |
% |
|
2,248 |
|
4.7 |
% |
||||||
| Security gains (losses), net | — | — |
— |
— |
n/m |
|
— |
n/m |
|
||||||||||||||
| Total noninterest income |
|
49,639 |
|
41,491 |
|
47,391 |
|
|
8,148 |
|
19.6 |
% |
|
2,248 |
|
4.7 |
% |
||||||
| Salaries and employee benefits |
|
61,949 |
|
60,954 |
|
59,975 |
|
|
995 |
|
1.6 |
% |
|
1,974 |
|
3.3 |
% |
||||||
| Services and fees |
|
18,009 |
|
16,968 |
|
16,322 |
|
|
1,041 |
|
6.1 |
% |
|
1,687 |
|
10.3 |
% |
||||||
| Net occupancy-premises |
|
6,403 |
|
6,454 |
|
6,550 |
|
|
(51 |
) |
-0.8 |
% |
|
(147 |
) |
-2.2 |
% |
||||||
| Equipment expense |
|
5,958 |
|
5,924 |
|
6,202 |
|
|
34 |
|
0.6 |
% |
|
(244 |
) |
-3.9 |
% |
||||||
| Other real estate expense, net |
|
132 |
|
1,752 |
|
(93 |
) |
|
(1,620 |
) |
-92.5 |
% |
|
225 |
|
n/m |
|
||||||
| FDIC assessment expense |
|
1,836 |
|
1,758 |
|
2,538 |
|
|
78 |
|
4.4 |
% |
|
(702 |
) |
-27.7 |
% |
||||||
| Other expense |
|
11,814 |
|
12,211 |
|
12,306 |
|
|
(397 |
) |
-3.3 |
% |
|
(492 |
) |
-4.0 |
% |
||||||
| Total noninterest expense |
|
106,101 |
|
106,021 |
|
103,800 |
|
|
80 |
|
0.1 |
% |
|
2,301 |
|
2.2 |
% |
||||||
| Income before income taxes and tax eq adj |
|
51,918 |
|
41,820 |
|
49,232 |
|
|
10,098 |
|
24.1 |
% |
|
2,686 |
|
5.5 |
% |
||||||
| Tax equivalent adjustment |
|
3,248 |
|
3,231 |
|
3,203 |
|
|
17 |
|
0.5 |
% |
|
45 |
|
1.4 |
% |
||||||
| Income before income taxes |
|
48,670 |
|
38,589 |
|
46,029 |
|
|
10,081 |
|
26.1 |
% |
|
2,641 |
|
5.7 |
% |
||||||
| Income taxes |
|
6,530 |
|
5,250 |
|
6,216 |
|
|
1,280 |
|
24.4 |
% |
|
314 |
|
5.1 |
% |
||||||
| Net income |
$ |
42,140 |
$ |
33,339 |
$ |
39,813 |
|
$ |
8,801 |
|
26.4 |
% |
$ |
2,327 |
|
5.8 |
% |
||||||
| Per share data | |||||||||||||||||||||||
| Earnings per share – basic |
$ |
0.65 |
$ |
0.51 |
$ |
0.59 |
|
$ |
0.14 |
|
27.5 |
% |
$ |
0.06 |
|
10.2 |
% |
||||||
| Earnings per share – diluted |
$ |
0.65 |
$ |
0.51 |
$ |
0.59 |
|
$ |
0.14 |
|
27.5 |
% |
$ |
0.06 |
|
10.2 |
% |
||||||
| Dividends per share |
$ |
0.23 |
$ |
0.23 |
$ |
0.23 |
|
|
— |
0.0 |
% |
|
— |
0.0 |
% |
||||||||
| Weighted average shares outstanding | |||||||||||||||||||||||
| Basic |
|
64,677,889 |
|
65,239,470 |
|
67,758,097 |
|
||||||||||||||||
| Diluted |
|
64,815,029 |
|
65,378,500 |
|
67,907,267 |
|
||||||||||||||||
| Period end shares outstanding |
|
64,398,846 |
|
64,789,943 |
|
67,621,111 |
|
||||||||||||||||
|
n/m – percentage changes greater than +/- 100% are considered not meaningful
See Notes to Consolidated Financials |
|||||||||||||||||||||||
| TRUSTMARK CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||
| CONSOLIDATED FINANCIAL INFORMATION | |||||||||||||||||||||||||
| June 30, 2019 | |||||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||
| Quarter Ended | Linked Quarter | Year over Year | |||||||||||||||||||||||
| NONPERFORMING ASSETS (1) | 6/30/2019 | 3/31/2019 | 6/30/2018 | $ Change | % Change | $ Change | % Change | ||||||||||||||||||
| Nonaccrual loans | |||||||||||||||||||||||||
| Alabama |
$ |
2,327 |
|
$ |
2,971 |
|
$ |
3,685 |
|
$ |
(644 |
) |
-21.7 |
% |
$ |
(1,358 |
) |
-36.9 |
% |
||||||
| Florida |
|
330 |
|
|
408 |
|
|
2,978 |
|
|
(78 |
) |
-19.1 |
% |
|
(2,648 |
) |
-88.9 |
% |
||||||
| Mississippi (2) |
|
39,373 |
|
|
41,145 |
|
|
39,006 |
|
|
(1,772 |
) |
-4.3 |
% |
|
367 |
|
0.9 |
% |
||||||
| Tennessee (3) |
|
8,455 |
|
|
8,806 |
|
|
5,338 |
|
|
(351 |
) |
-4.0 |
% |
|
3,117 |
|
58.4 |
% |
||||||
| Texas |
|
2,403 |
|
|
3,093 |
|
|
10,356 |
|
|
(690 |
) |
-22.3 |
% |
|
(7,953 |
) |
-76.8 |
% |
||||||
| Total nonaccrual loans |
|
52,888 |
|
|
56,423 |
|
|
61,363 |
|
|
(3,535 |
) |
-6.3 |
% |
|
(8,475 |
) |
-13.8 |
% |
||||||
| Other real estate | |||||||||||||||||||||||||
| Alabama |
|
6,451 |
|
|
6,878 |
|
|
8,290 |
|
|
(427 |
) |
-6.2 |
% |
|
(1,839 |
) |
-22.2 |
% |
||||||
| Florida |
|
7,826 |
|
|
8,120 |
|
|
9,789 |
|
|
(294 |
) |
-3.6 |
% |
|
(1,963 |
) |
-20.1 |
% |
||||||
| Mississippi (2) |
|
15,511 |
|
|
15,421 |
|
|
19,358 |
|
|
90 |
|
0.6 |
% |
|
(3,847 |
) |
-19.9 |
% |
||||||
| Tennessee (3) |
|
815 |
|
|
994 |
|
|
1,486 |
|
|
(179 |
) |
-18.0 |
% |
|
(671 |
) |
-45.2 |
% |
||||||
| Texas |
|
640 |
|
|
726 |
|
|
744 |
|
|
(86 |
) |
-11.8 |
% |
|
(104 |
) |
-14.0 |
% |
||||||
| Total other real estate |
|
31,243 |
|
|
32,139 |
|
|
39,667 |
|
|
(896 |
) |
-2.8 |
% |
|
(8,424 |
) |
-21.2 |
% |
||||||
| Total nonperforming assets |
$ |
84,131 |
|
$ |
88,562 |
|
$ |
101,030 |
|
$ |
(4,431 |
) |
-5.0 |
% |
$ |
(16,899 |
) |
-16.7 |
% |
||||||
| LOANS PAST DUE OVER 90 DAYS (1) | |||||||||||||||||||||||||
| LHFI |
$ |
1,245 |
|
$ |
670 |
|
$ |
529 |
|
$ |
575 |
|
85.8 |
% |
$ |
716 |
|
n/m |
|
||||||
| LHFS-Guaranteed GNMA serviced loans | |||||||||||||||||||||||||
| (no obligation to repurchase) |
$ |
38,355 |
|
$ |
40,793 |
|
$ |
34,693 |
|
$ |
(2,438 |
) |
-6.0 |
% |
$ |
3,662 |
|
10.6 |
% |
||||||
| Quarter Ended | Linked Quarter | Year over Year | |||||||||||||||||||||||
| ALLOWANCE FOR LOAN LOSSES (1) | 6/30/2019 | 3/31/2019 | 6/30/2018 | $ Change | % Change | $ Change | % Change | ||||||||||||||||||
| Beginning Balance |
$ |
79,005 |
|
$ |
79,290 |
|
$ |
81,235 |
|
$ |
(285 |
) |
-0.4 |
% |
$ |
(2,230 |
) |
-2.7 |
% |
||||||
| Transfers (4) |
|
— |
|
— |
|
782 |
|
|
— |
n/m |
|
|
(782 |
) |
-100.0 |
% |
|||||||||
| Provision for loan losses |
|
2,486 |
|
|
1,611 |
|
|
3,167 |
|
|
875 |
|
54.3 |
% |
|
(681 |
) |
-21.5 |
% |
||||||
| Charge-offs |
|
(2,937 |
) |
|
(4,033 |
) |
|
(3,421 |
) |
|
1,096 |
|
27.2 |
% |
|
484 |
|
14.1 |
% |
||||||
| Recoveries |
|
1,845 |
|
|
2,137 |
|
|
1,803 |
|
|
(292 |
) |
-13.7 |
% |
|
42 |
|
2.3 |
% |
||||||
| Net (charge-offs) recoveries |
|
(1,092 |
) |
|
(1,896 |
) |
|
(1,618 |
) |
|
804 |
|
42.4 |
% |
|
526 |
|
-32.5 |
% |
||||||
| Ending Balance |
$ |
80,399 |
|
$ |
79,005 |
|
$ |
83,566 |
|
$ |
1,394 |
|
1.8 |
% |
$ |
(3,167 |
) |
-3.8 |
% |
||||||
| PROVISION FOR LOAN LOSSES (1) | |||||||||||||||||||||||||
| Alabama |
$ |
1,187 |
|
$ |
791 |
|
$ |
434 |
|
$ |
396 |
|
50.1 |
% |
$ |
753 |
|
n/m |
|
||||||
| Florida |
|
48 |
|
|
(595 |
) |
|
(811 |
) |
|
643 |
|
n/m |
|
|
859 |
|
n/m |
|
||||||
| Mississippi (2) |
|
1,970 |
|
|
119 |
|
|
2,768 |
|
|
1,851 |
|
n/m |
|
|
(798 |
) |
-28.8 |
% |
||||||
| Tennessee (3) |
|
514 |
|
|
(234 |
) |
|
82 |
|
|
748 |
|
n/m |
|
|
432 |
|
n/m |
|
||||||
| Texas |
|
(1,233 |
) |
|
1,530 |
|
|
694 |
|
|
(2,763 |
) |
n/m |
|
|
(1,927 |
) |
n/m |
|
||||||
| Total provision for loan losses |
$ |
2,486 |
|
$ |
1,611 |
|
$ |
3,167 |
|
$ |
875 |
|
54.3 |
% |
$ |
(681 |
) |
-21.5 |
% |
||||||
| NET CHARGE-OFFS (RECOVERIES) (1) | |||||||||||||||||||||||||
| Alabama |
$ |
278 |
|
$ |
15 |
|
$ |
112 |
|
$ |
263 |
|
n/m |
|
$ |
166 |
|
n/m |
|
||||||
| Florida |
|
(130 |
) |
|
(227 |
) |
|
(122 |
) |
|
97 |
|
42.7 |
% |
|
(8 |
) |
-6.6 |
% |
||||||
| Mississippi (2) |
|
907 |
|
|
2,130 |
|
|
1,705 |
|
|
(1,223 |
) |
-57.4 |
% |
|
(798 |
) |
-46.8 |
% |
||||||
| Tennessee (3) |
|
44 |
|
|
50 |
|
|
70 |
|
|
(6 |
) |
-12.0 |
% |
|
(26 |
) |
-37.1 |
% |
||||||
| Texas |
|
(7 |
) |
|
(72 |
) |
|
(147 |
) |
|
65 |
|
90.3 |
% |
|
140 |
|
95.2 |
% |
||||||
| Total net charge-offs (recoveries) |
$ |
1,092 |
|
$ |
1,896 |
|
$ |
1,618 |
|
$ |
(804 |
) |
-42.4 |
% |
$ |
(526 |
) |
-32.5 |
% |
||||||
Contacts
Trustmark Investor Contacts:
Louis E. Greer
Treasurer and
Principal Financial Officer
601-208-2310
F. Joseph Rein, Jr.
Senior Vice President
601-208-6898
Trustmark Media Contact:
Melanie A. Morgan
Senior Vice President
601-208-2979
