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Trustmark Corporation Announces First Quarter 2022 Financial Results

Loan and Deposit Growth Continues, Credit Quality Remains Strong, Insurance and Wealth Management Revenue Expands

Trustmark Corporation (NASDAQGS:TRMK) reported net income of $29.2 million in the first quarter of 2022, representing diluted earnings per share of $0.47. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable June 15, 2022, to shareholders of record on June 1, 2022.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220426005303/en/

Printer friendly version of earnings release with consolidated financial statements and notes: https://www.businesswire.com/news/home/52697270/en

First Quarter Highlights

  • Total revenue expanded 2.9% from the prior quarter to $153.5 million
  • Net interest income (FTE) grew 1.1% from the prior quarter to $102.3 million, resulting in a 5 basis point expansion in the net interest margin to 2.58%
  • Noninterest income increased 6.6% from the prior quarter to $54.1 million, representing 35.3% of total revenue
  • Credit quality remained strong; provision for credit losses was a negative $2.0 million in first quarter

Duane A. Dewey, President and CEO, stated, “Our first quarter financial performance reflects solid loan growth and expansion in both net interest income and noninterest income. Our balance sheet is well-positioned for additional increases in interest rates and credit quality remains a hallmark of the organization. We continue to focus on efficiency enhancements throughout the organization, including rationalization of the branch network as well as investments in technology to better serve customers. Trustmark remains well-positioned to serve and expand our customer base and create long-term value for our shareholders.”

Balance Sheet Management

  • Loans held for investment (HFI) increased 1.5% from the prior quarter and 4.1% year-over-year
  • Deposits grew 0.2% linked-quarter and 5.1% year-over-year
  • Maintained strong capital position with CET1 ratio of 11.23% and total risk-based capital ratio of 13.53%

Loans HFI totaled $10.4 billion at March 31, 2022, reflecting an increase of $149.3 million, or 1.5%, linked-quarter and $413.4 million, or 4.1%, year-over-year. The linked-quarter growth reflects increases in 1-4 family mortgage loans, commercial and industrial loans, and loans to municipalities. Growth in these areas was partially offset by reductions in other loans, construction, land development and other land loans, and other real estate secured loans. Trustmark’s loan portfolio remains well-diversified by loan type and geography.

Deposits totaled $15.1 billion at March 31, 2022, up $26.1 million, or 0.2%, from the prior quarter and $729.9 million, or 5.1%, year-over-year. Trustmark continues to maintain a strong liquidity position as loans HFI represented 68.8% of total deposits at March 31, 2022. Noninterest-bearing deposits represented 31.4% of total deposits at the end of the first quarter, compared to 31.6% in the prior quarter. Interest-bearing deposit costs totaled 0.11% for the first quarter, a decrease of 2 basis points from the prior quarter. The total cost of interest-bearing liabilities was 0.16% for the first quarter of 2022, a decrease of 3 basis points from the prior quarter.

During the first quarter, Trustmark repurchased $9.1 million, or approximately 279 thousand of its common shares, in open market transactions. At March 31, 2022, Trustmark had $90.9 million in remaining authority under its existing stock repurchase program, which expires December 31, 2022. The repurchase program, which is subject to market conditions and management discretion, will continue to be implemented through open market repurchases or privately negotiated transactions. At March 31, 2022, Trustmark’s tangible equity to tangible assets ratio was 7.29%, while its total risk-based capital ratio was 13.53%. Tangible book value per share was $20.22 at March 31, 2022, down 7.8% from the prior quarter reflecting a decline in other comprehensive income due to valuation adjustments on securities available for sale resulting from the increase in market interest rates during the first quarter.

Credit Quality

  • Allowance for credit losses (ACL) represented 484.01% of nonaccrual loans, excluding individually evaluated loans, at March 31, 2022
  • Recoveries exceeded charge-offs in the first quarter
  • Other real estate totaled $3.2 million at March 31, 2022

Nonaccrual loans totaled $64.4 million at March 31, 2022, up $1.7 million from the prior quarter and $885 thousand year-over-year. Other real estate totaled $3.2 million, reflecting a $1.4 million decrease from the prior quarter and a decline of $7.5 million year-over-year. Collectively, nonperforming assets totaled $67.6 million at March 31, 2022, reflecting a linked-quarter increase of $331 thousand and a year-over-year decrease of $6.6 million.

The provision for credit losses for loans HFI was a negative $860 thousand in the first quarter while the provision for credit losses for off-balance sheet credit exposures was a negative $1.1 million. Collectively, the provision for credit losses totaled a negative $2.0 million in the first quarter and was attributable to an increase in reserves due to individually analyzed loans and loan growth which were more than offset by improvements in the macroeconomic forecast and credit quality.

Allocation of Trustmark’s $98.7 million allowance for credit losses on loans HFI represented 0.95% of commercial loans and 0.96% of consumer and home mortgage loans, resulting in an allowance to total loans HFI of 0.95% at March 31, 2022. Management believes the level of the ACL is commensurate with the credit losses currently expected in the loan portfolio.

Revenue Generation

  • Pre-provision net revenue totaled $31.9 million, an increase of 7.8% linked-quarter; please refer to the Consolidated Financial Information, Footnote 6 – Non-GAAP Financial Measures
  • Net interest income (FTE) excluding Paycheck Protection Program (PPP) interest and fees totaled $102.2 million, up 1.3% linked-quarter
  • Noninterest income increased 6.6% linked-quarter to total $54.1 million, which represented 35.3% of total revenue

Revenue in the first quarter totaled $153.5 million, up 2.9% from the prior quarter and down 5.8% from the same quarter in the prior year. The linked-quarter increase reflected higher net interest income as well as increased noninterest income. The decline in revenue year-over-year was attributable principally to a reduction in interest and fees on PPP loans as well as the decline in mortgage banking revenues from historically high levels.

Net interest income (FTE) in the first quarter totaled $102.3 million, resulting in a net interest margin of 2.58%, up 5 basis points from the prior quarter. The net interest margin, excluding PPP loans and Federal Reserve Bank balance, totaled 2.88% the first quarter, an increase of 6 basis points when compared to the prior quarter. The expansion of the net interest margin excluding PPP loans and the Federal Reserve Bank balance was due to increases in the yields on the loans held for investment and held for sale portfolio and the securities portfolio as well as lower costs of interest-bearing liabilities.

Noninterest income in the first quarter totaled $54.1 million, an increase of $3.3 million from the prior quarter and a decrease of $6.5 million year-over-year. The linked-quarter increases in insurance, wealth management and other, net revenue, which includes a gain on the sale of a former branch facility, were offset in part by a decline in mortgage banking revenue. Mortgage loan production in the first quarter totaled $544.3 million, down 7.9% from the prior quarter and 29.0% year-over-year. Mortgage banking revenue totaled $9.9 million in the first quarter, a decrease of $1.7 million from the prior quarter and $10.9 million year-over-year. The linked-quarter and year-over-year declines were principally attributable to reduced volumes and spreads, which collectively resulted in lower net gains on sales of mortgage loans in the secondary market.

Insurance revenue totaled $14.1 million in the first quarter, up 20.3%, or $2.4 million, from the fourth quarter of 2021 and 13.2%, or $1.6 million, year-over-year. The linked-quarter and year-over-year increase primarily reflected growth in commercial property and casualty commissions. Wealth management revenue in the first quarter totaled $9.1 million, an increase of $297 thousand, or 3.4%, from the prior quarter and $638 thousand, or 7.6%, year-over-year. The linked-quarter growth reflected higher trust management revenue while growth year-over-year reflects increased trust management and brokerage revenue.

Noninterest Expense

  • Noninterest expense totaled $121.5 million in first quarter, up 1.7% linked-quarter and unchanged year-over year
  • Adjusted noninterest expense, which excludes ORE expense, amortization of intangibles, and charitable contributions resulting in state tax credits totaled $120.6 million in the first quarter, up 2.1% from the prior quarter and 0.3% year-over-year. Please refer to the Consolidated Financial Information, Footnote 6 – Non-GAAP Financial Measures

Noninterest expense in the first quarter was $121.5 million, up $2.1 million, or 1.7%, from the prior quarter. Salaries and employee benefits increased $1.3 million linked-quarter principally due to payroll taxes. Services and fees increased $1.5 million linked-quarter due to continued investments in technology and higher professional fees while net occupancy-premises expense grew $263 thousand linked-quarter. Equipment expense and other expense collectively declined $1.1 million linked-quarter.

FIT2GROW

  • Comprehensive program of Focus, Innovation and Transformation to enhance Trustmark’s growth and profitability
  • Market optimization initiatives to accelerate

“We have accelerated our efforts to optimize our branch network, reflecting changing customer preferences and the continued migration to mobile and digital banking channels. We have identified 11 branch offices across the franchise to be closed during 2022, with estimated annualized expense savings of $2.0 million in 2023. Many of these offices are near other existing Trustmark locations. We also anticipate additional opportunities to realign our organizational structure to serve customers more effectively. These initiatives are components of FIT2GROW, a comprehensive program of Focus, Innovation and Transformation designed to enhance Trustmark’s ability to grow and serve customers and build long-term value for our shareholders. More information on these important initiatives will be provided in coming quarters,” said Dewey.

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, April 27, 2022, at 8:30 a.m. Central Time to discuss the Corporation’s financial results. Interested parties may listen to the conference call by dialing (877) 317-3051 or by clicking on the link provided under the Investor Relations section of our website at www.trustmark.com. A replay of the conference call will also be available through Wednesday, May 11, 2022, in archived format at the same web address or by calling (877) 344-7529, passcode 7381408.

Trustmark is a financial services company providing banking and financial solutions through 179 offices in Alabama, Florida, Mississippi, Tennessee and Texas.

Forward-Looking Statements

Certain statements contained in this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by words such as “may,” “hope,” “will,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “project,” “potential,” “seek,” “continue,” “could,” “would,” “future” or the negative of those terms or other words of similar meaning. You should read statements that contain these words carefully because they discuss our future expectations or state other “forward-looking” information. These forward-looking statements include, but are not limited to, statements relating to anticipated future operating and financial performance measures, including net interest margin, credit quality, business initiatives, growth opportunities and growth rates, among other things, and encompass any estimate, prediction, expectation, projection, opinion, anticipation, outlook or statement of belief included therein as well as the management assumptions underlying these forward-looking statements. You should be aware that the occurrence of the events described under the caption Item 1A. Risk Factors in this report could have an adverse effect on our business, results of operations and financial condition. Should one or more of these risks materialize, or should any such underlying assumptions prove to be significantly different, actual results may vary significantly from those anticipated, estimated, projected or expected. Furthermore, many of these risks and uncertainties are currently amplified by and may continue to be amplified by or may, in the future, be amplified by, the novel coronavirus (COVID-19) pandemic, and also by the effectiveness of varying governmental responses in ameliorating the impact of the pandemic on our customers and the economies where they operate.

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

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

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2022
($ in thousands)
(unaudited)
Linked Quarter Year over Year
QUARTERLY AVERAGE BALANCES 3/31/2022 12/31/2021 3/31/2021 $ Change % Change $ Change % Change
Securities AFS-taxable

$

3,245,502

 

$

3,156,740

 

$

2,098,089

 

$

88,762

 

2.8

%

$

1,147,413

 

54.7

%

Securities AFS-nontaxable

 

5,127

 

 

5,143

 

 

5,190

 

 

(16

)

-0.3

%

 

(63

)

-1.2

%

Securities HTM-taxable

 

410,851

 

 

364,038

 

 

489,260

 

 

46,813

 

12.9

%

 

(78,409

)

-16.0

%

Securities HTM-nontaxable

 

7,327

 

 

7,618

 

 

24,070

 

 

(291

)

-3.8

%

 

(16,743

)

-69.6

%

Total securities

 

3,668,807

 

 

3,533,539

 

 

2,616,609

 

 

135,268

 

3.8

%

 

1,052,198

 

40.2

%

Paycheck protection program loans (PPP)

 

29,009

 

 

42,749

 

 

598,139

 

 

(13,740

)

-32.1

%

 

(569,130

)

-95.2

%

Loans (includes loans held for sale)

 

10,550,712

 

 

10,487,679

 

 

10,316,319

 

 

63,033

 

0.6

%

 

234,393

 

2.3

%

Fed funds sold and reverse repurchases

 

56

 

 

58

 

 

136

 

 

(2

)

-3.4

%

 

(80

)

-58.8

%

Other earning assets

 

1,811,713

 

 

1,839,498

 

 

1,667,906

 

 

(27,785

)

-1.5

%

 

143,807

 

8.6

%

Total earning assets

 

16,060,297

 

 

15,903,523

 

 

15,199,109

 

 

156,774

 

1.0

%

 

861,188

 

5.7

%

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

 

(99,390

)

 

(104,148

)

 

(119,557

)

 

4,758

 

4.6

%

 

20,167

 

16.9

%

Other assets

 

1,550,848

 

 

1,570,501

 

 

1,601,250

 

 

(19,653

)

-1.3

%

 

(50,402

)

-3.1

%

Total assets

$

17,511,755

 

$

17,369,876

 

$

16,680,802

 

$

141,879

 

0.8

%

$

830,953

 

5.0

%

 
Interest-bearing demand deposits

$

4,429,056

 

$

4,353,599

 

$

3,743,651

 

$

75,457

 

1.7

%

$

685,405

 

18.3

%

Savings deposits

 

4,791,104

 

 

4,585,624

 

 

4,659,037

 

 

205,480

 

4.5

%

 

132,067

 

2.8

%

Time deposits

 

1,193,435

 

 

1,220,083

 

 

1,371,830

 

 

(26,648

)

-2.2

%

 

(178,395

)

-13.0

%

Total interest-bearing deposits

 

10,413,595

 

 

10,159,306

 

 

9,774,518

 

 

254,289

 

2.5

%

 

639,077

 

6.5

%

Fed funds purchased and repurchases

 

212,006

 

 

201,856

 

 

166,909

 

 

10,150

 

5.0

%

 

45,097

 

27.0

%

Other borrowings

 

91,090

 

 

94,328

 

 

166,926

 

 

(3,238

)

-3.4

%

 

(75,836

)

-45.4

%

Subordinated notes

 

123,061

 

 

123,007

 

 

122,875

 

 

54

 

0.0

%

 

186

 

0.2

%

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

 

0.0

%

 

 

0.0

%

Total interest-bearing liabilities

 

10,901,608

 

 

10,640,353

 

 

10,293,084

 

 

261,255

 

2.5

%

 

608,524

 

5.9

%

Noninterest-bearing deposits

 

4,601,108

 

 

4,679,951

 

 

4,363,559

 

 

(78,843

)

-1.7

%

 

237,549

 

5.4

%

Other liabilities

 

295,287

 

 

291,449

 

 

264,808

 

 

3,838

 

1.3

%

 

30,479

 

11.5

%

Total liabilities

 

15,798,003

 

 

15,611,753

 

 

14,921,451

 

 

186,250

 

1.2

%

 

876,552

 

5.9

%

Shareholders' equity

 

1,713,752

 

 

1,758,123

 

 

1,759,351

 

 

(44,371

)

-2.5

%

 

(45,599

)

-2.6

%

Total liabilities and equity

$

17,511,755

 

$

17,369,876

 

$

16,680,802

 

$

141,879

 

0.8

%

$

830,953

 

5.0

%

 
 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2022
($ in thousands)
(unaudited)
Linked Quarter Year over Year
PERIOD END BALANCES 3/31/2022 12/31/2021 3/31/2021 $ Change % Change $ Change % Change
Cash and due from banks

$

1,917,564

 

$

2,266,829

 

$

1,774,541

 

$

(349,265

)

-15.4

%

$

143,023

 

8.1

%

Securities available for sale

 

3,018,246

 

 

3,238,877

 

 

2,337,676

 

 

(220,631

)

-6.8

%

 

680,570

 

29.1

%

Securities held to maturity

 

607,598

 

 

342,537

 

 

493,738

 

 

265,061

 

77.4

%

 

113,860

 

23.1

%

PPP loans

 

18,579

 

 

33,336

 

 

679,725

 

 

(14,757

)

-44.3

%

 

(661,146

)

-97.3

%

Loans held for sale (LHFS)

 

222,538

 

 

275,706

 

 

412,999

 

 

(53,168

)

-19.3

%

 

(190,461

)

-46.1

%

Loans held for investment (LHFI)

 

10,397,129

 

 

10,247,829

 

 

9,983,704

 

 

149,300

 

1.5

%

 

413,425

 

4.1

%

ACL LHFI

 

(98,734

)

 

(99,457

)

 

(109,191

)

 

723

 

0.7

%

 

10,457

 

9.6

%

Net LHFI

 

10,298,395

 

 

10,148,372

 

 

9,874,513

 

 

150,023

 

1.5

%

 

423,882

 

4.3

%

Premises and equipment, net

 

207,301

 

 

205,644

 

 

199,098

 

 

1,657

 

0.8

%

 

8,203

 

4.1

%

Mortgage servicing rights

 

111,050

 

 

87,687

 

 

83,035

 

 

23,363

 

26.6

%

 

28,015

 

33.7

%

Goodwill

 

384,237

 

 

384,237

 

 

384,237

 

 

 

0.0

%

 

 

0.0

%

Identifiable intangible assets

 

4,591

 

 

5,074

 

 

6,724

 

 

(483

)

-9.5

%

 

(2,133

)

-31.7

%

Other real estate

 

3,187

 

 

4,557

 

 

10,651

 

 

(1,370

)

-30.1

%

 

(7,464

)

-70.1

%

Operating lease right-of-use assets

 

34,048

 

 

34,603

 

 

33,704

 

 

(555

)

-1.6

%

 

344

 

1.0

%

Other assets

 

614,217

 

 

568,177

 

 

587,672

 

 

46,040

 

8.1

%

 

26,545

 

4.5

%

Total assets

$

17,441,551

 

$

17,595,636

 

$

16,878,313

 

$

(154,085

)

-0.9

%

$

563,238

 

3.3

%

 
Deposits:
Noninterest-bearing

$

4,739,102

 

$

4,771,065

 

$

4,705,991

 

$

(31,963

)

-0.7

%

$

33,111

 

0.7

%

Interest-bearing

 

10,374,190

 

 

10,316,095

 

 

9,677,449

 

 

58,095

 

0.6

%

 

696,741

 

7.2

%

Total deposits

 

15,113,292

 

 

15,087,160

 

 

14,383,440

 

 

26,132

 

0.2

%

 

729,852

 

5.1

%

Fed funds purchased and repurchases

 

170,499

 

 

238,577

 

 

160,991

 

 

(68,078

)

-28.5

%

 

9,508

 

5.9

%

Other borrowings

 

84,644

 

 

91,025

 

 

145,994

 

 

(6,381

)

-7.0

%

 

(61,350

)

-42.0

%

Subordinated notes

 

123,097

 

 

123,042

 

 

122,877

 

 

55

 

0.0

%

 

220

 

0.2

%

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

 

0.0

%

 

 

0.0

%

ACL on off-balance sheet credit exposures

 

34,517

 

 

35,623

 

 

29,205

 

 

(1,106

)

-3.1

%

 

5,312

 

18.2

%

Operating lease liabilities

 

35,912

 

 

36,468

 

 

35,389

 

 

(556

)

-1.5

%

 

523

 

1.5

%

Other liabilities

 

186,352

 

 

180,574

 

 

178,856

 

 

5,778

 

3.2

%

 

7,496

 

4.2

%

Total liabilities

 

15,810,169

 

 

15,854,325

 

 

15,118,608

 

 

(44,156

)

-0.3

%

 

691,561

 

4.6

%

Common stock

 

12,806

 

 

12,845

 

 

13,209

 

 

(39

)

-0.3

%

 

(403

)

-3.1

%

Capital surplus

 

167,094

 

 

175,913

 

 

229,892

 

 

(8,819

)

-5.0

%

 

(62,798

)

-27.3

%

Retained earnings

 

1,600,138

 

 

1,585,113

 

 

1,533,110

 

 

15,025

 

0.9

%

 

67,028

 

4.4

%

Accumulated other comprehensive income (loss), net of tax

 

(148,656

)

 

(32,560

)

 

(16,506

)

 

(116,096

)

n/m

 

 

(132,150

)

n/m

 

Total shareholders' equity

 

1,631,382

 

 

1,741,311

 

 

1,759,705

 

 

(109,929

)

-6.3

%

 

(128,323

)

-7.3

%

Total liabilities and equity

$

17,441,551

 

$

17,595,636

 

$

16,878,313

 

$

(154,085

)

-0.9

%

$

563,238

 

3.3

%

 
 
n/m - percentage changes greater than +/- 100% are considered not meaningful

 

 

See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2022
($ in thousands except per share data)
(unaudited)
Quarter Ended Linked Quarter Year over Year
INCOME STATEMENTS 3/31/2022 12/31/2021 3/31/2021 $ Change % Change $ Change % Change
Interest and fees on LHFS & LHFI-FTE

$

93,252

 

$

94,137

 

$

93,394

 

$

(885

)

-0.9

%

$

(142

)

-0.2

%

Interest and fees on PPP loans

 

168

 

 

397

 

 

9,241

 

 

(229

)

-57.7

%

 

(9,073

)

-98.2

%

Interest on securities-taxable

 

12,357

 

 

10,796

 

 

8,938

 

 

1,561

 

14.5

%

 

3,419

 

38.3

%

Interest on securities-tax exempt-FTE

 

122

 

 

123

 

 

290

 

 

(1

)

-0.8

%

 

(168

)

-57.9

%

Other interest income

 

817

 

 

826

 

 

503

 

 

(9

)

-1.1

%

 

314

 

62.4

%

Total interest income-FTE

 

106,716

 

 

106,279

 

 

112,366

 

 

437

 

0.4

%

 

(5,650

)

-5.0

%

Interest on deposits

 

2,760

 

 

3,401

 

 

5,223

 

 

(641

)

-18.8

%

 

(2,463

)

-47.2

%

Interest on fed funds purchased and repurchases

 

70

 

 

66

 

 

56

 

 

4

 

6.1

%

 

14

 

25.0

%

Other interest expense

 

1,539

 

 

1,580

 

 

1,857

 

 

(41

)

-2.6

%

 

(318

)

-17.1

%

Total interest expense

 

4,369

 

 

5,047

 

 

7,136

 

 

(678

)

-13.4

%

 

(2,767

)

-38.8

%

Net interest income-FTE

 

102,347

 

 

101,232

 

 

105,230

 

 

1,115

 

1.1

%

 

(2,883

)

-2.7

%

Provision for credit losses, LHFI

 

(860

)

 

(4,515

)

 

(10,501

)

 

3,655

 

81.0

%

 

9,641

 

91.8

%

Provision for credit losses, off-balance sheet credit exposures

 

(1,106

)

 

2,939

 

 

(9,367

)

 

(4,045

)

n/m

 

 

8,261

 

88.2

%

Net interest income after provision-FTE

 

104,313

 

 

102,808

 

 

125,098

 

 

1,505

 

1.5

%

 

(20,785

)

-16.6

%

Service charges on deposit accounts

 

9,451

 

 

9,366

 

 

7,356

 

 

85

 

0.9

%

 

2,095

 

28.5

%

Bank card and other fees

 

8,442

 

 

8,340

 

 

9,472

 

 

102

 

1.2

%

 

(1,030

)

-10.9

%

Mortgage banking, net

 

9,873

 

 

11,609

 

 

20,804

 

 

(1,736

)

-15.0

%

 

(10,931

)

-52.5

%

Insurance commissions

 

14,089

 

 

11,716

 

 

12,445

 

 

2,373

 

20.3

%

 

1,644

 

13.2

%

Wealth management

 

9,054

 

 

8,757

 

 

8,416

 

 

297

 

3.4

%

 

638

 

7.6

%

Other, net

 

3,206

 

 

979

 

 

2,090

 

 

2,227

 

n/m

 

 

1,116

 

53.4

%

Total noninterest income

 

54,115

 

 

50,767

 

 

60,583

 

 

3,348

 

6.6

%

 

(6,468

)

-10.7

%

Salaries and employee benefits

 

69,585

 

 

68,258

 

 

71,162

 

 

1,327

 

1.9

%

 

(1,577

)

-2.2

%

Services and fees

 

24,453

 

 

22,904

 

 

22,484

 

 

1,549

 

6.8

%

 

1,969

 

8.8

%

Net occupancy-premises

 

7,079

 

 

6,816

 

 

6,795

 

 

263

 

3.9

%

 

284

 

4.2

%

Equipment expense

 

6,061

 

 

6,585

 

 

6,244

 

 

(524

)

-8.0

%

 

(183

)

-2.9

%

Other expense

 

14,341

 

 

14,906

 

 

14,863

 

 

(565

)

-3.8

%

 

(522

)

-3.5

%

Total noninterest expense

 

121,519

 

 

119,469

 

 

121,548

 

 

2,050

 

1.7

%

 

(29

)

0.0

%

Income before income taxes and tax eq adj

 

36,909

 

 

34,106

 

 

64,133

 

 

2,803

 

8.2

%

 

(27,224

)

-42.4

%

Tax equivalent adjustment

 

3,003

 

 

2,906

 

 

2,894

 

 

97

 

3.3

%

 

109

 

3.8

%

Income before income taxes

 

33,906

 

 

31,200

 

 

61,239

 

 

2,706

 

8.7

%

 

(27,333

)

-44.6

%

Income taxes

 

4,695

 

 

4,978

 

 

9,277

 

 

(283

)

-5.7

%

 

(4,582

)

-49.4

%

Net income

$

29,211

 

$

26,222

 

$

51,962

 

$

2,989

 

11.4

%

$

(22,751

)

-43.8

%

 
Per share data
Earnings per share - basic

$

0.47

 

$

0.42

 

$

0.82

 

$

0.05

 

11.9

%

$

(0.35

)

-42.7

%

 
Earnings per share - diluted

$

0.47

 

$

0.42

 

$

0.82

 

$

0.05

 

11.9

%

$

(0.35

)

-42.7

%

 
Dividends per share

$

0.23

 

$

0.23

 

$

0.23

 

 

 

0.0

%

 

 

0.0

%

 
Weighted average shares outstanding
Basic

 

61,514,395

 

 

62,037,884

 

 

63,395,911

 

 
Diluted

 

61,709,797

 

 

62,264,983

 

 

63,562,503

 

 
Period end shares outstanding

 

61,463,392

 

 

61,648,679

 

 

63,394,522

 

 
 
 
 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2022
($ in thousands)
(unaudited)
 
Quarter Ended Linked Quarter Year over Year
NONPERFORMING ASSETS (1) 3/31/2022 12/31/2021 3/31/2021 $ Change % Change $ Change % Change
Nonaccrual LHFI
Alabama

$

7,506

 

$

8,182

 

$

9,161

 

$

(676

)

-8.3

%

$

(1,655

)

-18.1

%

Florida

 

310

 

 

313

 

 

607

 

 

(3

)

-1.0

%

 

(297

)

-48.9

%

Mississippi (2)

 

21,318

 

 

21,636

 

 

35,534

 

 

(318

)

-1.5

%

 

(14,216

)

-40.0

%

Tennessee (3)

 

9,266

 

 

10,501

 

 

12,451

 

 

(1,235

)

-11.8

%

 

(3,185

)

-25.6

%

Texas

 

25,999

 

 

22,066

 

 

5,761

 

 

3,933

 

17.8

%

 

20,238

 

n/m

 

Total nonaccrual LHFI

 

64,399

 

 

62,698

 

 

63,514

 

 

1,701

 

2.7

%

 

885

 

1.4

%

Other real estate
Alabama

 

 

 

 

 

3,085

 

 

 

n/m

 

 

(3,085

)

-100.0

%

Mississippi (2)

 

3,187

 

 

4,557

 

 

7,566

 

 

(1,370

)

-30.1

%

 

(4,379

)

-57.9

%

Tennessee (3)

 

 

 

 

 

 

 

 

n/m

 

 

 

n/m

 

Total other real estate

 

3,187

 

 

4,557

 

 

10,651

 

 

(1,370

)

-30.1

%

 

(7,464

)

-70.1

%

Total nonperforming assets

$

67,586

 

$

67,255

 

$

74,165

 

$

331

 

0.5

%

$

(6,579

)

-8.9

%

 
LOANS PAST DUE OVER 90 DAYS (1)
LHFI

$

1,503

 

$

2,114

 

$

2,593

 

$

(611

)

-28.9

%

$

(1,090

)

-42.0

%

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

$

62,078

 

$

69,894

 

$

109,566

 

$

(7,816

)

-11.2

%

$

(47,488

)

-43.3

%

 
Quarter Ended Linked Quarter Year over Year
ACL LHFI (1) 3/31/2022 12/31/2021 3/31/2021 $ Change % Change $ Change % Change
Beginning Balance

$

99,457

 

$

104,073

 

$

117,306

 

$

(4,616

)

-4.4

%

$

(17,849

)

-15.2

%

Provision for credit losses, LHFI

 

(860

)

 

(4,515

)

 

(10,501

)

 

3,655

 

81.0

%

 

9,641

 

91.8

%

Charge-offs

 

(2,242

)

 

(2,616

)

 

(1,245

)

 

374

 

14.3

%

 

(997

)

-80.1

%

Recoveries

 

2,379

 

 

2,515

 

 

3,631

 

 

(136

)

-5.4

%

 

(1,252

)

-34.5

%

Net (charge-offs) recoveries

 

137

 

 

(101

)

 

2,386

 

 

238

 

n/m

 

 

(2,249

)

-94.3

%

Ending Balance

$

98,734

 

$

99,457

 

$

109,191

 

$

(723

)

-0.7

%

$

(10,457

)

-9.6

%

 
NET (CHARGE-OFFS) RECOVERIES (1)
Alabama

$

699

 

$

747

 

$

102

 

$

(48

)

-6.4

%

$

597

 

n/m

 

Florida

 

(26

)

 

(32

)

 

30

 

 

6

 

18.8

%

 

(56

)

n/m

 

Mississippi (2)

 

(88

)

 

(683

)

 

2,207

 

 

595

 

87.1

%

 

(2,295

)

n/m

 

Tennessee (3)

 

(424

)

 

(130

)

 

47

 

 

(294

)

n/m

 

 

(471

)

n/m

 

Texas

 

(24

)

 

(3

)

 

 

 

(21

)

n/m

 

 

(24

)

n/m

 

Total net (charge-offs) recoveries

$

137

 

$

(101

)

$

2,386

 

$

238

 

n/m

 

$

(2,249

)

-94.3

%

 
(1) Excludes PPP loans.
(2) Mississippi includes Central and Southern Mississippi Regions.
(3) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.
 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2022
($ in thousands)
(unaudited)
Quarter Ended
AVERAGE BALANCES 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021
Securities AFS-taxable

$

3,245,502

 

$

3,156,740

 

$

2,686,765

 

$

2,339,662

 

$

2,098,089

 

Securities AFS-nontaxable

 

5,127

 

 

5,143

 

 

5,159

 

 

5,174

 

 

5,190

 

Securities HTM-taxable

 

410,851

 

 

364,038

 

 

401,685

 

 

441,688

 

 

489,260

 

Securities HTM-nontaxable

 

7,327

 

 

7,618

 

 

8,641

 

 

10,958

 

 

24,070

 

Total securities

 

3,668,807

 

 

3,533,539

 

 

3,102,250

 

 

2,797,482

 

 

2,616,609

 

PPP loans

 

29,009

 

 

42,749

 

 

122,176

 

 

648,222

 

 

598,139

 

Loans (includes loans held for sale)

 

10,550,712

 

 

10,487,679

 

 

10,389,826

 

 

10,315,927

 

 

10,316,319

 

Fed funds sold and reverse repurchases

 

56

 

 

58

 

 

69

 

 

55

 

 

136

 

Other earning assets

 

1,811,713

 

 

1,839,498

 

 

2,038,515

 

 

1,750,385

 

 

1,667,906

 

Total earning assets

 

16,060,297

 

 

15,903,523

 

 

15,652,836

 

 

15,512,071

 

 

15,199,109

 

ACL LHFI

 

(99,390

)

 

(104,148

)

 

(104,857

)

 

(112,346

)

 

(119,557

)

Other assets

 

1,550,848

 

 

1,570,501

 

 

1,602,611

 

 

1,622,388

 

 

1,601,250

 

Total assets

$

17,511,755

 

$

17,369,876

 

$

17,150,590

 

$

17,022,113

 

$

16,680,802

 

 
Interest-bearing demand deposits

$

4,429,056

 

$

4,353,599

 

$

4,224,717

 

$

4,056,910

 

$

3,743,651

 

Savings deposits

 

4,791,104

 

 

4,585,624

 

 

4,617,683

 

 

4,627,180

 

 

4,659,037

 

Time deposits

 

1,193,435

 

 

1,220,083

 

 

1,258,829

 

 

1,301,896

 

 

1,371,830

 

Total interest-bearing deposits

 

10,413,595

 

 

10,159,306

 

 

10,101,229

 

 

9,985,986

 

 

9,774,518

 

Fed funds purchased and repurchases

 

212,006

 

 

201,856

 

 

147,635

 

 

174,620

 

 

166,909

 

Other borrowings

 

91,090

 

 

94,328

 

 

109,735

 

 

132,199

 

 

166,926

 

Subordinated notes

 

123,061

 

 

123,007

 

 

122,951

 

 

122,897

 

 

122,875

 

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

Total interest-bearing liabilities

 

10,901,608

 

 

10,640,353

 

 

10,543,406

 

 

10,477,558

 

 

10,293,084

 

Noninterest-bearing deposits

 

4,601,108

 

 

4,679,951

 

 

4,566,924

 

 

4,512,268

 

 

4,363,559

 

Other liabilities

 

295,287

 

 

291,449

 

 

257,956

 

 

251,582

 

 

264,808

 

Total liabilities

 

15,798,003

 

 

15,611,753

 

 

15,368,286

 

 

15,241,408

 

 

14,921,451

 

Shareholders' equity

 

1,713,752

 

 

1,758,123

 

 

1,782,304

 

 

1,780,705

 

 

1,759,351

 

Total liabilities and equity

$

17,511,755

 

$

17,369,876

 

$

17,150,590

 

$

17,022,113

 

$

16,680,802

 

 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2022
($ in thousands)
(unaudited)
 
PERIOD END BALANCES 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021
Cash and due from banks

$

1,917,564

 

$

2,266,829

 

$

2,175,058

 

$

2,267,224

 

$

1,774,541

 

Securities available for sale

 

3,018,246

 

 

3,238,877

 

 

3,057,605

 

 

2,548,739

 

 

2,337,676

 

Securities held to maturity

 

607,598

 

 

342,537

 

 

394,905

 

 

433,012

 

 

493,738

 

PPP loans

 

18,579

 

 

33,336

 

 

46,486

 

 

166,119

 

 

679,725

 

LHFS

 

222,538

 

 

275,706

 

 

335,339

 

 

332,132

 

 

412,999

 

LHFI

 

10,397,129

 

 

10,247,829

 

 

10,174,899

 

 

10,152,869

 

 

9,983,704

 

ACL LHFI

 

(98,734

)

 

(99,457

)

 

(104,073

)

 

(104,032

)

 

(109,191

)

Net LHFI

 

10,298,395

 

 

10,148,372

 

 

10,070,826

 

 

10,048,837

 

 

9,874,513

 

Premises and equipment, net

 

207,301

 

 

205,644

 

 

201,937

 

 

200,970

 

 

199,098

 

Mortgage servicing rights

 

111,050

 

 

87,687

 

 

84,101

 

 

80,764

 

 

83,035

 

Goodwill

 

384,237

 

 

384,237

 

 

384,237

 

 

384,237

 

 

384,237

 

Identifiable intangible assets

 

4,591

 

 

5,074

 

 

5,621

 

 

6,170

 

 

6,724

 

Other real estate

 

3,187

 

 

4,557

 

 

6,213

 

 

9,439

 

 

10,651

 

Operating lease right-of-use assets

 

34,048

 

 

34,603

 

 

34,689

 

 

33,201

 

 

33,704

 

Other assets

 

614,217

 

 

568,177

 

 

567,627

 

 

587,288

 

 

587,672

 

Total assets

$

17,441,551

 

$

17,595,636

 

$

17,364,644

 

$

17,098,132

 

$

16,878,313

 

 
Deposits:
Noninterest-bearing

$

4,739,102

 

$

4,771,065

 

$

4,987,885

 

$

4,446,991

 

$

4,705,991

 

Interest-bearing

 

10,374,190

 

 

10,316,095

 

 

9,934,954

 

 

10,185,093

 

 

9,677,449

 

Total deposits

 

15,113,292

 

 

15,087,160

 

 

14,922,839

 

 

14,632,084

 

 

14,383,440

 

Fed funds purchased and repurchases

 

170,499

 

 

238,577

 

 

146,417

 

 

157,176

 

 

160,991

 

Other borrowings

 

84,644

 

 

91,025

 

 

94,889

 

 

117,223

 

 

145,994

 

Subordinated notes

 

123,097

 

 

123,042

 

 

122,987

 

 

122,932

 

 

122,877

 

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

ACL on off-balance sheet credit exposures

 

34,517

 

 

35,623

 

 

32,684

 

 

33,733

 

 

29,205

 

Operating lease liabilities

 

35,912

 

 

36,468

 

 

36,531

 

 

34,959

 

 

35,389

 

Other liabilities

 

186,352

 

 

180,574

 

 

177,494

 

 

158,860

 

 

178,856

 

Total liabilities

 

15,810,169

 

 

15,854,325

 

 

15,595,697

 

 

15,318,823

 

 

15,118,608

 

Common stock

 

12,806

 

 

12,845

 

 

13,014

 

 

13,079

 

 

13,209

 

Capital surplus

 

167,094

 

 

175,913

 

 

201,837

 

 

210,420

 

 

229,892

 

Retained earnings

 

1,600,138

 

 

1,585,113

 

 

1,573,176

 

 

1,566,451

 

 

1,533,110

 

Accumulated other comprehensive income (loss), net of tax

 

(148,656

)

 

(32,560

)

 

(19,080

)

 

(10,641

)

 

(16,506

)

Total shareholders' equity

 

1,631,382

 

 

1,741,311

 

 

1,768,947

 

 

1,779,309

 

 

1,759,705

 

Total liabilities and equity

$

17,441,551

 

$

17,595,636

 

$

17,364,644

 

$

17,098,132

 

$

16,878,313

 

 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2022
($ in thousands except per share data)
(unaudited)
 
 
Quarter Ended
INCOME STATEMENTS 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021
Interest and fees on LHFS & LHFI-FTE

$

93,252

 

$

94,137

 

$

94,101

 

$

93,698

 

$

93,394

 

Interest and fees on PPP loans

 

168

 

 

397

 

 

1,533

 

 

25,555

 

 

9,241

 

Interest on securities-taxable

 

12,357

 

 

10,796

 

 

9,973

 

 

8,991

 

 

8,938

 

Interest on securities-tax exempt-FTE

 

122

 

 

123

 

 

132

 

 

149

 

 

290

 

Other interest income

 

817

 

 

826

 

 

949

 

 

489

 

 

503

 

Total interest income-FTE

 

106,716

 

 

106,279

 

 

106,688

 

 

128,882

 

 

112,366

 

Interest on deposits

 

2,760

 

 

3,401

 

 

3,691

 

 

4,630

 

 

5,223

 

Interest on fed funds purchased and repurchases

 

70

 

 

66

 

 

51

 

 

59

 

 

56

 

Other interest expense

 

1,539

 

 

1,580

 

 

1,733

 

 

1,813

 

 

1,857

 

Total interest expense

 

4,369

 

 

5,047

 

 

5,475

 

 

6,502

 

 

7,136

 

Net interest income-FTE

 

102,347

 

 

101,232

 

 

101,213

 

 

122,380

 

 

105,230

 

Provision for credit losses, LHFI

 

(860

)

 

(4,515

)

 

(2,492

)

 

(3,991

)

 

(10,501

)

Provision for credit losses, off-balance sheet credit exposures

 

(1,106

)

 

2,939

 

 

(1,049

)

 

4,528

 

 

(9,367

)

Net interest income after provision-FTE

 

104,313

 

 

102,808

 

 

104,754

 

 

121,843

 

 

125,098

 

Service charges on deposit accounts

 

9,451

 

 

9,366

 

 

8,911

 

 

7,613

 

 

7,356

 

Bank card and other fees

 

8,442

 

 

8,340

 

 

8,549

 

 

8,301

 

 

9,472

 

Mortgage banking, net

 

9,873

 

 

11,609

 

 

14,004

 

 

17,333

 

 

20,804

 

Insurance commissions

 

14,089

 

 

11,716

 

 

12,133

 

 

12,217

 

 

12,445

 

Wealth management

 

9,054

 

 

8,757

 

 

9,071

 

 

8,946

 

 

8,416

 

Other, net

 

3,206

 

 

979

 

 

1,481

 

 

2,001

 

 

2,090

 

Total noninterest income

 

54,115

 

 

50,767

 

 

54,149

 

 

56,411

 

 

60,583

 

Salaries and employee benefits

 

69,585

 

 

68,258

 

 

74,623

 

 

70,115

 

 

71,162

 

Services and fees

 

24,453

 

 

22,904

 

 

22,306

 

 

21,769

 

 

22,484

 

Net occupancy-premises

 

7,079

 

 

6,816

 

 

6,854

 

 

6,578

 

 

6,795

 

Equipment expense

 

6,061

 

 

6,585

 

 

5,941

 

 

5,567

 

 

6,244

 

Other expense

 

14,341

 

 

14,906

 

 

19,876

 

 

14,650

 

 

14,863

 

Total noninterest expense

 

121,519

 

 

119,469

 

 

129,600

 

 

118,679

 

 

121,548

 

Income before income taxes and tax eq adj

 

36,909

 

 

34,106

 

 

29,303

 

 

59,575

 

 

64,133

 

Tax equivalent adjustment

 

3,003

 

 

2,906

 

 

2,947

 

 

2,957

 

 

2,894

 

Income before income taxes

 

33,906

 

 

31,200

 

 

26,356

 

 

56,618

 

 

61,239

 

Income taxes

 

4,695

 

 

4,978

 

 

5,156

 

 

8,637

 

 

9,277

 

Net income

$

29,211

 

$

26,222

 

$

21,200

 

$

47,981

 

$

51,962

 

 
Per share data
Earnings per share - basic

$

0.47

 

$

0.42

 

$

0.34

 

$

0.76

 

$

0.82

 

 
Earnings per share - diluted

$

0.47

 

$

0.42

 

$

0.34

 

$

0.76

 

$

0.82

 

 
Dividends per share

$

0.23

 

$

0.23

 

$

0.23

 

$

0.23

 

$

0.23

 

 
Weighted average shares outstanding
Basic

 

61,514,395

 

 

62,037,884

 

 

62,521,684

 

 

63,214,593

 

 

63,395,911

 

 
Diluted

 

61,709,797

 

 

62,264,983

 

 

62,730,157

 

 

63,409,683

 

 

63,562,503

 

 
Period end shares outstanding

 

61,463,392

 

 

61,648,679

 

 

62,461,832

 

 

62,773,226

 

 

63,394,522

 

 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2022
($ in thousands)
(unaudited)
 
 
Quarter Ended
NONPERFORMING ASSETS (1) 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021
Nonaccrual LHFI
Alabama

$

7,506

 

$

8,182

 

$

9,223

 

$

8,952

 

$

9,161

 

Florida

 

310

 

 

313

 

 

381

 

 

467

 

 

607

 

Mississippi (2)

 

21,318

 

 

21,636

 

 

22,898

 

 

23,422

 

 

35,534

 

Tennessee (3)

 

9,266

 

 

10,501

 

 

10,356

 

 

10,751

 

 

12,451

 

Texas

 

25,999

 

 

22,066

 

 

23,382

 

 

7,856

 

 

5,761

 

Total nonaccrual LHFI

 

64,399

 

 

62,698

 

 

66,240

 

 

51,448

 

 

63,514

 

Other real estate
Alabama

 

 

 

 

 

613

 

 

2,830

 

 

3,085

 

Mississippi (2)

 

3,187

 

 

4,557

 

 

5,600

 

 

6,550

 

 

7,566

 

Tennessee (3)

 

 

 

 

 

 

 

59

 

 

 

Total other real estate

 

3,187

 

 

4,557

 

 

6,213

 

 

9,439

 

 

10,651

 

Total nonperforming assets

$

67,586

 

$

67,255

 

$

72,453

 

$

60,887

 

$

74,165

 

 
LOANS PAST DUE OVER 90 DAYS (1)
LHFI

$

1,503

 

$

2,114

 

$

625

 

$

423

 

$

2,593

 

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

$

62,078

 

$

69,894

 

$

75,091

 

$

81,538

 

$

109,566

 

 
 
Quarter Ended
ACL LHFI (1) 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021
Beginning Balance

$

99,457

 

$

104,073

 

$

104,032

 

$

109,191

 

$

117,306

 

Provision for credit losses, LHFI

 

(860

)

 

(4,515

)

 

(2,492

)

 

(3,991

)

 

(10,501

)

Charge-offs

 

(2,242

)

 

(2,616

)

 

(1,586

)

 

(4,828

)

 

(1,245

)

Recoveries

 

2,379

 

 

2,515

 

 

4,119

 

 

3,660

 

 

3,631

 

Net (charge-offs) recoveries

 

137

 

 

(101

)

 

2,533

 

 

(1,168

)

 

2,386

 

Ending Balance

$

98,734

 

$

99,457

 

$

104,073

 

$

104,032

 

$

109,191

 

 
NET (CHARGE-OFFS) RECOVERIES (1)
Alabama

$

699

 

$

747

 

$

247

 

$

203

 

$

102

 

Florida

 

(26

)

 

(32

)

 

356

 

 

167

 

 

30

 

Mississippi (2)

 

(88

)

 

(683

)

 

1,436

 

 

(3,071

)

 

2,207

 

Tennessee (3)

 

(424

)

 

(130

)

 

(8

)

 

1,031

 

 

47

 

Texas

 

(24

)

 

(3

)

 

502

 

 

502

 

 

 

Total net (charge-offs) recoveries

$

137

 

$

(101

)

$

2,533

 

$

(1,168

)

$

2,386

 

 
(1) Excludes PPP loans.
(2) Mississippi includes Central and Southern Mississippi Regions.
(3) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.
 
See Notes to Consolidated Financials
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
March 31, 2022
(unaudited)
 
 
Quarter Ended
FINANCIAL RATIOS AND OTHER DATA 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021
Return on average equity

 

6.91

%

 

5.92

%

 

4.72

%

 

10.81

%

 

11.98

%

Return on average tangible equity

 

9.05

%

 

7.72

%

 

6.16

%

 

13.96

%

 

15.56

%

Return on average assets

 

0.68

%

 

0.60

%

 

0.49

%

 

1.13

%

 

1.26

%

Interest margin - Yield - FTE

 

2.69

%

 

2.65

%

 

2.70

%

 

3.33

%

 

3.00

%

Interest margin - Cost

 

0.11

%

 

0.13

%

 

0.14

%

 

0.17

%

 

0.19

%

Net interest margin - FTE

 

2.58

%

 

2.53

%

 

2.57

%

 

3.16

%

 

2.81

%

Efficiency ratio (1)

 

76.44

%

 

76.52

%

 

74.10

%

 

64.31

%

 

71.84

%

Full-time equivalent employees

 

2,725

 

 

2,692

 

 

2,680

 

 

2,772

 

 

2,793

 

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

 

-0.01

%

 

0.00

%

 

-0.10

%

 

0.05

%

 

-0.09

%

Provision for credit losses, LHFI / average loans

 

-0.03

%

 

-0.17

%

 

-0.10

%

 

-0.16

%

 

-0.41

%

Nonaccrual LHFI / (LHFI + LHFS)

 

0.61

%

 

0.60

%

 

0.63

%

 

0.49

%

 

0.61

%

Nonperforming assets / (LHFI + LHFS)

 

0.64

%

 

0.64

%

 

0.69

%

 

0.58

%

 

0.71

%

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

 

0.64

%

 

0.64

%

 

0.69

%

 

0.58

%

 

0.71

%

ACL LHFI / LHFI

 

0.95

%

 

0.97

%

 

1.02

%

 

1.02

%

 

1.09

%

ACL LHFI-commercial / commercial LHFI

 

0.95

%

 

1.00

%

 

1.05

%

 

1.04

%

 

1.13

%

ACL LHFI-consumer / consumer and home mortgage LHFI

 

0.96

%

 

0.87

%

 

0.91

%

 

0.98

%

 

0.95

%

ACL LHFI / nonaccrual LHFI

 

153.32

%

 

158.63

%

 

157.11

%

 

202.21

%

 

171.92

%

ACL LHFI / nonaccrual LHFI (excl individually evaluated loans)

 

484.01

%

 

500.85

%

 

520.77

%

 

537.35

%

 

437.08

%

 
CAPITAL RATIOS
Total equity / total assets

 

9.35

%

 

9.90

%

 

10.19

%

 

10.41

%

 

10.43

%

Tangible equity / tangible assets

 

7.29

%

 

7.86

%

 

8.12

%

 

8.31

%

 

8.30

%

Tangible equity / risk-weighted assets

 

9.79

%

 

10.71

%

 

11.19

%

 

11.33

%

 

11.23

%

Tier 1 leverage ratio

 

8.66

%

 

8.73

%

 

8.92

%

 

9.00

%

 

9.11

%

Common equity tier 1 capital ratio

 

11.23

%

 

11.29

%

 

11.68

%

 

11.76

%

 

11.71

%

Tier 1 risk-based capital ratio

 

11.70

%

 

11.77

%

 

12.17

%

 

12.25

%

 

12.20

%

Total risk-based capital ratio

 

13.53

%

 

13.55

%

 

14.01

%

 

14.10

%

 

14.07

%

 
STOCK PERFORMANCE
Market value-Close

$

30.39

 

$

32.46

 

$

32.22

 

$

30.80

 

$

33.66

 

Book value

$

26.54

 

$

28.25

 

$

28.32

 

$

28.35

 

$

27.76

 

Tangible book value

$

20.22

 

$

21.93

 

$

22.08

 

$

22.13

 

$

21.59

 

 
(1) See Note 6 – Non-GAAP Financial Measures in the Notes to Consolidated Financials for Trustmark’s efficiency ratio calculation.
(2) Excludes PPP loans.

 

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

March 31, 2022

($ in thousands)

(unaudited)

Note 1 - Securities Available for Sale and Held to Maturity

The following table is a summary of the estimated fair value of securities available for sale and the amortized cost of securities held to maturity:

 

 

3/31/2022

 

 

12/31/2021

 

 

9/30/2021

 

 

6/30/2021

 

 

3/31/2021

 

SECURITIES AVAILABLE FOR SALE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

361,822

 

 

$

344,640

 

 

$

278,615

 

 

$

30,025

 

 

$

 

U.S. Government agency obligations

 

 

12,623

 

 

 

13,727

 

 

 

14,979

 

 

 

16,023

 

 

 

17,349

 

Obligations of states and political subdivisions

 

 

5,359

 

 

 

5,714

 

 

 

5,734

 

 

 

5,807

 

 

 

5,798

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage pass-through securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Guaranteed by GNMA

 

 

35,117

 

 

 

39,573

 

 

 

43,860

 

 

 

48,445

 

 

 

52,406

 

Issued by FNMA and FHLMC

 

 

2,038,331

 

 

 

2,218,429

 

 

 

2,187,412

 

 

 

1,983,783

 

 

 

1,749,144

 

Other residential mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by FNMA, FHLMC, or GNMA

 

 

164,506

 

 

 

196,690

 

 

 

236,885

 

 

 

283,988

 

 

 

345,869

 

Commercial mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by FNMA, FHLMC, or GNMA

 

 

400,488

 

 

 

420,104

 

 

 

290,120

 

 

 

180,668

 

 

 

167,110

 

Total securities available for sale

 

$

3,018,246

 

 

$

3,238,877

 

 

$

3,057,605

 

 

$

2,548,739

 

 

$

2,337,676

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SECURITIES HELD TO MATURITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of states and political subdivisions

 

$

7,324

 

 

$

7,328

 

 

$

10,683

 

 

$

12,994

 

 

$

26,554

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage pass-through securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Guaranteed by GNMA

 

 

4,831

 

 

 

5,005

 

 

 

5,912

 

 

 

6,249

 

 

 

7,268

 

Issued by FNMA and FHLMC

 

 

192,373

 

 

 

43,444

 

 

 

48,554

 

 

 

53,406

 

 

 

61,855

 

Other residential mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by FNMA, FHLMC, or GNMA

 

 

224,012

 

 

 

241,934

 

 

 

264,638

 

 

 

291,477

 

 

 

324,360

 

Commercial mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by FNMA, FHLMC, or GNMA

 

 

179,058

 

 

 

44,826

 

 

 

65,118

 

 

 

68,886

 

 

 

73,701

 

Total securities held to maturity

 

$

607,598

 

 

$

342,537

 

 

$

394,905

 

 

$

433,012

 

 

$

493,738

 

At March 31, 2022, the net unamortized, unrealized loss included in accumulated other comprehensive income (loss) in the accompanying balance sheet for securities held to maturity previously transferred from securities available for sale totaled approximately $5.8 million ($4.3 million, net of tax).

Management continues to focus on asset quality as one of the strategic goals of the securities portfolio, which is evidenced by the investment of 99.7% of the portfolio in GSE-backed obligations and other Aaa rated securities as determined by Moody’s. None of the securities owned by Trustmark are collateralized by assets which are considered sub-prime. Furthermore, outside of stock ownership in the Federal Home Loan Bank of Dallas, Federal Home Loan Bank of Atlanta and Federal Reserve Bank, Trustmark does not hold any other equity investment in a GSE.

Note 2 – Loan Composition

LHFI consisted of the following during the periods presented:

LHFI BY TYPE

 

3/31/2022

 

 

12/31/2021

 

 

9/30/2021

 

 

6/30/2021

 

 

3/31/2021

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development and other land loans

 

$

1,273,959

 

 

$

1,308,781

 

 

$

1,286,613

 

 

$

1,360,302

 

 

$

1,342,088

 

Secured by 1-4 family residential properties

 

 

2,106,998

 

 

 

1,977,993

 

 

 

1,891,292

 

 

 

1,810,396

 

 

 

1,742,782

 

Secured by nonfarm, nonresidential properties

 

 

2,975,039

 

 

 

2,977,084

 

 

 

2,924,953

 

 

 

2,819,662

 

 

 

2,799,195

 

Other real estate secured

 

 

715,939

 

 

 

726,043

 

 

 

986,163

 

 

 

1,078,622

 

 

 

1,135,005

 

Commercial and industrial loans

 

 

1,495,060

 

 

 

1,414,279

 

 

 

1,327,211

 

 

 

1,326,605

 

 

 

1,323,277

 

Consumer loans

 

 

154,215

 

 

 

159,472

 

 

 

157,963

 

 

 

153,519

 

 

 

153,267

 

State and other political subdivision loans

 

 

1,215,023

 

 

 

1,146,251

 

 

 

1,125,186

 

 

 

1,136,764

 

 

 

1,036,694

 

Other loans

 

 

460,896

 

 

 

537,926

 

 

 

475,518

 

 

 

466,999

 

 

 

451,396

 

LHFI

 

 

10,397,129

 

 

 

10,247,829

 

 

 

10,174,899

 

 

 

10,152,869

 

 

 

9,983,704

 

ACL LHFI

 

 

(98,734

)

 

 

(99,457

)

 

 

(104,073

)

 

 

(104,032

)

 

 

(109,191

)

Net LHFI

 

$

10,298,395

 

 

$

10,148,372

 

 

$

10,070,826

 

 

$

10,048,837

 

 

$

9,874,513

 

 

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

March 31, 2022

($ in thousands)

(unaudited)

Note 2 – Loan Composition (continued)

The following table presents the LHFI composition by region and reflects each region’s diversified mix of loans:

 

 

March 31, 2022

 

LHFI - COMPOSITION BY REGION

 

Total

 

 

Alabama

 

 

Florida

 

 

Mississippi

(Central and

Southern

Regions)

 

 

Tennessee

(Memphis,

TN and

Northern MS

Regions)

 

 

Texas

 

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development and other land loans

 

$

1,273,959

 

 

$

529,999

 

 

$

48,309

 

 

$

352,191

 

 

$

53,661

 

 

$

289,799

 

Secured by 1-4 family residential properties

 

 

2,106,998

 

 

 

111,960

 

 

 

41,219

 

 

 

1,870,529

 

 

 

66,423

 

 

 

16,867

 

Secured by nonfarm, nonresidential properties

 

 

2,975,039

 

 

 

859,687

 

 

 

255,757

 

 

 

1,125,568

 

 

 

180,042

 

 

 

553,985

 

Other real estate secured

 

 

715,939

 

 

 

171,769

 

 

 

6,691

 

 

 

267,558

 

 

 

20,747

 

 

 

249,174

 

Commercial and industrial loans

 

 

1,495,060

 

 

 

323,940

 

 

 

24,462

 

 

 

637,245

 

 

 

280,006

 

 

 

229,407

 

Consumer loans

 

 

154,215

 

 

 

22,749

 

 

 

8,203

 

 

 

97,681

 

 

 

18,128

 

 

 

7,454

 

State and other political subdivision loans

 

 

1,215,023

 

 

 

89,009

 

 

 

73,548

 

 

 

758,807

 

 

 

33,627

 

 

 

260,032

 

Other loans

 

 

460,896

 

 

 

75,916

 

 

 

11,219

 

 

 

290,692

 

 

 

35,503

 

 

 

47,566

 

Loans

 

$

10,397,129

 

 

$

2,185,029

 

 

$

469,408

 

 

$

5,400,271

 

 

$

688,137

 

 

$

1,654,284

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION

 

 

 

 

 

 

 

 

 

Lots

 

$

66,342

 

 

$

30,229

 

 

$

10,368

 

 

$

16,696

 

 

$

3,179

 

 

$

5,870

 

Development

 

 

120,992

 

 

 

52,238

 

 

 

555

 

 

 

30,884

 

 

 

12,141

 

 

 

25,174

 

Unimproved land

 

 

102,184

 

 

 

24,360

 

 

 

11,889

 

 

 

33,738

 

 

 

11,020

 

 

 

21,177

 

1-4 family construction

 

 

338,813

 

 

 

157,819

 

 

 

20,402

 

 

 

93,811

 

 

 

26,304

 

 

 

40,477

 

Other construction

 

 

645,628

 

 

 

265,353

 

 

 

5,095

 

 

 

177,062

 

 

 

1,017

 

 

 

197,101

 

Construction, land development and other land loans

 

$

1,273,959

 

 

$

529,999

 

 

$

48,309

 

 

$

352,191

 

 

$

53,661

 

 

$

289,799

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION

 

 

 

 

 

 

 

 

 

Non-owner occupied:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

$

354,974

 

 

$

132,872

 

 

$

35,777

 

 

$

100,409

 

 

$

22,650

 

 

$

63,266

 

Office

 

 

200,790

 

 

 

68,636

 

 

 

22,721

 

 

 

65,783

 

 

 

11,708

 

 

 

31,942

 

Hotel/motel

 

 

340,296

 

 

 

185,774

 

 

 

77,052

 

 

 

31,274

 

 

 

31,782

 

 

 

14,414

 

Mini-storage

 

 

157,182

 

 

 

22,984

 

 

 

2,100

 

 

 

103,191

 

 

 

432

 

 

 

28,475

 

Industrial

 

 

281,324

 

 

 

91,265

 

 

 

19,647

 

 

 

100,512

 

 

 

133

 

 

 

69,767

 

Health care

 

 

60,365

 

 

 

20,933

 

 

 

1,073

 

 

 

35,057

 

 

 

357

 

 

 

2,945

 

Convenience stores

 

 

20,328

 

 

 

8,270

 

 

 

668

 

 

 

5,971

 

 

 

1,144

 

 

 

4,275

 

Nursing homes/senior living

 

 

247,036

 

 

 

97,362

 

 

 

 

 

 

86,447

 

 

 

6,101

 

 

 

57,126

 

Other

 

 

80,353

 

 

 

18,638

 

 

 

7,089

 

 

 

27,329

 

 

 

11,458

 

 

 

15,839

 

Total non-owner occupied loans

 

 

1,742,648

 

 

 

646,734

 

 

 

166,127

 

 

 

555,973

 

 

 

85,765

 

 

 

288,049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner-occupied:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

 

174,447

 

 

 

38,250

 

 

 

37,682

 

 

 

58,774

 

 

 

12,933

 

 

 

26,808

 

Churches

 

 

81,601

 

 

 

18,512

 

 

 

5,630

 

 

 

45,644

 

 

 

8,296

 

 

 

3,519

 

Industrial warehouses

 

 

179,800

 

 

 

17,012

 

 

 

2,683

 

 

 

51,383

 

 

 

18,796

 

 

 

89,926

 

Health care

 

 

117,428

 

 

 

11,815

 

 

 

6,709

 

 

 

81,711

 

 

 

2,257

 

 

 

14,936

 

Convenience stores

 

 

141,493

 

 

 

13,915

 

 

 

18,399

 

 

 

67,249

 

 

 

444

 

 

 

41,486

 

Retail

 

 

71,684

 

 

 

10,740

 

 

 

10,473

 

 

 

19,559

 

 

 

18,668

 

 

 

12,244

 

Restaurants

 

 

55,403

 

 

 

4,616

 

 

 

4,867

 

 

 

29,491

 

 

 

12,460

 

 

 

3,969

 

Auto dealerships

 

 

51,150

 

 

 

5,798

 

 

 

249

 

 

 

25,856

 

 

 

19,247

 

 

 

 

Nursing homes/senior living

 

 

236,661

 

 

 

85,536

 

 

 

 

 

 

124,925

 

 

 

 

 

 

26,200

 

Other

 

 

122,724

 

 

 

6,759

 

 

 

2,938

 

 

 

65,003

 

 

 

1,176

 

 

 

46,848

 

Total owner-occupied loans

 

 

1,232,391

 

 

 

212,953

 

 

 

89,630

 

 

 

569,595

 

 

 

94,277

 

 

 

265,936

 

Loans secured by nonfarm, nonresidential properties

 

$

2,975,039

 

 

$

859,687

 

 

$

255,757

 

 

$

1,125,568

 

 

$

180,042

 

 

$

553,985

 

 

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

March 31, 2022

($ in thousands)

(unaudited)

Note 3 – 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

 

 

 

3/31/2022

 

 

12/31/2021

 

 

9/30/2021

 

 

6/30/2021

 

 

3/31/2021

 

Securities – taxable

 

 

1.37

%

 

 

1.22

%

 

 

1.28

%

 

 

1.30

%

 

 

1.40

%

Securities – nontaxable

 

 

3.97

%

 

 

3.82

%

 

 

3.79

%

 

 

3.70

%

 

 

4.02

%

Securities – total

 

 

1.38

%

 

 

1.23

%

 

 

1.29

%

 

 

1.31

%

 

 

1.43

%

PPP loans

 

 

2.35

%

 

 

3.68

%

 

 

4.98

%

 

 

15.81

%

 

 

6.27

%

Loans - LHFI & LHFS

 

 

3.58

%

 

 

3.56

%

 

 

3.59

%

 

 

3.64

%

 

 

3.67

%

Loans - total

 

 

3.58

%

 

 

3.56

%

 

 

3.61

%

 

 

4.36

%

 

 

3.81

%

Other earning assets

 

 

0.18

%

 

 

0.18

%

 

 

0.18

%

 

 

0.11

%

 

 

0.12

%

Total earning assets

 

 

2.69

%

 

 

2.65

%

 

 

2.70

%

 

 

3.33

%

 

 

3.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

 

0.11

%

 

 

0.13

%

 

 

0.14

%

 

 

0.19

%

 

 

0.22

%

Fed funds purchased & repurchases

 

 

0.13

%

 

 

0.13

%

 

 

0.14

%

 

 

0.14

%

 

 

0.14

%

Other borrowings

 

 

2.26

%

 

 

2.25

%

 

 

2.33

%

 

 

2.29

%

 

 

2.14

%

Total interest-bearing liabilities

 

 

0.16

%

 

 

0.19

%

 

 

0.21

%

 

 

0.25

%

 

 

0.28

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

 

2.58

%

 

 

2.53

%

 

 

2.57

%

 

 

3.16

%

 

 

2.81

%

Net interest margin excluding PPP loans and the FRB balance

 

 

2.88

%

 

 

2.82

%

 

 

2.90

%

 

 

2.94

%

 

 

2.99

%

Reflected in the table above are yields on earning assets and liabilities, along with the net interest margin which equals reported net interest income-FTE, annualized, as a percent of average earning assets. In addition, the table includes net interest margin excluding PPP loans and the balance held at the Federal Reserve Bank of Atlanta (FRB), which equals reported net interest income-FTE excluding interest income on PPP loans and the FRB balance, annualized, as a percent of average earning assets excluding average PPP loans and the FRB balance.

At March 31, 2022 and December 31, 2021, the average FRB balance totaled $1.758 billion and $1.787 billion, respectively, and is included in other earning assets in the accompanying average consolidated balance sheets.

The net interest margin excluding PPP loans and the FRB balance totaled 2.88% for the first quarter of 2022, an increase of 6 basis points when compared to the fourth quarter of 2021. The expansion of the net interest margin excluding PPP loans and the FRB balance was due to increases in the yields on the loans held for investment and held for sale portfolio and the securities portfolio which resulted from the higher interest-rate environment as well as lower costs of interest-bearing liabilities.

Note 4 – Mortgage Banking

Trustmark utilizes a portfolio of exchange-traded derivative instruments, such as Treasury note futures contracts and option contracts, to achieve a fair value return that offsets the changes in fair value of mortgage servicing rights (MSR) attributable to interest rates. These transactions are considered freestanding derivatives that do not otherwise qualify for hedge accounting under generally accepted accounting principles (GAAP). Changes in the fair value of these exchange-traded derivative instruments, including administrative costs, are recorded in noninterest income in mortgage banking, net and are offset by the changes in the fair value of the MSR. The MSR fair value represents the present value of future cash flows, which among other things includes decay and the effect of changes in interest rates. Ineffectiveness of hedging the MSR fair value is measured by comparing the change in value of hedge instruments to the change in the fair value of the MSR asset attributable to changes in interest rates and other market driven changes in valuation inputs and assumptions. The impact of this strategy resulted in a net positive ineffectiveness of $1.0 million during the first quarter of 2022.

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

 

 

Quarter Ended

 

 

 

3/31/2022

 

 

12/31/2021

 

 

9/30/2021

 

 

6/30/2021

 

 

3/31/2021

 

Mortgage servicing income, net

 

$

6,429

 

 

$

6,571

 

 

$

6,406

 

 

$

6,318

 

 

$

6,181

 

Change in fair value-MSR from runoff

 

 

(3,785

)

 

 

(4,745

)

 

 

(5,283

)

 

 

(5,029

)

 

 

(5,103

)

Gain on sales of loans, net

 

 

6,223

 

 

 

9,005

 

 

 

12,737

 

 

 

14,778

 

 

 

19,456

 

Mortgage banking income before hedge ineffectiveness

 

 

8,867

 

 

 

10,831

 

 

 

13,860

 

 

 

16,067

 

 

 

20,534

 

Change in fair value-MSR from market changes

 

 

22,020

 

 

 

2,221

 

 

 

1,806

 

 

 

(4,465

)

 

 

13,696

 

Change in fair value of derivatives

 

 

(21,014

)

 

 

(1,443

)

 

 

(1,662

)

 

 

5,731

 

 

 

(13,426

)

Net positive (negative) hedge ineffectiveness

 

 

1,006

 

 

 

778

 

 

 

144

 

 

 

1,266

 

 

 

270

 

Mortgage banking, net

 

$

9,873

 

 

$

11,609

 

 

$

14,004

 

 

$

17,333

 

 

$

20,804

 

 

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

March 31, 2022

($ in thousands)

(unaudited)

Note 5 – Other Noninterest Income and Expense

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

 

 

Quarter Ended

 

 

 

3/31/2022

 

 

12/31/2021

 

 

9/30/2021

 

 

6/30/2021

 

 

3/31/2021

 

Partnership amortization for tax credit purposes

 

$

(1,336

)

 

$

(2,455

)

 

$

(2,045

)

 

$

(1,989

)

 

$

(1,522

)

Increase in life insurance cash surrender value

 

 

1,627

 

 

 

1,675

 

 

 

1,663

 

 

 

1,653

 

 

 

1,639

 

Other miscellaneous income

 

 

2,915

 

 

 

1,759

 

 

 

1,863

 

 

 

2,337

 

 

 

1,973

 

Total other, net

 

$

3,206

 

 

$

979

 

 

$

1,481

 

 

$

2,001

 

 

$

2,090

 

Trustmark invests in partnerships that provide income tax credits on a Federal and/or State basis (i.e., new market tax credits, low-income housing tax credits and historical tax credits). The income tax credits related to these partnerships are utilized as specifically allowed by income tax law and are recorded as a reduction in income tax expense.

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

 

 

Quarter Ended

 

 

 

3/31/2022

 

 

12/31/2021

 

 

9/30/2021

 

 

6/30/2021

 

 

3/31/2021

 

Loan expense

 

$

4,389

 

 

$

3,221

 

 

$

4,022

 

 

$

3,738

 

 

$

4,167

 

Amortization of intangibles

 

 

482

 

 

 

548

 

 

 

549

 

 

 

553

 

 

 

666

 

FDIC assessment expense

 

 

1,500

 

 

 

1,475

 

 

 

1,275

 

 

 

1,225

 

 

 

1,540

 

Regulatory settlement charge

 

 

 

 

 

 

 

 

5,000

 

 

 

 

 

 

 

Other real estate expense, net

 

 

35

 

 

 

336

 

 

 

1,357

 

 

 

1,511

 

 

 

324

 

Other miscellaneous expense

 

 

7,935

 

 

 

9,326

 

 

 

7,673

 

 

 

7,623

 

 

 

8,166

 

Total other expense

 

$

14,341

 

 

$

14,906

 

 

$

19,876

 

 

$

14,650

 

 

$

14,863

 

Note 6 – Non-GAAP Financial Measures

In addition to capital ratios defined by GAAP and banking regulators, Trustmark utilizes various tangible common equity measures when evaluating capital utilization and adequacy. Tangible common equity, as defined by Trustmark, represents common equity less goodwill and identifiable intangible assets. Trustmark’s Common Equity Tier 1 capital includes common stock, capital surplus and retained earnings, and is reduced by goodwill and other intangible assets, net of associated net deferred tax liabilities as well as disallowed deferred tax assets and threshold deductions as applicable.

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

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

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

March 31, 2022

($ in thousands)

(unaudited)

Note 6 – Non-GAAP Financial Measures (continued)

 

 

 

 

Quarter Ended

 

 

 

 

 

3/31/2022

 

 

12/31/2021

 

 

9/30/2021

 

 

6/30/2021

 

 

3/31/2021

 

TANGIBLE EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE BALANCES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity

 

 

 

$

1,713,752

 

 

$

1,758,123

 

 

$

1,782,304

 

 

$

1,780,705

 

 

$

1,759,351

 

Less: Goodwill

 

 

 

 

(384,237

)

 

 

(384,237

)

 

 

(384,237

)

 

 

(384,237

)

 

 

(385,155

)

Identifiable intangible assets

 

 

 

 

(4,879

)

 

 

(5,382

)

 

 

(5,899

)

 

 

(6,442

)

 

 

(7,118

)

Total average tangible equity

 

 

 

$

1,324,636

 

 

$

1,368,504

 

 

$

1,392,168

 

 

$

1,390,026

 

 

$

1,367,078

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERIOD END BALANCES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity

 

 

 

$

1,631,382

 

 

$

1,741,311

 

 

$

1,768,947

 

 

$

1,779,309

 

 

$

1,759,705

 

Less: Goodwill

 

 

 

 

(384,237

)

 

 

(384,237

)

 

 

(384,237

)

 

 

(384,237

)

 

 

(384,237

)

Identifiable intangible assets

 

 

 

 

(4,591

)

 

 

(5,074

)

 

 

(5,621

)

 

 

(6,170

)

 

 

(6,724

)

Total tangible equity

 

(a)

 

$

1,242,554

 

 

$

1,352,000

 

 

$

1,379,089

 

 

$

1,388,902

 

 

$

1,368,744

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TANGIBLE ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

 

$

17,441,551

 

 

$

17,595,636

 

 

$

17,364,644

 

 

$

17,098,132

 

 

$

16,878,313

 

Less: Goodwill

 

 

 

 

(384,237

)

 

 

(384,237

)

 

 

(384,237

)

 

 

(384,237

)

 

 

(384,237

)

Identifiable intangible assets

 

 

 

 

(4,591

)

 

 

(5,074

)

 

 

(5,621

)

 

 

(6,170

)

 

 

(6,724

)

Total tangible assets

 

(b)

 

$

17,052,723

 

 

$

17,206,325

 

 

$

16,974,786

 

 

$

16,707,725

 

 

$

16,487,352

 

Risk-weighted assets

 

(c)

 

$

12,691,545

 

 

$

12,623,630

 

 

$

12,324,254

 

 

$

12,256,492

 

 

$

12,188,988

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME ADJUSTED FOR INTANGIBLE AMORTIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

$

29,211

 

 

$

26,222

 

 

$

21,200

 

 

$

47,981

 

 

$

51,962

 

Plus: Intangible amortization net of tax

 

 

 

 

362

 

 

 

411

 

 

 

412

 

 

 

415

 

 

 

500

 

Net income adjusted for intangible amortization

 

 

 

$

29,573

 

 

$

26,633

 

 

$

21,612

 

 

$

48,396

 

 

$

52,462

 

Period end common shares outstanding

 

(d)

 

 

61,463,392

 

 

 

61,648,679

 

 

 

62,461,832

 

 

 

62,773,226

 

 

 

63,394,522

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TANGIBLE COMMON EQUITY MEASUREMENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average tangible equity (1)

 

 

 

 

9.05

%

 

 

7.72

%

 

 

6.16

%

 

 

13.96

%

 

 

15.56

%

Tangible equity/tangible assets

 

(a)/(b)

 

 

7.29

%

 

 

7.86

%

 

 

8.12

%

 

 

8.31

%

 

 

8.30

%

Tangible equity/risk-weighted assets

 

(a)/(c)

 

 

9.79

%

 

 

10.71

%

 

 

11.19

%

 

 

11.33

%

 

 

11.23

%

Tangible book value

 

(a)/(d)*1,000

 

$

20.22

 

 

$

21.93

 

 

$

22.08

 

 

$

22.13

 

 

$

21.59

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMMON EQUITY TIER 1 CAPITAL (CET1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity

 

 

 

$

1,631,382

 

 

$

1,741,311

 

 

$

1,768,947

 

 

$

1,779,309

 

 

$

1,759,705

 

CECL transition adjustment

 

 

 

 

19,500

 

 

 

26,000

 

 

 

26,419

 

 

 

26,671

 

 

 

26,829

 

AOCI-related adjustments

 

 

 

 

148,656

 

 

 

32,560

 

 

 

19,080

 

 

 

10,641

 

 

 

16,506

 

CET1 adjustments and deductions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill net of associated deferred tax liabilities (DTLs)

 

 

 

 

(370,240

)

 

 

(370,252

)

 

 

(370,264

)

 

 

(370,276

)

 

 

(370,288

)

Other adjustments and deductions for CET1 (2)

 

 

 

 

(4,015

)

 

 

(4,392

)

 

 

(4,817

)

 

 

(5,243

)

 

 

(5,675

)

CET1 capital

 

(e)

 

 

1,425,283

 

 

 

1,425,227

 

 

 

1,439,365

 

 

 

1,441,102

 

 

 

1,427,077

 

Additional tier 1 capital instruments plus related surplus

 

 

 

 

60,000

 

 

 

60,000

 

 

 

60,000

 

 

 

60,000

 

 

 

60,000

 

Tier 1 capital

 

 

 

$

1,485,283

 

 

$

1,485,227

 

 

$

1,499,365

 

 

$

1,501,102

 

 

$

1,487,077

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity tier 1 capital ratio

 

(e)/(c)

 

 

11.23

%

 

 

11.29

%

 

 

11.68

%

 

 

11.76

%

 

 

11.71

%

(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.

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

March 31, 2022

($ in thousands)

(unaudited)

Note 6 – Non-GAAP Financial Measures (continued)

Trustmark discloses certain non-GAAP financial measures because Management uses these measures for business planning purposes, including to manage Trustmark’s business against internal projected results of operations and to measure Trustmark’s performance. Trustmark views these as measures of our core operating business, which exclude the impact of the items detailed below, as these items are generally not operational in nature. These non-GAAP financial measures also provide another basis for comparing period-to-period results as presented in the accompanying selected financial data table and the audited consolidated financial statements by excluding potential differences caused by non-operational and unusual or non-recurring items. Readers are cautioned that these adjustments are not permitted under GAAP. Trustmark encourages readers to consider its consolidated financial statements and the notes related thereto in their entirety, and not to rely on any single financial measure.

The following table presents pre-provision net revenue (PPNR) during the periods presented:

 

 

 

Quarter Ended

 

 

 

 

3/31/2022

 

 

12/31/2021

 

 

9/30/2021

 

 

6/30/2021

 

 

3/31/2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income (GAAP)

 

$

99,344

 

 

$

98,326

 

 

$

98,266

 

 

$

119,423

 

 

$

102,336

 

Noninterest income (GAAP)

 

 

54,115

 

 

 

50,767

 

 

 

54,149

 

 

 

56,411

 

 

 

60,583

 

Pre-provision revenue

(a)

$

153,459

 

 

$

149,093

 

 

$

152,415

 

 

$

175,834

 

 

$

162,919

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense (GAAP)

 

$

121,519

 

 

$

119,469

 

 

$

129,600

 

 

$

118,679

 

 

$

121,548

 

Less:

Voluntary early retirement program

 

 

 

 

 

 

 

 

(5,700

)

 

 

 

 

 

 

 

Regulatory settlement charge

 

 

 

 

 

 

 

 

(5,000

)

 

 

 

 

 

 

Adjusted noninterest expense - PPNR (Non-GAAP)

(b)

$

121,519

 

 

$

119,469

 

 

$

118,900

 

 

$

118,679

 

 

$

121,548

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PPNR (Non-GAAP)

(a)-(b)

$

31,940

 

 

$

29,624

 

 

$

33,515

 

 

$

57,155

 

 

$

41,371

 

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

 

 

 

Quarter Ended

 

 

 

 

3/31/2022

 

 

12/31/2021

 

 

9/30/2021

 

 

6/30/2021

 

 

3/31/2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest expense (GAAP)

 

$

121,519

 

 

$

119,469

 

 

$

129,600

 

 

$

118,679

 

 

$

121,548

 

Less:

Other real estate expense, net

 

 

(35

)

 

 

(336

)

 

 

(1,357

)

 

 

(1,511

)

 

 

(324

)

 

Amortization of intangibles

 

 

(482

)

 

 

(548

)

 

 

(549

)

 

 

(553

)

 

 

(666

)

 

Charitable contributions resulting in state tax credits

 

 

(375

)

 

 

(391

)

 

 

(350

)

 

 

(355

)

 

 

(350

)

 

Voluntary early retirement program

 

 

 

 

 

 

 

 

(5,700

)

 

 

 

 

 

 

 

Regulatory settlement charge

 

 

 

 

 

 

 

 

(5,000

)

 

 

 

 

 

 

Adjusted noninterest expense (Non-GAAP)

(c)

$

120,627

 

 

$

118,194

 

 

$

116,644

 

 

$

116,260

 

 

$

120,208

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income (GAAP)

 

$

99,344

 

 

$

98,326

 

 

$

98,266

 

 

$

119,423

 

 

$

102,336

 

Add:

Tax equivalent adjustment

 

 

3,003

 

 

 

2,906

 

 

 

2,947

 

 

 

2,957

 

 

 

2,894

 

Net interest income-FTE (Non-GAAP)

(a)

$

102,347

 

 

$

101,232

 

 

$

101,213

 

 

$

122,380

 

 

$

105,230

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income (GAAP)

 

$

54,115

 

 

$

50,767

 

 

$

54,149

 

 

$

56,411

 

 

$

60,583

 

Add:

Partnership amortization for tax credit purposes

 

 

1,336

 

 

 

2,455

 

 

 

2,045

 

 

 

1,989

 

 

 

1,522

 

Adjusted noninterest income (Non-GAAP)

(b)

$

55,451

 

 

$

53,222

 

 

$

56,194

 

 

$

58,400

 

 

$

62,105

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted revenue (Non-GAAP)

(a)+(b)

$

157,798

 

 

$

154,454

 

 

$

157,407

 

 

$

180,780

 

 

$

167,335

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (Non-GAAP)

(c)/((a)+(b))

 

76.44

%

 

 

76.52

%

 

 

74.10

%

 

 

64.31

%

 

 

71.84

%

 

Contacts

Trustmark Investor Contacts:

Thomas C. Owens

Treasurer and Principal Financial Officer

601-208-7853

F. Joseph Rein, Jr.

Senior Vice President

601-208-6898

Trustmark Media Contact:

Melanie A. Morgan

Senior Vice President

601-208-2979

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