þ
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
Mississippi
|
64-0471500
|
|||
(State
or other jurisdiction of incorporation or
organization)
|
(I.R.S.
Employer Identification No.)
|
|||
|
||||
248
East Capitol Street, Jackson, Mississippi
|
|
39201
|
||
(Address
of principal executive offices)
|
(Zip
Code)
|
Large
accelerated filer þ
|
Accelerated
filer o
|
Non-accelerated
filer o
|
(Unaudited)
|
|
||||||
September
30,
2006
|
December
31,
2005
|
||||||
Assets
|
|
|
|||||
Cash
and due from banks (noninterest-bearing)
|
$
|
348,397
|
$
|
387,930
|
|||
Federal
funds sold and securities purchased under reverse repurchase
agreements
|
6,907
|
130,115
|
|||||
Securities
available for sale (at fair value)
|
862,482
|
1,041,754
|
|||||
Securities
held to maturity (fair value: $288,314-2006;
$295,521-2005)
|
289,125
|
294,902
|
|||||
Loans
held for sale
|
125,988
|
146,936
|
|||||
Loans
|
6,538,872
|
5,893,439
|
|||||
Less
allowance for loan losses
|
75,539
|
76,691
|
|||||
Net
loans
|
6,463,333
|
5,816,748
|
|||||
Premises
and equipment
|
132,055
|
115,115
|
|||||
Mortgage
servicing rights
|
66,526
|
58,424
|
|||||
Goodwill
|
290,753
|
137,368
|
|||||
Identifiable
intangible assets
|
45,704
|
28,703
|
|||||
Other
assets
|
238,284
|
231,755
|
|||||
Total
Assets
|
$
|
8,869,554
|
$
|
8,389,750
|
|||
Liabilities
|
|||||||
Deposits:
|
|||||||
Noninterest-bearing
|
$
|
1,580,533
|
$
|
1,556,142
|
|||
Interest-bearing
|
5,541,680
|
4,726,672
|
|||||
Total
deposits
|
7,122,213
|
6,282,814
|
|||||
Federal
funds purchased
|
77,927
|
178,789
|
|||||
Securities
sold under repurchase agreements
|
180,536
|
314,064
|
|||||
Short-term
borrowings
|
430,210
|
775,402
|
|||||
Long-term
FHLB advances
|
-
|
5,726
|
|||||
Junior
subordinated debt securities
|
70,104
|
-
|
|||||
Other
liabilities
|
98,634
|
91,492
|
|||||
Total
Liabilities
|
7,979,624
|
7,648,287
|
|||||
Commitments
and Contingencies
|
|||||||
Shareholders'
Equity
|
|||||||
Common
stock, no par value:
|
|||||||
Authorized:
250,000,000 shares
|
|||||||
Issued
and outstanding: 58,611,242 shares - 2006; 55,771,459 shares -
2005
|
12,212
|
11,620
|
|||||
Capital
surplus
|
156,625
|
65,374
|
|||||
Retained
earnings
|
732,781
|
677,781
|
|||||
Accumulated
other comprehensive loss, net of tax
|
(11,688
|
)
|
(13,312
|
)
|
|||
Total
Shareholders' Equity
|
889,930
|
741,463
|
|||||
Total
Liabilities and Shareholders' Equity
|
$
|
8,869,554
|
$
|
8,389,750
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Interest
Income
|
|
|
|
|
|||||||||
Interest
and fees on loans
|
$
|
112,282
|
$
|
91,533
|
$
|
311,834
|
$
|
254,156
|
|||||
Interest
on securities:
|
|||||||||||||
Taxable
|
10,710
|
13,358
|
33,589
|
43,085
|
|||||||||
Tax
exempt
|
1,803
|
1,850
|
5,418
|
5,607
|
|||||||||
Interest
on federal funds sold and securities purchased under reverse repurchase
agreements
|
346
|
287
|
1,018
|
703
|
|||||||||
Other
interest income
|
56
|
15
|
107
|
57
|
|||||||||
Total
Interest Income
|
125,197
|
107,043
|
351,966
|
303,608
|
|||||||||
Interest
Expense
|
|||||||||||||
Interest
on deposits
|
41,781
|
21,415
|
105,225
|
56,109
|
|||||||||
Interest
on federal funds purchased and securities sold under repurchase
agreements
|
4,896
|
5,050
|
15,700
|
13,693
|
|||||||||
Other
interest expense
|
7,890
|
11,591
|
22,552
|
28,501
|
|||||||||
Total
Interest Expense
|
54,567
|
38,056
|
143,477
|
98,303
|
|||||||||
Net
Interest Income
|
70,630
|
68,987
|
208,489
|
205,305
|
|||||||||
Provision
for loan losses
|
(81
|
)
|
12,127
|
(5,029
|
)
|
16,352
|
|||||||
Net
Interest Income After Provision for Loan Losses
|
70,711
|
56,860
|
213,518
|
188,953
|
|||||||||
Noninterest
Income
|
|||||||||||||
Service
charges on deposit accounts
|
14,360
|
13,025
|
39,357
|
38,950
|
|||||||||
Insurance
commissions
|
8,935
|
9,294
|
26,002
|
25,526
|
|||||||||
Wealth
management
|
5,770
|
5,293
|
17,246
|
15,950
|
|||||||||
General
banking - other
|
5,668
|
5,226
|
16,333
|
15,262
|
|||||||||
Mortgage
banking, net
|
1,131
|
3,290
|
7,481
|
3,895
|
|||||||||
Other,
net
|
3,559
|
8,028
|
7,827
|
13,125
|
|||||||||
Securities
gains (losses)
|
645
|
45
|
1,895
|
(4,009
|
)
|
||||||||
Total
Noninterest Income
|
40,068
|
44,201
|
116,141
|
108,699
|
|||||||||
Noninterest
Expense
|
|||||||||||||
Salaries
and employee benefits
|
40,231
|
37,808
|
119,175
|
112,412
|
|||||||||
Services
and fees
|
9,240
|
8,269
|
26,983
|
25,331
|
|||||||||
Net
occupancy - premises
|
4,479
|
3,956
|
12,433
|
11,308
|
|||||||||
Equipment
expense
|
3,731
|
3,653
|
10,963
|
11,461
|
|||||||||
Other
expense
|
8,144
|
7,293
|
23,535
|
21,870
|
|||||||||
Total
Noninterest Expense
|
65,825
|
60,979
|
193,089
|
182,382
|
|||||||||
Income
Before Income Taxes
|
44,954
|
40,082
|
136,570
|
115,270
|
|||||||||
Income
taxes
|
15,193
|
13,861
|
46,716
|
40,062
|
|||||||||
Net
Income
|
$
|
29,761
|
$
|
26,221
|
$
|
89,854
|
$
|
75,208
|
|||||
Earnings
Per Share
|
|||||||||||||
Basic
|
$
|
0.53
|
$
|
0.46
|
$
|
1.61
|
$
|
1.32
|
|||||
Diluted
|
$
|
0.52
|
$
|
0.46
|
$
|
1.60
|
$
|
1.32
|
|||||
Dividends
Per Share
|
$
|
0.21
|
$
|
0.20
|
$
|
0.63
|
$
|
0.60
|
2006
|
2005
|
||||||
Balance,
January 1,
|
$
|
741,463
|
$
|
750,396
|
|||
Cumulative
effect adjustment due to change in accounting for mortgage servicing
rights
|
848
|
-
|
|||||
Comprehensive
income:
|
|||||||
Net
income per consolidated statements of income
|
89,854
|
75,208
|
|||||
Net
change in fair value of securities available for sale, net of
tax
|
1,624
|
(6,275
|
)
|
||||
Comprehensive
income
|
91,478
|
68,933
|
|||||
Cash
dividends paid
|
(35,701
|
)
|
(34,032
|
)
|
|||
Common
stock issued, long-term incentive plan
|
4,407
|
2,024
|
|||||
Compensation
expense, long-term incentive plan
|
2,432
|
1,163
|
|||||
Common
stock issued in business combination
|
103,812
|
-
|
|||||
Repurchase
and retirement of common stock
|
(18,809
|
)
|
(55,930
|
)
|
|||
Balance,
September 30,
|
$
|
889,930
|
$
|
732,554
|
Nine
Months Ended September 30,
|
|||||||
2006
|
2005
|
||||||
Operating
Activities
|
|
|
|||||
Net
income
|
$
|
89,854
|
$
|
75,208
|
|||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
Provision
for loan losses
|
(5,029
|
)
|
16,352
|
||||
Depreciation
and amortization/impairment
|
19,672
|
18,143
|
|||||
Net
amortization of securities
|
3,549
|
5,990
|
|||||
Securities
(gains) losses
|
(1,895
|
)
|
4,009
|
||||
Gains
on sales of loans
|
(4,907
|
)
|
(1,929
|
)
|
|||
Deferred
income tax provision (benefit)
|
5,255
|
(4,374
|
)
|
||||
Excess
tax benefit from exercise of stock options
|
(480
|
)
|
(200
|
)
|
|||
Proceeds
from sales of loans held for sale
|
874,221
|
693,233
|
|||||
Purchases
and originations of loans held for sale
|
(849,562
|
)
|
(699,976
|
)
|
|||
Net
increase in mortgage servicing rights
|
(12,736
|
)
|
(11,234
|
)
|
|||
Net
increase in other assets
|
(4,218
|
)
|
(7,465
|
)
|
|||
Net
increase in other liabilities
|
2,835
|
25,817
|
|||||
Other
operating activities, net
|
969
|
1,294
|
|||||
Net
cash provided by operating activities
|
117,528
|
114,868
|
|||||
Investing
Activities
|
|||||||
Proceeds
from calls and maturities of securities held to maturity
|
9,622
|
12,931
|
|||||
Proceeds
from calls and maturities of securities available for sale
|
238,934
|
199,723
|
|||||
Proceeds
from sales of securities available for sale
|
105,268
|
286,551
|
|||||
Purchases
of securities held to maturity
|
(6,707
|
)
|
(177,637
|
)
|
|||
Purchases
of securities available for sale
|
(85,060
|
)
|
(65,292
|
)
|
|||
Net
decrease in federal funds sold and securities purchased under reverse
repurchase agreements
|
123,208
|
70,506
|
|||||
Net
increase in loans
|
(165,502
|
)
|
(547,276
|
)
|
|||
Purchases
of premises and equipment
|
(16,001
|
)
|
(7,462
|
)
|
|||
Proceeds
from sales of premises and equipment
|
1,788
|
1,702
|
|||||
Proceeds
from sales of other real estate
|
2,135
|
4,678
|
|||||
Net
cash paid in business combination
|
(78,920
|
)
|
-
|
||||
Net
cash provided by (used in) investing activities
|
128,765
|
(221,576
|
)
|
||||
Financing
Activities
|
|||||||
Net
increase in deposits
|
245,425
|
395,349
|
|||||
Net
decrease in federal funds purchased and securities sold under repurchase
agreements
|
(169,867
|
)
|
(98,373
|
)
|
|||
Net
decrease in other borrowings
|
(373,138
|
)
|
(147,428
|
)
|
|||
Proceeds
from long-term FHLB advances
|
-
|
100,000
|
|||||
Proceeds
from issuance of junior subordinated debt securities
|
61,856
|
-
|
|||||
Cash
dividends
|
(35,701
|
)
|
(34,032
|
)
|
|||
Proceeds
from exercise of stock options
|
3,928
|
1,824
|
|||||
Excess
tax benefit from exercise of stock options
|
480
|
200
|
|||||
Repurchase
and retirement of common stock
|
(18,809
|
)
|
(55,930
|
)
|
|||
Net
cash (used in) provided by financing activities
|
(285,826
|
)
|
161,610
|
||||
(Decrease)
increase in cash and cash equivalents
|
(39,533
|
)
|
54,902
|
||||
Cash
and cash equivalents at beginning of period
|
387,930
|
343,125
|
|||||
Cash
and cash equivalents at end of period
|
$
|
348,397
|
$
|
398,027
|
NOTE
1 -
|
BASIS
OF FINANCIAL STATEMENT PRESENTATION AND PRINCIPLES OF CONSOLIDATION
|
NOTE
2 -
|
BUSINESS
COMBINATIONS
|
NOTE 3 - |
LOANS
AND ALLOWANCE FOR LOAN
LOSSES
|
September
30,
2006
|
December
31,
2005
|
||||||
Real
estate loans:
|
|||||||
Construction
and land development
|
$
|
903,399
|
$
|
715,174
|
|||
Secured
by 1-4 family residential properties
|
1,865,395
|
1,901,196
|
|||||
Secured
by nonfarm, nonresidential properties
|
1,310,191
|
1,061,669
|
|||||
Other
|
127,072
|
166,685
|
|||||
Loans
to finance agricultural production
|
31,055
|
40,162
|
|||||
Commercial
and industrial
|
1,115,452
|
861,167
|
|||||
Consumer
|
926,823
|
886,072
|
|||||
Obligations
of states and political subdivisions
|
207,369
|
210,310
|
|||||
Other
loans
|
52,116
|
51,004
|
|||||
Loans
|
6,538,872
|
5,893,439
|
|||||
Less
allowance for loan losses
|
75,539
|
76,691
|
|||||
Net
loans
|
$
|
6,463,333
|
$
|
5,816,748
|
Nine
Months Ended September 30,
|
|||||||
2006
|
2005
|
||||||
Balance
at beginning of year
|
$
|
76,691
|
$
|
64,757
|
|||
Provision
charged to expense
|
(5,029
|
)
|
16,352
|
||||
Loans
charged off
|
(9,874
|
)
|
(12,163
|
)
|
|||
Recoveries
|
8,434
|
6,804
|
|||||
Net
charge-offs
|
(1,440
|
)
|
(5,359
|
)
|
|||
Allowance
of acquired bank
|
5,317
|
-
|
|||||
Balance
at end of period
|
$
|
75,539
|
$
|
75,750
|
NOTE
4 -
|
MORTGAGE
BANKING
|
Nine
Months Ended September 30,
|
|||||||
2006
|
2005
|
||||||
Balance
at beginning of period
|
$
|
58,424
|
$
|
52,463
|
|||
Cumulative-effect
adjustment - change in accounting for MSR
|
1,373
|
-
|
|||||
Additions
|
|||||||
Purchase
of servicing assets
|
9,602
|
8,545
|
|||||
Servicing
assets that resulted from transfers of financial assets
|
5,185
|
3,405
|
|||||
Disposals
|
(2,051
|
)
|
(716
|
)
|
|||
Change
in fair value:
|
|||||||
Due
to market changes
|
2,113
|
-
|
|||||
Due
to runoff
|
(7,654
|
)
|
-
|
||||
Due
to other
|
(466
|
)
|
-
|
||||
Amortization
|
-
|
(7,990
|
)
|
||||
Impairment
|
-
|
1,638
|
|||||
Balance
at end of period
|
$
|
66,526
|
$
|
57,345
|
NOTE 5 - |
DEPOSITS
|
September
30,
2006
|
December
31,
2005
|
||||||
Noninterest-bearing
demand deposits
|
$
|
1,580,533
|
$
|
1,556,142
|
|||
Interest-bearing
deposits
|
|||||||
Interest-bearing
demand
|
1,226,771
|
846,754
|
|||||
Savings
|
1,748,347
|
1,608,334
|
|||||
Time
|
2,566,562
|
2,271,584
|
|||||
Total
interest-bearing deposits
|
5,541,680
|
4,726,672
|
|||||
Total
deposits
|
$
|
7,122,213
|
$
|
6,282,814
|
NOTE
6 -
|
STOCK
AND INCENTIVE COMPENSATION
PLANS
|
Three
Months
Ended
Sept.
30, 2005
|
Nine
Months
Ended
Sept.
30, 2005
|
||||||
Net
income, as reported
|
$
|
26,221
|
$
|
75,208
|
|||
Add:
Total stock-based compensation expense reported in net income,
net of
related tax effects
|
298
|
718
|
|||||
Deduct:
Total stock-based compensation expense determined under fair value
based
methods for all awards, net of related tax effects
|
(418
|
)
|
(1,213
|
)
|
|||
Pro
forma net income
|
$
|
26,101
|
$
|
74,713
|
|||
Earnings
per share:
|
|||||||
As
reported
|
|||||||
Basic
|
$
|
0.46
|
$
|
1.32
|
|||
Diluted
|
0.46
|
1.32
|
|||||
Pro
forma
|
|||||||
Basic
|
$
|
0.46
|
$
|
1.31
|
|||
Diluted
|
0.46
|
1.31
|
2006
|
||||||||||
Options
|
Shares
|
Weighted-
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
|
|||||||
Outstanding,
beginning of period
|
2,016,930
|
$
|
24.44
|
|||||||
Granted
|
271,200
|
31.55
|
||||||||
Exercised
|
(167,675
|
)
|
23.43
|
|||||||
Forfeited
|
(43,850
|
)
|
28.86
|
|||||||
Expired
|
-
|
-
|
||||||||
Outstanding,
end of period
|
2,076,605
|
25.36
|
$
|
13,589,551
|
||||||
Exercisable,
end of period
|
1,307,478
|
23.37
|
$
|
11,151,696
|
Options
Outstanding
|
Options
Exercisable
|
||||||||||||||||||
Range
of
Exercise
Prices
|
Outstanding
Sept.
30,
2006
|
Weighted-
Average
Exercise
Price
|
Weighted-
Average
Remaining
Contractual
Life
|
Exercisable
Sept.
30,
2006
|
Weighted-
Average
Exercise
Price
|
Weighted-
Average
Remaining
Contractual
Life
|
|||||||||||||
$13.53
- $19.60
|
199,370
|
$
|
17.78
|
3.4
|
199,370
|
$
|
17.78
|
3.4
|
|||||||||||
$19.61
- $25.67
|
954,135
|
23.57
|
4.8
|
871,368
|
23.52
|
4.8
|
|||||||||||||
$25.68
- $31.74
|
923,100
|
28.84
|
6.6
|
236,740
|
27.53
|
6.6
|
|||||||||||||
2,076,605
|
25.36
|
5.5
|
1,307,478
|
23.37
|
5.5
|
Nonvested
Shares
|
Shares
|
Weighted-Average
Grant
Date
Fair
Value
|
|||||
Nonvested
shares, beginning of period
|
26,325
|
$
|
28.28
|
||||
Granted
|
104,916
|
28.67
|
|||||
Vested
|
-
|
||||||
Forfeited
|
(1,250
|
)
|
28.25
|
||||
Nonvested
shares, end of period
|
129,991
|
28.42
|
NOTE
7 -
|
BENEFIT
PLANS
|
2006
|
2005
|
||||||
Service
cost - benefits earned during the period
|
$
|
1,962
|
$
|
1,635
|
|||
Interest
cost on projected benefit obligation
|
3,294
|
3,202
|
|||||
Expected
return on plan assets
|
(3,923
|
)
|
(4,056
|
)
|
|||
Amortization
of prior service cost
|
(262
|
)
|
(67
|
)
|
|||
Recognized
net actuarial loss
|
1,841
|
1,438
|
|||||
Net
periodic benefit cost
|
$
|
2,912
|
$
|
2,152
|
2006
|
2005
|
||||||
Service
cost - benefits earned during the period
|
$
|
1,201
|
$
|
1,088
|
|||
Interest
cost on projected benefit obligation
|
1,239
|
1,177
|
|||||
Amortization
of prior service cost
|
104
|
152
|
|||||
Recognized
net actuarial loss
|
110
|
77
|
|||||
Net
periodic benefit cost
|
$
|
2,654
|
$
|
2,494
|
NOTE
8 -
|
CONTINGENCIES
|
NOTE
9 -
|
ISSUANCE
OF TRUST PREFERRED SECURITIES AND JUNIOR SUBORDINATED
DEBT
|
NOTE
10 -
|
EARNINGS
PER SHARE
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Basic
shares
|
56,591
|
56,406
|
55,954
|
56,874
|
|||||||||
Dilutive
shares (related to stock options)
|
240
|
137
|
154
|
137
|
|||||||||
Diluted
shares
|
56,831
|
56,543
|
56,108
|
57,011
|
NOTE
11 -
|
STATEMENTS
OF CASH FLOWS
|
NOTE
12 -
|
SEGMENT
INFORMATION
|
For
the three months ended
|
General
Banking
Division
|
Wealth
Management
Division
|
Insurance
Division
|
Administration
Division
|
Total
|
|||||||||||
September
30, 2006
|
||||||||||||||||
Net
interest income from external customers
|
$
|
72,002
|
$
|
1,244
|
$
|
(2
|
)
|
$
|
(2,614
|
)
|
$
|
70,630
|
||||
Internal
funding
|
(2,739
|
)
|
(266
|
)
|
-
|
3,005
|
-
|
|||||||||
Net
interest income
|
69,263
|
978
|
(2
|
)
|
391
|
70,630
|
||||||||||
Provision
for loan losses
|
1,429
|
-
|
-
|
(1,510
|
)
|
(81
|
)
|
|||||||||
Net
interest income after provision for loan losses
|
67,834
|
978
|
(2
|
)
|
1,901
|
70,711
|
||||||||||
Noninterest
income
|
24,633
|
5,887
|
9,089
|
459
|
40,068
|
|||||||||||
Noninterest
expense
|
46,432
|
4,628
|
5,999
|
8,766
|
65,825
|
|||||||||||
Income
before income taxes
|
46,035
|
2,237
|
3,088
|
(6,406
|
)
|
44,954
|
||||||||||
Income
taxes
|
15,963
|
818
|
1,180
|
(2,768
|
)
|
15,193
|
||||||||||
Segment
net income
|
$
|
30,072
|
$
|
1,419
|
$
|
1,908
|
$
|
(3,638
|
)
|
$
|
29,761
|
|||||
|
||||||||||||||||
|
||||||||||||||||
Selected
Financial Information
|
||||||||||||||||
Average
assets
|
$
|
6,841,654
|
$
|
91,460
|
$
|
33,199
|
$
|
1,505,526
|
$
|
8,471,839
|
||||||
Depreciation
and amortization
|
$
|
5,739
|
$
|
105
|
$
|
96
|
$
|
1,186
|
$
|
7,126
|
For
the three months ended
|
||||||||||||||||
September
30, 2005
|
||||||||||||||||
Net
interest income from external customers
|
$
|
70,844
|
$
|
1,045
|
$
|
(3
|
)
|
$
|
(2,899
|
)
|
$
|
68,987
|
||||
Internal
funding
|
(7,757
|
)
|
(204
|
)
|
-
|
7,961
|
-
|
|||||||||
Net
interest income
|
63,087
|
841
|
(3
|
)
|
5,062
|
68,987
|
||||||||||
Provision
for loan losses
|
2,485
|
43
|
-
|
9,599
|
12,127
|
|||||||||||
Net
interest income after provision for loan losses
|
60,602
|
798
|
(3
|
)
|
(4,537
|
)
|
56,860
|
|||||||||
Noninterest
income
|
30,063
|
5,493
|
9,283
|
(638
|
)
|
44,201
|
||||||||||
Noninterest
expense
|
42,690
|
4,615
|
5,931
|
7,743
|
60,979
|
|||||||||||
Income
before income taxes
|
47,975
|
1,676
|
3,349
|
(12,918
|
)
|
40,082
|
||||||||||
Income
taxes
|
16,567
|
614
|
1,305
|
(4,625
|
)
|
13,861
|
||||||||||
Segment
net income
|
$
|
31,408
|
$
|
1,062
|
$
|
2,044
|
$
|
(8,293
|
)
|
$
|
26,221
|
|||||
Selected
Financial Information
|
||||||||||||||||
Average
assets
|
$
|
6,375,691
|
$
|
96,748
|
$
|
31,357
|
$
|
1,713,981
|
$
|
8,217,777
|
||||||
Depreciation
and amortization/impairment
|
$
|
1,785
|
$
|
136
|
$
|
92
|
$
|
960
|
$
|
2,973
|
For
the nine months ended
|
General
Banking
Division
|
Wealth
Management
Division
|
Insurance
Division
|
Administration
Division
|
Total
|
|||||||||||
September
30, 2006
|
||||||||||||||||
Net
interest income from external customers
|
$
|
205,924
|
$
|
3,301
|
$
|
(6
|
)
|
$
|
(730
|
)
|
$
|
208,489
|
||||
Internal
funding
|
(5,382
|
)
|
(207
|
)
|
-
|
5,589
|
-
|
|||||||||
Net
interest income
|
200,542
|
3,094
|
(6
|
)
|
4,859
|
208,489
|
||||||||||
Provision
for loan losses
|
1,633
|
(8
|
)
|
-
|
(6,654
|
)
|
(5,029
|
)
|
||||||||
Net
interest income after provision for loan losses
|
198,909
|
3,102
|
(6
|
)
|
11,513
|
213,518
|
||||||||||
Noninterest
income
|
70,151
|
17,664
|
26,328
|
1,998
|
116,141
|
|||||||||||
Noninterest
expense
|
136,620
|
14,095
|
17,467
|
24,907
|
193,089
|
|||||||||||
Income
before income taxes
|
132,440
|
6,671
|
8,855
|
(11,396
|
)
|
136,570
|
||||||||||
Income
taxes
|
45,749
|
2,431
|
3,425
|
(4,889
|
)
|
46,716
|
||||||||||
Segment
net income
|
$
|
86,691
|
$
|
4,240
|
$
|
5,430
|
$
|
(6,507
|
)
|
$
|
89,854
|
|||||
Selected
Financial Information
|
||||||||||||||||
Average
assets
|
$
|
6,660,618
|
$
|
88,822
|
$
|
27,266
|
$
|
1,516,673
|
$
|
8,293,379
|
||||||
Depreciation
and amortization
|
$
|
15,996
|
$
|
317
|
$
|
295
|
$
|
3,064
|
$
|
19,672
|
For
the nine months ended
|
||||||||||||||||
September
30, 2005
|
|
|||||||||||||||
Net
interest income from external customers
|
$
|
197,290
|
$
|
3,458
|
$
|
(8
|
)
|
$
|
4,565
|
$
|
205,305
|
|||||
Internal
funding
|
(13,771
|
)
|
(779
|
)
|
-
|
14,550
|
-
|
|||||||||
Net
interest income
|
183,519
|
2,679
|
(8
|
)
|
19,115
|
205,305
|
||||||||||
Provision
for loan losses
|
6,671
|
36
|
-
|
9,645
|
16,352
|
|||||||||||
Net
interest income after provision for loan losses
|
176,848
|
2,643
|
(8
|
)
|
9,470
|
188,953
|
||||||||||
Noninterest
income
|
70,921
|
16,432
|
25,476
|
(4,130
|
)
|
108,699
|
||||||||||
Noninterest
expense
|
129,666
|
13,969
|
16,958
|
21,789
|
182,382
|
|||||||||||
Income
before income taxes
|
118,103
|
5,106
|
8,510
|
(16,449
|
)
|
115,270
|
||||||||||
Income
taxes
|
40,727
|
1,882
|
3,431
|
(5,978
|
)
|
40,062
|
||||||||||
Segment
net income
|
$
|
77,376
|
$
|
3,224
|
$
|
5,079
|
$
|
(10,471
|
)
|
$
|
75,208
|
|||||
Selected
Financial Information
|
||||||||||||||||
Average
assets
|
$
|
6,177,968
|
$
|
98,074
|
$
|
21,598
|
$
|
1,906,374
|
$
|
8,204,014
|
||||||
Depreciation
and amortization/impairment
|
$
|
14,587
|
$
|
403
|
$
|
274
|
$
|
2,879
|
$
|
18,143
|
NOTE
13 -
|
RECENT
PRONOUNCEMENTS
|
·
|
Successful
merger and integration of Houston’s Republic Bancshares of Texas,
Inc.
|
·
|
Excellent
growth in loans and deposits
|
·
|
Solid
credit quality
|
·
|
Continued
investment in banking center expansion
program
|
Quarter
Ended 9/30/2006
|
Quarter
Ended 9/30/2005
|
||||||||||||
$
|
Basic
EPS
|
$
|
Basic
EPS
|
||||||||||
Net
Income as reported--GAAP
|
$
|
29,761
|
$
|
0.526
|
$
|
26,221
|
$
|
0.465
|
|||||
Adjustments
(net of taxes):
|
|||||||||||||
Less
Hurricane Katrina reserves released
|
|||||||||||||
Provision
for loan losses
|
(874
|
)
|
(0.015
|
)
|
6,054
|
0.107
|
|||||||
Mortgage
related charges
|
(14
|
)
|
(0.001
|
)
|
1,419
|
0.025
|
|||||||
Noninterest
income - lost revenues
|
-
|
-
|
839
|
0.015
|
|||||||||
Noninterest
expense - additional expenses
|
-
|
-
|
333
|
0.006
|
|||||||||
(888
|
)
|
(0.016
|
)
|
8,645
|
0.153
|
||||||||
Subtract
sale of Merchant Service Portfolio
|
-
|
-
|
(3,551
|
)
|
(0.063
|
)
|
|||||||
Net
Income adjusted for specific items (Non-GAAP)
|
$
|
28,873
|
$
|
0.510
|
$
|
31,315
|
$
|
0.555
|
Year-to-Date
9/30/2006
|
Year-to-Date
9/30/2005
|
||||||||||||
$
|
Basic
EPS
|
$
|
Basic
EPS
|
||||||||||
Net
Income as reported--GAAP
|
$
|
89,854
|
$
|
1.606
|
$
|
75,208
|
$
|
1.322
|
|||||
Adjustments
(net of taxes):
|
|||||||||||||
Less
Hurricane Katrina reserves released
|
|||||||||||||
Provision
for loan losses
|
(3,865
|
)
|
(0.069
|
)
|
6,054
|
0.106
|
|||||||
Mortgage
related charges
|
(694
|
)
|
(0.012
|
)
|
1,419
|
0.025
|
|||||||
Noninterest
income - lost revenues
|
-
|
-
|
839
|
0.015
|
|||||||||
Noninterest
expense - additional expenses
|
-
|
-
|
333
|
0.006
|
|||||||||
(4,559
|
)
|
(0.081
|
)
|
8,645
|
0.152
|
||||||||
Subtract
sale of Merchant Service Portfolio
|
-
|
-
|
(3,551
|
)
|
(0.062
|
)
|
|||||||
Net
Income adjusted for specific items (Non-GAAP)
|
$
|
85,295
|
$
|
1.525
|
$
|
80,302
|
$
|
1.412
|
For
the Three Months Ended September 30,
|
|||||||||||||||||||
2006
|
2005
|
||||||||||||||||||
Average
Balance
|
Interest
|
Yield/
Rate
|
Average
Balance
|
Interest
|
Yield/
Rate
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|||||||||||||
Interest-earning
assets:
|
|||||||||||||||||||
Federal
funds sold and securities purchased under reverse repurchase
agreements
|
$
|
25,205
|
$
|
346
|
5.45
|
%
|
$
|
31,152
|
$
|
287
|
3.66
|
%
|
|||||||
Securities
- taxable
|
1,062,270
|
10,710
|
4.00
|
%
|
1,341,939
|
13,358
|
3.95
|
%
|
|||||||||||
Securities
- nontaxable
|
150,790
|
2,773
|
7.30
|
%
|
154,886
|
2,846
|
7.29
|
%
|
|||||||||||
Loans,
including loans held for sale
|
6,336,043
|
113,477
|
7.11
|
%
|
5,914,589
|
92,604
|
6.21
|
%
|
|||||||||||
Total
interest-earning assets
|
7,574,308
|
127,306
|
6.67
|
%
|
7,442,566
|
109,095
|
5.82
|
%
|
|||||||||||
Cash
and due from banks
|
325,817
|
313,434
|
|||||||||||||||||
Other
assets
|
645,550
|
527,897
|
|||||||||||||||||
Allowance
for loan losses
|
(73,836
|
)
|
(66,120
|
)
|
|||||||||||||||
Total
Assets
|
$
|
8,471,839
|
$
|
8,217,777
|
|||||||||||||||
Liabilities
and Shareholders' Equity
|
|||||||||||||||||||
Interest-bearing
liabilities:
|
|||||||||||||||||||
Interest-bearing
deposits
|
$
|
5,122,909
|
41,781
|
3.24
|
%
|
$
|
4,316,518
|
21,415
|
1.97
|
%
|
|||||||||
Federal
funds purchased and securities sold under repurchase
agreements
|
432,486
|
4,896
|
4.49
|
%
|
637,923
|
5,050
|
3.14
|
%
|
|||||||||||
Borrowings
|
567,970
|
7,890
|
5.51
|
%
|
1,165,417
|
11,591
|
3.95
|
%
|
|||||||||||
Total
interest-bearing liabilities
|
6,123,365
|
54,567
|
3.54
|
%
|
6,119,858
|
38,056
|
2.47
|
%
|
|||||||||||
Noninterest-bearing
demand deposits
|
1,388,201
|
1,245,573
|
|||||||||||||||||
Other
liabilities
|
130,811
|
99,102
|
|||||||||||||||||
Shareholders'
equity
|
829,462
|
753,244
|
|||||||||||||||||
Total
Liabilities and Shareholders' Equity
|
$
|
8,471,839
|
$
|
8,217,777
|
|||||||||||||||
Net
Interest Margin
|
72,739
|
3.81
|
%
|
71,039
|
3.79
|
%
|
|||||||||||||
Less
tax equivalent adjustment
|
2,109
|
2,052
|
|||||||||||||||||
Net
Interest Margin per Consolidated Statements of
Income
|
$
|
70,630
|
$
|
68,987
|
For
the Nine Months Ended September 30,
|
|||||||||||||||||||
2006
|
2005
|
||||||||||||||||||
Average
Balance
|
Interest
|
Yield/
Rate
|
Average
Balance
|
Interest
|
Yield/
Rate
|
||||||||||||||
Assets
|
|||||||||||||||||||
Interest-earning
assets:
|
|||||||||||||||||||
Federal
funds sold and securities purchased under reverse repurchase
agreements
|
$
|
27,164
|
$
|
1,018
|
5.01
|
%
|
$
|
32,435
|
$
|
703
|
2.90
|
%
|
|||||||
Securities
- taxable
|
1,116,613
|
33,589
|
4.02
|
%
|
1,524,537
|
43,085
|
3.78
|
%
|
|||||||||||
Securities
- nontaxable
|
151,579
|
8,335
|
7.35
|
%
|
154,792
|
8,626
|
7.45
|
%
|
|||||||||||
Loans,
including loans held for sale
|
6,155,108
|
315,454
|
6.85
|
%
|
5,692,465
|
257,331
|
6.04
|
%
|
|||||||||||
Total
interest-earning assets
|
7,450,464
|
358,396
|
6.43
|
%
|
7,404,229
|
309,745
|
5.59
|
%
|
|||||||||||
Cash
and due from banks
|
325,067
|
334,988
|
|||||||||||||||||
Other
assets
|
592,634
|
530,551
|
|||||||||||||||||
Allowance
for loan losses
|
(74,786
|
)
|
(65,754
|
)
|
|||||||||||||||
Total
Assets
|
$
|
8,293,379
|
$
|
8,204,014
|
|||||||||||||||
Liabilities
and Shareholders' Equity
|
|||||||||||||||||||
Interest-bearing
liabilities:
|
|||||||||||||||||||
Interest-bearing
deposits
|
$
|
4,906,361
|
105,225
|
2.87
|
%
|
$
|
4,288,085
|
56,109
|
1.75
|
%
|
|||||||||
Federal
funds purchased and securities sold under repurchase
agreements
|
494,750
|
15,700
|
4.24
|
%
|
690,482
|
13,693
|
2.65
|
%
|
|||||||||||
Borrowings
|
607,377
|
22,552
|
4.96
|
%
|
1,115,280
|
28,501
|
3.42
|
%
|
|||||||||||
Total
interest-bearing liabilities
|
6,008,488
|
143,477
|
3.19
|
%
|
6,093,847
|
98,303
|
2.16
|
%
|
|||||||||||
Noninterest-bearing
demand deposits
|
1,379,921
|
1,274,571
|
|||||||||||||||||
Other
liabilities
|
112,366
|
82,766
|
|||||||||||||||||
Shareholders'
equity
|
792,604
|
752,830
|
|||||||||||||||||
Total
Liabilities and Shareholders' Equity
|
$
|
8,293,379
|
$
|
8,204,014
|
|||||||||||||||
Net
Interest Margin
|
214,919
|
3.86
|
%
|
211,442
|
3.82
|
%
|
|||||||||||||
Less
tax equivalent adjustment
|
6,430
|
6,137
|
|||||||||||||||||
Net
Interest Margin per Consolidated Statements of
Income
|
$
|
208,489
|
$
|
205,305
|
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
||||||||||||||||||||||||
2006
|
2005
|
$
Change
|
%
Change
|
2006
|
2005
|
$
Change
|
%
Change
|
||||||||||||||||||
Service
charges on deposit accounts
|
$
|
14,360
|
$
|
13,025
|
$
|
1,335
|
10.2
|
%
|
$
|
39,357
|
$
|
38,950
|
$
|
407
|
1.0
|
%
|
|||||||||
Insurance
commissions
|
8,935
|
9,294
|
(359
|
)
|
-3.9
|
%
|
26,002
|
25,526
|
476
|
1.9
|
%
|
||||||||||||||
Wealth
management
|
5,770
|
5,293
|
477
|
9.0
|
%
|
17,246
|
15,950
|
1,296
|
8.1
|
%
|
|||||||||||||||
General
banking - other
|
5,668
|
5,226
|
442
|
8.5
|
%
|
16,333
|
15,262
|
1,071
|
7.0
|
%
|
|||||||||||||||
Mortgage
banking, net
|
1,131
|
3,290
|
(2,159
|
)
|
-65.6
|
%
|
7,481
|
3,895
|
3,586
|
92.1
|
%
|
||||||||||||||
Other,
net
|
3,559
|
8,028
|
(4,469
|
)
|
-55.7
|
%
|
7,827
|
13,125
|
(5,298
|
)
|
-40.4
|
%
|
|||||||||||||
Securities
gains (losses)
|
645
|
45
|
600
|
n/m
|
1,895
|
(4,009
|
)
|
5,904
|
n/m
|
||||||||||||||||
Total
Noninterest Income
|
$
|
40,068
|
$
|
44,201
|
$
|
(4,133
|
)
|
-9.4
|
%
|
$
|
116,141
|
$
|
108,699
|
$
|
7,442
|
6.8
|
%
|
||||||||
n/m
- not meaningful
|
Mortgage
Banking Income
|
|||||||||||||||||||||||||
($
in thousands)
|
|||||||||||||||||||||||||
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
||||||||||||||||||||||||
2006
|
2005
|
$
Change
|
%
Change
|
2006
|
2005
|
$
Change
|
%
Change
|
||||||||||||||||||
Mortgage
servicing income, net
|
$
|
3,279
|
$
|
3,070
|
$
|
209
|
6.8
|
%
|
$
|
9,853
|
$
|
9,254
|
$
|
599
|
6.5
|
%
|
|||||||||
Change
in fair value MSR from market changes
|
(3,901
|
)
|
-
|
(3,901
|
)
|
n/m
|
2,113
|
-
|
2,113
|
n/m
|
|||||||||||||||
Change
in fair value MSR from runoff
|
(3,202
|
)
|
-
|
(3,202
|
)
|
n/m
|
(7,654
|
)
|
-
|
(7,654
|
)
|
n/m
|
|||||||||||||
Change
in fair value of derivatives
|
3,551
|
-
|
3,551
|
n/m
|
(886
|
)
|
-
|
(886
|
)
|
n/m
|
|||||||||||||||
Amortization
of MSR
|
-
|
(2,750
|
)
|
2,750
|
n/m
|
-
|
(7,990
|
)
|
7,990
|
n/m
|
|||||||||||||||
MSR
impairment
|
-
|
3,727
|
(3,727
|
)
|
n/m
|
-
|
1,638
|
(1,638
|
)
|
n/m
|
|||||||||||||||
Gain
on sale of loans
|
1,057
|
(64
|
)
|
1,121
|
n/m
|
3,711
|
644
|
3,067
|
n/m
|
||||||||||||||||
Other,
net
|
347
|
(693
|
)
|
1,040
|
n/m
|
344
|
349
|
(5
|
)
|
-1.4
|
%
|
||||||||||||||
Mortgage
Banking, net
|
$
|
1,131
|
$
|
3,290
|
$
|
(2,159
|
)
|
-65.6
|
%
|
$
|
7,481
|
$
|
3,895
|
$
|
3,586
|
92.1
|
%
|
||||||||
n/m
- not meaningful
|
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
||||||||||||||||||||||||
2006
|
2005
|
$
Change
|
%
Change
|
2006
|
2005
|
$
Change
|
%
Change
|
||||||||||||||||||
Salaries
and employee benefits
|
$
|
40,231
|
$
|
37,808
|
$
|
2,423
|
6.4
|
%
|
$
|
119,175
|
$
|
112,412
|
$
|
6,763
|
6.0
|
%
|
|||||||||
Services
and fees
|
9,240
|
8,269
|
971
|
11.7
|
%
|
26,983
|
25,331
|
1,652
|
6.5
|
%
|
|||||||||||||||
Net
occupancy - premises
|
4,479
|
3,956
|
523
|
13.2
|
%
|
12,433
|
11,308
|
1,125
|
9.9
|
%
|
|||||||||||||||
Equipment
expense
|
3,731
|
3,653
|
78
|
2.1
|
%
|
10,963
|
11,461
|
(498
|
)
|
-4.3
|
%
|
||||||||||||||
Other
expense
|
8,144
|
7,293
|
851
|
11.7
|
%
|
23,535
|
21,870
|
1,665
|
7.6
|
%
|
|||||||||||||||
Total
Noninterest Expense
|
$
|
65,825
|
$
|
60,979
|
$
|
4,846
|
7.9
|
%
|
$
|
193,089
|
$
|
182,382
|
$
|
10,707
|
5.9
|
%
|
|||||||||
September
30, 2006
|
|||||||||||||||||||
Actual
Regulatory Capital
|
Minimum
Regulatory
Capital
Required
|
Minimum
Regulatory Provision to be
Well
Capitalized
|
|||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||
Total
Capital (to Risk Weighted Assets)
|
|||||||||||||||||||
Trustmark
Corporation
|
$
|
698,868
|
10.34
|
%
|
$
|
540,491
|
8.00
|
%
|
n/a
|
n/a
|
|||||||||
Trustmark
National Bank
|
$
|
680,814
|
10.23
|
%
|
$
|
533,355
|
8.00
|
%
|
$
|
666,694
|
10.00
|
%
|
|||||||
Tier
1 Capital (to Risk Weighted Assets)
|
|||||||||||||||||||
Trustmark
Corporation
|
$
|
623,329
|
9.23
|
%
|
$
|
270,245
|
4.00
|
%
|
n/a
|
n/a
|
|||||||||
Trustmark
National Bank
|
$
|
611,944
|
9.20
|
%
|
$
|
266,677
|
4.00
|
%
|
$
|
400,016
|
6.00
|
%
|
|||||||
Tier
1 Capital (to Average Assets)
|
|||||||||||||||||||
Trustmark
Corporation
|
$
|
623,329
|
7.67
|
%
|
$
|
243,862
|
3.00
|
%
|
n/a
|
n/a
|
|||||||||
Trustmark
National Bank
|
$
|
611,944
|
7.67
|
%
|
$
|
239,887
|
3.00
|
%
|
$
|
399,811
|
5.00
|
%
|
September
30,
2006
|
December
31,
2005
|
||||||
Nonaccrual
and restructured loans
|
$
|
27,758
|
$
|
28,914
|
|||
Other
real estate (ORE)
|
3,284
|
4,107
|
|||||
Total
nonperforming assets
|
$
|
31,042
|
$
|
33,021
|
|||
Accruing
loans past due 90 days or more
|
$
|
3,721
|
$
|
2,719
|
|||
Serviced
GNMA loans eligible for repurchase
|
12,783
|
22,769
|
|||||
Total
loans past due over 90 days
|
$
|
16,504
|
$
|
25,488
|
|||
Nonperforming
assets/total loans and ORE
|
0.47
|
%
|
0.56
|
%
|
v
|
Rate
shocked scenarios of up-and-down 100, 200 and 300 basis
points.
|
v
|
Yield
curve twist of +/- two standard deviations of the change in spread
of the
three-month Treasury bill and the 10-year Treasury note
yields.
|
v
|
Basis
risk scenarios where federal funds/LIBOR spread widens and tightens
to the
high and low spread determined by using two standard
deviations.
|
v
|
Prepayment
risk scenarios where projected prepayment speeds in up-and-down
200 basis
point rate scenarios are compared to current projected prepayment
speeds.
|
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
ITEM
4.
|
CONTROLS
AND PROCEDURES
|
PART
II.
|
OTHER
INFORMATION
|
ITEM
1.
|
LEGAL
PROCEEDINGS
|
ITEM
1A.
|
RISK
FACTORS
|
•
|
the
risk that our hedging strategies are susceptible to prepayment
risk, basis
risk, market volatility and changes in the shape of the yield
curve;
|
•
|
the
risk that our hedging strategies rely on our assumptions and projections
regarding these assets and general market factors and that assumptions
may
prove to be incorrect;
|
•
|
the
risk that our hedging strategies do not adequately mitigate the
impact of
changes in interest rates or prepayment
speeds;
|
• |
the
risk that the valuation of MSR based on certain circumstances and
assumptions will not be realized due to differences in forecasted
inputs
within the model and the actual results and
|
•
|
the
risk that the models used to forecast hedge instruments may project
expectations that differ from actual
results.
|
ITEM
2.
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
|
Period
|
Total
Number
of
Shares
Purchased
|
Average
Price
Paid
Per
Share
|
Total
Number of
Shares
Purchased
as
Part of
Publicly
Announced
Plans
or
Programs
|
Maximum
Number
of
Shares that
May
Yet
be Purchased
Under
the Plans
or
Programs
|
|||||||||
July
1, 2006 through
July
31, 2006
|
43,000
|
$
|
29.66
|
43,000
|
2,792,334
|
||||||||
August
1, 2006 through
August
31, 2006
|
-
|
$
|
-
|
-
|
2,792,334
|
||||||||
September
1, 2006 through
September
30, 2006
|
-
|
$
|
-
|
-
|
2,792,334
|
||||||||
Total
|
43,000
|
43,000
|
ITEM
6.
|
EXHIBITS
|
BY:
|
/s/
Richard G. Hickson
|
BY:
|
/s/
Zach L. Wasson
|
||
|
Richard
G. Hickson
|
Zach
L. Wasson
|
|||
Chairman
of the Board, President
|
|
Treasurer
and
|
|||
&
Chief Executive Officer
|
|
Chief
Financial Officer
|
|||
DATE:
|
November
7, 2006
|
DATE:
|
November
7, 2006
|
Certification
of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
||
Certification
of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
||
Certification
of the Chief Executive Officer pursuant to 18 U.S.C. ss.
1350.
|
||
Certification
of the Chief Financial Officer pursuant to 18 U.S.C. ss.
1350.
|
||
All other exhibits are omitted, as they are inapplicable or not required by the related instructions. |