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Trustmark Corporation Announces Fourth Quarter and Fiscal Year 2023 Financial Results

Performance Reflects Continued Loan and Deposit Growth, Solid Credit Quality, and Diversified Revenue Base

Trustmark Corporation (NASDAQGS:TRMK) reported net income of $36.1 million in the fourth quarter of 2023, representing diluted earnings per share of $0.59. For the full year, Trustmark’s net income totaled $165.5 million, representing diluted earnings per share of $2.70. Trustmark’s net income in 2023 produced a return on average tangible equity of 14.04% and a return on average assets of 0.89%. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable March 15, 2024, to shareholders of record on March 1, 2024.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240123799186/en/

Printer friendly version of earnings release with consolidated financial statements and notes: https://www.businesswire.com/news/home/53886436/en

2023 Highlights

  • Loans held for investment (HFI) increased $746.5 million, or 6.1%, in 2023
  • Net charge-offs represented 0.06% of average loans in 2023
  • Deposits increased $1.1 billion, or 7.8%, in 2023
  • Net interest income (FTE) totaled $566.3 million, up 11.7% in 2023 to produce a net interest margin of 3.32%, up 15 basis points from 2022
  • Insurance revenue increased 7.2% while wealth management remained stable
  • Noninterest income totaled $207.0 million and represented 27.2% of total revenue
  • Total revenue increased $60.0 million, or 8.6%, to $759.8 million in 2023
  • Continued technology investments to enhance efficiency and productivity
  • Noninterest expense totaled $537.9 million in 2023; adjusted noninterest expense totaled $527.9 million, up 5.9% from the prior year; please refer to the Consolidated Financial Information Note 7 – Non-GAAP Financial Measures

Duane A. Dewey, President and CEO, commented, “We continued to make significant progress across the organization. Our performance reflected solid loan production and credit quality, and continued deposit growth in an increasingly competitive marketplace. We achieved double-digit growth in net interest income in 2023 while noninterest income continued to expand thanks in part to another record year in our insurance business and commendable results in our banking, mortgage banking and wealth management businesses. We have a tremendous team of associates focused on expanding customer relationships and demonstrating the value Trustmark can provide as their trusted financial partner. Looking forward, we will continue to pursue opportunities to redesign workflows and restructure the organization to further leverage investments in technology that will broaden our reach, enhance the customer experience, and improve efficiency. We remain focused on providing the financial services and advice our customers have come to expect while building long-term value for our shareholders.”

Balance Sheet Management

  • Loans HFI increased $140.3 million, or 1.1%, during the quarter
  • Total deposits increased $467.8 million, or 3.1%, linked-quarter
  • Maintained strong capital position with CET1 ratio of 10.04% and total risk-based capital ratio of 12.29%

Loans HFI totaled $13.0 billion at December 31, 2023, reflecting an increase of $140.3 million, or 1.1%, linked-quarter and $746.5 million, or 6.1%, year-over-year. The linked-quarter growth reflected increases in commercial and industrial loans, other real estate secured loans, other loans and leases, and state and other political subdivision loans offset in part by declines in construction, land development and other land loans, and loans secured by nonfarm, nonresidential properties. Trustmark’s loan portfolio remains well-diversified by loan type and geography.

Deposits totaled $15.6 billion at December 31, 2023, up $467.8 million, or 3.1%, from the prior quarter and up $1.1 billion, or 7.8%, year-over-year. Trustmark continues to maintain a strong liquidity position as loans HFI represented 83.2% of total deposits at year-end 2023. Noninterest-bearing deposits represented 20.5% of total deposits at December 31, 2023. Interest-bearing deposit costs totaled 2.67% for the fourth quarter, an increase of 28 basis points linked-quarter. The total cost of interest-bearing liabilities was 2.89% for the fourth quarter of 2023, an increase of 17 basis points from the prior quarter.

Trustmark did not repurchase any of its common shares in 2023. As previously announced, Trustmark’s Board of Directors authorized a stock repurchase program effective January 1, 2024, under which $50.0 million of Trustmark’s outstanding shares may be acquired through December 31, 2024. 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 December 31, 2023, Trustmark’s tangible equity to tangible assets ratio was 6.95%, while the total risk-based capital ratio was 12.29%. Tangible book value per share was $20.87 at December 31, 2023, up 7.7% from the prior quarter and 15.2% from the prior year.

Credit Quality

  • Net charge-offs totaled $2.2 million, representing 0.07% of average loans in the fourth quarter
  • Provision for credit losses for loans HFI was $7.6 million in the fourth quarter
  • Allowance for credit losses (ACL) represented 1.08% of loans HFI and 249.31% of nonperforming loans, excluding individually analyzed loans at year-end

Nonaccrual loans totaled $100.0 million at December 31, 2023, an increase of $9.1 million from the prior quarter and $34.0 million year-over-year. Other real estate totaled $6.9 million, reflecting increases of $1.4 million and $4.9 million from the prior quarter and prior year, respectively. Collectively, nonperforming assets totaled $106.9 million, representing 0.81% of loans HFI and held for sale (HFS) at December 31, 2023.

The provision for credit losses for loans HFI was $7.6 million in the fourth quarter and was primarily attributable to loan growth, net adjustments to the qualitative factors, and changes in the macroeconomic forecast. The provision for credit losses for off-balance sheet credit exposures was a negative $888 thousand in the fourth quarter. Collectively, the provision for credit losses totaled $6.7 million in the fourth quarter compared to $8.4 million in the prior quarter and $12.1 million in the fourth quarter of 2022.

Allocation of Trustmark’s $139.4 million ACL on loans HFI represented 0.85% of commercial loans and 1.81% of consumer and home mortgage loans, resulting in an ACL to total loans HFI of 1.08% at December 31, 2023. Management believes the level of the ACL is commensurate with the credit losses currently expected in the loan portfolio.

Revenue Generation

  • Net interest income (FTE) totaled $140.0 million in the fourth quarter, down 1.3% linked-quarter
  • Net interest margin totaled 3.25% in the fourth quarter, down 4 basis points from the prior quarter
  • Noninterest income totaled $49.8 million, representing 26.7% of total revenue in the fourth quarter

Revenue in the fourth quarter totaled $186.5 million, a decrease of 2.3% from the prior quarter and 2.7% from the same quarter in the prior year. The linked-quarter decrease reflects lower noninterest income and net interest income while the year-over-year decline reflects growth in noninterest income being more than offset by lower net interest income. In 2023, revenue totaled $759.8 million, an increase of 8.6% from the prior year.

Net interest income (FTE) in the fourth quarter totaled $140.0 million, resulting in a net interest margin of 3.25%, down 4 basis points from the prior quarter. The decrease in the net interest margin was primarily due to increased costs of interest-bearing liabilities, which was offset in part by higher yields on the loans HFI and HFS portfolio.

Noninterest income in the fourth quarter totaled $49.8 million, a decrease of $2.4 million from the prior quarter and an increase of $4.6 million from the prior year. The linked-quarter change reflects a seasonal decline in insurance revenue, as well as lower mortgage banking and wealth management revenue. The increase in noninterest income year-over-year was well diversified across all fee-based categories.

Mortgage loan production in the fourth quarter totaled $271.9 million, a decline of 30.3% linked-quarter and 30.4% year-over-year. Mortgage banking revenue totaled $5.5 million in the fourth quarter, a decrease of $939 thousand from the prior quarter and an increase of $2.1 million year-over-year. The linked-quarter decline is attributable to an increase in net negative hedge ineffectiveness. In 2023, mortgage loan production totaled $1.5 billion, down 31.6% from the prior year. Mortgage banking revenue totaled $26.2 million in 2023, down $2.1 million from the prior year.

Insurance revenue in the fourth quarter totaled $13.2 million, a seasonal decline of $2.1 million from the prior quarter and an increase of $1.2 million from the prior year. Insurance revenue in 2023 totaled $57.6 million, up $3.8 million, or 7.2%, from the prior year. The solid performance during the year reflects an expanded producer workforce, a hardening of the insurance market, and the realization of operational efficiencies from investments in technology and improved processes.

Wealth management revenue totaled $8.7 million in the fourth quarter, down 1.3% from the prior quarter and up 7.2% from the prior year. The linked-quarter decline is principally due to reduced trust management revenue offset in part by increased brokerage revenue while the year-over-year change is attributable to increased investment services revenue. In 2023, wealth management revenue totaled $35.1 million, in line with the prior year. During 2023, Trustmark selectively expanded its salesforce in the Houston, Mobile, Jackson, and Florida Panhandle markets.

Noninterest Expense

  • Total noninterest expense in the fourth quarter was $136.4 million; adjusted noninterest expense, which excludes ORE expense, amortization of intangibles, charitable contributions resulting in state tax credits, reduction in force expense, and litigation settlement expense, totaled $134.8 million, up $723 thousand from the prior quarter. Please refer to the Consolidated Financial Information Note 7 – Non-GAAP Financial Measures
  • FDIC assessment expense totaled $4.8 million in the fourth quarter, up $1.1 million, or 28.7%, from the prior quarter

Salaries and employee benefits expense in the fourth quarter totaled $78.0 million, an increase of $1.3 million, or 1.7% from the prior quarter. Excluding reduction in force expense related to restructuring initiatives of $1.4 million, salaries and benefits expense totaled $76.6 million, a decline of $69 thousand from the prior quarter. Total services and fees in the fourth quarter totaled $27.9 million, unchanged from the prior quarter. Net occupancy – premises expense during the fourth quarter totaled $7.4 million, unchanged from the prior quarter. Equipment expense declined 4.4% linked-quarter to total $6.5 million. Other expense increased $943 thousand, or 6.0%, linked-quarter principally due to increased FDIC assessment expense.

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, January 24, 2024, 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, February 7, 2024, in archived format at the same web address or by calling (877) 344-7529, passcode 6776577.

Trustmark is a financial services company providing banking and financial solutions through offices in Alabama, Florida, Georgia, Mississippi, Tennessee and Texas. Visit trustmark.com for more information.

Forward-Looking Statements

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

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, actions by the Board of Governors of the Federal Reserve System (FRB) that impact the level of market interest rates, 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 impacts related to or resulting from recent bank failures and other economic and industry volatility, including potential increased regulatory requirements and costs and potential impacts to macroeconomic conditions, 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 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
December 31, 2023
($ in thousands)
(unaudited)
Linked Quarter Year over Year
QUARTERLY AVERAGE BALANCES 12/31/2023 9/30/2023 12/31/2022 $ Change % Change $ Change % Change
Securities AFS-taxable

$

1,986,825

 

$

2,049,006

 

$

2,572,675

 

$

(62,181

)

-3.0

%

$

(585,850

)

-22.8

%

Securities AFS-nontaxable

 

4,246

 

 

4,779

 

 

4,828

 

 

(533

)

-11.2

%

 

(582

)

-12.1

%

Securities HTM-taxable

 

1,430,169

 

 

1,445,895

 

 

1,268,952

 

 

(15,726

)

-1.1

%

 

161,217

 

12.7

%

Securities HTM-nontaxable

 

340

 

 

907

 

 

4,514

 

 

(567

)

-62.5

%

 

(4,174

)

-92.5

%

Total securities

 

3,421,580

 

 

3,500,587

 

 

3,850,969

 

 

(79,007

)

-2.3

%

 

(429,389

)

-11.2

%

Paycheck protection program loans (PPP)

 

 

 

 

 

3,235

 

 

 

n/m

 

 

(3,235

)

-100.0

%

Loans (includes loans held for sale)

 

13,010,028

 

 

12,926,942

 

 

12,006,661

 

 

83,086

 

0.6

%

 

1,003,367

 

8.4

%

Fed funds sold and reverse repurchases

 

121

 

 

230

 

 

6,566

 

 

(109

)

-47.4

%

 

(6,445

)

-98.2

%

Other earning assets

 

670,477

 

 

682,644

 

 

375,190

 

 

(12,167

)

-1.8

%

 

295,287

 

78.7

%

Total earning assets

 

17,102,206

 

 

17,110,403

 

 

16,242,621

 

 

(8,197

)

0.0

%

 

859,585

 

5.3

%

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

 

(133,742

)

 

(127,915

)

 

(114,948

)

 

(5,827

)

-4.6

%

 

(18,794

)

-16.4

%

Other assets

 

1,749,069

 

 

1,721,310

 

 

1,630,085

 

 

27,759

 

1.6

%

 

118,984

 

7.3

%

Total assets

$

18,717,533

 

$

18,703,798

 

$

17,757,758

 

$

13,735

 

0.1

%

$

959,775

 

5.4

%

 
Interest-bearing demand deposits

$

5,053,935

 

$

4,875,714

 

$

4,719,303

 

$

178,221

 

3.7

%

$

334,632

 

7.1

%

Savings deposits

 

3,526,600

 

 

3,642,158

 

 

4,379,673

 

 

(115,558

)

-3.2

%

 

(853,073

)

-19.5

%

Time deposits

 

3,427,384

 

 

3,075,224

 

 

1,152,905

 

 

352,160

 

11.5

%

 

2,274,479

 

n/m

 

Total interest-bearing deposits

 

12,007,919

 

 

11,593,096

 

 

10,251,881

 

 

414,823

 

3.6

%

 

1,756,038

 

17.1

%

Fed funds purchased and repurchases

 

403,041

 

 

414,696

 

 

549,406

 

 

(11,655

)

-2.8

%

 

(146,365

)

-26.6

%

Other borrowings

 

590,765

 

 

912,151

 

 

530,993

 

 

(321,386

)

-35.2

%

 

59,772

 

11.3

%

Subordinated notes

 

123,446

 

 

123,391

 

 

123,226

 

 

55

 

0.0

%

 

220

 

0.2

%

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

 

0.0

%

 

 

0.0

%

Total interest-bearing liabilities

 

13,187,027

 

 

13,105,190

 

 

11,517,362

 

 

81,837

 

0.6

%

 

1,669,665

 

14.5

%

Noninterest-bearing deposits

 

3,296,351

 

 

3,429,815

 

 

4,177,113

 

 

(133,464

)

-3.9

%

 

(880,762

)

-21.1

%

Other liabilities

 

641,662

 

 

585,908

 

 

569,992

 

 

55,754

 

9.5

%

 

71,670

 

12.6

%

Total liabilities

 

17,125,040

 

 

17,120,913

 

 

16,264,467

 

 

4,127

 

0.0

%

 

860,573

 

5.3

%

Shareholders' equity

 

1,592,493

 

 

1,582,885

 

 

1,493,291

 

 

9,608

 

0.6

%

 

99,202

 

6.6

%

Total liabilities and equity

$

18,717,533

 

$

18,703,798

 

$

17,757,758

 

$

13,735

 

0.1

%

$

959,775

 

5.4

%

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

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2023
($ in thousands)
(unaudited)
 
Linked Quarter Year over Year
PERIOD END BALANCES 12/31/2023 9/30/2023 12/31/2022 $ Change % Change $ Change % Change
Cash and due from banks

$

975,543

 

$

750,492

 

$

734,787

 

$

225,051

 

30.0

%

$

240,756

 

32.8

%

Fed funds sold and reverse repurchases

 

 

 

 

 

4,000

 

 

 

n/m

 

 

(4,000

)

-100.0

%

Securities available for sale

 

1,762,878

 

 

1,766,174

 

 

2,024,082

 

 

(3,296

)

-0.2

%

 

(261,204

)

-12.9

%

Securities held to maturity

 

1,426,279

 

 

1,438,287

 

 

1,494,514

 

 

(12,008

)

-0.8

%

 

(68,235

)

-4.6

%

PPP loans

 

 

 

 

 

 

 

 

n/m

 

 

 

n/m

 

Loans held for sale (LHFS)

 

184,812

 

 

169,244

 

 

135,226

 

 

15,568

 

9.2

%

 

49,586

 

36.7

%

Loans held for investment (LHFI)

 

12,950,524

 

 

12,810,259

 

 

12,204,039

 

 

140,265

 

1.1

%

 

746,485

 

6.1

%

ACL LHFI

 

(139,367

)

 

(134,031

)

 

(120,214

)

 

(5,336

)

-4.0

%

 

(19,153

)

-15.9

%

Net LHFI

 

12,811,157

 

 

12,676,228

 

 

12,083,825

 

 

134,929

 

1.1

%

 

727,332

 

6.0

%

Premises and equipment, net

 

232,537

 

 

230,718

 

 

212,365

 

 

1,819

 

0.8

%

 

20,172

 

9.5

%

Mortgage servicing rights

 

131,870

 

 

142,379

 

 

129,677

 

 

(10,509

)

-7.4

%

 

2,193

 

1.7

%

Goodwill

 

384,237

 

 

384,237

 

 

384,237

 

 

 

0.0

%

 

 

0.0

%

Identifiable intangible assets

 

2,965

 

 

3,093

 

 

3,640

 

 

(128

)

-4.1

%

 

(675

)

-18.5

%

Other real estate

 

6,867

 

 

5,485

 

 

1,986

 

 

1,382

 

25.2

%

 

4,881

 

n/m

 

Operating lease right-of-use assets

 

38,142

 

 

39,639

 

 

36,301

 

 

(1,497

)

-3.8

%

 

1,841

 

5.1

%

Other assets

 

764,902

 

 

784,863

 

 

770,838

 

 

(19,961

)

-2.5

%

 

(5,936

)

-0.8

%

Total assets

$

18,722,189

 

$

18,390,839

 

$

18,015,478

 

$

331,350

 

1.8

%

$

706,711

 

3.9

%

 
Deposits:
Noninterest-bearing

$

3,197,620

 

$

3,320,124

 

$

4,093,771

 

$

(122,504

)

-3.7

%

$

(896,151

)

-21.9

%

Interest-bearing

 

12,372,143

 

 

11,781,799

 

 

10,343,877

 

 

590,344

 

5.0

%

 

2,028,266

 

19.6

%

Total deposits

 

15,569,763

 

 

15,101,923

 

 

14,437,648

 

 

467,840

 

3.1

%

 

1,132,115

 

7.8

%

Fed funds purchased and repurchases

 

405,745

 

 

321,799

 

 

449,331

 

 

83,946

 

26.1

%

 

(43,586

)

-9.7

%

Other borrowings

 

483,230

 

 

793,193

 

 

1,050,938

 

 

(309,963

)

-39.1

%

 

(567,708

)

-54.0

%

Subordinated notes

 

123,482

 

 

123,427

 

 

123,262

 

 

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

 

34,057

 

 

34,945

 

 

36,838

 

 

(888

)

-2.5

%

 

(2,781

)

-7.5

%

Operating lease liabilities

 

41,584

 

 

42,730

 

 

38,932

 

 

(1,146

)

-2.7

%

 

2,652

 

6.8

%

Other liabilities

 

340,625

 

 

340,615

 

 

324,405

 

 

10

 

0.0

%

 

16,220

 

5.0

%

Total liabilities

 

17,060,342

 

 

16,820,488

 

 

16,523,210

 

 

239,854

 

1.4

%

 

537,132

 

3.3

%

Common stock

 

12,725

 

 

12,724

 

 

12,705

 

 

1

 

0.0

%

 

20

 

0.2

%

Capital surplus

 

159,688

 

 

158,316

 

 

154,645

 

 

1,372

 

0.9

%

 

5,043

 

3.3

%

Retained earnings

 

1,709,157

 

 

1,687,199

 

 

1,600,321

 

 

21,958

 

1.3

%

 

108,836

 

6.8

%

Accumulated other comprehensive
income (loss), net of tax

 

(219,723

)

 

(287,888

)

 

(275,403

)

 

68,165

 

23.7

%

 

55,680

 

20.2

%

Total shareholders' equity

 

1,661,847

 

 

1,570,351

 

 

1,492,268

 

 

91,496

 

5.8

%

 

169,579

 

11.4

%

Total liabilities and equity

$

18,722,189

 

$

18,390,839

 

$

18,015,478

 

$

331,350

 

1.8

%

$

706,711

 

3.9

%

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

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2023
($ in thousands except per share data)
(unaudited)
 
Quarter Ended Linked Quarter Year over Year
INCOME STATEMENTS 12/31/2023 9/30/2023 12/31/2022 $ Change % Change $ Change % Change
Interest and fees on LHFS & LHFI-FTE

$

210,288

 

$

206,523

$

159,566

 

$

3,765

 

1.8

%

$

50,722

 

31.8

%

Interest and fees on PPP loans

 

 

 

 

101

 

 

 

n/m

 

 

(101

)

-100.0

%

Interest on securities-taxable

 

15,936

 

 

16,624

 

16,577

 

 

(688

)

-4.1

%

 

(641

)

-3.9

%

Interest on securities-tax exempt-FTE

 

44

 

 

58

 

93

 

 

(14

)

-24.1

%

 

(49

)

-52.7

%

Interest on fed funds sold and reverse
repurchases

 

2

 

 

3

 

71

 

 

(1

)

-33.3

%

 

(69

)

-97.2

%

Other interest income

 

9,918

 

 

8,613

 

3,556

 

 

1,305

 

15.2

%

 

6,362

 

n/m

 

Total interest income-FTE

 

236,188

 

 

231,821

 

179,964

 

 

4,367

 

1.9

%

 

56,224

 

31.2

%

Interest on deposits

 

80,847

 

 

69,797

 

18,438

 

 

11,050

 

15.8

%

 

62,409

 

n/m

 

Interest on fed funds purchased and repurchases

 

5,347

 

 

5,375

 

4,762

 

 

(28

)

-0.5

%

 

585

 

12.3

%

Other interest expense

 

9,946

 

 

14,713

 

6,730

 

 

(4,767

)

-32.4

%

 

3,216

 

47.8

%

Total interest expense

 

96,140

 

 

89,885

 

29,930

 

 

6,255

 

7.0

%

 

66,210

 

n/m

 

Net interest income-FTE

 

140,048

 

 

141,936

 

150,034

 

 

(1,888

)

-1.3

%

 

(9,986

)

-6.7

%

Provision for credit losses, LHFI

 

7,585

 

 

8,322

 

6,902

 

 

(737

)

-8.9

%

 

683

 

9.9

%

Provision for credit losses, off-balance sheet
credit exposures

 

(888

)

 

104

 

5,215

 

 

(992

)

n/m

 

 

(6,103

)

n/m

 

Net interest income after provision-FTE

 

133,351

 

 

133,510

 

137,917

 

 

(159

)

-0.1

%

 

(4,566

)

-3.3

%

Service charges on deposit accounts

 

11,311

 

 

11,074

 

11,162

 

 

237

 

2.1

%

 

149

 

1.3

%

Bank card and other fees

 

8,502

 

 

8,217

 

8,191

 

 

285

 

3.5

%

 

311

 

3.8

%

Mortgage banking, net

 

5,519

 

 

6,458

 

3,408

 

 

(939

)

-14.5

%

 

2,111

 

61.9

%

Insurance commissions

 

13,197

 

 

15,303

 

12,019

 

 

(2,106

)

-13.8

%

 

1,178

 

9.8

%

Wealth management

 

8,657

 

 

8,773

 

8,079

 

 

(116

)

-1.3

%

 

578

 

7.2

%

Other, net

 

2,579

 

 

2,399

 

2,311

 

 

180

 

7.5

%

 

268

 

11.6

%

Securities gains (losses), net

 

39

 

 

 

 

 

39

 

n/m

 

 

39

 

n/m

 

Total noninterest income

 

49,804

 

 

52,224

 

45,170

 

 

(2,420

)

-4.6

%

 

4,634

 

10.3

%

Salaries and employee benefits

 

78,003

 

 

76,666

 

73,469

 

 

1,337

 

1.7

%

 

4,534

 

6.2

%

Services and fees (2)

 

27,906

 

 

27,882

 

27,709

 

 

24

 

0.1

%

 

197

 

0.7

%

Net occupancy-premises

 

7,362

 

 

7,383

 

7,898

 

 

(21

)

-0.3

%

 

(536

)

-6.8

%

Equipment expense

 

6,517

 

 

6,816

 

6,268

 

 

(299

)

-4.4

%

 

249

 

4.0

%

Litigation settlement expense (1)

 

 

 

6,500

 

100,750

 

 

(6,500

)

-100.0

%

 

(100,750

)

-100.0

%

Other expense (2)

 

16,641

 

 

15,698

 

15,135

 

 

943

 

6.0

%

 

1,506

 

10.0

%

Total noninterest expense

 

136,429

 

 

140,945

 

231,229

 

 

(4,516

)

-3.2

%

 

(94,800

)

-41.0

%

Income (loss) before income taxes and tax eq adj

 

46,726

 

 

44,789

 

(48,142

)

 

1,937

 

4.3

%

 

94,868

 

n/m

 

Tax equivalent adjustment

 

3,306

 

 

3,299

 

3,451

 

 

7

 

0.2

%

 

(145

)

-4.2

%

Income (loss) before income taxes

 

43,420

 

 

41,490

 

(51,593

)

 

1,930

 

4.7

%

 

95,013

 

n/m

 

Income taxes

 

7,297

 

 

7,461

 

(17,530

)

 

(164

)

-2.2

%

 

24,827

 

n/m

 

Net income (loss)

$

36,123

 

$

34,029

$

(34,063

)

$

2,094

 

6.2

%

$

70,186

 

n/m

 

 
Per share data
Earnings (loss) per share - basic

$

0.59

 

$

0.56

$

(0.56

)

$

0.03

 

5.4

%

$

1.15

 

n/m

 

 
Earnings (loss) per share - diluted

$

0.59

 

$

0.56

$

(0.56

)

$

0.03

 

5.4

%

$

1.15

 

n/m

 

 
Dividends per share

$

0.23

 

$

0.23

$

0.23

 

 

 

0.0

%

 

 

0.0

%

 
Weighted average shares outstanding
Basic

 

61,070,481

 

 

61,069,750

 

60,969,400

 

 
Diluted

 

61,296,840

 

 

61,263,032

 

61,173,249

 

 
Period end shares outstanding

 

61,071,173

 

 

61,070,095

 

60,977,686

 

 
(1) See Note 1 - Litigation Settlement in the Notes to Consolidated Financials for additional information.
(2) During the first quarter of 2023, Trustmark reclassified its debit card transaction fees from other expense to services and fees. Prior periods have been reclassified accordingly.
 
n/m - percentage changes greater than +/- 100% are considered not meaningful

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2023
($ in thousands)
(unaudited)
Quarter Ended Linked Quarter Year over Year
NONPERFORMING ASSETS (1) 12/31/2023 9/30/2023 12/31/2022 $ Change % Change $ Change % Change
Nonaccrual LHFI
Alabama (2)

$

23,271

 

$

23,530

 

$

12,300

 

$

(259

)

-1.1

%

$

10,971

 

89.2

%

Florida

 

170

 

 

151

 

 

227

 

 

19

 

12.6

%

 

(57

)

-25.1

%

Mississippi (3)

 

54,615

 

 

45,050

 

 

24,683

 

 

9,565

 

21.2

%

 

29,932

 

n/m

 

Tennessee (4)

 

1,802

 

 

1,841

 

 

5,566

 

 

(39

)

-2.1

%

 

(3,764

)

-67.6

%

Texas

 

20,150

 

 

20,327

 

 

23,196

 

 

(177

)

-0.9

%

 

(3,046

)

-13.1

%

Total nonaccrual LHFI

 

100,008

 

 

90,899

 

 

65,972

 

 

9,109

 

10.0

%

 

34,036

 

51.6

%

Other real estate
Alabama (2)

 

1,397

 

 

315

 

 

194

 

 

1,082

 

n/m

 

 

1,203

 

n/m

 

Mississippi (3)

 

1,242

 

 

942

 

 

1,769

 

 

300

 

31.8

%

 

(527

)

-29.8

%

Tennessee (4)

 

 

 

 

 

23

 

 

 

n/m

 

 

(23

)

-100.0

%

Texas

 

4,228

 

 

4,228

 

 

 

 

 

0.0

%

 

4,228

 

n/m

 

Total other real estate

 

6,867

 

 

5,485

 

 

1,986

 

 

1,382

 

25.2

%

 

4,881

 

n/m

 

Total nonperforming assets

$

106,875

 

$

96,384

 

$

67,958

 

$

10,491

 

10.9

%

$

38,917

 

57.3

%

 
LOANS PAST DUE OVER 90 DAYS (1)
LHFI

$

5,790

 

$

3,804

 

$

3,929

 

$

1,986

 

52.2

%

$

1,861

 

47.4

%

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

$

51,243

 

$

42,532

 

$

49,320

 

$

8,711

 

20.5

%

$

1,923

 

3.9

%

 
Quarter Ended Linked Quarter Year over Year
ACL LHFI (1) 12/31/2023 9/30/2023 12/31/2022 $ Change % Change $ Change % Change
Beginning Balance

$

134,031

 

$

129,298

 

$

115,050

 

$

4,733

 

3.7

%

$

18,981

 

16.5

%

Provision for credit losses, LHFI

 

7,585

 

 

8,322

 

 

6,902

 

 

(737

)

-8.9

%

 

683

 

9.9

%

Charge-offs

 

(4,250

)

 

(7,496

)

 

(3,893

)

 

3,246

 

43.3

%

 

(357

)

-9.2

%

Recoveries

 

2,001

 

 

3,907

 

 

2,155

 

 

(1,906

)

-48.8

%

 

(154

)

-7.1

%

Net (charge-offs) recoveries

 

(2,249

)

 

(3,589

)

 

(1,738

)

 

1,340

 

37.3

%

 

(511

)

-29.4

%

Ending Balance

$

139,367

 

$

134,031

 

$

120,214

 

$

5,336

 

4.0

%

$

19,153

 

15.9

%

 
NET (CHARGE-OFFS) RECOVERIES (1)
Alabama (2)

$

(299

)

$

(165

)

$

98

 

$

(134

)

-81.2

%

$

(397

)

n/m

 

Florida

 

180

 

 

21

 

 

(60

)

 

159

 

n/m

 

 

240

 

n/m

 

Mississippi (3)

 

(1,943

)

 

(1,867

)

 

(1,657

)

 

(76

)

-4.1

%

 

(286

)

-17.3

%

Tennessee (4)

 

(193

)

 

2,127

 

 

(195

)

 

(2,320

)

n/m

 

 

2

 

-1.0

%

Texas

 

6

 

 

(3,705

)

 

76

 

 

3,711

 

n/m

 

 

(70

)

-92.1

%

Total net (charge-offs) recoveries

$

(2,249

)

$

(3,589

)

$

(1,738

)

$

1,340

 

37.3

%

$

(511

)

-29.4

%

 
(1) Excludes PPP loans.
(2) Alabama includes the Georgia Loan Production Office.
(3) Mississippi includes Central and Southern Mississippi Regions.
(4) 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
December 31, 2023
($ in thousands)
(unaudited)
Quarter Ended Year Ended
AVERAGE BALANCES 12/31/2023 9/30/2023 6/30/2023 3/31/2023 12/31/2022 12/31/2023 12/31/2022
Securities AFS-taxable

$

1,986,825

 

$

2,049,006

 

$

2,140,505

 

$

2,187,121

 

$

2,572,675

 

$

2,090,201

 

$

2,932,054

 

Securities AFS-nontaxable

 

4,246

 

 

4,779

 

 

4,796

 

 

4,812

 

 

4,828

 

 

4,657

 

 

4,997

 

Securities HTM-taxable

 

1,430,169

 

 

1,445,895

 

 

1,463,086

 

 

1,479,283

 

 

1,268,952

 

 

1,454,450

 

 

911,010

 

Securities HTM-nontaxable

 

340

 

 

907

 

 

1,718

 

 

4,509

 

 

4,514

 

 

1,854

 

 

5,623

 

Total securities

 

3,421,580

 

 

3,500,587

 

 

3,610,105

 

 

3,675,725

 

 

3,850,969

 

 

3,551,162

 

 

3,853,684

 

PPP loans

 

 

 

 

 

 

 

 

 

3,235

 

 

 

 

14,868

 

Loans (includes loans held for sale)

 

13,010,028

 

 

12,926,942

 

 

12,732,057

 

 

12,530,449

 

 

12,006,661

 

 

12,801,531

 

 

11,236,388

 

Fed funds sold and reverse repurchases

 

121

 

 

230

 

 

3,275

 

 

2,379

 

 

6,566

 

 

1,492

 

 

1,753

 

Other earning assets

 

670,477

 

 

682,644

 

 

903,027

 

 

647,760

 

 

375,190

 

 

728,181

 

 

907,414

 

Total earning assets

 

17,102,206

 

 

17,110,403

 

 

17,248,464

 

 

16,856,313

 

 

16,242,621

 

 

17,082,366

 

 

16,014,107

 

ACL LHFI

 

(133,742

)

 

(127,915

)

 

(121,960

)

 

(119,978

)

 

(114,948

)

 

(125,942

)

 

(104,138

)

Other assets

 

1,749,069

 

 

1,721,310

 

 

1,648,583

 

 

1,762,449

 

 

1,630,085

 

 

1,718,058

 

 

1,567,921

 

Total assets

$

18,717,533

 

$

18,703,798

 

$

18,775,087

 

$

18,498,784

 

$

17,757,758

 

$

18,674,482

 

$

17,477,890

 

 
Interest-bearing demand deposits

$

5,053,935

 

$

4,875,714

 

$

4,803,737

 

$

4,751,154

 

$

4,719,303

 

$

4,871,977

 

$

4,585,955

 

Savings deposits

 

3,526,600

 

 

3,642,158

 

 

4,002,134

 

 

4,193,764

 

 

4,379,673

 

 

3,838,791

 

 

4,579,742

 

Time deposits

 

3,427,384

 

 

3,075,224

 

 

2,335,752

 

 

1,907,449

 

 

1,152,905

 

 

2,691,682

 

 

1,153,983

 

Total interest-bearing deposits

 

12,007,919

 

 

11,593,096

 

 

11,141,623

 

 

10,852,367

 

 

10,251,881

 

 

11,402,450

 

 

10,319,680

 

Fed funds purchased and repurchases

 

403,041

 

 

414,696

 

 

389,834

 

 

436,535

 

 

549,406

 

 

410,945

 

 

283,328

 

Other borrowings

 

590,765

 

 

912,151

 

 

1,330,010

 

 

1,110,843

 

 

530,993

 

 

984,315

 

 

198,672

 

Subordinated notes

 

123,446

 

 

123,391

 

 

123,337

 

 

123,281

 

 

123,226

 

 

123,364

 

 

123,144

 

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

Total interest-bearing liabilities

 

13,187,027

 

 

13,105,190

 

 

13,046,660

 

 

12,584,882

 

 

11,517,362

 

 

12,982,930

 

 

10,986,680

 

Noninterest-bearing deposits

 

3,296,351

 

 

3,429,815

 

 

3,595,927

 

 

3,813,248

 

 

4,177,113

 

 

3,532,134

 

 

4,452,046

 

Other liabilities

 

641,662

 

 

585,908

 

 

552,209

 

 

576,826

 

 

569,992

 

 

589,320

 

 

434,310

 

Total liabilities

 

17,125,040

 

 

17,120,913

 

 

17,194,796

 

 

16,974,956

 

 

16,264,467

 

 

17,104,384

 

 

15,873,036

 

Shareholders' equity

 

1,592,493

 

 

1,582,885

 

 

1,580,291

 

 

1,523,828

 

 

1,493,291

 

 

1,570,098

 

 

1,604,854

 

Total liabilities and equity

$

18,717,533

 

$

18,703,798

 

$

18,775,087

 

$

18,498,784

 

$

17,757,758

 

$

18,674,482

 

$

17,477,890

 

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2023
($ in thousands)
(unaudited)
 
PERIOD END BALANCES 12/31/2023 9/30/2023 6/30/2023 3/31/2023 12/31/2022
Cash and due from banks

$

975,543

 

$

750,492

 

$

832,052

 

$

1,297,144

 

$

734,787

 

Fed funds sold and reverse repurchases

 

 

 

 

 

 

 

 

 

4,000

 

Securities available for sale

 

1,762,878

 

 

1,766,174

 

 

1,871,883

 

 

1,984,162

 

 

2,024,082

 

Securities held to maturity

 

1,426,279

 

 

1,438,287

 

 

1,458,665

 

 

1,474,338

 

 

1,494,514

 

PPP loans

 

 

 

 

 

 

 

 

 

 

LHFS

 

184,812

 

 

169,244

 

 

181,094

 

 

175,926

 

 

135,226

 

LHFI

 

12,950,524

 

 

12,810,259

 

 

12,613,967

 

 

12,497,195

 

 

12,204,039

 

ACL LHFI

 

(139,367

)

 

(134,031

)

 

(129,298

)

 

(122,239

)

 

(120,214

)

Net LHFI

 

12,811,157

 

 

12,676,228

 

 

12,484,669

 

 

12,374,956

 

 

12,083,825

 

Premises and equipment, net

 

232,537

 

 

230,718

 

 

227,630

 

 

223,975

 

 

212,365

 

Mortgage servicing rights

 

131,870

 

 

142,379

 

 

134,350

 

 

127,206

 

 

129,677

 

Goodwill

 

384,237

 

 

384,237

 

 

384,237

 

 

384,237

 

 

384,237

 

Identifiable intangible assets

 

2,965

 

 

3,093

 

 

3,222

 

 

3,352

 

 

3,640

 

Other real estate

 

6,867

 

 

5,485

 

 

1,137

 

 

1,684

 

 

1,986

 

Operating lease right-of-use assets

 

38,142

 

 

39,639

 

 

38,179

 

 

35,315

 

 

36,301

 

Other assets

 

764,902

 

 

784,863

 

 

805,508

 

 

794,883

 

 

770,838

 

Total assets

$

18,722,189

 

$

18,390,839

 

$

18,422,626

 

$

18,877,178

 

$

18,015,478

 

 
Deposits:
Noninterest-bearing

$

3,197,620

 

$

3,320,124

 

$

3,461,073

 

$

3,797,055

 

$

4,093,771

 

Interest-bearing

 

12,372,143

 

 

11,781,799

 

 

11,452,827

 

 

10,986,606

 

 

10,343,877

 

Total deposits

 

15,569,763

 

 

15,101,923

 

 

14,913,900

 

 

14,783,661

 

 

14,437,648

 

Fed funds purchased and repurchases

 

405,745

 

 

321,799

 

 

311,179

 

 

477,980

 

 

449,331

 

Other borrowings

 

483,230

 

 

793,193

 

 

1,056,714

 

 

1,485,181

 

 

1,050,938

 

Subordinated notes

 

123,482

 

 

123,427

 

 

123,372

 

 

123,317

 

 

123,262

 

Junior subordinated debt securities

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

 

61,856

 

ACL on off-balance sheet credit exposures

 

34,057

 

 

34,945

 

 

34,841

 

 

34,596

 

 

36,838

 

Operating lease liabilities

 

41,584

 

 

42,730

 

 

40,845

 

 

37,988

 

 

38,932

 

Other liabilities

 

340,625

 

 

340,615

 

 

308,726

 

 

310,500

 

 

324,405

 

Total liabilities

 

17,060,342

 

 

16,820,488

 

 

16,851,433

 

 

17,315,079

 

 

16,523,210

 

Common stock

 

12,725

 

 

12,724

 

 

12,724

 

 

12,720

 

 

12,705

 

Capital surplus

 

159,688

 

 

158,316

 

 

156,834

 

 

155,297

 

 

154,645

 

Retained earnings

 

1,709,157

 

 

1,687,199

 

 

1,667,339

 

 

1,636,463

 

 

1,600,321

 

Accumulated other comprehensive income (loss),
net of tax

 

(219,723

)

 

(287,888

)

 

(265,704

)

 

(242,381

)

 

(275,403

)

Total shareholders' equity

 

1,661,847

 

 

1,570,351

 

 

1,571,193

 

 

1,562,099

 

 

1,492,268

 

Total liabilities and equity

$

18,722,189

 

$

18,390,839

 

$

18,422,626

 

$

18,877,178

 

$

18,015,478

 

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2023
($ in thousands except per share data)
(unaudited)
 
Quarter Ended Year Ended
INCOME STATEMENTS 12/31/2023 9/30/2023 6/30/2023 3/31/2023 12/31/2022 12/31/2023 12/31/2022
Interest and fees on LHFS & LHFI-FTE

$

210,288

 

$

206,523

$

192,941

$

178,967

 

$

159,566

 

$

788,719

 

$

485,246

Interest and fees on PPP loans

 

 

 

 

 

 

 

101

 

 

 

 

639

Interest on securities-taxable

 

15,936

 

 

16,624

 

16,779

 

16,761

 

 

16,577

 

 

66,100

 

 

59,717

Interest on securities-tax exempt-FTE

 

44

 

 

58

 

69

 

92

 

 

93

 

 

263

 

 

422

Interest on fed funds sold and reverse repurchases

 

2

 

 

3

 

45

 

30

 

 

71

 

 

80

 

 

74

Other interest income

 

9,918

 

 

8,613

 

12,077

 

6,527

 

 

3,556

 

 

37,135

 

 

8,080

Total interest income-FTE

 

236,188

 

 

231,821

 

221,911

 

202,377

 

 

179,964

 

 

892,297

 

 

554,178

Interest on deposits

 

80,847

 

 

69,797

 

54,409

 

40,898

 

 

18,438

 

 

245,951

 

 

29,069

Interest on fed funds purchased and repurchases

 

5,347

 

 

5,375

 

4,865

 

4,832

 

 

4,762

 

 

20,419

 

 

6,127

Other interest expense

 

9,946

 

 

14,713

 

19,350

 

15,575

 

 

6,730

 

 

59,584

 

 

11,929

Total interest expense

 

96,140

 

 

89,885

 

78,624

 

61,305

 

 

29,930

 

 

325,954

 

 

47,125

Net interest income-FTE

 

140,048

 

 

141,936

 

143,287

 

141,072

 

 

150,034

 

 

566,343

 

 

507,053

Provision for credit losses, LHFI

 

7,585

 

 

8,322

 

8,211

 

3,244

 

 

6,902

 

 

27,362

 

 

21,677

Provision for credit losses, off-balance sheet
credit exposures

 

(888

)

 

104

 

245

 

(2,242

)

 

5,215

 

 

(2,781

)

 

1,215

Net interest income after provision-FTE

 

133,351

 

 

133,510

 

134,831

 

140,070

 

 

137,917

 

 

541,762

 

 

484,161

Service charges on deposit accounts

 

11,311

 

 

11,074

 

10,695

 

10,336

 

 

11,162

 

 

43,416

 

 

42,157

Bank card and other fees

 

8,502

 

 

8,217

 

8,917

 

7,803

 

 

8,191

 

 

33,439

 

 

36,105

Mortgage banking, net

 

5,519

 

 

6,458

 

6,600

 

7,639

 

 

3,408

 

 

26,216

 

 

28,306

Insurance commissions

 

13,197

 

 

15,303

 

14,764

 

14,305

 

 

12,019

 

 

57,569

 

 

53,721

Wealth management

 

8,657

 

 

8,773

 

8,882

 

8,780

 

 

8,079

 

 

35,092

 

 

35,013

Other, net

 

2,579

 

 

2,399

 

3,695

 

2,514

 

 

2,311

 

 

11,187

 

 

9,842

Securities gains (losses), net

 

39

 

 

 

 

 

 

 

 

39

 

 

Total noninterest income

 

49,804

 

 

52,224

 

53,553

 

51,377

 

 

45,170

 

 

206,958

 

 

205,144

Salaries and employee benefits

 

78,003

 

 

76,666

 

75,940

 

74,056

 

 

73,469

 

 

304,665

 

 

287,440

Services and fees (2)

 

27,906

 

 

27,882

 

28,264

 

25,426

 

 

27,709

 

 

109,478

 

 

105,469

Net occupancy-premises

 

7,362

 

 

7,383

 

7,108

 

7,629

 

 

7,898

 

 

29,482

 

 

29,264

Equipment expense

 

6,517

 

 

6,816

 

6,404

 

6,405

 

 

6,268

 

 

26,142

 

 

24,448

Litigation settlement expense (1)

 

 

 

6,500

 

 

 

 

100,750

 

 

6,500

 

 

100,750

Other expense (2)

 

16,641

 

 

15,698

 

14,502

 

14,811

 

 

15,135

 

 

61,652

 

 

55,842

Total noninterest expense

 

136,429

 

 

140,945

 

132,218

 

128,327

 

 

231,229

 

 

537,919

 

 

603,213

Income (loss) before income taxes and tax eq adj

 

46,726

 

 

44,789

 

56,166

 

63,120

 

 

(48,142

)

 

210,801

 

 

86,092

Tax equivalent adjustment

 

3,306

 

 

3,299

 

3,383

 

3,477

 

 

3,451

 

 

13,465

 

 

12,345

Income (loss) before income taxes

 

43,420

 

 

41,490

 

52,783

 

59,643

 

 

(51,593

)

 

197,336

 

 

73,747

Income taxes

 

7,297

 

 

7,461

 

7,746

 

9,343

 

 

(17,530

)

 

31,847

 

 

1,860

Net income (loss)

$

36,123

 

$

34,029

$

45,037

$

50,300

 

$

(34,063

)

$

165,489

 

$

71,887

 
Per share data
Earnings (loss) per share - basic

$

0.59

 

$

0.56

$

0.74

$

0.82

 

$

(0.56

)

$

2.71

 

$

1.17

 
Earnings (loss) per share - diluted

$

0.59

 

$

0.56

$

0.74

$

0.82

 

$

(0.56

)

$

2.70

 

$

1.17

 
Dividends per share

$

0.23

 

$

0.23

$

0.23

$

0.23

 

$

0.23

 

$

0.92

 

$

0.92

 
Weighted average shares outstanding
Basic

 

61,070,481

 

 

61,069,750

 

61,063,277

 

61,011,059

 

 

60,969,400

 

 

61,053,849

 

 

61,242,358

 
Diluted

 

61,296,840

 

 

61,263,032

 

61,230,031

 

61,193,275

 

 

61,173,249

 

 

61,230,621

 

 

61,431,726

 
Period end shares outstanding

 

61,071,173

 

 

61,070,095

 

61,069,036

 

61,048,516

 

 

60,977,686

 

 

61,071,173

 

 

60,977,686

 
(1) See Note 1 - Litigation Settlement in the Notes to Consolidated Financials for additional information.
(2) During the first quarter of 2023, Trustmark reclassified its debit card transaction fees from other expense to services and fees. Prior periods have been reclassified accordingly.

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2023
($ in thousands)
(unaudited)
 
 
Quarter Ended
NONPERFORMING ASSETS (1) 12/31/2023 9/30/2023 6/30/2023 3/31/2023 12/31/2022
Nonaccrual LHFI
Alabama (2)

$

23,271

 

$

23,530

 

$

11,058

 

$

10,919

 

$

12,300

 

Florida

 

170

 

 

151

 

 

334

 

 

256

 

 

227

 

Mississippi (3)

 

54,615

 

 

45,050

 

 

36,288

 

 

32,560

 

 

24,683

 

Tennessee (4)

 

1,802

 

 

1,841

 

 

5,088

 

 

5,416

 

 

5,566

 

Texas

 

20,150

 

 

20,327

 

 

22,259

 

 

23,224

 

 

23,196

 

Total nonaccrual LHFI

 

100,008

 

 

90,899

 

 

75,027

 

 

72,375

 

 

65,972

 

Other real estate
Alabama (2)

 

1,397

 

 

315

 

 

 

 

 

 

194

 

Mississippi (3)

 

1,242

 

 

942

 

 

1,137

 

 

1,495

 

 

1,769

 

Tennessee (4)

 

 

 

 

 

 

 

189

 

 

23

 

Texas

 

4,228

 

 

4,228

 

 

 

 

 

 

 

Total other real estate

 

6,867

 

 

5,485

 

 

1,137

 

 

1,684

 

 

1,986

 

Total nonperforming assets

$

106,875

 

$

96,384

 

$

76,164

 

$

74,059

 

$

67,958

 

 
LOANS PAST DUE OVER 90 DAYS (1)
LHFI

$

5,790

 

$

3,804

 

$

3,911

 

$

2,255

 

$

3,929

 

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

$

51,243

 

$

42,532

 

$

35,766

 

$

41,468

 

$

49,320

 

 
 
Quarter Ended Year Ended
ACL LHFI (1) 12/31/2023 9/30/2023 6/30/2023 3/31/2023 12/31/2022 12/31/2023 12/31/2022
Beginning Balance

$

134,031

 

$

129,298

 

$

122,239

 

$

120,214

 

$

115,050

 

$

120,214

 

$

99,457

 

Provision for credit losses, LHFI

 

7,585

 

 

8,322

 

 

8,211

 

 

3,244

 

 

6,902

 

 

27,362

 

 

21,677

 

Charge-offs

 

(4,250

)

 

(7,496

)

 

(2,773

)

 

(2,996

)

 

(3,893

)

 

(17,515

)

 

(11,332

)

Recoveries

 

2,001

 

 

3,907

 

 

1,621

 

 

1,777

 

 

2,155

 

 

9,306

 

 

10,412

 

Net (charge-offs) recoveries

 

(2,249

)

 

(3,589

)

 

(1,152

)

 

(1,219

)

 

(1,738

)

 

(8,209

)

 

(920

)

Ending Balance

$

139,367

 

$

134,031

 

$

129,298

 

$

122,239

 

$

120,214

 

$

139,367

 

$

120,214

 

 
NET (CHARGE-OFFS) RECOVERIES (1)
Alabama (2)

$

(299

)

$

(165

)

$

(141

)

$

(268

)

$

98

 

$

(873

)

$

2,019

 

Florida

 

180

 

 

21

 

 

(35

)

 

(36

)

 

(60

)

 

130

 

 

652

 

Mississippi (3)

 

(1,943

)

 

(1,867

)

 

(762

)

 

(775

)

 

(1,657

)

 

(5,347

)

 

(2,713

)

Tennessee (4)

 

(193

)

 

2,127

 

 

(166

)

 

(124

)

 

(195

)

 

1,644

 

 

(790

)

Texas

 

6

 

 

(3,705

)

 

(48

)

 

(16

)

 

76

 

 

(3,763

)

 

(88

)

Total net (charge-offs) recoveries

$

(2,249

)

$

(3,589

)

$

(1,152

)

$

(1,219

)

$

(1,738

)

$

(8,209

)

$

(920

)

 
(1) Excludes PPP loans.
(2) Alabama includes the Georgia Loan Production Office.
(3) Mississippi includes Central and Southern Mississippi Regions.
(4) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2023
($ in thousands)
(unaudited)
 
Quarter Ended Year Ended
FINANCIAL RATIOS AND OTHER DATA 12/31/2023 9/30/2023 6/30/2023 3/31/2023 12/31/2022 12/31/2023 12/31/2022
Return on average equity

 

9.00

%

 

8.53

%

 

11.43

%

 

13.39

%

 

-9.05

%

10.54

%

4.48

%

Return on average tangible equity

 

11.92

%

 

11.32

%

 

15.18

%

 

18.03

%

 

-12.14

%

14.04

%

6.00

%

Return on average assets

 

0.77

%

 

0.72

%

 

0.96

%

 

1.10

%

 

-0.76

%

0.89

%

0.41

%

Interest margin - Yield - FTE

 

5.48

%

 

5.38

%

 

5.16

%

 

4.87

%

 

4.40

%

5.22

%

3.46

%

Interest margin - Cost

 

2.23

%

 

2.08

%

 

1.83

%

 

1.47

%

 

0.73

%

1.91

%

0.29

%

Net interest margin - FTE

 

3.25

%

 

3.29

%

 

3.33

%

 

3.39

%

 

3.66

%

3.32

%

3.17

%

Efficiency ratio (1)

 

70.25

%

 

68.33

%

 

66.17

%

 

65.60

%

 

65.85

%

67.57

%

69.37

%

Full-time equivalent employees

 

2,757

 

 

2,756

 

 

2,761

 

 

2,758

 

 

2,738

 

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

 

0.07

%

 

0.11

%

 

0.04

%

 

0.04

%

 

0.06

%

0.06

%

0.01

%

Provision for credit losses, LHFI / average loans

 

0.23

%

 

0.26

%

 

0.26

%

 

0.10

%

 

0.23

%

0.21

%

0.19

%

Nonaccrual LHFI / (LHFI + LHFS)

 

0.76

%

 

0.70

%

 

0.59

%

 

0.57

%

 

0.53

%

Nonperforming assets / (LHFI + LHFS)

 

0.81

%

 

0.74

%

 

0.60

%

 

0.58

%

 

0.55

%

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

 

0.81

%

 

0.74

%

 

0.60

%

 

0.58

%

 

0.55

%

ACL LHFI / LHFI

 

1.08

%

 

1.05

%

 

1.03

%

 

0.98

%

 

0.99

%

ACL LHFI-commercial / commercial LHFI

 

0.85

%

 

0.86

%

 

0.84

%

 

0.80

%

 

0.85

%

ACL LHFI-consumer / consumer and
home mortgage LHFI

 

1.81

%

 

1.66

%

 

1.60

%

 

1.54

%

 

1.41

%

ACL LHFI / nonaccrual LHFI

 

139.36

%

 

147.45

%

 

172.34

%

 

168.90

%

 

182.22

%

ACL LHFI / nonaccrual LHFI
(excl individually analyzed loans)

 

249.31

%

 

273.60

%

 

301.44

%

 

320.80

%

 

399.19

%

 
CAPITAL RATIOS
Total equity / total assets

 

8.88

%

 

8.54

%

 

8.53

%

 

8.28

%

 

8.28

%

Tangible equity / tangible assets

 

6.95

%

 

6.57

%

 

6.56

%

 

6.35

%

 

6.27

%

Tangible equity / risk-weighted assets

 

8.41

%

 

7.81

%

 

7.91

%

 

7.94

%

 

7.61

%

Tier 1 leverage ratio

 

8.62

%

 

8.49

%

 

8.35

%

 

8.29

%

 

8.47

%

Common equity tier 1 capital ratio

 

10.04

%

 

9.89

%

 

9.87

%

 

9.76

%

 

9.74

%

Tier 1 risk-based capital ratio

 

10.44

%

 

10.29

%

 

10.27

%

 

10.17

%

 

10.15

%

Total risk-based capital ratio

 

12.29

%

 

12.11

%

 

12.08

%

 

11.95

%

 

11.91

%

 
STOCK PERFORMANCE
Market value-Close

$

27.88

 

$

21.73

 

$

21.12

 

$

24.70

 

$

34.91

 

Book value

$

27.21

 

$

25.71

 

$

25.73

 

$

25.59

 

$

24.47

 

Tangible book value

$

20.87

 

$

19.37

 

$

19.38

 

$

19.24

 

$

18.11

 

 
(1) See Note 7 – 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

December 31, 2023

($ in thousands)

(unaudited)

Note 1 - Litigation Settlement

As previously announced, on December 31, 2022, Trustmark National Bank (TNB) agreed to a settlement in principle (the Stanford Settlement) relating to litigation involving the Stanford Financial Group. On January 13, 2023, TNB entered into a Settlement Agreement (the Stanford Settlement Agreement) reflecting the terms of the Stanford Settlement. The parties to the Stanford Settlement Agreement are, on the one hand, (i) Ralph S. Janvey, solely in his capacity as the court-appointed receiver (the Stanford Receiver) for the Stanford Receivership Estate; (ii) the Official Stanford Investors Committee; (iii) each of the plaintiffs in the Rotstain and Smith Actions; and, on the other hand, (iv) TNB. Under the terms of the Stanford Settlement Agreement, the parties agreed to settle and dismiss the Rotstain Action, the Smith Action, and all current or future claims by plaintiffs in either such Action arising from or related to Stanford. In addition, the Stanford Settlement Agreement provided that the parties would request dismissal of the Jackson Action pursuant to the terms of the bar orders described below. The Court’s approval of the Stanford Settlement Agreement, including the bar orders described below, has occurred and has been upheld on appeal, as described below. As a result, pursuant to the Stanford Settlement, TNB will make a one-time cash payment of $100.0 million to the Stanford Receiver on February 2, 2024.

The Stanford Settlement Agreement included the parties’ agreement to seek the Northern District of Texas District Court’s entry of bar orders prohibiting any continued or future claims by the plaintiffs in the Actions or by any other person or entity against TNB and its related parties relating to Stanford, whether asserted to date or not. The bar orders prohibit all litigation relating to Stanford described herein, including not only the Actions and any pending matters but also any actions that may be brought in the future. Final Court approval of these bar orders was a condition of the Stanford Settlement.

The Stanford Settlement Agreement was also subject to notice to Stanford’s investor claimants (which has been provided) and final, non-appealable approval by the U.S. District Court for the Northern District of Texas (which has occurred).

The Stanford Settlement Agreement also provides that TNB denies and makes no admission of liability or wrongdoing in connection with any Stanford matter. As has been the case throughout the pendency of the Actions, TNB expressly denies any liability or wrongdoing with respect to any matter alleged in regard to the multi-billion dollar Ponzi scheme operated by Stanford for almost 20 years. TNB’s relationship with Stanford began as a result of TNB’s acquisition of a Houston-based bank in August 2006, and consisted of ordinary banking services provided to business deposit customers.

The foregoing description of the terms of the Stanford Settlement Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Stanford Settlement Agreement, a copy of which is filed as Exhibit 10.ai to the 2022 Annual Report and is incorporated herein by reference.

On January 20, 2023, the U.S. District Court for the Northern District of Texas entered an order preliminarily finding that the Stanford Settlement is fair, reasonable, and equitable; has no obvious deficiencies; and is the product of serious, informed, good faith, and arm’s-length negotiations. Following the provision of notice as required by the Stanford Settlement Agreement and by the Court’s preliminary order, the Court (Judge David C. Godbey, presiding) held a Final Approval Hearing on May 3, 2023, at which the Court approved the Stanford Settlement from the bench. On May 4, 2023, Judge Godbey signed the written orders confirming his oral ruling, including the bar order contemplated by the Stanford Settlement Agreement and the judgment and bar order with respect to the Jackson Action.

On May 10, 2023, Robert Allen Stanford, writing from prison, appealed the District Court’s approval of the Stanford Settlement to the Fifth Circuit Court of Appeals. On June 12, 2023, the Stanford Receiver moved to dismiss the appeal as frivolous. On July 25, 2023, a three-judge panel of the Fifth Circuit issued a per curiam order dismissing Stanford’s appeal as frivolous. In July and August 2023, Mr. Stanford filed, then subsequently withdrew, a motion seeking panel rehearing of the Fifth Circuit’s July 25, 2023, decision.

When Stanford’s deadline to appeal the Fifth Circuit’s ruling to the Supreme Court of the United States passed without his filing a petition for certiorari, the trial court’s ruling approving the Stanford Settlement and entering the bar orders became final and non-appealable, as defined in the Stanford Settlement Agreement (the Stanford Settlement Effective Date). On November 14, the parties to the Rotstain and Smith Actions filed agreed dismissals of those cases, which were granted on November 27, 2023 (Smith Action) and December 18, 2023 (Rotstain Action). Those dismissals were final and non-appealable as of December 27, 2023 (Smith Action) and January 17, 2024 (Rotstain Action). Accordingly, pursuant to the Stanford Settlement Agreement, TNB will make the settlement payment on February 2, 2024, concluding the Stanford Settlement.

TNB and Trustmark Corporation determined that it was in the best interest of TNB, Trustmark Corporation and the shareholders of Trustmark Corporation to enter into the Stanford Settlement and the Stanford Settlement Agreement to eliminate the risk, ongoing expense, uncertainty as to ultimate outcome, and imposition on management and the business of TNB of further litigation of the Actions and related Stanford claims.

As previously announced, on August 30, 2023, TNB agreed to a settlement in principle (the Adams/Madison Timber Settlement) relating to litigation and claims involving Arthur Lamar Adams and Madison Timber Properties, LLC (collectively, Adams/Madison Timber). On October 9, 2023, TNB entered into a Settlement Agreement (the Adams/Madison Timber Settlement Agreement) reflecting the terms of the Adams/Madison Timber Settlement. The parties to the Adams/Madison Timber Settlement are, on the one hand, Alysson Mills in her capacity as Court-appointed Receiver (the Adams/Madison Timber Receiver); and, on the other hand, TNB. Under the terms of the Adams/Madison Timber Settlement Agreement, the parties agreed to settle and dismiss the Adams/Madison Timber Action, and the Adams/Madison Timber Receiver agreed to fully release all claims against TNB and any of its employees, agents and representatives. The Adams/Madison Timber Settlement included the parties’ agreement to seek the Court’s entry of bar orders prohibiting any continued or future claims by anyone against TNB and its related parties relating to Adams/Madison Timber, whether asserted to date or not. Final Court approval of a bar order was a condition of the Adams/Madison Timber Settlement. On November 14, 2023, the Court entered a Partial Final Judgment and Final Bar Order approving the settlement. The bar order therefore is expected to prohibit all litigation relating to Adams/Madison Timber described herein.

The Adams/Madison Timber Settlement was subject to notice to Adams/Madison Timber investors, and final, non-appealable approval by the Court and entry of a judgment dismissing the Lawsuit against TNB. No investor or other interested parties appealed the bar order before the appeal deadline passed. Accordingly, TNB made the settlement payment to the Adams/Madison Timber Receiver on January 22, 2024, concluding the Adams/Madison Timber Settlement.

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

December 31, 2023

($ in thousands)

(unaudited)

Note 1 - Litigation Settlement (continued)

At the time of the entry into the Stanford Settlement as described above, Trustmark Corporation recognized $100.0 million of litigation settlement expense, as well as an additional $750 thousand in legal fees, which were included in noninterest expense related to the Stanford litigation during the fourth quarter of 2022. As a result of the entry into the Adams/Madison Timber Settlement as described above, Trustmark Corporation recognized $6.5 million of litigation settlement expense which was included in noninterest expense related to the Adams/Madison Timber litigation during the third quarter of 2023. Trustmark Corporation expects that both the Stanford Settlement and Adams/Madison Timber Settlement will be tax deductible. Trustmark Corporation and TNB remain substantially above levels considered to be well-capitalized under all relevant standards.

Note 2 - Securities Available for Sale and Held to Maturity

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

 

 

12/31/2023

 

 

9/30/2023

 

 

6/30/2023

 

 

3/31/2023

 

 

12/31/2022

 

SECURITIES AVAILABLE FOR SALE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

372,368

 

 

$

363,476

 

 

$

362,966

 

 

$

386,903

 

 

$

391,513

 

U.S. Government agency obligations

 

 

5,792

 

 

 

6,780

 

 

 

6,999

 

 

 

7,254

 

 

 

7,766

 

Obligations of states and political subdivisions

 

 

 

 

 

4,642

 

 

 

4,813

 

 

 

4,907

 

 

 

4,862

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage pass-through securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Guaranteed by GNMA

 

 

23,135

 

 

 

22,881

 

 

 

25,336

 

 

 

26,851

 

 

 

27,097

 

Issued by FNMA and FHLMC

 

 

1,176,798

 

 

 

1,171,521

 

 

 

1,250,435

 

 

 

1,317,848

 

 

 

1,345,463

 

Other residential mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by FNMA, FHLMC, or GNMA

 

 

86,074

 

 

 

90,402

 

 

 

98,388

 

 

 

108,192

 

 

 

115,140

 

Commercial mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by FNMA, FHLMC, or GNMA

 

 

98,711

 

 

 

106,472

 

 

 

122,946

 

 

 

132,207

 

 

 

132,241

 

Total securities available for sale

 

$

1,762,878

 

 

$

1,766,174

 

 

$

1,871,883

 

 

$

1,984,162

 

 

$

2,024,082

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SECURITIES HELD TO MATURITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

29,068

 

 

$

28,872

 

 

$

28,679

 

 

$

28,486

 

 

$

28,295

 

Obligations of states and political subdivisions

 

 

340

 

 

 

341

 

 

 

1,180

 

 

 

4,507

 

 

 

4,510

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage pass-through securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Guaranteed by GNMA

 

 

13,005

 

 

 

13,090

 

 

 

13,235

 

 

 

4,336

 

 

 

4,442

 

Issued by FNMA and FHLMC

 

 

469,593

 

 

 

474,003

 

 

 

484,679

 

 

 

497,854

 

 

 

509,311

 

Other residential mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by FNMA, FHLMC, or GNMA

 

 

154,466

 

 

 

162,031

 

 

 

171,002

 

 

 

179,334

 

 

 

188,201

 

Commercial mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued or guaranteed by FNMA, FHLMC, or GNMA

 

 

759,807

 

 

 

759,950

 

 

 

759,890

 

 

 

759,821

 

 

 

759,755

 

Total securities held to maturity

 

$

1,426,279

 

 

$

1,438,287

 

 

$

1,458,665

 

 

$

1,474,338

 

 

$

1,494,514

 

At December 31, 2023, the net unamortized, unrealized loss included in accumulated other comprehensive income (loss) in the accompanying balance sheet for securities held to maturity transferred from securities available for sale totaled $57.6 million.

Management continues to focus on asset quality as one of the strategic goals of the securities portfolio, which is evidenced by the investment of 99.99% 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.

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

December 31, 2023

($ in thousands)

(unaudited)

Note 3 – Loan Composition

LHFI consisted of the following during the periods presented:

LHFI BY TYPE

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

Loans secured by real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction, land development and other land loans

 

$

1,510,679

 

 

$

1,609,326

 

 

$

1,722,657

 

 

$

1,723,772

 

 

$

1,719,542

 

Secured by 1-4 family residential properties

 

 

2,904,715

 

 

 

2,893,606

 

 

 

2,854,182

 

 

 

2,822,048

 

 

 

2,775,847

 

Secured by nonfarm, nonresidential properties

 

 

3,489,434

 

 

 

3,569,671

 

 

 

3,471,728

 

 

 

3,375,579

 

 

 

3,278,830

 

Other real estate secured

 

 

1,312,551

 

 

 

1,218,499

 

 

 

954,410

 

 

 

847,527

 

 

 

742,538

 

Commercial and industrial loans

 

 

1,922,910

 

 

 

1,828,924

 

 

 

1,883,480

 

 

 

1,882,360

 

 

 

1,821,259

 

Consumer loans

 

 

161,725

 

 

 

161,940

 

 

 

163,788

 

 

 

162,911

 

 

 

166,425

 

State and other political subdivision loans

 

 

1,088,466

 

 

 

1,056,569

 

 

 

1,111,710

 

 

 

1,193,727

 

 

 

1,223,863

 

Other loans and leases

 

 

560,044

 

 

 

471,724

 

 

 

452,012

 

 

 

489,271

 

 

 

475,735

 

LHFI

 

 

12,950,524

 

 

 

12,810,259

 

 

 

12,613,967

 

 

 

12,497,195

 

 

 

12,204,039

 

ACL LHFI

 

 

(139,367

)

 

 

(134,031

)

 

 

(129,298

)

 

 

(122,239

)

 

 

(120,214

)

Net LHFI

 

$

12,811,157

 

 

$

12,676,228

 

 

$

12,484,669

 

 

$

12,374,956

 

 

$

12,083,825

 

The following table presents the LHFI composition based upon the region where the loan was originated and reflects each region’s diversified mix of loans:

 

December 31, 2023

 

LHFI - COMPOSITION BY REGION

Total

 

 

Alabama (1)

 

 

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

$

1,510,679

 

 

$

688,438

 

 

$

37,626

 

 

$

435,406

 

 

$

37,194

 

 

$

312,015

 

Secured by 1-4 family residential properties

 

2,904,715

 

 

 

151,446

 

 

 

54,998

 

 

 

2,582,329

 

 

 

84,031

 

 

 

31,911

 

Secured by nonfarm, nonresidential properties

 

3,489,434

 

 

 

960,656

 

 

 

233,908

 

 

 

1,431,968

 

 

 

153,226

 

 

 

709,676

 

Other real estate secured

 

1,312,551

 

 

 

583,165

 

 

 

1,761

 

 

 

396,715

 

 

 

7,587

 

 

 

323,323

 

Commercial and industrial loans

 

1,922,910

 

 

 

658,573

 

 

 

25,406

 

 

 

780,949

 

 

 

217,729

 

 

 

240,253

 

Consumer loans

 

161,725

 

 

 

22,609

 

 

 

7,509

 

 

 

101,389

 

 

 

20,433

 

 

 

9,785

 

State and other political subdivision loans

 

1,088,466

 

 

 

71,882

 

 

 

52,759

 

 

 

813,291

 

 

 

25,999

 

 

 

124,535

 

Other loans and leases

 

560,044

 

 

 

209,874

 

 

 

8,476

 

 

 

223,583

 

 

 

46,519

 

 

 

71,592

 

Loans

$

12,950,524

 

 

$

3,346,643

 

 

$

422,443

 

 

$

6,765,630

 

 

$

592,718

 

 

$

1,823,090

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION

 

 

 

 

 

 

 

Lots

$

71,875

 

 

$

30,186

 

 

$

8,353

 

 

$

17,257

 

 

$

4,714

 

 

$

11,365

 

Development

 

146,655

 

 

 

74,015

 

 

 

1,262

 

 

 

36,690

 

 

 

12,649

 

 

 

22,039

 

Unimproved land

 

101,941

 

 

 

17,432

 

 

 

12,853

 

 

 

36,573

 

 

 

8,094

 

 

 

26,989

 

1-4 family construction

 

322,415

 

 

 

164,712

 

 

 

13,099

 

 

 

95,297

 

 

 

11,737

 

 

 

37,570

 

Other construction

 

867,793

 

 

 

402,093

 

 

 

2,059

 

 

 

249,589

 

 

 

 

 

 

214,052

 

Construction, land development and other land loans

$

1,510,679

 

 

$

688,438

 

 

$

37,626

 

 

$

435,406

 

 

$

37,194

 

 

$

312,015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes Georgia Loan Production Office.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

December 31, 2023

($ in thousands)

(unaudited)

Note 3 – Loan Composition (continued)

 

 

December 31, 2023

 

 

 

Total

 

 

Alabama (1)

 

 

Florida

 

 

Mississippi

(Central and

Southern

Regions)

 

 

Tennessee

(Memphis, TN

and

Northern
MS

Regions)

 

 

Texas

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION

 

 

 

 

 

 

 

Non-owner occupied:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

$

346,844

 

 

$

128,743

 

 

$

25,732

 

 

$

91,057

 

 

$

17,721

 

 

$

83,591

 

Office

 

 

286,511

 

 

 

104,114

 

 

 

19,857

 

 

 

94,294

 

 

 

1,649

 

 

 

66,597

 

Hotel/motel

 

 

270,740

 

 

 

144,403

 

 

 

47,111

 

 

 

53,227

 

 

 

25,999

 

 

 

 

Mini-storage

 

 

157,938

 

 

 

32,452

 

 

 

1,917

 

 

 

103,500

 

 

 

756

 

 

 

19,313

 

Industrial

 

 

382,737

 

 

 

57,386

 

 

 

19,762

 

 

 

123,306

 

 

 

9,730

 

 

 

172,553

 

Health care

 

 

97,783

 

 

 

69,352

 

 

 

688

 

 

 

25,021

 

 

 

333

 

 

 

2,389

 

Convenience stores

 

 

26,254

 

 

 

3,315

 

 

 

425

 

 

 

13,777

 

 

 

249

 

 

 

8,488

 

Nursing homes/senior living

 

 

508,665

 

 

 

229,352

 

 

 

 

 

 

160,359

 

 

 

4,901

 

 

 

114,053

 

Other

 

 

110,828

 

 

 

31,370

 

 

 

9,232

 

 

 

52,521

 

 

 

8,321

 

 

 

9,384

 

Total non-owner occupied loans

 

 

2,188,300

 

 

 

800,487

 

 

 

124,724

 

 

 

717,062

 

 

 

69,659

 

 

 

476,368

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner-occupied:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Office

 

 

152,053

 

 

 

44,028

 

 

 

38,401

 

 

 

39,790

 

 

 

11,459

 

 

 

18,375

 

Churches

 

 

62,217

 

 

 

17,098

 

 

 

4,178

 

 

 

34,899

 

 

 

3,541

 

 

 

2,501

 

Industrial warehouses

 

 

159,227

 

 

 

11,619

 

 

 

4,618

 

 

 

40,837

 

 

 

16,330

 

 

 

85,823

 

Health care

 

 

125,304

 

 

 

11,031

 

 

 

6,274

 

 

 

87,507

 

 

 

2,269

 

 

 

18,223

 

Convenience stores

 

 

142,537

 

 

 

12,593

 

 

 

29,299

 

 

 

65,031

 

 

 

14

 

 

 

35,600

 

Retail

 

 

89,174

 

 

 

9,606

 

 

 

15,644

 

 

 

37,340

 

 

 

17,694

 

 

 

8,890

 

Restaurants

 

 

48,172

 

 

 

4,010

 

 

 

3,503

 

 

 

22,316

 

 

 

15,095

 

 

 

3,248

 

Auto dealerships

 

 

43,556

 

 

 

5,533

 

 

 

201

 

 

 

21,383

 

 

 

16,439

 

 

 

 

Nursing homes/senior living

 

 

345,108

 

 

 

31,644

 

 

 

 

 

 

287,264

 

 

 

 

 

 

26,200

 

Other

 

 

133,786

 

 

 

13,007

 

 

 

7,066

 

 

 

78,539

 

 

 

726

 

 

 

34,448

 

Total owner-occupied loans

 

 

1,301,134

 

 

 

160,169

 

 

 

109,184

 

 

 

714,906

 

 

 

83,567

 

 

 

233,308

 

Loans secured by nonfarm, nonresidential properties

 

$

3,489,434

 

 

$

960,656

 

 

$

233,908

 

 

$

1,431,968

 

 

$

153,226

 

 

$

709,676

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes Georgia Loan Production Office.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note 4 – Yields on Earning Assets and Interest-Bearing Liabilities

The following table illustrates the yields on earning assets by category as well as the rates paid on interest-bearing liabilities on a tax equivalent basis:

 

 

Quarter Ended

 

Year Ended

 

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

12/31/2023

 

12/31/2022

Securities – taxable

 

 

1.85

%

 

 

1.89

%

 

 

1.87

%

 

 

1.85

%

 

 

1.71

%

 

 

1.86

%

 

 

1.55

%

Securities – nontaxable

 

 

3.81

%

 

 

4.05

%

 

 

4.25

%

 

 

4.00

%

 

 

3.95

%

 

 

4.04

%

 

 

3.97

%

Securities – total

 

 

1.85

%

 

 

1.89

%

 

 

1.87

%

 

 

1.86

%

 

 

1.72

%

 

 

1.87

%

 

 

1.56

%

PPP loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12.39

%

 

 

 

 

 

4.30

%

Loans - LHFI & LHFS

 

 

6.41

%

 

 

6.34

%

 

 

6.08

%

 

 

5.79

%

 

 

5.27

%

 

 

6.16

%

 

 

4.32

%

Loans - total

 

 

6.41

%

 

 

6.34

%

 

 

6.08

%

 

 

5.79

%

 

 

5.27

%

 

 

6.16

%

 

 

4.32

%

Fed funds sold & reverse repurchases

 

 

6.56

%

 

 

5.17

%

 

 

5.51

%

 

 

5.11

%

 

 

4.29

%

 

 

5.36

%

 

 

4.22

%

Other earning assets

 

 

5.87

%

 

 

5.01

%

 

 

5.36

%

 

 

4.09

%

 

 

3.76

%

 

 

5.10

%

 

 

0.89

%

Total earning assets

 

 

5.48

%

 

 

5.38

%

 

 

5.16

%

 

 

4.87

%

 

 

4.40

%

 

 

5.22

%

 

 

3.46

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

 

2.67

%

 

 

2.39

%

 

 

1.96

%

 

 

1.53

%

 

 

0.71

%

 

 

2.16

%

 

 

0.28

%

Fed funds purchased & repurchases

 

 

5.26

%

 

 

5.14

%

 

 

5.01

%

 

 

4.49

%

 

 

3.44

%

 

 

4.97

%

 

 

2.16

%

Other borrowings

 

 

5.08

%

 

 

5.32

%

 

 

5.12

%

 

 

4.87

%

 

 

3.73

%

 

 

5.09

%

 

 

3.11

%

Total interest-bearing liabilities

 

 

2.89

%

 

 

2.72

%

 

 

2.42

%

 

 

1.98

%

 

 

1.03

%

 

 

2.51

%

 

 

0.43

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Deposits

 

 

2.10

%

 

 

1.84

%

 

 

1.48

%

 

 

1.13

%

 

 

0.51

%

 

 

1.65

%

 

 

0.20

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

 

3.25

%

 

 

3.29

%

 

 

3.33

%

 

 

3.39

%

 

 

3.66

%

 

 

3.32

%

 

 

3.17

%

Net interest margin excluding PPP loans

 

and the FRB balance

 

 

3.16

%

 

 

3.24

%

 

 

3.23

%

 

 

3.36

%

 

 

3.66

%

 

 

3.25

%

 

 

3.30

%

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

December 31, 2023

($ in thousands)

(unaudited)

Note 4 – Yields on Earning Assets and Interest-Bearing Liabilities (continued)

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.

For the fourth quarter of 2023, the average FRB balance totaled $572.0 million compared to $566.3 million for the third quarter of 2023 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 decreased 8 basis points when compared to the third quarter of 2023, totaling 3.16% for the fourth quarter of 2023, primarily due to increased costs of interest-bearing liabilities which resulted from the higher interest-rate environment and was partially offset by an increase in the yield on the loans held for investment and held for sale portfolio.

Note 5 – 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 negative hedge ineffectiveness of $2.2 million during the fourth quarter of 2023.

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

 

 

Quarter Ended

 

Year Ended

 

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

12/31/2023

 

12/31/2022

Mortgage servicing income, net

 

$

6,731

 

 

$

6,916

 

 

$

6,764

 

 

$

6,785

 

 

$

6,636

 

 

$

27,196

 

 

$

26,291

 

Change in fair value-MSR from runoff

 

 

(2,972

)

 

 

(3,203

)

 

 

(2,710

)

 

 

(1,145

)

 

 

(2,981

)

 

 

(10,030

)

 

 

(14,034

)

Gain on sales of loans, net

 

 

3,913

 

 

 

3,748

 

 

 

3,887

 

 

 

3,797

 

 

 

3,328

 

 

 

15,345

 

 

 

20,178

 

Mortgage banking income before hedge

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ineffectiveness

7,672

7,461

7,941

9,437

6,983

32,511

32,435

Change in fair value-MSR from market changes

 

 

(10,224

)

 

 

6,809

 

 

 

5,898

 

 

 

(3,972

)

 

 

(3,348

)

 

 

(1,489

)

 

 

38,181

 

Change in fair value of derivatives

 

 

8,071

 

 

 

(7,812

)

 

 

(7,239

)

 

 

2,174

 

 

 

(227

)

 

 

(4,806

)

 

 

(42,310

)

Net positive (negative) hedge ineffectiveness

 

 

(2,153

)

 

 

(1,003

)

 

 

(1,341

)

 

 

(1,798

)

 

 

(3,575

)

 

 

(6,295

)

 

 

(4,129

)

Mortgage banking, net

 

$

5,519

 

 

$

6,458

 

 

$

6,600

 

 

$

7,639

 

 

$

3,408

 

 

$

26,216

 

 

$

28,306

 

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

December 31, 2023

($ in thousands)

(unaudited)

Note 6 – Other Noninterest Income and Expense

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

 

 

Quarter Ended

 

Year Ended

 

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

12/31/2023

 

12/31/2022

Partnership amortization for tax credit purposes

 

$

(2,013

)

 

$

(1,995

)

 

$

(2,019

)

 

$

(1,961

)

 

$

(1,869

)

 

$

(7,988

)

 

$

(6,211

)

Increase in life insurance cash surrender value

 

 

1,825

 

 

 

1,784

 

 

 

1,716

 

 

 

1,693

 

 

 

1,687

 

 

 

7,018

 

 

 

6,673

 

Other miscellaneous income

 

 

2,767

 

 

 

2,610

 

 

 

3,998

 

 

 

2,782

 

 

 

2,493

 

 

 

12,157

 

 

 

9,380

 

Total other, net

 

$

2,579

 

 

$

2,399

 

 

$

3,695

 

 

$

2,514

 

 

$

2,311

 

 

$

11,187

 

 

$

9,842

 

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

 

Year Ended

 

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

12/31/2023

 

12/31/2022

Loan expense (1)

 

$

2,380

 

 

$

3,130

 

 

$

3,066

 

 

$

2,538

 

 

$

2,908

 

 

$

11,114

 

 

$

12,249

 

Amortization of intangibles

 

 

128

 

 

 

129

 

 

 

130

 

 

 

288

 

 

 

312

 

 

 

675

 

 

 

1,434

 

FDIC assessment expense

 

 

4,844

 

 

 

3,765

 

 

 

2,550

 

 

 

2,370

 

 

 

2,130

 

 

 

13,529

 

 

 

7,385

 

Other real estate expense, net

 

 

(184

)

 

 

(40

)

 

 

171

 

 

 

172

 

 

 

18

 

 

 

119

 

 

 

1,173

 

Other miscellaneous expense

 

 

9,473

 

 

 

8,714

 

 

 

8,585

 

 

 

9,443

 

 

 

9,767

 

 

 

36,215

 

 

 

33,601

 

Total other expense (1)

 

$

16,641

 

 

$

15,698

 

 

$

14,502

 

 

$

14,811

 

 

$

15,135

 

 

$

61,652

 

 

$

55,842

 

 

(1) During the first quarter of 2023, Trustmark reclassified its debit card transaction fees from other expense to services and fees. Prior periods have been reclassified accordingly.

Note 7 – 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

December 31, 2023

($ in thousands)

(unaudited)

Note 7 – Non-GAAP Financial Measures (continued)

 

 

 

 

Quarter Ended

 

Year Ended

 

 

 

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

12/31/2023

 

12/31/2022

TANGIBLE EQUITY

AVERAGE BALANCES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity

 

 

 

$

1,592,493

 

 

$

1,582,885

 

 

$

1,580,291

 

 

$

1,523,828

 

 

$

1,493,291

 

 

$

1,570,098

 

 

$

1,604,854

 

Less: Goodwill

 

 

 

 

(384,237

)

 

 

(384,237

)

 

 

(384,237

)

 

 

(384,237

)

 

 

(384,237

)

 

 

(384,237

)

 

 

(384,237

)

Identifiable intangible assets

 

 

 

 

(3,044

)

 

 

(3,174

)

 

 

(3,301

)

 

 

(3,523

)

 

 

(3,816

)

 

 

(3,259

)

 

 

(4,312

)

Total average tangible equity

 

 

 

$

1,205,212

 

 

$

1,195,474

 

 

$

1,192,753

 

 

$

1,136,068

 

 

$

1,105,238

 

 

$

1,182,602

 

 

$

1,216,305

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERIOD END BALANCES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity

 

 

 

$

1,661,847

 

 

$

1,570,351

 

 

$

1,571,193

 

 

$

1,562,099

 

 

$

1,492,268

 

 

 

 

 

 

 

Less: Goodwill

 

 

 

 

(384,237

)

 

 

(384,237

)

 

 

(384,237

)

 

 

(384,237

)

 

 

(384,237

)

 

 

 

 

 

 

Identifiable intangible assets

 

 

 

 

(2,965

)

 

 

(3,093

)

 

 

(3,222

)

 

 

(3,352

)

 

 

(3,640

)

 

 

 

 

 

 

Total tangible equity

 

(a)

 

$

1,274,645

 

 

$

1,183,021

 

 

$

1,183,734

 

 

$

1,174,510

 

 

$

1,104,391

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TANGIBLE ASSETS

Total assets

 

 

 

$

18,722,189

 

 

$

18,390,839

 

 

$

18,422,626

 

 

$

18,877,178

 

 

$

18,015,478

 

 

 

 

 

 

 

Less: Goodwill

 

 

 

 

(384,237

)

 

 

(384,237

)

 

 

(384,237

)

 

 

(384,237

)

 

 

(384,237

)

 

 

 

 

 

 

Identifiable intangible assets

 

 

 

 

(2,965

)

 

 

(3,093

)

 

 

(3,222

)

 

 

(3,352

)

 

 

(3,640

)

 

 

 

 

 

 

Total tangible assets

 

(b)

 

$

18,334,987

 

 

$

18,003,509

 

 

$

18,035,167

 

 

$

18,489,589

 

 

$

17,627,601

 

 

 

 

 

 

 

Risk-weighted assets

 

(c)

 

$

15,153,263

 

 

$

15,143,531

 

 

$

14,966,614

 

 

$

14,793,893

 

 

$

14,521,078

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) ADJUSTED FOR INTANGIBLE AMORTIZATION

Net income (loss)

 

 

 

$

36,123

 

 

$

34,029

 

 

$

45,037

 

 

$

50,300

 

 

$

(34,063

)

 

$

165,489

 

 

$

71,887

 

Plus: Intangible amortization net of tax

 

 

 

 

96

 

 

 

96

 

 

 

97

 

 

 

216

 

 

 

234

 

 

 

505

 

 

 

1,076

 

Net income (loss) adjusted for intangible amortization

   

 

$

36,219

 

 

$

34,125

 

 

$

45,134

 

 

$

50,516

 

 

$

(33,829

)

 

$

165,994

 

 

$

72,963

 

Period end common shares outstanding

 

(d)

 

 

61,071,173

 

 

 

61,070,095

 

 

 

61,069,036

 

 

 

61,048,516

 

 

 

60,977,686

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TANGIBLE COMMON EQUITY MEASUREMENTS

Return on average tangible equity (1)

 

 

 

 

11.92

%

 

 

11.32

%

 

 

15.18

%

 

 

18.03

%

 

 

-12.14

%

 

 

14.04

%

 

 

6.00

%

Tangible equity/tangible assets

 

(a)/(b)

 

 

6.95

%

 

 

6.57

%

 

 

6.56

%

 

 

6.35

%

 

 

6.27

%

 

 

 

 

 

 

Tangible equity/risk-weighted assets

 

(a)/(c)

 

 

8.41

%

 

 

7.81

%

 

 

7.91

%

 

 

7.94

%

 

 

7.61

%

 

 

 

 

 

 

Tangible book value

 

(a)/(d)*1,000

 

$

20.87

 

 

$

19.37

 

 

$

19.38

 

 

$

19.24

 

 

$

18.11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMMON EQUITY TIER 1 CAPITAL (CET1)

Total shareholders' equity

 

 

 

$

1,661,847

 

 

$

1,570,351

 

 

$

1,571,193

 

 

$

1,562,099

 

 

$

1,492,268

 

 

 

 

 

 

 

CECL transition adjustment

 

 

 

 

13,000

 

 

 

13,000

 

 

 

13,000

 

 

 

13,000

 

 

 

19,500

 

 

 

 

 

 

 

AOCI-related adjustments

 

 

 

 

219,723

 

 

 

287,888

 

 

 

265,704

 

 

 

242,381

 

 

 

275,403

 

 

 

 

 

 

 

CET1 adjustments and deductions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill net of associated deferred

     

tax liabilities (DTLs)

   

 

 

(370,212

)

 

 

(370,219

)

 

 

(370,227

)

 

 

(370,234

)

 

 

(370,241

)

 

 

 

 

 

 

Other adjustments and deductions

     

for CET1 (2)

   

 

 

(2,693

)

 

 

(2,803

)

 

 

(2,915

)

 

 

(3,275

)

 

 

(3,258

)

 

 

 

 

 

 

CET1 capital

 

(e)

 

 

1,521,665

 

 

 

1,498,217

 

 

 

1,476,755

 

 

 

1,443,971

 

 

 

1,413,672

 

 

 

 

 

 

 

Additional tier 1 capital instruments

     

plus related surplus

   

 

 

60,000

 

 

 

60,000

 

 

 

60,000

 

 

 

60,000

 

 

 

60,000

 

 

 

 

 

 

 

Tier 1 capital

 

 

 

$

1,581,665

 

 

$

1,558,217

 

 

$

1,536,755

 

 

$

1,503,971

 

 

$

1,473,672

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity tier 1 capital ratio

 

(e)/(c)

 

 

10.04

%

 

 

9.89

%

 

 

9.87

%

 

 

9.76

%

 

 

9.74

%

 

 

 

 

 

 

 

(1) Calculation = ((net income (loss) 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

December 31, 2023

($ in thousands)

(unaudited)

Note 7 – 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

 

Year Ended

 

 

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

12/31/2023

 

12/31/2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income (GAAP)

 

$

136,742

 

 

$

138,637

 

 

$

139,904

 

 

$

137,595

 

 

$

146,583

 

 

$

552,878

 

 

$

494,708

 

Noninterest income (GAAP)

 

 

49,804

 

 

 

52,224

 

 

 

53,553

 

 

 

51,377

 

 

 

45,170

 

 

 

206,958

 

 

 

205,144

 

Pre-provision revenue

(a)

$

186,546

 

 

$

190,861

 

 

$

193,457

 

 

$

188,972

 

 

$

191,753

 

 

$

759,836

 

 

$

699,852

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense (GAAP)

 

$

136,429

 

 

$

140,945

 

 

$

132,218

 

 

$

128,327

 

 

$

231,229

 

 

$

537,919

 

 

$

603,213

 

Less:

Reduction in force expense

 

 

(1,406

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,406

)

 

 

 

 

Litigation settlement expense

 

 

 

 

 

(6,500

)

 

 

 

 

 

 

 

 

(100,750

)

 

 

(6,500

)

 

 

(100,750

)

Adjusted noninterest expense - PPNR (Non-GAAP)

(b)

$

135,023

 

 

$

134,445

 

 

$

132,218

 

 

$

128,327

 

 

$

130,479

 

 

$

530,013

 

 

$

502,463

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PPNR (Non-GAAP)

(a)-(b)

$

51,523

 

 

$

56,416

 

 

$

61,239

 

 

$

60,645

 

 

$

61,274

 

 

$

229,823

 

 

$

197,389

 

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

 

Quarter Ended

 

 

Year Ended

 

12/31/2023

 

 

12/31/2022

 

 

12/31/2023

 

 

12/31/2022

 

Amount

 

Diluted

EPS

 

 

Amount

 

Diluted

EPS

 

 

Amount

 

Diluted

EPS

 

 

Amount

 

Diluted

EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) (GAAP)

$

36,123

 

 

$

0.59

 

 

 

$

(34,063

)

 

$

(0.56

)

 

 

$

165,489

 

 

$

2.70

 

 

 

$

71,887

 

 

$

1.17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Significant non-routine transactions (net of taxes):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reduction in force expense

 

1,055

 

 

 

0.02

 

 

 

 

 

 

 

 

 

 

 

1,055

 

 

 

0.02

 

 

 

 

 

 

 

 

Litigation settlement expense

 

 

 

 

 

 

 

 

75,563

 

 

 

1.24

 

 

 

 

4,875

 

 

 

0.08

 

 

 

 

75,563

 

 

 

1.23

 

Net income adjusted for significant non-routine

 

transactions (Non-GAAP)

$

37,178

 

 

$

0.61

 

 

 

$

41,500

 

 

$

0.68

 

 

 

$

171,419

 

 

$

2.80

 

 

 

$

147,450

 

 

$

2.40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported

(GAAP)

 

Adjusted

(Non
-

GAAP)

 

 

Reported

(GAAP)

 

Adjusted

(Non-

GAAP)

 

 

Reported

(GAAP)

 

Adjusted

(Non-

GAAP)

 

 

Reported

(GAAP)

 

Adjusted

(Non-

GAAP)

Return on average equity

 

9.00

%

 

 

9.23

%

 

 

 

-9.05

%

 

 

10.75

%

 

 

 

10.54

%

 

 

10.90

%

 

 

 

4.48

%

 

 

9.13

%

Return on average tangible equity

 

11.92

%

 

 

12.22

%

 

 

 

-12.14

%

 

 

14.49

%

 

 

 

14.04

%

 

 

14.51

%

 

 

 

6.00

%

 

 

12.12

%

Return on average assets

 

0.77

%

 

 

0.79

%

 

 

 

-0.76

%

 

 

0.93

%

 

 

 

0.89

%

 

 

0.92

%

 

 

 

0.41

%

 

 

0.84

%

TRUSTMARK CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIALS

December 31, 2023

($ in thousands)

(unaudited)

Note 7 – Non-GAAP Financial Measures (continued)

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

 

 

 

Quarter Ended

 

Year Ended

 

 

 

12/31/2023

 

9/30/2023

 

6/30/2023

 

3/31/2023

 

12/31/2022

 

12/31/2023

 

12/31/2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest expense (GAAP)

 

$

136,429

 

 

$

140,945

 

 

$

132,218

 

 

$

128,327

 

 

$

231,229

 

 

$

537,919

 

 

$

603,213

 

Less:

Other real estate expense, net

 

 

184

 

 

 

40

 

 

 

(171

)

 

 

(172

)

 

 

(18

)

 

 

(119

)

 

 

(1,173

)

 

Amortization of intangibles

 

 

(128

)

 

 

(129

)

 

 

(130

)

 

 

(288

)

 

 

(312

)

 

 

(675

)

 

 

(1,434

)

Charitable contributions resulting in

 

state tax credits

 

(325

)

 

 

(325

)

 

 

(325

)

 

 

(325

)

 

 

(375

)

 

 

(1,300

)

 

 

(1,500

)

 

Reduction in force expense

 

(1,406

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,406

)

 

 

 

 

Litigation settlement expense

 

 

 

 

(6,500

)

 

 

 

 

 

 

 

 

(100,750

)

 

 

(6,500

)

 

 

(100,750

)

Adjusted noninterest expense (Non-GAAP)

(c)

$

134,754

 

 

$

134,031

 

 

$

131,592

 

 

$

127,542

 

 

$

129,774

 

 

$

527,919

 

 

$

498,356

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income (GAAP)

 

$

136,742

 

 

$

138,637

 

 

$

139,904

 

 

$

137,595

 

 

$

146,583

 

 

$

552,878

 

 

$

494,708

 

Add:

Tax equivalent adjustment

 

3,306

 

 

 

3,299

 

 

 

3,383

 

 

 

3,477

 

 

 

3,451

 

 

 

13,465

 

 

 

12,345

 

Net interest income-FTE (Non-GAAP)

(a)

$

140,048

 

 

$

141,936

 

 

$

143,287

 

 

$

141,072

 

 

$

150,034

 

 

$

566,343

 

 

$

507,053

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income (GAAP)

 

$

49,804

 

 

$

52,224

 

 

$

53,553

 

 

$

51,377

 

 

$

45,170

 

 

$

206,958

 

 

$

205,144

 

Add:

Partnership amortization for tax credit purposes

 

2,013

 

 

 

1,995

 

 

 

2,019

 

 

 

1,961

 

 

 

1,869

 

 

 

7,988

 

 

 

6,211

 

Less:

Securities (gains) losses, net

 

(39

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(39

)

 

 

 

Adjusted noninterest income (Non-GAAP)

(b)

$

51,778

 

 

$

54,219

 

 

$

55,572

 

 

$

53,338

 

 

$

47,039

 

 

$

214,907

 

 

$

211,355

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted revenue (Non-GAAP)

(a)+(b)

$

191,826

 

 

$

196,155

 

 

$

198,859

 

 

$

194,410

 

 

$

197,073

 

 

$

781,250

 

 

$

718,408

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio (Non-GAAP)

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

 

70.25

%

 

 

68.33

%

 

 

66.17

%

 

 

65.60

%

 

 

65.85

%

 

 

67.57

%

 

 

69.37

%

 

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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