TRMK Trustmark Corporation

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

July 23, 2024

Date of Report (Date of earliest event reported)

 

TRUSTMARK CORPORATION

(Exact name of registrant as specified in its charter)

 

Mississippi		000-03683		64-0471500
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

248 East Capitol Street, Jackson, Mississippi		39201
(Address of principal executive offices)		(Zip Code)
Registrant’s telephone number, including area code:		(601) 208-5111

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered Pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	TRMK	Nasdaq Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

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Item 2.02. Results of Operations and Financial Condition.

On July 23, 2024, Trustmark Corporation issued a press release announcing its financial results for the period ended June 30, 2024. A copy of this press release and the accompanying financial statements and slide presentation are attached hereto as Exhibits 99.1 and 99.2 to this report and incorporated herein by reference.

 

 

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number		Description of Exhibits
99.1		Press release announcing financial results for the period ended June 30, 2024
99.2		Investor slide presentation for the period ended June 30, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

TRUSTMARK CORPORATION

BY:		/s/ Thomas C. Owens
		Thomas C. Owens
		Treasurer and Principal Financial Officer
DATE:		July 23, 2024

 

 

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Exhibit 99.1

	News Release

 

Trustmark Corporation Announces Second Quarter 2024 Financial Results

Completed Significant Actions to Increase Earnings, Enhance Profitability Profile,

Reduce Risk, and Strengthen Capital Flexibility

JACKSON, Miss. – July 23, 2024 – Trustmark Corporation (NASDAQGS:TRMK) announced second quarter financial results which reflect the previously disclosed sale of Fisher Brown Bottrell Insurance, Inc. (FBBI). As such, second quarter financial results consist of both continuing operations and discontinued operations. The discontinued operations include the financial results of FBBI prior to the sale as well as the gain on sale in the second quarter. The discontinued operations results are presented as a single line item below income from continuing operations in the accompanying tables for all periods presented. Financial results from adjusted continuing operations exclude significant non-routine transactions(1). Trustmark reported net income of $73.8 million in the second quarter of 2024, representing diluted earnings per share of $1.20 and net income from adjusted continuing operations(1) of $40.5 million, or $0.66 per diluted share.

The Board of Directors declared a quarterly cash dividend of $0.23 per share payable September 15, 2024, to shareholders of record on September 1, 2024.

Significant Non-Routine Transactions in the Second Quarter

Second Quarter Highlights

Duane A. Dewey, President and CEO, stated, “The second quarter of 2024 was an extremely productive quarter for Trustmark. We closed the previously announced sale of our insurance agency and completed significant balance sheet restructuring to position the company for improved operating performance into the second half of the year and beyond. While completing these non-recurring events, we also performed well in our core banking franchise with continued loan growth, deposit growth, solid fee income and disciplined expense management. The commitment and dedication of our associates across the organization to successfully meet our clients’ financial needs and execute the one-time projects are outstanding, and we believe the company is very well positioned for future opportunities.”

Balance Sheet Management

Loans HFI totaled $13.2 billion at June 30, 2024, reflecting an increase of $97.5 million, or 0.7%, linked-quarter and $541.5 million, or 4.3%, year-over-year. The linked quarter growth reflected increases in construction, development and other land loans, loans secured by nonfarm, nonresidential properties, and other loans and leases offset in part by declines in commercial and industrial loans, other real estate secured loans, and 1-4 family mortgage loans. Trustmark’s loan portfolio continues to be well-diversified by loan type and geography.

 

Deposits totaled $15.5 billion at June 30, 2024, up $124.3 million, or 0.8%, from the prior quarter and $549.0 million, or 3.7%, year-over-year. Trustmark continues to maintain a strong liquidity position as loans HFI represented 85.1% of total deposits at June 30, 2024. Noninterest-bearing deposits represented 20.4% of total deposits at June 30, 2024, compared to 19.8% at March 31, 2024. The cost of interest-bearing deposits increased 1 basis point to 2.75% for the second quarter, while the cost of total deposits was 2.18%, unchanged from the prior quarter. The total cost of interest-bearing liabilities was 2.95% for the second quarter, up 3 basis points linked-quarter.

During the second quarter, Trustmark did not repurchase any of its outstanding common shares. 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. As of June 30, 2024, Trustmark had not repurchased any of its outstanding common shares under this program. At June 30, 2024, Trustmark’s tangible equity to tangible assets ratio was 8.52%, up 105 basis points from the prior quarter, while the total risk-based capital ratio was 13.29%, up 87 basis points from the prior quarter. Tangible book value per share was $25.23 at June 30, 2024, an increase of 14.5% from the prior quarter and 24.7% from the prior year.

 

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Credit Quality

Nonaccrual loans totaled $44.3 million at June 30, 2024, down $54.1 million from the prior quarter and $30.7 million year-over-year. Other real estate totaled $6.6 million, reflecting a decrease of $1.0 million from the prior quarter and an increase of $5.4 million from the prior year. Collectively, nonperforming assets totaled $50.9 million at June 30, 2024, down $55.1 million, or 52.0%, from the prior quarter and $25.3 million, or 33.2%, from the prior year.

The total provision for credit losses for loans HFI was $23.3 million in the second quarter. Excluding the Mortgage Loan Sale, the provision for credit losses for loans HFI was $14.7 million and was primarily attributable to credit migration. The provision for credit losses for off-balance sheet credit exposures was a negative $3.6 million, primarily driven by decreases in unfunded commitments. Collectively, the provision for credit losses, excluding the Mortgage Loan Sale, totaled $11.1 million in the second quarter compared to $7.5 million from the prior quarter and $8.5 million in the second quarter of 2023.

Allocation of Trustmark’s $154.7 million ACL on loans HFI represented 1.05% of commercial loans and 1.59% of consumer and home mortgage loans, resulting in an ACL to total loans HFI of 1.18% at June 30, 2024. Management believes the level of the ACL is commensurate with the credit losses currently expected in the loan portfolio.

Revenue Generation

Revenue from adjusted continuing operations(1) in the second quarter totaled $179.3 million, an increase of $7.1 million, or 4.1%, from the prior quarter and $1.5 million, or 0.9%, from the same quarter in the prior year. The linked-quarter increase primarily reflects higher net interest income and solid growth in bank card and other fees and wealth management revenue.

Net interest income (FTE) in the second quarter totaled $144.3 million, resulting in a net interest margin of 3.38%, up 17 basis points from the prior quarter. The increase in the net interest margin was primarily due to increased yields on the securities portfolio and the loans HFI and held for sale portfolio as well as the costs of interest-bearing deposits remaining relatively flat.

Noninterest income from adjusted continuing operations(1) in the second quarter totaled $38.2 million, a decrease of $1.1 million, or 2.8%, from the prior quarter and an increase of $0.4 million, or 1.1%, year-over-year. Bank card and other fees totaled $9.2 million in the second quarter, up $1.8 million, or 24.2%, linked-quarter and $0.3 million, or 3.5%, year-over-year. The linked-quarter increase reflects expanded customer derivative revenue, interchange revenue, and miscellaneous other revenue. Service charges on deposit accounts totaled $10.9 million in the second quarter, relatively unchanged from the prior quarter and up $0.2 million, or 2.1%, year-over-year. Other, net totaled $7.5 million, up $4.4 million linked-quarter as the $8.1 million gain from Visa C exchange was offset in part by the $4.8 million in noncredit-related loss from the Mortgage Loan Sale. Other, net from adjusted continuing operations(1) totaled $4.2 million, an increase of $1.1 million, or 35.5%, from the prior quarter.

Mortgage loan production in the second quarter totaled $379.5 million, an increase of 38.5% from the prior quarter and a decrease of 12.0% year-over-year. Mortgage banking revenue totaled $4.2 million in the second quarter, a decrease of $4.7 million linked-quarter and $2.4 million year-over-year. The linked-quarter decrease was principally attributable to increased net negative hedge ineffectiveness, which was driven by a higher assumed discount rate on servicing cash flows.

Wealth management revenue in the second quarter totaled $9.7 million, an increase of $0.7 million, or 8.3%, from the prior quarter and $0.8 million, or 9.1%, year-over-year. The linked-quarter growth reflected increased investment services and trust management revenue while the year-over-year increase reflected expanded brokerage revenue.

Noninterest Expense

Noninterest expense in the second quarter totaled $118.3 million, a decrease of $1.3 million, or 1.1%, when compared to the prior quarter. Salaries and employee benefits expense decreased $0.6 million, or 1.0%, linked-quarter principally due to reduced compensation expense and the seasonal decline in payroll taxes, which were partially offset by increased commission expense. Other expense declined $0.9 million, or 5.6%, linked-quarter.

(1) Please refer to Consolidated Financial Information, Note 1 – Significant Non-Routine Transactions and Note 7 – Non-GAAP Financial Measures.

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, July 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, August 7, 2024, in archived format at the same web address or by calling (877) 344-7529, passcode 4456612.

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

 

 

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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, actions by the Board of Governors of the Federal Reserve System (FRB) that impact the level of market interest rates, local, state, national and international 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, changes in the level of nonperforming assets and charge-offs, an increase in unemployment levels and slowdowns in economic growth, 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 bank failures and other economic and industry volatility, including potential increased regulatory requirements, the demand for the products and services we offer, potential unexpected adverse outcomes in pending litigation matters, our ability to attract and retain 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, 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, 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 Investor Contacts:	Trustmark Media Contact:
Thomas C. Owens	Melanie A. Morgan
Treasurer and	Senior Vice President
Principal Financial Officer	601-208-2979
601-208-7853

 

F. Joseph Rein, Jr.

Senior Vice President

601-208-6898

 

 

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													Linked Quarter								Year over Year
QUARTERLY AVERAGE BALANCES	6/30/2024				3/31/2024				6/30/2023				$ Change				% Change				$ Change				% Change
Securities AFS-taxable	$	1,866,227			$	1,927,619			$	2,140,505			$	(61,392	)			-3.2	%		$	(274,278	)			-12.8	%
Securities AFS-nontaxable		—				—				4,796				—			n/m					(4,796	)			-100.0	%
Securities HTM-taxable		1,421,246				1,418,476				1,463,086				2,770				0.2	%			(41,840	)			-2.9	%
Securities HTM-nontaxable		112				340				1,718				(228	)			-67.1	%			(1,606	)			-93.5	%
Total securities		3,287,585				3,346,435				3,610,105				(58,850	)			-1.8	%			(322,520	)			-8.9	%
Loans (includes loans held for sale)		13,309,127				13,169,805				12,732,057				139,322				1.1	%			577,070				4.5	%
Fed funds sold and reverse repurchases		110				114				3,275				(4	)			-3.5	%			(3,165	)			-96.6	%
Other earning assets		592,625				571,215				903,027				21,410				3.7	%			(310,402	)			-34.4	%
Total earning assets		17,189,447				17,087,569				17,248,464				101,878				0.6	%			(59,017	)			-0.3	%
Allowance for credit losses (ACL), loans held    for investment (LHFI)		(143,245	)			(138,711	)			(121,960	)			(4,534	)			-3.3	%			(21,285	)			-17.5	%
Other assets		1,740,307				1,730,521				1,648,583				9,786				0.6	%			91,724				5.6	%
Total assets	$	18,786,509			$	18,679,379			$	18,775,087			$	107,130				0.6	%		$	11,422				0.1	%
Interest-bearing demand deposits	$	5,222,369			$	5,291,779			$	4,803,737			$	(69,410	)			-1.3	%		$	418,632				8.7	%
Savings deposits		3,653,966				3,686,027				4,002,134				(32,061	)			-0.9	%			(348,168	)			-8.7	%
Time deposits		3,346,046				3,321,601				2,335,752				24,445				0.7	%			1,010,294				43.3	%
Total interest-bearing deposits		12,222,381				12,299,407				11,141,623				(77,026	)			-0.6	%			1,080,758				9.7	%
Fed funds purchased and repurchases		434,760				428,127				389,834				6,633				1.5	%			44,926				11.5	%
Other borrowings		534,350				463,459				1,330,010				70,891				15.3	%			(795,660	)			-59.8	%
Subordinated notes		123,556				123,501				123,337				55				0.0	%			219				0.2	%
Junior subordinated debt securities		61,856				61,856				61,856				—				0.0	%			—				0.0	%
Total interest-bearing liabilities		13,376,903				13,376,350				13,046,660				553				0.0	%			330,243				2.5	%
Noninterest-bearing deposits		3,183,524				3,120,566				3,595,927				62,958				2.0	%			(412,403	)			-11.5	%
Other liabilities		498,593				505,942				552,209				(7,349	)			-1.5	%			(53,616	)			-9.7	%
Total liabilities		17,059,020				17,002,858				17,194,796				56,162				0.3	%			(135,776	)			-0.8	%
Shareholders' equity		1,727,489				1,676,521				1,580,291				50,968				3.0	%			147,198				9.3	%
Total liabilities and equity	$	18,786,509			$	18,679,379			$	18,775,087			$	107,130				0.6	%		$	11,422				0.1	%
n/m - percentage changes greater than +/- 100% are considered not meaningful

 

 

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													Linked Quarter								Year over Year
PERIOD END BALANCES	6/30/2024				3/31/2024				6/30/2023				$ Change				% Change				$ Change				% Change
Cash and due from banks	$	822,141			$	606,061			$	831,852			$	216,080				35.7	%		$	(9,711	)			-1.2	%
Securities available for sale		1,621,659				1,702,299				1,871,883				(80,640	)			-4.7	%			(250,224	)			-13.4	%
Securities held to maturity		1,380,487				1,415,025				1,458,665				(34,538	)			-2.4	%			(78,178	)			-5.4	%
Loans held for sale (LHFS)		185,698				172,937				181,094				12,761				7.4	%			4,604				2.5	%
Loans held for investment (LHFI)		13,155,418				13,057,943				12,613,967				97,475				0.7	%			541,451				4.3	%
ACL LHFI		(154,685	)			(142,998	)			(129,298	)			(11,687	)			-8.2	%			(25,387	)			-19.6	%
Net LHFI		13,000,733				12,914,945				12,484,669				85,788				0.7	%			516,064				4.1	%
Premises and equipment, net		232,681				232,630				227,293				51				0.0	%			5,388				2.4	%
Mortgage servicing rights		136,658				138,044				134,350				(1,386	)			-1.0	%			2,308				1.7	%
Goodwill		334,605				334,605				334,605				—				0.0	%			—				0.0	%
Identifiable intangible assets		181				208				303				(27	)			-13.0	%			(122	)			-40.3	%
Other real estate		6,586				7,620				1,137				(1,034	)			-13.6	%			5,449			n/m
Operating lease right-of-use assets		36,925				34,324				35,561				2,601				7.6	%			1,364				3.8	%
Other assets		694,133				744,821				783,457				(50,688	)			-6.8	%			(89,324	)			-11.4	%
Assets of discontinued operations		—				73,093				77,757				(73,093	)			-100.0	%			(77,757	)			-100.0	%
Total assets	$	18,452,487			$	18,376,612			$	18,422,626			$	75,875				0.4	%		$	29,861				0.2	%
Deposits:
Noninterest-bearing	$	3,153,506			$	3,039,652			$	3,461,073			$	113,854				3.7	%		$	(307,567	)			-8.9	%
Interest-bearing		12,309,382				12,298,905				11,452,827				10,477				0.1	%			856,555				7.5	%
Total deposits		15,462,888				15,338,557				14,913,900				124,331				0.8	%			548,988				3.7	%
Fed funds purchased and repurchases		314,121				393,215				311,179				(79,094	)			-20.1	%			2,942				0.9	%
Other borrowings		336,687				482,027				1,056,714				(145,340	)			-30.2	%			(720,027	)			-68.1	%
Subordinated notes		123,592				123,537				123,372				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		30,265				33,865				34,841				(3,600	)			-10.6	%			(4,576	)			-13.1	%
Operating lease liabilities		40,517				37,792				38,172				2,725				7.2	%			2,345				6.1	%
Other liabilities		203,420				207,583				299,481				(4,163	)			-2.0	%			(96,061	)			-32.1	%
Liabilities of discontinued operations		—				15,581				11,918				(15,581	)			-100.0	%			(11,918	)			-100.0	%
Total liabilities		16,573,346				16,694,013				16,851,433				(120,667	)			-0.7	%			(278,087	)			-1.7	%
Common stock		12,753				12,747				12,724				6				0.0	%			29				0.2	%
Capital surplus		161,834				160,521				156,834				1,313				0.8	%			5,000				3.2	%
Retained earnings		1,796,111				1,736,485				1,667,339				59,626				3.4	%			128,772				7.7	%
Accumulated other comprehensive    income (loss), net of tax		(91,557	)			(227,154	)			(265,704	)			135,597				59.7	%			174,147				65.5	%
Total shareholders' equity		1,879,141				1,682,599				1,571,193				196,542				11.7	%			307,948				19.6	%
Total liabilities and equity	$	18,452,487			$	18,376,612			$	18,422,626			$	75,875				0.4	%		$	29,861				0.2	%
n/m - percentage changes greater than +/- 100% are considered not meaningful

 

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	Quarter Ended												Linked Quarter								Year over Year
INCOME STATEMENTS	6/30/2024				3/31/2024				6/30/2023				$ Change				% Change				$ Change				% Change
Interest and fees on LHFS & LHFI-FTE	$	216,399			$	209,456			$	192,941			$	6,943				3.3	%		$	23,458				12.2	%
Interest on securities-taxable		17,929				15,634				16,779				2,295				14.7	%			1,150				6.9	%
Interest on securities-tax exempt-FTE		1				4				69				(3	)			-75.0	%			(68	)			-98.6	%
Interest on fed funds sold and reverse repurchases		2				1				45				1				100.0	%			(43	)			-95.6	%
Other interest income		8,124				8,110				12,077				14				0.2	%			(3,953	)			-32.7	%
Total interest income-FTE		242,455				233,205				221,911				9,250				4.0	%			20,544				9.3	%
Interest on deposits		83,681				83,716				54,409				(35	)			0.0	%			29,272				53.8	%
Interest on fed funds purchased and repurchases		5,663				5,591				4,865				72				1.3	%			798				16.4	%
Other interest expense		8,778				7,703				19,350				1,075				14.0	%			(10,572	)			-54.6	%
Total interest expense		98,122				97,010				78,624				1,112				1.1	%			19,498				24.8	%
Net interest income-FTE		144,333				136,195				143,287				8,138				6.0	%			1,046				0.7	%
Provision for credit losses (PCL), LHFI		14,696				7,708				8,211				6,988				90.7	%			6,485				79.0	%
PCL, off-balance sheet credit exposures		(3,600	)			(192	)			245				(3,408	)		n/m					(3,845	)		n/m
PCL, LHFI sale of 1-4 family mortgage loans		8,633				—				—				8,633			n/m					8,633			n/m
Net interest income after provision-FTE		124,604				128,679				134,831				(4,075	)			3.2	%			(10,227	)			-7.6	%
Service charges on deposit accounts		10,924				10,958				10,695				(34	)			-0.3	%			229				2.1	%
Bank card and other fees		9,225				7,428				8,917				1,797				24.2	%			308				3.5	%
Mortgage banking, net		4,204				8,915				6,600				(4,711	)			-52.8	%			(2,396	)			-36.3	%
Wealth management		9,692				8,952				8,882				740				8.3	%			810				9.1	%
Other, net		7,461				3,102				2,735				4,359			n/m					4,726			n/m
Securities gains (losses), net		(182,792	)			—				—				(182,792	)		n/m					(182,792	)		n/m
Total noninterest income (loss)		(141,286	)			39,355				37,829				(180,641	)		n/m					(179,115	)		n/m
Salaries and employee benefits		64,838				65,487				66,799				(649	)			-1.0	%			(1,961	)			-2.9	%
Services and fees		24,743				24,431				27,821				312				1.3	%			(3,078	)			-11.1	%
Net occupancy-premises		7,265				7,270				6,897				(5	)			-0.1	%			368				5.3	%
Equipment expense		6,241				6,325				6,337				(84	)			-1.3	%			(96	)			-1.5	%
Other expense		15,239				16,151				13,767				(912	)			-5.6	%			1,472				10.7	%
Total noninterest expense		118,326				119,664				121,621				(1,338	)			-1.1	%			(3,295	)			-2.7	%
Income (loss) from continuing operations before    income taxes and tax eq adj		(135,008	)			48,370				51,039				(183,378	)		n/m					(186,047	)		n/m
Tax equivalent adjustment		3,304				3,365				3,383				(61	)			-1.8	%			(79	)			-2.3	%
Income (loss) from continuing operations before    income taxes		(138,312	)			45,005				47,656				(183,317	)		n/m					(185,968	)		n/m
Income taxes from continuing operations		(37,707	)			6,832				6,452				(44,539	)		n/m					(44,159	)		n/m
Income (loss) from continuing operations		(100,605	)			38,173				41,204				(138,778	)		n/m					(141,809	)		n/m
Income from discontinued operations    (discont. ops) before income taxes		232,640				4,512				5,127				228,128			n/m					227,513			n/m
Income taxes from discont. ops		58,203				1,150				1,294				57,053			n/m					56,909			n/m
Income from discont. ops		174,437				3,362				3,833				171,075			n/m					170,604			n/m
Net income	$	73,832			$	41,535			$	45,037			$	32,297				77.8	%		$	28,795				63.9	%
Per share data (1)
Basic earnings (loss) per share from    continuing operations	$	(1.64	)		$	0.62			$	0.67			$	(2.26	)		n/m				$	(2.31	)		n/m
Basic earnings per share from discont. ops	$	2.85			$	0.05			$	0.06			$	2.80			n/m				$	2.79			n/m
Basic earnings per share - total	$	1.21			$	0.68			$	0.74			$	0.53				77.9	%		$	0.47				63.5	%
Diluted earnings (loss) per share from    continuing operations	$	(1.64	)		$	0.62			$	0.67			$	(2.26	)		n/m				$	(2.31	)		n/m
Diluted earnings per share from discont. ops	$	2.84			$	0.05			$	0.06			$	2.79			n/m				$	2.78			n/m
Diluted earnings per share - total	$	1.20			$	0.68			$	0.74			$	0.52				76.5	%		$	0.46				62.2	%
Dividends per share	$	0.23			$	0.23			$	0.23				—				0.0	%			—				0.0	%
Weighted average shares outstanding
Basic		61,196,820				61,128,425				61,063,277
Diluted		61,415,957				61,348,364				61,230,031
Period end shares outstanding		61,205,969				61,178,366				61,069,036
(1) Due to rounding, earnings (loss) per share from continuing operations and discontinued operations may not sum to earnings per share from net income.
n/m - percentage changes greater than +/- 100% are considered not meaningful

 

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	Quarter Ended												Linked Quarter								Year over Year
NONPERFORMING ASSETS	6/30/2024				3/31/2024				6/30/2023				$ Change				% Change				$ Change				% Change
Nonaccrual LHFI
Alabama (1)	$	26,222			$	23,261			$	11,058			$	2,961				12.7	%		$	15,164			n/m
Florida		614				585				334				29				5.0	%			280				83.8	%
Mississippi (2)		14,773				59,059				36,288				(44,286	)			-75.0	%			(21,515	)			-59.3	%
Tennessee (3)		2,084				1,800				5,088				284				15.8	%			(3,004	)			-59.0	%
Texas		599				13,646				22,259				(13,047	)			-95.6	%			(21,660	)			-97.3	%
Total nonaccrual LHFI		44,292				98,351				75,027				(54,059	)			-55.0	%			(30,735	)			-41.0	%
Other real estate
Alabama (1)		485				1,050				—				(565	)			-53.8	%			485			n/m
Florida		—				71				—				(71	)			-100.0	%			—			n/m
Mississippi (2)		1,787				2,870				1,137				(1,083	)			-37.7	%			650				57.2	%
Tennessee (3)		86				86				—				—				0.0	%			86			n/m
Texas		4,228				3,543				—				685				19.3	%			4,228			n/m
Total other real estate		6,586				7,620				1,137				(1,034	)			-13.6	%			5,449			n/m
Total nonperforming assets	$	50,878			$	105,971			$	76,164			$	(55,093	)			-52.0	%		$	(25,286	)			-33.2	%
LOANS PAST DUE OVER 90 DAYS
LHFI	$	5,413			$	5,243			$	3,911			$	170				3.2	%		$	1,502				38.4	%
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)	$	58,079			$	56,530			$	35,766			$	1,549				2.7	%		$	22,313				62.4	%
	Quarter Ended												Linked Quarter								Year over Year
ACL LHFI	6/30/2024				3/31/2024				6/30/2023				$ Change				% Change				$ Change				% Change
Beginning Balance	$	142,998			$	139,367			$	122,239			$	3,631				2.6	%		$	20,759				17.0	%
PCL, LHFI		14,696				7,708				8,211				6,988				90.7	%			6,485				79.0	%
PCL, LHFI sale of 1-4 family mortgage loans		8,633				—				—				8,633			n/m					8,633			n/m
Charge-offs, sale of 1-4 family mortgage loans		(8,633	)			—				—				(8,633	)		n/m					(8,633	)		n/m
Charge-offs		(5,120	)			(6,324	)			(2,773	)			1,204				19.0	%			(2,347	)			84.6	%
Recoveries		2,111				2,247				1,621				(136	)			-6.1	%			490				30.2	%
Net (charge-offs) recoveries		(11,642	)			(4,077	)			(1,152	)			(7,565	)		n/m					(10,490	)		n/m
Ending Balance	$	154,685			$	142,998			$	129,298			$	11,687				8.2	%		$	25,387				19.6	%
NET (CHARGE-OFFS) RECOVERIES
Alabama (1)	$	59			$	(341	)		$	(141	)		$	400			n/m				$	200			n/m
Florida		4				277				(35	)			(273	)			-98.6	%			39			n/m
Mississippi (2)		(9,112	)			(1,489	)			(762	)			(7,623	)		n/m					(8,350	)		n/m
Tennessee (3)		(122	)			(179	)			(166	)			57				31.8	%			44				26.5	%
Texas		(2,471	)			(2,345	)			(48	)			(126	)			-5.4	%			(2,423	)		n/m
Total net (charge-offs) recoveries	$	(11,642	)		$	(4,077	)		$	(1,152	)		$	(7,565	)		n/m				$	(10,490	)		n/m
(1) Alabama includes the Georgia Loan Production Office.
(2) Mississippi includes Central and Southern Mississippi Regions.
(3) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.
n/m - percentage changes greater than +/- 100% are considered not meaningful

 

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		Quarter Ended																				Six Months Ended
AVERAGE BALANCES		6/30/2024				3/31/2024				12/31/2023				9/30/2023				6/30/2023				6/30/2024				6/30/2023
Securities AFS-taxable		$	1,866,227			$	1,927,619			$	1,986,825			$	2,049,006			$	2,140,505			$	1,896,923			$	2,163,684
Securities AFS-nontaxable			—				—				4,246				4,779				4,796				—				4,804
Securities HTM-taxable			1,421,246				1,418,476				1,430,169				1,445,895				1,463,086				1,419,861				1,471,140
Securities HTM-nontaxable			112				340				340				907				1,718				226				3,106
Total securities			3,287,585				3,346,435				3,421,580				3,500,587				3,610,105				3,317,010				3,642,734
Loans (includes loans held for sale)			13,309,127				13,169,805				13,010,028				12,926,942				12,732,057				13,239,466				12,631,810
Fed funds sold and reverse repurchases			110				114				121				230				3,275				112				2,829
Other earning assets			592,625				571,215				670,477				682,644				903,027				581,920				780,657
Total earning assets			17,189,447				17,087,569				17,102,206				17,110,403				17,248,464				17,138,508				17,058,030
ACL LHFI			(143,245	)			(138,711	)			(133,742	)			(127,915	)			(121,960	)			(140,978	)			(120,974	)
Other assets			1,740,307				1,730,521				1,749,069				1,721,310				1,648,583				1,735,414				1,700,643
Total assets		$	18,786,509			$	18,679,379			$	18,717,533			$	18,703,798			$	18,775,087			$	18,732,944			$	18,637,699
Interest-bearing demand deposits		$	5,222,369			$	5,291,779			$	5,053,935			$	4,875,714			$	4,803,737			$	5,257,074			$	4,777,591
Savings deposits			3,653,966				3,686,027				3,526,600				3,642,158				4,002,134				3,669,997				4,097,420
Time deposits			3,346,046				3,321,601				3,427,384				3,075,224				2,335,752				3,333,824				2,122,784
Total interest-bearing deposits			12,222,381				12,299,407				12,007,919				11,593,096				11,141,623				12,260,895				10,997,795
Fed funds purchased and repurchases			434,760				428,127				403,041				414,696				389,834				431,444				413,055
Other borrowings			534,350				463,459				590,765				912,151				1,330,010				498,905				1,221,032
Subordinated notes			123,556				123,501				123,446				123,391				123,337				123,529				123,309
Junior subordinated debt securities			61,856				61,856				61,856				61,856				61,856				61,856				61,856
Total interest-bearing liabilities			13,376,903				13,376,350				13,187,027				13,105,190				13,046,660				13,376,629				12,817,047
Noninterest-bearing deposits			3,183,524				3,120,566				3,296,351				3,429,815				3,595,927				3,152,045				3,703,987
Other liabilities			498,593				505,942				641,662				585,908				552,209				502,265				564,450
Total liabilities			17,059,020				17,002,858				17,125,040				17,120,913				17,194,796				17,030,939				17,085,484
Shareholders' equity			1,727,489				1,676,521				1,592,493				1,582,885				1,580,291				1,702,005				1,552,215
Total liabilities and equity		$	18,786,509			$	18,679,379			$	18,717,533			$	18,703,798			$	18,775,087			$	18,732,944			$	18,637,699

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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PERIOD END BALANCES		6/30/2024				3/31/2024				12/31/2023				9/30/2023				6/30/2023
Cash and due from banks		$	822,141			$	606,061			$	975,343			$	750,292			$	831,852
Securities available for sale			1,621,659				1,702,299				1,762,878				1,766,174				1,871,883
Securities held to maturity			1,380,487				1,415,025				1,426,279				1,438,287				1,458,665
LHFS			185,698				172,937				184,812				169,244				181,094
LHFI			13,155,418				13,057,943				12,950,524				12,810,259				12,613,967
ACL LHFI			(154,685	)			(142,998	)			(139,367	)			(134,031	)			(129,298	)
Net LHFI			13,000,733				12,914,945				12,811,157				12,676,228				12,484,669
Premises and equipment, net			232,681				232,630				232,229				230,402				227,293
Mortgage servicing rights			136,658				138,044				131,870				142,379				134,350
Goodwill			334,605				334,605				334,605				334,605				334,605
Identifiable intangible assets			181				208				236				269				303
Other real estate			6,586				7,620				6,867				5,485				1,137
Operating lease right-of-use assets			36,925				34,324				35,711				37,115				35,561
Other assets			694,133				744,821				752,568				770,684				783,457
Assets of discontinued operations			—				73,093				67,634				69,675				77,757
Total assets		$	18,452,487			$	18,376,612			$	18,722,189			$	18,390,839			$	18,422,626
Deposits:
Noninterest-bearing		$	3,153,506			$	3,039,652			$	3,197,620			$	3,320,124			$	3,461,073
Interest-bearing			12,309,382				12,298,905				12,372,143				11,781,799				11,452,827
Total deposits			15,462,888				15,338,557				15,569,763				15,101,923				14,913,900
Fed funds purchased and repurchases			314,121				393,215				405,745				321,799				311,179
Other borrowings			336,687				482,027				483,230				793,193				1,056,714
Subordinated notes			123,592				123,537				123,482				123,427				123,372
Junior subordinated debt securities			61,856				61,856				61,856				61,856				61,856
ACL on off-balance sheet credit exposures			30,265				33,865				34,057				34,945				34,841
Operating lease liabilities			40,517				37,792				39,097				40,150				38,172
Other liabilities			203,420				207,583				331,085				331,066				299,481
Liabilities of discontinued operations			—				15,581				12,027				12,129				11,918
Total liabilities			16,573,346				16,694,013				17,060,342				16,820,488				16,851,433
Common stock			12,753				12,747				12,725				12,724				12,724
Capital surplus			161,834				160,521				159,688				158,316				156,834
Retained earnings			1,796,111				1,736,485				1,709,157				1,687,199				1,667,339
Accumulated other comprehensive income (loss),    net of tax			(91,557	)			(227,154	)			(219,723	)			(287,888	)			(265,704	)
Total shareholders' equity			1,879,141				1,682,599				1,661,847				1,570,351				1,571,193
Total liabilities and equity		$	18,452,487			$	18,376,612			$	18,722,189			$	18,390,839			$	18,422,626

 

 

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		Quarter Ended																				Six Months Ended
INCOME STATEMENTS		6/30/2024				3/31/2024				12/31/2023				9/30/2023				6/30/2023				6/30/2024				6/30/2023
Interest and fees on LHFS & LHFI-FTE		$	216,399			$	209,456			$	210,288			$	206,523			$	192,941			$	425,855			$	371,908
Interest on securities-taxable			17,929				15,634				15,936				16,624				16,779				33,563				33,540
Interest on securities-tax exempt-FTE			1				4				44				58				69				5				161
Interest on fed funds sold and reverse repurchases			2				1				2				3				45				3				75
Other interest income			8,124				8,110				9,918				8,613				12,077				16,234				18,604
Total interest income-FTE			242,455				233,205				236,188				231,821				221,911				475,660				424,288
Interest on deposits			83,681				83,716				80,847				69,797				54,409				167,397				95,307
Interest on fed funds purchased and repurchases			5,663				5,591				5,347				5,375				4,865				11,254				9,697
Other interest expense			8,778				7,703				9,946				14,713				19,350				16,481				34,925
Total interest expense			98,122				97,010				96,140				89,885				78,624				195,132				139,929
Net interest income-FTE			144,333				136,195				140,048				141,936				143,287				280,528				284,359
PCL, LHFI			14,696				7,708				7,585				8,322				8,211				22,404				11,455
PCL, off-balance sheet credit exposures			(3,600	)			(192	)			(888	)			104				245				(3,792	)			(1,997	)
PCL, LHFI sale of 1-4 family mortgage loans			8,633				—				—				—				—				8,633				—
Net interest income after provision-FTE			124,604				128,679				133,351				133,510				134,831				253,283				274,901
Service charges on deposit accounts			10,924				10,958				11,311				11,074				10,695				21,882				21,031
Bank card and other fees			9,225				7,428				8,502				8,217				8,917				16,653				16,720
Mortgage banking, net			4,204				8,915				5,519				6,458				6,600				13,119				14,239
Wealth management			9,692				8,952				8,657				8,773				8,882				18,644				17,662
Other, net			7,461				3,102				2,577				2,399				2,735				10,563				5,255
Securities gains (losses), net			(182,792	)			—				39				—				—				(182,792	)			—
Total noninterest income (loss)			(141,286	)			39,355				36,605				36,921				37,829				(101,931	)			74,907
Salaries and employee benefits			64,838				65,487				69,326				67,374				66,799				130,325				131,571
Services and fees			24,743				24,431				27,478				27,472				27,821				49,174				52,855
Net occupancy-premises			7,265				7,270				7,144				7,151				6,897				14,535				14,212
Equipment expense			6,241				6,325				6,457				6,755				6,337				12,566				12,632
Litigation settlement expense			—				—				—				6,500				—				—				—
Other expense			15,239				16,151				15,790				15,039				13,767				31,390				27,940
Total noninterest expense			118,326				119,664				126,195				130,291				121,621				237,990				239,210
Income (loss) from continuing operations before    income taxes and tax eq adj			(135,008	)			48,370				43,761				40,140				51,039				(86,638	)			110,598
Tax equivalent adjustment			3,304				3,365				3,306				3,299				3,383				6,669				6,860
Income (loss) from continuing operations before    income taxes			(138,312	)			45,005				40,455				36,841				47,656				(93,307	)			103,738
Income taxes from continuing operations			(37,707	)			6,832				6,567				6,288				6,452				(30,875	)			14,889
Income (loss) from continuing operations			(100,605	)			38,173				33,888				30,553				41,204				(62,432	)			88,849
Income from discontinued operations    (discont. ops) before income taxes			232,640				4,512				2,965				4,649				5,127				237,152				8,688
Income taxes from discontinued operations			58,203				1,150				730				1,173				1,294				59,353				2,200
Income from discont. ops			174,437				3,362				2,235				3,476				3,833				177,799				6,488
Net income		$	73,832			$	41,535			$	36,123			$	34,029			$	45,037			$	115,367			$	95,337
Per share data (1)
Basic earnings (loss) per share from continuing    operations		$	(1.64	)		$	0.62			$	0.55			$	0.50			$	0.67			$	(1.02	)		$	1.46
Basic earnings per share from discont. ops		$	2.85			$	0.05			$	0.04			$	0.06			$	0.06			$	2.91			$	0.11
Basic earnings per share - total		$	1.21			$	0.68			$	0.59			$	0.56			$	0.74			$	1.89			$	1.56
Diluted earnings (loss) per share from continuing    operations		$	(1.64	)		$	0.62			$	0.55			$	0.50			$	0.67			$	(1.02	)		$	1.45
Diluted earnings per share from discont. ops		$	2.84			$	0.05			$	0.04			$	0.06			$	0.06			$	2.90			$	0.11
Diluted earnings per share - total		$	1.20			$	0.68			$	0.59			$	0.56			$	0.74			$	1.88			$	1.56
Dividends per share		$	0.23			$	0.23			$	0.23			$	0.23			$	0.23			$	0.46			$	0.46
Weighted average shares outstanding
Basic			61,196,820				61,128,425				61,070,481				61,069,750				61,063,277				61,162,623				61,037,312
Diluted			61,415,957				61,348,364				61,296,840				61,263,032				61,230,031				61,373,850				61,206,799
Period end shares outstanding			61,205,969				61,178,366				61,071,173				61,070,095				61,069,036				61,205,969				61,069,036
(1) Due to rounding, earnings (loss) per share from continuing operations and discontinued operations may not sum to earnings per share from net income.

 

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		Quarter Ended
NONPERFORMING ASSETS		6/30/2024				3/31/2024				12/31/2023				9/30/2023				6/30/2023
Nonaccrual LHFI
Alabama (1)		$	26,222			$	23,261			$	23,271			$	23,530			$	11,058
Florida			614				585				170				151				334
Mississippi (2)			14,773				59,059				54,615				45,050				36,288
Tennessee (3)			2,084				1,800				1,802				1,841				5,088
Texas			599				13,646				20,150				20,327				22,259
Total nonaccrual LHFI			44,292				98,351				100,008				90,899				75,027
Other real estate
Alabama (1)			485				1,050				1,397				315				—
Florida			—				71				—				—				—
Mississippi (2)			1,787				2,870				1,242				942				1,137
Tennessee (3)			86				86				—				—				—
Texas			4,228				3,543				4,228				4,228				—
Total other real estate			6,586				7,620				6,867				5,485				1,137
Total nonperforming assets		$	50,878			$	105,971			$	106,875			$	96,384			$	76,164
LOANS PAST DUE OVER 90 DAYS
LHFI		$	5,413			$	5,243			$	5,790			$	3,804			$	3,911
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase)		$	58,079			$	56,530			$	51,243			$	42,532			$	35,766
		Quarter Ended																				Six Months Ended
ACL LHFI		6/30/2024				3/31/2024				12/31/2023				9/30/2023				6/30/2023				6/30/2024				6/30/2023
Beginning Balance		$	142,998			$	139,367			$	134,031			$	129,298			$	122,239			$	139,367			$	120,214
PCL, LHFI			14,696				7,708				7,585				8,322				8,211				22,404				11,455
PCL, LHFI sale of 1-4 family mortgage loans			8,633				—				—				—				—				8,633				—
Charge-offs, sale of 1-4 family mortgage loans			(8,633	)			—				—				—				—				(8,633	)			—
Charge-offs			(5,120	)			(6,324	)			(4,250	)			(7,496	)			(2,773	)			(11,444	)			(5,769	)
Recoveries			2,111				2,247				2,001				3,907				1,621				4,358				3,398
Net (charge-offs) recoveries			(11,642	)			(4,077	)			(2,249	)			(3,589	)			(1,152	)			(15,719	)			(2,371	)
Ending Balance		$	154,685			$	142,998			$	139,367			$	134,031			$	129,298			$	154,685			$	129,298
NET (CHARGE-OFFS) RECOVERIES
Alabama (1)		$	59			$	(341	)		$	(299	)		$	(165	)		$	(141	)		$	(282	)		$	(409	)
Florida			4				277				180				21				(35	)			281				(71	)
Mississippi (2)			(9,112	)			(1,489	)			(1,943	)			(1,867	)			(762	)			(10,601	)			(1,537	)
Tennessee (3)			(122	)			(179	)			(193	)			2,127				(166	)			(301	)			(290	)
Texas			(2,471	)			(2,345	)			6				(3,705	)			(48	)			(4,816	)			(64	)
Total net (charge-offs) recoveries		$	(11,642	)		$	(4,077	)		$	(2,249	)		$	(3,589	)		$	(1,152	)		$	(15,719	)		$	(2,371	)
(1) Alabama includes the Georgia Loan Production Office.
(2) Mississippi includes Central and Southern Mississippi Regions.
(3) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.

 

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		Quarter Ended																				Six Months Ended
FINANCIAL RATIOS AND OTHER DATA		6/30/2024				3/31/2024				12/31/2023				9/30/2023				6/30/2023				6/30/2024				6/30/2023
Return on average equity from continuing operations			-23.42	%			9.16	%			8.44	%			7.66	%			10.46	%			-7.38	%			11.54	%
Return on average equity from adjusted    continuing operations (1)			9.06	%			9.16	%			8.68	%			8.87	%			10.46	%			9.11	%			11.54	%
Return on average equity - total			17.19	%			9.96	%			9.00	%			8.53	%			11.43	%			13.63	%			12.39	%
Return on average tangible equity from    continuing operations			-29.05	%			11.45	%			10.70	%			9.72	%			13.28	%			-9.18	%			14.75	%
Return on average tangible equity from adjusted    continuing operations (1)			11.14	%			11.45	%			10.98	%			11.25	%			13.28	%			11.29	%			14.75	%
Return on average tangible equity - total			21.91	%			12.98	%			11.92	%			11.32	%			15.18	%			17.56	%			16.56	%
Return on average assets from continuing operations			-2.16	%			0.83	%			0.72	%			0.65	%			0.88	%			-0.67	%			0.97	%
Return on average assets from adjusted    continuing operations (1)			0.87	%			0.83	%			0.74	%			0.75	%			0.88	%			0.85	%			0.97	%
Return on average assets - total			1.58	%			0.89	%			0.77	%			0.72	%			0.96	%			1.24	%			1.03	%
Interest margin - Yield - FTE			5.67	%			5.49	%			5.48	%			5.38	%			5.16	%			5.58	%			5.02	%
Interest margin - Cost			2.30	%			2.28	%			2.23	%			2.08	%			1.83	%			2.29	%			1.65	%
Net interest margin - FTE			3.38	%			3.21	%			3.25	%			3.29	%			3.33	%			3.29	%			3.36	%
Efficiency ratio (2)			63.81	%			66.90	%			69.76	%			68.27	%			66.12	%			65.32	%			65.52	%
Full-time equivalent employees			2,515				2,712				2,757				2,756				2,761
CREDIT QUALITY RATIOS
Net (recoveries) charge-offs (excl sale of    1-4 family mortgage loans) / average loans			0.09	%			0.12	%			0.07	%			0.11	%			0.04	%			0.11	%			0.04	%
PCL, LHFI (excl PCL, LHFI sale of     1-4 family mortgage loans) / average loans			0.44	%			0.24	%			0.23	%			0.26	%			0.26	%			0.34	%			0.18	%
Nonaccrual LHFI / (LHFI + LHFS)			0.33	%			0.74	%			0.76	%			0.70	%			0.59	%
Nonperforming assets / (LHFI + LHFS)			0.38	%			0.80	%			0.81	%			0.74	%			0.60	%
Nonperforming assets / (LHFI + LHFS    + other real estate)			0.38	%			0.80	%			0.81	%			0.74	%			0.60	%
ACL LHFI / LHFI			1.18	%			1.10	%			1.08	%			1.05	%			1.03	%
ACL LHFI-commercial / commercial LHFI			1.05	%			0.93	%			0.85	%			0.86	%			0.84	%
ACL LHFI-consumer / consumer and    home mortgage LHFI			1.59	%			1.63	%			1.81	%			1.66	%			1.60	%
ACL LHFI / nonaccrual LHFI			349.24	%			145.39	%			139.36	%			147.45	%			172.34	%
ACL LHFI / nonaccrual LHFI    (excl individually analyzed loans)			840.20	%			235.29	%			249.31	%			273.60	%			301.44	%
CAPITAL RATIOS
Total equity / total assets			10.18	%			9.16	%			8.88	%			8.54	%			8.53	%
Tangible equity / tangible assets			8.52	%			7.47	%			7.22	%			6.84	%			6.83	%
Tangible equity / risk-weighted assets			10.18	%			8.83	%			8.76	%			8.16	%			8.26	%
Tier 1 leverage ratio			9.29	%			8.76	%			8.62	%			8.49	%			8.35	%
Common equity tier 1 capital ratio			10.92	%			10.12	%			10.04	%			9.89	%			9.87	%
Tier 1 risk-based capital ratio			11.31	%			10.51	%			10.44	%			10.29	%			10.27	%
Total risk-based capital ratio			13.29	%			12.42	%			12.29	%			12.11	%			12.08	%
STOCK PERFORMANCE
Market value-Close		$	30.04			$	28.11			$	27.88			$	21.73			$	21.12
Book value		$	30.70			$	27.50			$	27.21			$	25.71			$	25.73
Tangible book value		$	25.23			$	22.03			$	21.73			$	20.23			$	20.24
(1) Adjusted continuing operations excludes significant non-routine transactions. See Note 7 - Non-GAAP Financials Measures
in the Notes to the Consolidated Financials.
(2) See Note 7 – Non-GAAP Financial Measures in the Notes to Consolidated Financials for Trustmark’s efficiency ratio calculation.

 

 

 

 

 

 

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Note 1 - Significant Non-Routine Transactions

Trustmark completed the following significant non-routine transactions during the second quarter of 2024:

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:

		6/30/2024				3/31/2024				12/31/2023				9/30/2023				6/30/2023
SECURITIES AVAILABLE FOR SALE
U.S. Treasury securities		$	172,955			$	372,424			$	372,368			$	363,476			$	362,966
U.S. Government agency obligations			—				5,594				5,792				6,780				6,999
Obligations of states and political subdivisions			—				—				—				4,642				4,813
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA			23,489				22,232				23,135				22,881				25,336
Issued by FNMA and FHLMC			1,060,869				1,129,521				1,176,798				1,171,521				1,250,435
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA			—				79,099				86,074				90,402				98,388
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA			364,346				93,429				98,711				106,472				122,946
Total securities available for sale		$	1,621,659			$	1,702,299			$	1,762,878			$	1,766,174			$	1,871,883
SECURITIES HELD TO MATURITY
U.S. Treasury securities		$	29,455			$	29,261			$	29,068			$	28,872			$	28,679
Obligations of states and political subdivisions			—				340				340				341				1,180
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA			17,998				18,387				13,005				13,090				13,235
Issued by FNMA and FHLMC			449,781				461,457				469,593				474,003				484,679
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA			138,951				146,447				154,466				162,031				171,002
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA			744,302				759,133				759,807				759,950				759,890
Total securities held to maturity		$	1,380,487			$	1,415,025			$	1,426,279			$	1,438,287			$	1,458,665

At June 30, 2024, 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 $52.1 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 100.0% of the portfolio in U.S. Treasury securities, 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 and Federal Reserve Bank, Trustmark does not hold any other equity investment in a GSE.

 

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Note 3 – Loan Composition

LHFI consisted of the following during the periods presented:

 

LHFI BY TYPE		6/30/2024				3/31/2024				12/31/2023				9/30/2023				6/30/2023
Loans secured by real estate:
Construction, land development and other land loans		$	1,638,972			$	1,539,461			$	1,510,679			$	1,609,326			$	1,722,657
Secured by 1-4 family residential properties			2,878,295				2,891,481				2,904,715				2,893,606				2,854,182
Secured by nonfarm, nonresidential properties			3,598,647				3,543,235				3,489,434				3,569,671				3,471,728
Other real estate secured			1,344,968				1,384,610				1,312,551				1,218,499				954,410
Commercial and industrial loans			1,880,607				1,922,711				1,922,910				1,828,924				1,883,480
Consumer loans			153,316				156,430				161,725				161,940				163,788
State and other political subdivision loans			1,053,015				1,052,844				1,088,466				1,056,569				1,111,710
Other loans and leases			607,598				567,171				560,044				471,724				452,012
LHFI			13,155,418				13,057,943				12,950,524				12,810,259				12,613,967
ACL LHFI			(154,685	)			(142,998	)			(139,367	)			(134,031	)			(129,298	)
Net LHFI		$	13,000,733			$	12,914,945			$	12,811,157			$	12,676,228			$	12,484,669

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:

 

	June 30, 2024
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	$	1,638,972			$	832,891			$	35,147			$	366,893			$	41,046			$	362,995
Secured by 1-4 family residential properties		2,878,295				152,184				60,268				2,546,223				83,469				36,151
Secured by nonfarm, nonresidential properties		3,598,647				1,052,737				226,977				1,512,307				133,835				672,791
Other real estate secured		1,344,968				560,797				1,703				370,854				6,384				405,230
Commercial and industrial loans		1,880,607				676,858				22,064				802,334				151,496				227,855
Consumer loans		153,316				21,806				7,084				93,505				16,814				14,107
State and other political subdivision loans		1,053,015				72,787				51,084				796,947				23,672				108,525
Other loans and leases		607,598				285,089				8,505				202,159				43,062				68,783
Loans	$	13,155,418			$	3,655,149			$	412,832			$	6,691,222			$	499,778			$	1,896,437
CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION
Lots	$	72,597			$	27,887			$	7,284			$	19,673			$	6,506			$	11,247
Development		122,826				56,857				878				25,218				12,502				27,371
Unimproved land		104,436				19,762				12,051				27,149				7,859				37,615
1-4 family construction		316,669				171,134				10,214				91,849				14,179				29,293
Other construction		1,022,444				557,251				4,720				203,004				—				257,469
Construction, land development and other land loans	$	1,638,972			$	832,891			$	35,147			$	366,893			$	41,046			$	362,995
(1) Includes Georgia Loan Production Office.

 

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Note 3 – Loan Composition (continued)

 

		June 30, 2024
		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		$	331,174			$	115,459			$	22,998			$	95,638			$	16,980			$	80,099
Office			257,391				100,383				19,451				72,173				1,546				63,838
Hotel/motel			278,437				128,705				47,859				76,834				25,039				—
Mini-storage			145,336				41,249				1,678				89,905				639				11,865
Industrial			509,631				137,814				18,914				178,304				2,985				171,614
Health care			120,089				92,200				680				24,600				329				2,280
Convenience stores			25,609				2,947				413				13,989				228				8,032
Nursing homes/senior living			527,800				227,059				—				200,257				4,546				95,938
Other			118,763				32,470				8,757				60,783				8,042				8,711
Total non-owner occupied loans			2,314,230				878,286				120,750				812,483				60,334				442,377
Owner-occupied:
Office			146,066				43,808				35,796				36,678				11,224				18,560
Churches			55,308				13,697				4,010				31,652				3,503				2,446
Industrial warehouses			158,118				11,309				4,503				39,103				15,009				88,194
Health care			122,993				11,253				8,210				84,065				2,233				17,232
Convenience stores			132,276				11,807				29,012				57,593				—				33,864
Retail			91,918				9,190				14,488				51,438				8,407				8,395
Restaurants			36,809				4,019				2,870				9,593				16,509				3,818
Auto dealerships			41,127				4,765				187				20,475				15,700				—
Nursing homes/senior living			368,429				52,648				—				289,669				—				26,112
Other			131,373				11,955				7,151				79,558				916				31,793
Total owner-occupied loans			1,284,417				174,451				106,227				699,824				73,501				230,414
Loans secured by nonfarm, nonresidential properties		$	3,598,647			$	1,052,737			$	226,977			$	1,512,307			$	133,835			$	672,791
(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																				Six Months Ended
		6/30/2024				3/31/2024				12/31/2023				9/30/2023				6/30/2023				6/30/2024				6/30/2023
Securities – taxable			2.19	%			1.88	%			1.85	%			1.89	%			1.87	%			2.03	%			1.86	%
Securities – nontaxable			3.59	%			4.73	%			3.81	%			4.05	%			4.25	%			4.45	%			4.10	%
Securities – total			2.19	%			1.88	%			1.85	%			1.89	%			1.87	%			2.04	%			1.87	%
LHFI & LHFS			6.54	%			6.40	%			6.41	%			6.34	%			6.08	%			6.47	%			5.94	%
Fed funds sold & reverse repurchases			7.31	%			3.53	%			6.56	%			5.17	%			5.51	%			5.39	%			5.35	%
Other earning assets			5.51	%			5.71	%			5.87	%			5.01	%			5.36	%			5.61	%			4.81	%
Total earning assets			5.67	%			5.49	%			5.48	%			5.38	%			5.16	%			5.58	%			5.02	%
Interest-bearing deposits			2.75	%			2.74	%			2.67	%			2.39	%			1.96	%			2.75	%			1.75	%
Fed funds purchased & repurchases			5.24	%			5.25	%			5.26	%			5.14	%			5.01	%			5.25	%			4.73	%
Other borrowings			4.91	%			4.78	%			5.08	%			5.32	%			5.12	%			4.84	%			5.01	%
Total interest-bearing liabilities			2.95	%			2.92	%			2.89	%			2.72	%			2.42	%			2.93	%			2.20	%
Total Deposits			2.18	%			2.18	%			2.10	%			1.84	%			1.48	%			2.18	%			1.31	%
Net interest margin			3.38	%			3.21	%			3.25	%			3.29	%			3.33	%			3.29	%			3.36	%

 

 

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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.

The net interest margin increased 17 basis points when compared to the first quarter of 2024, totaling 3.38% for the second quarter of 2024, primarily due to increased yields on the securities portfolio and the loans held for investment and held for sale portfolio as well as the costs of interest-bearing deposits remaining relatively flat.

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 $4.5 million during the second quarter of 2024.

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

		Quarter Ended																				Six Months Ended
		6/30/2024				3/31/2024				12/31/2023				9/30/2023				6/30/2023				6/30/2024				6/30/2023
Mortgage servicing income, net		$	6,993			$	6,934			$	6,731			$	6,916			$	6,764			$	13,927			$	13,549
Change in fair value-MSR from runoff			(3,447	)			(1,926	)			(2,972	)			(3,203	)			(2,710	)			(5,373	)			(3,855	)
Gain on sales of loans, net			5,151				5,009				3,913				3,748				3,887				10,160				7,684
Mortgage banking income before hedge    ineffectiveness			8,697				10,017				7,672				7,461				7,941				18,714				17,378
Change in fair value-MSR from market changes			(1,626	)			5,123				(10,224	)			6,809				5,898				3,497				1,926
Change in fair value of derivatives			(2,867	)			(6,225	)			8,071				(7,812	)			(7,239	)			(9,092	)			(5,065	)
Net positive (negative) hedge ineffectiveness			(4,493	)			(1,102	)			(2,153	)			(1,003	)			(1,341	)			(5,595	)			(3,139	)
Mortgage banking, net		$	4,204			$	8,915			$	5,519			$	6,458			$	6,600			$	13,119			$	14,239

 

 

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Note 6 – Other Noninterest Income and Expense

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

		Quarter Ended																				Six Months Ended
		6/30/2024				3/31/2024				12/31/2023				9/30/2023				6/30/2023				6/30/2024				6/30/2023
Partnership amortization for tax credit purposes		$	(1,824	)		$	(1,834	)		$	(2,013	)		$	(1,995	)		$	(2,019	)		$	(3,658	)		$	(3,980	)
Increase in life insurance cash surrender value			1,860				1,844				1,825				1,784				1,716				3,704				3,409
Loss on sale of 1-4 family mortgage loans			(4,798	)			—				—				—				—				(4,798	)			—
Visa C shares fair value adjustment			8,056				—				—				—				—				8,056				—
Other miscellaneous income			4,167				3,092				2,765				2,610				3,038				7,259				5,826
Total other, net		$	7,461			$	3,102			$	2,577			$	2,399			$	2,735			$	10,563			$	5,255

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																				Six Months Ended
		6/30/2024				3/31/2024				12/31/2023				9/30/2023				6/30/2023				6/30/2024				6/30/2023
Loan expense		$	2,880			$	2,955			$	2,380			$	3,130			$	3,066			$	5,835			$	5,604
Amortization of intangibles			27				28				33				34				34				55				223
FDIC assessment expense			4,816				4,509				4,844				3,765				2,550				9,325				4,920
Other real estate expense, net			327				671				(184	)			(40	)			171				998				343
Other miscellaneous expense			7,189				7,988				8,717				8,150				7,946				15,177				16,850
Total other expense		$	15,239			$	16,151			$	15,790			$	15,039			$	13,767			$	31,390			$	27,940

 

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.

 

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Note 7 – Non-GAAP Financial Measures (continued)

 

 

				Quarter Ended																				Six Months Ended
				6/30/2024				3/31/2024				12/31/2023				9/30/2023				6/30/2023				6/30/2024				6/30/2023
TANGIBLE EQUITY
AVERAGE BALANCES
Total shareholders' equity				$	1,727,489			$	1,676,521			$	1,592,493			$	1,582,885			$	1,580,291			$	1,702,005			$	1,552,215
Less: Goodwill					(334,605	)			(334,605	)			(334,605	)			(334,605	)			(334,605	)			(334,605	)			(334,605	)
Identifiable intangible assets					(195	)			(224	)			(253	)			(287	)			(320	)			(210	)			(381	)
Total average tangible equity				$	1,392,689			$	1,341,692			$	1,257,635			$	1,247,993			$	1,245,366			$	1,367,190			$	1,217,229
PERIOD END BALANCES
Total shareholders' equity				$	1,879,141			$	1,682,599			$	1,661,847			$	1,570,351			$	1,571,193
Less: Goodwill					(334,605	)			(334,605	)			(334,605	)			(334,605	)			(334,605	)
Identifiable intangible assets					(181	)			(208	)			(236	)			(269	)			(303	)
Total tangible equity		(a)		$	1,544,355			$	1,347,786			$	1,327,006			$	1,235,477			$	1,236,285
TANGIBLE ASSETS
Total assets				$	18,452,487			$	18,376,612			$	18,722,189			$	18,390,839			$	18,422,626
Less: Goodwill					(334,605	)			(334,605	)			(334,605	)			(334,605	)			(334,605	)
Identifiable intangible assets					(181	)			(208	)			(236	)			(269	)			(303	)
Total tangible assets		(b)		$	18,117,701			$	18,041,799			$	18,387,348			$	18,055,965			$	18,087,718
Risk-weighted assets		(c)		$	15,165,038			$	15,257,385			$	15,153,263			$	15,143,531			$	14,966,614
NET INCOME (LOSS) ADJUSTED FOR INTANGIBLE AMORTIZATION
Net income (loss) from continuing operations				$	(100,605	)		$	38,173			$	33,888			$	30,553			$	41,204			$	(62,432	)		$	88,849
Plus: Intangible amortization net of tax from    continuing operations					20				20				25				25				25				40				167
Net income (loss) adjusted for intangible amortization				$	(100,585	)		$	38,193			$	33,913			$	30,578			$	41,229			$	(62,392	)		$	89,016
Period end common shares outstanding		(d)			61,205,969				61,178,366				61,071,173				61,070,095				61,069,036
TANGIBLE COMMON EQUITY MEASUREMENTS
Return on average tangible equity from    continuing operations (1)					-29.05	%			11.45	%			10.70	%			9.72	%			13.28	%			-9.18	%			14.75	%
Tangible equity/tangible assets		(a)/(b)			8.52	%			7.47	%			7.22	%			6.84	%			6.83	%
Tangible equity/risk-weighted assets		(a)/(c)			10.18	%			8.83	%			8.76	%			8.16	%			8.26	%
Tangible book value		(a)/(d)*1,000		$	25.23			$	22.03			$	21.73			$	20.23			$	20.24
COMMON EQUITY TIER 1 CAPITAL (CET1)
Total shareholders' equity				$	1,879,141			$	1,682,599			$	1,661,847			$	1,570,351			$	1,571,193
CECL transition adjustment					6,500				6,500				13,000				13,000				13,000
AOCI-related adjustments					91,557				227,154				219,723				287,888				265,704
CET1 adjustments and deductions:
Goodwill net of associated deferred    tax liabilities (DTLs)					(320,758	)			(370,205	)			(370,212	)			(370,219	)			(370,227	)
Other adjustments and deductions    for CET1 (2)					(847	)			(2,588	)			(2,693	)			(2,803	)			(2,915	)
CET1 capital		(e)			1,655,593				1,543,460				1,521,665				1,498,217				1,476,755
Additional tier 1 capital instruments    plus related surplus					60,000				60,000				60,000				60,000				60,000
Tier 1 capital				$	1,715,593			$	1,603,460			$	1,581,665			$	1,558,217			$	1,536,755
Common equity tier 1 capital ratio		(e)/(c)			10.92	%			10.12	%			10.04	%			9.89	%			9.87	%

 

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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																				Six Months Ended
				6/30/2024				3/31/2024				12/31/2023				9/30/2023				6/30/2023				6/30/2024				6/30/2023
Net interest income (GAAP)			(a)	$	141,029			$	132,830			$	136,742			$	138,637			$	139,904			$	273,859			$	277,499
Noninterest income (loss) (GAAP)					(141,286	)			39,355				36,605				36,921				37,829				(101,931	)			74,907
Add:	Loss on sale of 1-4 family mortgage loans (incl in Other, net)				4,798				—				—				—				—				4,798				—
	Visa C shares fair value adjustment (incl in Other, net)				(8,056	)			—				—				—				—				(8,056	)			—
	Securities (gains) losses, net				182,792				—				—				—				—				182,792				—
Noninterest income from adjusted continuing    operations (Non-GAAP)			(b)	$	38,248			$	39,355			$	36,605			$	36,921			$	37,829			$	77,603			$	74,907
Adjusted pre-provision revenue			(a)+(b)=(c)	$	179,277			$	172,185			$	173,347			$	175,558			$	177,733			$	351,462			$	352,406
Noninterest expense (GAAP)				$	118,326			$	119,664			$	126,195			$	130,291			$	121,621			$	237,990			$	239,210
Less:	Reduction in force expense (incl in Salaries and employee benefits)				—				—				(1,406	)			—				—				—				—
	Litigation settlement expense				—				—				—				(6,500	)			—				—				—
Noninterest expense from adjusted continuing    operations (Non-GAAP)			(d)	$	118,326			$	119,664			$	124,789			$	123,791			$	121,621			$	237,990			$	239,210
PPNR (Non-GAAP)			(c)-(d)	$	60,951			$	52,521			$	48,558			$	51,767			$	56,112			$	113,472			$	113,196

 

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

 

	Quarter Ended																				Six Months Ended
	6/30/2024				3/31/2024				12/31/2023				9/30/2023				6/30/2023				6/30/2024				6/30/2023
Net income (loss) (GAAP) from continuing operations	$	(100,605	)		$	38,173			$	33,888			$	30,553			$	41,204			$	(62,432	)		$	88,849
Significant non-routine transactions (net of taxes):
PCL, LHFI sale of nonperforming 1-4 family		6,475				—				—				—				—				6,475				—
Loss on sale of 1-4 family mortgage loans		3,598				—				—				—				—				3,598				—
Visa C shares fair value adjustment		(6,042	)			—				—				—				—				(6,042	)			—
Securities gains (losses), net		137,094				—				—				—				—				137,094				—
Reduction in force expense		—				—				1,055				—				—				—				—
Litigation settlement expense		—				—				—				4,875				—				—				—
Net income adjusted for significant non-routine    transactions (Non-GAAP)	$	40,520			$	38,173			$	34,943			$	35,428			$	41,204			$	78,693			$	88,849
Diluted EPS from adjusted continuing operations	$	0.66			$	0.62			$	0.57			$	0.58			$	0.67			$	1.28			$	1.45
FINANCIAL RATIOS - REPORTED (GAAP)
Return on average equity from continuing operations		-23.42	%			9.16	%			8.44	%			7.66	%			10.46	%			-7.38	%			11.54	%
Return on average tangible equity from continuing operations		-29.05	%			11.45	%			10.70	%			9.72	%			13.28	%			-9.18	%			14.75	%
Return on average assets from continuing operations		-2.16	%			0.83	%			0.72	%			0.65	%			0.88	%			-0.67	%			0.97	%
FINANCIAL RATIOS - ADJUSTED (NON-GAAP)
Return on average equity from adjusted continuing operations		9.06	%			9.16	%			8.68	%			8.87	%			10.46	%			9.11	%			11.54	%
Return on average tangible equity from adjusted    continuing operations		11.14	%			11.45	%			10.98	%			11.25	%			13.28	%			11.29	%			14.75	%
Return on average assets from adjusted continuing operations		0.87	%			0.83	%			0.74	%			0.75	%			0.88	%			0.85	%			0.97	%

 

 

 

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Note 7 – Non-GAAP Financial Measures (continued)

 

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

 

				Quarter Ended																				Six Months Ended
				6/30/2024				3/31/2024				12/31/2023				9/30/2023				6/30/2023				6/30/2024				6/30/2023
Total noninterest expense (GAAP)				$	118,326			$	119,664			$	126,195			$	130,291			$	121,621			$	237,990			$	239,210
Less:	Other real estate expense, net				(327	)			(671	)			184				40				(171	)			(998	)			(343	)
	Amortization of intangibles				(27	)			(28	)			(33	)			(34	)			(34	)			(55	)			(223	)
	Charitable contributions resulting in    state tax credits				(300	)			(300	)			(325	)			(325	)			(325	)			(600	)			(650	)
	Reduction in force expense				—				—				(1,406	)			—				—				—				—
	Litigation settlement expense				—				—				—				(6,500	)			—				—				—
Adjusted noninterest expense (Non-GAAP)			(c)	$	117,672			$	118,665			$	124,615			$	123,472			$	121,091			$	236,337			$	237,994
Net interest income (GAAP)				$	141,029			$	132,830			$	136,742			$	138,637			$	139,904			$	273,859			$	277,499
Add:	Tax equivalent adjustment				3,304				3,365				3,306				3,299				3,383				6,669				6,860
Net interest income-FTE (Non-GAAP)			(a)	$	144,333			$	136,195			$	140,048			$	141,936			$	143,287			$	280,528			$	284,359
Noninterest income (loss) (GAAP)				$	(141,286	)		$	39,355			$	36,605			$	36,921			$	37,829			$	(101,931	)		$	74,907
Add:	Partnership amortization for tax credit purposes				1,824				1,834				2,013				1,995				2,019				3,658				3,980
	Loss on sale of 1-4 family mortgage loans				4,798				—				—				—				—				4,798				—
	Securities (gains) losses, net				182,792				—				(39	)			—				—				182,792				—
Less:	Visa C shares fair value adjustment				(8,056	)			—				—				—				—				(8,056	)			—
Adjusted noninterest income (Non-GAAP)			(b)	$	40,072			$	41,189			$	38,579			$	38,916			$	39,848			$	81,261			$	78,887
Adjusted revenue (Non-GAAP)			(a)+(b)	$	184,405			$	177,384			$	178,627			$	180,852			$	183,135			$	361,789			$	363,246
Efficiency ratio (Non-GAAP)			(c)/((a)+(b))		63.81	%			66.90	%			69.76	%			68.27	%			66.12	%			65.32	%			65.52	%

 

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Exhibit 99.2

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(1)

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(1) (2)

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v3.24.2

Document and Entity Information	Jul. 23, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 23, 2024
Entity Registrant Name	TRUSTMARK CORP
Entity Central Index Key	0000036146
Entity Emerging Growth Company	false
Entity File Number	000-03683
Entity Incorporation, State or Country Code	MS
Entity Tax Identification Number	64-0471500
Entity Address, Address Line One	248 East Capitol Street
Entity Address, City or Town	Jackson
Entity Address, State or Province	MS
Entity Address, Postal Zip Code	39201
City Area Code	601
Local Phone Number	208-5111
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of each class	Common Stock, no par value
Trading Symbol	TRMK
Name of each exchange on which registered	NASDAQ

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