Exhibit 99.1
| News Release |
Trustmark Corporation Announces First Quarter 2019 Financial Results
JACKSON, Miss. – April 23, 2019 – Trustmark Corporation (NASDAQ:TRMK) reported net income of $33.3 million in the first quarter of 2019, representing diluted earnings per share of $0.51. This level of earnings resulted in a return on average tangible equity of 11.55% and a return on average assets of 1.01%. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable June 15, 2019, to shareholders of record on June 1, 2019.
First Quarter Highlights
• | Net interest margin (FTE), excluding acquired loans, was 3.60% in the first quarter, up 10 basis points from the prior quarter and 23 basis points year-over-year |
• | Core noninterest expense, which excludes other real estate expense and intangible amortization, totaled $103.2 million in the first quarter, up 0.6% from the prior quarter and 3.0% year-over-year |
• | Sustained strong credit performance as reflected in the reduction in nonperforming assets |
Gerard R. Host, President and CEO, stated, “We had a great start to the new year as reflected by profitable loan and deposit growth and solid performance in our insurance business. Additionally, we maintained disciplined expense management and continued to effectively deploy capital through our share repurchase program. We remain committed to managing the franchise for the long term, providing investments to promote profitable revenue growth, realigning delivery channels to support changing customer preferences, as well as efficiency programs that enhance long-term shareholder value.”
Balance Sheet Management
• | Loans held for investment increased $159.1 million, or 1.8%, from the prior quarter and $481.0 million, or 5.6%, year-over-year |
• | Deposits increased $170.4 million, or 1.5%, from the prior quarter and $559.0 million, or 5.1%, year-over-year |
• | Continued balance sheet optimization through maturing investment securities run-off and opportunistic share repurchases |
Loans held for investment totaled $9.0 billion at March 31, 2019, an increase of 1.8% from the prior quarter and 5.6% from the comparable period one year earlier. Acquired loans totaled $93.2 million at March 31, 2019, down $13.7 million from the prior quarter. Collectively, loans held for investment and acquired loans totaled $9.1 billion at March 31, 2019, up $145.4 million, or 1.6%, from the prior quarter and $358.8 million, or 4.1%, year-over-year.
Deposits totaled $11.5 billion at March 31, 2019, up $170.4 million, or 1.5%, from the prior quarter. Trustmark continues to maintain an attractive, low-cost deposit base with approximately 58% of deposit balances in checking accounts. Deposit costs remain well controlled with an 8 basis point linked-quarter increase in total deposit cost.
Trustmark’s capital position remained solid, reflecting the consistent profitability of its diversified financial services businesses. During the first quarter, Trustmark repurchased $36.9 million, or approximately 1.2 million of its common shares in open market transactions, completing its $100.0 million share repurchase program announced in 2016. As previously disclosed, Trustmark announced a new $100.0 million share repurchase program effective April 1, 2019, which expires March 31, 2020. This repurchase program, which is subject to market conditions and management discretion, will be implemented through open market repurchases or privately negotiated transactions. At March 31, 2019, Trustmark’s tangible equity to tangible assets ratio was 9.15%, while the total risk-based capital ratio was 13.21%.
Credit Quality
• | Nonaccrual loans declined 8.4% and 17.9% from the prior quarter and year-over-year, respectively |
• | Other real estate decreased 7.3% and 18.7% from the prior quarter and year-over-year, respectively |
• | Net charge-offs totaled $1.9 million during the first quarter, representing 0.09% of average loans |
Nonperforming loans totaled $56.4 million at March 31, 2019, down 8.4% from the prior quarter and 17.9% year-over-year. Other real estate totaled $32.1 million, reflecting a decline of 7.3% from the previous quarter and 18.7% from the same period one year earlier. Collectively, nonperforming assets totaled $88.6 million, reflecting a linked-quarter decrease of 8.0% and year-over-year decrease of 18.2%.
Allocation of Trustmark's $79.0 million allowance for loan losses represented 0.96% of commercial loans and 0.57% of consumer and home mortgage loans, resulting in an allowance to total loans held for investment of 0.88% at March 31, 2019, representing a level management considers commensurate with the inherent risk in the loan portfolio. The allowance for loan losses represented 342.97% of nonperforming loans, excluding specifically reviewed impaired loans.
Unless otherwise noted, all of the above credit quality metrics exclude acquired loans.
Revenue Generation
• | Net interest income (FTE), excluding acquired loans, totaled $106.1 million, up 0.9% from the prior quarter and 5.7% year-over-year |
• | Net interest margin (FTE), excluding acquired loans, was 3.60%, an increase of 10 basis points from the prior quarter and 23 basis points year-over-year |
• | Maturing investment securities run-off continued to be accretive to the net interest margin |
Net interest income (FTE) in the first quarter totaled $108.0 million, resulting in a net interest margin of 3.63%, up 7 basis points from the prior quarter. Relative to the prior quarter, net interest income (FTE) decreased $372 thousand, reflecting a $555 thousand increase in interest income and a $927 thousand increase in interest expense. During the first quarter of 2019, the yield on acquired loans totaled 7.45% and included $243 thousand in recoveries from the settlement of debt, which represented approximately 0.95% of the annualized total acquired loan yield.
Noninterest income in the first quarter decreased 4.7% from the prior quarter to total $41.5 million, as increased insurance commissions were more than offset by lower mortgage banking revenue and seasonal reductions in various fee-income categories. Insurance revenue totaled $10.9 million in the first quarter, up 13.7% from the prior quarter and 15.4% year-over-year; this performance primarily reflects growth in the commercial property and casualty and group health businesses. Mortgage banking revenue totaled $3.4 million in the first quarter, down $2.3 million from the prior quarter and $7.8 million year-over-year. The linked-quarter change reflects an increase in mortgage banking income before hedge ineffectiveness of $1.4 million, which was more than offset by an increase in net negative hedge ineffectiveness of $3.7 million. Mortgage loan production during the first quarter totaled $283.5 million, down 6.7% from the prior quarter and 2.0% year-over-year.
Wealth management revenue in the first quarter totaled $7.5 million, unchanged from the prior quarter and down 1.1% year-over-year. The year-over-year decline is primarily attributable to growth in annuity sales being more than offset by declines in trust management and brokerage revenue. Bank card and other fees declined $559 thousand from the prior quarter due to seasonal reductions in interchange income and other miscellaneous bank fees. Service charges on deposit accounts declined $858 thousand from the prior quarter, reflecting seasonal reductions in NSF and overdraft fees. Other income in the first quarter totaled $2.2 million, up 17.6% from the prior quarter due principally to growth in other miscellaneous income.
Noninterest Expense
• | Total noninterest expense increased 2.0% linked quarter and 3.5% year-over-year to $106.0 million |
• | Core noninterest expense, which excludes other real estate expense and intangible amortization, totaled $103.2 million, up 0.6% from the prior quarter and 3.0% year-over-year |
• | Continued to realign retail delivery channels with changing customer preferences |
Salaries and employee benefits increased $2.2 million from the prior quarter to total $61.0 million. The increase was primarily attributable to growth in insurance commissions as well as a seasonal increase in payroll taxes. Services and fees decreased $942 thousand linked-quarter. Office occupancy and total equipment expense declined $287 thousand and $405 thousand, respectively, linked quarter. Other real estate expense totaled $1.8 million. Other expense totaled $12.2 million, a decline of $42 thousand on a linked-quarter basis.
Additional Information
As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, April 24, 2019 at 8:30 a.m. Central Time to discuss the Corporation’s financial results. Interested parties may listen to the conference call by dialing (877) 317-3051 or by clicking on the link provided under the Investor Relations section of our website at www.trustmark.com. A replay of the conference call will also be available through Wednesday, May 8, 2019, in archived format at the same web address or by calling (877) 344-7529, passcode 10129934.
Trustmark Corporation is a financial services company providing banking and financial solutions through 195 offices in Alabama, Florida, Mississippi, Tennessee and Texas.
Forward-Looking Statements
Certain statements contained in this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by words such as “may,” “hope,” “will,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “continue,” “could,” “future” or the negative of those terms or other words of similar meaning. You should read statements that contain these words carefully because they discuss our future expectations or state other “forward-looking” information. These forward-looking statements include, but are not limited to, statements relating to anticipated future operating and financial performance measures, including net interest margin, credit quality, business initiatives, growth opportunities and growth rates, among other things, and encompass any estimate, prediction, expectation, projection, opinion, anticipation, outlook or statement of belief included therein as well as the management assumptions underlying these forward-looking statements. You should be aware that the occurrence of the events described under the caption “Risk Factors” in Trustmark’s filings with the Securities and Exchange Commission could have an adverse effect on our business, results of operations and financial condition. Should one or more of these risks materialize, or should any such underlying assumptions prove to be significantly different, actual results may vary significantly from those anticipated, estimated, projected or expected.
Risks that could cause actual results to differ materially from current expectations of Management include, but are not limited to, changes in the level of nonperforming assets and charge-offs, local, state and national economic and market conditions, including potential market impacts of efforts by the Federal Reserve Board to reduce the size of its balance sheet, conditions in the housing and real estate markets in the regions in which Trustmark operates and the extent and duration of the current volatility in the credit and financial markets as well as crude oil prices, changes in our ability to measure the fair value of assets in our portfolio, material changes in the level and/or volatility of market interest rates, the performance and demand for the products and services we offer, including the level and timing of withdrawals from our deposit accounts, the costs and effects of litigation and of unexpected or adverse outcomes in such litigation, our ability to attract noninterest-bearing deposits and other low-cost funds, competition in loan and deposit pricing, as well as the entry of new competitors into our markets through de novo expansion and acquisitions, economic conditions, including the potential impact of issues 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, acts of war or terrorism, and other risks described in our filings with the Securities and Exchange Commission.
Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Except as required by law, we undertake no obligation to update or revise any of this information, whether as the result of new information, future events or developments or otherwise.
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Trustmark Investor Contacts: | Trustmark Media Contact: |
Louis E. Greer | Melanie A. Morgan |
Treasurer and | Senior Vice President |
Principal Financial Officer | 601-208-2979 |
601-208-2310 | |
F. Joseph Rein, Jr.
Senior Vice President
601-208-6898
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| | TRUSTMARK CORPORATION AND SUBSIDIARIES |
| CONSOLIDATED FINANCIAL INFORMATION |
| March 31, 2019 |
| ($ in thousands) |
| (unaudited) |
| | | | | | | | | | | | | Linked Quarter | | | Year over Year | |
QUARTERLY AVERAGE BALANCES | 3/31/2019 | | | 12/31/2018 | | | 3/31/2018 | | | $ Change | | | % Change | | | $ Change | | | % Change | |
Securities AFS-taxable | $ | 1,753,268 | | | $ | 1,847,421 | | | $ | 2,141,144 | | | $ | (94,153 | ) | | | -5.1 | % | | $ | (387,876 | ) | | | -18.1 | % |
Securities AFS-nontaxable | | 40,159 | | | | 38,821 | | | | 57,972 | | | | 1,338 | | | | 3.4 | % | | | (17,813 | ) | | | -30.7 | % |
Securities HTM-taxable | | 866,665 | | | | 893,186 | | | | 1,005,721 | | | | (26,521 | ) | | | -3.0 | % | | | (139,056 | ) | | | -13.8 | % |
Securities HTM-nontaxable | | 28,710 | | | | 29,143 | | | | 32,734 | | | | (433 | ) | | | -1.5 | % | | | (4,024 | ) | | | -12.3 | % |
Total securities | | 2,688,802 | | | | 2,808,571 | | | | 3,237,571 | | | | (119,769 | ) | | | -4.3 | % | | | (548,769 | ) | | | -17.0 | % |
Loans (including loans held for sale) | | 9,038,204 | | | | 8,933,501 | | | | 8,636,967 | | | | 104,703 | | | | 1.2 | % | | | 401,237 | | | | 4.6 | % |
Acquired loans | | 104,316 | | | | 127,747 | | | | 243,152 | | | | (23,431 | ) | | | -18.3 | % | | | (138,836 | ) | | | -57.1 | % |
Fed funds sold and rev repos | | 277 | | | | 843 | | | | 478 | | | | (566 | ) | | | -67.1 | % | | | (201 | ) | | | -42.1 | % |
Other earning assets | | 243,493 | | | | 200,282 | | | | 213,985 | | | | 43,211 | | | | 21.6 | % | | | 29,508 | | | | 13.8 | % |
Total earning assets | | 12,075,092 | | | | 12,070,944 | | | | 12,332,153 | | | | 4,148 | | | | 0.0 | % | | | (257,061 | ) | | | -2.1 | % |
Allowance for loan losses | | (82,227 | ) | | | (85,842 | ) | | | (82,304 | ) | | | 3,615 | | | | 4.2 | % | | | 77 | | | | 0.1 | % |
Cash and due from banks | | 423,749 | | | | 339,605 | | | | 336,642 | | | | 84,144 | | | | 24.8 | % | | | 87,107 | | | | 25.9 | % |
Other assets | | 1,023,862 | | | | 1,023,226 | | | | 1,030,738 | | | | 636 | | | | 0.1 | % | | | (6,876 | ) | | | -0.7 | % |
Total assets | $ | 13,440,476 | | | $ | 13,347,933 | | | $ | 13,617,229 | | | $ | 92,543 | | | | 0.7 | % | | $ | (176,753 | ) | | | -1.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | $ | 2,899,467 | | | $ | 2,722,841 | | | $ | 2,404,428 | | | $ | 176,626 | | | | 6.5 | % | | $ | 495,039 | | | | 20.6 | % |
Savings deposits | | 3,786,835 | | | | 3,565,682 | | | | 3,737,507 | | | | 221,153 | | | | 6.2 | % | | | 49,328 | | | | 1.3 | % |
Time deposits | | 1,881,556 | | | | 1,892,983 | | | | 1,748,645 | | | | (11,427 | ) | | | -0.6 | % | | | 132,911 | | | | 7.6 | % |
Total interest-bearing deposits | | 8,567,858 | | | | 8,181,506 | | | | 7,890,580 | | | | 386,352 | | | | 4.7 | % | | | 677,278 | | | | 8.6 | % |
Fed funds purchased and repos | | 84,352 | | | | 340,094 | | | | 277,877 | | | | (255,742 | ) | | | -75.2 | % | | | (193,525 | ) | | | -69.6 | % |
Other borrowings | | 90,804 | | | | 90,252 | | | | 752,157 | | | | 552 | | | | 0.6 | % | | | (661,353 | ) | | | -87.9 | % |
Junior subordinated debt securities | | 61,856 | | | | 61,856 | | | | 61,856 | | | | — | | | | 0.0 | % | | | — | | | | 0.0 | % |
Total interest-bearing liabilities | | 8,804,870 | | | | 8,673,708 | | | | 8,982,470 | | | | 131,162 | | | | 1.5 | % | | | (177,600 | ) | | | -2.0 | % |
Noninterest-bearing deposits | | 2,824,220 | | | | 2,862,161 | | | | 2,881,374 | | | | (37,941 | ) | | | -1.3 | % | | | (57,154 | ) | | | -2.0 | % |
Other liabilities | | 221,199 | | | | 216,932 | | | | 180,871 | | | | 4,267 | | | | 2.0 | % | | | 40,328 | | | | 22.3 | % |
Total liabilities | | 11,850,289 | | | | 11,752,801 | | | | 12,044,715 | | | | 97,488 | | | | 0.8 | % | | | (194,426 | ) | | | -1.6 | % |
Shareholders' equity | | 1,590,187 | | | | 1,595,132 | | | | 1,572,514 | | | | (4,945 | ) | | | -0.3 | % | | | 17,673 | | | | 1.1 | % |
Total liabilities and equity | $ | 13,440,476 | | | $ | 13,347,933 | | | $ | 13,617,229 | | | $ | 92,543 | | | | 0.7 | % | | $ | (176,753 | ) | | | -1.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
n/m - percentage changes greater than +/- 100% are considered not meaningful | | | |
See Notes to Consolidated Financials
| | |
| | TRUSTMARK CORPORATION AND SUBSIDIARIES |
| CONSOLIDATED FINANCIAL INFORMATION |
| March 31, 2019 |
| ($ in thousands) |
| (unaudited) |
| | | | | | | | | | | | | Linked Quarter | | | Year over Year | |
PERIOD END BALANCES | 3/31/2019 | | | 12/31/2018 | | | 3/31/2018 | | | $ Change | | | % Change | | | $ Change | | | % Change | |
Cash and due from banks | $ | 454,047 | | | $ | 349,561 | | | $ | 315,276 | | | $ | 104,486 | | | | 29.9 | % | | $ | 138,771 | | | | 44.0 | % |
Fed funds sold and rev repos | | — | | | | 830 | | | | 112 | | | | (830 | ) | | | -100.0 | % | | | (112 | ) | | | -100.0 | % |
Securities available for sale | | 1,723,445 | | | | 1,811,813 | | | | 2,097,497 | | | | (88,368 | ) | | | -4.9 | % | | | (374,052 | ) | | | -17.8 | % |
Securities held to maturity | | 884,319 | | | | 909,643 | | | | 1,023,975 | | | | (25,324 | ) | | | -2.8 | % | | | (139,656 | ) | | | -13.6 | % |
Loans held for sale (LHFS) | | 172,683 | | | | 153,799 | | | | 163,882 | | | | 18,884 | | | | 12.3 | % | | | 8,801 | | | | 5.4 | % |
Loans held for investment (LHFI) | | 8,995,014 | | | | 8,835,868 | | | | 8,513,985 | | | | 159,146 | | | | 1.8 | % | | | 481,029 | | | | 5.6 | % |
Allowance for loan losses, LHFI | | (79,005 | ) | | | (79,290 | ) | | | (81,235 | ) | | | 285 | | | | 0.4 | % | | | 2,230 | | | | 2.7 | % |
Net LHFI | | 8,916,009 | | | | 8,756,578 | | | | 8,432,750 | | | | 159,431 | | | | 1.8 | % | | | 483,259 | | | | 5.7 | % |
Acquired loans | | 93,201 | | | | 106,932 | | | | 215,476 | | | | (13,731 | ) | | | -12.8 | % | | | (122,275 | ) | | | -56.7 | % |
Allowance for loan losses, acquired loans | | (1,297 | ) | | | (1,231 | ) | | | (4,294 | ) | | | (66 | ) | | | -5.4 | % | | | 2,997 | | | | 69.8 | % |
Net acquired loans | | 91,904 | | | | 105,701 | | | | 211,182 | | | | (13,797 | ) | | | -13.1 | % | | | (119,278 | ) | | | -56.5 | % |
Net LHFI and acquired loans | | 9,007,913 | | | | 8,862,279 | | | | 8,643,932 | | | | 145,634 | | | | 1.6 | % | | | 363,981 | | | | 4.2 | % |
Premises and equipment, net | | 189,743 | | | | 178,668 | | | | 178,584 | | | | 11,075 | | | | 6.2 | % | | | 11,159 | | | | 6.2 | % |
Mortgage servicing rights | | 86,842 | | | | 95,596 | | | | 94,850 | | | | (8,754 | ) | | | -9.2 | % | | | (8,008 | ) | | | -8.4 | % |
Goodwill | | 379,627 | | | | 379,627 | | | | 379,627 | | | | — | | | | 0.0 | % | | | — | | | | 0.0 | % |
Identifiable intangible assets | | 10,092 | | | | 11,112 | | | | 14,963 | | | | (1,020 | ) | | | -9.2 | % | | | (4,871 | ) | | | -32.6 | % |
Other real estate | | 32,139 | | | | 34,668 | | | | 39,554 | | | | (2,529 | ) | | | -7.3 | % | | | (7,415 | ) | | | -18.7 | % |
Operating lease right-of-use assets | | 33,861 | | | | — | | | | — | | | | 33,861 | | | n/m | | | | 33,861 | | | n/m | |
Other assets | | 503,306 | | | | 498,864 | | | | 511,187 | | | | 4,442 | | | | 0.9 | % | | | (7,881 | ) | | | -1.5 | % |
Total assets | $ | 13,478,017 | | | $ | 13,286,460 | | | $ | 13,463,439 | | | $ | 191,557 | | | | 1.4 | % | | $ | 14,578 | | | | 0.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing | $ | 2,867,778 | | | $ | 2,937,594 | | | $ | 3,004,442 | | | $ | (69,816 | ) | | | -2.4 | % | | $ | (136,664 | ) | | | -4.5 | % |
Interest-bearing | | 8,667,037 | | | | 8,426,817 | | | | 7,971,359 | | | | 240,220 | | | | 2.9 | % | | | 695,678 | | | | 8.7 | % |
Total deposits | | 11,534,815 | | | | 11,364,411 | | | | 10,975,801 | | | | 170,404 | | | | 1.5 | % | | | 559,014 | | | | 5.1 | % |
Fed funds purchased and repos | | 46,867 | | | | 50,471 | | | | 274,833 | | | | (3,604 | ) | | | -7.1 | % | | | (227,966 | ) | | | -82.9 | % |
Other borrowings | | 83,265 | | | | 79,885 | | | | 443,618 | | | | 3,380 | | | | 4.2 | % | | | (360,353 | ) | | | -81.2 | % |
Junior subordinated debt securities | | 61,856 | | | | 61,856 | | | | 61,856 | | | | — | | | | 0.0 | % | | | — | | | | 0.0 | % |
Operating lease liabilities | | 34,921 | | | | — | | | | — | | | | 34,921 | | | n/m | | | | 34,921 | | | n/m | |
Other liabilities | | 129,265 | | | | 138,384 | | | | 137,194 | | | | (9,119 | ) | | | -6.6 | % | | | (7,929 | ) | | | -5.8 | % |
Total liabilities | | 11,890,989 | | | | 11,695,007 | | | | 11,893,302 | | | | 195,982 | | | | 1.7 | % | | | (2,313 | ) | | | 0.0 | % |
Common stock | | 13,499 | | | | 13,717 | | | | 14,121 | | | | (218 | ) | | | -1.6 | % | | | (622 | ) | | | -4.4 | % |
Capital surplus | | 272,268 | | | | 309,545 | | | | 366,021 | | | | (37,277 | ) | | | -12.0 | % | | | (93,753 | ) | | | -25.6 | % |
Retained earnings | | 1,342,176 | | | | 1,323,870 | | | | 1,257,881 | | | | 18,306 | | | | 1.4 | % | | | 84,295 | | | | 6.7 | % |
Accum other comprehensive loss, net of tax | | (40,915 | ) | | | (55,679 | ) | | | (67,886 | ) | | | 14,764 | | | | 26.5 | % | | | 26,971 | | | | 39.7 | % |
Total shareholders' equity | | 1,587,028 | | | | 1,591,453 | | | | 1,570,137 | | | | (4,425 | ) | | | -0.3 | % | | | 16,891 | | | | 1.1 | % |
Total liabilities and equity | $ | 13,478,017 | | | $ | 13,286,460 | | | $ | 13,463,439 | | | $ | 191,557 | | | | 1.4 | % | | $ | 14,578 | | | | 0.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
n/m - percentage changes greater than +/- 100% are considered not meaningful | | | |
See Notes to Consolidated Financials
| | |
| | TRUSTMARK CORPORATION AND SUBSIDIARIES |
| CONSOLIDATED FINANCIAL INFORMATION |
| March 31, 2019 |
| ($ in thousands except per share data) |
| (unaudited) |
| Quarter Ended | | | Linked Quarter | | | Year over Year | |
INCOME STATEMENTS | 3/31/2019 | | | 12/31/2018 | | | 3/31/2018 | | | $ Change | | | % Change | | | $ Change | | | % Change | |
Interest and fees on LHFS & LHFI-FTE | $ | 109,890 | | | $ | 107,709 | | | $ | 94,712 | | | $ | 2,181 | | | | 2.0 | % | | $ | 15,178 | | | | 16.0 | % |
Interest and fees on acquired loans | | 1,916 | | | | 3,183 | | | | 4,877 | | | | (1,267 | ) | | | -39.8 | % | | | (2,961 | ) | | | -60.7 | % |
Interest on securities-taxable | | 14,665 | | | | 15,496 | | | | 17,506 | | | | (831 | ) | | | -5.4 | % | | | (2,841 | ) | | | -16.2 | % |
Interest on securities-tax exempt-FTE | | 646 | | | | 617 | | | | 824 | | | | 29 | | | | 4.7 | % | | | (178 | ) | | | -21.6 | % |
Interest on fed funds sold and rev repos | | 2 | | | | 4 | | | | 2 | | | | (2 | ) | | | -50.0 | % | | | — | | | | 0.0 | % |
Other interest income | | 1,603 | | | | 1,158 | | | | 934 | | | | 445 | | | | 38.4 | % | | | 669 | | | | 71.6 | % |
Total interest income-FTE | | 128,722 | | | | 128,167 | | | | 118,855 | | | | 555 | | | | 0.4 | % | | | 9,867 | | | | 8.3 | % |
Interest on deposits | | 19,570 | | | | 17,334 | | | | 9,491 | | | | 2,236 | | | | 12.9 | % | | | 10,079 | | | n/m | |
Interest on fed funds pch and repos | | 288 | | | | 1,528 | | | | 662 | | | | (1,240 | ) | | | -81.2 | % | | | (374 | ) | | | -56.5 | % |
Other interest expense | | 825 | | | | 894 | | | | 3,394 | | | | (69 | ) | | | -7.7 | % | | | (2,569 | ) | | | -75.7 | % |
Total interest expense | | 20,683 | | | | 19,756 | | | | 13,547 | | | | 927 | | | | 4.7 | % | | | 7,136 | | | | 52.7 | % |
Net interest income-FTE | | 108,039 | | | | 108,411 | | | | 105,308 | | | | (372 | ) | | | -0.3 | % | | | 2,731 | | | | 2.6 | % |
Provision for loan losses, LHFI | | 1,611 | | | | 2,192 | | | | 3,961 | | | | (581 | ) | | | -26.5 | % | | | (2,350 | ) | | | -59.3 | % |
Provision for loan losses, acquired loans | | 78 | | | | (247 | ) | | | 150 | | | | 325 | | | n/m | | | | (72 | ) | | | -48.0 | % |
Net interest income after provision-FTE | | 106,350 | | | | 106,466 | | | | 101,197 | | | | (116 | ) | | | -0.1 | % | | | 5,153 | | | | 5.1 | % |
Service charges on deposit accounts | | 10,265 | | | | 11,123 | | | | 10,857 | | | | (858 | ) | | | -7.7 | % | | | (592 | ) | | | -5.5 | % |
Bank card and other fees | | 7,191 | | | | 7,750 | | | | 6,626 | | | | (559 | ) | | | -7.2 | % | | | 565 | | | | 8.5 | % |
Mortgage banking, net | | 3,442 | | | | 5,716 | | | | 11,265 | | | | (2,274 | ) | | | -39.8 | % | | | (7,823 | ) | | | -69.4 | % |
Insurance commissions | | 10,871 | | | | 9,562 | | | | 9,419 | | | | 1,309 | | | | 13.7 | % | | | 1,452 | | | | 15.4 | % |
Wealth management | | 7,483 | | | | 7,504 | | | | 7,567 | | | | (21 | ) | | | -0.3 | % | | | (84 | ) | | | -1.1 | % |
Other, net | | 2,239 | | | | 1,904 | | | | 1,059 | | | | 335 | | | | 17.6 | % | | | 1,180 | | | n/m | |
Nonint inc-excl sec gains (losses), net | | 41,491 | | | | 43,559 | | | | 46,793 | | | | (2,068 | ) | | | -4.7 | % | | | (5,302 | ) | | | -11.3 | % |
Security gains (losses), net | | — | | | | — | | | | — | | | | — | | | n/m | | | | — | | | n/m | |
Total noninterest income | | 41,491 | | | | 43,559 | | | | 46,793 | | | | (2,068 | ) | | | -4.7 | % | | | (5,302 | ) | | | -11.3 | % |
Salaries and employee benefits | | 60,954 | | | | 58,736 | | | | 58,475 | | | | 2,218 | | | | 3.8 | % | | | 2,479 | | | | 4.2 | % |
Services and fees | | 16,968 | | | | 17,910 | | | | 15,746 | | | | (942 | ) | | | -5.3 | % | | | 1,222 | | | | 7.8 | % |
Net occupancy-premises | | 6,454 | | | | 6,741 | | | | 6,502 | | | | (287 | ) | | | -4.3 | % | | | (48 | ) | | | -0.7 | % |
Equipment expense | | 5,924 | | | | 6,329 | | | | 6,099 | | | | (405 | ) | | | -6.4 | % | | | (175 | ) | | | -2.9 | % |
Other real estate expense, net | | 1,752 | | | | 61 | | | | 866 | | | | 1,691 | | | n/m | | | | 886 | | | n/m | |
FDIC assessment expense | | 1,758 | | | | 1,897 | | | | 2,995 | | | | (139 | ) | | | -7.3 | % | | | (1,237 | ) | | | -41.3 | % |
Other expense | | 12,211 | | | | 12,253 | | | | 11,782 | | | | (42 | ) | | | -0.3 | % | | | 429 | | | | 3.6 | % |
Total noninterest expense | | 106,021 | | | | 103,927 | | | | 102,465 | | | | 2,094 | | | | 2.0 | % | | | 3,556 | | | | 3.5 | % |
Income before income taxes and tax eq adj | | 41,820 | | | | 46,098 | | | | 45,525 | | | | (4,278 | ) | | | -9.3 | % | | | (3,705 | ) | | | -8.1 | % |
Tax equivalent adjustment | | 3,231 | | | | 3,231 | | | | 3,215 | | | | — | | | | 0.0 | % | | | 16 | | | | 0.5 | % |
Income before income taxes | | 38,589 | | | | 42,867 | | | | 42,310 | | | | (4,278 | ) | | | -10.0 | % | | | (3,721 | ) | | | -8.8 | % |
Income taxes | | 5,250 | | | | 6,179 | | | | 5,480 | | | | (929 | ) | | | -15.0 | % | | | (230 | ) | | | -4.2 | % |
Net income | $ | 33,339 | | | $ | 36,688 | | | $ | 36,830 | | | $ | (3,349 | ) | | | -9.1 | % | | $ | (3,491 | ) | | | -9.5 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Per share data | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Earnings per share - basic | $ | 0.51 | | | $ | 0.55 | | | $ | 0.54 | | | $ | (0.04 | ) | | | -7.3 | % | | $ | (0.03 | ) | | | -5.6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Earnings per share - diluted | $ | 0.51 | | | $ | 0.55 | | | $ | 0.54 | | | $ | (0.04 | ) | | | -7.3 | % | | $ | (0.03 | ) | | | -5.6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends per share | $ | 0.23 | | | $ | 0.23 | | | $ | 0.23 | | | | — | | | | 0.0 | % | | | — | | | | 0.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | 65,239,470 | | | | 66,839,504 | | | | 67,809,234 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Diluted | | 65,378,500 | | | | 67,028,978 | | | | 67,960,583 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Period end shares outstanding | | 64,789,943 | | | | 65,834,395 | | | | 67,775,068 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
n/m - percentage changes greater than +/- 100% are considered not meaningful | |
See Notes to Consolidated Financials
| | |
| | TRUSTMARK CORPORATION AND SUBSIDIARIES |
| CONSOLIDATED FINANCIAL INFORMATION |
| March 31, 2019 |
| ($ in thousands) |
| (unaudited) |
| Quarter Ended | | | Linked Quarter | | | Year over Year | |
NONPERFORMING ASSETS (1) | 3/31/2019 | | | 12/31/2018 | | | 3/31/2018 | | | $ Change | | | % Change | | | $ Change | | | % Change | |
Nonaccrual loans | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Alabama | $ | 2,971 | | | $ | 3,361 | | | $ | 3,121 | | | $ | (390 | ) | | | -11.6 | % | | $ | (150 | ) | | | -4.8 | % |
Florida | | 408 | | | | 1,175 | | | | 2,116 | | | | (767 | ) | | | -65.3 | % | | | (1,708 | ) | | | -80.7 | % |
Mississippi (2) | | 41,145 | | | | 44,331 | | | | 48,600 | | | | (3,186 | ) | | | -7.2 | % | | | (7,455 | ) | | | -15.3 | % |
Tennessee (3) | | 8,806 | | | | 8,696 | | | | 5,530 | | | | 110 | | | | 1.3 | % | | | 3,276 | | | | 59.2 | % |
Texas | | 3,093 | | | | 4,061 | | | | 9,329 | | | | (968 | ) | | | -23.8 | % | | | (6,236 | ) | | | -66.8 | % |
Total nonaccrual loans | | 56,423 | | | | 61,624 | | | | 68,696 | | | | (5,201 | ) | | | -8.4 | % | | | (12,273 | ) | | | -17.9 | % |
Other real estate | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Alabama | | 6,878 | | | | 6,873 | | | | 8,962 | | | | 5 | | | | 0.1 | % | | | (2,084 | ) | | | -23.3 | % |
Florida | | 8,120 | | | | 8,771 | | | | 12,550 | | | | (651 | ) | | | -7.4 | % | | | (4,430 | ) | | | -35.3 | % |
Mississippi (2) | | 15,421 | | | | 17,255 | | | | 15,737 | | | | (1,834 | ) | | | -10.6 | % | | | (316 | ) | | | -2.0 | % |
Tennessee (3) | | 994 | | | | 1,025 | | | | 1,523 | | | | (31 | ) | | | -3.0 | % | | | (529 | ) | | | -34.7 | % |
Texas | | 726 | | | | 744 | | | | 782 | | | | (18 | ) | | | -2.4 | % | | | (56 | ) | | | -7.2 | % |
Total other real estate | | 32,139 | | | | 34,668 | | | | 39,554 | | | | (2,529 | ) | | | -7.3 | % | | | (7,415 | ) | | | -18.7 | % |
Total nonperforming assets | $ | 88,562 | | | $ | 96,292 | | | $ | 108,250 | | | $ | (7,730 | ) | | | -8.0 | % | | $ | (19,688 | ) | | | -18.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
LOANS PAST DUE OVER 90 DAYS (1) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
LHFI | $ | 670 | | | $ | 856 | | | $ | 1,419 | | | $ | (186 | ) | | | -21.7 | % | | $ | (749 | ) | | | -52.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
LHFS-Guaranteed GNMA serviced loans | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(no obligation to repurchase) | $ | 40,793 | | | $ | 37,384 | | | $ | 34,826 | | | $ | 3,409 | | | | 9.1 | % | | $ | 5,967 | | | | 17.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Quarter Ended | | | Linked Quarter | | | Year over Year | |
ALLOWANCE FOR LOAN LOSSES (1) | 3/31/2019 | | | 12/31/2018 | | | 3/31/2018 | | | $ Change | | | % Change | | | $ Change | | | % Change | |
Beginning Balance | $ | 79,290 | | | $ | 88,874 | | | $ | 76,733 | | | $ | (9,584 | ) | | | -10.8 | % | | $ | 2,557 | | | | 3.3 | % |
Provision for loan losses | | 1,611 | | | | 2,192 | | | | 3,961 | | | | (581 | ) | | | -26.5 | % | | | (2,350 | ) | | | -59.3 | % |
Charge-offs | | (4,033 | ) | | | (16,509 | ) | | | (2,542 | ) | | | 12,476 | | | | 75.6 | % | | | (1,491 | ) | | | -58.7 | % |
Recoveries | | 2,137 | | | | 4,733 | | | | 3,083 | | | | (2,596 | ) | | | -54.8 | % | | | (946 | ) | | | -30.7 | % |
Net (charge-offs) recoveries | | (1,896 | ) | | | (11,776 | ) | | | 541 | | | | 9,880 | | | | 83.9 | % | | | (2,437 | ) | | n/m | |
Ending Balance | $ | 79,005 | | | $ | 79,290 | | | $ | 81,235 | | | $ | (285 | ) | | | -0.4 | % | | $ | (2,230 | ) | | | -2.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
PROVISION FOR LOAN LOSSES (1) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Alabama | $ | 791 | | | $ | (346 | ) | | $ | 618 | | | $ | 1,137 | | | n/m | | | $ | 173 | | | | 28.0 | % |
Florida | | (595 | ) | | | (160 | ) | | | (863 | ) | | | (435 | ) | | n/m | | | | 268 | | | | 31.1 | % |
Mississippi (2) | | 119 | | | | (3,594 | ) | | | 2,664 | | | | 3,713 | | | n/m | | | | (2,545 | ) | | | -95.5 | % |
Tennessee (3) | | (234 | ) | | | 3,039 | | | | (268 | ) | | | (3,273 | ) | | n/m | | | | 34 | | | | 12.7 | % |
Texas | | 1,530 | | | | 3,253 | | | | 1,810 | | | | (1,723 | ) | | | -53.0 | % | | | (280 | ) | | | -15.5 | % |
Total provision for loan losses | $ | 1,611 | | | $ | 2,192 | | | $ | 3,961 | | | $ | (581 | ) | | | -26.5 | % | | $ | (2,350 | ) | | | -59.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET CHARGE-OFFS (RECOVERIES) (1) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Alabama | $ | 15 | | | $ | 203 | | | $ | 84 | | | $ | (188 | ) | | | -92.6 | % | | $ | (69 | ) | | | -82.1 | % |
Florida | | (227 | ) | | | (238 | ) | | | (960 | ) | | | 11 | | | | 4.6 | % | | | 733 | | | | 76.4 | % |
Mississippi (2) | | 2,130 | | | | (1,873 | ) | | | 267 | | | | 4,003 | | | n/m | | | | 1,863 | | | n/m | |
Tennessee (3) | | 50 | | | | 7,875 | | | | 109 | | | | (7,825 | ) | | | -99.4 | % | | | (59 | ) | | | -54.1 | % |
Texas | | (72 | ) | | | 5,809 | | | | (41 | ) | | | (5,881 | ) | | n/m | | | | (31 | ) | | | -75.6 | % |
Total net charge-offs (recoveries) | $ | 1,896 | | | $ | 11,776 | | | $ | (541 | ) | | $ | (9,880 | ) | | | -83.9 | % | | $ | 2,437 | | | n/m | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) Excludes acquired loans. | | | | | |
(2) Mississippi includes Central and Southern Mississippi Regions. | | | | | |
(3) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions. | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
n/m - percentage changes greater than +/- 100% are considered not meaningful | | | | | |
See Notes to Consolidated Financials
| | |
| | TRUSTMARK CORPORATION AND SUBSIDIARIES |
| CONSOLIDATED FINANCIAL INFORMATION |
| March 31, 2019 |
| ($ in thousands) |
| (unaudited) |
| | Quarter Ended | |
AVERAGE BALANCES | | 3/31/2019 | | | 12/31/2018 | | | 9/30/2018 | | | 6/30/2018 | | | 3/31/2018 | |
Securities AFS-taxable | | $ | 1,753,268 | | | $ | 1,847,421 | | | $ | 1,937,807 | | | $ | 2,038,759 | | | $ | 2,141,144 | |
Securities AFS-nontaxable | | | 40,159 | | | | 38,821 | | | | 41,889 | | | | 50,035 | | | | 57,972 | |
Securities HTM-taxable | | | 866,665 | | | | 893,186 | | | | 933,294 | | | | 972,571 | | | | 1,005,721 | |
Securities HTM-nontaxable | | | 28,710 | | | | 29,143 | | | | 29,183 | | | | 30,337 | | | | 32,734 | |
Total securities | | | 2,688,802 | | | | 2,808,571 | | | | 2,942,173 | | | | 3,091,702 | | | | 3,237,571 | |
Loans (including loans held for sale) | | | 9,038,204 | | | | 8,933,501 | | | | 8,907,588 | | | | 8,707,466 | | | | 8,636,967 | |
Acquired loans | | | 104,316 | | | | 127,747 | | | | 147,811 | | | | 202,140 | | | | 243,152 | |
Fed funds sold and rev repos | | | 277 | | | | 843 | | | | 477 | | | | 1,063 | | | | 478 | |
Other earning assets | | | 243,493 | | | | 200,282 | | | | 189,471 | | | | 186,224 | | | | 213,985 | |
Total earning assets | | | 12,075,092 | | | | 12,070,944 | | | | 12,187,520 | | | | 12,188,595 | | | | 12,332,153 | |
Allowance for loan losses | | | (82,227 | ) | | | (85,842 | ) | | | (86,496 | ) | | | (86,315 | ) | | | (82,304 | ) |
Cash and due from banks | | | 423,749 | | | | 339,605 | | | | 330,949 | | | | 319,075 | | | | 336,642 | |
Other assets | | | 1,023,862 | | | | 1,023,226 | | | | 1,035,327 | | | | 1,042,156 | | | | 1,030,738 | |
Total assets | | $ | 13,440,476 | | | $ | 13,347,933 | | | $ | 13,467,300 | | | $ | 13,463,511 | | | $ | 13,617,229 | |
| | | | | | | | | | | | | | | | | | | | |
Interest-bearing demand deposits | | $ | 2,899,467 | | | $ | 2,722,841 | | | $ | 2,602,658 | | | $ | 2,439,777 | | | $ | 2,404,428 | |
Savings deposits | | | 3,786,835 | | | | 3,565,682 | | | | 3,722,533 | | | | 3,860,096 | | | | 3,737,507 | |
Time deposits | | | 1,881,556 | | | | 1,892,983 | | | | 1,851,866 | | | | 1,798,855 | | | | 1,748,645 | |
Total interest-bearing deposits | | | 8,567,858 | | | | 8,181,506 | | | | 8,177,057 | | | | 8,098,728 | | | | 7,890,580 | |
Fed funds purchased and repos | | | 84,352 | | | | 340,094 | | | | 347,489 | | | | 352,256 | | | | 277,877 | |
Other borrowings | | | 90,804 | | | | 90,252 | | | | 187,196 | | | | 249,853 | | | | 752,157 | |
Junior subordinated debt securities | | | 61,856 | | | | 61,856 | | | | 61,856 | | | | 61,856 | | | | 61,856 | |
Total interest-bearing liabilities | | | 8,804,870 | | | | 8,673,708 | | | | 8,773,598 | | | | 8,762,693 | | | | 8,982,470 | |
Noninterest-bearing deposits | | | 2,824,220 | | | | 2,862,161 | | | | 2,894,061 | | | | 2,930,726 | | | | 2,881,374 | |
Other liabilities | | | 221,199 | | | | 216,932 | | | | 202,053 | | | | 188,186 | | | | 180,871 | |
Total liabilities | | | 11,850,289 | | | | 11,752,801 | | | | 11,869,712 | | | | 11,881,605 | | | | 12,044,715 | |
Shareholders' equity | | | 1,590,187 | | | | 1,595,132 | | | | 1,597,588 | | | | 1,581,906 | | | | 1,572,514 | |
Total liabilities and equity | | $ | 13,440,476 | | | $ | 13,347,933 | | | $ | 13,467,300 | | | $ | 13,463,511 | | | $ | 13,617,229 | |
See Notes to Consolidated Financials
| | |
| | TRUSTMARK CORPORATION AND SUBSIDIARIES |
| CONSOLIDATED FINANCIAL INFORMATION |
| March 31, 2019 |
| ($ in thousands) |
| (unaudited) |
PERIOD END BALANCES | | 3/31/2019 | | | 12/31/2018 | | | 9/30/2018 | | | 6/30/2018 | | | 3/31/2018 | |
Cash and due from banks | | $ | 454,047 | | | $ | 349,561 | | | $ | 432,471 | | | $ | 387,119 | | | $ | 315,276 | |
Fed funds sold and rev repos | | | — | | | | 830 | | | | 1,000 | | | | — | | | | 112 | |
Securities available for sale | | | 1,723,445 | | | | 1,811,813 | | | | 1,864,633 | | | | 1,974,675 | | | | 2,097,497 | |
Securities held to maturity | | | 884,319 | | | | 909,643 | | | | 943,883 | | | | 985,845 | | | | 1,023,975 | |
Loans held for sale (LHFS) | | | 172,683 | | | | 153,799 | | | | 182,664 | | | | 196,217 | | | | 163,882 | |
Loans held for investment (LHFI) | | | 8,995,014 | | | | 8,835,868 | | | | 8,747,030 | | | | 8,678,983 | | | | 8,513,985 | |
Allowance for loan losses, LHFI | | | (79,005 | ) | | | (79,290 | ) | | | (88,874 | ) | | | (83,566 | ) | | | (81,235 | ) |
Net LHFI | | | 8,916,009 | | | | 8,756,578 | | | | 8,658,156 | | | | 8,595,417 | | | | 8,432,750 | |
Acquired loans | | | 93,201 | | | | 106,932 | | | | 132,615 | | | | 173,107 | | | | 215,476 | |
Allowance for loan losses, acquired loans | | | (1,297 | ) | | | (1,231 | ) | | | (1,714 | ) | | | (3,046 | ) | | | (4,294 | ) |
Net acquired loans | | | 91,904 | | | | 105,701 | | | | 130,901 | | | | 170,061 | | | | 211,182 | |
Net LHFI and acquired loans | | | 9,007,913 | | | | 8,862,279 | | | | 8,789,057 | | | | 8,765,478 | | | | 8,643,932 | |
Premises and equipment, net | | | 189,743 | | | | 178,668 | | | | 178,739 | | | | 177,686 | | | | 178,584 | |
Mortgage servicing rights | | | 86,842 | | | | 95,596 | | | | 101,374 | | | | 97,411 | | | | 94,850 | |
Goodwill | | | 379,627 | | | | 379,627 | | | | 379,627 | | | | 379,627 | | | | 379,627 | |
Identifiable intangible assets | | | 10,092 | | | | 11,112 | | | | 12,391 | | | | 13,677 | | | | 14,963 | |
Other real estate | | | 32,139 | | | | 34,668 | | | | 36,475 | | | | 39,667 | | | | 39,554 | |
Operating lease right-of-use assets | | | 33,861 | | | | — | | | | — | | | | — | | | | — | |
Other assets | | | 503,306 | | | | 498,864 | | | | 517,498 | | | | 507,863 | | | | 511,187 | |
Total assets | | $ | 13,478,017 | | | $ | 13,286,460 | | | $ | 13,439,812 | | | $ | 13,525,265 | | | $ | 13,463,439 | |
| | | | | | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing | | $ | 2,867,778 | | | $ | 2,937,594 | | | $ | 2,786,539 | | | $ | 2,958,354 | | | $ | 3,004,442 | |
Interest-bearing | | | 8,667,037 | | | | 8,426,817 | | | | 8,170,371 | | | | 8,114,081 | | | | 7,971,359 | |
Total deposits | | | 11,534,815 | | | | 11,364,411 | | | | 10,956,910 | | | | 11,072,435 | | | | 10,975,801 | |
Fed funds purchased and repos | | | 46,867 | | | | 50,471 | | | | 486,865 | | | | 477,891 | | | | 274,833 | |
Other borrowings | | | 83,265 | | | | 79,885 | | | | 190,919 | | | | 187,560 | | | | 443,618 | |
Junior subordinated debt securities | | | 61,856 | | | | 61,856 | | | | 61,856 | | | | 61,856 | | | | 61,856 | |
Operating lease liabilities | | | 34,921 | | | | — | | | | — | | | | — | | | | — | |
Other liabilities | | | 129,265 | | | | 138,384 | | | | 143,658 | | | | 141,451 | | | | 137,194 | |
Total liabilities | | | 11,890,989 | | | | 11,695,007 | | | | 11,840,208 | | | | 11,941,193 | | | | 11,893,302 | |
Common stock | | | 13,499 | | | | 13,717 | | | | 14,089 | | | | 14,089 | | | | 14,121 | |
Capital surplus | | | 272,268 | | | | 309,545 | | | | 362,868 | | | | 361,715 | | | | 366,021 | |
Retained earnings | | | 1,342,176 | | | | 1,323,870 | | | | 1,302,593 | | | | 1,282,007 | | | | 1,257,881 | |
Accum other comprehensive loss, net of tax | | | (40,915 | ) | | | (55,679 | ) | | | (79,946 | ) | | | (73,739 | ) | | | (67,886 | ) |
Total shareholders' equity | | | 1,587,028 | | | | 1,591,453 | | | | 1,599,604 | | | | 1,584,072 | | | | 1,570,137 | |
Total liabilities and equity | | $ | 13,478,017 | | | $ | 13,286,460 | | | $ | 13,439,812 | | | $ | 13,525,265 | | | $ | 13,463,439 | |
See Notes to Consolidated Financials
| | |
| | TRUSTMARK CORPORATION AND SUBSIDIARIES |
| CONSOLIDATED FINANCIAL INFORMATION |
| March 31, 2019 |
| ($ in thousands except per share data) |
| (unaudited) |
| | Quarter Ended | |
INCOME STATEMENTS | | 3/31/2019 | | | 12/31/2018 | | | 9/30/2018 | | | 6/30/2018 | | | 3/31/2018 | |
Interest and fees on LHFS & LHFI-FTE | | $ | 109,890 | | | $ | 107,709 | | | $ | 105,993 | | | $ | 99,761 | | | $ | 94,712 | |
Interest and fees on acquired loans | | | 1,916 | | | | 3,183 | | | | 4,033 | | | | 5,022 | | | | 4,877 | |
Interest on securities-taxable | | | 14,665 | | | | 15,496 | | | | 16,186 | | | | 16,894 | | | | 17,506 | |
Interest on securities-tax exempt-FTE | | | 646 | | | | 617 | | | | 656 | | | | 733 | | | | 824 | |
Interest on fed funds sold and rev repos | | | 2 | | | | 4 | | | | 3 | | | | 5 | | | | 2 | |
Other interest income | | | 1,603 | | | | 1,158 | | | | 1,050 | | | | 1,054 | | | | 934 | |
Total interest income-FTE | | | 128,722 | | | | 128,167 | | | | 127,921 | | | | 123,469 | | | | 118,855 | |
Interest on deposits | | | 19,570 | | | | 17,334 | | | | 14,972 | | | | 12,139 | | | | 9,491 | |
Interest on fed funds pch and repos | | | 288 | | | | 1,528 | | | | 1,348 | | | | 1,250 | | | | 662 | |
Other interest expense | | | 825 | | | | 894 | | | | 1,467 | | | | 1,713 | | | | 3,394 | |
Total interest expense | | | 20,683 | | | | 19,756 | | | | 17,787 | | | | 15,102 | | | | 13,547 | |
Net interest income-FTE | | | 108,039 | | | | 108,411 | | | | 110,134 | | | | 108,367 | | | | 105,308 | |
Provision for loan losses, LHFI | | | 1,611 | | | | 2,192 | | | | 8,673 | | | | 3,167 | | | | 3,961 | |
Provision for loan losses, acquired loans | | | 78 | | | | (247 | ) | | | (467 | ) | | | (441 | ) | | | 150 | |
Net interest income after provision-FTE | | | 106,350 | | | | 106,466 | | | | 101,928 | | | | 105,641 | | | | 101,197 | |
Service charges on deposit accounts | | | 10,265 | | | | 11,123 | | | | 11,075 | | | | 10,647 | | | | 10,857 | |
Bank card and other fees | | | 7,191 | | | | 7,750 | | | | 7,459 | | | | 7,070 | | | | 6,626 | |
Mortgage banking, net | | | 3,442 | | | | 5,716 | | | | 8,647 | | | | 9,046 | | | | 11,265 | |
Insurance commissions | | | 10,871 | | | | 9,562 | | | | 10,765 | | | | 10,735 | | | | 9,419 | |
Wealth management | | | 7,483 | | | | 7,504 | | | | 7,789 | | | | 7,478 | | | | 7,567 | |
Other, net | | | 2,239 | | | | 1,904 | | | | 1,358 | | | | 2,415 | | | | 1,059 | |
Nonint inc-excl sec gains (losses), net | | | 41,491 | | | | 43,559 | | | | 47,093 | | | | 47,391 | | | | 46,793 | |
Security gains (losses), net | | | — | | | | — | | | | — | | | | — | | | | — | |
Total noninterest income | | | 41,491 | | | | 43,559 | | | | 47,093 | | | | 47,391 | | | | 46,793 | |
Salaries and employee benefits | | | 60,954 | | | | 58,736 | | | | 60,847 | | | | 59,975 | | | | 58,475 | |
Services and fees | | | 16,968 | | | | 17,910 | | | | 16,404 | | | | 16,322 | | | | 15,746 | |
Net occupancy-premises | | | 6,454 | | | | 6,741 | | | | 6,910 | | | | 6,550 | | | | 6,502 | |
Equipment expense | | | 5,924 | | | | 6,329 | | | | 6,200 | | | | 6,202 | | | | 6,099 | |
Other real estate expense, net | | | 1,752 | | | | 61 | | | | 1,168 | | | | (93 | ) | | | 866 | |
FDIC assessment expense | | | 1,758 | | | | 1,897 | | | | 1,999 | | | | 2,538 | | | | 2,995 | |
Other expense | | | 12,211 | | | | 12,253 | | | | 11,695 | | | | 12,306 | | | | 11,782 | |
Total noninterest expense | | | 106,021 | | | | 103,927 | | | | 105,223 | | | | 103,800 | | | | 102,465 | |
Income before income taxes and tax eq adj | | | 41,820 | | | | 46,098 | | | | 43,798 | | | | 49,232 | | | | 45,525 | |
Tax equivalent adjustment | | | 3,231 | | | | 3,231 | | | | 3,151 | | | | 3,203 | | | | 3,215 | |
Income before income taxes | | | 38,589 | | | | 42,867 | | | | 40,647 | | | | 46,029 | | | | 42,310 | |
Income taxes | | | 5,250 | | | | 6,179 | | | | 4,394 | | | | 6,216 | | | | 5,480 | |
Net income | | $ | 33,339 | | | $ | 36,688 | | | $ | 36,253 | | | $ | 39,813 | | | $ | 36,830 | |
| | | | | | | | | | | | | | | | | | | | |
Per share data | | | | | | | | | | | | | | | | | | | | |
Earnings per share - basic | | $ | 0.51 | | | $ | 0.55 | | | $ | 0.54 | | | $ | 0.59 | | | $ | 0.54 | |
| | | | | | | | | | | | | | | | | | | | |
Earnings per share - diluted | | $ | 0.51 | | | $ | 0.55 | | | $ | 0.54 | | | $ | 0.59 | | | $ | 0.54 | |
| | | | | | | | | | | | | | | | | | | | |
Dividends per share | | $ | 0.23 | | | $ | 0.23 | | | $ | 0.23 | | | $ | 0.23 | | | $ | 0.23 | |
| | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding | | | | | | | | | | | | | | | | | | | | |
Basic | | | 65,239,470 | | | | 66,839,504 | | | | 67,621,345 | | | | 67,758,097 | | | | 67,809,234 | |
| | | | | | | | | | | | | | | | | | | | |
Diluted | | | 65,378,500 | | | | 67,028,978 | | | | 67,796,346 | | | | 67,907,267 | | | | 67,960,583 | |
| | | | | | | | | | | | | | | | | | | | |
Period end shares outstanding | | | 64,789,943 | | | | 65,834,395 | | | | 67,621,369 | | | | 67,621,111 | | | | 67,775,068 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
See Notes to Consolidated Financials
| | TRUSTMARK CORPORATION AND SUBSIDIARIES |
| CONSOLIDATED FINANCIAL INFORMATION |
| March 31, 2019 |
| ($ in thousands) |
| (unaudited) |
| | Quarter Ended | |
NONPERFORMING ASSETS (1) | | 3/31/2019 | | | 12/31/2018 | | | 9/30/2018 | | | 6/30/2018 | | | 3/31/2018 | |
Nonaccrual loans | | | | | | | | | | | | | | | | | | | | |
Alabama | | $ | 2,971 | | | $ | 3,361 | | | $ | 3,953 | | | $ | 3,685 | | | $ | 3,121 | |
Florida | | | 408 | | | | 1,175 | | | | 1,180 | | | | 2,978 | | | | 2,116 | |
Mississippi (2) | | | 41,145 | | | | 44,331 | | | | 41,351 | | | | 39,006 | | | | 48,600 | |
Tennessee (3) | | | 8,806 | | | | 8,696 | | | | 13,195 | | | | 5,338 | | | | 5,530 | |
Texas | | | 3,093 | | | | 4,061 | | | | 8,157 | | | | 10,356 | | | | 9,329 | |
Total nonaccrual loans | | | 56,423 | | | | 61,624 | | | | 67,836 | | | | 61,363 | | | | 68,696 | |
Other real estate | | | | | | | | | | | | | | | | | | | | |
Alabama | | | 6,878 | | | | 6,873 | | | | 7,526 | | | | 8,290 | | | | 8,962 | |
Florida | | | 8,120 | | | | 8,771 | | | | 8,931 | | | | 9,789 | | | | 12,550 | |
Mississippi (2) | | | 15,421 | | | | 17,255 | | | | 18,191 | | | | 19,358 | | | | 15,737 | |
Tennessee (3) | | | 994 | | | | 1,025 | | | | 1,083 | | | | 1,486 | | | | 1,523 | |
Texas | | | 726 | | | | 744 | | | | 744 | | | | 744 | | | | 782 | |
Total other real estate | | | 32,139 | | | | 34,668 | | | | 36,475 | | | | 39,667 | | | | 39,554 | |
Total nonperforming assets | | $ | 88,562 | | | $ | 96,292 | | | $ | 104,311 | | | $ | 101,030 | | | $ | 108,250 | |
| | | | | | | | | | | | | | | | | | | | |
LOANS PAST DUE OVER 90 DAYS (1) | | | | | | | | | | | | | | | | | | | | |
LHFI | | $ | 670 | | | $ | 856 | | | $ | 726 | | | $ | 529 | | | $ | 1,419 | |
| | | | | | | | | | | | | | | | | | | | |
LHFS-Guaranteed GNMA serviced loans | | | | | | | | | | | | | | | | | | | | |
(no obligation to repurchase) | | $ | 40,793 | | | $ | 37,384 | | | $ | 34,115 | | | $ | 34,693 | | | $ | 34,826 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | Quarter Ended | |
ALLOWANCE FOR LOAN LOSSES (1) | | 3/31/2019 | | | 12/31/2018 | | | 9/30/2018 | | | 6/30/2018 | | | 3/31/2018 | |
Beginning Balance | | $ | 79,290 | | | $ | 88,874 | | | $ | 83,566 | | | $ | 81,235 | | | $ | 76,733 | |
Transfers (4) | | | — | | | | — | | | | 772 | | | | 782 | | | | — | |
Provision for loan losses | | | 1,611 | | | | 2,192 | | | | 8,673 | | | | 3,167 | | | | 3,961 | |
Charge-offs | | | (4,033 | ) | | | (16,509 | ) | | | (7,017 | ) | | | (3,421 | ) | | | (2,542 | ) |
Recoveries | | | 2,137 | | | | 4,733 | | | | 2,880 | | | | 1,803 | | | | 3,083 | |
Net (charge-offs) recoveries | | | (1,896 | ) | | | (11,776 | ) | | | (4,137 | ) | | | (1,618 | ) | | | 541 | |
Ending Balance | | $ | 79,005 | | | $ | 79,290 | | | $ | 88,874 | | | $ | 83,566 | | | $ | 81,235 | |
| | | | | | | | | | | | | | | | | | | | |
PROVISION FOR LOAN LOSSES (1) | | | | | | | | | | | | | | | | | | | | |
Alabama | | $ | 791 | | | $ | (346 | ) | | $ | 593 | | | $ | 434 | | | $ | 618 | |
Florida | | | (595 | ) | | | (160 | ) | | | (431 | ) | | | (811 | ) | | | (863 | ) |
Mississippi (2) | | | 119 | | | | (3,594 | ) | | | (1,630 | ) | | | 2,768 | | | | 2,664 | |
Tennessee (3) | | | (234 | ) | | | 3,039 | | | | 8,100 | | | | 82 | | | | (268 | ) |
Texas | | | 1,530 | | | | 3,253 | | | | 2,041 | | | | 694 | | | | 1,810 | |
Total provision for loan losses | | $ | 1,611 | | | $ | 2,192 | | | $ | 8,673 | | | $ | 3,167 | | | $ | 3,961 | |
| | | | | | | | | | | | | | | | | | | | |
NET CHARGE-OFFS (RECOVERIES) (1) | | | | | | | | | | | | | | | | | | | | |
Alabama | | $ | 15 | | | $ | 203 | | | $ | 198 | | | $ | 112 | | | $ | 84 | |
Florida | | | (227 | ) | | | (238 | ) | | | (586 | ) | | | (122 | ) | | | (960 | ) |
Mississippi (2) | | | 2,130 | | | | (1,873 | ) | | | 4,677 | | | | 1,705 | | | | 267 | |
Tennessee (3) | | | 50 | | | | 7,875 | | | | (96 | ) | | | 70 | | | | 109 | |
Texas | | | (72 | ) | | | 5,809 | | | | (56 | ) | | | (147 | ) | | | (41 | ) |
Total net charge-offs (recoveries) | | $ | 1,896 | | | $ | 11,776 | | | $ | 4,137 | | | $ | 1,618 | | | $ | (541 | ) |
| | | | | | | | | | | | | | | | | | | | |
(1) Excludes acquired loans. | | | | | |
(2) Mississippi includes Central and Southern Mississippi Regions. | | | | | |
(3) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions. | | | | | |
(4) The allowance for loan losses balance related to the remaining loans acquired in the Bay Bank merger, which were transferred from acquired impaired loans to LHFI during the second quarter of 2018, and the remaining loans acquired in the Heritage acquisition and the Reliance merger, which were transferred from acquired impaired loans to LHFI during the third quarter of 2018. | |
|
See Notes to Consolidated Financials
| | TRUSTMARK CORPORATION AND SUBSIDIARIES |
| CONSOLIDATED FINANCIAL INFORMATION |
| March 31, 2019 |
| (unaudited) |
| |
| | Quarter Ended | |
FINANCIAL RATIOS AND OTHER DATA | | 3/31/2019 | | | 12/31/2018 | | | 9/30/2018 | | | 6/30/2018 | | | 3/31/2018 | |
Return on equity | | | 8.50 | % | | | 9.12 | % | | | 9.00 | % | | | 10.09 | % | | | 9.50 | % |
Return on average tangible equity | | | 11.55 | % | | | 12.41 | % | | | 12.26 | % | | | 13.77 | % | | | 13.05 | % |
Return on assets | | | 1.01 | % | | | 1.09 | % | | | 1.07 | % | | | 1.19 | % | | | 1.10 | % |
Interest margin - Yield - FTE | | | 4.32 | % | | | 4.21 | % | | | 4.16 | % | | | 4.06 | % | | | 3.91 | % |
Interest margin - Cost | | | 0.69 | % | | | 0.65 | % | | | 0.58 | % | | | 0.50 | % | | | 0.45 | % |
Net interest margin - FTE | | | 3.63 | % | | | 3.56 | % | | | 3.59 | % | | | 3.57 | % | | | 3.46 | % |
Efficiency ratio (1) | | | 68.08 | % | | | 66.58 | % | | | 64.46 | % | | | 64.96 | % | | | 64.94 | % |
Full-time equivalent employees | | | 2,839 | | | | 2,856 | | | | 2,889 | | | | 2,890 | | | | 2,905 | |
| | | | | | | | | | | | | | | | | | | | |
CREDIT QUALITY RATIOS (2) | | | | | | | | | | | | | | | | | | | | |
Net charge-offs/average loans | | | 0.09 | % | | | 0.52 | % | | | 0.18 | % | | | 0.07 | % | | | -0.03 | % |
Provision for loan losses/average loans | | | 0.07 | % | | | 0.10 | % | | | 0.39 | % | | | 0.15 | % | | | 0.19 | % |
Nonperforming loans/total loans (incl LHFS) | | | 0.62 | % | | | 0.69 | % | | | 0.76 | % | | | 0.69 | % | | | 0.79 | % |
Nonperforming assets/total loans (incl LHFS) | | | 0.97 | % | | | 1.07 | % | | | 1.17 | % | | | 1.14 | % | | | 1.25 | % |
Nonperforming assets/total loans (incl LHFS) +ORE | | | 0.96 | % | | | 1.07 | % | | | 1.16 | % | | | 1.13 | % | | | 1.24 | % |
ALL/total loans (excl LHFS) | | | 0.88 | % | | | 0.90 | % | | | 1.02 | % | | | 0.96 | % | | | 0.95 | % |
ALL-commercial/total commercial loans | | | 0.96 | % | | | 0.99 | % | | | 1.13 | % | | | 1.05 | % | | | 1.04 | % |
ALL-consumer/total consumer and home mortgage loans | | | 0.57 | % | | | 0.57 | % | | | 0.63 | % | | | 0.63 | % | | | 0.64 | % |
ALL/nonperforming loans | | | 140.02 | % | | | 128.67 | % | | | 131.01 | % | | | 136.18 | % | | | 118.25 | % |
ALL/nonperforming loans (excl specifically reviewed impaired loans) | | 342.97 | % | | | 350.77 | % | | | 339.79 | % | | | 345.87 | % | | | 314.28 | % |
| | | | | | | | | | | | | | | | | | | | |
CAPITAL RATIOS | | | | | | | | | | | | | | | | | | | | |
Total equity/total assets | | | 11.77 | % | | | 11.98 | % | | | 11.90 | % | | | 11.71 | % | | | 11.66 | % |
Tangible equity/tangible assets | | | 9.15 | % | | | 9.31 | % | | | 9.26 | % | | | 9.07 | % | | | 9.00 | % |
Tangible equity/risk-weighted assets | | | 11.35 | % | | | 11.11 | % | | | 11.31 | % | | | 11.20 | % | | | 11.25 | % |
Tier 1 leverage ratio | | | 10.05 | % | | | 10.26 | % | | | 10.41 | % | | | 10.22 | % | | | 9.96 | % |
Common equity tier 1 capital ratio | | | 11.88 | % | | | 11.77 | % | | | 12.20 | % | | | 12.01 | % | | | 12.05 | % |
Tier 1 risk-based capital ratio | | | 12.45 | % | | | 12.33 | % | | | 12.76 | % | | | 12.58 | % | | | 12.62 | % |
Total risk-based capital ratio | | | 13.21 | % | | | 13.07 | % | | | 13.61 | % | | | 13.39 | % | | | 13.44 | % |
| | | | | | | | | | | | | | | | | | | | |
STOCK PERFORMANCE | | | | | | | | | | | | | | | | | | | | |
Market value-Close | | $ | 33.63 | | | $ | 28.43 | | | $ | 33.65 | | | $ | 32.63 | | | $ | 31.16 | |
Book value | | $ | 24.49 | | | $ | 24.17 | | | $ | 23.66 | | | $ | 23.43 | | | $ | 23.17 | |
Tangible book value | | $ | 18.48 | | | $ | 18.24 | | | $ | 17.86 | | | $ | 17.61 | | | $ | 17.34 | |
| | | | | | | | | | | | | | | | | | | | |
(1) The efficiency ratio is noninterest expense (excluding amortization of purchased intangibles and other real estate expense, net) to total net interest income (FTE) and noninterest income (excluding security gains (losses), net and amortization of partnership tax credits). Any significant non-routine income and expense items are adjusted accordingly. | |
|
(2) Excludes acquired loans. | | | | | |
| |
| |
| |
See Notes to Consolidated Financials
| | TRUSTMARK CORPORATION AND SUBSIDIARIES |
| NOTES TO CONSOLIDATED FINANCIALS |
| March 31, 2019 |
| ($ in thousands) |
| (unaudited) |
Note 1 – Leases
ASU 2016-02, “Leases (Topic 842)” became effective for Trustmark on January 1, 2019. As a result, during the first quarter of 2019, Trustmark recorded operating lease right-of-use assets and operating lease liabilities of $33.9 million and $34.9 million, respectively, in its consolidated balance sheet. In addition, Trustmark recorded finance lease right-of-use assets, net of accumulated depreciation of $11.2 million in premises and equipment, net and finance lease liabilities of $11.2 million in other borrowings. The effect on Trustmark’s consolidated income statement is considered immaterial.
Note 2 - Securities Available for Sale and Held to Maturity
The following table is a summary of the estimated fair value of securities available for sale and the amortized cost of securities held to maturity ($ in thousands):
| | 3/31/2019 | | | 12/31/2018 | | | 9/30/2018 | | | 6/30/2018 | | | 3/31/2018 | |
SECURITIES AVAILABLE FOR SALE | | | | | | | | | | | | | | | | | | | | |
U.S. Government agency obligations | | | | | | | | | | | | | | | | | | | | |
Issued by U.S. Government agencies | | $ | 28,008 | | | $ | 30,335 | | | $ | 32,371 | | | $ | 36,414 | | | $ | 40,381 | |
Obligations of states and political subdivisions | | | 50,954 | | | | 50,676 | | | | 57,264 | | | | 65,348 | | | | 75,013 | |
Mortgage-backed securities | | | | | | | | | | | | | | | | | | | | |
Residential mortgage pass-through securities | | | | | | | | | | | | | | | | | | | | |
Guaranteed by GNMA | | | 66,176 | | | | 67,494 | | | | 65,847 | | | | 60,245 | | | | 62,457 | |
Issued by FNMA and FHLMC | | | 645,958 | | | | 666,684 | | | | 684,474 | | | | 727,433 | | | | 767,676 | |
Other residential mortgage-backed securities | | | | | | | | | | | | | | | | | | | | |
Issued or guaranteed by FNMA, FHLMC, or GNMA | | | 784,566 | | | | 811,601 | | | | 840,073 | | | | 897,652 | | | | 954,537 | |
Commercial mortgage-backed securities | | | | | | | | | | | | | | | | | | | | |
Issued or guaranteed by FNMA, FHLMC, or GNMA | | | 147,783 | | | | 185,023 | | | | 184,604 | | | | 187,583 | | | | 197,433 | |
Total securities available for sale | | $ | 1,723,445 | | | $ | 1,811,813 | | | $ | 1,864,633 | | | $ | 1,974,675 | | | $ | 2,097,497 | |
| | | | | | | | | | | | | | | | | | | | |
SECURITIES HELD TO MATURITY | | | | | | | | | | | | | | | | | | | | |
U.S. Government agency obligations | | | | | | | | | | | | | | | | | | | | |
Issued by U.S. Government sponsored agencies | | $ | 3,747 | | | $ | 3,736 | | | $ | 3,725 | | | $ | 3,714 | | | $ | 3,703 | |
Obligations of states and political subdivisions | | | 35,352 | | | | 35,783 | | | | 42,623 | | | | 42,458 | | | | 46,011 | |
Mortgage-backed securities | | | | | | | | | | | | | | | | | | | | |
Residential mortgage pass-through securities | | | | | | | | | | | | | | | | | | | | |
Guaranteed by GNMA | | | 11,710 | | | | 12,090 | | | | 12,316 | | | | 12,756 | | | | 12,974 | |
Issued by FNMA and FHLMC | | | 111,962 | | | | 115,133 | | | | 119,040 | | | | 123,377 | | | | 128,517 | |
Other residential mortgage-backed securities | | | | | | | | | | | | | | | | | | | | |
Issued or guaranteed by FNMA, FHLMC, or GNMA | | | 559,690 | | | | 578,827 | | | | 600,635 | | | | 627,470 | | | | 653,325 | |
Commercial mortgage-backed securities | | | | | | | | | | | | | | | | | | | | |
Issued or guaranteed by FNMA, FHLMC, or GNMA | | | 161,858 | | | | 164,074 | | | | 165,544 | | | | 176,070 | | | | 179,445 | |
Total securities held to maturity | | $ | 884,319 | | | $ | 909,643 | | | $ | 943,883 | | | $ | 985,845 | | | $ | 1,023,975 | |
At March 31, 2019, the net unamortized, unrealized loss included in accumulated other comprehensive loss in the accompanying balance sheet for securities held to maturity previously transferred from securities available for sale totaled approximately $15.0 million ($11.2 million, net of tax).
Management continues to focus on asset quality as one of the strategic goals of the securities portfolio, which is evidenced by the investment of approximately 97% of the portfolio in GSE-backed obligations and other Aaa rated securities as determined by Moody’s. None of the securities owned by Trustmark are collateralized by assets which are considered sub-prime. Furthermore, outside of stock ownership in the Federal Home Loan Bank of Dallas, Federal Home Loan Bank of Atlanta and Federal Reserve Bank, Trustmark does not hold any other equity investment in a GSE.
| | TRUSTMARK CORPORATION AND SUBSIDIARIES |
| NOTES TO CONSOLIDATED FINANCIALS |
| March 31, 2019 |
| ($ in thousands) |
| (unaudited) |
Note 3 – Loan Composition
LHFI BY TYPE (excluding acquired loans) | | 3/31/2019 | | | 12/31/2018 | | | 9/30/2018 | | | 6/30/2018 | | | 3/31/2018 | |
Loans secured by real estate: | | | | | | | | | | | | | | | | | | | | |
Construction, land development and other land loans | | $ | 1,209,761 | | | $ | 1,056,601 | | | $ | 1,031,491 | | | $ | 1,038,745 | | | $ | 986,188 | |
Secured by 1-4 family residential properties | | | 1,810,872 | | | | 1,825,492 | | | | 1,801,029 | | | | 1,742,496 | | | | 1,698,885 | |
Secured by nonfarm, nonresidential properties | | | 2,241,072 | | | | 2,220,914 | | | | 2,294,289 | | | | 2,321,734 | | | | 2,257,899 | |
Other real estate secured | | | 528,032 | | | | 543,820 | | | | 453,687 | | | | 397,538 | | | | 425,664 | |
Commercial and industrial loans | | | 1,558,057 | | | | 1,538,715 | | | | 1,565,922 | | | | 1,572,764 | | | | 1,561,967 | |
Consumer loans | | | 176,619 | | | | 182,448 | | | | 182,709 | | | | 175,261 | | | | 168,469 | |
State and other political subdivision loans | | | 982,626 | | | | 973,818 | | | | 929,178 | | | | 925,452 | | | | 936,014 | |
Other loans | | | 487,975 | | | | 494,060 | | | | 488,725 | | | | 504,993 | | | | 478,899 | |
LHFI | | | 8,995,014 | | | | 8,835,868 | | | | 8,747,030 | | | | 8,678,983 | | | | 8,513,985 | |
Allowance for loan losses | | | (79,005 | ) | | | (79,290 | ) | | | (88,874 | ) | | | (83,566 | ) | | | (81,235 | ) |
Net LHFI | | $ | 8,916,009 | | | $ | 8,756,578 | | | $ | 8,658,156 | | | $ | 8,595,417 | | | $ | 8,432,750 | |
ACQUIRED LOANS BY TYPE | | 3/31/2019 | | | 12/31/2018 | | | 9/30/2018 | | | 6/30/2018 | | | 3/31/2018 | |
Loans secured by real estate: | | | | | | | | | | | | | | | | | | | | |
Construction, land development and other land loans | | $ | 5,728 | | | $ | 5,878 | | | $ | 6,657 | | | $ | 11,900 | | | $ | 17,575 | |
Secured by 1-4 family residential properties | | | 21,441 | | | | 22,556 | | | | 25,274 | | | | 36,419 | | | | 49,289 | |
Secured by nonfarm, nonresidential properties | | | 46,492 | | | | 47,979 | | | | 66,865 | | | | 85,117 | | | | 100,285 | |
Other real estate secured | | | 8,026 | | | | 8,253 | | | | 8,507 | | | | 9,862 | | | | 14,581 | |
Commercial and industrial loans | | | 6,359 | | | | 15,267 | | | | 16,610 | | | | 20,485 | | | | 21,808 | |
Consumer loans | | | 1,033 | | | | 1,356 | | | | 1,514 | | | | 1,700 | | | | 1,920 | |
Other loans | | | 4,122 | | | | 5,643 | | | | 7,188 | | | | 7,624 | | | | 10,018 | |
Acquired loans | | | 93,201 | | | | 106,932 | | | | 132,615 | | | | 173,107 | | | | 215,476 | |
Allowance for loan losses, acquired loans | | | (1,297 | ) | | | (1,231 | ) | | | (1,714 | ) | | | (3,046 | ) | | | (4,294 | ) |
Net acquired loans | | $ | 91,904 | | | $ | 105,701 | | | $ | 130,901 | | | $ | 170,061 | | | $ | 211,182 | |
| | TRUSTMARK CORPORATION AND SUBSIDIARIES |
| NOTES TO CONSOLIDATED FINANCIALS |
| March 31, 2019 |
| ($ in thousands) |
| (unaudited) |
Note 3 – Loan Composition (continued)
| | March 31, 2019 | |
LHFI - COMPOSITION BY REGION (1) | | Total | | | Alabama | | | Florida | | | Mississippi (Central and Southern Regions) | | | Tennessee (Memphis, TN and Northern MS Regions) | | | Texas | |
Loans secured by real estate: | | | | | | | | | | | | | | | | | | | | | | | | |
Construction, land development and other land loans | | $ | 1,209,761 | | | $ | 437,802 | | | $ | 78,574 | | | $ | 323,968 | | | $ | 21,736 | | | $ | 347,681 | |
Secured by 1-4 family residential properties | | | 1,810,872 | | | | 110,841 | | | | 45,395 | | | | 1,556,867 | | | | 84,248 | | | | 13,521 | |
Secured by nonfarm, nonresidential properties | | | 2,241,072 | | | | 550,176 | | | | 229,400 | | | | 873,611 | | | | 151,442 | | | | 436,443 | |
Other real estate secured | | | 528,032 | | | | 118,955 | | | | 11,564 | | | | 267,383 | | | | 11,340 | | | | 118,790 | |
Commercial and industrial loans | | | 1,558,057 | | | | 219,344 | | | | 21,124 | | | | 747,115 | | | | 369,630 | | | | 200,844 | |
Consumer loans | | | 176,619 | | | | 24,285 | | | | 5,120 | | | | 125,588 | | | | 19,217 | | | | 2,409 | |
State and other political subdivision loans | | | 982,626 | | | | 92,603 | | | | 41,979 | | | | 605,775 | | | | 23,538 | | | | 218,731 | |
Other loans | | | 487,975 | | | | 77,123 | | | | 17,093 | | | | 314,831 | | | | 34,457 | | | | 44,471 | |
Loans | | $ | 8,995,014 | | | $ | 1,631,129 | | | $ | 450,249 | | | $ | 4,815,138 | | | $ | 715,608 | | | $ | 1,382,890 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION (1) | | | | | | | | | |
Lots | | $ | 59,984 | | | $ | 14,748 | | | $ | 19,284 | | | $ | 19,046 | | | $ | 1,545 | | | $ | 5,361 | |
Development | | | 66,376 | | | | 9,769 | | | | 6,994 | | | | 31,661 | | | | 846 | | | | 17,106 | |
Unimproved land | | | 103,616 | | | | 21,012 | | | | 14,716 | | | | 34,113 | | | | 12,784 | | | | 20,991 | |
1-4 family construction | | | 232,594 | | | | 105,503 | | | | 13,252 | | | | 81,962 | | | | 2,066 | | | | 29,811 | |
Other construction | | | 747,191 | | | | 286,770 | | | | 24,328 | | | | 157,186 | | | | 4,495 | | | | 274,412 | |
Construction, land development and other land loans | | $ | 1,209,761 | | | $ | 437,802 | | | $ | 78,574 | | | $ | 323,968 | | | $ | 21,736 | | | $ | 347,681 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION (1) | | | | | | | | | |
Non-owner occupied: | | | | | | | | | | | | | | | | | | | | | | | | |
Retail | | $ | 381,601 | | | $ | 160,404 | | | $ | 49,105 | | | $ | 92,029 | | | $ | 25,385 | | | $ | 54,678 | |
Office | | | 216,245 | | | | 63,214 | | | | 19,588 | | | | 83,031 | | | | 7,698 | | | | 42,714 | |
Nursing homes/senior living | | | 213,501 | | | | 71,514 | | | | — | | | | 135,927 | | | | 6,060 | | | | — | |
Hotel/motel | | | 258,384 | | | | 64,106 | | | | 66,912 | | | | 52,900 | | | | 33,379 | | | | 41,087 | |
Mini-storage | | | 99,097 | | | | 11,454 | | | | 5,909 | | | | 35,282 | | | | 595 | | | | 45,857 | |
Industrial | | | 88,148 | | | | 21,057 | | | | 6,381 | | | | 14,234 | | | | 1,340 | | | | 45,136 | |
Health care | | | 44,577 | | | | 11,762 | | | | 3,248 | | | | 27,557 | | | | — | | | | 2,010 | |
Convenience stores | | | 30,089 | | | | 2,921 | | | | — | | | | 16,152 | | | | 698 | | | | 10,318 | |
Other | | | 60,906 | | | | 7,497 | | | | 8,246 | | | | 13,099 | | | | 6,838 | | | | 25,226 | |
Total non-owner occupied loans | | | 1,392,548 | | | | 413,929 | | | | 159,389 | | | | 470,211 | | | | 81,993 | | | | 267,026 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Owner-occupied: | | | | | | | | | | | | | | | | | | | | | | | | |
Office | | | 162,849 | | | | 35,109 | | | | 26,580 | | | | 56,283 | | | | 5,810 | | | | 39,067 | |
Churches | | | 90,352 | | | | 19,843 | | | | 6,563 | | | | 44,209 | | | | 15,395 | | | | 4,342 | |
Industrial warehouses | | | 148,813 | | | | 11,963 | | | | 3,672 | | | | 61,508 | | | | 12,908 | | | | 58,762 | |
Health care | | | 104,587 | | | | 23,263 | | | | 6,606 | | | | 58,583 | | | | 2,619 | | | | 13,516 | |
Convenience stores | | | 111,562 | | | | 13,772 | | | | 12,627 | | | | 61,690 | | | | 1,183 | | | | 22,290 | |
Retail | | | 74,247 | | | | 15,654 | | | | 7,347 | | | | 32,195 | | | | 2,899 | | | | 16,152 | |
Restaurants | | | 49,903 | | | | 3,525 | | | | 1,394 | | | | 25,598 | | | | 17,499 | | | | 1,887 | |
Auto dealerships | | | 29,226 | | | | 7,868 | | | | 314 | | | | 12,211 | | | | 8,833 | | | | — | |
Other | | | 76,985 | | | | 5,250 | | | | 4,908 | | | | 51,123 | | | | 2,303 | | | | 13,401 | |
Total owner-occupied loans | | | 848,524 | | | | 136,247 | | | | 70,011 | | | | 403,400 | | | | 69,449 | | | | 169,417 | |
Loans secured by nonfarm, nonresidential properties | | $ | 2,241,072 | | | $ | 550,176 | | | $ | 229,400 | | | $ | 873,611 | | | $ | 151,442 | | | $ | 436,443 | |
(1) | Excludes acquired loans. |
| | TRUSTMARK CORPORATION AND SUBSIDIARIES |
| NOTES TO CONSOLIDATED FINANCIALS |
| March 31, 2019 |
| ($ in thousands) |
| (unaudited) |
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 | |
| | 3/31/2019 | | | 12/31/2018 | | | 9/30/2018 | | | 6/30/2018 | | | 3/31/2018 | |
Securities – taxable | | | 2.27 | % | | | 2.24 | % | | | 2.24 | % | | | 2.25 | % | | | 2.26 | % |
Securities – nontaxable | | | 3.80 | % | | | 3.60 | % | | | 3.66 | % | | | 3.66 | % | | | 3.68 | % |
Securities – total | | | 2.31 | % | | | 2.28 | % | | | 2.27 | % | | | 2.29 | % | | | 2.30 | % |
Loans - LHFI & LHFS | | | 4.93 | % | | | 4.78 | % | | | 4.72 | % | | | 4.60 | % | | | 4.45 | % |
Acquired loans | | | 7.45 | % | | | 9.89 | % | | | 10.82 | % | | | 9.96 | % | | | 8.13 | % |
Loans - total | | | 4.96 | % | | | 4.86 | % | | | 4.82 | % | | | 4.72 | % | | | 4.55 | % |
FF sold & rev repo | | | 2.93 | % | | | 1.88 | % | | | 2.50 | % | | | 1.89 | % | | | 1.70 | % |
Other earning assets | | | 2.67 | % | | | 2.29 | % | | | 2.20 | % | | | 2.27 | % | | | 1.77 | % |
Total earning assets | | | 4.32 | % | | | 4.21 | % | | | 4.16 | % | | | 4.06 | % | | | 3.91 | % |
| | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits | | | 0.93 | % | | | 0.84 | % | | | 0.73 | % | | | 0.60 | % | | | 0.49 | % |
FF pch & repo | | | 1.38 | % | | | 1.78 | % | | | 1.54 | % | | | 1.42 | % | | | 0.97 | % |
Other borrowings | | | 2.19 | % | | | 2.33 | % | | | 2.34 | % | | | 2.20 | % | | | 1.69 | % |
Total interest-bearing liabilities | | | 0.95 | % | | | 0.90 | % | | | 0.80 | % | | | 0.69 | % | | | 0.61 | % |
| | | | | | | | | | | | | | | | | | | | |
Net interest margin | | | 3.63 | % | | | 3.56 | % | | | 3.59 | % | | | 3.57 | % | | | 3.46 | % |
Net interest margin excluding acquired loans | | | 3.60 | % | | | 3.50 | % | | | 3.50 | % | | | 3.46 | % | | | 3.37 | % |
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 acquired loans, which equals reported net interest income-FTE excluding interest income on acquired loans, annualized, as a percent of average earning assets excluding average acquired loans.
During the first quarter of 2019, the yield on acquired loans totaled 7.45% and included $243 thousand in recoveries from the settlement of debt, which represented approximately 0.95% of the annualized total acquired loan yield. During the fourth quarter of 2018, the yield on acquired loans totaled 9.89% and included $1.1 million in recoveries from the settlement of debt, which represented approximately 3.52% of the annualized total acquired loan yield.
Excluding acquired loans, the net interest margin increased to 3.60% for the first quarter of 2019 when compared to the fourth quarter of 2018, as growth in the yield on the loans held for investment and held for sale portfolio, runoff of maturing investment securities, and favorable funding mix were offset by higher costs of interest-bearing deposits.
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 ineffectiveness of $4.8 million as mortgage spreads tightened and market volatility increased during the first quarter of 2019.
The following table illustrates the components of mortgage banking revenues included in noninterest income in the accompanying income statements:
| | Quarter Ended | |
| | 3/31/2019 | | | 12/31/2018 | | | 9/30/2018 | | | 6/30/2018 | | | 3/31/2018 | |
Mortgage servicing income, net | | $ | 5,607 | | | $ | 5,730 | | | $ | 5,428 | | | $ | 5,502 | | | $ | 5,588 | |
Change in fair value-MSR from runoff | | | (2,398 | ) | | | (2,752 | ) | | | (3,181 | ) | | | (3,334 | ) | | | (2,507 | ) |
Gain on sales of loans, net | | | 3,576 | | | | 5,206 | | | | 6,411 | | | | 5,414 | | | | 4,585 | |
Other, net | | | 1,405 | | | | (1,393 | ) | | | (83 | ) | | | 1,365 | | | | 295 | |
Mortgage banking income before hedge ineffectiveness | | | 8,190 | | | | 6,791 | | | | 8,575 | | | | 8,947 | | | | 7,961 | |
Change in fair value-MSR from market changes | | | (8,863 | ) | | | (6,537 | ) | | | 2,615 | | | | 1,743 | | | | 9,521 | |
Change in fair value of derivatives | | | 4,115 | | | | 5,462 | | | | (2,543 | ) | | | (1,644 | ) | | | (6,217 | ) |
Net positive (negative) hedge ineffectiveness | | | (4,748 | ) | | | (1,075 | ) | | | 72 | | | | 99 | | | | 3,304 | |
Mortgage banking, net | | $ | 3,442 | | | $ | 5,716 | | | $ | 8,647 | | | $ | 9,046 | | | $ | 11,265 | |
| | TRUSTMARK CORPORATION AND SUBSIDIARIES |
| NOTES TO CONSOLIDATED FINANCIALS |
| March 31, 2019 |
| ($ in thousands) |
| (unaudited) |
Note 6 – Other Noninterest Income and Expense
Other noninterest income consisted of the following for the periods presented ($ in thousands):
| | Quarter Ended | |
| | 3/31/2019 | | | 12/31/2018 | | | 9/30/2018 | | | 6/30/2018 | | | 3/31/2018 | |
Partnership amortization for tax credit purposes | | $ | (2,010 | ) | | $ | (2,101 | ) | | $ | (2,202 | ) | | $ | (2,202 | ) | | $ | (2,202 | ) |
Increase in life insurance cash surrender value | | | 1,783 | | | | 1,808 | | | | 1,805 | | | | 1,770 | | | | 1,738 | |
Other miscellaneous income | | | 2,466 | | | | 2,197 | | | | 1,755 | | | | 2,847 | | | | 1,523 | |
Total other, net | | $ | 2,239 | | | $ | 1,904 | | | $ | 1,358 | | | $ | 2,415 | | | $ | 1,059 | |
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.
Trustmark did not receive any nontaxable proceeds related to bank-owned life insurance during the first quarter of 2019. Trustmark received $24 thousand, $13 thousand and $1.2 million of nontaxable proceeds related to bank-owned life insurance during the fourth quarter of 2018, the third quarter of 2018 and the second quarter of 2018, respectively. These proceeds were recorded in other miscellaneous income in the table above.
Other noninterest expense consisted of the following for the periods presented ($ in thousands):
| | Quarter Ended | |
| | 3/31/2019 | | | 12/31/2018 | | | 9/30/2018 | | | 6/30/2018 | | | 3/31/2018 | |
Loan expense | | $ | 2,697 | | | $ | 2,425 | | | $ | 2,824 | | | $ | 3,046 | | | $ | 2,791 | |
Amortization of intangibles | | | 1,101 | | | | 1,279 | | | | 1,286 | | | | 1,286 | | | | 1,397 | |
Other miscellaneous expense | | | 8,413 | | | | 8,549 | | | | 7,585 | | | | 7,974 | | | | 7,594 | |
Total other expense | | $ | 12,211 | | | $ | 12,253 | | | $ | 11,695 | | | $ | 12,306 | | | $ | 11,782 | |
Note 7 – Non-GAAP Financial Measures
In addition to capital ratios defined by U.S. generally accepted accounting principles (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 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 tangible 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 consolidated financial statements in their entirety and not to rely on any single financial measure. The following table reconciles Trustmark’s calculation of these measures to amounts reported under GAAP.
| | TRUSTMARK CORPORATION AND SUBSIDIARIES |
| NOTES TO CONSOLIDATED FINANCIALS |
| March 31, 2019 |
| ($ in thousands except per share data) |
| (unaudited) |
Note 7 – Non-GAAP Financial Measures (continued)
| | | | Quarter Ended | | |
| | | | 3/31/2019 | | | 12/31/2018 | | | 9/30/2018 | | | 6/30/2018 | | | 3/31/2018 | | |
TANGIBLE EQUITY | | | | | | | | | | | | | | | | | | | | | | | |
AVERAGE BALANCES | | | | | | | | | | | | | | | | | | | | | | | |
Total shareholders' equity | | | | $ | 1,590,187 | | | $ | 1,595,132 | | | $ | 1,597,588 | | | $ | 1,581,906 | | | $ | 1,572,514 | | |
Less: Goodwill | | | | | (379,627 | ) | | | (379,627 | ) | | | (379,627 | ) | | | (379,627 | ) | | | (379,627 | ) | |
Identifiable intangible assets | | | | | (10,666 | ) | | | (11,811 | ) | | | (13,083 | ) | | | (14,380 | ) | | | (15,782 | ) | |
Total average tangible equity | | | | $ | 1,199,894 | | | $ | 1,203,694 | | | $ | 1,204,878 | | | $ | 1,187,899 | | | $ | 1,177,105 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
PERIOD END BALANCES | | | | | | | | | | | | | | | | | | | | | | | |
Total shareholders' equity | | | | $ | 1,587,028 | | | $ | 1,591,453 | | | $ | 1,599,604 | | | $ | 1,584,072 | | | $ | 1,570,137 | | |
Less: Goodwill | | | | | (379,627 | ) | | | (379,627 | ) | | | (379,627 | ) | | | (379,627 | ) | | | (379,627 | ) | |
Identifiable intangible assets | | | | | (10,092 | ) | | | (11,112 | ) | | | (12,391 | ) | | | (13,677 | ) | | | (14,963 | ) | |
Total tangible equity | | (a) | | $ | 1,197,309 | | | $ | 1,200,714 | | | $ | 1,207,586 | | | $ | 1,190,768 | | | $ | 1,175,547 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
TANGIBLE ASSETS | | | | | | | | | | | | | | | | | | | | | | | |
Total assets | | | | $ | 13,478,017 | | | $ | 13,286,460 | | | $ | 13,439,812 | | | $ | 13,525,265 | | | $ | 13,463,439 | | |
Less: Goodwill | | | | | (379,627 | ) | | | (379,627 | ) | | | (379,627 | ) | | | (379,627 | ) | | | (379,627 | ) | |
Identifiable intangible assets | | | | | (10,092 | ) | | | (11,112 | ) | | | (12,391 | ) | | | (13,677 | ) | | | (14,963 | ) | |
Total tangible assets | | (b) | | $ | 13,088,298 | | | $ | 12,895,721 | | | $ | 13,047,794 | | | $ | 13,131,961 | | | $ | 13,068,849 | | |
Risk-weighted assets | | (c) | | $ | 10,548,472 | | | $ | 10,803,313 | | | $ | 10,681,621 | | | $ | 10,633,646 | | | $ | 10,449,352 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
NET INCOME ADJUSTED FOR INTANGIBLE AMORTIZATION | | | | | | | | | | | | | | | | | | | | | |
Net income | | | | $ | 33,339 | | | $ | 36,688 | | | $ | 36,253 | | | $ | 39,813 | | | $ | 36,830 | | |
Plus: Intangible amortization net of tax | | | | | 826 | | | | 959 | | | | 965 | | | | 965 | | | | 1,049 | | |
Net income adjusted for intangible amortization | | | | $ | 34,165 | | | $ | 37,647 | | | $ | 37,218 | | | $ | 40,778 | | | $ | 37,879 | | |
Period end common shares outstanding | | (d) | | | 64,789,943 | | | | 65,834,395 | | | | 67,621,369 | | | | 67,621,111 | | | | 67,775,068 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
TANGIBLE COMMON EQUITY MEASUREMENTS | | | | | | | | | | | | | | | | | | | | | | | |
Return on average tangible equity (1) | | | | | 11.55 | % | | | 12.41 | % | | | 12.26 | % | | | 13.77 | % | | | 13.05 | % | |
Tangible equity/tangible assets | | (a)/(b) | | | 9.15 | % | | | 9.31 | % | | | 9.26 | % | | | 9.07 | % | | | 9.00 | % | |
Tangible equity/risk-weighted assets | | (a)/(c) | | | 11.35 | % | | | 11.11 | % | | | 11.31 | % | | | 11.20 | % | | | 11.25 | % | |
Tangible book value | | (a)/(d)*1,000 | | $ | 18.48 | | | $ | 18.24 | | | $ | 17.86 | | | $ | 17.61 | | | $ | 17.34 | | |
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COMMON EQUITY TIER 1 CAPITAL (CET1) | | | | | | | | | | | | | | | | | | | | | |
Total shareholders' equity | | | | $ | 1,587,028 | | | $ | 1,591,453 | | | $ | 1,599,604 | | | $ | 1,584,072 | | | $ | 1,570,137 | | |
AOCI-related adjustments | | | | | 40,915 | | | | 55,679 | | | | 79,946 | | | | 73,739 | | | | 67,886 | | |
CET1 adjustments and deductions: | | | | | | | | | | | | | | | | | | | | | | | |
Goodwill net of associated deferred tax liabilities (DTLs) | | | | | (365,748 | ) | | | (365,779 | ) | | | (365,823 | ) | | | (366,036 | ) | | | (366,248 | ) | |
Other adjustments and deductions for CET1 (2) | | | | | (9,099 | ) | | | (9,815 | ) | | | (10,868 | ) | | | (14,204 | ) | | | (12,233 | ) | |
CET1 capital | | (e) | | | 1,253,096 | | | | 1,271,538 | | | | 1,302,859 | | | | 1,277,571 | | | | 1,259,542 | | |
Additional tier 1 capital instruments plus related surplus | | | | | 60,000 | | | | 60,000 | | | | 60,000 | | | | 60,000 | | | | 60,000 | | |
Less: additional tier 1 capital deductions | | | | | — | | | | — | | | | — | | | | — | | | | (714 | ) | |
Additional tier 1 capital | | | | | 60,000 | | | | 60,000 | | | | 60,000 | | | | 60,000 | | | | 59,286 | | |
Tier 1 capital | | | | $ | 1,313,096 | | | $ | 1,331,538 | | | $ | 1,362,859 | | | $ | 1,337,571 | | | $ | 1,318,828 | | |
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Common equity tier 1 capital ratio | | (e)/(c) | | | 11.88 | % | | | 11.77 | % | | | 12.20 | % | | | 12.01 | % | | | 12.05 | % | |
(1) | Calculation = ((net income adjusted for intangible amortization/number of days in period)*number of days in year)/total average tangible equity. |
(2) | Includes other intangible assets, net of DTLs, disallowed deferred tax assets (DTAs), threshold deductions and transition adjustments, as applicable. |
