Exhibit 99.1
FOR IMMEDIATE RELEASE News Release
October 19, 2004
Trustmark Announces Third Quarter Financial Results
and 5.3% Increase in Quarterly Dividend
Jackson, Miss. - Trustmark Corporation (NASDAQ:TRMK) announced basic earnings
per share of $0.49 for the third quarter of 2004, which resulted from net income
of $28.1 million. Included in the results for the third quarter of 2004 is a
non-cash after-tax charge of $1.9 million, or $0.033 per share, for impairment
of the Company's home mortgage servicing portfolio related to declines in
long-term interest rates during the quarter. In the third quarter of 2003, basic
earnings per share were $0.55 and included a reversal of previously recorded
mortgage servicing impairment charges, which increased the quarter's after-tax
net income by $3.1 million, or $0.052 per share.
Basic earnings per share for the nine months ended September 30, 2004 were
$1.51, which resulted from net income of $87.9 million. Trustmark's performance
during the first nine months of 2004 resulted in a return on average
shareholders' equity of 16.34% and a return on average assets of 1.44%. At
September 30, 2004, Trustmark reported total loans of $5.4 billion, total assets
of $8.2 billion, total deposits of $5.3 billion and shareholders' equity of $734
million.
Richard G. Hickson, Chairman and CEO, stated, "Average loans in the third
quarter of 2004 increased $452.8 million, or 9.2%, while average deposits rose
$363.9 million, or 7.4%, when compared to figures one year earlier. This growth
is attributable in part to our expansion in the vibrant Florida panhandle as
well as in the dynamic Houston, Texas marketplace. Net interest income on a
fully taxable equivalent basis for the quarter was $72 million, an increase of
$6.2 million or 9.4%, compared to the quarter one year earlier, due to a 9.8%
increase in average earning assets coupled with a stable net interest margin."
"We are continuing to manage through an unprecedented period of low interest
rates. Accordingly, we have initiated strategies to mitigate our exposure to
cyclical increases in rates. These strategies include maintaining a historically
short duration of approximately 2.3 years in Trustmark's bond investment
portfolio. Consequently, our spread, the difference in interest income on our
assets less the interest expense on our deposits and other funding, has been
constrained, as investment yields remain low. If the economy continues to
improve, and rising rates occur, we would expect to reinvest the portfolio, or
use these cash flows to fund loan growth, at more attractive longer-term yields.
We will continue to prudently manage our balance sheet position through interest
rate cycles in an effort to control interest rate risk and maintain
profitability," said Hickson.
The Board of Directors of Trustmark Corporation announced a 5.3% increase in its
regular quarterly dividend to $0.20 per share from $0.19 per share. The Board
declared the dividend payable on December 15 to the shareholders of record as of
December 1, 2004. This action raises the indicated annual dividend rate to $0.80
per share from $0.76 per share.
"This marks the 22nd consecutive increase in Trustmark Corporation's annual
dividend and reflects the continued strength of Trustmark's earnings," said
Hickson.
Trustmark is a financial services company providing banking and financial
solutions through over 145 offices and 2,450 associates in Mississippi, Florida,
Tennessee and Texas. For additional financial information, visit Trustmark's web
site at www.trustmark.com.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of and
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. A forward-looking statement in this press release
encompasses any estimate, prediction, expectation, projection, opinion,
anticipation, outlook or statement of belief included therein, as well as the
management assumptions underlying those forward-looking statements. Factors that
might cause future results to differ from such forward-looking statements are
described in Trustmark's filings with the Securities and Exchange Commission.
Trustmark undertakes no obligation to update or revise any of this information,
whether as the result of new information, future events or developments, or
otherwise.
Trustmark Contacts
Investors: Zach Wasson Joseph Rein
Executive Vice President and CFO First Vice President
601-208-6816 601-208-6898
Media: Gray Wiggers
Senior Vice President
601-208-5942
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
September 30, 2004
($ in thousands)
(unaudited)
Quarter Ended Sep. 30,
-----------------------
AVERAGE BALANCES 2004 2003 $ Change % Change
- ---------------- ---------- ---------- --------- ---------
Securities AFS-taxable $1,901,589 $1,595,036 $ 306,553 19.2%
Securities AFS-nontaxable 69,501 63,940 5,561 8.7%
Securities HTM-taxable 65,565 162,393 (96,828) -59.6%
Securities HTM-nontaxable 87,454 90,841 (3,387) -3.7%
---------- ---------- ---------
Total securities 2,124,109 1,912,210 211,899 11.1%
---------- ---------- ---------
Loans 5,386,084 4,933,252 452,832 9.2%
Fed funds sold
and rev repos 30,574 20,535 10,039 48.9%
---------- ---------- ---------
Total earning assets 7,540,767 6,865,997 674,770 9.8%
---------- ---------- ---------
Allowance for loan losses (74,228) (74,832) 604 -0.8%
Cash and due from banks 334,298 282,239 52,059 18.4%
Other assets 488,363 426,066 62,297 14.6%
---------- ---------- ---------
Total assets $8,289,200 $7,499,470 $ 789,730 10.5%
========== ========== =========
Int-bearing demand dep $1,288,849 $1,171,315 $ 117,534 10.0%
Savings deposits 942,139 844,838 97,301 11.5%
Time deposits less than
$100,000 1,319,206 1,192,351 126,855 10.6%
Time deposits of $100,000
or more 456,500 436,914 19,586 4.5%
---------- ---------- ---------
Total interest-bearing dep 4,006,694 3,645,418 361,276 9.9%
Fed funds pch and repos 966,420 929,774 36,646 3.9%
Short-term borrowings 862,529 463,482 399,047 86.1%
Long-term FHLB advances 378,990 455,502 (76,512) -16.8%
---------- ---------- ---------
Total interest-bearing liab 6,214,633 5,494,176 720,457 13.1%
Nonint-bearing deposits 1,262,756 1,260,135 2,621 0.2%
Other liabilities 79,427 69,231 10,196 14.7%
Shareholders' equity 732,384 675,928 56,456 8.4%
---------- ---------- ---------
Total liab and equity $8,289,200 $7,499,470 $ 789,730 10.5%
========== ========== =========
Year-to-date Sep. 30,
-----------------------
AVERAGE BALANCES 2004 2003 $ Change % Change
- ---------------- ---------- ---------- --------- ---------
Securities AFS-taxable $1,907,062 $1,444,250 $ 462,812 32.0%
Securities AFS-nontaxable 70,564 66,585 3,979 6.0%
Securities HTM-taxable 75,614 283,991 (208,377) -73.4%
Securities HTM-nontaxable 88,348 90,831 (2,483) -2.7%
---------- ---------- ---------
Total securities 2,141,588 1,885,657 255,931 13.6%
----------- ---------- ---------
Loans 5,246,443 4,765,364 481,079 10.1%
Fed funds sold
and rev repos 24,005 27,063 (3,058) -11.3%
---------- ---------- ---------
Total earning assets 7,412,036 6,678,084 733,952 11.0%
---------- ---------- ---------
Allowance for loan losses (74,270) (75,038) 768 -1.0%
Cash and due from banks 336,210 296,854 39,356 13.3%
Other assets 480,195 413,530 66,665 16.1%
---------- ---------- ---------
Total assets $8,154,171 $7,313,430 $ 840,741 11.5%
========== ========== =========
Int-bearing demand dep $1,315,618 $1,123,635 $ 191,983 17.1%
Savings deposits 977,168 821,114 156,054 19.0%
Time deposits less than
$100,000 1,287,047 1,226,816 60,231 4.9%
Time deposits of $100,000
or more 456,705 445,654 11,051 2.5%
---------- ---------- ---------
Total interest-bearing dep 4,036,538 3,617,219 419,319 11.6%
Fed funds pch and repos 917,772 965,417 (47,645) -4.9%
Short-term borrowings 717,288 326,135 391,153 119.9%
Long-term FHLB advances 433,342 462,717 (29,375) -6.3%
---------- ---------- ---------
Total interest-bearing liab 6,104,940 5,371,488 733,452 13.7%
Nonint-bearing deposits 1,267,936 1,206,457 61,479 5.1%
Other liabilities 63,134 65,587 (2,453) -3.7%
Shareholders' equity 718,161 669,898 48,263 7.2%
---------- ---------- ---------
Total liab and equity $8,154,171 $7,313,430 $ 840,741 11.5%
========== ========== =========
September 30,
-----------------------
PERIOD END BALANCES 2004 2003 $ Change % Change
- ------------------- ---------- ---------- --------- ---------
Sec available for sale $1,916,093 $1,676,969 $ 239,124 14.3%
Sec held to maturity 147,214 201,052 (53,838) -26.8%
---------- ---------- ---------
Total securities 2,063,307 1,878,021 185,286 9.9%
Loans 5,388,342 5,024,210 364,132 7.2%
Fed funds sold
and rev repos 16,290 59,500 (43,210) -72.6%
---------- ---------- ---------
Total earning assets 7,467,939 6,961,731 506,208 7.3%
---------- ---------- ---------
Allowance for loan losses (74,179) (74,486) 307 -0.4%
Cash and due from banks 273,385 284,779 (11,394) -4.0%
Mortgage servicing rights 51,199 48,767 2,432 5.0%
Goodwill 110,271 95,877 14,394 15.0%
Identifiable intangibles 21,173 23,094 (1,921) -8.3%
Other assets 300,839 293,342 7,497 2.6%
---------- ---------- ---------
Total assets $8,150,627 $7,633,104 $ 517,523 6.8%
========== ========== =========
Nonint-bearing deposits $1,242,612 $1,256,697 $ (14,085) -1.1%
Int-bearing deposits 4,044,919 3,740,256 304,663 8.1%
---------- ---------- ---------
Total deposits 5,287,531 4,996,953 290,578 5.8%
Fed funds pch and repos 854,486 824,710 29,776 3.6%
Short-term borrowings 855,214 635,111 220,103 34.7%
Long-term FHLB advances 355,926 431,068 (75,142) -17.4%
Other liabilities 63,236 63,164 72 0.1%
---------- ---------- ---------
Total liabilities 7,416,393 6,951,006 465,387 6.7%
---------- ---------- ---------
Common stock 12,048 12,193 (145) -1.2%
Surplus 121,282 140,154 (18,872) -13.5%
Retained earnings 603,316 529,154 74,162 14.0%
Accum other comprehensive
(loss) income, net of
taxes (2,412) 597 (3,009) n/m
---------- ---------- ---------
Total shareholders' equity 734,234 682,098 52,136 7.6%
---------- ---------- ---------
Total liab and equity $8,150,627 $7,633,104 $ 517,523 6.8%
========== ========== =========
Total int-bearing liab $6,110,545 $5,631,145 $ 479,400 8.5%
========== ========== =========
n/m - not meaningful
PERIOD END BALANCES 9/30/2004 12/31/2003 $ Change % Change
- ------------------- ---------- ---------- --------- ---------
Sec available for sale $1,916,093 $1,933,993 $ (17,900) -0.9%
Sec held to maturity 147,214 178,450 (31,236) -17.5%
---------- ---------- ---------
Total securities 2,063,307 2,112,443 (49,136) -2.3%
Loans 5,388,342 5,032,612 355,730 7.1%
Fed funds sold
and rev repos 16,290 37,712 (21,422) -56.8%
---------- ---------- ---------
Total earning assets 7,467,939 7,182,767 285,172 4.0%
---------- ---------- ---------
Allowance for loan losses (74,179) (74,276) 97 -0.1%
Cash and due from banks 273,385 333,096 (59,711) -17.9%
Mortgage servicing rights 51,199 49,707 1,492 3.0%
Goodwill 110,271 95,877 14,394 15.0%
Identifiable intangibles 21,173 21,921 (748) -3.4%
Other assets 300,839 305,229 (4,390) -1.4%
---------- ---------- ---------
Total assets $8,150,627 $7,914,321 $ 236,306 3.0%
========== ========== =========
Nonint-bearing deposits $1,242,612 $1,329,444 $ (86,832) -6.5%
Int-bearing deposits 4,044,919 3,760,015 284,904 7.6%
---------- ---------- ---------
Total deposits 5,287,531 5,089,459 198,072 3.9%
Fed funds pch and repos 854,486 928,135 (73,649) -7.9%
Short-term borrowings 855,214 621,532 233,682 37.6%
Long-term FHLB advances 355,926 531,035 (175,109) -33.0%
Other liabilities 63,236 54,587 8,649 15.8%
---------- ---------- ---------
Total liabilities 7,416,393 7,224,748 191,645 2.7%
---------- ---------- ---------
Common stock 12,048 12,136 (88) -0.7%
Surplus 121,282 132,383 (11,101) -8.4%
Retained earnings 603,316 548,521 54,795 10.0%
Accum other comprehensive
loss, net of taxes (2,412) (3,467) 1,055 -30.4%
---------- ---------- ---------
Total shareholders' equity 734,234 689,573 44,661 6.5%
---------- ---------- ---------
Total liab and equity $8,150,627 $7,914,321 $ 236,306 3.0%
========== ========== =========
Total int-bearing liab $6,110,545 $5,840,717 $ 269,828 4.6%
========== ========== =========
Quarter Ended Sep. 30,
----------------------
INCOME STATEMENTS 2004 2003 $ Change % Change
- ----------------- ---------- ---------- --------- ---------
Int and fees on loans-FTE $ 75,695 $ 72,035 $ 3,660 5.1%
Int on securities-taxable 16,162 12,065 4,097 34.0%
Int on securities-tax
exempt-FT 2,961 3,005 (44) -1.5%
Int on fed funds sold
and rev rep 120 60 60 100.0%
Other interest income 16 14 2 14.3%
---------- ---------- ---------
Total interest income-FTE 94,954 87,179 7,775 8.9%
---------- ---------- ---------
Interest on deposits 13,547 14,167 (620) -4.4%
Interest on fed funds
pch and repos 3,243 2,269 974 42.9%
Other interest expense 6,179 4,918 1,261 25.6%
---------- ---------- ---------
Total interest expense 22,969 21,354 1,615 7.6%
---------- ---------- ---------
Net interest income-FTE 71,985 65,825 6,160 9.4%
Provision for loan losses 1,161 1,771 (610) -34.4%
---------- ---------- ---------
Net interest income after
provision-FTE 70,824 64,054 6,770 10.6%
---------- ---------- ---------
Service charges on
deposit accounts 15,010 14,304 706 4.9%
Mortgage banking (931) 8,428 (9,359) n/m
Retail banking - other 4,678 4,721 (43) -0.9%
Wealth management 5,080 5,118 (38) -0.7%
Insurance commissions 5,197 6,942 (1,745) -25.1%
Other income 1,935 1,298 637 49.1%
---------- ---------- ---------
Nonint inc-excl sec gains 30,969 40,811 (9,842) -24.1%
Security gains 6 57 (51) -89.5%
---------- ---------- ---------
Total noninterest income 30,975 40,868 (9,893) -24.2%
---------- ---------- ---------
Salaries and employee
benefits 32,602 31,434 1,168 3.7%
Services and fees 9,190 7,806 1,384 17.7%
Equipment expense 3,799 3,721 78 2.1%
Net occupancy-premises 4,043 3,395 648 19.1%
Other expense 7,288 7,325 (37) -0.5%
---------- ---------- ---------
Total noninterest expense 56,922 53,681 3,241 6.0%
---------- ---------- ---------
Income before income taxes 44,877 51,241 (6,364) -12.4%
Tax equivalent adjustment 2,062 1,994 68 3.4%
Income taxes 14,728 16,829 (2,101) -12.5%
---------- ---------- ---------
Net income $ 28,087 $ 32,418 $ (4,331) -13.4%
========== ========== =========
Earnings per share
Basic $ 0.49 $ 0.55 $ (0.06) -10.9%
========== ========== =========
Diluted $ 0.48 $ 0.55 $ (0.07) -12.7%
========== ========== =========
Weighted average shares o/s
Basic 57,809,762 58,626,951 -1.4%
========== ==========
Diluted 58,114,320 58,898,297 -1.3%
========== ==========
Period end shares o/s 57,822,833 58,519,206 -1.2%
========== ==========
Dividends per share $ 0.1900 $ 0.1650 15.2%
========== ==========
n/m - not meaningful
Year-to-date Sep. 30,
----------------------
INCOME STATEMENTS 2004 2003 $ Change % Change
- ----------------- ---------- ---------- --------- ---------
Int and fees on loans-FTE $ 221,045 $ 215,972 $ 5,073 2.3%
Int on securities-taxable 47,183 50,610 (3,427) -6.8%
Int on securities-tax
exempt-FT 9,058 9,282 (224) -2.4%
Int on fed funds sold
and rev rep 226 236 (10) -4.2%
Other interest income 37 37 - 0.0%
---------- ---------- ---------
Total interest income-FTE 277,549 276,137 1,412 0.5%
---------- ---------- ---------
Interest on deposits 40,259 45,882 (5,623) -12.3%
Interest on fed funds
pch and repos 7,503 8,096 (593) -7.3%
Other interest expense 15,663 14,681 982 6.7%
---------- ---------- ---------
Total interest expense 63,425 68,659 (5,234) -7.6%
---------- ---------- ---------
Net interest income-FTE 214,124 207,478 6,646 3.2%
Provision for loan losses 3,916 7,420 (3,504) -47.2%
---------- ---------- ---------
Net interest income after
provision-FTE 210,208 200,058 10,150 5.1%
---------- ---------- ---------
Service charges on
deposit accounts 42,295 40,054 2,241 5.6%
Mortgage banking 6,267 3,599 2,668 74.1%
Retail banking - other 13,495 13,826 (331) -2.4%
Wealth management 15,054 14,616 438 3.0%
Insurance commissions 12,728 14,050 (1,322) -9.4%
Other income 5,387 4,727 660 14.0%
---------- ---------- ---------
Nonint inc-excl sec gains 95,226 90,872 4,354 4.8%
Security gains 21 12,226 (12,205) -99.8%
---------- ---------- ---------
Total noninterest income 95,247 103,098 (7,851) -7.6%
---------- ---------- ---------
Salaries and employee
benefits 95,475 96,855 (1,380) -1.4%
Services and fees 26,415 23,696 2,719 11.5%
Equipment expense 11,122 11,104 18 0.2%
Net occupancy-premises 10,773 9,541 1,232 12.9%
Other expense 21,273 21,119 154 0.7%
---------- ---------- ---------
Total noninterest expense 165,058 162,315 2,743 1.7%
---------- ---------- ---------
Income before income taxes 140,397 140,841 (444) -0.3%
Tax equivalent adjustment 6,294 6,261 33 0.5%
Income taxes 46,242 46,514 (272) -0.6%
---------- ---------- ---------
Net income $ 87,861 $ 88,066 $ (205) -0.2%
========== ========== =========
Earnings per share
Basic $ 1.51 $ 1.49 $ 0.02 1.3%
========== ========== =========
Diluted $ 1.51 $ 1.48 $ 0.03 2.0%
========== ========== =========
Weighted average shares o/s
Basic 58,043,557 59,214,354 -2.0%
========== ==========
Diluted 58,333,521 59,406,010 -1.8%
========== ==========
Period end shares o/s 57,822,833 58,519,206 -1.2%
========== ==========
Dividends per share $ 0.5700 $ 0.4950 15.2%
========== ==========
September 30,
---------------------
NONPERFORMING ASSETS 2004 2003 $ Change % Change
- -------------------- --------- --------- --------- ---------
Nonaccrual loans $ 27,062 $ 26,857 $ 205 0.8%
Restructured loans - - -
--------- --------- ---------
Total nonperforming loans 27,062 26,857 205 0.8%
Other real estate 4,844 6,434 (1,590) -24.7%
--------- --------- ---------
Total nonperforming assets 31,906 33,291 (1,385) -4.2%
Loans past due over 90 days 7,553 3,283 4,270 130.1%
--------- --------- ---------
Total nonperforming
assets plus past
due over 90 days $ 39,459 $ 36,574 $ 2,885 7.9%
========= ========= =========
Quarter Ended Sep. 30,
---------------------
ALLOWANCE FOR LOAN LOSSES 2004 2003 $ Change % Change
- ------------------------- --------- --------- --------- ---------
Beginning Balance $ 74,179 $ 74,819 $ (640) -0.9%
Charge-offs (3,295) (4,693) 1,398 -29.8%
Recoveries 2,134 2,589 (455) -17.6%
Provision for loan losses 1,161 1,771 (610) -34.4%
--------- --------- ---------
Ending Balance $ 74,179 $ 74,486 $ (307) -0.4%
========= ========= =========
Year-to-date Sep. 30,
-----------------------
ALLOWANCE FOR LOAN LOSSES 2004 2003 $ Change % Change
- ------------------------- --------- --------- --------- ---------
Beginning Balance $ 74,276 $ 74,771 $ (495) -0.7%
Charge-offs (10,950) (14,675) 3,725 -25.4%
Recoveries 6,937 6,970 (33) -0.5%
Provision for loan losses 3,916 7,420 (3,504) -47.2%
--------- --------- ---------
Ending Balance $ 74,179 $ 74,486 $ (307) -0.4%
========= ========= =========
Quarter Ended Sep. 30,
---------------------
RATIOS 2004 2003
- ------ --------- ---------
ROA 1.35% 1.71%
ROE 15.26% 19.03%
Equity generation rate 9.34% 13.32%
EOP equity/ EOP assets 9.01% 8.94%
Average equity/average assets 8.84% 9.01%
Interest margin - Yield - FTE 5.01% 5.04%
Interest margin - Cost - FTE 1.22% 1.23%
Net interest margin - FTE 3.80% 3.80%
Rate on interest-bearing liab 1.47% 1.54%
Efficiency ratio 53.58% 52.86%
Expense ratio 1.37% 0.74%
Net charge offs/average loans 0.09% 0.17%
Prov for loan losses/average loans 0.09% 0.14%
Nonperf loans/total loans 0.50% 0.53%
Nonperf assets/total loans 0.59% 0.66%
Nonperf assets/total loans+ORE 0.59% 0.66%
ALL/nonperforming loans 274.11% 277.34%
ALL/total loans 1.38% 1.48%
Net loans/total assets 65.20% 64.85%
COMMON STOCK PERFORMANCE
- ------------------------
Market value of stock-Close $ 31.080 $ 27.130
Market value of stock-High $ 32.360 $ 28.000
Market value of stock-Low $ 27.920 $ 25.030
Book value of stock $ 12.70 $ 11.66
Tangible book value of stock $ 10.42 $ 9.62
Tangible equity $ 602,790 $ 563,127
Market/Book value of stock 244.72% 232.68%
Price/Earnings ratio 15.94 12.43
Dividend payout 38.78% 30.00%
OTHER DATA
- ----------
EOP Employees - FTE 2,444 2,365
Year-to-date Sep. 30,
---------------------
RATIOS 2004 2003
- ------ --------- ---------
ROA 1.44% 1.61%
ROE 16.34% 17.58%
Equity generation rate 10.17% 11.74%
EOP equity/ EOP assets 9.01% 8.94%
Average equity/average assets 8.81% 9.16%
Interest margin - Yield - FTE 5.00% 5.53%
Interest margin - Cost - FTE 1.14% 1.37%
Net interest margin - FTE 3.86% 4.15%
Rate on interest-bearing liab 1.39% 1.71%
Efficiency ratio 53.78% 51.65%
Expense ratio 1.26% 1.43%
Net charge offs/average loans 0.10% 0.22%
Prov for loan losses/average loans 0.10% 0.21%
Nonperf loans/total loans 0.50% 0.53%
Nonperf assets/total loans 0.59% 0.66%
Nonperf assets/total loans+ORE 0.59% 0.66%
ALL/nonperforming loans 274.11% 277.34%
ALL/total loans 1.38% 1.48%
Net loans/total assets 65.20% 64.85%
COMMON STOCK PERFORMANCE
- ------------------------
Market value of stock-Close $ 31.080 $ 27.130
Market value of stock-High $ 32.360 $ 28.000
Market value of stock-Low $ 25.890 $ 22.560
Book value of stock $ 12.70 $ 11.66
Tangible book value of stock $ 10.42 $ 9.62
Tangible equity $ 602,790 $ 563,127
Market/Book value of stock 244.72% 232.68%
Price/Earnings ratio 15.41 13.62
Dividend payout 37.75% 33.22%
Quarter Ended
-----------------------
AVERAGE BALANCES 9/30/2004 6/30/2004 $ Change % Change
- ---------------- ---------- ---------- --------- ---------
Securities AFS-taxable $1,901,589 $1,944,596 $ (43,007) -2.2%
Securities AFS-nontaxable 69,501 70,569 (1,068) -1.5%
Securities HTM-taxable 65,565 76,931 (11,366) -14.8%
Securities HTM-nontaxable 87,454 88,327 (873) -1.0%
---------- ---------- ---------
Total securities 2,124,109 2,180,423 (56,314) -2.6%
----------- ---------- ---------
Loans 5,386,084 5,288,298 97,786 1.8%
Fed funds sold
and rev repos 30,574 24,132 6,442 26.7%
---------- ---------- ---------
Total earning assets 7,540,767 7,492,853 47,914 0.6%
---------- ---------- ---------
Allowance for loan losses (74,228) (74,215) (13) 0.0%
Cash and due from banks 334,298 337,596 (3,298) -1.0%
Other assets 488,363 486,184 2,179 0.4%
---------- ---------- ---------
Total assets $8,289,200 $8,242,418 $ 46,782 0.6%
========== ========== =========
Int-bearing demand dep $1,288,849 $1,350,812 $ (61,963) -4.6%
Savings deposits 942,139 1,020,639 (78,500) -7.7%
Time deposits less
than $100,000 1,319,206 1,280,910 38,296 3.0%
Time deposits of
$100,000 or more 456,500 456,185 315 0.1%
---------- ---------- ---------
Total interest-bearing dep 4,006,694 4,108,546 (101,852) -2.5%
Fed funds pch and repos 966,420 894,158 72,262 8.1%
Short-term borrowings 862,529 775,093 87,436 11.3%
Long-term FHLB advances 378,990 409,330 (30,340) -7.4%
---------- ---------- ---------
Total interest-bearing
liabilities 6,214,633 6,187,127 27,506 0.4%
Nonint-bearing deposits 1,262,756 1,283,043 (20,287) -1.6%
Other liabilities 79,427 54,867 24,560 44.8%
Shareholders' equity 732,384 717,381 15,003 2.1%
---------- ---------- ---------
Total liab and equity $8,289,200 $8,242,418 $ 46,782 0.6%
========== ========== =========
PERIOD END BALANCES 9/30/2004 6/30/2004 $ Change % Change
- ------------------- ---------- ---------- --------- ---------
Sec available for sale $1,916,093 $1,992,239 $ (76,146) -3.8%
Sec held to maturity 147,214 159,173 (11,959) -7.5%
---------- ---------- ---------
Total securities 2,063,307 2,151,412 (88,105) -4.1%
Loans 5,388,342 5,384,791 3,551 0.1%
Fed funds sold
and rev repos 16,290 23,102 (6,812) -29.5%
---------- ---------- ---------
Total earning assets 7,467,939 7,559,305 (91,366) -1.2%
---------- ---------- ---------
Allowance for loan losses (74,179) (74,179) - 0.0%
Cash and due from banks 273,385 269,560 3,825 1.4%
Mortgage servicing rights 51,199 54,635 (3,436) -6.3%
Goodwill 110,271 110,271 - 0.0%
Identifiable intangibles 21,173 21,672 (499) -2.3%
Other assets 300,839 309,073 (8,234) -2.7%
---------- ---------- ---------
Total assets $8,150,627 $8,250,337 $ (99,710) -1.2%
========== ========== =========
Nonint-bearing deposits $1,242,612 $1,260,238 $ (17,626) -1.4%
Int-bearing deposits 4,044,919 3,982,931 61,988 1.6%
---------- ---------- ---------
Total deposits 5,287,531 5,243,169 44,362 0.8%
Fed funds pch and repos 854,486 915,121 (60,635) -6.6%
Short-term borrowings 855,214 944,715 (89,501) -9.5%
Long-term FHLB advances 355,926 380,970 (25,044) -6.6%
Other liabilities 63,236 56,561 6,675 11.8%
---------- ---------- ---------
Total liabilities 7,416,393 7,540,536 (124,143) -1.6%
---------- ---------- ---------
Common stock 12,048 12,044 4 0.0%
Surplus 121,282 120,608 674 0.6%
Retained earnings 603,316 586,215 17,101 2.9%
Accum other comprehensive
loss, net of taxes (2,412) (9,066) 6,654 n/m
---------- ---------- ---------
Total shareholders' equity 734,234 709,801 24,433 3.4%
---------- ---------- ---------
Total liab and equity $8,150,627 $8,250,337 $ (99,710) -1.2%
========== ========== =========
Total int-bearing liab $6,110,545 $6,223,737 $(113,192) -1.8%
========== ========== =========
n/m - not meaningful
Quarter Ended
----------------------
INCOME STATEMENTS 9/30/2004 6/30/2004 $ Change % Change
- ----------------- ---------- ---------- ---------- ---------
Int and fees on loans-FTE $ 75,695 $ 73,908 $ 1,787 2.4%
Int on securities-taxable 16,162 14,825 1,337 9.0%
Int on securities-tax
exempt-FTE 2,961 3,026 (65) -2.1%
Int on fed funds sold
and rev repos 120 63 57 90.5%
Other interest income 16 9 7 77.8%
---------- ---------- ----------
Total interest income-FTE 94,954 91,831 3,123 3.4%
---------- ---------- ----------
Interest on deposits 13,547 13,326 221 1.7%
Interest on fed funds
pch and repos 3,243 2,156 1,087 50.4%
Other interest expense 6,179 4,726 1,453 30.7%
---------- ---------- ----------
Total interest expense 22,969 20,208 2,761 13.7%
---------- ---------- ----------
Net interest income-FTE 71,985 71,623 362 0.5%
Provision for loan losses 1,161 1,703 (542) -31.8%
---------- ---------- ----------
Net interest income after
provision-FTE 70,824 69,920 904 1.3%
---------- ---------- ----------
Service charges on
deposit accounts 15,010 13,959 1,051 7.5%
Mortgage banking (931) 9,101 (10,032) n/m
Retail banking - other 4,678 4,685 (7) -0.1%
Wealth management 5,080 4,958 122 2.5%
Insurance commissions 5,197 4,346 851 19.6%
Other income 1,935 1,526 409 26.8%
---------- ---------- ----------
Nonint inc-excl sec gains 30,969 38,575 (7,606) -19.7%
Security gains 6 2 4 200.0%
---------- ---------- ----------
Total noninterest income 30,975 38,577 (7,602) -19.7%
---------- ---------- ----------
Salaries and employee
benefits 32,602 32,430 172 0.5%
Services and fees 9,190 8,846 344 3.9%
Equipment expense 3,799 3,781 18 0.5%
Net occupancy-premises 4,043 3,517 526 15.0%
Other expense 7,288 6,909 379 5.5%
---------- ---------- ----------
Total noninterest expense 56,922 55,483 1,439 2.6%
---------- ---------- ----------
Income before income taxes 44,877 53,014 (8,137) -15.3%
Tax equivalent adjustment 2,062 2,075 (13) -0.6%
Income taxes 14,728 17,916 (3,188) -17.8%
---------- ---------- ----------
Net income $ 28,087 $ 33,023 $ (4,936) -14.9%
========== ========== ==========
Earnings per share
Basic $ 0.49 $ 0.57 $ (0.08) -14.0%
========== ========== ==========
Diluted $ 0.48 $ 0.57 $ (0.09) -15.8%
========== ========== ==========
Weighted average shares o/s
Basic 57,809,762 58,055,793 -0.4%
========== ==========
Diluted 58,114,320 58,311,332 -0.3%
========== ==========
Period end shares o/s 57,822,833 57,804,333 0.0%
========== ==========
Dividends per share $ 0.1900 $ 0.1900 0.0%
========== ==========
n/m - not meaningful
NONPERFORMING ASSETS 9/30/2004 6/30/2004 $ Change % Change
- -------------------- --------- --------- -------- --------
Nonaccrual loans $ 27,062 $ 27,001 $ 61 0.2%
Restructured loans - - -
--------- --------- --------
Total nonperforming loans 27,062 27,001 61 0.2%
Other real estate 4,844 6,256 (1,412) -22.6%
--------- --------- --------
Total nonperforming assets 31,906 33,257 (1,351) -4.1%
Loans past due over 90 days 7,553 3,574 3,979 111.3%
--------- --------- --------
Total nonperforming
assets plus past
due over 90 days $ 39,459 $ 36,831 $ 2,628 7.1%
========= ========= ========
Quarter Ended
---------------------
ALLOWANCE FOR LOAN LOSSES 9/30/2004 6/30/2004 $ Change % Change
- ------------------------- --------- --------- -------- --------
Beginning Balance $ 74,179 $ 74,179 $ - 0.0%
Charge-offs (3,295) (3,827) 532 -13.9%
Recoveries 2,134 2,124 10 0.5%
Provision for loan losses 1,161 1,703 (542) -31.8%
--------- --------- -------- --------
Ending Balance $ 74,179 $ 74,179 $ - 0.0%
========= ========= ======== ========
Quarter Ended
---------------------
RATIOS 9/30/2004 6/30/2004
- ------ --------- ---------
ROA 1.35% 1.61%
ROE 15.26% 18.51%
Equity generation rate 9.34% 12.34%
EOP equity/ EOP assets 9.01% 8.60%
Average equity/average assets 8.84% 8.70%
Interest margin - Yield - FTE 5.01% 4.93%
Interest margin - Cost - FTE 1.22% 1.09%
Net interest margin - FTE 3.80% 3.84%
Rate on interest-bearing liab 1.47% 1.31%
Efficiency ratio 53.58% 53.73%
Expense ratio 1.37% 0.91%
Net charge offs/average loans 0.09% 0.13%
Prov for loan losses/average loans 0.09% 0.13%
Nonperf loans/total loans 0.50% 0.50%
Nonperf assets/total loans 0.59% 0.62%
Nonperf assets/total loans+ORE 0.59% 0.62%
ALL/nonperforming loans 274.11% 274.73%
ALL/total loans 1.38% 1.38%
Net loans/total assets 65.20% 64.37%
COMMON STOCK PERFORMANCE
- ------------------------
Market value of stock-Close $ 31.080 $ 28.920
Market value of stock-High $ 32.360 $ 29.990
Market value of stock-Low $ 27.920 $ 25.890
Book value of stock $ 12.70 $ 12.28
Tangible book value of stock $ 10.42 $ 10.00
Tangible equity $ 602,790 $ 577,858
Market/Book value of stock 244.72% 235.50%
Price/Earnings ratio 15.94 12.61
Dividend payout 38.78% 33.33%
OTHER DATA
- ----------
EOP Employees - FTE 2,444 2,465
NOTES TO CONSOLIDATED FINANCIALS
Note 1- Business Combinations
On March 12, 2004, Trustmark acquired five branches of Allied Houston Bank in a
business combination accounted for by the purchase method of accounting. In
connection with the transaction, Trustmark acquired approximately $148.1 million
in assets and assumed $161.7 million in deposits and other liabilities for a $10
million deposit premium. Assets consisted of $145.9 million in loans, $585
thousand in premises and equipment and $1.6 million in other assets. The assets
and liabilities have been recorded at fair value based on market conditions and
risk characteristics at the acquisition date. Loans were recorded at a $6.4
million discount, consisting of a discount for general credit risk of $7.3
million offset by a market valuation premium of $862 thousand. Included in the
credit risk discount of $7.3 million was a specific amount for nonaccrual loans
of $1.7 million. Subsequent to the purchase date, the unpaid principal for these
nonaccrual loans were written down to their net realizable value against the
recorded discount. Excess cost over tangible net assets acquired totaled $15.7
million, of which $426 thousand and $15.3 million have been allocated to
identifiable intangibles (core deposits) and goodwill, respectively. Trustmark's
financial statements include the results of operations for this acquisition from
the merger date.
On August 29, 2003, Trustmark acquired seven Florida branches of The Banc
Corporation of Birmingham, Alabama, in a business combination accounted for by
the purchase method of accounting. These branches, known as the Emerald Coast
Division, serve the markets from Destin to Panama City. In connection with the
transaction, Trustmark paid a $46.8 million deposit premium in exchange for
$232.8 million in assets and $209.2 million in deposits and other liabilities.
Assets consisted of $224.3 million in loans, $6.8 million in premises and
equipment and $1.7 million in other assets. These assets and liabilities have
been recorded at fair value based on market conditions and risk characteristics
at the acquisition date. Loans were recorded at a $1.9 million discount,
consisting of a discount for general credit risk of $3.5 million offset by a
market valuation premium of $1.6 million. Excess costs over tangible net assets
acquired totaled $49.5 million, of which $1.7 million and $47.8 million have
been allocated to identifiable intangibles (core deposits) and goodwill,
respectively. Trustmark's financial statements include the results of operations
for this acquisition from the merger date.
Note 2 - Loans and Allowance for Loan Losses
For the periods presented, loans consisted of the following:
9/30/2004 6/30/2004 9/30/2003
---------- ---------- ----------
Real Estate $3,333,744 $3,363,658 $3,032,332
Commercial and industrial 859,156 884,340 804,459
Consumer 793,447 767,298 760,779
Other 401,995 369,495 426,640
---------- ---------- ----------
Loans 5,388,342 5,384,791 5,024,210
Less Allowance for loan losses 74,179 74,179 74,486
---------- ---------- ----------
Net Loans $5,314,163 $5,310,612 $4,949,724
========== ========== ==========
Loans are stated at the amount of unpaid principal, adjusted for the net amount
of direct costs, nonrefundable loan fees and discounts on purchased loans. As
mentioned in Note 1, Trustmark purchased $370.2 million in net loans through
branch purchase acquisitions in Florida and Texas. The discount associated with
the acquired loans, which is netted against unpaid principal, was $10.8 million
and will be accreted into income over the life of the specific loans acquired
for loans which are expected to be fully collected. Unpaid principal on loans
that are not expected to be fully collected will be written down against the
recorded discount.
The allowance for loan losses is established through provisions for estimated
loan losses charged against earnings and is maintained at a level believed
adequate by Management to absorb estimated probable loan losses. However, in the
case of the acquired loans in Florida and Texas, no specific loan loss reserve
was required under generally accepted accounting principles at the purchase date
because the loans were purchased at a discount which considered interest rate
and credit risk. As a result, the ratio of the allowance for loan losses to
loans has decreased to 1.38% (see pages 3 and 6) at September 30, 2004.
Note 3 - Mortgage Banking
For the periods presented, the carrying amount of mortgage servicing rights are
as follows:
9/30/2004 6/30/2004 9/30/2003
--------- --------- ---------
Mortgage Servicing Rights $ 58,990 $ 59,315 $ 66,247
Valuation Allowance (7,791) (4,680) (17,480)
--------- --------- ---------
Mortgage Servicing Rights, net $ 51,199 $ 54,635 $ 48,767
========= ========= =========
Impairment for mortgage servicing rights occurs when the estimated fair value
falls below the underlying carrying value. Fair value is determined utilizing
specific risk characteristics of the mortgage loan, current interest rates and
current prepayment speeds. During the second quarter of 2004, Trustmark
reclassified $6.6 million of mortgage servicing right impairment from temporary
to other-than-temporary which reduced the valuation allowance for impairment and
the gross mortgage servicing rights balance with no effect to the net mortgage
servicing rights asset. Impairment is considered to be other-than-temporary when
Trustmark determines that the carrying value is expected to exceed the fair
value for an extended period of time.
Mortgage servicing rights are rights to service mortgage loans for others,
whether the loans were acquired through purchase or loan origination. Purchased
mortgage servicing rights are capitalized at cost. For loans originated and sold
where the servicing rights are retained, Trustmark allocated the cost of the
loan and the servicing right based on their relative fair values. Mortgage
servicing rights are amortized over the estimated period of the related new
servicing income. At September 30, 2004, Trustmark serviced $3.4 billion in
mortgage loans for others.
The following table illustrates the components of mortgage banking included in
noninterest income in the accompanying income statements:
Quarter Ended
------------------------------------
9/30/2004 6/30/2004 9/30/2003
--------- --------- ----------
Mortgage servicing income $ 4,167 $ 4,217 $ 4,091
Mortgage guaranty fees (1,081) (1,126) (1,092)
--------- --------- ----------
Mortgage servicing, net 3,086 3,091 2,999
Amortization of mortgage
servicing rights (2,675) (2,800) (2,887)
Impairment of mortgage
servicing rights (3,111) 6,760 4,944
Gain on sale of loans 1,579 1,797 5,547
Other, net 190 253 (2,175)
--------- --------- ----------
Mortgage banking $ (931) $ 9,101 $ 8,428
========= ========= ==========
Year-to-date
----------------------
9/30/2004 9/30/2003
--------- ---------
Mortgage servicing income $ 12,612 $ 12,652
Mortgage guaranty fees (3,302) (3,454)
--------- ---------
Mortgage servicing, net 9,310 9,198
Amortization of mortgage
servicing rights (9,076) (11,621)
Impairment of mortgage
servicing rights 1,516 (4,999)
Gain on sale of loans 3,926 12,602
Other, net 591 (1,581)
--------- ---------
Mortgage banking $ 6,267 $ 3,599
========= =========
Note 4 - Net Interest Margin
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
---------------------------------
9/30/2004 6/30/2004 9/30/2003
--------- --------- ---------
Securities - Taxable 3.27% 2.95% 2.72%
Securities - Nontaxable 7.51% 7.66% 7.70%
Securities - Total 3.58% 3.29% 3.13%
Loans 5.59% 5.62% 5.79%
FF Sold & Rev Repo 1.56% 1.05% 1.16%
Total Earning Assets 5.01% 4.93% 5.04%
Interest-bearing Deposits 1.35% 1.30% 1.54%
FF Pch & Repo 1.33% 0.97% 0.97%
Borrowings 1.98% 1.60% 2.12%
Total Interest-bearing 1.47% 1.31% 1.54%
Liabilities
Net interest margin 3.80% 3.84% 3.80%
Year-to-date
---------------------
9/30/2004 9/30/2003
--------- ---------
Securities - Taxable 3.18% 3.92%
Securities - Nontaxable 7.61% 7.88%
Securities - Total 3.51% 4.25%
Loans 5.63% 6.06%
FF Sold & Rev Repo 1.26% 1.17%
Total Earning Assets 5.00% 5.53%
Interest-bearing Deposits 1.33% 1.70%
FF Pch & Repo 1.09% 1.12%
Borrowings 1.82% 2.49%
Total Interest-bearing 1.39% 1.71%
Liabilities
Net interest margin 3.86% 4.15%
Note 5 - Early Retirement Program
In February 2003, Trustmark announced a voluntary early retirement program (ERP)
for associates age 58 and above with ten or more years of service. This program
was accepted by 116 associates, or 4.75% of Trustmark's workforce. An after-tax
charge of approximately $4.1 million, or $0.07 per share, was recognized in
Trustmark's first quarter 2003 earnings.
Note 6 - Basis of Presentation
Certain reclassifications have been made to prior period amounts to conform with
the current period presentation.