[April 24, 2018] |
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Trustmark Corporation Announces First Quarter 2018 Financial Results
Trustmark Corporation (NASDAQ:TRMK) reported net income of $36.8 million
in the first quarter of 2018, representing diluted earnings per share of
$0.54. Diluted earnings per share in the first quarter of 2018 increased
12.5% when compared to core earnings in the previous quarter and 17.4%
when compared to the same period in the prior year. This level of
earnings resulted in a return on average tangible equity of 13.05% and a
return on average assets of 1.10%. Trustmark's Board of Directors
declared a quarterly cash dividend of $0.23 per share payable June 15,
2018, to shareholders of record on June 1, 2018.
This press release features multimedia. View the full release here:
https://www.businesswire.com/news/home/20180424006356/en/
Printer friendly version of earnings release with consolidated financial
statements and notes: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=51793894&lang=en
First Quarter Highlights
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Revenue, excluding interest and fees on acquired loans, increased 1.7%
linked quarter and 4.0% year-over-year to total $144.0 million
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The net interest margin (FTE), excluding acquired loans, was 3.37% in
the first quarter, up 2 basis points from the prior quarter and down 1
basis point year-over-year
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Core noninterest expense, which excludes other real estate and
intangible amortization, totaled $100.2 million in the first quarter,
down 0.6% from the prior quarter and up 1.5% year-over-year
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Sustained strong credit performance reflected in reduced nonperforming
assets and net recoveries
Gerard R. Host, President and CEO, stated, "The first quarter marked a
positive start to 2018, as we placed continued emphasis on balance sheet
optimization, capital deployment and disciplined expense management. The
strong performance of our mortgage and insurance businesses shows the
value of our diverse business model. Thanks to our talented associates,
solid profitability and strong capital base, Trustmark remains well
positioned to continue meeting the needs of our customers and creating
long-term value for our shareholders."
Balance Sheet Management
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Continued balance sheet optimization through maturing investment
securities run-off and opportunistic share repurchases
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Capital base continues to provide flexibility in pursuing growth
opportunities
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Noninterest-bearing deposits represent 27.4% of total deposits
Loans held for investment totaled $8.5 billion at March 31, 2018, a
decrease of 0.7% from the prior quarter and an increase of 6.4% from the
comparable period one year earlier. Acquired loans totaled $215.5
million at March 31, 2018, down $46.0 million from the prior quarter.
Collectively, loans held for investment and acquired loans totaled $8.7
billion at March 31, 2018, down $102.0 million, or 1.2%, from the prior
quarter.
Deposits totaled $11.0 billion at March 31, 2018, up $398.3 million, or
3.8%, from the prior quarter. Trustmark continues to maintain an
attractive, low-cost deposit base with approximately 60% of deposit
balances in checking accounts. Deposit costs remain well controlled with
the 9 basis point linked-quarter increase in interest bearing deposit
cost driven in part by public fund deposits.
Trustmark's capital position remained solid, reflecting the consistent
profitability of its diversified financial services businesses. During
the first quarter, Trustmark repurchased $2.5 million of its common
shares in open market transactions and has $96.7 million in remaining
authority under its existing stock repurchase program, which expires
March 31, 2019. At March 31, 2018, Trustmark's tangible equity to
tangible assets ratio was 9.00%, while the total risk-based capital
ratio was 13.44%.
Credit Quality
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Other real estate decreased 8.5% and 29.3% from the prior quarter and
year-over-year, respectively
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Recoveries exceeded charge-offs; net recoveries represented -0.03% of
average loans
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Allowance for loan losses represented 314.28% of nonperforming loans,
excluding specifically reviewed impaired loans
Nonperforming loans totaled $68.7 million at March 31, 2018, up 1.7%
from the prior quarter and 12.1% year-over-year. Other real estate
totaled $39.6 million, reflecting a decline of 8.5% from the previous
quarter and 29.3% from the same period one year earlier. Collectively,
nonperforming assets totaled $108.3 million, reflecting a linked-quarter
decrease of 2.3% and year-over-year decrease of 7.7%.
Allocation of Trustmark's $81.2 million allowance for loan losses
represented 1.04% of commercial loans and 0.64% of consumer and home
mortgage loans, resulting in an allowance to total loans held for
investment of 0.95% at March 31, 2018, representing a level management
considers commensurate with the inherent risk in the loan portfolio.
Collectively, the allowance for both held for investment and acquired
loan losses represented 0.98% of total loans, which includes held for
investment and acquired loans.
Unless otherwise noted, all of the above credit quality metrics exclude
acquired loans.
Revenue Generation
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Net interest margin, excluding acquired loans, was 3.37%, an increase
of 2 basis points from the prior quarter
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Maturing investment securities run-off is accretive to the net
interest margin
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Deposit costs remain well controlled
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Noninterest income totaled $46.8 million, up 6.4% linked quarter and
1.7% year-over-year
Net interest income (FTE) in the first quarter totaled $105.3 million,
resulting in a net interest margin of 3.46%, down 2 basis points from
the prior quarter. Relative to the prior quarter, net interest income
(FTE) decreased $3.8 million, reflecting a $3.2 million decrease in
interest income and a $592 thousand increase in interest expense. During
the first quarter of 2018, the yield on acquired loans totaled 8.13% and
included $594 thousand in recoveries from the settlement of debt, which
represented approximately 0.99% of the annualized total acquired loan
yield. The net interest margin was negatively impacted by approximately
6 basis points linked-quarter and year-over-year due to the enactment of
the 2017 Tax Cuts and Jobs Act which reduced the fully tax equivalent
adjustment as a result of the lower corporate tax rate. This compression
year-over-year is principally offset by the runoff of maturing
investment securities, while linked quarter is offset by the runoff of
maturing investment securities and quarterly day count.
Noninterest income in the first quarter increased 6.4% from the prior
quarter to total $46.8 million, as higher mortgage banking revenues and
insurance commissions more than offset seasonal reductions in various
fee-income categories. Mortgage banking revenue totaled $11.3 million in
the first quarter, up $5.0 million from the prior quarter and $1.1
million year-over-year. The linked-quarter change reflects a net
positive mortgage valuation adjustment and a net positive mortgage
servicing hedge ineffectiveness that more than offset decreased
secondary marketing gains. Mortgage loan production totaled $289.1
million, down 14.3% from the prior quarter and 4.7% year-over-year.
Insurance revenue totaled $9.4 million in the first quarter, up 6.9%
from the prior quarter and 2.2% year-over-year; this performance
primarily reflects growth in the group health insurance and property and
casualty businesses.
Wealth management revenue in the first quarter totaled $7.6 million,
down 2.0% and up 2.1% from the prior quarter and year-over-year,
respectively. The linked-quarter decline is primarily attributable to
decreased commission-based transactions within investment services. Bank
card and other fees declined $640 thousand from the prior quarter due to
seasonal reductions in interchange income and other miscellaneous bank
fees. Service charges on deposit accounts declined $336 thousand from
the prior quarter, reflecting seasonal reductions in NSF and overdraft
fees.
Noninterest Expense
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Total noninterest expense declined 0.5% linked quarter and increased
0.4% year-over-year to $102.5 million
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Core noninterest expense, which excludes other real estate expense and
intangible amortization, totaled $100.2 million, down 0.6% from the
prior quarter and up 1.5% year-over-year
Salaries and employee benefits decreased $345 thousand from the prior
quarter to total $58.5 million. Services and fees increased 2.1%, or
$327 thousand, linked-quarter. Other real estate expense totaled $866
thousand, up $200 thousand from the prior quarter, while net
occupancy-premises expense totaled $6.5 million, down 1.7% from the
prior quarter. Other expense totaled $11.8 million, a decline of $783
thousand, or 6.2%, on a linked-quarter basis.
Trustmark remains committed to optimization of its retail delivery
channels to promote additional growth. In the first quarter, Trustmark
opened a location in Pensacola, Florida, that not only serves as a
branch, but also as headquarters for the Fisher Brown Bottrell Insurance
agency.
Additional Information
As previously announced, Trustmark will conduct a conference call with
analysts on Wednesday, April 25, 2018 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 9, 2018, in archived format at the same web address or by
calling (877) 344-7529, passcode 10118412.
Trustmark Corporation is a financial services company providing banking
and financial solutions through 199 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 and 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 monetary and
other governmental actions designed to address the level and volatility
of interest rates and the volatility of securities, currency and other
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, changes in our compensation and benefit plans, 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.
TRUSTMARK CORPORATION AND SUBSIDIARIES
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CONSOLIDATED FINANCIAL INFORMATION
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March 31, 2018
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($ in thousands)
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(unaudited)
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Linked Quarter
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Year over Year
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QUARTERLY AVERAGE BALANCES
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3/31/2018
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12/31/2017
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3/31/2017
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$ Change
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% Change
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$ Change
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% Change
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Securities AFS-taxable
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$ 2,141,144
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$ 2,247,247
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$ 2,252,162
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$ (106,103)
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-4.7%
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$ (111,018)
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-4.9%
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Securities AFS-nontaxable
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57,972
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61,691
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88,522
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(3,719)
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-6.0%
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(30,550)
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-34.5%
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Securities HTM-taxable
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1,005,721
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1,045,723
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1,124,692
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(40,002)
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-3.8%
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(118,971)
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-10.6%
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Securities HTM-nontaxable
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32,734
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32,781
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33,009
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(47)
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-0.1%
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(275)
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-0.8%
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Total securities
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3,237,571
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3,387,442
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3,498,385
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(149,871)
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-4.4%
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(260,814)
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-7.5%
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Loans (including loans held for sale)
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8,636,967
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8,686,916
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8,074,449
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(49,949)
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-0.6%
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562,518
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7.0%
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Acquired loans
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243,152
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273,918
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250,482
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(30,766)
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-11.2%
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(7,330)
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-2.9%
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Fed funds sold and rev repos
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478
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1,724
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397
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(1,246)
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-72.3%
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81
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20.4%
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Other earning assets
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213,985
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80,218
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79,515
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133,767
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n/m
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134,470
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n/m
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Total earning assets
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12,332,153
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12,430,218
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11,903,228
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(98,065)
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-0.8%
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428,925
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3.6%
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Allowance for loan losses
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(82,304)
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(86,704)
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(83,394)
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4,400
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5.1%
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1,090
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1.3%
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Cash and due from banks
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336,642
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315,586
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310,542
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21,056
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6.7%
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26,100
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8.4%
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Other assets
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1,030,738
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1,192,464
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1,235,469
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(161,726)
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-13.6%
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(204,731)
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-16.6%
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Total assets
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$ 13,617,229
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$ 13,851,564
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$ 13,365,845
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$ (234,335)
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-1.7%
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$ 251,384
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1.9%
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Interest-bearing demand deposits
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$ 2,404,428
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$ 2,244,625
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$ 1,981,982
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$ 159,803
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7.1%
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$ 422,446
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21.3%
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Savings deposits
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3,737,507
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3,291,407
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3,319,572
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446,100
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13.6%
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417,935
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12.6%
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Time deposits
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1,748,645
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1,756,576
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1,650,251
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(7,931)
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-0.5%
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98,394
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6.0%
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Total interest-bearing deposits
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7,890,580
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7,292,608
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6,951,805
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597,972
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8.2%
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938,775
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13.5%
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Fed funds purchased and repos
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277,877
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475,850
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498,963
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(197,973)
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-41.6%
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(221,086)
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-44.3%
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Short-term borrowings
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751,219
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1,276,543
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887,848
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(525,324)
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-41.2%
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(136,629)
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-15.4%
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Long-term FHLB advances
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938
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954
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251,033
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(16)
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-1.7%
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(250,095)
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-99.6%
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Junior subordinated debt securities
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61,856
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61,856
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61,856
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-
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0.0%
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-
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0.0%
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Total interest-bearing liabilities
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8,982,470
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9,107,811
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8,651,505
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(125,341)
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-1.4%
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330,965
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3.8%
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Noninterest-bearing deposits
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2,881,374
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2,994,292
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3,008,176
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(112,918)
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-3.8%
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(126,802)
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-4.2%
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Other liabilities
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180,871
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169,828
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173,066
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11,043
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6.5%
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7,805
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4.5%
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Total liabilities
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12,044,715
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12,271,931
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11,832,747
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(227,216)
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-1.9%
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211,968
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1.8%
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Shareholders' equity
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1,572,514
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1,579,633
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1,533,098
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(7,119)
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-0.5%
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39,416
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2.6%
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Total liabilities and equity
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$ 13,617,229
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$ 13,851,564
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$ 13,365,845
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$ (234,335)
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-1.7%
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$ 251,384
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1.9%
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n/m - percentage changes greater than +/- 100% are considered
not meaningful
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See Notes to Consolidated Financials
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TRUSTMARK CORPORATION AND SUBSIDIARIES
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CONSOLIDATED FINANCIAL INFORMATION
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March 31, 2018
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($ in thousands)
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(unaudited)
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Linked Quarter
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Year over Year
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PERIOD END BALANCES
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3/31/2018
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12/31/2017
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3/31/2017
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$ Change
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% Change
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$ Change
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% Change
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Cash and due from banks
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$ 315,276
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$ 335,768
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$ 379,590
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$ (20,492)
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-6.1%
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$ (64,314)
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-16.9%
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Fed funds sold and rev repos
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112
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615
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500
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(503)
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-81.8%
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(388)
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-77.6%
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Securities available for sale
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2,097,497
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2,238,635
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2,365,554
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(141,138)
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-6.3%
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(268,057)
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-11.3%
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Securities held to maturity
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1,023,975
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1,056,486
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1,156,067
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(32,511)
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-3.1%
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(132,092)
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-11.4%
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Loans held for sale (LHFS)
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163,882
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180,512
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174,090
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(16,630)
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-9.2%
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(10,208)
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-5.9%
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Loans held for investment (LHFI)
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8,513,985
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8,569,967
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8,004,657
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(55,982)
|
|
-0.7%
|
|
|
509,328
|
|
6.4%
|
Allowance for loan losses
|
|
(81,235)
|
|
(76,733)
|
|
(72,445)
|
|
(4,502)
|
|
-5.9%
|
|
|
(8,790)
|
|
-12.1%
|
Net LHFI
|
|
8,432,750
|
|
8,493,234
|
|
7,932,212
|
|
(60,484)
|
|
-0.7%
|
|
|
500,538
|
|
6.3%
|
Acquired loans
|
|
215,476
|
|
261,517
|
|
218,242
|
|
(46,041)
|
|
-17.6%
|
|
|
(2,766)
|
|
-1.3%
|
Allowance for loan losses, acquired loans
|
|
(4,294)
|
|
(4,079)
|
|
(10,006)
|
|
(215)
|
|
-5.3%
|
|
|
5,712
|
|
57.1%
|
Net acquired loans
|
|
211,182
|
|
257,438
|
|
208,236
|
|
(46,256)
|
|
-18.0%
|
|
|
2,946
|
|
1.4%
|
Net LHFI and acquired loans
|
|
8,643,932
|
|
8,750,672
|
|
8,140,448
|
|
(106,740)
|
|
-1.2%
|
|
|
503,484
|
|
6.2%
|
Premises and equipment, net
|
|
178,584
|
|
179,339
|
|
183,311
|
|
(755)
|
|
-0.4%
|
|
|
(4,727)
|
|
-2.6%
|
Mortgage servicing rights
|
|
94,850
|
|
84,269
|
|
82,758
|
|
10,581
|
|
12.6%
|
|
|
12,092
|
|
14.6%
|
Goodwill
|
|
379,627
|
|
379,627
|
|
366,156
|
|
-
|
|
0.0%
|
|
|
13,471
|
|
3.7%
|
Identifiable intangible assets
|
|
14,963
|
|
16,360
|
|
19,117
|
|
(1,397)
|
|
-8.5%
|
|
|
(4,154)
|
|
-21.7%
|
Other real estate
|
|
39,554
|
|
43,228
|
|
55,968
|
|
(3,674)
|
|
-8.5%
|
|
|
(16,414)
|
|
-29.3%
|
Other assets
|
|
511,187
|
|
532,442
|
|
566,802
|
|
(21,255)
|
|
-4.0%
|
|
|
(55,615)
|
|
-9.8%
|
Total assets
|
|
$ 13,463,439
|
|
$ 13,797,953
|
|
$ 13,490,361
|
|
$ (334,514)
|
|
-2.4%
|
|
|
$ (26,922)
|
|
-0.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
|
|
$ 3,004,442
|
|
$ 2,978,074
|
|
$ 3,209,727
|
|
$ 26,368
|
|
0.9%
|
|
|
$ (205,285)
|
|
-6.4%
|
Interest-bearing
|
|
7,971,359
|
|
7,599,438
|
|
6,894,745
|
|
371,921
|
|
4.9%
|
|
|
1,076,614
|
|
15.6%
|
Total deposits
|
|
10,975,801
|
|
10,577,512
|
|
10,104,472
|
|
398,289
|
|
3.8%
|
|
|
871,329
|
|
8.6%
|
Fed funds purchased and repos
|
|
274,833
|
|
469,827
|
|
524,335
|
|
(194,994)
|
|
-41.5%
|
|
|
(249,502)
|
|
-47.6%
|
Short-term borrowings
|
|
442,689
|
|
971,049
|
|
864,690
|
|
(528,360)
|
|
-54.4%
|
|
|
(422,001)
|
|
-48.8%
|
Long-term FHLB advances
|
|
929
|
|
946
|
|
250,994
|
|
(17)
|
|
-1.8%
|
|
|
(250,065)
|
|
-99.6%
|
Junior subordinated debt securities
|
|
61,856
|
|
61,856
|
|
61,856
|
|
-
|
|
0.0%
|
|
|
-
|
|
0.0%
|
Other liabilities
|
|
137,194
|
|
145,062
|
|
146,053
|
|
(7,868)
|
|
-5.4%
|
|
|
(8,859)
|
|
-6.1%
|
Total liabilities
|
|
11,893,302
|
|
12,226,252
|
|
11,952,400
|
|
(332,950)
|
|
-2.7%
|
|
|
(59,098)
|
|
-0.5%
|
Common stock
|
|
14,121
|
|
14,115
|
|
14,112
|
|
6
|
|
0.0%
|
|
|
9
|
|
0.1%
|
Capital surplus
|
|
366,021
|
|
369,124
|
|
365,951
|
|
(3,103)
|
|
-0.8%
|
|
|
70
|
|
0.0%
|
Retained earnings
|
|
1,257,881
|
|
1,228,187
|
|
1,200,903
|
|
29,694
|
|
2.4%
|
|
|
56,978
|
|
4.7%
|
Accum other comprehensive loss, net of tax
|
|
(67,886)
|
|
(39,725)
|
|
(43,005)
|
|
(28,161)
|
|
-70.9%
|
|
|
(24,881)
|
|
-57.9%
|
Total shareholders' equity
|
|
1,570,137
|
|
1,571,701
|
|
1,537,961
|
|
(1,564)
|
|
-0.1%
|
|
|
32,176
|
|
2.1%
|
Total liabilities and equity
|
|
$ 13,463,439
|
|
$ 13,797,953
|
|
$ 13,490,361
|
|
$ (334,514)
|
|
-2.4%
|
|
|
$ (26,922)
|
|
-0.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2018
|
($ in thousands except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Linked Quarter
|
|
|
Year over Year
|
INCOME STATEMENTS
|
|
3/31/2018
|
|
12/31/2017
|
|
3/31/2017
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
Interest and fees on LHFS & LHFI-FTE
|
|
$ 94,712
|
|
$ 95,816
|
|
$ 83,790
|
|
$ (1,104)
|
|
-1.2%
|
|
|
$ 10,922
|
|
13.0%
|
Interest and fees on acquired loans
|
|
4,877
|
|
6,401
|
|
5,189
|
|
(1,524)
|
|
-23.8%
|
|
|
(312)
|
|
-6.0%
|
Interest on securities-taxable
|
|
17,506
|
|
18,327
|
|
19,197
|
|
(821)
|
|
-4.5%
|
|
|
(1,691)
|
|
-8.8%
|
Interest on securities-tax exempt-FTE
|
|
824
|
|
1,035
|
|
1,300
|
|
(211)
|
|
-20.4%
|
|
|
(476)
|
|
-36.6%
|
Interest on fed funds sold and rev repos
|
|
2
|
|
7
|
|
1
|
|
(5)
|
|
-71.4%
|
|
|
1
|
|
100.0%
|
Other interest income
|
|
934
|
|
473
|
|
267
|
|
461
|
|
97.5%
|
|
|
667
|
|
n/m
|
Total interest income-FTE
|
|
118,855
|
|
122,059
|
|
109,744
|
|
(3,204)
|
|
-2.6%
|
|
|
9,111
|
|
8.3%
|
Interest on deposits
|
|
9,491
|
|
7,284
|
|
3,945
|
|
2,207
|
|
30.3%
|
|
|
5,546
|
|
n/m
|
Interest on fed funds pch and repos
|
|
662
|
|
1,116
|
|
698
|
|
(454)
|
|
-40.7%
|
|
|
(36)
|
|
-5.2%
|
Other interest expense
|
|
3,394
|
|
4,555
|
|
2,673
|
|
(1,161)
|
|
-25.5%
|
|
|
721
|
|
27.0%
|
Total interest expense
|
|
13,547
|
|
12,955
|
|
7,316
|
|
592
|
|
4.6%
|
|
|
6,231
|
|
85.2%
|
Net interest income-FTE
|
|
105,308
|
|
109,104
|
|
102,428
|
|
(3,796)
|
|
-3.5%
|
|
|
2,880
|
|
2.8%
|
Provision for loan losses, LHFI
|
|
3,961
|
|
5,739
|
|
2,762
|
|
(1,778)
|
|
-31.0%
|
|
|
1,199
|
|
43.4%
|
Provision for loan losses, acquired loans
|
|
150
|
|
(1,573)
|
|
(1,605)
|
|
1,723
|
|
n/m
|
|
|
1,755
|
|
n/m
|
Net interest income after provision-FTE
|
|
101,197
|
|
104,938
|
|
101,271
|
|
(3,741)
|
|
-3.6%
|
|
|
(74)
|
|
-0.1%
|
Service charges on deposit accounts
|
|
10,857
|
|
11,193
|
|
10,832
|
|
(336)
|
|
-3.0%
|
|
|
25
|
|
0.2%
|
Bank card and other fees
|
|
6,626
|
|
7,266
|
|
6,500
|
|
(640)
|
|
-8.8%
|
|
|
126
|
|
1.9%
|
Mortgage banking, net
|
|
11,265
|
|
6,284
|
|
10,185
|
|
4,981
|
|
79.3%
|
|
|
1,080
|
|
10.6%
|
Insurance commissions
|
|
9,419
|
|
8,813
|
|
9,212
|
|
606
|
|
6.9%
|
|
|
207
|
|
2.2%
|
Wealth management
|
|
7,567
|
|
7,723
|
|
7,413
|
|
(156)
|
|
-2.0%
|
|
|
154
|
|
2.1%
|
Other, net
|
|
1,059
|
|
2,681
|
|
1,891
|
|
(1,622)
|
|
-60.5%
|
|
|
(832)
|
|
-44.0%
|
Nonint inc-excl sec gains (losses), net
|
|
46,793
|
|
43,960
|
|
46,033
|
|
2,833
|
|
6.4%
|
|
|
760
|
|
1.7%
|
Security gains (losses), net
|
|
-
|
|
-
|
|
-
|
|
-
|
|
n/m
|
|
|
-
|
|
n/m
|
Total noninterest income
|
|
46,793
|
|
43,960
|
|
46,033
|
|
2,833
|
|
6.4%
|
|
|
760
|
|
1.7%
|
Salaries and employee benefits
|
|
58,475
|
|
58,820
|
|
55,389
|
|
(345)
|
|
-0.6%
|
|
|
3,086
|
|
5.6%
|
Defined benefit plan termination
|
|
-
|
|
-
|
|
-
|
|
-
|
|
n/m
|
|
|
-
|
|
n/m
|
Services and fees
|
|
15,746
|
|
15,419
|
|
15,332
|
|
327
|
|
2.1%
|
|
|
414
|
|
2.7%
|
Net occupancy-premises
|
|
6,502
|
|
6,617
|
|
6,238
|
|
(115)
|
|
-1.7%
|
|
|
264
|
|
4.2%
|
Equipment expense
|
|
6,099
|
|
5,996
|
|
5,998
|
|
103
|
|
1.7%
|
|
|
101
|
|
1.7%
|
Other real estate expense
|
|
866
|
|
666
|
|
1,759
|
|
200
|
|
30.0%
|
|
|
(893)
|
|
-50.8%
|
FDIC assessment expense
|
|
2,995
|
|
2,868
|
|
2,640
|
|
127
|
|
4.4%
|
|
|
355
|
|
13.4%
|
Other expense
|
|
11,782
|
|
12,565
|
|
14,701
|
|
(783)
|
|
-6.2%
|
|
|
(2,919)
|
|
-19.9%
|
Total noninterest expense
|
|
102,465
|
|
102,951
|
|
102,057
|
|
(486)
|
|
-0.5%
|
|
|
408
|
|
0.4%
|
Income before income taxes and tax eq adj
|
|
45,525
|
|
45,947
|
|
45,247
|
|
(422)
|
|
-0.9%
|
|
|
278
|
|
0.6%
|
Tax equivalent adjustment
|
|
3,215
|
|
5,060
|
|
4,838
|
|
(1,845)
|
|
-36.5%
|
|
|
(1,623)
|
|
-33.5%
|
Income before income taxes
|
|
42,310
|
|
40,887
|
|
40,409
|
|
1,423
|
|
3.5%
|
|
|
1,901
|
|
4.7%
|
Income taxes
|
|
5,480
|
|
25,119
|
|
9,161
|
|
(19,639)
|
|
-78.2%
|
|
|
(3,681)
|
|
-40.2%
|
Net income
|
|
$ 36,830
|
|
$ 15,768
|
|
$ 31,248
|
|
$ 21,062
|
|
n/m
|
|
|
$ 5,582
|
|
17.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - basic
|
|
$ 0.54
|
|
$ 0.23
|
|
$ 0.46
|
|
$ 0.31
|
|
n/m
|
|
|
$ 0.08
|
|
17.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - diluted
|
|
$ 0.54
|
|
$ 0.23
|
|
$ 0.46
|
|
$ 0.31
|
|
n/m
|
|
|
$ 0.08
|
|
17.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per share
|
|
$ 0.23
|
|
$ 0.23
|
|
$ 0.23
|
|
-
|
|
0.0%
|
|
|
-
|
|
0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
67,809,234
|
|
67,742,792
|
|
67,687,365
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
67,960,583
|
|
67,938,986
|
|
67,845,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period end shares outstanding
|
|
67,775,068
|
|
67,746,094
|
|
67,729,434
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2018
|
($ in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Linked Quarter
|
|
|
Year over Year
|
NONPERFORMING ASSETS (1)
|
|
3/31/2018
|
|
12/31/2017
|
|
3/31/2017
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
Nonaccrual loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alabama
|
|
$ 3,121
|
|
$ 3,083
|
|
$ 1,649
|
|
$ 38
|
|
1.2%
|
|
|
$ 1,472
|
|
89.3%
|
Florida
|
|
2,116
|
|
3,034
|
|
3,559
|
|
(918)
|
|
-30.3%
|
|
|
(1,443)
|
|
-40.5%
|
Mississippi (2)
|
|
48,600
|
|
49,129
|
|
49,349
|
|
(529)
|
|
-1.1%
|
|
|
(749)
|
|
-1.5%
|
Tennessee (3)
|
|
5,530
|
|
4,436
|
|
5,185
|
|
1,094
|
|
24.7%
|
|
|
345
|
|
6.7%
|
Texas
|
|
9,329
|
|
7,893
|
|
1,565
|
|
1,436
|
|
18.2%
|
|
|
7,764
|
|
n/m
|
Total nonaccrual loans
|
|
68,696
|
|
67,575
|
|
61,307
|
|
1,121
|
|
1.7%
|
|
|
7,389
|
|
12.1%
|
Other real estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alabama
|
|
8,962
|
|
11,714
|
|
13,953
|
|
(2,752)
|
|
-23.5%
|
|
|
(4,991)
|
|
-35.8%
|
Florida
|
|
12,550
|
|
13,937
|
|
21,577
|
|
(1,387)
|
|
-10.0%
|
|
|
(9,027)
|
|
-41.8%
|
Mississippi (2)
|
|
15,737
|
|
14,260
|
|
14,974
|
|
1,477
|
|
10.4%
|
|
|
763
|
|
5.1%
|
Tennessee (3)
|
|
1,523
|
|
2,535
|
|
4,706
|
|
(1,012)
|
|
-39.9%
|
|
|
(3,183)
|
|
-67.6%
|
Texas
|
|
782
|
|
782
|
|
758
|
|
-
|
|
0.0%
|
|
|
24
|
|
3.2%
|
Total other real estate
|
|
39,554
|
|
43,228
|
|
55,968
|
|
(3,674)
|
|
-8.5%
|
|
|
(16,414)
|
|
-29.3%
|
Total nonperforming assets
|
|
$ 108,250
|
|
$ 110,803
|
|
$ 117,275
|
|
$ (2,553)
|
|
-2.3%
|
|
|
$ (9,025)
|
|
-7.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOANS PAST DUE OVER 90 DAYS (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LHFI
|
|
$ 1,419
|
|
$ 2,171
|
|
$ 1,307
|
|
$ (752)
|
|
-34.6%
|
|
|
$ 112
|
|
8.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LHFS-Guaranteed GNMA serviced loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(no obligation to repurchase)
|
|
$ 34,826
|
|
$ 35,544
|
|
$ 31,147
|
|
$ (718)
|
|
-2.0%
|
|
|
$ 3,679
|
|
11.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Linked Quarter
|
|
|
Year over Year
|
ALLOWANCE FOR LOAN LOSSES (1)
|
|
3/31/2018
|
|
12/31/2017
|
|
3/31/2017
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
Beginning Balance
|
|
$ 76,733
|
|
$ 80,332
|
|
$ 71,265
|
|
$ (3,599)
|
|
-4.5%
|
|
|
$ 5,468
|
|
7.7%
|
Provision for loan losses
|
|
3,961
|
|
5,739
|
|
2,762
|
|
(1,778)
|
|
-31.0%
|
|
|
1,199
|
|
43.4%
|
Charge-offs
|
|
(2,542)
|
|
(12,075)
|
|
(4,202)
|
|
9,533
|
|
78.9%
|
|
|
1,660
|
|
39.5%
|
Recoveries
|
|
3,083
|
|
2,737
|
|
2,620
|
|
346
|
|
12.6%
|
|
|
463
|
|
17.7%
|
Net (charge-offs) recoveries
|
|
541
|
|
(9,338)
|
|
(1,582)
|
|
9,879
|
|
n/m
|
|
|
2,123
|
|
n/m
|
Ending Balance
|
|
$ 81,235
|
|
$ 76,733
|
|
$ 72,445
|
|
$ 4,502
|
|
5.9%
|
|
|
$ 8,790
|
|
12.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR LOAN LOSSES (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alabama
|
|
$ 618
|
|
$ 559
|
|
$ 1,189
|
|
$ 59
|
|
10.6%
|
|
|
$ (571)
|
|
-48.0%
|
Florida
|
|
(863)
|
|
(1,235)
|
|
3
|
|
372
|
|
30.1%
|
|
|
(866)
|
|
n/m
|
Mississippi (2)
|
|
2,664
|
|
2,779
|
|
1,826
|
|
(115)
|
|
-4.1%
|
|
|
838
|
|
45.9%
|
Tennessee (3)
|
|
(268)
|
|
(439)
|
|
208
|
|
171
|
|
39.0%
|
|
|
(476)
|
|
n/m
|
Texas
|
|
1,810
|
|
4,075
|
|
(464)
|
|
(2,265)
|
|
-55.6%
|
|
|
2,274
|
|
n/m
|
Total provision for loan losses
|
|
$ 3,961
|
|
$ 5,739
|
|
$ 2,762
|
|
$ (1,778)
|
|
-31.0%
|
|
|
$ 1,199
|
|
43.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CHARGE-OFFS (RECOVERIES)
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alabama
|
|
$ 84
|
|
$ 196
|
|
$ 66
|
|
$ (112)
|
|
-57.1%
|
|
|
$ 18
|
|
27.3%
|
Florida
|
|
(960)
|
|
(946)
|
|
(155)
|
|
(14)
|
|
-1.5%
|
|
|
(805)
|
|
n/m
|
Mississippi (2)
|
|
267
|
|
5,574
|
|
1,759
|
|
(5,307)
|
|
-95.2%
|
|
|
(1,492)
|
|
-84.8%
|
Tennessee (3)
|
|
109
|
|
79
|
|
83
|
|
30
|
|
38.0%
|
|
|
26
|
|
31.3%
|
Texas
|
|
(41)
|
|
4,435
|
|
(171)
|
|
(4,476)
|
|
n/m
|
|
|
130
|
|
76.0%
|
Total net charge-offs (recoveries)
|
|
$ (541)
|
|
$ 9,338
|
|
$ 1,582
|
|
$ (9,879)
|
|
n/m
|
|
|
$ (2,123)
|
|
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, 2018
|
($ in thousands)
|
(unaudited)
|
|
|
Quarter Ended
|
AVERAGE BALANCES
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
Securities AFS-taxable
|
|
$ 2,141,144
|
|
$ 2,247,247
|
|
$ 2,349,736
|
|
$ 2,334,600
|
|
$ 2,252,162
|
Securities AFS-nontaxable
|
|
57,972
|
|
61,691
|
|
67,994
|
|
75,640
|
|
88,522
|
Securities HTM-taxable
|
|
1,005,721
|
|
1,045,723
|
|
1,086,773
|
|
1,108,158
|
|
1,124,692
|
Securities HTM-nontaxable
|
|
32,734
|
|
32,781
|
|
32,829
|
|
32,878
|
|
33,009
|
Total securities
|
|
3,237,571
|
|
3,387,442
|
|
3,537,332
|
|
3,551,276
|
|
3,498,385
|
Loans (including loans held for sale)
|
|
8,636,967
|
|
8,686,916
|
|
8,532,523
|
|
8,348,758
|
|
8,074,449
|
Acquired loans
|
|
243,152
|
|
273,918
|
|
299,221
|
|
315,558
|
|
250,482
|
Fed funds sold and rev repos
|
|
478
|
|
1,724
|
|
3,582
|
|
3,184
|
|
397
|
Other earning assets
|
|
213,985
|
|
80,218
|
|
84,320
|
|
77,770
|
|
79,515
|
Total earning assets
|
|
12,332,153
|
|
12,430,218
|
|
12,456,978
|
|
12,296,546
|
|
11,903,228
|
Allowance for loan losses
|
|
(82,304)
|
|
(86,704)
|
|
(85,363)
|
|
(83,328)
|
|
(83,394)
|
Cash and due from banks
|
|
336,642
|
|
315,586
|
|
312,409
|
|
307,966
|
|
310,542
|
Other assets
|
|
1,030,738
|
|
1,192,464
|
|
1,202,766
|
|
1,229,981
|
|
1,235,469
|
Total assets
|
|
$ 13,617,229
|
|
$ 13,851,564
|
|
$ 13,886,790
|
|
$ 13,751,165
|
|
$ 13,365,845
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand deposits
|
|
$ 2,404,428
|
|
$ 2,244,625
|
|
$ 2,192,064
|
|
$ 2,035,491
|
|
$ 1,981,982
|
Savings deposits
|
|
3,737,507
|
|
3,291,407
|
|
3,284,323
|
|
3,337,374
|
|
3,319,572
|
Time deposits
|
|
1,748,645
|
|
1,756,576
|
|
1,736,683
|
|
1,777,529
|
|
1,650,251
|
Total interest-bearing deposits
|
|
7,890,580
|
|
7,292,608
|
|
7,213,070
|
|
7,150,394
|
|
6,951,805
|
Fed funds purchased and repos
|
|
277,877
|
|
475,850
|
|
547,863
|
|
525,523
|
|
498,963
|
Short-term borrowings
|
|
751,219
|
|
1,276,543
|
|
1,335,476
|
|
1,047,107
|
|
887,848
|
Long-term FHLB advances
|
|
938
|
|
954
|
|
970
|
|
141,097
|
|
251,033
|
Junior subordinated debt securities
|
|
61,856
|
|
61,856
|
|
61,856
|
|
61,856
|
|
61,856
|
Total interest-bearing liabilities
|
|
8,982,470
|
|
9,107,811
|
|
9,159,235
|
|
8,925,977
|
|
8,651,505
|
Noninterest-bearing deposits
|
|
2,881,374
|
|
2,994,292
|
|
3,003,763
|
|
3,110,125
|
|
3,008,176
|
Other liabilities
|
|
180,871
|
|
169,828
|
|
145,925
|
|
162,823
|
|
173,066
|
Total liabilities
|
|
12,044,715
|
|
12,271,931
|
|
12,308,923
|
|
12,198,925
|
|
11,832,747
|
Shareholders' equity
|
|
1,572,514
|
|
1,579,633
|
|
1,577,867
|
|
1,552,240
|
|
1,533,098
|
Total liabilities and equity
|
|
$ 13,617,229
|
|
$ 13,851,564
|
|
$ 13,886,790
|
|
$ 13,751,165
|
|
$ 13,365,845
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Consolidated Financials
|
|
TRUSTMARK CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED FINANCIAL INFORMATION
|
March 31, 2018
|
($ in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
PERIOD END BALANCES
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
Cash and due from banks
|
|
$ 315,276
|
|
$ 335,768
|
|
$ 350,123
|
|
$ 318,329
|
|
$ 379,590
|
Fed funds sold and rev repos
|
|
112
|
|
615
|
|
3,215
|
|
6,900
|
|
500
|
Securities available for sale
|
|
2,097,497
|
|
2,238,635
|
|
2,369,089
|
|
2,447,688
|
|
2,365,554
|
Securities held to maturity
|
|
1,023,975
|
|
1,056,486
|
|
1,102,283
|
|
1,139,754
|
|
1,156,067
|
Loans held for sale (LHFS)
|
|
163,882
|
|
180,512
|
|
204,157
|
|
203,652
|
|
174,090
|
Loans held for investment (LHFI)
|
|
8,513,985
|
|
8,569,967
|
|
8,407,341
|
|
8,296,045
|
|
8,004,657
|
Allowance for loan losses
|
|
(81,235)
|
|
(76,733)
|
|
(80,332)
|
|
(76,184)
|
|
(72,445)
|
Net LHFI
|
|
8,432,750
|
|
8,493,234
|
|
8,327,009
|
|
8,219,861
|
|
7,932,212
|
Acquired loans
|
|
215,476
|
|
261,517
|
|
283,757
|
|
314,910
|
|
218,242
|
Allowance for loan losses, acquired loans
|
|
(4,294)
|
|
(4,079)
|
|
(5,768)
|
|
(7,423)
|
|
(10,006)
|
Net acquired loans
|
|
211,182
|
|
257,438
|
|
277,989
|
|
307,487
|
|
208,236
|
Net LHFI and acquired loans
|
|
8,643,932
|
|
8,750,672
|
|
8,604,998
|
|
8,527,348
|
|
8,140,448
|
Premises and equipment, net
|
|
178,584
|
|
179,339
|
|
181,312
|
|
182,315
|
|
183,311
|
Mortgage servicing rights
|
|
94,850
|
|
84,269
|
|
81,477
|
|
82,628
|
|
82,758
|
Goodwill
|
|
379,627
|
|
379,627
|
|
379,627
|
|
379,627
|
|
366,156
|
Identifiable intangible assets
|
|
14,963
|
|
16,360
|
|
17,883
|
|
19,422
|
|
19,117
|
Other real estate
|
|
39,554
|
|
43,228
|
|
48,356
|
|
49,958
|
|
55,968
|
Other assets
|
|
511,187
|
|
532,442
|
|
542,135
|
|
551,517
|
|
566,802
|
Total assets
|
|
$ 13,463,439
|
|
$ 13,797,953
|
|
$ 13,884,655
|
|
$ 13,909,138
|
|
$ 13,490,361
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
|
|
$ 3,004,442
|
|
$ 2,978,074
|
|
$ 2,998,013
|
|
$ 3,092,915
|
|
$ 3,209,727
|
Interest-bearing
|
|
7,971,359
|
|
7,599,438
|
|
7,233,729
|
|
7,330,476
|
|
6,894,745
|
Total deposits
|
|
10,975,801
|
|
10,577,512
|
|
10,231,742
|
|
10,423,391
|
|
10,104,472
|
Fed funds purchased and repos
|
|
274,833
|
|
469,827
|
|
545,603
|
|
508,068
|
|
524,335
|
Short-term borrowings
|
|
442,689
|
|
971,049
|
|
1,322,159
|
|
1,222,592
|
|
864,690
|
Long-term FHLB advances
|
|
929
|
|
946
|
|
962
|
|
978
|
|
250,994
|
Junior subordinated debt securities
|
|
61,856
|
|
61,856
|
|
61,856
|
|
61,856
|
|
61,856
|
Other liabilities
|
|
137,194
|
|
145,062
|
|
139,798
|
|
130,335
|
|
146,053
|
Total liabilities
|
|
11,893,302
|
|
12,226,252
|
|
12,302,120
|
|
12,347,220
|
|
11,952,400
|
Common stock
|
|
14,121
|
|
14,115
|
|
14,114
|
|
14,114
|
|
14,112
|
Capital surplus
|
|
366,021
|
|
369,124
|
|
368,131
|
|
367,075
|
|
365,951
|
Retained earnings
|
|
1,257,881
|
|
1,228,187
|
|
1,228,115
|
|
1,209,238
|
|
1,200,903
|
Accum other comprehensive loss, net of tax
|
|
(67,886)
|
|
(39,725)
|
|
(27,825)
|
|
(28,509)
|
|
(43,005)
|
Total shareholders' equity
|
|
1,570,137
|
|
1,571,701
|
|
1,582,535
|
|
1,561,918
|
|
1,537,961
|
Total liabilities and equity
|
|
$ 13,463,439
|
|
$ 13,797,953
|
|
$ 13,884,655
|
|
$ 13,909,138
|
|
$ 13,490,361
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Consolidated Financials
|
|
|
|
|
|
|
|
|
|
TRUSTMARK CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED FINANCIAL INFORMATION
|
March 31, 2018
|
($ in thousands except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
INCOME STATEMENTS
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
Interest and fees on LHFS & LHFI-FTE
|
|
$ 94,712
|
|
$ 95,816
|
|
$ 93,703
|
|
$ 89,486
|
|
$ 83,790
|
Interest and fees on acquired loans
|
|
4,877
|
|
6,401
|
|
6,625
|
|
6,263
|
|
5,189
|
Interest on securities-taxable
|
|
17,506
|
|
18,327
|
|
19,291
|
|
19,377
|
|
19,197
|
Interest on securities-tax exempt-FTE
|
|
824
|
|
1,035
|
|
1,104
|
|
1,178
|
|
1,300
|
Interest on fed funds sold and rev repos
|
|
2
|
|
7
|
|
14
|
|
11
|
|
1
|
Other interest income
|
|
934
|
|
473
|
|
355
|
|
371
|
|
267
|
Total interest income-FTE
|
|
118,855
|
|
122,059
|
|
121,092
|
|
116,686
|
|
109,744
|
Interest on deposits
|
|
9,491
|
|
7,284
|
|
6,381
|
|
5,107
|
|
3,945
|
Interest on fed funds pch and repos
|
|
662
|
|
1,116
|
|
1,301
|
|
1,037
|
|
698
|
Other interest expense
|
|
3,394
|
|
4,555
|
|
4,520
|
|
3,628
|
|
2,673
|
Total interest expense
|
|
13,547
|
|
12,955
|
|
12,202
|
|
9,772
|
|
7,316
|
Net interest income-FTE
|
|
105,308
|
|
109,104
|
|
108,890
|
|
106,914
|
|
102,428
|
Provision for loan losses, LHFI
|
|
3,961
|
|
5,739
|
|
3,672
|
|
2,921
|
|
2,762
|
Provision for loan losses, acquired loans
|
|
150
|
|
(1,573)
|
|
(1,653)
|
|
(2,564)
|
|
(1,605)
|
Net interest income after provision-FTE
|
|
101,197
|
|
104,938
|
|
106,871
|
|
106,557
|
|
101,271
|
Service charges on deposit accounts
|
|
10,857
|
|
11,193
|
|
11,223
|
|
10,755
|
|
10,832
|
Bank card and other fees
|
|
6,626
|
|
7,266
|
|
7,150
|
|
7,370
|
|
6,500
|
Mortgage banking, net
|
|
11,265
|
|
6,284
|
|
4,425
|
|
9,008
|
|
10,185
|
Insurance commissions
|
|
9,419
|
|
8,813
|
|
10,398
|
|
9,745
|
|
9,212
|
Wealth management
|
|
7,567
|
|
7,723
|
|
7,530
|
|
7,674
|
|
7,413
|
Other, net
|
|
1,059
|
|
2,681
|
|
3,740
|
|
5,637
|
|
1,891
|
Nonint inc-excl sec gains (losses), net
|
|
46,793
|
|
43,960
|
|
44,466
|
|
50,189
|
|
46,033
|
Security gains (losses), net
|
|
-
|
|
-
|
|
14
|
|
1
|
|
-
|
Total noninterest income
|
|
46,793
|
|
43,960
|
|
44,480
|
|
50,190
|
|
46,033
|
Salaries and employee benefits
|
|
58,475
|
|
58,820
|
|
57,871
|
|
57,185
|
|
55,389
|
Defined benefit plan termination
|
|
-
|
|
-
|
|
-
|
|
17,644
|
|
-
|
Services and fees
|
|
15,746
|
|
15,419
|
|
15,133
|
|
15,009
|
|
15,332
|
Net occupancy-premises
|
|
6,502
|
|
6,617
|
|
6,702
|
|
6,210
|
|
6,238
|
Equipment expense
|
|
6,099
|
|
5,996
|
|
6,297
|
|
6,162
|
|
5,998
|
Other real estate expense
|
|
866
|
|
666
|
|
864
|
|
383
|
|
1,759
|
FDIC assessment expense
|
|
2,995
|
|
2,868
|
|
2,816
|
|
2,686
|
|
2,640
|
Other expense
|
|
11,782
|
|
12,565
|
|
13,403
|
|
16,796
|
|
14,701
|
Total noninterest expense
|
|
102,465
|
|
102,951
|
|
103,086
|
|
122,075
|
|
102,057
|
Income before income taxes and tax eq adj
|
|
45,525
|
|
45,947
|
|
48,265
|
|
34,672
|
|
45,247
|
Tax equivalent adjustment
|
|
3,215
|
|
5,060
|
|
4,978
|
|
4,910
|
|
4,838
|
Income before income taxes
|
|
42,310
|
|
40,887
|
|
43,287
|
|
29,762
|
|
40,409
|
Income taxes
|
|
5,480
|
|
25,119
|
|
8,708
|
|
5,727
|
|
9,161
|
Net income
|
|
$ 36,830
|
|
$ 15,768
|
|
$ 34,579
|
|
$ 24,035
|
|
$ 31,248
|
|
|
|
|
|
|
|
|
|
|
|
Per share data
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - basic
|
|
$ 0.54
|
|
$ 0.23
|
|
$ 0.51
|
|
$ 0.35
|
|
$ 0.46
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - diluted
|
|
$ 0.54
|
|
$ 0.23
|
|
$ 0.51
|
|
$ 0.35
|
|
$ 0.46
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per share
|
|
$ 0.23
|
|
$ 0.23
|
|
$ 0.23
|
|
$ 0.23
|
|
$ 0.23
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
67,809,234
|
|
67,742,792
|
|
67,741,655
|
|
67,736,298
|
|
67,687,365
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
67,960,583
|
|
67,938,986
|
|
67,916,418
|
|
67,892,532
|
|
67,845,785
|
|
|
|
|
|
|
|
|
|
|
|
Period end shares outstanding
|
|
67,775,068
|
|
67,746,094
|
|
67,742,135
|
|
67,740,901
|
|
67,729,434
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Consolidated Financials
|
|
TRUSTMARK CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED FINANCIAL INFORMATION
|
March 31, 2018
|
($ in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
NONPERFORMING ASSETS (1)
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
Nonaccrual loans
|
|
|
|
|
|
|
|
|
|
|
Alabama
|
|
$ 3,121
|
|
$ 3,083
|
|
$ 1,629
|
|
$ 1,723
|
|
$ 1,649
|
Florida
|
|
2,116
|
|
3,034
|
|
3,242
|
|
3,174
|
|
3,559
|
Mississippi (2)
|
|
48,600
|
|
49,129
|
|
59,483
|
|
63,889
|
|
49,349
|
Tennessee (3)
|
|
5,530
|
|
4,436
|
|
4,589
|
|
4,975
|
|
5,185
|
Texas
|
|
9,329
|
|
7,893
|
|
346
|
|
383
|
|
1,565
|
Total nonaccrual loans
|
|
68,696
|
|
67,575
|
|
69,289
|
|
74,144
|
|
61,307
|
Other real estate
|
|
|
|
|
|
|
|
|
|
|
Alabama
|
|
8,962
|
|
11,714
|
|
12,726
|
|
13,301
|
|
13,953
|
Florida
|
|
12,550
|
|
13,937
|
|
16,100
|
|
17,377
|
|
21,577
|
Mississippi (2)
|
|
15,737
|
|
14,260
|
|
15,319
|
|
14,377
|
|
14,974
|
Tennessee (3)
|
|
1,523
|
|
2,535
|
|
2,671
|
|
3,363
|
|
4,706
|
Texas
|
|
782
|
|
782
|
|
1,540
|
|
1,540
|
|
758
|
Total other real estate
|
|
39,554
|
|
43,228
|
|
48,356
|
|
49,958
|
|
55,968
|
Total nonperforming assets
|
|
$ 108,250
|
|
$ 110,803
|
|
$ 117,645
|
|
$ 124,102
|
|
$ 117,275
|
|
|
|
|
|
|
|
|
|
|
|
LOANS PAST DUE OVER 90 DAYS (1)
|
|
|
|
|
|
|
|
|
|
|
LHFI
|
|
$ 1,419
|
|
$ 2,171
|
|
$ 2,244
|
|
$ 1,216
|
|
$ 1,307
|
|
|
|
|
|
|
|
|
|
|
|
LHFS-Guaranteed GNMA serviced loans
|
|
|
|
|
|
|
|
|
|
|
(no obligation to repurchase)
|
|
$ 34,826
|
|
$ 35,544
|
|
$ 32,332
|
|
$ 29,906
|
|
$ 31,147
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
ALLOWANCE FOR LOAN LOSSES (1)
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
Beginning Balance
|
|
$ 76,733
|
|
$ 80,332
|
|
$ 76,184
|
|
$ 72,445
|
|
$ 71,265
|
Provision for loan losses
|
|
3,961
|
|
5,739
|
|
3,672
|
|
2,921
|
|
2,762
|
Charge-offs
|
|
(2,542)
|
|
(12,075)
|
|
(2,752)
|
|
(2,118)
|
|
(4,202)
|
Recoveries
|
|
3,083
|
|
2,737
|
|
3,228
|
|
2,936
|
|
2,620
|
Net (charge-offs) recoveries
|
|
541
|
|
(9,338)
|
|
476
|
|
818
|
|
(1,582)
|
Ending Balance
|
|
$ 81,235
|
|
$ 76,733
|
|
$ 80,332
|
|
$ 76,184
|
|
$ 72,445
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR LOAN LOSSES (1)
|
|
|
|
|
|
|
|
|
|
|
Alabama
|
|
$ 618
|
|
$ 559
|
|
$ 1,218
|
|
$ 866
|
|
$ 1,189
|
Florida
|
|
(863)
|
|
(1,235)
|
|
(744)
|
|
(975)
|
|
3
|
Mississippi (2)
|
|
2,664
|
|
2,779
|
|
1,860
|
|
2,268
|
|
1,826
|
Tennessee (3)
|
|
(268)
|
|
(439)
|
|
(72)
|
|
322
|
|
208
|
Texas
|
|
1,810
|
|
4,075
|
|
1,410
|
|
440
|
|
(464)
|
Total provision for loan losses
|
|
$ 3,961
|
|
$ 5,739
|
|
$ 3,672
|
|
$ 2,921
|
|
$ 2,762
|
|
|
|
|
|
|
|
|
|
|
|
NET CHARGE-OFFS (RECOVERIES) (1)
|
|
|
|
|
|
|
|
|
|
|
Alabama
|
|
$ 84
|
|
$ 196
|
|
$ 314
|
|
$ (29)
|
|
$ 66
|
Florida
|
|
(960)
|
|
(946)
|
|
(796)
|
|
(973)
|
|
(155)
|
Mississippi (2)
|
|
267
|
|
5,574
|
|
(11)
|
|
33
|
|
1,759
|
Tennessee (3)
|
|
109
|
|
79
|
|
85
|
|
146
|
|
83
|
Texas
|
|
(41)
|
|
4,435
|
|
(68)
|
|
5
|
|
(171)
|
Total net charge-offs (recoveries)
|
|
$ (541)
|
|
$ 9,338
|
|
$ (476)
|
|
$ (818)
|
|
$ 1,582
|
|
|
|
|
|
|
|
|
|
|
|
(1) - Excludes acquired loans.
|
(2) - Mississippi includes Central and Southern Mississippi
Regions.
|
(3) - Tennessee includes Memphis, Tennessee and Northern
Mississippi Regions.
|
|
|
|
|
|
See Notes to Consolidated Financials
|
|
|
TRUSTMARK CORPORATION AND SUBSIDIARIES
|
|
CONSOLIDATED FINANCIAL INFORMATION
|
|
March 31, 2018
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
FINANCIAL RATIOS AND OTHER DATA
|
|
3/31/2018
|
|
12/31/2017
|
|
9/30/2017
|
|
6/30/2017
|
|
3/31/2017
|
Return on equity
|
|
9.50%
|
|
3.96%
|
|
8.69%
|
|
6.21%
|
|
8.27%
|
Return on average tangible equity
|
|
13.05%
|
|
5.60%
|
|
11.95%
|
|
8.68%
|
|
11.39%
|
Return on assets
|
|
1.10%
|
|
0.45%
|
|
0.99%
|
|
0.70%
|
|
0.95%
|
Interest margin - Yield - FTE
|
|
3.91%
|
|
3.90%
|
|
3.86%
|
|
3.81%
|
|
3.74%
|
Interest margin - Cost
|
|
0.45%
|
|
0.41%
|
|
0.39%
|
|
0.32%
|
|
0.25%
|
Net interest margin - FTE
|
|
3.46%
|
|
3.48%
|
|
3.47%
|
|
3.49%
|
|
3.49%
|
Efficiency ratio (1)
|
|
65.50%
|
|
65.21%
|
|
65.14%
|
|
64.50%
|
|
66.67%
|
Full-time equivalent employees
|
|
2,905
|
|
2,893
|
|
2,878
|
|
2,858
|
|
2,799
|
|
|
|
|
|
|
|
|
|
|
|
CREDIT QUALITY RATIOS (2)
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs/average loans
|
|
-0.03%
|
|
0.43%
|
|
-0.02%
|
|
-0.04%
|
|
0.08%
|
Provision for loan losses/average loans
|
|
0.19%
|
|
0.26%
|
|
0.17%
|
|
0.14%
|
|
0.14%
|
Nonperforming loans/total loans (incl LHFS)
|
|
0.79%
|
|
0.77%
|
|
0.80%
|
|
0.87%
|
|
0.75%
|
Nonperforming assets/total loans (incl LHFS)
|
|
1.25%
|
|
1.27%
|
|
1.37%
|
|
1.46%
|
|
1.43%
|
Nonperforming assets/total loans (incl LHFS) +ORE
|
|
1.24%
|
|
1.26%
|
|
1.36%
|
|
1.45%
|
|
1.42%
|
ALL/total loans (excl LHFS)
|
|
0.95%
|
|
0.90%
|
|
0.96%
|
|
0.92%
|
|
0.91%
|
ALL-commercial/total commercial loans
|
|
1.04%
|
|
0.95%
|
|
1.02%
|
|
0.99%
|
|
0.97%
|
ALL-consumer/total consumer and home mortgage loans
|
|
0.64%
|
|
0.68%
|
|
0.73%
|
|
0.67%
|
|
0.67%
|
ALL/nonperforming loans
|
|
118.25%
|
|
113.55%
|
|
115.94%
|
|
102.75%
|
|
118.17%
|
ALL/nonperforming loans (excl specifically reviewed impaired loans)
|
|
314.28%
|
|
320.84%
|
|
301.50%
|
|
277.42%
|
|
263.73%
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL RATIOS
|
|
|
|
|
|
|
|
|
|
|
Total equity/total assets
|
|
11.66%
|
|
11.39%
|
|
11.40%
|
|
11.23%
|
|
11.40%
|
Tangible equity/tangible assets
|
|
9.00%
|
|
8.77%
|
|
8.79%
|
|
8.61%
|
|
8.80%
|
Tangible equity/risk-weighted assets
|
|
11.25%
|
|
11.13%
|
|
11.29%
|
|
11.19%
|
|
11.49%
|
Tier 1 leverage ratio (3)
|
|
9.96%
|
|
9.67%
|
|
9.61%
|
|
9.56%
|
|
9.86%
|
Common equity tier 1 capital ratio (3)
|
|
12.05%
|
|
11.77%
|
|
11.80%
|
|
11.73%
|
|
12.19%
|
Tier 1 risk-based capital ratio (3)
|
|
12.62%
|
|
12.33%
|
|
12.37%
|
|
12.30%
|
|
12.79%
|
Total risk-based capital ratio (3)
|
|
13.44%
|
|
13.10%
|
|
13.19%
|
|
13.11%
|
|
13.61%
|
|
|
|
|
|
|
|
|
|
|
|
STOCK PERFORMANCE
|
|
|
|
|
|
|
|
|
|
|
Market value-Close
|
|
$ 31.16
|
|
$ 31.86
|
|
$ 33.12
|
|
$ 32.16
|
|
$ 31.79
|
Book value
|
|
$ 23.17
|
|
$ 23.20
|
|
$ 23.36
|
|
$ 23.06
|
|
$ 22.71
|
Tangible book value
|
|
$ 17.34
|
|
$ 17.35
|
|
$ 17.49
|
|
$ 17.17
|
|
$ 17.02
|
|
|
|
|
|
|
|
|
|
|
|
(1) -
|
The efficiency ratio is noninterest expense to total net
interest income (FTE) and noninterest income, excluding security
gains (losses), amortization of partnership tax credits,
amortization of purchased intangibles, and significant non-routine
income and expense items.
|
(2) -
|
Excludes acquired loans.
|
(3) -
|
The regulatory capital ratios for December 31, 2017 contain a
reclassification adjustment of $8.5 million from AOCI to retained
earnings as allowed by regulatory agencies in an interagency
statement released January 18, 2018 to address disproportionate
tax effect in AOCI resulting from the recent enactment of the Tax
Cuts and Jobs Act of 2017 and the application of Financial
Accounting Standards Board Accounting Standards Codification Topic
740, Income Taxes.
|
|
See Notes to Consolidated Financials
|
|
|
|
|
|
TRUSTMARK CORPORATION AND SUBSIDIARIES
|
|
NOTES TO CONSOLIDATED FINANCIALS
|
|
March 31, 2018
|
|
($ in thousands)
|
|
(unaudited)
|
Note 1 - Business Combinations
On April 7, 2017, Trustmark Corporation completed its merger with RB
Bancorporation (Reliance), the holding company for Reliance Bank, which
had seven offices serving the Huntsville, Alabama metropolitan service
area (MSA). Reliance Bank was merged into Trustmark National Bank
simultaneously with the merger of Trustmark and RB Bancorporation. Under
the terms of the Merger Agreement dated November 14, 2016, Trustmark
paid $22.00 in cash for each share of Reliance common stock outstanding,
which represented total consideration for Reliance common shareholders
of approximately $23.7 million. In addition, Trustmark paid off Reliance
Preferred Stock of $1.1 million bringing the total consideration paid to
$24.8 million.
This merger was accounted for in accordance with Financial Accounting
Standards Board (FASB) Accounting Standards Codification (ASC) Topic
805, "Business Combinations." Accordingly, the assets and liabilities,
both tangible and intangible, were recorded at their estimated fair
values as of the merger date. The fair values of the assets acquired and
liabilities assumed are subject to adjustment if additional information
relative to the closing date fair values becomes available through the
measurement period, which is not to exceed one year from the merger date
of April 7, 2017.
The excess of the consideration paid over the estimated fair value of
the net assets acquired was $13.5 million, which was recorded as
goodwill under FASB ASC Topic 805. The identifiable intangible assets
acquired represent the core deposit intangible at fair value at the
merger date. The core deposit intangible is being amortized on an
accelerated basis over the estimated useful life, currently expected to
be approximately ten years.
Loans acquired from Reliance were evaluated under a fair value process.
Loans with evidence of deterioration in credit quality and for which it
was probable at acquisition that Trustmark would not be able to collect
all contractually required payments are referred to as acquired impaired
loans and accounted for in accordance with FASB ASC Topic 310-30, "Loans
and Debt Securities Acquired with Deteriorated Credit Quality."
The operations of Reliance are included in Trustmark's operating results
from April 7, 2017 and did not have a material impact on Trustmark's
results of operations. During the second quarter of 2017, Trustmark
included non-routine merger transaction expenses in other noninterest
expense totaling $3.2 million (change in control expense of $1.3
million; professional fees, contract termination and other expenses of
$1.9 million).
Note 2 - Securities Available for Sale and Held to Maturity
The following table is a summary of the estimated fair value of
securities available for sale and the amortized cost of securities held
to maturity ($ in thousands):
|
|
3/31/2018
|
|
|
12/31/2017
|
|
|
9/30/2017
|
|
|
6/30/2017
|
|
|
3/31/2017
|
SECURITIES AVAILABLE FOR SALE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government agency obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued by U.S. Government agencies
|
|
$
|
40,118
|
|
|
$
|
45,018
|
|
|
$
|
49,723
|
|
|
$
|
51,277
|
|
|
$
|
53,247
|
Issued by U.S. Government sponsored agencies
|
|
|
263
|
|
|
|
267
|
|
|
|
271
|
|
|
|
272
|
|
|
|
274
|
Obligations of states and political subdivisions
|
|
|
75,013
|
|
|
|
79,229
|
|
|
|
89,144
|
|
|
|
96,514
|
|
|
|
109,895
|
Mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage pass-through securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guaranteed by GNMA
|
|
|
62,457
|
|
|
|
65,746
|
|
|
|
60,902
|
|
|
|
58,422
|
|
|
|
42,667
|
Issued by FNMA and FHLMC
|
|
|
767,676
|
|
|
|
814,450
|
|
|
|
860,131
|
|
|
|
860,571
|
|
|
|
733,214
|
Other residential mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued or guaranteed by FNMA, FHLMC, or GNMA
|
|
|
954,537
|
|
|
|
1,016,790
|
|
|
|
1,087,169
|
|
|
|
1,157,241
|
|
|
|
1,202,719
|
Commercial mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued or guaranteed by FNMA, FHLMC, or GNMA
|
|
|
197,433
|
|
|
|
217,135
|
|
|
|
221,749
|
|
|
|
223,391
|
|
|
|
223,538
|
Total securities available for sale
|
|
$
|
2,097,497
|
|
|
$
|
2,238,635
|
|
|
$
|
2,369,089
|
|
|
$
|
2,447,688
|
|
|
$
|
2,365,554
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SECURITIES HELD TO MATURITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government agency obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued by U.S. Government sponsored agencies
|
|
$
|
3,703
|
|
|
$
|
3,692
|
|
|
$
|
3,680
|
|
|
$
|
3,669
|
|
|
$
|
3,658
|
Obligations of states and political subdivisions
|
|
|
46,011
|
|
|
|
46,039
|
|
|
|
46,069
|
|
|
|
46,098
|
|
|
|
46,273
|
Mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage pass-through securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guaranteed by GNMA
|
|
|
12,974
|
|
|
|
13,539
|
|
|
|
14,191
|
|
|
|
14,399
|
|
|
|
14,977
|
Issued by FNMA and FHLMC
|
|
|
128,517
|
|
|
|
133,975
|
|
|
|
139,172
|
|
|
|
144,282
|
|
|
|
118,733
|
Other residential mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued or guaranteed by FNMA, FHLMC, or GNMA
|
|
|
653,325
|
|
|
|
678,926
|
|
|
|
708,715
|
|
|
|
740,042
|
|
|
|
771,296
|
Commercial mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued or guaranteed by FNMA, FHLMC, or GNMA
|
|
|
179,445
|
|
|
|
180,315
|
|
|
|
190,456
|
|
|
|
191,264
|
|
|
|
201,130
|
Total securities held to maturity
|
|
$
|
1,023,975
|
|
|
$
|
1,056,486
|
|
|
$
|
1,102,283
|
|
|
$
|
1,139,754
|
|
|
$
|
1,156,067
|
|
|
|
TRUSTMARK CORPORATION AND SUBSIDIARIES
|
|
NOTES TO CONSOLIDATED FINANCIALS
|
|
March 31, 2018
|
|
($ in thousands)
|
|
(unaudited)
|
Note 2 - Securities Available for Sale and Held to Maturity
(continued)
At March 31, 2018, 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 $18.5 million ($13.9 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 96% 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.
Note 3 - Loan Composition
LHFI BY TYPE (excluding acquired loans)
|
|
3/31/2018
|
|
|
12/31/2017
|
|
|
9/30/2017
|
|
|
6/30/2017
|
|
|
3/31/2017
|
|
Loans secured by real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction, land development and other land loans
|
|
$
|
986,188
|
|
|
$
|
987,624
|
|
|
$
|
950,144
|
|
|
$
|
922,029
|
|
|
$
|
859,927
|
|
Secured by 1-4 family residential properties
|
|
|
1,698,885
|
|
|
|
1,675,311
|
|
|
|
1,648,733
|
|
|
|
1,655,968
|
|
|
|
1,656,837
|
|
Secured by nonfarm, nonresidential properties
|
|
|
2,257,899
|
|
|
|
2,193,823
|
|
|
|
2,172,885
|
|
|
|
2,109,367
|
|
|
|
2,064,352
|
|
Other real estate secured
|
|
|
425,664
|
|
|
|
517,956
|
|
|
|
482,163
|
|
|
|
432,208
|
|
|
|
399,636
|
|
Commercial and industrial loans
|
|
|
1,561,967
|
|
|
|
1,570,345
|
|
|
|
1,568,588
|
|
|
|
1,635,000
|
|
|
|
1,540,783
|
|
Consumer loans
|
|
|
168,469
|
|
|
|
171,918
|
|
|
|
173,061
|
|
|
|
170,858
|
|
|
|
166,314
|
|
State and other political subdivision loans
|
|
|
936,014
|
|
|
|
952,483
|
|
|
|
936,614
|
|
|
|
936,860
|
|
|
|
910,493
|
|
Other loans
|
|
|
478,899
|
|
|
|
500,507
|
|
|
|
475,153
|
|
|
|
433,755
|
|
|
|
406,315
|
|
LHFI
|
|
|
8,513,985
|
|
|
|
8,569,967
|
|
|
|
8,407,341
|
|
|
|
8,296,045
|
|
|
|
8,004,657
|
|
Allowance for loan losses
|
|
|
(81,235
|
)
|
|
|
(76,733
|
)
|
|
|
(80,332
|
)
|
|
|
(76,184
|
)
|
|
|
(72,445
|
)
|
Net LHFI
|
|
$
|
8,432,750
|
|
|
$
|
8,493,234
|
|
|
$
|
8,327,009
|
|
|
$
|
8,219,861
|
|
|
$
|
7,932,212
|
|
ACQUIRED LOANS BY TYPE
|
|
3/31/2018
|
|
|
12/31/2017
|
|
|
9/30/2017
|
|
|
6/30/2017
|
|
|
3/31/2017
|
|
Loans secured by real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction, land development and other land loans
|
|
$
|
17,575
|
|
|
$
|
23,586
|
|
|
$
|
29,384
|
|
|
$
|
35,054
|
|
|
$
|
17,651
|
|
Secured by 1-4 family residential properties
|
|
|
49,289
|
|
|
|
61,751
|
|
|
|
65,746
|
|
|
|
74,313
|
|
|
|
54,721
|
|
Secured by nonfarm, nonresidential properties
|
|
|
100,285
|
|
|
|
114,694
|
|
|
|
122,200
|
|
|
|
132,663
|
|
|
|
92,075
|
|
Other real estate secured
|
|
|
14,581
|
|
|
|
16,746
|
|
|
|
18,431
|
|
|
|
19,553
|
|
|
|
16,275
|
|
Commercial and industrial loans
|
|
|
21,808
|
|
|
|
31,506
|
|
|
|
34,124
|
|
|
|
34,375
|
|
|
|
20,691
|
|
Consumer loans
|
|
|
1,920
|
|
|
|
2,600
|
|
|
|
2,749
|
|
|
|
2,833
|
|
|
|
2,664
|
|
Other loans
|
|
|
10,018
|
|
|
|
10,634
|
|
|
|
11,123
|
|
|
|
16,119
|
|
|
|
14,165
|
|
Acquired loans
|
|
|
215,476
|
|
|
|
261,517
|
|
|
|
283,757
|
|
|
|
314,910
|
|
|
|
218,242
|
|
Allowance for loan losses, acquired loans
|
|
|
(4,294
|
)
|
|
|
(4,079
|
)
|
|
|
(5,768
|
)
|
|
|
(7,423
|
)
|
|
|
(10,006
|
)
|
Net acquired loans
|
|
$
|
211,182
|
|
|
$
|
257,438
|
|
|
$
|
277,989
|
|
|
$
|
307,487
|
|
|
$
|
208,236
|
|
|
|
|
TRUSTMARK CORPORATION AND SUBSIDIARIES
|
|
NOTES TO CONSOLIDATED FINANCIALS
|
|
March 31, 2018
|
|
($ in thousands)
|
|
(unaudited)
|
Note 3 - Loan Composition (continued)
|
|
March 31, 2018
|
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
|
|
$
|
986,188
|
|
|
$
|
350,661
|
|
|
$
|
60,705
|
|
|
$
|
281,582
|
|
|
$
|
20,428
|
|
|
$
|
272,812
|
Secured by 1-4 family residential properties
|
|
|
1,698,885
|
|
|
|
111,756
|
|
|
|
49,456
|
|
|
|
1,430,525
|
|
|
|
90,317
|
|
|
|
16,831
|
Secured by nonfarm, nonresidential properties
|
|
|
2,257,899
|
|
|
|
417,309
|
|
|
|
228,019
|
|
|
|
935,116
|
|
|
|
142,576
|
|
|
|
534,879
|
Other real estate secured
|
|
|
425,664
|
|
|
|
76,262
|
|
|
|
2,471
|
|
|
|
211,356
|
|
|
|
11,930
|
|
|
|
123,645
|
Commercial and industrial loans
|
|
|
1,561,967
|
|
|
|
221,467
|
|
|
|
22,148
|
|
|
|
788,547
|
|
|
|
346,888
|
|
|
|
182,917
|
Consumer loans
|
|
|
168,469
|
|
|
|
21,845
|
|
|
|
4,676
|
|
|
|
122,027
|
|
|
|
17,638
|
|
|
|
2,283
|
State and other political subdivision loans
|
|
|
936,014
|
|
|
|
82,261
|
|
|
|
28,185
|
|
|
|
602,043
|
|
|
|
24,613
|
|
|
|
198,912
|
Other loans
|
|
|
478,899
|
|
|
|
67,408
|
|
|
|
17,013
|
|
|
|
307,852
|
|
|
|
47,868
|
|
|
|
38,758
|
Loans
|
|
$
|
8,513,985
|
|
|
$
|
1,348,969
|
|
|
$
|
412,673
|
|
|
$
|
4,679,048
|
|
|
$
|
702,258
|
|
|
$
|
1,371,037
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSTRUCTION, LAND DEVELOPMENT AND
OTHER LAND LOANS BY REGION (1)
|
|
|
|
|
|
|
|
|
Lots
|
|
$
|
56,150
|
|
|
$
|
14,303
|
|
|
$
|
14,456
|
|
|
$
|
22,368
|
|
|
$
|
1,586
|
|
|
$
|
3,437
|
Development
|
|
|
51,113
|
|
|
|
5,277
|
|
|
|
7,298
|
|
|
|
23,352
|
|
|
|
406
|
|
|
|
14,780
|
Unimproved land
|
|
|
91,838
|
|
|
|
13,048
|
|
|
|
14,505
|
|
|
|
31,874
|
|
|
|
13,891
|
|
|
|
18,520
|
1-4 family construction
|
|
|
198,651
|
|
|
|
65,877
|
|
|
|
11,816
|
|
|
|
85,337
|
|
|
|
1,806
|
|
|
|
33,815
|
Other construction
|
|
|
588,436
|
|
|
|
252,156
|
|
|
|
12,630
|
|
|
|
118,651
|
|
|
|
2,739
|
|
|
|
202,260
|
Construction, land development and other land loans
|
|
$
|
986,188
|
|
|
$
|
350,661
|
|
|
$
|
60,705
|
|
|
$
|
281,582
|
|
|
$
|
20,428
|
|
|
$
|
272,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOANS SECURED BY NONFARM,
NONRESIDENTIAL PROPERTIES BY REGION (1)
|
|
|
|
|
|
|
|
|
Income producing:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
|
|
$
|
321,962
|
|
|
$
|
90,321
|
|
|
$
|
52,846
|
|
|
$
|
105,837
|
|
|
$
|
17,914
|
|
|
$
|
55,044
|
Office
|
|
|
217,886
|
|
|
|
60,820
|
|
|
|
20,915
|
|
|
|
70,956
|
|
|
|
5,626
|
|
|
|
59,569
|
Nursing homes/senior living
|
|
|
185,545
|
|
|
|
20,643
|
|
|
|
-
|
|
|
|
158,572
|
|
|
|
6,330
|
|
|
|
-
|
Hotel/motel
|
|
|
279,788
|
|
|
|
56,295
|
|
|
|
60,164
|
|
|
|
55,766
|
|
|
|
34,698
|
|
|
|
72,865
|
Mini-storage
|
|
|
133,013
|
|
|
|
14,249
|
|
|
|
6,238
|
|
|
|
43,575
|
|
|
|
552
|
|
|
|
68,399
|
Industrial
|
|
|
87,509
|
|
|
|
11,396
|
|
|
|
9,295
|
|
|
|
15,795
|
|
|
|
3,476
|
|
|
|
47,547
|
Health care
|
|
|
34,264
|
|
|
|
10,471
|
|
|
|
771
|
|
|
|
20,154
|
|
|
|
-
|
|
|
|
2,868
|
Convenience stores
|
|
|
30,576
|
|
|
|
2,847
|
|
|
|
-
|
|
|
|
17,367
|
|
|
|
831
|
|
|
|
9,531
|
Other
|
|
|
91,338
|
|
|
|
13,520
|
|
|
|
14,572
|
|
|
|
16,620
|
|
|
|
7,627
|
|
|
|
38,999
|
Total income producing loans
|
|
|
1,381,881
|
|
|
|
280,562
|
|
|
|
164,801
|
|
|
|
504,642
|
|
|
|
77,054
|
|
|
|
354,822
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owner-occupied:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Office
|
|
|
160,852
|
|
|
|
27,109
|
|
|
|
20,512
|
|
|
|
70,398
|
|
|
|
5,124
|
|
|
|
37,709
|
Churches
|
|
|
95,883
|
|
|
|
17,277
|
|
|
|
6,508
|
|
|
|
49,319
|
|
|
|
17,592
|
|
|
|
5,187
|
Industrial warehouses
|
|
|
141,520
|
|
|
|
10,264
|
|
|
|
2,974
|
|
|
|
56,096
|
|
|
|
14,734
|
|
|
|
57,452
|
Health care
|
|
|
114,396
|
|
|
|
24,202
|
|
|
|
5,838
|
|
|
|
67,202
|
|
|
|
2,999
|
|
|
|
14,155
|
Convenience stores
|
|
|
101,933
|
|
|
|
12,762
|
|
|
|
12,431
|
|
|
|
51,667
|
|
|
|
1,275
|
|
|
|
23,798
|
Retail
|
|
|
50,748
|
|
|
|
15,248
|
|
|
|
6,596
|
|
|
|
20,258
|
|
|
|
1,836
|
|
|
|
6,810
|
Restaurants
|
|
|
32,272
|
|
|
|
2,817
|
|
|
|
666
|
|
|
|
24,977
|
|
|
|
1,897
|
|
|
|
1,915
|
Auto dealerships
|
|
|
31,372
|
|
|
|
8,754
|
|
|
|
155
|
|
|
|
12,964
|
|
|
|
9,499
|
|
|
|
-
|
Other
|
|
|
147,042
|
|
|
|
18,314
|
|
|
|
7,538
|
|
|
|
77,593
|
|
|
|
10,566
|
|
|
|
33,031
|
Total owner-occupied loans
|
|
|
876,018
|
|
|
|
136,747
|
|
|
|
63,218
|
|
|
|
430,474
|
|
|
|
65,522
|
|
|
|
180,057
|
Loans secured by nonfarm, nonresidential properties
|
|
$
|
2,257,899
|
|
|
$
|
417,309
|
|
|
$
|
228,019
|
|
|
$
|
935,116
|
|
|
$
|
142,576
|
|
|
$
|
534,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes acquired loans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRUSTMARK CORPORATION AND SUBSIDIARIES
|
|
NOTES TO CONSOLIDATED FINANCIALS
|
|
March 31, 2018
|
|
($ 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
|
|
|
|
3/31/2018
|
|
|
12/31/2017
|
|
|
9/30/2017
|
|
|
6/30/2017
|
|
|
3/31/2017
|
|
Securities - taxable
|
|
|
2.26
|
%
|
|
|
2.21
|
%
|
|
|
2.23
|
%
|
|
|
2.26
|
%
|
|
|
2.31
|
%
|
Securities - nontaxable
|
|
|
3.68
|
%
|
|
|
4.35
|
%
|
|
|
4.34
|
%
|
|
|
4.35
|
%
|
|
|
4.34
|
%
|
Securities - total
|
|
|
2.30
|
%
|
|
|
2.27
|
%
|
|
|
2.29
|
%
|
|
|
2.32
|
%
|
|
|
2.38
|
%
|
Loans - LHFI & LHFS
|
|
|
4.45
|
%
|
|
|
4.38
|
%
|
|
|
4.36
|
%
|
|
|
4.30
|
%
|
|
|
4.21
|
%
|
Acquired loans
|
|
|
8.13
|
%
|
|
|
9.27
|
%
|
|
|
8.78
|
%
|
|
|
7.96
|
%
|
|
|
8.40
|
%
|
Loans - total
|
|
|
4.55
|
%
|
|
|
4.53
|
%
|
|
|
4.51
|
%
|
|
|
4.43
|
%
|
|
|
4.33
|
%
|
FF sold & rev repo
|
|
|
1.70
|
%
|
|
|
1.61
|
%
|
|
|
1.55
|
%
|
|
|
1.39
|
%
|
|
|
1.02
|
%
|
Other earning assets
|
|
|
1.77
|
%
|
|
|
2.34
|
%
|
|
|
1.67
|
%
|
|
|
1.91
|
%
|
|
|
1.36
|
%
|
Total earning assets
|
|
|
3.91
|
%
|
|
|
3.90
|
%
|
|
|
3.86
|
%
|
|
|
3.81
|
%
|
|
|
3.74
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits
|
|
|
0.49
|
%
|
|
|
0.40
|
%
|
|
|
0.35
|
%
|
|
|
0.29
|
%
|
|
|
0.23
|
%
|
FF pch & repo
|
|
|
0.97
|
%
|
|
|
0.93
|
%
|
|
|
0.94
|
%
|
|
|
0.79
|
%
|
|
|
0.57
|
%
|
Other borrowings
|
|
|
1.69
|
%
|
|
|
1.35
|
%
|
|
|
1.28
|
%
|
|
|
1.16
|
%
|
|
|
0.90
|
%
|
Total interest-bearing liabilities
|
|
|
0.61
|
%
|
|
|
0.56
|
%
|
|
|
0.53
|
%
|
|
|
0.44
|
%
|
|
|
0.34
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin
|
|
|
3.46
|
%
|
|
|
3.48
|
%
|
|
|
3.47
|
%
|
|
|
3.49
|
%
|
|
|
3.49
|
%
|
Net interest margin excluding acquired loans
|
|
|
3.37
|
%
|
|
|
3.35
|
%
|
|
|
3.34
|
%
|
|
|
3.37
|
%
|
|
|
3.38
|
%
|
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 2018, the yield on acquired loans totaled
8.13% and included $594 thousand in recoveries from the settlement of
debt, which represented approximately 0.99% of the annualized total
acquired loan yield. The net interest margin was negatively impacted by
approximately 6 basis points linked quarter and year-over-year due to
the enactment of the 2017 Tax Cuts and Jobs Act (Tax Reform Act) which
reduced the fully tax equivalent adjustment as a result of the lower
corporate tax rate. This compression year-over-year is principally
offset by the runoff of maturing investment securities, while linked
quarter is offset by the runoff of maturing investment securities and
quarterly day count.
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 following table illustrates the components of mortgage banking
revenues included in noninterest income in the accompanying income
statements:
|
|
Quarter Ended
|
|
|
|
3/31/2018
|
|
|
12/31/2017
|
|
|
9/30/2017
|
|
|
6/30/2017
|
|
|
3/31/2017
|
|
Mortgage servicing income, net
|
|
$
|
5,588
|
|
|
$
|
5,471
|
|
|
$
|
5,295
|
|
|
$
|
5,439
|
|
|
$
|
5,458
|
|
Change in fair value-MSR from runoff
|
|
|
(2,507
|
)
|
|
|
(2,605
|
)
|
|
|
(2,892
|
)
|
|
|
(2,896
|
)
|
|
|
(2,387
|
)
|
Gain on sales of loans, net
|
|
|
4,585
|
|
|
|
5,300
|
|
|
|
5,083
|
|
|
|
5,001
|
|
|
|
3,550
|
|
Other, net
|
|
|
295
|
|
|
|
(1,120
|
)
|
|
|
(450
|
)
|
|
|
629
|
|
|
|
772
|
|
Mortgage banking income before hedge ineffectiveness
|
|
|
7,961
|
|
|
|
7,046
|
|
|
|
7,036
|
|
|
|
8,173
|
|
|
|
7,393
|
|
Change in fair value-MSR from market changes
|
|
|
9,521
|
|
|
|
1,168
|
|
|
|
(2,393
|
)
|
|
|
(1,291
|
)
|
|
|
1,466
|
|
Change in fair value of derivatives
|
|
|
(6,217
|
)
|
|
|
(1,930
|
)
|
|
|
(218
|
)
|
|
|
2,126
|
|
|
|
1,326
|
|
Net positive (negative) hedge ineffectiveness
|
|
|
3,304
|
|
|
|
(762
|
)
|
|
|
(2,611
|
)
|
|
|
835
|
|
|
|
2,792
|
|
Mortgage banking, net
|
|
$
|
11,265
|
|
|
$
|
6,284
|
|
|
$
|
4,425
|
|
|
$
|
9,008
|
|
|
$
|
10,185
|
|
|
|
|
TRUSTMARK CORPORATION AND SUBSIDIARIES
|
|
NOTES TO CONSOLIDATED FINANCIALS
|
|
March 31, 2018
|
|
($ in thousands)
|
|
(unaudited)
|
Note 6 - Salaries and Employee Benefit Plans
Defined Benefit Pension Plan
Prior to 2017, Trustmark maintained a noncontributory tax-qualified
defined benefit pension plan (Trustmark Capital Accumulation Plan, the
"Plan"), in which substantially all associates who began employment
prior to 2007 participated. As previously reported, on July 26, 2016,
the Board of Directors of Trustmark authorized the termination of the
Plan, effective as of December 31, 2016. To satisfy commitments made by
Trustmark to associates (collectively, the "Continuing Associates")
covered through acquired plans that were merged into the Plan, the Board
also approved the spin-off of the portion of the Plan associated with
the accrued benefits of the Continuing Associates into a new plan titled
the Trustmark Corporation Pension Plan for Certain Employees of Acquired
Financial Institutions (the "Spin-Off Plan"), effective as of December
31, 2016, immediately prior to the termination of the Plan. In order to
terminate the Plan, in accordance with Internal Revenue Service and
Pension Benefit Guaranty Corporation requirements, Trustmark was
required to fully fund the Plan on a termination basis and contributed
the additional assets necessary to do so. The final distributions were
made from current plan assets and a one-time pension settlement expense
of $17.6 million was recognized when paid by Trustmark during the second
quarter of 2017.
Note 7 - Other Noninterest Income and Expense
Other noninterest income consisted of the following for the periods
presented ($ in thousands):
|
|
Quarter Ended
|
|
|
|
3/31/2018
|
|
|
12/31/2017
|
|
|
9/30/2017
|
|
|
6/30/2017
|
|
|
3/31/2017
|
|
Partnership amortization for tax credit purposes
|
|
$
|
(2,202
|
)
|
|
$
|
(2,478
|
)
|
|
$
|
(2,521
|
)
|
|
$
|
(2,287
|
)
|
|
$
|
(2,274
|
)
|
Increase in life insurance cash surrender value
|
|
|
1,738
|
|
|
|
1,816
|
|
|
|
1,813
|
|
|
|
1,782
|
|
|
|
1,714
|
|
Other miscellaneous income
|
|
|
1,523
|
|
|
|
3,343
|
|
|
|
4,448
|
|
|
|
6,142
|
|
|
|
2,451
|
|
Total other, net
|
|
$
|
1,059
|
|
|
$
|
2,681
|
|
|
$
|
3,740
|
|
|
$
|
5,637
|
|
|
$
|
1,891
|
|
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 received no nontaxable proceeds related to bank-owned life
insurance during the first quarter of 2018 compared to nontaxable
proceeds of $1.7 million and $2.7 million during the fourth and third
quarters of 2017, respectively, and $4.9 million related to life
insurance acquired as part of a previous acquisition during the second
quarter of 2017, which were recorded in other miscellaneous income in
the table above.
Other noninterest expense consisted of the following for the periods
presented ($ in thousands):
|
|
Quarter Ended
|
|
|
3/31/2018
|
|
|
12/31/2017
|
|
|
9/30/2017
|
|
|
6/30/2017
|
|
|
3/31/2017
|
Loan expense
|
|
$
|
2,791
|
|
|
$
|
2,276
|
|
|
$
|
3,013
|
|
|
$
|
2,827
|
|
|
$
|
2,792
|
Amortization of intangibles
|
|
|
1,397
|
|
|
|
1,522
|
|
|
|
1,539
|
|
|
|
1,544
|
|
|
|
1,564
|
Defined benefit plans non-service cost reclass from
salaries and employee benefits
|
|
885
|
|
|
|
968
|
|
|
|
966
|
|
|
|
1,875
|
|
|
|
1,913
|
Other miscellaneous expense
|
|
|
6,709
|
|
|
|
7,799
|
|
|
|
7,885
|
|
|
|
10,550
|
|
|
|
8,432
|
Total other expense
|
|
$
|
11,782
|
|
|
$
|
12,565
|
|
|
$
|
13,403
|
|
|
$
|
16,796
|
|
|
$
|
14,701
|
Trustmark adopted ASU 2017-07, "Compensation-Retirement Benefits (Topic
715)-Improving the Presentation of Net Periodic Pension Cost and Net
Periodic Postretirement Benefit Cost" effective January 1, 2018 and was
required to reclassify the defined benefit plans non-service cost from
salaries and employee benefits to other expense on the consolidated
statements of income for each period presented.
As previously discussed in Note 1 - Business Combinations, non-routine
Reliance merger transaction expenses totaled $3.2 million and were
included in other miscellaneous expense during the second quarter of
2017.
|
|
|
TRUSTMARK CORPORATION AND SUBSIDIARIES
|
|
NOTES TO CONSOLIDATED FINANCIALS
|
|
March 31, 2018
|
|
($ in thousands)
|
|
(unaudited)
|
Note 8 - Income Taxes
The income tax provision consisted of the following for the periods
presented ($ in thousands):
|
|
Quarter Ended
|
|
|
3/31/2018
|
|
|
12/31/2017
|
|
|
9/30/2017
|
|
|
6/30/2017
|
|
|
3/31/2017
|
Current
|
|
$
|
2,180
|
|
|
$
|
3,850
|
|
|
$
|
8,108
|
|
|
$
|
5,427
|
|
|
$
|
5,261
|
Deferred
|
|
|
3,300
|
|
|
|
4,300
|
|
|
|
600
|
|
|
|
300
|
|
|
|
3,900
|
Elimination of deferred tax valuation allowance
|
|
|
-
|
|
|
|
(8,650
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
Income tax provision before re-measurement
|
|
|
5,480
|
|
|
|
(500
|
)
|
|
|
8,708
|
|
|
|
5,727
|
|
|
|
9,161
|
Re-measurement of net deferred tax assets
|
|
|
-
|
|
|
|
25,619
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
Income tax provision
|
|
$
|
5,480
|
|
|
$
|
25,119
|
|
|
$
|
8,708
|
|
|
$
|
5,727
|
|
|
$
|
9,161
|
During 2013, a deferred tax valuation allowance was created as a result
of Trustmark's merger with BancTrust Financial Group, Inc. and was
established to reduce deferred tax assets to the amount that was more
likely than not to be realized in future years. Trustmark has
continually evaluated this allowance since inception and, based on the
weight of the available evidence, has determined that the deferred tax
assets will not be subject to the limitations on the deductibility of
built-in losses (Internal Revenue Service Code, Section 382) in future
years. Therefore, during the fourth quarter of 2017, the valuation
allowance was eliminated creating a decrease in deferred income tax
expense of $8.7 million.
Following the recent enactment of the Tax Reform Act which resulted in
the reduction of the corporate federal income tax rate, Trustmark
re-measured its net deferred tax assets and recorded an increase in
deferred income tax expense of $25.6 million during the fourth quarter
of 2017.
Note 9 - 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, 2018
|
|
($ in thousands except per share data)
|
|
(unaudited)
|
Note 9 - Non-GAAP Financial Measures (continued)
|
|
|
|
Quarter Ended
|
|
|
|
|
|
3/31/2018
|
|
|
12/31/2017
|
|
|
9/30/2017
|
|
|
6/30/2017
|
|
|
3/31/2017
|
|
TANGIBLE EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE BALANCES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity
|
|
|
|
$
|
1,572,514
|
|
|
$
|
1,579,633
|
|
|
$
|
1,577,867
|
|
|
$
|
1,552,240
|
|
|
$
|
1,533,098
|
|
Less: Goodwill
|
|
|
|
|
(379,627
|
)
|
|
|
(379,627
|
)
|
|
|
(379,627
|
)
|
|
|
(378,191
|
)
|
|
|
(366,156
|
)
|
Identifiable intangible assets
|
|
|
|
|
(15,782
|
)
|
|
|
(17,196
|
)
|
|
|
(18,714
|
)
|
|
|
(19,713
|
)
|
|
|
(19,950
|
)
|
Total average tangible equity
|
|
|
|
$
|
1,177,105
|
|
|
$
|
1,182,810
|
|
|
$
|
1,179,526
|
|
|
$
|
1,154,336
|
|
|
$
|
1,146,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERIOD END BALANCES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity
|
|
|
|
$
|
1,570,137
|
|
|
$
|
1,571,701
|
|
|
$
|
1,582,535
|
|
|
$
|
1,561,918
|
|
|
$
|
1,537,961
|
|
Less: Goodwill
|
|
|
|
|
(379,627
|
)
|
|
|
(379,627
|
)
|
|
|
(379,627
|
)
|
|
|
(379,627
|
)
|
|
|
(366,156
|
)
|
Identifiable intangible assets
|
|
|
|
|
(14,963
|
)
|
|
|
(16,360
|
)
|
|
|
(17,883
|
)
|
|
|
(19,422
|
)
|
|
|
(19,117
|
)
|
Total tangible equity
|
|
(a)
|
|
$
|
1,175,547
|
|
|
$
|
1,175,714
|
|
|
$
|
1,185,025
|
|
|
$
|
1,162,869
|
|
|
$
|
1,152,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TANGIBLE ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
$
|
13,463,439
|
|
|
$
|
13,797,953
|
|
|
$
|
13,884,655
|
|
|
$
|
13,909,138
|
|
|
$
|
13,490,361
|
|
Less: Goodwill
|
|
|
|
|
(379,627
|
)
|
|
|
(379,627
|
)
|
|
|
(379,627
|
)
|
|
|
(379,627
|
)
|
|
|
(366,156
|
)
|
Identifiable intangible assets
|
|
|
|
|
(14,963
|
)
|
|
|
(16,360
|
)
|
|
|
(17,883
|
)
|
|
|
(19,422
|
)
|
|
|
(19,117
|
)
|
Total tangible assets
|
|
(b)
|
|
$
|
13,068,849
|
|
|
$
|
13,401,966
|
|
|
$
|
13,487,145
|
|
|
$
|
13,510,089
|
|
|
$
|
13,105,088
|
|
Risk-weighted assets
|
|
(c)
|
|
$
|
10,449,352
|
|
|
$
|
10,566,818
|
|
|
$
|
10,498,582
|
|
|
$
|
10,391,912
|
|
|
$
|
10,031,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME ADJUSTED FOR INTANGIBLE
AMORTIZATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
36,830
|
|
|
$
|
15,768
|
|
|
$
|
34,579
|
|
|
$
|
24,035
|
|
|
$
|
31,248
|
|
Plus: Intangible amortization net of tax
|
|
|
|
|
1,049
|
|
|
|
940
|
|
|
|
950
|
|
|
|
954
|
|
|
|
966
|
|
Net income adjusted for intangible amortization
|
|
|
|
$
|
37,879
|
|
|
$
|
16,708
|
|
|
$
|
35,529
|
|
|
$
|
24,989
|
|
|
$
|
32,214
|
|
Period end common shares outstanding
|
|
(d)
|
|
|
67,775,068
|
|
|
|
67,746,094
|
|
|
|
67,742,135
|
|
|
|
67,740,901
|
|
|
|
67,729,434
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TANGIBLE COMMON EQUITY MEASUREMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average tangible equity (1)
|
|
|
|
|
13.05
|
%
|
|
|
5.60
|
%
|
|
|
11.95
|
%
|
|
|
8.68
|
%
|
|
|
11.39
|
%
|
Tangible equity/tangible assets
|
|
(a)/(b)
|
|
|
9.00
|
%
|
|
|
8.77
|
%
|
|
|
8.79
|
%
|
|
|
8.61
|
%
|
|
|
8.80
|
%
|
Tangible equity/risk-weighted assets
|
|
(a)/(c)
|
|
|
11.25
|
%
|
|
|
11.13
|
%
|
|
|
11.29
|
%
|
|
|
11.19
|
%
|
|
|
11.49
|
%
|
Tangible book value
|
|
(a)/(d)*1,000
|
|
$
|
17.34
|
|
|
$
|
17.35
|
|
|
$
|
17.49
|
|
|
$
|
17.17
|
|
|
$
|
17.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMON EQUITY TIER 1 CAPITAL (CET1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity
|
|
|
|
$
|
1,570,137
|
|
|
$
|
1,571,701
|
|
|
$
|
1,582,535
|
|
|
$
|
1,561,918
|
|
|
$
|
1,537,961
|
|
AOCI-related adjustments (3)
|
|
|
|
|
67,886
|
|
|
|
48,248
|
|
|
|
27,825
|
|
|
|
28,509
|
|
|
|
43,005
|
|
CET1 adjustments and deductions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill net of associated deferred tax liabilities (DTLs)
|
|
|
|
|
(366,248
|
)
|
|
|
(366,461
|
)
|
|
|
(359,841
|
)
|
|
|
(360,198
|
)
|
|
|
(347,085
|
)
|
Other adjustments and deductions for CET1 (2)
|
|
|
|
|
(12,233
|
)
|
|
|
(10,248
|
)
|
|
|
(11,359
|
)
|
|
|
(11,267
|
)
|
|
|
(10,803
|
)
|
CET1 capital
|
|
(e)
|
|
|
1,259,542
|
|
|
|
1,243,240
|
|
|
|
1,239,160
|
|
|
|
1,218,962
|
|
|
|
1,223,078
|
|
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
|
)
|
|
|
(2
|
)
|
|
|
(471
|
)
|
|
|
(247
|
)
|
|
|
(159
|
)
|
Additional tier 1 capital
|
|
|
|
|
59,286
|
|
|
|
59,998
|
|
|
|
59,529
|
|
|
|
59,753
|
|
|
|
59,841
|
|
Tier 1 capital
|
|
|
|
$
|
1,318,828
|
|
|
$
|
1,303,238
|
|
|
$
|
1,298,689
|
|
|
$
|
1,278,715
|
|
|
$
|
1,282,919
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1 capital ratio
|
|
(e)/(c)
|
|
|
12.05
|
%
|
|
|
11.77
|
%
|
|
|
11.80
|
%
|
|
|
11.73
|
%
|
|
|
12.19
|
%
|
(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.
|
(3)
|
The December 31, 2017 amount contains a reclassification
adjustment of $8.5 million from AOCI to retained earnings as
allowed by regulatory agencies in an interagency statement
released January 18, 2018 to address disproportionate tax effect
in AOCI resulting from the recent enactment of the Tax Cuts and
Jobs Act of 2017 and the application of Financial Accounting
Standards Board Accounting Standards Codification Topic 740,
Income Taxes.
|
|
|
|
TRUSTMARK CORPORATION AND SUBSIDIARIES
|
|
NOTES TO CONSOLIDATED FINANCIALS
|
|
March 31, 2018
|
|
($ in thousands except per share data)
|
|
(unaudited)
|
Note 9 - Non-GAAP Financial Measures (continued)
Trustmark discloses certain non-GAAP financial measures, including net
income adjusted for significant non-routine transactions, because
Management uses these measures for business planning purposes, including
to manage Trustmark's business against internal projected results of
operations and to measure Trustmark's performance. Trustmark views net
income adjusted for significant non-routine transactions as a measure of
our core operating business, which excludes the impact of the items
detailed below, as these items are generally not operational in nature.
This non-GAAP measure also provides another basis for comparing
period-to-period results as presented in the accompanying selected
financial data table and the audited consolidated financial statements
by excluding potential differences caused by non-operational and unusual
or non-recurring items. Readers are cautioned that these adjustments are
not permitted under GAAP. Trustmark encourages readers to consider its
consolidated financial statements and the notes related thereto in their
entirety, and not to rely on any single financial measure.
The following table presents adjustments to net income and select
financial ratios as reported in accordance with GAAP resulting from
significant non-routine items occurring during the periods presented ($
in thousands, except per share data):
|
|
Quarter Ended
|
|
|
3/31/2018
|
|
|
|
12/31/2017
|
|
|
|
3/31/2017
|
|
|
Amount
|
|
|
Diluted EPS
|
|
|
|
Amount
|
|
|
Diluted EPS
|
|
|
|
Amount
|
|
|
Diluted EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (GAAP)
|
|
$
|
36,830
|
|
|
$
|
0.542
|
|
|
|
$
|
15,768
|
|
|
$
|
0.232
|
|
|
|
$
|
31,248
|
|
|
$
|
0.461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant non-routine transactions (net of taxes):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Re-measurement of net deferred taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
|
25,619
|
|
|
|
0.377
|
|
|
|
|
-
|
|
|
|
-
|
Elimination of deferred tax valuation allowance
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(8,650
|
)
|
|
|
(0.127
|
)
|
|
|
|
-
|
|
|
|
-
|
Net Income adjusted for significant non-routine transactions
(Non-GAAP)
|
|
$
|
36,830
|
|
|
$
|
0.542
|
|
|
|
$
|
32,737
|
|
|
$
|
0.482
|
|
|
|
$
|
31,248
|
|
|
$
|
0.461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
|
Adjusted
|
|
|
|
Reported
|
|
|
Adjusted
|
|
|
|
Reported
|
|
|
Adjusted
|
|
|
(GAAP)
|
|
|
(Non-GAAP)
|
|
|
|
(GAAP)
|
|
|
(Non-GAAP)
|
|
|
|
(GAAP)
|
|
|
(Non-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on equity
|
|
|
9.50
|
%
|
|
n/a
|
|
|
|
|
3.96
|
%
|
|
|
8.22
|
%
|
|
|
|
8.27
|
%
|
|
n/a
|
Return on average tangible equity
|
|
|
13.05
|
%
|
|
n/a
|
|
|
|
|
5.60
|
%
|
|
|
11.30
|
%
|
|
|
|
11.39
|
%
|
|
n/a
|
Return on assets
|
|
|
1.10
|
%
|
|
n/a
|
|
|
|
|
0.45
|
%
|
|
|
0.94
|
%
|
|
|
|
0.95
|
%
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
n/a - not applicable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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