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Trustmark Corporation Announces Fourth Quarter and Fiscal Year 2018 Financial Results

JACKSON, Miss.--(BUSINESS WIRE)--

Trustmark Corporation (TRMK) reported net income of $36.7 million in the fourth quarter of 2018, which represented diluted earnings per share of $0.55. Diluted earnings per share in the fourth quarter of 2018 increased 1.9% from the prior quarter and 14.6% when compared to the fourth quarter of 2017 excluding non-routine items.

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For the full year, Trustmark’s net income totaled $149.6 million, which represented diluted earnings per share of $2.21. This compares to reported diluted earnings per share in 2017 of $1.56, or $1.92 excluding non-routine items. Diluted earnings per share in 2018 increased 41.7% from reported EPS in 2017 and 15.1% when compared to earnings per share excluding non-routine items. Trustmark’s net income in 2018 produced a return on average tangible equity of 12.86% and a return on average assets of 1.11%.

Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable March 15, 2019, to shareholders of record on March 1, 2019.

2018 Highlights

  • Loans held for investment increased $265.9 million, or 3.1%, during the year
  • Credit quality remained solid; nonperforming assets declined 13.1%
  • Deposits increased $786.9 million, or 7.4%
  • Revenue excluding acquired loans totaled $587.1 million, an increase of 3.4%
  • Core noninterest expense totaled $408.2 million, up 2.2%

Gerard R. Host, President and CEO, stated, “During 2018, we continued to focus on strategic initiatives of profitably growing each of our financial services businesses, optimizing our balance sheet, deploying capital through share repurchases and maintaining disciplined expense management. As we look forward in 2019, we will continue to provide the financial services and advice our customers have come to expect. We remain committed to managing the franchise for the long term, supporting investments to promote profitable revenue growth, realigning delivery channels to support changing customer preferences, as well as reengineering and efficiency opportunities that enhance long-term shareholder value.”

Balance Sheet Management

  • Continued balance sheet optimization program as maturing investment securities were replaced in part by organic loan growth
  • Repurchased $54.5 million of common stock in fourth quarter

Loans held for investment totaled $8.8 billion at December 31, 2018, an increase of 1.0% from the prior quarter and 3.1% from the same period one year earlier. During the quarter, growth in other real estate secured loans ($90.1 million), state and political subdivision loans ($44.6 million), construction, land development and other land loans ($25.1 million) and residential mortgage loans ($24.5 million) was offset in part by declines in commercial and industrial loans ($27.2 million) and loans secured by nonfarm, nonresidential properties ($73.4 million).

Acquired loans totaled $106.9 million at December 31, 2018, down $25.7 million from the prior quarter. Collectively, loans held for investment and acquired loans totaled $8.9 billion at December 31, 2018, up 0.7% from the prior quarter and 1.3% from the prior year.

Deposits totaled $11.4 billion at December 31, 2018, an increase of $407.5 million, or 3.7%, from the previous quarter and $786.9 million, or 7.4%, year-over-year. Both the linked quarter and year-over-year increase reflects growth in personal and public fund balances.

Trustmark’s capital position remained solid, reflecting the consistent profitability of its diversified financial services businesses. During the fourth quarter, Trustmark repurchased approximately $54.5 million, or 1.8 million shares of its common stock. At December 31, 2018, Trustmark had $36.9 million in remaining authority under its existing stock repurchase program, which expires March 31, 2019. The repurchase program, which is subject to market conditions and management discretion, will continue to be implemented through open market repurchases or privately negotiated transactions. At December 31, 2018, Trustmark’s tangible equity to tangible assets ratio was 9.31%, while its total risk-based capital ratio was 13.07%. Tangible book value per share was $18.24 at December 31, 2018, up 5.1% year-over-year.

Credit Quality

  • Allowance for loan losses represented 350.77% of nonperforming loans, excluding specifically reviewed impaired loans
  • Nonperforming assets declined $8.0 million in the fourth quarter and $14.5 million year-over-year

Nonperforming loans totaled $61.6 million at December 31, 2018, down 9.2% from the prior quarter and 8.8% year-over-year. Other real estate totaled $34.7 million, reflecting a 5.0% linked-quarter decrease and a 19.8% year-over-year reduction. Collectively, nonperforming assets totaled $96.3 million, reflecting linked-quarter and year-over-year decreases of 7.7% and 13.1%, respectively.

Allocation of Trustmark's $79.3 million allowance for loan losses represented 0.99% of commercial loans and 0.57% of consumer and home mortgage loans, resulting in an allowance to total loans held for investment of 0.90% at December 31, 2018. This represents a level management considers commensurate with the inherent risk in the loan portfolio. In aggregate, the allowance for both held for investment and acquired loan losses represented 0.90% of total loans held for investment and acquired loans.

Net charge-offs totaled $11.8 million in the fourth quarter resulting from resolution of two specific problem credits which were fully provisioned in prior periods.

Unless noted otherwise, all of the above credit quality metrics exclude acquired loans.

Revenue Generation

  • Net interest income (FTE) excluding acquired loans in 2018 totaled $415.1 million, up 3.0% from the prior year
  • Noninterest income in 2018 totaled $184.8 million, representing 31.5% of total revenue excluding acquired loans

Revenue in the fourth quarter totaled $148.7 million, down 3.5% from the prior quarter, reflecting higher interest expense as well as a seasonal reduction in noninterest income. Net interest income (FTE) in the fourth quarter totaled $108.4 million, resulting in a net interest margin of 3.56%. Compared to the prior quarter, net interest income (FTE) decreased $1.7 million, as growth in total interest income was more than offset by increased total interest expense. During the fourth quarter of 2018, the yield on acquired loans totaled 9.89% and included $1.1 million in recoveries from the settlement of debt, which represented approximately 3.52% of the annualized total acquired loan yield. Excluding acquired loans, the net interest margin (FTE) for the fourth quarter of 2018 remained stable at 3.50% when compared to the third quarter of 2018, as growth in the yield on the loans held for investment and held for sale portfolio, runoff of maturing investment securities, and favorable funding mix were offset by higher costs of interest-bearing deposits. Net interest income (FTE) in 2018 totaled $432.2 million, resulting in a net interest margin (FTE) of 3.54%; excluding acquired loans, the net interest margin (FTE) was 3.46%.

Noninterest income totaled $43.6 million in the fourth quarter, down from the prior quarter primarily because of seasonally lower insurance commissions and reduced mortgage banking revenue. In the fourth quarter, bank card and other fees totaled $7.8 million, an increase of 3.9% from the prior quarter, while service charges on deposit accounts totaled $11.1 million, up 0.4% from the prior quarter. Other income, net increased $546 thousand linked quarter, primarily due to an increase in other miscellaneous income.

Insurance revenue in the fourth quarter totaled $9.6 million, reflecting a seasonal decrease of 11.2% from the prior quarter and an increase of 8.5% compared to one year earlier. Insurance revenue in 2018 totaled $40.5 million, up $2.3 million, or 6.0%, relative to the prior year. The solid performance in 2018 reflects increased business development efforts and initiatives that supported enhanced productivity.

Wealth management revenue totaled $7.5 million in the fourth quarter, a decrease of 3.7% when compared to the prior quarter and 2.8% from levels one year earlier. The decrease is primarily attributable to lower trust and investment management revenue. Wealth management revenue in 2018 totaled $30.3 million, in-line with the prior year. Trustmark remained focused on servicing clients and realigned processes to enhance productivity.

Mortgage banking revenue in the fourth quarter totaled $5.7 million, down $2.9 million from the prior quarter. The linked-quarter decrease reflects a decline in the fair value of loans held for sale, reduced secondary marketing gains, and negative mortgage servicing hedge ineffectiveness. Mortgage loan production in the fourth quarter totaled $303.7 million, a seasonal decrease of 23.7% from the prior quarter and a 10.0% decrease year-over-year, primarily due to lower refinancing activity and higher interest rates.

In 2018, mortgage banking revenue totaled $34.7 million, up 16.0% from the prior year, reflecting increased secondary marketing gains, positive mortgage servicing hedge ineffectiveness and increased mortgage servicing income. Mortgage loan production totaled $1.4 billion in 2018, up 3.4% from the prior year despite an extremely competitive third party origination environment.

Noninterest Expense

  • Total noninterest expense decreased 1.2% from the prior quarter
  • Effective Corporate tax rate in 2018 was 12.96%

Diligent expense management continues to be a priority for Trustmark. Core noninterest expense, which excludes other real estate expense ($61 thousand) and intangible amortization ($1.3 million), totaled $102.6 million in the fourth quarter, a decrease of $181 thousand on a comparable basis from the prior quarter and an increase of $1.8 million from the prior year.

Salaries and benefits totaled $58.7 million in the fourth quarter, down 3.5% linked quarter primarily due to a seasonal decline in insurance commissions. Services and fees increased 9.2% from the prior quarter, reflecting higher spending on outside services and fees, data processing and advertising. Other real estate expense totaled $61 thousand during the fourth quarter, representing a 94.8% decrease compared to the prior quarter. Other expense totaled $12.3 million in the fourth quarter, an increase of 4.8% from the prior quarter primarily due to increased miscellaneous fees.

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Thursday, January 24, 2019, at 8:30 a.m. Central Time to discuss the Corporation’s financial results. Interested parties may listen to the conference call by dialing (877) 317-3051 or by clicking on the link provided under the Investor Relations section of our website at www.trustmark.com. A replay of the conference call will also be available through Thursday, February 7, 2019, in archived format at the same web address or by calling (877) 344-7529, passcode 10127330.

Trustmark Corporation is a financial services company providing banking and financial solutions through 196 offices in Alabama, Florida, Mississippi, Tennessee and Texas.

Forward-Looking Statements

Certain statements contained in this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by words such as “may,” “hope,” “will,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “continue,” “could,” “future” or the negative of those terms or other words of similar meaning. You should read statements that contain these words carefully because they discuss our future expectations or state other “forward-looking” information. These forward-looking statements include, but are not limited to, statements relating to anticipated future operating and financial performance measures, including net interest margin, credit quality, business initiatives, growth opportunities and growth rates, among other things, and encompass any estimate, prediction, expectation, projection, opinion, anticipation, outlook or statement of belief included therein as well as the management assumptions underlying these forward-looking statements. You should be aware that the occurrence of the events described under the caption “Risk Factors” in Trustmark’s filings with the Securities and Exchange Commission could have an adverse effect on our business, results of operations and financial condition. Should one or more of these risks materialize, or should any such underlying assumptions prove to be significantly different, actual results may vary significantly from those anticipated, estimated, projected or expected. Risks that could cause actual results to differ materially from current expectations of Management include, but are not limited to, changes in the level of nonperforming assets and charge-offs, local, state and national economic and market conditions, including potential market impacts of efforts by the Federal Reserve Board to reduce the size of its balance sheet, conditions in the housing and real estate markets in the regions in which Trustmark operates and the extent and duration of the current volatility in the credit and financial markets as well as crude oil prices, changes in our ability to measure the fair value of assets in our portfolio, material changes in the level and/or volatility of market interest rates, the performance and demand for the products and services we offer, including the level and timing of withdrawals from our deposit accounts, the costs and effects of litigation and of unexpected or adverse outcomes in such litigation, our ability to attract noninterest-bearing deposits and other low-cost funds, competition in loan and deposit pricing, as well as the entry of new competitors into our markets through de novo expansion and acquisitions, economic conditions, including the potential impact of issues relating to the European financial system and monetary and other governmental actions designed to address credit, securities, and/or commodity markets, the enactment of legislation and changes in existing regulations or enforcement practices or the adoption of new regulations, changes in accounting standards and practices, including changes in the interpretation of existing standards, that affect our consolidated financial statements, changes in consumer spending, borrowings and savings habits, technological changes, changes in the financial performance or condition of our borrowers, changes in our ability to control expenses, greater than expected costs or difficulties related to the integration of acquisitions or new products and lines of business, cyber-attacks and other breaches which could affect our information system security, natural disasters, environmental disasters, acts of war or terrorism, and other risks described in our filings with the Securities and Exchange Commission.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Except as required by law, we undertake no obligation to update or revise any of this information, whether as the result of new information, future events or developments or otherwise.

 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2018
($ in thousands)
(unaudited)
        Linked Quarter   Year over Year

QUARTERLY AVERAGE BALANCES

  12/31/2018     9/30/2018     12/31/2017  

$ Change

  % Change

$ Change

  % Change  
Securities AFS-taxable $ 1,847,421 $ 1,937,807 $ 2,247,247 $ (90,386 ) -4.7 % $ (399,826 ) -17.8 %
Securities AFS-nontaxable 38,821 41,889 61,691 (3,068 ) -7.3 % (22,870 ) -37.1 %
Securities HTM-taxable 893,186 933,294 1,045,723 (40,108 ) -4.3 % (152,537 ) -14.6 %
Securities HTM-nontaxable   29,143     29,183     32,781     (40 ) -0.1 %   (3,638 ) -11.1 %
Total securities   2,808,571     2,942,173     3,387,442     (133,602 ) -4.5 %   (578,871 ) -17.1 %
Loans (including loans held for sale) 8,933,501 8,907,588 8,686,916 25,913 0.3 % 246,585 2.8 %
Acquired loans 127,747 147,811 273,918 (20,064 ) -13.6 % (146,171 ) -53.4 %
Fed funds sold and rev repos 843 477 1,724 366 76.7 % (881 ) -51.1 %
Other earning assets   200,282     189,471     80,218     10,811   5.7 %   120,064   n/m
Total earning assets   12,070,944     12,187,520     12,430,218     (116,576 ) -1.0 %   (359,274 ) -2.9 %
Allowance for loan losses (85,842 ) (86,496 ) (86,704 ) 654 0.8 % 862 1.0 %
Cash and due from banks 339,605 330,949 315,586 8,656 2.6 % 24,019 7.6 %
Other assets   1,023,226     1,035,327     1,192,464     (12,101 ) -1.2 %   (169,238 ) -14.2 %
Total assets $ 13,347,933   $ 13,467,300   $ 13,851,564   $ (119,367 ) -0.9 % $ (503,631 ) -3.6 %
 
Interest-bearing demand deposits $ 2,722,841 $ 2,602,658 $ 2,244,625 $ 120,183 4.6 % $ 478,216 21.3 %
Savings deposits 3,565,682 3,722,533 3,291,407 (156,851 ) -4.2 % 274,275 8.3 %
Time deposits   1,892,983     1,851,866     1,756,576     41,117   2.2 %   136,407   7.8 %
Total interest-bearing deposits 8,181,506 8,177,057 7,292,608 4,449 0.1 % 888,898 12.2 %
Fed funds purchased and repos 340,094 347,489 475,850 (7,395 ) -2.1 % (135,756 ) -28.5 %
Short-term borrowings 89,364 186,293 1,276,543 (96,929 ) -52.0 % (1,187,179 ) -93.0 %
Long-term FHLB advances 888 903 954 (15 ) -1.7 % (66 ) -6.9 %
Junior subordinated debt securities   61,856     61,856     61,856       0.0 %     0.0 %
Total interest-bearing liabilities 8,673,708 8,773,598 9,107,811 (99,890 ) -1.1 % (434,103 ) -4.8 %
Noninterest-bearing deposits 2,862,161 2,894,061 2,994,292 (31,900 ) -1.1 % (132,131 ) -4.4 %
Other liabilities   216,932     202,053     169,828     14,879   7.4 %   47,104   27.7 %
Total liabilities 11,752,801 11,869,712 12,271,931 (116,911 ) -1.0 % (519,130 ) -4.2 %
Shareholders' equity   1,595,132     1,597,588     1,579,633     (2,456 ) -0.2 %   15,499   1.0 %
Total liabilities and equity $ 13,347,933   $ 13,467,300   $ 13,851,564   $ (119,367 ) -0.9 % $ (503,631 ) -3.6 %
 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 

See Notes to Consolidated Financials.

 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2018
($ in thousands)
(unaudited)
             
Linked Quarter Year over Year

PERIOD END BALANCES

  12/31/2018     9/30/2018     12/31/2017  

$ Change

% Change

$ Change

% Change  
Cash and due from banks $ 349,561 $ 432,471 $ 335,768 $ (82,910 ) -19.2 % $ 13,793 4.1 %
Fed funds sold and rev repos 830 1,000 615 (170 ) -17.0 % 215 35.0 %
Securities available for sale 1,811,813 1,864,633 2,238,635 (52,820 ) -2.8 % (426,822 ) -19.1 %
Securities held to maturity 909,643 943,883 1,056,486 (34,240 ) -3.6 % (146,843 ) -13.9 %
Loans held for sale (LHFS) 153,799 182,664 180,512 (28,865 ) -15.8 % (26,713 ) -14.8 %
Loans held for investment (LHFI) 8,835,868 8,747,030 8,569,967 88,838 1.0 % 265,901 3.1 %
Allowance for loan losses, LHFI   (79,290 )   (88,874 )   (76,733 )   9,584   10.8 %   (2,557 ) -3.3 %
Net LHFI 8,756,578 8,658,156 8,493,234 98,422 1.1 % 263,344 3.1 %
Acquired loans 106,932 132,615 261,517 (25,683 ) -19.4 % (154,585 ) -59.1 %
Allowance for loan losses, acquired loans   (1,231 )   (1,714 )   (4,079 )   483   28.2 %   2,848   69.8 %
Net acquired loans   105,701     130,901     257,438     (25,200 ) -19.3 %   (151,737 ) -58.9 %
Net LHFI and acquired loans 8,862,279 8,789,057 8,750,672 73,222 0.8 % 111,607 1.3 %
Premises and equipment, net 178,668 178,739 179,339 (71 ) 0.0 % (671 ) -0.4 %
Mortgage servicing rights 95,596 101,374 84,269 (5,778 ) -5.7 % 11,327 13.4 %
Goodwill 379,627 379,627 379,627 0.0 % 0.0 %
Identifiable intangible assets 11,112 12,391 16,360 (1,279 ) -10.3 % (5,248 ) -32.1 %
Other real estate 34,668 36,475 43,228 (1,807 ) -5.0 % (8,560 ) -19.8 %
Other assets   498,864     517,498     532,442     (18,634 ) -3.6 %   (33,578 ) -6.3 %
Total assets $ 13,286,460   $ 13,439,812   $ 13,797,953   $ (153,352 ) -1.1 % $ (511,493 ) -3.7 %
 
Deposits:
Noninterest-bearing $ 2,937,594 $ 2,786,539 $ 2,978,074 $ 151,055 5.4 % $ (40,480 ) -1.4 %
Interest-bearing   8,426,817     8,170,371     7,599,438     256,446   3.1 %   827,379   10.9 %
Total deposits 11,364,411 10,956,910 10,577,512 407,501 3.7 % 786,899 7.4 %
Fed funds purchased and repos 50,471 486,865 469,827 (436,394 ) -89.6 % (419,356 ) -89.3 %
Short-term borrowings 79,006 190,023 971,049 (111,017 ) -58.4 % (892,043 ) -91.9 %
Long-term FHLB advances 879 896 946 (17 ) -1.9 % (67 ) -7.1 %
Junior subordinated debt securities 61,856 61,856 61,856 0.0 % 0.0 %
Other liabilities   138,384     143,658     145,062     (5,274 ) -3.7 %   (6,678 ) -4.6 %
Total liabilities   11,695,007     11,840,208     12,226,252     (145,201 ) -1.2 %   (531,245 ) -4.3 %
Common stock 13,717 14,089 14,115 (372 ) -2.6 % (398 ) -2.8 %
Capital surplus 309,545 362,868 369,124 (53,323 ) -14.7 % (59,579 ) -16.1 %
Retained earnings 1,323,870 1,302,593 1,228,187 21,277 1.6 % 95,683 7.8 %
Accum other comprehensive loss, net of tax   (55,679 )   (79,946 )   (39,725 )   24,267   30.4 %   (15,954 ) 40.2 %
Total shareholders' equity   1,591,453     1,599,604     1,571,701     (8,151 ) -0.5 %   19,752   1.3 %
Total liabilities and equity $ 13,286,460   $ 13,439,812   $ 13,797,953   $ (153,352 ) -1.1 % $ (511,493 ) -3.7 %
 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 

See Notes to Consolidated Financials.

 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2018
($ in thousands except per share data)
(unaudited)
             
 
Quarter Ended Linked Quarter Year over Year

INCOME STATEMENTS

  12/31/2018     9/30/2018     12/31/2017  

$ Change

% Change

$ Change

% Change  
Interest and fees on LHFS & LHFI-FTE $ 107,709 $ 105,993 $ 95,816 $ 1,716 1.6 % $ 11,893 12.4 %
Interest and fees on acquired loans 3,183 4,033 6,401 (850 ) -21.1 % (3,218 ) -50.3 %
Interest on securities-taxable 15,496 16,186 18,327 (690 ) -4.3 % (2,831 ) -15.4 %
Interest on securities-tax exempt-FTE 617 656 1,035 (39 ) -5.9 % (418 ) -40.4 %
Interest on fed funds sold and rev repos 4 3 7 1 33.3 % (3 ) -42.9 %
Other interest income   1,158     1,050     473     108   10.3 %   685   n/m
Total interest income-FTE   128,167     127,921     122,059     246   0.2 %   6,108   5.0 %
Interest on deposits 17,334 14,972 7,284 2,362 15.8 % 10,050 n/m
Interest on fed funds pch and repos 1,528 1,348 1,116 180 13.4 % 412 36.9 %
Other interest expense   894     1,467     4,555     (573 ) -39.1 %   (3,661 ) -80.4 %
Total interest expense   19,756     17,787     12,955     1,969   11.1 %   6,801   52.5 %
Net interest income-FTE 108,411 110,134 109,104 (1,723 ) -1.6 % (693 ) -0.6 %
Provision for loan losses, LHFI 2,192 8,673 5,739 (6,481 ) -74.7 % (3,547 ) -61.8 %
Provision for loan losses, acquired loans   (247 )   (467 )   (1,573 )   220   47.1 %   1,326   84.3 %
Net interest income after provision-FTE   106,466     101,928     104,938     4,538   4.5 %   1,528   1.5 %
Service charges on deposit accounts 11,123 11,075 11,193 48 0.4 % (70 ) -0.6 %
Bank card and other fees 7,750 7,459 7,266 291 3.9 % 484 6.7 %
Mortgage banking, net 5,716 8,647 6,284 (2,931 ) -33.9 % (568 ) -9.0 %
Insurance commissions 9,562 10,765 8,813 (1,203 ) -11.2 % 749 8.5 %
Wealth management 7,504 7,789 7,723 (285 ) -3.7 % (219 ) -2.8 %
Other, net   1,904     1,358     2,681     546   40.2 %   (777 ) -29.0 %
Nonint inc-excl sec gains (losses), net 43,559 47,093 43,960 (3,534 ) -7.5 % (401 ) -0.9 %
Security gains (losses), net                 n/m     n/m
Total noninterest income   43,559     47,093     43,960     (3,534 ) -7.5 %   (401 ) -0.9 %
Salaries and employee benefits 58,736 60,847 58,820 (2,111 ) -3.5 % (84 ) -0.1 %
Defined benefit plan termination n/m n/m
Services and fees 17,910 16,404 15,419 1,506 9.2 % 2,491 16.2 %
Net occupancy-premises 6,741 6,910 6,617 (169 ) -2.4 % 124 1.9 %
Equipment expense 6,329 6,200 5,996 129 2.1 % 333 5.6 %
Other real estate expense, net 61 1,168 666 (1,107 ) -94.8 % (605 ) -90.8 %
FDIC assessment expense 1,897 1,999 2,868 (102 ) -5.1 % (971 ) -33.9 %
Other expense   12,253     11,695     12,565     558   4.8 %   (312 ) -2.5 %
Total noninterest expense   103,927     105,223     102,951     (1,296 ) -1.2 %   976   0.9 %
Income before income taxes and tax eq adj 46,098 43,798 45,947 2,300 5.3 % 151 0.3 %
Tax equivalent adjustment   3,231     3,151     5,060     80   2.5 %   (1,829 ) -36.1 %
Income before income taxes 42,867 40,647 40,887 2,220 5.5 % 1,980 4.8 %
Income taxes   6,179     4,394     25,119     1,785   40.6 %   (18,940 ) -75.4 %
Net income $ 36,688   $ 36,253   $ 15,768   $ 435   1.2 % $ 20,920   n/m
 
Per share data
Earnings per share - basic $ 0.55   $ 0.54   $ 0.23   $ 0.01   1.9 % $ 0.32   n/m
 
Earnings per share - diluted $ 0.55   $ 0.54   $ 0.23   $ 0.01   1.9 % $ 0.32   n/m
 
Dividends per share $ 0.23   $ 0.23   $ 0.23       0.0 %     0.0 %
 
Weighted average shares outstanding
Basic   66,839,504     67,621,345     67,742,792  
 
Diluted   67,028,978     67,796,346     67,938,986  
 
Period end shares outstanding   65,834,395     67,621,369     67,746,094  
 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 

See Notes to Consolidated Financials.

 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2018
($ in thousands)
(unaudited)
               
Quarter Ended Linked Quarter Year over Year

NONPERFORMING ASSETS (1)

  12/31/2018     9/30/2018     12/31/2017  

$ Change

% Change

$ Change

% Change  
Nonaccrual loans
Alabama $ 3,361 $ 3,953 $ 3,083 $ (592 ) -15.0 % $ 278 9.0 %
Florida 1,175 1,180 3,034 (5 ) -0.4 % (1,859 ) -61.3 %
Mississippi (2) 44,331 41,351 49,129 2,980 7.2 % (4,798 ) -9.8 %
Tennessee (3) 8,696 13,195 4,436 (4,499 ) -34.1 % 4,260 96.0 %
Texas   4,061     8,157     7,893     (4,096 ) -50.2 %   (3,832 ) -48.5 %
Total nonaccrual loans 61,624 67,836 67,575 (6,212 ) -9.2 % (5,951 ) -8.8 %
Other real estate
Alabama 6,873 7,526 11,714 (653 ) -8.7 % (4,841 ) -41.3 %
Florida 8,771 8,931 13,937 (160 ) -1.8 % (5,166 ) -37.1 %
Mississippi (2) 17,255 18,191 14,260 (936 ) -5.1 % 2,995 21.0 %
Tennessee (3) 1,025 1,083 2,535 (58 ) -5.4 % (1,510 ) -59.6 %
Texas   744     744     782       0.0 %   (38 ) -4.9 %
Total other real estate   34,668     36,475     43,228     (1,807 ) -5.0 %   (8,560 ) -19.8 %
Total nonperforming assets $ 96,292   $ 104,311   $ 110,803   $ (8,019 ) -7.7 % $ (14,511 ) -13.1 %
 

LOANS PAST DUE OVER 90 DAYS (1)

LHFI $ 856   $ 726   $ 2,171   $ 130   17.9 % $ (1,315 ) -60.6 %
 
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase) $ 37,384   $ 34,115   $ 35,544   $ 3,269   9.6 % $ 1,840   5.2 %
 
Quarter Ended Linked Quarter Year over Year

ALLOWANCE FOR LOAN LOSSES (1)

  12/31/2018     9/30/2018     12/31/2017  

$ Change

% Change

$ Change

% Change  
Beginning Balance $ 88,874 $ 83,566 $ 80,332 $ 5,308 6.4 % $ 8,542 10.6 %
Transfers (4) 772 (772 ) -100.0 % n/m
Provision for loan losses 2,192 8,673 5,739 (6,481 ) -74.7 % (3,547 ) -61.8 %
Charge-offs (16,509 ) (7,017 ) (12,075 ) (9,492 ) n/m (4,434 ) -36.7 %
Recoveries   4,733 ...