Trustmark Corporation Announces Fourth Quarter and Fiscal Year 2020 Financial Results

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Record earnings in 2020 reflect value of diversified financial services businesses
Solid balance sheet, credit quality and capital base provide strength and stability

Trustmark Corporation (NASDAQ:TRMK) reported net income of $51.2 million in the fourth quarter of 2020, representing diluted earnings per share of $0.81. Net income in the fourth quarter produced a return on average tangible equity of 15.47% and a return on average assets of 1.28%. For the full year, Trustmark’s net income totaled a record level of $160.0 million, representing diluted earnings per share of $2.51. Diluted earnings per share in 2020 increased 8.2% when compared to the prior year. Trustmark’s net income in 2020 produced a return on average tangible equity of 12.58% and a return on average assets of 1.05%.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210126006001/en/

Printer friendly version of earnings release with consolidated financial statements and notes: https://www.businesswire.com/news/home/52367350/en

Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable March 15, 2021, to shareholders of record on March 1, 2021.

Gerard R. Host, Executive Chairman, stated, "This past year has been extremely challenging for everyone. The effects of COVID-19 have significantly impacted the ways in which we live, work and interact with one another. We extend our deepest sympathies to all who lost loved ones and all who have been impacted by this pandemic. We also extend our sincere appreciation and gratitude to healthcare professionals for their tireless and self-sacrificing work during this pandemic. Also, we want to thank our associates for their countless efforts to serve our customers and support our communities and businesses. Trustmark remains committed to providing solutions to meet customer’s unique needs during these unprecedented times."

2020 Highlights

  • Supported local communities with loan originations totaling $970 million through the SBA’s Paycheck Protection Program (PPP)

  • Loans held for investment increased $488.9 million, or 5.2%

  • Nonperforming assets declined 9.3%, net charge-offs represented 0.02% of average loans

  • Total deposits increased $2.8 billion, or 24.9%

  • Record mortgage loan production of $3.0 billion produced noninterest income of $125.8 million

  • Total revenue expanded 14.3% to $701.1 million

  • Noninterest income totaled $274.6 million, an increase of 46.8%

  • Maintained strong capital position with CET1 ratio of 11.62% and total risk-based capital ratio of 14.12%

Duane A. Dewey, President and CEO, commented, "Our financial results demonstrate the value of Trustmark’s diversified financial services businesses. Despite a challenging environment, our banking, insurance and wealth management businesses all performed well while our mortgage banking business achieved record results. We experienced significant loan and deposit growth, and credit quality remained extremely strong as did capital ratios. Trustmark continues to be well-positioned to serve and expand its customer base and create long-term value for its shareholders."

Balance Sheet Management

  • Loans held for investment decreased $23.2 million, or 0.2%, during the quarter

  • Total deposits increased $826.4 million, or 6.2%, during the quarter

  • Enhanced capital base with issuance of $125 million of subordinated debt

Loans held for investment totaled $9.8 billion at December 31, 2020, reflecting an increase of 5.2% from the prior year. At December 31, 2020, Trustmark’s gross PPP loans totaled $623.0 million. Net of deferred fees and costs of $12.9 million, PPP loans totaled $610.1 million. Collectively, loans held for investment and PPP loans totaled $10.4 billion at year end 2020, an increase of $1.1 billion, or 11.8% from the prior year.

Deposits totaled $14.0 billion at December 31, 2020, up $826.4 million, or 6.2%, from the prior quarter and $2.8 billion, or 24.9%, year-over-year primarily reflecting the impact of additional customer liquidity. Noninterest bearing deposits represented 31.0% of total deposits at December 31, 2020. Interest-bearing deposit costs totaled 0.27% for the fourth quarter, a decrease of 4 basis points linked-quarter. The total cost of interest-bearing liabilities was 0.30% for the fourth quarter of 2020, a decrease of 3 basis points from the prior quarter.

Trustmark’s capital position remained solid, reflecting the strength and diversity of its financial services businesses. During the fourth quarter of 2020, Trustmark Corporation issued $125 million of 3.625% fixed-to-floating rate subordinated notes due in 2030 for general corporate purposes, further strengthening its regulatory capital position. At December 31, 2020, Trustmark’s tangible equity to tangible assets ratio was 8.34%, while the total risk-based capital ratio increased to 14.12%.

As previously announced, Trustmark’s Board of Directors authorized a stock repurchase program effective April 1, 2020, under which $100 million of Trustmark’s outstanding shares may be acquired through December 31, 2021. While Trustmark suspended its share repurchase program during the first quarter of 2020 to preserve capital given the economic uncertainty associated with the COVID-19 pandemic, Trustmark expects to resume the repurchase of its shares from time to time at prevailing market prices, through open market or private transactions, depending on market conditions, and in conjunction with its disciplined share repurchase framework. There is no guarantee as to the number of shares that may be repurchased by Trustmark, and Trustmark may discontinue purchases at any time at management’s discretion.

Credit Quality

  • Allowance for credit losses represented 1.19% of loans held for investment and 572.69% of nonperforming loans, excluding individually evaluated loans at year-end

  • Net charge-offs totaled $291 thousand, or 0.01% of average loans, in the fourth quarter

  • Loans remaining under a COVID-19 related concession represented approximately 35 basis points of loans held for investment at December 31, 2020

Nonperforming loans totaled $63.1 million at December 31, 2020, an increase of $9.3 million from the prior quarter and $9.9 million year-over-year. Other real estate totaled $11.7 million, reflecting a $4.6 million decrease from the prior quarter and a $17.6 million decline from the prior year. Collectively, nonperforming assets totaled $74.8 million, reflecting a linked-quarter increase of 6.7% and year-over-year reduction of 9.3%.

Allocation of Trustmark’s $117.3 million allowance for credit losses on loans held for investment represented 1.20% of commercial loans and 1.16% of consumer and home mortgage loans, resulting in an allowance for credit losses to total loans held for investment of 1.19% at December 31, 2020, representing a level management considers commensurate with the present risk in the loan portfolio.

Revenue Generation

  • Mortgage banking revenue totaled $28.2 million and represented 15.9% of total revenue in the fourth quarter

  • Noninterest income totaled $66.1 million and represented 37.3% of total revenue in fourth quarter

  • The net interest margin (FTE) totaled 3.15% in fourth quarter; excluding interest and fees on PPP loans, net interest margin (FTE) was 2.91%

Revenue in the fourth quarter totaled $177.5 million, a decrease of 1.3% from the prior quarter and an increase of 15.9% from the same quarter in the prior year. The linked-quarter decline reflects higher net interest income, which was more than offset by reduced mortgage banking revenue. In 2020, revenue totaled $701.1 million, an increase of 14.3% from the prior year. Excluding interest and fees on PPP loans, revenue totaled $674.5 million in 2020, an increase of $60.9 million, or 9.9%, from the prior year principally due to growth in mortgage banking revenue.

Net interest income (FTE) in the fourth quarter totaled $114.3 million, resulting in a net interest margin of 3.15%. Relative to the prior quarter, net interest income (FTE) increased $5.1 million reflecting an increase of $4.5 million in interest income as well as a $611 thousand reduction in interest expense. Excluding interest and fees on PPP loans, net interest income (FTE) totaled $99.4 million, resulting in a net interest margin of 2.91%, a linked-quarter decline of 14 basis points. Continued low interest rates decreased the yield on the loans held for investment and held for sale portfolio as well as the securities portfolio and were partially offset by lower costs of interest-bearing deposits.

Noninterest income in the fourth quarter totaled $66.1 million, a decrease of $7.6 million from the prior quarter and an increase of $18.5 million from the prior year. The linked-quarter change reflects increases in service charges on deposit accounts and bank card and other fees, which were more than offset by a decline in mortgage banking revenue and a seasonal decline in insurance revenue. The increase in noninterest income year-over-year is principally due to increased mortgage banking revenue.

Mortgage loan production in the fourth quarter totaled $788.4 million, a seasonal decline of 11.0% from the prior quarter and a 58.1% increase year-over-year. Mortgage banking revenue before hedge ineffectiveness totaled $29.1 million in the fourth quarter, a decline of $6.6 million from the prior quarter primarily due to lower gains on sale of loans in the secondary market. In 2020, mortgage loan production totaled a record $2.98 billion, up 69.4% from the prior year. Mortgage banking revenue totaled $125.8 million in 2020, an increase of $96.0 million from the prior year.

Insurance revenue in the fourth quarter totaled $10.2 million, a seasonal decline of $1.4 million from the prior quarter and an increase of $832 thousand from the prior year. Insurance revenue in 2020 totaled $45.2 million, up $2.8 million, or 6.6%, from the prior year. The solid performance during the year reflects an expanded producer workforce as well as the realization of operational efficiencies from investments in technology and improved processes.

Wealth management revenue totaled $7.8 million in the fourth quarter, up 2.1% from the prior quarter and 1.0% from the prior year. In 2020, wealth management revenue totaled $31.6 million, an increase of 3.1% from the prior year. During 2020, Trustmark continued to enhance its competitive positioning and efficiency of its wealth management businesses as well as expand its Private Banking capabilities in key markets.

Noninterest Expense

  • Adjusted non-interest expense, which excludes amortization of intangibles, ORE expenses, and credit losses for off-balance sheet credit exposures, increased $4.9 million, or 4.3%, from the prior quarter. Please refer to the Consolidated Financial Information, Footnote 10 – Non-GAAP Financial Measures.

  • Efficiency ratio improved to 63.35% in 2020, a decline of 303 basis points from the prior year

Adjusted noninterest expense in the fourth quarter was $119.6 million, up $4.9 million, or 4.3%, from the prior quarter. Salaries and employee benefits increased $2.3 million linked-quarter principally due to increases for performance-based incentives. Total services and fees increased $1.3 million during the fourth quarter due to continued investments in technology and higher professional fees. Other expense increased $1.2 million from the prior quarter principally due to increased operational losses and other expenses.

Credit loss expense related to off-balance sheet credit exposures was a negative $1.1 million in the fourth quarter, reflecting the improvement of the macroeconomic factors used to determine the necessary reserves for off-balance sheet credit exposures. Other real estate expense was a negative $812 thousand for the fourth quarter, a decrease of approximately $2.0 million from the prior quarter, which is attributed to lower write-downs of ORE of $716 thousand and a net gain on the sale of ORE property of $1.3 million.

During 2020, Trustmark consolidated six offices and expanded deployment of interactive teller machines. In January 2021, Trustmark opened a new office featuring a design that integrates myTeller interactive teller machine technology as well as provides enhanced areas for customer engagement. With the opening of this office, two other offices were closed.

"Looking forward, Trustmark will focus upon efficiency, growth and innovation opportunities while building upon its solid risk management processes, corporate culture and core values. We will continue to optimize delivery channels to reflect changing customer preferences and introduce technology to enhance growth and efficiency opportunities. We will provide the services and advice our customers have come to expect while building term value for our shareholders," said Dewey.

Additional Information

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, January 27, 2021 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, February 10, 2021, in archived format at the same web address or by calling (877) 344-7529, passcode 10151113.

Trustmark is a financial services company providing banking and financial solutions through 183 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," "project," "potential," "seek," "continue," "could," "would," "future" or the negative of those terms or other words of similar meaning. You should read statements that contain these words carefully because they discuss our future expectations or state other "forward-looking" information. These forward-looking statements include, but are not limited to, statements relating to anticipated future operating and financial performance measures, including net interest margin, credit quality, business initiatives, growth opportunities and growth rates, among other things, and encompass any estimate, prediction, expectation, projection, opinion, anticipation, outlook or statement of belief included therein as well as the management assumptions underlying these forward-looking statements. You should be aware that the occurrence of the events described under the caption "Risk Factors" in Trustmark’s filings with the Securities and Exchange Commission (SEC) could have an adverse effect on our business, results of operations and financial condition. Should one or more of these risks materialize, or should any such underlying assumptions prove to be significantly different, actual results may vary significantly from those anticipated, estimated, projected or expected. Furthermore, many of these risks and uncertainties are currently amplified by and may continue to be amplified by or may, in the future, be amplified by, the novel coronavirus (COVID-19) pandemic, and also by the effectiveness of varying governmental responses in ameliorating the impact of the pandemic on our customers and the economies where they operate.

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, an increase in unemployment levels and slowdowns in economic growth, our ability to manage the impact of the COVID-19 pandemic on our markets and our customers, as well as the effectiveness of actions of federal, state and local governments and agencies (including the Board of Governors of the Federal Reserve Board (FRB)) to mitigate its spread and economic impact, local, state and national economic and market conditions, conditions in the housing and real estate markets in the regions in which Trustmark operates and the extent and duration of the current volatility in the credit and financial markets, levels of and volatility in crude oil prices, changes in our ability to measure the fair value of assets in our portfolio, material changes in the level and/or volatility of market interest rates, the performance and demand for the products and services we offer, including the level and timing of withdrawals from our deposit accounts, the costs and effects of litigation and of unexpected or adverse outcomes in such litigation, our ability to attract noninterest-bearing deposits and other low-cost funds, competition in loan and deposit pricing, as well as the entry of new competitors into our markets through de novo expansion and acquisitions, economic conditions, including the potential impact of issues related to the European financial system and monetary and other governmental actions designed to address credit, securities, and/or commodity markets, the enactment of legislation and changes in existing regulations or enforcement practices or the adoption of new regulations, changes in accounting standards and practices, including changes in the interpretation of existing standards, that affect our consolidated financial statements, changes in consumer spending, borrowings and savings habits, technological changes, changes in the financial performance or condition of our borrowers, changes in our ability to control expenses, greater than expected costs or difficulties related to the integration of acquisitions or new products and lines of business, cyber-attacks and other breaches which could affect our information system security, natural disasters, environmental disasters, pandemics or other health crises, acts of war or terrorism, and other risks described in our filings with the SEC.

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

TRUSTMARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

December 31, 2020

($ in thousands)

(unaudited)

Linked Quarter

Year over Year

QUARTERLY AVERAGE BALANCES

12/31/2020

9/30/2020

12/31/2019

$ Change

% Change

$ Change

% Change

Securities AFS-taxable

$

1,902,162

$

1,857,050

$

1,551,358

$

45,112

2.4

%

$

350,804

22.6

%

Securities AFS-nontaxable

5,206

5,973

23,300

(767

)

-12.8

%

(18,094

)

-77.7

%

Securities HTM-taxable

550,563

608,585

734,474

(58,022

)

-9.5

%

(183,911

)

-25.0

%

Securities HTM-nontaxable

24,752

25,508

25,703

(756

)

-3.0

%

(951

)

-3.7

%

Total securities

2,482,683

2,497,116

2,334,835

(14,433

)

-0.6

%

147,848

6.3

%

Paycheck protection program loans (PPP)

875,098

941,456

(66,358

)

-7.0

%

875,098

n/m

Loans (includes loans held for sale) (1)

10,231,671

10,162,379

9,467,437

69,292

0.7

%

764,234

8.1

%

Acquired loans (1)

77,797

n/m

(77,797

)

-100.0

%

Fed funds sold and reverse repurchases

303

301

184

2

0.7

%

119

64.7

%

Other earning assets

860,540

722,917

227,116

137,623

19.0

%

633,424

n/m

Total earning assets

14,450,295

14,324,169

12,107,369

126,126

0.9

%

2,342,926

19.4

%

Allowance for credit losses (ACL), loans held

for investment (LHFI) (1)

(124,088

)

(121,842

)

(86,211

)

(2,246

)

-1.8

%

(37,877

)

-43.9

%

Other assets

1,620,694

1,564,825

1,445,075

55,869

3.6

%

175,619

12.2

%

Total assets

$

15,946,901

$

15,767,152

$

13,466,233

$

179,749

1.1

%

$

2,480,668

18.4

%

Interest-bearing demand deposits

$

3,649,590

$

3,669,249

$

3,167,256

$

(19,659

)

-0.5

%

$

482,334

15.2

%

Savings deposits

4,350,783

4,416,046

3,448,899

(65,263

)

-1.5

%

901,884

26.1

%

Time deposits

1,436,677

1,507,348

1,663,741

(70,671

)

-4.7

%

(227,064

)

-13.6

%

Total interest-bearing deposits

9,437,050

9,592,643

8,279,896

(155,593

)

-1.6

%

1,157,154

14.0

%

Fed funds purchased and repurchases

170,474

84,077

164,754

86,397

n/m

5,720

3.5

%

Other borrowings

173,525

167,262

79,512

6,263

3.7

%

94,013

n/m

Subordinated notes

42,828

42,828

n/m

42,828

n/m

Junior subordinated debt securities

61,856

61,856

61,856

0.0

%

0.0

%

Total interest-bearing liabilities

9,885,733

9,905,838

8,586,018

(20,105

)

-0.2

%

1,299,715

15.1

%

Noninterest-bearing deposits

4,100,849

3,921,867

3,017,824

178,982

4.6

%

1,083,025

35.9

%

Other liabilities

235,284

244,544

205,786

(9,260

)

-3.8

%

29,498

14.3

%

Total liabilities

14,221,866

14,072,249

11,809,628

149,617

1.1

%

2,412,238

20.4

%

Shareholders' equity

1,725,035

1,694,903

1,656,605

30,132

1.8

%

68,430

4.1

%

Total liabilities and equity

$

15,946,901

$

15,767,152

$

13,466,233

$

179,749

1.1

%

$

2,480,668

18.4

%

(1) See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.

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, 2020

($ in thousands)

(unaudited)

Linked Quarter

Year over Year

PERIOD END BALANCES

12/31/2020

9/30/2020

12/31/2019

$ Change

% Change

$ Change

% Change

Cash and due from banks

$

1,952,504

$

564,588

$

358,916

$

1,387,916

n/m

$

1,593,588

n/m

Fed funds sold and reverse repurchases

50

50

0.0

%

50

n/m

Securities available for sale

1,991,815

1,922,728

1,602,404

69,087

3.6

%

389,411

24.3

%

Securities held to maturity

538,072

611,280

738,099

(73,208

)

-12.0

%

(200,027

)

-27.1

%

PPP loans

610,134

944,270

(334,136

)

-35.4

%

610,134

n/m

Loans held for sale (LHFS)

446,951

485,103

226,347

(38,152

)

-7.9

%

220,604

97.5

%

Loans held for investment (LHFI) (1)

9,824,524

9,847,728

9,335,628

(23,204

)

-0.2

%

488,896

5.2

%

ACL LHFI (1)

(117,306

)

(122,010

)

(84,277

)

4,704

3.9

%

(33,029

)

-39.2

%

Net LHFI

9,707,218

9,725,718

9,251,351

(18,500

)

-0.2

%

455,867

4.9

%

Acquired loans (1)

72,601

n/m

(72,601

)

-100.0

%

Allowance for loan losses, acquired loans (1)

(815

)

n/m

815

-100.0

%

Net acquired loans

71,786

n/m

(71,786

)

-100.0

%

Net LHFI and acquired loans

9,707,218

9,725,718

9,323,137

(18,500

)

-0.2

%

384,081

4.1

%

Premises and equipment, net

194,278

192,722

189,791

1,556

0.8

%

4,487

2.4

%

Mortgage servicing rights

66,464

61,613

79,394

4,851

7.9

%

(12,930

)

-16.3

%

Goodwill

385,270

385,270

379,627

0.0

%

5,643

1.5

%

Identifiable intangible assets

7,390

8,142

7,343

(752

)

-9.2

%

47

0.6

%

Other real estate

11,651

16,248

29,248

(4,597

)

-28.3

%

(17,597

)

-60.2

%

Operating lease right-of-use assets

30,901

30,508

31,182

393

1.3

%

(281

)

-0.9

%

Other assets

609,142

609,922

532,389

(780

)

-0.1

%

76,753

14.4

%

Total assets

$

16,551,840

$

15,558,162

$

13,497,877

$

993,678

6.4

%

$

3,053,963

22.6

%

Deposits:

Noninterest-bearing

$

4,349,010

$

3,964,023

$

2,891,215

$

384,987

9.7

%

$

1,457,795

50.4

%

Interest-bearing

9,699,754

9,258,390

8,354,342

441,364

4.8

%

1,345,412

16.1

%

Total deposits

14,048,764

13,222,413

11,245,557

826,351

6.2

%

2,803,207

24.9

%

Fed funds purchased and repurchases

164,519

153,834

256,020

10,685

6.9

%

(91,501

)

-35.7

%

Other borrowings

168,252

178,599

85,396

(10,347

)

-5.8

%

82,856

97.0

%

Subordinated notes

122,921

122,921

n/m

122,921

n/m

Junior subordinated debt securities

61,856

61,856

61,856

0.0

%

0.0

%

ACL on off-balance sheet credit exposures (1)

38,572

39,659

(1,087

)

-2.7

%

38,572

n/m

Operating lease liabilities

32,290

31,838

32,354

452

1.4

%

(64

)

-0.2

%

Other liabilities

173,549

159,922

155,992

13,627

8.5

%

17,557

11.3

%

Total liabilities

14,810,723

13,848,121

11,837,175

962,602

7.0

%

2,973,548

25.1

%

Common stock

13,215

13,215

13,376

0.0

%

(161

)

-1.2

%

Capital surplus

233,120

231,836

256,400

1,284

0.6

%

(23,280

)

-9.1

%

Retained earnings

1,495,833

1,459,306

1,414,526

36,527

2.5

%

81,307

5.7

%

Accum other comprehensive income (loss),

net of tax

(1,051

)

5,684

(23,600

)

(6,735

)

n/m

22,549

95.5

%

Total shareholders' equity

1,741,117

1,710,041

1,660,702

31,076

1.8

%

80,415

4.8

%

Total liabilities and equity

$

16,551,840

$

15,558,162

$

13,497,877

$

993,678

6.4

%

$

3,053,963

22.6

%

(1) See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.

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, 2020

($ in thousands except per share data)

(unaudited)

Quarter Ended

Linked Quarter

Year over Year

INCOME STATEMENTS

12/31/2020

9/30/2020

12/31/2019

$ Change

% Change

$ Change

% Change

Interest and fees on LHFS & LHFI-FTE

$

96,453

$

97,429

$

111,383

$

(976

)

-1.0

%

$

(14,930

)

-13.4

%

Interest and fees on PPP loans

14,870

6,729

8,141

n/m

14,870

n/m

Interest and fees on acquired loans (1)

2,138

n/m

(2,138

)

-100.0

%

Interest on securities-taxable

9,998

12,542

12,884

(2,544

)

-20.3

%

(2,886

)

-22.4

%

Interest on securities-tax exempt-FTE

293

301

484

(8

)

-2.7

%

(191

)

-39.5

%

Interest on fed funds sold and reverse repurchases

1

1

(1

)

-100.0

%

(1

)

-100.0

%

Other interest income

249

331

896

(82

)

-24.8

%

(647

)

-72.2

%

Total interest income-FTE

121,863

117,333

127,786

4,530

3.9

%

(5,923

)

-4.6

%

Interest on deposits

6,363

7,437

17,716

(1,074

)

-14.4

%

(11,353

)

-64.1

%

Interest on fed funds purchased and repurchases

56

32

504

24

75.0

%

(448

)

-88.9

%

Other interest expense

1,127

688

826

439

63.8

%

301

36.4

%

Total interest expense

7,546

8,157

19,046

(611

)

-7.5

%

(11,500

)

-60.4

%

Net interest income-FTE

114,317

109,176

108,740

5,141

4.7

%

5,577

5.1

%

Provision for credit losses, LHFI (1)

(4,413

)

1,760

3,661

(6,173

)

n/m

(8,074

)

n/m

Provision for loan losses, acquired loans (1)

(2

)

n/m

2

100.0

%

Net interest income after provision-FTE

118,730

107,416

105,081

11,314

10.5

%

13,649

13.0

%

Service charges on deposit accounts

8,283

7,577

10,894

706

9.3

%

(2,611

)

-24.0

%

Bank card and other fees

9,107

8,843

8,192

264

3.0

%

915

11.2

%

Mortgage banking, net

28,155

36,439

7,914

(8,284

)

-22.7

%

20,241

n/m

Insurance commissions

10,196

11,562

9,364

(1,366

)

-11.8

%

832

8.9

%

Wealth management

7,838

7,679

7,763

159

2.1

%

75

1.0

%

Other, net

2,538

1,601

3,451

937

58.5

%

(913

)

-26.5

%

Total noninterest income

66,117

73,701

47,578

(7,584

)

-10.3

%

18,539

39.0

%

Salaries and employee benefits

69,660

67,342

62,319

2,318

3.4

%

7,341

11.8

%

Services and fees

22,327

20,992

19,500

1,335

6.4

%

2,827

14.5

%

Net occupancy-premises

6,616

7,000

6,461

(384

)

-5.5

%

155

2.4

%

Equipment expense

6,213

5,828

5,880

385

6.6

%

333

5.7

%

Other real estate expense, net

(812

)

1,203

1,491

(2,015

)

n/m

(2,303

)

n/m

Credit loss expense related to off-balance sheet

credit exposures (1)

(1,087

)

(3,004

)

1,917

63.8

%

(1,087

)

n/m

Other expense

15,890

14,598

14,376

1,292

8.9

%

1,514

10.5

%

Total noninterest expense

118,807

113,959

110,027

4,848

4.3

%

8,780

8.0

%

Income before income taxes and tax eq adj

66,040

67,158

42,632

(1,118

)

-1.7

%

23,408

54.9

%

Tax equivalent adjustment

2,939

2,969

3,149

(30

)

-1.0

%

(210

)

-6.7

%

Income before income taxes

63,101

64,189

39,483

(1,088

)

-1.7

%

23,618

59.8

%

Income taxes

11,884

9,749

5,537

2,135

21.9

%

6,347

n/m

Net income

$

51,217

$

54,440

$

33,946

$

(3,223

)

-5.9

%

$

17,271

50.9

%

Per share data

Earnings per share - basic

$

0.81

$

0.86

$

0.53

$

(0.05

)

-5.8

%

$

0.28

52.8

%

Earnings per share - diluted

$

0.81

$

0.86

$

0.53

$

(0.05

)

-5.8

%

$

0.28

52.8

%

Dividends per share

$

0.23

$

0.23

$

0.23

0.0

%

0.0

%

Weighted average shares outstanding

Basic

63,424,219

63,422,692

64,255,716

Diluted

63,616,767

63,581,964

64,435,276

Period end shares outstanding

63,424,526

63,423,820

64,200,111

(1) See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.

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, 2020

($ in thousands)

(unaudited)

Quarter Ended

Linked Quarter

Year over Year

NONPERFORMING ASSETS (1)

12/31/2020

9/30/2020

12/31/2019

$ Change

% Change

$ Change

% Change

Nonaccrual LHFI

Alabama

$

9,221

$

3,860

$

1,870

$

5,361

n/m

$

7,351

n/m

Florida

572

617

267

(45

)

-7.3

%

305

n/m

Mississippi (2)

35,015

35,617

41,493

(602

)

-1.7

%

(6,478

)

-15.6

%

Tennessee (3)

12,572

13,041

8,980

(469

)

-3.6

%

3,592

40.0

%

Texas

5,748

721

616

5,027

n/m

5,132

n/m

Total nonaccrual LHFI

63,128

53,856

53,226

9,272

17.2

%

9,902

18.6

%

Other real estate

Alabama

3,271

3,725

8,133

(454

)

-12.2

%

(4,862

)

-59.8

%

Florida

3,665

5,877

(3,665

)

-100.0

%

(5,877

)

-100.0

%

Mississippi (2)

8,330

8,718

14,919

(388

)

-4.5

%

(6,589

)

-44.2

%

Tennessee (3)

50

140

319

(90

)

-64.3

%

(269

)

-84.3

%

Texas

n/m

n/m

Total other real estate

11,651

16,248

29,248

(4,597

)

-28.3

%

(17,597

)

-60.2

%

Total nonperforming assets

$

74,779

$

70,104

$

82,474

$

4,675

6.7

%

$

(7,695

)

-9.3

%

LOANS PAST DUE OVER 90 DAYS (1)

LHFI

$

1,576

$

782

$

642

$

794

n/m

$

934

n/m

LHFS-Guaranteed GNMA serviced loans

(no obligation to repurchase)

$

119,409

$

121,281

$

41,648

$

(1,872

)

-1.5

%

$

77,761

n/m

Quarter Ended

Linked Quarter

Year over Year

ACL LHFI (1)(4)

12/31/2020

9/30/2020

12/31/2019

$ Change

% Change

$ Change

% Change

Beginning Balance

$

122,010

$

119,188

$

83,226

$

2,822

2.4

%

$

38,784

46.6

%

CECL adoption adjustments:

LHFI

n/m

n/m

Acquired loan transfers

n/m

n/m

Provision for credit losses

(4,413

)

1,760

3,661

(6,173

)

n/m

(8,074

)

n/m

Charge-offs

(2,797

)

(1,263

)

(4,619

)

(1,534

)

n/m

1,822

39.4

%

Recoveries

2,506

2,325

2,009

181

7.8

%

497

24.7

%

Net (charge-offs) recoveries

(291

)

1,062

(2,610

)

(1,353

)

n/m

2,319

88.9

%

Ending Balance

$

117,306

$

122,010

$

84,277

$

(4,704

)

-3.9

%

$

33,029

39.2

%

NET (CHARGE-OFFS) RECOVERIES (1)

Alabama

$

(1,011

)

$

117

$

(132

)

$

(1,128

)

n/m

$

(879

)

n/m

Florida

66

387

357

(321

)

-82.9

%

(291

)

-81.5

%

Mississippi (2)

332

442

(1,792

)

(110

)

-24.9

%

2,124

n/m

Tennessee (3)

303

42

(131

)

261

n/m

434

n/m

Texas

19

74

(912

)

(55

)

-74.3

%

931

n/m

Total net (charge-offs) recoveries

$

(291

)

$

1,062

$

(2,610

)

$

(1,353

)

n/m

$

2,319

-88.9

%

(1) Excludes PPP and acquired loans.

(2) Mississippi includes Central and Southern Mississippi Regions.

(3) Tennessee includes Memphis, Tennessee and Northern Mississippi Regions.

(4) See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.

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, 2020

($ in thousands)

(unaudited)

Quarter Ended

Year Ended

AVERAGE BALANCES

12/31/2020

9/30/2020

6/30/2020

3/31/2020

12/31/2019

12/31/2020

12/31/2019

Securities AFS-taxable

$

1,902,162

$

1,857,050

$

1,724,320

$

1,620,422

$

1,551,358

$

1,776,555

$

1,633,496

Securities AFS-nontaxable

5,206

5,973

9,827

22,056

23,300

10,737

29,948

Securities HTM-taxable

550,563

608,585

655,085

694,740

734,474

626,983

799,726

Securities HTM-nontaxable

24,752

25,508

25,538

25,673

25,703

25,366

26,874

Total securities

2,482,683

2,497,116

2,414,770

2,362,891

2,334,835

2,439,641

2,490,044

PPP loans

875,098

941,456

764,416

646,680

Loans (includes loans held for sale) (1)

10,231,671

10,162,379

9,908,132

9,678,174

9,467,437

9,996,192

9,302,037

Acquired loans (1)

77,797

88,903

Fed funds sold and reverse repurchases

303

301

113

164

184

221

9,529

Other earning assets

860,540

722,917

854,642

187,327

227,116

657,096

240,622

Total earning assets

14,450,295

14,324,169

13,942,073

12,228,556

12,107,369

13,739,830

12,131,135

ACL LHFI (1)

(124,088

)

(121,842

)

(103,006

)

(85,015

)

(86,211

)

(108,567

)

(83,559

)

Other assets

1,620,694

1,564,825

1,685,317

1,498,725

1,445,075

1,592,393

1,452,012

Total assets

$

15,946,901

$

15,767,152

$

15,524,384

$

13,642,266

$

13,466,233

$

15,223,656

$

13,499,588

Interest-bearing demand deposits

$

3,649,590

$

3,669,249

$

3,832,372

$

3,184,134

$

3,167,256

$

3,584,249

$

3,051,170

Savings deposits

4,350,783

4,416,046

4,180,540

3,646,936

3,448,899

4,149,860

3,650,178

Time deposits

1,436,677

1,507,348

1,578,737

1,617,307

1,663,741

1,534,673

1,783,928

Total interest-bearing deposits

9,437,050

9,592,643

9,591,649

8,448,377

8,279,896

9,268,782

8,485,276

Fed funds purchased and repurchases

170,474

84,077

105,696

247,513

164,754

151,805

110,915

Other borrowings

173,525

167,262

107,533

85,279

79,512

133,602

82,476

Subordinated notes

42,828

10,766

Junior subordinated debt securities

61,856

61,856

61,856

61,856

61,856

61,856

61,856

Total interest-bearing liabilities

9,885,733

9,905,838

9,866,734

8,843,025

8,586,018

9,626,811

8,740,523

Noninterest-bearing deposits

4,100,849

3,921,867

3,645,761

2,910,951

3,017,824

3,646,860

2,918,836

Other liabilities

235,284

244,544

346,173

248,220

205,786

268,398

218,216

Total liabilities

14,221,866

14,072,249

13,858,668

12,002,196

11,809,628

13,542,069

11,877,575

Shareholders' equity

1,725,035

1,694,903

1,665,716

1,640,070

1,656,605

1,681,587

1,622,013

Total liabilities and equity

$

15,946,901

$

15,767,152

$

15,524,384

$

13,642,266

$

13,466,233

$

15,223,656

$

13,499,588

(1) See Note 1 – Recently Effective Accounting Pronouncements in the Notes to Consolidated Financials for additional details.

See Notes to Consolidated Financials

TRUSTMARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL INFORMATION

December 31, 2020

($ in thousands)

(unaudited)

PERIOD END BALANCES

12/31/2020

9/30/2020

6/30/2020

3/31/2020

12/31/2019

Cash and due from banks

$

1,952,504

$

564,588

$

1,026,640

$

404,341

$

358,916

Fed funds sold and reverse repurchases