Trustmark Corporation (NASDAQ:TRMK) announced net income available to common shareholders of $106.8 million for the year ended December 31, 2011, which represented diluted earnings per common share of $1.66, an increase of 5.7% compared to figures one year earlier. Trustmark's performance during 2011 produced a return on average tangible common equity of 12.25% and a return on average assets of 1.11%. In the fourth quarter of 2011, Trustmark's net income available to common shareholders totaled $24.3 million, which represented diluted earnings per common share of $0.38. Trustmark's Board of Directors declared a quarterly cash dividend of $0.23 per common share payable March 15, 2012, to shareholders of record on March 1, 2012.

Printer friendly version of earnings release with consolidated financial statements and notes: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=50142491&lang=en

Gerard R. Host, President and CEO, stated, "Trustmark achieved strong financial performance in 2011, particularly in light of the current economic and regulatory environments. We experienced significant improvement in credit quality as reflected by a 17.5% reduction in nonperforming assets, a 40.0% reduction in provisioning for loan losses, and a 43.6% reduction in net charge-offs relative to the prior year. We also made additional inroads in building and strengthening customer relationships as our deposit base increased $521.8 million, or 7.4%, to $7.6 billion at year end 2011.

"We remained active on the acquisition front in 2011. In April, we completed an FDIC assisted transaction of a 90 year-old financial institution with $204.3 million in deposits in Carthage, MS. In November, we announced a merger with Bay Bank & Trust Company, a 76 year-old financial institution with assets of $247.0 million in Panama City, FL. We anticipate this transaction will close during the first quarter of 2012.

"Thanks to our dedicated associates, solid profitability and strong capital base, Trustmark remains well-positioned to continue meeting the needs of our customers and take advantage of opportunities to create value for our shareholders."

Credit Quality

  • Classified and criticized loans declined $30.1 million and $17.9 million, respectively, relative to the prior quarter
  • ORE levels declined $10.5 million from the prior quarter
  • Net charge-offs totaled $6.0 million in the fourth quarter and represented 0.40% of average loans

During the fourth quarter, nonperforming loans, excluding covered loans (loans with FDIC loss share agreements), increased $10.9 million relative to the prior quarter to total $110.5 million, or 1.82% of total loans. This increase is principally attributable to two credits in the Texas market, which are well-secured based upon current appraisals. Nonperforming loans in Trustmark's Florida market declined to $23.0 million, marking seven consecutive quarters of improvement. Foreclosed other real estate, excluding covered ORE (ORE covered by FDIC loss share agreements), decreased $10.5 million, or 11.8%, from the prior quarter to total $79.1 million. Collectively, nonperforming assets totaled $189.5 million at December 31, 2011. Trustmark continued to make progress in the resolution of nonperforming assets as balances during the last 12 months decreased $40.1 million, or 17.5%, including a $33.2 million reduction in the Florida market.

Net charge-offs during the fourth quarter totaled $6.0 million and represented 0.40% of average loans, excluding covered loans. The provision for loan losses, excluding covered loans, totaled $6.1 million. During the fourth quarter, Trustmark experienced a $30.1 million, or 8.7%, decline in classified loans and a $17.9 million, or 4.3%, decline in criticized loans relative to the prior quarter. Relative to figures one year earlier, classified loan balances decreased $77.3 million, or 19.7%, while criticized loan balances decreased $80.7 million, or 16.8%.

Allocation of Trustmark's $89.5 million allowance for loan losses, excluding covered loans, represented 1.91% of commercial loans and 0.76% of consumer and home mortgage loans, resulting in an allowance to total loans of 1.53% as of December 31, 2011. The allowance for loan losses represented 194.2% of nonperforming loans, excluding impaired loans. All of these ratios exclude covered loans and covered other real estate.

Trustmark continued to make significant progress in the resolution of its construction and land development portfolio in Florida. During the last 12 months, this portfolio was reduced by 27.7% to total $95.5 million. At December 31, 2011, the associated reserve for loan losses on this portfolio totaled $10.5 million, or 11.0%. Trustmark remains focused on managing credit risks resulting from current economic and real estate market conditions.

Capital Strength

  • Tangible common equity to tangible assets totaled 9.66%
  • Total risk-based capital ratio totaled 16.67%

Consistent profitability of Trustmark's diversified financial services business, coupled with prudent balance sheet management, continued to be reflected in its solid capital position. At December 31, 2011, tangible common equity totaled $909.9 million and represented 9.66% of tangible assets while the total risk-based capital ratio was 16.67%. Trustmark's strong capital base provides strategic flexibility to support organic growth as well as acquisition opportunities that strengthen the value of the franchise.

Balance Sheet Management

  • Total loans increased $71.5 million relative to the prior quarter
  • Average earning assets increased to $8.6 billion in the fourth quarter
  • Net interest income (FTE) totaled $92.7 million in the fourth quarter

Loans, including loans held for investment and covered loans, totaled $5.9 billion at December 31, 2011, an increase of $71.5 million from the prior quarter. During the fourth quarter, Trustmark's commercial and industrial loan portfolio expanded $56.8 million while 1-4 family residential mortgage loans and other loans increased $42.7 million and $21.5 million, respectively. This growth was offset in part by a $22.0 million reduction in indirect auto lending, a $14.5 million decline in nonfarm, nonresidential lending, and a $7.6 million reduction in construction and land development lending.

Average earning assets during the fourth quarter increased $86.3 million, or 1.0%, relative to the prior quarter to total $8.6 billion; growth was attributable to an increase in investment securities and loans. Average deposits decreased $80.5 million, or 1.1%, relative to the prior quarter to total $7.5 billion as growth in noninterest-bearing deposits was more than offset by a seasonal decrease in public funds. Average noninterest-bearing deposits increased 4.7% to represent 25.2% of average deposits in the fourth quarter of 2011.

Prudent asset and liability management, including disciplined loan and deposit pricing, continued to produce solid net interest income and a strong net interest margin. Net interest income (FTE) totaled $92.7 million during the fourth quarter, an increase of $3.4 million from the prior quarter, which resulted in a net interest margin of 4.28%. Net interest income during the fourth quarter included $3.8 million of recovery and accretion resulting from improved cash flows on acquired loans. Excluding this recovery and accretion, the net interest margin was 4.10% during the fourth quarter.

Noninterest Income

  • Noninterest income totaled $159.9 million in 2011 and represented 31.4% of total revenue
  • Tax credit investments reduced the effective tax rate to 24.5% in the fourth quarter

Noninterest income totaled $32.8 million in the fourth quarter, a decrease of $11.5 million from the prior quarter. A significant portion of the decline occurred in other noninterest income and was attributable to a $4.2 million write-down of the FDIC indemnification asset resulting from improved cash flow projections on covered loans as well as an increase in partnership amortization of $1.3 million related to tax credit investments, which reduced the Corporation's effective tax rate during the quarter by approximately 3.5%. In addition, mortgage banking performance included a reduction in the net hedge ineffectiveness of mortgage servicing rights of $3.1 million while insurance revenue experienced a seasonal reduction of $1.4 million. Collectively, these items reduced noninterest income by approximately $10.0 million.

Trustmark continued to achieve solid financial performance from its diverse financial services businesses. During the fourth quarter, mortgage production exceeded $420 million, a 23.5% increase relative to the prior quarter. Mortgage banking income totaled $6.0 million during the fourth quarter and continued to reflect stable mortgage servicing income and increased secondary marketing gains. Insurance revenue totaled $6.1 million in the fourth quarter while income from wealth management services totaled $5.2 million.

Noninterest Expense

  • Noninterest expense remained well-controlled, increasing 1.3% during 2011
  • ORE/Foreclosure expense declined 50.9% from the prior quarter to $2.8 million

Total noninterest expense in 2011 increased $4.2 million, or 1.3%, relative to the prior year. Salary and employee benefit expense increased $4.0 million, or 2.3%, from the prior year due in part to the purchase of Heritage Banking Group from the FDIC in April 2011. During the fourth quarter of 2011, noninterest expense declined $2.5 million, or 2.9%, from the prior quarter to total $83.0 million, principally due to a $2.9 million reduction in ORE/Foreclosure expense.

Trustmark continued to make prudent investments and reallocate resources to support revenue growth and profitability. During the fourth quarter, Trustmark opened a new mortgage banking office in Birmingham, AL, as well as a new banking center in Starkville, MS. In addition, a new corporate office was opened in Tupelo, MS, consolidating existing retail, commercial and mortgage banking as well as wealth management and insurance services into a convenient location that complements Trustmark's other Tupelo locations.

ADDITIONAL INFORMATION

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, January 25, 2012, at 10:00 a.m. Central Time to discuss the Corporation's financial results. Interested parties may listen to the conference call by dialing (877) 317-6789, passcode 10008303, 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 2, 2012, in archived format at the same web address or by calling (877) 344-7529, passcode 10008303.

Trustmark is a financial services company providing banking and financial solutions through over 150 offices in 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 in this report 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 the extent and duration of the current volatility in the credit and financial markets, 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 and 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, 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, 2011
($ in thousands)
(unaudited)
           
Linked QuarterYear over Year

QUARTERLY AVERAGE BALANCES

   12/31/2011     9/30/2011     12/31/2010  

$Change

% Change

$Change

% Change
Securities AFS-taxable $ 2,241,361 $ 2,150,117 $ 1,817,996 $ 91,244 4.2 % $ 423,365 23.3 %
Securities AFS-nontaxable 164,057 170,714 140,139 (6,657 ) -3.9 % 23,918 17.1 %
Securities HTM-taxable 41,106 52,868 121,278 (11,762 ) -22.2 % (80,172 ) -66.1 %
Securities HTM-nontaxable   22,664     24,062     33,138     (1,398 ) -5.8 %   (10,474 ) -31.6 %
Total securities   2,469,188     2,397,761     2,112,551     71,427   3.0 %   356,637   16.9 %
Loans (including loans held for sale) 5,999,221 5,985,730 6,199,875 13,491 0.2 % (200,654 ) -3.2 %
Covered loans 77,934 83,811 - (5,877 ) -7.0 % 77,934 n/m
Fed funds sold and rev repos 10,516 5,801 10,766 4,715 81.3 % (250 ) -2.3 %
Other earning assets   34,859     32,327     41,359     2,532   7.8 %   (6,500 ) -15.7 %
Total earning assets   8,591,718     8,505,430     8,364,551     86,288   1.0 %   227,167   2.7 %
Allowance for loan losses (90,857 ) (88,888 ) (96,559 ) (1,969 ) 2.2 % 5,702 -5.9 %
Cash and due from banks 221,278 216,134 207,874 5,144 2.4 % 13,404 6.4 %
Other assets   914,468     939,780     888,666     (25,312 ) -2.7 %   25,802   2.9 %
Total assets $ 9,636,607   $ 9,572,456   $ 9,364,532   $ 64,151   0.7 % $ 272,075   2.9 %
 
Interest-bearing demand deposits $ 1,511,422 $ 1,558,318 $ 1,347,252 $ (46,896 ) -3.0 % $ 164,170 12.2 %
Savings deposits 2,067,431 2,133,437 1,794,352 (66,006 ) -3.1 % 273,079 15.2 %
Time deposits less than $100,000 1,212,190 1,232,374 1,235,529 (20,184 ) -1.6 % (23,339 ) -1.9 %
Time deposits of $100,000 or more   844,565     877,951     932,744     (33,386 ) -3.8 %   (88,179 )

-9.5

%

Total interest-bearing deposits 5,635,608 5,802,080 5,309,877 (166,472 ) -2.9 % 325,731 6.1 %
Fed funds purchased and repos 526,740 462,294 701,978 64,446 13.9 % (175,238 ) -25.0 %
Short-term borrowings 141,600 85,678 254,442 55,922 65.3 % (112,842 ) -44.3 %
Long-term FHLB advances 197 2,413 - (2,216 ) -91.8 % 197 n/m
Subordinated notes 49,833 49,825 49,801 8 0.0 % 32 0.1 %
Junior subordinated debt securities   61,856     61,856     64,546     -   0.0 %   (2,690 ) -4.2 %
Total interest-bearing liabilities 6,415,834 6,464,146 6,380,644 (48,312 ) -0.7 % 35,190 0.6 %
Noninterest-bearing deposits 1,897,398 1,811,472 1,706,089 85,926 4.7 % 191,309 11.2 %
Other liabilities   100,274     85,404     117,741     14,870   17.4 %   (17,467 ) -14.8 %
Total liabilities 8,413,506 8,361,022 8,204,474 52,484 0.6 % 209,032 2.5 %
Shareholders' equity   1,223,101     1,211,434     1,160,058     11,667   1.0 %   63,043   5.4 %
Total liabilities and equity $ 9,636,607   $ 9,572,456   $ 9,364,532   $ 64,151   0.7 % $ 272,075   2.9 %
 
 
 
 
Linked QuarterYear over Year

PERIOD END BALANCES

   12/31/2011     9/30/2011     12/31/2010   $Change% Change$Change% Change
Cash and due from banks $ 202,625 $ 245,132 $ 161,544 $ (42,507 ) -17.3 % $ 41,081 25.4 %
Fed funds sold and rev repos 9,258 8,810 11,773 448 5.1 % (2,515 ) -21.4 %
Securities available for sale 2,468,993 2,476,905 2,177,249 (7,912 ) -0.3 % 291,744 13.4 %
Securities held to maturity 57,705 71,046 140,847 (13,341 ) -18.8 % (83,142 ) -59.0 %
Loans held for sale (LHFS) 216,553 210,269 153,044 6,284 3.0 % 63,509 41.5 %
Loans held for investment (LHFI), excluding covered loans 5,857,484 5,783,712 6,060,242 73,772 1.3 % (202,758 ) -3.3 %
Allowance for loan losses   (89,518 )   (89,463 )   (93,510 )   (55 ) 0.1 %   3,992   -4.3 %
Net LHFI, excluding covered loans 5,767,966 5,694,249 5,966,732 73,717 1.3 % (198,766 ) -3.3 %
Covered loans 76,804 79,064 - (2,260 ) -2.9 % 76,804 n/m
Allowance for loan losses, covered loans   (502 )   -     -     (502 ) n/m   (502 ) n/m
Net covered loans   76,302     79,064     -     (2,762 ) -3.5 %   76,302   n/m
Net LHFI and covered loans 5,844,268 5,773,313 5,966,732 70,955 1.2 % (122,464 ) -2.1 %
Premises and equipment, net 142,582 141,639 142,289 943 0.7 % 293 0.2 %
Mortgage servicing rights 43,274 43,659 51,151 (385 ) -0.9 % (7,877 ) -15.4 %
Goodwill 291,104 291,104 291,104 - 0.0 % - 0.0 %
Identifiable intangible assets 14,076 14,861 16,306 (785 ) -5.3 % (2,230 ) -13.7 %
Other real estate, excluding covered other real estate 79,053 89,597 86,704 (10,544 ) -11.8 % (7,651 ) -8.8 %
Covered other real estate 6,331 7,197 - (866 ) -12.0 % 6,331 n/m
FDIC indemnification asset 28,348 33,436 - (5,088 ) -15.2 % 28,348 n/m
Other assets   322,837     298,953     355,159     23,884   8.0 %   (32,322 ) -9.1 %
Total assets $ 9,727,007   $ 9,705,921   $ 9,553,902   $ 21,086   0.2 % $ 173,105   1.8 %
 
Deposits:
Noninterest-bearing $ 2,033,442 $ 1,871,040 $ 1,636,625 $ 162,402 8.7 % $ 396,817 24.2 %
Interest-bearing   5,532,921     5,698,684     5,407,942     (165,763 ) -2.9 %   124,979   2.3 %
Total deposits 7,566,363 7,569,724 7,044,567 (3,361 ) 0.0 % 521,796 7.4 %
Fed funds purchased and repos 604,500 576,672 700,138 27,828 4.8 % (95,638 ) -13.7 %
Short-term borrowings 87,628 98,887 425,343 (11,259 ) -11.4 % (337,715 ) -79.4 %
Long-term FHLB advances - 741 - (741 ) -100.0 % - n/m
Subordinated notes 49,839 49,831 49,806 8 0.0 % 33 0.1 %
Junior subordinated debt securities 61,856 61,856 61,856 - 0.0 % - 0.0 %
Other liabilities   141,784     126,604     122,708     15,180   12.0 %   19,076   15.5 %
Total liabilities   8,511,970     8,484,315     8,404,418     27,655   0.3 %   107,552   1.3 %
Common stock 13,364 13,359 13,318 5 0.0 % 46 0.3 %
Capital surplus 266,026 264,750 256,675 1,276 0.5 % 9,351 3.6 %
Retained earnings 932,526 923,891 890,917 8,635 0.9 % 41,609 4.7 %

Accum other comprehensive income (loss), net of tax

  3,121     19,606     (11,426 )   (16,485 ) -84.1 %   14,547   n/m
Total shareholders' equity   1,215,037     1,221,606     1,149,484     (6,569 ) -0.5 %   65,553   5.7 %
Total liabilities and equity $ 9,727,007   $ 9,705,921   $ 9,553,902   $ 21,086   0.2 % $ 173,105   1.8 %
 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 
 
 
 
 
 
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2011
($ in thousands except per share data)
(unaudited)
 
 
Quarter EndedLinked QuarterYear over Year

INCOME STATEMENTS

   12/31/2011     9/30/2011     12/31/2010   $Change% Change$Change% Change
Interest and fees on loans-FTE $ 82,230 $ 79,256 $ 82,664 $ 2,974 3.8 % $ (434 ) -0.5 %
Interest on securities-taxable 17,362 18,115 19,076 (753 ) -4.2 % (1,714 ) -9.0 %
Interest on securities-tax exempt-FTE 2,133 2,155 2,169 (22 ) -1.0 % (36 ) -1.7 %
Interest on fed funds sold and rev repos 10 5 12 5 100.0 % (2 ) -16.7 %
Other interest income   327     329     328     (2 ) -0.6 %   (1 ) -0.3 %
Total interest income-FTE   102,062     99,860     104,249     2,202   2.2 %   (2,187 ) -2.1 %
Interest on deposits 7,728 8,911 10,359 (1,183 ) -13.3 % (2,631 ) -25.4 %
Interest on fed funds pch and repos 195 216 403 (21 ) -9.7 % (208 ) -51.6 %
Other interest expense   1,418     1,386     1,535     32   2.3 %   (117 ) -7.6 %
Total interest expense   9,341     10,513     12,297     (1,172 ) -11.1 %   (2,956 ) -24.0 %
Net interest income-FTE 92,721 89,347 91,952 3,374 3.8 % 769 0.8 %
Provision for loan losses, excluding covered loans 6,073 7,978 11,794 (1,905 ) -23.9 % (5,721 ) -48.5 %
Provision for covered loan losses   624     -     -     624   n/m   624   n/m
Net interest income after provision-FTE   86,024     81,369     80,158     4,655   5.7 %   5,866   7.3 %
Service charges on deposit accounts 13,269 13,680 13,493 (411 ) -3.0 % (224 ) -1.7 %
Insurance commissions 6,076 7,516 6,224 (1,440 ) -19.2 % (148 ) -2.4 %
Wealth management 5,223 5,993 5,760 (770 ) -12.8 % (537 ) -9.3 %
Bank card and other fees 7,112 7,033 6,482 79 1.1 % 630 9.7 %
Mortgage banking, net 6,038 9,783 4,502 (3,745 ) -38.3 % 1,536 34.1 %
Other, net   (4,928 )   234     2,070     (5,162 ) n/m   (6,998 ) n/m
Nonint inc-excl sec gains, net 32,790 44,239 38,531 (11,449 ) -25.9 % (5,741 ) -14.9 %
Security (losses) gains, net   (11 )   33     101     (44 ) n/m   (112 ) n/m
Total noninterest income   32,779     44,272     38,632     (11,493 ) -26.0 %   (5,853 ) -15.2 %
Salaries and employee benefits 45,616 44,701 44,412 915 2.0 % 1,204 2.7 %
Services and fees 11,323 11,485 10,462 (162 ) -1.4 % 861 8.2 %
Net occupancy-premises 5,038 5,093 4,896 (55 ) -1.1 % 142 2.9 %
Equipment expense 5,139 5,038 4,229 101 2.0 % 910 21.5 %
FDIC assessment expense 1,484 1,812 2,942 (328 ) -18.1 % (1,458 ) -49.6 %
ORE/Foreclosure expense 2,760 5,616 3,310 (2,856 ) -50.9 % (550 ) -16.6 %
Other expense   11,643     11,736     10,186     (93 ) -0.8 %   1,457   14.3 %
Total noninterest expense   83,003     85,481     80,437     (2,478 ) -2.9 %   2,566   3.2 %
Income before income taxes and tax eq adj 35,800 40,160 38,353 (4,360 ) -10.9 % (2,553 ) -6.7 %
Tax equivalent adjustment   3,663     3,667     3,400     (4 ) -0.1 %   263   7.7 %
Income before income taxes 32,137 36,493 34,953 (4,356 ) -11.9 % (2,816 ) -8.1 %
Income taxes   7,879     9,525     9,793     (1,646 ) -17.3 %   (1,914 ) -19.5 %
Net income available to common shareholders $ 24,258   $ 26,968   $ 25,160   $ (2,710 ) -10.0 % $ (902 ) -3.6 %
 
 
Per common share data
Earnings per share - basic $ 0.38   $ 0.42   $ 0.39   $ (0.04 ) -9.5 % $ (0.01 ) -2.6 %
 
Earnings per share - diluted $ 0.38   $ 0.42   $ 0.39   $ (0.04 ) -9.5 % $ (0.01 ) -2.6 %
 
Dividends per share $ 0.23   $ 0.23   $ 0.23   $ -   0.0 % $ -   0.0 %
 
Weighted average common shares outstanding
Basic   64,122,188     64,119,235     63,892,362  
 
Diluted   64,330,242     64,310,453     64,105,064  
 
Period end common shares outstanding   64,142,498     64,119,235     63,917,591  
 

OTHER FINANCIAL DATA

Return on common equity 7.87 % 8.83 % 8.60 %
Return on average tangible common equity 10.70 % 12.04 % 11.96 %
Return on equity 7.87 % 8.83 % 8.60 %
Return on assets 1.00 % 1.12 % 1.07 %
Interest margin - Yield - FTE 4.71 % 4.66 % 4.94 %
Interest margin - Cost 0.43 % 0.49 % 0.58 %
Net interest margin - FTE 4.28 % 4.17 % 4.36 %
Efficiency ratio 66.13 % 63.99 % 61.65 %
Full-time equivalent employees 2,537 2,542 2,490
 

COMMON STOCK PERFORMANCE

Market value-Close $ 24.29 $ 18.15 $ 24.84
Common book value $ 18.94 $ 19.05 $ 17.98
Tangible common book value $ 14.18 $ 14.28 $ 13.17
 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 
 
 
 
 
 
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2011
($ in thousands)
(unaudited)
 
Quarter EndedLinked QuarterYear over Year

NONPERFORMING ASSETS (1)

   12/31/2011     9/30/2011     12/31/2010   $Change% Change$Change% Change
Nonaccrual loans
Florida $ 23,002 $ 27,263 $ 53,773 $ (4,261 ) -15.6 % $ (30,771 ) -57.2 %
Mississippi (2) 46,746 44,825 39,803 1,921 4.3 % 6,943 17.4 %
Tennessee (3) 15,791 14,575 14,703 1,216 8.3 % 1,088 7.4 %
Texas   24,919     12,915     34,644     12,004   92.9 %   (9,725 ) -28.1 %
Total nonaccrual loans 110,458 99,578 142,923 10,880 10.9 % (32,465 ) -22.7 %
Other real estate
Florida 29,963 29,949 32,370 14 0.0 % (2,407 ) -7.4 %
Mississippi (2) 19,483 21,027 24,181 (1,544 ) -7.3 % (4,698 ) -19.4 %
Tennessee (3) 16,879 17,940 16,407 (1,061 ) -5.9 % 472 2.9 %
Texas   12,728     20,681     13,746     (7,953 ) -38.5 %   (1,018 ) -7.4 %
Total other real estate   79,053     89,597     86,704     (10,544 ) -11.8 %   (7,651 ) -8.8 %
Total nonperforming assets $ 189,511   $ 189,175   $ 229,627   $ 336   0.2 % $ (40,116 ) -17.5 %
 

LOANS PAST DUE OVER 90 DAYS (4)

LHFI $ 4,230   $ 3,166   $ 3,608   $ 1,064   33.6 % $ 622   17.2 %
 
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase) $ 39,379   $ 32,956   $ 15,777   $ 6,423   19.5 % $ 23,602   n/m
 
 
 
 
Quarter EndedLinked QuarterYear over Year

ALLOWANCE FOR LOAN LOSSES

   12/31/2011     9/30/2011     12/31/2010   $Change% Change$Change% Change
Beginning Balance $ 89,463 $ 86,846 $ 94,458 $ 2,617 3.0 % $ (4,995 ) -5.3 %
Provision for loan losses 6,073 7,978 11,794 (1,905 ) -23.9 % (5,721 ) -48.5 %
Charge-offs (8,457 ) (8,675 ) (15,883 ) 218 -2.5 % 7,426 -46.8 %
Recoveries   2,439     3,314     3,141     (875 ) -26.4 %   (702 ) -22.3 %
Net charge-offs   (6,018 )   (5,361 )   (12,742 )   (657 ) 12.3 %   6,724   -52.8 %
Ending Balance $ 89,518   $ 89,463   $ 93,510   $ 55   0.1 % $ (3,992 ) -4.3 %
 

PROVISION FOR LOAN LOSSES

 `
Florida $ 4,797 $ 3,046 $ 7,473 $ 1,751 57.5 % $ (2,676 ) -35.8 %
Mississippi (2) 3,783 3,732 2,673 51 1.4 % 1,110 41.5 %
Tennessee (3) (885 ) (105 ) 910 (780 ) n/m (1,795 ) n/m
Texas   (1,622 )   1,305     738     (2,927 ) n/m   (2,360 ) n/m
Total provision for loan losses $ 6,073   $ 7,978   $ 11,794   $ (1,905 ) -23.9 % $ (5,721 ) -48.5 %
 

NET CHARGE-OFFS

Florida $ 2,576 $ 2,909 $ 4,830 $ (333 ) -11.4 % $ (2,254 ) -46.7 %
Mississippi (2) 2,556 1,988 4,422 568 28.6 % (1,866 ) -42.2 %
Tennessee (3) 773 499 1,646 274 54.9 % (873 ) -53.0 %
Texas   113     (35 )   1,844     148   n/m   (1,731 ) -93.9 %
Total net charge-offs $ 6,018   $ 5,361   $ 12,742   $ 657   12.3 % $ (6,724 ) -52.8 %
 

CREDIT QUALITY RATIOS (1)

Net charge offs/average loans 0.40 % 0.36 % 0.82 %
Provision for loan losses/average loans 0.40 % 0.53 % 0.75 %
Nonperforming loans/total loans (incl LHFS) 1.82 % 1.66 % 2.30 %
Nonperforming assets/total loans (incl LHFS) 3.12 % 3.16 % 3.70 %
Nonperforming assets/total loans (incl LHFS) +ORE 3.08 % 3.11 % 3.64 %
ALL/total loans (excl LHFS) 1.53 % 1.55 % 1.54 %
ALL-commercial/total commercial loans 1.91 % 1.94 % 1.94 %
ALL-consumer/total consumer and home mortgage loans 0.76 % 0.76 % 0.78 %
ALL/nonperforming loans 81.04 % 89.84 % 65.43 %
ALL/nonperforming loans -
(excl impaired loans) 194.19 % 248.82 % 188.11 %
 

CAPITAL RATIOS

Total equity/total assets 12.49 % 12.59 % 12.03 %
Common equity/total assets 12.49 % 12.59 % 12.03 %
Tangible common equity/tangible assets 9.66 % 9.74 % 9.11 %
Tangible common equity/risk-weighted assets 13.83 % 14.04 % 12.62 %
Tier 1 leverage ratio 10.43 % 10.38 % 10.14 %
Tier 1 common risk-based capital ratio 13.90 % 13.84 % 12.87 %
Tier 1 risk-based capital ratio 14.81 % 14.76 % 13.77 %
Total risk-based capital ratio 16.67 % 16.78 % 15.77 %
 
(1) - Excludes Covered Assets (Loans and Other Real Estate)
(2) - Mississippi includes Central and Southern Mississippi Regions
(3) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions
(4) - Excludes Covered Loans
n/m - percentage changes greater than +/- 100% are considered not meaningful
 
 
 
 
 
 
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2011
($ in thousands)
(unaudited)
             
 
Quarter EndedYear Ended

AVERAGE BALANCES

   12/31/2011     9/30/2011     6/30/2011     3/31/2011     12/31/2010     12/31/2011     12/31/2010  
Securities AFS-taxable $ 2,241,361 $ 2,150,117 $ 2,142,978 $ 2,050,502 $ 1,817,996 $ 2,146,773 $ 1,643,995
Securities AFS-nontaxable 164,057 170,714 151,471 144,921 140,139 157,879 117,116
Securities HTM-taxable 41,106 52,868 73,739 97,710 121,278 66,164 151,361
Securities HTM-nontaxable   22,664     24,062     25,797     27,099     33,138     24,891     39,787  
Total securities   2,469,188     2,397,761     2,393,985     2,320,232     2,112,551     2,395,707     1,952,259  
Loans (including loans held for sale) 5,999,221 5,985,730 6,044,232 6,107,025 6,199,875 6,033,624 6,285,443
Covered loans 77,934 83,811 77,858 - - 60,180 -
Fed funds sold and rev repos 10,516 5,801 6,807 8,359 10,766 7,871 9,274
Other earning assets   34,859     32,327     32,028     47,851     41,359     36,719     39,954  
Total earning assets   8,591,718     8,505,430     8,554,910     8,483,467     8,364,551     8,534,101     8,286,930  
Allowance for loan losses (90,857 ) (88,888 ) (94,771 ) (96,065 ) (96,559 ) (92,621 ) (102,499 )
Cash and due from banks 221,278 216,134 216,483 222,380 207,874 219,058 211,632
Other assets   914,468     939,780     937,503     899,524     888,666     922,905     895,764  
Total assets $ 9,636,607   $ 9,572,456   $ 9,614,125   $ 9,509,306   $ 9,364,532   $ 9,583,443   $ 9,291,827  
 
Interest-bearing demand deposits $ 1,511,422 $ 1,558,318 $ 1,579,894 $ 1,465,390 $ 1,347,252 $ 1,528,963 $ 1,322,382
Savings deposits 2,067,431 2,133,437 2,277,220 2,045,874 1,794,352 2,131,057 1,925,159
Time deposits less than $100,000 1,212,190 1,232,374 1,255,496 1,210,219 1,235,529 1,227,588 1,293,544
Time deposits of $100,000 or more   844,565     877,951     904,106     876,975     932,744     875,816     973,062  
Total interest-bearing deposits 5,635,608 5,802,080 6,016,716 5,598,458 5,309,877 5,763,424 5,514,147
Fed funds purchased and repos 526,740 462,294 396,618 647,881 701,978 507,925 580,427
Short-term borrowings 141,600 85,678 92,077 254,451 254,442 142,984 209,550
Long-term FHLB advances 197 2,413 2,333 - - 1,240 22,441
Subordinated notes 49,833 49,825 49,817 49,809 49,801 49,821 49,789
Junior subordinated debt securities   61,856     61,856     61,856     61,856     64,546     61,856     68,703  
Total interest-bearing liabilities 6,415,834 6,464,146 6,619,417 6,612,455 6,380,644 6,527,250 6,445,057
Noninterest-bearing deposits 1,897,398 1,811,472 1,714,778 1,620,554 1,706,089 1,761,946 1,602,187
Other liabilities   100,274     85,404     98,154     116,399     117,741     99,974     100,102  
Total liabilities 8,413,506 8,361,022 8,432,349 8,349,408 8,204,474 8,389,170 8,147,346
Shareholders' equity   1,223,101     1,211,434     1,181,776     1,159,898     1,160,058     1,194,273     1,144,481  
Total liabilities and equity $ 9,636,607   $ 9,572,456   $ 9,614,125   $ 9,509,306   $ 9,364,532   $ 9,583,443   $ 9,291,827  
 
 

PERIOD END BALANCES

   12/31/2011     9/30/2011     6/30/2011     3/31/2011     12/31/2010  
Cash and due from banks $ 202,625 $ 245,132 $ 221,853 $ 193,087 $ 161,544
Fed funds sold and rev repos 9,258 8,810 4,576 1,726 11,773
Securities available for sale 2,468,993 2,476,905 2,399,042 2,309,704 2,177,249
Securities held to maturity 57,705 71,046 87,923 110,054 140,847
Loans held for sale (LHFS) 216,553 210,269 123,244 112,981 153,044
Loans held for investment (LHFI), excluding covered loans 5,857,484 5,783,712 5,906,316 5,964,089 6,060,242
Allowance for loan losses   (89,518 )   (89,463 )   (86,846 )   (93,398 )   (93,510 )
Net LHFI, excluding covered loans 5,767,966 5,694,249 5,819,470 5,870,691 5,966,732
Covered loans 76,804 79,064 88,558 - -
Allowance for loan losses, covered loans   (502 )   -     -     -     -  
Net covered loans   76,302     79,064     88,558     -     -  
Net LHFI and covered loans 5,844,268 5,773,313 5,908,028 5,870,691 5,966,732
Premises and equipment, net 142,582 141,639 140,640 141,524 142,289
Mortgage servicing rights 43,274 43,659 50,111 53,598 51,151
Goodwill 291,104 291,104 291,104 291,104 291,104
Identifiable intangible assets 14,076 14,861 15,651 15,532 16,306
Other real estate, excluding covered other real estate 79,053 89,597 89,999 89,198 86,704
Covered other real estate 6,331 7,197 7,485 - -
FDIC indemnification asset 28,348 33,436 33,327 - -
Other assets   322,837     298,953     325,468     325,263     355,159  
Total assets $ 9,727,007   $ 9,705,921   $ 9,698,451   $ 9,514,462   $ 9,553,902  
 
Deposits:
Noninterest-bearing $ 2,033,442 $ 1,871,040 $ 1,806,908 $ 1,668,104 $ 1,636,625
Interest-bearing   5,532,921     5,698,684     5,825,426     5,758,170     5,407,942  
Total deposits 7,566,363 7,569,724 7,632,334 7,426,274 7,044,567
Fed funds purchased and repos 604,500 576,672 539,693 550,919 700,138
Short-term borrowings 87,628 98,887 90,156 154,585 425,343
Long-term FHLB advances - 741 2,794 - -
Subordinated notes 49,839 49,831 49,823 49,814 49,806
Junior subordinated debt securities 61,856 61,856 61,856 61,856 61,856
Other liabilities   141,784     126,604     129,025     110,785     122,708  
Total liabilities   8,511,970     8,484,315     8,505,681     8,354,233     8,404,418  
Common stock 13,364 13,359 13,359 13,333 13,318
Capital surplus 266,026 264,750 263,940 260,297 256,675
Retained earnings 932,526 923,891 911,797 898,222 890,917
Accum other comprehensive
income (loss), net of tax   3,121     19,606     3,674     (11,623 )   (11,426 )
Total shareholders' equity   1,215,037     1,221,606     1,192,770     1,160,229     1,149,484  
Total liabilities and equity $ 9,727,007   $ 9,705,921   $ 9,698,451   $ 9,514,462   $ 9,553,902  
 
 
 
 
 
 
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2011
($ in thousands except per share data)
(unaudited)
 
 
Quarter EndedYear Ended

INCOME STATEMENTS

   12/31/2011     9/30/2011     6/30/2011     3/31/2011     12/31/2010     12/31/2011     12/31/2010  
Interest and fees on loans-FTE $ 82,230 $ 79,256 $ 80,202 $ 79,116 $ 82,664 $ 320,804 $ 334,527
Interest on securities-taxable 17,362 18,115 20,374 19,992 19,076 75,843 77,078
Interest on securities-tax exempt-FTE 2,133 2,155 2,115 2,128 2,169 8,531 8,580
Interest on fed funds sold and rev repos 10 5 7 8 12 30 36
Other interest income   327     329     333     332     328     1,321     1,409  
Total interest income-FTE   102,062     99,860     103,031     101,576     104,249     406,529     421,630  
Interest on deposits 7,728 8,911 9,936 9,719 10,359 36,294 48,657
Interest on fed funds pch and repos 195 216 216 338 403 965 1,183
Other interest expense   1,418     1,386     1,420     1,553     1,535     5,777     6,355  
Total interest expense   9,341     10,513     11,572     11,610     12,297     43,036     56,195  
Net interest income-FTE 92,721 89,347 91,459 89,966 91,952 363,493 365,435
Provision for loan losses, excluding covered loans 6,073 7,978 8,116 7,537 11,794 29,704 49,546
Provision for covered loan losses   624     -     -     -     -     624     -  
Net interest income after provision-FTE   86,024     81,369     83,343     82,429     80,158     333,165     315,889  
Service charges on deposit accounts 13,269 13,680 12,851 11,907 13,493 51,707 55,183
Insurance commissions 6,076 7,516 6,862 6,512 6,224 26,966 27,691
Wealth management 5,223 5,993 5,760 5,986 5,760 22,962 21,872
Bank card and other fees 7,112 7,033 6,854 6,475 6,482 27,474 25,014
Mortgage banking, net 6,038 9,783 6,269 4,722 4,502 26,812 29,345
Other, net   (4,928 )   234     7,785     762     2,070     3,853     4,493  
Nonint inc-excl sec gains, net 32,790 44,239 46,381 36,364 38,531 159,774 163,598
Security (losses) gains, net   (11 )   33     51     7     101     80     2,329  
Total noninterest income   32,779     44,272     46,432     36,371     38,632     159,854     165,927  
Salaries and employee benefits 45,616 44,701 44,203 44,036 44,412 178,556 174,582
Services and fees 11,323 11,485 10,780 10,270 10,462 43,858 41,949
Net occupancy-premises 5,038 5,093 5,050 5,073 4,896 20,254 19,808
Equipment expense 5,139 5,038 4,856 5,144 4,229 20,177 17,135
FDIC assessment expense 1,484 1,812 1,938 2,750 2,942 7,984 12,161
ORE/Foreclosure expense 2,760 5,616 4,704 3,213 3,310 16,293 24,377
Other expense   11,643     11,736     9,817     9,532     10,186     42,728     35,637  
Total noninterest expense   83,003     85,481     81,348     80,018     80,437     329,850     325,649  
Income before income taxes and tax eq adj 35,800 40,160 48,427 38,782 38,353 163,169 156,167
Tax equivalent adjustment   3,663     3,667     3,629     3,591     3,400     14,550     13,412  
Income before income taxes 32,137 36,493 44,798 35,191 34,953 148,619 142,755
Income taxes   7,879     9,525     13,196     11,178     9,793     41,778     42,119  
Net income available to common shareholders $ 24,258   $ 26,968   $ 31,602   $ 24,013   $ 25,160   $ 106,841   $ 100,636  
 
Per common share data
Earnings per share - basic $ 0.38   $ 0.42   $ 0.49   $ 0.38   $ 0.39   $ 1.67   $ 1.58  
 
Earnings per share - diluted $ 0.38   $ 0.42   $ 0.49   $ 0.37   $ 0.39   $ 1.66   $ 1.57  
 
Dividends per share $ 0.23   $ 0.23   $ 0.23   $ 0.23   $ 0.23   $ 0.92   $ 0.92  
 
Weighted average common shares outstanding
Basic   64,122,188     64,119,235     64,072,047     63,950,461     63,892,362     64,066,599     63,849,058  
 
Diluted   64,330,242     64,310,453     64,281,348     64,181,752     64,105,064     64,261,145     64,039,389  
 
Period end common shares outstanding   64,142,498     64,119,235     64,119,235     63,987,064     63,917,591     64,142,498     63,917,591  
 
 

OTHER FINANCIAL DATA

Return on common equity 7.87 % 8.83 % 10.73 % 8.40 % 8.60 % 8.95 % 8.79 %
Return on average tangible common equity 10.70 % 12.04 % 14.71 % 11.65 % 11.96 % 12.25 % 12.31 %
Return on equity 7.87 % 8.83 % 10.73 % 8.40 % 8.60 % 8.95 % 8.79 %
Return on assets 1.00 % 1.12 % 1.32 % 1.02 % 1.07 % 1.11 % 1.08 %
Interest margin - Yield - FTE 4.71 % 4.66 % 4.83 % 4.86 % 4.94 % 4.76 % 5.09 %
Interest margin - Cost 0.43 % 0.49 % 0.54 % 0.56 % 0.58 % 0.50 % 0.68 %
Net interest margin - FTE 4.28 % 4.17 % 4.29 % 4.30 % 4.36 % 4.26 % 4.41 %
Efficiency ratio 66.13 % 63.99 % 62.39 % 63.34 % 61.65 % 63.95 % 61.56 %
Full-time equivalent employees 2,537 2,542 2,575 2,489 2,490
 
 

COMMON STOCK PERFORMANCE

Market value-Close $ 24.29 $ 18.15 $ 23.41 $ 23.42 $ 24.84
Common book value $ 18.94 $ 19.05 $ 18.60 $ 18.13 $ 17.98
Tangible common book value $ 14.18 $ 14.28 $ 13.82 $ 13.34 $ 13.17
 
 
 
 
 
 
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
December 31, 2011
($ in thousands)
(unaudited)
 
Quarter Ended

NONPERFORMING ASSETS (1)

   12/31/2011     9/30/2011     6/30/2011     3/31/2011     12/31/2010  
Nonaccrual loans
Florida $ 23,002 $ 27,263 $ 30,752 $ 44,548 $ 53,773
Mississippi (2) 46,746 44,825 47,802 40,226 39,803
Tennessee (3) 15,791 14,575 17,564 13,886 14,703
Texas   24,919     12,915     24,900     28,130     34,644  
Total nonaccrual loans 110,458 99,578 121,018 126,790 142,923
Other real estate
Florida 29,963 29,949 33,823 31,339 32,370
Mississippi (2) 19,483 21,027 22,921 22,084 24,181
Tennessee (3) 16,879 17,940 15,760 16,920 16,407
Texas   12,728     20,681     17,495     18,855     13,746  
Total other real estate   79,053     89,597     89,999     89,198     86,704  
Total nonperforming assets $ 189,511   $ 189,175   $ 211,017   $ 215,988   $ 229,627  
 

LOANS PAST DUE OVER 90 DAYS (4)

LHFI $ 4,230   $ 3,166   $ 6,993   $ 5,010   $ 3,608  
 
LHFS-Guaranteed GNMA serviced loans
(no obligation to repurchase) $ 39,379   $ 32,956   $ 24,708   $ 19,808   $ 15,777  
 
 
 
Quarter EndedYear Ended

ALLOWANCE FOR LOAN LOSSES

   12/31/2011     9/30/2011     6/30/2011     3/31/2011     12/31/2010     12/31/2011     12/31/2010  
Beginning Balance $ 89,463 $ 86,846 $ 93,398 $ 93,510 $ 94,458 $ 93,510 $ 103,662
Provision for loan losses 6,073 7,978 8,116 7,537 11,794 29,704 49,546
Charge-offs (8,457 ) (8,675 ) (17,505 ) (11,132 ) (15,883 ) (45,769 ) (71,897 )
Recoveries   2,439     3,314     2,837     3,483     3,141     12,073     12,199  
Net charge-offs   (6,018 )   (5,361 )   (14,668 )   (7,649 )   (12,742 )   (33,696 )   (59,698 )
Ending Balance $ 89,518   $ 89,463   $ 86,846   $ 93,398   $ 93,510   $ 89,518   $ 93,510  
 

PROVISION FOR LOAN LOSSES

Florida $ 4,797 $ 3,046 $ 5,633 $ 3,024 $ 7,473 $ 16,500 $ 19,926
Mississippi (2) 3,783 3,732 1,331 1,071 2,673 9,917 14,249
Tennessee (3) (885 ) (105 ) 157 1,619 910 786 5,612
Texas   (1,622 )   1,305     995     1,823     738     2,501     9,759  
Total provision for loan losses $ 6,073   $ 7,978   $ 8,116   $ 7,537   $ 11,794   $ 29,704   $ 49,546  
 

NET CHARGE-OFFS

Florida $ 2,576 $ 2,909 $ 7,880 $ 5,478 $ 4,830 $ 18,843 $ 28,650
Mississippi (2) 2,556 1,988 3,401 410 4,422 8,355 18,963
Tennessee (3) 773 499 324 979 1,646 2,575 6,578
Texas   113     (35 )   3,063     782     1,844     3,923     5,507  
Total net charge-offs $ 6,018   $ 5,361   $ 14,668   $ 7,649   $ 12,742   $ 33,696   $ 59,698  
 

CREDIT QUALITY RATIOS (1)

Net charge offs/average loans 0.40 % 0.36 % 0.97 % 0.51 % 0.82 % 0.56 % 0.95 %
Provision for loan losses/average loans 0.40 % 0.53 % 0.54 % 0.50 % 0.75 % 0.49 % 0.79 %
Nonperforming loans/total loans (incl LHFS) 1.82 % 1.66 % 2.01 % 2.09 % 2.30 %
Nonperforming assets/total loans (incl LHFS) 3.12 % 3.16 % 3.50 % 3.55 % 3.70 %
Nonperforming assets/total loans (incl LHFS) +ORE 3.08 % 3.11 % 3.45 % 3.50 % 3.64 %
ALL/total loans (excl LHFS) 1.53 % 1.55 % 1.47 % 1.57 % 1.54 %
ALL-commercial/total commercial loans 1.91 % 1.94 % 1.84 % 1.98 % 1.94 %
ALL-consumer/total consumer and home mortgage loans 0.76 % 0.76 % 0.76 % 0.76 % 0.78 %
ALL/nonperforming loans 81.04 % 89.84 % 71.76 % 73.66 % 65.43 %
ALL/nonperforming loans -
(excl impaired loans) 194.19 % 248.82 % 181.95 % 215.40 % 188.11 %
 

CAPITAL RATIOS

Total equity/total assets 12.49 % 12.59 % 12.30 % 12.19 % 12.03 %
Common equity/total assets 12.49 % 12.59 % 12.30 % 12.19 % 12.03 %
Tangible common equity/tangible assets 9.66 % 9.74 % 9.43 % 9.27 % 9.11 %
Tangible common equity/risk-weighted assets 13.83 % 14.04 % 13.51 % 13.06 % 12.62 %
Tier 1 leverage ratio 10.43 % 10.38 % 10.18 % 10.10 % 10.14 %
Tier 1 common risk-based capital ratio 13.90 % 13.84 % 13.55 % 13.32 % 12.87 %
Tier 1 risk-based capital ratio 14.81 % 14.76 % 14.46 % 14.24 % 13.77 %
Total risk-based capital ratio 16.67 % 16.78 % 16.47 % 16.25 % 15.77 %
 
 
(1) - Excludes Covered Assets (Loans and Other Real Estate)
(2) - Mississippi includes Central and Southern Mississippi Regions
(3) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions
(4) - Excludes Covered Loans
 
 
 
 
 
 
 

Note 1 - Business Combinations

On April 15, 2011, the Mississippi Department of Banking and Consumer Finance closed the Heritage Banking Group (Heritage), a 90-year old financial institution headquartered in Carthage Mississippi, and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. On the same date, Trustmark National Bank (TNB) entered into a purchase and assumption agreement with the FDIC in which TNB agreed to assume all of the deposits and purchased essentially all of the assets of Heritage. The FDIC and TNB entered into a loss-share transaction on approximately $151.9 million of Heritage assets, which covers substantially all loans and other real estate. Under the loss share agreement, the FDIC will cover 80% of covered loan and other real estate losses incurred. TNB will reimburse the FDIC for 80% of recoveries with respect to losses for which the FDIC paid TNB the 80% reimbursement of covered losses incurred under the loss share agreement. Because of the loss protection provided by the FDIC, the risk characteristics of the Heritage loans and other real estate are significantly different from those assets not covered by this agreement. As a result, Trustmark will refer to loans and other real estate subject to the loss share agreement as "covered" while loans and other real estate that are not subject to the loss share agreement will be referred to as "excluding covered." The loss share agreement applicable to single family residential mortgage loans and related foreclosed real estate provides for FDIC loss sharing and TNB's reimbursement to the FDIC for recoveries of covered losses for ten years from the date on which the loss share agreement was entered. The loss share agreement applicable to commercial loans and related foreclosed real estate provide for FDIC loss sharing for five years from the date on which the loss share agreement was entered and TNB's reimbursement to the FDIC for recoveries of covered losses for an additional three years thereafter.

The assets purchased and liabilities assumed for the Heritage acquisition have been accounted for under the acquisition method of accounting (formerly the purchase method). The assets and liabilities, both tangible and intangible, are recorded at their estimated fair values as of the acquisition date. The fair value amounts are subject to change for up to one year after the closing date as additional information relating to closing date fair values becomes available. The amounts are also subject to adjustments based upon final settlement with the FDIC.

The statement of assets purchased and liabilities assumed in the Heritage acquisition are presented below at their estimated fair values as of the acquisition date of April 15, 2011 ($ in thousands):

 

Assets

    
Cash and due from banks $ 50,447
Federal funds sold 1,000
Securities available for sale 6,389
LHFI, excluding covered loans 9,644
Covered loans 97,770
Premises and equipment, net 55
Identifiable intangible assets 902
Covered other real estate 7,485
FDIC indemnification asset 33,333
Other assets   218  
Total Assets   207,243  
 
Liabilities
Deposits 204,349
Short-term borrowings 23,157
Other liabilities   730  
Total Liabilities   228,236  
 
Net assets acquired at fair value (20,993 )
Cash received on acquisition   28,449  
 
Bargain purchase gain 7,456
Income taxes   2,852  
Bargain purchase gain, net of taxes $ 4,604  
 
 

The bargain purchase gain represents the net of the estimated fair value of the assets acquired and liabilities assumed and is influenced significantly by the FDIC-assisted transaction process. Under the FDIC-assisted transaction process, only certain assets and liabilities are transferred to the acquirer and, depending on the nature and amount of the acquirer's bid, the FDIC may be required to make a cash payment to the acquirer. The pretax gain of $7.5 million recognized by Trustmark is considered a bargain purchase transaction under FASB ASC Topic 805, "Business Combinations." The gain was recognized as other noninterest income in Trustmark's consolidated statements of income for the three months ended June 30, 2011.

During the fourth quarter, Trustmark re-estimated the expected cash flows on the acquired loans of Heritage, as required by FASB ASC 310-30, "Loans and Debt Securities Acquired with Deteriorated Credit Quality." The analysis resulted in improvements in the estimated future cash flows of the acquired loans that remain outstanding as well as lower expected remaining losses on those loans. For acquired loans subject to loss share agreements, improvements in loan values, due to increased expected cash flows, may also reduce the expected loss share receivable from the FDIC. The net result between the quarter's improved loan values and the lower loss share receivable resulted in a charge during the fourth quarter to Trustmark's pre-tax net income of $935 thousand and was included in the consolidated statements of income as follows:

  • Net interest income included $3.8 million of recovery and accretion resulting from investment basis recovery on paid off loans and prospective yield adjustments for loan pools with improved cash flows.
  • Provision for covered loan losses included $624 thousand for impairment on the recorded investment on certain pools.
  • Other income included a write-down of the FDIC indemnification asset of $4.2 million on covered loans as a result of loan payoffs and improved cash flow projections and lower loss expectations for loan pools.

In addition, accretable yield increased $9 million due to the re-estimated cash flows on acquired loans. The increase in accretable yield will be recognized as interest income over the remaining average life of the acquired loans, which is estimated to be 19 months. The operations of Heritage are included in Trustmark's operating results from April 15, 2011, and added total revenues of $13.0 million and net income available to common shareholders of $6.5 million through December 31, 2011.

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):

  12/31/2011   9/30/2011   6/30/2011   3/31/2011   12/31/2010

SECURITIES AVAILABLE FOR SALE

U.S. Government agency obligations
Issued by U.S. Government agencies $ 3 $ 5 $ 7 $ 10 $ 12
Issued by U.S. Government sponsored agencies 64,802 61,870 102,940 136,168 122,023
Obligations of states and political subdivisions 202,827 207,781 186,034 161,909 159,637
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA 12,445 14,637 14,990 12,079 12,442
Issued by FNMA and FHLMC 347,932 400,589 413,493 417,022 426,504
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA 1,614,965 1,579,698 1,556,676 1,486,872 1,400,816
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA   226,019   212,325   124,902   95,644   55,815
Total securities available for sale $ 2,468,993 $ 2,476,905 $ 2,399,042 $ 2,309,704 $ 2,177,249
 

SECURITIES HELD TO MATURITY

Obligations of states and political subdivisions $ 42,619 $ 43,246 $ 46,931 $ 49,129 $ 53,246
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA 4,538 5,291 5,547 5,650 6,058
Issued by FNMA and FHLMC 588 753 753 759 763
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA 7,749 19,534 32,456 52,272 78,526
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA   2,211   2,222   2,236   2,244   2,254
Total securities held to maturity $ 57,705 $ 71,046 $ 87,923 $ 110,054 $ 140,847
 
 

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 91% of the portfolio in U.S. Government agency-backed obligations and other AAA rated securities. None of the securities owned by Trustmark are collateralized by assets which are considered sub-prime. Furthermore, outside of membership in the Federal Home Loan Bank of Dallas or the Federal Reserve Bank, Trustmark does not hold any equity investment in government sponsored entities.

Note 3 - Loan Composition

LHFI BY TYPE (excluding covered loans)

   12/31/2011   9/30/2011   6/30/2011   3/31/2011   12/31/2010
Loans secured by real estate:
Construction, land development and other land loans $ 474,082 $ 481,821 $ 510,867 $ 552,956 $ 583,316
Secured by 1-4 family residential properties 1,760,930 1,717,366 1,737,744 1,737,018 1,732,056
Secured by nonfarm, nonresidential properties 1,425,774 1,437,573 1,457,328 1,488,711 1,498,108
Other real estate secured 204,849 207,984 208,797 216,986 231,963
Commercial and industrial loans 1,139,365 1,083,753 1,082,127 1,082,258 1,068,369
Consumer loans 243,756 268,002 332,032 357,870 402,165
Other loans   608,728     587,213     577,421     528,290     544,265  
LHFI, excluding covered loans 5,857,484 5,783,712 5,906,316 5,964,089 6,060,242
Allowance for loan losses   (89,518 )   (89,463 )   (86,846 )   (93,398 )   (93,510 )
Net LHFI, excluding covered loans $ 5,767,966   $ 5,694,249   $ 5,819,470   $ 5,870,691   $ 5,966,732  
 
 

COVERED LOANS BY TYPE

12/31/20119/30/20116/30/20113/31/201112/31/2010
Loans secured by real estate:
Construction, land development and other land loans $ 4,209 $ 4,024 $ 8,477 $ - $ -
Secured by 1-4 family residential properties 31,874 32,735 32,124 - -
Secured by nonfarm, nonresidential properties 30,889 33,601 35,846 - -
Other real estate secured 5,126 5,294 5,363 - -
Commercial and industrial loans 2,971 1,772 5,570 - -
Consumer loans 290 158 163 - -
Other loans   1,445     1,480     1,015     -     -  
Covered loans 76,804 79,064 88,558 - -
Allowance for loan losses, covered loans   (502 )   -     -     -     -  
Net covered loans $ 76,302   $ 79,064   $ 88,558   $ -   $ -  
 
 
 
 
 
Note 3 - Loan Composition (continued)
  December 31, 2011

LHFI - COMPOSITION BY REGION (1)

Total  

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 $ 474,082 $ 95,453 $ 232,170 $ 31,789 $ 114,670
Secured by 1-4 family residential properties 1,760,930 57,773 1,527,499 145,655 30,003
Secured by nonfarm, nonresidential properties 1,425,774 160,409 771,425 171,168 322,772
Other real estate secured 204,849 10,847 146,804 6,648 40,550
Commercial and industrial loans 1,139,365 12,823 800,421 83,290 242,831
Consumer loans 243,756 1,173 216,215 21,478 4,890
Other loans   608,728   27,040   519,764   26,622   35,302
Loans $ 5,857,484 $ 365,518 $ 4,214,298 $ 486,650 $ 791,018
 
 
 

CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION (1)

Lots $ 64,269 $ 38,409 $ 19,880 $ 1,618 $ 4,362
Development 115,777 11,542 58,380 6,329 39,526
Unimproved land 169,272 44,085 74,703 18,771 31,713
1-4 family construction 73,566 1,130 57,653 2,495 12,288
Other construction   51,198   287   21,554   2,576   26,781
Construction, land development and other land loans $ 474,082 $ 95,453 $ 232,170 $ 31,789 $ 114,670
 
 
 
 

LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION (1)

Income producing:
Retail $ 158,140 $ 41,676 $ 61,995 $ 23,993 $ 30,476
Office 144,019 39,726 75,226 10,815 18,252
Nursing homes/assisted living 114,059 - 104,326 4,421 5,312
Hotel/motel 78,574 10,787 29,567 10,729 27,491
Industrial 39,028 8,957 8,494 276 21,301
Health care 12,722 - 11,513 168 1,041
Convenience stores 9,708 201 4,608 2,610 2,289
Other   156,048   15,545   76,012   11,339   53,152
Total income producing loans 712,298 116,892 371,741 64,351 159,314
 
Owner-occupied:
Office 112,052 16,114 62,466 7,820 25,652
Churches 90,155 2,106 50,751 32,343 4,955
Industrial warehouses 90,161 2,429 50,415 494 36,823
Health care 98,900 10,664 51,596 16,479 20,161
Convenience stores 61,045 1,476 37,947 4,216 17,406
Retail 33,039 3,904 20,482 1,820 6,833
Restaurants 35,137 618 26,527 6,378 1,614
Auto dealerships 21,944 540 17,742 1,946 1,716
Other   171,043   5,666   81,758   35,321   48,298
Total owner-occupied loans 713,476 43,517 399,684 106,817 163,458
         
Loans secured by nonfarm, nonresidential properties $ 1,425,774 $ 160,409 $ 771,425 $ 171,168 $ 322,772
 
(1) Excludes covered loans.
 
 
 
 
 
Note 3 - Loan Composition (continued)
           
December 31, 2011
 
Classified (3)

FLORIDA CREDIT QUALITY

Total Loans

Criticized

Loans (1)

Special

Mention (2)

Accruing

Nonimpaired

Nonaccrual

Impaired

Nonaccrual (4)

Construction, land development and other land loans:
Lots $ 38,409 $ 13,371 $ 934 $ 9,484 $ 1,755 $ 1,198
Development 11,542 2,257 - - - 2,257
Unimproved land 44,085 27,011 20,038 2,750 441 3,782
1-4 family construction 1,130 - - - - -
Other construction   287   287   -     287   -   -
Construction, land development and other land loans 95,453 42,926 20,972 12,521 2,196 7,237
Commercial, commercial real estate and consumer   270,065   58,359   9,857     34,933   2,657   10,912
 
Total Florida loans $ 365,518 $ 101,285 $ 30,829   $ 47,454 $ 4,853 $ 18,149
 
 

FLORIDA LOAN LOSS RESERVES BY LOAN TYPE

Total Loans

Loan Loss

Reserves

Loan Loss

Reserve % of

Total Loans

Construction, land development and other land loans:
Lots $ 38,409 $ 4,209 10.96 %
Development 11,542 1,325 11.48 %
Unimproved land 44,085 4,879 11.07 %
1-4 family construction 1,130 21 1.86 %
Other construction   287   72 25.09 %
Construction, land development and other land loans 95,453 10,506 11.01 %
Commercial, commercial real estate and consumer   270,065   10,811 4.00 %
 
Total Florida loans $ 365,518 $ 21,317 5.83 %

 

(1) Criticized loans equal all special mention and classified loans.

(2) Special mention loans exhibit potential credit weaknesses that, if not resolved, may ultimately result in a more severe classification.

(3) Classified loans include those loans identified by management as exhibiting well-defined credit weaknesses that may jeopardize repayment in full of the debt.

(4) All nonaccrual loans over $500 thousand are individually assessed for impairment.  Impaired loans have been determined to be collateral dependent and assessed using a fair value approach.  Fair value estimates begin with appraised values, normally from recently received and reviewed appraisals.  Appraised values are adjusted down for costs associated with asset disposal.  At the time a loan is deemed to be impaired, the full difference between book value and the most likely estimate of the asset's net realizable value is charged off.  However, as subsequent events dictate and estimated net realizable values decline, required reserves are established.

           
 

LOAN COMPOSITION - FLORIDA

12/31/20119/30/20116/30/20113/31/2011

12/31/2010

Loans secured by real estate:
Construction, land development and other land loans $ 95,453 $ 101,450 $ 111,131 $ 122,445 $

132,021

Secured by 1-4 family residential properties 57,773 62,236 65,532 69,552

72,114

Secured by nonfarm, nonresidential properties 160,409 160,701 174,655 177,943

183,250

Other real estate secured 10,847 11,046 12,852 13,472

14,038

Commercial and industrial loans 12,823 12,670 14,267 14,774

16,053

Consumer loans 1,173 1,241 1,256 1,476

1,487

Other loans   27,040   27,252   27,471   27,694  

25,488

Loans $ 365,518 $ 376,596 $ 407,164 $ 427,356 $

444,451

 
 
 

CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS - FLORIDA

Lots $ 38,409 $ 41,099 $ 42,990 $ 44,742 $

46,907

Development 11,542 11,885 13,086 20,524

21,144

Unimproved land 44,085 47,303 49,910 52,177

57,811

1-4 family construction 1,130 872 1,130 1,078

2,277

Other construction   287   291   4,015   3,924  

3,882

Construction, land development and other land loans $ 95,453 $ 101,450 $ 111,131 $ 122,445 $

132,021

 
 
 
 

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   Year Ended
12/31/2011   9/30/2011   6/30/2011   3/31/2011   12/31/201012/31/2011   12/31/2010
Securities - Taxable 3.02 % 3.26 % 3.69 % 3.77 % 3.90 % 3.43 % 4.29 %
Securities - Nontaxable 4.53 % 4.39 % 4.79 % 5.02 % 4.97 % 4.67 % 5.47 %
Securities - Total 3.13 % 3.35 % 3.77 % 3.87 % 3.99 % 3.52 % 4.39 %
Loans 5.37 % 5.18 % 5.25 % 5.25 % 5.29 % 5.26 % 5.32 %
FF Sold & Rev Repo 0.38 % 0.34 % 0.41 % 0.39 % 0.44 % 0.38 % 0.39 %
Other Earning Assets 3.72 % 4.04 % 4.17 % 2.81 % 3.15 % 3.60 % 3.53 %
Total Earning Assets 4.71 % 4.66 % 4.83 % 4.86 % 4.94 % 4.76 % 5.09 %
 
Interest-bearing Deposits 0.54 % 0.61 % 0.66 % 0.70 % 0.77 % 0.63 % 0.88 %
FF Pch & Repo 0.15 % 0.19 % 0.22 % 0.21 % 0.23 % 0.19 % 0.20 %
Other Borrowings 2.22 % 2.75 % 2.76 % 1.72 % 1.65 % 2.26 % 1.81 %
Total Interest-bearing Liabilities 0.58 % 0.65 % 0.70 % 0.71 % 0.76 % 0.66 % 0.87 %
 
Net interest margin 4.28 % 4.17 % 4.29 % 4.30 % 4.36 % 4.26 % 4.41 %
 
 

As previously mentioned in Note 1 - Business Combinations, the fourth quarter's net interest income included $3.8 million associated with the re-estimation of cash flows required by FASB ASC 310-30 accounting guidelines. This re-estimation increased the yield on loans and earning assets by 25 basis points and 17 basis points, respectively. Excluding this adjustment, the core net interest margin for the quarter and year ended December 31, 2011, equaled 4.10% and 4.21%, respectively. The decline in the core net interest margin during the fourth quarter is primarily due to the downward repricing of TNB's fixed rate assets as well as accelerated premium amortization related to the investment portfolio.

Note 5 - Mortgage Banking

Trustmark utilizes a portfolio of exchange-traded derivative instruments, such as Treasury note futures contracts and exchange-traded option contracts, to achieve a fair value return that offsets the changes in fair value of MSR attributable to interest rates. These transactions are considered freestanding derivatives that do not otherwise qualify for hedge accounting. Changes in the fair value of these exchange-traded derivative instruments are recorded in noninterest income in mortgage banking, net and are offset by the changes in the fair value of 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 total hedge cost to the changes in the fair value of the MSR asset attributable to interest rate changes. The impact of this strategy resulted in a net positive ineffectiveness of $4.4 million and $7.3 million for the years ended December 31, 2011 and 2010, respectively.

The following table illustrates the components of mortgage banking revenues included in noninterest income in the accompanying income statements:

  Quarter Ended   Year Ended

12/31/2011

   9/30/2011   6/30/2011   3/31/2011  

12/31/2010

12/31/2011

   12/31/2010
Mortgage servicing income, net $ 3,725 $ 3,738 $ 3,713 $ 3,614 $ 3,577 $ 14,790 $ 13,927
Change in fair value-MSR from runoff (2,122 ) (2,039 ) (1,455 ) (1,291 ) (2,506 ) (6,907 ) (7,305 )
Gain on sales of loans, net 4,633 2,366 1,852 3,101 5,754 11,952 15,317
Other, net   133     2,926     448     (965 )   (2,016 )   2,542     94  
Mortgage banking income before hedge ineffectiveness   6,369     6,991     4,558     4,459     4,809     22,377     22,033  
Change in fair value-MSR from market changes (2,842 ) (7,614 ) (4,931 ) 257 5,870 (15,130 ) (8,943 )
Change in fair value of derivatives   2,511     10,406     6,642     6     (6,177 )   19,565     16,255  
Net (negative) positive hedge ineffectiveness   (331 )   2,792     1,711     263     (307 )   4,435     7,312  
Mortgage banking, net $ 6,038   $ 9,783   $ 6,269   $ 4,722   $ 4,502   $ 26,812   $ 29,345  
 
 

During the first quarter of 2010, Trustmark completed the final settlement of the sale of approximately $920.9 million in mortgages serviced for others, which reduced Trustmark's MSR by approximately $8.5 million. In addition, during December of 2010, Trustmark purchased approximately $53.9 million of GNMA serviced loans, which were subsequently sold to a third party. Trustmark will retain the servicing for these loans, which are fully guaranteed by FHA/VA. The effect of these transactions did not have a material impact on Trustmark's results of operations.

Note 6 - Other Noninterest Income

Other noninterest income consisted of the following for the periods presented ($ in thousands):

    Quarter Ended   Year Ended
12/31/2011   9/30/2011   6/30/2011   3/31/2011   12/31/201012/31/2011   12/31/2010
Partnership amortization for tax credit purposes $ (2,690 ) $ (1,417 ) $ (1,137 ) $ (1,122 ) $ (2,031 ) $ (6,366 ) $ (4,504 )
Bargain purchase gain on acquisition - - 7,456 - - 7,456 -
Decrease in FDIC indemnification asset (4,157 ) - - - - (4,157 ) -
Other miscellaneous income   1,919     1,651     1,466     1,884     4,101     6,920     8,997  
Total other, net $ (4,928 ) $ 234   $ 7,785   $ 762   $ 2,070   $ 3,853   $ 4,493  
 
 

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 or historical tax credits). These investments are recorded based on the equity method of accounting, which requires the equity in partnership losses to be recognized when incurred and are recorded as a reduction in other income. 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.

As previously mentioned in Note 1 - Business Combinations, other income included a write-down of the FDIC indemnification asset of $4.2 million on covered loans as a result of loan payoffs and improved cash flow projections and lower loss expectations for loan pools.

Note 7 - Non-GAAP Financial Measures

In addition to capital ratios defined by 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.

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.

           
 
 
 
 
Note 7 - Non-GAAP Financial Measures (continued)
Quarter EndedYear Ended
12/31/20119/30/20116/30/20113/31/201112/31/201012/31/201112/31/2010

TANGIBLE COMMON EQUITY

 

AVERAGE BALANCES
Total shareholders' common equity $ 1,223,101 $ 1,211,434 $ 1,181,776 $ 1,159,898 $ 1,160,058 $ 1,194,273 $

1,144,481

Less: Goodwill (291,104 ) (291,104 ) (291,104 ) (291,104 ) (291,104 ) (291,104 )

(291,104

)
Identifiable intangible assets   (14,550 )   (15,343 )   (15,976 )   (16,003 )   (16,835 )   (15,464 )  

(18,149

)
Total average tangible common equity $ 917,447   $ 904,987   $ 874,696   $ 852,791   $ 852,119   $ 887,705   $

835,228

 
 
PERIOD END BALANCES
Total shareholders' common equity $ 1,215,037 $ 1,221,606 $ 1,192,770 $ 1,160,229 $ 1,149,484
Less: Goodwill (291,104 ) (291,104 ) (291,104 ) (291,104 ) (291,104 )
Identifiable intangible assets   (14,076 )   (14,861 )   (15,651 )   (15,532 )   (16,306 )
Total tangible common equity (a) $ 909,857   $ 915,641   $ 886,015   $ 853,593   $ 842,074  
 

TANGIBLE ASSETS

Total assets $ 9,727,007 $ 9,705,291 $ 9,698,451 $ 9,514,462 $ 9,553,902
Less: Goodwill (291,104 ) (291,104 ) (291,104 ) (291,104 ) (291,104 )
Identifiable intangible assets   (14,076 )   (14,861 )   (15,651 )   (15,532 )   (16,306 )
Total tangible assets (b) $ 9,421,827   $ 9,399,326   $ 9,391,696   $ 9,207,826   $ 9,246,492  
 
Risk-weighted assets (c) $ 6,576,953   $ 6,522,468   $ 6,556,690   $ 6,536,056   $ 6,672,174  
 

NET INCOME ADJUSTED FOR INTANGIBLE AMORTIZATION

Net income available to common shareholders $ 24,258 $ 26,968 $ 31,602 $ 24,013 $ 25,160 $ 106,841 $ 100,636
Plus: Intangible amortization net of tax   493     489     483     480     538     1,945     2,173  
Net income adjusted for intangible amortization $ 24,751   $ 27,457   $ 32,085   $ 24,493   $ 25,698   $ 108,786   $ 102,809  
 
Period end common shares outstanding (d)   64,142,498     64,119,235     64,119,235     63,987,064     63,917,591  
 

TANGIBLE COMMON EQUITY MEASUREMENTS

Return on average tangible common equity 1 10.70 % 12.04 % 14.71 % 11.65 % 11.96 % 12.25 % 12.31 %
Tangible common equity/tangible assets (a)/(b) 9.66 % 9.74 % 9.43 % 9.27 % 9.11 %
Tangible common equity/risk-weighted assets (a)/(c) 13.83 % 14.04 % 13.51 % 13.06 % 12.62 %
Tangible common book value (a)/(d)*1,000 $ 14.18 $ 14.28 $ 13.82 $ 13.34 $ 13.17
 

TIER 1 COMMON RISK-BASED CAPITAL

Total shareholders' equity $ 1,215,037 $ 1,221,606 $ 1,192,770 $ 1,160,229 $ 1,149,484
Eliminate qualifying AOCI (3,121 ) (19,606 ) (3,674 ) 11,623 11,426
Qualifying tier 1 capital 60,000 60,000 60,000 60,000 60,000
Disallowed goodwill (291,104 ) (291,104 ) (291,104 ) (291,104 ) (291,104 )
Adj to goodwill allowed for deferred taxes 11,625 11,273 10,920 10,568 10,215
Other disallowed intangibles (14,076 ) (14,861 ) (15,651 ) (15,532 ) (16,306 )
Disallowed servicing intangible   (4,327 )   (4,366 )   (5,011 )   (5,360 )   (5,115 )
Total tier 1 capital $ 974,034 $ 962,942 $ 948,250 $ 930,424 $ 918,600
Less: Qualifying tier 1 capital   (60,000 )   (60,000 )   (60,000 )   (60,000 )   (60,000 )
Total tier 1 common capital (e) $ 914,034   $ 902,942   $ 888,250   $ 870,424   $ 858,600  
 
Tier 1 common risk-based capital ratio (e)/(c) 13.90 % 13.84 % 13.55 % 13.32 % 12.87 %
 
1 Calculation = ((net income adjusted for intangible amortization/number of days in period)*number of days in year)/total average tangible common equity
 
 
 
 

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Trustmark Corporation
Investor Contacts:
Louis E. Greer, 601-208-2310
Treasurer and Principal Financial Officer
or
F. Joseph Rein, Jr., 601-208-6898
Senior Vice President
or
Media Contact:
Melanie A. Morgan, 601-208-2979
Senior Vice President