TRUSTMARK CORP [TRMK] Filings

10-Q 1 trmk-20220930.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 000-03683

Trustmark Corporation

(Exact name of registrant as specified in its charter)


Mississippi		64-0471500
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


248 East Capitol Street, Jackson, Mississippi		39201
(Address of principal executive offices)		(Zip Code)

(601) 208-5111

(Registrant’s telephone number, including area code)

Securities registered Pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	TRMK	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 31, 2022, there were 60,953,864 shares outstanding of the registrant’s common stock (no par value).

Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q 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, as well as the effectiveness of actions of federal, state and local governments and agencies (including the Board of Governors of the Federal Reserve System (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 recent heightened levels of inflation and the reactions of the FRB and other governmental departments and agencies in response thereto, 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.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Trustmark Corporation and Subsidiaries

Consolidated Balance Sheets

($ in thousands)


	(Unaudited)
	September 30, 2022			December 31, 2021
Assets
Cash and due from banks	$	479,637		$	2,266,829
Federal funds sold and securities purchased under reverse repurchase agreements		10,098			—
Securities available for sale, at fair value (amortized cost: $2,776,415 - 2022 $3,256,289 - 2021; allowance for credit losses (ACL): $0)		2,444,486			3,238,877
Securities held to maturity, net of ACL of $0 (fair value: $1,065,828 - 2022; $353,511 - 2021)		1,156,985			342,537
Paycheck Protection Program (PPP) loans		4,798			33,336
Loans held for sale (LHFS)		165,213			275,706
Loans held for investment (LHFI)		11,586,064			10,247,829
Less ACL, LHFI		115,050			99,457
Net LHFI		11,471,014			10,148,372
Premises and equipment, net		210,761			205,644
Mortgage servicing rights (MSR)		132,615			87,687
Goodwill		384,237			384,237
Identifiable intangible assets, net		3,952			5,074
Other real estate, net		2,971			4,557
Operating lease right-of-use assets		37,282			34,603
Other assets		686,585			568,177
Total Assets	$	17,190,634		$	17,595,636

Liabilities
Deposits:
Noninterest-bearing	$	4,358,805		$	4,771,065
Interest-bearing		10,066,375			10,316,095
Total deposits		14,425,180			15,087,160
Federal funds purchased and securities sold under repurchase agreements		544,068			238,577
Other borrowings		223,172			91,025
Subordinated notes		123,207			123,042
Junior subordinated debt securities		61,856			61,856
ACL on off-balance sheet credit exposures		31,623			35,623
Operating lease liabilities		39,797			36,468
Other liabilities		232,786			180,574
Total Liabilities		15,681,689			15,854,325

Shareholders' Equity
Common stock, no par value:
Authorized: 250,000,000 shares Issued and outstanding: 60,953,864 shares - 2022; 61,648,679 shares - 2021		12,700			12,845
Capital surplus		154,150			175,913
Retained earnings		1,648,507			1,585,113
Accumulated other comprehensive income (loss), net of tax		(306,412	)		(32,560	)
Total Shareholders' Equity		1,508,945			1,741,311
Total Liabilities and Shareholders' Equity	$	17,190,634		$	17,595,636

See notes to consolidated financial statements.

Trustmark Corporation and Subsidiaries

Consolidated Statements of Income

($ in thousands, except per share data)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Interest Income
Interest and fees on LHFS & LHFI	$	126,441		$	91,182		$	316,855		$	272,515
Interest and fees on PPP loans		186			1,533			538			36,329
Interest on securities:
Taxable		16,222			9,973			43,140			27,902
Tax exempt		79			104			260			451
Interest on federal funds sold and securities purchased under reverse repurchase agreements		2			—			3			—
Other interest income		1,493			949			4,524			1,941
Total Interest Income		144,423			103,741			365,320			339,138
Interest Expense
Interest on deposits		5,097			3,691			10,631			13,544
Interest on federal funds purchased and securities sold under repurchase agreements		1,225			51			1,365			166
Other interest expense		1,996			1,733			5,199			5,403
Total Interest Expense		8,318			5,475			17,195			19,113
Net Interest Income		136,105			98,266			348,125			320,025
Provision for credit losses (PCL), LHFI		12,919			(2,492	)		14,775			(16,984	)
PCL, off-balance sheet credit exposures		(1,326	)		(1,049	)		(4,000	)		(5,888	)
Net Interest Income After PCL		124,512			101,807			337,350			342,897
Noninterest Income
Service charges on deposit accounts		11,318			8,911			30,995			23,880
Bank card and other fees		9,305			8,549			27,914			26,322
Mortgage banking, net		6,876			14,004			24,898			52,141
Insurance commissions		13,911			12,133			41,702			36,795
Wealth management		8,778			9,071			26,934			26,433
Other, net		2,418			1,481			7,531			5,572
Total Noninterest Income		52,606			54,149			159,974			171,143
Noninterest Expense
Salaries and employee benefits		72,707			74,623			213,971			215,900
Services and fees

TRUSTMARK CORP [TRMK] Filings
10-Q	[2022-11-03]
10-Q	[2022-08-04]
10-Q	[2022-05-05]
10-K	[2022-02-17]
10-Q	[2021-11-04]
10-Q	[2021-08-05]
10-Q	[2021-05-06]
10-K	[2021-02-18]
10-Q	[2020-11-05]
10-Q	[2020-08-06]
10-Q	[2020-05-08]
10-K	[2020-02-20]
10-Q	[2019-11-07]
10-Q	[2019-08-06]
10-Q	[2019-05-07]
10-K	[2019-02-19]
10-Q	[2018-11-06]
10-Q	[2018-08-07]
10-Q	[2018-05-07]
10-K	[2018-02-20]
10-Q	[2017-11-06]
10-Q	[2017-08-07]
10-Q	[2017-05-08]
10-K	[2017-02-21]
10-Q	[2016-11-04]
10-Q	[2016-08-05]
10-Q	[2016-05-06]
10-K	[2016-02-23]
10-Q	[2015-11-05]
10-Q	[2015-08-06]
10-Q	[2015-05-07]
10-K	[2015-03-02]
10-Q	[2014-11-06]
10-Q	[2014-08-07]
10-Q	[2014-05-08]
10-K	[2014-02-24]
10-Q	[2013-11-07]
10-Q	[2013-08-07]
10-Q	[2013-05-08]
10-K	[2013-02-27]
10-Q	[2012-11-07]
10-Q	[2012-08-08]
10-Q	[2012-05-09]
10-K	[2012-02-27]