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April 2024
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Exhibit 99.1
|
News Release |
Trustmark Corporation Announces Fourth Quarter and Fiscal Year 2023 Financial Results
Performance Reflects Continued Loan and Deposit Growth,
Solid Credit Quality, and Diversified Revenue Base
JACKSON, Miss. – January 23, 2024 – Trustmark Corporation (NASDAQGS:TRMK) reported net income of $36.1 million in the fourth quarter of 2023, representing diluted earnings per share of $0.59. For the full year, Trustmark’s net income totaled $165.5 million, representing diluted earnings per share of $2.70. Trustmark’s net income in 2023 produced a return on average tangible equity of 14.04% and a return on average assets of 0.89%. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share payable March 15, 2024, to shareholders of record on March 1, 2024.
2023 Highlights
Duane A. Dewey, President and CEO, commented, “We continued to make significant progress across the organization. Our performance reflected solid loan production and credit quality, and continued deposit growth in an increasingly competitive marketplace. We achieved double-digit growth in net interest income in 2023 while noninterest income continued to expand thanks in part to another record year in our insurance business and commendable results in our banking, mortgage banking and wealth management businesses. We have a tremendous team of associates focused on expanding customer relationships and demonstrating the value Trustmark can provide as their trusted financial partner. Looking forward, we will continue to pursue opportunities to redesign workflows and restructure the organization to further leverage investments in technology that will broaden our reach, enhance the customer experience, and improve efficiency. We remain focused on providing the financial services and advice our customers have come to expect while building long-term value for our shareholders.”
Balance Sheet Management
Loans HFI totaled $13.0 billion at December 31, 2023, reflecting an increase of $140.3 million, or 1.1%, linked-quarter and $746.5 million, or 6.1%, year-over-year. The linked-quarter growth reflected increases in commercial and industrial loans, other real estate secured loans, other loans and leases, and state and other political subdivision loans offset in part by declines in construction, land development and other land loans, and loans secured by nonfarm, nonresidential properties. Trustmark’s loan portfolio remains well-diversified by loan type and geography.
Deposits totaled $15.6 billion at December 31, 2023, up $467.8 million, or 3.1%, from the prior quarter and up $1.1 billion, or 7.8%, year-over-year. Trustmark continues to maintain a strong liquidity position as loans HFI represented 83.2% of total deposits at year-end 2023. Noninterest-bearing deposits represented 20.5% of total deposits at December 31, 2023. Interest-bearing deposit costs totaled 2.67% for the fourth quarter, an increase of 28 basis points linked-quarter. The total cost of interest-bearing liabilities was 2.89% for the fourth quarter of 2023, an increase of 17 basis points from the prior quarter.
Trustmark did not repurchase any of its common shares in 2023. As previously announced, Trustmark’s Board of Directors authorized a stock repurchase program effective January 1, 2024, under which $50.0 million of Trustmark’s outstanding shares may be acquired through December 31, 2024. The repurchase program, which is subject to market conditions and management discretion, will continue to be implemented through open market repurchases or privately negotiated transactions. At December 31, 2023, Trustmark’s tangible equity to tangible assets ratio was 6.95%, while the total risk-based capital ratio was 12.29%. Tangible book value per share was $20.87 at December 31, 2023, up 7.7% from the prior quarter and 15.2% from the prior year.
Credit Quality
Nonaccrual loans totaled $100.0 million at December 31, 2023, an increase of $9.1 million from the prior quarter and $34.0 million year-over-year. Other real estate totaled $6.9 million, reflecting increases of $1.4 million and $4.9 million from the prior quarter and prior year, respectively. Collectively, nonperforming assets totaled $106.9 million, representing 0.81% of loans HFI and held for sale (HFS) at December 31, 2023.
The provision for credit losses for loans HFI was $7.6 million in the fourth quarter and was primarily attributable to loan growth, net adjustments to the qualitative factors, and changes in the macroeconomic forecast. The provision for credit losses for off-balance sheet credit exposures was a negative $888 thousand in the fourth quarter. Collectively, the provision for credit losses totaled $6.7 million in the fourth quarter compared to $8.4 million in the prior quarter and $12.1 million in the fourth quarter of 2022.
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Trustmark Corp's Definitive Proxy Statement (Form DEF 14A) filed after their 2024 10-K Annual Report includes:
Rating
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Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the financial statements of Trustmark and TNB and limit Trustmark’s and TNB’s ability to pay dividends.
This amount could differ due to changes in interest rates, hedge de-designations or the addition of other hedges.
Certain policies inherently have a greater reliance on the use of estimates, assumptions and judgments and, as such, have a greater possibility of producing results that could be materially different than originally reported.
Market risk reflects the potential risk of loss arising from adverse changes in interest rates and market prices.
Credit risk participation agreements arise when Trustmark contracts with other financial institutions, as a guarantor or beneficiary, to share credit risk associated with certain interest rate swaps.
Trustmark believes that it may...Read more
The ACL is an estimate...Read more
The decrease in loan sales...Read more
Trustmark’s primary market risk is...Read more
– Financial Statements and Supplementary...Read more
The decrease in total revenue...Read more
An extended period of falling...Read more
Net interest income for the...Read more
The decrease in mortgage banking,...Read more
Net interest income for the...Read more
However, the increased federal regulation...Read more
The decrease in average other...Read more
If Trustmark had breached any...Read more
State and other political subdivision...Read more
The decrease in bank card...Read more
The increase in average interest-bearing...Read more
The PCL, LHFI for the...Read more
Under the stock repurchase plan...Read more
Due to the increased risk...Read more
The balances of nonaccrual loans...Read more
Average other borrowings for 2023...Read more
Interest rate risk is the...Read more
Trustmark offers certain interest rate...Read more
Under the stock repurchase plan...Read more
Management considers disciplined expense management...Read more
Calculated using net income adjusted...Read more
The external factors qualitative factor...Read more
The yield on the FRBA...Read more
During 2020, due to unforeseen...Read more
On December 5, 2023, the...Read more
Under the stock repurchase plan...Read more
The increase in net charge-offs...Read more
The decrease in the gain...Read more
At December 31, 2023, Trustmark...Read more
The proceeds from the sale...Read more
During 2023, Trustmark reclassified its...Read more
During 2023, Trustmark reclassified its...Read more
The ACL, LHFI is a...Read more
In future periods, evaluations of...Read more
The ability to issue preferred...Read more
Trustmark maintains a relationship with...Read more
Trustmark had no letters of...Read more
The PCL, LHFI is the...Read more
Although plan benefits may be...Read more
The increase in net interest...Read more
The release in PCL, off-balance...Read more
As of December 31, 2023,...Read more
A migration analysis is then...Read more
Access to these additional sources...Read more
FASB ASC Topic 326 requires...Read more
The performance trends qualitative factor...Read more
LHFI secured by construction, land...Read more
The release in PCL on...Read more
The release in PCL on...Read more
The repurchase program, which is...Read more
The ACL is a valuation...Read more
In addition, at December 31,...Read more
The increase in nonaccrual LHFI...Read more
At December 31, 2023, available...Read more
Excluding all reclassifications between loan...Read more
The increase in net recoveries...Read more
The Board of Directors of...Read more
The increase in total revenue...Read more
The increase in total interest...Read more
FBBI’s ability to maintain the...Read more
The range of potential contributions...Read more
As a result, Trustmark recognized...Read more
This allows Management to hold...Read more
Liquidity is the ability to...Read more
Excluding other construction loan reclassifications,...Read more
The increase in other income,...Read more
The increase in interest expense...Read more
At December 31, 2023 and...Read more
LHFI secured by other 1-4...Read more
Trustmark uses short-term borrowings, such...Read more
Interest expense totaled $96.1 million...Read more
The PCL, LHFI for 2023...Read more
The PCL, LHFI for 2023...Read more
The PCL, LHFI for 2023...Read more
The increase in Trustmark's balance...Read more
Under the existing borrowing agreement,...Read more
During 2023, noninterest-bearing deposits decreased...Read more
During 2023, noninterest-bearing deposits decreased...Read more
In 2006, Trustmark enhanced its...Read more
Average federal funds purchased and...Read more
In this regard, Trustmark benefits...Read more
Trustmark’s capital position remained solid,...Read more
The plan provides for retirement...Read more
In recent years, there have...Read more
Trustmark’s ACL methodology for LHFI...Read more
The increase in the ACL,...Read more
During 2022, Trustmark reclassified its...Read more
During 2022, Trustmark reclassified its...Read more
– Financial Statements and Supplementary...Read more
The ACL on LHFI is...Read more
Under the program, eligible depository...Read more
The fair value of plan...Read more
Despite the importance of these...Read more
Trustmark intends to continue to...Read more
These scenarios are incorporated into...Read more
The BTFP is intended to...Read more
These segments are further disaggregated...Read more
These segments are further disaggregated...Read more
Trustmark utilizes a capital model...Read more
The amount of PCL and...Read more
Excluding the litigation settlement expenses,...Read more
Trustmark’s operations are managed along...Read more
Trustmark maintains a separate ACL...Read more
During 2006, Trustmark completed a...Read more
Interest earned on the FRBA...Read more
Since Trustmark is a holding...Read more
These ratios differ from capital...Read more
In addition, Management is not...Read more
The actual amount of the...Read more
On January 13, 2023, TNB...Read more
The increase in brokered CDs...Read more
The trust preferred securities mature...Read more
The increase in equipment expense...Read more
At December 31, 2023 and...Read more
Increased federal regulation of the...Read more
Because these derivatives have mirror-image...Read more
Trustmark’s liquidity position is continuously...Read more
Trustmark maintains a separate ACL...Read more
The model incorporates assumptions that...Read more
In this way, Management will...Read more
LHFI secured by 1-4 family...Read more
The upper and lower limits...Read more
Noninterest income for the Wealth...Read more
Trustmark has non-member status and...Read more
Trustmark has been committed to...Read more
These upper and lower limits...Read more
Interest expense totaled $326.0 million...Read more
The increase in noninterest income...Read more
Mortgage loan prepayment speeds, a...Read more
Average interest-bearing deposits for 2023...Read more
The increase in interest expense...Read more
Trustmark performed an annual impairment...Read more
Mortgage-backed securities and collateralized mortgage...Read more
For the plan year ending...Read more
Consistent cash flows from operations...Read more
During 2020, Trustmark issued $125.0...Read more
In general, stock repurchase plans...Read more
Deposits include interest-bearing and noninterest-bearing...Read more
Management has continued its practice...Read more
Changes of equal magnitude in...Read more
The increase in net interest...Read more
LHFI secured by other real...Read more
These loans are included in...Read more
The decrease in noninterest income...Read more
Additionally, on March 15, 2020,...Read more
For 2023, 2022 and 2021,...Read more
These agreements provide for reimbursement...Read more
Trustmark utilizes federal funds purchased,...Read more
Trustmark’s participation in the derivatives...Read more
At December 31, 2023, Trustmark...Read more
This approach applies to all...Read more
Trustmark’s Board of Directors declared...Read more
As a result of this...Read more
Trustmark’s deposits are its primary...Read more
The increase in services and...Read more
Trustmark recognizes as assets the...Read more
Trustmark's LHFI secured by 1-4...Read more
In the ordinary course of...Read more
The increase in noninterest income...Read more
Expected credit losses for off-balance...Read more
Expected credit losses for off-balance...Read more
Trustmark believes these measures are...Read more
LHFI at December 31, 2023...Read more
Representing a significant component of...Read more
None of the securities owned...Read more
In future periods, evaluations of...Read more
The subordinated notes are unsecured...Read more
At December 31, 2023, EF...Read more
Trustmark sold $4.8 million of...Read more
The ACL, LHFI represents Management’s...Read more
Management continually develops and applies...Read more
The process used to select...Read more
Trustmark maintains adequate federal funds...Read more
Trustmark did not exercise its...Read more
– Financial Statements and Supplementary...Read more
In addition, to account for...Read more
The industry data is used...Read more
For the closed-ended loan pools,...Read more
The decline in the effective...Read more
The expected funding rate is...Read more
The aggregate fair values of...Read more
The subordinated notes are obligations...Read more
In 2020, Trustmark enhanced its...Read more
Liquidity strategy also includes the...Read more
Additionally, Trustmark has the ability...Read more
Loans on nonaccrual have been...Read more
At December 31, 2023, Trustmark...Read more
The increase in noninterest expense...Read more
The increase in other miscellaneous...Read more
Determining the appropriateness of the...Read more
During 2022, Trustmark reclassified approximately...Read more
At December 31, 2023, EF...Read more
The BTFP was designed to...Read more
During the first quarter of...Read more
During 2021, Trustmark finalized a...Read more
The net interest margin-FTE for...Read more
In future periods, evaluations of...Read more
The decrease in noninterest expense...Read more
On October 9, 2023, Trustmark...Read more
On October 9, 2023, Trustmark...Read more
Tangible common equity, as defined...Read more
At December 31, 2023, Trustmark...Read more
Trustmark calculates an expected funding...Read more
The increase in noninterest expense...Read more
Given the nature of many...Read more
The decrease in noninterest income...Read more
At December 31, 2023, Trustmark...Read more
During 2023, Trustmark introduced the...Read more
The PCL, off-balance sheet credit...Read more
Shares purchased also provide Trustmark...Read more
The increase in the dividend...Read more
Furthermore, Management maintains funding capacity...Read more
Dividends per common share for...Read more
Risk and return can be...Read more
These capital requirements, as defined...Read more
Rate lock commitments are residential...Read more
Trustmark had a significant number...Read more
As December 31, 2023, all...Read more
Both assumptions can, and generally...Read more
The income tax credits related...Read more
Allocation of Trustmark’s ACL, LHFI...Read more
The total notional amount of...Read more
Trustmark's objectives in initiating this...Read more
At December 31, 2023, unrecognized...Read more
The decrease in the net...Read more
At December 31, 2023, brokered...Read more
Earning assets serve as the...Read more
Management keeps excess funding capacity...Read more
For the mortgage portfolio, Trustmark...Read more
At December 31, 2023, Trustmark...Read more
At December 31, 2023 and...Read more
At December 31, 2023 and...Read more
Some of these costs (particularly...Read more
During the pandemic, extraordinary measures...Read more
Trustmark had $370.0 million of...Read more
Trustmark had $370.0 million of...Read more
The Board of Directors of...Read more
Determining the appropriateness of the...Read more
Therefore, estimating prepayment speeds and/or...Read more
The actual amount of any...Read more
Trustmark uses such derivatives to...Read more
Other real estate at December...Read more
Loan amounts and loan-to-value ratios...Read more
The fair value of the...Read more
Trustmark had $712.0 million held...Read more
The increase in LHFI during...Read more
The increase in LHFI during...Read more
During 2022, Management elected to...Read more
Liquidity risk management is an...Read more
Trustmark's current quantitative methodologies do...Read more
Additionally, presentation of these measures...Read more
The increase in service charges...Read more
This decrease resulted primarily from...Read more
At the current levels, it...Read more
In addition, regardless of lien...Read more
The weighted differential was added...Read more
During the fourth quarter of...Read more
At December 31, 2023, unrealized...Read more
The increase in noninterest expense...Read more
Other construction loans decreased $161.1...Read more
The increase in interest income-FTE...Read more
The increase in net income...Read more
Excluding other construction loan reclassifications,...Read more
On March 12, 2023, the...Read more
During the fourth quarter 2023,...Read more
As a result, Management decided...Read more
When compared with December 31,...Read more
Trustmark may utilize the full...Read more
For regulatory capital purposes, the...Read more
Because Trustmark’s econometric PD models...Read more
These transactions are designed to...Read more
Furthermore, outside of stock ownership...Read more
At December 31, 2023, Trustmark...Read more
Noninterest income for the Wealth...Read more
Evaluations of the portfolio and...Read more
Evaluations of the portfolio and...Read more
Trustmark regularly models liquidity stress...Read more
Expected maturities may differ from...Read more
The weighted-average life of the...Read more
At December 31, 2023, the...Read more
– Financial Statements and Supplementary...Read more
Fluctuations in interest rates, as...Read more
For example, while the models...Read more
The sub-pool of credits is...Read more
The decrease in net income...Read more
Determining the appropriateness of the...Read more
Trustmark has elected the five-year...Read more
Noninterest income for the General...Read more
Management calculated the reserve using...Read more
The asset side of the...Read more
Trustmark’s and TNB’s minimum risk-based...Read more
Thus, for the affected population,...Read more
The increase in net income...Read more
Excluding the litigation settlement expense,...Read more
Trustmark elected the five-year phase-in...Read more
At December 31, 2023, approximately...Read more
Includes other intangible assets, net...Read more
Interest rate floor spreads designated...Read more
Net interest income-FTE for the...Read more
Loan fees included in interest...Read more
Management’s Asset/Liability Committee sets the...Read more
The ACL on LHFI is...Read more
The econometric models currently in...Read more
The quantitative rate is used...Read more
Finally, the loss estimate rate...Read more
Tax-exempt income has been adjusted...Read more
Beginning December 1, 2025, the...Read more
Other commercial LHFI and leases...Read more
The ACL, LHFI is adjusted...Read more
In 2024, TNB will have...Read more
As a general matter, the...Read more
Held to maturity securities are...Read more
This weighted average loss rate...Read more
Trustmark economically hedges interest rate...Read more
There are no significant conditions...Read more
– Business of this report,...Read more
The decrease in noninterest expense...Read more
In addition, Trustmark had $578.8...Read more
The liability portion of the...Read more
At December 31, 2023, Trustmark...Read more
Trustmark’s Common Equity Tier 1...Read more
Approval by TNB’s regulators is...Read more
Trustmark views net income adjusted...Read more
As a result, Management elected...Read more
These exchange-traded derivative instruments are...Read more
Evaluations of the unfunded commitments...Read more
Interest rate swaps designated as...Read more
During the fourth quarter of...Read more
The securities portfolio is utilized...Read more
In Management’s experience, many stock...Read more
Given the nature of many...Read more
Trustmark’s effective tax rate continues...Read more
The net interest margin-FTE excluding...Read more
Net interest income is the...Read more
At December 31, 2023, Trustmark...Read more
At December 31, 2023, the...Read more
By way of example, an...Read more
The first is the disconnect...Read more
The net interest margin is...Read more
The discount rate used to...Read more
These government interventions may have...Read more
Trustmark’s quantitative reserve does not...Read more
The increase in other expense...Read more
The accompanying Yield/Rate Analysis Table...Read more
While Management utilizes its best...Read more
Credit quality within the LHFI...Read more
To be categorized in this...Read more
The increase in salaries and...Read more
Adjustments to the ACL on...Read more
Adjustments to the ACL on...Read more
While Management utilizes its best...Read more
– Financial Statements and Supplementary...Read more
Trustmark cannot predict what the...Read more
Adjustments to the ACL on...Read more
In order to prevent the...Read more
A key objective of the...Read more
Net recoveries of other real...Read more
The decrease in average securities...Read more
Excluding the litigation settlement expense,...Read more
Trustmark’s policy is to fund...Read more
This factor is based on...Read more
In addition, Trustmark and TNB...Read more
As a result of this...Read more
Due to multiple periods having...Read more
Trustmark invests in partnerships that...Read more
The Chicago Mercantile Exchange rules...Read more
From time to time, Trustmark’s...Read more
The resulting net unrealized holding...Read more
For the years ended December...Read more
The change in interest due...Read more
Trustmark incurred a one-time settlement...Read more
In this way, Management believes...Read more
In addition, to the PD...Read more
In addition to the unfunded...Read more
Trustmark’s variable rate LHFI are...Read more
The nature and volume of...Read more
Management identified that the potential...Read more
The PD and LGD floors...Read more
For regulatory capital purposes, the...Read more
During 2022, Management noted that...Read more
Management’s Asset/Liability Committee, in its...Read more
The subordinated notes mature December...Read more
The subordinated notes mature December...Read more
As a part of Trustmark’s...Read more
During the next twelve months,...Read more
In addition to the funding...Read more
The earnings recognition of excluded...Read more
The net periodic benefit cost...Read more
Trustmark's External Factor – Pandemic...Read more
In order to mitigate volatility...Read more
Market rate changes may take...Read more
Trustmark has agreements with its...Read more
The yields and rates have...Read more
– Financial Statements and Supplementary...Read more
Gains and losses on derivatives...Read more
Additionally, a reserve rate is...Read more
The credit loss estimation process...Read more
The reserve rate is loan...Read more
In addition, Trustmark has entered...Read more
Management continues to closely monitor...Read more
Available for sale securities are...Read more
The increase in noninterest expense...Read more
Management believes that Trustmark has...Read more
The MSR fair value represents...Read more
The loan loss estimation process...Read more
Financial Statements, Disclosures and Schedules
Inside this 10-K Annual Report
Material Contracts, Statements, Certifications & more
Trustmark Corp provided additional information to their SEC Filing as exhibits
Ticker: TRMK
CIK: 36146
Form Type: 10-K Annual Report
Accession Number: 0000950170-24-015988
Submitted to the SEC: Thu Feb 15 2024 5:06:23 PM EST
Accepted by the SEC: Thu Feb 15 2024
Period: Sunday, December 31, 2023
Industry: National Commercial Banks