Slide 1: Trustmark Announces Third Quarter 2014 Financial Results
News Release Trustmark Corporation Announces Third Quarter 2014 Financial Results JACKSON, Miss. – October 28, 2014 – Trustmark Corporation (NASDAQ:TRMK) reported net income of $33.6 million in the third quarter of 2014, which represented diluted earnings per share of $0.50, an increase of 2.0% from
Slide 2: Credit Quality and Revenue Generation
Credit Quality · Other real estate declined 9.3% and 16.6% from the prior quarter and year, respectively · Allowance for loan losses represented 178.81% of nonperforming loans, excluding impaired loans Nonperforming loans totaled $88.3 million at September 30, 2014, an increase of $17.2 million from
Slide 3: Noninterest Expense and Appointment of Chief Administrative Officer
As a result of increased property and casualty business, insurance revenue in the third quarter totaled $9.2 million, an increase of 11.3% from the prior quarter. Wealth management revenue totaled $8.0 million, up 4.3% from the prior quarter, due principally to increased brokerage activity. Mortgage
Slide 4: Forward-Looking Statements
Forward-Looking Statements Certain statements contained in this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by words such as “may,” “hope,” “will,” “should,” “expect,” “plan,” “
Slide 5: Quarterly Average Balances
TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION September 30, 2014 ($ in thousands) (unaudited) Linked Quarter Year over Year QUARTERLY AVERAGE BALANCES 9/30/2014 6/30/2014 9/30/2013 $ Change % Change $ Change % Change Securities AFS-taxable $ 2,202,020 $ 2,205,352 $ 3,279,
Slide 6: Liabilities and Shareholders' Equity
Long-term FHLB advances 8,003 8,236 8,562 (233) -2.8% (559) -6.5% Subordinated notes 49,928 49,920 49,896 8 0.0% 32 0.1% Junior subordinated debt securities 61,856 61,856 61,856 - 0.0% - 0.0% Other liabilities 123,689 119,184 164,972 4,505 3.8% (41,283) -25.0% Total liabilities 10,681,218 10,720,105
Slide 7: Income Statements
TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION September 30, 2014 ($ in thousands except per share data) (unaudited) Quarter Ended Linked Quarter Year over Year INCOME STATEMENTS 9/30/2014 6/30/2014 9/30/2013 $ Change % Change $ Change % Change Interest and fees on LHFS &
Slide 8: Market Value, Book Value and Tangible Book Value
Market value-Close $ 23.04 $ 24.69 $ 25.60 Book value $ 20.98 $ 20.76 $ 19.79 Tangible book value $ 15.04 $ 14.78 $ 13.58 (1) - The efficiency ratio is noninterest expense to total net interest income (FTE) and noninterest income, excluding security gains (losses), amortization of partnership tax cr
Slide 9: Nonperforming Assets
TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION September 30, 2014 ($ in thousands) (unaudited) Quarter Ended Linked Quarter Year over Year NONPERFORMING ASSETS (1) 9/30/2014 6/30/2014 9/30/2013 $ Change % Change $ Change % Change Nonaccrual loans Alabama $ 852 $ 80 $ 81 $
Slide 10: Capital Ratios
Tier 1 leverage ratio 9.54% 9.43% 8.78% Tier 1 common risk-based capital ratio 12.74% 12.61% 11.92% Tier 1 risk-based capital ratio 13.47% 13.34% 12.69% Total risk-based capital ratio 14.70% 14.54% 14.02% (1) - Excludes Acquired Loans and Covered Other Real Estate (2) - Mississippi includes Central
Slide 11: Average Balances
TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION September 30, 2014 ($ in thousands) (unaudited) Quarter Ended Nine Months Ended AVERAGE BALANCES 9/30/2014 6/30/2014 3/31/2014 12/31/2013 9/30/2013 9/30/2014 9/30/2013 Securities AFS-taxable $ 2,202,020 $ 2,205,352 $ 2,136,392
Slide 12: Liabilities and Shareholders' Equity
Long-term FHLB advances 8,003 8,236 8,341 8,458 8,562 Subordinated notes 49,928 49,920 49,912 49,904 49,896 Junior subordinated debt securities 61,856 61,856 61,856 61,856 61,856 Other liabilities 123,689 119,184 121,919 137,338 164,972 Total liabilities 10,681,218 10,720,105 10,683,159 10,435,430 1
Slide 13: Income Statements
TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION September 30, 2014 ($ in thousands except per share data) (unaudited) Quarter Ended Nine Months Ended INCOME STATEMENTS 9/30/2014 6/30/2014 3/31/2014 12/31/2013 9/30/2013 9/30/2014 9/30/2013 Interest and fees on LHFS & LHFI-FT
Slide 14: Stock Performance
STOCK PERFORMANCE Market value-Close $ 23.04 $ 24.69 $ 25.35 $ 26.84 $ 25.60 Book value $ 20.98 $ 20.76 $ 20.37 $ 20.11 $ 19.79 Tangible book value $ 15.04 $ 14.78 $ 14.36 $ 13.95 $ 13.58 (1) - The efficiency ratio is noninterest expense to total net interest income (FTE) and noninterest income, exc
Slide 15: Nonperforming Assets
TRUSTMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL INFORMATION September 30, 2014 ($ in thousands) (unaudited) Quarter Ended NONPERFORMING ASSETS (1) 9/30/2014 6/30/2014 3/31/2014 12/31/2013 9/30/2013 Nonaccrual loans Alabama $ 852 $ 80 $ 96 $ 14 $ 81 Florida 10,986 11,041 9,956 12,278 14
Slide 16: Capital Ratios
Tangible equity/risk-weighted assets 12.24% 12.19% 12.08% 11.88% 11.66% Tier 1 leverage ratio 9.54% 9.43% 9.14% 9.06% 8.78% Tier 1 common risk-based capital ratio 12.74% 12.61% 12.37% 12.21% 11.92% Tier 1 risk-based capital ratio 13.47% 13.34% 13.11% 12.97% 12.69% Total risk-based capital ratio 14.7
Slide 17: Note 1 – Business Combinations; Note 2 – Securities
TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL INFORMATION September 30, 2014 ($ in thousands) (unaudited) Note 1 – Business Combinations Oxford, Mississippi Branches On July 26, 2013, Trustmark National Bank (TNB), a subsidiary of Trustmark Corporation (Trustmark), completed
Slide 18: Note 3 – Loan Composition
TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL INFORMATION September 30, 2014 ($ in thousands) (unaudited) Note 3 – Loan Composition LHFI BY TYPE (excluding acquired loans) 9/30/2014 6/30/2014 3/31/2014 12/31/2013 9/30/2013 Loans secured by real estate: Construction, land dev
Slide 19: Note 3 – Loan Composition by Region
TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL INFORMATION September 30, 2014 ($ in thousands) (unaudited) Note 3 – Loan Composition (continued) September 30, 2014 Tennessee Mississippi (Memphis, (Central and TN and Southern Northern MS LHFI - COMPOSITION BY REGION (1) Total
Slide 20: Note 4 – Yields on Earning Assets and Interest-Bearing Liabilities
TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL INFORMATION September 30, 2014 ($ in thousands) (unaudited) 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
Slide 21: Note 6 – Other Noninterest Income and Expense
TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL INFORMATION September 30, 2014 ($ in thousands) (unaudited) Note 6 – Other Noninterest Income and Expense Other noninterest income consisted of the following for the periods presented ($ in thousands): Quarter Ended Nine Months E
Slide 22: Note 7 – Non-GAAP Financial Measures
TRUSTMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL INFORMATION September 30, 2014 ($ in thousands) (unaudited) Note 7 - Non-GAAP Financial Measures (continued) Quarter Ended Nine Months Ended 9/30/2014 6/30/2014 3/31/2014 12/31/2013 9/30/2013 9/30/2014 9/30/2013 TANGIBLE EQUITY A
Slide 23: Building a Premier Regional Financial Services Organization
YY . ZO Teustmark = sour Banking and Financial Solutions October 28, 2014 Building a Premier Regional Financial Services Organization
Slide 24: Forward-Looking Statements
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,” “
Slide 25: Third Quarter in Review
Third Quarter in Review Solid financial results; Q3 EPS of $0.50 — up 2.0% from prior quarter and year v v Six consecutive quarters of legacy loan portfolio growth: increased 2.4% from the prior quarter, or at an annualized rate of 9.6% Acquired loans performance: interest income remained relatively
Slide 26: Continued Growth in Loan Portfolio
Continued Growth in Loan Portfolio Six consecutive quarters of growth in legacy loan portfolio Y Loans held for investment (“HFI”) increased by $146.7 million, or at an annualized rate of 9.6%, to $6.3 billion from the prior quarter; year-to- date, loans HFI increased by $535 million, or 12.3% annua
Slide 27: Acquired Loan Portfolio
Acquired Loan Portfolio Performance of acquired loans Y Interest income on acquired loans remained Interest Income & Impairment— Acquired Loans relatively stable at $23.2 million despite ano = ——————— acquired loan run-off q. lean accretion / int. $14500 $14,097 $12975 $14,310 $ 14,462 run Acq, reco
Slide 28: Credit Risk Management
Credit Risk Management Continued resolution of problem assets and effective credit risk management Y Other real estate decreased $9.9 million, or 9.3%, from the prior quarter and $19.3, or 16.6%, from the prior year vs Nonperforming loans totaled $88.3 million, an increase of $17.2 million from the
Slide 29: Attractive, Low-Cost Deposit Base
Attractive, Low-Cost Deposit Base Well diversified deposit base serves as an excellent, low-cost source of funds v Average deposits in the third quarter declined $204.5 million as the $97.8 million increase in noninterest- bearing deposits was more than offset by a decline in interest-bearing deposi
Slide 30: Income Statement Highlights - Revenue
Income Statement Highlights - Revenue Revenue remained stable at $149.1 million in third quarter despite mandated $2.6 million reduction in interchange income Net Interest Income—FTE NoninterestIncome (Sin millions) (Sin millions) $102 $106 $00 $109 $110 $44 $43 i . : | | I | Q3-13 Q4-13 Qi-14 Q2-14
Slide 31: Income Statement Highlights - Noninterest Expense
Income Statement Highlights - Noninterest Expense Routine noninterest expense remained well-controlled v Excluding ORE and intangible amortization of $3.1 million, noninterest expense in Q3 remained stable at $97.1 million > Salary and benefits expense increased by 1.0% from the prior quarter to $56
Slide 32: Capital Management
Capital Management Solid capital position reflects consistent profitability of our diversified financial services businesses Y Tangible equity to tangible assets ratio was 8.67%, up 16 basis points from the prior quarter, while the total risk-based capital ratio expanded 16 basis points to 14.70% Y
Slide 33: Strategic Priorities to Enhance Shareholder Value
Strategic Priorities to Enhance Shareholder Value VY Profitable revenue generation Y Credit quality » Create and expand customer relationships >» Maintain disciplined underwriting and pricing >» Loan growth > Resolution of problem assets » Noninterest income — deposit services, wealth management, in