þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2011
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________________ to ___________________
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Mississippi
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64-0471500
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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248 East Capitol Street, Jackson, Mississippi
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39201
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
þ
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Accelerated filer
o
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||
Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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(Unaudited)
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||||||||
June 30,
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December 31,
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|||||||
2011
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2010
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|||||||
Assets
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||||||||
Cash and due from banks (noninterest-bearing)
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$ | 221,853 | $ | 161,544 | ||||
Federal funds sold and securities purchased under reverse repurchase agreements
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4,576 | 11,773 | ||||||
Securities available for sale (at fair value)
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2,399,042 | 2,177,249 | ||||||
Securities held to maturity (fair value: $92,149-2011; $145,143-2010)
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87,923 | 140,847 | ||||||
Loans held for sale (LHFS)
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123,244 | 153,044 | ||||||
Loans held for investment (LHFI), excluding covered loans
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5,906,316 | 6,060,242 | ||||||
Less allowance for loan losses
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86,846 | 93,510 | ||||||
Net LHFI, excluding covered loans
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5,819,470 | 5,966,732 | ||||||
Covered loans
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88,558 | - | ||||||
Net LHFI and covered loans
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5,908,028 | 5,966,732 | ||||||
Premises and equipment, net
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140,640 | 142,289 | ||||||
Mortgage servicing rights
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50,111 | 51,151 | ||||||
Goodwill
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291,104 | 291,104 | ||||||
Identifiable intangible assets
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15,651 | 16,306 | ||||||
Other real estate, excluding covered other real estate
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89,999 | 86,704 | ||||||
Covered other real estate
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7,485 | - | ||||||
FDIC indemnification asset
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33,327 | - | ||||||
Other assets
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325,468 | 355,159 | ||||||
Total Assets
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$ | 9,698,451 | $ | 9,553,902 | ||||
Liabilities
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||||||||
Deposits:
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||||||||
Noninterest-bearing
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$ | 1,806,908 | $ | 1,636,625 | ||||
Interest-bearing
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5,825,426 | 5,407,942 | ||||||
Total deposits
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7,632,334 | 7,044,567 | ||||||
Federal funds purchased and securities sold under repurchase agreements
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539,693 | 700,138 | ||||||
Short-term borrowings
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90,156 | 425,343 | ||||||
Long-term FHLB advances
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2,794 | - | ||||||
Subordinated notes
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49,823 | 49,806 | ||||||
Junior subordinated debt securities
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61,856 | 61,856 | ||||||
Other liabilities
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129,025 | 122,708 | ||||||
Total Liabilities
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8,505,681 | 8,404,418 | ||||||
Shareholders' Equity
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||||||||
Common stock, no par value:
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||||||||
Authorized: 250,000,000 shares
Issued and outstanding: 64,119,235 shares - 2011;
63,917,591 shares - 2010
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13,359 | 13,318 | ||||||
Capital surplus
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263,940 | 256,675 | ||||||
Retained earnings
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911,797 | 890,917 | ||||||
Accumulated other comprehensive income (loss), net of tax
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3,674 | (11,426 | ) | |||||
Total Shareholders' Equity
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1,192,770 | 1,149,484 | ||||||
Total Liabilities and Shareholders' Equity
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$ | 9,698,451 | $ | 9,553,902 | ||||
See notes to consolidated financial statements.
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Three Months Ended
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Six Months Ended
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|||||||||||||||
June 30,
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June 30,
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|||||||||||||||
2011
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2010
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2011
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2010
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|||||||||||||
Interest Income
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||||||||||||||||
Interest and fees on loans
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$ | 77,313 | $ | 81,731 | $ | 153,583 | $ | 163,328 | ||||||||
Interest on securities:
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||||||||||||||||
Taxable
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20,374 | 19,626 | 40,366 | 39,361 | ||||||||||||
Tax exempt
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1,375 | 1,398 | 2,758 | 2,815 | ||||||||||||
Interest on federal funds sold and securities purchased under reverse repurchase agreements
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7 | 7 | 15 | 15 | ||||||||||||
Other interest income
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333 | 366 | 665 | 749 | ||||||||||||
Total Interest Income
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99,402 | 103,128 | 197,387 | 206,268 | ||||||||||||
Interest Expense
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||||||||||||||||
Interest on deposits
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9,936 | 12,785 | 19,655 | 26,689 | ||||||||||||
Interest on federal funds purchased and securities sold under repurchase agreements
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216 | 260 | 554 | 486 | ||||||||||||
Other interest expense
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1,420 | 1,597 | 2,973 | 3,189 | ||||||||||||
Total Interest Expense
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11,572 | 14,642 | 23,182 | 30,364 | ||||||||||||
Net Interest Income
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87,830 | 88,486 | 174,205 | 175,904 | ||||||||||||
Provision for loan losses
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8,116 | 10,398 | 15,653 | 25,493 | ||||||||||||
Net Interest Income After Provision for Loan Losses
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79,714 | 78,088 | 158,552 | 150,411 | ||||||||||||
Noninterest Income
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||||||||||||||||
Service charges on deposit accounts
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12,851 | 14,220 | 24,758 | 27,197 | ||||||||||||
Insurance commissions
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6,862 | 6,884 | 13,374 | 13,721 | ||||||||||||
Wealth management
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5,760 | 5,558 | 11,746 | 10,913 | ||||||||||||
Bank card and other fees
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6,854 | 6,417 | 13,329 | 12,297 | ||||||||||||
Mortgage banking, net
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6,269 | 8,910 | 10,991 | 14,982 | ||||||||||||
Other, net
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7,785 | 1,103 | 8,547 | 1,982 | ||||||||||||
Securities gains, net
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51 | 1,855 | 58 | 2,224 | ||||||||||||
Total Noninterest Income
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46,432 | 44,947 | 82,803 | 83,316 | ||||||||||||
Noninterest Expense
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||||||||||||||||
Salaries and employee benefits
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44,203 | 43,282 | 88,239 | 86,136 | ||||||||||||
Services and fees
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10,780 | 10,523 | 21,050 | 20,778 | ||||||||||||
Net occupancy - premises
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5,050 | 4,917 | 10,123 | 9,951 | ||||||||||||
Equipment expense
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4,856 | 4,247 | 10,000 | 8,550 | ||||||||||||
FDIC assessment expense
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1,938 | 3,035 | 4,688 | 6,182 | ||||||||||||
ORE/Foreclosure expense
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4,704 | 9,278 | 7,917 | 12,339 | ||||||||||||
Other expense
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9,817 | 9,146 | 19,349 | 16,853 | ||||||||||||
Total Noninterest Expense
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81,348 | 84,428 | 161,366 | 160,789 | ||||||||||||
Income Before Income Taxes
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44,798 | 38,607 | 79,989 | 72,938 | ||||||||||||
Income taxes
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13,196 | 12,446 | 24,374 | 23,322 | ||||||||||||
Net Income
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$ | 31,602 | $ | 26,161 | $ | 55,615 | $ | 49,616 | ||||||||
Earnings Per Common Share
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||||||||||||||||
Basic
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$ | 0.49 | $ | 0.41 | $ | 0.87 | $ | 0.78 | ||||||||
Diluted
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$ | 0.49 | $ | 0.41 | $ | 0.87 | $ | 0.78 | ||||||||
Dividends Per Common Share
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$ | 0.23 | $ | 0.23 | $ | 0.46 | $ | 0.46 | ||||||||
See notes to consolidated financial statements.
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2011
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2010
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|||||||
Balance, January 1,
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$ | 1,149,484 | $ | 1,110,060 | ||||
Net income per consolidated statements of income
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55,615 | 49,616 | ||||||
Other comprehensive income:
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||||||||
Net change in fair value of securities available for sale
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13,594 | 5,919 | ||||||
Net change in defined benefit plans
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1,506 | 1,109 | ||||||
Comprehensive income
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70,715 | 56,644 | ||||||
Common stock dividends paid
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(29,740 | ) | (29,642 | ) | ||||
Common stock issued-net, long-term incentive plans:
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||||||||
Stock options
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1,507 | 2,480 | ||||||
Restricted stock
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(1,868 | ) | (1,003 | ) | ||||
Excess tax benefit from stock-based compensation arrangements
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630 | 1,380 | ||||||
Compensation expense, long-term incentive plans
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2,042 | 2,521 | ||||||
Other
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- | (60 | ) | |||||
Balance, June 30,
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$ | 1,192,770 | $ | 1,142,380 |
Six Months Ended June 30,
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||||||||
2011
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2010
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|||||||
Operating Activities
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||||||||
Net income
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$ | 55,615 | $ | 49,616 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Provision for loan losses
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15,653 | 25,493 | ||||||
Depreciation and amortization
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11,912 | 11,826 | ||||||
Net amortization of securities
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3,142 | 871 | ||||||
Securities gains, net
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(58 | ) | (2,224 | ) | ||||
Gains on sales of loans, net
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(4,953 | ) | (5,652 | ) | ||||
Decrease in FDIC indemnification asset
|
6 | - | ||||||
Bargain purchase gain on acquisition
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(7,456 | ) | - | |||||
Deferred income tax provision (benefit)
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4,345 | (7,870 | ) | |||||
Proceeds from sales of loans held for sale
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440,980 | 468,040 | ||||||
Purchases and originations of loans held for sale
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(396,536 | ) | (450,766 | ) | ||||
Originations and sales of mortgage servicing rights, net
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(6,380 | ) | (6,773 | ) | ||||
Net decrease in other assets
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14,388 | 36,481 | ||||||
Net decrease in other liabilities
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(6,234 | ) | (10,147 | ) | ||||
Other operating activities, net
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11,943 | 21,384 | ||||||
Net cash provided by operating activities
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136,367 | 130,279 | ||||||
Investing Activities
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||||||||
Proceeds from calls and maturities of securities held to maturity
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52,959 | 40,176 | ||||||
Proceeds from calls and maturities of securities available for sale
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268,145 | 244,376 | ||||||
Proceeds from sales of securities available for sale
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22,996 | 65,074 | ||||||
Purchases of securities available for sale
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(471,760 | ) | (370,865 | ) | ||||
Net decrease in federal funds sold and securities
purchased under reverse repurchase agreements
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7,197 | 661 | ||||||
Net decrease in loans
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117,587 | 202,258 | ||||||
Purchases of premises and equipment
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(4,477 | ) | (2,254 | ) | ||||
Proceeds from sales of premises and equipment
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395 | 3 | ||||||
Proceeds from sales of other real estate
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23,742 | 24,246 | ||||||
Net cash received in business combination
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78,896 | - | ||||||
Net cash provided by investing activities
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95,680 | 203,675 | ||||||
Financing Activities
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||||||||
Net increase (decrease) in deposits
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383,418 | (49,071 | ) | |||||
Net decrease in federal funds purchased and securities sold under repurchase agreements
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(160,445 | ) | (160,665 | ) | ||||
Net decrease in short-term borrowings
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(365,240 | ) | (124,587 | ) | ||||
Common stock dividends
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(29,740 | ) | (29,642 | ) | ||||
Common stock issued-net, long-term incentive plans
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(361 | ) | 1,477 | |||||
Excess tax benefit from stock-based compensation arrangements
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630 | 1,380 | ||||||
Net cash used in financing activities
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(171,738 | ) | (361,108 | ) | ||||
Increase (decrease) in cash and cash equivalents
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60,309 | (27,154 | ) | |||||
Cash and cash equivalents at beginning of period
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161,544 | 213,519 | ||||||
Cash and cash equivalents at end of period
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$ | 221,853 | $ | 186,365 | ||||
See notes to consolidated financial statements.
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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 |
Securities Available for Sale | Securities Held to Maturity | |||||||||||||||||||||||||||||||
Gross
|
Gross
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Estimated
|
Gross
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Gross
|
Estimated
|
|||||||||||||||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||||||||||||||
June 30, 2011
|
Cost
|
Gains
|
(Losses)
|
Value
|
Cost
|
Gains
|
(Losses)
|
Value
|
||||||||||||||||||||||||
U.S. Government agency obligations
|
||||||||||||||||||||||||||||||||
Issued by U.S. Government agencies
|
$ | 7 | $ | - | $ | - | $ | 7 | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Issued by U.S. Government sponsored agencies
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103,302 | 323 | (685 | ) | 102,940 | - | - | - | - | |||||||||||||||||||||||
Obligations of states and political subdivisions
|
180,413 | 5,814 | (193 | ) | 186,034 | 46,931 | 3,325 | (3 | ) | 50,253 | ||||||||||||||||||||||
Mortgage-backed securities | ||||||||||||||||||||||||||||||||
Residential mortgage pass-through securities
|
||||||||||||||||||||||||||||||||
Guaranteed by GNMA
|
14,125 | 865 | - | 14,990 | 5,547 | 261 | - | 5,808 | ||||||||||||||||||||||||
Issued by FNMA and FHLMC
|
413,754 | 2,851 | (3,112 | ) | 413,493 | - | - | - | - | |||||||||||||||||||||||
Other residential mortgage-backed securities
|
||||||||||||||||||||||||||||||||
Issued or guaranteed by FNMA, FHLMC or GNMA
|
1,509,675 | 47,127 | (126 | ) | 1,556,676 | 32,456 | 594 | - | 33,050 | |||||||||||||||||||||||
Commercial mortgage-backed securities
|
||||||||||||||||||||||||||||||||
Issued or guaranteed by FNMA, FHLMC or GNMA
|
121,577 | 3,516 | (191 | ) | 124,902 | 2,989 | 49 | - | 3,038 | |||||||||||||||||||||||
Total
|
$ | 2,342,853 | $ | 60,496 | $ | (4,307 | ) | $ | 2,399,042 | $ | 87,923 | $ | 4,229 | $ | (3 | ) | $ | 92,149 |
December 31, 2010
|
||||||||||||||||||||||||||||||||
U.S. Government agency obligations
|
||||||||||||||||||||||||||||||||
Issued by U.S. Government agencies
|
$ | 12 | $ | - | $ | - | $ | 12 | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Issued by U.S. Government sponsored agencies
|
124,093 | 114 | (2,184 | ) | 122,023 | - | - | - | - | |||||||||||||||||||||||
Obligations of states and political subdivisions
|
159,418 | 2,259 | (2,040 | ) | 159,637 | 53,246 | 2,628 | (10 | ) | 55,864 | ||||||||||||||||||||||
Mortgage-backed securities
|
||||||||||||||||||||||||||||||||
Residential mortgage pass-through securities
|
||||||||||||||||||||||||||||||||
Guaranteed by GNMA
|
11,719 | 723 | - | 12,442 | 6,058 | 171 | - | 6,229 | ||||||||||||||||||||||||
Issued by FNMA and FHLMC
|
432,162 | 1,188 | (6,846 | ) | 426,504 | - | - | - | - | |||||||||||||||||||||||
Other residential mortgage-backed securities
|
||||||||||||||||||||||||||||||||
Issued or guaranteed by FNMA, FHLMC or GNMA
|
1,361,339 | 43,788 | (4,311 | ) | 1,400,816 | 78,526 | 1,503 | - | 80,029 | |||||||||||||||||||||||
Commercial mortgage-backed securities
|
||||||||||||||||||||||||||||||||
Issued or guaranteed by FNMA, FHLMC or GNMA
|
54,331 | 2,007 | (523 | ) | 55,815 | 3,017 | 6 | (2 | ) | 3,021 | ||||||||||||||||||||||
Total
|
$ | 2,143,074 | $ | 50,079 | $ | (15,904 | ) | $ | 2,177,249 | $ | 140,847 | $ | 4,308 | $ | (12 | ) | $ | 145,143 |
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
Gross
|
Gross
|
Gross
|
||||||||||||||||||||||
Estimated
|
Unrealized
|
Estimated
|
Unrealized
|
Estimated
|
Unrealized
|
|||||||||||||||||||
June 30, 2011
|
Fair Value
|
(Losses)
|
Fair Value
|
(Losses)
|
Fair Value
|
(Losses)
|
||||||||||||||||||
U.S. Government agency obligations
|
||||||||||||||||||||||||
Issued by U.S. Government sponsored agencies
|
$ | 64,790 | $ | (685 | ) | $ | - | $ | - | $ | 64,790 | $ | (685 | ) | ||||||||||
Obligations of states and political subdivisions
|
16,616 | (188 | ) | 303 | (8 | ) | 16,919 | (196 | ) | |||||||||||||||
Mortgage-backed securities
|
||||||||||||||||||||||||
Residential mortgage pass-through securities
|
||||||||||||||||||||||||
Issued by FNMA and FHLMC
|
282,872 | (3,112 | ) | - | - | 282,872 | (3,112 | ) | ||||||||||||||||
Other residential mortgage-backed securities
|
||||||||||||||||||||||||
Issued or guaranteed by FNMA, FHLMC or GNMA
|
19,341 | (126 | ) | - | - | 19,341 | (126 | ) | ||||||||||||||||
Commercial mortgage-backed securities
|
||||||||||||||||||||||||
Issued by FNMA and FHLMC
|
16,297 | (191 | ) | - | - | 16,297 | (191 | ) | ||||||||||||||||
Total
|
$ | 399,916 | $ | (4,302 | ) | $ | 303 | $ | (8 | ) | $ | 400,219 | $ | (4,310 | ) |
December 31, 2010
|
||||||||||||||||||||||||
U.S. Government agency obligations
|
||||||||||||||||||||||||
Issued by U.S. Government sponsored agencies
|
$ | 86,917 | $ | (2,184 | ) | $ | - | $ | - | $ | 86,917 | $ | (2,184 | ) | ||||||||||
Obligations of states and political subdivisions
|
65,523 | (2,045 | ) | 307 | (5 | ) | 65,830 | (2,050 | ) | |||||||||||||||
Mortgage-backed securities
|
||||||||||||||||||||||||
Residential mortgage pass-through securities
|
||||||||||||||||||||||||
Issued by FNMA and FHLMC
|
312,787 | (6,846 | ) | - | - | 312,787 | (6,846 | ) | ||||||||||||||||
Other residential mortgage-backed securities
|
||||||||||||||||||||||||
Issued or guaranteed by FNMA, FHLMC or GNMA
|
232,279 | (4,311 | ) | - | - | 232,279 | (4,311 | ) | ||||||||||||||||
Commercial mortgage-backed securities
|
||||||||||||||||||||||||
Issued or guaranteed by FNMA, FHLMC or GNMA
|
21,073 | (525 | ) | - | - | 21,073 | (525 | ) | ||||||||||||||||
Total
|
$ | 718,579 | $ | (15,911 | ) | $ | 307 | $ | (5 | ) | $ | 718,886 | $ | (15,916 | ) |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||||
Available for Sale
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Proceeds from sales of securities
|
$ | 22,996 | $ | 52,621 | $ | 22,996 | $ | 65,074 | |||||||||
Gross realized gains
|
51 | 1,852 | 51 | 2,216 | |||||||||||||
Held to Maturity
|
|||||||||||||||||
Proceeds from calls of securities
|
$ | - | $ | 2,045 | $ | 1,290 | $ | 3,750 | |||||||||
Gross realized gains
|
- | 3 | 7 | 8 |
Securities
|
Securities
|
|||||||||||||||
Available for Sale
|
Held to Maturity
|
|||||||||||||||
Estimated
|
Estimated
|
|||||||||||||||
Amortized
|
Fair
|
Amortized
|
Fair
|
|||||||||||||
Cost
|
Value
|
Cost
|
Value
|
|||||||||||||
Due in one year or less
|
$ | 35,726 | $ | 35,785 | $ | 3,162 | $ | 3,189 | ||||||||
Due after one year through five years
|
47,562 | 49,201 | 15,640 | 16,211 | ||||||||||||
Due after five years through ten years
|
188,751 | 192,264 | 20,273 | 22,062 | ||||||||||||
Due after ten years
|
11,683 | 11,731 | 7,856 | 8,791 | ||||||||||||
283,722 | 288,981 | 46,931 | 50,253 | |||||||||||||
Mortgage-backed securities
|
2,059,131 | 2,110,061 | 40,992 | 41,896 | ||||||||||||
Total
|
$ | 2,342,853 | $ | 2,399,042 | $ | 87,923 | $ | 92,149 |
June 30, 2011
|
December 31, 2010
|
|||||||
Loans secured by real estate:
|
||||||||
Construction, land development and other land loans
|
$ | 510,867 | $ | 583,316 | ||||
Secured by 1-4 family residential properties
|
1,737,744 | 1,732,056 | ||||||
Secured by nonfarm, nonresidential properties
|
1,457,328 | 1,498,108 | ||||||
Other
|
208,797 | 231,963 | ||||||
Commercial and industrial loans
|
1,082,127 | 1,068,369 | ||||||
Consumer loans
|
332,032 | 402,165 | ||||||
Other loans
|
577,421 | 544,265 | ||||||
LHFI, excluding covered loans
|
5,906,316 | 6,060,242 | ||||||
Less allowance for loan losses
|
86,846 | 93,510 | ||||||
Net LHFI, excluding covered loans
|
$ | 5,819,470 | $ | 5,966,732 |
June 30, 2011
|
||||||||||||
LHFI Evaluated for Impairment
|
||||||||||||
Individually
|
Collectively
|
Total
|
||||||||||
Loans secured by real estate:
|
||||||||||||
Construction, land development and other land loans
|
$ | 46,057 | $ | 464,810 | $ | 510,867 | ||||||
Secured by 1-4 family residential properties
|
23,604 | 1,714,140 | 1,737,744 | |||||||||
Secured by nonfarm, nonresidential properties
|
29,055 | 1,428,273 | 1,457,328 | |||||||||
Other
|
5,120 | 203,677 | 208,797 | |||||||||
Commercial and industrial loans
|
15,180 | 1,066,947 | 1,082,127 | |||||||||
Consumer loans
|
997 | 331,035 | 332,032 | |||||||||
Other loans
|
1,005 | 576,416 | 577,421 | |||||||||
Total
|
$ | 121,018 | $ | 5,785,298 | $ | 5,906,316 |
December 31, 2010
|
||||||||||||
LHFI Evaluated for Impairment
|
||||||||||||
Individually
|
Collectively
|
Total
|
||||||||||
Loans secured by real estate:
|
||||||||||||
Construction, land development and other land loans
|
$ | 57,831 | $ | 525,485 | $ | 583,316 | ||||||
Secured by 1-4 family residential properties
|
30,313 | 1,701,743 | 1,732,056 | |||||||||
Secured by nonfarm, nonresidential properties
|
29,013 | 1,469,095 | 1,498,108 | |||||||||
Other
|
6,154 | 225,809 | 231,963 | |||||||||
Commercial and industrial loans
|
16,107 | 1,052,262 | 1,068,369 | |||||||||
Consumer loans
|
2,112 | 400,053 | 402,165 | |||||||||
Other loans
|
1,393 | 542,872 | 544,265 | |||||||||
Total
|
$ | 142,923 | $ | 5,917,319 | $ | 6,060,242 |
June 30, 2011
|
||||||||||||||||||||||||
Total LHFI
|
||||||||||||||||||||||||
Unpaid
|
with No Related
|
Total LHFI
|
Total
|
Average
|
||||||||||||||||||||
Principal
|
Allowance
|
with an Allowance
|
Carrying
|
Related
|
Recorded
|
|||||||||||||||||||
Balance
|
Recorded
|
Recorded
|
Amount
|
Allowance
|
Investment
|
|||||||||||||||||||
Loans secured by real estate:
|
||||||||||||||||||||||||
Construction, land development and other land loans
|
$ | 71,120 | $ | 29,286 | $ | 16,771 | $ | 46,057 | $ | 4,207 | $ | 51,944 | ||||||||||||
Secured by 1-4 family residential properties
|
32,472 | 2,380 | 21,224 | 23,604 | 630 | 26,958 | ||||||||||||||||||
Secured by nonfarm, nonresidential properties
|
34,218 | 19,296 | 9,759 | 29,055 | 1,291 | 29,034 | ||||||||||||||||||
Other
|
5,918 | 4,218 | 902 | 5,120 | 45 | 5,637 | ||||||||||||||||||
Commercial and industrial loans
|
16,741 | 8,945 | 6,235 | 15,180 | 1,812 | 15,644 | ||||||||||||||||||
Consumer loans
|
1,309 | - | 997 | 997 | 12 | 1,555 | ||||||||||||||||||
Other loans
|
2,525 | 753 | 252 | 1,005 | 50 | 1,199 | ||||||||||||||||||
Total
|
$ | 164,303 | $ | 64,878 | $ | 56,140 | $ | 121,018 | $ | 8,047 | $ | 131,971 |
December 31, 2010
|
||||||||||||||||||||||||
Total LHFI
|
||||||||||||||||||||||||
Unpaid
|
with No Related
|
Total LHFI
|
Total
|
Average
|
||||||||||||||||||||
Principal
|
Allowance
|
with an Allowance
|
Carrying
|
Related
|
Recorded
|
|||||||||||||||||||
Balance
|
Recorded
|
Recorded
|
Amount
|
Allowance
|
Investment
|
|||||||||||||||||||
Loans secured by real estate:
|
||||||||||||||||||||||||
Construction, land development and other land loans
|
$ | 81,945 | $ | 33,201 | $ | 24,630 | $ | 57,831 | $ | 6,782 | $ | 69,817 | ||||||||||||
Secured by 1-4 family residential properties
|
41,475 | 3,082 | 27,230 | 30,312 | 1,745 | 30,888 | ||||||||||||||||||
Secured by nonfarm, nonresidential properties
|
35,679 | 18,582 | 10,431 | 29,013 | 1,580 | 23,535 | ||||||||||||||||||
Other
|
7,009 | 5,042 | 1,113 | 6,155 | 95 | 4,126 | ||||||||||||||||||
Commercial and industrial loans
|
17,413 | 9,172 | 6,935 | 16,107 | 1,514 | 11,369 | ||||||||||||||||||
Consumer loans
|
2,420 | - | 2,112 | 2,112 | 23 | 1,544 | ||||||||||||||||||
Other loans
|
2,868 | 1,107 | 286 | 1,393 | 58 | 765 | ||||||||||||||||||
Total
|
$ | 188,809 | $ | 70,186 | $ | 72,737 | $ | 142,923 | $ | 11,797 | $ | 142,044 |
|
·
|
Financial Statement Exceptions – focuses on the officers’ ongoing efforts to obtain, evaluate and/or document sufficient information to determine the quality and status of the credits. This area includes the quality and condition of the files in terms of content, completeness and organization. Included is an evaluation of the systems/procedures used to insure compliance with policy such as financial statements, review memos and loan agreement covenants.
|
|
·
|
Underwriting/Policy – evaluates whether credits are adequately analyzed, appropriately structured and properly approved within requirements of bank loan policy. A properly approved credit is approved by adequate authority in a timely manner with all conditions of approval fulfilled. Total policy exceptions measure the level of exceptions to loan policy within a loan portfolio.
|
|
·
|
Collateral Documentation – focuses on the adequacy of documentation to support the obligation, perfect Trustmark’s collateral position and protect collateral value. There are two parts to this measure:
|
|
ü
|
Collateral exceptions where certain collateral documentation is either not present, is not considered current or has expired.
|
|
ü
|
90 days and over collateral exceptions are where certain collateral documentation is either not present, is not considered current or has expired and the exception has been identified in excess of 90 days.
|
|
·
|
Compliance with Law – focuses on underwriting, documentation, approval and reporting in compliance with banking laws and regulations. Primary emphasis is directed to Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) and Regulation O requirements.
|
|
·
|
Risk Rate (RR) 1 through RR 6 – Grades one through six represent groups of loans that are not subject to adverse criticism as defined in regulatory guidance. Loans in these groups exhibit characteristics that represent low to moderate risk measured by using a variety of credit risk criteria such as cash flow coverage, debt service coverage, balance sheet leverage, liquidity, management experience, industry position, prevailing economic conditions, support from secondary sources of repayment and other credit factors that may be relevant to a specific loan. In general, these loans are supported by properly margined collateral and guarantees of principal parties.
|
|
·
|
Other Assets Especially Mentioned (OAEM) - (RR 7) – a loan that has a potential weakness that if not corrected will lead to a more severe rating. This rating is for credits that are currently protected but potentially weak because of an adverse feature or condition that if not corrected will lead to a further downgrade.
|
|
·
|
Substandard (RR 8) – a loan that has at least one identified weakness that is well defined. This rating is for credits where the primary sources of repayment are not viable at this time or where either the capital or collateral is not adequate to support the loan and the secondary means of repayment do not provide a sufficient level of support to offset the identified weakness but are sufficient to prevent a loss at this time. While these credits do not demonstrate any level of loss at this time, further deterioration would lead to a further downgrade.
|
|
·
|
Doubtful (RR 9) – a loan with an identified weakness that does not have a valid secondary source of repayment. Generally these credits have an impaired primary source of repayment and secondary sources are not sufficient to prevent a loss in the credit.
|
|
·
|
Loss (RR 10) – a loan or a portion of a loan that is deemed to be uncollectible.
|
|
·
|
Trustmark’s Credit Quality Review Committee meets monthly and performs the following functions: detailed review and evaluation of all loans of $100 thousand or more that are either delinquent thirty days or more or on nonaccrual, including determination of appropriate risk ratings, accrual status, and appropriate servicing officer; review of risk rate changes for relationships of $100 thousand or more; quarterly review of all nonaccruals less than $100 thousand to determine whether the credit should be charged off, returned to accrual, or remain in nonaccrual status; monthly/quarterly review of continuous action plans for all credits rated seven or worse for relationships of $100 thousand or more; monthly review of all commercial charge-offs of $25 thousand or more for the preceding
month.
|
|
·
|
Residential real estate developments - a development project analysis is performed on all projects regardless of size. Performance of the development is assessed through an evaluation of the number of lots remaining, the payout ratios, and the loan-to-value ratios. Results are stress tested as to absorption and price of lots. This information is reviewed by each senior credit officer for that market to determine the need for any risk rate or accrual status changes.
|
|
·
|
Non-owner occupied commercial real estate – a cash flow analysis is performed on all projects with an outstanding balance of $1.0 million or more. In addition, credits are stress tested for vacancies and rate sensitivity. Confirmation is obtained that guarantor’s financial statements are current, taxes have been paid, and that there are no other issues that need to be addressed. This information is reviewed by each senior credit officer for that market to determine the need for any risk rate or accrual status changes.
|
June 30, 2011 | ||||||||||||||||||||
Commercial Loans
|
||||||||||||||||||||
Pass -
|
Special Mention -
|
Substandard -
|
Doubtful -
|
|||||||||||||||||
Categories 1-6
|
Category 7
|
Category 8
|
Category 9
|
Subtotal
|
||||||||||||||||
Loans secured by real estate:
|
||||||||||||||||||||
Construction, land development and other land loans
|
$ | 303,186 | $ | 37,323 | $ | 116,918 | $ | 112 | $ | 457,539 | ||||||||||
Secured by 1-4 family residential properties
|
115,711 | 1,348 | 18,307 | 172 | 135,538 | |||||||||||||||
Secured by nonfarm, nonresidential properties
|
1,311,071 | 20,493 | 124,568 | 261 | 1,456,393 | |||||||||||||||
Other
|
192,286 | 315 | 8,379 | - | 200,980 | |||||||||||||||
Commercial and industrial loans
|
998,915 | 27,064 | 51,198 | 1,472 | 1,078,649 | |||||||||||||||
Consumer loans
|
1,282 | - | - | - | 1,282 | |||||||||||||||
Other loans
|
567,213 | - | 3,858 | 125 | 571,196 | |||||||||||||||
$ | 3,489,664 | $ | 86,543 | $ | 323,228 | $ | 2,142 | $ | 3,901,577 |
Consumer Loans
|
||||||||||||||||||||||||
Past Due
|
Past Due Greater
|
Total LHFI, excluding
|
||||||||||||||||||||||
Current
|
30-89 Days
|
Than 90 days
|
Nonaccrual
|
Subtotal
|
covered loans
|
|||||||||||||||||||
Loans secured by real estate:
|
||||||||||||||||||||||||
Construction, land development and other land loans
|
$ | 50,290 | $ | 1,107 | $ | 210 | $ | 1,721 | $ | 53,328 | $ | 510,867 | ||||||||||||
Secured by 1-4 family residential properties
|
1,570,576 | 10,798 | 2,770 | 18,062 | 1,602,206 | 1,737,744 | ||||||||||||||||||
Secured by nonfarm, nonresidential properties
|
935 | - | - | - | 935 | 1,457,328 | ||||||||||||||||||
Other
|
7,779 | 6 | - | 32 | 7,817 | 208,797 | ||||||||||||||||||
Commercial and industrial loans
|
2,571 | 863 | - | 44 | 3,478 | 1,082,127 | ||||||||||||||||||
Consumer loans
|
317,771 | 9,427 | 2,556 | 996 | 330,750 | 332,032 | ||||||||||||||||||
Other loans
|
6,225 | - | - | - | 6,225 | 577,421 | ||||||||||||||||||
$ | 1,956,147 | $ | 22,201 | $ | 5,536 | $ | 20,855 | $ | 2,004,739 | $ | 5,906,316 |
December 31, 2010
|
||||||||||||||||||||
Commercial Loans
|
||||||||||||||||||||
Pass -
|
Special Mention -
|
Substandard -
|
Doubtful -
|
|||||||||||||||||
Categories 1-6
|
Category 7
|
Category 8
|
Category 9
|
Subtotal
|
||||||||||||||||
Loans secured by real estate:
|
||||||||||||||||||||
Construction, land development and other land loans
|
$ | 347,287 | $ | 44,459 | $ | 134,503 | $ | 512 | $ | 526,761 | ||||||||||
Secured by 1-4 family residential properties
|
113,776 | 780 | 25,167 | 226 | 139,949 | |||||||||||||||
Secured by nonfarm, nonresidential properties
|
1,353,794 | 16,858 | 126,050 | 431 | 1,497,133 | |||||||||||||||
Other
|
216,022 | 180 | 7,418 | - | 223,620 | |||||||||||||||
Commercial and industrial loans
|
977,793 | 25,642 | 58,307 | 1,416 | 1,063,158 | |||||||||||||||
Consumer loans
|
524 | - | - | - | 524 | |||||||||||||||
Other loans
|
535,110 | 210 | 3,633 | 146 | 539,099 | |||||||||||||||
$ | 3,544,306 | $ | 88,129 | $ | 355,078 | $ | 2,731 | $ | 3,990,244 |
Consumer Loans
|
||||||||||||||||||||||||
Past Due
|
Past Due Greater
|
Total LHFI, excluding
|
||||||||||||||||||||||
Current
|
30-89 Days
|
Than 90 days
|
Nonaccrual
|
Subtotal
|
covered loans
|
|||||||||||||||||||
Loans secured by real estate:
|
||||||||||||||||||||||||
Construction, land development and other land loans
|
$ | 53,797 | $ | 223 | $ | - | $ | 2,535 | $ | 56,555 | $ | 583,316 | ||||||||||||
Secured by 1-4 family residential properties
|
1,559,611 | 10,302 | 1,278 | 20,916 | 1,592,107 | 1,732,056 | ||||||||||||||||||
Secured by nonfarm, nonresidential properties
|
975 | - | - | - | 975 | 1,498,108 | ||||||||||||||||||
Other
|
8,282 | 26 | - | 35 | 8,343 | 231,963 | ||||||||||||||||||
Commercial and industrial loans
|
5,075 | 97 | - | 39 | 5,211 | 1,068,369 | ||||||||||||||||||
Consumer loans
|
383,529 | 13,741 | 2,260 | 2,111 | 401,641 | 402,165 | ||||||||||||||||||
Other loans
|
5,166 | - | - | - | 5,166 | 544,265 | ||||||||||||||||||
$ | 2,016,435 | $ | 24,389 | $ | 3,538 | $ | 25,636 | $ | 2,069,998 | $ | 6,060,242 |
|
·
|
Real Estate – Owner Occupied
|
|
·
|
Real Estate – Non-Owner Occupied
|
|
·
|
Working Capital
|
|
·
|
Non-Working Capital
|
|
·
|
Land
|
|
·
|
Lots and Development
|
|
·
|
Political Subdivisions
|
|
·
|
1 to 4 Family
|
|
·
|
Non-1 to 4 Family
|
|
·
|
National and regional economic trends and conditions
|
|
·
|
Impact of recent performance trends
|
|
·
|
Experience, ability and effectiveness of management
|
|
·
|
Adherence to Trustmark’s loan policies, procedures and internal controls
|
|
·
|
Collateral, financial and underwriting exception trends
|
|
·
|
Credit concentrations
|
|
·
|
Acquisitions
|
|
·
|
Catastrophe
|
Six Months Ended June 30,
|
||||||||
2011
|
2010
|
|||||||
Balance at January 1,
|
$ | 93,510 | $ | 103,662 | ||||
Loans charged-off
|
(28,637 | ) | (34,072 | ) | ||||
Recoveries
|
6,320 | 5,573 | ||||||
Net charge-offs
|
(22,317 | ) | (28,499 | ) | ||||
Provision for loan losses
|
15,653 | 25,493 | ||||||
Balance at June 30,
|
$ | 86,846 | $ | 100,656 |
Allowance for Loan Losses
|
||||||||||||||||||||
Balance
|
Balance
|
|||||||||||||||||||
January 1,
|
Provision for
|
June 30,
|
||||||||||||||||||
2011
|
Charge-offs
|
Recoveries
|
Loan Losses
|
2011
|
||||||||||||||||
Loans secured by real estate:
|
||||||||||||||||||||
Construction, land development and other land loans
|
$ | 35,562 | $ | (12,286 | ) | $ | - | $ | 7,925 | $ | 31,201 | |||||||||
Secured by 1-4 family residential properties
|
13,051 | (4,819 | ) | 388 | 3,222 | 11,842 | ||||||||||||||
Secured by nonfarm, nonresidential properties
|
20,980 | (2,818 | ) | - | 2,731 | 20,893 | ||||||||||||||
Other
|
1,582 | (577 | ) | - | 775 | 1,780 | ||||||||||||||
Commercial and industrial loans
|
14,775 | (2,948 | ) | 1,159 | 1,146 | 14,132 | ||||||||||||||
Consumer loans
|
5,400 | (3,048 | ) | 3,043 | (1,018 | ) | 4,377 | |||||||||||||
Other loans
|
2,160 | (2,141 | ) | 1,730 | 872 | 2,621 | ||||||||||||||
Total
|
$ | 93,510 | $ | (28,637 | ) | $ | 6,320 | $ | 15,653 | $ | 86,846 |
Allowance for Loan Losses
|
||||||||||||
Disaggregated by Impairment Method
|
||||||||||||
Individually
|
Collectively
|
Total
|
||||||||||
Loans secured by real estate:
|
||||||||||||
Construction, land development and other land loans
|
$ | 4,207 | $ | 26,994 | $ | 31,201 | ||||||
Secured by 1-4 family residential properties
|
630 | 11,212 | 11,842 | |||||||||
Secured by nonfarm, nonresidential properties
|
1,291 | 19,602 | 20,893 | |||||||||
Other
|
45 | 1,735 | 1,780 | |||||||||
Commercial and industrial loans
|
1,812 | 12,320 | 14,132 | |||||||||
Consumer loans
|
12 | 4,365 | 4,377 | |||||||||
Other loans
|
50 | 2,571 | 2,621 | |||||||||
Total
|
$ | 8,047 | $ | 78,799 | $ | 86,846 |
Allowance for Loan Losses
|
||||||||||||||||||||
Balance
|
Balance
|
|||||||||||||||||||
January 1,
|
Provision for
|
June 30,
|
||||||||||||||||||
2010
|
Charge-offs
|
Recoveries
|
Loan Losses
|
2010
|
||||||||||||||||
Loans secured by real estate:
|
||||||||||||||||||||
Construction, land development and other land loans
|
$ | 43,552 | $ | (16,365 | ) | $ | - | $ | 13,124 | $ | 40,311 | |||||||||
Secured by 1-4 family residential properties
|
13,151 | (5,920 | ) | 205 | 5,196 | 12,632 | ||||||||||||||
Secured by nonfarm, nonresidential properties
|
20,110 | (1,122 | ) | - | 3,232 | 22,220 | ||||||||||||||
Other
|
1,631 | (6 | ) | - | 13 | 1,638 | ||||||||||||||
Commercial and industrial loans
|
16,275 | (1,379 | ) | 526 | 21 | 15,443 | ||||||||||||||
Consumer loans
|
7,246 | (5,575 | ) | 3,225 | 1,412 | 6,308 | ||||||||||||||
Other loans
|
1,697 | (3,705 | ) | 1,617 | 2,495 | 2,104 | ||||||||||||||
Total
|
$ | 103,662 | $ | (34,072 | ) | $ | 5,573 | $ | 25,493 | $ | 100,656 |
Allowance for Loan Losses
|
||||||||||||
Disaggregated by Impairment Method
|
||||||||||||
Individually
|
Collectively
|
Total
|
||||||||||
Loans secured by real estate:
|
||||||||||||
Construction, land development and other land loans
|
$ | 7,150 | $ | 33,161 | $ | 40,311 | ||||||
Secured by 1-4 family residential properties
|
1,729 | 10,903 | 12,632 | |||||||||
Secured by nonfarm, nonresidential properties
|
838 | 21,382 | 22,220 | |||||||||
Other
|
458 | 1,180 | 1,638 | |||||||||
Commercial and industrial loans
|
1,169 | 14,274 | 15,443 | |||||||||
Consumer loans
|
9 | 6,299 | 6,308 | |||||||||
Other loans
|
30 | 2,074 | 2,104 | |||||||||
Total
|
$ | 11,383 | $ | 89,273 | $ | 100,656 |
At acquisition date:
|
||||
Contractually required principal and interest
|
$ | 145,864 | ||
Nonaccretable difference
|
(38,345 | ) | ||
Cash flows expected to be collected
|
107,519 | |||
Accretable yield
|
(13,579 | ) | ||
Other revolving loans
|
3,830 | |||
Fair value at acquisition date
|
$ | 97,770 | ||
Covered loans acquired at fair value
|
$ | 97,770 | ||
Accretion to interest income
|
1,515 | |||
Payments received
|
(11,043 | ) | ||
Other activity, net
|
316 | |||
Carrying value at June 30, 2011
|
$ | 88,558 |
Loans secured by real estate:
|
||||
Construction, land development and other land loans
|
$ | 8,477 | ||
Secured by 1-4 family residential properties
|
32,124 | |||
Secured by nonfarm, nonresidential properties
|
35,846 | |||
Other
|
5,363 | |||
Commercial and industrial loans
|
5,570 | |||
Consumer loans
|
163 | |||
Other loans
|
1,015 | |||
Covered loans
|
$ | 88,558 |
Accretable yield acquired
|
$ | (13,579 | ) | |
Accretion to interest income
|
1,515 | |||
Carrying value at June 30, 2011
|
$ | (12,064 | ) |
Construction, land development and other land properties
|
$ | 1,610 | ||
1-4 family residential properties
|
1,119 | |||
Nonfarm, nonresidential properties
|
4,548 | |||
Other real estate properties
|
208 | |||
Total covered other real estate
|
$ | 7,485 |
Indemnification asset at acquisition date
|
$ | 33,333 | ||
Accretion income
|
(6 | ) | ||
Carrying value at June 30, 2011
|
$ | 33,327 |
Six Months Ended June 30,
|
||||||||
2011
|
2010
|
|||||||
Balance at beginning of period
|
$ | 51,151 | $ | 50,513 | ||||
Origination of servicing assets
|
6,380 | 7,930 | ||||||
Disposals of mortgage loans sold serviced released
|
- | (1,157 | ) | |||||
Change in fair value:
|
||||||||
Due to market changes
|
(4,674 | ) | (11,698 | ) | ||||
Due to runoff
|
(2,746 | ) | (2,544 | ) | ||||
Balance at end of period
|
$ | 50,111 | $ | 43,044 |
Six Months Ended June 30,
|
||||||||
2011
|
2010
|
|||||||
Balance at beginning of period
|
$ | 86,704 | $ | 90,095 | ||||
Additions
|
32,878 | 34,045 | ||||||
Disposals
|
(23,191 | ) | (24,799 | ) | ||||
Writedowns
|
(6,392 | ) | (7,941 | ) | ||||
Balance at end of period
|
$ | 89,999 | $ | 91,400 | ||||
Gain (Loss), net on the sale of noncovered other real estate included in other expenses
|
$ | 552 | $ | (598 | ) |
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Construction, land development and other land loans
|
$ | 62,697 | $ | 61,963 | ||||
1-4 family residential properties
|
13,840 | 13,509 | ||||||
Nonfarm, nonresidential properties
|
12,436 | 9,820 | ||||||
Other real estate loans
|
1,026 | 1,412 | ||||||
Total other real estate, excluding covered other real estate
|
$ | 89,999 | $ | 86,704 |
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Florida
|
$ | 33,823 | $ | 32,370 | ||||
Mississippi
(1)
|
22,921 | 24,181 | ||||||
Tennessee
(2)
|
15,760 | 16,407 | ||||||
Texas
|
17,495 | 13,746 | ||||||
Total other real estate, excluding covered other real estate
|
$ | 89,999 | $ | 86,704 |
(1) - Mississippi includes Central and Southern Mississippi Region
|
(2) - Tennessee includes Memphis, Tennessee and Northern Mississippi Region
|
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Noninterest-bearing demand deposits
|
$ | 1,806,908 | $ | 1,636,625 | ||||
Interest-bearing demand
|
1,678,057 | 1,474,045 | ||||||
Savings
|
2,007,303 | 1,809,116 | ||||||
Time
|
2,140,066 | 2,124,781 | ||||||
Total
|
$ | 7,632,334 | $ | 7,044,567 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net periodic benefit cost
|
||||||||||||||||
Service cost
|
$ | 137 | $ | 137 | $ | 274 | $ | 274 | ||||||||
Interest cost
|
1,115 | 1,195 | 2,230 | 2,389 | ||||||||||||
Expected return on plan assets
|
(1,471 | ) | (1,481 | ) | (2,942 | ) | (2,963 | ) | ||||||||
Recognized net actuarial loss
|
1,037 | 849 | 2,074 | 1,699 | ||||||||||||
Net periodic benefit cost
|
$ | 818 | $ | 700 | $ | 1,636 | $ | 1,399 |
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net periodic benefit cost
|
||||||||||||||||
Service cost
|
$ | 147 | $ | 190 | $ | 294 | $ | 377 | ||||||||
Interest cost
|
569 | 561 | 1,138 | 1,121 | ||||||||||||
Amortization of prior service cost
|
59 | 39 | 118 | 76 | ||||||||||||
Recognized net actuarial loss
|
124 | 89 | 248 | 178 | ||||||||||||
Net periodic benefit cost
|
$ | 899 | $ | 879 | $ | 1,798 | $ | 1,752 |
|
·
|
On January 25, 2011, Trustmark awarded 53,863 shares of performance based restricted stock to key members of its executive management team.
|
|
·
|
The performance-based restricted stock issued on January 22, 2008 vested on December 31, 2010. On February 22, 2011, the stock related to this grant was issued to the participants free of restriction. As a result of achieving 100% of ROATE and 100% of TSR related to the performance goals during the performance period, 75,162 excess time-vested restricted shares were awarded and will vest at December 16, 2013.
|
|
·
|
A performance-based restricted stock award issued on January 27, 2009 also vested on December 31, 2010. On February 22, 2011, the stock related to this grant was issued to the participant free of restriction. As a result of achieving 100% of ROATE and 100% of TSR related to the performance goals during the performance period, 8,959 excess shares were awarded and vested on May 10, 2011.
|
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Compensation expense - Stock and Incentive plans:
|
||||||||||||||||
Stock option-based awards
|
$ | 32 | $ | 114 | $ | 100 | $ | 277 | ||||||||
Performance awards
|
218 | 250 | 441 | 502 | ||||||||||||
Time-vested awards
|
754 | 864 | 1,501 | 1,742 | ||||||||||||
RSU award (share price: $23.65-2011, $20.82-2010)
|
47 | 166 | 184 | 324 | ||||||||||||
Total
|
$ | 1,051 | $ | 1,394 | $ | 2,226 | $ | 2,845 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Basic shares
|
64,072 | 63,873 | 64,012 | 63,808 | ||||||||||||
Dilutive shares
|
209 | 181 | 218 | 185 | ||||||||||||
Diluted shares
|
64,281 | 64,054 | 64,230 | 63,993 |
Six Months Ended June 30,
|
||||||||
2011
|
2010
|
|||||||
Income taxes paid
|
$ | 22,144 | $ | 24,215 | ||||
Interest expense paid on deposits and borrowings
|
23,858 | 32,654 | ||||||
Noncash transfers from loans to foreclosed properties
|
32,878 | 34,045 | ||||||
Transfer of long-term FHLB advance to short-term
|
- | 75,000 | ||||||
Assets acquired in business combination
|
207,243 | - | ||||||
Liabilities assumed in business combination
|
228,236 | - |
Actual
|
Minimum Regulatory
|
Provision to be
|
||||||||||||||||||||||
Regulatory Capital
|
Capital Required
|
Well-Capitalized
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
At June 30, 2011:
|
||||||||||||||||||||||||
Total Capital (to Risk Weighted Assets)
|
||||||||||||||||||||||||
Trustmark Corporation
|
$ | 1,080,092 | 16.47 | % | $ | 524,535 | 8.00 | % | n/a | n/a | ||||||||||||||
Trustmark National Bank
|
1,042,010 | 16.09 | % | 518,140 | 8.00 | % | $ | 647,675 | 10.00 | % | ||||||||||||||
Tier 1 Capital (to Risk Weighted Assets)
|
||||||||||||||||||||||||
Trustmark Corporation
|
$ | 948,250 | 14.46 | % | $ | 262,268 | 4.00 | % | n/a | n/a | ||||||||||||||
Trustmark National Bank
|
912,559 | 14.09 | % | 259,070 | 4.00 | % | $ | 388,605 | 6.00 | % | ||||||||||||||
Tier 1 Capital (to Average Assets)
|
||||||||||||||||||||||||
Trustmark Corporation
|
$ | 948,250 | 10.18 | % | $ | 279,398 | 3.00 | % | n/a | n/a | ||||||||||||||
Trustmark National Bank
|
912,559 | 9.92 | % | 275,914 | 3.00 | % | $ | 459,857 | 5.00 | % | ||||||||||||||
At December 31, 2010:
|
||||||||||||||||||||||||
Total Capital (to Risk Weighted Assets)
|
||||||||||||||||||||||||
Trustmark Corporation
|
$ | 1,051,933 | 15.77 | % | $ | 533,774 | 8.00 | % | n/a | n/a | ||||||||||||||
Trustmark National Bank
|
1,014,219 | 15.40 | % | 526,894 | 8.00 | % | $ | 658,617 | 10.00 | % | ||||||||||||||
Tier 1 Capital (to Risk Weighted Assets)
|
||||||||||||||||||||||||
Trustmark Corporation
|
$ | 918,600 | 13.77 | % | $ | 266,887 | 4.00 | % | n/a | n/a | ||||||||||||||
Trustmark National Bank
|
883,549 | 13.42 | % | 263,447 | 4.00 | % | $ | 395,170 | 6.00 | % | ||||||||||||||
Tier 1 Capital (to Average Assets)
|
||||||||||||||||||||||||
Trustmark Corporation
|
$ | 918,600 | 10.14 | % | $ | 271,867 | 3.00 | % | n/a | n/a | ||||||||||||||
Trustmark National Bank
|
883,549 | 9.89 | % | 267,967 | 3.00 | % | $ | 446,612 | 5.00 | % |
Accumulated
|
||||||||||||
Other
|
||||||||||||
Before-Tax
|
Tax
|
Comprehensive
|
||||||||||
Amount
|
Effect
|
Income (Loss)
|
||||||||||
Balance, January 1, 2011
|
$ | (18,469 | ) | $ | 7,043 | $ | (11,426 | ) | ||||
Unrealized holding gains on AFS arising during period
|
22,073 | (8,443 | ) | 13,630 | ||||||||
Adjustment for net gains realized in net income
|
(58 | ) | 22 | (36 | ) | |||||||
Pension and other postretirement benefit plans
|
2,439 | (933 | ) | 1,506 | ||||||||
Balance, June 30, 2011
|
$ | 5,985 | $ | (2,311 | ) | $ | 3,674 | |||||
Balance, January 1, 2010
|
$ | (2,596 | ) | $ | 972 | $ | (1,624 | ) | ||||
Unrealized holding gains on AFS arising during period
|
11,809 | (4,517 | ) | 7,292 | ||||||||
Adjustment for net gains realized in net income
|
(2,224 | ) | 851 | (1,373 | ) | |||||||
Pension and other postretirement benefit plans
|
1,796 | (687 | ) | 1,109 | ||||||||
Balance, June 30, 2010
|
$ | 8,785 | $ | (3,381 | ) | $ | 5,404 |
June 30, 2011
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
U.S. Government agency obligations
|
$ | 102,947 | $ | - | $ | 102,947 | $ | - | ||||||||
Obligations of states and political subdivisions
|
186,034 | - | 186,034 | - | ||||||||||||
Mortgage-backed securities
|
2,110,061 | - | 2,110,061 | - | ||||||||||||
Securities available for sale
|
2,399,042 | - | 2,399,042 | - | ||||||||||||
Loans held for sale
|
123,244 | - | 123,244 | - | ||||||||||||
Mortgage servicing rights
|
50,111 | - | - | 50,111 | ||||||||||||
Other assets - derivatives
|
781 | 584 | 353 | (156 | ) | |||||||||||
Other liabilities - derivatives
|
1,888 | 1,389 | 499 | - |
December 31, 2010
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
U.S. Government agency obligations
|
$ | 122,035 | $ | - | $ | 122,035 | $ | - | ||||||||
Obligations of states and political subdivisions
|
159,637 | - | 159,637 | - | ||||||||||||
Mortgage-backed securities
|
1,895,577 | - | 1,895,577 | - | ||||||||||||
Securities available for sale
|
2,177,249 | - | 2,177,249 | - | ||||||||||||
Loans held for sale
|
153,044 | - | 153,044 | - | ||||||||||||
Mortgage servicing rights
|
51,151 | - | - | 51,151 | ||||||||||||
Other assets - derivatives
|
(2,247 | ) | (2,584 | ) | - | 337 | ||||||||||
Other liabilities - derivatives
|
(1,581 | ) | 1,562 | (3,143 | ) | - |
MSR
|
Other Assets - Derivatives
|
|||||||
Balance, January 1, 2011
|
$ | 51,151 | $ | 337 | ||||
Total net (losses) gains included in net income
|
(7,420 | ) | 1,060 | |||||
Additions
|
6,380 | - | ||||||
Sales
|
- | (1,553 | ) | |||||
Balance, June 30, 2011
|
$ | 50,111 | $ | (156 | ) | |||
The amount of total losses for the period included in earnings that are attributable
to the change in unrealized gains or losses still held at June 30, 2011 |
$ | (4,674 | ) | $ | (521 | ) | ||
Balance, January 1, 2010
|
$ | 50,513 | $ | (61 | ) | |||
Total net (losses) gains included in net income
|
(14,242 | ) | 1,855 | |||||
Additions
|
6,773 | - | ||||||
Sales
|
- | (501 | ) | |||||
Balance, June 30, 2010
|
$ | 43,044 | $ | 1,293 | ||||
The amount of total (losses) gains for the period included in earnings that are attributable
to the change in unrealized gains or losses still held at June 30, 2010 |
$ | (11,698 | ) | $ | 194 |
June 30, 2011
|
December 31, 2010
|
|||||||||||||||
Carrying
|
Estimated
|
Carrying
|
Estimated
|
|||||||||||||
Value
|
Fair Value
|
Value
|
Fair Value
|
|||||||||||||
Financial Assets:
|
||||||||||||||||
Cash and short-term investments
|
$ | 226,429 | $ | 226,429 | $ | 173,317 | $ | 173,317 | ||||||||
Securities available for sale
|
2,399,042 | 2,399,042 | 2,177,249 | 2,177,249 | ||||||||||||
Securities held to maturity
|
87,923 | 92,149 | 140,847 | 145,143 | ||||||||||||
Loans held for sale
|
123,244 | 123,244 | 153,044 | 153,044 | ||||||||||||
Net LHFI, excluding covered loans
|
5,819,470 | 5,873,407 | 5,966,732 | 6,030,219 | ||||||||||||
Covered loans
|
88,558 | 88,558 | - | - | ||||||||||||
FDIC indemnification asset
|
33,327 | 33,327 | - | - | ||||||||||||
Other assets - derivatives
|
781 | 781 | (2,247 | ) | (2,247 | ) | ||||||||||
Financial Liabilities:
|
||||||||||||||||
Deposits
|
7,632,334 | 7,640,533 | 7,044,567 | 7,054,611 | ||||||||||||
Short-term liabilities
|
629,849 | 629,849 | 1,125,481 | 1,125,481 | ||||||||||||
Long-term FHLB advances
|
2,794 | 2,794 | - | - | ||||||||||||
Subordinated notes
|
49,823 | 50,400 | 49,806 | 48,750 | ||||||||||||
Junior subordinated debt securities
|
61,856 | 35,876 | 61,856 | 30,928 | ||||||||||||
Other liabilities - derivatives
|
1,888 | 1,888 | (1,581 | ) | (1,581 | ) |
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Derivatives in hedging relationships
|
||||||||
Interest rate contracts:
|
||||||||
Forward contracts included in other liabilities
|
$ | 131 | $ | (3,143 | ) | |||
Derivatives not designated as hedging instruments
|
||||||||
Interest rate contracts:
|
||||||||
Futures contracts included in other assets
|
$ | 388 | $ | (2,897 | ) | |||
Exchange traded purchased options included in other assets
|
196 | 313 | ||||||
OTC written options (rate locks) included in other assets
|
(156 | ) | 337 | |||||
Interest rate swaps included in other assets
|
353 | - | ||||||
Exchange traded written options included in other liabilities
|
1,389 | 1,562 | ||||||
Interest rate swaps included in other liabilities
|
368 | - |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Derivatives in hedging relationships
|
||||||||||||||||
Amount of loss recognized in mortgage banking, net
|
$ | (22 | ) | $ | (3,612 | ) | $ | (3,275 | ) | $ | (5,457 | ) | ||||
Derivatives not designated as hedging instruments
|
||||||||||||||||
Amount of gain recognized in mortgage banking, net
|
$ | 6,535 | $ | 13,452 | $ | 6,154 | $ | 17,792 | ||||||||
Amount of gain recognized in bankcard and other fees
|
76 | - | 166 | - |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||||
2011
|
2010
|
2011
|
2010
|
||||||||||||||
General Banking
|
|||||||||||||||||
Net interest income
|
$ | 86,699 | $ | 87,363 | $ | 171,940 | $ | 173,675 | |||||||||
Provision for loan losses
|
8,100 | 10,403 | 15,640 | 25,491 | |||||||||||||
Noninterest income
|
33,704 | 32,377 | 57,519 | 58,426 | |||||||||||||
Noninterest expense
|
70,527 | 73,906 | 139,347 | 139,483 | |||||||||||||
Income before income taxes
|
41,776 | 35,431 | 74,472 | 67,127 | |||||||||||||
Income taxes
|
12,134 | 11,334 | 22,438 | 21,281 | |||||||||||||
General banking net income
|
$ | 29,642 | $ | 24,097 | $ | 52,034 | $ | 45,846 | |||||||||
Selected Financial Information
|
|||||||||||||||||
Average assets
|
$ | 9,465,636 | $ | 9,093,036 | $ | 9,414,149 | $ | 9,134,009 | |||||||||
Depreciation and amortization
|
$ | 5,651 | $ | 5,563 | $ | 11,069 | $ | 10,895 | |||||||||
Wealth Management
|
|||||||||||||||||
Net interest income
|
$ | 1,067 | $ | 1,054 | $ | 2,140 | $ | 2,105 | |||||||||
Provision for loan losses
|
16 | (5 | ) | 13 | 2 | ||||||||||||
Noninterest income
|
5,851 | 5,681 | 11,922 | 11,115 | |||||||||||||
Noninterest expense
|
5,340 | 5,037 | 11,127 | 10,038 | |||||||||||||
Income before income taxes
|
1,562 | 1,703 | 2,922 | 3,180 | |||||||||||||
Income taxes
|
520 | 564 | 976 | 1,059 | |||||||||||||
Wealth management net income
|
$ | 1,042 | $ | 1,139 | $ | 1,946 | $ | 2,121 | |||||||||
Selected Financial Information
|
|||||||||||||||||
Average assets
|
$ | 82,986 | $ | 91,454 | $ | 82,727 | $ | 92,042 | |||||||||
Depreciation and amortization
|
$ | 51 | $ | 67 | $ | 113 | $ | 135 | |||||||||
Insurance
|
|||||||||||||||||
Net interest income
|
$ | 64 | $ | 69 | $ | 125 | $ | 124 | |||||||||
Provision for loan losses
|
- | - | - | - | |||||||||||||
Noninterest income
|
6,877 | 6,889 | 13,362 | 13,775 | |||||||||||||
Noninterest expense
|
5,481 | 5,485 | 10,892 | 11,268 | |||||||||||||
Income before income taxes
|
1,460 | 1,473 | 2,595 | 2,631 | |||||||||||||
Income taxes
|
542 | 548 | 960 | 982 | |||||||||||||
Insurance net income
|
$ | 918 | $ | 925 | $ | 1,635 | $ | 1,649 | |||||||||
Selected Financial Information
|
|||||||||||||||||
Average assets
|
$ | 65,503 | $ | 66,011 | $ | 65,129 | $ | 66,386 | |||||||||
Depreciation and amortization
|
$ | 357 | $ | 398 | $ | 730 | $ | 796 | |||||||||
Consolidated
|
|||||||||||||||||
Net interest income
|
$ | 87,830 | $ | 88,486 | $ | 174,205 | $ | 175,904 | |||||||||
Provision for loan losses
|
8,116 | 10,398 | 15,653 | 25,493 | |||||||||||||
Noninterest income
|
46,432 | 44,947 | 82,803 | 83,316 | |||||||||||||
Noninterest expense
|
81,348 | 84,428 | 161,366 | 160,789 | |||||||||||||
Income before income taxes
|
44,798 | 38,607 | 79,989 | 72,938 | |||||||||||||
Income taxes
|
13,196 | 12,446 | 24,374 | 23,322 | |||||||||||||
Consolidated net income
|
$ | 31,602 | $ | 26,161 | $ | 55,615 | $ | 49,616 | |||||||||
Selected Financial Information
|
|||||||||||||||||
Average assets
|
$ | 9,614,125 | $ | 9,250,501 | $ | 9,562,005 | $ | 9,292,437 | |||||||||
Depreciation and amortization
|
$ | 6,059 | $ | 6,028 | $ | 11,912 | $ | 11,826 |
|
·
|
Created the Financial Stability Oversight Council (FSOC), which will identify, monitor and address systemic risks posed by large and complex banks and nonbank entities as well as certain products and services. To date, the FSOC has been engaged in rulemaking with respect to financial market utilities and nonbank financial companies.
|
|
·
|
Requires application of the same leverage and risk-based capital requirements that apply to insured depository institutions to most bank holding companies. These rules will be phased in from January 1, 2013 to January 1, 2016.
|
|
·
|
Changes the assessment base for federal deposit insurance from the amount of insured deposits to average consolidated assets less average tangible equity. The Dodd-Frank Act increases the minimum reserve ratio for the Deposit Insurance Fund from 1.15% to 1.35% of estimated insurable deposits, or the comparable percentage of the assessment base by September 30, 2020. The FDIC must offset the effect of the increase in the minimum reserve ratio on insured depository institutions with total consolidated assets of less than $10 billion. The FDIC issued a final rule changing its assessment formula effective April 1, 2011.
|
|
·
|
Makes permanent the $250,000 limit for federal deposit insurance and provides unlimited federal deposit insurance until December 31, 2012 for noninterest-bearing demand transaction accounts at all insured depository institutions.
|
|
·
|
Directs the Federal banking regulatory agencies to make capital requirements countercyclical – meaning that additional capital will be required in times of economic expansion, but less capital will be required during periods of economic downturn.
|
|
·
|
Requires a bank holding company to be well-capitalized and well-managed in order to be approved for an interstate bank acquisition. In addition, the appropriate federal banking agency must determine that the resulting bank will continue to be well-capitalized and well-managed after the transaction.
|
|
·
|
Repeals the prohibition on payments of interest by banks on demand deposit accounts held by businesses; this provision became effective, and was implemented through federal rulemakings effective on July 21, 2011.
|
|
·
|
Imposes comprehensive regulation of the over-the-counter derivatives market, which includes certain provisions that would effectively prohibit insured depository institutions from conducting certain derivatives businesses in the institution itself.
|
|
·
|
Implements structural changes in the issuance of certain asset-backed securities to require risk retention by securitizers and originators at a default level of up to 5% to promote the credit quality of the assets being securitized. In April 2011, the federal banking agencies jointly proposed rules for notice and comment.
|
|
·
|
Implements corporate governance revisions intended to enhance shareholder understanding of executive compensation, to impose independence standards upon outside compensation consultants and to increase shareholder involvement in the compensation process. These requirements are being implemented through SEC rulemakings, certain of which have become effective. Also provides that federal bank regulators shall issue enhanced reporting requirements for incentive-based compensation of any “covered financial institution,” and that federal bank regulators shall prescribe regulations prohibiting any incentive-based payment arrangement that encourages inappropriate risk-taking by the covered financial institution by paying any executive officer, employee, director or principal shareholder
of the covered financial institution “excessive compensation, fees, or benefits” or that “could lead to material loss to the covered financial institution.” The federal bank regulators have proposed rules to implement these requirements, but they have not yet become effective.
|
|
·
|
Centralizes responsibility for consumer financial protection by creation of the Consumer Financial Protection Bureau (CFPB), which, effective July 21, 2011, is responsible for issuing rules, orders and guidance implementing federal consumer financial laws. If and when the bank’s consolidated assets exceed $10.0 billion, the CFPB will become the primary federal consumer financial protection regulator of the bank and the exclusive such regulator for all of its affiliates providing covered products and services. Until that time, the CFPB will have limited jurisdiction over the bank and its affiliate’s operations, with the exclusive enforcement authority resting with the bank’s primary federal banking regulator, and the CFPB’s role limited to requiring reports
and participating in examinations with the primary federal banking regulator.
|
|
·
|
Amends the Electronic Fund Transfer Act to authorize the Federal Reserve to issue regulations regarding any interchange fee that an issuer may receive or charge for an electronic debit card transaction. Requires that fees must be reasonable and proportional to the cost incurred by the issuer with respect to the transaction. On June 29, 2011, the Federal Reserve issued a final rule implementing this provision, which begins to take effect starting on October 1, 2011. On July 12, 2011, the Federal Reserve issued a list of banking organizations subject to and exempt from the new restrictions based on their December 31, 2010 asset levels. Trustmark has been classified as “exempt.” The Federal Reserve plans to update this list
annually based on year-end asset levels.
|
|
·
|
Increases the potential for state intervention in the operations of federally chartered depository institutions by narrowing the circumstances in which preemption of state law may apply and by providing statutory recognition of a role for state law enforcement authorities in regard to federally chartered depository institutions. On July 20, 2011, the OCC issued a final rule revising its preemption rules in light of the new law.
|
|
·
|
Implements mortgage reforms by including provisions, which require mortgage originators to act in the best interests of consumers and to take steps to seek to ensure that consumers will have the capability to repay loans that they obtain. Also creates incentives for lenders to offer loans that better protect the interests of consumers and provide additional protection for borrowers under high cost loans.
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Consolidated Statements of Income
|
||||||||||||||||
Total interest income
|
$ | 99,402 | $ | 103,128 | $ | 197,387 | $ | 206,268 | ||||||||
Total interest expense
|
11,572 | 14,642 | 23,182 | 30,364 | ||||||||||||
Net interest income
|
87,830 | 88,486 | 174,205 | 175,904 | ||||||||||||
Provision for loan losses
|
8,116 | 10,398 | 15,653 | 25,493 | ||||||||||||
Noninterest income
|
46,432 | 44,947 | 82,803 | 83,316 | ||||||||||||
Noninterest expense
|
81,348 | 84,428 | 161,366 | 160,789 | ||||||||||||
Income before income taxes
|
44,798 | 38,607 | 79,989 | 72,938 | ||||||||||||
Income taxes
|
13,196 | 12,446 | 24,374 | 23,322 | ||||||||||||
Net Income
|
$ | 31,602 | $ | 26,161 | $ | 55,615 | $ | 49,616 | ||||||||
Common Share Data
|
||||||||||||||||
Basic earnings per share
|
$ | 0.49 | $ | 0.41 | $ | 0.87 | $ | 0.78 | ||||||||
Diluted earnings per share
|
0.49 | 0.41 | 0.87 | 0.78 | ||||||||||||
Cash dividends per share
|
0.23 | 0.23 | 0.46 | 0.46 | ||||||||||||
Performance Ratios
|
||||||||||||||||
Return on average common equity
|
10.73 | % | 9.21 | % | 9.58 | % | 8.85 | % | ||||||||
Return on average tangible common equity
|
14.71 | % | 12.92 | % | 13.21 | % | 12.45 | % | ||||||||
Return on average total equity
|
10.73 | % | 9.21 | % | 9.58 | % | 8.85 | % | ||||||||
Return on average assets
|
1.32 | % | 1.13 | % | 1.17 | % | 1.08 | % | ||||||||
Net interest margin (fully taxable equivalent)
|
4.29 | % | 4.47 | % | 4.29 | % | 4.45 | % | ||||||||
Credit Quality Ratios
(1)
|
||||||||||||||||
Net charge-offs/average loans
|
0.97 | % | 0.72 | % | 0.74 | % | 0.90 | % | ||||||||
Provision for loan losses/average loans
|
0.54 | % | 0.66 | % | 0.52 | % | 0.81 | % | ||||||||
Nonperforming loans/total loans (incl LHFS*)
|
2.01 | % | 2.55 | % | ||||||||||||
Nonperforming assets/total loans (incl LHFS*) plus ORE**
|
3.45 | % | 3.95 | % | ||||||||||||
Allowance for loan losses/total loans (excl LHFS*)
|
1.47 | % | 1.66 | % |
June 30,
|
2011 | 2010 | |||||||||||||||
Consolidated Balance Sheets
|
|||||||||||||||||
Total assets
|
$ | 9,698,451 | $ | 9,244,545 | |||||||||||||
Securities
|
2,486,965 | 1,979,570 | |||||||||||||||
Loans held for investment and covered loans (including LHFS*)
|
6,118,118 | 6,273,364 | |||||||||||||||
Deposits
|
7,632,334 | 7,139,394 | |||||||||||||||
Common shareholders' equity
|
1,192,770 | 1,142,380 | |||||||||||||||
Common Stock Performance
|
|||||||||||||||||
Market value - close
|
$ | 23.41 | $ | 20.82 | |||||||||||||
Common book value
|
18.60 | 17.88 | |||||||||||||||
Tangible common book value
|
13.82 | 13.04 | |||||||||||||||
Capital Ratios
|
|||||||||||||||||
Total equity/total assets
|
12.30 | % | 12.36 | % | |||||||||||||
Common equity/total assets
|
12.30 | % | 12.36 | % | |||||||||||||
Tangible equity/tangible assets
|
9.43 | % | 9.32 | % | |||||||||||||
Tangible common equity/tangible assets
|
9.43 | % | 9.32 | % | |||||||||||||
Tangible common equity/risk-weighted assets
|
13.51 | % | 12.51 | % | |||||||||||||
Tier 1 leverage ratio
|
10.18 | % | 10.07 | % | |||||||||||||
Tier 1 common risk-based capital ratio
|
13.55 | % | 12.51 | % | |||||||||||||
Tier 1 risk-based capital ratio
|
14.46 | % | 13.53 | % | |||||||||||||
Total risk-based capital ratio
|
16.47 | % | 15.53 | % | |||||||||||||
(1)
- Excludes Covered Assets (Loans and Other Real Estate)
|
|||||||||||||||||
* - LHFS is Loans Held for Sale.
|
|||||||||||||||||
** - ORE is Other Real Estate.
|
Three Months Ended June 30,
|
||||||||||||||||||||||||
2011
|
2010
|
|||||||||||||||||||||||
Average
|
Yield/
|
Average
|
|
Yield/
|
||||||||||||||||||||
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
|||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Federal funds sold and securities purchased under reverse repurchase agreements
|
$ | 6,807 | $ | 7 | 0.41 | % | $ | 7,478 | $ | 7 | 0.38 | % | ||||||||||||
Securities - taxable
|
2,216,717 | 20,374 | 3.69 | % | 1,748,856 | 19,626 | 4.50 | % | ||||||||||||||||
Securities - nontaxable
|
177,268 | 2,115 | 4.79 | % | 152,597 | 2,151 | 5.65 | % | ||||||||||||||||
Loans (including covered and loans held for sale)
|
6,122,090 | 80,202 | 5.25 | % | 6,301,201 | 84,362 | 5.37 | % | ||||||||||||||||
Other earning assets
|
32,028 | 333 | 4.17 | % | 38,764 | 366 | 3.79 | % | ||||||||||||||||
Total interest-earning assets
|
8,554,910 | 103,031 | 4.83 | % | 8,248,896 | 106,512 | 5.18 | % | ||||||||||||||||
Cash and due from banks
|
216,483 | 207,670 | ||||||||||||||||||||||
Other assets
|
937,503 | 898,749 | ||||||||||||||||||||||
Allowance for loan losses
|
(94,771 | ) | (104,814 | ) | ||||||||||||||||||||
Total Assets
|
$ | 9,614,125 | $ | 9,250,501 | ||||||||||||||||||||
Liabilities and Shareholders' Equity
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Interest-bearing deposits
|
$ | 6,016,716 | 9,936 | 0.66 | % | $ | 5,670,403 | 12,785 | 0.90 | % | ||||||||||||||
Federal funds purchased and securities sold under repurchase agreements
|
396,618 | 216 | 0.22 | % | 495,904 | 260 | 0.21 | % | ||||||||||||||||
Other borrowings
|
206,083 | 1,420 | 2.76 | % | 317,391 | 1,597 | 2.02 | % | ||||||||||||||||
Total interest-bearing liabilities
|
6,619,417 | 11,572 | 0.70 | % | 6,483,698 | 14,642 | 0.91 | % | ||||||||||||||||
Noninterest-bearing demand deposits
|
1,714,778 | 1,536,153 | ||||||||||||||||||||||
Other liabilities
|
98,154 | 91,715 | ||||||||||||||||||||||
Shareholders' equity
|
1,181,776 | 1,138,935 | ||||||||||||||||||||||
Total Liabilities and Shareholders' Equity
|
$ | 9,614,125 | $ | 9,250,501 | ||||||||||||||||||||
Net Interest Margin
|
91,459 | 4.29 | % | 91,870 | 4.47 | % | ||||||||||||||||||
Less tax equivalent adjustment
|
3,629 | 3,384 | ||||||||||||||||||||||
Net Interest Margin per
Consolidated Statements of Income |
$ | 87,830 | $ | 88,486 |
Six Months Ended June 30,
|
||||||||||||||||||||||||
2011
|
2010
|
|||||||||||||||||||||||
Average
|
Yield/
|
Average
|
|
Yield/
|
||||||||||||||||||||
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
|||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Federal funds sold and securities purchased under reverse repurchase agreements
|
$ | 7,579 | $ | 15 | 0.40 | % | $ | 8,950 | $ | 15 | 0.34 | % | ||||||||||||
Securities - taxable
|
2,182,653 | 40,366 | 3.73 | % | 1,721,134 | 39,361 | 4.61 | % | ||||||||||||||||
Securities - nontaxable
|
174,658 | 4,243 | 4.90 | % | 152,260 | 4,331 | 5.74 | % | ||||||||||||||||
Loans (including covered and loans held for sale)
|
6,114,599 | 159,318 | 5.25 | % | 6,356,628 | 168,489 | 5.35 | % | ||||||||||||||||
Other earning assets
|
39,896 | 665 | 3.36 | % | 42,461 | 749 | 3.56 | % | ||||||||||||||||
Total interest-earning assets
|
8,519,385 | 204,607 | 4.84 | % | 8,281,433 | 212,945 | 5.19 | % | ||||||||||||||||
Cash and due from banks
|
219,415 | 211,964 | ||||||||||||||||||||||
Other assets
|
918,620 | 904,543 | ||||||||||||||||||||||
Allowance for loan losses
|
(95,415 | ) | (105,503 | ) | ||||||||||||||||||||
Total Assets
|
$ | 9,562,005 | $ | 9,292,437 | ||||||||||||||||||||
Liabilities and Shareholders' Equity
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Interest-bearing deposits
|
$ | 5,808,741 | 19,655 | 0.68 | % | $ | 5,632,926 | 26,689 | 0.96 | % | ||||||||||||||
Federal funds purchased and securities sold under repurchase agreements
|
521,555 | 554 | 0.21 | % | 548,075 | 486 | 0.18 | % | ||||||||||||||||
Other borrowings
|
285,657 | 2,973 | 2.10 | % | 355,698 | 3,189 | 1.81 | % | ||||||||||||||||
Total interest-bearing liabilities
|
6,615,953 | 23,182 | 0.71 | % | 6,536,699 | 30,364 | 0.94 | % | ||||||||||||||||
Noninterest-bearing demand deposits
|
1,667,926 | 1,535,683 | ||||||||||||||||||||||
Other liabilities
|
107,229 | 88,866 | ||||||||||||||||||||||
Shareholders' equity
|
1,170,897 | 1,131,189 | ||||||||||||||||||||||
Total Liabilities and Shareholders' Equity
|
$ | 9,562,005 | $ | 9,292,437 | ||||||||||||||||||||
Net Interest Margin
|
181,425 | 4.29 | % | 182,581 | 4.45 | % | ||||||||||||||||||
Less tax equivalent adjustment
|
7,220 | 6,677 | ||||||||||||||||||||||
Net Interest Margin per
Consolidated Statements of Income |
$ | 174,205 | $ | 175,904 |
Provision for Loan Losses
|
||||||||||||||||
($ in thousands)
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Florida
|
$ | 5,633 | $ | 2,432 | $ | 8,657 | $ | 7,933 | ||||||||
Mississippi
(1)
|
1,331 | 3,430 | 2,402 | 7,178 | ||||||||||||
Tennessee
(2)
|
157 | 3,560 | 1,776 | 4,874 | ||||||||||||
Texas
|
995 | 976 | 2,818 | 5,508 | ||||||||||||
Total provision for loan losses
|
$ | 8,116 | $ | 10,398 | $ | 15,653 | $ | 25,493 |
(1) - Mississippi includes Central and Southern Mississippi Regions
|
(2) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||||||||||||||||||
2011
|
2010
|
$ Change
|
% Change
|
2011
|
2010
|
$ Change
|
% Change
|
|||||||||||||||||||||||||
Service charges on deposit accounts
|
$ | 12,851 | $ | 14,220 | $ | (1,369 | ) | -9.6 | % | $ | 24,758 | $ | 27,197 | $ | (2,439 | ) | -9.0 | % | ||||||||||||||
Insurance commissions
|
6,862 | 6,884 | (22 | ) | -0.3 | % | 13,374 | 13,721 | (347 | ) | -2.5 | % | ||||||||||||||||||||
Wealth management
|
5,760 | 5,558 | 202 | 3.6 | % | 11,746 | 10,913 | 833 | 7.6 | % | ||||||||||||||||||||||
Bank card and other fees
|
6,854 | 6,417 | 437 | 6.8 | % | 13,329 | 12,297 | 1,032 | 8.4 | % | ||||||||||||||||||||||
Mortgage banking, net
|
6,269 | 8,910 | (2,641 | ) | -29.6 | % | 10,991 | 14,982 | (3,991 | ) | -26.6 | % | ||||||||||||||||||||
Other, net
|
7,785 | 1,103 | 6,682 | n/m | 8,547 | 1,982 | 6,565 | n/m | ||||||||||||||||||||||||
Total Noninterest Income before securities gains, net
|
46,381 | 43,092 | 3,289 | 7.6 | % | 82,745 | 81,092 | 1,653 | 2.0 | % | ||||||||||||||||||||||
Securities gains, net
|
51 | 1,855 | (1,804 | ) | -97.3 | % | 58 | 2,224 | (2,166 | ) | -97.4 | % | ||||||||||||||||||||
Total Noninterest Income
|
$ | 46,432 | $ | 44,947 | $ | 1,485 | 3.3 | % | $ | 82,803 | $ | 83,316 | $ | (513 | ) | -0.6 | % |
n/m - percentage changes greater than +/- 100% are not considered meaningful
|
Mortgage Banking Income
|
||||||||||||||||||||||||||||||||
($ in thousands)
|
||||||||||||||||||||||||||||||||
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||||||||||||||||||
2011
|
2010
|
$ Change
|
% Change
|
2011
|
2010
|
$ Change
|
% Change
|
|||||||||||||||||||||||||
Mortgage servicing income, net
|
$ | 3,713 | $ | 3,495 | $ | 218 | 6.2 | % | $ | 7,327 | $ | 6,944 | $ | 383 | 5.5 | % | ||||||||||||||||
Change in fair value-MSR from runoff
|
(1,455 | ) | (1,374 | ) | (81 | ) | -5.9 | % | (2,746 | ) | (2,544 | ) | (202 | ) | -7.9 | % | ||||||||||||||||
Gain on sales of loans, net
|
1,852 | 1,897 | (45 | ) | -2.4 | % | 4,953 | 5,652 | (699 | ) | -12.4 | % | ||||||||||||||||||||
Other, net
|
448 | 1,193 | (745 | ) | -62.4 | % | (517 | ) | 191 | (708 | ) | n/m | ||||||||||||||||||||
Mortgage banking income before
hedge ineffectiveness
|
4,558 | 5,211 | (653 | ) | -12.5 | % | 9,017 | 10,243 | (1,226 | ) | -12.0 | % | ||||||||||||||||||||
Change in fair value-MSR from market changes
|
(4,931 | ) | (8,631 | ) | 3,700 | -42.9 | % | (4,674 | ) | (11,698 | ) | 7,024 | -60.0 | % | ||||||||||||||||||
Change in fair value of derivatives
|
6,642 | 12,330 | (5,688 | ) | -46.1 | % | 6,648 | 16,437 | (9,789 | ) | -59.6 | % | ||||||||||||||||||||
Net positive hedge ineffectiveness
|
1,711 | 3,699 | (1,988 | ) | -53.7 | % | 1,974 | 4,739 | (2,765 | ) | -58.3 | % | ||||||||||||||||||||
Mortgage banking, net
|
$ | 6,269 | $ | 8,910 | $ | (2,641 | ) | -29.6 | % | $ | 10,991 | $ | 14,982 | $ | (3,991 | ) | -26.6 | % |
n/m - percentage changes greater than +/- 100% are not considered meaningful
|
Noninterest Expense
|
||||||||||||||||||||||||||||||||
($ in thousands)
|
||||||||||||||||||||||||||||||||
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||||||||||||||||||
2011
|
2010
|
$ Change
|
% Change
|
2011
|
2010
|
$ Change
|
% Change
|
|||||||||||||||||||||||||
Salaries and employee benefits
|
$ | 44,203 | $ | 43,282 | $ | 921 | 2.1 | % | $ | 88,239 | $ | 86,136 | $ | 2,103 | 2.4 | % | ||||||||||||||||
Services and fees
|
10,780 | 10,523 | 257 | 2.4 | % | 21,050 | 20,778 | 272 | 1.3 | % | ||||||||||||||||||||||
ORE/Foreclosure expense:
|
||||||||||||||||||||||||||||||||
Writedowns
|
4,389 | 7,521 | (3,132 | ) | -41.6 | % | 6,392 | 7,941 | (1,549 | ) | -19.5 | % | ||||||||||||||||||||
Carrying costs
|
315 | 1,757 | (1,442 | ) | -82.1 | % | 1,525 | 4,398 | (2,873 | ) | -65.3 | % | ||||||||||||||||||||
Total ORE/Foreclosure expense
|
4,704 | 9,278 | (4,574 | ) | -49.3 | % | 7,917 | 12,339 | (4,422 | ) | -35.8 | % | ||||||||||||||||||||
Net occupancy-premises
|
5,050 | 4,917 | 133 | 2.7 | % | 10,123 | 9,951 | 172 | 1.7 | % | ||||||||||||||||||||||
Equipment expense
|
4,856 | 4,247 | 609 | 14.3 | % | 10,000 | 8,550 | 1,450 | 17.0 | % | ||||||||||||||||||||||
FDIC assessment expense
|
1,938 | 3,035 | (1,097 | ) | -36.1 | % | 4,688 | 6,182 | (1,494 | ) | -24.2 | % | ||||||||||||||||||||
Other expense
|
9,817 | 9,146 | 671 | 7.3 | % | 19,349 | 16,853 | 2,496 | 14.8 | % | ||||||||||||||||||||||
Total noninterest expense
|
$ | 81,348 | $ | 84,428 | $ | (3,080 | ) | -3.6 | % | $ | 161,366 | $ | 160,789 | $ | 577 | 0.4 | % |
n/m - percentage changes greater than +/- 100% are not considered meaningful
|
Securities Portfolio by Credit Rating
(1)
|
||||||||||||||||
($ in thousands)
|
||||||||||||||||
June 30, 2011
|
||||||||||||||||
Amortized Cost
|
Estimated Fair Value
|
|||||||||||||||
Amount
|
%
|
Amount
|
%
|
|||||||||||||
Securities Available for Sale
|
||||||||||||||||
AAA
|
$ | 2,162,436 | 92.3 | % | $ | 2,213,004 | 92.2 | % | ||||||||
Aa1 to Aa3
|
105,516 | 4.5 | % | 108,055 | 4.5 | % | ||||||||||
A1 to A3
|
15,287 | 0.7 | % | 15,798 | 0.7 | % | ||||||||||
Baa1 to Baa3
|
- | 0.0 | % | - | 0.0 | % | ||||||||||
Not Rated (2)
|
59,614 | 2.5 | % | 62,185 | 2.6 | % | ||||||||||
Total securities available for sale
|
$ | 2,342,853 | 100.0 | % | $ | 2,399,042 | 100.0 | % | ||||||||
Securities Held to Maturity
|
||||||||||||||||
AAA
|
$ | 41,147 | 46.8 | % | $ | 42,051 | 45.6 | % | ||||||||
Aa1 to Aa3
|
26,122 | 29.7 | % | 28,642 | 31.1 | % | ||||||||||
A1 to A3
|
3,320 | 3.8 | % | 3,436 | 3.7 | % | ||||||||||
Baa1 to Baa3
|
534 | 0.6 | % | 551 | 0.6 | % | ||||||||||
Not Rated (2)
|
16,800 | 19.1 | % | 17,469 | 19.0 | % | ||||||||||
Total securities held to maturity
|
$ | 87,923 | 100.0 | % | $ | 92,149 | 100.0 | % |
(1) - Credit ratings obtained from Moody's Investors Service
|
||||
(2) - Not rated issues primarily consist of Mississippi municipal general obligations
|
LHFI by Type (excluding covered loans)
|
||||||||
($ in thousands)
|
||||||||
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Real estate loans:
|
||||||||
Construction, land development and other land loans
|
$ | 510,867 | $ | 583,316 | ||||
Secured by 1- 4 family residential properties
|
1,737,744 | 1,732,056 | ||||||
Secured by nonfarm, nonresidential properties
|
1,457,328 | 1,498,108 | ||||||
Other real estate secured
|
208,797 | 231,963 | ||||||
Commercial and industrial loans
|
1,082,127 | 1,068,369 | ||||||
Consumer loans
|
332,032 | 402,165 | ||||||
Other loans
|
577,421 | 544,265 | ||||||
LHFI, excluding covered loans
|
5,906,316 | 6,060,242 | ||||||
Less allowance for loan losses
|
86,846 | 93,510 | ||||||
Net LHFI, excluding covered loans
|
$ | 5,819,470 | $ | 5,966,732 |
|
·
|
Real Estate – Owner Occupied
|
|
·
|
Real Estate – Non-Owner Occupied
|
|
·
|
Working Capital
|
|
·
|
Non-Working Capital
|
|
·
|
Land
|
|
·
|
Lots and Development
|
|
·
|
Political Subdivisions
|
|
·
|
1 to 4 Family
|
|
·
|
Non-1 to 4 Family
|
Net Charge-Offs
|
||||||||||||||||
($ in thousands)
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Florida
|
$ | 7,880 | $ | 5,880 | $ | 13,358 | $ | 14,869 | ||||||||
Mississippi
(1)
|
3,401 | 3,885 | 3,811 | 10,662 | ||||||||||||
Tennessee
(2)
|
324 | 1,031 | 1,303 | 1,457 | ||||||||||||
Texas
|
3,063 | 589 | 3,845 | 1,511 | ||||||||||||
Total net charge-offs
|
$ | 14,668 | $ | 11,385 | $ | 22,317 | $ | 28,499 |
(1) - Mississippi includes Central and Southern Mississippi Regions
|
||||||
(2) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions
|
Nonperforming Assets
(1)
|
||||||||
($ in thousands)
|
||||||||
June 30, 2011
|
December 31,
2010
|
|||||||
Nonaccrual loans
|
||||||||
Florida
|
$ | 30,752 | $ | 53,773 | ||||
Mississippi
(2)
|
47,802 | 39,803 | ||||||
Tennessee
(3)
|
17,564 | 14,703 | ||||||
Texas
|
24,900 | 34,644 | ||||||
Total nonaccrual loans
|
121,018 | 142,923 | ||||||
Other real estate
|
||||||||
Florida
|
33,823 | 32,370 | ||||||
Mississippi
(2)
|
22,921 | 24,181 | ||||||
Tennessee
(3)
|
15,760 | 16,407 | ||||||
Texas
|
17,495 | 13,746 | ||||||
Total other real estate
|
89,999 | 86,704 | ||||||
Total nonperforming assets
|
$ | 211,017 | $ | 229,627 | ||||
Nonperforming assets/total loans (including
loans held for sale) and ORE
|
3.45 | % | 3.64 | % | ||||
Loans Past Due 90 days or more and still Accruing
|
||||||||
Loans held for investment
|
$ | 6,993 | $ | 3,608 | ||||
Serviced GNMA loans eligible for repurchase (no obligation to repurchase)
|
$ | 24,708 | $ | 15,777 |
(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
|
Nonaccrual Loans by Loan Type
(1)
|
||||||
($ in thousands)
|
||||||
June 30, 2011
|
December 31, 2010
|
|||||
Construction, land development and other land loans
|
$ |
46,057
|
$ |
57,831
|
||
Secured by 1-4 family residential properties
|
23,604
|
30,313
|
||||
Secured by nonfarm, nonresidential properties
|
29,055
|
29,013
|
||||
Other loans secured by real estate
|
5,120
|
6,154
|
||||
Commercial and industrial
|
15,180
|
16,107
|
||||
Consumer loans
|
997
|
2,112
|
||||
Other loans
|
1,005
|
1,393
|
||||
Total Nonaccrual Loans by Type
|
$ |
121,018
|
$ |
142,923
|
(1) - Excludes Covered Loans
|
June 30, 2011
|
||||||||||||||||||||||||
Classified (3)
|
||||||||||||||||||||||||
Total Loans
|
Criticized Loans (1)
|
Special Mention (2)
|
Accruing
|
Nonimpaired Nonaccrual
|
Impaired Nonaccrual (4)
|
|||||||||||||||||||
Construction, land development and other land loans:
|
||||||||||||||||||||||||
Lots
|
$ | 42,990 | $ | 15,318 | $ | 2,394 | $ | 9,080 | $ | 1,833 | $ | 2,011 | ||||||||||||
Development
|
13,086 | 3,315 | - | 1,747 | 84 | 1,484 | ||||||||||||||||||
Unimproved land
|
49,910 | 29,629 | 20,209 | 2,649 | 648 | 6,123 | ||||||||||||||||||
1-4 family construction
|
1,130 | - | - | - | - | - | ||||||||||||||||||
Other construction
|
4,015 | 295 | - | 295 | - | - | ||||||||||||||||||
Construction, land development and other land loans
|
111,131 | 48,557 | 22,603 | 13,771 | 2,565 | 9,618 | ||||||||||||||||||
Commercial, commercial real estate and consumer
|
296,033 | 58,431 | 7,276 | 32,586 | 4,666 | 13,903 | ||||||||||||||||||
Total Florida loans
|
$ | 407,164 | $ | 106,988 | $ | 29,879 | $ | 46,357 | $ | 7,231 | $ | 23,521 |
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
|
$ | 42,990 | $ | 4,319 | 10.05 | % | ||||||
Development
|
13,086 | 1,828 | 13.97 | % | ||||||||
Unimproved land
|
49,910 | 5,951 | 11.92 | % | ||||||||
1-4 family construction
|
1,130 | 18 | 1.59 | % | ||||||||
Other construction
|
4,015 | 282 | 7.02 | % | ||||||||
Construction, land development and other land loans
|
111,131 | 12,398 | 11.16 | % | ||||||||
Commercial, commercial real estate and consumer
|
296,033 | 6,561 | 2.22 | % | ||||||||
Total Florida loans
|
$ | 407,164 | $ | 18,959 | 4.66 | % |
|
(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 $500 thousand are individually assessed for impairment. Impaired loans have been determined to be collateral dependent and assessed using a fair value approach. Fair value estimates begin with appraised values, normally from recently received and reviewed appraisals. Appraised values are adjusted down for costs associated with asset disposal. At the time a loan is deemed to be impaired, the full difference between book value and the most likely estimate of the asset’s net realizable value is charged off. However, as subsequent events dictate and estimated net realizable values decline, required reserves are
established.
|
Other Real Estate by Property Type
(1)
|
||||||
($ in thousands)
|
||||||
June 30, 2011
|
December 31, 2010
|
|||||
Construction, land development and other land loans
|
$ |
62,697
|
$ |
61,963
|
||
1-4 family residential properties
|
13,840
|
13,509
|
||||
Nonfarm, nonresidential properties
|
12,436
|
9,820
|
||||
Other real estate loans
|
1,026
|
1,412
|
||||
Total other real estate
|
$ |
89,999
|
$ |
86,704
|
Writedowns of Other Real Estate by Region
(1)
|
||||||||||||||||
($ in thousands)
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Florida
|
$ | 2,464 | $ | 5,487 | $ | 3,054 | $ | 5,811 | ||||||||
Mississippi
(2)
|
1,434 | 1,296 | 2,488 | 1,358 | ||||||||||||
Tennessee
(3)
|
160 | 641 | 449 | 675 | ||||||||||||
Texas
|
331 | 97 | 401 | 97 | ||||||||||||
Total writedowns of other real estate
|
$ | 4,389 | $ | 7,521 | $ | 6,392 | $ | 7,941 |
(1) - Excludes Covered Other Real Estate
|
||||||||||||||||
(2) - Mississippi includes Central and Southern Mississippi Region
|
||||||||||||||||
(3) - Tennessee includes Memphis, Tennessee and Northern Mississippi Region
|
Covered loans acquired at fair value
|
$ | 97,770 | ||
Accretion to interest income
|
1,515 | |||
Payments received
|
(11,043 | ) | ||
Other activity, net
|
316 | |||
Carrying value at June 30, 2011
|
$ | 88,558 |
Loans secured by real estate:
|
||||
Construction, land development and other land loans
|
$ | 8,477 | ||
Secured by 1-4 family residential properties
|
32,124 | |||
Secured by nonfarm, nonresidential properties
|
35,846 | |||
Other
|
5,363 | |||
Commercial and industrial loans
|
5,570 | |||
Consumer loans
|
163 | |||
Other loans
|
1,015 | |||
Covered loans
|
$ | 88,558 |
Construction, land development and other land properties
|
$ | 1,610 | ||
1-4 family residential properties
|
1,119 | |||
Nonfarm, nonresidential properties
|
4,548 | |||
Other real estate properties
|
208 | |||
Total covered other real estate
|
$ | 7,485 |
Indemnification asset at acquisition date
|
$ | 33,333 | ||
Accretion income
|
(6 | ) | ||
Carrying value at June 30, 2011
|
$ | 33,327 |
Minimum Regulatory
|
||||||||||||||||||||||||
Actual
|
Minimum Regulatory
|
Provision to be
|
||||||||||||||||||||||
Regulatory Capital
|
Capital Required
|
Well-Capitalized
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
At June 30, 2011:
|
||||||||||||||||||||||||
Total Capital (to Risk Weighted Assets)
|
||||||||||||||||||||||||
Trustmark Corporation
|
$ | 1,080,092 | 16.47 | % | $ | 524,535 | 8.00 | % | n/a | n/a | ||||||||||||||
Trustmark National Bank
|
1,042,010 | 16.09 | % | 518,140 | 8.00 | % | $ | 647,675 | 10.00 | % | ||||||||||||||
Tier 1 Capital (to Risk Weighted Assets)
|
||||||||||||||||||||||||
Trustmark Corporation
|
$ | 948,250 | 14.46 | % | $ | 262,268 | 4.00 | % | n/a | n/a | ||||||||||||||
Trustmark National Bank
|
912,559 | 14.09 | % | 259,070 | 4.00 | % | $ | 388,605 | 6.00 | % | ||||||||||||||
Tier 1 Capital (to Average Assets)
|
||||||||||||||||||||||||
Trustmark Corporation
|
$ | 948,250 | 10.18 | % | $ | 279,398 | 3.00 | % | n/a | n/a | ||||||||||||||
Trustmark National Bank
|
912,559 | 9.92 | % | 275,914 | 3.00 | % | $ | 459,857 | 5.00 | % | ||||||||||||||
At December 31, 2010:
|
||||||||||||||||||||||||
Total Capital (to Risk Weighted Assets)
|
||||||||||||||||||||||||
Trustmark Corporation
|
$ | 1,051,933 | 15.77 | % | $ | 533,774 | 8.00 | % | n/a | n/a | ||||||||||||||
Trustmark National Bank
|
1,014,219 | 15.40 | % | 526,894 | 8.00 | % | $ | 658,617 | 10.00 | % | ||||||||||||||
Tier 1 Capital (to Risk Weighted Assets)
|
||||||||||||||||||||||||
Trustmark Corporation
|
$ | 918,600 | 13.77 | % | $ | 266,887 | 4.00 | % | n/a | n/a | ||||||||||||||
Trustmark National Bank
|
883,549 | 13.42 | % | 263,447 | 4.00 | % | $ | 395,170 | 6.00 | % | ||||||||||||||
Tier 1 Capital (to Average Assets)
|
||||||||||||||||||||||||
Trustmark Corporation
|
$ | 918,600 | 10.14 | % | $ | 271,867 | 3.00 | % | n/a | n/a | ||||||||||||||
Trustmark National Bank
|
883,549 | 9.89 | % | 267,967 | 3.00 | % | $ | 446,612 | 5.00 | % |
Interest Rate Exposure Analysis
|
Estimated Annual % Change
|
|||||||
in Net Interest Income
|
||||||||
2011
|
2010
|
|||||||
Change in Interest Rates
|
||||||||
+200 basis points
|
-2.2 | % | -2.2 | % | ||||
+100 basis points
|
-1.2 | % | -1.7 | % | ||||
-100 basis points
|
-3.6 | % | -2.3 | % |
Economic Value - at - Risk
|
Estimated % Change
|
|||||||
in Net Portfolio Value
|
||||||||
2011
|
2010
|
|||||||
Change in Interest Rates
|
||||||||
+200 basis points
|
0.6 | % | 1.2 | % | ||||
+100 basis points
|
1.7 | % | 1.9 | % | ||||
-100 basis points
|
-6.0 | % | -4.5 | % |
BY:
|
/s/ Gerard R. Host
|
BY:
|
/s/ Louis E. Greer
|
|
|
Gerard R. Host
|
|
Louis E. Greer
|
|
|
President and Chief Executive Officer
|
|
Treasurer, Principal Financial Officer and Principal Accounting Officer
|
|
|
|
|
|
|
DATE:
|
August 8, 2011
|
DATE:
|
August 8, 2011
|
Award Date:
|
<<grant date>>
|
|
Number of Award Shares:
|
<< number of shares>> shares
|
PARTICIPANT | |||
|
|||
<<name>> | |||
Dated: |
Granted <<grant date>> |
|
(a)
|
Subject to earlier vesting or forfeiture as provided below, the period of restriction (the “Period of Restriction”) applicable to the Award Shares is the period from <<vesting schedule>>, with vesting in the Award Shares being 100% if the Participant’s service as a member of the Board of Directors of the Company or its Subsidiaries continues for the entire Period of Restriction.
|
|
(b)
|
Except as contemplated in Paragraph 2(c), the Award Shares may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, otherwise than by will or by the laws of descent and distribution, during the Period of Restriction. Except as otherwise provided pursuant to Paragraph 2(c), the Award Shares as determined pursuant to Paragraph 2(a) shall become freely transferable by the Participant as of the last day of the Period of Restriction.
|
|
(c)
|
Subject to earlier forfeiture as provided below, in the event a Vesting Acceleration Event occurs while the Participant is a member of the Board of Directors of the Company or one of its Subsidiaries and after the first calendar quarter in, but prior to the last day of, the Period of Restriction, then vesting in 100% of the Award Shares shall occur on the date of such Vesting Acceleration Event, and the Period of Restriction with respect to the Award Shares shall end, the restrictions applicable to the Award Shares shall automatically terminate, and the Award Shares shall be free of restrictions and freely transferable on such date.
|
|
(d)
|
The following terms have the following meanings for purposes hereof:
|
|
(i)
|
“Cause” means that the Participant (A) has committed an act of personal dishonesty, embezzlement or fraud, (B) has misused alcohol or drugs, (C) has failed to pay any obligation owed to the Company or any affiliate, (D) has breached a fiduciary duty or deliberately disregarded any rule of the Company or any affiliate, (E) has committed an act of willful misconduct, or the intentional failure to perform stated duties, (F) has willfully violated any law, rule or regulation (other than misdemeanors, traffic violations or similar offenses) or any final cease-and-desist order, (G) has disclosed without authorization any confidential information of the Company or any affiliate, (H) has engaged in any conduct constituting unfair competition, (I) has induced any customer of the Company or any affiliate to breach a contract with the Company or any affiliate, (J) has been convicted of, or has entered a guilty plea or plea of no contest to, any felony or misdemeanor involving moral turpitude, (K) has failed to perform substantially his duties with and responsibilities to the Company (other than any such failure resulting from incapacity due to disability), (L) has violated in any material respect the Company’s or any affiliate's policies or procedures, including without limitation, the Code of Ethics, or (M) has engaged in conduct that has resulted, or if it became known by any regulatory or governmental agency or the public is reasonably likely to result, in the good faith judgment of the Board of Directors, in material injury to the Company or any affiliate, whether monetary, reputational or otherwise.
|
|
(ii)
|
“Vesting Acceleration Event” means (A) the Participant’s death, (B) the Participant’s retirement from the Board of Directors of the Company and its Subsidiaries, with the consent of the Committee or its delegate, at or after age sixty-five (65) where there is no Cause (as defined herein) for the Company to terminate the Participant’s service, (C) the Participant’s cessation of service as a member of the Board of Directors of the Company and its Subsidiaries, with the consent of the Committee or its delegate, at the end of the term for which last elected and where there is no Cause (as defined herein) for the Company to terminate the Participant’s service, (D) the termination of the Participant’s service as a member of the Board of Directors of the Company and its Subsidiaries by the Company or a Subsidiary (or their respective shareholders) other than for Cause (as defined herein), (E) the occurrence of a Change in Control which with respect to the Participant is a change in the ownership or effective control of the Company or in the ownership of a substantial portion of its assets (as defined in Section 409A of the Internal Revenue Code), or (F) the Participant’s termination of service as a member of the Board of Directors of the Company and its Subsidiaries due to becoming disabled (as defined for purposes of Section 22(e)(3) of the Internal Revenue Code).
|
|
(a)
|
The Company shall issue the Award Shares either: (i) in certificate form as provided in Paragraph 3(b) below; or (ii) in book entry form, registered in the name of the Participant with notations regarding the applicable restrictions on transfer imposed under this Agreement.
|
|
(b)
|
Any certificates representing the Award Shares shall be held by the Company until such time as the restrictions hereunder lapse and such Award Shares become transferable, or are forfeited hereunder. Any Award Shares issued in book entry form shall be subject to the following legend and any certificates representing the Award Shares shall bear the following legend, until such time as the restrictions hereunder lapse and such shares become transferable:
|
|
(c)
|
Promptly after the lapse of the restrictions with respect to any of the Award Shares, the Company shall, as applicable, either remove the notations on any of the Award Shares issued in book entry form as to which the restrictions have lapsed or deliver to the Participant a certificate or certificates evidencing the number of Award Shares as to which the restrictions have lapsed.
|
|
(d)
|
The Committee may require, concurrently with the execution and delivery of this Agreement, the Participant to deliver to the Company an executed stock power, in blank, with respect to the Award Shares. The Participant, by acceptance of the Award, shall be deemed to appoint, and does so appoint, the Company and each of its authorized representatives as the Participant’s attorney(s) in fact to effect any transfer of forfeited shares (or shares otherwise reacquired or withheld by the Company hereunder) to the Company as may be required pursuant to the Plan or this Agreement and to execute such documents as the Company or such representatives deem necessary or advisable in connection with any such transfer.
|
|
(a)
|
It is intended that any right or benefit which is provided pursuant to or in connection with this Award which is considered to be nonqualified deferred compensation subject to Section 409A (“Section 409A”) of the Internal Revenue Code (a “409A benefit”) shall be provided and paid in a manner, and at such time (i.e., at the applicable event described herein if a Section 409A payment event or otherwise at the first Section 409A payment event thereafter consisting of a fixed time (here, <<date2>>), a Section 409A disability, a Section 409A separation from service (as described below), or a Section 409A change with respect to the Participant in the ownership or effective control of the Company or in the ownership of a substantial portion of its assets of the Company and including, in the discretion of the Committee or its delegate, any applicable Section 409A de minimis limited cashout payment permitted under Treasury Reg. Section 1.409A-3(j)(4)(v)) and in such form, as complies with the applicable requirements of Section 409A to avoid the unfavorable tax consequences provided therein for non-compliance. Consequently, this Agreement is intended to be administered, interpreted and construed in accordance with the applicable requirements of Section 409A. Notwithstanding the foregoing, the Participant and his or her successor in interest shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on the Participant or his or her successor in interest in connection with this Agreement (including any taxes and penalties under Section 409A); and neither the Company nor any of its affiliates shall have any obligation to indemnify or otherwise hold the Participant or his or her successor in interest harmless from any or all of such taxes or penalties.
|
|
(b)
|
Except as permitted under Section 409A, any 409A benefit payable to the Participant or for his or her benefit with respect to the Award may not be reduced by, or offset against, any amount owing by the Participant to the Company or any of its affiliates.
|
|
(c)
|
To the extent that entitlement to payment of any 409A benefit occurs due to termination or cessation of employment, termination or cessation of employment shall be read to mean “separation from service” (within the meaning of Section 409A and as applicable to the Company and its affiliates). Where entitlement to payment occurs by reason of such termination or cessation of employment and the Participant is a “specified employee” (within the meaning of Section 409A, as applicable to the Company and its affiliates and using the identification methodology selected by the Company from time to time in accordance with Section 409A) on the date of his or her “separation from service”, then payment of such 409A benefit shall be delayed (without interest) until the first business day after the end of the six month delay period required under Section 409A or, if earlier, after the Participant’s death. In determining separation from service, separation from service is determined based on the “Separation from Service” definition in the Trustmark Corporation Deferred Compensation Plan (as in effect on <<date3>>).
|
COMPANY: | |||
TRUSTMARK CORPORATION | |||
|
By:
|
||
Its: |
1)
|
I have reviewed this quarterly report on Form 10-Q of Trustmark Corporation;
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5)
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
BY:
|
/s/ Gerard R. Host
|
|
Gerard R. Host
|
||
President and Chief Executive Officer
|
||
DATE:
|
August 8, 2011
|
|
1)
|
I have reviewed this quarterly report on Form 10-Q of Trustmark Corporation;
|
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4)
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5)
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
BY:
|
/s/ Louis E. Greer
|
|
Louis E. Greer
|
||
Treasurer, Principal Financial Officer and
Principal Accounting Officer
|
||
DATE:
|
August 8, 2011
|
|
1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Trustmark.
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BY:
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/s/ Gerard R. Host
|
|
Gerard R. Host
|
||
President and Chief Executive Officer
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||
DATE:
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August 8, 2011
|
|
1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Trustmark.
|
BY:
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/s/ Louis E. Greer
|
|
Louis E. Greer
|
||
Treasurer, Principal Financial Officer and Principal Accounting Officer
|
||
DATE:
|
August 8, 2011
|