Trustmark Corporation (NASDAQ:TRMK) announced net income available to common shareholders of $26.2 million in the second quarter of 2010, which represented basic earnings per common share of $0.41. Trustmark’s second quarter net income produced a return on average tangible common equity of 12.92%. During the first six months of 2010, Trustmark’s net income available to common shareholders totaled $49.6 million, which represented basic earnings per common share of $0.78. Trustmark’s performance during the first half of 2010 resulted in a return on average tangible common equity of 12.45%. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per common share. The dividend is payable September 15, 2010, to shareholders of record on September 1, 2010.

Printer friendly version of earnings release with consolidated financial statements and notes: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=6373486&lang=en

Richard G. Hickson, Chairman and CEO, stated, “Trustmark’s financial results reflect revenue growth across our banking, mortgage, insurance, and wealth management businesses. In addition to expanded revenue, Trustmark’s credit quality improved as evidenced by lower nonperforming loans and net charge-offs. Noninterest expense remained well-controlled. Trustmark is positioned to meet the needs of our customers and take advantage of growth opportunities in the marketplace to build shareholder value.”

Credit Quality
  • Nonperforming loans declined to $159.9 million
  • Net charge-offs improved to 0.72% of average loans
  • Allowance for loan losses represented 148.9% of nonperforming loans (excluding impaired loans with no specific reserves)
  • Continued to monitor potential impact of Gulf Oil Spill

During the second quarter, nonperforming loans decreased $5.6 million relative to the prior quarter to total $159.9 million, or 2.55% of total loans. This improvement was principally attributable to a reduction in new nonperforming loans of approximately $24.4 million relative to the prior quarter. Foreclosed real estate increased $224 thousand to total $91.4 million. At June 30, 2010, nonperforming assets totaled $251.3 million, a decrease of $5.4 million from the prior quarter, to represent 3.95% of total loans and other real estate.

Net charge-offs totaled $11.4 million, or 0.72% of average loans, while the provision for loan losses totaled $10.4 million during the second quarter. Allocation of Trustmark’s $100.7 million allowance for loan losses represented 2.10% of commercial loans and 0.82% of consumer and home mortgage loans, resulting in an allowance to total loans of 1.66% as of June 30, 2010.

Trustmark continued to make significant progress in the resolution of its construction and land development portfolio in Florida. During the last 12 months, this portfolio has been reduced by 29.2% to $173.9 million. At June 30, 2010, Florida nonimpaired construction and land development loans totaled $137.8 million with an associated reserve for loan losses of $18.6 million, or 13.52%. Managing credit risks resulting from current economic and real estate market conditions continues to be a primary focus for Trustmark.

BP’s Deepwater Horizon oil rig exploded and sank in the Gulf of Mexico on April 20, 2010, resulting in the largest oil spill in U.S. history. While cleanup and recovery efforts are on-going, the long term economic and environmental impacts have yet to be determined. Following the explosion, Trustmark initiated a process to identify loans that could be impacted and began discussions with customers in potentially affected markets and industries to gain additional insight regarding the impact of the Gulf Oil Spill on their businesses. Based upon current information, Trustmark believes its reserve for loan losses is appropriate without an additional reserve for the Gulf Oil Spill. Trustmark will continue to monitor the impact of the Gulf Oil Spill and stands ready to assist impacted customers.

Capital Strength
  • Tangible common equity to tangible assets increased to 9.32%
  • Total risk-based capital increased to 15.53%, significantly exceeding “well-capitalized” standards

Consistent profitability and sound balance sheet management continued to be reflected in Trustmark’s solid capital position. At June 30, 2010, tangible common equity totaled $833.2 million and represented 9.32% of tangible assets. Total risk-based capital increased to 15.53%, significantly exceeding the 10% regulatory requirement to be classified as “well-capitalized.” Trustmark’s strong capital base provides strategic flexibility to support organic growth as well as acquisition opportunities that strengthen the value of the franchise.

The fundamental strengths of Trustmark’s diversified financial services business were reflected in pre-tax, pre-provision earnings of $49.0 million in the second quarter of 2010. Trustmark continues to believe in the sustainability of its cash dividend to shareholders based upon its existing capital base and the expectation of the level of profitability going forward.

Balance Sheet Management
  • Net interest income (FTE) expanded to $91.9 million
  • Net interest margin increased to 4.47%

Average loans during the second quarter totaled $6.3 billion, a decline of $111.5 million from the prior quarter, and reflected continued efforts to reduce exposure to construction and land development lending as well as the decision to discontinue indirect auto financing. Current economic conditions also reduced demand for credit. Average investment securities during the second quarter increased $56.4 million to $1.9 billion. As a result, average earning assets remained relatively stable at $8.2 billion during the second quarter.

Average deposits totaled $7.2 billion during the second quarter, an increase of $76.3 million relative to the prior quarter. Lower deposit costs continued to reflect Trustmark’s strong liquidity while disciplined loan pricing and required minimum loan rates increased loan yields. As a result, net interest income (FTE) expanded to $91.9 million while the net interest margin increased to 4.47% during the second quarter.

Noninterest Income
  • Noninterest income increased to 32.9% of total revenue
  • Service charges expanded to $14.2 million

Noninterest income during the second quarter totaled $44.9 million, an increase of $6.6 million from the prior quarter. Service charges on deposit accounts totaled $14.2 million, reflecting a seasonal increase from the prior quarter and an increase from levels one year earlier. Mortgage banking income during the quarter was $8.9 million, an increase of $2.8 million from the prior quarter. Performance in mortgage banking reflected solid mortgage servicing income and successful hedging initiatives. Bank card and other fees totaled $6.4 million, an increase of $537 thousand from the prior quarter. Insurance revenue and wealth management income remained stable during the quarter at $6.9 million and $5.6 million, respectively. Trustmark took advantage of opportunities presented by the current interest rate environment to reduce the risk profile of its investment securities portfolio with the sale of approximately $51 million in longer duration, higher convexity securities. The sale of these securities resulted in a pre-tax gain of $1.9 million during the second quarter.

Noninterest Expense

  • Loan and foreclosure expense increased $7.2 million
  • Core noninterest expense remained well-controlled

During the second quarter of 2010, noninterest expense totaled $84.4 million, an increase of $8.1 million from the prior quarter. Approximately 89% of the growth was attributable to increased loan and foreclosure expense. Excluding the increase in these two categories, core noninterest expense increased $899 thousand, or 1.2%.

ADDITIONAL INFORMATION

As previously announced, Trustmark will conduct a conference call with analysts on Wednesday, July 28 at 10:00 a.m. Central Time to discuss the Corporation’s financial results. Interested parties may listen to the conference call by dialing (800) 860-2442, passcode 436565 or by clicking on the link provided under the Investor Relations section of our website at www.trustmark.com. A replay of the conference call will also be available through Wednesday, August 4, 2010 in archived format at the same web address or by calling (877) 344-7529, passcode 436565.

Trustmark is a financial services company providing banking and financial solutions through over 150 offices in Florida, Mississippi, Tennessee and Texas.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by words such as “may,” “hope,” “will,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “continue,” “could,” “future” or the negative of those terms or other words of similar meaning. You should read statements that contain these words carefully because they discuss our future expectations or state other “forward-looking” information. These forward-looking statements include, but are not limited to, statements relating to anticipated future operating and financial performance measures, including net interest margin, credit quality, business initiatives, growth opportunities and growth rates, among other things, and encompass any estimate, prediction, expectation, projection, opinion, anticipation, outlook or statement of belief included therein as well as the management assumptions underlying these forward-looking statements. You should be aware that the occurrence of the events described under the caption “Risk Factors” in Trustmark’s filings with the Securities and Exchange Commission could have an adverse effect on our business, results of operations and financial condition. Should one or more of these risks materialize, or should any such underlying assumptions prove to be significantly different, actual results may vary significantly from those anticipated, estimated, projected or expected.

Risks that could cause actual results to differ materially from current expectations of Management include, but are not limited to, changes in the level of nonperforming assets and charge-offs, local, state and national economic and market conditions, including the extent and duration of the current volatility in the credit and financial markets, changes in our ability to measure the fair value of assets in our portfolio, material changes in the level and/or volatility of market interest rates, the performance and demand for the products and services we offer, including the level and timing of withdrawals from our deposit accounts, the costs and effects of litigation and of unexpected or adverse outcomes in such litigation, our ability to attract noninterest-bearing deposits and other low-cost funds, competition in loan and deposit pricing, as well as the entry of new competitors into our markets through de novo expansion and acquisitions, economic conditions and monetary and other governmental actions designed to address the level and volatility of interest rates and the volatility of securities, currency and other markets, the enactment of legislation and changes in existing regulations, or enforcement practices, or the adoption of new regulations, changes in accounting standards and practices, including changes in the interpretation of existing standards, that affect our consolidated financial statements, changes in consumer spending, borrowings and savings habits, technological changes, changes in the financial performance or condition of our borrowers, changes in our ability to control expenses, changes in our compensation and benefit plans, greater than expected costs or difficulties related to the integration of new products and lines of business, natural disasters, environmental disasters, acts of war or terrorism and other risks described in our filings with the Securities and Exchange Commission.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Except as required by law, we undertake no obligation to update or revise any of this information, whether as the result of new information, future events or developments or otherwise.
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
June 30, 2010
($ in thousands)
(unaudited)
 
                Linked Quarter     Year over Year

QUARTERLY AVERAGE BALANCES
6/30/2010 3/31/2010 6/30/2009

$ Change
    % Change

$ Change
    % Change
Securities AFS-taxable $ 1,586,165 $ 1,514,029 $ 1,395,303 $ 72,136 4.8 % $ 190,862 13.7 %
Securities AFS-nontaxable 110,969 105,067 70,165 5,902 5.6 % 40,804 58.2 %
Securities HTM-taxable 162,691 179,076 194,079 (16,385 ) -9.1 % (31,388 ) -16.2 %
Securities HTM-nontaxable   41,628     46,852     61,166     (5,224 ) -11.2 %   (19,538 ) -31.9 %
Total securities   1,901,453     1,845,024     1,720,713     56,429   3.1 %   180,740   10.5 %
Loans (including loans held for sale) 6,301,201 6,412,671 6,880,909 (111,470 ) -1.7 % (579,708 ) -8.4 %
Fed funds sold and rev repos 7,478 10,438 20,973 (2,960 ) -28.4 % (13,495 ) -64.3 %
Other earning assets   38,764     46,199     47,084     (7,435 ) -16.1 %   (8,320 ) -17.7 %
Total earning assets   8,248,896     8,314,332     8,669,679     (65,436 ) -0.8 %   (420,783 ) -4.9 %
Allowance for loan losses (104,814 ) (106,200 ) (106,491 ) 1,386 -1.3 % 1,677 -1.6 %
Cash and due from banks 207,670 216,305 214,633 (8,635 ) -4.0 % (6,963 ) -3.2 %
Other assets   898,749     910,401     824,724     (11,652 ) -1.3 %   74,025   9.0 %
Total assets $ 9,250,501   $ 9,334,838   $ 9,602,545   $ (84,337 ) -0.9 % $ (352,044 ) -3.7 %
 
Interest-bearing demand deposits $ 1,306,783 $ 1,270,827 $ 1,131,765 $ 35,956 2.8 % $ 175,018 15.5 %
Savings deposits 2,066,612 1,953,711 1,869,794 112,901 5.8 % 196,818 10.5 %
Time deposits less than $100,000 1,307,611 1,356,469 1,493,172 (48,858 ) -3.6 % (185,561 ) -12.4 %
Time deposits of $100,000 or more   989,397     1,014,027     1,096,170     (24,630 ) -2.4 %   (106,773 ) -9.7 %
Total interest-bearing deposits 5,670,403 5,595,034 5,590,901 75,369 1.3 % 79,502 1.4 %
Fed funds purchased and repos 495,904 600,826 589,542 (104,922 ) -17.5 % (93,638 ) -15.9 %
Short-term borrowings 181,669 199,550 340,816 (17,881 ) -9.0 % (159,147 ) -46.7 %
Long-term FHLB advances 15,833 75,000 75,000 (59,167 ) -78.9 % (59,167 ) -78.9 %
Subordinated notes 49,785 49,777 49,752 8 0.0 % 33 0.1 %
Junior subordinated debt securities   70,104     70,104     70,104     -   0.0 %   -   0.0 %
Total interest-bearing liabilities 6,483,698 6,590,291 6,716,115 (106,593 ) -1.6 % (232,417 ) -3.5 %
Noninterest-bearing deposits 1,536,153 1,535,209 1,554,642 944 0.1 % (18,489 ) -1.2 %
Other liabilities   91,715     85,982     124,586     5,733   6.7 %   (32,871 ) -26.4 %
Total liabilities 8,111,566 8,211,482 8,395,343 (99,916 ) -1.2 % (283,777 ) -3.4 %
Preferred equity - - 205,860 - n/m (205,860 ) -100.0 %
Common equity   1,138,935     1,123,356     1,001,342     15,579   1.4 %   137,593   13.7 %
Total shareholders' equity   1,138,935     1,123,356     1,207,202     15,579   1.4 %   (68,267 ) -5.7 %
Total liabilities and equity $ 9,250,501   $ 9,334,838   $ 9,602,545   $ (84,337 ) -0.9 % $ (352,044 ) -3.7 %
 
 
Linked Quarter Year over Year

PERIOD END BALANCES
6/30/2010 3/31/2010 6/30/2009

$ Change
% Change

$ Change
% Change
Cash and due from banks $ 186,365 $ 191,973 $ 220,706 $ (5,608 ) -2.9 % $ (34,341 ) -15.6 %
Fed funds sold and rev repos 5,713 11,599 16,367 (5,886 ) -50.7 % (10,654 ) -65.1 %
Securities available for sale 1,786,710 1,706,565 1,488,428 80,145 4.7 % 298,282 20.0 %
Securities held to maturity 192,860 215,888 254,380 (23,028 ) -10.7 % (61,520 ) -24.2 %
Loans held for sale 218,369 176,682 280,975 41,687 23.6 % (62,606 ) -22.3 %
Loans 6,054,995 6,170,878 6,570,582 (115,883 ) -1.9 % (515,587 ) -7.8 %
Allowance for loan losses   (100,656 )   (101,643 )   (101,751 )   987   -1.0 %   1,095   -1.1 %
Net Loans 5,954,339 6,069,235 6,468,831 (114,896 ) -1.9 % (514,492 ) -8.0 %
Premises and equipment, net 143,536 145,113 150,233 (1,577 ) -1.1 % (6,697 ) -4.5 %
Mortgage servicing rights 43,044 50,037 63,316 (6,993 ) -14.0 % (20,272 ) -32.0 %
Goodwill 291,104 291,104 291,104 - 0.0 % - 0.0 %
Identifiable intangible assets 18,062 18,944 21,820 (882 ) -4.7 % (3,758 ) -17.2 %
Other assets   404,443     416,075     370,710     (11,632 ) -2.8 %   33,733   9.1 %
Total assets $ 9,244,545   $ 9,293,215   $ 9,626,870   $ (48,670 ) -0.5 % $ (382,325 ) -4.0 %
 
Deposits:
Noninterest-bearing $ 1,539,598 $ 1,511,080 $ 1,558,934 $ 28,518 1.9 % $ (19,336 ) -1.2 %
Interest-bearing   5,599,796     5,635,973     5,588,955     (36,177 ) -0.6 %   10,841   0.2 %
Total deposits 7,139,394 7,147,053 7,147,889 (7,659 ) -0.1 % (8,495 ) -0.1 %
Fed funds purchased and repos 492,367 571,711 627,616 (79,344 ) -13.9 % (135,249 ) -21.5 %
Short-term borrowings 208,136 132,784 314,751 75,352 56.7 % (106,615 ) -33.9 %
Long-term FHLB advances - 75,000 75,000 (75,000 ) n/m (75,000 ) n/m
Subordinated notes 49,790 49,782 49,758 8 0.0 % 32 0.1 %
Junior subordinated debt securities 70,104 70,104 70,104 - 0.0 % - 0.0 %
Other liabilities   142,374     118,252     139,638     24,122   20.4 %   2,736   2.0 %
Total liabilities   8,102,165     8,164,686     8,424,756     (62,521 ) -0.8 %   (322,591 ) -3.8 %
Preferred stock - - 206,009 - n/m (206,009 ) -100.0 %
Common stock 13,311 13,302 11,964 9 0.1 % 1,347 11.3 %
Capital surplus 253,133 250,365 143,654 2,768 1.1 % 109,479 76.2 %
Retained earnings 870,532 860,398 845,882 10,134 1.2 % 24,650 2.9 %

Accum other comprehensive income (loss), net of tax
  5,404     4,464     (5,395 )   940   21.1 %   10,799   n/m
Total shareholders' equity   1,142,380     1,128,529     1,202,114     13,851   1.2 %   (59,734 ) -5.0 %
Total liabilities and equity $ 9,244,545   $ 9,293,215   $ 9,626,870   $ (48,670 ) -0.5 % $ (382,325 ) -4.0 %
 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 

See Notes to Consolidated Financials
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
June 30, 2010
($ in thousands except per share data)
(unaudited)
 
    Quarter Ended     Linked Quarter     Year over Year

INCOME STATEMENTS
6/30/2010     3/31/2010     6/30/2009

$ Change
    % Change

$ Change
    % Change
Interest and fees on loans-FTE $ 84,362 $ 84,127 $ 91,652 $ 235 0.3 % $ (7,290 ) -8.0 %
Interest on securities-taxable 19,626 19,735 20,444 (109 ) -0.6 % (818 ) -4.0 %
Interest on securities-tax exempt-FTE 2,151 2,180 2,040 (29 ) -1.3 % 111 5.4 %
Interest on fed funds sold and rev repos 7 8 19 (1 ) -12.5 % (12 ) -63.2 %
Other interest income   366     383     343     (17 ) -4.4 %   23   6.7 %
Total interest income-FTE   106,512     106,433     114,498     79   0.1 %   (7,986 ) -7.0 %
Interest on deposits 12,785 13,904 21,430 (1,119 ) -8.0 % (8,645 ) -40.3 %
Interest on fed funds pch and repos 260 226 272 34 15.0 % (12 ) -4.4 %
Other interest expense   1,597     1,592     1,980     5   0.3 %   (383 ) -19.3 %
Total interest expense   14,642     15,722     23,682     (1,080 ) -6.9 %   (9,040 ) -38.2 %
Net interest income-FTE 91,870 90,711 90,816 1,159 1.3 % 1,054 1.2 %
Provision for loan losses   10,398     15,095     26,767     (4,697 ) -31.1 %   (16,369 ) -61.2 %
Net interest income after provision-FTE   81,472     75,616     64,049     5,856   7.7 %   17,423   27.2 %
Service charges on deposit accounts 14,220 12,977 13,244 1,243 9.6 % 976 7.4 %
Insurance commissions 6,884 6,837 7,372 47 0.7 % (488 ) -6.6 %
Wealth management 5,558 5,355 5,497 203 3.8 % 61 1.1 %
Bank card and other fees 6,417 5,880 6,063 537 9.1 % 354 5.8 %
Mortgage banking, net 8,910 6,072 2,543 2,838 46.7 % 6,367 n/m
Other, net   1,103     879     1,693     224   25.5 %   (590 ) -34.8 %
Nonint inc-excl sec gains, net 43,092 38,000 36,412 5,092 13.4 % 6,680 18.3 %
Security gains, net   1,855     369     4,404     1,486   n/m   (2,549 ) -57.9 %
Total noninterest income   44,947     38,369     40,816     6,578   17.1 %   4,131   10.1 %
Salaries and employee benefits 43,282 42,854 40,989 428 1.0 % 2,293 5.6 %
Services and fees 10,523 10,255 10,249 268 2.6 % 274 2.7 %
Net occupancy-premises 4,917 5,034 4,948 (117 ) -2.3 % (31 ) -0.6 %
Equipment expense 4,247 4,303 4,108 (56 ) -1.3 % 139 3.4 %
Other expense   21,459     13,915     18,677     7,544   54.2 %   2,782   14.9 %
Total noninterest expense   84,428     76,361     78,971     8,067   10.6 %   5,457   6.9 %
Income before income taxes and tax eq adj 41,991 37,624 25,894 4,367 11.6 % 16,097 62.2 %
Tax equivalent adjustment   3,384     3,293     2,325     91   2.8 %   1,059   45.5 %
Income before income taxes 38,607 34,331 23,569 4,276 12.5 % 15,038 63.8 %
Income taxes   12,446     10,876     6,994     1,570   14.4 %   5,452   78.0 %
Net income   26,161     23,455     16,575     2,706   11.5 %   9,586   57.8 %
 
Preferred stock dividends - - 2,687 - n/m (2,687 ) -100.0 %
Accretion of preferred stock discount   -     -     445     -   n/m   (445 ) -100.0 %
Net income available to common shareholders $ 26,161   $ 23,455   $ 13,443   $ 2,706   11.5 % $ 12,718   94.6 %
 
 
Per common share data
Earnings per share - basic $ 0.41   $ 0.37   $ 0.23   $ 0.04   10.8 % $ 0.18   78.3 %
 
Earnings per share - diluted $ 0.41   $ 0.37   $ 0.23   $ 0.04   10.8 % $ 0.18   78.3 %
 
Dividends per share $ 0.23   $ 0.23   $ 0.23   $ -   0.0 % $ -   0.0 %
 
Weighted average common shares outstanding
Basic   63,872,879     63,743,302     57,406,499  
 
Diluted   64,054,171     63,933,333     57,546,928  
 
Period end common shares outstanding   63,885,403     63,844,500     57,423,841  
 

OTHER FINANCIAL DATA
Return on common equity 9.21 % 8.47 % 5.38 %
Return on average tangible common equity 12.92 % 11.98 % 8.20 %
Return on equity 9.21 % 8.47 % 5.51 %
Return on assets 1.13 % 1.02 % 0.69 %
Interest margin - Yield - FTE 5.18 % 5.19 % 5.30 %
Interest margin - Cost 0.71 % 0.77 % 1.10 %
Net interest margin - FTE 4.47 % 4.42 % 4.20 %
Efficiency ratio 62.56 % 59.33 % 58.57 %
Full-time equivalent employees 2,527 2,506 2,562

 

COMMON STOCK PERFORMANCE
Market value-Close $ 20.82 $ 24.43 $ 19.32
Common book value $ 17.88 $ 17.68 $ 17.35
Tangible common book value $ 13.04 $ 12.82 $ 11.90
 
n/m - percentage changes greater than +/- 100% are considered not meaningful
 

See Notes to Consolidated Financials
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
June 30, 2010
($ in thousands)
(unaudited)
 
    Quarter Ended     Linked Quarter     Year over Year

NONPERFORMING ASSETS
6/30/2010     3/31/2010     6/30/2009

$ Change
    % Change

$ Change
    % Change
Nonaccrual loans
Florida $ 74,954 $ 79,687 $ 72,185 $ (4,733 ) -5.9 % $ 2,769 3.8 %
Mississippi (1) 39,924 41,795 32,040 (1,871 ) -4.5 % 7,884 24.6 %
Tennessee (2) 9,778 12,673 2,941 (2,895 ) -22.8 % 6,837 n/m
Texas   35,222     31,354     25,824     3,868   12.3 %   9,398   36.4 %
Total nonaccrual loans 159,878 165,509 132,990 (5,631 ) -3.4 % 26,888 20.2 %
Other real estate
Florida 31,814 40,145 26,387 (8,331 ) -20.8 % 5,427 20.6 %
Mississippi (1) 28,020 23,082 15,542 4,938 21.4 % 12,478 80.3 %
Tennessee (2) 12,493 9,769 10,234 2,724 27.9 % 2,259 22.1 %
Texas   19,073     18,180     3,033     893   4.9 %   16,040   n/m
Total other real estate   91,400     91,176     55,196     224   0.2 %   36,204   65.6 %
Total nonperforming assets $ 251,278   $ 256,685   $ 188,186   $ (5,407 ) -2.1 % $ 63,092   33.5 %
 

LOANS PAST DUE OVER 90 DAYS
Loans held for investment $ 6,057   $ 8,411   $ 6,873   $ (2,354 ) -28.0 % $ (816 ) -11.9 %
 
Loans HFS-Guaranteed GNMA serviced loans
(no obligation to repurchase) $ 49,712   $ 48,571   $ 28,523   $ 1,141   2.3 % $ 21,189   74.3 %
 
 
Quarter Ended Linked Quarter Year over Year

ALLOWANCE FOR LOAN LOSSES
6/30/2010 3/31/2010 6/30/2009

$ Change
% Change

$ Change
% Change
Beginning Balance $ 101,643 $ 103,662 $ 100,358 $ (2,019 ) -1.9 % $ 1,285 1.3 %
Provision for loan losses 10,398 15,095 26,767 (4,697 ) -31.1 % (16,369 ) -61.2 %
Charge-offs (14,297 ) (19,775 ) (27,870 ) 5,478 -27.7 % 13,573 -48.7 %
Recoveries   2,912     2,661     2,496     251   9.4 %   416   16.7 %
Net charge-offs   (11,385 )   (17,114 )   (25,374 )   5,729   -33.5 %   13,989   -55.1 %
Ending Balance $ 100,656   $ 101,643   $ 101,751   $ (987 ) -1.0 % $ (1,095 ) -1.1 %
 

PROVISION FOR LOAN LOSSES
Florida $ 2,432 $ 5,501 $ 28,915 $ (3,069 ) -55.8 % $ (26,483 ) -91.6 %
Mississippi (1) 3,430 3,748 (1,044 ) (318 ) -8.5 % 4,474 n/m
Tennessee (2) 3,560 1,314 (659 ) 2,246 n/m 4,219 n/m
Texas   976     4,532     (445 )   (3,556 ) -78.5 %   1,421   n/m
Total provision for loan losses $ 10,398   $ 15,095   $ 26,767   $ (4,697 ) -31.1 % $ (16,369 ) -61.2 %
 

NET CHARGE-OFFS
Florida $ 5,880 $ 8,989 $ 21,167 $ (3,109 ) -34.6 % $ (15,287 ) -72.2 %
Mississippi (1) 3,885 6,777 3,267 (2,892 ) -42.7 % 618 18.9 %
Tennessee (2) 1,031 426 897 605 n/m 134 14.9 %
Texas   589     922     43     (333 ) -36.1 %   546   n/m
Total net charge-offs $ 11,385   $ 17,114   $ 25,374   $ (5,729 ) -33.5 % $ (13,989 ) -55.1 %
 

CREDIT QUALITY RATIOS
Net charge offs/average loans 0.72 % 1.08 % 1.48 %
Provision for loan losses/average loans 0.66 % 0.95 % 1.56 %
Nonperforming loans/total loans (incl LHFS) 2.55 % 2.61 % 1.94 %
Nonperforming assets/total loans (incl LHFS) 4.01 % 4.04 % 2.75 %
Nonperforming assets/total loans (incl LHFS) +ORE 3.95 % 3.99 % 2.72 %
ALL/total loans (excl LHFS) 1.66 % 1.65 % 1.55 %
ALL-commercial/total commercial loans 2.10 % 2.10 % 2.01 %
ALL-consumer/total consumer and home mortgage loans 0.82 % 0.80 % 0.73 %
ALL/nonperforming loans 62.96 % 61.41 % 76.51 %

ALL/nonperforming loans - (excl impaired loans with no specific reserves)
148.86 % 131.36 % 123.15 %
 

CAPITAL RATIOS
Total equity/total assets 12.36 % 12.14 % 12.49 %
Common equity/total assets 12.36 % 12.14 % 10.35 %
Tangible common equity/tangible assets 9.32 % 9.11 % 7.34 %
Tangible common equity/risk-weighted assets 12.51 % 12.15 % 9.56 %
Tier 1 leverage ratio 10.07 % 9.81 % 10.38 %
Tier 1 common risk-based capital ratio 12.51 % 12.14 % 9.66 %
Tier 1 risk-based capital ratio 13.53 % 13.15 % 13.50 %
Total risk-based capital ratio 15.53 % 15.15 % 15.45 %
 
(1) - Mississippi includes Central and Southern Mississippi Regions
(2) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions
n/m - percentage changes greater than +/- 100% are considered not meaningful
 

See Notes to Consolidated Financials
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
June 30, 2010
($ in thousands)
(unaudited)
 
    Quarter Ended     Six Months Ended

AVERAGE BALANCES
6/30/2010     3/31/2010     12/31/2009     9/30/2009     6/30/2009 6/30/2010     6/30/2009
Securities AFS-taxable $ 1,586,165 $ 1,514,029 $ 1,369,022 $ 1,377,318 $ 1,395,303 $ 1,550,296 $ 1,450,012
Securities AFS-nontaxable 110,969 105,067 98,456 89,259 70,165 108,034 56,871
Securities HTM-taxable 162,691 179,076 202,235 191,934 194,079 170,838 186,291
Securities HTM-nontaxable   41,628     46,852     50,411     55,440     61,166     44,226     64,220  
Total securities   1,901,453     1,845,024     1,720,124     1,713,951     1,720,713     1,873,394     1,757,394  
Loans (including loans held for sale) 6,301,201 6,412,671 6,544,448 6,693,482 6,880,909 6,356,628 6,931,136
Fed funds sold and rev repos 7,478 10,438 10,609 12,821 20,973 8,950 18,494
Other earning assets   38,764     46,199     44,197     43,894     47,084     42,461     43,803  
Total earning assets   8,248,896     8,314,332     8,319,378     8,464,148     8,669,679     8,281,433     8,750,827  
Allowance for loan losses (104,814 ) (106,200 ) (105,223 ) (102,545 ) (106,491 ) (105,503 ) (102,262 )
Cash and due from banks 207,670 216,305 199,586 205,361 214,633 211,964 227,002
Other assets   898,749     910,401     855,714     871,477     824,724     904,543     814,128  
Total assets $ 9,250,501   $ 9,334,838   $ 9,269,455   $ 9,438,441   $ 9,602,545   $ 9,292,437   $ 9,689,695  
 
Interest-bearing demand deposits $ 1,306,783 $ 1,270,827 $ 1,134,995 $ 1,148,537 $ 1,131,765 $ 1,288,904 $ 1,125,093
Savings deposits 2,066,612 1,953,711 1,801,870 1,797,421 1,869,794 2,010,473 1,842,883
Time deposits less than $100,000 1,307,611 1,356,469 1,422,270 1,434,097 1,493,172 1,331,905 1,489,446
Time deposits of $100,000 or more   989,397     1,014,027     1,039,565     1,095,431     1,096,170     1,001,644     1,085,580  
Total interest-bearing deposits 5,670,403 5,595,034 5,398,700 5,475,486 5,590,901 5,632,926 5,543,002
Fed funds purchased and repos 495,904 600,826 579,616 644,012 589,542 548,075 631,625
Short-term borrowings 181,669 199,550 238,060 263,891 340,816 190,560 493,363
Long-term FHLB advances 15,833 75,000 75,000 75,000 75,000 45,253 66,713
Subordinated notes 49,785 49,777 49,769 49,760 49,752 49,781 49,748
Junior subordinated debt securities   70,104     70,104     70,104     70,104     70,104     70,104     70,104  
Total interest-bearing liabilities 6,483,698 6,590,291 6,411,249 6,578,253 6,716,115 6,536,699 6,854,555
Noninterest-bearing deposits 1,536,153 1,535,209 1,533,588 1,529,381 1,554,642 1,535,683 1,512,963
Other liabilities   91,715     85,982     118,906     113,820     124,586     88,866     122,336  
Total liabilities 8,111,566 8,211,482 8,063,743 8,221,454 8,395,343 8,161,248 8,489,854
Preferred equity - - 157,270 206,308 205,860 - 205,640
Common equity   1,138,935     1,123,356     1,048,442     1,010,679     1,001,342     1,131,189     994,201  
Total shareholders' equity   1,138,935     1,123,356     1,205,712     1,216,987     1,207,202     1,131,189     1,199,841  
Total liabilities and equity $ 9,250,501   $ 9,334,838   $ 9,269,455   $ 9,438,441   $ 9,602,545   $ 9,292,437   $ 9,689,695  
 
 

PERIOD END BALANCES
6/30/2010 3/31/2010 12/31/2009 9/30/2009 6/30/2009
Cash and due from banks $ 186,365 $ 191,973 $ 213,519 $ 191,449 $ 220,706
Fed funds sold and rev repos 5,713 11,599 6,374 8,551 16,367
Securities available for sale 1,786,710 1,706,565 1,684,396 1,528,625 1,488,428
Securities held to maturity 192,860 215,888 232,984 242,603 254,380
Loans held for sale 218,369 176,682 226,225 237,152 280,975
Loans 6,054,995 6,170,878 6,319,797 6,382,440 6,570,582
Allowance for loan losses   (100,656 )   (101,643 )   (103,662 )   (103,016 )   (101,751 )
Net Loans 5,954,339 6,069,235 6,216,135 6,279,424 6,468,831
Premises and equipment, net 143,536 145,113 147,488 148,656 150,233
Mortgage servicing rights 43,044 50,037 50,513 56,042 63,316
Goodwill 291,104 291,104 291,104 291,104 291,104
Identifiable intangible assets 18,062 18,944 19,825 20,819 21,820
Other assets   404,443     416,075     437,455     364,073     370,710  
Total assets $ 9,244,545   $ 9,293,215   $ 9,526,018   $ 9,368,498   $ 9,626,870  
 
Deposits:
Noninterest-bearing $ 1,539,598 $ 1,511,080 $ 1,685,187 $ 1,493,424 $ 1,558,934
Interest-bearing   5,599,796     5,635,973     5,503,278     5,377,011     5,588,955  
Total deposits 7,139,394 7,147,053 7,188,465 6,870,435 7,147,889
Fed funds purchased and repos 492,367 571,711 653,032 645,057 627,616
Short-term borrowings 208,136 132,784 253,957 315,105 314,751
Long-term FHLB advances - 75,000 75,000 75,000 75,000
Subordinated notes 49,790 49,782 49,774 49,766 49,758
Junior subordinated debt securities 70,104 70,104 70,104 70,104 70,104
Other liabilities   142,374     118,252     125,626     121,670     139,638  
Total liabilities   8,102,165     8,164,686     8,415,958     8,147,137     8,424,756  
Preferred stock - - - 206,461 206,009
Common stock 13,311 13,302 13,267 11,968 11,964
Capital surplus 253,133 250,365 244,864 145,352 143,654
Retained earnings 870,532 860,398 853,553 854,508 845,882

Accum other comprehensive income (loss), net of tax
  5,404     4,464     (1,624 )   3,072     (5,395 )
Total shareholders' equity   1,142,380     1,128,529     1,110,060     1,221,361     1,202,114  
Total liabilities and equity $ 9,244,545   $ 9,293,215   $ 9,526,018   $ 9,368,498   $ 9,626,870  
 

See Notes to Consolidated Financials
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
June 30, 2010
($ in thousands except per share data)
(unaudited)
 
    Quarter Ended     Six Months Ended

INCOME STATEMENTS
6/30/2010     3/31/2010     12/31/2009     9/30/2009     6/30/2009 6/30/2010     6/30/2009
Interest and fees on loans-FTE $ 84,362 $ 84,127 $ 87,640 $ 89,672 $ 91,652 $ 168,489 $ 184,034
Interest on securities-taxable 19,626 19,735 19,093 19,524 20,444 39,361 42,098
Interest on securities-tax exempt-FTE 2,151 2,180 2,183 2,172 2,040 4,331 3,874
Interest on fed funds sold and rev repos 7 8 12 16 19 15 38
Other interest income   366     383     377     381     343     749     656  
Total interest income-FTE   106,512     106,433     109,305     111,765     114,498     212,945     230,700  
Interest on deposits 12,785 13,904 16,513 18,403 21,430 26,689 43,970
Interest on fed funds pch and repos 260 226 215 282 272 486 636
Other interest expense   1,597     1,592     1,716     1,786     1,980     3,189     4,332  
Total interest expense   14,642     15,722     18,444     20,471     23,682     30,364     48,938  
Net interest income-FTE 91,870 90,711 90,861 91,294 90,816 182,581 181,762
Provision for loan losses   10,398     15,095     17,709     15,770     26,767     25,493     43,633  
Net interest income after provision-FTE   81,472     75,616     73,152     75,524     64,049     157,088     138,129  
Service charges on deposit accounts 14,220 12,977 14,118 14,157 13,244 27,197 25,812
Insurance commissions 6,884 6,837 6,391 7,894 7,372 13,721 14,794
Wealth management 5,558 5,355 5,438 5,589 5,497 10,913 11,052
Bank card and other fees 6,417 5,880 5,951 5,620 6,063 12,297 11,470
Mortgage banking, net 8,910 6,072 6,552 8,871 2,543 14,982 13,450
Other, net   1,103     879     1,814     994     1,693     1,982     2,808  
Nonint inc-excl sec gains, net 43,092 38,000 40,264 43,125 36,412 81,092 79,386
Security gains, net   1,855     369     19     1,014     4,404     2,224     4,434  
Total noninterest income   44,947     38,369     40,283     44,139     40,816     83,316     83,820  
Salaries and employee benefits 43,282 42,854 42,209 42,629 40,989 86,136 84,414
Services and fees 10,523 10,255 9,919 10,124 10,249 20,778 20,249
Net occupancy-premises 4,917 5,034 5,063 4,862 4,948 9,951 10,126
Equipment expense 4,247 4,303 4,084 4,104 4,108 8,550 8,274
Other expense   21,459     13,915     14,372     17,515     18,677     35,374     30,315  
Total noninterest expense   84,428     76,361     75,647     79,234     78,971     160,789     153,378  
Income before income taxes and tax eq adj 41,991 37,624 37,788 40,429 25,894 79,615 68,571
Tax equivalent adjustment   3,384     3,293     2,569     2,417     2,325     6,677     4,722  
Income before income taxes 38,607 34,331 35,219 38,012 23,569 72,938 63,849
Income taxes   12,446     10,876     10,742     12,502     6,994     23,322     20,789  
Net income   26,161     23,455     24,477     25,510     16,575     49,616     43,060  
 
Preferred stock dividends - - 2,061 2,688 2,687 - 5,375
Accretion of preferred stock discount   -     -     8,539     452     445     -     883  
Net income available to common shareholders $ 26,161   $ 23,455   $ 13,877   $ 22,370   $ 13,443   $ 49,616   $ 36,802  
 
Per common share data
Earnings per share - basic $ 0.41   $ 0.37   $ 0.23   $ 0.39   $ 0.23   $ 0.78   $ 0.64  
 
Earnings per share - diluted $ 0.41   $ 0.37   $ 0.23   $ 0.39   $ 0.23   $ 0.78   $ 0.64  
 
Dividends per share $ 0.23   $ 0.23   $ 0.23   $ 0.23   $ 0.23   $ 0.46   $ 0.46  
 
Weighted average common shares outstanding
Basic   63,872,879     63,743,302     59,131,451     57,431,128     57,406,499     63,808,448     57,378,840  
 
Diluted   64,054,171     63,933,333     59,287,459     57,559,492     57,546,928     63,993,460     57,446,888  
 
Period end common shares outstanding   63,885,403     63,844,500     63,673,839     57,440,047     57,423,841     63,885,403     57,423,841  
 
 

OTHER FINANCIAL DATA
Return on common equity 9.21 % 8.47 % 5.25 % 8.78 % 5.38 % 8.85 % 7.46 %
Return on average tangible common equity 12.92 % 11.98 % 7.80 % 13.06 % 8.20 % 12.45 % 11.28 %
Return on equity 9.21 % 8.47 % 8.05 % 8.32 % 5.51 % 8.85 % 7.24 %
Return on assets 1.13 % 1.02 % 1.05 % 1.07 % 0.69 % 1.08 % 0.90 %
Interest margin - Yield - FTE 5.18 % 5.19 % 5.21 % 5.24 % 5.30 % 5.19 % 5.32 %
Interest margin - Cost 0.71 % 0.77 % 0.88 % 0.96 % 1.10 % 0.74 % 1.13 %
Net interest margin - FTE 4.47 % 4.42 % 4.33 % 4.28 % 4.20 % 4.45 % 4.19 %
Efficiency ratio 62.56 % 59.33 % 57.69 % 58.95 % 58.57 % 60.98 % 58.46 %
Full-time equivalent employees 2,527 2,506 2,524 2,550 2,562
 

 

COMMON STOCK PERFORMANCE
Market value-Close $ 20.82 $ 24.43 $ 22.54 $ 19.05 $ 19.32
Common book value $ 17.88 $ 17.68 $ 17.43 $ 17.67 $ 17.35
Tangible common book value $ 13.04 $ 12.82 $ 12.55 $ 12.24 $ 11.90
 

See Notes to Consolidated Financials
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
June 30, 2010
($ in thousands)
(unaudited)
 
    Quarter Ended        

NONPERFORMING ASSETS
6/30/2010     3/31/2010     12/31/2009     9/30/2009     6/30/2009
Nonaccrual loans
Florida $ 74,954 $ 79,687 $ 74,159 $ 72,063 $ 72,185
Mississippi (1) 39,924 41,795 31,050 28,470 32,040
Tennessee (2) 9,778 12,673 12,749 11,481 2,941
Texas   35,222     31,354     23,204     26,490     25,824  

Total nonaccrual loans
159,878 165,509 141,162 138,504 132,990
Other real estate
Florida 31,814 40,145 45,927 34,030 26,387
Mississippi (1) 28,020 23,082 22,373 22,932 15,542
Tennessee (2) 12,493 9,769 10,105 9,809 10,234
Texas   19,073     18,180     11,690     4,918     3,033  
Total other real estate   91,400     91,176     90,095     71,689     55,196  
Total nonperforming assets $ 251,278   $ 256,685   $ 231,257   $ 210,193   $ 188,186  
 

LOANS PAST DUE OVER 90 DAYS
Loans held for investment $ 6,057   $ 8,411   $ 8,901   $ 6,854   $ 6,873  
 
Loans HFS-Guaranteed GNMA serviced loans
(no obligation to repurchase) $ 49,712   $ 48,571   $ 46,661   $ 36,686   $ 28,523  
 
 
Quarter Ended Six Months Ended

ALLOWANCE FOR LOAN LOSSES
6/30/2010 3/31/2010 12/31/2009 9/30/2009 6/30/2009 6/30/2010 6/30/2009
Beginning Balance $ 101,643 $ 103,662 $ 103,016 $ 101,751 $ 100,358 $ 103,662 $ 94,922
Provision for loan losses 10,398 15,095 17,709 15,770 26,767 25,493 43,633
Charge-offs (14,297 ) (19,775 ) (20,139 ) (18,687 ) (27,870 ) (34,072 ) (41,885 )
Recoveries   2,912     2,661     3,076     4,182     2,496     5,573     5,081  
Net charge-offs   (11,385 )   (17,114 )   (17,063 )   (14,505 )   (25,374 )   (28,499 )   (36,804 )
Ending Balance $ 100,656   $ 101,643   $ 103,662   $ 103,016   $ 101,751   $ 100,656   $ 101,751  
 

PROVISION FOR LOAN LOSSES
Florida $ 2,432 $ 5,501 $ 11,371 $ (3,295 ) $ 28,915 $ 7,933 $ 39,648
Mississippi (1) 3,430 3,748 6,310 12,009 (1,044 ) 7,178 3,342
Tennessee (2) 3,560 1,314 2,097 159 (659 ) 4,874 962
Texas   976     4,532     (2,069 )   6,897     (445 )   5,508     (319 )
Total provision for loan losses $ 10,398   $ 15,095   $ 17,709   $ 15,770   $ 26,767   $ 25,493   $ 43,633  
 

NET CHARGE-OFFS
Florida $ 5,880 $ 8,989 $ 8,174 $ 131 $ 21,167 $ 14,869 $ 28,100
Mississippi (1) 3,885 6,777 5,448 9,629 3,267 10,662 6,722
Tennessee (2) 1,031 426 1,169 872 897 1,457 1,682
Texas   589     922     2,272     3,873     43     1,511     300  
Total net charge-offs $ 11,385   $ 17,114   $ 17,063   $ 14,505   $ 25,374   $ 28,499   $ 36,804  
 

CREDIT QUALITY RATIOS
Net charge offs/average loans 0.72 % 1.08 % 1.03 % 0.86 % 1.48 % 0.90 % 1.07 %
Provision for loan losses/average loans 0.66 % 0.95 % 1.07 % 0.93 % 1.56 % 0.81 % 1.27 %
Nonperforming loans/total loans (incl LHFS) 2.55 % 2.61 % 2.16 % 2.09 % 1.94 %
Nonperforming assets/total loans (incl LHFS) 4.01 % 4.04 % 3.53 % 3.18 % 2.75 %
Nonperforming assets/total loans (incl LHFS) +ORE 3.95 % 3.99 % 3.48 % 3.14 % 2.72 %
ALL/total loans (excl LHFS) 1.66 % 1.65 % 1.64 % 1.61 % 1.55 %
ALL-commercial/total commercial loans 2.10 % 2.10 % 2.10 % 2.08 % 2.01 %
ALL-consumer/total consumer and home mortgage loans 0.82 % 0.80 % 0.80 % 0.76 % 0.73 %
ALL/nonperforming loans 62.96 % 61.41 % 73.43 % 74.38 % 76.51 %

ALL/nonperforming loans - (excl impaired loans with no specific reserves)
148.86 % 131.36 % 150.13 % 117.93 % 123.15 %
 

CAPITAL RATIOS
Total equity/total assets 12.36 % 12.14 % 11.65 % 13.04 % 12.49 %
Common equity/total assets 12.36 % 12.14 % 11.65 % 10.83 % 10.35 %
Tangible common equity/tangible assets 9.32 % 9.11 % 8.67 % 7.76 % 7.34 %
Tangible common equity/risk-weighted assets 12.51 % 12.15 % 11.55 % 10.15 % 9.56 %
Tier 1 leverage ratio 10.07 % 9.81 % 9.74 % 10.70 % 10.38 %
Tier 1 common risk-based capital ratio 12.51 % 12.14 % 11.63 % 10.15 % 9.66 %
Tier 1 risk-based capital ratio 13.53 % 13.15 % 12.61 % 14.11 % 13.50 %
Total risk-based capital ratio 15.53 % 15.15 % 14.58 % 16.09 % 15.45 %
 
(1) - Mississippi includes Central and Southern Mississippi Regions
(2) - Tennessee includes Memphis, Tennessee and Northern Mississippi Regions
 

See Notes to Consolidated Financials
 
TRUSTMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIALS
June 30, 2010
($ in thousands)
(unaudited)
 

Note 1 - Securities Available for Sale and Held to Maturity
 

The following table is a summary of the estimated fair value of securities available for sale and the amortized cost of securities held to maturity ($ in thousands):

 
    6/30/2010     3/31/2010     12/31/2009     9/30/2009     6/30/2009

SECURITIES AVAILABLE FOR SALE
U.S. Government agency obligations
Issued by U.S. Government agencies $ 16 $ 18 $ 20 $ 21 $ 23
Issued by U.S. Government sponsored agencies 124,566 68,574 47,917 24,992 25,189
Obligations of states and political subdivisions 125,234 123,292 117,508 151,427 137,799
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA 13,390 11,986 12,192 9,590 10,000
Issued by FNMA and FHLMC 142,900 51,292 49,279 7,229 7,193
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA 1,333,725 1,387,752 1,382,556 1,258,779 1,209,677
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA 40,789 57,485 68,735 70,359 92,395
Corporate debt securities   6,090   6,166   6,189   6,228   6,152
Total securities available for sale $ 1,786,710 $ 1,706,565 $ 1,684,396 $ 1,528,625 $ 1,488,428
 

SECURITIES HELD TO MATURITY
Obligations of states and political subdivisions $ 64,517 $ 69,975 $ 74,643 $ 78,522 $ 89,331
Mortgage-backed securities
Residential mortgage pass-through securities
Guaranteed by GNMA 6,591 6,801 7,044 7,269 7,298
Other residential mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA 118,708 136,054 148,226 153,728 154,655
Commercial mortgage-backed securities
Issued or guaranteed by FNMA, FHLMC, or GNMA   3,044   3,058   3,071   3,084   3,096
Total securities held to maturity $ 192,860 $ 215,888 $ 232,984 $ 242,603 $ 254,380
 

Management continues to focus on asset quality as one of the strategic goals of the securities portfolio, which is evidenced by the investment of approximately 90% of the portfolio in U.S. Government agency-backed obligations and other AAA rated securities. None of the securities owned by Trustmark are collateralized by assets which are considered sub-prime. Furthermore, outside of membership in the Federal Home Loan Bank of Dallas, Federal Reserve Bank and Depository Trust and Clearing Corporation, Trustmark does not hold any equity investment in government sponsored entities.
 

Note 2 – Loan Composition
 
                   

LOANS BY TYPE
6/30/2010 3/31/2010 12/31/2009 9/30/2009 6/30/2009
Loans secured by real estate:
Construction, land development and other land loans $ 737,015 $ 803,942 $ 830,069 $ 872,367 $ 960,945
Secured by 1-4 family residential properties 1,630,353 1,637,121 1,650,743 1,637,322 1,663,575
Secured by nonfarm, nonresidential properties 1,463,657 1,466,296 1,467,307 1,472,147 1,472,212
Other real estate secured 189,118 194,641 197,421 209,957 186,770
Commercial and industrial loans 1,040,152 1,041,580 1,059,164 1,101,967 1,138,631
Consumer loans 492,262 542,488 606,315 661,075 727,399
Other loans   502,438     484,810     508,778     427,605     421,050  
Loans 6,054,995 6,170,878 6,319,797 6,382,440 6,570,582
Allowance for loan losses   (100,656 )   (101,643 )   (103,662 )   (103,016 )   (101,751 )
Net Loans $ 5,954,339   $ 6,069,235   $ 6,216,135   $ 6,279,424   $ 6,468,831  
 
Note 2 – Loan Composition (continued)
 
    June 30, 2010

LOAN COMPOSITION BY REGION
Total     Florida    

Mississippi

(Central and

Southern

Regions)
   

Tennessee

(Memphis, TN

and Northern

MS Regions)
    Texas
Loans secured by real estate:
Construction, land development and other land loans $ 737,015 $ 173,932 $ 285,595 $ 53,215 $ 224,273
Secured by 1-4 family residential properties 1,630,353 77,680 1,353,489 161,662 37,522
Secured by nonfarm, nonresidential properties 1,463,657 178,297 801,981 211,588 271,791
Other real estate secured 189,118 8,062 162,620 9,465 8,971
Commercial and industrial loans 1,040,152 25,254 754,571 70,819 189,508
Consumer loans 492,262 1,756 456,091 26,456 7,959
Other loans   502,438   29,354   421,512   19,323   32,249
Loans $ 6,054,995 $ 494,335 $ 4,235,859 $ 552,528 $ 772,273
 
 

CONSTRUCTION, LAND DEVELOPMENT AND OTHER LAND LOANS BY REGION
Lots $ 93,100 $ 54,406 $ 23,030 $ 2,726 $ 12,938
Development 174,092 24,632 62,624 10,889 75,947
Unimproved land 243,038 69,003 99,955 26,348 47,732
1-4 family construction 112,854 9,148 72,087 5,426 26,193
Other construction   113,931   16,743   27,899   7,826   61,463
Construction, land development and other land loans $ 737,015 $ 173,932 $ 285,595 $ 53,215 $ 224,273
 
 

LOANS SECURED BY NONFARM, NONRESIDENTIAL PROPERTIES BY REGION
Income producing:
Retail $ 180,158 $ 37,510 $ 80,024 $ 28,936 $ 33,688
Office 161,271 54,455 82,221 13,920 10,675
Nursing homes/assisted living 118,731 - 108,628 4,728 5,375
Hotel/motel 67,545 12,752 30,411 10,960 13,422
Industrial 30,908 7,101 5,532 1,189 17,086
Health care 10,521 - 10,457 64 -
Convenience stores 9,429 277 4,735 2,562 1,855
Other   156,089   13,148   61,366   17,244   64,331
Total income producing loans 734,652 125,243 383,374 79,603 146,432
 
Owner-occupied:
Office 122,607 21,380 64,283 17,682 19,262
Churches 120,572 2,306 54,951 59,353 3,962
Industrial warehouses 84,962 1,373 55,472 416 27,701
Health care 71,082 11,232 50,025 3,741 6,084
Convenience stores 59,377 1,296 38,891 2,903 16,287
Retail 33,251 5,925 19,633 1,444 6,249
Restaurants 32,810 855 24,562 6,040 1,353
Auto dealerships 20,976 624 15,473 1,602 3,277
Other   183,368   8,063   95,317   38,804   41,184
Total owner-occupied loans 729,005 53,054 418,607 131,985 125,359
         
Loans secured by nonfarm, nonresidential properties $ 1,463,657 $ 178,297 $ 801,981 $ 211,588 $ 271,791