Trustmark(TRMK) - 2024 Q2 - Quarterly Results

Executive Summary & Highlights This section provides an overview of Trustmark's Q2 2024 performance, detailing net income, strategic transactions, and key financial highlights Second Quarter 2024 Overview Trustmark Corporation reported net income of $73.8 million, or $1.20 diluted EPS, for Q2 2024, with net income from adjusted continuing operations at $40.5 million, or $0.66 diluted EPS. The quarter was marked by significant strategic actions including the sale of FBBI and balance sheet restructuring to enhance profitability and reduce risk Key Financial Metrics (in millions, except EPS) | Metric | Q2 2024 | | :---------------------------------- | :-------------------- | | Net Income | $73.8 | | Diluted EPS | $1.20 | | Net Income from Adjusted Continuing Operations | $40.5 | | Diluted EPS from Adjusted Continuing Operations | $0.66 | - Trustmark's CEO, Duane A. Dewey, stated that Q2 2024 was an "extremely productive quarter" due to the sale of the insurance agency and significant balance sheet restructuring, positioning the company for improved operating performance[14] - The core banking franchise also performed well with continued loan growth, deposit growth, solid fee income, and disciplined expense management[14] - The Board of Directors declared a quarterly cash dividend of $0.23 per share payable September 15, 2024[14] Significant Non-Routine Transactions Trustmark completed several significant non-routine transactions in Q2 2024, including the sale of Fisher Brown Bottrell Insurance, Inc. (FBBI) for a $228.3 million gain, restructuring its investment securities portfolio resulting in a $182.8 million loss, and selling a portfolio of 1-4 family mortgage loans for a $13.4 million loss. The company also exchanged Visa Class B-1 shares, generating an $8.1 million gain Impact of Non-Routine Transactions (in millions) | Transaction | Impact | | :------------------------------------ | :------------------- | | Sale of FBBI | $228.3 gain ($171.2 net of taxes) | | Investment Securities Portfolio Restructuring (Loss) | $182.8 loss ($137.1 net of taxes) | | Mortgage Loan Sale (Loss) | $13.4 loss ($10.1 net of taxes) | | Visa Class C Stock Exchange (Gain) | $8.1 gain ($6.0 net of taxes) | - The investment securities portfolio restructuring involved selling $1.561 billion of available-for-sale securities with an average yield of 1.36% and purchasing $1.378 billion of available-for-sale securities with an average yield of 4.85%[14][29] - The Mortgage Loan Sale involved a portfolio of $56.2 million of 1-4 family mortgage loans that were three payments delinquent and/or nonaccrual, driving a $54.1 million reduction in nonperforming loans[14][29] Second Quarter Highlights Key highlights for Q2 2024 include a 0.7% linked-quarter increase in Loans HFI to $13.2 billion (1.2% excluding Mortgage Loan Sale), a 0.8% linked-quarter increase in deposits to $15.5 billion, and a 6.0% linked-quarter increase in Net Interest Income (FTE) to $144.3 million, with Net Interest Margin rising 17 basis points to 3.38%. Noninterest expense declined 1.1% linked-quarter, and capital ratios improved significantly Key Performance Indicators (in millions, except ratios) | Metric | Q2 2024 | Linked-Quarter Change | Year-over-Year Change | | :---------------------------------- | :-------------------- | :-------------------- | :-------------------- | | Loans HFI | $13,200 | +0.7% | +4.3% | | Deposits | $15,500 | +0.8% | +3.7% | | Net Interest Income (FTE) | $144.3 | +6.0% | +0.7% | | Net Interest Margin | 3.38% | +17 bps | +5 bps | | Noninterest Expense | $118.3 | -1.1% | -2.7% | | Tangible Equity to Tangible Assets Ratio | 8.52% | +105 bps | +169 bps | | Tangible Book Value Per Share | $25.23 | +14.5% | +24.7% | Financial Performance This section analyzes Trustmark's Q2 2024 financial performance, focusing on revenue generation, noninterest expenses, and net income per share Revenue Generation Revenue from adjusted continuing operations increased 4.1% linked-quarter to $179.3 million, driven by higher net interest income and growth in bank card fees and wealth management. GAAP revenue was negative $0.3 million due to significant non-routine transactions Overall Revenue (in millions) | Metric | Q2 2024 | Linked-Quarter Change | Year-over-Year Change | | :---------------------------------- | :-------------------- | :-------------------- | :-------------------- | | Revenue from Adjusted Continuing Operations | $179.3 | +4.1% | +0.9% | | GAAP Revenue | $(0.3) | n/m | n/m | Net Interest Income This section examines net interest income, net interest margin, and the cost of interest-bearing and total deposits for Q2 2024 Net Interest Income Metrics (in millions, except ratios) | Metric | Q2 2024 | Linked-Quarter Change | Year-over-Year Change | | :-------------------- | :-------------------- | :-------------------- | :-------------------- | | Net Interest Income (FTE) | $144.3 | +6.0% | +0.7% | | Net Interest Margin | 3.38% | +17 bps | +5 bps | | Cost of Interest-Bearing Deposits | 2.75% | +1 bp | +79 bps | | Cost of Total Deposits | 2.18% | Unchanged | +70 bps | - The increase in net interest margin was primarily due to increased yields on the securities portfolio and the loans HFI and held for sale portfolio, as well as the costs of interest-bearing deposits remaining relatively flat[3][50] Noninterest Income This section details the components of noninterest income, including bank card fees, service charges, and other net income, for Q2 2024 Noninterest Income Components (in millions) | Metric | Q2 2024 | Linked-Quarter Change | Year-over-Year Change | | :---------------------------------- | :-------------------- | :-------------------- | :-------------------- | | GAAP Noninterest Income | $(141.3) | n/m | n/m | | Noninterest Income from Adjusted Continuing Operations | $38.2 | -2.8% | +1.1% | | Bank Card and Other Fees | $9.2 | +24.2% | +3.5% | | Service Charges on Deposit Accounts | $10.9 | Unchanged | +2.1% | | Other, net | $7.5 | n/m | n/m | - The linked-quarter increase in Bank Card and Other Fees reflects expanded customer derivative revenue, interchange revenue, and miscellaneous other revenue[3] - The 'Other, net' category includes an $8.1 million gain from Visa C exchange, partially offset by a $4.8 million noncredit-related loss from the Mortgage Loan Sale[3][52] Mortgage Banking Revenue This section outlines mortgage loan production, mortgage banking revenue, and the impact of hedge ineffectiveness on Q2 2024 results Mortgage Banking Performance (in millions) | Metric | Q2 2024 | Linked-Quarter Change | Year-over-Year Change | | :-------------------- | :-------------------- | :-------------------- | :-------------------- | | Mortgage Loan Production | $379.5 | +38.5% | -12.0% | | Mortgage Banking Revenue | $4.2 | -52.8% | -36.3% | | Net Negative Hedge Ineffectiveness | $(4.49) | n/m | n/m | - The linked-quarter decrease in mortgage banking revenue was principally attributable to increased net negative hedge ineffectiveness, driven by a higher assumed discount rate on servicing cash flows[3][60] Wealth Management Revenue This section presents wealth management revenue performance, highlighting growth drivers from investment services and brokerage activities Wealth Management Revenue (in millions) | Metric | Q2 2024 | Linked-Quarter Change | Year-over-Year Change | | :-------------------- | :-------------------- | :-------------------- | :-------------------- | | Wealth Management Revenue | $9.7 | +8.3% | +9.1% | - Linked-quarter growth reflected increased investment services and trust management revenue, while the year-over-year increase reflected expanded brokerage revenue[3] Noninterest Expense Total noninterest expense decreased by $1.3 million, or 1.1%, linked-quarter to $118.3 million. This was mainly due to a decline in salaries and employee benefits, partially offset by increased commission expense Noninterest Expense Components (in millions) | Metric | Q2 2024 | Linked-Quarter Change | Year-over-Year Change | | :-------------------- | :-------------------- | :-------------------- | :-------------------- | | Noninterest Expense | $118.3 | -1.1% | -2.7% | | Salaries and Employee Benefits | $64.8 | -1.0% | -2.9% | | Other Expense | $15.2 | -5.6% | +10.7% | - The decrease in salaries and employee benefits was principally due to reduced compensation expense and the seasonal decline in payroll taxes, partially offset by increased commission expense[3] Net Income and Earnings Per Share Trustmark reported net income of $73.8 million for Q2 2024, resulting in diluted EPS of $1.20. Income from continuing operations was a loss of $100.6 million, while income from discontinued operations (primarily the FBBI sale) was $174.4 million Net Income and EPS (in millions, except EPS) | Metric | Q2 2024 | | :---------------------------------- | :-------------------------------- | | Net Income | $73.8 | | Diluted EPS - Total | $1.20 | | Income (Loss) from Continuing Operations | $(100.6) | | Diluted EPS from Continuing Operations | $(1.64) | | Income from Discontinued Operations | $174.4 | | Diluted EPS from Discontinued Operations | $2.84 | Balance Sheet & Capital Management This section reviews Trustmark's balance sheet and capital management, including loan and deposit trends, capital ratios, and the securities portfolio Loans and Deposits Loans held for investment (HFI) increased 0.7% linked-quarter and 4.3% year-over-year to $13.2 billion, driven by growth in construction, nonfarm nonresidential properties, and other loans. Deposits expanded 0.8% linked-quarter and 3.7% year-over-year to $15.5 billion, with noninterest-bearing deposits representing 20.4% of total deposits Loan and Deposit Trends (in billions, except ratios) | Metric | Q2 2024 | Linked-Quarter Change | Year-over-Year Change | | :-------------------- | :-------------------- | :-------------------- | :-------------------- | | Loans HFI | $13.2 | +0.7% | +4.3% | | Deposits | $15.5 | +0.8% | +3.7% | | Noninterest-Bearing Deposits (% of Total) | 20.4% | +0.6% | -11.5% | | Loans HFI to Total Deposits Ratio | 85.1% | n/m | n/m | - Linked-quarter growth in Loans HFI reflected increases in construction, development and other land loans, loans secured by nonfarm, nonresidential properties, and other loans and leases, offset in part by declines in commercial and industrial loans, other real estate secured loans, and 1-4 family mortgage loans[14] Capital Ratios and Tangible Book Value Trustmark enhanced its strong capital position, with the CET1 ratio at 10.92% and total risk-based capital ratio at 13.29%, both showing significant linked-quarter increases. Tangible equity to tangible assets ratio improved to 8.52%, and tangible book value per share increased 14.5% to $25.23 Capital Adequacy and Tangible Value | Metric | Q2 2024 | Linked-Quarter Change | Year-over-Year Change | | :---------------------------------- | :------ | :-------------------- | :-------------------- | | CET1 Ratio | 10.92% | +80 bps | +105 bps | | Total Risk-Based Capital Ratio | 13.29% | +87 bps | +121 bps | | Tangible Equity to Tangible Assets Ratio | 8.52% | +105 bps | +169 bps | | Tangible Book Value Per Share | $25.23 | +14.5% | +24.7% | Securities Portfolio The securities portfolio was restructured in Q2 2024, involving the sale of $1.561 billion of available-for-sale securities with a 1.36% yield and the purchase of $1.378 billion of available-for-sale securities with a 4.85% yield. The portfolio is 100% invested in U.S. Treasury securities, GSE-backed obligations, and other Aaa rated securities Securities Portfolio Balances (in billions) | Metric | Q2 2024 | Linked-Quarter Change | Year-over-Year Change | | :---------------------------------- | :-------------------- | :-------------------- | :-------------------- | | Total Securities (Average) | $3.29 | -1.8% | -8.9% | | Securities AFS (Period End) | $1.62 | -4.7% | -13.4% | | Securities HTM (Period End) | $1.38 | -2.4% | -5.4% | - Trustmark restructured its investment securities portfolio by selling $1.561 billion of available for sale securities with an average yield of 1.36% and purchasing $1.378 billion of available for sale securities with an average yield of 4.85%[14][29] - The securities portfolio is 100% invested in U.S. Treasury securities, GSE-backed obligations, and other Aaa rated securities, with no sub-prime collateral[47] Credit Quality This section assesses Trustmark's credit quality, focusing on nonperforming assets, the Allowance for Credit Losses, and net charge-offs Nonperforming Assets Nonaccrual loans declined significantly by 55.0% linked-quarter to $44.3 million, primarily due to the Mortgage Loan Sale. Collectively, nonperforming assets decreased by 52.0% linked-quarter to $50.9 million Nonperforming Asset Trends (in millions, except ratios) | Metric | Q2 2024 | Linked-Quarter Change | Year-over-Year Change | | :---------------------------------- | :-------------------- | :-------------------- | :-------------------- | | Nonaccrual Loans | $44.3 | -55.0% | -41.0% | | Other Real Estate | $6.6 | -13.6% | n/m | | Total Nonperforming Assets | $50.9 | -52.0% | -33.2% | | Nonaccrual LHFI / (LHFI + LHFS) | 0.33% | -41 bps | -26 bps | - The Mortgage Loan Sale drove a $54.1 million reduction in nonperforming loans[14] - Nonaccrual LHFI in Mississippi declined 75.0% linked-quarter to $14.77 million, and in Texas declined 95.6% linked-quarter to $0.599 million[22] Allowance for Credit Losses (ACL) The Allowance for Credit Losses (ACL) for loans HFI increased to $154.7 million, representing 1.18% of loans HFI and 840.20% of nonaccrual loans HFI (excluding individually analyzed loans). Management believes the ACL level is commensurate with expected credit losses Allowance for Credit Losses (in millions, except ratios) | Metric | Q2 2024 | Linked-Quarter Change | Year-over-Year Change | | :---------------------------------- | :-------------------- | :-------------------- | :-------------------- | | ACL on Loans HFI (Ending Balance) | $154.7 | +8.2% | +19.6% | | ACL to Loans HFI Ratio | 1.18% | +8 bps | +15 bps | | ACL to Nonaccrual Loans HFI (excl. individually analyzed loans) | 840.20% | +604.91% | +538.76% | | ACL LHFI-Commercial / Commercial LHFI | 1.05% | +12 bps | +21 bps | | ACL LHFI-Consumer / Consumer and Home Mortgage LHFI | 1.59% | -4 bps | -1 bp | - Management believes the level of the ACL is commensurate with the credit losses currently expected in the loan portfolio[3] Net Charge-offs Net charge-offs totaled $11.6 million for Q2 2024. Excluding the Mortgage Loan Sale, net charge-offs were $3.0 million, representing 0.09% of average loans. The provision for credit losses for loans HFI was $23.3 million, or $14.7 million excluding the Mortgage Loan Sale, primarily due to credit migration Net Charge-offs and Provision for Credit Losses (in millions, except ratios) | Metric | Q2 2024 | Linked-Quarter Change | Year-over-Year Change | | :---------------------------------- | :-------------------- | :-------------------- | :-------------------- | | Net Charge-offs | $11.6 | n/m | n/m | | Net Charge-offs (excl. Mortgage Loan Sale) / Average Loans | 0.09% | -3 bps | +5 bps | | Total Provision for Credit Losses for Loans HFI | $23.3 | n/m | n/m | | PCL, LHFI (excl. Mortgage Loan Sale) | $14.7 | +90.7% | +79.0% | | PCL, Off-Balance Sheet Credit Exposures | $(3.6) | n/m | n/m | - The provision for credit losses for loans HFI (excluding the Mortgage Loan Sale) was primarily attributable to credit migration[3] - The provision for credit losses for off-balance sheet credit exposures was a negative $3.6 million, primarily driven by decreases in unfunded commitments[3] Consolidated Financial Information (Detailed Tables) This section provides detailed consolidated financial tables, including average and period-end balances, income statements, nonperforming assets, and key financial ratios Quarterly Average Balances This section provides a detailed breakdown of quarterly average balances for assets, liabilities, and shareholders' equity, showing trends linked-quarter and year-over-year Quarterly Average Balances (in thousands) | Metric | Q2 2024 | Linked-Quarter Change | Year-over-Year Change | | :---------------------------------- | :--------------------- | :-------------------- | :-------------------- | | Total Earning Assets | $17,189,447 | +0.6% | -0.3% | | Total Assets | $18,786,509 | +0.6% | +0.1% | | Total Interest-Bearing Deposits | $12,222,381 | -0.6% | +9.7% | | Total Liabilities | $17,059,020 | +0.3% | -0.8% | | Shareholders' Equity | $1,727,489 | +3.0% | +9.3% | Period End Balances This section presents period-end balances for assets, liabilities, and shareholders' equity, highlighting changes from the prior quarter and prior year Period End Balances (in thousands) | Metric | Q2 2024 | Linked-Quarter Change | Year-over-Year Change | | :---------------------------------- | :--------------------- | :-------------------- | :-------------------- | | Total Assets | $18,452,487 | +0.4% | +0.2% | | Total Deposits | $15,462,888 | +0.8% | +3.7% | | Total Liabilities | $16,573,346 | -0.7% | -1.7% | | Total Shareholders' Equity | $1,879,141 | +11.7% | +19.6% | | Assets of Discontinued Operations | $0 | -100.0% | -100.0% | Income Statements The income statement shows a net income of $73.8 million for Q2 2024. Key figures include total interest income (FTE) of $242.5 million, total interest expense of $98.1 million, and a significant securities loss of $182.8 million Income Statement Highlights (in thousands) | Metric | Q2 2024 | Linked-Quarter Change | Year-over-Year Change | | :---------------------------------- | :--------------------- | :-------------------- | :-------------------- | | Total Interest Income (FTE) | $242,455 | +4.0% | +9.3% | | Total Interest Expense | $98,122 | +1.1% | +24.8% | | Net Interest Income (FTE) | $144,333 | +6.0% | +0.7% | | Securities Gains (Losses), net | $(182,792) | n/m | n/m | | Income (Loss) from Continuing Operations | $(100,605) | n/m | n/m | | Income from Discontinued Operations | $174,437 | n/m | n/m | | Net Income | $73,832 | +77.8% | +63.9% | Nonperforming Assets (Detailed) This section provides a detailed breakdown of nonperforming assets by region, showing significant declines in nonaccrual loans in Mississippi and Texas linked-quarter Nonperforming Assets by Region (in thousands) | Metric | Q2 2024 | Linked-Quarter Change | Year-over-Year Change | | :---------------------------------- | :--------------------- | :-------------------- | :-------------------- | | Total Nonaccrual LHFI | $44,292 | -55.0% | -41.0% | | Mississippi Nonaccrual LHFI | $14,773 | -75.0% | -59.3% | | Texas Nonaccrual LHFI | $599 | -95.6% | -97.3% | | Total Other Real Estate | $6,586 | -13.6% | n/m | | Loans Past Due Over 90 Days (LHFI) | $5,413 | +3.2% | +38.4% | Financial Ratios and Other Data This section presents key financial, credit quality, and capital ratios, including GAAP and Non-GAAP adjusted figures, demonstrating improvements in capital adequacy and efficiency Key Financial Ratios | Metric | Q2 2024 | Linked-Quarter Change | Year-over-Year Change | | :---------------------------------- | :------ | :-------------------- | :-------------------- | | Return on Average Equity - Total | 17.19% | +7.23% | +5.76% | | Efficiency Ratio | 63.81% | -3.09% | -2.31% | | Net Interest Margin - FTE | 3.38% | +17 bps | +5 bps | | Nonperforming Assets / (LHFI + LHFS) | 0.38% | -42 bps | -22 bps | | Total Equity / Total Assets | 10.18% | +102 bps | +165 bps | Notes to Consolidated Financials This section provides detailed notes to the consolidated financials, explaining significant transactions, portfolio compositions, yields, and non-GAAP measures Significant Non-Routine Transactions (Note 1) This note details the four significant non-routine transactions completed in Q2 2024: the sale of FBBI, the restructuring of the investment securities portfolio, the sale of 1-4 family mortgage loans, and the exchange of Visa Class B-1 shares Impact of Non-Routine Transactions (in millions) | Transaction | Impact | | :------------------------------------ | :------------------- | | Sale of FBBI | $228.3 gain ($171.2 net of taxes) | | Investment Securities Portfolio Restructuring (Loss) | $182.8 loss ($137.1 net of taxes) | | Mortgage Loan Sale (Loss) | $13.4 loss ($10.1 net of taxes) | | Visa Class C Stock Exchange (Gain) | $8.1 gain ($6.0 net of taxes) | - The credit-related portion of the Mortgage Loan Sale loss totaled $8.6 million, recorded as adjustments to charge-offs and the provision for credit losses[29] - The noncredit-related portion was $4.8 million, recorded in noninterest income in other, net[29] Securities Available for Sale and Held to Maturity (Note 2) This note provides a summary of the estimated fair value of securities available for sale and the amortized cost of securities held to maturity. The portfolio is entirely invested in high-quality, Aaa-rated securities Securities Portfolio Balances (in thousands) | Metric | Q2 2024 | | :---------------------------------- | :--------------------- | | Total Securities Available for Sale | $1,621,659 | | Total Securities Held to Maturity | $1,380,487 | | Net Unamortized, Unrealized Loss (HTM from AFS) | $52,100 | - The securities portfolio is 100% invested in U.S. Treasury securities, GSE-backed obligations, and other Aaa rated securities, as determined by Moody's[47] - None of the securities are collateralized by sub-prime assets[47] Loan Composition (Note 3) This note details the composition of loans held for investment (LHFI) by type and region. Real estate secured loans constitute a significant portion, with nonfarm, nonresidential properties being the largest category Loans Held for Investment by Type (in thousands) | Loan Type | Q2 2024 | | :------------------------------------------ | :--------------------- | | Construction, land development and other land loans | $1,638,972 | | Secured by 1-4 family residential properties | $2,878,295 | | Secured by nonfarm, nonresidential properties | $3,598,647 | | Other real estate secured | $1,344,968 | | Commercial and industrial loans | $1,880,607 | | Consumer loans | $153,316 | | State and other political subdivision loans | $1,053,015 | | Other loans and leases | $607,598 | | Total LHFI | $13,155,418 | Loans Held for Investment by Region (in thousands) | Region | LHFI | | :----------- | :------------------ | | Mississippi | $6,691,222 | | Alabama | $3,655,149 | | Texas | $1,896,437 | | Florida | $412,832 | | Tennessee | $499,778 | Yields on Earning Assets and Interest-Bearing Liabilities (Note 4) This note provides a detailed breakdown of yields on earning assets and rates paid on interest-bearing liabilities on a tax-equivalent basis, showing the net interest margin increase Yields and Rates | Metric | Q2 2024 | Q1 2024 | Q2 2023 | | :---------------------------------- | :------ | :------ | :------ | | Yield on Total Earning Assets | 5.67% | 5.49% | 5.16% | | Rate on Interest-Bearing Deposits | 2.75% | 2.74% | 1.96% | | Net Interest Margin | 3.38% | 3.21% | 3.33% | - The net interest margin increased 17 basis points linked-quarter, primarily due to increased yields on the securities portfolio and the loans held for investment and held for sale portfolio, as well as the costs of interest-bearing deposits remaining relatively flat[50] Mortgage Banking (Note 5) This note details the components of mortgage banking revenue, including mortgage servicing income, gain on sales of loans, and the impact of hedge ineffectiveness Mortgage Banking Components (in thousands) | Metric | Q2 2024 | | :---------------------------------- | :--------------------- | | Mortgage Servicing Income, net | $6,993 | | Gain on sales of loans, net | $5,151 | | Mortgage banking income before hedge ineffectiveness | $8,697 | | Net positive (negative) hedge ineffectiveness | $(4,493) | | Mortgage banking, net | $4,204 | - The net negative hedge ineffectiveness of $4.5 million during Q2 2024 resulted from comparing the change in value of hedge instruments to the change in the fair value of mortgage servicing rights (MSR) attributable to interest rates and other market-driven changes[60] Other Noninterest Income and Expense (Note 6) This note breaks down other noninterest income and expense components, including the Visa C shares fair value adjustment and the loss on the sale of 1-4 family mortgage loans Other Noninterest Income Components (in thousands) | Other Noninterest Income Component | Q2 2024 | | :------------------------------------------ | :--------------------- | | Partnership amortization for tax credit purposes | $(1,824) | | Increase in life insurance cash surrender value | $1,860 | | Loss on sale of 1-4 family mortgage loans | $(4,798) | | Visa C shares fair value adjustment | $8,056 | | Other miscellaneous income | $4,167 | | Total other, net | $7,461 | Other Noninterest Expense Components (in thousands) | Other Noninterest Expense Component | Q2 2024 | | :------------------------------------------ | :--------------------- | | Loan expense | $2,880 | | Amortization of intangibles | $27 | | FDIC assessment expense | $4,816 | | Other real estate expense, net | $327 | | Other miscellaneous expense | $7,189 | | Total other expense | $15,239 | Non-GAAP Financial Measures (Note 7) This note explains Trustmark's use of non-GAAP financial measures, such as tangible common equity and adjusted continuing operations, for business planning and performance comparison. It provides reconciliations for these measures - Trustmark uses non-GAAP financial measures for business planning, managing against internal projected results, and measuring performance by excluding non-operational and unusual or non-recurring items[54][66] - Tangible common equity is defined as common equity less goodwill and identifiable intangible assets[54] - These measures are intended to complement GAAP and regulatory capital ratios[54] Non-GAAP Adjusted Metrics (in thousands, except EPS) | Non-GAAP Metric | Q2 2024 | | :------------------------------------------ | :--------------------------------- | | Noninterest income from adjusted continuing operations | $38,248 | | Noninterest expense from adjusted continuing operations | $118,326 | | PPNR (Pre-Provision Net Revenue) | $60,951 | | Net income adjusted for significant non-routine transactions | $40,520 | | Diluted EPS from adjusted continuing operations | $0.66 | Forward-Looking Statements & Risk Factors This section outlines cautionary statements regarding forward-looking information and details various risk factors that could impact future results Forward-Looking Statements This section contains cautionary statements regarding forward-looking information, emphasizing that actual results may differ materially due to various risks. Trustmark undertakes no obligation to update or revise this information, except as required by law - Forward-looking statements are identified by words such as "may," "hope," "will," "should," "expect," "plan," "anticipate," "intend," "believe," "estimate," "predict," "project," "potential," "seek," "continue," "could," "would," "future" or their negatives[16] - Readers are warned that the occurrence of events described under "Risk Factors" could have an adverse effect on the business, results of operations, and financial condition, and actual results may vary significantly from expectations[16] Risk Factors This section outlines various risks that could cause actual results to differ from expectations, including market interest rate changes, economic conditions, credit quality, regulatory changes, competition, technological changes, and natural disasters - Key risks include actions by the Federal Reserve Board impacting market interest rates, local, state, national, and international economic and market conditions, and conditions in the housing and real estate markets[16] - Other risks involve changes in nonperforming assets and charge-offs, an increase in unemployment levels, impacts related to bank failures and industry volatility, demand for products and services, and potential unexpected adverse outcomes in litigation[16] - Further risks include competition, changes in accounting standards, consumer habits, technological changes, cyber-attacks, natural disasters, pandemics, acts of war or terrorism, and difficulties related to acquisitions or new lines of business[16]