<PAGE>
UNITED STATES
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ___________
Commission file number: 0-3683
TRUSTMARK CORPORATION
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
Mississippi 64-0471500
Trustmark Corporation
248 East Capitol Street
Jackson, MS 39201
(601) 354-5111
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ____
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of July 31, 2000.
Title Outstanding
Common stock, no par value 68,598,293
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Trustmark Corporation and Subsidiaries
Consolidated Balance Sheets
($ in thousands)
<TABLE>
<CAPTION>
(Unaudited)
June 30, December 31,
2000 1999
----------- -----------
Assets
<S> <C> <C>
Cash and due from banks (noninterest-bearing) $ 291,782 $ 279,957
Federal funds sold and securities purchased
under reverse repurchase agreements 60,109 29,599
Trading account securities 648
Securities available for sale (at fair value) 1,092,884 783,220
Securities held to maturity (fair value: $992,124 - 2000;
$1,374,631 - 1999) 1,007,902 1,390,981
Loans 4,046,366 4,014,935
Less allowance for loan losses 65,850 65,850
----------- -----------
Net loans 3,980,516 3,949,085
Premises and equipment 81,116 80,575
Intangible assets 64,841 65,063
Other assets 177,211 164,924
----------- -----------
Total Assets $ 6,757,009 $ 6,743,404
=========== ===========
Liabilities
Deposits:
Noninterest-bearing $ 910,045 $ 860,650
Interest-bearing 3,050,500 3,064,146
----------- -----------
Total deposits 3,960,545 3,924,796
Federal funds purchased 357,018 287,163
Securities sold under repurchase agreements 847,850 1,090,257
Short-term borrowings 878,734 733,024
Other liabilities 58,418 52,408
----------- -----------
Total Liabilities 6,102,565 6,087,648
Commitments and Contingencies
Shareholders' Equity
Common stock, no par value:
Authorized: 250,000,000 shares
Issued and outstanding: 68,803,793 shares - 2000;
70,423,993 shares - 1999 14,334 14,672
Surplus 164,764 193,721
Retained earnings 480,365 444,999
Accumulated other comprehensive (loss) income, net of tax (5,019) 2,364
----------- -----------
Total Shareholders' Equity 654,444 655,756
----------- -----------
Total Liabilities and Shareholders' Equity $ 6,757,009 $ 6,743,404
=========== ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
Trustmark Corporation and Subsidiaries
Consolidated Statements of Income
($ in thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ---------------------
2000 1999 2000 1999
--------- --------- --------- ---------
Interest Income
<S> <C> <C> <C> <C>
Interest and fees on loans $ 85,443 $ 76,764 $ 168,185 $ 152,799
Interest on securities:
Taxable interest income 33,375 29,629 66,480 57,849
Interest income exempt from federal income taxes 1,875 1,614 3,699 3,236
Interest on federal funds sold and securities purchased
under reverse repurchase agreements 550 2,133 925 5,718
--------- --------- --------- ---------
Total Interest Income 121,243 110,140 239,289 219,602
Interest Expense
Interest on deposits 30,256 26,601 58,339 54,243
Interest on federal funds purchased and securities
sold under repurchase agreements 17,435 16,658 36,287 32,642
Other interest expense 13,802 5,729 25,002 10,572
--------- --------- --------- ---------
Total Interest Expense 61,493 48,988 119,628 97,457
--------- --------- --------- ---------
Net Interest Income 59,750 61,152 119,661 122,145
Provision for loan losses 3,198 2,503 5,316 4,469
--------- --------- --------- ---------
Net Interest Income After Provision
for Loan Losses 56,552 58,649 114,345 117,676
Noninterest Income
Service charges on deposit accounts 10,473 9,680 20,355 18,550
Other account charges, fees and commissions 9,174 8,741 18,386 15,168
Mortgage servicing fees 3,664 3,547 7,338 7,047
Trust service income 3,825 3,486 7,293 7,105
Securities gains 3,921 8,562
Other income 2,963 1,106 4,137 2,414
--------- --------- --------- ---------
Total Noninterest Income 34,020 26,560 66,071 50,284
Noninterest expense
Salaries and employee benefits 24,987 25,177 50,433 49,283
Net occupancy - premises 2,578 2,540 5,158 5,009
Equipment expense 3,886 3,664 7,616 6,979
Services and fees 6,594 6,333 13,308 12,735
Amortization of intangible assets 2,247 2,706 4,499 5,250
Other expense 8,650 6,744 15,354 13,217
--------- --------- --------- ---------
Total Noninterest Expense 48,942 47,164 96,368 92,473
--------- --------- --------- ---------
Income Before Income Taxes and Cumulative Effect of a
Change in Accounting Principle 41,630 38,045 84,048 75,487
Income taxes 14,624 13,122 28,902 26,438
--------- --------- --------- ---------
Income Before Cumulative Effect of a Change in Accounting Principle 27,006 24,923 55,146 49,049
Cumulative effect of a change in accounting principle, net of tax (2,464)
--------- --------- --------- ---------
Net Income $ 27,006 $ 24,923 $ 52,682 $ 49,049
========= ========= ========= =========
Earnings Per Share
Basic and diluted earnings per share before cumulative effect
of a change in accounting principle $ 0.39 $ 0.34 $ 0.79 $ 0.68
Cumulative effect of a change in accounting principle, net of tax (0.03)
--------- --------- --------- ---------
Earnings per share - basic and diluted $ 0.39 $ 0.34 $ 0.76 $ 0.68
========= ========= ========= =========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
Trustmark Corporation and Subsidiaries
Consolidated Statements of Changes in Shareholders' Equity
($ in thousands)
(Unaudited)
2000 1999
--------- ---------
Balance, January 1, $ 655,756 $ 651,876
Comprehensive income:
Net income per consolidated statements of income 52,682 49,049
Net change in unrealized losses on
securities available for sale, net of tax (7,383) (10,592)
--------- ---------
Comprehensive income 45,299 38,457
Cash dividends paid (17,316) (15,171)
Common stock issued in business combination 18,919
Common stock issued - long-term incentive plan (161)
Repurchase and retirement of common stock (29,295) (26,700)
--------- ---------
Balance, June 30, $ 654,444 $ 667,220
========= =========
See notes to consolidated financial statements.
<PAGE>
Trustmark Corporation and Subsidiaries
Consolidated Statements of Cash Flows
($ in thousands)
(Unaudited)
<TABLE>
<CAPTION> Six Months Ended June 30,
------------------------
2000 1999
--------- ---------
Operating Activities
<S> <C> <C>
Net income $ 52,682 $ 49,049
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for loan losses 5,316 4,469
Depreciation and amortization 10,720 10,363
Net (accretion) amortization of securities (844) 413
Securities gains (8,562)
Cumulative effect of change in accounting principle 3,820
Net increase in intangible assets (4,295) (7,148)
Net decrease (increase) in deferred income taxes 2,967 (283)
Net increase in other assets (13,435) (6,584)
Net increase in other liabilities 6,010 2,285
Other operating activities, net (1,756) (1,882)
--------- ---------
Net cash provided by operating activities 52,623 50,682
Investing Activities
Proceeds from calls and maturities of securities available for sale 75,157 90,637
Proceeds from calls and maturities of securities held to maturity 103,025 226,876
Proceeds from sales of securities available for sale 15,209
Proceeds from sales of trading securities 130,575 1,047
Purchases of securities available for sale (158,603) (90,484)
Purchases of securities held to maturity (98,974) (391,191)
Net (increase) decrease in federal funds sold and securities
purchased under reverse repurchase agreements (30,510) 87,794
Net increase in loans (34,557) (120,773)
Purchases of premises and equipment (6,321) (11,674)
Proceeds from sales of premises and equipment 11 4
Proceeds from sales of other real estate 1,894 1,118
Cash received in business combination 6,358
--------- ---------
Net cash used by investing activities (3,094) (200,288)
Financing Activities
Net increase (decrease) in deposits 35,749 (101,093)
Net (decrease) increase in federal funds purchased and securities sold
under repurchase agreements (172,552) 78,164
Net increase in short-term borrowings 145,710 209,534
Cash dividends (17,316) (15,171)
Common stock transactions, net (29,295) (26,861)
--------- ---------
Net cash (used) provided by financing activities (37,704) 144,573
--------- ---------
Increase (decrease) in cash and cash equivalents 11,825 (5,033)
Cash and cash equivalents at beginning of period 279,957 312,527
--------- ---------
Cash and cash equivalents at end of period $ 291,782 $ 307,494
========= =========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
TRUSTMARK CORPORATION & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION AND PRINCIPLES OF
CONSOLIDATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in conformity with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of Management, all adjustments (consisting of normal recurring
accruals) considered necessary for the fair presentation of these consolidated
financial statements have been included. The notes included herein should be
read in conjunction with the notes to the consolidated financial statements
included in Trustmark Corporation's (Trustmark) 1999 annual report on Form 10-K.
The consolidated financial statements include the accounts of Trustmark,
its wholly-owned subsidiary, Trustmark National Bank (the Bank) and the Bank's
wholly-owned subsidiaries. All intercompany accounts and transactions have been
eliminated in consolidation. Certain reclassifications have been made to prior
period amounts to conform to the current year presentation.
NOTE 2 - BUSINESS COMBINATIONS
On April 9, 1999, Trustmark completed its acquisition of the Dan
Bottrell Agency, Inc. (Bottrell), an independent insurance agency located in
Jackson, Mississippi, with approximately $9 million in total assets. This
transaction was accounted for as a purchase business combination. The results of
operations, which are not material, have been included in the financial
statements from the merger date.
NOTE 3 - LOANS
The following table summarizes the activity in the allowance for loan
losses for the six month periods ended June 30, ($ in thousands):
2000 1999
-------- --------
Balance at beginning of year $ 65,850 $ 66,150
Provision charged to expense 5,316 4,469
Loans charged off (8,534) (7,516)
Recoveries 3,218 2,747
-------- --------
Balance at end of period $ 65,850 $ 65,850
======== ========
At June 30, 2000 and 1999, the carrying amounts of nonaccrual loans
were $16.2 million and $14.4 million, respectively. Included in these nonaccrual
loans at June 30, 2000 and 1999, are loans that are considered to be impaired
and totaled $11.9 million and $10.6 million, respectively. As a result of direct
write-downs, the specific allowance related to these impaired loans was not
material. The average carrying amounts of impaired loans during the second
quarter of 2000 and 1999 were $12.1 million and $10.9 million, respectively. No
material amounts of interest income were recognized on impaired loans or
nonaccrual loans for the second quarter of 2000 or 1999.
<PAGE>
NOTE 4 - CONTINGENCIES
Trustmark and its subsidiaries are parties to lawsuits and other claims
that arise in the ordinary course of business; some of the lawsuits assert
claims related to the lending, collection, servicing, investment, trust and
other business activities; and some of the lawsuits allege substantial claims
for damages. The cases are being vigorously contested. In the regular course of
business, Management evaluates estimated losses or costs related to litigation,
and provision is made for anticipated losses whenever Management believes that
such losses are probable and can be reasonably estimated. At the present time,
Management believes, based on the advice of legal counsel, that the final
resolution of pending legal proceedings will not have a material impact on
Trustmark's consolidated financial position or results of operations.
NOTE 5 - EARNINGS PER SHARE
Basic earnings per share (EPS) is computed by dividing net income by
the weighted average shares of common stock outstanding. Diluted EPS is computed
by dividing net income by the weighted average shares of common stock
outstanding, adjusted for the effect of stock options outstanding during the
period. The following table reflects weighted average shares used to calculate
Basic and Diluted EPS for the periods presented:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
Weighted Average Shares Outstanding
<S> <C> <C> <C> <C>
Basic 68,946,481 72,523,716 69,351,577 72,335,129
Diluted 68,997,233 72,568,376 69,390,216 72,378,095
</TABLE>
NOTE 6 - STATEMENTS OF CASH FLOWS
Trustmark paid income taxes of $19.3 million and $29.5 million during
the six months ended June 30, 2000 and 1999, respectively. Interest paid on
deposit liabilities and other borrowings totaled $118.3 million in the first six
months of 2000 and $96.4 million in the same period in 1999. For the six months
ended June 30, 2000 and 1999, noncash transfers into foreclosed properties were
$3.3 million and $1.5 million, respectively.
NOTE 7 - RECENT PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This statement provides a
comprehensive and consistent standard for the recognition and measurement of
derivatives and hedging activities. During 1999, the FASB issued SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities-Deferral of the
Effective Date of FASB Statement No. 133-an amendment of FASB Statement No.
133," which concluded that it was appropriate to defer the effective date of
SFAS No. 133 to fiscal years beginning after June 15, 2000.
<PAGE>
Trustmark uses derivatives designated as cash flow hedges to hedge
interest rate exposures by mitigating the interest rate risk of mortgage loans
held for sale and mortgage loans in process. Trustmark regularly enters into
derivative financial instruments in the form of forward contracts, as part of
its normal asset/liability management strategies. Trustmark's obligations under
forward contracts consist of commitments to deliver mortgage loans, originated
and/or purchased, in the secondary market at a future date into mortgage-backed
securities. Realized gains and losses on forward contracts and the sale of
mortgage loans in the secondary market are recorded upon the settlement of the
related forward contract and included in other income. During the first six
months of 2000, no recognized net gains or losses related to cash flow hedges
were deemed to be material.
On January 1, 2000, Trustmark adopted SFAS No. 133. As allowed by SFAS
No. 133, at the date of initial application of this statement, Trustmark
transferred held to maturity securities with an amortized cost of $237.5 million
and a market value of $237.8 million into the available for sale category. In
addition, Trustmark transferred held to maturity securities with an amortized
cost of $135.1 million and a market value of $131.2 million into the trading
category. The effect of adopting SFAS No. 133 is shown as a cumulative effect of
a change in accounting principle and reduced net income by $2.5 million (net of
taxes) during the first quarter of 2000. In order to offset the effect of
adopting SFAS No. 133, Trustmark sold available for sale equity securities which
resulted in realized gains in the first quarter of $4.6 million or an after tax
gain of $2.9 million. These separate transactions allowed Trustmark to
reposition the investment portfolio as well as provide additional liquidity for
investment opportunities in a potentially higher yielding market environment
while having an insignificant impact on consolidated net income for the first
six months of 2000.
NOTE 8 - SEGMENT INFORMATION
Trustmark has three reportable segments: Retail Banking, Commercial
Banking and Financial Services. Retail Banking delivers a full range of
financial products and services to individuals and small businesses through
Trustmark's extensive branch network. Commercial Banking provides various
financial products and services to corporate and middle market clients. Included
among these products and services are specialized services for commercial and
residential real estate development lending, indirect auto financing and other
specialized lending services. Financial Services includes trust and fiduciary
services, discount brokerage services, insurance services, as well as credit
card and mortgage services. Also included in this segment is a selection of
investment management services including Trustmark's proprietary mutual fund
family. Treasury & Other consists of asset/liability management activities that
include the investment portfolio and the related gains (losses) on sales of
securities. Treasury & Other also includes operational unit expenses along with
other related corporate overhead.
The following tables disclose financial information by segment for the
periods ended June 30, 2000 and 1999.
<PAGE>
Trustmark Corporation
Segment Information
(000's in thousands)
<TABLE>
<CAPTION>
Retail Commercial Financial Treasury
Banking Banking Services & Other Total
----------- ----------- ----------- ----------- -----------
For the three months ended June 30, 2000
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net interest income from external customers $ 7,911 $ 31,777 $ 11,620 $ 8,442 $ 59,750
Internal funding 22,979 (22,604) (4,385) 4,010 0
----------- ----------- ----------- ----------- -----------
Net interest income 30,890 9,173 7,235 12,452 59,750
Provision for loan losses 2,369 266 563 0 3,198
----------- ----------- ----------- ----------- -----------
Net interest income after provision for loan losses 28,521 8,907 6,672 12,452 56,552
Noninterest income 12,761 159 15,723 5,377 34,020
Noninterest expense 27,558 3,818 11,937 5,629 48,942
----------- ----------- ----------- ----------- -----------
Income before income taxes 13,724 5,248 10,458 12,200 41,630
Income taxes 4,738 1,813 3,648 4,425 14,624
----------- ----------- ----------- ----------- -----------
Segment net income $ 8,986 $ 3,435 $ 6,810 $ 7,775 $ 27,006
=========== =========== =========== =========== ===========
Selected Financial Information
Average assets $ 2,129,390 $ 1,504,023 $ 870,132 $ 2,241,928 $ 6,745,473
Depreciation and amortization $ 1,058 $ 52 $ 1,423 $ 2,828 $ 5,361
For the three months ended June 30, 1999
--------------------------------------------------
Net interest income from external customers $ 7,807 $ 25,810 $ 4,430 $ 23,105 $ 61,152
Internal funding 23,988 (16,778) 3,482 (10,692) 0
----------- ----------- ----------- ----------- -----------
Net interest income 31,795 9,032 7,912 12,413 61,152
Provision for loan losses 1,248 380 409 466 2,503
----------- ----------- ----------- ----------- -----------
Net interest income after provision for loan losses 30,547 8,652 7,503 11,947 58,649
Noninterest income 11,636 157 13,441 1,326 26,560
Noninterest expense 27,969 3,639 12,014 3,542 47,164
----------- ----------- ----------- ----------- -----------
Income before income taxes 14,214 5,170 8,930 9,731 38,045
Income taxes 4,907 1,784 3,331 3,100 13,122
----------- ----------- ----------- ----------- -----------
Segment net income $ 9,307 $ 3,386 $ 5,599 $ 6,631 $ 24,923
=========== =========== =========== =========== ===========
Selected Financial Information
Average assets $ 2,048,125 $ 1,348,045 $ 815,940 $ 2,329,447 $ 6,541,557
Depreciation and amortization $ 945 $ 60 $ 1,789 $ 2,544 $ 5,338
<PAGE>
Trustmark Corporation
Segment Information
(000's in thousands)
Retail Commercial Financial Treasury
Banking Banking Services & Other Total
----------- ----------- ----------- ----------- -----------
For the six months ended June 30, 2000
--------------------------------------------------
Net interest income from external customers $ 16,432 $ 62,206 $ 23,091 $ 17,932 $ 119,661
Internal funding 45,947 (43,992) (9,246) 7,291 0
----------- ----------- ----------- ----------- -----------
Net interest income 62,379 18,214 13,845 25,223 119,661
Provision for loan losses 3,523 763 1,030 0 5,316
----------- ----------- ----------- ----------- -----------
Net interest income after provision for loan losses 58,856 17,451 12,815 25,223 114,345
Noninterest income 24,482 316 29,670 11,603 66,071
Noninterest expense 56,333 7,645 23,844 8,546 96,368
----------- ----------- ----------- ----------- -----------
Income before income taxes and cumulative
effect of a change in accounting principle 27,005 10,122 18,641 28,280 84,048
Income taxes 9,323 3,495 6,527 9,557 28,902
----------- ----------- ----------- ----------- -----------
Income before cumulative effect
of a change in accounting principle 17,682 6,627 12,114 18,723 55,146
Cumulative effect of a change
in accounting principle 0 0 0 (2,464) (2,464)
----------- ----------- ----------- ----------- -----------
Segment net income $ 17,682 $ 6,627 $ 12,114 $ 16,259 $ 52,682
=========== =========== =========== =========== ===========
Selected Financial Information
Average assets $ 2,144,688 $ 1,486,673 $ 864,574 $ 2,264,341 $ 6,760,276
Depreciation and amortization $ 2,100 $ 106 $ 2,804 $ 5,710 $ 10,720
For the six months ended June 30, 1999
--------------------------------------------------
Net interest income from external customers $ 14,591 $ 51,245 $ 8,119 $ 48,190 $ 122,145
Internal funding 49,156 (33,164) 7,523 (23,515) 0
----------- ----------- ----------- ----------- -----------
Net interest income 63,747 18,081 15,642 24,675 122,145
Provision for loan losses 2,461 692 850 466 4,469
----------- ----------- ----------- ----------- -----------
Net interest income after provision for loan losses 61,286 17,389 14,792 24,209 117,676
Noninterest income 22,383 307 25,468 2,126 50,284
Noninterest expense 55,958 7,152 22,726 6,637 92,473
----------- ----------- ----------- ----------- -----------
Income before income taxes 27,711 10,544 17,534 19,698 75,487
Income taxes 9,567 3,638 6,328 6,905 26,438
----------- ----------- ----------- ----------- -----------
Segment net income $ 18,144 $ 6,906 $ 11,206 $ 12,793 $ 49,049
=========== =========== =========== =========== ===========
Selected Financial Information
Average assets $ 2,036,363 $ 1,329,394 $ 804,888 $ 2,339,467 $ 6,510,112
Depreciation and amortization $ 1,878 $ 119 $ 3,493 $ 4,873 $ 10,363
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following provides a narrative discussion and analysis of
significant changes in Trustmark Corporation's (Trustmark) results of operations
and financial condition. This discussion should be read in conjunction with the
consolidated financial statements and the supplemental financial data included
elsewhere in this report.
The Private Securities Litigation Reform Act evidences Congress'
determination that the disclosure of forward-looking information is desirable
for investors and encourages such disclosure by providing a safe harbor for
forward-looking statements by Management. Specifically, Management's Discussion
and Analysis of Financial Condition and Results of Operations contains
forward-looking statements with respect to the adequacy of the allowance for
loan losses; the effect of legal proceedings on Trustmark's financial condition,
results of operations and liquidity; and market risk disclosures. Although
Management of Trustmark believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such
expectations will prove to be correct. Such forward-looking statements are
subject to certain risks, uncertainties and assumptions. 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.
FINANCIAL SUMMARY
For the second quarter of 2000, Trustmark's net income totaled $27.0
million, compared with $24.9 million for the second quarter of 1999. Basic and
diluted earnings per share were $0.39 for the second quarter of 2000, compared
with $0.34 for the second quarter of 1999, an increase of 14.7%. For the three
months ended June 30, 2000, Trustmark recorded a return on average assets of
1.61%, a return on average equity of 16.37% and a core efficiency ratio of
52.97%. For the second quarter of 1999, Trustmark recorded a return on average
assets of 1.53%, a return on average equity of 15.08% and a core efficiency
ratio of 52.67%
For the six months ended June 30, 2000, Trustmark's net income totaled
$52.7 million compared with $49.0 million for the comparable period in 1999.
Basic and diluted earnings per share were $0.76 for the first six months of
2000, compared to $0.68 for the first six months of 1999, an increase of 11.8%.
Trustmark's performance for the six months ended June 30, 2000, resulted in a
return on average assets of 1.57%, a return on average equity of 16.10% and a
core efficiency ratio of 52.28%. For the six months ended June 30, 1999,
Trustmark recorded a return on average assets of 1.52%, a return on average
equity of 15.22% and a core efficiency ratio of 52.50%.
At June 30, 2000, Trustmark reported total loans of $4.046 billion,
total assets of $6.757 billion, total deposits of $3.961 billion and
shareholders' equity of $654.4 million.
BUSINESS COMBINATIONS
Trustmark seeks to increase shareholder value and diversify products
and services through selective acquisitions of other financial services
companies, including banks, insurance agencies and asset management companies.
<PAGE>
On April 9, 1999, Trustmark completed its acquisition of the Dan
Bottrell Agency, Inc. (Bottrell), an independent insurance agency located in
Jackson, Mississippi, with approximately $9 million in total assets. This
transaction was accounted for as a purchase business combination. The results of
operations, which are not material, have been included in the financial
statements from the merger date.
ASSET/LIABILITY MANAGEMENT
Overview
Market risk is the risk of loss arising from adverse changes in market
prices and rates. Trustmark has risk management policies to monitor and limit
exposure to market risk. Trustmark's market risk is comprised primarily of
interest rate risk created by core banking activities. Management continually
develops and applies cost-effective strategies to manage these risks. The
Asset/Liability Committee sets the day-to-day operating guidelines, approves
strategies affecting net interest income and coordinates activities within
policy limits established by the Board of Directors. A key objective of the
asset/liability management program is to quantify, monitor and manage interest
rate risk and to assist Management in maintaining stability in the net interest
margin under varying interest rate environments.
Market/Interest Rate Risk Management
The primary purpose in managing interest rate risk is to effectively
invest capital and preserve the value created by the core business units.
Trustmark utilizes an investment portfolio as well as off-balance sheet
instruments to manage the interest rate risk naturally created through its
business activities. The primary tool utilized by the Asset/Liability Committee
is a modeling system that provides information used to evaluate exposure to
interest rate risk, project earnings and manage balance sheet growth. This
modeling system utilizes the following scenarios in order to give Management a
method of evaluating Trustmark's interest rate, basis and prepayment risk under
different conditions:
o Rate shocked scenarios of up-and-down 100, 200 and 300 basis points.
o Yield curve twist of +/- 2 standard deviations of the change in spread of the
three-month treasury bill and the 10-year treasury note yields.
o Basis risk scenarios where federal funds/prime spread widens and tightens 50
and 100 basis points.
o Prepayment risk scenarios where projected prepayment speeds in up-and-down
200 basis point rate scenarios are compared to current projected prepayment
speeds.
Static gap analysis is a relatively straightforward tool for interest
rate risk measurement used mainly in highlighting significant short-term
repricing volume mismatches. Utilized in the table below are Management's
assumptions relating to prepayments of certain loans and securities as well as
the maturity for rate sensitive assets and liabilities. The following table
presents Trustmark's rate sensitivity static gap analysis at June 30, 2000 ($ in
thousands):
Interest Sensitive Within
--------------------------
90 days One Year
----------- -----------
Total rate sensitive assets $ 1,668,170 $ 2,664,086
Total rate sensitive liabilities 2,678,870 3,906,174
----------- -----------
Net gap ($1,010,700) ($1,242,088)
=========== ===========
<PAGE>
The analysis indicates a negative gap position over the next three and
twelve-month periods which indicates that Trustmark would benefit somewhat from
a decrease in market interest rates. Although rates have increased, Management
believes there is adequate flexibility to alter the overall rate sensitivity
structure as necessary to minimize exposure to these changes.
Liquidity
Trustmark's goal is to maintain an adequate liquidity position to
compensate for balance sheet fluctuations and to provide funds for growth. The
Asset/Liability Committee establishes guidelines by which the current liquidity
position is monitored to ensure adequate funding capacity. This is accomplished
through the active management of both the asset and liability sides of the
balance sheet and by maintaining accessibility to local, regional and national
funding sources. The ability to maintain consistent earnings and adequate
capital also enhances Trustmark's liquidity.
EARNING ASSETS
Earning assets are composed of loans, securities, federal funds sold,
securities purchased under resale agreements and trading account assets, which
are the primary revenue streams for Trustmark. At June 30, 2000, earning assets
were $6.208 billion, or 91.87% of total assets, compared with $6.219 billion, or
92.22% of total assets at December 31, 1999.
Loans
Loans are Trustmark's largest group of earning assets and represented
65.2% of earning assets at June 30, 2000, compared with 64.6% at December 31,
1999. At June 30, 2000, loans totaled $4.046 billion compared to $4.015 billion
at year-end 1999, an increase of $31.4 million, or 1.0%. During the second
quarter of 2000, Trustmark sold $77 million in student loans. This sale was
undertaken in order to take advantage of favorable market conditions for the
sale of loans with below market interest rates and to provide liquidity to
reposition the portfolio in a higher interest rate environment. Excluding the
sale of student loans, loan growth would be $108.5 million, or 2.7%, when
comparing June 30, 2000 with year-end 1999. Additional growth during the first
two quarters was due to the introduction of Trustmark's Business Advantage, a
tailored package of financial and discounted business services, with a target
market of firms with annual sales up to $3 million. Other loan growth continues
to be well diversified.
Trustmark's lending policies have consistently produced strong quality
assets. One measure of asset quality in the financial services industry is the
level of nonperforming assets. Trustmark's nonperforming assets at June 30, 2000
and December 31, 1999 are shown in the following table ($ in thousands):
June 30, Dec. 31,
2000 1999
------- -------
Nonaccrual and restructured loans $16,180 $16,671
Other real estate (ORE) 3,559 1,987
------- -------
Total nonperforming assets $19,739 $18,658
======= =======
Accruing loans past due 90 days or more $ 2,610 $ 2,043
======= =======
Nonperforming assets/total loans and ORE 0.49% 0.46%
======= =======
<PAGE>
While the volume of nonperforming assets at June 30, 2000, reflects a
slight increase from December 31, 1999, as indicated in the preceding table, it
remains at a manageable level and continues to compare favorably to those of
peer banks. During the second quarter of 2000, other real estate increased
primarily from the addition of closed bank premises that resulted from branch
configuration analysis. Management is not aware of any additional credits, other
than those identified above, where serious doubts as to the repayment of
principal and interest exist.
The allowance for loan losses is maintained at a level that Management
and the Board of Directors believe is adequate to absorb probable losses within
the loan portfolio, plus losses associated with off-balance sheet credit
instruments such as letters of credit and unfunded lines of credit. A formal
analysis is prepared quarterly to assess the risk in the loan portfolio and to
determine the adequacy of the allowance for loan losses. Specifically, the
analysis is based on factors such as historical loss experience in relation to
volume and types of loans, volume and trends in delinquencies and nonaccruals,
national and local economic conditions and other pertinent information. This
analysis is presented to the Credit Policy Committee with subsequent review and
approval by the Board of Directors. The allowance for loan losses was $65.9
million at June 30, 2000 and December 31, 1999, representing 1.63% and 1.64%,
respectively, of total loans outstanding.
Net charge-offs were $5.3 million, or 0.26% of average loans, for the
six months ended June 30, 2000, compared with $4.8 million, or 0.26% of average
loans, for the same period in 1999. Trustmark's level of net charge-offs to
average loans continues to compare favorably to those of peer banks.
Securities
The securities portfolio is utilized to provide a quality investment
alternative for available funds, a stable source of interest income and
collateral on pledges for public deposits and securities sold under agreements
to repurchase. At June 30, 2000, Trustmark's securities portfolio totaled $2.101
billion, a decrease of $73.4 million or 3.4% from December 31, 1999. This
decrease can be directly attributed to the adoption of SFAS No. 133 and
subsequent transfer of $135 million in held to maturity securities to the
trading account. As a percentage of earning assets, the decrease in the
securities portfolio from 35.0% at December 31, 1999 to 33.8% at June 30, 2000,
also reflects this transfer.
As seen in Note 7 of Notes to Consolidated Financial Statements, on
January 1, 2000, Trustmark adopted SFAS No. 133. As allowed by SFAS No. 133, at
the date of initial application of this statement, Trustmark transferred held to
maturity securities with an amortized cost of $237.5 million and a market value
of $237.8 million into the available for sale category. In addition, Trustmark
transferred held to maturity securities with an amortized cost of $135.1 million
and a market value of $131.2 million into the trading category. The effect of
adopting SFAS No. 133 is shown as a cumulative effect of a change in accounting
principle and reduced net income by $2.5 million (net of taxes) during the first
quarter of 2000. In order to offset the effect of adopting SFAS No. 133,
Trustmark sold available for sale equity securities which resulted in realized
gains in the first quarter of $4.6 million or an after tax gain of $2.9 million.
These separate transactions allowed Trustmark to reposition the investment
portfolio as well as provide additional liquidity for investment opportunities
in a potentially higher yielding market environment while having an
insignificant impact on consolidated net income for the first six months of
2000.
<PAGE>
Management continues to stress asset quality as one of the strategic
goals of the securities portfolio, which is evidenced by the investment of over
84% of the portfolio in U. S. Treasury and U. S. Government agency obligations.
The REMIC and CMO issues held in the securities portfolio are entirely U. S.
Government agency issues. In order to avoid excessive yield volatility from
unexpected prepayments, Trustmark's normal practice is to purchase investment
securities at or near par value to reduce the risk of premium write-offs.
Held to maturity (HTM) securities are carried at amortized cost and
represent those securities that Trustmark both positively intends and has the
ability to hold to maturity. At June 30, 2000, HTM securities totaled $1.008
billion and represented 48.0% of the total portfolio, compared to a total of
$1.391 billion representing 64.0% of the total portfolio at the end of 1999.
Available for sale (AFS) securities are reported at their estimated fair
value with unrealized gains or losses recognized, net of tax, in accumulated
other comprehensive income, a separate component of shareholders' equity. At
June 30, 2000, securities available for sale totaled $1.093 billion, which
represented 52.0% of the securities portfolio, an increase from 36.0% at
year-end 1999. The valuation adjustment to decrease fair value at June 30, 2000
was $8.1 million, compared to a valuation adjustment to increase fair value at
December 31, 1999 of $3.8 million. During the second quarter of 2000, Trustmark
took advantage of favorable market conditions in order to continue the sale of
AFS equity securities. This strategy allowed Trustmark to improve profitability
as well as provide liquidity as needed.
Other Earning Assets
Federal funds sold and securities purchased under reverse repurchase
agreements were $60.1 million at June 30, 2000, an increase of $30.5 million
when compared with year-end 1999. Trustmark utilizes these products as a
short-term investment alternative whenever it has excess liquidity.
DEPOSITS AND OTHER INTEREST-BEARING LIABILITIES
Trustmark's deposit base is its primary source of funding and consists
of core deposits from the communities it serves. Total deposits were $3.961
billion at June 30, 2000, compared to $3.925 billion at December 31, 1999. Time
deposits at December 31, 1999 contained a $100 million public CD that matured in
January 2000. By excluding this time deposit from the year-end balance, growth
in deposits would be approximately $136 million for the first six months of
2000. As a component of total deposits, noninterest-bearing deposits increased
to 23.0% at June 30, 2000, compared with 21.9% at year-end 1999. For the same
time period, interest-bearing demand deposits decreased slightly to 17.6% from
17.7% of total deposits, savings deposits decreased to 15.6% from 16.2% and time
deposits decreased slightly to 43.8% at June 30, 2000, from 44.2% at year-end
1999.
The growth in the deposit portfolio has allowed Trustmark to reduce its
reliance on short-term borrowings when compared to the end of 1999. Short-term
borrowings consist of federal funds purchased, securities sold under repurchase
agreements, Federal Home Loan Bank (FHLB) borrowings and the treasury tax and
loan note option account. Short-term borrowings totaled $2.084 billion at June
30, 2000, a decrease of $26 million compared to $2.110 billion at December 31,
1999. Trustmark continues to search for reasonably priced funding alternatives
by evaluating new deposit products and an additional brokered CD program.
Significant funding remains available through FHLB borrowings.
<PAGE>
CONTINGENCIES
Trustmark and its subsidiaries are parties to lawsuits and other claims
that arise in the ordinary course of business; some of the lawsuits assert
claims related to the lending, collection, servicing, investment, trust and
other business activities; and some of the lawsuits allege substantial claims
for damages. The cases are being vigorously contested. In the regular course of
business, Management evaluates estimated losses or costs related to litigation,
and provision is made for anticipated losses whenever Management believes that
such losses are probable and can be reasonably estimated. At the present time,
Management believes, based on the advice of legal counsel, that the final
resolution of pending legal proceedings will not have a material impact on
Trustmark's consolidated financial position or results of operations.
SHAREHOLDERS' EQUITY
At June 30, 2000, Trustmark had shareholders' equity of $654.4 million,
compared with $655.8 million at year-end 1999, a decrease of $1.3 million. The
decline is directly related to the common stock repurchase program, which is
described below. The shareholders' equity to assets ratio was 9.69% at June 30,
2000, compared with 9.72% at December 31, 1999. Trustmark's book value was $9.51
at June 30, 2000, compared to $9.31 at December 31, 1999.
Regulatory Capital
Trustmark and Trustmark National Bank (the Bank) are subject to minimum
capital requirements, which are administered by various Federal regulatory
agencies. These capital requirements, as defined by Federal guidelines, involve
quantitative and qualitative measures of assets, liabilities and certain
off-balance sheet instruments. Failure to meet minimum capital requirements can
initiate certain mandatory and possibly additional discretionary actions by
regulators that, if undertaken, could have a direct material effect on the
financial statements of both Trustmark and the Bank.
Management believes, as of June 30, 2000, that Trustmark and the Bank
meet all capital adequacy requirements to which they are subject. At June 30,
2000, the most recent notification from the Office of the Comptroller of the
Currency (OCC) categorized the Bank as well-capitalized. To be categorized in
this manner, the Bank must maintain minimum total risk-based, Tier 1 risk-based
and Tier 1 leverage ratios (defined in the applicable regulations) as set forth
in the table below. There are no significant conditions or events that have
occurred since the OCC's notification that Management believes have affected the
Bank's present classification.
Actual and minimum regulatory capital amounts and ratios at June 30,
2000, for Trustmark and the Bank are as follows ($ in thousands):
<TABLE>
<CAPTION>
Actual Minimum Regulatory
Regulatory Capital Capital Required
------------------ ------------------
Amount Ratio Amount Ratio
-------- ------ -------- ------
Total Capital (to Risk Weighted Assets)
<S> <C> <C> <C> <C>
Trustmark Corporation $687,043 16.61% $330,975 8.00%
Trustmark National Bank $680,587 16.46% $330,847 8.00%
Tier 1 Capital (to Risk Weighted Assets)
Trustmark Corporation $634,797 15.34% $165,488 4.00%
Trustmark National Bank $628,717 15.20% $165,424 4.00%
Tier 1 Capital (to Average Assets)
Trustmark Corporation $634,797 9.45% $201.624 3.00%
Trustmark National Bank $628,717 9.36% $201,538 3.00%
</TABLE>
<PAGE>
Common Stock Repurchase Program
In November 1998, Trustmark implemented a capital management plan, which
authorized the repurchase of up to 7.5%, or 5.46 million shares of common stock.
Since implementation of the plan, Trustmark has purchased approximately 4.84
million shares of common stock in the open market, including 360 thousand in the
second quarter of 2000. This program has allowed Trustmark to increase the
return on equity to shareholders, while maintaining sufficient capital levels
and related ratios to satisfy regulatory requirements.
On July 11, 2000, Trustmark's Board of Directors authorized the
repurchase of up to an additional 5.0%, or approximately 3.4 million shares, of
common stock, with implementation to begin upon the conclusion of the original
program. The new program, which continues to be subject to market conditions and
management discretion, will be implemented through open market purchases or
privately negotiated transactions.
Dividends
Cash dividends paid during the first six months of 2000 totaled $17.3
million, an increase of $2.1 million or 14.1%, from $15.2 million paid during
the same period in 1999. The payout ratio of cash dividends paid to net income
was 32.89% in the first half of 2000 and 30.88% for the same period in 1999.
Dividends per share were $0.25 per share for the first six months of 2000, 19.0%
higher than the $0.21 per share paid in the same period of 1999.
RESULTS OF OPERATIONS
Net Interest Income
Net interest income (NII) is interest income generated by
interest-earning assets reduced by the interest expense of funding those assets
and is Trustmark's principal source of income. Consequently, changes in the mix
and volume of interest-earning assets and interest-bearing liabilities, and
their related yields and interest rates, can impact earnings. The net interest
margin (NIM) is computed by dividing fully taxable equivalent NII by average
interest-earning assets and measures how effectively Trustmark utilizes its
interest-earning assets in relationship to the interest cost of funding them.
The fully taxable equivalent (FTE) yield on tax-exempt income has been computed
based on a 35% federal marginal tax rate for the periods shown.
The following table illustrates the net interest margin as a percentage
of average interest-earning assets for the periods shown:
Six Months
Ended June 30,
-------------
2000 1999
----- -----
Yield on interest-earning assets-FTE 7.85% 7.54%
Rate on interest-bearing liabilities 3.86% 3.29%
----- -----
Net interest margin-FTE 3.99% 4.25%
===== =====
<PAGE>
For the six months ended June 30, 2000, NII decreased $2.5 million, or
2.0%, when compared with the same period in 1999. Average interest-earning
assets for the first six months of 2000 were $6.234 billion, compared to $5.973
billion for the first six months of 1999, an increase of $261 million or 4.4%.
The average interest-earning asset growth is attributable to an 8.2% increase in
average loans and a 7.5% increase in average securities, when comparing the
first half of 2000 to the same period in 1999. This combination resulted in
growth in interest income of $19.7 million, or 9.0%, when comparing the first
half of 2000 to the same period in 1999. The growth in interest income was
offset by an increase in funding costs that resulted from a change in the mix of
interest-bearing liabilities. While average interest-bearing deposits decreased
slightly when comparing the first six months of 2000 with the same period in
1999, average short-term borrowings increased 14.6%. This growth, combined with
a rising interest rate environment, resulted in an increase in interest expense
for the first six months of 2000 of $22.2 million, or 22.7%, when compared to
the same time period in 1999.
Provision for Loan Losses
The provision for loan losses reflects Management's assessment of the
adequacy of the allowance for loan losses to absorb inherent write-offs in the
loan portfolio. Factors considered in the assessment include growth and
composition of the loan portfolio, historical credit loss experience, current
and anticipated economic conditions and changes in borrowers' financial
positions. During the first six months of 2000, Trustmark's provision totaled
$5.3 million, compared to $4.5 million for the same period in 1999. This
increase is the result of an $800 thousand direct charge-off related to a
specific credit, which occurred during the second quarter of 2000. The provision
to average loans was 0.26% for the first six months of 2000, compared to 0.24%
for the same period in 1999. Trustmark's ratio of the provision for loan losses
to average loans continues to compare favorably with those of peer banks.
Noninterest Income
Trustmark stresses the importance of growth in noninterest income as
one of its key long-term strategies. This was accomplished during the first six
months of 2000, as noninterest income, excluding securities gains/losses,
increased $7.2 million, or 14.4%, when compared with the first six months of
1999. The Bottrell business combination completed during 1999 contributed $2.3
million to the increase in noninterest income for 2000. Excluding the Bottrell
business combination, noninterest income growth would be 9.8% for the six months
ended June 30, 2000. Other growth in noninterest income can be attributed to
fees earned from deposit products and services.
Service charges for deposit products and services has been the single
largest component of noninterest income and totaled $20.4 million in the first
six months of 2000, compared to $18.6 million for the same period in 1999. This
9.7% increase in service charges has been the result of Trustmark's expansion of
customer relationships, combined with new product offerings.
The second largest component of noninterest income has been other
account charges, fees and commissions, totaling $18.4 million in the first six
months of 2000, compared to $15.2 million during the same period in 1999. This
21.2% increase is due to Trustmark's expansion of its insurance line of business
by acquiring Bottrell in 1999 and expanding the sales of annuity products. This
combination of new products and services contributed $2.5 million to the growth
of other account charges, fees and commissions during the first six months of
2000.
<PAGE>
Other income totaled $4.1 million for the first six months of 2000,
compared to $2.4 million for the same period in 1999. Contributing to the change
in other income was $1.3 million in nontaxable benefits received on a key man
life insurance policy and $2.1 million gain from the sale of student loans which
offset a market write-down of $669 thousand on trading account securities and a
reduction in gain on sale of mortgage loans of $1.6 million. The decrease in
gain on sale of loans can be attributed to a higher interest rate environment,
which impaired the sale of mortgage loans.
Both mortgage servicing fees and trust service income showed modest
increases during the first six months of 2000.
Securities gains totaled $8.5 million for the first six months of
2000. During the first quarter of 2000, securities gains of $4.6 million, which
were realized from sales of AFS equity securities, were used to offset the
effect of adopting SFAS No. 133. During the second quarter of 2000, securities
gains totaled $3.9 million as Trustmark continued the sale of AFS equity
securities in order to provide additional revenues as well as liquidity where
needed. During the first six months of 2000, there were no sales of securities
held to maturity.
Noninterest Expense
Total noninterest expense increased $3.9 million, or 4.2%, in the first
six months of 2000, when compared to the same period in 1999. Total noninterest
expense were $96.4 million in the first six months of 2000, compared with $92.5
million during the same period in 1999. The Bottrell business combination
completed during 1999 contributed $1.7 million to this increase in noninterest
expense for the first six months of 2000.
The efficiency ratio, which is total noninterest expense as a percentage
of tax equivalent net interest income plus noninterest income, is a primary
measure of the effectiveness of noninterest expense control. During 2000,
Trustmark continues to exceed its corporate goal of an efficiency ratio of 55%
or less with an efficiency ratio of 52.28%. This compared with an efficiency
ratio of 52.50% for the first six months of 1999.
Salaries and employee benefits, which represent the largest category of
noninterest expense, were $50.4 million in the first six months of 2000, an
increase of $1.2 million, or 2.3%, when compared to the first six months of
1999. The Bottrell acquisition contributed $1.1 million to this increase in
salaries and employee benefits during 2000. At June 30, 2000, Trustmark had
2,258 full-time equivalent employees, compared to 2,302 at June 30, 1999.
Other expenses were $15.4 million in the first six months of 2000, an
increase of $2.1 million, or 16.2%, when compared to the first six months of
1999. Litigation settlements of $1.6 million, which were completed during the
second quarter of 2000, were a primary portion of the increase in other expenses
during 2000. These claims have reached final resolution and pose no future
threat to results of operations. Also contributing to the increase in other
expenses was a charge of $461 thousand related to reengineering costs associated
with the new Strategic Sourcing initiative. This initiative, which Trustmark
began during the second quarter of 2000, will reduce supply costs and improve
efficiency.
All other expense categories remained well controlled for the first six
months of 2000, as evidenced by an increase of $608 thousand, or 2.0%, when
compared to the same time period in 1999. Management will continue to closely
monitor the level of noninterest expense as part of its strategic plan to
improve the profitability of Trustmark.
<PAGE>
Income Taxes
For the six months ended June 30, 2000, Trustmark's combined effective
tax rate was 34.4%, compared with 35.0% for the first six months of 1999. The
reduction in Trustmark's effective tax rate is due primarily to the receipt of
nontaxable benefits received on a key man life insurance policy in the first
quarter of 2000.
RECENT PRONOUNCEMENTS - DERIVATIVES
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement provides a comprehensive and
consistent standard for the recognition and measurement of derivatives and
hedging activities. During 1999, the FASB issued SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities-Deferral of the Effective Date of
FASB Statement No. 133-an amendment of FASB Statement No. 133," which deferred
the effective date of SFAS No. 133 to fiscal years beginning after June 15,
2000. Because Trustmark adopted SFAS No. 133 on January 1, 2000, the deferral of
the effective date had no effect on the Corporation.
<PAGE>
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
There were no material developments for the quarter ended June 30, 2000,
other than those disclosed in the Notes to Consolidated Financial Statements and
Management's Discussion and Analysis of this Form 10-Q.
Item 6. Exhibits and Reports on Form 8-K
1. The following exhibits are included herein:
(27) Financial Data Schedule
2. There were no reports on Form 8-K filed during the second quarter of
2000.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
TRUSTMARK CORPORATION
BY: /s/ Richard G. Hickson BY: /s/ Gerard R. Host
---------------------- ------------------
Richard G. Hickson Gerard R. Host
President & Chief Treasurer (Principal
Executive Officer Financial Officer)
DATE: August 11, 2000 DATE: August 11, 2000
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------------------
27 Financial Data Schedule
