TRUSTMARK CORP

Previous wording

Trustmark, a Mississippi business corporation incorporated in 1968, is a bank holding company headquartered in Jackson, Mississippi. Trustmark’s principal subsidiary is Trustmark National Bank (TNB), initially chartered by the State of Mississippi in 1889. At March 31, 2024, TNB had total assets of $18.374 billion, which represented approximately 99.99% of the consolidated assets of Trustmark.

Current wording

Trustmark, a Mississippi business corporation incorporated in 1968, is a bank holding company headquartered in Jackson, Mississippi. Trustmark’s principal subsidiary is Trustmark National Bank (TNB), initially chartered by the State of Mississippi in 1889. At June 30, 2024, TNB had total assets of $18.450 billion, which represented approximately 99.99% of the consolidated assets of Trustmark.

Previous wording

Through TNB and its other subsidiaries, Trustmark operates as a financial services organization providing banking and other financial solutions through offices and 2,712 full-time equivalent associates (measured at March 31, 2024) located in the states of Alabama (including the Georgia Loan Production Office (LPO), which are collectively referred to herein as Trustmark's Alabama market region), Florida (primarily in the northwest or “Panhandle” region of that state, which is referred to herein as Trustmark’s Florida market), Mississippi, Tennessee (in the Memphis and Northern Mississippi regions, which are collectively referred to herein as Trustmark’s Tennessee market), and Texas (primarily in Houston, which is referred to herein as Trustmark’s Texas market). Trustmark’s operations are managed along three operating segments: General Banking Segment, Wealth Management Segment and Insurance Segment. See “Executive Overview” below for a description of TNB’s plans to sell its wholly owned subsidiary Fisher Brown Bottrell Insurance, Inc., which comprises the entirety of Trustmark’s Insurance Segment. For a complete overview of Trustmark’s business, see the section captioned “The Corporation” included in Part I. Item 1. – Business of Trustmark’s Annual Report on Form 10-K for its fiscal year ended December 31, 2023 (2023 Annual Report).

Current wording

Through TNB and its other subsidiaries, Trustmark operates as a financial services organization providing banking and other financial solutions through offices and 2,515 full-time equivalent associates (measured at June 30, 2024) located in the states of Alabama (including the Georgia Loan Production Office (LPO), which are collectively referred to herein as Trustmark's Alabama market region), Florida (primarily in the northwest or “Panhandle” region of that state, which is referred to herein as Trustmark’s Florida market), Mississippi, Tennessee (in the Memphis and Northern Mississippi regions, which are collectively referred to herein as Trustmark’s Tennessee market), and Texas (primarily in Houston, which is referred to herein as Trustmark’s Texas market). Trustmark’s operations are managed along two operating segments: General Banking Segment and Wealth Management Segment. For a complete overview of Trustmark’s business, see the section captioned “The Corporation” included in Part I. Item 1. – Business of Trustmark’s Annual Report on Form 10-K for its fiscal year ended December 31, 2023 (2023 Annual Report).

Previous wording

On April 8, 2024, Visa commenced an initial exchange offer expiring on May 3, 2024, for any and all outstanding shares of Visa Class B-1 common stock (Visa B-1 shares). Holders participating in the exchange offer would receive a combination of Visa Class B-2 common stock (Visa B-2 shares) and Visa Class C common stock (Visa C shares) in exchange for Visa B-1 shares that are validly tendered and accepted for exchange by Visa. TNB has tendered its 38.7 thousand Visa B-1 shares, and that tender is pending Visa’s acceptance. In exchange for each Visa B-1 share that is validly tendered and accepted for exchange by Visa, TNB would receive 50.0% of a newly issued Visa B-2 share and newly issued Visa C shares equivalent in value to 50.0% of a Visa B-1 share. Upon acceptance by Visa of TNB’s tender, the Visa C shares received by TNB would be recognized at fair value, which is expected to result in a realized gain that may be recorded during the second quarter of 2024. The Visa B-2 shares would continue to be held at their nominal carrying value.

Current wording

On April 8, 2024, Visa commenced an initial exchange offer expiring on May 3, 2024, for any and all outstanding shares of Visa Class B-1 common stock (Visa B-1 shares). Holders participating in the exchange offer would receive a combination of Visa Class B-2 common stock (Visa B-2 shares) and Visa Class C common stock (Visa C shares) in exchange for Visa B-1 shares that were validly tendered and accepted for exchange by Visa. TNB tendered its 38.7 thousand Visa B-1 shares, which were accepted by Visa. In exchange for each Visa B-1 share that was validly tendered and accepted for exchange by Visa, TNB received 50.0% of a newly issued Visa B-2 share and newly issued Visa C shares equivalent in value to 50.0% of a Visa B-1 share. The Visa C shares that were received by TNB were recognized at fair value, which resulted in a gain of $8.1 million ($6.0 million, net of taxes) and was recorded to noninterest income (loss) in other, net during the second quarter of 2024. The Visa B-2 shares were recorded at their nominal carrying value.

Previous wording

Trustmark's financial results for the three months ended March 31, 2024 reflected continued growth in loans held for investment (LHFI), solid credit quality and an increase in noninterest income. Trustmark's capital position remained solid, reflecting the consistent profitability of its diversified financial services businesses. Trustmark remains well-positioned and committed to meeting the banking and financial needs of its customers and the communities it serves, and remains focused on providing support, advice and solutions to meet its customers’ unique needs. Trustmark is committed to managing the franchise for the long term, supporting investments to promote profitable revenue growth, realigning delivery channels to support changing customer preferences as well as reengineering and efficiency opportunities to enhance long-term shareholder value. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share. The dividend is payable June 15, 2024, to shareholders of record on June 1, 2024.

Current wording

In addition to these significant non-routine transactions, Trustmark's financial results for the three and six months ended June 30, 2024 reflected continued growth in loans held for investment (LHFI), an increase in noninterest income and disciplined expense management. Trustmark's capital position remained solid, reflecting the consistent profitability of its diversified financial services businesses. Trustmark remains well-positioned and committed to meeting the banking and financial needs of its customers and the communities it serves, and remains focused on providing support, advice and solutions to meet its customers’ unique needs. Trustmark is committed to managing the franchise for the long term, supporting investments to promote profitable revenue growth, realigning delivery channels to support changing customer preferences as well as reengineering and efficiency opportunities to enhance long-term shareholder value. Trustmark’s Board of Directors declared a quarterly cash dividend of $0.23 per share. The dividend is payable September 15, 2024, to shareholders of record on September 1, 2024.

Previous wording

Economic activity improved slightly during the first quarter of 2024; however, economic concerns remain as a result of the cumulative weight of uncertainty regarding the potential economic impact of geopolitical developments, such as the conflicts in Ukraine and the Middle East, inflation, other economic and industry volatility, the 2024 election cycle in the United States, higher energy prices and broader price pressures. Doubts surrounding the near-term direction of global markets and the potential impact on the United States economy are expected to persist for the near term. While Trustmark's customer base is wholly domestic, international economic conditions affect domestic economic conditions, and thus may have an impact upon Trustmark's financial condition or results of operations.

Current wording

Economic activity improved slightly during the first six months of 2024; however, economic concerns remain as a result of the cumulative weight of uncertainty regarding the potential economic impact of geopolitical developments, such as the conflicts in Ukraine and the Middle East, inflation, other economic and industry volatility, the 2024 election cycle in the United States, higher energy prices and broader price pressures. Doubts surrounding the near-term direction of global markets and the potential impact on the United States economy are expected to persist for the near term. While Trustmark's customer base is wholly domestic, international economic conditions affect domestic economic conditions, and thus may have an impact upon Trustmark's financial condition or results of operations.

Previous wording

Market interest rates began to rise during 2022 after an extended period at historical lows. Starting in March 2022, the FRB began raising the target federal funds rate for the first time in three years and continued with multiple increases throughout 2022 and the first half of 2023. The FRB has maintained the target federal funds rate at a range of 5.25% to 5.50% since July 2023. In addition, the FRB increased the interest that it pays on reserves multiple times during 2022 and first half of 2023 from 0.10% to 5.40% as of July 2023. The FRB has maintained the rate it pays on reserves at 5.40% since July 2023. As interest rates have increased, so have competitive pressures on the deposit cost of funds. It is not possible to predict the pace and magnitude of changes in interest rates, or the impact rate changes will have on Trustmark's results of operations.

Current wording

Market interest rates began to rise during 2022 after an extended period at historical lows. Starting in March 2022, the FRB began raising the target federal funds rate for the first time in three years and continued with multiple increases throughout 2022 and the first half of 2023. The FRB has maintained the target federal funds rate at a range of 5.25% to 5.50% since July 2023. In addition, the FRB increased the interest that it pays on reserves multiple times during 2022 and the first half of 2023 from 0.10% to 5.40% as of July 2023. The FRB has maintained the rate it pays on reserves at 5.40% since July 2023. These higher interest rates have increased the competitive pressures on the deposit cost of funds. It is not possible to predict the pace and magnitude of changes in interest rates, or the impact rate changes will have on Trustmark's results of operations.

Previous wording

In the April 2024 “Summary of Commentary on Current Economic Conditions by Federal Reserve District,” the twelve Federal Reserve Districts’ reports suggested that during the reporting period (covering the period from February 26, 2024 through April 8, 2024) economic activity expanded slightly. Reports by the twelve Federal Reserve Districts (Districts) noted the following during the reporting period:

Current wording

In the July 2024 “Summary of Commentary on Current Economic Conditions by Federal Reserve District,” the twelve Federal Reserve Districts’ reports suggested that during the reporting period (covering the period from May 21, 2024 through July 8, 2024) economic activity maintained a slight to modest growth. Reports by the twelve Federal Reserve Districts (Districts) noted the following during the reporting period:

Previous wording

Reports by the Federal Reserve’s Sixth District, Atlanta (which includes Trustmark’s Alabama, Florida and Mississippi market regions), Eighth District, St. Louis (which includes Trustmark’s Tennessee market region), and Eleventh District, Dallas (which includes Trustmark’s Texas market region), noted similar findings for the reporting period as those discussed above. The Federal Reserve’s Sixth District also noted lending remained relatively flat amid continued contraction in most consumer loan segments, with one notable exception being home equity lines of credit, which have steadily increased in originations and utilization and a minor increase in commercial real estate loan originations, including multifamily. The Federal Reserve's Sixth District also reported the allowance for loan and lease losses continued to increase as economic uncertainty drove banks to adjust reserves, cash balances increased slightly, consistent with broader industry trends, large time deposits experienced continued growth but may be showing early signs of flattening and borrowings declined over the reporting period as banks paid down this more expensive source of funding. The Federal Reserve’s Eleventh District also reported that loan volumes declined, credit standards continued to tighten, loan pricing continued to rise and loan nonperformance rose slightly. The Federal Reserve’s Eleventh District also noted bankers’ outlooks remained mixed with an expectation of an increase in loan demand six months from now but a deterioration in loan performance and overall business activity.

Current wording

Reports by the Federal Reserve’s Sixth District, Atlanta (which includes Trustmark’s Alabama, Florida and Mississippi market regions), Eighth District, St. Louis (which includes Trustmark’s Tennessee market region), and Eleventh District, Dallas (which includes Trustmark’s Texas market region), noted similar findings for the reporting period as those discussed above. The Federal Reserve’s Sixth District also noted lending remained relatively flat, high deposit and borrowing costs continued to weigh on bank earnings with some financial institutions selling securities in order to reinvest proceeds into higher-yielding assets, elevated interest rates adversely impacted bank customers as businesses and consumers refinanced debt at higher rates and increased delinquencies were observed as credit conditions continued to normalize. The Federal Reserve’s Eleventh District reported that credit standards continued to tighten, though at a slower pace, for all loan types except for consumer loans, loan volumes grew at a faster pace as loan demand increased despite credit standards continuing to tighten, loan price increases moderated and bankers anticipate credit tightening for commercial real estate loans to accelerate over the next three months. The Federal Reserve’s Eleventh District also noted close to half of bankers reported an increase in deposits and slightly more expect deposits to rise in the near term, loan nonperformance continued to rise, particularly for consumer and commercial and industrial loans, and bankers’ outlooks remained mixed as they expect an increase in loan demand in the near term but a deterioration in loan performance and business activity.

Previous wording

Trustmark reported net income of $41.5 million, or basic and diluted earnings per share (EPS) of $0.68, in the first quarter of 2024, compared to $50.3 million, or basic and diluted EPS of $0.82, in the first quarter of 2023. Trustmark’s reported performance during the quarter ended March 31, 2024 produced a return on average tangible equity of 12.98%, a return on average assets of 0.89%, an average equity to average assets ratio of 8.98% and a dividend payout ratio of 33.82%, compared to a return on average tangible equity of 18.03%, a return on average assets of 1.10%, an average equity to average assets ratio of 8.24% and a dividend payout ratio of 28.05% during the quarter ended March 31, 2023.

Current wording

Trustmark reported net income of $73.8 million, or basic and diluted earnings per share (EPS) of $1.21 and $1.20, respectively, in the second quarter of 2024, compared to $45.0 million, or basic and diluted EPS of $0.74, in the second quarter of 2023. Trustmark’s reported performance during the quarter ended June 30, 2024 produced a return on average tangible equity of 21.91%, a return on average assets of 1.58%, an average equity to average assets ratio of 9.20% and a dividend payout ratio of 19.01%, compared to a return on average tangible equity of 15.18%, a return on average assets of 0.96%, an average equity to average assets ratio of 8.42% and a dividend payout ratio of 31.08% during the quarter ended June 30, 2023.

Previous wording

Net interest income for the three months ended March 31, 2024 totaled $132.8 million, a decrease of $4.8 million, or 3.5%, when compared to the same time period in 2023, principally due to an increase in interest on deposits partially offset by an increase in interest and fees on loans held for sale (LHFS) and LHFI and a decline in other interest expense. Interest income totaled $229.8 million for the three months ended March 31, 2024, an increase of $30.9 million, or 15.6%, when compared to the same time period in 2023, principally due to an increase in interest and fees on LHFS and LHFI primarily as a result of the higher interest rate environment and loan growth. Interest expense totaled $97.0 million for the three months ended March 31, 2024, an increase of $35.7 million, or 58.2%, when compared to the same time period in 2023. The increase in interest expense when the three months ended March 31, 2024 is compared to the same time period in 2023 was principally due to an increase in interest on deposits primarily due to rising interest rates, increased competition for deposits and higher average balances, partially offset by a decrease in other interest expense primarily due to a decrease in short-term Federal Home Loan Bank (FHLB) advances.

Current wording

Net interest income for the three and six months ended June 30, 2024 totaled $141.0 million and $273.9 million, respectively, an increase of $1.1 million, or 0.8%, and a decrease of $3.6 million, or 1.3%, respectively, when compared to the same time periods in 2023, principally attributable to an increase in interest and fees on loans held for sale (LHFS) and LHFI, an increase in interest on deposits and a decline in other interest expense. Interest income totaled $239.2 million and $469.0 million for the three and six months ended June 30, 2024, respectively, an increase of $20.6 million, or 9.4%, and $51.6 million, or 12.4%, respectively, when compared to the same time periods in 2023, principally due to an increase in interest and fees on LHFS and LHFI primarily as a result of the higher interest rate environment and loan growth. Interest expense totaled $98.1 million and $195.1 million for the three and six months ended June 30, 2024, an increase of $19.5 million, or 24.8%, and $55.2 million, or 39.5%, respectively, when compared to the same time periods in 2023. The increase in interest expense when the three and six months ended June 30, 2024 are compared to the same time periods in 2023 was principally due to an increase in interest on deposits primarily due to rising interest rates, increased competition for deposits and higher average balances, partially offset by a decrease in other interest expense primarily due to a decrease in short-term Federal Home Loan Bank (FHLB) advances.

Previous wording

The increase in salaries and employee benefits when the three months ended March 31, 2024 is compared to the same time period in 2023 was principally due to increases in salaries expense, primarily due to general merit increases, partially offset by a decline in medical insurance expense.

Current wording

Noninterest expense for the three and six months ended June 30, 2024 totaled $118.3 million and $238.0 million, respectively, a decrease of $3.3 million, or 2.7%, and $1.2 million, or 0.5%, respectively, when compared to the same time periods in 2023. The decrease in noninterest expense for the three and six months ended June 30, 2024 was principally due to declines in services and fees and salaries and employee benefits partially offset by an increase in other expense. Services and fees for the three and six months ended June 30, 2024 totaled $24.7 million and $49.2 million, respectively, a decrease of $3.1 million, or 11.1%, and $3.7 million, or 7.0%, respectively, when compared to the same time periods in 2023, principally due to declines in outside services and fees, primarily related to other services and fees and legal expense, communication expense, primarily related to telephone expense, and advertising expense, partially offset by an increase in data processing expenses related to software. Salaries and employee benefits totaled $64.8 million and $130.3 million for the three and six months ended June 30, 2024, respectively, a decrease of $2.0 million, or 2.9%, and $1.2 million, or 0.9%, respectively. The decrease in salaries and employee benefits when the three months ended June 30, 2024 is compared to the same time period in 2023 was principally due to declines in commissions related to mortgage production, annual retail management incentive compensation and various other salaries expenses, partially offset by increases in annual general incentive compensation and broker commissions. The decrease in salaries and employee benefits when the six months ended June 30, 2024 is compared to the same time period in 2023 was principally due to declines in commission expense related to mortgage production, miscellaneous other salaries expenses, annual retail management incentive compensation and medical insurance expense, partially offset by increases in salaries expense, primarily due to general merit increases, broker commissions and annual general incentive compensation. Other expense totaled $15.2 million and $31.4 million for the three and six months ended June 30, 2024, respectively, an increase of $1.5 million, or 10.7%, and $3.5 million, or 12.3%, respectively, when compared to the same time periods in 2023. The increase in other expense when the three months ended June 30, 2024 is compared to the same time period in 2023 was principally due to an increase in FDIC assessment expense, primarily due to an increase in the assessment rate, partially offset by declines in various other miscellaneous expenses, including sponsorships and contributions, operational losses and franchise taxes. The increase in other expense when the first six months of 2024 is compared to the same time period in 2023 was principally due to increases in FDIC assessment expense and other real estate expense, primarily due to an increase in the net loss on the sale of…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Trustmark’s provision for credit losses (PCL) on LHFI for the three months ended March 31, 2024 totaled $7.7 million, an increase of $4.5 million when compared to the same time period in 2023. The PCL on LHFI for the three months ended March 31, 2024 primarily reflected an increase in required reserves as a result of changes in the macroeconomic forecasts resulting from the annual loss driver analysis performed during the first quarter of 2024 partially offset by a decline in required reserves as a result of updates to the qualitative reserve factors. The PCL on off-balance sheet credit exposures totaled a negative $192 thousand for the three months ended March 31, 2024, a decrease in the negative provision of $2.1 million, or 91.4%, when compared to the same time period in 2023. The negative PCL on off-balance sheet credit exposures for the three months ended March 31, 2024, primarily reflected a decrease in required reserves as a result of a decrease in unfunded commitments largely offset by an increase in required reserves as a result of implementing the performance trend qualitative reserve factor. Please see the section captioned “Provision for Credit Losses” for additional information regarding the PCL on LHFI and off-balance sheet credit exposures.

Current wording

Trustmark’s total PCL on LHFI for the three and six months ended June 30, 2024 totaled $23.3 million and $31.0 million, respectively, and included a $8.6 million PCL, LHFI sale of 1-4 family mortgage loans for the credit-related portion of the loss on the sale of the 1-4 family mortgage loans. The PCL, LHFI, excluding the PCL, LHFI sale of 1-4 family mortgage loans, totaled $14.7 million and $22.4 million for the three and six months ended June 30, 2024, respectively, compared to $8.2 million and $11.5 million, respectively, for the same time periods in 2023. The PCL on LHFI, excluding the PCL, LHFI 1-4 family mortgage loans, for the three and six months ended June 30, 2024 primarily reflected an increase in required reserves as a result of net adjustments to the qualitative factors due to credit migrations and loan growth and net changes in the macroeconomic forecast associated with specific loss driver models as a result of loss driver updates. The PCL on off-balance sheet credit exposures totaled a negative $3.6 million and a negative $3.8 million for the three and six months ended June 30, 2024, respectively, compared to $245 thousand and a negative $2.0 million, respectively, for the same time periods in 2023. The release in PCL on off-balance sheet credit exposures for the three and six months ended June 30, 2024, primarily reflected a decrease in required reserves as a result of a decrease in unfunded commitments and changes in the total reserve rate, partially offset by an increase in required reserves as a result of implementing the performance trend qualitative reserve factor. Please see the section captioned “Provision for Credit Losses” for additional information regarding the PCL on LHFI and off-balance sheet credit exposures.

Previous wording

At March 31, 2024, nonperforming assets totaled $106.0 million, a decrease of $904 thousand, or 0.8%, compared to December 31, 2023, reflecting a decrease in nonaccrual LHFI partially offset by an increase in other real estate. Nonaccrual LHFI totaled $98.4 million at March 31, 2024, a decrease of $1.7 million, or 1.7%, relative to December 31, 2023, primarily as a result of the resolution of one large nonaccrual commercial credit in the Texas market region partially offset by one large commercial credit placed on nonaccrual in the Texas market region as well as an increase in mortgage nonaccruals. Other real estate, net totaled $7.6 million at March 31, 2024, an increase of $753 thousand, or 11.0%, when compared to December 31, 2023, principally due to properties foreclosed in the Mississippi market region partially offset by properties sold in the Alabama and Mississippi market regions as well as write-downs of properties in the Texas market region.

Current wording

At June 30, 2024, nonperforming assets totaled $50.9 million, a decrease of $56.0 million, or 52.4%, compared to December 31, 2023, reflecting declines in both nonaccrual LHFI and other real estate. Nonaccrual LHFI totaled $44.3 million at June 30, 2024, a decrease of $55.7 million, or 55.7%, relative to December 31, 2023, primarily as a result of the sale of 1-4 family mortgage loans during the second quarter of 2024 as well as the resolution of one large nonaccrual commercial credit in the Texas market region and a significant reduction of one large nonaccrual commercial credit in the Alabama market region, partially offset by one large commercial credit placed on nonaccrual in the Alabama market region. Other real estate, net totaled $6.6 million at June 30, 2024, a decrease of $281 thousand, or 4.1%, when compared to December 31, 2023, principally due to properties sold in the Mississippi and Alabama market regions largely offset by properties foreclosed in the Mississippi market region.

Previous wording

LHFI totaled $13.058 billion at March 31, 2024, an increase of $107.4 million, or 0.8%, compared to December 31, 2023. The increase in LHFI during the first three months of 2024 was primarily due to net growth in LHFI secured by real estate partially offset by a decline in state and other political subdivision LHFI. For additional information regarding changes in LHFI and comparative balances by loan category, see the section captioned “LHFI.”

Current wording

LHFI totaled $13.155 billion at June 30, 2024, an increase of $204.9 million, or 1.6%, compared to December 31, 2023. The increase in LHFI during the first six months of 2024 was primarily due to net growth in LHFI secured by real estate and other commercial loans and leases partially offset by declines in commercial and industrial LHFI and state and other political subdivision LHFI. For additional information regarding changes in LHFI and comparative balances by loan category, see the section captioned “LHFI.”

Previous wording

Total deposits were $15.339 billion at March 31, 2024, a decrease of $231.2 million, or 1.5%, compared to December 31, 2023. During the first three months of 2024, noninterest-bearing deposits decreased $158.0 million, or 4.9%, as a result of declines in all categories of noninterest-bearing deposits reflecting customers migration into higher-yielding products. Interest-bearing deposits decreased $73.2 million, or 0.6%, during the first three months of 2024, primarily due to declines in public and consumer interest checking accounts and consumer certificates of deposits (CDs), partially offset by growth in business and consumer money market deposit accounts (MMDA).

Current wording

Total deposits were $15.463 billion at June 30, 2024, a decrease of $106.9 million, or 0.7%, compared to December 31, 2023. During the first six months of 2024, noninterest-bearing deposits decreased $44.1 million, or 1.4%, principally due to declines in commercial noninterest-bearing demand deposit accounts. Interest-bearing deposits decreased $62.8 million, or 0.5%, during the first six months of 2024, primarily due to declines in public and consumer interest checking accounts and consumer savings accounts, partially offset by growth in commercial interest checking accounts, business and consumer money market deposit accounts (MMDA) and all categories of certificates of deposits (CDs).

Previous wording

Federal funds purchased and securities sold under repurchase agreements totaled $393.2 million at March 31, 2024, a decrease of $12.5 million, or 3.1%, compared to December 31, 2023, principally due to a decrease in upstream federal funds purchased. Other borrowings totaled $482.0 million at March 31, 2024, a decrease of $1.2 million, or 0.2%, compared to December 31, 2023, principally due to a decline in GNMA loans eligible for repurchase.

Current wording

Federal funds purchased and securities sold under repurchase agreements totaled $314.1 million at June 30, 2024, a decrease of $91.6 million, or 22.6%, compared to December 31, 2023, principally due to a decrease in upstream federal funds purchased. Other borrowings totaled $336.7 million at June 30, 2024, a decrease of $146.5 million, or 30.3%, compared to December 31, 2023, principally due to a decline in outstanding short-term FHLB advances with the FHLB of Dallas.

Previous wording

For additional information regarding legislation and regulation applicable to Trustmark, see the section captioned “Supervision and Regulation” included in Part I. Item 1. – Business of Trustmark’s 2023 Annual Report.

Current wording

There have been no material changes to the regulatory developments included in Trustmark’s 2023 Annual Report. For additional information regarding legislation and regulation applicable to Trustmark, see the section captioned “Supervision and Regulation” included in Part I. Item 1. – Business of Trustmark’s 2023 Annual Report.

Previous wording

Consistent with Trustmark’s audited annual financial statements, total revenue is defined as net interest income plus noninterest income.

Current wording

Consistent with Trustmark’s audited annual financial statements, total revenue is defined as net interest income plus noninterest income (loss).

Previous wording

Calculated using annualized net income adjusted for intangible amortization divided by total average tangible equity.

Current wording

Calculated using annualized net income (loss) from continuing operations adjusted for intangible amortization divided by total average tangible equity.

Previous wording

Net interest income is the principal component of Trustmark’s income stream and represents the difference, or spread, between interest and fee income generated from earning assets and the interest expense paid on deposits and borrowed funds. Fluctuations in interest rates, as well as volume and mix changes in earning assets and interest-bearing liabilities, can materially impact net interest income. The net interest margin is computed by dividing fully taxable equivalent (FTE) net interest income 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 accompanying yield/rate analysis table shows the average balances for all assets and liabilities of Trustmark and the interest income or expense associated with earning assets and interest-bearing liabilities. The yields and rates have been computed based upon interest income and expense adjusted to a FTE basis using the federal statutory corporate tax rate in effect for each of the periods shown. Loans on nonaccrual have been included in the average loan balances, and interest collected prior to these loans having been placed on nonaccrual has been included in interest income. Loan fees included in interest associated with the average LHFS and LHFI balances were immaterial.

Current wording

Net interest income is the principal component of Trustmark’s income stream and represents the difference, or spread, between interest and fee income generated from earning assets and the interest expense paid on deposits and borrowed funds. Fluctuations in interest rates, as well as volume and mix changes in earning assets and interest-bearing liabilities, can materially impact net interest income. The net interest margin is computed by dividing fully taxable equivalent (FTE) net interest income 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 accompanying yield/rate analysis tables show the average balances for all assets and liabilities of Trustmark and the interest income or expense associated with earning assets and interest-bearing liabilities. The yields and rates have been computed based upon interest income and expense adjusted to a FTE basis using the federal statutory corporate tax rate in effect for each of the periods shown. Loans on nonaccrual have been included in the average loan balances, and interest collected prior to these loans having been placed on nonaccrual has been included in interest income. Loan fees included in interest associated with the average LHFS and LHFI balances were immaterial.

Previous wording

Net interest income-FTE for the three months ended March 31, 2024 decreased $4.9 million, or 3.5%, when compared with the same time period in 2023. The decrease in net interest income-FTE when the three months ended March 31, 2024 is compared to the same time period in 2023 was principally due to an increase in interest on deposits partially offset by an increase in interest and fees on LHFS and LHFI-FTE and a decrease in other interest expense. The net interest margin-FTE for the three months ended March 31, 2024 decreased 18 basis points to 3.21% when compared to the same time period in 2023. The decrease in the net interest margin for the three months ended March 31, 2024 when compared to the same time period in 2023, was principally due to an increase in the cost of interest-bearing deposits partially offset by the increase in the yield on the LHFS and LHFI portfolios.

Current wording

Net interest income-FTE for the three months ended June 30, 2024, increased $1.0 million, or 0.7%, when compared to the same time period in 2023 principally due to an increase in interest and fees on LHFS and LHFI-FTE and a decline in other interest expense, partially offset by an increase in interest on deposits. Net interest income-FTE for the six months ended June 30, 2024 decreased $3.8 million, or 1.3%, when compared with the same time period in 2023 principally due to an increase in interest on deposits partially offset by an increase in interest and fees on LHFS and LHFI-FTE and a decrease in other interest expense. The net interest margin-FTE for the three months ended June 30, 2024 increased 5 basis points to 3.38% when compared to the same time period in 2023. The increase in the net interest margin for the three months ended June 30, 2024 when compared to the same time period in 2023, was principally due to increases in the yields on the LHFS and LHFI portfolios and the securities portfolio, primarily due to the restructuring of the available for sale securities portfolio during the second quarter of 2024, partially offset by an increase in the cost of interest-bearing deposits. The net interest margin-FTE for the six months ended June 30, 2024 decreased 7 basis points to 3.29% when compared to the same time period in 2023. The decrease in the net interest margin for the six months ended June 30, 2024 when compared to the same time period in 2023, was principally due to an increase in the cost of interest-bearing deposits partially offset by the increase in the yield on the LHFS and LHFI portfolios.

Previous wording

Average interest-earning assets for the three months ended March 31, 2024 was $17.088 billion compared to $16.856 billion for the same time period in 2023, an increase of $231.3 million, or 1.4%. The increase in average interest-earning assets for the three months ended March 31, 2024 when compared to the same time period in 2023, was principally due to an increase in average loans (LHFS and LHFI) partially offset by a decline in average total securities and average other earning assets. Average loans (LHFS and LHFI) increased $639.4 million, or 5.1%, when the three months ended March 31, 2024 is compared to the same time period in 2023, principally due to an increase in the average balance of the LHFI portfolio of $603.6 million, or 4.9%. The increase in the LHFI portfolio when the balances at March 31, 2024 are compared to March 31, 2023 was principally due to net growth in LHFI secured by real estate and other commercial loans and leases, partially offset by a decrease in state and other political subdivision LHFI. Average total securities declined $329.3 million, or 9.0%, when the three months ended March 31, 2024 is compared to the same time period in 2023, principally due to calls, maturities and pay-downs of the loans underlying GSE guaranteed securities. Average other earning assets decreased $76.5 million, or 11.8%, when the three months ended March 31, 2024 is compared to the same time period in 2023, primarily due to decreases in reserves held at the FRBA and investments in FHLB stock.

Current wording

Average interest-earning assets for the three months ended June 30, 2024 was $17.189 billion compared to $17.248 billion for the same time period in 2023, a decline of $59.0 million, or 0.3%, principally due to a decline in average total securities and average other earning assets partially offset by an increase in average loans (LHFS and LHFI). Average interest-earning assets for the six months ended June 30, 2024 was $17.139 billion compared to $17.058 billion for the same time period in 2023, an increase of $80.5 million, or 0.5%, principally due to an increase in average loans (LHFS and LHFI) partially offset by a decline in average total securities and average other earning assets. Average loans (LHFS and LHFI) increased $577.1 million, or 4.5%, and $607.7 million, or 4.8%, when the three and six months ended June 30, 2024, respectively, are compared to the same time periods in 2023, principally due to an increase in the average balance of the LHFI portfolio of $571.8 million, or 4.6%, and $587.2 million, or 4.7%, respectively. The increase in the LHFI portfolio when the balances at June 30, 2024 are compared to June 30, 2023 was principally due to net growth in LHFI secured by real estate and other commercial loans and leases. Average total securities declined $322.5 million, or 8.9%, and $325.7 million, or 8.9%, when the three and six months ended June 30, 2024 are compared to the same time periods in 2023, principally due to available for sale securities sold net of available for sale securities purchased as part of the restructuring of the available for sale securities portfolio during the second quarter of 2024 as well as calls, maturities and pay-downs of the loans underlying GSE guaranteed securities. Average other earning assets decreased $310.4 million, or 34.4%, and $198.7 million, or 25.5%, respectively, when the three and six months ended June 30, 2024 are compared to the same time periods in 2023, primarily due to decreases in reserves held at the FRBA and investments in FHLB stock.

Previous wording

Interest income-FTE for the three months ended March 31, 2024 totaled $233.2 million, an increase of $30.8 million, or 15.2%, while the yield on total earning assets increased to 5.49% compared to 4.87% for the same time period in 2023. The increase in interest income-FTE for the three months ended March 31, 2024 was primarily due to an increase in interest and fees on LHFS and LHFI-FTE. During the three months ended March 31, 2024, interest and fees on LHFS and LHFI-FTE increased $30.5 million, or 17.0%, while the yield on LHFS and LHFI increased 61 basis points to 6.40% when compared to the same time period in 2023, primarily due to the higher interest rate environment as well as the increase in the average balance of LHFI.

Current wording

Interest income-FTE for the three and six months ended June 30, 2024 totaled $242.5 million and $475.7 million, respectively, an increase of $20.5 million, or 9.3%, and $51.4 million, or 12.1%, respectively, while the yield on total earning assets increased to 5.67% and 5.58%, respectively, compared to 5.16% and 5.02%, respectively, for the same time periods in 2023. The increase in interest income-FTE for the three and six months ended June 30, 2024 was primarily due to an increase in interest and fees on LHFS and LHFI-FTE. During the three and six months ended June 30, 2024, interest and fees on LHFS and LHFI-FTE increased $23.5 million, or 12.2%, and $53.9 million, or 14.5%, respectively, while the yield on LHFS and LHFI increased 46 basis points to 6.54% and 53 basis points to 6.47%, respectively, when compared to the same time periods in 2023, primarily due to the higher interest rate environment as well as the increase in the average balance of LHFI.

Previous wording

Average interest-bearing liabilities for the three months ended March 31, 2024 totaled $13.376 billion compared to $12.585 billion for the same time period in 2023, an increase of $791.5 million, or 6.3%. The increase in average interest-bearing liabilities when the three months ended March 31, 2024 is compared to the same time period in 2023 was primarily the result of an increase in average interest-bearing deposits partially offset by a decline in average other borrowings. Average interest-bearing deposits for the three months ended March 31, 2024 increased $1.447 billion, or 13.3%, when compared to the same time period in 2023, reflecting growth in average time deposits and average interest-bearing demand deposits, partially offset by declines in savings deposits. Average other borrowings for the three months ended March 31, 2024 decreased $647.2 million, or 49.9%, when compared to the same time period in 2023, principally due to the decrease in outstanding short-term FHLB advances with the FHLB of Dallas as a result of changes in funding needs.

Current wording

Average interest-bearing liabilities for both the three and six months ended June 30, 2024 totaled $13.377 billion compared to $13.047 billion and $12.817 billion, respectively, for the same time periods in 2023, an increase of $330.2 million, or 2.5%, and $559.6 million, or 4.4%, respectively. The increase in average interest-bearing liabilities when the three and six months ended June 30, 2024 are compared to the same time periods in 2023 was primarily the result of an increase in average interest-bearing deposits partially offset by a decline in average other borrowings. Average interest-bearing deposits for the three and six months ended June 30, 2024 increased $1.081 billion, or 9.7%, and $1.263 billion, or 11.5%, respectively, when compared to the same time periods in 2023, reflecting growth in average time deposits and average interest-bearing demand deposits, partially offset by declines in average savings deposits. Average other borrowings for the three and six months ended June 30, 2024 decreased $795.4 million, or 52.5%, and $721.9 million, or 51.3%, respectively, when compared to the same time periods in 2023, principally due to the decrease in outstanding short-term FHLB advances with the FHLB of Dallas as a result of changes in funding needs.

Previous wording

Interest expense for the three months ended March 31, 2024 totaled $97.0 million, an increase of $35.7 million, or 58.2%, when compared with the same time period in 2023, while the rate on total interest-bearing liabilities increased 94 basis points to 2.92% principally due to an increase in interest on deposits partially offset by a decline in other interest expense. Interest on deposits for the three months ended March 31, 2024 increased $42.8 million while the rate on interest-bearing deposits increased 121 basis points to 2.74% when compared to the same time period in 2023, primarily due to higher interest rates, reflecting the increased competitive pressures on deposits, and increases in average balances of time deposits and MMDA accounts. Other interest expense for the three months ended March 31, 2024 decreased $7.9 million, or 50.5%, while the rate on other borrowings decreased to 4.78% compared to 4.87% for the same time period in 2023, primarily due to the decrease in outstanding short-term FHLB advances with the FHLB of Dallas.

Current wording

Interest expense for the three and six months ended June 30, 2024 totaled $98.1 million and $195.1 million, respectively, an increase of $19.5 million, or 24.8%, and $55.2 million, or 39.5%, respectively, when compared with the same time periods in 2023, while the rate on total interest-bearing liabilities increased 53 basis points to 2.95% and 73 basis points to 2.93%, respectively, principally due to an increase in interest on deposits partially offset by a decline in other interest expense. Interest on deposits for the three and six months ended June 30, 2024 increased $29.3 million, or 53.8%, and $72.1 million, or 75.6%, respectively, while the rate on interest-bearing deposits increased 79 basis points to 2.75% and 100 basis points to 2.75%, respectively, when compared to the same time periods in 2023, primarily due to higher interest rates, reflecting the increased competitive pressures on deposits, and increases in average balances of time deposits and MMDA accounts. Other interest expense for the three and six months ended June 30, 2024 decreased $10.6 million, or 54.6%, and $18.4 million, or 52.8%, respectively, while the rate on other borrowings decreased 21 basis points to 4.91% and 17 basis points to 4.84%, respectively, when compared to the same time periods in 2023, primarily due to the decrease in outstanding short-term FHLB advances with the FHLB of Dallas.

Previous wording

The PCL, LHFI is the amount necessary to maintain the ACL for LHFI at the amount of expected credit losses inherent within the LHFI portfolio. The amount of PCL and the related ACL for LHFI are based on Trustmark’s ACL methodology. The PCL, LHFI totaled $7.7 million for the three months ended March 31, 2024, compared to $3.2 million for the same time period in 2023. The PCL on LHFI for the three months ended March 31, 2024 primarily reflected an increase in required reserves as a result of changes in the macroeconomic forecasts resulting from the annual loss driver analysis performed during the first quarter of 2024 partially offset by a decline in required reserves as a result of updates to the qualitative reserve factors.

Current wording

The PCL, LHFI is the amount necessary to maintain the ACL for LHFI at the amount of expected credit losses inherent within the LHFI portfolio. The amount of PCL and the related ACL for LHFI are based on Trustmark’s ACL methodology. The PCL, LHFI, excluding the PCL, LHFI sale of 1-4 family mortgage loans, totaled $14.7 million and $22.4 million for the three and six months ended June 30, 2024, respectively, compared to $8.2 million and $11.5 million, respectively, for the same time periods in 2023. The PCL on LHFI, excluding the PCL, LHFI sale of 1-4 family mortgage loans, for the three and six months ended June 30, 2024 primarily reflected an increase in required reserves as a result of net adjustments to the qualitative factors due to credit migrations and loan growth and net changes in the macroeconomic forecast associated with specific loss driver models as a result of loss driver updates.

Previous wording

FASB ASC Topic 326 requires Trustmark to estimate expected credit losses for off-balance sheet credit exposures which are not unconditionally cancellable by Trustmark. Trustmark maintains a separate ACL for off-balance sheet credit exposures, including unfunded commitments and letters of credit. Adjustments to the ACL on off-balance sheet credit exposures are recorded to the PCL, off-balance sheet credit exposures. The PCL, off-balance sheet credit exposures totaled a negative $192 thousand for the three months ended March 31, 2024, compared to a negative $2.2 million for the same time period in 2023. The negative PCL on off-balance sheet credit exposures for the three months ended March 31, 2024, primarily reflected a decrease in required reserves as a result of a decrease in unfunded commitments largely offset by an increase in required reserves as a result of implementing the performance trend qualitative reserve factor.

Current wording

FASB ASC Topic 326 requires Trustmark to estimate expected credit losses for off-balance sheet credit exposures which are not unconditionally cancellable by Trustmark. Trustmark maintains a separate ACL for off-balance sheet credit exposures, including unfunded commitments and letters of credit. Adjustments to the ACL on off-balance sheet credit exposures are recorded to the PCL, off-balance sheet credit exposures. The PCL, off-balance sheet credit exposures totaled a negative $3.6 million and a negative $3.8 million for the three and six months ended June 30, 2024, respectively, compared to $245 thousand and a negative $2.0 million, respectively, for the same time periods in 2023. The release in PCL on off-balance sheet credit exposures for the three and six months ended June 30, 2024, primarily reflected a decrease in required reserves as a result of a decrease in unfunded commitments and changes in the total reserve rate, partially offset by an increase in required reserves as a result of implementing the performance trend qualitative reserve factor.

Previous wording

Noninterest income represented 29.4% of total revenue for the three months ended March 31, 2024, compared to 27.2% for the three months ended March 31, 2023. The following table provides the comparative components of noninterest income for the periods presented ($ in thousands):

Current wording

The following table provides the comparative components of noninterest income (loss) for the periods presented ($ in thousands):

Previous wording

Changes in various components of noninterest income are discussed in further detail below. For analysis of Trustmark’s insurance commissions and wealth management income, please see the section captioned “Results of Segment Operations.”

Current wording

Changes in various components of noninterest income (loss) are discussed in further detail below. For analysis of Trustmark’s wealth management income, please see the section captioned “Results of Segment Operations.”

Previous wording

The following table illustrates the components of mortgage banking, net included in noninterest income for the periods presented ($ in thousands):

Current wording

The following table illustrates the components of mortgage banking, net included in noninterest income (loss) for the periods presented ($ in thousands):

Previous wording

The increase in mortgage banking, net for the three months ended March 31, 2024 when compared to the same time period in 2023 was principally due to an increase in the gain on sales of loans, net. Mortgage loan production for the three months ended March 31, 2024 was $274.0 million, a decrease of $87.1 million, or 24.1%, when compared to the same time period in 2023. Loans serviced for others totaled $8.553 billion at March 31, 2024, compared with $8.152 billion at March 31, 2023, an increase of $401.3 million, or 4.9%.

Current wording

The decreases in mortgage banking, net for the three and six months ended June 30, 2024 when compared to the same time periods in 2023 were principally due to increases in the net negative hedge ineffectiveness and the run-off of the MSR, partially offset by an increase in the gain on sales of loans, net. Mortgage loan production for the three and six months ended June 30, 2024 was $379.5 million and $653.5 million, respectively, a decrease of $51.8 million, or 12.0%, and $138.9 million, or 17.5%, respectively, when compared to the same time periods in 2023. Loans serviced for others totaled $8.628 billion at June 30, 2024, compared with $8.260 billion at June 30, 2023, an increase of $367.7 million, or 4.5%.

Previous wording

Representing a significant component of mortgage banking income is the gain on sales of loans, net. The increase in the gain on sales of loans, net when the three months ended March 31, 2024 is compared to the same time period in 2023, was primarily the result of higher profit margins in secondary marketing activities and an increase in the volume of loans sold, partially offset by a decline in the mortgage fair value adjustment. Loan sales totaled $258.3 million for the three months ended March 31, 2024, an increase of $44.5 million, or 20.8%, when compared with the same time period in 2023.

Current wording

Representing a significant component of mortgage banking income is the gain on sales of loans, net. The increase in the gain on sales of loans, net when the three months ended June 30, 2024 is compared to the same time period in 2023, was primarily the result of higher profit margins in secondary marketing activities. The increase in the gain on sales of loans, net when the six months ended June 30, 2024 is compared to the same time period in 2023, was primarily the result of higher profit margins in secondary marketing activities partially offset by a decline in the mortgage fair value adjustment. Loan sales totaled $296.8 million and $555.1 million for the three and six months ended June 30, 2024, respectively, a decrease of $38.7 million, or 11.5%, and an increase of $5.8 million, or 1.1%, respectively, when compared with the same time periods in 2023.

Previous wording

The following table illustrates the components of other, net included in noninterest income for the periods presented ($ in thousands):

Current wording

The following table illustrates the components of other, net included in noninterest income (loss) for the periods presented ($ in thousands):

Previous wording

The increase in other, net for the first three months of 2024, when compared to the same time period in 2023 was principally due to increases in cash management service fees and other miscellaneous income.

Current wording

The increases in other, net for the three and six months ended June 30, 2024, when compared to the same time periods in 2023 were principally due to the gain on the fair value adjustment for the Visa C shares as well as increases in cash management service fees and net gains on the sale of premises and equipment partially offset by the noncredit-related loss on the sale of the 1-4 family mortgage loans.

Previous wording

The increase in other expense when the three months ended March 31, 2024 is compared to the same time period in 2023 was principally due to an increase in FDIC assessment expense, primarily due to an increase in the assessment rate. The increase in FDIC assessment rate was principally due to increases in the overall assessment rate and the 2 basis point increase in the initial base assessment rate by the FDIC during the second quarter of 2023 as part of the FDIC's final rule to restore the DIF to required levels.

Current wording

The increase in other expense when the three months ended June 30, 2024 is compared to the same time period in 2023 was principally due to an increase in FDIC assessment expense, primarily due to an increase in the assessment rate, partially offset by declines in various other miscellaneous expenses, including sponsorships and contributions, operational losses and franchise taxes. The increase in other expense when the first six months of 2024 is compared to the same time period in 2023 was principally due to increases in FDIC assessment expense and other real estate expense, primarily due to an increase in the net loss on the sale of other real estate properties, partially offset by declines in various other miscellaneous expenses, including stationery and supplies expense, sponsorships and contributions, travel and entertainment expense and franchise taxes. The increase in FDIC assessment rate was principally due to increases in the overall assessment rate and the 2 basis point increase in the initial base assessment rate by the FDIC during the second quarter of 2023 as part of the FDIC's final rule to restore the DIF to required levels. During the three and six months ended June 30, 2024, Trustmark sold other real estate properties totaling $3.7 million and $4.7 million, respectively, generating net losses of $907 thousand and $962 thousand, respectively. During the second quarter of 2024, $2.1 million of the other real estate properties sold were part of the sale of 1-4 family mortgage loans, which generated a net loss of $781 thousand.

Previous wording

For a description of the methodologies used to measure financial performance and financial information by reportable segment, please see Note 18 – Segment Information included in Part I. Item 1. – Financial Statements of this report. The following discusses changes in the results of operations of each reportable segment for the three months ended March 31, 2024 and 2023.

Current wording

For a description of the methodologies used to measure financial performance and financial information by reportable segment, please see Note 19 – Segment Information included in Part I. Item 1. – Financial Statements of this report. The Insurance Segment is included in discontinued operations for all periods presented in the accompanying consolidated balance sheets and the consolidated statements of income (loss). For additional information about discontinued operations, please see Note 2 - Discontinued Operations included in Part I. Item 1. – Financial Statements of this report. The following discusses changes in the results of operations of each reportable segment for the six months ended June 30, 2024 and 2023.

Previous wording

Net interest income for the General Banking Segment decreased $4.6 million, or 3.4%, when the three months ended March 31, 2024 is compared with the same time period in 2023. The decrease in net interest income was principally due to an increase in interest on deposits partially offset by an increase in interest and fees on LHFS and LHFI and a decline in other interest expense. The PCL (LHFI and off-balance sheet credit exposures) for the General Banking Segment for the three months ended March 31, 2024 totaled $7.3 million compared to a PCL of $934 thousand for the same period in 2023, an increase of $6.4 million. For more information on these net interest income and PCL items, please see the sections captioned “Financial Highlights” and “Results of Operations.”

Current wording

Net interest income for the General Banking Segment decreased $3.5 million, or 1.3%, when the six months ended June 30, 2024 is compared with the same time period in 2023. The decrease in net interest income was principally due to an increase in interest on deposits and a decline in other interest income related to interest earned on the balance held at the FRBA, partially offset by an increase in interest and fees on LHFS and LHFI and a decline in other interest expense related to interest on FHLB advances. The PCL (LHFI and off-balance sheet credit exposures) for the General Banking Segment for the six months ended June 30, 2024 totaled $27.1 million compared to a PCL of $9.4 million for the same period in 2023, an increase of $17.7 million. Excluding the $8.6 million PCL, LHFI sale of 1-4 family mortgage loans, the PCL for the General Banking Segment totaled $18.4 million for the first six months of 2024, an increase of $9.1 million, or 96.9%. For more information on these net interest income and PCL items, please see the sections captioned “Financial Highlights” and “Results of Operations.”

Previous wording

Noninterest income for the General Banking Segment increased $2.0 million, or 7.2%, when the first three months of 2024 is compared to the same time period in 2023, primarily due to the increases in mortgage banking, net and cash management service fees. Noninterest income for the General Banking Segment represented 18.8% of total revenue for this segment for the first three months of 2024 compared to 17.2% for the same time period in 2023. Noninterest income for the General Banking Segment includes service charges on deposit accounts; wealth management; bank card and other fees; mortgage banking, net; other, net and securities gains (losses), net. For more information on these noninterest income items, please see the analysis included in the section captioned “Noninterest Income.”

Current wording

Noninterest income (loss) for the General Banking Segment decreased $178.0 million when the first six months of 2024 is compared to the same time period in 2023, primarily due to the net loss on the sale of available for sale securities, the noncredit-related loss on the sale of 1-4 family mortgage loans and a decrease in mortgage banking, net, partially offset by the gain on the conversion of Visa Class B-1 shares to Visa Class C shares. Noninterest income (loss) for the General Banking Segment includes service charges on deposit accounts; wealth management; bank card and other fees; mortgage banking, net; other, net and security gains (losses), net. For more information on these noninterest income items, please see the analysis included in the section captioned “Noninterest Income (Loss).”

Previous wording

Noninterest expense for the General Banking Segment increased $2.1 million, or 1.9%, when the first three months of 2024 is compared with the same time period in 2023, principally due to increases in data processing charges related to software and FDIC assessment expense, partially offset by declines in outside services and fees. For more information on these noninterest expense items, please see the analysis included in the section captioned “Noninterest Expense.”

Current wording

Noninterest expense for the General Banking Segment decreased $1.5 million, or 0.7%, when the first six months of 2024 is compared with the same time period in 2023, principally due to declines in outside services and fees, salaries and employee benefits, advertising expenses and communications expense, partially offset by increases in FDIC assessment expense and data processing charges related to software. For more information on these noninterest expense items, please see the analysis included in the section captioned “Noninterest Expense.”

Previous wording

Net income for the Wealth Management Segment for the first three months of 2024 increased $48 thousand, or 3.1%, when compared to the same time period in 2023, primarily due to an increase in noninterest income partially offset by a decline in net interest income. Net interest income for the Wealth Management Segment decreased $123 thousand, or 8.5%, when the first three months of 2024 is compared to the same time period in 2023, principally due to an increase in interest expense on deposits as well as a decline in interest and fees on loans generated by the Private Banking Department. The PCL for the three months ended March 31, 2024 totaled $168 thousand compared to a PCL of $68 thousand for the same period in 2023. Noninterest income for the Wealth Management Segment, which primarily includes income related to investment management, trust and brokerage services, increased $238 thousand, or 2.7%, when the first three months of 2024 is compared to the same time period in 2023, primarily due to an increase in income from brokerage services partially offset by a decrease in income from trust management services. Noninterest expense for the Wealth Management Segment decreased $43 thousand, or 0.5%, when the first three months of 2024 is compared to the same time period in 2023, principally due to declines in business process outsourcing expense and miscellaneous other expenses largely offset by an increase in salaries and employee benefits expense, primarily related to broker commissions and trust incentives.

Current wording

Net income for the Wealth Management Segment for the first six months of 2024 increased $430 thousand, or 12.9%, when compared to the same time period in 2023, primarily due to an increase in noninterest income partially offset by an increase in noninterest expense and a decline in net interest income. Net interest income for the Wealth Management Segment decreased $156 thousand, or 5.3%, when the first six months of 2024 is compared to the same time period in 2023, principally due to a decline in interest and fees on loans as well as an increase in interest expense on deposits generated by the Private Banking Department. The PCL for the six months ended June 30, 2024 totaled $165 thousand compared to a PCL of $89 thousand for the same period in 2023. Noninterest income for the Wealth Management Segment, which primarily includes income related to investment management, trust and brokerage services, increased $1.1 million, or 6.3%, when the first six months of 2024 is compared to the same time period in 2023, primarily due to an increase in income from brokerage and investment services partially offset by a decrease in income from trust management services. Noninterest expense for the Wealth Management Segment increased $317 thousand, or 2.0%, when the first six months of 2024 is compared to the same time period in 2023, principally due to an increase in salaries and employee benefits expense, primarily related to broker commissions and trust incentives partially offset by a decrease in business process outsourcing expense.