UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
November
30, 2009
Date of
Report (Date of earliest event reported)
TRUSTMARK
CORPORATION
(Exact
name of registrant as specified in its charter)
|
Mississippi
|
000-03683
|
64-0471500
|
|
(State
or other jurisdiction of incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
|
248
East Capitol Street, Jackson, Mississippi
|
39201
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
|
|
|
Registrant’s
telephone number, including area code:
|
(601)
208-5111
|
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
o
|
Written communications pursuant
to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
o
|
Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
o
|
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
o
|
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Forward-Looking
Statements
Certain
statements contained herein and the documents incorporated herein are not
statements of historical fact and constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. You can
identify forward-looking statements by words such as “may,” “hope,” “will,”
“should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,”
“predict,” “potential,” “continue,” “could,” “future” or the negative of those
terms or other words of similar meaning. You should read statements that contain
these words carefully because they discuss our future expectations or state
other “forward-looking” information. These forward-looking statements include,
but are not limited to, statements relating to anticipated future operating and
financial performance measures, including net interest margin, credit quality,
business initiatives, growth opportunities and growth rates, among other things
and encompass any estimate, prediction, expectation, projection, opinion,
anticipation, outlook or statement of belief included therein as well as the
management assumptions underlying these forward-looking statements. You should
be aware that the occurrence of the events described under the caption “Risk
Factors” herein, could have an adverse effect on our business, results of
operations and financial condition. Should one or more of these risks
materialize, or should any such underlying assumptions prove to be significantly
different, actual results may vary significantly from those anticipated,
estimated, projected or expected.
Risks
that could cause actual results to differ materially from current expectations
of management include, but are not limited to, changes in the level of
nonperforming assets and charge-offs, local, state and national economic and
market conditions, including the extent and duration of the current volatility
in the credit and financial markets, changes in our ability to measure the fair
value of assets in our portfolio, material changes in the level and/or
volatility of market interest rates, the performance and demand for the products
and services we offer, including the level and timing of withdrawals from our
deposit accounts, the costs and effects of litigation and of unexpected or
adverse outcomes in such litigation, our ability to attract noninterest-bearing
deposits and other low-cost funds, competition in loan and deposit pricing, as
well as the entry of new competitors into our markets through de novo expansion
and acquisitions, economic conditions and monetary and other governmental
actions designed to address the level and volatility of interest rates and the
volatility of securities, currency and other markets, the enactment of
legislation and changes in existing regulations, or enforcement practices, or
the adoption of new regulations, changes in accounting standards and practices,
including changes in the interpretation of existing standards, that effect our
consolidated financial statements, changes in consumer spending, borrowings and
savings habits, technological changes, changes in the financial performance or
condition of our borrowers, changes in our ability to control expenses, changes
in our compensation and benefit plans, greater than expected costs or
difficulties related to the integration of new products and lines of business,
natural disasters, acts of war or terrorism and other risks described in our
filings with the Securities and Exchange Commission.
Although
we believe that the expectations reflected in such forward-looking statements
are reasonable, we can give no assurance that such expectations will prove to be
correct. Except as required by law, we undertake no obligation to update or
revise any of this information, whether as the result of new information, future
events or developments or otherwise.
______________________________________________________________________________
Item 7.01. Regulation FD
Disclosure.
We are
hereby filing two risk factors in this Form 8-K to update the risk factors
contained in our Annual Report on Form 10-K/A (Amendment No. 1) for the year
ended December 31, 2008.
Unless
otherwise indicated or unless the context requires otherwise, all references in
this Form 8-K to "Trustmark," "we," "us," "our," or similar terms means
Trustmark Corporation and its subsidiaries on a consolidated basis.
Risk
Factors
Declines
in Asset Values May Result in Impairment Charges and Adversely Affect the Value
of Our Investments.
We
maintain an investment portfolio that includes, among other asset classes,
obligations of states and municipalities, agency mortgage-related securities and
corporate securities. As of September 30, 2009, we had approximately
$1.5 billion of securities available for sale and $0.2 billion of securities
held to maturity. We may be required to record mark-to-market adjustments on our
investment securities. The market value of investments in our
investment portfolio may be affected by factors other than interest rates or the
underlying performance of the issuer of the securities, such as ratings
downgrades, adverse changes in the business climate and a lack of pricing
information or liquidity in the secondary market for certain investment
securities. In addition, government involvement or intervention in
the financial markets or the lack thereof or market perceptions regarding the
existence or absence of such activities could affect the market and the market
prices for these securities.
On a
quarterly basis, we evaluate investments and other assets for impairment
indicators. As of September 30, 2009, we had total gross unrealized
losses in respect of our temporarily impaired securities of
$260,000. We may be required to record impairment charges if our
investments suffer a decline in value that is
other-than-temporary. If we determine that a significant impairment
has occurred, we would be required to charge against earnings the credit-related
portion of the other-than-temporary impairment, which could have a material
adverse effect on our results of operations in the period in which a write-off,
if any, occurs.
We
are exposed to operational, reputational and regulatory risk and we must utilize
new technologies to deliver our products and services.
As is
customary in the banking industry, we are dependent upon automated and
non-automated systems to record and process our transaction
volume. This poses the risk that technical system flaws, employee
errors or tampering or manipulation of those systems by employees, customers or
outsiders will result in losses. Any such losses,
which may be difficult to detect, could adversely affect our
financial condition or results of operations. In addition, the
occurrence of such a loss could expose us to reputational risk, the
loss of customer business, additional regulatory scrutiny or civil litigation
and possible financial liability. We may also be subject to disruptions of our
operating systems arising from events that are beyond our control (for example,
computer viruses or electrical or telecommunications outages). We are further
exposed to the risk that our third party service providers may be unable to
fulfill their contractual obligations (or will be subject to the same risk of
fraud or operational errors as us). These disruptions may interfere with service
to our customers and result in a financial loss or liability that could
adversely affect our financial condition or results of operations.
In order
to deliver new products and services and to improve the productivity of existing
products and services, the banking industry relies on rapidly evolving
technologies. Our ability effectively to utilize new technologies to
address our customers’ needs and create operating efficiencies could materially
affect our future prospects. We can not provide any assurances that
we will be successful in utilizing such new technologies.
Item 8.01. Other
Events.
(a)
Segment Information
During
the first quarter of 2009, Trustmark Corporation (“Trustmark”) realigned its
management reporting structure to include three segments: General Banking,
Wealth Management and Insurance.
As a
result of these modifications and in accordance with Securities and Exchange
Commission (“SEC”) accounting regulations, Trustmark has recast Note 19 -
Segment Information, to its consolidated balance sheets as of December 31, 2008
and 2007, and the related consolidated statements of income, changes in
shareholders’ equity and cash flows for each of the years in the three-year
period ended December 31, 2008, which were previously included in Trustmark’s
Annual Report on Form 10-K for the year ended December 31, 2008 filed with the
SEC, to reflect the revised segment data as of December 31, 2008 and 2007 and
for the years ended December 31, 2008, 2007 and 2006.
Copies of
Trustmark's consolidated balance sheets as of December 31, 2008 and 2007, and
the related consolidated statements of income, changes in shareholders’ equity
and cash flows, and the notes thereto (including the recast Note 19 - Segment
Information), for each of the years in the three-year period ended December 31,
2008 and the accompanying report of KPMG LLP, independent registered public
accounting firm to Trustmark Corporation, thereon, dated February 26, 2009,
except for Note 19, as to which the date is November 30, 2009, are filed as
exhibits to this Current Report on Form 8-K.
Other
than the changes made to Note 19, there is no change to Trustmark’s consolidated
financial statements as previously filed in the Annual Report on Form 10-K for
the year ended December 31, 2008, including the notes thereto.
Trustmark
extracted selected data from Note 19 to the Consolidated Financial Statements to
create a table summarizing its segment data in Item 1 - Business in its Annual
Report on Form 10-K/A (Amendment No. 1), at page 5 thereof, and to summarize
segment results under the caption “Management’s Discussion and Analysis of
Financial Condition and Results of Operations - Results of Operation - Segment
Information” at pages 44–46 thereof. Readers are encouraged to review
that disclosure in the context of the recast data contained in Note 19 to
Trustmark's Consolidated Financial Statements as filed with this Current Report
on Form 8-K.
General
Banking is primarily responsible for all traditional banking products and
services, including loans and deposits. Beginning in 2009, Management
began making its strategic decisions about General Banking as a segment that
contained not only the revenues and expenses related to its traditional banking
products and services but also included internal support provided by the
strategic banking units within the former Administration segment such as Human
Resources, Executive Administration, Treasury Administration and Corporate
Finance. Management determined that, effective with the beginning of
the 2009 fiscal year, the aggregation of the former Administration segment with
General Banking would allow for a more accurate determination of the financial
performance of General Banking. As a result, beginning in 2009,
Management has made decisions about operating matters related to General Banking
according to this new alignment.
Wealth
Management provides customized solutions for affluent customers by integrating
financial services with traditional banking products and services such as
private banking, money management, full-service brokerage, financial planning,
personal and institutional trust and retirement services. Also,
Wealth Management provides life insurance and risk management services through
TRMK Risk Management, Incorporated, a wholly owned subsidiary of Trustmark
National Bank (TNB).
Insurance
includes two wholly owned subsidiaries of TNB: The Bottrell Insurance
Agency and Fisher-Brown, Incorporated. Through Bottrell and
Fisher-Brown, Trustmark provides a full range of retail insurance products
including commercial risk management products, bonding, group benefits and
personal lines coverage.
(b)
Disclosure Regarding Impact of a Change in Interest Rates on Economic Value at
Risk
Trustmark
hereby amends its disclosure on the impact of a change in interest rates on
economic value at risk, which appeared in the final paragraph of the section
“—Asset/Liability Management —Market/Interest Rate Risk Management” in Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of
Operation in its Quarterly Report on Form 10-Q for the quarter ended September
30, 2009, to correct the disclosure regarding the estimated percentage change in
net portfolio value at September 30, 2009, assuming that interest rates declined
by 100 basis points, which was previously reported as a decline of 2.1% and is
the only change to the information presented below. That paragraph
and the table which follows it are amended in its entirety and replaced with the
following paragraph and table:
Another
component of interest rate risk management is measuring the economic
value-at-risk for a given change in market interest rates. The economic
value-at-risk may indicate risks associated with longer term balance sheet items
that may not affect net interest income at risk over shorter time periods.
Trustmark also uses computer-modeling techniques to determine the present value
of all asset and liability cash flows (both on- and off-balance sheet), adjusted
for prepayment expectations, using a market discount rate. The net change in the
present value of the asset and liability cash flows in the different market rate
environments is the amount of economic value at risk from those rate movements
which is referred to as net portfolio value. As of September 30, 2009, the
economic value of equity at risk for an instantaneous up 200 basis point shift
in rates produced an increase in net portfolio value of 1.9%, while an
instantaneous 100 basis point decrease in interest rates produced a decrease in
net portfolio value of 4.8%. In comparison, the models indicated a net portfolio
value decrease of 6.5% as of September 30, 2008, had interest rates moved up
instantaneously 200 basis points, and an increase of 0.5%, had an instantaneous
200 basis points decrease in interest rates occurred. Due to the historically
low interest rate environment at September 30, 2009, the impact of a 200 basis
point drop scenario was not calculated. The following economic value-at-risk
table summarizes the effect that various rate shifts would have on net portfolio
value:
|
Estimated
% Change in Net Portfolio Value
|
||||||||
|
9/30/2009
|
9/30/2008
|
|||||||
|
Change
in Interest Rates
|
||||||||
|
+200
basis points
|
1.9 | % | -6.5 | % | ||||
|
+100
basis points
|
2.1 | % | -2.9 | % | ||||
|
-100
basis points
|
-4.8 | % | 1.2 | % | ||||
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits
|
Exhibit
No.
|
Description
of Exhibits
|
|
|
23.1
|
Consent
of Independent Registered Public Accounting Firm
|
|
|
99.1
|
Consolidated
balance sheets of Trustmark Corporation and subsidiaries as of December
31, 2008 and 2007, and the related consolidated statements of income,
changes in shareholders’ equity and cash flows for each of the years in
the three-year period ended December 31, 2008, including Notes, and report
of KPMG LLP, independent registered public accounting
firm to Trustmark Corporation, thereon, dated February 26, 2009,
except for Note 19, as to which the date is November 30,
2009.
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
TRUSTMARK
CORPORATION
|
BY:
|
/s/
Louis E. Greer
|
|
|
Louis
E. Greer
|
||
|
Treasurer
and Principal Financial Officer
|
||
|
DATE:
|
November
30, 2009
|
EXHIBIT
INDEX
|
Exhibit
No.
|
Description
of Exhibits
|
|
|
Consent
of Independent Registered Public Accounting Firm
|
||
|
Consolidated
balance sheets of Trustmark Corporation and subsidiaries as of December
31, 2008 and 2007, and the related consolidated statements of income,
changes in shareholders’ equity and cash flows for each of the years in
the three-year period ended December 31, 2008, including Notes, and report
of KPMG LLP, independent registered public accounting
firm to Trustmark Corporation, thereon, dated February 26, 2009,
except for Note 19, as to which the date is November 30,
2009.
|