Acquired Loans

12 Months Ended

Dec. 31, 2021

Certain Loans Acquired in Transfer Not Accounted for as Debt Securities [Abstract]

Acquired Loans

Note 5 – Acquired Loans

Trustmark’s loss share agreement with the Federal Deposit Insurance Corporation (FDIC) covering the acquired covered loans secured by 1-4 family residential properties expired in 2021.

Upon adoption of FASB ASC Topic 326, which was effective for Trustmark on January 1, 2020, Trustmark elected to account for its existing acquired loans as PCD loans included within the LHFI portfolio. Consequently, acquired loans of $72.6 million, as well as the allowance for loan losses, acquired loans of $815 thousand, were transferred on January 1, 2020.

Under FASB ASC Subtopic 310-30, the accretable yield is the excess of expected cash flows at acquisition over the initial fair value of acquired impaired loans and is recorded as interest income over the estimated life of the loans using the effective yield method if the timing and amount of the future cash flows is reasonably estimable. The following table presents changes in the accretable yield for the periods presented ($ in thousands):

	Years Ended December 31,
	2021		2020			2019
Accretable yield at beginning of period	$	—	$	(14,816	)	$	(17,722	)
FASB ASU 2016-13 adoption adjustment		—		14,816			—
Accretion to interest income		—		—			5,532
Disposals, net		—		—			2,072
Reclassification from nonaccretable difference (1)		—		—			(4,698	)
Accretable yield at end of period	$	—	$	—		$	(14,816	)

(1)Reclassifications from nonaccretable difference are due to lower loss expectations and improvements in expected cash flows.

The following table presents the components of the allowance for loan losses on acquired impaired loans for the periods presented ($ in thousands):

	Years Ended December 31,
	2021		2020			2019
Balance at beginning of period	$	—	$	815		$	1,231
FASB ASU 2016-13 adoption adjustment		—		(815	)		—
Net (charge-offs) recoveries		—		—			(458	)
Provision for loan losses, acquired loans		—		—			42
Balance at end of period	$	—	$	—		$	815