Note 10 – Other Real Estate and Covered Other Real Estate

Other Real Estate, excluding Covered Other Real Estate

At December 31, 2015, Trustmark’s geographic other real estate distribution was concentrated primarily in its five key market regions: Alabama, Florida, Mississippi, Tennessee and Texas. The ultimate recovery of a substantial portion of the carrying amount of other real estate, excluding covered other real estate, is susceptible to changes in market conditions in these areas.

For the periods presented, changes and gains (losses), net on other real estate, excluding covered other real estate, were as follows ($ in thousands):

	Years Ended December 31,
	2015			2014			2013
Balance at beginning of period	$	92,509		$	106,539		$	78,189
Additions (1)		33,396			37,428			80,256
Disposals		(45,826	)		(43,802	)		(45,545	)
Write-downs		(2,902	)		(7,656	)		(6,361	)
Balance at end of period	$	77,177		$	92,509		$	106,539

Gain (loss), net on the sale of other real estate included in ORE/Foreclosure expense	$	3,995		$	3,697		$	(881	)

(1)	For the year ended December 31, 2013, additions to other real estate includes $40.1 million of other real estate acquired from Trustmark’s merger with BancTrust on February 15, 2013.

At December 31, 2015 and 2014, other real estate, excluding covered other real estate, by type of property consisted of the following ($ in thousands):

	December 31,
	2015		2014
Construction, land development and other land properties	$	47,550	$	61,015
1-4 family residential properties		10,732		10,150
Nonfarm, nonresidential properties		16,717		19,696
Other real estate properties		2,178		1,648
Total other real estate, excluding covered other real estate	$	77,177	$	92,509

At December 31, 2015 and 2014, other real estate, excluding covered other real estate, by geographic location consisted of the following ($ in thousands):

	December 31,
	2015		2014
Alabama	$	21,578	$	21,196
Florida		29,579		35,324
Mississippi (1)		14,312		17,397
Tennessee (2)		9,974		10,292
Texas		1,734		8,300
Total other real estate, excluding covered other real estate	$	77,177	$	92,509

(1)	Mississippi includes Central and Southern Mississippi Regions

(2)	Tennessee includes Memphis, Tennessee and Northern Mississippi Regions

Covered Other Real Estate

For the periods presented, changes and gains, net on covered other real estate were as follows ($ in thousands):

	Years Ended December 31,
	2015			2014			2013
Balance at beginning of period	$	6,060		$	5,108		$	5,741
Transfers from covered loans		266			2,851			1,934
FASB ASC 310-30 adjustment for the residual recorded investment		(880	)		136			(345	)
Net transfers from covered loans		(614	)		2,987			1,589
Disposals		(2,526	)		(1,232	)		(1,442	)
Write-downs		(1,269	)		(803	)		(780	)
Balance at end of period	$	1,651		$	6,060		$	5,108
Gain, net on the sale of covered other real estate included in ORE/Foreclosure expenses	$	46		$	24		$	119

At December 31, 2015 and 2014, covered other real estate by type of property consisted of the following ($ in thousands):

	December 31,
	2015		2014
Construction, land development and other land properties	$	638	$	1,917
1-4 family residential properties		223		1,103
Nonfarm, nonresidential properties		399		2,296
Other real estate properties		391		744
Total covered other real estate	$	1,651	$	6,060