Triumph Bancorp Reports Fourth Quarter Net Income to Common Stockholders of $25.8 million

DALLAS, Jan. 20, 2022 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (Nasdaq: TBK) (“Triumph” or the “Company”) today announced earnings and operating results for the fourth quarter of 2021.

As part of how we measure our results, we use certain non-GAAP financial measures to ascertain performance. These non-GAAP financial measures are reconciled in the section labeled “Metrics and non-GAAP financial reconciliation” at the end of this press release.

2021 Fourth Quarter Highlights

• For the fourth quarter of 2021, net income to common shareholders was $25.8 million, and diluted earnings per share were $1.02.
• Net interest income was $104.1 million.
• Non-interest income was $14.3 million.
• Non-interest expense was $83.0 million. Included in non-interest expense was a $7.4 million accrual for our Strategic Equity Grant ("SEG") reflected in salaries and employee benefits which represents a cumulative catch-up to cover two-thirds of the three year vesting period. Further discussion of the SEG can be found in our 2020 Proxy.
• Net interest margin was 7.66%. Yield on loans and the average cost of our total deposits were 8.68% and 0.16%, respectively.
• Credit loss expense for the quarter ended December 31, 2021 was $2.0 million.
• Net charge-offs were $0.2 million for the quarter.
• The total dollar value of invoices purchased by Triumph Business Capital was $4.033 billion with an average invoice size of $2,416. The transportation average invoice size for the quarter was $2,291.
• TriumphPay processed 4,027,680 invoices paying carriers a total of $5.242 billion.
  

Balance Sheet

Total loans held for investment increased $84.8 million, or 1.8%, during the fourth quarter to $4.868 billion at December 31, 2021. Average loans held for investment for the quarter increased $73.1 million, or 1.5%, to $4.844 billion.

Total deposits were $4.647 billion at December 31, 2021, a decrease of $175.9 million, or 3.6%, in the fourth quarter of 2021. Non-interest-bearing deposits accounted for 41% of total deposits and non-time deposits accounted for 86% of total deposits at December 31, 2021.

Asset Quality and Allowance for Credit Loss

Our nonperforming assets ratio at December 31, 2021 was 0.92%. Approximately 2 basis points of this ratio at December 31, 2021 consisted of $1.4 million of the acquired Over-Formula Advance portfolio which represents the portion that is not covered by CVLG's indemnification. An additional 33 basis points of this ratio at December 31, 2021 consisted of $19.4 million of the Misdirected Payments. Over-Formula Advances and Misdirected Payments are discussed in greater detail below.

Our past-due loan ratio at December 31, 2021 was 2.86%. Approximately 21 basis points of this ratio at December 31, 2021 consisted of $10.1 million of past due factored receivables related to the Over-Formula Advance portfolio. An additional 40 basis points of this ratio at December 31, 2021 consisted of the $19.4 million of Misdirected Payments, as discussed below.

Our ACL as a percentage of loans held for investment increased 1 basis point during the quarter to 0.87% at December 31, 2021.

CARES Act and Paycheck Protection Program

As of December 31, 2021, our balance sheet reflected deferrals on outstanding loan balances of $31.9 million to assist customers impacted by COVID-19. Modifications related to the COVID-19 pandemic and qualifying under the provisions of Section 4013 of the CARES Act are not considered troubled debt restructurings. As of December 31, 2021, these deferred balances carried accrued interest of $0.1 million.

As of December 31, 2021, we carried 118 PPP loans representing a balance of $27.2 million classified as commercial loans. We recognized $2.7 million in fees from the SBA on PPP loans during the three months ended December 31, 2021 and carry $0.8 million of deferred fees on PPP loans at quarter end. The remaining fees will be amortized over the respective lives of the loans or recognized upon forgiveness of the loans.

Items related to our July 2020 acquisition of TFS

As disclosed on our SEC Forms 8-K filed on July 8, 2020 and September 23, 2020, we acquired the transportation factoring assets of TFS, a wholly owned subsidiary of Covenant Logistics Group, Inc. ("CVLG"), and subsequently amended the terms of that transaction. There were no material developments related to that transaction that impacted our operating results for the three months ended December 31, 2021.

At December 31, 2021, the carrying value of the acquired over-formula advances was $10.1 million, the total reserve on acquired over-formula advances was $10.1 million and the balance of our indemnification asset, the value of the payment that would be due to us from CVLG in the event that these over-advances are charged off, was $4.8 million.

As of December 31, 2021 we carried a separate $19.4 million receivable (the “Misdirected Payments”) payable by the United States Postal Service (“USPS”) arising from accounts factored to the largest over-formula advance carrier. This amount is separate from the acquired Over-Formula Advances. The amounts represented by this receivable were paid by the USPS directly to such customer in contravention of notices of assignment delivered to, and previously honored by, the USPS, which amount was then not remitted back to us by such customer as required. The USPS disputes their obligation to make such payment, citing purported deficiencies in the notices delivered to them. In addition to commencing litigation against such customer, we have commenced litigation in the United States Court of Federal Claims against the USPS seeking a ruling that the USPS was obligated to make the payments represented by this receivable directly to us. Based on our legal analysis and discussions with our counsel advising us on this matter, we continue to believe it is probable that we will prevail in such action and that the USPS will have the capacity to make payment on such receivable. Consequently, we have not reserved for such balance as of December 31, 2021. The full amount of such receivable is reflected in non-performing and past due factored receivables as of December 31, 2021 in accordance with our policy. As of December 31, 2021, the entire $19.4 million Misdirected Payments amount was greater than 90 days past due.

Conference Call Information

Aaron P. Graft, Vice Chairman and CEO and Brad Voss, CFO will review the financial results in a conference call for investors and analysts beginning at 7:00 a.m. Central Time on Friday, January 21, 2022.

To participate in the live conference call, please dial 1-844-200-6205 (International: +1-929-526-1599) and access code 984179.  A simultaneous audio-only webcast may be accessed via the Company's website at www.triumphbancorp.com through the Investor Relations, News & Events, Webcasts and Presentations links, or through a direct link here at: https://services.choruscall.com/links/tbk220121.html. An archive of this conference call will subsequently be available at this same location on the Company’s website.

About Triumph

Triumph Bancorp, Inc. (Nasdaq: TBK) is a financial holding company headquartered in Dallas, Texas, offering a diversified line of payments, factoring, and banking services. www.triumphbancorp.com 

Forward-Looking Statements

This press release contains forward-looking statements. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “could,” “may,” “will,” “should,” “seeks,” “likely,” “intends,” “plans,” “pro forma,” “projects,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: business and economic conditions generally and in the bank and non-bank financial services industries, nationally and within our local market areas; the impact of COVID-19 on our business, including the impact of the actions taken by governmental authorities to try and contain the virus or address the impact of the virus on the United States economy (including, without limitation, the CARES Act), and the resulting effect of all of such items on our operations, liquidity and capital position, and on the financial condition of our borrowers and other customers; our ability to mitigate our risk exposures; our ability to maintain our historical earnings trends; changes in management personnel; interest rate risk; concentration of our products and services in the transportation industry; credit risk associated with our loan portfolio; lack of seasoning in our loan portfolio; deteriorating asset quality and higher loan charge-offs; time and effort necessary to resolve nonperforming assets; inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates; risks related to the integration of acquired businesses, including our acquisition of HubTran Inc. and developments related to our acquisition of Transport Financial Solutions and the related over-formula advances, and any future acquisitions; our ability to successfully identify and address the risks associated with our possible future acquisitions, and the risks that our prior and possible future acquisitions make it more difficult for investors to evaluate our business, financial condition and results of operations, and impairs our ability to accurately forecast our future performance; lack of liquidity; fluctuations in the fair value and liquidity of the securities we hold for sale; impairment of investment securities, goodwill, other intangible assets or deferred tax assets; our risk management strategies; environmental liability associated with our lending activities; increased competition in the bank and non-bank financial services industries, nationally, regionally or locally, which may adversely affect pricing and terms; the accuracy of our financial statements and related disclosures; material weaknesses in our internal control over financial reporting; system failures or failures to prevent breaches of our network security; the institution and outcome of litigation and other legal proceedings against us or to which we become subject; changes in carry-forwards of net operating losses; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and their application by our regulators; governmental monetary and fiscal policies; changes in the scope and cost of FDIC, insurance and other coverages; failure to receive regulatory approval for future acquisitions; and increases in our capital requirements.

While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. All forward-looking statements are necessarily only estimates of future results. Accordingly, actual results may differ materially from those expressed in or contemplated by the particular forward-looking statement, and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" and the forward-looking statement disclosure contained in Triumph’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 12, 2021.

Non-GAAP Financial Measures

This press release includes certain non‐GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of non‐GAAP financial measures to GAAP financial measures are provided at the end of this press release.

The following table sets forth key metrics used by Triumph to monitor our operations. Footnotes in this table can be found in our definitions of non-GAAP financial measures at the end of this document.

	As of and for the Three Months Ended																				As of and for the Twelve Months Ended
(Dollars in thousands)	December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020				December 31, 2021				December 31, 2020
Financial Highlights:
Total assets	$	5,956,250			$	6,024,535			$	6,015,877			$	6,099,628			$	5,935,791			$	5,956,250			$	5,935,791
Loans held for investment	$	4,867,572			$	4,782,730			$	4,831,215			$	5,084,512			$	4,996,776			$	4,867,572			$	4,996,776
Deposits	$	4,646,679			$	4,822,575			$	4,725,450			$	4,789,665			$	4,716,600			$	4,646,679			$	4,716,600
Net income available to common stockholders	$	25,839			$	23,627			$	27,180			$	33,122			$	31,328			$	109,768			$	62,323
Performance Ratios - Annualized:
Return on average assets		1.77	%			1.61	%			1.84	%			2.29	%			2.21	%			1.87	%			1.18	%
Return on average total equity		12.41	%			11.85	%			14.27	%			18.42	%			17.73	%			14.10	%			9.67	%
Return on average common equity		12.71	%			12.13	%			14.70	%			19.14	%			18.44	%			14.52	%			9.77	%
Return on average tangible common equity (1)		19.41	%			19.21	%			20.92	%			26.19	%			25.70	%			21.42	%			13.92	%
Yield on loans(2)		8.68	%			7.92	%			7.77	%			7.24	%			7.20	%			7.91	%			7.00	%
Cost of interest bearing deposits		0.27	%			0.27	%			0.31	%			0.41	%			0.54	%			0.32	%			0.93	%
Cost of total deposits		0.16	%			0.16	%			0.20	%			0.28	%			0.38	%			0.20	%			0.67	%
Cost of total funds		0.29	%			0.38	%			0.34	%			0.42	%			0.51	%			0.36	%			0.80	%
Net interest margin(2)		7.66	%			6.69	%			6.47	%			6.06	%			6.20	%			6.72	%			5.71	%
Net non-interest expense to average assets		4.56	%			4.00	%			3.75	%			3.14	%			2.54	%			3.87	%			2.98	%
Adjusted net non-interest expense to average assets (1)		4.56	%			4.00	%			3.55	%			3.14	%			2.54	%			3.82	%			3.14	%
Efficiency ratio		70.16	%			70.13	%			67.96	%			62.57	%			55.95	%			67.87	%			64.35	%
Adjusted efficiency ratio (1)		70.16	%			70.13	%			65.09	%			62.57	%			55.95	%			67.16	%			65.97	%
Asset Quality:(3)
Past due to total loans		2.86	%			2.31	%			2.28	%			1.96	%			3.22	%			2.86	%			3.22	%
Non-performing loans to total loans		0.95	%			0.90	%			1.06	%			1.17	%			1.16	%			0.95	%			1.16	%
Non-performing assets to total assets		0.92	%			0.86	%			0.97	%			1.15	%			1.15	%			0.92	%			1.15	%
ACL to non-performing loans		91.20	%			95.75	%			88.92	%			80.87	%			164.98	%			91.20	%			164.98	%
ACL to total loans		0.87	%			0.86	%			0.95	%			0.94	%			1.92	%			0.87	%			1.92	%
Net charge-offs to average loans		—	%			0.08	%			0.01	%			0.85	%			0.03	%			0.95	%			0.10	%
Capital:
Tier 1 capital to average assets(4)		11.11	%			10.43	%			9.73	%			10.89	%			10.80	%			11.11	%			10.80	%
Tier 1 capital to risk-weighted assets(4)		11.51	%			11.06	%			10.33	%			11.28	%			10.60	%			11.51	%			10.60	%
Common equity tier 1 capital to risk-weighted assets(4)		9.94	%			9.45	%			8.74	%			9.72	%			9.05	%			9.94	%			9.05	%
Total capital to risk-weighted assets		14.10	%			13.69	%			12.65	%			13.58	%			13.03	%			14.10	%			13.03	%
Total equity to total assets		14.42	%			13.62	%			13.17	%			12.53	%			12.24	%			14.42	%			12.24	%
Tangible common stockholders' equity to tangible assets(1)		9.46	%			8.63	%			8.04	%			8.98	%			8.56	%			9.46	%			8.56	%
Per Share Amounts:
Book value per share	$	32.35			$	30.87			$	29.76			$	28.90			$	27.42			$	32.35			$	27.42
Tangible book value per share (1)	$	21.34			$	19.73			$	18.35			$	21.34			$	19.78			$	21.34			$	19.78
Basic earnings per common share	$	1.04			$	0.95			$	1.10			$	1.34			$	1.27			$	4.44			$	2.56
Diluted earnings per common share	$	1.02			$	0.94			$	1.08			$	1.32			$	1.25			$	4.35			$	2.53
Adjusted diluted earnings per common share(1)	$	1.02			$	0.94			$	1.17			$	1.32			$	1.25			$	4.44			$	2.26
Shares outstanding end of period		25,158,879				25,123,342				25,109,703				24,882,929				24,868,218				25,158,879				24,868,218

Unaudited consolidated balance sheet as of:

(Dollars in thousands)	December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020
ASSETS
Total cash and cash equivalents	$	383,178			$	532,764			$	444,439			$	380,811			$	314,393
Securities - available for sale		182,426				164,816				193,627				205,330				224,310
Securities - held to maturity, net		4,947				5,488				5,658				5,828				5,919
Equity securities		5,504				5,623				5,854				5,826				5,826
Loans held for sale		7,330				26,437				31,136				22,663				24,546
Loans held for investment		4,867,572				4,782,730				4,831,215				5,084,512				4,996,776
Allowance for credit losses		(42,213	)			(41,017	)			(45,694	)			(48,024	)			(95,739	)
Loans, net		4,825,359				4,741,713				4,785,521				5,036,488				4,901,037
FHLB and other restricted stock		10,146				4,901				8,096				9,807				6,751
Premises and equipment, net		105,729				104,311				106,720				105,390				103,404
Other real estate owned ("OREO"), net		524				893				1,013				1,421				1,432
Goodwill and intangible assets, net		276,856				280,055				286,567				188,006				189,922
Bank-owned life insurance		40,993				41,540				41,912				41,805				41,608
Deferred tax asset, net		10,023				—				—				1,260				6,427
Indemnification asset		4,786				4,786				5,246				5,246				36,225
Other assets		98,449				111,208				100,088				89,747				73,991
Total assets	$	5,956,250			$	6,024,535			$	6,015,877			$	6,099,628			$	5,935,791
LIABILITIES
Non-interest bearing deposits	$	1,925,370			$	2,020,984			$	1,803,552			$	1,637,653			$	1,352,785
Interest bearing deposits		2,721,309				2,801,591				2,921,898				3,152,012				3,363,815
Total deposits		4,646,679				4,822,575				4,725,450				4,789,665				4,716,600
Customer repurchase agreements		2,103				11,990				9,243				2,668				3,099
Federal Home Loan Bank advances		180,000				30,000				130,000				180,000				105,000
Payment Protection Program Liquidity Facility		27,144				97,554				139,673				158,796				191,860
Subordinated notes		106,957				106,755				87,620				87,564				87,509
Junior subordinated debentures		40,602				40,467				40,333				40,201				40,072
Deferred tax liability, net		—				982				3,333				—				—
Other liabilities		93,901				93,538				87,837				76,730				64,870
Total liabilities		5,097,386				5,203,861				5,223,489				5,335,624				5,209,010
EQUITY
Preferred Stock		45,000				45,000				45,000				45,000				45,000
Common stock		283				282				282				280				280
Additional paid-in-capital		510,939				499,282				494,224				490,699				489,151
Treasury stock, at cost		(104,743	)			(104,600	)			(104,486	)			(103,059	)			(103,052	)
Retained earnings		399,351				373,512				349,885				322,705				289,583
Accumulated other comprehensive income (loss)		8,034				7,198				7,483				8,379				5,819
Total stockholders' equity		858,864				820,674				792,388				764,004				726,781
Total liabilities and equity	$	5,956,250			$	6,024,535			$	6,015,877			$	6,099,628			$	5,935,791

Unaudited consolidated statement of income:

	For the Three Months Ended																				For the Twelve Months Ended
(Dollars in thousands)	December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020				December 31, 2021				December 31, 2020
Interest income:
Loans, including fees	$	43,979			$	44,882			$	45,988			$	48,706			$	50,723			$	183,555			$	198,214
Factored receivables, including fees		62,196				50,516				47,328				37,795				37,573				197,835				114,434
Securities		1,438				1,126				1,187				1,650				1,519				5,401				8,229
FHLB and other restricted stock		25				28				27				76				56				156				530
Cash deposits		141				183				158				126				68				608				708
Total interest income		107,779				96,735				94,688				88,353				89,939				387,555				322,115
Interest expense:
Deposits		1,907				1,948				2,470				3,372				4,308				9,697				27,403
Subordinated notes		1,297				2,449				1,350				1,349				1,347				6,445				5,363
Junior subordinated debentures		444				443				446				442				452				1,775				2,114
Other borrowings		74				124				140				170				234				508				2,507
Total interest expense		3,722				4,964				4,406				5,333				6,341				18,425				37,387
Net interest income		104,057				91,771				90,282				83,020				83,598				369,130				284,728
Credit loss expense (benefit)		2,008				(1,187	)			(1,806	)			(7,845	)			4,680				(8,830	)			38,329
Net interest income after credit loss expense (benefit)		102,049				92,958				92,088				90,865				78,918				377,960				246,399
Non-interest income:
Service charges on deposits		2,050				2,030				1,857				1,787				1,643				7,724				5,274
Card income		2,470				2,144				2,225				1,972				1,949				8,811				7,781
Net OREO gains (losses) and valuation adjustments		29				(9	)			(287	)			(80	)			(217	)			(347	)			(616	)
Net gains (losses) on sale of securities		—				4				1				—				16				5				3,226
Fee income		5,711				5,198				4,470				2,249				1,615				17,628				6,007
Insurance commissions		1,138				1,231				1,272				1,486				1,327				5,127				4,232
Gain on sale of subsidiary		—				—				—				—				—				—				9,758
Other		2,861				1,457				4,358				6,877				16,053				15,553				24,723
Total non-interest income		14,259				12,055				13,896				14,291				22,386				54,501				60,385
Non-interest expense:
Salaries and employee benefits		52,544				43,769				41,658				35,980				33,798				173,951				126,975
Occupancy, furniture and equipment		6,194				6,388				6,112				5,779				7,046				24,473				22,766
FDIC insurance and other regulatory assessments		288				353				500				977				350				2,118				1,520
Professional fees		2,633				2,362				5,052				2,545				2,326				12,592				9,349
Amortization of intangible assets		3,199				3,274				2,428				1,975				2,065				10,876				8,330
Advertising and promotion		1,640				1,403				1,241				890				1,170				5,174				4,718
Communications and technology		7,844				7,090				6,028				5,900				5,639				26,862				22,153
Other		8,662				8,174				7,779				6,846				6,904				31,461				26,263
Total non-interest expense		83,004				72,813				70,798				60,892				59,298				287,507				222,074
Net income before income tax		33,304				32,200				35,186				44,264				42,006				144,954				84,710
Income tax expense		6,664				7,771				7,204				10,341				9,876				31,980				20,686
Net income	$	26,640			$	24,429			$	27,982			$	33,923			$	32,130			$	112,974			$	64,024
Dividends on preferred stock		(801	)			(802	)			(802	)			(801	)			(802	)			(3,206	)			(1,701	)
Net income available to common stockholders	$	25,839			$	23,627			$	27,180			$	33,122			$	31,328			$	109,768			$	62,323

Earnings per share:

	For the Three Months Ended															Twelve Months Ended
(Dollars in thousands)	December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Basic
Net income to common stockholders	$	25,839		$	23,627		$	27,180		$	33,122		$	31,328		$	109,768		$	62,323
Weighted average common shares outstanding		24,786,720			24,759,419			24,724,128			24,675,109			24,653,099			24,736,713			24,387,932
Basic earnings per common share	$	1.04		$	0.95		$	1.10		$	1.34		$	1.27		$	4.44		$	2.56
Diluted
Net income to common stockholders - diluted	$	25,839		$	23,627		$	27,180		$	33,122		$	31,328		$	109,768		$	62,323
Weighted average common shares outstanding		24,786,720			24,759,419			24,724,128			24,675,109			24,653,099			24,736,713			24,387,932
Dilutive effects of:
Assumed exercises of stock options		124,462			121,110			134,358			130,016			101,664			130,198			64,104
Restricted stock awards		236,251			141,204			139,345			169,514			136,239			170,276			86,498
Restricted stock units		87,605			74,268			73,155			66,714			50,156			76,049			25,978
Performance stock units - market based		150,969			131,346			134,313			128,167			112,228			136,199			51,304
Performance stock units - performance based		—			—			—			—			—			—			—
Employee stock purchase plan		4,726			616			3,708			1,418			—			2,617			—
Weighted average shares outstanding - diluted		25,390,733			25,227,963			25,209,007			25,170,938			25,053,386			25,252,052			24,615,816
Diluted earnings per common share	$	1.02		$	0.94		$	1.08		$	1.32		$	1.25		$	4.35		$	2.53

Shares that were not considered in computing diluted earnings per common share because they were antidilutive or have not met the thresholds to be considered in the dilutive calculation are as follows:

	For the Three Months Ended										Twelve Months Ended
	December 31, 2021		September 30, 2021		June 30, 2021		March 31, 2021		December 31, 2020		December 31, 2021		December 31, 2020
Stock options	—		16,939		16,939		—		—		16,939		64,947
Restricted stock awards	8,463		—		—		—		—		8,463		—
Restricted stock units	15,000		—		—		—		—		15,000		—
Performance stock units - market based	—		12,020		13,520		—		—		—		—
Performance stock units - performance based	259,383		259,383		265,625		256,625		256,625		259,383		256,625
Employee stock purchase plan	—		—		—		—		—		—		—

Loans held for investment summarized as of:

(Dollars in thousands)	December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020
Commercial real estate	$	632,775		$	630,106		$	701,576		$	784,110		$	779,158
Construction, land development, land		123,464			171,814			185,444			223,841			219,647
1-4 family residential properties		123,115			127,073			135,288			142,859			157,147
Farmland		77,394			82,990			91,122			97,835			103,685
Commercial		1,430,429			1,398,497			1,453,583			1,581,125			1,562,957
Factored receivables		1,699,537			1,607,028			1,398,299			1,208,718			1,120,770
Consumer		10,885			12,677			12,389			14,332			15,838
Mortgage warehouse		769,973			752,545			853,514			1,031,692			1,037,574
Total loans	$	4,867,572		$	4,782,730		$	4,831,215		$	5,084,512		$	4,996,776

Our banking loan portfolio consists of traditional community bank loans as well as commercial finance product lines focused on businesses that require specialized financial solutions and national lending product lines that further diversify our lending operations.

Banking loans held for investment are further summarized below:

(Dollars in thousands)	December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020
Commercial real estate	$	632,775		$	630,106		$	701,576		$	784,110		$	779,158
Construction, land development, land		123,464			171,814			185,444			223,841			219,647
1-4 family residential		123,115			127,073			135,288			142,859			157,147
Farmland		77,394			82,990			91,122			97,835			103,685
Commercial - General		295,662			289,242			290,562			288,458			340,850
Commercial - Paycheck Protection Program		27,197			87,413			135,307			237,299			189,857
Commercial - Agriculture		70,127			77,263			76,346			83,859			94,572
Commercial - Equipment		621,437			588,105			604,396			623,248			573,163
Commercial - Asset-based lending		281,659			213,927			181,394			188,825			180,488
Commercial - Liquid Credit		134,347			142,547			165,578			159,436			184,027
Consumer		10,885			12,677			12,389			14,332			15,838
Mortgage Warehouse		769,973			752,545			853,514			1,031,692			1,037,574
Total banking loans held for investment	$	3,168,035		$	3,175,702		$	3,432,916		$	3,875,794		$	3,876,006

The following table presents the Company’s operating segments:

(Dollars in thousands)
Three months ended December 31, 2021		Banking			Factoring				Payments				Corporate				Consolidated
Total interest income		$	45,534		$	58,042			$	4,154			$	49			$	107,779
Intersegment interest allocations			2,272			(2,178	)			(94	)			—				—
Total interest expense			1,980			—				—				1,742				3,722
Net interest income (expense)			45,826			55,864				4,060				(1,693	)			104,057
Credit loss expense (benefit)			171			1,600				(110	)			347				2,008
Net interest income after credit loss expense			45,655			54,264				4,170				(2,040	)			102,049
Noninterest income			8,308			2,295				3,209				447				14,259
Noninterest expense			46,617			22,335				13,376				676				83,004
Operating income (loss)		$	7,346		$	34,224			$	(5,997	)		$	(2,269	)		$	33,304

(Dollars in thousands)
Three months ended September 30, 2021		Banking				Factoring				Payments				Corporate				Consolidated
Total interest income		$	46,175			$	47,222			$	3,295			$	43			$	96,735
Intersegment interest allocations			2,452				(2,341	)			(111	)			—				—
Total interest expense			2,073				—				—				2,891				4,964
Net interest income (expense)			46,554				44,881				3,184				(2,848	)			91,771
Credit loss expense (benefit)			(2,399	)			1,164				38				10				(1,187	)
Net interest income after credit loss expense			48,953				43,717				3,146				(2,858	)			92,958
Noninterest income			7,371				1,557				3,086				41				12,055
Noninterest expense			41,183				19,106				11,416				1,108				72,813
Operating income (loss)		$	15,141			$	26,168			$	(5,184	)		$	(3,925	)		$	32,200

Information pertaining to our factoring segment, which includes only factoring originated by our Triumph Business Capital subsidiary, summarized as of and for the quarters ended:

	December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020
Factored receivable period end balance	$	1,546,361,000			$	1,479,989,000			$	1,284,314,000			$	1,118,988,000			$	1,036,548,000
Yield on average receivable balance		14.42	%			13.75	%			14.99	%			13.85	%			13.80	%
Current quarter charge-off rate(1)		0.01	%			0.24	%			0.04	%			3.95	%			0.02	%
Factored receivables - transportation concentration		90	%			90	%			91	%			90	%			89	%
Interest income, including fees	$	58,042,000			$	47,222,000			$	44,653,000			$	35,824,000			$	35,439,000
Non-interest income(2)		2,295,000				1,557,000				2,742,000				1,757,000				1,358,000
Factored receivable total revenue		60,337,000				48,779,000				47,395,000				37,581,000				36,797,000
Average net funds employed		1,442,551,000				1,235,610,000				1,072,405,000				936,528,000				924,899,000
Yield on average net funds employed		16.59	%			15.66	%			17.73	%			16.27	%			15.83	%
Accounts receivable purchased	$	4,032,585,000			$	3,531,811,000			$	3,068,262,000			$	2,492,468,000			$	2,461,249,000
Number of invoices purchased		1,669,387				1,535,321				1,401,695				1,188,678				1,189,271
Average invoice size	$	2,416			$	2,300			$	2,189			$	2,097			$	2,070
Average invoice size - transportation	$	2,291			$	2,195			$	2,090			$	1,974			$	1,943
Average invoice size - non-transportation	$	5,648			$	4,944			$	4,701			$	4,775			$	5,091

(1)	March 31, 2021 includes a $41.3 million charge-off related to the TFS acquisition, which contributed approximately 3.94% to the net charge-off rate for the quarter.
(2)	Total factoring segment non-interest income was $6.4 million and $15.5 million for the three months ended March 31, 2021 and December 31, 2020, respectively.
	March 31, 2021 non-interest income used to calculate yield on average net funds employed excludes a $4.7 million gain on our indemnification asset.
	December 31, 2020 non-interest income used to calculate yield on average net funds employed excludes a gain of $8.9 million related to CVLG’s delivery of proceeds resulting from the liquidation of its acquired stock and a $5.3 million gain on our indemnification asset.

Information pertaining to our payments segment, which includes only our TriumphPay division, summarized as of and for the quarters ended:

	December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020
Factored receivable period end balance	$	153,176,000			$	127,039,000			$	113,985,000			$	89,730,000			$	84,222,000
Interest income	$	4,154,000			$	3,295,000			$	2,675,000			$	1,969,000			$	2,034,000
Noninterest income		3,209,000				3,086,000				1,083,000				73,000				51,000
Total revenue	$	7,363,000			$	6,381,000			$	3,758,000			$	2,042,000			$	2,085,000
Pre-tax operating income (loss)	$	(5,997,000	)		$	(5,184,000	)		$	(7,441,000	)		$	(2,552,000	)		$	(2,026,000	)
Interest expense		94,000				111,000				139,000				167,000				178,000
Depreciation and software amortization expense		57,000				77,000				68,000				65,000				63,000
Intangible amortization expense		1,489,000				1,490,000				497,000				—				—
Earnings (losses) before interest, taxes, depreciation, and amortization	$	(4,357,000	)		$	(3,506,000	)		$	(6,737,000	)		$	(2,320,000	)		$	(1,785,000	)
Transaction costs		—				—				2,992,000				—				—
Adjusted earnings (losses) before interest, taxes, depreciation, and amortization(1)	$	(4,357,000	)		$	(3,506,000	)		$	(3,745,000	)		$	(2,320,000	)		$	(1,785,000	)
Number of invoices processed		4,027,680				3,760,948				3,165,119				2,529,673				1,818,145
Amount of payments processed	$	5,242,051,000			$	4,191,424,000			$	3,426,808,000			$	2,301,632,000			$	1,920,037,000

⁽¹⁾   Adjusted earnings (losses) before interest, taxes, depreciation, and amortization excludes material gains and expenses related to merger and acquisition-related activities and is a non-GAAP financial measure used to provide meaningful supplemental information regarding the segment's operational performance and to enhance investors' overall understanding of such financial performance by removing the volatility associated with certain acquisition-related items that are unrelated to our core business.

Deposits summarized as of:

(Dollars in thousands)	December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020
Non-interest bearing demand	$	1,925,370		$	2,020,984		$	1,803,552		$	1,637,653		$	1,352,785
Interest bearing demand		830,019			795,234			760,874			729,364			688,680
Individual retirement accounts		83,410			86,012			87,052			89,748			92,584
Money market		520,358			472,242			395,035			402,070			393,325
Savings		504,146			483,946			474,163			464,035			421,488
Certificates of deposit		533,206			574,539			612,730			740,694			790,844
Brokered time deposits		40,125			117,064			306,975			516,006			516,786
Other brokered deposits		210,045			272,554			285,069			210,095			460,108
Total deposits	$	4,646,679		$	4,822,575		$	4,725,450		$	4,789,665		$	4,716,600

Net interest margin summarized for the three months ended:

	December 31, 2021									September 30, 2021
(Dollars in thousands)	Average Balance			Interest			Average Rate			Average Balance			Interest			Average Rate
Interest earning assets:
Interest earning cash balances	$	361,059		$	141		0.15	%		$	474,122		$	183		0.15	%
Taxable securities		142,658			1,266		3.52	%			154,017			948		2.44	%
Tax-exempt securities		26,691			172		2.56	%			27,839			178		2.54	%
FHLB and other restricted stock		5,170			25		1.92	%			7,956			28		1.40	%
Loans		4,851,171			106,175		8.68	%			4,777,409			95,398		7.92	%
Total interest earning assets	$	5,386,749		$	107,779		7.94	%		$	5,441,343		$	96,735		7.05	%
Non-interest earning assets:
Other assets		593,013									579,288
Total assets	$	5,979,762								$	6,020,631
Interest bearing liabilities:
Deposits:
Interest bearing demand	$	825,784		$	486		0.23	%		$	779,625		$	435		0.22	%
Individual retirement accounts		84,966			115		0.54	%			86,571			126		0.58	%
Money market		486,939			261		0.21	%			417,435			225		0.21	%
Savings		493,796			190		0.15	%			479,915			185		0.15	%
Certificates of deposit		550,746			647		0.47	%			595,001			725		0.48	%
Brokered time deposits		33,263			9		0.11	%			99,116			29		0.12	%
Other brokered deposits		299,290			199		0.26	%			441,446			223		0.20	%
Total interest bearing deposits		2,774,784			1,907		0.27	%			2,899,109			1,948		0.27	%
Federal Home Loan Bank advances		38,967			24		0.24	%			36,522			22		0.24	%
Subordinated notes		106,847			1,297		4.82	%			114,071			2,449		8.52	%
Junior subordinated debentures		40,530			444		4.35	%			40,390			443		4.35	%
Other borrowings		62,143			50		0.32	%			127,946			102		0.32	%
Total interest bearing liabilities	$	3,023,271		$	3,722		0.49	%		$	3,218,038		$	4,964		0.61	%
Non-interest bearing liabilities and equity:
Non-interest bearing demand deposits		2,022,973									1,912,398
Other liabilities		81,835									72,173
Total equity		851,683									818,022
Total liabilities and equity	$	5,979,762								$	6,020,631
Net interest income				$	104,057								$	91,771
Interest spread							7.45	%								6.44	%
Net interest margin							7.66	%								6.69	%

Loan balance totals include respective nonaccrual assets.
Net interest spread is the yield on average interest earning assets less the rate on interest bearing liabilities.
Net interest margin is the ratio of net interest income to average interest earning assets.
Average rates have been annualized.

Additional information pertaining to our loan portfolio, including loans held for investment and loans held for sale, summarized for the quarters ended:

(Dollars in thousands)	December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020
Average Banking loans	$	3,112,072			$	3,299,152			$	3,516,747			$	3,722,895			$	3,777,553
Average Factoring receivables		1,597,091				1,362,856				1,195,209				1,048,968				1,024,307
Average Payments receivables		142,008				115,401				102,094				76,412				74,947
Average total loans	$	4,851,171			$	4,777,409			$	4,814,050			$	4,848,275			$	4,876,807
Banking yield		5.61	%			5.40	%			5.25	%			5.31	%			5.34	%
Factoring yield		14.42	%			13.75	%			14.99	%			13.85	%			13.80	%
Payments Yield		11.61	%			11.33	%			10.51	%			10.45	%			10.80	%
Total loan yield		8.68	%			7.92	%			7.77	%			7.24	%			7.20	%

Metrics and non-GAAP financial reconciliation:

		As of and for the Three Months Ended																				As of and for the Twelve Months Ended
(Dollars in thousands, except per share amounts)		December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020				December 31, 2021				December 31, 2020
Net income available to common stockholders		$	25,839			$	23,627			$	27,180			$	33,122			$	31,328			$	109,768			$	62,323
Transaction costs			—				—				2,992				—				—				2,992				827
Gain on sale of subsidiary or division			—				—				—				—				—				—				(9,758	)
Tax effect of adjustments			—				—				(715	)			—				—				(715	)			2,254
Adjusted net income available to common stockholders - diluted		$	25,839			$	23,627			$	29,457			$	33,122			$	31,328			$	112,045			$	55,646
Weighted average shares outstanding - diluted			25,390,733				25,227,963				25,209,007				25,170,938				25,053,386				25,252,052				24,615,816
Adjusted diluted earnings per common share		$	1.02			$	0.94			$	1.17			$	1.32			$	1.25			$	4.44			$	2.26
Average total stockholders' equity		$	851,683			$	818,022			$	786,404			$	746,849			$	720,892			$	801,074			$	661,942
Average preferred stock liquidation preference			(45,000	)			(45,000	)			(45,000	)			(45,000	)			(45,000	)			(45,000	)			(24,099	)
Average total common stockholders' equity			806,683				773,022				741,404				701,849				675,892				756,074				637,843
Average goodwill and other intangibles			(278,528	)			(284,970	)			(220,310	)			(188,980	)			(191,017	)			(243,541	)			(190,088	)
Average tangible common stockholders' equity		$	528,155			$	488,052			$	521,094			$	512,869			$	484,875			$	512,533			$	447,755
Net income available to common stockholders		$	25,839			$	23,627			$	27,180			$	33,122			$	31,328			$	109,768			$	62,323
Average tangible common equity			528,155				488,052				521,094				512,869				484,875				512,533				447,755
Return on average tangible common equity			19.41	%			19.21	%			20.92	%			26.19	%			25.70	%			21.42	%			13.92	%
Net interest income		$	104,057			$	91,771			$	90,282			$	83,020			$	83,598			$	369,130			$	284,728
Non-interest income			14,259				12,055				13,896				14,291				22,386				54,501				60,385
Operating revenue			118,316				103,826				104,178				97,311				105,984				423,631				345,113
Gain on sale of subsidiary or division			—				—				—				—				—				—				(9,758	)
Adjusted operating revenue		$	118,316			$	103,826			$	104,178			$	97,311			$	105,984			$	423,631			$	335,355
Non-interest expenses		$	83,004			$	72,813			$	70,798			$	60,892			$	59,298			$	287,507			$	222,074
Transaction costs			—				—				(2,992	)			—				—				(2,992	)			(827	)
Adjusted non-interest expenses		$	83,004			$	72,813			$	67,806			$	60,892			$	59,298			$	284,515			$	221,247
Adjusted efficiency ratio			70.16	%			70.13	%			65.09	%			62.57	%			55.95	%			67.16	%			65.97	%
Adjusted net non-interest expense to average assets ratio:
Non-interest expenses		$	83,004			$	72,813			$	70,798			$	60,892			$	59,298			$	287,507			$	222,074
Transaction costs			—				—				(2,992	)			—				—				(2,992	)			(827	)
Adjusted non-interest expenses		$	83,004			$	72,813			$	67,806			$	60,892			$	59,298			$	284,515			$	221,247
Total non-interest income		$	14,259			$	12,055			$	13,896			$	14,291			$	22,386			$	54,501			$	60,385
Gain on sale of subsidiary or division			—				—				—				—				—				—				(9,758	)
Adjusted non-interest income		$	14,259			$	12,055			$	13,896			$	14,291			$	22,386			$	54,501			$	50,627
Adjusted net non-interest expenses		$	68,745			$	60,758			$	53,910			$	46,601			$	36,912			$	230,014			$	170,620
Average total assets		$	5,979,762			$	6,020,631			$	6,093,805			$	6,013,668			$	5,788,549			$	6,026,819			$	5,426,469
Adjusted net non-interest expense to average assets ratio			4.56	%			4.00	%			3.55	%			3.14	%			2.54	%			3.82	%			3.14	%
Total stockholders' equity		$	858,864			$	820,674			$	792,388			$	764,004			$	726,781			$	858,864			$	726,781
Preferred stock liquidation preference			(45,000	)			(45,000	)			(45,000	)			(45,000	)			(45,000	)			(45,000	)			(45,000	)
Total common stockholders' equity			813,864				775,674				747,388				719,004				681,781				813,864				681,781
Goodwill and other intangibles			(276,856	)			(280,055	)			(286,567	)			(188,006	)			(189,922	)			(276,856	)			(189,922	)
Tangible common stockholders' equity		$	537,008			$	495,619			$	460,821			$	530,998			$	491,859			$	537,008			$	491,859
Common shares outstanding			25,158,879				25,123,342				25,109,703				24,882,929				24,868,218				25,158,879				24,868,218
Tangible book value per share		$	21.34			$	19.73			$	18.35			$	21.34			$	19.78			$	21.34			$	19.78
Total assets at end of period		$	5,956,250			$	6,024,535			$	6,015,877			$	6,099,628			$	5,935,791			$	5,956,250			$	5,935,791
Goodwill and other intangibles			(276,856	)			(280,055	)			(286,567	)			(188,006	)			(189,922	)			(276,856	)			(189,922	)
Tangible assets at period end		$	5,679,394			$	5,744,480			$	5,729,310			$	5,911,622			$	5,745,869			$	5,679,394			$	5,745,869
Tangible common stockholders' equity ratio			9.46	%			8.63	%			8.04	%			8.98	%			8.56	%			9.46	%			8.56	%

1) Triumph uses certain non-GAAP financial measures to provide meaningful supplemental information regarding Triumph's operational performance and to enhance investors' overall understanding of such financial performance. The non-GAAP measures used by Triumph include the following:

• “Adjusted diluted earnings per common share” is defined as adjusted net income available to common stockholders divided by adjusted weighted average diluted common shares outstanding. Excluded from net income available to common stockholders are material gains and expenses related to merger and acquisition-related activities, including divestitures, net of tax. In our judgment, the adjustments made to net income available to common stockholders allow management and investors to better assess our performance in relation to our core net income by removing the volatility associated with certain acquisition-related items and other discrete items that are unrelated to our core business. Weighted average diluted common shares outstanding are adjusted as a result of changes in their dilutive properties given the gain and expense adjustments described herein.
• "Tangible common stockholders' equity" is defined as common stockholders' equity less goodwill and other intangible assets.
• "Total tangible assets" is defined as total assets less goodwill and other intangible assets.
• "Tangible book value per share" is defined as tangible common stockholders' equity divided by total common shares outstanding. This measure is important to investors interested in changes from period-to-period in book value per share exclusive of changes in intangible assets.
• "Tangible common stockholders' equity ratio" is defined as the ratio of tangible common stockholders' equity divided by total tangible assets. We believe that this measure is important to many investors in the marketplace who are interested in relative changes from period-to period in common equity and total assets, each exclusive of changes in intangible assets.
• "Return on Average Tangible Common Equity" is defined as net income available to common stockholders divided by average tangible common stockholders' equity.
• "Adjusted efficiency ratio" is defined as non-interest expenses divided by our operating revenue, which is equal to net interest income plus non-interest income. Also excluded are material gains and expenses related to merger and acquisition-related activities, including divestitures. In our judgment, the adjustments made to operating revenue and non-interest expense allow management and investors to better assess our performance in relation to our core operating revenue by removing the volatility associated with certain acquisition-related items and other discrete items that are unrelated to our core business.
• "Adjusted net non-interest expense to average total assets" is defined as non-interest expenses net of non-interest income divided by total average assets. Excluded are material gains and expenses related to merger and acquisition-related activities, including divestitures. This metric is used by our management to better assess our operating efficiency.

2) Performance ratios include discount accretion on purchased loans for the periods presented as follows:

	For the Three Months Ended															For the Twelve Months Ended
(Dollars in thousands)	December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021			December 31, 2020			December 31, 2021			December 31, 2020
Loan discount accretion	$	1,674		$	1,953		$	2,161		$	3,501		$	2,334		$	9,289		$	10,711

3) Asset quality ratios exclude loans held for sale, except for non-performing assets to total assets.

4) Current quarter ratios are preliminary.

Source: Triumph Bancorp, Inc.

Investor Relations:
Luke Wyse
Senior Vice President, Finance & Investor Relations
lwyse@tbkbank.com
214-365-6936

Media Contact:
Amanda Tavackoli
Senior Vice President, Director of Corporate Communication
atavackoli@tbkbank.com
214-365-6930