• Triumph Bancorp Reports Second Quarter Net Income to Common Stockholders of $27.2 million

    Источник: Nasdaq GlobeNewswire / 21 июл 2021 16:07:01   America/New_York

    DALLAS, July 21, 2021 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (Nasdaq: TBK) (“Triumph” or the “Company”) today announced earnings and operating results for the second 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 Second Quarter Highlights

    • For the second quarter of 2021, net income to common shareholders was $27.2 million, and diluted earnings per share were $1.08.
    • Adjusted diluted earnings per share were $1.17 for the second quarter of 2021, which exclude transaction costs related to the acquisition of HubTran, Inc., net of taxes.
    • Net interest income was $90.3 million.
    • Non-interest income was $13.9 million.
    • Non-interest expense was $70.8 million, including $3.0 million of transaction costs related to the HubTran, Inc. acquisition.
    • Net interest margin was 6.47%. Yield on loans and the average cost of our total deposits were 7.77% and 0.20%, respectively.
    • Credit loss expense for the quarter ended June 30, 2021 was a benefit of $1.8 million primarily due to improvements in our macroeconomic forecasts and changes in the volume and mix of our underlying loan portfolio.
    • Net charge-offs were $0.4 million, or 0.01% of average loans, for the quarter.
    • The total dollar value of invoices purchased by Triumph Business Capital was $3.068 billion with an average invoice size of $2,189. The transportation average invoice size for the quarter was $2,090.
    • TriumphPay processed 3,165,119 invoices paying carriers a total of $3.427 billion.
    • On June 1, 2021, we, through TriumphPay, a division of our wholly-owned subsidiary TBK Bank, SSB, acquired HubTran, Inc., a cloud-based provider of automation software for the transportation industry's back-office, for $97 million in cash. As part of the acquisition, we acquired $27.3 million of intangible assets and $73.7 million of goodwill.

    Balance Sheet

    Total loans held for investment decreased $253.3 million, or 5.0%, during the second quarter to $4.831 billion at June 30, 2021. Average loans held for investment for the quarter decreased $35.5 million, or 0.7%, to $4.799 billion.

    Total deposits were $4.725 billion at June 30, 2021, a decrease of $64.2 million, or 1.3%, in the second quarter of 2021. Non-interest-bearing deposits accounted for 38% of total deposits and non-time deposits accounted for 79% of total deposits at June 30, 2021.

    Asset Quality and Allowance for Credit Loss

    Our nonperforming assets ratio at June 30, 2021 was 0.97%. Approximately 2 basis points of this ratio at June 30, 2021 consisted of $1.5 million of the acquired Over-Formula Advance portfolio which represents the portion that is not covered by CVLG's indemnification. An additional 32 basis points of this ratio at June 30, 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 June 30, 2021 was 2.28%. Approximately 21 basis points of this ratio at June 30, 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 June 30, 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 0.95% at June 30, 2021.

    CARES Act and Paycheck Protection Program

    As of June 30, 2021, our balance sheet reflected deferrals on outstanding loan balances of $53.7 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 June 30, 2021, these deferred balances carried accrued interest of $0.2 million.

    As of June 30, 2021, we carried 1,390 PPP loans representing a balance of $135.3 million classified as commercial loans. We recognized $1.8 million in fees from the SBA on PPP loans during the three months ended June 30, 2021 and carry $5.2 million of deferred fees on PPP loans at quarter end. The remaining fees will be amortized over the respective lives 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 June 30, 2021.

    At June 30, 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 approximately $5 million.

    As of June 30, 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 also filed a declaratory judgment action in United States Federal District Court for the Southern District of Florida 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 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 June 30, 2021. The full amount of such receivable is reflected in non-performing and past due factored receivables as of June 30, 2021 in accordance with our policy. As of June 30, 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 Bryce Fowler, CFO will review the quarterly results in a conference call for investors and analysts beginning at 7:00 a.m. Central Time on Thursday, July 22, 2021. Todd Ritterbusch, Chief Lending Officer, will also be available for questions.

    To participate in the live conference call, please dial 1-855-940-9472 (Canada: 1-855-669-9657) and request to be joined into the Triumph Bancorp, Inc. call.  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/tbk210722.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.  Triumph offers a diversified line of banking, payments, and factoring services products through its bank subsidiary, TBK Bank, SSB. 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 Six Months Ended
    (Dollars in thousands)June 30,
    2021    		 March 31,
    2021    		 December 31,
    2020    		 September 30,
    2020    		 June 30,
    2020    		 June 30,
    2021    		 June 30,
    2020
    Financial Highlights:             
    Total assets$6,015,877  $6,099,628  $5,935,791  $5,836,787  $5,617,493  $6,015,877  $5,617,493 
    Loans held for investment$4,831,215  $5,084,512  $4,996,776  $4,852,911  $4,393,311  $4,831,215  $4,393,311 
    Deposits$4,725,450  $4,789,665  $4,716,600  $4,248,101  $4,062,332  $4,725,450  $4,062,332 
    Net income available to common stockholders$27,180  $33,122  $31,328  $22,005  $13,440  $60,302  $8,990 
                  
    Performance Ratios - Annualized:             
    Return on average assets1.84% 2.29% 2.21% 1.65% 0.99% 2.06% 0.35%
    Return on average total equity14.27% 18.42% 17.73% 13.24% 8.86% 16.28% 2.92%
    Return on average common equity14.70% 19.14% 18.44% 13.61% 8.94% 16.85% 2.94%
    Return on average tangible common equity (1)20.92% 26.19% 25.70% 19.43% 12.96% 23.52% 4.23%
    Yield on loans(2)7.77% 7.24% 7.20% 7.05% 6.52% 7.51% 6.85%
    Cost of interest bearing deposits0.31% 0.41% 0.54% 0.79% 1.08% 0.36% 1.21%
    Cost of total deposits0.20% 0.28% 0.38% 0.56% 0.79% 0.24% 0.92%
    Cost of total funds0.34% 0.42% 0.51% 0.67% 0.85% 0.38% 1.03%
    Net interest margin(2)6.47% 6.06% 6.20% 5.83% 5.11% 6.27% 5.36%
    Net non-interest expense to average assets3.75% 3.14% 2.54% 3.23% 2.40% 3.45% 3.09%
    Adjusted net non-interest expense to average assets (1)3.55% 3.14% 2.54% 3.17% 3.11% 3.35% 3.47%
    Efficiency ratio67.96% 62.57% 55.95% 65.15% 62.56% 65.36% 69.68%
    Adjusted efficiency ratio (1)65.09% 62.57% 55.95% 64.18% 70.75% 63.87% 74.38%
                  
    Asset Quality:(3)             
    Past due to total loans2.28% 1.96% 3.22% 2.40% 1.50% 2.28% 1.50%
    Non-performing loans to total loans1.06% 1.17% 1.16% 1.17% 1.27% 1.06% 1.27%
    Non-performing assets to total assets0.97% 1.15% 1.15% 1.52% 1.20% 0.97% 1.20%
    ACL to non-performing loans88.92% 80.87% 164.98% 159.67% 97.66% 88.92% 97.66%
    ACL to total loans0.95% 0.94% 1.92% 1.88% 1.24% 0.95% 1.24%
    Net charge-offs to average loans0.01% 0.85% 0.03% 0.02% 0.02% 0.86% 0.06%
                  
    Capital:             
    Tier 1 capital to average assets(4)9.73% 10.89% 10.80% 10.75% 9.98% 9.73% 9.98%
    Tier 1 capital to risk-weighted assets(4)10.33% 11.28% 10.60% 10.32% 10.57% 10.33% 10.57%
    Common equity tier 1 capital to risk-weighted assets(4)8.74% 9.72% 9.05% 8.72% 8.84% 8.74% 8.84%
    Total capital to risk-weighted assets12.65% 13.58% 13.03% 12.94% 13.44% 12.65% 13.44%
    Total equity to total assets13.17% 12.53% 12.24% 11.89% 11.69% 13.17% 11.69%
    Tangible common stockholders' equity to tangible assets(1)8.04% 8.98% 8.56% 8.09% 7.84% 8.04% 7.84%
                  
    Per Share Amounts:             
    Book value per share$29.76  $28.90  $27.42  $26.11  $25.28  $29.76  $25.28 
    Tangible book value per share (1)$18.35  $21.34  $19.78  $18.38  $17.59  $18.35  $17.59 
    Basic earnings (loss) per common share$1.10  $1.34  $1.27  $0.89  $0.56  $2.44  $0.37 
    Diluted earnings (loss) per common share$1.08  $1.32  $1.25  $0.89  $0.56  $2.39  $0.37 
    Adjusted diluted earnings per common share(1)$1.17  $1.32  $1.25  $0.91  $0.25  $2.48  $0.07 
    Shares outstanding end of period25,109,703  24,882,929  24,868,218  24,851,601  24,202,686  25,109,703  24,202,686 
                         

    Unaudited consolidated balance sheet as of:

    (Dollars in thousands)June 30,
    2021    		 March 31,
    2021    		 December 31,
    2020    		 September 30,
    2020    		 June 30,
    2020
    ASSETS         
    Total cash and cash equivalents$444,439  $380,811  $314,393  $288,278  $437,064 
    Securities - available for sale193,627  205,330  224,310  242,802  331,126 
    Securities - held to maturity, net5,658  5,828  5,919  6,096  6,285 
    Equity securities5,854  5,826  5,826  6,040  6,411 
    Loans held for sale31,136  22,663  24,546  36,716  50,382 
    Loans held for investment4,831,215  5,084,512  4,996,776  4,852,911  4,393,311 
    Allowance for credit losses(45,694) (48,024) (95,739) (90,995) (54,613)
    Loans, net4,785,521  5,036,488  4,901,037  4,761,916  4,338,698 
    FHLB and other restricted stock8,096  9,807  6,751  18,464  26,345 
    Premises and equipment, net106,720  105,390  103,404  105,455  107,736 
    Other real estate owned ("OREO"), net1,013  1,421  1,432  1,704  1,962 
    Goodwill and intangible assets, net286,567  188,006  189,922  192,041  186,162 
    Bank-owned life insurance41,912  41,805  41,608  41,440  41,298 
    Deferred tax asset, net—  1,260  6,427  7,716  8,544 
    Indemnification asset5,246  5,246  36,225  31,218  — 
    Other assets100,088  89,747  73,991  96,901  75,480 
    Total assets$6,015,877  $6,099,628  $5,935,791  $5,836,787  $5,617,493 
    LIABILITIES         
    Non-interest bearing deposits$1,803,552  $1,637,653  $1,352,785  $1,315,900  $1,120,949 
    Interest bearing deposits2,921,898  3,152,012  3,363,815  2,932,201  2,941,383 
    Total deposits4,725,450  4,789,665  4,716,600  4,248,101  4,062,332 
    Customer repurchase agreements9,243  2,668  3,099  14,192  6,732 
    Federal Home Loan Bank advances130,000  180,000  105,000  435,000  455,000 
    Payment Protection Program Liquidity Facility139,673  158,796  191,860  223,713  223,809 
    Subordinated notes87,620  87,564  87,509  87,455  87,402 
    Junior subordinated debentures40,333  40,201  40,072  39,944  39,816 
    Deferred tax liability, net3,333  —  —  —  — 
    Other liabilities87,837  76,730  64,870  94,540  85,531 
    Total liabilities5,223,489  5,335,624  5,209,010  5,142,945  4,960,622 
    EQUITY         
    Preferred Stock45,000  45,000  45,000  45,000  45,000 
    Common stock282  280  280  279  273 
    Additional paid-in-capital494,224  490,699  489,151  488,094  472,795 
    Treasury stock, at cost(104,486) (103,059) (103,052) (102,942) (102,888)
    Retained earnings349,885  322,705  289,583  258,254  236,249 
    Accumulated other comprehensive income (loss)7,483  8,379  5,819  5,157  5,442 
    Total stockholders' equity792,388  764,004  726,781  693,842  656,871 
    Total liabilities and equity$6,015,877  $6,099,628  $5,935,791  $5,836,787  $5,617,493 
                        

    Unaudited consolidated statement of income:

     For the Three Months Ended For the Six Months Ended
    (Dollars in thousands)June 30,
    2021    		 March 31,
    2021    		 December 31,
    2020    		 September 30,
    2020    		 June 30,
    2020    		 June 30,
    2021    		 June 30,
    2020
    Interest income:             
    Loans, including fees$45,988  $48,706  $50,723  $48,774  $50,394  $94,694  $98,717 
    Factored receivables, including fees47,328  37,795  37,573  31,468  21,101  85,123  45,393 
    Securities1,187  1,650  1,519  1,927  2,676  2,837  4,783 
    FHLB and other restricted stock27  76  56  122  148  103  352 
    Cash deposits158  126  68  73  79  284  567 
    Total interest income94,688  88,353  89,939  82,364  74,398  183,041  149,812 
    Interest expense:             
    Deposits2,470  3,372  4,308  5,834  7,584  5,842  17,261 
    Subordinated notes1,350  1,349  1,347  1,348  1,321  2,699  2,668 
    Junior subordinated debentures446  442  452  462  554  888  1,200 
    Other borrowings140  170  234  341  688  310  1,932 
    Total interest expense4,406  5,333  6,341  7,985  10,147  9,739  23,061 
    Net interest income90,282  83,020  83,598  74,379  64,251  173,302  126,751 
    Credit loss expense (benefit)(1,806) (7,845) 4,680  (258) 13,609  (9,651) 33,907 
    Net interest income after credit loss expense (benefit)92,088  90,865  78,918  74,637  50,642  182,953  92,844 
    Non-interest income:             
    Service charges on deposits1,857  1,787  1,643  1,470  573  3,644  2,161 
    Card income2,225  1,972  1,949  2,091  1,941  4,197  3,741 
    Net OREO gains (losses) and valuation adjustments(287) (80) (217) (41) (101) (367) (358)
    Net gains (losses) on sale of securities1  —  16  3,109  63  1  101 
    Fee income4,470  2,249  1,615  1,402  1,304  6,719  2,990 
    Insurance commissions1,272  1,486  1,327  990  864  2,758  1,915 
    Gain on sale of subsidiary—  —  —  —  9,758  —  9,758 
    Other4,358  6,877  16,053  1,472  5,627  11,235  7,198 
    Total non-interest income13,896  14,291  22,386  10,493  20,029  28,187  27,506 
    Non-interest expense:             
    Salaries and employee benefits41,658  35,980  33,798  31,651  30,804  77,638  61,526 
    Occupancy, furniture and equipment6,112  5,779  7,046  5,574  4,964  11,891  10,146 
    FDIC insurance and other regulatory assessments500  977  350  360  495  1,477  810 
    Professional fees5,052  2,545  2,326  3,265  1,651  7,597  3,758 
    Amortization of intangible assets2,428  1,975  2,065  2,141  2,046  4,403  4,124 
    Advertising and promotion1,241  890  1,170  1,105  1,151  2,131  2,443 
    Communications and technology6,028  5,900  5,639  5,569  5,444  11,928  10,945 
    Other7,779  6,846  6,904  5,632  6,171  14,625  13,727 
    Total non-interest expense70,798  60,892  59,298  55,297  52,726  131,690  107,479 
    Net income before income tax35,186  44,264  42,006  29,833  17,945  79,450  12,871 
    Income tax expense7,204  10,341  9,876  6,929  4,505  17,545  3,881 
    Net income$27,982  $33,923  $32,130  $22,904  $13,440  $61,905  $8,990 
    Dividends on preferred stock(802) (801) (802) (899) —  (1,603) — 
    Net income available to common stockholders$27,180  $33,122  $31,328  $22,005  $13,440  $60,302  $8,990 
                                

    Earnings per share:

     For the Three Months Ended Six Months Ended June 30,
    (Dollars in thousands)June 30,
    2021    		 March 31,
    2021    		 December 31,
    2020    		 September 30,
    2020    		 June 30,
    2020    		 June 30,
    2021    		 June 30,
    2020
    Basic             
    Net income to common stockholders$27,180 $33,122 $31,328 $22,005 $13,440 $60,302 $8,990
    Weighted average common shares outstanding24,724,128 24,675,109 24,653,099 24,592,092 23,987,049 24,699,754 24,150,689
    Basic earnings per common share$1.10 $1.34 $1.27 $0.89 $0.56 $2.44 $0.37
                  
    Diluted             
    Net income to common stockholders - diluted$27,180 $33,122 $31,328 $22,005 $13,440 $60,302 $8,990
    Weighted average common shares outstanding24,724,128 24,675,109 24,653,099 24,592,092 23,987,049 24,699,754 24,150,689
    Dilutive effects of:             
    Assumed exercises of stock options134,358 130,016 101,664 48,102 38,627 133,219 55,753
    Restricted stock awards139,345 169,514 136,239 67,907 37,751 156,029 66,364
    Restricted stock units73,155 66,714 50,156 18,192 4,689 70,236 13,255
    Performance stock units - market based134,313 128,167 112,228 76,095 6,326 131,240 8,446
    Performance stock units - performance based— — — — — — —
    Employee stock purchase plan3,708 1,418 — — — 2,563 —
    Weighted average shares outstanding - diluted25,209,007 25,170,938 25,053,386 24,802,388 24,074,442 25,193,041 24,294,507
    Diluted earnings per common share$1.08 $1.32 $1.25 $0.89 $0.56 $2.39 $0.37
                         

    Shares that were not considered in computing diluted earnings per common share because they were antidilutive are as follows:

     For the Three Months Ended Six Months Ended June 30,
     June 30,
    2021    		 March 31,
    2021    		 December 31,
    2020    		 September 30,
    2020    		 June 30,
    2020    		 June 30,
    2021    		 June 30,
    2020
    Stock options16,939 — — 98,513 148,528 16,939 98,956
    Restricted stock awards— — — — 109,834 209,040 —
    Restricted stock units— — — — 38,801 17,757 —
    Performance stock units - market based13,520 — — — 76,461 13,520 76,461
    Performance stock units - performance based265,625 256,625 256,625 261,125 262,625 265,625 262,625
    Employee stock purchase plan— — — — — — —
                  

    Loans held for investment summarized as of:

    (Dollars in thousands)June 30,
    2021    		 March 31,
    2021    		 December 31,
    2020    		 September 30,
    2020    		 June 30,
    2020
    Commercial real estate$701,576 $784,110 $779,158 $762,531 $910,261
    Construction, land development, land185,444 223,841 219,647 244,512 213,617
    1-4 family residential properties135,288 142,859 157,147 164,785 168,707
    Farmland91,122 97,835 103,685 110,966 125,259
    Commercial1,453,583 1,581,125 1,562,957 1,536,903 1,518,656
    Factored receivables1,398,299 1,208,718 1,120,770 1,016,337 561,576
    Consumer12,389 14,332 15,838 17,106 18,450
    Mortgage warehouse853,514 1,031,692 1,037,574 999,771 876,785
    Total loans$4,831,215 $5,084,512 $4,996,776 $4,852,911 $4,393,311
                   

    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)June 30,
    2021    		 March 31,
    2021    		 December 31,
    2020    		 September 30,
    2020    		 June 30,
    2020
    Commercial real estate$701,576 $784,110 $779,158 $762,531 $910,261
    Construction, land development, land185,444 223,841 219,647 244,512 213,617
    1-4 family residential135,288 142,859 157,147 164,785 168,707
    Farmland91,122 97,835 103,685 110,966 125,259
    Commercial - General290,562 288,458 340,850 342,858 333,793
    Commercial - Paycheck Protection Program135,307 237,299 189,857 223,230 219,122
    Commercial - Agriculture76,346 83,859 94,572 112,221 110,243
    Commercial - Equipment604,396 623,248 573,163 509,849 487,145
    Commercial - Asset-based lending181,394 188,825 180,488 160,711 176,235
    Commercial - Liquid Credit165,578 159,436 184,027 188,034 192,118
    Consumer12,389 14,332 15,838 17,106 18,450
    Mortgage Warehouse853,514 1,031,692 1,037,574 999,771 876,785
    Total banking loans held for investment$3,432,916 $3,875,794 $3,876,006 $3,836,574 $3,831,735
                   

    The following table presents the Company’s operating segments:

    (Dollars in thousands)          
    Three months ended June 30, 2021 Banking Factoring Payments Corporate Consolidated
    Total interest income $47,356  $44,653  $2,675  $4  $94,688 
    Intersegment interest allocations 2,723  (2,584) (139) —  — 
    Total interest expense 2,610  —  —  1,796  4,406 
    Net interest income (expense) 47,469  42,069  2,536  (1,792) 90,282 
    Credit loss expense (benefit) (4,335) 2,444  218  (133) (1,806)
    Net interest income after credit loss expense 51,804  39,625  2,318  (1,659) 92,088 
    Noninterest income 10,018  2,742  1,083  53  13,896 
    Noninterest expense 41,860  17,174  10,842  922  70,798 
    Operating income (loss) $19,962  $25,193  $(7,441) $(2,528) $35,186 


    (Dollars in thousands)          
    Three months ended March 31, 2021 Banking Factoring Payments Corporate Consolidated
    Total interest income $50,556  $35,824  $1,969  $4  $88,353 
    Intersegment interest allocations 2,942  (2,775) (167) —  — 
    Total interest expense 3,542  —  —  1,791  5,333 
    Net interest income (expense) 49,956  33,049  1,802  (1,787) 83,020 
    Credit loss expense (benefit) (12,453) 4,483  292  (167) (7,845)
    Net interest income after credit loss expense 62,409  28,566  1,510  (1,620) 90,865 
    Noninterest income 7,750  6,411  73  57  14,291 
    Noninterest expense 39,454  16,153  4,135  1,150  60,892 
    Operating income (loss) $30,705  $18,824  $(2,552) $(2,713) $44,264 

    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:

     June 30,
    2021    		 March 31,
    2021    		 December 31,
    2020    		 September 30,
    2020    		 June 30,
    2020
    Factored receivable period end balance$1,284,314,000  $1,118,988,000  $1,036,548,000  $953,434,000  $531,933,000 
    Yield on average receivable balance14.99% 13.85% 13.80% 15.59% 15.34%
    Current quarter charge-off rate(1)0.04% 3.95% 0.02% 0.09% 0.16%
    Factored receivables - transportation concentration91% 90% 89% 88% 85%
              
    Interest income, including fees$44,653,000  $35,824,000  $35,439,000  $30,068,000  $20,387,000 
    Non-interest income(2)2,742,000  1,757,000  1,358,000  1,157,000  1,072,000 
    Factored receivable total revenue47,395,000  37,581,000  36,797,000  31,225,000  21,459,000 
    Average net funds employed1,072,405,000  936,528,000  924,899,000  694,170,000  477,112,000 
    Yield on average net funds employed17.73% 16.27% 15.83% 17.89% 18.09%
              
    Accounts receivable purchased$3,068,262,000  $2,492,468,000  $2,461,249,000  $1,984,490,000  $1,238,465,000 
    Number of invoices purchased1,401,695  1,188,678  1,189,271  1,027,839  812,902 
    Average invoice size$2,189  $2,097  $2,070  $1,931  $1,524 
    Average invoice size - transportation$2,090  $1,974  $1,943  $1,787  $1,378 
    Average invoice size - non-transportation$4,701  $4,775  $5,091  $5,181  $4,486 


    (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, $15.5 million, and $3.2 million for the three months ended March 31, 2021, December 31, 2020 and September 30, 2020.

    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. 

    September 30, 2020 non-interest income used to calculate yield on average net funds employed excludes a $2.0 million gain recognized on the increased value of the receivable due from CVLG resulting from the amended TFS acquisition agreement.

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

     June 30,
    2021    		 March 31,
    2021    		 December 31,
    2020    		 September 30,
    2020    		 June 30,
    2020
    Factored receivable period end balance$113,985,000  $89,730,000  $84,222,000  $62,903,000  $29,643,000 
              
    Interest income$2,675,000  $1,969,000  $2,034,000  $1,361,000  $692,000 
    Noninterest income1,083,000  73,000  51,000  47,000  12,000 
    Total revenue$3,758,000  $2,042,000  $2,085,000  $1,408,000  $704,000 
              
    Pre-tax operating income (loss)$(7,441,000) $(2,552,000) $(2,026,000) $(1,936,000) $(2,823,000)
    Interest expense139,000  167,000  178,000  147,000  88,000 
    Depreciation and software amortization expense68,000  65,000  63,000  63,000  63,000 
    Intangible amortization expense497,000  —  —  —  — 
    Earnings (losses) before interest, taxes, depreciation, and amortization$(6,737,000) $(2,320,000) $(1,785,000) $(1,726,000) $(2,672,000)
    Transaction costs2,992,000  —  —  —  — 
    Adjusted earnings (losses) before interest, taxes, depreciation, and amortization(1)$(3,745,000) $(2,320,000) $(1,785,000) $(1,726,000) $(2,672,000)
              
    Number of invoices processed3,165,119  2,529,673  1,818,145  1,408,232  767,180 
    Amount of payments processed$3,426,808,000  $2,301,632,000  $1,920,037,000  $1,221,305,000  $667,354,000 


    (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)June 30,
    2021    		 March 31,
    2021    		 December 31,
    2020    		 September 30,
    2020    		 June 30,
    2020
    Non-interest bearing demand$1,803,552 $1,637,653 $1,352,785 $1,315,900 $1,120,949
    Interest bearing demand760,874 729,364 688,680 634,272 648,309
    Individual retirement accounts87,052 89,748 92,584 94,933 97,388
    Money market395,035 402,070 393,325 384,476 397,914
    Savings474,163 464,035 421,488 405,954 391,624
    Certificates of deposit612,730 740,694 790,844 857,514 937,766
    Brokered time deposits306,975 516,006 516,786 344,986 258,378
    Other brokered deposits285,069 210,095 460,108 210,066 210,004
    Total deposits$4,725,450 $4,789,665 $4,716,600 $4,248,101 $4,062,332
                   

    Net interest margin summarized for the three months ended:

     June 30, 2021 March 31, 2021
    (Dollars in thousands)Average
    Balance    		 Interest Average
    Rate    		 Average
    Balance    		 Interest Average
    Rate
    Interest earning assets:           
    Interest earning cash balances$572,485 $158 0.11% $478,275 $126 0.11%
    Taxable securities165,786 967 2.34% 189,407 1,428 3.06%
    Tax-exempt securities33,451 220 2.64% 34,717 222 2.59%
    FHLB and other restricted stock9,518 27 1.14% 8,511 76 3.62%
    Loans4,814,050 93,316 7.77% 4,848,275 86,501 7.24%
    Total interest earning assets$5,595,290 $94,688 6.79% $5,559,185 $88,353 6.45%
    Non-interest earning assets:           
    Other assets498,515     454,483    
    Total assets$6,093,805     $6,013,668    
    Interest bearing liabilities:           
    Deposits:           
    Interest bearing demand$757,529 $469 0.25% $701,759 $384 0.22%
    Individual retirement accounts88,142 143 0.65% 91,074 186 0.83%
    Money market398,290 216 0.22% 398,015 229 0.23%
    Savings468,517 178 0.15% 446,322 167 0.15%
    Certificates of deposit664,478 1,157 0.70% 765,244 1,955 1.04%
    Brokered time deposits138,102 51 0.15% 167,881 179 0.43%
    Other brokered deposits685,397 256 0.15% 803,009 272 0.14%
    Total interest bearing deposits3,200,455 2,470 0.31% 3,373,304 3,372 0.41%
    Federal Home Loan Bank advances39,341 22 0.22% 35,833 24 0.27%
    Subordinated notes87,590 1,350 6.18% 87,532 1,349 6.25%
    Junior subordinated debentures40,251 446 4.44% 40,125 442 4.47%
    Other borrowings138,649 118 0.34% 171,902 146 0.34%
    Total interest bearing liabilities$3,506,286 $4,406 0.50% $3,708,696 $5,333 0.58%
    Non-interest bearing liabilities and equity:           
    Non-interest bearing demand deposits1,749,858     1,494,001    
    Other liabilities51,257     64,122    
    Total equity786,404     746,849    
    Total liabilities and equity$6,093,805     $6,013,668    
    Net interest income  $90,282     $83,020  
    Interest spread    6.29%     5.87%
    Net interest margin    6.47%     6.06%
                  

    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)June 30,
    2021    		 March 31,
    2021    		 December 31,
    2020    		 September 30,
    2020    		 June 30,
    2020
    Average Banking loans$3,516,747  $3,722,895  $3,777,553  $3,707,293  $3,846,994 
    Average Factoring receivables1,195,209  1,048,968  1,024,307  768,087  534,943 
    Average Payments receivables102,094  76,412  74,947  50,683  27,738 
    Average total loans$4,814,050  $4,848,275  $4,876,807  $4,526,063  $4,409,675 
    Banking yield5.25% 5.31% 5.34% 5.23% 5.27%
    Factoring yield14.99% 13.85% 13.80% 15.59% 15.34%
    Payments Yield10.51% 10.45% 10.80% 10.68% 10.03%
    Total loan yield7.77% 7.24% 7.20% 7.05% 6.52%
                   

    Metrics and non-GAAP financial reconciliation:

      As of and for the Three Months Ended As of and for the Six Months Ended
    (Dollars in thousands,
    except per share amounts)    		 June 30,
    2021    		 March 31,
    2021    		 December 31,
    2020    		 September 30,
    2020    		 June 30,
    2020    		 June 30,
    2021    		 June 30,
    2020
    Net income available to common stockholders $27,180   $33,122   $31,328   $22,005   $13,440   $60,302   $8,990  
    Transaction costs 2,992   —   —   827   —   2,992   —  
    Gain on sale of subsidiary or division —   —   —   —   (9,758)  —   (9,758) 
    Tax effect of adjustments (715)  —   —   (197)  2,451   (715)  2,451  
    Adjusted net income available to common stockholders - diluted $29,457   $33,122   $31,328   $22,635   $6,133   $62,579   $1,683  
                   
    Weighted average shares outstanding - diluted 25,209,007   25,170,938   25,053,386   24,802,388   24,074,442   25,193,041   24,294,507  
    Adjusted diluted earnings per common share $1.17   $1.32   $1.25   $0.91   $0.25   $2.48   $0.07  
                   
    Average total stockholders' equity $786,404   $746,849   $720,892   $688,327   $610,258   $766,736   $618,808  
    Average preferred stock liquidation preference (45,000)  (45,000)  (45,000)  (45,000)  (5,934)  (45,000)  (2,967) 
    Average total common stockholders' equity 741,404   701,849   675,892   643,327   604,324   721,736   615,841  
    Average goodwill and other intangibles (220,310)  (188,980)  (191,017)  (192,682)  (187,255)  (204,732)  (188,307) 
    Average tangible common stockholders' equity $521,094   $512,869   $484,875   $450,645   $417,069   $517,004   $427,534  
                   
    Net income available to common stockholders $27,180   $33,122   $31,328   $22,005   $13,440   $60,302   $8,990  
    Average tangible common equity 521,094   512,869   484,875   450,645   417,069   517,004   427,534  
    Return on average tangible common equity 20.92 % 26.19 % 25.70 % 19.43 % 12.96 % 23.52 % 4.23 %
                   
    Net interest income $90,282   $83,020   $83,598   $74,379   $64,251   $173,302   $126,751  
    Non-interest income 13,896   14,291   22,386   10,493   20,029   28,187   27,506  
    Operating revenue 104,178   97,311   105,984   84,872   84,280   201,489   154,257  
    Gain on sale of subsidiary or division —   —   —   —   (9,758)  —   (9,758) 
    Adjusted operating revenue $104,178   $97,311   $105,984   $84,872   $74,522   $201,489   $144,499  
    Non-interest expenses $70,798   $60,892   $59,298   $55,297   $52,726   $131,690   $107,479  
    Transaction costs (2,992)  —   —   (827)  —   (2,992)  —  
    Adjusted non-interest expenses $67,806   $60,892   $59,298   $54,470   $52,726   $128,698   $107,479  
    Adjusted efficiency ratio 65.09 % 62.57 % 55.95 % 64.18 % 70.75 % 63.87 % 74.38 %
                   
    Adjusted net non-interest expense to average assets ratio:              
    Non-interest expenses $70,798   $60,892   $59,298   $55,297   $52,726   $131,690   $107,479  
    Transaction costs (2,992)  —   —   (827)  —   (2,992)  —  
    Adjusted non-interest expenses $67,806   $60,892   $59,298   $54,470   $52,726   $128,698   $107,479  
    Total non-interest income $13,896   $14,291   $22,386   $10,493   $20,029   $28,187   $27,506  
    Gain on sale of subsidiary or division —   —   —   —   (9,758)  —   (9,758) 
    Adjusted non-interest income $13,896   $14,291   $22,386   $10,493   $10,271   $28,187   $17,748  
    Adjusted net non-interest expenses $53,910   $46,601   $36,912   $43,977   $42,455   $100,511   $89,731  
    Average total assets $6,093,805   $6,013,668   $5,788,549   $5,518,708   $5,487,072   $6,053,826   $5,196,815  
    Adjusted net non-interest expense to average assets ratio 3.55 % 3.14 % 2.54 % 3.17 % 3.11 % 3.35 % 3.47 %
                   
    Total stockholders' equity $792,388   $764,004   $726,781   $693,842   $656,871   $792,388   $656,871  
    Preferred stock liquidation preference (45,000)  (45,000)  (45,000)  (45,000)  (45,000)  (45,000)  (45,000) 
    Total common stockholders' equity 747,388   719,004   681,781   648,842   611,871   747,388   611,871  
    Goodwill and other intangibles (286,567)  (188,006)  (189,922)  (192,041)  (186,162)  (286,567)  (186,162) 
    Tangible common stockholders' equity $460,821   $530,998   $491,859   $456,801   $425,709   $460,821   $425,709  
    Common shares outstanding 25,109,703   24,882,929   24,868,218   24,851,601   24,202,686   25,109,703   24,202,686  
    Tangible book value per share $18.35   $21.34   $19.78   $18.38   $17.59   $18.35   $17.59  
                   
    Total assets at end of period $6,015,877   $6,099,628   $5,935,791   $5,836,787   $5,617,493   $6,015,877   $5,617,493  
    Goodwill and other intangibles (286,567)  (188,006)  (189,922)  (192,041)  (186,162)  (286,567)  (186,162) 
    Tangible assets at period end $5,729,310   $5,911,622   $5,745,869   $5,644,746   $5,431,331   $5,729,310   $5,431,331  
    Tangible common stockholders' equity ratio 8.04 % 8.98 % 8.56 % 8.09 % 7.84 % 8.04 % 7.84 %
                                 

    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 Six Months Ended
    (Dollars in thousands)June 30,
    2021    		 March 31,
    2021    		 December 31,
    2020    		 September 30,
    2020    		 June 30,
    2020    		 June 30,
    2021    		 June 30,
    2020
    Loan discount accretion$2,161 $3,501 $2,334 $4,104 $2,139 $5,662 $4,273
                         

    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


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