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CST: 20/08/2019 02:30:58   

Triumph Bancorp Reports Fourth Quarter Net Income to Common Stockholders of $18.1 Million

209 Days ago

DALLAS, Jan. 22, 2019 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (Nasdaq: TBK) (“Triumph”) today announced earnings and operating results for the fourth quarter of 2018.

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.

2018 Fourth Quarter Highlights and Recent Developments

  • For the fourth quarter of 2018, net income available to common stockholders was $18.1 million. Diluted earnings per share were $0.67. 
      
  • Net interest margin (“NIM”) was 6.34% for the quarter ended December 31, 2018. 
      
  • Total loans held for investment increased $96.5 million, or 2.7%, to $3.609 billion at December 31, 2018. Average loans for the quarter increased $238.8 million, or 7.2%, to $3.532 billion.
      
  • Triumph Business Capital grew period-end clients to 6,191 clients which is an increase of 259 clients, or 4.4%. The total dollar value of invoices purchased for the quarter ended December 31, 2018 was $1.541 billion with an average invoice price of $1,747.
       
  • At December 31, 2018, there were 113 clients utilizing the TriumphPay platform. For the quarter ended December 31, 2018, TriumphPay processed 83,326 invoices paying 19,274 distinct carriers a total of $123.1 million.

Balance Sheet

Total loans held for investment were $3.609 billion at December 31, 2018. Our commercial finance loans, which comprise 35% of the loan portfolio, were $1.256 billion at December 31, 2018, compared to $1.284 billion at September 30, 2018, a decrease of $27.3 million, or 2.1% in the fourth quarter of 2018. The decrease in commercial finance was primarily a result of our efforts to decrease the overall risk profile of our asset based lending portfolio.

Total deposits were $3.450 billion at December 31, 2018, an increase of $11.3 million or 0.3% in the fourth quarter of 2018.  Non-interest-bearing deposits accounted for 21% of total deposits and non-time deposits accounted for 62% of total deposits at December 31, 2018. 

On October 26, 2018, our preferred shareholders converted all remaining preferred stock to 670,236 shares of common stock.

Net Interest Income

We earned net interest income for the quarter ended December 31, 2018 of $64.9 million compared to $61.8 million for the quarter ended September 30, 2018.

Yields on loans for the quarter ended December 31, 2018 were down 19 bps from the prior quarter to 8.14%. The average cost of our total deposits was 0.91% for the quarter ended December 31, 2018 compared to 0.85% for the quarter ended September 30, 2018, on an annualized basis. 

Asset Quality

Non-performing assets decreased 9 bps from September 30, 2018 to 0.84% of total assets at December 31, 2018.  The ratio of past due to total loans increased to 2.41% at December 31, 2018 from 2.23% at September 30, 2018. We recorded total net charge-offs of $1.6 million, or 0.05% of average loans, for the quarter ended December 31, 2018 compared to net charge-offs of $4.1 million, or 0.12% of average loans, for the quarter ended September 30, 2018. 

We recorded a provision for loan losses of $1.9 million for the quarter ended December 31, 2018 compared to a provision of $6.8 million for the quarter ended September 30, 2018. From September 30, 2018 to December 31, 2018, our ALLL increased from $27.3 million or 0.78% of total loans to $27.6 million or 0.76% of total loans. 

Non-Interest Income and Expense

We earned non-interest income for the quarter ended December 31, 2018 of $6.8 million compared to $6.1 million for the quarter ended September 30, 2018.

For the quarter ended December 31, 2018, non-interest expense totaled $47.0 million, compared to $48.9 million for the quarter ended September 30, 2018. Non-interest expense for the quarter ended September 30, 2018 included transaction costs related to the First Bancorp of Durango, Inc. and Southern Colorado Corp. acquisitions of $5.9 million.

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 Wednesday, January 23, 2019. Dan Karas, 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/tbk190123.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 community banking and commercial finance 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; our ability to mitigate our risk exposures; our ability to maintain our historical earnings trends; risks related to the integration of acquired businesses (including our acquisitions of First Bancorp of Durango, Inc., Southern Colorado Corp., the operating assets of Interstate Capital Corporation and certain of its affiliates, Valley Bancorp, Inc., and nine branches from Independent Bank in Colorado) and any future acquisitions; changes in management personnel; interest rate risk; concentration of our factoring 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; 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 the Federal Deposit Insurance Corporation 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 13, 2018.

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 its 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 Years Ended  
(Dollars in    December 31,     September 30,     June 30,     March 31,     December 31,     December 31,     December 31,  
thousands)   2018     2018     2018     2018     2017     2018     2017  
Financial Highlights:                                                        
Total assets   $ 4,559,779     $ 4,537,102     $ 3,794,631     $ 3,405,010     $ 3,499,033     $ 4,559,779     $ 3,499,033  
Loans held for investment   $ 3,608,644     $ 3,512,143     $ 3,196,462     $ 2,873,985     $ 2,810,856     $ 3,608,644     $ 2,810,856  
Deposits   $ 3,450,349     $ 3,439,049     $ 2,624,942     $ 2,533,498     $ 2,621,348     $ 3,450,349     $ 2,621,348  
Net income available to common stockholders   $ 18,085     $ 8,975     $ 12,192     $ 11,878     $ 6,111     $ 51,130     $ 35,446  
                                                         
Performance Ratios - Annualized:                                                        
Return on average assets     1.60 %     0.90 %     1.37 %     1.43 %     0.79 %     1.33 %     1.27 %
Return on average total equity     11.35 %     5.88 %     8.53 %     12.20 %     6.35 %     9.24 %     10.66 %
Return on average common equity     11.40 %     5.85 %     8.54 %     12.30 %     6.30 %     9.27 %     10.73 %
Return on average tangible common equity (1)     16.73 %     7.57 %     9.95 %     14.75 %     7.33 %     11.90 %     12.50 %
Yield on loans(2)     8.14 %     8.33 %     8.09 %     7.65 %     7.73 %     8.07 %     7.55 %
Cost of interest bearing deposits     1.15 %     1.08 %     0.93 %     0.86 %     0.84 %     1.02 %     0.78 %
Cost of total deposits     0.91 %     0.85 %     0.73 %     0.68 %     0.67 %     0.80 %     0.62 %
Cost of total funds     1.14 %     1.16 %     1.06 %     0.95 %     0.92 %     1.09 %     0.86 %
Net interest margin(2)     6.34 %     6.59 %     6.36 %     6.06 %     6.16 %     6.35 %     5.92 %
Net non-interest expense to average assets     3.55 %     4.19 %     3.59 %     3.43 %     3.65 %     3.70 %     2.92 %
Adjusted net non-interest expense to average assets (1)     3.55 %     3.62 %     3.47 %     3.56 %     3.43 %     3.55 %     3.41 %
Efficiency ratio     65.52 %     72.15 %     64.26 %     65.09 %     66.74 %     66.94 %     62.96 %
Adjusted efficiency ratio (1)     65.52 %     63.49 %     62.38 %     66.45 %     63.35 %     64.43 %     66.55 %
                                                         
Asset Quality:(3)                                                        
Past due to total loans     2.41 %     2.23 %     2.54 %     2.41 %     2.33 %     2.41 %     2.33 %
Non-performing loans to total loans     1.00 %     1.13 %     1.43 %     1.41 %     1.38 %     1.00 %     1.38 %
Non-performing assets to total assets     0.84 %     0.93 %     1.28 %     1.47 %     1.39 %     0.84 %     1.39 %
ALLL to non-performing loans     76.47 %     68.82 %     53.57 %     49.52 %     48.41 %     76.47 %     48.41 %
ALLL to total loans     0.76 %     0.78 %     0.77 %     0.70 %     0.67 %     0.76 %     0.67 %
Net charge-offs to average loans     0.05 %     0.12 %     0.01 %     0.05 %     0.06 %     0.23 %     0.28 %
                                                         
Capital:                                                        
Tier 1 capital to average assets(4)     11.08 %     11.75 %     15.00 %     11.23 %     11.80 %     11.08 %     11.80 %
Tier 1 capital to risk-weighted assets(4)     11.53 %     11.16 %     14.68 %     11.54 %     11.15 %     11.53 %     11.15 %
Common equity tier 1 capital to risk-weighted assets(4)     10.58 %     9.96 %     13.32 %     10.05 %     9.70 %     10.58 %     9.70 %
Total capital to risk-weighted assets(4)     13.40 %     13.05 %     16.73 %     13.66 %     13.21 %     13.40 %     13.21 %
Total equity to total assets     13.96 %     13.59 %     16.00 %     11.83 %     11.19 %     13.96 %     11.19 %
Tangible common stockholders' equity to tangible assets(1)     10.03 %     9.35 %     13.05 %     9.86 %     9.26 %     10.03 %     9.26 %
                                                         
Per Share Amounts:                                                        
Book value per share   $ 23.62     $ 23.10     $ 22.76     $ 18.89     $ 18.35     $ 23.62     $ 18.35  
Tangible book value per share (1)   $ 16.22     $ 15.42     $ 18.27     $ 15.82     $ 15.29     $ 16.22     $ 15.29  
Basic earnings per common share   $ 0.68     $ 0.34     $ 0.48     $ 0.57     $ 0.29     $ 2.06     $ 1.85  
Diluted earnings per common share   $ 0.67     $ 0.34     $ 0.47     $ 0.56     $ 0.29     $ 2.03     $ 1.81  
Adjusted diluted earnings per common share(1)   $ 0.67     $ 0.51     $ 0.50     $ 0.52     $ 0.34     $ 2.21     $ 1.37  
Shares outstanding end of period     26,949,936       26,279,761       26,260,785       20,824,509       20,820,445       26,949,936       20,820,445  
                                                         

Unaudited consolidated balance sheet as of:

    December 31,     September 30,     June 30,     March 31,     December 31,  
 (Dollars in thousands)   2018     2018     2018     2018     2017  
ASSETS                                        
Total cash and cash equivalents   $ 234,939     $ 282,409     $ 133,365     $ 106,046     $ 134,129  
Securities - available for sale     336,423       355,981       183,184       192,916       250,603  
Securities - held to maturity     8,487       8,403       8,673       8,614       8,557  
Equity securities     5,044       4,981       5,025       4,925       5,006  
Loans held for sale     2,106       683                    
Loans held for investment     3,608,644       3,512,143       3,196,462       2,873,985       2,810,856  
Allowance for loan and lease losses     (27,571 )     (27,256 )     (24,547 )     (20,022 )     (18,748 )
Loans, net     3,581,073       3,484,887       3,171,915       2,853,963       2,792,108  
Assets held for sale                             71,362  
FHLB stock     15,943       23,109       19,223       16,508       16,006  
Premises and equipment, net     83,392       82,935       68,313       62,826       62,861  
Other real estate owned ("OREO"), net     2,060       2,442       2,528       9,186       9,191  
Goodwill and intangible assets, net     199,417       201,842       117,777       63,923       63,778  
Bank-owned life insurance     40,509       40,339       40,168       44,534       44,364  
Deferred tax asset, net     8,438       8,137       8,810       8,849       8,959  
Other assets     41,948       40,954       35,650       32,720       32,109  
Total assets   $ 4,559,779     $ 4,537,102     $ 3,794,631     $ 3,405,010     $ 3,499,033  
LIABILITIES                                        
Non-interest bearing deposits   $ 724,527     $ 697,903     $ 561,033     $ 548,991     $ 564,225  
Interest bearing deposits     2,725,822       2,741,146       2,063,909       1,984,507       2,057,123  
Total deposits     3,450,349       3,439,049       2,624,942       2,533,498       2,621,348  
Customer repurchase agreements     4,485       13,248       10,509       6,751       11,488  
Federal Home Loan Bank advances     330,000       330,000       420,000       355,000       365,000  
Subordinated notes     48,929       48,903       48,878       48,853       48,828  
Junior subordinated debentures     39,083       38,966       38,849       38,734       38,623  
Other liabilities     50,326       50,295       44,228       19,230       22,048  
Total liabilities     3,923,172       3,920,461       3,187,406       3,002,066       3,107,335  
EQUITY                                        
Preferred stock series A           4,550       4,550       4,550       4,550  
Preferred stock series B           5,108       5,108       5,108       5,108  
Common stock     271       264       264       209       209  
Additional paid-in-capital     469,341       458,920       457,980       265,406       264,855  
Treasury stock, at cost     (2,288 )     (2,285 )     (2,254 )     (1,853 )     (1,784 )
Retained earnings     170,486       152,401       143,426       131,234       119,356  
Accumulated other comprehensive income     (1,203 )     (2,317 )     (1,849 )     (1,710 )     (596 )
Total equity     636,607       616,641       607,225       402,944       391,698  
Total liabilities and equity   $ 4,559,779     $ 4,537,102     $ 3,794,631     $ 3,405,010     $ 3,499,033  
 

 

Unaudited consolidated statement of income:

    For the Three Months Ended     For the Years Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,     December 31,     December 31,  
 (Dollars in thousands)   2018     2018     2018     2018     2017     2018     2017  
Interest income:                                                        
Loans, including fees   $ 44,435     $ 41,257     $ 38,148     $ 36,883     $ 34,856     $ 160,723     $ 121,567  
Factored receivables, including fees     28,070       27,939       20,791       15,303       15,000       92,103       47,177  
Securities     2,314       1,551       1,179       1,310       1,819       6,354       6,823  
FHLB stock     154       147       101       105       78       507       207  
Cash deposits     877       865       1,030       517       464       3,289       1,450  
Total interest income     75,850       71,759       61,249       54,118       52,217       262,976       177,224  
Interest expense:                                                        
Deposits     7,931       6,219       4,631       4,277       3,884       23,058       13,082  
Subordinated notes     839       837       838       837       836       3,351       3,344  
Junior subordinated debentures     717       714       713       597       520       2,741       1,955  
Other borrowings     1,482       2,207       1,810       1,277       1,181       6,776       3,159  
Total interest expense     10,969       9,977       7,992       6,988       6,421       35,926       21,540  
Net interest income     64,881       61,782       53,257       47,130       45,796       227,050       155,684  
Provision for loan losses     1,910       6,803       4,906       2,548       1,931       16,167       11,628  
Net interest income after provision for loan losses     62,971       54,979       48,351       44,582       43,865       210,883       144,056  
Non-interest income:                                                        
Service charges on deposits     1,702       1,412       1,210       1,145       1,178       5,469       4,181  
Card income     1,999       1,877       1,394       1,244       1,122       6,514       3,822  
Net OREO gains (losses) and valuation adjustments     37       65       (528 )     (88 )     (764 )     (514 )     (850 )
Net gains (losses) on sale of securities                       (272 )           (272 )     35  
Fee income     1,636       1,593       1,121       800       658       5,150       2,503  
Insurance commissions     846       1,113       819       714       857       3,492       2,981  
Asset management fees                                         1,717  
Gain on sale of subsidiary                       1,071             1,071       20,860  
Other     574       (1 )     929       558       947       2,060       5,407  
Total non-interest income     6,794       6,059       4,945       5,172       3,998       22,970       40,656  
Non-interest expense:                                                        
Salaries and employee benefits     25,586       24,695       20,527       19,404       18,009       90,212       72,696  
Occupancy, furniture and equipment     4,402       3,553       3,014       3,054       2,728       14,023       9,833  
FDIC insurance and other regulatory assessments     184       363       383       199       411       1,129       1,201  
Professional fees     1,837       3,384       2,078       1,640       2,521       8,939       7,192  
Amortization of intangible assets     2,438       2,064       1,361       1,117       2,309       6,980       5,201  
Advertising and promotion     1,036       1,609       1,300       1,029       573       4,974       3,226  
Communications and technology     4,388       7,252       3,271       3,359       2,291       18,270       8,843  
Other     7,091       6,026       5,469       4,240       4,389       22,826       15,422  
Total non-interest expense     46,962       48,946       37,403       34,042       33,231       167,353       123,614  
Net income before income tax     22,803       12,092       15,893       15,712       14,632       66,500       61,098  
Income tax expense     4,718       2,922       3,508       3,644       8,327       14,792       24,878  
Net income   $ 18,085     $ 9,170     $ 12,385     $ 12,068     $ 6,305     $ 51,708     $ 36,220  
Dividends on preferred stock           (195 )     (193 )     (190 )     (194 )     (578 )     (774 )
Net income available to common stockholders   $ 18,085     $ 8,975     $ 12,192     $ 11,878     $ 6,111     $ 51,130     $ 35,446  
 

Earnings per share:

    For the Three Months Ended     For the Years Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,     December 31,     December 31,  
(Dollars in thousands)   2018     2018     2018     2018     2017     2018     2017  
Basic                                                        
Net income to common stockholders   $ 18,085     $ 8,975     $ 12,192     $ 11,878     $ 6,111     $ 51,130     $ 35,446  
Weighted average common shares outstanding     26,666,554       26,178,194       25,519,108       20,721,363       20,717,548       24,791,448       19,133,745  
Basic earnings per common share   $ 0.68     $ 0.34     $ 0.48     $ 0.57     $ 0.29     $ 2.06     $ 1.85  
                                                         
Diluted                                                        
Net income to common stockholders   $ 18,085     $ 8,975     $ 12,192     $ 11,878     $ 6,111     $ 51,130     $ 35,446  
Dilutive effect of preferred stock           195       193       190       194       578       774  
Net income to common stockholders - diluted   $ 18,085     $ 9,170     $ 12,385     $ 12,068     $ 6,305     $ 51,708     $ 36,220  
Weighted average common shares outstanding     26,666,554       26,178,194       25,519,108       20,721,363       20,717,548       24,791,448       19,133,745  
Dilutive effects of:                                                        
Assumed conversion of Preferred A     89,240       315,773       315,773       315,773       315,773       258,674       315,773  
Assumed conversion of Preferred B     100,176       354,471       354,471       354,471       354,471       290,375       354,471  
Assumed exercises of stock warrants                                         82,567  
Assumed exercises of stock options     76,219       90,320       86,821       83,872       56,359       84,126       45,653  
Restricted stock awards     46,457       45,796       37,417       85,045       74,318       52,851       68,079  
Restricted stock units     1,303       7,276       2,288                   3,039        
Performance stock units                                          
Weighted average shares outstanding - diluted     26,979,949       26,991,830       26,315,878       21,560,524       21,518,469       25,480,513       20,000,288  
Diluted earnings per common share   $ 0.67     $ 0.34     $ 0.47     $ 0.56     $ 0.29     $ 2.03     $ 1.81  
                                                         
                                                         
Shares that were not considered in computing diluted earnings per common share because they were antidilutive are as follows:  
                                                         
    For the Three Months Ended     For the Years Ended  
    December 31,     September 30,     June 30,     March 31,     December 31,     December 31,     December 31,  
    2018     2018     2018     2018     2017     2018     2017  
Assumed conversion of Preferred A                                          
Assumed conversion of Preferred B                                          
Stock options     51,952       51,952       51,952             57,926       51,952       57,926  
Restricted stock awards     14,513       14,513                                
Restricted stock units                                          
Performance stock units     59,658       59,658       59,658                   59,658        
                                                         

Loans held for investment summarized as of:

    December 31,     September 30,     June 30,     March 31,     December 31,  
 (Dollars in thousands)   2018     2018     2018     2018     2017  
Commercial real estate   $ 992,080     $ 906,494     $ 766,839     $ 781,006     $ 745,893  
Construction, land development, land     179,591       190,920       147,852       143,876       134,812  
1-4 family residential properties     190,185       194,752       122,653       122,979       125,827  
Farmland     170,540       177,313       177,060       184,064       180,141  
Commercial     1,114,971       1,123,598       1,006,443       930,283       920,812  
Factored receivables     617,791       611,285       603,812       397,145       374,410  
Consumer     29,822       31,423       28,775       29,244       31,131  
Mortgage warehouse     313,664       276,358       343,028       285,388       297,830  
  Total loans   $ 3,608,644     $ 3,512,143     $ 3,196,462     $ 2,873,985     $ 2,810,856  
 

A portion of our total loans held for investment portfolio consists of traditional community bank loans as well as commercial finance products offered under our commercial finance brands on a nationwide basis. Commercial finance loans are further summarized below:

    December 31,     September 30,     June 30,     March 31,     December 31,  
(Dollars in thousands)   2018     2018     2018     2018     2017  
Equipment   $ 352,037     $ 323,832     $ 290,314     $ 260,502     $ 254,119  
Asset based lending (General)     214,110       273,096       261,412       230,314       213,471  
Premium finance     72,302       75,293       51,416       48,561       55,520  
Factored receivables     617,791       611,285       603,812       397,145       374,410  
  Commercial finance   $ 1,256,240     $ 1,283,506     $ 1,206,954     $ 936,522     $ 897,520  
                                         
Commercial finance % of total loans     35 %     37 %     38 %     33 %     32 %

Additional information pertaining to our loan portfolio, summarized as of and for the quarters ended:

    December 31,     September 30,     June 30,     March 31,     December 31,  
(Dollars in thousands)   2018     2018     2018     2018     2017  
Average community banking   $ 2,268,262     $ 2,039,624     $ 1,897,678     $ 1,816,921     $ 1,637,195  
Average commercial finance(1)     1,264,209       1,254,095       1,024,369       949,938       921,579  
Average total loans   $ 3,532,471     $ 3,293,719     $ 2,922,047     $ 2,766,859     $ 2,558,774  
Community banking yield     5.78 %     5.68 %     5.80 %     5.81 %     5.87 %
Commercial finance yield(1)     12.39 %     12.66 %     12.08 %     11.17 %     11.03 %
Total loan yield     8.14 %     8.33 %     8.09 %     7.65 %     7.73 %
 

(1) Includes assets held for sale for the periods ended March 31, 2018 and December 31, 2017

  

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,     September 30,     June 30,     March 31,     December 31,  
    2018     2018     2018     2018     2017  
Factored receivable period end balance   $ 588,750,000     $ 579,985,000     $ 577,548,000     $ 372,771,000     $ 346,293,000  
Yield on average receivable balance     18.24 %     18.96 %     18.70 %     17.40 %     16.91 %
Rolling twelve quarter annual charge-off rate     0.37 %     0.38 %     0.41 %     0.50 %     0.41 %
Factored receivables - transportation concentration     83 %     83 %     84 %     86 %     84 %
                                         
Interest income, including fees   $ 27,578,000     $ 27,420,000     $ 20,314,000     $ 14,780,000     $ 14,518,000  
Non-interest income     1,032,000       942,000       920,000       590,000       535,000  
Factored receivable total revenue     28,610,000       28,362,000       21,234,000       15,370,000       15,053,000  
Average net funds employed     547,996,000       525,499,000       398,096,000       316,488,000       309,614,000  
Yield on average net funds employed     20.71 %     21.41 %     21.39 %     19.70 %     19.29 %
                                         
Accounts receivable purchased   $ 1,541,332,000     $ 1,503,049,000     $ 1,162,810,000     $ 912,336,000     $ 872,373,000  
Number of invoices purchased     882,042       836,771       656,429       521,906       511,879  
Average invoice size   $ 1,747     $ 1,796     $ 1,771     $ 1,751     $ 1,705  
Average invoice size - transportation   $ 1,625     $ 1,666     $ 1,695     $ 1,662     $ 1,647  
Average invoice size - non-transportation   $ 3,209     $ 3,267     $ 2,522     $ 2,627     $ 2,251  
                                         
Net new clients     259       422       2,072       280       233  
Period end clients     6,191       5,932       5,510       3,438       3,158  
                                         

Deposits summarized as of:

    December 31,     September 30,     June 30,     March 31,     December 31,  
(Dollars in thousands)   2018     2018     2018     2018     2017  
Non-interest bearing demand   $ 724,527     $ 697,903     $ 561,033     $ 548,991     $ 564,225  
Interest bearing demand     615,704       608,775       358,246       392,947       403,244  
Individual retirement accounts     115,583       118,459       101,380       105,558       108,505  
Money market     443,663       413,402       268,699       283,354       283,969  
Savings     369,389       373,062       239,127       244,103       235,296  
Certificates of deposit     835,127       854,048       751,290       783,651       837,384  
Brokered deposits     346,356       373,400       345,167       174,894       188,725  
  Total deposits   $ 3,450,349     $ 3,439,049     $ 2,624,942     $ 2,533,498     $ 2,621,348  
 

Net interest margin summarized for the three months ended:

     December 31, 2018     September 30, 2018  
    Average             Average     Average             Average  
(Dollars in thousands)   Balance     Interest     Rate     Balance     Interest     Rate  
Interest earning assets:                                                
Interest earning cash balances   $ 152,212     $ 877       2.29 %   $ 156,876     $ 865       2.19 %
Taxable securities     235,234       1,674       2.82 %     183,238       1,207       2.61 %
Tax-exempt securities     123,575       640       2.05 %     66,208       344       2.06 %
FHLB stock     16,426       154       3.72 %     20,984       147       2.78 %
Loans     3,532,471       72,505       8.14 %     3,293,719       69,196       8.33 %
  Total interest earning assets   $ 4,059,918     $ 75,850       7.41 %   $ 3,721,025     $ 71,759       7.65 %
Non-interest earning assets:                                                
Other assets     429,000                       339,535                  
  Total assets   $ 4,488,918                     $ 4,060,560                  
Interest bearing liabilities:                                                
Deposits:                                                
Interest bearing demand   $ 613,872     $ 417       0.27 %   $ 418,226     $ 200       0.19 %
Individual retirement accounts     116,575       385       1.31 %     105,774       339       1.27 %
Money market     430,864       1,312       1.21 %     303,843       594       0.78 %
Savings     373,650       159       0.17 %     272,230       60       0.09 %
Certificates of deposit     862,500       3,749       1.72 %     793,685       3,068       1.53 %
  Brokered deposits     347,498       1,909       2.18 %     384,337       1,958       2.02 %
  Total deposits     2,744,959       7,931       1.15 %     2,278,095       6,219       1.08 %
Subordinated notes     48,914       839       6.81 %     48,890       837       6.79 %
Junior subordinated debentures     39,011       717       7.29 %     38,905       714       7.28 %
Other borrowings     262,391       1,482       2.24 %     425,781       2,207       2.06 %
  Total interest bearing liabilities   $ 3,095,275     $ 10,969       1.41 %   $ 2,791,671     $ 9,977       1.42 %
Non-interest bearing liabilities and equity:                                                
Non-interest bearing demand deposits     714,884                       608,245                  
Other liabilities     46,633                       41,961                  
Total equity     632,126                       618,683                  
Total liabilities and equity   $ 4,488,918                     $ 4,060,560                  
Net interest income           $ 64,881                     $ 61,782          
Interest spread                     6.00 %                     6.23 %
Net interest margin                     6.34 %                     6.59 %
 

Metrics and non-GAAP financial reconciliation:

    As of and for the Three Months Ended     As of and for the Years Ended  
 (Dollars in thousands,   December 31,     September 30,     June 30,     March 31,     December 31,     December 31,     December 31,  
 except per share amounts)   2018     2018     2018     2018     2017     2018     2017  
Net income available to common stockholders   $ 18,085     $ 8,975     $ 12,192     $ 11,878     $ 6,111     $ 51,130     $ 35,446  
Gain on sale of subsidiary                       (1,071 )           (1,071 )     (20,860 )
Incremental bonus related to transaction                                         4,814  
Transaction related costs           5,871       1,094             1,688       6,965       2,013  
Tax effect of adjustments           (1,392 )     (257 )     248       (601 )     (1,401 )     5,153  
Adjusted net income available to common stockholders   $ 18,085     $ 13,454     $ 13,029     $ 11,055     $ 7,198     $ 55,623     $ 26,566  
Dilutive effect of convertible preferred stock           195       193       190       194       578       774  
Adjusted net income available to common stockholders - diluted   $ 18,085     $ 13,649     $ 13,222     $ 11,245     $ 7,392     $ 56,201     $ 27,340  
                                                         
Weighted average shares outstanding - diluted     26,979,949       26,991,830       26,315,878       21,560,524       21,518,469       25,480,513       20,000,288  
Adjusted effects of assumed Preferred Stock conversion                                          
Adjusted weighted average shares outstanding - diluted     26,979,949       26,991,830       26,315,878       21,560,524       21,518,469       25,480,513       20,000,288  
Adjusted diluted earnings per common share   $ 0.67     $ 0.51     $ 0.50     $ 0.52     $ 0.34     $ 2.21     $ 1.37  
                                                         
Net income available to common stockholders   $ 18,085     $ 8,975     $ 12,192     $ 11,878     $ 6,111     $ 51,130     $ 35,446  
Average tangible common equity     428,748       470,553       491,492       326,614       330,819       429,745       283,561  
Return on average tangible common equity     16.73 %     7.57 %     9.95 %     14.75 %     7.33 %     11.90 %     12.50 %
                                                         
Adjusted efficiency ratio:                                                        
Net interest income   $ 64,881     $ 61,782     $ 53,257     $ 47,130     $ 45,796     $ 227,050     $ 155,684  
Non-interest income     6,794       6,059       4,945       5,172       3,998       22,970       40,656  
Operating revenue     71,675       67,841       58,202       52,302       49,794       250,020       196,340  
Gain on sale of subsidiary                       (1,071 )           (1,071 )     (20,860 )
Adjusted operating revenue   $ 71,675     $ 67,841     $ 58,202     $ 51,231     $ 49,794     $ 248,949     $ 175,480  
Non-interest expenses   $ 46,962     $ 48,946     $ 37,403     $ 34,042     $ 33,231     $ 167,353     $ 123,614  
Incremental bonus related to transaction                                         (4,814 )
Transaction related costs           (5,871 )     (1,094 )           (1,688 )     (6,965 )     (2,013 )
Adjusted non-interest expenses   $ 46,962     $ 43,075     $ 36,309     $ 34,042     $ 31,543     $ 160,388     $ 116,787  
Adjusted efficiency ratio     65.52 %     63.49 %     62.38 %     66.45 %     63.35 %     64.43 %     66.55 %
                                                         
Adjusted net non-interest expense to average assets ratio:                                                        
Non-interest expenses   $ 46,962     $ 48,946     $ 37,403     $ 34,042     $ 33,231     $ 167,353     $ 123,614  
Incremental bonus related to transaction                                         (4,814 )
Transaction related costs           (5,871 )     (1,094 )           (1,688 )     (6,965 )     (2,013 )
Adjusted non-interest expenses   $ 46,962     $ 43,075     $ 36,309     $ 34,042     $ 31,543     $ 160,388     $ 116,787  
                                                         
Total non-interest income   $ 6,794     $ 6,059     $ 4,945     $ 5,172     $ 3,998     $ 22,970     $ 40,656  
Gain on sale of subsidiary                       (1,071 )           (1,071 )     (20,860 )
Adjusted non-interest income   $ 6,794     $ 6,059     $ 4,945     $ 4,101     $ 3,998     $ 21,899     $ 19,796  
Adjusted net non-interest expenses   $ 40,168     $ 37,016     $ 31,364     $ 29,941     $ 27,545     $ 138,489     $ 96,991  
Average total assets   $ 4,488,918     $ 4,060,560     $ 3,628,960     $ 3,410,883     $ 3,181,697     $ 3,900,728     $ 2,844,916  
Adjusted net non-interest expense to average assets ratio     3.55 %     3.62 %     3.47 %     3.56 %     3.43 %     3.55 %     3.41 %
                                                         
Total stockholders' equity   $ 636,607     $ 616,641     $ 607,225     $ 402,944     $ 391,698     $ 636,607     $ 391,698  
Preferred stock liquidation preference           (9,658 )     (9,658 )     (9,658 )     (9,658 )           (9,658 )
Total common stockholders' equity     636,607       606,983       597,567       393,286       382,040       636,607       382,040  
Goodwill and other intangibles     (199,417 )     (201,842 )     (117,777 )     (63,923 )     (63,778 )     (199,417 )     (63,778 )
Tangible common stockholders' equity   $ 437,190     $ 405,141     $ 479,790     $ 329,363     $ 318,262     $ 437,190     $ 318,262  
Common shares outstanding     26,949,936       26,279,761       26,260,785       20,824,509       20,820,445       26,949,936       20,820,445  
Tangible book value per share   $ 16.22     $ 15.42     $ 18.27     $ 15.82     $ 15.29     $ 16.22     $ 15.29  
                                                         
Total assets at end of period   $ 4,559,779     $ 4,537,102     $ 3,794,631     $ 3,405,010     $ 3,499,033     $ 4,559,779     $ 3,499,033  
Goodwill and other intangibles     (199,417 )     (201,842 )     (117,777 )     (63,923 )     (63,778 )     (199,417 )     (63,778 )
Adjusted total assets at period end   $ 4,360,362     $ 4,335,260     $ 3,676,854     $ 3,341,087     $ 3,435,255     $ 4,360,362     $ 3,435,255  
Tangible common stockholders' equity ratio     10.03 %     9.35 %     13.05 %     9.86 %     9.26 %     10.03 %     9.26 %
 
  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 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 Years Ended  
      December 31,     September 30,     June 30,     March 31,     December 31,     December 31,     December 31,  
  (Dollars in thousands)   2018     2018     2018     2018     2017     2018     2017  
  Loan discount accretion   $ 1,411     $ 1,271     $ 3,637     $ 1,977     $ 1,697     $ 8,296     $ 7,071  
 

      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, Marketing & Communication
atavackoli@tbkbank.com
214-365-6930

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