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CST: 16/11/2019 17:38:31   

Triumph Bancorp Reports Third Quarter Net Income to Common Stockholders of $14.3 Million

31 Days ago

DALLAS, Oct. 16, 2019 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (Nasdaq: TBK) (“Triumph” or the “Company”) today announced earnings and operating results for the third quarter of 2019.

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.

2019 Third Quarter Highlights and Recent Developments

  • For the third quarter of 2019, net income available to common stockholders was $14.3 million. Diluted earnings per share were $0.56. 

  • Net interest margin (“NIM”) was 5.85% for the quarter ended September 30, 2019. 

  • Total loans held for investment increased $373.5 million, or 9.7%, to $4.209 billion at September 30, 2019. Average loans for the quarter increased $235.7 million, or 6.4%, to $3.944 billion.

  • Triumph Business Capital grew period-end clients to 6,471 clients, which is an increase of 16 clients, or 0.2%. The total dollar value of invoices purchased for the quarter ended September 30, 2019 was $1.451 billion with an average invoice price of $1,628. 

  • At September 30, 2019, there were 163 clients utilizing the TriumphPay platform, which is an increase of 17 clients, or 11.6%, during the quarter. For the quarter ended September 30, 2019, TriumphPay processed 168,562 invoices paying 30,333 distinct carriers a total of $190.3 million.

  • During the quarter ended September 30, 2019, we repurchased 850,093 shares into treasury stock under our stock repurchase program at an average price of $29.38, for a total of $25.0 million. During the nine months ended September 30, 2019, we have repurchased 1,688,234 shares into treasury stock under our stock repurchase programs at an average price of $29.56, for a total of $49.9 million, effectively completing both of our previously announced $25.0 million stock repurchase programs.

Repurchase Program Authorization

On October 16, 2019 our board of directors authorized us to repurchase up to an additional $50.0 million of our outstanding common stock. We may repurchase these shares from time to time in open market transactions or through privately negotiated transactions at our discretion.  The amount, timing and nature of any share repurchases will be based on a variety of factors, including the trading price of our common stock, applicable securities laws restrictions, regulatory limitations and market and economic factors.  This repurchase program is authorized for a period of up to one year and does not require us to repurchase any specific number of shares.  The repurchase program may be modified, suspended or discontinued at any time, at our discretion.

Balance Sheet

Total loans held for investment increased $373.5 million, or 9.7%, during the third quarter to $4.209 billion at September 30, 2019. The commercial finance portfolio increased $89.0 million, or 7.5%, to $1.276 billion, the national lending portfolio increased $249.4 million, or 52.3%, to $726.6 million, and the community banking portfolio increased $35.1 million, or 1.6%, to $2.207 billion during the quarter.

Total deposits were $3.698 billion at September 30, 2019, an increase of $38.9 million, or 1.1%, in the third quarter of 2019.  Non-interest-bearing deposits accounted for 20% of total deposits and non-time deposits accounted for 57% of total deposits at September 30, 2019. 

Net Interest Income

We earned net interest income for the quarter ended September 30, 2019 of $64.8 million compared to $63.4 million for the quarter ended June 30, 2019.

Yields on loans for the quarter ended September 30, 2019 were down 32 bps from the prior quarter to 7.63%. The average cost of our total deposits was 1.19% for the quarter ended September 30, 2019 compared to 1.14% for the quarter ended June 30, 2019. 

Asset Quality

Non-performing assets were 0.91% of total assets at September 30, 2019 compared to 0.86% of total assets at June 30, 2019.  The ratio of past due to total loans increased to 2.47% at September 30, 2019 from 1.90% at June 30, 2019. We recorded total net charge-offs of $0.4 million, or 0.01% of average loans, for the quarter ended September 30, 2019 compared to net charge-offs of $1.9 million, or 0.05% of average loans, for the quarter ended June 30, 2019. 

We recorded a provision for loan losses of $2.9 million for the quarter ended September 30, 2019 compared to a provision of $3.7 million for the quarter ended June 30, 2019. From June 30, 2019 to September 30, 2019, our ALLL increased from $29.4 million or 0.77% of total loans to $31.9 million or 0.76% of total loans.

Non-Interest Income and Expense

We earned non-interest income for the quarter ended September 30, 2019 of $7.7 million compared to $7.6 million for the quarter ended June 30, 2019.

For the quarter ended September 30, 2019, non-interest expense totaled $52.2 million, compared to $50.7 million for the quarter ended June 30, 2019. 

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, October 17, 2019. 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/tbk191017.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, national lending, 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., and the operating assets of Interstate Capital Corporation and certain of its affiliates) 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 12, 2019.

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 Nine Months
Ended
 
    September 30,     June 30,     March 31,     December 31,     September 30,     September 30,     September 30,  
(Dollars in thousands)   2019     2019     2019     2018     2018     2019     2018  
Financial Highlights:                                                        
Total assets   $ 5,039,697     $ 4,783,189     $ 4,529,783     $ 4,559,779     $ 4,537,102     $ 5,039,697     $ 4,537,102  
Loans held for investment   $ 4,209,417     $ 3,835,903     $ 3,612,869     $ 3,608,644     $ 3,512,143     $ 4,209,417     $ 3,512,143  
Deposits   $ 3,697,833     $ 3,658,978     $ 3,314,440     $ 3,450,349     $ 3,439,049     $ 3,697,833     $ 3,439,049  
Net income available to common stockholders   $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 8,975     $ 41,835     $ 33,045  
                                                         
Performance Ratios - Annualized:                                                        
Return on average assets     1.17 %     1.09 %     1.33 %     1.60 %     0.90 %     1.20 %     1.21 %
Return on average total equity     8.79 %     7.83 %     9.30 %     11.35 %     5.88 %     8.63 %     8.40 %
Return on average common equity     8.79 %     7.83 %     9.30 %     11.40 %     5.85 %     8.63 %     8.41 %
Return on average tangible common equity (1)     12.56 %     11.19 %     13.43 %     16.73 %     7.57 %     12.38 %     10.27 %
Yield on loans(2)     7.63 %     7.95 %     7.99 %     8.14 %     8.33 %     7.85 %     8.05 %
Cost of interest bearing deposits     1.49 %     1.42 %     1.24 %     1.15 %     1.08 %     1.39 %     0.96 %
Cost of total deposits     1.19 %     1.14 %     0.99 %     0.91 %     0.85 %     1.11 %     0.76 %
Cost of total funds     1.41 %     1.40 %     1.28 %     1.14 %     1.16 %     1.36 %     1.06 %
Net interest margin(2)     5.85 %     5.99 %     6.15 %     6.34 %     6.59 %     5.99 %     6.35 %
Net non-interest expense to average assets     3.64 %     3.68 %     3.70 %     3.55 %     4.19 %     3.67 %     3.76 %
Adjusted net non-interest expense to average assets (1)     3.64 %     3.68 %     3.70 %     3.55 %     3.62 %     3.67 %     3.55 %
Efficiency ratio     71.93 %     71.37 %     70.54 %     65.52 %     72.15 %     71.29 %     67.50 %
Adjusted efficiency ratio (1)     71.93 %     71.37 %     70.54 %     65.52 %     63.49 %     71.29 %     63.98 %
                                                         
Asset Quality:(3)                                                        
Past due to total loans     2.47 %     1.90 %     2.33 %     2.41 %     2.23 %     2.47 %     2.23 %
Non-performing loans to total loans     1.00 %     0.96 %     0.95 %     1.00 %     1.13 %     1.00 %     1.13 %
Non-performing assets to total assets     0.91 %     0.86 %     0.84 %     0.84 %     0.93 %     0.91 %     0.93 %
ALLL to non-performing loans     75.58 %     79.91 %     80.70 %     76.47 %     68.82 %     75.58 %     68.82 %
ALLL to total loans     0.76 %     0.77 %     0.76 %     0.76 %     0.78 %     0.76 %     0.78 %
Net charge-offs to average loans     0.01 %     0.05 %     0.03 %     0.05 %     0.12 %     0.09 %     0.19 %
                                                         
Capital:                                                        
Tier 1 capital to average assets(4)     10.37 %     10.84 %     11.32 %     11.08 %     11.75 %     10.37 %     11.75 %
Tier 1 capital to risk-weighted assets(4)     10.08 %     11.08 %     11.76 %     11.49 %     11.16 %     10.08 %     11.16 %
Common equity tier 1 capital to risk-weighted assets(4)     9.26 %     10.19 %     10.81 %     10.55 %     9.96 %     9.26 %     9.96 %
Total capital to risk-weighted assets(4)     11.79 %     12.88 %     13.62 %     13.35 %     13.05 %     11.79 %     13.05 %
Total equity to total assets     12.57 %     13.45 %     14.27 %     13.96 %     13.59 %     12.57 %     13.59 %
Tangible common stockholders' equity to tangible assets(1)     9.10 %     9.78 %     10.37 %     10.03 %     9.35 %     9.10 %     9.35 %
                                                         
Per Share Amounts:                                                        
Book value per share   $ 24.99     $ 24.56     $ 24.19     $ 23.62     $ 23.10     $ 24.99     $ 23.10  
Tangible book value per share (1)   $ 17.40     $ 17.13     $ 16.82     $ 16.22     $ 15.42     $ 17.40     $ 15.42  
Basic earnings per common share   $ 0.56     $ 0.48     $ 0.55     $ 0.68     $ 0.34     $ 1.60     $ 1.37  
Diluted earnings per common share   $ 0.56     $ 0.48     $ 0.55     $ 0.67     $ 0.34     $ 1.59     $ 1.35  
Adjusted diluted earnings per common share(1)   $ 0.56     $ 0.48     $ 0.55     $ 0.67     $ 0.51     $ 1.59     $ 1.53  
Shares outstanding end of period     25,357,985       26,198,308       26,709,411       26,949,936       26,279,761       25,357,985       26,279,761  
                                                         

Unaudited consolidated balance sheet as of:

    September 30,     June 30,     March 31,     December 31,     September 30,  
 (Dollars in thousands)   2019     2019     2019     2018     2018  
ASSETS                                        
Total cash and cash equivalents   $ 115,043     $ 209,305     $ 171,950     $ 234,939     $ 282,409  
Securities - available for sale     302,917       329,991       339,465       336,423       355,981  
Securities - held to maturity     8,517       8,573       8,499       8,487       8,403  
Equity securities     5,543       5,479       5,183       5,044       4,981  
Loans held for sale     7,499       2,877       610       2,106       683  
Loans held for investment     4,209,417       3,835,903       3,612,869       3,608,644       3,512,143  
Allowance for loan and lease losses     (31,895 )     (29,416 )     (27,605 )     (27,571 )     (27,256 )
Loans, net     4,177,522       3,806,487       3,585,264       3,581,073       3,484,887  
FHLB and other restricted stock     23,960       18,037       21,191       15,943       23,109  
Premises and equipment, net     87,112       84,998       84,931       83,392       82,935  
Other real estate owned ("OREO"), net     2,849       3,351       3,073       2,060       2,442  
Goodwill and intangible assets, net     192,440       194,668       197,015       199,417       201,842  
Bank-owned life insurance     40,724       40,847       40,667       40,509       40,339  
Deferred tax asset, net     5,971       7,278       7,608       8,438       8,137  
Other assets     69,600       71,298       64,327       41,948       40,954  
Total assets   $ 5,039,697     $ 4,783,189     $ 4,529,783     $ 4,559,779     $ 4,537,102  
LIABILITIES                                        
Non-interest bearing deposits   $ 754,233     $ 684,223     $ 667,597     $ 724,527     $ 697,903  
Interest bearing deposits     2,943,600       2,974,755       2,646,843       2,725,822       2,741,146  
Total deposits     3,697,833       3,658,978       3,314,440       3,450,349       3,439,049  
Customer repurchase agreements     14,124       12,788       3,727       4,485       13,248  
Federal Home Loan Bank advances     530,000       305,000       405,000       330,000       330,000  
Subordinated notes     49,010       48,983       48,956       48,929       48,903  
Junior subordinated debentures     39,443       39,320       39,200       39,083       38,966  
Other liabilities     75,594       74,758       72,244       50,326       50,295  
Total liabilities     4,406,004       4,139,827       3,883,567       3,923,172       3,920,461  
EQUITY                                        
Preferred stock series A                             4,550  
Preferred stock series B                             5,108  
Common stock     272       271       271       271       264  
Additional paid-in-capital     472,368       471,145       470,292       469,341       458,920  
Treasury stock, at cost     (52,632 )     (27,468 )     (9,881 )     (2,288 )     (2,285 )
Retained earnings     212,321       198,004       185,274       170,486       152,401  
Accumulated other comprehensive income     1,364       1,410       260       (1,203 )     (2,317 )
Total equity     633,693       643,362       646,216       636,607       616,641  
Total liabilities and equity   $ 5,039,697     $ 4,783,189     $ 4,529,783     $ 4,559,779     $ 4,537,102  
                                         

Unaudited consolidated statement of income:

    For the Three Months Ended     For the Nine Months Ended  
    September 30,     June 30,     March 31,     December 31,     September 30,     September 30,     September 30,  
 (Dollars in thousands)   2019     2019     2019     2018     2018     2019     2018  
Interest income:                                                        
Loans, including fees   $ 50,249     $ 47,910     $ 45,094     $ 44,435     $ 41,257     $ 143,253     $ 116,288  
Factored receivables, including fees     25,570       25,558       24,556       28,070       27,939       75,684       64,033  
Securities     2,784       2,667       2,644       2,314       1,551       8,095       4,040  
FHLB and other restricted stock     209       146       192       154       147       547       353  
Cash deposits     603       1,022       778       877       865       2,403       2,412  
Total interest income     79,415       77,303       73,264       75,850       71,759       229,982       187,126  
Interest expense:                                                        
Deposits     11,036       10,010       8,218       7,931       6,219       29,264       15,127  
Subordinated notes     840       839       839       839       837       2,518       2,512  
Junior subordinated debentures     719       744       760       717       714       2,223       2,024  
Other borrowings     2,055       2,291       2,136       1,482       2,207       6,482       5,294  
Total interest expense     14,650       13,884       11,953       10,969       9,977       40,487       24,957  
Net interest income     64,765       63,419       61,311       64,881       61,782       189,495       162,169  
Provision for loan losses     2,865       3,681       1,014       1,910       6,803       7,560       14,257  
Net interest income after provision for loan losses     61,900       59,738       60,297       62,971       54,979       181,935       147,912  
Non-interest income:                                                        
Service charges on deposits     1,937       1,700       1,606       1,702       1,412       5,243       3,767  
Card income     2,015       2,071       1,844       1,999       1,877       5,930       4,515  
Net OREO gains (losses) and valuation adjustments     (56 )     148       209       37       65       301       (551 )
Net gains (losses) on sale of securities     19       14       (11 )                 22       (272 )
Fee income     1,624       1,519       1,612       1,636       1,593       4,755       3,514  
Insurance commissions     1,247       961       919       846       1,113       3,127       2,646  
Gain on sale of subsidiary                                         1,071  
Other     956       1,210       1,359       574       (1 )     3,525       1,486  
Total non-interest income     7,742       7,623       7,538       6,794       6,059       22,903       16,176  
Non-interest expense:                                                        
Salaries and employee benefits     28,717       28,120       26,439       25,586       24,695       83,276       64,626  
Occupancy, furniture and equipment     4,505       4,502       4,522       4,402       3,553       13,529       9,621  
FDIC insurance and other regulatory assessments     (2 )     303       299       184       363       600       945  
Professional fees     1,969       1,550       1,865       1,837       3,384       5,384       7,102  
Amortization of intangible assets     2,228       2,347       2,402       2,438       2,064       6,977       4,542  
Advertising and promotion     1,379       1,796       1,604       1,036       1,609       4,779       3,938  
Communications and technology     5,382       4,988       4,874       4,388       7,252       15,244       13,882  
Other     7,975       7,098       6,561       7,091       6,026       21,634       15,735  
Total non-interest expense     52,153       50,704       48,566       46,962       48,946       151,423       120,391  
Net income before income tax     17,489       16,657       19,269       22,803       12,092       53,415       43,697  
Income tax expense     3,172       3,927       4,481       4,718       2,922       11,580       10,074  
Net income   $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 9,170     $ 41,835     $ 33,623  
Dividends on preferred stock                             (195 )           (578 )
Net income available to common stockholders   $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 8,975     $ 41,835     $ 33,045  
                                                         

Earnings per share:

    For the Three Months Ended     For the Nine Months Ended  
    September 30,     June 30,     March 31,     December 31,     September 30,     September 30,     September 30,  
(Dollars in thousands)   2019     2019     2019     2018     2018     2019     2018  
Basic                                                        
Net income to common stockholders   $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 8,975     $ 41,835     $ 33,045  
Weighted average common shares outstanding     25,621,054       26,396,351       26,679,724       26,666,554       26,178,194       26,228,499       24,159,543  
Basic earnings per common share   $ 0.56     $ 0.48     $ 0.55     $ 0.68     $ 0.34     $ 1.60     $ 1.37  
                                                         
Diluted                                                        
Net income to common stockholders   $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 8,975     $ 41,835     $ 33,045  
Dilutive effect of preferred stock                             195             578  
Net income to common stockholders - diluted   $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 9,170     $ 41,835     $ 33,623  
Weighted average common shares outstanding     25,621,054       26,396,351       26,679,724       26,666,554       26,178,194       26,228,499       24,159,543  
Dilutive effects of:                                                        
Assumed conversion of Preferred A                       89,240       315,773             315,773  
Assumed conversion of Preferred B                       100,176       354,471             354,471  
Assumed exercises of stock options     60,068       59,962       64,166       76,219       90,320       61,054       86,728  
Restricted stock awards     45,631       30,110       49,795       46,457       45,796       40,572       55,087  
Restricted stock units     3,045                   1,303       7,276       57       2,706  
Performance stock units     4,673                               1,558        
Weighted average shares outstanding - diluted     25,734,471       26,486,423       26,793,685       26,979,949       26,991,830       26,331,740       24,974,308  
Diluted earnings per common share   $ 0.56     $ 0.48     $ 0.55     $ 0.67     $ 0.34     $ 1.59     $ 1.35  
                                                         
                                                         
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 Nine Months Ended  
    September 30,     June 30,     March 31,     December 31,     September 30,     September 30,     September 30,  
    2019     2019     2019     2018     2018     2019     2018  
Assumed conversion of Preferred A                                          
Assumed conversion of Preferred B                                          
Stock options     67,023       70,037       50,752       51,952       51,952       67,023       51,952  
Restricted stock awards     3,209             13,290       14,513       14,513       3,209       14,513  
Restricted stock units           58,400       58,400                   54,077        
Performance stock units     55,228       70,879       58,400       59,658       59,658       55,228       59,658  
                                                         

Loans held for investment summarized as of:

    September 30,     June 30,     March 31,     December 31,     September 30,  
 (Dollars in thousands)   2019     2019     2019     2018     2018  
Commercial real estate   $ 1,115,559     $ 1,098,279     $ 1,093,882     $ 992,080     $ 906,494  
Construction, land development, land     164,186       157,861       145,002       179,591       190,920  
1-4 family residential properties     186,405       186,070       194,067       190,185       194,752  
Farmland     161,447       144,594       156,299       170,540       177,313  
Commercial     1,369,505       1,257,330       1,117,640       1,114,971       1,123,598  
Factored receivables     599,651       583,131       570,663       617,791       611,285  
Consumer     24,967       26,048       27,941       29,822       31,423  
Mortgage warehouse     587,697       382,590       307,375       313,664       276,358  
Total loans   $ 4,209,417     $ 3,835,903     $ 3,612,869     $ 3,608,644     $ 3,512,143  
                                         

Our total loans held for investment 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.

Commercial finance loans are further summarized below:

    September 30,     June 30,     March 31,     December 31,     September 30,  
(Dollars in thousands)   2019     2019     2019     2018     2018  
Commercial - Equipment   $ 429,412     $ 395,094     $ 364,447     $ 352,037     $ 323,832  
Commercial - Asset-based lending     247,026       208,896       174,447       214,110       273,096  
Factored receivables     599,651       583,131       570,663       617,791       611,285  
Commercial finance   $ 1,276,089     $ 1,187,121     $ 1,109,557     $ 1,183,938     $ 1,208,213  
                                         
Commercial finance % of total loans     30 %     31 %     31 %     33 %     34 %
                                         

National lending loans are further summarized below:

    September 30,     June 30,     March 31,     December 31,     September 30,  
(Dollars in thousands)   2019     2019     2019     2018     2018  
Mortgage warehouse   $ 587,697     $ 382,590     $ 307,375     $ 313,664     $ 276,358  
Commercial - Liquid credit     37,386       21,758       960       963       966  
Commercial - Premium finance     101,562       72,898       77,389       72,302       75,293  
National lending   $ 726,645     $ 477,246     $ 385,724     $ 386,929     $ 352,617  
                                         
National lending % of total loans     17 %     12 %     11 %     11 %     10 %
                                         

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

    September 30,     June 30,     March 31,     December 31,     September 30,  
(Dollars in thousands)   2019     2019     2019     2018     2018  
Average community banking   $ 2,193,533     $ 2,166,122     $ 2,103,816     $ 2,012,255     $ 1,748,936  
Average commercial finance     1,208,823       1,168,110       1,123,978       1,190,586       1,184,064  
Average national lending     541,367       373,755       307,249       329,630       360,719  
Average total loans   $ 3,943,723     $ 3,707,987     $ 3,535,043     $ 3,532,471     $ 3,293,719  
Community banking yield     5.79 %     5.88 %     5.91 %     5.82 %     5.75 %
Commercial finance yield     12.31 %     12.52 %     12.50 %     12.82 %     13.00 %
National lending yield     4.63 %     5.62 %     5.73 %     5.44 %     5.54 %
Total loan yield     7.63 %     7.95 %     7.99 %     8.14 %     8.33 %
                                         

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:

    September 30,     June 30,     March 31,     December 31,     September 30,  
    2019     2019     2019     2018     2018  
Factored receivable period end balance   $ 562,009,000     $ 544,601,000     $ 534,420,000     $ 588,750,000     $ 579,985,000  
Yield on average receivable balance     18.23 %     18.73 %     17.96 %     18.24 %     18.96 %
Rolling twelve quarter annual charge-off rate     0.36 %     0.40 %     0.39 %     0.37 %     0.38 %
Factored receivables - transportation concentration     83 %     83 %     81 %     83 %     83 %
                                         
Interest income, including fees   $ 24,869,000     $ 24,762,000     $ 23,803,000     $ 27,578,000     $ 27,420,000  
Non-interest income     1,291,000       1,205,000       1,077,000       1,032,000       942,000  
Factored receivable total revenue     26,160,000       25,967,000       24,880,000       28,610,000       28,362,000  
Average net funds employed     494,198,000       483,203,000       490,241,000       547,996,000       525,499,000  
Yield on average net funds employed     21.00 %     21.55 %     20.58 %     20.71 %     21.41 %
                                         
Accounts receivable purchased   $ 1,450,905,000     $ 1,408,982,000     $ 1,325,140,000     $ 1,541,332,000     $ 1,503,049,000  
Number of invoices purchased     890,986       874,248       789,838       882,042       836,771  
Average invoice size   $ 1,628     $ 1,612     $ 1,678     $ 1,747     $ 1,796  
Average invoice size - transportation   $ 1,497     $ 1,492     $ 1,541     $ 1,625     $ 1,666  
Average invoice size - non-transportation   $ 3,467     $ 3,047     $ 3,276     $ 3,209     $ 3,267  
                                         
Net new clients     16       73       191       259       422  
Period end clients     6,471       6,455       6,382       6,191       5,932  
                                         

Deposits summarized as of:

    September 30,     June 30,     March 31,     December 31,     September 30,  
(Dollars in thousands)   2019     2019     2019     2018     2018  
Non-interest bearing demand   $ 754,233     $ 684,223     $ 667,597     $ 724,527     $ 697,903  
Interest bearing demand     587,123       587,164       602,088       615,704       608,775  
Individual retirement accounts     108,593       111,328       112,696       115,583       118,459  
Money market     424,162       440,289       372,109       443,663       413,402  
Savings     356,368       362,594       372,914       369,389       373,062  
Certificates of deposit     1,120,850       1,122,873       851,411       835,127       854,048  
Brokered deposits     346,504       350,507       335,625       346,356       373,400  
Total deposits   $ 3,697,833     $ 3,658,978     $ 3,314,440     $ 3,450,349     $ 3,439,049  
                                         

Net interest margin summarized for the three months ended:

    September 30, 2019     June 30, 2019  
    Average             Average     Average             Average  
(Dollars in thousands)   Balance     Interest     Rate     Balance     Interest     Rate  
Interest earning assets:                                                
Interest earning cash balances   $ 104,569     $ 603       2.29 %   $ 166,426     $ 1,022       2.46 %
Taxable securities     278,878       2,495       3.55 %     287,607       2,317       3.23 %
Tax-exempt securities     48,685       289       2.36 %     61,712       350       2.28 %
FHLB and other restricted stock     19,698       209       4.21 %     21,851       146       2.67 %
Loans     3,943,723       75,819       7.63 %     3,707,987       73,468       7.95 %
Total interest earning assets   $ 4,395,553     $ 79,415       7.17 %   $ 4,245,583     $ 77,303       7.30 %
Non-interest earning assets:                                                
Other assets     444,987                       449,064                  
Total assets   $ 4,840,540                     $ 4,694,647                  
Interest bearing liabilities:                                                
Deposits:                                                
Interest bearing demand   $ 585,706     $ 355       0.24 %   $ 592,593     $ 391       0.26 %
Individual retirement accounts     110,049       454       1.64 %     111,962       437       1.57 %
Money market     416,526       1,406       1.34 %     419,066       1,473       1.41 %
Savings     359,169       117       0.13 %     366,953       120       0.13 %
Certificates of deposit     1,113,006       6,588       2.35 %     1,006,950       5,568       2.22 %
Brokered deposits     352,430       2,116       2.38 %     337,086       2,021       2.40 %
Total interest bearing deposits     2,936,886       11,036       1.49 %     2,834,610       10,010       1.42 %
Subordinated notes     48,994       840       6.80 %     48,967       839       6.87 %
Junior subordinated debentures     39,364       719       7.25 %     39,241       744       7.60 %
Other borrowings     364,950       2,055       2.23 %     368,455       2,291       2.49 %
Total interest bearing liabilities   $ 3,390,194     $ 14,650       1.71 %   $ 3,291,273     $ 13,884       1.69 %
Non-interest bearing liabilities and equity:                                                
Non-interest bearing demand deposits     735,527                       686,923                  
Other liabilities     68,778                       64,104                  
Total equity     646,041                       652,347                  
Total liabilities and equity   $ 4,840,540                     $ 4,694,647                  
Net interest income           $ 64,765                     $ 63,419          
Interest spread                     5.46 %                     5.61 %
Net interest margin                     5.85 %                     5.99 %
                                                 

Metrics and non-GAAP financial reconciliation:

    As of and for the Three Months Ended     As of and for the Nine Months
Ended
 
 (Dollars in thousands,   September 30,     June 30,     March 31,     December 31,     September 30,     September 30,     September 30,  
 except per share amounts)   2019     2019     2019     2018     2018     2019     2018  
Net income available to common stockholders   $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 8,975     $ 41,835     $ 33,045  
Gain on sale of subsidiary or division                                         (1,071 )
Transaction related costs                             5,871             6,965  
Tax effect of adjustments                             (1,392 )           (1,401 )
Adjusted net income available to common stockholders   $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 13,454     $ 41,835     $ 37,538  
Dilutive effect of convertible preferred stock                             195             578  
Adjusted net income available to common stockholders - diluted   $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 13,649     $ 41,835     $ 38,116  
                                                         
Weighted average shares outstanding - diluted     25,734,471       26,486,423       26,793,685       26,979,949       26,991,830       26,331,740       24,974,308  
Adjusted effects of assumed Preferred Stock conversion                                          
Adjusted weighted average shares outstanding - diluted     25,734,471       26,486,423       26,793,685       26,979,949       26,991,830       26,331,740       24,974,308  
Adjusted diluted earnings per common share   $ 0.56     $ 0.48     $ 0.55     $ 0.67     $ 0.51     $ 1.59     $ 1.53  
                                                         
Average total stockholders' equity   $ 646,041     $ 652,347     $ 644,960     $ 632,126     $ 618,682     $ 647,787     $ 534,958  
Average preferred stock liquidation preference                       2,624       9,658             9,658  
Average total common stockholders' equity     646,041       652,347       644,960       629,502       609,025       647,787       525,300  
Average goodwill and other intangibles     193,765       196,002       198,389       200,754       138,471       196,035       95,220  
Average tangible common stockholders' equity   $ 452,276     $ 456,346     $ 446,571     $ 428,748     $ 470,553     $ 451,752     $ 430,080  
                                                         
Net income available to common stockholders   $ 14,317     $ 12,730     $ 14,788     $ 18,085     $ 8,975     $ 41,835     $ 33,045  
Average tangible common equity     452,276       456,346       446,571       428,748       470,553       451,752       430,080  
Return on average tangible common equity     12.56 %     11.19 %     13.43 %     16.73 %     7.57 %     12.38 %     10.27 %
                                                         
Adjusted efficiency ratio:                                                        
Net interest income   $ 64,765     $ 63,419     $ 61,311     $ 64,881     $ 61,782     $ 189,495     $ 162,169  
Non-interest income     7,742       7,623       7,538       6,794       6,059       22,903       16,176  
Operating revenue     72,507       71,042       68,849       71,675       67,841       212,398       178,345  
Gain on sale of subsidiary or division                                         (1,071 )
Adjusted operating revenue   $ 72,507     $ 71,042     $ 68,849     $ 71,675     $ 67,841     $ 212,398     $ 177,274  
Non-interest expenses   $ 52,153     $ 50,704     $ 48,566     $ 46,962     $ 48,946     $ 151,423     $ 120,391  
Transaction related costs                             (5,871 )           (6,965 )
Adjusted non-interest expenses   $ 52,153     $ 50,704     $ 48,566     $ 46,962     $ 43,075     $ 151,423     $ 113,426  
Adjusted efficiency ratio     71.93 %     71.37 %     70.54 %     65.52 %     63.49 %     71.29 %     63.98 %
                                                         
Adjusted net non-interest expense to average assets ratio:                                                        
Non-interest expenses   $ 52,153     $ 50,704     $ 48,566     $ 46,962     $ 48,946     $ 151,423     $ 120,391  
Transaction related costs                             (5,871 )           (6,965 )
Adjusted non-interest expenses   $ 52,153     $ 50,704     $ 48,566     $ 46,962     $ 43,075     $ 151,423     $ 113,426  
                                                         
Total non-interest income   $ 7,742     $ 7,623     $ 7,538     $ 6,794     $ 6,059     $ 22,903     $ 16,176  
Gain on sale of subsidiary or division                                         (1,071 )
Adjusted non-interest income   $ 7,742     $ 7,623     $ 7,538     $ 6,794     $ 6,059     $ 22,903     $ 15,105  
Adjusted net non-interest expenses   $ 44,411     $ 43,081     $ 41,028     $ 40,168     $ 37,016     $ 128,520     $ 98,321  
Average total assets   $ 4,840,540     $ 4,694,647     $ 4,501,760     $ 4,488,918     $ 4,060,560     $ 4,680,234     $ 3,702,513  
Adjusted net non-interest expense to average assets ratio     3.64 %     3.68 %     3.70 %     3.55 %     3.62 %     3.67 %     3.55 %
                                                         
Total stockholders' equity   $ 633,693     $ 643,362     $ 646,216     $ 636,607     $ 616,641     $ 633,693     $ 616,641  
Preferred stock liquidation preference                             (9,658 )           (9,658 )
Total common stockholders' equity     633,693       643,362       646,216       636,607       606,983       633,693       606,983  
Goodwill and other intangibles     (192,440 )     (194,668 )     (197,015 )     (199,417 )     (201,842 )     (192,440 )     (201,842 )
Tangible common stockholders' equity   $ 441,253     $ 448,694     $ 449,201     $ 437,190     $ 405,141     $ 441,253     $ 405,141  
Common shares outstanding     25,357,985       26,198,308       26,709,411       26,949,936       26,279,761       25,357,985       26,279,761  
Tangible book value per share   $ 17.40     $ 17.13     $ 16.82     $ 16.22     $ 15.42     $ 17.40     $ 15.42  
                                                         
Total assets at end of period   $ 5,039,697     $ 4,783,189     $ 4,529,783     $ 4,559,779     $ 4,537,102     $ 5,039,697     $ 4,537,102  
Goodwill and other intangibles     (192,440 )     (194,668 )     (197,015 )     (199,417 )     (201,842 )     (192,440 )     (201,842 )
Tangible assets at period end   $ 4,847,257     $ 4,588,521     $ 4,332,768     $ 4,360,362     $ 4,335,260     $ 4,847,257     $ 4,335,260  
Tangible common stockholders' equity ratio     9.10 %     9.78 %     10.37 %     10.03 %     9.35 %     9.10 %     9.35 %
                                                         

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 Nine Months Ended  
    September 30,     June 30,     March 31,     December 31,     September 30,     September 30,     September 30,  
(Dollars in thousands)   2019     2019     2019     2018     2018     2019     2018  
Loan discount accretion   $ 1,159     $ 1,297     $ 1,557     $ 1,411     $ 1,271     $ 4,013     $ 6,884  

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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