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