Triumph Bancorp Reports Fourth Quarter Net Income to Common Stockholders of $31.3 Million

Dallas, Texas, UNITED STATES


DALLAS, Jan. 21, 2021 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (Nasdaq: TBK) (“Triumph” or the “Company”) today announced earnings and operating results for the fourth quarter of 2020.

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.

2020 Fourth Quarter Highlights

  • For the fourth quarter of 2020, net income to common shareholders was $31.3 million, and diluted earnings per share were $1.25.
  • Net interest income was $83.6 million.
  • Net interest margin was 6.20%. Yield on loans and the average cost of our total deposits were 7.20% and 0.38%, respectively.
  • Non-interest income was $22.4 million, including $14.2 million related to the Transport Financial Solutions (“TFS”) acquisition as described below.
  • Non-interest expense was $59.3 million. Our occupancy, furniture and equipment expense includes $1.4 million related to our decision to consolidate part of our El Paso, TX factoring operations to our TBC headquarters in Coppell, TX.
  • Credit loss expense for the quarter ended December 31, 2020 was $4.7 million. Components of our credit loss expense included:
    • An $8.0 million reduction in current expected losses in the loan portfolio and off balance sheet loan commitments due to improvements in our macroeconomic forecasts.
    • $11.6 million expense due to net increases in specific reserves, including $11.5 million related to the TFS acquisition as discussed below.
    • Net charge-offs of $1.3 million.
  • Triumph Business Capital and TriumphPay processed a combined $4.034 billion in transportation invoice payments.
  • The total dollar value of invoices purchased by Triumph Business Capital was $2.461 billion with an average invoice size of $2,070. The transportation average invoice size for the quarter was $1,943.
  • TriumphPay processed 1,758,865 invoices paying carriers a total of $1.815 billion.

Balance Sheet

Total loans held for investment increased $143.9 million, or 3.0%, during the fourth quarter to $4.997 billion at December 31, 2020. Average loans for the quarter increased $350.7 million, or 7.7%, to $4.877 billion. The commercial finance portfolio increased $187.5 million, or 11.1%, to $1.874 billion, the national lending portfolio increased $33.8 million, or 2.8%, to $1.222 billion, and the community banking portfolio decreased $77.5 million, or 3.9%, to $1.901 billion during the quarter.

Total deposits were $4.717 billion at December 31, 2020, an increase of $468.5 million, or 11.0%, in the fourth quarter of 2020. Non-interest-bearing deposits accounted for 29% of total deposits and non-time deposits accounted for 70% of total deposits at December 31, 2020.  

Asset Quality and Allowance for Credit Loss

Non-performing assets were 1.15% of total assets at December 31, 2020 compared to 1.52% of total assets at September 30, 2020. The ratio of past due to total loans increased to 3.22% at December 31, 2020 from 2.40% at September 30, 2020. These ratios were impacted by items related to our TFS acquisition, as discussed below.

We recorded total net charge-offs of $1.3 million, or 0.03% of average loans, for the quarter ended December 31, 2020. Net charge-offs for the year ended December 31, 2020 were 0.10% of average loans.

Our ACL as a percentage of loans held for investment increased 4 basis points during the quarter to 1.92% at December 31, 2020. The recorded reserves on the acquired over-formula advance portfolio contributed 97 basis points to the ratio at December 31, 2020.

CARES Act and Paycheck Protection Program

As of December 31, 2020, our balance sheet reflected deferrals on outstanding loan balances of $104.6 million to assist customers impacted by COVID-19. Modifications related to the COVID-19 pandemic and qualifying under the provisions of Section 4013 of the CARES Act are not considered troubled debt restructurings. As of December 31, 2020, these deferred balances carried accrued interest of $0.7 million.

As of December 31, 2020, we carried 1,913 PPP loans representing a balance of $189.9 million classified as commercial loans. We have received approximately $7.7 million in total fees from the SBA, $2.0 million and $4.6 million of which were recognized in earnings during the three and twelve months ended December 31, 2020, respectively. The remaining fees will be amortized over the respective lives of the loans.

Items related to our July 2020 acquisition of TFS

As disclosed on our SEC Forms 8-K filed on July 8, 2020 and September 23, 2020, we acquired the transportation factoring assets of TFS, a wholly owned subsidiary of Covenant Logistics Group, Inc. ("CVLG"), and subsequently amended the terms of that transaction. Developments related to that transaction impacted our operating results for the three months ended December 31, 2020, as well as our asset quality statistics for December 31, 2020, as follows:

  • We recognized $8.9 million of non-interest income for the three months ended December 31, 2020 related to CVLG’s delivery of proceeds to us resulting from the liquidation of its acquired stock in connection with the September 23, 2020 Account Management Agreement, Amendment to Purchase Agreement and Mutual Release.
  • We recorded $11.5 million in credit loss expense to increase the specific reserve on over-advances to the largest over-formula advance carrier. This expense was partially offset by a $5.3 million increase in our indemnification asset, which was recorded to other noninterest income.
  • Approximately 17 basis points of our 1.15% nonperforming assets ratio at December 31, 2020 consisted of $10.0 million of the acquired over-formula advance portfolio which represents the portion that is not covered by CVLG’s indemnification. An additional 10 basis points of this ratio at December 31, 2020 consisted of $6.0 million of the Misdirected Payments, as discussed below.
  • Approximately 1.24% of our 3.22% past-due loan ratio at December 31, 2020 consisted of $62.2 million of past due factored receivables related to the over-formula advance portfolio. An additional 39 basis points of this ratio at December 31, 2020 consisted of the $19.6 million of Misdirected Payments, as discussed below.
  • At year end, the face value of the acquired over-formula advances was $62.1 million, the total reserve on acquired over-formula advances was $48.5 million and the balance of our indemnification asset, the value of the payment that would be due to us from CVLG in the event that these over-advances are charged off, was $35.8 million.

As of December 31, 2020 we carry a separate $19.6 million receivable (the “Misdirected Payments”) payable by the United States Postal Service (“USPS”) arising from accounts factored to the largest over-formula advance carrier. This amount is separate from the aforementioned over-formula advances. The amounts represented by this receivable were paid by the USPS directly to such customer in contravention of notices of assignment delivered to, and previously honored by, the USPS, which amount was then not remitted back to us by such customer as required. The USPS disputes their obligation to make such payment, citing purported deficiencies in the notices delivered to them. In addition to commencing litigation against such customer, we have also filed a declaratory judgment action in Federal District Court for the Southern District of Florida seeking a ruling that the USPS was obligated to make the payments represented by this receivable directly to us. Based on our legal analysis and discussions with our counsel advising us on this matter, we believe it is probable that we will prevail in such action and that the USPS will have the capacity to make payment on such receivable. Consequently, we have not reserved for such balance as of December 31, 2020. The full amount of such receivable is reflected as past due factored receivables as of December 31, 2020, and $6.0 million of such receivable, reflecting the portion of such receivable that was greater than 90 days past due, is included in our non-performing asset calculation as of December 31, 2020 in accordance with our policy.

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 Friday, January 22, 2021. Todd Ritterbusch, Chief Lending Officer, and Geoff Brenner, Triumph Business Capital CEO, 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/tbk210122.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; the impact of COVID-19 on our business, including the impact of the actions taken by governmental authorities to try and contain the virus or address the impact of the virus on the United States economy (including, without limitation, the CARES Act), and the resulting effect of all of such items on our operations, liquidity and capital position, and on the financial condition of our borrowers and other customers; our ability to mitigate our risk exposures; our ability to maintain our historical earnings trends; changes in management personnel; interest rate risk; concentration of our products and services in the transportation industry; credit risk associated with our loan portfolio; lack of seasoning in our loan portfolio; deteriorating asset quality and higher loan charge-offs; time and effort necessary to resolve nonperforming assets; inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates; risks related to the integration of acquired businesses (including developments related to our acquisition of Transport Financial Solutions and the related over-formula advances) and any future acquisitions; our ability to successfully identify and address the risks associated with our possible future acquisitions, and the risks that our prior and possible future acquisitions make it more difficult for investors to evaluate our business, financial condition and results of operations, and impairs our ability to accurately forecast our future performance; lack of liquidity; fluctuations in the fair value and liquidity of the securities we hold for sale; impairment of investment securities, goodwill, other intangible assets or deferred tax assets; our risk management strategies; environmental liability associated with our lending activities; increased competition in the bank and non-bank financial services industries, nationally, regionally or locally, which may adversely affect pricing and terms; the accuracy of our financial statements and related disclosures; material weaknesses in our internal control over financial reporting; system failures or failures to prevent breaches of our network security; the institution and outcome of litigation (including related to our pending litigation with the United States Postal Service and a counterparty relating to certain misdirected payments) and other legal proceedings against us or to which we become subject; changes in carry-forwards of net operating losses; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and their application by our regulators; governmental monetary and fiscal policies; changes in the scope and cost of FDIC, insurance and other coverages; failure to receive regulatory approval for future acquisitions; and increases in our capital requirements.

While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. All forward-looking statements are necessarily only estimates of future results. Accordingly, actual results may differ materially from those expressed in or contemplated by the particular forward-looking statement, and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" and the forward-looking statement disclosure contained in Triumph’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 11, 2020 and its Quarterly Report on Form 10-Q, filed with the SEC on October 20, 2020.

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 Years Ended 
  December 31,  September 30,  June 30,  March 31,  December 31,  December 31,  December 31, 
(Dollars in thousands) 2020  2020  2020  2020  2019  2020  2019 
Financial Highlights:                            
Total assets $5,935,791  $5,836,787  $5,617,493  $5,353,729  $5,060,297  $5,935,791  $5,060,297 
Loans held for investment $4,996,776  $4,852,911  $4,393,311  $4,320,548  $4,194,512  $4,996,776  $4,194,512 
Deposits $4,716,600  $4,248,101  $4,062,332  $3,682,015  $3,789,906  $4,716,600  $3,789,906 
Net income available to common stockholders $31,328  $22,005  $13,440  $(4,450) $16,709  $62,323  $58,544 
                             
Performance Ratios - Annualized:                            
Return on average assets  2.21%  1.65%  0.99%  (0.36%)  1.31%  1.18%  1.23%
Return on average total equity  17.73%  13.24%  8.86%  (2.85%)  10.24%  9.67%  9.04%
Return on average common equity  18.44%  13.61%  8.94%  (2.85%)  10.24%  9.77%  9.04%
Return on average tangible common equity (1)  25.70%  19.43%  12.96%  (4.09%)  14.54%  13.92%  12.93%
Yield on loans(2)  7.20%  7.05%  6.52%  7.22%  7.48%  7.00%  7.75%
Cost of interest bearing deposits  0.54%  0.79%  1.08%  1.34%  1.45%  0.93%  1.40%
Cost of total deposits  0.38%  0.56%  0.79%  1.05%  1.15%  0.67%  1.12%
Cost of total funds  0.51%  0.67%  0.85%  1.23%  1.35%  0.80%  1.36%
Net interest margin(2)  6.20%  5.83%  5.11%  5.63%  5.72%  5.71%  5.92%
Net non-interest expense to average assets  2.54%  3.23%  2.40%  3.88%  3.46%  2.98%  3.61%
Adjusted net non-interest expense to average assets (1)  2.54%  3.17%  3.11%  3.88%  3.46%  3.14%  3.61%
Efficiency ratio  55.95%  65.15%  62.56%  78.24%  70.15%  64.35%  70.99%
Adjusted efficiency ratio (1)  55.95%  64.18%  70.75%  78.24%  70.15%  65.97%  70.99%
                             
Asset Quality:(3)                            
Past due to total loans(4)  3.22%  2.40%  1.50%  1.99%  1.74%  3.22%  1.74%
Non-performing loans to total loans  1.16%  1.17%  1.27%  1.26%  0.97%  1.16%  0.97%
Non-performing assets to total assets  1.15%  1.52%  1.20%  1.09%  0.87%  1.15%  0.87%
ACL to non-performing loans(5)  164.98%  159.67%  97.66%  82.37%  71.63%  164.98%  71.63%
ACL to total loans(5)  1.92%  1.88%  1.24%  1.04%  0.69%  1.92%  0.69%
Net charge-offs to average loans  0.03%  0.02%  0.02%  0.04%  0.08%  0.10%  0.17%
                             
Capital:                            
Tier 1 capital to average assets(6)  10.80%  10.75%  9.98%  9.62%  10.03%  10.80%  10.03%
Tier 1 capital to risk-weighted assets(6)  10.60%  10.32%  10.57%  9.03%  10.29%  10.60%  10.29%
Common equity tier 1 capital to risk-weighted assets(6)  9.05%  8.72%  8.84%  8.24%  9.46%  9.05%  9.46%
Total capital to risk-weighted assets(5)  13.03%  12.94%  13.44%  11.63%  12.76%  13.03%  12.76%
Total equity to total assets  12.24%  11.89%  11.69%  11.01%  12.58%  12.24%  12.58%
Tangible common stockholders' equity to tangible assets(1)  8.56%  8.09%  7.84%  7.77%  9.16%  8.56%  9.16%
                             
Per Share Amounts:                            
Book value per share $27.42  $26.11  $25.28  $24.45  $25.50  $27.42  $25.50 
Tangible book value per share (1) $19.78  $18.38  $17.59  $16.64  $17.88  $19.78  $17.88 
Basic earnings (loss) per common share $1.27  $0.89  $0.56  $(0.18) $0.67  $2.56  $2.26 
Diluted earnings (loss) per common share $1.25  $0.89  $0.56  $(0.18) $0.66  $2.53  $2.25 
Adjusted diluted earnings per common share(1) $1.25  $0.91  $0.25  $(0.18) $0.66  $2.26  $2.25 
Shares outstanding end of period  24,868,218   24,851,601   24,202,686   24,101,120   24,964,961   24,868,218   24,964,961 
                             

Unaudited consolidated balance sheet as of:

  December 31,  September 30,  June 30,  March 31,  December 31, 
(Dollars in thousands) 2020  2020  2020  2020  2019 
ASSETS                    
Total cash and cash equivalents $314,393  $288,278  $437,064  $208,414  $197,880 
Securities - available for sale  224,310   242,802   331,126   302,122   248,820 
Securities - held to maturity, net  5,919   6,096   6,285   8,217   8,417 
Equity securities  5,826   6,040   6,411   5,678   5,437 
Loans held for sale  24,546   36,716   50,382   4,431   2,735 
Loans held for investment  4,996,776   4,852,911   4,393,311   4,320,548   4,194,512 
Allowance for credit losses  (95,739)  (90,995)  (54,613)  (44,732)  (29,092)
Loans, net  4,901,037   4,761,916   4,338,698   4,275,816   4,165,420 
Assets held for sale           97,895    
FHLB and other restricted stock  6,751   18,464   26,345   37,080   19,860 
Premises and equipment, net  103,404   105,455   107,736   98,363   96,595 
Other real estate owned ("OREO"), net  1,432   1,704   1,962   2,540   3,009 
Goodwill and intangible assets, net  189,922   192,041   186,162   188,208   190,286 
Bank-owned life insurance  41,608   41,440   41,298   41,122   40,954 
Deferred tax asset, net  6,427   7,716   8,544   9,457   3,812 
Indemnification asset  36,225   31,218          
Other assets  73,991   96,901   75,480   74,386   77,072 
Total assets $5,935,791  $5,836,787  $5,617,493  $5,353,729  $5,060,297 
LIABILITIES                    
Non-interest bearing deposits $1,352,785  $1,315,900  $1,120,949  $846,412  $809,696 
Interest bearing deposits  3,363,815   2,932,201   2,941,383   2,835,603   2,980,210 
Total deposits  4,716,600   4,248,101   4,062,332   3,682,015   3,789,906 
Customer repurchase agreements  3,099   14,192   6,732   3,693   2,033 
Federal Home Loan Bank advances  105,000   435,000   455,000   850,000   430,000 
Payment Protection Program Liquidity Facility  191,860   223,713   223,809       
Subordinated notes  87,509   87,455   87,402   87,347   87,327 
Junior subordinated debentures  40,072   39,944   39,816   39,689   39,566 
Other liabilities  64,870   94,540   85,531   101,638   74,875 
Total liabilities  5,209,010   5,142,945   4,960,622   4,764,382   4,423,707 
EQUITY                    
Preferred Stock  45,000   45,000   45,000       
Common stock  280   279   273   272   272 
Additional paid-in-capital  489,151   488,094   472,795   474,441   473,251 
Treasury stock, at cost  (103,052)  (102,942)  (102,888)  (102,677)  (67,069)
Retained earnings  289,583   258,254   236,249   222,809   229,030 
Accumulated other comprehensive income (loss)  5,819   5,157   5,442   (5,498)  1,106 
Total stockholders' equity  726,781   693,842   656,871   589,347   636,590 
Total liabilities and equity $5,935,791  $5,836,787  $5,617,493  $5,353,729  $5,060,297 
                     

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) 2020  2020  2020  2020  2019  2020  2019 
Interest income:                            
Loans, including fees $50,723  $48,774  $50,394  $48,323  $52,395  $198,214  $195,648 
Factored receivables, including fees  37,573   31,468   21,101   24,292   25,573   114,434   101,257 
Securities  1,519   1,927   2,676   2,107   2,379   8,229   10,474 
FHLB and other restricted stock  56   122   148   204   165   530   712 
Cash deposits  68   73   79   488   659   708   3,062 
Total interest income  89,939   82,364   74,398   75,414   81,171   322,115   311,153 
Interest expense:                            
Deposits  4,308   5,834   7,584   9,677   10,961   27,403   40,225 
Subordinated notes  1,347   1,348   1,321   1,347   1,035   5,363   3,553 
Junior subordinated debentures  452   462   554   646   687   2,114   2,910 
Other borrowings  234   341   688   1,244   2,080   2,507   8,562 
Total interest expense  6,341   7,985   10,147   12,914   14,763   37,387   55,250 
Net interest income  83,598   74,379   64,251   62,500   66,408   284,728   255,903 
Credit loss expense (benefit)  4,680   (258)  13,609   20,298   382   38,329   7,942 
Net interest income after credit loss expense  78,918   74,637   50,642   42,202   66,026   246,399   247,961 
Non-interest income:                            
Service charges on deposits  1,643   1,470   573   1,588   1,889   5,274   7,132 
Card income  1,949   2,091   1,941   1,800   1,943   7,781   7,873 
Net OREO gains (losses) and valuation adjustments  (217)  (41)  (101)  (257)  50   (616)  351 
Net gains (losses) on sale of securities  16   3,109   63   38   39   3,226   61 
Fee income  1,615   1,402   1,304   1,686   1,686   6,007   6,441 
Insurance commissions  1,327   990   864   1,051   1,092   4,232   4,219 
Gain on sale of subsidiary        9,758         9,758    
Other  16,053   1,472   5,627   1,571   1,967   24,723   5,492 
Total non-interest income  22,386   10,493   20,029   7,477   8,666   60,385   31,569 
Non-interest expense:                            
Salaries and employee benefits  33,798   31,651   30,804   30,722   29,586   126,975   112,862 
Occupancy, furniture and equipment  7,046   5,574   4,964   5,182   4,667   22,766   18,196 
FDIC insurance and other regulatory assessments  350   360   495   315   (302)  1,520   298 
Professional fees  2,326   3,265   1,651   2,107   1,904   9,349   7,288 
Amortization of intangible assets  2,065   2,141   2,046   2,078   2,154   8,330   9,131 
Advertising and promotion  1,170   1,105   1,151   1,292   1,347   4,718   6,126 
Communications and technology  5,639   5,569   5,444   5,501   5,732   22,153   20,976 
Other  6,904   5,632   6,171   7,556   7,573   26,263   29,207 
Total non-interest expense  59,298   55,297   52,726   54,753   52,661   222,074   204,084 
Net income (loss) before income tax  42,006   29,833   17,945   (5,074)  22,031   84,710   75,446 
Income tax expense (benefit)  9,876   6,929   4,505   (624)  5,322   20,686   16,902 
Net income (loss) $32,130  $22,904  $13,440  $(4,450) $16,709  $64,024  $58,544 
Dividends on preferred stock  (802)  (899)           (1,701)   
Net income available to common stockholders $31,328  $22,005  $13,440  $(4,450) $16,709  $62,323  $58,544 
                             

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) 2020  2020  2020  2020  2019  2020  2019 
Basic                            
Net income (loss) to common stockholders $31,328  $22,005  $13,440  $(4,450) $16,709  $62,323  $58,544 
Weighted average common shares outstanding  24,653,099   24,592,092   23,987,049   24,314,329   25,089,447   24,387,932   25,941,395 
Basic earnings (loss) per common share $1.27  $0.89  $0.56  $(0.18) $0.67  $2.56  $2.26 
                             
Diluted                            
Net income (loss) to common stockholders - diluted $31,328  $22,005  $13,440  $(4,450) $16,709  $62,323  $58,544 
Weighted average common shares outstanding  24,653,099   24,592,092   23,987,049   24,314,329   25,089,447   24,387,932   25,941,395 
Dilutive effects of:                            
Assumed exercises of stock options  101,664   48,102   38,627      69,865   64,104   63,808 
Restricted stock awards  136,239   67,907   37,751      70,483   86,498   47,242 
Restricted stock units  50,156   18,192   4,689      13,264   25,978   3,441 
Performance stock units - market based  112,228   76,095   6,326      11,803   51,304   4,119 
Performance stock units - performance based                     
Weighted average shares outstanding - diluted  25,053,386   24,802,388   24,074,442   24,314,329   25,254,862   24,615,816   26,060,005 
Diluted earnings (loss) per common share $1.25  $0.89  $0.56  $(0.18) $0.66  $2.53  $2.25 
                             
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, 
  2020  2020  2020  2020  2019  2020  2019 
Stock options     98,513   148,528   225,055   66,019   64,947   66,019 
Restricted stock awards        109,834   147,748          
Restricted stock units        38,801   55,228          
Performance stock units - market based        76,461   67,707   55,228      55,228 
Performance stock units - performance based  256,625   261,125   262,625   254,000   254,000   256,625   254,000 
                             

Loans held for investment summarized as of:

  December 31,  September 30,  June 30,  March 31,  December 31, 
(Dollars in thousands) 2020  2020  2020  2020  2019 
Commercial real estate $779,158  $762,531  $910,261  $985,757  $1,046,961 
Construction, land development, land  219,647   244,512   213,617   198,050   160,569 
1-4 family residential properties  157,147   164,785   168,707   169,703   179,425 
Farmland  103,685   110,966   125,259   133,579   154,975 
Commercial  1,562,957   1,536,903   1,518,656   1,412,822   1,342,683 
Factored receivables  1,120,770   1,016,337   561,576   661,100   619,986 
Consumer  15,838   17,106   18,450   20,326   21,925 
Mortgage warehouse  1,037,574   999,771   876,785   739,211   667,988 
Total loans $4,996,776  $4,852,911  $4,393,311  $4,320,548  $4,194,512 
                     

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:

  December 31,  September 30,  June 30,  March 31,  December 31, 
(Dollars in thousands) 2020  2020  2020  2020  2019 
Commercial - Equipment $573,163  $509,849  $487,145  $479,483  $461,555 
Commercial - Asset-based lending  180,488   160,711   176,235   245,001   168,955 
Factored receivables  1,120,770   1,016,337   561,576   661,100   619,986 
Commercial finance $1,874,421  $1,686,897  $1,224,956  $1,385,584  $1,250,496 
                     
Commercial finance % of total loans  38%  35%  28%  32%  30%

National lending loans are further summarized below:

  December 31,  September 30,  June 30,  March 31,  December 31, 
(Dollars in thousands) 2020  2020  2020  2020  2019 
Mortgage warehouse $1,037,574  $999,771  $876,785  $739,211  $667,988 
Commercial - Liquid credit  184,027   188,034   192,118   172,380   81,353 
Commercial - Premium finance              101,015 
National lending $1,221,601  $1,187,805  $1,068,903  $911,591  $850,356 
                     
National lending % of total loans  24%  24%  24%  21%  20%

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

  December 31,  September 30,  June 30,  March 31,  December 31, 
(Dollars in thousands) 2020  2020  2020  2020  2019 
Average community banking $1,963,435  $2,047,059  $2,111,615  $2,041,256  $2,170,149 
Average commercial finance  1,798,550   1,480,593   1,259,584   1,292,749   1,260,000 
Average national lending  1,114,822   998,411   1,038,476   711,837   704,244 
Average total loans $4,876,807  $4,526,063  $4,409,675  $4,045,842  $4,134,393 
Community banking yield  5.46%  5.05%  5.23%  5.67%  5.89%
Commercial finance yield  10.74%  11.23%  10.21%  11.00%  11.64%
National lending yield  4.58%  4.98%  4.67%  4.80%  4.96%
Total loan yield  7.20%  7.05%  6.52%  7.22%  7.48%

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, 
  2020  2020  2020  2020  2019 
Factored receivable period end balance $1,036,369,000  $948,987,000  $528,379,000  $641,366,000  $573,372,000 
Yield on average receivable balance  13.81%  15.65%  15.48%  16.13%  17.20%
Rolling twelve quarter annual charge-off rate  0.37%  0.43%  0.43%  0.42%  0.39%
Factored receivables - transportation concentration  89%  88%  85%  80%  81%
                     
Interest income, including fees $35,439,000  $30,068,000  $20,387,000  $23,497,000  $24,813,000 
Non-interest income(1)  1,358,000   1,157,000   1,072,000   1,296,000   1,154,000 
Factored receivable total revenue  36,797,000   31,225,000   21,459,000   24,793,000   25,967,000 
Average net funds employed  924,899,000   694,170,000   477,112,000   537,138,000   524,546,000 
Yield on average net funds employed  15.83%  17.89%  18.09%  18.56%  19.64%
                     
Accounts receivable purchased $2,461,249,000  $1,984,490,000  $1,238,465,000  $1,450,618,000  $1,489,538,000 
Number of invoices purchased  1,189,271   1,027,839   812,902   878,767   896,487 
Average invoice size $2,070  $1,931  $1,524  $1,651  $1,662 
Average invoice size - transportation $1,943  $1,787  $1,378  $1,481  $1,507 
Average invoice size - non-transportation $5,091  $5,181  $4,486  $4,061  $3,891 

(1)  Total factoring segment non-interest income was $15.5 million and $3.2 million for the three months ended December 31, 2020 and September 30, 2020, respectively. December 31, 2020 non-interest income used to calculate yield on average net funds employed excludes a gain of $8.9 million during the quarter then ended related to CVLG’s delivery of proceeds resulting from the liquidation of its acquired stock. Also excluded from noninterest income used to calculate yield on average net funds employed for the quarter ended December 31, 2020 is a $5.3 million increase in the value of our indemnification asset. September 30, 2020 non-interest income used to calculate yield on average net funds employed excludes a $2.0 million gain recognized during the quarter then ended on the increased value of the receivable due from CVLG.

Deposits summarized as of:

  December 31,  September 30,  June 30,  March 31,  December 31, 
(Dollars in thousands) 2020  2020  2020  2020  2019 
Non-interest bearing demand $1,352,785  $1,315,900  $1,120,949  $846,412  $809,696 
Interest bearing demand  688,680   634,272   648,309   583,445   580,323 
Individual retirement accounts  92,584   94,933   97,388   101,743   104,472 
Money market  393,325   384,476   397,914   412,376   497,105 
Savings  421,488   405,954   391,624   367,163   363,270 
Certificates of deposit  790,844   857,514   937,766   1,056,012   1,084,425 
Brokered time deposits  516,786   344,986   258,378   314,864   350,615 
Other brokered deposits  460,108   210,066   210,004       
Total deposits $4,716,600  $4,248,101  $4,062,332  $3,682,015  $3,789,906 
                     

Net interest margin summarized for the three months ended:

  December 31, 2020  September 30, 2020 
  Average      Average  Average      Average 
(Dollars in thousands) Balance  Interest  Rate  Balance  Interest  Rate 
Interest earning assets:                        
Interest earning cash balances $230,893  $68   0.12% $224,958  $73   0.13%
Taxable securities  202,867   1,283   2.52%  259,470   1,674   2.57%
Tax-exempt securities  37,070   236   2.53%  39,847   253   2.53%
FHLB and other restricted stock  15,759   56   1.41%  22,121   122   2.19%
Loans  4,876,807   88,296   7.20%  4,526,063   80,242   7.05%
Total interest earning assets $5,363,396  $89,939   6.67% $5,072,459  $82,364   6.46%
Non-interest earning assets:                        
Other assets  425,153           446,249         
Total assets $5,788,549          $5,518,708         
Interest bearing liabilities:                        
Deposits:                        
Interest bearing demand $662,458  $235   0.14% $635,287  $207   0.13%
Individual retirement accounts  94,328   250   1.05%  95,962   300   1.24%
Money market  395,900   257   0.26%  385,620   263   0.27%
Savings  413,214   157   0.15%  400,102   152   0.15%
Certificates of deposit  814,954   2,633   1.29%  905,075   3,782   1.66%
Brokered time deposits  221,346   528   0.95%  247,928   941   1.51%
Other brokered deposits  560,805   248   0.18%  251,701   189   0.30%
Total interest bearing deposits  3,163,005   4,308   0.54%  2,921,675   5,834   0.79%
Federal Home Loan Bank advances  80,217   43   0.21%  255,163   143   0.22%
Subordinated notes  87,476   1,347   6.13%  87,425   1,348   6.13%
Junior subordinated debentures  39,996   452   4.50%  39,874   462   4.61%
Other borrowings  223,501   191   0.34%  236,297   198   0.33%
Total interest bearing liabilities $3,594,195  $6,341   0.70% $3,540,434  $7,985   0.90%
Non-interest bearing liabilities and equity:                        
Non-interest bearing demand deposits  1,392,389           1,213,494         
Other liabilities  81,073           76,453         
Total equity  720,892           688,327         
Total liabilities and equity $5,788,549          $5,518,708         
Net interest income     $83,598          $74,379     
Interest spread          5.97%          5.56%
Net interest margin          6.20%          5.83%
                         

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

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) 2020  2020  2020  2020  2019  2020  2019 
Net income available to common stockholders $31,328  $22,005  $13,440  $(4,450) $16,709  $62,323  $58,544 
Transaction costs     827            827    
Gain on sale of subsidiary or division        (9,758)        (9,758)   
Tax effect of adjustments     (197)  2,451         2,254    
Adjusted net income available to common stockholders - diluted $31,328  $22,635  $6,133  $(4,450) $16,709  $55,646  $58,544 
                             
Weighted average shares outstanding - diluted  25,053,386   24,802,388   24,074,442   24,314,329   25,254,862   24,615,816   26,060,005 
Adjusted diluted earnings per common share $1.25  $0.91  $0.25  $(0.18) $0.66  $2.26  $2.25 
                             
Average total stockholders' equity $720,892  $688,327  $610,258  $627,369  $647,546  $661,942  $647,726 
Average preferred stock liquidation preference  (45,000)  (45,000)  (5,934)        (24,099)   
Average total common stockholders' equity  675,892   643,327   604,324   627,369   647,546   637,843   647,726 
Average goodwill and other intangibles  (191,017)  (192,682)  (187,255)  (189,359)  (191,551)  (190,088)  (194,905)
Average tangible common stockholders' equity $484,875  $450,645  $417,069  $438,010  $455,995  $447,755  $452,821 
                             
Net income available to common stockholders $31,328  $22,005  $13,440  $(4,450) $16,709  $62,323  $58,544 
Average tangible common equity  484,875   450,645   417,069   438,010   455,995   447,755   452,821 
Return on average tangible common equity  25.70%  19.43%  12.96%  (4.09%)  14.54%  13.92%  12.93%
                             
Net interest income $83,598  $74,379  $64,251  $62,500  $66,408  $284,728  $255,903 
Non-interest income  22,386   10,493   20,029   7,477   8,666   60,385   31,569 
Operating revenue  105,984   84,872   84,280   69,977   75,074   345,113   287,472 
Gain on sale of subsidiary or division        (9,758)        (9,758)   
Adjusted operating revenue $105,984  $84,872  $74,522  $69,977  $75,074  $335,355  $287,472 
Non-interest expenses $59,298  $55,297  $52,726  $54,753  $52,661  $222,074  $204,084 
Transaction costs     (827)           (827)   
Adjusted non-interest expenses $59,298  $54,470  $52,726  $54,753  $52,661  $221,247  $204,084 
Adjusted efficiency ratio  55.95%  64.18%  70.75%  78.24%  70.15%  65.97%  70.99%
                             
Adjusted net non-interest expense to average assets ratio:                            
Non-interest expenses $59,298  $55,297  $52,726  $54,753  $52,661  $222,074  $204,084 
Transaction costs     (827)           (827)   
Adjusted non-interest expenses $59,298  $54,470  $52,726  $54,753  $52,661  $221,247  $204,084 
Total non-interest income $22,386  $10,493  $20,029  $7,477  $8,666  $60,385  $31,569 
Gain on sale of subsidiary or division        (9,758)        (9,758)   
Adjusted non-interest income $22,386  $10,493  $10,271  $7,477  $8,666  $50,627  $31,569 
Adjusted net non-interest expenses $36,912  $43,977  $42,455  $47,276  $43,995  $170,620  $172,515 
Average total assets $5,788,549  $5,518,708  $5,487,072  $4,906,547  $5,050,860  $5,426,469  $4,773,652 
Adjusted net non-interest expense to average assets ratio  2.54%  3.17%  3.11%  3.88%  3.46%  3.14%  3.61%
                             
Total stockholders' equity $726,781  $693,842  $656,871  $589,347  $636,590  $726,781  $636,590 
Preferred stock liquidation preference  (45,000)  (45,000)  (45,000)        (45,000)   
Total common stockholders' equity  681,781   648,842   611,871   589,347   636,590   681,781   636,590 
Goodwill and other intangibles  (189,922)  (192,041)  (186,162)  (188,208)  (190,286)  (189,922)  (190,286)
Tangible common stockholders' equity $491,859  $456,801  $425,709  $401,139  $446,304  $491,859  $446,304 
Common shares outstanding  24,868,218   24,851,601   24,202,686   24,101,120   24,964,961   24,868,218   24,964,961 
Tangible book value per share $19.78  $18.38  $17.59  $16.64  $17.88  $19.78  $17.88 
                             
Total assets at end of period $5,935,791  $5,836,787  $5,617,493  $5,353,729  $5,060,297  $5,935,791  $5,060,297 
Goodwill and other intangibles  (189,922)  (192,041)  (186,162)  (188,208)  (190,286)  (189,922)  (190,286)
Tangible assets at period end $5,745,869  $5,644,746  $5,431,331  $5,165,521  $4,870,011  $5,745,869  $4,870,011 
Tangible common stockholders' equity ratio  8.56%  8.09%  7.84%  7.77%  9.16%  8.56%  9.16%
                             

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 Years Ended 
  December 31,  September 30,  June 30,  March 31,  December 31,  December 31,  December 31, 
(Dollars in thousands) 2020  2020  2020  2020  2019  2020  2019 
Loan discount accretion $2,334  $4,104  $2,139  $2,134  $1,555  $10,711  $5,568 

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

4) Past due ratio has been revised to exclude nonaccrual loans with contractual payments less than 30 days past due.

5) Beginning January 1, 2020, the allowance for credit losses was calculated in accordance with Accounting Standards Codification Topic 326, “Financial Instruments – Credit Losses” (“ASC 326”).

6) Current quarter ratios are preliminary.

Source: Triumph Bancorp, Inc.

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

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