DALLAS, March 4, 2015 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (Nasdaq:TBK) today announced earnings and operating results for the fourth quarter and full year of 2014.
"Our 2014 results reflect a year of substantial accomplishments and progress as we completed our first full year of consolidated operations with our Triumph Community Bank subsidiary, experienced continued strong loan growth and yields in our national commercial finance lending platforms and issued two collateralized loan obligations ("CLOs") at our asset management subsidiary. We also completed the initial public offering of our common stock in the fourth quarter of 2014," said Aaron P. Graft, Chief Executive Officer, Triumph Bancorp, Inc. "The completion of our initial public offering has us well positioned with the capital and liquidity to pursue our strategy of supplementing strong organic loan growth with acquisitions to improve our deposit mix and operating leverage."
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 document.
2014 Annual and 4th Quarter Highlights
- Triumph Bancorp, Inc. reported net income of $19.8 million and net income available to common stockholders of $16.9 million for the year ended December 31, 2014, compared to net income of $13.4 million and net income available to common stockholders of $11.8 million for the year ended December 31, 2013. For the fourth quarter of 2014, net income was $2.8 million and net income available to common stockholders was $2.0 million, compared to net income of $11.7 million and net income available to common stockholders of $11.3 million for the quarter ended December 31, 2013. Net income for 2014 and 2013 was impacted by the recognition of a $12.6 million pretax gain on branch sale in the third quarter of 2014 and a $9.0 million bargain purchase gain in the fourth quarter of 2013, respectively.
- Fully diluted earnings per share were $1.52 for the year ended December 31, 2014, compared to $1.39 for the same period in 2013. Diluted earnings per share were $0.14 for the quarter ended December 31, 2014, compared to $1.12 for the same period in 2013. Earnings per share results were impacted during 2014 as a result of 7,705,000 shares of common stock issued in the Company's initial public offering completed in November 2014. This offering increased common equity by $83.8 million.
- Return on average common equity was 11.61% and return on average assets was 1.46% for the year ended December 31, 2014, compared to 11.98% and 2.40%, respectively, for the year ended December 31, 2013. For the quarter ended December 31, 2014, our annualized return on average common equity and return on average assets were 4.30% and 0.78%, compared to 37.88% and 3.99% for the quarter ended December 31, 2013.
Recent Developments
On March 3, 2015, Triumph Capital Advisors, LLC, a wholly owned subsidiary of Triumph Bancorp, Inc., acquired all of the equity of Doral Money, Inc. ("Doral Money"), a subsidiary of Doral Bank, in connection with the Federal Deposit Insurance Corporation's ("FDIC") auction process for Doral Bank. As a result of this transaction, Triumph Capital Advisors also acquired the management contracts to two active CLOs consisting of approximately $703 million in assets under management, bringing Triumph Capital Advisors' outstanding assets under management ("AUM") to approximately $1.7 billion, including both active CLOs and warehouse assets. In addition to the CLO management contracts being acquired, the primary assets of Doral Money consist of loans with a face value of approximately $37 million, which were acquired as part of the transaction, and certain securities of the CLOs, which were divested to a third party following the closing as part of an agreement entered into by Triumph Capital Advisors in connection with the transaction.
Balance Sheet
Total loans held for investment were $1.0 billion at December 31, 2014, an increase of $124.8 million or 14.2% for our full 2014 fiscal year, and $28.7 million or 2.9%, during the fourth quarter. This increase was primarily due to continued growth in our commercial finance loan portfolio, which consists of our factored receivables, the asset based loans and equipment loans we originate under our Triumph Commercial Finance brand, and the healthcare asset based loans we originate under our Triumph Healthcare Finance brand. In aggregate, our commercial finance loan portfolio totaled $375.4 million as of December 31, 2014, an increase of $178.2 million or 90.4% in 2014, and $20.9 million or 5.9% in the fourth quarter of 2014.
Total deposits were $1.2 billion at December 31, 2014, an increase of $120.4 million or 11.5% for our full 2014 fiscal year, and $59.6 million or 5.4% for the fourth quarter of 2014. Noninterest-bearing deposits accounted for 15.4% of total deposits and non-time deposits accounted 51.9% of total deposits. The average cost of our interest-bearing deposits was 0.61% for the quarter ended December 31, 2014 compared to 0.56% for the quarter ended September 30, 2014, on an annualized basis.
Net Interest Income
We earned net interest income of $80.5 million for our full 2014 fiscal year. For the quarter ended December 31, 2014, we earned net interest income of $21.3 million compared to $20.4 million for the quarter ended September 30, 2014. Yields on loans for the quarter ended December 31, 2014 were up 32 bps to 8.98% (8.29% adjusted for purchase discount accretion) compared to 8.66% (8.03% adjusted for purchase discount accretion) for the quarter ended September 30, 2014, driven primarily by the growth in our commercial finance loan portfolio, both in aggregate and as a percentage of total loans. Net interest margin ("NIM") decreased 11 bps to 6.58% for the quarter ended December 31, 2014 from 6.69% for the quarter ended September 30, 2014. Adjusted net interest margin was 6.05% for the quarter ended December 31, 2014 compared to 6.19% for the quarter ended September 30, 2014. The decrease in net interest margin in the fourth quarter of 2014 (compared to the increase in our yield on loans over the same period) was attributable primarily to the receipt of our initial public offering proceeds during such period.
Asset Quality
Our provision for loan losses was $1.8 million for the quarter ended December 31, 2014 compared to $1.4 million for the quarter ended September 30, 2014. We experienced net charge-offs of $0.3 million for the quarter ended December 31, 2014 compared to net charge-offs of $0.3 million for the quarter ended September 30, 2014. From September 30, 2014 to December 31, 2014, our allowance for loan and lease losses ("ALLL") increased from $7.3 million or 0.75% of total loans to $8.8 million or 0.88% of total loans. Nonperforming Assets ("NPAs") improved 32 bps from September 30, 2014 to December 31, 2014 to 1.73% of total assets.
Noninterest Income and Expense
We earned noninterest income of $24.8 million for our full 2014 fiscal year. For the quarter ended December 31, 2014 we earned noninterest income of $3.7 million compared to $3.2 million (excluding the $12.6 million gain on branch sale) for the quarter ended September 30, 2014. Noninterest income was positively impacted in the fourth quarter of 2014 by approximately $0.7 million in recoveries on loans previously charged off by Triumph Community Bank prior to the Company's acquisition of Triumph Community Bank. We earned $0.5 million in asset management fees during the fourth quarter.
We incurred noninterest expense of $69.2 million for our full 2014 fiscal year. For the quarter ended December 31, 2014, noninterest expense totaled $19.7 million, compared to $18.5 million for the quarter ended September 30, 2014, an increase of $1.2 million. Noninterest expense incurred during the quarter ended December 31, 2014 includes $2.1 million of stock-based compensation expense recognized in connection with the grant of 378,343 shares of common stock to our officers and employees shortly following our initial public offering pursuant to our 2014 Omnibus Incentive Plan. One third of these grants vested at issuance, causing the entire expense impact of the fully vested portion of such grants to be reflected during the quarter.
Income tax expense for the year ended December 31, 2014 was $ 10.4 million or 34.4% of net income before taxes, compared to $2.1 million or 13.7% for the year ended December 31, 2013. The lower effective tax rate in 2013 is substantially due to the nontaxable nature of the $9.0 million bargain purchase gain recognized on the acquisition of Triumph Community Bank. Income tax expense for the year ended December 31, 2014 includes a $1.0 million benefit from the reversal of a valuation allowance on capital loss carryforwards and the revaluation of the Company's net deferred tax asset at a higher effective tax rate based upon the estimated tax rate expected to be in effect when realized.
Other Items
On February 18, 2015, a trademark infringement suit was filed against us and certain of our subsidiaries by a third party asserting that our use of "Triumph" as part of our trademarks and domain names causes a likelihood of confusion and has caused actual confusion, and infringes plaintiffs' trademarks. The suit seeks damages as well as an injunction to prevent our use of the name "Triumph" and certain other matters. We have been served with process with respect to the suit and expect to file a timely answer.
Conference Call Information
Aaron P. Graft, Vice Chairman and CEO, Bryce Fowler, CFO and Dan Karas, Chief Lending Officer of Triumph Savings Bank, will review the quarterly results in a conference call for investors and analysts beginning at 9:00 a.m. Central Time on Thursday, March 5th, 2015.
To participate in the live conference call, please dial 1 (888) 771-4371 (U.S. and Canada) and enter Conference ID # 38868986. A simultaneous audio-only webcast may be accessed via the Company's website at www.triumphbancorp.com through the Investor Relations, Webcasts and Presentations links, or through a direct link here at http://edge.media-server.com/m/p/ni3qzjr3/lan/en. An archive of this conference call will subsequently be available at this same location on the Company's website.
About Triumph
Headquartered in Dallas, Texas, Triumph Bancorp, Inc. (Nasdaq:TBK) is a financial holding company with a diversified line of community banking, commercial finance and asset management activities. www.triumphbancorp.com
Forward-Looking Statements
This presentation 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: our limited operating history as an integrated company; business and economic conditions generally and in the bank and non-bank financial services industries, nationally and within our local market area; our ability to mitigate our risk exposures; our ability to maintain our historical earnings trends; risks related to the integration of acquired businesses 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; risks related to our asset management business; 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 obligations associated with being a public company; 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; increases in our capital requirements; and risk retention requirements under the Dodd-Frank Act.
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 further discussion of these and other factors that could impact our future results, performance or transactions, see the section entitled "Risk Factors" in the most recent registration statement on Form S-1 (the "Prospectus") filed by us with the Securities and Exchange Commission.
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. See page 10 of this press release for additional information.
The following table sets forth key metrics used by Triumph to monitor its operations.
| As of and For the Three Months Ended | |||||
| Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | |
| Key Metrics | 2014 | 2014 | 2014 | 2014 | 2013 |
| Financial Highlights (in thousands) | |||||
| Total assets | $1,447,898 | $1,347,798 | $1,407,072 | $1,297,110 | $1,288,239 |
| Total loans held for investment | 1,005,878 | 977,139 | 939,517 | 800,667 | 881,099 |
| Total deposits | 1,165,229 | 1,105,624 | 1,108,254 | 1,050,312 | 1,044,854 |
| Net income available to common stockholders | $2,021 | $9,495 | $2,285 | $3,148 | $11,318 |
| Performance ratios - annualized(2) | |||||
| Return on average assets | 0.78% | 3.01% | 0.88% | 1.19% | 3.99% |
| Return on average common equity (1) | 4.30% | 26.84% | 7.05% | 10.10% | 37.88% |
| Return on average tangible common equity (ROATCE) (1) | 5.11% | 34.26% | 8.98% | 13.00% | 48.88% |
| Return on average total equity | 5.02% | 23.16% | 7.18% | 9.26% | 31.83% |
| Yield on loans | 8.98% | 8.66% | 8.83% | 9.17% | 9.38% |
| Adjusted yield on loans (1) | 8.29% | 8.03% | 7.75% | 7.73% | 7.69% |
| Cost of interest bearing deposits | 0.61% | 0.56% | 0.50% | 0.50% | 0.55% |
| Cost of total deposits | 0.52% | 0.48% | 0.42% | 0.43% | 0.47% |
| Cost of total funds | 0.65% | 0.59% | 0.53% | 0.56% | 0.59% |
| Net interest margin (1) | 6.58% | 6.69% | 6.58% | 6.85% | 6.68% |
| Adjusted net interest margin (1) | 6.05% | 6.19% | 5.74% | 5.73% | 5.43% |
| Net noninterest expense to average assets (1) | 4.44% | 4.48% | 3.99% | 3.92% | 3.82% |
| Noninterest expense to average assets | 5.47% | 5.41% | 4.77% | 4.75% | 4.99% |
| Efficiency ratio (1) | 78.58% | 78.29% | 71.78% | 69.40% | 69.06% |
| Asset Quality(3) | |||||
| Past due to total loans | 2.57% | 2.61% | 2.82% | 2.99% | 2.78% |
| Nonperforming loans to total loans | 1.66% | 1.80% | 1.54% | 1.32% | 1.41% |
| Nonperforming assets to total assets | 1.73% | 2.05% | 1.82% | 1.86% | 2.03% |
| ALLL to nonperforming loans | 53.02% | 41.68% | 43.16% | 43.92% | 29.41% |
| ALLL to total loans | 0.88% | 0.75% | 0.67% | 0.58% | 0.41% |
| Net charge-offs to average loans | 0.03% | 0.03% | 0.01% | (0.01%) | 0.02% |
| Capital | |||||
| Tier 1 capital to average assets | 15.92% | 12.20% | 11.00% | 11.89% | 12.87% |
| Tier 1 capital to risk-weighted assets | 19.56% | 14.59% | 12.66% | 14.32% | 14.11% |
| Total capital to risk-weighted assets | 20.35% | 15.27% | 13.22% | 14.78% | 14.47% |
| Total equity to total assets | 16.40% | 13.05% | 11.79% | 12.66% | 12.47% |
| Total stockholders' equity to total assets | 16.40% | 11.12% | 9.95% | 10.58% | 10.37% |
| Tangible common stockholders' equity to tangible assets | 14.00% | 8.38% | 7.21% | 7.85% | 7.57% |
| Market | |||||
| Book value per share | $12.68 | $14.18 | $13.23 | $12.94 | $12.60 |
| Tangible book value per share (1) | $11.06 | $11.17 | $10.08 | $10.12 | $9.70 |
| Basic earnings per common share | $0.14 | $0.96 | $0.23 | $0.32 | $1.17 |
| Diluted earnings per common share | $0.14 | $0.91 | $0.23 | $0.32 | $1.12 |
| Shares outstanding end of period | 17,963,783 | 9,886,778 | 9,845,819 | 9,846,096 | 9,832,585 |
| Weighted average shares outstanding - basic | 14,172,889 | 9,872,923 | 9,845,819 | 9,832,735 | 9,675,991 |
| Weighted average shares outstanding - diluted | 14,261,717 | 10,602,155 | 9,910,507 | 10,544,902 | 10,259,904 |
Unaudited consolidated balance sheet as of:
| Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | |
| (Dollars in thousands) | 2014 | 2014 | 2014 | 2014 | 2013 |
| ASSETS | |||||
| Cash and cash equivalents | $160,888 | $75,625 | $85,716 | $106,951 | $85,797 |
| Securities - available for sale | 162,024 | 165,489 | 168,694 | 165,276 | 184,654 |
| Securities - held to maturity | 745 | 745 | 744 | 744 | 743 |
| Loans held for sale | 3,288 | 7,295 | 4,088 | 4,902 | 5,393 |
| Loans held for investment | 1,005,878 | 977,139 | 939,517 | 800,667 | 881,099 |
| Allowance for loan and lease losses | (8,843) | (7,320) | (6,253) | (4,631) | (3,645) |
| Loans, net | 997,035 | 969,819 | 933,264 | 796,036 | 877,454 |
| Branch assets held for sale | — | — | 80,331 | 88,692 | — |
| FHLB and FRB stock | 4,903 | 5,826 | 7,976 | 5,233 | 5,802 |
| Premises and equipment, net | 21,933 | 21,744 | 20,708 | 20,502 | 23,344 |
| Other real estate owned (OREO) | 8,423 | 10,019 | 11,103 | 13,575 | 13,783 |
| Goodwill and intangible assets, net | 29,057 | 29,783 | 31,043 | 27,792 | 28,518 |
| Bank-owned life insurance | 29,083 | 28,955 | 28,829 | 28,695 | 28,554 |
| Other assets | 30,519 | 32,498 | 34,576 | 38,712 | 34,197 |
| Total assets | $1,447,898 | $1,347,798 | $1,407,072 | $1,297,110 | $1,288,239 |
| LIABILITIES | |||||
| Noninterest bearing deposits | $179,848 | $154,750 | $176,245 | $155,879 | $150,238 |
| Interest bearing deposits | 985,381 | 950,874 | 932,009 | 894,433 | 894,616 |
| Total deposits | 1,165,229 | 1,105,624 | 1,108,254 | 1,050,312 | 1,044,854 |
| Customer repurchase agreements | 9,282 | 15,644 | 15,313 | 17,670 | 11,330 |
| Federal Home Loan Bank advances | 3,000 | — | 70,000 | 20,750 | 21,000 |
| Senior secured note | — | 11,630 | 11,944 | 12,259 | 12,573 |
| Junior subordinated debentures | 24,423 | 24,359 | 24,296 | 24,233 | 24,171 |
| Other liabilities | 8,455 | 14,713 | 11,341 | 7,705 | 13,714 |
| Total liabilities | 1,210,389 | 1,171,970 | 1,241,148 | 1,132,929 | 1,127,642 |
| EQUITY | |||||
| Preferred stock series A | 4,550 | 4,550 | 4,550 | 4,550 | 4,550 |
| Preferred stock series B | 5,196 | 5,196 | 5,196 | 5,196 | 5,196 |
| Common stock | 180 | 99 | 98 | 98 | 98 |
| Additional paid-in-capital | 191,049 | 105,304 | 104,827 | 104,744 | 104,631 |
| Treasury stock | (161) | (68) | (4) | — | — |
| Retained earnings | 35,744 | 34,014 | 24,519 | 22,111 | 18,992 |
| Accumulated other comprehensive income | 951 | 836 | 841 | 485 | 133 |
| Total stockholders' equity | 237,509 | 149,931 | 140,027 | 137,184 | 133,600 |
| Noncontrolling interests | — | 25,897 | 25,897 | 26,997 | 26,997 |
| Total equity | 237,509 | 175,828 | 165,924 | 164,181 | 160,597 |
| Total liabilities and equity | $1,447,898 | $1,347,798 | $1,407,072 | $1,297,110 | $1,288,239 |
Unaudited consolidated statement of income for the three months ended:
| Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | |
| (Dollars in thousands) | 2014 | 2014 | 2014 | 2014 | 2013 |
| Interest income: | |||||
| Loans, including fees | $14,138 | $13,706 | $13,860 | $14,376 | $12,906 |
| Factored receivables, including fees | 8,367 | 7,681 | 6,838 | 5,272 | 5,205 |
| Taxable securities | 644 | 666 | 663 | 657 | 618 |
| Tax exempt securities | 14 | 15 | 15 | 16 | 39 |
| Cash deposits | 117 | 50 | 77 | 58 | 74 |
| Total interest income | 23,280 | 22,118 | 21,453 | 20,379 | 18,842 |
| Interest expense: | |||||
| Deposits | 1,498 | 1,289 | 1,141 | 1,108 | 1,103 |
| Federal Home Loan Bank advances | 2 | 19 | 20 | 4 | 9 |
| Senior secured note | 173 | 134 | 137 | 140 | 123 |
| Junior subordinated debentures | 276 | 276 | 272 | 271 | 247 |
| Other | 2 | 5 | 2 | 1 | 2 |
| Total interest expense | 1,951 | 1,723 | 1,572 | 1,524 | 1,484 |
| Net interest income | 21,329 | 20,395 | 19,881 | 18,855 | 17,358 |
| Provision for loan losses | 1,811 | 1,375 | 1,747 | 925 | 1,057 |
| Net interest income after provision for loan losses | 19,518 | 19,020 | 18,134 | 17,930 | 16,301 |
| Noninterest income: | |||||
| Service charges on deposits | 647 | 811 | 813 | 738 | 703 |
| Card income | 516 | 544 | 548 | 490 | 405 |
| Net realized gains/(losses) & valuation adjustments on OREO | (242) | (11) | (252) | (77) | 86 |
| Net gains on sale of securities | 62 | 10 | — | 16 | — |
| Net gains on sale of loans | 437 | 484 | 319 | 255 | 494 |
| Fee income | 553 | 448 | 421 | 398 | 355 |
| Gain on branch sale | — | 12,619 | — | — | — |
| Bargain purchase gain | — | — | — | — | 9,014 |
| Asset management fees | 486 | 374 | 129 | — | — |
| Other | 1,262 | 525 | 655 | 789 | 465 |
| Total noninterest income | 3,721 | 15,804 | 2,633 | 2,609 | 11,522 |
| Noninterest expense: | |||||
| Salaries and employee benefits | 12,752 | 11,032 | 9,471 | 8,876 | 8,322 |
| Occupancy, furniture and equipment | 1,429 | 1,319 | 1,336 | 1,390 | 1,119 |
| FDIC insurance assessment | 221 | 280 | 280 | 261 | 283 |
| Carrying costs for OREO | 68 | 73 | 100 | 132 | 52 |
| Professional fees | 1,146 | 1,043 | 793 | 592 | 1,455 |
| Amortization of intangible assets | 727 | 746 | 724 | 726 | 620 |
| Advertising and promotion | 366 | 1,102 | 683 | 443 | 222 |
| Communications and technology | 961 | 954 | 945 | 888 | 754 |
| Other | 2,015 | 1,912 | 1,828 | 1,588 | 1,830 |
| Total noninterest expense | 19,685 | 18,461 | 16,160 | 14,896 | 14,657 |
| Net income before income tax | 3,554 | 16,363 | 4,607 | 5,643 | 13,166 |
| Income tax expense | 747 | 6,089 | 1,626 | 1,916 | 1,449 |
| Net income | $2,807 | $10,274 | $2,981 | $3,727 | $11,717 |
| Effect of noncontrolling interests and preferred shares | (786) | (779) | (696) | (579) | (399) |
| Net income to common stockholders | $2,021 | $9,495 | $2,285 | $3,148 | $11,318 |
Loans held for investment summarized for the most recent five quarters:
| Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | |
| (Dollars in thousands) | 2014 | 2014 | 2014 | 2014 | 2013 |
| Commercial real estate | $249,164 | $261,836 | $265,129 | $268,863 | $331,462 |
| Construction, land development, land | 42,914 | 45,996 | 43,040 | 39,230 | 37,626 |
| 1-4 family residential properties | 78,738 | 80,419 | 81,187 | 79,542 | 91,301 |
| Farmland | 22,496 | 20,059 | 19,644 | 20,114 | 20,294 |
| Commercial | 364,567 | 340,316 | 328,361 | 234,986 | 255,655 |
| Factored receivables | 180,910 | 169,112 | 156,272 | 129,531 | 117,370 |
| Consumer | 11,941 | 12,527 | 13,525 | 13,515 | 13,878 |
| Mortgage warehouse | 55,148 | 46,874 | 32,359 | 14,886 | 13,513 |
| Total loans | $1,005,878 | $977,139 | $939,517 | $800,667 | $881,099 |
A portion of our total loan portfolio consists of commercial finance products offered on a nationwide basis, as further summarized below:
| Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | |
| (Dollars in thousands) | 2014 | 2014 | 2014 | 2014 | 2013 |
| Equipment* | $106,354 | $94,460 | $71,198 | $58,737 | $48,978 |
| Asset based lending (General)* | 46,388 | 50,046 | 48,699 | 39,643 | 30,827 |
| Asset based lending (Healthcare)* | 41,770 | 40,885 | 45,751 | — | — |
| Factored receivables | 180,910 | 169,112 | 156,272 | 129,531 | 117,370 |
| Commercial finance | $375,422 | $354,503 | $321,920 | $227,911 | $197,175 |
| Total loans held for investment | $1,005,878 | $977,139 | $939,517 | $800,667 | $881,099 |
| Commercial finance as a % of total | 37% | 36% | 34% | 28% | 22% |
| Community banking / other as a % of total | 63% | 64% | 66% | 72% | 78% |
*Denotes equipment loans offered under our Triumph Commercial Finance brand, general asset based loans offered under our Triumph Commercial Finance brand and healthcare asset based loan products offered under our Triumph Healthcare Finance brand.
Deposits summarized for the most recent five quarters:
| Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | |
| (Dollars in thousands) | 2014 | 2014 | 2014 | 2014 | 2013 |
| Noninterest bearing demand | $179,848 | $154,750 | $176,245 | $155,879 | $150,238 |
| Interest-bearing demand | 236,525 | 209,491 | 248,992 | 209,170 | 199,826 |
| Individual retirement accounts | 55,034 | 54,378 | 53,856 | 54,709 | 54,512 |
| Money market | 117,514 | 125,371 | 138,204 | 142,522 | 157,406 |
| Savings | 70,407 | 72,012 | 73,207 | 73,011 | 69,336 |
| Certificates of deposit | 455,901 | 439,603 | 367,731 | 356,844 | 354,940 |
| Brokered deposits | 50,000 | 50,019 | 50,019 | 58,177 | 58,596 |
| Total deposits | $1,165,229 | $1,105,624 | $1,108,254 | $1,050,312 | $1,044,854 |
Net interest margin summarized for the most recent two quarters:
| For the three months ended | ||||||
| December 31, 2014 | September 30, 2014 | |||||
| Average | Average | Average | Average | |||
| (Dollars in thousands) | Balance | Interest | Rate | Balance | Interest | Rate |
| Interest earning assets: |
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| Interest earning cash balances | $121,935 | $117 | 0.38% | $55,558 | $50 | 0.36% |
| Taxable securities | 157,294 | 590 | 1.49% | 159,779 | 612 | 1.52% |
| Tax-exempt securities | 6,401 | 14 | 0.87% | 6,569 | 15 | 0.91% |
| FHLB & Fed Reserve stock | 5,203 | 54 | 4.12% | 6,665 | 54 | 3.21% |
| Total loans (1) | 994,633 | 22,505 | 8.98% | 980,238 | 21,387 | 8.66% |
| Total interest earning assets | $1,285,466 | $23,280 | 7.19% | $1,208,809 | $22,118 | 7.26% |
| Noninterest earning assets: |
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| Other assets | 142,009 | 145,398 | ||||
| Total assets | $1,427,475 | $1,354,207 | ||||
| Interest bearing liabilities: |
|
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| Deposits: |
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| Interest bearing demand | $232,784 | $35 | 0.06% | $215,862 | $37 | 0.07% |
| Individual retirement accounts | 53,381 | 154 | 1.14% | 51,942 | 148 | 1.13% |
| Money market | 121,242 | 71 | 0.23% | 126,932 | 75 | 0.23% |
| Savings deposits | 72,956 | 9 | 0.05% | 73,833 | 9 | 0.05% |
| Certificates of deposit | 449,166 | 1,103 | 0.97% | 396,287 | 920 | 0.92% |
| Brokered deposits | 50,190 | 126 | 1.00% | 45,235 | 100 | 0.88% |
| Total deposits | 979,719 | 1,498 | 0.61% | 910,091 | 1,289 | 0.56% |
| Short-term borrowings | 18,696 | 4 | 0.08% | 55,915 | 24 | 0.17% |
| Senior secured note | 5,337 | 173 | 12.86% | 11,678 | 134 | 4.55% |
| Junior subordinated debentures | 24,388 | 276 | 4.49% | 24,320 | 276 | 4.50% |
| Total interest bearing liabilities | $1,028,140 | $1,951 | 0.75% | $1,002,004 | $1,723 | 0.68% |
| Noninterest bearing liabilities and equity: |
|
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| Noninterest bearing demand deposits | 164,369 | 162,619 | ||||
| Other liabilities | 13,268 | 13,611 | ||||
| Total equity | 221,698 | 175,973 | ||||
| Total liabilities and equity | $1,427,475 | $1,354,207 | ||||
| Net interest income | $21,329 | $20,395 | ||||
| Interest spread (2) | 6.44% | 6.58% | ||||
| Net interest margin on a fully tax-equivalent basis (3) | 6.58% | 6.69% | ||||
|
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| Cost of total deposits | 0.52% | 0.48% | ||||
| Cost of total funds | 0.65% | 0.59% | ||||
1. Balance totals include respective nonaccrual assets.
2. Net interest spread is the yield on average interest-earning assets less the rate on interest-bearing liabilities.
3. Net interest margin is the ratio of net interest income to average interest-earning assets.
| Metrics and Non-GAAP financial reconciliation | As of and For the Three Months Ended | ||||
| Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | |
| (Dollars in thousands, except per share amounts) | 2014 | 2014 | 2014 | 2014 | 2013 |
| Net income available to common stockholders | $2,021 | $9,495 | $2,285 | $3,148 | $11,318 |
| Average tangible common equity | 156,888 | 109,944 | 102,107 | 98,198 | 91,865 |
| Return on average tangible common equity (ROATCE) | 5.11% | 34.26% | 8.98% | 13.00% | 48.88% |
| Efficiency ratio: | |||||
| Net interest income | $21,329 | $20,395 | $19,881 | $18,855 | $17,358 |
| Noninterest income | 3,721 | 15,804 | 2,633 | 2,609 | 11,522 |
| Operating revenue | 25,050 | 36,199 | 22,514 | 21,464 | 28,880 |
| Less: gain on branch sale | — | 12,619 | — | — | — |
| Less: bargain purchase gain | — | — | — | — | 9,014 |
| Adjusted operating revenue | $25,050 | $23,580 | $22,514 | $21,464 | $19,866 |
| Total noninterest expenses | $19,685 | $18,461 | $16,160 | $14,896 | $14,657 |
| Less: merger and acquisition expenses | — | — | — | — | 938 |
| Adjusted noninterest expenses | $19,685 | $18,461 | $16,160 | $14,896 | $13,719 |
| Efficiency ratio | 78.58% | 78.29% | 71.78% | 69.40% | 69.06% |
| Net noninterest expense to average assets ratio: | |||||
| Total noninterest expenses | $19,685 | $18,461 | $16,160 | $14,896 | $14,657 |
| Less: merger and acquisition expenses | — | — | — | — | 938 |
| Less: noninterest income, excluding gain on branch sale and bargain purchase gain | 3,721 | 3,185 | 2,633 | 2,609 | 2,508 |
| Adjusted net noninterest expenses | $15,964 | $15,276 | $13,527 | $12,287 | $11,211 |
| Average total assets | 1,427,475 | 1,354,207 | 1,359,503 | 1,271,024 | 1,164,758 |
| Net noninterest expense to average assets ratio | 4.44% | 4.48% | 3.99% | 3.92% | 3.82% |
| Reported yield on loans | 8.98% | 8.66% | 8.83% | 9.17% | 9.38% |
| Effect of accretion income on acquired loans | (0.69%) | (0.63%) | (1.08%) | (1.44%) | (1.69%) |
| Adjusted yield on loans | 8.29% | 8.03% | 7.75% | 7.73% | 7.69% |
| Reported net interest margin | 6.58% | 6.69% | 6.58% | 6.85% | 6.68% |
| Effect of accretion income on acquired loans | (0.53%) | (0.50%) | (0.84%) | (1.12%) | (1.25%) |
| Adjusted net interest margin | 6.05% | 6.19% | 5.74% | 5.73% | 5.43% |
| Total stockholders' equity | $237,509 | $149,931 | $140,027 | $137,184 | $133,600 |
| Less: Preferred stock liquidation preference | 9,746 | 9,746 | 9,746 | 9,746 | 9,746 |
| Total common stockholders' equity | 227,763 | 140,185 | 130,281 | 127,438 | 123,854 |
| Less: Goodwill and other intangibles | 29,057 | 29,783 | 31,043 | 27,792 | 28,518 |
| Tangible common stockholders' equity | $198,706 | $110,402 | $99,238 | $99,646 | $95,336 |
| Common shares outstanding | 17,963,783 | 9,886,778 | 9,845,819 | 9,846,096 | 9,832,585 |
| Tangible book value per share | $11.06 | $11.17 | $10.08 | $10.12 | $9.70 |
| Total assets at end of period | $1,447,898 | $1,347,798 | $1,407,072 | $1,297,110 | $1,288,239 |
| Less: Goodwill and other intangibles | 29,057 | 29,783 | 31,043 | 27,792 | 28,518 |
| Adjusted total assets at period end | $1,418,841 | $1,318,015 | $1,376,029 | $1,269,318 | $1,259,721 |
| Tangible common stockholders' equity ratio | 14.00% | 8.38% | 7.21% | 7.85% | 7.57% |
1) The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company's operational performance and to enhance investors' overall understanding of such financial performance. The non-GAAP measures used by the Company include the following:
- "Common stockholders' equity" is defined as total stockholders' equity at end of period less the liquidation preference value of the preferred stock.
- "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 non-routine gains and expenses related to merger and acquisition-related activities, 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.
- "Net interest margin" is defined as net interest income divided by average interest-earning assets.
- "Tangible common stockholders' equity" is common stockholders' equity less goodwill and other intangible assets.
- "Total tangible assets" is defined as total assets less goodwill and other intangible assets.
- "Tangible book value per share" is defined as tangible common stockholders' equity divided by total common shares outstanding. This measure is important to investors interested in changes from period-to-period in book value per share exclusive of changes in intangible assets.
- "Tangible common stockholders' equity ratio" is defined as the ratio of tangible common stockholders' equity divided by total tangible assets. We believe that this measure is important to many investors in the marketplace who are interested in relative changes from period-to period in common equity and total assets, each exclusive of changes in intangible assets.
- "Return on Average Tangible Common Equity" is defined as net income available to common stockholders divided by average tangible common stockholders' equity.
- "Efficiency ratio" is defined as noninterest expenses divided by our operating revenue, which is equal to net interest income plus noninterest income. Also excluded are non-routine gains and expenses related to merger and acquisition-related activities, including divestitures. In our judgment, the adjustments made to operating revenue 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.
- "Net noninterest expense to average total assets" is defined as noninterest expenses net of noninterest income divided by total average assets. Excluded are non-routine 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.
- "Adjusted yield on loans" is our yield on loans after excluding loan accretion from our acquired loan portfolio. Our management uses this metric to better assess the impact of purchase accounting on our yield on loans, as the effect of loan discount accretion is expected to decrease as the acquired loans roll off of our balance sheet.
- "Adjusted net interest margin" is net interest margin after excluding loan accretion from the acquired loan portfolio. Our management uses this metric to better assess the impact of purchase accounting on net interest margin, as the effect of loan discount accretion is expected to decrease as the acquired loans mature or roll off of our balance sheet.
2) Amounts have been annualized.
3) Asset quality ratios exclude loans held for sale.