DALLAS, July 20, 2020 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (Nasdaq: TBK) (“Triumph” or the “Company”) today announced earnings and operating results for the second 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 Second Quarter Highlights

  • For the second quarter of 2020, net income available to common stockholders was $13.4 million. Diluted earnings per share were $0.56.
     
  • Adjusted diluted earnings per share were $0.25 for the quarter ended June 30, 2020, which exclude the gain on sale of Triumph Premium Finance, net of taxes.

  • For the quarter ended June 30, 2020, we recorded $13.6 million of total credit loss expense, including $11.0 million of credit loss expense related to our loan portfolio, $0.9 million of credit loss expense related to off balance sheet loan commitments, and $1.7 million of credit loss expense related to held to maturity securities. Regarding the $11.0 million credit loss expense on our loan portfolio:

° Further deterioration in our macroeconomic forecasts to reflect expected economic impact of COVID-19 resulted in approximately $12.2 million of credit loss expense.

° Changes in the volume and mix of our loan portfolio provided a benefit of $4.0 million to credit loss expense. Net charge offs were $1.1 million and the increase in specific reserves was $1.7 million.

° Our ACL as a percentage of loans held for investment increased 20 basis points during the quarter to 1.24% at June 30, 2020.

  • As of June 30, 2020, the Company’s balance sheet reflected short-term deferrals on outstanding loan balances of $571.8 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 June 30, 2020, these deferred balances carried accrued interest of $6.0 million.

  • As of June 30, 2020, the Company has closed 1,937 PPP loans representing a balance of $219.1 million classified as commercial loans at June 30, 2020. The Company has received approximately $7.3 million in total fees from the SBA, $1.4 million of which were recognized in earnings during the three months ended June 30, 2020. The remaining fees will be amortized over the respective lives of the loans.

  • Net interest margin (“NIM”) was 5.11% for the quarter ended June 30, 2020. 

  • Total loans held for investment increased $72.8 million, or 1.7%, to $4.393 billion at June 30, 2020. Average loans for the quarter increased $363.8 million, or 9.0%, to $4.410 billion.

  • The total dollar value of invoices purchased by Triumph Business Capital for the quarter ended June 30, 2020 was $1.238 billion with an average invoice size of $1,524. The transportation average invoice size for the quarter was $1,378.

  • For the quarter ended June 30, 2020, TriumphPay processed 767,180 invoices paying 51,331 distinct carriers a total of $667.4 million.

  • On June 19, 2020, we issued 45,000 shares of 7.125% Series C Fixed-Rate Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share, with a liquidation preference of $1,000 per share through an underwritten public offering of 1,800,000 depository shares, each representing a 1/40th ownership interest in a share of the Series C Preferred Stock. Total gross proceeds from the preferred stock offering were $45.0 million. Net proceeds after underwriting discounts and offering expenses were $42.4 million. The net proceeds will be used for general corporate purposes. This transaction as well as current period earnings improved our capital ratios at June 30, 2020 as compared to the prior quarter.

  • On April 20, 2020, we entered into an agreement to sell the assets (the “Disposal Group”) of Triumph Premium Finance (“TPF”) and exit our premium finance line of business. The transaction closed on June 30, 2020, and the assets of the Disposal Group, consisting primarily of $84.5 million of premium finance loans, were sold for a gain on sale of $9.8 million, or $7.3 million net of taxes.

Balance Sheet

Total loans held for investment increased $72.8 million, or 1.7%, during the second quarter to $4.393 billion at June 30, 2020. The national lending portfolio increased $157.3 million, or 17.3%, to $1,068.9 million, the community banking portfolio increased $76.1 million, or 3.8%, to $2.099 billion, and the commercial finance portfolio decreased $160.6 million, or 11.6%, to $1.225 billion during the quarter.

Total deposits were $4.062 billion at June 30, 2020, an increase of $380.3 million, or 10.3%, in the second quarter of 2020. Non-interest-bearing deposits accounted for 28% of total deposits and non-time deposits accounted for 68% of total deposits at June 30, 2020. 

Net Interest Income

We earned net interest income for the quarter ended June 30, 2020 of $64.3 million compared to $62.5 million for the quarter ended March 31, 2020.

Yields on loans for the quarter ended June 30, 2020 were down 70 bps from the prior quarter to 6.52%. The average cost of our total deposits was 0.79% for the quarter ended June 30, 2020 compared to 1.05% for the quarter ended March 31, 2020. 

Asset Quality

Non-performing assets were 1.20% of total assets at June 30, 2020 compared to 1.09% of total assets at March 31, 2020.  Approximately 14 basis points of this ratio at June 30, 2020 consists of $8.1 million of held to maturity investments in the subordinated notes of collateralized loan obligation that were placed on nonaccrual during the quarter.

The ratio of past due to total loans decreased to 1.50% at June 30, 2020 from 1.99% at March 31, 2020. We recorded total net charge-offs of $1.1 million, or 0.02% of average loans, for the quarter ended June 30, 2020 compared to net charge-offs of $1.5 million, or 0.04% of average loans, for the quarter ended March 31, 2020. 

Non-Interest Income and Expense

We earned non-interest income for the quarter ended June 30, 2020 of $20.0 million compared to $7.5 million for the quarter ended March 31, 2020. Excluding the gain on sale of TPF, we earned adjusted noninterest income of $10.2 million for the three months ended June 30, 2020.

For the quarter ended June 30, 2020, non-interest expense totaled $52.7 million. Non-interest expense for the quarter ended March 31, 2020 was $54.8 million.

Conference Call Information

Aaron P. Graft, Vice Chairman and CEO and Bryce Fowler, CFO will review the quarterly results in a conference call for investors and analysts beginning at 7:00 a.m. Central Time on Tuesday, July 21, 2020. 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/tbk200721.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 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 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 April 21, 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 Six Months Ended 
 June 30,  March 31,  December 31,  September 30,  June 30,  June 30,  June 30, 
(Dollars in thousands)2020  2020  2019  2019  2019  2020  2019 
Financial Highlights:                           
Total assets$5,617,493  $5,353,729  $5,060,297  $5,039,697  $4,783,189  $5,617,493  $4,783,189 
Loans held for investment$4,393,311  $4,320,548  $4,194,512  $4,209,417  $3,835,903  $4,393,311  $3,835,903 
Deposits$4,062,332  $3,682,015  $3,789,906  $3,697,833  $3,658,978  $4,062,332  $3,658,978 
Net income available to common stockholders$13,440  $(4,450) $16,709  $14,317  $12,730  $8,990  $27,518 
                            
Performance Ratios - Annualized:                           
Return on average assets 0.99%  (0.36%)  1.31%  1.17%  1.09%  0.35%  1.21%
Return on average total equity 8.86%  (2.85%)  10.24%  8.79%  7.83%  2.92%  8.55%
Return on average common equity 8.94%  (2.85%)  10.24%  8.79%  7.83%  2.94%  8.55%
Return on average tangible common equity (1) 12.96%  (4.09%)  14.54%  12.56%  11.19%  4.23%  12.29%
Yield on loans(2) 6.52%  7.22%  7.48%  7.63%  7.95%  6.85%  7.97%
Cost of interest bearing deposits 1.08%  1.34%  1.45%  1.49%  1.42%  1.21%  1.33%
Cost of total deposits 0.79%  1.05%  1.15%  1.19%  1.14%  0.92%  1.07%
Cost of total funds 0.85%  1.23%  1.35%  1.41%  1.40%  1.03%  1.34%
Net interest margin(2) 5.11%  5.63%  5.72%  5.85%  5.99%  5.36%  6.07%
Net non-interest expense to average assets 2.40%  3.88%  3.46%  3.64%  3.68%  3.09%  3.69%
Adjusted net non-interest expense to average assets (1) 3.11%  3.88%  3.46%  3.64%  3.68%  3.47%  3.69%
Efficiency ratio 62.56%  78.24%  70.15%  71.93%  71.37%  69.68%  70.96%
Adjusted efficiency ratio (1) 70.75%  78.24%  70.15%  71.93%  71.37%  74.38%  70.96%
                            
Asset Quality:(3)                           
Past due to total loans(4) 1.50%  1.99%  1.74%  1.91%  1.60%  1.50%  1.60%
Non-performing loans to total loans 1.27%  1.26%  0.97%  1.00%  0.96%  1.27%  0.96%
Non-performing assets to total assets 1.20%  1.09%  0.87%  0.91%  0.86%  1.20%  0.86%
ACL to non-performing loans(5) 97.66%  82.37%  71.63%  75.58%  79.91%  97.66%  79.91%
ACL to total loans(5) 1.24%  1.04%  0.69%  0.76%  0.77%  1.24%  0.77%
Net charge-offs to average loans 0.02%  0.04%  0.08%  0.01%  0.05%  0.06%  0.08%
                            
Capital:                           
Tier 1 capital to average assets(6) 9.98%  9.62%  10.03%  10.37%  10.84%  9.98%  10.84%
Tier 1 capital to risk-weighted assets(6) 10.57%  9.03%  10.29%  10.08%  11.08%  10.57%  11.08%
Common equity tier 1 capital to risk-weighted assets(6) 8.84%  8.24%  9.46%  9.26%  10.19%  8.84%  10.19%
Total capital to risk-weighted assets(5) 13.44%  11.63%  12.76%  11.79%  12.88%  13.44%  12.88%
Total equity to total assets 11.69%  11.01%  12.58%  12.57%  13.45%  11.69%  13.45%
Tangible common stockholders' equity to tangible assets(1) 7.84%  7.77%  9.16%  9.10%  9.78%  7.84%  9.78%
                            
Per Share Amounts:                           
Book value per share$25.28  $24.45  $25.50  $24.99  $24.56  $25.28  $24.56 
Tangible book value per share (1)$17.59  $16.64  $17.88  $17.40  $17.13  $17.59  $17.13 
Basic earnings (loss) per common share$0.56  $(0.18) $0.67  $0.56  $0.48  $0.37  $1.04 
Diluted earnings (loss) per common share$0.56  $(0.18) $0.66  $0.56  $0.48  $0.37  $1.03 
Adjusted diluted earnings per common share(1)$0.25  $(0.18) $0.66  $0.56  $0.48  $0.07  $1.03 
Shares outstanding end of period 24,202,686   24,101,120   24,964,961   25,357,985   26,198,308   24,202,686   26,198,308 
                            

Unaudited consolidated balance sheet as of:

               
 June 30,  March 31,  December 31,  September 30,  June 30, 
 (Dollars in thousands)2020  2020  2019  2019  2019 
ASSETS                   
Total cash and cash equivalents$437,064  $208,414  $197,880  $115,043  $209,305 
Securities - available for sale 331,126   302,122   248,820   302,917   329,991 
Securities - held to maturity 6,285   8,217   8,417   8,517   8,573 
Equity securities 6,411   5,678   5,437   5,543   5,479 
Loans held for sale 50,382   4,431   2,735   7,499   2,877 
Loans held for investment 4,393,311   4,320,548   4,194,512   4,209,417   3,835,903 
Allowance for credit losses (54,613)  (44,732)  (29,092)  (31,895)  (29,416)
Loans, net 4,338,698   4,275,816   4,165,420   4,177,522   3,806,487 
Assets held for sale    97,895          
FHLB and other restricted stock 26,345   37,080   19,860   23,960   18,037 
Premises and equipment, net 107,736   98,363   96,595   87,112   84,998 
Other real estate owned ("OREO"), net 1,962   2,540   3,009   2,849   3,351 
Goodwill and intangible assets, net 186,162   188,208   190,286   192,440   194,668 
Bank-owned life insurance 41,298   41,122   40,954   40,724   40,847 
Deferred tax asset, net 8,544   9,457   3,812   5,971   7,278 
Other assets 75,480   74,386   77,072   69,600   71,298 
Total assets$5,617,493  $5,353,729  $5,060,297  $5,039,697  $4,783,189 
LIABILITIES                   
Non-interest bearing deposits$1,120,949  $846,412  $809,696  $754,233  $684,223 
Interest bearing deposits 2,941,383   2,835,603   2,980,210   2,943,600   2,974,755 
Total deposits 4,062,332   3,682,015   3,789,906   3,697,833   3,658,978 
Customer repurchase agreements 6,732   3,693   2,033   14,124   12,788 
Federal Home Loan Bank advances 455,000   850,000   430,000   530,000   305,000 
Payment Protection Program Liquidity Facility 223,809             
Subordinated notes 87,402   87,347   87,327   49,010   48,983 
Junior subordinated debentures 39,816   39,689   39,566   39,443   39,320 
Other liabilities 85,531   101,638   74,875   75,594   74,758 
Total liabilities 4,960,622   4,764,382   4,423,707   4,406,004   4,139,827 
EQUITY                   
Preferred Stock 45,000             
Common stock 273   272   272   272   271 
Additional paid-in-capital 472,795   474,441   473,251   472,368   471,145 
Treasury stock, at cost (102,888)  (102,677)  (67,069)  (52,632)  (27,468)
Retained earnings 236,249   222,809   229,030   212,321   198,004 
Accumulated other comprehensive income (loss) 5,442   (5,498)  1,106   1,364   1,410 
Total stockholders' equity 656,871   589,347   636,590   633,693   643,362 
Total liabilities and equity$5,617,493  $5,353,729  $5,060,297  $5,039,697  $4,783,189 
 

Unaudited consolidated statement of income:

      
 For the Three Months Ended  For the Six Months Ended 
 June 30,  March 31,  December 31,  September 30,  June 30,  June 30,  June 30, 
 (Dollars in thousands)2020  2020  2019  2019  2019  2020  2019 
Interest income:                           
Loans, including fees$50,394  $48,323  $52,395  $50,249  $47,910  $98,717  $93,004 
Factored receivables, including fees 21,101   24,292   25,573   25,570   25,558   45,393   50,114 
Securities 2,676   2,107   2,379   2,784   2,667   4,783   5,311 
FHLB and other restricted stock 148   204   165   209   146   352   338 
Cash deposits 79   488   659   603   1,022   567   1,800 
Total interest income 74,398   75,414   81,171   79,415   77,303   149,812   150,567 
Interest expense:                           
Deposits 7,584   9,677   10,961   11,036   10,010   17,261   18,228 
Subordinated notes 1,321   1,347   1,035   840   839   2,668   1,678 
Junior subordinated debentures 554   646   687   719   744   1,200   1,504 
Other borrowings 688   1,244   2,080   2,055   2,291   1,932   4,427 
Total interest expense 10,147   12,914   14,763   14,650   13,884   23,061   25,837 
Net interest income 64,251   62,500   66,408   64,765   63,419   126,751   124,730 
Credit loss expense 13,609   20,298   382   2,865   3,681   33,907   4,695 
Net interest income after credit loss expense 50,642   42,202   66,026   61,900   59,738   92,844   120,035 
Non-interest income:                           
Service charges on deposits 573   1,588   1,889   1,937   1,700   2,161   3,306 
Card income 1,941   1,800   1,943   2,015   2,071   3,741   3,915 
Net OREO gains (losses) and valuation adjustments (101)  (257)  50   (56)  148   (358)  357 
Net gains (losses) on sale of securities 63   38   39   19   14   101   3 
Fee income 1,304   1,686   1,686   1,624   1,519   2,990   3,131 
Insurance commissions 864   1,051   1,092   1,247   961   1,915   1,880 
Gain on sale of subsidiary 9,758               9,758    
Other 5,627   1,571   1,967   956   1,210   7,198   2,569 
Total non-interest income 20,029   7,477   8,666   7,742   7,623   27,506   15,161 
Non-interest expense:                           
Salaries and employee benefits 30,804   30,722   29,586   28,717   28,120   61,526   54,559 
Occupancy, furniture and equipment 4,964   5,182   4,667   4,505   4,502   10,146   9,024 
FDIC insurance and other regulatory assessments 495   315   (302)  (2)  303   810   602 
Professional fees 1,651   2,107   1,904   1,969   1,550   3,758   3,415 
Amortization of intangible assets 2,046   2,078   2,154   2,228   2,347   4,124   4,749 
Advertising and promotion 1,151   1,292   1,347   1,379   1,796   2,443   3,400 
Communications and technology 5,444   5,501   5,732   5,382   4,988   10,945   9,862 
Other 6,171   7,556   7,573   7,975   7,098   13,727   13,659 
Total non-interest expense 52,726   54,753   52,661   52,153   50,704   107,479   99,270 
Net income (loss) before income tax 17,945   (5,074)  22,031   17,489   16,657   12,871   35,926 
Income tax expense (benefit) 4,505   (624)  5,322   3,172   3,927   3,881   8,408 
Net income (loss)$13,440  $(4,450) $16,709  $14,317  $12,730  $8,990  $27,518 
 

Earnings per share:

      
 For the Three Months Ended  For the Six Months Ended 
 June 30,  March 31,  December 31,  September 30,  June 30,  June 30,  June 30, 
(Dollars in thousands)2020  2020  2019  2019  2019  2020  2019 
Basic                           
Net income (loss) to common stockholders$13,440  $(4,450) $16,709  $14,317  $12,730  $8,990  $27,518 
Weighted average common shares outstanding 23,987,049   24,314,329   25,089,447   25,621,054   26,396,351   24,150,689   26,537,255 
Basic earnings (loss) per common share$0.56  $(0.18) $0.67  $0.56  $0.48  $0.37  $1.04 
                            
Diluted                           
Net income (loss) to common stockholders - diluted$13,440  $(4,450) $16,709  $14,317  $12,730  $8,990  $27,518 
Weighted average common shares outstanding 23,987,049   24,314,329   25,089,447   25,621,054   26,396,351   24,150,689   26,537,255 
Dilutive effects of:                           
Assumed exercises of stock options 38,627      69,865   60,068   59,962   55,753   61,819 
Restricted stock awards 37,751      70,483   45,631   30,110   66,364   39,352 
Restricted stock units 4,689      13,264   3,045      13,255    
Performance stock units - market based 6,326      11,803   4,673      8,446    
Performance stock units - performance based                    
Weighted average shares outstanding - diluted 24,074,442   24,314,329   25,254,862   25,734,471   26,486,423   24,294,507   26,638,426 
Diluted earnings (loss) per common share$0.56  $(0.18) $0.66  $0.56  $0.48  $0.37  $1.03 
                            
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 Six Months Ended 
 June 30,  March 31,  December 31,  September 30,  June 30,  June 30,  June 30, 
 2020  2020  2019  2019  2019  2020  2019 
Stock options 148,528   225,055   66,019   67,023   70,037   98,956   70,037 
Restricted stock awards 109,834   147,748      3,209          
Restricted stock units 38,801   55,228         58,400      58,400 
Performance stock units - market based 76,461   67,707   55,228   55,228   70,879   76,461   70,879 
Performance stock units - performance based 262,625   254,000   254,000         262,625    
                            

Loans held for investment summarized as of:

               
 June 30,  March 31,  December 31,  September 30,  June 30, 
 (Dollars in thousands)2020  2020  2019  2019  2019 
Commercial real estate$910,261  $985,757  $1,046,961  $1,115,559  $1,098,279 
Construction, land development, land 213,617   198,050   160,569   164,186   157,861 
1-4 family residential properties 168,707   169,703   179,425   186,405   186,070 
Farmland 125,259   133,579   154,975   161,447   144,594 
Commercial 1,518,656   1,412,822   1,342,683   1,369,505   1,257,330 
Factored receivables 561,576   661,100   619,986   599,651   583,131 
Consumer 18,450   20,326   21,925   24,967   26,048 
Mortgage warehouse 876,785   739,211   667,988   587,697   382,590 
Total loans$4,393,311  $4,320,548  $4,194,512  $4,209,417  $3,835,903 
 

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:

               
 June 30,  March 31,  December 31,  September 30,  June 30, 
(Dollars in thousands)2020  2020  2019  2019  2019 
Commercial - Equipment$487,145  $479,483  $461,555  $429,412  $395,094 
Commercial - Asset-based lending 176,235   245,001   168,955   247,026   208,896 
Factored receivables 561,576   661,100   619,986   599,651   583,131 
Commercial finance$1,224,956  $1,385,584  $1,250,496  $1,276,089  $1,187,121 
                    
Commercial finance % of total loans 28%  32%  30%  30%  31%
                    

National lending loans are further summarized below:

               
 June 30,  March 31,  December 31,  September 30,  June 30, 
(Dollars in thousands)2020  2020  2019  2019  2019 
Mortgage warehouse$876,785  $739,211  $667,988  $587,697  $382,590 
Commercial - Liquid credit 192,118   172,380   81,353   37,386   21,758 
Commercial - Premium finance       101,015   101,562   72,898 
National lending$1,068,903  $911,591  $850,356  $726,645  $477,246 
                    
National lending % of total loans 24%  21%  20%  17%  12%
                    

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

               
 June 30,  March 31,  December 31,  September 30,  June 30, 
(Dollars in thousands)2020  2020  2019  2019  2019 
Average community banking$2,111,615  $2,041,256  $2,170,149  $2,193,533  $2,166,122 
Average commercial finance 1,259,584   1,292,749   1,260,000   1,208,823   1,168,110 
Average national lending 1,038,476   711,837   704,244   541,367   373,755 
Average total loans$4,409,675  $4,045,842  $4,134,393  $3,943,723  $3,707,987 
Community banking yield 5.23%  5.67%  5.89%  5.79%  5.88%
Commercial finance yield 10.21%  11.00%  11.64%  12.31%  12.52%
National lending yield 4.67%  4.80%  4.96%  4.63%  5.62%
Total loan yield 6.52%  7.22%  7.48%  7.63%  7.95%
                    

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:

               
 June 30,  March 31,  December 31,  September 30,  June 30, 
 2020  2020  2019  2019  2019 
Factored receivable period end balance$528,379,000  $641,366,000  $573,372,000  $562,009,000  $544,601,000 
Yield on average receivable balance 15.48%  16.13%  17.20%  18.23%  18.73%
Rolling twelve quarter annual charge-off rate 0.43%  0.42%  0.39%  0.36%  0.40%
Factored receivables - transportation concentration 85%  80%  81%  83%  83%
                    
Interest income, including fees$20,387,000  $23,497,000  $24,813,000  $24,869,000  $24,762,000 
Non-interest income 1,072,000   1,296,000   1,154,000   1,291,000   1,205,000 
Factored receivable total revenue 21,459,000   24,793,000   25,967,000   26,160,000   25,967,000 
Average net funds employed 477,112,000   537,138,000   524,546,000   494,198,000   483,203,000 
Yield on average net funds employed 18.09%  18.56%  19.64%  21.00%  21.55%
                    
Accounts receivable purchased$1,238,465,000  $1,450,618,000  $1,489,538,000  $1,450,905,000  $1,408,982,000 
Number of invoices purchased 812,902   878,767   896,487   890,986   874,248 
Average invoice size$1,524  $1,651  $1,662  $1,628  $1,612 
Average invoice size - transportation$1,378  $1,481  $1,507  $1,497  $1,492 
Average invoice size - non-transportation$4,486  $4,061  $3,891  $3,467  $3,047 
                    

Deposits summarized as of:

               
 June 30,  March 31,  December 31,  September 30,  June 30, 
(Dollars in thousands)2020  2020  2019  2019  2019 
Non-interest bearing demand$1,120,949  $846,412  $809,696  $754,233  $684,223 
Interest bearing demand 648,309   583,445   580,323   587,123   587,164 
Individual retirement accounts 97,388   101,743   104,472   108,593   111,328 
Money market 397,914   412,376   497,105   424,162   440,289 
Savings 391,624   367,163   363,270   356,368   362,594 
Certificates of deposit 937,766   1,056,012   1,084,425   1,120,850   1,122,873 
Brokered time deposits 258,378   314,864   350,615   346,504   350,507 
Other brokered deposits 210,004             
Total deposits$4,062,332  $3,682,015  $3,789,906  $3,697,833  $3,658,978 
 

Net interest margin summarized for the three months ended:

      
 June 30, 2020  March 31, 2020 
 Average      Average  Average      Average 
(Dollars in thousands)Balance  Interest  Rate  Balance  Interest  Rate 
Interest earning assets:                       
Interest earning cash balances$262,615  $79   0.12% $141,123  $488   1.39%
Taxable securities 303,519   2,400   3.18%  228,996   1,955   3.43%
Tax-exempt securities 43,796   276   2.53%  25,925   152   2.36%
FHLB and other restricted stock 36,375   148   1.64%  21,098   204   3.89%
Loans 4,409,675   71,495   6.52%  4,045,842   72,615   7.22%
Total interest earning assets$5,055,980  $74,398   5.92% $4,462,984  $75,414   6.80%
Non-interest earning assets:                       
Other assets 431,092           443,563         
Total assets$5,487,072          $4,906,547         
Interest bearing liabilities:                       
Deposits:                       
Interest bearing demand$630,023  $287   0.18% $586,671  $344   0.24%
Individual retirement accounts 100,211   359   1.44%  103,351   402   1.56%
Money market 398,276   363   0.37%  441,815   1,031   0.94%
Savings 382,521   144   0.15%  363,888   124   0.14%
Certificates of deposit 1,008,644   5,055   2.02%  1,068,023   6,006   2.26%
Brokered time deposits 301,262   1,374   1.83%  344,847   1,770   2.06%
Other brokered deposits 4,670   2   0.17%         
Total interest bearing deposits 2,825,607   7,584   1.08%  2,908,595   9,677   1.34%
Federal Home Loan Bank advances 678,225   572   0.34%  359,286   1,243   1.39%
Subordinated notes 87,368   1,321   6.08%  87,323   1,347   6.20%
Junior subordinated debentures 39,745   554   5.61%  39,609   646   6.56%
Other borrowings 137,045   116   0.34%  2,710   1   0.15%
Total interest bearing liabilities$3,767,990  $10,147   1.08% $3,397,523  $12,914   1.53%
Non-interest bearing liabilities and equity:                       
Non-interest bearing demand deposits 1,038,979           810,654         
Other liabilities 69,845           71,001         
Total equity 610,258           627,369         
Total liabilities and equity$5,487,072          $4,906,547         
Net interest income    $64,251          $62,500     
Interest spread         4.84%          5.27%
Net interest margin         5.11%          5.63%
 

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 Six Months Ended 
 (Dollars in thousands, June 30,  March 31,  December 31,  September 30,  June 30,  June 30,  June 30, 
 except per share amounts) 2020  2020  2019  2019  2019  2020  2019 
Net income available to common stockholders $13,440  $(4,450) $16,709  $14,317  $12,730  $8,990  $27,518 
Gain on sale of subsidiary or division  (9,758)              (9,758)   
Tax effect of adjustments  2,451               2,451    
Adjusted net income available to common stockholders - diluted $6,133  $(4,450) $16,709  $14,317  $12,730  $1,683  $27,518 
                             
Weighted average shares outstanding - diluted  24,074,442   24,314,329   25,254,862   25,734,471   26,486,423   24,294,507   26,638,426 
Adjusted diluted earnings per common share $0.25  $(0.18) $0.66  $0.56  $0.48  $0.07  $1.03 
                             
Average total stockholders' equity $610,258  $627,369  $647,546  $646,041  $652,347  $618,808  $648,674 
Average preferred stock liquidation preference  (5,934)              (2,967)   
Average total common stockholders' equity  604,324   627,369   647,546   646,041   652,347   615,841   648,674 
Average goodwill and other intangibles  (187,255)  (189,359)  (191,551)  (193,765)  (196,001)  (188,307)  (197,189)
Average tangible common stockholders' equity $417,069  $438,010  $455,995  $452,276  $456,346  $427,534  $451,485 
                             
Net income (loss) $13,440  $(4,450) $16,709  $14,317  $12,730  $8,990  $27,518 
Average tangible common equity  417,069   438,010   455,995   452,276   456,346   427,534   451,485 
Return on average tangible common equity  12.96%  (4.09%)  14.54%  12.56%  11.19%  4.23%  12.29%
                             
Net interest income $64,251  $62,500  $66,408  $64,765  $63,419  $126,751  $124,730 
Non-interest income  20,029   7,477   8,666   7,742   7,623   27,506   15,161 
Operating revenue  84,280   69,977   75,074   72,507   71,042   154,257   139,891 
Gain on sale of subsidiary or division  (9,758)              (9,758)   
Adjusted operating revenue $74,522  $69,977  $75,074  $72,507  $71,042  $144,499  $139,891 
Non-interest expenses $52,726  $54,753  $52,661  $52,153  $50,704  $107,479  $99,270 
Adjusted efficiency ratio  70.75%  78.24%  70.15%  71.93%  71.37%  74.38%  70.96%
                             
Adjusted net non-interest expense to average assets ratio:                            
Non-interest expenses $52,726  $54,753  $52,661  $52,153  $50,704  $107,479  $99,270 
                             
Total non-interest income $20,029  $7,477  $8,666  $7,742  $7,623  $27,506  $15,161 
Gain on sale of subsidiary or division  (9,758)              (9,758)   
Adjusted non-interest income $10,271  $7,477  $8,666  $7,742  $7,623  $17,748  $15,161 
Adjusted net non-interest expenses $42,455  $47,276  $43,995  $44,411  $43,081  $89,731  $84,109 
Average total assets $5,487,072  $4,906,547  $5,050,860  $4,840,540  $4,694,647  $5,196,815  $4,598,735 
Adjusted net non-interest expense to average assets ratio  3.11%  3.88%  3.46%  3.64%  3.68%  3.47%  3.69%
                             
Total stockholders' equity $656,871  $589,347  $636,590  $633,693  $643,362  $656,871  $643,362 
Preferred stock liquidation preference  (45,000)              (45,000)   
Total common stockholders' equity  611,871   589,347   636,590   633,693   643,362   611,871   643,362 
Goodwill and other intangibles  (186,162)  (188,208)  (190,286)  (192,440)  (194,668)  (186,162)  (194,668)
Tangible common stockholders' equity $425,709  $401,139  $446,304  $441,253  $448,694  $425,709  $448,694 
Common shares outstanding  24,202,686   24,101,120   24,964,961   25,357,985   26,198,308   24,202,686   26,198,308 
Tangible book value per share $17.59  $16.64  $17.88  $17.40  $17.13  $17.59  $17.13 
                             
Total assets at end of period $5,617,493  $5,353,729  $5,060,297  $5,039,697  $4,783,189  $5,617,493  $4,783,189 
Goodwill and other intangibles  (186,162)  (188,208)  (190,286)  (192,440)  (194,668)  (186,162)  (194,668)
Tangible assets at period end $5,431,331  $5,165,521  $4,870,011  $4,847,257  $4,588,521  $5,431,331  $4,588,521 
Tangible common stockholders' equity ratio  7.84%  7.77%  9.16%  9.10%  9.78%  7.84%  9.78%
 

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 Six Months Ended 
 June 30,  March 31,  December 31,  September 30,  June 30,  June 30,  June 30, 
(Dollars in thousands)2020  2020  2019  2019  2019  2020  2019 
Loan discount accretion$2,139  $2,134  $1,555  $1,159  $1,297  $4,273  $2,854 

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