TBK - Triumph Bancorp Reports First Quarter Net Income to Common Stockholders of $14.8 Million

April, 17 2019 04:07 PM Triumph Bancorp Inc.

DALLAS, April 17, 2019 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (Nasdaq: TBK) (“Triumph”) today announced earnings and operating results for the first quarter of 2019.

As part of how we measure our results, we use certain non-GAAP financial measures to ascertain performance. These non-GAAP financial measures are reconciled in the section labeled “Metrics and non-GAAP financial reconciliation” at the end of this press release.

2019 First Quarter Highlights and Recent Developments

For the first quarter of 2019, net income available to common stockholders was $14.8 million. Diluted earnings per share were $0.55.
Net interest margin (“NIM”) was 6.15% for the quarter ended March 31, 2019.
Total loans held for investment increased $4.2 million, or 0.1%, to $3.613 billion at March 31, 2019. Average loans for the quarter increased $2.6 million, or 0.1%, to $3.535 billion. Loan growth was consistent with historical first quarter results, which is primarily driven by seasonality in our transportation factoring business.
Triumph Business Capital grew period-end clients to 6,382 clients, which is an increase of 191 clients, or 3.1%. The total dollar value of invoices purchased for the quarter ended March 31, 2019 was $1.325 billion with an average invoice price of $1,678.
At March 31, 2019, there were 130 clients utilizing the TriumphPay platform, which is an increase of 17 clients, or 15.0%. For the quarter ended March 31, 2019, TriumphPay processed 114,066 invoices paying 22,932 distinct carriers a total of $141.0 million.
During the quarter ended March 31, 2019, the Company repurchased 247,312 shares into treasury stock under its stock repurchase program at an average price of $30.51, for a total of $7.6 million.

Balance Sheet

Total loans held for investment were $3.613 billion at March 31, 2019. Our commercial finance loans, which comprise 33% of the loan portfolio, were $1.187 billion at March 31, 2019, compared to $1.256 billion at December 31, 2018, a decrease of $69.3 million, or 5.5% in the first quarter of 2019.

Total deposits were $3.314 billion at March 31, 2019, a decrease of $135.9 million or 3.9% in the first quarter of 2019. Non-interest-bearing deposits accounted for 20% of total deposits and non-time deposits accounted for 61% of total deposits at March 31, 2019.

Net Interest Income

We earned net interest income for the quarter ended March 31, 2019 of $61.3 million compared to $64.9 million for the quarter ended December 31, 2018.

Yields on loans for the quarter ended March 31, 2019 were down 15 bps from the prior quarter to 7.99%. The average cost of our total deposits was 0.99% for the quarter ended March 31, 2019 compared to 0.91% for the quarter ended December 31, 2018, on an annualized basis.

Asset Quality

Non-performing assets remained flat at 0.84% of total assets at March 31, 2019 and December 31, 2018. The ratio of past due to total loans decreased to 2.33% at March 31, 2019 from 2.41% at December 31, 2018. We recorded total net charge-offs of $1.0 million, or 0.03% of average loans, for the quarter ended March 31, 2019 compared to net charge-offs of $1.6 million, or 0.05% of average loans, for the quarter ended December 31, 2018.

We recorded a provision for loan losses of $1.0 million for the quarter ended March 31, 2019 compared to a provision of $1.9 million for the quarter ended December 31, 2018. From December 31, 2018 to March 31, 2019, our ALLL remained flat at $27.6 million or 0.76% of total loans.

Non-Interest Income and Expense

We earned non-interest income for the quarter ended March 31, 2019 of $7.5 million compared to $6.8 million for the quarter ended December 31, 2018.

For the quarter ended March 31, 2019, non-interest expense totaled $48.6 million, compared to $47.0 million for the quarter ended December 31, 2018.

Conference Call Information

Aaron P. Graft, Vice Chairman and CEO and Bryce Fowler, CFO will review the quarterly results in a conference call for investors and analysts beginning at 7:00 a.m. Central Time on Thursday, April 18, 2019. Dan Karas, 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/tbk190418.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 and commercial finance products through its bank subsidiary, TBK Bank, SSB. www.triumphbancorp.com

Forward-Looking Statements

This press release contains forward-looking statements. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “could,” “may,” “will,” “should,” “seeks,” “likely,” “intends,” “plans,” “pro forma,” “projects,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: business and economic conditions generally and in the bank and non-bank financial services industries, nationally and within our local market areas; our ability to mitigate our risk exposures; our ability to maintain our historical earnings trends; risks related to the integration of acquired businesses (including our acquisitions of First Bancorp of Durango, Inc., Southern Colorado Corp., and the operating assets of Interstate Capital Corporation and certain of its affiliates) and any future acquisitions; changes in management personnel; interest rate risk; concentration of our factoring services in the transportation industry; credit risk associated with our loan portfolio; lack of seasoning in our loan portfolio; deteriorating asset quality and higher loan charge-offs; time and effort necessary to resolve nonperforming assets; inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates; lack of liquidity; fluctuations in the fair value and liquidity of the securities we hold for sale; impairment of investment securities, goodwill, other intangible assets, or deferred tax assets; our risk management strategies; environmental liability associated with our lending activities; increased competition in the bank and non-bank financial services industries, nationally, regionally, or locally, which may adversely affect pricing and terms; the accuracy of our financial statements and related disclosures; material weaknesses in our internal control over financial reporting; system failures or failures to prevent breaches of our network security; the institution and outcome of litigation and other legal proceedings against us or to which we become subject; changes in carry-forwards of net operating losses; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes, including changes in banking, securities, and tax laws and regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and their application by our regulators; governmental monetary and fiscal policies; changes in the scope and cost of the Federal Deposit Insurance Corporation insurance and other coverages; failure to receive regulatory approval for future acquisitions; and increases in our capital requirements.

While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. All forward-looking statements are necessarily only estimates of future results. Accordingly, actual results may differ materially from those expressed in or contemplated by the particular forward-looking statement, and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" and the forward-looking statement disclosure contained in Triumph’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 12, 2019.

Non-GAAP Financial Measures

This press release includes certain non?GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of non?GAAP financial measures to GAAP financial measures are provided at the end of this press release.

The following table sets forth key metrics used by Triumph to monitor its 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



March 31,


December 31,


September 30,


June 30,


March 31,

(Dollars in thousands)

2019


2018


2018


2018


2018

Financial Highlights:




















Total assets

$
4,529,783


$
4,559,779


$
4,537,102


$
3,794,631


$
3,405,010

Loans held for investment

$
3,612,869


$
3,608,644


$
3,512,143


$
3,196,462


$
2,873,985

Deposits

$
3,314,440


$
3,450,349


$
3,439,049


$
2,624,942


$
2,533,498

Net income available to common stockholders

$
14,788


$
18,085


$
8,975


$
12,192


$
11,878






















Performance Ratios - Annualized:




















Return on average assets


1.33
%


1.60
%


0.90
%


1.37
%


1.43
%
Return on average total equity


9.30
%


11.35
%


5.88
%


8.53
%


12.20
%
Return on average common equity


9.30
%


11.40
%


5.85
%


8.54
%


12.30
%
Return on average tangible common equity ⁽¹⁾


13.43
%


16.73
%


7.57
%


9.95
%


14.75
%
Yield on loans⁽²⁾


7.99
%


8.14
%


8.33
%


8.09
%


7.65
%
Cost of interest bearing deposits


1.24
%


1.15
%


1.08
%


0.93
%


0.86
%
Cost of total deposits


0.99
%


0.91
%


0.85
%


0.73
%


0.68
%
Cost of total funds


1.28
%


1.14
%


1.16
%


1.06
%


0.95
%
Net interest margin⁽²⁾


6.15
%


6.34
%


6.59
%


6.36
%


6.06
%
Net non-interest expense to average assets


3.70
%


3.55
%


4.19
%


3.59
%


3.43
%
Adjusted net non-interest expense to average assets ⁽¹⁾


3.70
%


3.55
%


3.62
%


3.47
%


3.56
%
Efficiency ratio


70.54
%


65.52
%


72.15
%


64.26
%


65.09
%
Adjusted efficiency ratio⁽¹⁾


70.54
%


65.52
%


63.49
%


62.38
%


66.45
%





















Asset Quality:⁽³⁾




















Past due to total loans


2.33
%


2.41
%


2.23
%


2.54
%


2.41
%
Non-performing loans to total loans


0.95
%


1.00
%


1.13
%


1.43
%


1.41
%
Non-performing assets to total assets


0.84
%


0.84
%


0.93
%


1.28
%


1.47
%
ALLL to non-performing loans


80.70
%


76.47
%


68.82
%


53.57
%


49.52
%
ALLL to total loans


0.76
%


0.76
%


0.78
%


0.77
%


0.70
%
Net charge-offs to average loans


0.03
%


0.05
%


0.12
%


0.01
%


0.05
%





















Capital:




















Tier 1 capital to average assets⁽⁴⁾


11.32
%


11.08
%


11.75
%


15.00
%


11.23
%
Tier 1 capital to risk-weighted assets⁽⁴⁾


11.76
%


11.49
%


11.16
%


14.68
%


11.54
%
Common equity tier 1 capital to risk-weighted assets⁽⁴⁾


10.81
%


10.55
%


9.96
%


13.32
%


10.05
%
Total capital to risk-weighted assets⁽⁴⁾


13.62
%


13.35
%


13.05
%


16.73
%


13.66
%
Total equity to total assets


14.27
%


13.96
%


13.59
%


16.00
%


11.83
%
Tangible common stockholders' equity to tangible assets⁽¹⁾


10.37
%


10.03
%


9.35
%


13.05
%


9.86
%





















Per Share Amounts:




















Book value per share

$
24.19


$
23.62


$
23.10


$
22.76


$
18.89

Tangible book value per share⁽¹⁾

$
16.82


$
16.22


$
15.42


$
18.27


$
15.82

Basic earnings per common share

$
0.55


$
0.68


$
0.34


$
0.48


$
0.57

Diluted earnings per common share

$
0.55


$
0.67


$
0.34


$
0.47


$
0.56

Adjusted diluted earnings per common share⁽¹⁾

$
0.55


$
0.67


$
0.51


$
0.50


$
0.52

Shares outstanding end of period


26,709,411



26,949,936



26,279,761



26,260,785



20,824,509

Unaudited consolidated balance sheet as of:



March 31,


December 31,


September 30,


June 30,


March 31,

(Dollars in thousands)

2019


2018


2018


2018


2018

ASSETS




















Total cash and cash equivalents

$
171,950


$
234,939


$
282,409


$
133,365


$
106,046

Securities - available for sale


339,465



336,423



355,981



183,184



192,916

Securities - held to maturity


8,499



8,487



8,403



8,673



8,614

Equity securities


5,183



5,044



4,981



5,025



4,925

Loans held for sale


610



2,106



683



—



—

Loans held for investment


3,612,869



3,608,644



3,512,143



3,196,462



2,873,985

Allowance for loan and lease losses


(27,605
)


(27,571
)


(27,256
)


(24,547
)


(20,022
)
Loans, net


3,585,264



3,581,073



3,484,887



3,171,915



2,853,963

FHLB stock


21,191



15,943



23,109



19,223



16,508

Premises and equipment, net


84,931



83,392



82,935



68,313



62,826

Other real estate owned ("OREO"), net


3,073



2,060



2,442



2,528



9,186

Goodwill and intangible assets, net


197,015



199,417



201,842



117,777



63,923

Bank-owned life insurance


40,667



40,509



40,339



40,168



44,534

Deferred tax asset, net


7,608



8,438



8,137



8,810



8,849

Other assets


64,327



41,948



40,954



35,650



32,720

Total assets

$
4,529,783


$
4,559,779


$
4,537,102


$
3,794,631


$
3,405,010

LIABILITIES




















Non-interest bearing deposits

$
667,597


$
724,527


$
697,903


$
561,033


$
548,991

Interest bearing deposits


2,646,843



2,725,822



2,741,146



2,063,909



1,984,507

Total deposits


3,314,440



3,450,349



3,439,049



2,624,942



2,533,498

Customer repurchase agreements


3,727



4,485



13,248



10,509



6,751

Federal Home Loan Bank advances


405,000



330,000



330,000



420,000



355,000

Subordinated notes


48,956



48,929



48,903



48,878



48,853

Junior subordinated debentures


39,200



39,083



38,966



38,849



38,734

Other liabilities


72,244



50,326



50,295



44,228



19,230

Total liabilities


3,883,567



3,923,172



3,920,461



3,187,406



3,002,066

EQUITY




















Preferred stock series A


—



—



4,550



4,550



4,550

Preferred stock series B


—



—



5,108



5,108



5,108

Common stock


271



271



264



264



209

Additional paid-in-capital


470,292



469,341



458,920



457,980



265,406

Treasury stock, at cost


(9,881
)


(2,288
)


(2,285
)


(2,254
)


(1,853
)
Retained earnings


185,274



170,486



152,401



143,426



131,234

Accumulated other comprehensive income


260



(1,203
)


(2,317
)


(1,849
)


(1,710
)
Total equity


646,216



636,607



616,641



607,225



402,944

Total liabilities and equity

$
4,529,783


$
4,559,779


$
4,537,102


$
3,794,631


$
3,405,010

Unaudited consolidated statement of income:



For the Three Months Ended



March 31,


December 31,


September 30,


June 30,


March 31,

(Dollars in thousands)

2019


2018


2018


2018


2018

Interest income:




















Loans, including fees

$
45,094


$
44,435


$
41,257


$
38,148


$
36,883

Factored receivables, including fees


24,556



28,070



27,939



20,791



15,303

Securities


2,644



2,314



1,551



1,179



1,310

FHLB stock


192



154



147



101



105

Cash deposits


778



877



865



1,030



517

Total interest income


73,264



75,850



71,759



61,249



54,118

Interest expense:




















Deposits


8,218



7,931



6,219



4,631



4,277

Subordinated notes


839



839



837



838



837

Junior subordinated debentures


760



717



714



713



597

Other borrowings


2,136



1,482



2,207



1,810



1,277

Total interest expense


11,953



10,969



9,977



7,992



6,988

Net interest income


61,311



64,881



61,782



53,257



47,130

Provision for loan losses


1,014



1,910



6,803



4,906



2,548

Net interest income after provision for loan losses


60,297



62,971



54,979



48,351



44,582

Non-interest income:




















Service charges on deposits


1,606



1,702



1,412



1,210



1,145

Card income


1,844



1,999



1,877



1,394



1,244

Net OREO gains (losses) and valuation adjustments


209



37



65



(528
)


(88
)
Net gains (losses) on sale of securities


(11
)


—



—



—



(272
)
Fee income


1,612



1,636



1,593



1,121



800

Insurance commissions


919



846



1,113



819



714

Gain on sale of subsidiary


—



—



—



—



1,071

Other


1,359



574



(1
)


929



558

Total non-interest income


7,538



6,794



6,059



4,945



5,172

Non-interest expense:




















Salaries and employee benefits


26,439



25,586



24,695



20,527



19,404

Occupancy, furniture and equipment


4,522



4,402



3,553



3,014



3,054

FDIC insurance and other regulatory assessments


299



184



363



383



199

Professional fees


1,865



1,837



3,384



2,078



1,640

Amortization of intangible assets


2,402



2,438



2,064



1,361



1,117

Advertising and promotion


1,604



1,036



1,609



1,300



1,029

Communications and technology


4,874



4,388



7,252



3,271



3,359

Other


6,561



7,091



6,026



5,469



4,240

Total non-interest expense


48,566



46,962



48,946



37,403



34,042

Net income before income tax


19,269



22,803



12,092



15,893



15,712

Income tax expense


4,481



4,718



2,922



3,508



3,644

Net income

$
14,788


$
18,085


$
9,170


$
12,385


$
12,068

Dividends on preferred stock


—



—



(195
)


(193
)


(190
)
Net income available to common stockholders

$
14,788


$
18,085


$
8,975


$
12,192


$
11,878

Earnings per share:



For the Three Months Ended



March 31,


December 31,


September 30,


June 30,


March 31,

(Dollars in thousands)

2019


2018


2018


2018


2018

Basic




















Net income to common stockholders

$
14,788


$
18,085


$
8,975


$
12,192


$
11,878

Weighted average common shares outstanding


26,679,724



26,666,554



26,178,194



25,519,108



20,721,363

Basic earnings per common share

$
0.55


$
0.68


$
0.34


$
0.48


$
0.57






















Diluted




















Net income to common stockholders

$
14,788


$
18,085


$
8,975


$
12,192


$
11,878

Dilutive effect of preferred stock


—



—



195



193



190

Net income to common stockholders - diluted

$
14,788


$
18,085


$
9,170


$
12,385


$
12,068

Weighted average common shares outstanding


26,679,724



26,666,554



26,178,194



25,519,108



20,721,363

Dilutive effects of:




















Assumed conversion of Preferred A


—



89,240



315,773



315,773



315,773

Assumed conversion of Preferred B


—



100,176



354,471



354,471



354,471

Assumed exercises of stock options


64,166



76,219



90,320



86,821



83,872

Restricted stock awards


49,795



46,457



45,796



37,417



85,045

Restricted stock units


—



1,303



7,276



2,288



—

Performance stock units


—



—



—



—



—

Weighted average shares outstanding - diluted


26,793,685



26,979,949



26,991,830



26,315,878



21,560,524

Diluted earnings per common share

$
0.55


$
0.67


$
0.34


$
0.47


$
0.56











































Shares that were not considered in computing diluted earnings per common share because they were antidilutive are as follows:
























For the Three Months Ended



March 31,


December 31,


September 30,


June 30,


March 31,



2019


2018


2018


2018


2018

Assumed conversion of Preferred A


—



—



—



—



—

Assumed conversion of Preferred B


—



—



—



—



—

Stock options


50,752



51,952



51,952



51,952



—

Restricted stock awards


13,290



14,513



14,513



—



—

Restricted stock units


58,400



—



—



—



—

Performance stock units


58,400



59,658



59,658



59,658



—

Loans held for investment summarized as of:



March 31,


December 31,


September 30,


June 30,


March 31,

(Dollars in thousands)

2019


2018


2018


2018


2018

Commercial real estate

$
1,093,882


$
992,080


$
906,494


$
766,839


$
781,006

Construction, land development, land


145,002



179,591



190,920



147,852



143,876

1-4 family residential properties


194,067



190,185



194,752



122,653



122,979

Farmland


156,299



170,540



177,313



177,060



184,064

Commercial


1,117,640



1,114,971



1,123,598



1,006,443



930,283

Factored receivables


570,663



617,791



611,285



603,812



397,145

Consumer


27,941



29,822



31,423



28,775



29,244

Mortgage warehouse


307,375



313,664



276,358



343,028



285,388

Total loans

$
3,612,869


$
3,608,644


$
3,512,143


$
3,196,462


$
2,873,985

A portion of our total loans held for investment portfolio consists of traditional community bank loans as well as commercial finance products offered under our commercial finance brands on a nationwide basis. Commercial finance loans are further summarized below:



March 31,


December 31,


September 30,


June 30,


March 31,

(Dollars in thousands)

2019


2018


2018


2018


2018

Equipment

$
364,447


$
352,037


$
323,832


$
290,314


$
260,502

Asset based lending (General)


174,447



214,110



273,096



261,412



230,314

Premium finance


77,389



72,302



75,293



51,416



48,561

Factored receivables


570,663



617,791



611,285



603,812



397,145

Commercial finance

$
1,186,946


$
1,256,240


$
1,283,506


$
1,206,954


$
936,522






















Commercial finance % of total loans


33
%


35
%


37
%


38
%


33
%

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



March 31,


December 31,


September 30,


June 30,


March 31,

(Dollars in thousands)

2019


2018


2018


2018


2018

Average community banking

$
2,340,295


$
2,268,262


$
2,039,624


$
1,897,678


$
1,816,921

Average commercial finance⁽¹⁾


1,194,748



1,264,209



1,254,095



1,024,369



949,938

Average total loans

$
3,535,043


$
3,532,471


$
3,293,719


$
2,922,047


$
2,766,859

Community banking yield


5.87
%


5.78
%


5.68
%


5.80
%


5.81
%
Commercial finance yield⁽¹⁾


12.15
%


12.39
%


12.66
%


12.08
%


11.17
%
Total loan yield


7.99
%


8.14
%


8.33
%


8.09
%


7.65
%

⁽¹⁾ Includes assets held for sale for the period ended March 31, 2018

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:



March 31,


December 31,


September 30,


June 30,


March 31,



2019


2018


2018


2018


2018

Factored receivable period end balance

$
534,420,000


$
588,750,000


$
579,985,000


$
577,548,000


$
372,771,000

Yield on average receivable balance


17.96
%


18.24
%


18.96
%


18.70
%


17.40
%
Rolling twelve quarter annual charge-off rate


0.39
%


0.37
%


0.38
%


0.41
%


0.50
%
Factored receivables - transportation concentration


81
%


83
%


83
%


84
%


86
%





















Interest income, including fees

$
23,803,000


$
27,578,000


$
27,420,000


$
20,314,000


$
14,780,000

Non-interest income


1,077,000



1,032,000



942,000



920,000



590,000

Factored receivable total revenue


24,880,000



28,610,000



28,362,000



21,234,000



15,370,000

Average net funds employed


490,241,000



547,996,000



525,499,000



398,096,000



316,488,000

Yield on average net funds employed


20.58
%


20.71
%


21.41
%


21.39
%


19.70
%





















Accounts receivable purchased

$
1,325,140,000


$
1,541,332,000


$
1,503,049,000


$
1,162,810,000


$
912,336,000

Number of invoices purchased


789,838



882,042



836,771



656,429



521,906

Average invoice size

$
1,678


$
1,747


$
1,796


$
1,771


$
1,751

Average invoice size - transportation

$
1,541


$
1,625


$
1,666


$
1,695


$
1,662

Average invoice size - non-transportation

$
3,276


$
3,209


$
3,267


$
2,522


$
2,627






















Net new clients


191



259



422



2,072



280

Period end clients


6,382



6,191



5,932



5,510



3,438

Deposits summarized as of:



March 31,


December 31,


September 30,


June 30,


March 31,


(Dollars in thousands)

2019


2018


2018


2018


2018


Non-interest bearing demand

$
667,597


$
724,527


$
697,903


$
561,033


$
548,991


Interest bearing demand


602,088



615,704



608,775



358,246



392,947


Individual retirement accounts


112,696



115,583



118,459



101,380



105,558


Money market


372,109



443,663



413,402



268,699



283,354


Savings


372,914



369,389



373,062



239,127



244,103


Certificates of deposit


851,411



835,127



854,048



751,290



783,651


Brokered deposits


335,625



346,356



373,400



345,167



174,894


Total deposits

$
3,314,440


$
3,450,349


$
3,439,049


$
2,624,942


$
2,533,498

Net interest margin summarized for the three months ended:



March 31, 2019


December 31, 2018



Average






Average


Average






Average

(Dollars in thousands)

Balance


Interest


Rate


Balance


Interest


Rate

Interest earning assets:
























Interest earning cash balances

$
126,372


$
778



2.50
%

$
152,212


$
877



2.29
%
Taxable securities


275,642



2,169



3.19
%


235,234



1,674



2.82
%
Tax-exempt securities


88,667



475



2.17
%


123,575



640



2.05
%
FHLB stock


17,860



192



4.36
%


16,426



154



3.72
%
Loans


3,535,043



69,650



7.99
%


3,532,471



72,505



8.14
%
Total interest earning assets

$
4,043,584


$
73,264



7.35
%

$
4,059,918


$
75,850



7.41
%
Non-interest earning assets:
























Other assets


458,176











429,000









Total assets

$
4,501,760










$
4,488,918









Interest bearing liabilities:
























Deposits:
























Interest bearing demand

$
606,096


$
374



0.25
%

$
613,872


$
417



0.27
%
Individual retirement accounts


113,636



405



1.45
%


116,575



385



1.31
%
Money market


408,953



1,331



1.32
%


430,864



1,312



1.21
%
Savings


370,067



123



0.13
%


373,650



159



0.17
%
Certificates of deposit


834,515



3,965



1.93
%


862,500



3,749



1.72
%
Brokered deposits


353,829



2,020



2.32
%


347,498



1,909



2.18
%
Total deposits


2,687,096



8,218



1.24
%


2,744,959



7,931



1.15
%
Subordinated notes


48,940



839



6.95
%


48,914



839



6.81
%
Junior subordinated debentures


39,125



760



7.88
%


39,011



717



7.29
%
Other borrowings


336,667



2,136



2.57
%


262,391



1,482



2.24
%
Total interest bearing liabilities

$
3,111,828


$
11,953



1.56
%

$
3,095,275


$
10,969



1.41
%
Non-interest bearing liabilities and equity:
























Non-interest bearing demand deposits


679,538











714,884









Other liabilities


65,434











46,633









Total equity


644,960











632,126









Total liabilities and equity

$
4,501,760










$
4,488,918









Net interest income





$
61,311










$
64,881





Interest spread










5.79
%










6.00
%
Net interest margin










6.15
%










6.34
%

Metrics and non-GAAP financial reconciliation:



As of and for the Three Months Ended

(Dollars in thousands,

March 31,


December 31,


September 30,


June 30,


March 31,

except per share amounts)

2019


2018


2018


2018


2018

Net income available to common stockholders

$
14,788


$
18,085


$
8,975


$
12,192


$
11,878

Gain on sale of subsidiary


—



—



—



—



(1,071
)
Transaction related costs


—



—



5,871



1,094



—

Tax effect of adjustments


—



—



(1,392
)


(257
)


248

Adjusted net income available to common stockholders

$
14,788


$
18,085


$
13,454


$
13,029


$
11,055

Dilutive effect of convertible preferred stock


—



—



195



193



190

Adjusted net income available to common stockholders - diluted

$
14,788


$
18,085


$
13,649


$
13,222


$
11,245






















Weighted average shares outstanding - diluted


26,793,685



26,979,949



26,991,830



26,315,878



21,560,524

Adjusted effects of assumed Preferred Stock conversion


—



—



—



—



—

Adjusted weighted average shares outstanding - diluted


26,793,685



26,979,949



26,991,830



26,315,878



21,560,524

Adjusted diluted earnings per common share

$
0.55


$
0.67


$
0.51


$
0.50


$
0.52






















Net income available to common stockholders

$
14,788


$
18,085


$
8,975


$
12,192


$
11,878

Average tangible common equity


446,571



428,748



470,553



491,492



326,614

Return on average tangible common equity


13.43
%


16.73
%


7.57
%


9.95
%


14.75
%





















Adjusted efficiency ratio:




















Net interest income

$
61,311


$
64,881


$
61,782


$
53,257


$
47,130

Non-interest income


7,538



6,794



6,059



4,945



5,172

Operating revenue


68,849



71,675



67,841



58,202



52,302

Gain on sale of subsidiary


—



—



—



—



(1,071
)
Adjusted operating revenue

$
68,849


$
71,675


$
67,841


$
58,202


$
51,231

Non-interest expenses

$
48,566


$
46,962


$
48,946


$
37,403


$
34,042

Transaction related costs


—



—



(5,871
)


(1,094
)


—

Adjusted non-interest expenses

$
48,566


$
46,962


$
43,075


$
36,309


$
34,042

Adjusted efficiency ratio


70.54
%


65.52
%


63.49
%


62.38
%


66.45
%





















Adjusted net non-interest expense to average assets ratio:




















Non-interest expenses

$
48,566


$
46,962


$
48,946


$
37,403


$
34,042

Transaction related costs


—



—



(5,871
)


(1,094
)


—

Adjusted non-interest expenses

$
48,566


$
46,962


$
43,075


$
36,309


$
34,042






















Total non-interest income

$
7,538


$
6,794


$
6,059


$
4,945


$
5,172

Gain on sale of subsidiary


—



—



—



—



(1,071
)
Adjusted non-interest income

$
7,538


$
6,794


$
6,059


$
4,945


$
4,101

Adjusted net non-interest expenses

$
41,028


$
40,168


$
37,016


$
31,364


$
29,941

Average total assets

$
4,501,760


$
4,488,918


$
4,060,560


$
3,628,960


$
3,410,883

Adjusted net non-interest expense to average assets ratio


3.70
%


3.55
%


3.62
%


3.47
%


3.56
%





















Total stockholders' equity

$
646,216


$
636,607


$
616,641


$
607,225


$
402,944

Preferred stock liquidation preference


—



—



(9,658
)


(9,658
)


(9,658
)
Total common stockholders' equity


646,216



636,607



606,983



597,567



393,286

Goodwill and other intangibles


(197,015
)


(199,417
)


(201,842
)


(117,777
)


(63,923
)
Tangible common stockholders' equity

$
449,201


$
437,190


$
405,141


$
479,790


$
329,363

Common shares outstanding


26,709,411



26,949,936



26,279,761



26,260,785



20,824,509

Tangible book value per share

$
16.82


$
16.22


$
15.42


$
18.27


$
15.82






















Total assets at end of period

$
4,529,783


$
4,559,779


$
4,537,102


$
3,794,631


$
3,405,010

Goodwill and other intangibles


(197,015
)


(199,417
)


(201,842
)


(117,777
)


(63,923
)
Adjusted total assets at period end

$
4,332,768


$
4,360,362


$
4,335,260


$
3,676,854


$
3,341,087

Tangible common stockholders' equity ratio


10.37
%


10.03
%


9.35
%


13.05
%


9.86
%

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 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



March 31,


December 31,


September 30,


June 30,


March 31,

(Dollars in thousands)

2019


2018


2018


2018


2018

Loan discount accretion

$
1,557


$
1,411


$
1,271


$
3,637


$
1,977

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

4) Current quarter ratios are preliminary.

Source: Triumph Bancorp, Inc.

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

Media Contact:
Amanda Tavackoli
Senior Vice President, Marketing & Communication
atavackoli@tbkbank.com
214-365-6930

Company Name:	Triumph Bancorp Inc.
Stock Symbol:	TBK
Market:	NASDAQ

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