TBK - Triumph Bancorp Reports First Quarter Net Loss to Common Stockholders of $4.5 Million

April, 20 2020 04:07 PM Triumph Bancorp Inc.

DALLAS, April 20, 2020 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (Nasdaq: TBK) (“Triumph” or the “Company”) today announced earnings and operating results for the first 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 First Quarter Highlights and Recent Developments

For the first quarter of 2020, net loss available to common stockholders was $4.5 million. Diluted losses per share were $0.18.
On January 1, 2020, we adopted Accounting Standard Update 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” commonly referred to as the Current Expected Credit Losses (“CECL”) model.
For the quarter ended March 31, 2020, we recorded $20.3 million of total credit loss expense. $17.4 million of this is recorded as credit loss expense related to our loan portfolio summarized as follows:
- Significant deterioration in our macroeconomic forecasts to reflect expected economic impact of COVID-19 resulted in approximately $10.5 million of credit loss expense.
- $3.0 million of credit loss expense is due to net loan growth of $126.0 million and changes in the mix of our total loan portfolio. Net charge offs were $1.5 million and the change in specific reserves was $2.3 million.
- The adoption of CECL on January 1, 2020, increased the ACL by $0.3 million.
- Our ACL as a percentage of loans held for investment increased 34 basis points during the quarter to 1.04% at March 31, 2020.
For the quarter ended March 31, 2020, we recorded in other noninterest expense $2.9 million of credit loss expense related to off balance sheet commitments to lend to reserve for the contractual term of the commitments considering our economic forecast of future conditions. Total unfunded commitments subject to the reserve as of March 31, 2020 were $596.1 million. This includes a $105.3 million increase in unsettled liquid credit balances at the end of the period that created approximately $1.6 million of credit expense for the quarter.
Net interest margin (“NIM”) was 5.63% for the quarter ended March 31, 2020.
Total loans held for investment increased $126.0 million, or 3.0%, to $4.321 billion at March 31, 2020. Excluding premium finance loans, loan growth totaled $227.1 million. Average loans for the quarter decreased $88.6 million, or 2.1%, to $4.046 billion.
The total dollar value of invoices purchased by Triumph Business Capital for the quarter ended March 31, 2020 was $1.451 billion with an average invoice size of $1,651. The transportation average invoice size for the quarter was $1,481.
For the quarter ended March 31, 2020, TriumphPay processed 504,250 invoices paying 44,568 distinct carriers a total of $530.8 million.
During the quarter ended March 31, 2020, we repurchased 871,319 shares into treasury stock under our stock repurchase program at an average price of $40.81, for a total of $35.6 million, effectively completing the $50.0 million stock repurchase program authorized by our board of directors on October 16, 2019.
On April 20, 2020, the Company entered into an agreement to sell the assets (the “Disposal Group”) of Triumph Premium Finance (“TPF”) and exit its premium finance line of business. The decision to sell TPF was made during the three months ended March 31, 2020, and at March 31, 2020, the carrying amount of the Disposal Group, primarily consisting of $98.3 million of premium finance loans, was transferred to assets held for sale.

Balance Sheet

Total loans held for investment increased $126.0 million, or 3.0%, during the first quarter to $4.321 billion at March 31, 2020. The commercial finance portfolio increased $135.1 million, or 10.8%, to $1.386 billion, the national lending portfolio increased $61.2 million, or 7.2%, to $911.6 million, and the community banking portfolio decreased $70.3 million, or 3.4%, to $2.023 billion during the quarter.

Total deposits were $3.682 billion at March 31, 2020, a decrease of $107.9 million, or 2.8%, in the first quarter of 2020. Non-interest-bearing deposits accounted for 23% of total deposits and non-time deposits accounted for 60% of total deposits at March 31, 2020.

Net Interest Income

We earned net interest income for the quarter ended March 31, 2020 of $62.5 million compared to $66.4 million for the quarter ended December 31, 2019.

Yields on loans for the quarter ended March 31, 2020 were down 26 bps from the prior quarter to 7.22%. The average cost of our total deposits was 1.05% for the quarter ended March 31, 2020 compared to 1.15% for the quarter ended December 31, 2019.

Asset Quality

Non-performing assets were 1.09% of total assets at March 31, 2020 compared to 0.87% of total assets at December 31, 2019. The ratio of past due to total loans increased to 1.99% at March 31, 2020 from 1.74% at December 31, 2019. We recorded total net charge-offs of $1.5 million, or 0.04% of average loans, for the quarter ended March 31, 2020 compared to net charge-offs of $3.2 million, or 0.08% of average loans, for the quarter ended December 31, 2019.

Non-Interest Income and Expense

We earned non-interest income for the quarter ended March 31, 2020 of $7.5 million compared to $8.7 million for the quarter ended December 31, 2019.

For the quarter ended March 31, 2020, non-interest expense totaled $57.7 million, which included $2.9 million of credit loss expense for off balance sheet commitments to lend. Credit loss expense for off balance sheet commitments to lend had a 420 basis point impact on our efficiency ratio this quarter. Non-interest expense for the quarter ended December 31, 2019 was $52.7 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, April 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/tbk200421.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.

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



March 31,


December 31,


September 30,


June 30,


March 31,

(Dollars in thousands)

2020


2019


2019


2019


2019

Financial Highlights:




















Total assets

$
5,353,729


$
5,060,297


$
5,039,697


$
4,783,189


$
4,529,783

Loans held for investment

$
4,320,548


$
4,194,512


$
4,209,417


$
3,835,903


$
3,612,869

Deposits

$
3,682,015


$
3,789,906


$
3,697,833


$
3,658,978


$
3,314,440

Net income available to common stockholders

$
(4,450
)

$
16,709


$
14,317


$
12,730


$
14,788






















Performance Ratios - Annualized:




















Return on average assets


(0.36
%)


1.31
%


1.17
%


1.09
%


1.33
%
Return on average total equity


(2.85
%)


10.24
%


8.79
%


7.83
%


9.30
%
Return on average tangible common equity ⁽¹⁾


(4.09
%)


14.54
%


12.56
%


11.19
%


13.43
%
Yield on loans⁽²⁾


7.22
%


7.48
%


7.63
%


7.95
%


7.99
%
Cost of interest bearing deposits


1.34
%


1.45
%


1.49
%


1.42
%


1.24
%
Cost of total deposits


1.05
%


1.15
%


1.19
%


1.14
%


0.99
%
Cost of total funds


1.23
%


1.35
%


1.41
%


1.40
%


1.28
%
Net interest margin⁽²⁾


5.63
%


5.72
%


5.85
%


5.99
%


6.15
%
Net non-interest expense to average assets


4.12
%


3.46
%


3.64
%


3.68
%


3.70
%
Efficiency ratio


82.44
%


70.15
%


71.93
%


71.37
%


70.54
%





















Asset Quality:⁽³⁾




















Past due to total loans⁽⁴⁾


1.99
%


1.74
%


1.91
%


1.60
%


2.17
%
Non-performing loans to total loans


1.26
%


0.97
%


1.00
%


0.96
%


0.95
%
Non-performing assets to total assets


1.09
%


0.87
%


0.91
%


0.86
%


0.84
%
ACL to non-performing loans⁽⁵⁾


82.37
%


71.63
%


75.58
%


79.91
%


80.70
%
ACL to total loans⁽⁵⁾


1.04
%


0.69
%


0.76
%


0.77
%


0.76
%
Net charge-offs to average loans


0.04
%


0.08
%


0.01
%


0.05
%


0.03
%





















Capital:




















Tier 1 capital to average assets⁽⁶⁾


9.62
%


10.03
%


10.37
%


10.84
%


11.32
%
Tier 1 capital to risk-weighted assets⁽⁶⁾


9.03
%


10.29
%


10.08
%


11.08
%


11.76
%
Common equity tier 1 capital to risk-weighted assets⁽⁶⁾


8.24
%


9.46
%


9.26
%


10.19
%


10.81
%
Total capital to risk-weighted assets⁽⁵⁾


11.63
%


12.76
%


11.79
%


12.88
%


13.62
%
Total equity to total assets


11.01
%


12.58
%


12.57
%


13.45
%


14.27
%
Tangible common stockholders' equity to tangible assets⁽¹⁾


7.77
%


9.16
%


9.10
%


9.78
%


10.37
%





















Per Share Amounts:




















Book value per share

$
24.45


$
25.50


$
24.99


$
24.56


$
24.19

Tangible book value per share⁽¹⁾

$
16.64


$
17.88


$
17.40


$
17.13


$
16.82

Basic earnings (loss) per common share

$
(0.18
)

$
0.67


$
0.56


$
0.48


$
0.55

Diluted earnings (loss) per common share

$
(0.18
)

$
0.66


$
0.56


$
0.48


$
0.55

Shares outstanding end of period


24,101,120



24,964,961



25,357,985



26,198,308



26,709,411

Unaudited consolidated balance sheet as of:



March 31,


December 31,


September 30,


June 30,


March 31,

(Dollars in thousands)

2020


2019


2019


2019


2019

ASSETS




















Total cash and cash equivalents

$
208,414


$
197,880


$
115,043


$
209,305


$
171,950

Securities - available for sale


302,122



248,820



302,917



329,991



339,465

Securities - held to maturity


8,217



8,417



8,517



8,573



8,499

Equity securities


5,678



5,437



5,543



5,479



5,183

Loans held for sale


4,431



2,735



7,499



2,877



610

Loans held for investment


4,320,548



4,194,512



4,209,417



3,835,903



3,612,869

Allowance for credit losses


(44,732
)


(29,092
)


(31,895
)


(29,416
)


(27,605
)
Loans, net


4,275,816



4,165,420



4,177,522



3,806,487



3,585,264

Assets held for sale


97,895



—



—



—



—

FHLB and other restricted stock


37,080



19,860



23,960



18,037



21,191

Premises and equipment, net


98,363



96,595



87,112



84,998



84,931

Other real estate owned ("OREO"), net


2,540



3,009



2,849



3,351



3,073

Goodwill and intangible assets, net


188,208



190,286



192,440



194,668



197,015

Bank-owned life insurance


41,122



40,954



40,724



40,847



40,667

Deferred tax asset, net


9,457



3,812



5,971



7,278



7,608

Other assets


74,386



77,072



69,600



71,298



64,327

Total assets

$
5,353,729


$
5,060,297


$
5,039,697


$
4,783,189


$
4,529,783

LIABILITIES




















Non-interest bearing deposits

$
846,412


$
809,696


$
754,233


$
684,223


$
667,597

Interest bearing deposits


2,835,603



2,980,210



2,943,600



2,974,755



2,646,843

Total deposits


3,682,015



3,789,906



3,697,833



3,658,978



3,314,440

Customer repurchase agreements


3,693



2,033



14,124



12,788



3,727

Federal Home Loan Bank advances


850,000



430,000



530,000



305,000



405,000

Subordinated notes


87,347



87,327



49,010



48,983



48,956

Junior subordinated debentures


39,689



39,566



39,443



39,320



39,200

Other liabilities


101,638



74,875



75,594



74,758



72,244

Total liabilities


4,764,382



4,423,707



4,406,004



4,139,827



3,883,567

EQUITY




















Common stock


272



272



272



271



271

Additional paid-in-capital


474,441



473,251



472,368



471,145



470,292

Treasury stock, at cost


(102,677
)


(67,069
)


(52,632
)


(27,468
)


(9,881
)
Retained earnings


222,809



229,030



212,321



198,004



185,274

Accumulated other comprehensive income (loss)


(5,498
)


1,106



1,364



1,410



260

Total stockholders' equity


589,347



636,590



633,693



643,362



646,216

Total liabilities and equity

$
5,353,729


$
5,060,297


$
5,039,697


$
4,783,189


$
4,529,783

Unaudited consolidated statement of income:



For the Three Months Ended



March 31,


December 31,


September 30,


June 30,


March 31,

(Dollars in thousands)

2020


2019


2019


2019


2019

Interest income:




















Loans, including fees

$
48,323


$
52,395


$
50,249


$
47,910


$
45,094

Factored receivables, including fees


24,292



25,573



25,570



25,558



24,556

Securities


2,107



2,379



2,784



2,667



2,644

FHLB and other restricted stock


204



165



209



146



192

Cash deposits


488



659



603



1,022



778

Total interest income


75,414



81,171



79,415



77,303



73,264

Interest expense:




















Deposits


9,677



10,961



11,036



10,010



8,218

Subordinated notes


1,347



1,035



840



839



839

Junior subordinated debentures


646



687



719



744



760

Other borrowings


1,244



2,080



2,055



2,291



2,136

Total interest expense


12,914



14,763



14,650



13,884



11,953

Net interest income


62,500



66,408



64,765



63,419



61,311

Credit loss expense


17,361



382



2,865



3,681



1,014

Net interest income after credit loss expense


45,139



66,026



61,900



59,738



60,297

Non-interest income:




















Service charges on deposits


1,588



1,889



1,937



1,700



1,606

Card income


1,800



1,943



2,015



2,071



1,844

Net OREO gains (losses) and valuation adjustments


(257
)


50



(56
)


148



209

Net gains (losses) on sale of securities


38



39



19



14



(11
)
Fee income


1,686



1,686



1,624



1,519



1,612

Insurance commissions


1,051



1,092



1,247



961



919

Other


1,571



1,967



956



1,210



1,359

Total non-interest income


7,477



8,666



7,742



7,623



7,538

Non-interest expense:




















Salaries and employee benefits


30,722



29,586



28,717



28,120



26,439

Occupancy, furniture and equipment


5,182



4,667



4,505



4,502



4,522

FDIC insurance and other regulatory assessments


315



(302
)


(2
)


303



299

Professional fees


2,107



1,904



1,969



1,550



1,865

Amortization of intangible assets


2,078



2,154



2,228



2,347



2,402

Advertising and promotion


1,292



1,347



1,379



1,796



1,604

Communications and technology


5,501



5,732



5,382



4,988



4,874

Other


10,493



7,573



7,975



7,098



6,561

Total non-interest expense


57,690



52,661



52,153



50,704



48,566

Net income (loss) before income tax


(5,074
)


22,031



17,489



16,657



19,269

Income tax expense (benefit)


(624
)


5,322



3,172



3,927



4,481

Net income (loss)

$
(4,450
)

$
16,709


$
14,317


$
12,730


$
14,788

Earnings per share:



For the Three Months Ended



March 31,


December 31,


September 30,


June 30,


March 31,

(Dollars in thousands)

2020


2019


2019


2019


2019

Basic




















Net income (loss) to common stockholders

$
(4,450
)

$
16,709


$
14,317


$
12,730


$
14,788

Weighted average common shares outstanding


24,314,329



25,089,447



25,621,054



26,396,351



26,679,724

Basic earnings (loss) per common share

$
(0.18
)

$
0.67


$
0.56


$
0.48


$
0.55






















Diluted




















Net income (loss) to common stockholders - diluted

$
(4,450
)

$
16,709


$
14,317


$
12,730


$
14,788

Weighted average common shares outstanding


24,314,329



25,089,447



25,621,054



26,396,351



26,679,724

Dilutive effects of:




















Assumed exercises of stock options


—



69,865



60,068



59,962



64,166

Restricted stock awards


—



70,483



45,631



30,110



49,795

Restricted stock units


—



13,264



3,045



—



—

Performance stock units - market based


—



11,803



4,673



—



—

Performance stock units - performance based


—



—



—



—



—

Weighted average shares outstanding - diluted


24,314,329



25,254,862



25,734,471



26,486,423



26,793,685

Diluted earnings (loss) per common share

$
(0.18
)

$
0.66


$
0.56


$
0.48


$
0.55






















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,



2020


2019


2019


2019


2019

Stock options


225,055



66,019



67,023



70,037



50,752

Restricted stock awards


147,748



—



3,209



—



13,290

Restricted stock units


55,228



—



—



58,400



58,400

Performance stock units - market based


67,707



55,228



55,228



70,879



58,400

Performance stock units - performance based


254,000



254,000



—



—



—

Loans held for investment summarized as of:



March 31,


December 31,


September 30,


June 30,


March 31,

(Dollars in thousands)

2020


2019


2019


2019


2019

Commercial real estate

$
985,757


$
1,046,961


$
1,115,559


$
1,098,279


$
1,093,882

Construction, land development, land


198,050



160,569



164,186



157,861



145,002

1-4 family residential properties


169,703



179,425



186,405



186,070



194,067

Farmland


133,579



154,975



161,447



144,594



156,299

Commercial


1,412,822



1,342,683



1,369,505



1,257,330



1,117,640

Factored receivables


661,100



619,986



599,651



583,131



570,663

Consumer


20,326



21,925



24,967



26,048



27,941

Mortgage warehouse


739,211



667,988



587,697



382,590



307,375

Total loans

$
4,320,548


$
4,194,512


$
4,209,417


$
3,835,903


$
3,612,869

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:



March 31,


December 31,


September 30,


June 30,


March 31,

(Dollars in thousands)

2020


2019


2019


2019


2019

Commercial - Equipment

$
479,483


$
461,555


$
429,412


$
395,094


$
364,447

Commercial - Asset-based lending


245,001



168,955



247,026



208,896



174,447

Factored receivables


661,100



619,986



599,651



583,131



570,663

Commercial finance

$
1,385,584


$
1,250,496


$
1,276,089


$
1,187,121


$
1,109,557






















Commercial finance % of total loans


32
%


30
%


30
%


31
%


31
%

National lending loans are further summarized below:



March 31,


December 31,


September 30,


June 30,


March 31,

(Dollars in thousands)

2020


2019


2019


2019


2019

Mortgage warehouse

$
739,211


$
667,988


$
587,697


$
382,590


$
307,375

Commercial - Liquid credit


172,380



81,353



37,386



21,758



960

Commercial - Premium finance


—



101,015



101,562



72,898



77,389

National lending

$
911,591


$
850,356


$
726,645


$
477,246


$
385,724






















National lending % of total loans


21
%


20
%


17
%


12
%


11
%

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



March 31,


December 31,


September 30,


June 30,


March 31,

(Dollars in thousands)

2020


2019


2019


2019


2019

Average community banking

$
2,041,256


$
2,170,149


$
2,193,533


$
2,166,122


$
2,103,816

Average commercial finance


1,292,749



1,260,000



1,208,823



1,168,110



1,123,978

Average national lending


711,837



704,244



541,367



373,755



307,249

Average total loans

$
4,045,842


$
4,134,393


$
3,943,723


$
3,707,987


$
3,535,043

Community banking yield


5.67
%


5.89
%


5.79
%


5.88
%


5.91
%
Commercial finance yield


11.00
%


11.64
%


12.31
%


12.52
%


12.50
%
National lending yield


4.80
%


4.96
%


4.63
%


5.62
%


5.73
%
Total loan yield


7.22
%


7.48
%


7.63
%


7.95
%


7.99
%

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,



2020


2019


2019


2019


2019

Factored receivable period end balance

$
641,366,000


$
573,372,000


$
562,009,000


$
544,601,000


$
534,420,000

Yield on average receivable balance


16.13
%


17.20
%


18.23
%


18.73
%


17.96
%
Rolling twelve quarter annual charge-off rate


0.42
%


0.39
%


0.36
%


0.40
%


0.39
%
Factored receivables - transportation concentration


80
%


81
%


83
%


83
%


81
%





















Interest income, including fees

$
23,497,000


$
24,813,000


$
24,869,000


$
24,762,000


$
23,803,000

Non-interest income


1,296,000



1,154,000



1,291,000



1,205,000



1,077,000

Factored receivable total revenue


24,793,000



25,967,000



26,160,000



25,967,000



24,880,000

Average net funds employed


537,138,000



524,546,000



494,198,000



483,203,000



490,241,000

Yield on average net funds employed


18.56
%


19.64
%


21.00
%


21.55
%


20.58
%





















Accounts receivable purchased

$
1,450,618,000


$
1,489,538,000


$
1,450,905,000


$
1,408,982,000


$
1,325,140,000

Number of invoices purchased


878,767



896,487



890,986



874,248



789,838

Average invoice size

$
1,651


$
1,662


$
1,628


$
1,612


$
1,678

Average invoice size - transportation

$
1,481


$
1,507


$
1,497


$
1,492


$
1,541

Average invoice size - non-transportation

$
4,061


$
3,891


$
3,467


$
3,047


$
3,276

Deposits summarized as of:



March 31,


December 31,


September 30,


June 30,


March 31,


(Dollars in thousands)

2020


2019


2019


2019


2019


Non-interest bearing demand

$
846,412


$
809,696


$
754,233


$
684,223


$
667,597


Interest bearing demand


583,445



580,323



587,123



587,164



602,088


Individual retirement accounts


101,743



104,472



108,593



111,328



112,696


Money market


412,376



497,105



424,162



440,289



372,109


Savings


367,163



363,270



356,368



362,594



372,914


Certificates of deposit


1,056,012



1,084,425



1,120,850



1,122,873



851,411


Brokered deposits


314,864



350,615



346,504



350,507



335,625


Total deposits

$
3,682,015


$
3,789,906


$
3,697,833


$
3,658,978


$
3,314,440

Net interest margin summarized for the three months ended:



March 31, 2020


December 31, 2019



Average






Average


Average






Average

(Dollars in thousands)

Balance


Interest


Rate


Balance


Interest


Rate

Interest earning assets:
























Interest earning cash balances

$
141,123


$
488



1.39
%

$
153,160


$
659



1.71
%
Taxable securities


228,996



1,955



3.43
%


254,255



2,157



3.37
%
Tax-exempt securities


25,925



152



2.36
%


37,680



222



2.34
%
FHLB and other restricted stock


21,098



204



3.89
%


25,599



165



2.56
%
Loans


4,045,842



72,615



7.22
%


4,134,393



77,968



7.48
%
Total interest earning assets

$
4,462,984


$
75,414



6.80
%

$
4,605,087


$
81,171



6.99
%
Non-interest earning assets:
























Other assets


443,563











445,773









Total assets

$
4,906,547










$
5,050,860









Interest bearing liabilities:
























Deposits:
























Interest bearing demand

$
586,671


$
344



0.24
%

$
588,590


$
373



0.25
%
Individual retirement accounts


103,351



402



1.56
%


106,645



435



1.62
%
Money market


441,815



1,031



0.94
%


490,438



1,542



1.25
%
Savings


363,888



124



0.14
%


359,024



119



0.13
%
Certificates of deposit


1,068,023



6,006



2.26
%


1,108,647



6,491



2.32
%
Brokered deposits


344,847



1,770



2.06
%


350,737



2,001



2.26
%
Total interest bearing deposits


2,908,595



9,677



1.34
%


3,004,081



10,961



1.45
%
Subordinated notes


87,323



1,347



6.20
%


63,706



1,035



6.45
%
Junior subordinated debentures


39,609



646



6.56
%


39,491



687



6.90
%
Other borrowings


361,996



1,244



1.38
%


438,447



2,080



1.88
%
Total interest bearing liabilities

$
3,397,523


$
12,914



1.53
%

$
3,545,725


$
14,763



1.65
%
Non-interest bearing liabilities and equity:
























Non-interest bearing demand deposits


810,654











791,379









Other liabilities


71,001











66,210









Total equity


627,369











647,546









Total liabilities and equity

$
4,906,547










$
5,050,860









Net interest income





$
62,500










$
66,408





Interest spread










5.27
%










5.34
%
Net interest margin










5.63
%










5.72
%

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

(Dollars in thousands,

March 31,


December 31,


September 30,


June 30,


March 31,

except per share amounts)

2020


2019


2019


2019


2019

Average total stockholders' equity

$
627,369


$
647,546


$
646,041


$
652,347


$
644,960

Average goodwill and other intangibles


(189,359
)


(191,551
)


(193,765
)


(196,002
)


(198,389
)
Average tangible common stockholders' equity

$
438,010


$
455,995


$
452,276


$
456,346


$
446,571






















Net income (loss)

$
(4,450
)

$
16,709


$
14,317


$
12,730


$
14,788

Average tangible common equity


438,010



455,995



452,276



456,346



446,571

Return on average tangible common equity


(4.09
%)


14.54
%


12.56
%


11.19
%


13.43
%










































Total stockholders' equity

$
589,347


$
636,590


$
633,693


$
643,362


$
646,216

Goodwill and other intangibles


(188,208
)


(190,286
)


(192,440
)


(194,668
)


(197,015
)
Tangible common stockholders' equity

$
401,139


$
446,304


$
441,253


$
448,694


$
449,201

Common shares outstanding


24,101,120



24,964,961



25,357,985



26,198,308



26,709,411

Tangible book value per share

$
16.64


$
17.88


$
17.40


$
17.13


$
16.82






















Total assets at end of period

$
5,353,729


$
5,060,297


$
5,039,697


$
4,783,189


$
4,529,783

Goodwill and other intangibles


(188,208
)


(190,286
)


(192,440
)


(194,668
)


(197,015
)
Tangible assets at period end

$
5,165,521


$
4,870,011


$
4,847,257


$
4,588,521


$
4,332,768

Tangible common stockholders' equity ratio


7.77
%


9.16
%


9.10
%


9.78
%


10.37
%

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



March 31,


December 31,


September 30,


June 30,


March 31,

(Dollars in thousands)

2020


2019


2019


2019


2019

Loan discount accretion

$
2,134


$
1,555


$
1,159


$
1,297


$
1,557

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, Marketing & Communication
atavackoli@tbkbank.com
214-365-6930

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

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