TBK - Triumph Bancorp Reports Fourth Quarter Net Income to Common Stockholders of $16.7 Million

January, 21 2020 04:07 PM Triumph Bancorp Inc.

DALLAS, Jan. 21, 2020 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (Nasdaq: TBK) (“Triumph” or the “Company”) today announced earnings and operating results for the fourth 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 Fourth Quarter Highlights and Recent Developments

For the fourth quarter of 2019, net income available to common stockholders was $16.7 million. Diluted earnings per share were $0.66.
Net interest margin (“NIM”) was 5.72% for the quarter ended December 31, 2019.
Total loans held for investment decreased $14.9 million, or 0.4%, to $4.195 billion at December 31, 2019. Average loans for the quarter increased $190.7 million, or 4.8%, to $4.134 billion.
The total dollar value of invoices purchased by Triumph Business Capital for the quarter ended December 31, 2019 was $1.490 billion with an average invoice size of $1,662. The transportation average invoice size for the quarter was $1,507.
For the quarter ended December 31, 2019, TriumphPay processed 442,428 invoices paying 41,222 distinct carriers a total of $474.9 million.
During the quarter ended December 31, 2019, we completed a $39.5 million subordinated debt offering.
During the quarter ended December 31, 2019, we repurchased 392,557 shares into treasury stock under our stock repurchase program at an average price of $36.69, for a total of $14.4 million. During the year ended December 31, 2019, we have repurchased 2,080,791 shares into treasury stock under our stock repurchase programs at an average price of $30.90, for a total of $64.4 million.

Balance Sheet

Total loans held for investment decreased $14.9 million, or 0.4%, during the fourth quarter to $4.195 billion at December 31, 2019. The community banking portfolio decreased $113.0 million, or 5.1%, to $2.094 billion, the commercial finance portfolio decreased $25.6 million, or 2.0%, to $1.250 billion, and the national lending portfolio increased $123.7 million, or 17.0%, to $850.4 million during the quarter.

Total deposits were $3.790 billion at December 31, 2019, an increase of $92.1 million, or 2.5%, in the fourth quarter of 2019. Non-interest-bearing deposits accounted for 21% of total deposits and non-time deposits accounted for 59% of total deposits at December 31, 2019.

Net Interest Income

We earned net interest income for the quarter ended December 31, 2019 of $66.4 million compared to $64.8 million for the quarter ended September 30, 2019.

Yields on loans for the quarter ended December 31, 2019 were down 15 bps from the prior quarter to 7.48%. The average cost of our total deposits was 1.15% for the quarter ended December 31, 2019 compared to 1.19% for the quarter ended September 30, 2019.

Asset Quality

Non-performing assets were 0.87% of total assets at December 31, 2019 compared to 0.91% of total assets at September 30, 2019. The ratio of past due to total loans decreased to 2.19% at December 31, 2019 from 2.47% at September 30, 2019. We recorded total net charge-offs of $3.2 million, or 0.08% of average loans, for the quarter ended December 31, 2019 compared to net charge-offs of $0.4 million, or 0.01% of average loans, for the quarter ended September 30, 2019.

We recorded a provision for loan losses of $0.4 million for the quarter ended December 31, 2019 compared to a provision of $2.9 million for the quarter ended September 30, 2019. From September 30, 2019 to December 31, 2019, our ALLL decreased from $31.9 million or 0.76% of total loans to $29.1 million or 0.69% of total loans.

Non-Interest Income and Expense

We earned non-interest income for the quarter ended December 31, 2019 of $8.7 million compared to $7.7 million for the quarter ended September 30, 2019.

For the quarter ended December 31, 2019, non-interest expense totaled $52.7 million, compared to $52.2 million for the quarter ended September 30, 2019.

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 5:00 p.m. Central Time on Tuesday, January 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/tbk200121.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; 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 our operations. Footnotes in this table can be found in our definitions of non-GAAP financial measures at the end of this document.



As of and for the Three Months Ended


As of and for the Years Ended



December 31,


September 30,


June 30,


March 31,


December 31,


December 31,


December 31,

(Dollars in thousands)

2019


2019


2019


2019


2018


2019


2018

Financial Highlights:




























Total assets

$
5,060,297


$
5,039,697


$
4,783,189


$
4,529,783


$
4,559,779


$
5,060,297


$
4,559,779

Loans held for investment

$
4,194,512


$
4,209,417


$
3,835,903


$
3,612,869


$
3,608,644


$
4,194,512


$
3,608,644

Deposits

$
3,789,906


$
3,697,833


$
3,658,978


$
3,314,440


$
3,450,349


$
3,789,906


$
3,450,349

Net income available to common stockholders

$
16,709


$
14,317


$
12,730


$
14,788


$
18,085


$
58,544


$
51,130






























Performance Ratios - Annualized:




























Return on average assets


1.31
%


1.17
%


1.09
%


1.33
%


1.60
%


1.23
%


1.33
%
Return on average total equity


10.24
%


8.79
%


7.83
%


9.30
%


11.35
%


9.04
%


9.24
%
Return on average common equity


10.24
%


8.79
%


7.83
%


9.30
%


11.40
%


9.04
%


9.27
%
Return on average tangible common equity ⁽¹⁾


14.54
%


12.56
%


11.19
%


13.43
%


16.73
%


12.93
%


11.90
%
Yield on loans⁽²⁾


7.48
%


7.63
%


7.95
%


7.99
%


8.14
%


7.75
%


8.07
%
Cost of interest bearing deposits


1.45
%


1.49
%


1.42
%


1.24
%


1.15
%


1.40
%


1.02
%
Cost of total deposits


1.15
%


1.19
%


1.14
%


0.99
%


0.91
%


1.12
%


0.80
%
Cost of total funds


1.35
%


1.41
%


1.40
%


1.28
%


1.14
%


1.36
%


1.09
%
Net interest margin⁽²⁾


5.72
%


5.85
%


5.99
%


6.15
%


6.34
%


5.92
%


6.35
%
Net non-interest expense to average assets


3.46
%


3.64
%


3.68
%


3.70
%


3.55
%


3.61
%


3.70
%
Adjusted net non-interest expense to average assets ⁽¹⁾


3.46
%


3.64
%


3.68
%


3.70
%


3.55
%


3.61
%


3.55
%
Efficiency ratio


70.15
%


71.93
%


71.37
%


70.54
%


65.52
%


70.99
%


66.94
%
Adjusted efficiency ratio⁽¹⁾


70.15
%


71.93
%


71.37
%


70.54
%


65.52
%


70.99
%


64.43
%





























Asset Quality:⁽³⁾




























Past due to total loans


2.19
%


2.47
%


1.90
%


2.33
%


2.41
%


2.19
%


2.41
%
Non-performing loans to total loans


0.97
%


1.00
%


0.96
%


0.95
%


1.00
%


0.97
%


1.00
%
Non-performing assets to total assets


0.87
%


0.91
%


0.86
%


0.84
%


0.84
%


0.87
%


0.84
%
ALLL to non-performing loans


71.63
%


75.58
%


79.91
%


80.70
%


76.47
%


71.63
%


76.47
%
ALLL to total loans


0.69
%


0.76
%


0.77
%


0.76
%


0.76
%


0.69
%


0.76
%
Net charge-offs to average loans


0.08
%


0.01
%


0.05
%


0.03
%


0.05
%


0.17
%


0.23
%





























Capital:




























Tier 1 capital to average assets⁽⁴⁾


10.03
%


10.37
%


10.84
%


11.32
%


11.08
%


10.03
%


11.08
%
Tier 1 capital to risk-weighted assets⁽⁴⁾


10.29
%


10.08
%


11.08
%


11.76
%


11.49
%


10.29
%


11.49
%
Common equity tier 1 capital to risk-weighted assets⁽⁴⁾


9.45
%


9.26
%


10.19
%


10.81
%


10.55
%


9.45
%


10.55
%
Total capital to risk-weighted assets⁽⁴⁾


12.75
%


11.79
%


12.88
%


13.62
%


13.35
%


12.75
%


13.35
%
Total equity to total assets


12.58
%


12.57
%


13.45
%


14.27
%


13.96
%


12.58
%


13.96
%
Tangible common stockholders' equity to tangible assets⁽¹⁾


9.16
%


9.10
%


9.78
%


10.37
%


10.03
%


9.16
%


10.03
%





























Per Share Amounts:




























Book value per share

$
25.50


$
24.99


$
24.56


$
24.19


$
23.62


$
25.50


$
23.62

Tangible book value per share⁽¹⁾

$
17.88


$
17.40


$
17.13


$
16.82


$
16.22


$
17.88


$
16.22

Basic earnings per common share

$
0.67


$
0.56


$
0.48


$
0.55


$
0.68


$
2.26


$
2.06

Diluted earnings per common share

$
0.66


$
0.56


$
0.48


$
0.55


$
0.67


$
2.25


$
2.03

Adjusted diluted earnings per common share⁽¹⁾

$
0.66


$
0.56


$
0.48


$
0.55


$
0.67


$
2.25


$
2.21

Shares outstanding end of period


24,964,961



25,357,985



26,198,308



26,709,411



26,949,936



24,964,961



26,949,936

Unaudited consolidated balance sheet as of:



December 31,


September 30,


June 30,


March 31,


December 31,

(Dollars in thousands)

2019


2019


2019


2019


2018

ASSETS




















Total cash and cash equivalents

$
197,880


$
115,043


$
209,305


$
171,950


$
234,939

Securities - available for sale


248,820



302,917



329,991



339,465



336,423

Securities - held to maturity


8,417



8,517



8,573



8,499



8,487

Equity securities


5,437



5,543



5,479



5,183



5,044

Loans held for sale


2,735



7,499



2,877



610



2,106

Loans held for investment


4,194,512



4,209,417



3,835,903



3,612,869



3,608,644

Allowance for loan and lease losses


(29,092
)


(31,895
)


(29,416
)


(27,605
)


(27,571
)
Loans, net


4,165,420



4,177,522



3,806,487



3,585,264



3,581,073

FHLB and other restricted stock


19,860



23,960



18,037



21,191



15,943

Premises and equipment, net


96,595



87,112



84,998



84,931



83,392

Other real estate owned ("OREO"), net


3,009



2,849



3,351



3,073



2,060

Goodwill and intangible assets, net


190,286



192,440



194,668



197,015



199,417

Bank-owned life insurance


40,954



40,724



40,847



40,667



40,509

Deferred tax asset, net


3,812



5,971



7,278



7,608



8,438

Other assets


77,072



69,600



71,298



64,327



41,948

Total assets

$
5,060,297


$
5,039,697


$
4,783,189


$
4,529,783


$
4,559,779

LIABILITIES




















Non-interest bearing deposits

$
809,696


$
754,233


$
684,223


$
667,597


$
724,527

Interest bearing deposits


2,980,210



2,943,600



2,974,755



2,646,843



2,725,822

Total deposits


3,789,906



3,697,833



3,658,978



3,314,440



3,450,349

Customer repurchase agreements


2,033



14,124



12,788



3,727



4,485

Federal Home Loan Bank advances


430,000



530,000



305,000



405,000



330,000

Subordinated notes


87,327



49,010



48,983



48,956



48,929

Junior subordinated debentures


39,566



39,443



39,320



39,200



39,083

Other liabilities


74,875



75,594



74,758



72,244



50,326

Total liabilities


4,423,707



4,406,004



4,139,827



3,883,567



3,923,172

EQUITY




















Common stock


272



272



271



271



271

Additional paid-in-capital


473,251



472,368



471,145



470,292



469,341

Treasury stock, at cost


(67,069
)


(52,632
)


(27,468
)


(9,881
)


(2,288
)
Retained earnings


229,030



212,321



198,004



185,274



170,486

Accumulated other comprehensive income


1,106



1,364



1,410



260



(1,203
)
Total stockholders' equity


636,590



633,693



643,362



646,216



636,607

Total liabilities and equity

$
5,060,297


$
5,039,697


$
4,783,189


$
4,529,783


$
4,559,779

Unaudited consolidated statement of income:



For the Three Months Ended


For the Years Ended



December 31,


September 30,


June 30,


March 31,


December 31,


December 31,


December 31,

(Dollars in thousands)

2019


2019


2019


2019


2018


2019


2018

Interest income:




























Loans, including fees

$
52,395


$
50,249


$
47,910


$
45,094


$
44,435


$
195,648


$
160,723

Factored receivables, including fees


25,573



25,570



25,558



24,556



28,070



101,257



92,103

Securities


2,379



2,784



2,667



2,644



2,314



10,474



6,354

FHLB and other restricted stock


165



209



146



192



154



712



507

Cash deposits


659



603



1,022



778



877



3,062



3,289

Total interest income


81,171



79,415



77,303



73,264



75,850



311,153



262,976

Interest expense:




























Deposits


10,961



11,036



10,010



8,218



7,931



40,225



23,058

Subordinated notes


1,035



840



839



839



839



3,553



3,351

Junior subordinated debentures


687



719



744



760



717



2,910



2,741

Other borrowings


2,080



2,055



2,291



2,136



1,482



8,562



6,776

Total interest expense


14,763



14,650



13,884



11,953



10,969



55,250



35,926

Net interest income


66,408



64,765



63,419



61,311



64,881



255,903



227,050

Provision for loan losses


382



2,865



3,681



1,014



1,910



7,942



16,167

Net interest income after provision for loan losses


66,026



61,900



59,738



60,297



62,971



247,961



210,883

Non-interest income:




























Service charges on deposits


1,889



1,937



1,700



1,606



1,702



7,132



5,469

Card income


1,943



2,015



2,071



1,844



1,999



7,873



6,514

Net OREO gains (losses) and valuation adjustments


50



(56
)


148



209



37



351



(514
)
Net gains (losses) on sale of securities


39



19



14



(11
)


—



61



(272
)
Fee income


1,686



1,624



1,519



1,612



1,636



6,441



5,150

Insurance commissions


1,092



1,247



961



919



846



4,219



3,492

Gain on sale of subsidiary


—



—



—



—



—



—



1,071

Other


1,967



956



1,210



1,359



574



5,492



2,060

Total non-interest income


8,666



7,742



7,623



7,538



6,794



31,569



22,970

Non-interest expense:




























Salaries and employee benefits


29,586



28,717



28,120



26,439



25,586



112,862



90,212

Occupancy, furniture and equipment


4,667



4,505



4,502



4,522



4,402



18,196



14,023

FDIC insurance and other regulatory assessments


(302
)


(2
)


303



299



184



298



1,129

Professional fees


1,904



1,969



1,550



1,865



1,837



7,288



8,939

Amortization of intangible assets


2,154



2,228



2,347



2,402



2,438



9,131



6,980

Advertising and promotion


1,347



1,379



1,796



1,604



1,036



6,126



4,974

Communications and technology


5,732



5,382



4,988



4,874



4,388



20,976



18,270

Other


7,573



7,975



7,098



6,561



7,091



29,207



22,826

Total non-interest expense


52,661



52,153



50,704



48,566



46,962



204,084



167,353

Net income before income tax


22,031



17,489



16,657



19,269



22,803



75,446



66,500

Income tax expense


5,322



3,172



3,927



4,481



4,718



16,902



14,792

Net income

$
16,709


$
14,317


$
12,730


$
14,788


$
18,085


$
58,544


$
51,708

Dividends on preferred stock


—



—



—



—



—



—



(578
)
Net income available to common stockholders

$
16,709


$
14,317


$
12,730


$
14,788


$
18,085


$
58,544


$
51,130

Earnings per share:



For the Three Months Ended


For the Years Ended



December 31,


September 30,


June 30,


March 31,


December 31,


December 31,


December 31,

(Dollars in thousands)

2019


2019


2019


2019


2018


2019


2018

Basic




























Net income to common stockholders

$
16,709


$
14,317


$
12,730


$
14,788


$
18,085


$
58,544


$
51,130

Weighted average common shares outstanding


25,089,447



25,621,054



26,396,351



26,679,724



26,666,554



25,941,395



24,791,448

Basic earnings per common share

$
0.67


$
0.56


$
0.48


$
0.55


$
0.68


$
2.26


$
2.06






























Diluted




























Net income to common stockholders

$
16,709


$
14,317


$
12,730


$
14,788


$
18,085


$
58,544


$
51,130

Dilutive effect of preferred stock


—



—



—



—



—



—



578

Net income to common stockholders - diluted

$
16,709


$
14,317


$
12,730


$
14,788


$
18,085


$
58,544


$
51,708

Weighted average common shares outstanding


25,089,447



25,621,054



26,396,351



26,679,724



26,666,554



25,941,395



24,791,448

Dilutive effects of:




























Assumed conversion of Preferred A


—



—



—



—



89,240



—



258,674

Assumed conversion of Preferred B


—



—



—



—



100,176



—



290,375

Assumed exercises of stock options


69,865



60,068



59,962



64,166



76,219



63,808



84,126

Restricted stock awards


70,483



45,631



30,110



49,795



46,457



47,242



52,851

Restricted stock units


13,264



3,045



—



—



1,303



3,441



3,039

Performance stock units - market based


11,803



4,673



—



—



—



4,119



—

Performance stock units - performance based


—



—



—



—



—



—



—

Weighted average shares outstanding - diluted


25,254,862



25,734,471



26,486,423



26,793,685



26,979,949



26,060,005



25,480,513

Diluted earnings per common share

$
0.66


$
0.56


$
0.48


$
0.55


$
0.67


$
2.25


$
2.03



























































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 Years Ended



December 31,


September 30,


June 30,


March 31,


December 31,


December 31,


December 31,



2019


2019


2019


2019


2018


2019


2018

Assumed conversion of Preferred A


—



—



—



—



—



—



—

Assumed conversion of Preferred B


—



—



—



—



—



—



—

Stock options


66,019



67,023



70,037



50,752



51,952



66,019



51,952

Restricted stock awards


—



3,209



—



13,290



14,513



—



—

Restricted stock units


—



—



58,400



58,400



—



—



—

Performance stock units - market based


55,228



55,228



70,879



58,400



59,658



55,228



59,658

Performance stock units - performance based


254,000



—



—



—



—



254,000



—

Loans held for investment summarized as of:



December 31,


September 30,


June 30,


March 31,


December 31,

(Dollars in thousands)

2019


2019


2019


2019


2018

Commercial real estate

$
1,046,961


$
1,115,559


$
1,098,279


$
1,093,882


$
992,080

Construction, land development, land


160,569



164,186



157,861



145,002



179,591

1-4 family residential properties


179,425



186,405



186,070



194,067



190,185

Farmland


154,975



161,447



144,594



156,299



170,540

Commercial


1,342,683



1,369,505



1,257,330



1,117,640



1,114,971

Factored receivables


619,986



599,651



583,131



570,663



617,791

Consumer


21,925



24,967



26,048



27,941



29,822

Mortgage warehouse


667,988



587,697



382,590



307,375



313,664

Total loans

$
4,194,512


$
4,209,417


$
3,835,903


$
3,612,869


$
3,608,644

Our total loans held for investment portfolio consists of traditional community bank loans as well as commercial finance product lines focused on businesses that require specialized financial solutions and national lending product lines that further diversify our lending operations.

Commercial finance loans are further summarized below:



December 31,


September 30,


June 30,


March 31,


December 31,

(Dollars in thousands)

2019


2019


2019


2019


2018

Commercial - Equipment

$
461,555


$
429,412


$
395,094


$
364,447


$
352,037

Commercial - Asset-based lending


168,955



247,026



208,896



174,447



214,110

Factored receivables


619,986



599,651



583,131



570,663



617,791

Commercial finance

$
1,250,496


$
1,276,089


$
1,187,121


$
1,109,557


$
1,183,938






















Commercial finance % of total loans


30
%


30
%


31
%


31
%


33
%

National lending loans are further summarized below:



December 31,


September 30,


June 30,


March 31,


December 31,

(Dollars in thousands)

2019


2019


2019


2019


2018

Mortgage warehouse

$
667,988


$
587,697


$
382,590


$
307,375


$
313,664

Commercial - Liquid credit


81,353



37,386



21,758



960



963

Commercial - Premium finance


101,015



101,562



72,898



77,389



72,302

National lending

$
850,356


$
726,645


$
477,246


$
385,724


$
386,929






















National lending % of total loans


20
%


17
%


12
%


11
%


11
%

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



December 31,


September 30,


June 30,


March 31,


December 31,

(Dollars in thousands)

2019


2019


2019


2019


2018

Average community banking

$
2,170,149


$
2,193,533


$
2,166,122


$
2,103,816


$
2,012,255

Average commercial finance


1,260,000



1,208,823



1,168,110



1,123,978



1,190,586

Average national lending


704,244



541,367



373,755



307,249



329,630

Average total loans

$
4,134,393


$
3,943,723


$
3,707,987


$
3,535,043


$
3,532,471

Community banking yield


5.89
%


5.79
%


5.88
%


5.91
%


5.82
%
Commercial finance yield


11.64
%


12.31
%


12.52
%


12.50
%


12.82
%
National lending yield


4.96
%


4.63
%


5.62
%


5.73
%


5.44
%
Total loan yield


7.48
%


7.63
%


7.95
%


7.99
%


8.14
%

Information pertaining to our factoring segment, which includes only factoring originated by our Triumph Business Capital subsidiary, summarized as of and for the quarters ended:



December 31,


September 30,


June 30,


March 31,


December 31,



2019


2019


2019


2019


2018

Factored receivable period end balance

$
573,372,000


$
562,009,000


$
544,601,000


$
534,420,000


$
588,750,000

Yield on average receivable balance


17.20
%


18.23
%


18.73
%


17.96
%


18.24
%
Rolling twelve quarter annual charge-off rate


0.39
%


0.36
%


0.40
%


0.39
%


0.37
%
Factored receivables - transportation concentration


81
%


83
%


83
%


81
%


83
%





















Interest income, including fees

$
24,813,000


$
24,869,000


$
24,762,000


$
23,803,000


$
27,578,000

Non-interest income


1,154,000



1,291,000



1,205,000



1,077,000



1,032,000

Factored receivable total revenue


25,967,000



26,160,000



25,967,000



24,880,000



28,610,000

Average net funds employed


524,546,000



494,198,000



483,203,000



490,241,000



547,996,000

Yield on average net funds employed


19.64
%


21.00
%


21.55
%


20.58
%


20.71
%





















Accounts receivable purchased

$
1,489,538,000


$
1,450,905,000


$
1,408,982,000


$
1,325,140,000


$
1,541,332,000

Number of invoices purchased


896,487



890,986



874,248



789,838



882,042

Average invoice size

$
1,662


$
1,628


$
1,612


$
1,678


$
1,747

Average invoice size - transportation

$
1,507


$
1,497


$
1,492


$
1,541


$
1,625

Average invoice size - non-transportation

$
3,891


$
3,467


$
3,047


$
3,276


$
3,209

Deposits summarized as of:



December 31,


September 30,


June 30,


March 31,


December 31,

(Dollars in thousands)

2019


2019


2019


2019


2018

Non-interest bearing demand

$
809,696


$
754,233


$
684,223


$
667,597


$
724,527

Interest bearing demand


580,323



587,123



587,164



602,088



615,704

Individual retirement accounts


104,472



108,593



111,328



112,696



115,583

Money market


497,105



424,162



440,289



372,109



443,663

Savings


363,270



356,368



362,594



372,914



369,389

Certificates of deposit


1,084,425



1,120,850



1,122,873



851,411



835,127

Brokered deposits


350,615



346,504



350,507



335,625



346,356

Total deposits

$
3,789,906


$
3,697,833


$
3,658,978


$
3,314,440


$
3,450,349

Net interest margin summarized for the three months ended:



December 31, 2019


September 30, 2019



Average






Average


Average






Average

(Dollars in thousands)

Balance


Interest


Rate


Balance


Interest


Rate

Interest earning assets:
























Interest earning cash balances

$
153,160


$
659



1.71
%

$
104,569


$
603



2.29
%
Taxable securities


254,255



2,157



3.37
%


278,878



2,495



3.55
%
Tax-exempt securities


37,680



222



2.34
%


48,685



289



2.36
%
FHLB and other restricted stock


25,599



165



2.56
%


19,698



209



4.21
%
Loans


4,134,393



77,968



7.48
%


3,943,723



75,819



7.63
%
Total interest earning assets

$
4,605,087


$
81,171



6.99
%

$
4,395,553


$
79,415



7.17
%
Non-interest earning assets:
























Other assets


445,773











444,987









Total assets

$
5,050,860










$
4,840,540









Interest bearing liabilities:
























Deposits:
























Interest bearing demand

$
588,590


$
373



0.25
%

$
585,706


$
355



0.24
%
Individual retirement accounts


106,645



435



1.62
%


110,049



454



1.64
%
Money market


490,438



1,542



1.25
%


416,526



1,406



1.34
%
Savings


359,024



119



0.13
%


359,169



117



0.13
%
Certificates of deposit


1,108,647



6,491



2.32
%


1,113,006



6,588



2.35
%
Brokered deposits


350,737



2,001



2.26
%


352,430



2,116



2.38
%
Total interest bearing deposits


3,004,081



10,961



1.45
%


2,936,886



11,036



1.49
%
Subordinated notes


63,706



1,035



6.45
%


48,994



840



6.80
%
Junior subordinated debentures


39,491



687



6.90
%


39,364



719



7.25
%
Other borrowings


438,447



2,080



1.88
%


364,950



2,055



2.23
%
Total interest bearing liabilities

$
3,545,725


$
14,763



1.65
%

$
3,390,194


$
14,650



1.71
%
Non-interest bearing liabilities and equity:
























Non-interest bearing demand deposits


791,379











735,527









Other liabilities


66,210











68,778









Total equity


647,546











646,041









Total liabilities and equity

$
5,050,860










$
4,840,540









Net interest income





$
66,408










$
64,765





Interest spread










5.34
%










5.46
%
Net interest margin










5.72
%










5.85
%

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

Metrics and non-GAAP financial reconciliation:



As of and for the Three Months Ended


As of and for the Years Ended

(Dollars in thousands,

December 31,


September 30,


June 30,


March 31,


December 31,


December 31,


December 31,

except per share amounts)

2019


2019


2019


2019


2018


2019


2018

Net income available to common stockholders

$
16,709


$
14,317


$
12,730


$
14,788


$
18,085


$
58,544


$
51,130

Gain on sale of subsidiary or division


—



—



—



—



—



—



(1,071
)
Transaction related costs


—



—



—



—



—



—



6,965

Tax effect of adjustments


—



—



—



—



—



—



(1,401
)
Adjusted net income available to common stockholders

$
16,709


$
14,317


$
12,730


$
14,788


$
18,085


$
58,544


$
55,623

Dilutive effect of convertible preferred stock


—



—



—



—



—



—



578

Adjusted net income available to common stockholders - diluted

$
16,709


$
14,317


$
12,730


$
14,788


$
18,085


$
58,544


$
56,201






























Weighted average shares outstanding - diluted


25,254,862



25,734,471



26,486,423



26,793,685



26,979,949



26,060,005



25,480,513

Adjusted effects of assumed Preferred Stock conversion


—



—



—



—



—



—



—

Adjusted weighted average shares outstanding - diluted


25,254,862



25,734,471



26,486,423



26,793,685



26,979,949



26,060,005



25,480,513

Adjusted diluted earnings per common share

$
0.66


$
0.56


$
0.48


$
0.55


$
0.67


$
2.25


$
2.21






























Average total stockholders' equity

$
647,546


$
646,041


$
652,347


$
644,960


$
632,126


$
647,726


$
559,450

Average preferred stock liquidation preference


—



—



—



—



2,624



—



7,885

Average total common stockholders' equity


647,546



646,041



652,347



644,960



629,502



647,726



551,565

Average goodwill and other intangibles


191,551



193,765



196,002



198,389



200,754



194,905



121,820

Average tangible common stockholders' equity

$
455,995


$
452,276


$
456,346


$
446,571


$
428,748


$
452,821


$
429,745






























Net income available to common stockholders

$
16,709


$
14,317


$
12,730


$
14,788


$
18,085


$
58,544


$
51,130

Average tangible common equity


455,995



452,276



456,346



446,571



428,748



452,821



429,745

Return on average tangible common equity


14.54
%


12.56
%


11.19
%


13.43
%


16.73
%


12.93
%


11.90
%





























Adjusted efficiency ratio:




























Net interest income

$
66,408


$
64,765


$
63,419


$
61,311


$
64,881


$
255,903


$
227,050

Non-interest income


8,666



7,742



7,623



7,538



6,794



31,569



22,970

Operating revenue


75,074



72,507



71,042



68,849



71,675



287,472



250,020

Gain on sale of subsidiary or division


—



—



—



—



—



—



(1,071
)
Adjusted operating revenue

$
75,074


$
72,507


$
71,042


$
68,849


$
71,675


$
287,472


$
248,949

Non-interest expenses

$
52,661


$
52,153


$
50,704


$
48,566


$
46,962


$
204,084


$
167,353

Transaction related costs


—



—



—



—



—



—



(6,965
)
Adjusted non-interest expenses

$
52,661


$
52,153


$
50,704


$
48,566


$
46,962


$
204,084


$
160,388

Adjusted efficiency ratio


70.15
%


71.93
%


71.37
%


70.54
%


65.52
%


70.99
%


64.43
%





























Adjusted net non-interest expense to average assets ratio:




























Non-interest expenses

$
52,661


$
52,153


$
50,704


$
48,566


$
46,962


$
204,084


$
167,353

Transaction related costs


—



—



—



—



—



—



(6,965
)
Adjusted non-interest expenses

$
52,661


$
52,153


$
50,704


$
48,566


$
46,962


$
204,084


$
160,388






























Total non-interest income

$
8,666


$
7,742


$
7,623


$
7,538


$
6,794


$
31,569


$
22,970

Gain on sale of subsidiary or division


—



—



—



—



—



—



(1,071
)
Adjusted non-interest income

$
8,666


$
7,742


$
7,623


$
7,538


$
6,794


$
31,569


$
21,899

Adjusted net non-interest expenses

$
43,995


$
44,411


$
43,081


$
41,028


$
40,168


$
172,515


$
138,489

Average total assets

$
5,050,860


$
4,840,540


$
4,694,647


$
4,501,760


$
4,488,918


$
4,773,652


$
3,900,728

Adjusted net non-interest expense to average assets ratio


3.46
%


3.64
%


3.68
%


3.70
%


3.55
%


3.61
%


3.55
%





























Total stockholders' equity

$
636,590


$
633,693


$
643,362


$
646,216


$
636,607


$
636,590


$
636,607

Goodwill and other intangibles


(190,286
)


(192,440
)


(194,668
)


(197,015
)


(199,417
)


(190,286
)


(199,417
)
Tangible common stockholders' equity

$
446,304


$
441,253


$
448,694


$
449,201


$
437,190


$
446,304


$
437,190

Common shares outstanding


24,964,961



25,357,985



26,198,308



26,709,411



26,949,936



24,964,961



26,949,936

Tangible book value per share

$
17.88


$
17.40


$
17.13


$
16.82


$
16.22


$
17.88


$
16.22






























Total assets at end of period

$
5,060,297


$
5,039,697


$
4,783,189


$
4,529,783


$
4,559,779


$
5,060,297


$
4,559,779

Goodwill and other intangibles


(190,286
)


(192,440
)


(194,668
)


(197,015
)


(199,417
)


(190,286
)


(199,417
)
Tangible assets at period end

$
4,870,011


$
4,847,257


$
4,588,521


$
4,332,768


$
4,360,362


$
4,870,011


$
4,360,362

Tangible common stockholders' equity ratio


9.16
%


9.10
%


9.78
%


10.37
%


10.03
%


9.16
%


10.03
%

1) Triumph uses certain non-GAAP financial measures to provide meaningful supplemental information regarding Triumph's operational performance and to enhance investors' overall understanding of such financial performance. The non-GAAP measures used by Triumph include the following:

“Adjusted diluted earnings per common share” is defined as adjusted net income available to common stockholders divided by adjusted weighted average diluted common shares outstanding. Excluded from net income available to common stockholders are material gains and expenses related to merger and acquisition-related activities, including divestitures, net of tax. In our judgment, the adjustments made to net income available to common stockholders allow management and investors to better assess our performance in relation to our core net income by removing the volatility associated with certain acquisition-related items and other discrete items that are unrelated to our core business. Weighted average diluted common shares outstanding are adjusted as a result of changes in their dilutive properties given the gain and expense adjustments described herein.
"Tangible common stockholders' equity" is defined as common stockholders' equity less goodwill and other intangible assets.
"Total tangible assets" is defined as total assets less goodwill and other intangible assets.
"Tangible book value per share" is defined as tangible common stockholders' equity divided by total common shares outstanding. This measure is important to investors interested in changes from period-to-period in book value per share exclusive of changes in intangible assets.
"Tangible common stockholders' equity ratio" is defined as the ratio of tangible common stockholders' equity divided by total tangible assets. We believe that this measure is important to many investors in the marketplace who are interested in relative changes from period-to period in common equity and total assets, each exclusive of changes in intangible assets.
"Return on Average Tangible Common Equity" is defined as net income available to common stockholders divided by average tangible common stockholders' equity.
"Adjusted efficiency ratio" is defined as non-interest expenses divided by our operating revenue, which is equal to net interest income plus non-interest income. Also excluded are material gains and expenses related to merger and acquisition-related activities, including divestitures. In our judgment, the adjustments made to operating revenue and non-interest expense allow management and investors to better assess our performance in relation to our core operating revenue by removing the volatility associated with certain acquisition-related items and other discrete items that are unrelated to our core business.
"Adjusted net non-interest expense to average total assets" is defined as non-interest expenses net of non-interest income divided by total average assets. Excluded are material gains and expenses related to merger and acquisition-related activities, including divestitures. This metric is used by our management to better assess our operating efficiency.

2) Performance ratios include discount accretion on purchased loans for the periods presented as follows:



For the Three Months Ended


For the Years Ended



December 31,


September 30,


June 30,


March 31,


December 31,


December 31,


December 31,

(Dollars in thousands)

2019


2019


2019


2019


2018


2019


2018

Loan discount accretion

$
1,555


$
1,159


$
1,297


$
1,557


$
1,411


$
5,568


$
8,296

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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