TBK - Triumph Bancorp Reports Fourth Quarter Net Income to Common Stockholders of $18.1 Million

January, 22 2019 04:07 PM Triumph Bancorp Inc.

DALLAS, Jan. 22, 2019 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (Nasdaq: TBK) (“Triumph”) today announced earnings and operating results for the fourth quarter of 2018.

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.

2018 Fourth Quarter Highlights and Recent Developments

For the fourth quarter of 2018, net income available to common stockholders was $18.1 million. Diluted earnings per share were $0.67.
Net interest margin (“NIM”) was 6.34% for the quarter ended December 31, 2018.
Total loans held for investment increased $96.5 million, or 2.7%, to $3.609 billion at December 31, 2018. Average loans for the quarter increased $238.8 million, or 7.2%, to $3.532 billion.
Triumph Business Capital grew period-end clients to 6,191 clients which is an increase of 259 clients, or 4.4%. The total dollar value of invoices purchased for the quarter ended December 31, 2018 was $1.541 billion with an average invoice price of $1,747.
At December 31, 2018, there were 113 clients utilizing the TriumphPay platform. For the quarter ended December 31, 2018, TriumphPay processed 83,326 invoices paying 19,274 distinct carriers a total of $123.1 million.

Balance Sheet

Total loans held for investment were $3.609 billion at December 31, 2018. Our commercial finance loans, which comprise 35% of the loan portfolio, were $1.256 billion at December 31, 2018, compared to $1.284 billion at September 30, 2018, a decrease of $27.3 million, or 2.1% in the fourth quarter of 2018. The decrease in commercial finance was primarily a result of our efforts to decrease the overall risk profile of our asset based lending portfolio.

Total deposits were $3.450 billion at December 31, 2018, an increase of $11.3 million or 0.3% in the fourth quarter of 2018. Non-interest-bearing deposits accounted for 21% of total deposits and non-time deposits accounted for 62% of total deposits at December 31, 2018.

On October 26, 2018, our preferred shareholders converted all remaining preferred stock to 670,236 shares of common stock.

Net Interest Income

We earned net interest income for the quarter ended December 31, 2018 of $64.9 million compared to $61.8 million for the quarter ended September 30, 2018.

Yields on loans for the quarter ended December 31, 2018 were down 19 bps from the prior quarter to 8.14%. The average cost of our total deposits was 0.91% for the quarter ended December 31, 2018 compared to 0.85% for the quarter ended September 30, 2018, on an annualized basis.

Asset Quality

Non-performing assets decreased 9 bps from September 30, 2018 to 0.84% of total assets at December 31, 2018. The ratio of past due to total loans increased to 2.41% at December 31, 2018 from 2.23% at September 30, 2018. We recorded total net charge-offs of $1.6 million, or 0.05% of average loans, for the quarter ended December 31, 2018 compared to net charge-offs of $4.1 million, or 0.12% of average loans, for the quarter ended September 30, 2018.

We recorded a provision for loan losses of $1.9 million for the quarter ended December 31, 2018 compared to a provision of $6.8 million for the quarter ended September 30, 2018. From September 30, 2018 to December 31, 2018, our ALLL increased from $27.3 million or 0.78% of total loans to $27.6 million or 0.76% of total loans.

Non-Interest Income and Expense

We earned non-interest income for the quarter ended December 31, 2018 of $6.8 million compared to $6.1 million for the quarter ended September 30, 2018.

For the quarter ended December 31, 2018, non-interest expense totaled $47.0 million, compared to $48.9 million for the quarter ended September 30, 2018. Non-interest expense for the quarter ended September 30, 2018 included transaction costs related to the First Bancorp of Durango, Inc. and Southern Colorado Corp. acquisitions of $5.9 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 Wednesday, January 23, 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/tbk190123.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., the operating assets of Interstate Capital Corporation and certain of its affiliates, Valley Bancorp, Inc., and nine branches from Independent Bank in Colorado) 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 13, 2018.

Non-GAAP Financial Measures

This press release includes certain nonâ€GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of nonâ€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


As of and for the Years Ended

(Dollars in

December 31,


September 30,


June 30,


March 31,


December 31,


December 31,


December 31,

thousands)

2018


2018


2018


2018


2017


2018


2017

Financial Highlights:




























Total assets

$
4,559,779


$
4,537,102


$
3,794,631


$
3,405,010


$
3,499,033


$
4,559,779


$
3,499,033

Loans held for investment

$
3,608,644


$
3,512,143


$
3,196,462


$
2,873,985


$
2,810,856


$
3,608,644


$
2,810,856

Deposits

$
3,450,349


$
3,439,049


$
2,624,942


$
2,533,498


$
2,621,348


$
3,450,349


$
2,621,348

Net income available to common stockholders

$
18,085


$
8,975


$
12,192


$
11,878


$
6,111


$
51,130


$
35,446






























Performance Ratios - Annualized:




























Return on average assets


1.60
%


0.90
%


1.37
%


1.43
%


0.79
%


1.33
%


1.27
%
Return on average total equity


11.35
%


5.88
%


8.53
%


12.20
%


6.35
%


9.24
%


10.66
%
Return on average common equity


11.40
%


5.85
%


8.54
%


12.30
%


6.30
%


9.27
%


10.73
%
Return on average tangible common equity ⁽¹⁾


16.73
%


7.57
%


9.95
%


14.75
%


7.33
%


11.90
%


12.50
%
Yield on loans⁽²⁾


8.14
%


8.33
%


8.09
%


7.65
%


7.73
%


8.07
%


7.55
%
Cost of interest bearing deposits


1.15
%


1.08
%


0.93
%


0.86
%


0.84
%


1.02
%


0.78
%
Cost of total deposits


0.91
%


0.85
%


0.73
%


0.68
%


0.67
%


0.80
%


0.62
%
Cost of total funds


1.14
%


1.16
%


1.06
%


0.95
%


0.92
%


1.09
%


0.86
%
Net interest margin⁽²⁾


6.34
%


6.59
%


6.36
%


6.06
%


6.16
%


6.35
%


5.92
%
Net non-interest expense to average assets


3.55
%


4.19
%


3.59
%


3.43
%


3.65
%


3.70
%


2.92
%
Adjusted net non-interest expense to average assets ⁽¹⁾


3.55
%


3.62
%


3.47
%


3.56
%


3.43
%


3.55
%


3.41
%
Efficiency ratio


65.52
%


72.15
%


64.26
%


65.09
%


66.74
%


66.94
%


62.96
%
Adjusted efficiency ratio⁽¹⁾


65.52
%


63.49
%


62.38
%


66.45
%


63.35
%


64.43
%


66.55
%





























Asset Quality:⁽³⁾




























Past due to total loans


2.41
%


2.23
%


2.54
%


2.41
%


2.33
%


2.41
%


2.33
%
Non-performing loans to total loans


1.00
%


1.13
%


1.43
%


1.41
%


1.38
%


1.00
%


1.38
%
Non-performing assets to total assets


0.84
%


0.93
%


1.28
%


1.47
%


1.39
%


0.84
%


1.39
%
ALLL to non-performing loans


76.47
%


68.82
%


53.57
%


49.52
%


48.41
%


76.47
%


48.41
%
ALLL to total loans


0.76
%


0.78
%


0.77
%


0.70
%


0.67
%


0.76
%


0.67
%
Net charge-offs to average loans


0.05
%


0.12
%


0.01
%


0.05
%


0.06
%


0.23
%


0.28
%





























Capital:




























Tier 1 capital to average assets⁽⁴⁾


11.08
%


11.75
%


15.00
%


11.23
%


11.80
%


11.08
%


11.80
%
Tier 1 capital to risk-weighted assets⁽⁴⁾


11.53
%


11.16
%


14.68
%


11.54
%


11.15
%


11.53
%


11.15
%
Common equity tier 1 capital to risk-weighted assets⁽⁴⁾


10.58
%


9.96
%


13.32
%


10.05
%


9.70
%


10.58
%


9.70
%
Total capital to risk-weighted assets⁽⁴⁾


13.40
%


13.05
%


16.73
%


13.66
%


13.21
%


13.40
%


13.21
%
Total equity to total assets


13.96
%


13.59
%


16.00
%


11.83
%


11.19
%


13.96
%


11.19
%
Tangible common stockholders' equity to tangible assets⁽¹⁾


10.03
%


9.35
%


13.05
%


9.86
%


9.26
%


10.03
%


9.26
%





























Per Share Amounts:




























Book value per share

$
23.62


$
23.10


$
22.76


$
18.89


$
18.35


$
23.62


$
18.35

Tangible book value per share⁽¹⁾

$
16.22


$
15.42


$
18.27


$
15.82


$
15.29


$
16.22


$
15.29

Basic earnings per common share

$
0.68


$
0.34


$
0.48


$
0.57


$
0.29


$
2.06


$
1.85

Diluted earnings per common share

$
0.67


$
0.34


$
0.47


$
0.56


$
0.29


$
2.03


$
1.81

Adjusted diluted earnings per common share⁽¹⁾

$
0.67


$
0.51


$
0.50


$
0.52


$
0.34


$
2.21


$
1.37

Shares outstanding end of period


26,949,936



26,279,761



26,260,785



20,824,509



20,820,445



26,949,936



20,820,445

Unaudited consolidated balance sheet as of:



December 31,


September 30,


June 30,


March 31,


December 31,

(Dollars in thousands)

2018


2018


2018


2018


2017

ASSETS




















Total cash and cash equivalents

$
234,939


$
282,409


$
133,365


$
106,046


$
134,129

Securities - available for sale


336,423



355,981



183,184



192,916



250,603

Securities - held to maturity


8,487



8,403



8,673



8,614



8,557

Equity securities


5,044



4,981



5,025



4,925



5,006

Loans held for sale


2,106



683



–



–



–

Loans held for investment


3,608,644



3,512,143



3,196,462



2,873,985



2,810,856

Allowance for loan and lease losses


(27,571
)


(27,256
)


(24,547
)


(20,022
)


(18,748
)
Loans, net


3,581,073



3,484,887



3,171,915



2,853,963



2,792,108

Assets held for sale


–



–



–



–



71,362

FHLB stock


15,943



23,109



19,223



16,508



16,006

Premises and equipment, net


83,392



82,935



68,313



62,826



62,861

Other real estate owned ("OREO"), net


2,060



2,442



2,528



9,186



9,191

Goodwill and intangible assets, net


199,417



201,842



117,777



63,923



63,778

Bank-owned life insurance


40,509



40,339



40,168



44,534



44,364

Deferred tax asset, net


8,438



8,137



8,810



8,849



8,959

Other assets


41,948



40,954



35,650



32,720



32,109

Total assets

$
4,559,779


$
4,537,102


$
3,794,631


$
3,405,010


$
3,499,033

LIABILITIES




















Non-interest bearing deposits

$
724,527


$
697,903


$
561,033


$
548,991


$
564,225

Interest bearing deposits


2,725,822



2,741,146



2,063,909



1,984,507



2,057,123

Total deposits


3,450,349



3,439,049



2,624,942



2,533,498



2,621,348

Customer repurchase agreements


4,485



13,248



10,509



6,751



11,488

Federal Home Loan Bank advances


330,000



330,000



420,000



355,000



365,000

Subordinated notes


48,929



48,903



48,878



48,853



48,828

Junior subordinated debentures


39,083



38,966



38,849



38,734



38,623

Other liabilities


50,326



50,295



44,228



19,230



22,048

Total liabilities


3,923,172



3,920,461



3,187,406



3,002,066



3,107,335

EQUITY




















Preferred stock series A


–



4,550



4,550



4,550



4,550

Preferred stock series B


–



5,108



5,108



5,108



5,108

Common stock


271



264



264



209



209

Additional paid-in-capital


469,341



458,920



457,980



265,406



264,855

Treasury stock, at cost


(2,288
)


(2,285
)


(2,254
)


(1,853
)


(1,784
)
Retained earnings


170,486



152,401



143,426



131,234



119,356

Accumulated other comprehensive income


(1,203
)


(2,317
)


(1,849
)


(1,710
)


(596
)
Total equity


636,607



616,641



607,225



402,944



391,698

Total liabilities and equity

$
4,559,779


$
4,537,102


$
3,794,631


$
3,405,010


$
3,499,033

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)

2018


2018


2018


2018


2017


2018


2017

Interest income:




























Loans, including fees

$
44,435


$
41,257


$
38,148


$
36,883


$
34,856


$
160,723


$
121,567

Factored receivables, including fees


28,070



27,939



20,791



15,303



15,000



92,103



47,177

Securities


2,314



1,551



1,179



1,310



1,819



6,354



6,823

FHLB stock


154



147



101



105



78



507



207

Cash deposits


877



865



1,030



517



464



3,289



1,450

Total interest income


75,850



71,759



61,249



54,118



52,217



262,976



177,224

Interest expense:




























Deposits


7,931



6,219



4,631



4,277



3,884



23,058



13,082

Subordinated notes


839



837



838



837



836



3,351



3,344

Junior subordinated debentures


717



714



713



597



520



2,741



1,955

Other borrowings


1,482



2,207



1,810



1,277



1,181



6,776



3,159

Total interest expense


10,969



9,977



7,992



6,988



6,421



35,926



21,540

Net interest income


64,881



61,782



53,257



47,130



45,796



227,050



155,684

Provision for loan losses


1,910



6,803



4,906



2,548



1,931



16,167



11,628

Net interest income after provision for loan losses


62,971



54,979



48,351



44,582



43,865



210,883



144,056

Non-interest income:




























Service charges on deposits


1,702



1,412



1,210



1,145



1,178



5,469



4,181

Card income


1,999



1,877



1,394



1,244



1,122



6,514



3,822

Net OREO gains (losses) and valuation adjustments


37



65



(528
)


(88
)


(764
)


(514
)


(850
)
Net gains (losses) on sale of securities


–



–



–



(272
)


–



(272
)


35

Fee income


1,636



1,593



1,121



800



658



5,150



2,503

Insurance commissions


846



1,113



819



714



857



3,492



2,981

Asset management fees


–



–



–



–



–



–



1,717

Gain on sale of subsidiary


–



–



–



1,071



–



1,071



20,860

Other


574



(1
)


929



558



947



2,060



5,407

Total non-interest income


6,794



6,059



4,945



5,172



3,998



22,970



40,656

Non-interest expense:




























Salaries and employee benefits


25,586



24,695



20,527



19,404



18,009



90,212



72,696

Occupancy, furniture and equipment


4,402



3,553



3,014



3,054



2,728



14,023



9,833

FDIC insurance and other regulatory assessments


184



363



383



199



411



1,129



1,201

Professional fees


1,837



3,384



2,078



1,640



2,521



8,939



7,192

Amortization of intangible assets


2,438



2,064



1,361



1,117



2,309



6,980



5,201

Advertising and promotion


1,036



1,609



1,300



1,029



573



4,974



3,226

Communications and technology


4,388



7,252



3,271



3,359



2,291



18,270



8,843

Other


7,091



6,026



5,469



4,240



4,389



22,826



15,422

Total non-interest expense


46,962



48,946



37,403



34,042



33,231



167,353



123,614

Net income before income tax


22,803



12,092



15,893



15,712



14,632



66,500



61,098

Income tax expense


4,718



2,922



3,508



3,644



8,327



14,792



24,878

Net income

$
18,085


$
9,170


$
12,385


$
12,068


$
6,305


$
51,708


$
36,220

Dividends on preferred stock


–



(195
)


(193
)


(190
)


(194
)


(578
)


(774
)
Net income available to common stockholders

$
18,085


$
8,975


$
12,192


$
11,878


$
6,111


$
51,130


$
35,446

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)

2018


2018


2018


2018


2017


2018


2017

Basic




























Net income to common stockholders

$
18,085


$
8,975


$
12,192


$
11,878


$
6,111


$
51,130


$
35,446

Weighted average common shares outstanding


26,666,554



26,178,194



25,519,108



20,721,363



20,717,548



24,791,448



19,133,745

Basic earnings per common share

$
0.68


$
0.34


$
0.48


$
0.57


$
0.29


$
2.06


$
1.85






























Diluted




























Net income to common stockholders

$
18,085


$
8,975


$
12,192


$
11,878


$
6,111


$
51,130


$
35,446

Dilutive effect of preferred stock


–



195



193



190



194



578



774

Net income to common stockholders - diluted

$
18,085


$
9,170


$
12,385


$
12,068


$
6,305


$
51,708


$
36,220

Weighted average common shares outstanding


26,666,554



26,178,194



25,519,108



20,721,363



20,717,548



24,791,448



19,133,745

Dilutive effects of:




























Assumed conversion of Preferred A


89,240



315,773



315,773



315,773



315,773



258,674



315,773

Assumed conversion of Preferred B


100,176



354,471



354,471



354,471



354,471



290,375



354,471

Assumed exercises of stock warrants


–



–



–



–



–



–



82,567

Assumed exercises of stock options


76,219



90,320



86,821



83,872



56,359



84,126



45,653

Restricted stock awards


46,457



45,796



37,417



85,045



74,318



52,851



68,079

Restricted stock units


1,303



7,276



2,288



–



–



3,039



–

Performance stock units


–



–



–



–



–



–



–

Weighted average shares outstanding - diluted


26,979,949



26,991,830



26,315,878



21,560,524



21,518,469



25,480,513



20,000,288

Diluted earnings per common share

$
0.67


$
0.34


$
0.47


$
0.56


$
0.29


$
2.03


$
1.81



























































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,



2018


2018


2018


2018


2017


2018


2017

Assumed conversion of Preferred A


–



–



–



–



–



–



–

Assumed conversion of Preferred B


–



–



–



–



–



–



–

Stock options


51,952



51,952



51,952



–



57,926



51,952



57,926

Restricted stock awards


14,513



14,513



–



–



–



–



–

Restricted stock units


–



–



–



–



–



–



–

Performance stock units


59,658



59,658



59,658



–



–



59,658



–

Loans held for investment summarized as of:



December 31,


September 30,


June 30,


March 31,


December 31,

(Dollars in thousands)

2018


2018


2018


2018


2017

Commercial real estate

$
992,080


$
906,494


$
766,839


$
781,006


$
745,893

Construction, land development, land


179,591



190,920



147,852



143,876



134,812

1-4 family residential properties


190,185



194,752



122,653



122,979



125,827

Farmland


170,540



177,313



177,060



184,064



180,141

Commercial


1,114,971



1,123,598



1,006,443



930,283



920,812

Factored receivables


617,791



611,285



603,812



397,145



374,410

Consumer


29,822



31,423



28,775



29,244



31,131

Mortgage warehouse


313,664



276,358



343,028



285,388



297,830

Total loans

$
3,608,644


$
3,512,143


$
3,196,462


$
2,873,985


$
2,810,856

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:



December 31,


September 30,


June 30,


March 31,


December 31,

(Dollars in thousands)

2018


2018


2018


2018


2017

Equipment

$
352,037


$
323,832


$
290,314


$
260,502


$
254,119

Asset based lending (General)


214,110



273,096



261,412



230,314



213,471

Premium finance


72,302



75,293



51,416



48,561



55,520

Factored receivables


617,791



611,285



603,812



397,145



374,410

Commercial finance

$
1,256,240


$
1,283,506


$
1,206,954


$
936,522


$
897,520






















Commercial finance % of total loans


35
%


37
%


38
%


33
%


32
%

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



December 31,


September 30,


June 30,


March 31,


December 31,

(Dollars in thousands)

2018


2018


2018


2018


2017

Average community banking

$
2,268,262


$
2,039,624


$
1,897,678


$
1,816,921


$
1,637,195

Average commercial finance⁽¹⁾


1,264,209



1,254,095



1,024,369



949,938



921,579

Average total loans

$
3,532,471


$
3,293,719


$
2,922,047


$
2,766,859


$
2,558,774

Community banking yield


5.78
%


5.68
%


5.80
%


5.81
%


5.87
%
Commercial finance yield⁽¹⁾


12.39
%


12.66
%


12.08
%


11.17
%


11.03
%
Total loan yield


8.14
%


8.33
%


8.09
%


7.65
%


7.73
%

⁽¹⁾ Includes assets held for sale for the periods ended March 31, 2018 and December 31, 2017

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,



2018


2018


2018


2018


2017

Factored receivable period end balance

$
588,750,000


$
579,985,000


$
577,548,000


$
372,771,000


$
346,293,000

Yield on average receivable balance


18.24
%


18.96
%


18.70
%


17.40
%


16.91
%
Rolling twelve quarter annual charge-off rate


0.37
%


0.38
%


0.41
%


0.50
%


0.41
%
Factored receivables - transportation concentration


83
%


83
%


84
%


86
%


84
%





















Interest income, including fees

$
27,578,000


$
27,420,000


$
20,314,000


$
14,780,000


$
14,518,000

Non-interest income


1,032,000



942,000



920,000



590,000



535,000

Factored receivable total revenue


28,610,000



28,362,000



21,234,000



15,370,000



15,053,000

Average net funds employed


547,996,000



525,499,000



398,096,000



316,488,000



309,614,000

Yield on average net funds employed


20.71
%


21.41
%


21.39
%


19.70
%


19.29
%





















Accounts receivable purchased

$
1,541,332,000


$
1,503,049,000


$
1,162,810,000


$
912,336,000


$
872,373,000

Number of invoices purchased


882,042



836,771



656,429



521,906



511,879

Average invoice size

$
1,747


$
1,796


$
1,771


$
1,751


$
1,705

Average invoice size - transportation

$
1,625


$
1,666


$
1,695


$
1,662


$
1,647

Average invoice size - non-transportation

$
3,209


$
3,267


$
2,522


$
2,627


$
2,251






















Net new clients


259



422



2,072



280



233

Period end clients


6,191



5,932



5,510



3,438



3,158

Deposits summarized as of:



December 31,


September 30,


June 30,


March 31,


December 31,

(Dollars in thousands)

2018


2018


2018


2018


2017

Non-interest bearing demand

$
724,527


$
697,903


$
561,033


$
548,991


$
564,225

Interest bearing demand


615,704



608,775



358,246



392,947



403,244

Individual retirement accounts


115,583



118,459



101,380



105,558



108,505

Money market


443,663



413,402



268,699



283,354



283,969

Savings


369,389



373,062



239,127



244,103



235,296

Certificates of deposit


835,127



854,048



751,290



783,651



837,384

Brokered deposits


346,356



373,400



345,167



174,894



188,725

Total deposits

$
3,450,349


$
3,439,049


$
2,624,942


$
2,533,498


$
2,621,348

Net interest margin summarized for the three months ended:



December 31, 2018


September 30, 2018



Average






Average


Average






Average

(Dollars in thousands)

Balance


Interest


Rate


Balance


Interest


Rate

Interest earning assets:
























Interest earning cash balances

$
152,212


$
877



2.29
%

$
156,876


$
865



2.19
%
Taxable securities


235,234



1,674



2.82
%


183,238



1,207



2.61
%
Tax-exempt securities


123,575



640



2.05
%


66,208



344



2.06
%
FHLB stock


16,426



154



3.72
%


20,984



147



2.78
%
Loans


3,532,471



72,505



8.14
%


3,293,719



69,196



8.33
%
Total interest earning assets

$
4,059,918


$
75,850



7.41
%

$
3,721,025


$
71,759



7.65
%
Non-interest earning assets:
























Other assets


429,000











339,535









Total assets

$
4,488,918










$
4,060,560









Interest bearing liabilities:
























Deposits:
























Interest bearing demand

$
613,872


$
417



0.27
%

$
418,226


$
200



0.19
%
Individual retirement accounts


116,575



385



1.31
%


105,774



339



1.27
%
Money market


430,864



1,312



1.21
%


303,843



594



0.78
%
Savings


373,650



159



0.17
%


272,230



60



0.09
%
Certificates of deposit


862,500



3,749



1.72
%


793,685



3,068



1.53
%
Brokered deposits


347,498



1,909



2.18
%


384,337



1,958



2.02
%
Total deposits


2,744,959



7,931



1.15
%


2,278,095



6,219



1.08
%
Subordinated notes


48,914



839



6.81
%


48,890



837



6.79
%
Junior subordinated debentures


39,011



717



7.29
%


38,905



714



7.28
%
Other borrowings


262,391



1,482



2.24
%


425,781



2,207



2.06
%
Total interest bearing liabilities

$
3,095,275


$
10,969



1.41
%

$
2,791,671


$
9,977



1.42
%
Non-interest bearing liabilities and equity:
























Non-interest bearing demand deposits


714,884











608,245









Other liabilities


46,633











41,961









Total equity


632,126











618,683









Total liabilities and equity

$
4,488,918










$
4,060,560









Net interest income





$
64,881










$
61,782





Interest spread










6.00
%










6.23
%
Net interest margin










6.34
%










6.59
%

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)

2018


2018


2018


2018


2017


2018


2017

Net income available to common stockholders

$
18,085


$
8,975


$
12,192


$
11,878


$
6,111


$
51,130


$
35,446

Gain on sale of subsidiary


–



–



–



(1,071
)


–



(1,071
)


(20,860
)
Incremental bonus related to transaction


–



–



–



–



–



–



4,814

Transaction related costs


–



5,871



1,094



–



1,688



6,965



2,013

Tax effect of adjustments


–



(1,392
)


(257
)


248



(601
)


(1,401
)


5,153

Adjusted net income available to common stockholders

$
18,085


$
13,454


$
13,029


$
11,055


$
7,198


$
55,623


$
26,566

Dilutive effect of convertible preferred stock


–



195



193



190



194



578



774

Adjusted net income available to common stockholders - diluted

$
18,085


$
13,649


$
13,222


$
11,245


$
7,392


$
56,201


$
27,340






























Weighted average shares outstanding - diluted


26,979,949



26,991,830



26,315,878



21,560,524



21,518,469



25,480,513



20,000,288

Adjusted effects of assumed Preferred Stock conversion


–



–



–



–



–



–



–

Adjusted weighted average shares outstanding - diluted


26,979,949



26,991,830



26,315,878



21,560,524



21,518,469



25,480,513



20,000,288

Adjusted diluted earnings per common share

$
0.67


$
0.51


$
0.50


$
0.52


$
0.34


$
2.21


$
1.37






























Net income available to common stockholders

$
18,085


$
8,975


$
12,192


$
11,878


$
6,111


$
51,130


$
35,446

Average tangible common equity


428,748



470,553



491,492



326,614



330,819



429,745



283,561

Return on average tangible common equity


16.73
%


7.57
%


9.95
%


14.75
%


7.33
%


11.90
%


12.50
%





























Adjusted efficiency ratio:




























Net interest income

$
64,881


$
61,782


$
53,257


$
47,130


$
45,796


$
227,050


$
155,684

Non-interest income


6,794



6,059



4,945



5,172



3,998



22,970



40,656

Operating revenue


71,675



67,841



58,202



52,302



49,794



250,020



196,340

Gain on sale of subsidiary


–



–



–



(1,071
)


–



(1,071
)


(20,860
)
Adjusted operating revenue

$
71,675


$
67,841


$
58,202


$
51,231


$
49,794


$
248,949


$
175,480

Non-interest expenses

$
46,962


$
48,946


$
37,403


$
34,042


$
33,231


$
167,353


$
123,614

Incremental bonus related to transaction


–



–



–



–



–



–



(4,814
)
Transaction related costs


–



(5,871
)


(1,094
)


–



(1,688
)


(6,965
)


(2,013
)
Adjusted non-interest expenses

$
46,962


$
43,075


$
36,309


$
34,042


$
31,543


$
160,388


$
116,787

Adjusted efficiency ratio


65.52
%


63.49
%


62.38
%


66.45
%


63.35
%


64.43
%


66.55
%





























Adjusted net non-interest expense to average assets ratio:




























Non-interest expenses

$
46,962


$
48,946


$
37,403


$
34,042


$
33,231


$
167,353


$
123,614

Incremental bonus related to transaction


–



–



–



–



–



–



(4,814
)
Transaction related costs


–



(5,871
)


(1,094
)


–



(1,688
)


(6,965
)


(2,013
)
Adjusted non-interest expenses

$
46,962


$
43,075


$
36,309


$
34,042


$
31,543


$
160,388


$
116,787






























Total non-interest income

$
6,794


$
6,059


$
4,945


$
5,172


$
3,998


$
22,970


$
40,656

Gain on sale of subsidiary


–



–



–



(1,071
)


–



(1,071
)


(20,860
)
Adjusted non-interest income

$
6,794


$
6,059


$
4,945


$
4,101


$
3,998


$
21,899


$
19,796

Adjusted net non-interest expenses

$
40,168


$
37,016


$
31,364


$
29,941


$
27,545


$
138,489


$
96,991

Average total assets

$
4,488,918


$
4,060,560


$
3,628,960


$
3,410,883


$
3,181,697


$
3,900,728


$
2,844,916

Adjusted net non-interest expense to average assets ratio


3.55
%


3.62
%


3.47
%


3.56
%


3.43
%


3.55
%


3.41
%





























Total stockholders' equity

$
636,607


$
616,641


$
607,225


$
402,944


$
391,698


$
636,607


$
391,698

Preferred stock liquidation preference


–



(9,658
)


(9,658
)


(9,658
)


(9,658
)


–



(9,658
)
Total common stockholders' equity


636,607



606,983



597,567



393,286



382,040



636,607



382,040

Goodwill and other intangibles


(199,417
)


(201,842
)


(117,777
)


(63,923
)


(63,778
)


(199,417
)


(63,778
)
Tangible common stockholders' equity

$
437,190


$
405,141


$
479,790


$
329,363


$
318,262


$
437,190


$
318,262

Common shares outstanding


26,949,936



26,279,761



26,260,785



20,824,509



20,820,445



26,949,936



20,820,445

Tangible book value per share

$
16.22


$
15.42


$
18.27


$
15.82


$
15.29


$
16.22


$
15.29






























Total assets at end of period

$
4,559,779


$
4,537,102


$
3,794,631


$
3,405,010


$
3,499,033


$
4,559,779


$
3,499,033

Goodwill and other intangibles


(199,417
)


(201,842
)


(117,777
)


(63,923
)


(63,778
)


(199,417
)


(63,778
)
Adjusted total assets at period end

$
4,360,362


$
4,335,260


$
3,676,854


$
3,341,087


$
3,435,255


$
4,360,362


$
3,435,255

Tangible common stockholders' equity ratio


10.03
%


9.35
%


13.05
%


9.86
%


9.26
%


10.03
%


9.26
%

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.
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)

2018


2018


2018


2018


2017


2018


2017


Loan discount accretion

$
1,411


$
1,271


$
3,637


$
1,977


$
1,697


$
8,296


$
7,071

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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