TBK - Triumph Bancorp Reports Third Quarter Net Income to Common Stockholders of $14.3 Million

October, 16 2019 04:07 PM Triumph Bancorp Inc.

DALLAS, Oct. 16, 2019 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (Nasdaq: TBK) (“Triumph” or the “Company”) today announced earnings and operating results for the third 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 Third Quarter Highlights and Recent Developments

For the third quarter of 2019, net income available to common stockholders was $14.3 million. Diluted earnings per share were $0.56.
Net interest margin (“NIM”) was 5.85% for the quarter ended September 30, 2019.
Total loans held for investment increased $373.5 million, or 9.7%, to $4.209 billion at September 30, 2019. Average loans for the quarter increased $235.7 million, or 6.4%, to $3.944 billion.
Triumph Business Capital grew period-end clients to 6,471 clients, which is an increase of 16 clients, or 0.2%. The total dollar value of invoices purchased for the quarter ended September 30, 2019 was $1.451 billion with an average invoice price of $1,628.
At September 30, 2019, there were 163 clients utilizing the TriumphPay platform, which is an increase of 17 clients, or 11.6%, during the quarter. For the quarter ended September 30, 2019, TriumphPay processed 168,562 invoices paying 30,333 distinct carriers a total of $190.3 million.
During the quarter ended September 30, 2019, we repurchased 850,093 shares into treasury stock under our stock repurchase program at an average price of $29.38, for a total of $25.0 million. During the nine months ended September 30, 2019, we have repurchased 1,688,234 shares into treasury stock under our stock repurchase programs at an average price of $29.56, for a total of $49.9 million, effectively completing both of our previously announced $25.0 million stock repurchase programs.

Repurchase Program Authorization

On October 16, 2019 our board of directors authorized us to repurchase up to an additional $50.0 million of our outstanding common stock. We may repurchase these shares from time to time in open market transactions or through privately negotiated transactions at our discretion. The amount, timing and nature of any share repurchases will be based on a variety of factors, including the trading price of our common stock, applicable securities laws restrictions, regulatory limitations and market and economic factors. This repurchase program is authorized for a period of up to one year and does not require us to repurchase any specific number of shares. The repurchase program may be modified, suspended or discontinued at any time, at our discretion.

Balance Sheet

Total loans held for investment increased $373.5 million, or 9.7%, during the third quarter to $4.209 billion at September 30, 2019. The commercial finance portfolio increased $89.0 million, or 7.5%, to $1.276 billion, the national lending portfolio increased $249.4 million, or 52.3%, to $726.6 million, and the community banking portfolio increased $35.1 million, or 1.6%, to $2.207 billion during the quarter.

Total deposits were $3.698 billion at September 30, 2019, an increase of $38.9 million, or 1.1%, in the third quarter of 2019. Non-interest-bearing deposits accounted for 20% of total deposits and non-time deposits accounted for 57% of total deposits at September 30, 2019.

Net Interest Income

We earned net interest income for the quarter ended September 30, 2019 of $64.8 million compared to $63.4 million for the quarter ended June 30, 2019.

Yields on loans for the quarter ended September 30, 2019 were down 32 bps from the prior quarter to 7.63%. The average cost of our total deposits was 1.19% for the quarter ended September 30, 2019 compared to 1.14% for the quarter ended June 30, 2019.

Asset Quality

Non-performing assets were 0.91% of total assets at September 30, 2019 compared to 0.86% of total assets at June 30, 2019. The ratio of past due to total loans increased to 2.47% at September 30, 2019 from 1.90% at June 30, 2019. We recorded total net charge-offs of $0.4 million, or 0.01% of average loans, for the quarter ended September 30, 2019 compared to net charge-offs of $1.9 million, or 0.05% of average loans, for the quarter ended June 30, 2019.

We recorded a provision for loan losses of $2.9 million for the quarter ended September 30, 2019 compared to a provision of $3.7 million for the quarter ended June 30, 2019. From June 30, 2019 to September 30, 2019, our ALLL increased from $29.4 million or 0.77% of total loans to $31.9 million or 0.76% of total loans.

Non-Interest Income and Expense

We earned non-interest income for the quarter ended September 30, 2019 of $7.7 million compared to $7.6 million for the quarter ended June 30, 2019.

For the quarter ended September 30, 2019, non-interest expense totaled $52.2 million, compared to $50.7 million for the quarter ended June 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 7:00 a.m. Central Time on Thursday, October 17, 2019. 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/tbk191017.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 Nine Months Ended



September 30,


June 30,


March 31,


December 31,


September 30,


September 30,


September 30,

(Dollars in thousands)

2019


2019


2019


2018


2018


2019


2018

Financial Highlights:




























Total assets

$
5,039,697


$
4,783,189


$
4,529,783


$
4,559,779


$
4,537,102


$
5,039,697


$
4,537,102

Loans held for investment

$
4,209,417


$
3,835,903


$
3,612,869


$
3,608,644


$
3,512,143


$
4,209,417


$
3,512,143

Deposits

$
3,697,833


$
3,658,978


$
3,314,440


$
3,450,349


$
3,439,049


$
3,697,833


$
3,439,049

Net income available to common stockholders

$
14,317


$
12,730


$
14,788


$
18,085


$
8,975


$
41,835


$
33,045






























Performance Ratios - Annualized:




























Return on average assets


1.17
%


1.09
%


1.33
%


1.60
%


0.90
%


1.20
%


1.21
%
Return on average total equity


8.79
%


7.83
%


9.30
%


11.35
%


5.88
%


8.63
%


8.40
%
Return on average common equity


8.79
%


7.83
%


9.30
%


11.40
%


5.85
%


8.63
%


8.41
%
Return on average tangible common equity ⁽¹⁾


12.56
%


11.19
%


13.43
%


16.73
%


7.57
%


12.38
%


10.27
%
Yield on loans⁽²⁾


7.63
%


7.95
%


7.99
%


8.14
%


8.33
%


7.85
%


8.05
%
Cost of interest bearing deposits


1.49
%


1.42
%


1.24
%


1.15
%


1.08
%


1.39
%


0.96
%
Cost of total deposits


1.19
%


1.14
%


0.99
%


0.91
%


0.85
%


1.11
%


0.76
%
Cost of total funds


1.41
%


1.40
%


1.28
%


1.14
%


1.16
%


1.36
%


1.06
%
Net interest margin⁽²⁾


5.85
%


5.99
%


6.15
%


6.34
%


6.59
%


5.99
%


6.35
%
Net non-interest expense to average assets


3.64
%


3.68
%


3.70
%


3.55
%


4.19
%


3.67
%


3.76
%
Adjusted net non-interest expense to average assets ⁽¹⁾


3.64
%


3.68
%


3.70
%


3.55
%


3.62
%


3.67
%


3.55
%
Efficiency ratio


71.93
%


71.37
%


70.54
%


65.52
%


72.15
%


71.29
%


67.50
%
Adjusted efficiency ratio⁽¹⁾


71.93
%


71.37
%


70.54
%


65.52
%


63.49
%


71.29
%


63.98
%





























Asset Quality:⁽³⁾




























Past due to total loans


2.47
%


1.90
%


2.33
%


2.41
%


2.23
%


2.47
%


2.23
%
Non-performing loans to total loans


1.00
%


0.96
%


0.95
%


1.00
%


1.13
%


1.00
%


1.13
%
Non-performing assets to total assets


0.91
%


0.86
%


0.84
%


0.84
%


0.93
%


0.91
%


0.93
%
ALLL to non-performing loans


75.58
%


79.91
%


80.70
%


76.47
%


68.82
%


75.58
%


68.82
%
ALLL to total loans


0.76
%


0.77
%


0.76
%


0.76
%


0.78
%


0.76
%


0.78
%
Net charge-offs to average loans


0.01
%


0.05
%


0.03
%


0.05
%


0.12
%


0.09
%


0.19
%





























Capital:




























Tier 1 capital to average assets⁽⁴⁾


10.37
%


10.84
%


11.32
%


11.08
%


11.75
%


10.37
%


11.75
%
Tier 1 capital to risk-weighted assets⁽⁴⁾


10.08
%


11.08
%


11.76
%


11.49
%


11.16
%


10.08
%


11.16
%
Common equity tier 1 capital to risk-weighted assets⁽⁴⁾


9.26
%


10.19
%


10.81
%


10.55
%


9.96
%


9.26
%


9.96
%
Total capital to risk-weighted assets⁽⁴⁾


11.79
%


12.88
%


13.62
%


13.35
%


13.05
%


11.79
%


13.05
%
Total equity to total assets


12.57
%


13.45
%


14.27
%


13.96
%


13.59
%


12.57
%


13.59
%
Tangible common stockholders' equity to tangible assets⁽¹⁾


9.10
%


9.78
%


10.37
%


10.03
%


9.35
%


9.10
%


9.35
%





























Per Share Amounts:




























Book value per share

$
24.99


$
24.56


$
24.19


$
23.62


$
23.10


$
24.99


$
23.10

Tangible book value per share⁽¹⁾

$
17.40


$
17.13


$
16.82


$
16.22


$
15.42


$
17.40


$
15.42

Basic earnings per common share

$
0.56


$
0.48


$
0.55


$
0.68


$
0.34


$
1.60


$
1.37

Diluted earnings per common share

$
0.56


$
0.48


$
0.55


$
0.67


$
0.34


$
1.59


$
1.35

Adjusted diluted earnings per common share⁽¹⁾

$
0.56


$
0.48


$
0.55


$
0.67


$
0.51


$
1.59


$
1.53

Shares outstanding end of period


25,357,985



26,198,308



26,709,411



26,949,936



26,279,761



25,357,985



26,279,761

Unaudited consolidated balance sheet as of:



September 30,


June 30,


March 31,


December 31,


September 30,

(Dollars in thousands)

2019


2019


2019


2018


2018

ASSETS




















Total cash and cash equivalents

$
115,043


$
209,305


$
171,950


$
234,939


$
282,409

Securities - available for sale


302,917



329,991



339,465



336,423



355,981

Securities - held to maturity


8,517



8,573



8,499



8,487



8,403

Equity securities


5,543



5,479



5,183



5,044



4,981

Loans held for sale


7,499



2,877



610



2,106



683

Loans held for investment


4,209,417



3,835,903



3,612,869



3,608,644



3,512,143

Allowance for loan and lease losses


(31,895
)


(29,416
)


(27,605
)


(27,571
)


(27,256
)
Loans, net


4,177,522



3,806,487



3,585,264



3,581,073



3,484,887

FHLB and other restricted stock


23,960



18,037



21,191



15,943



23,109

Premises and equipment, net


87,112



84,998



84,931



83,392



82,935

Other real estate owned ("OREO"), net


2,849



3,351



3,073



2,060



2,442

Goodwill and intangible assets, net


192,440



194,668



197,015



199,417



201,842

Bank-owned life insurance


40,724



40,847



40,667



40,509



40,339

Deferred tax asset, net


5,971



7,278



7,608



8,438



8,137

Other assets


69,600



71,298



64,327



41,948



40,954

Total assets

$
5,039,697


$
4,783,189


$
4,529,783


$
4,559,779


$
4,537,102

LIABILITIES




















Non-interest bearing deposits

$
754,233


$
684,223


$
667,597


$
724,527


$
697,903

Interest bearing deposits


2,943,600



2,974,755



2,646,843



2,725,822



2,741,146

Total deposits


3,697,833



3,658,978



3,314,440



3,450,349



3,439,049

Customer repurchase agreements


14,124



12,788



3,727



4,485



13,248

Federal Home Loan Bank advances


530,000



305,000



405,000



330,000



330,000

Subordinated notes


49,010



48,983



48,956



48,929



48,903

Junior subordinated debentures


39,443



39,320



39,200



39,083



38,966

Other liabilities


75,594



74,758



72,244



50,326



50,295

Total liabilities


4,406,004



4,139,827



3,883,567



3,923,172



3,920,461

EQUITY




















Preferred stock series A


—



—



—



—



4,550

Preferred stock series B


—



—



—



—



5,108

Common stock


272



271



271



271



264

Additional paid-in-capital


472,368



471,145



470,292



469,341



458,920

Treasury stock, at cost


(52,632
)


(27,468
)


(9,881
)


(2,288
)


(2,285
)
Retained earnings


212,321



198,004



185,274



170,486



152,401

Accumulated other comprehensive income


1,364



1,410



260



(1,203
)


(2,317
)
Total equity


633,693



643,362



646,216



636,607



616,641

Total liabilities and equity

$
5,039,697


$
4,783,189


$
4,529,783


$
4,559,779


$
4,537,102

Unaudited consolidated statement of income:



For the Three Months Ended


For the Nine Months Ended



September 30,


June 30,


March 31,


December 31,


September 30,


September 30,


September 30,

(Dollars in thousands)

2019


2019


2019


2018


2018


2019


2018

Interest income:




























Loans, including fees

$
50,249


$
47,910


$
45,094


$
44,435


$
41,257


$
143,253


$
116,288

Factored receivables, including fees


25,570



25,558



24,556



28,070



27,939



75,684



64,033

Securities


2,784



2,667



2,644



2,314



1,551



8,095



4,040

FHLB and other restricted stock


209



146



192



154



147



547



353

Cash deposits


603



1,022



778



877



865



2,403



2,412

Total interest income


79,415



77,303



73,264



75,850



71,759



229,982



187,126

Interest expense:




























Deposits


11,036



10,010



8,218



7,931



6,219



29,264



15,127

Subordinated notes


840



839



839



839



837



2,518



2,512

Junior subordinated debentures


719



744



760



717



714



2,223



2,024

Other borrowings


2,055



2,291



2,136



1,482



2,207



6,482



5,294

Total interest expense


14,650



13,884



11,953



10,969



9,977



40,487



24,957

Net interest income


64,765



63,419



61,311



64,881



61,782



189,495



162,169

Provision for loan losses


2,865



3,681



1,014



1,910



6,803



7,560



14,257

Net interest income after provision for loan losses


61,900



59,738



60,297



62,971



54,979



181,935



147,912

Non-interest income:




























Service charges on deposits


1,937



1,700



1,606



1,702



1,412



5,243



3,767

Card income


2,015



2,071



1,844



1,999



1,877



5,930



4,515

Net OREO gains (losses) and valuation adjustments


(56
)


148



209



37



65



301



(551
)
Net gains (losses) on sale of securities


19



14



(11
)


—



—



22



(272
)
Fee income


1,624



1,519



1,612



1,636



1,593



4,755



3,514

Insurance commissions


1,247



961



919



846



1,113



3,127



2,646

Gain on sale of subsidiary


—



—



—



—



—



—



1,071

Other


956



1,210



1,359



574



(1
)


3,525



1,486

Total non-interest income


7,742



7,623



7,538



6,794



6,059



22,903



16,176

Non-interest expense:




























Salaries and employee benefits


28,717



28,120



26,439



25,586



24,695



83,276



64,626

Occupancy, furniture and equipment


4,505



4,502



4,522



4,402



3,553



13,529



9,621

FDIC insurance and other regulatory assessments


(2
)


303



299



184



363



600



945

Professional fees


1,969



1,550



1,865



1,837



3,384



5,384



7,102

Amortization of intangible assets


2,228



2,347



2,402



2,438



2,064



6,977



4,542

Advertising and promotion


1,379



1,796



1,604



1,036



1,609



4,779



3,938

Communications and technology


5,382



4,988



4,874



4,388



7,252



15,244



13,882

Other


7,975



7,098



6,561



7,091



6,026



21,634



15,735

Total non-interest expense


52,153



50,704



48,566



46,962



48,946



151,423



120,391

Net income before income tax


17,489



16,657



19,269



22,803



12,092



53,415



43,697

Income tax expense


3,172



3,927



4,481



4,718



2,922



11,580



10,074

Net income

$
14,317


$
12,730


$
14,788


$
18,085


$
9,170


$
41,835


$
33,623

Dividends on preferred stock


—



—



—



—



(195
)


—



(578
)
Net income available to common stockholders

$
14,317


$
12,730


$
14,788


$
18,085


$
8,975


$
41,835


$
33,045

Earnings per share:



For the Three Months Ended


For the Nine Months Ended



September 30,


June 30,


March 31,


December 31,


September 30,


September 30,


September 30,

(Dollars in thousands)

2019


2019


2019


2018


2018


2019


2018

Basic




























Net income to common stockholders

$
14,317


$
12,730


$
14,788


$
18,085


$
8,975


$
41,835


$
33,045

Weighted average common shares outstanding


25,621,054



26,396,351



26,679,724



26,666,554



26,178,194



26,228,499



24,159,543

Basic earnings per common share

$
0.56


$
0.48


$
0.55


$
0.68


$
0.34


$
1.60


$
1.37






























Diluted




























Net income to common stockholders

$
14,317


$
12,730


$
14,788


$
18,085


$
8,975


$
41,835


$
33,045

Dilutive effect of preferred stock


—



—



—



—



195



—



578

Net income to common stockholders - diluted

$
14,317


$
12,730


$
14,788


$
18,085


$
9,170


$
41,835


$
33,623

Weighted average common shares outstanding


25,621,054



26,396,351



26,679,724



26,666,554



26,178,194



26,228,499



24,159,543

Dilutive effects of:




























Assumed conversion of Preferred A


—



—



—



89,240



315,773



—



315,773

Assumed conversion of Preferred B


—



—



—



100,176



354,471



—



354,471

Assumed exercises of stock options


60,068



59,962



64,166



76,219



90,320



61,054



86,728

Restricted stock awards


45,631



30,110



49,795



46,457



45,796



40,572



55,087

Restricted stock units


3,045



—



—



1,303



7,276



57



2,706

Performance stock units


4,673



—



—



—



—



1,558



—

Weighted average shares outstanding - diluted


25,734,471



26,486,423



26,793,685



26,979,949



26,991,830



26,331,740



24,974,308

Diluted earnings per common share

$
0.56


$
0.48


$
0.55


$
0.67


$
0.34


$
1.59


$
1.35



























































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 Nine Months Ended



September 30,


June 30,


March 31,


December 31,


September 30,


September 30,


September 30,



2019


2019


2019


2018


2018


2019


2018

Assumed conversion of Preferred A


—



—



—



—



—



—



—

Assumed conversion of Preferred B


—



—



—



—



—



—



—

Stock options


67,023



70,037



50,752



51,952



51,952



67,023



51,952

Restricted stock awards


3,209



—



13,290



14,513



14,513



3,209



14,513

Restricted stock units


—



58,400



58,400



—



—



54,077



—

Performance stock units


55,228



70,879



58,400



59,658



59,658



55,228



59,658

Loans held for investment summarized as of:



September 30,


June 30,


March 31,


December 31,


September 30,

(Dollars in thousands)

2019


2019


2019


2018


2018

Commercial real estate

$
1,115,559


$
1,098,279


$
1,093,882


$
992,080


$
906,494

Construction, land development, land


164,186



157,861



145,002



179,591



190,920

1-4 family residential properties


186,405



186,070



194,067



190,185



194,752

Farmland


161,447



144,594



156,299



170,540



177,313

Commercial


1,369,505



1,257,330



1,117,640



1,114,971



1,123,598

Factored receivables


599,651



583,131



570,663



617,791



611,285

Consumer


24,967



26,048



27,941



29,822



31,423

Mortgage warehouse


587,697



382,590



307,375



313,664



276,358

Total loans

$
4,209,417


$
3,835,903


$
3,612,869


$
3,608,644


$
3,512,143

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:



September 30,


June 30,


March 31,


December 31,


September 30,

(Dollars in thousands)

2019


2019


2019


2018


2018

Commercial - Equipment

$
429,412


$
395,094


$
364,447


$
352,037


$
323,832

Commercial - Asset-based lending


247,026



208,896



174,447



214,110



273,096

Factored receivables


599,651



583,131



570,663



617,791



611,285

Commercial finance

$
1,276,089


$
1,187,121


$
1,109,557


$
1,183,938


$
1,208,213






















Commercial finance % of total loans


30
%


31
%


31
%


33
%


34
%

National lending loans are further summarized below:



September 30,


June 30,


March 31,


December 31,


September 30,

(Dollars in thousands)

2019


2019


2019


2018


2018

Mortgage warehouse

$
587,697


$
382,590


$
307,375


$
313,664


$
276,358

Commercial - Liquid credit


37,386



21,758



960



963



966

Commercial - Premium finance


101,562



72,898



77,389



72,302



75,293

National lending

$
726,645


$
477,246


$
385,724


$
386,929


$
352,617






















National lending % of total loans


17
%


12
%


11
%


11
%


10
%

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



September 30,


June 30,


March 31,


December 31,


September 30,

(Dollars in thousands)

2019


2019


2019


2018


2018

Average community banking

$
2,193,533


$
2,166,122


$
2,103,816


$
2,012,255


$
1,748,936

Average commercial finance


1,208,823



1,168,110



1,123,978



1,190,586



1,184,064

Average national lending


541,367



373,755



307,249



329,630



360,719

Average total loans

$
3,943,723


$
3,707,987


$
3,535,043


$
3,532,471


$
3,293,719

Community banking yield


5.79
%


5.88
%


5.91
%


5.82
%


5.75
%
Commercial finance yield


12.31
%


12.52
%


12.50
%


12.82
%


13.00
%
National lending yield


4.63
%


5.62
%


5.73
%


5.44
%


5.54
%
Total loan yield


7.63
%


7.95
%


7.99
%


8.14
%


8.33
%

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:



September 30,


June 30,


March 31,


December 31,


September 30,



2019


2019


2019


2018


2018

Factored receivable period end balance

$
562,009,000


$
544,601,000


$
534,420,000


$
588,750,000


$
579,985,000

Yield on average receivable balance


18.23
%


18.73
%


17.96
%


18.24
%


18.96
%
Rolling twelve quarter annual charge-off rate


0.36
%


0.40
%


0.39
%


0.37
%


0.38
%
Factored receivables - transportation concentration


83
%


83
%


81
%


83
%


83
%





















Interest income, including fees

$
24,869,000


$
24,762,000


$
23,803,000


$
27,578,000


$
27,420,000

Non-interest income


1,291,000



1,205,000



1,077,000



1,032,000



942,000

Factored receivable total revenue


26,160,000



25,967,000



24,880,000



28,610,000



28,362,000

Average net funds employed


494,198,000



483,203,000



490,241,000



547,996,000



525,499,000

Yield on average net funds employed


21.00
%


21.55
%


20.58
%


20.71
%


21.41
%





















Accounts receivable purchased

$
1,450,905,000


$
1,408,982,000


$
1,325,140,000


$
1,541,332,000


$
1,503,049,000

Number of invoices purchased


890,986



874,248



789,838



882,042



836,771

Average invoice size

$
1,628


$
1,612


$
1,678


$
1,747


$
1,796

Average invoice size - transportation

$
1,497


$
1,492


$
1,541


$
1,625


$
1,666

Average invoice size - non-transportation

$
3,467


$
3,047


$
3,276


$
3,209


$
3,267






















Net new clients


16



73



191



259



422

Period end clients


6,471



6,455



6,382



6,191



5,932

Deposits summarized as of:



September 30,


June 30,


March 31,


December 31,


September 30,

(Dollars in thousands)

2019


2019


2019


2018


2018

Non-interest bearing demand

$
754,233


$
684,223


$
667,597


$
724,527


$
697,903

Interest bearing demand


587,123



587,164



602,088



615,704



608,775

Individual retirement accounts


108,593



111,328



112,696



115,583



118,459

Money market


424,162



440,289



372,109



443,663



413,402

Savings


356,368



362,594



372,914



369,389



373,062

Certificates of deposit


1,120,850



1,122,873



851,411



835,127



854,048

Brokered deposits


346,504



350,507



335,625



346,356



373,400

Total deposits

$
3,697,833


$
3,658,978


$
3,314,440


$
3,450,349


$
3,439,049

Net interest margin summarized for the three months ended:



September 30, 2019


June 30, 2019



Average






Average


Average






Average

(Dollars in thousands)

Balance


Interest


Rate


Balance


Interest


Rate

Interest earning assets:
























Interest earning cash balances

$
104,569


$
603



2.29
%

$
166,426


$
1,022



2.46
%
Taxable securities


278,878



2,495



3.55
%


287,607



2,317



3.23
%
Tax-exempt securities


48,685



289



2.36
%


61,712



350



2.28
%
FHLB and other restricted stock


19,698



209



4.21
%


21,851



146



2.67
%
Loans


3,943,723



75,819



7.63
%


3,707,987



73,468



7.95
%
Total interest earning assets

$
4,395,553


$
79,415



7.17
%

$
4,245,583


$
77,303



7.30
%
Non-interest earning assets:
























Other assets


444,987











449,064









Total assets

$
4,840,540










$
4,694,647









Interest bearing liabilities:
























Deposits:
























Interest bearing demand

$
585,706


$
355



0.24
%

$
592,593


$
391



0.26
%
Individual retirement accounts


110,049



454



1.64
%


111,962



437



1.57
%
Money market


416,526



1,406



1.34
%


419,066



1,473



1.41
%
Savings


359,169



117



0.13
%


366,953



120



0.13
%
Certificates of deposit


1,113,006



6,588



2.35
%


1,006,950



5,568



2.22
%
Brokered deposits


352,430



2,116



2.38
%


337,086



2,021



2.40
%
Total interest bearing deposits


2,936,886



11,036



1.49
%


2,834,610



10,010



1.42
%
Subordinated notes


48,994



840



6.80
%


48,967



839



6.87
%
Junior subordinated debentures


39,364



719



7.25
%


39,241



744



7.60
%
Other borrowings


364,950



2,055



2.23
%


368,455



2,291



2.49
%
Total interest bearing liabilities

$
3,390,194


$
14,650



1.71
%

$
3,291,273


$
13,884



1.69
%
Non-interest bearing liabilities and equity:
























Non-interest bearing demand deposits


735,527











686,923









Other liabilities


68,778











64,104









Total equity


646,041











652,347









Total liabilities and equity

$
4,840,540










$
4,694,647









Net interest income





$
64,765










$
63,419





Interest spread










5.46
%










5.61
%
Net interest margin










5.85
%










5.99
%

Metrics and non-GAAP financial reconciliation:



As of and for the Three Months Ended


As of and for the Nine Months Ended

(Dollars in thousands,

September 30,


June 30,


March 31,


December 31,


September 30,


September 30,


September 30,

except per share amounts)

2019


2019


2019


2018


2018


2019


2018

Net income available to common stockholders

$
14,317


$
12,730


$
14,788


$
18,085


$
8,975


$
41,835


$
33,045

Gain on sale of subsidiary or division


—



—



—



—



—



—



(1,071
)
Transaction related costs


—



—



—



—



5,871



—



6,965

Tax effect of adjustments


—



—



—



—



(1,392
)


—



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

$
14,317


$
12,730


$
14,788


$
18,085


$
13,454


$
41,835


$
37,538

Dilutive effect of convertible preferred stock


—



—



—



—



195



—



578

Adjusted net income available to common stockholders - diluted

$
14,317


$
12,730


$
14,788


$
18,085


$
13,649


$
41,835


$
38,116






























Weighted average shares outstanding - diluted


25,734,471



26,486,423



26,793,685



26,979,949



26,991,830



26,331,740



24,974,308

Adjusted effects of assumed Preferred Stock conversion


—



—



—



—



—



—



—

Adjusted weighted average shares outstanding - diluted


25,734,471



26,486,423



26,793,685



26,979,949



26,991,830



26,331,740



24,974,308

Adjusted diluted earnings per common share

$
0.56


$
0.48


$
0.55


$
0.67


$
0.51


$
1.59


$
1.53






























Average total stockholders' equity

$
646,041


$
652,347


$
644,960


$
632,126


$
618,682


$
647,787


$
534,958

Average preferred stock liquidation preference


—



—



—



2,624



9,658



—



9,658

Average total common stockholders' equity


646,041



652,347



644,960



629,502



609,025



647,787



525,300

Average goodwill and other intangibles


193,765



196,002



198,389



200,754



138,471



196,035



95,220

Average tangible common stockholders' equity

$
452,276


$
456,346


$
446,571


$
428,748


$
470,553


$
451,752


$
430,080






























Net income available to common stockholders

$
14,317


$
12,730


$
14,788


$
18,085


$
8,975


$
41,835


$
33,045

Average tangible common equity


452,276



456,346



446,571



428,748



470,553



451,752



430,080

Return on average tangible common equity


12.56
%


11.19
%


13.43
%


16.73
%


7.57
%


12.38
%


10.27
%





























Adjusted efficiency ratio:




























Net interest income

$
64,765


$
63,419


$
61,311


$
64,881


$
61,782


$
189,495


$
162,169

Non-interest income


7,742



7,623



7,538



6,794



6,059



22,903



16,176

Operating revenue


72,507



71,042



68,849



71,675



67,841



212,398



178,345

Gain on sale of subsidiary or division


—



—



—



—



—



—



(1,071
)
Adjusted operating revenue

$
72,507


$
71,042


$
68,849


$
71,675


$
67,841


$
212,398


$
177,274

Non-interest expenses

$
52,153


$
50,704


$
48,566


$
46,962


$
48,946


$
151,423


$
120,391

Transaction related costs


—



—



—



—



(5,871
)


—



(6,965
)
Adjusted non-interest expenses

$
52,153


$
50,704


$
48,566


$
46,962


$
43,075


$
151,423


$
113,426

Adjusted efficiency ratio


71.93
%


71.37
%


70.54
%


65.52
%


63.49
%


71.29
%


63.98
%





























Adjusted net non-interest expense to average assets ratio:




























Non-interest expenses

$
52,153


$
50,704


$
48,566


$
46,962


$
48,946


$
151,423


$
120,391

Transaction related costs


—



—



—



—



(5,871
)


—



(6,965
)
Adjusted non-interest expenses

$
52,153


$
50,704


$
48,566


$
46,962


$
43,075


$
151,423


$
113,426






























Total non-interest income

$
7,742


$
7,623


$
7,538


$
6,794


$
6,059


$
22,903


$
16,176

Gain on sale of subsidiary or division


—



—



—



—



—



—



(1,071
)
Adjusted non-interest income

$
7,742


$
7,623


$
7,538


$
6,794


$
6,059


$
22,903


$
15,105

Adjusted net non-interest expenses

$
44,411


$
43,081


$
41,028


$
40,168


$
37,016


$
128,520


$
98,321

Average total assets

$
4,840,540


$
4,694,647


$
4,501,760


$
4,488,918


$
4,060,560


$
4,680,234


$
3,702,513

Adjusted net non-interest expense to average assets ratio


3.64
%


3.68
%


3.70
%


3.55
%


3.62
%


3.67
%


3.55
%





























Total stockholders' equity

$
633,693


$
643,362


$
646,216


$
636,607


$
616,641


$
633,693


$
616,641

Preferred stock liquidation preference


—



—



—



—



(9,658
)


—



(9,658
)
Total common stockholders' equity


633,693



643,362



646,216



636,607



606,983



633,693



606,983

Goodwill and other intangibles


(192,440
)


(194,668
)


(197,015
)


(199,417
)


(201,842
)


(192,440
)


(201,842
)
Tangible common stockholders' equity

$
441,253


$
448,694


$
449,201


$
437,190


$
405,141


$
441,253


$
405,141

Common shares outstanding


25,357,985



26,198,308



26,709,411



26,949,936



26,279,761



25,357,985



26,279,761

Tangible book value per share

$
17.40


$
17.13


$
16.82


$
16.22


$
15.42


$
17.40


$
15.42






























Total assets at end of period

$
5,039,697


$
4,783,189


$
4,529,783


$
4,559,779


$
4,537,102


$
5,039,697


$
4,537,102

Goodwill and other intangibles


(192,440
)


(194,668
)


(197,015
)


(199,417
)


(201,842
)


(192,440
)


(201,842
)
Tangible assets at period end

$
4,847,257


$
4,588,521


$
4,332,768


$
4,360,362


$
4,335,260


$
4,847,257


$
4,335,260

Tangible common stockholders' equity ratio


9.10
%


9.78
%


10.37
%


10.03
%


9.35
%


9.10
%


9.35
%

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 Nine Months Ended



September 30,


June 30,


March 31,


December 31,


September 30,


September 30,


September 30,

(Dollars in thousands)

2019


2019


2019


2018


2018


2019


2018

Loan discount accretion

$
1,159


$
1,297


$
1,557


$
1,411


$
1,271


$
4,013


$
6,884

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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