Triumph Bancorp Reports Second Quarter Net Income to Common Stockholders Of $27.2 Million

Jul 21, 2021

DALLAS, July 21, 2021 (GLOBE NEWSWIRE) -- Triumph Bancorp, Inc. (Nasdaq: TBK) (“Triumph” or the “Company”) today announced earnings and operating results for the second quarter of 2021.

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.

2021 Second Quarter Highlights

  • For the second quarter of 2021, net income to common shareholders was $27.2 million, and diluted earnings per share were $1.08.
  • Adjusted diluted earnings per share were $1.17 for the second quarter of 2021, which exclude transaction costs related to the acquisition of HubTran, Inc., net of taxes.
  • Net interest income was $90.3 million.
  • Non-interest income was $13.9 million.
  • Non-interest expense was $70.8 million, including $3.0 million of transaction costs related to the HubTran, Inc. acquisition.
  • Net interest margin was 6.47%. Yield on loans and the average cost of our total deposits were 7.77% and 0.20%, respectively.
  • Credit loss expense for the quarter ended June 30, 2021 was a benefit of $1.8 million primarily due to improvements in our macroeconomic forecasts and changes in the volume and mix of our underlying loan portfolio.
  • Net charge-offs were $0.4 million, or 0.01% of average loans, for the quarter.
  • The total dollar value of invoices purchased by Triumph Business Capital was $3.068 billion with an average invoice size of $2,189. The transportation average invoice size for the quarter was $2,090.
  • TriumphPay processed 3,165,119 invoices paying carriers a total of $3.427 billion.
  • On June 1, 2021, we, through TriumphPay, a division of our wholly-owned subsidiary TBK Bank, SSB, acquired HubTran, Inc., a cloud-based provider of automation software for the transportation industry's back-office, for $97 million in cash. As part of the acquisition, we acquired $27.3 million of intangible assets and $73.7 million of goodwill.

Balance Sheet

Total loans held for investment decreased $253.3 million, or 5.0%, during the second quarter to $4.831 billion at June 30, 2021. Average loans held for investment for the quarter decreased $35.5 million, or 0.7%, to $4.799 billion.

Total deposits were $4.725 billion at June 30, 2021, a decrease of $64.2 million, or 1.3%, in the second quarter of 2021. Non-interest-bearing deposits accounted for 38% of total deposits and non-time deposits accounted for 79% of total deposits at June 30, 2021.

Asset Quality and Allowance for Credit Loss

Our nonperforming assets ratio at June 30, 2021 was 0.97%. Approximately 2 basis points of this ratio at June 30, 2021 consisted of $1.5 million of the acquired Over-Formula Advance portfolio which represents the portion that is not covered by CVLG's indemnification. An additional 32 basis points of this ratio at June 30, 2021 consisted of $19.4 million of the Misdirected Payments. Over-Formula Advances and Misdirected Payments are discussed in greater detail below.

Our past-due loan ratio at June 30, 2021 was 2.28%. Approximately 21 basis points of this ratio at June 30, 2021 consisted of $10.1 million of past due factored receivables related to the Over-Formula Advance portfolio. An additional 40 basis points of this ratio at June 30, 2021 consisted of the $19.4 million of Misdirected Payments, as discussed below.

Our ACL as a percentage of loans held for investment increased 1 basis point during the quarter to 0.95% at June 30, 2021.

CARES Act and Paycheck Protection Program

As of June 30, 2021, our balance sheet reflected deferrals on outstanding loan balances of $53.7 million to assist customers impacted by COVID-19. Modifications related to the COVID-19 pandemic and qualifying under the provisions of Section 4013 of the CARES Act are not considered troubled debt restructurings. As of June 30, 2021, these deferred balances carried accrued interest of $0.2 million.

As of June 30, 2021, we carried 1,390 PPP loans representing a balance of $135.3 million classified as commercial loans. We recognized $1.8 million in fees from the SBA on PPP loans during the three months ended June 30, 2021 and carry $5.2 million of deferred fees on PPP loans at quarter end. The remaining fees will be amortized over the respective lives of the loans.

Items related to our July 2020 acquisition of TFS

As disclosed on our SEC Forms 8-K filed on July 8, 2020 and September 23, 2020, we acquired the transportation factoring assets of TFS, a wholly owned subsidiary of Covenant Logistics Group, Inc. ("CVLG"), and subsequently amended the terms of that transaction. There were no material developments related to that transaction that impacted our operating results for the three months ended June 30, 2021.

At June 30, 2021, the carrying value of the acquired over-formula advances was $10.1 million, the total reserve on acquired over-formula advances was $10.1 million and the balance of our indemnification asset, the value of the payment that would be due to us from CVLG in the event that these over-advances are charged off, was approximately $5 million.

As of June 30, 2021 we carried a separate $19.4 million receivable (the “Misdirected Payments”) payable by the United States Postal Service (“USPS”) arising from accounts factored to the largest over-formula advance carrier. This amount is separate from the acquired Over-Formula Advances. The amounts represented by this receivable were paid by the USPS directly to such customer in contravention of notices of assignment delivered to, and previously honored by, the USPS, which amount was then not remitted back to us by such customer as required. The USPS disputes their obligation to make such payment, citing purported deficiencies in the notices delivered to them. In addition to commencing litigation against such customer, we have also filed a declaratory judgment action in United States Federal District Court for the Southern District of Florida seeking a ruling that the USPS was obligated to make the payments represented by this receivable directly to us. Based on our legal analysis and discussions with our counsel advising us on this matter, we believe it is probable that we will prevail in such action and that the USPS will have the capacity to make payment on such receivable. Consequently, we have not reserved for such balance as of June 30, 2021. The full amount of such receivable is reflected in non-performing and past due factored receivables as of June 30, 2021 in accordance with our policy. As of June 30, 2021, the entire $19.4 million Misdirected Payments amount was greater than 90 days past due.

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, July 22, 2021. 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/tbk210722.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 banking, payments, and factoring services products through its bank subsidiary, TBK Bank, SSB. www.triumphbancorp.com

Forward-Looking Statements

This press release contains forward-looking statements. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “could,” “may,” “will,” “should,” “seeks,” “likely,” “intends,” “plans,” “pro forma,” “projects,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods that may be incorrect or imprecise and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: business and economic conditions generally and in the bank and non-bank financial services industries, nationally and within our local market areas; the impact of COVID-19 on our business, including the impact of the actions taken by governmental authorities to try and contain the virus or address the impact of the virus on the United States economy (including, without limitation, the CARES Act), and the resulting effect of all of such items on our operations, liquidity and capital position, and on the financial condition of our borrowers and other customers; our ability to mitigate our risk exposures; our ability to maintain our historical earnings trends; changes in management personnel; interest rate risk; concentration of our products and services in the transportation industry; credit risk associated with our loan portfolio; lack of seasoning in our loan portfolio; deteriorating asset quality and higher loan charge-offs; time and effort necessary to resolve nonperforming assets; inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates; risks related to the integration of acquired businesses, including our acquisition of HubTran Inc. and developments related to our acquisition of Transport Financial Solutions and the related over-formula advances, and any future acquisitions; our ability to successfully identify and address the risks associated with our possible future acquisitions, and the risks that our prior and possible future acquisitions make it more difficult for investors to evaluate our business, financial condition and results of operations, and impairs our ability to accurately forecast our future performance; lack of liquidity; fluctuations in the fair value and liquidity of the securities we hold for sale; impairment of investment securities, goodwill, other intangible assets or deferred tax assets; our risk management strategies; environmental liability associated with our lending activities; increased competition in the bank and non-bank financial services industries, nationally, regionally or locally, which may adversely affect pricing and terms; the accuracy of our financial statements and related disclosures; material weaknesses in our internal control over financial reporting; system failures or failures to prevent breaches of our network security; the institution and outcome of litigation and other legal proceedings against us or to which we become subject; changes in carry-forwards of net operating losses; changes in federal tax law or policy; the impact of recent and future legislative and regulatory changes, including changes in banking, securities and tax laws and regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and their application by our regulators; governmental monetary and fiscal policies; changes in the scope and cost of FDIC, insurance and other coverages; failure to receive regulatory approval for future acquisitions; and increases in our capital requirements.

While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. All forward-looking statements are necessarily only estimates of future results. Accordingly, actual results may differ materially from those expressed in or contemplated by the particular forward-looking statement, and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" and the forward-looking statement disclosure contained in Triumph’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 12, 2021.

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 Six Months Ended
(Dollars in thousands) June 30,
2021
  March 31,
2021
  December 31,
2020
  September 30,
2020
  June 30,
2020
  June 30,
2021
  June 30,
2020
Financial Highlights:                          
Total assets $ 6,015,877     $ 6,099,628     $ 5,935,791     $ 5,836,787     $ 5,617,493     $ 6,015,877     $ 5,617,493  
Loans held for investment $ 4,831,215     $ 5,084,512     $ 4,996,776     $ 4,852,911     $ 4,393,311     $ 4,831,215     $ 4,393,311  
Deposits $ 4,725,450     $ 4,789,665     $ 4,716,600     $ 4,248,101     $ 4,062,332     $ 4,725,450     $ 4,062,332  
Net income available to common stockholders $ 27,180     $ 33,122     $ 31,328     $ 22,005     $ 13,440     $ 60,302     $ 8,990  
                           
Performance Ratios - Annualized:                          
Return on average assets 1.84 %   2.29 %   2.21 %   1.65 %   0.99 %   2.06 %   0.35 %
Return on average total equity 14.27 %   18.42 %   17.73 %   13.24 %   8.86 %   16.28 %   2.92 %
Return on average common equity 14.70 %   19.14 %   18.44 %   13.61 %   8.94 %   16.85 %   2.94 %
Return on average tangible common equity (1) 20.92 %   26.19 %   25.70 %   19.43 %   12.96 %   23.52 %   4.23 %
Yield on loans(2) 7.77 %   7.24 %   7.20 %   7.05 %   6.52 %   7.51 %   6.85 %
Cost of interest bearing deposits 0.31 %   0.41 %   0.54 %   0.79 %   1.08 %   0.36 %   1.21 %
Cost of total deposits 0.20 %   0.28 %   0.38 %   0.56 %   0.79 %   0.24 %   0.92 %
Cost of total funds 0.34 %   0.42 %   0.51 %   0.67 %   0.85 %   0.38 %   1.03 %
Net interest margin(2) 6.47 %   6.06 %   6.20 %   5.83 %   5.11 %   6.27 %   5.36 %
Net non-interest expense to average assets 3.75 %   3.14 %   2.54 %   3.23 %   2.40 %   3.45 %   3.09 %
Adjusted net non-interest expense to average assets (1) 3.55 %   3.14 %   2.54 %   3.17 %   3.11 %   3.35 %   3.47 %
Efficiency ratio 67.96 %   62.57 %   55.95 %   65.15 %   62.56 %   65.36 %   69.68 %
Adjusted efficiency ratio (1) 65.09 %   62.57 %   55.95 %   64.18 %   70.75 %   63.87 %   74.38 %
                           
Asset Quality:(3)                          
Past due to total loans 2.28 %   1.96 %   3.22 %   2.40 %   1.50 %   2.28 %   1.50 %
Non-performing loans to total loans 1.06 %   1.17 %   1.16 %   1.17 %   1.27 %   1.06 %   1.27 %
Non-performing assets to total assets 0.97 %   1.15 %   1.15 %   1.52 %   1.20 %   0.97 %   1.20 %
ACL to non-performing loans 88.92 %   80.87 %   164.98 %   159.67 %   97.66 %   88.92 %   97.66 %
ACL to total loans 0.95 %   0.94 %   1.92 %   1.88 %   1.24 %   0.95 %   1.24 %
Net charge-offs to average loans 0.01 %   0.85 %   0.03 %   0.02 %   0.02 %   0.86 %   0.06 %
                           
Capital:                          
Tier 1 capital to average assets(4) 9.73 %   10.89 %   10.80 %   10.75 %   9.98 %   9.73 %   9.98 %
Tier 1 capital to risk-weighted assets(4) 10.33 %   11.28 %   10.60 %   10.32 %   10.57 %   10.33 %   10.57 %
Common equity tier 1 capital to risk-weighted assets(4) 8.74 %   9.72 %   9.05 %   8.72 %   8.84 %   8.74 %   8.84 %
Total capital to risk-weighted assets 12.65 %   13.58 %   13.03 %   12.94 %   13.44 %   12.65 %   13.44 %
Total equity to total assets 13.17 %   12.53 %   12.24 %   11.89 %   11.69 %   13.17 %   11.69 %
Tangible common stockholders' equity to tangible assets(1) 8.04 %   8.98 %   8.56 %   8.09 %   7.84 %   8.04 %   7.84 %
                           
Per Share Amounts:                          
Book value per share $ 29.76     $ 28.90     $ 27.42     $ 26.11     $ 25.28     $ 29.76     $ 25.28  
Tangible book value per share (1) $ 18.35     $ 21.34     $ 19.78     $ 18.38     $ 17.59     $ 18.35     $ 17.59  
Basic earnings (loss) per common share $ 1.10     $ 1.34     $ 1.27     $ 0.89     $ 0.56     $ 2.44     $ 0.37  
Diluted earnings (loss) per common share $ 1.08     $ 1.32     $ 1.25     $ 0.89     $ 0.56     $ 2.39     $ 0.37  
Adjusted diluted earnings per common share(1) $ 1.17     $ 1.32     $ 1.25     $ 0.91     $ 0.25     $ 2.48     $ 0.07  
Shares outstanding end of period 25,109,703     24,882,929     24,868,218     24,851,601     24,202,686     25,109,703     24,202,686  
                                         

Unaudited consolidated balance sheet as of:

(Dollars in thousands) June 30,
2021
  March 31,
2021
  December 31,
2020
  September 30,
2020
  June 30,
2020
ASSETS                  
Total cash and cash equivalents $ 444,439     $ 380,811     $ 314,393     $ 288,278     $ 437,064  
Securities - available for sale 193,627     205,330     224,310     242,802     331,126  
Securities - held to maturity, net 5,658     5,828     5,919     6,096     6,285  
Equity securities 5,854     5,826     5,826     6,040     6,411  
Loans held for sale 31,136     22,663     24,546     36,716     50,382  
Loans held for investment 4,831,215     5,084,512     4,996,776     4,852,911     4,393,311  
Allowance for credit losses (45,694 )   (48,024 )   (95,739 )   (90,995 )   (54,613 )
Loans, net 4,785,521     5,036,488     4,901,037     4,761,916     4,338,698  
FHLB and other restricted stock 8,096     9,807     6,751     18,464     26,345  
Premises and equipment, net 106,720     105,390     103,404     105,455     107,736  
Other real estate owned ("OREO"), net 1,013     1,421     1,432     1,704     1,962  
Goodwill and intangible assets, net 286,567     188,006     189,922     192,041     186,162  
Bank-owned life insurance 41,912     41,805     41,608     41,440     41,298  
Deferred tax asset, net     1,260     6,427     7,716     8,544  
Indemnification asset 5,246     5,246     36,225     31,218      
Other assets 100,088     89,747     73,991     96,901     75,480  
Total assets $ 6,015,877     $ 6,099,628     $ 5,935,791     $ 5,836,787     $ 5,617,493  
LIABILITIES                  
Non-interest bearing deposits $ 1,803,552     $ 1,637,653     $ 1,352,785     $ 1,315,900     $ 1,120,949  
Interest bearing deposits 2,921,898     3,152,012     3,363,815     2,932,201     2,941,383  
Total deposits 4,725,450     4,789,665     4,716,600     4,248,101     4,062,332  
Customer repurchase agreements 9,243     2,668     3,099     14,192     6,732  
Federal Home Loan Bank advances 130,000     180,000     105,000     435,000     455,000  
Payment Protection Program Liquidity Facility 139,673     158,796     191,860     223,713     223,809  
Subordinated notes 87,620     87,564     87,509     87,455     87,402  
Junior subordinated debentures 40,333     40,201     40,072     39,944     39,816  
Deferred tax liability, net 3,333                  
Other liabilities 87,837     76,730     64,870     94,540     85,531  
Total liabilities 5,223,489     5,335,624     5,209,010     5,142,945     4,960,622  
EQUITY                  
Preferred Stock 45,000     45,000     45,000     45,000     45,000  
Common stock 282     280     280     279     273  
Additional paid-in-capital 494,224     490,699     489,151     488,094     472,795  
Treasury stock, at cost (104,486 )   (103,059 )   (103,052 )   (102,942 )   (102,888 )
Retained earnings 349,885     322,705     289,583     258,254     236,249  
Accumulated other comprehensive income (loss) 7,483     8,379     5,819     5,157     5,442  
Total stockholders' equity 792,388     764,004     726,781     693,842     656,871  
Total liabilities and equity $ 6,015,877     $ 6,099,628     $ 5,935,791     $ 5,836,787     $ 5,617,493  
                                       

Unaudited consolidated statement of income:

  For the Three Months Ended   For the Six Months Ended
(Dollars in thousands) June 30,
2021
  March 31,
2021
  December 31,
2020
  September 30,
2020
  June 30,
2020
  June 30,
2021
  June 30,
2020
Interest income:                          
Loans, including fees $ 45,988     $ 48,706     $ 50,723     $ 48,774     $ 50,394     $ 94,694     $ 98,717  
Factored receivables, including fees 47,328     37,795     37,573     31,468     21,101     85,123     45,393  
Securities 1,187     1,650     1,519     1,927     2,676     2,837     4,783  
FHLB and other restricted stock 27     76     56     122     148     103     352  
Cash deposits 158     126     68     73     79     284     567  
Total interest income 94,688     88,353     89,939     82,364     74,398     183,041     149,812  
Interest expense:                          
Deposits 2,470     3,372     4,308     5,834     7,584     5,842     17,261  
Subordinated notes 1,350     1,349     1,347     1,348     1,321     2,699     2,668  
Junior subordinated debentures 446     442     452     462     554     888     1,200  
Other borrowings 140     170     234     341     688     310     1,932  
Total interest expense 4,406     5,333     6,341     7,985     10,147     9,739     23,061  
Net interest income 90,282     83,020     83,598     74,379     64,251     173,302     126,751  
Credit loss expense (benefit) (1,806 )   (7,845 )   4,680     (258 )   13,609     (9,651 )   33,907  
Net interest income after credit loss expense (benefit) 92,088     90,865     78,918     74,637     50,642     182,953     92,844  
Non-interest income:                          
Service charges on deposits 1,857     1,787     1,643     1,470     573     3,644     2,161  
Card income 2,225     1,972     1,949     2,091     1,941     4,197     3,741  
Net OREO gains (losses) and valuation adjustments (287 )   (80 )   (217 )   (41 )   (101 )   (367 )   (358 )
Net gains (losses) on sale of securities 1         16     3,109     63     1     101  
Fee income 4,470     2,249     1,615     1,402     1,304     6,719     2,990  
Insurance commissions 1,272     1,486     1,327     990     864     2,758     1,915  
Gain on sale of subsidiary                 9,758         9,758  
Other 4,358     6,877     16,053     1,472     5,627     11,235     7,198  
Total non-interest income 13,896     14,291     22,386     10,493     20,029     28,187     27,506  
Non-interest expense:                          
Salaries and employee benefits 41,658     35,980     33,798     31,651     30,804     77,638     61,526  
Occupancy, furniture and equipment 6,112     5,779     7,046     5,574     4,964     11,891     10,146  
FDIC insurance and other regulatory assessments 500     977     350     360     495     1,477     810  
Professional fees 5,052     2,545     2,326     3,265     1,651     7,597     3,758  
Amortization of intangible assets 2,428     1,975     2,065     2,141     2,046     4,403     4,124  
Advertising and promotion 1,241     890     1,170     1,105     1,151     2,131     2,443  
Communications and technology 6,028     5,900     5,639     5,569     5,444     11,928     10,945  
Other 7,779     6,846     6,904     5,632     6,171     14,625     13,727  
Total non-interest expense 70,798     60,892     59,298     55,297     52,726     131,690     107,479  
Net income before income tax 35,186     44,264     42,006     29,833     17,945     79,450     12,871  
Income tax expense 7,204     10,341     9,876     6,929     4,505     17,545     3,881  
Net income $ 27,982     $ 33,923     $ 32,130     $ 22,904     $ 13,440     $ 61,905     $ 8,990  
Dividends on preferred stock (802 )   (801 )   (802 )   (899 )       (1,603 )    
Net income available to common stockholders $ 27,180     $ 33,122     $ 31,328     $ 22,005     $ 13,440     $ 60,302     $ 8,990  
                                                       

Earnings per share:

  For the Three Months Ended   Six Months Ended June 30,
(Dollars in thousands) June 30,
2021
  March 31,
2021
  December 31,
2020
  September 30,
2020
  June 30,
2020
  June 30,
2021
  June 30,
2020
Basic                          
Net income to common stockholders $ 27,180   $ 33,122   $ 31,328   $ 22,005   $ 13,440   $ 60,302   $ 8,990
Weighted average common shares outstanding 24,724,128   24,675,109   24,653,099   24,592,092   23,987,049   24,699,754   24,150,689
Basic earnings per common share $ 1.10   $ 1.34   $ 1.27   $ 0.89   $ 0.56   $ 2.44   $ 0.37
                           
Diluted                          
Net income to common stockholders - diluted $ 27,180   $ 33,122   $ 31,328   $ 22,005   $ 13,440   $ 60,302   $ 8,990
Weighted average common shares outstanding 24,724,128   24,675,109   24,653,099   24,592,092   23,987,049   24,699,754   24,150,689
Dilutive effects of:                          
Assumed exercises of stock options 134,358   130,016   101,664   48,102   38,627   133,219   55,753
Restricted stock awards 139,345   169,514   136,239   67,907   37,751   156,029   66,364
Restricted stock units 73,155   66,714   50,156   18,192   4,689   70,236   13,255
Performance stock units - market based 134,313   128,167   112,228   76,095   6,326   131,240   8,446
Performance stock units - performance based            
Employee stock purchase plan 3,708   1,418         2,563  
Weighted average shares outstanding - diluted 25,209,007   25,170,938   25,053,386   24,802,388   24,074,442   25,193,041   24,294,507
Diluted earnings per common share $ 1.08   $ 1.32   $ 1.25   $ 0.89   $ 0.56   $ 2.39   $ 0.37
                                         

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

  For the Three Months Ended   Six Months Ended June 30,
  June 30,
2021
  March 31,
2021
  December 31,
2020
  September 30,
2020
  June 30,
2020
  June 30,
2021
  June 30,
2020
Stock options 16,939       98,513   148,528   16,939   98,956
Restricted stock awards         109,834   209,040  
Restricted stock units         38,801   17,757  
Performance stock units - market based 13,520         76,461   13,520   76,461
Performance stock units - performance based 265,625   256,625   256,625   261,125   262,625   265,625   262,625
Employee stock purchase plan            
                           

Loans held for investment summarized as of:

(Dollars in thousands) June 30,
2021
  March 31,
2021
  December 31,
2020
  September 30,
2020
  June 30,
2020
Commercial real estate $ 701,576   $ 784,110   $ 779,158   $ 762,531   $ 910,261
Construction, land development, land 185,444   223,841   219,647   244,512   213,617
1-4 family residential properties 135,288   142,859   157,147   164,785   168,707
Farmland 91,122   97,835   103,685   110,966   125,259
Commercial 1,453,583   1,581,125   1,562,957   1,536,903   1,518,656
Factored receivables 1,398,299   1,208,718   1,120,770   1,016,337   561,576
Consumer 12,389   14,332   15,838   17,106   18,450
Mortgage warehouse 853,514   1,031,692   1,037,574   999,771   876,785
Total loans $ 4,831,215   $ 5,084,512   $ 4,996,776   $ 4,852,911   $ 4,393,311
                             

Our banking loan 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.

Banking loans held for investment are further summarized below:

(Dollars in thousands) June 30,
2021
  March 31,
2021
  December 31,
2020
  September 30,
2020
  June 30,
2020
Commercial real estate $ 701,576   $ 784,110   $ 779,158   $ 762,531   $ 910,261
Construction, land development, land 185,444   223,841   219,647   244,512   213,617
1-4 family residential 135,288   142,859   157,147   164,785   168,707
Farmland 91,122   97,835   103,685   110,966   125,259
Commercial - General 290,562   288,458   340,850   342,858   333,793
Commercial - Paycheck Protection Program 135,307   237,299   189,857   223,230   219,122
Commercial - Agriculture 76,346   83,859   94,572   112,221   110,243
Commercial - Equipment 604,396   623,248   573,163   509,849   487,145
Commercial - Asset-based lending 181,394   188,825   180,488   160,711   176,235
Commercial - Liquid Credit 165,578   159,436   184,027   188,034   192,118
Consumer 12,389   14,332   15,838   17,106   18,450
Mortgage Warehouse 853,514   1,031,692   1,037,574   999,771   876,785
Total banking loans held for investment $ 3,432,916   $ 3,875,794   $ 3,876,006   $ 3,836,574   $ 3,831,735
                             

The following table presents the Company’s operating segments:

(Dollars in thousands)                    
Three months ended June 30, 2021   Banking   Factoring   Payments   Corporate   Consolidated
Total interest income   $ 47,356     $ 44,653     $ 2,675     $ 4     $ 94,688  
Intersegment interest allocations   2,723     (2,584 )   (139 )        
Total interest expense   2,610             1,796     4,406  
Net interest income (expense)   47,469     42,069     2,536     (1,792 )   90,282  
Credit loss expense (benefit)   (4,335 )   2,444     218     (133 )   (1,806 )
Net interest income after credit loss expense   51,804     39,625     2,318     (1,659 )   92,088  
Noninterest income   10,018     2,742     1,083     53     13,896  
Noninterest expense   41,860     17,174     10,842     922     70,798  
Operating income (loss)   $ 19,962     $ 25,193     $ (7,441 )   $ (2,528 )   $ 35,186  

 

(Dollars in thousands)                    
Three months ended March 31, 2021   Banking   Factoring   Payments   Corporate   Consolidated
Total interest income   $ 50,556     $ 35,824     $ 1,969     $ 4     $ 88,353  
Intersegment interest allocations   2,942     (2,775 )   (167 )        
Total interest expense   3,542             1,791     5,333  
Net interest income (expense)   49,956     33,049     1,802     (1,787 )   83,020  
Credit loss expense (benefit)   (12,453 )   4,483     292     (167 )   (7,845 )
Net interest income after credit loss expense   62,409     28,566     1,510     (1,620 )   90,865  
Noninterest income   7,750     6,411     73     57     14,291  
Noninterest expense   39,454     16,153     4,135     1,150     60,892  
Operating income (loss)   $ 30,705     $ 18,824     $ (2,552 )   $ (2,713 )   $ 44,264  

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:

  June 30,
2021
  March 31,
2021
  December 31,
2020
  September 30,
2020
  June 30,
2020
Factored receivable period end balance $ 1,284,314,000     $ 1,118,988,000     $ 1,036,548,000     $ 953,434,000     $ 531,933,000  
Yield on average receivable balance 14.99 %   13.85 %   13.80 %   15.59 %   15.34 %
Current quarter charge-off rate(1) 0.04 %   3.95 %   0.02 %   0.09 %   0.16 %
Factored receivables - transportation concentration 91 %   90 %   89 %   88 %   85 %
                   
Interest income, including fees $ 44,653,000     $ 35,824,000     $ 35,439,000     $ 30,068,000     $ 20,387,000  
Non-interest income(2) 2,742,000     1,757,000     1,358,000     1,157,000     1,072,000  
Factored receivable total revenue 47,395,000     37,581,000     36,797,000     31,225,000     21,459,000  
Average net funds employed 1,072,405,000     936,528,000     924,899,000     694,170,000     477,112,000  
Yield on average net funds employed 17.73 %   16.27 %   15.83 %   17.89 %   18.09 %
                   
Accounts receivable purchased $ 3,068,262,000     $ 2,492,468,000     $ 2,461,249,000     $ 1,984,490,000     $ 1,238,465,000  
Number of invoices purchased 1,401,695     1,188,678     1,189,271     1,027,839     812,902  
Average invoice size $ 2,189     $ 2,097     $ 2,070     $ 1,931     $ 1,524  
Average invoice size - transportation $ 2,090     $ 1,974     $ 1,943     $ 1,787     $ 1,378  
Average invoice size - non-transportation $ 4,701     $ 4,775     $ 5,091     $ 5,181     $ 4,486  

 

(1) March 31, 2021 includes a $41.3 million charge-off related to the TFS acquisition, which contributed approximately 3.94% to the net charge-off rate for the quarter.
   
(2) Total factoring segment non-interest income was $6.4 million, $15.5 million, and $3.2 million for the three months ended March 31, 2021, December 31, 2020 and September 30, 2020.

March 31, 2021 non-interest income used to calculate yield on average net funds employed excludes a $4.7 million gain on our indemnification asset.

December 31, 2020 non-interest income used to calculate yield on average net funds employed excludes a gain of $8.9 million related to CVLG’s delivery of proceeds resulting from the liquidation of its acquired stock and a $5.3 million gain on our indemnification asset. 

September 30, 2020 non-interest income used to calculate yield on average net funds employed excludes a $2.0 million gain recognized on the increased value of the receivable due from CVLG resulting from the amended TFS acquisition agreement.

Information pertaining to our payments segment, which includes only our TriumphPay division, summarized as of and for the quarters ended:

  June 30,
2021
  March 31,
2021
  December 31,
2020
  September 30,
2020
  June 30,
2020
Factored receivable period end balance $ 113,985,000     $ 89,730,000     $ 84,222,000     $ 62,903,000     $ 29,643,000  
                   
Interest income $ 2,675,000     $ 1,969,000     $ 2,034,000     $ 1,361,000     $ 692,000  
Noninterest income 1,083,000     73,000     51,000     47,000     12,000  
Total revenue $ 3,758,000     $ 2,042,000     $ 2,085,000     $ 1,408,000     $ 704,000  
                   
Pre-tax operating income (loss) $ (7,441,000 )   $ (2,552,000 )   $ (2,026,000 )   $ (1,936,000 )   $ (2,823,000 )
Interest expense 139,000     167,000     178,000     147,000     88,000  
Depreciation and software amortization expense 68,000     65,000     63,000     63,000     63,000  
Intangible amortization expense 497,000                  
Earnings (losses) before interest, taxes, depreciation, and amortization $ (6,737,000 )   $ (2,320,000 )   $ (1,785,000 )   $ (1,726,000 )   $ (2,672,000 )
Transaction costs 2,992,000                  
Adjusted earnings (losses) before interest, taxes, depreciation, and amortization(1) $ (3,745,000 )   $ (2,320,000 )   $ (1,785,000 )   $ (1,726,000 )   $ (2,672,000 )
                   
Number of invoices processed 3,165,119     2,529,673     1,818,145     1,408,232     767,180  
Amount of payments processed $ 3,426,808,000     $ 2,301,632,000     $ 1,920,037,000     $ 1,221,305,000     $ 667,354,000  

 

(1) Adjusted earnings (losses) before interest, taxes, depreciation, and amortization excludes material gains and expenses related to merger and acquisition-related activities and is a non-GAAP financial measure used to provide meaningful supplemental information regarding the segment's operational performance and to enhance investors' overall understanding of such financial performance by removing the volatility associated with certain acquisition-related items that are unrelated to our core business.

 

Deposits summarized as of:

(Dollars in thousands) June 30,
2021
  March 31,
2021
  December 31,
2020
  September 30,
2020
  June 30,
2020
Non-interest bearing demand $ 1,803,552   $ 1,637,653   $ 1,352,785   $ 1,315,900   $ 1,120,949
Interest bearing demand 760,874   729,364   688,680   634,272   648,309
Individual retirement accounts 87,052   89,748   92,584   94,933   97,388
Money market 395,035   402,070   393,325   384,476   397,914
Savings 474,163   464,035   421,488   405,954   391,624
Certificates of deposit 612,730   740,694   790,844   857,514   937,766
Brokered time deposits 306,975   516,006   516,786   344,986   258,378
Other brokered deposits 285,069   210,095   460,108   210,066   210,004
Total deposits $ 4,725,450   $ 4,789,665   $ 4,716,600   $ 4,248,101   $ 4,062,332
                             

Net interest margin summarized for the three months ended:

  June 30, 2021   March 31, 2021
(Dollars in thousands) Average
Balance
  Interest   Average
Rate
  Average
Balance
  Interest   Average
Rate
Interest earning assets:                      
Interest earning cash balances $ 572,485   $ 158   0.11 %   $ 478,275   $ 126   0.11 %
Taxable securities 165,786   967   2.34 %   189,407   1,428   3.06 %
Tax-exempt securities 33,451   220   2.64 %   34,717   222   2.59 %
FHLB and other restricted stock 9,518   27   1.14 %   8,511   76   3.62 %
Loans 4,814,050   93,316   7.77 %   4,848,275   86,501   7.24 %
Total interest earning assets $ 5,595,290   $ 94,688   6.79 %   $ 5,559,185   $ 88,353   6.45 %
Non-interest earning assets:                      
Other assets 498,515           454,483        
Total assets $ 6,093,805           $ 6,013,668        
Interest bearing liabilities:                      
Deposits:                      
Interest bearing demand $ 757,529   $ 469   0.25 %   $ 701,759   $ 384   0.22 %
Individual retirement accounts 88,142   143   0.65 %   91,074   186   0.83 %
Money market 398,290   216   0.22 %   398,015   229   0.23 %
Savings 468,517   178   0.15 %   446,322   167   0.15 %
Certificates of deposit 664,478   1,157   0.70 %   765,244   1,955   1.04 %
Brokered time deposits 138,102   51   0.15 %   167,881   179   0.43 %
Other brokered deposits 685,397   256   0.15 %   803,009   272   0.14 %
Total interest bearing deposits 3,200,455   2,470   0.31 %   3,373,304   3,372   0.41 %
Federal Home Loan Bank advances 39,341   22   0.22 %   35,833   24   0.27 %
Subordinated notes 87,590   1,350   6.18 %   87,532   1,349   6.25 %
Junior subordinated debentures 40,251   446   4.44 %   40,125   442   4.47 %
Other borrowings 138,649   118   0.34 %   171,902   146   0.34 %
Total interest bearing liabilities $ 3,506,286   $ 4,406   0.50 %   $ 3,708,696   $ 5,333   0.58 %
Non-interest bearing liabilities and equity:                      
Non-interest bearing demand deposits 1,749,858           1,494,001        
Other liabilities 51,257           64,122        
Total equity 786,404           746,849        
Total liabilities and equity $ 6,093,805           $ 6,013,668        
Net interest income     $ 90,282           $ 83,020    
Interest spread         6.29 %           5.87 %
Net interest margin         6.47 %           6.06 %
                           

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.

Additional information pertaining to our loan portfolio, including loans held for investment and loans held for sale, summarized for the quarters ended:

(Dollars in thousands) June 30,
2021
  March 31,
2021
  December 31,
2020
  September 30,
2020
  June 30,
2020
Average Banking loans $ 3,516,747     $ 3,722,895     $ 3,777,553     $ 3,707,293     $ 3,846,994  
Average Factoring receivables 1,195,209     1,048,968     1,024,307     768,087     534,943  
Average Payments receivables 102,094     76,412     74,947     50,683     27,738  
Average total loans $ 4,814,050     $ 4,848,275     $ 4,876,807     $ 4,526,063     $ 4,409,675  
Banking yield 5.25 %   5.31 %   5.34 %   5.23 %   5.27 %
Factoring yield 14.99 %   13.85 %   13.80 %   15.59 %   15.34 %
Payments Yield 10.51 %   10.45 %   10.80 %   10.68 %   10.03 %
Total loan yield 7.77 %   7.24 %   7.20 %   7.05 %   6.52 %
                             

Metrics and non-GAAP financial reconciliation:

    As of and for the Three Months Ended   As of and for the Six Months Ended
(Dollars in thousands,
except per share amounts)
  June 30,
2021
  March 31,
2021
  December 31,
2020
  September 30,
2020
  June 30,
2020
  June 30,
2021
  June 30,
2020
Net income available to common stockholders   $ 27,180       $ 33,122       $ 31,328       $ 22,005       $ 13,440       $ 60,302       $ 8,990    
Transaction costs   2,992                   827             2,992          
Gain on sale of subsidiary or division                           (9,758 )           (9,758 )  
Tax effect of adjustments   (715 )                 (197 )     2,451       (715 )     2,451    
Adjusted net income available to common stockholders - diluted   $ 29,457       $ 33,122       $ 31,328       $ 22,635       $ 6,133       $ 62,579       $ 1,683    
                             
Weighted average shares outstanding - diluted   25,209,007       25,170,938       25,053,386       24,802,388       24,074,442       25,193,041       24,294,507    
Adjusted diluted earnings per common share   $ 1.17       $ 1.32       $ 1.25       $ 0.91       $ 0.25       $ 2.48       $ 0.07    
                             
Average total stockholders' equity   $ 786,404       $ 746,849       $ 720,892       $ 688,327       $ 610,258       $ 766,736       $ 618,808    
Average preferred stock liquidation preference   (45,000 )     (45,000 )     (45,000 )     (45,000 )     (5,934 )     (45,000 )     (2,967 )  
Average total common stockholders' equity   741,404       701,849       675,892       643,327       604,324       721,736       615,841    
Average goodwill and other intangibles   (220,310 )     (188,980 )     (191,017 )     (192,682 )     (187,255 )     (204,732 )     (188,307 )  
Average tangible common stockholders' equity   $ 521,094       $ 512,869       $ 484,875       $ 450,645       $ 417,069       $ 517,004       $ 427,534    
                             
Net income available to common stockholders   $ 27,180       $ 33,122       $ 31,328       $ 22,005       $ 13,440       $ 60,302       $ 8,990    
Average tangible common equity   521,094       512,869       484,875       450,645       417,069       517,004       427,534    
Return on average tangible common equity   20.92   %   26.19   %   25.70   %   19.43   %   12.96   %   23.52   %   4.23   %
                             
Net interest income   $ 90,282       $ 83,020       $ 83,598       $ 74,379       $ 64,251       $ 173,302       $ 126,751    
Non-interest income   13,896       14,291       22,386       10,493       20,029       28,187       27,506    
Operating revenue   104,178       97,311       105,984       84,872       84,280       201,489       154,257    
Gain on sale of subsidiary or division                           (9,758 )           (9,758 )  
Adjusted operating revenue   $ 104,178       $ 97,311       $ 105,984       $ 84,872       $ 74,522       $ 201,489       $ 144,499    
Non-interest expenses   $ 70,798       $ 60,892       $ 59,298       $ 55,297       $ 52,726       $ 131,690       $ 107,479    
Transaction costs   (2,992 )                 (827 )           (2,992 )        
Adjusted non-interest expenses   $ 67,806       $ 60,892       $ 59,298       $ 54,470       $ 52,726       $ 128,698       $ 107,479    
Adjusted efficiency ratio   65.09   %   62.57   %   55.95   %   64.18   %   70.75   %   63.87   %   74.38   %
                             
Adjusted net non-interest expense to average assets ratio:                            
Non-interest expenses   $ 70,798       $ 60,892       $ 59,298       $ 55,297       $ 52,726       $ 131,690       $ 107,479    
Transaction costs   (2,992 )                 (827 )           (2,992 )        
Adjusted non-interest expenses   $ 67,806       $ 60,892       $ 59,298       $ 54,470       $ 52,726       $ 128,698       $ 107,479    
Total non-interest income   $ 13,896       $ 14,291       $ 22,386       $ 10,493       $ 20,029       $ 28,187       $ 27,506    
Gain on sale of subsidiary or division                           (9,758 )           (9,758 )  
Adjusted non-interest income   $ 13,896       $ 14,291       $ 22,386       $ 10,493       $ 10,271       $ 28,187       $ 17,748    
Adjusted net non-interest expenses   $ 53,910       $ 46,601       $ 36,912       $ 43,977       $ 42,455       $ 100,511       $ 89,731    
Average total assets   $ 6,093,805       $ 6,013,668       $ 5,788,549       $ 5,518,708       $ 5,487,072       $ 6,053,826       $ 5,196,815    
Adjusted net non-interest expense to average assets ratio   3.55   %   3.14   %   2.54   %   3.17   %   3.11   %   3.35   %   3.47   %
                             
Total stockholders' equity   $ 792,388       $ 764,004       $ 726,781       $ 693,842       $ 656,871       $ 792,388       $ 656,871    
Preferred stock liquidation preference   (45,000 )     (45,000 )     (45,000 )     (45,000 )     (45,000 )     (45,000 )     (45,000 )  
Total common stockholders' equity   747,388       719,004       681,781       648,842       611,871       747,388       611,871    
Goodwill and other intangibles   (286,567 )     (188,006 )     (189,922 )     (192,041 )     (186,162 )     (286,567 )     (186,162 )  
Tangible common stockholders' equity   $ 460,821       $ 530,998       $ 491,859       $ 456,801       $ 425,709       $ 460,821       $ 425,709    
Common shares outstanding   25,109,703       24,882,929       24,868,218       24,851,601       24,202,686       25,109,703       24,202,686    
Tangible book value per share   $ 18.35       $ 21.34       $ 19.78       $ 18.38       $ 17.59       $ 18.35       $ 17.59    
                             
Total assets at end of period   $ 6,015,877       $ 6,099,628       $ 5,935,791       $ 5,836,787       $ 5,617,493       $ 6,015,877       $ 5,617,493    
Goodwill and other intangibles   (286,567 )     (188,006 )     (189,922 )     (192,041 )     (186,162 )     (286,567 )     (186,162 )  
Tangible assets at period end   $ 5,729,310       $ 5,911,622       $ 5,745,869       $ 5,644,746       $ 5,431,331       $ 5,729,310       $ 5,431,331    
Tangible common stockholders' equity ratio   8.04   %   8.98   %   8.56   %   8.09   %   7.84   %   8.04   %   7.84   %
                                                         

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 Six Months Ended
(Dollars in thousands) June 30,
2021
  March 31,
2021
  December 31,
2020
  September 30,
2020
  June 30,
2020
  June 30,
2021
  June 30,
2020
Loan discount accretion $ 2,161   $ 3,501   $ 2,334   $ 4,104   $ 2,139   $ 5,662   $ 4,273
                                         

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, Director of Corporate Communication
atavackoli@tbkbank.com
214-365-6930

 

Primary Logo

Source: Triumph Bancorp, Inc.
Print Page
Email Alerts
RSS Feeds
Contact IR